With a new provincially directed financial regime in place to provide funds for Saskatchewan's 13 school divisions, Â鶹ÊÓƵ East Cornerstone School Division trustees find themselves in a potentially tight corner.
Having to find up to $2.6 million in trimmings from a $100 million budget will be no mean feat since several sectors within the division have already made department cuts, said Lionel Diederichs, superintendent of finance and administration.
Diederichs was one of three administrative personnel members to make a presentation to the board during their May 20 business session that was held in Wawota's Parkland School.
Diederichs provided the trustees with a draft of the fiscal 2010-11 operating plan and budget, highlighting the areas he felt the trustees could immediately focus on during the first run through the numbers.
He said a new amortization model is now in place which means that the budget indicates a healthy $5 million surplus, but, he cautioned, that is a surplus that has to be spent on already identified capital projects.
"We have directions from the education minister that we can't spend more than we have," Diederichs said, directing the trustees to four areas of a budget plan that was about 50 pages.
He pointed out that in some areas there is "still no clear direction from the ministry," so he could only surmise certain things in some sectors.
At this point in the budgeting process, the financial director said "we have more cash going out than what is coming in by $2.6 million."
School boards can no longer make up financial shortfalls by going to the property taxpayer for mill rate increases since those levels are now established by the provincial government.
He said large surpluses are required to meet the costs associated with major capital projects such as the finishing of the Oxbow School and the upcoming major addition and renovation to Weyburn Comprehensive School over the next few years.
Those will be on top of lesser capital items such as roof repairs or replacements that will continue to be a part of annual budgets.
"We have to spend $2.6 million less. That's the bottom line," Diederichs told chairwoman Carol Flynn and the board members.
He suggested that the trustees could look at four options, or combinations thereof, to address the shortfall. He said taking $600,000 from capital projects and another $2 million from the operating budget was one he suggested they seriously consider.
"This is our first cut at rationalizing," he told them.
"The advice I would offer at this point is to be prudent and leave a cushion for the future because we don't know what the ministry might give us next year, or it might send us in a different direction," he said, noting that Cornerstone had managed to end each of the previous three years with surpluses and that a 10 to 15 per cent surplus is what is generally recommended to accommodate contingencies.
Weyburn trustees Len Williams and Bryan Wilson raised the concern of prudent management coming back to bite the board. They said that since the province is now funding all school divisions, proper financial management could work against the local division.
"We toe the line, but if others don't, then they get bailed out and we pay the price penalized for being efficient," said Wilson.
"It's always a game of trade-offs," said Diederichs.
"Cuts mean to me that some school doors won't open at night or maintenance might not be kept up," said Williams.
The board noted that Cornerstone's administrative expenses have gradually decreased over the past three years, moving from $841,000 to around $795,000, so the financial tightness wasn't being caused by miniature empire building at the administrative levels.
They did note that travel costs would probably increase by as much as $500,000 and plant operations in the 39 schools could increase as much as $3 million and these were costs that would be difficult to cut back on to any major degree.
With total student enrolment now above 7,600, there would be issues such as teacher numbers to contend with along with non-teacher staffing issues.
"With these trade-offs, I know we took some money from maintenance before; maybe we have to keep technology costs down, or find ways to keep transportation costs down this time," said Williams.
All trustees agreed the best way to attack the problem would be to assess the major areas in the budget first and then go after the detailed items and trade-offs to find $2 million in operating cuts.
"Some sectors have already cut to the bare bones, others not so much," said Diederichs, hinting that some departments could come back for the second budget draft with sharper pencils. He added that he was seeking some philosophic direction from the trustees regarding the cuts before bringing the next budget draft to the table and a closer, more scrutinizing look at the details.
After some further discussion, the trustees generally agreed that the proposed $600,000 cuts from capital projects and $2 million from operations would be the preferred avenues to explore.
