The Kenai Peninsula Borough School District will use some of its federal COVID-19 relief funds to save teaching positions they had previously considered cutting.

Including funds from the $1.9 trillion American Rescue Plan passed by Congress earlier this month, the district has received three rounds of federal funding. Those funds come from the Elementary and Secondary School Emergency Relief, or ESSER, fund.

Through the federal CARES Act, the district received about $2.3 million in original ESSER funds, which are available to the district between March 13, 2020 and June 30, 2022. The district used those funds for a variety of purposes including COVID-19 mitigation measures like purchasing personal protective equipment, Zoom licenses and electrostatic sprayers.

Through the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, the district received just over $9 million in ESSER II funds to be spent between March 2020 and June 30, 2023.

As of Monday, the district did not know how much money they will receive under the American Rescue Plan, or the time frame in which those funds will have to be spent.

The district and the borough were at odds during work sessions earlier this year, when there was a roughly $10 million difference in what the district requested from the borough for its FY 2022 budget and what Kenai Peninsula Borough Mayor Charlie Pierce suggested as a minimum amount. Both the borough and the district stepped toward compromise during their March joint work session, with the district coming down by about $3 million and the borough going up by about $2 million.

KPBSD John O’Brien said during a February joint work session between the borough and the district that the $10 million difference in what the district requested from the borough and what Pierce proposed as a minimum amount could mean the loss of 100 teaching positions, in addition to a projected loss of 48 positions due to an expected decrease in enrollment.

In response, Pierce has said that the district should use its ESSER II funds to save teaching positions. The borough has emphasized that a decrease in sales tax revenue in 2020 due to COVID means it generally has less money overall, and thus less is available to give to the district.

O’Brien, however, has said that federal COVID relief funds are temporary and not something the district should count on when making long-term plans. Specifically, O’Brien said that using ESSER II funds to save teaching positions would be “kicking the can down the road” and that they should be used for their intended purpose of helping students catch up academically.

KPBSD Communications Director Pegge Erkeneff said Tuesday that the decision to use ESSER II funds to save teaching positions was made after the district learned they would be receiving a third round of federal funding. During a budget town hall meeting on Wednesday, KPBSD Finance Director Liz Hayes said that the district must reserve 20% of whatever money they get in ESSER III for the purpose of helping students catch up. That may include implementing programs like summer school, extended learning days and after-school programs.

O’Brien reiterated on Wednesday his position that the district cannot rely on temporary funding moving forward. Specifically, he called on the Alaska Legislature to use the session to come up with a financial plan for the state moving forward and criticized Pierce’s proposed funding floor of $45 million, which he said was the level at which the borough funded the district seven fiscal years ago.

“If that does not get addressed in the next two years, this district will be looking at an extensive amount of cuts that need to be made,” O’Brien said Wednesday. “While it’s good news that we’re getting this federal funding, again I just caution the community — our board members, our Legislature and the borough assembly — to not get complacent with that. We need to make sure that there’s an adequate stream of revenue to continue funding the public services that we all have come to appreciate and expect here on the Kenai Peninsula.”

In all, KPBSD is projecting about $131.4 million in revenue for fiscal year 2022 and about $134.1 million in expenditures, resulting in a deficit of about $2.68 million. That deficit will be covered using money from the district’s general fund, Hayes said Wednesday.

Among the biggest expenditures for the district are employee salaries, including step increases and benefits, which account for almost 80% of its expenditures. Step increases refer to annual raises built into employee contracts based on longevity and education.

The borough mayor is not expected to present his budget to the assembly for approval until May, with the final hearing in June. The full town hall can be viewed on the district’s website at kpbsd.org.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.