You couldn't find a better example of B.C.'s shoddy approach to school funding than Education Minister Mike Bernier's half-baked, last-minute proposal that the Vancouver School Board sell Kingsgate Mall to cover part of its budget deficit.
The ongoing dispute between the provincial government and the board is, on one level, simple enough. The school trustees went through the budget process and decided that meeting student needs, after some cuts, would cost $502 million in the coming fiscal year.
Too much, said the provincial government. Based on its funding criteria and the legal requirement of a balanced budget, the district shouldn't spend more than $480 million.
So we had a standoff, with the board refusing to make the cuts needed to deliver a balanced budget by last Thursday's deadline. And willing to risk being fired by Bernier.
Bernier's recent responses have been foolish.
Last Tuesday -- two days before the deadline -- he wrote the board and proposed it sell the land it leases to Kingsgate Mall. That might take time, so the provincial government would graciously offer "almost $6 million in exchange for a small ownership share in the mall," Bernier said.
The board immediately wrote Bernier and warned releasing his letter publicly would violate the Information and Protection of Privacy Act. But Bernier released the letter anyway on Wednesday, and Thursday called a press conference to announce a "forensic audit" of the school district.
Let us count the dumb, cynical or silly things done here.
First, the proposal itself. The district owns the land under Kingsgate Mall, and has a 99-year lease with the Beedie Development Group, which owns the mall. The school board gets about $750,000 in lease payments annually; the land is appraised at more than $79 million.
It's a major asset. Bernier's proposal that the board make a snap decision to sell it, without analysis or market assessment, shows either he lacks basic business skills or is willing to advance a really bad idea to score political points.
Second, Bernier is proposing that the district sell a revenue-producing asset to cover operating costs. It's like a mechanic selling his tools to cover the rent on his shop. The fundamental problem isn't solved; it's made worse. When the proceeds from the sale are gone, the district would be in an even deeper hole. That's why the School Act says money from the sale of property "must be used by the board only for capital projects." Bernier would need to change the law to accommodate his plan.
Third, the government's proposal of $6 million promises less than one-third of the money needed to close the funding gap this year. It's more PR gesture than solution.
Fourth, Bernier's release of the letter despite the board's legal objectives is irresponsible. The lease with Beedie is up for renegotiation next year. The government has now signalled it wants the property sold. So Beedie has no incentive to negotiate an improved lease. And if a sale process starts, the company knows that the seller is somewhere between motivated and desperate and a low offer will likely be accepted. (Beedie Development has donated more than $300,000 to the BC Liberals since 2005.)
Fifth, Bernier looked foolishly hypocritical as he condemned the "political games" of the Vancouver board at a press conference while launching a Twitter campaign and announcing a "full, in-depth forensic audit" of the board. (Why not just a full audit? Because "forensic" just sounds so much more serious.)
Paying for another review of the Vancouver school district's challenges is like trying to beat a problem to death with dollar bills. The government spent about $360,000 on an E&Y (the consultants formerly known as Ernst and Young) audit of the district delivered 13 months ago. An annual special review is an expensive way to put off dealing with the real issues.
Trustees take the heat
I don't know if the Vancouver School Board should own the mall. Neither does Bernier.
But the decision to keep the property at Kingsway and Broadway in 1972 when the original Mount Pleasant School closed looks smart. The area was sketchy and property values low; today the neighbourhood is sought-after and property values have soared. Whether the board sells or negotiates a new lease, it will have done well by the 1972 decision to keep the land.
Bernier's talking points included the fact that 59 other school districts had submitted balanced budgets -- only Vancouver has failed.
But across the province, school boards have complained of underfunding and downloading.
The government's response has been ad hoc and politicized. On June 1, as school boards began reporting on the cuts needed because of provincial funding, Bernier announced that the government would backtrack on a $25-million funding cut it had ordered (following a $29-million cut the year before).
On June 15, the government reacted to angry protests about budget-driven rural school closures with a $2.5-million fund that would let some districts delay closings for a year. The fund was far too late -- staff and trustees in the districts had spent months considering closures and being berated by people in the affected communities. And, like Bernier's odd Kingsgate proposal, it offered no real solution to the funding crunch. It just pushed the problem 12 months down the road. (Until after the next election.)
It looks increasingly like school boards' main role is to take the heat for provincial government decisions. The government sets the funding levels with no consultation, imposes arbitrary cuts, negotiates the union contracts and defines the curriculum. Trustees try to deal with the consequences, and take the public's criticism.
Vancouver school trustees, by not making the cuts needed to present a balanced budget, have refused to accept that role -- and bet that the public will be on their side.
Bernier's response, all spin and no substance, suggests the government really isn't sure what to do about this challenge.