By Cole Parkinson
After passing a deficit budget in the spring, Horizon School Board got a fall update as they ready to begin 2019.
The board passed a budget in May with a projected deficit of $895,491 but with the fall update, the financial staff is projecting a slight improvement.
“In the spring, the board approved a deficit of $895,000 and the update we have this fall is a deficit of $726,000 ($726,361). So a bit of an improvement over what we approved,” said Phil Johansen, associate superintendent of finance and operations, during the board’s regular meeting on November 28.
In splitting up the deficit, $256,643 comes from the board level while the remaining $469,719 comes from schools opting to expend reserve dollars.
Major changes in revenues come from fees, other sales and services, rental of facilities and fundraising.
Fees have a 31.4 per cent decrease from $1,179,401 in the spring budget to $809,000 in the fall update, other sales and services has a 44.8 per cent increase from $489,933 to $709,196, rental of facilities has a 14.2 per cent jump to $13,240 from $11,595 and fundraising has a 25 per cent increase from $320,000 to $400,000.
Total revenues have been updated to $46,103,919 compared to $46,550,848 in the original spring budget which amounts to a one per cent decrease and a variance of $446,929.
Expenses by program see big changes in the form of a 6.7 per cent decrease in transportation down to $2,766,327 from $2,964,327 and an 11.5 per cent increase in external services up to $455,067 from $407,960.
“In the spring we projected a transportation deficit of $130,000 since then we have cut two routes on the transportation. Our forecasted deficit in transportation for the year is closer to $40,000,” added Johansen.
Another slight cost reduction comes in the form of administration costs.
“In the spring we projected an average teacher cost after benefits, this is classroom teachers, not principals, and not certificated staff, it would be senior administration. The cost in the spring was projected at almost $101,000, our spring average actually came in at a hair under $100,000,” explained Johansen.
There was also around $60,000 built in the fall update to account for grid increments occurring in February as teachers move up on the grid.
Expenses by object sees the biggest shift in services, contracts and supplies which is down seven per cent with a variance of $866,140 and the update down to $11,556,636.
Total expenses are set at $46,830,280 for the fall update, down from $47,446,339 in the spring budget.
Another major reason the budget update projects a lower deficit is because schools originally said they were going to be dipping into reserves more than they actually are.
“The difference in the spring budget is we had schools telling us they were planning on using about $582,000 of their reserves.”
“In the fall that has come down closer to $470,000 so that is an improvement for the bottom line of $112,000,” stated Johansen. “Out of centralized budgets they had $1.3 million. They had committed they were going to spend $469,000, that would take them down about $870,000 at the end of the year. The board’s reserves were at $3.3 million.”
School controlled accumulated reserves as of August 31, 2018, are listed at $1,337,756 while board controlled accumulated operating reserves are $3,358,001.
Johansen also pointed out an estimated $800,000 of their reserves are unavailable due to their investment into wind farm projects.
Next year up to August 31, 2019, as budgeted, lists the board reserves at $2,842,299 and school controlled reserves at $868,037.
“Commitments we have this year are the maintenance staff has been working to bring the maintenance shop back up to code. In talking to Jake (Heide, facilities manager), he says there is about $100,000 left in that budget and he thinks it will probably take it. Heat pumps for W.R. Myers, the board has committed $250,000 out of reserves for that. We, of course, discussed earlier that we are recovering about $80,000 out of IMR and out of the Warner project to be able to put back towards the heat pumps,” said Johansen. “D.A. Ferguson, we committed $465,000 on windows and then, of course, we’ve got our share of the loss for the upcoming year which is about $250,000. That unsupported amortization, what happens with that is, a part of this loss number but every year as it is incurred, it is transferred back into against the investment of capital assets so this number becomes more of a cash type item. This is where your reserves we expect will sit at the end of the year, right around $2,850,000. Take out the wind farm and its right around $2 million.”
In terms of enrolment, the updated budget reports a slight improvement in full-time equivalents for this year.
“Our enrolment for this year is actually up 40 full-time equivalents in Kindergarten to Grade 12 compared to last year,” said Johansen.
Since 2010 though, Horizon has seen a decrease of around 127 students since 2010 and those decreases haven’t been consistent between schools.
Horizon’s press release for the fall budget states over half of their schools have 100 or fewer students and most of those schools receive funding because they meet Alberta Education criteria for ‘small school by necessity’.
Total enrolled students from Grades 1 to 12 is listed at 3,197 down 10 from the original budget.
While fees and sales to parents and students remain largely the same, a big change in fees comes from alternative program fees which have been slashed nearly in half.
In the spring budget, it was listed at $756,100 while the update sees it at $388,900 which is a $367,200 variance.
Total fees then come down to $809,000 compared to the original number of $1,179,401.
Total other sales sees a 44.8 per cent increase up to $709,196 as international and out of province student revenue jumped 394.9 per cent, staffing payments for elite sports programs went up 19.4 per cent, staffing payments for additional support staff was up 240.7 per cent and staffing payments for additional teaching staff rose by 100 per cent.
Early Childhood Services full-time equivalents have seen a 19.1 per cent jump as it has hit 148 compared to the projected 124.3 in the spring budget report.
While the deficit is Horizon’s fourth year in a row, they don’t see it continuing much longer.
“This is, from our assumption, the last deficit budget that we plan to bring forward,” said Wilco Tymensen, superintendent of schools.
A motion was made to approve the budget and was passed unanimously by the board.