I wrote the following back in January: “This district must make both immediate and long-term financial changes. All our jobs, together, will be to look at that truth, without blinking, and with the courage and resolution to address it.”
We have looked at that truth, without blinking, and addressed the district’s financial situation with courage and resolution.
As we turn the corner on what has been called “the worst financial crisis this district has ever faced,” let’s take one look back, so there is no danger of forgetting the past and repeating it. We will then turn our gaze resolutely toward the future.
Academic Opportunities
• Since 2000, the Juneau School District has lost 1,533 students, 27% of its student population. The only change to the district footprint since 2000 was the addition of a high school.
• The district has lost nearly $8.5 million in state foundation funding since 2017.
• Declining enrollment, inflation, and near-flat state funding stretched resources and staffing, affecting academic opportunities for students.
High schools, separately, could no longer offer a full slate of in-person classes. Post-pandemic, students continued to rely on online courses, and students, some freshmen and sophomores, had “free periods” because there were no classes available for them to take.
Deficits
This year, the district faced not one, not two, but three multimillion-dollar deficits.
• FY23: Every year, every school district in Alaska has an independent audit. The audit is completed in the fall for the preceding school year. JSD’s FY23 audit was completed in November and revealed a deficit of $1.94M, just for FY23.
Let’s speak plainly about what that audit finding meant: Without the centralized treasury with the City and Borough of Juneau, the district would have run out of money in the operating fund before the end of FY23.
• FY24: The district entered FY24 carrying that $1.94M deficit. Following the audit, the district brought in a school finance specialist to do a line-by-line review and revision of the FY24 budget, adopted last spring.
That budget revision was presented to the board at the April 16 meeting. It revised the material overstatement of revenue and understatement of expenses identified in the FY24 budget adopted last spring.
The outside financial consultant didn’t make the overstatements and understatements — she wasn’t even here last spring — she identified and corrected them.
Current administration will not speculate as to how and why the original FY24 budget detail was developed. Our job was to develop a year-end projection for all line items.
If you’re online, posting about one specific budget line item, don’t forget the other 2,000-plus line items. Unfortunately, any specific line-item overage in the original FY24 budget from last spring was negated by significant overstatement of revenue and understatement of expenses, especially in the areas of PERS/TRS on-behalf employer obligations and state foundation funding.
As reported, since January, for FY24, the district realized the following: $1.4M savings in resignations, $1M hiring freeze savings, $1.5M savings from other cost-cutting measures and $3.9M in non-instructional shared services costs equals $7.8M.
That’s a total of $7.8M in savings since January for FY24, but the district has a projected fund balance — not of $7.8M — but of only $633,185. That is because there was a significant deficit in FY24.
Let’s also speak plainly about what that means: Without action taken in January and the centralized treasury with CBJ, the district would have run out of money in the operating fund before the end of FY24.
• FY25: Due to declining enrollment, flat state funding, and increases in fixed and personnel costs, a “carryover,” level-services budget for FY25 had a projected deficit of $9,684,470 — for FY25 only.
The district has now largely resolved these deficits:
• FY23 and FY24: These deficits have been resolved primarily from the cost savings and other measures noted above. CBJ also approved a five-year loan of up to $4.1M.
• FY25: The FY25 deficit was resolved with the board-adopted reorganization and consolidation plan, PTR increases, reductions in force, and non-instructional shared services costs.
Looking forward
The board-adopted reorganization and closure plan has been approved by the state. The Alaska Department of Education and Early Development noted “The department appreciates the district’s efforts to work in cooperation with the families of Juneau as these closures and transitions take place.”
The last issue of the district’s “Transitions” newsletter listed the over 30 new courses current Thunder Mountain High School students and the 12 new courses Juneau-Douglas High School: Yadaa.at Kalé students had the opportunity to request because of consolidation — everything from AP biology to woods and metals.
The district is repositioned for the future on firm financial footing, with the promise of increased academic opportunities for students through consolidation.
• Frank Hauser is the superintendent of the Juneau School District.
