If the New Westminster school district doesn't cut spending, it will have another whopping deficit of $2.2 million this school year, in addition to the multi-million dollar shortfall from last year, a consultant told the board of education at its meeting on Tuesday night.
Joan Axford, who was recently hired by the school district to review the hefty "surprise" deficit, painted a grim picture of what's to come if the district doesn't find a way to deal with structural issues - ongoing costs - that must be addressed or it will face another year of shortfalls.
"(If the district) operates at the same level you are today, you will be in a deficit of $2.2 million," Axford told the board. "What's more important here is how to manage this going forward."
She recommended the board prepare a budget for this year that is "realistic" and "manageable."
Costs include paid leaves, teachers' salaries, employment benefits and leasing expenses.
"They are all going to carry on to this year," Axford said.
Last year's deficit was caused by increases in business costs, staffing and budget information and the cost of supplies and services, Axford wrote.
Her report also noted last year's budget was not well understood throughout the entire school district and therefore was not always used as a reference point when spending decisions were made.
The board voted to have the superintendent present further ways to cut back on costs. The district has already implemented a ban on all unapproved overtime and implemented hiring restrictions.
The district has two situations to deal with, according to Axford. First, it must set out a longterm repayment plan for last year's deficit, which will need to be approved by the Ministry of Education. Second, it needs to determine how to get this year's budget in order, so it isn't in the hole again.
"Your deficit repayment plan is like paying off your credit card; you're $2.2 million deficit is like getting your household budget in order," she explained.
Axford said she is the third consultant in 11 years to come in and review a district deficit and said her report would provide a "road map" for the board to manage issues and establish new practices.
She also noted the district does not have budget reserves to help pay for unexpected costs, as many other districts do. Provincially, districts use $48 million to balance their 2011/12 operating budgets, her report stated.
This is something certain trustees, including longtime trustee Michael Ewen, have said in the past that they oppose because they want to keep every dollar in the classroom.
The district also faces a number of unique challenges, including a high percentage of students whose first language isn't English and students with special needs. Also, it only has one professional accountant on staff and has reduced administration support over the last few years, Axford noted.
She suggested the board begin consulting with the public - including seeking input with an online survey - and talk with the Ministry of Education about the plans and intentions moving forward. She said the board should be receiving regular budget updates from senior administration. She also noted the district needs to develop ways to manage risk, including ensuring the board understands the services and priorities being approved and that those services are translated into a budget that managers understand.
The board of education passed what it thought was a balanced budget with a small surplus last spring. It wasn't until September that the district announced it was facing the hefty deficit.
© Copyright 2013