Three Numbers

On March 22, a letter from Calgary Board of Education Chief Superintendent, Naomi Johnson, was printed in the Calgary Herald. In it, she gently chided the Herald for printing a story about a 19.2 million dollar shortfall saying that it was “not accurate or news”. The $19.2 is not, in fact, a shortfall, but rather a structural deficit (which means that this 2011-2012 school year, the CBE is planning on spending $19.2 million more than it will get in revenues by using reserves). The CBE will need to find $19.2 million in efficiencies in future year’s budgets to eliminate the recurring shortfall.

So, in fact, what should have been reported is that the CBE is projecting a $15 million budget deficit for 2012-2013, but only a shortfall of $8 million, since the recent budget assumptions document presented to trustees are showing:

  • Total revenues of $1,156 million
  • Total expenses of $1,171 million
  • This equals a deficit of $15 million
  • However, with $7 million in reserves
  • The shortfall is $8 million

If you are thinking that this is much better than last year’s $61.7 million shortfall that the CBE was constantly talking about, this is not an accurate comparison. Last year, the $61.7 shortfall was the CBE’s estimate of how much their revenues would be short by should all the services provided by the CBE stay the same, and the CBE did not use any of their reserves. This year, no such comparative has been presented to the public. Instead, the trustees were presented with a budget assumptions report where total expenses  already take into account the sale of the old Education Centre (saving $3 million in leasing costs) and increased efficiencies (to the tune of $9 million), thereby reducing expenses by $12 million. Please note that all numbers presented will be subject to change as the budget is refined. In fact, $1 million from the report that the CBE was planning on collecting from employees in parking fees may have already hit a snag.

So, since the $19.2 million is not news, Chief Superintendent Johnson decided to provided three other numbers that she considered newsworthy. They are three, four and 3.4.

The first refers to the three years for which the Alberta government has provided guaranteed funding (which was already reported). Provincial grants are going up by 1-2% (depending on the grant) this year, and 2% for the following two years. (Many grants are allocated according to student enrolment, so allocations will rise with student population growth, which is why the provincial government will be spending 3.5% more on education this year than last year, despite the grants only increasing by 1-2%).

The second is a four per cent increase to all school-based allocations in the CBE by increasing all RAM (Resource Allocation Method) rates by 4%. Perhaps most confusing about the budget assumptions report was that nowhere was it stated what comparative numbers were being compared to. Were they being compared to the original budget, or the Fall budget update with or without the additional $19.2 million that the provincial government provided in October 2011? From answers provided at the board meeting almost everything in the assumptions report is compared to the Fall update that includes the $19.2 million. The one exception is the RAM increase. If you recall, although trustees voted to distribute the additional funding via RAM in October, the CBE administration decided to distribute it on an equal per-pupil basis rather than increasing all the RAM rates by 1.5%. So, if you watch the video, the administration clarifies that this 4%, in total dollar amounts, is only a 2.5% increase if compared to the Fall update like everything else.

Still, 2.5% is an increase, right? Remember that last year’s RAM increase was 3% and this resulted in the loss of teaching and support staff positions. It depends by how much staffing costs are going up (which no one can talk about as bargaining is still in progress). Last year, when teacher salaries were going up by 4.5%, a RAM increase of 3% was insufficient. Also remember that teachers gaining seniority and moving up the pay grid cost the CBE $8 million last year, or another 1% in RAM. So, after taking into account the grid increases, schools are left with an actual 1.5% increase over the current year to pay for any salary increases (CBE just ratified an agreement with CUPE Local 40 for a 2% increase). So, in fact, schools will not be getting an increase, but they hopefully won’t be losing staff, either. Thus, the 4% “increase” may not be newsworthy, either.

In the budget assumptions report, there is also mention of an increase of 103 FTE (full time equivalent) school-based positions over last year. Although this staffing increase was in the same part of the chart as the 4% RAM increase, the staffing increase is due solely to the 1.41% projected enrolment growth. School based staff is actually being projected to increase by 1.37%, so the increase in RAM rates by 4%, as explained above, does not translate into additional staff. This is due solely to enrolment growth (more students = more provincial funding).

Now, let’s look at the last number 3.4%. According to the report, CBE administration expenses will go down from 3.7% to 3.4%. When Trustee Bowen-Eyre asked for specific examples of how this would be done during the March 20th board meeting, there was talk of more efficient procurement processes and other vague references to constantly looking for ways to find additional savings. The one specific example given was that the CBE has signed a fixed price contract for natural gas that will save the CBE $1 million. It would be surprising if utility costs were included in administration costs, but no other specific examples were given and no follow-up questions were asked. The public will always applaud a decrease in administration expenses, but as ARTICS found out last Spring, trying to get any details about administration expenses is extremely difficult. Without an appropriate level of transparency, this reduction may not credible.

More interesting to parents than these three numbers will be the fees report which will be presented to trustees at the April 3, 2012 meeting. Remember that board meetings will now start at 3pm and will be broadcast on the Internet (after an informal pre-meeting from 2:30-3pm where the public can interact with trustees and the chief superintendent). You can also follow the Twitter hashtag #yycbe for updates.

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