Kevin Berger – Leader Staff
While much could change with the release of the provincial budget in the fall, Pembina Hills Public Schools (PHPS) is currently anticipating an operating deficit of $2.272 million in the 2019-2020 school year, largely due to a decrease in enrolment and the absence of several grants.
Pembina Hills trustees passed a motion during their June 26 meeting in Barrhead approving the division’s 2019-2020 operating budget, with projected revenues totaling $59,862,237 and projected expenses equaling $62,135,116. The 2019-2020 budget for the Alberta Distance Learning Centre (ADLC) was passed in a separate motion.
Secretary-treasurer Tracy Meunier said it was the first time in her 35 years of working for PHPS that she had to present a division budget in the absence of a provincial budget being passed in the spring.
On the revenue side, PHPS expects to receive $54.32 million from Alberta Education, which accounts for 94 per cent of all its funding. Another $3.78 million will come from fees and services, federal grants and other provincial grants, and investment income.
One of the biggest hits in revenue that PHPS will suffer this year is due to an anticipated decline in enrolment. Excluding Vista Virtual School’s student population, the division expects to see a 2.02 per cent decline in Kindergarten enrolment, which equals about eight students, and a 1.55 per cent decline in Grade 1-12 enrolment, or 53 students in total.
“Therefore, our revenue is projected to drop a further $284,139,” said Meunier.
This is an unfortunate reversal from 2018-2019, which saw Kindergarten enrolment actually increase by 42 students. (Grade 1-12 enrolment still fell by 40 students this year, however.)
While the budget is not yet out, the province nonetheless asked school divisions to articulate assumptions about certain funding sources. For instance, PHPS does not expect to receive the $843,606 previously given to the division through the Classroom Improvement Fund (CIF).
The CIF was a one-time grant negotiated as part of a collective agreement with teachers that the division used to support special needs students who are identified as being in the higher tiers of the Response to Intervention (RTI) model.
Pembina Hills has already opted to draw $307,422 from its Co-op Pool operating reserve — equivalent to 40 per cent of the CIF — to continue to fund the additional programs that the CIF grant provided.
The division also anticipates that the Nutrition Grant will be discontinued in the coming school year. That grant equaled $166,000, which the division distributed to all of its community schools for breakfast and lunch programs.
If the province does continue the Nutrition Grant, then schools can adjust their budgets accordingly. However, Meunier indicated it would be “too risky” to bank on the funding and then learn the grant was being cut off.
And even if the grant is eliminated, that doesn’t mean the death of all school nutrition programs in PHPS. “Many of our community schools have over the years set up different breakfast programs and lunch programs with (donations from) their communities,” Meunier noted.
While some grants are expected to end, the division does anticipate that the province will continue to provide a School Fee Reduction Grant of $405,651.
Minister of Education Adriana LaGrange announced in early June the new government will continue the NDP’s policy of prohibiting school fees, and so schools will be unable to charge for instructional materials like textbooks and paper.
However, LaGrange has not made it clear if the province will continue the School Fee Reduction Grant that the NDP gave in lieu of the revenue normally generated through school fees.
If Pembina Hills is wrong and the province decides not to provide that grant, Meunier said that schools will either have to absorb those costs or create new school fees to replace that lost revenue.
Finally, PHPS is also assuming that there will be a zero per cent salary increase for teachers in the coming year, but if one occurs, the province will fund it.
Breaking down the deficit
On the expenses side, PHPS expects to spend $48.25 million on salaries, wages and benefit, which totals 78 per cent of the budget.
An additional $11.46 million will be spent on services, contracts and supplies, while the amortization of capital assets (depreciation of buses, buildings, etc.) is included as a $2.42 million expense.
The lion’s share of the $2.272 million operating deficit will be borne in the Instruction portion of the budget, which will have a $2.193 million deficit.
The transportation department is expecting a balanced budget, due in part to a decrease in fuel prices and the elimination of the carbon levy.
The facilities department is also anticipating a balanced budget, while board and system administration is projecting a deficit of $79,229 in the coming year.
Meunier acknowledged that a $2.272 million deficit is quite a change from the 2018-2019 operating deficit of $1.03 million.
“What happened between 2018-2019 and 2019-2020? How did we go from a $1 million deficit to $2.2 million?”
She then explained that a portion of that gap represents an additional $321,000 expense that is being created as a contingency, which will be spent if schools require it. There will also be a budgeted deficit of $381,331 for Vista Virtual School in 2019-2020.
However, the biggest chunk — a total of $497,206 — is money that is being pulled out of a Vista Virtual continency operating reserve to shore up a shortfall in inclusive education funding, the money used to support the students with the highest needs as identified under the RTI model.
In fact, with the elimination of the CIF, Meunier said that shortfall in inclusive education funding is anticipated to grow to $2.216 million this coming year.
“In summary, if the province were to fund inclusive education according to our need, we wouldn’t be running a deficit,” she said.
Meunier said this is not a problem unique to PHPS; earlier this year, the Alberta School Boards Association reported that 79 per cent of school divisions were expecting a shortfall in inclusive education.
“We’re one of the 79 per cent of boards that were reporting a shortfall,” she said. “At least we have the reserves to weather the storm for one more year. Past that, we’re not going to have the reserves to do that.”
As a rule, school jurisdictions are not allowed to have operating deficits without having sufficient funds in reserves to cover it off, Meunier said.
Drawing the needed $2.272 million from reserves, however, will decrease the division’s operating reserves from $5.17 million to a projected $2.82 million.
That’s less than five per cent of the division’s operating expenses. “We’ve never been below five per cent,” Meunier said.
If the province does not increase Pembina Hills’ funding beyond what has already been anticipated, Meunier said the board will need to start planning this fall for major changes in the 2020-2021 school year.
That will also be necessary if the province announces a surprise cut in education funding. “I would hope that the provincial government would not do that, because it would be irresponsible to do that halfway through a school year,” she said.
