School board passes preliminary budget

Kenai Peninsula Borough School District Superintendent Sean Dusek got the go-ahead from the school board to formally request maximum funding from the borough for fiscal year 2019, but borough leadership warns that may be overly optimistic.

At their meeting Monday night, the school board approved the preliminary budget which allocates more than $142 million in general fund revenue across the district, made up primarily of funding from the borough and the state. It would also draw $1.3 million from the district’s fund balance to cover the FY19 expenditures of $143.5 million

On a state level, the district has been operating under the assumption of flat funding from the Base Student Allocation of nearly $6,000 per student from the Foundation Funding Formula, totaling just under $80 million in state funding.

The borough has 30 days to respond — otherwise the district will automatically receive their request of $41 million, a $2 million increase in funding from FY18, but an amount significantly higher than the nearly $29 million the borough is required, by law, to fund.

That $41 million is paired with the borough’s in-kind contributions, which covers facility maintenance and various support from the borough. The district has budgeted with the expectation that in-kind appropriation will be at about $11 million, putting the district’s local revenue at just under $53 million.

Borough Mayor Charlie Pierce doesn’t plan on letting that 30 day deadline pass, though, and expressed his concerns about the district’s preliminary budget. During public comment at Monday night’s meeting he laid out his plans for the FY19 budget for the borough and how it would impact the school district.

“We can flat fund you,” Pierce said. “With our $4 million deficit, we can flat fund you.”

Pierce is pitching a budget solution that will cut expenses and draw funds out of the borough’s land trust fund for fiscal year 2019 to address the borough’s deficit. This, according to Pierce, allows for flat funding for the school district from the borough, at about $39 million, but half a million dollars would be cut from the in-kind appropriations.

Pierce told the board that he hopes the two sides — borough and school district — can work closely to campaign together about the needs of the borough with “one common voice.”

“I want your help with this,” Pierce said. “I’m tired of people calling me and saying I don’t like kids. I give credit to the teachers and … thank you for the teachers that have taught my children how to survive, how to work hard. I could have left the money in the land trust fund and cut your budget $4 million.”

Over the course of the next 30 days, the borough will discuss and decide which level to fund the district at.

“Historically, we pass the budget in April to send to (the borough) the request that we have, then we wait to see what they do and what the state legislature does,” Assistant Superintendent Dave Jones said at the meeting. “Then we finalize our budget in July, after we are aware of both of their funding amounts. Then we react administratively, depending on what they do.”

The district has been warning throughout the budget cycle that their administrative reaction, if the borough doesn’t fund to the maximum allowable, would be an increase in the pupil-to-teacher ratio (PTR), thus eliminating 11.5 full-time positions across the district.

The school board didn’t unanimously approve the FY19 budget, though, with two ‘nay’ votes. One, from school board member Lynn Hohl stemmed from concerns about how the potential PTR increase would affect Seward area schools.

In a resolution sent to the board, the Seward Site Based Council expressed fears that smaller schools would not be able to effectively absorb any type of PTR increase.

“We understand the need for a conservative budget during these times of uncertainty and we appreciate how responsible the KPBSD has been over the years in their budget process,” the resolution states. “However, these current PTR increases will cause extreme difficulties for the smaller middle and high schools across the district.”

Hohl said her vote was a reflection of the sentiment of her district.

The second ‘nay’ vote came from school board member Dan Castimore, who said he was concerned that members of the school board receive health insurance while “we have employees that work 28-hours a week that don’t get medical insurance. It’s a significant expense … I don’t think it’s warranted and I don’t think it’s appropriate.”

The FY19 district budget will most likely see changes and revisions between now and July, but, despite Pierce’s comments, several board expressed confidence in the document.

“I’m proud of our budget,” school board member Tim Navarre said. “It doesn’t mean that we don’t have to make tough decisions in the future. We can’t spend all our fund balance. We have to fight each balance as we go along. If the assembly doesn’t fund us to the cap, we will be back at this table making some tough decisions as to what we do and what we think the future holds for us.”

The borough must appropriate the local share of funding by May 31.

Reach Kat Sorensen at ksorensen@peninsulaclarion.com

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