FY2008-08 Facilities Fund InvestmentKODIAK ISLAND BOROUGH
ORDINANCE NO. FY 2008 -08
Introduced by Manager Gifford
Requested by Borough Assembly
Drafted by: Finance Director
Introduced: 09/20/2007
Public hearing: 10/04/2007
Postponed: 11/15/2007
Amended: 12/06/2007
Adopted: 12/06/2007
AN ORDINANCE OF THE KODIAK ISLAND BOROUGH AMENDING KODIAK ISLAND
BOROUGH CODE OF ORDINANCES TITLE 3 REVENUE AND FINANCE CHAPTER 3.04
PUBLIC FINANCE — MANAGEMENT AND ACCOUNTING SECTION 3.04.020 PERMISSIBLE
INVESTMENTS SECTION 3.04.022 COLLATERAL REQUIREMENTS AND SECTION
3.04.051 FACILITIES FUND
WHEREAS, the Borough Code pertaining to investments has become dated; and
WHEREAS, the list of allowed investments could be more clearly defined; and
WHEREAS, collateral is not available on all investment types, only repurchase agreements
and certificates of deposit; and
WHEREAS, because the principal amount of the investments held in the facilities fund is not
used for daily operations, investments can be held for a longer term and can have larger swings
in value; and
WHEREAS, generally, over a long period of time equities (stocks) show a greater return than
government securities; and
WHEREAS, because of GASB 31, the value of the Borough investments change on our
general ledger even though it will not change over the life of an investment; and
WHEREAS, because of these changes in value, both up and down, it is better to use a
percent of market value method to distribute earning of the fund than a percent of previous
years' earnings;
NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND
BOROUGH THAT:
Section 1: This ordinance is of a general and permanent nature and shall become a part of
the Kodiak Island Borough Code of Ordinances.
Section 2: Title 3 Revenue and Finance Chapter 3.04 Public Finance — Management and
Accounting Section 3.04.020 Permissible Investments is hereby amended as
follows:
Kodiak Island Borough, Alaska Ordinance No. FY2008 -08
Page 1 of 3
Sections:
3.04.010 General treasury management.
3.04.015 Authority.
3.04.020 Permissible investments.
3.04.021 Terms defined.
3.04.023
3.04.026
3.04.027
3.04.030
3.04.040
3.04.050
3.04.051
3.04.052
3.04.053
3.04.056
3.04.056
3.04.057
3.04.060
3.04.065
3.04.070
Section 3:
Collateral safekeeping.
Diversification of investments.
Investment records.
Deposit of school money.
Basis of accounting.
Funds.
Facilities fund.
Education fund.
Fern Fuller fund.
Land sale fund.
Penalties.
General fixed assets.
Distribution of funds.
Review of service fees.
Post audit.
Chapter 3.04
PUBLIC FINANCE — MANAGEMENT AND ACCOUNTING
3.04.020 Permissible investments. The tr asurer finance director shall invest money only in
the following types of security instruments:
A. Bonds, notes, or other obligations, direct or otherwise, of the United States Government;
B. Bonds and other evidence of indebtedness of the state of Alaska, or any municipality, or
political subdivision of the state of Alaska;
C. Savings accounts, certificates of deposit, banker's acceptances, repurchase
agreements, and such other legal security instruments; or
D. The Alaska Municipal League Investment Pool, Inc. made in accordance with the terms
of that Pool's "Common Investment Agreement ".
Title 3 Revenue and Finance Chapter 3.04 Public Finance — Management and
Accounting Section 3.04.022 Collateral requirements is hereby deleted as
follows:
1
insured. Collateral will be required to the extent that the investment amount exceeds the limits
of FDIC or othcr applicable insurance. The following collateral shall apply:
A. State and municipal Required for
bonds and notes: 100% of Deposit 100% of market
project notes Alaska
issues 100% of market
3. Other states (Baa
rating or better) 120% of market
B. U.S. Government obligations:
1. Direct obligations 100% of market
2. Federal agency
issues 100% of market
3. Federally guarantee
project notes other 100% of market (Ord. 82 15 O(A) (part), 1082).
Kodiak Island Borough, Alaska Ordinance No. FY2008 -08
Page 2 of 3
Section 4: Title 3 Revenue and Finance Chapter 3.04 Public Finance — Management and
Accounting Section 3.04.051 Facilities Fund is hereby amended as follows:
3.04.051 Facilities Fund.
A. The facilities fund is established as a separate special revenue fund which is distinct
from the general land sale fund and all other funds. The fund consists of all proceeds received
from the sale of Shuyak Island property to the Exxon Valdez Oil Spill Trustee Council. All
income from the fund shall be deposited to the fund. The assembly may, by ordinance, make
additional appropriations to the fund at any time. Any additional funds added to the fund, aside
of Shuyak Island proceeds, shall become part of the fund as a whole and subject to the
regulations of the facilities fund.
B. The fund may be invested only as provided in section 3.04.020 of this chapter.
The fund may not be appropriated or spent, except as provided in this section. The earnings or
principle principal shall at no time run or supplement the running of government except as
specified in this section.
C. The assembly may, by ordinance, make a one (1) time appropriation of six million
(6,000,000) dollars for the financing or construction of the Near Island Research Facility (Kodiak
on Near Island.
D. The excess income of the fund is defined as eighty five (85) percent of the annual
investment income from the fund. The excess income of the fund is available for appropriation
by the assembly in the fiscal year following the year in which the income is earned. The excess
income of the fund may be appropriated only for the following purposes..
1. maintenance and repair of existing borough facilities,
2. insurance paid by the borough for borough buildings,
3. upgrade and reconstruction of existing facilities, or
4. debt service on general obligation bonds issued for facilities construction - -up to
fifty (50) percent of excess may be used for this purpose.
F. A portion of the fund may be appropriated for another purpose only upon approval of an
ordinance ratified by a two- thirds (2/3) majority of the qualified voters at a regular or special
election.
ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
THIS SIXTH DAY OF DECEMBER, 2007
ATTEST: Jer +T e M. Selby, Borough Mayor
Nova . J .vier, CMC, B. ough Clerk
KODIAK ISLAND BOROUGH
Kodiak Island Borough, Alaska Ordinance No. FY2008 -08
Page 3 of 3