A looming $7.5-million deficit has School District 43 scrambling to make $5 million in cuts to supply budgets, professional development help for teachers and discretionary spending to ward off a financial crisis that could have an impact on Tri-City public school budgets for years to come.
So far, it looks like there will be no staffing cuts but next year's budget will be severely constrained unless expenses can be trimmed from now until the end of June.
And the presidents of the Coquitlam Teachers' Association and CUPE Local 561, which represents SD43 support staff, say they're doubtful the short-term fixes will do the job.
On Tuesday, Teresa Grandinetti and Dave Ginter lambasted trustees for not doing their job and being fiscally accountable to taxpayers.
"That is your responsibility," Ginter, who represents support workers, told trustees, who were mostly silent when they received the news of the massive deficit. Ginter called planned cuts "chump change" that may not stem the bleeding.
"The shortfall is the board's responsibility," CTA president Grandinetti said, adding, "I don't actually believe you are going to get $5 million in savings."
The revelation of the board's financial situation, which had been circulating in the rumour mill for weeks, was provided by superintendent Tom Grant because the district is currently without a secretary treasurer.
(Rick Humphreys resigned effective Jan. 1 but board chair Melissa Hyndes would not confirm whether his departure was related to the financial crisis, saying he left for personal and medical reasons.)
THE PROBLEM
At Tuesday's board of education meeting, Grant confirmed that the district had a drop in enrolment of 223 students at the same time as it budgeted $3 million more for staff than its provincial funding allows. Other factors in the deficit, which leaves the district in dire financial straits, he explained, including the district receiving less income from international education and poor investment revenue, and having to pay hikes in benefits and utility fees.
SD43's current financial circumstances are a sea change from nine months ago, when trustees unanimously passed the richest budget in its history - $270.4 million - doling out extra funds for special needs students, counsellors and program expansions.
Today, trustees are still trying to figure out what happened and how it will impact next year's district operating budget.
According to Grant, the district found out after its student head count in the fall that there were 223 fewer middle and high school students than expected and the district also got $200,000 less in provincial holdback money than was expected for a loss in revenue of $1.7 million.
Compounding the problem, according to Grant, is less money than expected from fees that foreign students pay to attend school here and reduced rental and investment income - another $1.3 million.
The district is also spending $3 million in salaries that are not funded by the Ministry of Education. But Grant said some of the overspending is due to an increase in elementary school students, who require smaller classes, plus program expansion to boost achievement, support special needs and create smaller classes in alternative programs such as CABE (Coquitlam Alternative Basic Education), plus addition of new programs.
Grant will meet with the finance ministry next week to work out a plan, he told the board.
"They will argue we should have made better decisions and they may be right," Grant told the board of education. "We will argue we make decisions to support the learners in this district to retain staff to use our holdback, to use surpluses to fund a district that we thought was important and to support."
(Grant did not return messages left Wednesday and Thursday before The Tri-City News' print deadline.)
HOW IT HAPPENED
Fixing the problem will now require $5 million in cuts, Grant said, and he pledged to cut "stuff not staff" with a lengthy list of trimming in supply budgets and discretionary spending, as well as savings through attrition. Although none of the cuts have been costed for the public, reductions in overtime, draw time and a "drastic" reduction in release time to pay substitutes so teachers can do professional development during school hours are planned.
Teachers will now have to do professional development outside regular school hours, Grant said, acknowledging that this change may affect teachers' ability to be on learning teams that help students. The district will also not replace some positions that have gone unfilled.
While both the CTA and CUPE are skeptical that the cuts will work, there are also many questions as to how the district produced such a large deficit.
Trustees interviewed by The Tri-City News blamed the problem on a "perfect storm" of projections that turned out to be wrong and extra expenses. They noted the district is chronically underfunded and receives the lowest grant per student in the province.
But they also admitted they may not have asked enough or the right questions about financial projections, or were too quick to spend provincial holdback funds, which have been inconsistent at best.
Melissa Hyndes, the board chair and a Port Moody trustee, held out hope the district will receive an infusion of cash in the Feb. 6 provincial budget, and will get the rest of its holdback grant. She also said school finances, which are typically very fluid, could improve before the end of the year - or before Feb. 26 when an amended budget has to be passed.
"The situation may not be as dire as projected at the moment," Hyndes said.
THE RAMIFICATIONS
One problem she identified is that the district didn't get credit for $2 million it spends on smaller classes and special needs support over and above provincial funding and wasn't able to shift those funds into other areas when it received $3.1 million in Learning Improvement Funds.
But she denied that trustees passed a too-rich budget in May with "rose-coloured glasses" and said in the past, SD43's administration has been spot-on with projections and calculations.
Trustees only found out in November that finances weren't as rosy as expected, and staff have been crunching the numbers ever since, trying to sort out all the facts. Hyndes didn't rule out the possibility of running a deficit and paying it back gradually, as Langley's school district has done, if the savings don't pan out.
Such a financial plan will affect the coming budget for 2013/'14. Hyndes said nobody should come to the board with a wish list.
"We are not in a position to give to anyone," she said, "unless a miracle happens."
