School board may look for loan arranger

The Near North District School Board will examine the perils and pluses of going into debt to help it operate its schools.

Trustee Chris Rees asked staff Tuesday night to prepare a report about bank borrowing to supplement money the board receives from the province and through local taxation.

The board has just begun its 2004-2005 budget deliberations, and Rees said bank funds could help bridge the gap between expenses and revenues.

“If we wait for the provincial government to somehow come along with a big bag of dollars for us we’re going to be waiting for a long time,” Rees said.

“And if that means that we have to take a reasonable debt position, then that makes a lot of sense.”

No big deal
Rees isn’t advocating the board go into debt year after year, to the point it can’t pay its bills any longer.

“If we have a budget of $115 million and take on debt of between two and $5 million then it’s no big deal, but I’m not suggesting we take on a debt of $15 million,” Rees said.

“I’m saying we can satisfy key demands that we have today by putting off some capital expenditures that we would normally take out of operating funds, and put them on debt so we have more operating funds.”

Backlog of projects
Superintendent of business Tom Shultz says one of the most difficult challenges the board faces is in fixing schools up.

“The problem is we have a backlog of projects and there are more and more projects coming every year and the money we’re receiving on an annual basis isn’t sufficient to fund those requirements,” Shultz said.

Another problem the board faces is how to complete the funding to replace Frank Casey Public School, in Sturgeon Falls.

Last May the provincial Education Ministry announced it would give the board $246,000 annually for 35 years to build the replacement facility.

Shultz said the funding formula the ministry used didn’t result in enough money to pay for all of the new school's space requirements.

“We won’t know what the cost of the school will be until the project goes out to tender, but our best estimate is that the actual square footage cost is beyond what the ministry is funding,” Shultz said.

Mop up debt
Rees believes taking on a reasonable amount of debt will be of benefit, even if the board ends up finding itself in financial trouble down the line as a result.

Sometimes, he said, "you require a certain amount of brinkmanship in your financing policy."

The province, Rees said, would be more likely to come to the table to mop up debt "than they are to give you more money for program expenditures, and we’ve seen that with other boards in southern Ontario."

“And I still think that if you like playing the lottery that the government is going to come in over a five-year period and contribute to debt retirement. And it’s a more likely scenario than them giving us the same amount for increased program expenditures.”

Shows me the money
Board chairwoman Eunice Saari isn’t sure, though.

“I believe we have to go to the ministry and tell them to up the finances in the student-focused funding formula, so that would be my first choice,” Saari said.

“And I’m hopeful that the premier who said he was going to be the education premier comes across and shows me the money.”