Juneau The School District officials are preparing for difficult choices as they confront an anticipated $9.5 million budget gap.
“The reality is that this school district has to take immediate and long-term financial adjustments,” Superintendent Frank Hauser spoke to the school board Wednesday.
After the Director of Administrative Services Cassee Olin quit in the month of June, The district was temporarily appointed Lisa Pearce to manage the budget. Pearce observed that the budget was overestimated by $5 million and undervalued expenses by $2 million.
The wrong estimates are partly due to accounting mistakes, Pearce said. A few figures were entered incorrectly into districts’ accounting system. Other numbers were not includedas an example, for instance the budget didn’t contain the superintendent’s salary and benefits.
Member of the board David Noon, who was elected to the board in October declared the board member was “incandescent with anger.” The budgeting mistakes made it more difficult to push for increased state-funded education, which teachers across the state claim isn’t keeping up with the rate of inflation .
“span style=”font-weight font-weight: 400 ;”>”These are apprehensible mistakes,” he said. “This means that our advocacy with the state more challenging .”
Pearce claimed she did not detect any signs of deliberate financial mismanagement. Instead, she noted that it was the case that district’s estimates of revenue were not accurate which enabled the district to stay clear of budget reductions.
Its style=”font-weight 400 ;”>”You did not have Hawaii trips, and you didn’t receive $50,000 in bonuses,” she said. “You were getting squashed on the revenue side and the other side of the spending was not stopping. It was like an uncontrolled freight train traveling in both directions. .”
The district’s financial support through the state budget is determined by the number of students. Every year the school board reaches an agreement on an estimated number of students for the purpose of creating the budget. This year’s budget was built on a mid-level projection which turned out to be an overestimate. The district underestimated the revenue for this year.
“span style=”font-weight 400 ;”>”The board has been, I think positive, but not necessarily wildly optimistic but certainly unwilling to acknowledge the decline in the student population of our town,” board President Deedie Sorensen stated. “And I think a big part of it is that as with everyone around town, we’re reluctant to admit the fact that Juneau has been shrinking.”
Pearce informed the board she was not convinced it would be feasible to address this $9.5 million shortfall in a single year. In fact, the City and Borough of Juneau already contributes the most it is able to contribute to its operating funds.
Hauser said the district’s budget woes “uncharted terrain” to Juneau. He also mentioned his experience with the Copper River School District, which declared bankruptcy in 1986 and was forced to cut the salaries of teachers.
The board requested Hauser to prepare a an inventory of all potential budget reductions. The next board meeting is scheduled for Tuesday January. 16.
