Mat-Su Borough: Joint Assembly/School Board Meeting - Sep. 8, 2026

Staff a disservice. These cancellations affect everyone. I have checked with 3 local businesses that offer daycare in Palmer. None of them have a bus or a van to transport students to school.

None of the elementaries that I know of have before or after school care, so this falls directly on the parents to fix. We're starting our 5th year of the 10-year contract, and the past does not look good. This cannot be the new normal. This is unacceptable, and our kids deserve better. Durham needs to be fined or ran out of town.

I don't know what the solution is. Um, I do know that you guys are all elected officials, so please take this seriously, and let's come up with a solution.

For our children. They deserve better. That's it. Thank you. Thank you.

You did great. Uh, Rebecca Emerson.

Good evening, my name is Rebecca Emerson. I'm a veteran and a parent of two kids in the district, one born with Down syndrome. Winston loves school so much he gets angry at me for not stopping there during the summer. His teachers are wonderful and the administration works so hard. However, our current district reality is forcing this incredible staff to work where resources are stretched far past the breaking point.

This year at open house, I was shocked to learn that a program from one of the shutdown schools was moved into our school without the needed paraprofessional support. This strained existing programs and forced the school to group intensive resource kids into the same gen ed classroom to the point where half the room is now sped, sped kids needing focused support. We are feeling the direct impact of recent budget cuts. The Matsu Centennial reported that the district cut about 50 non-certified positions, adding to more than 170 eliminated in recent years. How many of those were paras?

For my son, the para math has become insufficient and unsafe. We see a daily shuffle of para support taken from the resource room to the intensive needs room to the RISE program. It isn't just a scheduling hiccup. It forces staff to rob Peter to pay Paul every single day with building subs. How can anyone focus on teaching under these conditions?

Remember, for children with intensive needs, The neighborhood school is the main choice. One of my kids attends a charter school. Charter schools can turn SPED students away based on resources, but his neighborhood school, which also lacks resources, takes him in with less than the bare minimum support. You might ask, why don't I homeschool? Quite frankly, I don't have the training to teach my son, and finding an adapted curriculum is a massive barrier I talk about with often to my Down syndrome friends.

Mothers. Also, we both work. In addition, hybrid schools give the same answer: sorry, not enough resources for the in-person part where my Winston thrives. He loves going to the in-person classes. Lastly, I reached out to private Christian schools and was told no again.

One was sort of willing to discuss having a Down syndrome child with a price tag of $38,000 a year. Our neighborhood public school is the only place that turns no one away. I've advocated for a formal special education advisory committee to the school board. We have a seat, and that's a positive first step, but we need more than information sharing. We need structural integration as a matter of parental rights and a real budget support for SPED programs.

Every child in this valley has God-given value. Please work together across the borough and the board to protect these classrooms and properly support all children. Thank you for your service and for your time.

Mary? Mary?

Good evening, my name is Mary Robinson. I'm a Matsu Borough resident taxpayer. I represent myself.

Never ever forget December 7th, 1941. September 11th, 2001. January 6th, 2021. Assaults on our democracy. I gave the clerk some paperwork, uh, Dolly Parton Imagination Library.

We, we lost several cultural icons over the past several weeks. Dolly Parton, if she did not do anything else, the Imagination Library. So the paperwork that I gave to the clerk to pass out to you is for any of you that would like to sign children in your lives up for the Imagination Library. Gloria Steinem, part of the fight for women's rights. Tim Curry, best known for his character Dr. Frankenfooter in the Rocky Horror Picture Show, a fictional pansexual cross-dressing mad scientist alien from the planet Transsexual in the galaxy of Transylvania.

If you haven't seen the Rocky Horror Picture Show, I highly recommend it. Now, you haven't seen my smiling face. I haven't appeared before the school board in probably several years. I think the last time I appeared was you had just lost two lawsuits for promoting your political and ideological agenda. And there were public records requests and quite a bit of money paying two high-priced prestigious Anchorage law firms to represent you.

You, of course, as school board members did not actually pay. To reiterate, we the taxpayers paid for those lawsuits. I haven't appeared before the Matsuburo Assembly because the war that's not a war to open the Strait of Hormuz that was open when it was bombed illegally on February 28th has driven up prices for everything, including gas. Diesel is 6— $6 a gallon. Hard to believe.

I can't even say that. Gas is $5 a gallon. Ground beef for my world-famous chili is up to $8 a pound. So I have to decide, do I want to pay gas to come over here and speak to you? Do I want to pay my electric bill?

And just remember, education— for the past 30 years, Alaska has been under Republican governance, including education. We've had for 8 years a Republican governor who, it's hard to believe, spent his whole working life in in education. So just remember that when it comes time to vote. Thank you. Rebecca, good evening.

Um, you'll have to excuse me, I lost my voice yesterday, so a little scratchy. But, um, so that's a little interesting to follow. I'm a mother of 10 awesome boys in the Valley, and some of them are still in the school district. Actually, 5 of them are still in the district. District, and I have a kiddo over at Palmer Middle School, one at Wasilla High School, one at Pioneer Peak, and then 1, 2, 3, 2, 3.

Oh, he's— oh, I guess he's not in the district, he's with IDEA. And then we have another one at Valley Pathways who's kind of awesome. So anyway, so I'm here tonight because I think we have the best school district in the state of Alaska. And I really appreciate it. So I just want to say that first, that I really appreciate watching the standard that you guys set and then watching our kids rise to meet it.

And the, the, um, stuff that Dr. Traini has gone over recently that has showed the stats has been really awesome. So I just really appreciate that. Um, but I'm here tonight because as a parent, um, I was really shocked to see the books that were not in the library at my school, but the books that my 8th grader was having to read as companion novels with his with his schoolwork. So let me be really clear, these aren't books he's going in and checking out. These are books that are being used to teach him language arts.

And so every year I review those, and, um, this year I was like, um, no on 6 of them. 6 Out of 10, I was like, absolutely not. And I was told that my standards aren't the same standards that other parents have. I was told other parents don't have an issue with it. And then when I brought in my reviews and sat with the administrator, they, they tolerated me.

They were kind, but they tolerated me. And it was, um, shocking for them to look at me and say, these are board-approved books, so we're not— probably not even going to read the reviews that you brought us. Um, that was shocking to me, and I was like, okay. So then they, they offered the option of me submitting books in place for him. But, um, as a mom that fights for a lot of kids across the board, I've been a foster parent for 14 years, um, all kids matter to me.

All their hearts and minds matter to me. And so is protecting Michael's really important? Yes, but protecting all of them. So they revised the book list for the entire 8th grade because they found out, guess what, the school board bird list. And they were like, oh, I guess we messed up.

So then they sent out a new list, which I again marked several off and said no. And I just want to tell you what, what is in these 8th grade— in the 8th grade curriculum that is being read. And these ones are on your board school board approved list. One of them is called— sorry, let me get to my reviews here. So my big, my big issue is sexualizing my kids violence because I rescue kids out of violent situations.

Oh my God. But I will get these reviews, you guys, and get them passed out. But it's really, really crazy that one of them is 6 weeks of a 16-year-old boy that stabs his father, and they spend 6 weeks on that. I said absolutely not. My son was bruised and broken when he came into foster care.

He won't be reading that. So you guys should know. Um, Rebecca, will you state your name for the record, please? Rebecca Gall. Thank you.

Okay, so that's all the people that signed up, but we are open now to anybody that would like to address the assembly or the school board on any subject. Doesn't have to be something that's on the agenda, so you just come up and state your name and give your testimony.

Good evening, uh, board, uh, and assembly members and staff. Todd Smolden with the governor's office. I just wanted to, uh, come up real quickly and report on, uh, the AKSTAR results, which I'm sure you've seen. And specifically what I wanted to mention is that What we notice statewide is that reading in grades 3 through 5 has improved, which is, which is great news. A lot of the other scores statewide are flat at other grade levels with, with other content, but I think that what that points out is that when legislation like the READS Act is passed, which directs funding to specific outcomes and specific methodology, that there's evidence that that is good policy.

So, um, I think locally we can use that example as well. Also wanted to mention just that, um, during the governor's tenure, he has approved about $1.5 billion additional dollars for education funding. So I, I know that there's the narrative out there that the governor has cut funding, but during his tenure, it's about $1.5 billion in 8 budgets. As always, I am ready and willing to answer questions, or at least I will be for another 3 months, so don't hesitate to reach out to me. Thanks.

Thank you.

Ma'am. Good evening, everybody. Um, Natsuo assembly members, school board members, um, administration. Um, my name is Mary Duer, and I'm a speech-language pathologist in the district. I have been for several years, and I speak I'm just speaking for myself, but I think it's important to be here.

Um, so I was previously at Meadowlakes Elementary, but I'm now at Cottonwood Creek Elementary with another group of educators that are dedicated to their jobs and students of Matsuburo School District. So I'm very happy to be there, although I do miss Meadowlakes dearly. I'm here tonight to ask each of you, each of you school board members, assembly members, and our district leadership to please attend one of the SEAT SEET meetings hosted by our district. SEET stands for Special Education Engagement Teams. Um, these meetings provide a platform for parents and community members to discuss special education services, budgeting, and the federal law IDEA, which is Individuals with Disabilities Education Act.

These are the parents of your most vulnerable at-risk students. These meetings are held once per quarter And my understanding is that the first one will be held Thursday, September 18th at 5:30 PM. However, we'll need the district to confirm that. So again, Thursday, September 18th at 5:30. So as we transition into a fresh school year and fresh start for many students and staff within our district following these 3 school closures, I ask that you take the time to hear the voices of the parents that have the children that require special education services.

These services are directly impacted by the decisions that you all make here, as well as the legislators at the state and national levels— legislators that you are able to directly consult regarding your— these local concerns. So I, I ask you to do that, please. Um, and I also want to thank the mothers that have already spoke. Um, I think it's very important that our parents, but our mothers especially, are heard. Um, because, well, let's be honest, sometimes they, uh, know more of what's going on with, uh, with things.

So anyway, thank you for what you're doing. I know you're in a difficult situation, but, um, I really appreciate that you take these students into consideration when you're making these really hard decisions. So thank you so much.

Anyone else?

Do we have anybody online, sir?

No. One last chance then for audience participation.

And still nobody online. Okay, ready? I'll go ahead and close audience participation. Then we're to the joint items of business. The building construction progress and review of the capital construction plan.

And do we have a building construction? Okay, I call.

Why we're waiting to turn the mic on, I want the record to show that Assemblyperson McKee arrived at 6:09. Thank you.

All right, good evening, Madam Mayor, members of the assembly and school board. My name is Cole Branham. I am the project management division manager at the Matsu Borough. Um, so tonight I'm going to give you guys an overview of the capital program at the school district. We currently have 16 projects under management and a value of about $53.5 million.

So this slide here shows our authorized budget, committed costs, expended expenditures to date, and uncommitted balance. I just wanted to note on here the, the uncommitted balance is largely related to Academy Charter School and then Shaw on-site improvements, as well as Cottonwood Elementary School and any other projects that are in progress. So we commit those dollars as, as those projects progress.

So this slide here shows the projects we're working on. And where they stand. So it's broken out, um, by project type. Um, each of the projects here that have pins next to them, I've got slides with further detail coming up. Um, so for the new construction projects, we're working on American Charter Academy and Academy Charter School.

I mean, as you guys are aware, we're no longer, uh, proceeding with Birch Tree as they've moved into Larson Elementary. Um, the remainder of these projects, uh, with exception of the natural gas seismic shutoff valve, are largely major maintenance projects. The seismic valves for the gas was a FEMA mitigation project. So we're proceeding through, you know, the building envelope work at Iditarod Elementary School, the various boiler projects that we have ongoing, elevators, generator, and then the water system at Cottonwood.

So the first project I wanted to get into detail on was American Charter Academy. So this project is nearing the finish line. Um, the photo you see on this slide here is a little bit dated. Um, the parking lot has been paved, and they've, they've completed more of the on-site improvements. Um, the contractor's mostly complete on-site.

Um, we've had two big challenges on this project that we've had to work through. Uh, the first one being the water quality, uh, on-site. So when we drilled that first well, uh, for this project, there was really high manganese in that. Um, we ended up drilling an additional well, um, which yielded the same results, actually a little bit higher. We did end up moving forward with a water cistern for this project.

We've got that change order incorporated into it, and it is expected to be delivered mid-October. And then we're working on getting the piping installed and everything set up. It's, it's an above-ground tank, so they'll be able to set it in place. The second big challenge we've had is the driveway permit with the DOT. So we've been going back and forth with them for quite some time.

We've come to agreement that we're going to install a left turn lane on Church Road for this project. So they are going to issue us a conditional approval for that driveway. We've got everything submitted and we're waiting for them to go through everything on the administrative side of things. Um, and so that'll allow us to install the driveway permit this fall so the school can open and then install the turn lane the following year. So we are working on a design for that turn lane currently.

And then working with DOT, so they have a pavement preservation project on Church Road. They've actually already have it under contract with QAP. Work with them to change order that turn lane into, um, into that project, and that will provide some cost savings for us compared to doing that as an independent project. One, we get to take advantage of the order magnitude of the project that they have and the unit pricing built into that contract, and then we also aren't burdened with items like mobilization surveilling, traffic and safety, erosion and sediment control, and those sort of items that would be involved in an individual project. So currently, the contractor's working on the pre-functional checklist items for the commissioning of the building, um, and then commissioning is expected to start in October.

They're going to phase that effort, um, starting with the systems that they can do without the water cistern installed, and then once the cistern is delivered and installed mid-October, they'll finish up the commissioning of that building. So we've got a lot of pieces coming together. Um, we're targeting, uh, turnover, um, of the building in November for the school.

Um, and then the next project I wanted to talk about was Academy Charter School. Um, so this project is transitioning from a progressive design-build to a design-build project, um, and we are currently working on getting under contract with Explore Design, who was the designer under the previous contract that carried it to 95% design level, which is where we stand right now. Um, so this slide shows the projected schedule for carrying this project forward. Um, so really we've got to focus on, uh, once we get the designer on board, finishing up the permitting process for this project. So we've got 2 major permits we're focused on: the City of Palmer building permit.

We do have the foundation permit that is issued currently, um, but once we finalize those designs, we'll get them over to the City of Palmer to get the full building permit. Um, then the other one is the DOT driveway permit for Arctic Boulevard. Uh, so Arctic Boulevard is a very sensitive corridor. DOT's recognized this. Um, they're starting a planning study to look at what they can do to improve Arctic and the Old Glen.

Um, and they've expressed some concerns about, uh, the addition of this high school on that corridor. Um, so we've met with them recently. September 1st, we sat down, met with DOT and the City of Palmer to hear their concerns and figure out, you know, what we need to do to get that permit approved. And we had a very good collaborative meeting with them. So we're going to look at probably making some changes to the site plan at the Academy School so we can wrap up the permitting there.

And then of course, going forward, moving from the design-build to the design-build model or design-bid-build model, we'll be looking to get an independent third-party estimate, um, just to validate our budget and make sure we're moving forward with things as we need to, um, progressing towards finalizing the design towards the end of this year. And then we'll be looking to bid the project after the new year, um, and start construction in the summer of 2027. And then construction will carry over into 2028, which is the completion date we have for this project now.

Uh, so moving on to Shaw Elementary School. So this is the site traffic and safety improvements. So Phase 1 of this project is substantially complete, which includes the on-site queuing and circulation improvements at the school, and then the extension of Foxtrot Avenue all the way over to Wasilla Fishhook. So we were able to finish the on-site circulation and queuing improvements before school started so the school could realize those improvements through the entire year. And then at this point, Foxtrot is open as well.

This picture is a little bit, uh, dated as well, a couple weeks. The pathway is currently paved at the school. I mean, you can see the big loop that we added around the back of the building for the queuing length, and then there's a dedicated bus loop which is kind of in the middle of the picture there. And then we improve the pickup and drop-off area as well. So these improvements are intended to eliminate some of the backups that we've seen in the past onto Wasilla Fishhook at the school.

So we're looking forward to Phase 2A and B of this project, which is the roundabout at Wasilla Fishhook Paradise and Foxtrot, and then the upgrade to the existing portion of Foxtrot and the pathway that will be added there. We have slowed down a little bit on the progress for that because we've received grant funding through the Safe Streets for All FHWA grant, which is not necessarily a bad thing because that gives us a little time to look at the project and assess how things have changed. Because originally when we did that traffic study, we anticipated that Birch Street Charter School was going to be located adjacent to Shaw. Now that those assumptions have changed, we'll make sure that that intersection treatment is appropriate moving forward before we advance the project and as we're working through the grant award.

Uh, last project I wanted to talk about, uh, was Cottonwood Elementary. Um, so this is the— this combines some deferred maintenance work, um, on the pressurization system at the school with PFAS treatment. Um, so that the, the pressurization system needs to be updated before we can install the treatment system, uh, because we don't, uh, You know, we need to make sure the pressures are regulated and we don't blow out the media and those sort of things. So, um, we've negotiated the design contract on this and we're working towards getting that contract inked so we can move forward with the work. The current schedule shows that the final design will be delivered in the November time frame.

During that time, we'll work with the designer to make sure that we get everything fit in. That mechanical room's pretty tight, so we want to make sure everything fits in there well. And then also get the appropriate treatment system in place. You know, the various different types that are available have different size footprints, different maintenance costs, those sort of things. So we'll balance that as we work through progressing this project forward and moving it into design.

So looking ahead, just to recap some of the higher— the bigger items that we have. So this fall, we'll be looking at turning over American Charter Academy closing out several of the boiler projects and the elevator modernizations. Uh, moving into the winter, we'll be looking to get Academy Charter School and Cottonwood out to bid for construction and starting the Iditarod exterior cladding replacement work. Um, and then spring-summer '27, we'll be looking at continuing construction on projects, wrapping up some of those, and then as the FY28 budget is approved, um, looking at incorporating those projects into our program and programming them out. So with that, thank you guys for your time this evening, and I'll take any questions you guys might have.

Mm-hmm. Oh, go ahead.

The Academy charter delay, can you explain that to me please? Were they not supposed to go to construction this summer?

Yep, build a project, and in working through that with the contractor who was leading that design-build, we had some challenges, um, with the, with the way things were progressing, um, and ultimately, um, ended up deciding to terminate that contract for convenience, um, along with some of the performance issues that we were challenged with. They were also unable to produce the bond, which was essentially a non-starter for moving into construction for that.

Any other questions from assembly or school board members?

Can you walk me through the cistern for American Charter?

Uh, what exactly, I guess? What's going to fill it? How big is it? Uh, so I don't have the, the size of that off the top of my head. I can definitely follow up with you on that.

Um, so we are plumbing it up to be fitted with like a skid-type treatment system, um, but that is not currently going to be included in the contract, so it's going to be filled by a vendor for the time being.

Further questions? Yes. Yeah, so, Cole, what kind of treatment system is it? I mean, what— for, for several—. There's several kinds to treat manganese for the PPAS or— yes, for the, um, the cistern at American Charter.

So we currently don't have a treatment system there, so they'll be hauling in water from a third-party vendor and until a treatment system can be designed and installed, right? Well, and that's my question is what kind of treatment system will it be when it when it's installed? Um, so there's, there's some different options out there. Um, you know, we'd have to go through a design process or issue a design-build contract on that. Um, but there's activated charcoal carbon filters, ion exchange type filters.

Um, of course you got—. Go ahead, sir. Uh, Cottonwood Elementary on the PPAS. Uh, just so in my understanding, we're still trying to figure out exactly which system is going to work best in that Uh, correct. Yeah, um, that'll be, that'll be one of the first things we tackle when we get the design contract under, under, uh, undergoing.

We'll be looking at the different treatment systems that are available and what's, what's going to fit in there, and then also the maintenance requirements associated with it, and try and fit the best system. Could you hit just a little bit on, uh, the reasoning for us moving to this for Cottonwood Elementary, just for for folks. Um, yeah, so, uh, you know, the DEC recognized that there was— did some testing and recognized that there was PFAS in the water, um, at Cottonwood Elementary School. Um, and, and so the, the borough has been, uh, deemed responsible for fixing that. So we're working on upgrading the water system there and adding the treatment at the facility.

Awesome, thank you.

Okay, I don't see anything else. Thank you, sir. The next item on our agenda is do we have a projected enrollment in identifying possible future school closures? And this was requested by the administration.

Oh no, mine says requested by administration.

So I don't know.

Okay, you, you get a promotion now here from elected official to administration, I guess. Okay. Or is that demotion? Go ahead. Just imagining that after 7 years on the assembly.

Um, I, uh, yeah, I requested this. I don't know if there's any kind of report that administration has on this that they want to give. I mean, I, I requested it because of what happened last year with the the closures and trying to make sure that we're being prudent with our dollars. So, you know, I, I'm looking at the long-term trends and we're down— even if you make projection this year, we're down 600, 500, 600, an entire elementary school from 2023. To this year, and that's at a time when the valley is growing by leaps and bounds.

And so I guess I'd like to hear what you think is the projection. If we're losing $200 million this year at a time when we're growing, I kind of like to hear, you know, what the thought is for having a process and being smart, especially about these maintenance dollars, because I look at this other list of capital projects um, and just the first 12 projects are $20 million. So, um, when we're talking about special ed and funding and we've got those trends going on, to have a good process in place so we're not potentially, for example, you know, putting a new roof on a school that we end up closing— that would be a worst-case scenario. Um, and I would love if You could also, just because it was brought up, the, the special ed, um, if we could talk about that, what's happening in that, that particular school. But first of all, just the kind of projected school enrollment and how the school district is, is handling those trends we're seeing.

You see any attempt to reverse them, or if we need to really start thinking about in 3 years we're going to be down another elementary school's worth of kids? And the commensurate funding? Go ahead, sir. Uh, thank you for the question, Assemblymember Nowers. Um, I'll take a stab at it and then I'll turn the microphone over to my Deputy Superintendent and she can answer some of the questions as well.

So to start with, the school board has an administration— we don't, we don't have any plans to close schools. Um, and then there's a big caveat coming because There are 3 things that drive that decision. One is enrollment, which you've asked questions about. One is state funding, and one is borough funding. So to put it in perspective, in 2017 we had 18,809 students, and we're projecting 18,737.

So virtually flat over that 10-year period. Our peak was in 2023 with 19,372 students. So you're right, we're down about 635 kids if we make projection this year. If we waved a magic wand and we said that every one of those 635 students was in one of our brick-and-mortar schools, and if we may have waved a magic wand and said 3,000 students who were enrolled in other statewide correspondence schools were in Matsu Central, we would have still faced a deficit of $4 or $5 million last year. So when I talk about the 3 things that are driving that decision, the largest is not actually the decline in enrollment.

The largest is the funding piece. So like, and that would be if, if we added those kids back without adding a single staff member to care for any of them, which would be impossible. We couldn't add 3,600 kids to our system and not a single staff member. So almost all of the schools that we had in 2017, save Connect Charter, were here. So we haven't been expanding our footprint.

So you see where I'm going with this? Like, it's, it's money that's driving us making these hard decisions, and it was super hard last year. And so what we're trying to do going forward is form a committee that would create a rubric, probably very similar to the one that administration created last year, that took into account things like long-term maintenance, short-term maintenance, transportation needs, capacity of other buildings around buildings, all of those things. But we do that in a, in a more public process without the name of any school on it. So we would produce a rubric.

So if those three things interact— if the funding from our two main sources and enrollment interact in the future where we have to make that decision, we could go to this document that was created without the name of a school and say, okay, here's the criteria that we would use to recommend to the school board which schools we would have to consolidate. And now I'll end where I started: we have no plans to close schools. I certainly don't want to try to live through that again. I hope it doesn't come to that. And then I know that Deputy Superintendent Gardner had some more answers to some of the questions you asked.

Um, well, I, I'll just add a couple of components maybe on the technical side of it. So we're looking at enrollment all the time. Uh, I wish enrollment followed a specific trend, and I wish that we could map it, uh, and have a crystal ball to understand exactly what is going to happen. We have seen a couple of, uh, I won't call changes necessarily, but as we've been monitoring enrollment this year, our neighborhood school enrollment is coming in as projected. It's strong, um, and so the students that we anticipated in those neighborhood schools are arriving in those neighborhood schools.

Uh, we're seeing that some of our choice programs are a little under what we predicted, and we're also seeing, um, uh, the age of our student change a little bit. We've got fewer younger students than we have had in the past. We talked about this at the board meeting a little bit last Wednesday, and I think Dr. Traini described it accurately. It almost looks like the— by grade enrollment numbers are inverse of what they were a few years ago. We were seeing large numbers in kindergarten, first, and second.

And so we are keeping an eye on that. We are going to be monitoring that. Obviously, that is a trend that will take time. And as we look at what our resources are, are going toward, and we're looking at our major maintenance lists, I think that's something that the committee will have to keep in mind as we allocate resources, but also recognize that some of our major projects are, are projects that need to happen, uh, almost whether that school is fully occupied by students or going to be used for another purpose, because they're things like roof replacements where, you know, we've got water that's leaking that We don't want that building to fall into disrepair, whether it's one that the school district continues to operate or somebody else has some responsibility for that borough asset. I mean, that's really what those focuses are.

So the early age numbers are something that's interesting. They also follow the live birth rate from 5 years ago where we're seeing fewer students born in the state of Alaska. So we do take that into consideration when we do our projection. Our projection for kindergarten was the lowest kindergarten projection we've had, I think, probably since COVID So that's somewhat predictable, but where— what choices individuals are accessing within our system, whether it's correspondence or hybrid or a neighborhood school or another district choice option, that's what can be more of a challenge to understand what families are, are seeing value in. And we're seeing those change with more volatility maybe than just the grade level numbers in aggregate.

But we're certainly monitoring it and we'll be working with the committee to identify a methodology to look at that into the future so that the closures are not a surprise.

Assemblyperson Hours, follow-up. So, um, thank you. And I did watch the work session that the school district school board had the other day and there was some really good discussion there about your, your funding. Do you have a projection for the next 3 years?

Go ahead. Um, through the mayor, um, we, uh, yes, preliminarily. It is not a projection that we have had the board approve or presented to the board. Our next year's projection to the state of Alaska On— in early November. So in early November, we will formalize and submit to the state of Alaska our projection for fiscal year '28.

We do take our current data and we use our 2-year cohort survival to project out for 3 years into the future. It's just that is a model that has more assumptions, less real-time data, so it's not quite as accurate. But yes, we do we do develop those as part of the long-term forecast. So, um, I guess I just don't hear anything that makes that sound like that trend is going to reverse. If we're declining at a time when we've been growing the fastest in the state and people are choosing to send their kids out of the district completely, um, they're just not even showing up in these numbers, and the birth rate, or what you're seeing in the kindergarten, the young class is going down.

Um, and so sort of back to the drivers of your budget, the borough, the state, and enrollment. Um, the borough has been very consistent in the last 7 years of funding about a 3%— my time on the assembly, about a 3% increase a year. And we did that again. Um, so I think the borough has been— we've tried to be very predictable in terms of your funding, and, um, the state whipsaws you. Um, and in my time, you also had COVID funding and some additional funding.

So I know that is sort of crazy-making, but there's not a lot that can— you can't control that. Um, and so the other thing is enrollment, and that is something that is in your control. And when I look at those numbers and you have 3,000 to 4,000 kids going outside the district, that's, I guess, just rough estimate, like $20 million plus. That is dollars not coming to this district to help pay for all those things. And so I guess I struggle a little bit with the, the— I, I just don't quite understand how we didn't have a handle on our budget so much that this school district did not tell us when we were pushing bonds for 2, 3 new schools, hey, we're so bad this year, we're looking so bad, we're going to close schools.

Like, I don't know, I guess I'm trying to get to what didn't you have in place then that you will have in place now so your— one of your primary funders has a heads up that we might have to close schools. Like, it's always going to be crazy, the budget is going to be crazy because of the state thing, but, um, I don't, I don't understand what wasn't in place that we are going to have in place so that we're making smart decisions with the dollars that we do have.

Comments? I'd say that one— so your question, there was an intriguing question about what— when we were going out for those bonds, right, for the schools, like when that initial conversation came up, our enrollment was at the peak, I think, and had been going up, right, like 2024, 19,372.

Um, so we were on a, we were on a trend from 2021, the low during COVID of about a little less than 18,000, up 1,300 kids. Um, and I know that— I don't know if you have this in front of you, but I know you saw it the other day. I'm looking at different— no, a decline since then. So yeah, I feel like that was— and you have pretty good projections, it seems like you do pretty good from year to year. Yeah, did I say 2023?

So when we were going out for loans, yeah, yeah.

Um, as a percentage though, right, like 600 kids. Um, what we know from last year is that the fastest growing correspondence school in the state, uh, as a percentage was Matsu Central. What we can tell by looking at the other big 5 is that, um, we are losing kids to those other homeschools slower than anybody else because we have a really robust homeschool ourselves. And the hybrid program this year is like ridiculously successful. Last year we had about 12— we, we thought we'd get 400 courses, we had 1,200.

This year, as of this morning, we're over 3,000. Um, so those are individual kids in a course, not 3,000 kids, but 3,000 courses. Um, so we are not— we're, we're— I'm going to be super interested to see what has happened with the data in our— in those other correspondence schools, but we won't get it until after the count period, probably December-ish maybe, and we'll see if we sustained that that one data point last year of where we didn't lose dramatically to those other schools. In fact, the data that we had from last year, we'd actually had more kids back from Raven than we lost to Raven at that point in time. Idea— we had still gone backwards, but it wasn't nearly as dramatic as— like, that loss wouldn't explain this.

Like, it doesn't explain the loss of 600 kids.

Assemblyperson Bowles. Thank you, Madam Mayor. So we asked about the healthcare plans, the projected cost. Um, looks like, um, the district's moving towards high deductible health plans. Um, and I'm curious, it looks like it's projected to lower the overall cost by $6 to $10 million, um, by '27.

Um, are employees, school district employees allowed to opt out? And if— or at least veterans, are they allowed to opt out? Because I know for myself, um, veterans have health care, some TRICARE, uh, CHAMP, you know, VA, um, there's other options as well for those that may want to go different routes as far as, um, health care plans. And I have a part 2 of that question, I think. Um, so through the mayor to, uh, Assemblymember Rauls, I'm, I'm not sure about the projected $6 to $10 million savings.

So I'm not, I'm not sure where that number is coming from. That's not what we're predicting for the upcoming fiscal year. We've got a number of slides to talk about health insurance as one of the agenda items. But to your specific question, yes, we do allow individuals to waive health coverage. Whether that's VA coverage, they have coverage through a spouse's employer, or they have tribal health coverage.

Any of those options are available. Employees can opt out. Okay, I appreciate that. I'm looking at the last— oh, 2 pages or so, 3, last 3 pages. It's got the MIMIC plans and then the high deductible health plans.

And so the reason— so I have a little experience with that. They are not favorable for employees. They cost more to the employee, they drive employees away from receiving healthcare, you know, other what could be perceived as more expensive healthcare. And in the long run, you know, those that pay out of pocket, and which is oftentimes lower than the deductible itself when they have a high-cost health insurance plan, So I just think that that's important to think about. These high deductible health plans are not favorable for employees.

So maybe if I just may offer a couple pieces of additional information. The term high deductible health plan can mean a lot, right? And we use the term high deductible health plan because it is an HSA qualifying high deductible health plan. So you can have a deductible that's— I think the current regulations are $1,650 for an individual and you can have a deductible that's, you know, $10,000, right? Those are both high deductible health plans.

The variance in what those plans offer is pretty significant. We're at the IRS minimum for our high deductible health plan, and we also offer an HSA contribution as part of individuals going into that high deductible health plan. So we've done a lot to communicate that it's not about avoiding care, In fact, preventative care is still covered at 100%, uh, and can still continue to be covered at 100%. So we encourage individuals to take advantage of that, um, but we do have that HSA option to help with the, uh, out-of-pocket that might be different from individuals who are transitioning from a standard PPO plan that's had a historically lower deductible.

I would just like to remind the assembly and the school board that we are on Item B, which which is projected school enrollment. There is a section for the healthcare update, so if we could have questions regarding healthcare at that time on the agenda, I would appreciate it. Thank you. Assemblyperson Farnock, you have a question? I had a question.

Yeah, that was it. Um, you said we'll know, or we already have the— what's the date cutoff for the enrollment for our district, but then like for the other district, including the Galena and the idea of a couple of those ones. When is— I didn't understand it all the way. Is there a certain date by when they will publish it so we could kind of analyze those numbers as well? Yeah, so there's a, there's a time period each year called the count period.

This year it starts, I think, on September 28th and goes roughly to the end of the third week in October. At that point, all of the districts have to supply their count numbers to DEED, and then there is no standard timeline that I know of of when DEED would release those numbers statewide. It has in the past, it has been December, January, um, sometimes, you know, back in COVID it took forever to get them. So it's— there's no set date. Recently it's been like midwinter when we've got to see all the results of where everybody ended up in the state.

They go through a process where they check to make sure that districts aren't claiming the same student. It happens more often than you think, so it takes them a while to clean the data up and decide who's going to get funded for which student, and then, and then they release the data statewide. But like, eventually by the end of the year, school year, or whatever, there is—. Everybody should, yep, release it and we'd be able to— hopefully we'll know midwinter if it's, if it's been like it has been recently. Okay, thank you.

Okay, we have somebody. Is that an assembly person or a school board member that's online? Okay, go ahead. Who's online, please?

Member Cruz from the school board. I just wanted to give some context that might help with, um, member Nauj's questions. Um, when you look at the live birth rates starting in 2020 through 2024, because 2025 is not published yet, um, we see a 6% decline in the births, live births by resident. There's a much steeper decline starting in 2022 to 2023 and 2024. Actually, in 2024, we had fewer than 9,000 live births in the state, which is the first time since 1978, I believe.

So we have a— we're going to have a downward trend of kindergartners regardless of what school choice they choose in the next coming years, year after year, because every year there was a decline.

So I think that might help give some context for that. One of the comments I made that we might be able to clarify— comments I heard, I'm sorry— was that there were fewer students showing up for our choice programs than expected. And I think if I didn't— wasn't familiar with the numbers, what I would hear is that fewer kids come for charters and, and homeschool programs than our correspondence programs. Than we normally do, and that, that I would like— maybe our administration could clarify that because our hybrid program and our correspondence programs have actually almost doubled since 2018 in size, number of students. And our charters have long waitlists and they're, they're actually opening up seats.

So their enrollment is increasing. Um, maybe Dr. Trainor, could give some context to actually those programs are growing rapidly. It's maybe not as fast as we expected with the 3,000 to 4,000 homeschooling students that are either free schooling or schooling in another program that live in the Massu Borough.

Thank you. Yeah, just to provide some context, and I don't have the exact numbers in front of me, so these will be Broad brushstrokes, our charter schools, they, you know, they make an estimate of how many students they're going to receive. They're more than that this year, like maybe a couple dozen, 30 or 40 more between all of them. And so that's not what we're calling our choice programs. Our correspondence school, largest correspondence school, Matsu Central, is going to make their projection.

I already mentioned that the hybrid portion of it has already exceeded the projection. And remember, for hybrid students, we get, um, the in-person funding and they flow through the formula. So that's really super important for us right now. Choice programs that we're seeing a decrease in are primarily Burchell and Valley Pathways. We did look at those today and they're maybe— I can't remember what our projection was.

They're still below projection. We're going to be interested to see if they can make it If you've watched, you know, when you watch a school board meeting, we put up the graphs by different programs. We're almost spot on, really. Like, I know if we're down 200 or 300 kids, that's a lot of money, but like, as a percentage accuracy, we're pretty accurate. It's just been this trend of slowly going down over the last 3 years.

Assemblyperson Auer's follow-up. Yeah, I think, uh, thank you, School District Member Cruz. Um, yeah, that just kind of underscores the point. And again, if you're declining at a time when you're the fastest growing place in the borough, you've— like, I think I heard a number like $100,000 per teacher. So if you have an extra million, that's 10 teachers.

Um, and I just wondered if you could speak to, you know, this is important discussion because of where we go from Hickenmoorer Schools, which, and the options. So this is where I'm, I'm coming from, is trying to figure out, um, that we have enough, because I hear things like what the person testifying said, and it sounds like we're, we're really short on for some of the students that are in the district. Um, and so, um, and lastly, I'll just say, when we talk about the borough being a source of funding, the borough is about one-third of the school budget. So we are like a minor part of your budget, and you are a major part of our budget. So When we talk about that, I mean, you're 50-ish of the borough budget that comes from taxpayers.

So when we're trying to solve this problem, saying this, you know, that the borough is the one who's going to make it up on taxpayers— if we want to raise an additional $16 million, it's $400 on everybody's taxes out here on an average home. So I just know that discussion has gone on a lot at the school board, and it's been a big part of the past 7 years. But could you— I think we'll, you know, we can move on, but could you talk about the special ed situation? What's going on with those paraprofessionals? Are we kind of drawing— like, are we short people?

Are we, you know, kids are— we're having people, new kid, new people with kids every day that really need some consistency? Um, I, I mean, I can speak to our process generally across the district. So, um, uh, annually we have natural attrition, and so schools are working right now. We see a really strong uptick of individuals interested in positions, uh, really over these next 2 weeks once the fair ends and once, uh, tourism ends and also hunting season ends. Our applicant pool increases for uh, special education assistants, school monitors, those kinds of positions pretty dramatically.

So we do have a number of vacancies that exist right now. We have substitutes that are supporting those vacancies, and we also have a process every year where we monitor where students are enrolling. So special education students, uh, have high transiency. Really across the district, our transiency rate is pretty high, but we see it with special education students. And so we have additional positions that administrators request that we monitor through the course of the fall based on where students enroll and where they show up.

And we're going through that analysis and we're going through that process right now. So schools are given the flexibility to have surge support with substitutes and with their staff while we work, one, to fill vacancies, and second, to analyze if additional positions are warranted based on a classroom's unique situation or a student's unique situation to, to see what level of Okay, some—. Member Larson. Thank you, Mayor. Is there any— uh, since we're talking about enrollment, uh, you said Raven and IDEA will come out also.

Is there any way we can find out enrollment up to private schools in the valley, um, since they're not in any kind of You know, state count. Yeah, that was one of the hypotheses for trying to look at. Is there another explanation for the reduction in our younger age students, the Ks, 1s, and 2s? Um, we've seen— we, you know, we've just seen a decline recently. So we've reached out to the 4 largest private schools in the valley.

I've heard back from one so far. We just did it last Friday, so It's only been one day. I already heard back from one, and they reported that they have about half as many K-1s as they used to. It's one of the smaller of the four that we reached out to, so that's certainly, you know, um, you know, there is it King's Christian, is that the, the new large one? They're adding a bunch of kids, so I, I'm really interested to hear if they have a lot of kindergartners this year.

And then like Member Fonoff asked. I'm also really super interested when we finally get that stuff from the other statewide homeschools to see if more students have— more young students have gone to those other programs. I just don't know. And one follow-up question, uh, since we're talking enrollment and special needs and special ed students, how are they spread out throughout, uh, through, uh, the education system, including RAVEN, IDEA, and charter schools and so forth. So I, I, again, I don't have any firm numbers for the, for the other statewide correspondence schools.

Generally speaking, so huge, huge, you know, pull the camera way back 100,000 feet, there are generally fewer special education students in statewide correspondence schools than in the districts where those students come from. And so we see that in our own, in our own statistics. Um, it's about, uh, 11% of our students in Matsu Central have an IEP. Um, and in our charter schools, it's about 7%. And this is based off last year's data, and I'm doing it from my head, so it's going to be close to those numbers.

Um, and what that does is, is the remaining special ed students end up concentrated in our brick-and-mortar neighborhood schools. And that's going to be closer to like 22%. So we end up with pockets where we have lots of needs and pockets where we don't.

So are we concluded with this subject? Assemblyperson Ahlers, do you—. I know you were 500 down at one point from your projection, and then you had made up like 200. Do you know what your latest number— I know September 28th is the final date, but do you have the latest numbers for what your enrollment's sitting at for this year? Yeah, it's September 28th is the start date, and then it goes through the third week of October.

Um, I don't know what we're down, I haven't looked at it. About 411, I'm told. We, similarly to staffing for the some of those positions, we do generally see an uptick, especially in correspondence, after the fair.

Member Larson, do you have further comment? Or turn your mic off, please. Is that your mic that's on? I apologize. I have one.

Thank you. If I could speak. Sure. And you do bring out some, uh, some good questions about, um, you know, what are we looking like from here? Because as you said, the borough this is a large portion of your guys's budget and it's a small portion on ours, you know, and the state can really throw us for a snafu.

I do know that one thing I, I guess I wanted to mention is, you know, we've talked about this over the years, is that we are a big, very pro-school choice, and school choice can have costs. We've seen that. We've also seen improvements from that. If, um, I know that there's going to be some reports from the superintendent on where we're ranking at and how our schools are improving, and I think that a portion of that does come from us promoting that choice. If I do recall correctly, and I'm Somebody can correct me on this here, I'm sure, but I believe that, uh, the 3 schools that were bonded for were charter schools, which is part of that choice program, which we also have complete full, almost overflowing enrollment.

And, and then I, I want to say those, those things kind of things were voted on when we were more at like maybe an even trend or not so much on a downward trend. And then I guess the correction to that is now we have Birch Tree going into, or has gone into, Larson. So I can understand your frustration, but maybe give some clarity as to the causes.

So, I guess we will move on to the next item then. Item C. Um, so we have a fiscal year '27 budget update, and now it is the administration. Again, my apologies, Assemblyperson Nowers, for jumping you. Can you put it up?

So we have a presentation that Deputy Superintendent Gardner and I will kind of take turns as we go through it. Um, I, you know, I like to start off meetings in the borough, we start off with good things. And so I am going to highlight some of the good academic things because that's what the— that's the whole point of the budget discussion. Um, so it's like, uh, are we getting our money's worth is I guess how I would phrase this. And let's hope this presentation works.

All right, here we go. Um, so most of these slides I've already shown the school board, and they're, you know, they're brief versions of what I showed the school board in the past. The U.S. News annually percent— they don't rank the bottom 25% because I probably won't— no one in the world wants to be the worst school in the country, I would imagine. Um, it's a really complicated measure. It takes into account graduation rates, state test scores, college preparation.

How different subpopulations go, and it's an outside entity. That's why I like it so much, and we've been tracking it for the last few years. I can't actually read my presentation, so I got to do this all from memory. I'm too, too far away. Um, so the, the middle, the left column are our major high schools.

Um, it's not every school that would be listed as a high school, like Matsue Day School Is that a high school or not? It has a few, like a very small handful of high school age students, but these are our large high schools and the middle column shows where they are ranked amongst, um, among all of the ranked schools in the country. So although I can't read it from here, I think that, uh, you know, Career Tech is up there in the 90, 90-something percentile. Meaning that Career Tech scored higher on this really, um, this really intensive rubric. Thank you.

Now I got in front of me 96% of all the students of all the other schools, and if you take all the schools in the country, it's 97%. So this is— this shows that on the national stage, Matsu kids are doing well when they leave our area. I really like this graph. It reads backwards from the way you would think it is. Normally you assume tall bars are better.

In this graph, short bars are better because this is where each school ranks in the state of Alaska. So look at Career Tech. 5 Years ago it was the number 1 school in the state, and then 4 years ago it was number 1, and then it was number 2 for 2 years in a row. Both years Cordova, my alma mater, beat it out. And this year it's number 1 again.

So Career Tech is a really great school and has been for a long time. But look at the trend on our other major high schools. Colony was 22nd, and now they're 8th in the state. Wasilla was 37th, and now they're 14th in the state. Houston, 58th, now 33rd.

They were tied with Reddington, who was also 58th, and now 20th in the state. So it's not just one school where we see this growth, and it's not just one major. It's across all schools.

And it's not just that, it's not just this outside entity. We just got our AKSTAR results released. Um, we heard that from Mr. Smolden. And what you can see in each of these colored graphs is that science is green and it's been on a steady uptick for 5 years, and, uh, math is yellow, also dramatic increase actually. And ELA, blue, dramatic.

So we have improved greatly on the AKSTAR test, and it's one of the most difficult state tests in the country when we compare it to our other large peers. So think Kenai, Fairbanks, Anchorage. How is the Mat-Su Borough School District doing? Um, so our English average is 41.5, and our peer schools 36.5. So we're, we're ahead by 5 percentage points there.

Mathematics, uh, 42 compared to 35.7 for the other large districts, and science, 51 compared to 42. So we're leading not only the state but also our large comparator districts.

Um, the, the top 3 lines, the green, the orange, and the blue, are the same lines that you saw before, but they're superimposed against the state average. So you can see the dashed green to down over the last 5 years. And the other 2 dashed lines are ELA and math. So we're outcompeting the rest of the state, and we're outcompeting the large comparator districts on the state test.

Um, a couple more things, good things that I wanted to highlight. Um, as you know, that in the last 2 years we moved away— we, we put a ban on cell phones in all of our secondary schools, and that's part of a Purposeful screen time reduction. We're also engaged in that process, although most little kids don't have cell phones to worry about, about purposefully reducing our screen time that we require in elementary schools. Each elementary school is following kind of those 4, 4 steps over there on the right. They're working with their individual communities, so I can give you some, like, concrete examples of what this looks like already.

When kids are eating lunch in their room, There's no screens. That didn't used to be the case. There'd be movies going, um, so like we've eliminated those. There's no playing games. There's, there's no screens.

And each school is working on what that looks like in their setting. So I think that's another good thing we wanted to highlight. And then, because I anticipated this question but I haven't heard it yet, I'll just go for it anyhow. We wanted to give a transportation update. Um, we did hear from, you know, a member of the audience.

I thought I might hear a question from you all. Um, so we're in— we've had 18 days of school operation. There's 138 buses scheduled every day. Over that time period, we've had 73 cancellations, so that's 2.9% of all the routes have been canceled.

Um, every single route cancellation is Not what we want, and it's not what we expect. I wish that we could fill our substitute problems at a 97% rate. On a typical day, we're lucky to have 80% filled, and all of these callouts are from two problems: drivers not reporting to work. Um, we heard some statistics from a member of the audience that were spot on, like there was 17 routes canceled. Last Friday, the Friday before a long weekend.

Um, and that's, that's the first step in the problem. The second problem is Durham does not have enough drivers to cover that many callouts in a day.

Um, next slide about transportation. So we are putting all the pressure we can by the contract on Durham. We cannot work with the drivers directly. We work directly with the contract the contractor, which in this case is Durham School Services. They have added drivers from the beginning of the year to now.

Um, there is an additional 7 more drivers in training as of this morning, and there's 6 more drivers returning, and there's also an additional 9 temporary drivers. We put that kind of pressure on them.

Uh, the, the, the biggest tool that we can use is that we are enforcing every liquidated damage that we can in the contract. If it says that we can, if it says that we can fine you for, for not running a route, we're fining you for not running a route. We're— there's no grace period with Durham this year. We made them aware that that was going to be the case. So that's, that's our biggest stick.

They are trying to offer carrots to get more people in their pipeline, and those are the things on the right. They have bonuses for both hiring and attendance bonuses. There's the 9 additional drivers who are being added this week, and recruiting is increased and will continue until the driver pool is sufficient to cover district needs. And until all the routes are run, we are going to continue to levy the fines.

That's all I had before the budget part. I'm going to turn it over to you.

Thank you. Good evening, Madam Mayor, members of the board, and the assembly. We wanted to make sure that we provided an update on the status of the district's budget, as the board is responsible for adopting a budget for the current fiscal year before certain details are confirmed and finalized. So we wanted to talk a little bit about the board's priorities during that— those final budget decisions, as well as what has changed since June 3rd. Um, I wanted to mention a couple of important caveats with this.

Uh, the board's approval on June 3rd, uh, was about a month before the final state funding amount was, uh, transmitted to us. And even then, we had additional uncertainty regarding additional funding that was made available, um, until just recently. And I'll get into those numbers and talk about that process, but I wanted to be clear that the budget that the board adopted in June assumed the one-time funds of a roughly $18 million came through. So there's been some questions and some articles about the additional funding that the Revenue Commissioner has confirmed. The board already assumed those resources were coming through when the budget adoption, so that's not new revenue to the school district after the budget was adopted.

And while that additional revenue came through, it was, it was one-time revenue that we were very clearly told we would not know about until August 31st. And so the board continued to approve an adopted budget that had over $14 million in reductions. And I just want to make sure, kind of as a precursor, that some of those reductions don't get lost in the conversation when we talk about additional revenue that came through.

Uh, and then just really sort of the footnote there that I don't want to get lost as a footnote that the board's top priority through the budget process was to maintain classroom teaching positions and maintain class size.

So first, as we talk about those things that were part of the budget plan and that were in the final adoption and are still true today when we look at the implemented budget, is we had 3 consolidated schools which had a budgetary savings of about $3.8 million. Those schools were consolidated, they were closed. We don't have students attending for Meadowlakes Elementary, Larson Elementary, Glacier View School. Now Larson Elementary has been repurposed, but those consolidations did happen. We also had over $6 million of school staff reductions.

That was administrative positions, instructional coaches, secondary librarians, dollars in nurses into a grant provided by Matsu Health Foundation on a 1-year basis. So additional revenue did not restore any of these reductions. These are reductions that are implemented today. And then the final sort of category, which I recognize is a broad catch-all, is about $3.8 million of, uh, discretionary dollars, district-managed contracts that were reduced, and, uh, district staff reductions that occurred. So in total, just over $14 million of reductions exist in the FY27 budget above fiscal year 26.

And then next, we wanted time to really talk about the nature of the revenue that has— that was approved. House Bill 263 included 2 revenue sources for the school district. There was $2 million in energy relief. That $2 million was pretty certain as part of the bill, assuming there was no gubernatorial veto. So that $2 million was not tied to any calculation of a surplus.

So that $2 million again was assumed as part of the budget adoption, but was outlined specifically in the regulation and was calculated based on the district's total energy costs over the preceding 3 years. The state took all of the energy costs for the state of Alaska. They had a line item for energy relief and they spread that energy relief money across districts based on the proportion of total expenditures that occurred. So It wasn't a per-student basis. It was about how much the district spent in energy.

And when I say energy, uh, I mean electricity and heating fuel. So for us, that's primarily natural gas. We do have some schools that have heating oil. The second was really the, the more volatile number, and that was about $16 million in one-time funding that was allocated on a per-student basis. That again required the Revenue Commissioner confirm a level of surplus in the state budget that could afford all of the waterfall payments that the law envisioned.

So the first priority were the $200— I think it was $200 energy relief payments that were provided as part of the PFD allocation. Second priority was $115 million to schools across the state in one-time funding, and the Third priority escapes me because it had nothing to do with schools. And the Revenue Commissioner had until August 31st to make that determination. School districts across Alaska requested information about, do you think this is going to happen? Are there any predictions?

And were told pretty clearly that there would be no estimate that would be forthcoming until August 31st. Fortunately, the, On August 31st, the Revenue Commissioner did confirm that there was sufficient— there was a sufficient state surplus to afford all 3 of those priorities.

And so as part of the budget adoption, the board was facing a reality of one-time funding that is one-time only, one year in nature as of right now, and also may not happen. So rather than take that one-time funding and restore cuts that had already been made, the focus of that one-time money was to really address high needs that were coming late in the process and one-time expenditures. So that $18 million went to mostly one-time areas. A few exceptions. Because that funding is coming as a— on a per-student basis, there's a portion of that that goes to charter schools.

And they have discretion how those dollars were spent. I think that was about $1.5 million, um, and then we had a couple of, um, late items to incorporate into the budget that were— we were holding off on having additional cuts, and that was the health insurance premium increase and then maintaining student activity reductions, which was a relatively small amount in the scope of the whole budget. Other one-time priorities that the board set was to set aside funding to set up a self-insurance reserve for health insurance, self-insurance. We set aside funding to support school district construction and minor maintenance and refreshment projects. We had some discretionary budgets that preliminarily had been reduced until we had a better idea of revenue.

Those restorations were made on a one-time basis, and then the board stopped a reliance on fund balance for the current year as a stopgap to see what happened with one-time revenue.

However, our, our budget is never done.

So we've had a few changes or impacts that I wanted to make everyone on the assembly aware of as we are monitoring what's happening this fall. Um, at the close of the fiscal year, we did a complete fund reconciliation, and there's an additional $1.2 million in fund balance in pupil transportation that is directly resulting from last year's liquidated damages and the school bus strike. Uh, that money will be available to support the planned subsidy for the current year. Um, even with this subsidy, uh, our budget still has expenditures in pupil transportation exceeding state revenue for pupil transportation. Uh, in addition, there's about $1.3 million available as a result of the passage of House Bill 28, which happened, uh, on the very final days of the session.

It was, uh, passed into law without signature and included two impacts to the district. The first is a cap on the state's clawback of the increase in the minimum required local, and that'll be capped at about 4%. The assessment calculation still goes forward, but what the state pulls back from the district is capped at a 4% increase year over year. Um, what we're not sure is what that really looks like in the out years, especially if we reach a time where that minimum required local does not go stop by 4%. Does that mean the state is going to start catch-up provisions at that 4% level?

Um, but that is now in law. Uh, and then subject to appropriation, the state now has a program for full energy reimbursement beginning in fiscal year '28. Um, so school districts are required to report on an annual basis energy expenditures. The state will be evaluating those energy expenditures, um, and the House bill, um, envisions reimbursement for those energy expenditures. Again, it's very clearly outlined that it's subject to appropriation, so that again will be an annual budgetary decision and likely a, a line item amount, uh, for us roughly, uh, between, um heating fuel and our utility costs are about $8 million a year.

So that's the, the high end of what that could be. Again, it'll be looking at a 3-year average over a look-back period. Again, the other thing that's happened since the budget was adopted was the approval from the Revenue Commissioner on the supplemental contingent appropriations. That doesn't have an impact on the adopted budget because the board assumed it. And then enrollment right now, as we discussed, is trailing about 411 students.

There, there's quite a bit that happens between now and the count period, but that would be a reduction in planned revenue of a little over $4 million if that 411 is not made up between now and the end of the count.

Okay, comments?

Questions? Member Larson, go ahead.

Can you dive a little bit deeper into the passage of HB 28 limits impact on increase to RLC?

Um, sure, I'll do my best. So House Bill 28 actually started as a bill to support a loan debt repayment program for teachers. And, uh, by the time the session concluded, there was quite a bit that was included in that final legislation. One of the last amendments that was included was an amendment that limits the increase to the required local contribution. Now, I want to be clear, the calculation for what the minimum amount is in the law has not changed.

It is still based on the total assessed values for the municipality. So for us, for the borough, but what is changed is the language that outlines that there is a reduction of our basic need calculation by the minimum required local, and that is capped at an increase of 4%. So regardless of the amount that the borough decides to fund, that minimum is what's reduced from the calculation at the state level to determine our state aid. And so what the state has said over a period of years is, if the minimum required local goes up by 6%, then the amount that the state takes back goes up by 6%. What this new regulation says is that if the amount that the minimum required goes up by is 6%, the maximum amount that the state can take back as part of that state entitlement calculation is 4%.

What we don't have clarity on in the out years is what happens when we've had multiple years where that cap has triggered and there might be years in the future where those assessed values don't go up by that much. Are we in a rolling 4% cycle, or is it really going to be a year-over-year calculation?

Assemblyperson Noworz, go ahead. Yeah, thank you, Madam Mayor. Um, on the state calculation formula, is there— has anybody ever looked at calculating it like they calculate the permanent fund? So you do a 5-year rolling average looking back a year, so you know You know, going into your budget cycle what your penalty—. You know, I don't know that the conversation this round included the calculation of that on a look-back period.

What had some attention this cycle was establishing funding for schools based on a 3- to 5-year look-back of enrollment so that these adjustments in enrollment were sort of softened. I don't know that anyone's looked at it for the RLC specifically, but that predictability I think would be helpful. And then I might— could I add one thing to it? It does— the— it is going to provide us with some predictability more than what we had. And you use the word whipsaw from the state because, you know, depending on how the assessed value went up, and we know this better than most municipalities.

If it went up a lot, they would take a lot, like, without regard to what happens on, you know, the municipality side. So at least we know there's a cap right now of the most that they will take away. And that's— I did napkin math— it's going to be a little over $2 million is the most that the state would reduce this by year over year, with the caveat of we don't know what would happen if there was a year where it was less than 4%. I think the only other reminder—. The only other reminder I'll mention about the RLC and where it's a little out of balance with what happens in reality is that is calculated based on the full assessed values within the borough, does not take into consideration, uh, either state-required exemptions or even additional exemptions that, you know, the municipal body might put into place.

But even those state requirements, it's just, it's not connected with really your tax base necessarily. And we've tried to have some conversations with legislators about that in the past, but this is kind of the, I guess, compromise they settled on for the time being.

Yeah, I was just going to see if there's anybody else. Okay, we'll go ahead then. Assemblyperson Auer. So, um, there were a lot of numbers there, and I, I won't admit that I can understand your budget, the over-unders and the estimates and the— and then the reality. Um, but I look at this— if you can go back to that page that says adopted budget with the $18 million.

So I look at that, and I guess I see that you made $14 million in cuts, and then you basically spent all the additional funding that came through from the state that you may not get next year. Like, they gave you additional funding because oil prices were high, so you're really looking at, like, if you're, if you're just staying flat budgeting based on that, you're at least $18, $20 million in the hole coming into next year that you don't know where the funding is coming from.

Um, I, I think the careful decision that the board made in spending those $18 million is they spent it in areas— not, not the full $18 million, but a lot of that $18 million they spent on non-recurring areas. So it, you know, for example, we, we set aside $2.5 million as a starting point for our self-funded reserve for health insurance. That's not $2.5 million that necessarily would be required on an annual basis, so that would come off of that $18 million when we look at the future. There were other one-time expenditures, uh, replacement of fund balance, um, the, uh, uh, construction and maintenance set-asides, the subsidies for transportation and food service in an $18 million hole, uh, without additional revenue, because many of those expenditures are not required to recur, which is really the important part. If, if the board would have taken that $18 million and restored those $14 million in cuts, then you're absolutely right, we would be starting off in a bigger hole.

So how much do you have stockpiled for a cushion for next year, not knowing that I mean, if I was the school district, I wouldn't count on the state raising your formulas at all. Like, I would start with that as your budget. How much do you— were you able to— do you have in fund balance to help with some of the increase your costs you're going to face just to keep things where they are? And knowing— sorry— that your enrollment may drop as well. Through the mayor, I— so I mean, like the borough, we're going through our audit right now.

Um, and so I don't have our fund balance figure for fiscal year 2026 yet. Uh, I do anticipate that it grew from where it was in 2025. 2025, I think our unassigned district fund balance was about $8 million, so not very high for a $285 million budget. Uh, but it did, it did grow. Um, you may remember that we implemented pretty strict hiring and spending freezes starting in February as part of the budget process when we were facing the $22 million deficit.

So, so that did recover some one-time savings over the course of that spring. We should have that final number in about a month when the audit's concluded.

Any other questions from school board or assembly?

Member, Madam Mayor, could I request a 5-minute addendum?

Break. 5-Minute break. Okay, well, let's see, are we done with the budget? Let's see, we are done with the. Budget.

We have health insurance next. Okay, all right. So yeah, so will you take a break until 8?

Brought copies of the final details. I have enough to go. I should post it out. But thank you. Thank you.

Back to seats, please.

So I'm going to go ahead and call the meeting back to order. We are in Item D, um, the healthcare update, and Do we have a report? I think we, we do. Um, and Assemblyperson Bowles, when they're done with the report, I will recognize you to restate what some of your concerns were, or something if you prefer.

Thank you, Madam Mayor. Um, so, uh, health insurance is something that, uh, the school district has spent, uh, a lot of time evaluating It is a large cost driver. It is the most expensive contract that we have. Uh, the entity that we pay the most money to is our health insurance provider. Um, so it is something that we, uh, have discussed at length with the board and have had a plan to—.

Oh, okay. Can I have you guys change the overhead, please? There we go. Sorry. Thank you.

Thanks. Um, so, uh, but part of the reason why it is, uh, I think an appropriate topic for the joint meeting is because it presents a joint opportunity for both bodies. And so the, the district administration and the borough administration have had conversations about, uh, health, and, and I, I wouldn't say mutual savings, because I think for health insurance you're never in a situation where you're trying to save money, but you're trying to avoid increases into the future. And so if I misspeak and I say savings, what we're really talking about is, is managing costs moving forward. And so a couple of key milestones.

We've talked a lot about our history with health insurance and This has really been a conversation that I think started well over a decade ago as the school district and the school board had some dissatisfaction with our current provider and the lack of information and analysis that we had access to in a scenario when we were at that point in time paying between $20 and $30 million. And so in 2022— yeah, sorry, thanks, Mike.

We, uh, really took our first leap in changing providers from the Public Education Health Trust, uh, to Premera, and administrators transitioned to high deductible only coverage at that point in time. Through collective bargaining, we transitioned in 2024 our teachers association, and then in 2025 midway through the year we had CEA transition. And this next step for us is not a new concept. It's not a concept that comes out of nowhere, but it's a concept that we've been working toward and see value in, and that is a transition to a self-funded arrangement. And I'll talk a little about kind of why this timeline when we get to it, but wanted to provide some data regarding the costs and what's been happening with the plan.

Really over that time period. So, um, our total spend for health insurance, uh, has gone up and somewhat down. Now the district's total spend isn't necessarily a reflection of the individual premium costs. We have that on the next slide because the district's trend and cost for health insurance depend on, uh, the rates that are collectively bargained, so the amount that the district pays for health insurance, It depends on the individual employee plan selections, whether they're choosing the mimic plan or the high deductible plan. And then it also depends on the total employees that we've had.

So in years where we've seen— in 2026, for example, we saw a decrease in the workforce of about 160 individuals. It's not as though our healthcare costs went down in 2026 on a per-student basis. We had far few— fewer individuals who we were purchasing health insurance for. And then in 2027, our budgeted amount increases pretty significantly, and that is primarily a result of increases in the cost of insurance and does take into consideration reductions in positions. So you can see that this number would be even larger if we had a static workforce.

And so while we look at the district's cost, that's certainly relevant. It's also important that we look at what the individual premiums are.

Over a period of time. So as a reminder, the district is still participating in a fully insured plan, unlike the borough who has a self-funded arrangement. And so we pay a premium to the insurance provider for the number of employees that we have. It is not a situation where we're paying for claims. And so the district has two plans that are currently available.

The mimic plan, which is meaningful for our system. It doesn't really exist outside of it. It is called the mimic plan because it was designed to mimic the most popular level of coverage with the Public Education Health Trust at the time that we made the transition. And then we also have the high deductible health plan. We've seen— we have seen loss ratios in that plan that are more in the 75 to 80%, and the loss ratios for the MMIC plan have exceeded 100% on an annual basis.

Madam Mayor, can I ask a question? I'm trying to understand this slide. So is the blue what the district is paying and the yellow employees? So the total premium paid is like for 2027, like $49,000 per person? Yes, you're correct.

Okay. Yes, it's an, uh, yeah, I think it's, I think it's 50, it's just about $50,000 for the MMIC plan for this year.

Okay, Mary, real quick. Oh, I'm sorry, go ahead, sir. On the MMIC plan, uh, the $13,000 $69. Is that the increase? Was that what I heard, that that's what the employee is going to pay?

Um, uh, yes, through the mayor. So $13,000 is the, uh, annual premium contribution that employees make. The $36,885 is the contribution that the district makes. So the total premium for that, uh, individual or family— we have a composite rate, so it doesn't matter if it's individual coverage or family coverage. The total premium is those two numbers added together, so that is just, I think, just shy of $50,000 a year.

So the MMIC plan went from $7,600 and jumped, what, by almost $6,000 in one year? Through the chair, yes, the MMIC plan premium increased 28%. 28%. From '26 to '27.

Okay, go ahead.

And then we've also seen an interest or willingness, however you want to refer to it, from employees in transitioning from the MMIC plan to the high deductible plan. Now, no bones about it, part of that of course is going to be influenced by the premium, the annual premium, but we've also had good experience in the high deductible plan. And the other data point that I will mention is that while the transition from the mimic to the high deductible can be more challenging for some of our employees who are not used to that structure, we're seeing far higher percentages of individuals who are newly hired in selecting the high deductible plan. They're comfortable with it, they've seen it before, they've used it in other employers, and I think almost into the 90% is what we're seeing for new employees who are— when they're coming into our system, they're almost always selecting the high deductible plan instead of the mimic plan. It's just, it's a plan that they're comfortable with and they appreciate the lower premium and the health savings contribution to help with expenditures that come up.

Uh, we've talked about a transition to a self-funded plan. You want it now or you want them when they're done? Okay, so I'm gonna pour some bowls. Go ahead. Thank you, Madam Mayor.

Okay, so, um, you know, I was asking about this. It was on our side, it was placed a little higher on the agenda, so I apologize for that. So that's where Um, that's why I was asking earlier. So looking at this then, I, I think maybe I had a misunderstanding. So the— so employees, they're allowed to choose one or the other?

They're not— they're not— they only— they don't even have— they don't only have the one option of the high deductible plan? Uh, so through the mayor, it depends, but teachers and classified employees, they have the option of either the Mimic plan, which is a classic PPO plan, or the high deductible plan.

So I get— maybe not my— it's not my lane. I'm on the assembly. Just out of curiosity, why for administrators? And so the reason I ask is those with more chronic illnesses, older employees, right, they might benefit more from the Mimic plan versus the high deductible plan depending on how much money they make annually, right? And so I'm just curious why they only have one option versus both options like the other.

Is it strictly because of the union? Through the mayor, it's— I mean, it's twofold. When the administrators were the first to make this transition, part of that transition with Premera was a high deductible only. That was the only option that was available. And so yes, through collective bargaining, we've held that that is the only plan that's available.

I will say that when we analyze the premiums, the deductibles, and and the coinsurance amounts that, except for very rare circumstances, that high deductible plan is really to the employee or their family's benefit, especially when you consider the HSA contributions that they have access to. But every person kind of has to do that analysis and do the math for themselves to look at what they're comfortable with in terms of risk and what they expect to pay on an annual basis. Okay, I appreciate that.

Okay, go ahead. And so we've, uh, we've talked about and had a plan to transition to a self-funded arrangement. Um, I mean, really, that was our long-term goal as we transitioned away from Public Education Health Trust into Premera. Um, part of what is really pushing, uh, the timeline that we are working with right now is what we've experienced over the last 2 years with rate increases. And in 2026, the MIMIC plan went up by 23%.

We were successful in talking to Premera about holding the increase for the high deductible plan because the experience in that plan did not warrant that level of increase. And— but in 2027, the MIMIC plan went up by 28%. The high deductible plan went up by 26%. The difference there is with pharmacy benefit, the MMIC plan continues to cover GLP-1 medications, which are a major cost driver in insurance right now. And so those premiums for that prescription drug coverage went up a little bit more.

That's that delta there. And so these large increases are really not sustainable for the district. They're not sustainable for employees, I would venture to say. And we have, we have looked at and analyzed the opportunities on a self-funded arrangement. To be able to have additional control, and when I say control, I mean the district and employees mutually, and take advantage of savings.

You know, there's immediately— there's taxes and fees that aren't paid under a self-funded arrangement that are under a fully insured. So we work closely with our brokers to identify a path forward, and that is what we're working towards this year. And just, um, the, the second to last slide that I have, I think is important. It's not all encompassing, but I do appreciate and understand that this is an area where the borough and the school district, we have an expense in common, um, and we have different valuable assets that we're bringing to the conversation. Um, the borough has a lot of experience with self-funded arrangements and they have established reserves.

The school district has experience with a consumer-driven health plan, and we also have larger enrollment. We're bringing size to the table. And so there are places where, you know, there are obvious opportunities, whether that's a shared reinsurance at some point into the future or coming to the table for common contracting, even if we have our own plan designs. Our own networks, we can still benefit from working together in some of these areas. None of it's going to happen quickly.

I don't want to set unreasonable expectations, but we are continuing to dialogue quite a bit, and I do think that this is a place where there is work to be done with the two bodies and the two administrations, really for the benefit of our organizations and, and for taxpayers. And so the last thing I'll just talk about is a little bit about the timeline. Uh, we will be issuing an RFP at some point this month. Uh, we anticipate that that RFP process will be completed at some time in January. There are stakeholders and other individuals that we are working with along the way, um, and our goal is to have a self-funded arrangement beginning July 1, 2027.

I'm like, person bold, did you get all your questions answered? Don't you have more questions? Okay. All right. I just wanted to be sure.

And yes,. Thank you for that, Madam Mayor. Um, so just out of curiosity, are with, with— so I'll get on my soapbox a little bit. Um, one of the things that bothers me is that insurance companies own the PBMs and the PBMs own the pharmacies, and that's how they're able to keep these costs so high. Does this insurance plan offer alternative medicine opportunities for employees that don't want to get into that cycle of getting put on pharmaceuticals?

Through the mayor, I, um, we have talked quite a bit about the pharmacy benefit management part of this. One of our frustrations with having a fully insured plan is that we do not get to see nor necessarily experience all of the rebates firsthand the way that you would on a self-funded arrangement. So the pharmacy benefit is something that we are keenly clued into. Whether the RFP in the end will have those alternative medicine options, I can't speak to, but we've been really clear that we do— we want pharmacy to be separated out and not just part of the package so that we can evaluate it independently and whether we end up having a PBM that is connected, we can make that decision. We want to see all of the options that are available.

Thank you. Any other Assemblyperson? Now let's go ahead. Uh, yeah, thank you, Madam Mayor. So the healthcare has been on my horizon since, uh, I got on the Assembly, and, um, the pharmacy benefit managers— I'm glad to hear you say that because there's been a lot in the news about that and how much that has driven up costs.

Um, You can't control cost because the consumer doesn't know what it's going to cost. And I just recently had an experience where my daughter had to have imaging and the price was $2,500 with insurance, $1,300 if she paid cash up front, and $700 if you were uninsured for the same procedure. That's just ridiculous. So I'm glad you're pursuing options. I know we have talked about a All claims payer database being a priority for the assembly, and the school board's probably aware of it too.

It's made no headway at the state, but that doesn't mean that we shouldn't keep trying because the healthcare costs are— I mean, it's astounding how much your healthcare costs have gone up. And you were hoping by switching to Premera that they would go down because the thought was, well, the union is controlling it and that's the problem. When the real problem is the whole healthcare system. So that all-payer claims database is just one way to get the data and start making it transparent to the consumer. I would just— I'm not going to be on this board anymore in November, and so I would hope that other folks would continue to push for ways at the state level to make this work more like an actual marketplace.

And not like it does now where it's completely untrans— you just can't, you can't function any way like any other market does not function this way. You don't go buy a car this way. You don't go buy your groceries this way. Um, and we have to keep being the squeaky wheel at the bottom to get it to change at the top. So,.

That's it. Any other discussions on The healthcare, healthcare presentation.

Okay, so now we will go ahead and go then to Item E, the 2027 and 2028 state legislative priorities.

So one of our, uh, what's becoming one of our annual topics is to make sure that the board shares their draft legislative priorities with the borough, with the borough assembly, so that if there are areas where we can align and have mutual priorities both organizations, both bodies can be advocating for those changes.

The draft priorities we've provided a hard copy of. The board— —board has another meeting in September where they will make a final decision on these draft priorities. We'll make sure to get a final copy back to the administration to be shared out. We just wanted to make sure we had this opportunity to provide the work that was currently underway, um, because I do think there are some areas where we will be able to work together and there is overlap.

Go ahead. I wondered, it didn't look like there was a priority for increased funding, formula funding. So I know you're looking at budget deficits. Why, why did the school board— why was that not included?

Um, I don't know that we necessarily want to speak for the board, but I can say as part of requests for targeted investments, uh, in the areas of pupil transportation, career and technical education and correspondence and hybrid learning is really where they wanted to focus their efforts. Those are areas that can have a big impact for MAT-SU specifically. So that was some of the discussion we heard, but we can certainly defer to board members who want to provide additional, uh, priority.

Go ahead, sir. I'm just speaking as one board member, so I don't speak for the whole body, but I would say that From my perspective, when we're going to the legislators and saying, hey, these are our priorities, I would prefer to go to them with targeted areas that will affect us and into the green rather than just a bubble of, hey, just give us more money. It seems to be better response from our legislators that are down there when we say, hey, these are what we need money for. When we're showing a little bit more of, I guess you could say, transparency versus, hey, we just, we just need more money because we need more money. We do need more funding, but I believe that if we had funding in some of these targeted areas, that would be a huge benefit to us.

Assemblyperson Nowers. Thank you for the, the answer. Um, that kind of— it, it does kind of make sense. I just think that might continue to be part of the discussion given the, the amount that you're facing for a potential sort of deficit to be able to continue to run operations. And seeing that you've had— you're having to nurse funding problem, libraries are closing, like you're, you know, trying to make the best of the situation.

So I just— trying to get the most from your legislators and having a targeted conversation makes sense, but there might be an argument for an increase to the funding formula too, given the, the breadth of the dollars that you're looking at being potentially short and I don't think that's going to be made up by the borough.

Further discussion by anyone?

Madam Mayor, could I add one thing? Sure. I just would like to draw attention, if I could, um, to the board's priority number 3, because I think it's hopefully low-hanging fruit that would interest both— that would interests both the borough and the board and sort of require a consolidated effort on those two bodies. Right now, the Willow Elementary School resides on land that is not owned by the borough. And a long, long time ago, decades and decades ago, there was a lease that was like $10 a year.

Like, and I'm sure that when that got written down, the person thought, surely this will get taken care of 50 years from now. But the 50 years has come and went, and now the lease is like $60,000 a year. We would hope that they're— and, and growing rapidly because we're, we're paying fair market value for a school that sits on state land. It would be great if the borough, the state, and the district could work some sort of land swap deal or something along those lines to take care of this problem, because as it sits, the state can't do anything with our school on it. And we can't do anything with the land that we don't own that our school sits on.

So it just feels like an opportunity for both bodies to work together with our state legislators and get this problem fixed. Thank you, Madam Mayor. I'm glad you brought that up, Dr. Traini, because I was just about to ask about this. Um, have we asked the state for the land?

Um, through the mayor, so we have been working closely with the borough. The borough's been involved. I, I've talked with borough staff. I, I can't tell you what the state has said or what the process is. I think this is intended to be maybe a federal priority when it comes to it, but I, I just want to acknowledge that the borough has been a very good partner with us in trying to make progress on this.

It might be bigger than the two administrations to resolve. Okay, Mike, do you have anything you can add to that? I mean, has the state given any reason why they're unwilling to give the land to us? Go ahead, sir. Through the mayor, so actually we believe this will be a federal priority.

There's an FAA component to this. Gotcha. And so even though it may be a state-operated airport, you know, there's a federal aviation component. So we actually suggest that they include that as well. And I think it may be a federal priority that we send to the CODELS.

Okay, thank you.

Further discussion on legislative priority? Deputy Mayor. Is there any other schools that are located on state property?

Through the mayor, um, uh, the— you know, there are facilities that we don't own, right? Um, but I can't think of an owned facility that is on state land.

Go ahead,. Sir. Through the mayor, I'd prefer to follow up just to make sure we get it right, but I think the warehouse nutrition services might be on a lease lot as well. But we can, we can run that down. I just don't want to give you bad information on the record.

Okay, um, Member Larson and then Stephanie. Yeah, and it sounds like that, uh, that was railroad property, correct, that, that it's on? And it had a— like you said, you had a 50-year lease on it, and then some bureaucrat, unelected bureaucrat, decided to charge us, or, uh, the $60,000 for, uh, property value from $5 or $10 a year without discussion. Well, and that's the irritating part. Nobody brought this up for discussion.

It just boom, we get— I think the first year was $30,000, wasn't it? And then it went to $60,000. And, uh, I assume it's going to keep going. So that's the frustrating part about it, is unelected bureaucrats somewhere, uh, decided, well, let's make some money off the school district, which is taxpayers' money. Assemblyperson Nowertz,.

Since the state is the majority funder and so you're just paying the state back, has anyone asked, or have we asked, if they just put the lease back.

Go ahead, sir. Uh, through the mayor to Miss Nowers, I don't have lease agreement with me or the terms and conditions or the details about how it evolved over time. The reason we brought it forward is to put it on the radar so that we can have a conversation about a permanent solution, which is very similar to what we've been getting direction to do with the charter schools, right? Get them out when they're successful programs, get them out of lease facilities. Get them into permanent facilities, stop paying lease payments annually with no end in sight.

And so that's the intent. I'm just not sure what the parameters are federally and with the state, right? So I don't think this is a solution the state could just change. I think it's more complicated than that. It'd be great in the meantime if somebody up in administration could say, hey, just put that back to $10 till we get that other part figured out.

Further discussion from any of the assembly? Yes, go ahead. I just want to point out that, you know, we put these priorities together and we definitely— I would encourage the assembly to really look them over because this is something I think that we have a better voice with our legislators when we go to them with joint things together. Something, uh, number 10 is something that I think all of you guys would appreciate, and that is supporting legislation which provides greater predictability for school districts in managing increases to the minimum required local contribution through mechanisms such as multi-year averaging, an extended notice period prior to implementation, or ability to offset increase— increases through approved state-recognized exemptions. And, you know, I know, uh, something that's been, I think, a struggle for us to keep the borough ask low is that when— and I know Member Larson has spoke to this before— but when, you know, the state comes through and does these assessments, and then all of a sudden it's like, oh well, the borough can just pick up that bill, well then, you know, then we're coming to you guys and say, well, then it goes up more, right?

And You know, it's like, I understand that the state has their own struggles to deal with, but by putting that so much on local government and that high increase, so that is something that I feel like our legislation could try and focus on to help manage inflation issues is that, you know, okay, some type of average, something, you know, that gives us a little bit more predictability and help there.

So, okay, I think that's— I don't see any more discussion on that item. Uh, so then from data centers, Member Larson, go ahead, sir. I didn't mean to pick on data centers, but I was outside this year and I went by some data centers that take up a quarter of a section of land that are 5 stories high, and they have their own substations. And I know we're talking about data center here, and I'm not for or against anything. I'm not debating that.

Um, their big issue outside was electricity. When you have a total substation just to run the facility, and then the groundwater that comes out of the ground and then, yeah, it virtually goes into the air. What their big argument was is the aquafilter in the Midwest was falling anyway and has for the last 50 years, and the data centers are not helping out. And that's the big debate.

Um, when I brought this up, we've already talked about a lot of this, is our utilities this year alone is, uh, I think, uh, electric's $500,000 increase, but we are getting energy cost relief. But I just want the borough and, and, uh, us to consider, uh, when we talk about these great big, uh, uh, increases, uh, in electric— MEA is already talking about rolling blackouts, whatever that means, uh, that we look at the infrastructure, uh to maintain a lot of the increase in utilities and the cost. As utilities get— as utilities get shy of that, the increased cost goes up and the school district ends up eating all that cost year after year. I think electric alone, or utilities alone, has been about $10 million over the last, what, 5, 10 years that we've, we've slowly eaten. Um, and so just take that into consideration, uh, when our insurance goes up or, uh, supplies or commodities, uh, you know, contracts, healthcare.

Well, uh, we're eating all that money into our, our general fund. And I, I just threw the data center in there for fun. I know Cordova— I was told Cordova has a data center, but they built a dam, so they get the water and their electricity out of something that they created. And I know that, uh, which I thought was weird, that Anchorage Utilities is talking about damming rivers up in, in the Mat-Su for their electricity, which I didn't think that would That was kind of strange. You would think the borough would want that versus have some outside entity do it.

But that's all I wanted to talk about is future utilities and the fact that if they go up at any rate, that it's in our budget that we have to take out operation because the state, except for the energy relief one-time costs, or the borough simply doesn't doesn't include that in the cost.

Okay, was there discussion on this topic? Assemblyperson Norris. Appreciate that being brought up because the MEA is looking at importing natural gas at double the price that they currently pay, and that fuel cost is about a third of the overall cost of the bill. So when the, the school district is looking at new buildings and some of these energy improvements, looking really hard at how you can reduce your reliance on natural gas, because that's going to be a year after year savings, right? Because if you're paying, that's going to eat into your budget too.

So, um, that's something that's really important data center or know that you're going to be facing an increased energy cost in the near future. I think the contract expires in 2028 right now that they have with Hilcorp. So that's right around the corner.

Need for assembly person bowls.

So, thank you, Madam Mayor. So, yeah, that actually came up out in Chickaloon. Um, you know, since it is District 1, the Chugach Electric is looking to try to put in hydro plants at Caribou Creek and Boulder Creek. And so they came out and addressed Chickaloon. I don't know if they've made it to Sutton yet, at least not in the meetings I've gone to.

Um, so they are making the rounds. They actually identified, I think, like a dozen places around the state, and they've narrowed it down to these two. And I asked this very similar question as why is Chugach Electric interested in putting in hydro in the borough, and why isn't MEA involved?

And I don't— maybe they gave an answer, but I don't remember receiving an answer there. So I'm all for hydro, but I mean, MEA is our provider. Maybe they're trying to broaden the portfolio here. I don't know, and, and provide multiple providers for electric, which I'm all about competition as well. But, um, so that's, that's what's going on for those that are curious as far as the hydro and then the exploration of that out here in the valley.

Okay, I don't see any further discussion on that subject then. And Item G was pulled earlier. When we changed the agenda, correct, Lonnie? Thank you. And so now we're to H, um, required local contribution, new state law and future borough contributions discussion, and member— Yeah,.

We've talked about a lot of that, the new state law that came through that, that actually finally caps the amount of money that the state can pull because the tax assessment goes up. And that's where the deferral, tax deferral came in because the state doesn't take in consideration like veterans and senior discounts in taxes because they look at the whole thing as a whole. And I'm hoping that all I'm going to say about this since we've talked mostly about it is that the borough and the school district can sit down and talk, uh, way before, uh, we come up with our budgets, uh, about tax assessment going up and what that's going to look like, which is kind of nice that they've capped it. So as we're not talking about $3.2 million or $4 million or $5 million, and we've seen it that high where it's going to be capped, I understand, about $2 million, uh, and hopefully it's lower than that. But I'd like that discussion ongoing.

Um, if you really want to know my opinion, I think they— I think they ought to get rid of the law altogether. You know, that's kind of a bizarre law, uh, especially since It only affects the 5 big incorporated boroughs, and the rest of the state gets 100% without that deduction. Thank you.

Anyone else care to discuss that subject?

Okay, I don't see anything else then. Um, so we're now at parting comments.

Um, would you like to ask your members for parting comments, or how do you normally handle that? And remember, you have somebody online. Member Larson.

Thank you. I think, uh, through good dialogue, uh, with the school district in the, uh, and borough, we can accomplish a lot. And we should start really serious, and we are seriously looking at the future endeavors that, that are creeping up real quick. And we've talked about a lot of it tonight, and I really appreciate the dialogue. Thank you.

Member Bergie,.

As we move into the future and we start dealing with some of the problems that before us, we should try to look for some of our solutions in the past, past practices, you know, go forth 10, 15 years ago, the solution to everything was technology and screen time. And now what are we doing today? We're rolling screen time back and we're moving back to a previous time. And I would think that before we go and try to invent a new rounder wheel, that maybe the solution to some of our problems, not all of them, might be in how we operated in the past. So I just wish to bring that out so folks will consider that when they're looking at the problems of the future.

Thank you and good night.

Member Pitcher.

I appreciate the presentations by the borough and by the school district. A lot of work goes into those presentations and, uh, making them so that they're easy to decipher and to follow along and, and, uh for us as well as the general public to get a pulse on where the borough's at, where the school district's at, and what we're looking for. Um, you know, to echo Member Berge, I believe there's a quote that's attributed to Leonardo da Vinci, and it says that, uh, in essence, simplicity is the ultimate sophistication. And we start talking about these technology things and stuff like that, you know, I'm really glad he glad that he brought that up because getting back to more of a hands-on, more of a, more of written, written work and things, it, uh, it makes a big difference on the education for these kids. And technology is as wonderful as it is, it's starting to swallow, starting to swallow so much of the education that's happening, and it's having an effect.

And I I am glad that the districts, a lot of the schools, are starting to do some different things. Uh, Teeland's doing a No Technology Tuesdays, and, and just, uh, it's a good start. It's a good place to keep going with it. And apart from that, I really appreciate everybody's, uh, participation tonight, and I hope everyone has a good night.

Member Cruz online.

Thank you for— really appreciate the conversation. That we have about enrollment. I think it's really important to be watching that. Um, I am always impressed with the presentations and really appreciate the time and effort that goes into that, and I hope that everyone has a safe drive home and a good evening.

All right, I wish I had something more profound as what my colleagues had because that's a pretty tough act to follow, but, uh, really just want to thank all the, uh, administrative and staff for the presentations. And I do appreciate these meetings where we're able to get together and, uh, kind of discuss some things as we move into this, uh, new school year. So, uh, appreciate all the discussion, everyone up here. So with that, have a safe drive home. Okay, uh, Mr. Attorney, parting comments?

Madam Clerk? Mr. Brown? No. Administration?

Um, I always end with the comments thanking a group or, uh, of people in the district, and I want to thank a, a really broad group. At the beginning of the year, I spoke with administration about how the K-12 environment in the state of Alaska is changing and that we need to embrace that change. You heard me talk earlier about our hybrid program, and so I want to, I want to, I want to thank all of the people, all of the adults who've had to change their mindset about what K-12 education looks like. I mentioned that we have over 3,000 courses scheduled for hybrid this year. We have hybrid courses offered in every one of our major high schools, and Their willingness is meeting their willingness to change as adults is meeting families where the families want us to be, which is in this hybrid situation.

And the added benefit is because we've done that, we have more— we have about $3.3 million more in revenue than we would have had 2 years ago before we came up with the idea of hybrid. It's, it's a big deal. And I know, like, it's 3,000 today, the count period doesn't even start till September 28th. It's going to grow between now and then. So it's, it's been remarkable to watch adults change their behaviors and change their preconceived beliefs about what K-12 education should look like, and it's having a remarkable impact on our bottom line.

So thank you to dozens and dozens of people. Assemblyperson Followup. Parting comments? No, thank you.

Assemblyperson Gamble, parting comments? Thank you, Madam Mayor. Yeah, I just want to thank you, Deputy Superintendent Gardner and Superintendent Traini and staff for the presentation tonight.

I always enjoy getting caught up on all this, and I, I, I do appreciate your remarks about us partnering wherever we can, um, on things like healthcare in this required local contribution formula where they, um, the state forces us to give breaks for, you know, veterans and for seniors, but they don't take that into account when they do their formula. I think that's ridiculous. I would like in the future though, when you do your, um, like projected school enrollment and when you do your report, if you could like show another district like Anchorage or Kenai or whatever so we can see, because I know it sounds like doom and gloom up here, but I think we're not doing nearly as bad as a lot of other school districts are in the state, and it would be nice to have that comparison up here so we can see that along with all that great information about how we're doing as far as educating our students. I would like to see that, and it's.

Thank you, Madam Mayor. Um, I just— I appreciate this meeting, um, and I appreciate, um, having these joint meetings so we have this opportunity to meet with our counterparts on the board. Um, I appreciate answering the questions. Um, I know that it's not necessarily our lane, but— and, um, specific to healthcare, um, and insurance, that's kind of my, my past background. And so, um, it's one of those things that It just irks me.

I'm going to be honest with you, and it's not just a broken system, but it is full-on monopoly, and it's terrible. And but there's nothing we can do about it on the borough. But I just thank you very much, District 1, for putting me in the seat. It is a privilege, and we'll see you again next Tuesday.

Assemblyperson Nowers, parting comments. Yeah, I appreciate also the tolerance of letting us ask some of the kind of nitty-gritty questions because really the borough assembly is the funder, but we're all invested in the school district. And I like the comments about going back to the past. I think of all the, the parents and the, the teachers who are trying to make it happen for their students. And Ms. McKee knows as well, the more kids you have in that classroom, your ability to adjust on the fly— and I've got 2 wonderful girls.

Sometimes you wonder if they're from the same parents. They learned so differently. And I can't imagine what it was like for those, you know, teachers when you have that gamut across the board, and the professionals as well that are trying to help these kids. And I, I do feel like this borough is facing, and the others as well, a sea change in the next— I mean, I think you're facing it now. The charter schools just got authorized.

I think the legislation at the state level is only like 20 years ago, but now you're to the point where structurally you don't have enough money to fund all that choice and also have a bunch of students from this area go outside. So you're, you're cutting into things that make the neighborhood schools work. You know, where's that line? Where, where does it start to not work? Where you don't have a library and you don't have a nurse?

I mean, what, what, you know, what is fundamentally a neighborhood school? Because we've created this other option, and I, I do think there's, there's a serious discussion to be had to figure out how you do that. Do you try to make those neighborhood schools more like what the school choice— you know, what is it that parents are choosing and why? You know, is it a zero-sum? You're just going to create a bunch of charter schools and close all your neighborhood schools, or are you going to have good schools?

We've created this new term, used to be just called school. So, um, I do think even though we go back to the past, we're also facing a real question in the next— right now and in the next 3 to 5 years to figure that out and do it in a way that benefits the students. Um, that's what— where my heart is right now, because I see people who are kind of being left behind by that system, and I want to see a way for them to figure it out for the kids and the parents who live out here. Well, thanks for all the comments. Thanks for the folks who came and testified tonight.

Deputy Mayor, parting comments. Thank you, school board, for coming out. Administration, thank you. Everyone else, Lord, I want to thank you. Thank you for your blessings.

Thank you for your mercies.

Thank you for your grace, Lord. We pray for the borough. We pray for our state. Please fill us with your love. Fill us with the Holy Spirit.

Fill us with wisdom that we may guide— help guide our borough with your guidance, Lord. Please, please bless our first responders, our veterans. Help all those that are— need your help and love, Lord. We all need your help and love. But those that are addicted and have issues that you can solve, Lord.

In Jesus' name I ask and pray. Amen. Parting comments, Assemblyperson McKee? Yeah, I, I, I'm going to use the word hope to start this out with. Hope.

H-O-P-E. I want everybody to, to take this down, uh, Digital Delusion by Jared Koenig Horvath. Uh, it's, it's on the invasion in the classroom of technology and what it has done to our students and their minds. So kind of like what. Mr. Berge was saying, and the gentleman down there, maybe some of the solutions are in the past.

And another, so I was just delighted to hear that, 'cause I fought that for like 15 years. I lost the battle, but maybe I didn't, 'cause finally everybody said, "Yeah, maybe that's right." The other thing is, if you get the chance to watch Shannon Bream, who was on a program, she has a program on Sunday night, Rahm Emanuel was on, and that's where the word hope comes from. I was astonished, delighted. He may actually run for president in 2028. Now, I'm a Republican, he's a Democrat, but you know what?

I said, that guy's got it. And his whole thing was about education, former mayor of Chicago. And the things that he's putting forward, I didn't agree with all of them. But gee whiz, if even somebody starts looking in that direction, I urge you, watch that Shannon Bream. You'll feel better about all this.

It was really well done. And that book again, Digital Delusion by Jared Horvath. So there is hope. OK. Well, thank everybody for the presentations. And thank you everybody for coming out.

And, uh, there is no objection. We will.