Kenai Peninsula Borough School District administrators may recommend the Board of Education vote to close Voznesenka School next year if a lease agreement isn’t reached by March.

The cost for water is the final hurdle holding up negotiations.

“If no agreement is reached, in March we will start to put in place plans to provide an alternative education,” said Dave Jones, assistant superintendent, addressing the Board of Education at a worksession Feb. 1. “If we come to an agreement I will tell you about it.”

The most recent lease signed by the school district and community council expired July 1, 2015, and was for one year. The lease signed before that was for five years.

The community council is now asking the school district to pay $750 per month in water costs.

School district administratiors believe they should not have to pay any amount outside of the officially assessed value of the school.

While the one-year lease was in effect, the school district paid the community council $1.05 per square foot for one building, and one addition to a school district-owned building and $1,000 for water per month.

Those numbers were not based on an official assessment.

During that period, between July 1, 2014 and June 30, 2015, the school district was waiting for an official assessment by the Soldotna-based Derry & Associates Inc., which the community council had agreed to hire. After not having received an assessment by spring 2015, the school district decided to hire Derry & Associates.

Community council Mayor Nazary Basargin said he attempted to contact Derry & Associates while the one-year lease was in effect but received no response.

The assessment was completed by early summer, and the assessed value per square foot remained $1.05, but that number included the cost of water.

That is 10.81 percent more per square foot than in the previous five-year lease, according to a Jan. 26 board communication.

Basargin said the community council members are requesting only what they believe are fair prices.

Basargin said he and other council members compared assessments of other structures in and around the Homer area. He coupled those values with the improvements the council has completed on the school buildings that are not required by the lease, and the council believes $1.25 to be the appropriate amount the school district should pay per month, plus the cost of water, which would be paid to the Voznesenka Water Utility, Inc.

Jones said it is important to only use an assessed market value to set how much of the school district will pay per square foot.

“(I) believe our offer has been fair and as a public entity we have to be careful about paying more than a market analysis rate,” Jones said in a previous Clarion interview. “Not only at Voz, but if we start paying more than market rate then folks in Razdolna (School) and Kachemak-Selo (School) will be the next to say we need to be paying more as well.”

For the duration of the one-year lease, the community council was requesting the next five-year lease include the $1.25 per square foot, but has since settled on the school district paying $1.05 per square foot plus a 2 percent increase per year for inflation.

The school district currently pays to have bottled water delivered to the school every month.

The school buildings do all have running water already, provided by the water utility, a nonprofit formed in roughly 2005, Basargin said. The community council is a nonprofit formed in the early 1990s, he said.

One reason the community council was organized was to help communicate the needs of the school’s staff and students to the school district, Basargin said. The water utility was formed as a separate non-profit from the community council to divvy up duties, he said.

The school district is also now agreeing to pay $1.05 per square foot for a new space built next door to the schools, which would increase the amount the school district pays the community council per year by $36,288, according to the Jan. 26 board communication.

Basargin said the community council believes it need more financial assistance from the school district to provide a better education to the school’s students.

Jones said it is important the lease is settled soon either way because the board must pass a FY2017 budget by April.

The school district must let the Department of Early Education and Development know by July 15 what schools will be in operation for the 2016-2017 school year, according to the board communication.

Reach Kelly Sullivan at kelly.sullivan@peninsulaclarion.com.