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Surpluses help pay down SD43 debt

Higher enrolment, conservative forecasting helps school district deal with past issues
School budget
Surpluses this year will help School District 43 pay down its debt.

It's not out of the woods yet but, thanks to a combination of conservative budget forecasting and higher than expected student enrolment, School District 43 is paying off its debt.

The district's $10-million operating deficit from four years ago will be down to $2.8 million by June with the application of an end-of-year surplus of $1.45 million. As well, a $25-million unfunded future employee benefit liability will be cut by $500,000 using unspent employee benefit money.

Putting surpluses towards debt was part of an amended budget of $328.4 million approved by the board of education Tuesday evening.

But Port Moody trustees Lisa Park and Keith Watkins objected to using the employee benefit surplus to pay off the unfunded future benefit liability, which was incurred in 2004 when accounting changes were made to comply with generally accepted accounting principles.

AMENDED BUDGET APPROVED

They said the money should be put towards the 2016/’17 budget instead. "I don't support the use of it [to pay down the unfunded liability]," Watkins said.
"If we pay the debt back, will they increase the funding?" Park asked.

The PoMo trustees were alone in their opposition to the move, with the remaining trustees saying that setting money aside to cover the unfunded liability is a school district obligation and not doing so would put the district's financial reputation at risk.

"I think we should get our financial house in order," said Port Coquitlam Trustee Michael Thomas. "The sooner we are able to get the burden off our back, the sooner we can put dollars back into the classroom.
"Ignoring the advice of auditors for many years is, in my opinion, what got the district into trouble in the first place."

"[The Ministry of Finance] will see we are sincere about paying back our debt," said board chair and PoCo Trustee Judy Shirra.

"We have to play ball," Coquitlam Trustee Barb Hobson said.

"We need to show we are advocates by paying down the debt and advocating for more money because we are underfunded," said Carol Cahoon, another Coquitlam trustee.

PAY DOWN DEBT RAPIDLY

"We are very much at risk of being fiscally irresponsible," Coquitlam Trustee Chuck Denison said, while the fourth Coquitlam trustee, Diane Sowden, said, "It's a debt and we've got to pay back our debts."

Anmore/Belcarra Trustee Kerri Palmer Isaak was also in favour of putting the surplus employee benefit towards the unfunded liability, saying, "I'm in support of paying down the debt rapidly."

According to SD43 figures, district revenue is up this year by $11.5 million, owing to more students showing up than were predicted along with more fee-paying foreign students adding to the revenue.

On the expense side, $6.1 million more in salaries was spent because of the increase in students plus $1.2 million in benefits and $2.9 million in additional services and supplies.

In April, SD43 trustees will deliberate and pass a budget for the 2016/’17 school year.