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HomeMy WebLinkAboutKenai Peninsula Borough - Public Financial Report 2 About our Borough 3 Message to Kenai Peninsula Borough Residents 4 Assembly Members 5 Quick Facts 6 Organizational Chart 7 Property Tax Dollars; Navigating Your Tax Bill 8 Functional Government Spending 9 Dollars In Governmental Fund Revenues 10 Where the Money Comes From 11 Dollars Out Governmental Fund Expenditures 12 Where the Money Goes 13 Government Wide - Net Position 14 Government Wide - Statement of Activities 15 Debt: What We Owe 16 Glossary 17 Photos courtesy of : Lauri Lingafelt, Sarah Hostetter, Tracy Davis, Stephanie Presley North Peninsula Recreation Service Area, Kachemak Emergency Service Area, Western Emergeny Service Area, Road Service Area TABLE OF CONTENTS 3 About our Borough The Kenai Peninsula Borough lies directly south of Anchorage, the State's principal population center. The waters of the Gulf of Alaska and Prince William Sound border the borough on the south and east with the dramatic Chigmit Mountains of the Alaska Range bordering the borough to the west. The Cook Inlet divides the borough into two land masses. The Kenai Mountains run north and south through the peninsula, contrasting to the lowlands lying to their west. The west side of the Inlet is sparsely inhabited, with the village of Tyonek being the largest populated settle- ment. The boundaries of the borough encompass a total of 24,750 square miles, of which 16,000 square miles are land and fresh water. In comparison, the total land mass of the borough equals that of Massachusetts and New Jersey combined. However, the total borough population is just less than 1/260th of that same area. There is a Borough-wide government based in Soldotna, consisting of a strong mayor and an assembly of representatives from all areas of the Borough. The Borough collects sales and property taxes and provides services such as road maintenance, waste col- lection facilities, emergency services and major funding for public schools. 4 Dear Kenai Peninsula Borough Residents, We are pleased to present the Kenai Peninsula Borough’s (“KPB”) Popular Annual Financial Report (“PAFR”) for the 2021 Fiscal Year. This is the eighth year a PAFR has been published by the KPB. The report is designed to increase our accountability to the public by presenting a condensed, user friendly, overview of the Borough’s financial position, financial practices and ad-ditional details outlining how KPB revenues were generated and spent over the last Fiscal Year. The financial information in this report is taken from the independently audited financial statements that are part of the KPB’s 2021 Annual Comprehensive Financial Report, required by Alaska statutes and Borough Code. If you are interested in more detailed information, current and historical budg-ets and annual financial reports are available on the KPB website at the Finance Department homepage; www.kpb.us/finance-dept. A special thank you goes to the dedicated staff of the KPB’s Finance Department who recognized the value of a condensed financial report and contributed the hard work and diligence required to prepare the report. The Kenai Peninsula Borough has been awarded a Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association for the last 42 years, an accomplishment we’re rightly proud of achieving and again due to the extraordinary work of our Finance Department and Borough-wide staff. As you review the 2021 Popular Annual Financial Report, please feel free to contact us with ques-tions, concerns, opinions or recommendations. We’ll use your feedback to improve future reports. Charlie Pierce Brandi Harbaugh Charlie Pierce Brandi Harbaugh, CPA, CPFO Borough Mayor Finance Director Message to the Residents of the Kenai Peninsula Borough 5 As s e m b l y M e m b e r s 2 0 2 1 - 2 0 2 2 Brent Johnson Phone: 907-262-4763 Email: bjohnson@kpb.us District 7 - Central Term Expires 2022 Tyson Cox Phone: 907-252-4814 Email: tysoncox@kpb.us District 4 - Soldotna Term Expires 2022 Richard Derkevorkian Phone: 907-398-6256 Email: rderkevorkian@kpb.us District: 2- Kenai Term Expires: 2023 Bill Elam Phone: 907-690-4339 Email: belam@kpb.us District: 5- Sterling/ Funny River Term Expires: 2023 Mike Tupper Phone: 907-435-7843 Email: mtupper@@kpb.us District: 9- South Peninsula Term Expires: 2024 Brent Hibbert Phone: 907-398-3234 Email: bhibbert@kpb.us District: 1- Kalifornsky Term Expires: 2024 Lane Chesley Phone: 907-299-7335 Email: lchesley@kpb.us District: 8- Homer Term Expires: 2023 Jesse Bjorkman Phone: 907-394-6796 Email: jbjorkman@kpb.us District 3 - Nikiski Term Expires: 2022 Cindy Ecklund Phone: 907-362-2276 Email: cecklund@kpb.us District 6 - East Peninsula Term Expires 2024 6 The Kenai Peninsula Borough was incorporated in 1964 as a second-class borough under the authority of the State of Alaska Borough Act of 1963. The Borough's governmental responsibilities are comparable to those of a county. The five first-class and home-rule cities in the borough are Kenai, Soldotna, Homer, Seldovia, and Seward. Other locally governed communities include Kachemak City and the native villages of Tyonek, Port Graham, and Nanwalek. Geography Land 16,000 square miles Water 8,750 square miles Government Mayor 9 member assembly Community Development River Center Demographics Residents 58,934 Median Age 41.8 Median Household Income 54,870 Human Services (Component Units) South Peninsula Hospital Central Peninsula Hospital Fire Stations Nikiski 5 Bear Creek 1 Western Emergency Services 3 Kachemak 2 Central Emergency Services 8 Calls Responded to by KPB Services 4,882 911 Calls Answered 24,900 Recreation Major Programs 9 Roads Maintained Miles 648 Solid Waste Landfills 8 Transfer Sites 13 Refuse Collected ~ tons 640,760 Quick Facts 7 Kenai Peninsula Borough - Organizational Chart 8 The Borough bills and collects its own property taxes as well as those of the 5 incorporated cities within the Borough. Before After 9 Community Funding $1.98 million dollars provided for Senior Citizens and other Community Programs and organizations throughout the Borough. $1,079,254~ Senior Centers $559,870~ Community Assistance (Revenue Sharing) $100,000~Economic Development District $60,000~Kenai Peninsula Tourism & Marketing Council $100,000~Small Business Development Center $83,719~Public Relations and KPB Promotion (contracted by KPB) Solid Waste $8.7 million dollars provided for Solid Waste facilities oper- ations, capital projects and debt service. $6.4M ~ Operations $2.3M ~ Capital Funded by $7.5M in property taxes, $.5M in user fees, $.7M in bond proceeds and grant revenues. Public Safety $25 million dollars provided for Public Safety, Emer- gency Management and E911 dispatch services. $1.3M ~ Emergency Management (This includes $0.2M general fund transfer in disaster relief, including COVID response) $2.1M ~ E911 Dispatch/Services $21.6 M ~ Fire & Emergency Medical Services Education $62 million dollars provided for Education in 2021, the equivalent of 7.3mills $54M ~ KPBSD (Operations and other related expenditures) $0.8M ~ KPC $3.6M ~ Capital $3.6M ~Debt Funded by $36.3M Sales tax (100% of Sales tax revenues go to Education), as well as $20.7M in property taxes and $5M in grant revenues and bond proceeds. Kwechak Creek Maintenance Seward Bear Creek Flood Service Area 10 * Service areas and Special Revenue Funds include: Nikiski Fire, Bear Creek Fire, Western Emergency Service Area, Central Emergency Services, Kache- mak Emergency Services, Lowell Point Emergency Services, Eastern Peninsula Highway Emergency Service Area, Central Peninsula Emergency Medical, North Peninsula Recreation, Seldovia Recreation, Roads, Land Trust, Seward Bear Creek Flood, Environmental Protection Program, Disaster Relief, 911 Communications, Nikiski Senior, Miscellaneous Grant Fund. Dollars In….. Governmental Funds Revenues Funding for the Kenai Peninsula Bor- ough government and the services pro- vided to residents comes from many sources, with the majority coming from Property Taxes and Sales Tax, which totals 68% of all revenue collections for Governmental Funds. Grants is the third largest revenue source, making up 28%. The Borough’s General fund and Other Governmental funds also receive revenue from charges for services, investment income and various other revenues streams. In total, FY 2021 revenues increased by $29,416,000 when compared to FY 2020 due primarily to CARES grant funding. Sales Tax revenues also saw an increase of roughly 9% from FY2020 to FY2021; realized from positive recovery in the retail trades, restaurants and utilities; as well as an increase in remote sales tax collections. Investment earnings saw a decrease of over 25% due to a continued decline in interest rates. 11 * Service areas and Special Revenue Funds include: Nikiski Fire, Bear Creek Fire, Western Emergency Service Area, Central Emergency Services, Kachemak Emergency Services, Lowell Point Emergency Services, Eastern Peninsula Highway Emergency Service Area, Central Peninsula Emergency Medical, North Peninsula Recreation, Seldovia Recreation, Roads, Land Trust, Seward Bear Creek Flood, Environmental Protection Program, Disaster Relief, 911 Commu- nications, Nikiski Senior, Miscellaneous Grant Fund. General Fund Revenues: $ 84,947,557 Other Governmental Funds Revenues: $ 71,670,219 Total Revenues: $156,617,776 12 Dollars Out... Governmental Funds Expenditures The Borough provides a range of services, including fire and emergency medical services, recreational programs and activities, road maintenance, permitting and education to maintain and promote valuable fish and wild- life habitat, and use permits, and solid waste programs. FY2021 saw a large increase in Governmental spending. This can mostly be attributed to expenditures relating to the CARES grant; which included health and safety focused infrastructure improvements, additional education funding and other pass through funding for local businesses and organizations. General Government - supports all borough offices and departments that serve the public. This includes public information, intergovernmental relations, creating and implementing the borough’s policy, assessing and collecting taxes, and managed of the borough budget. Education - provide operational funding for the school district and Kenai Peninsula college, through cash contributions, in-kind services, mainte- nance of facilities, utilities, insurance, audit fees, and custodial services. Public Safety - provide fire protection and emergency medical service, rescue capabilities, 911 dispatch services and emergency operations to the citizens of the borough. Solid Waste - operate solid waste facilities and programs to ensure waste is managed in accordance with borough code, and state and federal re- quirements. Roads/Trails - provide road maintenance for roads within KPB road ser- vice area. Land Trust - to maintain land inventory and issue land use permits. Recreation - provides recreational opportunities, promoting health, safety, educational and civic purposes. * Service areas and Special Revenue Funds include: Nikiski Fire, Bear Creek Fire, Western Emergency Service Area, Central Emergency Services, Kache-mak Emergency Services, Lowell Point Emergency Services, Eastern Peninsula Highway Emergency Service Area, Central Peninsula Emergency Medical, North Peninsula Recreation, Seldovia Recreation, Roads, Land Trust, Seward Bear Creek Flood, Environmental Protection Program, Disaster Relief, 911 Communications, Nikiski Senior, Miscellaneous Grant Fund. 13 * Service areas and Special Revenue Funds include: Nikiski Fire, Bear Creek Fire, Western Emergency Service Area, Central Emergency Services, Kache- mak Emergency Services, Lowell Point Emergency Services, Eastern Peninsula Highway Emergency Service Area, Central Peninsula Emergency Medical, North Peninsula Recreation, Seldovia Recreation, Roads, Land Trust, Seward Bear Creek Flood, Environmental Protection Program, Disaster Relief, 911 Communications, Nikiski Senior, Miscellaneous Grant Fund. *Education and Postsecondary education are aggregated in the financial statements. General Fund Expenditures: $ 71,900,187 Other Governmental Funds Expenditures: $ 80,250,890 Total Expenditures: $152,151,077 14 Government Wide - Net Position The Kenai Peninsula Borough’s Statement of Net Position de- picts our financial condition as of June 30, 2021. The net posi- tion is a summary of what the Borough owns (assets) and owes (liabilities). It does not include the hospitals and school compo- nent units. Total net position is the difference between total assets (what we own), including deferred outflows, and total liabilities (what we owe), including deferred inflows. In FY 2021, Total assets increased, deferred outflows of resources increased, and total liabilities increased. The overall result was an increase in net po- sition. The main factors in the increase in net position is due to increased sales tax collections over what was anticipated and CARES funding assistance in the Education and Public Safety categories. 15 Government Wide - Statement of Activities The Kenai Peninsula Borough’s Statement of Activities reflects our financial activity for the fiscal year end June 30, 2021. The Statement of Activities excludes hospitals and school component units. 16 Debt: What We Owe The Borough’s primary government debt is comprised of General Obligation Bonds: General Obligation– debt backed by the tax dollars of the Borough. As of June 30, 2021, the debt is issued through the State of Alaska’s Bond Bank, their current rating is A1. Good bond ratings improve the borrowing power of the Borough and provide for lower borrowing rates. 17 Glossary Assets - what the Kenai Peninsula Borough owns. Capital assets - items such as Borough land, construction in progress, equipment, infrastructure and buildings, and improvements net of depreciation. Current and other assets - items such as cash and investments, receivables, internal balances, inventories, deposits with others, prepaid items and deferred charges. Deferred inflows - an acquisition of net assets by the entity that is applicable to a future reporting period. Deferred outflows - a consumption of net assets by the entity that is applicable to a future reporting period. Fiscal Year (FY) - accounting period covering 12 consecutive months, July 1 to June 30 for the Borough. Governmental activities - Borough based services, including fire, public safety, public works, solid waste, environmental protection, economic development, health and social services, roads and recreation. Sales and property taxes finance the majority of these services. Invested in capital assets, net of related debt - amounts invested in capital assets less accumulated depreciation and any outstand-ing debt used to acquire these assets. Liabilities - what the Kenai Peninsula Borough owes. Long-term liabilities - items such as bonds, loans, compensated absences, and other Borough obligations payable over multiple fiscal years. Net position - the difference between the Kenai Peninsula Borough’s assets and liabilities. It is the net worth of the Kenai Peninsula Borough. Other liabilities - items such as payables, payroll, accrued interest and unearned revenue. Primary Government - all of the governmental and business type activities belonging to the Kenai Peninsula Borough, but excludes the discrete component units and fiduciary funds. Restricted- funds that are not available for use because they have been set aside for a specific purpose or project. Unrestricted - available funds. The purpose of this report is to provide an overview of the ϐinancial position and operations of the Kenai Peninsula Borough, as reported in the borough’s Annual Comprehensive Report, along with other information of interest. The ϐinancial information presented is unaudited and condensed form, and does not substitute for the Borough’s Annual Comprehensive Report. The Bor- ough’s Annual Comprehensive Report is prepared in conformity with generally accepted accounting principles (GAAP) Included in the Annual Comprehensive Report is the independent Audi- tor’s Report by BDO USA, LLP on the general purpose ϐinancial statements of the Borough. This report summarizes a 200 page of the Annual Comprehensive Report’s ϐinancial and statistical data. The ϐinancial statements condense information of all funds included in the “Total Primary Government.” GAAP requires certain ϐinancial presentation and disclosures which are omitted in this report. As a result, the Balance Sheet and Income Statement presented here are not in strict conformity with GAAP. The Borough’s Annual Comprehensive Report and Annual Budget have received awards for outstanding ϐinancial reporting from the Government Finance Ofϐicers Association. The Annual Comprehensive Report and the Annual Budget reports are available on the Borough’s website http://www.kpb.us/ϐinance-dept/about-ϐinance. 18 KENAI PENINSULA BOROUGH 144 North Binkley Street Soldotna, Alaska 99669 Toll-free within the Borough: (800) 478-4441 Phone: (907) 714-2170 Fax: (907) 714-2376 www.kpb.us