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June 3, 2013 - Committee of the Whole Board (Budget) Meeting
Committee of the Whole Board (Budget) Meeting
Limestone District School Board
June 3, 2013

A Committee of the Whole Board (Budget) Meeting of the Limestone District School Board was held in the Barry C. O’Connor Board Room at the Limestone Education Centre, 220~Portsmouth Avenue, Kingston, on Monday, June 3, 2013, at 6:00 p.m.                                 
Present Trustees:
L. French, Vice-Chair
G. Beavis
H. Brown
H. Chadwick
E. Crawford     
A. Goodfellow
D. Jackson
B. Milligan, Student Trustee
P. Murray
S. Ruttan
Present Staff:
M. Baumann, Manager of Financial Services
K. Burra, Supervisor of Safe and Caring Schools and Assistant to the Director
J. Douglas, Communications Officer
D. Fowler, Manager of Facility Services
B. Fraser-Stiff, Superintendent of Education
T. Giles, Supervising Principal
R. Holmes, Supervising Principal
B. Hunter, Director of Education
D. Kirkpatrick, Recording Secretary
A. Labrie, Superintendent of Human Resources
N. Marsh, Superintendent of Education
A. McDonnell, Supervising Principal
R. Richard, Superintendent of Business
        The meeting was chaired by Vice-Chair French.  She called the meeting to order, advising that regrets were received from Student Trustee Yun.

APPROVAL OF AGENDA

        MOVED BY Trustee Jackson, seconded by Trustee Goodfellow, that the agenda, as distributed, be approved.–Carried

DECLARATION OF CONFLICT OF INTEREST

        No Trustee declared a conflict of interest.

REVIEW OF PRELIMINARY 2013-2014  EXPENDITURE BUDGET

        Manager Baumann stated that this budget is not yet presented on a full PSAB basis (i.e. it excludes school generated funds estimated at $6.5 million and Charitable Trust estimated at $180,000).  She said that it also does not include capital.  She said that these components will be incorporated into the information being presented next week.  She said that this evening’s presentation has been prepared consistent with previous years’ presentations for ease of comparison and understandability.

        Manager Baumann reported that the preliminary 2013-2014 budget is presented alongside the 2012-2013 original and revised estimates budgets for comparison purposes.  She indicted that commentary will be provided throughout the presentation to articulate significant areas of variance and reasons for change.  She said that no changes have been made to the revenue or enrolment projections presented last week.

        Manager Baumann noted the following enrolment forecast:




2013-2014 Budget

Revised Estimates
2012-2013

Original 2012-2013 Budget
Enrolment
Average Daily Enrolment
    Elementary
    Full-Day JK/SK EPO funded
    Secondary
    Secondary – High Credit
    Adult, Cont Ed, Summer School
     
11,914
             900                   6,698
     89
   645

11,956
              571
           7,223
                  0
    647

11,950
               562
            7,150
                   0                           581


        Manager Baumann indicated that the above-noted enrolment forecast includes 11 First Nations secondary pupils and 10 elementary and 103 secondary International Visa pupils.  She advised that full-day learning pupils are funded 0.5 FTE in the regular GSNs (in elementary enrolment above) and 0.5 FTE through EPO grants (in full-day JK/SK above).  She indicated that with regard to adult enrolment, there are 440 ADE pupils (406 in 2012-2013 budget); Continuing Education, there are 30 ADE pupils (34 in 2012-2013 budget); and Summer School, there are 175 ADE pupils (141 in 2012-2013 budget).

Manager Baumann indicated that elementary enrolment is projected to decrease by 36 ADE pupils in comparison to the original 2012-2013 budget.  She said that, however, when incorporating FDK, elementary enrolment is projected to increase to 302 ADE in comparison to the original 2012-2013 budget.

        Manager Baumann advised that secondary enrolment is projected to decrease by 363 ADE pupils, in comparison to the original 2012-2013 budget, and there is a movement of 89 ADE pupils in the new high credit day school ADE category.  She indicated that the portion of a pupil’s enrolment over the 34-credit threshold is now included in the new high credit day school ADE category which is funded at the Continuing Education rate.  

Manager Bauman reported that Adult, Continuing Education and Summer School enrolment is projected to increase by 64 ADE in comparison to the original 2012-2013 budget.  

        Manager Baumann stated that the Operating GSN allocations of $210.4 million vs. $214.4 million at original budget for 2012-2013 shows a decrease of $4 million or 1.89%.

        Manager Baumann reviewed the Compensation information, as follows:

  • $189.4 milion vs. $187.5 million at original budget for 2012-2013, an increase of $1.8 million or .98%
  •         In the 2013-2014 budget, compensation recognizes grid movement based on the 97th day provision which was not recognized in the original budget for 2012-13
  •         Labour framework provides for a 0% salary increase, reduction of the teacher salary benchmark by 1.5% to recognize the three unpaid PA days and a reduction of the benefit benchmark by .167% as part of the phase out of retirement gratuities
  • The Board has made the same assumptions through the compensation expenditure budget for consistency
  • Some cost reductions have been incorporated in light of declining enrolment.
Manager Baumann reviewed the information relating to Elementary and Secondary Classroom Teachers, as follow:

  • Elementary increase of $520,000 or 0.77%
  •                 Increase due to increased FDK enrolment and 97th day incrementing offset by 3 unpaid days
  •                 Secondary decrease of $1.4 million or 2.98%
  • Decrease due to declining enrolment and 3 unpaid days offset by 97th day incrementing
Manager Baumann reviewed information with regard to Supply Teachers, as follows:

  • Increase of $604,000 or 12.96%
  • Supply teachers costs reflect usage surrounding absences
  • 2012-2013 amount was adjusted downward by $300,000 anticipating reductions in usage as a result of the proposed reduction in overall sick days.  As a result of Bill 115 changes overall absence usage has increased. The $300,000 reduction in 2012-13 was added back as well as an additional $300K in response to the trend.
In response to a Trustee request, Superintendent Richard stated that information about the Attendance Management Plan will be brought forward to a future Education/Human Resources Committee meeting.

Manager Bauman reviewed information with regard to Educational Assistants and Early Childhood Educators, as follows:

  • Increase of $2.1 million or 13.20%
  • Educational Assistants funded mainly through the Special Education grant
  • Staffing levels consistent for full-time education assistants
  • Increase is due to the increase in Early Childhood Educators for year 4 of FDK with 17 new schools and total enrolment of 1,799 (1,124 in 2012-13)
Ms. Baumann reviewed information related to Professional, Paraprofessional and Technicians, as follows:

  • Increase of $244,000 or 3.47%
  • Increased staffing due to increase in Special Education grant
Manager Baumann reviewed information regarding Library and Guidance, as follows:

  • Decrease of $355,000 or 8.55%
  • Declining enrolment adjusted
Manager Baumann reviewed information with respect to Staff Development, as follows:

  • Increase of $582,000 or 146.97%
  • Increase due to change in where budget has been shown. Budget moved from supplies and services to staff development to align to where actual costs are incurred
Manager Baumann reviewed information related to Elementary and Secondary Principals/Vice-Principals, as follows:

  • Elementary decrease of $35,000 or .48%
  • Secondary decrease of $168,000 or 4.43%
  • Reductions in staffing due to closing of schools and opening of a K-12 school as well as other adjustments
  • Elementary Principals reduced by 1 FTE and Secondary Vice-Principals reduced by 1.5 FTE.
Manager Baumann reviewed information with regard to School Secretarial and Clerical, as follows:

  • Decrease of $142,000 or 2.58%
  • Reductions in staffing due to closing of schools and opening of a K-12 school as well as other adjustments
  • Elementary reduced by 1.06 FTE and secondary reduced by 3.77 FTE
Manager Baumann reviewed information related to Co-ordinators and Consultants, as follows:

  • Increase of $52,000 or 2.06%
  • Increase due to half year incrementing and change in staff filling positions who have higher grid placement
Manager Baumann reviewed information with regard to Continuing Education, as follows:

  • Decrease of $67,000 or 5.38%
  • Reductions to align with program changes and lost revenue
Manager Baumann reviewed information with respect to Governance and Administration, as follows:

  • Decrease of $101,000 or 1.92%
  • Elimination of 1 Supervising Principal
Manager Baumann reviewed information with respect to Transportation, as follows:

  • Decrease of $398,000 or 100%
  • Elimination of Board managed routes which have now moved to Tri-Board
Manager Baumann reviewed information related to Facilities Services, as follows:

  • Increase of $350,000 or 2.45%
  • In 2012-2013, the amount was adjusted downward by $350,000 in anticipation of reductions in Caretaking casual usage as a result of the proposed reduction in overall sick days.  As a result of Bill 115 changes overall absence usage has increased.  In 2012-2013, the $350,000 was added back in response to the trend
Manager Baumann referred to Supplies and Services, and stated that the total $41.6 million vs. $42.2 million at original budget for 2012-2013, shows a decrease of $656,000 or 1.55%.

Manager Baumann reviewed the following information included in the Supplies and Services portion of the preliminary2013-2014 Expenditures Budget:

Schools:
  • Decrease of $1.05 million or 9.01%
  • Decrease due to change in where budget has been shown. Budget moved from supplies and services to staff development and classroom teachers to align to where actual costs are incurred
Governance and Administration:
  • Increase of $16,000 or 0.82%
  • Reflects mostly frozen budgets
Transportation:
  • Increase of $196,000 or 1.38%
  • This is the result of the elimination of Board managed routes which have now moved to Tri-Board
  • Increase offset by decrease in Transportation compensation of $398,000
  • Overall cost savings of $202,000
School Operations and Maintenance:
  • No change
Utilities:
  • Increase of $250,000 or 4.80%
  • Based on trend of actual costs so far in 2012-2013
  • Gradual reduction of this budget over the past few years to the point that it has exceeded actual costs
Debt Charges:
  • Permanently financed debt of $457K, represents the 55 School Board Trust debt (pre-amalgamation liabilities not permanently financed until 2003)
  • Capital debt support interest includes: the 20-year financing with RBC for the Frontenac SS and Bayridge SS additions  ($261K)– and six OFA long term financings ($1.9M)  – all 25 years - first in late 2006 and latest in March 2012 all pertaining to expenditures incurred under the GPTL program
  • Debt charges are interest costs only and are completely funded by Ministry
Manager Baumann reviewed the following information:

Revenue
                                        

2013-2014 Budget
Revised Estimates
2012-2013
Original 2012-2013 Budget
Allocations from Funding Model
  Operating Grants
  Debt Charges
    Permanently Financed
    Capital Debt Support – Interest

$210,401,000

        457,000
     2,122,000

$216,160,000

        457,000
     2,187,000

$214,448,000

        457,000
   2,1887,000
$212,980,000
$218,804,000
$217,092,000
Other revenues
$  15,618,000
$  13,416,000
$  10,858,000
Capital revenues taken into income
$                  0
$                  0
$                  0
Deferred revenues taken into income
$                  0
$                  0
$                  0
Unfinanced Operating Expenditures
$    2,336,000
$    1,829,000
$    1,806,000
Total
$230,934,000
$234,049,000
$229,756,000

Expenditures
                                

2013-2014 Budget
Revised Estimates
2012-2013
Original 2012-2013 Budget
Compensation
$189,361,000
$190,601,000
$187,527,000
Supplies and Services
$  41,573,000
$ 43,448,000
$  42,229,000
Total
$230,934,000
$234,049,000
$229,756,000


Manager Baumann provided the following information related to the total preliminary operating expenditures budget of $230.9 million vs. $229.8 million at original budget for 2012-2013, as follows:

  • Unfinanced operating expenditures for 2013-2014 budgeted at $2.3 million
  • Deficit would have been $3.0 million before $670,000 of cost reductions incorporated
  • Year over year deficit growth $530,000 ($2.3 million 2013-2014 vs. $1.8 million 2012-2013 original budget)
  • Growth in deficit is due to declining enrolment, the portion of secondary pupil’s enrolment over the 34-credit threshold now included in the new high credit day school ADE category, which is funded at the Continuing Education rate rather than the higher pupil foundation rate and increased trend in absence usage as a result of Bill 115 changes
Manager Baumann stated that in general, the Ministry requires school boards to submit a balanced budget whereby in-year expenditures are less than in-year revenues.  She said that, however, boards are permitted to use prior years’ accumulated surpluses to obtain a balanced budget.  The use of prior years’ accumulated surplus is limited to a maximum of 1% of total in-year operating revenue (operating grants plus permanently financed debt charges) to ensure that Boards aren’t facing undue financial risk.

Manager Baumann stated that the Board is permitted to adjust the fully PSAB financial position to a modified version for balanced budget compliance calculation purposes.  She said that historically, boards have been able to exclude vacation accruals and employee future benefits/post-retirement benefits from overall expenditures.  Vacation accrual is no longer excluded from expenditures for compliance.  Limestone DSB absorbed the accumulated vacation accrual in its entirety in 2011-2012.  Manager Baumann stated that in going forward, the annual budget must now absorb any in-year changes to the vacation accrual.  She said that this is projected flat for 2013-14.

Manager Baumann stated that the Ministry is now taking the same approach with the WSIB benefit liability, noting that 50% of the in-year change in the unfunded liability will now be included in compliance.  She reported that boards will also now be required to manage the retirement gratuities and sick leave employee future benefits as well as the retirement health, dental and life insurance plans on a PSAB actuarial valuation basis (to be amortized over Estimated Average Remaining Service Life - EARSL) rather than on a cash basis (expensed as paid).   Manager Baumann advised that there is no material difference in expense from last year for WSIB, retirement gratuities and retirement health, dental and life insurance plans.

Manager Baumann indicated that the preliminary budget deficit of $2.3 million is not within the 1% limitation of $2.1 million; although, the Board has sufficient accumulated unrestricted surplus to offset the deficit.

Trustee Jackson asked if there were any other ideas for reductions.  The Director advised that staff will be prepared to bring back some information at the next Committee of the Whole Board (Budget) meeting.

Vice-Chair French thanked Manager Baumann for providing the above-noted information.

Next Meeting Date

        The next meeting of the Committee of the Whole Board to discuss the budget is scheduled for Monday, June 10, 2013, at 6:00 p.m.

Committee to Rise and Report

        MOVED BY Trustee Beavis, seconded by Trustee Chadwick, that the Committee of the Whole Board rise and report to the Board.–Carried

Adjournment

        MOVED BY Trustee Goodfellow, seconded by Trustee Crawford, that the meeting adjourn at 6:30~p.m.–Carried