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Kenai Peninsula Borough panel reviews mayor's FY27 budget, grapples with $62M school funding request
Summary
At a finance committee meeting, staff presented the mayor's proposed FY27 budget and the Kenai Peninsula Borough School District's request for a roughly $62.4 million local contribution. Presenters warned that funding to the cap would draw down fund balance and risk unsustainable budgets in later years.
The Kenai Peninsula Borough Finance Committee reviewed the mayor's proposed FY27 budget and a Kenai Peninsula Borough School District local-contribution request during a meeting that opened at 2:22 p.m. Staff presented revenue, expenditure and fund-balance projections and offered scenarios for sustaining education funding over the next several years.
Miss Harbaugh, presenting the mayor's budget, said the borough's general fund for FY27 is about 1.3% higher than FY26, roughly $1.35 million, while assessed values rose about 2.7%. She warned that sales-tax growth lagged and that the FY27 plan anticipates using about $6.7 million of fund balance, largely for education-related needs. Harbaugh said the budget document lists the school district's total budget at $154,424,482 and includes the district's request for a local contribution of approximately $62,359,080.
—I do believe that we can manage without a tax increase,— Harbaugh told the committee while describing a baseline scenario that returns the borough to a $60 million contribution in FY28. She cautioned that a sustained $62 million trajectory without returning to the trend line would require substantially more funding over time and could push the borough below required minimum fund-balance levels by FY30.
Assembly sponsor Miss Ecklund urged the committee to —fund to the cap— now, arguing students need resources immediately. —It probably comes as no surprise to any of you that I am requesting funding to the cap,— she said, noting she had discussed timing with the borough attorney and that this motion would set a floor now and be revisited later.
The mayor framed the trade-off more cautiously. —The $62,000,000 this year is a stretch,— he said, praising KPBSD for difficult cost-control decisions but urging a collaborative approach across borough and district to avoid long-term unsustainability.
Committee members pressed staff on projections and specific drivers. Mister Dunn asked why some slides projecting FY30 fund balances included a mill-rate of 4.2 while others used a 3.85 example; Harbaugh replied that the 3.85 example shows a plausible path without increasing the mill rate, whereas the 4.2 line was included as a stress-case projection. Harbaugh also noted FY27 is an extra-pay-period year (27 pay periods), which increases personnel costs about 3.7% for the year.
Harbaugh recommended a cautious path that allows two years of one-time funding (FY26: $4.7M; FY27: $3.3M) but then returns to a sustainable trend that avoids drawing down reserves beyond the minimum policy level. Several members emphasized they did not want to raise the mill rate if avoidable but recognized options could be limited if both borough and district costs remain high.
No formal assembly vote on the school contribution was recorded during the session; the committee moved on to introduce related ordinances and budget documents for later action. The meeting adjourned at 3:38 p.m.
