HomeMy WebLinkAbout07 OPSBA's Fee Membership StructureBoard of Directors Item # 7.2(a)
ORIGIN: Executive Office
DATE: February 28, 2008
ISSUE: OPSBA Membership Fee Formula
Background:
OPSBA's fee formula has been the subject of ongoing review since the amalgamation of
school board associations in 1989. A key focus of these reviews was assessing whether the
formula calculates membership fees in the most equitable manner possible. Many models
have been reviewed over the years, and modifications have been made to reflect members'
input. With the reorganization of the school board system, as a result of Bill 104 and Bill 160,
it became evident that an alternative fee formula was needed. In January 1998, at OPSBA's
Special General Meeting, the new enrolment based formula model was adopted replacing the
former Operating Expenditures based formula. These two formulae are described below.
Operating Expenditures Formula (Pre -1998)
The operating expenditures formula incorporated three criteria:
• the use of a base fee
• a fee factor applied to individual member board's actual operating expenditures
(Ministry defined total expenditures less capital expenditures)
• a reduction factor applied to actual operating expenditures greater than 1/36 (the
number of member Boards) of the total of all member Boards' actual operating
expenditures.
Because this formula calculated individual membership fees relative to all other member
boards' operating expenditures, it created membership fee fluctuations even if the total
OPSBA membership fee did not change and a board's operating expenditures remained the
same, year over year. The comparison of one Board's actual operating expenditure to the
total of all Boards actual operating expenditures was used as a measure of ability to pay.
Changes to specific grants (ESL, LOG, French as a Second Language, etc) could vary
significantly from year to year between Boards.
Enrolment Based Formula (Post 1998)
The Enrolment based formula incorporates two criteria:
• the use of a base fee
• dollar fee factors, in declining values, are applied to incremental blocks of student
enrolment numbers for each member Board
In arriving at this formula approach, OPSBA considered a number of different bases for
calculating membership fees other than the use of actual operating expenditures. These
included assessment, number of teachers, and student enrolment numbers for each Board. A
formula was sought that would generate a fair levy for each member Board with consideration
for the existing membership fee of each Board.
Budget Guidelines
After several years of fixed operating budgets, a proposal was presented at the Executive
planning session in August 2005, and subsequently to the Board of Directors, to have
included in the OPSBA draft budget an increase using, as a guideline, the last percentage
increase in the Provincial grants for school Boards. That would provide an annual adjustment
to OPSBA's budget of a percentage equivalent to the average of the economic adjustments
applied to the provincial funding model benchmarks.
Development of the 2007108 Budget
While, as noted earlier, there have been year -to -year fluctuations in membership fees even
when the Association's total budget remained frozen, the combination of an increase to the
budget for 2007 -2008, the significant impact of overall declining enrolment, and "pocket"
enrolment increases in four member boards, created wider than normal fluctuations for many
of the Boards. In response to this increasing challenge, a general review of the fee structure
was undertaken by the Finance Analysts to determine what, if any, other methods could be
used to continue to provide an equitable allocation for Boards while creating greater stability
to the fees calculations.
Review of OPSBA Membership Fees for 2008 -09
In response to the direction to continue to provide an equitable allocation for Boards while
creating greater stability to the fees calculations, the Finance Analysts examined a number of
alternative scenarios and ran over numerous possible combinations. Following this review,
the Finance Analysts concluded that a more equitable approach would be to apply caps on
the maximum and minimum percentage increase or decrease on a member Board's year
over year OPSBA fee. This could provide greater stability in fees for all boards. In addition,
the Finance Analysts felt that it would be better to base the fee calculation on the most recent
known student enrolment rather than a projected enrolment.
Based on an analysis of the above -noted scenarios, the Finance Analysts are of the view that
the following recommendation offers an approach that creates the greatest possibility of
equity and stability for all member Boards.
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RECOMMENDATION:
It is recommended that the current structure of the OPSBA fee formula be maintained
with the following modifications:
• Maintain the existing formula, adjusted by the OPSBA year over year
budget change;
• Calculate fees on the basis of the most recent known student enrolment
rather than the member Board's projected student enrolment (i.e. for 2008-
09 fees, use the 2007 -08 enrolment from the Revised Estimates);
• Provide a cap on the maximum and minimum percentage increase or
decrease on a member Board's year over year OPSBA fee to create
greater stability in fees calculations.
ACTION:
For discussion in preparation for a decision at the April Board of Directors meeting.
Staff Resource: John McKnight, Finance Associate
Wayne Burtnyk, Finance Consultant
Brian Cain, Finance Consultant
Gail Anderson, Executive Director
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