School board discusses Houston Middle School funding gap

PALMER — The Mat-Su Borough School Board held a brief meeting on St. Patrick’s Day to discuss the district strategy for filling the gap in funding for Houston Middle School. Mat-Su Borough Mayor Vern Halter sent letters to MSBSD twice in March requesting additional funding to allow for the Houston Middle School construction project to go out for bid by the end of March, ensuring HMS students would be able to return to school for the fall semester of 2022 after the November 2018 earthquake rendered the building built in 1985 unsafe.

“In our talk with the borough Manager, he clearly understands that it is the boroughs responsibility. The problem is money, that’s the issue and so I think that’s why we’ve received those letters where they’re asking us to pay for it, the problem is is that by asking us to do that we’ll be stepping out of our lane as a school district and setting a precedent for spending operational dollars on major construction,” said MSBSD Superintendent Dr. Randy Trani.

To date, the school district has contributed a $5.9 million transfer in 2020, $1.5 million in FF&E funds and another $15.1 million from a primary insurance policy. The Mat-Su Borough has contributed $6.5 million with an additional $4.45 million in a secondary insurance policy that was reported in between Halter’s two letters. To meet the timeline of the end of March to have the construction contract out for bid, another $6.5 million is needed. If the funds are not accumulated, the construction could be delayed by up to a year. Additionally, Mayor Halter mentioned the school district’s $15.8 million in Elementary and Secondary School Emergency Relief that was provided through the CARES act in each of his letters.

“That fund balance is designed for operations and so are the ESSER funds and you all know because you’ve gone through the budgeting process that we just approved, that that $15.8 million is already earmarked for operations. It’s not as if we have another $15.8 million we’re using, it’s going to save 47 positions, 47.26 I think next year and a similar number the following year and in addition to that we’re going to spend down our fund balance so there isn’t a pile of un earmarked money lying around to pay for this,” said Trani.

Halter also noted the borough funding of 50 percent of school bond debt reimbursements totaling $8.5 million. Trani presented Alaska Statute 14.14.060 (F) concerning the relationship between boroughs, school districts and building ownership.

“The borough school board shall provide custodial services and routine maintenance for the school buildings and shall appoint, compensate and otherwise control personnel for these purposes,” reads the statute. “The borough assembly through the borough administrator shall provide for all major rehabilitation all construction and major repair of school buildings.”

Trani also noted that the school district pays 77 percent of insurance premiums. Another trio of options was presented to fill the funding gap. Trani noted that the state General Obligation bonds currently in front of legislators includes $9 million for HMS reconstruction, but would likely not be passed quickly enough for the borough budget process. Trani also presented the idea that forward funding the $6.5 million could then be reimbursed by the Federal Emergency Management Agency, the state or the borough at a later date. The third option depends on the FEMA determination of the 50 percent rule, which was expected last week but has yet to be reported to borough or district officials whether or not FEMA will pay for the total cost of reimbursing the building due to more than half of the building being damaged during the 2018 earthquake.

“Surely the borough isn’t suggesting that we violate the law. So based off what is provided here, I’m all for pushing forward with this but all the while considering that Houston does need to open as soon as possible and those kids need to be able to learn,” said Ryan Ponder. “I think it’s a little premature perhaps for this conversation when FEMA is still yet to make their decision right and so this all may be for naught.”

Board members then began to question if the transfer of $5.9 million in 2020 violated state statute and set a precedent that school districts may have to follow in paying for school buildings themselves.

“This is a major deal. It’s not a roof, it’s a building for 300 kids who are struggling. It’s tough right now in Houston and so I appreciate the creativity but U think we need to put our thinking hats on and make this happen this year,” said Jeff Taylor. “The community’s feeling like that’s been dragged on just forever and it’s wearing on people it’s wearing on the kids and our responsibility, we have a responsibility to the community out here and to speak up for them but I worry that we’re hiding behind this statute thing when we’ve already stepped around it per se. Maybe we didn’t know it last year when we did that but irregardless I hope that we can just get this thing. It’s got to happen.”

Trani briefly presented an update on COVID-19 numbers around the state. The Valley’s case rate per 100,000 residents stands as the highest in the state at 39.07, more than twice the rate of Anchorage at 16.39. The vaccination rate in the Mat-Su Valley is the lowest among the five large school district areas presented at 15,352 per 100,000 residents.

“We’ve been putting our energy you know trying to get as many people vaccinated as possible because we think that’s the quickest path to returning to normalcy,” said Trani.

Trani presented his plan to enter into phase 2 of the return to normalcy, which would include unmasked environments at the extended school year classes during the summer and a reevaluation of how next school year may look as vaccinations increase. The School Board and Assembly will meet at 6 p.m. in the Assembly chambers for a joint meeting to discuss budgetary items.