$13M lease hits CBE classrooms
Education minister ‘concerned’ after school spending scrutinized
A decade-old decision to lease a massive new headquarters for public school administrators is still costing as much as $13 million a year, half of which comes from operational expenses that could be going to classrooms.
That, along with criticisms the Calgary Board of Education has budgeted for deficits but collected surpluses over the last three years, was released Thursday by the province as part of an ongoing fiscal review called this spring amid controversy over busing.
“I’m concerned,” said Education Minister David Eggen, referring to a report that found the CBE finished the last three fiscal years with annual surpluses of $9.1 million, $11.4 million and $14.6 million, respectively.
“They come out in the fall projecting a deficit when, in fact, they have delivered surpluses. That’s a large grain of salt we have to keep in mind. Boards have done that for a long time because of unstable funding from the previous government and are always playing one thing against the other.
“But we are providing longterm, stable funding, and they need to ensure their numbers remain consistent.”
Eggen said he’s also concerned about the CBE’s ongoing 20-year lease for its downtown administration building, with no option for purchase until March 2031. The total annual operating cost is now at $13 million, including the Education Centre and Safran Centre.
And while CBE currently generates revenue under a sub-lease of the top two floors of the Education Centre to commercial tenants, half of the $13-million cost comes from operational expenses which could be going to classrooms, Eggen said.
If the sub-lease were to expire, Eggen added, the CBE may be at risk of losing some of that revenue due to changed market conditions.
“I don’t know who, or why they would have made that choice. But we want to work to resolve and clean up these things. Half of that lease expense is coming from their operational funding, which is from the classroom.”
But CBE officials responded quickly Thursday afternoon, saying that budgeting for deficits is not uncommon and any surplus that remains after a fiscal year goes straight back into classrooms.
“We are obligated to submit balanced budgets, which we do every year, and we need to build in a bit of conservatism, which may result in a surplus,” said Brad Grundy, chief financial officer for the CBE. “But we invest those dollars immediately back into the classroom.”
He added that the long-term lease of the CBE administration building has been a point of discussion for many, many years, which dates well before his time. “But those are costs we incur and that we review on a regular basis to see if there is any opportunity to do something different, but that doesn’t seem to be the case right now.”
Board chair Joy Bowen-Eyre, who will not be seeking re-election as a school trustee this fall, added the board looks forward to continuing to work with the province to try to meet parent expectations for transportation.
“In Calgary, parents and educators have very high expectations,” she said. “We want excellent, highquality public education and parents are really busy. They’re facing lots of restraints, and if they can have better busing, then they would like to have that.”
Eggen ordered a financial review of the CBE this spring after a series of changes to busing was announced, including more congregated stops farther from schools, changes to bell times and putting more middle school students in alternative programs onto Calgary Transit at a cost of $700 a year to parents.
Officials from the CBE at the time said a big part of their challenge was the province’s introduction of Bill 1, which eliminates instructional fees and transportation fees for kids in regular programs who live farther than 2.4 kilometres from their designated schools.
But Eggen reiterated yet again Thursday that the province has given the CBE $18 million to offset fee reduction, part of the total $1.3 billion in funding the board receives overall.
“Part of my frustration is the mixing up of transportation issues with our efforts to reduce school fees,” Eggen said.
“I know we’re in a politically heated fall, with municipal and trustee elections, but mixing up a very noble and necessary initiative and somehow making suggestions that the bill was causing transportation chaos … it just simply isn’t true.”
Eggen expects to announce specific recommendations to the board’s transportation challenges by Thanksgiving, he confirmed.
But he also hopes to continue the review and compare best practices of the three other large metro boards across the province.