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FY2010 Popular Annual Financial ReportKodiak Island Borough r Kodiak Island Borough Popular Annual Financial Report Award for Outstanding Achievement in Popular Annual Financial Reporting PRESENTED TO Kodiak Island Borough Alaska for the Fiscal Year Ended 4 EOFF, aria June 30, 2009 Presiden� Executive Director Kodiak Island Borough Popular Annual Financial Report Table of Contents... Term GFOAAward....................................................................................2 2010 Mayorand Assembly.......................................................................3 Financial Information................................................................ 5.15 Construction Projects............................................................. 16-18 Assessed Values...........................................................................19 2011 PropertyTaxes...............................................................................20 2011 SeveranceTaxes...........................................................................21 2011 Education.......................................................................................22 2012 Childcare........................................................................................23 1010 Road Service Maintenance and Repair.......................................23 HealthCare.....................................................................................24 Community Development.............................................................25 Fire Protection and Emergency Services....................................26 Emergency Preparedness............................................................27 Geographic Information Systems................................................28 Statistical Information...................................................................29 General Administration.................................................................30 AfterYear End................................................................................30 OurWebsite...................................................................................31 Cover photo by Jennifer Fogle Mayor and Assembly (as of June 30, 2010) Mayor Term Jerome Selby 2010 Assembly Members Ms. Pat Branson 2010 Mr. lerrol Friend 2012 Ms. Judy Fulp 2011 Ms. Sue Jeffrey 2011 Mr. Dave Kaplan 2011 Ms. Chris Lynch 2012 Ms. Louise Stutes 1010 2 3 Kodiak Island Borough Popular Annual Financial Report Profile of the Kodiak Island Borough... The Kodiak Island Borough lies at the western border of the Gulf of Alaska, approximately 40 miles south of the Kenai Peninsula. 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 7,130 square miles, making it slightly smaller than the State of Massachusetts, and serves a population of 13,860. The main industries of the Borough are commercial fishing, tourism, government, aerospace, and community support services. The seafood industry is by far the largest industry in the Kodiak Island Borough. Kodiak is home to the largest port in the state, housing over 700 commercial vessels and consistently ranking among the top ten ports in the United States in terms of amount and value of product delivered. In 2007 Kodiak ranked third largest in seafood value. www.oceaneconomics.org Tourism continues to grow in Kodiak with an increasing number of visitors each year. A number of cruise ships have visited Kodiak in recent years as cruise ship companies expand their tours of Alaska's coastal communities. The Kodiak Launch Complex includes a launch control center, payload processing facility, spacecraft assembly building, and launch pad. It is designed to handle small- to- medium- sized rockets used to launch low earth orbit satellites, as well as military, scientific, and research missions. Kodiak is home to the largest Coast Guard base in the U.S., employing nearly 1,400 people and providing vital services to the marine industries that are an integral part of Kodiak, as well as making a significant contribution to the Kodiak community. The Borough was incorporated on September 30, 1963 as a Second -Class Borough by Chapter 146 Sessions, Laws of Alaska 1961, as amended. 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, all elected at large. The Borough provides a full range of services, including fire protection, first -response emergency medical services, road and other infrastructure construction and maintenance, community and economic development, health and sanitation, culture and recreation, and solid waste 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. Kodiak Island Borough Popular Annual Financial Report Financial Information... Financially, FY2010 was a good year for the Kodiak Island Borough. The Borough's net assets increased by $7,626,228. At June 30, 2010 the assets of the Kodiak Island Borough exceeded its liabilities by $162,497,439. Of this amount $114,102,904 is invested in capital assets. Of the remaining assets $43,915,454 is reserved and $4,479,081 is available for use. By far the single most significant financial event in FY2010 was the voter's approval of a $76,310,000 bond issue. The proceeds from this bond issue are to be used renovate and remodel education facilities in the Borough. When all of the bonds are sold we anticipate annual payments of $2,620,000 after state reimbursement of 60 to 70%. This equates to approximately 2.6 mills. (One mill equals a tax payment of $200 on a $200,000 house) 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 Estimated Debt Service O N R tD W O N a tD W O N V 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N The Kodiak Island Borough has two types of funds, governmental funds and proprietary funds. The difference between governmental and proprietary funds is the type of accounting. Governmental funds use the modified accrual basis while proprietary funds use the accrual basis of accounting. In layman's terms, the biggest difference is how the purchase of capital assets is handled. Governmental funds record the purchase as an expense while proprietary funds record depreciation as the expense. Businesses use the proprietary form of accounting. 4 5 Kodiak Island Borough Popular Annual Financial Report Governmental Funds Governmental funds include the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Project Funds. Governmental Funds had total assets of $157,446,289. The largest component of this total was $49,222,436 in cash and investments, $5,157,426 in receivables from the state and federal government and $93,135,695 in capital assets. The largest liability was outstanding bonds. At June 30, 2010 there were $29,565,000 in outstanding general obligation bonds. The total fund balance of all governmental funds declined by $5,081,025. Most of this decline came from the School Bond Capital Projects Fund as work progressed on several projects funded by the sale of bonds in previous years. Proprietary (Enterprise) Funds Proprietary funds include Solid Waste, Hospital, Kodiak Fisheries Research Center (KFRC) and 911. At the end of the year, the proprietary funds had total assets of $50,240,228. This includes 10,525,760 in cash and investments. Capital assets (land, buildings and equipment) make up $38,645,854 (net of depreciation) of total assets. 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 Revenues vs Expenditures Solid Waste Hospital KFRC 0 Revenues 0 Expenditures Kodiak Island Borough Popular Annual Financial Report The Solid Waste fund closed the year with $42,126 in net operating income, the Hospital had a $157,903 operating loss, K.F.R.C. had operating income of $25,892, and 911 broke even. The losses in the Hospital and K.F.R.C. Funds were due to depreciation expense. On a cash flow basis, the Solid Waste, K.F.R.C. and 911 Funds are all on solid footing. Other items of interest The Borough converted its accounting system from an AS/400 system to a .NET platform. The new software is much more powerful and easier to use. The Borough added two positions in FY2010, code enforcement officer and GIS analyst. Both were filled in FY2011. We started a multi year $250,000 Borough code revision project. This project will develop substantial revisions to KIBC Title 16 (Subdivision), Title 17 (Zoning) and Title 18 (Borough Real Property). This project, undertaken by the community development department, is of significant interest to all residents of the Kodiak Island Borough. This project will provide new regulatory tools with which to implement recently updated comprehensive plans. In addition, this project will also eliminate out-of-date codes and inconsistencies that have built up over several decades of incremental code amendments in these three titles. Interest rates have fallen significantly since June 30, 2007 (75 basis points on January 22, 2008 alone). On June 30, 2007 the 90 -day US Treasury Bill earned 4.28%; by June 30, 2010 it had fallen to .17 percent. The Borough earned $1,417,268 in interest earnings in FY2010 compared to $2,356,588 in FY2009. The Borough did earn 2.4% on its investments in FY2010. This was 12 times more than the 90 -day Treasury Bill. This report has been prepared to provide the reader with a general overview of the financial condition of the Kodiak Island Borough at June 30, 2010. This information has been derived from our CAFR (Comprehensive Annual Financial Report). This presentation is consistent with GAAP. - The CAFR is available at the Finance Department or online at www.kodiakak.us/. If you have any questions about the contents of this 911 report, please contact the Finance Department at (907) 486-9323. T -1�'l. 4;� Rick L. Gifford Karleton G. Short Borough Manager Finance Director Kodiak Island Borough Popular Annual Financial Report Kodiak Island Borough Popular Annual Financial Report KODIAK ISLAND BOROUGH Revenue Statement Governmental Funds Balance Sheet June 30, 2010 Governmental Funds (modified accrual basis of accounting) June 30, 2010 (With summarized financial information for lune 30, 2009) 2010 2009 Revenues Assets 2010 2009 Taxes $ 10,993,175 $ 10,565,685 Assets: Cash and investments $ 49,222,436 $ 60,424,187 Intergovernmental Receivables: State sources 10,594,318 5,710,190 State of Alaska 4,677,896 510,588 Federal sources 2,320,838 3,378,934 Federal Government 379,530 62,034 - Land sale proceeds 138,867 30,561 Property taxes, net of Severance taxes 1,336,075 1,311,188 allowance of 515,828 207,544 140,730 Licenses, permits, fees, and other local revenues 741,193 742,527 Severance taxes 355,360 280,334 Other revenues 603,958 418,741 Land sales contracts 11,077 41,598 Investment earnings 1,225,938 2,088,915 Accounts and other Total revenues 27,954,362 24,246,741 receivables, net 96,827 39,151 Due from other funds 3,331,972 1,584,884 Expenditures Prepaid items 15,703 Notes receivable, due after one year General government 4,600,601 4,067,024 Land sales contracts, due after one year 34,342 172,449 Fire services 502,491 460,826 Advances to other funds 5,726,303 6,206,906 Emergency preparedness 8,011 12,488 Total $ 64,058,990 $ 69,462,861 Community and economic development 1,034,686 908,501 Liabilities and Fund Balances Health and sanitation department 371,321 333,747 Liabilities: Accounts payable 1,382,775 1,946,855 Education, culture and recreation 192,182 248,571 Reminages payable 250,045 530,153 Service district maintenance 543,897 398,219 Accrued compensation Primary and secondary education 9,980,350 9,956,618 and related liabilities 226,560 167,764 Capital outlay Customer deposits - 700 Schools 7,359,932 14,857,064 Due to component unit 4,956,848 5,766,156 General 4,319,438 1,277,106 Due to other funds 2,822,843 1,154,316 Debt service 4,042,478 4,142,099 Unearned revenues 354,529 750,502 Total expenditures 32,955,387 36,662,263 Total liabilities Fund balances: 9,993,600 10,316,446 Excess of revenues over (under) expenditures (5,001,025) (12,415,522) Reserved: - Long-term interfund Net proceeds from sales of bonds 0 (125,467) borrowings 5,726,303 6,206,906 Transfers in/out 3,511,195 6,144,301 Unreserved: Transfers out (3,591,195) (6,909,791) General fund: 2,382,676 3,124,289 Total other financing sources(uses) (80,000) (890,957) Special revenue funds: 37,530,982 37,292,771 Debt service funds: 22,255 5,938 Net change in fund balances (5,081,025) (13,306,479) Capital projects funds: 8,403,174 12,516,511 Total fund balances 54,065,390 59,146,415 Fund Balance (deficit) at beginning of year 59,146,415 72,452,894 Total $ 64,058,990 $ 69,462,861 Fund Balance at end of year $ 54,065,390 $ 59,146,415 8 9 Kodiak Island Borough Popular Annual Financial Report Kodiak Island Borough PopularAnnua/ Financial Report 10 11 Balance Sheets Changes in Fund Equity Enterprise Funds Enterprise Funds June 30, 2010 Year ended lune 30, 2010 Municipal Kodiak Other Municipal Kodiak Other Solid Waste Fisheries Nonmajor Solid Waste Fisheries Nonmajor Collection and Hospital Research Enterprise Collection and Hospital Research Enterprise Assets Disposal Facilities Center Food Disposal Facilities Center Food Curren[ assets: Operating revenues: Solid waste collection $ 3,226,606 - - Equity in central treasury $ 6,284,817 807,424 3,418,819 14,700 Customer receivables 569,875 121,200 532 - Solid waste disposal 1,098,666 -. Charges for services/customer charges - - - 42,474 Accounts receivable - State of Alaska 100,000 - - - Total current assets 6,954,692 928,624 3,419,351 14,700 Lease income - 720,000 1,602,685 - Total operating revenues 4,325,274 720,000 1,602,685 42,474 Inventories - 277,007 - - Operating expenses: Capital assets: Personnel services 795,050 5,000 338,361 3,000 Non -depreciable 2,417,311 5,987,885 - - Solid waste collection 1,640,179 Depreciable, net 3,056,875 15,205,296 11,978,487 - Refuse disposal 358,408 Total capital assets 5,474,186 21,193,181 11,978,487 Contracted services 275,876 - - - Total noncurrent assets 5,474,186 21,470,188 11,978,487 Maintenance and repairs 90,793 Total $ 12,428,878 22,398,812 15,397,838 14,700 Landfill closure and postclosure costs 367,263 - - - Liabilities and Fund Equities Depreciation 270,488 872,858 630,395 - Current liabilities: General and administration 204,366 45 489,931 Accounts payable $ 211,802 81,435 27,746 14,700 Miscellaneous 118,106 395 Deferred revenue - - 240,543 - Telephone services 39,079 Accrued compensation and Recycling services 267,518 related liabilities 64,488 - 26,799 - Contributions 13,207 Other accrued liabilities 532,169 Total operating expenses 4,283,148 877,903 1,576,793 42,474 Current portion of advances Operating income loss p 8 (loss) 42,126 (157,903) 25,892 - from other funds - 70,603 410,000 - Nonoperating revenues (expenses): Due to other funds 39,526 600 103,442 - Coutributiou to Providence Hospital - (108,000) - - Total curzent liabilities 847,985 152,638 808,530 14,700 CHC reimbursements - 1,147,762 - Noncurrent liabilities: Interest expense - (49,117) (350,787) - Notes payable 1,989,995 - Investment income 124,478 16,702 56,887 - Advances fromother limits - 1,106,261 4,505,000 - State of AK on -behalf payment 25,095 228 8,090 - Accrual for landfill closure her. (loss) before transfers 191,699 849,672 (259,918) - and postclosure costs 4,757,627 Transfers in 13,500 66,500 Total noncurrent liabilities 6,747,622 1,106,261 4,505,000 Total liabilities 7,595,607 1,258,899 5,313,530 14,700 Net other financing sources (uses) 13,500 66,500 Fund equities: Net change in fund equity 205,199 916,172 (259,918) Invested in capital assets, net of related debt 3,484,191 21,193,181 11,978,487 - Fund equity at beginning of year 4,628,072 20,223,741 10,344,226 - Unrestricted 1,349,080 (53,268) (1,894,179) - Fund equity at end of year $ 4,833,271 21,139,913 tO,084,308 Total fund equities 4,833,271 21,139,913 10,084,308 Total $ 12,428,878 22,398,812 15,397,838 14,700 10 11 Kodiak Island Borough PopularAnnua/ Financial Report The General Fund of the Borough is the nucleus around which all of the other funds radiate. When people think of the Borough, most people think of General Fund activities. Most of the Borough's employees are in General Fund departments. General Fund departments are the ones that register you to vote, appraise your house, and collect your property tax. They also zone your property and build the schools that your children attend. General fund expenditures and transfers exceed revenues by $741,613. There is enough in fund balance to cover these losses in FY2011 but revenues will have to be increased (taxes) for FY2012. Revenues ■Property Tax ■Severance Tax IntergowmmentaW other Lower interest rates means the Borough will have to rely more on property taxes and other forms of local revenue. The Borough has discussed levying a sales tax to spread the costs of school district. debt service across more revenue sources. 12 The fund balance of the General fund went down $741,613 in FY2010. We have budgeted to use another $1,423,158 of fund balance in FY2011. This would leave the General Fund with a fund balance of only $959,518. Expenditures CI • General gDvemmeia • tommunitydevebinent • Emergencypreparednes• Health and sanitation •cultureandrecmatiu, vEducation Kodiak Island Borough PopularAnnua/ Financial Report Balance Sheet General Fund June 30, 2010 (With summarized financial information for June 30, 2009) Assets 2010 2009 Assets: Cash and investments $ 6,780,243 $ 8,406,109 - Receivables: State of Alaska 75,843 80,121 Federal government 215,034 — Property taxes, net of allowance of $15,828 195,048 127,858 Severance taxes 355,360 280,334 Accounts and other receivables, net 4,519 6,069 Prepaid items 15,703 — Due from other funds 509,107 600,150 Total $ 8,150,857 $ 9,500,941 Liabilities and Fund Balances Liabilities: Accounts payable 402,741 319,265 Accrued compensation and related liabilities 226,560 167,764 Due to component unit 4,956,848 5,766,156 Unearned revenues 182,032 123,467 Total liabilities 5,768,181 6,376,652 Fund balances: Designated for subsequent year expenditures 1,423,158 1,261,581 Undesignated 959,518 1,862,708 Total fund balances 2,382,676 3,124,289 Total S 8,150,857 $ 9,500,941 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 Fund Balance Last Ten Years 001 00'1. 00M 00h 00h p00 p0n p00 poo'p10 1\1�'L 1\1�'L 11\3, 1\1�ti 1\1�ti 1\1�b 1\1�ti 1\1�n 1\1�ti 1\1�ti 13 Kodiak Island Borough Popular Annual Financial Report Budgetary Comparison Schedule General Fund Year ended June 30, 2010 (With financial information for the year ended June 30, 2009) Revenues: Property taxes: Real Personal Boat Motor vehicle Penalty and interest Total property taxes Intergovernmental: State spumes: State Revenue Sharing Raw fish tax Fish revitalization Commercial Passenger Vessel Tax Electric Co-op tax On behalf PERS payment Total state sources Federal sources: Payments in lieu of taxes Federal grants Total federal sources Total intergovernmental revenue Severance taxes: Fish Mining Logging Total severance taxes Licenses, permits, fees, and other local revenues: Building and nailer permits Subdivision and zoning fees Sale of copies Miscellaneous Total licenses, permits, fees, and other local revenues Investment income Total revenues June 30, 2010 Variance with Final Budget - Positive 2009 Budget Actual (Negative) Actual 8 8,342,508 8,420,010 77,502 8,029,453 1,055,150 1,046,934 (8,216) 1,092,850 23,000 22,548 (452) 24,017 250,000 260,739 10,739 274,462 175,000 132,876 (42,124) 132,471 9,845,65 9,883,107 37,449 ,553,253 747,706 748,189 483 777,571 1,339,575 1,339,575 - 1,288,926 17,970 68,855 50,885 55,382 25,500 25,487 (13) 24,778 26,000 26,716 716 27,524 219,000 98,214 (120,786) 247,007 277-577-51 07,036 (68,715) 2,421,188 1,200,000 1,328,052 128,052 1,775,015 252,238 454,878 202,640 265,421 1,452,238 1,782,930 330,692 2,040,4 3,827,989 4,089,966 261,977 4,461,624 1,400,000 1,287,693 (112,307) 1,289,695 12,600 19,762 7,162 14,001 20,000 28,620 8,620 7,492 1,4T2-6-00 1,336,075 (96,525) 1,311,188 65,000 64,010 (990) 52,002 4,500 4,075 (425) 6,075 8,000 3,234 (4,766) 7,340 51,750 71,893 42,194 131,944 129,250 143,212 36,013 197,361 155,000 178,567 23,567 292,825 15, 0,497 �5, ,`63027 26 I5, 1 ,251 (continued) Kodiak Island Borough Popular Annual Financial Report Budgetary Comparison Schedule General Fond Year ended June 30, 2010 ( With financial information for the year ended June 30, 2009) Expenditures: General government: General and administration Borough assembly Borough manager Borough clerk Borough attorney Finance department Management information systems Assessing department Engineen rg/facilities department Total general government June 3% 2010 ariance with Final Budget - Positive 2009 Budget Actual (Negative) Actual 298,800 184,460 387,587 468,174 128,000 774,940 748,430 484,788 204,668 264,451 164,856 421,554 467,653 91,867 767,100 670,731 377,787 202,879 -T,4Z8;879- 34,349 19,604 (33,967) 521 36,133 7,840 77,699 107,001 1,789 --7SU969- 246,765 161,128 407,768 464,767 66,585 692,596 487,354 486,325 181,046 Public satety- animal control 84,125 84,125 - 84,125 Community and economic development: Community development department 856,792 632,109 224,683 691,604 Building official 153,778 157,013 (3,235) 90,016 Economic development 75,000 45,358 29,642 43,500 Total community and economic development 1,085,570 834,480 251,090 825,120 Emergency preparedness 8,800 8,011 789 12,488 Health and sanitation department 268,000 265,626 2,374 232,699 Education, culture and recreation 111,034 105,182 5,852 161,571 Parks and recreation 36,000 - 36,000 - Kodiak College and city libraries 93,000 87,000 6,000 87,000 Primary and secondary education 9,980,350 9,980,350 9,956,618 Total expenditures -TTT46 � X3793,= -553074- - Excess of revenues over expenditures 43,771 837,275 (793,504) 1,262,296 Other financing uses: Transfers out (1,449,769) (1,479,174) (29,405) (1,368,486) Special pmjetcs - (99,714) - - Netchangeintund balance $ (1,405,998) (/41,613) 664,385 (106,190) Fund balance at beginning of year 3,124,289 3,230,479 Fund balance a[ end of the year S Z39=76-- --TTZTZST 14 15 Kodiak Island Borough Popular Annual Financial Report Construction Projects... The Borough has sold $28,000,000 worth of General Obligation Bonds since 2005 to fund safety, renovation and new construction of educational facilities. Most of the projects funded by these bonds have been completed or are underway. Additionally, the voters approved a $76,000,000 bond issue for the New High School Addition and Renovation project in October 2009. A Seismic Vulnerability Assessment of all schools was initiated in 2005. The assessment identified several deficiencies, both structural and non-structural, in the school facilities and recommended they be corrected within ten years. All of the recommended upgrades to the buildings have now been completed, with the exception of the KHS gymnasium. This project was put on hold pending the design of the new high school. All of the upgrades have been funded in part or whole by FEMA grants totaling $2,940,156. Old Harbor High School Recently completed projects: • The Kodiak Auditorium Roofing Upgrade was completed in 2010 • KHS Old Pool Roofing & Air Handling Unit Upgrade was completed in 2010 • A portion of the KHS parking lot paving was completed in 2010 • The Old Harbor Gym Addition was completed in 2010 Kodiak Island Borough Popular Annual Financial Report The Bayside Fire Station Addition was completed and opened in July 2010 The Kodiak High School parking lot has been repaved 16 17 Kodiak Island Borough Popular Annual Financial Report Future Projects: Jensen Yorba Lott was selected for architectural and engineering design services. Design is expected to take approximately a year with construction of the new facility scheduled to begin in 2011 and be completed over a three year period. The design of the proposed new ADF&G Facility on Near Island is complete and the project is ready to go out for bid. Kodiak Island Borough Popular Annual Financial Report Assessed Values... The assessed value of the Borough has been steadily increasing over the last ten years. In fact, it has increased by 23%. Assessed Values last ten years 800,000,00 600 000 00 M M list 400 000 00 M 1 ?001000100 1 ■ ■ ■ ■ ■ ■ ■ ■ ■ tioo~ tioo� tiooP tioo� tiooy boob tioo^ tioo� ��o �otio • Real Property Assessed Value ■ Personal Property Assessed Value The assessing department began a major upgrade in 2010 with implementation of a new computer system that both catalogues properties and allows for mass updates and re -appraisals. To comply with state statutes the assessing department has set a re -appraisal schedule that physically inspects all properties on the road system on a three-year cycle, and remote properties on a five-year cycle. In 2009 there were neighborhoods on the road system that had an assessed value to market value ratio as high as 95% while other neighborhoods were as low as 60% and at best and average in the upper 70 percentile. The first year of reassessment concentrated on the neighborhoods with the worst assessment ratios and as a result the Borough assessment ratio is averaging 90-92%. This translates to equity in taxation where all property owners are paying taxes based on parity. In 2010 the Borough saw a growth in assessed values of about $80,000,000 and 2011 is expected to show a growth of $50-60,000,000. This is despite the fact that an ordinance passed in 2010 eliminated business property tax for the first $20,000 of personal property assessed value. As a result, approximately three fourths of the total business property account shave been eliminated , reducing paperwork for both business owners and the Borough Assessing Department.. 18 19 Kodiak Island Borough Popular Annual Financial Report Property Taxes... Property tax is the largest source of revenue for the Kodiak Island Borough. In FY2010 the Borough realized revenues of $9,883,107 from general fund property taxes , which was 63% of all General Fund revenue collected. Property taxes are calculated by multiplying the assessed value of a parcel by the mill rate. A mill is''/,o of 1 percent (or .001). The mill rate of the Kodiak Island Borough remained level at 10.5 mills since FY2007 when it was reduced by % mill. The mill rate would have had to have been almost one mill higher to have balanced the budget. 12.00 10.00 8.00 6.00 4.00 2.00 0.00 Mill Rate - last ten years ti°°� ti°°p ti°°y ti°R6 ti°°^ ti°°� ti°& Kodiak Island Borough Popular Annual Financial Report Severance Taxes... Severance taxes are levied on resources harvested or "severed" from within the Borough. These taxes are determined by multiplying the mill rate ( tax rate) by the gross value of product harvested. 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 0 Fish Mining 0 Timber Severance taxes are collected in three categories: fish, which is seafood harvested and delivered to processors within the Kodiak Island Borough; mining, which may include gold and other ore (but is primarily gravel); and timber, which includes all logging operations within the Borough. Because the value of these resources depends on the market for these goods, prices tend to fluctuate and consequently, the taxes collected also vary from season to season. Fishing accounted for 98% of the Borough's severance taxes. It remained at virtually the same amount as FY2009. Logging is increasing in Kodiak again. There has been a great deal of new logging on the road system. 20 21 Assessed Taxpayer Value Ocean Beauty Seafoods Inc $ 16,237,441 It is interesting to note that Westward Seafoods, Inc 11,852,090 the ten largest taxpayers Alaska Communications Systems 11,645,093 International Seafoods of AK 10,879,502 paid 12% of the total Wal-Mart Real Est Bus Trust 9,987,787 property tax levy. Three of Brechan Enterprises Inc 9,569,530 the top four companies are Trident Seafoods Corp 9,028,842 seafood processing Mill Bay Plaza Assoc LTD 8,648,400 facilities. GCI 7,563,488 Koncor 6,797,500 Kodiak Island Borough Popular Annual Financial Report Severance Taxes... Severance taxes are levied on resources harvested or "severed" from within the Borough. These taxes are determined by multiplying the mill rate ( tax rate) by the gross value of product harvested. 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 0 Fish Mining 0 Timber Severance taxes are collected in three categories: fish, which is seafood harvested and delivered to processors within the Kodiak Island Borough; mining, which may include gold and other ore (but is primarily gravel); and timber, which includes all logging operations within the Borough. Because the value of these resources depends on the market for these goods, prices tend to fluctuate and consequently, the taxes collected also vary from season to season. Fishing accounted for 98% of the Borough's severance taxes. It remained at virtually the same amount as FY2009. Logging is increasing in Kodiak again. There has been a great deal of new logging on the road system. 20 21 Kodiak Island Borough Popular Annual Financial Report Education... Education is one of the mandated powers of the Borough. The Borough has given the School Board the authority and responsibility to operate the School District. Education accounts for 69% of the General Fund budget. The Borough spent and transferred $11,448,010 from the General Fund, Building and Grounds Fund, and the Debt Service Fund supporting the School District in FY2010. By far, the majority of all General Fund revenues fund the School District. More funds were spent on education than the Borough collected in property taxes. Cost per The number of Number of Students students has Womens Bay Service Area been steadily 2,900 13,863 2,800 decreasing since 2,700 FY2002. This has 2,00 been mainly due 2,5500 to the changing 2,400 demographics of W ai o 0 0 0 0 0 0 0 0 0 .� 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N Kodiak. The cost of education has continued to rise. Borough's Cost of Education 15,000,000 10,000,000 5,000,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N Much of this rise in cost is due to inflation but new Federal mandates such as the "No Child Left Behind" program have cost the School District (Borough) an immense amount of money. For more information you can go to http://www.kodiak.kl2.ak.us Kodiak Island Borough Popular Annual Financial Report Childcare... The Kodiak Island Borough administers a state financial assistance program which subsidizes the cost of child care for eligible low to moderate income families while parents work and/or attend school. The current funding for the program is under the State of Alaska, Department of Health and Social Services, Division of Public Assistance. The program has been a part of this division since 2005. There are 43 approved providers in Kodiak. 140 120 100 80 60 40 20 0 2007 2008 2009 2010 ■ Families ■ Children Road Service Maintenance and Repair... Womens Bay Road Service Area is continuing on a repair program focused on gravel road improvement and maintaining the existing asphalt surfaces. Bay View Road Service Area has added additional gravelling and compaction and directed proper crowns be maintained for better runoff on their roads. Monashka Bay and Womens Bay Road Service Areas qualified for FEMA Grants totaling approximately $225,000 associated with the October 2009 FEMA Disaster Declaration. This funding repaired and improved various road and drainage facilities. Additional funding is pending for other identified projects in these two areas 22 23 Miles of FY2010 Cost per Road Expenditures Mile Womens Bay Service Area 12 $ 166,361 13,863 Service Area No. 1 10 297,325 29,733 Monashka Bay Road Service Area 2 66,606 33,303 Bay View Road Service Area 1 12,541 12,541 22 23 Kodiak Island Borough Popular Annual Financial Report Health care... One of the Kodiak Island Borough's powers is health care. To this end, the Kodiak Island Borough has constructed and helped maintain the hospital and health care facilities through the years. Providence Health & Services operates the hospital and mental health center and leases these facilities from the Borough. Last year Thomson Reuters 100 Top Hospitals: Health System Benchmarks named Providence Health & Services among the top 20 percent of best -performing systems in the country. The study analyzed 255 U.S. health systems and showed that top systems, such as Provi- dence which serves our community, have a lower rate of mortality and complications and higher patient safety and quality of care. In 2010 Kodiak's hospital, Providence Kodiak Island Medical Center (PKIMC), received renewed accreditation from the Joint Commission—an organization that certifies hospitals for high levels of quality and patient safety. The hospital and its home health program had outstanding results on their triennial Joint Commission survey. PKIMC features 25 acute-care beds, including 4 birthing suites and 2 intensive care beds. The hospital is staffed by a mix of primary care physicians, surgeons and specialists who provide family practice, internal medicine, obstetrics, radiology, psychiatry, general and orthopedic surgery, in addition to a number of specialty clinics. The hospital offers a significant range of inpatient and outpatient services including emergency department, surgery, maternity, general medicine, physical therapy, diagnostics, pharmacy, respiratory therapy and home health care. In 2010, PKIMC performed a wide variety of health care procedures. Kodiak families welcomed 214 babies who were born at the hospital. There were 3,837 emergency room visits and 1,025 surgeries. The Specialty Clinic had 4,182 patient visits and procedures. Diagnostics included 42,189 in-patient lab and 81,631 out-patient lab procedures. Radiology completed 6,350 procedures, with 2,109 CT scans, and 647 Mills. Women's health procedures included 740 mammograms. There were 14,810 physical therapy procedures and 7,274 occupational therapy procedures. Home health provided 1,747 visits to patients in their homes. An on-site extended care facility, the Care Center, also provides 19 long-term care beds. In 2010 the Care Center won awards for quality and successfully passed a state survey. Care Center employees and leadership continued their culture change efforts to provide a more resident -centered and home -like environment for our elders. The mental health center, Providence Kodiak Island Counseling Center, offers counseling for all age groups, family and couples' therapy, mental health clinicians in the schools, case management for chronically mentally ill, medication management and outpatient chemical dependency treatment. Kodiak Island Borough Popular Annual Financial Report Community Development... The Community Development Department (CDD) is the Planning and Zoning Agency of the Borough. CDD provides staff support to the Planning and Zoning Commission and Parks and Recreation Committee. CDD staff also provides administrative support to the LEPC (Local Emergency Planning Committee). Planning staff serve as part of the General Staff under the ICS (Incident Command System). Department staff includes director, two associate planners, code enforcement officer and a department secretary. CDD is also charged with the enforcement and administration of the Borough's zoning code, comprehensive planning, coastal management planning, hazard mitigation planning, energy planning, parks and recreation planning and the removal of junk metals and vehicles and the subdivision of land. Answering questions from the public, agencies and other departments about the use and regulation of private and public land is a service that is provided. Meetings and projects completed in FY 2010 included: 14 Planning and Zoning Commission Work Sessions, 12 Regular and 2 special meetings 13 Parks and Recreation Committee meetings 5 LEPC Meetings 4 Presentations to the Rural/Regional Forum Case load for applications for Commission review included: 4 Variances 3 Conditional Uses 6 Rezones 18 Subdivisions & Other 245 Zoning Compliance Permits CDD involvement in other projects Updated of Titles 16 (Subdivision) and 17 (Zoning) Preparation of a Trails Master Plan Rural/Regional Forum (meeting with village representatives on items of interest) Projected projects that are on-going and are expected to be completed in FY 2011 include: Updated Hazard Mitigation Plans (all villages and the City of Kodiak) Kodiak Road System Trails Master Plan 24 25 Kodiak Island Borough Popular Annual Financial Report Fire Protection and Emergency Services... The Kodiak Island Borough has three fire protection service areas and two fire stations on the road system. They are Fire Protection Area No. 1, Womens Bay Service Area, and the Airport Fire Protection Service Area. The Bayside Fire Station is located in Fire Protection Area No.1 and provides fire and emergency medical services to the residents and visitors in the Monashka Bay area. The Bayside Fire Station has an ISO Class 4 rating. The Bayside Fire Station is staffed with one paid full time fire chief and 32 volunteer firefighters. The Bayside Fire Station has seven pieces of fire apparatus. The Bayside Fire Station responded to 146 calls for assistance and completed over 3,000 man hours of training in 2009. The Womens Bay Fire Station,located in the Womens Bay Service Area, provides fire and emergency medical services to residents and visitors of the Womens Bay area as well as the Airport Fire Protection Area. The Womens Bay Fire Station has an ISO Class 9 rating. The Womens Bay Fire Station is staffed with a volunteer fire chief and 15 volunteer firefighters. The Womens Bay Fire Station has four pieces of fire apparatus. The Womens Bay Fire Station responded to 26 calls for assistance and completed over 1,500 man hours of training in 2010. The Bayside Community Training Center (CTC) is part of the Bayside Fire Station and provides fire and emergency medical training to the local emergency responders. Bayside CTC is also an authorized Training Center for the American Safety and Health Institute and conducts several Basic First Aid and CPR classes and other community based emergency training classes. Together with the training sites at PKIMC and KANA, Bayside CTC trains over 500 people a year in Basic First Aid, CPR, and other courses. The Bayside Fire Station is also home to the Kodiak Area Radio Emergency Services (KARES). This is a volunteer organization of HAM radio operators that provides emergency communications and logistical support for area emergency services agencies. Kodiak Island Borough Popular Annual Financial Report Emergency Preparedness... Kodiak Island is located on the ring of fire with a string of volcanoes on the Alaska Peninsula just west of the island and a subduction zone (major earthquake generation zone) running offshore on the island's east side. We truly live in a dynamic environment prone to a number of potential natural and man made disasters. Past disasters that have shaped the island include: 1912 Mount Katmai ash fall blanketed the island with over 5 feet of ash in places, 1916 influenza that killed a number of Kodiak inhabitants, the 1964 Great Alaska Earthquake and Tidal Wave that destroyed a number of villages and communities around the island including the downtown area of the City of Kodiak, the 1972 Pillar Mountain rock slide that stopped the construction of the St. Herman Boat Harbor for decades and the 1989 Exxon Valdez Oil spill that impacted the fishing economy of the community and covered many shores on the island with thick heavy oil. The City of Kodiak, Kodiak Island Borough, and the US Coast Guard work together in a coordinated fashion to prepare, respond, and recover from these disasters. IT IS NOT A MATTER Kodiak School OF "IF" In 1912 the Katmai Volcano eruption covered Kodiak Island with 2 to 5 feet of ash. Be Prepared! The Kodiak Island Borough, City of Kodiak,and Alaska Division of Homeland Security/ Emergency Management have published the Kodiak Area Emergency Preparedness Guide that describes hazards, discusses the warning system that is in place (Tsunami Sirens), and tells how you can be proactive in preventing loss of life and property. It also explains how your family can be prepared for such events, what to consider, and who to contact. Take some time to look this document over. Ask questions, and be prepared before the next event happens. Build a survival kit for your family complete with water, food, first aid etc. You could be relying on your wits for a number of days before help comes. This emergency preparedness guide can be acquired from the Community Development Department. It is free. Take what you need, but need what you take. Call 1-907-486-9363. 26 27 Kodiak Island Borough Popular Annual Financial Report Geographic Information Systems (GIS)... The Borough continued to improve the amount and quality of GIS information available to the public in FY 2010. Through partnerships with Native Organizations, State of Alaska, US Fish & Wildlife Service and others, the Borough was able to acquire aerial imagery at very little cost. In one project, the Borough and others worked with the USDA-NRCS and obtained additional imagery valued at over $180,000 at no cost. The Borough's commitment to the Kodiak GIS User Group played a major role in the support of these acquisitions. The Borough sponsored the Kodiak GIS User Group's GIS Day 2009 in December. This event displayed presentations from federal and state agencies who had done GIS work in the Kodiak area. Subsequently, data from these projects has become available to the Borough and the public. The Borough continues to build new partnerships with GIS users and extend its relationships with new entities. FY2010 provided a chance to provide strategic planning for the future development of the Borough's GIS. This planning has outlined some of the future GIS projects that the Borough will be working on in the next few years. Pasagshak Bay, Kodiak Island, August 9, 2007 Imagery provided by Digital Globe ImageConnect Kodiak Island Borough Popular Annual Financial Report Statistical Information... Ratios of Outstanding Debt by Type Population Deposits in Local Banks Personal Income Per Capita Income School Enrollment Unemployment Rate 2000 13,309 111,670,000 373,164,000 27,328 2,810 13.4 2001 13,913 117,503,000 382,227,000 27,707 2,774 10.9 2002 13,565 123,221,000 381,413,000 28,783 2,821 18.2 2003 13,643 120,352,000 393,604,000 30,056 2,750 10.3 2004 13,817 130,325,000 408,069,000 31,791 2,677 10.6 2005 13,573 133,370,000 430,051,000 33,969 2,678 9.5 2006 13,693 141,434,000 469,161,000 35,860 2,718 6.7 2007 13,457 140,915,000 492,637,000 38,733 2,635 6.2 2008 13,568 139,416,000 n/a 41,617 2,671 9.3 2009 13,954 175,141,000 n/a n/a 2,598 8.2 2010 13,860 192,000,000 n/a n/a 2,567 8.8 Ratios of Outstanding Debt by Type 28 29 General Total Percent of Fiscal Obligation Notes Primary Personal Per year Bonds Payable Government Income Capita 2000 17,025,000 2,823,480 19,848,480 5.32% 1,419 2001 17,690,000 2,531,150 20,221,150 5.29% 1,453 2002 16,615,000 1,911,221 18,526,221 4.86% 1,308 2003 15,620,000 1,241,254 16,861,254 4.28% 1,215 2004 14,385,000 1,262,123 15,647,123 3.83% 1,133 2005 32,965,000 1,270,210 34,235,210 7.96% 21542 2006 31,155,000 1,582,188 32,737,188 6.98% 2,400 2007 29,060,000 1,636,924 30,696,924 6.23% 21273 2008 34,860,000 1,768,660 36,628,660 na 2,698 2009 32,245,000 1,864,503 34,109,503 na 2,551 2010 29,565,000 1,989,995 31,554,995 na 2,277 28 29 Kodiak Island Borough Popular Annual Financial Report General Administration... The Borough has several administrative functions that have to take place. These include management of the Borough, financial services, information services, clerical support of the Assembly, etc. In FY2010, the Borough Assembly held 18 regular meetings and 8 special meetings. 9 ordinances were passed along with 37 resolutions. Forty contracts were approved. The Clerk's office provided administrative support to all of the Assembly meetings. They took approximately 118 pages of minutes. They added 90 cubic feet of archival records into our records system and destroyed 88.5 cubic feet of records. The Finance Department collected $10,498,662 of FY2010 property taxes which was 92.8% of the tax roll. Severance taxes came in at $1,336,075 and the Borough received $6,295,838 in grants. The Borough also earned $1,519,327 in interest on our investments. The Borough received a Certificate of Achievement for our Comprehensive Annual Financial. Report, an award for Outstanding Performance in Popular Annual Financial Reporting and a Distinguished Budgetary Presentation Award for our budget. After Year End... Subsequent to year end of June 30, 2010 several important events took place. The first $8,000,000 of the 2010 $76,310,000 bond issue are scheduled to be sold on March 1, 2011. The Borough entered into a new contract with Alaska Waste to collect solid waste on the road system. Within the City of Kodiak Alaska Waste gave each resident a cart that works with their trucks for automated solid waste collection. The residents outside of the City must still take their refuse to a dumpster. Alaska Waste has also taken over the billing for solid waste on the road system. For more information you can go to WWW.Alaskawaste.net. On November 2, 2010 the voters in the State of Alaska approved a $128,500,000 bond issue which included $20,000,000 for the Alaska Department of Fish and Game Research Facility on Near Island. On October 4, 2010 the new enforcement officer position was filled. Kodiak Island Borough Popular Annual Financial Report Our Website... The Kodiak Island Borough maintains a website for convenient public access to local government. The homepage provides navigational links to information often requested «�. by the public as well as News and Announcements and a Calendar for current events. Visitors can find information— about public meetings that - ^ •- "" includes calendars, agendas, packets and minutes. Visitors can also research minutes from historical meetings such as the first Assembly meeting on October 12, 1963, Borough Code, and other permanent records, such as contracts, ordinances, resolutions, and newsletters. Many documents and reports are posted on the site. Copies of the Comprehensive Annual Financial Report, the budget, and fee schedule are all available on the Finance Department pages. Comprehensive plans and maps for communities and districts throughout the Borough are available on the Community Development Department pages. Reports such as seismic assessments on school buildings and the recent solid waste management study can also be viewed. Our site includes information on a variety of topics, such as: Boards, Committees and Commissions Elections and Job openings Planning and Zoning Landfill Operations, Road and Fire Services The Kodiak Fisheries Research Center Facility projects such as the school building upgrades Property and Severance Taxes In the works is an upgrade to property information which will include access to assessed values, property taxes and an improved Geographical Information System (GIS). To access this information and much more, please visit our website at www.kodiakak.us 30 31 Kodiak Island Borough PRSRTSTD US POSTAGE Finance Department PAID PERMIT 957 710 Mill Bay Road ANCHORAGE. AK Kodiak, AK 99615