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KPBSD district seeks $1.18 million increase

Posted: Friday, December 08, 2006

With 126 more students enrolled than were expected this year, peninsula schools Superintendent Donna Peterson has asked the Kenai Peninsula Borough Assembly to approve a $1.18 million increase in local funding.

No ordinance to make that change has been drafted, but Peterson asked for the increase in a Dec. 5 letter to assembly President Ron Long. In it, she said the Kenai Peninsula Borough Board of Education had approved a revision to its fiscal year 2007 budget at its Dec. 4 meeting, one that would bring the local effort amount to almost $37.95 million.

Schools are funded through a combination of state and local revenues. State allocations are governed by its Foundation Formula and delivered through a base student allocation, or BSA. State law caps the amount of local revenue that can go to schools. The borough always has appropriated the fullest amount, using its sales tax revenues to cover the bill.

Midyear education budget revisions are necessary to incorporate the most recent cost analyses into the budget, in part to make those budget numbers relevant for comparison purposes in preparing the next year’s budget. Among the costs updated are the salary and benefit accounts of employees hired in the new school year, as well as updated enrollment data from the Department of Education and Early Development.

Peterson said the district did not request an increase in the local effort when the fiscal year 2007 budget was prepared last spring, deciding it was wiser to wait until students arrived this fall, primarily because in recent years enrollment has been declining.

“It doesn’t make sense to add local effort revenue only to take it away later,” she said.

The assembly appropriated almost $36.8 million, the most ever, based on a BSA of $5,347. The Legislature ended up increasing the BSA to $5,380.

The increase of 126 students and the increase in the BSA necessitate revising the current $98.25 million upward to nearly $100.3 million. That’s a boost of just over $2 million in total, part of which will be covered by the $1.18 million increase in the local effort. The rest will be covered by increased state allocations.

In a memo to Peterson, Melody Douglas, the district’s chief financial officer, noted that full-time equivalent (FTE) enrollment went from 9,244 students to 9,370 students, the majority of the increase coming in the borough’s Connections home school program (more than 100), with other changes within borough charter schools.

The requested budget revisions would also cover increases in utility costs ($115,386 more for electricity; $122,182 more for natural gas; and $37,675 more for fuel), a $400,000 software upgrade project and other adjustments.

The bulk of the budget increase, about $1.24 million, is slotted to go into a district contingency fund that could be tapped for such things as unexpected healthcare costs, worker compensation costs or other unanticipated costs, Douglas said.

“Should utilization of these funds not be necessary during FY07, then they will become part of the fund balance at the end of this fiscal year to be used for future years needs,” she said.

Assembly President Long said the assembly would likely take up an ordinance on the matter in January.

Hal Spence can be reached at harold.spence@peninsulaclarion.com.



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