Kodiak Island Borough Assembly reallocates facilities-fund interest to debt service, advances budget ordinances to public hearing

The Kodiak Island Borough Assembly voted unanimously May 28 to move 75% of the eligible interest earned on facilities fund 276 into debt service and to advance two budget-related ordinances to public hearing.

Assembly members debated two mill-rate scenarios presented by finance staff — an 8.59 mill scenario that applies most available interest to debt service and reduces the mill rate, and an 8.91 mill scenario that directs $625,000 to facilities maintenance while keeping the mill rate near current levels. The finance director, Dora, and Borough Manager Williams provided worksheets showing how each choice changes funding available for the borough’s MAPTOR limit and for planned capital work.

The debate centered on a pair of interdependent ordinances: the FY2027 budget ordinance (FY2027-01) and the ordinance that receives the certified property tax roll and sets mill rates (to be finalized in FY2027-02). Assembly Member Smiley proposed using 75% of the eligible interest from fund 276 for renewal and replacement projects to bolster capital funds and lower the mill rate. That proposal was amended on the floor and clarified to specify allocation of 75% of the eligible interest — not 75% of the fund principal — to debt service instead.

Finance staff told the assembly the available interest figure was approximately $1.776 million; applying 75% of the available eligible interest produced a working figure of about $1,332,225 for reallocation. Staff also showed that in the 8.59 scenario the borough’s MAPTOR funding tracked to about $16.6 million, while the 8.91 scenario pushed MAPTOR funding closer to $17.29 million, a tradeoff members weighed when considering near-term maintenance versus longer-term capital reserves.

During discussion Assembly Member Whiteside stressed that maintaining or lowering a mill rate does not guarantee individual property taxes will fall because assessments also change. “If we keep the mill rate static, that does not mean your property taxes will not go up,” Whiteside said, a point the manager confirmed.

The assembly approved the amendment reallocating 75% of the eligible interest from fund 276 to debt service on a roll-call vote with all voting members present voting yes (Ames; Gardner; Johnson; Roberts; Smiley; Whiteside; Woods). After staff noted that worksheets would be updated for union salary increases and the amendments adopted, the assembly then voted unanimously to advance ordinance FY2027-01 to public hearing. The assembly likewise voted unanimously to advance ordinance FY2027-02, which receives the certified 2026 real and personal property tax roll and levies specified service-area taxes, to public hearing.

Next steps: staff will publish updated worksheets and ordinance drafts reflecting the adopted amendment and the July 1 cost-of-living salary adjustments; the ordinances will return for public hearing at the next regular assembly meeting.