Legislature(2023 - 2024)SENATE FINANCE 532
03/05/2024 09:00 AM Senate FINANCE
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| Audio | Topic |
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| Start | |
| School District Fund Balance Discussion | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 5, 2024
9:01 a.m.
9:01:36 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
Senator Lyman Hoffman, Co-Chair
ALSO PRESENT
Dr. Lisa Parady, Executive Director, Alaska Council of
School Administrators; Nils Andreassen, Executive Director,
Alaska Municipal League; Andy Ratliff, Chief Financial
Officer, Anchorage School District; Dr. Randy Trani,
Superintendent, Matanuska-Susitna School District; Katie
Gardner, Deputy Superintendent of Operations, Matanuska-
Susitna School District; Dr. Madeline Aguillard,
Superintendent, Kuspuk School District; Martha Morgan,
Business Manager, Kuspuk School District; Dr. Cyndy Mika,
Superintendent, Kodiak Island Borough School District;
Sandy Daws, chief Financial Officer, Kodiak Island Borough
School District; Terri Walker, Superintendent, Northwest
Arctic Borough School District; Megan Williams, Director of
Administrative Services, Northwest Arctic Borough School
District; Michael Robbins, Superintendent, Ketchikan
Gateway Borough School District.
SUMMARY
SCHOOL DISTRICT FUND BALANCE DISCUSSION
9:02:10 AM
Co-Chair Stedman commented that the committee would
consider testimony regarding school funding. He discussed
the order of testimony.
^SCHOOL DISTRICT FUND BALANCE DISCUSSION
9:04:21 AM
DR. LISA PARADY, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF
SCHOOL ADMINISTRATORS, introduced herself and explained
that the Alaska Council of School Administrators (ACSA)
represented all superintendents, elementary and secondary
principals, school business officials, and education
leaders across the state. She mentioned ACSAs position
statement that contained a pencil chart. She noted that
since 2017, there had only been a $30 increase to the Base
Student Allocation (BSA). She estimated that adjusted for
inflation, the FY 20 BSA of $5,960 had an FY 12 value of
$4,682. She noted that there had been a huge loss of buying
power for school districts. She contended that adjusted for
inflation since 2017, the BSA would be $7,373.
Dr. Parady relayed that school districts would be sharing
figures and framework of operations. She thought the fund
balances had caused great confusion in recent years, and
she hoped the school districts' presentations would provide
clarity. She mentioned partnering with the Alaska Municipal
League (AML) and referenced a white paper entitled "Fund
Balance Explainer" (copy on file). She relayed that AML
Executive Director Nils Andreassen would present related
slides.
9:07:16 AM
NILS ANDREASSEN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE, discussed a presentation entitled "ACSA School
District Presentation to Senate Finance Committee March
5, 2024," (copy on file). He looked at slide 2, "Fund
Balance Overview":
Purpose
• Smooth Cash Flow Management
• Offset Revenue Shortfalls
• Offset Unexpected Expenditures
• Maintain Services
• Improve Long-Term Planning
• Enhance Credit Ratings
Types
• Non-Spendable
• Restricted
• Committed
• Assigned
• Unassigned
• Deferred
9:08:58 AM
Mr. Andreassen spoke to slide 3, "Fund Balance
Considerations":
• Appropriation timelines receipt of federal, state,
and local contributions at one time increases
unassigned fund balance when reported on interim
basis.
• Payroll lag on cash basis
• Teacher salaries defer to summer months.
• Planned purchases may not be encumbered
• Student activities held for use later in school
year
9:09:33 AM
Mr. Andreassen referenced slide 4, "GFOA Fund Balance
Guidelines," which showed the text of the guidelines, which
were guidelines formerly adopted and published on the
website of the Government Finance Officers Association
(GFOA). He highlighted a portion:
Nevertheless, GFOA recommends, at a minimum, that
general-purpose governments, regardless of size,
maintain unrestricted budgetary fund balance in their
general fund of no less than two months of regular
fund operating revenues or regular general fund
operating expenditures.
9:10:10 AM
Mr. Andreassen turned to slide 5, "Fund Balance Allocations
Feb 1, 2024":
61% percent of school districts' fund balance is
either non-spendable (like inventory) or set aside for
a specific purpose.
The remaining 39% must cover cash flow, future bills
and payroll, and any emergency needs.
Districts with higher unassigned fund balances may
experience timing issue discussed previously.
9:10:48 AM
Mr. Andreassen considered slide 6, "Fund Balance vs.
Expenses":
The statewide total unassigned fund balance amount is
equivalent to just 8% of school districts' total
expenses.
22 districts with $0 as unassigned fund balance.
Only five districts fall above the GFOA guidelines of
2 months.
9:11:33 AM
Mr. Andreassen displayed slide 7, "Takeaways FY24
Budgets":
16 of 53 school districts have balanced budgets or
small surpluses in their FY24 Operating Fund budgets.
Use of unassigned fund balance only pulls 15 out of
deficits.
Mr. Andreassen thought it was worth noting that budgets
were updated throughout the school year as bids came in and
were adjusted with amendments.
9:12:05 AM
Mr. Andreassen highlighted slide 8, "Use of Fund Balance
for Deficits":
If the total unassigned fund balance were used to
cover the total budget deficit, it would leave $110m
for the 2024-2025 school year or just 9 school days
of expenses.
Mr. Andreassen relayed that 22 school districts did not
have fund balances to address budget deficits.
9:12:42 AM
Co-Chair Stedman asked to go back to slide 8. He understood
that fund balances could not be moved from one school
district to another.
Mr. Andreassen affirmed that it was not possible to move
fund balances between districts. He thought it appeared as
though there was $183 million available for all the
districts, but only some was available to some districts.
The funds could not be used to address all districts
deficits.
Co-Chair Stedman thought there was a breakdown on fund
balances on slide 7. He asked about the date of the fund
balances.
Mr. Andreassen noted that the table on slide 7 showed the
FY 24 budgets. The information was a snapshot in time based
on the July 15 budgets that were submitted by districts. He
noted that some of the districts may have already pulled
the fund forward, while other school districts would use
the fund blance for actuals over the school year.
Co-Chair Stedman asked if the balances shown were what was
in the account on July 1, 2023.
Mr. Andreassen noted that the amounts showed the budget
numbers submitted rather than the fund balance amounts.
Co-Chair Stedman clarified that some of the fund balances
were constrained, and some were not.
Dr. Parady noted that the six school districts that were
presenting would discuss its fund balance.
Co-Chair Stedman wanted to be clear for the public that it
was not possible to move a fund blance from one district to
another, and some districts had declining enrollment while
others had advancing enrollment, and all the districts
needs were different.
9:15:19 AM
Senator Bishop commented on slide 7 and made note of all
the red figures on the table which indicated budgets in
deficit. He thought the zero figures indicated a balanced
budget. He wanted to see the slide with current numbers.
Co-Chair Stedman thought that the committee would discuss
current figures with school districts presenting.
9:16:37 AM
AT EASE
9:17:50 AM
RECONVENED
ANDY RATLIFF, CHIEF FINANCIAL OFFICER, ANCHORAGE SCHOOL
DISTRICT, introduced himself and explained that he would
discuss some financial history, fund balance, and future
years for the Anchorage School District (ASD). He showed a
data table of ASD fund balance data (copy on file). He
highlighted that the table showed historic enrollment,
budget history, and current budget. He cited a decline in
enrollment since 2023. He noted an increase in the adjusted
average daily membership (ADM), primarily due to a change
in statute. He noted that he had slides that would provide
further details on the change in enrollment.
Mr. Ratliff discussed ASDs budget history, which included
the Public Employees' Retirement System (PERS) and
Teachers Retirement System (TRS) on-behalf payments. The
bottom of the budget history showed the end-of-year fund
balance, which had been hovering around $120 million to
$130 million until 2023, when there was an uptick in
funding through vacancies, savings, and state one-time
funding. He made note of $225 million in maximum local
contributions the city could contribute to ASDs operating
fund, and the actual amount was approximately $221 million.
The difference was due to the timing of state one-time
funds.
Co-Chair Stedman asked if Mr. Ratliff could define the
additional allowable amount and the maximum allowable
amount. He thought the slides from the other districts
would be similar.
Mr. Ratliff explained that the maximum allowable amount was
both the required local contribution (based on property
taxes in the district), and the additional allowable amount
was calculated as 23 percent of basic need. Basic need was
the BSA times the adjusted ADM.
Co-Chair Stedman asked if the amount listed was up the
allowable maximum under state statute.
Mr. Ratliff explained that the $225 million was the maximum
amount and the $221 million was the actual amount. He noted
that the state funding increased the allowable maximum.
9:21:21 AM
Mr. Ratliff discussed a presentation entitled "Senate
Finance Presentation," (copy on file). He looked at slide
1, "Budget Development Process," which showed a graphical
representation of ASD's 2023-24 spending plan. He noted
that the biggest spending category was direct instruction
that funded teachers and paraprofessionals, as well as all
supplies and materials/equipment that supported direct
student instruction. Student support was the next biggest
line item, which included nurses, counselors, security,
librarians, principals, clerical staff, and other items.
Operations and maintenance of the schools was about $84
million. Administration, which included superintendents,
school board, finance, purchasing, budget, human resources,
IT, and other areas was about $42 million.
Mr. Ratliff noted that there was frequent discussion around
cutting school administration. For the departments under
his purview, he reported having cut half the chief
financial officers staff, a third of the budget staff, 25
percent of the accounting staff, and about 17 percent of
the purchasing staff over the previous 10 to 12 years. He
noted that ASD was making adjustments where it could find
efficiencies but was approaching a mission critical
position where it was not possible to take any more from
administration.
Mr. Ratliff referenced the FY 25 budget, which had been
submitted to the assembly for approval and had factored in
a projected $100 BSA increase. The school board had added
the funds back in order to not have to increase class
sizes. He mentioned retaining programs and other items. He
cited using $71 million of the districts fund balance to
balance the budget. He referenced a slide presented by Mr.
Andreassen which had shown that ASD intended to use $5
million to balance its budget. He explained that ASD was
counting on funding that did not yet exist and was burning
down its fund balance. He mentioned taking on more risk,
and vacancy and turnover.
9:24:25 AM
Co-Chair Stedman asked Mr. Ratliff to discuss budgeting and
unfilled positions.
Mr. Ratliff explained that ASD estimated how many positions
would go unfilled. For the current year, ASD estimated
about $28 million of unspent salary and benefit money, but
considered that it would be closer to $41 million, which
would increase available fund blance for the following
year. He cited about 400 to 450 vacancies the district had
had for the past two years, which was about 8 percent of
the districts workforce.
Co-Chair Stedman thought the vacancies would provide about
$20 million in positive cash flow.
Mr. Ratliff estimated that the vacancies would provide
about $13 million.
9:25:21 AM
Senator Wilson asked for Mr. Ratliff to discuss use of the
fund balance to cover the districts deficit. He asked if
the budget process used a projection of estimated revenue.
Mr. Ratliff relayed that the $45 million in fund balance
was for the current years budget, but the amount had
changed when one-time state funding was received. He
explained that the $71 million was planned for the
following year, which would reduce the fund balance to
approximately 1 percent of expenditures. He mentioned
hiring delays, making significant reduction in supplies and
services, and not refreshing curriculum.
Senator Wilson asked about Mr. Ratliffs comment regarding
an estimate of an equivalence in BSA funding.
Mr. Ratliff relayed that ASD estimated an approximate $100
increase in the BSA just to retain mission critical items
and not have to displace staff.
Co-Chair Stedman asked if the $100 was on top of the
current years appropriation.
Mr. Ratliff relayed that the $100 estimate was on top of
the $5,960 BSA that was currently in statute.
9:26:56 AM
Mr. Ratliff spoke to slide 2, "Funding Since 2017 - BSA
Equivalents," which showed a bar graph depicting the BSA
over time. He explained that the other bars were indicative
of how ASD balanced the budget. The yellow bar in FY 25 was
the BSA equivalent of how much ASD was using in fund
balance. The budget had been balanced through Elementary
and Secondary School Emergency Relief (ESSER) funds, state
one-time funds, budget cuts. The line at the top showed
what the BSA would be had it been inflation proofed.
Co-Chair Stedman did not think the committee was concerned
with the inflation adjusted amount, but rather what was
needed for ASD to run its school system.
Mr. Ratliff thought ASD would spend through its fund
balance by FY 26.
9:28:00 AM
Senator Bishop observed the fund balance and pondered how
long the district could operate until there was a zero fund
balance.
Mr. Ratliff noted that there would still be other
categories of required reserves, which were on the next
slide.
9:28:28 AM
Mr. Ratliff advanced to slide 3, "Fund Balance FY24
General Fund Projection," which showed a flow chart of the
$71 million in reserve balance going towards pre-paid
items, inventory, federal impact aid (payment in lieu of
taxes), encumbrances, and self-insurance. Much of the
encumbered funds were for charter schools, which could
encumber unspent funds and carry it forward. He thought
charter schools would be spending much of their balance for
the following year. He noted that the unreserved funds,
shown on the bottom half of the slide, were reported
differently.
Mr. Ratliff referenced Mr. Andreassens testimony and noted
that there was a disparity between the states reporting
and the reporting that was required of districts. He
mentioned the $71.2 million in unreserved funds that would
go towards the FY 25 deficit. If ASD were to get additional
funding from the state, it would reduce the reliance on
fund balances. He commented that it was not best practice
to use the fund balance down to zero. The $6.2 million in
unassigned funds would be used for emergencies. He
emphasized the need to maintain quality education in the
schools.
9:30:15 AM
Mr. Ratliff turned to slide 4, "General Fund Historical
Attrition," which showed a bar graph of the district's
general fund and a table of total attrition for each year
from 2013 to 2025. He highlighted that the red line was a
percentage of the total budget, and the blue bars were
adopted salary and benefits. The chart at the bottom showed
how much had been realized over the years. There had been a
steady increase that was indicative of recruitment and
retention issues. He cited that the district was increasing
attrition estimates, which was adding more risk.
Co-Chair Stedman thought Mr. Ratliff had indicated that ASD
needed $110 over the base BSA to make the school system
work.
Mr. Ratliff commented that ideally ASD would have more, as
it was cutting in many areas including administration,
special education, curriculum, and technology. He
reiterated that ideally ASD would not use its $71 million
fund balance, which could be used it to help maintain
facilities. He noted that ASD currently had a $1 billion
backlog in deferred maintenance.
Co-Chair Stedman asked Mr. Ratliff to address
transportation costs and what ASD was doing to maintain
hard assets.
9:31:58 AM
Mr. Ratliff showed slide 5, "Local Taxes and State Revenue
- Change since 2017," which showed a table of changes in
revenue streams, including for transportation and operating
funding. He pointed out that in 2017, transportation was a
fully self-funded program from the state. In 2017 the state
paid 100 percent of transportation, while currently the
state paid a little under $20 million, and local taxpayers
paid close to $9 million. He understood that there had been
declines in enrollment and there was a need to right-size
the district with regard to consolidations. He mentioned
that consolidations would begin in a few weeks. He
referenced town hall meetings and community engagement, and
the community had been unhappy with lack of involvement
during school closure decision making.
Co-Chair Stedman summarized that there was an additional
$110 needed, and there would be school system failure if
the BSA did not reach $1,400 within two years.
Mr. Ratliff answered affirmatively. He pondered the effect
of flat revenues and a spent-down fund balance after two
years without an increase to the BSA. He agreed that the
result would be significant, and that ASD would not look
the same.
Co-Chair Stedman asked Mr. Ratliff to get back to the
committee with a projection of ASD's financial position for
the following three years, using estimated enrollment
projection numbers.
Mr. Ratliff agreed to provide the information.
9:34:45 AM
Senator Wilson thought ASDs average daily enrollment had
seen a big spike in correspondence students. He asked if
there had been a survey to determine why students were
leaving brick and mortar schools for correspondence.
Mr. Ratliff showed slide 7, "Average Daily Membership and
Enrollment History," which showed a table including
enrollment and adjusted ADM. He thought that the Covid-19
pandemic had resulted in many people choosing the alternate
mode of school and had not returned. He noted that there
were no surveys to back up the data. He explained that the
chart reflected the fact that ASD enrollment had gone down
by 10 percent in the previous ten years. He identified that
the adjusted ADM had only gone down about three percent,
which he explained was predominantly due to a 38 percent
increase in intensive-needs students that resulted in an
adjustment.
9:36:17 AM
Senator Merrick wanted to see information on class sizes in
ASD and what would happen to class sizes if the changes Mr.
Ratliff described took place.
Co-Chair Stedman asked Mr. Ratliff to incorporate the
information into the other data he had requested that
included enrollment projections.
Mr. Ratliff agreed. He looked at slide 9, "PTR Snapshot for
All Grades," which showed a snapshot of pupil/teacher ratio
(PTR) in two tables that enumerated the FY 15 and FY 25 PTR
for all grades. He estimated that increasing PTR across the
board was equivalent to about $7 million to $8 million.
9:37:09 AM
AT EASE
9:38:27 AM
RECONVENED
Co-Chair Stedman relayed that the committee would hear from
the Matanuska-Susitna (Mat-Su) School District. He noted
that the district was a growth area of the state, which had
gone from about 13,000 students at the turn of the century
to close to 20,000 presently.
9:39:16 AM
DR. RANDY TRANI, SUPERINTENDENT, MATANUSKA-SUSITNA SCHOOL
DISTRICT, discussed a report entitled "Superintendent
Report" (copy on file). He noted that he had truncated the
presentation in the interest of time, and he hoped the
committee would have the chance to peruse the first part of
the presentation which reflected academic growth in the
district. He highlighted slide 18, "AVERAGE DAILY
MEMBERSHIP," which showed a bar graph. He relayed that Mat-
Su School District (MSSD) had managed flat funding
differently than other districts was that as more students
came into the district, it had differentially added staff
to support them. He specified that if the BSA increase was
zero, MSSD would cut $30 million or use fund balance; if
the BSA increase was $340, MSSD would cut $18 million or
use fund balance; and if the BSA increase was $680 MSSD
would cut $6 million.
9:40:52 AM
KATIE GARDNER, DEPUTY SUPERINTENDENT OF OPERATIONS,
MATANUSKA-SUSITNA SCHOOL DISTRICT, continued to discuss
MSSD. She noted that the district was growing, and cited
that while growth had steadied, MSSD had grown about 50
percent since 2000. She mentioned a dip in enrollment in
2020 and noted that MSSD had rebounded and continued to see
growth year over year.
9:41:33 AM
Ms. Gardner looked at slide 19, "AVAILABLE ANNUAL
RESOURCES," which showed a bar graph. She commented that
the school district had relied on inconsistent funding to
make sure students needs were met. While there had been
flat funding from the state, MSSD had relied on state one-
time funds, Covid relief funds, and the districts fund
balance to sustain operations. She noted that part of the
projected deficit for FY 25 was a result of the funding
sources no longer being available or fully expended. She
noted that MSSD would be talking with its board regarding
using fund balance to help with FY 25. There were still
anticipated reductions to balance the budget for FY 25.
9:42:41 AM
Ms. Gardner addressed slide 20, "STATE FOUNDATION FORMULA,"
which showed a bar graph depicting ten years of historic
general fund BSA. She commented that the local community
was also growing at a rapid rate and pondered an increase
in assessed values causing diminished funding from the
state.
Ms. Gardner advanced to slide 21, "STATE FOUNDATION
FORMULA," which showed a comparison of 2019 and 2024 state
BSA and local contribution funding of MSSD. She observed
that the percentage of local contribution had grown.
Ms. Gardner looked at slide 22, "EXPENDITURE BY STATE
FUNCTION," which showed two pie charts the depicted MSSD
expenditures between 2019 and 2024. She noted that the
district was focusing its decision in educational areas and
keep other administrative areas flat or with slight
reduction to maintain class size as much as possible. She
mentioned keeping class size as a consistent priority after
surveying families and community. She noted that the
district had used ESSER funds to support maintaining class
sizes. Most of MSSDs expenditures for Covid-relief funds
had been in special education and regular education areas.
The funds were revenue that the district would have to make
up for in FY 25.
9:45:11 AM
Ms. Gardner spoke to slide 23, "HISTORIC UNASSIGNED FUND
BALANCE," which showed a bar graph of unassigned fund
balances since FY 14. She explained that board had
established a minimum fund balance for unforeseen
circumstances. She mentioned having to build a new school
after an earthquake. At fiscal year-end 2023, MSSD had
approximately $20 million in fund balance, with about $3
million reserved for charter schools. The funds had been
allocated to charter schools, and the schools maintained
the funds. She explained that the red line was the minimum
fund balance set by the school board two years previously,
the blue portion of the bar was the district unassigned
funds, and the green portion denoted the charter school
balances.
9:46:34 AM
Senator Kiehl asked if Ms. Gardner could address the $12
million funding drop from 2020 to 2021.
Ms. Gardner explained that the adjustment happened over
time. She recounted that after the earthquake, the district
had combined Houston Middle School and Houston High School
into one facility because one of the schools was torn down.
In order to provide a replacement school built, the
district had contributed a significant amount of fund
balance to ensure the construction began. In the end there
were funds identified, and the funds originally provided
were used to fund Mat-Su Central School, which was
underway.
Co-Chair Stedman asked for details on the maximum allowable
fund balance of $91 million and the contribution of $71
million. He referenced the MSBSD fund blance data sheet
(copy on file).
9:48:14 AM
Ms. Gardner explained that the maximum allowable denoted
the maximum amount that the Mat-Su Borough could contribute
to education. The borough was contributing $71 million for
FY 24, leaving $20 that could be contributed. She mentioned
a tax cap approved by the assembly that had limited the
borough from being able to fund up to the maximum allowable
amount.
Co-Chair Stedman asked about the projected deficit for the
coming year.
Ms. Gardner cited that with no increases to the BSA,
projected deficit would be approximately $30 million.
Co-Chair Stedman asked if Ms. Gardner was calculating form
the base BSA or the current funding in the present years
budget.
Ms. Gardner relayed that in projecting the $30 million
deficit, the district was using the current BSA at $5,960
with MSSDs projected enrollment for the following year.
Co-Chair Stedman asked about a deficit if the next year was
a repeat of the current year.
Ms. Gardner answered, "$18 million."
9:50:36 AM
Senator Kiehl asked if Ms. Gardner could discuss the
relationship between the $71 million contribution and the
required local contribution.
Ms. Gardner believed the Mat-Su Borough contributed
approximately $27 million above the required local
contribution.
9:51:17 AM
Ms. Gardner referenced slide 24, "STATE TRANSPORTATION
FUNDING," which showed a bar graph with ten years of
audited historic revenue and expenditure comparisons. She
noted that the district covered a large geographic area
with some of the longest and most comprehensive
transportation system. She noted that the district had
experienced a deficit in transportation over the previous
ten years. She identified that there were two times when
there was not a deficit for student transportation: in 2020
when there was a quarters closure, and a month-long school
bus strike the previous year. The district's projected
deficit for FY 25 was about $5 million. The district would
have to take operating funds for student education to fill
the deficit for transportation for operations to continue.
Co-Chair Stedman asked for Ms. Gardner to equate the dollar
change in the overall system through the formula.
Ms. Gardner estimated that the increase would equate to be
about $315 per student for transportation.
Co-Chair Stedman reiterated that MSBSD was a growing
district.
9:53:14 AM
Senator Wilson considered the maximum allowable
contribution and asked about the minimum BSA increase
required to retain status quo in the district.
Ms. Gardner relayed that as MSBSD had evaluated spending
for FY 25, the resource available through SB 140 combined
with some fund balance would bring the district close to
balancing.
Co-Chair Stedman asked if Ms. Gardner referred to a $680
increase to the BSA.
Ms. Gardner affirmed that she was referring to a $680 BSA
increase along with additional funding for correspondence,
student transportation, and the Alaska Reads Act.
9:54:17 AM
Dr. Trani pointed to the maximum allowable contribution
from the borough. He pondered that the borough had gone
from giving $60 million to $71 million over the time frame.
He commented that as the borough had given more money,
funding had remained flat because the state had given less
money. He reiterated that as MSBSD had grown with more
students, it hadnt hired more staff.
Co-Chair Stedman asked Dr. Trani to get back to the
committee with information about class sizes and a three-
year projection previously requested.
9:55:33 AM
Co-Chair Olson referenced personnel and noted that some
rural school districts had been relying on international
hires to fill some of the positions. He asked if MSBSD had
done the same.
Dr. Trani relayed that MSBSD had a team of dedicated
professionals that worked year-round to make sure there was
an adequate supply of employees. He thought the vacancy
rate was one of the lowest. He commented that the district
was geographically desirable.
9:56:21 AM
AT EASE
9:57:26 AM
RECONVENED
DR. MADELINE AGUILLARD, SUPERINTENDENT, KUSPUK SCHOOL
DISTRICT, introduced herself and relayed that the Kuspuk
School District (KSD) was Regional Educational Attendance
Area (REAA) number five.
MARTHA MORGAN, BUSINESS MANAGER, KUSPUK SCHOOL DISTRICT,
introduced herself.
Dr. Aguillard emphasized that KSD was different than the
other two districts that had presented, as it was an REAA
and was in a remote area in Western Alaska. The district
was about 320 air miles from Anchorage. She discussed her
background. She had been hired five years previously as the
director of Special Education and Federal Programs, a
position which had gone to the superintendent's office in
KSD.
Dr. Aguillard discussed a She showed slide 1, "about
Kuspuk":
9 schools serving 7 communities - 312 students
Kalskag
Joseph & Olinga Gregory Elementary: Grades PK-2 - 52
students
Zackar Levi Elementary: Grades 3-5 - 32 students
George Morgan Sr. High School: Grades 6-12 - 64
students
Aniak
Auntie Mary Nicoli Elementary School: Grades PK-5 - 42
students
Aniak Junior Senior High School: Grades 6-12 - 47
students
Upriver
Crow Village Sam School: Grades K-12 - 23 students
Johnnie John Senior School: Grades K-12 - 24 students
Jack Egnaty Senior School: Grades PK-12 - 17 students
Gusty Michael School: Grades K-12 - 11 students
Dr. Aguillard discussed work for competitive state and
federal grants. She cited that about 60 percent of KSD's
budget was grant funded. She emphasized that while the
district had only 312 students, the previous year 234
students transferred from within the district or in and out
to another district. The district had 234 students that had
moved within the district. She explained that the student
counts did not accurately reflect how many students the
district served.
9:59:54 AM
Dr. Aguillard advanced to slide 3, "Who are our students?":
? +97% of students are Alaska Native of Yup'ik and
Athabascan descent
? 100% of students Free and Reduced Lunch (Community
Eligibility Provision)
? 17% of students receive special education services
(4% Intensive needs)
? Hearing loss
? Fetal Alcohol Syndrome
? Autism
? Developmental Delay
? Specific Learning Disability
? Other Health Impairment
? Speech/Language
? Migrant Students
? English Learners
Dr. Aguillard noted that while the districts overall
enrollment was going down, the number of intensive needs
students was growing.
Dr. Aguillard showed a fund balance data sheet for KSD
(copy on file).
10:00:50 AM
Dr. Aguillard showed slide 4, " Who are our teachers?":
? 35 certified teaching positions
? 6 generalists: instructing 6-7 grades in one
classroom (up to 42 different courses per
semester)
? 5 special education
? 2 early childhood
? 1 CTE
? 11 grade level/content teachers
? 3 principals
? 2.5 district administrators
? 50% of certified teachers on J1 visas from the
Philippines
? 3% of certified teachers are Alaskan Native
? 20% of certified teaching positions VACANT
? 40% of special education teaching positions VACANT
? Gusty Michael School = 0 certified teachers on staff
Dr. Aguillard noted that the 2.5 district administrators
were working on the grant portion of the budget. She
discussed staffing challenges.
10:02:14 AM
Dr. Aguillard advanced to slide 5, "FY 24 - How do we
staff?", which showed a table of teaching positions at KSD
schools. She commented on the number of vacancies shown in
red. She noted that 20 percent of certified teaching
positions were vacant, 40 percent of special education
positions were vacant, and there was one school with no
certified in-person teachers. She cited that the district
had a projected budget for certified teachers of a little
over $3 million, and that the average teacher salary was
about $72,000 while the average administrator salary was
$120,000. She emphasized that KSD could not keep core
educators in its classrooms. She noted that KSD did not
have advanced foreign language, music, and library, and had
actually built a school without a library due to the
inability to hire staff. She emphasized that when KSD
contemplating cuts, it would be to kindergarten teachers
and other core academic teachers.
10:03:19 AM
Dr. Aguillard spoke to slide 6, "FY24 budget projection -
end of year." She emphasized that services still needed to
be provided even with the vacancies, and that some teachers
were teaching up to 42 classes a semester. She mentioned
teachers not returning after winter break. She mentioned
moving core instruction to online delivery. She discussed
unexpected staff attrition. She discussed the need for
action and tough decisions by the board. She noted that the
table on the slide showed a budget snapshot as of February.
She cited being over budget in a number of areas due to
deploying remote and online learning.
Dr. Aguillard discussed the cost of travel as a budget
effect. She mentioned closure of commercial air services
and highlighted that staff and student travel costs had
risen. The travel also included options for sending
students to attend learning opportunities in other
communities.
Co-Chair Stedman asked for discussion of the expenses
related to E-Rate and the Broadband Assistance Grant.
Ms. Morgan identified that the E-Rate was a federal grant
that KSD received as revenue.
Co-Chair Stedman asked if the district was offsetting
revenue and expenditures. He asked for description of the
center column.
Ms. Morgan explained that the center column showed actual
expensive.
Co-Chair Stedman pondered that the year to date was as of
February 26.
10:06:48 AM
Co-Chair Olson asked about success of the teachers from the
Philippines.
Dr. Aguillard relayed that the hiring of teachers from the
Philippines had been a great experience for the district.
Four years previously the district had started hiring
teachers on J-1 visas. In the beginning the teachers taught
remotely while the district learned the visa process.
Teacher retention had gone from 40 percent to 90 percent
with the active visa holders. She explained that the
cultural exchange visa holders wanted to complete three
years and wanted to complete extensions. She emphasized
that the J-1 visa holders were highly educated teachers
with many years of experience and content expertise. She
noted that the teachers were supportive of the Alaska Reads
Act.
Co-Chair Olson considered student scores and asked if there
had been an effect from the teachers on J-1 visas.
Dr. Aguillard relayed that the district was still waiting
for test scores from the previous year and could not speak
to the statewide testing. She relayed that the district had
been watching benchmarks closely and assessing with other
tests and had seen great growth. She noted that the
district had also hired certified pre-school teachers. She
commented on consistency and noted that even the J-1 visa
teachers stay of three years was longer than previous
retention.
Co-Chair Olson asked if the same was true for special needs
students.
Dr. Aguillard relayed that she was the Acting Special
Education Director for KSD. She noted that KSD had two
special education teachers were on J-1 visas, one of whom
had received an award from the Governors Council on
Disabilities and Special Education.
Co-Chair Olson commended Dr. Aguillard.
10:10:14 AM
Senator Bishop noted that he had nine rural school
districts in his district. He asked if any of the schools
in KSD were reading at grade level.
Dr. Aguillard answered "no," but qualified that numbers
were so small it was difficult to publish data without the
risk of identifying students. She referenced a great deal
of individual growth and relayed that many students were on
gifted/talented plans, had advanced grades and graduated
early, and were attending college in the state. She
identified the goal of meeting the needs of every
individual student. She believed that KSD was trying to
leverage its resources to advanced areas of well.
Senator Bishop mentioned KSDs deferred maintenance and
acknowledged the severity. He thought outcomes would be
better if school districts were caught up on deferred
maintenance.
10:11:47 AM
Dr. Aguillard spoke to slide 9, "Deferred Maintenance":
Jack Egnaty Senior School
Major Maintenance application submitted for 14 years
Amount Requested: $1,608,442
Johnnie John Senior School
Major Maintenance/School Construction application
submitted for 15+ years
Amount Requested: $2,009,216
Zackar Levi Elementary School
New School Construction application FY26
Auntie Mary Nicoli Elementary School
New School Construction
Ongoing for 5 years
Dr. Aguillard stressed that there were teachers living in
her district schools, and there was no teacher housing in
some communities. She cited that the district had requested
help on some projects 14 to 15 years, and noted that as an
REAA, KSD was entirely reliant on the state. She relayed
that she had applied for Impact Aid and had received an
emergency construction grant with partial funding. The
grant had a clause that the state or local contributions
would contribute to finish the project, and the funds could
not be accessed until there was a guarantee that the
project in Sleetmute could be finished. She noted that KSD
did not have the matching funds. She emphasized the
deterioration of facilities in KSD. She referenced
photographs on the slide and noted that portions of
buildings were starting to be closed, including gymnasiums,
shops, and restrooms.
10:13:29 AM
Senator Kiehl referenced fund balances on the KSD fund
balance data sheet, and thought the district was up to
about $3.2 million in 2022, and assumed a part of it was
federal Covid-19 funds. He recalled that the statewide
slide showed a planned draw of about half a million from
the fund balance and observed a projected end-of-year fund
balance of $1.2 million. He asked about the added draw from
fund balance and about a sustainable approach for the
district.
Dr. Aguillard affirmed that when KSD's initial budget had a
deficit of over $500,000. She considered the projected end-
of-year fund blance of $1.2 million, the half-million
commitment, and all of the overages discussed early. She
asserted that the district had been discussion the amount
of funding that would get it through the year. She thought
that $680,000 would allow the district to maintain what it
was currently doing. She mentioned combining grades in
Aniak. She noted that school buildings and physical space
in Kalskag did not allow for larger class sizes or combined
classes.
10:16:16 AM
AT EASE
10:17:07 AM
RECONVENED
Co-Chair Stedman relayed that the committee would hear from
the Kodiak Island Borough School District (KIBSD), which
had declining enrollment from roughly 2,700 down to 2,000
in the current century.
10:17:33 AM
DR. CYNDY MIKA, SUPERINTENDENT, KODIAK ISLAND BOROUGH
SCHOOL DISTRICT, introduced herself.
SANDY DAWS, CHIEF FINANCIAL OFFICER, KODIAK ISLAND BOROUGH
SCHOOL DISTRICT, introduced herself.
Dr. Mika discussed a presentation entitled Senate Finance
Committee (copy on file). She showed slide 2, "KIBSD
Snapshot," which showed a map of the school district. She
cited that KIBSD currently had 2,179 students. It had six
schools in town on the road system, as well as five rural
villages, one of which was on the road system. The district
had a home school program with 152 district students.
10:18:26 AM
Dr. Mika showed slide 4, "District Success: Recruitment &
Retention, and relayed that KIBSD was fully staffed
because of its international teacher hires and retention
bonuses. She noted that the district had changed from J-1
visas to H1B visas so that teachers could emigrate. She
mentioned the importance of consistency.
10:18:52 AM
Dr. Mika showed slide 5, "Our Reality: Enrollment Down,
which showed a line graph depicting student enrollment from
2011 to 2025. She observed a steady decline in enrollment,
which was primarily due to the economics of the declining
fishing industry in Kodiak.
10:19:14 AM
Dr. Mika addressed slide 6, "Our Reality: Enrollment Down,"
which showed a table. She highlighted that the table showed
from 2005 to 2025 the enrollment in neighborhood schools
had gone down by about 27 percent. Correspondence school
had gone up approximately 177 percent, which was primarily
due to what happened during and after the Covid-19
pandemic. Intensive needs students had gone up 246 percent,
and despite declining overall enrollment, the adjusted ADM
had gone up 18 percent because of intensive needs students
being served.
Co-Chair Stedman asked about declining enrollment, and
asked if the district expected the trend to continue.
Dr. Mika shared concerns about an announcement that the
districts largest cannery would close, which had an
associated 150 students that could be affected.
10:20:29 AM
Co-Chair Olson looked at slide 6 and observed that the
number of intensive needs students had gone up. He asked if
the district had been able to handle the challenge.
Dr. Mika relayed that mental health needs of students had
also gone up, and costs had increased drastically. She
relayed that the district was being innovative in how it
was meeting the needs of students. She noted that three of
the teachers from the Philippines were certified in special
education. She cited that all of KIBSD speech therapists
were remote, as well as some physical therapy and some
occupational therapy services.
10:21:28 AM
Senator Bishop asked if the district had done any data
mining on the reason for the sudden rise in intensive needs
students.
Dr. Mika relayed that she had not done the research.
10:21:46 AM
Senator Wilson noted that every school district had a
change in intensive needs enrollment. He wondered if the
district's testing or diagnostics had changed.
10:22:04 AM
Dr. Mika discussed slide 7, "Our Reality: Increased Costs,"
which showed a bar graph depicting health insurance
increases over time and icons depicting a rise in inflation
and energy costs. She mentioned that insurance was
estimated to go up 28 percent in the next year. She noted
that Kodiak Electric had notified of a 12 percent increase
for the following year, primarily due to the cannery
closure.
10:22:32 AM
Dr. Mika referenced slide 8, "Local Support History," which
showed a table and graph. She relayed that the borough
funded the district at 95 percent in in FY 24. The borough
had express not to raise the mill rate due to the changing
economic landscape in Kodiak. The districts ask the
following year would be about 93 percent of the maximum
allowable contribution.
10:23:05 AM
Dr. Mika advanced to slide 9, "FY 25 Reductions," which
showed two tables. She highlighted that the district
anticipated a $7.2 million deficit going into the next
year. She continued that the district had identified $3.9
million in reductions as part of the FY 25 budget in
staffing, services, and supplies.
Co-Chair Stedman noted that Anchorage had declining
enrollment and multiple schools. He asked how many schools
that Kodiak would be closing.
Dr. Mika cited that there was one high school, one middle
school, and four elementary schools. Analysis revealed that
the district could not close a school, but with a few less
students there could be a consolidation. She identified
that there was a committee that would convene the following
month that would look at a consolidation beginning in FY
26.
Co-Chair Stedman pondered that it was harder to accomplish
consolidation in communities with fewer schools.
10:24:32 AM
Dr. Mika spoke to slide 10, "FY25 Expenses by Function,
which showed a pie chart. The expenses were after the
almost $4 million in cuts, but there would still be 77
percent of funds dedicated to student instruction and about
23 percent for district operations.
Dr. Mika showed slide 11, "KIBSD Fund Balance," and noted
that the slide showed a snapshot of the districts fund
balance in the October audit and showed the year-end June
30financials. She pointed out about $7 million in
unassigned fund balance. The FY 24 current budget had
dedicated $2.5 million of fund balance to balance the
budget. There was about $4.7 million left unassigned going
into the following year.
Co-Chair Stedman asked what BSA the district was using to
calculate the figures.
10:25:43 AM
Dr. Mika advanced to slide 12, "Use of Fund Balance
Historical and Future Pending BSA Increase," showing a bar
graph and a table. She explained that there were three
scenarios shown on the far right of the slide. With no BSA
increase, KIBSD would have to use an additional $3.5
million of the fund balance. With a $300 BSA increase, it
would have to use $2.7 million of the fund balance. An
increase of $680 would require the use of $1.1 million. She
noted that the district was cutting $3.9 million going into
FY 25. With a $680 increase to the BSA, the district would
have to cut another $3 million going into FY 26.
Co-Chair Stedman asked Ms. Mika to address what the
district would do to ensure it remained liquid if the BSA
remained flat.
Dr. Mika identified that the district would have to close
schools, raise the PTR, and make further cuts. She
described the scenario as a dire situation.
Co-Chair Stedman assumed the district would have to close
an elementary school.
Dr. Mika affirmed that it was not possible to close the
only high school or only junior high school.
Co-Chair Stedman asked Dr. Mika to discuss school
transportation.
Ms. Daws identified that KIBSD was in a unique position
with pupil transportation, and that the district was
maintaining a fund balance of about $1 million in its
transportation fund. She explained that the district was
unable to hire enough bus drivers or contractors and would
be using all available state funds if it was to hire for
all bus routes. She detailed that the district had
consolidated routes.
10:28:43 AM
Co-Chair Olson asked about potentially closing an
elementary school, and whether it would be a school from
one of the outlying villages.
Dr. Mika answered no, and relayed that the district would
look at the town schools.
Co-Chair Olson shared a concern that a closure of a school
would heavily impact a village.
Co-Chair Olson understood that KIBSD had hiring success
with international teachers. He asked about the hiring
efforts, which he thought were different than in other
districts.
Dr. Mika explained that the district was not using a hiring
agency and had travelled to the Philippines to conduct job
fairs. The district was doing its own applicant processing
through an immigration lawyer. She explained that the
teachers preferred H-1B visas as a pathway to immigration
that would also provide stability in the workforce. She
noted that the district had travelled to Manila as well as
a more rural, remote location in Sebu City to find teachers
that could better integrate into rural Alaska. The district
had screened about 243 candidates, 50 percent of which met
the standards. She noted that the district primarily went
because of the special education teacher shortage and had
invited another district to come along. Any teachers that
had met English and pedagogy standards had been shared with
the teacher application system so that other districts
could benefit from KIBSDs recruitment efforts.
10:31:06 AM
Senator Merrick asked about the requirements for retention
bonuses.
Dr. Mika explained that all staff received retention
bonuses, and certified staff received the bonus in June
after signing a contract. The bonus was $2,500 for the
current school year. The classified staff not on contract
received the funds on the first paycheck in September if
they returned to their position.
10:31:38 AM
Senator Wilson asked if the district found that retention
bonuses were successful. He asked how long the district had
been giving the bonuses and if it would continue should the
funds be available.
Ms. Daws relayed that the contract had started in 2024, and
she felt that the bonuses had been very successful. It had
been the first time the bonuses were offered to classified
staff. The bonus was an agreement that was given in lieu of
a raise. She relayed that the bonuses were well received by
the classified staff and teachers.
Co-Chair Stedman relayed that the legislature was concerned
with cannery closure up and down the coast and would be
working on the matter over the next couple of years.
10:32:46 AM
AT EASE
10:34:14 AM
RECONVENED
Co-Chair Stedman relayed that the committee would be
hearing from the Northwest Arctic Borough School District
(NABSD). He stated that the NABSD enrollment was sideways
relative to the ones that were advancing and declining.
10:34:43 AM
TERRI WALKER, SUPERINTENDENT, NORTHWEST ARCTIC BOROUGH
SCHOOL DISTRICT, introduced herself.
MEGAN WILLIAMS, DIRECTOR OF ADMINISTRATIVE SERVICES,
NORTHWEST ARCTIC BOROUGH SCHOOL DISTRICT, introduced
herself.
Ms. Walker discussed a presentation entitled NWABSD Senate
Finance Presentation, (copy on file). She showed slide 2,
"Student Average Daily Membership, and pointed out that
the districts enrollment had stayed steady over the
previous ten years. In FY 14 the ADM was 1,880, and
although it had fluctuated, in FY 24 it was also 1,880.
Ms. Walker addressed slide 3, Budget Building Schedule and
Preliminary Deficits:
December/January of each year Preliminary budget for
next year is drafted including negotiate staff salary
increases and projected fixed cost increases.
January/February Administration reviews all
expenditures and revenues to make adjustments before
bringing a proposed budget and budget cuts to the
local School Board and Community
March/April Local School Board and community have
input on proposed budget and budget cuts.
May 1st Adopt Budget for next fiscal year.
FY23 Preliminary Budget Deficit - $1,577,399
FY24 Preliminary Budget Deficit - $8,203,568
How we balanced the budgets:
- Increase Class Sizes
- Reduced Student Activities
- Donations & Grants
- ESSER
FY25 Preliminary Budget Deficit - $14,090,189
Ms. Walker highlighted that in FY 23, the district had a
budget deficit of $1.5 million. In FY 24, the deficit
increased to $8.2 million. She pointed out how the district
had balanced the budget the previous year, and for FY 25,
there was a $14 million deficit.
10:35:57 AM
Ms. Walker showed slide 4, " FY24 Projected Budget and Year
End Fund Balance, which showed a table. She highlighted
that the beginning of the year fund balance for FY 24 was
$9.9 million. The projected end-of-year fund balance was
$3.5 million.
10:36:11 AM
Ms. Walker spoke to slid 5, FY24 Budget Expenditures by
Function, which showed a pie chart.
Ms. Walker showed slide 6, "FY25 Preliminary Budget & Year
End Fund Balance," which showed a table. She cited a FY 25
beginning-of-year fund balance of $3.5 million, and a
projected end-of-year fund balance deficit of $14 million.
Co-Chair Stedman asked what BSA the district was using for
its calculations.
Ms. Walker identified that the district used the current
BSA of $5,960 in the budget. She relayed that if the
district received a BSA increase of 680 it would add $5.1
million to the budget, but the district would still need to
find $9 million to cover the deficit.
10:37:15 AM
Ms. Walker spoke to slide 7, "Reason for FY25 Preliminary
Budget Deficit:
Fixed Cost increases in FY24 30% Property &
Liability Insurance, 20% Heating Fuel
FY25 Increases:
-$3.2 million - Increase in Salaries based on
collective bargaining agreements and additional
needed positions.
-$3.6 million Budgeted use of fund balance from
FY24
-$1.4 million - Decrease in Impact Aid funding
based on FY21 Impact Aid Review
-$100k Decrease in Indirect Revenue (ESSER
Funding)
-$4.5 million Increase to Health Insurance
Program Costs 15%
-$1.2 million - Increase to Transfers out Food
Service Program
FY25 Preliminary Budget Deficit - $14,090,189
10:37:35 AM
Ms. Walker showed slide 8, "Summary of Unrestricted Capital
Improvement Project Funds," which showed at table. She
discussed capital projects over the previous few years, and
highlighted an FY 22 fund balance of $3.26, which was
currently down to $1.7 million.
10:38:01 AM
Ms. Walker showed slide 10, "Unexpected FY24 Capital
Improvement Costs & other needs":
1. Selawik Fire Panel ~ $750,000
2. Noatak pump house ~ $344,600 Already in CIP funds
3. Freezeup in Selawik/Kotzebue/Deering/Kiana No
current estimate
4. Buckland HVAC ~ $450,000 to complete project
5. Kobuk backup generator ~ $200,000
TOTAL ~ $1,400,000
Unrestricted CIP fund balance = ~ $1.7 million
Ms. Walker explained that several villages had outdated
fire panels, one of which had quit working. The board had
prioritized funding $750,000 for replacement of the non-
working panel. She mentioned another community that did not
have a backup generator. She emphasized that the district
was spread out over 39 square miles with 11 villages. She
recounted that every year the city generator would go out
in a village, and the elders and children would seek refuge
in the school, which had a backup generator. She emphasized
that the schools were a safe place during times of
hazardous events. The school without a generator was a
priority and would cost closer to $350,000 rather than the
$200,000 listed on the slide.
Ms. Walker referenced slide 9, "6 Year Capital Improvement
Needs," which showed a table. She discussed the failure of
the Noatak pumphouse. The tank had cracked and required a
$345,000 solution. She summarized that the fund balance for
capital projects had repeatedly been used for emergencies.
10:40:20 AM
Ms. Walker advanced to slide 11:
Teacher Recruitment Efforts
40 out of 144 Teachers short beginning of FY24 ~ 28%
Recruiting year round
Contracting out for recruiting assistance
Foreign Teachers ~ 40 Teachers
Retiree Rehire - 1
Long Term Subs ~ 20 Teachers
Transportation Funding
Northwest Arctic Borough School District currently
receives $27 per ADM in transportation funding, this
funding covers roughly 25% of the overall program
cost.
NWABSD would need $106 per ADM to fully fund Student
Transportation needs in Kivalina, where our school is
8 miles from the community.
Ms. Walker discussed the hiring of new teachers, most of
which were from the Philippines. She noted that 17 of the
teachers had come during winter break due to vacancies in
the classrooms. She mentioned the Alaska Reads Act. She
discussed teachers expanding their work to accommodate
vacancies. She discussed transportation, which was only in
the Kivilina School located eight miles outside the
community. The route was about an hour round-trip by bus.
She cited that the district currently received about $27
per ADM, and it would need $106 per ADM to fully fund the
transportation to for Kivilina.
10:42:51 AM
Senator Merrick asked how the salary for Filipino teachers
compared to what they would make in the Philippines.
Ms. Walker relayed that she was told that the teachers in
from the Philippines received a large increase in pay when
working in Alaska. She was unsure of the amount and offered
to get back to the committee with more information.
10:43:29 AM
Co-Chair Olson asked if the international teachers were
bringing children when they relocated.
Ms. Walker answered affirmatively. She noted that teachers
thought brought children increased the districts
enrollment.
Co-Chair Olson asked who paid for the increase.
Ms. Walker relayed that the teachers paid for their
children, however the district had to pay for the teachers.
The cost was about $20,000 per teacher.
10:44:16 AM
Ms. Walker addressed slide 12, "What happens if funding is
flat?":
If funding is flat, NWABSD will have to find $14
million of expenditures to cut, 20% of NWABSD's
General Operating Budget.
Without a BSA increase of $680, our District would
have to close buildings, furlough employees, cut meal
program completely, cut all student activities, cut
student transportation, and all reductions below.
With an increase to the BSA of $680, the District will
still have to do the
following:
- Increase Classroom sizes
- Increasing number of grade levels/classroom
- Increasing number of concurrent courses taught by
one teacher within one class hour
- Reduce Counseling & CTE Programs
- Reduce Professional Development offerings and staff
- Reduce Student Activities
- Reduce community use of School Buildings
- Reduce Meal Program
- Reduction in Health Insurance Program for Staff
Ms. Walker explained that there was no way to close schools
(which were Pre-K through 12th grade) that functioned as
the school for a whole community. The district was a Title
1 district, and over 80 percent of the students qualified
for meals. She noted that the district subsidized over $1.2
million above the U.S. Department of Agriculture subsidy to
feed students.
Co-Chair Olson asked to touch on the topic of deferred
maintenance. He referenced horrific slides shown by other
school districts.
Ms. Walker relayed that in the past there had always been a
fund balance to move into deferred maintenance to help
communities. The district had been saving what little was
available for emergency situations. She mentioned a school
that had a classroom that was unable to be heated above 50
degrees, and it was necessary to have class in the gym.
Several schools had outdated heating controls and outdated
fire panels. She discussed teacher housing and referenced
rotten floors. She mentioned that schools had tiles stapled
to the floor for stability.
Co-Chair Olson asked about special needs students in
villages and asked about students with significant
disabilities.
Ms. Walker relayed that the district sourced out
specialists for PT and OT, and the professionals had to
travel to the village twice per year. The students were
also served via online access. She emphasized that special
needs students were prioritized and were very important to
the district.
10:47:32 AM
AT EASE
10:48:30 AM
RECONVENED
Co-Chair Stedman relayed that the committee would hear from
the Ketchikan School District.
10:48:52 AM
MICHAEL ROBBINS, SUPERINTENDENT, KETCHIKAN GATEWAY BOROUGH
SCHOOL DISTRICT (KGBSD), showed a school fund balance data
sheet (copy on file) and commented that the district had
started the year with no fund balance. He noted that the
district had a negative fund balance the previous year. He
thought that without an increase to the BSA, his district
would be in the same position as the other school districts
that had presented. He identified that although Ketchikan
had seen declining enrollment over the previous decade, the
BSA did not increase, and the district had to cut over 12
percent of its employees the previous year. The cut equated
to over 50 employees including district office employees,
maintenance, teachers, paraeducators, administrative
assistants, and IT staff.
Mr. Robbins noted that there had been a 14 percent increase
in health insurance, which equated to $1.1 million on top
of the $8.9 million the district currently paid. There were
increases in technology, special education. He mentioned
preventative maintenance the district was unable to do. He
mentioned increased class sizes and an inability to
maintain the districts academic program. He continued to
discuss budget challenges, including cutting Pre-K. He
emphasized the importance of Pre-K, which was correlated
with higher graduation rates.
Mr. Robbins relayed that KGBSD would request that the
borough fund at 100 percent of the funding cap due to an
increase in special education staffing and federal
requirements for individual education plans. He listed
additional increases in maintenance, shipping, and energy.
He noted that 89 percent of the budget was personnel fixed
costs, so when cuts were made it had to be a cut to staff
at all levels. He discussed increased expenditures for the
following year, driven by an increase to healthcare of 4.5
to 6 percent.
10:51:26 AM
Co-Chair Stedman asked if the district put unfunded
positions in its budget as Anchorage did.
Mr. Robbins answered in the negative and relayed that the
district had budgeted in the current year using a $100 BSA
increase. The district had tried to make staffing levels
reflect exactly what was needed. The district was going to
the borough for a greater allocation was due to an increase
in students that needed special education services. In
order to stay in compliance with federal regulations, the
district had to add positions.
Co-Chair Stedman asked about a $100 addition to the BSA,
and what BSA number the district was using.
Mr. Robbins relayed that the district was using the $340,
and there was $240 left on the BSA cap from the borough.
Co-Chair Stedman asked if the $100 was in addition to the
current years funding.
Mr. Robbins answered affirmatively.
Co-Chair Stedman discussed the BSA, which was a statutory
formula, and clarified that outside funding also had to be
run through the formula.
10:53:16 AM
Senator Wilson asked about the current amount the city
funded and if the city funded to the cap the previous year.
Mr. Robbins relayed that the district was funded to the cap
the previous year for the first time in about 20 years. In
the current year there was a gap of about $1.7 million.
Co-Chair Stedman asked Mr. Robbins to discuss fund balance
carry-overs and whether there was a different cap on a
local level.
Mr. Robbins explained that the district did not have an
unassigned fund balance. He noted that the district did
have a transportation fund balance. He emphasized that the
district was operating hand to mouth, and with a $49
million budget and as one of the largest employers in
Southeast Alaska it was very difficult to run the district
without any fund balance.
Co-Chair Stedman asked if the district had already done
reductions in staffing levels.
Mr. Robbins answered affirmatively and noted that the
district had reduced employees by about 12 percent. The
reduction in students was only around 3 to 4 percent.
Co-Chair Stedman thought the population of Ketchikan was
down about 20 percent in the current century. He mentioned
that the populations of Sitka and Ketchikan were roughly
down about 30 percent in the same time period. He noted
that the committee had chosen the district out of Southeast
to present because it had already completed reductions.
Mr. Robbins answered, "Yes."
Co-Chair Stedman asked Mr. Robbins to discuss potential
school closures if there was continued erosion of headcount
numbers.
Mr. Robbins relayed that that there was one comprehensive
high school and one alternative high school. There was one
middle school, three elementary schools, and two charter
schools in the district. He explained that closing a school
would be difficult based on the numbers. He pondered that
it could be possible to consolidate to have a school with
Pre-K through 3rd grade, and a school with grades 4 through
6. He thought without such a consolidation, the class sizes
would be too large.
Co-Chair Stedman added that he would like school districts
to provide information on any labor contracts and
agreements in the following two to three years that might
add to overhead.
Mr. Robbins relayed that when considering the budget for
the following school year, the district did not consider
added items outside of the academic program. He cited
contract step extensions, a $1.1 million healthcare
increase, a preventative maintenance budget, and a
technology budget. He thought the district was right-sized,
but suggested that if there was no BSA increase, one or
some of the items would have to be cut or class sizes would
have to be increased.
10:57:47 AM
Co-Chair Stedman asked about where the district would be
with a $340 BSA increase and a status quo budget.
Mr. Robbins estimated that the district would be about $1.8
million to $1.9 million short.
Co-Chair Stedman asked how the district would handle the
deficit without a fund balance.
Mr. Robbins relayed that the district would have to look at
cuts to staffing, class sizes, preschool, music, PE, art,
and things that were not part of the core curriculum. He
emphasized that the items he listed were the things that
kept kids in school. He thought music was the reason that
many kids went to school. He emphasized CTE and other
things that helped students get jobs after graduation.
10:59:02 AM
Co-Chair Olson asked if KGBSD had a teacher retention
program.
Mr. Robbins identified that there was a teacher retention
program for teachers that were in the first four to five
years. He noted that the district had many veteran teachers
that had been with the district for a long time. He
stressed that it was almost impossible to keep new teachers
that would replace veteran teachers after retirement. He
reasoned that teachers were migrating to the Lower 48 after
a few years due to the states retirement system and lack
of a defined benefit option. He lamented losing one of his
best directors based on retirement system factors. He felt
strongly that the retirement option made it hard to keep
talented teachers for the long term.
Co-Chair Stedman asked is salaries were a factor.
Mr. Robbins thought the KGBSD salaries were close to those
in Washington. He noted that when he was in Toksook Bay, a
much higher salary schedule was necessary due to the high
cost of living and the cost of relocating. He thought with
an increased BSA, teacher salaries could increase. He
discussed the challenge of finding and retaining
paraeducators and losing the employees to the tourism
industry jobs.
Co-Chair Stedman asked about teacher housing.
Mr. Robbins conveyed that there were tremendous problems
with teacher housing.
11:01:49 AM
Co-Chair Olson referenced the governor's proposal for a
teacher retention bonus. He asked if Mr. Robbins wanted to
comment on the proposal and what it would do to his
district.
Mr. Robbins thought that a retention bonus should be
available for anyone that impacted students in school. He
emphasized that caring adults made the difference in
students' lives and could be a cook, custodian, or any
educator. He thought all caring adults in the school were
educators and should be rewarded.
Co-Chair Stedman discussed the agenda for the following
day.
ADJOURNMENT
11:04:10 AM
The meeting was adjourned at 11:04 a.m.