The Ketchikan school board held a special emergency meeting Thursday night to address a newly uncovered, additional deficit of over $4.5 million. The board approved next year’s district budget late last month, but it didn’t account for overspending in this fiscal year. It did include the closure of two schools and over 50 staffing cuts. That’s all in an effort to meet other existing debt — including more than $5 million owed to the Ketchikan Gateway Borough.
Interim Superintendent Sheri Boehlert said if the newly uncovered shortfall isn’t accounted for by the end of this month, the district will immediately start their next fiscal year over 4.5 million dollars in the hole. She said the overstaffing and overspending that has been happening for years has caught up to them.
“We, to a fault, make it work for kids, and the fault of that is that it’s not working for us anymore,” Boehlert said.
Boehlert also recommends the board work quickly in order to get a budget that is approved by both the state and borough. She said they don’t have the luxury of time to take feedback and input like they did while drafting their budget, and the budget that the board approved is solid in terms of compliance. Cuts will be deep and will likely completely cut programming like library services.
The budget shortfall was pointed out to the district in a letter late last month from the borough. The board then canceled a school board meeting where they were expected to approve about a dozen teacher contracts. In-stead, district staff met with the school board, borough staff, and staff from the state Department of Education and Early Development multiple times to discuss and review district finances.
Assistant Borough Manager Cynna Smith said at the meeting that they aren’t able to cover the shortfall for the district. They’ve done that too many times, she said, and the snowballing debt is financially impacting the borough. They’re still paying off expenses like cleanup from last summer’s diesel spill at the borough-owned Point Higgins Elementary, and it’s left them short on cash.
“The borough stands behind you, and we are obligated to pay your debts. But what’s happened now is the debts are getting so big, it threatens our ability to do that,” Smith said.
If nothing changes, the district is expected to run out of money by the end of the school year. That means the district will likely ask the borough for more money. To do so, the borough would need to dip into a $2 million reserve in its education fund. If the borough assembly agrees to do that, it would also exceed the maximum amount of funding it’s allowed to give to the district. That would trigger a penalty from the state and increase the district’s debt by an additional $8 million. In order for the Borough Assembly to approve to pay above the legal maximum amount allotted, it would require a supermajority vote and proof of extenuating circumstances.
The school board discussed cutting travel for activities or up to 20 staff positions on top of the over 50 cuts already made this year. There was discussion of cutting more staff from Revilla, the district’s only alternative school.
Board member Jordan Tabb said he doesn’t know the best way to proceed, but he has a hard time imagining making 20 more cuts while maintaining safe and functional programming.
“That’s a whole major school in our program, right? We can’t function with those kind of cuts,” Tabb said. “and so I’m, “I’m really concerned to look at and approve a budget that we don’t feel like can educate our children and to do even the most minimal standard, let alone the standard of excellence that we want to set.”
The board directed district staff to go through next year’s budget and make additional revisions.
Going forward, the board directed staff to request an early payment from the state Department of Education and Early Development, as well as more money from the borough. It also wants district staff to discuss extensions for a 3-year debt repayment plan set with the borough, and to look for alternate funding sources. The district office is short-staffed, and Boehlert said the responsibility of fulfilling the board’s requests lies almost entirely on her.
The district’s new superintendent, Kara Four Bear, starts July 1.
