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Rainbow's finances better than expected. Why the school closures?

Board says it's losing $4M in provincial funds, and will have to draw on its reserves until savings from closures fully realized
Rainbow_School_Board
The Rainbow District School Board is losing $4M in provincial funds, and will have to draw on its reserves until savings from school closures are fully realized. File photo.

Despite an improved financial picture for its 2015-16 and 2016-17 financial years, the Rainbow District School Board is still looking at closing several of its schools.

That's prompted frustration from parents whose children would be affected by the potential school closures.

Although the board's financial situation has improved somewhat, Rainbow's superintendent of business, Dennis Bazinet, said the provincial cutbacks that triggered the accommodation review haven't changed.

The cuts mean the board will have to draw on its financial reserves until savings from school closures and consolidations are fully realized.

Last year, trustees with the Rainbow board launched an accommodation review that could result in several of the board's schools closing. 

With an unexpected spike in enrolment, the board backed off its plans to close some of the schools originally on the chopping block.

Trustees are expected to make a decision on the outcome of that accommodation review Feb. 7.

The provincial cutbacks affecting the board come in the form of the School Board Efficiencies and Modernization (SBEM) strategy, implemented over three years starting in 2015-2016. 

“Our estimate for Rainbow is that over the course of these three years, we would lose over $4 million because of just the change to the grants,” Bazinet said. “That has not changed. That is still occurring.”

He said by implementing the SBEM strategy, the ministry has posed a financial challenge to the board that's forced the accommodation review.

“That's how they exercise the pressure — they control the finances,” Bazinet said. “They're pressuring the boards to seriously review their needs and to look for efficiencies in the system, because enrolment is declining overall.”

For its 2015-2016 financial year, the Rainbow board thought it was going to have to draw $463,000 from its reserves, but it actually ended the year with a $3.6 million surplus. 

Only $1.4 million of that amount was added to the board's reserves, as the rest is set aside for items such as future liabilities.

“We certainly requested that senior administration, managers, principals exercise fiscal due diligence and try to mitigate this (provincial cutbacks) if an opportunity arose where they didn't have to spend the budget, to leave money on the table,” he said.

“We also had a change on our actuarial value of our employee future benefits. The cost was lest than anticipated, so it gave us the surplus. We added $1.4 million into our bank account.”

Rainbow also projected that for its current financial year, 2016-2017, it was going to have to draw $2.3 million from its reserves. 

But thanks to an unexpected spike in enrolment, that projection was revised to $852,000 this fall. This meant the board backed off on its plans to close some schools, although others are still on the chopping block.

Rainbow is also expecting to have to draw almost $1.6 million from its reserves in 2017-2018 and $1.1 million 2018-2019 before balancing its budget in 2019-2020.

The board's reserves, by the way, sat at about $24 million as of Aug. 31, 2016 – but Bazinet said only $11.4 million of that number is not already earmarked to pay expenses.

Rainbow expects to save $554,000 from school consolidations and closures in 2017-2018, $500,000 in 2018-2019 and $1.1 million in 2019-2020.

Another update on the board's projections for the current financial year will be provided at the Jan. 31 board meeting, Bazinet said.


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Heidi Ulrichsen

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