The Board of Education approved a revised FY17 Operating budget at its Monday meeting, including a transfer of $655,072 from the general fund into the fund for student transportation.

The board made the move to offset the equivalent revenue loss resulting from Gov. Bill Walker’s June 29 budget vetoes, which eliminated a number of education-related line items. Before the board voted on the budget revision, board member Dan Castimore proposed striking the transfer, which his peers argued would essentially force bus routes on the southern Kenai Peninsula to change from a one-tier to a two-tier system one year ahead of schedule.

“The long-term impact of the lack of trust will significantly harm, I believe, the district’s ability to have the support they need from our community … To do so tonight feels totally inappropriate without the opportunity for the public to comment,” said board member Liz Downing. “Perhaps there can be an advance of the timeline, but that needs to be part of the discussions planned for this fall.”

The board was scheduled to address but decided to postpone a discussion of proposed route revisions that would cut six or seven buses on the southern Kenai Peninsula, stagger school start times and move to a two-tier system at the beginning of the 2017-2018 school year. Buses are contracted daily. By moving to a two-tier system, where one bus would make two pickups and two dropoffs each morning and afternoon, it would cut costs by scheduling fewer drivers each day. Administrators are recommending the changes as a result of static state funding, potential expansion of special education routes and inflation, which combined as projected will lead to deficit spending by the 2018 fiscal year.

The shortfall may come earlier than expected.

Walker’s pupil transportation veto, made outside of the foundation funding, removed $12 million from the budget statewide. Because not all of the state’s 54 public school districts receive state funding for transporting students, the cuts disproportionately affected larger school districts, the Jones said in a board worksession Monday. For the school district $1.1 million of the projected nearly $2 million use of fund balance for the current fiscal year is a result of the vetoes.

Downing said she does believe something needs to be done to address the most recent, sudden reduction, but any immediate moves will have direct, negative impacts on members of the community.

“It is a $500,000 item that benefits one community,” Castimore said. “We are all going to feel the pain from that.”

The school district’s
current contract with First
Student, which ends at the start of the 2017-2018 school year, eliminates the school district’s obligation to maintain bus routes if there is a loss of pupil transportation revenue, Castimore said. Once the money is transferred into the fund the chance to utilize the clause and reduce routes as a way to make up any shortfall is void, he said.

“I disagree that the funding line in the budget ties us to spending that on transportation,” said Dave Jones, assistant superintendent.

Castimore’s concern was that there is no way to undo the transfer, but Jones explained the board can decide to place the money back into the general fund at a later date.

Board member Lynn Hohl supported Castimore’s amendment for other reasons. She said there is still a chance the Legislature may override Walker’s vetoes and the money may be available this year, so the transfer may be premature.

Board member Tim Navarre said he did not support revising the bus routes this year, but would next year regardless of what state funding is or is not made available for pupil transportation. He suggested holding off on approving a transfer.

Jones said the board could not wait on the decision because the state is expecting a revised operating budget from each of the state’s public school districts by July 15. It can be problematic if the budget does not accurately reflect what the school district expects to receive from its funding sources, including the effects of Walker’s vetoes, although there is a margin for error. If the budget also does not show 70 percent of revenues are to be spent on services relating to instruction, then the school district’s monthly scheduled state payments may be frozen, he said.

Castimore’s amendment ultimately failed.

The board also postponed the decision to award the next 10-year pupil transportation contract set to begin in the 2017-2018 school year until August’s regularly scheduled meeting, or possibly at a special meeting prior to that date, said school district spokesperson Pegge Erkeneff.

Reach Kelly Sullivan at kelly.sullivan@peninsulaclarion.com.