A 1970s-era addition to Barnette Magnet School will be slated for demolition if voters approve an expected bond package this fall. A replacement for the old addition — which officials have seismic concerns about — has already been added on the school. Major additional renovations would also be planned if the bond is approved. May 25, 2018.

The Fairbanks North Star Borough is still waiting to see the full effect of Gov. Mike Dunleavy's vetoes to the state budget but has a plan in place to handle the veto of the school bond debt reimbursement program.

The debt reimbursement program provides funding for school construction projects and capital improvements. Dunleavy announced a 50 percent veto of the reimbursement program, a cut of $48.9 million.

Under the partial veto, the borough will have to cover $4.5 million for the program. The borough’s budget, however, had accounted for the possibility of a 100 percent cut to the program

“Our strategy to cover that was to not dip into our reserves, was to use, to raise the mill rate to cover it,” said Jim Williams, borough chief of staff.

Williams said the money collected for school bond debt reimbursement this year will now be split in light of the governor cutting the program in half rather than eliminating it. Half of what the borough is collecting to offset the veto will go to cover the costs not covered by state funding for the program this year, while half will sit in an account to be applied toward next year's budget.

“So what we’ll do is we’ll hold the cash and then next year, when we determine what the revenue requirements are to run the borough, we’ll just offset that,” he said.

Williams stressed that there is no guarantee the mill rate will go down next year, even in the case of a veto override to restore the full school bond debt reimbursement amount.

Should there be an override and state funding for the program be fully restored, Williams said the scenario will remain the same; the money collected this year will be used as a revenue source for next year.

The borough is also watching to see what will happen regarding vetoes to health and human services budgets as well as to the University of Alaska’s budget.

Dunleavy vetoed all funding for human services community matching grants. The state funds agencies such as Love INC. and the community food bank through the borough. Williams said without the money provided by the state, the borough can’t provide a local match.

“Our powers are limited in scope just to those community matching grants, so if the matching grants go away, then our ability to provide that goes away,” he said.

Williams said it would be hard on the community to lose such organizations, which are “kind of the safety net.”

While not anticipating a direct impact from cuts to the university, Williams said there could be indirect effects that trickle through the community.

If large numbers of jobs are lost at the university, for example, Williams said, there would be a loss of cash flow into the local economy as well as the possibility of housing market changes if people move away.

“It’s definitely not a positive thing to be looking at, but we’re definitely not seeing any direct impacts,” he said, “but it’s the indirect, second- or third-order effects, that we’re kind of anxious about.”

The Borough Assembly will meet Monday evening to discuss the borough’s position with respect to the veto overrides.

Contact staff writer Kyrie Long at 459-7510. Follow her on twitter: