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Delta school district budget balancing a very complex task

The district taking a sustainable and measured approach to balancing the books, which means less reliance on reserve funds as was done previously
Ministry funding has increased significantly in the last few years, but so has costs, says the school district’s secretary treasurer.

The Delta School Board held a virtual public engagement session on Tuesday (March 7) to hear from parents and educators about the upcoming district operating budget, as well as discuss what they believe is important when it comes to inclusive learning.

Prior to having the Zoom participants take part in separate “breakout rooms” to discuss their thoughts, secretary treasurer Nicola Christ outlined the budget process and the myriad of financial considerations that have to go into formulating the budget.

Christ noted the bottom line won’t be known until the province lets them know what the operating grant allocation will be for the next school year, but the district is currently figuring on yet another budget shortfall.

Most factors are not within the district’s control and can cause uncertainty, requiring careful financial management, she said.

Some of the factors include labour settlement increases, a $12.5 million amount in next year’s budget. Funding for those costs will be announced next week and it is anticipated to be provided on a per pupil bases, in alignment with the current operating grant formula.

When labour settlement funding increases are funded in such a manner, there is a risk funding will not cover the full cost, explained Christ.

The factors in the complex budgeting also include staffing composition changes, with fewer teachers retiring this year. That means there will be fewer entry level teachers needed for replacement.

Next year, there will be an additional 52 teachers in the top half of the salary grid compared to 2022/23. The result is that the overall composition of teachers in Delta is increasing in cost, but salary composition increases are not part of labour settlement funding.

Meanwhile, there are increasing extended benefit costs and other costs, such as Canada Pension Plan increases, as well as a benefit that provides five days of sick leave for casual workers, which had been added for 2022/23 budget and is not currently funded.

Also, during the pandemic, school districts experienced significant illness increases and the trend continues with a bad flu season, resulting in higher illness costs.

For the time being, the district will set aside a reserve contingency so that those costs can be monitored without budget reductions to key areas, Christ said.

As far as technology replacements, that budget has become tighter over time, with purchases largely funded from one-time reserve funds. The availability to cover those costs remains uncertain from year-to-year and does not necessarily align with the timeline for needed replacements.

Other factors include high inflationary pressures for services and supplies that result in decreased purchasing power.

Christ said Delta’s International Student Program has recovered from the pandemic, but the revenues are not back to pre-pandemic levels to help balance the budget, while the district also has investment income uncertainty.

As far as inclusive learning, Christ said Delta always spends above the supplemental funding provided for unique student needs. The additional spending comes from other sources of funding including the district’s accumulated operating surplus funds.

Inclusive learning is also provided on a needs-basis, so costs are always fluctuating, prompting the district’s finance and inclusive learning teams to work closely together as new needs arise.

And like all school districts, recruitment challenges can result in hiring delays of specialized staff.

Christ also noted details on the district’s final enrollment projects still have to be worked out.

Early enrollment projections estimate an increase of 100 students next year over this school year’s enrollment, while there is an estimate of 77 fewer inclusive learning students with unique student needs, but an increase of 86 English language learner students.

District departments are currently examining their budgets to identify potential efficiencies.

This year’s amended operating budget had better than expected results, resulting in a surplus that can be carried forward, Christ added, but they are still working on an assumption they will be balancing a shortfall of somewhere under $1 million.

Christ said the district will again use a balance budgeting strategy that ensures the proposed reductions have the least impact on students, decreasing programming areas that have had limited success on student success and well-being, and reducing the reliance of reserve funds.

The district will find out what its funding allocation will be on March 15 and announce its draft operating budget on April 13. A special public input meeting will be held on April 18.