Presentation to BoardJune 17, 2008

Presented by: J. A. Sabo, Associate Director – Leading Services & Treasurer of the Board

2008-09

BUDGET

York Catholic District School Board

APPROVAL OF THE 2008-09 FINANCIAL ESTIMATES

Objectives re: June 17, 2008 meeting

1. Review final draft revenue and expenditure projections for the 2008-2009 Operating Budget, and identify changes made from previous budget modules/information presented, as well as any new assumptions;

2. Present for Board approval the motions required for the approval and implementation of the 2008-2009 Financial Estimates, along with related/enabling motions.

3. Allow for discussion on the follow-up required for the completion of 2008-2009 “budget balancing process” and in preparation for development of 2009-2010 and future Operating Budgets.

BACKGROUND INFORMATION

Further to the May 27, 2008 meeting (and direction received from the Board as to approach and methodology for filing the Financial Estimates), the following has been completed:

• finalization of proposed expenditure adjustments

• finalization of proposed revenue adjustments

• finalization of proposed transfer from reserves adjustments

• development of proposed enabling recommendations

The revised revenue, expenditure, and transfer from reserve projections have been based on revisions to a number of assumptions and the concept of “targeted” adjustments.

Changes to major assumptions used in developing final budget projections have been identified in the supporting budget materials provided, some examples are as follows:

• Change in benefits renewal premiums

• Reduction in provision of staffing (f.t.e)

• Elimination of most increase requests

• Minor revisions to revenue calculations

“Targeted” adjustments reflect those adjustments to projections that are anticipated but not finalized and are as follows:

1. Revenue projections include a provision for $1.0 million for grants anticipated but not yet announced (Note: In 2007-08, a similar concept was utilized)

2. Expenditure projections include a provision for $1.0 million for targeted future expenditure reductions to be facilitated through further review and refinement of expenditure projections (Note: Future meeting of the Budget Analysis Committee of the Board will be scheduled to facilitate this action)

3. Transfers from reserves have been increased by $1.0 million (over initial provision of $0.5 million) to reflect anticipated more favourable 2007-08 financial results (Note: The total of $1.5 million in transfers from reserve reflects 0.3% of budget)

2008-09 Budget Projections

Total Operating & Non-operating

Total Operating

Revenue $ 490,486,922 $ 446,442,366

Expenditures 491,986,922 447,942,366

Balance ($ 1,500,000) ($ 1,500,000)

Transfer from Reserves

1,500,000 1,500,000

Balance Nil Nil

Note: The expenditure and revenue projections for 2008-2009 do not include any provision for 2008-09 Labour Framework adjustments. As a result, expenditure projections reflect current 07-08 labour provisions. Also, revenue projections do not include grants related to approved 08-09 labour framework adjustments

2008-09 Budget Projections

TOTAL

Operating $ 447,942,366

Non-Operating 44,044,566

TOTAL $ 491,986,922

Notes:

The Difference of $44.04 million between Total Operating & Non-Operating vs. Operating Only is the funding received for non-operating expenditure functions (i.e.):• School Renewal $5.53 million• New Pupil Places $25.44 million• Primary Class Size Capital $2.38 million• Good Places to Learn debt allocation $1.21 million• Pre-98 Debt $9.07 million and • Best Start $0.4 million

2007-08 Revised

Estimates2008-09

Final

Difference

$ %

EXPENDITURES

Operating $ 439.45 $ 447.94 $ 8.49 1.93%

Non-Operating 42.25 44.04 1.79 4.24%

$ 481.70 491.98 $ 10.28 2.13%REVENUES

Operating $ 436.75 $ 446.44 $ 9.69 2.22%

Non-Operating 42.25 44.04 1.79 4.24%

$ 479.00 490.48 $ 11.48 2.40%

Balance ( $ 2.70) ($ 1.50) ($ 1.20) (44.44)%

Transfer from Reserves 2.70 1.50 1.20 44.44%

Balance after Reserves Nil Nil Nil

2008-09 Revenue Projections - Final

Increase (Decrease) %

OPERATING REVENUEGrants for Student Needs 420,863,847$ 432,356,393$ 11,492,546$ 2.73%Other Grants 2,428,259$ 1,000,000 (1,428,259) -58.82%Other Revenue 6,022,760$ 5,686,400 (336,360) -5.58%Continuing Education 7,436,725$ 7,399,573 (37,153) -0.50%

TOTAL OPERATING REVENUE 436,751,591$ 446,442,366$ 9,690,774$ 2.22%

NON-OPERATING REVENUE 42,247,213 44,044,556 1,797,343 4.25%

TOTAL REVENUE 478,998,804$ 490,486,922$ 11,488,117$ 2.40%

REVENUE SUMMARY

Difference

2007-08 Revised Estimates

2008-09 Revenue

Projections Final

The 2008-09 Revenue Projections do not include any provision to support new labour agreements.

2008-09 Operating Revenue Projections

Grants for Student Needs

96.84%

Other Grants0.22%

Continuing Education

1.66%

Other Revenue1.27%

Grants for Student Needs Other Grants Other Revenue Continuing Education

OPERATING REVENUE

Grants for Student Needs 432,356,393$ 96.84%Other Grants 1,000,000 0.22%Other Revenue 5,686,400 1.27%Continuing Education 7,399,573 1.66%

TOTAL OPERATING REVENUE 446,442,366$ 100.00%

2008-09 Operating & Non-Operating Revenue Projections

Grants for Student Needs

88.15%

Other Grants0.20%

Continuing Education

1.51%

Other Revenue1.16%

Non-operating Revenue8.98%

Grants for Student Needs Other Grants Other Revenue

Continuing Education Non-operating Revenue

REVENUE

Grants for Student Needs 432,356,393$ 88.15%Other Grants 1,000,000 0.20%Other Revenue 5,686,400 1.16%Continuing Education 7,399,573 1.51%Non-operating Revenue 44,044,556 8.98%

TOTAL REVENUE 490,486,922$ 91.02%

Operating Expenditures 2008-2009 Budget

Expenditures by Object

Benefits11.31%

Salaries&Wages75.57%

Staff Development

0.50%

Fees & Contract.

4.98%

Capital0.88%

Other0.07%

Supplies6.68%

• Salaries & Wages 338,513,603 75.57%

• Benefits 50,679,173 11.31%

• Staff Development 2,242,354 0.50%

• Supplies & Services 29,934,487 6.68%

• Capital 3,933,278 0.88%

• Fees & Services 22,319,533 4.98%

• Other 319,939 0 .07%

• Total 447,942,366 100.00%

Fees4.54%

Other0.07%Non Operating

8.95%

Capital0.80%

Salaries68.81%

Staff Development

0.46%

Supplies and Services6.08%

Benefits10.30%

• Salaries & Wages 338,513,603 68.81%

• Benefits 50,679,173 10.30%

• Staff Development 2,242,354 0.46%

• Supplies & Services 29,934,487 6.08%

• Capital 3,933,278 0.80%

• Fees & Services 22,319,533 4.54%

• Other 319,939 0 .07%

• Non Operating 44,044,556 8.95%

• Total 491,986,922 100.00%

Operating & Non Operating Expenditures 2008-2009 Budget

Expenditures by Object

Proposed RecommendationsThe series of proposed recommendations (along with background

information and rationale for each) related to the approval of the 2008-2009 Financial Estimates are included on Attachment #8. They are organized into six groupings of motions as follows:

A Approval & Submission of 2008-2009 Budget Estimates

B Use of Operating Budget Surplus for EDC Purposes Re: Policy 610

C Monitoring of 2008-2009 Operating Budget

D Submission of the Revised Estimates

E Lobby Efforts re: Fair and Equitable Funding

F Finalization of the 2008-09 Operating Budget Provisions and Preparation for 2009-2010 Operating Budget

Supplementary budget support materialsIn support of proposed final 2008-09 Financial Estimates, three key support documents have been included:

1. Revenue Estimates – Update (7 pages – Pink)

2. Reserve Analysis – Update (4 pages – Yellow)

3. Expenditure Projections Update (13 pages – Green)

Note

As previously reported, expenditures must be categorized according to Ministry-defined envelopes. Based on preliminary categorization of expenditures included in the final projection, the 2008-09 (as well as projected 2007-08) Administration and Governance envelope will be “exceeded”, but will be less than the Ministry-maximum threshold of 15%.

No Deficit (Balanced Budget)

Compliance with Funding “Envelopes” Special Education Pupil Accommodation Administration and Governance see note

COMPLIANCE REPORTING

Summary/Conclusion

As noted at past Board meetings, the development of budget information has been focused on capturing accurate data and providing accurate expenditure and revenue projections based on assumptions identified.

Various individuals have been involved in the developing and coordinating of budgetary information. Unless identified in this report, all assumptions, issues and concerns presented at the previous meetings remain.

NEXT STEPSThe next steps following review of final draft projections and approval of the proposed recommendations are as follows:

1. Complete and submit Estimates to Ministry of Education in prescribed format and code of account groupings prior to the required Ministry deadline of June 30, 2008.

2. Prepare for implementation of the 2008-2009 Operating Budget effective for September 1, 2008, including continuation of budgetary restraints and strategies utilized in 2007-08.

3. Prepare for the scheduling of a series of Budget Analysis Committee meetings to facilitate implementation of Recommendation F.

4. Prepare and complete Revised Estimates for submission to the Ministry of Education prior to December 15, 2008.

5. Continue lobby efforts directly and through OCSTA to ensure the short and long term financial stability of the Board.

Proposed RecommendationsThe series of proposed recommendations (along with background information and rationale for each) related to the approval of the 2008-2009 Financial Estimates are included on Attachment #8. They are organized into six groupings of motions as follows:

A Approval & Submission of 2008-2009 Budget Estimates

B Use of Operating Budget Surplus for EDC Purposes Re: Policy 610

C Monitoring of 2008-2009 Operating Budget

D Submission of the Revised Estimates

E Lobby Efforts re: Fair and Equitable Funding

F Finalization of the 2008-09 Operating Budget Provisions and Preparation for 2009-2010 Operating Budget

NOTE: Background information and rationale for each of the proposed recommendations have been included in the budget support material.

A. APPROVAL AND SUBMISSION OF 2008-09 FINANCIAL ESTIMATES

RECOMMENDATIONS:

NOTE: Total estimate amount includes both Operating AND Non-operating. (Operating $ 447.94 million and Non-operating $44.04 million)

THAT the Board approve the submission of the Financial Estimates to the Ministry of Education for the fiscal year September 1, 2008 to August 31, 2009, based on operating and non-operating revenue, recoveries and transfers from reserves in the total amount of $491,986,922 as presented in budget documentation presented as at June 17, 2008.

B. USE OF OPERATING BUDGET SURPLUS for EDC Purposes

RECOMMENDATION: THAT the Board not designate 2008-2009 Operating Budget funds for the purpose of acquisition of school sites.

C. MONITORING OF OPERATING BUDGET

RECOMMENDATION:

THAT Administration continue to report to the Board through the Budget/Audit Monitoring Committee a summary of budget account transfers as well as any significant changes in budget assumptions and their projected impact on the 2008-2009 Operating Budget estimates and Revised Estimates.

D. REVISED ESTIMATES

RECOMMENDATIONS:a) THAT Administration develop and submit revised 2008-

2009 estimates to the Ministry of Education prior to December 15, 2008, and that a summary of the material changes between original and revised estimates be reviewed at the Budget/Audit Monitoring Committee, and

b) THAT should the calculation of Revised Estimates result in material changes to revenue or expenditure projections, Administration be directed to develop options and strategies for the Board to consider for implementation in the 2008-09 fiscal year.

E. LOBBYING OF GOVERNMENT

RECOMMENDATIONS:i) THAT the Board continue to lobby the government to ensure

equitable and adequate funding is available for all students in Ontario, and

ii) THAT administration be directed and authorized to lobby on behalf of the Board for changes in the new funding model where, in the opinion of administration, the principles of equity and adequacy are not being met.

iii) THAT the Board request the Ontario Catholic School Trustees Association to undertake a review of data regarding school board budgets with the objective of developing a coordinated approach with the Ministry of Education for addressing the short and long term financial needs of school boards.

F. FINALIZATION OF 2008-2009 OPERATING BUDGET PROVISION AND PREPARATION

FOR 2009-2010 OPERATING BUDGET

RECOMMENDATIONS:

1. THAT the Budget Analysis Committee be required to undertake the required analysis to enable the Committee to make final recommendations to the Board no later than December 15, 2008 with respect to:

a. Recommending strategies to ensure a balanced and compliant budget will result for the current year, and

b. Examining and recommending strategies for sustaining a balanced and compliant budget on a multi year basis.

2. THAT the Committee be requested to provide interim reports to the Board prior to the final report due December 15, 2008.

KEEPING THE BALANCE

FISCAL STUDENT

RESPONSIBILITY vs. OUTCOMES

THE CHALLENGETHE CHALLENGETHE CHALLENGETHE CHALLENGE

QUESTIONS ?QUESTIONS ?QUESTIONS ?QUESTIONS ?