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            A projected $2.96 million deficit in the district's 2013 budget was the focus of the superintendent's report at last night's Kodiak Island Borough School Board meeting. About $450,000 of the deficit comes from the loss of one-time state aid. Funding from the American Recovery and Reinvestment Act in the amount of $350,000 was eliminated. Increasing health insurance costs and salary increases account for $665,000 of the deficit. The biggest item in the deficit is $890,000 that was taken from the general reserve to cover this year's operating costs. Superintendent Stewart McDonald explains what that deficit does and does not take into account.

--          (School 1                     :45                   "What's definitely known is the governor's budget included no new increases for K-12 education. So, that's our starting point. And salary costs will increase just based on regular movement within the salary schedule, alone. This does not calculate any other salary increases, What's unknown is the outcome of any collective bargaining that will take place this years and what's also not known is the level of state funding from the state legislature and the borough assembly. We don't know what they will approve. So those are going to be the variables as we move through this budget season and the numbers that you have just  seen are subject to change based on those assumptions and what we know and what we don't know."

            McDonald added that the projected budget is based on many assumptions, some of which could change.

--          (School 2                     1:00                 "The assumptions that we had to make on developing this preliminary budget is that the base student allocations will not change from $5,680, that we can tell. KIBSD enrollment will essentially, statistically remain flat for the next three years. You'll see  a projection in our budget book where we're projecting down seven students and then maybe up 20 students and it will kind of bounce up and down for the next three years based on our cohort survival rate formula. A two percent increase in local support from the Kodiak Island Borough. Now, this is solely based on preliminary conversations that we've had with the borough manager with our board member Peggy Rauwolf and legislative chair Rep. Alan Dick where it was believed that we may be able to see at least a two percent increase and so that's why that was built in. People transportation funding will not increase from the state. So those are the assumptions that we're operating from that built this budget." 

            A $300,000 increase more than doubles the cost of transportation for the district. KIBSD Chief Financial Officer Luke Fulp explains why transportation is expected to cost a half-million dollars in fiscal year 2013.

--          (School 3                     :22       "We went out to bid for people transportation services last year and we basically had no competition with that bid and we also had a fleet of vehicles that needed updating. So, the amortization of those equipment costs and personnel increases have driven the costs of people transportation services up."

            The budget will be discussed in more detail this Saturday from 9 a.m. until noon in the Borough Assembly chambers.            

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