Prairie South School Division is projecting a year-end surplus of over $3.6 million, but that could turn into a deficit of $4 million if the province doesn’t provide expected capital funding.
The division budgeted a surplus of $2,352,672 by Aug. 31, but additional funding from the Ministry of Education of $1,365,987 for increased enrolment has pushed that estimate to $3,665,633, explained business superintendent Ron Purdy.
Prairie South is also expecting the province to provide $7.7 million in capital funding for the joint-use school project but won’t receive that this year if the project does not take significant steps forward, he continued. In fact, the division might only receive $1 million this year for that project.
If that’s the case, the final results will be “significantly different,” with a potential deficit of $4.1 million, Purdy said during the April board of education meeting while discussing the second-quarter financial report. The division would then be forced to use reserve funding to cover the operational deficit.
Meanwhile, the division expects to receive $2.4 million or preventative maintenance and renewal (PMR) projects, he added. However, that will not affect the operational deficit since it was already built into the budget.
After reviewing the other revenue areas, Purdy then highlighted some expense areas.
As of Feb. 28, governance expenses were $230,211, while the budget is $413,793. Purdy noted that variances in this area are due to school community council expenses, which were transferred to the instruction line category.
“They are typically under budget as a whole,” he said.
Administration expenses were $1.53 million out of a budget of $2.7 million. This area looks high, Purdy said, because of front-loaded costs such as paying software licences early in the year.
“Instruction is projected to go over budget,” he continued. “This is reasonable as we added staff in the fall to help with the enrolment increase. … We asked for more money because of more students, and we got $600,000.”
Instructional expenses — salaries — were $36.03 million by Feb. 28 out of a budget of $60.7 million. Conversely, Purdy noted that costs for extracurricular trips and professional development are still low because those areas have not returned to pre-pandemic levels.
Building expenses are projected to be under budget, but that will depend upon whether the division completes projects by Aug. 31 and the cost of materials, he continued. Meanwhile, the division will likely be over budget on heat and “crazy” gas expenses but under on electricity to offset those amounts.
Those fuel costs are taking a bite out of the transportation budget, Purdy added. The average monthly fuel bill is roughly $90,000, but in March it was $150,000. The division could spend another $200,000 on gas before the year is finished.
Trustee Robert Bachmann pointed out that during the recent provincial budget announcement, Education Minister Dustin Duncan claimed school divisions don’t face inflationary pressures. Yet, Purdy has illustrated how that’s inaccurate since some expenses have increased by $70,000.
“That is unfortunate that we face those pressures and we don’t have any recognition of the need for additional funding,” Bachmann said. “That doesn’t account for our increased capital costs. That doesn’t account for inflation for staff wage increases.
“And so, as we reflect on our current reality that’s only going to become more challenging next year,” he added, “it’s unfortunate that the words we hear from our provincial people are not completely accurate. And we’re the ones who are left to deal with it.”
Trustees later voted to have board chair Giselle Wilson write a letter to the minister about the inflationary pressures Prairie South is facing.
The next PSSD board meeting is Tuesday, May 3.
