2021-05-27 Work SessionPage
3-10
`fimm
Kodiak Island Borough
Assembly Work Session
Thursday, May 27, 2021, 6:30 p.m.
Bayside Volunteer Fire Department - 4606 East Rezanof Drive
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.
Citizens' comments.
2. Agenda items.
a. Trauma Responsive Community
b. FY2022 Borough Manager Budget
-.,j Memo Borough Manager Directive May 20, 2021 Regular
Meeting
Budget Spreadsheet
REVISED Budget Spreadsheet
Memo Borough Manager Directive May 20 Regular Meeting -
missing page handedout
C. Public Comment
Citizen Comment - Skinner Law Office RE: Comments on KIB
FY2022 Budget
3. Manager's Comments
4. Clerk's Comments.
5. Packet Review for the Regular Meeting of June 3, 2021
Items may be added during the work session for inclusion on the Regular Meeting
agenda. For noticing requirements the item may be brought up and noticed to the
Clerk to add the item. You may NOT enter into a substantive conversation.
Awards and presentations.
• Recognizing The Month of June 2021 - Salvation Army
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www.kodiakak.us Page 1 of 12
Public hearing.
• Ordinance No. FY2022-01 Receiving The 2021 Certified Real And Personal
Property Tax Roll, Levying Ad Valorem Property Taxes For Tax Year 2021
• Ordinance No. FY2022-02 Adopting The Budget For Fiscal Year 2022 And
Appropriating From All Borough Funds
• Application For New Liquor License, Bells Flats Little Store LLC.
Consideration of the calendar - Unfinished Business.
• None.
Consideration of the calendar - New Business.
Contracts.
• Contract No. FY2021-31 Facility Heating Fuel Oil And Highway Fuel For
Kodiak Island Borough Facilities And Vehicles With Petro Star Inc. dba
North Pacific Fuel
Resolutions.
• Resolution No. FY2021-38 Rescinding Resolution No. FY2018-21 And
Documenting The Kodiak Fisheries Work Group's Scope And Authority
• Resolution No. FY2021-39 Authorization For The Borough Clerk To
Dispose Of Certain Kodiak Island Borough Records
Ordinances for introduction.
• None.
Other items
• Confirmation Of Board Appointments to the City Of Kodiak and Kodiak Island
Borough Cooperative Relations Committee
Executive Session
• Borough Clerk, Alise Rice, One Year Evaluation
6. Assembly Member' Comments.
7. Mayor Comments.
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www.kodiakak.us Page 2 of 12
Date: May 26, 2021
AGENDA ITEM #2.b.
Kodiak Island Borough
OFFICE of the MANAGER
710 Mill Bay Road
Kodiak, Alaska 99615
Phone (907) 486-9301 Fax (907) 486-9374
E-mail: mpowers@kodiakak.us
Inter -Office Memorandum
To: Mayor and Assembly
From: Michael Powers, Borough Manager
Subject: Budget Revisions
BACKGROUND
At the May 20, 2021 Assembly meeting, staff was directed to prepare a revision of the
Manager's Budget for the Assembly's consideration with the following stipulations:
1. Total for the General Fund Budget of $5,429,471
2. Use Fund Balance for one-time expenditures.
3. Add $200,000 for Kodiak College.
4. Add $85,000 for health non -profits (small entities)
5. Add $85,000 for education related non -profits (small entities).
6. Include information relative to the reduction in services necessary to carry this out.
In effect a reduction of $1,203,788 is required in the Manager's budgeted expenses to be able to
add back $370,000 for the uses cited above. We have prepared a spreadsheet highlighting the
changes necessary to comply with direction given (May 20 Direction). We have not
incorporated any of the other discussions about trading rent for R&R or other items that have
been discussed. First, there was no direction to do so. Second, staff is concerned that "moving
money around", while legal, makes the budget less transparent. We heartily recommend that if
the Assembly wants to make those type of arrangements, in be done in a clear and open manner
so that the public is well informed. It is difficult enough for the public to "follow the money" in
Fund Accounting.
DISCUSSION
The vast majority of our expenses are labor, which as a service provider (internal and external) is
to be expected. Staff can't provide services without basic materials and equipment, so it is not
possible to universally slash and eliminate the basics needed to provide the services we are
mandated to provide. We further looked at various longer term options since, as professionals,
we look beyond the immediate needs (for example, could we legally change the terms of office
Page 3 of 12
FY2022 Borough Manager Budget
AGENDA ITEM #2.b.
to 4 year terms and reduce the number of elections, we can't...) as well as the implication of
reduction in services that would generate significant future harm (failing to carry out Assessing
as required would not only reduce the accuracy of our assessments and reduced revenue but
could result in financial penalties and costs from the State, further reducing available revenue).
Further, we focused our changes to those items that could be implemented within the first three
(3) months of the fiscal year due to the diminishing savings that would occur for those items that
require more time to implement. Lastly, and overshadowing all of these concerns, was the need
to make sure that we not lose sight of the potential negative effects of reductions that would
cause significant financial problems.
In that vein, we have reviewed the potential for "one-time" expenses to be funded by fund
balance. We identified the Assessing software ($250,000), the equipment for migration to the
Cloud ($20,000), camera system ($50,000) and the pickup (truck) for E&F staff ($75,000). We
have eliminated the pickup and the Camera system from the budget. The remaining balance
would be $270,000.00 which could be funded from the General Fund cash balance. While we
have made multiple presentations and comments to the Assembly for the past 5 years, I would be
remiss if I didn't point out and remind you that the total amount of the Assessing software will
be more than the $500,000 we will have if the $250,000 is funded this year.
Regarding operational expenses in the General Fund, we have reduced or eliminated funding
across the Board to the extent possible. Specifically, stipends for the Assembly and P&Z have
been eliminated, training, travel and per diem has been eliminated or severely reduced (exception
would be Assessing to carry out necessary field work) as well as other expenses to the extent
possible. The proposed Maintenance Supervisor position ($13,194, General Fund expense) has
been eliminated. We have not eliminated the use of Borough vehicles as some are used for
maintenance, one is contractually provided, and the remainder used across the departments as
needed. It would not be practical or functional to eliminate the trucks used for maintenance, we
could modify our Personnel Rules to eliminate the language about preferring the use of Borough
vehicles and make it a reimbursement for personal vehicle use. Further, the existing agreement
with the Borough Manager could be renegotiated. We have reduced the amount of funds
necessary for vehicles. We propose eliminating the Animal Control Contract. Additional
legislative work will be required by the Assembly to enact some of these changes (suspending or
eliminating stipends for an example).
Because of the amounts involved are far less ($500,000 in round numbers) than the $1.2M
needed, significant labor reductions are needed. Accordingly, and in light of the mandated
services, we propose to eliminate the Community Development Department, reduce or eliminate
the Planning and Zoning Commission, and will propose legislation to simplify the land use
component of our ordinance to a "Manager Review and Approval" process for all uses that
would reduce staff and the review process. In effect, existing uses would be allowed with
minimal review, substantial changes or new processes would be greatly simplified and the
Assembly would sit as the review and approval body when needed. Code enforcement and junk
vehicle expense would also be eliminated. Many jurisdictions use land use to actively shape
their community and economy, Kodiak does not have a history of doing so, and the Assembly
has received considerable testimony over the past 5 years to eliminate Building Codes, code
enforcement and perceived difficulties with our land use processes and code enforcement.
Further, we recommend that the Assembly authorize a hard closure of Karluk and Larsen Bay
schools (the School District has NOT released them to us) and reduced the expenses accordingly.
Alternatively, provide the option to KIBSD to take the schools back and provide community
Page 4 of 12
FY2022 Borough Manager Budget
AGENDA ITEM #2.b.
services if they see fit to do so. This does not affect the General Fund, but it does have a
significant impact on the Renewal and Replacement Fund.
We urge you to not try to "spread the pain around" to the various departments. Diminishing staff
in the remaining departments will create significant weakness in key areas that would
compromise the ability of those departments to carry out their mission. Further, those
compromised abilities would create greater exposure to fraud and theft, incorrect assessment, lax
personnel administration, and difficulties in contracting, all of which would have significant
fiscal impacts in addition to the reputational effects upon Kodiak Island Borough.
Lastly, we have roughly $46,000 not covered by reductions. Because of the timing of the needed
actions, we recommend you cover that amount by use of fund balance. We are unable to
accurately predict the timing and impact of the needed legislative and staff actions, but believe
that the shortfall may not occur if the Assembly and staff take the actions in a timely manner.
We have built into these reductions expenses where we believe costs will still occur even with
the timely action of the Assembly and Borough.
Page 5 of 12
FY2022 Borough Manager Budget
AGENDA ITEM #2.b.
Account
Description
Assembly
Furniture
100 410.106
Mayor stipend
100410.108
Assembly stipend
Benefits
continuing education
100430.100
Political Lobbyist
100 430.101
Lobbyign expense
100430.102
Consolidation
100 450.115
Software
100450.210
Food/meetings
100450.300
Travel
100 450.301
Mayor travel
100450.485
Town Meeting
Managers
$
105 430.140
Contracted (HR)
105 450.140
Dues Books
100450.160
Furniture fixtures
105 450.210
Food/meetings
105 450.300
Travel
Clerks
$
110 450.160
Furniture
110 450.170
Machinery
110450.210
Food Meeting
110450.270
continuing education
110 450.470
elections local
110 450.530
Boards & Committes
110450.530
Records Managerment
Borough Attorney
$
115 431.110
Legal Fees
140450.270 Cont. Education
Support services
Finance Department
120 450.120 Printing & Binding
120450.270 Continuing Education
IT
125 470.115
125 494.415
Assessing
130 450.270
Engineering/Facilities
135 450.290
May 20 Directive
All changes below are General Fund
Managers
$ 6,000.00
$ 26,100.00
$ 4,761.00
$ 84,000.00
$ 500.00
$ 5,000.00
$ 1,000.00
$ 500.00
$ 10,000.00
$ 2,000.00
$ 500.00
$ 45,000.00
$ 3,450.00
$ 500.00
$ 1,000.00
$ 2,500.00
$ 500.00
$ 500.00
$ 100.00
$ 15,000.00
$ 40,000.00
$ 1,300.00
$ 5,000.00
$ 100,000.00
$ 9,500.00
$ 9,500.00
$ 4,000.00
Revised Budget
$ 750.00
$ 79,000.00
$ 1,000.00
$ 20,000.00
$ 2,300.00
$ 3,000.00
$ 40,000.00
$ 3,500.00
$ 85,000.00
$ 9,500.00
$ 1,000.00
$ 1,000.00
Machinery
$
70,000.00
$
20,000.00
Capital project
$
250,000.00
$
250,000.00
Continuing Ed
$
8,000.00
$
1,500.00
Recruit/relocate $ 5,000.00 $
Community Development
140410.110 Salaries
$
374,805.00
$ 39,000.00
140410.130 Overtime
$
3,100.00
$ -
140 410.152 Cell Phone
$
2,400.00
$ 200.00
Benefits (all)
$
279,210.00
$ 279,210.00
140450.270 Cont. Education
$
3,000.00
$ -
140450.300 Travel per diem
$
2,500.00
$
140450.302 Commission Travel
$
4,000.00
$
140 450.480 Boards and Commissions
$
16,800.00
$
Page 6 of 12
FY2022 Borough Manager Budget
Building Official
142 430.140 contracted services
Economic Development
160 430.140 Contracted Services
General Administration
165 450.365
Fuel
165 450.440
Vehicles
165 470.100
Machinery (truck with plow)
Parks & Recreation
$
172 430.140
Contracted Services
172 451.380
Snow Removal
172 450.430
Maintenance and Repairs
Emergency Preparation
175 430.120
Contracted Services
175 450.120
Printing and Binding
175 451.270
Continuing Education
175 450.300
Travel/per diem
Animal control
$ 6,000.00
186444.110
Animal Control
Multiple Departmental changes
Life Insurance
2,000.00
Subtotal
FY2022 Borough Manager Budget
AGENDA ITEM #2.b.
$ 140,000.00 $ 140,000.00
$ 13,570.00 $ -
$ 4,000.00
$
2,000.00
$ 10,000.00
$
5,000.00
$ 75,000.00
$
-
$ 10,000.00
$
$ 5,000.00
$
-
$ 20,000.00
$
5,000.00
$ 15,000.00
$
-
$ 2,500.00
$
-
$ 6,000.00
$
4,500.00
$ 2,500.00
$
2,000.00
$ 121,000.00
$
-
$ 120,000.00
$
60,000.00
$ 1,941,596.00
$
1,054,460.00
$ 887,136.00 Reductions from Managers Budget
$ 270,000.00 use of cash
$ 1,157,136.00
$ 1,203,788.00 "reductions needed"
$ 46,652.00 Balance of "unfunded" reductions
Page 7 of 12
AGENDA ITEM #2.b.
Account
Description
Assembly
Furniture
100 410.106
Mayor stipend
100410.108
Assembly stipend
Benefits
continuing education
100430.100
Political Lobbyist
100 430.101
Lobbyign expense
100430.102
Consolidation
100 450.115
Software
100450.210
Food/meetings
100450.300
Travel
100 450.301
Mayor travel
100450.485
Town Meeting
Managers
$
105 430.140
Contracted (HR)
105 450.140
Dues Books
100450.160
Furniture fixtures
105 450.210
Food/meetings
105 450.300
Travel
Clerks
$
110 450.160
Furniture
110 450.170
Machinery
110450.210
Food Meeting
110450.270
continuing education
110 450.470
elections local
110 450.480
Boards & Committes
110450.530
Records Managerment
Borough Attorney
$
115 431.110
Legal Fees
140450.270 Cont. Education
Support services
Finance Department
120 450.120 Printing & Binding
120450.270 Continuing Education
IT
125 470.115
125 494.415
Assessing
130 450.270
Engineering/Facilities
135 450.290
May 20 Directive
All changes below are General Fund
Managers
$ 6,000.00
$ 26,100.00
$ 4,761.00
$ 84,000.00
$ 500.00
$ 5,000.00
$ 1,000.00
$ 500.00
$ 10,000.00
$ 2,000.00
$ 500.00
$ 45,000.00
$ 3,450.00
$ 500.00
$ 1,000.00
$ 2,500.00
$ 500.00
$ 500.00
$ 100.00
$ 15,000.00
$ 40,000.00
$ 1,300.00
$ 5,000.00
$ 100,000.00
$ 9,500.00
$ 9,500.00
$ 4,000.00
Revised Budget
$ 750.00
$ 79,000.00
$ 1,000.00
$ 20,000.00
$ 2,300.00
$ 3,000.00
$ 40,000.00
$ 3,500.00
$ 85,000.00
$ 9,500.00
$ 1,000.00
$ 1,000.00
Machinery
$
70,000.00
$
20,000.00
Capital project
$
250,000.00
$
250,000.00
Continuing Ed
$
8,000.00
$
1,500.00
Recruit/relocate $ 5,000.00 $
Community Development
140410.110 Salaries
$
374,805.00
$ 39,000.00
140410.130 Overtime
$
3,100.00
$ -
140 410.152 Cell Phone
$
2,400.00
$ 200.00
Benefits (all)
$
279,210.00
$ 27,900.00
140450.270 Cont. Education
$
3,000.00
$ -
140450.300 Travel per diem
$
2,500.00
$
140450.302 Commission Travel
$
4,000.00
$
140 450.480 Boards and Commissions
$
16,800.00
$
Page 8 of 12
FY2022 Borough Manager Budget
Building Official
142 430.140 contracted services
Economic Development
160 430.140 Contracted Services
General Administration
165 450.365
Fuel
165 450.440
Vehicles
165 470.100
Machinery (truck with plow)
Parks & Recreation
$
172 430.140
Contracted Services
172 451.380
Snow Removal
172 450.430
Maintenance and Repairs
Emergency Preparation
175 430.120
Contracted Services
175 450.120
Printing and Binding
175 451.270
Continuing Education
175 450.300
Travel/per diem
Animal control
$ 6,000.00
186444.110
Animal Control
Multiple Departmental changes
Life Insurance
2,000.00
Subtotal
FY2022 Borough Manager Budget
AGENDA ITEM #2.b.
$ 140,000.00 $ 140,000.00
$ 13,570.00 $ -
$ 4,000.00
$
2,000.00
$ 10,000.00
$
5,000.00
$ 75,000.00
$
-
$ 10,000.00
$
$ 5,000.00
$
-
$ 20,000.00
$
5,000.00
$ 15,000.00
$
-
$ 2,500.00
$
-
$ 6,000.00
$
4,500.00
$ 2,500.00
$
2,000.00
$ 121,000.00
$
121,000.00
$ 120,000.00
$
60,000.00
$ 1,941,596.00
$
924,150.00
$ 1,017,446.00 Reductions from Managers Budget
$ 270,000.00 use of cash
$ 1,287,446.00
$ 1,203,788.00 "reductions needed"
$ (83,658.00) Balance of "unfunded" reductions
Page 9 of 12
Assembly Direction May 20 2021
Current Manager Budget
Assembly Direction
Additions per Assembly
total reduction necessary
$ 5,253,259.00
$ 5,429,471.00
$ 370,000.00
$ 1,203,788.00
AGENDA ITEM #2.b.
Page 10 of 12
FY2022 Borough Manager Budget
AGENDA ITEM #2.c.
As you discuss the FY2022 Borough budget tonight, and vote to approve a budget next week, please keep
the following points in mind.
1. This is not the time to raise the mill rate. For over a year COVID has significantly impacted the
commercial fishing and tourism industries in Kodiak. Commercial fishermen continue to see 30-50%
revenue reductions, and while travel and tourism are increasing they are still not up to pre-COVID levels.
Commercial fishing is a major economic driver in Kodiak and decreased revenues impact everyone.
2. Transparency is important — let the public know tonight where you are headed with the budget.
You will vote to approve the FY2022 budget in one week, on June 3, 2021. At this point the public has
very little idea what to expect. Last week you voted to advance the Manager's Budget, which requires a
Mill Rate increase of 2-3 mills. However, in that same meeting you also asked the Manager to find a way
to reduce General Fund spending by $1M (which requires eliminating an entire department, and P&Z).
You have also reviewed an alternative budget proposed by Assembly member James Turner, which is
available to the public, but it's not clear how the two budgets compare to each other. Nor is it clear if the
Assembly is tending to support the alternative budget, which includes significant cuts across all Borough
Departments, and nothing for R&R.
3. Process is important — Don't cut an entire department at the 11th hour. Despite requiring the
Manager's Budget 30 days earlier this year, and having had five worksessions to discuss the budget, the
Assembly has not had substantive discussions about the impact of cutting staff let alone the entire
Community Development Department along with the Planning & Zoning Commission. While this may be
a valid path to explore, it seems very late in the process to start down that path now. The public has not
heard from the Manager how these cuts will impact Borough operations, nor has the public had an
opportunity to hear Assembly discussion on this option. In regards to staffing in general there may be
positions that should be added back — such as the Resource Manager which focuses on activities that
actually increase revenue for the Borough. It doesn't seem that this was discussed meaningfully by the
Assembly either.
4. R&R for Borough buildings needs to be adequately funded. The Borough has deferred
maintenance that needs to be taken care of, and should probably be setting aside at least $2-3M every
year for R&R. Last year R&R was reduced because of uncertainty and financial challenges due to COVID,
but the Borough cannot afford to skip funding R&R every year. Also, just because there is fund balance in
a particular fund does not mean those funds aren't spoken for and needed. It's not clear what the short
and long-term plan is for R&R as this has also not been meaningfully discussed by the Assembly.
5. $10.4M for the School District was too much, given the circumstances. The Assembly should
make sure Borough obligations are met, while not killing the community with taxes. This requires a lot of
difficult balancing, considering obligations of: (a) paying Borough debt, (b) taking care of Borough
assets/buildings, (c) ensuring the Borough organization can function and effectively provide Borough
services, and (d) funding education. The Borough's obligation for educational operations is $4.8M, (see
KIBSD's FY22 Borough Revenue Cap Estimate) and the Assembly always gives more ($10.4M for FY2022).
It's the Assembly's job to consider the impact of an $8M annual debt burden associated with the new high
school and school building upkeep, particularly in years when the state reimburses nothing for these costs.
It's not clear how much the state will reimburse for bond debt this year, and the Assembly may not have
that information prior to its budget vote.
Skinner Comments on FY2022 KIB Budget Page 1 of 2 Page 11 of 12
Public Comment
AGENDA ITEM #2.c.
If the state provides more than the 50% reimbursement currently in the Manager's Budget the "extra"
funds should go toward desperately needed R&R, or be held for bond debt payments next year. If, on
the other hand, this money is given to the School District it will (a) make the R&R hole bigger next year,
and (b) set an unrealistic expectation that the Borough can afford to give the School District over $11M
per year, at the cost of other Borough obligations. Borough spending on education increased 58% since
2018, which includes both cash payments to KIBSD and debt payments for the new high school. This is a
significant increase of millions of dollars, and it seems obvious that the Assembly must account for that
added financial burden when making budget and taxation decisions that will impact the community. The
School District will also receive $2.2M in federal American Rescue Plan funds that were not included in its
budget calculation and funding request sent to the Borough.
2,600
2,550
2,500
2,450
2,400
2,350
2,300
2,250
2,200
8,000
7,500
7,000
6,500
6,000
5,500
5,000
4,500
4,000
ADM (Number of Students at KIBSD) - in constant decline
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Borough Dollars/Student increased 58% from 2018-2021
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
6. Why is Kodiak College/Jump Start Funding more than doubled? Past Borough funding for Kodiak
College, including the Jump Start Program, was between $30K -80K per year. This year Kodiak College
funding is proposed at an unprecedented $200K. This is clearly an expansion of services, or an addition
of new services. See #1 above; this is not the time to be raising taxes, or adding new services.
Skinner Comments on FY2022 KIB Budget Page 2 of 2 Page 12 of 12
Public Comment
Assembly Direction May 20 2021
Current Manager Budget $ 6,263,259.00
Assembly Direction $ 5,429,471.00
Additions per Assembly $ 370,000.00
total reduction necessary $ 1,203,788.00
KODIAK ISLAND BOROUGH
Meeting Type: 149( &,-v Date:
Please PRINT your name legibly Please PRINT your name legibly
Borough Assembly Work Session Attendance
Date: 5
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