The Fairbanks North Star Borough Assembly and the Board of Education have worked out how to use $35 million in taxpayer money that the School District has kept in reserve. The deal was worked out after months of meetings and work sessions, and a compromise ordinance passed Thursday night will both fix the roofs at two schools and cap the amount the district can keep in reserve.
The ordinance caps the reserve at 10 percent of the local contribution – or put it another way, 10 percent of the local tax dollars the Assembly assigns the school district in a year. And there’s a formula that lets the district spend down to $20 million in its reserve fund. That’s a lot less than the unspent $35 million that has accumulated over recent years.
Borough Mayor Bryce Ward says it wasn’t just money – but trust – that the ordinance might restore.
“It creates a very transparent process where we are able to look at those different funds, what draws the School District is considering, and how that equates into the contribution from the borough into the school district,” Ward said.
The large reserve fund came to light last spring when the school district cut teacher positions in spite of having reserved funds. Outraged parents worried about over-crowded classrooms demanded the money be spent on operations.
Since then, the Assembly has wanted to take back some reserved money – not just for operations, but maintenance. And things really sped up when voters turned down an October bond issue that would have paid for some school repairs. Former Mayor Karl Kassel put forth the original version of this ordinance to have the money turned back to the Maintenance Reserve Fund – specifically to be spent on school maintenance.
But school board members and Superintendent Karen Gaborik said keeping a “rainy day fund” was only smart.
The ordinance last night was re-written by Mayor Ward and Assembly member Matt Cooper.
“The school district is agreeing to pay for two roof projects up front as part of this,” Cooper said.
Those are at Woodriver Elementary School on the west side of town and at Ben Eielson Junior-Senior High School about 30 miles east. The price tag for both school roof repairs is $7,408,373. The order just squeaks into the planning timeline for this summer’s construction season.
Some of the compromise still rankled Assembly members. Shaun Tacke wanted the cap on the school district reserve reduced much further, especially since the Borough itself doesn’t have a big reserve fund.
“Twenty million is way too high. I think $7 (million) to $9 million would be far more appropriate,” Tacke said. “But I’m trying to find a happy medium which is much better ground. It would be much more around $15 million which I think is obscenely high, for it being a component unit.”
But others, like Aaron Lojewski thought the ordinance headed the two administrations in the right direction.
“I think what the school district is doing is – an olive branch,” Lojewski said. “And my instinct is to reach out and grab it. Even if I don’t think it is a big enough step in the right direction, I still want to reach out and grab that olive branch. I don’t have to like it, but I can still grab it.”
After debating the measure, the Assembly passed the ordinance unanimously.