Chinook records an approximate $2.3 million deficit this past school year

The Chinook School Division posted a less than expected deficit this past school year according to data approved by the Chinook School Division this past week.

The audited financial statements and annual report of the Chinook School Division were approved during a special board meeting on November 27. The financial data for the period of September 1, 2018 to August 31, along with the annual report, were then forwarded to the Ministry of Education and Ministry of Finance review before they are formally approved and released to the public.

Rod Quintin, Chief Financial Officer for the Chinook School Division, reported to the press that the division had planned for a $4.6 million deficit this past school year but ended up with just a $2.3 million deficit. However, the financial picture is concerning in that they are in a deficit position for a series of years in a row now.

“Operational deficits are a problem. If we have a deficit that’s driven by just our amortization expense, which is the depreciation of our buildings, that’s more of a normal circumstance. We always get concerned about operational deficits which are cash deficits. We are fortunate this year to not have the cash deficit that we thought we might have. So that gives us another year of time for future projected cash deficits, because unless we get some more funding we’re going to continue on with cash operational deficits as long as we have this level operation of our facilities and our staff,” Quintin said last Monday.

The revenues from the past school year was improved thanks to some additional grant money in emergent funding for various projects that had come up through the year on various facilities.

As a result, the Division did not have to utilize a larger portion of their reserves in order to balance the budget.

“This year we did not have to draw on our reserves as much as we expected, which was good to be able to not do that,” he conceded.

“And because of being under expended on the money that we set aside for curriculum implementation, we were able to set some money into a restricted reserve for curriculum implementation, which we do expect will be coming, probably as soon as this year.”

Quintin expressed his frustration over the unexpected expenditures which come up periodically, which adds up by the end of the year.

“I’m not happy with the surprises that you get mid year. Things like the Carbon Levy that comes mid year that’s very difficult to budget for,” he said.

“We projected, on an annual basis, it would be around $250,000. But we can’t easily tell what that would be. It’s going to be based somewhat on consumption, so all we can do is try and limit our consumption of things that would have that levy somewhere buried in that price.”

Kyle Mcintyre, Chinook’s Director of Education, added that the levy appears in a wide range of expense columns.

“All goods and services and products really have that built into the pricing now. So we’re seeing a lot of increase in terms of our expenses. And some of that is that a carbon tax is hidden within fuel and within power and within gas. So it’s a varied cost, so it’s tough to segregate it out, but we think about $250,000 to $300,000.”

Quintin also noted that some other financial areas had varying impacts on their finances.

“We had some unexpected expenses related to the MSS, that’s our new student information system, that we weren’t able to budget for. So you get a few of these things, and they might not be a large number, but you get enough of them added together it starts to become a large number. It would be far nicer if we could be more able to predict what those costs would be.”

Their financial savings have also occurred as a result of a sick leave anomaly.

“In our expenditure side the bulk of our spend is on staff. So we set aside contingencies for potential things like sick leave, where you might have to hire a substitute to replace a staff member who is on a long term illness leave. We didn’t have as much uptake on that as we had built into our contingency. Which is a good thing.”

“We’ve just been incredibly fortunate around our staffing that we haven’t had any significant uptick on the sick leaves. We were able to manage that fairly well. But it is a cycle, and we do expect at some point we will have that come back and we will have a heavy draw on our sick leaves.”

And, despite staffing being the largest portion of their annual spending, it is no longer an area they can afford to make further cuts in.

“We can manage our expenditures to the best that we can. But there’s things like inflation, whether its salary costs or fuel costs or energy costs, that’s pretty difficult to keep a lid on. It’s somewhat beyond our control, unless we start to address it through a reduced number of staff, which is really not an option for us anymore.”

Mcintyre agreed staffing levels can not be adjusted down any further.

“We’ve done that for the last five years. We’ve had a bit of a ‘lifestyle adjustment’, and I can’t ask our staff or our kids to do more than they’re doing right now. We’re not looking at reducing any staff because we still have to have the right number of staff to provide opportunities for kids.”

The Director of Education said that provincial funding is the main reason for their financial realities.

“The challenge for us right now, as our CFO pointed out, is around the financial. So the operational deficits, we’re finding that we have a structural deficit in our school division. It costs us more to operate than what we’re funded. A practice that is not recommended, or sustainable, is we’re having to go into our reserves, into that piggy bank, to fund our operations. So for us that operational deficit is a concern.”

“The number of students in the province is growing, there’s not the accompanying dollars coming back into education. And so what’s happening is the funding formula is being altered so that the dollars follow the areas that are growing in the province. We’re flatlined in attendance, although we went up .54 per cent, we don’t have the number of students that the cities have in Saskatchewan. So we’re finding it a challenge to fund what we’re able do.”

Mcintyre also points out the geographic size of the division causes Chinook to endure high fixed costs.

“It costs us a certain amount of money to run a school, whether that school has 300 students or whether it has 100 students. Operating our buses. It costs us a lot of money. It costs us just as much to run a bus full of 15 kids as it does five kids. So we’re very sparsely populated. Our schools are very spread out. We can’t close any schools that we have in the Chinook School Division, but we’ve still got to get kids to school safely and on time. Transportation costs money. Running the plants costs money. We have to have a certain amount of staff in every school to offer equitable opportunity for kids. So our costs are fixed.”

“The challenge right now is that people still have to consider that even through parts of our province are growing, and those funds need to follow those students, we still need funds to operate in rural Saskatchewan because of our high fixed costs that are not necessarily dependent on enrolment alone.”