HomeMy WebLinkAbout10b Notice of Motion Trustee Morse re Capital Project DebtOttawa - Carleton District School Board
TO: Chair and Members DATE: 25 May 1998
of the Board
RE: Capital Project Debt
Trustee Morse has given notice that she will move as follows at the 25 May 1998 Board
meeting:
WHEREAS the Ministry of Education and Training announced on 14 May 1998 that
it will provide funding to pay the cost of all outstanding capital project debt in
existence as of that date (Annex 1 attached);
WHEREAS the Ministry of Education and Training had previously refused to fund the
Ottawa Board of Education capital projects, at least partially due to the negative
grant issue;
WHEREAS the Ottawa Board of Education arranged its fiscal affairs to self fund the
entire cost of the Hopewell and Hilson reconstruction projects due to the lack of the
Ministry of Education capital funding;
WHEREAS the Education Improvement Commission in 1997 has approved capital debt
of $7,471,156 for the Hopewell project;
WHEREAS the Ministry of Education and Training changed its funding formula for
school boards on 25 March, 1998 so that all boards are to be on an equal financial basis
and so ending the negative grant issue;
Therefore be it resolved:
That the Board fully utilize the Education Improvement Commission approved debt for
the Hopewell project, resulting in an additional $3.7 million of 1997 surplus for the
Ottawa Board of Education.
That the Board fund Phase I of the Hilson project through incurring capital debt,
resulting in an additional $2.9 million of 1997 surplus for the Ottawa Board of
Education.
That the resulting $6.6 million be placed in a Working Capital Reserve Fund.
Trustee Morse will provide further rationale for her motion at the meeting.
Board
Secretary of the Board
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Memmwxh m to. Chairs, District School Boards
Chairs, District School Authorities
From: David 3. Johnson
Minister
Date' May 14, 1998
Subject: Capital- Related Debt and Accumulated Operating Shortfalls
On March 25, I announced the Government's eontmitment to stable sperAng for education for each of the
next three years. This commitment was reaffirmed in the Minister of Finance's 1998 Ontario Budget
delivered an May 5.
The province announced that it has assumed the responsibility for school boards' debt service costs over
the next three years, during which restructuring will occur. These committttetnts include debentures and
various forms of short term financing for capital project commitments entered into by the former boards.
The province will provide funding to school boards to meet these debt service costs in 1998/99,1999/00
and 2000/01. Following this three year period, school boards will be able to include these debt service
costs in their annual calculation of funding entitlement under the pupil Accommodation Grant
In addition, am -time adjustment funding will be provided to assist school boards in .a smooth
implementation of the funding model. Funding will be provided during the 1 998 short year to eliminate
operating shortfalls that had !ern accumulated by the former boards as at December 31, 1997. Dealing
with these shortfalls may be creating difficulties for certain school boards' implementation of the new
funding model.
With the one -time additional funding to eliminate operating shortfalls, and the provision for capital debt
service costs, the government is smoothing the transition to the new funding model and enabling boards to
dedicate more resources to the classroom.
The Deputy Minister will be providing further details to Board Directors and I attach a copy of her letter
for your information. _
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David J_
Minist
cc: Directors of Education
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Memorandum to: Directors of Education
From Veronica Lacey
Date: May 14, 1998
Subject: Capital - Related Debt and Accumulated Operating Shortfalls
I am writing further to the Minister's May 14, 1998 memorandum to Board Chairs on the
above subject. As indicated by the Minister, the province announced that it has assumed the
responsibility for school boards' capital debt service costs over the next three years. Funding
will also be provided during the 1998 short year to eliminate operating shortfalls that had been
accumulated by the former boards as at December 31, 1997.
The province will provide funding to school boards to meet their capital debt service costs in
1998/99, 1999/00 and 2000101. 1 have asked Drew Nameth of the Ministry and Brian Cain of
the Toronto District School Board to co -chair a committee of government and board
personnel to oversee the collection of information regarding operating shortfalls and capital
related debt and to recommend appropriate approaches to address this issue in both the
short and long term.
This will include the capital related debt (i.e. debentures, long term capital loans and capital
not permanently financed) incurred by boards prior to December 31. 1996 and debt incurred
or which will be incurred for capital commitments that had been made as of May 14. 1998.
Commitments made after May 14, 1998 for projects not previously approved by the Ministry
or by the Education Improvement Commission will be the sole responsibility of the board.
The collection of information regarding capital related debt is to be completed by boards no
later than June 19, 1998- ( expect the joint committee to finalize its recommendations by
September 30. 1998 following an analysis of the data.
Beyond this three year period, school boards will be able to include these debt service costs
in their annual calculation of funding entitlement under the Pupil Accommodation Grant which
will be reviewed annually taking into account the recommendations made.
If you have any questions or require additional information regarding this issue, please
contact Drew Nameth at (416) 325 -4030 or e-mail him at drew.nameth edu ov.on.ca.
Veronica Lacey
Deputy Minister
cc: Senior Business officials
MAY 15 '96 09:20
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