Foothills School Division dips into reserves to cover $730,000 deficit
By Cindy Ballance
Editor
The Foothills School Division is in the red by about $730,000 for the 1999/2000 school year, but is hoping next year’s revenues will improve.
It was reported by secretary-treasurer Murray Lloyd that the board’s financial position as of Aug. 31, 2000 is sound, however, there are no longer any surplus funds available for emergent expenses.
'We still have money in the bank at the end of the day, but we don’t have as much as we should have,' said Lloyd. The board originally projected that the division would see a deficit of about $300,000.
|
In this issue... Opinion Editorial Paul's Place News Sports Movies New!! Entertainment Classified Ads Real Estate  Christmas Gift Guide See this week's printed edition  Bisons beat up rivals 9-2 See Sports |
In order to offset the deficit, the board was required to transfer funds from its operating and capital reserves, therefore depleting the balances.
The board approved transfers of $123,961 from the school operating reserve (which depleted the reserve), $50,681 from the transportation operating reserve (with $118,484 remaining) and $566,864 from the capital reserve for buildings in order to cover the deficit.
'We don’t have any cash or short-term funding at all,' said Lloyd. 'To have no reserves on a $43 million budget, that is a thin string we are holding onto.'
Lloyd said the goal now is to get the reserves back to where they should be. He said that the board is currently developing new strategies with school administration in order to replenish the reserves and avoid such a deficit in future years.
'We do need to have something put away for a rainy day,' he said.
According to the division’s 1999/2000 audited financial statement, instruction (supplies, materials and contracted services) expenditures were significantly higher than anticipated and the number of credit enrollment units for senior high students was down resulting in a $300,000 shortfall — the largest portion of the deficit.
As a result, the division’s reserve funds for asset replacement have been severely depleted.
Also facing a deficit is the equipment for instructional purposes. The 1999/2000 school year was the second year of the board’s 'Technology Evergreen Plan' in which the board has purchased replacement hardware and made payments on hardware leases.
It is anticipated that the capital reserve for equipment deficit will be eliminated in four years.
The purpose of the reserves is to be able to, for example, replace eight school buses a year. However, Lloyd explained that unless the division can replace the reserves those areas will suffer.
'We had deliberate plans (for those reserves), but we had to put that by the wayside this year,' said Lloyd.
Although it has not yet been determined what strategies the division will take to replace the reserves, Lloyd said essentially the division simply needs to be frugal.
'Clearly we just have to spend less for operating purposes so at the end of the year we have some funds to put back into reserves.'
Lloyd also presented the division’s financial status report as of Aug. 31, 2000 which enables the division not only to develop new strategies for next year’s budget, but to make changes in the current year until Aug. 31, 2001.
Currently the division is seeing some opportunities in increased enrollment which in turn means more government funding.
Lloyd said enrollment numbers have increased by 102 students which related to about $400,000 in increased revenues.
'We had increased enrollment (which means) we have the ability to make changes right now,' said Lloyd.
However, some of that revenue has already been expended on additional teaching and support staff.
The overall position at the end of November is that the revenues are expected to increase from $43 million to $44.6 million and expenditures are expected to rise from $43.5 million to $44.5 million.
'We do have a better handle on expenditures this year,' said Lloyd.
A review of the current financial status of the division in order to propose next year’s budget will be presented to the board at a future meeting.
Santa arrives in style
Mr. and Mrs. Claus arrive at the Flare ‘n’ Derrick in Turner Valley on Saturday in style as they are transported to the Children’s Christmas Party in a fire truck. Mr. and Mrs. Claus visited with the children and took note of all the children’s Christmas wishes.
photo by Cindy Ballance
Five-per-cent energy levy planned for 2001
By Cindy Ballance
Editor
The Town of Okotoks is anticipating a five-per-cent energy rate levy on property taxes in early 2001 to help offset the bulging costs of energy.
The five per cent will equate to about $54 a year as a separate line item on residential property tax payments.
During a special meeting to approve the 2001 operating budget held Nov. 25, Okotoks council agreed that the energy levy was a viable possibility in order to alleviate some of the burdens of high energy costs.
'The 2001 operating budget has been particularly difficult to draft due to staggering increases in energy costs,' said Councillor Ed Sands, who helped develop the budget.
While attempting to isolate the situation, council will also make provisions for timely increases or decreases to the energy rate levy when the energy environment changes.
Due to an extremely unstable environment anticipated in 2001, Okotoks council is facing an increase of $387,000 in operating expenses due to spikes in electricity, natural gas and fuel.
Council recently approved an electrical energy aggregation with the Alberta Urban Municipalities Association (AUMA) which is expected to ease the burden of energy costs. Council also executed a franchise agreement with a local electric energy distribution company which is expected to generate money for the town.
A franchise fee of $3.20 per month will appear on residential electricity accounts in 2001. The franchise fee is expected to generate approximately $135,000 in municipal reserves.
According to a report presented to council, the situation places considerable pressure on any responsible approach to growth-related issues such as economy or industry development, scale of infrastructure and improved services.
Council will determine the energy rate levy when it sets the tax rate in April.
'Between today and April when the tax rate is being set we will be watching the market closely to see if there are any changes,' said Sands.
'If the province sets any additional rebate programs that would lower the cost of energy for the municipalities, that will be directly applied to the energy rate levy to lower it,' said municipal manager Will Pearce.
A five-per-cent energy rate levy is expected to generate approximately $210,000 which will be used to directly offset energy-related budget increases.
The remaining $177,000 increase in operating expenses will be generated from the four-per-cent increase in utility rates ($82,000) approved in September and $95,000 in electric rate rebates.
In addition, the provincial government’s announcement that education requisitions may decrease by 10 per cent will also alleviate some burden on local residents.
'The typical resident (if the education requisition is decreased) will see no net change on their property tax rate bill, not including the energy levy,' said Sands.
