On Monday, the Kenai Peninsula School District Board of Education finalized the operating budget for the fiscal year 2016 — which began on July 1 — that will utilize $816,618 of unrestricted general fund balance.
In addition to the $2.6 million in designated health care fund balance usage, the total projected use of fund balance for the next school year will be nearly $3.43 million. Kenai Peninsula Borough School District administration had been anticipating that number could have landed between $4.2 million and $6.1 million, depending on decisions made on the state Legislature and borough assembly for funding allocations.
The preliminary budget document the board finalized at Monday’s meeting included an additional $660,525 in in-kind services paid to the Kenai Peninsula Borough.
“I didn’t vote for the last budget because of how much we are using for the fund balance,” said board member Lynn Hohl. “My conscience just won’t let me vote yes on taking another $660,00 out of our fund balance.”
However, the additional expenditures did not increase the deficit, according to the document. It only reflected a shift in appropriations from actual cash to labor and materials use from the borough.
Board member Tim Navarre said he felt the school district came up with a balanced budget. He said the deficit was a significant improvement to what was expected to be the worst-case scenario.
“We are fortunate to be able to maintain our educational system,” Navarre said. “We all believe this is a fair opportunity for all students in our district to get a good education.”
Hohl said she was grateful the borough chose to fund to the cap this year, and board member Sunni Hilts agreed calling it a “great move.”
The school district knew the final deficit when the state reached a decision on June 11. At that time Assistant Superintendent Dave Jones said he was still waiting on some final numbers including next year’s Public Employees Retirement System and Teachers Retirement System.
The on-behalf contribution from the state going toward the unfunded liabilities accrued for the two systems for the school district will be just under $9.56 million, nearly $24 million less than originally projected, according to the document. The contribution is recorded as an expenditure and revenue, so there is no change in the school district’s “spendable funding,” according to the document.
The school district will be transferring $1.3 million to the Food Service fund, according to the document, bringing the total general fund and transfer budget for the 2016 fiscal year to just more than $142 million.
While the district was able to keep the majority of educational services in place for the upcoming year, Navarre said he anticipates tough decisions in trying to find ways to develop a balanced budget for the next few years.
“We have got some real discussions with the state in the future,” Navarre said. “We might have some really tough decisions on cuts in the future, but this year’s budget is there.”
Reach Kelly Sullivan at firstname.lastname@example.org.