FY2021 Popular Annual Financial ReportKodiak Island Borough
Finance Department
710 Mill Bay Road
Kodiak, AK 99615
Presorted
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US Postage
PAID
Anchorage, AK
Permit No. 69
Kodiak Island Borough
jai
Popular Annual Financial Report
For Fiscal Year Ending June 30, 2021
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 southwest of Anchorage,
Alaska. The island is accessible only by boat or plane and is
the second largest island in the United States. In total, the
Borough encompasses 6,560 square miles and currently
serves an estimated population of 12,611.
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 Annual Comprehensive Financial Report.
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 ports in the United
States in terms of quantity 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. There was some recovery seen in
FY2021, albeit slow.
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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KOOIAK 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 FY2021 Annual Comprehensive Financial Report.
The annual comprehensive financial report conforms to the gener-
ally accepted accounting principles (GAAP) and includes audited
financial statements, as well as more detailed information than
presented here. Although the financial numbers in this Popular
Annual Report come from an audited source, they are presented in
this report in a condensed and unaudited format.
For copies of the reports, visit the Borough's office located at 710
Mill Bay Road, Kodiak, Alaska, the Borough's Facebook page or on
our website at www.kodiakak.us.
We hope you find the report to be informative. We welcome your
comments, questions and suggestions.
Dave Conrad, Interim Borough Manager
Roxanne Murphy, Borough Manager
Dora Cross, Finance Director
Kodiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 202:
BOROUGH POPULATION AND STATISTICAL INFORMATION
FY2019 FY2020 FY2021
Borough Population
13,136
13,001
12,611
Annual Unemployment Rate in the Borough
4.2%
4.4%
3.9%
Percentage of owner -occupied housing in the Borough*
59%
55%
55%
Median Gross Rent within the Borough*
$1,294
$1,369
$1,458
Median household income within the Borough*
$74,167
$78,281
$85,839
Percent of persons living in poverty within the Borough*
9.3%
8.2%
7.5%
KIBSD Student Enrollment
2,395
2,315
2,297
KIBSD Employees (Teachers and support personnel)
382
377
386
Number of Schools in the Borough
13
13
13
Number of Borough Employees
41
38
37
* United States Census Bureau
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.
Operating funds for specific revenue sources. These include: education, facilities, tourism, emergency
planning and neighborhood service districts such as road, fire and street lighting, as well as maintenance
of Borough building and grounds.
Operating fund for the payment of general long-term debt principal, interest and other related costs.
Currently the fund services General Obligation Bonds for school related projects.
GOVERNMENTAL FUNDS - FUND BALANCE 6/30/21
■ General Fund ■ Special Revenue Funds ■ Debt Service Fund - Capital Funds
$7,487,220 $45,928,823 � $641,401 $6,772,600
Kodiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 2021
GOVERNMENTAL FUNDS
(Reports the basic service activities provided by the Borough)
Governmental Fund Highlights:
• General Fund — Fund balance increased by $1,392,671 (22.85%). There were two main contributors to the overall increase in the
fund. 1) The fund received $461,147 more in property tax revenue due to increased tax assessments, and 2) the fund expended
$943,524 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 a $1,079,180 decrease in expenditures for this fund in FY2021 compared to FY2020.
• Facilities Fund (Special Revenue Fund) — Fund balance decreased by $688,744 (1.70%). Investment income, the sole revenue
source for the fund, was $143,573 due to decreased treasury interest rates. The largest use of allowed earnings use in this fund
was a transfer of $827,316 to the Education Debt Service Fund to help cover required debt service payments the State of Alaska's
School Bond Debt Reimbursement Program did not reimburse the Borough for.
Statement of Revenue, Expenditures and Changes in Fund Balance (Deficits)
Total of All Governmental Funds
FY2019 FY2020
Revenues
General Education
Fund Support Fund
fonm JOLnW
FY2021 FY2021 FY2021
Property Taxes $16,794,958
$16,978,718
$17,445,434 $4,293,682
$9,389,701
Severance Taxes 1,285,669
1,286,750
1,100,413 1,049,430
-
Intergovernmental 10,276,215
6,765,785
9,436,868 8,931,861
-
Services, Fees, Investments & 3,740,229
Other miscellaneous revenue
3,434,448
$2,254,193 811,171
-
Total Revenues $32,097,071
$28,465,701
$30,236,908 $15,086,144
$9,389,701
Expenditures
General Government $5,308,369
$5,197,783
$4,995,157 $4,363,970
$ -
Public Safety 714,826
635,865
546,055 118,700
-
Community & Economic Devel- 1,183,798
opment
885,179
907,656 832,436
-
Emergency Preparedness 14,307
4,479
5,257 5,257
-
Health & Social Services 182,900
157,500
5,257,005 5,257,005
-
Parks, Culture & Recreation 77,568
53,008
39,957 39,957
-
Service District Maintenance 569,610
786,366
647,976 -
-
Primary & Secondary Education 9,970,576
10,522,544
9,443,364 50,000
9,393,364
Capital Outlay 3,083,409
1,604,709
1,195,820 -
-
Debt Service 7,688,414
7,733,394
8,088,223 -
-
Total Expenditures $28,793,777
$27,580,837
$31,126,470 $10,667,325
$9,393,364
Other financing sources (uses)
Increase (decrease) in fund bal-
ance
$591,4911 $1,616,718 1 $2,972,840 $(3,026,148)1$
$3,894,785 1 $2,501,5821 $2,082,978 $1,392,671 $(3,663)
Fund Balance, beginning of 52,350,6991 56,245,484 1 58,747,066 6,094,5491 59,394
year, as restated
Fund Balance, at end of year 556.245.484 I 58.747.066 I 560 830 044 7.487.220 I 31
4
;odiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 2021
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 to the City of Kodiak therefore there is no fund balance retained.
PROPRIETARY FUNDS - NET POSITION 6/30/21
■ Municipal Solid Waste ■ Hospital ■ Long Term Care Center KFRC ■ Research Court Apartments
$19,109,542 $16,601,854 $6,674,089 $10,055,704
I. - $308,548
Proprietary (Enterprise) Funds Highlights:
• Municipal Solid Waste Collection and Disposal — Net position increased by $449,221 (2.41%) due to decreased depreciation and
pension and OPEB liabilities.
• Hospital Facilities— Net position increased by $217,595 (1.33%) due to decreased repair and maintenance expenses.
• Long -Term Care Center— 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 reve-
nues and increasing repair and maintenance expenses.
• Research Court Apartments (Enterprise Fund) - Net position decreased by $7,134 (2.26%) due to increased insurance expenses.
Statement of Revenue, Expenses and Changes in Net Position (Deficits)
Total Expenses $7,321,384
771,8141 $7,681,913 $3,741,080
Other Financial Sources (uses) $45,000 $45,000 $ $
Net Position, beginning of year, $49,663,803 I $51,126,380 I $52,853,615 $18,660,321
as restated
Net Position, end of year
5
Total for All Borough Proprietary Funds
Municipal Waste
Collection &
Disposal (Only)
FY2019
FY2020
FY2021
FY2021
Revenues
Total Operating Revenue
$8,038,190
$7,961,329
$7,444,573
$4,125,597
Total Non -Operating Revenue
700,771
492,721
133,461
64,704
Total Revenues
$8,738,961
$8,454,050
$7,578,034
$4,190,301
Expenses
Total Operating Expenses
$6,605,558 I
$6,070,727
$7,047,151
$3,523,239
Total Non -Operating Expenses
715,8261
701,087.1
634,762
217,841
Total Expenses $7,321,384
771,8141 $7,681,913 $3,741,080
Other Financial Sources (uses) $45,000 $45,000 $ $
Net Position, beginning of year, $49,663,803 I $51,126,380 I $52,853,615 $18,660,321
as restated
Net Position, end of year
5
;odiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 2021
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.
Meeting locations are contained in the meeting agendas:
Borough Building Assembly Chambers (710 Mill Bay Rd) OR Bayside Fire Dept (4606 E. Rezanof Dr.)
Public Comment Call In Numbers: Tall 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
$8,000,000
$6,000,000
$4,000,000
52,000,000
$-
Summary of Total Debt Service Requirements By Year
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
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 FY2021, 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.
Mill Rate Allocation History
FY21 1.55
6.45
2.75 (includes $2.3 million transfer to Debt Service)
INNER 0.95
FY20 1.79
7.45
0.56
0.73
FY19 Ill1.67
7.05
1.1
■ R & R Projects s Debt Service ■ Education Support ■ General Fund
N R&R Projects—To fund renewal and replace-
ment project need within the Borough.
Debt Service—To fund payment of principal
and interest on the Borough's long-term
debt.
E Education Support—To fund the Kodiak is-
land Borough School District for the State
required local minimum contribution and in-
kind costs.
General Fund—To fund the general opera-
tions of the Kodiak Island Borough.
Kodiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 2029
GENERAL FUND REVENUES — A Closer Look
Revenue Source Reason(s) for increase or Decrease
Although excise taxes, service and fee revenues were relatively stable, investment earnings decreased
$128,308 (84%), primarily due to negative market rates in response to the COVID-19 pandemic.
Various state revenues were $107,035 and federal revenue were $5,301,519 higher than FY2020. This is
mostly due to the CARES Act Federal Grant.
Local Severance Tax Revenues decreased by $174,491(14%); this tax is very dependent on the fishing,
timber and gravel economy in Kodiak. The fishing industry suffered due to a variety of factors, including
supply chain delays and labor shortages due to the ongoing COVID-19 pandemic.
General Fund Property Tax Revenues increased by $3,240,684. 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 chang-
es annually. The General Fund's share of the mill rate increased from 0.56 mills in FY2020 to 2.75 mills in
FY2021. This was to account for a $2.3million dollar transfer to the Debt Service Fund.
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.
0 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.
0 Severance Taxes: Local revenues from fish,
gravel and timber.
0 Property Tgxes: 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 Support Debt Service General Fund
60 Cents 14 Cents 26 Cents
(Transfer to
Debt Service
13 Cents)
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Kodiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 2021
CAPITAL PROJECTS
Completed in FY2021:
• Baler Fuel Tank Replacement
• Providence Kodiak Island Medical Center Fuel Tank
Replacement
• Kodiak High School Electric Boiler
• Kodiak Fisheries Research Center Electric Boiler.
• Kodiak Fisheries Research Center Fire Alarm Upgrades
• North Star Elementary Gym Siding Replacement
As part of the Federal
CARES Act, the Kodiak Island
Borough received
$5,792,501. Here are the
major categories the money
was spent on.
Scheduled for Completion in FY2022 and Beyond:
• Borough Building Boiler Remodel
• Salonie Creek Culvert Replacement
• Saltery Cove Trail System Access & Improvement
• Kodiak Fisheries Research Center
Exterior Improvements
Fume Hood Exhaust
Ozonator
• Long Term Care Center Fuel Line Replacement
• Providence Kodiak Island Medical Center
Retaining Wall
Fire Alarm Replacement & Upgrade
• Schools
Chiniak Water System
North Star Elementary Siding Replacement
North Star Elementary Window Replacement
Peterson Elementary Roof Replacement
KODIAK ISLAND BOROUGH CARES ACT EXPENDITURES
Small Business Grants,
Ci
Utility Relief Credit K113,9%
Amount
Percentage
Description
$ 58,681
Borough: Administrative/other(1%): Legal fees, hand sanitizer, masks, cleaning and social distancing barriers and
other miscellaneous COVID-19 related expenses.
$ 276,169
Payroll (5%): Salary and associated costs Borough Staff at the Emergency Operations Center EOC).
$ 143,094
Payroll (2%): Salary and associated costs for Borough employees related to COVID-19 activities
such as staffing the reception area and sanitizing the building.
$ 39,421
Telework(1%): Equipment to work remotely as needed, security software, setup for remote meeting
accessibility, and enabling the relocation of Assembly Meetings to Bayside Fire Dept.
$ 517,365
9%
$2,670,000
46°%
School District: Funded education needs for remote classes and other social distancing regirements.
$ 753,279
6%
City of Kodiak: Supplies for testing and shared EOC expenses.
$1,424,694
32°%
Small Business Grants: Financial assistance to fund local businesses due to COVID-19 related economic hardship.
$ 427,163
7%
Utility Relief Credit Program: Financial assistance to residents and businesses with solid waste utility accounts.
$5,792,501
100%