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Property sale to help cut deficit questioned
Some New Westminster school trustees are questioning the district's ability to sell surplus property in Queensborough to help reduce its expected 2012-13 deficit of $2.2 million, or if it's even financially prudent to do so.
Included in a proposed list of moves to eliminate the spectre of a deficit is sale of the land that would net the district approximately $450,000. Although for budget purposes, the property has been pegged at being worth $1.8 million, current legislation would mean the district would only get 25 per cent with the province getting the rest.
However, parent Paul Johansen pointed out to the board at its meeting Tuesday, the sale of property to pay down the deficit, according to the B.C. Confederation of Parent Advisory Councils (BCCPAC) isn't allowed.
"It's perfectly within the rules. BCCPAC saying you can't do this is wrong," board chair Michael Ewen told Johansen.
Ewen said many districts have been able to make it happen, and New Westminster can't seek permission ahead of its decision and can only find out how the ministry would react once the board formally proposes it.
"You can't say [to the ministry] 'can we have the permission to think about it,' " said Ewen on Wednesday.
However, a ministry spokesman said Wednesday boards cannot put land sale funds directly into operating budgets, and any proceeds from a sale must be used for other capital asset purchases. In addition, ministerial approval is required for any sale of board-owned property—or for leases of 10 years or more—unless it's sold to another board or an independent school for education purposes.
But Ewen said the funds a property sale generates could go toward the dollars targeted for capital expenses in the operating budget such as for flooring and equipment replacement.
Trustee Casey Cook said selling the property could be problematic for the board.
"I understand the financial crunch, but to me using capital assets to ease pressure on operating is really, really dangerous territory," said Cook on Wednesday. "For New Westminster particularly because we're so tight for land that we really need to guard our capital assets."
Cook said because the district removed its board offices at New Westminster secondary in anticipation of building a replacement for the high school a few years ago it is paying out substantial money for leases. The eventual replacement will also mean a loss of the district's works yard. If the Queensborough property's location makes it unsuitable for either purpose, its sale could go toward new buildings making it capital paying for capital, said Cook. It would also eliminate the lease expense.
"Whether or not that property is suitable for use of the school board is secondary. It needs to be maximized. If we can take the yield off that and use it elsewhere that's good planning," said Cook. "I would be very hard pressed to support a sale. I'm not saying it's completely out, but it is very, very difficult for me not to recognize a need for capital money."
Ewen said if the board does not include the sale of the property when it votes on what will go and what will stay on Tuesday (Jan. 29) they better have alternate ideas in mind.
"The question becomes if we don't accept the recommendations then they need to be prepared to come up with other suggestions, and other staffing cuts."
During his presentation Tuesday, Sommerfeldt said if the board decides to sell it the sale must be done by June 30 or the revenue will be carried over to the 2013-14 budget.
Trustee MaryAnn Mortensen said the board will have to deal with replacing the works yard and district offices sooner than they think.
"We are going to have to have some funds to achieve that," said Mortensen. "We have to be concerned about the future here. We haven't done a good job of protecting the future and we have to do that going forward."
Sommerfeldt said a case could be made, given the history of the land's acquisition that the district would be eligible for the full amount.
In the 1960s, the district leased land it owned at Eighth Avenue and McBride Boulevard to Douglas College before it built its permanent campus on Royal Avenue. When that happened, the district sold the land to the Justice Institute of B.C. and used the funds to purchase property for Glenbrook middle school, Queensborough middle school as well as the property the board is now contemplating selling. If that timeline is proven correct, the district believes it may be eligible to receive the full price instead of 25 per cent.