School Board passes resolution to fund remainder of Houston Middle cost

PALMER — The Mat-Su Borough School Board unanimously approved Resolution 21-006 to fund the remaining $6 million needed to bid the construction of the Houston Middle School rebuild.

The resolution will be forwarded to the Mat-Su Borough Assembly at their next meeting on April 6. MSBSD Superintendent Dr. Randy Trani detailed the crafting of the resolution to detail the $6 million loan at zero percent interest from the borough if a variety of other funding sources are not available.

“So, much broader language to encompass the idea that if the state legislature did anything to put money toward this project that then we would be reimbursed this money that we’re putting up front,” said Trani.

The MSBSD school board appropriated $5.9 million in 2020 and the school board and Assembly held a joint meeting on March 23 to discuss funding the remaining $6 million of the $34 million project. Without a determination from the Federal Emergency Management Agency to date, opening the new school to students in the fall of 2022 would likely have been delayed up to a year. Trani also noted that the additional cost of furnishing the school once constructed would cost an additional $1.5-1.7 million.

“A significant, the majority of the funding will have come either because of insurance premiums that we paid or money that we put into it,” said Trani. “Talking to the manager, he has indicated that it’s a timing issue and so that’s why I floated the idea that we could forward fund this money to keep the project on time with the understanding that we would get his money back either through FEMA or perhaps a state allocation or if in the end that all those other funding sources didn’t pan out that the borough would pay us back zero percent interest. Like I said, I feel like this is really a reasonable ask.”

School Board President Ole Larson asked Deputy Superintendent of Business and Operations Luke Fulp to detail how the school district ended up with an unassigned fund balance large enough to cover the additional $6 million.

“We identify that the district unassigned fund balance has experienced year over year increases. A majority of this increase was not a result of policy change or a change in budgeting practices, rather increases to the districts unassigned fund balance can be attributed to the Governor’s proposal to dramatically reduce education funding in the spring of 2019 followed by a statewide school closure in the spring of 2020 due to the covid-19 pandemic,” said Fulp.

Fulp said that a two percent increase totaling $5.2 million was added to the unassigned fund balance in 2018 and nearly $9 million was added due to hiring freezes following Governor Dunleavy’s proposed budget in the spring of 2019. That budget proposed $40 million in annual cuts to the MSBSD and tested the validity of educational funding appropriations.

“The outcome was very positive but it created a great bit of consternation and unpredictability for school districts across the state. We implemented spending and hiring freezes immediately, the result of which increased our fund balance pretty dramatically, almost $9 million in that year,” said Fulp.

The school board had a work session on the proposed Resolution 21-006 and noted the uncertainty of future members of the assembly fulfilling their payment commitment. School board member Ryan Ponder had five questions concerning the language in the resolution and the legality of the language proposed. Board Vice President Tom Bergey moved an amendment that had been suggested by Trani to specify that the loan would be paid back by the borough unless funded by capital appropriations from the state of Alaska, FEMA, or school bond debt payments over 50 percent by the state after 2022 that would not require an increase in borough taxes.

“I do trust in the super that we’ve hired and the staff that we have. I have to say I think this is the best superintendent and staff the district has ever had,” said School Board member Jeff Taylor. “I trust in you guys and in them that if even if none of this does come back, we will find ways to make it work so it doesn’t hurt our students. What we do need to do is, we’re here to help students by transferring this money. We’re doing just that but I put my trust in the superintendent and staff that we have to make sure we’ll be ok even if it doesn’t come back.”

Bergey’s amendment to specify where funding could be reimbursed from passed unanimously. Resolution 21-006 also passed unanimously.

“I’m just glad that we can move forward on this and get the school rebuilt out in Houston and I’m glad that we have the resources available that we can do this without increasing the additional tax burden on the residents of the borough,” said Bergey.