School board approves MOA with borough; rejects motion to switch to borough's 3-year repayment plan
February 28, 2026 | Ketchikan Gateway Borough, Alaska
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The Ketchikan Gateway Borough School District board on Feb. 28 approved a memorandum of agreement (MOA) with the Ketchikan Gateway Borough intended to convert sequestered funds into a longer-term repayment arrangement and lay out compliance provisions for distributing future funds. The board approved the MOA on a 6-0 roll call.
The MOA outlines how previously sequestered district funds will be parceled across payments and describes compliance language that could allow the borough to withhold portions of discretionary local contributions if conditions are not met. Lisa Pierce, the district's business manager, told the board the state Department of Education rejected the district's FY26 budget after the audit reflected a negative fund balance of about $3.8 million (inclusive of a $5.4 million health-insurance liability). Pierce said the DEED letter sets a March 6 deadline that, if unmet, could delay the district's March foundation payment of roughly $2.3 million.
"The letter's noted date is March 6," Pierce said, explaining that receipt of an agreed plan by that date would allow the March foundation payment to be processed. "If we don't have a response to them by March 6, the foundation payments will not be released until that point in time," she said.
Public commenters and union leaders urged the board to seek a longer repayment schedule. Mary Maley, vice president of the Ketchikan Education Association, requested the board back a five-year repayment plan to reduce annual payment pressure and protect classroom programs, staff retention and student services. "A 5-year repayment plan balances accountability with sustainability," Maley said.
Board members debated whether to accept a borough-backed 3-year schedule or press for the district's preferred longer option. Member Ginter warned the board that a shorter schedule could require substantial staffing reductions; she said a 3-year plan would require cutting an estimated 19 teacher positions "minimum." Other board members noted the borough assembly, not the district, will have the final say on any ordinance implementing a particular schedule.
A motion to rescind the board's previously adopted repayment plan and replace it with a 3-year schedule was called and failed on a 0-6 recorded vote (board members recorded: Johnson 'No'; Ginter 'No'; Tab 'No'; Lisa Guthrie 'No'; Reid 'No'; Patsuda 'No', as read on the roll call).
The board and staff emphasized that the MOA helps convert a current liability into a long-term obligation and that getting the MOA signed is a necessary step to unlock sequestered funds. The board also said it will press the borough assembly at a public meeting Monday evening; board leaders urged the community to attend the borough assembly meeting and speak in support of the district's preferred repayment approach.
Next steps: The board approved the MOA and then entered a work session to accelerate budget-planning steps with the goal of producing an FY27 budget and a repayment plan acceptable to DEED. The district expects administrators to return with concrete budget and staffing proposals for a March 7 work session and a public listening session at the March 11 regular meeting.
The MOA outlines how previously sequestered district funds will be parceled across payments and describes compliance language that could allow the borough to withhold portions of discretionary local contributions if conditions are not met. Lisa Pierce, the district's business manager, told the board the state Department of Education rejected the district's FY26 budget after the audit reflected a negative fund balance of about $3.8 million (inclusive of a $5.4 million health-insurance liability). Pierce said the DEED letter sets a March 6 deadline that, if unmet, could delay the district's March foundation payment of roughly $2.3 million.
"The letter's noted date is March 6," Pierce said, explaining that receipt of an agreed plan by that date would allow the March foundation payment to be processed. "If we don't have a response to them by March 6, the foundation payments will not be released until that point in time," she said.
Public commenters and union leaders urged the board to seek a longer repayment schedule. Mary Maley, vice president of the Ketchikan Education Association, requested the board back a five-year repayment plan to reduce annual payment pressure and protect classroom programs, staff retention and student services. "A 5-year repayment plan balances accountability with sustainability," Maley said.
Board members debated whether to accept a borough-backed 3-year schedule or press for the district's preferred longer option. Member Ginter warned the board that a shorter schedule could require substantial staffing reductions; she said a 3-year plan would require cutting an estimated 19 teacher positions "minimum." Other board members noted the borough assembly, not the district, will have the final say on any ordinance implementing a particular schedule.
A motion to rescind the board's previously adopted repayment plan and replace it with a 3-year schedule was called and failed on a 0-6 recorded vote (board members recorded: Johnson 'No'; Ginter 'No'; Tab 'No'; Lisa Guthrie 'No'; Reid 'No'; Patsuda 'No', as read on the roll call).
The board and staff emphasized that the MOA helps convert a current liability into a long-term obligation and that getting the MOA signed is a necessary step to unlock sequestered funds. The board also said it will press the borough assembly at a public meeting Monday evening; board leaders urged the community to attend the borough assembly meeting and speak in support of the district's preferred repayment approach.
Next steps: The board approved the MOA and then entered a work session to accelerate budget-planning steps with the goal of producing an FY27 budget and a repayment plan acceptable to DEED. The district expects administrators to return with concrete budget and staffing proposals for a March 7 work session and a public listening session at the March 11 regular meeting.
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