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Budget Committee2009-2010 Budget

05 March 2009

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2009-20102009-2010 Budget Projection Budget ProjectionIn $MillionsIn $Millions

Preliminary Revenues $692.3

Preliminary Expenses $700.3

Projected Shortfall ($8.0)

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2009-2010 Budget Projection2009-2010 Budget ProjectionIn $MillionsIn $Millions

Change Projected Deficit

May 2008 Preliminary projection (14.0)

14 January 2009: Revised enrolment for 2009-2010 2.0 (12.0)

20 January 2009: Revision of grant and expenditure calculations 2.0 (10.0)

03 February 2009: One year bridge to fund Special Education shortfall 2.0 (8.0)

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2009-2010 Preliminary Grant and Non Grant 2009-2010 Preliminary Grant and Non Grant RevenueRevenue

In $MillionsIn $Millions Revised for Projected for

2008-2009 2009-2010

Grants for Students Needs 645.00 663.80

Includes approximately $2m for PDT enhancements

Non Grant Revenues

Rentals 3.80 3.80

Continuing Education 5.30 5.30

Other Grants 5.00 4.60

Staff On Loan 6.10 6.10

Tuition Fees 3.00 3.00

Interest Income 1.40 0.80

OCENET 1.00 -

Miscellaneous Revenues 3.40 3.40

Total: Other Revenues 29.00 27.00

Sub-Total: Grant and Non Grant Revenues 674.00 690.80

Reserves

Operating Reserves 1.90 1.50

Capital Reserves (Facilities Renewal projects) 2.10 -

Total Revenues 678.00 692.30

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Cause of $8.0 million ShortfallCause of $8.0 million Shortfall

Unfunded progression on teacher grids 5.3

Unfunded progression on non teacher grids 1.1

Economic increase on benchmark funding shortfall 0.9

Other cost increases from regulatory bodies 0.7

Total 8.0

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2008-2009 Teacher Grids2008-2009 Teacher Grids

Category A1 Category A2 Category A3 Category A4

0 Years of Experience $43,151 $44,702 $47,542 $49,162

OCDSB (combined) 5 Years of Experience $56,045 $58,783 $63,138 $66,495

10 Years of Experience $68,944 $72,867 $78,739 $84,094

0 Years of Experience $40,003 $41,946 $45,546 $48,901

Ministry of Education 5 Years of Experience $52,999 $55,686 $60,853 $64,311

10 Years of Experience $67,587 $71,220 $78,776 $84,060

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Salary Grid ComparisonSalary Grid Comparison

$35,000

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

$75,000

$80,000

$85,000

$90,000

A1 A2 A3 A4

OCDSB Ministry of Education

The above chart demonstrates that the s tarting salaries for OCDSB teachers is approximately $3,000 higher than funded by the Minis try of Education. The progress ion on grid is mostly funded when employees reach their maximum salary scale. The funding shortfall for 2008-2009 totals $4.7 million

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Salary Grids for Non Teaching StaffSalary Grids for Non Teaching Staff

Majority of salary grids for non teaching staff are 7 steps

Select grids are 4 steps Ministry does not provide any funding for

progression on grid Estimated cost of progression for 2008-2009 is

$1.1 million

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StaffingStaffingBased on 2008-2009 Revised BudgetBased on 2008-2009 Revised Budget

Continuing Education 0.3%

Facilities 10.6%

Transportation 0.1%

Central Adminis tration 2.6%

Instruction 86.3%

Total Staff: 6,629.43 FTE

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SpendingSpendingBased on 2008-2009 Revised EstimatesBased on 2008-2009 Revised Estimates

Salaries and Benefits81.2%

Debt1.9%

Facilities Renewal Plan1.7%

Utilities2.3%

Networks and Licenses

1.9%

Other6.1%

School Bus Contracts4.8%

$41.3M

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RESTRICTIONSRESTRICTIONS ON BUDGET DECISIONSON BUDGET DECISIONSInformation based on 2008-2009 Approved BudgetInformation based on 2008-2009 Approved Budget

In $MillionsIn $Millions

Amount Percentage

Fixed Costs $379.7 58.3%

Committed Costs for 2009-2010 $57.0 8.8%

Cost Neutral $152.5 23.4%

Uncommitted Costs $62.1 9.5%

Total $651.3 100.0%

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Uncommitted costs for 2009-2010 include the Uncommitted costs for 2009-2010 include the following:following:

In $MillionsIn $Millions

Facilities staff 16.0

School Support staff 3.7

Library and Guidance support staff 3.7

Professionals, Paraprofessionals and Technicians (non Special Education) 7.6

Central Administration 16.6

School budgets 8.1

Professional Development 0.5

Multicultural Liaison fees 0.4

Learning Opportunities (operations component) 2.1

Other salaries and operations 3.4

Total 62.1

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Risk FactorsRisk Factors

• Average Daily Enrolment projection contingent on construction of new schools

• Retirement gratuities and salary differential• Cost of benefits and type of coverage• Expected utility savings• Expected increase in refuse and recycling costs• Insurance premiums and claims• Funding in addition to Grants for Students Needs• Expected revenue from Qualifications and Experience grant• Expected revenue from Declining Enrolment grant

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EMERGING BUDGET PRESSURESEMERGING BUDGET PRESSURES Benchmark for salaries and benefits Special education funding model Incremental grants for high risk students New school construction, renovations and building maintenance Schools in high growth areas Transportation Research and analysis Client services, communications and consultation Amount of reporting Changing student demographics Changing expectations Class size: grades 4 – 8 Full day kindergarten implementation Cost of running new schools without closing existing space

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Fixed versus VariableFixed versus VariableCost Funding

Variable Includes costs such as: classroom teacherssupplies and occasional teachers

Total Variable Cost $4,630 $7,956

% of Total 48.34% 83.07%

Fixed Includes costs such as: curriculum,school administration, computer systems,special education teachers, professionals, $2,947educational assistants, telephones etc.

Coordinators and Consultants $33

Board Administration $274

Transportation $420

Facilities $1,020

Facilities Renewal $190

Other Capital $64

Total Fixed Cost $4,948 $1,621

% of Total Cost 51.66% 16.93%

Total Fixed and Variable Cost $9,577 $9,577

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Scenario 1Scenario 1In $MillionsIn $Millions

2009-2010 2010-2011

2009-2010 in year expense growth $8.0

2010-2011 in year expense growth $8.3

Use of one time available reserves in 2009-2010 ($5.0)

2010-2011 ongoing expenses that continue $5.0

Total Deficit $3.0 $13.3

Required ongoing reductions for 2009-2010 $3.0

Required ongoing reductions for 2010-2011 $13.3

Total $0.0 $0.0

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Scenario 1Scenario 1

• The in year projected deficit of $8.0 million is a permanent annual problem. Costs go up by this amount each year. Solving 2009-2010 does not solve 2010-2011

• This permanent ongoing shortfall will reappear in 2010-2011 (and each following year) and has been increased by 3.0% to reflect contractual obligations for a total of $8.3 million

• One time available reserves of $5.0 million could be used to balance the 2009-2010 budget

• As reserves are a one time source of funding, expenditures will have to be reduced by $5.0 million to stay within available funding unless new revenue is found for 2010-2011

• Projected shortfall for 2010-2011 includes: cost increase of $8.3 million for 2010-2011 plus $5.0 million of spending that no longer has a funding source for a total of $13.3 million – if there is no funding source, expenditures must be reduced to stay within available funding

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ReservesReservesIn $MillionsIn $Millions

Consists of the following:

Retroactive adjustment for Qualifications and Experience grant $4.3

Cumulative operating surplus from prior four years $2.7

Total $7.0

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Scenario 2Scenario 2In $MillionsIn $Millions

2009-2010 2010-2011

2009-2010 in year expense growth $8.0

2010-2011 in year expense growth $8.3

Use of one time available reserves in 2009-2010 ($5.0)

2010-2011 ongoing expenses $5.0

Total Deficit $3.0 $13.3

"Phantom" cuts $0.0

Deficit for 2009-2010 $3.0

Repayment of 2009-2010 deficit $3.0

Required ongoing reductions for 2010-2011 ($16.3)

Total ($3.0) $0.0

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Scenario 2Scenario 2

• This scenario assumes the same $8.0 million shortfall and use of reserves for 2009-2010

• “Phantom cuts” means ignoring the funding problem and approving reductions to balance the budget that would likely not actually be able to happen

• Doing this would likely result in a $3.0 million deficit in 2009-2010 which have to be repaid in the 2010-2011 budget year

• Projected shortfall for 2010-2011 includes: cost increase of $8.3 million for 2010-2011 plus $5.0 million of spending that no longer has a funding source plus $3.0 million for the 2009-2010 deficit recovery for a total of $16.3 million

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Scenario 3Scenario 3In $MillionsIn $Millions

2009-2010 2010-2011

2009-2010 in year expense growth $5.0

2010-2011 in year expense growth $5.2

Use of one time available reserves in 2009-2010 ($5.0)

2010-2011 ongoing expenses $5.0

Total Deficit $0.0 $10.2

Required ongoing reductions for 2010-2011 $10.2

Total $0.0 $0.0

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Scenario 3Scenario 3

• This scenario assumes the projected shortfall for 2009-2010 is revised to $5.0 million

• Projected shortfall for 2010-2011 includes: cost increase of $5.2 million for 2010-2011 plus $5.0 million of spending that no longer has a funding source for a total of $10.2 million

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2009-2010 BUDGET PROCESS2009-2010 BUDGET PROCESS

Budget ProjectionBudget Projection

Students, staffing, programs and projectionsStudents, staffing, programs and projections

ConsultationConsultation

Grant AnnouncementGrant Announcement

Budget ProposalBudget Proposal

ConsultationConsultation

Budget DebateBudget Debate

ConsultationConsultation

Final BudgetFinal Budget

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BUDGET SCHEDULEBUDGET SCHEDULEAssuming Ministry grant package is received by mid MarchAssuming Ministry grant package is received by mid March

Staff attends OCASC meeting to outline budget parameters

15 January 2009 7:00 p.m - 9.00 p.m.

Budget input and proposals received through OCDSB web site

January to end of March N/A

Budget projection and first meeting of Budget Committee. Review of updated budget parameters

05 March 2009 7:30 p.m. - 10.30 p.m.

Budget Committee Meeting - Presentation of Staff Proposed Budget for 2009-2010

27 April 2009 7:30 p.m. - 10.30 p.m.

Budget Committee Meeting - Public Delegation Night 11 May 2009 7:30 p.m. - 10.30 p.m.

Budget Committee Meeting - Public Delegation Night 14 May 2009 7:30 p.m. - 10.30 p.m.

Budget Committee Meeting - Public Delegation Night (If required) and Deliberations

20 May 2009 7:30 p.m. - 10.30 p.m.

Budget Committee Meeting - Deliberations Continued 25 May 2009 7:30 p.m. - 10.30 p.m.

Special Board - Ratification 01 June 2009 7:30 p.m - 9:30 p.m.

Consultation at Trustee Zone Meetings January 2009 to May 2009 TBD