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Kodiak Island Borough
Popular Annual Financial Report
For Fiscal Year Ending June 30, 2020
Kodiak, Alaska
Government, Geographic Location & Population
The Kodiak Island Borough was incorporated in 1963 as a sec-
ond class Borough and currently operates under a manager -
form of government. The Manager is hired by the Assembly
and oversees the day-to-day business of the Borough. The
seven member Assembly, along with the Mayor, are elected
by the people. The day-to-day business of the Borough is
conducted within six departments: Manager, Clerk, Finance/
IT, Assessing, Community Development and Engineering/
Facilities.
Kodiak Island lies at the western border of the Gulf of Alaska
and is approximately 250 air miles south of Anchorage, Alas-
ka. The island is accessible only by boat or plane and is the
second largest island in the United States. In total, the Bor-
ough encompasses 7,130 square miles and currently serves
an estimated population of 13,001.
Services
The Borough has a full range of services, including: general
government, fire protection, first -response emergency medi-
cal services, health care facilities, road and other infrastruc-
ture construction and maintenance, community and econom-
ic development and solid waste disposal. Additionally, the
Borough supports tourism development, local parks, and
cultural and recreational activities. The Borough is financially
responsible for a legally separate school district which is
reported separately within the Borough's financial state-
ments. Additional information on this legally separate entity
can be found in the Comprehensive Annual Financial Report
(CAFR).
Economics
Seafood processing is by far the largest industry, generating
revenue in several categories. The Port of Kodiak has been
consistently ranked among the top ten$orts in the United
States in terms of amount and value of product delivered. In
2018, according to the National Ocean Economics Program,
the Port of Kodiak ranked fourth largest in landed weight
(390,500,000) and eighth largest in landed value
($104,400,000).
Tourism was strong through FY2019 with stable transient ac-
commodations tax revenues and cruise ship traffic. In FY2020,
tourism and cruise ship traffic sharply declined due to the
COVID-19 pandemic.
Kodiak Island is home to the largest U.S. Coast Guard Base in
the United States, employing over 1,350 people and providing
vital services to the marine industries which are integral to
the community.
The Pacific Spaceport Complex -Alaska, a launch facility, is
capable of handling small to medium sized rockets for launch-
ing low earth orbiting satellites, as well as other military, sci-
entific and research missions.
Map of the Kodiak Island Borough
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KODIAK ISLAND
BOROUGH
About The Popular Annual Financial Report
The Popular Annual Financial Report (PAFR) is intended to brief the
residents of the Kodiak Island Borough on the financial standing of
their municipal government. The information in this report was
drawn from the FY2020 Comprehensive Annual Financial Report
(CAFR). The CAFR conforms to the generally accepted accounting
principles (GAAP) and includes audited financial statements, as wel
as more detailed information than presented here. Although the
financial numbers in this Popular Annual Report come from an au-
dited source, they are presented in this report in a condensed and
unaudited format. You can also find additional financial informatioi
on our OpenGov Financial Transparency portal at:
https:Hkodiakak.opengov.com/.
For copies of the CAFR and PAFR, visit the Borough's office located
at 710 Mill Bay Road, Kodiak, Alaska, the Borough's Facebook pag(
or on our website at www.kodiakak.us.
We hope you find the report to be informative. We welcome your
comments, questions and suggestions.
Michael Powers Dora Cross
Borough Manager Finance Director
(odiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 2
BOROUGH POPULATION AND STATISTICAL INFORMATION
FY2018 FY2019 FY2020
Borough Population
13,287
13,136
13,001
Annual Unemployment Rate in the Borough
4.8%
4.2%
4.4%
Percentage of owner -occupied housing in the Borough
60.7%
59.0%
55.0%
Median Gross Rent within the Borough
$1,254
$1,294
$1,369
Median household income within the Borough
$73,068
$74,167
$78,281
Percent of persons living in poverty within the Borough
7.3%
9.3%
8.2%
KIBSD Student Enrollment
2,437
2,395
2,315
KIBSD Employees (Teachers and support personnel)
416
382
377
Number of Schools in the Borough
13
13
13
Number of Borough Employees
45
41
38
FINANCIAL STRUCTURE
The Borough maintains 33 separate funds to account for governmental services. They are generally established based upon their legal
basis and objectives. These funds are grouped into two separate categories: Governmental Funds and Proprietary Funds. This report
focuses on the funds which interests most residents : General, Education Support and Municipal Solid Waste Collection & Disposal.
GOVERNMENTAL FUNDS
(Reports the basic service activities provided by the Borough)
Governmental Fund Name Activity or Purpose of Fund
Operating fund for the Borough. Departments within the fund are: the Assembly, Assessing, Clerks, Com-
munity Development, Engineering & Facilities, Finance/IT (Information Technology) and the Manager.
AFOperating
erating funds for specific revenue sources. These include: education, facilities, tourism, emergency
nning and neighborhood service districts such as road, fire and street lighting, as well as maintenance
Borough building and grounds.
fund for the payment of general long-term debt principal, interest and other related costs.
rrently the fund services General Obligation Bonds for school related projects.
Capital Project Funds ;,= Operating fund for the acquisition or construction of major capital facilities and equipment.
GOVERNMENTAL FUNDS - FUND BALANCE 6/30/20
■ General Fund ■ Special Revenue Funds ■ Debt Service Fund ■ Capital Funds
f $6,094,549 $45,679,544 $565,914., 56,407,059
Kodiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 2
GOVERNMENTAL FUNDS
(Reports the basic service activities provided by the Borough)
Governmental Fund Highlights:
• General Fund — Fund balance increased by $734,125 (13.7%). There were two main contributors to the overall increase in the
fund. 1) The fund received $256,675 more in property tax revenue due to increased tax assessments, and 2) the fund expended
$497,853 less primarily due to vacant positions.
• Education Support (Special Revenue Fund) — This fund collects tax revenue which is then paid to the School District for education
services within the Borough. There was an increase of $551,968 paid out of this fund in FY2020 compared to FY2019.
• Facilities Fund (Special Revenue Fund) — Fund balance increased by $295,711(0.73%). Investment income, the sole revenue source
for the fund, was $1,130,902 and the largest use of allowed earnings use in this fund was a transfer of $830,191 to the Education
Debt Service Fund to help cover required debt service payments and a $5,000 transfer to the Building and Grounds Special Reve-
nue Fund.
Statement of Revenue, Expenditures and Changes in Fund Balance (Deficits)
All Governmental Funds
(includes General and Education Support Funds)
FY2018 FY2019
Revenues
General Education
Fund Support Fund
(Special Revenue)
FY2020 FY2020 FY2020
Property Taxes $16,002,128
$16,794,958
$16,978,718 $1,052,998
$10,562,780
Severance Taxes 1,929,409
1,285,669
1,286,750 1,223,921
Intergovernmental 9,042,586
10,276,215
6,765,785 3,523,307
Services, Fees, Investments & 1,875,439
Other miscellaneous revenue
3,740,229
$3,434,448 678,804
-
Total Revenues $28,849,562
$32,097,071
$28,465,701 $6,479,030
$10,562,780
Expenditures
General Government $5,715,946
$5,308,369
$5,197,783 $4,450,375
-
Public Safety 798,514
714,826
635,865 118,700
-
Community & Economic Devel- 1,177,198
opment
1,183,798
885,179 797,843
-
Emergency Preparedness 43,038
14,307
4,479 4,479
-
Health & Social Services 207,500
182,900
157,500 157,500
-
Parks, Culture & Recreation 81,851
77,568
53,008 53,008
-
Service District Maintenance 587,707
569,610
786,366 -
-
Primary & Secondary Education 9,449,500
9,970,576
10,522,544 50,000
10,472,544
Capital Outlay 4,987,509
3,083,409
1,604,719 -
-
Debt Service 7,278,310
7,688,414
7,733,394
Total Expenditures $30,327,073
$28,793,777
$27,580,837 $5,631,905
$10,472,544
Other financing sources (uses)
Increase (decrease) in fund bal-
ance
Fund Balance, beginning of year,
as restated
Fund Balance, at end of year r"'
181,1421 591,4911 1,616,718
(1,296,369)1 3,894,7851 2,501,582
53,647,068 1 52,350,699 1 56,245,484
(113,000)1
734,1251 90,236
5,360,4241 (30,842)
4
(odiak Island Borough Popular Annual Financial Report For Fiscal Year Ending June 30, 21
PROPRIETARY FUNDS:
(Reports the business -type activities provided by the Borough)
Proprietary Fund Name Activity or Purpose of Fund
Municipal Solid Waste Collection & Accounts for the collection and disposal of solid waste and for the operation of the Leachate
Disposal Treatment plant.
Hospital Facility Accounts for the Borough -owned hospital.
Long -Term Care Center Accounts for the Borough -owned long-term care center.
Kodiak Fisheries Research Center Accounts for the Borough -owned Kodiak Fisheries Research Center.
Research Court Apartments Accounts for rent collected for the Borough -owned Research Court Apartments.
911 Services Accounts for fees collected from all phone lines for a 911 emergency system. This is a pass
through, there is no fund balance retained.
PROPRIETARY FUNDS - NET POSITION 6/30/20
■ Municipal Solid Waste 2 Hospital ■ Long Tenn Care Center KFRC ■ Research Court Apartments
$18,660,321 $16,384,259 $10,708,828
$6,784,526 )
t,_--- $315,682
Proprietary (Enterprise) Funds Highlights:
• Municipal Solid Waste Collection and Disposal — Net position increased by $1,580,803 (9.26%) due to an increase in charges
for services.
• Hospital Facilities — Net position increased by $131,808 (0.81%).
• Long -Term Care Center— Net position increased by $192,761 (2.92%) due to decreased bond interest payments.
• Kodiak Fisheries Research Center (Enterprise Fund) — Net position decreased by $493,799 (4.41%) due to decreasing lease
revenues and increasing repair and maintenance expenses.
• Research Court Apartments (Enterprise Fund) - New fund created in FY2020.
Statement of Revenue, Expenses and Changes in Net Position (Deficits)
Total for All Borough Proprietary Funds
Municipal Waste
Collection & Dis-
posal(Only)
FY2018
FY2019
FY2020
FY2020
Revenues
Total Operating Revenue
$7,374,788
$8,038,190
$7,961,329
$4,153,416
Total Non -Operating Revenue
169,594
700,771
492,721
240,896
Total Revenues
$7,544,382
$8,738,961
$8,454,050
$4,394,312
Expenses
Total Operating Expenses
$6,551,438
$6,605,558
(
$6,070,727
$2,520,574
Total Non -Operating Expenses
792,224
715,826
701,087
292,935
Total Expenses
$7,343,662
$7,321,384
$6,771,814
$2,813,509
Other Financial Sources (uses) 45,000 45,000 45,000 -
Net Position, beginning of year, 49,418,083 49,663,803 51,126,380 17,079,518
as restated
Net Position, end of year
:odiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 2(
ASSEMBLY MEETINGS
Assembly meetings can be viewed live via internet streaming through the Borough's website. Video recordings of previous regular
meetings and voice recordings of work sessions, along with meeting packet information is also available on the website:
http://www.kodiakak.us.
Regular meetings -1st and 3rd Thursday of the month at 6:30 PM at 710 Mill Bay Road
Work Session Meetings-2nd and 4th Thursday of the month at 6:30 PM at 722 Mill Bay Road
Public Comment Call In Numbers: Toll Free 855-482-9202 or locally 907-486-3231
SUMMARY OF DEBT SERVICE REQUIREMENTS
Total Principal and
Interest Payments Due Project Description
64,655,050 High school renovation and renewal project.
7,773,625 Renewal and replacement for various school buildings.
$ 4,957,975 Acquisition and construction of school improvements including a new school pool.
$ 3,943,775 Planning, design and construction for the new school pool and Kodiak High School Voc/Ed classroom.
$ 3,233,825 Planning, design and construction for the Larsen Bay, Kodiak Middle and Kodiak High schools.
$ 84,564,250
5-
Summary of Total Debt Service Requirements By Year
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 )i13o
PROPERTY TAXES
The Assembly sets the mill rates, or the number of mills each individual taxpayer will be assessed or charged per dollar value of
property owned. A mill is one tenth of one percent of a dollar (.001). For FY2020, the Borough -wide mill rate was 10.75 which
equates to 1.075 cents of tax to be paid for each dollar of assessed property value.
In addition to the Borough -wide mill rate, mill rates are set for taxing properties within specific boundaries for specific activities. If
the taxing area has a board or committee, they submit a budget and recommended rate to the Assembly. For those properties
within the city limits, the City of Kodiak's City Council sets the mill rate.
FY20
Mill Rate Allocation History ■R&R Projects —To fund renewal and replact
Y ment project need within the Borough.
El Debt Service —To fund payment of principa
7.45 and interest on the Borough's long-term
debt.
0.73
F Y 19 1.87
7.05
1.10
1.3
FY18 2.03
6.50
0.62
Education Support —To fund the Kodiak Is-
land Borough School District for the State
required local minimum contribution and it
kind costs.
General Fund —To fund the general opera-
tions of the Kodiak Island Borough.
■ R & R Proiects ■ Debt Service ■ Education Support ■ General Fund
Kodiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30,
GENERAL FUND REVENUES — A Closer Look
Revenue Source Reason(s) for Increase or Decrease
$9,000,000
$8,000,000
$7,000,000
$6,000,000
S5,000,000
$4,000,000
$3.000,000
S2,000,000
$1,000,000
s-
Although excise taxes, service and fee revenues were relatively stable, investment earnings decreased
$58,826 (27%), primarily due to negative market rates in response to the COVID-19 pandemic.
Various state revenues were $879,734 less than anticipated.
Local Severance Tax Revenues increased by $17,223 (1.5%); this tax is very dependent on the fishing,
timber and gravel economy in Kodiak. While the commercial fishing industry in Kodiak has been sta-
ble, the timber and gravel economies have decreased.
General Fund Property Tax Revenues decreased by $886,600 (45%). Although the Borough -wide mill
rate has remained the same at 10.75 mills since FY2012, how the mill rate is distributed to the general
fund changes annually. The General Fund's share of the mill rate decreased from 1.10 mills in FY2019
to 0.56 mills in FY2020.
General Fund Revenue by Category
FY2018-0.62 milk FY2019-I.10mills FY2020-0.56 mills
Category Descriptions:
■ Excise Taxes- Services, Fees, Investments &
Other: Local revenues from penalties and in-
terest, excise taxes, building permits, zoning
permits, interest earnings and changes in
market value on investments, map sales and
reimbursed expenses.
■ Intergovernmental: Federal and State reve-
nues such as Payment in Lieu of Tax (PILT),
Community Revenue Sharing, Fisheries Busi-
ness Tax Sharing, Fisheries Landing Tax, Na-
tional Wildlife Refuge and PERS on Behalf
Payments.
■ Severance Taxes: Local revenues from fish,
gravel and timber.
■ Property Taxes: Local revenues from residen-
tial and commercial real and personal prop-
erties and commercial aircraft.
WHERE YOUR BOROUGH -WIDE PROPERTY TAX DOLLAR GOES
(See category descriptions under Property Taxes)
Education Debt Renewal &
Support Service Replacement
69 cents 17 cents 9 cents
as
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iak Island Borough Popular Annual Financial Report For Fiscal Year Ending June 30, 2020
CAPITAL PROJECTS
Completed in FY2020:
• Bayside Fire Department Exterior Improvements
• Bayside Fire Department Exhaust Extraction System
• Bayside Fire Department Paving
• Baler Building Septic System
• Kodiak Middle School Boiler Room Remodel
• Lake Orbin Culvert Replacement
Bayside Fire Department Exterior Improvements
Kodiak Middle School Boiler Room Remodel
Baler Building Fuel Tank
North Star Elementary Gym Siding
Scheduled for Completion in FY2021: Scheduled for Completion Beyond FY2022:
Baler Building Fuel Tank Replacement a Providence Kodiak Island Medical Center Retaining Wall
Providence Kodiak Island Medical Center Fuel Tank Replacement • Kodiak Fisheries Research Center Exterior Improvements
Long Term Care Center Fuel Line Replacement • Kodiak Fisheries Research Center Fume Hood Exhaust
Kodiak High School and Kodiak Fisheries Research Center Electric • North Star Elementary Siding and Window Replacement
Boilers • Borough Building Boiler Room Remodel
Kodiak Fisheries Research Center Fire Alarm Upgrades
North Star Elementary Gym Siding Replacement