January 24, 2013 | Volume 43, No.3

Board asked to explain spending

Haines Borough Assembly members say they want more information on school board spending decisions following the board’s approval of $619,000 for district facilities and equipment at a December meeting.

The December action came a few minutes after a joint assembly-school board meeting about borough support for funding school capital projects through the Alaska Legislature, including upgrades to the fire suppression system at Mosquito Lake School.

Jerry Lapp, who chairs the assembly’s finance committee, said this week he was surprised by the board’s appropriation and hadn’t previously known the district even had a budget for such improvements, much less that it contained such a large amount.

“The borough’s been taking care of things at the school. When (school officials) come up with a windfall and say, ‘This is our CIP account,’ I don’t understand that,” Lapp said.

Including $180,000 from reimbursement of an electrical company overcharge, the school had $875,532 in the “facilities/equipment” fund, according to an audit conducted last fall.

“We didn’t even know about (the $619,000 appropriation) until after (the discussion of the capital projects.) It seemed like a lot of fund balance,” Lapp said in an interview this week.

Member Debra Schnabel said she was “shocked” that on the same night of the Mosquito Lake discussion, the board approved a long list of improvements “not even remotely as important” as the fire suppression system.

“I think in this particular instance, there was such a huge fund balance, it seems like somehow that should have been addressed or exposed. The school district needs to recognize that those kinds of extraordinary circumstances need to be brought forward for discussion,” Schnabel said.

The $619,000 appropriation was for 15 items, including $50,000 for a wrestling mat lift, $40,000 for improving the school-wide security camera system, $60,000 to replace four copy machines, $35,000 for a card-lock system for exterior doors and $35,000 for landscaping and exterior lights.

The school district will submit a letter of explanation to the borough next month, school board member Anne Marie Palmieri told the assembly’s finance committee this week. She said after the meeting that she understood the assembly wanted to know why the district won’t pay for the Mosquito Lake job, what types of projects the school board sees using its capital funds for, and how the school sets priorities for facility improvement projects.

Mayor Stephanie Scott said school board members can argue that projects like the one at Mosquito Lake are considered “major maintenance” and thus the responsibility of the borough government – (the school typically pays for “routine maintenance”) – but the question of the surplus in the district’s “facilities/equipment” fund remains.

If the borough provides money to the school district that becomes a surplus not used for operations or for capital projects, the borough perhaps should be keeping that extra money itself for use on school projects, Scott said. “It’s a question of wants and needs and we all want a bunch.”

Scott said she hoped the explanation from the school district would help achieve transparency and establish how things have been done in the past to help guide funding decisions in the future.

Borough and school leaders have been discussing responsibility for major maintenance projects for several years. An informal “major maintenance group,” including borough and school leaders, has met regularly under the direction of Scott.

State law limits the amount of the school district’s fund balance to 10 percent of its operating budget.