FY21 Updated Budget Information - May 2020

Since the Approval of the FY21 preliminary budget, as you know a lot has changed.

The Kenai Peninsula Borough (KPB) at the April 21, 2020 assembly meeting passed Resolution 2020-027 that set the minimum amount of funding to the school district at $45,000,000. Based on subsequent conversations between KPB Mayor and Administration; there is an agreement that the final amount to be provided by KPB will be $50,000,000.

Revenue

FY21 Preliminary Revenue - Updated
State of Alaska - Foundation	$ 77,652,172
State of Alaska - Quality Schools	285,929
State of Alaska - TRS/PERS On-Behalf	10,626,356
Kenai Peninsula Borough - Appropriation	38,637,268
Kenai Peninsula Borough - In-Kind	11,362,732
E-Rate	700,000
Interest Earnings	300,000
Other	180,000
Total FY21 Preliminary Revenue	$ 139,744,457

State of Alaska - Base Student Allocation at same levels as FY17, FY18, FY19, FY20 and FY21 - $5,930
State of Alaska – $30 Million One-time funding was passed by the legislature, which would of provided $2,072,133 in additional State funding, but was vetoed by the Governor.
Kenai Peninsula Borough Support – FY21 Preliminary budget has been adjusted to $50M, which is $2,776,473 below the maximum allowable.

Expenditures

	FY21 Preliminary Expenditures - Updated
	Salaries - Includes Step Increases	$ 70,078,125
	Benefits	47,742,394
	Workers Compensation	1,251,637
	Professional and Technical	1,270,926
	Travel (Includes Extra Curricular Travel)	760,695
	Utilities	6,996,206
	Purchased Services (Includes In-Kind Maintenance)	9,695,837
	Supplies	3,806,418
	Other Expenses (Includes Charter Schools Additional Allowable)	1,975,319
	Equipment	1,102,811
	Transfers to Other Funds - Student Nutrition	750,000
	Total FY21 Preliminary Expenditures	$ 145,430,368

The Health Care calculation was based on FY20 HDHP rates + 7%. This amount may be updated at a later date if more information is received. The split for Health Care is 85/15 per the negotiated agreement.
A lapse calculation of 2% was used for salaries and benefits.
6.0 FTE Elementary School Counselors included in this updated expenditure budget
Updated In-Kind expenditure budgets to match KPB Resolution 2020-027 and additional information.

Use of Fund Balance

Revenue from all sources for the FY21 Preliminary General Fund Budget totals $139,744,457 and since expenditures and transfers total $145,430,368, it is necessary to use fund balance in the amount of $5,685,911. It is estimated that such usage will deplete all available unassigned fund balance.

FY21 Preliminary Budget Summary - Updated
Revenue		$ 139,744,457
Expenditures	144,680,368
Transfer to Other Fund - Student Nutrition	750,000
Total Expenditures and Transfers		145,430,368
Excesss (Deficiency) of Revenues
over Expenditures		$ (5,685,911)

CARES Act Funding

The KPBSD attachment includes two pages for your review. The first page is marked DRAFT because the Feds have not yet finalized the exact funding amount that will be distributed to Alaska and the other states for the Elementary and Secondary School Relief Emergency Relief Funds (ESSREF). This page is the best available estimate, and it estimates KPBSD will receive $2,295,953. The second page was the projected breakout of funding from the AK Legislature’s additional $30 million in one-time funding that Governor Dunleavy vetoed. KPBSD would have received $2,072,133 through the one-time funding, but gained an additional $223,820 through the CARES Act funding. We have yet to get any definitive answers related to the expenditure side of these funds. We were on a call with the US Department of Education, and a call with the Alaska Department of Education today and they are both still trying to understand the bill let alone provide guidance. The only thing that is clear at this point, is that the CARES Act funding will not be as easy to spend as Governor Dunleavy indicated when he vetoed the $30 million in one-time funding from the AK Legislature. We will keep you updated as answers materialize.

The KPB attachment includes six pages for your review. They are the sheets that show the Governor’s proposed distribution of the $562.5 million in Direct Municipal Relief for Alaska in the CARES Act funding. It shows in alphabetical order the amounts assigned to incorporated communities and boroughs as per Governor Dunleavy. Column A shows the amount for Community Assistance Payments (CAP). The chart shows the Kenai Peninsula Borough receiving $13,167,154 for CAP, but the asterisk is an important item that needs to be looked at. It reads “* For unincorporated communities inside a borough, CAP payments are made to the eligible municipality.” This means the funds are sent to KPB and KPB then distributes the funds to the unincorporated communities. When I talked with Brandi Harbaugh, Borough Director of Finance, she did not have information as to how it was to be distributed, but said unincorporated places like Anchor Point, Ninilchik, Sterling, Nikiski and many others would be receiving parts of that funding. Direct Cost Distributions are intended to replace funding lost as a direct result of COVID-19, such as sales tax and property tax delinquencies. KPB is scheduled to receive three separate payments of $8,066,367 in Direct Cost Distributions. Per the Governor’s plan these payments would be made on May 1, July 1, and October 1 of 2020. That timing is all dependent upon timely approval by the AK Legislature.

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