Living Sky School Division is still analyzing what the recent provincial budget means for the division, but it's already clear there will be less money to work with.
The March 19 budget stated there will be $1.8 billion in operating funding going to Saskatchewan's school divisions for the 2014-15 year, an increase of $42 million, but Living Sky will be seeing a net decrease, board members heard at their regular meeting last week.
One of the reasons Living Sky will have less this year is a province-wide "efficiency adjustment" where the ministry has "clawed back" $7.5 million from divisions in the province in "expected efficiencies." Living Sky's share of that adjustment is $277,501.
Another disappointment was the allowance for an inflation factor of only 1.4 per cent when other experts say inflation is sitting at 2 per cent or more.
Although the ministry says it has allowed for a one per cent increase for non-teachers' salaries and .6 per cent for other non-salary costs, says Chief Financial Officer Lonny Darroch, the net effect for Living Sky is a decrease in operating funding of $105,000 from last year.
"This is a concern when we look at what some of our costs are doing," said Darroch. For example, he said, "The price of fuel has gone from $1.1865 in September 2013 to $1.365 per litre in February, a 15 per cent increase."
A positive note, said Darroch, was an increase in the PMR (preventative maintenance and renewal) funding of $188, 478 to $870,051.
The division has also been allowed consolidation assistance funding of $271,501 to offset where the division has lost in other budget items due to the closure of Major School, however the efficiency adjust more than negates that amount. That adjustment will last only three years, with a decrease each year.
The total recognized funding grant comes to $39,056,488, although that will increase once a new collective bargaining agreement is met with the province's teachers.
On top of that is a $656,412 transition adjustment amount, meant to help divisions adjust to the new funding formula. The government had said there would be a two to four year transition adjustment when it removed the ability of division's to set their own taxes. In year one, Living Sky received $4.7 million, last year it received only $656,412 and this year's amount will stay the same.
Revenues are expected to be $23.6 million in property taxes plus $4.3 million in tuition fees that come from the federal government.
The efficient adjustment was a disappointment to the board and they plan to let the deputy minister know. Dan Florizone is a proponent of the lean model, having implemented it in the health care system when he was deputy minister of health.
Glenn Wouters, a Living Sky board member who is also a member of the Prairie North Regional Health Authority board, said money has been saved in health care using the lean model, and that the school division can find ways of saving money by thinking outside the box, but it's more difficult to apply it to education than health.
"I can give you 20 examples of where it can be done in health," said Wouters, "but I can hardly come up with anything in education."
He said education is different from health.
"I know people would say that's an excuse, but I don't know where you're going to get those kinds of efficiencies."
Director of Education Randy Fox said looking for efficiencies is something the school division does anyway, and with one of the outcomes of the recently adopted education sector strategic plan being a financial one, department heads will be looking for ways to save money.
However, he said his concern is that, even though they find efficiencies, the savings will still get clawed back.
He said his understanding of the model to have front line workers suggesting ways to improve production was at one time about efficiency and operation, however it's seemed to be more about money in the last few months.
Hospitals and assembly lines are better examples of where the lean model can apply, he said, but it doesn't apply quite as easily as that to education.
Trustee Garth Link said he sees efficiencies boiling down to possible staff cuts.
"If you look at the reality of our budget, you can narrow things down to three chief costs," he said. "Right at the top of that list is instruction. This is why I'm asking if we are going to the lean model in health, are we talking about job losses? That's just the reality that's going to come down the pike, and if we are looking at that in education, that's at the top of the chopping block. I don't see any way around that."
While Wouters said the front line workers who have been taking part in projects like the design of a new Saskatchewan Hospital are told up front their jobs are not in danger, he admitted there are efficiencies that will, over time, result in a reduction in staff.
"The health care system has seen a reduction in staff," he said.
Trustee Rona Pethick said there are major efficiencies occurring right now within the education system, such as joint insurance through the Saskatchewan School Boards Association, "but I'm still upset about the clawback."
Board chair Ken Arsenault said the Ministry of Education itself needs to be more efficient.
"For them to make ongoing demands and reporting and duplication and on and on, it has to end," he said. "If they are talking about efficiencies and lean, it's got to roost with them as well."
Arsenault said, "This is going to open a lot larger discussion. I think $7.5 million is going to be a big thorn in the ministry's side for a while."
