RALLY will get a shot in the arm and fresh start as the Juneau School District Board of Education has approved two changes.

The program, Recreation, Arts, Learning, and Leadership for Youth, was facing a $304,000 debt, had almost all morning programs closed and two afternoon programs faced combination.

The board ultimately unanimously approved transferring $304,000 from the Pupil Transportation Fund to the RALLY fund to cancel the debt. The biggest reason cited that RALLY incurred so much debt was because the district was charging the program with wildly fluctuating indirect costs. The program actually was not eligible, according to board policy, to be charged for indirect costs — only grant funded programs. Most of RALLY is paid for by parent user fees.

This movement of funds leaves both fund balances positive.

Board member Mark Choate suggested waiting 60 days to approve the transfer. He said he was uncomfortable with this transfer as a solution and wanted the parent group and administration to work together for a different solution. Choate also asked if the district could simply write-off RALLY’s debt because the debt in question was inappropriately charged. Director of Administrative Services David Means said they cannot because the district does double-entry bookkeeping, not single entry.

“We use a balanced economy system here in the district,” he said. “We have to identify a source of income to transfer in. We can’t just forgive it. ... It would be an ongoing concern for auditors.”

Scott Miller, a Mendenhall River Community School parent who worked extensively on the RALLY issue, said that RALLY has been charged more than $800,000 in these costs. He said they are not asking for a free ride, parents of the program are willing to give their fair share. Miller said another issue with the program has arisen, that staff has been cut so deeply in the program that his family is now on a waiting list.

“There are two RALLY issues,” said board member Barbara Thurston. “One is an accounting gimmick to move money from one invisible fund to another invisible fund to absolve the debt. The other is the issue of indirect costs. What I’m not sure, where are we going now from RALLY? Does it make the program back to the way it was in the fall? What’s happening with RALLY, what’s the plan going forward?”

Superintendent Glenn Gelbrich said that the fee fluctuation and charges to RALLY caused a wave, and that wave needs to stabilize. He said the two motions before the board are an effort to do that. One goal would be to eventually reinstate the morning programs. Aside from that, after there is a certain threshold of students on the waiting list, another person is hired. Gelbrich said they can’t add another person until there are enough students involved to make adding that person financially viable.

“I can see no value in not doing this transfer of funds right now,” Thurston said. “Without it, administration doesn’t really know where we’re going. I would like to approve both and then see a plan from administration about where we’re going with RALLY.”

Board member Sean O’Brien said he views this as a corrective step, not the final answer to making RALLY viable and sustainable again.

The board also unanimously approved setting a 2.5 percent indirect cost rate for non-grant funded programs, where applicable by law. Board member Sally Saddler abstained, as she participated via teleconference and could longer hear the discussion.

Victoria Johnson, a parent, said she used RALLY for her children and she had to use Catholic Community Services just to pay for it.

“I am really surprised there is this huge debt,” she said. “I could not afford to pay for RALLY on my own.”

• Contact reporter Sarah Day at 523-2279 or at sarah.day@juneauempire.com.