What’s good for our students? Operating funds that are stable, adequate and predictable, not last-minute, one-time money that depletes our capital assets.
Yesterday our VSB Chair reported that at a private board meeting immediately preceding the public board meeting a majority of trustees rejected the Minister of Education’s proposal to address $5.6 million of our $21.8 million 2016/17 budget shortfall.
The proposal was that the VSB could use $5.6 million from selling Kingsgate Mall in 2016/17 to reduce the budget shortfall from $21.8 million to $16.2 million, and that if the sale does not happen in the 2016/17 school year the Ministry would guarantee this amount in exchange for a small ownership share in the mall.
Why am I pleased the VSB rejected the Minister’s proposal?
Selling capital assets is not a good way to fund ongoing operating costs. The Kingsgate Mall currently generates $750,000 per year in lease revenue; over 10 years that is $7.5 million and the underlying capital asset remains. If the Minister’s proposal had been to use $5.6 million this year with repayment from lease revenue that would have been a different question.
The 2016/17 budget shortfall is $21.8 million and injecting $5.6 million would address the most severe, level 3 and 4 cuts, for that year. However looking forward one year to 2017/18 the estimated shortfall is about $14 million and even if all 12 schools on the potential closure list were closed, cutting costs by about $8 million, the shortfall would be about $6 million. With having to fund $5.6 million costs again the total shortfall would be about $12 million – while one-time extra funding would be good that year it just pushes the funding crisis to the next year while depleting our capital assets.
In addition this proposal came on the last possible day in our budget process. The balanced budget with $21.8 million in cuts has already been implemented by the Superintendent as he has the responsibility to ensure our schools are ready for September and that our district does not incur any financial liability. Many staff positions have been eliminated and the Minister was well aware that our collective agreements require staffing be set at the start of June. Changing the budget requires new proposals and board approval – as this would now happen in September there would be a significant mid-term adjustment to teachers and support staff.
And finally, as a trustee I take seriously our board’s stewardship of our public assets, our lands and buildings. During my time as trustee I want to maintain these public assets beyond any election cycle so that future trustees can better provide for future students. Selling land and using the proceeds to fund operating costs during my term would worsen our district’s long-term financial stability and sustainability.
I believe this board has worked hard for the benefit of our students in trying to achieve long-term financial stability and sustainability.
We are considering many of the recommendations in the EY Special Advisor’s Report and implementing the appropriate ones.
We have prepared a Long Range Facilities Plan and unanimously asked staff to prepare a list of schools for potential closure.
We have the framework for a new five-year Strategic Plan.
We considered the 2016/17 budget proposals and could not accept them as the cuts are too severe for our students. I believe voting not to accept a balanced budget will be better for public education in the long-term. Maybe our vote was a factor in the Minister’s decision to reverse some of the “administrative” cuts across the province.
We considered the Minister’s proposal to spend $5.6 million our own capital money on operating costs and decided this would not be in the best interests of our students.
Our board will not submit a balanced budget by the end June and so I wait for the Minister’s response.
Ministry of Education news release: https://news.gov.bc.ca/releases/2016EDUC0063-001189