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SD41 to be on hook for seismic work?

Seismic upgrades at four Burnaby schools could be affected by a new education ministry policy that looks at school districts to share in the cost of such capital projects.

Until now, all capital projects at public schools have been funded by the provincial government.

The new policy is in response to an auditor-general's report in 2010 that found there is too much excess cash being held by public sector agencies, including school districts, said Ben Green, education ministry spokesperson. A subsequent auditor-general's follow-up report released last month reached the same conclusion.

To deal with the issue, the finance ministry launched its "cash management strategy" that requires districts to consider cost-sharing of capital and seismic projects.

In addition to addressing the auditor-general's concerns, the move will also save taxpayers money by reducing the government's borrowing costs, he said.

Those projects that are already under construction or where a project agreement has been signed are not affected, Green said, unless they go over budget.

"For districts that don't have significant cash balances or surpluses, provincial funding for capital projects will remain unchanged."

For those that do have surpluses, they'll be dealt with on a "project-by-project basis," he said. "These are conversations that the ministry will continue to have with districts as we move forward."

There are four Burnaby projects already in the pipeline that could be affected as they have not yet reached the project agreement stage—Alpha and Burnaby North secondaries and Montecito and Stride Avenue elementaries.

"We're still trying to seek more information in terms of what this means," said Greg Frank, Burnaby district's secretary-treasurer, on Monday.

Frank said there may be some confusion over the difference between surpluses and cash balances.

The district uses its modest surpluses each year to offset the shortfalls in its operating budget caused by provincial funding not keeping up with increases in costs.

Cash balances, on the other hand, are more of a snapshot in time of the district's bank account. While there may be significant balances there at some point, it's there to pay bills that it's earmarked for.

And while the district has a capital fund, the money in it has historically been provided by the province. The exception is when money is transferred from the operating side to fund new equipment, Frank said.

So if the district used available cash for a capital project, it would only end up in a deficit situation at the end of the year, which district's aren't allowed to do.

"We still don't understand the impact of this."

wchow@burnabynewsleader.com

twitter.com/WandaChow

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