Presentation to Board May 27, 2008 Presented by: J. A. Sabo, Associate Director – Leading Services & Treasurer of the Board 2008-09 OPERATING BUDGET York.

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 ?