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Kodiak Island Borough
Popular Annual Financial Report
For Fiscal Year Ending June 30, 2017
Kodiak, Alaska
Government, Geographic Location & Population
The Kodiak Island Borough was incorporated on September
30, 1963 as a second 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 a
population of 13,563.
Services
The Borough has a full range of services, including: general
government, fire protection, first -response emergency medi-
cal services, health facilities, road and other infrastructure
construction and maintenance, community and economic
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 ports in the United
States in terms of amount and value of product delivered. In
2016, according to the National Ocean Economics Program,
the Port of Kodiak ranked third largest in both landed weight
(417,000,000) and landed value ($107,000,000)
Tourism remains strong with stable transient accommoda-
tions tax revenues and cruise ship traffic which is expected to
increase in the coming years.
Kodiak Island is home to the largest U.S. Coast Guard Base in
the United States, employing over 1,200 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
.,eq.ox
Ouzinkie
Port•
Lions
Kodiak* ,
1-aran f•y' Karluk� B. •
yChiniak'
Old Harbor
) Akhiok
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 FY 2017 Comprehensive Annual Financial Report
(CAFR). The CAFR conforms to the generally accepted accounting
principles (GAAP) and includes audited financial statements.
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 more detailed information and copies of the CAFR and PAFR,
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.
Michael Powers Dora Cross
Borough Manager Finance Director
Kodiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 201,
CAPITAL PROJECTS
Completed in FY 2017:
• East Elementary Roof Replacement • Peterson Elementary Boiler and Controls Replacement
• Main and Peterson Elementary Flooring Replacement • Bayside Fire Department Windows Replacement, Phase I
• Kodiak Middle School Bus Canopy Repair
New Flooring at Akhiok School
Scheduled for Completion in FY 2018:
• Village School Flooring Replacement (Akhiok, Karluk and
Ouzinkie)
• Rural School Playground Upgrades (Akhiok, Chiniak, Karluk, Old
Harbor, Ouzinkie, Port Lions & Larsen Bay)
• East Elementary Renovation Phase I - Bathrooms
• Kodiak Middle School Fire Alarm, Controls and Elevator
Upgrades
• Kodiak Fisheries Research Center Digital Controls Upgrade
• Main Elementary Walkway Replacement
7,000,000
6,000,000
s,000,006
a,000,000
3,000,000
s,000,000
1,000,000
New Playground at Karluk School
Scheduled for Completion Beyond FY 2018:
• Bayside Window Replacement, Phase II
• Baler Building Roof Replacement
• Baler Building Siding Replacement
• East Elementary Renovation Phase II —Flooring
replacement, cabinets, countertops/sinks and door
replacements
• Peterson Elementary and Kodiak Middle School Paving
and Underground Storage Tank Removal
• Underground Storage Tank Replacements (Main
Elementary, Port Lions & Old Harbor Schools)
• ChiniakTsunami Shelter
GENERAL FUND REVENUES — A Closer Look
• Services, Fees, Investments &
Other
• InteMmemmental
. s��eran�e Taxes
• Property Taxes
Category Descriptions:
Services, Fees, Investments & Other: Local revenues
from penalties and interest, building permits, zoning
permits, interest earnings and changes in market
value on investments, map sales and reimbursed
expenses.
Interoovernmentol: Federal and State revenues such
as Payment in Lieu of Tax (PILT), Community Revenue
Sharing, Fisheries Business Tax Sharing, Fisheries
Landing Tax, National Wildlife Refuge and PIERS on
Behalf Payments.
Severance Taxes: Local revenues from fish, gravel and
timber.
Property Taxes Local revenues from residential and
commercial real and personal properties and com-
mercial aircraft.
Kodiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 2017
FINANCIAL STRUCTURE
The Borough maintains 29 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, Educational and Municipal Waste Collection.
GOVERNMENTAL FUNDS
(Reports the basic service activities provided by the Borough)
Governmental Fund Name Activity or Purpose of Fund
General Fund
Special Revenue Funds
Debt Service Fund
Capital Project Funds
Revenues
Operating fund for the Borough. Departments within the fund are: the Assembly, Assessing, Clerks,
Community Development, Engineering & Facilities, Finance, Information Technology and the Manag-
er.
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 mainte-
nance of Borough building and grounds.
Operating fund for the payment of general long-term debt principal; interest and other related costs.
Operating fund for the acquisition or construction of major capital facilities and equipment.
Statement of Revenue, Expenditures and Changes in Fund Balance (Deficits)
All Governmental Funds General
(includes General and Educational Funds) Fund
FY 2015 FY 2016 FY 2017 FY 2017
Educational Fund
(Special Revenue)
FY 2017
Property Taxes $14,091,503
$14310,687
$15,700,272 $421,113
$9,988,377
Severance Taxes 1,807,331
1,586,555
1,414,557 1,306,507
-
Intergovernmental 12,426,726
11,961,335
8,762,875 3,738,157
235,177
Services, Fees, Investments &Other 1,290,143
1,468,634
$3,295,653 98,320
Total Revenues $29,615,703
$29,327,211
$29,173,357 $5,564,097
$10,223,554
Expenditures
General Government $6,333,724
$5,307,245
$5,281,999 $4,063,887
-
Public Safety 524,169
572,839
699,118 109,415
-
Community & Economic Development 1,153,985
1,069,639
1,096,928 987,407
-
Emergency Preparedness 29,128
30,849
35,861 35,861
-
Health & Social Services 406,093
389,000
233,999 233,999
-
Parks, Culture & Recreation 186,452
111,405
47,734 47,734
-
Service District Maintenance 534,376
626,289
475,248 -
-
Primary & Secondary Education 11,100,714
11,100,650
10,373,548 96,000
10,277,548
Capital Outlay 24,891,673
16,671,895
5,022,964 -
-
Debt Service 5,767,617
6,519,986
7,162,872 -
-
Total Expenditures - $50,927,931
$42,399,797
$30,430,271 $5,574,303
$10,277,548
Other financing sources (uses) 176,9871 17,605,2731 (1,071,648) (958,451)
Increase (decrease) in fund balance (21,135,241) 4,532,687 (2,328,5 (968,657) (53,994)
Fund Balance, beginning of year, as i72,318,860 51,442,943 55,975,qQ 3,285,781 114,046)
restated
Fund Balance, at end of year $51,183,619 $55,975,630 $53,647,068 $2,317,124 $(68,040)
4
Kodiak Island Borough Popular Annual Financial Report For Fiscal Year Ending June 30, 2017
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
Treatment plant.
Hospital Facility Accounts for the Borough -owned hospital.
Long -Term Care Center Accounts forthe Borough -owned long-term care center.
Kodiak Fisheries Research Center Accounts for the Borough -owned Kodiak Fisheries Research Center.
911 Services Accounts for fees collected from land line phones for a 911 emergency system.
Statement of Revenue, Expenses and Changes in Net Position (Deficits)
All Borough Proprietary Funds Municipal Waste
(Includes Municipal Waste Collection) Collection
FY 2015
FY 2016
FY 2017
FY 2017
Revenues
Total Operating Revenue 6.683,971
$8,219,712
1 $5,789,553
$3,116,950
Total Non -Operating Revenue 254,506
821,791
264,784
51,463
Total Revenues $6,938,477
$9,041,503
$6,054,337
$3,168,413
Expenses
Total Operating Expenses $4,474,621 ( $7,107,229 ( $6,229,317 $2,929,659
Total Non -Operating Expenses ;.:1,277,654 1 1,301,865 1,095,225 367,158
Total Expenses ;.5,752,275 $8,409,094 $7,324,542 $3,296,817
Net Position, beginning of year 47,572,002 49,124,314 49,818,277 15,271,728
Net Position, end of year $49,124,314 $49,818,277 $49,682,444 $15,143,324
POPULATION AND STATISTICAL INFORMATION
FY 2015 FY 2016 FY 2017
Borough Population
13,819
13,790
13,563
Borough Land Area (in square miles)
7,130
7,130
7,130
Number of Borough maintained Buildings (including schools)
19
21
20
Number of Registered Voters in the Borough
9,100
9,585
9,453
Number of Borough Employees
45
43
44.5
Number of Fire Stations in the Borough
2
2
2
Number of Playgrounds in the Borough
16
16
16
Number of Schools in the Borough
11
11
11
KIBSD School Enrollment
2,446
2,437
2,386
KIBSD Employees (Teachers and support personnel)
353
370
383
5
(odiak Island Borough
Popular Annual Financial Report For Fiscal Year Ending June 30, 2017
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 FY 2017, 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 activi-
ties. 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.
Where Your Borough -Wide Property Tax Dollar Goes
Education Support Debt Service Renewal & Replacement General Fund
63 cents 19 cents 12 cents 6 cents
rM
BONDED DEBT
(Balances Include Bond Premiums and Discounts)
• General Obligation Bonds— bonds issued by a state or municipality which is secured by the Borough's pledge to use any
or all available resources —generally tax revenues — to repay holders of the bond.
• Revenue Bonds — bonds issued by a state or municipality which finance income -producing projects and are secured by a
specified revenue source — generally fee income — to repay holders of the bond.
• Bond Premium/Discount — A bond trades at a premium when it's stated coupon rate (rate of interest) is higher than
prevailing interest rates. It trades at a discount when it's stated coupon rate (rate of interest) is lower than prevailing
interest rates.
• Refunding —The process of redeeming an outstanding bond, by issuing a new bond and using the proceeds to pay off the
other bonded debt. The new bond will almost always be issued at a lower interest rate, creating a saving in interest ex-
penses.
• Defeasement—A provision that voids a bond when the borrower sets aside monies sufficient to service payment of the
debt.
Balance July 1, 2016
Governmental Funds
General Obligation Bonds
(School & Facility Improvements)
$78,325,000
Proprietary Funds
Revenue Bonds if
(Municipal Solid Waste)
K' $2,914,3201
Refunded (Additions) 4,905,0001 -
Proprietary Funds
Revenue Bonds
(Lone -Term Care Center)
$17,245,855
Defeasement & Payments 9,150,000 212,211 5,370,984
(Reductions)
Balance June 30, 2017
$74,080,000
$2,702,109
$11,874,871