2011-11-29 Joint Work Session - SB KODIAK ISLAND BOROUGH
ASSEMBLY AND SCHOOL DISTRICT BOARD
JOINT WORK SESSION AGENDA
Tuesday, November 29, 2011
Assembly Chambers
7:30 p.m.
(Borough Chairing)
Joint work sessions are informal meetings of the Borough Assembly and School District Board where
elected officials discuss issues that affect both Borough and School District, and residents. Although
additional items not listed on the joint work session agenda are sometimes discussed when introduced by
elected officials, staff, or members of the public, no formal action is taken at joint work sessions and items
that require formal action are placed on a regular Borough Assembly and /or School District Board meeting
agendas. Public comments at work sessions are NOT considered part of the official record. Public
comments intended for the 'official record" should be made at a regular Borough Assembly or School
District Board meeting.
Public Comments (limited to 3 minutes each)
Agenda Items
1. School District Budget Discussion
Education Funding for Fiscal Year 2013
30,000 foot overview
Education funding has been a priority to the Kodiak Island Borough since inception. Every year one of
the most important functions of the Borough Assembly is balancing use of economic resources against
the costs of funding a quality education system.
The first step in determining how much funding is available is to examine the financial resources of the
Kodiak Island Borough (Borough).
1) Economic indicators
The economy of the Borough continues to be strong. Several different indicators are used to make
this determination. When we do our evaluation of the economy we only use data that can be
verified.
a) Assessed value of the Kodiak Island Borough
The largest component of local funding for the school district comes from property taxes. The
assessed value of the Borough continues to rise.
Fiscal Total
Year Assessed Value Assessed Value
2003 760,451,857
2004 • 770,636,765 1,200,000,000 -
2005 • 783,909,250 1,000,000,000 - x -
2006 • 798,915,949
2007 805,681,814 800,000,000 _ — — — — —
2008 • 835, 525, 537 600,000,000 — — — — — — — — — —
2009 • 870,770,562 400,000,000 — —
2010 896,893,679
2011 • 988,879,125 200,000,000 —
2012 � 1,039,223,833 0 T 1 1 1 1 1 1 1
The assessed value of the Borough is expected to rise 2% next fiscal year (FY2013). This will be an
increase of $21,000,000. At the current mill rate, this will increase school district property tax revenues
by $190,890.
Debt service on school district bonds will increase by approximately $800,000 in FY2013. The increase in
property values will cover approximately $33,000 of this increase. To pay for the balance of this
increase, the property tax mill rate will have to be increased by approximately .75 mills.
b) Cash in banks
The amount of money available in local banks continues to rise.
Deposits in
Fiscal Year Local Banks Deposits in Local Banks
2002 123,221,000
2003 120,352,000 2012 ' —
2004 130,325,000 2010 _
2005 133,370,000 2008 ■.
2006 141,434,000 2006 ' ' '
2007 140,915,000 20 04 11 ■
2008 139,416,000 200 • 2 000 i •
2009 175,141,000 1 998
2010 192,242,000 1996 ..
2011 194,289,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
c) Severance tax
As you can see the value of the resources severed from the Borough has more than doubled
over the past ten years. Most of our severed resources are renewable; i.e. fish and timber. The
only nonrenewable resource that we are severing is gravel.
Value of Severed Resources
Value of
Fiscal Severed 160,000,000 - -^
Year Resources 140,000,000
2002 78,709,622 ^" -- — — —
120,000,000
2003 75, 898, 919 i — — — —
2004 86,453,297 100,000
2005 98,101,268 80,000,000
2006 107,900,636 60,000,000 0 . 1
2007 125,398,952 40,000,000 ■
2008 136,781,905 —
2009 124, 875,143 20,000 .
2010 127, 245, 238 -
2011 157,073,714 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
d) Sales Tax - Even though the Borough does not have a sales tax, it is useful to look at the City of
Kodiak's sales tax data to measure the health of Kodiak's economy.
In FY2010 the total sales receipts in the City of Kodiak were $414,087,791. The City of Kodiak
realized $9,379,409 with a cap of $45 per transaction. This equals $1,563,234 per percent of sales
tax.
City of Kodiak Sales Tax
10,000,000 _
9,000,000
8,000,000
7,000,000
6,000,000 / '
5,000,000 0 _
4,000,000 •
3,000,000
2,000,000 -
1,000,000
0
2) Facilities Cost
a) High School Renovation and Additions Project
This project is estimated to cost $76,560,000 with ninety nine (99) percent of the funding
coming from the sale of general obligation bonds. We are anticipating that the State will
reimburse us for 60% of the debt service on these bonds. When all of these bonds have been
issued, the debt service cost to the Borough will be about $2,620,000. These payments will
need to be funded with a mill rate increase of approximately 2.5 mills
There are other projects related to the High School project such as the Kodiak High School
Exterior Insulation and Window Upgrade for $596,020 and the High School Vocational
Education /pool reclamation project for $4,840,788. These other projects are funded by bond
issues, State and Federal grants, and local resources.
b) Other school Projects
In total, the Borough has $194,217,948 in ongoing capital projects for the school district. This is
$14,289 for every man, woman, and child in the Borough.
c) Borough capital projects
The Borough has $24,532,089 in ongoing capital projects not related to education. Many of
these projects have been substantially completed. One of the largest non - educational capital
projects for the next several years will be expanding the landfill.
d) Debt Service
Debt service costs will to continue to rise. In the next several years it will go up 1.5 to 2.0 mills.
This is a significant increase but the voters were aware of it when they approved the bond issue
for the High School Renovation and Additions Project.
e) Insurance
As the value of our assets increases, the amount we pay for property insurance will also rise.
We currently pay 4 cents to 5 cents per hundred for property insurance. Many of these projects
will not increase our insurance costs but we will pay $50,000 to $100,000 more in property
insurance.
3) Borough General Fund Budget
The Borough must balance its use of economic resources between education and other functions.
Some of these functions directly affect school district funding. An example would be assessing.
While it is a Borough Department, the majority of property taxes collected go towards financing
education.
a) There should be no material changes in General Fund revenues in FY2013
i) Severance taxes for the first quarter of FY2012 are 26% higher than the first quarter of
FY2011.
ii) Interest rates are the lowest they have been for some time and it is doubtful they will rise in
FY2012.
iii) State revenue sharing has been approximately $750,000 for the last several years; I don't
think it will change in the coming year.
iv) Federal PILT, which accounts for 22% of the General fund budget, should remain at about
51,325,000 per year.
v) State of Alaska raw fish tax, which accounts for 21% of the General Fund budget, should
remain at about 51,250,000 per year.
b) General Fund expenditures for FY2013 will remain fairly consistent with FY2012.
i) There will be an increase in health insurance and staff has made it a priority to keep this
increase as low as possible.
ii) We are not anticipating adding or deleting positions from the Borough budget. At this time
we are having a difficult time filling some of the vacant positions and I do not see that
changing in the next year.
iii) There will be increases do to Cost of Living adjustments to the salary scale.
One of the most important tasks for the Assembly, Mayor, School Board, Borough Staff and School
District staff is providing quality services to our residents at the lowest cost.
KIBSD Local Contribution History
Percent
Local KIB General Revenue to
KIB General Contribution Fund Support
Year Fund Revenue Appropriation in -Kind to KIBSD Revenue KIBSD
1999 I $ 10,139,514 $ 5,655,840 $ 842,070 $ 6,497,910 $ 3,641,604 64%
2000 1 $ 10,056,714 $ 5,556,310 $ 774,452 $ 6,330,762 $ 3,725,952 63%
2001 I $ 10,994,374 $ 5,996,440 $ 683,261 $ 6,679,701 $ 4,314,673 61%
2002 i $ 11,946,017 $ 6,331,440 $ 774,854 $ 7,106,294 $ 4,839,723 59%
20031 $ 11,037,232 $ 6,626,440 $ 955,548 $ 7,581,988 $ 3,455,244 69%
2004 1 $ 10,469,467 $ 7,049,645 $ 945,395 $ 7,995,040 $ 2,474,427 76%
2005 $ 11,731,234 $ 7,491,892 $ 840,548 $ 8,332,440 $ 3,398,794 71%
2006 1 $ 13,268,083 $ 7,794,690 $ 837,750 $ 8,632,440 $ 4,635,643 65%
2007 1 $ 14,104,388 $ 7,775,801 $ 895,459 $ 8,671,260 • $ 5,433,128 61%
2008 1 $ 14,714,664 $ 8,482,554 $ 937,858 $ 9,420,412 $ 5,294,252 64%
2009 1 $ 15,816,251 $ 9,270,768 $ 972,850 $ 10,243,618 $ 5,572,633 65%
20101 $ 15,630,927 .$ 9,343,500 $ 946,850 $ 10,290,350 $ 5,340,577 66%
2011 $ 16,187,070 $ 9,494,388 $ 780,962 $ 10,275,350 $ 5,911,720 63%
$18,ceopo0 -
516.O 0.000
$1Q000,000
$12,000,000
$10,000,000 I I I 11I •
$8,000,000 $8,000,000 IO I I Revenue KIB General Fund
$6,000,C00 0 Local Contribution to
KIBSD
$4,000,000
$2000000 - - - 80%
5- - ,-,-r r .•- _. -.•: -
7096
°545 rye, ry �� ry ~ n5Pc' 6096 -
4096 111111 1 ' I
0 Percent of Revenue to
2: 1 - Support KIBSD
1 0%. 11 1 1111 i
g „sr 0,-, ry�5 ti 8 ^ ti8� tip~~
Fiscal Total'Local, Assessed 1 Millage
Year Contribution Value Equivalent
2000 6,330,762 715,699,035 8.85
2001 6,679,701 748,755,533 8.92
2002 7,106,294 752,049,060 9.45
2003 7,581,988 760,451,857 9.97
2004 7,995,040 770,982,367 10.37
2005 8,332,440 783,907,451 10.63
2006 8,632,440 798,779,349 10.81
2007 8,671,260 805,681,814 10.76
2008 9,420,412 835,525,537 11.27
• 2009 10,243,618 870,472,985 11.77
2010 10,290,350 913,014,985 11.27
2011 10,275,350 988,879,125 10.39 Sources KIB and KIBSD Annual
2012* 10,250,350 1,053,672,000 9.73 Audits
*Budgeted
KIB Assembly and KIBSD Board of Education
Joint Work Session
November 29, 2011
Local Contribution Borough Comparison
School District Maximum Local Contribution Actual Local Contribution Differenre between Cap vs Actua Percentaee
Anchorage $ 197,760,403 $ 193,215,858 $ 4,544,545 98%
Mat - Su $ 59,882,919 $ 48,347,365 $ 11,535,554 81%
Fairbanks North Star $ 61,684,971 $ 46,522,700 $ 15,162,271 75%
Kenai $ 45,872,444 $ 43,251,135 $ 2,621,309 94%
Juneau $ 25,360,224 $ 25,360,224 $ - 100%
Kodiak $ 11,013,945 $ 10,275,350 $ 738,595 93%
Ketchikan $ 10,544,142 $ 9,317,052 $ 1,227,090 88%
Sitka $ 7,035,364 $ 6,218,818 $ 816,546 88%
of FY11 Local Contribution v. Maximum Allowable
100%
90 % —
80% — ;
70 % —Rs
�uw,
60% —
ty.
50% — `
40% — —
30% — —
20% — —
€µ
10% — ';
Anchorage Mat - Su Fairbanks North Kenai Juneau Kodiak Ketchikan Sitka
Star
(Source: Alaska Department of Education and Early Development
KIB Assembly and KIBSD Board of Education
Joint Work Session
November 29, 2011
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