The Pembina Hills School Division is now expecting to end the 2019-2020 school year with an operating deficit of about $1.5 million, which is about $700,000 less than the division expected following the release of the provincial budget in the fall.
That’s according to the financial statements for the nine-month period beginning Sept. 1, 2019 and ending May 31, 2020, which Pembina Hills trustees reviewed during their June 24 board meeting.
Originally, Pembina Hills had gone into the 2019-2020 school year with an operating budget that forecasted a shortfall of $2.272 million. However, the budget was actually balanced because the division opted to use reserve funds to cover the shortfall.
It should be noted this was a unique situation for Pembina Hills and many other school divisions, as they had to develop an operating budget for the coming school year without a provincial 2020 Budget being passed in the spring.
Pembina Hills’ projected deficit was adjusted in January to $2,025,808. Notably, the province had eliminated several grants in the fall budget; while the blow was softened with a one-time transition grant of $2.087 million, the division ended up receiving about $832,899 less in provincial funding.
Compounding Pembina Hills’ woes was an unanticipated 164 per cent hike in insurance premiums, which cost the division more than $600,000. (Pembina Hills has since switched insurance providers in order to avoid a similar hike in the future.)
To cope, the board had approved a number of cost-cutting measures, such as eliminating out-of-district professional development and selling a rental property in Swan Hills. The projected impact of these measures was $300,000, which is why the deficit was re-adjusted to $2.02 million.
According to the financial statements reviewed last week, however, Pembina Hills currently has an operating surplus of $324,000, with year-to-date revenue totaling $43.649 million and year-to-date expenses totaling $43.325 million.
Secretary-treasurer Tracy Leigh noted that that expenditures occur in June and August at individual schools to prepare for the coming year. However, even with these additional expenditures, Pembina Hills is currently on track to lower its projected deficit from $2.2 million to $1.5 million.
So what changed between January and June? Leigh said the division achieved approximately $400,000 in savings because of the school shutdown that occurred in March.
Despite the province clawing back $1.1 million in funding – which was accounted for within the transportation budget and individual school budgets — Pembina Hills saved money from temporarily laying off about 270 support staff.
Leigh said another $300,000 in contingency funding was also put into instruction following the release of the provincial budget.
As of May 31, the instruction budget currently has a deficit of $1.72 million, while operations and maintenance has a surplus of $1.937 million.
The transportation department has a year-to-date surplus of $230,880 as of the end of May, while board and system administration is experiencing a year-to-date deficit of $123,099 due to staff turnover.
School budgets
Barrhead Composite High School is currently in the best shape within Pembina Hills with a surplus of $260,910 as of May 31, followed by Westlock Elementary School with a year-to-date surplus of $257,837.
Notably, Westlock Elementary opened the year with a $144,565 deficit in operating reserves, but because their deficit is currently at just under $40,000, “I’m projecting that they will be able to cover off that deficit with this year’s surplus,” Leigh said.
Busby School with a year-to-date surplus of $107,690, followed by Swan Hills with a year-to-date surplus of $90,432. (Notably, Swan Hills opened the year with a $32,557 deficit in operating reserves.)
Barrhead Elementary School also has a year-to-date surplus of $39,607, while Neerlandia Public Christian School has a surplus of $37,976. Eleanor Hall School in Clyde has a surplus of $12,576.
Leigh made special note of R.F. Staples School, which currently has a deficit of $39,629. She noted the school began the year with a reserve balance surplus of $370,000 and planned on drawing out $309,496, but with the deficit coming in under $40,000, it’s anticipated R.F. Staples will not need to draw that much from reserves.
She also pointed out that Fort Assiniboine School began the year with a $72,788 deficit in operating reserves and is currently showing a surplus of $8,701.
Leigh said Pembina Hills’ Administrative Procedure 30-21 requires schools with a negative reserve balance to develop a plan to eliminate accumulated debt over two years.
As such, senior administration will be working with Fort Assiniboine’s principal to eliminate the school’s debt.
Supt. Dave Garbutt commented that he had been looking at Fort Assiniboine’s timetables and staffing requirements. Though he needed to do more analysis, he indicated that he believed Fort Assiniboine was not receiving sufficient money under the allocation formula.
“We’ve cut pretty much all we can up there,” he said.
