OPINION: How school district amalgamation led to Creston’s inherited debt

In my world, a debt unpaid is a debt owed.

By Allan Gribbin | SD8 School Trustee

When is a debt unpaid, not a debt owed? In my role as a local school trustee, I have been providing some of the historical backgrounds that motivated me to take on this job because as a parent, former teacher, and taxpayer, I feel that we have all been short-changed by the amalgamation of the Creston School district with the larger Nelson District. My goal here is to summarize some of the events which helped me come to this conclusion.

In my last column in the Advance, I ended asking how we had fared with the amalgamation of the Creston and Nelson school districts which was made official on Dec 2, 1996. Up to that point in time, all evidence shows that the Creston district had an unblemished record of maintaining balanced budgets so I will limit today’s column to some of the early financial issues.

In October of 1997, the district announced that for the inaugural year of the new district 1996/97 there was a debt of $507,619. By March of 1998, the deficit had grown to $700,000 and by May 7, 1998, it was announced that the district debt had ballooned to over $1 million dollars. What was going on?

Financial crisis had hit our new district and the people of Creston wanted and expected answers. There were meetings with district administration, trustees, parents, taxpayers, students, and employees to try to get a clear understanding as to how we arrived in this situation, and what would the Creston area taxpayers responsibility be for paying off this newly found debt.

The first meeting that I attended around this time was at PCSS. Dave Douglas, who had been the secretary-treasurer of the Creston School district had continued in that role for the new amalgamated district. At that meeting, I asked him whether or not we inherited this debt from Nelson. As a loyal employee of the new district, he was evasive and reluctant to answer but when I then asked him specifically whether the Creston district brought any debt into amalgamation. His answer was no, Creston had no debt prior to amalgamation and he further acknowledged that the early debt had been imported from Nelson side of the district. As we all suspected, it looked as if Creston had been forced into an arranged and ill-conceived marriage with a partner whose finances were in disarray.

Another meeting was held at Adam Robinson Elementary School which I also attended. A memorable moment at this meeting was when local chartered accountant Len Folkman spoke. Mr. Folkman acknowledged that he had been assigned the task of completing an audit of the district finances. The comment that got everyone’s attention was when he revealed that in all his years of working as a chartered accountant, he had never seen the books of a public institution in such a mess as those presented by the previous Nelson school district. Getting near the end of his career, I am sure that Mr. Folkman had seen his share of poorly kept books and it also explains why at the time it was so difficult to get a forthright explanation surrounding the books of the Nelson district. They had reason to be embarrassed and further public scrutiny likely would not help.

So how did Nelson get its finances into such a mess? It seems that budgeting within their district was left up to individual schools and the district didn’t provide proper oversight of the various schools’ spending. This process was referred to as school-based budgeting and good money management by a school meant they would be able to have a greater say in where their money was spent. Poor money management led to individual schools running deficits and falling into debt, presumably expecting the district to bail them out. Whatever the reasons, there were apparently only a few schools who were not in debt to some degree. The real slight to Creston taxpayers was that schools on the Nelson side of the district who had managed to save a surplus were able to keep that money rather than having it transferred to the district debt while taxpayers, including Creston, were now responsible for the debt incurred. It must have been a dream come true when Nelson was amalgamated with a district who had no debt and would now be responsible for helping to pay off their accumulated debt load.

But this part of the story doesn’t quite end here. Not only did Creston taxpayers work to pay off that debt brought to the district by Nelson but with all the budget cuts that took place over the next number of years, our students suffered disproportionately. Nelson schools benefited from overspending their budgets only to have Creston help pay off the debt. Creston students and taxpayers never got the benefits of the overspending but were punished for maintaining a balanced budget by having to undergo the same cuts to programs in paying off Nelson’s debt.

Back to my opening question. In my world, a debt unpaid is a debt owed. The Nelson side of the lake apparently took the attitude that a debt unpaid should be spread over all the members of the new district, including those who had no part in creating it.

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