Slim budget has administrators making challenging decisions

School board searching for solid answers

Posted: Wednesday, February 19, 2003

Financial conversations in the Kenai Peninsula Borough School District have been decidedly grim in the last two months, and things didn't look any brighter this week as school board and borough assembly members met in work sessions to discuss the 2003-04 district budget.

School board members met in a work session Monday afternoon to discuss administration recommendations to balance the fiscal year 2004 budget. On Tuesday, board members met with the assembly to further discuss the proposed budget.

Neither meeting produced solid answers, nevermind a light at the end of the tunnel.

"We have challenges before us," chief financial officer Melody Douglas told the board. "I've been involved in the budget process for 15 years, and this is the first time the budget has absolutely no new programs. In fact, we've been paring back significantly."

Nonetheless, as of Tuesday, the district had a $3.2 million "challenge," Douglas said.

The preliminary budget, introduce to the school board Jan. 6, was about $2.9 million short even after the district adjusted the pupil-teacher ratio to put more kids in each classroom, cut 56 positions and save about $2.3 million.

The preliminary budget also was what Douglas called "modified status quo."

"You can't cut year after year and call it status quo," she said.

The budget included no new programs and only minimal necessary increases, such as a 2 percent estimated rise in utility costs.

This week, Douglas learned that property and liability insurance costs to the district are likely to increase an additional $302,000, bringing the deficit to $3.2 million.

The budget has gone before a review committee and a number of public hearings and now the district is suggesting some significant cuts to pull the budget into balance before it is formally presented to the school board and assembly.

Those cuts would include:

Elimination of the curriculum adoption budget;

Elimination of the budget for 12 full-time unallocated staff positions;

A $150,000 cut to the central office budget;

Cutting 14 full-time custodial positions;

Cutting the co-curricular budget by $244,000, probably by eliminating travel funds; and

Reducing districtwide supply budgets to force the remainder of the budget in line.

Discussions of those cuts left several school board members sitting with their head in their hands.

"I'm so depressed I just can't even talk," school board member Margaret Gilman said during a break Monday afternoon.

"Every year, it just gets worse," board member Debra Mullins agreed.

While district administration acknowledged that the cuts would balance the budget -- which the district is required to do by March -- many of the cuts are unimaginably tight.

For example, cutting the curriculum adoption budget means the district will not get a single new text book next year. Eliminating the unallocated staff positions doesn't result in any layoffs, but it does mean the district won't have the flexibility to deal with "emergency situations."

"That means if you end up with a class of 36 students somewhere, you can't bring in an extra teacher," Gilman told the assembly.

The central office often is offered up for cuts from the public, but as it is, administration accounts for only about 4 percent of the district's general budget.

Likewise, the custodial cuts are apt to cause some pain. Dave Spence, the district planning and operations director, told board members Monday he recently traveled to Fairbanks to learn how that district significantly reduced its custodial costs. He said he went hoping to find ideas to improve the Kenai Peninsula district's efficiency, only to learn the peninsula already was more efficient than the Fairbanks-North Star district.

The improvements in Fairbanks took custodial spending from 10 percent down to 6 percent of the total budget, he said. On the peninsula, custodial spending accounts for about 4 percent of the budget.

Cringing at the severity of the proposed cuts, board and assembly members spent much of their time brainstorming "outside the box" solutions to the problems.

For example, several assembly members questioned the district's practice of purchasing new computers each year for students in Connections, the district's home-school program.

While that program is one under scrutiny, administrators explained that the computer purchases actually are part of the district and borough's cooperative technology update plan. After one year, the Connections computers are cycled into schools, thereby upgrading technology across the district. That project is paid for in part by an old borough appropriation, which is outside the cap funding excluded from the state law that limits borough contributions to the district. It also is funded by federal E-rate money, which means if the district discontinued the process, it ultimately could lose dollars instead of saving.

Another question raised by assembly members addressed district efforts to target home-school students who do not use district programs and thus don't bring state money into the district. Assembly member Betty Glick insisted that more efforts had to be made to entice families to choose public schools over home school or private schools.

"We say there are less kids in the area, but the census says there are 12,000 school-age children in the borough," Glick said. "Only 9,000 some are in public schools."

School board member Dr. Nels Anderson, however, asked just what more the district could do, explaining that magnet classrooms, alternative schools, charter schools and the Connections program all are designed to provide families with educational options.

Finally, board and assembly members discussed possibilities for outsourcing cocurricular activities to local community groups or finding a way for the borough to fund the nonacademic programs.

District and borough officials said there are a number of challenges to such ideas. For example, outsourcing sports to community groups could lead to accusations of inequity between different communities and sports. If teachers continued to coach sports, the district could face potential labor suits due to changes in pay. And the borough would need at least some level of recreational authority to run such programs.

Still, all the suggestions are under advisement and will continue to be discussed as the budget process progresses.

And, most importantly, district and borough representatives said they would continue to push for more money and equity at the state level of funding.

A study on the area cost differential, which determines how about 10 percent of all state education funding is distributed between districts, recently found the Kenai Peninsula Borough School District is underfunded. That study will be presented to the Legislature today, and testimony will be taken at a public hearing on the study at the Kenai Legislative Information Office at 1:30 p.m. today.

Several bills currently before the Legislature also address education funding in various forms. For example, some suggest increasing the per-student rate districts receive in the funding formula, while others suggest moving Learning Opportunity Grant money into the foundation formula.

The district cannot comment on specific bills, but its legislative priorities statement supports increasing the per-student rate to at least $4,500, redressing inequities in the area cost differential, moving LOGs into the formula and rewarding communities that have exceptional efficiency statistics and that are fully supported by local government (as the KPBSD is by the borough).

Though no magic answers came out of the meetings this week, board members and district administrators repeatedly thanked the assembly for its continued support of the district.

"I think the borough has done a heck of a lot and continues to," agreed assembly president Pete Sprague. "But we're still in a really difficult situation, and we'll still have these difficult discussions in the next few months."

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