The Kenai Peninsula Borough School District is fine-tuning its budget for the next school year.
In the 2013-2014 school year, the district expects to spend roughly $148 million, but it’s only expecting revenue totaling about $143 million. The majority of the money, or nearly 68 percent, will come from the state, while the borough will provide the rest either through appropriations or shared costs such as building maintenance.
During the Kenai Peninsula Borough Assembly’s Feb. 19 meeting, KPBSD Superintendent Doctor Steve Atwater requested the borough provide $44.5 million to the district. That is an increase of about $1.5 million over last year’s allocation.
Assistant Superintendent David Jones was in Homer Thursday to discuss specifics of the proposed spending plan. He says the projected budget gap could lead to some difficult decisions.
“Your choices at that point in time are to use fund balance, or to make cuts. We’ve been using fund balance. Last year we used over $2 million worth of fund balance. The problem with depending on the use of fund balance is that at some point in time, if that’s how much you have and you spend it, the next time you reach in your pocket, then your only choice is to make cuts,” he said.
Personnel costs represent a big target when it comes to possible cuts, making up 82 percent of the total budget. The three most expensive buildings to staff are Soldotna High School, Kenai Central High School and Homer High School potentially totaling about $14.4 million for next school year.
“That 82 percent is that high because education is a hands-on with students business. Private industry, if you were spending 82 percent of your money on salaries and benefits, you would have a closed sign on your window,” Jones said.
Health care costs for the district for this current school year are $17.8 million. Projected costs for next year are about $400,000 less. Health care was a sticking point in negotiations for employee contracts with the school district.
The district has reached a tentative agreement for a three-year contract with the Kenai Peninsula Education Association and Kenai Peninsula Education Support Association. Negotiations have been going on for more than a year.
In a news release from the district, Spokesperson Pegge Erkeneff said the potential agreement includes a health care contribution percentage change to an 80/20 split in year one with the majority of the costs covered by the school district. In year two it’s an 83/17 split, and by year three, the district will cover 85 percent of the costs. The current share is 50/50.
Erkeneff said the spending plan for next school year does not currently include this potential increase in health care costs. The new agreement also could allow for a 2 percent salary bump for each of the three years in the contract if it receives final approval.
The Associations must ratify the tentative agreement and then the contract will need to be approved by the Kenai Peninsula Board of Education. After final acceptance, the contract will be retroactive to July 1, 2012. The Board of Education is expected to continue discussing the district’s budget during its meeting March 4.