The Kenai Peninsula Borough School District faces some tough choices as the process of planning next year’s budget begins.
KPBSD Superintendent Steve Atwater started a budget development meeting by asking the public and school site-based councils to review site budgets, specifically to look at how well funds are being used.
“Your task tonight is to offer input to the school board on where the district should reduce expenditures and where it should increase expenditures,” Atwater said “Given our deficit model of balancing our budget, all increases should have a corresponding decrease.”
The school board is responsible for deciding where the allocated funding is received at the 43 schools operating in 21 communities on the Kenai Peninsula.
Atwater said the school district should no longer solve its deficits by dipping so deeply into the district’s reserves. It is expected that balancing the FY16 budget will be a challenge, he said.
At the beginning of the 2014 fiscal year general fund balance was $26.5 million, and dropped to $15.5 by the beginning of the 2015 fiscal year, according to the KPBSD Annual 2014-2015 Budget.
“We talked about looking within all of our budgets and seeing if there is money in there that can be repurposed,” said Assistant Superintendent Dave Jones. “Or, if we are not using it for the greatest potential for increasing student achievement.”
The school district has no way to generate its own funding, Jones said. The state provides 72 percent of the district’s general revenue fund and the borough assembly allocates 27 percent, he said. The remaining 1 percent comes from other sources.
Of the money allocated by the assembly, 31 percent is raised through property tax, and 69 percent comes from sales tax, Atwater said.
For a property owner with home valued at $250,000 with a $50,000 exemption, the household is contributing $440 to education every year, which Atwater said he believes is a reasonable amount.
Last year the borough assembly did not fund to the highest allowable meaning an additional $3.5 million could be given to the school district, Jones said.
Newly elected Kenai Peninsula Borough assembly member Blaine Gilman attended the Kenai Central High School location of the Thursday videoconference budget meeting. He ran a campaign for the Kenai seat on a platform of funding education to the cap.
Gilman said he saw the votes he received as a mandate for funding education to the cap, in a previous Clarion interview. He said the results were not a surprise as he sees the Kenai community as one that wants education properly funded.
Listed in the school district annual 2014-2015 budget, as a “significant issue” was that the borough has not funded education to the cap since fiscal year 2010. During the 2013 fiscal year the Borough contribution fell below the prior year’s contribution for the first time, according to the current budget. The legislature changed the foundation formula calculation in 2013, shifting more funding responsibility to the state and lowering the maximum amount that could be contributed by the borough.
Salaries and benefits make up 84 percent of the general fund budget, Atwater said. Certified salaries account for 31.68 percent of the budget, employee benefits account for 40.29 percent, and support salaries 11.11 percent. Last year, 8.5 full time employees were laid off in the district.
Funding from the state also largely depends on how many students are enrolled, according to the 2015 budget. In 1998 the number of incoming kindergarteners was smaller than the graduating class, and the cycle of decreasing enrollment has continued.
Every year it costs more money to pay for the same amount of services as the year before, Atwater said. Using the fund balance has been a short-term approach.
Over time the reserves will become depleted and there will not be any remaining money, Atwater said. Rather than make large cuts in one fiscal year, revising the budget now will allow the district to transition to a smaller budget in a slow, but steady process.
Reach Kelly Sullivan at email@example.com