Ketchikan’s school board has turned down an agreement with the Ketchikan Gateway Borough that would provide a framework for the district to repay health insurance debts. That came after the school board spoke with its attorney, who expressed some concerns over the draft approved by Ketchikan’s Borough Assembly earlier this month.
Ketchikan’s borough says the school district owes it more than $4 million for unpaid health care claims. The borough administers self-insurance programs for its own employees and those of the district, and borough officials say the district has dramatically underpaid its share of the costs over the past several years.
The proposed agreement is an attempt at righting the ship and eliminating the district’s health care debt. But on Wednesday, the school board objected to some key terms of the deal on the advice of its outside attorney, Clinton Campion.
For one thing, Campion told the board, the exact amount owed to the borough isn’t clear. The district is working with an outside auditor to determine just how much of the $4 million-plus claimed by the borough is truly owed. For another, the memorandum of agreement, or MOA, simply says that the district would pay off the debt — and Campion says that leaves many questions unanswered.
“Our recommendation is that the MOA that the district should consider should resolve all of these issues in a comprehensive manner so that everyone knows what the plan is moving forward,” he told the board by phone.
School board members also took issue with a provision inserted by the Borough Assembly that would prevent the district from applying for borough grants outside the normal budget process.
Board member Diane Gubatayao recalled another major budget crisis for the local school district following the closure of the Ketchikan Pulp Company mill in the early 2000s. The loss of the community’s main economic driver pushed down the tax revenues that pay for Ketchikan’s schools.
“We had to make some very difficult decisions regarding cutting millions of dollars off. At that time, the borough was very generous, because student activities are a chunk of change — like three quarters of a million dollars, right? — and the borough at that time was very generous and said we can take the pressure off the school budget and we can find that as a separate appropriation,” she said.
If the borough bars the district from applying for grant funding, that wouldn’t be an option this time around. School Board President Stephen Bradford said he’d like to at least be able to ask.
“It says we can’t even make the request. Seems to me, if it’s a feasible idea, we ought to be able to make the request,” he said. “They can always decline that request.”
The school board voted unanimously to form a committee to hammer out changes to the agreement. It’ll include Bradford, the board’s vice president, the borough mayor and the borough vice mayor, along with the borough manager, finance director, attorney and their school district counterparts. Bradford said he hoped to finish negotiations by the start of February.