School District 43 will run a $2.5-million deficit at the end of the year if it has to rather than cut staff or slash programs mid-year, says the chair of the board of education.
Melissa Hyndes said the district is required to submit an amended balanced budget on Feb. 26 for the current year but the district is facing a $7.5-million deficit and is making $5 million in non-staff cuts to whittle it down.
The remaining shortfall, possibly as much as $2.5 million, will be carried over in future years as other cash-strapped school districts have done, Hyndes said.
"We feel it's important not to make salary and benefit cuts in mid-year," said Hyndes, a Port Moody trustee. "I would rather continue to provide what we said we would provide for the education of students this year."
She said the board was assured when it took its financial woes to the Ministry of Finance in January that it will be able to carry a deficit because of its record of fiscal responsibility over the years.
"Because we've been proactive, knowing we are possibly going to end up in a deficit position, they've indicated there is a payment plan to pay that over time," Hyndes said.
In the meantime, she said, the district is well on its way to achieving its $5 million cost-cutting targets by slashing supply budgets, release time for substitute teachers, discretionary spending and savings through attrition.
DIFFICULT DECISIONS
The deficit-reduction plan was introduced at the board's last meeting, Jan. 15, when district officials revealed revenue and expense projections were out by as much as $7.5 million.
The problem was caused by a combination of enrolment miscalculations - numbers were out by 223 students, resulting in fewer dollars coming from the ministry - and more staff in classrooms than were funded, plus over-projections for international education revenue, rental and investment income, and higher benefit, utility and other costs.
Since then, the district has hired retired Okanagan-Skaha secretary treasurer Frank Regehr to stick-handle its finances until someone can be found to fill the post that was vacated when Rick Humphrey resigned, citing personal and medical reasons.
As well, the district was informed it must submit a balanced budget on Feb. 26, which assistant secretary treasurer Chris Nicolls said will contain adjustments and changes, to reflect the deficit-reduction plan.
"It's really getting down into that kind of detail to try to put forward as accurate a budget as possible," Nicolls said.
While the district has taken pains to describe its current financial troubles, what's less clear is exactly how the miscalculations came about and how it plans to cut costs.
At Tuesday's board of education meeting, trustees didn't talk much about how the cuts would be made or what the impacts would be, nor did they take a vote on the plan, as they do with with the overall budget. Further, it wasn't clear how as much as $2.5 million would still have to be made up with a payback plan over time.
Without giving details, Hyndes said the district is well on its way to achieving its budget-cutting targets and she's hopeful new revenue may be forthcoming in the province's Feb. 19 budget. She said the district will do everything it can to meet its targets to avoid cutting staff.
But next year is likely to be a different story. Whatever the final deficit number is in June will have to be paid back, likely over time, starting with the 2013/2014 school year.
"Unfortunately, with the scenario we are faced with, I can not safely say salary and benefits will not be cut next year," Hyndes confirmed.
In the meantime, Hyndes said, the cash-strapped district has a few more weeks to get an amended balanced budget ready for the Feb. 26 board meeting, as required by the School Act.
But she noted budgets are fluid, meaning the district won't be in a legal deficit position until the end of the year, when the books are closed and audited.
"In two, three, four months, we may find some additional savings. This is what we would hope and we hope we would be able to reflect those and, in a perfect world, we'd find $2.5 million in savings so we don't have any deficit."
REACTION
Nothing has been heard from the District Parent Advisory Council on SD43's budget problems but both the Coquitlam Teachers' Association (CTA) and the CUPE local representing district support staff voiced concerns about cuts at two recent board meetings. Neither expressed confidence that the package of cuts proposed would suffice to reduce the deficit while teachers are concerned substitute teachers will bear the brunt.
CTA representative Charlie King said despite best efforts, the cuts will still affect staff and kids, and he suggested the district look at cutting management staff, such as positions in facilities and finances, which he said have increased.
"I would ask you to consider whether these are the right priorities," King said of the current budget cuts.
CUPE Local 561 president Dave Ginter said support workers are worried about the deficit and its impact in future years, and he said the district should cut overtime costs and look at how it handles grievances because it spends too much on arbitration costs.
"Having to deal with paying back the deficit will provide no opportunity for new programs, services or needed positions," Ginter warned.
Port Coquitlam Trustee Judy Shirra has asked for ongoing updates about the board's financial situation but there are only two more meetings before spring break, after which the board will begin deliberations on next year's budget.
