So, school district budget time. Again. Actually, that’s misleading, because school district budgets are not budget events at all; they are a 12-month process that begins now and continues past January of the next calendar year.
However, it is now that districts try to estimate how many kids might show up by the critical funding date, Sept. 30, and then cast a projected budget for the next school year. It is student population that, when it has been confirmed by late November or early December, will essentially determine, how much a district will receive in operating funding.
The count has to be accurate, because at $8,000 per kid, 50 latecomers in a 10,000-student population can make a whopping $400,000 difference.
The problem here, the Catch-22 aspect, is that until it has been determined how many kids qualify for what kind of funding — and that sometimes cannot happen until well into October — the majority of staffing commitments, class organizations and teacher transfers have to be done well before that and cannot be reversed, according to most contracts, until January at the earliest.
Why does it take so long to count tens of thousands of kids and determine what kind of funding category each one falls into?
There are almost as many reasons as there are kids who show up late, some for family obligations, others for cultural reasons. All still need to be placed in a classroom for the school year.
Operating funding, once determined, pays for the educational programs, including students with special needs, career preparation, technology, learning resources, library and counselling services, school office supplies and finally the biggie — staffing. Staff compensation and benefits for teaching and non-teaching staff account for 88 per cent of operating expenditures.
But the operating grant also pays for fixed costs, including building and grounds maintenance, heating and utilities, custodial services, education and business administrative services.
It is here that some misunderstanding about school district “surplus” funds can occur.
Let’s consider the operating money a district commits to heating and utilities, as well as building and grounds maintenance.
In a “good” year, for a variety of reasons, including weather, those expenditures might not be as great as projected. That is one way in which a school district can end up with an allowable “reserve” in what is called its local capital account. Good to have some funds set aside, for example, when an outbreak of brainless vandalism could cost a quick $15,000 overnight.
Overall in the province, this surplus reserve is about $100 million or two per cent of the education budget. It is clear that the province expects school districts to retain some emergency reserves, since Section 111(1) of the School Act outlines that these reserves can be allocated to the budget as revenues in order to not have a deficit.
Best-practice guidelines for nonprofit organizations recommend maintaining operating reserves of about three months expenditures. School districts carry nothing like that.
The second type of funding a school district receives is capital funding, either build a new school or substantially renovate an old one, but that’s for another column. There is a firewall between this large project-driven capital funding and the population-driven operating funding.
The bottom line here is that, unlike most businesses and other forms of government right on up to the provincial government, school districts cannot carry over an operating surplus (excluding that small-project emergency local capital funding) from one year to the next.
On the other hand, any attempt to submit an unrepentant deficit budget projection has resulted in boards of education being fired.
Elections for school boards will be held in November. District administrators are hoping for intelligent, well-informed and committed candidates whose reasons for running for trustee don’t include large “P” political baggage, but who are willing to step up and learn to manage, under existing legislation, this complicated and sometimes contradictory budget process in the best interests of providing a good education for thousands of kids.
Best of luck to those brave souls.
Geoff Johnson is a retired superintendent of schools.
