APPROVED 09-08-2025

Board of Education Finance Committee Meeting (Thursday, June 26, 2025)

Generated by Natalie Bates on Wednesday, July 2, 2025

1. Board Finance Committee

A. Call to Order

Mr. Kelly called the meeting to order at 1:02 p.m.

B. Roll Call

Members Present: Zen Kelly, Kelley Cizek, Sarah Douthit, Jason Tauriainen (attended virtually)
Other Board Members present: Virginia Morgan (attended virtually), Penny Vadla (attended virtually), Tim Daugharty (attended virtually), Patti Truesdell (attended virtually), Diane MacRae (attended virtually).

C. Approval of Agenda

The June 26, 2025 finance committee meeting agenda was approved as presented.

D. Approval of Minutes 04-22-2025

The April 22, 2025 finance committee meeting notes were approved as presented.

2. Finance Ongoing Business

A. FY26 Budget Reduction Scenarios

Mr. Kelly started the meeting with a description of the revenue. KPBSD appreciates the support of the KPB, max funding at $62 million at the June 14^th meeting. HB 57, increase by 4700, vetoed by Governor Dunleavy, which cut over $50M. The BSA is now a $500 increase. We didn't have a specific $500 scenario; we are still short of revenue in the amount of $3M. Starting today the funding contingency at the bottom reduced by $3M. Funding Contingency is what we use to pivot various levels of funding. FY25 we had to use another $1M. Mr. Kelly proposed adding $1M to our fund balance. Ms. Cizek had a question about the Health Reserve. Mr. Kelly explained it is used to pay health claims; it is a dedicated health reserve. Mr. Taurianen asked additional questions about revenue. Mr. Taurianen would like to deal with the transportation transfer first. Mr. Kelley said we do have additional money from HB 57 for transportation; it is designated revenue for transportation. We were looking at several options for transportation cost reductions. Two bus routes that would provide minimal impact to overall busing, other cuts would provide significant impact on transportation. Mr. Kelly's suggestion with CPI and fuel escalating, asked finance for expenditures at status quo, $8.3MM, it would require all of the transfer from the general fund. Mr. Kelly suggested cutting the 2 bus routes which provide minimal impact, a $200,000 transfer to make that work. Mr. Lyon talked about the route changes, a combination of one route in Nikiski and one route in Sterling. Mr. Kelly asked if the Finance Committee was in favor of combining the two routes and transferring $200,000? The Committee agreed. Mr. Kelly asked the Leadership Team to provide recommendations for budget reductions and is using that as an outline. Mr. Holland discussed the various PTR increases and the various effects on schools and staffing. We would be able to increase the PTR without eliminating any positions. HR stated there would be a few transfers of certified positions. Mr. Holland went into more detail about the reduction of PTR. Leadership recommended not having further cuts to the programmatic staffing. Mr. Kelly reviewed the PTR for the big five school districts; we are by far the lowest in the state. This is a big step for our district, which he believes is necessary. Mr. Taurianen said those other districts have a larger population and makes a difference to our smaller school. Ms. Cizek stated we have not increased our PTR for a long time. There was further discussion about PTR. Mr. Taurianen expressed concerns over the capacity of our buildings. Library aides were discussed next. Mr. Kelly recommended that we not reduce library aides at this time. Ms. Cizek would like to see Sterling closure come off the list. Mr. Kelly’s recommendation is that we do not proceed with the Sterling Elementary closure for next year. The Board needs to have a school consolidation discussion and long-term fiscal plan discussion at the August or September meetings. School consolidation is not just going to be a Central Peninsula area consolidation. Ms. Douthit asked how the PTR increases would affect Sterling being closed or not closed. Mr. Holland said there would be a strong likelihood that a consolidation would have a minimal impact. Mr. Lyon discussed the cost and the feasibility of moving Sterling elementary at this time, now is not the time. Mr. Holland discussed how closing Sterling would cause Borough Maintenance to put off other essential projects which would affect students. Ms. Douthit pointed out that enrollment is declining and needs to be further discussed. Ms. Cizek, it is okay to keep library aides off the list; and appreciates that we did get a BSA increase, but we will still have to make some cuts. Mr. Kelly stated the Mayor has made it a focal point of his budget that we need to do the business of education differently; Mr. Kelly agrees. We need to focus on what is the best outcome for our students, not necessarily the adults. The lateness of the Legislature and the Governor to provide budget numbers puts us at a disadvantage. Mr. Taurianen also discussed the increase of the BSA. Mr. Taurianen doesn't see any waste in our cuts right now, these cuts affect our students and staffing. Ms. Douthit is looking forward to hearing from the Borough to see the best way to move forward to serving our buildings. Her concern is the seven year wait period before reopening a building. Mr. Kelly announced that he committed to the board that he would allow them to comment so not just the four committee members. Mr. Kelly let the public know this is a committee meeting, not a forum to have public comment or testimony. The July 7th board meeting will have an opportunity for the public to comment. The board needs to submit our approved budget by July 15^th to the State. Ms. Vadla would like to look at all schools, we need to do our due diligence and what we might need to adjust or close, needs to be more methodical, she wants to move forward with measurable standards. Mr. Kelly wants to keep working down the list, next up is Middle College. Mr. Kelly would like to bring Middle College back to 50% reduction. Mr. Holland agreed it is important to bring back the 50% to middle college. There is a grant from KPC that could help fund Middle College; also make sure JumpStart is available to use and prioritize our at-risk students; this would match our strategic plan. Middle college is just with KPC but we do have an affiliation with AFTEC. Ms. Douthit is appreciative of administration's work on the grant and is in favor of the 50% reduction. Mr. Taurianen is also in favor of the 50% reduction. Mr. Kelly discussed athletic stipends, he would like to keep at 50%. Mr. Holland discussed that the Leadership Team is split on this issue, they are in favor of 50% cut to middle school but not high school. Athletics is not part of strategic plan, but Athletics is a big draw for students. Mr. Holland discussed the various options. Mr. Kelly stated when we are affecting classes and PTR increase, it does not sit well with him at leaving athletics at 100%. Mr. Kelly is recommending moving forward with the 50% reduction in athletic stipends. Mr. Taurianen has a concern with Leadership not having a clear plan; he disagrees that this is not part of our strategic plan. He does not support the 50% reduction. Ms. Cizek said this was at the 680 budget and we are at a place where we need to make these cuts; athletics is a major part of our budget; she is in favor of the 50% reduction. Ms. Douthit stated athletics can be an intervention tool and a motivation tool, she does not support a 50% reduction without a clear picture. Ms. Morgan stated sports are important but we have seen cuts to our budget, she is in favor of the 50% athletics cut; the community needs to fund raise to support athletics. Ms. Vadla is concerned about students with special needs and the Quest program; sports are important. Mr. Kelly asked Ms. Vadla to speak directly to the 50% athletic budget cut. She would like to see the financial impact of all the stipends; maybe not eliminate things but making them more equitable. Ms. Truesdell likes Mr. Kellys’ plan about discussing consolidation and reduction going forward; she supports everything that was discussed today. Ms. Morgan agrees there is not a clear plan but that can be addressed; she is also supportive of the 25% cut to the Athletic Directors. There already is a 25% FTE reduction for Athletic Directors. Mr. Taurianen said we already made cuts to athletics, cutting transportation and ice time; an additional 50% cut is a lot of fund raising. Ms. Cizek asked for a clarification about stipends. Mr. Holland stated that Athletics is not part of our strategic plan, he agrees that it does have an impact. We are the lowest of all the school districts on the amount we are charging for student participating fees. Mr. Dendurent discussed the collective bargaining unit and KPSSA. Ms. Dendurent said we do have KPBSD employees who are volunteering in athletics. Mr. Kelly said some of the drastic changes to the budget does require us to make cuts to Athletics. Mr. Kelly discussed the athletic plan aspect, and the fact that it is not fair to put Administration on the spot and ask them to come up with a plan today. He is confident individual sites and Administration can figure it out. Mr. Kelly would like to discuss the pools next. A reduction in pools is very difficult, a lot of community input about our pools; it is clear our pools are a very valuable community asset. Mr. Kelly stated we started saying we are not closing pools, we just can't fund them. We have to communities Ninilchik and Seldovia step up to the plate and working on funding to keep their pools open. They are trying to create service areas to keep their pools open, it is not an easy process. Mr. Kelly thanked Ms. Dendurent for her help in navigating this process. Mr. Kelly would like to take the pools off the list and give communities more time to figure out how they can help us fund pools. Ms. Cizek agrees with Mr. Kelly but historically communities then don't come up with a plan to keep the pools open. Mr. Kelly agrees, in conversations with the Borough, the Mayor is willing to create a work group to discuss the pools and theaters. It has made sense for the schools to manage the pools, now it no longer financially make sense. We need to start the work groups and start the process now; we cannot continue to fund our pools at the detriment of our classrooms. Mr. Taurianen disagrees; this is a cut that we have had all the way through. He believes pools should be cut before athletics, this needs to be a service area issue. Mr. Kelly said the pool manger cuts came into the 680 column. Mr. Kelly said this is a timing aspect, we do not have things in place to close the pools on July 1st; a solution that needs to be addressed at a later date. Ms. Morgan said they are a valuable community asset, but not something that can be addressed in the short term; she agrees with Mr. Kelly. Ms. Douthit agreed the pools are important to students and communities, the Borough has expressed interest, we cannot continue to fund the pools; she agrees with Mr. Kelly. There was discussion about in-kind funding. The Department of Education is changing the definition of in-kind. There is a lot in fluctuation. The Borough stated since we have been funded to the cap, there will be no additional funding for other items. Mr. Holland stated we can look at amount we are charging, trainings, are we charging the appropriate amounts to use the pools?. Mr. Kelly would like to add another item to the reduction list; the director of elementary education is open right now. The target is a $1M fund balance. He would like to add that to the reduction list and that takes us over the $1M mark. Mr. Taurianen would like to know what the plan is for this, he is not in favor of this idea. Ms. Morgan is concerned, and she would like to propose an alternative, maybe reducing technology instead. Ms. Vadala is not in favor of the elimination of the director of elementary education; it puts more work on the people left in district office. Ms. Cizek asked what Administration’s recommendation about the elimination of the director’s position is. Mr. Holland admitted that next year will be a stretch, but when we are reducing many other positions, the district office also needs to be on the elimination list. Mr. Holland believes the current Leadership Team can make it happen, but it will be hard. We do have a new Federal Coordinator position that can pick up some of the duties. Ms. Dendurent said our staff retention is very high, and we only have two new principals. Mr. Holland has deep faith in his team, he supports this cut. We have done our part, we have empty offices in district office; there are no bonuses. He has confidence in our principal group. Ms. Douthit had a question for Mr. Holland; how does this reduction affect the reduction/consolidation efforts going forward. Mr. Holland said we are actively working on a plan and are continuing to discuss it. Mr. Holland said down the road maybe need to look at outside entities to offer help instead of hiring people. Mr. Holland discussed the Federal Coordinator position is to replace the person who left. The new person has principal experience, and we think Federal Funding is shifting and this person can support the reduction of a director position. Mr. Taurianen has concerns about the wording "cut to director of elementary education". Mr. Taurianen would like to see a the organization chart and how that is going to work. Clarification it is a vacant position in the DO and not cutting a position. Mr. Holland discussed our district office staff strengths and he is confident we can make this work. Mr. Cizek, Ms. Douthit agree to reduce the position. Mr. Taurianen is going to hold his thoughts for now. Mr. Kelly called a 15 minute break, reconvening at 3:30pm. Mr. Kelly called the meeting back to order 3:31pm. In working through our reduction scenario worksheet, funding contingency is no longer funding contingency, it is how we are going to do budget reductions. Administration and HR needs to be able to tweak and have a contingency plan, so we can plug holes when we need to. Mr. Kelly would like to have broad recommendations to craft the final budget. We now need to look at additional options and review and see if there are any modifications that need to be made. We have a reduction in staff workdays for support staff. Since pool managers were reinstated, it was proposed that we keep the 10 workday reduction in pool managers. Ms. Cizek, Ms. Douthit and Mr. Taurianen agree. Mr. Holland spoke about the secretarial reductions. Ms. Dendurent spoke about the workday calendars, and how it is important that certain people be off on the same days, there are parameters that we need to follow. Mr. Kelly suggested a step-approach to staff changes. Administration is recommending keeping the reduction of support staff off the reduction list. Everyone is in favor of eliminating the staff reduction at this time. Next there was discussion about a 5 days reduction to Special education workdays. Mr. Holland said the 5 day reduction is not student contact days, but it is a reduction in salary. Administration recommends that this remains as a budget reduction. Mr. Cizek would like to see the .25 to Athletic Directors. Ms. Dendurent discussed the staffing formula for athletic directors. It was noted the .25 reduction might bring them out of the benefits category. Mr. Taurianen believes blended schools should receive special consideration. Mr. Kelly said the reduction is at a $33,000 level. Mr. Kelly believes Administration should make those determinations with all those considerations. Mr. Holland stated we do have middle schools managing athletics on their own. Mr. Kelly asked Mr. Soderquist to join the meeting to discuss technology. Ms. Morgan said she does not under value our need for technology but is in favor of pausing it or reducing technology. Mr. Soderquist reviewed the plan is to replace 1/6 of technology every year. Beyond 6 years the equipment quality declines and IT can't get parts to fix them. The plan is school focused, and staff focused. Mr. Soderquist stated E-rate is another aspect of technology, it allows schools to receive a subsidy to help with wireless, firewalls, routing switching which helps our networks. This cut would cause a reduction of devices in overall classrooms and potentially increase repair costs or not replace at all. Mr. Soderquist recommendation is to look at the e-rate and see if we can find any kind of savings on a one year cycle. We also need to look at can we do some timeline adjustments and defer some adjustments. Ms. Morgan said thank you and she appreciates the Mr. Soderquist way of explaining. There was discussion about Chrome Books and holding parents accountable for the damage/replacement fees. Mr. Holland agreed. Mr. Holland stated that Strategic plan #5 discusses technology, it is part of our five-year plan. The was a discussion about reducing school site supplies 10%, could we bump that up to 25%? Mr. Lyon said our budgets are pretty tight, we could survive 10% cut but not 25%. Ms. Dendurent stated it is DO responsibility to review all the expenses on pro cards and reviewing supply requests in APECS to make sure there is no waste. Ms. Cizek had a question about school board members being part of the reduction; specifically, AASB. Mr. Kelly stated we are currently paid through December and this needs to be a discussion. It is a $30,000 item the board needs to discuss. Mr. Kelly has plans to speak to AASB about the increase. We use AASB in their assistance in our board polices. The price is based on the size of district and enrollment. Distance Ed is seeing a reduction by 50%. Mr. Taurianen would like to discuss health insurance for the board to bring back athletics stipends. A health plan update will be provided at the July 7th board meeting. Board health insurance is in board policy and that would need to be addressed. Mr. Kelly summarized the changes to the eliminations and what was kept in the budget. Mr. Kelly asked any other questions. Mr. Holland said Administration had a recommendation of a reduction in days to library aides. Nurses are also another possible reduction; currently 191 days, there is a potential for a 5 or 10 day reduction. Ms. Ciufo stated any reduction to nursing would make it harder to recruit. Mr. Kelly recommended another review of the budget cuts. Ms. Douthit and Mr. Taurianen are not in favor of a 50% athletic reduction. A compromise was discussed at 25%. Mr. Kelly is not in favor of cutting other items over athletics. Mr. Kelly would rather put a low PTR in K-3 as more important than athletics. Ms. Cizek stated $1.3 is not going to be enough, we need to do the hard stuff now; we still have not been through negotiations yet. Mr. Kelly agreed we are still currently in negotiations and recommends that we hold at the $1.3. Ms. Morgan requests that the updated spread sheet be sent to the board. It will sent to the board and uploaded on BoardDocs. Please give as much information to Zen before the July 7th meeting, so he can work with finance to get answers. Mr. Kelly asked if the Finance Committee recommends that this move forward as a budget document? Mr. Tauriainen recommends we bring this forward with this as a draft for a full board discussion. There will be a work session on July 7th and then to the board for a vote. Mr. Holland thanked the board for all their hard work. Mr. Kelly is concerned about additional FTE cuts. Mr. Kelly has concerns about staff, and how to handle personnel action forms; he asked Mr. Crabtree to address these concerns. Mr. Crabtree stated it is a waiting game until we have full action of the board at the July 7th board meeting. Employees have 60 days to elect COBRA. This is unprecedented times, if we issue contracts, we can't take them back. HR needs to know if cutting days, it needs to be on their personnel action item. Mr. Holland said we need to stick to the list we already have as budget reductions. Mr. Taurianen said the board needs to have further discussion about library aides and possibly add something back about athletics. Mr. Kelly said cutting sports stipends at 50% does allow us to have a budget amendment if it goes through in January. Ms. Douthit is not sure how the stipends would affect the budget; it is all very difficult. Ms. Cizek had a question about library aides. Mr. Kelly said he believes library aides are important. Mr. Holland was confident if library aides were cut, sites would come up with a plan to keep their libraries open. Mr. Kelly noted currently we have 11 schools without libraries or aides, and the libraries are open. Mr. Holland said if we cut sports by 50%, sites will figure out a way to make it happen. Mr. Kelly believes in a staired stepped approach to staffing cuts. He wants our librarians to assist with reading. Mr. Holland discussed the library staffing at the schools. Ms. Morgan thought librarian aides were not on the list, but they all received letters of termination. Mr. Kelly spoke to the notice of non-retention. Mr. Kelly asked if there are any additional reductions we want to put back in place, so finance can move forward. Ms. Dendurent said Administration can prepare scenarios for athletics. Mr. Holland said the questions for the next meeting should be s what impacts kids. Mr. Kelly would like to move forward with a finance document for the July 7 board meeting. Mr. Kelly wanted to clarify things for the listening public and the media. Communities need to step up and figure out how to fund the pools. The board will be visiting consolidating throughout the district. The finance meeting agrees to move this forward.

3. Information Requests to Administration

4. Adjourn

A. Adjourn

Mr. Kelly adjourned the meeting at 5:05 p.m.