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2006-08-05 Work SessionASSEMBLY WORK SESSION August 5, 2006 - 9:00 a.m. Kodiak Fisheries Research Center Main Conference Room AGENDA CITIZENS' COMMENTS (limited to three minutes per speaker) ITEMS FOR DISCUSSION 1. Use of Facilities Fund MANAGER'S COMMENTS CLERK'S COMMENTS MAYOR'S COMMENTS ASSEMBLYMEMBER COMMENTS ON LEAVE Ranney Aug 10 -12 (AML) Selby Aug 10 -12 (AML) Branson Sept 7 -15 Oct 25-Jan 17 (Sabbatical) 3.04.050 -- 3.04.052 3.04.050 Funds. Funds as required will be established, which should include, but are not limited to, the following: A. Kodiak Island Borough general fund; B. Kodiak Island Borough payroll fund; C. Tobacco tax fund; D. Debt service funds; E. Capital projects funds; F. Fire service district fund; G. Sewer and water utility fund; H. Other enterprise funds as needed; and I. Land sale fund. (Ord. 83 -24 -0 (part), 1983; Ord. 71 -5 -0 (part), 1971; prior code Ch. 7 subch. 1 §5). Section 3.04.051 Facilities fund. A. The facilities fund is established as a separate investment 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 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 Fisheries Research Center) as an addition to the Fishery Industrial Technology Center complex 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. E. 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. (Ord. 96 -13 §2, 1996; Ord. 94 -17 -0 §2, 1994). 3.04.052 Education fund. A. The education fund is established as a separate investment fund which is distinct from all other funds. The fund consists of the net proceeds received from the Exxon Valdez oil spill litigation punitive damages after payment of all expenses of litigation and oil spill clean-up. All 3 -10 (KIB 06/2004) Supp. #40 MEMO TO: FROM: DATE: SUBJECT: Mayor and Assembly Nova Javier, CMC, and Borough Clerk July 13, 2006 Facilities Fund History The Assembly requested that I compile documentation regarding the history of Shuyak /Facilities fund for the August 5, 2006 meeting at the Fisheries Research Center. The following are attached to this memo page. Please let me know if you need additional information. Thank you. Page 1 Page 3 Page 5 Page 6 Page 7 Page 9 Page 11 Page 13 Page 18 Page 20 Page 22 Page 24 Res. 1994 -05 Res. 1994 -41 Res. 1995 -46 KIBC 3.04.051 Ord. 1994 -17 August 18, 1994 August 18, 1994 September 1, 1994 Ord. 1996 -13 October 3, 1996 October 3, 1996 October 17, 1996 N:ICLASSY\FACILITIES FUNDICOVER MEMO.doc Kodiak Island Borough Office of the Borough Clerk 710 Mill Bay Road Kodiak, Alaska 99615 Phone (907) 486 -9310 Fax (907) 486 -9391 KODIAK ISLAND BOROUGH CLERK'S OFFICE COPIED TO: ASSEMBLY VI MANAGER V OTHER Approving Disposal, for Fair Market Value, of all Borough Land on Shuyak Island to the Exxon Valdez Trustee Council. Approving Disposal of All Borough Land on Shuyak Island to the State of Alaska. Authorizing Sale of Shuyak Island to Exxon Valdez Trustee Council By Contract. Facilities Fund Code Section Amending Title 3 Revenue and Finance of the Kodiak Island Borough Code of Ordinances by Adding Section 3.04.051 Facilities Fund. Back -up Information from the Assembly Packet Regular Meeting Minutes Regular Meeting Minutes Amending Title 3 Revenue and Finance of the Kodiak Island Borough Code of Ordinances By Amending Section 3.04.051 Facilities Fund. Back -up Information from the Assembly Packet Regular Meeting Minutes Regular Meeting Minutes Page 27 Permissible Investments (All ordinances that amended KIBC 3.04.020) Page 28 Ord. 1971 -05 Page 32 Ord. 1982 -15 A Page 34 Ord. 1984 -30 Page 36 Page 37 Amending the Kodiak Island Borough Code of Ordinances and Resolutions by Adding Thereto Chapter 7 Dealing with Public Finance. Amending the Investment Policy of the Kodiak Island Borough. Directing the Implementation of Certain Investment Policies by the Borough and Providing for an Effective Date. Ord. 1990 -35 Amending Kodiak Island Borough Code Regarding Permissible Investments. Ord. 1992 -29 Authorizing the Kodiak Island Borough to Authorize the Kodiak Island Borough Investment in the Investment Pool. Contracts (The following are available upon request from the Clerk's Office.) Contract No. 94 -16 Shuyak Island Appraisal with Thomas Dunagan NTE $17,000. (9 pages) Contract No. 94 -38 Agreement for Sale and Purchase of Interests in Lands on Shuyak Island. (6 pages) Contract No. 95 -70 Agreement for Sale and Purchase of Interests in Lands on Shuyak Island. (77 pages) N: \CLWSSY\FACILITIES FUND \COVER MEMO.doc Kodiak Island emeual6 Alaska KODIAK ISLAND BOROUGH RESOLUTION NO. 94-05 PAGE- 1 - n Introduced by: Mayor Selby Requested by: Planning & Zoning Commission Drafted by: Community Development Department Introduced: 02/03/94 Adopted: 02/03/94 A RESOLUTION APPROVING DISPOSAL, FOR FAIR MARKET VALUE, OF ALL BOROUGH LAND ON SHUYAK ISLAND TO THE EXXON VALDEZ TRUSTEE COUNCIL i WHEREAS, about 27,000 acres of Kodiak Island Borough land on Shuyak Island has been identified as high value habitat that will benefit the recovery of resources and services injured by the Exxon Valdez oil spill, and; WHEREAS, the Borough Administration has determined that all Borough land on Shuyak Island is surplus to the needs of Borough residents, so long as the land is maintained in public ownership, and; WHEREAS, the proposed use of the land acquired by the Trustee Council (as Indicated in the Memorandum of Agreement and Consent Decree executed between the United States and the State of Alaska and approved and entered by Judge Holland on August 28, 1991) is consistent with the goals and objectives of the 1986 Shuyak Island Comprehensive Plan, and; WHEREAS, compensation for Shuyak Island Land, at fair market value, will benefit all residents of the Kodiak Island Borough consistent with the intent of the state land entitlement at the time of incorporation, and; WHEREAS, the Kodiak Island Borough Assembly, having reviewed the pertinent facts relating to this land disposal, approves the disposal of all Borough interest in Shuyak Island Lands for fair market value; NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT: Section 1: The disposal, for fair market value, of all Borough Lands on Shuyak Island, as described in the State of Alaska final decision document dated May 4, 1982 and amended by ADL 37988, dated September 27, 1985, to the EXXON VALDEZ TRUSTEE COUNCIL is approved, subject to Assembly review and approval of the final settlement agreement. R000kdon No. 9405 Pogo 1 of 2 Section 2: The findings of fact adopted by the Planning and Zoning Commission supporting this disposal are hereby confirmed: 1. The disposal will ensure the land is available to the public for recreation purposes, consistent with the goals and objectives of the 1986 Shuyak island Comprehensive Plan. Kern* S.d Borough, Ah.h. v.1 2. Disposal of Shuyak Island land to the Trustee Council will provide valuable habitat to support and augment lands damaged by the Exxon Valdez oil spill. 3. Disposal of Shuyak Island land to the Trustee Council will eliminate the possibility of disposing Borough land on Shuyak to private ownership. .1 4. Disposal of Shuyak Island land to the Trustee Council precludes the possibility of resource extractive development, such as mining, logging, and quarrying. 5. Disposal of Shuyak Island land will benefit Borough residents and fulfill the intent of the Borough's land entitlement at the time of incorporation. 6. The use of the land for habitat protection and recreation are public property uses that are beneficial to the Borough. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS THIRD DAY OF FEBRUARY, 1994 ATTEST: (D 071410- T, AniCA Donna F. Smith, Borough Clerk PAGE- 2 - KODIAK ISLAND BOROUGH aiding • Nicer Resolution No. 94-05 P.po 2 of 2 r KODIAK ISLAND BOROUGH RESOLUTION NO. 94-41 Introduced by: Mayor Selby Requested by: Mayor Selby Drafted: Borough Attorney Introduced: 12/08/94 Adopted: 12/08/94 A RESOLUTION APPROVING DISPOSAL OF ALL BOROUGH LAND ON SHUYAK ISLAND TO THE STATE OF ALASKA WHEREAS, the Kodiak Island Borough has received title to certain land on Shuyak Island and has an absolute right to receive a patent from the State to other land on Shuyak Island, consisting in total of approximately 26.665 acres more or less (hereinafter "Land "); and WHEREAS, the Land has been identified as high value habitat that will benefit the recovery of resources and services injured by the Exxon Valdez oil spill; and WHEREAS, the Borough administration has determined that the Land is surplus to the needs of Borough residents, so long as the Land is maintained in public ownership; and WHEREAS, the proposed use of the Land to be acquired through the process of the Exxon Valdez 011 Spill Trustee Council Is consistent with the goals and objectives of the 1986 Shuyak Island Comprehensive Plan; and WHEREAS, compensation for the Shuyak Island Land will benefit all residents of the Kodiak Island Borough consistent with the intent of the State land entitlement at the time of incorporation; and WHEREAS, the use of the land for habitat protection and recreation are public purposes that are beneficial to the Borough within the meaning of Kodiak Island Borough Code 18.20.100; and WHEREAS, the Assembly has adopted Resolution No. 94-05 approving the disposal of the Land for fair market value, subject to Assembly review and approval of the final settlement agreement; and WHEREAS, the Trustee Council, through the USDA Forest Service, has provided an appraisal estimating the market value of the land as of September 1, 1994 to be $27 million; and Kodiak Island Borough, Alaska PAGE- 3 - Resolution No. 94 -41 Page 1 of 2 1 2 0 fl WHEREAS, the Kodiak Island Borough Assembly has enacted an ordinance to establish a Facilities Fund In which the proceeds from the sale of these Lands are to be deposited. As part of this ordinance, funding was authorized by the Assembly for the Kodiak Fishery Industrial Technology Center; and WHEREAS, the Trustee Council adopted a resolution on December 2, 1994 to provide the funds for the State of Alaska to offer to purchase the Land in accordance with the Agreement for Sale and Purchase of Interests in Lands on Shuvak Island (hereinafter "Purchase Agreement ") for a price equal to the final approved appraised fair market value of the land plus 20% of the final approved appraised fair market value, except that the price may not exceed $42 million; and WHEREAS, the Kodiak Island Borough Assembly, having reviewed the pertinent facts relating to this land disposal, approves the disposal of the Land for the price of $42 million in accordance with the Purchase Agreement; NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT: Section 1: The disposal of all Kodiak Island Borough lands on Shuyak Island to the State of Alaska for the purchase price of $42 million is hereby approved on the terms and conditions of the Purchase Agreement. Section 2: The mayor is authorized to execute the Purchase Agreement and all other documents required for the completion of this transfer. ATTEST: ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS EIGHTH DAY OF DECEMBER, 1994 onna F. Smith, CMC, Borough Clerk Kodiak Island Borough, Alaska KODIAK ISLAND BOROUGH e PAGE 4 - me M. Selby, Boro 7i—a. 2t � Mary A. onroe, Presiding Officer Resolution No. 9441 Page 2 of 2 A RESOLUTION APPROVING A PURCHASE AGREEMENT FOR DISPOSAL OF ALL BOROUGH LAND ON SHUYAK ISLAND TO THE STATE OF ALASKA WHEREAS, the Assembly previously adopted Resolution No. 94-41 approving disposal of all Kodiak Island Borough lands on Shuyak Island (hereinafter "Land ") to the State of Alaska for the purchase price of $42 million; and WHEREAS, the Fxxnn Valde, Oil Spill Trustee Council adopted a resolution on December 5, 1995 to provide the funds for the State of Alaska to offer to purchase the Land in accordance with the Agreement fnr Sale and Purchase of Interacts in and on Shuyak Island (hereinafter "Purchase Agreement ") for a price of $42 million payable in installments over a period of seven years; and WHEREAS, the Kodiak Island Borough Assembly, having reviewed the pertinent facts relating to this land disposal, approves the disposal of the Land for the price of $42 million in accordance with the Purchase Agreement; NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH that the disposal of all Kodiak Island Borough lands on Shuyak Island to the State of Alaska for the purchase price of *42 million is hereby approved on the terms and conditions for the Purchase Agreement. NOW, THEREFORE, BE IT FURTHER RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH that the mayor, or his designee, is authorized to execute the Purchase Agreement and all other documents required for the completion of this transfer. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS TWENTY -FIRST DAY OF DECEMBER, 1995. ATTEST: (D0714 c L/ , 4 yl- LAS pp i CMG— onna F. Smith, CMC, Borough Clerk Kodiak Island Borough, Alaska KODIAK ISLAND BOROUGH RESOLUTION NO. 95 -46 PAGE 7 - KODIAK ISLAND BOROUG e *me M. Selby ough L. St Introduced by: Mayor Selby Requested by: Mayor Selby Drafted: Borough Attorney Introduced: 12/21/95 Adopted: 12/21/95 `nn ayo . ' ve , - esiding Officer Resolution No. 95-46 Page 1 of 1 KODIAK ISLAND BOROUGH CODE, CHAPTER 3 REVENUE AND FINANCE Section 3.04.051 Facilities fund. A. The facilities fund is established as a separate investment 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? 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 Fisheries Research Center) as an addition to the Fishery Industrial Technology Center complex 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. E. 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. (Ord. 96 -13 §2, 1996; Ord. 94 -17 -0 §2, 1994). PAGE - Section 1: Section 2: Kodiak Island Borough. Alaska 7 KODIAK ISLAND BOROUGH ORDINANCE NO. 94 -17 Introduced by: Requested by: Drafted by: Introduced: Public Hearing: Adopted: AN ORDINANCE ESTABLISHING AN EDUCATION AND HEALTH FUND BY AMENDING TITLE 3 REVENUE AND FINANCE OF THE KODIAK ISLAND BOROUGH CODE OF ORDINANCES BY ADDING SECTION 3.04.051 FACILITIES FUND Mayor Selby Mayor Selby Attorney 08/18/94 09/01/94 09/01/94 WHEREAS, there will be proceeds from the sale of Shuyak Island; and WHEREAS, the establishment of a permanent fund for facilities in the Kodiak Island Borough would provide revenue for future buildings; and WHEREAS, a facilities fund would be a major factor in controlling and establishing the property tax rates in the Kodiak Island Borough for many years; NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT: This ordinance is of a general and permanent nature and shall be a part of the Kodiak Island Borough Code of Ordinances. Title 3, Chapter 3.04 is amended by adding Section 3.04.051 as follows: Section 3.04.051 Facilities fund. A. The facilities fund is established as a separate investment fund which is distinct from the general land sale fund. 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. B. The fund may be invested only as provided in section 3.04.020. The fund may not be appropriated or spent, except as provided in this section. C. The assembly may, by ordinance, make a one time appropriation of a portion of the fund for the financing or construction of an addition to the Fishery Industrial Technology Center. Ordinance No. 94-17 Page 1 of 2 D. The excess income of the fund is defined as eighty -five percent (85 %) 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. debt service on bonds issued for facilities construction, 2. upgrade and reconstruction of existing facilities 3. maintenance and repair of existing facilities E. A portion of the fund may be appropriated for another purpose only upon approval of an ordinance ratified by a two- thirds majority of the qualified voters at a regular or special election. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS FIRST DAY OF SEPTEMBER, 1994 ATTEST: (Dom a • %irwt! Donna F. Smith, CMC, Borough Clerk Kodiak Island Borough, Alaska M. Selby, Borou Jack L. S • tl KODIAK ISLAND BOROUGH Jero iding Officer Ordinance No. 94-17 Paps 2 of 2 TO: Jerome Selby, Mayor % \a° Kodiak Island Borough ( t/� 'tJ FROM: Joel H. Bolger V3\ DATE: August 10, 1994 RE: Facilities Fund Our Rle No. 4702-506 MEMORANDUM I have revised the proposed ordinance to make reference to the facf that the funds received from the Exxon Valdez 0i1 Spill Trustee Council are separate from the General Land Sale Fund. I have also revised the language of the ordinance to authorize the Assembly to make an appropriation by ordinance for the financing or construction of an addition to the Fishery Industrial Technology Center. Here is my revision: 3.04.051 Facilities Fund. A. The Facilities Fund is established as a separate investment fund which is distinct from the General Land Sale Fund, The Fund consists of all proceeds received from the sale of Shuyak Island property to the Exxon Valdez Oii Spill Trustee Council. All income from the Fund shall be deposited to the Fund. The Assembly may make additional appropriations to the Fund at any time by ordinance. B. The Fund may be invested only as provided in Section 3.04.020. The Fund may not be appropriated or spent, except as provided in this section. C. The Assembly may, by ordinance, appropriate a portion of the Fund for the financing or construction of an addition to the Fishery Industrial Technology Center. D. The Excess Income of the Fund is defined as ninety percent (90 %) 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 eamed. The Excess Income of the Fund may be appropriated only for the following purposes: 4702'506M.002 - 1, Debt service on bonds issued for facilities construction. 2. Construction of new facilities, 3. Maintenance and repair of existing facilities. 4, Insurance for facilities. . E. A portion of the Fund may be appropriated for another purpose only upon approval of an ordinance ratified by a two- thirds majority of the qualified voters at a regular or special election. Please let me know if the ordinance can be improved or modified in any way. cc: Jack MacFadand, Presiding Otter to 2. Ordinance No. 94 -17 Establishing a ORDINANCE Facilities Fund by Amending Title 3 Revenue NO. 94 -17 and Finance of the Kodiak Island Borough Code of Ordinances by Adding Section 3.04.51 Facilities Fund. Presented for consideration was ordinance No. 94 -17 that, if adopted, established a facilities fund for proceeds received from the sale of Shuyak Island to the Exxon Valdez Oil Spill Trustee Council. MILLIGAN, moved to advance seconded by AUSTERMAN Ordinance No. 94 -17 to publi^ hearing on Septa. r 1, 1994. Mayor Selby said funds from the Shuy_,_ Island sale would be placed in a permanent maintenance, renovation and building fund for the future. He said the intent was to place ten percent of the interest earnings in the corpus for inflation proofing. He said building maintenance was important and was generally eliminated when budgets were cut. He noted the fund would also pay debt service on bonds to construct new facilities. He said there was an emergency provision that allowed corpus funds to be spent if approved by a two - thirds vote of the public. Assemblymember Austerman asked if the Assembly could allocate a portion of the funds for an addition to the Fisheries Industrial Technology Center (FITC). Mayor Selby explained there was discussion at the negotiations to wrap $7,000,000 for the FITC from the trustee council into the Shuyak Island land sale. He said the Trustee Council was supportive but there was concern that the Department of Justice would consider it an inappropriate use of funds. He said bricks and mortar, or construction of buildings was not an appropriate expenditure of the proceeds. He reported that Mr. Frampton from the Department of the interior suggested the Shuyak Island sale be used as a vehicle for completion of the FITC /NOAA facility. Mayor Selby said there was a provision that when funds were received, the Assembly could make a one -time appropriation for the FITC /NOAA facility to the university of Alaska. In response to Assemblymember Austerman's request for clarification, Mayor Selby explained it was made clear to the Trustee Council that the $7,000,000 for the FITC /NOAA facility was in addition to the $35,000 Sh Shuyak Island sale. Regular Assembly Meeting August 18, 1994 `t ) " 9 11 Volume XIX Page 16 Ayes: When Assemblymember Burt questioned whether 10 percent was sufficient for inflation, Mayor Selby outlined that 10 percent of the interest earned would be placed in the corpus and 90 percent could be spent. He added that the Assembly had the ability to allocate additional funds to the corpus. Assemblymember Austerman felt it was wise to set aside funds for future growth and maintenance. Assemblymember Burt agreed but had reservations about constructing new buildings. VOTE ON MOTION TO ADVANCE Noes: None Absent: Gould, Hancock MOTION CARRIED Unanimous 3. Ordinance No. 94 -18 Repealing and ORDINANCE Reenacting Chapter 2.12 Personnel Section NO. 94 -18 of the Kodiak Island Borough Code of ordinances. Presented for consideration was Ordinance No. 94 -18 that, if adopted, repealed and reenacted Kodiak Island Borough Code Chapter 2.12 Personnel Section to comply with state and federal regulations. MONROE, moved to advance seconded by MILLIGAN Ordinance No. 94 -18 to public hearing on September 1, 1994. Mayor Selby said the current Personnel Policy Manual was out -of -date with serious inconsistencies. He commended Rachael Miller, personnel assistant, for drafting the Manual. He said the Personnel Advisory Board reviewed the Manual and unanimously recommended approval. There was no discussion by the Assembly. VOTE ON MOTION TO ADVANCE Ayes: Monroe, Austerman, Burt, Milligan, McFarland Regular Assembly Heating August 18, 1994 '1 Milligan, Monroe, Austerman, Burt, McFarland 12 9 a I Volume XIX Page 17 i.nxxtau Unanimous 2 Ordinance No. 94 -17 Establishing a Facilities f ORDINANCE Fund by Amending Title 3 Revenue and Finance of NO. 94 -17 the Kodiak Island Borough Code of Ordinances by Adding Section 3.04.51 Facilities Fund. Presented for consideration was Ordinance No. 94 -17 which, if adopted, established a facilities fund for proceeds received from the sale of Shuyak Island to the Exxon Valdez Oil Spill Trustee Council. AUSTERMAN, moved to adopt seconded by MILLIGAN Ordinance No. 94 -17. Mayor Selby anticipated the negotiation and sale of Shuyak Island to be consummated by the end of October. He said this was a one -time opportunity for the community to establish a fund for future facilities maintenance. Assemblymember Gould announced his intention to amend the ordinance to delete new facility construction and add upgrade and maintenance of new facilities. He asked Mayor Selby to comment. Mayor Selby did not foresee building a large facility without going to the voters and agreed with Assemblymember Gould because upgrade and maintenance was what he envisioned. He gave as an example an addition to Peterson Elementary School to meet the needs of new residents in homes being built on Aviation Hill. At questions raised by Assemblymember Milligan, Mayor Selby stated the ten percent interest earnings was the low end of mandatory contributions that gave future assemblies more latitude to add monies. When asked by Assemblymember Milligan if the revenues from the fund could be used to offset payments on general obligation bonds, Mayor Selby explained the intent was not to place restrictions on future assemblies. In response to Assemblymember Hancock, Mayor outlined the provision to allow a single appropriation to fund the FITC /NOAA Facility. He added that future draw -downs would be an action of the assembly. Presiding Officer McFarland opened the public hearing. • Stosh Anderson felt the establishment of the fund was a win -win situation. Norm Wooten commended the Mayor and Assembly for taking a position that provided a great opportunity for continued maintenance on school facilities. Regular Assembly Meeting September 1, 1994 13 Volume XLX Page 26 When Assemblymember Milligan asked for his opinion on using the fund to construct new facilities, Mr. Wooten declared he was speaking for himself and not the school board when he offered his opinion that there was some merit in removing new construction in that taxpayers would be more appreciative if they paid for new. facilities. Scott Arndt understood that all funds from the sale of Shuyak Island would go in the fund. He said that, because people used private property for recreation, ten percent of the proceeds should go to the land sale fund to purchase recreational property along the road system. He felt it was not appropriate to spend funds on the FITC /NOAA facility and the question should go before the people for a vote. He agreed with Assemblymember Gould's suggestion to delete construction. He also felt insurance should not be paid from the fund. He thought interest rates could go down and suggested leaving 20 to 30 percent of the interest earnings in the fund. Assemblymember Gould did not see the logic in funding the FITC /NOAA facility. He felt it was a process that should go to the voters because the Assembly was making an exception by funding the FITC /NOAA facility. Presiding officer McFarland said negotiations were proceeding and it was difficult to clarify the specifics. Robert Tucker supported the fund. He was familiar with the cost of building maintenance and supported the idea of deleting new construction. Marcia Oswalt commended the Mayor and Assembly. She supported the idea of supporting the FITC /NOAA facility because fine people would be brought to the community. She was concerned about funding cutbacks at the University of Alaska, Fairbanks. Presiding Officer McFarland closed the public hearing and reconvened the regular meeting. Assemblymember Austerman commended Mayor Selby for drafting the fund document. He agreed with deleting new construction and questioned the insurance. He agreed with Mr. Arndt that recreational property was needed. Presiding Officer McFarland suggested requesting an attorney's opinion on the acquisition of private property for public use. He wondered at potential Regular Assembly Meeting September 1, 1994 a 9 :i rl 4 9 6 l'/ Volume XIX Page 27 / complications and Mayor Selby stated the Trustee Council recommended the fund be kept in tact. Assemblymember Austerman felt it was important to inflation -proof the fund. Assemblymember Gould agreed. He felt 85 percent would allow for a major remodel. He agreed that insurance should be paid by other funds. GOULD, seconded by AUSTERMAN Assemblymember Milligan supported the idea of 85 percent and deleting construction of new facilities. He said he had a problem with deleting 3.04.051D.4 because insurance was not a great expenditure. Presiding Officer McFarland suggested dividing the question by separating the deleting of 3.04.051D.4 in the amendment. GOULD, moved to divide the seconded by AUSTERMAN question by separating the deleting of 3.04.051D.4 from the rest of the question. MOTION CARRIED Unanimous consent * When asked by Presiding Officer McFarland, Mayor Selby gave a synopsis of how the ten percent savings was not complete inflation proofing. The question to amend Ordinance No. 94 -17 Section 2 by deleting the word "ninety" and inserting the word "eighty- five" in 3.04.051D and 3.04.051D.2. by deleting the words: "construction of new facilities" Regular Assembly Meeting September 1, 1994 1 9 9 ,A n n 4 9 6 moved to amend ordinance No. 94 -17 Section 2 by deleting the word "ninety" and inserting the word "eighty -five" in 3.04.051D and 3.04.051D.2. by deleting the words: "construction of new facilities" and inserting the words: "upgrade and reconstruction of existing facilities" and deleting 3.04.051D.4. 16 Volume XIX Page 28 1 7 ' ':1 : 9 5 and inserting the words: "upgrade and reconstruction of existing facilities" was before the Assembly. VOTE ON MOTION TO AMEND Ayes: VOTE ON MOTION TO AMEND Ayes: Regular Assembly Meeting September 1, 1994 Hancock, Milligan, Austerman, Gould, McFarland Noes: Monroe Absent: Burt MOTION CARRIED 5 yes, 1 No The question of deleting 3.04.051D.4 was before the Assembly. Assemblymember Hancock favored deleting insurance for facilities. Assemblymember Milligan felt insurance was an operating expense. When Assemblymember Gould stated his opinion that the fund be dedicated to facilities maintenance, Assemblymember Austerman concurred. Presiding Officer McFarland applauded Mayor Selby, staff and the Borough attorney. He felt diversifying revenue was a major responsibility and commitment for the Assembly. Monroe, Austerman, Gould, Hancock, McFarland Noes: Milligan Absent: Burt MOTION CARRIED 5 Ayes, 1 No Presiding Officer McFarland made a motion to reconsider the vote on Ordinance No. 94-17. Assemblymember Milligan seconded the motion. After a five minute recess at 9:17 p.m., Presiding Officer McFarland reconvened the regular meeting. 14 Volume KIX Page 29 MILLIGAN, seconded by AUSTERMAN VOTE ON MOTION TO AMEND Ayes: Regular Assembly Meeting September 1, 1994 11) . 0 4 9, 4 Presiding Officer McFarland withdrew his motion to reconsider the vote on Ordinance No. 94 -17 with the concurrence of the second. Assemblymember Milligan read from the ordinance to clarify that the Assembly may, by ordinance, make a one -time appropriation of a portion of the fund for construction purposes. moved to amend Ordinance No. 94 -17, by replacing section C with the words: The Assembly may, by ordinance, make a one time appropriation of a portion of the fund for the financing or construction of an addition to the Fishery Industrial Technology Center. Monroe, Austerman, Gould, Hancock, Milligan, McFarland Noes: None Absent: Burt MOTION CARRIED Unanimous VOTE ON MOTION TO ADOPT AS AMENDED Ayes: Austerman, Gould, Hancock Milligan, Monroe,�McFarland Noes: None Absent: Burt MOTION CARRIED Unanimous 17 3. Ordinance No. 94 -18 Repealing and Reenacting ORDINANCE Chapter 2.12 Personnel Section of the Kodiak NO. 94 -18 Island Borough Code of Ordinances. Presented for consideration was Ordinance No. 94 -18 which, if adopted, repealed and reenacted Kodiak Island Borough Code Chapter 2.12 Personnel Section to comply with state and federal regulations. Volume XIX Page 30 Introduced by: Requested by: Drafted by: Introduced: Public Hearing: Amended: Adopted: KODIAK ISLAND BOROUGH ORDINANCE NO. 96 -13 AN ORDINANCE AMENDING TITLE 3 REVENUE AND FINANCE OF THE KODIAK ISLAND BOROUGH CODE OF ORDINANCES BY AMENDING SECTION 3.04.051 FACILITIES FUND Assemblymember Burt Assemblymember Burt Assemblymember Burt and Mayor Selby 10/03/96 10/17/96 10/17/96 10/17/96 WHEREAS, there is established a permanent fund for facilities in the Kodiak Island Borough to provide revenue for future buildings; and WHEREAS, revenue derived from this fund will be used to stabilize and reduce the property taxes in the Kodiak Island Borough; 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 be a part of the Kodiak Island Borough Code of Ordinances. Section 2: Title 3, Chapter 3.04, Section 3.04.051 is amended as follows: Section 3.04.051 Facilities fund. A. The facilities fund is established as a separate investment fund which is distinct from the general land sale fund : , arm 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. .&._..:. B. The fund may be invested only as provided in section 3.04.020. The fund may not be appropriated or spent, except as provided .. in this section. C. The assembly may, by ordinance, make a one time appropriation of a of jor the financing or construction an addition to the Fishery Industrial Technology Center Kodiak Island Borough, Alaska 14 Ordinance No. 98.13 Page 1 of 2 D. The excess income of the fund is defined as eighty -five percent (85 %) 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 �s ems facilities, 2. 3. upgrade and reconstruction of existing facilities, 4. debt service on , bonds issued for facilities construction - E. 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. ATTEST: ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS SEVENTEENTH DAY OF OCTOBER, 1996 onn �01.11lcr t I R a F. Smith, CMC /AAE, Borough Clerk Kodiak Island Borough, Alaska 1R KODIAK ISLAND BOROUGH Jer y s, Presiding Officer Ordinance No. 90 -13 Page 2 of 2 J OEL N. IOLGIDP C. WALT= EDELL• MANNA R. GENTRY AATTNEW 0. JAMIE ALAN L /CI(MfTT EARIN 2. I=DL=' D UNCAN II. MELDS WALT= W. MASON* •ww,w to /LAMS Mb MAGIIMTON SAY Au =CO MONTT =TO MAIM OAR VIA FACSIMILE NO. (907) 486 -9374 AND UNITED STATES MAIL The Honorable Jerome Selby Mayor, Kodiak Island Borough 710 Mill Bay Road Kodiak, AK 99615 Dear Jerome: .1AMIN, EBELL, BOLGER, & GENTRY A PROFESSIONAL CORM:NATION Re: Facilities Fund Our File No. 4702 -506 ATTORNEYS AT LAW 123 CA3OLYN STREET KODIAK.ALASNA 99915 rnLEPNONR: (907) OW FACSIMILE: (907) 4241-1112 REPLY TO IOfDIU( OFFICE September 9, 1996 2a ANCHORAGE OFFICE 12001 STREET, aunt 7d ANCNOIIAIL ALAI/G 11001 TELEPHONE ANO FM (107) 276110( SEATI = OFFICE 200 MUTUAL LIIE IUILDINI 101 VmST AVENUI SIATTLL WASHINGTON Ogle/ TELEP4ON4 (1101)112 -7131 /AOSOILE: (2.011)(11.1-7221 This letter is in response to your question conceming a proposal to amend KIBC 3.04.051.E. This subsection presently provides that the Facilities Fund may be appropriated for other purposes only upon approval of an ordinance ratified by a two - thirds majority of the qualified voters. The proposal would amend this subsection to require such an ordinance to be ratified by a three- fourths majority of the qualified voters. There is not a lot of case law concerning super - majority voting requirements. However, it is fairly clear that the two- thirds majority requirement would be valid. A three- fourths majority would be more questionable. The only case striking down a super - majority approval requirement is Westbrooke v. Mihaly, 471 P.2d 487 (Cal. 1970). In that case the California Supreme Court held that a requirement of a two- thirds majority for public bond issues violated the equal protection clause of the Fourteenth Amendment. The court reasoned that the super - majority requirement violated the one -man, one -vote principle because it gave each negative voter twice the voting power of each affirmative voter. The Honorable Jerome Selby September 9, 1996 Page 2 One year later the United States Supreme Court considered the question in Gordon v. Lance, 403 U.S. 1 (1971). In that case a West Virginia statute provided that political subdivisions could not incur bonded indebtedness or increase tax rates beyond certain limits without approval of sixty percent of the voters. The court rejected the equal protection challenge because the law did not single out any minority for special treatment. However, the court did note in a footnote: 403 U.S. at 8, note 6. "We intimate no view on the constitutionality of a provision requiring unanimity or giving the veto power to a very small group ...' My conclusion from these cases is that the two- thirds majority requirement is probably valid, but at some point a greater super - majority requirement may violate the one -man, one -vote principle. In addition, you should keep in mind that the election requirement can always be amended or repealed by a future assembly. Feel free to give me a call if you have any questions. Sincerely, JAMIN, EBELL, BOLGER & GENTRY JHB:cat cc: Mr. Gary Stevens, Presiding Officer 47021508L.001 21 Joel H. Bolg 4 ayes, 2 noes NO. HUINANCE 96 -13 Ordinance No. 96 -13 Amending Title 3 Revenue and Finance of the Kodiak Island Borough Code of Ordinances by Amending Section 3.04.051 Facilities Fund. Presented for consideration was Ordinance. No. 96 -13 that, if adopted, amended Title 3 to reflect a change in the facilities fund to preserve the fund and maintain its use for property tax relief. Acting Mayor Carlson reported on the need to preserve the fund that was established from the Sale of Shuyak Island for future needs. MOTION CARRIED JOHNSON, seconded by MILLIGAN BURT, seconded by McFARLAND moved to advance Ordinance No. 96 -13 to public hearing on October 17, 1996. move to amend Ordinance No. 96 -13 by deleting item D.1. Assemblymember Burt wanted broader based tax relief. Assemblymember McFarland thought the ordinance should be advanced to public hearing prior to amendments. Assemblymember Milligan had concerns about taxing boats and thought further discussion was needed. Assemblymember Burt felt the ordinance should address school maintenance and not debt service on bonds. VOTE ON MOTION TO AMEND Ayes: Burt Noes: Hancock, Johnson, McFarland, Milligan, Heinrichs Absent: Stevens MOTION FAILED 1 Aye, 5 Noes Assemblymember Milligan felt positive impacts from the Exxon Valdez Trustee Council purchase of Shuyak Island. He thanked Assemblymember Burt for bringing the ordinance forward. Assemblymember McFarland also thanked Assemblymember Burt and highlighted the changes for the listening audience. Assemblymember Burt noted his recommended changes did not include the debt service on government bonds as that was proposed by staff. Regular Assembly Meeting October 3, 1996 21 c t Volume )CU Page 283 Following questions on whether the majority of voters meant those on the rolls or those who voted in the election, the topic was deferred to a work session. VOTE ON MOTION TO ADVANCE Ayes: Johnson, McFarland, Milligan, Burt, Hancock, Heinrichs Noes: None Absent: Stevens ORDINANCE MOTION CARRIED Unanimous NO. 96 -14 3. Regular Assembly Meeting October 3, 1996 Ordinance No. 96 -14 Establishing an Education Fund by Amending Title 3 Revenue and Finance of the Kodiak Island Borough Code of Ordinances by Adding Section 3.04.052 Education Fund. Presented for consideration was Ordinance No. 96 -14 that, if adopted, amended Title 3 for the purpose of establishing a permanent fund for all education programs as a separate investment fund distinct from all other funds. MCFARLAND, seconded by MILLIGAN moved to advance Ordinance No. 96 -14 to public hearing on October 17, 1996. Acting Mayor Carlson explained the need to preserve funds for future education needs. MCFARLAND, seconded by MILLIGAN moved to amend Ordinance No. 96 -14 by amend the last sentence in A. to read: "The assembly will appropriate an initial investment into the fund of $500,000 and make additional appropriations to the fund at any time by ordinance." Assemblymember McFarland felt that the intent of stating a dollar amount would make a commitment. Assemblymember Burt was concerned that the Borough would never receive the funds. lb Volume XXI Page 284 Assemblymember McFarland thought that a future assembly could develop the fund further. He contended that the object was to educate children. Presiding Officer Stevens noted the commitment to fund up to $500,000 was not a firm commitment until it went through the budget process. VOTE ON MOTION TO ADOPT AS AMENDED Ayes: Noes: Burt McFARLAND, seconded by MILLIGAN VOTE ON MOTION TO EXTEND BURT, seconded by MILLIGAN Regular Assembly Meeting October 17, 1996 2q Johnson, McFarland, Milligan, Hancock, Heinrichs, Stevens MOTION COED 6 Ayes, 1 No Presented for consideration was Ordinance No. 96 -13 that, if adopted, amended Title 3 to reflect a change in the facilities fund to preserve the fund and maintain its use for property tax relief. JOHNSON, moved to adopt seconded by McFARLAND Ordinance No. 96 -13. Mayor Selby said the adjustment to the fund would allow maintenance of existing school structures. He outlined the direct benefit to taxpayers. moved to extend the meeting to midnight. MOTION CARRIED Unanimous voice vote Presiding Officer Stevens called for public testimony; hearing and seeing none, he reconvened the regular meeting. moved to amend Ordinance No. 96 -13 by removing item D.1 relating to facilities construction. D. ordinance No. 96 -13 Amending Title 3 Revenue and ORDINANCE Finance of the Kodiak Island Borough Code of NO. 96 -13 Ordinances by Amending Section 3.04.051 Facilities Fund. 4 „, Fs Volume XXII Page 14 Assemblymember Burt felt the funds could cover all needs. Assemblymember Johnson opposed the amendment because he felt a way to save on property taxes was in place. In response to Assemblymember Milligan, Mayor Selby explained the $1 million debt service on current bond indebtedness for 15 years. He thought eliminating options was a disservice in balancing general fund budgets and flexibility in the mill levy. Assemblymember Burt saw no difference because he felt paying insurance did not reduce the mill rate. VOTE ON MOTION TO AMEND Ayes: Noes: MOTION FAILED HEINRICHS, seconded by MILLIGAN MILLIGAN, seconded by HANCOCK Burt VOTE ON MOTION TO AMEND THE AMENDMENT Ayes: Noes: MOTION CARRIED None VOTE ON MOTION TO AMEND AS AMENDED Ayes: Regular Assembly Meeting October 17, 1996 McFarland, Milligan, Hancock, Heinrichs, Johnson, Stevens 1 Aye, 6 Noes moved to amend Ordinance No. 96 -13 by adding to item D.1. the words: "...up to fifty percent of excess may be used for this purpose ". moved to amend the amendment by switching item D.1 with item D.4. Milligan, Burt, Hancock, Heinrichs, Johnson, McFarland, Stevens Unanimous Hancock, Heinrichs, Johnson, McFarland, Milligan, Stevens Volume VCR Page 15 Noes: MOTION CARRIED VOTE ON MOTION TO ADOPT AS AMENDED Ayes: Noes: MOTION CARRIED VOTE ON MOTION TO ADOPT Ayes: Noes: MOTION CARRIED MESSAGES BR01I MAYOR Regular Assembly Meeting October 17, 1996 Burt 6 Ayes, 1 No Hancock, Heinrichs, Johnson, McFarland, Milligan, Stevens Burt 6 Ayes, 1 No E Ordinance No. 96 -15 Rezoning Approximately ORDINANCE 11.5 Acres Within U.S. Survey 2261 (Trident NO. 96 -15 Basin Float Plane Facility) From C- Conservation To LI -Light Industrial. Presented for consideration was Ordinance No. 96 -15 that, if adopted, rezoned 11.5 acres to be consistent with current and proposed development trends in the area. MILLIGAN, moved to adopt seconded by McFARLAND Ordinance No. 96 -15. Mayor Selby informed the Assembly that the rezone was requested by the City of Kodiak and approval was recommended by the Planning and Zoning Commission. Presiding Officer Stevens called for public testimony; hearing and seeing none, he reconvened the regular meeting. Heinrichs, Johnson, McFarland, Milligan, Burt, Hancock, Stevens None Unanimous Mayor Selby thanked the out -going Assemblymembers for their outstanding job of serving the community. 2 MESSAGES FROM THE BOROUGH MAYOR Volume XXII Page l6 3.04.020 Permissible investments. The treasurer shall invest money only in the following types of security instruments: A. Bonds, notes, or other obligations, direct or otherwise, of the United States; 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 ". (Ord. 92 -29 §3, 1993; Ord. 90- 35 §2, 1990; Ord. 84 -30 -0 §1, 1984; Ord. 82- 15 -0(A) (part), 1982; Ord. 71 -5 -0 (part), 1971; prior code Ch. 7 subch. 1 §2). 27 n.n n I 2 2 ' `' AN ORDINANCE AMENDING THE KODIAK ISLAND ORD INANCES BOROUGH CODE OF AND THERETO CHAPTER 7 DEALING WITH PU BLIC FINANCE ADDING BE IT ORDAINED by the Kodiak island Borough Assembly that the the Kodiak Island Borough Code of Ordinances and Resolutions be and the same is hereby amended by adding thereto Chapter 7, entitled "Public Finance ", which shall read as follows: SUB- CHAPTER 1. MANAGEMENT AND ACCOUNTING Section 1. General Management. The Treasurer shall be responsible for treasury management, including investment and reinvestment of all revenues of the municipality from whatever source, to include the school system. Section 2. Permissible Investments. The Treasurer shall invest money only in the following types of investments. A. Bonds, notes or other obligations, direct or otherwise, of the United States. 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 or certificates of deposit tuinnan an any financial institution authorized to Section 3. Centralized Treasury in a All school money shall be e deposited Borough centralized treasury money. Section 4. Basis of Accounting. Accounting of the budget will be prepared on a modified accural basis, which is described II Page One, ORDINANCE NO. 71 -5 -0 2,7 KODIAK ISLAND BOROUGH ORDINANCE NUMBER 71 -5-0 CHAPTER 7. PUBLIC FINANCE n 1 2 2; 7 . I'I Section 2. as: revenues being recognized when cash is received, with the exception of School District, State and Federal Grants, which shall be recognized whether received or not, and expenditures being recognized as soon as they result in liabilities for benefits received. Section 5. Funds. Funds as required will be established, which should include, but are not limited to the following. A. Kodiak Island Borough General Fund. B. Kodiak Island Borough Payroll Fund. C. Tobacco Tax Fund. D. Debt Service Funds. E. Capital Projects Funds. F. Fire Service District Fund: G. Sewer and Water Utility Fund. H. other Enterprise Funds as needed. Section 6. Distribution of Funds. A. All funds shall be disbursed Borough to the budget as approved by Assembly. B. The School District submit claims that have been approved payment. Board to the Central Treasury for Section 7. Posit. The Assembly shall provide for an independent annual audit of all municipal accounts, or more frequent audits as deemed necessary. Such audits shall be made by a certified edch Public Accountant, or firm staffed by accountants, who have no personal interest, direct or indirect, in the fiscal faffairs The municipality any of Assembly may, without requiring competitive bidding, designate such accountant or firm. SUB - CHAPTER 2. BUDGET AND PROCEDURES. Section 1. Bud et a Public Record. • The Budget and the budget message and supporting schedules shall be a public record in the office of the Clerk, open to the public inspection by anyone. Fiscal alYeea . The fiscal year of the Kodiak Island Borough Page Two, ORDINANCE NO. 71 -5 -0 241 nnnn•I X22 • Budget and Capital Pro ram. Section 3. 30th of April of each A. On or before the 3 budget the Borough ca l g program toathesBorough e bud and capital p Budget and shall contain Tne the e Budget appro riation and shall ocdinancap proposed P tax levy B. The School Districhl su to the Borough Chairman the proposed local support requirements for the school by the 31st of.Naroh - so the major funding can be incorporated into the Borough Budget and Budget message. Public Hearing of the Bud et. Section 4. j At a time place as advertised the Budget shall p l hold a public hearing of the A sub t h e As es submiytaddopt, withtor withouthearing, the annual budget as proposed by amenddmeentsts, , the the Chairman. Veto. Vote Re sired; Section 5. Ado tion of Bud et; e favorable The Budget shall be adopted by the the votes of at least a majoritylof th all l th 10 Jure members of the Assembly through the adoption of an ordinance setting forth the appropriation levels ante eheillage rate. The Borough Chairman mayyveetodth by ordinance but his veto may be two- thirds of all the votes to which the Assembly is entitled on the question. 1\ Section 6. Date of Final Ado aeon; Failure to Ado t• adopted not later than The Budp prior tol e he eg iof the budget 1y June' Shul the to Assembly take no' action anao, n or prior t o such hdy, on t day, the Budget, as submitted, shall bbet deemed Setolhhave been finally adopted Section 7. Effective Date of Bud et; Certification. Won adoption of the budget through passage of the Budget Ordinance and tax levy, the budget shall bo of i the f budget astfinally Budget he yeas. A copy the Ca e adndpthd shar be certified by irma shall and the clerk k and d filed in the office of Clerk. Sufficient copies of the budget n shall begin on the first day of July and end on the Last day of June. Page Three, ORDINANCE N0. 71 -5 -0 q1 q n ATTEST: n 2 n be made available for use of all offices, departments and agencies and for interested persons. ' 9or ud gh Clerk FIRST READING AND APPROVAL DATE, MARCH 4, 1971. SECOND READING, PUBLIC HEARING AND PASSAGE DATE, / , 1971. Page Four, ORDINANCE NO. 71 -5 -0 3 1 KODIAK ISLAND BOROUGH WILT N T. WH T Borough Chairman By n 1 •• j z r; KODIAK ISLAND BOROUGH ORDINANCE NO. 82- 15 -0(A) AN ORDINANCE OF THE KODIAK ISLAND BOROUGH, KODIAK, ALASKA, AMENDING THE INVESTMENT POLICY OF KODIAK ISLAND BOROUGH. WHEREAS, it is the desire of the Kodiak Island Borough Assembly to modify the existing ordinance on Permissible Investments, and WHEREAS, it is the further desire of the Kodiak Island Borough Assembl that all investments of Borough funds be collateralized. NOW, THEREFORE, BE IT ORDAINED that Title 3 of the Kodiak Island Borough Code be revised as follows: Sections: Chapter 3.04 PUBLIC FINANCE -- MANAGEMENT AND ACCOUNTING* 3.04.020 Permissible Investments 3.04.021 Terms Defined 3.04.022 Collateral Requirements 3.04.023 Collateral Safekeeping 3.04.020 Permissible Investments. The treasurer shall invest money only in the following types of investments security instruments. A. Bonds, notes or other obligations, direct or otherwise, of the United States; 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 accounteL er certificates of deposit, bankers acceptances, repurchase agreements and such other legal security instruments. in -any ff naneiel- 4nsti tetlen - eetherkeed to - de- bee #Hess -4n- the - State. 3.04.021 Terme Defined. In so far as specific wording is used in this code, the following definitions shall apply; A. Banker's Acceptance. An instrument utilized in the financing of foreign trade, making possible the payment of cash to an exporter covering all or a part of the amount of a shipment made by him. B. Bond. A bond is a certificate of indebtedness, in writing, and often under seal. C. Bill of Exchange. An unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer (Uniform Negotiable Instruments Law); synonymous with a draft or acceptance when referring to a domestic transaction. D. Collateralize. To secure a debt in part or in full by a pledge. A note is said to be collateralized if the debtor has deposited property with his creditor as part of full security for the payment of principal or interest. E. Repurchase Agreement. A repurchase agreement, commonly referred to as a "repo", is a short -term sale of Securities by a dealer in government securities whereby the dealer agrees to repurchase the securities from the investor at a fixed or open maturity date. The underlying instrument is a U.S. government security; therefore, there is little risk of default. The holding period is tailored to the needs of the investor and can be established for very short periods, even a few days. Interest rates on repurchase agreements are tied to the rate on treasury bills, federal funds, and loans to government security dealers by commercial banks. 31 CI q 1 ' :' 3.04.022 Collateral Requirements. All investments of public funds will be collateralized and /or insured. Collateral will be required to the extent that the investment amount exceeds the limits of FDIC or other applicable( insurance. The following collateral shall apply: ATTEST: By , Required for STATE AND MUNICIPAL BONDS AND NOTES 100% of Deposit 1. Alaskan issues 2. Federally Guaranteed Project Notes Alaska issues 3. Other states (Boa rating or better) U.S. GOVERNMENT OBLIGATIONS 1. Direct obligations 2. Federal Agency issues 3. Federally Guaranteed Project Notes -Other 3.04.023 Collateral Safekeeping. All items of collateral will be deposited for safekeeping with a third party. This party will be another bank Borough Cler PASSED AND APPROVED this 5th day of May Kodiak Island Borough Assembly. 1 First Reading, Approval Date, March 4, 1982 Second Reading, Public Hearing: April 1, 1982 Passage Date: May 6. 19RP Effective Date, May 6. 1982 Recommended By: Borough Assembly Ordinance No. 82 -IS-0 (AL Page 2 33 KODIAK ISLAND BOROUGH 100% of market 100% of market 120% of market 100% of market 100% of market 100% of market , 1982, by the KODIAK ISLAND BOROUGH ORDINANCE NO. 84 -30 -0 AN ORDINANCE OF THE KODIAK ISLAND BOROUGH ASSEMBLY DIRECTING THE IMPLEMENTATION OF CERTAIN INVESTMENT POLICIES BY THE BOROUGH AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, Section 3.04.020 of the Kodiak Island Borough Code provides investment standards for the investment of Borough funds; and WHEREAS, the Assembly is desirous of providing additional guidelines to the Borough Manager for investment of certain funds of the Borough. NOW, THEREFORE, BE IT ORDAINED as follows: Chapter 3.04 PUBLIC FINANCE -- MANAGEMENT AND ACCOUNTING* Section 1: d 3.04.020 Permissible Investments. 0. Notwithstanding the standards provided in Section 3.04.020, the proceeds of $7,400,000 Kodiak Island Borough General Obligation Variable Rate Demand Bonds, Series A; the proceeds of $9,500,000 Kodiak Island Borough General Obligation Variable Rate Demand Bonds, Series B (1984) and amounts held in the Debt Service Fund for repayment of either of the following: 1. Direct obligations of or obligations insured or guaranteed by, the United States of America or agencies or instrumentalities of the United States of America; 2. Interest - bearing time deposits or certificates of deposit with a bank or trust company continuously secured and collateralized by obligations of the type described in paragraph (1) above, having a market value which shall be determined weekly at least equal at ali times to the amount of such deposit or certificate, to the extent such deposit or certificate is not insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, or any successors thereto; or 3. Fully collateralized repurchase agreements with (1) the following dealers: Merrill Lynch, Pierce, Fenner and Smith, Inc.; Salomon Brothers Inc.; The First Boston Corporation; Goldman Sachs and Company; or (2) with banks which are members of the Federal Reserve System and whose obligations are rated not less than A or Prime 1 by Moody's Investors Services or the equivalent rating by Standard and Poor's that are secured by obligations referred to in paragraph (A) hereof having a current market value at least equal to one hundred and three percent of the amount of the repurchase agreement,inclusive of accrued Interest, marked to market daily. ), fl 1 1 3 1 Section 2: This ordinance takes effect immediately. PASSED AND APPROVED by the Kodiak Island Borough Assembly this :ATTEST: day of By .� Boorough C !first Reading, Approval Date: 'Second Reading, P blic Hearin Effective Date: Or dinance No. 84 -30 -0 Page 2 3s , 1984. KODIAK ISLAND BOROUGH that: KODIAK ISLAND BOROUGH ORDINANCE NO. 90 -35 Introduced by: Recommended by: Finance Date: Public Hearing: Adopted: AN ORDINANCE AMENDING KIB CODE REGARDING PERMISSIBLE INVESTMENTS Mayor Selby Director 10/01/90 11/01/90 11/01/90 BE IT ORDAINED by the Kodiak Island Borough Assembly 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. Section 3.04.020, Permissible investments, is amended by repealing section D. ATTEST: Boro Clerk U PASSED AND APPROVED THIS 1st DAY OF NOVEMBER, 1990. KODIAK ISLAND BOROUGH ding 0 ficer i Bo ;ugh Mayor Pres 7 Ordinance No. 90 -35 Page 1 of 1 KODIAK ISLAND BOROUGH ORDINANCE NO. 92 -29 Introduced by: Requested by: Drafted by: Introduced: Public Hearing: Adopted: 4 Mayor Selby Mayor Selby Mayor Selby 12/17/92 01/07/93 01/07/93 AN ORDINANCE AUTHORIZING THE KODIAK ISLAND BOROUGH TO BECOME A MEMBER OF THE ALASKA MUNICIPAL LEAGUE INVESTMENT POOL, INC., TO EXECUTE A COMMON INVESTMENT AGREEMENT WITH THAT CORPORATION, AND AMENDING KODIAK ISLAND BOROUGH CODE 3.04.020 PERMISSIBLE INVESTMENTS TO AUTHORIZE KODIAK ISLAND BOROUGH INVESTMENT IN THE INVESTMENT POOL WHEREAS, the Alaska Municipal League Investment Pool, Inc. was formed as a nonprofit corporation as a means for eligible political subdivisions of the State of Alaska to secure the maximum investment return consistent with the preservation of capital and liquidity by pooling money temporarily available for investment; and WHEREAS, participation in the Pool is on a voluntary basis to public entities who become members of the Corporation and execute a Common Investment Agreement; and WHEREAS, it would be beneficial to have the option for the Kodiak Island Borough to participate in the Alaska Municipal League Investment Pool, Inc.; NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT: Section 1: That the mayor is hereby authorized to execute such documents as are necessary for the Kodiak Island Borough to become a member of the Alaska Municipal League Investment Pool, Inc., and to enter into a Common Investment Agreement, attached hereto as "Exhibit A ". Section 2: Section three of this Ordinance is of a general and permanent nature and shall become a part of the Kodiak Island Borough Code of Ordinances. Kodiak Island Borough, Alaska Ordinance No. 92.29 )7 Page 1 of 2 Section 3: That Kodiak Island Borough Code 3.04.020 Permissible investments is hereby amended by the inclusion of an additional subsection to read as follows: ATTEST: D. The Alaska Municipal League Investment Pool, Inc., made in accordance with the terms of that Pool's "common Investment Agreement ". ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS 7th DAY OF JANUARY, 1993 Donna F. Smith, Borough Clerk Kodiak Island Borough, Alaska Ordinance No. 92 -29 Page 2 of 2 3$ KODIAK ISLAND BOROUGH Jer Jack L, Mp`Farland, Presiding Officer TO: THROUGH: FROM: SUBJECT: DATE: Kodiak Island Borough MEMORANDUM Honorable Mayor and Assembly Members Kodiak Island Borough Rick Gifford, Borough Manager R5 Karleton Short, Finance Director g, Facilities Fund July 26, 2006 of the v KODIAK ISLAND BOROUGH CLERK'S OFFICE coPi$D 'ro. ASSEMBLY +/ MAYOR MANAGER - T_ OTHER we 9' The Kodiak Island Borough sold Shuyak Island to the State of Alaska for $42,000,000 on March 26, 1996. The Kodiak Island Borough received its first payment of $8,000,000 in FY1996. $6,000,000 of this amount, per the sales agreement, was used for the construction of the Kodiak Fisheries Research Center and $2,000,000 was credited to the Facilities Fund. The Borough then received $2,194,266 in FY1997, $4,000,000 per year from FY 1998 -2002 and a final payment of $11,805,734 in FY 2003. The total of all payments to the Facilities Fund amounted to $36,000,000. The Borough has received $9,590,290 in interest on these payments through the end of FY2006. The Borough can spend up to 85% of the previous year's interest earnings on building insurance, debt service on bonds, and capital projects. Payments on debt service can only be up to 50% of the total amount available. Through FY2006 the Facilities Fund has spent $6,637,341 on building insurance, debt service, and capital construction. $1,714,770 for building insurance, $3,137,884 for debt service, and $1,784,687 for capital construction. These numbers do not include the six million dollars allocated to the KFRC project. In FY 2006 the Facilities Fund earned $1,781,653 (un- audited) in interest earnings. The 85% of interest earnings that are available for subsequent year's appropriate amount to $1,514,405. In FY 2007 1 mill equals about $900,000 in property and severance taxes. In FY 2007 this is equal to 1 mills on both property and severance taxes. At the end of FY 2006 the Fund Balance of the Facilities Fund will be $38,952,949 (un- audited). This increase of $2,952,949 is due to the 15% inflation proofing ($1,438,544) and timing. (Interest earnings cannot be spent until the next fiscal year). KODIAK ISLAND BOROUGH Facilities Fund Special Work Session August 5, 2006 A special meeting of the Kodiak Island Borough Assembly was held August 5, main conference room. The meeting was called to order at 9:00 a.m. Present were Mayor Jerome Selby, Assemblymembers Tom Abell, Pat Branson, Ranney, Mel Stephens, and Barbara Williams. Absent was Assemblymember present were Manager Rick Gifford, Finance Director Karl Short, Clerk Nova Clerk, Marylynn McFarland. CITIZENS' COMMENTS 2006 in the KFRC Reed Oswalt, Cecil Sue Jeffrey. Staff Javier and Deputy Manager Gifford summarized the history of the facilities fund along with what the fund could be used for. Assemblymember Branson suggested that the assembly meet once a month to review the facilities. Assemblymember Ranney was unsure as to the reason the assembly was meeting about the facilities fund. He felt that was a matter of moving funds around but still having the same debt. Assemblymember Williams was concerned that money was not set aside for maintenance of facilities. She suggested that buildings be upgraded for energy efficiency. Assemblymember Abell summarized some of the historical expenditures from the facilities fund that were not building maintenance. He thought that the fund could be used to offset inflation or pay off the hospital loan. Assemblymember Stephens stated that the use of the facilities fund could be changed anytime by ordinance. Mr. Stephens is concerned about the use of the fund; he is against dedicating or earmarking funds; he does not like the inflexibility of 3.04.051 (D). Assemblymember Branson suggested that when the assembly gathered to discuss the strategic plan, goals and objectives, budget time would be a good time to discuss the facilities fund. She would also like to see investment issues, maintenance and flexibility of the use of the fund be addressed. Assemblymember Abell would like to see a certain percentage of the fund be dedicated to go to maintenance and repair, capping the fund, inflation proofing the fund; percentage be allotted for borough roads and thought that strategic plan time was a good time to discuss the fund in detail. Assemblymember Branson reminded the Borough that the school district was to submit a list to the Borough each year of their maintenance needs. She would like to see this yearly. Assemblymember Oswalt would like to see paved roads in the borough. Also would like to see that the CIP list be cut to approximately five items for the legislature. Bill Williams expressed his concern over the 8.25% interest that the borough was paying and thought it should be corrected. He also made the statement that with the 40 million from Shuyak; the equivalency of paying taxpayers would be approximately 1,500. Mayor Selby suggested that the interest rates of the different loans within the fund needed to be reviewed. He also thought that the maintenance of the buildings should be addressed along with the underperformance of the fund. The ordinance for the facilities fund needed to be reviewed because it Kodiak Island Borough Facilities Fund Work Session Meeting Minutes August 5, 2006 addressed only short term investments. The Mayor agreed that a good time to review the facilities fund was at strategic plan time in November. MANAGER'S COMMENTS — None CLERK'S COMMENTS - None MAYOR'S COMMENTS — Will be setting up a date for the Mayor's Conference. ASSEMBLYMEMBER COMMENTS Assemblymember Ranney — Thanked all for sharing. Assemblymember Branson — at the time of the strategic plan meeting she will be on her sabbatical. She plans to call in. Assemblymember Oswalt would like to see Manager Gifford research the service districts moving ahead. Assemblymember Stephens would like to receive a copy of the Borough's response to the Eufemio's letter they submitted regarding their property. Assemblymember Abell believed that a priority list needed to be established included the CIP. Mr. Abell would also like to see the Woodland Acres Paving area received some help from the Borough; the investment policy be set up; service districts be reviewed with road powers in mind. Assemblymember Williams - no comment. ADJOURNMENT The meeting adjourned at 10:15 a.m. Kodiak Island Borough Facilities Fund Work Session Meeting Minutes August 5, 2006 Page 2