Boosted by higher-than-expected investment returns and government funding, the 2024–25 school year shows roughly a $70 million positive swing for the Calgary Board of Education (CBE).
As discussed at the Nov. 4 CBE Board of Trustees meeting, the surplus stems from tighter system-wide spending, lower utility and insurance costs, and improved interest income.
“We kept a very close eye on our expenditures over the course of the year. We implemented additional financial procedures mid year to make sure that we understood how things were progressing and that we wouldn’t see an increasing deficit over time and then we had a number of unanticipated events that worked in our favor,” Superintendent, Finance/Technology Services, Chief Financial Officer, Corporate Treasurer, Brad Grundy said during the meeting.
The CBE also received a one-time provincial grant of about $3 million and recorded a $4.3 million gain from the sale of the former Dr. Norman Bethune School property.
Grundy said that modest temperatures allowed for savings on utilities, also contributing to the positive budget.
The CBE’s Accumulated Surplus from Operations (ASO) has climbed from a $43.8-million deficit last year to a $30.8 million surplus in 2024–25. Even so, much of this year’s surplus was used to cover existing commitments and approved projects, which reduced overall reserve balances even as the board ended the year in the black.
The board’s overall reserve funds have decreased compared to 2023–24. Total reserves now sit at $98 million, down $21 million from last year, with operating and capital reserves falling by $6.5 million and $6.6 million respectively.
A small deficit is essentially balanced: Superintendent
During the meeting, Trustee Susan Vukadinovic asked CBE administration if the ASO balance was seen as reasonable.
“Our ASO recovery plan is based on the premise that we will achieve an operating reserve balance of $35 million which is approximately two per cent of total expenditures. At that level, we think that that’s sufficient to address any unexpected or unbudgeted items that may come our way in any given year,” Grundy answered.
An ASO balance of two per cent of total expenditures would have been sufficient to tide the district through the COVID-19-impacted school years, according to Grundy.
“If we have a lower balance, then it does introduce a level of risk to our ability to continue operations in the event of something unexpected. If it’s much above two per cent then it is a significant amount of funding to take out of teaching and learning and hold for some unknown purpose,” he said.
“We believe that two per cent is kind of the sweet spot for the CBE in the delivery of public education.”
Grundy said that the board has previously approved a budget for 2024-25 with a $4 million deficit, effectively a balanced budget.
“The CBE operates on the assumption that a half of a per cent surplus or deficit is essentially balanced, given that we’re a $1.6 billion organization, so we don’t try to get to exactly zero. We allow ourselves a little bit of wiggle room,” he said.
“At the same time, anytime we have a deficit in the budget, we know that it will build and we implement prudent management to try and eliminate that deficit to the extent possible.”
