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2015-04-09 Special Work Session • Kodiak Island Borough Assembly Special Work Session Thursday, April 9, 2015, 6:30 p.m., Borough Conference Room 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 - 21 a. Review of Comprehensive Annual Financial Report (CAFR). 45A Questions for Finance Director.pdf CAFR Review April 9, 2015.pdf Page 1 of 21 AGENDA ITEM #2.a. 1. What is included in Charges per Service? 2. Dan,Page 16-Expense Line item Hospital Facilities Where is the offsetting income?Charges for Services?What was the interfund increase for last year in revenue/expenses? 3. Dan,Page 16—Expense Line item Hospital Facilities Is the$600,000 difference between FY2014 and FY2013 related to the"LTC? 4. Larry,what can the monies from the paid off bond be spent on?Check Ordinance,is there anything dictating what the money can be spent on?Example: Health care,can it be spent on street lights(safety issues)or only health related 5. Dan,on other non-major enterprise funds is 911 or E911 in there?Is there anything else that is in there?(Responded to already per Dan.) 6. Dan,Page 16-What makes up$80,000 in the Transfer line item and how is it used/where does it go? 7. Larry,concerns with interfund transfers-at a ws please review the facilities fund and how the accounting is done? 8. Dan,Page 16-in the bottom paragraph what/why/where did the$592,590 come from why is it listed separately? 9. Dan,Page 16—explain in detail what each line item represents(what each line is made up of) 10. Rebecca,bond debt obligation-Explain current obligation vs.mil rate increase—What does it look like in regards to mil rate increases?Where in this document is that information? 11. Rebecca,facilities fund—a line in the notes that says-the loan from the facilities fund to the RNR fund will be repaid by an increase in Mil Rate is that in place or are we preparing for a mil rate increase?Where in this document is that information? 12. Rebecca,with the reimbursement from the state is that a reimbursement of monies we've already paid?We pay the debt and then get reimbursed? 13. Dan,Page 113 Principle of 2.6 mil,interest of 3.1 mil,Total 5.7 mil is that total amount owed or total amount less the amount of reimbursement from the State?Is there a good cross reference for anticipated reimbursement?Dora to do a spreadsheet. Page 2 of 21 Review of Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.a. -P. Kodiak Island Borough s • - MEMORANDUM TO: Honorable Mayor and Assembly Members the Kodiak Island Borough ��j�t(� THROUGH: Bud Cassidy,Borough Manager FROM: Karleton Short,Finance Director fa SUBJECT: CAFR Review DATE: April 9,2015 These are our answers to the questions brought up by different assembly members. I. What is included in Charges per Service? Governmental General Fund: Charges for service- sales of copies/maps 3,136 License,permits,fees 82,713 Non-major SRF's: Rent 553,438 License,permits,fees 29,850 Misc 32,862 701,999 Business-type Charges for service: solid waste disposal 2,265,967 lease Income: hospital 1,150,000 KFRC 1,851,322 5,267,289 2. Dan,Page 16-Expense Line item Hospital Facilities Where is the offsetting income? Charges for Services? Yes,it is charges for services. What was the inter-fund increase for last year in revenue/expenses? I am not sure what you mean. 3. Dan,Page 16—Expense Line item Hospital Facilities Is the$600,000 difference between FY2014 and FY2013 related to the LTC? It is mostly due the LTC center,specifically interest on the bond issue. Medicaid, through Providence,pays the total amount of this interest expense. 4. Larry,what can the monies from the paid off bond be spent on? Check Ordinance, is there anything dictating what the money can be spent on?Example: Health care,can it be spent on street lights(safety issues)or only health related Page 3 of 21 Review of Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.a. The money actually comes from our lease with Providence. We have traditionally used these funds to make payments on our bonds but this is not required anymore since the bonds are paid off. This is what the Borough Code says about health powers: 8.15.010 Scope. Whereas the borough assumed area-wide health powers pursuant to a special election held for that purpose,the assembly now deems it necessary to define the extent to which such health powers shall be exercised. [Ord.83-55-0 §1, 1983. Formerly§8.10.010]. 8.15.020 Exercise of powers or functions. Except with respect to the Kodiak Island Hospital and Care Center,the Kodiak Island Health Center,and as otherwise provided in the Kodiak Island Borough Code as now constituted or hereafter amended, the borough shall not exercise any powers or functions in the areas of health services,selling of food, food processing,food handling,control of insects and rodents,sanitation,or health permits. [Ord. 83-55-0 §I, 1983. Formerly §8.10.020]. 5. Dan,on other non-major enterprise funds is 911 or E911 in there?Is there anything else that is in there? No,just 911. 6. Dan,Page 16 -What makes up$80,000 in the Transfer line item and how is it used/where does it go? This is made up a transfer of$13,500 from the General Fund to the Solid Waste Disposal fund for thrift store disposal of unneeded contributions and a transfer of $66,500 from the Fern Fuller Trust to the Hospital Facilities Fund. 7. Larry,concerns with inter-fund transfers-at a ws please review the facilities fund • and how the accounting is done? The facilities fund can transfer 85%of the previous year's interest earnings to other capital project funds,building and grounds funds for property insurance,and up to 50% to debt service funds. 8. Dan,Page 16-in the bottom paragraph what/why/where did the$592,590 come from why is it listed separately? $3,000 more was paid in FY14 to Kodiak College and city libraries. Roughly$400,000 more was contributed in FY14 to KIBSD. Roughly$9,000 more in depreciation expense was charged to this function in FY14. There was roughly$70,000 more debt issuance costs(90k in FY 14 compared to 20K in FY I3). In FY13,there were net capital asset additions of roughly$108,000 that were capitalized,which reduced the government-wide expenses in FY13 for this function. In FY14 there were no capitalized expenses. 9. Dan,Page 16—explain in detail what each line item represents(what each line is made up of) On this part it will be easier to start towards the back of the book and move forward. This would start with the detail and move to the summary. At this time we have 6,686 revenue and expenditure accounts. Many of these are no longer being used but we still have a lot of accounts. Looking at each account can take up a lot of time. 2 Page 4 of 21 Review of Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.a. 10. Rebecca,bond debt obligation-Explain current obligation vs.mil rate increase— What does it look like in regards to mil rate increases?Where in this document is that information? Please look at the attached documentation. I I. Rebecca,facilities fund—a line in the notes that says-the loan from the facilities fund to the RNR fund will be repaid by an increase in Mil Rate is that in place or are we preparing for a mil rate increase?Where in this document is that information? So far in FY2015 we have collected$367,436 more in revenues than we have spent. If we do not resume working on these maintenance projects we can actually lower the mill rate for this fund. If we resume these projects we will have to increase the mill rate. (Unless we find another funding source) 12. Rebecca,with the reimbursement from the state is that a reimbursement of monies we've already paid?We pay the debt and then get reimbursed? Bond Reimbursement Process: The Borough sends the required funds to BNY Mellon, an independent third party bank,two weeks prior to the payment due date. BNY Mellon then transfers that payment to the Alaska Municipal Bond Bank by the payment due date. The Borough submits a reimbursement request to the State of Alaska Education/Finance Department when the payment is sent from the Borough to BNY Mellon. After the Education/Finance department received confirmation that our payment was made,they reimburse the Borough 99%of the owed reimbursement. The 1%holdback the Department of Education/Finance withholds is paid to the Borough at fiscal year-end, provided the Borough has not defaulted on any of the agreed bond payment schedules. Example Bond Payment Due Date: March 1,2015 Borough sent Payment: February 10,2015 Borough Received Reimbursement: March 11,2015 13. Dan,Page 113 Principle of 2.6 mil,interest of 3.1 mil,Total 5.7 mil is that total amount owed or total amount less the amount of reimbursement from the State?Is there a good cross reference for anticipated reimbursement?Dora to do a spreadsheet. See attached spreadsheet 'Project School Bond Payment Schedule' for information on anticipated reimbursements from the state. NEW REQUEST: Rebecca emailed the following request: I have an idea for a line graph I want,with fifteen years,2005-2020,showing historic and current bond debt,state reimbursement,projected bond debt,and mill rate collection for bond debt service. Point is to show lags between reimbursement,mill rate collection,and trends with our debt. Helps also for budget planning. See attached spreadsheet 'Bond Payment Schedule Graph Info-Assembly' . 3 Page 5 of 21 Review of Comprehensive Annual Financial Report (CAFR). xi 0 f 0 c) 0 3 a 10,000,000 a C co CD N 9,000,000 Z.CD -6 A e > m 8,000,000 - c m in 0 7,000,000 C, • 0 v ;U 6,000,000 • >a e CD 7 0 0 a 5,D00,000 T Al '0 4,000,000 ' 3,000,000 • ■ • • a 2,000,000 ■ it • • 3,000,000 • 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 —0—Committed Bond Debt —0—State Reimbursements o) —A—Committed&Projected Bond Debt —Of—Taxpayer&General Fund Contributions m uo co Z —3$—State,Taxpayer&General Fund Contributions o n s m 4t N d AGENDA ITEM #2.a. 2016 Projected School Debt Service Mill Rate Calculation Payoff Gross Rate of Net Bond Date Principle Interest Bond Pmts Reimbursement Reimbursements Bond Pmts 2008 2028 350,000 272,460 622,460 60% 373,476 248,984 2011 2031 310,000 311,850 621,850 70% 435,295 186,555 2012A 2025 435,000 218,100 653,100 blended 449,442 203,658 2012B 2025 530,000 266,150 796,150 60% 477,690 318,460 2013 2033 760,000 930,140 1,690,140 70% 1,183,098 507,042 2014 2034 785,000 990,663 1,775,663 70% . 1,242,964 532,699 EST 2015A 2035 156,662 156,662 70% . 109,663 46,999 EST 20158 2035 366,967 366,967 70% 256,877 110,090 6,682,992 4,528,506 2,154,486 Less Facility fund Interest Contribution(50%of 85%) 150,000 Adjusted net bond payments 2,004,486 Projected Real Property Taxable Value 1,080,000,000 Projected Personal Property Taxable Value 120,000,000 Total Projected Taxable Property Value . 1,200000,000 Mill Divisor 1,000 Mill Value 1,200,000 School Portion of Projected Mill Rate(adjusted net pmts/adj mill value) 1.67 Asssumptions: EST 2015A are sold at $10,250,000 and payments begin in February 2016 EST 20158 are sold at $18,000,000 and payments begin in February 2016 State reimbursement percentage for new bonds sold is 70% State reimbursement percentage for prior bond sold remain at current rates Facility Fund interest income does not fall below 1% Taxable real and personal property values do not decrease Note: School Debt Service is not the only expense in the Debt Service Fund used to claculate Debt Service Mill Rate Page 7 of 21 Review of Comprehensive Annual Financial Report (CAFR). • AGENDA ITEM #2.a. 2017 Projected School Debt Service Mill Rate Calculation Payoff Gross Rateof Net • Bond Date Principle Interest Bond Pmts Reimbursement Reimbursements Bond Pmts '2008 2028 370,000 254,960 624,960 60% 374,976 249,984 2011 2031 320,000 302,550 622,550 70% 435,785 186,765 2012A 2025 455,000 200,300 655,300 blended 450,956 204,344 2012B 2025 550,000 244,550 794,550 60% 476,730 317,820 2013 2033 790,000 899,740 1,689,740 70% 1,182,818 506,922. 2014 2034 810,000 967,113 -1,777,113 70% 1,243,979 533,134 EST 2015A 2035 905,000 305,089 1,210,089 70% 847,062 363,027 EST 20158 2035 640,000 728,110 1,368,110 70% 957,677 410,433 8,742,412 5,969,983 2,772,428 Less Facility Fund Interest Contribution(50%of 85%) 150,000 Adjusted net bond payments 2,622,428 Projected Real Property Taxable Value 1,080,000,000 • Projected Personal Property Taxable Value 120,000,000 Total Projected Taxable Property Value 1,200,000,000 Mill Divisor 1,000 Mill Value 1,200,000.00 School Portion of Projected Mill Rate(adjusted net pmts/adj mill value) 2.19 Asssumptions: EST 2015A are sold at $10,250,000 and payments begin in February 2016 EST 2015B are sold at $18,000,000 and payments begin in February 2016 State reimbursement percentage for new bonds sold is 70% State reimbursement percentage for prior bond sold remain at current rates . Facility Fund interest income does not fall below 1% Taxable real and personal property values do not decrease Note: School Debt Service is not the only expense in the Debt Service Fund used Page 8 of 21 Review of Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.a. 2018 Projected School Debt Service Mill Rate Calculation Payoff Gross Rate of Net Bond Date Principle Interest Bond Pmts Reimbursement Reimbursements Bond Pmts 2008 2028 380,000 240,160 620,160 60% 372,096 248,064 2011 2031 330,000 292,950 622,950 70% 436,065 186,885 2012A 2025 460,000 186,600 646,600 blended 444,969 201,631 2012B 2025 565,000 227,900 792,900 60% 475,740 317,160 2013 2033 820,000 868,140 1,688,140 70% 1,181,698 506,442 2014 2034 840,000 934,713 1,774,713 70% 1,242,299 532,414 EST 2015A 2035 920,000 287,101 1,207,101 70% 844,971 362,130 EST 2015B 2035 650,000 715,396 1,365,396 70% 955,777 409,619 0 0 8,717,960 5,953,615 2,764,344 Less Facility Fund Interest Contribution(50%of 85%) 150,000 Adjusted net bond payments 2,614,344 Projected Real Property Taxable Value 1,080,000,000 Projected Personal Property Taxable Value 120,000,000 Total Projected Taxable Property Value 1,200,000,000 • Mill Divisor 1,000 Mill Value 1,200,000 School Portion of Projected Mill Rate(adjusted net pmts/adj mill value) 2.18 Asssumptions: EST 2015A are sold at $10,250,000 and payments begin in February 2016 EST 2015B are sold at $18,000,000 and payments begin in February 2016 State reimbursement percentage for new bonds sold is 70% State reimbursement percentage for prior bond sold remain at current rates Facility Fund interest income does not fall below 1% Taxable real and personal property values do not decrease Note: School Debt Service is not the only expense in the Debt Service Fund used Page 9 of 21 Review of Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.a. 2019 Projected School Debt Service Mill Rate Calculation Payoff Gross Rate of Net Bond • Date Principle Interest Bond Pmts Reimbursement Reimbursements .Bond Pmts 2008 - 2028 400,000 224,960. 624,960 60% 374,976 249,984 2011 2031 340,000 281,400 621,400 70% 434,980 186,420 2012A 2025 480,000 172,400 652,400 blended 448,961 203,439 2012B 2025 585,000 210,550 , 795,550 60% 477,330 318,220 2013 2033 855,000 835,340 1,690,340 70% 1,183,238 507,102 2014 2034 880,000 892,713 1,772,713 70% 1,240,899 531,814 EST 2015A 2035 945,000 265,726 1,210,726 • 70%' 847,508 363,218 EST 20158 2035 665,000 700,327 1,365,327 • 70% 955;729 409,598 0 0 8,733,415 • 5,963,620 2,769,795 Less Facility Fund Interest Contribution(50%of 85%) 150,000 . Adjusted net bond payments 2,619,795 • Projected Real Property Taxable Value 1,080,000,000 Projected Personal Property Taxable Value 120,000,000 Total Projected Taxable Property Value 1,200,000,000 Mill Divisor 1,000 Mill Value 1,200,000 School Portion of Projected Mill Rate(adjusted net pmts/adj mill value) 2.18 • Asssumptions: EST 2015A are sold at $10,250,000 and payments begin in February 2016 EST 20158 are sold at $18,000,000 and payments begin in February 2016 State reimbursement percentage for new bonds sold is 70% State reimbursement percentage for prior bond sold remain at current rates Facility Fund interest income does not fall below 1% Taxable real and personal property values do not decrease Note: School Debt Service is not the only expense in the Debt Service Fund used • Page 10of21 Review of Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.a. 2020 Projected School Debt Service Mill Rate Calculation Payoff Gross Rate of Net Bond Date Principle Interest Bond Pmts Reimbursement Reimbursements Bond Pmts 2008 2028 415,000 208,960 623,960 60% 374,376 249,584 2011 2031 355,000 267,800 622,800 70% 435,960 186,840 2012A 2025 495,000 150,425 645,425 blended 444,161 201,264 20126 2025 610,000 183,600 793,600 60% 476,160 317,440 2013 2033 895,000 792,590 1,687,590 70% 1,181,313 506,277 2014 2034 900,000 875,113 1,775,113 70% 1,242,579 532,534 EST 2015A 2035 970,000 241,056 1,211,056 70% 847,739 363,317 EST 20158 2035 685,000 682,934 1,367,934 70% 957,554 410,380 0 0 8,727,477 5,959,841 2,767,636 Less Facility Fund Interest Contribution(50%of 85%) 150,000 Adjusted net bond payments 2,617,636 Projected Real Property Taxable Value 1,080,000,000 Projected Personal Property Taxable Value 120,000,000 Total Projected Taxable Property Value 1,200,000,000 Mill Divisor 1,000 Mill Value 1,200,000 School Portion of Projected Mill Rate(adjusted net pmts/adj mill value) 2.18 Asssumptions: EST 2015A are sold at $10,250,000 and payments begin in February 2016 EST 20156 are sold at $18,000,000 and payments begin in February 2016 State reimbursement percentage for new bonds sold is 70% State reimbursement percentage for prior bond sold remain at current rates Facility Fund interest income does not fall below 1% Taxable real and personal property values do not decrease Note: School Debt Service is not the only expense in the Debt Service Fund used Page 11 of 21 Review of Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.a. 2016 Projected School Debt Service Mill Rate Calculation Payoff Gross Rate of Net Bond Date Principle Interest- Bond Pmts Reimbursement Reimbursements Bond Pmts 2008 2028 350,000 272,460 622,460 60% 373,476 248,984 2011 2031 310,000 311,850 621,850 70% 435,295 186,555 2012A 2025 435,000 218,100 653,100 blended 449,442 203,658 20128 2025 530,000 266,150 796,150 60% 477,690 318,460 2013 2033 760,000 930,140 1,690,140 70% 1,183,098 507,042 2014 2034 785,000 990,663 1,775,663 70% 1,242,964 532,699 EST 2015A 2035 156,662 156,662 70% 109,663 46,999 EST 20150 2035 366,967 366,967 70% 256,877 110,090 6,682,992 4,528,506 2,154,486 Less Facility Fund Interest Contribution(50%of 85%) 150,000 Adjusted net bond payments 2,004,486 Projected Real Property Taxable Value • 1,080,000,000 Projected Personal Property Taxable Value 120,000,000 Total Projected Taxable Property Value 1,200,000,000 Mill Divisor 1,000 Mill Value 1,200,000 School Portion of Projected Mill Rate(adjusted net pmts/adj mill value) 1.67 Asssumptions: EST 2015A are sold at $10,250,000 and payments begin in February 2016 EST 20158 are sold at $18,000,000 and payments begin in February 2016 State reimbursement percentage for new bonds sold is 70% State reimbursement percentage for prior bond sold remain at current rates Facility Fund interest income does not fall below 1% Taxable real and personal property values do not decrease Note: School Debt Service is not the only expense in the Debt Service Fund used to claculate Debt Service Mill Rate Page 12 of 21 • Review of Comprehensive Annual Financial Report (CAFR). • AGENDA ITEM #2.a. 2017 Projected School Debt Service Mill Rate Calculation Payoff Gross Rate of Net Bond Date Principle Interest Bond Pmts Reimbursement Reimbursements Bond Pmts 2008 2028 370,000 254,960 624,960 60% 374,976 249,984 2011 2031 320,000 302,550 622,550 70% 435,785 186,765 . 2012A 2025 455,000 200,300 655,300 blended 450,956 204,344 20128 2025 550,000 244,550 794,550 60% 476,730 317,820 2013 2033 790,000 899,740 1,689,740 70% 1,182,818 506,922 2014 2034 810,000 967,113 1,777,113 70% 1,243,979 533,134 EST 2015A 2035 905,000 305,089 1,210,089 70% 847,062 363,027 EST 201513 2035 640,000 728,110 1,368,110 70% 957,677 410,433 8,742,412 5,969,983 2,772,428 Less Facility Fund Interest Contribution(50%of 85%) 150,000 Adjusted net bond payments 2,622,428 Projected Real Property Taxable Value 1,080,000,000 Projected Personal Property Taxable Value 120,000,000 Total Projected Taxable Property Value 1,200,000,000 Mill Divisor 1,000 Mill Value 1,200,000.00 School Portion of Projected Mill Rate(adjusted net pmts/adj mill value) 2.19 Asssumptions: EST 20154 are sold at $10,250,000 and payments begin in February 2016 EST 20158 are sold at $18,000,000 and payments begin in February 2016 State reimbursement percentage for new bonds sold is 70% State reimbursement percentage for prior bond sold remain at current rates Facility Fund interest income does not fall below 1% Taxable real and personal property values do not decrease Note: School Debt Service is not the only expense in the Debt Service Fund used Page 13 of 21 Review of Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.a. 2018 Projected School Debt Service Mill Rate Calculation Payoff Gross Rate of Net Bond Date Principle - Interest - Bond Pmts Reimbursement Reimbursements Bond Pmts 2008 2028 380,000 240,160 620,160 60% 372,096 248,064 2011 2031 330,000 292,950 622,950 • 70% 436,065 186,885 2012A 2025 460,000 186,600 646,600 blended 444,969 201,631 20128 2025 565,000 .227,900 792,900 60% 475,740 317,160 2013 2033 820,000 868,140 1,688,140 70% 1,181,698 506,442 2014 2034 840,000 934,713 1,774,713 70% 1,242,299 532,414 EST 2015A 2035 920,000 287,101 1,207,101 • 70% 844,971 362,130 EST 20158 2035 650,000 715,396 1,365,396 70% 955,777 409,619 0 0 8,717,960 . 5,953,615 2,764,344 Less Facility Fund Interest Contribution(50%of 85%) 150,000 Adjusted net bond payments 2,614,344 Projected Real Property Taxable Value 1,080,000,000 Projected Personal Property Taxable Value 120,000,000 Total Projected Taxable Property Value 1,200,000,000 • Mill Divisor 1,000 Mill Value 1,200,000 School Portion of Projected Mill Rate(adjusted net pmts/adj mill value) 2.18 Asssumptions: EST 2015A are sold at $10,250,000 and payments begin in February 2016 EST 20159 are sold at $18,000,000 and payments begin in February 2016 State reimbursement percentage for new bonds sold is 70% - • State reimbursement percentage for prior bond sold remain at current rates Facility Fund interest income does not fall below 1% Taxable real and personal property values do not decrease Note: School Debt Service is not the only expense in the Debt Service Fund used • Page 14 of 21 Review of Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.a. 2019 Projected School Debt Service Mill Rate Calculation Payoff Gross Rate of Net Bond Date Principle Interest Bond Pmts Reimbursement Reimbursements Bond Pmts 2008 2028 400,000 224,960 624,960 60% 374,976 249,984 2011 2031 340,000 281,400 621,400 70% 434,980 186,420 2012A 2025 480,000 172,400 652,400 blended 448,961 203,439 20126 2025 585,000 210,550 795,550 60% 477,330 318,220 2013 2033 855,000 835,340 1,690,340 70% 1,183,238 507,102 2014 2034 880,000 892,713 1,772,713 - 70% 1,240,899 531,814 EST 2015A 2035 945,000 265,726 1,210,726 70% 847,508 363,218 EST 2015B 2035 665,000 700,327 1,365,327 70% - 955,729 409,598 0 0 8,733,415 5,963,620 2,769,795 Less Facility Fund Interest Contribution(50%of 85%) 150,000 Adjusted net bond payments 2,619,795 Projected Real Property Taxable Value 1,080,000,000 Projected Personal Property Taxable Value 120,000,000 Total Projected Taxable Property Value 1,200,000,000 Mill Divisor 1,000 Mill Value 1,200,000 School Portion of Projected Mill Rate(adjusted net pmts/adj mill value) 2.18 Asssumptions: EST 2015A are sold at $10,250,000 and payments begin in February 2016 EST 20156 are sold at $18,000,000 and payments begin in February 2016 State reimbursement percentage for new bonds sold is 70% State reimbursement percentage for prior bond sold remain at current rates Facility Fund interest income does not fall below 1% Taxable real and personal property values do not decrease Note: School Debt Service is not the only expense in the Debt Service Fund used Page 15 of 21 Review of Comprehensive Annual Financial Report(CAFR). AGENDA ITEM #2.a. • 2020 Projected School Debt Service Mill Rate Calculation Payoff Gross Rate of Net Bond Date Principle Interest Bond Pmts Reimbursement Reimbursements .Bond Pmts 2008 2028 415,000 208,960 623,960 60% 374,376 249,584 . 2011 2031 355,000 267,800 622,800 70% 435,960 186,840 2012A 2025 495,000 150,425 645,425 blended 444,161 201,264 •20128 2025 610,000 183,600 793,600 60% 476,160 317,440 2013 2033 895,000 792,590 1,687,590 70% 1,181,313 506,277 2014 2034 900,000 875,113 1,775,113 - 70% 1,242,579 532,534 EST2015A 2035 970,000 241,056- 1,211,056 70% 847,739 363,317 E5T.20158 2035 685,000 682,934 1,367,934 70% 957,554 410,380 0 0 • 8,727,477 5,959,841 2,767,636 Less Facility Fund Interest Contribution(50%of 85%) 150,000 Adjusted net bond payments 2,617,636 Projected Real Property Taxable Value 1,080,000,000 Projected Personal Property Taxable Value 120,000,000 Total Projected Taxable Property Value 1,200,000,000 Mill Divisor• 1,000 Mill Value 1,200,000 • School Portion of Projected Mill Rate(adjusted net pmts/adj mill value) 2.18 Asssumptions: EST 2015A are sold at $10,250,000 and payments begin in February 2016 EST 2015B are sold at $18,000,000 and payments beginin February 2016 • State reimbursement percentage for new bonds sold is 70% State reimbursement percentage for prior bond sold remain at current rates Facility Fund interest income does not fall below 1% Taxable real and personal property values do not decrease Note: School Debt Service is not the only expense in the Debt Service Fund used • Page 16 of 21 Review of Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.a. • 1 Introduced by Manager Gifford 2 Requested by: School Board/Assembly 3 Drafted by: Finance Director/Bond Counsel 4 Introduced on: 07/16/2009 5 public Hearing: 08/06/2009 6 Amended:' 08/06/2009 7 • Adopted: 08/05/2009 8 9 KODIAK ISLAND BOROUGH 10 ORDINANCE NO. FY2010-03 11 12 AN ORDINANCE OF THE KODIAK ISLAND BOROUGH ASSEMBLY 13 AUTHORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION BONDS 14 IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED$76,310,000 15 TO FINANCE THE PLANNING,DESIGN AND CONSTRUCTION OF SCHOOL 16 AND RELATED CAPITAL IMPROVEMENTS IN THE BOROUGH INCLUDING WITHOUT 17 LIMITATION THE RECONSTRUCTION AND RENOVATION OF THE KODIAK HIGH 18 SCHOOL,AND TO SUBMIT THE QUESTION OF THE ISSUANCE OF SUCH BONDS TO 19 THE QUALIFIED VOTERS OF THE BOROUGH AT THE OCTOBER 6,2009 REGULAR 20 BOROUGH ELECTION 21 22 WHEREAS, under the provisions of AS 29.47.190,a municipality may inn*general obligation 23 debt only after a bond authorization ordinance is approved by a majority of those voting on the 24 question at a regular or special election;and 25 26 WHEREAS, educational requirements have changed since Kodiak High School was originally 27 constructed in 1966 as a regional education center;and 28 29 WHEREAS, Kodiak High School's design shortfalls were recognized and multiple remodeling 30 projects have been completed to bring the facility into code compliance;and 31 32 WHEREAS, the last addition of vocational or academic space to Kodiak High School occurred 33 in 1972;and 34 35 WHEREAS, in the late 1980s enrollment at Kodiak High School grew beyond 500 students 36 and a four-phase reconstruction project began;and 37 38 WHEREAS, the fourth phase of the above project, which would have addressed needed 39 additional academic instructional space,was never started;and 40 41 WHEREAS, enrollment at Kodiak High School has soared from 550 students to as high as 42 850 over the past twenty years and is forecasted to remain at approximately 800 students into 43 the foreseeable future;and 44 45 WHEREAS, enrollment projections demonstrate a continued enrollment of 200 or more 46 students above the capacity of the existing Kodiak High School educational facility;and 47 48 WHEREAS, providing the space that currently is needed for Kodiak High School instruction 49 requires the use of community schools facilities, auditorium space and rented space, as well as 50 overcrowding of the existing high school facilities; and Kodiak Island Borough Ordinance No. FY2010-03 Page 1 of 5 Page 17 of 21 Review of Comprehensive Annual Financial Report (CAFR). • AGENDA ITEM #2.a. 51 52 WHEREAS, the instructional space available for Kodiak High School does not support the 53 instructional programs which are needed to prepare our high school students for success in the 54 world marketplace;and 55 56 WHEREAS, the current state debt service reimbursement plan provides that the State of 57 Alaska will reimburse the Borough for not less than sixty percent (60%) of debt service on the 58 eligible portion of bonds authorized by the qualified voters of the Borough on or after October 1, 59 2006 but before November 30, 2010, to pay costs of school construction, additions to schools, 60 and major rehabilitation projects; and; 61 62 WHEREAS, the Board of Education and Borough Assembly have commissioned an architect 63 to fully evaluate reconstruction options that support the kind of programs necessary for Kodiak 64 High School to fully meet the educational expectations defined by our community;and 65 66 WHEREAS, the conceptual process has undergone two years of refinement;and 67 - 68 WHEREAS, the educational facilities and space survey identified that a substantial remodel 69 and new expansion of Kodiak High School will meet instructional space needs in grades K-12 70 throughout our community; and 71 72 WHEREAS, the Kodiak Island Borough School District's educational mission is severely 73 compromised by facility limitations at Kodiak High School;and 74 75 WHEREAS, the Board of Education believes the District would be best served by all District- 76 wide services being 'congregated in renovated space in the existing Kodiak High School 77 building;and 78 • 79 WHEREAS, public feedback since the first bond election in 2008 has yielded a more cost- 80 effective design for the renovation and expansion of Kodiak High School;and 81 82 WHEREAS, funding for further architectural design work and cost estimation for the 83 renovation and expansion of Kodiak High School depends on voter approval of a bond 84 ordinance for the project;and 85 86 WHEREAS, the School• District has identified giants and industry-based tax incentive 87 programs which could fund millions of dollars towards the Borough's debt service for 88 construction of Kodiak High School, but for which an application can be submitted only after a 89 bond ordinance is approved;and 90 91 WHEREAS, the Borough and School District will continue to seek and apply for additional 92 grants and reimbursement options to reduce the debt service cost of the renovation and 93 expansion of Kodiak High School;and 94 95 WHEREAS, $4,490,000 in proceeds of Borough school bonds previously issued for school 96 repair and replacements projects is available for the renovation of Kodiak High School;and 97 98 WHEREAS, the Borough views the school and related capital Improvements authorized 99 herein as necessary and beneficial to the community; 100 Kodiak Island Borough Ordinance No. FY2010-03 Page 2 of 5 Page 18 of 21 Review of Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.a. 101 NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND 102 BOROUGH THAT: 103 104 Section 1: This ordinance Is not of a general or permanent nature and shall not become a 105 part of the Kodiak Island Borough Code of Ordinances. 106 107 Section 2: It is hereby determined to be for a public purpose and in the public interest of the 108 Borough to incur general obligation bonded indebtedness in an amount not to 109 exceed Seventy Six Million Three Hundred and Ten Thousand Dollars 110 ($76,310,000) for the purpose of paying the cost of planning, design, 111 construction, furnishing and equipping of school and related capital 112 improvements in the Borough, including without limitation additions to Kodiak 113 High School, renovation of Kodiak High School for instructional and School 114 District administrative space, and demolition of the Business 115 Department/Leaming Center. 116 117 Section 3: The Borough is authorized to borrow the sum of Seventy Six Million Three 118 Hundred and Ten Thousand Dollars ($76,310,000) to finance the capital 119 improvements described in Section 2, and the borrowing shall be evidenced by 120 the issuance of general obligation bonds of the Borough; provided that bonds 121 may not be issued for any project unless the project is eligible for debt service 122 reimbursement by the State of Alaska. The full faith and credit of the Borough 123 are pledged for payment of the principal of and Interest on the bonds, and ad 124 valorem taxes upon all taxable property in the Borough shall be levied without 125 limitation as to rate or amount to pay the principal of and interest on the bonds 126 when due. 127 128 Section 4: The Borough shall submit the following proposition to the qualified voters of the 129 Borough at the October 6, 2009 regular Borough election. The proposition must 130 receive an affirmative vote from a majority of the qualified voters voting on the 131 question to be approved. 132 133 PROPOSITION NO.1 134 GENERAL OBLIGATION BONDS-$76,310,000-KODIAK HIGH SCHOOL 135 136 Shall the Kodiak Island Borough incur debt and issue general 137 obligation bonds in an amount not to exceed Seventy Six Million 138 Three Hundred and Ten Thousand Dollars ($76,310,000) for the 139 purpose of paying the cost of planning, design, construction, 140 furnishing, and equipping of school and related capital 141 improvements in the Borough, including without limitation the 142 projects described below? 143 Kodiak Island Borough Ordinance No. FY2010-03 Page 3 of 5 Page 19 of 21 Review of Comprehensive Annual Financial Report (CAFR). AGENDA ITEM #2.a. [Project lEstimated Cost Additions to Kodiak High School f $ _44,270,000 Renovate existing Kodiak High School 35,210,000 Renovate part of Kodiak High School [for School District Administraion 1.100,000 Demolish Existing Business Department land Learning Center 220,000 i Total 80,800,0001 Less available Funds in other projects - �KHS Exterior Insulation and Window Replacement (590,000)) KHS Voc Ed Renovation&Pool Reclamation —1 (3,900,000)1 'Total deductions I (4,490,000) Total amount of bond-Issue I $ 76,310,000 I 144 1 145 The projects are expected to qualify for not less than 60% State 146 debt service reimbursement, funding for which is subject to annual 147 appropriation.The projects will be phased to limit disruption to the 148 education of students, and bonds will be sold only as needed to 149 pay project costs. If the State fully funds the debt service 150 reimbursement program, the average annual debt service payable 151 by the Borough after State reimbursement, is estimated to be 152 $2.409.317.This amount of debt service may require an additional 153 annual property tax levy of$660 per$250,000 of assessed value, 2,61 h:11.5 154 or its equivalent, This example of a property tax levy is provided 155 for illustrative purposes only. 156 157 If additional funding becomes available for the projects from 158 grants or other sources, only enough bonds to finish the projects 159 will be sold. 160 161 The bonds shall be secured by a pledge of the full faith and credit 162 of the Borough. (Ordinance No. FY2010-03) 163 164 Section 5: The proposition shall be printed on a ballot which may set forth other general 165 obligation bond propositions, and the following words shall be added as 166 appropriate next to an oval provided for marking the ballot for voting by hand or 167 machine: 168 PROPOSITION NO. 1 O YES O NO 169 170 Kodiak Island Borough Ordinance No. FY2010-03 Page 4 of 5 • Page 20 of 21 Review of Comprehensive Annual Financial Report (CAFR).. AGENDA ITEM #2.a. 171 Section 6: Sections 2 and 3 of this ordinance shall become effective only if the proposition 172 described in Section 4 is approved by a majority of the qualified voters voting on 173 the proposition at the October 6, 2009 regular Borough election. The remaining 174 sections of this ordinance shall become effective upon adoption by the Kodiak 175 Island Borough Assembly. 176 177 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH 178 THIS SIXTH DAY OF AUGUST, 2009 179 KODIAK ISLAND BOROUGH assimmaissi .__ ATTEST: Jerome M.Selby,Borough Mayo Nova ' .Javier, CMC,:o r 'rrk 180 181 Kodiak Island Borough Ordinance No. FY2010-03 Page 5 of 5 Page 21 of 21 Review of Comprehensive Annual Financial Report (CAFR). - KODIAK ISLAND BOROUGH - WORK SESSION 57:x2 ,,-'-,` Work Session of: Arai) ) 701 S- Please RINT your name Please PRINT your a me A el sit/11(0A s- ..\\\s.,, cAs- \Acia -VI u l� S;" of drnillti S 1-1194 �� •