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CAFR FY2006r it J 1 1 1 KODIAK ISLAND BOROUGH Comprehensive Annual Financial Report June 30, 2006 1 1 KODIAK ISLAND BOROUGH Table of Contents i w 1 1 Page Introductory Section: Letter of Transmittal i -iv GFOA Certificate of Achievement v Organizational Chart vi Elected Officials (Photographs) vii Borough Officials viii Map of Kodiak Island Borough ix Financial Section: Independent Auditors' Report 1 -2 Management's Discussion and Analysis 3 -12 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Assets 13 Statement of Activities 14 Fund Financial Statements: Balance Sheet — Governmental Funds 15 Reconciliation of Net Assets Between the Government -Wide and Fund Financial Statements 16 Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds 17 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 18 Balance Sheet — Proprietary Funds — Business -Type Activities — Enterprise Funds 19 Statement of Revenues, Expenses, and Changes in Fund Equity — Proprietary Funds — Business -Type Activities — Enterprise Funds 20 Statement of Cash Flows — Proprietary Funds — Business -Type Activities — Enterprise Funds 21 -22 Notes to Financial Statements 23 -55 Required Supplementary Information: Schedule of Funding Progress — PERS 57 Budgetary Comparison Schedule — General Fund 58 -59 Budgetary Comparison Schedule — Special Revenue Fund — Facilities 60 Budgetary Comparison Schedule — Debt Service Fund — Education and Health 61 Notes to Required Supplementary Information — Budgetary Comparison Schedules 62 Nonmajor Governmental Funds: Combining Balance Sheet 63 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 64 Nonmajor Special Revenue Funds: Combining Balance Sheet 66 -69 1 i] KODIAK ISLAND BOROUGH 1 Table of Contents Page Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits) 70 -73 Schedules of Revenues, Expenditures, Transfers, and Changes in Fund Balances (Deficit) — Budget and Actual: Fire and Road Service Areas: Fire: Fire Protection Area No. 1 74 Women's Bay Fire Department 75 Kodiak Airport Fire District Road: 76 Monashka Bay Road Service Area 77 Service District No. 1 78 Women's Bay Road Service Area 79 Bay View Road Service Area 80 Service Area No. 2 81 Coastal Management 82 Child Care Assistance Program 83 L.E.P.C. 84 Land Sales 85 Buildings and Grounds 86 Woodland Acres Street Light Service Area 87 Trinity Acres Street Light Service Area 88 Kodiak Arts Council 89 Tourism Development 90 Mission Lake Tide Gate Fern Fuller Trust 91 92 Trinity Acres Paving 93 Debt Service Funds: Balance Sheet — Other 94 Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual: Other 95 Nonmajor Capital Projects Fund: Combining Balance Sheet 96 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 97 Schedule of Revenues, Expenditures, and Changes in Fund Balance (Deficit): Various Borough Projects 98 State Capital Grants 99 Supplemental Schedule of Capital Projects: Capital Projects Funds 100 -101 i] 1 I KODIAK ISLAND BOROUGH 1 Table of Contents Enterprise Funds: Statement of Revenues, Expenses, and Changes in Fund Equity — Budget and Actual: Municipal Solid Waste Collection and Disposal 102 Hospital Facilities 103 Kodiak Fisheries Research Center 104 911 Services Funds 105 Supplementary Schedules: Summary of Bonded Debt Service Requirements to Maturity 106 General Obligation Refunding Bonds, 1998 Series A — Retirement Schedule 107 General Obligation Bonds, 2000 Series E — Retirement Schedule 108 General Obligation Bonds, 2000 Series F — Retirement Schedule 109 General Obligation Bonds, 2003 Series B — Retirement Schedule 110 General Obligation Bonds, 2004 Series C — Retirement Schedule General Obligation Bonds, 2004 Series D — Retirement Schedule 111 Statistical Section — Fund Information: 112 Net Assets by Component — Last Two Fiscal Years 113 Changes in Net Assets — Last Two Fiscal Years 114 -116 Fund Balances of Governmental Funds — Last Two Fiscal Years 117 Changes in Fund Balances of Governmental Funds — Last Three Fiscal Years 118 General Revenues by Source — Last Ten Fiscal Years 119 Assessed and Estimated Actual Value of Taxable Property — Last Ten Fiscal Years 120 Direct and Overlapping Property Tax Rates and Contributions to the School District 121 Principal Property Tax Payers — Current Year and Nine Years Ago 122 Property Tax Levies and Collections — Last Ten Years 123 Ratios of Net General Bonded Debt Outstanding — Last Ten Fiscal Years 124 Computation of Direct and Overlapping Debt 125 1 Legal Debt margin Information — Last Two Fiscal Years 126 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures and Transfers — Last Ten Fiscal Years 127 Demographic and Economic Statistics — Last Ten Fiscal Years 128 Average Monthly Employment & Earnings 2005 129 Miscellaneous Statistical Data 130 -131 Property Value, Construction and Bank Deposits 132 I INTRODUCTORY SECTION 1 1 1 1 1� 1 u 1 1 Kodiak Island Borough Finance Department 710 Mill Bay Road Kodiak, Alaska 99615 Phone (907) 486 -9320 Fax (907) 486 -9399 December 1, 2006 Members of the Assembly Kodiak Island Borough, Alaska State of Alaska statutes and local charter provisions require that all general - purpose local governments publish a complete set of financial statements presented in conformity with accounting principles generally accepted in the United State of America (GAAP) and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the Kodiak Island Borough (Borough) for the fiscal year ended June 30, 2006. This report consists of management's representations concerning the finances of the Borough. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the Borough has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Borough's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Borough's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The Borough's financial statements have been audited by Altman, Rogers & Co., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Borough for the fiscal year ended June 30, 2006, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the Borough's financial statements for the fiscal year ended June 30, 2006, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. 1 Members of the Assembly Kodiak Island Borough, Alaska 1 The independent audit of the financial statements of the Borough was part of a broader, state and federally mandated "Single Audits" designed to meet the special needs of state and federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of state and federal awards. These reports are available in the Borough's separately issued Single Audit Report. i GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD &A). This letter of transmittal is designed to complement MD &A and should be read in conjunction with it. The Borough's MD &A can be found immediately following the report of the independent auditors. Profile of the Government The Kodiak Island Borough lies at the western border of the Gulf of Alaska, approximately 40 miles south of the Kenai Peninsula. Kodiak Island is the largest island in Alaska and the second largest in the United States. About two- thirds of the Borough lies in the Kodiak archipelago with the remaining third on the Alaska Peninsula, across the Shelikof Strait from Kodiak Island. The Shelikof Strait is only 20 miles wide in places. The Borough encompasses 7,130 square miles, making it slightly smaller than the State of Massachusetts and serves a population of 13,811. 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. ' The Borough provides a full range of services including fire protection, the construction and maintenance of roads and other infrastructure, community and economic development, health and sanitation, culture and recreation and solid waste collection and disposal. The Borough also is financially accountable for a legally separate school district which is reported separately within the Borough's financial statements. Additional information on this legally separate entity can be found in the basic financial statements. 1 The annual budget serves as the foundation for the Borough's financial planning and control. All departments of the Borough are required to submit requests for appropriation to the Borough manager. The Borough manager uses these requests as the starting point for developing a proposed budget. The Borough Manager then presents this proposed budget to the assembly for review by April 30. The assembly is required to hold public hearings on the proposed budget and to adopt a final budget by no later than June 10. The appropriated budget is prepared by fund and department. 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. Amendments to the budget can occur anytime during the fiscal year through the Borough Assembly or administrative action. Expenditures may- not legally exceed appropriations at the following levels: Capital Projects Funds — project level, all other funds department level. 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. Budget -to- actual comparisons are provided in this report for each individual governmental and proprietary fund for which an appropriated annual budget has been adopted. For the general fund, facilities special revenue fund and education and 1 Members of the Assembly Kodiak Island Borough, Alaska health debt service fund, this comparison is presented on pages 58 -61 as part of required supplementary information. For governmental funds, other than the general fund, and education, facilities special revenue fund and education and health debt service fund, this comparison is presented in the governmental fund subsection of this report, which starts on page 62 . Also included in the governmental fund subsection are project - length budget -to- actual comparisons for each of the capital projects. For proprietary funds, this comparison is presented in the proprietary funds subsection of this report, which starts on page 101. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Borough operates. Local economy. The economic condition of the Kodiak Island Borough remains healthy. The main industries of the Borough are commercial fishing, logging, and tourism. While some segments of the commercial fishing industry have declined, others have grown. There have been large cutbacks in the logging industry, which can be attributed to the slowdown in the Asian economy. Tourism continues to grow in Kodiak with an increased number of visitors each year. To accommodate this demand, construction of fishing lodges, bed and breakfast accommodations and recreational facilities has increased along with an increase in charter boat and guide operations. There has also been an increase in the number of cruise ships visiting Kodiak in recent years as the cruise ship companies have expanded their tours of Alaska's coastal communities. Relatively new to the Kodiak Island Borough is the aerospace industry, which began with construction of g P �', g the Kodiak Launch Complex in 1998. Owned by the Alaska Aerospace Development Corporation (AADC), a public corporation of the State of Alaska, the Kodiak Launch complex is the first complete launch facility built in the United States since the 1960's and the first not owned by the Federal Government. The state -of -the -art facility includes a launch control center, payload processing facility, spacecraft assembly building and launch pad. It is designed to handle small to medium sized rockets used to launch low earth orbit satellites, as well as military, scientific and research missions. Kodiak is home to the largest U.S. Coast Guard base in the country, employing nearly 1,400 people and providing vital services to the marine industries that are an integral part of Kodiak's make -up as well as making a significant contribution to the Kodiak community. The Seafood industry is by far the largest industry in the Kodiak Island Borough. This industry includes commercial fishing, fisheries research, management and enforcement, seafood processing, and maintenance and support services. Kodiak is home to the largest port in the State, housing over 700 commercial vessels and consistently ranks among the top ten ports in the United States in terms of amount and value of product delivered. ' 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 local unemployment rate has fluctuated from 5.1% to 14.9% over the last five years, but the overall average has remained around 9 %. Long -term financial planning. Every year the Borough adopts a five -year strategic plan. In this plan the Borough decides what its' goals and objectives are for the next five years. The Borough breaks these goals out based on our Mandatory and Adopted powers. To view the complete Strategic plan you can visit our web site at www.kodiakak.us. I iii Members of the Assembly Kodiak Island Borough, Alaska Cash management policies and practices. Operating funds of the Borough are invested in interest producing instruments in accordance with the Borough's investment code. Cash forecasts are prepared to enhance investment income and reduce market risk by matching investment maturities to anticipated cash flows. Investment income includes appreciation or depreciation in the fair value of investments. Risk management. The Borough maintains an adequate fund balance in the General Fund, plus certain other funds where the liability may arise, to cover potential losses that may not be covered by insurance or the deductible portion of claims that are covered by insurance. In addition, various control techniques, including employee accident prevention training, have been implemented to minimize accident - related losses. Third party coverage is currently maintained for all of the Borough's property and activities. Additional information on the Borough's risk management activity can be found in note 8 of the notes to the financial statements. Pension and other post employment benefits. The Borough participates in the Alaska Public Employees Retirement System (PERS), a defined benefit agent, multiple employer public employee retirement system. PERS was established and is administered by the State of Alaska to provide pension, post employment healthcare, death, and disability benefits to eligible participants. At June 30, 2005 (date of most recent ' actuarial analysis), the actuarial value of liabilities exceeded the actuarial value of assets by $8.2 million. Effective July 1, 2006, the PERS retirement plan was closed by senate Bill 141. A new defined contribution plan for members first hired on or after July 1, 2006 was established. The Borough also administers a Section 457 deferred compensation arrangement for eligible Borough employees. Additional information on the Borough's pension arrangements and post employment benefits 1 can be found in Note 11 in the notes to the financial statements. Awards and Acknowledgements 1 1 1 1 F, The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Borough for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2006. This was the seventeenth consecutive year that the Borough has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This 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. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the administration and finance department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit must be given to the mayor and the assembly for their unfailing support for maintaining the highest standards of professionalism in the management of the Borough's finances. Respectfully submitted, 1.0e Rick L. Gifford Borough Manager 7� a� A. A4-�_ Karleton G. Short Director of Finance IV 1 1 1 1 1 1 1 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, 2005 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 stems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. �E QFF �t President n%[�W Executive Director V Kodiak Island Borough Fiscal Year 2006 Borough Attorney Assistant Fire Chief Borough Manager II Assistant Clerk Borough Clerk Arts Council Director Assistant Deputy Clerk Finance /MIS Director MIS Programmer/ Analyst Engineering/ Facilities Director General Accountant Community Development Director Assessor Accounts Payable Supervisor Accounting Tech Secretary III Environmental MIS Network Associate Planner Property Appraiser Administrator Specialist P Maintenance Worker Associate Planner Appraiser Enforcement Technician KFRC Baler /Landfill Maintenance Supervisor Drafting Technician Assessment Clerk 1 Engineer KFRC Secretary III Receptionist Project Manager/ Baler Operator 11 Inspector Project Assistant Baler Operator I Baler Operator I Baler Operator I Baler Operator II Borough Manager II Assistant Clerk Borough Clerk Arts Council Director Assistant Deputy Clerk Finance /MIS Director MIS Programmer/ Analyst General Accountant Accounting Tech MIS Operations Accounts Payable Supervisor Accounting Tech Payroll MIS Network Childcare Assistance Administrator Administrator Revenue Accountant Cashier Secretary III V1 MAYOR AND ASSEMBLY MEMBERS Tom Abell Deputy Presiding Officer, At Large, 2008 Jerome Selby Mayor, 2007 Reed Oswalt At Large, 2008 Pat Branson At Large, 2007 Mel Stephans At Large, 2006 vii Barbara Williams At Large, 2007 Cecil Ranney At Large, 2006 KODIAK ISLAND BOROUGH KODIAK, ALASKA BOROUGH OFFICIALS YEAR ENDED JUNE 30, 2006 MAYOR Jerome Selby `07 ASSEMBLY Tom Abell '08 Sue Jeffrey `08 Cecil Ranney `06 Barbara Williams `07 Patricia Branson `07 Reed Oswalt `08 Mel Stephens `06 MANAGEMENT RickGifford .................................................... ............................... ........................Borough Manager Karleton G. Short .............................. ............................... ........................Finance Director/Treasurer Bud Cassidy ................................................. ............................... Engineering and Facilities Director NovaJavier, CIVIC ........................................................................ ............................... Borough Clerk Mary Meyers Ogle .................. ............................... ......................Community Development Director TomAnderson ........................................................................................ ............................... Assessor RobertA. Himes ................................................................... ............................... Assistant Fire Chief Jamin, Ebell, Schmitt & Mason ................. ............................... Borough Attorney (Contracted Firm) Betty Walters ...................................................... ............................... Superintendent, School District DriaBray Holloway ............................................................. ............................... General Accountant CassandraJuenger ............................................................... ............................... Revenue Accountant Lauri Whiddon ..................................................... .............................HR Officer /Executive Assistant Viii m r m r m= r r m m m= r m = m g r ARCTIC OCEAN V BARROW PRUDNOE a4 Y 5C b UZINKI o� /K7ARL APE HINDU( EN LID AKH10K c� a KODIAK a� ISLAND Q BOROUGH _ KOTZEBUE ARCTIC , C1RCL£ NOME NORTON SOUND FAIRBANKS ALASKA k. BETHEL GILLINGHAM \ e BRISTOL BAY d VALDEZ GULF OF ALASKA KODIAK ISLAND NORTH PACIFIC OCEAN CANADA FINANCIAL SECTION Altman Ro rs W CERTIFIED I PUBLIC ' Co . � ACCOUNTANTS Independent Auditors' Report t The Honorable Mayor and Members of the Assembly Y ' Kodiak Island Borough: We have audited the accompanying financial statements of the governmental activities, the business -type ' activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the Kodiak Island Borough, Alaska, as of and for the year ended June 30, 2006, which collectively comprise the Borough's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Kodiak Island Borough, Alaska's management. Our responsibility is to express opinions on these 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 opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the aggregate ' discretely presented component unit, each major fund, and the aggregate remaining fund information of the Kodiak Island Borough, Alaska, as of June 30, 2006, and the respective changes in financial position and cash flows, where applicable, thereof 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 our report dated September 22, 2006 on our consideration of the Kodiak Island Borough, Alaska's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over ' financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. ' The management's discussion and analysis on pages 3 through 12, the schedule of funding progress for PERS on page 57 and the budgetary comparison information on pages 58 through 62 are not a required part ' of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation ' of the required supplementary information. However, we did not audit the information and express no opinion on it. 1 425 G Street Suite 500 Anchorage, Alaska 99501 Phone 907 - 274 -2992 Fax 907 - 274 -2993 ' Offices in Kodiak, Juneau and Soldotna A Professional corporation 1 LF 1 1 The Honorable Mayor and Members of the Assembly Kodiak Island Borough Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Kodiak Island Borough, Alaska's basic financial statements. The accompanying supplementary information, including the introductory section, supplemental information, supplementary schedules and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplemental information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section, supplementary schedules and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. September 22, 2006 1 1 4 A-4) 'I e, &. 1 KODIAK ISLAND BOROUGH Management's Discussion and Analysis June 30, 2006 As management of the Kodiak Island Borough, we offer readers of these financial statements this narrative overview and analysis of the financial activities of the Kodiak Island Borough for the fiscal year ended June 30, 2006. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i - v of this report. Financial Highlights • The assets of the Kodiak Island Borough exceeded its liabilities at the close of FY2006 by $141,082,630. Of this amount, $39,777,794 (unrestricted net . assets) may be used to meet the Borough's ongoing obligations to citizens and creditors. • In FY2006 the Borough's total net assets increased by $2,261,394. • At the end of the current fiscal year, the Borough's governmental funds reported combined fund balances of $65,468,515, an increase of $2,100,146 in comparison with the prior year. At the end of the FY2006, unreserved fund balance for the general fund was $2,026,113, 16% of total general fund expenditures. • The Borough's bonds payable decreased by $1,814,553 or 5% due to the payment of principal and no new bond issues. Overview of the Financial Statements Government -wide Financial Statements The government -wide financial statements are designed to provide readers with a broad overview of the Kodiak Island Borough's finances, in a manner similar to a private- sector business. The statement of net assets presents information on all of the Kodiak Island Borough's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Kodiak Island Borough is improving or deteriorating. The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the ' change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. Both of the government -wide financial statements distinguish functions of the Kodiak Island Borough that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the Kodiak Island Borough include general government, emergency preparedness, community and economic development, health and sanitation, education, culture and recreation, service district maintenance and primary and secondary education. The business -type activities of the Kodiak Island Borough include a solid waste collection and disposal facility, a Borough owned hospital, the Kodiak Fisheries Research Center and a 911 emergency system. The government -wide financial statements include not only the Kodiak Island Borough itself (known as the primary government), but also the legally separate school district for which the Kodiak Island Borough is financially accountable. Financial information for this component unit is reported separately from the financial information presented for the primary government itself. The government -wide financial statements can be found on pages 13 -14 of this report. 1 KODIAK ISLAND BOROUGH I Management's Discussion and Analysis, Continued I Fund Financial Statements ' A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Kodiak Island Borough, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. All of the funds of the Kodiak Island Borough can be divided into two categories: governmental funds and proprietary funds. Governmental Funds — Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information , may be useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long -term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Kodiak Island Borough maintains 27 individual governmental funds. Information is presented separately in , the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, the facilities special revenue fund and the education and health debt service fund, which are all considered to be major funds. Data from the other nonmajor funds are combined ' into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in the supplementary information section of this report. The Kodiak Island Borough adopts an annual appropriated budget for its general fund, special revenue funds and debt service funds. Budgetary comparison statements have been provided for the funds to demonstrate compliance with this budget. The basic governmental financial statements can be found on pages 15 -18 of this report. Proprietary Funds — The only proprietary fund type that the Kodiak Island Borough uses is enterprise funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. Proprietary funds provide the same type of information as government -wide financial statements, only in more detail. The Kodiak Island Borough uses enterprise funds to account for a solid waste collection and disposal facility, a Borough -owned hospital leased to the Sisters of Providence d.b.a. Providence Alaska Medical Center, rents and utilities of the Borough -owned Kodiak Fisheries Research Center, and 911 phone charges and expenses. The Kodiak Island Borough adopts an annual appropriated budget for its proprietary funds. Budgetary comparison statements have been provided for the funds to demonstrate compliance with the budget. The basic proprietary fund financial statements can be found on pages 19 -22 of this report. Notes to the Financial Statements — The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 23 -55 of this report. 1 1 1 1 1 1 1 u KODIAK ISLAND BOROUGH Management's Discussion and Analysis, Continued Other Information — In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Kodiak Island Borough's progress in funding its obligation to provide pension benefits to its employees and budgetary comparison schedules for the general fund facilities special revenue fund and the education and health debt service fund. Required supplementary information can be found on pages 58 -64 of this report. Government -wide Financial Analysis Statement of Net Assets As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the Kodiak Island Borough assets exceeded liabilities by $141,082,630 at the close of FY2006, the most recent fiscal year. The largest portion of the Kodiak Island Borough's net assets ($101,304,836 or 71 %) reflects its investment in capital assets (e.g. land, buildings, equipment and infrastructure) net of related debt. The Kodiak Island Borough uses these capital assets to provide services to citizens; consequently, these capital assets are not available for future spending. Although the Borough's investment in capital assets is reported net of debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. For more detailed information see the statement of net assets on page 13. The remaining balance of unrestricted net assets, $39,777,794 may be used to meet the Borough's ongoing obligations to citizens and creditors. Governmental Business -type Activities Activities Total 2006 2005 2006 2005 200b 2005 Current and other assets $ 62,586,633 60,501,959 6,803,479 5,599,369 69,390,112 66,101,328 Capital assets 74,210,255 75,876,951 39,858,719 41,148,995 114,068,974 117,025,946 Total assets $ 136,796,888 136,378,910 46,662,198 46,748,364 183,459,086 183,127,274 Long -term liabilities $ 31,947,050 33,698,409 4,661,685 4,284,141 36,608,735 37,982,550 Other liabilities (3,519,845) (3,525,900) 9,287,566 9,849,388 5,767,721 6,323,488 Total liabilities $ 28,427,205 30,172,509 13,949,251 14,133,529 42,376,456 44,306,038 Net assets: Invested in capital assets, net of related debt $ 62,716,326 61,154,204 38,588,510 39,878,785 101,304,836 101,032,989 Unrestricted 45,653,357 45,052,197 (5,875,563) (7,263,950) 39,777,794 37,788,247 Total net assets $ 108,369,683 106,206,401 32,712,947 32,614,835 141,082,630 138,821,236 For more detailed information see the statement of net assets on page 13. The remaining balance of unrestricted net assets, $39,777,794 may be used to meet the Borough's ongoing obligations to citizens and creditors. KODIAK ISLAND BOROUGH Statement of Activities Management's Discussion and Analysis, Continued The following condensed table of changes in net assets displays the revenues and expenses for the current and prior year. Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants General revenues: Property taxes Grants and entitlements not restricted to specific programs Land sale Severance taxes Support from primary government Loss of disposal of capital assets Licenses and permits On behalf PERS payment Other Investment earnings Total revenues Expenses: General government Emergency preparedness Community and economic development Health and sanitation Education, culture, and recreation Service district maintenance Education Interest on long -term debt Municipal solid waste collection Hospital facilities Kodiak fisheries research center 911 services Total expenses Change in net assets before transfers Transfers Change in net assets Net assets, beginning of year Net assets, end of year Governmental activities Business -type activities Total 2006 2005 2006 2005 2006 2005 f 1 $ 535,045 466,120 6,456,710 5,888,596 6,991,755 6,354,716 1,240,547 721,453 - - 1,240,547 721,453 298,852 2,917,160 - - 298,852 2,917,160 9,807,551 9,063,729 - - 9,807,551 9,063,729 3,482,351 2,384,538 - - 3,482,351 2,384,538 363,389 - - - 363,389 - 1,186,908 1,005,539 - - 1,186,908 1,005,539 (53,034) - (17,700) - (70,734) - 285,241 - - - 285,241 - 113,667 - - - 113,667 - 70,065 55,692 409,595 - 479,660 55,692 2,798,391 1,750,321 161,892 70,812 2,960,283 1,821,133 20,128,973 18,364,552 7,010,497 5,959,408 27,139,470 24,323,960 3,984,390 7,156,005 - - 3,984,390 7,156,005 8,598 25,850 - - 8,598 25,850 784,002 509,680 - - 784,002 509,680 403,866 365,072 - - 403,866 365,072 164,053 185,993 - - 164,053 185,993 336,385 347,934 - - 336,385 347,934 10,831,588 10,207,757 - - 10,831,588 10,207,757 1,700,089 1,101,598 - - 1,700,089 1,101,598 3,446,453 3,362,348 3,446,453 3,362,348 - - 1,304,583 1,344,987 1,304,583 1,344,987 - - 1,856,875 1,878,788 1,856,875 1,878,788 - - 57,194 69,178 57,194 69,178 18,212,971 19,899,889 6,665,105 6,655,301 24,878,076 26,555,190 1,916,002 (1,535,337) 345,392 (695,893) 2,261,394 (2,231,230) 247,280 170,602 (247,280) (170,602) - - 2,163,282 (1,364,735) 98,112 (866,495) 2,261,394 (2,231,230) 106,206,401 107,571,136 32,614,835 33,481,330 138,821,236 141,052,466 $ 108,369,683 106,206,401 32,712,947 32,614,835 141,082,630 138,821,236 Governmental activities increased the Kodiak Island Borough's net assets by $2,163,282. The major differences were an increase of over $500,000 in operating grants, over a $1,000,000 increase in interest earnings, and over a $1,000,000 increase in grants. There were some major increases in expenses also including an increase of $623,831 in education and $598,491 in interest on long term debt. Z 1 L PI it KODIAK ISLAND BOROUGH Management's Discussion and Analysis, Continued Business -type activities increased the Kodiak Island Borough's net assets by $98,112. The major differences were a $568,114 in charges for services and a $361,895 increase in other revenues. Part of the decrease resulted from the transfer of $247,280 to governmental funds. The proprietary funds had an operating gain of $345,392 before transfers. 2006 Program Revenue vs. Expense by Governmental Activities Interest on Long -Tenn Debt Education Fern Fuller Trust Service District Maintenance Maintenance and Operation Fire Services Education, Culture and Recreation Health and Sanitation Community Development Emergency Preparedness General Government 0 1 2 3 4 5 8 7 For more detailed information see the statement of activities on page 14. 8 9 10 ■ expenses (in millions) ■ program revenue (in millions) FA L KODIAK ISLAND BOROUGH I Management's Discussion and Analysis, Continued Financial Analysis of the Government's Funds As noted earlier, the Kodiak Island Borough uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental Funds — The focus of the Kodiak Island Borough's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Kodiak Island Borough's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Kodiak Island Borough's governmental funds reported combined ending fund balances of $65,468,515, an increase of $2,100,146 in comparison to the beginning of the year. $57,725,612 of this total amount constitutes unreserved fund balance, of which $574,696 is designated for subsequent year expenditures and $57,150,916 is undesignated. The remaining $7,742,903 of fund balance is reserved for long -term interfund borrowings. The main reasons for this increase are as follows: • General Fund property taxes exceeded projections by $129,825. • General Fund severance taxes exceeded projections by $221,878. • General Fund interest earnings exceeded projections by $169,913. • Interest earnings in the Facilities Fund exceeded transfers out by $760,501. • Revenues in the Fire Protection Area 1 fund exceeded expenses by $140,764. • Revenues in the Womens Bay Fire Department fund exceeded expenses by $48,501. The general fund is the main operating fund of the Kodiak Island Borough. At the end of the current fiscal year, unreserved fund balance of the general fund was $2,026,113 with no reserved fund balance. As a measure of the general fund's liquidity, it may be useful to compare fund balance to total expenditures. Unreserved fund balance represents 16% of total general fund expenditures. The fund balance of the Kodiak Island Borough's general fund increased by $213,100 during the current fiscal year. The key factors leading to this increase were property taxes coming in over budget by $129,825 and severance taxes coming in $221,878 over budget. The facilities fund had a total fund balance of $38,534,833, $30,791,930 of which is unreserved. Fund balance increased $760,501 during the year because amounts transferred out were less than investment earnings. Proprietary Funds — The Kodiak Island Borough's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. Net assets of the municipal solid waste collection and disposal fund amounted to $3,865,097, the Hospital Facilities fund amounted to $17,868,496, the Kodiak Fisheries Research Center fund amounted to $10,938,290 and the 911 Services fund amounted to $41,064. The total increase in net assets for municipal solid waste collection and disposal was $704,302, and for the 911 services fund it was $8,420. The total decrease in net assets for the hospital facilities fund was $422,680, and for I 1 1 1 h r 1 1 General Fund Budgetary Highlights KODIAK ISLAND BOROUGH Management's Discussion and Analysis, Continued the Kodiak Fisheries Research Center it was $191,930. Other factors concerning the finances of these four funds have already been addressed in the discussion of the Kodiak Island Borough's business -type activities. ■ program revenue (in millions) ■ expenses (In millions) Differences between the original budget and final amended budget can be briefly summarized as follows: 1 9 Municipal Solid Hospital 911 Service Kodiak Fisheries Waste Facilities Research Center • The revenue budget for Tax Payer Relief (State Revenue Sharing) was decreased by $113,000. The State decreased the amount due on our retirement payments instead of giving us the funds. • The revenue budget for raw fish tax was increased by $102,300. • The expenditure budget of the General and Administration Department was increased by $25,000. This was to purchase a new vehicle. • The expenditure budget of the School District Support was increased by $100,000. This was to transfer additional funds to the School District. • The expenditure budget of the Education, Culture and Recreation budget was increased by $12,000 for an increased contribution to the Kodiak Community College. Differences between the final amended budget and actual can be summarized as follows: • Property taxes were $129,825 over budget. This happened because the actual assessed values were higher • than what was estimated in the budget. Severance Taxes $221,878 budget. This was due to fish catches exceeding budget were over projections, especially ground fish. • The State fish revitalization program revenue was $61,097 over budget. This was also due to fish catch exceeding budget projections. ' • Investment income was $169,913 over budget. This is due to interest rates exceeding projections. 1 9 Municipal Solid Hospital 911 Service Kodiak Fisheries Waste Facilities Research Center 1 KODIAK ISLAND BOROUGH I Management's Discussion and Analysis, Continued • The Borough Attorney's department was $78,562 under budget. The FY2006 legal fee budget was increased $25,000 to cover anticipated legal fee cost increases. These costs actually declined in FY2006. • The Finance Department was $62,659 under budget. This was due to employee costs coming in under budget. • The Assessing Department was $31,225 under budget. This was due to employee costs coming in under budget. • The Building Official was $31,599 over budget. The Building Official is paid for by both the Borough and the City of Kodiak. The charges are prorated by the location of the construction. In FY2006 more construction took place outside of the City than was anticipated. • General and administration was $85,087 under budget. This was due to bad debt expense and purchase of a new vehicle coming in under budget. • Emergency Preparedness was $32,702 under budget. The purchase of a new tsunami siren was budgeted in FY2006 but never purchased. • School District support was $29,270 under budget. This was due to data processing services coming in under budget. Capital Asset and Debt Administration Capital Assets — The Kodiak Island Borough's investment in capital assets for its governmental and business type activities as of June 30, 2006, amounted to $114,068,975 (net of accumulated depreciation). This investment in capital assets includes, land, buildings and improvements, improvements other than buildings, machinery and equipment, and construction work -in- progress. The total net decrease in the Kodiak Island Borough's investments in capital assets for the current fiscal year was $2,956,972 which was mostly due to current year depreciation. The following table displays the capital assets (net of depreciation) for the current year. Governmental Business -type activities activities Total 2006 2005 2006 2005 2006 2005 Arhvork $ — — 16,091 16,091 16,091 16,091 Land 23,187,184 23,187,184 1,661,499 1,661,499 24,848,683 24,848,683 Construction work -in- progress 4,680,384 3,883,844 491,754 191,389 5,172,138 4,075,233 Buildings and improvements 42,518,781 44,830,648 31,631,807 33,129,474 74,150,588 77,960,122 Improvements other than buildings 1,210,447 1,511,241 3,042,789 3,219,044 4,253,236 4,730,285 Equipment 629,654 336,161 1,760,160 1,629,760 2,389,814 1,965,921 Infrastructure 1,983,805 2,127,873 — — 1,983,805 2,127,873 Unclassified plant in service — — 1,254,619 1,301,739 1,254,619 1,301,739 $ 74,210,255 75,876,951 39,858,719 41,148,996 114,068,974 117,025,947 Additional information on the Kodiak Island Borough's capital assets can be found in note 5 on pages 33 -37 of this report. 1 10 1 1 t 1 1 1 1 1 1 1 FJ KODIAK ISLAND BOROUGH Management's Discussion and Analysis, Continued Long -term Debt — At the end of the current fiscal year, the Kodiak Island Borough had total bonded debt outstanding of $31,155,000. This entire amount is backed by the full faith and credit of the Borough. The remainder of the Kodiak Island Borough's debt represents capital leases, landfill closure and post- closure costs. The following table displays the long -term debt for the current year. General obligation bonds, including premium $ EPA loan ADEC loans Capital lease obligations — — — Landfill post closure care costs — — 3,258,937 Long term interfund borrowings — — 1,432,903 Notes payable — — 1,270,210 $ 31,238,690 33,168,752 5,962,050 Governmental Business -type activities activities 2006 2005 2006 2005 31,155,000 33,080,509 — 83,690 88,243 3,013,931 1,490,822 1,270,210 5,774,963 Total 2006 2005 31,155,000 33,080,509 83,690 88,243 3,258,937 3,013,931 1,432,903 1,490,822 1,270,210 1,270,210 37,200,740 38,943,715 The Kodiak Island Borough's total debt decreased $1,742,975 during the current fiscal year. This decrease was due to principal payments throughout the year. No major long -term debt activity occurred during the year. The last time the Borough received a rating on a bond issue (General Obligation Refunding Bonds, 1998 Series A) the Borough received an A- rating from Fitch Investors Service. Currently, general obligation bonds are insured to a AAA rating at the time of issuance. There is no general obligation debt limit imposed on the Kodiak Island Borough by the State Constitution, state statutes or the Borough's charter or code. Additional information on the Kodiak Island Borough's long -term debt can be found in note 7 on pages 40 -46 of this report. Economic Factors and Next Year's Budgets and Rates • At June 30, 2006, the unemployment rate for the Kodiak Island Borough was 6.7 %, which is 2.8% lower than last years rate of 9.5 %. The average unemployment rate for the last 10 years has been 9.9 %. • Deposits in local banks increased from 135,302,544 to $141,199,395, an increase of $5,896,851 or 4.3 %. Over the last 10 years it has increased $32,273,136 or 29.6 %. • Property tax revenues received are projected to increase in future years as the Kodiak Island Borough's assessed valuation continues to increase. • The PERS (Public Employees Retirement System) rate is increasing from 0% in FY2004 to 32.8% for FY2007. 1 KODIAK ISLAND BOROUGH I Management's Discussion and Analysis, Continued Requests for Information This financial report is designed to provide a general overview of the Kodiak Island Borough's finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Kodiak Island Borough, Director of Finance, 710 Mill Bay Kodiak, Alaska 99615. 1 Li 1 II LJ 12 1 1 1 t 1 1 1 1 1 t 1 1 1 KODIAK ISLAND BOROUGH Statement of Net Assets June 30, 2006 (With summarized financial information for June 30, 2005) See accompanying notes to financial statements. 13 Component Primary government unit Total reporting entity Governmental Business -type School Assets activities activities Total district 2006 2005 Equity in central treasury $ 752,367 472,854 1,225,221 - 1,225,221 1,720,496 Temporary investments 59,056,736 5,250,057 64,306,793 - 64,306,793 61,617,383 Other cash and cash equivalents - - - 62,203 62,203 57,229 Due from primary government - - - 3,493,790 3,493,790 3,758,892 Receivables: State of Alaska 957,693 402,951 1,360,644 - 1,360,644 1,552,874 Federal Government 6,355 - 6,355 - 6,355 196,517 Property taxes, net of allowance of $15,828 355,780 - 355,780 - 355,780 352,850 Severance taxes 295,309 - 295,309 - 295,309 273,391 Deferred charges 39,295 - 39,295 - 39,295 41,478 Inventories - 277,008 277,008 412,646 689,654 626,646 Land sales contracts receivable 230,034 - 230,034 - 230,034 42,272 Notes receivable 501,889 - 501,889 - 501,889 540,645 Accounts and other receivables, net 391,175 400,609 791,784 1,097,129 1,888,913 1,131,224 Capital assets: Non - depreciable 27,867,568 2,169,344 30,036,912 - 30,036,912 28,940,007 Depreciable, net 46,342,687 37,689,375 84,032,062 132,633 84,164,695 88,222,081 Total $ 136,796,888 46,662,198 183,459,086 5,198,401 188,657,487 189,073,985 Liabilities and Net Assets Liabilities: Accounts payable $ 467,332 224,495 691,827 233,973 925,800 1,068,051 Retainages payable 22,270 - 22,270 - 22,270 22,270 Accrued compensation and related liabilities 89,881 39,247 129,128 2,662,276 2,791,404 2,675,354 Other accrued liabilities 470,679 519,386 990,065 - 990,065 771,748 Customer deposits 678 - 678 - 678 1,203 Unearned revenues 18,853 421,110 439,963 7,032 446,995 904,186 Due to component units 3,493,790 - 3,493,790 - 3,493,790 3,758,892 Internal balances (8,083,328) 8,083,328 - - - - Noncurrent liabilities: Due within one year 2,277,616 - 2,277,616 386,586 2,664,202 2,255,273 Due in more than one year 29,242,372 4,529,147 33,771,519 348,650 34,120,169 36,056,778 Net Pension and OPEB - I ( le �f obligation 427,062 32 538 559,600 650,926 1,210,526 599,242 Total liabilities 28,427,205 13,949,251 42,376,456 4,289,443 46,665,899 48,112,997 Net assets: Invested in capital assets, net of of related debt 62,716,326 38,588,510 101,304,836 132,633 101,437,469 101,169,131 Unrestricted 45,653,357 (5,875,563) 39,777,794 776,325 40,554,119 39,791,857 Net assets 108,369,683 32,712,947 141,082,630 908,958 141,991,588 140,960,988 Total $ 136,796,888 46,662,198 183,459,086 5,198,401 188,657,487 189,073,985 See accompanying notes to financial statements. 13 KODIAK ISLAND BOROUGH Statement of Activities Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) See accompanying notes to financial statements. 14 M r M M r M M r r� r� M r M r r M r Program revenues Net(expense)revenue and changes in net assets Operating Primary government Component Charges for grants and Capital Governmental Business -type unit school Total reporting entity Functions/Programs Expenses services contributions grants activities activities Total district 2006 2005 Primary government: Governmental activities'. General government $ 3,984,390 311,802 101,390 - (3,571,198) - (3,571,198) - (3,571,198) (2,431,634) Emergency preparedness 8,598 - - - (8,598) - (8,598) - (8,598) (13,318) Community and economic development 784,002 - 56,196 - (727,806) - (727,806) - (727,806) (421,840) Health and sanitation department 403,866 - 74,150 - (329,716) - (329,716) - (329,716) (300,917) Education, culture and recreation 164,053 108,218 - - (55,835) - (55,835) - (55,835) (163,921) Service district maintenance 336,385 20,000 - - (316,385) - (316,385) - (316,385) (405,712) Primary and secondary education 10,831,588 95,025 - 298,852 (10,437,711) - (10,437,711) - (10,437,711) (10,102,338) Capital outlay: Schools - - - - - - - - - - General - - - - - - - - Interest on long -tern debt 1,700,089 1,008,811 - (691,278) - (691,278) - (691,278) (290,876) Total governmental activities 18,212,971 535,045 1,240,547 298,852 (16,138,527) - (16,138,527) - (16,138,527) (14,130,556) Business -type activities: Municipal solid waste collection and disposal 3,446,453 3,665,289 - - - 218,836 218,836 - 218,836 158,649 Hospital facilities 1,304,583 1,153,333 - - - (151,250) (151,250) - (151,250) (1,875,615) Kodiak fisheries research center 1,856,875 1,572,474 - - - (284,401) (284,401) - (284,401) (241,372) 911 services 57,194 65,614 8,420 8,420 - 8,420 21,008 Total business -type activities 6,665,105 6,456,710 - - - (208,395) (208,395) - (208,395) (1,937,330) Total primary government 24,878,076 6,991,755 1,240,547 298,852 (16,138,527) (208,395) (16,346,922) - (16,346,922) (16,067,886) Component units: School district 35,990,593 223,579 4,803,773 - (30,963,241) (30,963,241) (24,791,671) Totals - component units 35,990,593 223,579 4,803,773 - (30,963,241) (30,963,241) (24,791,671) General revenues: Property taxes 9,807,551 - 9,807,551 - 9,807,551 8,016,323 Grants and entitlements not restricted to specific programs 3,482,351 - 3,482,351 20,709,643 24,191,994 20,091,852 Land sale 363,389 - 363,389 - 363,389 - Severance taxes 1,186,908 - 1,186,908 - 1,186,908 799,693 Support from primary government - - - 8,632,440 8,632,440 7,995,040 Loss of disposal of capital assets (53,034) (17,700) (70,734) - (70,734) - Licenses and permits 285,241 - 285,241 - 285,241 On behalf PERS payment 113,667 - 113,667 - 113,667 - Other 70,065 409,595 479,660 390,093 869,753 423,606 Investment earnings 2,798,391 161,892 2,960,283 271 2,960,554 1,028,362 Transfers 247,280 (247,280) - - Totalgeneralrevenuesandtransfers 18,301,809 306,507 18,608,316 29,732,447 48,340,763 38,354,876 Change in net assets 2,163,282 98,112 2,261,394 (1,230,794) 1,030,600 (2,504,681) Net assets, beginning ofyear 106,206,401 32,614,835 138,821,236 2,139,752 140,960,988 146,531,549 Net assets, end ofyear $ 108,369,683 32,712,447 141,082,630 908,458 141,991,588 (44,026,868 See accompanying notes to financial statements. 14 M r M M r M M r r� r� M r M r r M r t 1 v 1 CI J I KODIAK ISLAND BOROUGH Balance Sheet Governmental Funds June 30, 2006 (With summarized financial information for June 30, 2005) See accompanying notes to financial statements. 1 e �I I_ J 3 6J 1 15 Facilities Education and School Bond Other Special Health Debt Capital Governmental Totals Assets General Revenue Fund Service Fund Projects Funds 2006 2005 Assets: Equity in central treasury $ - 17,215 20,248 3,144 71 1,760 752,367 1,360,588 Temporary investments 4,948,760 29,683,727 1,389,500 19,753,064 3,281,685 59,056,736 57,096,653 Receivables: State of Alaska 174,997 - 342,613 - 440,083 957,693 463,204 Federal Government - - 6,355 6,355 6,355 Property taxes, net of allowance of $15,828 327,271 - 28,509 355,780 352,850 Severance taxes 295,309 - - - - 295,309 273,391 Land sales contracts - - - - 1,538 1,538 8,000 Notes receivable - - - - 501,889 501,889 53,374 Accounts and other receivables, net 62,760 266,581 8,128 32,017 21,689 391,175 324,523 Due from other funds 300,000 1,334,832 - 1,035,710 756,500 3,427,042 2,681,559 Notes receivable, due after one year - - - - - - 487,271 Land sales contracts, due after one year - - - - 228,496 228,496 34,272 Advances to other funds - 7,742,903 - - - 7,742,903 8,090,822 Total $ 6,109,097 39,045,258 1,760,489 20,823,935 5,978,504 73,717,283 71,232,862 Liabilities and Fund Balances Liabilities: Accounts payable 217,327 13,116 236,889 467,332 486,228 Retainages payable - - - - 22,270 22,270 22,270 Accrued compensation liabilities 89,881 and related - 89,881 22,610 Customer deposits - - - - 678 678 1,203 Due to component unit 3,493,790 - - - - 3,493,790 3,758,892 Due to other funds 35,710, 400,000 1,842,000 - 808,907 3,086,617 2,566,059 Unearned revenues 246,276 v 110,425 - - 731,499 1,088,200 1,007,231 Total liabilities 4,082,984 510,425 1 13,116 1,800,243 8,248,768 7,864,493 Fund balances: Reserved: Long -term interfund borrowings - 7,742,903 - A 7,742,903 8,090,822 Unreserved: General fund: Designated for subsequent year expenditures 154,296 - - - - 154,296 606,323 Undesignated 1,871,817 - - - - 1,871,817 1,206,690 Special revenue funds: Designated for subsequent year expenditures - - - - 420,400 420,400 143,676 Undesignated - 30,791,930 - - 2,662,935 33,454,865 32,098,426 Debt service funds: Undesignated (81,511) - 158,409 76,898 (189,824) Capital projects funds: Undesignated - - - 20,810,819 936,517 21,747,336 21,412,256 Total fund balances 2,026,113 38,534,833 (81,511) 20,810,819 4,178,261 65,468,515 63,368,369 Total S 6,109,097 39,045,258 1,760,489 20,823,935 5,978,504 73,717,283 71,232,862 See accompanying notes to financial statements. 1 e �I I_ J 3 6J 1 15 1 KODIAK ISLAND BOROUGH Reconciliation of Net Assets Between the Government -wide and Fund Financial Statements Year ended June 30, 2006 Amount reported as fund balance on the governmental funds balance sheet Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Long -term receivables, delinquent property taxes and loans are not available to pay for current- period expenditures and, therefore, are deferred in the funds: Property taxes Interest receivable Fern Fuller Trust - note receivable Notes receivable - land sales Long -term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds: General obligation bonds payable Bond premium Debt issuance costs ADEC loans Net pension and OPEB obligation Accrued interest expense Compensated absences Net assets of governmental activities See accompanying notes to the financial statements. 1 $ 65,468,515 1 74,210,255 $ 228,536 , 110,425 501,889 228,497 1,069,347 (31,155,000) , (109,429) 39,295 (83,690) (427,062) (470,679) (171,869) (32,378,434) $ 108,369,683 1 1 {I 16 1 1 I KODIAK ISLAND BOROUGH L 1 r] 1 17 Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficit) Governmental Funds Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Facilities Education and School Bond Other Special Health Debt Capital Governmental Totals General Revenue Fund Service Fund Projects Funds 2006 2005 Revenues: Property taxes $ 9,070,115 - 763,731 9,833,846 9,063,729 Intergovernmental: State sources 1,187,169 - 2,146,406 - 34,916 3,368,491 2,169,803 Federal sources 1,182,016 - - 584,910 1,766,926 3,853,348 Land sale proceeds - - - - 177,164 177,164 22,738 Severance taxes 1,186,908 - 1,186,908 1,005,539 Licenses, permits, fees, and = _ _ other local revenues 171,962 648,324 820,286 692,540 Other - 125,040 125,040 75,841 Investment income 469,913 1,477,536 39,517 689,177 127,323 2,803,466 1,772,893 Total revenues 13,268,083 1,477,536 2,185,923 689,177 2,461,408 20,082,127 18,656,431 Expenditures: Current: General government 2,730,335 - 1,315 - 1,219,277 3,950,927 3,859,805 Comm my preparedness Community and 6,098 6,098 23,521 economic development 735,883 - - - 48,119 784,002 509,680 Health and sanitation department 286,294 77,226 363,520 329,738 Education, culture and recreation 161,633 161,633 185,993 ' Service district maintenance - 336,385 336,385 347,934 Primary and secondary education 8,430,840 - - - 8,430,840 7,973,035 Capital outlay: Schools - - - 439,192 24,950 464,142 68,109 General - 332,398 332,398 2,972,174 Debt service: Principal = _ 1 ,814,553 = 1,814,553 1,784,859 Interest 1,583,488 1,275 1,584,763 984,766 Bond issuance costs - - - - - - 43,661 Total expenditures 12,351,083 - 3,399,356 439,192 2,039,630 18,229,261 19,083,275 ' Excess of revenue over (under) expenditures 917,000 1,477,536 (1,213,433) 249,985 421,778 1,852,866 (426,844) Other financing (uses) sources: Issuance _ - 20,,000 premium Bond premium 121,590 121 Transfers in - - 1,480,155 271,027 1,751,182 1,800,212 Transfers out (703,900) (717,035) - - (82,967) (1,503,902) (1,629,610) Net other financing (uses) sources Net change in fund balances (703,900) (717,035) 1,480,155 - 188,060 247,280 20,642,192 266,722 249,985 609,838 2,100,146 20,215,348 213,100 760,501 Fund balances (deficit), at beginning ofyear 1,813,013 37,774,332 (348,233) 20,560,834 3,568,423 63,368,369 43,153,021 Fund balances (deficit), at end of the year $ 2,026,113 38,534,833 (81,511) 20,810,819 4,178,261 65,468,515 63,368,369 See accompanying notes to financial statements. L 1 r] 1 17 1 - J I See accompanying notes to the financial statements. 18 , KODIAK ISLAND BOROUGH Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year ended June 30, 2006 Net change in fund balances - total governmental funds $ 2,100,146 Amounts reported for governmental activities in the statement of activities are different because: ' Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense: Capital outlay $ 1,221,247 Depreciation expense (2,834,909) (1,613,662) Revenues in the statement of activities that do not provide current current financial resources and are deferred in the funds: Deferred property tax 228,536 Interest income tax 110,425 Land sale proceeds 228,497 Note receivable 501,889 1,069,347 Revenues that were earned in a prior year and provide current financial resource: Accrued interest income (115,500) ' Land sale contracts (42,272) Note receivable - Fern Fuller Trust (556,864) Other revenue (254,831) (969,467) The issuance of long -term debt provides current financial , resources to governmental funds, while the repayment of the principal of long -term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds do not report the accrual of interest expense on debt when it is not payable from currently available resources: Accrued interest expense (119,223) Principal repayments 1,814,553 Amortized debt issuance costs (2,183) Bond premium amortization 6,080 1,699,227 Some expenses reported in the statement of activities do not , require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Net pension and OPEB expense (70,166) Compensated absences, net change 891 (69,275) Loss on disposal of equipment (53,034) Change in net assets of governmental activities $ 2,163,282 - J I See accompanying notes to the financial statements. 18 , 1 1 J t 1 1 CI r KODIAK ISLAND BOROUGH Balance Sheet Proprietary Funds - Business -type Activities - Enterprise Funds June 30, 2006 (With summarized financial information for June 30, 2005) See accompanying notes to financial statements. 19 Municipal Kodiak Other Solid Waste Fisheries Nonmajor Collection and Hospital Research Enterprise Totals Assets Disposal Facilities Center Fund_ 2006 2005 Current assets: o Equity in central treasury $ 127,247 302,714 6,744 36,149 472,854 359,908 Temporary investments 2,285,095 - 2,964,962 - 5,250,057 4,520,730 Accrued interest receivable 10,075 - 22,896 4,915 37,886 27,013 Customer receivables 362,723 - - - 362,723 314,711 Due from other funds - 40,000 - 40,000 11,974 Accounts receivable - State of Alaska 402,951 - - - 402,951 100,000 Total current assets 3,188,091 342,714 2,994,602 41,064 6,566,471 5,334,336 Inventories - 277,008 - - 277,008 277,007 Capital assets: Nondepreciable 2,038,967 130,377 - - 2,169,344 1,868,979 Depreciable, net 3,875,720 19,049,033 14,764,622 - 37,689,375 39,280,016 Total capital assets 5,914,687 19,179,410 14,764,622 - 39,858,719 41,148,995 Total noncurrent assets 5,914,687 19,456,418 14,764,622 - 40,135,727 41,426,002 Total $ 9,102,778 19,799, 132 17,759,224 41,064 46,702,198 46,760,338 Liabilities and Fund Equities Current liabilities: Accounts payable $ 193,531 1,623 29,341 - 224,495 336,068 Deferred revenue - 421,110 - - 421,110 854,444 Accrued compensation and related liabilities 27,053 - 12,194 - 39,247 32,262 Other accrued liabilities 112,424 - 134,521 - 246,945 420,292 Current portion of capital lease obligations 272,441 - - 272,441 - Current portion of advances from other funds - 60,259 315,000 - 375,259 347,919 Due to other funds - 75,000 305,425 - 380,425 127,474 Total current liabilities 605,449 557,992 796,481 - 1,959,922 2,118,459 Noncurrent liabilities: ° � �, � 1 I 1 1 7 Notes payable 1,270,210 '° - - - 1,270,210 1,270,210 Advances from other funds - 1,372,644 5,995,000 - 7,367,644 7,742,903 Net pension and OPEB obligation 103,085 - 29,453 - 132,538 - Accrual for landfill closure and postclosure costs 3,258,937 - - - 3,258,937 3,013,931 Total noncurrent liabilities 4,632,232 1,372,644 6,024,453 - 12,029,329 12,027,044 Total liabilities 5,237,681 1,930,636 6,820,934 - 13,989,251 14,145,503 Fund equities: Invested in capital assets, net of related debt 4,644,477 19,179,411 14,764,622 - 38,588,510 39,878,785 Unrestricted (779,380) (1,310,915) (3,826,332) 41,064 (5,875,563) (7,263,950) Total fund equities 3,865,097 17,868,496 10,938,290 41,064 32,712,947 32,614,835 Total $ 9,102,778 19,799,132 17,759,224 41,064 46,702,198 46,760,338 See accompanying notes to financial statements. 19 Operating revenues: Solid waste collection Solid waste disposal Rents and royalties Charges for serviceslcustomer charges Lease income Other Total operating revenues Operating expenses: Personnel services Solid waste collection Refuse disposal Contracted services Maintenance and repairs Landfill closure and postclosure costs Depreciation General and administration Miscellaneous Telephone services Recycling services Contributions Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Loss on disposal of capital assets Contribution to Providence Hospital Investment income Interest expense Income (loss) before transfers Transfers in Transfers out Net other financing sources (uses) Net change in fund equity Fund equity, at beginning of year Fund equity, at end ol'year KODIAK ISLAND BOROUGH Statement of Revenues, Expenses, and Changes in Fund Equity Proprietary Funds - Business -type Activities - Enterprise Funds Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Municipal Kodiak Other Solid Waste Fisheries Nonmajor Collection and Hospital Research Enterprise Totals * Disposal Facilities Center Fund 2006 2005 $ 2,720,454 - - - 2,720,454 2,184,612 944,835 - - - 944,835 956,087 - - 1,572,474 - 1,572,474 1,566,686 - - - 65,614 65,614 26,721 - 1,153,333 - - 1,153,333 1,153,333 409,595 - - - 409,595 1,157 4,074,884 1,153,333 1,572,474 65,614 6,866,305 5,888,596 711,039 5,000 235,147 3,000 954,186 832,671 1,352,618 - - - 1,352,618 1,418,830 306,150 - - - 306,150 355,995 261,073 - - - 261,073 207,282 44,700 2,667 - - 47,367 54,865 245,006 - - - 245,006 255,498 245,510 1,077,047 745,037 - 2,067,594 2,239,956 185,099 10,810 365,924 - 561,833 489,133 - - 63,992 194 64,186 67,328 - - - 54,000 54,000 66,178 90,000 - - - 90,000 73,001 5,258 - - - 5,258 9,853 3,446,453 1,095,524 1,410,100 57,194 6,009,271 6,070,590 628,431 57,809 162,374 8,420 857,034 (181,994) - (17,700) - - (17,700) - - (150,000) - - (150,000) - 69,421 - 92,471 - 161,892 70,812 - (59,059) (446,775) - (505,834) (584,711) 697,852 (168,950) (191,930) 8,420 345,392 (695,893) 6,450 66,500 - - 72,950 125,000 - (320,230) - - (320,230) (295,602) 6,450 (253,730) - - (247,280) (170,602) 704,302 (422,680) (191,930) 8,420 98,112 (866,495) 3,160,795 18,291,176 11,130,220 32,644 32,614,835 33,481,330 $ 3,865,097 17,868,496 10,938,290 41,06 32,712,947 32,614,835 See accompanying notes to financial statements. 20 Ll 11 Il 1 1 1 1 u 1 1 1 1 KODIAK ISLAND BOROUGH Statement of Cash Flows Proprietary Funds - Business -type Activities - Enterprise Funds Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 1 21 / Municipal Kodiak Other Solid Waste Fisheries Nonmajor Collection and Hospital Research Enterprise Totals Disposal Facilities Center Fund 2006 2005 Cash flows from operating activities: Cash received from customers $ 3,744,381 720,000 1,572,474 65,614 6,102,469 5,488,604 Payments to suppliers (2,328,526) (13,825) (429,490) (54,194) (2,826,035) (2,647,476) Payments to employees (605,617) (5,000) (150,435) (3,000) (764,052) (826,754) Internal activity - payments to /from other funds - 46,974 177,951 - 224,925 30,100 Net cash provided (used) by operating activities 810,238 748,149 1,170,500 8,420 2,737,307 2,044,474 Cash flows from noncapital financing activities: Contribution to Providence Hospital - (150,000) - - (150,000) - Transfers in 6,450 66,500 72,950 125,000 Transfers out - (320,230) - - (320,230) (295,602) Net cash provided (used) by noncapital financing activities 6,450 (403,730) - - (397,280) (170,602) Cash flows from capital and related financing activities: Acquisition and construction of capital assets (730,022) (47,298) - - (777,320) (126,333) Loss on disposal of assets - (17,700) - - (17,700) - Interest paid on notes payable, capital leases, and interfund borrowings - (59,059) (446,775) - (505,834) (536,597) Principal payments on long -term interfund borrowing - (57,919) (290,000) - (347,919) (330,670) Proceeds from issuance of notes payable - - 8,087 Principal payments on capital lease obligation - - - - - (185,970) Net cash provided (used) by capital and related financing activities (730,022) (181,976) (736,775) - (1,648,773) (1,171,483) Cash flows from investing activities: Interest and dividends on investments 69,421 - 92,471 - 161,892 69,493 Net (increase) decrease in investments (215,833) - (519,452) (4,915) (740,200) (784,982) Net cash provided (used) by investing activities (146,412) - (426,981) (4,915) (578,308) (715,489) Net change in cash and cash equivalents (59,746) 162,443 6,744 3,505 112,946 (13,100) Cash and equivalents, at beginning of year 186,993 140,271 - 32,644 359,908 373,008 Cash and equivalents, at the end of year $ 127,247 302,714 6,744 36,149 472,854 359,908 (continued) 1 21 / KODIAK ISLAND BOROUGH Statement of Cash Flows Proprietary Funds - Business -type Activities - Enterprise Funds, Continued See accompanying notes to financial statements. 22 Municipal Kodiak Other Solid Waste Fisheries Nonmajor Collection and Hospital Research Enterprise Totals Disposal Facilities Center Fund 2006 2005 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) S 628,431 57,809 162,374 8,420 857,034 (181,994) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 245,510 1,077,047 745,037 - 2,067,594 2,239,956 Changes in assets and liabilities that provided (used) cash: Customer receivables (330,503) - (330,503) 25,930 Due to /from other funds - 46,974 177,951 - 224,925 114,218 Accounts payable (128,839) (347) (2,846) - (132,032) 27,775 Unearned revenues - (433,334) - - (433,334) (433,332) Accrual for landfill closure and postclosure costs 245,006 - - - 245,006 255,498 Accrued compensation and related liabilities 105,422 - 34,101 - 139,523 5,917 Other accrued liabilities 45,211 53,883 - 99,094 74,624 Net cash provided (used) by operating activities S 810,238 748,149 1,170,500 8,420 2,737,307 2,128,592 Noncash capital and related financing activities: Interest S 13,217 - 4,915 18,132 48,114 See accompanying notes to financial statements. 22 1 1 r 1 L� 1 CI 1 I C � 1 1 KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 (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 accounting principles generally accepted in the United States of America, 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 both the government -wide and fund 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. Discretely Presented Component Unit The Borough has delegated the operating responsibility for public education to the Kodiak Island Borough School District (School District). In accordance with statutes, the Borough retains ownership of the education related capital 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 (b) Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the activities of the primary government and its component unit. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes.and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from the legally separate component unit for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. 23 (Continued) 0 KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds, if applicable, are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period except for grant revenues which are recognized when the related expenditure is incurred irrespective of when the cash is received. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. The government reports the following major governmental funds: The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Facilities Special Revenue 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 Education and Health Debt Service Fund was established payment of interest and principal on all general obligation debts, payable exclusively from special assessments and revenue debt government enterprise fund. t 1 L I � to finance and account for the serial and term, other than that issued for and serviced by a The School Bond Capital Projects Fund accounts for the construction and major maintenance activities for the Borough's educational facilities funded by school bonds. F' I LJ 24 (Continued) ' KODIAK ISLAND BOROUGH 1 Notes to Financial Statements June 30, 2006 reports the following major proprietary The government ep g ) p p ry 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 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. Private- sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private- sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private- sector guidance. As a general rule the effect of interfund and activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between various functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided, (2) operating grants and contributions, and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services and lease revenues. ' Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. (d) Assets, Liabilities, and Fund Equity/Net Assets Cash and Investments Cash balances of most Borough funds are pooled in a central treasury. Each fund's portion of this pool is displayed on the balance sheet as "Equity in central treasury." In addition, investments are 25 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 the termination of the lease in at least equal value. I 26 (Continued) I separately held by several of the Borough's funds. Investments are carried at fair value, as determined by quoted market prices. ' 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. 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. ' All highly liquid investments, excluding restricted assets, with original maturities of ninety days or less are considered to be cash equivalents. For purposes of the Statements of Cash Flows, equity in central treasury held by enterprise funds are treated as cash equivalents. ' Investments for the government, as well as the component unit, are reported at fair value, as determined by quoted market prices. The reported value of the pool is the same as the fair value of the pool shares. ' Receivables and Payables Activity between funds that are representative of lending /borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to /from other funds" (i.e., the current portion of interfund loans) or "advances to /from other funds" (i.e., the noncurrent portion of interfund loans). All other outstanding balances between funds are reported as "due to /from other funds." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Internal balances used to acquire capital assets are eliminated from the invested in capital assets, net of related debt, portion , of net assets. Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. Inventories Prepaid Items , and Expendable operating supplies of the Borough are accounted for using the purchase method. There are no significant amounts of such inventories on hand at year end. All of the Hospital Facilities Enterprise Fund inventory is assigned to Providence as of April 21, 1997 which, by the terms of the lease agreement for the hospital facilities (see note 19), are required to be returned to the Borough at the termination of the lease in at least equal value. I 26 (Continued) I 1 KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. Capital Assets Compensated Absences It is the Borough's policy to permit employees to accumulate earned but unused annual leave benefits. All annual leave pay is accrued when incurred in the government -wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. ' Long -Term Obligations In the government -wide financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund balance sheet. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing 1 27 (Continued) Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, street lights, and similar items including those acquired prior to fiscal years ended after June 30, 1980), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the Borough as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. ' Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as part ' of the capitalized value of the assets constructed. There was no interest capitalized during the year. Property, plant, and equipment of the primary government is depreciated using the straight line method over the following estimated useful lives: ' Buildings and improvements 10 -40 years Improvements other than buildings 10 -15 years Equipment 5 -10 years Infrastructure 40 years Compensated Absences It is the Borough's policy to permit employees to accumulate earned but unused annual leave benefits. All annual leave pay is accrued when incurred in the government -wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. ' Long -Term Obligations In the government -wide financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund balance sheet. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing 1 27 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 1, sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Interest on long -term obligations is recorded as an expenditure when due. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts ' that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. Net Assets In the government -wide financial statements, net assets are reported in three categories; net assets invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets. Net assets are reported as restricted when constraints placed on net asset use are either externally ' imposed by creditors (such as through debt covenants), grantors, contributors provisions or laws or regulations of other governments or imposed by law through constitutional provisions or enabling , legislation. (e) Revenues, Expenditures, and Expenses 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 I then mailed on or before July 1st. Taxes are due when billed and generally become delinquent on or after October 16th. 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) 28 (Continued) I ' KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 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 1 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. Operating and Nonoperating Revenue ' Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating ' revenues of the Municipal Solid Waste Collection and Disposal Fund and 911 Services Fund are charges to customers for services. The principal operating revenues of the Hospital Facilities Fund and the Kodiak Fisheries Research Center Fund are rents from customers. Operating expenses for proprietary funds include costs of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. 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 accrual basis. Other local revenues are recorded on a basis consistent with their nature in relation to measurement i and availability standards. (� 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. 1 29 (Continued) KODIAK ISLAND BOROUGH , Notes to Financial Statements ' June 30, 2006 (g) 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, and accrued landfill closure and post - closure care costs. (2) Stewardship, Compliance, and Accountability 1 (a) Excess of Expenditures /Expenses over Appropriations/Budgets General Fund , The following department expenditures exceeded their appropriations: Department Excess Borough manager $ 14,968 Building official 31,599 General and administration 85,087 ' Health and sanitation 1,974 $ 133,628 Special Revenue Funds The following fund expenses exceeded their budget: Fund Women's Bay Road Service Area L.E.P.C. Woodland Acres Street Light Service Area Kodiak Arts Council Fern Fuller Trust Excess $ 13,907 9,214 660 4,643 127 $ 28,551 I i J 30 (Continued) I 1 1 �I J 1 1 fl 1 C KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 (b) Deficit Fund Equity The individual fund deficits at June 30, 2006, are as follows: Special Revenue Funds: Bay View Road Service Area $ 667 L.E.P.C. 14,995 Trinity Acres Street Light Service Area 1,567 Kodiak Arts Council 3,518 Trinity Acres Paving 174,556 $ 195, The deficit in the Trinity Acres Paving Fund is anticipated to be funded by a special assessment that began in 2006. (3) Cash and Investments As of June 30, 2006, the Borough had the following investments: Interest Rate Risk The Borough does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk 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. At June 30, 2006, the Borough's U.S. agencies bonds were rated AAA by Standard & Poor and Fitch Ratings, and Aaa by Moody's Investor Service. At June 30, 2006, the Borough's investment in the Alaska Municipal League Investment Pool was unrated. 31 (Continued) Investment maturities (in years) Fair Less Investment type value than 1 1 to 5 5 to 10 U.S. agency securities: Federal Home Loan Bank $ 21,745,761 19,771,381 1,974,380 — Federal Home Loan Mortgage Corporation 12,929,510 12,929,510 — — Federal National Mortgage Association 14,847,200 14,847,200 — — Federal Mortgage Corporation 3,904,800 3,904,800 — — Alaska Municipal League Investment Pool 10,879,522 10,879,522 — — $ 64,306,793 62,332,413 1,974,380 — Interest Rate Risk The Borough does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk 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. At June 30, 2006, the Borough's U.S. agencies bonds were rated AAA by Standard & Poor and Fitch Ratings, and Aaa by Moody's Investor Service. At June 30, 2006, the Borough's investment in the Alaska Municipal League Investment Pool was unrated. 31 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements , June 30, 2006 Concentration of Credit Risk The Borough places no limit on the amount the Borough may invest in any one issuer. At June 30, 2006, , the Borough had 72 percent of its investments in U.S. Government agency securities. Custodial Credit Risk — Deposits In the case of deposits, this is the risk that in the event of a bank failure, the Borough's deposits may not be returned to it. The Borough requires all deposits to be insured or collateralized. At June 30, 2006, the carrying amount of the Borough deposits was $1,225,221 and the corresponding bank balance was $475,070. 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 $375,070. Collateral, in the amount of $509,445, is held by Bank of New York, the pledging , financial institution's agent, in the Borough's name. Custodial Credit Risk — Investments I For an investment, this is a risk that, in the event of the failure of the counterparty, the Borough will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Borough had no debt securities exposed to custodial credit risk at June 30, 2006. (4) Annual Appropriation to the School District An annual appropriation is made to the School District. 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. , (5) Capital Assets As noted in Footnote (9), the Borough leases the Kodiak Island Hospital and Care Center to Sister of , Providence. The value of the leased assets as well as depreciation are reflected below in the Hospital Facilities Fund on page 35. 1 32 (Continued) I KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Capital asset activity for the year ended June 30, 2006 was as follows: Beginning Balance Increase Governmental activities: Capital assets, not being depreciated: Land Construction work -in- progress Total Capital assets, being depreciated: Buildings and improvements Improvements other than buildings Equipment Infrastructure Total Less accumulated depreciation for: Buildings and improvements Improvements other than buildings Equipment Infrastructure Total Total capital assets being depreciated Total governmental activities, net Ending Decrease Balance $ 23,187,184 — — 23,187,184 3,883,844 796,540 — 4,680,384 27,071,028 796,540 — 27,867,568 90,579,601 — — 90,579,601 3,964,683 — — 3,964,683 2,002,568 424,707 (498,037) 1,929,238 5,762,722 — — 5,762,722 102,309,574 424,707 (498,037) 102,236,244 45,748,953 2,311,867 — 48,060,820 2,453,442 300,794 — 2,754,236 1,666,407 78,180 (445,003) 1,299,584 3,634,849 144,068 — 3,778,917 53,503,651 2,834,909 (445,003) 55,893,557 48,805,923 (2,410,202) (53,034) 46,342,687 $ 75,876,951 (1,613,662) (53,034) 74,210,255 33 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 ' Business -type activities: Municipal Solid Waste Collection and Disposal Fund capital assets, not being depreciated: Land Construction work -in- process Total Capital assets, being depreciated: Unclassified utility plant in service Improvements other than buildings Machinery and equipment Total Less accumulated depreciation for: Unclassified utility plant in service Improvements other than buildings Machinery and equipment Total Total capital assets being depreciated, net Total Municipal Solid Waste Collection and Disposal Fund, net Beginning Balance $ 1,651,248 — — 1,651,248 89,761 297,958 — 387,719 1,741,009 297,958 — 2,038,967 2,178,733 — — 2,178,733 2,288,438 — — 2,288,438 1,313,344 432,064 — 1,745,408 5,780,515 432,064 — 6,212,579 811,018 47,120 — 858,138 282,862 128,013 — 410,875 997,469 70,377 — 1,067,846 2,091,349 245,510 — 2,336,859 3,689,166 186,554 — 3,875,720 $ 5,430,175 484,512 — 5,914,687 Increase Decrease Ending Balance 34 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Hospital Facilities Fund capital assets, not being depreciated: Artwork Land Construction work -in- process Total Capital assets, being depreciated: Buildings Improvements other than buildings Machinery and equipment Total Less accumulated depreciation for: Buildings Improvements other than buildings Machinery and equipment Total Total capital assets being depreciated, net Total Hospital Facilities Fund, net Kodiak Fisheries Research Center Fund Kodiak Fisheries Research Center Fund Capital assets, being depreciated: Buildings Improvements other than buildings Machinery and equipment Total Less accumulated depreciation for: Buildings Improvements other than buildings Machinery and equipment Total Total Kodiak Fisheries Beginning — — 17,840,410 Ending Balance Increase Decrease Balance 1,157,540 20,019,948 $ 16,091 — — 16,091 10,251 — — 10,251 101,628 2,407 — 104,035 127,970 2,407 — 130,377 — 14,764,622 27,131,043 — — 27,131,043 401,046 — — 401,046 4,831,961 62,588 (17,700) 4,876,849 32,364,050 62,588 (17,700) 32,408,938 8,275,660 902,986 — 9,178,646 71,151 14,177 — 85,328 3,936,048 159,884 — 4,095,932 12,282,859 1,077,047 — 13,359,906 20,081,191 (1,014,459) (17,700) 19,049,032 $ 20,209,161 (1,012,052) (17,700) 19,179,409 $ 17,840,410 — — 17,840,410 1,021,998 — — 1,021,998 1,157,540 1,157,540 20,019,948 — — 20,019,948 3,566,321 594,680 — 4,161,001 204,401 34,065 — 238,466 739,567 116,292 — 855,859 4,510,289 745,037 — 5,255,326 $ 15,509,659 (745,037) — 14,764,622 35 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Total business -type activities: Capital assets, not being depreciated: Artwork Land Construction work -in- process Total Capital assets, being depreciated: Unclassified utility plant in service Buildings Improvements other than buildings Machinery and equipment Total Less accumulated depreciation for: Unclassified utility plant in service Buildings Improvements other than buildings Machinery and equipment Total Total capital assets being depreciated, net Total business -type activities, net Beginning Ending Balance Increase Decrease Balance $ 16,091 — — 16,091 1,661,499 — — 1,661,499 191,389 300,365 — 491,754 1,868,979 300,365 — 2,169,344 2,178,733 — — 2,178,733 44,971,454 — — 44,971,454 3,711,482 — — 3,711,482 7,302,845 494,653 (17,700) 7,779,798 58,164,514 494,653 (17,700) 58,641,467 876,994 47,120 — 924,114 11,841,981 1,497,666 — 13,339,647 492,438 176,255 — 668,693 5,673,085 346,553 — 6,019,638 18,884,498 2,067,594 — 20,952,092 39,280,016 (1,572,941) (17,700) 37,689,375 $ 41,148,995 (1,272,576) (17,700) 39,858,719 36 (Continued) 1 1 1 1 C 1 KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Depreciation expense was charged to the departments and functions of the primary government as follows: Governmental activities: General government $ 320,521 Fire services 73,214 Emergency preparedness 2,500 Health and sanitation department 37,926 Primary and secondary education 2,400,748 Total – governmental activities 2,834,909 Business -type activities: Municipal Solid Waste Collection and Disposal 245,510 Hospital Facilities 1,077,047 Kodiak Fisheries Research Center 745,037 Total – business -type activities 2,067,594 Total $ 4,902,503 (6) Interfund Receivables, Payables and Transfers (a) Interfund Receivables and Payables Interfund receivables and payables at June 30, 2006 consisted of the balances of short -term interfund loans all of which are expected to be paid within one year. A summary of interfund receivables and payables at June 30, 2006, is as follows: Receivable Payable Major Governmental Funds: General Fund $ 300,000 35,710 Facilities Speical Revenue Fund 1,334,832 400,000 Education and Health Fund Debt Service Funds — 1,842,000 School Bond Capital Projects Fund 1,035,710 — Other governmental funds 756,500 808,907 Major Enterprise Funds: Hospital Enterprise Fund 40,000 75,000 Kodiak Fisheries Research Center Fund — 305,425 $ 3,467,042 3,467,042 1 37 (Continued) 1 (b) KODIAK ISLAND BOROUGH Notes to Financial Statements' June 30, 2006 The outstanding balances between funds result from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. 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 advance bears interest at 7 %, and the scheduled payments for the next five fiscal years ended and thereafter are as follows: Principal Interest Year ending June 30: 2007 2008 2009 2010 2011 2012 -2016 2017 -2019 315,000 335,000 360,000 385,000 410,000 2,525,000 1,980,000 430,675 407,925 383,600 357,525 329,700 1,158,675 214,200 Total 745,675 742,925 743,600 742,525 739,700 3,683,675 2,194,200 $ 6,310,000 3,282,300 9,592,300 In July 2003, the Facilities Special Revenues Fund loaned $1,600,000 to the Hospital Fund in order to help fund current operations. The loan from the Facilities Special Revenue Fund is accounted for as a long -term interfund advance, while the liability in the Hospital Facilities Enterprise Fund is accounted for as a long -term interfund borrowing. The advance bears interest at 7 %, and the scheduled payments for the next five fiscal years and thereafter are as follows: Year ending June 30: 2007 2008 2009 2010 2011 2012 -2016 2017 -2021 2022 -2023 Principal Interest Total 60,259 62,693 65,226 67,861 70,603 398,176 485,374 222,711 56,719 54,285 51,752 49,117 46,375 186,714 99,516 11,245 116,978 116,978 116,978 116,978 116,978 584,890 584,890 23 3,956 1 1 1 1 1 L] $ 1,432,903 555,723 1,988,626 38 (Continued) 1 ' KODIAK ISLAND BOROUGH ' Notes to Financial Statements June 30, 2006 (c) Transfers ' Interfund transfers 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 during the year ended June 30, 2006, were as follows: Transfers In 7 r Enterprise Funds Transfers Out Major Governmental Funds: ' General Fund and Health Facility Special Revenue Fund Solid Waste Other Governmental Funds Major Enterprise Fund: Governmental Hospital Facility Fund Facilities Total transfers Fund Funds U 1 Governmental Funds Enterprise Funds Education Municipal and Health Other Solid Waste Hospital Debt Service Governmental Collection and Facilities Fund Funds Disposal Fund Fund Totals $ 697,450 — 6,450 — 703,900 462,475 254,560 — — 717,035 — 16,467 — 66,500 82,967 320,230 — — — 320,230 $ 1,480,155 271,027 6,450 66,500 1,824,132 A summary of significant transfers are as follows: • The General Fund transferred $697,450 to the Education and Health Debt Service Fund to pay for debt service on general government debt. • The Facilities Special Revenue Fund transferred $140,560 to the Building and Grounds Special Revenue Fund to pay for building insurance. • The Facilities Special Revenue Fund transferred $462,475 to the Education and Health Debt Service Fund for debt service on hospital bonds. • The Facilities Special Revenue Fund transferred $114,000 to the State Capital Grants fund for computer upgrades. • The Hospital Facilities Enterprise Fund transferred $320,230 to the Education and Health Debt Service Fund to pay for debt service on hospital related debt. 1 39 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 (7) Long Term Debt (a) General Obligation Bonds and other debt The Borough issues general obligation bonds and other debt to provide funds for the acquisition and construction of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the Borough. General obligation bonds and other debt currently outstanding are as follows: 40 (Continued) Interest Principal payments Type of debt Rates Dates Issue date Maturity dates Dates Amount General obligation bonds — 1998 Series 3.25 -4.30% 8/15 -2/15 12/22/1998 2/15/2014 2/15/2007 60,000 2/15/2008 1,150,000 2/15/2009 1,200,000 2/15/2010 1,250,000 2/15/2011 1,305,000 2/15/2012 1,360,000 2/15/2013 1,420,000 2/15/2014 1,480,000 9,225,000 General obligation bonds — 2000 E Series 4.75 -5.0% 8/1 -2/1 12/12/2000 2/1/2011 2/1/2007 150,000 2/l/2008 160,000 2/l/2009 165,000 2/1/2010 175,000 2/1/2011 180,000 830,000 General obligation bonds — 2000 F Series 6.9 -9.0% 8/1 -2/1 12/12/2000 2/1/2011 2/l/2007 120,000 2/l/2008 130,000 2/l/2009 140,000 2/1/2010 150,000 2/1/2011 160,000 700,000 General Obligation bonds — 2003 A Series 2.00 - 2.625% 8/15-2/15 4/9/2003 8/15/2007 2/15/2007 1,030,000 1,030,000 General obligation 40 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Authorized Prior years Balance at Mred/ Balance at Fiscal year Annrmt Issued Refired Jrne 30, 2005 )fs Mijn ed Jane 30, 2006 1999 9,740,000 9,740,000 455,000 9,285,000 60,000 9,225,000 2001 1,485,000 1,485,000 510,000 975,000 2001 1,175,000 1,175,000 365,000 810,000 2003 3,075,000 3,075,000 1,040,000 2,035,000 145,000 830,000 110,000 700,000 1,005,000 1,030,000 41 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Interest Principal payments Type of debt Rates Dates Issue date Maturity dates Dates Amount General obligation bonds -2004 A Series 4.0 -5.0% 1/1 -7/1 7/21/2004 7/1/2024 7/l/2007 325,000 7/1/2008 340,000 7/1/2009 350,000 7/1/2010 365,000 7/1/2011 385,000 7/1/2012 400,000 7/1/2013 415,000 7/1/2014 435,000 7/1/2015 450,000 7/1/2016 470,000 7/1/2017 485,000 7/1/2018 510,000 7/1/2019 530,000 7/1/2020 555,000 7/l/2021 580,000 7/1/2022 605,000 7/1/2023 635,000 7/1/2024 665,000 8,500,000 General obligation bonds - 2004ASeries 3.0 -5.0% 5/1 -11 /1 12/1/2004 11/1/2024 11/1/2006 410,000 11/1/2007 420,000 11/1/2008 435,000 ll /l/2009 445,000 11/1/2010 460,000 11/1/2011 475,000 11/1/2012 490,000 11/1/2013 510,000 11/1/2014 530,000 11/1/2015 550,000 11/1/2016 570,000 11/1/2017 595,000 11/1/2018 620,000 11/1/2019 650,000 11/1/2020 675,000 11/1/2021 705,000 l l / 1 /2022 740,000 11/1/2023 775,000 11/1/2024 815,000 10,870,000 42 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Authorized Prior years Balance at Fiscal year Amount Issued Retired June 32,M Issued 2004 9,300,000 9,300,000 2004 11,050,000 11,050,000 490,000 8,810,000 1 1,050,000 Retired/ Balance at Refunded June 30, 2006 310,000 8,500,000 180,000 10,870,000 43 (Continued) t KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Interest Type of debt Rates Dates Clean water — Karluk 3.92-4.05% ** Principal payments Issue date Maturity dates Dates Amount ** ** 6/1/2007 4,667 6/1/2008 4,784 6/l/2009 4,903 6/1/2010 5,026 6/1/2011 5,152 6/1/2012 5,280 6/1/2013 5,412 6/1/2014 5,548 6/1/2015 5,686 6/1/2016 5,829 6/1/2017 5,974 6/1/2018 6,124 6/1/2019 6,277 6/1/2020 6,434 6/1/2021 6,594 83,690 $ 31,238,690 * Interest free unless delinquent, the 7% plus fees and penalties. ** These loans respresent 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. Interest begins accruing at the stated rates from the date of each individual disbursement of loan proceeds to the Borough. 44 1 1 1 C 1 1 (Continued) 1 1 1 1 1 1 1 1 1 r i i KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Authorized Prior years Balance at Retired/ Balance at Fiscal year Amount Issued Retired June 30, 2004 Issued Refunded June 30, 2005 1998 400,000 97,019 8,776 88,243 — 4,553 83,690 $ 36,225,000 35,922,019 2,868,776 33,053,243 — 1,814,553 31,238,690 45 (Continued) KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 The annual requirements to amortize all general obligation bonded debt and the ADEC loan payable outstanding as of June 30, 2006, are as follows: General ADEC There were no amounts available in the Debt Service Funds to service the 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. (b) Note Payable As of June 30, 2006, the Borough had the following note payable outstanding in the Enterprise Funds: 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 (8) Solid Waste Landfill Closure and Postclosure Care Costs 1 1 t t 1,270,210 1 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 $3,258,937 as of June 30, 2006, which is based on 86% 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, 2006, an increase of $245,006 was recorded in the current year based on current year usage and changes in estimates. An estimated additional $530,525 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 $3,789,462 is based on the amount that 46 i J obligation loan payable Interest Total Year ending June 30: 2007 2,095,000 4,667 1,333,806 2,099,667 2008 2,200,000 4,784 1,262,427 2,204,784 2009 2,290,000 4,903 1,168,707 2,294,903 2010 2,385,000 5,026 1,070,939 2,390,026 2011 -2015 10,455,000 27,078 3,839,242 10,482,078 2016 -2020 5,535,000 30,638 2,218,269 5,565,638 2021 -2025 6,195,000 6,594 863,970 6,201,594 $ 31,155,000 83,690 11,757,360 31,238,690 There were no amounts available in the Debt Service Funds to service the 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. (b) Note Payable As of June 30, 2006, the Borough had the following note payable outstanding in the Enterprise Funds: 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 (8) Solid Waste Landfill Closure and Postclosure Care Costs 1 1 t t 1,270,210 1 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 $3,258,937 as of June 30, 2006, which is based on 86% 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, 2006, an increase of $245,006 was recorded in the current year based on current year usage and changes in estimates. An estimated additional $530,525 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 $3,789,462 is based on the amount that 46 i J 1 ' KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 would be paid if the landfill were closed as of June 30, 2006. 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. 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. 1 1 1 1 1 1 47 1 KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 For governmental activities, compensated absences are generally liquidated by the General Fund. I 48 1 g es in Lon g () Changes -Term Liabilities Long -term liability activity for the year ended June 30, 2006, was as follows: Balance Balance June 30, June 30, Due within 2005 Additions Reductions 2006 one year , Governmental activities: Bonds payable: General obligation bonds $ 32,965,000 — 1,810,000 31,155,000 2,095,000 , Bond premium 115,509 — 6,080 109,429 6,080 33,080,509 — 1,816,080 31,264,429 2,101,080 ADEC loans 88,243 — 4,553 83,690 4,667 ' Compensated absences 172,760 171,869 172,760 171,869 171,869 Total $ 33,341,512 171,869 1,993,393 31,519,988 2,277,616 Business -type activities: Municipal solid waste collection and disposal: Landfill closure and post - closure care costs $ 3,013,931 245,006 — 3,258,937 — Notes payable 1,270,210 — — 1,270,210 — Total $ 4,284,141 245,006 — 4,529,147 — Hospital facilities: Long term interfund borrowings $ 1,490,822 — 57,919 1,432,903 60,259 Total hospital $ 1,490,822 — 57,919 1,432,903 60,259 Kodiak Fisheries Research , Center: Long term interfund borrowings $ 6,600,000 — 290,000 6,310,000 315,000 Business -type activities: Landfill closure and post- closure care costs $ 3,013,931 245,006 — 3,258,937 — , Long term interfund borrowings 8,090,822 — 347,919 7,742,903 347,919 Notes payable 1,270,210 — — 1,270,210 — Total $ 12,374,963 245,006 347,919 12,272,050 347,919 For governmental activities, compensated absences are generally liquidated by the General Fund. I 48 1 1 1 1 'J 1 KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 (9) Insurance and Risk Retention 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. 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: (a) 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. (b) 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. ' 49 1 KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 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. (10) Rental Revenues (a) 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 lease is cancelable by either party with a one year notice. The hospital capital assets, the lease income, and all other costs relating to the agreement are accounted for by the Borough in the Hospital Facilities Enterprise Fund. The agreement with Providence specifies that the Borough will contribute 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 $25,000 in cost. The Borough receives $60,000 per month in rental revenue. In October 2005 the lease was amended to remove the requirement that Providence had to pay 50% of the net revenues of the hospital, up to $600,000, in rental revenues. The lease was also amended to have the $150,000 of equipment which the Borough was required to purchase become Providence property rather than Borough property. In August 2003, the lease was amended that required Providence to pay an additional lease payment of $1,300,000 in 2004. Prior to the commencement of each subsequent lease year, both parties will negotiate for the terms for the following year. 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. (b) Kodiak Fisheries Research Center The Kodiak Fisheries Research Center (KFRC) leases its premise to the General Services Administration (GSA), Alaska Department of Fish and Game (ADF &G), the GSA on behalf of Department of Commerce, National Oceanic and Atmospheric Administration (NOAA), and the University of Alaska Fairbanks (UAF). The lease with the GSA is from March 1, 2003, through September 30, 2018, cancelable with 120 days notice. Annual rent varies from $32,000 in 2006 to $41,000 in 2018. The lease with ADF &G is from October 1, 1998 through September 30, 2018, with an option to extend for up to two additional five year periods. Annual rent varies from $28,800 in 2006 to $52,800 in 2011. The annual rent from 2012 through 2018 will be based on $52,800 and adjusted for the tenants proportionate share of building expenses and utilization of the seawater system. 50 rl 1 1 n L KODIAK ISLAND BOROUGH ' Notes to Financial Statements June 30, 2006 The lease with NOAA is from October 1, 1998 through September 30, 2018, with an option to extend for up to four additional five year periods. Annual rent is $756,000 plus operational and maintenance expenses of $699,076. Operational and maintenance expenses are adjusted every five years to actual costs. The lease with UAF is from October 1, 1998 through September 30, 2018, cancelable with 30 days notice, with an option to extend for up to two additional five year periods. Annual rent varies from $90,000 in 2006 to $143,601 in 2018. (11) Retirement Commitments ' (a) PERS The Alaska Public Employees' Retirement System (PERS) is a defined benefit agent multiple - employer public employee retirement system that acts as a common investment and administrative agent for political subdivisions within 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. Employee participation in the plan is mandatory for permanent employees ' scheduled to work at least 15 hours a week. There is no optional participation for other employees. The plan provides pension and other postemployment healthcare, death and disability benefits. During 2005, the Borough adopted Governmental Accounting Standards Board Statement No. 45, ' Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. ' During the 2005 legislative session, a law was enacted that closes this retirement plan. Senate Bill 141, signed into law on July 27, 2005 and effective July 1, 2006 closed the plan to new members and created a new defined contribution plan for members first hired on or after July 1, 2006. As part of this legislation, active nonvested members may have the option to convert their defined benefit plan to the new PERS Defined Contribution Retirement Plan if their employer decides to participate in the conversion option. 1 PERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to State of Alaska, Department of Administration, Division of Retirement and Benefits, P.O. Box 110203, Juneau, ' Alaska 99811 -0203, by calling (907) 465 -4460 or online at http://www.state.ak.us/drb/pers/actuarial- valuation.shtml ' At June 30, 2006, the number of participating employers was: State of Alaska 3 Municipalities 77 School Districts 53 Other 27 Total employers 160 1 51 KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Under state law, covered employees are required to contribute 6.75% (7.5% for police and fire personnel) of their annual covered payroll and the Borough is required to contribute an actuarially determined rate that, expressed as a percentage of annual covered payroll, is sufficient to accumulate assets to pay pension and other postemployment benefits (OPEB) when due. However, the 2006 actuarially determined rate was 28.34% of applicable gross pay and the employer contribution rate was capped at 10.0% in accordance with PERS statute that limits yearly increases to 5% age points. Benefits vest after five years of credited service. Employees enrolled 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 enrolled after June 30, 1986 the normal and early retirement ages are 60 and 55, respectively. Employees with 30 or more years of credited service may retire at any age and receive a normal benefit. Retirement benefits are calculated by multiplying the average monthly compensation (AMC) times credited PERS service times the percentage multiplier. The AMC is determined by averaging the salaries earned during the five highest (three highest for Police /Fire members or members hired prior to July 1, 1996) consecutive payroll years. Members must earn at least 115 days of credit in the last year worked to include it in the AMC calculation. The PERS pays a minimum benefit of $25.00 per month for each year of service when the calculated benefit is less. The percentage multipliers for police /fire personnel are 2% for the first ten years of service and 2.5% for all service over 10 years. The percentage multipliers for all other participants are 2% for the first ten years, 2.25% for the next ten years, and 2.5% for all remaining service earned on or after July 1, 1986. All service before that date is calculated at 2 %. The system also provides death and disability benefits and major medical benefits. Major medical benefits are provided without cost to all members first enrolled before July 1, 1986. Members first enrolled after June 30, 1986 may elect to pay for major medical benefits. Pension benefits are adjusted each year based upon increases in the Consumer Price Index (CPI) for the prior year. The increase in the benefits is 75% of the CPI increase up to a 9% maximum for recipients who are at least age 65 or on disability or 50% of the increase up to a 6% maximum for recipients who are at least age 60 but under 65 or who have been receiving benefits for at least five years. Starting at age 65, or at any age for those employed before July 1, 1986, a retired employee who remains in Alaska is eligible for an additional allowance equal to 10% of the base benefit or $50 a month, whichever is greater. Annual Cost and Net Obligation The Borough's annual costs (expense) are calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. Tile ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed twenty years. The following table shows the components of the Borough's annual cost, the amount actually contributed to the plan, and changes in the Borough's net obligation to PERS: 52 1 1 J 1 1 11, 1 1 1 ri 1 t 1 KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 Annual required contribution Interest on net obligation Adjustment to annual cost Annual cost Contributions made Increase in obligation Net obligation, beginning of year Net obligation, end of year Pension $ 441,139 17,648 (34,755) 424,032 (272,330) 151,702 213,916 $ 365,618 OPEB 163;161 11,795 (23,230) 151,726 (100,725) 51,001 142,981 193,982 Funded Status and Funding Progress (Unaudited) The funded status of the plan as of June 30, 2005, was as follows: OPEB 11,485,073 7,400,740 4,084,333 64% 2,132,321 192% Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of 53 Pension Actuarial accrued liability (AAL) $ 11,526,933 Actuarial value of plan assets 7,427,714 Unfunded actuarial accrued liability (UAAL) $ 4,099,219 Funded ratio (actuarial value of plan assets /AAL) 64% Covered payroll (active plan members) $ 2,132,321 UAAL as a percentage of covered payroll 192% OPEB 11,485,073 7,400,740 4,084,333 64% 2,132,321 192% Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of 53 ' f 1J KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 assets, consistent with the long -term perspective of the calculations. Significant actuarial methods and assumptions were as follows: The Senate introduced Senate Bill 46 late in September 2006 appropriating money from the General Fund to the Department of Administration to help reduce the liability to PERS brought on by the increased employer cost due to the employer contribution rate increases in fiscal year 2006. The appropriation is intended to help reduce the cost based on the estimates but will not fully eliminate the increased employer costs. The amount allocated to the Kodiak Island Borough was $113,667. The Borough's annual pension cost, the percentage of annual pension cost contributed to the plan, and the net pension obligation for 2006 and the two preceding years were as follows: Il 1 1 1 [ 1 J Percentage of APC Year ended APC contributed Net pension obligation 6/30/2004 $ 58 100% — 6/30/2005 273,669 22% 213,916 6/30/2006 424,032 64% 365,618 The Borough's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2006 and the two preceding years were as follows: 54 Pension OPEB Contribution rates: Employee: Peace officers and firefighters 4.50% 3.00% Other employees 4.05% 2.70% Employer 20.98% 7.36% Actuarial assumptions: Actuarial valuation date June 30, 2005 June 30, 2004 Actuarial cost method Projected unit credit Projected unit credit Amortization method Percent of pay, Percent of pay, open open Remaining amortization,period 20 years 20 years Asset valuation method 5 -year 5 -year Inflation rate 3.50% 3.50% Investment return 8.25% 8.25% Projected salary increase: Inflation 3.50% N/A Productivity and merit: Peace officers and firefighters 2.50% N/A Others 2.00% N/A Health cost trend N/A 12.00% The Senate introduced Senate Bill 46 late in September 2006 appropriating money from the General Fund to the Department of Administration to help reduce the liability to PERS brought on by the increased employer cost due to the employer contribution rate increases in fiscal year 2006. The appropriation is intended to help reduce the cost based on the estimates but will not fully eliminate the increased employer costs. The amount allocated to the Kodiak Island Borough was $113,667. The Borough's annual pension cost, the percentage of annual pension cost contributed to the plan, and the net pension obligation for 2006 and the two preceding years were as follows: Il 1 1 1 [ 1 J Percentage of APC Year ended APC contributed Net pension obligation 6/30/2004 $ 58 100% — 6/30/2005 273,669 22% 213,916 6/30/2006 424,032 64% 365,618 The Borough's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2006 and the two preceding years were as follows: 54 1 ' KODIAK ISLAND BOROUGH Notes to Financial Statements June 30, 2006 I � Annual Percentage of OPEB Annual OPEB Net OPEB Year ended June 30 Cost Cost Contribute Obligation 2004 $ 39 100% — ' 2005 182,920 22% 142,981 2006 151,726 64% 193,982 (b) 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 regular 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, 2006, was $98,731. The plan is managed by the International City Managers Association Retirement Corporation. The Borough believes that the plan does not meet the criteria for inclusion as a fiduciary fund. ' (12) Contingencies (a) 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. (b) 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. (c) Litigation The Borough is a member of a mandatory class action lawsuit which resulted in a verdict against Exxon Corporation in August 1994 in the amount of $5 billion for punitive damages and was later reduced to $4.5 billion. The matter is now on appeal to the Ninth Circuit Court of Appeals. The share of the settlement, if any, has not been recognized in the financial statements as the settlement is in the appeals process. The ultimate outcome of the matter and the amount to be realized by the Borough upon final settlement is indeterminable at this time. 55 u 1 1 1 1 ' REQUIRED SUPPLEMENTARY INFORMATION 1 ll� i i Three -year historical trend information presenting the Borough's progress in accumulating sufficient assets to pay pension and OPEB benefits under the PERS when due is presented as follows (dollar amounts in thousands): 57 (AAL) UAL /FE as a Actuarial (UAAL) percentage Actuarial Actuarial accrued Funding of covered valuation value of liability excess Funding Covered payroll date assets (a) (AAL) (b) (FE) (a -b) ratio (alb) payroll (c) ((a -b) /c) Pension: 6/30/2003 8,701 11,170 (2,469) 78% 1,712 (144)% 6/30/2004 8,543 12,055 (3,512) 71% 1,953 (180)% 6/30/2005 7,428 11,527 (4,099) 64% 2,132 (192)% OPEB: 6/30/2003 5,816 7,466 (1,650) 78% 1,712 (96)% 6/30/2004 6,024 8,501 (2,477) 71% 1,953 (127)% 6/30/2005 7,401 11,485 (4,084) 64% 2,132 (192)% 57 KODIAK ISLAND BOROUGH Budgetary Comparison Schedule General Fund Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Revenues: Property taxes: Real Personal Boat Penalty and interest Total property taxes Intergovernmental: State sources: Tax Payer Relief Motor vehicle Raw fish tax Fish revitalization Electric Co -op tax On behalf PERS payment Total state sources Federal sources: Payments in lieu of taxes Fish and Wildlife revenue sharing Total federal sources Total intergovernmental revenue Severance taxes: Fish Mining Logging Total severance taxes 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 Investment income Total revenues 1 11 1 n 58 1 2006 Variance with Final Budget - Budget Positive 2005 Original Final Actual (Negative) Actual $ 7,614,300 7,614,300 7,790,275 175,975 6,962,534 1,167,990 1,167,990 1,107,316 (60,674) 995,953 8,000 8,000 7,546 (454) 6,575 150,000 150,000 164,978 14,978 204,612 8,940,290 8,940,290 9,070,115 129,825 8,169,674 113,000 - - - - 180,000 180,000 181,632 1,632 203,603 700,000 802,300 802,313 13 773,290 1,780 62,877 61,097 26,000 26,000 26,680 680 27,205 - - 113,667 113,667 - 1,019,000 1,010,080 1,187,169 177,089 1,004,098 745,000 745,000 803,246 58,246 789,053 400,075 400,075 378,770 (21,305) 335,857 1,145,075 1,145,075 1,182,016 36,941 1,124,910 2,164,075 2,155,155 2,369,185 214,030 2,129,008 903,060 903,060 1,108,742 205,682 980,110 6,640 6,640 15,426 8,786 8,416 55,330 55,330 62,740 7,410 17,013 965,030 965,030 1,186,908 221,878 1,005,539 80,000 80,000 69,670 (10,330) 77,597 7,000 7,000 6,525 (475) 13,825 24,000 24,000 13,470 (10,530) 18,394 65,700 65,700 82,297 16,597 51,805 176,700 176,700 171,962 (4,738) 161,621 230,000 300,000 469,913 169,913 265,392 12,476,095 12,537,175 13,268,083 730,908 11,731,234 (continued) 1 11 1 n 58 1 1 1 KODIAK ISLAND BOROUGH Budgetary Comparison Schedule General Fund Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) ' Community and economic development: Community development department Building official Economic development ' Total community and economic development Expenditures: ' General government: ' General and administration Borough assembly Variance with Borough manager ' Borough clerk Borough attorney Finance department ' Management information systems Assessing department 2005 Engineering/facilities department Final Total general government ' Community and economic development: Community development department Building official Economic development ' Total community and economic development 1 See accompanying notes to required supplementary information. 1 59 Emergency preparedness ' Health and sanitation department ' Education, culture, and recreation Primary and secondary education Variance with Total expenditures ' Excess of revenues over expenditures 1 See accompanying notes to required supplementary information. 1 59 Other financing uses: ' Transfers out Net change in fund balance Fund balance, at beginning of year Fund balance, at end of the Variance with year 1 See accompanying notes to required supplementary information. 1 59 2006 Variance with Final Budget - Budget Positive 2005 Original Final Actual (Negative) Actual $ 310,970 335,970 421,057 (85,087) 327,571 160,230 160,230 139,053 21,177 126,388 237,150 237,150 252,118 (14,968) 355,019 359,570 359,570 354,798 4,772 304,259 153,200 153,200 74,638 78,562 112,510 664,770 664,770 602,111 62,659 556,616 429,213 429,213 423,751 5,462 381,037 385,820 385,820 354,595 31,225 246,884 111,980 111,980 108,214 3,766 76,195 2,812,903 2,837,903 2,730,335 107,568 2,486,479 528,270 528,270 497,036 31,234 443,876 132,230 132,230 163,829 (31,599) 139,832 78,000 78,000 75,018 2,982 87,322 738,500 738,500 735,883 2,617 671,030 38,800 38,800 6,098 32,702 5,428 284,320 284,320 286,294 (1,974) 254,313 150,335 162,335 161,633 702 127,335 8,360,110 8,460,110 8,430,840 29,270 7,973,035 12,384,968 12,521,968 12,3 51,083 170,885 11,517,620 91,127 15,207 917,000 901,793 213,614 (697,450) (703,900) (703,900) - (510,097) $ (606,323) (688,693) 213,100 901,793 (296,483) 1,813,013 2,109,496 $ 2,026,113 1,813,013 1 See accompanying notes to required supplementary information. 1 59 KODIAK ISLAND BOROUGH Budgetary Comparison Schedule Special Revenue Fund — Facilities Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Revenues: Investment income Expenditures: Contingencies Excess of revenues over expenses Other financing sources (uses): Transfers out Net change in fund balance Fund balance, at beginning of year Fund balance, at end of year See accompanying notes to required supplementary information. 60 2006 Variance with Final Budget — Budget Positive 2005 Original Final Actual (Negative) Actual $ 1,680,000 1,680,000 1,477,536 (202,464) 1,114,071 436,000 284,000 — 284,000 — 1,244,000 1,396,000 1,477,536 81,536 1,114,071 (1,244,000) (1,396,000) (717,035) 678,965 (884,248) $ — — 760,501 760,501 229,823 37,774,332 37,544,509 $ 38,534,833 37,774,332 See accompanying notes to required supplementary information. 60 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 KODIAK ISLAND BOROUGH Budgetary Comparison Schedule Debt Service Fund - Education and Health Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 2006 Revenues: Intergovernmental: State sources Investment income Total revenues Expenditures: General government Debt service: Principal Interest Bond issuance costs Total expenditures Deficiency of revenues over expenditures Other financing sources: Bond premium Transfers in Net other financing sources Net change in fund balance Fund balance (deficit), at beginning of year Fund deficits, at end of year $ 1,885,040 Variance with Original Final Budget and Final Positive 2005 Budget Actual (Negative) Actual $ 1,885,040 2,146,406 261,366 942,687 9,280 39,517 30,237 11,983 1,894,320 2,185,923 291,603 954,670 2,500 1,315 1,185 4,705 1,994,550 1,814,553 179,997 1,784,859 1,594,950 1,583,488 11,462 983,195 — — — 38,956 3,592,000 3,399,356 192,644 2,811,715 (1,697,680) (1,213,433) 484,247 (1,857,045) — — — 118,830 1,697,680 1,480,155 (217,525) 1,356,067 1,697,680 1,480,155 (217,525) 1,474,897 $ — 266,722 266,722 (382,148) (348,233) 33,915 $ (81,511) (348,233) See accompanying notes to required supplementary information. 61 1 KODIAK ISLAND BOROUGH ' Notes to Required Supplementary Information — Budgetary Comparison Schedules , June 30, 2006 The Borough follows these procedures in establishing the budgetary data reflected in the fund 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. I — 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. , • 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. • The Borough publishes a separate 2006 budget document. That document may be obtained from the ' Kodiak Island Borough, Director of Finance, 710 Mill Bay Road, Kodiak, Alaska 99615. 62 1 1 1 KODIAK ISLAND BOROUGH Combining Balance Sheets ' Nonmajor Governmental Funds June 30, 2006 ' (With summarized financial information at June 30, 2005) ' Special Debt Capital Totals Assets Revenue Service Project 2006 2005 Equity in central treasury $ 399,570 158,409 153,781 711,760 1,016,196 ' Temporary investments 2,303,136 - 978,549 3,281,685 2,012,699 Receivables: State of Alaska 121,067 - 319,016 440,083 268,862 Federal Government - - 6,355 6,355 6,355 Property taxes 28,509 - - 28,509 14,479 Land sales contracts, due within one year 1,538 1,538 8,000 Notes receivable 501,889 - - 501,889 53,374 Other 21,689 - - 21,689 25,105 Due from other funds 706,500 - 50,000 756,500 93,244 Notes receivable, due after one year 487,271 Land sale contracts, due after one year 228,496 228,496 34,272 Total $ 4,312,394 158,409 1,507,701 5,978,504 4,019,857 Liabilities and Fund Balances Liabilities: Accounts payable $ 229,975 - 6,914 236,889 132,391 Retainages payable = 22,270 22,270 22,270 Employee benefits accrued and withheld - 156 Customer deposits 678 - 678 1,203 Due to other funds 266,907 - 542,000 808,907 652,193 Unearned revenues 731,499 - - 731,499 599,136 Total liabilities 1,229,059 571,184 1,800,243 1,407,349 Fund Balances: Unreserved: ' Designated for subsequent year expenditures 420,400 - - 420,400 143,676 Undesignated 2,662,935 158,409 936,517 3,757,861 2,468,832 ' Total fund balances 3,083,335 158,409 936,517 4,178,261 2,612,508 Totals $ 4,312,394 158,409 1,507,701 5,978,504 4,019,857 1 1 63 1 KODIAK ISLAND BOROUGH Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficits) Nonmajor Governmental Funds Year ended June 30, 2006 (With summarized financial information for year ended June 30, 2005) Revenues: Property taxes and assessments Intergovernmental: State sources Federal sources Land sale proceeds Licenses, permits, fees, and other local revenues Investment income Other Total revenues Expenditures: General government Community and economic development Health and sanitation department Service district maintenance Capital improvements: Schools General Debt service Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Net other financing sources (uses) Net change in fund balances Fund balances (deficits), at beginning of year Fund balances, at end of year Special Debt Capital Totals Revenue Service Projects 2006 2005 1 u �1 $ 763,731 - - 763,731 690,452 34,916 34,916 426,621 320,974 - 263,936 584,910 329,383 177,164 - - 177,164 22,738 648,049 - 275 648,324 530,379 ' 108,757 - 18,566 127,323 52,826 114,290 - 10,750 125,040 75,094 2,132,965 - 328,443 2,461,408 2,127,493 ' 1,219,277 - - 1,219,277 1,222,923 48,119 - - 48,119 65,804 77,226 - - 77,226 75,425 ' 336,385 - - 336,385 347,934 - - 24,950 24,950 12,717 332,398 332,398 511,798 1,275 - - 1,275 1,571 , 1,682,282 - 357,348 2,039,630 2,238,172 450,683 - (28,905) 421,778 (110,679) ' 157,027 - 114,000 271,027 227,637 (82,967) - - (82,967) (235,265) ' 74,060 - 114,000 188,060 (7,628) 524,743 - 85,095 609,838 (118,307) 2,558,592 158,409 851,422 3,568,423 2,730,815 ' $ 3,083,335 158,409 936,517 4,178,261 2,612,508 64 NONMAJOR GOVERNMENTAL FUNDS Special Revenue See special revenue section of the report. Debt Service See debt service section of the report. Capital Projects See capital projects section of the report NONMAJOR SPECIAL REVENUE FUNDS 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. NONMAJOR SPECIAL REVENUE FUNDS The Local Emergency Planning Committee Fund accounts for State of Alaska grants provided for regional emergency preparation, response, and mitigation planning. 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 that 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 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. The Trinity Islands Lighting District Fund accounts for activities related to the provision of street lighting within the service area. The Trinity Islands Paving District Fund accounts for activities related to paving the dirt roads within the subdivision. The Mission Lake Tide Gate Fund accounts for activities related to maintaining the tide gate for the residents of the service area. The Fern Fuller Trust Fund accounts for the distribution of funds to the beneficiaries of the trust KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Combining Balance Sheet June 30, 2006 (With summarized financial information at June 30, 2005) Fire and Road Service Areas L I L L 66 1 Fire Road Fire Womens Kodiak Monasbka Protection Bay Fire Airport Fire Bay Road Service Assets Area No. 1 Department District Service Area District No. 1 Equity in central treasury $ 8,942 49,028 27,110 60,962 86,158 Temporary investments 978,550 - - - - Receivables: State of Alaska - 121,067 - - - Land sales contracts, due within one year - - _ _ Property taxes 5,280 1,821 42 477 2,230 Notes receivable - - Other Due from other funds Notes receivable, due after one year - 100,000 - - - - - - - _ 200,000 - Land sale contracts, due after one year - - - - - Total $ 1,092,772 171,916 27,152 61,439 288,388 Liabilities and Fund Balances Liabilities: Accounts payable 18,984 302 - 4,603 47,661 Employee benefits accrued and withheld - - - - - Customer deposits - 500 - - - Due to other funds - 30,923 - - - Unearned revenues - - - - Total liabilities Fund balances (deficits): 18,984 31,725 - 4,603 47,661 Unreserved (deficits): Designated for subsequent year expenditures 349,660 - 340 - Undesignated 724,128 140,191 26,812 56,836 240,727 Total fund balances (deficits) 1,073,788 140,191 27,152 56,836 240,727 Total $ 1,092,772 171,916 27,152 61,439 288,388 L I L L 66 1 1 1 i 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Fire and Road Service Areas 67 Road Federal and State Grant Programs Child Care Womens Bay Bay View Road Service Area Coastal Assistance Service Area Service Area No. 2 Management Program L.E.P.C. Land Sales 14,685 212 4,331 35,191 280 320 60,964 - - - - - - 918,454 - - - - 1,538 2,883 431 - - - - - - - - - - - 3,116 200,000 - - - 5,000 - - - - - - - - 228,496 217,568 643 4,331 35,191 5,280 320 1,212,568 48,292 1,310 - - 18 5,315 2,558 - - - 10,000 - - - 1,113 - - 228,497 48,292 1,310 - 1,113 18 15,315 231,055 169,276 (667) 4,331 34,078 5,262 (14,995) 981,513 169,276 (667) 4,331 34,078 5,262 (14,995) 981,513 217,568 643 4,331 35,191 5,280 320 1,212,568 67 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Combining Balance Sheet, Continued Street Lighting Districts I F� 1 1 68 1 Woodland Buildings Acres Street Trinity Acres and Light Service Street Light Kodiak Arts Tourism Assets Grounds Area Service Area Council Development Equity in central treasury $ 324 14,160 90 732 30,533 Temporary investments 406,132 — — — — Receivables: State of Alaska — — — — — Land sales contracts, due within one year — — — — Property taxes — — — — — Notes receivable — — — — — Other 900 — — (250) 17,341 Due from other funds — — — — Notes receivable, due after one year — — — — — Land sale contracts, due after one year — — — — — Total $ 407,356 14,160 90 482 47,874 Liabilities and Fund Balances Liabilities: Accounts payable 53,683 489 157 — 43,603 Employee benefits accrued and withheld — — — — — Customer deposits — — — — 178 , Due to other funds 30,000 — 1,500 4,000 — Uneamed revenues — — — — — Totalliabilities Fund balances (deficits): 83,683 489 1,657 4,000 43,781 Unreserved (deficits): Designated for subsequent year expenditures 65,000 5,400 — — — Undesignated 258,673 8,271 (1,567) (3,518) 4,093 Total fund balances (deficits) 323,673 13,671 (1,567) (3,518) 4,093 Total $ 407,356 14,160 90 482 47,874 F� 1 1 68 1 l 1 1 1 69 Mission Lake Fern Fuller Trinity Acres Totals Tide Gate Trust Paving 2006 2005 3,680 1,868 399,570 857,787 - - - 2,303,136 2,012,699 121,067 20,030 - 1,538 8,000 - - 15,345 28,509 14,479 - 487,271 - 487,271 53,374 14,618 582 36,307 25,105 1,500 200,000 706,500 93,244 487,271 - - - 228,496 34,272 5,180 703,757 15,927 4,312,394 3,606,261 - 3,000 - 229,975 96,631 _ _ 677 8 156 1,203 _ 190,484 266,907 350,543 - 501,889 - 731,499 599,136 - 504,889 190,484 1,229,059 1,047,669 - - - 420,400 143,676 5,180 198,868 (174,557) 2,662,935 2,414,916 5,180 198,868 (174,557) 3,083,335 2,558,592 5,180 703,757 15,927 4,312,394 3,606,261 1 1 69 KODIAK ISLAND BOROUGH I J 1 70 1 Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficits) Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Fire and Road Service Areas Fire Road Fire Womens Kodiak llionashka Protection Bay Fire Airport Fire Bay Road Area No. 1 Department District Service Area Revenues: Property taxes and assessments $ 345,423 62,475 15,205 28,134 Intergovernmental: State sources - - - - Federal sources - 222,457 - - Land sale proceeds - - - - Licenses, permits, fees, and other local revenues 6,909 9,535 Investment income 43,172 3,609 1,176 2,698 Other - - - - Total revenues 395,504 298,076 16,381 30,832 Expenditures: General government 254,740 264,767 27 478 Community and economic development - - - - Health and sanitation department - - - - Service district maintenance - - - 23,544 Debt service - 1,275 - - Total expenditures 254,740 266,042 27 24,022 Excess (deficiency) of revenues over expenditures 140,764 32,034 16,354 6,810 Other financing sources (uses): Transfers in - 16,467 - - Transfers out - - (16,467) - Net other financing sources (uses) - 16,467 (16,467) - Net change in fund balance 140,764 48,501 (113) 6,810 Fund balances (deficits), at beginning of year 933,024 91,690 27,265 50,026 Fund balances (deficits), at end of year $ 1,073,788 140,191 27,152 56,836 J 1 70 1 1 1 1 1 1 1 1 1 1 t fi it t 1 1 71 Fire and Road Service Areas Road Federal and State Grant Programs Child Care Service Womens Bay Bay View Road Service Area Coastal Assistance District No. 1 Service Area Service Area No. 2 Management Program L.E.P.C. Land Sales 162,305 96,059 5,611 - - - - - - - - - 24,367 74,150 - - - - - - - - - 177,164 - 20,000 85,092 13,077 9,318 45 164 - - - 24,202 - - - - 31,829 - - 7,305 175,382 125,377 5,656 164 56,196 74,150 - 293,763 6,336 1,883 57 - - - 9,214 30,333 - - - - 3,119 - - - - - - - - 77,226 - - 182,556 125,924 4,361 = _ _ 188,892 127,807 4,418 - 3,119 77,226 9,214 30,333 (13,510) (2,430) 1,238 164 53,077 (3,076) (9,214) 263,430 (9,214) (13,510) (2,430) 1,238 164 53,077 (3,076) 263,430 254,237 171,706 (1,905) 4,167 (18,999) 8,338 (5,781) 718,083 240,727 169,276 (667) 4,331 34,078 5,262 (14,995) 981,513 (continued) 71 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficits) Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 72 1 1 1 Street Lighting Districts Woodland Acres Trinity Acres Buildings and Street Light Street Light Kodiak Arts Grounds Service Area Service Area Council Revenues: Property taxes and assessments $ — — 3,892 — Intergovernmental: State sources — — — Federal sources — — — — Land sale proceeds — — Licenses, permits, fees, and other local revenues 418,445 — — 60,423 Investment income 10,483 620 — — Other 156 — — — Total revenues 429,084 620 3,892 60,423 Expenditures: General government 572,365 5,660 1,822 61,553 Community and economic development — — — — Health and sanitation department — — — — Service district maintenance — — — — Debt service — — — — Total expenditures 572,365 5,660 1,822 61,553 Excess (deficiency) of revenues over(under)expenditures (143,281) (5,040) 2,070 (1,130) Other financing sources (uses): Transfers in 140,560 — — — Transfers out — — — Net other financing sources (uses) 140,560 — — — Net change in fund balance (2,721) (5,040) 2,070 (1,130) Fund balances (deficits), at beginning of year 326,394 18,711 (3,637) (2,388) Fund balances (deficits), at end of year $ 323,673 13,671 (1,567) (3,518) 72 1 1 1 Tourism Mission Lake Fern Fuller Trinity Acres Totals Development Tide Gate Trust Paving 2006 2005 - 2,456 - 42,171 763,731 690,452 - - - - - 95,528 - - - - 320,974 142,371 - - - - 177,164 22,738 47,645 - - - 648,049 530,379 150 - - 43 108,757 52,826 - - 75,000 - 114,290 75,094 47,795 2,456 75,000 42,214 2,132,965 1,609,388 - 1,377 8,627 38 1,219,277 1,222,923 45,000 - - - 48,119 65,804 - _ - - 77,226 75,425 - - - - 336,385 347,934 - - - - 1,275 1,571 45,000 1,377 8,627 38 1,682,282 1,713,657 2,795 1,079 66,373 42,176 450,683 (104,269) - - - - 157,027 227,637 - - (66,500) - (82,967) (235,265) - - (66,500) - 74,060 (7,628) 2,795 1,079 (127) 42,176 524,743 (111,897) 1,298 4,101 198,995 (216,733) 2,558,592 2,670,489 4,093 5,180 198,868 (174,557) 3,083,335 2,558,592 73 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas - Fire Protection Area No. 1 Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 74 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues: Property taxes $ 330,000 345,423 15,423 330,757 Intergovernmental: Federal sources - - - 142,371 Licenses, permits, fees, and other localrevenues 5,500 6,909 1,409 5,214 Investment income - 43,172 43,172 18,406 Miscellaneous 500 - (500) 15 Total revenues 336,000 395,504 59,504 496,763 Expenditures: General government: Fire chief 70,640 67,653 2,987 63,388 Volunteers 22,000 23,295 (1,295) 16,350 Fringe benefits 29,310 24,192 5,118 19,989 Professional services 13,000 5,123 7,877 4,105 Support goods and services 141,300 99,444 41,856 90,784 Capital outlay 115,000 35,033 79,967 179,320 Depreciation 30,000 - 30,000 - Total expenditures 421,250 254,740 166,510 373,936 Excess (deficiency) of revenues over expenditures (85,250) 140,764 226,014 122,827 Fund balance, at beginning of year 933,024 810,197 Fund balance, at end of year $ 1,073,788 933,024 74 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas - Womens Bay Fire Department Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Revenues: Property taxes Intergovernmental: State sources Federal sources Licenses, permits, fees, and other local revenues Investment income Total revenues Expenditures: General government: Personnel services Fringe benefits Professional services Support goods and services Capital outlay Debt service: Interest Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources: Transfers in Net change in fund balance Fund balance, at beginning of year Fund balance, at end of year 75 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual $ 63,000 62,475 (525) 60,904 - - - 297 - 222,457 222,457 - 9,000 9,535 535 9,030 500 3,609 3,109 1,672 72,500 298,076 225,576 71,903 3,000 1,670 1,330 618 650 498 152 96 - - - 30 52,825 40,142 12,683 52,236 284,725 222,457 62,268 (1,439) 10,000 1,275 8,725 1,571 351,200 266,042 85,158 53,112 (278,700) 32,034 310,734 18,791 16,700 16,467 (233) 18,757 $ (262,000) 48,501 310,501 37,548 91,690 54,142 $ 140,191 91,690 75 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas — Kodiak Airport Fire District Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 76 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues: Property taxes $ 15,390 15,205 (185) 15,520 Investment income 100 1,176 1,076 971 Total revenues 15,490 16,381 891 16,491 Expenditures: General government: Support goods and services 90 27 63 29 Excess of revenues over expenditures 15,400 16,354 954 16,462 Other financing uses: Transfers out: Womens Bay Fire Department Special Revenue Fund (15,400) (16,467) (1,067) (18,757) Net change in fund balance $ — (113) (113) (2,295) Fund balance, at beginning of year 27,265 29,560 Fund balance, at end of year $ 27,152 27,265 76 1 1 1 1 1 1 1 1 1 1 1 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas — Monashka Bay Road Service Area Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 77 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues: Property taxes $ 28,756 28,134 (622) 23,939 Investment income 183 2,698 2,515 1,685 Total revenues 28,939 30,832 1,893 25,624 Expenditures: General government: Personnel services 515 402 113 635 Support goods and services 500 76 424 219 Service district maintenance: Snow removal /sanding 12,000 15,630 (3,630) 4,625 Road grading /ditching 20,000 921 19,079 26,944 Repairs and maintenance 10,000 6,993 3,007 4,905 Total expenditures 43,015 24,022 18,993 37,328 Excess (deficiency) of revenues over expenditures $ (14,076) 6,810 20,886 (11,704) Fund balance, at beginning of year 50,026 61,730 Fund balance, at end of year $ 56,836 50,026 77 KODIAK ISLAND BOROUGH I 1 L' 78 Nonmajor Special Revenue Funds Fire and Road Service Areas - Service District No. 1 Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 2006 , Variance with Final Budget Final Budget Actual Positive (Negative) 2005 Actual Revenues: Property taxes $ 162,500 162,305 (195) 154,016 Investment income 2,000 13,077 11,077 4,835 Total revenues 164,500 175,382 10,882 158,851 Expenditures: General government: Personnel services 7,250 5,695 1,555 6,947 ' Support goods and services 2,100 641 1,459 463 Service district maintenance: Snow removal /sanding 95,000 51,389 43,611 50,316 Road grading/ditching 50,000 72,569 (22,569) 73,507 Repairs and maintenance 50,000 58,598 (8,598) 68,324 Total expenditures 204,350 188,892 15,458 199,557 Excess (deficiency) of revenues over expenditures $ (39,850) (13,510) 26,340 (40,706) Fund balance, at beginning of year 254,237 294,943 Fund balance, at end of year $ 240,727 254,237 1 L' 78 L 79 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas - Womens Bay Road Service Area Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues: Property taxes $ 93,000 96,059 3,059 93,550 Licenses, permits, fees, and other local revenues Investment income 20,000 900 20,000 9,318 - 8,418 20,000 5,051 Total revenues 1 13,900 125,377 11,477 118,601 Expenditures: General government: Personnel services 850 551 299 862 Support goods and services 21,700 1,332 20,368 686 Service district maintenance: Snow removal /sanding 30,000 31,913 (1,913) 17,623 Road grading/ditching 30,000 86,926 (56,926) 23,422 Repairs and maintenance 31,350 7,085 24,265 72,896 Total expenditures 113,900 127,807 (13,907) 115,489 Excess (deficiency) of revenues over expenditures $ - (2,430) (2,430) 3,112 Fund balance, at beginning of year 171,706 168,594 Fund balance, at end of year $ 169,276 171,706 79 1 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas — Bay View Road Service Area Schedule of Revenues, Expenditures, and Changes in Fund Deficit Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 80 In 1. 1 'J 1 u I 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues: Property taxes $ 4,600 5,611 1,011 5,586 Investment income 200 45 (155) 40 Total revenues 4,800 5,656 856 5,626 Expenditures: General government: Personnel services — 49 (49) 44 Support goods and services — 8 (8) 9 Service district maintenance: Snow removal /sanding 2,500 2,620 (120) 2,102 Road grading /ditching 1,000 978 22 1,852 Repairs and maintenance 1,300 763 537 1,418 Total expenditures 4,800 4,418 382 5,425 Excess of revenues over expenditures $ — 1,238 1,238 201 Fund deficit, at beginning of year (1,905) (2,106) Fund deficit, at end of year $ (667) (1,905) 80 In 1. 1 'J 1 u I KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fire and Road Service Areas — Service Area No. 2 Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 2006 Revenues: Investment income Expenditures Excess of revenues over expenditures Fund balance, at beginning of year Fund balance, at end of year Variance with Final Budget Final Positive Budget Actual (Negative) $ — 164 164 $ — 164 4,167 $ 4,331 164 2005 95 95 4,072 4,167 81 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Coastal Management Schedule of Revenues, Expenditures, and Changes in Fund Balance (Deficit) Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Revenues: Intergovernmental: Federal sources — grants Other Total revenues Expenditures: Community and economic development: Planning and zoning Excess (deficiency) of revenues over expenditures Fund deficit, at beginning of year Fund balance, at end of year 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual $ 39,608 24,367 (15,241) — 31,829 31,829 39,608 56,196 16,588 39,608 3,119 $ — 53,077 (18,999) $ 34,078 1,805 1,805 36,489 20,804 53,077 (18,999) k 1 o,»> 82 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Child Care Assistance Program Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 2006 Revenues: Intergovernmental: Federal sources — grants Expenditures: Health and sanitation department: Personnel Support goods and services Total expenditures Deficiency of revenues over expenditures Fund balance, at beginning of year Fund balance, at end of year Final Budget Actual Variance with Final Budget Positive 2005 (Negative) Actual $ 83,090 74,150 (8,940) 75,425 70,780 66,750 4,030 66,130 12,310 10,476 1,834 9,295 83,090 77,226 5,864 75,425 $ — (3,076) (3,076) — 8,338 8,338 $ 5,262 8,338 83 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds L.E.P.C. Schedule of Revenues, Expenditures, and Changes in Fund Deficit Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 2006 Revenues Expenditures: General government: Personnel services Profesional services Total expenditures Deficiency of revenues over expenditures Fund deficit, at beginning of year Fund deficit, at end of year Final Budget Actual Variance with Final Budget Positive 2005 (Negative) Actual 18,001 — 3,887 (3,887) 12,563 — 5,327 (5,327) 5,530 — 9,214 (9,214) 18,093 $ — (9,214) (9,214) (92) (5,781) (5,689) $ (14,995) (5,781) 84 85 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Land Sales ' Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 1 Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual ' Revenues: Land sale proceeds $ 5,000 177,164. 172,164 22,738 Licenses, permits, fees, and other 1 local revenues Gravel sales 1,000 25,000 1,000 84,092 - 59,092 1,000 Investment income 21,000 24,202 3,202 13,695 Other - 7,305 7,305 79 ' Total revenues 52,000 293,763 241,763 37,512 Expenditures: General government: ' Personnel services Contracted services 11,494 4,550 11,500 373 (6) 4,177 11,500 5,496 Support goods and services 35,956 18,460 17,496 16,714 Total expenditures 52,000 30,333 21,667 33,710 Excess of revenues over expenditures - 263,430 263,430 3,802 Fund balance, at beginning of year 718,083 714,281 Fund balance, at end of year $ 981,513 718,083 85 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Buildings and Grounds Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Revenues: Rental income Investment income Other Total revenues Expenditures: General government: School buildings Borough building Mental health center Parks operation and maintenance Total expenditures Deficiency of revenues under expenditures Other financing sources: Transfers in: Facilities Fund Net change in fund balance Fund balance, at beginning of year Fund balance, at end of year 86 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual $ 405,000 418,445 13,445 417,545 3,000 10,483 7,483 5,874 - 156 156 - 408,000 429,084 21,084 423,419 303,000 223,323 79,677 366,007 282,530 310,888 (28,358) 258,301 39,970 31,382 8,588 5,469 22,500 6,772 15,728 11,284 648,000 572,365 75,635 641,061 (240,000) (143,281) 96,719 (217,642) 212,000 140,560 (71,440) 208,880 $ (28,000) (2,721) 25,279 (8,762) 326,394 335,156 $ 323,673 326,394 86 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Woodland Acres Street Light Service Area Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 87 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues: Investment income $ 500 620 120 480 Expenditures: General government: Support goods and services 4,030 5,660 (1,630) 5,475 Capital outlay 970 — 970 — Total expenditures 5,000 5,660 (660) 5,475 Deficiency of revenues over expenditures $ (4,500) (5,040) (540) (4,995) Fund balance, at beginning of year 18,711 23,706 Fund balance, at end of year $ 13,671 18,711 87 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Trinity Acres Street Light Service Area Schedule of Revenues, Expenditures, and Changes in Fund Deficit Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 88 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues: Property taxes $ 3,600 3,892 292 3,721 Expenditures: General government: Personnel services 655 — 655 — Support goods and services 2,945 1,822 1,123 1,773 Capital outlay — — — — Total expenditures 3,600 1,822 1,778 1,773 Excess of revenues over expenditures $ — 2,070 2,070 1,948 Fund deficit, at beginning of year (3,637) (5,585) Fund deficit, at end of year $ (1,567) (3,637) 88 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Kodiak Arts Council Schedule of Revenues, Expenditures, and Changes in Fund Deficit Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 2006 Revenues: Licenses, permits, fees, and other local revenues: Reimbursement from Kodiak Arts Council Expenditures: General government: Personnel services Fringe benefits Support goods and services Total expenditures Deficiency of revenues over expenditures Fund deficit, at beginning of year Fund deficit, at end of year Variance with Final Budget Final Positive Budget Actual (Negative) 2005 Actual $ 56,910 60,423 3,513 56,704 44,410 45,659 (1,249) 45,874 12,500 15,471 (2,971) 12,294 — 423 (423) 490 56,910 61,553 (4,643) 58,658 $ — (1,130) (1,130) (1,954) (2,388) (434) $ (3,518) (2,388) 89 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Tourism Development Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 90 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues: Transient accommodations tax $ 45,000 47,645 2,645 20,886 Investment income — 150 150 25 Total revenues 45,000 47,795 2,795 20,911 Expenditures: Community and economic development: Contributions 45,000 45,000 — 45,000 Excess (deficiency) of revenues over expenditures $ — 2,795 2,795 (24,089) Fund balance, at beginning of year 1,298 25,387 Fund balance, at end of year $ 4,093 1,298 90 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Mission Lake Tide Gate Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues: Property taxes $ 2,460 2,456 (4) 2,456 Expenditures: General government: Personnel services 1,000 365 635 3,941 Professional services — 1,000 (1,000) 715 Support goods and services 200 12 188 1,354 Capital outlay 1,260 — 1,260 — Total expenditures 2,460 1,377 1,083 6,010 Excess (deficiency) of revenues over expenditures $ — 1,079 1,079 (3,554) Fund balance, at beginning of year 4,101 7,655 Fund balance, at end of year $ 5,180 4,101 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Fern Fuller Trust Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Revenues: Fuller Trust proceeds Expenditures: General government: Distributions to beneficiaries Support goods and services Total expenditures Excess of revenues over expenditures Other financing uses: Transfers out: Hospial Facilities Enterprise Fund Net change in fund balance Fund balance, at beginning of year Fund balance, at end of year 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual $ 75,000 75,000 — 75,000 8,500 8,500 — 22,500 — 127 (127) 47 8,500 8,627 (127) 22,547 66,500 66,373 (127) 52,453 (66,500) (66,500) $ — (127) 198,995 $ 198,868 (127) 52,453 146,542 198,995 92 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 KODIAK ISLAND BOROUGH Nonmajor Special Revenue Funds Trinity Acres Paving Schedule of Revenues, Expenditures, and Changes in Fund Balance (Deficit) Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 7] 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues: Special assessments $ 22,140 42,171 20,031 — Interest — 43 43 — Total revenues 22,140 42,214 20,074 — Expenditures: General government: Support goods and services 14,230 38 14,192 225 Debt service: Interest 7,910 — 7,910 — Total expenditures 22,140 38 22,102 225 Excess of revenues over expenditures — 42,176 42,176 (225) Other financing uses: Transfers out: Various Borough Capital Projects — — (216,508) Net other financing uses — — — (216,508) Net change in fund balance $ — 42,176 42,176 (216,733) Fund deficit, at beginning of year (216,733) — Fund deficit, at end of year $ (174,557) (216,733) 7] 1 rj� DEBT SERVICE FUNDS F 1 i L' 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 Other Balance Sheets June 30, 2006 (With financial information at June 30, 2005) 2006 2005 Equity in central treasury Total liabilities Fund balance: Unreserved Assets Liabilities and Fund Balances $ 158,409 158,409 $ 158,409 158,409 ., KODIAK ISLAND BOROUGH Debt Service Funds Other Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Year ended June 30, 2006 (With financial information at June 30, 2005) 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Revenues Expenditures — Excess of revenues over expenditures $ — Fund balances, at beginning of year Fund balances, at end of year 158,409 $ 158,409 158,409 158,409 95 NONMAJOR 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. KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds Combining Balance Sheet June 30, 2006 (With summarized financial information at June 30, 2005) Assets Equity in central treasury Temporary investments Receivables: Due from State of Alaska Due From Federal Government Due from other funds Total Liabilities and Fund Balances Liabilities: Accounts payable Retainages payable Due to other funds Total liabilities Fund balances: Unreserved (deficits): Undesignated Total Various Borough State Capital Totals Projects Grants 2006 2005 $ 3,142 150,639 153,781 - 978,549 - 978,549 - - 319,016 319,016 248,832 - 6,355 6,355 6,355 50,000 50,000 - $ 981,691 526,010 1,507,701 255,187 704 6,210 6,914 35,760 - 22,270 22,270 22,270 50,000 492,000 542,000 301,650 50,704 520,480 571,184 359,680 930,987 5,530 936,517 (104,493) $ 981,691 526,010 1,507,701 255,187 96 KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Revenues: Intergovernmental: State sources Federal sources Licenses, permits, fees and other local revenue Investment income Other Total revenues Expenditures: Capital improvements: Schools General Total expenditures Deficiency of revenues over expenditures Other financing sources: Transfers in Net change in fund balances Various State 24,950 12,717 Borough Capital Totals 2,972,174 Projects Grants 2006 2005 (24,928) $ - 34,916 34,916 331,093 - 263,936 263,936 2,586,067 275 - 275 540 18,566 - 18,566 6,057 10,750 - 10,750 - 29,591 298,852 328,443 2,923,757 - 24,950 24,950 12,717 54,519 277,879 332,398 2,972,174 54,519 302,829 357,348 2,984,891 (24,928) (3,977) (28,905) (61,134) - 114,000 114,000 216,508 (24,928) 110,023 85,095 155,374 Fund balances (deficit), at beginning of year 955,915 (104,493) 851,422 696,048 Fund balances, at end of year $ 930,987 5,530 936,517 851,422 97 KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds Various Borough Projects Schedule of Revenues, Expenditures, and Changes in Fund Balance Year ended June 30, 2006 (With financial information for the year ended June 30, 2005) Revenues: Intergovernmental: Federal sources Licenses, permits, fees and other local revenue Investment income Other 2006 275 18,566 10,750 29,591 2005 2,399,055 540 6,057 2,405,652 Total revenues Expenditures: Capital improvements: General Deficiency of revenues over expenditures Other financing sources: Transfers in Net change in fund balance Fund balance, at beginning of year Fund balance, at end of year 54,519 2,460,376 (24,928) (54,724) 216,508 (24,928) 161,784 955,915 794,131 $ 930,987 955,915 98 KODIAK ISLAND BOROUGH Nonmajor Capital Project Funds State Capital Grants Schedule of Revenues, Expenditures, and Changes in Fund Balance (Deficit) Year ended June 30, 2006 (With financial information for the year ended June 30, 2005) Revenues: Intergovernmental: State sources Federal sources Total revenues Expenditures: Capital improvements: Schools General Total expenditures Deficiency of revenues over expenditures Other financing sources: Transfers in Net change in fund balance Fund balance (deficit), at beginning of year Fund balance (deficit), at end of year 2006 2005 $ 34,916 263,936 298,852 24,950 277,879 302,829 331,093 187,012 518,105 12,717 511,798 524,515 (3,977) 114,000 110,023 (6,410) (6,410) (104,493) (98,083) $ 5,530 (104,493) .. = M= M M= M M a M= r r r M s r M M KODIAK ISLAND BOROUGH Capital Projects Funds Supplemental Schedule of Capital Projects Year ended June 30, 2006 Project Expenditures Total Appropriations no. Unencumbered Project Status Prior 2006 expenditures Capital projects - Education: encumbrances balance 130 410 -655 East Elementary Doorway Open $ 4,200 - 00100 430 -696 School Repair KHS Roof Open 126,770 - 01 105 410 -695 Series F Bond HS Roof Repair Open 968,106 - 03103 410 -490 East and Main Paint Open 50,000 - 03105 410 -492 Northstar Road/park design Open 50,000 - 03106 410 -493 KHS Emergency Generator Open 50,000 - 03116 430 -509 School Upgrade Open 125,804 - 03118 430 -512 Chiniak Multi -Use Open 20,000 - 03119 420 -500 HS Swimming Pool Open 6,210,000 - 04101 420 -515 Old Harbor Gym Renovation Open 2,251,315 - 04102 420 -516 Larsen Bay School Repair Open 339,883 - 04103 420 -517 Ouzinkie Gum Renovation Open 1,858,255 - 05006 430 -545 HS Pool Filter Open 60,000 - 05009 420 -515 Repair Spalling Concrete Open 237,918 - 05010 420 -515 KHS Asbestos Floor Removal Open 304,704 - 05011 420 -515 Floor Covering Replacement Open 728,708 - 05012 420 -515 Kodiak High School HVAC Open 250,000 - 05013 420 -515 KHS Exterior Insulation & Windows Open 596,020 - 05014 420 -515 Kodiak HS/MS Cplx Roof Upgrade Open 523,504 - 05015 420 -515 H Voc ed/classroom Reclaimation Open 4,190,000 - 05016 420 -515 East Elementary HV AC Upgrade Open 520,000 - 05017 420 -515 Learning Center Renovation Open 1,182,336 - 05018 420 -515 HS Pool Reclaimation Open 650,1100 - 134 Total education 249,866 21,297,523 249,866 Capital projects - Utilities: - 2,680 00102 410 -698 Bayside Underground Electric Open 22,000 - 2,718 Total utility projects 520,786 22,000 520,786 Capital projects - Health. 8,882 031 t5 4,181,118 Hospital Assessment Needs Open 54,000 - 425 Total health projects 519,575 54,000 Encumbrances Total Expenditures Total Unexpended Current Unencumbered appropriations Prior 2006 expenditures balance encumbrances balance 4,200 - - - 4,200 - 4,200 12t"770 91,466 24,950 116,416 10,354 - 10,354 968,106 771,737 - 771,737 196,369 - 196,369 50,000 37,859 - 37,859 12,141 - 12,141 50,000 22,795 5,012 27,807 22,193 - 22,193 50,000 - - - 50,000 - 50,000 125,804 139,561 - 139,561 (13,757) - (13,757) 20,000 8,686 1,260 9,946 10,054 - 10,054 6,210,000 65,720 171,154 236,874 5,973,126 - 5,973,126 2,251,315 430 1,124 1,554 2,249,761 - 2,249,761 339,883 358 481 $39 339,044 - 339,044 1,858,255 647 1,871 2,518 1,855,737 - 1,855,737 60,000 49,698 - 49,698 10,302 21,044 (10,742) 237,918 - 376 376 237,542 - 237,542 304,704 - - - 304,704 - 304,704 728,708 - 6,295 6,295 722,413 - 722,413 250,000 - 134 134 249,866 - 249,866 596,020 - 2,680 2,680 593,340 - 593,340 523,504 - 2,718 2,718 520,786 - 520,786 4,190,000 8,882 8,882 4,181,118 - 4,181,118 520,000 - 425 425 519,575 - 519,575 1,182,336 - 2,836 2,836 1,179,500 - 1,179,500 650,000 650,000 650,000 21,297,523 1,188,957 230,198 1,419,155 19,878,368 21,044 19,857,324 22,000 22,000 22,000 22,000 22,000 22,000 54,000 54,000 54,000 54,000 54,000 54,000 (continued) 100 KODIAK ISLAND BOROUGH Capital Projects Funds Supplemental Schedule of Capital Projects Year ended June 30, 2006 101 = M M r M= M r M M M M M M M M r M M Encumbrances Project Appropriations Total Expenditures Total Unexpended Current Unencumbered no. Project Status Prior 2006 appropriations Prior 2006 expenditures balance encumbrances balance Capital projects - Other: N/A 410 -400 Undesignated Projects Open $ 692,078 - 692,078 18,539 - 18,539 673,539 - 673,539 85 410 -471 Village Metals Removal Open 150,000 - 150,000 121,256 - 121,256 28,744 - - 28,744 114 410 -642 State Airport Improvements Open 11,000 - 11,000 60 - 60 10,940 - 10,940 146 410 -663 BMX Bike Trail Open 68,920 - 68,920 49,278 - 49,278 19,642 - 19,642 164 430 -645 Waste Management Imp Open 1,741,400 - 1,741,400 936,714 - 936,714 804,686 - 804,686 173 410 -683 Bayside Classroom Add Open 75,000 - 75,000 48,199 - 48,199 26,801 - 26,801 174 410 -684 Bayside Storage/Bay Add Open 400,000 - 400,000 3,020 - 3,020 396,980 - 396,980 177 430 -687 Anton Larsen Boat Ramp Open 560,000 60,000 620,000 595,407 1,579 596,986 23,014 - 23,014 0308 430 -518 Homeland Security Open - - - - - - - 02107 430 -648 ADF &G Research Study Open 200,000 - 200,000 114,295 8,706 123,001 76,999 - 76,999 03108 410 -495 Borough Building Parking Open 50,000 - 50,000 - 50,000 - 50,000 03109 410 -496 Borough Air Handling Open 10,000 - 10,000 - - - 10,000 - 10,000 03110 410 -497 KIB emergency Generator Open 20,000 - 20,000 2,353 - 2,353 17,647 - 17,647 03111 110 -498 KIB Security Doors Open 8,000 - 8,000 - - - 8,000 - 8,000 03114 430 -507 CIAP Grant Open 189,985 130,000 319,985 75,308 114,678 189,986 129,999 - 129,999 04106 430 -518 SHSGP Grant Open 138,151 - 138,151 52,851 69,933 122,784 15,367 - 15,367 05001 410 -546 Survey Fiber Optic Pass Thru Open 2,473,694 - 2,473,694 2,403,507 - 2,403,507 70,187 - 70,187 05002 420 -519 Earthquake Evaluation Project Open 500,000 - 500,000 48,083 233,038 281,121 218,879 - 218,879 05003 430 -542 Kodiak Cadastral Open 40,000 - 40,000 53,752 20,335 74,087 (34,087) - (34,087) 05005 430 -544 AK Coastal Management Open 46,000 - 46,000 47,733 - 47,733 (1,733) - - (1,733) 03120 410 -624 Women's Bay Community Plan Open 33,380 - 33,380 22,380 12 22,392 10,988 - 10,989 05004 430 -543 Womens Bay Drainage Open - 25,000 25,000 19,630 5,370 25,000 Total - capital projects other 7,407,608 215,000 7,622,608 4,612,365 453,651 5,066,016 2,556,592 2,556,592 Total all capital projects $ 28,781,131 215,000 28,996,131 5,801,322 683,849 6,485,171 22,510,960 21,044 22,489,916 NOTE. This schedule inclues expenditures from major capital project funds, nonmajor capital project funds and matching costs recorded in the General Fund. 101 = M M r M= M r M M M M M M M M r M M 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 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. The 911 Service Fund accounts for funds collected from phone charges and pays for a 911 emergency system. L 1 I KODIAK ISLAND BOROUGH Enterprise Funds Municipal Solid Waste Collection and Disposal Schedule of Revenues, Expenses, and Changes in Fund Equity Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Operating income (loss) Other income (expense): Interest income Interest expense Income (loss) before transfers Operating revenues: Solid waste collection Solid waste disposal Variance with Other Operating expenses: Final Budget Personnel services Final Refuse collection Positive Refuse disposal Budget Professional services 1 Maintenance and repairs Landfill closure and postclosure costs 2,720,454 Depreciation 2,184,612 General and administration 944,835 Recycling services 956,087 Contributions Operating income (loss) Other income (expense): Interest income Interest expense Income (loss) before transfers Other financing sources: Transfers in - 6,450 6,450 Net change in fund equity $ (11,000) 704,302 715,302 (184,861) Fund equity, beginning of year 3,160,795 3,345,656 Fund equity, end of year $ 3,865,097 3,160,795 102 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual $ 2,378,060 2,720,454 342,394 2,184,612 1,111,000 944,835 (166,165) 956,087 - 409,595 409,595 1,157 3,489,060 4,074,884 585,824 3,141,856 603,360 711,039 (107,679) 596,385 1,400,000 1,352,618 47,382 1,418,830 306,000 306,150 (150) 355,995 190,000 261,073 (71,073) 207,282 36,000 44,700 (8,700) 35,505 250,000 245,006 4,994 255,498 305,120 245,510 59,610 208,330 226,580 185,099 41,481 153,555 96,000 90,000 6,000 73,001 10,000 5,258 4,742 9,853 3,423,060 3,446,453 (23,393) 3,314,234 66,000 628,431 562,431 (172,378) 13,000 69,421 56,421 35,631 (90,0 - 90,000 (48,114) (11,000 697,852 708,852 184,861) Other financing sources: Transfers in - 6,450 6,450 Net change in fund equity $ (11,000) 704,302 715,302 (184,861) Fund equity, beginning of year 3,160,795 3,345,656 Fund equity, end of year $ 3,865,097 3,160,795 102 KODIAK ISLAND BOROUGH Enterprise Funds Hospital Facilities Schedule of Revenues, Expenses, and Changes in Fund Equity Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 2006 Operating revenues: Lease income Operating expenses: Personnel services Maintenance and repairs Depreciation General and administration Operating (loss) Other income (expense): Loss on disposal of capital assets Contribution to Providence Hospital Interest income Interest expense Loss before transfers Other financing sources (uses): Transfers in Transfers out Net other financing (uses) Net change in fund equity Fund equity, beginning of year Fund equity, end of year Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual $ 720,000 1,153,333 433,333 1,153,333 — 5 (5,000) 6,969 — 2,667 (2,667) 19,360 1,276,560 1,077,047 199,513 1,23 8,064 — 10,810 (10,810) 10,810 1,276,560 1,095,524 181,036 1,275,203 (556,560) 57,809 614,369 (121,870) (17,700) (150,000) (59,060) (59,059) (615,620) (168,950) (17,700) — (150,000) — 84 1 (69,784) 446,670 (191,570) 66,500 (320,230) (320,230) (320,230) (253,730) $ (935,850) (422,680) 18,291,176 $ 17,868,496 66,500 125,000 — (295,602) 66,500 (170,602) 513,170 (362,172) 18,653,348 18,291,176 103 1 1 1 t 1 1 1 it Ll 1 I� t✓ KODIAK ISLAND BOROUGH Enterprise Funds Kodiak Fisheries Research Center Schedule of Revenues, Expenses, and Changes in Fund Equity Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) Operating revenues: Rents and royalties Operating expenses: Personnel services Depreciation General and administration: Cleaning and janitorial Heating Electrical Plumbing Air conditioning Elevators Miscellaneous Operating income (loss) Other income (expense): Investment income Interest expense Net change in fund equity Fund equity, beginning of year Fund equity, end of year 1 104 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual $ 1,366,800 1,572,474 205,674 1,566,686 166,270 235,147 (68,877) 226,317 744,294 745,037 (743) 793,562 47,000 35,338 11,662 37,487 102,000 138,951 (36,951) 114,966 185,500 176,484 9,016 156,285 77,240 12,936 64,304 13,643 2,000 173 1,827 - 2,000 2,042 (42) 2,387 108,830 63,992 44,838 67,328 1,435,134 1,410,100 25,034 1,411,975 (68,334) 162,374 230,708 154,711 60,000 92,471 32,471 35,097 (446,780) (446,775) 5 (466,813) $ (455,114) (191,930) 263,184 (277,005) 11,13 0,220 11,407,225 $ 10,938,290 11,130,220 1 104 KODIAK ISLAND BOROUGH Enterprise Funds 911 Services Fund Schedule of Revenues, Expenses, and Changes in Fund Equity Budget and Actual Year ended June 30, 2006 (With summarized financial information for the year ended June 30, 2005) 105 2006 Variance with Final Budget Final Positive 2005 Budget Actual (Negative) Actual Operating revenues: Customer charges $ 69,000 65,614 (3,386) 26,721 Operating expenses: Personnel services 10,500 3,000 7,500 3,000 Miscellaneous — 194 (194) — Telephone services 58,500 54,000 4,500 66,178 69,000 57,194 11,806 69,178 Operating income (loss) $ — 8,420 8,420 (42,457) Fund equity, beginning of year 32,644 75,101 Fund equity, end of year $ 41,064 32,644 105 KODIAK ISLAND BOROUGH SUMMARY OF BONDED DEBT SERVICE REQUIREMENTS TO MATURITY June 30, 2006 Annual principal and interest requirements on General Obligation Refunding and Construction Bonds Year Principal Interest Total 2007 1,770,000 955,281 2,725,281 2008 2,185,000 1,261,058 3,446,058 2009 2,280, 000 1,167,551 3,447, 551 2010 2,370,000 1,069,969 3,439,969 2011 2,470,000 966,900 3,436,900 2012 2,220,000 858,045 3,078,045 2013 2,310,000 765,996 3,075,996 2014 2,405,000 669,361 3,074,361 2015 965,000 567,921 1,532,921 2016 1,000, 000 528,621 1,528,621 2017 1,040,000 487,586 1,527,586 2018 1,080,000 444,345 1,524,345 2019 1,130,000 397,224 1,527,224 2020 1,180,000 346,024 1,526,024 2021 1,230,000 292,064 1,522,064 2022 1,285,000 235,476 1,520,476 2023 1,345,000 174,073 1,519,073 2024 1,410,000 107,126 1,517,126 2025 1,480,000 36,335 1,516,335 $ 31,155,000 $ 11,330,956 $ 42,485,956 106 KODIAK ISLAND BOROUGH GENERAL OBLIGATION REFUNDING BONDS, 1998 SERIES A RETIREMENT SCHEDULE J une 30, 2006 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 is Alaska USA Trust Company. These bonds were issued to refund all but $1,030,000 of the 1994 bond issue, resulting in a total interest savings of $504,859. IEIIN Interest Principal Intereest Fiscal Interest due due due year rate August 15 February 15 February 15 Total 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 $ 1,019,550 $ 9,225,000 $ 1,019,546 $ 11,264,096 IEIIN KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2000 SERIES E RETIREMENT SCHEDULE June 30, 2006 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. Principal Interest Interest Fiscal Interest due year rate August 01 2007 4.88% 20,656 2008 5.00% 17,000 2009 5.00% 13,000 2010 5.00% 8,875 2011 5.00% 4,500 $ 830,000 $ 64,031 $ 64,031 Principal Interest due due February 01 February 01 Total 150,000 20,656 191,313 160,000 17,000 194,000 165,000 13,000 191,000 175,000 8,875 192,750 180,000 4,500 189,000 $ 830,000 $ 64,031 $ 958,063 108 KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2000 SERIES F RETIREMENT SCHEDULE June 30, 2006 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. 111M, Interest Principal Interest Fiscal Interest due due due year rate August 01 February 01 February 01 Total 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 $ 78,005 $ 700,000 $ 78,005 $ 856,010 111M, KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2003 SERIES B RETIREMENT SCHEDULE June 30, 2006 2003 REFUNDING BOND ISSUE This issue, dated March 26, 2003, 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 2003 Series B 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 refund a portion of the 1993 and all of the 1994 Series A General Obligation Bonds. Interest Fiscal Interest due year rate August 15 2007 5.40% 13,519 $ 13,519 Principal due February 15 1,030,000 $ 1,030,000 Interest due February 15 Total 13,519 1,057,038 $ 13,519 $ 1,057,038 I KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2004 SERIES C RETIREMENT SCHEDULE June 30, 2006 2004C BOND ISSUE This issue, dated July 7, 2004 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 2004 Series C 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 fund planning, design, and construction of capital improvements to the Larsen Bay School, Kodiak Middle School and Kodiak High School. The proceeds will also be used to develop an earthquake evaluation plan. Fiscal year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Interest rate 4.250% 4.250% 4.250% 4.250% 4.250% 4.000% 4.000% 4.000% 4.100% 4.250% 4.300% 4.400% 4.500% 4.500% 4.625% 4.750% 4.800% 4.800% Interest due July 1 185,142 178,236 171,011 163,573 155,817 147,636 139,136 130,836 122,136 113,136 103,501 93,194 82,229 70,569 58,082 45,032 31,041 15,960 Principal due July 1 325,000 340,000 350,000 365,000 385,000 400,000 415,000 435,000 450,000 470,000 485,000 510,000 530,000 555,000 580,000 605,000 635,000 665,000 $ 2,006,265 $ 8,500,000 Interst due January 1 178,236 171,011 163,573 155,817 147,636 139,136 130,836 122,136 113,136 103,501 93,194 82,229 70,569 58,082 45,032 31,041 15,960 $ 1,821,124 Total 688,378 689,246 684,584 684,390 688,453 686,771 684,971 687,971 685,271 686,636 681,695 685,424 682,799 683,651 683,114 681,073 682,001 680,960 1 J 1 r 1 1 F $ 12,327,389 1 ' ' KODIAK ISLAND BOROUGH GENERAL OBLIGATION BOND, 2004 SERIES D RETIREMENT SCHEDULE June 30, 2006 2004D BOND ISSUE ' This issue, dated December 1, 2004, 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 2004 Series D 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 fund the acquisition and construction of school capital improvements in the Borough, including a new school pool and the Kodiak High School Voc Ed /Classroom reclamation. Interest due Principal due Interst due May Fiscal year Interest rate November 1 November 1 1 Total 2007 3.00% 223,563 410,000 217,412 850,975 2008 3.00% 217,413 420,000 211,113 848,525 2009 3.00% 211,113 435,000 204,588 850,700 2010 3.00% 204,588 445,000 197,913 847,500 2011 3.50% 197,913 460,000 189,863 847,775 2012 3.50% 189,863 475,000 181,550 846,413 2013 3.50% 181,550 490,000 172,975 844,525 ' 2014 4.00% 172,975 510,000 162,775 845,750 2015 4.00% 162,775 530,000 152,175 844,950 2016 4.00% 152,175 550,000 141,175 843,350 ' 2017 4.00% 141,175 570,000 129,775 840,950 2018 4.00% 129,775 595,000 117,875 842,650 ' 2019 4.50% 117,875 620,000 103,925 841,800 2020 4.50% 103,925 650,000 89,300 843,225 2021 4.50% 89,300 675,000 74,113 838,413 ' 2022 4.50% 74,113 705,000 58,250 837,363 2023 5.00% 58,250 740,000 39,750 838,000 2024 5.00% 39,750 775,000 20,375 835,125 2025 5.00% 20,375 815,000 - 835,375 $ 2,688,463 $ 10,870,000 $ 2,464,900 $ 16,023,362 1 1 112 1 1 I � I I� i P 11 STATISTICAL SECTION Statistical Tables provide report users with a better historical perspective in assessing current financial status and trends of the Borough. KODIAK ISLAND BOROUGH Kodiak, Alaska Net Assets by Component Last Two Fiscal Years (accrual basis of accounting) Fiscal Year Governmental Activities Invested in capital assets, net of related debt Unrestricted Total govermnmental activities net assets Business -type activities Invested in capital assets, net of related debt Unrestricted Total business -type activities net assets Primary government Invested in capital assets, net of related debt Unrestricted Total primary government net assets 2005 $ 61,154,204 45,052,197 $ 106,206,401 $ 39,878,785 (7,263,950) $ 32,614,835 $ 101,032,989 37,788,247 $ 138,821,236 Source: Borough general ledger 2006 $ 62,716,326 45,653,357 $ 108,369,683 $ 38,588,510 (5,875,563) $ 32,712,947 $ 101,304,836 39,777,794 $ 141,082,630 113 KODIAK ISLAND BOROUGH Kodiak, Alaska Changes in Net Assets Last Two Fiscal Years (accrual basis of accounting) Expenses Governmental activities: General government Emergency preparedness Community and economic development Health and sanitation Education, culture, and recreation Fire services Maintenance and operations Service district maintenance Fern Fuller trust Education, culture, and recreation Interest on long -term debt Total governmental activities expenses Business -type activities: Municipal solid waste collection and disposal Hospital facilities Kodiak fisheries research center 911 services Total business -type activities expenses Total component unit school district expenses Total primary government expenses Program Revenues Governmental activities: Charges for services: General government Community and economic development Education, culture, and recreation Fire services Maintenance and operations Service district maintenance Primary and secondary education Operating grants and contributions Capital grants Total governmental activities program revenues Fiscal Year 2005 2006 $ 3,466,289 25,850 509,680 365,072 185,993 491,172 3,175,997 347,934 22,547 10,207,757 1,101,598 19,899,889 3,362,348 1,344,987 1,878,788 69,178 6,655,301 33,466,016 3,984,390 8,598 784,002 403,866 164,053 336,385 10,831,588 18,212,971 3,446,453 1,304,583 1,856,875 57,194 6,665,105 35,990,593 $ 26,555,190 $ 24,878,076 $ 161,621 $ 311,802 21,886 — 56,704 108,218 14,244 — 191,665 — 20,000 20,000 — 95,025 721,453 1,240,547 2,917,160 298,852 4,104,733 2,074,444 (continued) 114 1 1 �I KODIAK ISLAND BOROUGH Kodiak, Alaska Changes in Net Assets Last Two Fiscal Years (accrual basis of accounting) Fiscal Year 2005 Business -type activities: Charges for services: Municipal solid waste collection and disposal Hospital facilities 911 services Kodiak fisheries research center Total business -type activities program revenues Component unit activities Charges for services: Operating grants and contributions Total component unit program revenues Total primary government program revenues Net(expense) /revenue Governmental activities Business -type activities Component unit activities Total primary government net expense General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes Severance taxes Unrestricted grants and contributions Investment earnings Miscellaneous Transfers Total governmental activities Business -type activities: Investment earnings Miscellaneous Transfers Total business -type activities Component unit school district: Unrestricted grants and contributions Investment earnings Support from primary government Miscellaneous Total component unit activities Total primary government 3,141,856 1,153,333 26,721 1,566,686 1� QQU {oA 2006 3,665,289 1,153,333 65,614 1,572,474 6,456,710 226,645 223,579 5,004,756 4,803,773 5,231,401 5,027,352 $ 9,993,329 $ 8,531,154 $ (15,795,156) (766,705) (28,234,615) $ (16,561,861) $ (16,138,527) (208,395) (30,963,241) $ (16,346,922) $ 9,063,729 1,005,539 2,384,538 1,750,321 55,692 1 7!1 AM $ 14,430,421 70,812 (170,602) (99,790) 18,429,664 165 8,332,440 637,696 27,399,965 $ 14,330,631 $ 9,807,551 1,186,908 3,482,351 2,798,391 779,328 247,280 $ 18,301,809 161,892 391,895 (247,280) 306,507 20,709,643 271 8,632,440 390,093 29,732,447 $ 18,608,316 (continued) 115 KODIAK ISLAND BOROUGH Kodiak, Alaska Changes in Net Assets Last Two Fiscal Years (accrual basis of accounting) Fis cal Year Change in Net Assets Governmental activities Business -type activities Component unit Total primary government 2005 2006 $ (1,364,735) $ 2,163,282 (866,495) 98,112 (834,650) (1,230,794) $ (2,231,230) $ 2,261,394 RM KODIAK ISLAND BOROUGH Kodiak, Alaska Fund Balances of Governmental Funds Last Two Fiscal Years (modified accrual basis of accounting) General fund Reserved Unreserved Total general fund All other governmental funds Reserved Unreserved, reported in: Secial revenue funds Debt service funds Capital projects funds Total all other governmental funds Fiscal Year 2005 2006 1,813,013 2,026,113 $ 1,813,013 $ 2,026,113 $ 8,090,822 $ 7,742,903 34,055,115 (189,824) 21,412,256 $ 63,368,369 36,837,895 76,898 20,810,819 $ 65,468,515 117 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Changes in Fund Balances of Governmental Funds Last Three Fiscal Years (modified accrual basis of accounting) Fiscal Y ear 2004 Revenues Taxes Intergovernmental State sources Federal sources Land sale proceeds Severance taxes Licenes, permits, fees, and other local revenues Other revenues Investment earnings Total revenues Expenditures General government Fire services Emergency preparedness Community and economic development Health and sanitation department Education, culture, and recreation Maintenance and operations Service district maintenance Primary and secondary education Fern Fuller trust Capital outlay Schools General Debt service Principal Interest Other charges -bond issuance costs Total expenditures Excess of revenues over (under) expenditures Other Financing Sources (Uses) Proceeds from sales of bonds Bond premium Transfers in Transfers out Total other financing sources(uses) Net change in fund balances Debt service as a percentage of noncapital expenditures $ 8,016,323 2,121,420 1,245,337 9,206 799,693 764,913 222,837 866,143 14,045,872 2,118,166 864,703 48,755 536,111 331,884 217,759 567,094 425,712 7,721,706 24,500 131,324 656,423 1,260,167 644,046 15,548,350 (1,502,478) 2005 $ 9,063,729 2,169,803 3,853,348 22,738 1,005,539 692,540 75,841 1,772,893 18,656,431 2006 $ 9,833,846 3,368,491 1,766,926 177,164 1,186,908 820,286 125,040 2,803,466 20,082,127 2,713,633 425,506 23,521 509,680 329,738 185,993 698,119 347,934 7,973,035 22,547 68,109 2,972,174 1,784,859 984,766 43,661 19,083,275 (426,844) 3,950,927 6,098 784,002 363,520 161,633 336,385 8,430,840 464,142 332,398 1,814,553 1,584,763 18,229,261 1,852,866 I It I i i - 20,350,000 - - 121,590 - 3,605,614 1,800,212 1,751,182 (1,961,054) (1,629,610) (1,503,902) 1,644,560 20,642,192 247,280 $ 142,082 $ 20,215,348 $ 2,100,146 14.81 % 20.93 % 24.22 i 118 ' 1 1 l I I 1 t 1 u KODIAK ISLAND BOROUGH Kodiak, Alaska General Revenues by Source(a) Last Ten Fiscal Years Licenses, Inter - Fiscal Governmental Investment Year Taxes Revenue 1997 $ 5,582,037 1 1998 7,589,595 $ 9,672 $ 1999 7,694,387 333,243 2000 8,057,781 2,055,803 2001 8,135,184 92,609 2002 8,017,344 129,829 2003 8,028,513 583,633 2004 8,165,326 3,397,240 2005 9,378,816 153,727 2006 10,257,023 1,000,000 (a) Includes general fund only. 2,010,431. Source: Borough general ledger 850,000 161,621 1,925,405 l I I 1 t 1 u KODIAK ISLAND BOROUGH Kodiak, Alaska General Revenues by Source(a) Last Ten Fiscal Years Licenses, Inter - Permits Governmental Investment Operating and fees Revenue Income Transfers $ 108,483 $ 2,396,272 $ 371,414 $ 9,672 $ 86,138 2,739,075 333,243 — 86,523 2,055,803 238,515 32,632 92,609 1,770,038 358,351 129,829 95,129 2,135,483 583,633 18,154 95,857 3,397,240 294,675 200,000 153,727 2,683,460 171,532 1,000,000 187,898 2,010,431. 105,812 850,000 161,621 1,925,405 265,392 — 171,962 2,369,185 469,913 — 119 Miscellaneous Revenue 44,945 140,901 Total $ 8,467,878 10,748,051 10,107,860 10,408,608 11,012,528 12,146,017 12,037,232 11,319,467 11,731,234 13,268,083 KODIAK ISLAND BOROUGH Kodiak, Alaska Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Last Ten Years Assessed Values $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 120 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Ratio of total assessed to Fiscal Real property Personal property Total total Year Ended Assessed Full value Assessed Full value Assessed Full value full value June 30, value determination value determination value determination determination 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 594,870,287 613,787,700 120,828,748 322,947,400 715,699,035 936,735,100 76.40 2001 626,906,341 641,419,200 121,849,192 336,548,600 748,755,533 977,967,800 76.56 2002 635,931,458 654,299,600 116,117,602 323,479,600 752,049,060 977,779,200 76.91 2003 642,995,612 679,949,700 117,456,245 323,755,200 760,451,857 1,003,704,900 75.76 2004 660,040,861 687,078,300 110,941,506 307,988,900 770,982,367 995,067,200 77.48 2005 678,425,914 731,267,000 105,481,537 300,735,600 783,907,451 1,032,002,600 75.96 2006 692,572,845 786,373,800 106,206,504 309,114,600 798,779,349 1,095,488,400 72.92 Source: Borough assessment and tax records and State full value determination Note: Property in Kodiak Island Bourough is reassesed once every three years.Property is assessed at actual value; therefore, the assessed values are equal to actual value.Tax rates are per $1,000 of assessed value. Full value determination includes all exempted property located in the borough. Last Ten Years Assessed Values $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 120 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Note: The maximum mill rate allowed by State code is 30 mills ' Overlapping rates are those of local governments that apply to property owners within the City of Kodiak. = Overlapping rates are those which apply to property owners located within Special taxing districts in the borough.They do not apply to every property owner in the Borough. 121 t-ontrioutnons to the , jcnooi tnstrtct Fiscal Assessed KODIAK ISLAND BOROUGH Millage Year Value Contribution Equivalent 1997 654,134,651 4,839,887 7.40 1998 Kodiak, Alaska 5,715,361 8.39 1999 686,856,392 6,492,876 9.45 2000 715,699,035 6,678,652 9.33 Direct and Overlapping Property Tax Rates and 748,755,533 6,913,926 9.23 2002 752,049,060 7,550,506 10.04 2003 760,451,857 7,767,661 Contributions to the School District 2004 770,982,367 8,498,082 11.02 2005 783,907,451 8,521,286 10.87 2006 798,779,349 (per $1000 of Assessed Value) 10.85 Source: Borough ordinance and assessment Last Ten Fiscal Years Direct Rate Overlapping Rates Woodland' Trinity' Mission' Fiscal Acres Islands Lake Year Borough City' Street Street Tide Road Services Areas' Fire Areas' Ended Basic of Lighting Lighting Gate Monashka Service Bay View Womens Service Womens Service June 30, Rate Kodiak Area Area Area Bay District 1 Road Bay Area No. 1 Bay Area No. 2 1997 6.75 2.00 0.50 - - 1.50 1.75 1.00 2.00 1.50 1.25 - 1998 6.75 2.00 0.50 - - 1.50 0.75 1.00 2.00 1.50 1.25 - 1999 9.25 2.00 - - - 1.50 0.50 1.00 2.00 1.50 1.25 - 2000 9.25 2.00 - - - 1.50 0.50 1.00 2.00 1.50 1.25 - 2001 9.25 2.00 - - - 1.50 1.00 1.00 2.00 1.50 1.25 - 2002 9.25 2.00 - - - 1.50 1.25 1.00 2.00 1.50 1.25 - 2003 9.25 2.00 - - - 1.50 1.00 1.00 2.00 1.50 1.25 - 2004 9.25 2.00 - 0.50 1.00 1.50 1.00 1.00 2.00 1.50 1.25 - 2005 10.25 2.00 - 0.50 1.00 1.50 1.00 1.00 2.00 1.50 1.25 1.25 2006 11.00 2.00 - 0.50 1.00 2.50 1.25 1.00 200 1.50 1.25 1.25 Note: The maximum mill rate allowed by State code is 30 mills ' Overlapping rates are those of local governments that apply to property owners within the City of Kodiak. = Overlapping rates are those which apply to property owners located within Special taxing districts in the borough.They do not apply to every property owner in the Borough. 121 t-ontrioutnons to the , jcnooi tnstrtct Fiscal Assessed Amount of Millage Year Value Contribution Equivalent 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 748,755,533 6,913,926 9.23 2002 752,049,060 7,550,506 10.04 2003 760,451,857 7,767,661 10.21 2004 770,982,367 8,498,082 11.02 2005 783,907,451 8,521,286 10.87 2006 798,779,349 8,670,440 10.85 Source: Borough ordinance and assessment Note: The maximum mill rate allowed by State code is 30 mills ' Overlapping rates are those of local governments that apply to property owners within the City of Kodiak. = Overlapping rates are those which apply to property owners located within Special taxing districts in the borough.They do not apply to every property owner in the Borough. 121 KODIAK ISLAND BOROUGH Kodiak, Alaska Principal Property Tax Payers Current Year and Nine Years Ago 122 2006 1997 Percentage Percentage Taxable of Total Borough Taxable of Total Borough Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Ocean Beauty Seafoods Inc $ 16,730,796 1 2.1% $ 10,263,993 4 1.5% Brechan Enterprises, Inc. 14,026,652 2 1.8% — Westward Seafoods, Inc 11,474,840 3 1.4% — international Seafoods of Alaska 9,442,721 4 1.2% 14,062,209 1 2.1% Alaska Communications Systems 9,620,360 5 1.2% — Wal -Mart Real Estate Bus Trust 9,258,892 6 1.2% — Horizon Lines of Alaska, LLC(a) 7,416,188 7 0.9% 9,437,400 6 1.4% Mill Bay Plaza Assoc Ltd 7,138,400 8 0.9% — North Pacific Seafoods(b) 7,003,916 9 0.9% 10,120,028 5 1.5% Kodiak Fishmeal Company 6,582,582 10 0.8% 9,091,653 8 1.3% Tyson Seafoods 13,829,068 2 2.0% Western Alaska Fisheries 11,299,304 3 1.7% T.U. of the Northland 10,299,432 7 1.5% Safeway/MBPA 8,099,123 9 1.2% Leisnoi 7,035,900 10 1.0% Total $ 98,695,347 12.4% $ 103,538,110 15.2% Source: Borough tax records. (a) in 1997 company name was Sea -Land Services (b) Alaska Pacific Seafoods is combined with North Pacific Seafoods in 2006. It was ranked in 5th place in 1997. 122 1 1 1 C] 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Property Tax Levies and Collections Last Ten Fiscal Years Collections Total Collections to Date Collected within the Fiscal Year Taxes Levied Fiscal Year of the Levy Ended for the $ 96,490 Percentage June 30, Fiscal Year Amount of Levy 1997 $ 5,576,773 $ 5,478,939 98.2 1998 7,384,490 7,121,678 96.4 1999 7,704,172 7,575,491 98.3 2000 7,743,649 7,507,018 96.9 2001 8,164,127 7,912,859 96.9 2002 8,411,173 8,313,881 98.8 2003 8,395,117 8,167,437 97.3 2004 8,462,404 8,125,629 96.0 2005 8,785,412 8,139,198 92.6 2006 10,166,967 9,901,965 97.4 Collections Total Collections to Date in Subsequent Percentage Years Amount of Levy $ 96,490 $ 5,575,429 100.0 % 77,576 7,199,254 97.5 314,367 7,889,858 102.4 175,066 7,682,084 99.2 204,458 8,117,317 99.4 362,377 8,676,258 103.2 178,885 8,346,322 99.4 69,831 8,195,460 96.8 521,516 8,660,714 98.6 — 9,901,965 97.4 Source: Borough general ledger 123 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Ratios of Net General Bonded Debt Outstanding , Last Ten Fiscal Years Less Debt Net General Fiscal Assessed Gross Service Bonded Debt Fund Bonded Bebt Capita Per , year Population Value 1997 14,058 (a) $ 654,134,651 $ 21,660,000 $ 549,569 $ 21,110,431 $ 1,502 1998 14,181 (a) 681,342,892 20,020,000 432,942 19,587,058 1,381 1999 13,848 (a) 686,856,392 18,910,000 340,159 18,569,841 1,341 2000 13,989 (a) 715,699,035 17,025,000 272,651 16,752,349 1,198 2001 13,913 (a) 748,755,533 17,690,000 344,942 17,345,058 1,247 2002 14,167 (a) 752,049,060 16,615,000 448,065 16,166,935 1,141 2003 13,874 (a) 760,451,857 15,620,000 17,879 15,602,121 1,125 2004 13,811 (a) 770,982,367 14,385,000 33,915 14,351,085 1,039 , 2005 13,466 (b) 783,907,451 32,965,000 (348,233) 33,313,233 2,474 2006 13,638 (c) 798,779,349 31,155,000 (81,511) 31,236,511 2,290 Sources: Information obtained from assessment records and Borough general ledger except as otherwise noted. Program. , (a) Information obtained from State of Alaska, Department of Community and Regional Affairs, Certified Population for Revenue Sharing (b) Information obtained from State of Alaska, Department of Commerce, Community and Economic Development, Community Database. (c) Information obtained from State of Alaska, Department of Labor, Economic Information , Note: Detail regarding the borough's outstanding debt can be found in the notes to the financial statements. All outstanding debt is General Bonded Debt. Il ` n L 124 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Computation of Direct and Overlapping Debt June 30, 2006 (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) Per Aslaska Statute 29.45.090 there is a limit of 30 mills for ad valorem taxes. Per Alaska Statute 29.45. 100 the limitition on maximum mill rate does not apply to taxes levied to pay bonds. Sources: Borough general ledger and City of Kodiak records. 125 Percentage Kodiak Island Net debt applicable to this Borough outstanding governmental share of (a) unit (b) debt (c) Kodiak Island Borough: General obligation bonds $ 31,155,000 100% $ 31,155,000 City of Kodiak: Revenue bonds 620,000 100% 620,000 Total $ 31,775,000 $ 31,775,000 (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) Per Aslaska Statute 29.45.090 there is a limit of 30 mills for ad valorem taxes. Per Alaska Statute 29.45. 100 the limitition on maximum mill rate does not apply to taxes levied to pay bonds. Sources: Borough general ledger and City of Kodiak records. 125 KODIAK ISLAND BOROUGH Kodiak, Alaska Legal Debt Margin Information Last Two Fiscal Years 2005 2006 Assessed value $ 783,907,451 798,779,349 Plus exempt property 32,491,840 45,783,490 Total $ 816,399,291 844,562,839 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. 126 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures and Transfers Last Ten Fiscal Years (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 127 Total general Ratio of governmental debt service Fiscal Interest Total debt expenditures to general year Principal (a) and fees service and transfers expenditures 1997 1,565,833 1,239,996 2,805,829 9,391,162 29.9 1998 1,660,833 1,141,366 2,802,199 11,393,083 24.6 1999 1,915,833 853,652 2,769,485 10,957,892 253 2000 1,905,833 858,164 2,763,997 9,827,488 28.1 2001 2,015,834 746,994 2,762,828 10,735,365 25.7 2002 1,095,833 853,543 1,949,376 10,726,858 18.2 2003 1,140,833 803,224 1,944,057 13,071,957 14.9 2004 1,255,833 667,744 1,923,577 11,014,093 17.5 2005 1,780,417 983,195 2,763,612 12,027,717 23.0 2006 1,814,553 1,583,488 3,398,041 13,054,983 26.0 (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 127 Sources: (a) State of Alaska, DCRA certified population. (b) State of Alaska Department of education using www.eed.state.ak.us/stats/0uickFacts/ADM.pd (c) Department of Labor using www.almis.labor.state.us Note: Per Capita Personal Income and Personal Income figures are not yet available for 2004 to 2006. 128 KODIAK ISLAND BOROUGH , Kodiak, Alaska Demographic and Economic Statistics Last Ten Fiscal Years , Per Capita Percentage Fiscal Personal Personal School Unemployment year Population (a) Income (c) Income (c) Enrollment (b) Rate (c) 1997 14,058 336,233,000 23,725 2,862 9.1 1998 14,181 337,634,000 24,378 2,851 5.0 1999 13,848 347,630,000 25,264 2,798 5.1 2000 13,989 373,164,000 26,695 2,810 13.4 , 2001 13,913 382,227,000 27,794 2,774 10.9 2002 14,167 381,413,000 27,873 2,821 18.2 2003 2004 13,874 393,604,000 13,811 NA 29,479 NA 2,750 2,677 10.3 10.6 ' 2005 13,466 NA NA 2,678 9.5 2006 13,638 NA NA 2,718 6.7 Sources: (a) State of Alaska, DCRA certified population. (b) State of Alaska Department of education using www.eed.state.ak.us/stats/0uickFacts/ADM.pd (c) Department of Labor using www.almis.labor.state.us Note: Per Capita Personal Income and Personal Income figures are not yet available for 2004 to 2006. 128 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 KODIAK ISLAND BOROUGH Kodiak, Alaska Average Monthly Employment & Earnings 2005' Total Industries Private Ownership Total Government Private Goods - Producing Private Service - Providing Number of Business by Company Size 2006' Business Size 250 to 499 employees 100 to 249 employees 50 to 99 employees 20 to 49 employees 10 to 19 employees 'Data from http: / /almis.labor.state.ak.us Note: No principal employer data available from department of labor 129 Average Monthly Employment 5,381 4,042 1,339 1,659 2,384 Number 10 2 59 Average Monthly Earnings $ 2,871 2,757 3,214 3,489 2,248 KODIAK ISLAND BOROUGH MISCELLANEOUS STATISTICAL DATA Last Ten Fiscal Years 1997 1998 Land area - square miles 7,130 7,130 Miles of improved street 21.6 21.6 Building permits: Permits issued Value of buildings (thousands) Fire Protection: 1999 2000 7,130 7,130 21.6 25.4 148 182 192 210 7,822 24,302 15,007 11,806 Number of fire stations 2 2 2 Number of employees 1 1 1 Police Protection: none (provided by the City of Kodiak within the city limits and by the State of Alaska outside the city boundaries.) Recreation: Parks (number of acres) Facilities: Number of playgrounds Number of swimming pools Public Education: Number of schools Kodiak Area Elementary Kodiak Area Middle School Kodiak Area High School Village Schools (a) Number of support personnel (b) Number of teachers (d) Number of students Number of Municipal Employees Elections: Number of registered voters Number voting in last election Percent of registered voters (a) The majority of Village Schools are grades K -12 (b) All non - teaching employees. 2 1 224 224 224 224 16 16 16 16 4 4 4 4 1 1 1 1 1 1 1 1 9 8 7 8 101 156 163 158 199 202 208 200 2,862 2,851 2,798 2,810 61.5 42.75 37.25 37 9,350 9,957 10,389 10,100 2,120 2,076 1,972 3,861 23% 21% 19% 38% (continued) 130 1 2001 2002 2003 2004 2005 2006 7,130 7,130 7,130 7,130 7,130 7,130 25.4 25.6 25.6 25.6 25.6 25.6 231 220 213 223 205 222 12,882 11,934 14,623 17,658 12,689 11,928 2 2 2 2 2 2 1 1 1 1 1 1 224 223 223 223 223 223 16 15 15 15 15 15 1 1 1 1 1 1 4 1 4 l 4 1 4 1 4 1 4 1 1 1 1 1 1 1 8 7 7 7 7 8 143.27 136.76 136.76 200.99 146.25 150.62 178.6 184.3 172.5 227.14 216.89 205.63 2,774 2,821 2,750 2,677 2,678 2,728 37 39 39 41 41 41 10,421 10,085 10,101 9,671 9,282 9,300 ' 2,521 2,914 2,181 2,599 2,181 2,200 24% 29% 22% 27% 23% 24% ' (c) In FY96 this was changed to full time equivalents (d) School district personnel figures include staffing from the General Fund and Grants. Grant staffing varies from year to year depending on the number of grants received. 131 *Assessed value. Source: Borough assessing records, City of Kodiak building department and local bankers. 132 1 1 1 1 1 1 KODIAK ISLAND BOROUGH ' Kodiak, Alaska Property Value, Construction, and Bank Deposits Last Ten Fiscal Years ' Construction Property Value* Commercial Residential Deposits Fiscal No. of No. of in local year permits Value permits Value banks Commercial Residential Nontaxable 36 1,559,938 112 6,262,439 108,926,259 157,911,064 391,545,900 2,404,872,414 1998 39 16,676,612 149 8,103,624 107,973,700 161,787,264 411,955,734 2,420,596,952 1999 51 6,784,879 141 8,222,313 123,206,000 160,921,064 416,630,645 2,420,601,099 2000 54 2,720,259 156 9,086,074 120,465,733 172,709,507 422,160,780 2,475,199,399 2001 33 1,379,673 198 11,501,804 119,637,923 193,882,996 433,023,355 2,475,199,399 ' 2002 30 1,494,337 190 10,439,985 117,241,908 199,689,615 443,305,997 1,994,297,545 2003 47 2,915,740 166 11,707,269 129,546,701 206,386,964 463,419,197 1,996,235,045 2004 44 2,859,775 179 14,798,679 128,062,000 207,611,182 480,581,831 1,736,191,891 2005 47 2,097,983 158 10,590,784 135,302,544 210,328,700 482,244,145 1,666,526,546 2006 30 1,555,718 192 10,372,416 141,199,395 213,258,488 497,589,811 1,663,156,146 *Assessed value. Source: Borough assessing records, City of Kodiak building department and local bankers. 132 1 1 1 1 1 1