The cost of educating Sitka’s students has slowly climbed over the last six years, while state funding has remained unchanged. “When we look at state funding that has kept us at a flat Base Student Allocation since 2017, cost increases, inflation, and all the other factors that come into place, we are finding it more and more difficult to be competitive with hiring and retaining our teachers and our paraprofessionals and our administrators,” Superintendent Frank Hauser told the Sitka Assembly. (SSD image)

The Sitka School District will have to wrestle down a $2 million dollar deficit next year, and it’s looking for the city’s help.

Starting the annual budget process in the hole is not unusual for the district – in fact, it’s usually the case – but it always prompts hard conversations about how to make ends meet.

The Sitka School Board and the Sitka Assembly met in special session on Thursday (2-3-22) to take a look at school finances, which are the single largest expense of city government.

Superintendent Frank Hauser outlined the problem.

Hauser – There are a couple items to keep in mind when considering the projected deficit. We’re expecting enrollment to remain steady. Salaries and benefits uncertainties exist due to ongoing collective bargaining with two employee bargaining groups. We are expecting science curriculum expenses this year in light of the adoption of the new science standards. And again, of course, it is still very early in the budgeting process. Cuts will need to occur in conjunction with the use of the fund balance. It’s important to note that the fund balance alone cannot sustain a $2 million deficit between projected revenues and projected expenses.

The “fund balance” is the district’s savings account, which currently stands at over $3 million, but the board usually prefers to draw it down only as a last resort.

Assembly member Thor Christianson asked Hauser the $2 million-dollar question. 

Christianson – Any thoughts on how you’re going to make it up? I mean, I know it’s early on — how you’re going to make up that $2 million?

Hauser – I’ve already had some conversations with my principals to go through and look at ways of trying to identify cost savings. We are looking at determining if there’s going to be any retirements or resignations, and trying to manage some of the reduction through managed attrition. And looking at ways to just kind of streamline. We do have some extra monies available still from the CARES Act and the COVID money that came through, and there is a possibility utilizing some of that to help offset some costs.

Enrollment in the district has continued a slow decline, but the anticipated drop next year is not enough to explain the deficit. In fact, the 40 intensive needs students served by the district help support district finances, by bringing in roughly 13-times more funding per pupil than other students.

Assembly member Rebecca Himschoot – a long time teacher in the district – asked Hauser about the impact of intensive needs students on the budget.

Himschoot – Because those students often have a human being attached to them, right? It’s a huge personnel cost.

Hauser – Yes, it is, it is a huge personnel cost. It could depend specifically on the students and the needs for that student. You know, it’s about $80,000, when you look at the each intensive needs student.

Sitka administrator John Leach said it was likely to be this assembly’s approach to start by funding the district with the maximum allowable contribution – often called “the cap.” It would be just under $8 million dollars next year, or 39-percent of the district’s overall budget.

Not all assemblies in the recent past have had the same approach. Hauser was grateful, and now looked to the state government to revisit its obligations to education, under the BSA – or Base Student Allocation. 

Hauser – I think the fact that we’re starting with being funded to the cap is just great. That’s just a fantastic position to be in and just the support that we’ve seen so far has just been a real positive feeling. But when we look at state funding that has kept us at a flat BSA since 2017, cost increases, inflation, and all the other factors that come into place, we are finding it more and more difficult to be competitive with hiring and retaining our teachers and our paraprofessionals and our administrators. And so it’s something that we need to take into consideration and when the city funds us to the cap, but yet the state has us at a flat BSA for the last five years, that we have to figure out a way to still be able to make and find those resources to be able to continue to meet our obligations and provide those services for students.

The next community budget hearing before the Sitka School Board will be at 6 p.m. Wednesday, February 16, in Harrigan Centennial Hall. The budget must be finalized and submitted to the assembly by the end of April.