The Kenai Peninsula Borough School District's fiscal year 2012 general fund budget has the district some $3.5 million in the red and it's looking at options to try to get that number somewhere in the black.
The district is projecting a $137.3 million budget for next year based on certain revenue assumptions from the state and local government, said assistant superintendent Dave Jones at a preliminary budget presentation work session for the district's board of education Monday. But that budget falls $3.5 million short of the district's anticipated revenue streams.
The district has a few choices in trying to make ends meet, according to Jones, like finding additional revenue, decreasing expenditures or using the fund balance.
But all of these measures could be challenging for the district's already lean budget.
"When we moved forward this year what we said was we're not going to add any additional programs that are discretionary to add," he said. "We're not adding anything new next year."
Basically, the district's budget is at a bare minimum this year, and only accounts for increases that were negotiated for staff salaries, as well as other costs attributed to employee benefits and health care. An increase in intensive needs students was noted in the district's count last October and additional staff has been added to accommodate them.
"The problem with cutting in our budget is 80 percent of our budget is salaries and benefits and the rest is heat and utilities," he said. "We can't cut heat or fuel. It will come back to salaries."
Three million dollars in cuts could translate to eliminating 42 positions from the schools, Jones said.
In 2008 and 2009 the district decided to add more positions for programmatic staffing and instruction, something that Jones said would be a shame to lose so soon.
"We're again talking negative impacts to instructional gains we made the last three years," he said.
At the end of the year the district will have some $8 million in an unreserved fund balance it could tap, but that's not a sustainable funding source, Jones said.
"It's one-time money," he said. "If you spend it, it's gone."
The district already assumed that local funding would remain at the same level as the district received for fiscal year 2011, which was some $43 million. That contribution accounts for 31 percent of the district's budget.
According to district calculations, the "cap," or the maximum amount local government may contribute to the district budget, has increased some $200,000 this year to $46.1 million.
"I think you all know that politically we won't plan on using that figure," Jones told the school board Monday.
The majority of the district's revenue -- 64 percent -- comes from the state. The budget projection for next year is assuming that no increase to the state's base student allocation, or how much money the district gets per student, has been made.
Jones also said the district took a hard look at its expenditures and eliminated some unnecessary budgeted funds from several different areas.
If there are funding increases from state and local governments, that might change the game for the school district and reduce any fund balance usage, but for now it's a wait-and-see.
"We need to look and see what happens in Juneau and what happens at the borough assembly level," he said.
Brielle Schaeffer can be reached at firstname.lastname@example.org.
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