presentation to board may 27, 2008 presented by: j. a. sabo, associate director – leading services...
TRANSCRIPT
Presentation to BoardMay 27, 2008
Presented by: J. A. Sabo, Associate Director – Leading Services & Treasurer of the Board
2008-09
OPERATING BUDGET
York Catholic District School Board
UPDATE
Preparation of 2008-09 FINANCIAL ESTIMATES
As reported at the May 6, 2008 meeting (based on analysis of revenue projections completed and expenditure projections in progress), there is an obvious “disconnect” between projected expenditures and revenues resulting in a budget shortfall or “under-funding”
As reported at the May 6, 2008 meeting (based on analysis of revenue projections completed and expenditure projections in progress), there is an obvious “disconnect” between projected expenditures and revenues resulting in a budget shortfall or “under-funding”
York Catholic District School Board
2008-09
OPERATING BUDGET
York Catholic District School Board
2008-09
OPERATING BUDGET
Development of a compliant 2008-09 Operating Budget remains a significant challenge in light of the previously identified expenditure pressures, calculated available funding and lack of available reserves. However, the target remains to strive to develop a positive “York Catholic Solution”.
CONCERNS AND PRESSURE POINTSCONCERNS AND PRESSURE POINTS
• Legislative requirement under section 231 of the Education Act for boards to submit a BALANCED budget
• Section 286: Directors of Education and other supervisory officers are responsible to the Minister of Education for the performance of their duties in accordance with the ACT and the regulations
• Other school boards are at various levels of financial “health” (surplus and deficit)
2008-09
OPERATING BUDGET
York Catholic District School Board
“FACTS” that must be considered
Through the use of Reserves it is projected that the Board will NOT incur a 2007-08 deficit/shortfall.
To maintain the same level of programs and services in 2008-09 the Board must first fund the amount of the preceding
year’s shortfall (prior to reserve transfer).
The Board has in the past filed compliant budgets and financial
statements.
The Board has reached a limit in terms of YCDSB interpretations, and ability to
report within certain envelope provisions (e.g. Admin & Governance)
The Board is experiencing EXCELLENT student achievement
results
The Board is experiencing costs above Ministry benchmarks and resulting
funding allocation.
In the name of accountability the Ministry is increasing the examination of School Boards’ fiscal responsibility.
The Ministry is not rewarding school boards for excellence in student
achievement.
Objectives re: May 27, 2008 meeting
1. Follow-up to the information provided at the May 6, 2008 Board meeting
2. Review Expenditure modules for the 2008-09 Operating Budget not previously available for distribution:
o General School Budgets
o Accommodation & Plant
o Transportation
o Information Technology
Objectives (cont’d)
3. Identify budget modules not yet completed for review
4. Initiate preliminary discussion on the 2008-09 “budget balancing process and worksheet form” in preparation for approval of the Operating Budget
5. OTHER NEXT STEPS
a) Review projected funding shortfall elimination strategies
b) Establish July 2, 2008 for Budget Approval
BACKGROUND INFORMATION
(Included in Agenda package)
• Report to Board - May 27, 2008 Information
• Transportation (ivory 4 pages)
• Plant/Accommodation (purple 18 pages)
• General School Budgets (pink 5 pages)
• Information Systems (blue 11 pages)
Note: Supplementary power point presentations are included for each of the above.
TRANSPORTATION(excluding Salaries and Benefits)
2007-08 Revised Estimates $ 15,472,446
2008-09- Base $ 15,486,596
Increase
/(Decrease)
.09%
Growth 406,418 2.62%
Increase/Decrease
TOTAL $ 15,893,014 2.71%
ACCOMMODATION /PLANT(Including Salaries and Benefits)
2007-08 Revised Estimates $ 44,342,369
2008-09- Base $ 46,394,638
Increase
/(Decrease)
4.63%
Growth 1,012,293 2.28%
Increase/Decrease 4,795,237 10.81%
TOTAL $ 52,202,168 17.72%
GENERAL SCHOOL BUDGETS
2007-08 Revised Estimates $ 9,528,896
2008-09- Base $ 9,190,840
Increase
/(Decrease)
(3.55)%
Growth 72,463 0.76%
Increase/Decrease
TOTAL $ 9,263,303 (2.79)%
INFORMATION SYSTEMS(excluding Salaries and Benefits)
2007-08 Revised Estimates $ 3,664,305
2008-09- Base $3,283,326
Increase
/(Decrease)
(10.39)%
Growth
Increase/Decrease 1,807,690 49.33%
TOTAL $ 5,091,016 38.94%
EXPENDITURE SUPPORT MATERIAL PRESENTED
MODULE DATE COLOUR Pages
Salary & Benefits MAY 6, 2008 Pink 37
Special Education MAY 6, 2008 Yellow 10
Transportation MAY 27, 2008 Ivory 4
Accommodation/Plant MAY 27, 2008 Purple 18
General School Budgets (GSB) MAY 27, 2008 Pink 5
Information Systems MAY 27,2008 Blue 11
Instructional Services (includes ESL and Alt Ed.)
Continuing Education
Other Central Support Not finalized
Not finalized
Not finalized
MODULE DATE COLOUR Pages
Revenue Estimates May 6, 2008 Pink/Green 37
SUPPORT MATERIAL PRESENTED
REVENUE
RESERVE FUNDS
MODULE DATE COLOUR Pages
Transfers from Reserves
May 6, 2008 Buff 5
•STEP #1 - CALCULATE REVENUE ENTITLEMENTS (based on Ministry Technical Papers using Board specific/relevant data)
•STEP #2 - CALCULATE EXPENDITURE REQUIREMENTS (based on Ministry regulations/requirements and Board priorities/commitments)
•STEP #3 - ENSURE that Revenues meet or exceed Expenditures (since Step #1 is capped, adjustments must occur in Step #2)
Note: Step #2 Must Comply to Ministry Regulations & Envelopes
REVIEW OF REVIEW OF BUDGET DEVELOPMENT STEPSBUDGET DEVELOPMENT STEPS
OPERATING REVENUE
May 27, 2008 AdjustmentsFINAL
PROJECTIONS
Grants for Student Needs
$ 432,507,725
Other Grants 1,000,000
Other Revenue 5,586,400
Continuing Education 7,061,521
TOTAL $ 446,155,646
Budget Balancing Worksheet 2008-09
Operating Revenues
See Revenue Module dated May 6, 2008 for details
For Illustration purposes
1. Estimated Revenues for 2008-09 $ 446,155,646
= Balance Available for Spending. $ 446,155,646
Alternate Approach to Budget Balancing
Note: The above projected amount will change, only if new and valid information and assumptions arise.
2008-09 BUDGET PROJECTION SUMMARY
Total 2008-09 Preliminary Operating
May 27,2008
AdjustmentsFINAL
Projections
REVENUE $ 446,155,646
EXPENDITURE
DIFFERENCE
“Protected” Reserves
“Available” Reserves
TOTAL
Reserves
Board Established Reserves August 31, 2007
$ 1,533,748 $ 5,091,420 $ 6,625,168
Amount required to balance 2007-08 as per Revised Estimates
(2,696,287) (2,696,287)
BALANCE REMAINING for 2008-09 prior to year end variances
$ 1,533,748 $ 2,394,953 $ 3,928,881
RESERVESEstimated Board Established Reserve Balance
Projected 2007-08 year-end variances (1,905,201) (1,905,201)
PROJECTED BALANCE prior to drawdown for 2008-09
$ 1,533,748 $ 489,752 $ 2,023,680
Maximum available for 2008-09 assuming above
(489,752) (489,752)
BALANCE $ 1,533,748 0 $ 1,533,748
OPERATING EXPENDITURES
May 27, 2008 AdjustmentsFINAL
Projections
Salary & Wages $ 342,060,550
Employee Benefits 53,152,363
Professional Dev
Supplies/Services
Capital
Fees & Services
Other
Total Exp
Budget Balancing Worksheet 2008-09
Operating Expenditures
PRELIMINARY INCREASES OVER REVISED ESTIMATES
REVENUE 07-08 Revised Est. Increase Preliminary 08-09
Grants $ 420,863,847 $ 11,643,878 $432,507,725
Other Grants 2,428,259 (1,428,259) 1,000,000
Other Revenue 6,022,760 (436,360) 5,586,400
Con. Ed. 7,436,725 (375,204) 7,061,521
Transfer from Reserve 2,696,287 (2,206,355) 489,932
Total Revenue $ 439,447,878 $ 7,197,700 $ 446,645,578
EXPENDITURES
Salary & Wages $ 333,941,010 $ 8,119,540 $ 342,060,550
Benefits 48,766,260 4,386,103 53,152,363
Professional Dev 1,748,296 tbd tbd
Supplies/Services 28,103,404 tbd tbd
Capital 3,649,884 tbd tbd
Fees & Services 21,952,539 tbd tbd
Other 1,286,4485 tbd tbd
Total Exp $ 439,447,878 $ 12,505,643
Balance - TARGET = ZERO
“Protected” Reserves
“Available” Reserves
TOTAL
Reserves
Board Established Reserves August 31, 2007
$ 1,533,748 $ 5,091,420 $ 6,625,168
*Amount required to balance 2007-08 (estimated)
4,601,488 4,601,488
BALANCE REMAINING for 2008-09 $ 1,533,748 $ 489,932 $ 2023,680
2008-09 Transfer from Reserves (489,932) (489,932)
BALANCE $ 1,533,748 0 $ 1,533,748
If Required (1,533,748) (1,533,748)
BALANCE 0 0 0
RESERVESEstimated Board Established Reserve Balance
Alternatives to review/debate
INCREASE REVENUES Revenues are LIMITED to Grants for Student Needs based on actual enrolments
UTILIZE RESERVES Should 2007-08 projections remain, Reserves will be substantially EXHAUSTED.
REDUCE EXPENDITURES Ideal from budget balancing perspective, challenging from program/service delivery perspective
DEFER EXPENDITURES to future fiscal periods
Against Board budgeting principles and extends problem into future
TRANSFER potential Operating expenditures to the Capital Fund
Limited due to Ministry transfer restrictions.
INCUR A DEFICIT YCDSB Guiding Fiscal Policies-”Position Board financially to “never” allow a deficit to knowingly reoccur”
Ministry directives: Deficits are not permitted.
BUDGET BALANCING WORKSHEET ADJUSTMENTS
(t.b.d.)
• Further Review of Expenditure Projections
• Re-Costing
• Deferral
• Reduction
• Capitalization
• “Targeted”
• Further Review of Revenue Projections
• Minor adjustments anticipated
2.7
9.1
19.1
28.5
32.3
0.65
5.9
14.516.216.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.01988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1998-1
999
1999-2
000
2000-0
1
2001-0
2
2002-0
3
2003-0
4
2004-0
5
2005-0
6
2006-0
7
2007-0
8
Millio
nAccumulated Deficit History 1988–2004
Projected 2004-2008(INCLUDING USE OF RESERVES re 2003-2008)
• Amounts reflect Audited Financial Statement figures 1988 - 2007. ( 1992 is net of Undue Burden Grant)2007-08 based on estimated financial position.•The Accumulated deficit was eliminated in the year ending August 31, 1998. Commencing Sept 1, 1998 the fiscal year changed from Sept 1 to August 31
3.58
8.18
0.501.661.10
2.70
19.10
28.50
32.30
16.00
16.20
14.50
5.90
0.65
9.10
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.01988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1998-9
9
1999-0
0
2000-0
1
2001-0
2
2002-0
3
2003-0
4
2004-0
5
2005-0
6
2006-0
7
2007-0
8
Mil
lio
n
• Amounts reflect Audited Financial Statement figures 1988 - 2007. ( 1992 is net of Undue Burden Grant)2007-08 Based on Projected Year-end transfer of $4.6 M from Reserves•The Accumulated deficit was eliminated in the year ending August 31, 1998. Commencing Sept 1, 1998 the fiscal year changed from Sept 1 to August 31• 2003-2007 reflects amounts drawn from reserves each year.
Accumulated Deficit History 1988–2004/Projected 2004-2008
(EXCLUDING USE OF RESERVES re 2003-2008)
2003-08 accumulated deficit (excluding reserve
drawdown)
CHALLENGESCHALLENGES
• Recording and filing of the 2008-09 Estimates
• Implementation of the 2008-09 Estimates
• Short/long-term sustainability
BUDGET ANALYSIS COMMITTEE
1.“Recommend strategies for developing a balanced and compliant budget for the current year
2.Examine strategies for sustaining a balanced and compliant budget on a multi-year basis”
Note: As discussed at the May 15, 2008 Budget Analysis meeting, it is proposed that this Committee be used currently and into the Fall (if necessary) to facilitate budget compliance both short- and long-term.
SPECIAL BOARD MEETING Re: Budget Approval:
As reviewed at the recent Executive Committee of the Board, a special Board meeting is proposed for Wednesday, July 2, 2008, for the approval of the 2008-09 Operating Budget.
NEXT STEPS:
The next steps in the development of the 2008-09 Operating Budget are as follows:
1. Completion of outstanding expenditure modules (Of note Instructional Services and Other)
2. Review of all budget modules with the view of refining and validating assumptions incorporated and resulting calculated projections.
3. Completion of Budget Balancing Worksheet identifying options for adjustment and resulting impacts.
4. Presentation and discussion of initial Budget Balancing Worksheet at June 17, 2008 Board meeting.
5. Subject to discussions held and direction received at the June 17, 2008 meeting commence preparation of information in support of recommendations to file 2008-09 Financial Estimates with the Ministry of Education.
Balanced Scorecard Outcomes• “Re-allocating and Accessing Resources to Achieve our
Student outcomes”
• “Leveraged use of our Resources”
Stability & Educational Excellence• Maintaining positive educational results
Fiscal Targets1. Balanced Budget
2. Compliance with Legislation/Regulations
3. Compliance with Funding Envelopes
Ministry Ministry FocusFocus
YCDSB BUDGET OBJECTIVES
Board Board FocusFocus
BUDGET DISCIPLINE/CONSIDERATIONSBUDGET DISCIPLINE/CONSIDERATIONS
ZERO SUM GAME• CANNOT afford to materially
UNDERSTATE Expenditures
OR
OVERSTATE Revenues
KEEPING THE BALANCE
FISCAL STUDENT
RESPONSIBILITY vs. OUTCOMES
THE CHALLENGETHE CHALLENGETHE CHALLENGETHE CHALLENGE
QUESTIONS ?QUESTIONS ?QUESTIONS ?QUESTIONS ?