The budgetary challenges for the Chinook School Division is set to continue in 2020-21 and it will again have to use reserve funds to make up for a shortfall in funding received from the Ministry of Education.
The budget for the 2020-21 school year was presented during a regular Chinook School Division board meeting, June 8.
The board authorized the submission of the budget estimates to the Ministry of Education for final approval.
Chinook School Division Chief Financial Officer Rod Quintin provided details about the budget during a telephone interview with the Prairie Post, June 11. The 2020-21 budget will allow the school division to focus on key priorities of student engagement, graduation rates, and writing strategies.
“The challenge for us is that we continue to have to draw on our reserves in order to do that,” he said. “So we're going to be looking at about $1.7 million draw of reserves to balance the cash budget.”
The use of reserves to balance the budget is a similar approach to the one followed by the school division in recent years.
“It's fairly consistent with our prior years budgeting,” he said. “Probably the one thing that stands out is that we didn't undertake any significant cost cutting measures, because we're probably at a place now where we're operating as efficiently as we can.”
The school division took steps during the past five years to reduce expenditure wherever possible through reviews of programs, central office, personnel and supports.
The board has continued to emphasize the need to avoid a reduction in teaching staff in schools. According to Quintin this budget will not result in any intentional staff reductions.
“There may be the odd case where enrolment changes in a school and the formula would indicate that would be a reduction in staff, but other than that, there's nothing intentional in terms of reduction of staff,” he said.
The operational funding allocation from the Ministry of Education to the Chinook School Division for 2020-21 increased by 0.4 per cent over the previous year. The total projected expenditure in the school division’s budget will increase by 0.8 per cent or around $636,000.
“Our operating funding is still basically flatlined,” he said. “It's just the way the funding mechanism works. If our enrolment doesn't increase, the operating funding tends not to increase either. There's a little bit of money in there for inflationary costs, but the inflationary costs are usually more than the money that we get to cover them.”
The school division’s projected budget deficit will be $4.6 million and reserve funds will be used to balance the cash budget. This ongoing draw on reserves will have an impact on the investment revenue generated for the reserve fund in future years.
“It's not feasible and at some point that will have to change,” he said about the use of reserve funds. “We've got a few years worth of available funds to draw on, but it is ultimately going to need to be addressed. So I think it depends a lot on the available resources in the province to do that, but as of now, we can't find any significant ways to reduce our cost to get to balance without really impairing the education opportunities for the students.”
Staff salaries will be the most significant cost driver in this budget. The instruction budget will increase by 1.2 per cent in 2020-21 compared to 0.9 per cent in the 2019-20 budget due to the increase in staff salaries. The instructional expenditures include the cost of the anticipated teacher salary increase, which is expected to be $683,000.
“We haven't actually had salary increases for support staff and teachers for a year or two,” he said. “So those salary increases are overdue. The teacher agreement is still not ratified that we know of, but we do have it included in the budget based on the tentative agreement. The support staff salaries have all been determined through various collective bargaining agreements that we have with unions and then we have made an adjustment for our non-union support staff somewhat in line with inflation.”
The budget includes $250,000 for bus replacement purchases, but the school division will benefit from a reduced use of vehicles during the COVID-19 pandemic.
“The buses didn't operate basically from the middle of March on,” he said. “We don't have to spend as much money on bus replacement, because we haven't had the wear and tear. So the allocation for bus replacement is significantly less this year than it has been in the past, simply because we don't need to replace as many buses.”
The administration budget was reduced by 5.2 per cent in the 2019-20 budget, but it will increase by 4.2 per cent or $132,000 in the 2020-21 budget. The main reason for this increase is a reclassification of salaries from instructional to administrative cost.
“We had a few administrative assistant positions that were reclassified from instructional budget to administrative budget,” he said. “About $110,000 of that were previously recorded in the instructional budget. That has been moved, and then we had a small salary increase. It's consistent with all of the other scope people of 1.7 per cent and then a slight increase in travel, because of the actual cost of travel.”
The governance budget was reduced by 2.5 per cent in 2019-20, but it will receive an increased allocation of 20.9 per cent in the 2020-21 budget. This is necessary to cover the expected costs for the upcoming board election in November 2020.
“We set aside $40,000 of cash for that, anticipating that would be roughly the cost,” he said. “It becomes a fairly high percentage in a small budget, but that's the number we've set aside for the last couple of elections. It may be slightly more than that, it may be slightly less. … We don't really know what the cost is going to be until the actual election, because the real money starts to flow when there are votes. If there are no votes, it doesn't cost as much.”
The Chinook School Division will be facing an ongoing budgetary challenge every year due to the Ministry of Education’s current funding formula, which considers enrolment as the main factor in operational funding allocations.
The rural nature of this school division means that it is facing high fixed costs, even if enrolment remains similar or decreases slightly from year to year.
“It's very specific to the rural school divisions,” he said. “We can't do a lot to reduce our footprint around the number of schools we operate and the number of bus routes we operate, just because of our dispersion. We have students all over the place.”
Quintin provided examples of what this means in practice for the Chinook School Division with regard to the operation of bus routes and school facilities.
“A bus route costs the same amount of money regardless of the number of students on it,” he said. “So if you have one or two students, you get less funding to operate the bus route, but the cost is the same. A building costs the same amount to heat and clean, regardless of the number of students in it. So if you have less students in a building, your fixed costs is relatively the same or even increasing a bit, but your revenue to pay for it is not.”
As a result of this situation, the Chinook School Division will have no choice but to continue with the stop gap measure of annual reserve withdrawals until there is a sufficient increase in provincial funding. The alternative will be budgetary cuts that can have an impact on student learning.
“It’s just a matter of when, and that's really been a discussion for a number of years,” he said. “How long will the reserves last. We still have a few years, for sure, but every time you draw from reserves you also draw the ability to generate revenue from reserves, whether it would be interest or investments or something like that. So it does have a compound effect.”