Calgary Board of Education 2010/11 OPERATING BUDGET TABLE ...

Calgary Board of Education 2010/11 OPERATING BUDGET

TABLE OF CONTENTS

2010/11 OPERATING BUDGET INTRODUCTION ..........................................................................................................................................................................3 BUDGET OVERVIEW ..................................................................................................................................................................4 BUDGET PREPARATION AND REVIEW..................................................................................................................................9 KEY MESSAGES ..........................................................................................................................................................................12 OPERATING BUDGET SUMMARY ...........................................................................................................................................14 BUDGETED REVENUES .............................................................................................................................................................15 BUDGETED EXPENSES ..............................................................................................................................................................23 THREE-YEAR EDUCATION PLAN OUTCOMES, STRATEGIES and ACTIONS..................................................................29 BOARD OF TRUSTEES' ENDS-POLICIES ................................................................................................................................37 BOARD OF TRUSTEES' EXECUTIVE LIMITATIONS-POLICIES .........................................................................................39 AREA MAP ....................................................................................................................................................................................40

Calgary Board of Education 2010/11 OPERATING BUDGET

INTRODUCTION

The City of Calgary is located in western Canada in the southern portion of the Province of Alberta at the convergence of the Bow and Elbow rivers. It is situated in the Rocky Mountain Foothills at the crossroads of the Queen Elizabeth II Highway and the Trans-Canada Highway #1, which are primary transportation routes. The 300 kilometre corridor extending from Calgary north to Edmonton is home to one of the most innovative and successful populations in all of North America.

The City of Calgary is Canada's fourth largest city with a population of 1,061,724 (2009 census), which has grown at an average rate of approximately 2.6% since 1996. The city occupies an area of 848 km2 and is expected to experience a modest growth increase of GDP (Gross Domestic Product) of up to 2.8 percent.

The Calgary Board of Education (CBE) is the fourth largest school board in Canada, and the largest in western Canada. The CBE currently provides educational services to over 102,000 Kindergarten to grade 12 students in facilities located throughout the city and reflects roughly 18% of Alberta's K-12 student population. The CBE has in excess of 5,900 certificated teaching staff and approximately 3,100 support staff providing services to students. As such, the CBE is one of Calgary's largest employers and a significant contributor to Calgary's economy.

The CBE is a leading edge organization whose mission is "Educating Tomorrow's Citizens Today". The 2010/11 Operating Budget for the CBE totals $1,044.9 million and reflects a financial plan to support the implementation of the organization's Three-Year Education Plan and also reflects a commitment to Calgary citizens that students will receive the best possible public education, within the financial resources provided by the Province of Alberta.

Embedded in the CBE's budget is a significant proportion of costs that are ongoing in nature, regardless of the programs being provided. These costs include those associated with certificated and non?certificated staffing agreements, software license maintenance agreements, utility agreements and other various service and outsourcing agreements that have been signed for extended periods of time.

Within the Provincial Renewed Funding Framework, the CBE has considerable flexibility over the internal allocation of resources to meet the needs of its increasingly complex student population. However, due to the fact that approximately 74% of the budget is tied to permanent staffing, 3% tied to temporary staffing, 3% tied to services such as utilities and servicing debt obligations, 3% tied to student transportation, 3% tied to amortization charges and 7% for school based activities, flexibility is limited. In addition, there are certain provincial initiatives in the amount of $31.2 million that restrict the use of associated funds for specified programs for which the CBE will fully deploy for those designated purposes.

Throughout this document budget comparisons are made between the 2010/11 Operating Budget with the 2009/10 Modified Approved Budget. This comparison base for the prior year reflects revenues and expenditures at November 30, 2009 that are deemed to be sustainable into the future for the purpose of reflecting changes introduced in the 2010/11 budget year.

The CBE is committed to implement the Personalization of Learning for all students and will spend approximately 70% of all available resources in direct support of instruction in schools.

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Calgary Board of Education 2010/11 OPERATING BUDGET

BUDGET OVERVIEW

In the 2010/11 school year, the CBE will again focus on maintaining service levels to students in its schools and meeting priority needs. This will be achieved through investments in the personalization of learning, and other strategic initiatives embedded in the Three-Year Education Plan. In the preparation of the 2010/11 budget, the CBE is again faced with the situation of projected revenues not keeping pace with certain anticipated cost increases (particularly supports for the Regular Program, English as a Second Language and Special Education). In a fiscal environment of essentially static resources, emphasis has been placed on redeploying or reallocating resources and associated work in support of programs and services, and examining areas of the organization for synergies and operational efficiencies. The CBE has identified several changes to both staffing and service levels to ensure a fiscal situation that takes a view to the long term, as well as to honour the Board of Trustees' Values influencing the budget process and associated decisions, namely:

Students come first. Learning is our central purpose. Public education serves the common good.

The operating and capital budgets, presented to the Board of Trustees for their consideration and approval, represent the CBE's plan for the allocation of resources for the 2010/11 school year, including provisions for labour contract settlements where required. In developing this budget, CBE Administration considered the relationship between the proposed budget and the Board of Trustees Ends policies and targeted outcomes for the 2010/11 school year. As is the case with any financial planning exercise, some of the underlying assumptions used in the preparation of this budget may not occur exactly as predicted once the school year has commenced. Some of the factors that may change include:

? Actual fall allocation and deployment decisions of schools, between the numbers of certificated and non-certificated staff, may differ somewhat from the labour distribution assumptions made in this budget.

? Collective agreements with the CBE employees' unions and associations may be settled under different terms and conditions than those assumed. At this time, the CBE has signed collective agreements with the Alberta Teachers' Association (Calgary Public Teachers, Local 38), and the Canadian Union of Public Employees, Local No. 40, for the total duration of the 2010/11 budget period. The collective agreements with CBE Staff Association (Main Body and Professional Support Staff) will expire on August 31, 2010. In addition, the collective agreement with The Bargaining Council of the Calgary Board of Education Construction and Maintenance Skilled Trades Union will expire on January 31, 2011.

Affordable provisions have been made for settlements consistent with the bargaining mandates approved by the Board of Trustees.

? Provincial and Board decisions about the number and/or location of CBE schools and programs may change budget allocations. ? Funding requirements for Board-funded capital projects may change as a result of scope, timing or tender pricing differences that

may be outside the control of CBE administration.

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Calgary Board of Education 2010/11 OPERATING BUDGET

It should be noted by the reader that the 2010/11 Operating Budget is compared to the 2009/10 Modified Approved Budget for the purposes of analysis. This Modified Approved Budget represents the first quarter sustainable revenue and expenses for the 2009/10 year and provides a more substantive and timely comparison methodology.

The 2010/11 Operating Budget has been prepared using known information such as the Provincial Budget announcement of February 9, 2010, subsequent March 22, 2010 announcement by the Minister of Education and by making reasonable and prudent assumptions for other revenues and expenses. These are fully described as follows:

1. Revenues

The 2010/11 Operating Budget revenues from Alberta Education, under the Renewed Funding Framework (including transportation grants), are projected to be $932.2 million. This is an increase of $4.3 million, or 0.5% from the 2009/10 Modified Approved Budget. The majority of this increase is primarily the result of:

$51.9 million, or 5.6%, (representing no announced increase in the base instruction grant rates, tied to a 0.5% increase in the projected student enrolment, and a reduction and reclassification of Small Class Size Initiative funding, in the amount of $41.7 million, from targeted funding to being amalgamated into the base instruction grant)

$3.7 million, or 0.4%, (reflecting no announced increase in grant rates for differential cost factors and to reflect expected increased enrolments for English as a Second Language learners and an expected increase in kindergarten students identified as Mild and Moderate learners),

$0.4 million, or 0.1%, (for expected grant funding increases tied to student enrolment for Student Transportation and Plant Operation and Maintenance (PO&M)),

($1.2) million, or (0.2%) tied to reduced interest support on debenture debt ($0.5) million and a reduction of ($0.7) million tied to supported amortization, both as a result of corresponding reduced expenses,

$0.4 million, or 0.1%, for increased revenues for Alberta Initiative for School Improvement (AISI), Regional Educational Assessment & Consultation Services (REACH) funding, Institutional Programs and Children and Youth with Complex Needs,

($4.8) million or (0.5%) in one time revenues received and deferred for Classroom resources and utilized for Board funded capital assets in 2009/10,

($46.1) million, or (5.0%) in Small Class Initiative grant funding reflecting solely a reclassification from Provincial Priority Targeted Funding to Base Instruction funding as outlined above.

Funding allocations from Alberta Education are distributed in categories such as base funding, differential cost funding, Provincial targeted and other Provincial Support. The base and differential cost funding is simply a method of allocating funds to the CBE.

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Calgary Board of Education 2010/11 OPERATING BUDGET

The CBE, in turn, is delegated authority to address local needs with the flexibility to determine where these funds should be spent. Conversely, Provincial priority targeted funding is provided for specified initiatives, and the related allocations must be spent on the priority programs for which the allocations were provided. The CBE receives Provincial priority targeted funding for four programs: the Alberta Initiative for School Improvement (AISI), Student Health Initiative, High Speed Networking (Supernet), and Children and Youth with Complex Needs. The Southern Alberta Regional Educational Assessment & Consultation Services (REACH) program, Institutional Programs, Innovative Classroom Technology and CTS Evergreening fall under Other Provincial Support but must be fully spent on associated programs. As noted above, the Small Class Size Initiative funding was removed from targeted and amalgamated into the Base Instruction Grant for 2010/11.

For the 2010/11 Operating Budget, the CBE will not receive any grant rate increases in any funding category as outlined by the Province in its February 9, 2010 Provincial Budget announcement. The CBE will only receive approximately 0.5% increase in identified grant funding tied to the modest enrolment growth projection of 0.5% for the 2010/11 school year.

Funding from the Province for Facilities and Environmental Services includes two components: for Plant Operations and Maintenance, the CBE will receive approximately $82.8 million which is a $0.2 million increase over 2009/10 to operate, maintain and repair all buildings owned by the CBE. The CBE is again expecting $18.2 million for Infrastructure Maintenance Renewal (IMR) funding (third year with no increase) to facilitate large planned projects to assist in addressing the CBE's $742 million backlog of deferred maintenance. Funding allocations of $20.1 million are also budgeted to provide financial support for debenture interest (in addition to the funding for the principal repayment for Provincially supported debt on school buildings) and amortization of these capital building assets.

Outside of Provincial funding, all other revenues (including all Board mandated fee collections, school generated funds, discretionary program collections, interest income and leasing revenues) have been budgeted at $83.7 million, an increase of $28.3 million or 51.1% from 2009/10 levels. The majority of this change is tied to the mandated change by the CICA Handbook requirement to report School Generated Funds (SGF) at a gross level versus a net basis in 2009/10 and this has an accretive impact of $27.4 million in 2010/11. Other increases of note include an increase of $0.9 million for expected student transportation fees and increased planned revenue from the existing and new Education Centers of $0.3 million, increased rental and security monitoring revenue of $0.1 million, increased School Generated Funds Revenues of $0.7 million tied to service expansion, increased revenues from the activities within Global Learning services and Learning Support of $0.3 million partially offset by decreases in investment income of $0.9 million due to continuing low interest rates, lower uncertificated secondment revenues of $0.1 million, lower foreign student tuition revenue and Partnerships in Injury Reduction (PIR) of $0.4 million, and expected reductions in Regional Educational Assessment & Consultation Services (REACH) revenues from other school jurisdictions of $0.1 million.

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Calgary Board of Education 2010/11 OPERATING BUDGET

2. Expenses

This budget reflects many of the known increases already negotiated with employees' unions and associations and makes reasonable and affordable provision for other anticipated salary, benefit, and working condition adjustments. The provision of any amounts for salary adjustments in this budget and other budget assumptions do not in any way interfere with the rights of unions and associations to bargain collectively with the CBE.

Approximately 77% of the CBE's operating budget provides for the temporary and permanent salaries and benefits of CBE employees. The salary and benefit cost information presented in the 2010/11 Operating Budget is based on certain assumptions, on past experience and on the preliminary allocation and deployment decisions made within CBE schools. It is anticipated that, overall, actual staffing decisions will not vary significantly from the budgeted information, based on past experience.

Specific operating expenses are rising, but the economic environment has caused these increases to moderate. The CBE has limited discretion, for example, with respect to the market-driven increases in costs for utilities, construction materials, transportation, technology maintenance, licenses and operating supplies. As well, the organization is committed to fully fund its collective agreement obligations and to remain competitive for attraction and retention of staff. The CBE has attempted to mitigate these cost increases through redeployment of resources, exploring internal efficiencies, contracting to guarantee prices or implementing service level changes. Also impacting the CBE in 2010/11 is the mid-year move into the new Education Center and the associated operating lease costs and operational expenses.

As a result of the funding increases anticipated for the CBE in 2010/11 and staff deployment decisions made by school principals, the 2010/11 Teaching and Learning Budget projects a decrease in both the numbers of certificated staff and non-certificated staff within the CBE in the next school year as compared to the 2009/10 Modified Approved Budget. A decrease of 192.0 full-time equivalents (FTE) certificated positions (-3.2%) and a decrease of 79.0 FTE non-certificated staff positions (-4.2%) in schools from the 2009/10 Modified Approved Budget is currently projected. These changes primarily reflect lower staff levels tied to a lower resource allocation increase to schools than required to maintain positions beyond the projected enrolment growth and a reduction of $4.9 million in support for the Small Class Size Initiative Funding. Approximately 70% of total CBE resources are allocated to schools and Areas that serve students directly.

3. Use of Operating Reserves, Unrestricted Net Assets (UNA) and Designated Funds

Over the past few fiscal years, the organization, through Board of Trustees approval, has been able to transfer surplus operating funds into specified Operating Reserves. The Terms and Conditions of these reserves allow for the utilization of these reserves by the Board of Trustees for any purposes, including mitigating an operating deficit. The organization is responding to the shortfall of revenues not meeting all planned expenses for the 2010/11 school year by utilizing all available operating reserves, designated school funds and unrestricted net assets (UNA). The anticipated August 31, 2010 balance of all operating reserves, designated funds and UNA is expected to amount to approximately $19.1 million and will all be applied to the 2010/11 Operating Budget.

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Calgary Board of Education 2010/11 OPERATING BUDGET

The resulting accumulated operating deficit amount of ($10.0 million) will be forwarded to the Minister of Education for approval by June 30, 2010 once ratified by the Board of Trustees.

Consistent with other years' budget planning cycles, the requests for resources from within the CBE exceeded the funding available. However, through the oversight of Superintendents' Team, and the supporting Budget Councils (the Teaching and Learning Budget Council, the Environmental Services and Transportation Budget Council, and the Administrative Budget Council), a few significant initiatives were supported for implementation or enhancement in 2010/11 predominantly through an internal reallocation of resources. The most significant of these initiatives are as follows:

Teaching and Learning

New initiatives or enhancements for 2010/11

To support the operational requirements of Learning Support: o 2.0 Full Time Equivalent (FTE) Learning Leaders dedicated for Aboriginal supports o 1.0 FTE Psychologist for Aboriginal Support and culturally fair assessments o 2.0 FTE Strategist Support to reduce barriers for Aboriginal learning o 1.0 FTE Diversity Coordinator o Supplies and Services provisions for planning, implementation and cultural competency

Funded through reallocation of FTE resources, and reallocation of First Nations, M?tis and Inuit (FNMI) grant funding received from the Province.

To support the operational requirements of Learning Support (Early Learning): o 1.0 FTE Speech Language Support for children identified with Mild and Moderate needs o 1.0 FTE Strategist Support for children identified with Mild and Moderate needs o 1.1 FTE for Educational Assistant support o Supplies and Services provisions for occupational and physiotherapy needs

Funded through an enhanced increased grant revenue stream for additional children identified as Mild and Moderate special needs learners.

Facilities and Environmental Services, and Administration

New initiatives or enhancements for 2010/11 To support the operational requirements of Facilities and Environmental Services:

o Provisions for caretaker support at six new CBE schools Funded through a realignment of the staffing allocation formula for caretaking staff in all CBE schools. To support the operational requirements of Legal Affairs:

o Provisions for additional external legal services and for Freedom of Information and Protection of Privacy supports. Funded through a reallocation of resources and corporate gapping.

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