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CAFR FY2002KODIAK ISLAND BOROUGH Comprehensive Annual Financial Report June 30, 2002 (With Independent Auditors' Report Thereon) Kodiak, Alaska Pat Carlson, Borough Manager Prepared by Finance Department Karleton Short, Finance Director Marian Royall, Revenue Accountant KODIAK ISLAND BOROUGH Table of Contents Page Introductory Section Elected Officials (Photographs) v Borough Officials vi Boards and Committees vii Map of Kodiak Island Borough ix GFOA Certificate of Achievement x Organizational Chart xi Letter of Transmittal xii Financial Section Independent Auditors' Report 1 General Purpose Financial Statements: Combined Balance Sheet — All Fund Types, Account Groups, and Discretely Presented Component Unit 3 Combined Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances — All Governmental Fund Types and Discretely Presented Component Unit 7 Combined Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances — Budget and Actual — General Fund, Special Revenue Fund, and Debt Service Funds 9 Combined Statement of Revenues, Expenses, Transfers, and Changes in Retained Earnings — Proprietary Fund Types 11 Combined Statement of Cash Flows — Proprietary Fund Types 12 Notes to Financial Statements 13 Additional Information Combining, Individual Fund and Account Group Financial Statements and Schedules: General Fund: Balance Sheets 36 Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances — Budget and Actual 37 Schedule of Expenditures and Transfers — Budget and Actual 39 i KODIAK ISLAND BOROUGH Table of Contents Special Revenue Funds: Combining Balance Sheet 43 Combining Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances (Accumulated Deficits) 47 Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances — Budget and Actual: Fire and Road Service Areas: Fire: Fire Protection Area No. 1 48 Womens' Bay Fire Department 52 Kodiak Airport Fire District 53 Road: Monashka Bay Road Service Area 53 Service District No. 1 54 Womens' Bay Service Area 55 Bay View Road Service Area 56 Service Area No. 2 57 Coastal Management 58 Child Care Assistance Program 59 Welfare to Work Program 60 L.E.P.C. 61 Land Sales 62 Buildings and Grounds 63 Woodland Acres Street Light Service Area 64 Kodiak Arts Council 65 Facilities 66 Tourism Development 67 Debt Service Funds: Combining Balance Sheet 68 Combining Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances 69 Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balance — Budget and Actual: Education and Health 70 Other 71 IF KODIAK ISLAND BOROUGH Table of Contents Capital Project Funds: Combining Balance Sheet Combined Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Schedule of Capital Projects Enterprise Funds: Combining Balance Sheet Combining Statement of Revenues, Expenses, Transfers, and Changes in Retained Earnings (Accumulated Deficits) Combining Statement of Cash Flows Municipal Solid Waste Collection and Disposal Fund: Balance Sheets Statement of Revenues, Expenses, Transfers, and Changes in Accumulated Deficits — Budget and Actual Statements of Cash Flows Hospital Facilities Fund: Balance Sheets Statement of Revenues, Expenses, Transfers, and Changes in Retained Earnings — Budget and Actual Statements of Cash Flows 911 Services Fund: Balance Sheets Statement of Revenues, Expenses, Transfers, and Changes in Retained Earnings — Budget and Actual Statements of Cash Flows Kodiak Fisheries Research Center Fund: Balance Sheets Statement of Revenues, Expenses, Transfers, and Changes in Retained Earnings — Budget and Actual Statements of Cash Flows 72 73 74 76 77 78 79 80 81 82 83 84 i i in I I KODIAK ISLAND BOROUGH II Table of Contents General Fixed Assets Account Group: Schedules of Fixed Assets by Source 91 Schedule of General Fixed Assets by Function and Activity 92 Schedule of Changes in General Fixed Assets by Function and Activity 93 ' General Long -Term Debt Account Group: Schedules of Long -Term Debt 94 ' Additional Information — Bonded Indebtedness: Summary of Bonded Debt Service Requirements to Maturity 95 General Obligation Bonds, 1993 Series A 96 General Obligation Bonds, 1994 Series A 97 General Obligation Refunding Bonds, 1998 Series A 98 General Obligation Bonds, 2000 Series E 99 1 General Obligation Bonds, 2000 Series F 100 Statistical Section ' Statistical Tables: General Governmental Expenditures and Other Uses by Function — Last Ten Fiscal Years 101 General Revenues by Source — Last Ten Fiscal Years 102 Property Tax Levies and Collections — Last Ten Fiscal Years 103 Assessed and Estimated Actual Value of Taxable Property — Last Ten Fiscal Years 104 Property Tax Rates and Contributions to the School District Last Ten Fiscal Years 105 Ten Largest Property Taxpayers 106 1 Ratio of Net General Bonded Debt — Last Ten Fiscal Years 107 Computation of Direct and Overlapping Debt 108 Computation of Legal Debt Margin 109 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures and Transfers — Last Ten Fiscal Years 110 Demographic Statistics — Last Ten Fiscal Years 111 Property Value, Construction and Bank Deposits — Last Ten Fiscal Years 112 Miscellaneous Statistical Data — Last Ten Fiscal Years 113 MAYOR AND ASSEMBLY MEMBERS Robin Heinrichs Deputy Mayor, At Large, 2004 Gabrielle LeDoux Mayor, 2004 Tom Abell At Large, 2002 Shawn (Tuck) Bonney At Large, 2002 Pat Branson At Large, 2004 Greg Razo At Large, 2003 Wayne Stevens At Large, 2003 v Darlene Turner At Large, 2002 � I � I � I 11 I I l ' KODIAK ISLAND BOROUGH Kodiak, Alaska Borough Officials Year Ended June 30, 2002 BOROUGH ASSEMBLY Tuck Bonney `02 Robin Heinrichs (Deputy Mayor) `04 Wayne Stevens `03 BOROUGH MAYOR Gabrielle LeDoux `04 Patrick Carlson .......................................................................................... ............................... Borough Manager Karleton G. Short ................................................ ............................... ........................Finance Director/Treasurer Tom Abell `02 .....................Engineering and Facilities Director Patricia Branson `04 ........................Borough Clerk Greg Razo `03 ......................Community Development Director Darlene Turner `02 l ' KODIAK ISLAND BOROUGH Kodiak, Alaska Borough Officials Year Ended June 30, 2002 BOROUGH ASSEMBLY Tuck Bonney `02 Robin Heinrichs (Deputy Mayor) `04 Wayne Stevens `03 BOROUGH MAYOR Gabrielle LeDoux `04 Patrick Carlson .......................................................................................... ............................... Borough Manager Karleton G. Short ................................................ ............................... ........................Finance Director/Treasurer Bud Cassidy .............................................. ............................... .....................Engineering and Facilities Director Judith A. Nielsen, CMC .......................................................... ............................... ........................Borough Clerk Duane Dvorak .......... ............................... .. ............................... ......................Community Development Director Geoff Mould ............................................................................................................. ............................... Assessor Robert Himes ..................................................................................... ............................... Assistant Fire Chief Jamin, Ebell, Schmitt & Mason .................................. ............................... Borough Attorney (Contracted Firm) B etty Walters ....................................................... ............................... ................. Superintendent, School District Michelle ..................................................................................... ............................... General Accountant Marian Royall ........................................................................................ ............................... Revenue Accountant Laurie Whiddon .................................................................... ............................... .....................Purchasing Agent Vi School Board * Norm Wooten Roy Brown Jeff Stephan Barry Still Elizabeth Odell Mike Woolard, USCG Rep. Greg Razo — Assembly Rep. Tuck Bonney — Assembly Rep. Sheila Roberts - Staff Rebecca Moore, Student Rep. Betty Walters, KIBSD, ex- officio Hospital & Health Facilities Advisory Board INACTIVE Mental Health Center Advisory Board INACTIVE Planning and Zoning Commission * Clarence W. Selig John J. "Jake" Ketscher Barbara Williams Robert Lindsey Reed Oswalt Cheryl Boehland Duane Dvorak, KIB Staff Woodland Acres Street Lighting Service Area Advisory Board VACANT Citizens Board of Equalization * Jim Carmichael Tim Hurley Cheryl McNeil Carrie Morton Jim Nagan Michael Machulsky, Alternate Geoff Mould, KIB staff Judi Nielson, KIB staff Parks and Recreation Committee Peggy Dvorak Patrick Saltonstall Mike Sirofchuck Hans Tschersich Vincent Walser Tuck Bonney, Assembly Rep. Cheryl Boehland, P &Z Rep. Wayne Biessel, State Rep., ex- officio Ian Fulp, City Rep., ex- officio Erin Whipple, KIB Rep Rebecca Moore, Student Rep. Building Code Board of Appeals (Architectural Review Board) Scott Arndt Jenrol Friend Gregg Hacker Charles Jerling Jay Johnston Ted Wade Robin Heinrichs, Assembly Rep. Bob Tucker, KIBSD Rep., ex- officio Roy Brown, School Board Rep., ex officio Barry Still, School Board Rep, ex officio Bud Cassidy, KIB Rep., ex- officio Personnel Advisory Board Susan Eoff Bill King Linda Moore Ted Wade Diane Deshazo Lauri Whiddon, KIB staff Data Processing Steering Committee Pat Carlson Gabrielle LeDoux Karleton Short Betty Walters Dave Jones Betty Walters Fire Protection Area No. 1 Advisory Board * Scott Arndt Eric McFarlin Roy Aguirre Jeff Halcomb Cliff Davidson Robert Himes, ex- officio Sharon Lea Adinolfi, KIB staff Bay View Road Service Area Advisory Board Dawn Black Gale Hagemeyer Reed Oswalt Fred Roberts James Schauff Service Area No. 2 Commission INACTIVE Vii INTRODUCTORY SECTION Service Area No. 1 Advisory Board * Robert Greene Kevin Arndt Scott Arndt Ed Mahoney Kaye McClain Jennifer Spencer Richard Walker Kodiak Area Transit System Committee INACTIVE Viii Womens Bav Service Area Advisory Board * Mike Wilchek Fred Waltman, II David Conrad Linda Estes Edward Gondek Linda Hinson Chris Lynch Dale L. Rice, ex- officio Airport Advisory Committee * Stosh Anderson Charles Barber Dean Andrew Bill King Murphy Fortier Penny Jordahl Bob Stanford Wayne Stevens Justin Vincent John Chya, ex- officio CDR Jim Poyer, USCG ex- officio Borough Clerk's Office, KIB staff Airport Fire Protection District Advisory Board Michael Machulsky Arlene Mauldin Rene Sy * Indicates chair Monashka Bay Road Service Area Advisory Board * Dave Sundberg Alayne Larsen Darlene Turner Jeff Hamer ' Jack McFarland Emergency Services Organization Pat Carlson, Borough Manager ' Gabrielle LeDoux, Borough Mayor Carolyn Floyd, City Mayor Linda Freed, City Manager, City of Kodiak Capt. Robert Lachowsky, USCG Capt. Darrel Nelson, USCG Sgt. Maurice Hughes, Alaska State Troopers Service Area No. 1 Advisory Board * Robert Greene Kevin Arndt Scott Arndt Ed Mahoney Kaye McClain Jennifer Spencer Richard Walker Kodiak Area Transit System Committee INACTIVE Viii Womens Bav Service Area Advisory Board * Mike Wilchek Fred Waltman, II David Conrad Linda Estes Edward Gondek Linda Hinson Chris Lynch Dale L. Rice, ex- officio Airport Advisory Committee * Stosh Anderson Charles Barber Dean Andrew Bill King Murphy Fortier Penny Jordahl Bob Stanford Wayne Stevens Justin Vincent John Chya, ex- officio CDR Jim Poyer, USCG ex- officio Borough Clerk's Office, KIB staff Airport Fire Protection District Advisory Board Michael Machulsky Arlene Mauldin Rene Sy * Indicates chair ARCTIC OCEAN N BARROW PRUGHOE BAY n� ZINKI ODIAK /KARLUK E HINAK AKHIOK a� s KODIAK ISLAND Q BOROUGH � 1 c � NOME O� NORTON SOUR O !UE— A' ARCTIC CIRCLE _ — CANADA FAIRBANKS ALASKA Iv VALDEZ GULF OF ALASKA KODIAK ISLAND HETHEL H v DILLINGHAM BRISTOL BAY o ro NORTH PACIFIC OCEAN r-- r-- r- r M M M M M M M "" P" F" IF Certificate of Achievement for Excellence in Financial Reporting Presented to Kodiak Island Borough, Alaska For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2001 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. UNTEO STATES y n AND GNADA ° CDWMTVN President = S S CXICAiA Executive Director X � �.. rr r rr rr rr r rr �r rrX' r r rr rr rr r rr ��.� t _. � I Ii "�JI1I, 1�� 1,`:� Il J 13�J.��'C� r �� ��I -`� �'i ,�'` / t f � ) r ) 1 ,T ] 1�r64 T ;i11'.t /.:i /;�`�y1� �.��1,����� ELECTORATE * *� �► wr /► � � �++ BOROUGH BOROUGH 1SLA ND _ MAYOR ASSEMBLY BOROUGH BOROUGH BOROUGH BOROUGH MANAGER ATTORNEY CLERK ADMINISTRATIVE DEPUTY ASSISTANT CLERK ARTS COUNCIL DIRECTOR ASSISTANT ASSISTANT FIRE CHIEF CLERK COMMUNITY ENGINEERING FINANCE /MI5 DEVELOPMENT FACILITIES ASSESSOR DIRECTOR DIRECTOR DIRECTOR KFRC MAINTENANCE ASSOCIATE MAINTENANCE WORKER ENGINEER PROPERTY PLANNER APPRAISER REVENUE GENERAL SENIOR SYSTEMS ACCOUNTANT ACCOUNTANT ANALYST KFRC SECRETARY III ASSOCIATE RECEPTIONIST ASSESSMENT PLANNER CLERK It CASHIER ACCOUNTING OPERATIONS BALER /LANDFILL TECH /PAYROLL SUPERVISOR DRAFTING SUPERVISOR ASSESSMENT TECHNICIAN CLERK I ACCOUNTING LAN BALER TECH /ACCTS. PAYABLE ADMINISTRATOR OPERATOR II SECRETARY III SECRETARY III BALER CHIlO CARE ASSISTANCE OPERATOR I ADMINISTRATOR BALER OPERATOR I BALER OPERATOR I � �.. rr r rr rr rr r rr �r rrX' r r rr rr rr r rr ��.� t _. � I Kodiak Island Borough Finance Department 710 Mill Bay Road Kodiak, Alaska 99615 Phone (907) 486 -9323 Fax (907) 486 -9392 October 31, 2002 To the Honorable Mayor and Members of the Assembly Kodiak Island Borough Kodiak, Alaska The comprehensive annual financial report (CAFR) of the Kodiak Island Borough (Borough), Kodiak, Alaska, for the fiscal year ended June 30, 2002, is submitted herewith. The Borough Finance Department prepared this report. Responsibility for the accuracy, completeness, and fairness of presentation, including all disclosures, rests with the Borough. We believe the data, as presented, is accurate in all material respects, is presented in a manner designed to fairly set forth the financial position and results of operations of the Borough as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain maximum understanding of the Borough's financial affairs have been included. This comprehensive annual financial report is presented in three main sections: introductory, financial, and statistical. The introductory section includes background on the Borough, the fund accounting concepts used by the Borough, and some financial presentations. The financial section includes the report of the independent accountants, combined financial statements, notes to combined financial statements, and the more detailed combining and individual financial statements and schedules. The statistical section includes selected financial and general information generally presented on a ten -year comparative basis. All funds and account groups of the Kodiak Island Borough are included in this financial report, as well as the component unit of the Borough, the Kodiak Island Borough School District. GENERAL INFORMATION 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. The Borough was incorporated September 30, 1963, as a Second Class Borough by Chapter 146 Sessions, Laws of Alaska 1961, as amended. The powers granted to the Borough include area -wide powers and non area -wide powers. Area -wide powers are health, education, assessment and collection of taxes for both the Borough and cities within the Borough, planning and zoning, and general administrative services. Non area - wide powers include parks and recreation, economic development, solid waste disposal, and animal control. Service districts within the Kodiak Island Borough provide fire protection, road maintenance and construction, and street lighting. A Mayor /Manager form of government governs the Borough. The Mayor is elected at large while the Borough Assembly appoints the Manager. The Assembly is composed of seven members who are elected at- large. xii The criteria used in determining the reporting entity are consistent with the Codification of Governmental Accounting and Financial Reporting Standards Section 2100, "Defining the Reporting Entity ". Based on these criteria, the various funds and account groups (being all the funds and account groups of the Borough) shown in the Table of Contents are included in this report.. ECONOMIC CONDITION AND OUTLOOK Economic Sectors The major economic sectors of the Borough are commercial fishing, logging, and tourism. Being located in the Gulf of Alaska and the North Pacific Ocean places the Kodiak Island Borough near some of the richest fishing grounds in the world. In 2001, Kodiak was ranked third among commercial fishing ports in the United States in terms of value of seafood landed. Additionally, Kodiak is Alaska's largest fishing port, homeport to more than 700 commercial fishing vessels. The major sector of the Kodiak economy is, by far, commercial fishing, accounting for ninety -three percent of the severance tax revenue collected and more than half of the jobs in Kodiak. According to the National Marine Fisheries Service, 285.5 million pounds of fish were landed at the Port of Kodiak in 2001 with an ex- vessel value of 74.4 million dollars. In 2000, 280.8 million pounds were landed with an ex- vessel value of 94.5 million dollars. The severance tax revenue collected for timber in fiscal year 2002 was $46,007. This decreased from fiscal year 2001's collection of $56,019. This decrease is due to the economy in Asia and Japan. These two markets are the main customers of Alaskan timber. The domestic market is not an option because of U.S. shipping laws. To sell to the domestic market, American shipping companies must be used. This drives up the price of Alaskan timber, making the domestic market unprofitable. xiii Number of ounds cau ht 2001 2000 Total for year 285,500,000 Total for year 280,883,189 Percent Ranking by Percent Ranking by Species Pounds of total $ per pound Species Pounds of total $ per pound pollock 90,766,588 32% 5 Pollock 102,229,713 36% 3 salmon 78,819,439 28% 8 salmon 64,936,708 23% 10 pacific cod 54,670,560 19% 9 pacific cod 61,800,000 22% 9 rock sole 11,351,146 4% 7 halibut 10,191,805 4% 7 Total 235,607,733 83% Total 239,158,226 85% The severance tax revenue collected for timber in fiscal year 2002 was $46,007. This decreased from fiscal year 2001's collection of $56,019. This decrease is due to the economy in Asia and Japan. These two markets are the main customers of Alaskan timber. The domestic market is not an option because of U.S. shipping laws. To sell to the domestic market, American shipping companies must be used. This drives up the price of Alaskan timber, making the domestic market unprofitable. xiii Exvessel value 2001 2000 Total for year $ 74,400,000 Total for year $ 94,474,400 Percent Ranking by Percent Ranking by Species Exvessel value of total $ per pound Species Exvessel value of total $ per pound salmon 18,845,728 25% 8 salmon 24,030,302 25% 8 pacific cod 15,854,463 21% 9 pacific cod 23,146,998 25% 11 pollock 12,707,322 17% 5 Pollock 21,500,000 23% 17 halibut 8,437,310 11% 15 halibut 8,720,096 9% 3 Total $ 55,844,823 75% Total $ 77,397,396 82% The severance tax revenue collected for timber in fiscal year 2002 was $46,007. This decreased from fiscal year 2001's collection of $56,019. This decrease is due to the economy in Asia and Japan. These two markets are the main customers of Alaskan timber. The domestic market is not an option because of U.S. shipping laws. To sell to the domestic market, American shipping companies must be used. This drives up the price of Alaskan timber, making the domestic market unprofitable. xiii The tourism industry in Kodiak is seasonal; 76% of our visitors are here during the summer months. Tourists come to our island to enjoy the beauty of the island through hunting, hiking, camping, and fishing. They also come for the history, the culture and the wildlife that is abundant throughout Kodiak. According to the Alaska Visitor Statistics Program, visitors to Kodiak tend to stay longer than the average visitor to the state and are significantly more likely to be repeat visitors. These visitors tend to spend more than twice as much as the average visitor to other regions in Alaska. In 2002, Visitors to Kodiak Island Borough generated an estimated $153,000 in transient accommodations tax revenue and brought in an estimated $19 million in total revenues. Employment The labor force in Kodiak is dominated by the fishing industry. For the calendar year 2001, approximately 31% of the workforce was employed in the fish harvesting area. The U. S. Coast Guard and other government entities made up 20% of the workforce. Retail and wholesale sectors were 17 %, the service sector was 21 %, and the remaining 11 % was made up of construction, transportation, communication, utilities, financial services, insurance and real estate. Employment varies throughout the year with July, August, and September being the peak months due to the increased activity in the fisheries and related businesses, and then declines in November and December when fishing quotas are reached. The unemployment rate as of June 30, 2002 was 14.9% percent compared to 10.4 percent in 2001 and 12.8 percent in 2000. Throughout fiscal year 2002, the unemployment rate has fluctuated from 4.7% to 14.9°/x, with an average of 8.9 %. Population The estimated population of the Kodiak Island Borough for fiscal year 2002 is 13,913. Kodiak Island Borough ranks seventh in population when compared to other boroughs and unified municipalities throughout the state. The City of Kodiak is the eighth largest city in the state of Alaska. Kodiak is the home to the United States Coast Guard's largest facility. Among the various Coast Guard operating and support commands, there are approximately 1,200 military and civilian personnel and 1,600 military dependents. MAJOR INITIATIVES In preparing the fiscal year 2002 budget, the Kodiak Island Borough identified several major projects to be addressed during the year. All major projects are listed in Exhibit D -3 of the comprehensive annual financial report. No new significant capital projects were started or expanded in fiscal year 2002. ACTIVITY SERVICE EFFORTS AND ACCOMPLISHMENTS The Borough provides a variety of services including education, health, solid waste collection and disposal, planning and zoning, public improvements, and general administration. The Borough provides for education through the Kodiak Island Borough School District, a component unit of the Kodiak Island Borough. In order to provide adequate health care, the Borough has leased the Hospital and Care Center to Providence of Alaska Medical Center. Providence of Alaska also took over operating the Mental Health Center from the Borough January 2, 1998. The Borough provides for solid waste collection and disposal by contracting collection services through an outside source while operating the landfill. The Borough has four road service areas, three fire protection areas, and one street light service area. xiv The Borough contracts with the City of Kodiak for building inspection services for building outside the city limits. In fiscal year 2002, 220 building permits were issued with a value of $11,934,322. The number of permits decreased by eleven over 2001, along with a decrease in value of $947,155. FINANCIAL INFORMATION DISCUSSION OF CONTROLS Management is extremely aware of the importance of a strong internal control structure. Although present controls are considered to be highly satisfactory and adequate, they continue to be scrutinized periodically for enhancements. Internal Controls The Borough's accounting system depends upon a strong system of internal controls. The Borough Finance Department focuses on all aspects of internal control. The Borough Finance Department wants to ensure the safeguarding of Borough assets and the delivery of reliable and accurate financial information. Duties are segregated as much as possible in a small office, which limits individual control over any one area. Internal control policies are reviewed at least annually and documented to reflect any procedural changes that are deemed necessary. Cross training and segregation of duties are considered valuable in the internal control structure. Budgetary Controls The Borough uses the modified accrual basis of accounting for governmental funds and the accrual basis for enterprise funds. Under the modified accrual basis of accounting, revenues are recognized when measurable and available and expenditures are recognized when incurred. Budgetary control is maintained by an annual appropriation system supplemented with an additional appropriation approximately halfway through the fiscal year. Budgetary control is also maintained through the use of an encumbrance system. As purchase orders, contracts, and other obligations are issued, corresponding amounts of appropriations are reserved by the use of encumbrances so that appropriations will not be overspent. A public hearing and the adoption of a budget ordinance appropriates all new funds. The Assembly makes appropriation transfers between funds and /or departments only after the adoption of an ordinance. Borough staff may execute transfers between line items within a department. GENERAL GOVERNMENT FUNCTIONS The following charts summarize General Fund revenues for the fiscal year ended June 30, 1993 compared to the fiscal year ended June 30, 2002. This chart includes General Fund revenues only. Fiscal Year 1993 Fiscal Year 2002 Investment Income 4°% Licenses, Permits, Fees and C 6% Intergovernmental 28°% Severance lazes 10% Property Taxes 52% Investment Income 2% Licenses, Permits, Fees ar 2 Intergovemmenta 28% Severance Ta; 6% Property Taxes 62% xv ' The following from the for General Fund schedule summarizes changes prior year revenues: Increase (Decrease) Revenue Sources 2002 2001 Amount Percent Property Taxes $ 7,289,280 $ 7,280,951 $ 8,329 0.1 Severance Taxes 728,064 854,233 (126,169) (14.8) Intergovernmental 3,397,240 2,135,483 1,261,757 59.1 Licenses, Permits, Fees and Other 236,758 140,074 96,684 69.0 Investment Income 294,677 583,633 (288,956) (49.5) ' Total * $ 11,946,019 $ 10,994,374 $ 951,645 8.7 This percentage is the change in overall totals, not the column. Property tax is the largest source of revenue for the General Fund of the Kodiak Island Borough. The minor increase in property tax is solely based on appraised value; there was no mill rate increase for fiscal year 2002. Severance tax revenues decreased from $854,233 in fiscal year 2001 to $728,064 in fiscal year 2002. The tax related to the fishing industry decreased by $116,621 and the severance tax on timber decreased by $10,012. The decrease in the fish tax is due to the limitations on fishing near Stellar Sea Lions habitat and lower prices being paid for fish. The increase in intergovernmental revenue is due to two payments from the federal government for payment in lieu of taxes (PILOT). Historically, the federal government remits PILOT in September. This payment is based on the tax amount for the previous fiscal year. In June 2002, the federal government decided to match up PILOT payments for municipalities; remitting the payment in the same fiscal year that it is due. This decision created an extra receipt of PILOT in June in the amount of $ 685,121. The federal government will continue to remit payment for PILOT in June of each year. Licenses, permits, fees and other revenue sources had an increase of $96,684 due to two separate sources. We received $69,687 from Southwest Alaska Municipal Conference ( SWAMC). SWAMC received approximately $29 million from the federal government to distribute amongst fishing communities and fishermen to help offset the financial impact of the federal restriction of fishing near areas of sea lion habitat areas. The other source was the receipt of $38,064 from the State of Alaska for proceeds from class action suit against Bank of America for negligence in bond redemption activities. The Borough had less investment income in fiscal year 2002 due to poor interest rates. The following chart compares General Fund expenditures and operating transfers by function for the years ending June 30, 1993, and June 30, 2002: Year End June 30, 1993 Year End June 30, 2002 Community Development 11% Culture and Recreation 6% Education 5% Health and Sanitation 16% Public Safety 3% General Government 59% Community Development, 4% Culture and Recreation 1% i49 Education 68% General Government 24% Public Safety 1% Health and Sanitation 2% xvt It is the goal of the Kodiak Island Borough to maintain a General Fund balance of at least 1 to 2 million dollars. The fund balance as of June 30, 2002 was $2,838,837. This is $1,419,159 more than the June 30, 2001 balance of $1,419,678. The following table reflects the fund balance of the General Fund at the close of business for the past ten fiscal years: General Fund Balance Last ten fiscal years 3,500,000 3,000,000 2500,000 2,000,000 1,500,000 1,000,000 500,000 PROPRIETARY OPERATIONS In fiscal year 2002, the Municipal Solid Waste Fund had operating loss of $51,284, compared to last year's operating income of $8,444. The net loss for fiscal year 2002 was $125,273; this is decrease of $214,438 from last year. This loss is due to the recognition of interest payable on the State of Alaska loan to expand the landfill and the loss of intergovernmental revenue. On April 22, 1997 the Kodiak Island Borough leased the Kodiak Island Hospital to Providence Health System in Alaska. The Hospital Facilities Fund accounts for the bonded debt related to the construction of the hospital addition. The main source of revenue is the monthly lease payment of $60,000. The hospital also receives a portion of state revenue sharing. Their portion for fiscal year 2002 was $39,617, a $290 reduction from fiscal year 2001. Their lease stipulates that profits will be shared with the Borough on an equal basis, with the maximum amount in one year of $600,000, but Providence will absorb losses. The Borough received $486,360 for gain on operations, an $113,628 increase from fiscal year 2001. The 911 Service Fund was established to collect money in order to pay for installation and maintenance on an automatic call out system for emergency services. The Borough receives seventy -five cents per phone line that is billed within the vicinity of the City of Kodiak. The billing is done by the phone company and then remitted to the Borough. The Borough, in turn, sends the money to the City of Kodiak for the 911 - service equipment that has been installed at the police station. This system allows for location of the caller, even if the caller is unable to speak. The Kodiak Fisheries Research Center (KFRC) became operational in October 1998. The Center is home to the National Oceanic and Atmospheric Administration, (NOAA), Alaska Department of Fish and Game, and the xvii 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 '1 t University of Alaska — Fairbanks. The source of income for KFRC is lease payments. The major contributor in rent is NOAA. The center was developed as a multi- agency research facility committed to the preservation of the North Pacific marine ecosystem and resources. The Borough maintains the building, pays all expenses, and manages the interpretive center in the building as a public display area. FIDUCIARY OPERATIONS ' The Kodiak Island Borough handles all fiduciary activity regarding the collection of Public Employees Retirement System (PERS) payments, property tax collected on behalf of the City of Kodiak, and payroll taxes, with the same care and due diligence that we exercise with any of our funds. All monies due are withheld, collected, accounted for, and remitted promptly. ' Periodically, the State of Alaska informs each participating entity of the PERS of changes in employee and employer contribution rates. Amounts are budgeted, withheld, and remitted accordingly. Annually the State of Alaska PERS revises the actuarial assumptions. When such occurrence creates a deficiency, that amount is paid within the period of notification or when a subsequent budget is adopted. The Borough administers property tax collections for all governmental entities within the Kodiak Island Borough. For service areas within the Borough, the revenue is recognized in that area's particular fund. Property taxes collected for the City of Kodiak are remitted monthly for the amount collected the previous month. All other fiduciary collection activity (i.e., federal withholding, FICA, insurance, pension fund, etc.) is accounted for and promptly remitted to the agency involved. DEBT ADMINISTRATION $3,680.000 1,030.000 9,445,000 1,365,000 1,095.000 101,247 52.083 Total $16,768330 State of Alaska Statutes and the Kodiak Island Borough Code do not establish a legal debt margin. The voters of the Kodiak Island Borough ultimately determine the amount of debt that can be outstanding. The Borough has an eight million - dollar revenue bond authorized but not issued. Currently it is shown as an interfund receivable /payable between the Kodiak Fisheries Research Center and the Facilities Fund. General Obligation, 1993 General Obligation, 1994 General Obligation, 1998 General Obligation, 2000 E General Obligation, 2000 F Moody's Investors Standard Service and Poors Fitch's Aaa AAA Aaa AAA AAA AAA Aaa AAA Aaa AAA xviii Summary of debt principal outstanding at fiscal year end was: General Obligation, 1993 General Obligation. 1994 General Obligation, 1998 General Obligation, 2000 E General Obligation, 2000 F State of Alaska, ADEC Loans Environmental Protection Agency Loan $3,680.000 1,030.000 9,445,000 1,365,000 1,095.000 101,247 52.083 Total $16,768330 State of Alaska Statutes and the Kodiak Island Borough Code do not establish a legal debt margin. The voters of the Kodiak Island Borough ultimately determine the amount of debt that can be outstanding. The Borough has an eight million - dollar revenue bond authorized but not issued. Currently it is shown as an interfund receivable /payable between the Kodiak Fisheries Research Center and the Facilities Fund. General Obligation, 1993 General Obligation, 1994 General Obligation, 1998 General Obligation, 2000 E General Obligation, 2000 F Moody's Investors Standard Service and Poors Fitch's Aaa AAA Aaa AAA AAA AAA Aaa AAA Aaa AAA xviii As of June 30, 2002, net per capita bonded debt is $1,162. For comparison purposes, the following is the net per capital bonded debt for the past ten years: General Bonded Debt Per Capita Last ten fiscal years $1,800 $1,600 $1,400 - $1,200 - $1,000 - $800 - $600 - $400 298 $2 $0 1993 1,560 1,515 1,502 1,393 1994 1995 1996 1997 1,381 1,341 1,198 1,236 1,162 6W L 1998 1999 2000 2001 2002 CASH MANAGEMENT Effective cash management is essential to the long -term stability and profitability of any organization. Day -to- day cash management is considered a priority within the Borough, and we utilize proper monitoring procedures for timely receipt and deposit of all funds. INVESTMENT POLICIES The Borough Finance Director is the central treasurer for all Borough funds. This includes both the Borough and School District. The Borough uses a cash pool concept in which all funds are self - balancing. Each fund is a unique entity and has its own cash account, which, on occasion, may show a "book overdraft" while others have an excess of cash. In this manner, the Borough is able to fully invest all idle funds without creating a "bank overdraft ". Deposits are made daily and all idle funds are invested on the following day. The Borough recognizes that there is frequently some exposure to uninsured and u ncol lateral ized deposits. To offset this exposure the Borough requires its local servicing bank to purchase investments as collateral to cover the cash amount in the "sweep" account. The minimum amount of collateral required is $4,000,000. This collateral is purchased in the Borough's name and the collateral must increase if the cash balance exceeds the $4,000,000. Great strides have been made in minimizing this exposure through increased collateral and selection of banks and brokers with additional insurance. A local servicing bank "sweeps" the total balances to another account on a daily basis. At this time $10,960,000 of Kodiak Island Borough Ambac insured bonds collateralize this account. A third -party bank, Deutsche Bank, holds this collateral. All new investments are purchased on a delivery versus payment system. This means that when the Borough purchases a new instrument, such as a Treasury bill or an agency note, our servicing bank pays for the instrument when it is delivered to them. After delivery, the servicing bank will hold and account for all investments. Management feels that this is the safest way of holding our investments. The Borough's investment policy is far more restrictive than that of many governments. The operational parameters are defined in Title 3, Chapter 4, of the Borough Code. Basically, it states that we invest only in high -grade securities that are fully collateralized and /or insured. Further, a third -party bank, Deutsche Bank, holds all investments and collateral. xix During the past year, the investments of the Borough have fluctuated between $28.8 and $39.1 million. Interest rates for our fiscal year started at 3.71 percent to 7.00 percent in early July 2001. At year -end, investments were earning from 1.91 percent to 7.00 percent for an average yield of 4.45 percent. We ended the year with investment earnings for all funds in the amount of $ 1,578,413. RISK MANAGEMENT "Risk management" is a term used to describe those activities practiced by managers to minimize or control exposure to potential losses. Mention the word "risk management" and most people think of insurance, which is the traditional method used to manage risks. Insurance provides financial protection against accidental loss but cannot prevent losses. However, by managing exposure, we can prevent unexpected losses. The Kodiak Island Borough has increased risk management activities as a result of several factors, one being 1 the increased state and federal regulations related to this issue. We have a Safety Committee that meets monthly and discusses the accident prevention program and develops loss prevention policies in an effort to manage risk exposure. Several areas of concern are now addressed including hazardous material management, blood borne pathogens, sexual harassment awareness, accident prevention, ergonomics, and evaluation of work environments to prevent cumulative trauma. The Borough presents training to employees to address these and other issues as part of the accident prevention program, an integral component of an effective risk management program. OTHER INFORMATION INDEPENDENT AUDIT The Borough Code requires an annual audit to be made of the books of account, financial records, and transactions of all administrative departments of the Borough. We have complied with this requirement and the auditors' opinion has been included in this report. The Alaska Statutes require single audits and define these requirements in 2 AAC 45.010. The Borough also complies with the "Federal Single Audit Act of 1984" as amended by the "Single Audit Act Amendments of 1996 ", and the "Drug -Free Workplace Act of 1988." AWARDS GOVERNMENT FINANCE OFFICERS ASSOCIATION CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Kodiak Island Borough for its comprehensive annual financial report for the fiscal year ended June 30, 2001. The Certificate of Achievement is a prestigious national award - recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. ' Such a report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The Borough has received a Certificate of 1 Achievement for the last fourteen consecutive years (fiscal years ended 1988 - 2001). We believe our current report continues to conform to the Certificate of Achievement Program requirements, and we are submitting it to the Government Finance Officers Association. XX GOVERNMENT FINANCE OFFICERS ASSOCIATION DISTINGUISHED BUDGET PRESENTATION AWARD I The Government Finance Officers Association of the United States and Canada (GFOA) has presented a Distinguished Budget Presentation Award to the Kodiak Island Borough for its annual budget for the last twelve consecutive years (fiscal years beginning July 1, 1990 through July 1, 2001). The Borough has submitted its annual budget for the fiscal year beginning July 1, 2002, and believes that it will also meet the criteria for this award. In order to receive this award, a government unit must publish a budget document that meets program criteria as a policy document, as an operating guide, as a financial plan, and as a communications medium. Acknowledgments I wish to express my appreciation to all the members of the Finance Department for their efficient and dedicated service during the past year. I wish to thank your office and the members of the Borough Assembly for their interest in and support of the planning and conducting of the financial operations of the Borough in a responsible and progressive manner. Respectfully submitted, KARLETON G. SHORT DIRECTOR OF FINANCE xxi FINANCIAL SECTION 701 West Eighth Avenue Suite 600 Anchorage, AK 99501 Independent Auditors' Report The Honorable Mayor and Members of the Assembly Kodiak Island Borough: We have audited the accompanying general - purpose financial statements of Kodiak Island Borough (the Borough), Alaska, as of and for the year ended June 30, 2002, as listed in the table of contents. These general - purpose financial statements are the responsibility of Kodiak Island Borough, Alaska's management. Our responsibility is to express an opinion on these general - purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general - purpose financial statements referred to above present fairly, in all material respects, the financial position of the Kodiak Island Borough, Alaska, as of June 30, 2002, and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated September 27, 2002, on our consideration of Kodiak Island Borough's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. The combining and individual fund and account group financial statements and schedules listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the general - purpose financial statements of Kodiak Island Borough, Alaska. Such information has been subjected to the auditing procedures applied in our audit of the general - purpose financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the general - purpose financial statements taken as a whole. ' ,... KPMG LLB KPMG LLP a U.S. limited liability partnership, is a member of KPMG Intemational, a Swiss association. 1 1 Ana _ The Honorable Mayor and Members of the Assembly Kodiak Island Borough The statistical data on pages 100 through 113 are presented for purposes of additional analysis and is not a required part of the general - purpose financial statements of the Kodiak Island Borough, Alaska. Such information has not been subjected to the auditing procedures applied in our audit of the general - purpose financial statements and, accordingly, we express no opinion on it. Kl > mc' LrP September 27, 2002 I L 11 2 1 r'll J 1 I1 GENERAL PURPOSE FINANCIAL STATEMENTS The General Purpose Financial Statements include the basic financial statements and notes to the financial statements which are essential to the fair presentation of financial position and results of operations and the cash flow of proprietary funds and similar trust funds. 1 I I KODIAK ISLAND BOROUGH Combined Balance Sheet – All Fund Types, Account Groups and Discretely Presented Component Unit June 30. 2002 (With comparative totals for 2001) Assets and Other Debits Assets: Equity in central treasury Temporary investments Other cash and cash equivalents Receivables: Accounts and other receivables, net State of Alaska Federal Government Property taxes, net of allowance of $15,828 Land sales contracts, due within one year Due from other funds Due from primary government Inventories Long -term interfund advances Land sales contracts receivable, due after one year Fixed assets, net of accumulated depreciation where applicable Construction work -in- progress Other debits: Amount to be provided for claims and judgments Amount to be provided for capital leases Amount available in debt service fund Amount to be provided for retirement of general long -term debt Total See accompanying notes to financial statements. Governmental fund types $ 7.324,672 $ 28,998.862 $ 1,364.152 $ 852,230 3 (Continued) Special Debt Capital General Revenue Service Projects $ 282,864 $ 2,105,026 $ 142,793 $ 129,503 5,946.139 18,341,171 1.205,796 538,863 185,028 60,847 7,102 — 64.651 122.406 8.461 183.864 — 4,388 — — 319,011 — — — — 6.223 — — 526,979 1.142,269 — — — 7,130,000 — — — 86,532 — — $ 7.324,672 $ 28,998.862 $ 1,364.152 $ 852,230 3 (Continued) Exhibit i 4 (Continued) Total Proprietary primary Component Totals fund type Account groups government unit reporting entity General General long- (memorandum School (memorandum only) Enterprise fixed assets term debt only) district 2002 2001 $ 1,156,761 $ — $ — $ 3,816,947 $ — $ 3,816,947 $ 2,433,140 1,932,795 — — 27,964,764 — 27.964.764 24,213.547 — — — — 477.645 477,645 435,974 360,561 — — 613,538 45,753 659,291 786,937 100,000 — — 479.382 836.838 1,316.220 1,155.617 — — — 4,388 414,630 419,018 191,428 — — — 319,011 — 319,011 331,695 — — — 6,223 — 6,223 16,306 — — — 1.669,248 1,179.259 2.848.507 2.651,973 — — — — 4,018,722 4,018,722 4,017,798 277,007 — — 277.007 272,367 549.374 541,080 — — — 7,130,000 — 7,130,000 7,370,000 — — — 86,532 — 86,532 25,742 42,547,034 104,165,625 — 146,712,659 4,009,389 150,722,048 152,309,184 2.241,254 — — 2,241.254 — 2.241,254 — — — 2,053,000 2,053,000 — 2,053,000 1,356,500 — — — — 75,412 75.412 - - — 590.858 590,858 — 590,858 458,925 — — 16,320,265 16,320,265 — 16,320,265 17,523,249 $ 48,615.412 $ 104.165,625 $ 18.964.123 $ 210.285.076 $ 11.330.015 $ 221.615.091 $ 215.819.095 4 (Continued) KODIAK ISLAND BOROUGH Combined Balance Sheet – All Fund Types, Account Groups and Discretely Presented Component Unit June 30, 2002 (With comparative totals for 2001) Liabilities, Fund Equities, and Other Credits Liabilities: Accounts payable Retainages payable Accrued compensation, annual leave, payroll taxes, and related benefits Other accrued liabilities Customer deposits Deferred revenues Claims and judgments Due to City of Kodiak Due to component units Due to other funds Due to student organizations Current portion of note payable Current portion of capital lease obligations Accrual for landfill closure and postclosure costs Note payable Capital lease obligations Long -term interfund borrowings General obligation bonds payable Environmental Protection Agency loan Alaska Department of Environmental Conservation loans Total liabilities Fund equities and other credits: Contributions in aid of construction, net Investment in general fixed assets Contributed capital Retained earnings Fund balances: Reserved: Encumbrances Fuel inventory Long -term interfund borrowings Quality school initiative/learning opportunities Unreserved: Designated for subsequent year expenditures Undesignated Total fund equities and other credits Total See accompanying notes to financial statements. Governmental fund types 595,305 177,770 — — 2.243,532 28,410,539 590,858 619,305 2,838,837 28,588,309 590,858 619,305 S 7,324,672 $ 28,998.862 $ 1,364,152 S 852,230 5 (Continued) Special Debt Capital General Revenue Service Projects $ 101,184 $ 94,809 $ — $ 20,528 — — — 3,705 83,736 1,847 — — 4,800 625 — — 268,193 94,985 — — 9,200 — — — 4,018,722 — — - - 218,287 773,294 208,692 4,485,835 410,553 773,294 232,925 595,305 177,770 — — 2.243,532 28,410,539 590,858 619,305 2,838,837 28,588,309 590,858 619,305 S 7,324,672 $ 28,998.862 $ 1,364,152 S 852,230 5 (Continued) Exhibit 1 6 (Continued) Total Proprietary primary Component Totals fund type Account groups government unit reporting entity General General long- (memorandum School (memorandum only) Enterprise fund assets term debt only) district 2002 2001 $ 161,973 $ - $ - $ 378,494 $ 386,370 $ 764,864 $ 1,064,360 - - - 3,705 - 3,705 48,181 - - 142,793 228,376 2,482,606 2,710,982 2521,272 147,086 - - 147,086 - 147,086 338,451 - - - 5,425 - 5,425 525 103,745 - - 466,923 111,217 578,140 195,039 - - 2,053,000 2,053,000 46,000 2,099,000 1,396,500 - - - 9,200 - 9,200 22,022 - - - 4,018,722 - 4,018,722 4,017,798 468,975 - - 1,669,248 1,179,259 2,848,507 2,651,973 - - - - 397,201 397,201 338,868 669,967 - - 669,967 - 669,967 629,656 294,439 - - 294,439 - 294,439 277,720 2,292,901 - - 2,292,901 - 2,292,901 2,122,151 1,241,254 - - 1,241,254 - 1,241,254 1,901,494 502,867 - - 502,867 75,412 578,279 797,306 7,130,000 - - 7,130,000 - 7,130,000 7,370,000 - - 16,615,000 16,615,000 - 16,615,000 17,690,000 - - 52,083 52,083 - 52,083 72,919 - - 101,247 101,247 - 101,247 105,272 13,013,207 - 18,964,123 37,879,937 4,678,065 42,558,002 43,561,507 29,292,524 - - 29,292,524 - 29,292,524 30,340,822 - 104,165,625 - 104,165,625 4,009,389 108,175,014 105,444,036 5,382,203 - - 5,382,203 - 5,382,203 5,382,203 927,478 - - 927,478 - 927,478 609,267 - - - - 400,218 400,218 2,303,641 - - - - 227,269 227,269 226,629 - - - - - - 7,370,000 - - - - 2,559 2,559 - - - - 773,075 982,510 1,755,585 985,954 - - - 31,864,234 1,030,005 32,894,239 19,595,036 35,602,205 104,165,625 - 172,405,139 6,651,950 179,057,089 172,257.588 $ 48,615,412 $ 104,165,625 $ 18,964,123 $ 210,285.076 $ 11,330,015 $ 221.615,091 $ 215,819,095 6 (Continued) KODIAK ISLAND BOROUGH Combined Statement of Revenues. Expenditures, Transfers, and Changes in Fund Balances All Governmental Fund Types and Discretely Presented Component Unit Year ended June 30. 2002 (With comparative totals for 2001) See accompanying notes to financial statements 7 Special Debt Capital General revenue -service projects Revenues: Property taxes $ 7.289,280 S 604.468 $ — Intergovernmental: State sources 1,638,441 675.137 — 315,499 Federal sources 1,758,799 17,101 — — Land sale proceeds — 4,585.361 — Severance taxes 728.064 — — — Licenses, permits, fees, and other local revenues 236,758 167.870 — 660 Investments and property 294,675 1.003.102 31.884 33.539 In -kind services — — — — Other — 280 12.675 — Total revenues 11.946,017 7,053.319 44,559 349,698 Expenditures: Current: Borough assembly 130.303 — — — Borough manager 210,325 — — — Borough clerk 265.108 — — — Borough attorney 196.185 — — — Finance department 425.306 — — — Assessing department 179.816 — — — Engineering/facilities department 103,878 — — — Community development department 379.853 72.018 — — Building official 128,084 — — — Economic development 68.653 — — — General and administration 270,005 1,042,768 1,592 — Emergency preparedness 2.574 — — — School district support 588.590 — — — Health and sanitation department 280.847 519.438 — — Education, culture and recreation 147,227 — — — Management information systems 519.780 — — — Capital outlay: Schools — — — 2.161,005 Service district maintenance — 256.876 — — General — — — 236,382 Debt service: Principal — — 1.099.860 — Interest — — 869.519 — Total expenditures 3.896.534 1.891.100 1.970.971 2.397.387 Excess of revenue over (under) expenditures 8.049,483 5,162.219 (1,926.412) (2.047,689) Other financing (uses) sources: Operating transfers in from component unit — — 849,694 — Operating transfers in from other funds 200,000 691.729 1.208,651 20.000 Operating transfers in from primary government — — — — Operating transfers out to component unit (6.331,440) — — — Operating transfers out to other funds (498,884) (639.919) — (200.000) Operating transfers out to primary government — — — Capital lease — — — — Proceeds from issuance of long -term debt — — — Net other financing (uses) sources (6,630,324) 51,810 2.058,345 (180,000) Excess of revenues and other financing sources over expenditures and other financing uses 1.419.159 5.214.029 131.933 (2.227.689) Fund balances, at beginning of year 1,419.678 23.374,280 458.925 2,846.994 Adjustments to reserve for fuel inventory — — — — Fund balances, at end of year $ 2,838,837 $ 28,588,309 $ 590,858 $ 619,305 See accompanying notes to financial statements 7 Exhibit 2 Total primary Component government unit Totals — reporting entity (memorandum School (memorandum only) only) district 2002 2001 $ 7,893,748 S — $ 7,893,748 $ 7,859,612 2,629.077 17.348,690 19,977,767 19,369.239 1.775.900 4.902.132 6.678.032 5.390.000 4,585,361 — 4,585,361 4,112,128 728,064 — 728,064 854.233 405,288 620,877 1,026,165 881,043 1.363.200 — 1.363.200 1.909,358 — 774,854 774,854 683.261 12.955 — 12.955 12.849 19,393.593 23.646,553 43,040,146 41,071,723 130,303 — 130,303 137,000 210,325 — 210.325 159.275 265,108 — 265,108 263,191 196.185 — 196.185 435.337 425,306 — 425.306 389,583 179,816 — 179.816 288.958 103,878 — 103,878 85,310 451.871 — 451.871 443.731 128,084 — 128.084 129,908 68.653 — 68.653 38.000 1,314,365 — 1,314.365 1,475,523 2.574 — 2.574 3.002 588,590 28,982,494 29,571,084 26,602,424 800.285 — 800,285 686.810 147,227 — 147,227 148,351 519.780 — 519.780 293.891 2,161,005 — 2,161.005 671,985 256,876 — 256.876 14,306 236,382 — 236.382 624,788 1,099,860 — 1,099.860 2,015,834 869,519 — 869.519 745.493 10.155.992 28.982.494 39.138.486 35.652.700 9,237.601 (5,335.941) 3.901,660 5,419.023 849,694 — 849,694 1,634.092 2.120.380 121.550 2,241.930 2.336.899 — 6,331,440 6,331,440 5,966.440 (6.331.440) — (6.331,440) (5.966.440) (1,338.803) (121,550) (1,460,353) (1,610,544) — (849.694) (849,694) (1.634.092) — 128,576 128,576 - - — — 2.677.871 (4,700.169) 5.610,322 910.153 3,404,226 4.537.432 274.381 4,811.813 8.823.249 28.099,877 2,381.383 30,481,260 21.645,942 — (13.203) (13203) 12.069 S 32,637,309 S 2.642,561 $ 35,279.870 S 30,481.260 8 KODIAK ISLAND BOROUGH Combined Statement of Revenues, Expenditures, Transfers and Changes in Fund Balances Budget and Actual General Fund, Special Revenue Fund, and Debt Service Fund Year ended June 30, 2002 Revenues: Property taxes Intergovernmental: State sources Federal sources Land sale proceeds Severance taxes licenses, permits, fees, and other local revenues Other Investments and property Total revenues Expenditures: Current: Borough assembly Borough mayor Borough clerk Borough attorney Finance department Assessing department Engineering(facilities department Community development department Building official Economic development General and administration Emergency preparedness School district support Health and sanitation department Education, culture and recreation Management information systems Service district maintenance Debt service: Principal Interest Total expenditures Excess of revenue over (under) expenditures Other financing (uses) sources: Operating transfers in from component unit Operating transfers in from other funds Operating transfers to component unit Operating transfers out to other funds Net other financing (uses) sources Excess of revenues and other financing sources over (under) expenditures and other financing uses Fund balances, at beginning of year Fund balances, at end of the year See accompanying notes to financial statements. General fund Variance - favorable Budget Actual (unfavorable) $ 7,294,260 $ 7,289,280 $ j4,980) 1,392,660 1,638,441 245,781 900,200 1,758,799 858.599 890,000 728,064 (161.936) 126,670 236,758 110,088 272,200 294,675 22,475 10.875,990 11,946.017 1.070,027 161,390 130,303 31,087 182,980 210,325 (27,345) 285,380 265,108 20,272 259,250 196,185 63,065 455,910 425,306 30,604 275,690 179,816 95,874 126,330 103,878 22,452 380,090 379,853 237 110,510 128,084 (17,574) 81,160 68,653 12,507 286,180 270,005 16,175 5,500 2,574 2.926 602,000 588,590 13,410 286,920 280,847 6,073 155,780 147,227 8,553 615,630 519,780 95,850 4,270,700 3,896,534 374,166 6.605,290 8,049,483 1,444,193 200,000 200,000 - (6,331.440) (6,331,440) - (473,850) (498,884) (25,034) (6,605,290) (6,630,324) (25,034) $ - 1,419,159 $ 1,419,159 $ 2,838,837 9 Exhibit 3 10 Special revenue funds Debt service funds Variance- Variance- favorable favorable Budget Actual (unfavorable) Budget Actual (unfavorable) $ 594,200 $ 604,468 $ 10,268 $ - $ - $ - 695,669 675,137 (20,532) - - - 66,992 17,101 (49,891) - - - 4,014,500 4,585,361 570,861 - - - 170,220 167,870 (2,350) - - - - 280 280 - 12,675 12,675 1,730,850 1,003,102 (727,748) 1,000 31,884 30,884 7,272.431 7.053.319 (219.112) 1.000 44,559 43.559 78,140 72.018 6,122 - - - 6,104,057 1,042,768 5,061,289 28,700 1,592 27,108 540,049 519,438 20.611 - - - 254,735 256,876 (2,141) - - - - - - 1,099,864 1,099,860 4 - - - 881.646 869,519 12,127 6,976,981 1,891,100 5,085,881 2,010,210 1,970,971 39,239 295,450 5,162,219 4.866.769 (2,009.210) (1,926,412) 82,798 - - - 829,370 849,694 20,324 153.500 691.729 538,229 1,179,840 1,208.651 28.811 (617,750) (639,919) (22,169) - - - (464,250) 51,810 516,060 2,009,210 2,058,345 49,135 $ (168,800) 5,214,029 $ 5,382,829 $ - 131,933 $ 131,933 23.374.280 458,925 $ 28,588,309 $ 590,858 10 Exhibit 4 KODIAK ISLAND BOROUGH Combined Statement of Revenues, Expenses, Transfers, and Changes in Retained Earnings Proprietary Fund Types Year ended June 30, 2002 (With comparative totals for 2001) See accompanying notes to financial statements. Enterprise 2002 2001 Operating revenues: Solid waste collection $ 1,740,766 $ 1,718,904 Solid waste disposal 1,094,484 889,885 State sources - revenue sharing 39,617 39,907 Charges for services/customer charges 69,520 69,078 Lease proceeds 720,000 2,204,927 Other 2,071,730 487,698 5,736,117 5,410,399 Operating expenses: Personnel services 576,155 533,442 Solid waste collection 1,276,583 1,250,607 Refuse disposal 284,554 297,992 Contracted services 311,634 326,220 Repairs and maintenance 336,472 377,610 Landfill closure and postclosure costs 170,750 57,115 Depreciation 2,188,671 2,018,632 Support goods and services 44 802 General and administration 195,734 177,654 Miscellaneous 60,533 51,954 Telephone services 72,952 30,000 Recycling services 70,000 67,680 Contributions 7,315 2,844 5,551,397 5,192,552 Operating income 184,720 217,847 Other income (expenses): Intergovernmental revenue - 69,838 Loss on disposal of fixed assets - (226,761) Investment income 89,270 76,673 Interest expense (222,500) (171,689) Net loss from continuing operations 51,490 (34,092) Transfer to other funds - Operating transfers out to other funds (781,577) (726,355) Net operating transfers (781,577) (726,355) Amortization of contributions in aid of construction 1,048,298 1,048,296 Increase in retained earnings 318,211 287,849 Retained earnings, at beginning of year 609,267 321,418 Retained earnings, at end of year $ 927,478 $ 609,267 See accompanying notes to financial statements. Exhibit 5 KODIAK ISLAND BOROUGH Combined Statement of Cash Flows Proprietary Fund Types Year ended June 30, 2002 (With comparative totals for 2001) See accompanying notes to financial statements. 12 Enterprise 2002 2001 Operating income $ 184,720 $ 217,847 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 2,188,671 2,018,632 Changes in assets and liabilities that provided (used) cash: Accounts receivable: Customers (103,431) 266,754 Due to /from other funds (747,865) 814,484 Accounts payable (22,833) (113,086) Deferred revenues 86,296 — Accrual for landfill closure and postclosure costs 170,750 55,393 Other accrued liabilities (7,617) 16,946 Total adjustments 1.563.971 3,059,123 Net cash provided by operating activities 1,748,691 3,276,970 Cash flows from noncapital and related financing activities: Operating transfers out to other funds (781,577) (726.355) Net cash used for noncapital financing activities (781,577) (726,355) Cash flows from capital and related financing activities: Acquisition and construction of capital assets (111,811) (491,697) Interest paid on notes payable, capital leases, and interfund borrowing (118,556) (171,689) Proceeds from issuance of long -term interfund borrowing (225,000) (210,000) Proceeds from issuance of notes payable 9,450 299,686 Principal payments made on notes payable (629,379) (592,016) Principal payments made on capital lease (277,720) (261,951) Net cash used for capital and related financing activities (1,353,016) (1,427,667) Cash flows from investing activities: Change in assets whose use is limited: Deductions from (additions to) restricted cash Interest and dividends on investments 78,536 85,637 Net increase (decrease) in investments 1,142,947 (1,220,596) Net cash provided by (used for) investing activities 1,221,483 (1,134,959) Net change in cash and cash equivalents 835,581 (12,011) Cash and equivalents, at beginning of year 321,180 333,191 Cash and equivalents, at the end of year $ 1,156,761 $ 321,180 Noncash capital and related financing activities: Loss on disposal of fixed assets $ — $ 226,761 See accompanying notes to financial statements. 12 KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 (1) Summary of Significant Accounting Policies (a) Reporting Entity The Kodiak Island Borough (the Borough), Alaska, was organized to perform the municipal duties allowed by Alaska Statutes and as directed by its residents. As required by generally accepted accounting principles, these financial statements present the government and its component unit, an entity for which the government is considered to be financially accountable. The discretely presented component unit is reported in a separate column in the combined financial statements to emphasize it is legally separate from the government. The Borough reviewed its relationship with other organizations and determined that the following organization is a component unit. Kodiak Island Borough School District The Borough has delegated the operating responsibility for public education to the Kodiak Island Borough School District (the School District). In accordance with statutes, the Borough retains ownership of the education related fixed assets and incurs the debt, if necessary, to finance the acquisition and construction of school facilities. The Borough Assembly approves the total annual budget of the School District and may, during the year, increase or decrease the total appropriation. Complete financial statements for the component unit may be obtained at the entity's administrative offices for the Kodiak Island Borough School District. Kodiak Island Borough School District 722 Mill Bay Road Kodiak, Alaska 99615 Total columns on the combined statements are captioned "memorandum only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in conformity with accounting principles generally accepted in the United States of America, nor are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of these data. Reclassification Certain 2001 balances have been reclassified to conform to the current year presentation. . (b) Measurement Focus, Basis of Accounting, and Basis of Presentation The accounts of the Borough are organized and operated on the basis of funds and account groups. A 1 fund is an independent fiscal and accounting entity with a self - balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance- related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. Account groups are a reporting device to account for certain assets and liabilities of the governmental funds not recorded directly in those funds. 11 13 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 The Borough has the following fund types and account groups: Governmental funds are used to account for the Borough's general government activities. Governmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The Borough considers all revenues available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long -term debt that is recognized when due, and certain compensated absences and claims and judgments that are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes, franchise taxes, severance taxes, licenses, interest, and special assessments are susceptible to accrual. Other receipts and taxes become measurable and available when cash is received by the Borough and are recognized as revenue at that time. Entitlements and shared revenues are recorded at the time of receipt, or earlier if the susceptible to accrual criteria are met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Governmental funds include the following fund types: The general fund is the Borough's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Special revenue funds account for revenue sources that are legally restricted to expenditure for specific purposes, not including expendable trusts or major capital projects. Debt service funds account for the servicing of general long -term debt not being financed by proprietary or nonexpendable trust funds. Capital projects funds account for the acquisition of fixed assets or construction of major capital projects not being financed by proprietary or nonexpendable trust funds. Proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned, and expenses are recorded at the time liabilities are incurred. The Borough has elected to follow all applicable Governmental Accounting Standards Board (GASB) pronouncements and all Financial Accounting Standards Board (FASB) pronouncements issued on or before November 30, 1989 that are not in conflict with GASB pronouncements. Proprietary funds include the following fund type: Enterprise funds are used to account for those operations that are financed and operated in a manner similar to private business or where the Borough Assembly has decided that the 14 (Continued) I KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 determination of revenues earned, costs incurred and/or net income is necessary for management accountability. The account groups include the following: The general fixed assets account group is used to account for fixed assets not accounted for in proprietary or trust funds. The general long -term debt account group is used to account for general long -term debt and certain other liabilities that are not specific liabilities of proprietary or trust funds. Summarized below are the major sources of revenue and the applicable recognition policies: Property Taxes: Property taxes are based on the assessed value of taxable property as of January 1. Pursuant to Alaska Statute 29.45.240, the Borough establishes the mill rate on or before June 15th. Tax bills are then mailed on or before July 1st. Taxes are due when billed and generally become delinquent on or after October 15th. The Borough code also provides for split payments. If a taxpayer avails himself of this provision, one -half must be paid on or before August 15th and the remainder becomes due on or before November 15th (in lieu of October 15th). Borough property tax revenues are recognized in the fiscal year in which they become measurable and available, which is generally the year following the year the tax bills are mailed. All taxes are delinquent on November 16th, and a tax foreclosure process may commence as outlined in Alaska Statutes Title 29. Briefly, this entails the petition for Judgment of Foreclosure signed by the District Court Judge and the publication of all delinquent taxes in the local newspaper for four consecutive weeks. Real property tax liens are enforced by one general foreclosure proceeding against the delinquent properties. Severance Taxes: Severance taxes are based on the amount and value of natural resources severed from the environment. Types of resources taxed include seafood, gravel and mineral resources, and timber. Severance tax returns are sent to appropriate companies (as determined by the Borough ' Assessor) and are returned to the Borough Finance Department. The returns are filed quarterly, and are due by the end of the month following the quarter's end. Borough severance tax revenues are recognized in the fiscal year in which they become measurable and available. ' Intergovernmental Revenue: State - shared revenues, safe communities, State - education related entitlement programs and State - levied taxes, the proceeds of which are distributed to local governments, are recorded in the fiscal year to which they relate, including accrual at year end if ' final payments due are measurable and received within approximately two months after year end. State of Alaska and Federal government cost reimbursable grants and contracts are recorded to the ' extent of allowable expenditures in the period in which the expenditures were incurred. 11 15 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 Revenue from Investments and Property: Amounts earned on investment of available cash balances and the rental of building facilities are recorded in the period to which they relate, including accrual at year end of the balance due, and unrealized gains and losses on investments held at fiscal year end. Land Sales Proceeds and Other Local Revenues: Amounts received pursuant to land sale contracts are recorded on the cash basis. Noncurrent portions of long -term receivables due to Governmental Fund Types are reported on the associated balance sheets, in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered available spendable resources since they do not represent net current assets. Recognition of Governmental Fund Type revenues represented by noncurrent receivables is deferred until they are paid. Other local revenues are recorded on a basis consistent with their nature in relation to measurement and availability standards. (c) Budgets and Budgetary Accounting Borough The Borough follows these procedures in establishing the budgetary data reflected in the combined financial statements: • The Borough Manager must submit to the Borough Assembly by April 30 a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them. • Public hearings are conducted by the Borough Assembly to obtain citizen comments. • By June 10, the budget is legally enacted through passage of an ordinance by Borough Assembly action. If the Borough Assembly fails to pass an ordinance, the budget submitted by the Borough Manager becomes the adopted budget. • Amendments to the budget can occur anytime during the fiscal year through the Borough Assembly or administrative action. Generally, the following actions are required at the level of the particular change: All new appropriations are authorized by an appropriation ordinance that amends the annual budget ordinance. A resolution of the Borough Assembly is required to move (appropriate) amounts between departments and projects. The administration is authorized and directed by the Borough Assembly to effect the necessary line item changes within the limits established by Items (1) and (2) above by project or department to properly monitor, account, and report receipts and expenditures. • Expenditures may not legally exceed appropriations at the following levels: Capital Projects Funds — project level, all other funds — department level. I 16 (Continued) I KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 • All funds, except Capital Projects Funds, are budgeted on an annual basis encompassing a fiscal year. Budgets of Capital Projects Funds generally encompass the period from start-up to project completion, which is generally greater than one year. • Appropriations lapse at year end to the extent that they have not been expended for all funds, except Capital Projects Funds, which lapse at project completion. - • Budgets adopted by the Borough Assembly are in accordance with accounting principles generally accepted in the United States of America. • Additional appropriations for certain funds were enacted during the year. The majority of these appropriations reflect increases and decreases in actual grant awards. Supplemental appropriations amounted to approximately $257,000 for the general fund, $(27,000) for the special revenues funds, and $20,000 for the debt service funds. School District Annual budgets are adopted by the School Board for all revenues, expenditures, and interfund transfers. Budgets are prepared and presented on the modified accrual basis of accounting. Pursuant to Alaska Statutes, the adopted budget is submitted to the Borough Assembly for review and approval. The Borough Assembly is required by ordinance to approve the School District budget in total only and appropriate the necessary resources no later than April 30 of the current fiscal year. The School Board retains line item authority once the annual local appropriation is set by the Borough Assembly. (d) Assets, Liabilities, and Fund Equity Interfund Transactions Transactions that would be treated as revenues, expenditures, or expenses, if they involved organizations external to the Borough, are similarly treated if they occur between the fund types. Reimbursements from one fund to another are treated as expenditures or expenses of the reimbursing fund and a reduction of the expenditures or expenses of the reimbursed fund. Transfers from funds receiving revenues to funds, through which the resources are to be expended, and operating loss subsidies are classified as operating transfers. Nonrecurring or nonroutine transfers of equity between funds are recorded as equity transfers. Long -term interfund transfers of funds are accounted for as long -term interfund advances/borrowings. See note 7 for additional disclosure. Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of moneys, are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General Fund, Special Revenue Funds and Capital Projects Funds. Encumbrances outstanding at year end are reported as reservations of fund balances since they do not constitute expenditures or liabilities. It is the Borough's policy to void all open purchase orders at year end that are not in the Capital Projects funds. 17 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 Inventories Expendable operating supplies of the Borough are accounted for using the purchase method, and at June 30, 2002 there are no significant amounts of such inventories on hand. The Hospital Enterprise Fund also has at June 30, 2002, amounts of inventory assigned to Providence as of April 21, 1997 which, by the terms of the lease agreement for the hospital facilities (see note 17), are required to be returned to the Borough at the termination of the lease in at least equal value. Retirement Plans All full -time employees of the Borough and School District participate in either the Alaska Public Employees' Retirement System or the Alaska Teachers' Retirement System. The Borough and School District accrue pension expense that includes current costs and amortization of prior service costs. The policy is to fund pension costs accrued. Annual Leave The Borough records its liability for accrued annual leave in the Governmental Fund Types for the amounts estimated to be liquidated with current available resources. The commitment for accrued annual leave not included in the Governmental Fund Types is recorded in the General Long -Term Debt Account Group. All funds record annual vacation leave as earned. (e) Cash Flows All highly liquid investments, excluding restricted assets, with original maturities of three months or less are considered cash equivalents for purposes of the statement of cash flows. (fl Use of Estimates Preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in these financial statements. Actual results may differ from the estimates. Significant estimates include the allowance for doubtful accounts, the useful lives of assets and related accumulated depreciation, accrued landfill closure and post - closure care costs. (g) New Accounting and Reporting Standards In June 1999, Statement No. 34 of the Governmental Accounting Standards Board, Basic Financial Statements — and Management's Discussion and Analysis —for State and Local Governments, was issued. This statement establishes new financial reporting requirements that will result in greater accountability by state and local governments by providing more useful information to a wider range of users. This statement also requires state and local governments to present a government wide set of financial statements prepared on the accrual basis and to record and to depreciate capital assets, including infrastructure assets. The impact of this new standard has not been fully determined, however, the change will likely result in a significant increase in equity as a result of recording all 18 (Continued) I KODIAK ISLAND BOROUGH June 30, 2002 capital assets, including infrastructure assets. The Borough adopted this statement for the fiscal year beginning July 1, 2002. (2) Cash and Temporary Investments Cash balances of most Borough funds are pooled in a central treasury. Each fund type's portion of this pool is displayed on the combined balance sheet as "Equity in central treasury." In addition, investments are separately held by several of the Borough's funds. Investments are carried at fair value, as determined by quoted market prices. At June 30, 2002, the carrying amount of the Borough and its Component Unit deposits was $3,816,197 and the corresponding bank balance was $4,054,878. The Federal Deposit Insurance Corporation insures $100,000 of the Borough's bank balance. Government and Agency Obligations and General Obligation Bonds of a Municipality collateralize the remaining $3,954,878. Collateral, in the amount of $10,960,000, is held by Deutsche Bank, the pledging financial institution's agent, in the Borough's name. Investments: Statutes authorize the Borough to invest in obligations of the United States, the State of Alaska and its political subdivisions, savings accounts, certificates of deposit, banker's acceptances, repurchase agreements, and such other legal security instruments. The Borough Code requires all investments to be collateralized and/or insured. Notes to Financial Statements Investments are categorized as follows to give an indication of the level of risk assumed: Category 1 includes investments that are insured, or registered or for which the securities are held by the Borough or its agent in the Borough's name; category 2 includes uninsured and unregistered investments for which the securities are held by the counter party's trust department or agent in the Borough's name; category 3 includes uninsured and unregistered investments for which the securities are held by the counter party, or by its trust department or agent but not in the Borough's name. The carrying amount of temporary investments approximates fair value. At June 30, 2002, the Borough's investment balances were categorized as follows: Investments – categorized: U.S. Government Securities Category Carrying 1 2 3 amount $ 17,064,800 $ — $ $ 17,064,800 Investments – not categorized: Alaska Municipal League Investment Pool Total investments 10,899,964 27.964,764 ' The Alaska Municipal League Investment Pool (AMLIP) is considered to be an external investment pool as defined by GASB Statement No. 31. AMLIP is not SEC - registered. Alaska Statute 37.23 establishes regulatory oversight of the pool. The law sets forth numerous requirements regarding authorized investments and reporting. The pool is incorporated in the State of Alaska as a nonprofit corporation and reports to its Board of Directors. Alaska Statute 37.23.050 requires the retention of an investment manager. 1 19 (Continued) 1 KODIAK ISLAND BOROUGH ' Notes to Financial Statements June 30, 2002 ' The manager is required to produce monthly disclosure statements to the pool. The pool has also retained an investment advisor to ensure compliance with investment policies. All participation in the pool is voluntary. The pool must maintain a dollar - weighted average maturity of 90 days or less, and only purchase instruments having remaining maturities of 397 days or less. On a monthly basis, the investments in the pool are reviewed for fair value by an independent pricing service. As of June 30, 2002 the fair value of the investment in the pool approximates the fair value of the pool shares. The above bank deposits of $3,816,197, investments of $27,964,764 plus cash on hand of $750 totaling $31,781,711 are reported under the following captions in the combined financial statements: Equity in central treasury cash $ 3,816,947 Temporary investments 27,964,764 Total deposits and investments $ 31,781,711 The Borough reports investments at fair value in the balance sheet, and reports the changes in the fair value of investments as revenue in the operating statement. (3) Annual Appropriation to the School District An annual appropriation is made to the School District in order to provide the School District with total resources in a fiscal year equal in amount to budgeted expenditures. In addition to the annual appropriation, the Borough provides the School District, without charge, general liability and property insurance, data processing services, the annual independent audit, mental health services, and grounds maintenance services. These are reflected as in -kind services in the financial statements of the School District. (4) Retirement Commitments The School District, a component unit of the Borough, participates in the Alaska State Teachers' Retirement System (TRS), a cost - sharing, multiple - employer pension plan that covers the School District's certificated employees. The Alaska Public Employees' Retirement System (PERS), covers most of the employees not covered by TRS and all Borough employees. Each plan issues a publicly available financial report that includes financial statements and required supplementary information. Those reports may be obtained from the State of Alaska. State of Alaska Department of Administration Division of Retirement Benefits P.O. Box 11 -0203 Juneau, Alaska 99811-0203 (a) PERS Plan Description: All regular employees of the Borough who work more than fifteen hours per week participate in PERS. PERS is an agent multiple - employer, statewide defined benefit plan, administered by the State of Alaska. Benefit and contribution provisions are established by Chapter 35 of Alaska Statute Title 39, and may be amended only by state legislature. Employees 20 (Continued) I U 1 I� 1 t 1 r KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 hired prior to July 1, 1986 with five or more years of credited service are entitled to annual pension benefits beginning at normal retirement age 55 or early retirement age 50. For employees hired after June 30, 1986, the normal and early retirement ages are 60 and 55, respectively. The normal pension benefit is equal to 2% of the member's three highest average monthly compensation for the first ten years of service, 2 -1/4% for the second ten years of service and 2 -1/2% for all remaining years of service. All service earned prior to July 1, 1986 will be calculated using the 2% multiplier. Employees with 30 or more years of credited service (20 years for peace officers and firefighters) may retire at any age and receive a normal benefit. The system also provides death and disability benefits and postemployment healthcare benefits. Funding Policy: Under State law, covered employees are required to contribute 6.75% of their annual covered salary and the Borough is required to contribute an actuarially determined rate – the current rate is 0.15% of annual covered payroll. Annual Pension Cost: For the year ended June 30, 2002, the Borough's annual pension cost was $61,962 for PERS, which was equal to the required and actual contribution. The actuarial required contribution was computed as part of an actuarial valuation as of June 30, 2001. Significant actuarial assumptions used in the valuation include: (a) a rate of return on the investment of present and future assets of 8.25% per year compounded annually and (b) projected salary increases of 5.5% a year for the first five years of employment and 4.5% per year thereafter, with distinction made between amounts for inflation (4.0 %), merit for the first five years (1.0 %), and productivity (0.5 %). The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the fair value of investments over a five year period. The contribution rate for normal cost is determined using the projected unit credit actuarial funding method. The excess of assets over the actuarial accrued liability is amortized over a rolling 25 years, which is an open amortization period. The percentage of pay method is used for amortization purposes. Three -year trend information for PERS Year ended Annual pension cost (APC) Percentage of APC contributed Net pension obligation 6/30/2000 $ 105,205 100% $ — 6/30/2001 69,805 100% — 6/30/2002 61,962 100% — Postemployment Healthcare Benefits: Postemployment healthcare benefits are provided without cost to all employees first hired before July 1, 1986, and employees who are disabled or age sixty -five or older, regardless of initial hire dates. Employees first hired after June 30, 1986, with five years of credited service (or ten years of credited service for those first hired after July 1, 1996) may receive postemployment healthcare benefits prior to age sixty by paying the full monthly premium, and by paying half of the monthly premium if they are between the ages of sixty and sixty -five. The actuarially required and actual contributions for postemployment healthcare benefits for the year ended June 30, 2002 was $18,508. The amount of net assets available for postemployment healthcare 21 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 benefits, the actuarial accrued liability, and funded excess are $4,818,000, $4,221,000, and $597,000, respectively. (b) Component Unit Retirement Commitments The following is a summary of selected information on the component unit's retirement commitments. Complete pension disclosures are presented in the component unit's financial statements. School District participation in PERS, a defined benefit agent multiple- employer plan, is separate from the Borough's participation. Benefits are the same as described for the Borough's participation. For the years ended June 30, 2002, 2001, and 2000, the School District's annual pension and postemployment healthcare cost was $379,332, $323,991, and $271,733 and equal to the required and actual contributions. TRS is a cost - sharing, multiple - employer defined benefit cost sharing plan. Benefit and contribution provisions are established by Chapter 25 of Alaska Statute Title 14, and may be amended only by the state legislature. Participation is compulsory for certified personnel. Employees hired prior to July 1, 1990 with eight years or more of credited service are entitled to annual pension benefits beginning at normal retirement age 55 equal to 2% of their highest three -year average annual compensation for each year of service. The Plan permits early retirement at age 50. For employees hired after June 30, 1990, the normal and early retirement ages are 60 and 55, respectively. Employees may elect to receive their pension benefits in the form of a joint or survivor annuity. Effective January 1, 1987, a married member who retires must receive his or her benefit in the form of a joint and survivor annuity unless the member's spouse consents to another form of benefit. Minimum benefits for employees eligible for retirement are $25 per month for each year of credited service. In addition, major medical benefits are provided. TRS also provides death and disability benefits. For the years ended June 30, 2002, 2001, and 2000, the School District's annual pension cost was $1,353,768, $1,345,263, and $1,391,110, which was equal to the required and actual contribution. (c) Required Supplementary Information Schedule of Funding Progress for PERS (Dollar amounts in thousands for the primary government only) 22 (Continued) I Funding Actuarial excess as a Actuarial accrued Funding percentage Actuarial value of liability Excess Funded Covered of covered valuation assets (AAL) (FE) ratio payroll payroll date (a) (b) (a -b) (a/b) (c) ((a -b) /c) 6/30/1998 $ 9,506 $ 8,473 $ 1,033 112% $ 2,054 50.3% 6/30/1999 9,886 8,535 1,351 116% 1,864 72.5% 6/30/2001 11,377 9,967 1,410 114% 1,692 83.3% 22 (Continued) I KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 (5) Fixed Assets A summary of changes in the General Fixed Assets Account Group for the year ended June 30, 2002 follows: July 1, 2001 Additions Government: Land Buildings Improvements other than buildings Machinery and equipment Construction work -in- process $ 5,362,188 $ — $ 88,783,292 2,768,667 3,700,998 41,767 1,117,298 1,109,825 2,357,374 2,264,650 $ 101,321,150 $ 6,184,909 $ Deductions June 30, 2002 31,000 $ 5.331,188 1,111,900 90.440,059 12,020 3,730.745 321,246 1,905,877 1,864,268 2.757,756 3,340,434 $ 104,165,625 Assets in the General Fixed Assets Account Group are not depreciated. The following is a summary of Proprietary Fund fixed assets at June 30, 2002: Enterprise funds Unclassified utility plant in service $ 2,200,347 Land and improvements 1,423,044 Building and improvements 43,971,443 Equipment 6,896,555 Construction work -in process 2,241,254 56,732,643 Less accumulated depreciation (11,893,461) Net fixed assets $ 44,839,182 Depreciation lives for Proprietary Fund fixed assets are as follows: Building and improvements 15 -20 years Equipment 5 -20 years An expenditure qualifies for capitalization as a fixed asset if the total cost is $5,000 or more, the asset will last longer than one year, and the asset is not consumable. Improvements to an existing asset that increase the life or value of that asset also qualify for capitalization, and are added to the carrying amount of the original asset. All fixed assets are depreciated over the estimated remaining useful life of the asset on a straight -line basis. The Borough does not capitalize either infrastructure fixed assets or improvement to such. 23 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 (6) Long Term Debt The following is a summary of long -term debt for the year ended Jute 30, 2002: Interest Principal payments Authorized Type of debt Rates Dates Issue date Maturity dates Dates Amount Fiscal year Amount Environmental protection agency asbestos abatement loan 0.0% • 620/1985 12/312004 12/312002 $ 10,417 $ 06130 and 12/31 2003 thru 2004 41,667 52,083 1985 375.000 General obligation bonds -1993 Series 3.90 -7.OD% 8/15 -2/15 11115/1993 2/152006 - 2/152003 860,000 2/15/1904 900,000 2/152005 940.000 2/152006 980.000 3,660.000 1994 9,215,000 General obligation bonds -1994 Series 5.40 -5.50% 1/152007 11/15/1993 21152014 2/152007 1,030,00D — 1.030.000 1994 9.985.000 General obligation bonds -1998 Series 3.25- 4.30% 8/15 -2115 1222 /1998 2/15/2014 2/152003 50,000 2/15/1904 55.000 2/152005 55,000 2/15/2006 60,000 2/152007 60,000 2/152008 1,150,000 2/152009 1,200,000 2/152010 1.250,000 2/152011 1,305,000 2/15/2012 1.360.000 2//52013 1,420,000 21152014 1.480.000 9,445,000 1999 9,740.000 General obligation bonds - 2000 E Series 4.75 -5.0% 811 -211 12/122000 1112011 2/12003 125,000 2/12004 130.000 2/12005 135,000 1112006 145.000 2/12007 150,000 2112008 160,000 2/112009 165,000 2/1/2010 175.000 2/12011 180,000 1365.000 2001 1.485.000 General obligation bonds - 2000FSeries 6.9 -9.0% 811 -2/1 12/122000 1112011 2/12003 85,000 - 2/ 12004 95.000 2112005 105.000 2/1/2006 110.000 2/12007 120,000 2/1 t2OO8 130.000 2112009 140,000 1112010 150,000 2/12011 160.000 1.095.000 2001 1,175,000 Accrued annual leave — 142,793 2002 — Judgment payable ( See Note 19) 1.350.000 Stale of Alaska ADEC loans Clean water -Kariuk 3.92- 4.05% '• •• •• 6/12003 4,228 6/1/2004 4,334 6112A05 4,442 6/12006 4,553 6112007 4,667 6/12008 4,784 6/12009 4,903 6/1/2010 5.026 6/12011 5,152 6/1/2012 5,280 6/12013 5,412 6/1/2014 5,548 6/12015 5,686 611/2016 5.829 6/12017 5,974 6/I20I8 6.124 6/12019 6.277 6/12020 6.434 6112021 6.594 101.247 1998 400.000 S 18,261,123 $ 32,375,000 " Interest free unless delinquent, the 7;r plus fees and penalties. These loans represent State of Alaska financial assistance programs, for which no payment schedules will be finalized, or principal payments made. until the plans and specifications for the projects funded have been completed. The loans are in the amount of $350.000 and $50,000, and are to be repaid from general fund revenues of the Borough, and therefore the debt is reported in the General Long -Term Debt Account Group. Interest begins accruing at the stated rates from the date of each individual disbursement of loan proceeds to the Borough. 24 (Continued) Current Year Prior years Balance at Retired/ Balance at Issued Retired Juk 1, 2001 Issued Refunded June 30, 2002 $ s $ s s $ 375.000 301083 72.917 — 20,833 52.083 9,215,000 4,710,000 4505,000 9.985.000 8.955.000 1,030.000 245,000 9,495.000 1,485,000 — 1,485,000 1,175,000 825,000 3,680,000 1,030.000 50.000 9,445 120,000 1,365,000 1,175,000 — 80.000 1 1 095,000 113,983 28,810 142,793 1,350,000 703,000 2,053,000 105,273 105,273 4,026 101,247 S 22,340,273 $ 14,212,083 $ 19.332173 $ 28.810 s 1,099,859 S 18,964,123 25 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 The annual requirements to amortize all general obligation bonded debt and the EPA and ADEC loans payable outstanding as of June 30, 2002, including interest payments of $5,164,441 on the general obligation debt and ADEC loan, are as follows: General EPA Loan ADEC obligation payables loan payable Total Year ending June 30: 2003 $ 1,900,993 $ 20,834 $ 6,759 $ 1,928,586 2004 1,907,690 20,834 6,759 1,935,283 2005 1,904,815 10,415 6,759 1,921,989 2006 1,902,785 — 6,759 1,909,544 2007 1,875,078 — 6,759 1,881,837 Thereafter 12,260,900 — 94,632 12,355,532 $ 21,752,261 $ 52,083 $ 128,427 $ 21,932,771 The amount of $448,065 is available in the Debt Service Funds to service all general obligation bonds. There are a number of limitations and restrictions contained in the various bond indentures. The Borough is in compliance with all significant limitations and restrictions. Refunding Bonds Investments in securities and current obligations of defeased bonds are not reflected in the combined financial statements. A summary of the current obligations of defeased bonds at June 30, 2002 are summarized as follows: Bond principal outstanding Series 1994 Government Obligation bonds, 5.4% to 5.5 %, due in installments to 2007 $ 8,955,000 26 (Continued) ,l r� �w KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 (7) Long -Term Interfund Borrowings In October 1997 the Facilities Special Revenue Fund loaned $8,000,000 to the Kodiak Fisheries Research Center Enterprise Fund. The loan from the Facilities Special Revenue Fund is accounted for as a long -term interfund advance, while the liability in the Kodiak Fisheries Research Center Enterprise Fund is accounted for as a long -term interfund borrowing. The interest revenue and interest expense on the debt are reported as operating transfers in/out. The advance bears interest at 7 %, and the scheduled payments for the next five fiscal years ended and thereafter are as follows: Year ending June 30, 2003 $ 145,008 ' 2004 145,008 2005 145,008 2006 120,840 $ 555,864 The Component Unit leases computer equipment under capital leases. The Hospital Enterprise Fund leases various equipment under a long -term lease agreement at the nominal annual interest rate of 5.86 %. The initial cost of such equipment included in fixed assets at June 30, 2002, ' is approximately $1,449,0000. Accumulated amortization on the leased equipment is approximately $423,000 at June 30, 2002. I I 11 27 (Continued) ' Principal Interest Total Year ending June 30: 2003 $ 2004 240,000 $ 255,000 507,500 $ 490,175 747,500 745,175 2005 275,000 471,625 746,625 2006 290,000 451,850 741,850 2007 315,000 430,675 745,675 Thereafter 5,755.000 2,851,625 8,606,625 ' $ 7,130,000 $ 5,203,450 $ 12,333,450 (8) Capital Lease Obligations The Component Unit has operating leases for equipment used at education program sites. The future minimum lease payments for these are as follows: Year ending June 30, 2003 $ 145,008 ' 2004 145,008 2005 145,008 2006 120,840 $ 555,864 The Component Unit leases computer equipment under capital leases. The Hospital Enterprise Fund leases various equipment under a long -term lease agreement at the nominal annual interest rate of 5.86 %. The initial cost of such equipment included in fixed assets at June 30, 2002, ' is approximately $1,449,0000. Accumulated amortization on the leased equipment is approximately $423,000 at June 30, 2002. I I 11 27 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 The minimum required lease payments under the capital leases for the next three fiscal years ended are as follows: Year ending June 30: 2003 2004 2005 Less amount representing interest Primary Government $ 333,336 $ 57,530 $ 390,866 333,336 31,473 364,809 194,447 — 194,447 (63,813) (13,591) (77,404) $ 797,306 $ 75,412 $ 872,718 Component Unit Total (9) Note Payable As of June 30, 2002, the Borough had the following notes payable outstanding in the Enterprise Funds: Note payable to First Union Capital Markets Corporation, due in monthly installments of $57,693, including interest (at an effective annual rate of 6.4 %); secured by equipment $ 669,967 Note payable to Alaska Department of Environmental Conservation (ADEC), to be paid within 20 years at 3.8% interest, terms to be negotiated with the first loan payment due one year following substantial completion and initiation of operation of the facility 1,241,254 Less current portion of note payable $ 1,241,254 1,911,221 669,967 28 (Continued) ' KODIAK ISLAND BOROUGH ' Notes to Financial Statements June 30, 2002 ' (10) Enterprise Fund Segment Information P �► The Borough owns and operates a Municipal Solid Waste Collection and Disposal Fund, a Hospital ' Facilities Fund (See note 17), a Kodiak Fisheries Research Center Fund, and a 911 Services Fund. Segment financial data as of and for the year ended June 30, 2002, for those funds are as follows: ' Municipal Kodiak solid waste fisheries collection Hospital research and disposal facilities 911 Services center Total Operating revenues $ 2,843,084 $ 1,325,648 $ 69,520 $ 1,497,865 $ 5,736,117 Depreciation 166,149 1,279,552 742,970 2,188.671 Operating income (loss) Operating transfers in (out) (51,284) — 30,358 (261,740) (13,932) 219,578 — (519,837) 184,720 (781,577) Net income (loss) (125,273) (84,567) (13,932) 275,262 51,490 Amortization of contributions ' in aid of construction Property, plant, and equipment 52,408 598,540 = 397.350 1,048.298 additions 9,450 102,361 111,811 Net working capital 1,068,321 (601,900) 56,590 1,180,921 1,703.932 ' Total assets Bonds and other long -term liabilities: 5,500,744 23,667,993 56,590 19,390,085 48,615,412 Payable from operating revenue 3,534,155 502,867 — 7,130,000 11.167,022 Total equity 1,584,267 22,140,720 56,590 11,820,628 35,602,205 (11) Deferred Compensation Plan The Kodiak Island Borough has a deferred compensation plan created and amended in accordance with Internal Revenue Code Section 457. The plan is available to all permanent Borough employees. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts deferred under this plan are held in a trust that was established for the exclusive benefit of plan participants. Amounts contributed to the plan by participants during the year ended June 30, 2002, was $60,811. The plan is managed by the International City Managers Association Retirement Corporation. The Borough believes that the plan does not meet the criteria in NCGA Statement No. 1, Governmental Accounting and Reporting Principles, for inclusion as a fiduciary fund. (12) Insurance and Risk Retention i The Kodiak Island Borough is exposed to numerous risks of loss associated with the operations of a government. These potential losses include, but are not limited to, employee relations and injuries, ' contracts, theft, loss or damage of property and general liability. The Borough manages its risks from these potential losses by participating in the Alaska Municipal League Joint Insurance Association, as well as purchasing commercial insurance coverage. This insurance has provided the Borough with adequate coverage in the past. There were no significant changes in insurance coverage obtained and there were no claims or settlements that exceeded insurance coverage in any of the past three fiscal years. 1 29 (Continued) WA i KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 The Borough is a member in good standing of the Alaska Municipal League Joint Insurance Association (JIA), a governmental insurance pool established by the Alaska Municipal League. Claims are covered on an occurrence basis. JIA provides risk management services, appraisal services and there is also a separate pool for policy liability. The Kodiak Island Borough Finance Director is a member of the Board of Directors of the JIA. The responsibilities of both JIA and the participants are as follows: Responsibilities of JIA JIA shall perform the following instructions in discharging its responsibilities: • Provide insurance coverage as necessary for property, including building and contents, automobile, mobile equipment and data processing equipment, casualty, including general liability, public officials' and employees' liability, auto liability and employee benefit liability; workers' compensation, including employers' liability; commercial blanket bond; and time element. • Assist each participant's assigned risk manager with the implementation of that function. • Provide loss prevention and safety and consulting services to participants as required. • Provide claims adjusting and subrogation services for claims covered by the association's joint insurance arrangement. M i Responsibilities of the Participants The Participants shall have the following responsibilities: • The Borough Assembly or appointing official of each participant shall appoint a representative as provided in Article 5, Section 2 of the bylaws and at least one alternate representative to attend member meetings. • Each participant shall appoint an employee of the participant to be responsible for the risk management function within that entity and to serve as a liaison between the participant and JIA with respect to risk management. • Each participant shall maintain an active safety officer and/or committee, and shall comply with all recommendations of JIA concerning the development and implementation of a loss control policy to prevent unsafe practices. • Each participant shall maintain its own set of records as a loss log, in all categories of loss to insure accuracy of JIA's loss reporting system. J 30 (Continued) I KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 (13) Individual Fund Disclosures Interfund Receivables and Payables A summary of interfund receivables and payables at June 30, 2002, is as follows: Receivable Payable General Fund $ 526,979 $ 4,018,722 Special Revenue Funds: Child Care Assistance Program — 27,997 Welfare to Work — 20,651 Building and Grounds — 162,559 Coastal Management — 4,275 Fire Protection Area 1 773,294 — Kodiak Arts Council — 2,805 Facilities 368,975 — Debt Service Fund — 773,294 Capital Project Fund — State Capital Grants — 208,692 Enterprise Funds: Municipal Solid Waste Collection and Disposal — 100,000 Kodiak Fisheries Research Center — 368,975 Component unit — School District 4,018,722 — $ 5,687,970 $ 5,687,970 Fund Deficits and Accumulated Deficits: The fund deficits and accumulated deficits at June 30, 2002, are as follows: Special Revenue Funds: Coastal Management $ 147 Buildings and Grounds 187,916 Kodiak Arts Council 860 Capital Project Fund — State Capital Grants 45,356 Enterprise Fund — Municipal Solid Waste Collection and Disposal 819,268 $ 1,053,547 Management intends to fund the Special Revenue and Capital Project Funds deficits in fiscal year 2002 through transfers from other funds and fund the deficit in the Enterprise Fund through an increase in service charges. 31 (Continued) n KODIAK ISLAND BOROUGH ' Notes to Financial Statements June 30, 2002 ' ' Operating Transfers Interfund operating transfers and transfers from the component unit have been made in accordance with budget ordinances. ' Funds are transferred from one fund to support expenditures of other funds in accordance with the authority established for the individual fund. Transfers between fund types and component units during the ' year ended June 30, 2002, were as follows. Transfers in School ' Special Debt Capital District Transfers General revenue service projects component out fund funds funds funds unit Fund Types: ' General Fund $ 6,830,324 $ — $ 50,670 $ 438,214 $ 10.000 $ 6.331.440 Special Revenue Funds 639,919 — 121.222 508,697 10,000 — Capital Project Fund 200,000 200.000 — — — Enterprise Fund: KFRC 519.837 — 519,837 — — — Hospital Facilities 261,740 — — 261,740 — — Component unit — School District 849,694 — — 849.694 — — ' Total transfers $ 9.301.514 $ 200,000 $ 691.729 $ 2,058,345 $ 20.000 $ 6.331,440 1 Excess of Expenditures /Expenses Over Appropriations /Budgets General Fund I � The following department expenditures exceeded their appropriations: Department Borough manager Building official Excess I � $ 27,345 17,574 $ 44,919 Special Revenue Funds The following funds' expenditures exceeded their appropriations: Fund Women's Bay Road Service Kodiak Arts Council Monashka Bay Road Service Area Excess $ 10,042 3,644 7,938 $ 21,624 I � I � I � I 1 I1 32 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 Enterprise Funds The following fund expenses exceeded their budget: Fund Municipal Solid Waste Hospital Enterprise Fund 911 Services Fund Excess $ 125,466 6,780 14,452 $ 146,698 Proprietary Funds' reconciliation of contributions in aid of construction for the year ended June 30, 2002, is as follows: Enterprise Funds Net contributions in aid of construction at beginning of year $ Amortization of contributions in aid of construction Net contributions in aid of construction at end of year $ Municipal Kodiak solid waster Fisheries collection Hospital Research and disposal facilities Center 2,455,943 $ 16,759,041 $ 11,125,838 (52.408) (598,540) (397,350) 2,403.535 $ 16,160,501 $ 10,728,488 (14) Solid Waste Landfill Closure and Postclosure Care Costs State and federal laws and regulations require that the Kodiak Island Borough place a final cover on its landfill when closed and perform certain maintenance for a number of years after closure. In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are recognized based on the future closure and postclosure care costs that will be incurred based on the date the landfill no longer accepts waste. The recognition of these landfill closure and postclosure care costs is based on the amount of the landfill used during the year. The estimated liability of landfill closure and postclosure care costs is $2,292,901 as of June 30, 2002, which is based on 67% usage (filled) of the landfill. The landfill is estimated to be filled and unusable by the year 2020. Of the total liability at June 30, 2002, an increase of $170,750 was recorded in the current year based on current year usage and changes in estimates. An estimated additional $1,122,099 will be recognized as closure and postclosure care expenses between the date of the balance sheet and the date the landfill is expected to be filled to capacity. The estimated total current cost of the landfill closure and postclosure care of $3,415,000 is based on the amount that would be paid if the landfill were closed as of June 30, 2002. However, the actual cost of closure and postclosure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. 33 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2002 The Kodiak Island Borough is required by state and federal laws and regulations to make annual contributions to finance closure and postclosure care. The Kodiak Island Borough complies with these requirements by annually recording the liability based on the estimates provided by the Kodiak Island Borough's Engineering/Facilities Director. It is anticipated that future inflation costs and additional costs that might arise from changes in postclosure requirements, due to changes in technology or more rigorous environmental regulations, for example, will be financed primarily by charges to future landfill users and secondarily by taxpayers. (15) Sale of Shuyak Island The Borough entered into an agreement in December 1995 with the Exxon Valdez Oil Spill Trustee Council to sell all of its rights on Shuyak Island for $42 million to the State of Alaska. The Borough has received $30,194,266 to date, and will receive the balance of the sale in a final payment of $11,805,734 on October 1, 2002. Six million of the proceeds were used for the construction of the Kodiak Fisheries Research Center. The remainder will be placed into a facility special revenue fund and used for future capital projects. (16) Hospital and Mental Health Facilities Hospital Facilities Enterprise Fund The Kodiak Island Borough Assembly leases the Kodiak Island Hospital and Care Center premise and equipment to Sisters of Providence d.b.a. Providence Alaska Medical Center who assumed responsibility for the hospital's operations as of April 21, 1997. The lease agreement is effective for a term of ten years from that date and contains provisions for an additional ten -year option. The hospital fixed assets, the lease income, and all other costs relating to the agreement are accounted for by the Borough in the Hospital Enterprise Fund. The agreement with Providence specifies that the Borough shall provide at least $150,000 per year for the purchase of new and replacement equipment for the hospital. The Borough is also required to fund any major maintenance and repairs projects exceeding $10,000 in cost. Additionally, the Borough receives 50% of the net revenues of the hospital, up to $600,000. Should the Borough wish to terminate the lease agreement without cause, the Borough would be required to refund a $2,000,000 down payment made on the lease in proportion to the number of years remaining on the ten -year term of the lease, at the rate of $200,000 per year for each remaining year. For accounting purposes such payment would be considered to be a penalty for the early termination of the lease. (17) Contingencies General The Borough, in the normal course of its activities, is involved in various claims and pending litigation. After consultation with legal counsel, management estimates that these matters will be resolved without material adverse effect on the Borough's future financial position or results of operations. 34 (Continued) I I KODIAK ISLAND BOROUGH Notes to Financial Statements ' June 30, 2002 Grants Amounts received or receivable from grantor agencies are subject to audit and adjustment by the grantor agencies. Any disallowed claims, including amounts already collected, would become a liability of the General or other applicable funds. In management's opinion, disallowances, if any, will not be material. ' Litigation On January 17, 2001, a judgment in the amount of $1.35 million was rendered against the Borough in the matter involving alleged misconduct of a former Borough employee. The Borough has elected to appeal the judgment. Although the ultimate outcome of the appeal is not presently determinable, it is the opinion of the Borough legal counsel that resolution will not occur for at least twelve months. Accordingly, the ' Borough has recorded the judgment in the General Long -term Debt Account Group. Additional fees and interest amount to approximately $703,000. � I 1 1 35 u 1 1 GENERAL FUND 1 The General Fund is used to account for resources traditionally associated with government which are not required legally or by sound financial management to be accounted for in any other fund. Principal sources of revenue are property taxes and intergovern- mental revenues. Primary expenditures are for general government and public service. i� 1 GENERAL FUND ' The General Fund is used to account for resources traditionally associated with government which are not required legally or by sound financial management to be accounted for in any other fund. Principal sources I' of revenue are property taxes and intergovernmental revenues. Primary expenditures are for general government, public services and debt service. � I � I � I u � I � I Exhibit A -1 KODIAK ISLAND BOROUGH General Fund Balance Sheets June 30, 2002 and 2001 Assets 2002 2001 7,989 4,039,690 245,960 45,890 1,335,028 347,523 (15,828) 86,931 Equity in central treasury Temporary investments Accounts receivable Due from State of Alaska Due from other funds Property taxes: Delinquent taxes Allowance for uncollectible delinquent taxes Accrued interest Total Liabilities and Fund Balances Liabilities: Accounts payable Payroll taxes and employee benefits Deferred revenues Customer deposits Due to the City of Kodiak Due to component units Due to other funds Total liabilities Fund balances: Unreserved Designated for subsequent year expenditures Undesignated Total fund balances Total 282,864 5,946,139 183,048 64,651 526,979 334,839 (15,828) 1,980 $ 7,324,672 6,093,183 $ 101,184 83,736 268,193 4,800 9,200 4,018,722 108,598 41,199 270,243 22,022 4,017,798 213,645 4,485,835 4,673,505 595,305 — 2,243,532 1,419,678 2,838,837 1,419,678 $ 7,324,672 6,093,183 36 Exhibit A -2 KODIAK ISLAND BOROUGH General Fund Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Revenues: Property taxes: Real Personal Motor vehicle Penalty and interest Total property taxes Severance taxes: Fish Mining Logging Total severance taxes Intergovernmental: State sources: State shared revenue Municipal assistance Raw fish tax Payments in lieu of taxes Electric Co-op tax Total state sources Federal sources: Payments in lieu of taxes Miscellaneous Total federal sources Total intergovernmental revenue Licenses, permits, fees, and other local revenues: Building and trailer permits Subdivision and zoning fees Sale of copies Miscellaneous Total licenses, permits, fees, and other local revenues Investments and property: Interest income Total investments and property Total revenues 2002 Variance- favorable 2001 Budget Actual (unfavorable) Actual $ 5,882,370 5,928,208 45,838 5,808,715 1,081,890 1,021,928 (59,962) 1.130,975 180,000 194,793 14,793 178,783 150,000 144,351 (5,649) 162,478 7.294.260 7,289.280 (4,980) 7,280,951 860,000 674,613 (185,387) 791.234 10.000 7.444 (2.556) 6.980 20.000 46,007 26,007 56,019 890.000 728.064 (161,936) 854,233 148,820 109,221 (39,599) 112,492 119,800 119,829 29 110,760 1,092,040 1,364,248 272,208 1,006,948 20,000 18,289 (1,711) 18,731 12,000 26.854 14,854 13,624 1,392.660 1,638,441 245,781 1,262,555 480,000 1,337,974 857,974 473,737 420,200 420,825 625 399,191 900,200 1,758.799 858.599 872.928 2,292,860 3,397,240 1.104.380 2,135,483 60,000 68,126 8,126 66,118 4,000 7,030 3,030 4,966 23,100 19,338 (3,762) 20,594 39,570 142,264 102,694 48,396 126,670 236,758 110,088 140,074 272,200 294,675 22,475 583,633 272,200 294,675 22,475 583,633 10,875,990 11,946,017 1,070,027 10,994,374 37 (Continued) I ' Exhibit A -2 KODIAK ISLAND BOROUGH ' General Fund Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances ' Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) 1 2002 Variance- favorable 2001 ' Budget Actual (unfavorable) Actual Expenditures: Borough assembly $ 161,390 130,303 31,087 137,000 1 Borough manager 182,980 210,325 (27,345) 159,275 Borough clerk 285,380 265,108 20,272 263,191 Borough attorney 259,250 196,185 63,065 435,337 Finance department 455,910 425,306 30,604 389,583 ' Assessing department 275,690 179,816 95,874 288,958 Engineering/facilities department 126,330 103,878 22,452 85,310 Community development department 380,090 379,853 237 377,374 ' Building official 110,510 128,084 (17,574) 129,908 Economic development 81,160 68,653 12,507 38,000 General and administration 286,180 270,005 16,175 239,408 Emergency preparedness 5,500 2,574 2,926 3,002 ' School District support 602,000 588,590 13,410 594,246 Health and sanitation department 286,920 280,847 6,073 223,422 Education, culture, and recreation 155,780 147,227 8,553 148,351 Management information systems 615,630 519,780 95,850 293,891 ' Total expenditures 4,270,700 3,896,534 374,166 3,806,256 Excess of revenues over expenditures 6,605,290 8,049,483 1,444,193 7,188,118 ' Other financing sources (uses): Operating transfers in from other funds 200,000 200,000 - 18,154 Operating transfers to other funds (473,850) (498,884) (25,034) (639,370) Operating transfers to component unit (6,331,440) (6,331,440) - (5,966,440) Total financing uses (6,605,290) (6,630,324) (25,034) (6,587,656) Excess of revenues and transfers in over expenditures and transfers out $ - 1,419,159 1,419,159 600,462 Fund balances, at beginning of year 1,419,678 1,142,515 ' Residual equity transfer out: Mental Health Center Fund - (323,299) Fund balances, at end of year $ 2,838,837 1,419,678 38 Exhibit A -3 Expenditures: Borough assembly: Personnel services Fringe benefits Support goods and services Political lobbyist Total Borough assembly Borough Manager's office: Personnel services Fringe benefits Support goods and services Allocated to projects Total Borough Manager's office Borough clerk: Personnel services Fringe benefits Support goods and services Total Borough clerk Borough attorney: Legal fees Support goods and services Total Borough attorney Finance department: Personnel services Fringe benefits Support goods and services Capital outlay Allocated to projects Total finance department Assessing department: Personnel services Fringe benefits Support goods and services Capital outlay Allocated to projects Total assessing department KODIAK ISLAND BOROUGH General Fund Schedule of Expenditures and Transfers Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) 2002 Budget $ 21,600 $ 1,790 78.000 60,000 161,390 121,320 34,640 32,020 (5.000) 150,470 41,680 93.230 285.380 223,250 36.000 259.250 Variance - favorable 2001 Actual (unfavorable) Actual 21.600 $ - $ 1,738 52 44.965 33,035 62,000 (2.000) 130,303 31.087 48.062 144,535 (23.215) 37.844 (3.204) 32,946 (926) 210,325 (27.345) 141.079 9.391 27.576 14.104 96.453 (3.223) 265,108 20.272 (95.805) 175.188 48.062 20.997 15.003 196.185 63.065 370.460 358,898 101,220 89,758 77.035 73.613 3,000 - (95.805) (96.963) 455.910 425.306 216,880 144,979 53.010 28,948 41,800 42,889 1,000 - (37.000) (37,000) 11.562 11.462 3,422 3.000 1.158 30.604 71.901 24,062 (1,089) 1.000 95.874 20.800 2.250 51.950 62.000 137,000 111.806 23.303 29.166 (5.000) 159.275 132.604 32.346 98.241 263.191 411,683 23.654 435.337 353.567 92.121 73.635 (129.740) 389.583 201,768 50.119 37,071 39 (Continued) KODIAK ISLAND BOROUGH General Fund Schedule of Expenditures and Transfers Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Exhibit A -3 40 (Continued) 2002 Variance- favorable 2001 Budget Actual (unfavorable) Actual Engineering/facilities department: Personnel services $ 170,860 $ 68,334 $ 102,526 $ 55,254 Fringe benefits 50,990 16,188 34,802 13,442 Contracted services - 4,460 (4,460) 751 Support goods and services 64,480 54,896 9,584 55,863 Allocated to projects (160,000) (40,000) (120,000) (40,000) Total Engineering/facilities department 126,330 103,878 22,452 85,310 Community development department: Personnel services 276,680 288,694 (12,014) 270,851 Fringe benefits 81,530 72,867 8,663 67.619 Support goods and services 57,880 53.655 4,225 54,755 Allocated to projects (36,000) (35,363) (637) (15,851) Total Community development department 380,090 379,853 237 377,374 Building official: Contracted services 105,000 122,377 (17,377) 124,606 Support goods and services 5,510 5,707 (197) 5,302 Total building official 110,510 128,084 (17,574) 129,908 Economic development: General services: Contracted services 41,000 28,500 12,500 5,000 Contributions: Kodiak Salmon Workgroup 7,160 7,153 7 - Kodiak Chamber of Commerce 33,000 33,000 - 33,000 Total economic development 81,160 68,653 12.507 38,000 General and administration: Fringe benefits 45,310 77,746 (32,436) 45,428 Professional fees 115,000 81,058 33,942 1 17,408 Support goods and services 125,870 111,201 14,669 76,572 Total general and administration 286.180 270,005 16,175 239,408 Emergency preparedness: Support goods and services 5.500 2,574 2,926 3.002 Total emergency preparedness 5.500 2,574 2,926 3.002 40 (Continued) Fl School district support: Data processing Mental health services School crossing guard Audit expense Support goods and services Total School district support Health and sanitation department: Kodiak State Fair Animal Control Mental Health Center Council on alcoholism State Health Services villages State Health Services KANA Women's Resource Crisis Center American Red Cross Kodiak Baptist Mission Small World Daycare Special Olympics Health center support Senior citizen support Kodiak respite care The Salvation Army Brother Francis Shelter Nonprofit organizations Total health and sanitation department Education, culture, and recreation: KMXT Public Radio Historical Society Summer Basketball Kodiak Art Council Village Libraries Chiniak Public Library City of Kodiak Library Public Libraries Head Start Kodiak College Kodiak Little League Santa to the Villages Kodiak Island Sportsmen KANA Youth Olympics KANA Family Center Kodiak Youth Services Network St. Mary's Girl Scouts Nonprofit organizations Total education, culture and recreation KODIAK ISLAND BOROUGH General Fund Schedule of Expenditures and Transfers Budget and Actual Year ended June 30. 2002 (With comparative totals for 2001) 2002 oVL.VVV mi.. Variance - 15.000 52.000 favorable Budget Actual (unfavorable) $ 126.650 $ 126,650 S - $ 381,350 381,345 5 12.000 10.250 1,750 37,000 31.924 5.076 45.000 38,421 6.579 oVL.VVV mi.. 15.000 15.000 52.000 60.000 4,753 4,753 28,756 28.756 8,883 8.883 2.535 2,535 38.684 38.684 2.500 2.500 33.268 33.268 8,000 8.000 7,000 7,000 3.500 3.444 24,704 24.704 5.000 5.000 8,500 8.500 29.820 29.820 14.017 - 286,920 280.847 7.609 7,609 4,500 4.500 15.000 15.000 21.000 21,000 7.583 7,583 60.000 60.000 5,600 5,600 2,300 2,300 2,500 2.500 12.000 12,000 5,000 5.000 2,085 2.085 2,050 2,050 8,553 - 41 ( 8.000) 56 6,073 Exhibit A -3 2001 126,645 381,345 49,339 36,917 594,246 52.000 4.788 28.816 6.385 2.554 36.807 1,750 17,446 7,000 3,672 24,704 5,000 7,500 25.000 223.422 7.500 4,968 5.000 15.000 15.000 3,000 3,000 7.583 60,000 5.000 2.300 2,000 12,000 5,000 1,000 8.553 148.351 (Continued) rj I KODIAK ISLAND BOROUGH General Fund Schedule of Expenditures and Transfers Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Exhibit A -3 42 (Continued) 2002 Variance - favorable 2001 Budget Actual (unfavorable) Actual Management information systems: Personnel services $ 193,530 $ 167,086 S 26.444 $ 186.812 Fringe benefits 50,670 43,239 7,431 49,925 Contracted services — 14,729 (14,729) — Support goods and services 271,200 228,704 42.496 203.207 Capital outlay 238,880 204,672 34,208 10,092 Allocated to projects (138,650) (138.650) — (156.145) Total management information systems 615,630 519,780 95.850 293.891 Total expenditures 4,270,700 3.896.534 374.166 3.806.256 Other financing sources (uses): Operating transfers in from other funds: Debt service fund — — — 18,154 Capital projects fund 200,000 200,000 — — Operating transfers out to other funds: Special revenue funds: Building and grounds (50,670) (50,670) — (29,130) Debt service funds: Schools (393,180) (393,180) — (610.240) Other (20,000) (45.034) (25,034) — Capital projects funds: Various Borough projects (10,000) (10,000) — — Operating transfers to component units: Kodiak Island Borough School District (6,331,440) (6.331,440) — (5.966.440) Total financing uses (6,605,290) (6.630.324) (25,034) (6,587.656) Total expenditures and transfers $ 10,875.990 10.526.858 349,132 10.393.912 42 (Continued) SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues from specific sources which by law are restricted to finance particular func- tions and activities. SPECIAL REVENUE FUNDS �I it 1 I� 1 The Fire Protection Area No. 1 Fund accounts for the activities related to fire suppression and fire prevention services to the citizens of the service area. The Womens Bay Fire Department Fund accounts for the activities related to fire suppression and fire prevention services to the citizens of the service area. The Kodiak Airport Fire District Fund accounts for the activities related to fire suppression and fire prevention services to the citizens of the service area. The Monashka Bay Road Service Area Fund accounts for the activities related to road services within the service area. The Service District No. 1 Fund accounts for the activities related to maintenance service to roads within the district, including snow removal, ditching and grading. The Womens Bay Service Area Fund accounts for the activities related to maintenance service to roads within the service area, including snow and ice removal, ditching and culvert work. The Bay View Road Service Area Fund accounts for the activities related to road services within the service area. The Service Area No. 2 Fund accounts for the activities related to water and sewer services in the service area. This fund is in the design stage at present. The Coastal Management Fund accounts for State of Alaska and Federal grants related to the effects of coastal energy development impacts. Expenditures of these grants are for comprehensive plans, coastal sensitivity analysis, outer continental shelf impact analysis, ordinance update, and planning and zoning. The Childcare Assistance Fund accounts for a State of Alaska grant to finance day care for children of low- income employed families. The Welfare to Work Fund accounts for pass through grant monies for local agencies to help individuals become part of the work force. � I I I I I SPECIAL REVENUE FUNDS ' The Local Emergency Planning Committee Fund accounts for State of Alaska grants provided for regional emergency preparation, response, and mitigation planning. This fund was closed in 2002. The Land Sales Fund accounts for the disposal of Borough -owned lands. The proceeds of land disposals are generally used for the management of Borough lands and the repairs and maintenance of Borough school buildings. The Building and Grounds Fund accounts for the operations and maintenance of certain buildings and grounds owned by the Borough which are jointly shared with the City of Kodiak, the Kodiak Island ' Borough School District, and certain nonprofit community organizations. The Woodland Acres Street Light Service Area Fund accounts for activities related to the provision of ' street lighting within the service area. The Kodiak Arts Council Fund accounts for activities related to the facilitation of the arts in the Kodiak ' community. The Facilities Fund accounts for the proceeds from the sale of Shuyak Island. The single most important goal is to preserve the principal of the fund. Interest earnings, after inflation proofing, can be used for debt ' service, building insurance and capital projects. The Tourism Development Fund accounts for the collection of the Borough Transient Accommodation ' Tax (Bed Tax) and its subsequent transfer to the Kodiak Island Convention and Visitor Bureau. 1 KODIAK ISLAND BOROUGH Special Revenue Funds Combining Balance Sheet June 30, 2002 (With comparative totals for 2001) 43 (Continued) Fire and Road Service Areas Fire Road Fire Womens Kodiak Monashka Protection Bay Fire Airport Fire Bay Road Service Assets Area No. 1 Department District Service Area District No. 1 Equity in central treasury $ 137,475 $ 236,005 $ 28,670 $ 54,685 $ 255,802 Temporary investments - - - - - Receivables: State of Alaska - - - - - Federal Government - - - - - Land sales contracts, due within one year - - - - - Accrued interest - - - - - Other 5,317 2,399 1,604 442 2,646 Due from other funds 773,294 - - - - Long -term interfund advances - - - - - Land sale contracts, due after one year - - - - - Total $ 916,086 $ 238,404 $ 30,274 $ 55.127 $ 258,448 Liabilities and Fund Balances Liabilities: Accounts payable $ 2,297 $ 4,719 $ - $ - $ - Employee benefits accrued and withheld 1,353 - - - - Customer deposits - 275 - - - Deferred revenues - - - - - Due to other funds - - - - Total liabilities 3.650 4,994 - - - Fund Balances (deficits): Reserved: Long -term interfund advances - - - - - Unreserved: Designated for subsequent year expenditures 96,600 10,000 120 - 64,050 Undesignated 815,836 223,410 30,154 55,127 194,398 Total fund balances (deficits) 912,436 233,410 30,274 55,127 258,448 Totals $ 916,086 $ 238,404 $ 30,274 $ 55.127 $ 258,448 43 (Continued) Exhibit B -1 44 (Continued) Federal and State grant programs Child care Wotnens Bay Bay View Road Service Area Coastal assistance Welfare to Service Area Service Area No. 2 management program work program $ 184,443 $ 3,902 $ 3,986 S - S - S - - - - 8,828 78,512 35,066 - - - - - 4,388 3,254 42 - - - 381 S S 3,986 S $ $ 39,835 78.512 8,828 3.944 $ 187,697 $ 4,700 $ 36,848 $ 19,184 - - - 4,275 27,997 20,651 - - - 8,975 64,845 39,835 187,697 3,944 3,986 (147) 13,667 - 187,697 3,944 3,986 (147) 13,667 - $ 187,697 $ 3,944 $ 3,986 $ 8,828 $ 78,512 $ 39,835 44 (Continued) KODIAK ISLAND BOROUGH Special Revenue Fund Combining Balance Sheet June 30, 2002 (With comparative totals for 2001) 45 (Continued) Woodland Acres Street Buildings and Light Service Kodiak Arts Assets Land sales Grounds Area Council Facilities Equity in central treasury S 728,447 S — $ 34,430 $ — $ 418,072 Temporary investments — — — — 18,341,171 Receivables: State of Alaska — — — — — Federal Government — — — — — Land sales contracts, due within one year 6,223 — — — — Accrued interest — — — — 30,443 Other — 500 — 4,175 — Due from other funds — — — — 368,975 Long-term interfund advances — — — — 7,130,000 Land sale contracts, due after one year 86,532 — — — — Total S 821,202 S 500 S 34.430 S 4,175 $ 26,288,661 Liabilities and Fund Balances liabilities: Accounts payable $ 1,248 $ 25,363 $ 450 $ — $ — Employee benefits accrued and withheld — 494 — — — Customer deposits — — — — — Deferred revenues 92,755 — — 2,230 — Due to other funds — 162,559 — 2,805 — Total liabilities 94,003 188,416 450 5,035 — Fund balances (deficits): Reserved: Long -term interfund advances — — — — — Unreserved: Designated for subsequent year expenditures — — 7,000 — — Undesignated 727,199 (187,916) 26,980 (860) 26,288,661 Total fund balances (deficits) 727,199 (187,916) 33,980 (860) 26,288,661 Total $ 821,202 S 500 34,430 $ 4,175 $ 26,288,661 45 (Continued) Exhibit B -1 Tourism Totals Development 2002 2001 S 19,109 S 2,105,026 $ 1,399,733 — 18,341,171 14,358,012 — 122,406 128,391 — 4,388 36,819 — 6,223 16,306 — 30,443 — 9,644 30,404 182,060 — 1,142,269 357,912 — 7,130,000 7,370,000 — 86,532 25,742 $ 28,753 $ 28,998,862 $ 23,874,975 $ — $ 94,809 $ 119,651 — 1,847 283 350 625 525 — 94,985 42,048 — 218,287 338,188 350 410,553 500,695 — — 7,370,000 — 177,770 178,800 28,403 28,410,539 15,825,480 28,403 28,588,309 23,374,280 $ 28,753 $ 28,998,862 $ 23,874,975 46 (Continued) KODIAK ISLAND BOROUGH Special Revenue Funds Combining Statement of Revenues. Expenditures. Transfers. and Changes in Fund Balances (Accumulated Deficits) June 30, 2002 (With comparative totals for 2001) Revenues: Property taxes State sources Federal sources Land sale proceeds Licenses, permits, fees, and other local revenues Investments and property Other Total revenues Expenditures: Community development department General and administration Health and sanitation department Services district maintenance Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses): Operating transfers in from other funds Operating transfers out to other funds Net other financing sources (uses) Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses Fund balances (accumulated deficits), at beginning of year Residual equity transfers in (out) Fund balances (accumulated deficits), at end of year 93,155 33,272 Fire and Road Service Areas (6.258) 29,388 Fire 819,281 200,138 Road 61.385 Fire Womens Kodiak Nlonashka ;0,274 $ 55.127 S Protection Bay Fire airport Fire Bap Road Service Womens Bay Area No. 1 Department District Service Area District No. I Service Area $ 289,922 $ 55.927 S 13,727 $ 22 ,601 S 13 1.(X)(, S 85,947 1,685 685 — 1.081 4,265 5,184 8,367 11.951 — — 290 20,000 21,323 4,928 972 1.398 6.383 4.883 321,297 73,491 14.699 25.080 141.944 116,014 225,478 59.211 70 63 4,102 1.294 31.275 108.454 111.928 225.478 59,211 70 31,338 112,556 113.222 95.819 14,280 14,629 (6,258) 29.388 2,792 — 18,992 — — — — (2,664) (18.392) (600) (2,664) 18.992 (18,392) (600) 93,155 33,272 (3,763) (6.258) 29,388 2,192 819,281 200,138 34,037 61.385 229.060 185,505 $ 912. 436 S 1 2 ;;,410 S ;0,274 $ 55.127 S 258,448 $ 187.607 47 (Continued) Exhibit B -2 48 (Continued) Federal and State Grant Programs Woodland Child Care Welfare Acres Street Bav View Road Service Area Coastal Assistance to Work Buildings and Light Service Kodiak Arts Service Area No. 2 Management Program Program Land Sales Grounds Area Council $ 5,338 $ — $ — $ — $ — $ — $ — $ — $ — 394 — 24.805 519.438 117,600 — — — - - _ — — 17,101 — — — - - — — — — 585,361 — — — — — — — — 22,150 — — 54.441 105 88 — — — — 393,900 783 - - 280 5.837 88 24,805 519.438 134,701 607.791 393.900 783 54.441 — — 24.805 — — — — — — 15 — — — 134,701 71,197 485,856 5.417 55,364 — — — 519,438 — — — — — 5,219 — — — — — — 5,234 24,805 519.438 134,701 71.197 485.856 5.417 55.364 603 88 — 536,594 (91,956) (4,634) (923) — — — — — — 152.900 — - - — (10.000) (1,113) - - (10.000) 151,787 60', 88 -- — — 526.594 59.831 (4,634) (923) 3.331 3.898 (147) 13.667 — 200.605 (247,747) 38.614 63 $ A44 S 3.986 $ (1 47) $ 13.667 $ — $ "_7.199 $ (187.916) (860, 48 (Continued) KODIAK ISLAND BOROUGH Special Revenue Funds Combining Statement of Revenues. Expenditures. Transfers and Changes in Fund Balances (Accumulated Deficits) June 30. 2002 (With comparative totals for 2001) I � Revenues: Property taxes State sources Federal sources Land sale proceeds Licenses, permits, fees, and other local revenues Investments and property Other Total revenues Expenditures: Community development department General and administration Health and sanitation department Services district maintenance Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Operating transfers in from other funds Operating transfers out to other funds Net other financing sources (uses) Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses Fund balances (accumulated deficits), at beginning of year Residual equity transfers in (out) Fund balances (accumulated deficits), at end of year Exhibit B•2 I 49 Tourism Totals Facilities Development 2002 2W1 $ 604.468 $ 578,661 — — 675,137 666,878 — — 17,101 40,792 4,000,000 — 4.585,361 4.112,128 — 50,671 167.870 132.382 568.339 — 1,003.102 1211.456 280 12.849 4,568.339 50.671 7.053.319 6.755.146 — 47,213 72,018 66.357 — — 1,042.768 1,216,323 — — 519,438 463,388 256.876 14.306 47.213 1,891,100 1.760.374 4,568,339 3.458 5.162,219 4.994.772 519,837 — 691,729 657,309 (607,150) (639.919) (788.061) (87.313) 51,810 (130.752) 4.481,026 3.458 5.214,029 4.864.020 21,807,635 24,945 23.374,280 18,186.961 — 323,299 5 26. 4 28.40: 5 78.588.309 C :,3'74280 49 KODIAK ISLAND BOROUGH Special Revenue Funds Fire and Road Service Areas - Fire Protection Area No. 1 Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Revenues: Property taxes State sources Licenses, permits, fees, and other local revenues Investments and property Total revenues Expenditures: General and administration: Fire chief Volunteers Fringe benefits Contracted services Support goods and services Capital outlay Depreciation Total expenditures Excess of revenues over expenditures Other financing uses: Operating transfers out to other funds: Debt service funds Total other financing uses Excess of revenues over expenditures Fund balances, at beginning of year Fund balances, at end of year Exhibit B -3 50 2002 Variance- favorable 2001 Budget Actual (unfavorable) Actual $ 287.500 $ 289,922 $ 2,422 $ 279,146 5,000 1,685 (3,315) 9,320 9,500 8,367 (1,133) 5,503 - 21,323 21,323 49,403 302,000 321,297 19,297 343,372 65,000 56,583 8,417 56,541 17,000 14,125 2,875 9,185 25,500 12,574 12,926 11,288 12,000 3,708 8,292 578 100,900 129,609 (28,709) 84,891 111,000 8,879 102,121 - 25,000 - 25,000 - 356,400 225,478 130,922 162,483 (54,400) 95,819 150,219 180,889 - (2,664) (2,664) (985) - (2,664) (2,664) (985) $ (54,400) 93,155 $ 147,555 179,904 819,281 639,377 $ 912,436 $ 819,281 50 KODIAK ISLAND BOROUGH Special Revenue Funds Fire and Road Service Areas - Womens Bay Fire Department Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) 2002 Exhibit B -4 Budget Revenues: Property taxes $ 52,000 $ State sources - Licenses, permits, fees, and other local revenues 9,000 Investments and property 4,500 Total revenues 65,500 Expenditures: 2001 General and administration: (unfavorable) Personnel services 1,700 Fringe benefits 3,000 Professional services 2,000 Support goods and services 59,400 Capital outlay - Total expenditures 66,100 Excess (deficiency) of revenues 6,889 over (under) expenditures (600) Other financing sources: 14.280 Operating transfers in from other funds: 12,072 Special revenue funds 600 Excess of revenues and other financing sources over expenditures $ - Fund balances, at beginning of year 33,272 Fund balances, at end of year 200,138 73.491 Variance - 72,394 favorable 2001 Actual (unfavorable) Actual 55,927 $ 3,927 $ 52,899 685 685 259 11,951 2,951 7,870 4.928 428 11.366 73.491 7,991 72,394 624 1,076 931 287 2,713 - 85 1,915 1,701 58,215 1,185 43,384 - - 14,306 59,211 6,889 60.322 14.280 14,880 12,072 18,992 18,392 - 33,272 $ 33,272 12,072 200,138 188,066 $ 233,410 $ 200,138 51 KODIAK ISLAND BOROUGH Special Revenue Funds Fire and Road Service Areas – Kodiak Airport Fire District Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) 2002 Variance- favorable Budget Actual (unfavorable) Revenues: Property taxes $ 27,910 $ 13,727 $ (14,183) $ Investments and property 100 972 872 Total revenues 28,010 14,699 (13,311) Expenditures: General and administration: Contracted services Support goods and services Total expenditures Excess of revenues over expenditures Other financing sources: Operating transfers out to other funds: Womens Bay Fire District Excess (deficiency) of revenues and other financing sources over expenditures Fund balances, at beginning of year Fund balances, at end of year Exhibit B -5 2001 Actual 13,995 1,906 15,901 27.890 — 27,890 14,181 28,010 70 27,940 — 14,629 14,629 (18,392) (18,392) $ — (3,763) $ (3,763) 14,270 1,631 1,631 32,406 $ 34,037 52 KODIAK ISLAND BOROUGH Special Revenue Funds Fire and Road Service Areas – Monashka Bay Road Service Area Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Revenues: Property taxes State sources – shared revenue Investments and property Total revenues Expenditures: General and administrative: Personnel services Support goods and services Service district maintenance: Snow removal/sanding Road grading/ditching Repairs and maintenance Total expenditures Excess (deficiency) of revenues over expenditures Fund balances, at beginning of year Fund balances, at end of year Exhibit B -6 (6,258) $ (6,258) 16,102 53 2002 Variance- favorable 2001 Budget Actual (unfavorable) Actual $ 19,690 $ 22,601 $ 2.911 $ 22,338 1,410 1,081 (329) 886 2.300 1,398 (902) 3,258 23,400 25,080 1.680 26,482 500 — 500 — 900 63 837 81 12,000 11,539 461 3,996 8,500 19,736 (11,236) 6,303 1,500 — 1,500 — (6,258) $ (6,258) 16,102 53 Exhibit B -7 KODIAK ISLAND BOROUGH Special Revenue Funds Fire and Road Service Areas - Service District No. I Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 200 1) ifily? Revenues: Property taxes State sources Licenses, permits, fees, and other local revenues Investments and property Total revenues Expenditures: General and administrative: Personnel services Support goods and services Service district maintenance: Snow removaUsanding Road grading/ditching Repairs and maintenance Total expenditures Excess (deficiency) of revenues over expenditures Fund balances, at beginning of year Fund balances, at end of year 139,000 141,944 2,944 4,150 52,000 65,000 30,000 201,150 $ (62,150) 54 2001 124.293 4,051 349 142,732 2,972 1,178 Variance- 1,130 50,870 favorable Budget Actual (unfavorable) 21,924 8,076 $ 124,000 $ 131,006 $ 7,006 $ 5,000 4,265 (735) 2,000 290 (1,710) 8,000 6,383 (1,617) 139,000 141,944 2,944 4,150 52,000 65,000 30,000 201,150 $ (62,150) 54 2001 124.293 4,051 349 142,732 2,972 1,178 3,408 1,130 50,870 647 85,007 (20,007) 16,415 21,924 8,076 44,329 1,523 48,477 35,131 112,556 88,594 99,930 29,388 $ 91,538 42,802 4 L�O,Y FO KODIAK ISLAND BOROUGH Special Revenue Funds Fire and Road Service Areas - Womens' Bay Service Area Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Exhibit B -8 2002 Variance- favorable Budget Actual (unfavorable) Revenues 85,947 $ 5,184 20,000 4,883 116,014 7,447 $ 5,184 (397 ) Property taxes $ 78,500 State sources - shared revenue - Licenses, permits, fees, and other 13,459 local revenues 20,000 Investments and property 5,280 Total revenues 103.780 Expenditures: (10.042) Service district maintenance: Snow removal/sanding 30,000 Road grading /ditching 23,000 Repairs and maintenance 29,265 Support goods and services 20,915 Total expenditures 103,180 Other financing uses: $ Operating transfers out to other funds: Womens Bay Fire Department (600) Excess of revenues over expenditures $ - Fund balances, at beginning of year Fund balances, at end of year 2001 80,956 4,821 20,000 117.008 56,556 (26,556) 12,701 16,252 6,748 13,459 39,120 (9,855) 75,350 1,294 19,621 865 113,222 (10.042) 102,375 (600) - - 2,192 $ 2,192 14,633 185,505 170,872 $ 187,697 $ 185,505 55 KODIAK ISLAND BOROUGH Special Revenue Funds Fire and Road Service Areas – Bay View Road Service Area Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Exhibit B -9 56 2002 Variance- favorable 2001 Budget Actual (unfavorable) Actual Revenues: Property taxes $ 4.600 $ 5,338 $ 738 $ 5,034 State sources – shared revenue 670 394 (276) 371 Investments and property 200 105 (95) 242 Total revenues 5,470 5,837 367 5,647 Expenditures: Service district maintenance: Snowremoval/sanding 2,500 3,806 (1,306) 879 Road grading/ditching 1,970 1,413 557 1,841 Repairs and maintenance 1,000 — 1,000 1,823 Support goods and services — 15 (15) 17 Total expenditures 5,470 5,234 236 4.560 Excess of revenues over expenditures $ — 603 $ 603 1,087 Fund balances, at beginning of year 3,341 2,254 Fund balances, at end of year $ 3,944 $ 3.341 56 KODIAK ISLAND BOROUGH Special Revenue Funds Fire and Road Service Areas – Service Area No. 2 Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Exhibit B -10 57 2002 Variance - favorable 2001 Budget Actual (unfavorable) Actual Revenues: Investments and property $ 200 $ 88 $ (112) $ 203 Expenditures: Support goods and services 200 — 200 — Service district maintenance — — — 2 Total expenditures 200 — 200 2 Excess of revenues over expenditures $ — 88 $ S8 201 Fund balances, at beginning of year 3,898 3,697 Fund balances, at end of year $ 3,986 $ 3,898 57 KODIAK ISLAND BOROUGH Special Revenue Funds Coastal Management Statement of Revenues, Expenditures, Transfers, and Changes in Fund Deficits Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) 2002 Exhibit B -11 Budget Revenues: State sources – grants $ 25,940 Total revenues 25,940 Expenditures: Community development department: Planning and zoning 25,940 Total expenditures 25.940 Excess of revenues over expenditures $ — Fund deficits, at beginning of year Fund deficits, at end of year Variance- favorable 2001 Actual (unfavorable) Actual 24,805 $ (1,135) $ 28,440 24,805 (1,135) 28,440 24,805 1.135 28.440 24.805 1.135 28.440 (147) (147) $ (147) $ (147) 58 KODIAK ISLAND BOROUGH Special Revenue Funds Child Care Assistance Program Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) 2002 Exhibit B -12 Variance- favorable 2001 Budget Actual (unfavorable) Actual Revenues: State sources – grants $ 540,049 $ 519,438 $ (20,611) $ Total revenues 540,049 Expenditures: Health and sanitation department: Personnel 59,240 Professional services 464,194 Support goods and services 16,615 Total expenditures 540,049 Excess of revenues over expenditures $ — Fund balances, at beginning of year Fund balances, at end of year \GV,V l l / 59,212 28 445,971 18,223 14,255 2,360 519,438 20,611 463,388 463,388 55,307 396,384 11,697 463,388 .p 1J,VVl 59 KODIAK ISLAND BOROUGH Special Revenue Funds Welfare to Work Program Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) 2002 Revenues: State sources – grants Federal sources – grants Total revenues Expenditures: General and administration: Personnel services Professional services Support goods and services Total expenditures Excess of revenues over expenditures Fund balances, at beginning of year Fund balances, at end of year Exhibit B -13 13,585 6,963 6,622 170,033 126,821 43,212 974 917 57 184,592 134,701 49,891 — 60 4,740 169,829 1,192 Variance - favorable 2001 Budget Actual (unfavorable) Actual $ 117,600 $ 117,600 $ — $ 134,969 66,992 17,101 (49,891) 40,792 184,592 133,701 (49,891) 175,761 13,585 6,963 6,622 170,033 126,821 43,212 974 917 57 184,592 134,701 49,891 — 60 4,740 169,829 1,192 Exhibit B -14 KODIAK ISLAND BOROUGH Special Revenue Funds L.E.P.C. Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 200 1) 2002 Variance- favorable 2001 Budget Actual (unfavorable) Actual Revenues: State sources: L.E.P.C. grant Total revenues Expenditures: General administration: Contracted services Support goods and services Total expenditures (Deficiency) excess of revenues (under) over expenditures Fund balances, at beginning of year Fund balances, at end of year 19,500 19,500 — — — 16,877 2,623 — — — 19,500 61 KODIAK ISLAND BOROUGH Special Revenue Funds Land Sales Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Revenues: Land sale proceeds Licenses, permits, fees, and other local revenues Gravel sales Other Total revenues Expenditures: General and administration: Personnel services Contracted services Support goods and services Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources: Operating transfers out to other funds: Capital projects fund Net other financing sources Excess (deficiency) of revenues and other financing sources over expenditures Fund balances, at beginning of year Fund balances, at end of year Exhibit B -15 (10,000) (10,000) - (10,000) (10,000) - $ (45,250) 526,594 $ 571,844 29,166 171,439 $ 200,605 62 2002 Variance - favorable 2001 Budget Actual (unfavorable) Actual $ 14,500 $ 585,361 $ 570,861 $ 112,128 1,000 1,000 - 1,000 25,000 21,150 (3,850) 16,406 - 280 280 - 40,500 607,791 567.291 129,534 52,500 53,091 (591) 40,000 7,000 6,671 329 36,160 16,250 11,435 4,815 24,208 75,750 71,197 4,553 100,368 (35,250) 536,594 571,844 29,166 (10,000) (10,000) - (10,000) (10,000) - $ (45,250) 526,594 $ 571,844 29,166 171,439 $ 200,605 62 KODIAK ISLAND BOROUGH Special Revenue Funds Buildings and Grounds Statement of Revenues, Expenditures, Transfers, and Changes in Fund Deficits Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Revenues: Investments and property: Rental Total revenues Expenditures: General and administration: School buildings Borough building Apartments Parks operation and maintenance Total expenditures Deficiency of revenues under expenditures Other financing sources (uses): Operating transfers in (out) from (to) other funds: General Fund Facilities Fund Debt Service Fund Other Net other financing sources Excess of revenues and other financing sources over expenditures Fund deficit, at beginning of year Fund deficit, at end of year Exhibit B -16 50,670 50,670 - 102,230 102,230 - (1,113) (1,113) 152,900 151,787 (1,113) $ - 59,831 $ 59,831 0 1-.-, 63 29,130 92,000 121,984 58,580 (306,327) $ (247,747) 2002 Variance - favorable 2001 Budget Actual (unfavorable) Actual $ 394.080 $ 393.900 $ (180) $ 359,253 394.080 393.900 (180) 359,253 140,670 186,260 (45,590) 89,650 377,440 271,927 105,513 304,984 1,130 3,227 (2,097) 3,389 27,740 24,442 3,298 24,634 546.980 485,856 61,124 422,657 (152,900) (91,956) 60,944 (63,404) 50,670 50,670 - 102,230 102,230 - (1,113) (1,113) 152,900 151,787 (1,113) $ - 59,831 $ 59,831 0 1-.-, 63 29,130 92,000 121,984 58,580 (306,327) $ (247,747) KODIAK ISLAND BOROUGH Special Revenue Funds Woodland Acres Street Light Service Area Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Exhibit B -17 2002 Variance - favorable 2001 Budget Actual (unfavorable) Actual Revenues: Investments and property $ 2,000 $ 783 $ (1,217) $ 2,181 Expenditures: General and administration: Support goods and services 6,000 Capital outlay 3,000 Total expenditures 9,000 Deficiency of revenues under expenditures $ (7,000) Fund balance, at beginning of year Fund balances, at end of year 5,417 583 5,473 — 3,000 — 5,417 3,583 5,473 (4,634) $ (4,800) (3,292) 38,614 41,906 $ 33,980 $ 38,614 64 KODIAK ISLAND BOROUGH Special Revenue Funds Kodiak Arts Council Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances (Deficits) Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Revenues: Licenses, permits, fees, and other local services: Reimbursement from Kodiak Arts Council Total revenues Expenditures: General administration: Personnel services Fringe benefits Support goods and services Total expenditures Deficiency of revenues over expenditures Fund balance, at beginning of year Fund balances (deficits), at end of year Exhibit B -18 2002 Variance- favorable 2001 Budget Actual (unfavorable) Actual $ 51,720 $ 54,441 $ 2,721 $ 52,465 51,720 54,441 2,721 52,465 42,270 45,224 (2,954) 42,270 9,450 9,542 (92) 9,366 — 598 (598) 912 51,720 55,364 (3,644) 52,548 $ — (923) $ (923) (83) 65 KODIAK ISLAND BOROUGH Special Revenue Funds Facilities Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Exhibit B -19 66 2002 V ariance- farorable 2001 Budget Actual (unfavorable) Actual Revenues: Land sale proceeds: Proceeds from the sale of Shuyak Island $ 4,000,000 $ 4,000,000 $ — $ 4,000,000 Investments and property 1,313,990 568,339 (745,651) 758,307 Total revenues 5,313,990 4,568,339 (745,651) 4,758,307 Expenditures: General and administration 4,706,840 — 4,706,840 — Total expenditures 4,706,840 — 4,706,840 — Excess of revenues over expenses 607,150 4,568,339 3,961,189 4,758,307 Other financing uses: Operating transfers in (out) from (to) other funds: Capital projects – Borough projects — — — (301,746) Buildings and grounds (102,230) (102,230) — (92,000) Enterprise – KFRC — 519,837 519,837 535,325 Debt service funds (504,920) (504,920) — (393,330) Net other financing uses (607,150) (87,313) 519,837 (251,751) Excess of revenues and other financing sources over expenditures and other financing uses $ — 4,481,026 $ 4.481,026 4,506,556 Fund balances, at beginning of year 21,807,635 17,301,079 Fund balances, at end of year $ 26,288,661 $ 21,807.63 66 KODIAK ISLAND BOROUGH Special Revenue Funds Tourism Development Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Revenues: Transient accommodations tax Investments and property Total revenues Expenditures: Community development: Contributions Support goods and services Total expenditures Excess of revenues over expenditures Fund balances, at beginning of year Fund balances, at end of year Exhibit B -20 67 2002 Variance- favorable 2001 Budget Actual (unfavorable) Actual $ 52,000 $ 50,671 $ (1,329) $ 42,578 200 — (200) — 52,200 50,671 (1,529) 42,578 52,200 47,200 5,000 37,900 — 13 (13) 17 52,200 47,213 4,987 37,917 $ — 3,458 $ 3,458 4,661 67 1 1 DEBT SERVICE FUNDS 1 0 Fj Debt Service Funds are used to account for the payment of principal, interest and related fees on all bonded debt except for special assessment bonded debt accounted for in proprietary funds. KODIAK ISLAND BOROUGH Debt Service Funds Combining Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Year ended June 30, 2002 (With comparative totals for 200 1) Revenues: Investments and property: Interest income Other Total revenues Expenditures: Debt service: Principal Interest General and administrative Total expenditures Deficiency of revenues under expenditures Other financing sources (uses): Operating transfer in from component unit Operating transfers in from other funds Operating transfers out to other funds Total other financing sources (uses) Excess of revenues and other financing sources over expenditures and other financing uses Fund balances, beginning of year Fund balances, end of year Exhibit C -2 Education 28.811 131,933 and Totals 113.983 Health Other 2002 2001 142,794 $ 590,858 $ $ 31,884 $ — $ 31,884 $ 24,718 12,675 — 12,675 — 44,559 — 44,559 24,718 1,099,860 — 1,099,860 2,015,834 869,519 — 869,519 745,493 1,592 — 1,592 19,792 1,970,971 — 1,970,971 2,781,119 (1,926,412) — (1,926,412) (2,756.401) 849,694 — 849,694 1,634,092 1,179,840 28.811 1,208,651 1,195,585 — — — (19,008) 2,029,534 28,811 2,058,345 2,810,669 103,122 28.811 131,933 54,268 344,942 113.983 458,925 404,657 $ 448.064 $ 142,794 $ 590,858 $ 458, 69 KODIAK ISLAND BOROUGH Debt Service Funds Education and Health Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Revenues: Investments and property: Interest income Other Total revenues Expenditures: Debt service: Principal Interest General and administrative Total expenditures Deficiency of revenues under expenditures Other financing sources: Operating transfer in from component unit Operating transfers in from other funds Net other financing sources Excess of revenues and other financing sources over expenditures and other financing uses Fund balances, at beginning of year Fund balances, at end of year 2002 Variance- favorable Budget Actual (unfavorable) Exhibit C -3 2001 $ 1,000 $ 31,884 $ 30,884 $ 24.718 — 12.675 12,675 — 1.000 44.559 43,559 24.718 1,099,864 1,099,860 4 2,015,834 881,646 869,519 12,127 745,493 28,700 1,592 27,108 19,792 2,010,210 1,970,971 39,239 2,781,119 (2,009,210) (1,926,412) 82,798 (2,756,401) 829,370 849,694 20,324 1,634,092 1,179,840 1,179,840 — 1,194,600 2,009,210 2,029,534 20,324 2,828,692 $ — 103,122 $ 103,122 72,291 344,942 272,651 $ 448,064 $ 344,942 70 KODIAK ISLAND BOROUGH Debt Service Funds Other Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Budget and Actual Year ended June 30, 2002 (With comparative totals for 200 1) 2002 t Revenues Other financing sources (uses): Operating transfers in from other funds Operating transfer out to other funds Net other financing sources (uses) Excess (deficiency) of revenues and other financing sources over expenditures and other financing sources and uses Fund balances, at beginning of year Fund balances, at end of year Variance- favorable Budget Actual (unfavorable) 28,811 28,811 28,811 28.811 $ — 28,811 $ 28,811 71 Exhibit C -4 2001 Actual 985 (19,008) (18,023) (18,023) a ll�,yo� p 7 CAPITAL PROTECTS FUNDS Capital Projects Funds are used to account for general govern- ment capital projects financed by general obligation bond issues, intergovernmental grants, contributions from other funds and interest income, exclusive of projects financed by proprietary funds. L� 1 i 1 L 1 1 1 � I � I I I CAPITAL PROJECTS FUNDS The Various Borough Projects Fund accounts for general government construction projects not accounted for in other funds. The State Capital Grants Fund accounts for capital improvement projects relating to grants received from the State of Alaska. I I I A I I I I I I Assets Equity in central treasury Temporary investments Receivables: State of Alaska Due from other funds Total Liabilities and Fund Balances Liabilities: Accounts payable Retainages payable Due to other funds Total liabilities Fund balances: Reserved for encumbrances Unreserved: Undesignated Total fund balance (deficit) Total KODIAK ISLAND BOROUGH Capital Project Funds Combining Balance Sheet June 30, 2002 (With comparative totals for 2001) Various J.YJJ,17U State borough 407,107 capital projects 208,692 grants $ 129,503 $ — $ 538,863 — — 183,864 $ 668,366 $ 183,864 $ $ — $ 20,528 $ 3,705 - - 208,692 3,705 229,220 664,661 (45,356) 664,661 (45,356) $ 668,366 $ 183,864 $ Exhibit D -1 Totals 1LY,JVJ L43,31-1 538,863 2,727,987 183,864 268,249 OJL,LJV .p J.YJJ,17U 20,528 $ 407,107 3,705 48,181 208,692 152,914 232,925 608,202 — 2,137,930 619,305 709,064 619,305 2,846,994 852,230 $ 3,455,196 72 11 1 s ■ .• ■ s ■ s I M I M i KODIAK ISLAND BOROUGH Capital Project Funds Combined Statement of Revenues, Expenditures, Transfers, and Changes in Fund Balances Year ended June 30, 2002 (with comparative totals for 2001) Revenues: State sources Licenses, permits, fees, and other local revenues Investments and property Total revenues Expenditures: Capital improvements: Schools General Total expenditures Deficiency of revenues under expenditures Other financing sources (uses): Operating transfers in from other funds Operating transfers out to other funds Proceeds from issuance of long -term debt Net other financing sources (uses) Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses Fund balance, at beginning of year Fund balance (deficit), at end of year Exhibit D -2 Various State borough capital Totals projects grants 2002 2001 $ — $ 315,499 $ 315,499 S 388,711 660 — 660 — 33,539 — 33,539 89,551 34,199 315,499 349,698 478,292 2,029,464 131,541 2,161,005 671,985 6,374 230,008 236,382 624,788 2,035,838 361,549 2,397,387 1,296,773 (2,001,639) (46.050) (2,047,689) (818,481) 20,000 — 20,000 301,746 (200,000) — (200,000) - - — — 2,677,871 (180,000) — (180,000) 2,979,617 (2,181,639) (46,050) (2,227,689) 2,161,136 2,846,300 694 2,846,994 685,858 $ 664,661 $ (45,356) $ 619,305 $ 2,846,994 73 i r KODIAK ISLAND BOROUGH Capital Projects Funds Schedule of Capital Projects Year ended June 30, 2002 Project no. Project 74 Capital projects - Education: 00100 430 -696 School Repair KHS Roof 01100 430 -601 HS Roof Repair 01102 420 -510 Series E Bond HS Roof Repair 01105 410 -695 Series F Bond HS Roof Repair 02108 430 -602 HS Repairs Matching Grant (State) 02109 410 -486 HS Repairs Matching Grant (KIB) 968,106 - Total education Complete Capital projects - Utilities: 00102 410 -698 Bayside Underground Electric 182 410 -692 State Fair & Rodeo Water 2,725,274 Total utility projects 2,928,090 Capital projects - Other: 22,000 410 -400 Undesignated Projects 85 410 -471 Village Metals Removal 105 410 -482 Anton Larsen Dock 114 410 -642 State Airport Improvements 117 410 -645 Heliopad Striping 133 410 -658 Red Cross Building Repairs 142 430 -642 Clean Water Fund/Karluk 146 410 -663 BMX Bike Trail 159 410 -675 Borough Parks 164 430 -645 Waste Management Imp 169 430 -649 Clean Water Karluk 173 410 -683 Bayside Classroom Add 174 410 -684 Bayside Storage/Bay Add 177 430 -687 Anton Larsen Boat Ramp 184 430 -694 Oil Spill Response Equip 00104 430 -699 Tide Gate 00106 410 -690 MIS Study 01106 430 -625 Volunteer Fire Assistance Program 02107 430 -648 ADF &G Research Study 02110 410 -506 GIS Study 400,000 - Total - capital projects other Open 400,000 Total all capital projects 74 Appropriations Total Status Prior 2002 appropriations Open $ 126,770 $ - $ 126,770 Complete 125,398 - 125,398 Open 1,505,000 25,000 1,530,000 Open 968,106 - 968,106 Complete - 124,471 124,471 Complete - 53,345 53,345 2,725,274 202,816 2,928,090 Open 22,000 - 22,000 Open 25,000 - 25,000 47,000 - 47,000 Open 224,764 (200,000) 24,764 Open 150,000 - 150,000 Open 140,000 - 140,000 Open 11,000 - 11,000 Open 3,000 - 3,000 Open 12,000 - 12,000 Complete 50,000 - 50,000 Open 55,000 - 55,000 Open 26,500 - 26,500 Open 1,585,800 271,300 1,857,100 Complete 350,000 - 350,000 Open 75,000 - 75,000 Open 400,000 - 400,000 Open 400,000 - 400,000 Open 400,000 - 400,000 Open 10,000 - 10,000 Complete 30,000 - 30,000 Complete - 3,699 3,699 Open - 200,000 200,000 Open - 20,000 20,000 3,923,064 294,999 4,218,063 $ 6,695,338 $ 497,815 $ 7,193,153 74 Exhibit U -3 75 Encumbrances Expenditures Total Unexpended Current Unencumbered Prior 2002 expenditures balance encumbrances balance $ 73,644 $ 7,070 $ 80,714 $ 46,056 $ - $ 46,056 125,398 - 125,398 - - - 294,064 1,239,305 1,533,369 (3,369) - (3,369) 4,572 736,814 741,386 226,720 - 226,720 - 124,471 124,471 - - - - 53,345 53,345 - - - 497,678 2,161,005 2,658,683 269,407 - 269,407 - - - 22,000 - 22,000 15,309 5.315 20,624 4,376 - 4,376 15,309 5,315 20,624 26,376 - 26,376 17,870 1,059 18,929 5,835 - 5,835 120,994 - 120,994 29,006 - 29,006 139,580 - 139,580 420 - 420 60 - 60 10,940 - 10,940 - - - 3,000 - 3,000 6,778 - 6,778 5,222 - 5,222 23,192 - 23,192 26,808 - 26,808 49,278 - 49,278 5,722 - 5,722 10,231 - 10,231 16,269 - 16,269 163,236 108,266 271,502 1,585,598 - 1,585,598 89,189 - 89,189 260,811 - 260,811 48,199 - 48,199 26,801 - 26,801 20 - 20 399,980 - 399,980 88,170 10,903 99,073 300,927 - 300,927 354,702 44,709 399,411 589 - 589 1,304 - 1,304 8,696 - 8,696 29,983 - 29,983 17 - 17 - 3,699 3,699 - - - - 62,431 62,431 137,569 - 137,569 - - - 20,000 - 20,000 1,142,786 231,067 1,373,853 2,844,210 - 2,844,210 $ 1,655,773 5 2,397,387 $ 4.053,160 $ 3,139,993 $ - $ 3,139,993 75 ENTERPRISE FUNDS Enterprise Funds are used to account for Borough operations that are financed and operated in a manner similar to private business enterprises. The intent of the Borough is that the costs (expenses, including depreciation) of providing these services to the general public on a continuing basis are financed or recovered primarily through user charges. 1 _-J I ENTERPRISE FUNDS The Municipal Solid Waste Collection and Disposal Fund accounts for the collection and disposal of solid waste and recycling services for the Kodiak Island Borough. The Hospital Facilities Fund accounts for rents on the Borough -owned hospital; hospital related state revenue sharing; and other hospital related revenue. In turn, it purchases hospital equipment and makes debt service payments on hospital related debt. The 911 Service Fund accounts for funds collected from phone charges and pays for a 911 emergency system. The Kodiak Fisheries Research Center Fund accounts for rents and expenses on the Borough -owned Kodiak Fisheries Research Center. The three tenants: NOAA, Alaska Department of Fish & Game and University of Alaska, Fairbanks pay lease funds to participate in this multi- agency research facility committed to the preservation of the North Pacific marine ecosystem and resources. KODIAK ISLAND BOROUGH Enterprise Funds Combining Balance Sheet June 30, 2002 (with comparative totals for 2001) Exhibit E -1 I 76 Municipal Kodiak solid waste fisheries collection and Hospital 911 research Totals Assets disposal facilities services center 2002 2001 Current assets: Equity in central treasury $ 135,576 $ 366,199 $ 56.590 $ 598.3% $ 1.156.761 $ 321.180 Temporary investments 863,569 56,307 - 1,012.919 1,932.795 3,075.742 Accrued interest receivable 4,735 - - 9,063 13.798 3,064 Customer receivables 346,763 - - - 346.763 243,332 Accounts receivable - State of Alaska 100,000 - 100.000 100.000 Total current assets 1,450,643 422,506 56,590 1.620.378 3,550.117 3.743.318 Inventories 277,007 - - 277,007 277,007 Fixed assets: Unclassified utility plant in service 2,200,347 - - - 2,200.347 2.200.347 Land and improvements - 401,046 - 1,021,998 1,423,044 1,423,044 Buildings - 26,131,043 - 17,840.400 43,971.443 43.971.443 Machinery and equipment 1,001,811 4.760,081 - 1,134,663 6,896,555 6,794,194 Construction work -in- process 2,241,254 - - 2.241.254 2.231,804 5,443,412 31,292,170 - 19.997,061 56.732,643 56,620,832 Less accumulated depreciation (1.393.311) (8,323,690) - (2.227.354) (11.944,355) (9.755.684) Net fixed assets 4,050.101 22.968.480 - 17.769,707 44.788.288 46,865.148 Total S 5.500.744 $ 23.667.993 S 56.590 S 19.390.085 $ 48.615,412 S 50.885.473 Liabilities and Fund Equities Current liabilities: Accounts payable S 139.468 $ - $ - $ 22,505 $ 161,973 $ 184,806 Deferred revenue - 60,000 - 43,745 103,745 - Accrued expenses 142,854 - - 4.232 147.086 68.208 Current portion of note payable - 669,967 - - 669,967 629,656 Current portion of capital lease obligations - 294,439 - - 294,439 277,720 Due to other funds 100,000 - - 368.975 468,975 1,201,840 Total current liabilities 382,322 1.024,406 - 439.457 1.846,185 2,362,230 Noncurrent liabilities: Notes payable 1,241.254 - - - 1,241,254 1,901,494 Capital lease obligations - 502,867 - - 502,867 797,306 Long-term interfund borrowings - - - 7,130,000 7,130,000 7.370,000 Accrual for landfill closure and postclosure costs 2,292,901 - - - 2,292.901 2,122.151 Total liabilities 3,916,477 1.527,273 - 7.569.457 13.013.207 14.553.181 Fund equities: Contributions in aid of construction: State of Alaska 3,413,636 - - 3.000.000 6.413,636 6,413,636 Other 19,990 17,956,116 8,920.540 26.896.646 26.896,646 3,433,626 17,956,116 - 11,920,540 33.310.282 33,310,282 Accumulated amortization (1,030.091) (1.795,615) (1,192,052) (4.017.758) (2.969.460) Net contributions in aid of construction 2,403,535 16,160,501 - 10,728,488 29,292.524 30.340.822 Contributed capital - 5,166,717 - 215,486 5,382,203 5.382,203 Retained earnings (accumulated deficit). unreserved (819.268) 813,502 56,590 876.654 927.478 609,267 Total fund equities 1,584.267 22.140,720 56,590 1 1,820,628 35.602.205 36,332.292 Total $ 5.500,744 $ 23.667.993 S 56,590 $ 19,390.085 S 48.615.412 $ 50.885.473 76 KODIAK ISLAND BOROUGH Enterprise Funds Combining Statement of Revenues, Expenses, Transfers, and Changes in Retained Earnings (Accumulated Deficits) Year ended June 30, 2002 (With comparative totals for 2001) Exhibit E -2 77 Municipal Kodiak solid waste fisheries collection and Hospital 911 research Totals disposal facilities services center 2002 2001 Operating revenues: Solid waste collection $ 1,740,766 $ - $ - - $ 1,740,766 $ 1,718,904 Solid waste disposal 1,094,484 - - - 1,094,484 889,885 State sources - revenue sharing - 39,617 - - 39.617 39,907 Customer charges - - 69,520 - 69,520 69,078 Rents and royalties - - - 1,497,865 1,497,865 1,484,927 Donations - 79,671 - - 79,671 103,400 PKIMC gain - 486,360 - - 486,360 372,732 Lease proceeds - 720,000 - - 720,000 720,000 Other 7,834 - 7,834 11.566 2,843,084 1,325,648 69.520 1.497,865 5,736,117 5.410.399 Operating expenses: Personnel services 372,885 3,528 10,500 189,242 576,155 533.442 Solid waste collection 1,276,583 - - - 1.276,583 1,250,607 Refuse disposal 284.554 - - - 284,554 297,992 Contracted services 276.464 - - 35,170 311,634 356,220 Repairs and maintenance 73,934 12,210 - 250,328 336,472 377,610 Landfill closure and postclosure costs 170,750 - - - 170,750 57,115 Depreciation 166,149 1,279,552 - 742,970 2,188,671 2,018,632 General and administration 195,734 - - - 195,734 177,654 Telephone services - - 72,952 - 72,952 - Recycling services 70,000 - - - 70,000 67,680 Miscellaneous - - - 60,533 60,533 51,954 Support goods and services - - - 44 44 802 Contributions 7,315 - 7,315 2,844 2,894,368 1,295,290 83,452 1.278,287 5.551,397 5,192.552 Operating income (loss) (51,284) 30.358 (13,932) 219,578 184,720 217,847 Other income (expenses): Intergovernmental revenue - - - - - 69,838 Interest income 29,955 3,631 - 55,684 89,270 76,673 Interest expense (103,944) (118.556) - - (222,500) (171,689) Loss on sale of assets - (226,761) Net income (loss) (125,273) (84,567) (13,932) 275,262 51,490 (34,092) Operating transfers out to other funds - (261,740) - (519,837) (781,577) (726,355) Amortization of contributions in aid of construction 52.408 598,540 397,350 1,048,298 1,048,2% Increase (decrease) in retained earnings (72,865) 252,233 (13,932) 152,775 318,211 287.849 (Accumulated deficit) retained earnings, at beginning of year (746.403) 561.269 70.522 723.879 609,267 321,418 (Accumulated deficit) retained earnings, at end of year 5 (819.268) $ 813.502 S 56.590 5 876.654 $ 9'_7.178 $ 609,26 77 Operating income (loss) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation Changes in assets and liabilities, net of effects of transfer of assets and liabilities from other funds: Customer receivables Due totfrom other funds Accounts payable Deferred revenues Accrual for landfill closure and postclosure costs Other accrued liabilities Total adjustments Net cash provided by (used for) operating activities Cash flows from noncapital and related financing activities: Operating transfers out to other funds Net cash used for noncapital and related financing activities Cash flows from capital and related financing activities: Acquisition and construction of capital assets Interest paid on notes payable, capital leases and interf ind borrowing Principal paid on long -term interfund borrowing Proceeds from issuance of note payable Principal payments on notes payable Principal payments on capital lease obligations Net cash used for capital and related financing activities Cash flows from investing activities: Interest and dividends on investments Net (decrease) increase in investments Net cash (used for) provided by investing activities Net change in cash and cash equivalents Cash and cash equivalents, at beginning of year Cash and cash equivalents, at end of year Noncash capital and related financing activities: Loss on disposal of fixed assets KODIAK ISLAND BOROUGH Enterprise Funds Combining Statement of Cash Flows Year ended June 30, 2002 (With comparative totals for 2001) Municipal solid waste collection Hospital 911 and disposal facilities services $ (51,284) $ 30.358 $ (13,932) $ Exhibit E -3 Kodiak fisheries research Totals center 2002 2001 219.578 S 184.720 $ 217,847 166,149 1,279.52 - 742.970 2.188,671 2.018.632 (105,601) - - 2.170 (103,431) 266.754 - - - (747,865) (747.865) 814,484 (15,307) - - (7,526) (22.833) (113,086) - 60,000 - 26,296 86,296 - 170,750 - - - 170,750 55,393 (7,426) - (191) (7,617) 16,946 208,565 1,339,552 15.854 1,563,971 3,059,123 157,281 1,369,910 (13,932) 235.432 1,748.691 3,276,970 (261,740) (519.837) (781,577) (726,355) (261,740) (519,837) (781.577) (726.355) (9,450) (102,361) - - (111,811) (491,697) - (118,556) - - (118,556) (171,689) - - - (225,000) (225,000) (210,000) 9,450 - - - 9,450 299,686 - (629,379) - - (629,379) (592,016) (277,720) (277,720) (261.951) - (1,128,016) - (225,000) (1,353.016) (1,427,667) 25,855 4,117 - 48.564 78,536 85,637 (212,175) 295,885 - 1,059,237 1,142,947 (1,220,596) (186,320) 300,002 1,107,801 1,221.483 (1,134,959) (29,039) 280,156 (13,932) 598,396 835,581 (12,011) 164,615 86,043 70,522 - 321,180 333,191 $ 135.576 S 366.199 S 56.590 $ 598.396 S 1.156.761 $ 321.180 $ - $ - 5 22o.76 78 KODIAK ISLAND BOROUGH Municipal Solid Waste Collection and Disposal Fund Balance Sheets June 30, 2002 and 2001 Exhibit E -4 Assets 2002 2001 Current assets: Equity in central treasury $ 135,576 $ 164,615 Temporary investments 863,569 651,394 Customer receivables 346,763 241,162 Accounts receivable — State of Alaska 100,000 100,000 Accrued interest receivable 4,735 635 1,450,643 1,157,806 Fixed assets: Unclassified utility plant in service Equipment Construction work -in- process Less accumulated depreciation Total 2,200,347 2,200,347 1,001,811 1,001,811 2,241,254 2,231,804 (1,393,311) (1,227,162) 4,050,101 4,206,800 $ 5,500,744 $ 5,364.606 Liabilities and Fund Equity Current liabilities: Accounts payable Due to other funds Accrued expenses Noncurrent liabilities: Landfill closure and postclosure costs Note payable Fund equity: Contributions in aid of construction: State of Alaska Other Accumulated amortization Net contributions in aid of construction Accumulated deficit Total fund equity Total $ 139,468 $ 154,775 100,000 100,000 142,854 46,336 382,322 301,111 2,292,901 2,122,151 3,916,477 3,655,066 3,413,636 3,413,636 19.990 19,990 3,433,626 3,433,626 (1,030,091) (977,683) 2,403,535 2,455,943 (819,268) (746,403) 1,584,267 1,709,540 $ 5,500,744 $ 5,364,606 79 KODIAK ISLAND BOROUGH Municipal Solid Waste Collection and Disposal Fund Statement of Revenues, Expenses, Transfers, and Changes in Accumulated Deficit Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) 2002 Operating revenues: Solid waste collection Solid waste disposal Other Operating expenses: Personnel services Solid waste collection Refuse disposal Contracted services Repairs and maintenance Landfill closure and postclosure costs Depreciation General and administration Contributions Recycling services Operating income Other income (expense): Intergovernmental revenue Interest income Interest expense Loss on disposal of fixed assets Net income (loss) Amortization of contributions in aid of construction Increase (decrease) in retained earnings Accumulated deficit, at beginning of year Accumulated deficit, at end of year 2,718,008 2,894,368 (176,360) (79,408) (51,284) 28,124 27,000 29,955 2,955 - (103,944) (103,944) (JZ,4UtS) (1ZJ,Z /3) ( /Z,2SbJ) 52,408 52,408 - $ - (72,865) $ (72,865) (746,403) $ (819,268) Exhibit E -5 2001 1,718,904 889,885 2,620,355 338,392 1,250,607 297,992 285,132 40,781 57,115 93,714 177,654 2,844 2,611,911 8,444 69,838 24,376 (13,493) 89,165 52,408 141,573 (887,976) $ (746,403) 80 Variance- favorable Budget Actual (unfavorable) $ 1,610,900 $ 1,740,766 $ 129,866 $ 1,015,500 1,094,484 78,984 12,200 7,834 (4,366) 2,638,600 2,843,084 204,484 360,360 372,885 (12,525) 1,119,100 1,276,583 (157,483) 300,000 284,554 15,446 375,000 276,464 98,536 27,000 73,934 (46,934) 166,000 170,750 (4,750) 120,660 166,149 (45,489) 189,288 195,734 (6,446) 600 7,315 (6,715) 60,000 70,000 (10,000) 2,718,008 2,894,368 (176,360) (79,408) (51,284) 28,124 27,000 29,955 2,955 - (103,944) (103,944) (JZ,4UtS) (1ZJ,Z /3) ( /Z,2SbJ) 52,408 52,408 - $ - (72,865) $ (72,865) (746,403) $ (819,268) Exhibit E -5 2001 1,718,904 889,885 2,620,355 338,392 1,250,607 297,992 285,132 40,781 57,115 93,714 177,654 2,844 2,611,911 8,444 69,838 24,376 (13,493) 89,165 52,408 141,573 (887,976) $ (746,403) 80 KODIAK ISLAND BOROUGH Municipal Solid Waste Collection and Disposal Fund Statements of Cash Flows Years ended June 30, 2002 and 2001 Operating income (loss) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation Changes in assets and liabilities, net of effects from the transfer of assets and liabilities from other funds: Customer receivables Due from other funds Due to other funds Accounts payable Accrual for landfill closure and postclosure costs Other accrued liabilities Total adjustments Net cash provided by operating activities Cash flows from capital and related financing activities: Acquisition and construction of capital assets Proceeds from issuance of note payable Net cash used for capital and related financing activities Cash flows from investing activities: Purchase of investments Interest and dividends received on investments Net cash provided by (used for) investing activities Net change in cash and cash equivalents Cash and cash equivalents, at beginning of year Cash and cash equivalents, at end of year Noncash capital and related financing activities: Loss on disposal of fixed assets 2002 $ (51,284) $ 166,149 (105,601) (15,307) 170,750 (7,426) 208,565 157,281 (9,450) 9,450 (212,175) 25,855 (186,320) (29,039) 164,615 $ 135,576 $ Exhibit E -6 2001 8,444 93,714 46,147 147,935 (199,303) (13,910) 55,393 343 130,319 138,763 (368,589) 299,686 (68,903) 2,495 29,627 32,122 101,982 62,633 164,615 13,493 KODIAK ISLAND BOROUGH Hospital Facilities Fund Balance Sheets June 30, 2002 and 2001 Exhibit E -7 Assets 2002 2001 Current assets: Equity in central treasury $ 366,199 $ 86,043 Temporary investments 56,307 352,192 Accrued interest receivable — 486 422,506 438,721 Inventories 277,007 277,007 Fixed assets: Buildings 26,131,043 26,131,043 Machinery and equipment 4,760,081 4,657,720 Land and improvements 401,046 401,046 Less accumulated depreciation (8,323,690) (7,044,138) 22,968,480 24,145,671 Total $ 23,667,993 $ 24,861,399 Liabilities and Fund Equity Current liabilities: Deferred revenue $ 60,000 $ — Current portion of long -term debt 669,967 629,656 Current portion of capital lease obligations 294,439 277,720 1,024,406 907,376 Long -term debt — 669,690 Capital lease obligations 502,867 797,306 502,867 1,466,996 1,527,273 2,374,372 Fund equity: Contributions in aid of construction Other 17,956,116 17,956,116 Accumulated amortization (1,795,615) (1,197,075) 16,160,501 16,759,041 Contributed capital 5,166,717 5,166,717 Retained earnings, unreserved 813,502 561,269 Total fund equity 22,140,720 22,487,027 Total $ 23,667,993 $ 24,861,399 82 KODIAK ISLAND BOROUGH Hospital Facilities Fund Statement of Revenues, Expenses, Transfers, and Changes in Retained Earnings Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) 2002 Operating revenues: State sources - revenue sharing Lease proceeds Donations PKIMC gain Operating expenses: Personnel services Depreciation Maintenance and repairs Contingencies Operating (loss) income Other income (expenses): Interest income Interest expense Loss on disposal of fixed assets Income before operating transfers Other financing uses: Operating transfers out to other funds Net other financing uses Net loss Amortization in contributions in aid of construction Increase in retained earnings Retained earnings, at beginning of year Retained earnings, at end of year Exhibit E -8 2001 39,907 720,000 103,400 - 3,528 Variance - 1,179,350 favorable Budget Actual (unfavorable) $ 40,000 $ 39,617 $ (383) $ 720,000 720,000 - 130,000 79,671 (50,329) 200,000 486,360 286,360 1,090,000 1,325,648 235,648 Exhibit E -8 2001 39,907 720,000 103,400 - 3,528 (3,528) - 1,179,350 1,279,552 (100,202) 1,180,918 10,000 12,210 (2,210) - 99,160 - 99,160 - 1,288,510 1,295,290 (6,780) 1,180,918 (198,510) 30,358 228,868 55,121 - 3,631 3,631 12,506 (118,290) (118,556) (266) (171,689) - - - (186,197) (316,800) (84,567) 232,233 (290,259) (281,740) (261,740) 20,000 (191,030) (281,740) (261,740) 20,000 (191,030) (598,540) (346,307) 252,233 (481,289) 598,540 598,540 - 598,537 L3 -1 LJ L,LJJ 561,269 $ 813,502 111,1'+0 4a Ju1,LO7 83 KODIAK ISLAND BOROUGH Hospital Facilities Fund Statements of Cash Flows Years ended June 30, 2002 and 2001 Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation Changes in assets and liabilities: Customer receivables Accounts payable Due to other funds Deferred revenues Total adjustments Net cash provided by operating activities Cash flows from noncapital and related financing activities: Operating transfers out to other funds Cash flows from capital and related financing activities: Acquisition and construction of capital assets Interest paid on note payable and capital leases Principal payments on note payable Principal payments on capital lease obligations Net cash used for capital and related financing activities Cash flows from investing activities: Interest and dividends paid on investments Maturities of investments Net cash provided by investing activities Net change in cash and cash equivalents Cash and cash equivalents, at beginning of year Cash and cash equivalents, at end of year Noncash capital and related financing activities: Loss on disposal of fixed assets Exhibit E -9 2002 2001 30,358 $ 55,121 1,279,552 .1 111 1,339,552 1,369,910 (261,740) (102,361) (118,556) (629,379) (277,720) (1,128,016) 4,117 295,885 300,002 280,156 86,043 $ 366,199 $ 1,242,610 1,297,731 (191,030) (109,886) (171,689) (592,016) (261,951) (1,135,542) 15,942 98,942 114,884 86,043 86,043 1,180,918 217,699 (8,012) (147,995) 186,197 E:. KODIAK ISLAND BOROUGH 911 Services Fund Balance Sheets June 30, 2002 and 2001 Assets Assets: Equity in central treasury Fund Equity Fund equity: Retained earnings, unreserved Exhibit E -10 2002 2001 S 56.590 S 70.522 S 56,590 S 70,522 KODIAK ISLAND BOROUGH 911 Services Fund Statement of Revenues, Expenses, Transfers, and Changes in Retained Earnings Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) 2002 Operating revenues: Customer charges Operating expenses: Personnel services Telephone services Variance - favorable Budget Actual (unfavorable) $ 69,000 $ 69,520 $ 520 $ 10,500 10,500 — 69,000 Operating income (loss) $ — Retained earnings, at beginning of year Retained earnings, at end of year 72,952 (14,452) 83,452 (14,452) (13,932) $ (13,932) 70,522 $ 56,590 Exhibit E -11 2001 Actual 69,078 30,000 30,000 39,078 31,444 70,522 86 KODIAK ISLAND BOROUGH 911 Services Fund Statements of Cash Flows Years ended June 30, 2002 and 2001 Operating income (loss) Net cash provided by operating activities Net change in cash and cash equivalents Cash and cash equivalents, at beginning of year Cash and cash equivalents, at end of year Exhibit E -12 2002 2001 $ (13,932) $ 39,078 (13,932) 39,078 (13,932) 39,078 70,522 31,444 $ 56,590 $ 70,522 87 KODIAK ISLAND BOROUGH Kodiak Fisheries Research Center Fund Balance Sheets June 30, 2002 and 2001 Exhibit E -13 Assets 2002 2001 Current assets: Equity in central treasury $ 598,396 $ — Temporary investments 1,012,919 2,072,156 Customer receivables — 2,170 Accrued interest receivable 9,063 1,943 1,620,378 2,076,269 Fixed assets: Buildings 17,840,400 17,840,400 Machinery and equipment 1,134,663 1,134,663 Land and improvements 1,021,998 1,021,998 Less accumulated depreciation (2,227,354) (1,484,384) 17,769,707 18,512,677 Total $ 19,390,085 $ 20,588,946 Liabilities and Fund Equity Current liabilities: Accounts payable $ 22,505 $ 30,031 Deferred revenue 43,745 17,449 Accrued expenses 4,232 4,423 Due to other funds 368,975 1,101,840 439,457 1,153,743 Noncurrent liabilities: Long -term interfund borrowings 7.130,000 7,370,000 7,569,457 8,523,743 Fund equity: Contributions in aid of construction State of Alaska 3,000,000 3,000,000 Other 8,920,540 8,920,540 11,920, 540 11,920,540 Accumulated amortization (1,192,052) (794,702) 10,728,488 11,125,838 Contributed capital 215,486 215,486 Retained earnings, unreserved 876,654 723,879 Total fund equity 11,820,628 12,065,203 Total $ 19,390,085 $ 20,588,946 88 KODIAK ISLAND BOROUGH Kodiak Fisheries Research Center Fund Statement of Revenues, Expenses, Transfers, and Changes in Retained Earnings Budget and Actual Year ended June 30, 2002 (With comparative totals for 2001) Exhibit E -14 Amortization of contributions in aid of construction 397,350 Increase (decrease) in retained earnings $ - Retained earnings, at beginning of year Retained earnings, at end of year 397,350 - 152.775 $ 152,775 D O /U,VJ'+ 397,351 (10,050) 733,929 $ 723,879 89 2002 Variance favorable 2001 Budget Actual (unfavorable) actual Operating revenues: Rents and royalties $ 1,499,570 $ 1,497,865 $ (1,705) $ 1,484,927 Operating expenses: Personnel services 163,060 152,129 10,931 158,985 Employee benefits 32,000 37,113 (5,113) 36,065 Miscellaneous 101,400 60,533 40,867 51,954 Depreciation 740,330 742,970 (2,640) 744,000 Cleaning and janitorial 47,000 35,170 11,830 41,088 Heating 82,000 86,206 (4,206) 70,375 Electrical 185,500 146,545 38,955 154,590 Plumbing 60,700 14,632 46,068 107,626 Air conditioning 11,000 682 10,318 2,438 Elevators 2,000 2,263 (263) 1,800 Support goods and services 3,150 44 3,106 802 1,428,140 1,278,287 149,853 1,369,723 Operating income 71,430 219,578 148,148 115,204 Other income Interest income 51,060 55,684 4.624 39,791 Loss on disposal of fixed assets - - - (27,071) Income before operating transfers 122,490 275.262 152.772 127,924 Other financing uses: Operating transfers out to other funds (519,840) (519,837) 3 (535,325) Net loss (397,350) (244,575) 152,775 (407,401) Amortization of contributions in aid of construction 397,350 Increase (decrease) in retained earnings $ - Retained earnings, at beginning of year Retained earnings, at end of year 397,350 - 152.775 $ 152,775 D O /U,VJ'+ 397,351 (10,050) 733,929 $ 723,879 89 Exhibit E -15 KODIAK ISLAND BOROUGH Kodiak Fisheries Research Center Fund Statements of Cash Flows Years ended June 30, 2002 and 2001 Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation Changes in assets and liabilities: Customer receivables Due from other funds Accounts payable Accrued expenses Deferred revenues Due to other funds Total adjustments Net cash provided by operating activities Cash flows from noncapital and related financing activities: Operating transfers out to other funds Net cash used for noncapital financing activities Cash flows from capital and related financing activities: Acquisition and construction of capital assets Principle paid on long -term interfund borrowing Net cash used for capital and related financing activities Cash flows from investing activities: Net (increase) decrease in investments Interest received Net cash provided by (used for) investing activities Net change in cash and cash equivalents Cash and cash equivalents, at beginning of year Cash and cash equivalents, at end of year Noncash capital and related financing activities: Loss in disposal of fixed assets 2002 $ 219,578 $ 742,970 744,000 2,170 2,908 — 400,000 (7,526) (91,164) (191) 16,603 26,296 — (747,865) 613,847 15,854 1,686,194 235,432 1,801,398 (519,837) (535,325) (519,837) (535.325) — (13,222) (225,000) (210,000) (225,000) (223,222) 1,059,237 (1,322,033) 48,564 40,068 1,107,801 (1,281,965) 598,396 (239,114) — 239,114 $ 598,396 $ — $ — $ 27,071 2001 115,204 .o 1 1 1 1 1 1 L 11 GENERAL FIXED ASSETS ACCOUNT GROUP The General Fixed Assets Account Group is a self - balancing account group which is used to account for the fixed assets of the Borough other than those recorded in the Enterprise Funds. KODIAK ISLAND BOROUGH General Fixed Assets Account Group Schedules of Fixed Assets by Source June 30, 2002 and 2001 General fixed assets: Land Buildings Improvements other than buildings Machinery and equipment Construction work -in- progress Total Investment in general fixed assets: Capital projects funds: General obligation bonds Federal grants State grants General fund revenues Special revenue fund revenues Contributions from State of Alaska Contributions from Federal Government Contributions from others Total Exhibit F -1 2002 2001 $ 5,331,188 $ 5,362,188 90,440.059 88,783.292 3,730,745 3,700,998 1,905,877 1,117,298 2,757.756 2,357,374 $ 104,165,625 $ 101,321,150 $ 59,731,841 $ 57,751,151 4,413,937 4,314,864 19,877,521 19,471,040 10,102,633 9.848,382 1,004,219 900,239 3,730,279 3,730,279 1,259,300 1,259,300 4,045,895 4,045.895 $ 104,165,625 $ 101,321,150 a KODIAK ISLAND BOROUGH General Fixed Assets Account Group Schedule of General Fixed Assets by Function and Activity June 30, 2002 Exhibit F -2 92 Improvements Machinery other than and Total Land Buildings buildings equipment Staff agencies: Management information systems $ 745,593 $ - $ - $ - $ 745,593 General administration 154,988 - - - 154,988 Total staff agencies 900,581 - - - 900,581 Public safety: Emergency preparedness 621,595 - 100,000 - 521,595 Fire Protection Area No. 1 1,197,598 241,137 702,633 25,920 227,908 Womens Bay Service Area 629,665 - 425,655 - 204,010 Total public safety 2,448,858 241,137 1,228,288 25,920 953,513 Schools 86,502,808 - 83,673,299 2,829,509 - Teacher housing 231,560 - 231,560 - - General government buildings 5,346,024 - 5,306,912 17,329 21,783 Building sites 360,001 360,001 - - - Playgrounds 717,987 - - 717,987 - Other 170,000 - - 140,000 30,000 93,328,380 360,001 89,211,771 3,704,825 51,783 Undeveloped land 4,730,050 4,730,050 - - - 101,407,869 5,331,188 90,440,059 3,730,745 1,905,877 Construction work -in- progress 2,757,756 - 2,658,683 99,073 - Total general fixed assets $ 104,165,625 $ 5,331,188 $ 93,098,742 $ 3,829,818 $ 1,905,877 92 KODIAK ISLAND BOROUGH General Fixed Assets Account Group Schedule of Changes in General Fixed Assets by Function and Activity Year ended June 30, 2002 Total general fixed assets $ 101,321,150 $ 6,184,909 $ Deletions 24,166 $ 153,427 24,150 29,844 31,936 7,967 271,490 11,888 11.888 49,888 31,000 1,111,900 1,192,788 Exhibit F -3 General fixed assets at 745,593 900,581 621,595 1,197,598 629,665 80,JUL,t5U6 231,560 5,346,024 360,001 717,987 170,000 - 4,730,050 1,476,166 101,407,869 1,864,268 2,757,756 3,340,434 $ 104,165,625 93 General fixed assets at July 1, 2001 Additions Staff agencies: Finance department $ 24,166 $ - $ Management information systems 249,092 649,928 Assessing department 24,150 - Community development department 29,844 - Engineering/facilities department 31,936 - Land sales 7,967 - General administration 94,503 60,485 Total staff agencies 461,658 710,413 Public safety: Emergency preparedness 222,184 399,411 Fire Protection Area No. 1 1,093,618 115,868 Womens Bay Fire District 629,665 - Total public safety 1,945,467 515,279 Schools 84,070,183 2,432,625 Teacher housing 231,560 - General government buildings 5,261,718 134,194 Building sites 391,001 - Playgrounds 710,239 7,748 Other 1,161,900 120,000 91,826,601 2,694,567 Undeveloped land 4,730,050 - 98,963,776 3,920,259 Construction work -in- progress 2,357,374 2,264,650 Total general fixed assets $ 101,321,150 $ 6,184,909 $ Deletions 24,166 $ 153,427 24,150 29,844 31,936 7,967 271,490 11,888 11.888 49,888 31,000 1,111,900 1,192,788 Exhibit F -3 General fixed assets at 745,593 900,581 621,595 1,197,598 629,665 80,JUL,t5U6 231,560 5,346,024 360,001 717,987 170,000 - 4,730,050 1,476,166 101,407,869 1,864,268 2,757,756 3,340,434 $ 104,165,625 93 r 1 J t C GENERAL LONG -TERM DEBT ACCOUNT GROUP The General Long Term Debt Account Group is a self - balancing account group which is used to account for unmatured general long -term debt and other obligations backed by the full faith and credit of the Borough except those long -term obligations which are required to be accounted for in the proprietary fund types and trust funds. KODIAK ISLAND BOROUGH General Long -Term Debt Account Group Schedules of Long -Term Debt Years ended June 30, 2002 and 2001 Amount available and to be provided for the payment of general long -term debt: Amount available in Debt Service Fund: General obligation bonds Accrued annual leave Amount to be provided: General obligation bonds Judgments Environmental Protection Agency loan Alaska Department of Environmental Conservation loans Total General obligation bonds: 1993 bonds 1994 bonds 1998 refunding 2000 Series E bonds 2000 Series F bonds Other long -term debt: Judgment payable Environmental Protection Agency loan Alaska Department of Environmental Conservation loans Accrued annual leave Total Exhibit G -1 2002 2001 $ 448,065 $ 344,942 142,793 113,983 590,858 458,925 16,166,935 17,345,058 2,053,000 1,350,000 52,083 72,919 101,247 105,272 18,373.265 18,873,249 $ 18,964,123 $ 19.332,174 $ 3,680,000 $ 4,505,000 1,030,000 1,030,000 9,445,000 9,495,000 1,365,000 1,485,000 1,095.000 1,175,000 16,615,000 17,690,000 2,053,000 1,350,000 52,083 72,919 101,247 105,272 142,793 113,983 2,349,123 1,642,174 $ 18,964,123 $ 19,332,174 94 ADDITIONAL INFORMATION BONDED INDEBTEDNESS The following schedules reflect total bonded indebtedness of the Borough by bond issue. Each issue outstanding is reflected by date, interest rate, inclusive bond numbers, and amount of principal and interest due. Total indebtedness is reflected on a summary page of all debts not defeased. Exhibit H -1 KODIAK ISLAND BOROUGH Summary of Bonded Debt Service Requirements to Maturity June 30, 2002 Annual principal and interest requirements on General Obligation Refunding and Construction Bonds. Year Principal Interest Total 2003 $ 1,120,000 $ 780,993 $ 1,900,993 2004 1,180,000 727,690 1,907,690 2005 1,235,000 669,815 1,904,815 2006 1,295,000 607,785 1,902,785 2007 1,360,000 515,078 1,875,078 2008 1,440,000 469,155 1,909,155 2009 1,505,000 402,605 1,907,605 2010 1,575,000 332,885 1,907,885 2011 1,645,000 259,735 1,904,735 2012 1,360,000 183,180 1,543,180 2013 1,420,000 124,700 1,544,700 2014 1,480,000 63,640 1,543,640 $ 16,615,000 $ 5,137,261 $ 21,752,261 95 KODIAK ISLAND BOROUGH General Obligation Bonds, 1993 Series A Retirement Schedule 1993 Bond Issue Exhibit H -2 This issue, dated November 15, 1993, was issued as registered bonds under a book entry system registered in the name of Cede & Company, as Nominee of The Depository Trust Company, New York, New York, the securities depository for the 1993 Bonds. This issue was marketed by John Nuveen & Co. Legal opinion was rendered by bond council, Wohiforth. Argetsinger, Johnson & Brecht of Anchorage, Alaska. These bonds were issued to build the Northstar Elementary School, remodel the Ouzinkie School, and remodel and expand the Kodiak Island Hospital. Bonds are payable at First Trust N.A., St. Paul, Minnesota. Fiscal year 2003 2004 2005 2006 Interest rate 4.4 %n 4.55% 4.75% 4.9% Interest Principal Interest due due due August 15 February 15 February 15 Total $ 85,730 $ 860,000 $ 85,730 $ 1,031,460 66,810 900,000 66,810 1,033.620 46,335 940,000 46,335 1,032,670 24,010 980.000 24,010 1,028,020 $ 222,885 $ 3,680,000 $ 222,885 $ 4,125.770 96 KODIAK ISLAND BOROUGH General Obligation Bonds, 1994 Series A Retirement Schedule Exhibit H -3 1994 Bond Issue This issue, dated November 15, 1993, was issued as registered bonds under a book entry system registered in the name of Cede & Company, as Nominee of The Depository Trust Company, New York, New York, the securities depository for the 1994 Bonds. This issue was marketed by John Nuveen & Co. Legal opinion was rendered by bond council, Wohlforth, Argetsinger, Johnson & Brecht of Anchorage, Alaska. These bonds were issued to build the Northstar Elementary School, remodel the Ouzinkie School, and remodel and expand the Kodiak Island Hospital. Bonds are payable at First Trust N.A., St. Paul, Minnesota. 97 Interest Principal Interest due due due Fiscal year Interest rate August 15 February 15 February 15 Total 2003 5.4% $ 27,810 $ — $ 27,810 $ 55,620 2004 5.4% 27,810 — 27,810 55,620 2005 5.4% 27,810 — 27,810 55,620 2006 5.4 %n 27,810 — 27,810 55,620 2007 5.4% — 1,030,000 27,810 1,057,810 $ 111,240 $ 1,030,000 $ 139,050 $ 1,280,290 97 Exhibit H -4 I KODIAK ISLAND BOROUGH General Obligation Refunding Bonds, 1998 Series A Retirement Schedule 1998 Bond Issue This issue, dated December 7, 1998, was issued under a book entry system registered in the name of Cede & Company, as Nominee of The Depository Trust Company, New York, New York, the securities depository for the 1998 Bonds. The financial advisor for this issue was Kaplan Financial Consulting, Inc. Legal opinion was rendered by bond council, Birch, Horton, Bittner, and Cherot. The paying agent for this issue was Alaska USA Trust Company. These bonds were issued to refund all but $1,030,000 of the 1994 bond issue. This resulted in a total interest savings of $504,859. T di 98 Interest Principal Interest due due due Fiscal year Interest rate August 15 February 15 February 15 Total 2003 3.75% $ 202,584 $ 50,000 $ 202,585 $ 455,169 2004 4.00% 201,647 55,000 201,647 458,294 2005 4.00% 200,548 55,000 200,547 456,095 2006 4.00% 199,448 60,000 199,447 458,895 2007 4.00% 198,248 60,000 198,248 456,496 2008 4.30% 197,048 1,150,000 197,047 1,544,095 2009 4.30% 172,323 1,200,000 172,322 1,544,645 2010 4.30% 146,523 1,250,000 146,522 1,543,045 2011 4.30% 119,648 1,305,000 119,647 1,544,295 2012 4.30% 91,590 1,360,000 91,590 1,543,180 2013 4.30% 62,350 1,420,000 62,350 1,544,700 2014 4.30% 31,820 1,480,000 31,820 1,543,640 $ 1,823,777 $ 9,445,000 $ 1,823,772 $ 13,092,549 T di 98 t t KODIAK ISLAND BOROUGH General Obligation Bonds, 2000 Series E Retirement Schedule Exhibit H -5 2000E Bond Issue This issue, dated December 12, 2000, was issued under a book entry system registered in the name of Cede & Company, as Nominee of the Depository Trust Company, New York, New York, the securities depository for the 2000 Series E Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council, Wohlforth, Vassar, Johnson & Brecht of Anchorage, Alaska. This bond was issued to repair the high school roof. The high school roof repair is scheduled to be completed by the fall of 2001. Total 191,726 190,788 189,612 193,200 191,312 194,000 191,000 192,750 1 $ 179,194 $ 1,365,000 $ 179,194 $ 1,723,388 99 Interest Principal Interest due due due Fiscal year Interest rate August 01 February 01 February 01 2003 4.75% $ 33,363 $ 125,000 $ 33,363 $ 2004 4.75% 30,394 130,000 30,394 2005 4.75% 27,306 135,000 27,306 2006 4.75% 24,100 145,000 24,100 2007 4.88% 20,656 150,000 20,656 2008 5.00% 17,000 160,000 17,000 2009 5.00% 13,000 165,000 13,000 2010 5.00% 8,875 175.000 8,875 2011 5.00% 4,500 180,000 4,500 Total 191,726 190,788 189,612 193,200 191,312 194,000 191,000 192,750 1 $ 179,194 $ 1,365,000 $ 179,194 $ 1,723,388 99 Exhibit H -6 I KODIAK ISLAND BOROUGH General Obligation Bonds, 2000 Series F Retirement Schedule 2000F Bond Issue This issue, dated December 12, 2000, was issued under a book entry system registered in the name of Cede & Company, as Nominee of the Depository Trust Company, New York, New York, the securities depository for the 2000 Series F Bond. This issue was marketed by the Alaska Municipal Bond Bank. Legal opinion was rendered by bond council, Wohlforth, Vassar, Johnson & Brecht of Anchorage, Alaska. This bond was issued to upgrade Peterson Elementary. The Peterson Project has already been completed. 100 Interest Principal Interest due due due Fiscal year Interest rate August 01 February 01 February 01 Total 2003 9.00% $ 41,009 $ 85,000 $ 41,009 $ 167,018 2004 9.00% 37,184 95,000 37,184 169,368 , 2005 8.35% 32,909 105,000 32,909 170,818 2006 6.90% 28,525 110,000 28,525 167,050 ' 2007 7.00% 24,730 120,000 24,730 169,460 2008 7.00% 20,530 130,000 20,530 171,060 2009 7.05% 15,980 140,000 15,980 171,960 2010 7.10% 11,045 150,000 11,045 172,090 ' 2011 7.15% 5,720 160,000 5,720 171,440 $ 217,632 $ 1,095,000 $ 217,632 $ 1,530,264 , 100 LJ 1 L a STATISTICAL SECTION Statistical Tables provide report users with a better historical perspective in assessing current financial status and trends of the Borough. a 1 F, KODIAK ISLAND BOROUGH Kodiak, Alaska General Governmental Expenditures and Other Uses by Function's' Last Ten Fiscal Years Table 1 Fiscal General Health and Other year government sanitation "' Education "' transfers Total 1993 $ 2,955,824 $ 674,032 $ 3,374,721 $ 137,962 $ 7,142,539 1994 2,555,349 690,430 3,615,695 322,228 7,183,702 1995 2,681,472 1,442,644 3,861,967 164,649 8,150,732 1996 2,941,453 1,390,307 4,678,830 267,594 9,278,184 1997 2,664,204 1,393,016 5,083,942 250,000 9,391,162 1998 2,848,474 1,506,992 6,466,321 571,296 11,393,083 1999 2,733,502 1,179,420 7,044,970 — 10,957,892 2000 2,540,354 730,888 6,500,341 55,905 9,827,488 2001 2,993,718 594,072 6,824,276 323,299 10,735,365 2002 3,027,097 280,847 7,363,880 55,034 10,726,858 (a) Includes general fund only. (b) Includes operating transfers for this function Source: Borough general ledger 101 Table 2 KODIAK ISLAND BOROUGH Kodiak, Alaska General Revenues by Source "' Last Ten Fiscal Years Fiscal Inter - year Taxes 1993 $ 4,481,158 $ 1994 4,674,382 1995 5,976,914 1996 5,693,539 1997 5,582,037 1998 7,589,595 1999 7.694,387 2000 8,057,781 2001 8,135,184 2002 8.017,344 Licenses, Inter - permits governmental and fees revenue 433,825 $ 1,991,730 $ 457.895 2,053.750 928,079 1,633,162 285,100 2,396,704 108,483 2,396,272 86,138 2,739,075 86,523 2,055,803 93,609 1,770.038 95,129 2,135,483 95,857 3.397,240 Investment Operating income transfers 289,570 $ — S 291,046 — 659,794 — 452,196 — 371,414 9,672 333,243 — 238,515 33.632 358,351 139,829 583,633 18,154 294,675 200.000 Miscellaneous revenue Total — S 7,196,283 — 7,477,073 — 9,197.949 — 8,827.539 — 8,467,878 — 10,748,051 — 10.107,860 — 10,408.608 44,945 11,012,528 140,901 12,146,017 (a) Includes general fund only. Source: Borough general ledger 102 KODIAK ISLAND BOROUGH Kodiak, Alaska Property Tax Levies and Collections Last Ten Fiscal Years Table 3 Source: Borough general ledger 103 Percent of Percent of Percent of current Delinquent total tax Outstanding delinquent Fiscal Total Current tax levy tax Total tax collections delinquent taxes to year tax levy collections collected collections collections to tax levv taxes taxlevv 1993 $ 4.045 235 $ 3.907,612 96.6 $ 60,633 $ 3.968,245 98.1 $ 169.584 4.2 1994 4,353.371 4,176.676 95.9 21,295 4,197,971 96.4 193.624 4.4 1995 5,141,728 4.955,108 96.4 56,140 5,011,248 97.5 232.679 4.5 1996 5,466,066 5.249,163 96.0 56,531 5,305,699 97.1 289,210 5.3 1997 5,576,773 5,478,939 98.2 96,490 5,575.429 100.0 192.722 3.5 1998 7,384,490 7,121,678 96.4 77,576 7,199,254 97.5 381.180 5.2 1999 7,704,172 7,575,491 98.3 314,367 7,889,858 102.4 234,738 3.0 2000 7,743.649 7,507,018 %.9 175,066 7.682,084 99.2 316.482 4.1 2001 8,164,127 7,912,859 96.9 204,458 8,117,316 99.4 364,044 4.5 2002 8.411,173 8,313,881 98.8 362.377 8,676.258 103.2 292,823 3.5 Source: Borough general ledger 103 Table 4 KODIAK ISLAND BOROUGH Kodiak, Alaska Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Source: Borough assessment and tax records and State full value determination Last Ten Years Assessed Values $800,000,000 $600,000,000 $400,000,000 $200,000,000 104 $0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Ratio of total assessed to Real Property Personal Property Total total Fiscal Assessed Full value Assessed Full value Assessed Full value full value year value determination value determination value determination determination 1993 $ 467,821,217 $ 497.758,375 $ 91,537.867 $ 331,544.400 $ 559,359,084 $ 829,302,675 6245 1994 499.172.455 517,754,900 92,364,018 325.842.100 591.436.473 843.597,000 70.11 1995 515.954,650 539,053.753 98,616,145 319,052,138 614.570.795 858.105,891 71.62 1996 538.637,500 560,459,900 101.835.076 318,741,600 640.462.576 879,201,500 72.85 1997 549,456,964 565,281.400 104,677,687 312.465.100 654.134,651 877.746,500 74.52 1998 573.742,998 587,145.000 107,599,894 310,049,900 681,342,892 897.194.900 75.94 1999 577,551,709 599.696.900 109,304,683 297,058.600 686,856,392 896.755.500 76.59 2000 594,870 287 613.787.700 120,828.748 323.947.400 715.699.035 936.735.100 76.40 2001 626,906,341 641,419.200 131.849,192 336,548,600 748.755.533 950.967.800 78.74 2002 635,931.458 654,299,600 116.117.602 323,479.600 752.049,060 977.779.200 76.91 Source: Borough assessment and tax records and State full value determination Last Ten Years Assessed Values $800,000,000 $600,000,000 $400,000,000 $200,000,000 104 $0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 KODIAK ISLAND BOROUGH Kodiak, Alaska Property Tax Razes and Contributions to the School District (per SI00 of Assessed Value) Last Ten Fiscal Years Table 5 KHf City Fiscal General of Year Fund Kodiak 1993 5.50 2.00 1994 5.50 100 1995 6.75 2.00 1996 6.75 2.00 1997 6.75 2.00 1998 9.25 2.00 1999 9.25 100 2000 9.25 2.00 2001 9.25 100 2002 9.25 2.00 Table 5 Contributions to the School District Fis®1 Property Tax Rates %tillage Year Value Contribution Woodland 1993 S 559,359,084 S 3,864,691 6.91 1994 591,436,473 Acres 6.75 1995 614570,795 3,770,399 6.14 19% Street 4,574,068 Road Services Areas 654,134,651 Fire Areas 7.40 Lighting Monashka Service Bar View Women Senice Women Area Bav District 1 Road Bav Area No. 1 Bav 0.75 2.00 1.75 1.00 2.50 1.25 1.25 0.75 2.00 1.75 1.00 2.50 1.50 1.25 0.75 1.50 1.75 1.00 2.00 1.50 1.25 0.50 1.75 1.75 1.00 2.00 1.50 125 0.50 1.50 1.75 1.00 2.00 1.50 1.25 0.50 1.50 0.75 1.00 2.00 1.50 1.25 - 1.50 0.50 1.00 2.00 1.50 1.25 - 1.50 0.50 1.00 2.00 1.50 1.25 - 1.50 1.00 1.00 2.00 1.50 1.25 - 1.50 1.25 1.00 2.00 1.50 1.25 Contributions to the School District Fis®1 Assessed Amount of %tillage Year Value Contribution Equivalent 1993 S 559,359,084 S 3,864,691 6.91 1994 591,436,473 3,990,947 6.75 1995 614570,795 3,770,399 6.14 19% 640,462576 4,574,068 7.14 1997 654,134,651 4,839,887 7.40 1998 681,342,892 5,715,361 8.39 1999 686,856,392 6,492,876 9.45 2000 715,699,035 6,678,652 9.33 2001 748,755533 6,913,926 9.23 2002 752,049,060 7550.506 10.04 Source: Borough ordinance and assessment 105 Table 6 KODIAK ISLAND BOROUGH Kodiak, Alaska Ten Largest Property Taxpayers Year ended June 30, 2002 Source: Borough tax records. 1111" Percentage Percentage of total Net of total assessed Assessed taxes taxes value valuation levied levied International Seafoods of Alaska 1.5% $ 11,065,508 $ 142,736 1.7 Western Alaska Fisheries 1.7% 13,005,141 136,063 1.6% CSX Lines LLC 1.3% 9,539,545 109,450 1.3% Ocean Beauty Seafoods Inc. 1.4% 10,294,550 106,433 1.3% Alaska Pacific Seafoods 1.3% 10,053,751 104,084 1.2% Wal -Mart 1.2% 9,039,495 102,896 1.2% Kodiak Fishmeal Company 1.1% 8,106,952 82,022 1.0% Mill Bay Plaza Assoc LTD 0.9% 7,138,400 80,307 1.0% Afognak Native Corporation 1.0% 7,835,600 72,822 0.9% Brechan Enterprises Inc. 0.8% 6,297,365 68,018 0.8% Totals 12.3% $ 92,376,307 $ 1,004,831 11.9% Source: Borough tax records. 1111" KODIAK ISLAND BOROUGH Kodiak, Alaska Ratio of Net General Bonded Debt "' Last Ten Fiscal Years Table 7 Sources: Information obtained from assessment records and Borough general ledger except as otherwise noted. (a) Information obtained from State of Alaska, Department of Community and Regional Affairs, Certified Population for Revenue Sharing Program. 107 Ratio Net of net bonded Less Debt bonded debt debt Fiscal Assessed Gross Service Net bonded to assessed per year Population value bonded debt Fund debt value capita 1993 15,535 $ 559,359,084 $ 10,470,000 $ 5,847,171 $ 4.622,829 0.8 S 298 1994 15,245 591,436,473 27,915,000 4.133,559 23,781,441 4.0 1.560 1995 15,575 614,570,795 25,665,000 2.075,768 23.589,232 3.8 1,515 1996 15,400 640,462,576 23.205,000 1,759,644 21.445,356 3.3 1,393 1997 14,058 654,134,651 21,660,000 549.569 21.110.431 3.2 1.502 1998 14,181 681,342,892 20,020,000 432,942 19.587.058 2.9 1.381 1999 13,848 686,856,392 18,910,000 340,159 18.569,841 2.7 1,341 2000 13,989 " 715,699,035 17,025,000 272,651 16,752,349 2.3 1.198 2001 14,028 748,755,533 17.690,000 344,942 17,345.058 2.3 1.236 2002 13,913 752,049,060 16,615,000 448,065 16.166,935 2.1 1,162 Sources: Information obtained from assessment records and Borough general ledger except as otherwise noted. (a) Information obtained from State of Alaska, Department of Community and Regional Affairs, Certified Population for Revenue Sharing Program. 107 Table 8 Kodiak Island Borough: General obligation bonds City of Kodiak: Revenue bonds Total KODIAK ISLAND BOROUGH Kodiak, Alaska Computation of Direct and Overlapping Debt June 30, 2002 $ 18,456,935 $ 18,456,935 (a) Gross debt outstanding less applicable amounts in the Debt Service Funds. (b) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to valuation of property subject to taxation in reporting unit. (c) Under Alaska Statutes Title 29, there is no limitation on municipal debt. Sources: Borough general ledger and City of Kodiak records. 108 Percentage Kodiak Island Net debt applicable to this Borough outstanding governmental share of (a) unit (b) debt (c) $ 16,166,935 100% $ 16,166,935 2,290,000 100% 2,290,000 $ 18,456,935 $ 18,456,935 (a) Gross debt outstanding less applicable amounts in the Debt Service Funds. (b) Determined by ratio of assessed valuation of property subject to taxation in overlapping unit to valuation of property subject to taxation in reporting unit. (c) Under Alaska Statutes Title 29, there is no limitation on municipal debt. Sources: Borough general ledger and City of Kodiak records. 108 Table 9 KODIAK ISLAND BOROUGH Kodiak, Alaska Computation of Legal Debt Margin June 30, 2002 Assessed value Plus exempt property Total $ 752.049.060 1.994.297.545 $ 2.746.346.605 The State of Alaska does not mandate a debt limit to its municipalities and political subdivisions. Debt capacity is ultimately determined by the voters and the marketplace. Source: Borough assessment records. 109 Table 10 KODIAK ISLAND BOROUGH Kodiak, Alaska Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures and Transfers Last Ten Fiscal Years Fiscal Ratio of Interest Total debt year Principal (a) and fees service 1993 $ 1,745,833 $ 736,357 $ 2,482,190 $ 1994 1,775,833 690,170 2,466,003 1995 2,270,833 1,760,185 4,031,018 1996 2,480,833 1,386,681 3,867,514 1997 1,565,833 1,239,996 2,805,829 1998 1,660,833 1,141,366 2,802,199 1999 1,915,833 853,652 2,769,485 2000 1,905,833 858,164 2,763,997 2001 2,015,834 746,994 2,762,828 2002 1,095,833 853,543 1,949,376 Total Ratio of general debt service expenditures to general and transfers expenditures 7,142,539 34.8 7,162,545 34.4 8,150,732 49.5 9,278,184 41.7 9,391,162 29.9 11,393,083 24.6 10,957,892 25.3 9,827,488 28.1 10,735,365 25.7 10,726,858 18.2 (a) Serial maturities in the case of serial bonds; annual Debt Service Fund requirements in the case of term bonds. Source: Borough general ledger and debt documents 110 Table 11 KODIAK ISLAND BOROUGH Kodiak, Alaska Demographic Statistics Last Ten Fiscal Years Fiscal year Population (a) 1993 15,535 1994 15,245 1995 15,575 1996 15,400 1997 14,058 1998 14,181 1999 13,848 2000 13,989 2001 14,028 2002 13,913 Sources: (a) State of Alaska, DCRA certified population. (b) Kodiak Island Borough School District II1� (c) Department of Labor, Anchorage School enrollment (b) 2,632 2,802 2,773 2,793 2,809 2.897 2,815 2,798 2,750 2,828 Percentage Unemployment rate (c) 6.0 9.4 11.2 13.7 7.7 8.2 6.8 7.2 9.5 8.9 111 KODIAK ISLAND BOROUGH Kodiak, Alaska Property Value, Construction and Bank Deposits last Ten Fiscal Years *Assessed value. Source: Borough assessing records, City of Kodiak building department and local bankers. Table 12 Construction Deposits Commercial Residential in local Fiscal No. of No. of Commercial year permits Value permits Value 1993 55 $ 3,359,264 113 $ 6,218,434$ 1994 45 2,947,984 146 5,037,061 1995 59 6,055,321 159 4,305,352 1996 41 3,862,599 160 7,864,907 1997 36 1,559,938 112 6,262,439 1998 39 16,676,612 149 8,103,624 1999 51 6,784,879 141 8,222,313 2000 54 2,720,259 156 9,086,074 2001 33 1,379,673 198 11,501,804 2002 30 1,494,337 190 10,439,985 *Assessed value. Source: Borough assessing records, City of Kodiak building department and local bankers. Table 12 112 Property Value* Deposits in local banks Commercial Residential Nontaxable 94,838,546 $ 134,637,371 $ 333,203,846 $ 2.027,200,278 98,970,444 148,714,050 350.458.405 2.271.468,957 103,838,289 148,156,300 367,798,350 2.354,550.201 108,116,331 155,755,000 382,872,500 2,404,513,974 108,926,259 157,911,064 391,545,900 2,404,872,414 107,973,700 161,787,264 411,955,734 2,420,596,952 123,206,000 160,921,064 416,630,645 2,420,601,099 120,465,733 172,709,507 422,160,780 2,475,199,399 119,637,923 193,882,996 433.023,355 2,475,199,399 117,241,908 199,689,615 443.305,997 1.994,297,545 112 KODIAK ISLAND BOROUGH Kodiak, Alaska Miscellaneous Statistical Data Last Ten Fiscal Years Date of Incorporation - September 30, 1963, Second Class Borough by Chapter 146 Sessions, Laws of Alaska 1961, as amended, Form of Government - Mayor /Assembly. Building permits: Permits issued 1993 1994 1995 19% Land area - square miles 7,130 7,130 7,130 7,130 Miles of improved street 21.5 21.6 21.6 21.6 Miles of sanitary sewers 16.7 16.8 16.8 16.8 Number of water taps 877 913 921 921 Number of sanitary sewer taos 858 891 899 899 Building permits: Permits issued 108 191 218 Value of buildings (thousands) 9,578 4,740 10,360 Fire protection: Number of fire stations 2 2 2 Number of employees l I I Police protection - none Recreation: Parks - number of acres 223 223 223 Facilities: Number of playgrounds 15 15 15 Number of swimming pools 1 I 1 Education: Number of schools: City of Kodiak Elementary 3 3 3 City of Kodiak Junior High 1 I 1 City of Kodiak High School 1 1 I Village Schools (a) 9 9 9 Number of personnel: (b) Administration 5.0 5.0 5.0 Principals 9.5 9.5 11.0 Teachers 172.4 180.0 185.3 Technical 6.5 6.5 6.5 Clerical and Aides 75.3 81.3 73.3 MaintenancelWarehouse 19.1 19.1 19.7 Custodial 21.2 21.7 21.6 Food Service 8.3 8.3 8.5 Total number of personnel 317.3 331.4 330.9 Number of students 2,632 2,802 2,773 Number of municipal employees 67 64 65 Elections: Number of registered voters 6,654 7,061 7,382 Number voting in last election 2,328 2,634 2,113 Percent of registered voters 35.0% 37.0% 29.0% (a) The majority of Village Schools are grades K -12. (b) Based on full time equivalents. (c) As of July 1, 1996 the City of Kodiak assumed ownership, maintenance, and operation of the existing water and sewer utilities in Service District. Source: Borough records. 201 11,728 2 1 224 16 1 F1 It 6.0 12.0 183.8 3.0 61.7 12.0 22.5 304.7 2,793 63 8,217 1,471 17.9% 113 Table 13 1997 24.7 (c) (c) (c) 148 7,822 2 1 224 16 1 4 1 1 9 6.0 11.7 188.5 3.5 63.7 9.0 2,809 63 9,350 2,120 22.7% 1998 24.7 (c) (c) (c) 188 24,780 2 1 224 16 1 4 1 1 9 5.2 11.4 179.6 9.0 72.7 10.0 77 A 2,897 50 9,967 2,076 20.8% 1999 2000 7,130 7,130 25.0 25.0 - (c) (c) - (c) (c) - (c) (c) 192 210 15,007 11,806 2 2 1 1 224 224 16 16 4 4 1 1 1 1 9 9 5.2 4.2 11.4 10.3 178.1 188.6 9.0 11.1 75.2 78.9 8.0 10.8 30.6 29.0 6.7 10.7 324.2 343.6 2,815 2,798 46 36 10,389 9,935 1,972 2,525 19.0% 25.4% 2001 2002 7,130 7,130 25.6 25.66 (c) (c) (C) (c) (c) (c) 231 220 12,881 11,934 2 2 1 1 224 224 16 16 4 4 1 1 1 1 9 8 7.5 7.2 9.5 11.3 200.0 202.6 3.0 4.0 79.5 121.0 15.0 18.0 39.0 32.0 8.0 8.5 361.5 404.6 2,750 2,828 37 10,311 10,08.5 2,521 2,914 24.4% 28.9% 114