It's up and it's down, depending on how you look at it.
The Living Sky School Division board of education got a look March 27 at how announcements in the recent provincial budget will affect their funding for 2013-14. From whatever angle they observe the news, dipping into past surpluses to supplement their $63 million budget appears unavoidable.
After more than an hour of discussion around 2013-14's funding dropping 3.5 per cent from the year before, the board agreed to let administration factor the use of reserve funds into the upcoming budget process.
Living Sky has $16.3 million in unrestricted reserves and another $9.7 million in restricted reserves - money that has been put away in past years, much of it during the era of school divisions being able to levy their own taxes.
The close-to-completed bus garage and central office renovation was paid for out of some of those reserves, as the board felt it couldn't wait for the Ministry of Education to come together with a policy around funding those facilities. Now, the board may also be faced with dipping into reserves to renovate the North Battleford Comprehensive High School.
The board has committed to moving Grade 8 students from overcrowded elementary schools in the Battlefords to the high school in September of 2013. Although the ministry official who has been working with the board on the project recommended the division make a $3 million request for the capital needed for those renovations, plus a new gym if the Grade 7s are moved to the high school as well, those applications, submitted last fall, have not been approved, said Lonny Darroch, chief financial officer.
Now, he added, the funding protocol under which those applications were made is also undergoing changes. For 2013-14, it appears the capital funds available to the division amount to only $681,000, its share of the provincial Preventative Maintenance and Renewal (PMR) funding pool, said Darroch.
The writing on the wall appears to be that as long as school boards have money in reserve, they shouldn't expect big increases in government funding, especially capital expenditures. Board chair Ken Arsenault said, "That's part of the answer. Until the reserves are gone they [the provincial government] are going to keep cutting us."
He suggested reducing reserves by a percentage to support the school division's budget, for the short term, and give the board some time to work through the transition to the new provincial funding model.
"Those reserves were built by former boards, and I don't want to touch that money, but what option do we honestly have?" asked Arsenault.
A number of board members expressed reluctance to draw from reserves to meet operating expenses, while allowing they may need to use reserves for facilities projects.
"I don't like it either," said Arsenault. "We have to speak to the minister. We have to let our displeasure be known, but there's a reality here of our staff and our students that we have to support."
He also said, "I think you [the board members] have said it very well, everything is on the table as far as being looked at for budgeting purposes and that we give administration direction to go ahead [with the budget process]."
Director of Education Randy Fox said administration will look for ways to address budget concerns with the least effect on school-based people and students.
"I don't think we want to slash and burn anything."
A big part of the hit in the 2013-14 funding comes in a reduction of transition funding from $4.7 million to $656,412. The division knew that cut was coming eventually, as the transition funding was meant only to help boards deal with changing over to the province's new funding model, under which boards of education no longer have the power to set their own mill rate. But, there had been a small hope it may last a year or more yet while the provincial government gets its model sorted out.
Board member Ron Kowalchuk's reaction to the cut in transition funding was, "So all this time we've been hearing about this transition, but obviously we cannot believe what they tell us, because it's not there."
He said Living Sky doesn't complain enough.
"It's time we did something drastic here so maybe they would listen to us."
Board members Jack Snell and Bob Foreman weren't surprised the transition funding was cut.
"In the last four years," said Snell, "we have seen our surplus grow by $10 million and I think it was hard for the government to say 'we're going to keep giving you transition funding, but each year you put two million into your reserves.'"
Foreman said, "Our reserves have increased drastically in the last few years. When I see that I can't see where we have a right to complain if we are packing that money away."
Despite $4.7 million less in transition funding, the total funding from the ministry is down by only $2.4 million, with just under $63 million to work with compared to $65 million for 2012-13. But without the transition funding last year, the division would have been working with a little over $60 million.
Included in this year's funding is approximately $23.2 million in property tax revenue, as determined by the provincial government, plus $39.6 million in grant money for division expenses as recognized by the province. Another $4.8 million in tuition fees is expected to be paid to the division by the federal government for aboriginal students.
Darroch said administration is just in the process of putting the budget together, looking at the revenue projections for 2013-2014 verses budgeted expenditures for 2012-2013.
"When I look at that we are about two to two and a half million dollars short on a cash basis. Now, being that the transition funding for all intent and purposes is absolutely done, if we were to receive again next year another increase of 2.1 [per cent] of recognition and if that little over two per cent continues next year then obviously we have to look at our expenditures very closely," said Darroch. " We talked about taking money out of reserves to balance the budget until we get to that point."
"No doubt that's what they want us to do," said Kowalchuk.
Board Member Sees Inequity
During discussion of decreasing provincial funding at the March 27 meeting of the Living Sky School Board of Education, board member Rona Pethick of Unity said she sees an inequity among the province's school divisions.
"I don't think we're on an even playing field any more," she said. "I don't know what the answer is but I am concerned about the path we're going down."
The inequity is based around locally determined teacher benefits, extra funding that is negotiated locally between boards and teachers over and above what is in the provincial contract.
"If you remember, when we did our LINC (local implementation negotiation committee) contract, five years ago, we were told then [by the province] to keep it at three per cent, and we did."
She said the same can't be said for other divisions, "because of certain things that were negotiated in those contracts."
She said it wasn't about "us and them," but "the government said they weren't going to fund those [LINC agreements with over three per cent increases] and then they did."
In some cases, it has meant additional staff being hired to meet LINC commitments.
"You think about what it would cost to hire 35 or 40 more teachers to cover prep time. We don't have that option, we're cutting people to address our student teacher ratio. It creates an inequity in this province and I don't think it's fair."
Board members Ron Kowalchuk and Glenn Wouters agreed, saying it needs to be addressed with the Ministry of Education.
Pethick also sees inequity in the funding of capital projects.
"Here again, I don't want to seem like I'm picking on the cities, but you have two new schools going into every new neighbourhood in Saskatoon and Regina. Does that make sense? Those tax dollars are being taken away from divisions like ours."
Living Sky School Division is not in a position to build new schools, she said, referring to the possibility of drawing from reserves to maintain facilities.
"What we have to do is maintain our aging infrastructure. Some of our schools are 60 to 70 years old. That means putting more money into them so they are not falling apart," she said. "We have students who have to learn in the halls and those classrooms and we have teachers who have to teach there. So for me, that's a no-brainer."
Kowalchuk agreed.
"I've been in a school where kids have had to sit with their coats on, where it was warmer outside than it was inside," he said. "That's why we have reserves, to fix the buildings."
Past school boards have argued many times about raising the mill rate to put money in reserves, said Kowalchuk.
"Now we're being penalized," he said.
Pethick concluded, "I'm not so sure talking to the minister will help. The decision's made. We're going to have to make some prudent decisions."
She said she didn't think they had any choice but to go into reserves.
"Our director and staff and us, as a board, we're going to have to make some hard decisions To make sure the students are affected in the least possible way, to me that's number one," said Pethick.
