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2015-04-02 Special Work Session Kodiak Island Borough Assembly Work Session Thursday, April 2, 2015, 6:30 p.m., Borough Assembly Chambers Work Sessions are informal meetings of the Assembly where Assembly members review the upcoming regular meeting agenda packet and seek or receive information from staff.Although additional items not listed on the work session agenda are discussed when introduced by the Mayor,Assembly.or staff,no formal action is taken at work sessions and items that require formal Assembly action are placed on regular Assembly meeting agenda.Citizen's comments at work sessions are NOT considered part of the official record.Citizen's comments intended for the"official record"should be made at a • regular Assembly meeting. Page • 1. CITIZENS' COMMENTS (Limited to Three Minutes per Speaker) 2. AGENDA ITEMS 2 - 201 A. Review of the Comprehensive Annual Financial Report (CAFR). KIB CAFR Final 2014.pdf 202 - 215 B. Discussion on Approval of Change Order No. 42 Amending OA Contract No. FY2013-24 for the Kodiak High School Addition and Renovation Project. PCO Mail Merge - 2015326164345.pdf KHS Addition & Renovation Cost Summary site plan with lerning center remaining.pdf EPA information.pdf Learning Center Remaining email.pdf Learning Center Layout.pdf • • • Page 1 of 215 AGENDA ITEM #2.A. . LAND. • Xi - 4:- 'Or 4 , a . , . . . . . , .. . . .. .. . .. . .,..4N act, . .e 4.. . • _ 11.4 A -; , 7 4,4 r r1LT\Y KA: •/y$.' • • .. ®DIAK: ISLA, p .BOR000H - ..t;_ ,� KODIAK -* `LASS , �' f . _,.7wr , . * f e` t- - s:8 r !' Y ANNUAL TINA CIAL 'EPO ' 1' ! r « � - „ .; w.m•.,_sue.=. , f � f1 201 3•a-�J 30, 2016 sow . y ..• i - — rank - RR _h.. '� fi ' a gilf@ O�,,1 S. A YAli O —Wl Page 2 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. 1 KODIAK ISLAND BOROUGH Comprehensive Annual Financial Report Year Ended June 30, 2014 Official Issuing Report Karleton G. Short Finance Director Page 3 of 215 • Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH TABLE OF CONTENTS June 30,2014 Page INTRODUCTORY SECTION: Letter of Transminal .1-4 GFOA Certificate of Achievement 5 Organizational Chart 6 Elected Officials(Photographs) 7 Borough Officials 8 Map of Kodiak Island Borough 9 FINANCIAL SECTION: tadepeudeot Auditor's Report 10-12 Management's Discussion and Analysis 13-22 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 23 Statement of Activities 24 Fund Financial Statements: Balance Sheet—Governmental Funds 25 Reconciliation of Net Position Between the Government-Wide and the Fund Financial Statements 26 Statement of Revenues,Expenditures,and Changes in Fund Balances(Deficits)— Govemmental Funds 27 Reconciliation of the Statement of Revenues,Expenditures,and Changes in Fund' Balances(Deficits)of Governmental Funds to the Statement of Activities 28 Statement of Net Position—Proprietary Funds—Business-Type Activities—Enterprise Funds 29 Statement of Revenues,Expenses,and Changes in Net Position—Proprietary Funds— Business-Type Activities—Enterprise Funds 30 Statement of Cash Flows—Proprietary Funds—Business-Type Activities—Enterprise Funds 31-32 Notes to Basic Financial Statements 33-72 Required Supplementary Information: Budgetary Comparison Schedule—General Fund 73-74 Budgetary Comparison Schedule—Special Revenue Fund—Education Support 75 Budgetary Comparison Schedule—Special Revenue Fund—Facilities 76 Notes to Required Supplementary Information—Budgetary Comparison Schedules 77 Additional Supplementary Information: Budgetary Comparison Schedule—Debt Service Fund—Education and Health 78 Nonmajor Governmental Funds: Combining Balance Sheet 79 Combining Statement of Revenues,Expenditures,and Changes in Fund Balances 80 Nonmajor Special Revenue Funds: Combining Balance Sheet 81-84 Page 4 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH TABLE OF CONTENTS,CONTINUED r ' Page Additional Supplementary Information.continued Combining Statement of Revenues,Expenditures and Changes in Fund Balances (Deficits) 85-88 • Schedule of Revenues,Expenditures,and Changes in Fund Balance(Deficit)— Budget and Actual: Fire and Road Service Areas: Fire: Fire Protection Area No. 1 89 Womens Bay Fire Department 90 Kodiak Airport Fire District 91 Road: Monashka Bay Road Service Area 92 Service Area No. I 93 Women Bay Road Service Area 94 • Bay View Road Service Area 95 Service Area No.2 96 L.E.P.C. 97 Land Sales 98 Buildings and Grounds 99 Woodland Acres Street Light Service Area 100 • Trinity Islands Street Light Service Area 101 Tourism Development 102 Mission Lake Tide Gate 103 Fern Fuller Trust 104 Trinity Islands Paving 105 Oil Spill Disaster 106 Nonmajor Capital Project Funds: Combining Balance Sheet 107 Combining Statement of Revenues,Expenditures and Changes in Fund Balances 108 • (continued) Page 5 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH TABLE OF CONTENTS,CONTINUED Enterprise Funds: 1 Schedule of Revenues, Expenses,and Changes in Net Position—Budget and Actual: Municipal Solid Waste Collection and Disposal 109 Hospital Facilities 110 Kodiak Fisheries Research Center 11 l 911 Services Fund 112 Supplementary Bond Schedules: Summary of Bonded Debt Service Requirements to Maturity 113 General Obligation Bond,2004 Series D—Retirement Schedule 114 General Obligation Bond,2008 Series A—Retirement Schedule 115 General Obligation Bond,2011 Series One—Retirement Schedule 116 General Obligation Bond,2012 Series A—Retirement Schedule 117 General Obligation Bond,2012 Series B—Retirement Schedule 118 General Obligation Bond,2013 Series One—Retirement Schedule 119 General Obligation Bond,2014 Series One—Retirement Schedule 120 STATISTICAL SECTION: Statistical Section Index Net Position by Component -Last Ten Fiscal Years 121 Changes in Net Position—Last Ten Fiscal Years 122 Fund Balances of Governmental Funds—Last Five Fiscal Years 123 Changes in Fund Balances of Governmental Funds—Last Ten Fiscal Years 124 General Revenues by Source—Last Ten Fiscal Years 125 Assessed and Estimated Actual Value of Taxable Property—Last Ten Fiscal Years 126 Direct and Overlapping Property Tax Rates and Contributions to the School District— Last Ten Fiscal Years 127 Property Tax Levies and Collections—Last Ten Fiscal Years 128 Principal Property Tax Payers—Current Year and Ten Years Ago 129 Ratios of Net Bonded Debt—Last Ten Fiscal Years 130 Computation of Direct and Overlapping Debt 131 Legal Debt Margin Information—Last Ten Fiscal Years 132 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures and Transfers—Last Ten Fiscal Years 133 Ratios of Outstanding Debt by Type—Last Ten Fiscal Years 134 Demographic and Economic Statistics-Last Ten Fiscal Years 135 Average Monthly Employment&Earnings—Last Ten Fiscal Years 136 Miscellaneous Statistical Data—Last Ten Fiscal Years 137 • Property Value,Construction and Bank Deposits—Last Ten Fiscal Years 138 Full-Time Equivalent Borough Employees by Function/Program-Last Ten Fiscal Years 139 Operating Indicators by Function L Last Ten Fiscal Years 140 Capital Asset Statistics by Fuitction/Prograrn—Last Ten Fiscal Years 141 Page 6 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • • i I I I (This page was left blank intentionally) I I I 1 • • I i I • • i • I • Page 7 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • INTRODUCTORY SECTION i • Page 8 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. R¢R ° /;,,, Kodiak Island Borough a a ,;7.04 Finance Department 710 Mill Bay Road % ~/w+ Kodiak,Alaska 99615 Phone(907)486-9323 Fax(907)486-9392 December 31,2014 Members of the Assembly Kodiak Island Borough,Alaska State of Alaska statutes and local charter provisions require that all general-purpose local governments publish a complete set of financial statements presented in conformity with generally accepted accounting principles in the United States of America(GAAP)and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the Kodiak Island Borough (Borough) for the fiscal year ended June 30,2014. This report consists of management's representations concerning the finances of the Borough. Consequently,management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for Making these representations, management of the Borough has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Borough's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits,the Borough's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement.As management, we assert that,to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The Borough's financial statements have been audited by Altman, Rogers & Co., a firm of licensed certified public accountants. The goal of the independent audit was to form an opinion on whether the financial statements of the Borough, for the fiscal year ended June 30,2014,are presented fairly, in all material lLapats, in accordance with generally accepted-accounting principles in the United States of America. The independent audit involved examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements;assessing the accounting principles used and significant estimates made by management;.and evaluating the overall financial statement presentation. The independent auditor issued an unqualified opinion on the Borough's financial statements for the fiscal year ended June 30, 2014. The,independent auditors'report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the Borough was part of broader, State and federally mandated "Single Audits" designed to meet the special needs of State and federal 1 Page 9 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the'fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal -requirements involving the administration of State and federal awards. These reports are available in the Borough's separately issued Single Audit Report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's'Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it.The Borough's MD&A can be found immediately following the report of the independent auditors. Profile of the Government The Kodiak Island Borough lies at the western border of the Gulf of Alaska, approximately 40 miles south of the Kenai Peninsula. Kodiak Island is the largest island in Alaska and the second largest in the United States. About two-thirds of the Borough lies in the Kodiak archipelago with the remaining third on the Alaska Peninsula, across the Shelikof Strait from Kodiak Island. The Shelikof Strait is only 20 miles wide in places.'The Borough encompasses 7,130 square miles, making it slightly smaller than the State-of Massachusetts and serves a population of 13,824. The Borough was incorporated September 30, 1963, as a Second Class Borough by Chapter 146 Sessions, Laws of Alaska 1961, as amended. The powers granted to the Borough include,area- wide powers and non area wide powers. Area-wide powers are health, education, planning and zoning, emergency services planning; and assessment and collection of takes for both the Borough and cities within the Borough. Non area-wide powers•include parks and recreation, economic development, solid waste disposal animal control, fire protection, street lighting and road maintenance and construction. A Manager form of government governs the Borough. The Mayor:is elected at large while the Borough Assembly appoints the Manager..The Assembly is composed of seven members who are elected at-large. The Borough provides a full range of services including fire protection, the construction and maintenance of roads and other infrastructure, conununity and economic development, health, culture and recreation and solid waste collection and disposal. The Borough also is financially accountable for a legally separate school district which is reported separately within the Borough's financial statements. Additional information on this legally separate entity can be found in the basic financial statements. The annual budget serves as the foundation for the Borough's financial planning and control. All departments of the Borough are.required to submit requests for appropriation to the Borough Manager. The Borough Manager uses these requests as the starting point for developing a proposed budget. The Borough Manager then presents this proposed budget•to the Assembly for review by April 30.The assembly is required to hold public hearings on the proposed budget and to adopt a final budget by no later than June 10. The appropriated budget is prepared by fund and department.The Assembly makes appropriation transfers'between funds and/or departments only after the adoption of an ordinance. Borough staff may execute transfers between line items 2 Page 10 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. within a department.Amendments to the budget can occur anytime during the fiscal year through the Borough Assembly or administrative action. Expenditures may not legally exceed appropriations at the following levels: Capital Project Funds — project level, all other fiords — department level. All funds, except Capital Project Funds, are budgeted on an annual basis encompassing a fiscal year. Budgets of Capital Project Funds generally encompass the period from start-up to project completion, which is generally greater than one year. Budget-to-actual comparisons are provided in this report for each individual governmental and proprietary fund for which an appropriated annual budget has been adopted. For the General Fund, the Education Support Special Revenue Fund and the Facilities Special Revenue Fund, this comparison is presented on pages 73-76 as part of required supplementary information. For governmental funds, other than the General Fund, the Education Support Special Revenue Fund and the Facilities Special Revenue Fund, this comparison is presented in the additional supplementary information subsection of this report, which starts on page 78. Also included in the additional supplementary information subsection are the Education and Health Debt Service Fund budget to actual. For proprietary funds,this comparison is presented in the proprietary funds subsection of this report,which starts on page 109. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Borough operates. Local economy. The economic condition of the Kodiak Island Borough remains healthy. The main industries of the Borough are commercial fishing, logging, and tourism: The commercial fishing industry in Kodiak has been very strong. Severance taxes on seafood increased from $980,109 in FY2005 to $1,715,496 in FY2014, a 75% increase. Logging has increased over the last ten years from $17,013 to$96,014 but it is not a material revenue source.Tourism continues to be strong in Kodiak. Bed tax revenues have increased from$20,886 in FY2005 to$75,042 in FY2014,an increase of 259%.Considering today's economy this is very good. To accommodate this demand, construction of fishing lodges, bed and breakfast accommodations and recreational facilities has increased along with an increase in charter boat and guide operations. Cruise ships continue to visit Kodiak. The Kodiak Island Borough is also home to the aerospace industry, which began with construction of the Kodiak Launch Complex in 1998. Owned by the Alaska Aerospace Development Corporation (AADC), a public corporation of the State of Alaska, the Kodiak Launch complex is the first complete launch facility built in the United States since the 1960's and the first not owned by the Federal Government.The state-of-the-art facility includes a launch control center, payload processing facility, spacecraft assembly building and launch pad. It is designed to handle small to medium sized rockets used to launch low earth orbit satellites, as well as military,scientific and research missions. Kodiak is home to the largest U.S. Coast Guard base in the country, employing nearly 1,350 people and providing vital services to the marine industries that are an integral part of Kodiak's make-up as well as making a si•nificant contribution to the Kodiak community. 3 Page 11 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. The seafood industry is by,far the largest industry.in the Kodiak Island Borough.This industry includes commercial fishing, fisheries research, management and enforcement; seafood processing, and maintenance and support services. Kodiak is home to the largest port in the State, housing over 500 commercial vessels and consistentl'. ranks.among the top ten ports in the United States in terms of amount and value of product delivered. In 2012393,000,000 pounds of sea food was landed with a value of$148;086,957. Employment varies throughout the year with July.August,.and September being the peak months due•to the increased activity in the fisheries and related businesses, and then declines in November and December when fishing quotas are reached. The local unemployment rate has fluctuated from 5:2% to 8.3% over the last ten years. but the overall average has remained around 6.7%. Long-term financial planning:Every year the Borough adopts a five-year strategic plan. In this plan the Borough decides what its goals and objectives are for the next five years. The Borough { • breaks these goals out based on our Mandatory and Adopted powers. To view the complete Strategic plan you can visit our web site at www.kodiakak.us. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Borough for its comprehensive annual financial report for the fiscal year ended.June 30,'2013.'This • was the twenty-fourth consecutive year that the Borough has received this prestigious award. In •order to be awarded a Certificate of Achievement, a government must publish an easily readable and elfcienily organised comprehensive.annual-financial report: This report must satisfy' both generally accepted accounting principles and applicable,legal requirements. • A Certificate of Achievement is valid for a period of one year.only:We believe-that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA io determine its eligibility for another certificate.. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the administration and finance department. We would .like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit must be given io the mayor and the assembly for their unfailing support for maintaining the highest standards of professionalism in the management of the Borough's finances. Respectfully submitted, eet.rmcfa4t • • Charles E.Cassidy Jr. Karleton G. Short • Borough Manager Director of Finance 4 i Page 12 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. GD Government Finance Officers Association Certificate of -Achievement for Excellence in Financial Reporting Presented to Kodiak Island Borough Alaska For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2013 *Cr leSta • Executive Director/CEO 5 Page 13 of 215 • Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. Kodiaklsland Borough FY2014 Electorate Borough Mayor Borough Assembly Borough Manager Borough Attorney 1 Borough Clerk Grant Writer/Spec Proj Support Resource Mgt Officer Deputy Clerk HR Officer/Executive Assistant Assistant Clerk Engineering/Facilities Fire Chief Assessing Community Development Finance/MIS Director Maintenance Coordinator Assessor Director Director Maintenance Mechanic Property Appraiser Associate Planner Ear= Appraiser Technician Associate Planner Ant Accountant III Appraiser Technician Code Enforcement Officer Accounting Tec h/AP Baler Assessment Clerk I Secretary III Accounting Tech/ Baler/Landfill Supervisor Baler Op II Payroll Baler Op I l Baler Op I Revenue Accountant Baler Op 1 Cashier Baler Op KFR( MIS Interpretive Spec/Rec. IT Supervisor Interpretive Spec./Rec. Programmer/Analyst Maintenance Engineer GIS Analyst proieSts PC Tech II Project Manager/Insp. Construction Insp./Engr Secretary III Project Manager Project Assistant Secretary III • • 6 Page 14 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. MAYOR AND ASSEMBLY MEMBERS fe a • Ott Pe. r tat ' ' ft /) Carol Austerman, Tuck Bonney, 14' At Large,2016 At Large,2014 • a f p v + Jerrol l Friend,Mayor,2014 %fii? !•'Jlr.� '�' Dave Kaplan, Aaron Griffin, At Large,2014 At Large,2015 '; - ` /r Mel Stephens, Frank Peterson,Jr., At Large,2014 At Large,2016 a Chris Lynch, Deputy Presiding Officer(DPO), At Large,2015 7 Page 15 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH KODIAK,ALASKA BOROUGH OFFICIALS YEAR ENDED JUNE 30.2014 MAYOR Jerrol Friend'14 ASSEMBLY Carol Austennan'16 Tuck Bonney'14 Aaron Griffin'15 Dave Kaplan'14 Chris Lynch'15 . Mel Stephens'14 Frank R.Peterson'16 MANAGEMEN'1' Charles 'Bud r Cassidy Borough Manager Karleton G.Short Finance Director/Treastirer Robert Tucker Engineering and Facilities Director Nova Javier.CMC - - Borough Clerk Bill Roberts Borough Assessor • Robert A.llimes Fire Chief Levesque Law Group,LLC Borough Attorney(Contracted Firm) . Stuart McDonald Superintendent,School District Dria Bray:11olloway General Accountant Dora Cross Revenue Accountant • Paul Van Dyke IT Supervisor Lauri Whiddon • 11R officer/Executive Assistant • 8 Page 16 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM#2.A. esfr Q 3 , Z /i 6 a I a al ' . c' y1 / 1..,r 4pV I t 4 ‘ISS Hi 1 0'r 9 Page 17 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. % (This page was left blank intentionally) I . I i i • Page 18 of 215 Review of the Comprehensive Annual Financial Report(CAFR). • AGENDA ITEM #2.A. FINANCIAL SECTION . ( J Page 19 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. 1 Altman Rogers 8-9 CO. I ACCOUNTANTS Independent Auditor's Report i The Honorable Mayor and Members of the Assembly Kodiak Island Borough Kodiak,Alaska Report on the Financial Statements i We have audited the accompanying financial statements of the govemrnental activities,the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the Kodiak Island Borough, as of and for the year ended June 30, 2014, and the related notes to the financial statements,which collectively comprise the Borough's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted 1 our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to ftnanoialaudits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in i the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements,whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the,entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management,as well as evaluating the overall presentation of the financial statements. 10 425 G Street Suite 500 Anchorage. Alaska 99501 Phone 907.274.2992 Fax 907-274-2993 Offices in Juneau and Soldotna A Professional Corporation Page 20 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. The.Honorable Mayor and Members of the Assembly Kodiak Island Borough • We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects. the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit,each major fund,and the aggregate remaining fund information of the Kodiak gland Borough, as of June 30, 2014, and the respective changes in financial position and, where applicable,cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages 13-22 and the Budgetary Comparison Schedules and notes to RSI on pages 73-77 be presented to supplement the basic financial statements. Such inforniation, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential pan of financial reporting for placing the basic financial statements in an • appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards.generally accepted in the United States of America,which consisted of inquiries of management about the Methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements,and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information • • Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Kodiak Island Borough's basic financial statements. The information listed in the table'of contents as"Additional Supplementary Information",which includes Budgetary Comparison Schedule— Debt Service Fund— Education and Health, Nonmajor Governmental Funds: Combining Balance Sheet and Combining Statement of Revenues, Expenditures,and Changes in Fund Balances,Nonmajor Special Revenue Funds: Combining Balance Sheet, Combining Statement of Revenues, Expenditures and Changes in Fund Balances(Deficits), and Schedules of Revenues, Expenditures, and Changes in Fund Balance(Deficit)—Budget and Actual, Nonmajor Capital Project Funds: Combining Balance Sheet and Combining Statement of Revenues, Expenditures and Changes in Fund Balances are presented for purposes of additional analysis and are not a required part of the basic financial statements. I Page 21 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. The Honorable Mayor and Menibers of the Assembly Kodiak Island Borough The.Additional Supplementary Information listed above is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and.reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. Imour opinion, the Additional Supplementary Information listed above is fairly stated,in all material_respects,in relation to the basic financial statements as a whole. The Introductory Section,the Supplementary Bond Schedules and the Statistical Section,as identified in the table of contents,have not been subjected to the auditing procedures applied in the audit of the basic financial statements,and accordingly,we do not express an opinion or provide"any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 31, 2014 on our consideration of the Kodiak Island Borough's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.The purpose of that report is to describe the scope of out testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Kodiak Island Borough's internal control over financial reporting and compliance. l, r 14144. fl o. Anchorage,Alaska December 31,2014 • 12 Page 22 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. I1 (This page was left blank intentionally) • • I i ) j r ' Page 23 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Management's Discussion and Analysis June 30,2014 As management of the Kodiak Island Borough, we offer readers of these financial statements this narrative overview and analysis of the financial activities of the Kodiak Island Borough for the fiscal year ended June 30, 2014. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal,which can be found on pages I -4 of this report. Financial Highlights • The assets of the Kodiak Island Borough exceeded its liabilities at the close of FY2014 by$175,412,469. Of this amount, $58,869,719 (unrestricted net position) may be used to meet the Borough's ongoing obligations to citizens and creditors. • In FY2014 the Borough's total net position increased by'$13,110,572. • Equity in our central treasury decreased $11,792,274. This decrease was mainly due to capital expenditures. • At the end of the current fiscal year,the Borough's governmental funds reported combined fund balances of$72,318,860. This was a decrease of$3,497,624, compared to the net change in the prior year of an increase of $20,645,719. At the end of FY2014, unassigned fund balance for the general fund was $3,502,489. This was 57%of total general fund expenditures. • • The Borough's bonds payable increased by$20,991,442. This was due to the issuance of a $22,660,000 general obligation bond with a'premium of$2,427,432 less payments of$4,095,990 in bond principal and premium. Overview of the Financial Statements Government wide Financial Statements The government wide financial statements are designed to provide readers with a broad overview of the Kodiak Island Borough's finances,in a manner similar to a private sector business. The statement of net position presents information on all of the Kodiak Island Borough's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Kodiak Island Borough is improving or deteriorating. The statement of activities presents information showing how the government's net position changed during the most recent fiscal year.All changes in het position are reported as soon as the underlying event giving rise to the change occurs, regardless fit'the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. Both of the government wide financial statements distinguish functions of the Kodiak Island Borough that are principally supported by taxes,and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges(business-type activities).The governmental activities of the Kodiak Island Borough include general government,public safety, community and economic'development, emergency preparedness, health and sanitation, education, culture and recreation, parks and recreation, service district maintenance, and primary and secondary education. The business-type activities of the Kodiaklsland Borough include a solid waste collection and disposal facility, a Borough owned hospital,the Kodiak Fisheries Research Center,and a 911 emergency system. 13 Page 24 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH l � Management's Discussion and Analysis,Continued The government wide financial statements include not only the Kodiak Island Borough itself(known as the primary government), but also the legally separate school district for which the Kodiak Island Borough is • ' financially accountable. Financial information for this component unit is reported separately from the financial information presented for the primary government itself. - The government wide financial statements can be found on pages 23-24 of this report. Fund Financial Statements - i A fund is a grouping of related accounts that is used to maintain control oycr resources that have been segregated for specific activities or objectives.The Kodiak Island Borough,like other state and local governments,uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.All of the funds of the Kodiak Island Borough can be divided into two categories:governmental funds and proprietary funds. Governmental Funds—Governmental funds are used to account for essentially the same functions reported as governmental activities in the government wide financial statements. However, unlike the government wide statements, governmental fund financial statements focus on near-ierm inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year: Such information • may be useful in evaluating a government's near-teen financing requirements. _ 1 Because the focus of governmental funds is narrower than that of the-government wide financial statements,it is • i useful to compare the information.presented for governmental funds with similar.information presented for governmental activities in the government wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between govermoental funds and governmental activities. The Kodiak island Borough maintains 30 individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures,-and changes in fund balances for the General Fund, the Education Support Special Revenue Fund, the Facilities Special Revenue Fund, the Education and Health Debt Service Fund, and the Kodiak High School Renovation Capital Project Fund.and the Renewel and Replacement Projects Capital Project Fund,which are all considered to be major finds. Data froth the other nonmajor funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in the supplementary information section of this report. The Kodiak Island Borough adopts an annual appropriated budget for its General Fund, Special Revenue Funds and Debt Service Fund. Budgetary comparison statements have been provided for the funds to demonstrate compliance with this budget. The basic governmental financial statements can be found on pages 23-32 of this report. Proprietary Funds —The only Proprietary Fund type that the Kodiak Island Borough uses is enterprise funds. Enterprise funds are used to report the same functions presented as business type activities in the government wide financial statements. Proprietary Funds provide the same type of information es government wide financial statements, only in more detail. The Kodiak Island Borough uses enterprise funds to account for a solid waste collection and disposal facility, a Borough owned hospital leased to the Sisters of Providence d.b.a. Providence Kodiak Island Medical Center, rents and utilities of the Borough owned Kodiak Fisheries Research Center,and 911 phone charges and expenses. 14 Page 25 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • KODIAK ISLAND BOROUGH Management's Discussion and Analysis,Continued The Kodiak Island Borough adopts an annual appropriated budget,for its proprietary funds. Budgetary comparison statements have been provided for the funds to demonstrate compliance with the budget. The basic Proprietary Fund financial statements can be found on pages 29-32 of this report: Notes to the Basic Financial Statements—The notes provide additional information that is essential to a full understanding of the data provided in the government wide and fund financial statements.The notes to the basic financial statements can be found on pages 33-72 of this report. Other Information — In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary including budgetary comparison schedules for the General Fund, the Education Support Special Revenue Fund and the Facilities Special Revenue Fund. Required supplementary information can be found on pages 73-77 of this report. Government wide Financial Analysis Statement of Net Position As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the Kodiak Island Borough,assets exceeded liabilities by$175,412,469 at the close of FY2014,the most recent fiscal year. The net position of the component unit were$7,485,028'at the close of FY2014. The largest portion of the.Kodiak Island Borough's net position($116,542,750 or 66%)reflects its investment in capital assets(e.g. land,buildings,equipment and infrastructure)net of related debt.The Kodiak Island Borough uses these capital assets to provide services to citizens; consequently, these capital assets are not available for future spending. Although the Borough's investment in capital assets is reported net of debt, it should'be noted that the resources needed to repay this debt must be provided from 'other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Governmental notioess•type • Aeadtin Aeavities Total -.2014 2013 2014 2013 2014 2013 Current and other assets 5 81,695,355 79,790,040 22,131,673 35.122,305 103,827,028 114,912,345 Capital assets 131,424,119 100,052,704 65,293,662 47,791,787. 196,717,781 147.844,491 Total assets S 213,119,474 179,842,744 87.425,335 82,914,092 300.544,809 262.756.836 Long-eel-to liabilities S 72,178,195 51,746,354 32,003,516 31,293,294 104,181,711 83,039,643 Other liabilities 14,027,297 8,172,957 6,923,352 9,242,334 .20,950,649 17,415.291. Total liabilities $ 86,205,492 59,919,311 38,926,868. 40,535,628 . 125,132,360 . 100,454,939 Net j'osition: Net investment in capitol assets S 80,159,521 72.773,598 36,383,229 21,628.143 • 116,542,750 94,401,741 Unrestricted 46,754.461 47,149,835 12,115,258 20,750,321 58,869,719 67,900,156 Total net position S 126.913.982 119,923.433 48,498,487 42,378,464 175.412,469 162,301,897 For more detailed information see the Statement of Net Position on,page 23. The remaining balance of unrestricted net position, $58,869,719, may be used to meet the Borough's ongoing obligations to citizens and creditors. IS Page 26 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Management's Discussion and Analysis,Continued Statement of Activities The following condensed table of changes in net position displays the revenues and expenses for the current and prior year. Gasernaratal ati,icn Bmias3-nee eed,idn Tml 2014. • 2013 2014 . 2013 • 2014 2013 Moan: flpy.mterenues: tanen Mt services 3 291.999 654025 3264219 4.127.534 5,99251 5,934.563 Qentn38®nand®OSUbm 4,077310 25373292 - 85,634 4077,310 8004296 Capail pants 6651.737 2212524 5,53403E 3.911.095 1 21 119.775 4194619 Cenralavmae: Appaty ev 13,141.191 12910.512 13.741.110 12.910315 Gams ad m4ka,ete ea manatee to specific prognais 410,59 4454243 - - 4.142413 4.53200 Land saki 161413 - - - 864.514 - Severance was 1.413.519 1,7767W - - 1.513449 1,274.701 Other 505416 313,177 504.462 74.613 1.104296 462563 bveson=caanp 1.144717 5=676 . 17191 117.•702 ' 1345.56! 616.15 Teel remota 13636.645 '3.843179 '415111340 11023.657 45.249.025 34936136 Fgmtn: Central 4oev_naat 4925.790 7397097 - 4994660 7391493 Pohlr safely 75497 64.191 - 751.637 (4,197 Cam:way ad a vow dnebpvrnt 061,377 4.0_0,9,4 - 964,377 4170394 Kiewitay pnpadness 12.437 275,430 - 12.457 271.410 Heath and sivaalnn dmenaenl 370700 290400 - 324.700 247.300 rdanti94 ashore and aeration 214013 114.273 - 211413 14.773 IM7 and neat)} 37.795 21,103 - 37.795 21,100 Smite district matenenm 631372 47036 - 631.572 4794s f>in;by and seasadny ed,csSs 4.527509 13930519 - 14323409 13.931919 blanl ea bag+mndebt 2.109,406 1259125 - 2109.405 1.254= Misecpa solid rate"pectin and deposal - - 2050.51 2342006 2050,861 245106 HospitalSnbis - - 1.740,523 1.091.033 1.740323 1491035 'Kodak Gahed.Rewash Can - - 1451,111 1.773.O12 1441111 4775.052 911 senas - - 39417 17.596 39417 117.594 Tow aptasea 2156.136 23.433.143 5342517 • 5494699 32.144453 51741.70 (Lase as as pas.. before tmata 7470.549 390.031 604005 5397.958 13.110532 6.19.969 Traub" 130.000) (WOO) 1033 0.000 - - Change is ea poseia 6.950449 310,031 4420.023 547953 13,110572 419519 Net position,begtan8 of yea.es prba*slued 119.913433 133950817 422374464 'JLWA'6 164301.597 110451.323 (Lmnakiive area ofa changes accratigp4ncjb - (195153) - - - - Prat wed djtslpent - (13.740562) - - (43.74499) Net Madan.begbnus of yeas.as sewed 119.923433 119413.401 42,374464 36500400 16'301497 154113931 Net pasmien,cad ef)es, S 126913.932 .119923133 44494437 42374464 175412,469 162101497 Governmental activities increased the Kodiak Island Borough's net position by.56,990,549. The major differences in revenues were an increisf• of$5,599,061 in operating and capital grants due to successful grant applications, an increase of $830,678 in property taxes due to increased assessed values and an increase in investment earnings of$578,041 due to longer investment maturities. There were some major changes in expenses including an increase of$855,181 in interest on long term debt due.to issuance of general obligation bonds, and an increase of$592,590 in primary and secondary education caused by an increase in non-capital expenditures. 16 Page 27 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Management's Discussion and Analysis,Continued Business type activities increased the Kodiak Island Borough's net position by$6,120,023. This increase was due to an increase of$439.751 in charges for services. ' • Current Year Versus Prior Year Prior Year Expenses Governmental Activities t 't�" ,! rr ^1 Y.rf is 1 .,f t a t, i ;- 2g : ' tit ! 4-2 o ry t td.. t .Y +. 4w .'4 xaV i }+- f.tt _ . _t i Yk 1 r� ( nl k} b 1 t ' r t[t t i , . ,t 1 ' -_ '' A trade ! z 4° Y •t^ Y : . x.000000 t t 1 ' .. r(,P ' .. r 1 *5 %.'"'— ♦ $? 1.1 !;7 111 0FY2014 General 4at..im.m P,b&u.ry Cumna,h,5 (merger,/ waM1,.rd teuu,on,culture Parks and serve.district vmmary.,d In,.n.,mbat .m.m,Ie onw,.d,.n $drain. and.«..alion ...mat.. mend nrte ..00ndan lam,debt I ®FY2013 dewtomm, department education For more detailed infonnation see the Statement of Activities on page 24. � Financial Analysis of the Government's Funds As noted earlier, the Kodiak Island Borough uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds—The focus of the Kodiak Island Borough's governmental funds is to provide information on near-term inflows,outflows,and balances of spendable resources. Such information is useful in assessing the ' Kodiak Island Borough's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. . As of the end of the current fiscal year, the Kodiak Island Borough's governmental funds reported combined ending fund balances of$72,318,860, a decrease of$3,497,624 in comparison to the beginning of the year. $515,224 of this total amount constitutes nonspendable fund balances, $42,355,129 is committed fund balances, $28.875,499 is assigned fund balances and$573,008 is unassigned fund balances. The main reasons for this decrease was $34,749,847 spent on the Kodiak High School Renovation Project and $5,849,028 spent on debt service. $22,600.000 was realized from the sale of general obligation bonds and $12,938,158 was received in state grants. 17 Page 28 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Management's Discussion and Analysis,Continued The General Fund is the main operating fund of the Kodiak Island Borough.At the end of the current fiscal year. nonspendable fund balance of the General Fund was $1.459 with an unassigned fund balance of$3,502.489 for a total fund balance of$3,503,948. As a measure of the General Fund's liquidity,'it may be useful to compare fund balance to total expenditures. Unassigned fund balance.represents 57% of total General Fund expenditures. The fund balance of the Kodiak Island Borough's General Fund increased by$156.962 during the current fiseal year. While overall there was no significant change it is worth noting an .increase of $109,700 in federal payments in lieu of taxes, a decrease in state revenue sharing of$311.117, a decrease of$100.717 in state fisheries business tax, a decrease in general administration and administration expenditures of$286,424 and an increase of$135,264 in management information services. The fund balance of the Kodiak Island Borough's Facilities Special Revenue Fund increased by $133,105 during the current fiscal year.The key factor leading to this minimal increase was increased investment earnings compared to the prior year. The fund balance of the Education Support Special Revenue Fund decreased by $184,223 during the current fiscal year. The key factor leading to this change were increases in capital outlay to the School District. The fund balance of the Fire Protection Area No. 1 increased by $I 72,894. The key factor leading to this increase was not spending monies budgeted for capital outlay. The fund balance of Womens Bay Road Service Area increased by $67.567. The key factors leading to this increase were lower snow removal and repair and maintenance costs' The fund balance of Land Sates increased$50,315. The key factor leading to this increase was a land sale. The fund balance of the Fern Fuller Trust decreased $64_.207. The key factor leading to this decrease was low interest earnings. The fund.balance of the Kodiak Island Borough's Renewal and Replacement Projects Capital Project Fund decreased by $936,578 during the current fiscal year. The key factor leading to this was a budgeted use of assigned fund balance to balance the FY2014 budget. The fund balance of the Kodiak Island Borough's Kodiak High School Renovation Capital Project Fund decreased by$2;933,587 during the current fiscal year. The key factor leading to this decrease was a budgeted use of assigned fund balance: Proprietary Funds — The Kodiak Island Borough's proprietary funds provide the same type of information found in-the government wide financial statements.but in more detail. Net position of the Municipal Solid Waste Collection and Disposal Enterprise fund amounted to S16,846,588,the Hospital Facilities Enterprise Fund amounted'tb $21,263,713,the Kodiak Fisheries Research Center Enterprise Fund amounted to$10,388,186 and the 911 Services Enterprise Fund amounted to$0. The total increase in net position for the Municipal Solid Waste Collection and Disposal Enterprise Fund was $6,032,820. The total decrease in net position for the Hospital Facilities Enterprise Fund was $121,997. The total increase in net position for the Kodiak Fisheries Research Center Enterprise Fund was$209,200. The total change in net position in the 911 Service Enterprise Fund was SO.Other factors concerning the finances of these four funds have already been addressed in the discussion of the Kodiak Island Borough's business-type activities. 18 Page 29 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH , Management's Discussion and Analysis.Continued 2014 Program Revenues Versus Expenses 3,000,000 ii'r k < • .: 6 .a r` Sr 5w. ti.e. 2,500,000 A`°' '- ; I 2,000,000 , = r S.',,5 3 't-t -;-,7).A Tr, 1,500,000 ; Y ,' ^_y; , - 1 L" 1,000,000 Vf� ' _, ® t a• ' .� Revenues 500,000 I . .t ® t i r F I El Expenses 0 .® Municipal Hospital Kodiak 911 Solid Facilites Fisheries ' Service Waste Research Center General Fund Budgetary Highlights Differences between the original budget and final amended budget Can be briefly summarized as follows: • The revenue budget for PERS on-behalf was increased$175,790. • The revenue budget for use of fund balance was increased$150.000. 1 • The expenditure budget for the Borough assembly department increased by$1,500. • The expenditure budget for the Borough clerk department increased by$5,120. I • The expenditure budget for the finance department increased by$44,910. • The expenditure budget for the management information systems department increased by$10,830. • The expenditure budget for the assessing department increased by$17,150. • The expenditure budget for the engineering/facilities department increased by$36,630. • The expenditure budget for the community development department increased by$59,650. • The expenditure budget for the parks and recreation department increased by$150,000. Differences between the final amended budget and actual can be summarized as follows: • Aircraft personal property taxes were$15,900 more than budgeted. This was due to a change in tax rate not reflected in the budget. • Severance taxes for fish were $34,504 less than budgeted. This was due to an estimation error in harvest of wild fish. 19 Page 30 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Management's Discussion and Analysis,Continued • Severance taxes for mining were$22,309 more than budgeted. This was due to an estimation error when the budget was developed. • Penalties and interest on taxes were$71,942 less than budgeted. This was due to fewer late tax payments. • State shared revenues were S23,675 more than budgeted. This was due to an increase in the State's budget for aid to the various political subdivisions of the State. • The.Borough's share (50%) of state raw fish tax was $103,692 less than budgeted. This was due to an estimation error in harvest of wild fish. • • State on-behalf PERS payments were $37,543 more than budgeted. This was due to an estimation error when the budget was developed. • Federal payments in lieu of taxes were$315,152 more than budgeted. This was due to an estimation error .vheh the budget was developed. • • Federal fish and wildlife revenue sharing were$55518 more than budgeted. This was due to an estiniation 1 error when the budget was developed. • Building permit revenues were$19.661 over budget.This was due to an estimation error when the budget was developed. • Investment income was$76,196 less than budgeted. This was due to an overall decrease in the market in the current year. • The General Administration department came in $68;163 under budget. This was due to lower insurance costs. • The Borough Manager department came in$60,661 under budget. This was due to vacant positions. • The Borough Clerk department came in$43.049 under budget. This was'due to vacant positions,reduced records management costs.and other. • The Management Information Systems department came.in$62,647 under budget. This was due to vacant positions and not purchasing all budgeted equipment expenditures. • The Community Development department came in $140,579 under budget. This was due io vacant positions. • The Parks and Recreation department came in $157,205 under budget. This was due to lack of staff to supervise projects. • The Emergency Preparedness department was$42,013 under budget. This was due to contracted services coming in tinder budget. Capital Assets and.Debt Administration Capital Assets—The Kodiak Island Borough's investment in capital assets for its governmental and business - type activities as of June 30,2014,amounted to$196,717,741 (net of accumulated depreciation).This investment in capital assets includes, land,buildings and improvements, improvements other than buildings, machinery and , equipment,and construction work-in-progress.The total net increase in the Kodiak Island Borough's investments in capital assets for the current fiscal year was $48.873,250 which was mostly due to increases in construction work in process. 20 Page 31 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Management's Discussion and Analysis,Continued The following table displays the capital assets(net of accumulated depreciation)for the current year. Governmental Business-type activities activities Toter 2014 2013 2014 '2013 2014 2013 Artwork S 16,091 16,091 16,091 16,091 Land 23,272,788 23.467,304 1,661,499 1,661,499 24,934,287 25,128.803 Construction work-in-progress 47,862,997 12,604,897 40,074,742 20,790,509 87,937,739 33,395,406 Buildings improvements 44988,590 47,085,283 20,387,522 21,782,249 64,976,112 68,867,532 Improvements other than building 13,889,667 14,987,459 1,651,121 1,833,395 15,540,788 16,820,854 Equipment 978,816 932,432 535,380 698,722 1,514,196 1,631,154 Infrasuucture 831,261 975,329 831,261 975,329 Unclassified plant in service — — 967,267 1,009,322 967,267 1,009,322 $ 131,424,119 100,052,704 .65,293,622 47,79 L787 196,717,741 147,844,491 Additional information on the Kodiak Island Borough's capital assets can be found in note 7 on pages 44-48 of this report. Long-Term Debt — At the end of the current fiscal year, the Kodiak Island Borough had total bonded debt outstanding of $69,135,000. This entire amount is backed by the full faith and credit of the Borough. The remainder of the Kodiak Island Borough's debt represents loans and notes payable, compensated absences and landfill closure and post-closure costs. The following table displays the long-term debt for the current year. Goceromenbl Business-type activities activities Total 2014 2013 2011 2013 2014 2013 General obligation bonds,including premium $ 76,227,556 55,236,114 — — 76,227,556 55,236,114 ADEC loans 37,042 42,992 — — 37,042 42,992 Compensated absences 328,529 298,640 — — 328,529 298,640 Landfill post closure care costs — — 3,968,123 5,389,650 3,968.123 5,389,650 Long term interfund borrowings — — 3971,872 4,551,382 3,971,872 4,551,382 Notes payable — — 28,910393 26.163,644 28,910,393 26.163,644 $ 76,593,127 55,577,746 36,850.388 36,104,676 113,443,515 91,682,422 The Kodiak Island Borough's total debt increased by$21,761,093 during the current fiscal year. This increase was mostly due to the Kodiak High School Renovation Capital Project Fund selling $22,660,000 in general obligation.Total debt service payments during the year were$3,645,950 of principal of general obligation bonds. There is no general obligation debt limit imposed on the Kodiak Island Borough by the State Constitution, state statutes or the Borough's charter or code. Additional information on the Kodiak Island Borough's long-term debt can be found in note 9 on pages 53-63 of this report. 21 I Page 32 of 215 Review of the Comprehensive Annual Financial Report (CAFR). . AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH • Management's Discussion and Analysis,Continued Economic Factors and Next Year's Budgets and Rates • At June 30, 2014,.the unemployment rate for the Kodiak Island Borough was 5.2%, which is.6%lower than last year's rate of 5.8%. The average unemployment rate for the last 10 years has been 6.67%. '• Property tax revenues'received are projected to increase in future years as the Kodiak Island Borough's assessed valuation continues to increase. • The PERS (Public Employees Retirement System) rate has increased from 0% in FY2004 to 35.68% in F7'2014. The State of Alaska set a ceiling of 22% on all political subdivisions and contributed the additional 13.68%. 'Requests for Information This financial report is designed to provide a general overview Of the Kodiak Island Borough's finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Kodiak Island Borough. Director of Finance. 710 Mill Bay Kodiak.Alaska 99615. 22 Page 33 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. • BASIC FINANCIAL STATEMENTS • • Page 34 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • • (This page was left blank intentionally) • • I iI • I S I Ii I t Page 35 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK IS1,ND BOROUGH Statement of Net Position lune 30,2014 (With summarized financial information for lune 30,2013) Component Primary government nail Total reporting.entity Governmental Business-type School Assets activities activities Total District 2014 2013 Equity in central treasury $ 79,478,297 -15,488,823 94,967.120 33,487 95.000,607 106,784,673 Due from primary government - - - 8308,251 8,708.251 5.76.927 Receivables: State of Alaska 611,868 4,086.058 4697,926 3,095,115 7,793,041 9,625,483 Federal government 359,513 - 359,513 - 359,513 192,177 Property taxes,net of allowance of 515,828 245,933 - 245,933 - 245,933 183,093 Severance taxes 396,798 - 396,798 - 396,798 394,984 Land sales contracts receivable 549,230 - 549,230 - 549,230 9,114 Accounts and other receivables,net 52,257 307,053 359,310 36,466 395,776 294477 Inventories - 597,932 597,932 501,735 1,099,667 767,668 Prepaid items 1,459 2,679 4,138 2,940 7,078 67,183 Restricted cash and equivalents - 1,649.188 1,649,188 - 1,649,188 - Capital assets: Non-depreciable 71;135385 41,752,332 112,888,117 - 112,888,117 58,540,300 Depreciable,net 60,288334 .23,541,290 83,829,624 744.435 84,574,059 89,864,964 'foul S 213,119,474 87,425,355 300,544,829 13,122,429 313,667,258 272,489,243 Liabilities and Net Position ' Liabilities: • • Accounts payable S 3,611,343 1,852,359 5,463,702 1,092,034 6,555.736 6,740,063 Accrued compensation and related)'abilities 401,423 100,575 501,998 3,741,034 4,243,032 3,893,502 Other accrued liabilities 998,650 42,383 1,04033 - 1,041,033 716,782 Customer deposits 1,100 27,000 28,100 - 28,100 14,750 r Unearned revenues 134,815 - 134,815 98,651 233,466 204,546 Due to component unit 8,708,251 - 8708,251 - 8,708,251 5,764,927 Internal balances (4,026,035) 4,026,035 - - - - Noncunent liabilities: Due within ate year 4,197.750 875,000 5,072,750 609.278 5,682.028 4,537,923 Due in more than one year 72,178,195 28,035,393 100313,588 96,404 100,309.992 77,649,998 Landfill closure costs - 3,968123 3,968,123 - 3,968,123 5,389,650 Total liabilities 86,205 492 . .38.926 868 125.132,360 5,637 401 130.769.761 104.912,141 Net position: Net investment in capital assets 80.159,521 36,383,229 116,542,750 618,900 117,161,650 94,962,514 Unrestricted 46,754,461 12,115,258 58,869,719 6,866,128 65735,847 72,614,588 Net position 126,913,982 48,498,487 175,412,469 .7,485,028 182,897,497 167,577 102 Total S 213,119,474' 87425,355 300,544,829 .. 13,122,429 313,667,258 272,489,243. See accompanying notes to financial statements. 23 Page 36 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM#2.A. ;Lori! G cd ; € F 'ti lkgS°1 i = S '3 F S I, - -- i 754 2 5 2P. y?I$ E k 6 S8 i, 8 1 c - s s S cz >) Y - a '• a rgillEKVE "%-_: 1 i afRECJEl E / it 1 6 £ N ' F Y.__ s cld E,Y' 'iii51 -, .5 . - - IIII I I I I r I I I I I I III I I' F 1611g` i 1 6, 84. _ 11 rii. I3 c a 1: E a ' & 6 9 208-22222. 8 IE'ai tL :G}i 1' V - R F f _ I IL A 11111111111 =4 j 6d 11 maa- s6d II / E 3 y!r'!F k 2 Eta r. s ar g c .. .. �- : ? : Y I ; f 3 !!-W°g" 1 1111 1 1 Mr y r3t71 11 I - Q rC rgc"Sia a .zdi -a—: C 6 jj{ ttj yjl -l lApi1111[ 1I! . �q11 E .. 'I I E f it R31 I I I In L n I g 0 Pi I S=^ "n- G 9 e ' C r' S e@ )4 l , , I111,II E :11([fry1 E HI j 61 i - I � I � a 1 lltRIjih!!iIIit }I'IIr '4 i itI1 LLl sill l I Page 37 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM#2.A. H in. =zz.=={{IIa �;E.x a °aJ sagas a c _a^ : CI a ^aF - � a gi ileFF I ~ F e' >Ri. 'E-RUE '{III E. M.{II1. {II FL F K :m.: =8, ^I° yl Cal a IS lily H - a 3 HE j al $II II III ?.I II la?_I ^� yI ? ��- 11 is 33 j 3 3 1 III l l 1 1 a 3 I i l i l EII I I^1 ^ ^ .EC j R 8. GI a e o Hzf ~ Y a4 VI = }I ell I I I I 14. ^ 1 1 1 1 1 1 ^ I I I I ^ 1. I ] 3 F 1 ill 3 E '. i g all/ ` I I I Hg➢ ; II III II IBS a 2 pllsb M ¢ v 7-; Si AIL II " ,^y IRI a ■ of z¢ = s a IFF t81 F:FII tlf a I4..I g F. i o =11R1R1 I g ^ -1 I 1I Page 38 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Reconciliation of Net Position Between the Government-Wide Financial Statements and the Fund Financial Statements June 30.2014 Amount reported as fund balances on the governmental funds balance sheet $ 72318,860 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and,therefore,are not reported in the funds. 131.424,119 Long-term receivables,delinquent property taxes and loans are not available to pay for current-period expenditures and, therefore,are unavailable in the funds: Property taxes S 194.852 Interest receivable 54,163 Notes receivable-land sales 513,765 762,780 Long-term liabilities;including bonds payable,are not due and payable in the current period and therefore are not reported in the funds: General obligation bonds payable (69.135,000) Bond premium (7,092,556) ADEC loans (37,042) Accrued interest expense (998,650) Compensated absences (328.529) (77,591,777) Net position of governmental activities $ 126,913.982 See accompanying notes to financial statements. 26 Page 39 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. I KODIAK 6U6R BOROUGH SYlamem of Revenues,Eapondiwrel end Chanpe m Fend Balmem(Denin/ Governmental Funds Ye ended lmx 10.2014 1N16 sumomved 6wav1 ofornvion rot the yet ended lune30.10131 • E mambo Oink.'Pnjael 4...4 Spell'Inter Fads el Read KMU6111d1 Renewal4M Other Flax]:.. Debt Sm Me Scheel trplateror Gnn. .o.l - Totl, General Supper FnAIM Feed RervnW Pn}en Feat 364 191) Revenues Properly saxes and aio.,a, S 201,975 9,132.767 - :3041,895 - 110,590 1)41,542 13,656,771 1],9)4756 Trwiml vnmmGbse tn. 75.142 75,142 06.40 Sewnoce boa 7143419 1441419 1,7.x.7.79 laderierrtheasI 5rnexvm 2059.246 253,130 - 1)4],517 6.43.993 74,256 60,916 12931.15e 1,929.017 Fdaalurm 1,1)66)0 187.002 1,13.672 1059.172 CSaln far Saviors Savi3 ],1)6 1 586.)00 519,416 562.199 Licenser.plmine fen 1;]I) - - 29)50 112,561 94.816 056., income 21,102 - 655,470 1,16 45,115 - 47.175 1,115,466 516,903 OIYn Il.la$ - - - - - )9)4 SO.SM 5])16 Toll revmma 6771,553 10,135 997 69!70 5394594 6721,121 2446 2,367393 )2.111.54 25.642,69 Expenditures curt. OMOal porernmml 4495,294 - - 6.045 - 90,749 857,417 5,449)05 5.307,199 Pubic We), 72,941 503,779 176710 469,210 Commumiy and aorta development 60,251 94126 004,77 1%4991 Embpney penrdrcn 9,097 9.47 Ie)J Health end Unitltim dgvnnml 726,htl 124700 190,100 Edoaben.mm. 490 coal;. 95,625 95.633 0273 PuW ad thermion. )7,795 37,755 21,100 Sena doNel minimum 61.572 631,172 CO)61 P irouy and lamlgSeaman 195,059 10.670530 - - - - - 10.45,120 10.442)30 Caput owls): Schaub 14.0094] 122183 34,87],2)5 5.486472 General 24,600 - - - - 716268 214.151 1.920996 2,47674 • sante • Principal - - _ ' ),45.990 - - 3,45,950 2.96441 Imes - - - 2,107.191 - - $,26 2.109.406 1.14.225 Oe4 imams tow - - - 1903 - - - 89,65 10,109 Tail wpWwn 6.111071 10490,210 - 5,49,023 14,799,90 12914 243649_ 60174973 19953 410 Excess(dilcaoy)of mats 0 V luSel npMrurm 656462 13112131 65,470 44441 128.011,041 (1,013,41) 1690551 (28,41440) (4)10,011 Other Mathias swaca(nal P roceeds free eM.16e& 12.660,0')0 - - (2.600,000 11,333.060 Prmtim on OaW/sued 2427.412 - - 2,427,01 3,44419 Proceeds been isle ofapd sue 9.544 Lad ale pmueb 156,24 336,154 6.74 Tinier.in 310,000 482,402 - 161.963 18,000 992,65 6)12165 L asPo110 40,9061 - (521.631 - - - Rd1M1 (I 072 365) (6.$93.101 1 45-R^a93v,1 1 swarths(as) N0)WI 1100]0 152565) 412401 _ 11,00433 161.%1 10274 23)6)716 . 24,956,00 Clay in NM 6Jbnon 116 962 114)211 113,105 27,961 (2,933,5173 19345783 20,729 0,497,6241 1445.719 Fund balsam(Min),a beginning of Fm ))46,986 4349 19.415,69 617.741 19.59996] 11)649091 5,511,409 25816,44 55.130,765 I. Fund Mena(de96i6.a ea aye. 0_222,22_ 131,6741 19544944 655.111 2566,110 12,161111 5,110,41 72,311,140 75.11644 See ethempthres ale so finercia Guava 1 n 1 Page 40 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Reconciliation of the Statement of Revenues,Expenditures and Changes in Fund Balances(Deficits) 1 of Governmental Funds to the Statement of Activities Year ended June 30,2014 i Change in fund balances-toial governmental funds S (3,497.624) Amounts reported far governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However.in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense: • Capital outlay S 35,607,990 Depreciation expense .(4,042,059) 31,565,931 Governmental funds only report the revenue from the sale of assets to the extent proceeds are received from the sale. In the Statement of Activities,a gain or loss is reported for each sale. The net effect of transactions involving capital assets is to decrease net position. Cost of assets sold (194.516) Accumulated depreciation of assets sold — (194,516) Certain revenues in the statement of activities do not provide current financial resources and are reported as unearned or unavailable revenues in the funds: Property tax 194,852 Interest income 54,163 Land sale proceeds 513,765 762.780 , - I Certain revenues that were earned in a prior year provide current financial resources: Accrued property tax (185.575) Accrued interest income (62,912) Land sale contracts (5.465) (253,952) The issuance of long-term debt provides current financial resources to governmental funds,while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction,however, has any effect on net position. Also.governmental funds do not report the accrual of interest expense on debt when it is not • payable from currently available resources: Interest expenditures applied to accrued interest (376,689) Issuance of long term debt (22,660,000) Principal repayments 3,645,950 Bond premium (2.427,432) Bond premium amortization 455,990 (21,362,181) Some expenses reported in the Statement of Activities do not require the use of current financial resoucei and,therefore, are not reported as expenditures in governmental funds: Compensated absences,net change (29.889) Change in net position of governmental activities $ 6,990,549 See accompanying notes to financial statements. 28 Page 41 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. ' KODIAK ISLAND BOROUCII Statement of Net Position Proprietary Funds-Business•Type Activities-Enterprise Funds lune 30,2014 (With summarized financial information for June 30,2013) Municipal Kodiak Other Solid 3lacte Fisberies Nonmajor Collection and Hospital Research Enterprise Totals Assets Disposal Facilities Center Fund 2014 2013. Current assets: Equity in central treasury 5 5,737,395 6,449,638 3271,181 30,609 15.488823 29,140,734 Restricted cash and equivalents 302,500 1,346,688 - - 1,649,188 Customer receivables 260,897 - 40,046 6,110 307,053 248,255 Accounts receivable- State ofAlaska 4,047,505 38,553 - - 4.086,058 5456,114 Prepaids .2,679 - - - 2.679 195 Total current assets 10,350,976 7,834.879 3,311,227 36.719 21,533,801 34.845,298 Inventories 320.925 277.007 597.932 277,007 Capital assets: Non-depreciable 19,753.655 20,967,304 1,031,373 - 41,752,332 22,468,099 Depreciable,net 2,287,465 11.770,723 9,483.102 - 23,541,290. 25,323,688 Total capital assets 22,041.120 32.738,027 10.514,475 - 65,293,622 47,791,787 Total noncurrent assets 22,362,045 33,015,034 10,514,475 - 65.891 554 48,068,794 Total S 32,713.021 40.849.913 13,825,702 36.719 87,425,355 82914,092 Liabilities and Net Position Current liabilities: Accounts payable 5 1,551,020 5,830 258,790 36,719 1,852,359 4,164,291 Customer Deposits 27,000 - - - 27,000 13,500 Accrued compensation and related liabilities 71,012 - 29,563 - 100,575 95,428 Other accrued liabilities 42,383 - - - 42,383 94,8.21 Current portion of advances froth other funds - - 82,723 540,000 622,723 579,510 Current portion of notes payable 270,000 605,000 - - 875,000 260.000 Due to other funds - - 54,163 - 54,163 62.912 Total current liabilities 1,961,415 693353 882,516 36,719 3574,203 5,270.462 Noncurrent liabilities: Notes payable 9,936,895 18,098.498 - - 28,035,393 25,903,644 Advances from other funds - 794.149 2,555.000 - 3.349,149 3,971.872 Accnml for landfill closure and postclosure costs 3,968,123 •- - 3,968,123 5,389.650 Total noncurrent liabilities .13,905,018 18,892,647 .2555000 - 35,352,665 35,265,166 Total liabilities - .15,866,433 19.586,200 3,437,516 36.719 38,926,868 40,535.628 Net position: Net investment in capital assets 11,834,225 14,034529 10,514.475 - 36,383,229 21,628,143 Unrestricted(deficit) 5,012,363 7,229,184 (126,289 • - 12,115258 . 20.750,321 Total net position 16,846,588 21263,713 10,388,186 - 48.498487 42,378,464 Total 5 32,713,021 40,849,913 13,825,702 . 36,719 87,425,355 82,914,092 Sec accompanying notes to financial gateman., 29 Page 42 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. : KODIAKISLIND BOROUGH I 1 Statement of Revenues.Expemes,and Changes in Net Position 1 Proprietary Funds.Business-Type Adnuies-Enterprise I'unids Year ended June 30.2014 (With sump-avnd 6runcial information for the year ended lune 30.2013) 4 , • t Municipal Kodiat Other So0d Waste Fisheries Nonmajor Collection and fleapit) Research Enterprise -Totals Disposal Facilities Center Fond 2014 .. • 2011 Operating revenues: Charges for sarices: Solid wage disposal S 2,265.967 - - - 2265,967 2,504035 1 Lease income - 1,150,000 1,851,322 3.001322222 2323303 Other 39403 - 439 39,817 .79659 '51.471 . Total operating revenues 2305370 1.150000 1.851.761 39.817 5346948 . -4879.015 Operating asperses' Personnel sen ices 876,354 10,100 359,783 3,000 1,249737 1,292,778 Refuse disposal - - - Contracted services 185,284 - - - '185,284 352,132 Maintenance and repairs 141,309 1,144 - 142,453 38,981 1 Depreciation 278,342 867,913 636,143 - 1.782,398 1,774,135 1 z General and sdministrnion 206,793 411,550 - 618,343 771,215 Miseellaacoi - 5,791 47090 98 52,979 67,418 1 Telephone sent" - - - 36,719 36,719 84,454 Repeling services 214,376 - - - 214,876 212,243 i Comribaime _ 39.106 _ - - - -39,106 37,011 1 Total operating expenses L942.064 883.804 1455.710 39.817 4.321795. 4430370 • Operating income(loss) 363,306 266,)96 396,051 - 1,025,553 . 248,645 - Oiler intone astal:el' _ Intergovernmental: 4 State somas-grans -5,323,033 215,000 - - 5,538,038 5,984.095 1 State of Alaslsonbehg(paytrem - - - -. - 84,2% 1 Federal so toe es-grans - - - 1,333 Contribution o Providence Hospital - (108,007) (108.800) (108.600) Investment income 67,044 73,207 38,550 - 178,851 117,702 Band premium amortization 27,211 113,821 - - 141032 27,211 Bad issuance costs - - - - - (112,573) i Landfill closure and poatcbare costs (138.871 - - - 371471 - ' Interest expense (138.8001 (748.721) (725.401) - (1.112922) 1444.7561 I Total other income(expense) 5.654014 (454.693) (186.851) _ . 5.014,470 - - 5.549.313. 1 !wont(loss)before transfers 6,019,320 '(138497) 209,200 - 6,040,023 5,797,958 • Trmufen in 13.500 66.500 - - 80.003 80.000 Change in net position 6,032,820 (121,997) 209,200 - 6,120,023 5,877,958 Net position,at beginning of year 10.813363 21385,710 10,178.986 - 42378.464 36.500.506 • Net position,at end of yes 5 16,846,588 21,263.713 10388,186 - 48 498,487 ' 42378.364 See accompanying notes to financial swenvs. 30 Page 43 of 215 Review of the Comprehensive Annual Financial Report (CAFR). • AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH I Statement of Cash Floes Propnemry Funds•Business•Type Activities•Enterprise Funds Year ended June 30,2014 (With summarized financial information for the year ended June 30,2013) Municipal Kodiak Other Solid Waste Fisheries Noneujor Collection and Hospital Research Enterprise Totals Disposal Facilities Center Fund 2014 2013 Cash flows from operating activities' Cash received from customers $ 3,399,424 1421,716 1,812246 38,320 6,671706 160 2009 Payments to suppliers (3,6372901 (.100.863) (247.059) (36.725) (5.021937) 1.888,395 Payments to employees (870.866) (10,100) (359,783) (3000) (1,243,749) (1350.745) Net ash provided(used)by operating activities (1.108.732) . 310,753 1205,404 (1,405) 406,020 2.139,659 Cash floes from noncapital firancingactivities: State sources-grant 5,323,038 215,000 — — 5,538.038 5,984,095 Federal spaces•grants — — — — — 1.338 Contribution to Providence Hospital — (108.000) — (108,000) (108,000) Internal activity-paymcros tafrom other funds — 18.749) — (8,749) 71,284 Tlemcen in 13,500 66.500 — — 80,000 80,000 Net cash provided(wee)by nonapital financing activities 5336538 173,300 (8,749) — 5.501.289 6.028.217 Cash floes from capital and mimed financing activities: Acquisition and comsnsetian of capital assets (8,470,829) (9,969,269) (844,135) — (19284,233) 110.249,728) Interest paid on notes payable and interfund bonpiings 1111.589) (748,721) (225,401) — 11085.711) (442,830) Principal payments on long-lens notes payable and interfund borrowing (287.211) (79.510) (500.000) — (866.721) (882.858) Proceeds from issuance of notes payable 3,1.17,782 — — — 3.147,782 18,730,032 Net cash provided(used)by capital and related financing activities (5,721,847) (10,792300) ' (1,569,536) — (18,088.883) .7,154,616 Cash Roos fmm investing activities: Interest and dividends received 67,094 73,207 38,550 — 178,851 117,702 Net change in cash and cash equivalents (1,426,947) 110.240.0101 1334,331) (1.405) (12.002,723) 15,440.694 I Cash andegdalats,at beginning of yew . 7,466,842 18.036,366 3,605,512 • 32,014 29,140,734 13,700.010 Cash and equivalents,at end of year $ 6,039895 7396,326 1271,181 30,609 17.138,011 29,140,734 Reconciliation of ash and cash equivalents t0 the Statamad of Net Position • i Equity in central smasay $ 5.737,395 6.449,638 3.271,181 30609 15,488,823 29,140,734 Resmcted cash and equivalents 302,500 1.346.686 — — 1,649,188 — S 6,039.895 7,796326 3.271 181 30609 17,138,011 29,140,734 (continued) • 31 Page 44 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. - f KODIAK ISLAND BOROUGH 1 Swmm ofCada Ron I ptopeietary Fords-Banners-Typdazinincs-Fanpnsc Fords,(Continued) 1 I'm edod fine 30,2014 lI (Nilb vniad financial Narrtke for pros racial fine 30,2013) 1 E Nlanicipd Kodiak Other 5 k Said Otte Fooleries N..aaj.. C.O.c*.W Hospital Raaaeek F aeprin Torah Disposal Fatalities Canter Food 2014 2013 1 Disposal Reocthuim o(opcaesg mra(km)to net ) i cull Folded by opaamg aaa.itr • ` Opemv.iocr Dm) S 363306 269.196 396,051 — 1.025,553 241645 Adjmmat to=as&tgnvnt8 atom Doss) to m cash pvvided114Tanta.cr^tia: Drpiccisska 71818 867913 636,813 12.397 1,774,135 Sum of Alaska onbehalf ptst, _ — — — _. 84.296 t Accrual fa lmd6B Sonar and pocclacre ram — — _ — — 18 95) Change m assets and Kalinin the PrOdd(used)rash: (Ilan)decease in tutu: Ctmmasaei..Ele (17286) — 09,515) 11197) (58.796) 32,152 Accounts teanel/-Sine of Alaska 1,098240 271,716 — — 1170.056 0103172) Accents recei.ab4-Fatal)nvmnw — — —. 80,114 Fapaim, • (2.434) — — — (2184) (193) Fnmvis (320.9251 — — — (320925) — ) Sarase ldmcac)Is 0abdnia' 1 • Ac¢mb papa )1130,019) (1.095.072) 213,066 92 12.0 1933) 3.357,643 Aavad cmycmuioo 5.484 — — 5,488 (73,163) I I Qha sassed 0ddaia (57,433) — (301 — (52.179) (13.801) ladSII closure and panc5®e mu (1,041,0563 — — — (1,044,056) — Uoendmuan 13100 — — — 13.500 13,500 ) Na rah pnidd(ard)by oyaavg aW.m S 11.105.732) 310.753 1294404 12.405) 406.920 2.139,659 • . • Set aaavpa ing noes to fmrarial mcumts. 1 1 1 • I 1 i t 1 • • 32 Page 45 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements June 30,2014 (1) Summary of Significant Accounting Policies (a) Reporting Entity The Kodiak Island Borough (the Borough), Alaska,.was organized to perform the municipal duties allowed by Alaska Statutes and as directed by its residents. As required by accounting principles generally accepted in the United States of America, these financial statements present the government and its component .unit, an entity for which the government is considered to be financially accountable.The discretely presented component unit is reported in a separate column in basic financial statements to emphasize it is legally separate from the govenment. The Borough reviewed its relationship with other organizations and determined that the following organization is a component unit. Discretely Presented Component Unit The Borough has delegated the operating responsibility for public education to the Kodiak Island Borough School District (School District). In accordance with statutes, the Borough retains ownership of the education related capital assets and incurs the debt, if necessary, to finance the acquisition and construction of school facilities. The Borough Assembly.approves the total annual budget of the School District and[hay,during the year, increase the total appropriation. Complete financial statements for the component unit may be obtained at the entity's administrative offices for the Kodiak Island Borough School District. Kodiak Island Borough School District 722 Mill Bay Road Kodiak,Alaska 99615 (b) Government-Wide and Fund Financial Statements The government wide financial statements(i.e., the statement of net position and the statement of activities) report information on all of the activities Of the primary government and its component unit. For the most part, the effect of inter-fund activity has'been removed from these statements. Governmental activities,which normally are supponedby taxes and intergovernmental•reJenues,are reported separately from business type activities,•which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from the legally separate coniponent unit for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include I)charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2)grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment.Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds, if applicable, are reported as separate columns in the fund financial statements. 33 Page 46 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • :KODIAK ISLAND BOROUGH Notes to Basic.Financial Statements,Continued 1 1 ' (0 Measurement Focus,Basis of Accounting,and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement I focus and the accrual basis of accounting,as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the t timing of related cash flows. Property faxes are recognized as revenues in the year for which they are r t levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met. Govemmenial fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period except for grant revenues which are recognized when the related expenditure is incurred irrespective of when the cash is received. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures,as well as expenditures related to compensated absences and claims and judgments,are • I recorded only when payment is due. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the govcrnnient- i The government reports the following major governmental funds: • The General Fund is the government's primary operating fund. It 'accounts for all financial resources of the general gdvemnient,except those required to be accounted for in another fund. The Education Support Special Revenue Fund accounts for property taxes and assessments dedicated to school district support activity. The Facilities Special Revenue Fund accounts for the proceeds froth the sale of Shuyak Island. t The single most important goal is to preserve the principal of the fund. Interest earnings, after inflation proofing,can be used for debt service,building insurance and capital projects. The Education and Health Debt Service Fund was established to finance and account for the payment of interest and principal on all general obligation debts, serial and term,other than that payable exclusively from special assessments and revenue debt issued for and serviced by a government enterprise fund. • i The Kodiak High School Renovation Capital Project Fund accqunts for the construction and major maintenance activities for.the Borough's educational facilities funded by school bonds. The Renewal and Replacement Projects Capital Project Fund accounts for the construction and maintenance of various Borough facilities. 34 Page 47 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KO.DIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued The government reports the following major proprietary funds: The Municipal Solid Waste Collection and Disposal Fund accounts for the collection and disposal of solid waste and recycling services for the Kodiak Island Borough. The Nospitdi Facilities Fund accounts for rents on the Borough owned hospital; hospital related state revenue sharing;and other hospital related revenue. In turn,.it purchases hospital equipment and makes debt service payments on hospital related debt. The Kodiak Fisheries Research Center Fund accounts for rents and expenses on the Borough owned Kodiak Fisheries Research Center.The three tenants: NOAA,Alaska Department of Fish & Game and University of Alaska, Fairbanks pay lease funds to participate in this multi-agency research facility committed to the preservation of the North Pacific marine ecosystem and resources. As a general rule the effect of inter-fund activity has been eliminated front the government wide financial statements. Exceptions to this general rule are charges between various functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include (I)charges to customers or applicants for goods, services, or privileges provided, (2)operating grants and contributions. and (3)capital grants and contributions. Internally dedicated resources are reported.as general revenues rather than as program revenues.Likewise,general revenues include all talcs. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection.with a proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services and lease revenues. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. (d) Assets,Liabilities,and Fund Balince/Net Position Cash and Investments Cash and temporary investments of Borough funds are pooled in a central treasury. Each fund's portion of this pool is displayed on the Balance Sheet and Statement of Net Position as "Equity in Central Treasury". The Borough participates in the Alaska Municipal League Investment Pool(AMLIP). AMLIP is not SEC registered and is unrated. Alaska Statute 37.23 establishes regulatory oversight of the.pool.The law sets forth numerous requirements regarding authorized investments and reporting. The pool is incorporated in the.State of Alaska as a nonprofit'corporation and reports to its Board of Directors. Alaska Statute 37.23.050 requires the retention of all investment manager. • The AMLIP manager is required to produce monthly disclosure statements to the pool.The pool has also retained an investment advisor to monitor the performance of the investment manager and to ensure compliance with investment policies.All participation in the pool is,voluntary.The pool must maintain a dollar weighted.average maturity of 90 days or less, and only purchase instruments having remaining maturities of 397 days or less.On a monthly basis,the investthents in the pool are reviewed for fair value by an independent pricing service. 35 Page 48 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued All highly liquid investments, excluding restricted assets, with original maturities of ninety days or less are considered to be cash equivalents. For purposes of the Statements of C ash Flows,equity in central treasury held by enterprise funds are treated as cash equivalents. Investments for the government, as well as the component unit, are reported at fair value, as determined by quoted market prices.The reported value of the pool is the same as the fair value of the pool shares. Receivables and Payables - .Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either"due to/from.other funds" (i.e., the current portion of inter-fund loans)or"advances to/from other funds"(i.e.,the noncurrent portion of inter-fund loans). Any residual balances outstanding between the governmental activities and business type activities are reported in the government wide financial statements as"internal balances." 1 Advances between funds, as reported in the fund financial statements, are offset by,a fund balance reserve account in applicable governmental funds to indicate that they are riot available for appropriation and are not expendable available financial resources. ■ Inventories and Prepaid Items/Expenses 1. Expendable operating supplies of the Borough are accounted for using the purchases method.There are no significant amounts of such inventories on hand at year end. The entire Hospital Enterprise Fund inventory is assigned to Providence as of April 21, 1997. According to the terms of the lease agreement for the hospital facilities [see note 13(a)J. those items are required to be returned to the Borough at the termination of the lease in at least equal value. Payments made to vendors for services that are applicable td future accounting periods are recorded as prepaid items. The prepaid assets do not reflect current available resources and, thus, an equivalent portion of fund balance is classified as nonspendable in the fund financial statements. Prepaid items and expenses are based on the consumption method. Capital Assets Capital asceic,which include property,plant,equipment.and infrastructure Sets(e.g.,roads,street lights,and similar items including those acquired prior to fiscal years ended after June 30, 1980).are reported in the applicable governmental or business type activities columns in the government-wide financial statements. Capital assets are defined by the Borough as assets with an initial, individual cost of more than $5,000(amount not rounded)and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. -Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. • Major outlays for capital assets and improvements are capitalized as projects are constructed.Interest incurred during the construction phase of capital assets of business type activities is included as part of the capitalized value of the assets constructed.There was no interest capitalized during the year. 36 Page 49 of 215 Review of the Comprehensive.Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued Property, plant, and equipment of the primary government is depreciated using the straight line method over the following estimated useful lives: Buildings and improvements 10-40 years Improvements other than buildings 10-15 years Equipment 5-10 years Infrastructure 40 years Compensated Absences It is the Borough's policy to permit employees to accumulate earned but unused annual leave benefits.All annual leave pay is accrued when incurred in the government wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured,for example,as a result of employee resignations and retirements. Long-term Obligations In the government wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business .type activities, or proprietary fund Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable ale reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the year • incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs,during the current period.The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs,- whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.Interest on long-term obligations is recorded as an expenditure when due. Net Position In the government wide financial statements, net position is reported in three categories; net investment in capital assets,restricted net position and unrestricted net position. Net position is reported as restricted when constraints placed on net asset use are either externally imposed by creditors(such as through debt covenants), grantors,contributors provisions or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Fund Balance • In the Fund Financial Statements, fund balance includes five classifications as follows: Nonspendable Fund Balance—amounts that are legally or contractually required to be maintained intact(such as the corpus of an endowment fdhd).or amounts that are not in a spendable form(such as inventory;prepaid expenses,supplies,and long-term-receivables). Such constraint is binding until the legal or contractual requirement is repealed or the amounts become spendable. 37 Page 50 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes in Basic Financial Statements.Continued Restricted Fund Balance - amounts constrained to specific purposes-by their providers (such as grantors and higher levels of government),through constitutional provisions,or by enabling legislation: Such constraint is binding unless modified or rescinded by external body,laws,or regulation. • Committed Fund Balance-amounts that can be used only for the specific purposes determined by a formal action of the Borough Assembly, the Borough's highest level,of decision-making authority. Commitments may be changed or lifted by the Assembly taking the same fonnal action that imposed the constraint originally, The formal action that is required to be taken to establish,modify or rescind a fund balance"commitment is for the Assembly to pass a resolution. Assigned Fund Balance — amounts that are constrained by the Borough for specific purposes. In governmental funds other than the General Fund,assigned fund balance represents the amount that is not restricted or committed, but constrained for a specific.purpose. Assignment of Pond balance is 1 made by the Borough Assembly or its designee, the Finance Director. Such constraint is binding unless modified Or eliminated by the Borough Assembly or Finance Director. Assignment of fund I balance is made during the budget process and reviewed at the end of the fiscal year_ Assigned fund balance for FY2104 represents amounts constrained for capital project Ponds and was assigned by the Finance Director. Unassigned Fund Balance —amounts not contained in the other classifications and available for any purpose. Positive unassigned amounts will be reported only in the General Fund, . If another governmental fund,other than the General Fund,has a fund balance deficit,then'it will be reported as a negative amount in the unassigned classification in that fund. The order of spending, regarding the restricted and unrestricted fund balance when an expenditure is incurred for which both restricted and unrestricted fund balance is available should first reduce restricted fund balance and then unrestricted fund balance. The order of spending regarding unrestricted fund balance is that committed amounts should be reduced first, follod•ed by the assigned amounts, and then the unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. • Compliance with the provisions of the Fund Balance Classification Policy are as part of the annual budget adoption process. The Finance Director reports to the Assembly as close to the end of the year as possible the anticipated year-end fund balance or deficit The Assembly takes appropriate action to commit Or assign, or otherwise allocate prior year fund balances as a part of the budget planning process. The Borough's Special Revenue Funds he Used to account for school district support, fire and road service areas,federal and state grant programs,..street lighting districts,and operations and maintenance programs that are restricted or committed. (e) Revenues,Expenditures,and Expenses Property Taxes Property taxes are based on the assessed value of taxable property as of January I. Pursuant to Alaska Statute 29.45.240,the Borough establishes the mill rate On or before June 15th.Tax bills are then mailed on or before July 1st 38 Page 51 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued Taxes are due when billed and generally become delinquent on or after October 16th. The Borough code also provides for Split.payments. If a taxpayer avails himself of this provision,one-halfmust be paid on or before August 15th and the remainder becomes due on or before November 15th(in lieu of October 15th). Borough property tax revenues are recognized in the fiscal year in which they become measurable and available, which is generally the year following the year the tax bills are mailed. All taxes are delinquent on November 16th,and a tax foreclosure process may commence as outlined in Alaska Statutes Title 29. Briefly, this entails the petition for Judgment of Foreclosure signed by the District Court Judge and-the publication of all delinquent taxes in the local newspaper for four consecutive weeks. Real property tax liens are enforced by one general foreclosure proceeding against the delinquent properties. • Prior to FY2012 all area wide property taxes were deposited into the General Fund and then transferred to the other area wide funds. As of FY2012 the Borough has set a-separate mill rate for each area wide function that was funded by property taxes. For FY2014 the Borough set a mill rate of 0.03 mills for the General Fund,8.75 mills for the Education Support Special Revenue Fund, 1.81 mills for the Debt Service Fund and 0.16 mills for the Renewal and Replacement Projects Capital Project Fund for a total area wide mill rate of 10.75. This was the same mill rate as FY2013. Severance Taxes Severance taxes are based on the amount and value of natural resources severed from the environment. Types of resources taxed include seafood, gravel and mineral resources, and timber. Severance tax returns are sent to appropriate companies (as determined by the Borough Assessor) and are returned to the Borough Finance Department.'The returns are filed quarterly,and are due by the end of the month following the quarter's end. Borough severance tax revenue_s are recognized in the fiscal year in which they become measurable and available. Intergovernmental Revenue State shared revenues, safe communities, State education related entitlement programs and State levied taxes, the proceeds Of which are distributed to local governments, are recorded in the fiscal year to which they relate, including accrual at year end if final payments due are measurable and received within approximately two months after year end. State of Alaska and Federal government cost reimbursable grants and contracts are recorded to the extent of allowable expenditures in the period in which the expenditures were incurred. When both restricted and unrestricted resources are available for use for governmental activities, it is the Borough's policy to use restricted resources fist.then unrestricted resource's as they are needed. 39 Page 52 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial.Statements.Continued Operating and Nonoperating Revenue and Expenses Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses,generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Municipal Solid Waste Collection arid Disposal Fund and 911 Service Fund are charges to customers for services. The principal operating revenues of the Hospital Facilities Fund and the Kodiak Fisheries Research Center Fund are rents from customers. Operating expenses for proprietary funds include costs of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Revenue from Investments and Property Amounts earned on investment of available cash balances and the rental of building facilities are recorded in the period to which they relate, including accrual at year end of the balance due, and unrealized gains and losses on investments held at fiscal year end. Land Sales Proceeds and Other Local Revenues Amounts received pursuant to land-sale contracts are recorded on the modified accrual basis in the fund financial statements and the accrual basis in the government-wide financial statements. Other local revenues are recorded on a basis consistent with their nature in relation to measurement and availability standards. fn Cash Flows All highly liquid investments,excluding restricted assets, with original maturities of three months or less are considered cash equivalents for purposes of the statement of cash flows. (g) Use.of Estimates Preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in these financial statements. Actual results may differ from the estimates. Significant estimates include the allowance for doubtful accounts, the useful lives of assets and related accumulated depreciation,and accrued landfill closure'and post-closure care costs. (2) Stewardship,Compliance,and Accountability (a) Excess of Expenditures over Appropriations The following fund expenditures exceeded their budget: Fund Excess Special Revenue Funds: Education Support 500 Kodiak Airport Fire District 59 Debt Service Fund- Education and Health 98,835 Total expenditures exceeding budgets S- 99,394 40 Page 53 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued (b) Deficit Fund Equity The individual fund deficits at June 30,2014,are as follows: Special Revenue Funds: Education Support S 31.674 L.E.P.0 17,821 • Trinity Island Paving 11,985 Oil Spill Disaster 10.566 Renewal and Replacement Projects Capital Project Fund 2,804.587 Total fund deficits S 2,876,633 The deficit in Education Support Fund, L.E.P.C. Fund, and Trinity Island Paving Fund will all be funded by transfers in from the General Fund in FY2015. The deficit in the Renewal and Replacement Projects Capital Projects Fund will be covered by a loan from the Facilities Special Revenue Fund,which will then be repaid by a mill rate increase. (3) Cash and Investments A portion of the Borough's investments are in the Alaska Municipal League Investment Pool (AMLIP). The investment in AMLIP represents the Borough's share of ownership in the pool rather than ownership of specific securities. The fair values of the investments in the pool approximates amortized cost and is equal to the value of pool shares. To obtain a copy of AMLIP's financial statements contact Key Trust of Alaska at 101 West Benson Blvd.,Room 302,Anchorage,Alaska 99503. As of June 30,2014,the Borough had the following investments: Investment Maturities(in years) Fair Less Investment Tvne value than 1 to 5 6 ro 10 U.S.Agency Securities: Federal Home Loan Bank S 12,738306 8,260,897 4,477,409 - Federal Home Loan Mortgage Corporation 5,118,445 2,007,145 3,111,300 Federal Home Loan Discount Note 19,999,500 19,999,500 Federal Farm Credit Bank 1,189,343 - 1,189,343 Federal National Mortgage Association 5,080,076 999,980 4,080,096 Municipal Obligations 29,401,333 5,428,793 2,699.419 • .21,273,121 Alaska Municipal League Investment Pool 14,657,777 14,657,777 - - CertificatesofDeposit 948,897 - 948,897 • 5 89,133,677 51,354,092 15,317,121 22,462,464 • In addition to the investments listed above, Kodiak Island Borough also had cash equivalents of $5,833,443. 41 Page 54 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued Interest Rate Risk The Borough's investment policy does not limit investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk Statutes authorize the Borough to invest in obligations Of the United States, the State of Alaska and its political subdivisions, savings accounts, certificates of deposit, banker's .acceptances, repurchase agreements, and such other legal security instruments. The Borough'does not have a formal investment policy that restricts investments based on credit risk.. At June 30, 2014, the Borough's U.S.-agencies bonds were rated AAA by Standard & Poor and Fitch Ratings, and AAA"by Moody's Investor Service. At June 30,•2014, the Borough's investment:in the Alaska Municipal League Investment Pool was unrated. Concentration of Credit Risk The Borough places no limit on the amount the Borough may invest in any one issuer. At June 30,2014, the Borough had 50%percent of its investments in U.S.Government agency securities. Custodial Credit Risk—Deposits The Borough maintains a cash pool that is available for use byall funds. Each fund's portion of this pool is reported on the Balance Sheet and Statements of Net Position as "Equity in Central Treasury" or + i amounts"due to/fom other funds." ' The Borough bank accounts are insured by the Federal Depository Insurance Corporation (FDIC) to a maximum of$250,000. U.S.Treasury obligations collateralize the remaining bank balance,which is held • by Bank of New York in a Tri-party collateral agreement with Wells Fargo, the pledgingfinancial institution's agent,in the Borough's name. Camilla;Credit Risk-imestments For an investment,this is a risk that,in the event of the failure of the countetparty,the borough will not be able to recover the value of its investments or collateral securities that are in the'possession of an outside party. The Borough manages its custodial Credit risk_in investments by requiring collateraliiation agreements. The Borough had no debt securities exposed to custodial credit risk at June 30,2014. (4) Annual Appropriation to the School District An annual appropriation is made to the School District. In addition to the annual appropriation, the Borough provides the School District, without charge, general liability and property insurance, data processing services, the annual independent audit, mental health services, and grounds maintenance services. 42 Page 55 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Besic Financial Statements,Continued (5) Receivables Curtailments'Fonts ' Capital Poled Yenda . FAnatbn and Edondon and Kodak High Renewal and Other Total 1 Coed Support Special Health Debi Stbwl Repbamnt Gw4riatotal Covenmmhl Fold Revenue Find Sark Arad 'Liberation Project; Font Ynada Receivables: - .. Gaeta' 1 292,983 49,396 331,884 70,160 43,838 176,140 971,311 Taxes 434511 .170,206 33,486 - .2,580 17,716 651,559 Cowmen and a8er 14.740 - - - 72,912 87,711 Onus ttheirsIda 742,234 219,603 372,350 70,160 46,418 266,898 1.717562 J -Loa:dlownwe f unethntbJes •(15528) .. - - - - (1548) I Net total r®ratla 1 -219,602 372,350 70,164 ir6, 701,634 Enreryrhe F . Municipal Kok* Other Said Waste Fbkrb Nonmajor Teal Total Total i Caaertian 7tapftal Resarrb Enterprise eaterprue Coiamntal Prink), Old Disposal paefSties Cater Fend .Finds FoaN •Cavenuat 1 Readvabler Giants $ 4,047,505 38,553 - - 4,086,058 971,381 5,057,439 Taxes '- - - , - - 658,559 658,559 Customers and atom . 260,897 - 40,046 6,110 307,053 87,722 394,775■ Qua racivabta . 4,301,402 .38,553 40,046 •6,110 - 4393,111 - 1.717,662 6,110,773 Less:illaMOw for onaOeetibla - - - - (1548) (15 488) Net total reidrobler 8 4,308,402 38,553 40,046 6,110 4,393,1111 1,701, � (6) Deferred lanais and Unearned Revenues 'Governmental funds report defined inflows in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also report unearned revenues in connection with resources that have been received, but not yet earned. At June 30, 2014, the various components of deferred inflows and unlaced revenue reported in the governmental funds were as follows: Unavailable Unearned .Total Unavailable property tunes receivable $ 194,852 - 194,852 i Unavailable land sales receivable '513,765 - 513,765 Grant advances prior to expending all proceeds 54,163 134:815 • 188.978 Total unavailablduneamed revenue for governmental funds $ 767 78Q 134.814 $91595 43 Page 56 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAX ISLAND BOROUGH Notes to Basic Financial Statements,Continued (7) Capital Assets ' As rioted in Footnote(12), the Borough leases the Kodiak Island Hospital and Care Center to Sisters of Providence. The value of the leased assets and associated depreciation ars-eflected m the Hospital Facilities Fund following. Capital asset activity for the year ended June 30,2014 was as follows: Beginning Ending Balance Increase . Decrease Balance Governmental activities: Capital assets,not being • depreciated: ' Land S. 23,467,304 — (194316) 23,272,788 Construction work-in-progress 12,604,897 35,560,550 (302,450) 47,862,997 1 Total 36,072,201 35,560,550 (496,966) '71,135,785 I. Capital assets,being depreciated: Buildings end'improvements 111,772,770 55,011 — 111,827,781 improvements other than buildings 21,164,554 53,084 — - 21,217,638 Equipment 2,936,661 241,795 — 3,178,456 Infrastructure .5,762,722 — 5,762,722 Total 141,634707 349,890 — 141,986,597. I Less accumulated depreciation for. Buildings and improvements 64,687,487 2,551,704 — 67239,191 Improvements other than buildings 6,177,095 1,150,876 — 7,327,971 Equipment 2,®4,2 9 195,411 — 2,199,640 Infrastructure 4,787393 144,068 4,931,461— Total 77,656,204 4,042,059 — . 81,698,263 Total capital assets being depreciated,net 63,980,503 (3,692,169) — 60,288,334 Total governnrntal activities,net $ 1041052,704 31,868,381 (496,966) 131,424,119 44 Page 57 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK,ISLAND BOROUGH 1 Notes to Basic Financial Statements„Continued' Beginning Sang Balance Increase _ Decrease_ Balance. ;Business-type activities: Municipal Solid W este Collection and Disposal Fund capital assets, not being depreciated: land - S 1,651,248 — — 1,651,248 Consttuctionwodc-m-progress 9,631,578. 8,470,829 — _.18;102,407. 1 Total .11,282,826. . .8,470,829 — . .19,753,655 Capital'assets,being depreciated: Unclassified utility plant in r service 2,178,733 — — 2,178,733 Improvements other than bindings 2,410,717 — — 2,410,717 Machinery and equipmnt 1,928,803 . 1,928,803 Total . 6,518,253 — — 6,518,253_. less accumulated depieciatibn for Unclassified utility plant in • service 1,169,411 42,055 — :1,211 ,466 Improvements otherthen t buildings 1,301,154 132,666 — ,1,433,820 Machinery and equipment 1,481,881 103,621 — _ _,1585,502 'Iota) 3,952,446 . 278,342. . — 4,230,788 1 . Total capital assets being depreciated,net 2,565,807 (278,342] — 2,287,465 Total Municipal Solid Waite and Disposal Fund,net S 13,848,633' 8,192,487 — 22,041,120 I t 45 Page 58 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued Beginning Ending Balance Increase Decrease Balance Hospital Facilities Fund,Capital assets,not being depreciated: Amiork S 16,091 — — 16,091 Land 10,251 — — 10,251 Construction unrk-in-progress 10.971,693 9,969,269 — 20.940,962 Total 10,998,035 9,969,269 — 20.967,304 Capital assets,being depreciated: Buildings 27,131.044 — — 27.131,044 Improvements other than buildings 401.046 — — 401,046 Machinery and equipment 3.627,068 — — 3,627,068 Total 31,159.158 — — 31,159,158 Less accumulated depreciation for: Buildings 14.922,012 800,044 — 15,722.056 Improvements other than buildings 197.122 14,176 — 211,298 Machinery and equipment 3,401,388 53,693 — 3,455,081 Total 18520.522 867.913 — 19,388,435 Total capital assets being depreciated,net 12,638,636 (867,913) — 11.770,723 Total Hospital Facilities Fund,net S 23.636,671 9,101,356 — 32,738,027 46 Page 59 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued Beginning Ending Balance Increase Decrease Balance Kodiak Fisheries Research Center Fund Capital assets,not being depreciated: Construction cork-in-progress $ 187,238 844,135 — 1,031,373 Capital assets,being depreciated: Buildings 17,840,410 — — 17,840,410 Improvements other han buildings 1,058,261 — — 1,058,261 Machinery and equipment 1,187,679. — — 1,187,679 Total 20,086,350 - — — 20,086,350 - Less accumulated depredation for: Buildings 8,323,761 594,683 — 8,918,444 Improvements other than buildings 481,785 35,432 — 517,217 Machinery and equipment 1,161,559 6,028 — 1,167,587 Total 9,967,105 636,143 — 10,603,248 Total capital assets being depreciated,net 10,119,245 (636,143) — 9,483,102 Total Kodiak Fisheries Research Center Fund,net $ 10,306,483 . 207,992 — 10,514,475 47 Page 60 of 215 • Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued Beginning - Ending Balance .Increase Decrease .Balance Total business-type activities: Capital assets.not being depreciated: Artwork S 16,091 — — 16.091 Land 1,661,499 1,661,499 Construction work-in-progress 20.790,509 19.284233 — 40.074,742 Total 22,468.099 19284.233 — 41,752332 Capital assets,being depreciated: Unclassified utility plant in service 2.178,733 — — 2,178,733 Buildings 44,971,454 44,971,454 Improvements other than buildings 3,870,024 — — 3,870,024 Machinery and equipment 6.743.550 6,743.550 Total 57,763,761 — — 57.763,761 Less accumulated depreciation for: Unclassified utility plant in service 1,169,411 42,055 — 1,211,466 Buildings 23,189,205 1,394,727 — 24,583,932 Improvements other than buildings . - 2,036,629 182,274 — 2.218,903 Machinery and equipment 6,044,828 163,342 — 6,208,170 Total 32.440.073 1,782.398 — 34,222,471 Total capital assets being depreciated,net 25.323,688 (1.782.398) — 23.541290 Total business-type activities,net S 47,791.787 17,501,835 — 65,293,622 • 48 Page 61 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued r Depreciation expense was charged to the departments and functions of the primary government as follows: General government $ 652,877 Public safety 174,917 • Emergency preparedness 2,500 Primary and secondary education 3,21 1,765 Total—governmental activities 4,042,059. Business-type activities: Municipal solid waste collection and disposal 278,342 Hospital facilities 867,913 Kodiak fisheries research center 636,143 Total—business-type activities 1,782,398 Total primary government $ 5,824,457 • (8) Interfund Receivables,Payables and Transfers • (a) !nlerfund Receivables and Payables lnterfund balances at June 30,2014 consisted of the following: (1) Due to/from other funds: Receivable Fund Payable Fund Amount Major governmental funds: General Fund Renewal and Replacement Projects $ 95,072 General Fund Other Governmental Funds 60,242 General Fund Kodiak Fisheries Research Center Enterprise Fund 54,163 Facilities Special Revenue Fund General Fwd 174,312 Total primary government $ 383,789 (2) Advances to/from Other funds: Receivable Fund Payable Fund Amount Major governmental funds- Facilities Special Revenue Fund Renewal and Replacement Project $ 2,745,028 Hospital Facilities Enterprise Fund 876,872 Kodiak Fisheries Research Center Enterprise Fund 3,095,000 Total primary government $ 6,716,900 49 • Page 62 of 215 Review of the Comprehensive Annual Financial Report (CAFR). • AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued The balance of 53,095,000 due the Facilities Fund from the K.F.R.C. Fund resulted from a loan of $8,000,000 that was made to help pay for the,construction of the building. 52.555,000 is not scheduled to be paid in FY2015 and is recorded as a noncurrent liability in advances froth other .funds. The balance of $876,872 due the Facilities Special Revenue Fund from the Hospital Facilities Enterprise Fund resulted from a loan of$1,600,000 that was made part of the cost of a lawsuit. $794,149 is not scheduled to be paid inFY2015 and is recorded as a noncurrent liability in advances from other funds. All remaining interfund balances were short term loans to cover negative cash balances at year end. The Outstanding short term balances between funds result from the time lag between the dates that (1) inter-fund goods and services are provided or reimbursable expenditures or expenses occur, (2)transactions are recorded in the accounting system,and(3)payments between funds are made. (b) Tong-tern:Interfund Borrowings In October 1997 the Facilities Special Revenue Fund loaned 58.000,000 to the Kodiak Fisheries Research Center Enterprise Fund. This loan was to help finance the construction of the Kodiak Fisheries Research Center. The loan from the Facilities Special Revenue Fund is accounted for as a long-term inter-fund advance, while the liability in the Kodiak Fisheries Research Center Enterprise Fund is accounted for as a long-term inter-fund borrowing.The advance bears interest at 7%.and the scheduled payments for the net five fiscal years ended and thereafter are as follows: Principal Interest Total Year ending June 30: 2015 $ 540,000 197.750 737,750 2016 575,000 158,725 733,725 2017 615,000 117,075 732,075 2018 660,000 72,450 732,450 2019 705,000 24,675 719,675 5 3,095,000 570,675. 3,665,675 50 Page 63 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued • In July 2003, the Facilities Special Revenue Fund loaned $1,600.000 to the Hospital Facilities Enterprise Fund in order to help fund current operations: The loan from the Facilities Special Revenue Fundjis accounted for as a long-term interfund advance; while the liability in the Hospital Facilities Enterprise Fund is:accounted for as a long-teen interfund borrowing. The advance bears interest at 4%,and the scheduled payments for the next five fiscal years and thereafter are as follows: Principal Interest Total • Year ending June 30: 2015 $ 82,723 34,255 116,978 2016 86,065 30,913 116,978 2017 89,542 27,436 116,978 2018 93,159 23,819 116,978 2019 96,923 20,056 116,979 2020-2023 " 428,460 39,451 467,911 $ 876,872 175,930. 1,052,802 • (e) Transfers Interfund transfers have been made in accordance with budget ordinances. Funds are transferred from one fund to support expenditures of other funds hi accordance with the authority established for the individual fund.Transfers between funds during the year ended June 30,2014,were as follows: Tnmren in Govemnntal Foods bterprbe Fonda Raernl and Equation Education Replacement Municipal Support and Health Projects Other soEd Waste Hospital Special Revenue Debt Servkr Capital Project Governmental Collection and Facilities Fund Fund Fund Funds Dhpoul Fond Fund ToaW, Tnnfm Out Major GovtmmenW Fuodu General and S 220.000 250,000 - 13,500 - 183,500 Facilities Special Roam Fond 110000 232.402 161,963 18,000 - - 522,365 Other Governmental Fads - - - - - 66 500 66500 Total birders S 330000 182,402 161,963 18030 11,500 66,500 1.072,365 A summary of significant transfers are as follows: • The General Fund transferred $220,000 to the Education Support Special Revenue Fund to cover school district support. • The General Fund transferred $250,000 to the Education and Health Debt Service Fund to pay for debt service on school district and hospital bonds. ' • The General Fund transferred$13,500 to the Municipal Solid Waste Collection and Disposal Enterprise Fund to pay for garbage dispersal for area thrift shops. 51 Page 64 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements.Continued • The Facilities Special Revenue Fund transferred$110,000 to the Education Support Special Revenue Fund to cover school district insurance costs. • The Facilities Special Revenue Fund transferred $232,402 to the Education and Health Debt Service Fund for debt service on school district and hospital bonds. • The Facilities Special Revenue Fund transferred$161,963 to the Renewal and Replacement Projects Capital Project Fund to pay For capital improvements. • The Facilities Sliecial Revenue Fund transferred $18,000 to the Building and Grounds Special Revenue Fund to pay additional snow removal costs at school sites. • The Fern Fuller Trust Special Revenue Fund transferred $66.500 to the Hospital Facilities Enterprise Fund for the purchase of new equipment. The remainder of ibis page left blank inrenlionnlly. 52 Page 65 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. (This page was left blank intentionally) • Page 66 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,.Continued- (9) Long Term Debt (a) General Obligation Bonds and other Debt The Borough issues general obligation bonds and other debt to provide funds for the Requisition and construction of major capital facilities.. General obligation bonds are direct obligations and pledge the Poll faith and credit of the Borough. General obligation bonds and other debt currently outstanding are as follows: Interest Principal p nnaent% - 'hie&debt Rates Dam Issue date. pbtbriry dates Dates Amount Central obligation bonds-2001CSeries 4.0-5.0% vl-m 7/21204 7/1/2014 07/01/14 - C.meral obligation bonds-2004 DSeries 30% 5/1-11/1 12/12004 11/12014 11/01/14 530.1100 530.000 Central obligation bonds—2008A Series 4.05.E 4/1.10/1 11/12009 4/020214 04/01/15 335,000 04/01/16 350000 04/01/17 370.000 04/01/19 390.000 04/01/19 400,000 04101/31 415.000 04101/31 430.000 0410t22 450.000 04/0123 470.000 0001/24 490,000 0/01/25 515,000 03/01/26 540,000 000127 565.000 04/01/28 595,000 6.305.000 Ceneralobligation bonds—2009 A Series '334%% 2/1$1 4/92009 2/1/2014 02/14/14 - 53 Page 67 of 215 • Review of the Comprehensive Annual Financial Report(CAFR). • AGENDA ITEM #2.A. • KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued Authorized Prior.oars Balance at Retired Balance al Fiscal year Amount issued Retired Juts 1,2013 hmed Refunded June 30,2014 2004 9300.000 9,300,000 8.865.000 435,000 — 435,000 — 2004 11,050.000 11,050,000 10.010,000 1,040.000 — 510,000 530,000 2008 8.000,000 8,000,000 1,375.000 6,623,000 — 320,000 6305,000 2009 6,740,000 6,740,000 5,295,000 1,445,000 — 1.445,000 — 54 Page 68 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODL4K ISLAND BOROUGH Notes to Basic.Financial Statements.Continued Interns Principal payments Type of debt Rates Dates Issue date Maturity dates Dates - Amount General obligation bonds—2011 Series One 2.05%-5.20% 911-3/1 3/12011 3/1/2031 03/01/15 305,000 03/01/16 310,000 03/01/17 320,000 03/01/19 330.000 03/01/19 340.000 03/01/20 355,000 03/01/21 370.000 03/0122 385.000 03/01/23 405.000 03/01/24 425,000 03/01/25 445,000 03/01/26 465.000 03/01/27 485.000 03/0128• 510.000 03/01/29 535,000 03/01/30 565.000 03/01/31 595.000 7.145.000 General obligation bonds-2012 Series A 2.0-5.0% 3/1-911 5242012 911/2024 9/1/2014 9/12015 435,000 9112016 455,000 9/1/2017 360.000 9!1/2018 480,000 9/1/2019 495,000 9/12020 525,000 9/1/2021 545,000 9/1/2022 570.000 9/1/2023 600,000 9/12023 630.000 5.195.000 55 Page 69 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH - Notes to Basic Financial Statements,Continued Authorized Prior years Balance at Retired' Balance al Fiscal year Amount hued Retired July 1,2013 Issued Refunded June 30,2014 2012 8,000,000 8,002000 560,000 7,440,000 — 295,000 7,145.000 2012 5,230,000 5,230,000 35,000 5,195.000 — — 5,193,000 56 Page 70 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued In Principal payments Tsie of debt Ratcs -Ihtes Issue dates Sbmritvdates Dates Amount C•neral obligation bonds-2012 Series f3 2.0-5.0% 3/1-9/1 512412012 9/1/2024 9/1/2014 — 9/1/2015 530.000 911/2016 550.000 9/1/2017 565.000 9/1/2018 585.000 9(1/2019 610.000 9,12020 640,000 9/1/2@1 665.000 9/1/2022 695,000 9/12023 730000 9/1/2024 770.1700 6.340.(00 Qneral obligation bonds-2013 Series One 3.8-5.0% 2/1-W1 3/1/2013 2/1/2033 2/1/2015 730.000 2/1/2016 760,000 2/1/2017 790,1700 2/1/2018 820000 2/1/2019 855.000 2/1/2020 895,000 2/12021 935.000 2/12022 970.000 2/12023 1.010.000 2/120^_4 1,050,000 2/12025 1.100,000 22/12026 1.155.030 2/1/2027 1,315.000 2/12028 1,775,000 2/12029 1,340,000 2/12030 1,405,000 2/1/2031 1.475000 2/1/2032 1,550.000 2/1/2033 1.630,000 '20.960.000 57 Page 71 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued Authorized Prior yeora Balance at Retired' Balance at Fiscal year Amount Issued Retired July 1,2013 Issued Refunded June30,2014 1 2012 6,385,000 6,385.000 45.000 6,340,000 — — 6,340,000 2013 21,595.000 21595,000 — 21,595,000 — 635,000 20,960,000 58 Page 72 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements.Continued Interest Principal payments Type of deft Rates Dates bane Ste \Iaturity Sates Dates Amount Central obligation - bonds-2014 Series One 2.0-5.0% 3/1-9/1 3/1/2013 3/1/2034 3/12015 740.000 3/1/2016 785,000 3/12017 810,0(10 3/1/2018 840.000 3/1/2019 880,000 3/1/2020 900.0(10 3/1/2021 915.000 3/1/2022 965.000 3/1/2023 1.010,000 3/1/2024 1.060.000 3/1/2025 1.110,000 3/1/2026 1.150.000 3/1/2027 1205,000 3/1/2028 1.265.000 3/1/2029 1330.000 3/1/2030 1,395.000 3/1/2031 1.465000 311/2032 1335.000 3/1/2033 1.610,000 3/1/2034 1.690.000 22.660.000 Clean water—Karluk 3.92-4.05;: •• •• •• 6/12015 6,039 6/12016 6.130 6112017 6.222 6/1/2018 6.315 6/1/2019 6,410 6/1/2020 5.926 37.042 f 69.172042 • 59 Page 73 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued Authorized Prior years Balance at Retired/ Balance at Fiscal year Amount Issued Retired July1,2013 Issued Refunded June 30,2014 2014 22,660,000 — — — 22,660.000 — 22,660,000 1998 /03.000 97,019 54.027 42,992 — 5,950 37 012 S 99,360.000 76,397,019 26.239,027 50,157,992 22,660.000 3,645,950 69,172,042 it 60 Page 74 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial.Statements,Continued The annual requirements to amortize all general obligation bonded debt and the ADEC loan payable outstanding as of June 30.2014,are as follows: General ADEC obligation loan payable Total Interest• Year ending June 30: 2015 S 2,640.000 6,039 2.646,039 3,119,885 2016 3.170,000 6.130 3.176.130 2,989,362 2017 3,295.000 6,222 3,301,222 2,869,212 2018 3.395,000 6.315 3,401,315 2.750.462 2019 3,540,000 6,410 3.546,410 2.617.362 2020-2024 19,980,000 5.926 19,985,926 10,756,373 2025-2029 18.200,000 — '18,200,000 6,158,180 2030-2034 14,915,000 — 14,915,000 1,964,556 S 69.135.000 37,042 69,172,042 33.225,392 At June.30, 2014. there was $665.711 ai'ailable in the Education and Health Debt Service Fund to service general obligation bonds. There are a number of limitations and restrictions contained in the various bond indentures. The Borough is in compliance with all significant limitations and restrictions. • The remainder of this page left blank intentionally. 61 Page 75 of 215 Review of the Comprehensive Annual Financial Report (CAFR). • AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued (b) Notes Payable As of June 30, 2014,the Borough had the following notes payable outstanding in the Municipal Solid Waste Collection and Disposal Enterprise Fund: Note payable(ACWF 8505031)to Alaska Department of Environmental Conservation(ADEC),to be paid within 20 years. From June 2, 1999 until April 28,2005 interest accrued at 2.5%. From April 29,2005 to June 30,2014 interest accrued at 1.5%. Th'e first loan payment was made on April I,2012,with payments of 5100,000 being-due on April I in each successive year. $ 1,700,000 Note payable(ACWF 8505041)to Alaska Department ofEnbiromnental Conservation(ADEC),to be paid within 20 years. Interest accrued at 3.8%over the life of loan. The first loan payment is due one year following sustantial completion and initiation of operation of the facility. $ 4,441.653 Note payable(ACWF 8505061)to Alaska Department of Environmental Conservation(ADEC),to be paid within 20 years. Interest accrued at 3.8%over the life of the loan. The first loan payment is due one year following sustantial completion and initiation of operation of the facility. $ 750,000 On September 15,2011 the Borough issued a$3,275,000 revenue bond, with a premium of$384,379. The bond was marketed by the Alaska Municipal Bond Bank. Interest accrues at rates between 3.0 and 5.0% with payments due on September I and March 1 of each year. The bond will mature on September 1,2026. $ 3,315,242 As of June 30,2014,the Borough had the following bond payable outstanding in the Hospital Facilities Enterprise Fund: On June 19,2013 the Borough issued a S17,110,000 revenue bond, with a premium of$1,707320. The bond was marketed by the Alaska Municipal Bond Dank.Interest accrues at rates bisvteen 2.0 and 5.0% with payments due on June I of each year.The bond will mature on June 1,2023. S 18,703,498 62 Page 76 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to.Basic Financial Statements,Continued (c) Changes in Long-lean Liabilities Long-term liability activity for the year ended June 30.2014,was as follows: Balance Balance June 30,. June30. Duenithin 2013 Additions Reductions 2014 one year Governmental activities: Bands payable: General obligation bonds S 50,115,000 22,660.000 3,640,000 69,135,000 3.640.000 Bond premium 5.121.114 2.427.432 _ 455.990 7.092.556 334.618 53236,114 25,087,432 4,095,990 76,227,556 3,974.618 ADEC loans 42,992 — 5,950 37.042 5,950 Compensated absences 298.640 247,071 217.182 328.529 _ 217.182 Tmal S 55577,746 25334503 4.319.122 .76.593.127 4.197.750 Buiiness-type ban hies: Municipal Solid Waste Collection and Disposal: • Landfill closure and post-closure costs S 5389,650 —. 1421,527 3,968,123 Notes payable 7346324 3.147.783 287.212 10.206.895 270,000 Total S 12,735.974 3.147.783 . 1.708,739 14.175.018 270.000 Hospital Facilities: Long term 6uterfund borrowings $ 956382 — 79,510 876,872 82,723 Bonds payable 18.817.320 — 113.822 18.703.498 605.000 Total S 19.773,702 — 193,332 19,580.370 687.723 Kodiak Fisheries Research Center Long tern interfund borrowings 5 3.595.000 — 500.000 3.095.000 540.000 Total '.5 3595,000 — 500,000 3.095.000 . 540.000 Business-type activities: Landfill closure and por- closure costs S 5.389.650 — 1,421,527 3,968.123 — Long term interfund borrowings 4551,382 — 579,510 3,971,872 622,723 Notes/bonds payable 26.163.644 3.147.783 401.034 28.910.393 875.000 Total S 36304,676 3,147383 2,402.071 .36.850388 1.497.723.. For governmental activities,compensated absences are generally liquidated by the General Fund. 63 Page 77 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAKISLAND BOROUGH Notes to Basic Financial Statements,Continued (10) Fund Balances Detailed information related to amounts classified as nonspendable,committed and assigned fund balances in governmental funds at June 30,2014 are as follows: Education Kodbk Facditks and Health thigh School Special Debt Renovation Other General Revenue Service Capital (avemnental . Fund baLl Fund Project Fund Funds .Total Nonspendabk: Prepaid item S 1,459 - - - - 1,459 Long lerm¢ceivables - • 513,765 513,765 Totalnonspendabk S 1,459 - - - 513,765 515224 Conmitted: Facility upgrades - 39,548,944 - • - 39.548,944 Debtservke • - 665,711 - - 665,711 Eke and Road Service Areas • - - • 1,336,940 1,336,940 Buildings and Croonds • 323281 323,281 Street lighting Districts • - - - 44298 44298 TourismDevekpnent • - - • 133,682 133,682 Mission Lake Tde Gate - • - • 37,417 37,417 Fern Fuller Trust - - - - - 264,856 264,856 1 Total contested S - 39,548,944 665,711 1140,474 42,355,129 1 Assigned: Capital projects and upgrades S • - - 25,626)80 3249,119 28875,499 (11) Solid Waste Landfill Closure and Post Closure Care Costs State and federal laws and regulations require that the Kodiak Island Borough place a final cover on its landfill when closed and perform certain maintenance for a number of years after closure. In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are recognized based on the future closure and post closure care costs that will be incurred based on the datethe • landfill no longer accepts waste.The recognition of these landfill closure and post closure care costs is based on the amount of the landfill used during the year.The estimated liability of landfill closure and post closure care costs is $3,968,123 as of June 30, 2014, which is based on 93% usage (filled) of the landfill. i 64 Page 78 of 215 Review of the Comprehensive Annual Financial Report (CAFR). . AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued • The landfill is estimated to be filled and unusable by the year 2016. During the year ended June 30,2014, a reduction of$1,421,527 was recorded. This reduction was due to approximately 5 acres of the existing landfill being closed during the year. The Borough incurred$1,044,056 of expenses related to the closure of 5 acres, with the additional $377,471 reduction resulting from a change in the accounting estimate An estimated additional $491,566 will be recognized as closure and post closure care expenses between the date of the Statement o f Net Position and the date the landfill is expected to be filled to capacity. The estimated total current cost of the landfill closure and post closure care of$4,459,689 is based on the amount that would be paid if the landfill were closed as of June 30, 2014. However,the actual cost of closure and post closure care may be higher due to inflation.changes in technology,or changes in landfill laws and regulations. The Kodiak Island Borough is required by state and federal laws and regulations to make annual contributions to finance closure and post closure care. The Kodiak Island Borough complies with these requirements'by annually recording the liability based on the estimates provided by the Kodiak Island Borough's Engineering/Facilities Director. It is anticipated that.future inflation costs and additional costs that might arise from changes in post closure requirements,due to changes in technology or more rigorous environmental regulations, for example. will be financed primarily by charges to future landfill users and secondarily by taxpayers. In the fiscal year ended June 30, 1999 the Borough began initial planning for lateral expansion of the landfill (Phase 3). In May of 2012 bidding on the project was begun and work is ongoing and expected to continue through 2015. The lateral expansion has an estimated forty year capacity. Capital costs to complete is estimated at$10,000,000. (12) Insurance and Risk Retention The Kodiak Island Borough is exposed to numerous risks Of loss associated with the operations of a government These potential losses include, but are not limited to, employee relations and injuries, contracts,theft, loss or damage of property and general liability.The Borough manages its risks from these • potential losses by participating in the Alaska Municipal League Joint Insurance.Association, as well as - purchasing commercial insurance coverage. This insurance has provided the Borough with adequate coverage in the past. There were no significant changes in insurance coverage Obtained and there were no claims or settlements that exceeded insurance coverage in any of the past three fiscal years. The Borough is a member in good standing of the.Alaska Municipal League Joint Insurance Association (JIA),a governmental insurance pool established by the Alaska Municipal League.•Claims are covered on an occurrence basis.JIA provides risk management services,appraisal services and there is also a separate pool'for policy liability. The Kodiak Island Borough Finance Director and the Kodiak Island Borough Mayor are members of the Board of Directors of the JIA. • 65 Page 79 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued The responsibilities of both mA and the participants are as follows: (a) Responsibilities of JL4 RA shall perform the following"instructions hi discharging its responsibilities: • Provide insurance coverage as necessary for property, including building and contents, automobile; mobile equipment and data processing equipment, casualty, including general liability,public officials'and employees' liability,auto liability and employee benefit liability; workers' compensation, including employers' liability; conimercial blanket bond; and time element. • Assist each participant's assigned risk manager with the implementation of that function. • Provide loss prevention and safety and consulting services to participants as required. • Provide claims adjustingand subrogation services for claims covered by theassociation's joint insurance arrangement. (b) Responsibilities of the Participants The Participants shall have the following responsibilities:• • • The Borough Assembly or appointing official of each participant shall appoint a representative as provided in Article 5, Section 2 of the bylaws'and at least one alternate representative to attend member meetings. • Each participant shall appoint an employee of the participant to be responsible for the risk management function within that entity and to serve asa liaison between the participant and 11A with respect to risk,mariagernent. • Each participant shall maintain an active safety officer and/or committee, and shall comply With all recommendations of JIA concerning the development.and implementation of a IS control policy to prevent unsafe practices. • Each participant shall maintain its own set of records as a loss log, in all categories of loss to insure accuracy of RA's loss reporting system. (13) Rental Revenues • (a) Hospital Facilities Enterprise Fund The Kodiak Island Borough Assembly leases the Kodiak Island Hospital and Care Center premise and equipment to Sisters of Providence d.b.a. Providence Kodiak Island Medical Center who assumed responsibility for the hospital's operations as of April 21, 1997. The lease agreement is effective for a term of twenty years from that date.The lease is cancelable by either party with a one year notice.The hospital capital assets,the lease income,and all Other costs relating to the agreement are accounted'for by the Borough in the Hospital Facilities Enterprise Fund. • 66 • Page 80 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Bask Financial Statements,Continued The agreement with Providence specifies that the Borough will contribute at least$108,000 per year for the purchase of new and replacement equipment for the hospital.'The Borough is also required to fund.any major maintenance and repairs projects exceeding $25.000 in cost. The Borough receives $60,000 per month in rental revenue. In August,2003,.the lease •was amended and required Providence to pay an additional lease payment of$1,300,000 in 2004. In October 2005 the lease was amended to remove the requirement that Providence had to pay 50% of the net revenues of the hospital, up to$600,000, in rental revenues. Providence now has to spend 50%or more of their net profit, up to $200,000, on equipment. The lease was also amended to have the $108,000 of equipment which the Borough was required to purchase annually to become Providence property rather thin Borough property. (b) Kodiak Fisheries Research Center The Kodiak Fisheries Research Center (KFRC) leases its premise to the General Services • Administration (GSA), Alaska Department of Fish and Game (ADF&G), the GSA on behalf of Department of Commerce, National Oceanic and Atmospheric Administration (NOAA), and the University of Alaska Fairbanks(UAF). The lease with the GSA is from March I 2003,through-September 30, 2018, cancelable With 120 days notice.Annual rent Varies from$37,500 to$41,000. Rent was$41,000 in 2014. The lease with ADF&G is from October I. 1998 through September 30, 2018, with an opiion to extend for up to two additional five year periods.Annual rent is$52,800. The annual rent from 2012 through 2018 will be adjusted for the tenant's proportionate share of building expenses and utilization of the seawater system. The lease with NOAA is from Gabber 1, 1998 through September 30, 2018,,with an option to extend for up to four additional the year periods. Annual rent is $756,000 plus operational and maintenance expenses of 5754,437. Operational and maintenance expenses'are adjusted every five years to actual costs. The lease with 1.1. AF was originally from October I, 1998 through September 30, 2018, cancelable with 30 days notice,with an option to extend for up to two additional five year periods. The State of Alaska cancelled the lease for laboratory space effective September I, 2012, but has continued leasing the dorm space. The State has not given notice to cancel this section of the lease in 2014. (14) Retirement Commitments The Borough has adopted Goverdmental Accounting Standards Board (GASB) Codification P20, Accounting for Pensions by State and Local Governmental Employees and GASB Codification P50, Accounting and Financial Reporting by Employers for Post-employmenit Benefits,Other than Pensions. GASB,Codification P20 and Codification P50 establish uniform standards for the measurement, recognition and display of pension and other post employment benefits other than pensions (healthcare) expenditures/expense ,alid related liabilities, assets, note disclosure and applicable required supplementary information in the financial reports of state and local governmental employers. 67 Page 81 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,,Continued Retirement Plans. All full-time employees and certain permanent pan-time employees of the Borough participate in the State of Alaska Public Employees' Retirement System (PERS). In addition to the pension plan the system also adrninisters:a post-employment healthcare benefit plan. Summary of Significant Accounting Policies. 'PERS financial statements are prepared using the accrual basis of accounting . Plan member contributions are recognized in the period in which the contributions are due. The Borough's contributions ire recognized when due and a .formal commitment to provide the contributions has been made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. All plan investments are reported at fair market value or estimated fair market value. Termination Costs. If the Borough decides to terminate coverage for a department, group,mother classification of members,even if that termination results from the decision to divest of a particular governmental function, all affected employees in that department, group or other classification of members become immediately vested in the plan. The Borough Must pay to Have a termination study completed. rhe,purpose of the study is to calculate the Borough's one-time termination costs. The costs'represent the amount'necessary to fully fund the costs of plan members who become vested through this process and for other changes in actuarial assumptions, such as, earlier than expected retirement, that arise from the act of termination of coverage, Borough must pay a lump Sum within 60 days of termination or arrange a payment plan that is acceptable to the PERS Administrator. For fiscal year 2014 the past service rate is 24.19%. Plan Oversight. The Borough contributes to the Alaska Public Employees Retirement System (PERS), which includes both a cost sharing multiple employer defined benefit pension and post- employment healthcare and a defined contribution,plan. Both plans are administered by the Commissioner of Administration and the Alaska.Retirement Management Board (ARMS). Both PERS plans provides retirement benefits including disability and death benefits,and post-employment healthcare to plan members and beneficiaries: The authority to establish and amend benefit provisions is assigned to the ARMS. The Public Employee's Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for PERS. This report may be obtained from the system at Pouch C,Juneau,Alaska 99811. Alaska PubIieEmplôyee Retirement SystEm(PERS) Defined Benefit Plan Plan Desciiption and Funding Agreement.. Benefits vest with five years of credited service. Employees enrolled prior to July 1, 1986 with five or more years of credited service are entitled to • annual pension benefits beginning at normal retirement.age 55 or early retirement age 50. For employees enrolled after June 30, 1986, but before July I, 2006, the normal and early retirement ages are 60 and55,respectively. Employees with 30 or more:years of credited service may retire at any age and receive a normal.benef t. Retirement benefits are calculated by multiplying the average monthly compensation (AMC)times credited PERS'service times the percentage multiplier. The AMC-is determined by averaging the salaries earned during the five highest(three highest for Police/Fire members or members hired prior to July I, 1996)consecutive payroll years. Members must earn at least 115 days of credit in the last year worked to include it in the AMC calculation. The PERS pays a minimum benefit of$25 per month for each year of service when the calculated benefit is less. 68 Page 82 of 215 Review of the Comprehensive Annual Financial Report (CAFR). • AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued The percentage multipliers for police/fire personnel are 2%for the first ten years of service and 2.5% for all service over 10 years. The percentage multipliers for all other participants are 2%for the fuss ten years,2.25%for the next ten years.and 2.5% for all remaining service earned on or after July 1, 1986. All service before that date is calculated at 2%. Post-employment healthcare benefits are provided without cost toall members first enrolled before July I, 1986. Members first enrolled after June 30. 1986 and who have not reached age 60 may elect to pay for major medical benefits. Pension benefits are adjusted each year based upon increases in the Consumer Price Index(CPI)for the prior year. The increase in the benefits is 75% of the CPI increase up to a 9% maximum for recipients who are at least age 65 or on disability or 50%of the increase up to a 6% maximum for recipients who are at least age 60 but under age 65 or who have been receiving benefits for at least five years. Starting at age 65, or at any age for those employed before July I, 1986, a retired employee who remains in Alaska is eligible for an additional allowance equal to l0% of the base benefit or S50 a month,whichever is greater. Post Retireineru Pension Adjustments. .Post retirement pension adjustments (PRPAs) are panted annually to eligible benefit recipients when the consumer price index (CPI) increases during the • preceding calendar year. PRPAs are calculated by multiplying the recipient's base benefit•including past PRPAs.times: (a) 75% of the CM increase in;the preceding calendar year or 9%, whichever is less, if the , recipient is at least 65 or on PERS disability;or (b) 50% of the CPI increase in the,preceding calendar year or 6%, whichever is less, if the recipient is at least 60,or has been receiving benefits for at least five years. , Ad hoc PRPAs,up to a maximum of 4%,may be granted to eligible recipients who first entered the $ PERS before July 1, 1986,if the CPI increases and the financial condition of the fund Will permit an increase. In a year where an ad hoc PRPA is granted, eligible recipients will receive the higher of the two calculations. Funding Policy. The Borough PERS active members are required to contribute 6.75%(326%pension cost and 3.49%post-employment healthcare costs)of their annual covered salary and the Borough is required to contribute at an actuarial determined rate; the current rate is 35.68%. The legislature capped the employer rate at 22%(10.64%pension cost and 11.36%post-employment health care cost) with the State of Alaska contributing an on behalf payment for the difference between the actuarial_ required contribution and the cap. On behalf payments by the State of Alaska for the Borough's employees are recognized as revenues and expenditures/expenses during the year. The contribution • requirements of plan members and the Borough are established and may be amended by the ARMS. During the 25th legislation session, Senate Bill 125 passed, which established a June 30, 2008 salary floor under AS 39.35.255(ax2). The salary floor is the total base salaries paid by an employer to active .employees of the system as of the fiscal year ending June 30,2008. Thc statute requires the Division of Retirement and Benefits (Division) to collect employer contributions at a minimum based on FY 2008 base salaries. 69 Page 83 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH - Notes to Basic Financial Statements,Continued Annual Pension Cost and On-Behalf Payments. The Borough's annual pension cost for the years ended June 30, 2014, 2013, and 2012 were $515,789, $532,750 and $572,822, respectively, which was equal to the Borough's actual contributions. For the year elided June 30, 2014 the State of Alaska contributed $463,333 or 13.68% (7.74% pension cost arid 5.94% post-employment health care cost)on behalf of the Borough,which was recognized as revenue and expenditures. Alaska Public Employee Retirement System(PERS)—Defined Contribution Plan Plan Description andFunding Requirements. Boroughs and Public Employers in the State of A laska have a defined contribution retirement plan for new hires first on orafter'July 1,2006. Plan members Make mandatory contributions of 8%of gross eligible compensation. State statutes require the employer to contribute 5% of employees' eligible compensation. Additionally, employers are required to contribute 0.48% to the retiree medical plan, 0.20% for occupational and death and disability benefits and 3% of employers average annual employee compensation to the health reimbursement'arrangement (HRA). The employer effective contribution rate is 22%. Plan members are 100% vested with their contributions. Members become vested in employer's contributions as follows: 2 years of service-25% 3 years of service—50% 4 years of service—75% 5 years of service—100% Plan provisions and ,contribution requirements and amendments are established by the Alaska Retirement Management Board (ARMB). Total contributions for the year ended June30,2014 are as follows: • Employer Employee Defined contribution $ 184,399 67,039 Retiree medical plan 4,022 - Occupational death and disability benefits 1,676 - Health reimbursement agreement(HRA) 26,438 - Defined benefit unfunded liability(DBUL) I I0,327 - Actual contributions were equal to the annual required contributions. Deferred Compensation Plan The Kodiak Island Borough has two deferred compensation plans created and amended in accordance with Internal Revenue Code Section 457. The plans are available to all regular Borough employees. The'deferied compensation is not available to employees until termination, retirement, death,or unforeseeable emergency. All amounts deferred under these plans are held in trusts that were established'for the exclusive benefit of plan participants. Amounts contributed to the plans by participants during the year ended June 30,2014,was$174,560. 70 Page 84 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued The first plan is managed by the International Borough Managers Association Retirement Corporation. $73,675 was contributed to this plan during the year ended June 30, 2014. The Borough believes that the plan does not meet the criteria for inclusion as a fiduciary fund. The second plan is managed by the MassMutual Financial Group. $100,885 was contributed to this plan during the year ended June 30, 2014. The Boroueh believes that the,plan does'not meet the criteria for inclusion as a fiduciary fund. (15) Contingencies • (a) Genera! • The Boroueh, in the normal course of its activities, is involved in various claims and pending litigation. After consultation with legal counsel. management estimates that these matters will be resolved without material adverse effect on the Borough's future financial position or results of operations. ,(b) Grants • i Amounts received or receivable from grantor agencies are subject to audit and adjustment by the grantor agencies. Any disallowed claims. including amounts already collected, would become a liability of the General or other applicable funds. In management's opinion, disallowances, if any, will not be material. (16) Subsequent Events Management have evaluated subsequent events through December 31, 2014, the date which the. financial statements were available for issue. 1 (17) Construction Commitments The Borough has outstanding commitments for construction a,year end of$46,195,669. (IS) .Subsequent Accounting Pronouncements The Governmental Accounting Standards Board has passed several new accounting standards with upcoming implementation dates covering several topics as follows: • GASB 67—.Financial Reporting for Pension Plans—an Amendment of GASB Statements No. 10 and No. 62. Effective for periods beginning after June 15, 2014. • GASB 68—Accounting and Reporting for Pensions—an Amendment of GASB • Statement A'o.27. Effective for fiscal years beginning after June 15,2014. • GASB 69—Government Combinations and Disposals of Government Operations. Effective for fiscal years beginning after December 15,2014. • GASB 70—Accounting and Financial Reporting for Nonexchange Financial Guarantees. Effective for fiscal years beginning after June 15, 2014. 71 Page 85 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements,Continued • GASB 71 —Pension Transition for Contributions Made Subsequent to the Measurement Date—An Amendment of GASB Statement No. 68. Effective for fiscal years beginning after June 15, 2014. Statements 67 arid 69-71 are not expected to have any niaterial impact on the financial statements of the District. GASB Statement No. 68's objective is to improve accounting and reporting for pensions. This Statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. This Statement establishes methods and assumptions used to project benefit payments to their actuarial present value and attribute that present value to the periods of employee services. Note disclosures and required supplementary information are addressed in this Statement. This Statement is effective for fiscal years beginning after June 15,2014. 72 Page 86 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. l , (This page was left blank intentionally) Page 87 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. • REQUIRED SUPPLEMENTARY INFORMATION J _l Page 88 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. I 1 KODIAK ISLAND BOROUGH I Budgetary Comparison Schedule General Fund Year ended June 30,2014 (With financial information for the year ended lune 30.2013) 1 2014 Variance with Furl Budget= i Budget Positive 2013 1 Original Final Actual (Negative) Actual Revenues: Prupcsry taxes and assessments: • Real S 29,900 29,900 34.167 4,267 33,406 ' Personal 3,300 3,300 - (3,300) - Boat 22,000 22,000 24.350 2350 21,545 Aircraft 5,500 5,500 21,400 15.900 4,900 Penalty and interest 200.000 200,000 128.058 (71.942) 201.420 Total property taxes and assessments 260,700 260,700 207,975 (52,73) 261,271 I _ Severance lass Fish 1,750,000 1,750,000 1,715,4% (34,504) 1,654,149 Mining 10,000 10,000 32,309 22309 9,432 Lagging 100,1100 100.000 96,014 (3.986) 111.119 Total severance taxes 1,860.000 1.860.000 1.843.819 (16,181) .1,774,700 lutergmemmental: State sources: State revenue sharing 707,639 707,639 731314 23,675 1.042,431 Fisheries business tax 1,650,000 1,650,000 1.546,308 (103,692) 1,647,025 Fisheries reaovne landing tax 100,000 100.000 97,679 (2,321) .110,532 Commercial passenger vessel tax 25,000 25,000 4,600 (20,400) 23,473 I Telephone and electric tax 26.000 26,000 15,792 (10208) 27,075 On-behalf PERS payment 250,000 425,790 463333 3 7,54 3 329,105 Liquor license - - 220 220 - I Totnlslate sou saes 2.758.639 2,934,429 2,839,246 (75.183) 3,179,641 Federal sources: Payments in lieu of tales 1,226,000 1,226,000 1,541,152 315,152 1,431,452 Fish and Wildlife revenue sharing 150,000 150,000 205,518 53,518 173,848 Schools and Reeds:Grants to Stares 2.400 2.400 (2,400) 2.367 Total federal sources 1378.400 1378,400 1,746,670 368270 1.607,667 I Total intergovernmental menoe 4,137,039 4,312,829 4.605,916 293.087 4,787.308 Charges for senses- Sale of copies and maps 5,000 5.000 3,136 (1,864) 6.139 Licenses,permits and fee _ __ - - • s: Building and nailer permits 40.000 40,000 59,661 19,661 37,243 • Subdivision and zoning fees 18,500 18,500 16.183 (2,317) 24,540 Other permits 8.000 8,000 6,869 (1,131) 4.693 Total liwsses,permits and far 66.500 66300 82,713 16,213 66,476 Imestotat income 100,000 100,000 23,804 (76,196) 39,078 Other 14.000 14,000 11,192 (2.808) 15,030 Total revenues 6,443239 6.619,029 6,778,555 159,526 6,950.002 (continued) 73 1 Page 89 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH 1 Budgetary Comparison Schedule General Fund.continued Year ended June 30,2014 (With financial inl'nmtation for the year ended June 30,2013) ' 2014 . Variance with , Actual Amounts •Final lsudget- i •Ru'get 'Budgetary Basis .Positive 2113 Original Final "(See Note A) :(Negative) Actual Expenditures: General government: General and administration S 249,100 249,100 180,937 '.68,163 467,361 Borough assembly 186,850 183,350 - 183,790 (440) 168,967 Borough manager 605.768 605,768 545.107 60,661 386,191 1 Borough clerk '563,365 568,485 525.436 43,049 546,655 Borough attorney _ 149,000 149,000 136,859 12,141 146,241 • Filature department 897,962 942.872 921,132 21,740 887,515 � Management information systems 1,065,775 1.076.605 1,013,958 62.647 878,694 Assessing department 670,312 687,462 680.158 7,304 605.500 Engineering/facilities department 276.663 313.293 307,917 5.376 314,693 Total general government • 4,659,795 4,775,935' 4,495,294 . - 280,641 4,4111817 i Public safety-animal control 85.000 85.000 72,941 12,059 28,000 Community and economic development: 1 Conununity development department 747,218 806,868 666,289 140,579 721,760 Building official 151,484 151,484 153,,324 (1.840) 126,941 Economic development 73,600 '73,600 58,862 _ 14,738 73,730 t • Total eo mimnity and economic ' development• 972.302 1,031.952 878.475 . 153,477 922.431 ' Emergency preparedss 52,000 52,000 9.987 42,013 18.342 t ne !leak,'and sanitation department 316,000 316.001) 326,700 (10,700) 290.800 1 liducation,culture,and recreation 90,000 90,000 95,625 (5,625) 84,273 Parks and recreation 45,000 195,000 37,795 157,205 21,100 Kodiak College and city libraries - 195.000 195,000 195.000 - 192.000. • Total expenditures 6,415,097_ .6.740.887 6.111.817 _ .629,070 5,958,763 I ?mess 61 revenue$ I 1 Over expenditures 28,142 (121,858) 666,738 788,596 991,239 Other financing(uses): Proceeds from sale of capital assets 5,(100 5,000 - (5,000) 9,564 1 Transfos in - - - - 29,335 9'ransfers out (483,500) (483.500) .(483,500) - (911,559) 1 Net other financing sources(uses) (478,500) ;(478,500) (483,500) (5,000) {872,660). Change in fund balance 5 (450,358) (600,358) 183,238 783,596. 118,579 i Fund balance,at beginning of year 3,348,732 3,230,153 1 Fund balance,at end of the year S 3,531 970 3.348,'7 2 • 1 Now A: This schedule does not include expenditures of 526,276 and a beginning fund(deficit)01(51,746)on a multi year , commamy development project. These costs are accumulated in the Community Development Fund which is combined with the General Fund for the Basic Financial Statements. 1 Note 13: See accompanying notes to requited supplementary information. 74 Page 90 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. i KODIAK ISLAND BOROUGH Budgetary Comparison Schedule • Special Revenue Fund–Education Support Year ended June 30,2014 (With financial information for the year ended June 30,2013) 2014 Variance with Final Bodget– Budget Positive 2013 Original Final - Actual (Negative) Actual Revenues: • Piop..ty taxes and assessments: Real S 9,114,580 9,114,580 '9,003,276 (111,301) 8,846,747 Personal 925.140 925,140 879,491 (45,649) 939,619 Intergovernmental-state sources Motor vehicle tax 280,000 280.000 253230 (26.770) 259,252 Total revenues 10,319.720 10,319,720 10,135,997 (183,723) 10.045.618 Expenditures: Primary and secondary education 10.619,720 10,649,720 . 10,650,220 (500) 10,250.350 Excess(deficiency)of revenues over(under)expenditures (330,000) (330.000) (514,223) (184,223) 204.732) - . Other financing sources: I Transfers in 330,000 330,000 330.000 — 428,550 Change in fund balance S (184,223) (184,223) 223.818 Fund balance(deficit),at beguming of year 152349 _ (71269). Fund balance(deficit),at end of year $ _ (31,674) 152,549 See accompanying notes to required supplementary information. 75 Page 91 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Budgetary Comparison Schedule Special Revenue Fund_Facilities Year ended June 30.2014 (With financial information for the year ended June 30.2013) 2014 Variative with Final Budget— Budget Positive 2013 Original. Final Actual (Negative) Actual Revenues Investment income $ 1.000.000 '1.000.000 655.470 (344,530) ' .546,829. Expenditures 200,000 200,000 — 200,000 Excess of revenues over expenditures 800.000 800.000 655.470 (144.530) 546.829 Other financing sources(uses): i Transfers out (800.000) (800.000) (522.365) 277,635 (996.696) Change in fund balance $ — — 133,105 133,105 (449.867) Fund balance,at beginning ofyear 39,415,839 39.865,706 Fund balance,at end of year $ 39.548 944 39,4 5,839 1 1 ; See accompanying notes to required supplementary information. i 76 Page 92 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLA7rD BOROUGH Notes to Required Supplementary Information—Budgetary Comparison Schedules June 30,2014 The Borough follows these procedures in establishing the budgetary data reflected in the fund financial statements: • The Borough Manager must submit to the Borough Assembly by April 30 a proposed operating budget for the fiscal year commencing the following July I.The operating budget includes proposed expenditures and the means of financing them. • Public hearings are conducted by the Borough Assembly to obtain citizen comments. • By June 10,the budget is legally enacted through passage of an ordinance by Borough Assembly action.If the Borough Assembly fails to pass an ordinance,the budget submitted by the Borough Manager becomes the adopted budget. • Amendments to the budget can occur anytime during the fiscal year through the Borough Assembly or administrative action.Generally,the following actions are required at the level of the particular change: — All new appropriations are authorized by an appropriation ordinance that amends the annual budget ordinance. — A resolution of the Borough Assembly is required to move (appropriate) amounts between departments and projects. — The administration is authorized and directed by the Borough Assembly to effect the necessary line item changes within the limits established by Items (I)and (2) above by project or department to property monitor,account,and report receipts and expenditures. • Expenditures may not legally exceed appropriations at the following levels: Capital Projects Funds — project level,all other funds-department level. • All funds, except Capital Projects Funds, are budgeted on an annual basis encompassing a fiscal year. Budgets of Capital Projects Funds generally encompass the period from start-up to project completion, which is generally greater than one year. • Appropriations lapse at year end to the extent that they have not been expended for all funds, except Capital Projects Funds,which lapse at project completion. • Budgets adopted by the Borough Assembly are in accordance with accounting principles generally accepted in the United States of America. • The Borough published a separate 2014 budget document. That document may be obtained from the Kodiak Island Borough,Finance Director,710 Mill Bay Road,Kodiak, Alaska 99615. 77 Page 93 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM,#2.A. • r t (This page was left blank intentionally) I f Page 94 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • ADDITIONAL SUPPLEMENTARY INFORMATION . .l 1 Page 95 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. 1 KODIAK ISLAND BOROUGH Budgetary Comparison'Schedulc Debt Service Fund-Education and Health Year ended June 30,2014 (With sumtn'arizcd financial information for the year ended June 30,2013) ;2014 Variance with Original Final Budget— and Final Positive 2013 Budget Actual (Negative) Actual Revenues: Property taxes and assessments $ 2.045,300 2,043,895 (1,405) 1,744,906 Intergovernmental: Stitessources 2,741,744 3,347,517 605,773 2.267,279 Investment income 15,200 3,182 (12,018) 2,221 Total revenues 4,802,244 5,394,594. .592,350 4,014,406 Expenditures: • General government 5.744 6,045 (301) 5,471 Debt service: Principal 3,645,950 3,645,950 — 2,966,441 Interest 2,098,499 2,107,198 (8,699). 1,244,233 Debt issuance — 89,835 (89,835) 20,809 Total expenditures 5,750,193 5,849,028 (98,835) 4,236,954 Excess(deficiency)of revenues over(under)expenditures (947,949) (454,434) 493,515 (222;548) Other financing sources: 1 Transfers in 650,000 482,402 (167,598) 1,057,858 Change in fund balance $ (297,949) 27,968 325,917 835,310 Fund balance(deficit),at beginning of year 637,743 .(197,567) . Fund balance,at end of year $ 665,711. 637,743 78' I Page 96 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • 1 (This page was left blank intentionally) • • • . i I { ' i Page 97 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. ti NONMAJOR GOVERNMENTAL FUNDS Special Revenue See Special Revenue section of this report. Capital Projects See Capital Projects section of this report. • J j Page 98 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. NONMAJOR SPECIAL REVENUE FUNDS t The Fire Protection Area No. I Fund accounts for the activities related to fire suppression and fire prevention services to the citizens of the service area. The Womens Bay Fire Department Fund accounts for the activities related to fire suppression and fire prevention services to the citizens of the service area. The Kodiak Airport Fire District Fund accounts for the activities related to fire suppression and fire prevention services to the citizens of the service area. The Monashka"Bay Road Service Area Fund accounts for the activities related to road services within the service area. The Service Area No. I Fund accounts for the activities related to maintenance service to roads within the district,including snow removal,ditching and grading. The Womens Bay Road Service Area Fund accounts for the activities related to maintenance service to roads within the service area,including snow and ice removal,ditching and culvert work. The Bay View Road Service Area Fund accounts for the activities related to road services within the service area. The Service Area No.2 Fund accounts for the activities related to water and sewer services in the service area. This fund is in the design stage at present. The Local Emergency Planning Committee(L.E.P.C.) Fund accounts for State of Alaska grants provided for regional emergency preparation,response,and mitigation planning. The Land Sales Fund accounts for the disposal of Borough-owned lands. The proceeds of land disposals are generally used for the management of Borough lands and the repairs and maintenance of Borough school buildings. The Buildings and Grounds Fund accounts for the operations and maintenance of certain buildings and grounds owned by the Borough which are jointly shared with•the City of Kodiak, the Kodiak Island Borough School District,and certain nonprofit community organizations. The Woodland Acres Street Light Service Area Fund accounts for activities related to the provision of street lighting within the service area. The Trinity Islands Street Light Service Area Fund accounts for activities related to the provision of street ( lighting within the service area. The Tourism Development Fund accounts for the collection of the Borough Transient Accommodation Tax (Bed Tax)and its subsequent transfer to the Kodiak Island Convention and Visitor Bureau. The Mission Lake Tide Gate Fund accounts for activities related to maintaining the tide gate for the residents of the service area. The Fern Fuller Trust Fund accounts for the distribution of funds to the beneficiaries of the trust. The Trinity Islands Paving Fund accounts for activities related to the provision of paving within the service area. The Oil Spill Disaster Fund accounts for activities related to the grounding of the drilling vessel Ku/luk. • .I Page 99 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. i 1 KODIAK ISLAND BOROUGH Combining Balance Sheet Nomnajor Governmental Funds June 30,2014 (With summarized financial information at June 30,2013) Special Capital • Revenue Project Totals Assets Funds Funds - 2014 2013 Equity in central treasury S 2,666,213 3,320,161 5,986,374 6,044,853 Receivables: State of Alaska 6,778 15,367 22,145 97,514 Federal government 153,995 153,995 18,329 Property taxes 17;776 - 17,776 16,662 ILand sales contracts,due within one year 35,465 - 35,465 3,649 Other 29,898 7,619 37,517 34,483 Prepaid items - - - 316 Land sale contracts,due after one year 513,765 - 513,765 . 5,465 Total S 3,269,895 3,497,142 6,767,037 6,221,271 Liabilities,Deferred Inflows of Resources, 1 and Fund Balances t Liabilities: Accounts payable S 97;305 149,672 246,977 487,417 • Customerdeposits 1,100 - 1;100 1,250 Due to other funds 60.242 - 60,242 1,872,818 Advances from other funds - - 25,077 Unearned revenues 36,464 .98.351 134,815 125,844 Total liabilities 195,111 248,023 443,134 2,512,406 Deferred inflows of resources: Unavailable revenues 513,765 - 513.765 5,465 I Total liabilities and deferred inflows of resources 708,876 248,023 956,899 2,517,871 Fund balances: ,Nonspendable 513,765 - 513,765 5,781 Committed 2,140,474 - 2,140,474 2,272,684 Assigned 3,249,119 3,249,119 1,476,272 Unassigned (93,220) - (93,220) (51337)_ Total fund balances 2,561,019 3,249,119 5,810,138 3,703,400 Total S 3,269,895 3,497,142 6,767.037 6,221,271 1 79 R Page 100 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. (This page was left blank intentionally) { Page 101 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Combining Statement of Revenues,Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Year ended June 30,2014 (With summarized financial infomration for year endcd'Junc 30,2013) I Special Capital Revenue Project Totals Funds Funds 2014 2013 Revenues: Property taxes and assessments S 1,341,544 - 1,341,544 1,144,253 Transient accommodations tax 75.142 - 75,142 96,640 Intergovernmental: State sources 13,430 47,486 60,916 1,433,134 Federal sources - 187,002 187,002 51,705 Charges forser`viees 586,300 - 586,300 556,060 ' Licenses,permits and fees 29,850 - 29,850 28,350 Investment income 19,579 27,596 47,175 77,884 Other 39,364 - 39,364 37,486 Total revenues 2,105,209 262,084. 2,367,293 . 3,425,512 Expenditures: Current: General government 857,417 - 857,417 899,911 Public safety 503,779 - 503,779 441,280 Community and economic development 84,126 - 84,126 84,910 Service district maintenance 631,572 - 631,572 479,264 Capital outlay: Schools - 122,388 122,388 613,235 General - 234,858 234,858 2,041,674 Debt service-interest 2,208 - 2,208 9,992 Total expenditures 2,079,102 357,246 2,436,348 4,570,266 Excess(deficiency)of revenues over(under)expenditures 26,107 (95,162) (69,055) .(1,144,754) Other financing sources(uses): Land sales proceeds 356,284 - 356.284 6,787 Transfers in 18,000 - 18,000 435,947 Transfers out (66,500) - (66,500) (4,384,630). Net other financing sources(uses) 307,784 - 307,784 (3,941,896) Change in fund balances 333,891 (95,162) 238,729 (5,086,650) Fund balances,at beginning of year 2,227,128 3,344,281 5,571,409 8,790,050 Fund balances,at end of year S 2,561,019 3,249,119 5,810,138 3,703,400 80 Page 102 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Noomjoa Special Rest-nor Finals Combining Balance 511001 Ice 30.2014 (With summarized financial information at June 30.2013) Fire and Road Senke Arens Fire Road lire Women, Kodiak Montilla Protection Bas Fire Airport F'Ire Ras Road Son ice • Aneb Aria 26.1 Department District Senor Ares Area Not Equity in ccnual ccasnry S 301357 501423 35.759 4,472 380,658 Receivables: Starr()PAWL, — — — PIopcDr mm 9.701 245 — 641 5.877 Land sales commas.due.ithm we 3Tar — — — — — Ogler _ _ _ _ — Prepaid items — — — — — Doe mfromcocw fads — — — — — Idsakcanu.due after one yeas — — _ — _ Total 5 311.052 507.708 35,759 3.113 386,535 Liabilities,Deferred Inflows of Resources. mad Fob Balaacn(Deficits) Liabilities' Accounts payable 19.439 764 — 1,574 37,947 Comma dcpmiu — 1.100 — — .- Doe l0 orb=fads Adsame frontal=(mNs Lhvand mans Total liabilities 19,439 1.861 — 1.574 37.947 • Defa inflows of esoc 'od _ Omvnilable moons Total liabilities and defined inflows of ramps 19.439 1.861 — 1.574 37.947 Fund balsam(defuus Nonspentbk — — — — — Com®ned 291.619 505.844 35.759 3.539 348,588 2lnaasi W — — — — — Total fond baIa. ldrficvsl 291.619 505.14.1 35.759 3.539 341.581 Total S 311.051 507.718 35.759 5.113 386.535 II Page 103 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. Fire and Road Senior Area) _ Siam Gnat Road Pro Women Bay Road Bay Wien Road Service tro Senice Area Scn ire Arca No.2 I.EP•C. . Land Salm 144,131 5,955 5,795 — ' 454.439 — — — 6773 — 570 702 - — — — — 35.465 — — — — 9.164 — — — — 513,765 144.751 6.657 5,793 6.778 1012,833 5.385 227 — — 1,627 — — — 24,599 — — — — — 36.464 ' 5,335 227 — 44,599 38,151 — — — — 513.765 5.385 227 — 24,599 551,916 — — — — 513,765 139,366 6,430 5.793 — — — — — (17.821) (52.848) 139.366 6.430 5,795 117,821) 460,917 144.751 6.657 5,795 6,778 1,012.833 (wminucd) 1 • • 82 Page 104 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonnuja Special Revenue Finds Coabieiog Bas'+ee Shat(cocdnW) lux 30,2014 (With severed fmmeial information at lux 30.2013) . Street lighting Districts W'eodlaaI Buildings Acres Street Trinity Wanda and light Servwe 'Street light Tourism Amu Cosnads Ara Semite Area Development Enmity iv cwal o-casuy S 338,018 22.389 22255 127.947 Receivables: State of Alaska — — — — Land anpaty taxes — _ _ _ d saki contracts.due yvr — — — — Other — — — 20.734 Prepaid bona — _ _ _ Doe form oba fends — — — — Land sak nonparty.due after one pat . — — — TWI S 338.013 2_2.589 .22255 148.681 . Inabilities Raoul-ea, Inflow of Rna, J and Fund Balances(Deficits) Liabihties: Accounts payable 14.737 398 148 14,999 Custom"ekp nits — — — — De to other fonds — — — — Adana from other finds — — — — Urcasoedecnnxs — — — — Toul liabilities 14.737 -398 148 14.999 Defend in low,of manta. lloasalable re.ewes — — — — Toul liabilities And defined ianws of patentees 14.737 398 _149 14.999 Fund balances(deficits): Norapendable Conr,ned 313.211 22.191 22.107 133,682 Unassigned . — — — — Toul find baaaes(deficits) 323.281 22.191 22.107 133.692 Total S 338.018 22.589 22255 141.611 83 • Page 105 of 215 Review of the Comprehensive Annual Financial Report (CAFR). • AGENDA ITEM #2.A. t Mission Lone Fern Fuller Trinity Islands Oil Spill Totals Tide Gate Trust Paring Dinner .2011 2013 37,417 264.856 13,092 - 2,666,213 2,646,895 - - - - 6.778 4,259 - - - - 17,776 15,612 - - - - 35.465 3,649 - - - - 29,898 26.863 - - - - - 316 - - - - 513,765 5,465 37,417 a 13,092 3269.895 2,203.059. - - - - 97,305 380,927 - - - 1,100 1,250 - - 25,077 10,566 60242 58,563 - - - - - 25,077 i - . - - - .36,464 4,649 25.027 10,566 195,111 470,466 • - - - - 513,765 5,465 - 25,077 10,566 708,876 475,931 - - - - 513,765 5,781 37,417 264856 - - 2,140,474 2,272,684 - - (11,985) (10,566) (93,220) (51,337) 37,417 264,856 (11,985)i (10,566) 2,561019 2,227.128 • 37,417 264256 13.092 - 3,269,895 . 2,703,059 t • 84 Page 106 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • KODLSA ISLSND BOROUGH Noomajor Special Renor Foals Combining Sta went of Revenues,Expenditures, and Changes in Fund Balances(Deficits) Year ended lu a 30,2014 (With sta=trized financial information for tit liar ended lur 30,2013) Fire and Read Service Areas Fire Road Fire \Y omens Aodial \loaasbla Protection Bay Fire Airport Fire Bay Road Area NaI Department District Semite Aris Rrie ucs: Property taxes end assesama ua 5 552353 95537 13,602 61.032 Traaicn accommodations tax — — — — Imergmamaental: State sources —. — — Charges for smica — 14.316 — — I-tsemes,permits and fm — — In esmrm income 3,470 4,478 362 145 Other _ 25,543_ 13,200 — — Total menus 531366 127.551 13.964 61.171 Expenditures-. Current: •G.,...d government — Public iafery 408.472 65.459 14,359 — Community and ernaonic trietn rru — — —Health and sanitation depaunera — — — Sen'xe district=interims — — — 55,297 Debt smia-interest — — — Total expenditures 409,,472_ 66.459 14359 55293 • Excess(deficiency)of en erases aver(under)capadiures 172,594 61.092 13951 5,334 Other financing surca WIC). Land sale proceeds — — — — Traafers in — — — — Tmmfcn out — — — Na other financirg sauces(ors) — • — Change in fund batmen 172,894 61,092 (395) 5,834 Fund balances(delitsl,a bcguming of Year 118,725 441.752 36.154 - (23451 Fund Sines(deficits),at end of)car $ 291.619 505.844 35.759 3.539 85 • Page 107 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. Fire and Road Service Areas State Grant Road Program 33omens Service Ray Road Ray"int Road Service Area No.l Service Area Service Area A rea No.2 I..Fl.F.C. 388,416 183,730 13,622 — — — — — — 13,430 27,600 — — — 4,774 1,530 78 52 — 393,190 212,860. 13,700 52 13.430 — — — — 14,489 425,158 145,293 5,566 — — 425,158 145,293 5,566 — 14,489 • (31.968) 67,567 _ 8,134 52 (1.059) (31,968) 67,567 8,134 52 (1,059) i 380,556 71.799 (1,704) 5,743 (16,762) 348,588 139,366 6,430 5,795 (17,821) (continued) 86 I Page 108 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonnaja Special Reserve Fords Combining Statement of Revenues,Expenditures, and(Thanes in Fund Balinces(Deficits).(continued) Ter ended Jac 30.2014 (With summarized financial information for the year ended June 30,2013) Street Lighting Districts Woodland Acres • 7rioily Island, Buildings and Steen Light Street L@ht land Sales Granath Sen ice Area Senn Area . Reiman: PoyesIy taxes and assessor= 3 — — 12,067 5,753 Transient attanmodnions to — — — — LT.ergovem enal: — Stre sources — — — — Chvges Inc services 34,765 537,199 - — Licecnes,permits and fees 2,250 — — loesmncen income (2,647) 2.937 203 200 Otter 140 431 — — Total avenues 34.503 540.617 12275 5.953 Expenditures', Caret: General government 340,477 510,303 4,834 1,800 HAlic safety — — — Community and economic desekwnent Hahh end sanitation depamncm Service districtmsmmvrce — — — Behtservice.icemen — — — Ioal«pendaures 340477 510306 .4,834 1000 Excess(deficiency)of revenues oset(uder)erpndinres (305.969) 30.311 7.441 .4,153 Other fmacing seam(uses): Lard sales procmts 356,234 — — Tamfens in — 19.000 — — Transfers at: _ _ — — — — Net ether financing smarm(uses) 356.284 13.000 — — Change in fund balances 50,315 48,311 7,441 4,157 Fad balances(deficits),as begirming of year _ 410.602 274,970 14,750 17,953 Fad balances(defxits).atesd of yea 3 460,917 323281 22,191 2_',107 87 Page 109 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. Tourism .Mission Lake Fern Fuller Trinity Islands Oil Spill .Totals Development Tide Gate Trust. Paving Disaster 2014 2013 - 5,448 - 9,984 . - 1,341341 1,057,551 75,142 - - - - 75,142 96,640 - - - - - 13,430 62,026 - - - - - 586,300 556,060 - - - - 29,850 28,350 1,150 333 2,293 216 - 19,579 16,090 - - - - 39,364 37,486 76,292 5,781 2,293 10,200 - 2,105,209 1,854,203 - - - - - 857,417 899,911 - - - - - 503,779 441,280 84,126 - - - - 84,126 84,910 - 245 - 17 - 631,572 479,264 ' - - _ 2.208 - 2,208 . 9.992 84,126 245 . - .2,225 - 2,079,102 1,915,357 (7,834) 5,536 2,293 7,975 - 26,107. (61,154) - - - - - 356,284 6,787 - - - - - 18,000 45,600 - - (66,500). - . - - (66,500) (123,435) - - (66,500) - 307,784 (71,048) 17,834) 5,536 (64,207) 7,975 - 333,891 1132,202) 141,516 31,881 329,063 (19,960) (10,566) 2227.128 '2 359,330 .133,682 37.417 264.856 S (10,566) 2,561.019 - 3227,128 88 • Page 110 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAM)BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas—Fire Protection Area No. I Schedule of Revenues,Expenditures, and Changes in Fund Balance(Deficit) Budget and Actual Year ended lune 30.2014 (With financial information for the year ended June 30.2013) 2014 Variance with Final Budget Final Positive 2013 Badger Actual (Negative) _ Actual Revenues: Propene taxes and assessments S 533,000 552,353 19.353 531,840 Intergovernmental- State sources-PERS on behalf payment 5.900 — (5.900) 13,101 Investment income 1.440 3,470 2.030 (476) Other 8.700 25,543 16,843 23.838 Total revenues 549.040 581.366 32.326 568303 • Expenditures: • Public safety: Personnel 99.440 108,982 (9,542) 94,832 'Volunteers - 20,000 13,545 6,455 . 17,310 Fringe benefits 54,750 71,691 (16,941) 60.507 Professional services 1.000 75 925 — Support goods and services 223,850 173,665 50,185 158,457 Capital outlay 150.000 40,514 109,486 6,943 Debt service- Interest — — — 6,750 Total expenditures 549.040 408.472 140.568 344.799 Excess of rmenues over expenditures S — 172,894 172,894 223.504 Fund balance(deficit),at beginning of year 118,725 .(104,779) Fund balance,at end of year S 291,619 118.725 89 Page 111 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas—Womens Bay Fire Department Schedule of Revenues,Expenditures, and Changes in Fund Balance Budget and Actual Year ended lune 30,2014 (With f nahcial information for the year ended June 30,2013) 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Revenues: Property taxes and assessments S 92,000 95,537 3,537 94,271 Charges for services 13,000 14.336 1,336 13,849 Investment income 2,000 4,478 2,478 2.522 Other 12.000 13,200 1,200 13,200 Total revenues 119,000 127.551 8.551 123,842 Expenditures: • Public safety: Personnel services 1,000 — 1,000 — Fringe benefits 500 — 500 — Support goods and services 94.500 - 38,806 55.694 48,939 Capital outlay 23.000 27,653 (4,653) 24,820 Total expenditures 119,000 66,459 52.541 73,759 Excess of revenues over expenditures $ — 61,092 61,092 50.083 Fund balance,at beginning of year 444,752 394,669 Fund balance,at end of year $ 505,844 444,752 • 90 Page 112 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. i KODIAK ISLAND BOROUGH 1 Nonmajor Special Revenue Funds 1 fire end Road Service Areas–Kodiak Airport Fire District I Schedule of Revenues,Expndinrtes, and Changes in Fund Balance Budget and Moat - Year ended June 30,2014 (With financial information for the year ended lune 30,2013) h 1 2014 - l Variance with Final Budget Foal Positive 2013 . Budget Actual (Negative) . Actuil Revenues: Pu y,.ty taxes and esiessmars S 13,800 13,602 (198) 13,743 1 Investment income 500 362 (138) 279 Total revenues 14,300 13,964 (336) 14,022 Expenditures: Public safety: Support goods mad services 14,300 14,359 (59) 13,883 I Excess(deficiency)of revenues over(under)expenditures —es S (395) .1395) 139 Fund balance,at beginning of year 36,154 36,015 1 Fund balance,at end of yrs S . 35,759 36,154 I I 91 Page 113 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAM)BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas–Monashka Bay Road Service Area Schedule of Revenues,Expenditures, and Changes in Fund Balance(Deficit) Budget and Actual Year ended June 30,2014 (With financial information for the year ended June 30,2013) 2014 - Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Revalues: Property taxes and assessments $ 60,850 61,032 182 59,904 Investment income — 145 145 .481 Total revenues 60,850 61,177 327 60,385 Expenditures: Service district maintenmtce: Personnel services 500 1,091 (591) 249 Fringe benefits — 589 (589) 204 Support goods and services 4,350 443 3,907 2,237 Snow removal/sanding 26,000 9,713 16,287 41,964 Road grading/ditching 5,000 11,131 (6,131) 42,856 Repairs and maintenance 25,000 32,326 (7,326) — Total expendit es 60,850 55,293 5,557 87,510 Excess(deficiency)of revenues ova(under)expenditures 8 . — 5,884 5 884 (27,125) Fund balance(deficit),at beginning of year (2,345) 24,780 Fund balance(deficit),et end of year $ 3,539 (2,345) 92 Page 114 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. Is • KODIAK ISLAND BOROUGH • Noomajor Special Revenue Funds Tire and Road Service Areas-Service Area No.1 Schedule of Revenues,Expenditures, and Changes in Fund Balance Budget and Aaval Year ended hue 30,2014 (With financial information fm the year ended lune 30,2013) ) 2014 N'arience with Final Budget Final Positive 2013 ,Budget Acttul . (Negative) Actual Revenues: Paopcny taxes and assessman s S 490,500 388,416 (102,084) 123,944 lovesunart inane - . 4.774 4,774 4,035 Total revenues 490,500 393,190 (97,310) 127,979 Expcndinues: Service district maimcnance: Peaionnel services 8,800 6,038 2,762 7,939 Fringe benefits 2,900 1,464 1,436 3,404 1 • Support goods and services 2,100 1,732 368 4,195 ' Snow rariovalsanding 200,000 73,000 127,000 98,548 Road gredinPJditching 101,700 35,358 66,362 49,689 Repairs and Maintenance .575,000 307,566 . 267,434 71,189.. Total expcnditues 890,500 •425,158 465,342 234,964 Excess(deficiency)of revenues OW/(under)expeditmea S (400,000 (31,968) 368,032 (106,985) Fund balance,at beginning of year 380,556 487.541 Fund balance,at end of year S_ram_ 93 Page 115 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas—Womens Bay Road Service Area Schedule of Revenues.Expenditurei,and Changes in Fund Balance(Deficit) Budget and Actual Year ended June 30,2014 (With financial information for the year ended June 30,2013) 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual_ Revenues: Property taxes and assessments S 180,000 183.730 3,730 181,203 Licenses.permits and fees 25.000 27.600 2,600 27,600 Investment income 1.000 1,530 530 81 'fowl revenues 206.000 212.860. 6,860 . 208,884 Expenditures: Service district maintenance: Personnel services 1,200 6 1,194 94 Fringe benefits 800 2 798 29 Support goods and services 31,000 337 30,663 507 Snow removal/sanding 60.000 48,925 11,075 _ 86,972 Road grading/ditching 33.000 44,270 (11,270) 37,647 Repairs and maintenance 80,000 51.753 28.247 25,290 Total expenditures 206,000 145.293 60,707 150,539 Excess of revenues over expenditures — 67.567 67,567 58,345 Other financing sources: Transfer in- Land Sales Special Revenue Fund — 27,600 Change in fund balance S 67.567 67.567 85,945 Fund balance(deficit),at beginning of year 71,799 (14,146) Fund balance,at end of year S 139,366 71,799 94 Page 116 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH , i ommajor Special Revenue Funds . Fire and Road Service Areas—Bay View Road Service Area Schedule of Revenues,Expenditures.and Changes in Fund(Deficit) • Budget and Actual \'ear ended lune 30.2014 (With financial information for the sear ended lure 30,2013) 2014 Variance pith Final Budget Final Positive 2013 Budget Actual (Negative) Actual .Revenues: Progeny taxes and assessments S 15257 13,622 (1,635) 15.171 Investment income — 78 78 13 toil manes 13257 13.700 (1.557) 15.184 -Expenditures: Service district maintenance: Personnel services — 187 (187) — Fringe benefits — 161 (161) — Professional services 7,257 — 7.257 Support goods and services — 252 (252) 69 Snowremovallsanding 5,400 4.966 434 6.125 Road grading/ditching 1.100 — 1.100 — Repairs and maintenance • 1.500 —. 1,500 — Total eicpendinues 15,257 5.566 9,691 6.194 Excess of revenues over expenditures S — 8,134 8.134 8,990 Fund balance(deficit),at beginning of year (1.704) (10.694) Fund balance(deficit).at end of year S 6.430 (1.704) 95 Page 117 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGII Nonmajor Special Revenue Funds Fire and Road Service Areas—Service Area No.2 Schedule of Revenues,Expenditures.and Changes in Fund Balance Budget and Actual Year ended June 30.2014 (With financial information for the year ended June 30,2013) 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Revenues: Investment income S 100 52 (48) 37 Expenditures: Service district maintenance- Support services 100 — 100 — Excess of revenues over expenditures S — 52 '52 37 Fund balance,at beginning of year 5,743 5,706 Fund balance,at end of year S 5,795 5,743 96 Page 118 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds L.E.P.C. Schedule of Revenues,Expenditures,and Changes in Fund(Deficit) Budget and Actual Year ended June 30.2014 (With financial information for the year ended June 30,2013) 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Revenues: Intergovernmental: State sources—grants S 57,120 13,430 (43,690) 15.589 Expenditures: Public safer. Personnel services 36,020 9.465 26,555 10,002 Fringe benefits 21,100 4,609 16.491 4,814 Suppon goods and services — 415 (415) 773 Total expenditures .57,120 14,489 42,631 . 15,589. Excess(deficiency)of revenues over(under)expenditures S — (1,059) 11,059) — Fund(deficit),at beginning of year (16,762) (16.762) Fund(deficit),at end of year S .(17,821) (16.762) • 97 Page 119 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Land Sales Schedule of Revenues,Expenditures,and Changes in Fund Balance Budget and Actual Year ended June 30.2014 (With financial information for the year ended June 30.2013) 2014 Variance with Final Budget Final Positive 2013 Budget . Actual (Negative) Actual _ Revenues: Intergovernmental: State sources-PERS on behalf payment S - - - 13,439 Charges for services 50,000 34,765 (15,235) 9,684 Licenses,permits and fees 1.000 2,250 1,250 750 Investment income 20,000 (2,647) (22,647) 4,988 Other 200 140 (60) 446 Total revenues 71,200 34.508 (36,692) .29.307 Expenditures: General government: Personnel services 168.470 170,861 (2,391) 162,960 Fringe benefits 87,210 87,350 (140) 82,359 Professional services 25,000 27,837 (2.837) - • Support goods and service's .881,750 54,429 827,321 108.118 Total expenditures '1,162,430 340,477 821,953 353,437 Excess(deficiency)or revenues over(under)expenditures (1,091,230) (305,969) 785,261 (324,130) Other financing sources: I Land sale proceeds 902,000 356,284 (545,716) 6,787 Transfer out-Womens Bay Road Service Area Special Revenue Fund - - - (27,600) . 1 Net other financing sources(uses) 902,000 356,284 (545.716) (20,813) Change in fund balance S (189.230) 50,315 239.545 (344,943) Fund balance,at beginning of year 410,602 755,545 1 Fund balance,at end of year S 460.917 . 410,602 98 Page 120 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH i:onmajor Special Revenue Funds Buildings and Grounds Schedule of Revenues.Expenditures,and Changes in Fund Balance Budget and Actual Year ended June 30,2014 (With financial information foi the year ended June 30.2013) 2014 Variance n in Final Budget Final Posithe 2013 Budget Actual (Negativ el Actual Revenues: Intergovernmental: • Stale sources-PERS on behalf payment S 19,897 Charges for services 569.908 537.199 (32.709) 532.527 Investment income 1,000 2.937 1.937 (214) Other — 481 481 2- Total revenues 570.908 540,617 (30,291) 552.212 Expenditures: . • General goverme t: School buildings 35,000 . 24.655 10.345 44.297 . •Chiniak School .25.000 1.875 23,125 897 Borough building . 495,908 479,011 16,897 463,362 Mental health center 5.000 3,538 1.462 3,074 Various borough buildings 13,000 1.227 11,773 16,881 Project office 15,000 — 15.000 554 Total expenditures 58$908 510,306 78,602 529.065 Excess(deficiency)of revenues over(under)expenditures (18.000) 30.311 48,311 23.147 Other financing sources: Transfen in-Facilities Special Revenue Fund 18,000 18.000 18.000 Change in fund balance S — 48.311 4831 I 41,147 Fund balance.ti beginning of year 274.970 233.823 Fund balance,at end of year S 323.281 274.970 99 Page 121 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH NonrtmjoESpecial Revenue Funds Woodland Acres Street Light Service Area Schedule of Revenues,Expenditures,and Changes in Fund Balance Budget and Actual Year ended June 30,2014 (With financial information for the year ended Jane 30,2013) 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Revenues: Property taxes and assessments 8 11,650 I2_,067 417 11,550 Investment income .200 208 8 . 66 Total revenues 11,850 12,275 425 11,616 Expenditures: General government: Support goods and services 11;850 4,834 7,016 5,008 Excess of revenues over expenditures S — 7,441 7.441 6,608 Fund balance;at beginning of year 14,750 8,142 Fund balance,at end of year S 22.191 14.750 100 Page 122 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Trinity Islands Street Light Service Area Schedule of Revenues.Expenditures.and Changes in Fund Balance Budget and Actual Year ended June 30,2014 (With financial information for the year ended June 30,2013) 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Revenues: Property taxes and assessments S 5.500 5.753 253 5,213 Investment income 100 200 100 98 Total revenues 5.600 5,953 353 . 5311 Expenditures: General government: Support goods and services 5,600 1,800 3.800 1,835 Excess of revenues over expenditures - $ — 4,153 4,153 3,476 Fund balance,at beginning of year 17,954 14.478 Fund balance,at end of year S 22.107 17.954 101 Page 123 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Tourism Development Schedule of Revenues,Expenditures,and Changes in Fund Balance Budget and Actual Year ended lune 30,2014 (With financial information for the year ended Lune 30,2613) ' 2014 Variance with Final Budget Final Positive 2013 • Budget Actual (Negative) Actual Revenues: Transient accommodations tax $ 115,000 75,142 (39,858) 96,640 Investment income 500 1,150 650 818 Total revenues 115.500 76.292 (39,208) 97,458 Expenditures: Community and economic development: Contributions 103,126 84,126 19,000 84,910 Support goods and services- 12,374 — _ 12.374 Total expenditures '115,500 - 84,126 ' 31,374 84,910 • Excess(deficiency)of revenues over(under)expenditures E — (7,834) (7,834) 12,548 Fund balance,at beginning ofyeai 141,516 128.968 Fund balance,at end of year '5 _133,682 141,516 102 Page 124 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Mission lake Tide Gate Schedule of Revenues.Expenditures.and Changes in Fund Balance Budget and Actual Year ended June 30,2014 (With financial information for the year ended June 30,2013) 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Revenues: Propem taxes and assessments S 3,740 5.448 L708 5,117 Investment income - 230 333 103 172 Total revenues 3.970 5,781 1.811 5,289 Expenditures: Service district maintenance: Personnel services — 188 (188) — - Fringe benefits — 50 (50) — Contracted services 2,000 — 2,000 — Support goods and services 1,970 7 1:963 9 Total expenditures 3,970 245 3,725 9 Exce s of revenues over expenditures $ — 5,536 5.536 5,280 Fund balance,at beginning of year 31,881 26.601 Fund balance,at end of year S 37,417 31.881 103 Page 125 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fern Fuller Truth Schedule of Revenues,Expenditures,and Changes in Fund Balance Budget and Actual Year ended June 30,2014 (With financial information for the year ended June 30.2013) 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Revenues: Investment income $ 3,500 2,293 (1,207) 2,762 Expenditures: General government: Excess of revenues over expenditures 3,500 2,293 (1,207) - 2,762 Other financing(uses): Transfers out- Hospital Facilities Enterprise Fund (66,500) (66,500) — (66,5(10) Change in fund balances $ (63,000) (64,207) (1,207) (63,738) Fund balance,at beginning of year 329,063 392,801 Fund balance,at end of year $ 264,856 329,063 • 104 Page 126 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Trinity Islands Paving • Schedule of Revenues,Expenditures,and Changes in Fund(Deficit) Budget and Actual Year ended June 30,2014 (With financial information for the year ended June 30.2013) 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Revenues: Property taxes and assessments 5 10.000 9.984 (16) 15,595 Investment income 500 216 (284) 428 Total revenues 10.500 10.200 (300) 16,023 Expenditures: Service district maintenance- Support goods and services 8,290 17 8,273 48 • Debt service- Interest 2.210 2,208 2 3,242 Total expenditures 10,500 2,225 8,275 . 3,290 Excess of revenues over expenditures S — 7.975 7,975 12.733 Fund(deficit),at beginning of year (19,960) (32.693) Fund(deficit).at end of year S (11,985) (19,960) 105 Page 127 of 215 Review of the Comprehensive Annual Financial Report (CAFR). • AGENDA ITEM #2.A. ( KODIAK ISLAND BOROUGH Nonmajor Spealai Revenue Funds Oil Spill Disaster Schedule of Revenues,Expenditures,and Changes in Fund Balance(Deficit) Budget and Actual Year ended June 30,2014 (With financial information for the year ended June 30,2013) • 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Revenues $ — — — — Expenditures: General government: Personnel services 6,036 Fringe benefits — 3,644 Support goods and services — —. — 886 Total expenditures —. 10,566. Excess(deficiency)of revenues over(under)expenditures $ — — (10,566) Fund(deficit),at beginning of year (10,566) — Fund(deficit),at end of year $ (10,566) '(10,566) 106 Page 128 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. (This page was left blank intentionally) • ' I 1 • • Page 129 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. • NONMAJOR CAPITAL PROJECT FUNDS The Borough Capital Projects Fund accounts for capital improvement projects related to various financing sources. The School Bond Capital Projects Fund accounts for educational related capital projects•funded by general obligation bonds which will be paid for with property taxes and State of Alaska grants. The State Capital Grants Fund accounts for capital improvement projects relating • to grants received from the State of Alaska. The Other Capital Projects Fund accounts for capital improvement projects related to various financing sources. .1 _.i J Page 130 of 215 Review of the Comprehensive Annual Financial Report (CAFR). XI 0 m 0 0 o_ _ __ — _ _ _ m O 0 3 0 a KODIAK ISLAND BOROUGH O Noma*?Capital Project Funds to Combining Balance Sheet m lime 30.2014 D � (With summarized fmas6l information at June 30,201 3) c as -n 0 03 O Borough School Bond State Other y' Capital Capital Capital Capital Totals Z7 Assets Projects Projects Grants Projects 2014 1013 0 .0 Equity in central Iremury S 530,827 186.749 319,130 2283.455 3.320.161 3397.958 A. Receisabbs: State of Alaska — — 8.302 7.065 15,367 93,255 D Federal government — — 152.900 1.095 153.995 18329 D y' Properttaxes — — — — — 1.050 Accounts and other receivables,net 4.466 — 3.153 — 7.619 7.620 Total S 535.293 186.749 483.485 2,291.615 3.497.142 3318.212 Liabilities tad Fond Baboon Liabilities: Accolmts payable 4,200 104,931 38,303 1.638 149,672 106.490 Due to other funds — — — — — 1,814255 Unearned reveres — — 8.962 89389 98351 121.195 Total liabilities 4,800 104,931 47.265 91.027 248.023 2.041.940 Fund balances- Assigned 530,493 81.818 436.220 2200.588 3.249.119 1.476272 n o Total S 535293 186,749 483.485 2291.615 3,497.142 3,518212 C) LI 2 o D N r'n 107 y 3 a N n A m 40 o o_ S- ae n 0 3 -o KGBIAK ISLAND BOROUGH p 3 Nrnmajor Capital Project Funds 3 N N Combining Statement of Res nines.Expenditures.and Clanger in fund Balances G Year ended fund 30,2014 (0 D (With summarized financial information for the year ended June 30.2013) 3 3 c N T Borough School Bond State Other 01 Capital Capital Grants Capital Totals 01 Projects Projects Grants Project 2014 2013 O R s evenue ca Properly uses and assessments S — — — — 86.702 A Intergovernmental: N State sources — — 19,177 28,300 17.186 1.371.108 10 Federal wurces — — 152,900 34.102 '187.002 51.705 3- Investment imame 4.708 66 3,652 19.170 27.506. 61.794 'total avenues 4.708 66 175.729 81.581 - ,202.084 1.571309 > Expenditures' - A Capital outlay: Schools — 122.388 — — 122,388 613,235 General — 17.1.137 60.721 234.858. 2.04 1.671 Total expenditures — 122.388 174.137 60.721 357.246 2,654009 Excess(deficiency)of res-enure over(under)Expenditures 4.703 (122,322) 1.592 20,860 195.1621 (1,083.600) Other financing sources: Transfers in — — — — '— 390317 Transfers out — — — — — (4161.195) Net other financing sources(uses) - .— — — — — (3.870.848) Change in land balances 4.708 (122.3221 1,592 20.860 (95.162) (4,954448) Fum4 balances.at beginning of year 525.795 204.140' 434.628 2.179.728 .3344.281 6.430.720 w Fund balances.at and of year $ 530.493 81.818 436.220 2.200.558 3.219.119 1.476.272 n N C) is rn Z nt 0 °n 6J 108 us ezi. 3 4* N I:. AGENDA ITEM #2.A. 1 ENTERPRISE FUNDS The Municipal Solid Waste Collection and Disposal Fund accounts for the collection and disposal of'solid Waste and recycling services for the Kodiak island. Borough. The Hospital Facilities Fund accounts for rents on the Borough-owned hospital, hospital related state revenue sharing, and other hospital related revenue. In turn, it purchases hospital equipment and makes debt service payments on hospital related debt. The Kodiak Fisheries Research Center Fund accounts for rents and expenses on the Borough-owned Kodiak Fisheries Research Center. The three tenants: NOAA, Alaska Department of Fish & Game and University of Alaska. Fairbanks pay lease funds to participate in this multi-agency research facility committed to the preservation of the North Pacific marine ecosystem and resources. The 911 Service Fund accounts for funds collected from phone charges and pays for • a 911 emergency system. {1 1 J Page 133 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Enterprise.Funds Municipal Solid Waste Collection and Disposal I Schedule of Revenues,Expenses,and Changes in Net Position Budget and Actual Year ended June 30,2014 (With financial information for the year ended June 30.2013) 2014 Variance with Final Budget Final Positive •2013 Budget Actual (Negative) - Actual - • Operating revenues: Solid waste disposal $ 2,536,085 2,265,967 (270,118) 2,504,035 Other - 39,403 39.403 11,708 Total operating revenues 2,536,085 2,305,370. (230,715) 2,515,743 Operating expenses: Personnel services 995,829 876,354 119,475 936,508 Contracted services 46,000 185,284 (139,284) 352,132 Maintenance and repairs 72,500 141,309 (68,809) 38,882 Landfill closure and postclosure costs 300,000 - 300,000 - Depreciation • 306,120 278,342 27,778 293,913. General andadministration 287,600 206,793 80,807 301,707 Recycling services 280,000 214,876 65,124 212,243 Contributions 48500 39,106 9,394 . 37,011 Total operating expenses 2,336,549 1,942,064 - 394.485 2,172,396 Operating income 199,536 363;306 163,770 343,347 1 Other income(expense): I Intergovernmental: State sources-grants - 5,323,038 5,323,038 5,205,962 State of Alaska on-behalf payment - - - 60,967 Investment income 100,000 67,094 (32,906) 63,542 Bond premium amortization 27,211 27,211 27,211 Bond issuance costs - - - (25,285) Landfill closure and postclosure costs - 377,471 377,471 - 1 Interest expense (25,000) (138,800) (113,800) (144,325) i Total other income(expense) 75,000 5,656,014 5,581,014 5,188,072 m Income before transfers 274,536 6,019,320 5,744,784 5,531,419 i ' Transfers in 13,500 13,500 . - 131500 Change in net position $ 288,036 6,032,820 5,744,784 . 5,544,919 Net position,at beginning of year 10,813,768 5,268,849 Net position,at end of year $ .16,846,588 .10,813,768 109 Page 134 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. J KODIAK ISLAND BOROUGH Enterprise Funds Hospital Facilities t Schedule of Revenues,Expenses,and i Changes in Net Position Budget and Actual , Year ended June 30,2014 (With financial information for the year ended June 30.2013) 2014 Variance with Final Budget Final Positive .2013 Budget Actual. (Negative) Actual Operating revenues: Lease income S 720.000 1,150.000 430,000 720,000 ' Other — — — — Total operating revenue 720,000 1,150.000 430.000 - 720,000 1 Operating expenses: Personnel services 10.000 10,100 (100) 10.000 i Maintenance and repairs — — — Miscellaneous — 5,791 (5,791) — Depreciation 885,000 867.913 17,087 845,191 Total operating expenses 895.000 883,804 11,1% . 855.191 1 , Operating income(loss) (175.000) 266.1% 418.804 (135,191) Other income(expense): Intergovernmental: State sources-grants — 215.000 215.000 778,133 Federal sources-grants — — — 1,338 Investment income 20,000 73,207 53,207 26,626 I Bond premium amortization — 1.13,821 113.821 Bond issue coils — — — (87,288) 1 ' Contribution to Providence Hospital (108,000) (108.000) — (108,000) Interest expense (37,470) (748,721) . (711,251) (40556) Total other income(expense) (125,470) (454,693) (329,223) 570,253 Income(loss)before transfers (300.470) (188,497) _ 89,581 435,062 Transfers in 66500 66,500 — 66,500 Change in net position $ (233970) (121,997) 89,581 501,562 Nct position,at beginning of year 21,385,710 20.884,148 Net position,at end of year S 21.263,713 - 21385.710 110 Page 135 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Enterprise Funds Kodiak Fisheries Research Center Schedule of Revenues,Expenses,and Changes in Net Position Budget and Actual I Year ended June 30,2014 (With financial information for the year ended June 30.2013) 2014. Variance with Final Budget Final Positive •2013 Budget Actual (Negative) Actual Operating revenues: Lease income $ 1,543,500 1,851,322 307,822 1,603:503 Other - 439 439 - Total operating revenues 1,543,500 1,851,761 308,261 . 1,603,503 Operating expenses: ' - Personnel services 351,882 359,783 (7,901) 343,270 Maintenance and repairs 95.000 1,144 93,856 99 Depreciation - 750,200 636,143 114,057 635.031 • General and administration: Cleaning and janitorial 55,700 50,114 5,586 48,908 Heating 205,000 155,290 49,710 210,977 Electrical 188,500 152,984 35,516 170,062 Plumbing 169,000 50,384 118,616 34,064 Air conditioning - 628 (628) - 5,500 Elevators 3,000 2,150 850 - Miscellaneous 113,943 47,090 . 66,853 67,276 Total operating eipenses 1,932,225 1,455,710 476,515 1,515,187 Operating income(loss) (388,725) 396,051 784,337 88,316 Other income(expense): State of Alaska on-behalf payment - - - 23,329 Investment income - 38,550 38,550 27,534 Interest expense 225,400 (225,401) (450,801). (259,875) Total other income(expense) 225,400 (186,851) .(412,251) (209,012) . Change in net position $, (1.63,325) 209,200 372,086 . .(120,696) -Net position,at beginning of year 10,178,986 10,299,682 Net position,at end of year $ 10,388,186 . .10,178,986 III Page 136 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Enterprise Funds 911 Service Fund Schedule of Revenues,Expenses,and Changes in Net Position Budget and Actual Year ended June 30.2014 (With financial information for the year ended June 30.2013) 2014 Variance with Final Budget Final Positive 2013 Budget Actual (Negative) Actual Operating revenues: Customer charges S 50,000 39.817 (10,183) 39,769 Operating expenses: Personnel services 3.000 3.000 — 3.000 Miscellaneous I00 98 2 142 Telephone services 46.900 36,719 10.181 84,454 Total operating expenses 50.000 39,817 10,183 87,596 Operating income(loss) S — — — (47,827) Net position,at beginning of year — 47;827 Net position.at end of year $ 112 Page 137 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. 1 SUPPLEMENTARY SCHEDULES Page 138 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. t KODIAK ISLAND BOROUGH SUMMARY OF BONDED DEBT SERVICE REQUIREMENTS TO MATURITY June 30,2014 Annual principal and interest requirements on General Obligation Refunding and Construction Bonds. Fiscal Year Principal Interest Total 2015 S 2,640,000 S 3,119,885 S 5,759,885 t 2016 3.170,000 2,989,362 6,159,362 2017 3,295,000 2,869,212 6,164,212 2018 3,395,000 2,750,462 6,145,462 2019 3,540,000 2,617,362 6,157,362 2020 3,670,000 2,478,487 6.148,487 2021 3,815,000 2,336,099 6,151,099 2022 3,980.000 2,166,550 6,146,550 2023 4,160,000 1,985,699 6,145,699 _ 2024 4,355,000 1,789,538 6,144,538 2025 4,570,000 1,572,570 6:142,570 2026 3,310,000 1,402,026 4,712,026 2027 3,470,000 1,238,228 4,708,228 2028 3,645,000 1,064,122 4,709,122 2029 3205,000 881,234 4,086,234 2030 3,365,000 720,316 4,085316 1 2031 3,535,000 551,360 4,086,360 2032 3,085,000 381,190 3,466,190 2033 3,240,000 226,940 3,466,940 I 2034 1,690,000 84,750 1.774,750 S 69,135,000 S 33.225,392 S 102,360392 t i 113 Page 139 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. (This page was left blank intentionally) Page 140 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. 1 KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND,2004 SERIES D RETIREMENT SCHEDULE June 30,2014 2004 D BOND ISSUE This issue,dated December I,2004,was issued under a book entry system registered in the name of Cede& Company,as Nominee of the Depository Trost Company,New York,New York,the securities depository for the 2004 Series D Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council,Wohlforth,Vassar,Johnson&Brecht of Anchorage,Alaska.This bond was issued to fund the• acquisition and construction of school capital improvements in the Borough,including a new school pool and the Kodiak High School Voc Ed/Classroom reclamation. Interest due Principal due Interest due Fiscal year Interest rate November 01 November 01 May 01 Total 2015 4.00% S 10,600 S 530.000 S S 540,600 • • • 114 • Page 141 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND;2008 SERIES A RETIREMENT SCHEDULE June 30,2014 2008 A BOND ISSUE This issue,dated April 15,2008,.was issued'under a book entry system registered in the name of cede&,Company,as Nominee of the Depository Trust Company,New York,New York,the securities depository for the 2008 Series A Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal'opinion'was rendered by bond council, Birch,Horton,Bittner and Cherof of Anchorage,Alaska.This bond was issued to fund the acquisition and construction of school capital improvemenls'in the Borough,including a new school pool. Interest due r Principal due Interest due Fiscal year Interest rate October 0L . April 01 . April 01 Total 2015 5.00% $ 144,605 S 335,000 S 144,605 $ 624,210 2016 5.00% 136,230 350.000 136,230 622,460 2017 4.00% 127,480 370,000 127,480 624,960 2018 4.00% 120:080 380.000 120,080 620,160 2019 4.00% 112,480 400,000 112,480 624.960 • 2020 4.25% 104,480 - 415,000 104,480 623,960 2021 4.25% 95,661 430,000 95,661 621,322 2022 4.38% 86,524 450,000 86,524 623,048 2023 4,50% 76,680 470,000 76,680 '623,360 2024 4.70% 66,105 490,000 66,105 622,210 2025 4.80% 54,590 515,000 54,590 624,180 2026 4.90% 42,230 540,000 42,230 624.460 2027 5.00% 29,000 565.000 29,000 623.000 2028 5.00% •14.87$ 595,000 14.875 624,750 $ 1,211,020 $ 6,305,000 $ 1,211,020 S 8,727,040 115 Page 142 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. I KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND,2011 SERIES ONE RETIREMENT SCHEDULE June 30,2014 2011 SERIES ONE BOND ISSUE This issue,dated March I,2011,was issued under a book entry system registered in the name of Cede&Company;as Nominee of the Depository Trust Company,New York,New York,the securities depository for the 2011 Series One Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council,Birch, Horton,Rimier and Cherot of Anchorage,Alaska.This bond was issued to find the High School Renovation and Renewal project. Interest due Principal due Interest due Fiscal year Interest rate September 01 April 01 March 01 Total 2015 2.05% S 160,500 $ 305,000 $ 160,500 S 626,000 2016 2.36% 155,925 310,000 155,925 621,850 2017 2.75% 151,275 320,000 151,275 622,550 2018 3.12% 146,475 330,000 146,475 622,950 2019 3.45% 140,700 340,000 . 140,700 621,400 2020 3.70% 133,900 355,000 133,900 622,800 2021 3.93% 126,800 370,000 126,800 623,600 2022 4.80% 119,400 385,000 119,400 623,800 2023 4.80% 110,256 405,000 110,256 625,512 2024 4.80% 100,638 425,000 100,638 626,276 2025 5.20% 90,544 445,000 90,544 626,088 2026 5.20% 79,975 465,000 79,975 624,950 1 2027 5.20% 68,931 485,000 68,931 622,862 2028 5.20% 56,503 510,000 56,503 623,006 r 2029 5.20% 43,434 535.000. 43,434 621,868 2030 5.20% 29,725 565,000 29,725 624,450 2031 5.20% 15,247. 595,000 15,247 625,494 I S 1,730,228 $ 7,145,000 S 1,730,228 S 10,605,456 116 Page 143 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. • •KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND,2012 SERIES A RETIREMENT SCHEDULE , June 30,2014 2012 A BOND ISSUE This issue,dated May 24,2012 was issued under a bunk entry system registered in the name of Ccde&Company,as Notiiinec of the Depository Trust Company,New York,New York;the securities depository for the 2012 Series A Bond. ' This issue was marketed by.the Alaska Municipal Bond Bank. Legal opinion was tendered by bond council,Wohlforth, Vassar,Johnson&Brecht of Anchorage,Alaska.This bond was issued to refund part of the 2004C Bond which was issued to fund planning,design,and construction of capital improvements to the Larsen Bay School.Kodiak Middle School and Kodiak High School. Interest due Principal due Interest due Fiscal year Interest rate :September 1 September I March I . Total 2015 2.00% $ 113,400 S - $ 113.400 S 226,800 - 2016 4.00% 113,400 435,000 104,700 653,100 2017 •4.00% 104,700 455,000 95.600 655,300 2018 .2.00% 95,600 460,000 91,000 '-'646,600 - 2019 4.00% 91,000 480,000 81.400. 652.400 2020 5.00% - 81,400 495,000 69,025. 645,425- 2021 5.00% 69,025 '525.000 55,900 649,925 2022 4.00% 55,900 545,000 45,000 645.900 2023 5.00% 45,000 570,000 30,750 645,750 2024 5.00% 30.750 600,000 15,750 646,500 2025 5.00% 15,750 630,000. - .. 645,750 .$ 815,925 S. 5,195;000 .$ 702;525 S . . 6,713,450 117 Page 144 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. i KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND,2012 SERIES B RETIREMENT SCHEDULE June 30,2014 I 2012 B BOND ISSUE This issue,dated May 24,2012 was issued under a book entry system registered in the name of Cede&Company,as Nominee of the Depository Trust Company,New York,New York,the securities depository for the 2012 Series B Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council,Wohlforth. Vassar,Johnson&Brecht of Anchorage,Alaska.This bond was issued to refund part of the 2004D bond issue,which was used to fund the acquisition and construction of school capital improvements in the Borough,including a new school pool i and the Kodiak High School Voc/Ed Classroom reclamation. Interest due Principal due Interest due Fiscal year Interest rate September I September I March I Total 2015 2.00% S 138.375 S S 138,375 S 276,750 2016 4.00% 138,375 530,000 127,775 796,150 2017 4.00% 127,775 550,000 116,775 794,550 2018 2.00% 116,775 565,000 111,125 792,900 2019 4.00% 111,125 585,000 99,425 795,550 2020 5.00% 99,425 610,000 84,175 793,600 2021 5.00% 84,175 640.000 68,175 792,350 2022 4.00% 68,175 665,000 54,875 788,050 2023 5.00% 54,875 695,000 37,500 787,375 2024 5.00% 37.500 730,000 19,250 786,750 2025 5.00% 19.250 770.000 - 789,250 5 995,825. S 6,340,000 S 857,450 S 8,193,275 118 Page 145 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. -KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND,2013 SERIES ONE RETIREMENT SCHEDULE ._ June 30,2014 2013 SERIES ONE BOND ISSUE This issue,dated March I,2013;was issued under a book entry system registered in the name of Cede:&Company,as Nominee of the Depository Trust Company,New York,New York,the securities depository for the 2013 Series One Bond. This issue was marketed by therAlaska Municipal Bond Bank. Legal opinion was rendered by bond council, Birch,Honon,'Binner and Cherot of Anchorage,Alaska. This bond was issued to fund the I ligh'School Renovation and Renewal project - Interest Interest Due Principal Due Interest due Fiscal Year Rate .August 01 , February 01 , February 01 Total 2015- 4.00% $ 479,670 S 730,000 $ 479,670 $ 1,689,340 2016 4.00% 465.070 760,000 465,070 1;690,140 2017 4.00% 449,870 790,000 449,870 1,689,740 2018 4.00% 434,070 820.000 434,070 1,688,140 2019 5.00% 417,670 855,000 417,670 1,690,340 2020 4.00% 396,295 • 895,000 396.295 1,687,590 2021 4.00% 378.395 935,000 378,395 1,691,790 2022 4.00% 359,695 970,000 359,695 1,689,390 2023 4.00% 340,295 1,010,000 340,295 1,690,590 2024 5.00% 320,095 1,050,000 320,095 1,690,190 2025 5.00% 293,845 1,100,000 293,845 1,687,690 2026 5.00% 266,345 1,155,000 266.345 1,687,690 2027 5.00% 237,470 1,215,000 237,470 1,689,940 2028 5.00% 207,095 1,275,000 207.095 1,689,190 2029 5.00% 175,220 1,340,000 175,220 1,690,440 2030 5.00% 141,720 1,405,000 141,720 1,688,440 2031 5.00% 106,595 1,475,000 106,595 1;688,190 2032 5.00% 69,720 1,550,000 69,720 .1,689,440 2033 3.80% 30,970 1,630,000 30,970 . . ..1.691,940 .5 5,570,105 $ .20,960,000 $ 5,570,105 $ 32,100,210 119 Page 146 of 215 Review of the Comprehensive Annual Financial Report (CAFR). . • AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND,2014 SERIES ONE RETIREMENT SCHEDULE June 30,2014 2014 SERIES ONE BOND ISSUE This issue,dated March 12,2013,was issued under a book entry system registered in the name of Cede&Company,as Nominee of the Depository Trust Company,New York,New York,the securities depository for the 2013Series One Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council,Birch,Horton, Bittner and Cherot of Anchorage,Alaska. This bond was issued to fund the High School Renovation and Renewal project Interest Interest Due Principal Due Interest Due Fiscal Year Rate September 01 March 01. March 01 Total 2015 2.00% S 533,454 S 740,000 S '502,731 S 1,776,185 2016 3.00°!. 495.331 785,000 495,331 1,775,662 2017 4.00% 483,556 810,000 483,556 1,777,112 2018 5.00% 467,356 840,000 467,356 1,774,712 2019 2.00% 446,356 880:000 • 446,356 1,772.712 2020 2.00% 437,556 900,000 437,556 1,775,112 2021 5.00% 428,556 915,000 •428,556 1,772,112 2022 5.00% 405,681 965,000 405,681 1,776,362 2023 5.00% 381,556 1,010,000 381,556 1,773,112 2024 5.00% 356,306 1,060,000 356,306 1,772,612 2025 3.12% 329,806 1,110,000 329,806 1,769,612 2026 5.00% 312,463 1,150,000 312,463 1,774,926 2027 5.00% 283,713 .1,205,000 283,713 1,772,426 2028 5.00% 253,588 1,265,000 253,588 1,772,176 2029 5.00% 221,963 1,330,000 221,963 1,773,926 2030 5.00°/. 188,713 1,395,000 188,713 1,772,426 2031 4.50% 153,838 1,465,000 153,838 1,772,676 2032 5.00% 120,875 1,535,000 120;875 1,776,750 2033 5.00% 82,500 1,610,000 82,500 1,775,000 2034 5.00°!e 42,250 1,690,000 42,500 1,774,750 S 6,425,417 'S -22,660,000 S 6,394,944 S 35,480,361 120 Page 147 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. (This page was left blank intentionally) • Page 148 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. STATISTICAL SECTION • • J Page 149 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. , r r STATISTICAL SECTION This part of the Kodiak Island Borough's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the governments' overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the government's linancialPerformance and well-being have changed over l une. 121-124 • Revenue Capacity These schedules contain inJarnation to help the reader assess the govern- ment's most significant local revenue source, the property tar. 125-129 Debt Capacity These schedules present information to help the reader assess the afforda- bility of the government's current levels of outstanding debt and the goy- ernment's ability to issue additional debt in the fiauire. 130-134 Demographic and Economic Information These.schedules offer demographic and economy indicators to help the reader Understand the environment within which the government's finan- cial activities take place. 135-141 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the revelant year. Page 150 of 215 Review of the Comprehensive Annual Financial Report (CAFR). 0 63 0 0 3 - --- 0 0 0 3 -0 a KODIAK SSU,ND BOROCCII CD Na P.titim by C40170414 0 Lea Tea focal Yen 0 (+4941606 of 99mmm{) 0 D C M a 2g2 1r 2494 0 Careamscatal.aiHis . T Da Ia0slaset Na a capital mos S 61.134.201 S 62.716.326 S 73,411394 S 25.127,779 S 71.534.766 Umcmited 45.052.197 45.653331 37440/16 89.153.794 43.140406 O Tad 3aa®d ru.ite on mb S 10216.401 S 101369.613 S 111.066110 5 114.911313 S 119615,172 0 y' Bmiewppe0174178 77 Na ante=CI man mph, n S 39378,733 S 3714510 S 31423.762 S 34.706,597 S 31,135340 0 Umemimt (7.213.9501 (6133453) (53033621 (21623631 2939300 L - Tad dbOpe activities m assets S 92.614135 S 32.454.657 5 33.1341400 5 31.44334 5 35,196.039 0 } 9 Nrm�@ ( Net mt4cad mcapml asp S 137.723931 5 101301134 1 112.049.156 S 39134,116 5 109670,106 > UmmicaL 37.161247 39319304 32.137354 36.991431 45301305 p TOW piaa23 mace m assn S 133121.236 5 14412/30 5 111.114510 5 144825.607 5 154.171311 Thal Yar al! all 232 all 00 Cu Nets tm iac' Namaaed iv opal asses S 21.412,045 1 111,719375 S 35335,497 5 12.173398 10,139321 Umo't 44992902 47,094,977 43265320 47.149.05 46,754.461 Taal,794®10 amcitia rat au 5 126.439.90 S 12118752 1 133350.317 5 119.923.433 124913.912 D®Ope activities: Na mtswmt in capital cans $ 34335159 S 35,170,143 5 31.967.945 S 214282 ,143 36313,229 Umem'srd (5913671 1.137.316 4,532561 20.750321 1211555/ Taal p®nwryc mtitiCa=SIN 5 36,057,492 S 36.307.969 S 36.500,506 5 42.373,464 46,491,481 9't7011Y 191ameat 9 Na imam=m 04501 481454 S 114,102,904 S 114959,513 5 117.710103 5 94,401341 116342,750 ):11 0 Umemid 41.391335 41232203 55322.291 67.100.154 51169.119 O Taal pimac3 Swam m macs 5 162,497.439 S 165.192321 S 173307.405 $ 162.301.397 175.412.469 m tn Z o Sows Baa.31 pant ad3a n u'i 121 y 3 N a AGENDA ITEM #2.A. KODIAK 1915760 BOROIY.n (1m866 m NeiPailio. Lau To fool Van 1'66.001ws of acsamrcrn5l Fwal lest 1635 :. 26627 141 1452 2^.19 3411 loll '2011 131' Expenses Go *amities ('mull finernmen 1 7,133,461 S. 1991399 f 4.755.754 1 4,726754 5 1.721,964 $ 4:579,415 5 5109231 5 '1.281.389 1 7J98899 f 6,950,640 Public safely - 509,697 5799.710 612163 664,349 .622390 614,197 751.037 tmercnny 9reyunlnes 25450 0,599 ,10,314 11841 11,965 10411 11,705 2141,1 273480 12,487 , Canmunilyod economic aneI panne 509,630 734,0' 116614 1,105,156 .908,501 1,033666 1.211,109 1195337 1074991 964,177 Health and ainiulion 187.619 403,866 414,144 449792 371073 4059117 392.011 391.996 290,363 326,700 Education:mllme,494.06.913.0 115091 1612157 101)17 181,747 240,571 193,11. -95,690 64.289 , 04,273 713,017 Potts cd lttiaalion 11,625 _,),813 0,100 37,795 Service 414lndmunlmunce .343934 336.385 362.109' ,378,661 39111.0 541497 593150 501,665 •479,264 611572 •Education.culture,and,.ei.4tinn 10,707,757 10631.590 10.788,100 11424 160 12,354,129 12.41)691 13934,349 11,991842 13910,919 14321,509 I4ern1 onlon01amd6M 1.101394 '0700009 -1,290116 1370,111 1401,01) 1,136fIt6 I,Ha.052 1191945 ,13'432) 2,109463 1 Tout 09wnm,6,1 sod,Nn flick. 1909989E 10.217.971 11,561,736 19661,196 '24007800 . 21,019330 22,413590 20,476301 20,493,133 24006,130 &sineaira eniminry SSOU.ipal solid 15•266 caumimcad dupoul 3,362,340 1446,453 1,1814]1 4,621x6 1,852,151 424.140 7,102,132 2115,752 3.42.0906 2010,664 IbdpiWGnlirie5 1.314.487 1,301593 1,297,719 1.124670 1,095,515 1,635,020 1,027,615 '1,016162 1,091,035 1,740,575 A6du6 fnkrinmmeh cenx66 1.875,711 1856,675 1,109,710 2.027.432 1,40,10) 1911,)60 1,47,427 1,746,912 1,77506.' 1681,111 91 Ysexri6o .69119_ 57194 - 64,140 .107080 4l wl .41474 .53231 •2611 .85596 19,117 T9W businessnTT rime* 0.655101 6661105 6,110,1)0 7.861811 6.9)3140. 1319322 3171415 -5.113101 5.295699 5,14141) T0u1 primary goaavme*S99es S 36555193 3_2,,1111_1 076 1_24 70_,_„21____805 5 T1221x4 'S 26938940 1 2812742/ 227443)05 : )5,1■1202 )0,11147 .32,1 3.)5) P.enen Pnemxn Cmavmmm0l acts,din room 6rsemo9. •Gana)nrvmunar 5 367430 S 311 1102 1 1058)30 S 41124 5 705,166 5 703131 0 651,461 S 671.050 1 549,110 0 777,350 robot ode) - 11161 -I2.762 11.715 3 1.646 13,149 14)36 Cawmrry ad maws derela{mad 21.886 7 60.067 141,652 - - IIa14'ad s+mwwn - 7,570 - Education,tWuK and laoanm 50.701 108,210 - • .- . . - . Sepvicm district mainiwree 20,000 SOpq 20,015 78.345 25,9666 13,6 27,600 1 94,070 110,111 03imayamd secondary duadrm 95,025 . - , , •Op4n6n8 6.8:84 0.4000001Miam •721.453 1210,547 1.915,697 1011246 2,43.254 7,196,344 2.195.661 2479263 3,917,61 4,077,310 Caput loots 2917160 298.152 134922 1.9^3346' 1)3125) 6.511799 3341219 514,109 2.212514 4601,137 ' row gownnrtn101o00itiapw,minmw .4104733 .2,07444 3367421 4458392 561704 9416,14 6,256.691 373849 5,767211 1148/146 'Chrgnfml . tAlunicipl solid scoot allemun 1563 dops 3,141,156 3,663399 0032,985 3.911771 7643,99) 4450.169' 2,397,979 2,301,79 2.504935 2.165.907 . Unpin)x•230644 - 1,153113 1,153,111 191,110 720.001 -3515155 1430.990 720,000 720.000 ,720000 1.150,000 HWWt 11,14n89iaano cays 1,566,656 1.072.474 1.501.150 1.614.332 1.591200 1.610.775 2,018747 1636,721 1601103 1,651.122 911)mica 76.771 65614 63694 14.925 5264 '42471 51041 O0naog aunts andconmNuom 75.319 4,044 Cwiw grants , 97,534 5.984.1195 5335,016 7 9001buaine5.rype eaivllinpl93nnnsone, 546596 15496110 - 6,651613 6301228 La4 -0)31638' 5139767 40100 :00897'67 10805427 • Told primary 00,308900 Fog.n.s^36666 1 9,971,720 1 0,531,114 0 9,976,44 9 10,759620 f 14,47713 1 17437631 1 .11.446 405 1 3410)37 3 1664476_0 22216,571 Neunpeuerin Ga.6mmmpl octiailm 0 053.795,159) 0 (16,138,5771 $1154000151 0(1330314).S 114290.760 1 I11.472.9/51 0 116.10,1921 I 616,7376029 1 119665,937)1 115.11190) WdinaNype 4,-,mun - (766.705) (200 395) 516 413 (1,5816601 1,879 604 501 316 69,552 (280)611 '5.601,568 • 5263,010 ' boil primary government ea eapwe 0(16441 864) 3 116446 9220 5(04,712402) 1 06,791 500 1 (12,511,1021 5 (10,44529)S 060734000 (170129411 (14)331,16911 0.871 1101 Girt.,Ramon-tYr Oaea:Nei Andi Comment.'..a,;0143., Trtel ' 33901)3'3a50 S 9,04,729 5 9,007,551 5 9,724,916 f 10,118,602 S 10,592,250 5 11.051,740 5 11,945,103 0 11127.552:1 12.930.512 5 13,741 190 5400)0154 lma 1,04.539 1,116,9118 1,116.619 3.176310 1,311,101 .1336,075 1649375 1970265 1,774,730 1843,119 lbaaoiced gams andomnNtioru 734,539 3,112351 1,242,740 3,115750 4.214,617 4,063,966 1,643009 4,199,766 4,156203 4,14244 Iodine 26,369 760 7.313 4,540 .064,34 19..9009 o111inp 1.750,121 7.791191 3245.990 3912141 1.012,615 1,119201 713,414 1.701903 520,676 1,105,717 00.1 55.692 779)23 .1225,636) 300.550 226,530 609946 739.11) 327,40 383,127 506,546 Transfers 170,602 247,200 `167.641 127,050 1765.1901 180,0301 (100)0 110.00001 .(80.001) (843001 -P47100.44,535(tem 1,196,222 2 Taal 06,4.0;141101 600nia S 144 3.421 1 18301,309 0 17,997142 1.19.119307 S 19,084365 .5, 11,217690'6 /161/297 1 21.036566 $ 19,925968 5 21.175 439 030x)364.56“600 104015660,)evniap 3,812 1(1892 271,176 434,14 273.971 191,061 100•x923 202,027 117)302 171,151 Uhn 191.095 15,747 4,380 50 110,442 07686 591,162 I TI.noOn 1)70,61) 479,.280) 1162,043) 11270501 765.490 80,000 00.000 00.000 60,000 30,04 EnnurdinoH ilm1 412602 •• Total 6'sinms-ryRnt'^tin 199.190) - _106,107, -14 7,230 '111494 1,472,201 _L 271067 180,975 472469 :276390- 153,013 70670p1400113009000400 0 14310631 1 16,601,116 1 10,14572 5-19430,801 f 20556,566 1 /8511757 S 11792,222 5 222011.0)5.0 10,252450 0 22,987452 C o3 iv Net PoL Cwse:mnentala4nlrt 1 0144,731) 1 7,160,282 0 7,690,427 0 1.905,461 0 4693,599 8' 47.4,775 0 7444,405 5 .4,809964 0 '310031 1 6,990549 8wrcss'lype.uioioe, (066,13)1 99,112. 465.143 11.276.1661 '3351605 41453 250,472 a6 5677955 6,120023 Tout p1'm.rygovanm9 f 02)31.2333 0 2,261494 S 3362170 1 3639297 S 1015404 5 1.626328 S 2694612'5 499303 S 6,117,919 0 -13,110572 122 Page 152 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Fond Balances of Governmental Funds Last Five Fiscal Yvan (modified accrual basis of accounting) Fiscal Ian 3010 �� 241 3013 2014 General Fund' Nompendabk S 15,70.3 S 6,801 S 166.020 5 6,324 S 1.459 Cbmmined _ Unassigned 2.366,973 1.952.757 3,126.037 3.340,662 3302,489 Total General Fund S 2382.676 S 1959358 5 3.292,057 S 3.346.986 5 3.503.948 M ether governmental fads Noospendable S 34,342 5 21,704 S 5.114.902 S 4.636,976 S 513,765 Committed 52.453.871 57.633.409 37,288,510 37,902,356 42355,129 Assigned - 13464,575 29,981303 28,875,499 Unassigned (805.499) (1,179,132) (1,989,279). (51337) (2.929,481) Total all mho grvemmenal funds S 51,682,714 S 56,475.981 S 51.8786708 5 72,469,498 S 68,814,912 • The Kodiak Island Borough imptemeamd GASB 54 in Fad Yeas 2011.Thor is wily that is only Ins)van of data • 123 Page 153 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM#2.A. p x . _'::_g_.41y`1 .A.e.Ff 9'qF I=.1 1 +5 g.g. 41I 9 ��I ;�yy�11F 11I P -E.R ?:,i!p .i..ua“E.q,6.5,1 5i 'F'.yr?{ a I la 1'a.F u^. is3a_r. i5-_sa.,- :A s.£g.1 r ER ,s4_ r. .. e ij _42225ry 24.' 4_ 5f t5 =f E - q!... E JI 0 i 1 Ell F L a I b a g "R='?$° 3�2 §xi "; 1 k? c. 1 $I 1 155 a • - li ;! - ixc �c , r 5 9 g l x attf5t1 1--== 1 ''31 R lr.I r. [ I I I ilia t E - --=gac a 'f5t ti t5 I_ g gt}1 £{ 4kk9SIf{1I :.ld£,F.1iglikki 'S .H.ik{ F milky!! s e I 9: ! =f'7:J i`2s 34 �- . .n.1 :. F_,.''-I fi '� 5iU---f d.£._'.'._3^n,il- ` kt k9R1l4 gAillF.iae•1 :!! HI 3°¢°ve tf zu l.s•f] .1 f_. gzl : 1 I2 I f .1 Ii 1Z / p 2 11111111 E ! 6 a Th11 ° I 1 3 E� €E :1.:1.1aTF 1 I ?l. 1-j 111[iia I'3[!III1+iiJu1Ii;EI a ; a Page 154 of 215 Review of the Comprehensive Annual Financial Report(CAFR). 0 to e 0 0 5 to C) 0 3 0 a KODIAK ISLAND BOROUGH m Gertv41 RnSoma")aavm by Soma") H I. Tea Fiscal Yen O 1/ceases. later- Fbcal Permits Cannmeatal Investment Optntbg Mbethaatam a Year Tare and Fees Ronnie lateen Transfers Rename Total c 0 T 2105 9478,816 161,621 1,925,405 265,392 — — 11.731,234 5 2006 10257.0223 171,962 2,369,185 469,913 — — 13268.083 2007 10.211.016 78.720 3,313,199 399,149 — 12,604 14,104411 O 2108 10.792.741 110.256 3.276.741 544.926 — — 14,714.664 d 2009 10,164,441 65,417 4461,624 292,125 — 131,944 15.816251 ,Z3 2010 11219,112 71419 4,123,507 174567 — 38352 15630,927 O 2011 12.412,132 72.394 3.642,009 (22 14'_1) — 537,235 16.632.841 o 2012 2.291,623 65.421 4,425,447 211,792 — 16.177 7,014462 a 2013 2.035,971 66,476 4,717,303 39.078 29335 30,733 6.984901 n 2014 2,051,794 - 82.713 4.605.916 - 23.801 — 14.328 6.778355 - 73 -- nih(a)Ian GcacFund l Fu ally. Swett:Bau4%general ledger. • co m n 0 m i ri N rn y 125 m 3 N a AGENDA ITEM #2.A. 1 ADDI.aK IS LAND BOROUGH Amused2M found Actual Value of Taaabk Property UR Ten Focal Voss Ratio a1 Teal Taxable Total Assessed to Fiscal Real Property Peron'Property Total threat Total , liar Eroded Pet antic Full sloe Nei Tnnbk F.11 Valise NetLU6k Tall Valise In Fill else Jaw 30. Assessed Vale Bnermlutlon Averted Value Bnernlutln Assessed Valve DnermIntiea Rate Detenaltuoitto 2005 678425,914 731267000 105,481,537 310,735,606 763,907,451 1,032,002,600 1025 UM 2006 692,572.845 186.373800 106,06,504 309,114,600 798,719,349 1,095,488.400 1100 72.92 I 2007 710648,299 836,778,900 94833,515 297.380200 605,681,814 5134,159,100 1050 7104 2008 734527.929 941,403.800 100,997.608 298543,700 835,525537 1,239,947,300 1050 67.38 2009 765.152958 817.641.308 105.320.023 233.623.664 870.472,985 1,051)64972 1050 8280 2010 , 805.007,744 855,452861 108,014,241 221,294.006 913,014.985 5032,746.870 1050 8432 2011 815,787,940 931330,97(1 113091,185 250,671059 988,879,125 1,182,002,029 1050 8366 • 22012 947.611 96 1067,199.196 91612,537 230610,137 1039,223,833 1 41609,533 1075 8355 2011 904,146,580 1,049,746,680 101,821.7W 237,074,8011 1085,968)80 1,286,821,48D 1075 84 39 2014 1029)39,311 1.100.702.180 107.237.300 286i725,030 5135476611 1187,127,180 1075 II 51 Soaves:Borough asxsment and ua records Noe Poopeny in Kodiak Wand Borough is rea.snsnl once every three"tars Property rs Boned at actual value.therefore,the assessed talon air equal to actual value In ates He per 81,000 ofassnuH value I Last Ten Years Assessed Values St700,02.6W 3µm990}00 — — 1 u5361909090.90909090)..699w 090 p S— giL —1•i? — —k 4■L— 7005 2006 2037 2008 7003 2010 2011 7013 7113 7014 I i l 126 Page 156 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITE M#2.A. ....,,.,,, ) § annee dim ,,e wee@* \lss.zsz.t I I |!I s ;....,'' | | 0|1. 1,11 .,...;,!!! |§§ glsa:""" | - .1i ]§laa Am" \ § ! „7114 ~ if eR !! § , „ „ m! t\ 1$ , ull!!! *11 X11 . § Page�. . 157 of 215 Review of the Comprehensive Annual Financial Report(CA 73 C o_ 3 CD 0 0 3 o KODIAK ISLAND BOROUGH TProperty Tax Levies and Cnlleciionc N Last Ten Fiscal Years to 1 N D 0 0 C to Collected nithia the T Fiscal Year Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date ° Ended for the Percentage ,. in Subsequent Percentage M ° June 30, Fiscal Year Amount of Levy .Years- Amount of Less' Ol to p 2005 S 8,756,263 8,602.243 98.2 153.837 8,756.080 100.0 m 2006 9,733.253 9.320,203 95.8 412,332 9,732.535 535 100.0 o 0 21107 9,298,329 '9,169,456 98.6 126,255 9,295,711 100.0 2008 9,979,775 9,615,784 96.4 361,432 9,977,216 100.0 ' y 2009 10,231,461 10,201,209 99.7 24,891 10,229.858 100.0 A 2010 10,879,276 10,487.467 96.4 383,320 10.872,433 99.9 2011 11,536,758 11,499,457 99.7 38,109 11,537.566 100.0 2012 13,255.665 13.038,077 98.4 273,899 13,311,976 100.4 2013 13,581,524 '13,477,005 99.2 113,296 13,590,301 100.1 2014 14.424,260 14,250.305 98.8 — 14,250.305 98.8 Source:Borough general ledger. Xt. Co CD m N 2 0 0 O N 128 cm n 3 I* NI a AGENDA ITEM #2.A. • • KODIAK ISLAND BOROUGH ' Principal Progeny Tax Payers Catml Year and Tm Years Ago 2014 2004 Percentage Percentage Taxable of Total Bonotb Taiablr of Total Boratgb Assessed Assessed Assessed Asseised Taapaver Valor Rank Vane Value Rank Valve Ocean Booty Seafoods S 25,591,900 1 2.2% S 9,824538 3 13% Trident Seafoods Corp 21,075,400 2 1.8% 1.4% Intl Seafoods of Alaska 16,459.000 3 1.4% 9,837,184 4 1.3% Westward Seafoods Inc 14,762,500 4 13% — North Pacific Seafoods 14313,600 5 1.2% 0.9% Meehan Damon= 11,442,200 6 1.0% 8.965,219 5 1.2% Wal-MattScm Club 9,609,000 7 0.8% 7.934300 6 IA% Mill Bay Plan Assoc LTD 8,952,200 8 0.8% 7,138,400 8 0.9% GCI C®onwoeatia¢Corp 7411,000 9 0.7% 1.7% Horizon Lines of AL+ska LLC(a) 7,316,800 10 0.6% 7452,942 9 1.7% Western Alaska Fisheries — — — 11487,450 1 1.551, Alaska Ca®wicatioos Syvern — — — 11,771,192 2 1.5% Afo@mk Native Corporation — — — 9.623,321 7 1.3% Kodiak Fishmeal Company — — — 7.409320 10 0.9% Total $ 13,963,600 '11.7% S 91143.766 113% Soar:Borough as meads. (a)In 2004 company nano.m CS%Lines LLC • { 1 129 I Page 159 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • KODIAK ISLAND BOROIIGII Ratios of Net Bonded Debt List Ten Fiscal Years Net Total Taxable Net Debt Per Fiscal Assessed Bonded Per Assessed Year Population . _ Value 'Debt . Capita Value 2005 13.693 (h) 783.907,451 33,080,509 2,416 4.22% 2006 13,457 (c) 783,907,451 31,264,429 2,323 3.99% 2007 13,664 (a) '805,681.814 29,163,349 2,134 3.62% 2008 13,954 (a) 835.525,537 34,957,269 2,505 . 4.18% 2009' 13,860 (a) 870,472,985 32,534,424 2,347 3.74% .2010 13,592 (a) 913.014,985 29,838,432 2,195 3.27% 2011 13,870 (a) 988,879,125 35,124,21,1 2,532 -3.55% 2012 14.041 (a) 1;039,223,833 33,510,913 2.387 3.22% 2013 13.824 (a) 1,085,968,280 55236.114 3.996 5.09% 2014 ' (a) 1;131,476,611 76,227,556 • • Sources: Information obtained froth assessment records and Borough general ledger except as otherwise noted. (a)Inforittation obtained from State of Alaska,Department of Coinntunity and Regional Affairs, Certified Population for Revenue Sharing Program. (b)Information obtained from State of Alaska,Department of Commerce,Community and Economic Development,Cohiinnity Database. (c),Information obtained from State of Alaska,Department of Labor, Economic Information. Note; 'Detail regarding the borough's outstanding debt can be found in the-notes to the-financial statements. Informations not available at report time 130 • Page 160 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Computation of Direct and Overlapping Debt June 30,2014 Percentage Kodiak Island Net Debt Applicable to this Borough Outstanding Governmental Share of (a) _ Unit(b) Debt(c) Kodiak Island Borough: General obligation bonds $ 76,264,598 100% $ 76,264,598 City of Kodiak: General obligation bonds 7,075,000 100%0 :7,075,000 Total $ 83,339,598 $ 83,339,598 (a) Gross debt outstanding less applicable amounts in the Debt Service Funds. (b) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to valuation of property subject to taxation in reporting unit. (c) Per Alaska Statute 29.45.090 there is a limit of 30 mills for ad valorem taxes. Per Alaska Statute 29.45.100 the limitation on maximum mill rate does not apply to taxes levied to pay bonds. Sources:Borough general ledger and City of Kodiak records. 1 • 131 Page 161 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITE M#2.A. itH • \d 5 ' ;} / \j ;!; ; Q \ } a: / d � |, S !1 . !! 3 ! _ \- \ ] I. \ \ / ! \! 8 ! Page 162 of 215 Review of the Comprehensive Annual Financial m 7F AGENDA ITEM #2.A. I KODIAK ISLAND BOROUGH Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures and Transfers Last Ten Fiscal Years Total General Ratio of Fund debt service Fiscal Interest Total debt expenditures to general year Principal(a) and fees service and transfers expenditures 2005 .1,780,417 983,195 2,763,612 12,027,717 23.0 2006 1,814,553 1,583,488 3,398,041 13,054,983 26.0 2007 2,100,361 1,329,456 3,429,817 13,337;188 25.7 2008 2,205,441 1,255,313 3,460,754 14,277,498 24.2 2009 2,495,056 1,571,295 4,066,351 15,922,441 25.5 2010 2,685,606 1,350,620 4,036.226 16,372,540 24.7 2011 2,750,690 1,287,822 4,083,335 . 17,065,960 23.9 2012 2,780,776 2,691,426 5,472,202 5,747,963 95.2 2013 2,966,441 1,244,233 4,210,674 6,933,972 60.7 2014 3,645,950 2,107,198 5,753,148 6,621,593 86.9 (a) Serial maturities in the case of serial bonds;annual Debt Service Fund requirements in the case of tens bonds. . Sources:Borough general ledger and debt documents. • 133 Page 163 of 215 Review of the Comprehensive Annual Financial Report (CAFR). • J3 N 0 0 s Co O O . 3 a KODIAK ISLAND BOROUC II = Ratios of Outstanding Debt by Type N last Ten Fiscal Years N tD D 7 Governmental Activities Business-type Activities co General Total Percent of, -n Fiscal Obligation Nines - ' .Revenue Notes Primary Personal Per 5 Year Bonds Payable Bonds Payable Government Income . Capita m m cT 2005 33,080,509 88,243 — 270,210 34.438,962 8.51% 2.515 d A 20O6 31.264.420 83,690 — .270,210 32.618.329 7.36 2.424 Co 2007 29,163,349 77.470 — ,636,924 30,877,743 - 6.57% 2.260 0 0 2008 34,957.269 72.028 — .768.660 36.797,957 7,47% 2,637 2009 32.534,424 66,505 — ,864,503 34,465.432 629% 2,487 p 2010 29,838.432 60.899 — ' .989.995 31.889,326 5.52% 2,346 T 2011 35,124.211 55,209 — _735,778 37,915.198 6.13% 2.734 X 2012 33.510,915 49,433 7,603,249 41,163.595 6.25% 2.932 2013 55,236.114 42,992 18.817.320 7.346.324 81,442.750 12.07% 5,891 • • 2014 76.227.556 37.042 18.703.498 10,206.895 105,174.991 Note: Detail regarding the Borough's outstanding debt can be found in the notes to the financial snatetnenls. • Information not available at report time. m to 0 m $ o to 134 TA c m 3 N In AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH • Demographic and Economic Statistics Last Ten Years Per Capita Percentage Calendar Personal Personal School Unemployment Year Population(a) Income(c) Income(c) Enrollment(b) Rate(c) 2005 13,693 443,300,000 33.969 2,678 8.3 2006 13,457 469,512,000 35,860 2,718 7.3 2007 13,664 506,398,000 38.733 2,636 6.0 2008 13,954 548,099,000 41.617 2.671 6.6 2009 13.860 577,818.419 41,690 2,598 7.2 2010 13,592 566,433.008 41,764 2,567 7.2 2011 13,870 638,588,670 46,041 . 2,543 6.9 2012 14,041 682,097,739 48,579 2,517 6.2 2013 13,824 674,666,496 48,804 2,513 5.8 , 2014 • 2.468 5.2 Soarers: t (a) State of Alaska,DCRA certified population. I (b) Alaska Dept of Education,Average Daily Membership by Fiscal Year at wwu,eedA atc,ak.uoaat4 (c) Bureau of Economic Analysis htnsJlss V.V.bea.gov • Information not available at report time. Borough Population and Student Count 1s,0co - % p & i 10,000 4 -yy a i 0 N I 5.600 tf h j N. 1# I _�(7 `I 1 4 i 15 . ... _EJ� 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 •Population(a) •School Enrollment 1 f 135 Page 165 of 215 Review of the Comprehensive Annual Financial Report(CAFR). • A o C 0 0 S- o 0 0 -p KODIAK ISLAND BOROUGH id Avenge Monthly limplovrcm&laming. m . Last len Fiscal Years 7 M CD Fiscal 2005 Eiea15'rar 3006 Ffstm Year 200; Fiscal Year Mb O ,'SoaR< A.(rage ,trmge Asmge Avenge Average Average Mtrame c Monthly Moodily Monthy Monthly Monthly. Monthly Monthly Monthly N f;mplmment Ev2071 Empl5.553 EYn1oA5 Fmp 5.616 F rning. Emp6nm3 Earnings T Total Industries 5.381 S 2,871 5553 5 2.926 5.616 5 3.060 -- 580.3 'S .3,111 7 Priv*OvesnMip 4,042 2.757 4.191 2.803. 1.160 2.979 4140 -3.006 N Total Government 1.339 3,214 1361 310(1 1456 3,291 1483 • 3,Y4 O Private Goods-Producing 1.659 2,245 1.691 2,412 2621 .605 1562 3,006 N PmmtSmimPmvidi� 2,38.7 2,243 2500 2,412 1,529 2.608 2.562 3,006 A CD '0 0 Fiscal Year 2009 Fiscal Year 2010 Fisnn'ear 2011 Fhcal sear 2012 n . Average 4.tree Avenge Avenge Avenge Avenge. Avenge ' .avenge D 3lonthk Manthy Monthly Al oath], Slnhthh Monthly Monthly 3mmhy TI Employment Earnings Employment Earnings Employment It Employ ne Earnings Total industries 5,961 S 3,100 5,961 5 3.100 6,416 S 3!62 6.461 t 5 3,408 Private Ownmship 4.485 2.956 1,485 .2.956 4.490 3.263 4.952 3,412 Total Government 1.475 3.538 1.475 3,538 1.518 3.681 1,501 3,742 Private Gondvliroducing 1.814 3210 1.814 3.290 2.111 3,619 2.193 3,801 Private Sen ice-Providing 2.671 2,730 2.671 2.730 2.785 2.993 2.760 3.101 Fiscal Year 2013 Roil Year 2014 Avenge Avenge Aserge ,'Sense Monthly SInnthls Month!, 51onthy Employment Earning. Employ men! Earrs Total Industie. 6.411 S 3.459 6.472 5 3.575 , Private Ommrship 4,928 3,350 5049 3,491 Total Government 1;183 3.795 1423 3,875 N Private Godv'l'mduwm 44 g 2:138 3.704 2219 3, 1 n Ca Private Service-Providing 2,790 1092 2830 3,224 CD m m 2 o 0 N n An 136 y 3 it NI n AGENDA ITEM#2.A. I s- RR -- a .-- _2 ' W. I' H--R- -- .. - =R5 - V22 S -- " p - RSA . oE':a R^ R3 " 9 - "r e7a a — g N e " H i° :is. L 81 j P ¢pII I f e 11. 1I ifl 4 . I 1 Ji11!tin 1flk111 111 PI 11111 - 1 lip Page 167 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Property Value,Construction,and Bank Deposits Last Ten Fiscal Years Construction Property Value* Commercial Residential Fiscal No.of No.of Deposits in year permits Value permits Value local banks Commercial Residential 2005 47 2,097,983 158 10,590,784 133,370,000 210,328,700 482,244,145 2006 30 1,555,718 192 10,372,416 141,434,000 213,258,488 497,589,811 2007 42 3,277,292 148 8,780,900 140,915,000 227,514,405 507,013,524 2008 53 25,269,361 129 7,875,188 139,416,000 275,369,008 542,272,3111 2009 50 34,081,887 147 7,848,428 175.141,000 312.122,205 595,391,145 2010 52 4,756,124 156 11,689,178 192,000,000 327,248,533 661 630,592 2011 46 24,165,884 158 6.666,400 194,289,000 317,950,418 721,273,415 2012 48 5,693,295 119 4,477,641 227,392,000 345.329,161 738,505,519 2013 59 85,969,566 160 5,649,717 230,391,000 364,353.810 767,122,801 2014 44 33,062,171 I 1 1 3,589,833 252,999,000 386.480,100 788,418,800 *Assessed value Sources:Borough assessing records and City of Kodiak building department and FDIC. Deposits in Kodiak Banks 300,000,000 ' 250,000,000 �,y, 200,000,000 F 1—r - lsa,aao,00a �, m s., I �f�. ,r • 100,000,000 1ao9,o90 .� i lit: : 1' 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 , 138 .-.+ r Page 168 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM#2.A. " R s p8 ry 19.4. • I :11:: =ab 3 § Act-NA Igg 14 1 OOP 1 Page 169 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AcNDaITEmg* : ! »® `: D` f© ms 10 ; x " £ )/ ; & — ; - / , , -- ! 2- — x 6r § ; »® © 2` /b° h \ ! / ! Q § !! 15 , , g ; / // - a! | \\ \\ \y} \ 2gQtg ;b %S P4E? /R \i /) /% /S! ) Page 170 of 215 Review of the Com ensive Annual Financial a 7 AGENDA ITEM#2.A. M rn aR -- �R - -- ---- u aR ilj M g- 8.1 I 11 s i 1 1 1 1 I— Fib ��, s ! .!i �4b � 1i1i1 S 9 ye j' g III . 2 II as • Page 171 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Federal and State Single Audit Reports and Supplementary Information Year Ended June 30, 2014 J ._1 Altman, Rogers CFFMFIED Ca I ACCOUNTANTS Page 172 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Federal and State Single Audit Reports and Supplementary Information Year Ended June 30,2014 Page 173 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Table of Contents ,pages Report Required Under Government Auditing Standards Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance Government with Auditing Standards 1-2 Report and Schedules Required Under OMB Circular A-133 Report on Compliance For Each Major Federal Program;Report on Internal Control Over Compliance;and Report on the Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 3-6 Schedule of Expenditures of Federal Awards 7 • Notes to'the Schedule of Expenditures of Federal Awards 8 Federal Schedule of Findings and Questioned Costs 9-11 Corrective Action Plan 12 } State Single Audit Report and Schedule Report on Compliance For EachMajor State Program;Report on Internal Control Over Compliance;and Report on the Schedule of State Financial Assistance Required by the State of Alaska Audit Guide and Compliance Supplement for State Single Audits 13-15 Schedule of State Financial Assistance 16-17 Notes to the Schedule of State Financial Assistance 18 State Schedule of Findings and Questioned Costs 19 Page 174 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • (This page was left blank intentionally) ■ • • Page 175 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. REPORT REQUIRED UNDER GOVERNMENT AUDITING STANDARDS Page 176 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. Altman, Rogers & Co• Ia wmrANrS Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with Goveinment Auditing Standards Independent Auditor's Report The Honorable Mayor and Members of the Assembly Kodiak Island Borough Kodiak,Alaska Ladies and Gentlemen: We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund and the aggregate remaining'fund information of Kodiak Island Borough, as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise Kodiak Island Borough's basic financial statements and have issued our report thereon dated December 31,2014. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Kodiak Island Borough's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,but not for the purpose of expressing an opinion on the effectiveness of Kodiak Island Borough's internal control. Accordingly, we do not express an opinion on the effectiveness Of Kodiak Island Borough's internal control. • A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. .A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 1 425 G Street Suite 500 Anchorage. Alaska 99501 Phone 907.274.2992 Fax 907.274.2993 Offices At Juneau are Sonotna A Professional Corporation Page 177 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. The Honorable Mayor and Members of the Assembly Kodiak Island Borough Our consideration of internal control was for the limited purpose described in the-preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However,material weaknesses may exist that have not been identified.. Compliance and Other Matters As part of obtaining reasonable assurance about whether Kodiak Island Borough's financial • statements are free from material misstatement,we performed tests of its compliance with certain provisions of laws,regulations contracts,and grant agreements,noncompliance with which could have a direct and material effect on the determination of financial statement amounts:-However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly,we do not express such an opinion.The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. • Purpose of this Report - The purpose of this report is solely to describe the scope of,our testing of,internal control and compliance and the results of,that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's jnternal control and compliance.Accordingly,[this communication is not suitable for any other purpose. • a/ Tar. /1 rtr. PI UU- Anchorage,Alaska __ CO/ • • December 31,2014 • • • • • • • 2 • Page 178 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • REPORT AND SCHEDULES REQUIRED UNDER OMB CIRCULAR A-133 • • • Page 179 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. Altman Rogers._ CSC (CERTIFIED }vrTJ PUBLIC ACCOUNTANTS Report on Compliance For.Each Major Federal Program; Report on Internal Control Over Compliance: and Report on theSchedule of Expenditures of Federal Awards Required bv_ OMB Circular A-133 Independent Auditor's Report The Honorable Mayor and Members of the Assernbly Kodiak Island Borough Kodiak,Alaska Report on Compliance for Each Major Federal Program We have audited Kodiak Island Borough's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Kodiak Island Borough's major federal programs for the year ended June 30,2014. Kodiak Island Borough's major federal programs are identified in the summary of auditors results section of the accompanying Federal Schedule of Findings and Questioned Costs. Kodiak Island Borough's basic financial statements include the operations of its component unit, Kodiak Island Borough School District, which received $5,493,151 in federal awards which are not included in the Schedule of Expenditures of Federal Awards for the year ended June 30, 2014. Our audit, described below, did not include the operations of Kodiak Island Borough School District because it was subjected to a separate audit performed in accordance with OMB Circular A-133. Management's Responsibility • Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. 3 425 G Street Suite 500 Anchorage. Alaska 9.9507 Phone 907-274.2992 Fax 907-274-2993 Offices in Juneau and Soldolna A Professional Carpo'alion Page 180 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. The Honorable Mayor and Members of the Assembly Kodiak Island Borough Auditor's Responsibility Our responsiblity is to express an opinion on compliance for each of Kodiak Island Borough's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance-with auditing standards generally accepted in the United States of America;the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations.Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Kodiak Island Borough's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Kodiak Island Borough's compliance. Opinion on Each Major Federal Program • In our opinion, Kodiak Island Borough complied, in all material respects, with the types of Compliance requirements referred to above that could have a direct and material effect on e ach of its major federal programs for the year ended June 30,2014. Other Matters The results of our auditing procedures disclosed an instance of noncompliance,which is required to be reported in accordance with OMB Circular.A-133 and which is described in the accompanying Federal Schedule of Findings and Questioned Costs as Finding 2014 701. Our Opinion On each major federal program is not modified with respect to this matter. Kodiak Island Borough's response to the noncompliance finding identified in our audit is described in the accompanying Federal Schedule of Findings and Questioned Costs and Corrective Action Plan. Kodiak Island Borough's response was not subjected to the.auditing Procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. 4 Page 181 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. The Honorable Mayor and Members of the Assembly Kodiak Island Borough Report on Internal Control Over Compliance Management of Kodiak Island Borough is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning end performing our audit of compliance,we considered.Kodiak Island.Borough's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we de not express an opinion on the effectiveness of Kodiak Island Borough's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their Cosigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.A material weakness in'internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance,such that there is a reasonable possibility that material noncompliance with a type of • compliance requirement of a federal program will not be prevented,or detected and corrected,on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance,yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to Identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies, and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to°be material weaknesses. However, we identified a certain deficiency in internal control over compliance, as described in the accompanying Federal Schedule of Findings and Questioned Costs, as Finding 2014-001 that we consider to be a significant deficiency. 'Kodiak Island Borough's response to the internal control over compliance finding identified in our audit is described in the accompanying Federal Schedule of Findings and Questioned Costs and Corrective Action Plan. .Kodiak Island Borough's response was not subjected to the auditing procedures applied in'the audit of compliance and, accordingly, We express no opinion on the response. The purpose of this reporter) internal control Over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. 5 } Page 182 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. The Honorable Mayor and Members of the Assembly ' Kodiak Island Borough Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 1 We have audited the financial statements of Kodiak Island Borough as of and for the year ended • June 30:2014, and have issued our report thereon dated December 31, 2014, which contained an unmodified opinion on those financial statements.Our audit was conducted for the purpose of forming opinions on the financial statements as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying • accounting and other records used to prepare the basic financial statements.The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures,including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures-in accordance with auditing i standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures'of Federal Awards is fairly stated in all material respects in relation-to the financial statements as a whole. • Anchorage,Alaska December 31,2074 • • • • • 6 Page 183 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK 15LA6D BOROUGH Schedule of Expenditures of Federal Awards Year Ended June 30.2014 Federal Pass-Daough Program CFDA • Grantor's or Award Federal Nuinbei • .Award Number - Amount Expenditures .U.S.Department of Homeland Security- Passed through Die State of Alaska, Department of Miftary and Veteran Affairs: 2012 State Homeland Security Program 97.067 EMW:2012-SS-00127 f 31,651 31.651 Bioplug Sergeant Creek 97.036 DR-1865-AK. 30,851 80 Pananeroff Creek utierts 97.036 FEMA 1865-1DR-AK 22,998 i 1,276 Total U.S.Department of Homeland Security 85,500 . 33,007 Denali CarisaJon- D6ect Programs- Mton Larsen Dock Replacement 90.100 01402-01 80,000 51,283 U.S.Depatment of Housing and Urban Development: Direct Program- . FY 2009 EDI Special Project 14.251 B-09-SP-AK-0288 475.000 101,617 .Passed through Kodiak Island Housing Autlrofily- Payments In Lieu of Taires 14.867 None 23.329 23.529 Passed through Alaska Housing Finance Corporation- Payment in Lieu ofTaxes 14.881 -'None 15,654 . 15,654 Total US DepaMmenl of Haring and Urban Development 514,183 .140,800 U.S.Department of the Interior. 'Direct Programs: Payments In Lieu of Taxes(BLM) 15.226 None 1601.969 1.501,969 Refuge Revenue Sharing 15.659 None 205.518 205,518 . .1,707,487 . 1,707,487 Passed through Kodak Soil and Water Conservation District- Lake Orrin Ash Paggage Project 15.631 F13AC00878 40.000 .1 095 Total U.S.Department of the Interior `1,747,487 1.708.582 U.S.Envlrorvrlentaf Protection Apency- -Passed through the State of Alaska. DepaMrent of EnvIronmental Conservation: Alaska Clean Water Revolving Coin Funds 68.458 Loan I 505041 11,787,792 1.955,680 Alaska Clean Water Revolving Loan Funds 68.458 Loan 0 505061 1,500,080 375,468 Total U.S.Env ronomental Protection Agency ' 13.287,792 ' 2.331.348 Total federal financial assistance S 15.714.962 -,4.265.020 Reearcawton to federal Source revenues In the Statement of Revenues, Expenditures and Changes In Fund Balances: Total Federal Anarxdal assistance S 4285,020 Clean Water Revolvi g Levan Funds am not treated as revenues in - the financial statements:however,are required to be presented on this schedule In armidance with OMB Circular#133. The loans are recorded in the Business-rype actM0es and Enterprise funds. (2,331,348) S 1,933,672 See accompanying notes to Schedule of Expenditures of Federal Awards. 7 Page 184 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. 1 (This page was left blank intentionally) I { I Page 185 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30,2014 (1) Basis of Accounting The schedule of expenditures of federal awards includes the federal grant activity of Kodiak Island Borough and'is presented on the modified accrual basis of accounting. The information in this schedule is presented In accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and NomProfit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. (2) Reporting Entity The Kodiak Island Borough,for purposes of the supplementary schedule of expenditures of federal awards includes all the funds of the primary govemment. It does not include the component unit of the Kodiak Island Borough as follows: • The Kodiak Island Borough School District • The Kodiak Island Borough's basic financial statements include $5,493,151 in federal awards expended for the Kodiak Island Borough School District, a component unit of the Kodiak Island Borough. These monies are excluded from this schedule. Separate reports on compliance and internal control dated Novernber 14, 2014, were issued for the Kodiak Island Borough School District. (3) Pass-Through Funds The Borough did not pass any federal funds through to subrecipients during the year ended June 30,2014. (4) Non-Cash Awards During the year ended June 30, 2014, the Borough received no federal awards in the form of non- cash awards. (5) Retalnages Payable Retainages payable on contracts are not charged to the grants until they are paid to the contractor. Accordingly,expenditures exclude amounts payable for retainages on contracts. 8 Page 186 of 215 Review of the Comprehensive Annual Financial Report (CAFR). • • AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Federal Schedule of Findings and Questioned Costs Year Ended June 30,2014 Section I- Summary of Auditor's Results l I Financial Statements Type of auditors report issued: Unmodified Is a going concern emphasis-of-matter paragraph • included in the audit report? _ Yes X No Internal control over financial reporting: Significant deficiency(ies)identified? Yes X No Material weakness(es)identified? Yes X . No Noncompliance material to financial statements noted? Yes X - No Federal Awards Internal Control over major programs(Section.510(a)(1)): Significant deficiency(ies) identified? X Yes No • Material weaknesses)identified? _ Yes 'X No Any material noncompliance with provisions of laws, regulations,contracts,or grant agreements, related to a major program(Section.510(a)(2))? Yes X No Type of auditor's report issued on compliance for major programs:• Unmodified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section.510(a)(3)Or(4)? _ Yes X No Identification of major programs: • CFDA Number(s) Name of Federal Program or Cluster 66.458 Alaska Clean Water Revolving Loan Funds 14.251 EDI Special Project FY2009 Dollar threshold used to distinguish between Type A and Type B programs: $ 300.000 Auditee qualified as low-risk auditee? _ Yes -X No 9 Page 187 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Federal Schedule.of Findings and Questioned Costs,Continued Section II-Financial Statement Findings The Kodiak Island Borough did not have any findings that related to the financial statements. Section 111-Federal Award Findings and Questioned Costs finding 2014-001 Lack.of Internal Control over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency/ Noncompliance Federal Agency: U.S.Department of Housing and Urban Development Program: FY 2009 EDI Special Project Award NumberICFDA No.: B-09-SP-AK-0288;CFDA No.14.251 Award Year 2009 Condition: During our audit work over allowable costs, we noted that $6,038 of salaries and administrative overhead were charged to the grant. . Criteria: •Provisions of the grant agreement state that",..no unobligated funds.for EDI grants may be used for any purpose except acquisition, planning, design, purchase of equipment, revitalization, development or construction.' Context: The number of transactions weretrelatively few compared to the program total. ,After the error was discovered the costs were moved to.the General Fund and are not reported in the program for financial statement purposes in FY 2014. The Borough lies set aside funds equivalent to the amount of unallowed costs already reimbursed.and earmarked these funds for future allowable grant expenditures in FY 2015. Cause: Lack of internal control over allowable costs. .Effect: Unallowed or questioned costs may lead to the granting agency requesting repayment of funds disbursed, withdrawal of the grant entirely,or.a reduction in future funding from the agency. 10 Page 188 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. • KODIAK ISLAND BOROUGH Federal Schedule of Findings and Questioned Costs,Continued Questioned Costs: None. The unallowed costs Were moved to the General Fund once the error was discovered. Recommendation: We recommend the Borough finance personnel carefully review specific • grant budgets and requirements to ensure unallowed costs are not charged to federal grant programs. • Management's Response: Management concurs with the finding. See corrective action plan. Section IV—Summary of Prior Audit Findings Financial Statement Findings Finding 2013-001 Internal Control over Leases •Significant Deficiency Condition: During our audit work over lease revenue associated with the Kodiak Fisheries Research Center(KFRC),we noted that the Borough does not have adequate internal control procedures in place to monitor leases. Status: This finding has been resolved. Finding 2013-002 Internal Control over Construction Work In Progress Material Weakness Condition: During our review of capital assets it was noted that the balance in construction work in progress (WIP) was overstated as it included construction projects that had been completed in FY12. Status: This finding has been resolved. • 11 Page 189 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH,ALASKA Corrective Action Plan Year Ended June 30,2014 • Finding 2014001 Internal Control over Activities Ailowed or Unallowed and Allowable Costs I Cost Principles Name of Contact Person: Karleton Short,Finance'Director Corrective Action: We will ensure that all grant award documents are reviewed to ensure that the Borough Is aware of allowable costs under each award. We will also perform budget'to actual checks when submitting financial reports to ensure that budget line items have not been exceeded. Proposal Completion Date: immediately. 12 Page 190 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. • • (This page was left blank intentionally) Page 191 of 215 • Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. STATE SINGLE AUDIT REPORT AND SCHEDULE Page 192 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. Alt nan, Rogers • /� 9 ^ I PUBLIC &;-9(W^ W1BLK ACCWMA,m Report on Compliance For Each Major State Program; Report on Internal.Control over Compliance; and Report on the Schedule of State Financial Assistance Required bV the • State of Alaska Audit Guide and Compliance Supplement for State Sinrrle Audits Independent Auditors Report The Honorable Mayor and Members of the Assembly Kodiak Island Borough Kodiak,Alaska Report on Compliance for Each Major State Program We have audited Kodiak Island Borough's compliance with the types of compliance requirements described in the State of Alaska Audit Guide and Compliance Supplement for State Single Audits that could have a direct and material effect on each of Kodiak Island Borough's major state programs for the year ended June 30, 2014. Kodiak Island Borough's major state programs are identified in the accompanying Schedule of State Financial Assistance. Kodiak Island Borough's basic financial statements include the operations of its component unit, Kodiak Island Borough School District,which received$38,993,884 in state awards which are not included in the Schedule of State Financial Assistance during the year ended June 30,2014. Our audit, described below, did not include the operations of Kodiak Island Borough School District • because it was subjected to a separate audit performed In accordance with the State of Alaska Single Audit Guide and Compliance Supplement for State Single Audits. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts,and grants applicable to Its state programs. Auditors Responsibility Our responsibility is to express an opinion on compliance for each of Kodiak Island Borough's major state programs based on our audit of the types of compliance requirements referred to above. 425 G Street Suds 500 Anchorage, Alaska 99501 Pnone 907-274.2992 Fax 907-274.2993 Offices in Juneau and Soldoou 13 A Professional Corporation Page 193 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. The Honorable Mayor and Members of the Assembly Kodiak Island-Borough We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the Unite States; and the State of Alaska Audit-Guide and Compliance Supplement for'State Single Audits. Those standards and the Stale of Alaska Audit Guide and Compliance Supplement for State Single, Audits require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major state program occurred. An audit includes examining, on a test basis, evidence about Kodiak Island Borough's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides.a reasonable basis for our opinion on compliance for each major state program. However our audit does not provide a legal determination of Kodiak Island Borough's compliance. •Opinion on Each Major State Program In our opinion, Kodiak Island Borough complied, in all material respects,..with the types of compliance requirements referred to above that could have a direct and material effect on each of its major state programs for the year ended June 30,2014, Report on Internal Control over Compliance Management of Kodiak Island Borough is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance,we considered Kodiak Island Borough's internal control over compliance with the types of requirements that could have a direct and material effect on each'major state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major state program and to test and report on internal control over compliance in accordance with the State of Alaska Audit Guide and Compliance Supplement for-State Single Audits, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do'not express an opinion on the effectiveness•of Kodiak Island Borough's internal control over compliance. • A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a state program on a timely basis. A material weakness In internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance,such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a state will not be prevented,or detected and corrected,on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in intemal control over compliance with a type of compliance requirement of a state program that is less severe than a material weakness in internal control over compliance,yet important enough to merit attention by those charged with governance; 14 Page 194 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. The Honorable Mayor and Members of the Assembly Kodiak Island Borough Our Consideration of internal control over compliance was for the limited purpose described in the .first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be Material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider'to be material weaknesses.However, material weakne sec may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the State of Alaska Audit Guide and Compliance Supplement for State Single Audits.Accordingly,this report is not suitable for any other purpose. Report on Schedule of State Financial Assistance required by the State of Alaska Audit Guide and Compliance Supplement for State Single Audit We have audited the financial statements of Kodiak Island Borough as of and for the year ended June 30, 2014, and have issued our report thereon dated December 31, 2014, which contained an unmodified opinion on.those financial statements. Our audit was conducted for the purpose of • forming opinions on the financial statements as a whole. The accompanying Schedule of State Financial Assistance is presented for purposes of additional analysis as required by the State of Alaska Audit Guide and Compliance Supplement for State Single Audits and is not a-required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of State Financial assistance is fairly stated in all material respects in relation to the financial s-atemeents�/ass a Whole.Stf nnO C/ Anchorage,Alaska December 31,2014 1e • Page 195 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. (This page was left blank intentionally) • • • • Page 196 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Sdiedute of State Financial Assistance Year ended June 30,2014 Prograzn Program or Award 'State Number Amount Expenditures . Department of Commerce,Community and Economic Development- Direct Programs: • Community Revenue Sharing None $ 731,314 731,314 Anton Larsen Dods 12-0C-388 2,000,000 7,830 ▪ Emergency School Generators 12-DC-625 2,182,000 600,688 Women Bay Tsunami Emergency Shelter 12-DC-390 1,025,000 7,317 1 Women Bay Playground Upgrades 13-0C-134 100,000 7,130 Tsunami Sirens,Upgrades.Replacements,Additions 07-OC-329 100,000 4.030 Chiniak Warning Siren 12-0M-109 45,000 475 • Lantl00 Expansion Grant "13-00547 3,006000 794,038 • Long Tenn Care Fac8ty Planning and Design 12-0C-389 1,275,000 215,000 ▪ Landfill Leachate Treatment Plant 7 Related Phase Ill 14-00074 4,529,000 4,529,000 Fire Protection Area No.1 Emergency Generator 13-0A4185 40,000 20,114 • Kodiak High School Vocation and Physical Education Fealties 13-00-604 7,000.000 5.816,726 Total Department of Community and Econornlc Developnleht 22,027,314. .__ 12.733,662 Department of Adminabatlon- • Direct Programs: • HB 65 PERS Supplement on-behalf payment None 463,333 463,333 • Motor Vehicle Tax None 253,230 253,230 716,563 716.563 •I Department of Education and Early Development- . Direct programs- • Debt Retirement Program None .3.347 517 3,347,517 ! Department of Revenue: Direct Programs: • Fisheries Business Tax None 1,546,308 1,546,308 n Commercial Passenger Vessel Tax Non 4,600 4.600 I Fisheries Resource Landing Tax None 97,679 97,679 TelephoneiEkcbk Tax None 15,792 15,792 Liquor tome None 220. 220 Total Department of Revenue 1,684,599- 1,684,599 I 1 Department of Em romrordal Conservation- Direct Programs: • Clean Water Revolving Loan Funds 505041 None 2,675,758 441,902 Clean Water Revolving Loan Funds 505061 None - 1,500,000 374,532 Total Department of Environmental Conservation -4.175 756 816,434' (continued) 16 . Page 197 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Schedule of State Financial Assistance,contiriued Program Program or Award Number Amount Expenditures Department of Military and Veterans Affairs: 'Direct Programs local Emergency Planning Committee 14LEPC-GR35602 .5 13,430 - 13,430 Panamaroff Creek Culverts FEMA-1665-DR-AK _ 7,666 _425 Total Department of Military and Veteran Affairs 21,096 13,855 • Total Slate of Alaska 5 31,952,845 19,292,630 • Reconciliation to State of Alaska revenues in the SIatement of Revenues, Expenditures,and Changes in Fund Balances: Total Slate financial assistance $ 19.292.630 State awards included In this schedule that are recorded in the Business-type activities: Landfill Eansion Grant 13-DC-547 (794,038) Long Term Care Facility Planning end Design 12-DC-389 (215.000) Landfill Leacliate Treatment Plant 7 Related Phase Ill 14-DC-074 (4,529,000) Clean Water Revolving Loan Funds received in the current year are not treated as revenue In the financial statements ;however, they are required to be presented on this schedule by the State of Alaska Audit Guide and Compliance Supplement for State Single-Audits. The loan is recorded in the Business-type activities and Enterprise Funds. (818,434) S 12,938,158. See accompanying notes to the Schedule of State Financial Assistance. • • • 17 • Page 198 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH Notes to Schedule of State Financial Assistance Year Ended June 30,2014 (1) Basis of Accounting This schedule was prepared on the modified accrual basis of accounting. (2) Reporting Entity The Kodiak Island Borough, for purposes of the supplementary Schedule of State Financial Assistance includes all the funds of the primary government It does not include the component unit of the Kodiak Island Borough as follows: The Kodiak Island Borough School District The Kodiak Island Borough's basic financial statements include $36,993,884 of State of Alaska funds expended for the Kodiak Island Borough School District,a component unit of the Kodiak Island Borough. These monies are excluded from this schedule. These monies were subjected to State of Alaska single audit procedures and are subject to separate reports issued for the Kodiak Island Borough School District dated November 14, 2014. (3) 'Major State Programs for Compliance: State Revenue Sharing Emergency School Generators Clean Water Revolving Loan Funds 505041 Clean Water Revolving Loan Funds 505061 Landfill Expansion Grant Long Term Care Facility Planning and Design Kodiak High School Vocational and Physical Education Facilities HB 65 PERS On-behalf Payment Motor Vehicle Tax Debt Retirement Program Fisheries Business Tax Landfill Leachate Treatment Plant 7 Related Phase III 18 Page 199 of 215 Review of the Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.A. • (This page was left blank intentionally) . I 1+ ' t i Page 200 of 215 Review of the Comprehensive Annual Financial Report (CAFR). • AGENDA ITEM #2.A. KODIAK ISLAND BOROUGH State Schedule of Findings and Questioned Costs Year Ended June 30,2014 Section I-Summary of Auditor's Results Financial Statements Type of auditors report issued: Unmodified Internal control over financial reporting: Material weakness(es)identified? _ Yes X No Significant deficiency(ies)identified? Yes X No Is a material noncompliance disclosed? Yes X No State Financial Assistance Internal control over major programs: Material weakness(es)identified? _ Yes X No Significant deficiency(ies)identified? _ Yes. X No Type of auditors report issued on compliance for major programs: Unmodified- Dollar threshold used to distinguish a state major program: $ 100.000 Section II-Financial Statement Findings The Kodiak Island Borough did not have any findings that related to the financial statements. Section III-State Award Findings and Questioned Costs The Kodiak Island Borough did not have any findings that related to State awards. Section IV-Summary of Prior Audit Findings The Kodiak Island Borough did not have any prior year findings related to State awards. See Federal Schedule of Findings and Questioned Costs for status of prior year financial statement findings. 19 Page 201 of 215 Review of the Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.B. • e•Builder KHS Addition & Renovation KHS 10021 Potential Change Order:163:#164 Subject: _ Learning Center Vermiculite Author: Carlson, Brent,Watterson Construction Co Priority: High Date Created: 03.25.2015 11:47AM Held By: Walter,Bruce,Wilson Engineering Inc. •Status: 0.3d late Date Due: 03.26.2015 Date Closed: PCO ft: 163 Referenced Spec/Drawing: Volume 6-"H"drawings Referenced DC or RFI: RFI 557 Reason for Change/Description During abatement and demolition of the Learning Center,it was discovered that the hollow cells of the CMU block walls scheduled to be removed,contained vermiculite insulation.It has been determined,per the latest RFI 557 response,to abate the vermiculite as Class 1 asbestos. Please note CEI's equipment standby rates of$2,053/day.Total standby cost will be figured after approval of this PCO.Costs will be added in to the total,when the number of standby days are determined. Contractor Quote: 210169 _Agreed Amount: 0 • Open Amount: 0 Days Added: TO BE COMPLETED BY OWNER A/E Approval Status: A/E: Comments: Owner Approval Status:. Owner/Owners Rep: Comments: CC list: Bill Clay,Jensen Yorba Lott Dan Fabrello,Jensen Yorba Lott, Inc. Matt Gandel,Kodiak Island Borough K115 10021 Potential Change Order KHS Addition&Renovation 4:43:46 PM,3/26/2015 Page 202 of 215 Discussion on Approval of Change Order No. 42 Amending Contr... AGENDA ITEM #2.B. Ella Landry,Watterson Construction Company,Inc. Shawn Morgan,Watterson Construction Co Rick Parkhurst,Watterson Construction Co Kathie Peters,Kodiak Island Borough Comments Comment By:Dan Fabrello,Jensen Yorba Lott,Inc. 03.25.2015 11:54AM CC: Dan Fabrello(DFabrello)requested an external comment via email from: rfrench@ehs-alaska.com Bob, Please review PCO related to Learning Center abatement asap. Thanks, Dan - 3/25/15 Respond by date is 03.30.2015 Form Filled Out By:Brent Carlson,Watterson Construction Co 03.25.2015 11:47AM CC:Bill Clay,Dan Fabrello,Matt Gandel,Ella Landry,Shawn Morgan,Rick Parkhurst,Kathie Peters Page 203 of 215 Discussion on Approval of Change Order No. 42 Amending Contr... 0 Cc 0 0 0 0 D 0 a 3 CHANGE,E.STINIATE TAKE-OFF . m o Contractor WATTERSON CONSTRUCTION CO. Project No. 10021 0 g Project Name. KODIAK HIGH SCI1OO1. PCO No.: 163.Abate Learning Center Vermiculite o ° O 0 Prepared by. Brent Carlson Date: 1/252015 a A Equipment and Materia M l Cost - Labor anhoors Cost aGeneral Conditions labor Total Hourly Total Total line a Administration&Incidentals Quoit. Unit Unit Cost Total Cost Wage$ Burden S Rate S Hours Labor Cost N y Asbuilt 50.00 591.56 1 591.56 592 CD SO NI $91.56 50.00 SO m _ $000 591.56 $000 50 a Materials&Labor ° Final Air Clearances-White I Ea. 5785.00 578500 591.56 $0.00 5185 a Supply Forklift 3 Day 550000 $1,50000 591.56 $0.00 51,500 0 Ea. $0.00 5000 591.56 50.00 .50 O Ea. 5000 $000 591.56 $000 50 O Ea. $0.00 5000 $91.56 5000 50 1 Sub Total 5_28500 59156 S� 2}]) 15%Overhead and Profit Direct Costs 5356 General Contractor Totals $2,133 • Subcontractor Costa CEI 1 LT $19169100 $19169100 • 5191691 O LT 5000 50.00 $0 Subcontractor Totals 5191,691 8%Overhead&Profit on Subcontractor 1 $13,335 Sub Total S207,759 MI Bond Cost at.71% . $1,475 0 o Insurance Cost at.45% 59)5 ' g TOTAL 5210,169 0 F. u 7 AGENDA ITEM #2.B. Brent Carlson Subject FW:K115 RFI#557-Learning Center-Vermiculite in wall cavities • From:Jacques,Stuart fmailto:stuartracei-alaska.conl) Sent:Tuesday,March 24,2015 5:27 PM To: Brent Carlson Cc:0; Rush, Mick Subject: KHS RFI # 557-Learning Center-Vermiculite in wall cavities Brent, In response to your request,CEI is submitting a cost proposal for the scope of work as described in RFI#557 related to the discovery of vermiculite insulation within the wall cavities of the interior and exterior load bearing CMU walls scheduled for demolition at the Learning Center.We have verified that the loose and friable vermiculite is located within the hollow cells of the exterior CMU walls and the interior load bearing CMU wall scheduled for demolition.As directed by the Owner and in accordance with EPA recommendations,this vermiculite must be removed as an asbestos abatement activity prior to demolition of these walls.This cost proposal is based on the general means and methods discussed during the March 23,2015 teleconference with the Owners representatives and as described in the Owners 3- 23-15 revised responses to RFI#557.This cost proposal is valid only on approval of the Contractors revised Work Plan. CEI will not proceed with any work related to this changed condition until we have received written acceptance of •the Work Plan and cost proposal and authorization to proceed. Revised Work Plan: $1,500 Labor: 1036 MH(8 men-10 hr/day @ 13 work days)@$81.71 per MH $84,652 Supervision-150 MH(I man-10 hrs/day@ 15 days)@$84.69 per MH $ 12,704 Per Diem—10 men(8 man crew,supervisor,air tech)10@ 13 days/6 @7=152 days @$75/day= $11,400 Materials—(Poly,disposal bags,lumber,PPE,fasteners,adhesives,tape etc..)includes freight $11,191 Equipment-(Neg air units,trucks,power tools,skid steer,boxers,mini excavator,etc..) $8,880 Air fares-10 men(8 man crew,supervisor,air tech)@$642 ea $6,420 Travel-10 men(8 man crew,supervisor,air tech)@ 8 hr+80 MH @ 81.71 $6,536 Air Monitoring—13 days @$785 per day $10,205 Disposal of Vermiculite and contaminated CMU(48 Cyds)@$275 per CY including transport $13,200 Subtotal: $166,688 Page 205 of 215 Discussion on Approval of Change Order No. 42 Amending Contr... AGENDA ITEM #2.B. Mark-up 15% $25,003 Total RFI q 557 Cost Proposal; $191,691 If you have any questions regarding this cost proposal,don't hesitate to contact me. Stuart M.Jacques President Central Environmental,Inc. 311 N.Sitka St. Anchorage,AK 99501 (907)561-0125 (907)561-0178 Stuart@cei-alaska.com • 2 Page 206 of 215 Discussion on Approval of Change Order No. 42 Amending Contr... AGENDA ITEM #2.B. Brent Carlson Subject: FW:KHS RFI#557-Learning Center-Delay impact From:Jacques,Stuart(mailto:stuartralcei-alaska.com] Sent: Wednesday,March 25, 2015 10:07 AM To: Brent Carlson Cc: (); Rush,Mick Subject: KHS RFT #557-Learning Center-Delay Impact Brent, As you are aware,as of yesterday CEI has completed all of the hazardous materials abatement and interior demolition identified in the Contract documents in the portion of the Learning Center scheduled for demolition.But for the discovery of asbestos containing vermiculite within the CMU walls of the structure(see RFI#557),CEI was fully prepared to proceed with the demolition of the structure today.We are currently on standby pending further direction from the Owner regarding the abatement of the vermiculite prior to demolition.In an effort to mitigate standby costs to the Owner,CEI immediately demobilized our crew from Kodiak.However,the heavy equipment scheduled for use related specifically to the Learning Center demolition remains on site on stand-by pending further direction from the Owner.This equipment is not required or scheduled for any other use on the project other than for the Leaning Center demolition.The following demolition equipment is on stand-by: Cat 320 Excavator: Daily rate:$1000 @50%standby=Daily standby rate: $500 4000#Hydraulic demolition Hammer: Daily rate:$2000 @50%standby=Daily standby rate: $1,000 Semi-Tractor: Daily rate:$555 @50%standby=Daily standby rate: $278 Semi-end dump trailer: Daily rate:$250 @50%standby=Daily standby rate: $125 2 each 120 Cubic Yard live floor trailers: Daily rate:$300 @50%standby=Daily standby rate: $150 These items of equipment were scheduled to be demobilized from Kodiak immediately following the demolition of the Learning Center. In a further effort to mitigate impacts to the Owner regarding this additional work,CEI responded to the Owners revised request for pricing of RFI#557 within 24 hours of receipt.Since we did not know how long the Learning Center demolition work will be delayed,we did not Include any demolition equipment delay costs in the RFI#557 cost proposal.We did include the cost to re-mobilize the crew to the site in the RFI#557 cost proposal. If you have any questions regarding this issue,don't hesitate to contact me. Stuart M.Jacques President Central Environmental,Inc. 311 N.Sitka St. Anchorage,AK 99501 (907)561-0125 (907)561-0178 • Page 207 of 215 Discussion on Approval of Change Order No. 42 Amending Contr... C. iA 0 C N N O J O Prn(difO Kiii : KHS Addition and Renovation a , B0120102: - Project No.10021 o -.—NI; - _ March 26,2015 o _ • n . m 0 Line Item Description 4 Current Budget LTD Expenses Obligated Remaining_ a N 460-533-10021-1 CM by Consultant $ 1,335,155.00 $. 816994.70 $ 422,836.70 $ 96,023.60 Z 9 460-533-10021-3 Site Investigation $ - $ 5,929.50 $ - $ (5,929.50) a 0 460-533-10021.4 Design $ 6,739,369.00 $ 5,924,692.11 $ 701978.29 $ 112,898.60 1. to 460-533-10021-5 Construction $ 66,757,750.00 $.48,741,226.70 $ 15,879,837.30 $ x.2,136,686.00 O a m ' 460-533-10021-6 Equipment $ 2,000,000.00 $ 591,472.09 $ 1,228,933.75 $ 179,594.16 n 460-533-10021-7 Admin - A $ 1,300,000.00 $ 765,365.85 $ - $ 534,634.15 o o 460-533-10021-8 Aft $ 667,578,00 $ 327,553.63 $ 316,617.09 $ 23.407.28 1460-533-452,190-9 Contingency $ 1,679,157.00 $ - $ - $ 1,679,157.00 Totals C;b'r- „. $ 80,470'69.06 57,172,534_58 I$u T8,550,003.13'1$4,756,471.29` n to N m 2 ° N n N m it N B1 ...4,100 aupW gory it ON/WO*duryO le I.n uddy uo oolongs Gino tot sod �_ 1' •' 9g�A e e -l III L..111 1 `</A l(7O i � riidd III �I i ,N , '" !� Of f II •12 11/ ., 1 ,Z I,;P j i Ami "� ', .;!' ray '�c __a ,i-: 121 II #1 rl - 1 v. '„ 1 —_T ,? a te , =/ ,�.7 = i_717 i 5i VI , ' ',__ Vv�` t'';." n,> — �- rII � , V it,--",' — 11 =:cll. 'I - _t: x\ tJ ;= ri ,/L� .v v �� And\ , jf/—'",,,<-1.1�� _. 1 I ,' I fir a , I'.,.i :,;/ -mil _._,.,._--- i t' e Zvi ,. /'`. \ , 4 o i� 1�� C\ 1,..)..r. `, — fr 1 v , `s ., 0 ..,, 4N �. / A •Q IJ 1 11. I ' (j9 ,t ' Y/ .I r . Y \"p.� i I\\ i ! \ I -"y \ ,k . n II di I WM Kodiak Island Borough I Ili© 4 a 9 rfgi 1 School District 11'13 II i gK1.11�� ;4 I Kodiak High School Renovation ill Id • 1{(1[[�j 1 p °+h �� Ksa AIRS. £II :Q e 1 lilt O Qu 0E.EM '07ft W31l VON3OV AGENDA ITEM #2.B. Protect Your Family from Asbestos-Contaminated Vermiculite Insulation I Asbestos I US EPA Page 1 of 3 Menu Protect Your Family from Asbestos-Contaminated Vermiculite Insulation This page provides important information on how to protect yourself and your family if you suspect that you might have vermiculite insulation from Libby, Montana. • What is Vermiculite • Concerns About Asbestos-contaminated Vermiculite Insulation • Identifying Insulation That is Made From Vermiculite • Risk of Exposure to Asbestos If You Have Vermiculite Insulation • Concerns About Exposure I f Your Family Removed or Handled Insulation That Contained Asbestos • If You Have Vermiculite Insulation What is Vermiculite Vermiculite is a naturally-occurring mineral composed of shiny flakes,resembling mica. When heated to a high temperature, flakes of vermiculite expand as much as 8-30 times their original size.The expanded vermiculite is a light-weight, fire-resistant,and odorless material and has been used in numerous products, including insulation for attics and walls. Sizes of vermiculite products range from very fine particles to large(coarse)pieces nearly an inch long. Concerns about Asbestos-contaminated Vermiculite Insulation A mine near Libby,Montana,was the source of over 70 percent of all vermiculite sold in the United States from 1919 to 1990.There was also a deposit of asbestos at that mine,so the vermiculite from Libby was contaminated with asbestos.Vermiculite from Libby was used in the majority of vermiculite insulation in the United States and was often sold under the brand name Zonolite.If you have vermiculite insulation in your home,you should assume this material may be contaminated with asbestos and be aware of steps you can take to protect yourself and your family from exposure to asbestos. Identifying Insulation That is Made From Vermiculite Look at the photos on this website and then look at the insulation without disturbing it.Vermiculite insulation is a pebble-like,pour-in product and is usually gray-brown or silver-gold in color. The following photographs show typical vermiculite insulation. http://www2.epa.gov/asbestos/protect-your-family-asbestos-contaminated-vermiculite-insulation 3/31/2015 Page 210 of 215 Discussion on Approval of Change Order No. 42 Amending Contr... AGENDA ITEM #2.B. Protect Your Family from Asbestos-Contaminated Vermiculite Insulation I Asbestos I US EPA Page 2 of 3 SKEW t `t t _ � "'�, f:i1Y 4 ; " .1: 21, T ypical insulation between Different sizes of Typical vermiculite Vermiculite attic joists insulation article vermiculite vermiculite insulation p particles insulation size relative to paper clip You should assume that vermiculite insulation is from Libby and treat the material as if it contained asbestos by not disturbing it or by using a trained professional if it needs to be removed. Since the Libby mine was estimated to be the source of over 70 percent of all vermiculite sold in the United States from 1919 to 1990 and vermiculite from Libby was contaminated with asbestos,further testing is not necessary to take the appropriate precautions. While you can hire a trained professional to test your attic for asbestos,this may be expensive and,depending on the methods used,might give you erroneous results. We do not recommend that you open your walls to check for vermiculite. Risk of Exposure to Asbestos If You Have Vermiculite Insulation Asbestos causes cancer and other diseases.There is no known safe level of asbestos exposure.Asbestos fibers must be airborne to cause a health risk through inhalation,so the first step is not to disturb the material,which would release more fibers into the air. If you remove or disturb the insulation,it is probable that you may inhale some asbestos fibers-the degree of health risk depends on how much and how often this occurred.If you do not go into your attic,handle,or disturb the insulation,it is likely that you will not be exposed to asbestos fibers from vermiculite insulation. Also,you need to consider if any disturbance of the insulation-possibly by a contractor doing work in you attic- may result in the fibers being deposited into other areas of your house where an exposure might be possible. Concerns About Exposure If Your Family Removed or Handled Insulation That Contained Asbestos It is not possible to say whether your exposure may result in disease. Exposure to asbestos increases your risk of developing lung diseases including asbestosis,lung cancer,or mesothelioma,and disease may not occur until decades after exposure.The risk of disease increases as the level,duration,and frequency of exposure increases. That risk is made worse by smoking. If you are concerned about possible exposure,talk to your doctor and consider consulting a physician who specializes in lung diseases,also known as a pulmonologist.For more information on asbestos-related diseases see the Agency for Toxic Substances& Disease Registry\Veb site. If You Have Vermiculite Insulation YOU SHOULD ASSUME THE VERMICULITE CONTAINS ASBESTOS AND DO NOT DISTURB IT! Any disturbance could potentially release asbestos fibers into the air. If you absolutely have to go in your attic and it contains vermiculite insulation,you should limit the number of trips you make and shorten the length of those trips in order to help limit your potential exposure. http://wtivw2.epa.gov/asbestos/protect-your-family-asbestos-Contaminated-vermiculite-insulation 3/31/2015 Page 211 of 215 Discussion on Approval of Change Order No. 42 Amending Contr... AGENDA ITEM #2.B. • Matt Gandel From: Tony Yorba <tony @jensenyorbalott.com> Sent Wednesday,April 01,2015 5:10 PM To: Matt Gandel Subject: FW:cost impact of vermiculite issue The following is a rough order of magnitude budget to account for additional costs if a decision is made to keep the existing learning center and re-design the site to accommodate it. It also includes an advantages/disadvantages analysis. Option 1: Change the site configuration to keep the Learning Center Design additional work: 1. PND Civil: $40,000 • 2. Landscape: $10,000 3. IYL: $10,000 • 4. Total: $60,000 Construction,additional work: 1. Additional sitework$300,000 2. Corrective work in existing building: $50,000 3. Total additional work$350,000 Construction Deduct for work not required: 2. Sitework not required: $100,000 3. Building demolition not required: 160,000(assumed value of learning center demolition currently in contract) 4. Total Construction deduct:$260,000) Total additional cost: $150,000 Option 2: Demolish the Learning Center Design: No design change Construction: abatement cost $200,000 Cost Conclusion: Option 2, Demolishing the Learning Center,including the additional abatement,will cost about $50,000 more than Option 1 redesigning the site to keep the Learning Center. Negative Affects of leaving the Learning Center in place rather than demolition: 1. Cost estimate does not include costs for delays due to permitting,design time,delay of school opening and other risks. 2. No on-site linkage between high school parking areas. In Option 1,the West parking lot could be accessed only by Old Mill Bay Road. This puts significantly more traffic on it that the current design. 3. Old Mill Bay Road is substandard,with a narrower right of way that is currently allowed. 2 way traffic must yield to pass,so the larger volume of traffic imposed on it could be a safety issue. 4. The building would remain an asbestos liability for the KIB into the future. • 5. Neighbors and comments from Planning and Zoning required the additional access to Rezanof via Eagan Way. 6. Site traffic and pedestrian circulation would suffer significantly.The West parking area could only be accessed through the Mill Bay parking lot.The pedestrian route to the sidewalk would be much longer and circuitous. Page 212 of 215 Discussion on Approval of Change Order No. 42 Amending Contr... AGENDA ITEM #2.B. 7. Leaving the entire learning center in place would require tall retaining walls to keep the site functional. 8. The sewer service from the Borough Building would require relocation, increasing the length.There is also potential for conflict with the required walls and the water line. 9. Overall,the site would become very crowded and function poorly in comparison the original design. 10. Approximately 12 parking stalls would be lost from the Diagonal and Middle Parking lots-possibly more,depending on configuration of accessible stalls. 11. Fire department access on the site is diminished. One of the requirements of the City Fire Department was to allow apparatus to drive around the building. Keeping the Learning Center would require first responders to drive around the site via Eagan Way,rather than next to the building as required during permitting. Positive affects of the change: 1. KIB may save an estimated$50,000. 2. The entire Learning Center could be turned over to KIB for their use. 2 Page 213 of 215 Discussion on Approval of Change Order No. 42 Amending Contr... "41.O0 euwaw ZP 04+000 AMISS pnwddy uo uwssmna SR to r{Z bed di) fit F. • 1 0 a Z �� Y I lei 11 c✓/\ A � ` ) a !i .. - P t I it; II �'7 In --"I F , I r x A ra? .$ I r 1, :@1 DDbIi Kodiak odla4n 6e School Renovation oo ��tr Ira; {n®NI♦E o It � ! [ Learning Center f'#1'* ialt °cres mom II K 1. 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