KIBSD outlines FY27 shortfall, asks borough for full allowable local contribution amid program cuts

Kodiak Island — The Kodiak Island Borough School District presented a draft FY27 budget at a joint work session on March 4, telling borough officials it projects $49,723,412 in revenue for FY27 while showing higher, still-projected expenditures and relying on a mix of fund-balance allocations and state hold‑harmless provisions to bridge gaps.

CFO Krista Cooley walked the Kodiak Island Borough Assembly and the KIBSD Board of Education through the district’s budget-development timeline, fund-balance categories and the state foundation formula used to calculate the district’s basic need. Cooley emphasized the presentation was for discussion only and not a balanced budget. “What I’m showing you guys tonight is not a balanced budget,” she said, adding that the numbers were still being refined.

The district described a series of programmatic reductions the board has approved to avoid school closures. The administration said the board directed eliminations of positions and non-personnel expenditures that total roughly $2.7–$2.8 million, rather than consolidating or closing schools. Cooley said additional contingency cuts may still be needed depending on final revenue, enrollment and negotiated agreements.

Board member Mike Litzel told the assembly the board has also discussed reserving about $500,000 of remaining fund balance for a technology refresh — an allocation that would cover teacher laptops (he cited an estimate of $440,000) but would further reduce the district’s spendable reserves.

The district also said it qualified for state hold‑harmless treatment after a greater-than-5% drop in student enrollment, a measure that stair-steps funding replacement at 75% in the first year, 50% in the second and 25% in the third year to soften sudden losses tied to enrollment declines.

Several assembly members framed the request for local support as a community decision rather than an individual official’s obligation. Beau Whiteside, a borough assembly member, said the $6.85 million calculated as the estimated maximum local contribution represents a community ask to cover the district’s basic need and that borough leaders must weigh the fiscal trade-offs for other municipal services.

Board members stressed the structural source of the shortfall. “Every district in the state is in crisis,” Board member Mike Litzel said, pointing to a decades‑long gap between state education funding and inflation-adjusted costs that the board says totals millions for Kodiak alone.

Assembly members and staff pressed administration on assumptions used to close gaps — notably a planning assumption that up to $1 million might return to the district from insurance-related overpayments in some years. Cooley cautioned against relying heavily on insurance overpayment as a recurring revenue source, describing it as historically variable. She said administration was tightening the planning assumptions around that line item.

Next procedural steps: the district said it expects to submit its formal budget request to the borough by April 30 to allow the borough time for review and a May 30 response, consistent with past practice. The district will also convene a community budget advisory committee this spring to solicit broader input before further decisions.

The joint session offered few firm commitments: the board presented scenarios and asked the assembly to consider the request against borough fiscal constraints. The budget remains a work in progress, and the district said additional detail will be provided as enrollment counts, state numbers and labor negotiations are finalized.