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Having two high schools would generate nearly enough state funds to pay for added operating costs, according to a recent study.
But renovating and expanding an annex at Juneau-Douglas High School would leave the district short by several hundred thousand dollars, the study shows.
The study - compiled at no cost by accountants Max Mertz and Karen Tarver of the firm of Elgee, Rehfeld, Mertz - was prepared for the city and the Juneau School District. It was presented to the public Wednesday.
The Juneau School Board is considering whether to ask the Juneau Assembly to place a bond measure on the October ballot for a new high school, for about $54 million, or an expanded JDHS campus, for about $38 million. Both are rough estimates.
Either proposal would be eligible for state reimbursement of 70 percent of its costs, excluding an estimated $20 million parking garage at JDHS.
Both proposals assume occupancy in fall of 2008.
Besides construction costs, the School Board and the public will have to consider the cost of running two schools versus one school.
That issue was one point of contention in the May 25 special election, in which voters narrowly turned down a 1,080-student high school at Dimond Park in the Valley.
At the time, the school district's sample operating budget showed that increases in state funding would account for about two-thirds of the expected rise in costs. The rest of the funding was to come from the city and by cutting the district's budget and passing the savings to the new school.
The most-recently proposed school in the Valley would accommodate about 840 students.
As with the earlier proposal, the district would benefit from a provision in the state school-funding formula that considers the number and size of schools in a district.
The formula is designed to account for the unavoidable costs of running each school and for economies of scale.
Generally, districts receive more money per student in small schools. As a result, Juneau would get more state money for running two high schools than one high school.
The study shows that it would cost about $1.2 million more to run two high schools in 2008 than it would to run JDHS alone. The state would provide about $1.03 million in new money. That's about 86 percent of what may be needed.
Moreover, the rise in state funding would trigger a higher amount of money the city can give schools. The city would be able to give about $237,000 more.
School Board Vice President Bob Van Slyke said the board has "a good deal of confidence" in the study.
Regarding the comparison of state funds with operating costs, he said, "We're encouraged that it seems to be in the ballpark."
On the other hand, renovating and expanding the Marie Drake building and incorporating it as part of JDHS would add about $350,000 in operating costs, the study says. But the two buildings, which the state would view as a single school, would generate no new state funding.
The study makes a number of key assumptions.
It is based on the district's projection of about 1,750 high school students in 2008, excluding students at the alternative high school, which is housed separately in rented quarters, and at the state juvenile jail.
Excluding alternative and jailed students, there were about 1,520 students at JDHS late last school year.
If fewer students enroll than projected, state funding will be less than expected, as well. But many of the increased costs, such as for a principal or librarian or custodians, will be the same.
The study also assumes that personnel costs will rise by 2 percent a year and nonpersonnel costs by 4.5 percent a year. And it assumes that the state's formula for funding schools with state and city money will increase its rate by 3 percent a year.
The cost increases were drawn from the district's recent history, said accountant Tarver. The increases in state funding were estimated at what it would take to match new costs, she said.
In practice, the Legislature goes years without increasing the school-funding formula. The latest increase was this year, of nearly 10 percent over the previous amount, which was set in 2001.
It's not unusual for the district to cut its budget as expenses rise more than revenues until state funding catches up - or partly catches up.
The study also assumes the city will fund the schools at the highest amount it can give, commonly called the cap. The Assembly nearly gave the schools the cap for next school year, but it had to increase property taxes to do so.
Laurie Berg, a resident who has followed the high school issue closely, said it's hard to immediately formulate an opinion on the study.
The district presented a lot of information about costs, programs and staffing at a meeting of the School Board's Facilities Committee on Wednesday, she said.
She did say the district may have overestimated enrollments for 2008.
And Berg pointed out that the district now pays something to run the Marie Drake building, although those costs aren't part of the JDHS budget. Not all of the anticipated added costs of running Drake as part of JDHS may represent extra expenses, she said.
The Facilities Committee is scheduled to discuss the two proposals at 1:30 p.m. Monday is the district's boardroom. The full board is set to vote on a proposal at 6 p.m. Tuesday.
Eric Fry can be reached at firstname.lastname@example.org.