New cash surplus policy won’t impact SD 70 – yet

A new Ministry of Education funding guideline requiring districts to ante up cash surpluses for capital projects raises questions - BCSTA

A new Ministry of Education capital project funding guideline isn’t expected to have an immediate impact in School District 70.

According to the MOE, school districts will be required to ante up 50 per cent of the cost of future capital projects and seismic upgrades, and will be expected to do so out of their cash surplus funds.

The policy change stems from a 2010, Auditor General report which noted that there is too much cash in public sector agencies like school districts than is needed for operational purposes.

In the subsequent 2014 provincial budget, the Ministry of Finance launched the ‘Cash Management Strategy’ which requires school districts to help underwrite the cost of capital projects. The plan won’t affect school operating grants.

“It will save taxpayer money by reducing government borrowing for capital projects,” a MOE spokesperson said.

Funds already earmarked by school districts for other projects won’t be affected. And provincial funding for capital projects in districts without significant cash surpluses will remain unchanged, the spokesperson added.

School districts void of cash surpluses don’t escape completely unscathed though. The ministry will evaluate future capital projects on a case-by-case basis with them, the spokesperson said.

The policy won’t have an immediate effect in School District 70, superintendent Cam Pinkerton said, because the district doesn’t have a cash surplus.

The district only has one capital project, the Ucluelet Elementary and Secondary schools replacement. But it was already on the books and therefore won’t be affected, Pinkerton said.

“We have a letter about this from the ministry and they’ve indicated that they’re only looking at school districts that have surpluses,” he said.

School districts dipping into surplus funds to ante up for capital and seismic work raises broad fundamental questions, said Teresa Rezansoff, president of the BC School Trustees Association.

The first question involves how the ministry is treating the term “surplus”.

According to Rezansoff, districts incur surpluses for various reasons. They may have received funds at the end of the year prior to closing their books and before earmarking the funds. They could be saving for future projects. Or they could be trying to pay unfunded liabilities that arise, she said.

“Redirecting surpluses to pay for capital projects will negatively impact district initiatives,” Rezansoff said.

The new policy undermines school boards by hindering their budget management and long-term planning processes.

“To have local governments now come in and question local spending decisions is very troublesome,” she said. “It feels like an interference with our role as elected decision makers.”

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