The URL can be used to link to this page

FY2021 ACFR KODIAK ISLAND BOROUGH ALASKA Annual Comprehensive Financial Report Year Ended June 30, 2021 KODIAK ISLAND BOROUGH ALASKA Annual Comprehensive Financial Report Year Ended June 30, 2021 Official Issuing Report Dora Cross Finance Director KODIAK ISLAND BOROUGH TABLE OF CONTENTS June 30, 2021 Page INTRODUCTORY SECTION: Letter of Transmittal 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: Independent Auditor’s Report 10-12 Management’s Discussion and Analysis 13-27 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 28 Statement of Activities 29 Fund Financial Statements: Balance Sheet – Governmental Funds 30 Reconciliation of Net Position Between the Government-Wide and the Fund Financial Statements 31 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 32 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 33 Statement of Net Position – Proprietary Funds – Business-Type Activities – Enterprise Funds 34 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds – Business-Type Activities – Enterprise Funds 35 Statement of Cash Flows – Proprietary Funds – Business-Type Activities – Enterprise Funds 36 Notes to Basic Financial Statements 37-84 Required Supplementary Information: Budgetary Comparison Schedule – General Fund 85-86 Budgetary Comparison Schedule – Special Revenue Fund – Education Support 87 Budgetary Comparison Schedule – Special Revenue Fund – Facilities 88 Public Employees’ Retirement System: Schedule of Borough’s Proportionate Share of the Net Pension Liability 89 Schedule of Borough’s Proportionate Share of the Net OPEB Liability (Asset) 90 Schedule of Borough’s Contributions (Pension) 91 Schedule of Borough’s Contributions (OPEB) 92 Notes to Required Supplementary Information – Budgetary Comparison Schedules 93-94 KODIAK ISLAND BOROUGH TABLE OF CONTENTS, CONTINUED Page Additional Supplementary Information: Budgetary Comparison Schedule – Debt Service Fund – Education 95 Nonmajor Governmental Funds: Combining Balance Sheet 96 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 97 Nonmajor Special Revenue Funds: Combining Balance Sheet 98-99 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 100-101 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual: Fire and Road Service Areas: Fire: Fire Protection Area No. 1 102 Womens Bay Fire Department 103 Kodiak Airport Fire District 104 Road: Monashka Bay Road Service Area 105 Service Area No. 1 106 Womens Bay Road Service Area 107 Bay View Road Service Area 108 Service Area No. 2 109 L.E.P.C. 110 Land Sales 111 Buildings and Grounds 112 Woodland Acres Street Light Service Area 113 Trinity Islands Street Light Service Area 114 Tourism Development 115 Commercial Passenger Vessel 116 Mission Lake Tide Gate 117 Nonmajor Capital Project Funds: Combining Balance Sheet 118 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) 119 Nonmajor Enterprise Funds: Combining Statement of Net Position 120 Combining Statement of Revenues, Expenses, and Changes in Net Position 121 Combining Statement of Cash Flows 122 Enterprise Funds: Schedule of Revenues, Expenses, and Changes in Net Position – Budget and Actual: Municipal Solid Waste Collection and Disposal 123 Hospital Facilities 124 Long Term Care Center 125 Kodiak Fisheries Research Center 126 911 Service Fund 127 Research Court Apartments 128 KODIAK ISLAND BOROUGH TABLE OF CONTENTS, CONTINUED Page Supplementary Bond Schedules: Summary of Bonded Debt Service Requirements to Maturity 129 General Obligation Bond, 2021 Series One – Retirement Schedule 130 General Obligation Bond, 2012 Series A / 2021 Series 2 – Retirement Schedule 131 General Obligation Bond, 2012 Series B – Retirement Schedule 132 General Obligation Bond, 2013 Series One / 2021 Series Three – Retirement Schedule 133 General Obligation Bond, 2014 Series One / 2021 Series Four – Retirement Schedule 134 General Obligation Bond, 2015 Series Three – Retirement Schedule 135 General Obligation Bond, 2015 Series Three – Retirement Schedule 136 General Obligation Bond, 2016 Series One – Retirement Schedule 137 General Obligation Bond, 2016 Series One – Retirement Schedule 138 General Obligation Bond, 2016 Series Three – Retirement Schedule 139 General Obligation Bond, 2018 Series A – Retirement Schedule 140 General Obligation Bond, 2020 Series One A – Retirement Schedule 141 General Obligation Bond, 2020 Series One B – Retirement Schedule 142 STATISTICAL SECTION: Statistical Section Index Net Position by Component – Last Ten Fiscal Years 143 Changes in Net Position – Last Ten Fiscal Years 144 Fund Balances of Governmental Funds – Last Eight Fiscal Years 145 Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 146 General Revenues by Source – Last Ten Fiscal Years 147 Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years 148 Direct and Overlapping Property Tax Rates and Contributions to the School District – Last Ten Fiscal Years 149 Property Tax Levies and Collections – Last Ten Fiscal Years 150 Principal Property Tax Payers – Current Year and Ten Years Ago 151 Ratios of Net Bonded Debt– Last Ten Fiscal Years 152 Computation of Direct Debt 153 Legal Debt Margin Information – Last Ten Fiscal Years 154 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures and Transfers – Last Ten Fiscal Years 155 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 156 Demographic and Economic Statistics – Last Ten Fiscal Years 157 Miscellaneous Statistical Data – Last Ten Fiscal Years 158 Average Monthly Employment & Earnings – Last Ten Fiscal Years 159 Property Value, Construction and Bank Deposits – Last Ten Fiscal Years 160 Full-Time Equivalent Borough Employees by Function/Program – Last Ten Fiscal Years 161 Operating Indicators by Function – Last Ten Fiscal Years 162 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years 163 INTRODUCTORY SECTION 1 Kodiak Island Borough Finance Department 710 Mill Bay Road  Kodiak, Alaska 99615 December 7, 2021 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 (GAAP) in the United States of America 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 annual comprehensive financial report of the Kodiak Island Borough (Borough) for the fiscal year ended June 30, 2021. 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 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, 2021, are presented fairly, in all material respects, 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 unmodified (“clean”) opinion on the Borough’s financial statements for the fiscal year ended June 30, 2021. The independent auditor’s report is presented as the first component of the financial section of this report. 2 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 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 the 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 and approximately 250 miles south of Anchorage. 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 6,560 square miles, making it slightly smaller than the State of Massachusetts and serves a population of 12,998 (US Census 2019 estimate). 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 taxes 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, community and economic development, health, culture and recreation and solid waste collection and disposal. The Borough is also 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. Budgetary Accounting and Internal Controls 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 30th. The assembly is required to hold public hearings on the proposed budget and to adopt a final budget by no later than June 10th. The appropriated budget is prepared by fund and department. 3 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 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 funds – 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. 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. State economy. The State of Alaska has experienced budget shortfalls for several years and these factors are impacting the communities within the state due to decreased state grant funding, decreased revenue sharing and decreases in program payments such as School Construction Debt Reimbursements. Recently, the State has not approved their budget until after the Borough’s June 10th budget adoption deadline. This means the largest State received revenue, School Construction Debt reimbursements, is unknown when our levy rates are determined. The shortfall in revenues that occur due to the State’s late passage of their budget has lead to several years of diverting money from the ongoing needs of infrastructure building repairs and maintenance to paying for unreimbursed school construction debt payments. Local economy. The economic condition of the Kodiak Island Borough remains guarded. 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 600 commercial vessels and consistently ranks among the top ten ports in the United States in terms of amount and value of product delivered. Severance tax revenues on sea products from have been decreasing from a high of $1,892,754 in FY2012 to $996,833 in FY2021. Federal and state environmental and quota restrictions as well as COVID related supply chain disruptions continue to impact revenues. Labor shortages remain an ongoing concern for all local businesses. Tourism also has a strong presence in Kodiak, however the recent trends of online bookings and the construction of a new hotel within the city limits, coupled with remote locations which cannot be readily monitored, may make the transient tax revenues an unreliable indicator of the economy. In FY2018 total revenue was $109,598 and since then the revenues have seen a slow and steady decrease to $50,383 in FY2021. Commercial Passenger Vessel Tax (Cruise ship tax) has increased from $13,925 in FY2015 to $54,220 in FY2021. 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 significant contribution to the Kodiak community. 4 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. At June 30, 2021, the unemployment rate for the Kodiak Island Borough was 5.5% compared to the State of Alaska’s rate of 6.6%. Long-term financial planning. The Borough adopts a strategic plan. In this plan, the Borough decides what its goals and objectives are for the next 3-5 years. To view the complete Strategic plan, you can visit our web site at www.kodiakak.us. The basis of the strategic plan is:  Essential governmental services are to be provided at a level equal to or better than the level previously provided. Plan for revenues and expenses to create a government that is more efficient, less costly and more accountable to ensure a financially sustainable borough for future generations.  All services are to be constantly examined to ensure that they are provided in an efficient and effective manner and that unnecessary program costs are eliminated.  Each department’s progress in achieving their objectives is reviewed and monitored throughout the budget year. 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 Annual Comprehensive Financial Report (Annual Report) for the fiscal year ended June 30, 2020. This was the thirty-first 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 efficiently organized annual comprehensive 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 Annual Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to 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 to 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, Dave Conrad Dora Cross Interim Borough Manager Director of Finance 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, 2020 Executive Director/CEO 5 6 Electorate Borough Manager Borough Attorney Engineering/ Facilities Director Bayside Fire Chief Finance/MIS Director Borough Mayor Borough Assembly Community Development Director Secretary III Maintenance Mechanic KFRC Maintenance Engineer KFRC Interpretive Spec/Rec. Solid Waste Mgr/ Environ. Spec. Solid Waste Baler/Landfill Supervisor Treatment Plant Operator Lead Baler Operator I Baler Operator II Baler Operator I Baler Operator I Baler Operator I HR Officer Executive Assistant Assessor Associate Planner/ENF Associate Planner/LRP Code Enforcement Officer Secretary III Property Appraiser Lead Appraiser Technician Appraiser Technician Assessment Clerk I General Accountant Accounting Tech Accounts Payable Accounting Tech Payroll Revenue Accountant Secretary III IT Supervisor Programmer/ Analyst GIS Analyst Cashier Borough Clerk Assistant Clerk Deputy Clerk Kodiak Island Borough Fiscal Year 2021 Assistant Director Projects Inspector Projects Assistant KFRC Interpretive Spec/Rec. Grant Writer/ Spec Proj Support Resource Mgt Officer Landfill Attendant Treatment Plant Operator Treatment Plant Operator Trainee PC Network Tech II MAYOR AND ASSEMBLY MEMBERS 7 Aimee Williams, Duane Dvorak, At Large, 2023 At Large, 2022 Bill Roberts, Mayor, 2022 Julie Kavannaugh, Geoffrey Smith, At Large, 2023 At Large, 2023 Dennis Symmons, James Turner, At Large, 2021 At Large, 2021 Scott Arndt, Deputy Presiding Officer (DPO), At Large, 2022 KODIAK ISLAND BOROUGH KODIAK, ALASKA BOROUGH OFFICIALS YEAR ENDED JUNE 30, 2021 MAYOR William Roberts 2022 ASSEMBLY Scott Arndt 2022 Dennis Symmons 2021 Duane Dvorak 2022 James Turner 2021 Julie Kavanaugh 2023 Aimee Williams 2023 Geoffrey Smith 2023 MANAGEMENT Michael Powers Borough Manager Dora Cross Finance Director/Treasurer Alise Rice Borough Clerk Vacant Community Development Director Seema Garoutte Borough Assessor Vacant Fire Chief Dave Conrad Engineering and Facilities Director Paul Van Dyke IT Supervisor Keene & Currall Borough Attorney (Contracted Firm) 8 9 FINANCIAL SECTION 10 3000 C Street N. Suite 201 Anchorage, Alaska 99503 Phone 907-274-2992 Fax 907-274-2993 Offices in Juneau and Soldotna A Professional Corporation Independent Auditor’s Report The Honorable Mayor and Members of the Assembly Kodiak Island Borough Kodiak, Alaska Report on the Financial Statements We have audited the accompanying 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 the Kodiak Island Borough, as of and for the year ended June 30, 2021, 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 our audit in accordance with 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. 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 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. The Honorable Mayor and Members of the Assembly Kodiak Island Borough 11 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 Island Borough, as of June 30, 2021, 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, Budgetary Comparison Schedules and notes to RSI, and Schedules of Borough’s Proportionate Share the of Net Pension and OPEB Liabilities (Assets) and Contributions for the Public Employees’ Retirement System on pages 13-27, 85-88, and 89-94, respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part 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 the 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; 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, and Schedules of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual; Nonmajor Capital Project Funds: Combining Balance Sheet and Combining Statement of Revenues, Expenses and Changes in Fund Balances (Deficit); Nonmajor Enterprise Funds: Combining Statement of Net Position, Combining Statement of Revenues, Expenses, and Changes in Net Position, and Combining Statement of Cash Flows; Enterprise Funds: Schedule of Revenues, Expenses, and Changes in Net Position – Budget and Actual, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The Honorable Mayor and Members of the Assembly Kodiak Island Borough 12 The Additional Supplementary Information listed on the previous page 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. In our opinion, the Additional Supplementary Information listed on the previous page 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. We also have previously audited, in accordance with auditing standards generally accepted in the United States of America, the Kodiak Island Borough’s basic financial statements for the year ended June 30, 2020, which are not presented with the accompanying financial statements and we expressed unmodified opinions on the respective financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information. That audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Kodiak Island Borough’s basic financial statements as a whole. The individual fund financial statements and schedules for the year ended June 30, 2020 are presented for purposes of additional analysis and are not a required part of the basic 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 June 30, 2020, basic financial statements. The information has been subjected to the auditing procedures applied in the audit of those 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 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 2020 individual fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements from which they have been derived. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 7, 2021, 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Kodiak Island Borough’s 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. Anchorage, Alaska December 7, 2021 MANAGEMENT’S DISCUSSION AND ANALYSIS KODIAK ISLAND BOROUGH Management’s Discussion and Analysis June 30, 2021 13 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, 2021. We encourage readers to consider the information presented herein in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 1 - 4 of this report. FINANCIAL HIGHLIGHTS  The assets and deferred outflows of resources of the Kodiak Island Borough exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $196,126,746 (net position). Of this amount, $69,664,370 (unrestricted net position) may be used to meet the Borough’s ongoing obligations to citizens and creditors.  The Borough’s total net position increased by $422,544 (0.22%). The governmental net position increased by $526,423 (0.37%) and the business-type net position decreased by $103,879 (0.20%).  Total equity in the central treasury decreased by $1,596,188 (1.66%). The governmental central treasury decreased by $2,252,475 (2.86%) and the business-type central treasury increased by $656,287 (3.72%).  The Borough’s total noncurrent liabilities, due in more than one year decreased by $6,337,199 (6.39%). Accrued leave increased $26,148 (12.83%), notes/bonds payable decreased by $5,830,350 (6.72%), net pension and OPEB liabilities decreased by $1,112,997 (17.63%), and landfill closure costs increased by $580,000 (9.70%).  At the end of the current fiscal year, the Borough’s governmental funds reported combined fund balances of $60,830,044. This was an increase of $2,082,978 (3.55%), compared to the net change increase in the prior year of $2,501,582. Approximately 12.26% of the current year’s ending fund balance, or $7,454,071, is available for spending at the government’s discretion (unassigned fund balance).  At the end of the current fiscal year, the unassigned fund balance for the General Fund was $7,454,071. This amounts to 69.88% of total General Fund expenditures. OVERVIEW OF THE FINANCIAL STATEMENTS The management discussion and analysis serve as an introduction to the Borough’s basic financial statements, which contain the following: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains 4) required supplementary information and 5) other supplementary information in addition to the basic financial statements. KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 14 1) Government-wide Financial Statements (pages 28-29) The government-wide financial statements are designed to provide readers with a broad overview of the Borough’s finances in a manner similar to a private-sector business. These statements combine and consolidate short-term, spendable resources with capital assets and long-term obligations. The government- wide financial statements are divided into the following three categories:  Governmental activities – These are functions of the Borough that are financed primarily by taxes, intergovernmental revenues, and charges for services. The Borough’s governmental activities include general government, public safety, community and economic development, emergency preparedness, non-profit contributions for health and social services and education, culture and recreation, service district maintenance, primary and secondary education, and debt service.  Business-type activities – These are functions of the Borough in which customer user fees and charges are used to help cover all or most of the cost of services they provide. The Borough’s business-type activities include solid waste collections and disposal (landfill) facility, E911 emergency system, and long-term property leases for various Borough-owned buildings including a hospital, long-term care center and a fisheries research center.  Component unit – The Borough also includes the Kodiak Island Borough School District in its report as it is financially accountable for this “component unit”. Financial information for the school district is reported separately from the financial information presented for the primary government itself. The Statement of Net Position is designed to be a bottom line for the Borough’s activities and component unit. This statement combines and consolidates governmental funds’ current financial resources (short- term spendable resources) with capital assets, including infrastructure and long-term obligations. Net positions are the difference between the Borough’s assets and deferred outflows of resources and its liabilities and deferred inflows of resources. Increases or decreases in net position may serve as a useful indicator of whether the financial position of the Borough is improving. The Statement of Activities reflects the expenses of a given function, which are offset by program revenues. All changes in net position are reported as soon as the underlying event given rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods. Program revenues are defined as charges for services, operating grants and contributions, and capital grants and contributions directly associated with a given function. Both of the government-wide financial statements distinguish functions of the 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). KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 15 The government-wide financial statements include not only the Borough itself (known as the primary government), but also the legally separate school district for which the Borough is financially accountable. Financial information for this component unit is reported separately from the financial information presented for the primary government itself. 2) Fund Financial Statements (pages 30-36) A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Borough, like other state and local governments, uses fund accounting to ensure and demonstrate fiscal accountability. All the funds of the Borough can be divided into two categories: a) governmental funds and b) proprietary funds. Number of Funds Fund Type Major Non-Major Total Funds Governmental Funds: General Fund 1 - 1 Debt Service Fund 1 - 1 Special Revenue 2 16 18 Capital Projects - 7 7 Total Governmental Funds 4 23 27 Proprietary Funds: Enterprise Funds 4 2 6 Total of All Funds 33 a) Governmental Funds (pages 85-88 and 95-119) – 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 the short-term view of the Borough’s operations. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for the governmental funds with similar information presented for governmental activities in the government-wide financial statements. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The 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 the budget. b) Proprietary Funds (pages 34-36 and 120-128) – The only Proprietary Fund type that the Borough uses is enterprise funds. Proprietary fund statements provide the same type of information as the government- wide financial statements, only in more detail. Enterprise funds are used to account for activities for which a fee is charged to external users for goods and services. The 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. KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 16 3) Notes to the Basic Financial Statements (pages 37-84) The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. 4) Required Supplementary Information (pages 85-94) The required supplementary information (RSI) includes required budgetary supplementary information and the schedules of the proportionate share of the net pension and OPEB liabilities and pension/OPEB contributions. 5) Additional Supplementary Information (page 95-128) The basic financial statements are followed by additional supplementary information on individual fund activity. GOVERNMENT-WIDE FINANCIAL ANALYSIS Statement of Net Position (page 28) As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the Borough, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $196,126,746 at June 30, 2021, compared to $195,704,202 at June 30, 2020. The largest portion of the Kodiak Island Borough’s net position ($126,308,841 or 64.40%) reflects its investment in capital assets (e.g. land, buildings, equipment and infrastructure) net of any related debt used to acquire those assets. The 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 related 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. 0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total Net Position of Government and Business-Type Activities (last 10 years) Business Type Activities Governmental Activites KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 17 The total net position has increased over the past 10 years indicating an improving financial position as illustrated by the graph on the previous page. The Borough has maintained a stable financial position and the $69,664,370 of the unrestricted net position may be used to meet the Borough’s ongoing obligations to citizens and creditors. Governmental Business-type Total Activities Activities Activities 2021 2020 2021 2020 2021 2020 Current and other assets $ 78,316 80,668 21,536 21,273 99,852 101,941 Capital assets 151,600 157,292 64,366 65,670 215,966 222,962 Total assets 229,916 237,960 85,902 86,943 315,818 324,903 Deferred outflows of resources 1,292 825 353 226 1,645 1,051 Total assets and deferred outflows of resources $ 231,208 238,785 86,255 87,169 317,463 325,954 Long-term liabilities $ 62,806 67,609 30,059 31,738 92,865 99,347 Other liabilities 24,075 27,979 3,256 2,500 27,331 30,479 Total liabilities 86,881 95,588 33,315 34,238 120,196 129,826 Deferred inflows of resources 950 346 191 77 1,141 423 Total liabilities and deferred inflows of resources 87,831 95,934 33,506 34,315 121,337 130,249 Net position: Net investment in capital assets 86,460 89,443 39,849 39,561 126,309 129,004 Restricted 154 — — — 154 — Unrestricted 56,763 53,408 12,900 13,292 69,663 66,700 Total net position $143,377 142,851 52,749 52,853 196,126 195,704 Changes in Net Position During the current fiscal year, the Borough’s total net position increased by $422,544 (0.22%). This compares to an increase of $4,964,486 for the year ended June 30, 2020. Of the $422,544 increase, the governmental net position increased by $526,423 (0.37%) and the business-type net position decreased by $103,879 (0.20%). Governmental: Revenues increased overall by $1,884,516 (6.67%) primarily due to increased Coronavirus related federal grants and overall expenditures increased by $3,007,528 (11.30%) as compared to FY2020 for the same reason. Business-type: Revenues decreased overall by $853,641 (10.12%) due to less lease income and depressed interest earnings, overall expenses increased by $932,474 (13.82%) as compared to FY2020 primarily due to repair and maintenance projects. KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 18 Statement of Activities (page 29) The following table shows the changes in net position for fiscal years 2021 and 2020 for both governmental and business-type activities. 2021 2020 2021 2020 2021 2020 Revenues: Program revenues: Charges for services $ 989 1,043 7,059 7,416 8,048 8,459 Operating grants and contributions 479 2,579 52 (20) 531 2,559 Capital grants 138 438 — — 138 438 General revenues: Property taxes 17,449 17,228 — — 17,449 17,228 Grants and entitlements not restricted to specific programs 8,747 3,371 — — 8,747 3,371 Land sales 10 12 — — 10 12 Excise taxes 702 390 — — 702 390 Severance taxes 1,100 1,287 — — 1,100 1,287 Other 354 472 428 592 782 1,064 Investment earnings 189 1,454 39 444 228 1,898 Total revenues 30,157 28,274 7,578 8,432 37,735 36,706 Expenses: General government 5,368 5,495 — — 5,368 5,495 Public safety 691 697 — — 691 697 Community and economic development 779 792 — — 779 792 Emergency preparedness 5 4 — — 5 4 Health and social welfare 5,257 157 — — 5,257 157 Education, culture and recreation 20 21 — — 20 21 Parks and recreation 20 33 — — 20 33 Service district maintenance 648 786 — — 648 786 Primary and secondary education 15,138 16,293 — — 15,138 16,293 Interest on long-term debt 1,705 2,346 — — 1,705 2,346 Municipal solid waste collection and disposal — — 3,741 2,796 3,741 2,796 Hospital facilities — — 1,078 1,303 1,078 1,303 Long Term Care Center — — 1,247 946 1,247 946 Kodiak Fisheries Research Center — — 1,237 1,335 1,237 1,335 911 services — — 301 295 301 295 Research Court Apartments — — 78 75 78 75 Total expenses 29,631 26,624 7,682 6,750 37,313 33,374 Change in net position before transfers 526 1,650 (104) 1,682 422 3,332 Transfers — (45) — 45 — — Transfers - component unit — 1,633 — — — 1,633 Change in net position 526 3,238 (104) 1,727 422 3,332 Net position, beginning of year 142,851 139,613 52,853 51,126 190,740 190,739 Net position, end of year $ 143,377 142,851 52,749 52,853 191,162 194,071 Governmental activities Business-type activities Total activities Changes in Net Position (in thousands) KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 19 Governmental Activities – increased the Borough’s net position by $526,423. Revenues: The two largest sources are Property Taxes and Grants at $17,449,358 and $8,747,105, respectively. Grants was the largest increasing revenue by $5,375,455 (159.43%) and Operating Grants and Contributions was the largest decreasing revenue by $2,099,714 (81.42%). Overall revenues increased by $1,884,516 (6.67%) from 2020. Expenses: The largest functional expense is Primary and Secondary Education, which amounted to $15,137,962, a 7.09% decrease from 2020 due to decreased funding to the school district. General Government was the second largest expense at $5,367,776, a 2.31% decrease from 2020 due to vacant positions. All other function categories decreased with the exception of health and social welfare which increased by $5,099,505 due to the distribution of Coronavirus federal grant money. Overall, total expenses increased by $3,007,528 (11.30%) from 2020. Charges for services 3%Operating grants and contributions 2% Property taxes 58% Grants and entitlements not restricted to specific programs 29% Excise taxes 2% Severance taxes 4% Investment earnings 1% Other 1% FY2021 Governmental Activities - Revenue Sources General government 18% Public safety 2% Community and economic development 3% Health and social services 18% Primary and secondary education 51% Interest on long-term debt 6% FY2021 Governmental Activities - Functional Expenses KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 20 Business Activities - decreased the Kodiak Island Borough’s net position by $103,879 (0.20%). Revenues: The largest source is Charges for Services at $7,059,250 which decreased by $357,125 (4.82%). Of that decrease, $267,110 was due to reduced lease income. Interest earnings were the largest decrease in revenues by $404,785 as compared to 2020, due to depressed interest rates. Overall, total revenues decreased by $853,641 (10.12%) from 2020. Expenses: The largest source is from Municipal Solid Waste Collection and Disposal, which totaled $3,741,080, a 33.82% increase from 2020 and was the largest increase in expenses at $945,411 as compared to 2020. $656,773 of the increase is attributable to closure/post-closure expenses and $172,180 is due to increased use by the community of free self-haul use of the landfill. The largest decrease in business activity expenses was Hospital Facilities at $224,612 (17.24%) due to a reduction in repair and maintenance costs as compared to 2020. Overall, total expenses increased by $932,474 (13.82%) from 2020. Personnel services 18% Contracted services 6% Maintenance and repair 3%Depreciation 37% General Administration 13% Recycling services 4% Closure/post closure 12% E911 service 4% Contributions 3% FY2021 Business-Type Activities - Expenses Charges for Services 93% Interest Earnings 1%Other 6% FY2021 Business-Type Activities - Revenue KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 21 FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS As noted earlier, the Borough uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. These funds are accounted for using the modified accrual basis of accounting. Governmental Funds – The focus of the 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 Borough’s financing requirements. Unassigned 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 Borough’s governmental funds reported combined ending fund balances of $60,830,044, an increase of $2,082,978 (3.55%) in comparison to the beginning of the year. Of this total amount, $33,149 constitutes nonspendable, $153,535 was restricted, $46,360,958 was committed, $6,828,331 was assigned, and $7,454,071 was unassigned fund balance. The General Fund is the main operating fund of the Borough. At the end of the current fiscal year, nonspendable fund balance of the General Fund was $33,149, with an unassigned fund balance of $7,454,071 for a total fund balance of $7,487,220. As a measure of the General Fund’s liquidity, it may be useful to compare fund balance to total expenditures. Unassigned fund balance represents 69.88% of total General Fund expenditures, a decrease of 19.79% from 2020. Major Fund Highlights  General Fund – Fund balance increased by $1,392,671 (22.85%) during the current fiscal year. Total revenues were $461,147 more than anticipated due to 1) increased property tax revenues derived from increased tax assessments, and 2) increased excise tax revenues due to an increase in tax rates. Expenditures were $943,524 less than anticipated due to vacant positions, a decrease in liability insurance costs, and banking fees. Total fund balance is $7,487,220 and meets the minimum required reserve balance of $5,850,925.  Education Support (Special Revenue Fund) – Fund balance decreased by $3,663 during the current fiscal year. The key factor leading to this change was increased repair and maintenance expenses.  Facilities Fund (Special Revenue Fund) – Fund balance decreased by $688,744 (1.70%) during the current fiscal year. Investment income, the sole revenue source for the fund, was $606,428 less than anticipated due to decreased treasury interest rates and a large number of debt refunding’s taking advantage of lower interest costs. The largest expense of the fund was an $832,316 transfer to the Education Debt Service Fund to help cover required debt service payments. $7,487,220 $55,731 $39,925,298 $641,401 $12,720,394 0 20,000,000 40,000,000 60,000,000 General Education Facilities Debt Service Non-Major Funds GOVERNMENTAL FUNDS - FUND BALANCE KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 22  Education Debt Service Fund – Fund balance increased by $75,487 (13.34%), due to property tax revenues and timing of bond principal and interest payments. The fund balance is $641,401 and meets the minimum required reserve balance of $275,000. Other Governmental Funds (Non-Major Funds) Highlights Other Governmental funds – Aggregate fund balance increased by $1,307,227 (11.45%) during the current fiscal year; special revenue funds increased $941,686 and capital projects funds increased $365,541.  Fire Protection Area No. 1 (Special Revenue Fund) – Fund balance increased by $280,844. The key factors leading to this were a vacant fire chief position and completion of capital improvement projects early in the year.  Womens Bay Fire Department (Special Revenue Fund) – Fund balance increased by $73,466. The key factor leading to this was no payments made for capital project improvements.  Service Area No. 1 (Special Revenue Fund) – Fund balance increased $147,028. The key factors leading to this were reduced district maintenance costs and a refund of unused paving contract payments.  Land Sales (Special Revenue Fund) – Fund balance increased by $91,442. The key factor leading to this was the payoff of two land sale contracts.  Building and Grounds (Special Revenue Fund) – Fund balance increased by $333,991. The key factor leading to this was fewer repair and maintenance and administrative expenses due to vacant permanent and seasonal positions.  Tourism Development (Special Revenue Fund) – Fund balance decreased by $23,829. The key factors leading to this were reduced revenues due to the Coronavirus pandemic and level funding of tourism generating expenses.  Commercial Passenger Vessel (Special Revenue Fund) –Fund balance increased by $54,494.  Kodiak High School Renovation Fund (Capital Projects Fund) – Fund increased by $410,422 which was due to the final bond sale needed to pay for the final project expenses.  Renewal and Replacement Projects (Capital Project Fund) – Fund balance decreased by $1,625,423 primarily due to no mill rate income and a transfer out to the Education Debt Service Fund to pay for debt service payments unreimbursed by the State of Alaska.  School Renewal and Replacement Facilities Bond Projects (Capital Project Fund) – Fund balance increased by $1,995,820 due to the sale of bonds to complete school-related projects. KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 23 Proprietary Funds – The Borough’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. As of the end of the current fiscal year, the Borough’s proprietary funds reported combined net position of $52,749,737, a decrease of $103,879 (.20%) compared to the beginning of the year. Equity in central treasury and restricted cash and equivalents increased by $656,287 (3.72%) in comparison to the beginning of the year. Major Fund Highlights  Municipal Solid Waste Collection and Disposal (Enterprise fund) – Net position increased by $449,221 (2.41%) due to decreased depreciation and pension and OPEB liabilities.  Hospital Facilities (Enterprise Fund) – Net position increased by $217,595 (1.33%) due to decreased repair and maintenance expenses.  Long-Term Care Center (Enterprise Fund) – Net position decreased by $110,437 (1.63%) due to increased repair and maintenance expenses.  Kodiak Fisheries Research Center (Enterprise Fund) – Net position decreased by $653,124 (6.10%) due to decreasing lease revenues and increasing repair and maintenance expenses. Other Nonmajor Fund Highlights  911 Services (Enterprise Fund) – Since the revenues to this fund are passed through to the City of Kodiak, the net position at year-end is $0.  Research Court Apartments (Enterprise Fund) – Net position decreased by $7,134 (2.26%) due to increased insurance expenses. 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 Municipal Solid Waste Hospital Facilities Long-Term Care Center Kodiak Fisheries Research Center Other Non- Major Funds 2021 Proprietary Funds - Operating Revenue versus Operating Expenses Operating Revenues Operating Expenses KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 24 GENERAL FUND BUDGETARY HIGHLIGHTS (pages 85-86) The Borough’s budget is prepared, according to Alaska law, using a basis of accounting that is consistent with accounting principles generally accepted in the United States of America. The most significant budget areas are in the General Fund. Within general fund revenues, the largest difference between budgeted and actual revenues was tobacco excise tax receiving $300,675 more than budgeted and fisheries business taxes receiving $149,475 more than budgeted. Overall, actual revenues were $461,147 (3.15%) more than budgeted. Within general fund expenditures by function, the largest difference between budgeted and actual expenses was the general administration department expending $519,173 less of Coronavirus expenses than anticipated. The engineering/facilities department expended $117,989 more than budgeted primarily due to unfunded projects staff would have charged their time to. Overall, actual expenditures were $943,524 (8.13%) less than budgeted. 0 2,000,000 4,000,000 6,000,000 8,000,000 Property Taxes Severance Taxes Excise Tax State Sources Federal Sources Other FY2021 Budget to Actual Comparison of Revenues Budgeted Actual 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 General Government Public Safety Community & Economic Development Emergency Preparedness Non-Profit Parks and Recreation FY2021 Budget to Actual Comparison of Expenditures - By Function Budgeted Actual KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 25 CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets (Note 8 on page 52-57) – The Borough’s investment in capital assets includes land, buildings and improvements, improvements other than buildings, machinery and equipment, and construction work-in-progress. During the year, the construction work-in-progress was increased due to an upsurge in established construction projects for the year as well as increased activity for the PKIMC Retaining Wall and the KFRC Alarm Replacement/Upgrade projects. Building and improvements were decreased due to depreciation expenses. As of June 30, 2021, the total net book value was $215,965,387, a decrease of $6,996,714 (3.14%). This net decrease is primarily due to regular depreciation. The following table displays the capital assets (net of accumulated depreciation) at June 30, 2021, with a comparison to 2020. 2021 2020 2021 2020 2021 2020 Artwork $ — — 16,091 16,091 16,091 16,091 Land 22,752,807 23,519,407 1,661,499 1,661,499 24,414,306 25,180,906 Construction work-in-progress 6,954,036 6,790,421 31,254,056 30,416,468 38,208,092 37,206,889 Buildings and improvements 107,409,675 111,695,399 28,786,910 30,355,028 136,196,585 142,050,427 Improvements other than buildings 13,085,924 13,610,011 1,125,738 1,953,217 14,211,662 15,563,228 Equipment 1,131,566 1,335,303 848,473 552,667 1,980,039 1,887,970 Infrastructure 265,730 341,653 — — 265,730 341,653 Unclassified plant in service — — 672,882 714,937 672,882 714,937 $ 151,599,738 157,292,194 64,365,649 65,669,907 215,965,387 222,962,101 Governmental activities Business-type activities activities Total Long-Term Debt (Note 10, pages 59-65) – At the end of the current fiscal year, the Borough had total bonded debt outstanding of $61,730,000. This entire amount is backed by the full faith and credit of the Borough. The remainder of the Borough’s debt represents loans and notes payable, compensated absences, landfill closure/post-closure costs, and revenue bonds payable. The following table displays the long-term debt at June 30, 2021, with a comparison to 2020. Governmental Business-type activities activities 2021 2020 2021 2020 2021 2020 General obligation bonds, including premium $ 65,140,020 67,849,686 — — 65,140,020 67,849,686 Compensated absences 175,359 193,433 142,684 118,731 318,043 312,164 Landfill post closure care costs — — 6,559,000 5,979,000 6,559,000 5,979,000 Loans/notes payable — — 13,042,701 13,911,774 13,042,701 14,411,774 Revenue Bonds Payable — — 11,996,920 12,196,935 11,996,920 12,196,935 $ 65,315,379 68,043,119 31,741,305 32,206,440 97,056,684 100,749,559 Total Activities The Borough’s total debt decreased by $3,192,875 (3.18%) during the current fiscal year. This decrease can be attributed to regularly scheduled bond payments. There is no general obligation debt limit imposed on the Borough by the State Constitution, state statutes, or the Borough’s charter or code. KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 26 ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES Economic Factors:  Kodiak continues to be one of the nation’s largest producers of seafood. The Borough has the largest and most diversified fishing port in Alaska and is consistently ranked in the top five largest fishing ports in the U.S. in terms of value landed. New fisheries, such as kelp and oyster farming, are being cultivated.  Although commercial fishing activities (excluding tourist-based fishing) were relatively unaffected by COVID restrictions, processing activities saw operation interruptions related to both staffing and supply chain disruptions and increased costs due to plant safety modifications and personal protective equipment purchases.  Tourism continues to increase; however, the number of cruise ships stopping in Kodiak has not returned. Revenues from this source are expected to be severely impacted for several years.  Kodiak’s general real estate market has been increasing since the late 1980s. The demand for affordable housing increased with the 2016 closure of a major mobile home park within the Borough and despite the recent construction of several affordable housing developments, housing is still a concern. The biggest constraint to the construction of housing is land availability. The Coast Guard has recently started to build new and renovate current housing in anticipation of their increased personnel needs. Although Kodiak has begun to see an increase in both sales and sale prices, the average home cost of $326,000 is about 5% lower than the state average of $345,000.  The preliminary unemployment rate on June 30, 2021, is 5.5% compared to 8.0% on June 30, 2020. The hiring of seasonal cannery and other fisheries-related workers traditionally peaks around July and is virtually nil in December. This generally accounts for seasonal highs and lows in the local unemployment rate. This rate has fluctuated from 4.7% to 6.2% over the last five years with the overall average being 5.2%. The higher unemployment percentage in June 2020 includes the impact the pandemic had on local employment for fisheries and tourism workers.  Kodiak is home to the largest United States Coast Guard Base (USCG) in the United States employing around 1,200 people and providing vital services to the marine industries that are an integral part of Kodiak’s make-up. Base Kodiak supports both cutters and aircraft and is homeport to three ships and contains three hangers that house 15 various aircraft. Future growth is expected over the next few years and could include four new ships and two new aircraft along with the necessary increase in personnel and support staff. KODIAK ISLAND BOROUGH Management’s Discussion and Analysis, Continued 27 Next Year’s Budgets and Rates:  No change to the Area-wide mill rate.  Although assessed valuations continue to increase, general fund property tax revenue increases are limited to new property and improvements and increases to the Kodiak area CIP.  Fish revenues from the State and from local sources are projected to decrease due to quota and catch limit restrictions.  No increase to the State of Alaska’s ceiling of 22% for political subdivision contributions to PERS (Public Employees Retirement System).  The Borough does not currently have any plans to issue new bonds however seven series of existing bonds were refunded in June 2021. The refunding is expected to save $453,000 in 2022 and $4.8 million over the next 12 years.  Landfill user fees are expected to increase due to the landfill expansion and the new leachate treatment plant. All of these factors were considered in preparing the Borough’s budget for the fiscal year 2022. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the 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. BASIC FINANCIAL STATEMENTS Component Primary government unit Total reporting entity Governmental Business-type School activities activities Total District 2021 2020 Equity in central treasury $ 76,392,342 18,297,317 94,689,659 — 94,689,659 96,285,847 Due from primary government — — — 16,281,981 16,281,981 16,204,948 Receivables: State of Alaska 145,811 — 145,811 2,411,889 2,557,700 2,164,462 Federal government 92,440 — 92,440 — 92,440 104,391 Property taxes, net of allowance of $17,700 301,076 — 301,076 — 301,076 344,724 Severance taxes 252,855 — 252,855 — 252,855 190,792 Excise taxes 348,643 — 348,643 — 348,643 113,560 Interest 262,717 — 262,717 — 262,717 371,060 Land sales contracts receivable 60,721 — 60,721 — 60,721 113,408 Accounts and other receivables 104,034 498,021 602,055 — 602,055 1,328,118 Current portion of notes receivable — 131,260 131,260 — 131,260 126,751 Inventories — 154,265 154,265 682,708 836,973 945,106 Prepaid items 33,149 — 33,149 115,329 148,478 84,056 Restricted cash and equivalents — 1,327,877 1,327,877 — 1,327,877 1,327,356 Notes receivable — 1,016,798 1,016,798 — 1,016,798 1,148,058 Capital assets: Assets to be contributed — — — — — 198,774 Non-depreciable 29,706,843 32,931,646 62,638,489 — 62,638,489 62,403,886 Depreciable, net 121,892,895 31,434,003 153,326,898 783,115 154,110,013 161,461,368 Net OPEB assets 322,463 110,839 433,302 3,690,700 4,124,002 1,343,528 Total assets 229,915,989 85,902,026 315,818,015 23,965,722 339,783,737 346,260,193 Deferred outflows of resources: Related to bond refunding 552,469 156,911 709,380 — 709,380 — Pension and OPEB deferrals 739,579 196,525 936,104 4,858,814 5,794,918 4,919,821 Total deferred outflows of resources 1,292,048 353,436 1,645,484 4,858,814 6,504,298 4,919,821 Total assets and deferred outflows of resources $231,208,037 86,255,462 317,463,499 28,824,536 346,288,035 351,180,014 Liabilities: Accounts payable $334,491 685,944 1,020,435 1,722,973 2,743,408 2,959,052 Accrued compensation and related liabilities 165,213 — 165,213 2,963,005 3,128,218 3,475,773 Other accrued liabilities 526,343 88,391 614,734 — 614,734 1,881,047 Customer deposits 1,000 108,971 109,971 — 109,971 11,909 Unearned revenues 48,872 220,097 268,969 256,740 525,709 5,072,474 Due to component unit 16,281,981 — 16,281,981 — 16,281,981 16,204,948 Noncurrent liabilities: Due within one year: Accrued leave 61,204 26,914 88,118 — 88,118 108,388 Notes payable 6,656,065 2,125,926 8,781,991 24,937 8,806,928 7,277,255 Due in more than one year: Accrued leave 114,155 115,769 229,924 — 229,924 203,776 Notes payable 58,483,955 22,390,600 80,874,555 705,009 81,579,564 87,460,627 Net pension and OPEB liability 4,207,953 993,442 5,201,395 25,989,956 31,191,351 32,340,273 Landfill closure costs — 6,559,000 6,559,000 — 6,559,000 5,979,000 Total liabilities 86,881,232 33,315,054 120,196,286 31,662,620 151,858,906 162,974,522 Deferred inflows of resources: Related to bond refunding 428,246 53,214 481,460 — 481,460 — Pension and OPEB deferrals 521,550 137,457 659,007 2,534,469 3,193,476 4,163,146 Total deferred inflows of resources 949,796 190,671 1,140,467 2,534,469 3,674,936 4,163,146 Net position: Net investment in capital assets 86,459,718 39,849,123 126,308,841 758,178 127,067,019 129,858,157 Restricted: Commerical passenger vessel 153,535 — 153,535 — 153,535 — Student activities — — — 738,164 738,164 198,774 Unrestricted 56,763,756 12,900,614 69,664,370 (6,868,895) 62,795,475 53,985,415 Total net position 143,377,009 52,749,737 196,126,746 (5,372,553) 190,754,193 184,042,346 Total liabilities, deferred inflows of resources and net position $ 231,208,037 86,255,462 317,463,499 28,824,536 346,288,035 351,180,014 See accompanying notes to financial statements. (With summarized financial information for June 30, 2020) June 30, 2021 Statement of Net Position KODIAK ISLAND BOROUGH of Resources and Net Position Liabilities, Deferred Inflows Outflows of Resources Assets and Deferred 28 Program revenues Net (expense) revenue and changes in net position Operating Primary government Component unit Charges for grants and Capital Governmental Business-type School Total reporting entity Functions/Programs Expenses services contributions grants activities activities Total District 2021 2020 Primary government: Governmental activities: General government $5,367,776 942,701 178,115 112,378 (4,134,582) — (4,134,582) — (4,134,582) (4,083,171) Public safety 690,853 18,657 25,522 — (646,674) — (646,674) — (646,674) (657,341) Community and economic development 779,759 — 45,269 25,540 (708,950) — (708,950) — (708,950) (762,387) Emergency preparedness 5,257 — — — (5,257) — (5,257) — (5,257) (4,479) Health and social welfare 5,257,005 — — — (5,257,005) — (5,257,005) — (5,257,005) (157,500) Education, culture and recreation 20,397 — — — (20,397) — (20,397) — (20,397) (20,447) Parks and recreation 19,560 — — — (19,560) — (19,560) — (19,560) (32,561) Service district maintenance 647,976 27,600 — — (620,376) — (620,376) — (620,376) (758,766) Primary and secondary education 15,137,962 — — — (15,137,962) — (15,137,962) — (15,137,962) (16,293,027) Interest on long-term debt 1,704,793 — 230,218 — (1,474,575) — (1,474,575) — (1,474,575) 205,712 Total governmental activities 29,631,338 988,958 479,124 137,918 (28,025,338) — (28,025,338) — (28,025,338) (22,563,967) Business-type activities: Municipal solid waste collection and disposal 3,741,080 4,061,604 37,165 — — 357,689 357,689 — 357,689 1,338,738 Hospital facilities 1,077,905 1,384,272 — — — 306,367 306,367 — 306,367 81,755 Long Term Care Center 1,247,226 1,043,628 — — — (203,598) (203,598) — (203,598) 97,610 Kodiak Fisheries Research Center 1,237,187 499,485 14,793 — — (722,909) (722,909) — (722,909) (550,924) 911 service 301,032 — — — — (301,032) (301,032) — (301,032) (295,466) Research court apartments 77,483 70,261 — — — (7,222) (7,222) — (7,222) (25,267) Total business-type activities 7,681,913 7,059,250 51,958 — — (570,705) (570,705) — (570,705) 646,446 Total primary government 37,313,251 8,048,208 531,082 137,918 (28,025,338) (570,705) (28,596,043) — (28,596,043) (21,917,521) Component unit: School District $ 48,524,865 24,761 10,743,289 — (37,756,815) (37,756,815) (34,656,152) General revenues: Property taxes 17,449,358 — 17,449,358 — 17,449,358 17,228,428 Grants and entitlements not restricted to specific programs 8,747,105 — 8,747,105 33,745,235 42,492,340 36,644,214 Land sales 10,118 — 10,118 — 10,118 12,140 Severance taxes 1,100,413 — 1,100,413 — 1,100,413 1,286,750 Excise taxes 702,142 — 702,142 — 702,142 389,725 Support from primary government — — — 9,390,089 9,390,089 10,455,244 Investment earnings 188,577 38,817 227,394 — 227,394 1,897,751 Other 354,048 428,009 782,057 138,921 920,978 1,103,499 Total general revenues 28,551,761 466,826 29,018,587 43,274,245 72,292,832 69,017,751 Change in net position 526,423 (103,879) 422,544 5,517,430 5,939,974 12,444,078 Net position, at beginning of year, as previously stated 142,850,586 52,853,616 195,704,202 (11,661,856) 184,042,346 171,598,268 Cumulative effect of a change in accounting principle — — — 771,873 771,873 — Net position, at beginning of year, as restated 142,850,586 52,853,616 195,704,202 (10,889,983) 184,814,219 171,598,268 Net position, at end of year $143,377,009 52,749,737 196,126,746 (5,372,553) 190,754,193 184,042,346 See accompanying notes to financial statements. KODIAK ISLAND BOROUGH Statement of Activities Year ended June 30, 2021 (With summarized financial information for the year ended June 30, 2020) 29 Education Other Education Debt Service Governmental Assets General Support Facilities Fund Funds 2021 2020 Assets: Equity in central treasury $ 6,881,576 16,314,578 39,925,298 561,227 12,709,663 76,392,342 78,644,817 Receivables: State of Alaska 17,424 — — 73,842 54,545 145,811 48,989 Federal government — — — — 92,440 92,440 104,391 Property taxes, net of allowance of $18,056 69,465 160,706 — 38,641 32,264 301,076 344,724 Severance taxes 252,855 — — — — 252,855 190,792 Excise taxes 348,643 — — — — 348,643 113,560 Interest 262,717 — — — — 262,717 371,060 Land sales contracts, due within one year — — — — 9,897 9,897 17,143 Accounts and other receivables 25,618 — — — 78,416 104,034 605,702 Prepaid items 33,149 — — — — 33,149 57,926 Due from other funds 6,778 — — — — 6,778 1,095,825 Land sales contracts, due after one year — — — — 50,824 50,824 96,265 Total assets $7,898,225 16,475,284 39,925,298 673,710 13,028,049 78,000,566 81,691,194 Liabilities: Accounts payable 141,232 1,928 — 29 191,302 334,491 373,585 Accrued compensation and related liabilities 165,213 — — — — 165,213 293,102 Customer deposits — — — — 1,000 1,000 2,450 Due to component unit — 16,281,981 — — — 16,281,981 16,204,948 Due to other funds — — — — 6,778 6,778 1,023,068 Unearned revenues 28,776 — — — 20,096 48,872 4,645,558 Total liabilities 335,221 16,283,909 — 29 219,176 16,838,335 22,542,711 Deferred inflows of resources - Unavailable revenues 75,784 135,644 — 32,280 88,479 332,187 401,417 Total liabilities and deferred inflows of resources 411,005 16,419,553 — 32,309 307,655 17,170,522 22,944,128 Fund balances: Nonspendable 33,149 — — — — 33,149 57,926 Restricted — — — — 153,535 153,535 — Committed — — 39,925,298 641,401 5,794,259 46,360,958 46,186,064 Assigned — 55,731 — — 6,772,600 6,828,331 7,452,836 Unassigned 7,454,071 — — — — 7,454,071 5,050,240 Total fund balances 7,487,220 55,731 39,925,298 641,401 12,720,394 60,830,044 58,747,066 Total liabilities, deferred inflows of resources and fund balances $7,898,225 16,475,284 39,925,298 673,710 13,028,049 78,000,566 81,691,194 See accompanying notes to financial statements. Liabilities, Deferred Inflows of Resources, and Fund Balances KODIAK ISLAND BOROUGH Totals Governmental Funds Special Revenue Funds (With summarized financial information for June 30, 2020) June 30, 2021 Balance Sheet 30 Amount reported as fund balances on the governmental funds balance sheet $ 60,830,044 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.151,599,738 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 $271,466 Notes receivable - land sales 60,721 332,187 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 (61,730,000) Bond premium (3,410,020) Deferred outflow - bond premium 552,469 Deferred inflow - bond premium (428,246) Accrued interest expense (526,343) Compensated absences (175,359) (65,717,499) Changes in deferred inflows and outflows of resources are the results of timing differences in the actuarial report: Pension and OPEB related assets in the current fiscal year are presented as deferred outflows of resources 739,579 Pension and OPEB related liabilities in the current fiscal year are presented as deferred inflows of resources (521,550) Proportionate share of the collective OPEB assets 322,463 Proportionate share of the collective net pension and OPEB liabilities (4,207,953) Net position of governmental activities $ 143,377,009 See accompanying notes to financial statements. KODIAK ISLAND BOROUGH Reconciliation of Net Position Between the June 30, 2021 Government-Wide Financial Statements and the Fund Financial Statements 31 Education Other Education Debt Service Governmental General Support Facilities Fund Funds 2021 2020 Revenues: Property taxes and assessments $4,293,682 9,389,701 — 2,256,514 1,505,537 17,445,434 16,978,718 Transient accommodations tax — — — — 50,983 50,983 62,829 Severance taxes 1,049,430 — — — — 1,049,430 1,223,921 Excise taxes 702,142 — — — — 702,142 389,725 Intergovernmental: State sources 1,611,769 — — 230,218 70,041 1,912,028 4,378,515 Federal sources 7,320,092 — — — 204,748 7,524,840 2,387,270 Charges for services 215 — — — 878,153 878,368 912,920 Licenses, permits and fees 75,790 — — — 34,800 110,590 130,015 Investment income 24,496 — 143,572 — 20,509 188,577 1,454,149 Rental — — — — 13,450 13,450 14,400 Other 8,528 — — — 352,538 361,066 533,239 Total revenues 15,086,144 9,389,701 143,572 2,486,732 3,130,759 30,236,908 28,465,701 Expenditures: Current: General government 4,363,970 — — 10,214 620,973 4,995,157 5,197,783 Public safety 118,700 — — — 427,355 546,055 635,865 Community and economic development 832,436 — — — 75,220 907,656 885,179 Emergency preparedness 5,257 — — — — 5,257 4,479 Health and social welfare 5,257,005 — — — — 5,257,005 157,500 Education, culture and recreation 20,397 — — — — 20,397 20,447 Parks and recreation 19,560 — — — — 19,560 32,561 Service district maintenance — — — — 647,976 647,976 786,366 Primary and secondary education 50,000 9,393,364 — — — 9,443,364 10,522,544 Capital outlay: Schools — — — — 367,008 367,008 555,253 General — — — — 803,272 803,272 1,049,466 Community development — — — — 25,540 25,540 — Debt service: Principal — — — 4,850,000 — 4,850,000 4,655,000 Interest — — — 2,986,372 — 2,986,372 3,078,394 Debt issuance costs — — — 251,851 — 251,851 — Total expenditures 10,667,325 9,393,364 — 8,098,437 2,967,344 31,126,470 27,580,837 Excess (deficiency) of revenues over expenditures 4,418,819 (3,663) 143,572 (5,611,705) 163,415 (889,562) 884,864 Other financing sources (uses): Land sale proceeds — — — — 62,805 62,805 28,903 Proceeds from issuance of refunding debt — — — 37,350,000 — 37,350,000 — Premium on refunding debt — — — 857,176 — 857,176 — Payment to bond refunding escrow agent — — — (37,981,510) — (37,981,510) — Proceeds from issuance of debt — — — 43,647 2,640,422 2,684,069 — Transfers in — — — 5,417,879 282,286 5,700,165 1,628,191 Transfers out (3,026,148) — (832,316) — (1,841,701) (5,700,165) (1,673,191) Transfers in - component unit — — — — — — 1,632,815 Net other financing sources (uses)(3,026,148) — (832,316) 5,687,192 1,143,812 2,972,540 1,616,718 Change in fund balances 1,392,671 (3,663) (688,744) 75,487 1,307,227 2,082,978 2,501,582 Fund balances, at beginning of year 6,094,549 59,394 40,614,042 565,914 11,413,167 58,747,066 56,245,484 Fund balances, at end of year $ 7,487,220 55,731 39,925,298 641,401 12,720,394 60,830,044 58,747,066 See accompanying notes to financial statements. Totals Special Revenue Funds KODIAK ISLAND BOROUGH Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Year ended June 30, 2021 (With summarized financial information for the year ended June 30, 2020) 32 KODIAK ISLAND BOROUGH Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 2021 Change in fund balances – total governmental funds $ 2,082,978 Amounts reported for 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 $1,249,873 Depreciation expense (6,175,729) (4,925,856) 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 or disposal. This is the net effect of transactions involving capital assets: Cost of assets disposed (766,600) 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 269,382 Land sale proceeds 62,805 332,187 Certain revenues that were earned in a prior year provide current financial resources: Accrued property tax (288,009) Land sale contracts (113,408) (401,417) 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 463,052 Issuance of long term debt (40,891,245) Debt defeasement 37,981,510 Principal repayments 4,850,000 Bond premium amortization 818,527 3,221,844 Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Change in compensated absences 18,074 Change in the proportionate share of the unfunded net pension and OPEB liabilities 1,473,219 Change in the proportionate share of the unfunded net pension and OPEB assets (322,463) Change in deferred outflows related to bond refunding (202,485) Change in deferred inflows related to bond refunding 277,582 Change in deferred outflows related to pension and OPEB (84,981) Change in deferred inflows related to pension and OPEB (175,659) Change in net position of governmental activities $ 526,423 See accompanying notes to financial statements. of Governmental Funds to the Statement of Activities 33 Municipal Kodiak Other Solid Waste Fisheries Nonmajor Collection and Hospital Long Term Research Enterprise Totals Disposal Facilities Care Center Center Funds 2021 2020 Current assets: Equity in central treasury $7,504,968 5,618,125 2,457,738 2,591,532 124,954 18,297,317 17,641,030 Customer receivables 405,649 — — 55,427 36,945 498,021 722,416 Current portion of note receivable — — — 131,260 — 131,260 126,751 Total current assets 7,910,617 5,618,125 2,457,738 2,778,219 161,899 18,926,598 18,490,197 Restricted cash and equivalents 312,338 — 1,015,539 — — 1,327,877 1,327,356 Inventories 154,265 — — — — 154,265 380,038 Capital assets: Non-depreciable 31,265,801 1,021,714 41,396 602,735 — 32,931,646 32,094,058 Depreciable, net 1,753,959 10,396,376 12,930,077 6,081,058 272,533 31,434,003 33,575,849 Total capital assets 33,019,760 11,418,090 12,971,473 6,683,793 272,533 64,365,649 65,669,907 Notes receivable — — — 1,016,798 — 1,016,798 1,148,058 Net pension and OPEB assets 89,391 — — 21,448 — 110,839 — Total noncurrent assets 33,575,754 11,418,090 13,987,012 7,722,039 272,533 66,975,428 68,525,359 Related to bond refunding — — 156,911 — — 156,911 — Pension and OPEB deferrals 135,391 — — 61,134 — 196,525 225,735 Total deferred outflows of resources 135,391 — 156,911 61,134 — 353,436 225,735 Total assets and deferred outflows of resources $41,621,762 17,036,215 16,601,661 10,561,392 434,432 86,255,462 87,241,291 Current liabilities: Accounts payable $192,092 319,004 19,917 31,548 123,383 685,944 407,910 Customer deposits 5,959 — — 103,012 — 108,971 9,459 Current portion of accrued compensation and related liabilities 21,496 — — 5,418 — 26,914 27,983 Unearned revenues — 115,357 86,969 15,270 2,501 220,097 219,034 Interest payable 73,325 — 15,066 — — 88,391 116,851 Current portion of notes and bonds payable 1,163,116 — 962,810 — — 2,125,926 1,719,087 Due to other funds — — — — — — 72,757 Total current liabilities 1,455,988 434,361 1,084,762 155,248 125,884 3,256,243 2,573,081 Noncurrent liabilities: Accrued compensation and related liabilities 87,357 — — 28,412 — 115,769 90,748 Notes and bonds payable 13,547,790 — 8,842,810 — — 22,390,600 24,389,622 Accrual for landfill closure and postclosure costs 6,559,000 — — — — 6,559,000 5,979,000 Net pension and OPEB liability 698,463 — — 294,979 — 993,442 1,278,146 Total noncurrent liabilities 20,892,610 — 8,842,810 323,391 — 30,058,811 31,737,516 Total liabilities 22,348,598 434,361 9,927,572 478,639 125,884 33,315,054 34,310,597 Deferred inflows of resources: Related to bond refunding 53,214 — — — — 53,214 — Pension and OPEB deferrals 110,408 — — 27,049 — 137,457 77,078 Total deferred inflows of resources 163,622 — — 27,049 — 190,671 77,078 Net position: Net investment in capital assets 18,308,854 11,418,090 3,165,853 6,683,793 272,533 39,849,123 39,561,198 Unrestricted 800,688 5,183,764 3,508,236 3,371,911 36,015 12,900,614 13,292,418 Total net position 19,109,542 16,601,854 6,674,089 10,055,704 308,548 52,749,737 52,853,616 Total liabilities, deferred inflows of resources and net position $ 41,621,762 17,036,215 16,601,661 10,561,392 434,432 86,255,462 87,241,291 See accompanying notes to financial statements. KODIAK ISLAND BOROUGH Deferred outflows of resources: of Resources and Net Position Proprietary Funds - Business - Type Activities - Enterprise Funds Statement of Net Position (With summarized financial information for June 30, 2020) June 30, 2021 Outflows of Resources Assets and Deferred Liabilities, Deferred Inflows 34 KODIAK ISLAND BOROUGH Statement of Revenues, Expenses, and Changes in Net Position Year ended June 30, 2021 (With summarized financial information for the year ended June 30, 2020) Municipal Kodiak Other Solid Waste Fisheries Nonmajor Collection and Hospital Long Term Research Enterprise Totals Disposal Facilities Care Center Center Funds 2021 2020 Operating revenues: Charges for services: Solid waste disposal $4,061,604 — — — — 4,061,604 4,151,619 Lease income — 1,384,272 1,043,628 499,485 70,261 2,997,646 3,264,756 Other 63,993 — — 20,298 301,032 385,323 544,954 Total operating revenues 4,125,597 1,384,272 1,043,628 519,783 371,293 7,444,573 7,961,329 Operating expenses: Personnel services 983,913 14,567 58,138 192,706 12,909 1,262,233 1,279,732 Contracted services 314,783 — 105,175 — — 419,958 298,685 Maintenance and repairs 75,667 — 119,466 241 — 195,374 198,996 Depreciation 298,312 1,063,338 518,933 665,026 34,066 2,579,675 2,558,332 General and administration 537,372 — 28,593 299,996 28,050 894,011 843,645 Miscellaneous — — — 79,218 4,286 83,504 127,598 Telephone services — — — — 299,204 299,204 293,659 Recycling services 297,335 — — — — 297,335 283,176 Closure and postclosure costs 805,773 — — — — 805,773 149,000 Contributions 210,084 — — — — 210,084 37,904 Total operating expenses 3,523,239 1,077,905 830,305 1,237,187 378,515 7,047,151 6,070,727 Operating income (loss) 602,358 306,367 213,323 (717,404) (7,222) 397,422 1,890,602 Nonoperating revenues (expense): Intergovernmental: State of Alaska 36,977 — — 8,941 — 45,918 (22,375) Federal sources 188 — — 5,852 — 6,040 1,885 Investment income 27,539 (3,772) 8,161 6,889 — 38,817 443,602 Bond issuance costs (21,329) — (52,546) — — (73,875) — Interest revenue — — — 42,598 88 42,686 47,234 Interest expense (196,512) — (364,375) — — (560,887) (678,712) Total nonoperating income (expense)(153,137) (3,772) (408,760) 64,280 88 (501,301) (208,366) Income (loss) before transfers 449,221 302,595 (195,437) (653,124) (7,134) (103,879) 1,682,236 Transfers in — — 85,000 — — 85,000 385,666 Transfers out — (85,000) — — — (85,000) (340,666) Change in net position 449,221 217,595 (110,437) (653,124) (7,134) (103,879) 1,727,236 Net position, at beginning of year 18,660,321 16,384,259 6,784,526 10,708,828 315,682 52,853,616 51,126,380 Net position, at end of year $ 19,109,542 16,601,854 6,674,089 10,055,704 308,548 52,749,737 52,853,616 See accompanying notes to financial statements. Proprietary Funds - Business - Type Activities - Enterprise Funds 35 Municipal Solid Waste Kodiak Other Collection Long Term Fisheries Nonmajor and Hospital Care Research Enterprise Totals Disposal Facilities Center Center Funds 2021 2020 Cash flows from operating activities: Cash received from customers $4,095,266 1,384,273 1,043,628 1,000,711 372,416 7,896,294 7,840,396 Payments to suppliers (1,408,695) 310,383 (390,228) (466,247) (323,560) (2,278,347) (2,010,741) Payments to employees (1,126,389) (14,567) (58,138) (233,100) (12,909) (1,445,103) (1,445,396) Net cash provided by operating activities 1,560,182 1,680,089 595,262 301,364 35,947 4,172,844 4,384,259 Cash flows from noncapital financing activities: State sources - grants — — — — — — (22,375) Federal sources - grants 188 — — 5,852 — 6,040 1,885 Net change in interfund receivable/payable (58,339) (3,286) (327) (10,038) (767) (72,757) 12,679 Transfers in (out)— (85,000) 85,000 — — — 45,000 Net cash provided (used) by noncapital financing activities (58,151) (88,286) 84,673 (4,186) (767) (66,717) 37,189 Cash flows from capital and related financing activities: Acquisition and construction of capital assets (110,069) (827,733) (41,396) (296,219) — (1,275,417) (1,024,494) Interest paid on notes and bonds payable (204,877) — (384,470) — — (589,347) (686,324) Issuance of refunding bond payable 1,405,994 — 8,100,000 — — 9,505,994 — Refunding bond issuance costs (21,329) — (52,546) — — (73,875) — Refunding of revenue bonds (1,355,000) — (7,888,035) — — (9,243,035) — Principal payments on notes and bonds payable (1,257,338) — (597,804) — — (1,855,142) (1,689,087) Net cash provided (used) by capital and related financing activities (1,542,619) (827,733) (864,251) (296,219) — (3,530,822) (3,399,905) Cash flows from investing activities: Interest and dividends received 27,539 (3,772) 8,161 49,487 88 81,503 490,836 Net change in cash and cash equivalents (13,049) 760,298 (176,155) 50,446 35,268 656,808 1,512,379 Cash and equivalents, at beginning of year 7,830,355 4,857,827 3,649,432 2,541,086 89,686 18,968,386 17,456,007 Cash and equivalents, at end of year $ 7,817,306 5,618,125 3,473,277 2,591,532 124,954 19,625,194 18,968,386 Reconciliation of cash and cash equivalents to the Statement of Net Position: Equity in central treasury $ 7,504,968 5,618,125 2,457,738 2,591,532 124,954 18,297,317 17,641,030 Restricted cash and equivalents 312,338 — 1,015,539 — — 1,327,877 1,327,356 $7,817,306 5,618,125 3,473,277 2,591,532 124,954 19,625,194 18,968,386 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss)$602,358 306,367 213,323 (717,404) (7,222) 397,422 1,890,602 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 298,312 1,063,338 518,933 665,026 34,066 2,579,675 2,558,332 Noncash State PERS on-behalf payments 36,977 — — 8,941 — 45,918 — Closure and postclosure costs 580,000 — — — — 580,000 149,000 Changes in assets and liabilities that provided (used) cash: (Increase) decrease in assets and deferred outflows of resources: Customer receivables (26,831) — — 252,604 (1,378) 224,395 (219,084) Inventories 225,773 — — — — 225,773 — Notes receivable — — — 126,751 — 126,751 122,398 Net pension and OPEB assets (89,391) — — (21,448) — (110,839) — Deferred outflow of resources: Related to bond refundings — — (156,911) — — (156,911) — Pension and OPEB 23,558 — — 5,652 — 29,210 24,853 Increase (decrease) in liabilities and deferred inflows of resources Accounts payable 26,546 310,383 19,917 (86,792) 7,980 278,034 72,922 Customer deposits (3,500) — — 103,012 — 99,512 (37,431) Accrued compensation 14,081 — — 9,871 — 23,952 33,712 Unearned revenues — 1 — (1,439) 2,501 1,063 13,184 Net pension and OPEB liabilities (229,610) — — (55,094) — (284,704) (185,084) Deferred inflow of resources: Related to bond refundings 53,214 — — — — 53,214 — Pension and OPEB 48,695 — — 11,684 — 60,379 (39,145) Net cash provided by operating activities $1,560,182 1,680,089 595,262 301,364 35,947 4,172,844 4,384,259 See accompanying notes to financial statements. Proprietary Funds - Business - Type Activities - Enterprise Funds (With summarized financial information for the year ended June 30, 2020) Year ended June 30, 2021 Statement of Cash Flows KODIAK ISLAND BOROUGH 36 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements Year Ended June 30, 2021 37 (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 government. The Borough reviewed its relationship with other organizations and determined that the following organization is a component unit. Discretely Presented Component Unit The Kodiak Island Borough School District (KIBSD) is a legally separate governmental entity, which is responsible for public education within the Borough. Members of the School Board are elected by the voters; however, the Borough imposes its will over KIBSD because the Borough Assembly has the authority to approve and/or alter the total budget of KIBSD. The Borough also must levy the necessary taxes, and issue bonds for KIBSD. KIBSD has a June 30 fiscal year end, therefore, the financial information presented in these financial statements is as of and for the fiscal year ended June 30, 2021. 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 supported by taxes and intergovernmental revenues, 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 component 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 1) 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. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 38 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. Deferred inflows of resources are the acquisition of fund balance / net position by the Borough that are applicable to a future reporting period. Deferred outflows of resources are the consumption of fund balance / net position that are applicable to a future reporting period. (c) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement 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 timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met. Governmental 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 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 government. 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 government, except those required to be accounted for in another fund. The Education Support Special Revenue Fund accounts for property taxes and assessments dedicated to the Kodiak Island Borough School District in support of primary and secondary education services. The Facilities Special Revenue Fund accounts for the proceeds from the sale of Shuyak Island. 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 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. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 39 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 metal recycling services for the Kodiak Island Borough and debt service payments on related debt. The Hospital Facilities Fund accounts for rents on the Borough owned hospital and other hospital related revenue. The Long Term Care Center Fund was created in fiscal year 2017 to account for the rents on the Borough owned Long Term Care Center and debt service payments on related debt. These activities were accounted for in the Hospital Facilities Fund until completion of the Long Term Care Center. The Kodiak Fisheries Research Center Fund accounts for rents and expenses on the Borough owned Kodiak Fisheries Research Center. Multiple tenants 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 from 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 (1) 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 taxes. 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, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Fund Balance/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 an investment manager. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 40 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 investments in the pool are reviewed for fair value by an independent pricing service. 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 Cash 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. Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following financial instruments are recorded at fair value or at amounts that approximate fair value: (1) cash and cash equivalents, (2) receivables, net, (3) certain other current assets, (4) accounts payable, and (5) other current liabilities. The carrying amounts reported in the Balance Sheet and Statement of Net Position for the above financial instruments closely approximates their fair value due to the short-term nature of these assets and liabilities, except for the Borough’s investments. The carrying amount of the Borough’s investments are determined based on quoted market prices. The carrying amount of notes receivable and notes payable approximates fair value for those financial instruments with interest at variable rates, as those rates approximate current market rates for notes with similar maturities and credit quality. 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.” 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 not available for appropriation and are not expendable available financial resources. Inventories and Prepaid Items/Expenses Enterprise Fund inventories consist of cover rock that will be used to close cells at the Municipal Solid Waste Landfill. Inventories are stated at cost (first-in, first-out) and are recorded as expenses when used (consumption method). KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 41 Payments made to vendors for services that are applicable to 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 assets, which include property, plant, equipment, and infrastructure assets (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 acquisition 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. 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 are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the year incurred. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 42 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. Pension and Other Postemployment Benefits (OPEB) For purposes of measuring the net pension and OPEB assets and liabilities, deferred outflows of resources and deferred inflows of resources related to pension and OPEB plans, and pension and OPEB expense, information about the fiduciary net position of the Public Employees’ Retirement System (PERS) and additions to/from PERS’s fiduciary net position have been determined on the same basis as they are reported by PERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms, investments are reported at fair value. Net Position Government-wide net position is divided into three components:  Net investment in capital assets – consists of the historical cost of capital assets less accumulated depreciation and less any debt that remains outstanding that was used to finance those assets plus deferred outflows of resources less deferred inflows of resources related to those assets.  Restricted net position – consists of assets that are restricted by the Borough’s creditors (for example, through debt covenants), by the state enabling legislation (through restrictions on shared revenues), by grantors (both federal and state), and by other contributors.  Unrestricted – all other net position is reported in this category. 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 fund) 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. 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 formal 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. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 43 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 fund balance is 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 balance is made during the budget process and reviewed at the end of the fiscal year. Assigned fund balance represents amounts constrained for capital project funds 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, followed 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 reviewed 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 are used to account for Borough support, fire and road service areas, federal and state grant programs, street lighting, 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 1. 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. 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-half must 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 are levied. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 44 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 Borough 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 FY2021 the Borough set a mill rate of 2.75 mills for the General Fund, 6.45 mills for the Education Support Special Revenue Fund, and 1.55 mills for the Education Debt Service Fund, for a total area wide mill rate of 10.75. This was the same total area wide mill rate as FY2020. 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 revenues are recognized in the fiscal year in which they become measurable and available. Excise Taxes Excise taxes are based on the quantity of tobacco brought into the Borough and the quantity of marijuana cultivated for sale. Quarterly excise tax returns for tobacco are due by the end of the month following the quarter’s end and monthly excise reports for marijuana are due by the end of the month for the previous month. Borough excise tax revenues 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 first, then unrestricted resources as they are needed. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 45 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 and Disposal Fund are charges to customers for services. The principal operating revenues of the Hospital Facilities Fund, Long Term Care Center Fund, Kodiak Fisheries Research Center Fund, and Research Court Apartments Fund are rents from customers. The principal operating revenues for the 911 Service Fund are surcharges collected on phone lines. 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. (f) 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, accrued landfill closure and post-closure care costs, and the net pension and OPEB liabilities and related deferred outflows and inflows of resources. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 46 (2) Stewardship, Compliance, and Accountability (a) Excess of Expenditures over Appropriations The following fund expenditures or operating expenses exceeded their budget: Fund Excess Special Revenue Funds: Fire and Road Service Areas – Kodiak Airport Fire District Fire and Road Service Areas – Womens Bay $ 326 Roads Service Area 72,498 Woodland Acres Street Light Service Area 287 Tourism Development 143 Commercial Passanger Vessel 77 Enterprise Fund: Long Term Care Center 139,148 911 Service 1,032 Research Court Apartments 20,000 These excesses were funded by available fund balance or net position. (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 share value of investments in the AMLIP is approximately equal to fair value. To obtain a copy of AMLIP’s financial statements contact Key Trust of Alaska at 101 West Benson Blvd., Room 412, Anchorage, Alaska 99503. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 47 As of June 30, 2021, the Borough had the following investments: Investment Maturities (in years) Fair Less Investment Type Value than 1 1 to 5 6 + U.S. Agency Securities: Federal Home Loan Bank $ 15,936,856 3,035,580 12,901,276 - Federal Home Loan Mortgage Corporation 11,969,690 1,012,240 10,957,450 - Federal Farm Credit Bank 22,951,280 5,002,680 16,948,590 1,000,010 Federal Agriculture Mortgage Corporation 2,497,060 - 2,497,060 - Federal National Mortgage Association 8,054,200 3,033,250 5,020,950 - U.S. Treasury Securities 2,001,800 2,001,800 - - Municipal Obligations 8,830,718 1,210,234 5,364,864 2,255,620 72,241,604 15,295,784 53,690,190 3,255,630 Investments measured at amortized cost: Alaska Municipal League Investment Pool 11,527,411 Certificates of Deposit 1,770,840 Money Market Funds 4,406,448 17,704,699 Total investments $ 89,946,303 In addition to the investments listed above, Kodiak Island Borough also had cash equivalents of $6,071,233, which includes restricted cash of $1,327,877. The remainder of this page left blank intentionally. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 48 The Borough categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Borough’s investments that are classified as Level 2 are valued using third party pricing models provided by investment brokerages. The Borough has the following recurring fair value measurements as of June 30, 2021: Total Level 1 Level 2 Level 3 Investments by fair value level: Debt securities: U.S. Agency Securities $ 61,409,086 61,409,086 - - U.S. Treasury Securities 2,001,800 2,001,800 - - Municipal Obligations 8,830,718 - 8,830,718 - Total investments at fair value level 72,241,604 63,410,886 8,830,718 - Investments measured at amortized cost: Alaska Municipal League Investment Pool 11,527,411 Money Market 4,406,448 Certificates of Deposit 1,770,840 Total investments $ 89,946,303 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, 2021, the Borough’s investments in municipal obligations, U.S. Government agencies or instruments implicitly guaranteed by the U.S. Government, and corporate – foreign were rated as follows: Moody’s AAA 68% AA2 1% AA3 6% S&P – AAA 2% S&P – AAAm 13% Not Rated 10% 100% KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 49 At June 30, 2021, the Borough’s investments in the Alaska Municipal League Investment Pool were rated AAAm by Standard & Poor’s and the Borough’s Certificates of Deposit were unrated. Concentration of Credit Risk The Borough places no limit on the amount the Borough may invest in any one issuer. At June 30, 2021, the Borough had 68% percent of its investments in U.S. Government Agency Securities and U.S. Treasury Notes and 10% in Municipal Obligations. Custodial Credit Risk – Deposits The Borough maintains a cash pool that is available for use by all 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 amounts “due to/from 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, which are held by Bank of New York in a Tri-party collateral agreement with Wells Fargo, the pledging financial institution’s agent, in the Borough’s name, collateralize the remaining bank balance. Custodial Credit Risk – Investments For an investment, this is a risk that, in the event of the failure of the counterparty, 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 collateralization agreements. The Borough had no debt securities exposed to custodial credit risk at June 30, 2021. (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 general liability and property insurance, the annual independent audit, and grounds maintenance services. The remainder of this page left blank intentionally. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 50 (5) Receivables Education Education Other Total General Support Special Debt Governmental Governmental Fund Revenue Fund Service Fund Funds Funds Receivables: Grants $ 17,424 — 73,842 146,985 238,251 Taxes 689,019 160,706 38,641 32,264 920,630 Interest 262,717 — — — 262,717 Customers and other 25,618 — — 78,416 104,034 Notes receivable — — — 60,721 60,721 Gross receivables 994,778 160,706 112,483 318,386 1,586,353 Less: allowance for uncollectibles (18,056) — — — (18,056) Net total receivables $ 976,722 160,706 112,483 318,386 1,568,297 Municipal Kodiak Other Solid Waste Fisheries Nonmajor Total Total Collection Research Enterprise Enterprise Primary and Disposal Center Fund Funds Government Receivables: Grants $ — — — — 238,251 Taxes — — — — 920,630 Interest — — — — 262,717 Customers and other 405,649 55,427 36,945 498,021 602,055 Notes receivable — 1,148,058 — 1,148,058 1,208,779 Gross receivables 405,649 1,203,485 36,945 1,646,079 3,232,432 Less: allowance for uncollectibles — — — — (18,056) Net total receivables $ 405,649 1,203,485 36,945 1,646,079 3,214,376 Enterprise Funds Governmental Funds The remainder of this page left blank intentionally. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 51 (6) Note Receivable - General Services Administration (GSA) on-behalf of National Oceanic and Atmospheric Administration (NOAA) In April 2016 a lease was executed between the Kodiak Island Borough and GSA which included a debt repayment portion designed to recoup costs incurred by the Borough to finance construction of the facility. Monthly payments to the Borough are $14,112 including interest of 3.5%, continuing through March 2029. As of June 30, 2021, the principal balance due is $1,148,058 and the principal amount due within one year is $131,260. This note receivable is recorded in the Kodiak Fisheries Research Center Enterprise Fund. (7) Deferred Inflows of Resources and Unearned Revenues Governmental funds report deferred inflows of resources 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, 2021, the various components of deferred inflows of resources and unearned revenue reported in the governmental funds were as follows: Unavailable Unearned Total Unavailable taxes receivable $ 271,466 - 271,466 Unavailable land sales receivable 60,721 - 60,721 Grant advances prior to expending all proceeds - 48,872 48,872 Total unavailable/unearned revenue for governmental funds $ 332,187 48,872 381,059 The remainder of this page left blank intentionally. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 52 (8) Capital Assets As noted in Footnote (14), the Borough leases the Kodiak Island Hospital and Long Term Care Center to Sisters of Providence. The value of the leased assets and associated depreciation are reflected in the Hospital Facilities Fund and Long Term Care Center Fund following. Capital asset activity for the year ended June 30, 2021 was as follows: Beginning Increase/ Ending Balance Transfers Decrease Balance Governmental activities: Capital assets, not being depreciated Land $ 23,519,407 - (766,600) 22,752,807 Construction work-in-progress 6,790,421 1,249,873 (1,086,258) 6,954,036 Total 30,309,828 1,249,873 (1,852,858) 29,706,843 Capital assets, being depreciated: Buildings and improvements 195,583,696 - - 195,583,696 Improvements other than buildings 28,617,750 1,086,258 - 29,704,008 Equipment 4,101,671 - (19,796) 4,081,875 Infrastructure 5,762,722 - - 5,762,722 Total 234,065,839 1,086,258 (19,796) 235,132,301 Less accumulated depreciation for: Buildings and improvements 83,888,297 4,285,724 - 88,174,021 Improvements other than buildings 15,007,739 1,610,345 - 16,618,084 Equipment 2,766,368 203,737 (19,796) 2,950,309 Infrastructure 5,421,069 75,923 - 5,496,992 Total 107,083,473 6,175,729 (19,796) 113,239,406 Total capital assets being depreciated, net 126,982,366 (5,089,471) - 121,892,895 Total governmental activities, net $ 157,292,194 (3,839,598) (1,852,858) 151,599,738 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 53 Beginning Increase/ Ending Balance Transfers Decrease Balance Business-type activities: Municipal Solid Waste Collection and Disposal Fund capital assets, not being depreciated Land $ 1,651,248 - - 1,651,248 Construction work-in-progress 29,628,227 110,069 (123,743) 29,614,553 Total 31,279,475 110,069 (123,743) 31,265,801 Capital assets, being depreciated: Unclassified utility plant in service 2,178,733 - - 2,178,733 Improvements other than buildings 3,169,671 55,749 - 3,225,420 Machinery and equipment 2,327,843 67,994 (85,040) 2,310,797 Total 7,676,247 123,743 (85,040) 7,714,950 Less accumulated depreciation for: Unclassified utility plant in service 1,463,796 42,055 - 1,505,851 Improvements other than buildings 2,449,815 176,372 - 2,626,187 Machinery and equipment 1,834,108 79,885 (85,040) 1,828,953 Total 5,747,719 298,312 (85,040) 5,960,991 Total capital assets being depreciated, net 1,928,528 (174,569) - 1,753,959 Total Municipal Solid Waste Collection and Disposal Fund, net $ 33,208,003 (64,500) (123,743) 33,019,760 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 54 Beginning Increase/ Ending Balance Transfers Decrease Balance Hospital Facilities Fund: Capital assets, not being depreciated Artwork $ 16,091 - - 16,091 Land 10,251 - - 10,251 Construction in progress 167,639 827,733 - 995,372 Total 193,981 827,733 - 1,021,714 Capital assets, being depreciated: Buildings 33,100,284 - - 33,100,284 Improvements other than buildings 401,046 - - 401,046 Machinery and equipment 3,632,024 - - 3,632,024 Total 37,133,354 - - 37,133,354 Less accumulated depreciation for: Buildings 21,514,084 761,104 - 22,275,188 Improvements other than buildings 586,466 298,462 - 884,928 Machinery and equipment 3,573,090 3,772 - 3,576,862 Total 25,673,640 1,063,338 - 26,736,978 Total capital assets being depreciated, net 11,459,714 (1,063,338) - 10,396,376 Total Hospital Facilities Fund, net $ 11,653,695 (235,605) - 11,418,090 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 55 Beginning Increase/ Ending Balance Transfers Decrease Balance Long Term Care Center Fund: Capital assets, not being depreciated Construction in progress $ - 41,396 - 41,396 Capital assets, being depreciated: Buildings 15,567,986 - - 15,567,986 Less accumulated depreciation for: Buildings 2,118,976 518,933 - 2,637,909 Total capital assets being depreciated 13,449,010 (518,933) - 12,930,077 Total Long Term Care Fund, net $ 13,449,010 (477,537) - 12,971,473 Kodiak Fisheries Research Center Fund: Capital assets, not being depreciated Construction in progress $ 620,602 296,219 (314,086) 602,735 Capital assets, being depreciated: Buildings 17,840,410 - - 17,840,410 Improvements other than buildings 1,363,502 - - 1,363,502 Machinery and equipment 1,187,678 314,086 - 1,501,764 Total 20,391,590 314,086 - 20,705,676 Less accumulated depreciation for: Buildings 12,486,525 594,681 - 13,081,206 Improvements other than buildings 285,387 67,728 - 353,115 Machinery and equipment 1,187,680 2,617 - 1,190,297 Total 13,959,592 665,026 - 14,624,618 Total capital assets being depreciated, net 6,431,998 (350,940) - 6,081,058 Total Kodiak Fisheries Research Center Fund, net $ 7,052,600 (54,721) (314,086) 6,683,793 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 56 Beginning Increase/ Ending Balance Transfers Decrease Balance Research Court Apartments Fund: Capital assets being depreciated: Buildings $ 1,021,998 - - 1,021,998 Less accumulated depreciation: Buildings 715,399 34,066 - 749,465 Total Research Court Apartments Fund $ 306,599 (34,066) - 272,533 Total business-type activities: Capital assets, not being depreciated Artwork $ 16,091 - - 16,091 Land 1,661,499 - - 1,661,499 Construction work-in-progress 30,416,468 1,275,417 (437,829) 31,254,056 Total 32,094,058 1,275,417 (437,829) 32,931,646 Capital assets, being depreciated: Unclassified utility plant in service 2,178,733 - - 2,178,733 Buildings 67,530,678 - - 67,530,678 Improvements other than buildings 4,934,219 55,749 - 4,989,968 Machinery and equipment 7,147,545 382,080 (85,040) 7,444,585 Total 81,791,175 437,829 (85,040) 82,143,964 Less accumulated depreciation for: Unclassified utility plant in service 1,463,796 42,055 - 1,505,851 Buildings 36,834,984 1,908,784 - 38,743,768 Improvements other than buildings 3,321,668 542,562 - 3,864,230 Machinery and equipment 6,594,878 86,274 (85,040) 6,596,112 Total 48,215,326 2,579,675 (85,040) 50,709,961 Total capital assets being depreciated, net 33,575,849 (2,141,846) - 31,434,003 Total business-type activities, net $ 65,669,907 (866,429) (437,829) 64,365,649 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 57 Depreciation expense was charged to the departments and functions of the primary government as follows: Governmental activities: General government $ 474,580 Public safety 183,302 Education, culture, recreation 5,517,847 Total – governmental activities $ 6,175,729 Business-type activities: Municipal solid waste collection and disposal $ 298,312 Hospital facilities 1,063,338 Long term care center 518,933 Kodiak fisheries research center 665,026 Research court apartments 34,066 Total – business-type activities 2,579,675 Total primary government $ 8,755,404 (9) Interfund Receivables, Payables and Transfers (a) Interfund Receivables and Payables Interfund balances at June 30, 2021 consisted of the following: Due to / from other funds: Receivable Fund Payable Fund Amount General Fund Other Governmental Funds $ 6,778 All 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. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 58 (b) Transfers Interfund transfers have been made in accordance with budget ordinances. Funds are transferred from one fund to support expenditures of other funds in accordance with the authority established for the individual fund. Transfers between funds during the year ended June 30, 2021 were as follows: Transfers In Governmental Funds Education Other Long Term Debt Service Governmental Care Center Transfers Out Fund Funds Enterprise Fund Total Major Governmental Funds: General Fund $ 3,016,076 10,072 - 3,026,148 Facilities 827,316 5,000 - 832,316 Other Governmental Funds 1,574,487 267,214 - 1,841,701 Hospital Facilitites Enterprise Fund - - 85,000 85,000 Total transfers $ 5,417,879 282,286 85,000 5,785,165 A summary of significant transfers are as follows:  The General Fund transferred $10,072 to the L.E.P.C. Special Revenue Fund since the State of Alaska is no longer funding grants to this fund.  The General Fund transferred $3,016,076 to the Education Debt Service Fund to help cover debt service payments since the State of Alaska’s elimination of debt reimbursement payments.  The Facilities Special Revenue Fund transferred $5,000 to the Buildings and Grounds Special Revenue Fund for property insurance costs.  The Facilities Special Revenue Fund transferred $827,316 to the Education Debt Service Fund to help cover debt service payments since the State of Alaska’s elimination of debt reimbursement payments.  The Fire and Road Service Areas - Fire Protection Area No. 1 Special Revenue Fund transferred $52,214 to the Other Capital Projects Fund for capital improvements, including exterior siding and ventilation.  The Buildings and Grounds Special Revenue Fund transferred $75,000 to the Renewal and Replacement Projects Capital Project Fund for the Borough building asbestos abetement project.  The Buildings and Grounds Special Revenue Fund transferred $25,000 to Borough Capital Projects Capital Project Fund for the Peterson School Roof Replacement.  The Other Capital Projects Capital Project Fund transferred $115,000 to the the Buildings and Grounds Special Revenue Fund to return unused money related to the Borough building exterior painting project.  The Renewal and Replacement Projects Capital Project Fund transferred $1,574,487 to the Education Debt Service Fund to help cover debt service payments since the State of Alaska’s elimination of debt reimbursement payments.  The Hospital Facilities Enterprise Fund transferred $85,000 to the Long Term Care Center Enterprise for the fuel line replacement project. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 59 (10) Long Term Debt (a) General Obligation Bonds and Other Debt The Borough issues general obligation bonds and other debt to provide funds for the acquisition and construction of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the Borough. General obligation bonds and other debt currently outstanding are as follows: Balance Balance Due Within July 1, 2020 Additions Reductions June 30, 2021 One Year Governmental activities: $8,000,000 2011 Series One High School Renovation bonds, due in semi-annual installments of $355,000 to $595,000 plus interest at 3.93% to 5.20% through March 2031 $ 5,185,000 - 5,185,000 - - $5,230,000 2012 Series A Capital Improvements bonds, due in semi-annual installments of $495,000 to $630,000 plus interest at 4.0% to 5.0% through September 2024 2,870,000 - 2,325,000 545,000 545,000 $6,385,000 2012 Series B Capital Improvements bonds, due in semi-annual installments of $610,000 to $770,000 plus interest at 4.0% to 5.0% through September 2024 3,500,000 - 2,835,000 665,000 665,000 $21,595,000 2013 Series One High School Renovation bonds, due in semi-annual installments of $895,000 to $1,630,000 plus interest of 3.8% to 5.0% through February 2033 16,110,000 - 14,130,000 1,980,000 970,000 $22,660,000 2014 Series One High School Renovation bonds, due in semi-annual installments of $900,000 to $1,690,000 plus interest of 3.12% to 5.0% through March 2034 17,705,000 - 13,560,000 4,145,000 965,000 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 60 Balance Balance Due Within July 1, 2020 Additions Reductions June 30, 2021 One Year Governmental activities, continued: $6,210,000 2015 Series Three High School Renovation bonds, due in semi-annual installments of $215,000 to $480,000 plus interest of 4.0% to 5.25% through October 2035 5,395,000 - 225,000 5,170,000 240,000 $1,780,000 2015 Series Three Renewal and Replacement bonds, due in semi-annual installments of $160,000 to $220,000 plus interest of 5.0% through October 2025 1,170,000 - 170,000 1,000,000 180,000 $1,870,000 2016 Series One High School Renovation bonds, due in semi-annual installments of $70,000 to $130,000 plus interest of 2.0% to 5.0% through August 2035 1,640,000 - 75,000 1,565,000 80,000 $5,140,000 2016 Series One Renewal and Replacement bonds, due in semi-annual installments of $490,000 to $660,000 plus interest of 5.0% through August 2025 3,510,000 - 515,000 2,995,000 540,000 $4,905,000 2016 Series Three High School Renovation bonds, due in annual installments of $415,000 to $605,000 plus interest of 4.0% to 5.0% through December 2027 4,095,000 - 430,000 3,665,000 450,000 $550,000 2018 Series A, due in annual installments of $50,000 to $60,000 plus interest of 2.67% to 3.05% through December 2028 500,000 - 50,000 450,000 50,000 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 61 Balance Balance Due Within July 1, 2020 Additions Reductions June 30, 2021 One Year Governmental activities, continued: $345,000 2020 Series A High School Renovation Bond, due in annual installments of $25,000 to $45,000 plus interest of 5.0% through December 2030 - 345,000 - 345,000 25,000 $1,855,000 2020 Series B due in annual installments of $145,000 to $230,000 plus interest of 5% through December 2030 - 1,855,000 - 1,855,000 145,000 $4,070,000 2021 Series 1 due in annual installments of $330,000 to $505,000 plus interest of 5% through June 2031 - 4,070,000 - 4,070,000 330,000 $4,225,000 2021 Series 2 due in annual installments of $125,000 to $1,375,000 plus interest of .243% to .698% through June 2025 - 4,225,000 - 4,225,000 125,000 $14,535,000 2021 Series 3 due in annual installments of $275,000 to $1,515,000 plus interest of .243% to 2.22% through June 2025 - 14,535,000 - 14,535,000 275,000 $14,520,000 2021 Series 4 due in annual installments of $255,000 to $1,625,000 plus interest of .243% to 2.352% through June 2034 - 14,520,000 - 14,520,000 255,000 $ 61,680,000 39,550,000 39,500,000 61,730,000 5,840,000 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 62 (b) Notes and Bonds Payable As of June 30, 2021, the Borough had the following notes and bonds payable outstanding in the Municipal Solid Waste Collection and Disposal Enterprise Fund: Note payable (ACWF #505031) 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, 2021, interest accrued at 1.5%. The first loan payment was made on April 1, 2012, with principal payments of $100,000 due on April 1 in each successive year. $ 1,000,000 Note payable (ACWF #505041) to Alaska Department of Environmental Conservation (ADEC), to be paid within 20 years. Interest accrues at 1.5% over the life of the loan. The first loan payment was made on April 1, 2018, with principal payments of $637,846 due on April 1 in each successive year. $ 10,205,529 Note payable (ACWF #505061) to Alaska Department of Environmental Conservation (ADEC), to be paid within 20 years. Interest accrues at 1.5% over the life of the loan. The first loan payment was made on March 1, 2016, with principal payments of $131,227 being due on March 1 in each successive year. $ 1,837,172 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 1 and March 1 of each year. The bond was partially defeased as of June 30, 2021, with the final payment of $235,000 due on September 1, 2021. $ 235,000 On May 26, 2021, the Borough issued a $1,215,000 revenue bond, with a premium of $190,994. The bond was marketed by the Alaska Municipal Bond Bank. Interest accrues at rate of 5.0% with payments due on June 1 and December 1 of each year. The Borough will only make interest payments on the bond in FY22, with the first principal payment due December 1, 2022. The bond will mature on December 1, 2027. $ 1,215,000 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 63 As of June 30, 2021, the Borough had the following bond payable outstanding in the Long Term Care Center Enterprise Fund: On June 19, 2013, the Borough issued a $17,110,000 revenue bond, with a premium of $1,707,320. The bond was marketed by the Alaska Municipal Bond Bank. Interest accrues at rates between 3.0 and 5.0% with payments due on June 1 and December 1 of each year. The bond was partially defeased as of June 30, 2021 with the current payment of $775,000 due on June 1, 2022 and the final payment of $815,000 due on June 1, 2023. $ 1,590,000 On May 26, 2021, the Borough issued a $8,100,000 revenue bond. The bond was marketed by the Alaska Municipal Bond Bank. Interest accrues at rates between of .243% and 2.222% with payments due on June 1 and December 1 of each year. The current portion as of June 30, 2021 is $130,000. The bond will mature on December 1, 2032. $ 8,100,000 (The remainder of this page intentionally left blank.) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 64 (c) Changes in Long-term Liabilities Long-term liability activity for the year ended June 30, 2021, was as follows: Balance Balance June 30,June 30,Due within 2020 Additions Reductions 2021 one year Governmental activities: Bonds payable: General obligation bonds $ 61,680,000 39,550,000 39,500,000 61,730,000 5,840,000 Bond premium 6,169,686 1,341,245 4,100,911 3,410,020 816,065 67,849,686 40,891,245 43,600,911 65,140,020 6,656,065 Compensated absences 193,433 230,823 248,897 175,359 61,204 Total $68,043,119 41,122,068 43,849,808 65,315,379 6,717,269 Business-type activities: Municipal Solid Waste Collection and Disposal: Landfill closure and post-closure costs $ 5,979,000 580,000 — 6,559,000 — Compensated absences 94,772 62,749 48,668 108,853 21,496 Notes and bonds payable 15,726,774 1,215,000 2,449,073 14,492,701 1,104,073 Bond premium 190,476 190,994 163,265 218,205 59,043 Total $21,991,022 2,048,743 2,661,006 21,378,759 1,184,612 Long Term Care Center: Bonds payable 9,440,000 8,100,000 7,850,000 9,690,000 905,000 Bond premium 751,459 — 635,839 115,620 57,810 Total $10,191,459 8,100,000 8,485,839 9,805,620 962,810 Kodiak Fisheries Research Center: Compensated absences $23,959 16,250 6,378 33,831 5,418 Business-type activities: Landfill closure and post- closure costs $ 5,979,000 580,000 — 6,559,000 — Compensated absences 118,731 78,999 55,046 142,684 26,914 Notes and bonds payable 25,166,774 9,315,000 10,299,073 24,182,701 2,009,073 Bond premium 941,935 190,994 799,104 333,825 116,853 Total $32,206,440 10,164,993 11,153,223 31,218,210 2,152,840 For governmental activities, compensated absences are generally liquidated by the General Fund. Annual debt service requirements to maturity for all the Governmental Activities general obligation bonds outstanding as of June 30, 2021, are as follows: Year ending June 30: Principal Interest Total 2022 $ 5,840,000 1,719,025 7,559,025 2023 6,035,000 1,531,316 7,566,316 2024 6,240,000 1,322,359 7,562,359 2025 6,420,000 1,138,811 7,558,811 2026 5,230,000 959,870 6,189,870 2027-2031 21,420,000 2,967,205 24,387,205 2032-2036 10,545,000 576,077 11,121,077 $ 61,730,000 10,214,663 71,944,663 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 65 At June 30, 2021, there was $641,401 available in the Education 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. Annual debt service requirements to maturity for all of the Business-type Activities revenue bonds and notes payable obligations outstanding as of June 30, 2021, are as follows: Year ending Bonds Payable Notes Payable June 30: Principal Interest Total Principal Interest Total 2022 $ 1,140,000 252,575 1,392,575 869,073 195,641 1,064,714 2023 1,160,000 215,484 1,375,484 869,073 182,604 1,051,677 2024 970,000 161,631 1,131,631 869,073 169,569 1,038,642 2025 990,000 145,624 1,135,624 869,073 156,532 1,025,605 2026 1,005,000 126,762 1,131,762 869,073 143,496 1,012,569 2027-2031 4,195,000 374,420 4,569,420 4,345,361 529,440 4,874,801 2032-2036 1,680,000 37,137 1,717,137 3,714,130 211,038 3,925,168 2037-2038 - - - 637,845 9,568 647,413 $ 11,140,000 1,313,633 12,453,633 13,042,701 1,597,888 14,640,589 (11) Fund Balances Detailed information related to amounts classified as nonspendable, committed and assigned fund balances in governmental funds at June 30, 2021 are as follows: Education Support Facilities Education Special Special Debt Other General Revenue Revenue Service Governmental Fund Fund Fund Fund Funds Total Nonspendable: Prepaid items $ 33,149 - - - - 33,149 Restricted: Commercial Passenger Vessel $ - - - - 153,535 153,535 Committed: Facility Upgrades - - 39,925,298 - - 39,925,298 Debt Service - - - 641,401 - 641,401 Fire and Road Service Areas - - - - 2,517,058 2,517,058 Emergency planning - - - - 22,824 22,824 Land Sales - - - - 1,440,299 1,440,299 Buildings and Grounds - - - - 1,621,684 1,621,684 Street Lighting Districts - - - - 52,106 52,106 Tourism Development - - - - 76,647 76,647 Mission Lake Tide Gate - - - - 63,641 63,641 Total committed $ - - 39,925,298 641,401 5,794,259 46,360,958 Assigned: Education support $ - 55,731 - - - 55,731 Capital Projects and Upgrades - - - - 6,772,600 6,772,600 Total assigned $ - 55,731 - - 6,772,600 6,828,331 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 66 (12) 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 date the 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 $6,559,000 as of June 30, 2021, which is based on 40.7% usage (filled) of the landfill. The Borough recorded closure/post-closure expenses of $805,773 of estimated future costs for closure and post-closure costs. The estimated total current cost of the landfill closure and post closure care of $6,559,000 is based on the amount that would be paid if the landfill were closed as of June 30, 2021. 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 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 2021. The lateral expansion has an estimated forty year capacity. Capital costs to complete are estimated at $4,600,000. (13) 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. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 67 The responsibilities of both JIA and the participants are as follows: (a) Responsibilities of JIA JIA shall perform the following instructions in 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; commercial 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 adjusting and subrogation services for claims covered by the association’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 as a liaison between the participant and JIA with respect to risk management.  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 loss 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 JIA’s loss reporting system. (14) Rental Revenues (a) Hospital Facilities Enterprise Fund The Kodiak Island Borough Assembly leases the Kodiak Island Hospital 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 was renegotiated in 2017 and is effective through fiscal year 2027. 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. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 68 The agreement with Providence established a 20 year renewal and replacement schedule, provided for a 3% administrative fee to be paid to the Borough, as well as $100,000 annual payment to replenish the Borough’s Hospital Enterprise Fund Net Position. If renewal and replacement costs are 25% greater than the budgeted costs, the lease payment may be amended to incorporate these cost overruns. If projects greater than $50,000 are necessary to meet federal or state facility audits, the lease payment may be amended to incorporate these cost overruns. (b) Long Term Care Center Enterprise Fund The Kodiak Island Borough Assembly leases the Kodiak Island Long Term Care Center to Sisters of Providence, d.b.a. Providence Kodiak Island Medical Center who assumed responsibility for the Long Term Care Center’s operations as of February 1, 2015. 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 Center’s capital assets, the lease income, and all other costs relating to the agreement are accounted for by the Borough in the Long Term Care Center Enterprise Fund. The agreement with Providence specifies that Providence will pay monthly lease payments to the Borough in an amount no less than required to fully fund all debt service requirements plus an amount sufficient to cover the Borough’s expenses in maintaining insurance for fire and other risks (including earthquakes). The monthly lease payment will be adjusted on January 1, each year and is based on the Borough’s required debt service payments and costs to insure the facility. The current lease payment through June 30, 2033, is $86,968. (c) Kodiak Fisheries Research Center The Kodiak Fisheries Research Center (KFRC) leases its premise to the Alaska Department of Fish and Game (ADF&G), the General Services Administration (GSA) on behalf of both the National Oceanic and Atmospheric Administration (NOAA) and the Natural Resources Commission (NRC), and Kodiak Regional Aquaculture Association (KRAA). The lease with ADF&G is from October 1, 1998 through September 30, 2018. In September 2018, one of two options to extend for an additional five-year period was executed, extending the term of the lease through September 2023. Annual rent escalates each year and is currently $59,978. The lease with NOAA was amended in April 2016 and expires in March 2036. Annual rent is $868,777 which is comprised of $185,867 base rent plus operational and maintenance expenses of $513,561 and debt repayment of $169,349. The debt repayment element was negotiated in the new lease to recover a portion of the original debt incurred by the Borough for construction of the facility. The original bond issue was fully paid by the Borough; however, the new lease is designed to recoup costs already incurred and this portion of the lease is recorded as a long- term receivable in the amount of $1,148,058 as of June 30, 2021. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 69 The lease with NRC commenced on March 1, 2018, and extends through February 28, 2038, with rents escalating every three years. The current annual rate of $26,311 is effective through February 29, 2024. The lease with Kodiak Regional Aquaculture Association was amended to include more space. The new lease term is from March 2020 through June 30, 2023. Annual rent is $18,853. (15) Employee Retirement System Plans The Borough follows Governmental 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-employment Benefits Other than Pensions. GASB Codification P20 and GASB Codification P50 establish uniform standards for the measurement, recognition, and display of pension and other post-employment benefits other than pensions (healthcare) expenditures/expense and related liabilities, assets, note disclosure and applicable required supplementary information in the financial reports of state and local governmental employers. All full-time employees and certain permanent part-time employees of the Borough participate in the State of Alaska Public Employees’ Retirement System (PERS). In addition to the pension plan, PERS also administers other post-employment benefit (OPEB) plans. The system is governed by the Alaska Retirement Management Board. The benefit and contribution provisions are established by State law and may be amended only by the State legislature. The Administrator of the Plan is the Commissioner of Administration or the Commissioner’s designee. Summary of Significant Accounting Policies. The financial statements for PERS 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 are 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 value. PERS acts as the common investment and administrative agencies for the following multiple-employer plans: Plan Name Type of Plan Defined Benefit Pension Plan (DB) Cost-sharing, Defined Benefit Pension Defined Contribution Pension Plan (DC) Defined Contribution Pension Defined Benefit Other Postemployment Benefits (OPEB): Occupational Death and Disability Plan Defined Benefit OPEB Alaska Retiree Healthcare Trust Plan Defined Benefit OPEB Retiree Medical Plan Defined Benefit OPEB Defined Contribution Other Postemployment Benefits (DC): Healthcare Reimbursement Arrangement Plan Cost-sharing, Defined Contribution OPEB KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 70 Other Postemployment Benefit Plans (OPEB) Occupational Death and Disability Plan (ODD) The Occupational Death and Disability Plan provides death benefits for beneficiaries of plan participants and long-term disability benefits to all active members within the System. For the year ended June 30, 2021 the employer contribution rate is 0.70% for peace officers/firefighters and 0.31% for all others. Membership in the plan consisted of the following at June 30, 2020 (latest available report): Membership PERS Active plan members 23,378 Participating employers 152 Alaska Retiree Healthcare Trust Plan (ARHCT) Beginning July 1, 2007, the Alaska Retiree Healthcare Trust Plan (ARHCT), a Healthcare Trust Fund of the State, was established. The ARHCT is self-funded and provides major medical coverage to retirees of the System. The System retains the risk of loss of allowable claims for eligible members. The ARHCT began paying member healthcare claims on March 1, 2008. Prior to that, healthcare claims were paid for by the Retiree Health Fund (RHF). For the year ended June 30, 2020 (latest available information) employer contributions were 4.88% of annual payroll. Membership in the plan consisted of the following at June 30, 2020 (latest report available): Membership PERS Inactive plan members or beneficiaries currently receiving benefits 36,140 Inactive plan members entitled to but not yet receiving benefits 7,208 Inactive plan members not entitled to benefits 10,575 Active plan members 11,162 Total plan membership 65,085 Retiree Medical Plan (RMP) The retiree medical plan provides major medical coverage to retirees of the DC plan. The plan is self- insured. Members are not eligible to use this plan until they have at least 10 years of service and are Medicare age eligible. For the year ended June 30, 2021 employer contributions were 1.27%. Membership in the plan consists of the following at June 30, 2020 (latest available report): Membership PERS Inactive plan members or beneficiaries currently receiving benefits 46 Inactive plan members entitled to but not yet receiving benefits 1,717 Inactive plan members not entitled to benefits 14,643 Active plan members 23,378 Total plan membership 39,784 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 71 Healthcare Reimbursement Arrangement Plan The Healthcare Reimbursement Arrangement Plan was established to allow medical expenses to be reimbursed from individual savings accounts established for eligible participants. Employer contributions are 3% of the average annual compensation of all employees in the plan. Membership in the plan consists of the following at June 30, 2020 (latest available report): Membership PERS Inactive plan members or beneficiaries currently receiving benefits 63 Inactive plan members entitled to but not yet receiving benefits 1,717 Inactive plan members not entitled to benefits 14,643 Active plan members 23,378 Total plan membership 39,801 Investments The Board is the investment oversight authority of the system’s investments. As the fiduciary, the Board has the statutory authority to invest the assets under the Prudent Investor Rule. Fiduciary responsibility for the Board’s invested assets is pursuant to AS 37.10.210.390. State of Alaska Department of Treasury provides staff for the Board. Treasury has created a pooled environment by which it manages investments of the Board. Additionally, Treasury manages a mix of Pooled Investment Funds and Collective Investment Funds for the DC Participant-directed Pension plans under the Board’s fiduciary responsibility. Rate of Return The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. The annual weighted rate of return, net of investment expense, for the year ended June 30, 2020 (latest available report) for the DB Plan for PERS is 4.03%, for the ARHCT plan is 4.16%, for the ODD Plan is 4.28%, and for the RMP is 4.33%. For additional information on securities lending, interest rates, credit risks, foreign exchange, derivatives, fair value, and counterparty credit risks, see the separately issued report on the Invested Assets of the State of Alaska Retirement and Benefits Plans at: http://treasury.dor.alaska.gov/armb/Reports-and-Policies/Annual-Audited-Financial-Schedules.aspx. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 72 The long-term expected rate of return on pension and OPEB plan investments was determined using the building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and adding expected inflation. The best estimates of arithmetic real rates of return for each major asset class are summarized below for the PERS plan: Long-Term Expected Asset Class Real Rate of Return Broad Domestic Equity 6.24% Global Equity (non-U.S.) 6.67% Intermediate Treasuries (.16%) Opportunistic 3.01% Real Assets 3.82% Private Equity 10.00% Cash Equivalents (1.09%) Discount Rate: The discount rate used to measure the total pension and OPEB liabilities and assets is 7.38%, which represents a decrease of 0.00% since the prior measurement period. The projection of the cash flows used to determine the discount rate assumes that Employer and State contributions will continue to follow the current funding policy, which meets State statutes. Based on those assumptions, the net pension and OPEB plans fiduciary net pension and OPEB liabilities and assets were projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension and OPEB plan investments were applied to all periods of projected benefit payments to determine the total pension and OPEB liabilities and assets. In the event benefit payments are not covered by the plan’s fiduciary net position, a municipal bond rate would be used to discount the benefits not covered by the plan’s fiduciary net position. The S&P Municipal Bond 20-Year High Grade Index rate was 2.66% as of June 30, 2020. Employer and Other Contribution Rates. There are several contribution rates associated with the pension and healthcare contributions and related liabilities. These amounts are calculated on an annual basis. Employer Effective Rate: This is the actual employer pay-in rate. Under current legislation, this rate is statutorily capped at 22% of eligible wages, subject to the salary floor, and other termination costs as described below. This rate is calculated on all PERS participating wages, including those wages attributable to employees in the defined benefit plan. ARM Board Adopted Rate: This is the rate formally adopted by the Alaska Retirement Management Board. This rate is actuarially determined and used to calculate annual Plan funding requirements, without regard to the statutory rate cap or the GASB accounting rate. Prior to July 1, 2015, there were no constraints or restrictions on the actuarial cost method or other assumptions used in the ARM Board valuation. Effective July 1, 2015, the Legislature requires the ARM Board to adopt employer contribution rates for past service liabilities using a level percent of pay method over a closed 25 year term which ends in 2039. This will result in lower ARM Board Rates in future years. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 73 On-behalf Contribution Rate: This is the rate paid in by the State as an on-behalf payment as mandated under current statute. Under state law, subject to annual appropriation, the state will contribute an on- behalf payment into the plan in an amount equal to the difference between the ARM Board Rate and the Employer Effective Rate. On-behalf contribution amounts have been recognized in these financial statements as both revenue and expenditures. GASB Rate: This is the rate used to determine the long-term pension and healthcare liability for plan accounting purposes. Certain actuarial methods and assumptions for this rate calculation are mandated by the Governmental Accounting Standards Board (GASB). Medicare Part D subsidies are not reflected in this rate. The rate uses a 7.38% discount rate. Employer Contribution rates for the year ended June 30, 2021 are as follows: ARM Employer Board State Effective Adopted Contribution Rate Rate Rate PERS: Pension 14.57% 26.58% 8.85% OPEB 7.43% 4.27% 0% Total PERS contribution rates 22.00% 30.85% 8.85% Termination Costs: If the Borough decides to terminate coverage for a department, group, or other classification of members, even if that termination results from the decision to divest of a particular Borough 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. The 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. The 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 2021 the past service rate for PERS is 18.23%. Actuarial Assumptions: The total pension and OPEB liabilities on June 30, 2020 (latest available) were determined by an actuarial valuation as of June 30, 2018 which was rolled forward to the measurement date June 30, 2020. These actuarial assumptions were based on the results of an actuarial experience study for the period from July 1, 2013 to June 30, 2017. Investment return / discount rate 7.38% per year (geometric), compounded annually, net of expenses Salary scale Inflation – 2.5% per year Productivity – 0.25% per year Payroll growth 2.75% per year (inflation + productivity) Total inflation Total inflation as measured by the Consumer Price Index for urban and clerical workers from Anchorage is assumed to increase 2.5% annually. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 74 Mortality (Pre-termination) Based upon 2013-2017 actual mortality experience, 100% (male and female) of RP-2014 healthy annuitant table with MP-2017 generational improvement. Mortality (Post-termination) Mortality rates based upon the 2013-2017 actual experience. 91% of male and 96% of female rates of RP-2014 health annuitant table with MP-2017 generational improvement. Total turnover Based upon the 2013-2017 actual withdrawal experience. Disability Incidence rates based on 2013-2017 actual experience. Post-disability mortality in accordance with the RP-2014 disability table with MP-2017 generational improvement. Disabilities are assumed to be occupational 75% of the time for peace officers/firefighters, 40% of the time for others. Retirement Retirement rates based upon the 2013-2017 actual experience. Deferred vested members are assumed to retire at their earliest unreduced retirement date. Marriage and age difference Males are assumed to be three years older than their wives. Females are assumed to be two years younger than their husbands. For others, 75% of male members and 70% of female members are assumed to be married. For peace officers/firefighters, 85% of male members and 60% female members are assumed to be married. Healthcare cost trend rates Pre-65 medical: 7.0% grading down to 4.5% Post-65 medical: 5.4% grading down to 4.5% Prescription drugs: 8.0% grading down to 4.5% EGWP: 8.0% grading down to 4.5%. As a result of the latest experience study, the Board adopted updated actuarial assumptions for the June 30, 2018 actuarial valuation to better reflect expected future experience. In addition to the changes in assumptions resulting from the experience study, the following assumption changes related to the ARHCT plan have been made since the prior valuation: 1. Based on recent experience, the healthcare cost trend assumptions were updated. 2. Per capita claims costs were updated to reflect recent experience. 3. Healthcare cost trends were updated to reflect a Cadillac Tax load. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 75 The changes of assumptions from the latest experience study created substantial deferred outflows of resources attributable to the Borough, as well as an OPEB benefit recognized by the Borough for the State’s proportionate share of OPEB plan expense attributable to the Borough. In some instances the reduction of revenues and expenses reported for the State’s proportionate share of OPEB plan expense attributable to the Borough creates a net negative Pension/OPEB expense (net pension/OPEB benefit) which results in negative operating grants and contributions for certain functions reported on the Statement of Activities. Alaska Public Employee Retirement System (PERS) – Defined Benefit Plan (DB) Plan Description. The Borough participates in the Alaska Public Employees’ Retirement System (PERS), a cost sharing multiple employer defined benefit pension plan. PERS provides retirement benefits, disability and death benefits, and post-employment healthcare to plan members and beneficiaries. The Plan was established and is administered by the State of Alaska, Department of Administration. 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 or online at: http://doa.alaska.gov/drb/pers. Pension Benefits. All tier employee benefits vest with five years of credited service. There are three tiers of employees based on entry date. Tier I 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 Tier II and III employees enrolled after June 30, 1986, but before July 1, 2006, the normal and early retirement ages are 60 and 55, respectively. All tier employees with 30 or more years of credited service may retire at any age and receive a normal benefit. The PERS defined benefit is closed to new hires enrolled on or after July 1, 2006. New hires after this date participate in the PERS defined contribution plan (DC) described later in these notes. Currently there are 154 employers participating in PERS defined benefit plan, including the State of Alaska and 153 political subdivisions and public organizations. The DB Plan’s membership consisted of the following at June 30, 2020 (latest available report): Inactive plan members or beneficiaries currently receiving benefits 36,140 Inactive plan members entitled to but not receiving benefits 7,208 Inactive members not entitled to benefits 10,575 Active plan members 11,162 Total DB plan membership 65,085 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 peace officers/firefighters members or members hired prior to July 1, 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. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 76 The percentage multipliers for peace officers/firefighters 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 first 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 to all members first enrolled before July 1, 1986. Members first enrolled after June 30, 1986, but before July 1, 2006, and who have not reached age 60 may elect to pay for major medical benefits. Post Retirement Pension Adjustments. Post retirement pension adjustments (PRPAs) are granted 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 CPI 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. In April 2008 the Alaska Legislature passed legislation which statutorily capped the employer contribution, established a state funded “on-behalf” contribution, and required that employer contributions be calculated against all PERS eligible wages, including wages paid to participants of the PERS Tier IV defined contribution plan (DC) described later in these footnotes. The state legislature capped the rate at 22%, with the State contributing an on-behalf payment for the difference between the actuarial contribution and the cap. Salary Floor. During the 25th legislation session, Senate Bill 125 passed, which established a June 30, 2008 salary floor under AS 39.35.255(a)(2). 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. The statute requires the Division of Retirement and Benefits (Division) to collect employer contributions at a minimum based on FY 2008 base salaries. Employee Contribution Rate. The Borough’s PERS active members are required to contribute 7.5% of their annual covered salary for peace officers/firefighters and 6.75% for all others. Employer contributions for the year ended June 30, 2021, were: Pensions (DB) Other Post-Employment Benefits (DB) Total $ 407,818 106,350 514,168 KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 77 Public Employees Retirement Plans For the year ended June 30, 2021 the State of Alaska contributed $268,540 (100% pension cost) on- behalf of the Borough, which has been recorded in the fund financial statements under the modified- accrual basis of accounting. In the government-wide financial statements the on-behalf contribution has been adjusted as of the measurement date June 30, 2020 to a total of $170,822, to represent the pension/OPEB expense attributable to the State under the full accrual basis of accounting. Pension and OPEB Liabilities and Assets, Pension and OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions and OPEB: At June 30, 2021, the Borough reported liabilities and assets that reflected a reduction for State pension and OPEB support provided to the Borough. The amount recognized by the Borough as its proportionate share of net pension and OPEB liabilities (assets), the related State support, and the total portion of the net pension and OPEB liabilities (assets) that were associated with the Borough were as follows: Defined Benefit: Pension Borough’s proportionate share of the net pension liability $ 5,191,159 State’s proportionate share of the net pension liability 2,144,483 Total $ 7,335,642 OPEB Borough’s proportionate share of the ARHCT OPEB (asset) $ (398,510) State’s proportionate share of the ARHCT OPEB (asset) (165,197) Total $ (563,707) Borough’s proportionate share of the ODD OPEB (asset) $ (34,792) Borough’s proportionate share of the RMP OPEB liability $ 10,236 Total Borough’s share of OPEB (asset) $ (433,302) Total Borough’s share of net pension and OPEB liabilities $ 5,201,395 The net pension and OPEB liabilities and assets were measured as of June 30, 2020, and the total pension and OPEB liabilities used to calculate the net pension and OPEB liabilities and assets were determined by an actuarial valuation as of that date. The City’s proportion of the net pension and OPEB liabilities and assets were based on the present value of contributions for FY2022 through FY2039, as determined by projections based on the June 30, 2020 valuation. The Borough’s proportionate share and changes in the pension and OPEB liabilities and assets were as follows: June 30, 2019 June 30, 2020 Measurement Measurement Change Pension .1122% .0880% (.0242%) OPEB: ARHCT .1121% .0880% (.0241%) ODD .1352% .1276% (.0076%) RMP .1530% .1443% (.0087%) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 78 Based on the measurement date of June 30, 2020, the Borough recognized pension and OPEB expense of ($194,131) and ($316,948), respectively, for the year ended June 30, 2021. At June 30, 2021, the Borough reported deferred outflows of resources and deferred inflows of resources related to pensions and OPEB from the following sources: Pension Deferred Outflows Deferred Inflows Defined Benefit: of Resources of Resources Differences between expected and actual experience $ 16,468 - Changes of assumptions - - Net difference between projected and actual earnings on pension plan investments 211,280 - Changes in proportion and differences between Borough contributions and proportionate share of contributions - (303,133) Borough contributions subsequent to the measurement date 407,818 - Total $ 635,566 (303,133) OPEB ARHCT Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ - (31,970) Changes of assumptions - (277,785) Net difference between projected and actual earnings on OPEB plan investments 159,893 - Changes in proportion and differences between Borough contributions and proportionate share of contributions 8,148 - Borough contributions subsequent to the measurement date 73,672 - Total $ 241,713 (309,755) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 79 OPEB ODD Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ - (11,674) Changes of assumptions - (510) Net difference between projected and actual earnings on OPEB plan investments 1,193 - Changes in proportion and differences between Borough contributions and proportionate share of contributions 4,056 (3,332) Borough contributions subsequent to the measurement date 6,630 - Total $ 11,879 (15,516) OPEB RMP Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ 53 (2,200) Changes of assumptions 14,376 (26,463) Net difference between projected and actual earnings on OPEB plan investments 4,584 - Changes in proportion and differences between Borough contributions and proportionate share of contributions 1,885 (1,940) Borough contributions subsequent to the measurement date 26,048 - Total $ 46,946 (30,603) $407,818 and $106,350 are reported as deferred outflows of resources related to pension and OPEB resulting from Borough contributions subsequent to the measurement date and will be recognized as a reduction of the net pension and OPEB liabilities and as an increase to the net pension and OPEB assets in the year ended June 30, 2022, respectively. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension and OPEB will be recognized in pension and OPEB expense as follows: Year Ended June 30, Pension OPEB ARHCT OPEB ODD OPEB RMP 2021 $ (282,931) (302,893) (1,764) (1,089) 2022 74,301 56,913 (1,481) (174) 2023 78,534 61,109 (1,475) (190) 2024 54,711 43,157 (1,570) (540) 2025 - - (1,871) (1,644) 2026 - - (2,106) (6,068) Total $ (75,385) (141,714) (10,267) (9,705) KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 80 For the year ended June 30, 2021, the Borough recognized ($1,142,114) and $18,626 of pension and OPEB amortization of the net deferred outflows and inflows of resources, respectively. Sensitivity of the Net Pension and OPEB Liabilities and Assets to Changes in the Discount Rate: The following presents the net pension and OPEB liabilities and assets of the plan calculated using the discount rate of 7.38%, as well as what the Plans’ net pension and OPEB liabilities and assets would be if they were calculated using a discount rate that is 1-percentage-point lower (6.38%) or 1- percentage-point higher (8.38%) than the current rate: 1% Decrease Current Rate 1% Increase (6.38%) (7.38%) (8.38%) Net pension liability $ 6,749,604 5,191,159 3,884,058 Net OPEB ARHCT liability (asset) $ 415,837 (398,510) (1,073,031) Net OPEB ODD liability (asset) $ (32,694) (34,792) (36,469) Net OPEB RMP liability (asset) $ 63,417 10,236 (30,019) Sensitivity of the Borough’s proportionate share of the Net OPEB liability and assets to changes in the healthcare cost trend rates. The following present the Borough ’s proportionate share of the net OPEB liability (asset), as well as what the Borough ’s proportionate share of the net OPEB liability (asset) would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1- percentage-point higher than the current healthcare cost trend rates: 1% Decrease Current Rate 1% Increase Net OPEB ARHCT liability (asset) $ (1,152,117) (398,510) 514,064 Net OPEB ODD liability (asset) $ NA (34,792) NA Net OPEB RMP liability (asset) $ (35,918) 10,236 73,017 Alaska Public Employee Retirement System (PERS) – Defined Contribution Plan (DC) Plan Description and Funding Requirements. Borough’s and Public Employers in the State of Alaska have a defined contribution retirement plan (PERS Tier IV) for new hires first enrolled on or after July 1, 2006. This Plan is administered by the State of Alaska, Department of Administration in conjunction with the defined benefit plan noted above. The Administrator of the Plan is the Commissioner of Administration or the Commissioner’s designee. Plan members make mandatory contributions of 8% of gross eligible compensation. This amount goes directly to the individual’s account. State statutes require the employer to contribute 5% of employees’ eligible compensation. Additionally, employers are required to contribute to OPEB (DB): 1.32% for the retiree medical plan (DB), 0.26% for occupational and death and disability benefits (DB) and 3% of employers’ average annual employee compensation to the health reimbursement arrangement (HRA DC). The effective employer contribution is 22%. Additionally, there is a defined benefit unfunded liability (DBUL) amount levied against the DC plan and allocated to the DB Plan’s pension and OPEB contribution. Plan members are 100% vested with their contributions. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 81 Members become vested in employers’ contributions as follows: 2 years of service – 25% 3 years of service – 50% 4 years of service – 75% 5 years of service – 100% The Borough contributed $160,417 for the year ended June 30, 2021, which included forfeitures of $8,395 which have been applied as employer 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 deferred 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, 2021, were $85,434. The first plan is managed by the International City Managers Association Retirement Corporation (ICMA). $21,650 was contributed to this plan during the year ended June 30, 2021. 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. $63,784 was contributed to this plan during the year ended June 30, 2021. The Borough believes that the plan does not meet the criteria for inclusion as a fiduciary fund. (16) Contingencies (a) General The Borough, 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 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. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 82 (17) Advance Refunding of Debt In November 2016, the Borough’s Long Term Care Center Enterprise Fund advance refunded $4,455,000 of the 2013 Series Two revenue bonds with an average interest rate of 4.43%, using $4,529,157 in available resources and $363,612 released from the Debt Service Reserve Fund for the 2013 Series Two revenue bonds. As a result, a portion of the 2013 Series Two bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements. As of June 30, 2021, the amount of defeased debt still outstanding was $3,515,000. In May 2021, the Borough issued $4,070,000 of 2021 Series One general obligation bonds with an interest rate of 5.0% to advance refund $4,815,000 of outstanding 2011 Series One general obligation bonds with interest rates ranging from 4.750% to 5.125%. The net proceeds of $4,894,601 (after payment of $32,575 of issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2011 Series One bonds. As a result, the 2011 Series One bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements. As of June 30, 2021, the amount of defeased debt still outstanding was $4,815,000. The Borough advance refunded the 2011 Series One bonds to reduce its total debt service payments over the next 10 years by $1,085,035, and to obtain an economic gain (difference of the present value of the debt service payments on the old and new debt) of $943,495. In May 2021, the Borough issued $4,225,000 of 2021 Series Two general obligation bonds with interest rates ranging from 0.243% to 0.698% to advance refund $3,995,000 of outstanding 2012 Series A and Series B general obligation bonds with interest rates ranging from 4.00% to 5.00%. The net proceeds of $4,194,173 (after payment of $30,827 of issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2011 Series One bonds. As a result, the 2011 Series One bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements. As of June 30, 2021, the amount of defeased debt still outstanding was $3,995,000. The Borough advance refunded the 2012 Series A and Series B bonds to reduce its total debt service payments over the next 4 years by $221,126, and to obtain an economic gain (difference of the present value of the debt service payments on the old and new debt) of $234,720. In May 2021, the Borough issued $14,535,000 of 2021 Series Three general obligation bonds with interest rates ranging from 0.243% to 2.222% to advance refund $13,195,000 of outstanding 2013 Series One general obligation bonds with interest rates ranging from 3.80% to 5.00%. The net proceeds of $14,455,418 (after payment of $79,582 of issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2013 Series One bonds. As a result, the 2013 Series One bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements. As of June 30, 2021, the amount of defeased debt still outstanding was $13,195,000. The Borough advance refunded the 2013 Series One bonds to reduce its total debt service payments over the next 12 years by $1,896,224, and to obtain an economic gain (difference of the present value of the debt service payments on the old and new debt) of $1,618,541. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 83 In May 2021, the Borough issued $14,520,000 of 2021 Series Four general obligation bonds with interest rates ranging from 0.243% to 2.352% to advance refund $12,645,000 of outstanding 2014 Series One general obligation bonds with interest rates ranging from 3.80% to 5.00%. The net proceeds of $14,437,316 (after payment of $82,684 of issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2014 Series One bonds. As a result, the 2014 Series One bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements. As of June 30, 2021, the amount of defeased debt still outstanding was $12,645,000. The Borough advance refunded the 2014 Series One bonds to reduce its total debt service payments over the next 13 years by $1,679,816, and to obtain an economic gain (difference of the present value of the debt service payments on the old and new debt) of $1,390,841. In May 2021, the Borough’s Municipal Solid Waste Collection and Disposal Enterprise Fund issued $1,215,000 of revenue bonds with interest rates of 5.00% to advance refund $1,355,000 of outstanding 2012 revenue bonds with interest rates ranging from 4.00% to 5.00%. The net proceeds of $1,384,665 (after payment of $21,368 of issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2012 revenue bonds. As a result, the 2012 revenue bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements. As of June 30, 2021, the amount of defeased debt still outstanding was $1,355,000. The Borough advance refunded the 2012 revenue bonds to reduce its total debt service payments over the next 6 years by $128,531, and to obtain an economic gain (difference of the present value of the debt service payments on the old and new debt) of $127,059. In May 2021, the Borough’s Long Term Care Center Enterprise Fund issued $8,100,000 of revenue bonds with interest rates ranging from .243% to 2.222% to advance refund $7,750,000 of outstanding 2013 revenue bonds with interest rates ranging from 3.00% to 5.00%. The net proceeds of $8,047,454 (after payment of $52,546 of issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2013 revenue bonds. As a result, the 2013 revenue bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements. As of June 30, 2021, the amount of defeased debt still outstanding was $7,750,000. The Borough advance refunded the 2013 revenue bonds to reduce its total debt service payments over the next 10 years by $1,452,573, and to obtain an economic gain (difference of the present value of the debt service payments on the old and new debt) of $1,171,110. (18) Subsequent Events Management have evaluated subsequent events through December 7, 2021, the date which the financial statements were available for issue. (19) Construction Commitments The Borough has outstanding commitments for construction at year end of $2,252,911. KODIAK ISLAND BOROUGH Notes to Basic Financial Statements, Continued 84 (20) Subsequent Accounting Pronouncements The Governmental Accounting Standards Board has passed several new accounting standards with upcoming implementation dates covering several topics as follows:  GASB 87 Leases. Effective for fiscal years beginning after June 15, 2021.  GASB 89 Accounting for Interest Cost Incurred before the End of a Construction Period. Effective for fiscal years beginning after December 15, 2021.  GASB 91 Conduit Debt Obligations. Effective for fiscal years beginning after December 15, 2021.  GASB 92 Omnibus 2021. This Statement has multiple effective dates which vary by topic.  GASB 93 Replacement of Interbank Offered Rates. Effective for fiscal years beginning after June 15, 2021.  GASB 94 Public-Private and Public-Public Partnerships and Availability Payments Arrangements. Effective for fiscal years beginning after June 15, 2022.  GASB 95 Postponement of the Effective Dates of Certain Authoritative Guidance. Effective immediately.  GASB 96 Subscription-Based Information Technology Arrangements. Effective for fiscal years beginning after June 15, 2022.  GASB 97 Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. Effective for fiscal years beginning after June 15, 2021. GASB Statements No. 91, 93, 94, 96 and 97 are not expected to have any significant impact on the financial statements of the Borough. GASB Statement No. 87, the objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments' financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right- to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments' leasing activities. GASB Statement No. 89 requires interest costs incurred before the end of a construction period to be recognized as an expenditure or expense in the period in which the cost is incurred for financial statements prepared under the current financial resources measurement focus or the economic resource measurement focus. GASB Statement No. 92, the objectives of this Statement are to enhance comparability and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. GASB Statement No. 95 provides temporary relief to governments in light of the COVID-19 pandemic. The effective dates of the following pronouncement are postponed by one year: GASB Statements No. 83, No. 84, No. 88, No. 89, No. 90, No. 91, No. 92, and No. 93. The effective date for GASB 87 has been postponed by 18 months. REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule General Fund Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget – Budget Positive 2020 Original Final Actual (Negative)Actual Revenues: Property taxes and assessments: Real $3,432,842 3,432,842 3,539,828 106,986 710,068 Personal 381,427 381,427 432,922 51,495 86,754 Aircraft 28,000 28,000 23,100 (4,900) 29,100 Penalty and interest 210,000 210,000 297,832 87,832 227,076 Total property taxes and assessments 4,052,269 4,052,269 4,293,682 241,413 1,052,998 Severance taxes: Fish 1,100,000 1,100,000 996,833 (103,167) 1,170,360 Mining 4,000 4,000 5,302 1,302 12,564 Logging 20,000 20,000 47,295 27,295 40,997 Total severance taxes 1,124,000 1,124,000 1,049,430 (74,570) 1,223,921 Excise taxes: Tobacco 400,000 400,000 700,675 300,675 388,276 Marijuana 2,500 2,500 1,467 (1,033) 1,449 Total excise taxes 402,500 402,500 702,142 299,642 389,725 Intergovernmental: State sources: State community assistance 316,986 316,986 317,746 760 408,022 Fisheries business tax 900,000 900,000 1,049,475 149,475 718,307 Fisheries resource landing tax 150,000 150,000 41,645 (108,355) 210,076 Electric cooperative tax 17,000 17,000 17,424 424 16,198 PERS on-behalf payment 156,541 156,541 184,756 28,215 151,657 Marijuana license 500 500 723 223 474 Total state sources 1,541,027 1,541,027 1,611,769 70,742 1,504,734 Federal sources: Payments in lieu of taxes 1,338,000 1,338,000 1,635,859 297,859 1,651,791 Fish and Wildlife revenue sharing 190,000 190,000 180,733 (9,267) 193,149 CARES Act — 5,792,501 5,503,500 (289,001) 173,633 Total federal sources 1,528,000 7,320,501 7,320,092 (409) 2,018,573 Total intergovernmental revenue 3,069,027 8,861,528 8,931,861 70,333 3,523,307 Charges for services - Sale of copies and maps — — 215 215 1,520 Licenses, permits and fees: Building and trailer permits 52,000 52,000 50,613 (1,387) 78,274 Subdivision and zoning fees 12,000 12,000 14,710 2,710 8,190 Business licenses 300 300 1,500 1,200 1,300 Other permits 8,400 8,400 8,967 567 8,651 Total licenses, permits and fees 72,700 72,700 75,790 3,090 96,415 Investment income 100,000 100,000 24,496 (75,504) 152,804 Other 12,000 12,000 8,528 (3,472) 38,340 Total revenues 8,832,496 14,624,997 15,086,144 461,147 6,479,030 (continued) 2021 KODIAK ISLAND BOROUGH 85 Budgetary Comparison Schedule General Fund, continued Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget – Budget Positive 2020 Original Final Actual (Negative)Actual Expenditures: General government: General administration $279,927 766,249 247,076 519,173 312,529 Borough assembly 149,047 161,047 157,978 3,069 144,221 Borough manager 664,732 664,732 598,403 66,329 688,895 Borough clerk 483,360 483,360 436,557 46,803 454,883 Borough attorney 109,500 109,500 78,203 31,297 88,376 Finance department 819,986 819,986 811,539 8,447 811,528 Management information systems 851,840 851,840 821,329 30,511 863,789 Assessing department 731,316 731,316 709,225 22,091 655,109 Engineering/facilities department 385,671 385,671 503,660 (117,989) 431,045 Total general government 4,475,379 4,973,701 4,363,970 609,731 4,450,375 Public safety - animal control 118,715 118,715 118,700 15 118,700 Community and economic development: Community development department 726,921 726,921 654,501 72,420 592,579 Building official 160,491 160,491 172,085 (11,594) 184,664 Economic development 13,570 13,570 5,850 7,720 20,600 Total community and economic development 900,982 900,982 832,436 68,546 797,843 Emergency preparedness 40,950 40,950 5,257 35,693 4,479 Health and social welfare 126,750 5,433,929 5,257,005 176,924 157,500 Education, culture and recreation 20,800 20,800 20,397 403 20,447 Parks and recreation 72,772 71,772 19,560 52,212 32,561 Kodiak College and city libraries 50,000 50,000 50,000 — 50,000 Total expenditures 5,806,348 11,610,849 10,667,325 943,524 5,631,905 Excess (deficiency) of revenues over expenditures 3,026,148 3,014,148 4,418,819 1,404,671 847,125 Other financing sources (uses): Transfers out (3,026,148) (3,026,148) (3,026,148) — (113,000) Change in fund balance $— (12,000) 1,392,671 1,404,671 734,125 Fund balance, at beginning of year 6,094,549 5,360,424 Fund balance, at end of the year $ 7,487,220 6,094,549 See accompanying notes to required supplementary information. 2021 KODIAK ISLAND BOROUGH 86 KODIAK ISLAND BOROUGH Budgetary Comparison Schedule Special Revenue Fund – Education Support Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget – Budget Positive 2020 Original Final Actual (Negative)Actual Revenues: Property taxes and assessments: Real $8,451,080 8,451,080 8,374,357 (76,723) 9,408,641 Personal 939,009 939,009 1,015,344 76,335 1,154,139 Total revenues 9,390,089 9,390,089 9,389,701 (388) 10,562,780 Expenditures: Primary and secondary education 9,390,089 9,390,089 9,393,364 (3,275) 10,472,544 Excess of revenues over expenditures $— — (3,663) (3,663) 90,236 Fund balance (deficit), at beginning of year 59,394 (30,842) Fund balance, at end of year $ 55,731 59,394 See accompanying notes to required supplementary information. 2021 87 KODIAK ISLAND BOROUGH Budgetary Comparison Schedule Special Revenue Fund – Facilities Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget – Budget Positive 2020 Original Final Actual (Negative) Actual Revenues - Investment income $750,000 750,000 143,572 (606,428) 1,130,902 Expenditures — — — — — Excess of revenues over expenditures 750,000 750,000 143,572 (606,428) 1,130,902 Other financing (uses): Transfers out (832,316) (832,316) (832,316) — (835,191) Change in fund balance $(82,316) (82,316) (688,744) (606,428) 295,711 Fund balance, at beginning of year 40,614,042 40,318,331 Fund balance, at end of year $ 39,925,298 40,614,042 See accompanying notes to required supplementary information. 2021 88 Borough's Proportionate Share of the Plan Fiduciary Borough's Borough's State of Alaska Net Pension Net Position as Proportion Proportionate Proportionate Liability as a a Percentage of the Net Share of the Share of the Total Borough's Percentage of of the Total Pension Net Pension Net Pension Net Pension Covered Covered Pension Liability Liability Liability Liability Payroll Payroll Liability 0.0813%$3,790,363 $3,187,850 $6,978,213 $2,929,492 129%62.37% 0.1143%$5,545,660 $1,488,931 $7,034,591 $3,204,521 173%63.96% 0.1330%$7,434,494 $939,394 $8,373,888 $3,129,406 238%59.55% 0.1100%$5,687,130 $2,118,453 $7,805,583 $3,055,486 186%63.37% 0.1188% $ 5,902,812 $ 1,709,426 $ 7,612,238 $ 3,597,759 164% 65.19% 0.1122% $ 6,144,196 $ 2,435,789 $ 8,579,985 $ 3,249,981 189% 63.42% 0.0880% $ 5,191,159 $ 2,144,483 $ 7,335,642 $ 3,076,150 169% 61.61% See accompanying notes to Required Supplementary Information. KODIAK ISLAND BOROUGH Public Employees' Retirement System (PERS) Schedule of the Borough's Proportionate Share of the Net Pension Liability June 30, 2021 Year 2015 2016 2017 2018 2019 2020 2021 89 Borough's Proportionate Plan Fiduciary Borough's Borough's State of Alaska Share of the Net Position as Proportion Proportionate Proportionate Net OPEB a Percentage of the Net Share of the Share of the Total Liability as a of the Total OPEB Net OPEB Net OPEB Net OPEB Borough's Percentage of OPEB Liability Liability Liability Liability Covered Covered Liability (Asset) (Asset) (Asset) (Asset) Payroll Payroll (Asset) Alaska Retiree Healthcare Trust Plan (ARHCT): 0.1101% $ 929,853 $ 347,255 $ 1,277,108 $ 3,055,486 30.43% 89.68% 0.1187% $ 1,218,333 $ 353,630 $ 1,571,963 $ 3,597,759 33.86% 88.12% 0.1121% $ 166,384 $ 66,122 $ 232,506 $ 3,249,981 5.12% 98.13% 0.0880% $ (398,510) $ (165,197) $ (563,707) $ 3,076,150 -12.95% 106.15% Occupational Death and Disability (ODD): 0.1438% $ (20,405) $ - $ (20,405) $ 3,055,486 -0.67% 212.97% 0.1648% $ (32,004) $ - $ (32,004) $ 3,597,759 -0.89% 270.62% 0.1352% $ (32,784) $ - $ (32,784) $ 3,249,981 -1.01% 297.43% 0.1276% $ (34,792) $ - $ (34,792) $ 3,076,150 -1.13% 283.80% Retiree Medical Plan (RMP): 0.1438% $ 7,500 $ - $ 7,500 $ 616,628 1.22% 93.98% 0.1648% $ 20,969 $ - $ 20,969 $ 669,059 3.13% 88.71% 0.1530% $ 36,596 $ - $ 36,596 $ 665,832 5.50% 83.17% 0.1443% $ 10,236 $ - $ 10,236 $ 683,409 1.50% 92.23% See accompanying notes to Required Supplementary Information. 2019 2020 2021 KODIAK ISLAND BOROUGH Schedule of the Borough's Proportionate Share of the Net OPEB Liability (Asset) Public Employees' Retirement System (PERS) June 30, 2021 Year 2018 2018 2018 2019 2019 2020 2020 2021 2021 90 Contributions Relative to the Contributions Contractually Contractually Contribution Borough's as a Percentage Required Required Deficiency Covered of Covered Contribution Contribution (Excess) Payroll Payroll $370,432 $(370,432) $- $3,204,521 11.56% $377,365 $(377,365) $- $3,129,406 12.06% $406,215 $(406,215) $- $3,055,486 13.29% $483,892 $(483,892) $- $3,597,759 13.45% $397,978 $(401,284) $(3,306) $3,249,981 12.25% $356,123 $(352,817) $3,306 $3,076,150 11.58% $407,818 $(407,818) $- $3,066,295 13.30% See accompanying notes to Required Supplementary Information. KODIAK ISLAND BOROUGH Public Employees' Retirement System (PERS) Schedule of the Borough's Contributions (Pension) June 30, 2021 Year 2015 2016 2017 2018 2019 2020 2021 91 Contributions Relative to the Contributions Contractually Contractually Contribution Borough's as a Percentage Required Required Deficiency Covered of Covered Contribution Contribution (Excess) Payroll Payroll Alaska Retiree Healthcare Trust Plan (ARHCT): $ 137,930 $ (137,930) $ - $ 3,597,759 3.83% $ 143,757 $ (143,757) $ - $ 3,249,981 4.42% $ 142,245 $ (142,245) $ - $ 3,076,150 4.62% $ 73,672 $ (73,672) $ - $ 3,066,295 2.40% Occupational Death and Disability (ODD): $ 3,283 $ (3,283) $ - $ 3,597,759 0.09% $ 5,521 $ (5,521) $ - $ 3,249,981 0.17% $ 5,597 $ (5,597) $ - $ 3,076,150 0.18% $ 6,630 $ (6,630) $ - $ 3,066,295 0.22% Retiree Medical Plan (RMP): $ 19,210 $ (19,210) $ - $ 669,059 2.87% $ 17,951 $ (17,951) $ - $ 665,832 2.70% $ 25,744 $ (25,744) $ - $ 683,409 3.77% $ 26,048 $ (26,048) $ - $ 729,168 3.57% See accompanying notes to Required Supplementary Information. 2018 2018 2018 2019 2019 2019 2020 2021 2020 2020 KODIAK ISLAND BOROUGH Schedule of the Borough's Contributions (OPEB) Public Employees' Retirement System (PERS) June 30, 2021 Year 2021 2021 92 KODIAK ISLAND BOROUGH Notes to Required Supplementary Information June 30, 2021 93 1. Budgets and Budgetary Accounting 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 1. 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 (1) and (2) above by project or department to properly 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 2020 budget document. That document may be obtained from the Kodiak Island Borough, Finance Director, 710 Mill Bay Road, Kodiak, Alaska 99615. Excess of Expenditures over Appropriations The Assembly approves operating budgets and appropriations of direct costs at the function and department level for the General Fund, and at the function level for all other funds. For the year ended June 30, 2021, expenditures exceeded appropriations in the following funds: General Fund: General government – engineering/facilities department $ 117,989 Community and economic development – building official 11,594 Education Support Special Revenue Fund – Primary and secondary education 3,275 KODIAK ISLAND BOROUGH Notes to Required Supplementary Information, Continued 94 2. Public Employees’ Retirement System Schedule of Borough’s Proportionate Share of Net Pension and OPEB Liability (Asset) The table is presented based on the Plan measurement date which is one year prior to fiscal year end for all years presented. Changes in Methods Since the Prior Valuation – June 30, 2019 to June 30, 2020: There were no changes in actuarial methods since the prior valuation. Changes in Assumptions Since the Prior Valuation – June 30, 2019 to June 30, 2020: Healthcare claim costs are updated annually. Retired member contribution trend rates were updated to reflect the ongoing shift in population from pre-Medicare to Medicare-eligible and a projection of expected future retiree contributions reflecting the 10% decrease from 2019 to 2020. The Further Consolidated Appropriations Act, 2020 that was signed in December 2019 made several changes, including the repeal of the Cadillac Tax. The amounts included in the Normal Cost for administrative expenses were updated based on the most recent two years of actual administrative expenses paid from plan assets. Changes in Benefit Provisions Since the Prior Valuation – June 30, 2019 to June 30, 2020: There were no changes in benefit provisions since the prior valuation. GASB requires ten years of information be presented. However, until a full ten years of information is available, the Borough will present only those years for which information is available. Schedule of Borough Contributions (Pension) and (OPEB) The table valuation date is June 30, 2019 which was rolled forward to June 30, 2020. Actuarially determined contribution rates are calculated as of June 30th, two years prior to the fiscal year in which contributions are reported. ADDITIONAL SUPPLEMENTARY INFORMATION KODIAK ISLAND BOROUGH Budgetary Comparison Schedule Debt Service Fund - Education Year ended June 30, 2021 (With summarized financial information for the year ended June 30, 2020) Variance with Final Budget – Positive 2020 Original Final Actual (Negative)Actual Revenues: Property taxes and assessments $2,445,791 2,445,791 2,256,514 (189,277) 2,539,515 Intergovernmental: State sources 210,000 210,000 230,218 20,218 2,767,590 Total revenues 2,655,791 2,655,791 2,486,732 (169,059) 5,307,105 Expenditures: General government 306,301 306,301 10,214 296,087 4,188 Debt service: Principal 4,850,000 4,850,000 4,850,000 — 4,655,000 Interest 2,887,369 2,887,369 2,986,372 (99,003) 3,078,394 Debt issuance costs 30,000 30,000 251,851 (221,851) — Total expenditures 8,073,670 8,073,670 8,098,437 (24,767) 7,737,582 Excess (deficiency) of revenues over expenditures (5,417,879) (5,417,879) (5,611,705) (193,826) (2,430,477) Other financing sources (uses): Proceeds from issuance of refunding debt — — 37,350,000 37,350,000 — Premium on refunding debt — — 857,176 857,176 — Payment to bond refunding escrow agent — — (37,981,510) (37,981,510) — Proceeds from issuance of debt — — 43,647 43,647 — Transfers in - General Fund 3,016,076 3,016,076 3,016,076 — — Transfers in - Facilities Special Revenue Fund 827,316 827,316 827,316 — 830,105 Transfers in - Renewal and Replacement Projects Capital Project Fund 1,574,487 1,574,487 1,574,487 — — Transfers in - Component Unit — — — — 1,632,815 Net other financing sources (uses) 5,417,879 5,417,879 5,687,192 269,313 2,462,920 Change in fund balance $— — 75,487 75,487 32,443 Fund balance, at beginning of year 565,914 533,471 Fund balance, at end of year $ 641,401 565,914 2021 Budget 95 NONMAJOR GOVERNMENTAL FUNDS Special Revenue See Special Revenue section of this report. Capital Projects See Capital Projects section of this report. KODIAK ISLAND BOROUGH Combining Balance Sheet Nonmajor Governmental Funds June 30, 2021 (With summarized financial information at June 30, 2020) Special Capital Revenue Project Assets Funds Funds 2021 2020 Equity in central treasury $ 5,985,014 6,724,649 12,709,663 12,053,450 Receivables: State of Alaska 54,220 325 54,545 33,124 Federal government — 92,440 92,440 104,391 Property taxes, net 24,120 8,144 32,264 50,146 Land sales contracts, due within one year 9,897 — 9,897 17,143 Accounts and other receivables, net 78,416 — 78,416 518,284 Land sale contracts, due after one year 50,824 — 50,824 96,265 Total assets $ 6,202,491 6,825,558 13,028,049 12,872,803 Liabilities: Accounts payable $155,005 36,297 191,302 255,653 Customer deposits 1,000 — 1,000 2,450 Due to other funds 6,778 — 6,778 1,023,068 Unearned revenues 10,448 9,648 20,096 26,164 Total liabilities 173,231 45,945 219,176 1,307,335 Deferred inflows of resources - Unavailable revenues 81,466 7,013 88,479 152,301 Total liabilities and deferred inflows of resources 254,697 52,958 307,655 1,459,636 Fund balances: Restricted 153,535 — 153,535 — Committed 5,794,259 — 5,794,259 5,006,108 Assigned — 6,772,600 6,772,600 7,393,442 Unassigned — — — (986,383) Total fund balances 5,947,794 6,772,600 12,720,394 11,413,167 Total $ 6,202,491 6,825,558 13,028,049 12,872,803 Totals Resources and Fund Balances Liabilities, Deferred Inflows of 96 KODIAK ISLAND BOROUGH Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Year ended June 30, 2021 (With summarized financial information for year ended June 30, 2020) Special Capital Revenue Project Funds Funds 2021 2020 Revenues: Property taxes and assessments $1,494,301 11,236 1,505,537 2,823,425 Transient accommodations tax 50,983 — 50,983 62,829 Intergovernmental: State sources 67,077 2,964 70,041 106,191 Federal sources 69,794 134,954 204,748 368,697 Charges for services 878,153 — 878,153 911,400 Licenses, permits and fees 34,800 — 34,800 33,600 Investment income 20,338 171 20,509 170,443 Rental 13,450 — 13,450 14,400 Other 51,431 301,107 352,538 494,899 Total revenues 2,680,327 450,432 3,130,759 4,985,884 Expenditures: Current: General government 620,973 — 620,973 743,220 Public safety 427,355 — 427,355 517,165 Community and economic development 75,220 — 75,220 87,336 Service district maintenance 647,976 — 647,976 786,366 Capital outlay: Schools — 367,008 367,008 555,253 General 7,780 795,492 803,272 1,049,466 Community development — 25,540 25,540 — Total expenditures 1,779,304 1,188,040 2,967,344 3,738,806 Excess (deficiency) of revenues over expenditures 901,023 (737,608) 163,415 1,247,078 Other financing sources (uses): Land sales proceeds 62,805 — 62,805 28,903 Proceeds from sale of bonds — 2,640,422 2,640,422 — Transfers in 130,072 152,214 282,286 798,086 Transfers out (152,214) (1,689,487) (1,841,701) (725,000) Net other financing sources (uses) 40,663 1,103,149 1,143,812 101,989 Change in fund balances 941,686 365,541 1,307,227 1,349,067 Fund balances, at beginning of year 5,006,108 6,407,059 11,413,167 10,064,100 Fund balances, at end of year $ 5,947,794 6,772,600 12,720,394 11,413,167 Totals 97 NONMAJOR SPECIAL REVENUE FUNDS NONMAJOR SPECIAL REVENUE FUNDS The Fire Protection Area No. 1 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. 1 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. 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 Commercial Passenger Vessel tax revenues. The Commercial Passenger Vessel Fund accounts for the collection of the Commercial Passenger Vessel Tax revenue. The Mission Lake Tide Gate Fund accounts for activities related to maintaining the tide gate for the residents of the service area. Fire Fire Womens Kodiak Monashka Womens Protection Bay Fire Airport Fire Bay Road Service Bay Road Bay View Road Service Area Area No. 1 Department District Service Area Area No. 1 Service Area Service Area No. 2 L.E.P.C. Equity in central treasury $382,841 773,245 51,269 257,474 988,763 107,664 59,761 6,367 22,824 Receivables: State of Alaska — — — — — — — — — Property taxes, net 5,789 2,539 5,698 — 5,004 5,078 — — — Land sales contracts, due within one year — — — — — — — — — Accounts and other receivables, net — — — — 20,217 — — — — Land sale contracts, due after one year — — — — — — — — — Total $388,630 775,784 56,967 257,474 1,013,984 112,742 59,761 6,367 22,824 Liabilities: Accounts payable 4,408 3,066 — 1,720 59,261 41,265 7,569 — — Customer deposits — — — — — — — — — Due to other funds 6,778 — — — — — — — — Unearned revenues 4,500 5,350 — — — — — — — Total liabilities 15,686 8,416 — 1,720 59,261 41,265 7,569 — — Deferred inflows of resources: Unavailable revenues 4,369 2,381 5,343 — 3,880 4,761 — — — Total liabilities and deferred inflows of resources 20,055 10,797 5,343 1,720 63,141 46,026 7,569 — — Fund balances: Restricted — — — — — — — — — Committed 368,575 764,987 51,624 255,754 950,843 66,716 52,192 6,367 22,824 Total fund balances 368,575 764,987 51,624 255,754 950,843 66,716 52,192 6,367 22,824 Total $388,630 775,784 56,967 257,474 1,013,984 112,742 59,761 6,367 22,824 (continued) Liabilities, Deferred Inflows of Resources, and Fund Balances State Grant Program Assets Fire and Road Service Areas Road KODIAK ISLAND BOROUGH Combining Balance Sheet Nonmajor Special Revenue Funds (With summarized financial information at June 30, 2020) June 30, 2021 98 Woodland Buildings Acres Street Trinity Islands Commercial and Light Service Street Light Tourism Passenger Mission Lake Totals Assets Land Sales Grounds Area Service Area Development Vessel Tide Gate 2021 2020 Equity in central treasury $1,402,866 1,659,386 21,063 31,630 56,905 99,315 63,641 5,985,014 5,090,869 Receivables: State of Alaska — — — — — 54,220 — 54,220 — Property taxes, net — — 12 — — — — 24,120 26,357 Land sales contracts, due within one year 9,897 — — — — — — 9,897 17,143 Accounts and other receivables, net 38,452 — — — 19,747 — — 78,416 88,888 Land sale contracts, due after one year 50,824 — — — — — — 50,824 96,265 Total $1,502,039 1,659,386 21,075 31,630 76,652 153,535 63,641 6,202,491 5,319,522 Liabilities: Accounts payable 19 37,104 461 127 5 — — 155,005 126,605 Customer deposits 1,000 — — — — — — 1,000 2,450 Due to other funds — — — — — — — 6,778 34,511 Unearned revenues — 598 — — — — — 10,448 16,516 Total liabilities 1,019 37,702 461 127 5 — — 173,231 180,082 Deferred inflows of resources: Unavailable revenues 60,721 — 11 — — — — 81,466 133,332 Total liabilities and deferred inflows of resources 61,740 37,702 472 127 5 — — 254,697 313,414 Fund balances: Restricted — — — — — 153,535 — 153,535 — Committed 1,440,299 1,621,684 20,603 31,503 76,647 — 63,641 5,794,259 5,006,108 Total fund balances 1,440,299 1,621,684 20,603 31,503 76,647 153,535 63,641 5,947,794 5,006,108 Total $1,502,039 1,659,386 21,075 31,630 76,652 153,535 63,641 6,202,491 5,319,522 Liabilities, Deferred Inflows of Resources, and Fund Balances June 30, 2021 (With summarized financial information at June 30, 2020) Street Lighting Districts KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Combining Balance Sheet, (continued) 99 State Grant Fire Program Fire Womens Kodiak Monashka Womens Protection Bay Fire Airport Fire Bay Road Service Bay Road Bay View Road Service Area No. 1 Department District Service Area Area No. 1 Service Area Service Area Area No. 2 L.E.P.C. Revenues: Property taxes and assessments $ 642,725 110,445 16,578 53,172 434,096 212,809 15,445 — — Transient accommodations tax — — — — — — — — — Intergovernmental: State sources 6,432 — — — — — — — — Federal sources 17,464 1,217 — — — — — — 2,666 Charges for services — 18,657 — — — — — — — Licenses, permits and fees — — — — — 27,600 — — — Investment income 1,003 2,601 209 861 3,664 845 193 22 — Rental — 13,450 — — — — — — — Other 4,791 1,205 — — 20,481 — — — — Total revenues 672,415 147,575 16,787 54,033 458,241 241,254 15,638 22 2,666 Expenditures: Current: General government — — — — — — — — — Public safety 331,577 74,109 18,755 — — — — — 2,914 Community and economic development — — — — — — — — — Service district maintenance — — — 13,091 311,213 310,098 12,898 — — Capital outlay - general 7,780 — — — — — — — — Total expenditures 339,357 74,109 18,755 13,091 311,213 310,098 12,898 — 2,914 Excess (deficiency) of revenues over expenditures 333,058 73,466 (1,968) 40,942 147,028 (68,844) 2,740 22 (248) Other financing sources (uses): Land sale proceeds — — — — — — — — — Transfers in — — — — — — — — 10,072 Transfers out (52,214) — — — — — — — — Net other financing sources (uses) (52,214) — — — — — — — 10,072 Change in fund balances 280,844 73,466 (1,968) 40,942 147,028 (68,844) 2,740 22 9,824 Fund balances, at beginning of year 87,731 691,521 53,592 214,812 803,815 135,560 49,452 6,345 13,000 Fund balances, at end of year $368,575 764,987 51,624 255,754 950,843 66,716 52,192 6,367 22,824 (continued) Fire and Road Service Areas Road Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Year ended June 30, 2021 (With summarized financial information for the year ended June 30, 2020) KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds 100 Buildings Woodland Acres Trinity Islands Commercial and Street Light Street Light Tourism Passenger Mission Lake Totals Land Sales Grounds Service Area Service Area Development Vessel Tide Gate 2021 2020 Revenues: Property taxes and assessments $ — — 5,636 1,899 — — 1,496 1,494,301 1,477,513 Transient accommodations tax — — — — 50,983 — — 50,983 62,829 Intergovernmental: State sources — 6,425 — — — 54,220 — 67,077 67,250 Federal sources — 48,447 — — — — — 69,794 46,647 Charges for services 38,202 821,294 — — — — — 878,153 911,400 Licenses, permits and fees 7,200 — — — — — — 34,800 33,600 Investment income 4,892 4,949 80 113 331 351 224 20,338 161,436 Rental — — — — — — — 13,450 14,400 Other 100 24,854 — — — — — 51,431 4,069 Total revenues 50,394 905,969 5,716 2,012 51,314 54,571 1,720 2,680,327 2,779,144 Expenditures: Current: General government 21,757 592,058 5,577 1,581 — — — 620,973 629,714 Public safety — — — — — — — 427,355 517,165 Community and economic development — — — — 75,143 77 — 75,220 87,336 Service district maintenance — — — — — — 676 647,976 786,366 Capital outlay - general — — — — — — — 7,780 86,271 Total expenditures 21,757 592,058 5,577 1,581 75,143 77 676 1,779,304 2,106,852 Excess (deficiency) of revenues over expenditures 28,637 313,911 139 431 (23,829) 54,494 1,044 901,023 672,292 Other financing sources (uses): Land sales proceeds 62,805 — — — — — — 62,805 28,903 Transfers in — 120,000 — — — — — 130,072 18,000 Transfers out — (100,000) — — — — — (152,214) (725,000) Net other financing sources (uses) 62,805 20,000 — — — — — 40,663 (678,097) Change in fund balances 91,442 333,911 139 431 (23,829) 54,494 1,044 941,686 (5,805) Fund balances, at beginning of year 1,348,857 1,287,773 20,464 31,072 100,476 99,041 62,597 5,006,108 5,011,913 Fund balances, at end of year $1,440,299 1,621,684 20,603 31,503 76,647 153,535 63,641 5,947,794 5,006,108 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Street Lighting Districts Combining Statement of Revenues, Expenditures, Year ended June 30, 2021 and Changes in Fund Balances, (continued) (With summarized financial information for the year ended June 30, 2020) 101 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas – Fire Protection Area No. 1 Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Property taxes and assessments $ 635,280 642,725 7,445 634,883 Intergovernmental: State sources - PERS on-behalf payment 2,800 6,432 3,632 7,943 Federal sources 50,000 17,464 (32,536) 32,581 Investment income — 1,003 1,003 14,250 Other 2,000 4,791 2,791 2,117 Total revenues 690,080 672,415 (17,665) 691,774 Expenditures: Public safety: Personnel 144,333 96,646 47,687 124,737 Volunteers 51,200 30,180 21,020 33,158 Fringe benefits 98,500 65,311 33,189 87,604 Professional services — 9,034 (9,034) 4,720 Support goods and services 237,704 130,406 107,298 182,658 Total public safety 531,737 331,577 200,160 432,877 Capital outlay - general 210,000 7,780 202,220 43,788 Total expenditures 741,737 339,357 402,380 476,665 Excess of revenues over expenditures (51,657) 333,058 384,715 215,109 Other financing sources (uses): Transfers out - Other Capital Projects Capital Project Fund (52,214) (52,214) — (355,000) Change in fund balance $ (103,871) 280,844 384,715 (139,891) Fund balance, at beginning of year 87,731 227,622 Fund balance, at end of year $ 368,575 87,731 2021 102 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 June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Property taxes and assessments $ 108,500 110,445 1,945 109,376 Intergovernmental - federal sources — 1,217 1,217 1,399 Charges for services 16,700 18,657 1,957 8,734 Investment income 2,000 2,601 601 19,812 Rental — 13,450 13,450 14,400 Other 12,000 1,205 (10,795) 50 Total revenues 139,200 147,575 8,375 153,771 Expenditures: Public safety: Personnel services 2,000 789 1,211 514 Fringe benefits 1,025 2,007 (982) 421 Professional services 5,000 5,396 (396) 761 Support goods and services 131,175 65,917 65,258 73,768 Total public safety 139,200 74,109 65,091 75,464 Capital outlay - general 175,000 — 175,000 27,854 Total expenditures 314,200 74,109 240,091 103,318 Excess (deficiency) of revenues over expenditures $(175,000) 73,466 248,466 50,453 Fund balance, at beginning of year 691,521 641,068 Fund balance, at end of year $ 764,987 691,521 2021 103 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas – Kodiak Airport Fire District Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Property taxes and assessments $ 18,429 16,578 (1,851) 18,544 Investment income — 209 209 1,349 Total revenues 18,429 16,787 (1,642) 19,893 Expenditures: Public safety: Professional services 14,200 18,657 (4,457) 8,734 Support goods and services 4,229 98 4,131 90 Total expenditures 18,429 18,755 (326) 8,824 Excess (deficiency) of revenues over expenditures $— (1,968) (1,968) 11,069 Fund balance, at beginning of year 53,592 42,523 Fund balance, at end of year $ 51,624 53,592 104 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas – Monashka Bay Road Service Area Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Property taxes and assessments $ 48,805 53,172 4,367 51,388 Investment income — 861 861 6,514 Total revenues 48,805 54,033 5,228 57,902 Expenditures: Service district maintenance: Personnel services 600 49 551 — Fringe benefits 205 28 177 — Support goods and services 1,500 120 1,380 121 Snow removal/sanding 11,000 6,983 4,017 20,540 Road grading/ditching 23,000 5,911 17,089 1,847 Repairs and maintenance 12,500 — 12,500 23,922 Total expenditures 48,805 13,091 35,714 46,430 Excess of revenues over expenditures $— 40,942 40,942 11,472 Fund balance, at beginning of year 214,812 203,340 Fund balance, at end of year $ 255,754 214,812 105 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas – Service Area No. 1 Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2021 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Property taxes and assessments $ 428,500 434,096 5,596 429,121 Investment income — 3,664 3,664 29,779 Other — 20,481 20,481 — Total revenues 428,500 458,241 29,741 458,900 Expenditures: Service district maintenance: Personnel services 8,800 4,998 3,802 5,442 Fringe benefits 2,350 760 1,590 1,676 Support goods and services 13,600 3,046 10,554 8,981 Snow removal/sanding 200,000 106,454 93,546 152,112 Road grading/ditching 60,000 41,356 18,644 40,434 Repairs and maintenance 143,750 154,599 (10,849) 277,905 Total expenditures 428,500 311,213 117,287 486,550 Excess (deficiency) of revenues over expenditures $— 147,028 147,028 (27,650) Fund balance, at beginning of year 803,815 831,465 Fund balance, at end of year $ 950,843 803,815 (With financial information for the year ended June 30, 2020) 106 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas – Womens Bay Road Service Area Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Property taxes and assessments $210,000 212,809 2,809 210,610 Licenses, permits and fees 27,600 27,600 — 27,600 Investment income — 845 845 5,548 Total revenues 237,600 241,254 3,654 243,758 Expenditures: Service district maintenance: Personnel services 500 — 500 20 Fringe benefits 250 — 250 13 Support goods and services 31,850 389 31,461 713 Snow removal/sanding 65,000 54,998 10,002 69,985 Road grading/ditching 45,000 59,639 (14,639) 33,851 Repairs and maintenance 95,000 195,072 (100,072) 139,600 Total expenditures 237,600 310,098 (72,498) 244,182 Excess (deficiency) of revenues over expenditures $— (68,844) (68,844) (424) Fund balance, at beginning of year 135,560 135,984 Fund balance, at end of year $ 66,716 135,560 107 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas – Bay View Road Service Area Schedule of Revenues, Expenditures, and Changes in Fund Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Property taxes and assessments $13,879 15,445 1,566 14,569 Investment income 100 193 93 1,461 Total revenues 13,979 15,638 1,659 16,030 Expenditures: Service district maintenance: Personnel services 500 49 451 — Fringe benefits 174 42 132 — Professional services 5,305 — 5,305 550 Support goods and services — 88 (88) 89 Snow removal/sanding 5,400 1,697 3,703 7,873 Road grading/ditching 1,100 4,104 (3,004) 142 Repairs and maintenance 1,500 6,918 (5,418) — Total expenditures 13,979 12,898 1,081 8,654 Excess of revenues over expenditures $— 2,740 2,740 7,376 Fund balance, at beginning of year 49,452 42,076 Fund balance, at end of year $ 52,192 49,452 108 KODIAK ISLAND BOROUGH 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, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Investment income $— 22 22 176 Expenditures: Service district maintenance - Support goods and services — — — — Excess of revenues over expenditures $— 22 22 176 Fund balance, at beginning of year 6,345 6,169 Fund balance, at end of year $ 6,367 6,345 109 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Intergovernmental: Federal sources $— 2,666 2,666 — Expenditures: Public safety: Personnel services — 2,409 (2,409) — Fringe benefits — 256 (256) — Support goods and services 10,072 249 9,823 — Total expenditures 10,072 2,914 7,158 — Excess (deficiency) of revenues over expenditures (10,072) (248) 9,824 — Other financing sources: Transfer in - General Fund 10,072 10,072 — 13,000 Change in fund balance $— 9,824 9,824 13,000 Fund balance, at beginning of year 13,000 — Fund balance, at end of year $ 22,824 13,000 L.E.P.C. 110 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, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Charges for services $8,000 38,202 30,202 85,775 Licenses, permits and fees 6,000 7,200 1,200 6,000 Investment income 25,000 4,892 (20,108) 37,763 Other 80 100 20 1,307 Total revenues 39,080 50,394 11,314 130,845 Expenditures: General government: Personnel services 1,000 1,000 — 1,229 Fringe benefits — — — 614 Professional services — — — 2,905 Support goods and services 55,167 20,757 34,410 26,759 Total expenditures 56,167 21,757 34,410 31,507 Excess (deficiency) of revenues over expenditures (17,087) 28,637 45,724 99,338 Other financing sources (uses): Land sale proceeds 28,464 62,805 34,341 28,903 Transfer out - Other Capital Projects Capital Projects Fund (250,000) — 250,000 (100,000) Net other financing sources (uses)(221,536) 62,805 284,341 (71,097) Change in fund balance $(238,623) 91,442 330,065 28,241 Fund balance, at beginning of year 1,348,857 1,320,616 Fund balance, at end of year $ 1,440,299 1,348,857 111 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Buildings and Grounds Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Intergovernmental: State sources - PERS on-behalf payment $6,974 6,425 (549) 5,087 Federal sources — 48,447 48,447 12,667 Charges for services 813,251 821,294 8,043 816,891 Investment income 10,000 4,949 (5,051) 36,787 Other — 24,854 24,854 595 Total revenues 830,225 905,969 75,744 872,027 Expenditures: General government: School buildings 390,200 180,890 209,310 171,500 Borough building 766,295 390,825 375,470 409,779 Mental health center 46,800 4,778 42,022 4,546 Various borough buildings 36,000 15,565 20,435 5,767 Total expenditures 1,239,295 592,058 647,237 591,592 Excess (deficiency) of revenues over expenditures (409,070) 313,911 722,981 280,435 Other financing sources (uses): Transfers in: Facilities Special Revenue Fund 5,000 5,000 — 5,000 Renewal and Replacement Projects Capital Project Fund — 115,000 115,000 — Transfers out: Other Capital Projects Capital Project Fund — — — (175,000) Borough Capital Projects Capital Project Fund (25,000) (25,000) — — Renewal and Replacement Projects Capital Project Fund (75,000) (75,000) — (50,000) Net other financing sources (uses)(95,000) 20,000 115,000 (220,000) — Change in fund balance $ (504,070) 333,911 837,981 60,435 Fund balance, at beginning of year 1,287,773 1,227,338 Fund balance, at end of year $ 1,621,684 1,287,773 112 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Woodland Acres Street Light Service Area Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2021 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Property taxes and assessments $ 5,540 5,636 96 5,578 Investment income — 80 80 724 Total revenues 5,540 5,716 176 6,302 Expenditures: General government - Support goods and services 5,540 5,577 (37) 4,871 Capital outlay - equipment — — — 14,629 Total expenditures 5,540 5,577 (37) 19,500 Excess (deficiency) of revenues over expenditures $— 139 139 (13,198) Fund balance, at beginning of year 20,464 33,662 Fund balance, at end of year $ 20,603 20,464 (With financial information for the year ended June 30, 2020) 113 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, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Property taxes and assessments $ 1,897 1,899 2 1,873 Investment income — 113 113 879 Total revenues 1,897 2,012 115 2,752 Expenditures: General government - Support goods and services 1,897 1,581 316 1,744 Excess of revenues over expenditures $— 431 431 1,008 Fund balance, at beginning of year 31,072 30,064 Fund balance, at end of year $ 31,503 31,072 114 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Tourism Development Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Transient accommodations tax $ 20,000 50,983 30,983 62,829 Investment income — 331 331 3,019 Total revenues 20,000 51,314 31,314 65,848 Expenditures: Community and economic development: Contributions 75,000 75,000 — 87,000 Support goods and services — 143 (143) 227 Total expenditures 75,000 75,143 (143) 87,227 Excess (deficiency) of revenues over expenditures (55,000) (23,829) 31,171 (21,379) Other financing (uses): Transfers out - Kodiak Fisheries Research Center Enterprise Fund — — — (45,000) Change in fund balance $(55,000) (23,829) 31,171 (66,379) Fund balance, at beginning of year 100,476 166,855 Fund balance, at end of year $ 76,647 100,476 115 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Commercial Passenger Vessel Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Intergovernmental - State sources - Commercial passenger vessel tax $ — 54,220 54,220 54,220 Investment income — 351 351 1,643 Total revenues — 54,571 54,571 55,863 Expenditures: Community and economic development - Support goods and services — 77 (77) 109 Excess of revenues over expenditures $— 54,494 54,494 55,754 Fund balance, at beginning of year 99,041 43,287 Fund balance, at end of year $ 153,535 99,041 116 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, 2021 (With financial information for the year ended June 30, 2020) 2021 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Revenues: Property taxes and assessments $ 1,572 1,496 (76) 1,571 Investment income 557 224 (333) 1,732 Total revenues 2,129 1,720 (409) 3,303 Expenditures: Service district maintenance: Personnel services 200 358 (158) 276 Fringe benefits 145 241 (96) 199 Professional services 1,669 — 1,669 — Support goods and services 115 77 38 75 Total expenditures 2,129 676 1,453 550 Excess of revenues over expenditures $— 1,044 1,044 2,753 Fund balance, at beginning of year 62,597 59,844 Fund balance, at end of year $ 63,641 62,597 117 NONMAJOR CAPITAL PROJECT FUNDS 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 Kodiak High School Renovation Fund accounts for the construction and major maintenance activities for the Borough’s educational facilities funded by bonds, which will be paid for with property taxes and various grants. The Renewal and Replacement Projects Fund accounts for renewal and replacement projects which will be paid for with property taxes and other various financing sources. The School Renewal and Replacement Facilities Bond Projects Fund accounts for construction and maintenance for the Borough’s educational facilities funded by bonds, which will be paid for with property taxes and various grants. The Other Capital Projects Fund accounts for capital improvement projects related to various financing sources. KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds Combining Balance Sheet June 30, 2021 School Renewal Borough School Bond State Kodiak High Renewal and and Replacement Other Capital Capital Capital School Replacement Facilities Bond Capital Assets Projects Projects Grants Renovation Projects Projects Projects 2021 2020 Equity in central treasury $646,458 36,539 441,996 742,275 1,919,107 1,013,276 1,924,998 6,724,649 6,962,581 Receivables: State of Alaska — — 325 — — — — 325 33,124 Federal government — — — — — — 92,440 92,440 104,391 Property taxes — — — — 8,144 — — 8,144 23,789 Accounts and other receivables, net — — — — — — — — 429,396 Total $ 646,458 36,539 442,321 742,275 1,927,251 1,013,276 2,017,438 6,825,558 7,553,281 Liabilities and Fund Balances Liabilities: Accounts payable 13,987 — — — 15,472 3,839 2,999 36,297 129,048 Due to other funds — — — — — — — — 988,557 Unearned revenues — — — — — — 9,648 9,648 9,648 Total liabilities 13,987 — — — 15,472 3,839 12,647 45,945 1,127,253 Deferred inflows of resources: Unavailable revenues — — — — 7,013 — — 7,013 18,969 Total liabilities and deferred inflows of resources 13,987 — — — 22,485 3,839 12,647 52,958 1,146,222 Fund balances: Assigned 632,471 36,539 442,321 742,275 1,904,766 1,009,437 2,004,791 6,772,600 7,393,442 Unassigned — — — — — — — — (986,383) Total fund balances 632,471 36,539 442,321 742,275 1,904,766 1,009,437 2,004,791 6,772,600 6,407,059 Total $ 646,458 36,539 442,321 742,275 1,927,251 1,013,276 2,017,438 6,825,558 7,553,281 Totals (With summarized financial information at June 30, 2020) 118 KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficit) Year ended June 30, 2021 School Renewal Borough School Bond State Kodiak High Renewal and and Replacement Other Capital Capital Capital School Replacement Facilities Bond Capital Projects Projects Grants Renovation Projects Projects Projects 2021 2020 Revenues: Property taxes and assessments $— — — — 11,236 — — 11,236 1,345,912 Intergovernmental: State sources — — 2,964 — — — — 2,964 38,941 Federal sources — — 25,540 — — — 109,414 134,954 322,050 Investment income — 151 — — — — 20 171 9,007 Other 186,685 — — — — 107,964 6,458 301,107 490,830 Total revenues 186,685 151 28,504 — 11,236 107,964 115,892 450,432 2,206,740 Expenditures: General government — — — — — — — — 113,506 Capital outlay: Schools 24,864 — — — — 342,144 — 367,008 555,253 General 2,289 — 2,964 — 137,172 — 653,067 795,492 963,195 Community development — — 25,540 — — — — 25,540 — Total expenditures 27,153 — 28,504 — 137,172 342,144 653,067 1,188,040 1,631,954 Excess (deficiency) of revenues over expenditures 159,532 151 — — (125,936) (234,180) (537,175) (737,608) 574,786 Other financing sources (uses): Proceeds from issuance of debt — — — 410,422 — 2,230,000 — 2,640,422 — Transfers in 25,000 — — — 75,000 — 52,214 152,214 780,086 Transfers out — — — — (1,574,487) — (115,000) (1,689,487) — Net other financing sources (uses)25,000 — — 410,422 (1,499,487) 2,230,000 (62,786) 1,103,149 780,086 Change in fund balances 184,532 151 — 410,422 (1,625,423) 1,995,820 (599,961) 365,541 1,354,872 Fund balances (deficit), at beginning of year 447,939 36,388 442,321 331,853 3,530,189 (986,383) 2,604,752 6,407,059 5,052,187 Fund balances, at end of year $632,471 36,539 442,321 742,275 1,904,766 1,009,437 2,004,791 6,772,600 6,407,059 Totals (With summarized financial information for the year ended June 30, 2020) 119 ENTERPRISE FUNDS 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 and makes debt service payment on hospital related debt. The Long Term Care Center Fund accounts for rents on the Borough-owned long term care center and other related revenue. In turn, it makes debt service payments on the long term care center related debt. The Kodiak Fisheries Research Center Fund accounts for rents and expenses on the Borough-owned Kodiak Fisheries Research Center. This facility, which contains salt- water lab facilities, and its tenants are committed to the preservation of the North Pacific marine ecosystem and resources. The 911 Service Fund accounts for the collection and payment of a surcharge on phone lines which is passed through to the City of Kodiak for a 911 emergency system. The Research Court Apartments Fund accounts for rents on the Borough-owened apartments on Near Island located on Research Court. Research 911 Court Totals Service Apartments 2021 2020 Current assets: Equity in central treasury $77,528 47,426 124,954 89,686 Customer receivables 36,945 — 36,945 35,567 Total current assets 114,473 47,426 161,899 125,253 Capital assets: Non-depreciable — 1,021,998 1,021,998 1,021,998 Depreciable, net — (749,465) (749,465) (715,399) Total capital assets — 272,533 272,533 306,599 Total asset $114,473 319,959 434,432 431,852 Current liabilities: Accounts payable $114,473 8,910 123,383 115,403 Unearned revenues — 2,501 2,501 — Due to other funds — — — 767 Total current liabilities 114,473 11,411 125,884 116,170 Net position: Net investment in capital assets — 272,533 272,533 306,599 Unrestricted — 36,015 36,015 9,083 Total net position — 308,548 308,548 315,682 Total liabilities and net position $ 114,473 319,959 434,432 431,852 Assets Liabilities and Net Position KODIAK ISLAND BOROUGH Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2021 (With summarized financial information for June 30, 2020) 120 KODIAK ISLAND BOROUGH Year ended June 30, 2021 (With summarized financial information for the year ended June 30, 2020) Research 911 Court Totals Service Apartments 2021 2020 Operating revenues: Charges for services: Lease income $— 70,261 70,261 49,560 Other 301,032 — 301,032 295,447 Total operating revenues 301,032 70,261 371,293 345,007 Operating expenses: Personnel services 1,500 11,409 12,909 11,918 Maintenance and repairs — — — 249 Depreciation — 34,066 34,066 34,067 General and administration 328 27,722 28,050 25,596 Miscellaneous — 4,286 4,286 4,804 Telephone services 299,204 — 299,204 293,659 Total operating expenses 301,032 77,483 378,515 370,293 Operating income (loss) — (7,222) (7,222) (25,286) Nonoperating revenues: Interest revenue — 88 88 283 Income (loss) before transfers — (7,134) (7,134) (25,003) Transfers in — — — 340,666 Change in net position — (7,134) (7,134) 315,663 Net position, at beginning of year — 315,682 315,682 19 Net position, at end of year $— 308,548 308,548 315,682 Nonmajor Enterprise Funds Combining Statement of Revenues, Expenses, and Changes in Net Position 121 Research 911 Court Totals Service Apartments 2021 2020 Cash flows from operating activities: Cash received from customers $299,654 72,762 372,416 345,025 Payments to suppliers (294,197) (29,363) (323,560) (320,573) Payments to employees (1,500) (11,409) (12,909) (11,918) Net cash provided (used) by operating activities 3,957 31,990 35,947 12,534 Cash flows from noncapital financing activities: Net change in interfund receivable/payable — (767) (767) 767 Cash flows from investing activities: Interest and dividends received — 88 88 283 Net change in cash and cash equivalents 3,957 31,311 35,268 13,584 Cash and equivalents, at beginning of year 73,571 16,115 89,686 76,102 Cash and equivalents, at end of year $ 77,528 47,426 124,954 89,686 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss)$— (7,222) (7,222) (25,286) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation — 34,066 34,066 34,067 Changes in assets and liabilities that provided (used) cash: (Increase) decrease in assets: Customer receivables (1,378) — (1,378) 18 Increase (decrease) in liabilities: Accounts payable 5,335 2,645 7,980 3,735 Unearned revenues — 2,501 2,501 — Net cash provided (used) by operating activities $3,957 31,990 35,947 12,534 Non-cash capital and related financing activities: Transfer of capital assets between funds $— — — 340,666 KODIAK ISLAND BOROUGH Combining Statement of Cash Flows Nonmajor Enterprise Funds Year ended June 30, 2021 (With summarized financial information for the year ended June 30, 2020) 122 KODIAK ISLAND BOROUGH Municipal Solid Waste Collection and Disposal Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Operating revenues: Solid waste disposal $4,498,000 4,061,604 (436,396) 4,151,619 Other 4,000 63,993 59,993 1,797 Total operating revenues 4,502,000 4,125,597 (376,403) 4,153,416 Operating expenses: Personnel services 1,321,303 983,913 337,390 932,704 Contracted services 532,809 314,783 218,026 298,685 Maintenance, repairs and equipment 218,000 75,667 142,333 195,062 Depreciation 672,055 298,312 373,743 280,603 General and administration 1,209,000 537,372 671,628 343,440 Recycling services 260,000 297,335 (37,335) 283,176 Closure and postclosure costs 750,000 805,773 (55,773) 149,000 Contributions 180,000 210,084 (30,084) 37,904 Total operating expenses 5,143,167 3,523,239 1,619,928 2,520,574 Operating income (loss)(641,167) 602,358 1,243,525 1,632,842 Other income (expense): Intergovernmental: State of Alaska - PERS on-behalf payment 47,797 36,977 (10,820) (17,840) Federal sources — 188 188 628 Investment income 110,000 27,539 (82,461) 240,268 Bond issuance costs — (21,329) (21,329) — Interest expense (308,289) (196,512) 111,777 (275,095) Total other income (expense)(150,492) (153,137) (2,645) (52,039) Change in net position $ (791,659) 449,221 1,240,880 1,580,803 Net position, at beginning of year 18,660,321 17,079,518 Net position, at end of year $ 19,109,542 18,660,321 Enterprise Funds 2021 123 KODIAK ISLAND BOROUGH Hospital Facilities Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Operating revenues: Lease income $1,384,272 1,384,272 — 1,384,272 Operating expenses: Personnel services 40,319 14,567 25,752 97,013 Maintenance and repairs 325,838 — 325,838 — Depreciation 1,062,092 1,063,338 (1,246) 1,062,320 General and administration — — — 143,184 Total operating expenses 1,428,249 1,077,905 350,344 1,302,517 Operating income (loss)(43,977) 306,367 350,344 81,755 Other income: Investment income (loss)30,000 (3,772) (33,772) 50,053 Income before transfer (13,977) 302,595 316,572 131,808 Transfers out (2,800,000) (85,000) 2,715,000 — Change in net position $(2,813,977) 217,595 3,031,572 131,808 Net position, at beginning of year 16,384,259 16,252,451 Net position, at end of year $ 16,601,854 16,384,259 Enterprise Funds 2021 124 Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Operating revenues: Lease income $1,043,628 1,043,628 — 1,043,628 Operating expenses: Personnel services — 58,138 (58,138) 328 Contracted services — 105,175 (105,175) — Maintenance and repairs — 119,466 (119,466) — Depreciation 518,933 518,933 — 518,933 General and administration 172,224 28,593 143,631 23,140 Total operating expenses 691,157 830,305 (139,148) 542,401 Operating income 352,471 213,323 (139,148) 501,227 Other income (expense): Investment income 32,000 8,161 (23,839) 95,151 Bond issuance costs — (52,546) (52,546) — Interest expense (384,471) (364,375) 20,096 (403,617) Total other income (expense)(352,471) (408,760) (56,289) (308,466) Income (loss) before transfers — (195,437) (195,437) 192,761 Transfers in — 85,000 — — Change in net position $— (110,437) (195,437) 192,761 Net position, at beginning of year 6,784,526 6,591,765 Net position, at end of year $ 6,674,089 6,784,526 KODIAK ISLAND BOROUGH 2021 Year ended June 30, 2021 Budget and Actual Changes in Net Position Schedule of Revenues, Expenses, and Long Term Care Center Enterprise Funds (With financial information for the year ended June 30, 2020) 125 KODIAK ISLAND BOROUGH Kodiak Fisheries Research Center Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Operating revenues: Lease income $ 700,750 499,485 (201,265) 787,296 Other — 20,298 20,298 247,710 Total operating revenues 700,750 519,783 (180,967) 1,035,006 Operating expenses: Personnel services 294,775 192,706 102,069 237,769 Maintenance and repairs 25,000 241 24,759 3,685 Depreciation 697,000 665,026 31,974 662,409 General and administration: Support goods and services 76,700 26,303 50,397 13,178 Cleaning and janitorial 75,500 59,815 15,685 53,844 Heating 85,000 9,678 75,322 62,592 Electrical 160,000 160,041 (41) 128,431 Plumbing 258,000 26,977 231,023 46,049 Air conditioning 11,500 233 11,267 3,291 Elevators 2,700 16,949 (14,249) 900 Miscellaneous 444,500 79,218 365,282 122,794 Total operating expenses 2,130,675 1,237,187 893,488 1,334,942 Operating income (loss) (1,429,925) (717,404) (1,074,455) (299,936) Other income (expense): Intergovernmental: State of Alaska - PERS on-behalf payment 10,221 8,941 (1,280) (4,535) Federal sources — 5,852 5,852 1,257 Investment income — 6,889 6,889 58,130 Interest revenue 67,597 42,598 (24,999) 46,951 Total other income (expense)77,818 64,280 (13,538) 101,803 Income (loss) before transfers (1,352,107) (653,124) 698,983 (198,133) Transfers in — — — 45,000 Transfers out (484,086) — 484,086 (340,666) Change in net position $(1,836,193) (653,124) 1,183,069 (493,799) Net position, at beginning of year 10,708,828 11,202,627 Net position, at end of year $ 10,055,704 10,708,828 Enterprise Funds 2021 126 KODIAK ISLAND BOROUGH Enterprise Funds Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Operating revenues: Other $300,000 301,032 1,032 295,447 Operating expenses: Personnel services 1,500 1,500 — 1,500 General and administration 300 328 (28) 307 Telephone services 298,200 299,204 (1,004) 293,659 Total operating expenses 300,000 301,032 (1,032) 295,466 Operating income (loss)$— — — (19) Net position, at beginning of year — 19 Net position, at end of year $ — — 2021 911 Service Fund 127 KODIAK ISLAND BOROUGH Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Year ended June 30, 2021 (With financial information for the year ended June 30, 2020) Variance with Final Budget Final Positive 2020 Budget Actual (Negative)Actual Operating revenues: Lease income $ 30,000 70,261 40,261 49,560 Operating expenses: Personnel services 7,183 11,409 (4,226) 10,418 Maintenance and repairs — — — 249 Depreciation — 34,066 (34,066) 34,067 General and administration: Support goods and services — 1,378 (1,378) 394 Contracted services 5,000 8,072 (3,072) 4,037 Heating 11,500 5,467 6,033 5,034 Electrical 10,000 5,693 4,307 4,734 Plumbing 12,000 7,112 4,888 11,090 Miscellaneous 11,800 4,286 7,514 4,804 Total operating expenses 57,483 77,483 (20,000) 74,827 Operating income (loss) (27,483) (7,222) 20,261 (25,267) Other income (expense): Interest revenue — 88 88 283 Income (loss) before transfers (27,483) (7,134) 20,349 (24,984) Transfers in — — — 340,666 Change in net position $(27,483) (7,134) 20,349 315,682 Net position, at beginning of year 315,682 — Net position, at end of year $ 308,548 315,682 Enterprise Funds 2021 Research Court Apartments 128 SUPPLEMENTARY SCHEDULES Fiscal Year Principal Interest Total 2022 5,840,000$ 1,719,025$ 7,559,025$ 2023 6,035,000 1,531,316 7,566,316 2024 6,240,000 1,322,359 7,562,359 2025 6,420,000 1,138,811 7,558,811 2026 5,230,000 959,870 6,189,870 2027 4,450,000 828,058 5,278,058 2028 4,565,000 707,672 5,272,672 2029 4,060,000 589,902 4,649,902 2030 4,115,000 478,830 4,593,830 2031 4,230,000 362,743 4,592,743 2032 3,545,000 259,950 3,804,950 2033 3,635,000 168,674 3,803,674 2034 2,175,000 89,417 2,264,417 2035 580,000 43,323 623,323 2036 610,000 14,713 624,713 61,730,000$ 10,214,663$ 71,944,663$ SUMMARY OF BONDED DEBT SERVICE REQUIREMENTS TO MATURITY KODIAK ISLAND BOROUGH June 30, 2021 Annual principal and interest requirements on General Obligation Bonds. 129 The 2021 Series One General Obligation School Bonds were issued to refund (refinance) the 2011 Series One General Obligation School Bonds that were issued to provide funds for school and related capital improvements in the Borough, specifically to provide a portion of the funds needed for the Kodiak High School Addition and Renovation. Fiscal year Interest rate Interest due December 01 Principal due December 01 Interest due June 01 Total 2022 5.00%93,271$ 330,000$ 93,500$ 516,771$ 2023 5.00%93,500 340,000 85,000 518,500 2024 5.00%85,000 355,000 76,125 516,125 2025 5.00%76,125 375,000 66,750 517,875 2026 5.00%66,750 395,000 56,875 518,625 2027 5.00%56,875 410,000 46,625 513,500 2028 5.00%46,625 430,000 35,875 512,500 2029 5.00%35,875 450,000 24,625 510,500 2030 5.00%24,625 480,000 12,625 517,250 2031 5.00%12,625 505,000 - 517,625 591,271$ 4,070,000$ 498,000$ 5,159,271$ KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS RETIREMENT SCHEDULE June 30, 2021 2021 Series One 130 Unrefunded portion - 2012 Series A Fiscal Year Interest Rate Interest Due September 1 Principal Due September 1 Interest due March 1 Total 2022 4.00%10,890$ 545,000$ -$ 555,890$ Refunding bond - 2021 Series Two Fiscal Year Interest Rate Interest Due December 1 Principal Due December 1 Interest due June 1 Total 2022 0.24%9,448$ 125,000$ 10,155$ 144,603$ 2023 0.34%10,155 1,360,000 7,822 1,377,977 2024 0.44%7,822 1,365,000 4,799 1,377,621 2025 0.70%4,799 1,375,000 - 1,379,799 32,224$ 4,225,000$ 22,776$ 4,280,000$ The 2012 Series A General Obligation School Bonds were issued to refund (refinance) the 2004 Series A General Obligation bonds that were issued to provide funds for school and related capital improvements in the Borough, specifically to fund various school facility repairs. These bonds were again refunded in 2021, which combined the 2012 Series A and Series B bonds into a single bond issue. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS RETIREMENT SCHEDULE June 30, 2021 2012 Series A / 2021 Series 2 131 Unrefunded portion - 2012 Series B Fiscal Year Interest Rate Interest Due September 1 Principal Due September 1 Interest due March 1 Total 2022 4.00%13,310$ 665,000$ -$ 678,310$ KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS RETIREMENT SCHEDULE June 30, 2021 The 2012 Series B General Obligation School Bonds were issued to refund (refinance) the 2004 Series B General Obligation bonds that were issued to provide funds for school and related capital improvements in the Borough, specifically to fund construction of the new pool facility. These bonds were refunded in 2021, which combined the 2012 Series A and Series B bonds into a single bond issue. 2012 Series B 132 Unrefunded portion - 2013 Series One Fiscal Year Interest Rate Interest Due August 01 Principal Due February 01 Interest due February 01 Total 2022 4.00%39,600$ 970,000$ 39,600$ 1,049,200$ 2023 4.00%20,200 1,010,000 20,200 1,050,400 59,800$ 1,980,000$ 59,800$ 2,099,600$ Refunding bond - 2021 Series Three Fiscal Year Interest Rate Interest Due December 01 Principal Due December 01 Interest due June 01 Total 2022 0.24%98,206$ 275,000$ 106,800$ 480,006$ 2023 0.34%106,800 270,000 106,337 483,137 2024 0.44%106,337 1,325,000 103,402 1,534,739 2025 0.70%103,402 1,330,000 98,760 1,532,162 2026 1.03%98,760 1,340,000 91,846 1,530,606 2027 1.18%91,846 1,355,000 83,838 1,530,684 2028 1.53%83,838 1,375,000 73,312 1,532,150 2029 1.73%73,312 1,400,000 61,195 1,534,507 2030 1.97%61,195 1,420,000 47,194 1,528,389 2031 2.02%47,194 1,450,000 32,534 1,529,728 2032 2.12%32,534 1,480,000 16,832 1,529,366 2033 2.22%16,832 1,515,000 - 1,531,832 920,256$ 14,535,000$ 822,050$ 16,277,306$ KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS RETIREMENT SCHEDULE June 30, 2021 The 2013 Series One General Obligation School Bonds were issued to provide funds for school and related capital improvements in the Borough, specifically to provide a portion of the funds needed for the Kodiak High School Addition and Renovation. These bonds were refunded (refinanced) in 2021 and are reported as the 2021 Series Three Bonds. 2013 Series One / 2021 Series Three 133 Unrefunded portion - 2014 Series One Fiscal Year Interest Rate Interest Due September 01 Principal Due March 01 Interest Due March 01 Total 2022 5.00%93,219$ 965,000$ 93,219$ 1,151,438$ 2023 5.00%69,094 1,010,000 69,094 1,148,188 2024 5.00%43,844 1,060,000 43,844 1,147,688 2025 3.13%17,344 1,110,000 17,344 1,144,688 $ 223,501 $ 4,145,000 $ 223,501 $ 4,592,002 Refunding bond - 2021 Series Four Fiscal Year Interest Rate Interest Due December 01 Principal Due December 01 Interest Due June 01 Total 2022 0.24%114,503$ 255,000$ 124,602$ 494,105$ 2023 0.34%124,602 245,000 124,182 493,784 2024 0.44%124,182 250,000 123,628 497,810 2025 0.70%123,628 250,000 122,756 496,384 2026 1.03%122,756 1,410,000 115,480 1,648,236 2027 1.18%115,480 1,420,000 107,088 1,642,568 2028 1.53%107,088 1,440,000 96,065 1,643,153 2029 1.73%96,065 1,465,000 83,385 1,644,450 2030 1.97%83,385 1,490,000 68,694 1,642,079 2031 2.02%68,694 1,520,000 53,327 1,642,021 2032 2.12%53,327 1,560,000 36,775 1,650,102 2033 2.22%36,775 1,590,000 19,110 1,645,885 2034 2.35%19,110 1,625,000 - 1,644,110 1,189,595$ 14,520,000$ 1,075,092$ 16,784,687$ The 2014 Series One General Obligation School Bonds were issued to provide funds for school and related capital improvements in the Borough, specifically to provide a portion of the funds needed for the Kodiak High School Addition and Renovation. These bonds were refunded (refinanced) in 2021 and are reported as the 2021 Series Four Bonds. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS RETIREMENT SCHEDULE June 30, 2021 2014 Series One / 2021 Series Four 134 Fiscal Year Interest Rate Interest Due October 01 Principal Due October 01 Interest Due April 01 Total 2022 5.00%130,106$ 240,000$ 124,106$ 494,212$ 2023 5.00%124,106 250,000 117,856 491,962 2024 5.00%117,856 265,000 111,231 494,087 2025 5.00%111,231 275,000 104,356 490,587 2026 5.00%104,356 290,000 97,106 491,462 2027 5.00%97,106 305,000 89,481 491,587 2028 5.00%89,481 320,000 81,481 490,962 2029 5.00%81,481 335,000 73,106 489,587 2030 5.00%73,106 355,000 64,231 492,337 2031 4.00%64,231 370,000 56,831 491,062 2032 5.25%56,831 390,000 46,594 493,425 2033 5.25%46,594 410,000 35,831 492,425 2034 5.25%35,831 430,000 24,544 490,375 2035 5.25%24,544 455,000 12,600 492,144 2036 5.25%12,600 480,000 - 492,600 1,169,460$ 5,170,000$ 1,039,354$ 7,378,814$ KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS RETIREMENT SCHEDULE June 30, 2021 The 2015 Series Three General Obligation School Bonds were issued to provide funds for school and related capital improvements in the Borough, specifically to provide a portion of the funds needed for the Kodiak High School Addition and Renovation. 2015 Series Three 135 Fiscal Year Interest Rate Interest Due October 01 Principal Due October 01 Interest Due April 01 Total 2022 5.00%25,000$ 180,000$ 20,500$ 225,500$ 2023 5.00%20,500 190,000 15,750 226,250 2024 5.00%15,750 200,000 10,750 226,500 2025 5.00%10,750 210,000 5,500 226,250 2026 5.00%5,500 220,000 - 225,500 77,500$ 1,000,000$ 52,500$ 1,130,000$ The 2015 Series Three General Obligation School Bonds were issued to provide funds for school and related capital improvements in the Borough, specifically to provide for school facility renewal and replacement needs. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS RETIREMENT SCHEDULE June 30, 2021 2015 Series Three 136 Fiscal Year Interest Rate Interest Due August 01 Principal Due August 01 Interest Due February 01 Total 2022 5.00%28,334$ 80,000$ 26,334$ 134,668$ 2023 5.00%26,334 80,000 24,334 130,668 2024 5.00%24,334 85,000 22,209 131,543 2025 5.00%22,209 90,000 19,959 132,168 2026 5.00%19,959 95,000 17,584 132,543 2027 2.00%17,584 100,000 16,584 134,168 2028 4.00%16,584 100,000 14,584 131,168 2029 4.00%14,584 105,000 12,484 132,068 2030 2.63%12,484 110,000 11,041 133,525 2031 3.00%11,041 110,000 9,391 130,432 2032 3.00%9,391 115,000 7,666 132,057 2033 3.00%7,666 120,000 5,866 133,532 2034 3.00%5,866 120,000 4,066 129,932 2035 3.13%4,066 125,000 2,113 131,179 2036 3.25%2,113 130,000 - 132,113 222,549$ 1,565,000$ 194,215$ 1,981,764$ The 2016 Series One General Obligation School Bonds were issued to provide funds for school and related capital improvements in the Borough, specifically to provide for the Kodiak High School Addition and Renovation. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS 2016 Series One RETIREMENT SCHEDULE June 30, 2021 137 Fiscal Year Interest Rate Interest Due August 01 Principal Due August 01 Interest Due February 01 Total 2022 5.00%74,875$ 540,000$ 61,375$ 676,250$ 2023 5.00%61,375 570,000 47,125 678,500 2024 5.00%47,125 595,000 32,250 674,375 2025 5.00%32,250 630,000 16,500 678,750 2026 5.00%16,500 660,000 - 676,500 232,125$ 2,995,000$ 157,250$ 3,384,375$ The 2016 Series One General Obligation School Bonds were issued to provide funds for school and related capital improvements in the Borough, specifically to provide for school facility renewal and replacement needs. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS 2016 Series One RETIREMENT SCHEDULE June 30, 2021 138 Fiscal Year Interest Rate Interest Due December 01 Principal Due December 01 Interest Due June 01 Total 2022 4.00%89,375$ 450,000$ 80,375$ 619,750$ 2023 5.00%80,375 470,000 68,625 619,000 2024 5.00%68,625 495,000 56,250 619,875 2025 5.00%56,250 520,000 43,250 619,500 2026 5.00%43,250 550,000 29,500 622,750 2027 5.00%29,500 575,000 15,125 619,625 2028 5.00%15,125 605,000 - 620,125 382,500$ 3,665,000$ 293,125$ 4,340,625$ The 2016 Series Three General Obligation School Bonds were issued to refund (refinance) the 2008 Series A General Obligation Bonds were issued to provide funds for school and related capital improvements in the Borough, specifically the new school pool facility. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS 2016 Series Three RETIREMENT SCHEDULE June 30, 2021 139 Fiscal Year Interest Rate Interest Due December 01 Principal Due December 01 Interest Due June 01 Total 2022 4.00%6,641$ 50,000$ 5,931$ 62,572$ 2023 5.00%5,931 55,000 5,144 66,075 2024 5.00%5,144 55,000 4,352 64,496 2025 5.00%4,352 55,000 3,546 62,898 2026 5.00%3,546 55,000 2,727 61,273 2027 5.00%2,727 60,000 1,824 64,551 2028 5.00%1,824 60,000 915 62,739 2029 5.00%915 60,000 - 60,915 31,080$ 450,000$ 24,439$ 505,519$ The 2018 Series A General Obligation School Bonds were issued to provide funds for school and related capital improvements in the Borough, specifically to provide a portion of the funds needed for the Kodiak High School Addition and Renovation. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS 2018 Series A RETIREMENT SCHEDULE June 30, 2021 140 Fiscal Year Interest Rate Interest Due December 01 Principal Due December 01 Interest Due June 01 Total 2022 5.00%8,625$ 25,000$ 8,000$ 41,625$ 2023 5.00%8,000 30,000 7,250 45,250 2024 5.00%7,250 30,000 6,500 43,750 2025 5.00%6,500 30,000 5,750 42,250 2026 5.00%5,750 35,000 4,875 45,625 2027 5.00%4,875 35,000 4,000 43,875 2028 5.00%4,000 35,000 3,125 42,125 2029 5.00%3,125 40,000 2,125 45,250 2030 5.00%2,125 40,000 1,125 43,250 2031 5.00%1,125 45,000 - 46,125 51,375$ 345,000$ 42,750$ 439,125$ The 2020 Series One A General Obligation School Bonds were issued to provide funds for school and related capital improvements in the Borough, specifically to provide for the Kodiak High School Addition and Renovation. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS 2020 Series One A RETIREMENT SCHEDULE June 30, 2021 141 Fiscal Year Interest Rate Interest Due December 01 Principal Due December 01 Interest Due June 01 Total 2022 5.00%46,375$ 145,000$ 42,750$ 234,125$ 2023 5.00%42,750 155,000 38,875 236,625 2024 5.00%38,875 160,000 34,875 233,750 2025 5.00%34,875 170,000 30,625 235,500 2026 5.00%30,625 180,000 26,125 236,750 2027 5.00%26,125 190,000 21,375 237,500 2028 5.00%21,375 200,000 16,375 237,750 2029 5.00%16,375 205,000 11,250 232,625 2030 5.00%11,250 220,000 5,750 237,000 2031 5.00%5,750 230,000 - 235,750 274,375$ 1,855,000$ 228,000$ 2,357,375$ The 2020 Series One B General Obligation School Bonds were issued to provide funds for school and related capital improvements in the Borough, specifically to provide for the Kodiak High School Addition and Renovation. KODIAK ISLAND BOROUGH GENERAL OBLIGATION BONDS 2020 Series One B RETIREMENT SCHEDULE June 30, 2021 142 STATISTICAL SECTION STATISTICAL SECTION This part of the Kodiak Island Borough’s annual comprehensive 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 government’s overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time. 143-147 Revenue Capacity These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax. 148-151 Debt Capacity These schedules present information to help the reader assess the afford ability of the government’s current levels of outstanding debt and the gov ernment’s ability to issue additional debt in the future. 152-156 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. 157-163 Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year. 2012 2013 2014 2015 2016 Governmental activities: Net investment in capital assets $ 85,285,497 $72,773,598 $80,159,521 $82,616,865 $80,747,617 Restricted - - - - - Unrestricted 48,265,320 47,149,835 46,754,461 43,472,334 47,678,271 Total governmental activities net assets $133,550,817 $119,923,433 $126,913,982 $126,089,199 $128,425,888 Business-type activities: Net investment in capital assets $ 31,967,945 $21,628,143 $36,383,229 $43,884,340 $37,381,997 Unrestricted 4,532,561 20,750,321 12,115,258 5,239,974 12,436,280 Total business-type activities net assets $36,500,506 $42,378,464 $48,498,487 $49,124,314 $49,818,277 Primary government: Net investment in capital assets $ 117,253,442 $94,401,741 $116,542,750 $126,501,205 $118,129,614 Restricted - - - - - Unrestricted 52,797,881 67,900,156 58,869,719 48,712,308 60,114,551 Total primary government net assets $170,051,323 $162,301,897 $175,412,469 $175,213,513 $178,244,165 2017 2018 2019 2020 2021 Governmental activities: Net investment in capital assets $ 80,857,151 $ 85,569,631 $ 89,375,692 $89,442,508 $86,459,744 Restricted - - - - 153,535 Unrestricted 48,293,582 46,105,327 50,237,644 53,408,078 56,917,265 Total governmental activities net assets $129,150,733 $131,674,958 $139,613,336 $142,850,586 $143,530,544 Business-type activities: Net investment in capital assets $ 40,098,010 $ 39,508,817 $ 39,405,949 $39,561,198 $39,849,123 Unrestricted 9,584,434 10,154,986 11,720,431 13,292,418 12,900,614 Total business-type activities net assets $49,682,444 $49,663,803 $51,126,380 $52,853,616 $52,749,737 Primary government: Net investment in capital assets $ 120,955,161 $ 125,078,448 $ 128,781,641 $129,003,706 $126,308,867 Restricted - - - - 153,535 Unrestricted 57,878,016 56,260,313 61,958,075 66,700,496 69,664,370 Total primary government net assets $178,833,177 $181,338,761 $190,739,716 $195,704,202 $196,126,772 Source: Borough general ledger Fiscal Year Fiscal Year KODIAK ISLAND BOROUGH Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) 143 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Expenses Governmental activities: General government $ 4,281,383 $ 7,398,899 $ 6,990,640 $ 5,637,239 $ 7,850,988 $ 7,156,087 $ 6,692,530 $ 5,209,588 $ 5,494,888 $ 5,367,775 Public safety 622,396 644,197 751,637 663,145 798,079 1,028,240 1,256,992 936,083 696,486 690,853 Community and economic development 1,195,237 1,070,991 964,377 886,613 1,167,367 1,136,303 1,152,197 1,133,265 791,716 779,758 Emergency preparedness 21,423 278,480 12,487 31,628 30,849 35,861 43,038 14,307 4,479 5,257 Health and social welfare 391,996 290,800 326,700 406,093 389,000 233,999 207,500 182,900 157,500 5,257,005 Education, culture, and recreation 64,289 84,273 218,013 335,854 2,996,004 17,562 4,665 70,472 5,790,959 20,397 Parks and recreation 5,825 21,100 37,795 161,596 87,456 30,172 77,186 43,368 32,561 19,560 Service district maintenance 705,665 479,264 631,572 534,376 626,289 475,248 587,707 645,533 786,366 647,976 Primary and secondary education 11,998,842 13,930,919 14,523,509 14,316,695 11,225,022 14,162,868 12,695,233 13,219,790 10,522,515 15,137,964 Interest on long-term debt 1,188,945 1,254,225 2,109,406 3,063,649 3,194,612 3,060,520 2,673,238 2,500,440 2,346,340 1,704,793 Total governmental activities expenses 20,476,001 25,453,148 26,566,136 26,036,888 28,365,666 27,336,860 25,390,286 23,955,746 26,623,810 29,631,338 Business-type activities: Municipal solid waste collection and disposal 2,345,752 2,342,006 2,080,864 2,468,058 4,764,871 3,296,817 3,245,526 3,287,702 2,795,669 3,741,080 Hospital facilities 1,016,882 1,091,035 1,740,525 1,763,636 2,058,690 1,284,657 1,412,150 1,201,971 1,302,517 1,077,905 Long Term Care Center - - - - - 1,128,059 1,008,032 960,008 946,018 1,247,226 Kodiak Fisheries Research Center 1,746,952 1,775,062 1,681,111 1,486,620 1,555,116 1,532,010 1,422,337 1,571,643 1,369,009 1,237,187 911 services 2,615 87,596 39,817 33,961 30,417 28,409 255,617 300,060 336,226 301,032 Research Court Apartments - - - - - - - - - 77,483 Total business-type activities expenses 5,112,201 5,295,699 5,542,317 5,752,275 8,409,094 7,269,952 7,343,662 7,321,384 6,749,439 7,681,913 Total primary government expenses 25,588,202 30,748,847 32,108,453 31,789,163 36,774,760 34,606,812 32,733,948 31,277,130 33,373,249 37,313,251 Program Revenues Governmental activities: Charges for services: General government $ 673,050 $ 549,100 $ 577,350 $ 540,052 $ 682,664 $ 2,874,794 $ 873,043 $ 966,852 $ 1,006,601 $ 942,701 Public safety 11,646 13,849 14,336 13,601 16,610 14,716 15,366 16,701 8,734 18,657 Service district maintenance 1 94,076 110,313 114,516 66,161 111,146 90,450 27,600 27,600 27,600 Operating grants and contributions 2,479,263 2,917,662 4,077,510 4,305,691 4,813,838 4,226,913 5,614,105 5,611,754 2,578,838 479,124 Capital grants 574,439 2,212,524 6,651,737 3,002,933 3,216,270 885,493 96,698 346,427 438,070 137,918 Total governmental activities program revenues 3,738,399 5,787,211 11,431,246 7,976,793 8,795,543 8,113,062 6,689,662 6,969,334 4,059,843 1,606,000 Business-type activities: Charges for services: Municipal solid waste collection and disposal 2,301,757 2,504,035 2,265,967 2,611,854 2,859,436 3,105,560 3,813,343 4,465,387 4,151,619 4,061,604 Hospital facilities 720,000 720,000 1,150,000 1,759,789 1,959,827 660,000 1,384,272 1,384,272 1,384,272 1,384,272 Long Term Care Center - - - - - 1,119,929 1,093,475 1,043,628 1,043,628 1,043,628 Kodiak Fisheries Research Center 1,636,728 1,603,503 1,851,322 2,267,032 3,353,718 847,642 818,138 820,167 787,296 499,485 911 services - - - - - - - - 49,560 - Research Court Apartments - - - - - - - - - 70,261 Operating grants and contributions 75,819 85,634 - 32,649 428,578 27,799 44,509 27,630 (20,490) 51,958 Capital grants 97,534 5,984,095 5,538,038 213,753 11,326 - - - - - Total business-type activities program revenues 4,831,838 10,897,267 10,805,327 6,885,077 8,612,885 5,760,930 7,153,737 7,741,084 7,395,885 7,111,208 Total primary government program revenues $ 8,570,237 $ 16,684,478 $ 22,236,573 $ 14,861,870 $ 17,408,428 $ 13,873,992 $ 13,843,399 $ 14,710,418 $ 11,455,728 $ 8,717,208 Net(expense)/revenue: Governmental activities $ (16,737,602) $ (19,665,937) $ (15,134,890) $ (18,060,095) $ (19,570,123) $ (19,223,798) $ (18,700,624) $ (18,700,624) $ (22,563,967) $ (28,025,338) Business-type activities (280,363) 5,601,568 5,263,010 1,132,802 203,791 (1,509,022) (189,925) (189,925) 646,446 (570,705) Total primary government net expense $ (17,017,965) $ (14,064,369) $ (9,871,880) $ (16,927,293) $ (19,366,332) $ (20,732,820) $ (18,890,549) $ (18,890,549) $ (21,917,521) $ (28,596,043) General Revenues and Other Changes in Net Assets Governmental activities: Taxes: Property taxes $ 13,327,552 $ 12,910,512 $ 13,741,190 $ 13,741,190 $ 14,414,032 $ 15,714,593 $ 16,045,148 $ 16,660,329 $ 17,228,428 $ 17,449,358 Severance taxes 1,970,265 1,774,700 1,843,819 1,843,819 3,985,978 1,414,557 1,929,409 1,285,669 1,286,750 1,100,413 Tobacco excise taxes - - - - - - 310,482 425,444 389,725 702,142 Unrestricted grants and contributions 4,199,766 4,458,203 4,142,583 4,142,583 27,683 3,631,012 3,414,671 4,265,899 3,371,650 8,747,105 Land sales 4,540 - 864,584 864,584 1,586,555 325,793 27,955 19,002 12,140 10,118 Investment earnings 1,788,903 528,676 1,106,717 1,106,717 604,274 271,691 281,855 2,196,169 1,454,149 188,577 Other 327,540 383,877 506,546 506,546 403,958 23,306 305,983 117,278 470,560 354,048 Transfers (80,000) (80,000) (80,000) (80,000) (50,228) (1,134,372) (45,000) (45,000) (45,000) - Transfers - Component Unit - - - - - - - - 1,632,815 - Extraordinary item - - - - 675,246 - - - - - Total governmental activities $ 21,538,566 $ 19,975,968 $ 22,125,439 $ 22,125,439 $ 21,647,498 $ 20,246,580 $ 22,270,503 $ 24,924,790 $ 25,801,217 $ 28,551,761 Business-type activities: Investment earnings 282,027 117,702 178,851 178,851 236,180 177,851 69,871 622,256 443,602 38,817 Other 110,442 78,688 598,162 598,162 203,764 115,556 320,774 375,891 592,188 428,009 Transfers 80,000 80,000 80,000 80,000 50,228 1,134,372 45,000 45,000 45,000 - Extraordinary item - - - - - (54,590) - - - - Total business-type activities 472,469 276,390 857,013 857,013 490,172 1,373,189 435,645 1,043,147 1,080,790 466,826 Total primary government $ 22,011,035 $ 20,252,358 $ 22,982,452 $ 22,982,452 $ 22,137,670 $ 21,619,769 $ 22,706,148 $ 25,967,937 $ 26,882,007 $ 29,018,587 Change in Net Position Governmental activities $ 4,800,964 $ 310,031 $ 6,990,549 $ 4,065,344 $ 2,077,375 $ 1,022,782 $ 3,569,879 $ 7,938,378 $ 3,237,250 $ 526,423 Business-type activities 192,106 5,877,958 6,120,023 1,989,815 693,963 (135,833) 245,720 1,462,577 1,727,236 (103,879) Total primary government $4,993,070 $6,187,989 $13,110,572 $6,055,159 $2,771,338 $886,949 $3,815,599 $9,400,955 $4,964,486 $422,544 KODIAK ISLAND BOROUGH Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) 144 2012 2013 2014 2015 2016 General Fund: Nonspendable $166,020 $6,324 $1,459 $14,566 $26,272 Unassigned 3,126,037 3,340,662 3,502,489 3,181,342 3,259,509 Total General Fund $3,292,057 $3,346,986 $3,503,948 $3,195,908 $3,285,781 All other governmental funds Nonspendable $5,114,902 $4,636,976 $513,765 $287,564 $181,191 Restricted - - - - - Committed 37,288,510 37,902,356 42,355,129 42,606,097 43,081,680 Assigned 11,464,575 29,981,503 28,875,499 7,610,272 11,312,217 Unassigned (1,979,279) (51,337) (2,929,481) (2,516,222) (1,871,193) Total all other governmental funds $51,888,708 $72,469,498 $68,814,912 $47,987,711 $52,703,895 2017 2018 2019 2020 2021 General Fund: Nonspendable $32,349 $37,885 $37,885 $57,926 $33,149 Unassigned 2,284,775 3,151,059 3,151,069 6,036,623 7,454,071 Total General Fund $2,317,124 $3,188,944 $3,188,954 $6,094,549 $7,487,220 All other governmental funds Nonspendable $419,212 $4 $1,311 $- $- Restricted - - - - 153,535 Committed 4,502,105 43,846,363 45,862,404 46,186,064 46,360,958 Assigned 3,073,997 5,411,992 5,899,049 7,393,442 6,828,331 Unassigned (122,678) (126,614) (877,704) (926,989) - Total all other governmental funds $7,872,636 $49,131,745 $50,885,060 $52,652,517 $53,342,824 KODIAK ISLAND BOROUGH Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 145 Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Revenues: Property taxes and assessments $ 13,052,598 12,936,796 13,656,771 14,091,503 14,310,687 15,700,272 16,002,138 16,794,958 16,978,718 17,445,434 Transient accommodations tax 87,400 96,640 75,142 104,074 95,466 108,050 113,486 78,971 62,829 50,983 Intergovernmental: State sources 5,313,092 7,929,017 12,938,158 10,332,739 8,870,802 6,134,338 6,975,473 8,128,643 4,378,515 1,912,028 Federal sources 1,940,376 1,659,372 1,933,672 2,093,987 3,090,533 2,628,537 2,067,113 2,147,572 2,387,270 7,524,840 Severance taxes 1,970,265 1,774,700 1,843,819 1,703,257 1,491,089 1,306,507 1,815,923 1,206,698 1,223,921 1,049,430 Tobacco excise taxes — — — — — — 310,482 425,444 389,725 702,142 Licenses, permits, fees, and other local revenues 684,697 657,025 701,999 688,719 774,225 3,014,816 992,759 1,023,153 1,057,335 1,002,408 Other revenues 44,304 52,516 50,556 17,747 45,422 9,146 290,343 95,463 533,239 361,066 Investment earnings 1,857,413 536,903 1,115,466 583,677 648,987 271,691 281,855 2,196,169 1,454,149 188,577 Total revenues 24,950,145 25,642,969 32,315,583 29,615,703 29,327,211 29,173,357 28,849,572 32,097,071 28,465,701 30,236,908 Expenditures: General government 4,848,805 5,307,199 5,449,505 6,333,724 5,307,245 5,281,999 5,715,946 5,308,369 5,197,783 4,995,157 Public safety 447,479 469,280 576,720 524,169 572,839 699,118 2,001,538 714,826 635,865 546,055 Community and economic development 1,195,237 1,070,991 964,377 1,153,985 1,069,639 1,096,928 1,177,198 1,183,798 885,179 907,656 Emergency preparedness 18,923 18,342 9,987 29,128 30,849 35,861 43,038 14,307 4,479 5,257 Health and social welfare 391,996 290,800 326,700 406,093 389,000 233,999 207,500 182,900 157,500 5,257,005 Education, culture, and recreation 64,289 84,273 95,625 24,856 23,949 17,562 4,665 20,472 20,447 20,397 Parks and recreation 5,825 21,100 37,795 161,596 87,456 30,172 77,186 57,096 32,561 19,560 Service district maintenance 705,665 479,264 631,572 534,376 626,289 475,248 587,707 569,610 786,366 647,976 Primary and secondary education 10,337,349 10,442,350 10,845,220 11,100,714 11,100,650 10,373,548 9,449,500 9,970,576 10,522,544 9,443,364 Capital outlay: Schools 5,255,037 5,486,672 34,872,235 21,984,655 13,240,920 3,936,147 2,958,053 2,092,006 555,253 367,008 General 562,007 2,041,674 1,521,996 2,907,018 3,430,975 1,086,817 826,432 991,403 1,049,466 803,272 Community Development — — — — — — — — — 25,540 Debt service: Principal 2,780,776 2,966,441 3,645,950 2,646,040 3,201,002 3,530,000 3,870,000 4,425,000 4,655,000 4,850,000 Interest 2,695,657 1,254,225 2,109,406 3,121,577 3,194,612 3,568,559 3,408,310 3,253,414 3,078,394 2,986,372 Other charges - bond issuance costs 100,149 20,809 89,835 — 124,372 64,313 — 10,000 — 251,851 Total expenditures 29,409,194 29,953,420 61,176,923 50,927,931 42,399,797 30,430,271 30,327,073 28,793,777 27,580,837 31,126,470 Excess of revenues over (under) expenditures (4,459,049) (4,310,451) (28,861,340) (21,312,228) (13,072,586) (1,256,914) (1,477,501) 3,303,294 884,864 (889,562) Other Financing Sources (Uses): Proceeds from issuance of debt — 21,595,000 22,660,000 — 15,000,000 4,905,000 — 550,000 — 2,684,069 Bond premium — 3,424,819 2,427,432 — 2,141,115 806,205 — — — 857,176 Proceeds from issuance of refunding debt 13,578,039 — — — — — — — — 37,350,000 Payment to refunded bond escrow agent (12,180,000) — — — — (5,934,301) — — — (37,981,510) Bond refunding issuance cost — — — — — — — — — — Proceeds from sale of assets — 9,564 — — — 140,000 1,240 9,815 — — Land sale proceeds 10,735 6,787 356,284 329,344 110,428 145,820 224,902 76,676 28,903 62,805 Insurance proceeds — — — — 403,958 — — — — — Transfers in 957,652 6,212,885 992,365 642,691 1,404,497 1,758,036 1,189,104 1,786,712 1,628,191 5,700,165 Transfers out (1,037,652) (6,292,885) (1,072,365) (795,048) (1,454,725) (2,892,408) (1,234,104) (1,831,712) (1,673,191) (5,700,165) Transfers in - Component unit — — — — — — — — 1,632,815 — Total other financing sources(uses) 1,328,774 24,956,170 25,363,716 176,987 17,605,273 (1,071,648) 181,142 591,491 1,616,718 2,972,540 Net change in fund balances $(3,130,275) 20,645,719 (3,497,624) (21,135,241) 4,532,687 (2,328,562) (1,296,359) 3,894,785 2,501,582 2,082,978 Debt service as a percentage of noncapital expenditures 27.22 % 17.62 % 22.51 % 21.71 % 23.80 % 26.84 % 28.08 % 30.20 % 29.24 % 26.23 % KODIAK ISLAND BOROUGH Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 146 KODIAK ISLAND BOROUGH General Revenues by Source(a) Last Ten Fiscal Years Licenses, Inter- Fiscal Permits Governmental Investment Operating Miscellaneous Year Taxes and Fees Revenue Income Transfers Revenue Total 2012 2,291,625 65,421 4,425,447 281,792 — 16,177 7,080,462 2013 2,035,971 66,476 4,787,308 39,078 29,335 30,733 6,988,901 2014 2,051,794 82,713 4,605,916 23,804 — 14,328 6,778,555 2015 1,938,286 86,916 5,163,300 (18,330) — 19,468 7,189,640 2016 1,712,846 66,151 4,132,063 54,211 — 37,473 6,002,744 2017 1,727,620 83,546 3,738,157 11,059 — 3,715 5,564,097 2018 3,198,144 62,350 3,501,872 10,830 — 6,714 6,779,910 2019 3,551,740 130,441 4,403,041 211,630 — 15,210 8,312,062 2020 2,666,644 96,415 3,523,307 152,804 — 39,860 6,479,030 2021 6,045,254 75,790 8,931,861 24,496 — 8,743 15,086,144 (a) Includes General Fund only. Source: Borough general ledger. 147 KODIAK ISLAND BOROUGH Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Ratio of Total Taxable Total Assessed to Real Property Personal Property Total Direct Total Year Ended Net Taxable Full Value Net Taxable Full Value Net Taxable Full Value Tax Full Value June 30,Assessed Value Determination Assessed Value Determination Assessed Value Determination Rate Determination 2012 947,611,296 1,007,199,396 91,612,537 236,610,137 1,039,223,833 1,243,809,533 10.50 83.55 2013 984,146,580 1,049,746,680 108,821,700 137,074,800 1,092,968,280 1,186,821,480 10.75 92.09 2014 1,029,239,311 1,100,702,180 102,237,300 286,425,000 1,131,476,611 1,387,127,180 10.75 81.57 1,068,647,102 1,137,024,180 113,251,900 361,886,700 1,181,899,002 1,498,910,880 10.75 78.85 1,084,317,572 1,161,805,872 118,559,600 348,158,100 1,202,877,172 1,509,963,972 10.75 79.66 1,169,223,198 1,256,477,176 143,116,200 154,899,290 1,312,339,398 1,411,376,466 10.75 92.98 2018 1,205,698,799 1,290,502,977 137,125,100 149,553,000 1,342,823,899 1,440,055,977 10.75 93.25 2019 1,220,528,925 1,344,742,803 139,440,700 152,390,588 1,359,969,625 1,497,133,391 10.75 90.84 2020 1,266,365,775 1,363,039,653 155,178,500 168,465,300 1,421,544,275 1,531,504,953 10.75 92.82 2021 1,298,329,669 1,390,457,647 157,498,073 168,586,400 1,455,827,742 1,559,044,047 10.75 93.38 Sources: Borough assessment and tax records Notes: Property in Kodiak Island Borough is reassessed once every three years. Property is assessed at actual value; therefore, the assessed values are equal to actual value, Tax rates are per $1,000 of assessed value. Fiscal 2015 2016 2017 $0 $200,000,000 $400,000,000 $600,000,000 $800,000,000 $1,000,000,000 $1,200,000,000 $1,400,000,000 $1,600,000,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Last Ten Years Assessed Values 148 KODIAK ISLAND BOROUGH Direct and Overlapping Property Tax Rates and Contributions to the School District Last Ten Fiscal Years Overlapping Rates Woodland²Trinity²Mission² Fiscal Acres Islands Lake Fire Areas² Year Borough Education Renewal City¹Street Street Tide Road Services Areas²Fire Ended Basic Support Debt and of Lighting Lighting Gate Monashka Service Bay View Womens Protection Womens June 30, Rate Fund Service Replacement Kodiak Area Area Area Bay District 1 Road Bay Area No. 1 Bay Airport 2012 0.03 9.09 1.55 0.08 2.00 0.25 0.50 1.00 2.50 1.50 1.00 2.50 1.50 1.25 1.25 2013 0.03 9.03 1.61 0.08 2.00 0.25 0.50 1.00 2.50 0.50 1.75 2.50 1.50 1.25 1.25 2014 0.03 8.75 1.81 0.16 2.00 0.25 0.50 1.00 2.50 1.50 1.50 2.50 1.50 1.25 1.25 2015 0.06 9.16 0.99 0.54 2.00 0.25 0.50 1.00 2.50 1.50 1.50 2.50 1.50 1.25 1.25 2016 0.10 8.45 1.70 0.50 2.00 0.10 0.20 1.00 2.50 1.50 1.50 2.50 1.50 1.25 1.25 2017 0.15 7.62 1.91 1.07 2.00 0.10 0.20 1.00 2.50 1.50 1.50 2.50 1.50 1.25 1.25 2018 0.62 6.80 2.03 1.30 2.00 0.10 0.20 1.00 2.50 1.50 1.50 2.50 1.50 1.25 1.25 2019 1.10 7.05 1.87 0.73 2.00 0.10 0.15 0.25 2.00 1.50 1.50 2.50 1.50 1.25 1.25 2020 0.56 7.45 1.79 0.95 2.00 0.10 0.15 0.25 2.00 1.50 1.50 2.50 1.50 1.25 1.25 2021 2.75 6.45 1.55 — 2.00 0.10 0.15 0.25 1.99 1.50 1.47 2.50 1.50 1.25 1.22 Note: With the exception of a mill rate to cover Debt Service, the maximum mill rate allowed by State code is 30 mills ¹Overlapping rates are those of local governments that apply to property owners within the City of Kodiak. ²Overlapping rates are those which apply to property owners located within special taxing districts in the borough. They do not apply to every property owner in the Borough. Direct Rate (per $1,000 of Assessed Value) 149 KODIAK ISLAND BOROUGH Property Tax Levies and Collections Last Ten Fiscal Years Collections in Subsequent Years Amount 2012 $ 13,255,665 13,038,077 98.4 $ 215,619 $ 13,253,696 100.0 2013 13,581,524 13,489,190 99.3 90,034 13,579,224 100.0 2014 14,424,260 14,250,305 98.8 169,082 14,419,387 100.0 2015 15,009,704 14,749,222 98.3 253,517 15,002,739 100.0 2016 15,261,029 15,032,113 98.5 212,689 15,244,802 99.9 2017 16,642,674 16,554,392 99.5 67,850 16,622,242 99.9 2018 17,069,728 16,809,461 98.5 234,448 17,043,909 99.8 2019 17,699,787 17,462,634 98.7 185,682 17,648,316 99.7 2020 18,055,528 17,809,122 98.6 64,006 17,873,128 99.0 2021 $ 18,431,128 18,243,706 99.0 $ — $ — — Source: Borough general ledger. June 30, Ended Fiscal Year Collected within the Fiscal Year of the Levy Total Collections to DateTaxes Levied for the Fiscal Year Percentage of LevyAmount of Levy Percentage 150 KODIAK ISLAND BOROUGH Principal Property Tax Payers Current Year and Ten Years Ago Percentage Percentage Taxable of Total Borough Taxable of Total Borough Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Trident Seafoods Corp $ 79,517,000 1 5.5% $ 8,789,400 7 0.8% Matson Navigation (a) 41,209,400 2 2.8% 6,708,351 10 0.6% Ocean Beauty Seafoods 21,422,200 3 1.5% 15,649,700 1 1.5% North Pacific Seafoods 20,181,000 4 1.4% 9,389,200 6 0.9% Int'l Seafoods of Alaska 15,452,400 5 1.1% 12,172,100 3 1.2% Oceanfront Kodiak LLC 14,654,200 6 1.0% — — Mill Bay Plaza Assoc Ltd 12,766,600 7 0.9% — — GCI Communication Corp. 11,654,500 8 0.8% 8,279,000 9 0.8% Wal-Mart/Sam's Club 10,749,500 9 0.7% 9,540,700 5 0.9% Island Holdings 9,715,400 10 0.7% — — Brechan Enterprises, Inc — — — 8,468,200 8 0.8% Westward Seafoods — — — 13,005,300 2 1.3% Alaska Communications Systems — — — 10,238,700 4 1.0% Total $237,322,200 16.3% $102,240,651 9.8% Source: Borough tax records. (a) Matson Navigation purchased Horizon Lines in 2012. 2021 2012 151 Net Total Taxable Net Debt Per Fiscal Assessed Bonded Per Assessed Year Population Value Debt Capita Value 2012 14,041 (a) 1,039,223,833 33,510,913 2,387 3.22% 2013 13,824 (a) 1,085,968,280 55,236,114 3,996 5.09% 2014 13,797 (a) 1,131,476,611 76,227,556 5,525 6.74% 13,819 (a) 1,181,899,002 73,131,566 5,292 6.19% 13,790 (a) 1,202,877,172 86,481,657 6,271 7.19% 13,563 (b) 1,312,339,398 82,302,899 6,068 6.27% 13,287 (b) 1,342,823,899 77,748,492 5,851 5.79% 13,136 (b) 1,389,969,625 73,189,089 5,572 5.27% 2020 13,001 (b) 1,421,544,275 67,849,686 5,219 4.77% 2021 12,611 (b) 1,455,827,742 65,140,020 5,165 4.47% Sources: Information obtained from assessment records and Borough general ledger except as otherwise noted. (a) Information obtained from State of Alaska, Division of Community and Regional Affairs, Community Database, Certified Population for Revenue Sharing Program. (b) 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. 2018 2019 KODIAK ISLAND BOROUGH Ratios of Net Bonded Debt Last Ten Fiscal Years 2016 2017 2015 152 KODIAK ISLAND BOROUGH Computation of Direct Debt Percentage Kodiak Island Net Debt Applicable to this Borough Outstanding Governmental Share of (a) Unit (b) Debt (c) Kodiak Island Borough: General obligation bonds $ 65,140,020 100% $ 65,140,020 City of Kodiak: General obligation bonds 6,016,518 100% 6,016,518 Total $71,156,538 $71,156,538 (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. June 30, 2021 153 2012 2013 2014 2015 2016 Taxable Assessed value $ 1,039,223,833 1,085,968,080 1,131,476,611 1,181,899,002 1,202,877,172 Plus exempt property 59,588,100 65,600,100 71,462,869 68,377,078 77,488,300 Total $1,098,811,933 1,151,568,180 1,202,939,480 1,250,276,080 1,280,365,472 2017 2018 2019 2020 2021 Taxable Assessed value $ 1,312,339,398 1,342,823,899 1,389,969,625 1,424,752,775 1,455,827,742 Plus exempt property 87,253,178 84,804,178 94,213,878 93,464,878 92,127,978 Total $1,399,592,576 1,427,628,077 1,484,183,503 1,518,217,653 1,547,955,720 The State of Alaska does not mandate a debt limit to its municipalities and political subdivisions. Debt capacity is ultimately determined by the voters and the marketplace. Source: Borough assessment records (certified tax rolls). KODIAK ISLAND BOROUGH Legal Debt Margin Information Last Ten Fiscal Years 154 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 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 2,646,040 3,120,449 5,766,489 7,497,680 76.9 3,201,002 3,194,612 6,395,614 6,576,153 97.3 3,530,000 3,632,872 7,162,872 6,532,754 109.6 2018 3,870,000 3,408,310 7,278,310 6,402,256 113.7 2019 4,425,000 3,263,414 7,688,414 6,287,584 122.3 2020 4,655,000 3,078,394 7,733,394 5,744,905 134.6 2021 4,850,000 2,986,372 7,836,372 13,693,473 57.2 (a) Serial maturities in the case of serial bonds; annual Debt Service Fund requirements in the case of term bonds. Sources: Borough general ledger and debt documents. 2015 2017 2016 155 KODIAK ISLAND BOROUGH Ratios of Outstanding Debt by Type General Total Percent of Obligation Notes Revenue Notes Primary Personal Per Bonds Payable Bonds Payable Government Income Capita $ 33,510,913 $ 49,433 $ — $ 7,603,249 $ 41,163,595 6.13% 2,932 55,236,114 42,992 18,817,320 7,346,324 81,442,750 12.10% 5,891 76,227,556 37,042 18,703,498 10,206,895 105,174,991 13.98% 7,623 73,131,566 31,002 17,984,677 9,908,184 101,055,429 12.51% 7,313 86,481,657 — 15,531,184 20,160,175 122,173,016 15.12% 8,860 82,302,899 — 16,437,616 14,576,980 113,317,495 13.84% 8,355 77,748,492 — 15,649,919 13,806,965 107,205,376 12.56% 8,068 73,189,089 — 13,016,950 14,780,846 100,986,885 11.70% 7,688 67,849,686 — 12,196,935 13,911,774 93,958,395 * 7,227 65,140,020 — 11,473,825 13,042,701 89,656,546 * 7,109 Note: Detail regarding the Borough's outstanding debt can be found in the notes to the financial statements. * Information not available at report time. 2021 2020 Last Ten Fiscal Years Fiscal Year 2019 2018 Governmental Activities Business-type Activities 2016 2017 2014 2013 2012 2015 156 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) 2012 14,041 671,556,096 47,828 2,517 6.7 2013 13,824 673,348,788 48,709 2,513 6.2 13,797 752,337,000 54,529 2,468 5.7 13,819 807,817,000 58,457 2,446 4.9 13,790 808,036,000 58,843 2,437 5.0 2017 13,563 818,860,000 60,891 2,386 4.6 2018 13,287 853,258,000 63,938 2,437 4.8 2019 13,136 862,827,000 66,382 2,395 4.2 2020 13,001 * * 2,315 4.4 2021 12,611 * * 2,297 3.9 Sources: (a) State of Alaska, DCRA certified population. (b)Alaska Dept. of Education, Average Daily Membership by Fiscal Year at www.eed.state.ak.us/stats (c)Bureau of Economic Analysis https://www.bea.gov * Information not available at report time. 2016 2014 2015 — 5,000 10,000 15,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Borough Population and Student Count Population (a)School Enrollment (b) 157 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Land area - square miles 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 Miles of improved street 25.6 26.1 26.1 26.1 26.1 26.1 26.1 26.1 26.1 26.1 Building permits: Permits issued 167 219 155 193 216 143 93 94 91 85 Value of buildings (thousands) 10,171 91,619 36,652 36,216 10,866 11,793 7,331 19,324 14,148 7,736 Fire Protection: Number of fire stations 2 2 2 2 2 2 2 2 2 2 Number of employees 1 1 1 1 1 1 1 1 1 1 Police Protection: none (provided by the City of Kodiak within the city limits and by the State of Alaska outside the city boundaries.) Recreation: Parks (number of acres) 224 224 224 224 224 224 224 224 224 224 Facilities: Number of playgrounds 16 16 16 16 16 16 16 16 16 16 Number of swimming pools 1 1 1 1 1 1 1 1 1 1 Public Education: Number of schools: Kodiak Area Elementary 4 4 4 4 4 4 4 4 4 4 Kodiak Area Middle School 1 1 1 1 1 1 1 1 1 1 Kodiak Area High School 1 1 1 1 1 1 1 1 1 1 Village Schools (a) 8 8 7 7 7 7 7 7 7 7 Number of support personnel (b) 215 193 181 187 200 206 206 189 192 196 Number of teachers (c) 201 207 162 166 170 177 210 193 185 190 Number of students (d) 2,543 2,513 2,468 2,446 2,437 2,386 2,437 2,395 2,315 2,297 Number of Municipal Employees 45 45 48 45 43 44.5 45 41 38 37 Sources: Borough Departments, Kodiak Island Borough School District and City of Kodiak (a) The majority of Village Schools are grades K-12.(c) School district personnel figures include staffing from the General Fund and Grants. (b) All non-teaching employees.(d) Alaska Dept. of Education & Early Development, Average District Enrollment www.eed.state.ak.us/stats KODIAK ISLAND BOROUGH MISCELLANEOUS STATISTICAL DATA Last Ten Fiscal Years 158 Fiscal Year 2012 Fiscal Year 2013 Fiscal Year 2014 Fiscal Year 2015 Average Average Average Average Average Average Average Average Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Employment Earnings Employment Earnings Employment Earnings Employment Earnings Total Industries 6,461 $ 3,488 6,411 $ 3,459 6,472 $ 3,575 6,524 $ 3,650 Private Ownership 4,898 3,412 4,928 3,358 5,049 3,491 5,148 3,565 Total Government 1,501 3,742 1,483 3,795 1,423 3,875 1,377 3,966 Private Goods-Producing 2,193 3,801 2,138 3,704 2,219 3,831 2,268 3,832 Private Service-Providing 2,760 3,101 2,790 3,092 2,830 3,224 2,879 3,356 Fiscal Year 2016 Fiscal Year 2017 Fiscal Year 2018 Fiscal Year 2019 Average Average Average Average Average Average Average Average Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Employment Earnings Employment Earnings Employment Earnings Employment Earnings Total Industries 6,154 $ 3,292 6,294 $ 3,540 6,037 $ 3,585 5,967 $ 3,816 Private Ownership 4,721 3,118 4,867 3,407 4,578 3,433 4,511 3,714 Total Government 1,433 3,867 1,427 3,995 1,460 4,060 1,455 4,134 Private Goods-Producing 2,012 2,766 1,934 3,318 1,636 3,067 1,637 3,651 Private Service-Providing 2,710 3,378 2,933 3,466 2,942 3,637 2,875 3,748 Fiscal Year 2020 Fiscal Year 2021 Average Average Average Average Monthly Monthly Monthly Monthly Employment Earnings Employment Earnings Total Industries 5,706 $ 3,887 5,369 $ 3,951 Private Ownership 4,118 3,758 3,834 3,837 Total Government 1,588 4,222 1,535 4,236 Private Goods-Producing 1,524 3,665 1,384 3,633 Private Service-Providing 2,594 3,812 2,449 3,954 KODIAK ISLAND BOROUGH Average Monthly Employment & Earnings Last Ten Fiscal Years 159 KODIAK ISLAND BOROUGH Property Value, Construction, and Bank Deposits Last Ten Fiscal Years Construction Property Value* Commercial Residential Fiscal No. of No. of year permits Value permits Value Commercial Residential 2012 48 5,693,295 119 4,477,641 227,392,000 345,529,161 738,505,519 2013 59 85,969,566 160 5,649,717 230,391,000 364,353,810 767,122,801 44 33,062,171 111 3,589,833 252,999,000 386,480,100 788,418,800 61 31,146,134 141 5,644,907 239,000,000 402,319,200 800,640,400 56 4,882,606 160 5,983,768 245,354,000 452,535,972 750,341,200 2017 13 4,599,616 130 7,193,534 243,973,000 384,902,202 820,796,597 2018 23 3,515,430 70 3,815,114 233,000,000 390,922,837 859,606,088 2019 20 7,270,037 73 12,082,486 229,000,000 401,383,960 864,185,415 2020 18 3,854,671 73 10,294,257 260,885,000 410,473,530 887,856,139 2021 23 3,600,009 61 4,136,397 389,000,000 456,707,528 884,887,604 Sources: Borough assessing records and City of Kodiak building department and FDIC. Deposits in local banks 2016 2014 2015 — 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 400,000,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Deposits in Kodiak Banks 160 2012 2013 2014 2015 2016 Function: General Government 30 30 33 30 29 Community and Economic Development 6 6 5 4 5 Municipal Solid Waste Collection and Disposal 7 7 8 9 7 Kodiak Fisheries Research Center 2 2 2 2 2 Total 45 45 48 45 43 2017 2018 2019 2020 2021 Function: General Government 28.5 29 28 25 25 Community and Economic Development 6 6 3 2 2 Municipal Solid Waste Collection and Disposal 8 8 8 9 8 Kodiak Fisheries Research Center 2 2 2 2 2 Total 44.5 45 41 38 37 Source: Borough Finance Department Full-time Equivalent Employees as of June 30: KODIAK ISLAND BOROUGH Full-Time Equivalent Borough Employees by Function/Program Last Ten Fiscal Years 161 KODIAK ISLAND BOROUGH Operating Indicators by Function Last Ten Fiscal Years 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Function General Government Elections Number of registered voters 9,479 9,585 9,209 9,100 9,585 9,453 9,357 10,039 10,104 10,258 Number voting in last election 2,139 1,250 1,566 1,968 1,800 2,303 1,692 1,266 1,550 2,084 Percent of registered voters 23% 13% 17% 22% 19% 24% 18% 13% 15% 20% Public Safety Number of fire stations 2 2 2 2 2 2 2 2 2 2 Number of employees 1 1 1 1 1 1 1 1 1 1 Community and economic development Zoning compliance permits issued 113 160 111 183 161 177 128 142 128 110 Junk cars removed 27 22 28 37 21 10 35 79 82 72 Primary and secondary education Number of students 2,517 2,513 2,468 2,446 2,437 2,386 2,437 2,395 2,315 2,297 Number of General Fund certified staff 211 207 186 177 183 196 206 193 185 190 Number of General Fund classified staff 166 193 161 166 173 187 210 189 192 196 Solid waste disposal Total solid waste disposal in tons 16,558 14,688 11,826 12,364 12,876 11,646 11,458 12,882 10,989 10,896 Baled waste in tons 10,153 11,535 10,005 8,900 10,454 9,875 10,396 9,584 9,191 9,821 Scrap metal in tons 147 251 172 205 221 190 128 142 173 108 Asbestos, cubic yards 116 399 390 362 219 179 142 348 509 161 Source: Borough Finance Department 162 Function program 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 GOVERNMENTAL ACTIVITIES Number of buildings (teacher housing, schools and office buildings)19 19 19 19 21 20 20 19 19 19 Vehicles 15 15 14 14 11 14 13 13 13 12 Inactive School building n/a n/a n/a n/a n/a n/a n/a 1 1 1 Streets (miles) 26.1 26.1 26.1 26.1 26.1 26.1 26.1 26.1 26.1 26.1 Land area - square miles 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 7,130 (provided by the City of Kodiak within the city limits and by the State of Alaska outside the city boundaries) 2 2 2 2 2 2 2 2 2 2 13 13 12 12 10 11 13 12 12 12 1 1 1 1 1 1 0 0 0 0 BUSINESS-TYPE ACTIVITES Number of Baler Facilities (Landfills) 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - - - - 1 1 1 1 1 1 224 224 224 224 224 224 224 224 224 224 1 1 1 1 1 1 1 1 1 1 16 16 16 16 16 16 16 16 16 16 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Sources : Supplied by Kodiak Island Borough Department Heads Notes : No capital asset indicators are available for the library function A description of the Kodiak Island Borough's Capitalization and Depreciation policy is included in the Notes To The Basic Financial Statements Kodiak Island Research Facilities (marine research) Dorm facility (6 apartments) KODIAK ISLAND BOROUGH Capital Asset Statistics by Function/Program Last Ten Fiscal Years Parks (number of acres) Facilities: Hospital Culture, Parks and Recreation Roads Police: none Fire and Emergency Services Number of fire stations Number of Swimming Pools Number of playgrounds Number of Emergency response vehicles Emergency Tsunami Shelters Municipal Solid Waste Community Health & Public Services Mental Health Facilities Long Term Care Center 163