Board of Education sees preliminary budget

With still unknown budget allocations from the state and borough for next year, the Kenai Peninsula Borough School District’s Board of Education is working on a budget with a projected deficit of approximately $3 million .

The district, which operates 44 schools across the borough, has a projected general fund budget for fiscal year 2018 of approximately $140.8 million. About 80 percent of that goes to employees’s salaries and benefits, with the rest spread among facility utilities, equipment and supplies, among other costs.

Most of the funding comes from the state. For fiscal year 2018, with projected enrollment of 8,781 students, the district estimates the state’s contribution would be approximately $79.2 million, according to a school district budget work session document. The 20-day count in October, which is the count the state uses to determine funding, showed approximately the same number of students, as reported by the Clarion.

The borough usually kicks in a large portion of the bill as well. For the last two years, the borough contributed approximately $48.2 million, about $3 million shy of its total allowable contribution. The contribution to the school district comprises about 60 percent of the borough’s FY 2017 budget.

The Board of Education has been working through the district’s expenses, trying to iron out where it can save money in the face of predicted state budget cuts of between 5 and 20 percent. Between 2015 and Gov. Bill Walker’s proposed FY 2018 budget, the Alaska Department of Education and Early Development has seen a 7.9 percent reduction in funds, or approximately $111.8 million, according to the governor’s Office of Management and Budget.

The school district has been spending out of its fund balance for the past several years to cover deficits in the budget as government contributions and enrollment decline. In FY 2012, the fund balance was approximately $20.3 million. By FY 2016, it had decreased to $15.8 million, according to the budget document from the district.

Using one third of the unassigned fund balance to offset the deficit in the FY 2018 budget will reduce it to $2.3 million, according to the budget document.

“Administration has been, and continues to develop a plan for the reduction of this deficit,” the budget document states.

During work sessions before the general open meeting Monday, the Board of Education heard the presentation of the preliminary budget and discussed various ideas for helping to reduce costs to the district. This year, step increases for school district union employees went into effect, as did changes in health insurance plans.

The board is engaged in a multi-year effort to overhaul its room use policy, which determines how and under what conditions anyone can rent or use school facilities such as classrooms, auditoriums and pools. Still in committee, the revisions have not been sent to the whole Board of Education for discussion yet, but part of the rationale is to balance the custodian and maintenance cost for the use of facilities with the fees users are charged.

During a work session, Board of Education member Tim Navarre said the whole group should consider a basic question about the policy: does the board want to shift more of the cost to the community? It would make more sense to decide what the board’s goal is and subsequently draft policy, he said.

“I heard some discussion of, ‘If the community wants an auditorium, they should pay for it,’” he said. “To me, that’s a broader question for the board. Not that you can’t do it through the policy … but then you run up against the issue of, ‘Is that what we want to do with the board, go away from those things?’”

Board member Dan Castimore said the policy is patched together over time and should be revised to make it more consistent. He said the committee had not come up with solid numbers for new fees yet.

“The goal is not to price people out of the facilities,” he told the board. “It’s to charge a reasonable fee.”

Castimore also asked for the board to discuss the possibility of reducing or eliminating its health insurance and public employee pension allowances for members. It’s hard for board members to say to employees who work less than 30 hours that they cannot receive health care benefits, and yet the board members get it themselves, he said.

Other board members said they wouldn’t support eliminating the benefit. Assistant Superintendent Dave Jones said the availability of health care benefits for board members may attract better members to participate, which is important.

“I need to work for a good board,” he said. “I can tell you, I don’t believe the $200 a month (stipend) gets people’s attention… but I think sometimes the ability to have health insurance does attract people. For the time and the amount of money that people put in, administratively, it’s not an area that I am concerned that we need to cut.”

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