School board trustees bit the bullet Thursday night and voted for a bylaw that will likely cost them millions in lost revenue.
The Simcoe County District School Board and the Simcoe Muskoka Catholic District School Board met at the Catholic board’s offices in Barrie to vote on a new education development charges (EDC) bylaw. There was little about it that was new, however.
The boards had been working since the spring to update the document, which sets rates for the EDCs – collected from developers as the boards’ only means of funding the purchase of new school sites. It hadn’t been updated in five years, so a steep increase of nearly 300 per cent was being proposed. Then, earlier this month, the province threw a wrench into that plan when it ordered boards to freeze their rates while it conducts a review of the process.
That tied the hands of trustees, who had no choice but to pass a bylaw Thursday night that maintains the current rates.
“I don’t think anybody wants to approve this tonight,” said Jodi Lloyd, the public board’s vice-chair and trustee for Orillia, Ramara and Severn. “We’re doing this not because we want to but because we have to.”
The new bylaw will remain in effect for a year. It is estimated that by not hiking the EDCs to reflect increasing land values, it will cost the public board about $13 million and the Catholic board, about $5 million.
It leaves them in a precarious situation. The public board is looking to purchase property for five elementary schools over the next year – two in Bradford and one each in Oro-Medonte, Tottenham and Wasaga Beach.
The Catholic board could be looking at up to $20 million in site-acquisition costs over the next year.
“It’s very significant,” said Peter Derochie, associate director of education (business and finance). “This is bigger than just EDCs.”
If the money isn’t there to buy land for new schools, the challenge will be finding space for students in an area that is growing.
The province has indicated its review will take six to eight months. When, and if, the boards are allowed to increase the EDCs, it could be a case of sticker shock for some developers. They can pay the existing rate for another year, but the next increase could be much higher if the boards are forced to make up for lost revenue.
“If I was a developer, I wouldn’t be ordering the champagne just yet,” said Robert North, the public board’s trustee for Adjala-Tosorontio, CFB Borden, Clearview and Essa.
Some trustees seemed confused by the province’s actions. The Progressive Conservative government approved the boards’ EDC background studies, meaning it essentially agreed with the rate increase and the rationale behind it, yet it still implemented a freeze.
“I struggle putting something in place for another year that is out of date,” Lloyd said.
There are still plenty of unknowns, including whether the province will compensate boards for lost revenue and what changes will come as a result of the review.
In the meantime, board staff are hoping for the best as they continue to plan for their capital needs. That is difficult to plan for, though, when the Ministry of Education hasn’t asked for a list of their priorities.
“We continue to plead for a call for capital priorities. We’re just desperate for a call for capital priorities,” said Brian Jeffs, the public board’s superintendent of business and facility services.
Boards are usually asked to submit a list twice a year, but that hasn’t happened for almost 16 months.
The rate freeze took the boards by surprise. In the spring, with an election looming, ministry staff under the previous government decided not to approve EDC background studies, but it assured boards the process would get back on track regardless of the election results. When the PCs won, they decided they wanted more time.
Then, when they announced the freeze, “that handshake deal … was going to be put into legislative force,” said Jack Ammendolia, of Watson and Associates, the boards’ consultant during the EDC process.
When it comes time to revisit the rate increase, Ammendolia warned, “the charge would be higher as a result of this rate freeze.”
