Table f Cntents Intrductin... 2 Mega-result... 2 Values... 2 Guiding Dcuments... 3 Current Cntext... 4 Backgrund... 5 General Assumptins... 6 Revenue Assumptins... 8 Expense assumptins... 10 Opprtunities and Risks... 11 Cnclusin... 12 Glssary f terms... 12 Superintendent Brad Grundy, CA CIA Superintendent, Chief Financial Officer, Crprate Treasurer Cntributrs Crprate Finance staff Budget assumptins reprt 1 13
Intrductin Mega-result The Bard f Trustees sets as its Mega-Result that each student, in keeping with his r her individual abilities and gifts, will cmplete high schl with a fundatin f learning necessary t thrive in life, wrk and cntinued learning. We therefre knw that we must cnsider the needs f each individual student and his r her learning needs as we make budget decisins while balancing the needs acrss the rganizatin. Values Administratin s apprach t the perating budget is guided by ur values: Students cme first Learning is ur central purpse Public educatin serves the cmmn gd. Therefre, we will wrk t ptimize student learning while recgnizing the reality f ur fiscal cnstraints. We d ur wrk within the framewrk f Alberta Educatin s Inspiring Educatin which sets ut the fllwing values fr public educatin: pprtunity, fairness, citizenship, chice, diversity and excellence. Balancing thse values with the resurces at hand takes careful examinatin. We are als guided by CBE s Three-Year Educatin Plan, which fcuses attentin n persnalized learning, building ur prfessinal capital, engaging ur publics and stewarding ur resurces. Taken tgether these actin areas allw us t maximize student learning. In tackling the budget exercise we knw that public educatin is a shared respnsibility. With ur students, families, emplyees, cmmunities and Alberta Educatin in mind, we make budgetary decisins knwing we need t wrk tgether t build psitive learning and wrking envirnments. By sharing a Budget assumptins reprt 2 13
cmmn gal f student success, each ne f us cntributes t make it happen despite the difficult fiscal realities. Guiding Dcuments Inspiring Educatin Develping the qualities and abilities f ethical citizen, engaged learner and entrepreneurial spirit CBE Three-year Educatin Plan Persnalize learning, build prfessinal capital, engage ur public, steward ur resurces CBE Strategic Imperatives assessment and reprting, curriculum design, resurces fr learning, high schl success, leadership learning and practice. Budget assumptins reprt 3 13
Current Cntext The March 6 prvincial budget has presented challenges fr the CBE which are similar t thse we have experienced ften in recent years. Net funding has increased, fr which we are grateful. Hwever, fr the furth year in a rw ur perstudent funding has decreased, and the CBE is faced with the familiar requirement t adjust its spending t balance the budget. This is anther lean budget fr the CBE, and we will be faced with making difficult decisins during this budget prcess, which may affect students and parents. The assumptins underlying thse decisins are presented in this reprt. The prvincial budget prvided additinal funding t cver increased enrlment but nt enugh t cver ther cst increases. These cst increases include such things as inflatin n gds and materials, salary grid mvement and negtiated increases fr uninized emplyees. Fr instance, abut half f CBE teachers are eligible fr grid mvement, which are time-based increases in salary. Grid mvement fr teachers will increase csts fr the CBE by abut $7.6 millin in 2014-15. In additin, the Alberta Teachers Assciatin and prvincial gvernment ratified the Framewrk Agreement in May 2013. This included a number f enhancements expected t cst $1.8 millin in 2014-15 and an additinal $1.8 millin in 2015-16. As a result, the CBE will have t make chices as it faces a lean budget situatin fr 2014-15. We have limited reserve funds t tap. Reserves have been steadily diminished ver the past fur years f challenging budgets. In additin, significant staffing cuts were made t central services last year and schls (high schls). The impact f thse cuts n the CBE s ability t supprt student success is being carefully mnitred. Therefre, there is little rm t cut administrative csts which we will keep well within the gvernment-mandated 3.6 per cent r schl budgets. In shrt, the CBE is a system that is under strain as a result f rapidly grwing enrlment, high student and parent expectatins fr educatinal chice, increasing csts and gvernment revenues that haven t kept pace ver the past fur years. The challenge is t ensure that we d nt put the rganizatin at risk as we are Budget assumptins reprt 4 13
required t d mre with less. The rganizatin is als managing an extreme schl accmmdatin crunch which further increases cst pressures. This budget assumptin reprt prvides the first lk int hw administratin prpses t ptimize student learning while balancing the budget. Backgrund Alberta Educatin prvides 92 per cent f CBE funding. Fees, sales and services, and ther small revenue surces accunt fr the remaining eight per cent. Alberta Educatin funding is expected t increase t $1,115.0 millin frm $1,071.7 millin budgeted in 2013-14. This is a $43.3 millin increase, r fur per cent. Despite the increase, the per-student funding prvided by Alberta Educatin is dwn three per cent frm $10,077 in September 2011 t $9,780 expected in 2014-15. At the same time, enrlment is frecast t be 113,995 fr 2014-15. This is a year-ver-year increase f 3.3 per cent r 3,619 new students t be accmmdated within the system. In all, 86 per cent f prvincial funding is spent n staffing csts. 91 per cent f staff psitins are wrking directly in schls (based n the 2013-14 budget data). The CBE s prgrams and services are delivered under cllective agreements with fur unins: Alberta Teachers Assciatin, Staff Assciatin, skilled trades and Canadian Unin f Public Emplyees. The CBE als has abut 200 staff that are exempt frm the abve nted unins. This grup makes up tw per cent f ttal staff psitins. Other than superintendents and directrs, 86 per cent f the exempt grup (172 psitins) are nt in senir leadership psitins. This grup f emplyees includes, but is nt limited t, administrative assistants; human resurces, cmmunicatins and finance persnnel; business analysts; engineers; managers and supervisrs frm varius service units. Budget assumptins reprt 5 13
In additin, the CBE has entered int a number f lng-term service agreements t supprt the delivery f prgrams and services. These agreements are in the area f infrmatin technlgy, utilities, transprtatin and leased facilities. Lng-term agreements supprt cst certainty and increased cst effectiveness. Additinal csts are incurred because we have 27,000 students transprted daily via 981 bus rutes using mre than 750 buses. In additin, 42,600 students are supervised ver the nn hur (2013-14 data) in CBE schls. In respnse t student needs and high public demand and expectatins, the CBE ffers a wide variety f prgrams and prgram delivery ptins, including but nt limited t cmmunity schl based prgrams, summer schl, ff campus prgrams, utreach, Chink Learning, nline learning, hmeschling, Abriginal prgrams, art-centred learning, English language learners, Canadian studies, language prgrams, science schls, Mntessri, Traditinal Learning Centres and gender specific schls. A pressure n the system is the fact that 57 per cent f CBE schls were built prir t 1970 and are in need f maintenance and repairs. The CBE s deferred maintenance has increased t $969 millin. This is grwing at a rate f apprximately $40 millin per year. Given all f this, with anticipated revenues f $1,207.7 millin and expenses prjected t be $1,235.4 millin, the current 2014-15 shrtfall is $27.7 millin. General Assumptins The budget will: Supprt the CBE mega-result, peratinal expectatins and cre values: Students cme first; Learning is ur central purpse; and Public educatin serves the cmmn gd. Supprt the directin prvided by Inspiring Educatin, the Three-Year Educatin Plan and the CBE s strategic imperatives which fcus n: Budget assumptins reprt 6 13
Assessment and reprting Curriculum develpment Resurces fr learning High schl success; and Leadership learning and practice. Recgnize that principals make the ultimate schl-based spending decisins, including staffing, within the resurces allcated. Supprt the prvisin f safe and healthy learning envirnments fr students and staff. Prvide fr CBE-funded capital prjects t meet the pririties established by ur Three-Year Educatin Plan and strategic imperatives. Take a CBE-wide apprach, bearing in mind that all wrk is dne in supprt f student learning. This means that the budget will ensure that the rganizatin can cntinue t prvide basic supprts t cmply with Bard f Trustees mandated Operatinal Expectatins, legal requirements and the Schl Act. Supprt ur cmmitment t attracting and retaining the highest quality emplyees that will enable the rganizatin t achieve its plicies. Priritize investment in infrastructure and prgrams t address current challenges and anticipate future-year enrlment grwth. We will make critical investments nw that will psitin us fr the future. Avid putting the rganizatin in lng-term fiscal jepardy. Be balanced. Budget assumptins reprt 7 13
Revenue Assumptins Alberta Educatin 92% Fees 3% Other 3% Sales and services 2% Our budget revenue assumptins are: Operating reserves will be applied in a manner cnsistent with Alberta Educatin s encuragement t use reserves t supprt the delivery f services: Many schl bards have savings fr a rainy day. Gvernment encurages schl jurisdictins t make every effrt t maintain the level f services t ensure student success. Alberta Educatin (March, 2014) A prudent level f reserves will be retained t address unanticipated peratinal csts. Operatinal Expectatin 5: Financial Planning requires that Administratin strive t develp and maintain an perating reserve base equal t ne per cent f jurisdictin revenues, whenever pssible. Alberta Educatin will fund: enrlment grwth at 2013-14 rates a tw per-cent-rate increase fr Inclusive Educatin and the Small Class Size Initiative the 0.41 per cent general wage increase under the Alberta Teachers Assciatin cllective agreement We will apply Alberta Educatin targeted funding fr the specified purpse as directed. All revenue frm Alberta Educatin related t transprtatin, nn supervisin and instructinal materials and supplies (ISM) is fully applied t the cst f these services. There will be n cntributin frm the Budget assumptins reprt 8 13
instructinal budget t supprt fee-based prgrams and services. The full Transprtatin Fee Reserve at Aug. 31, 2014 will be applied t mderate transprtatin fee increases. Fee revenue fr transprtatin, nn supervisin, and instructinal materials and supplies will fully fund the gap between Alberta Educatin funding and direct prgram csts, including waivers and bad debts. Opprtunities t grw nn-alberta Educatin revenue will be explred where it is cnsistent with ur visin and values. Lease revenues frm charter schls will cntinue t be restricted by Alberta Educatin. In mst cases revenue is $1 per year. Facility rental rates are set t break-even (cver direct csts) as set ut in Administrative Regulatin 8004. Revenue frm the sale f CBE-wned prperty is nt anticipated because all such prperties are currently utilized. The CBE will cntinue t participate in the Jint Use Agreement framewrk with the City f Calgary and the Calgary Separate Schl District respecting land and schls. All pprtunities t recver fld-related csts will be pursued. Investment incme n CBE cash balances will be assumed t accrue at a rate averaging six per cent ver the medium t lng term. Shrt-term investments will average ne per cent. Budget assumptins reprt 9 13
Expense assumptins Our budget expense assumptins are: The budget will include the csts f cvering current cllective agreement increases, including general wage increases, emplyee salary grid mvement, and benefits. Other salary adjustments which impact 2014-15 will be funded thrugh access t perating reserves. Fr the secnd budget year in a rw, there will be n salary increase fr Superintendents Team. CBE expenses increase in relatin t enrlment grwth. Enrlment prjectins are based n the Sept 30, 2013 actual enrlment f 110,763 and reflect the City f Calgary frecasted ppulatin changes, market share, and student retentin rates. Frecast enrlment figures are: 2014-15 113,995 2015-16 117,301 2016-17 120,060 Cnsistent with the Alberta Educatin budget, n inflatinary increases have been built int the 2014-15 budget. Prjectins fr 2015-16 and 2016-17 will include an inflatinary increase f 1.6 per cent based n the five-year trend fr Calgary. The CBE will meet all cntractual bligatins. All knwn changes in cntractual bligatins will be included based n current infrmatin. Examples include: The budget will cver significant increases in the cst f insurance premiums and uninsured lsses. The increase in 2014-15 is budgeted at 72.6 per cent, r $2.1 millin. The cst f utilities cntinues t increase with a year-ver-year increase f 1.4 per cent. The CBE will face cntinued accmmdatin challenges (new schls dn t cme int service until fiscal 2016-17) as enrlment numbers increase and mre students frm the uter areas are bussed t schls with available capacity. Budget assumptins reprt 10 13
System administratin csts will remain within the prvincially mandated cap f 3.6 per cent f ttal expenditures. Current prjectins suggest that the CBE s administrative csts in 2013-14 will be at 3.1 per cent. Nte: The average f the three ther Alberta metr bards fr 2013-14 is reprted at 3.1 per cent: Calgary Cathlic Schl Divisin is reprted at 3.3 per cent, Edmntn Public Schls at 3.2 per cent, and Edmntn Cathlic Schls at 2.5 per cent. Opprtunities and Risks The single biggest pprtunity presented by these assumptins is that the resulting budget will cntinue t supprt the reliable achievement f the Bard s mega-result cnsistent with the values f students cme first, learning is ur central purpse, and public educatin serves the cmmn gd. The assumptins included in this reprt were develped based n the best infrmatin currently available. Given that assumptins have been made and there are uncertainties in the related estimates, there is a risk that actual results may differ. Ntable risk areas include: The budget is lean. Chices made in reaching the final budget may impact students success. Actual csts may be higher than assumed. Specific areas f cncern include the cst f utilities, wages, insurance premiums and uninsured lsses. As the deferred maintenance backlg cntinues t grw, ur facilities are mre susceptible t extreme weather events. This reality culd increase csts beynd assumed levels. Fur years f reductins in funding per student have resulted in supprt services that are minimally resurced. Significant events r brad system changes culd impact the cntinuity f peratins. Budget assumptins reprt 11 13
Cnclusin These assumptins will allw us t build a budget that is balanced and stays true t ur values. Inevitably, this challenging budget will impact students and families and require us t make chices arund the use reserves, increases in fees, and learning supprts and schl spending levels. Our chices will be guided and infrmed by ur values. Glssary f terms Alberta Educatin revenue Bard-funded capital Capital assets Cllective agreement Enrlment Exempt emplyee Grid mvement Operatinal Expectatins All funds received frm Alberta Educatin, including amrtizatin f Alberta Educatin-funded facilities. This is smetimes referred t as prvincial funding. The acquisitin f all capital assets ther than thse specifically funded by Alberta Educatin. This includes technlgy, maintenance equipment, furniture and fixtures, musical instruments, and ther capital purchases These are gds that are acquired that have a useful life that extends beynd ne year and are f mre than minr value. Fr example, cmputers, mst musical instruments, furniture, machinery, etc. An agreement between a unin r assciatin that sets ut terms and cnditins f emplyment including general wage increases, benefits, grid mvement, and ther emplyment terms. Ttal number f students including thse enrlled in Hme Educatin, utreach prgrams and Chink Learning Services. Emplyees wh are nt cvered by a cllective agreement (apprximately 200 psitins). Exempt emplyees d nt experience grid mvement. Superintendents and directrs make up the minrity f this grup. Apprximately 86 per cent f the exempt grup are staff wh are nt in senir leadership psitins. This grup f emplyees includes, but is nt limited t, administrative assistants; human resurces, cmmunicatins and finance persnnel; business analysts; engineers; and, managers and supervisrs frm varius service units. The increase in the salary paid t an emplyee based n mvement thrugh prgressive salary grid levels. The mvement is based n the passage f time. Emplyees cvered by a cllective agreement may benefit frm grid mvement. Plicies established by the Bard f Trustees by which the Chief Superintendent s perfrmance and successful peratin f the rganizatin is evaluated Budget assumptins reprt 12 13
Reserves System administratin Ttal revenue Dllars that have been accumulated frm prir years that are available t supprt current year prjects, prgrams and services. Reserves can be restricted by bard mtin r external parties. The verall management, administratin and educatinal leadership f the CBE at the system level. Als includes Bard f Trustees remuneratin and ffice budgets. Examples include functins in human resurces, finance, infrmatin technlgy, legal and cmmunicatins that prvide system-level supprt. All funds received frm Alberta Educatin plus all ther revenues. Budget assumptins reprt 13 13