The Kenai Peninsula Bor-ough School District's Board of Education approved Monday night a budget revision appropriating $2.7 million in extra general fund income and cutting $627,000 from the pupil transportation fund.
The revision is a result of the passage of Senate Bill 202, the state's education funding bill, which increased the per-student allocation district's receive by rolling Learning Opportunity Grants into the foundation formula.
The bill also revamped the state's approach to funding pupil transportation, cutting back the amount of money it provides to districts.
In many ways, the bill was a godsend for Kenai Peninsula schools, which were facing a severe budget crisis. It meant an additional $2,285,470 from the state for general fund expenses, and it increased the amount the borough could contribute to the district by $525,658.
But while the budget for the 2004 fiscal year may balance, it still is at the expense of several programs and funds.
"I don't think any of the decisions we make are made lightly," said school board member Dr. Nels Anderson. "It's not easy. But if you think this is bad, wait until next year."
Board Vice President Sammy Crawford agreed.
"Dealing with this budget is very, very difficult," she said. "I concur with Dr. Anderson: It's going to get worse and worse. I wish people in the state making these decisions could see the impact they have on local communities and local families."
The board did get to make some positive choices Monday night, reinstating money to some programs and funds that had been cut earlier in the budgeting process.
The budget revision appropriated about $400,000 to the unallocated fund, which will allow the district to deal with any "trouble spots," such as overcrowded classrooms in the fall.
It also returned about $1,236,724 to the supply budget, which had been cut in half as a "place holder" in case extra money did not come through from the state.
The revision also placed $624,356 in the math and foreign language curriculum adoption fund and $275,048 in a fund for summer school next year. For the past two years, the district has operated a summer school program for students needing help catching up to their grade level. The program was funded by Learning Opportunity Grants.
"It was an excellent program last year, and this year we exceeded all expectations," the district's chief financial officer Melody Douglas told the board while explaining the summer school allocation.
Douglas pointed out that curriculum adoption and summer school expenses come late in the year and the board always has the option of revising the budget again if necessary. That means if emergency situations occur or the district finds better ways to use its money, changes can be made.
While board members acknowledged the importance of these four administration-recommended allocations, they also expressed concern for other budget cuts that were not remedied with the revision.
For example, board member Margaret Gilman wanted to use the extra general fund money to lower the pupil-teacher ratio, which was increased for the 2003-04 school year last winter.
Board member Al Poindexter agreed, arguing that the PTR changes would have a significant negative impact on small schools in the fall.
Board members also were concerned about the surviving elimination of activity travel funds and the increase of student participation fees. (See related story, page A-1.)
In addition to the general fund accounts, the pupil transportation portion of the budget revision also caused much discussion.
Senate Bill 202 revised the way the state funds pupil transportation, changing it from a route-based reimbursement program to a per-pupil allocation. The changes essentially amount to a $627,495 loss to the district.
Pupil transportation is an "outside the cap" expense, meaning the district legally could ask the borough to make up the difference. However, Douglas said that was not the administration's recommendation.
"We're trying really hard not to go back to the borough. They've taken a hit this year, too," she said. Douglas said it was her understanding the assembly plans to continue funding the district "at the cap," even though it means doling out an additional $500,000.
"To go ask for an additional $600,000 seemed not to be a good thing," she said.
Douglas said the administration believes the difference can be made up with some creative changes to the pupil transportation program. One change would be cutting at least 10 bus routes. The more significant change, however, is changing the way pupil transportation works in Seward.
At present, the district contracts with Laidlaw to provide busing for most of the district. Seward, however, is the exception. The district owns a fleet of buses in the Seward area and operates the busing system there.
Until now, the method has worked because the state reimbursed the district for the purchase of new buses. The used buses then would be transferred into the district's extracurricular-use fleet.
That all changes with Senate Bill 202, though. The district no longer will be reimbursed for bus purchases, meaning it assumes a debt of about $124,000 in past purchases.
The district also is due to buy two new buses, which would cost about $200,000 this year. And, the district has to pay higher labor expenses on its own than under the contract with Laidlaw.
Ceasing its own busing operation in Seward and converting to a contract with Laidlaw in that area would save the district an immediate $72,000 and would avoid the $200,000 bus purchase, Douglas said.
The idea drew fire from some members of the public, though.
Terry Woodward, president of the Kenai Peninsula Education Support Association, pointed out that the decision would directly affect the lives of the eight Seward bus drivers employed by the district.
She said the district provides a better insurance package than Laidlaw and higher wages and that employees need to be informed about the potential changes.
"I think some are aware this is taking place, but they need to be warned, because this is affecting their lives," Woodward said.
Sandy Roach, one of the Seward bus drivers, added that the Seward community is unaware of the decisions being made and deserves a chance to weigh-in on the situation. She asked that the decision be postponed.
The board, however, decided the budget needed immediate attention, both because the new school year is rapidly approaching and because the district is required to present a complete budget to the assembly and to the state this month.
The board voted 4-2 in favor of the budget revision, with Poindex-ter and Gilman dissenting.
Poindexter said he needed more time to consider the matter, and Gilman wanted the revision to change the pupil-teacher ratio. Deborah Germano was absent from the meeting.
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