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This is a story about a provincial government and a school board. Like many tales, it's mostly about money. The board says the government doesn't give it enough to teach the children well. The government says it gives the board more money every year and board members don't do a good job of spending it. The action takes place in the present, but is influenced by characters and decisions that go back many years.


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Patti Bacchus: chair, Vancouver School Board Ms. Bacchus ran as a Vision candidate in the 2008 civic election, campaigning on a platform of protecting public education against government budget cuts. Before running as a school-board trustee, she served on parent advisory committees and was active in education-related campaigns, including one that pushed for seismic upgrades for aging city schools.

Ms. Bacchus, 48, was born and raised in Vancouver, where she lives with her husband Lee Bacchus. She has a grown stepdaughter and two school-age children.

Margaret MacDiarmid: Education Minister, MLA Vancouver-Fairview. Ms. MacDiarmid ran for office as a Liberal in 2009 and was appointed to the education portfolio in June of last year. Before becoming an MLA, she was a family physician for more than 20 years and was involved with the Canadian Medical Association and the BC Medical Association, of which she was president in 2006-2007.

Ms. MacDiarmid, 52, was elected to represent Vancouver-Fairview in 2009. Originally from Saskatchewan, she moved to Rossland, B.C., with her husband Robert in 1989 and later moved to Vancouver.


There are 60 school districts in British Columbia, ranging from the biggest - Surrey, which has more than 65,000 students - to Central Coast, which comprises seven schools and serves fewer than 300 students.

Vancouver School District is close to Surrey in size, with about 56,000 students in kindergarten to Grade 12, and has a budget of nearly half-a-billion dollars a year.

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Like other districts in the province, Vancouver gets nearly all (about 93 per cent, according to VSB figures) of its money from provincial grants. And, like other districts, Vancouver spends the lion's share of its budget (about 90 per cent, again according to VSB figures) on employee salaries and benefits. And, again like every other district, Vancouver is required to file a balanced budget by the end of June for the next school year and is not allowed to run a deficit.

So what twist makes Vancouver different - and how did its board end up on a collision course with the province?

For one thing, its budget woes were relatively severe. In March, the Vancouver School Board announced an $18.12-million budget shortfall - about 3.5 per cent of its annual budget - citing more than $8-million worth of costs that had been passed on to the board but not covered by the province.

Those costs, for things such as salary increases negotiated by the province, carbon offsets and medical service plan increases, are causing headaches for school trustees around the province. Teachers' unions and education advocacy groups maintain the government has "downloaded" some $120-million worth of unfunded costs to local school boards this year alone.

The province says it has increased overall funding for education and cites its commitment to learning through initiatives such as full-day kindergarten, which is being phased in by September, 2011. Last week, the government announced plans to spend $144-million to provide 665 new classrooms for that program, on top of a previously announced commitment of $280-million.

Then there is the political backdrop. In many districts throughout the province, school trustees are not necessarily affiliated with a political party. The current Vancouver board consists of nine members from three different parties. None has a majority. The biggest contingent is the four-member Vision team, made up of Ms. Bacchus and three other left-leaning Vision trustees.

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In her campaign, Ms. Bacchus tapped into public concerns about cash-strapped schools, vowing to press the provincial government for more money. She kept that promise.

She said steep budget cuts would hurt students and schools and that provincial funding had not kept up to rising costs.

Repeatedly, she called on the minister to reconsider education funding and slammed the province for its policies.

Things became heated. The two NPA trustees on the board even issued a statement calling on Ms. Bacchus to tone down her personal attacks on the minister.

In April, Ms. MacDiarmid appointed a special adviser, B.C. comptroller-general Cheryl Wenezenki-Yolland, to review the board's finances, saying the board was "either unable or unwilling to manage its resources to protect the interests of students."

Vancouver's sizable budget shortfall was a factor in that appointment, says veteran NPA trustee Ken Denike.

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So was politics.

"What singled them out for an adviser was the ferocity of the attack on the provincial government, and I think on the minister," Mr. Denike said recently. "What singled them out was the combination of the agendas being put forward that were not school-board agendas - they were from the BCTF [the British Columbia Teachers Federation]and the NDP."

Ms. Bacchus says the Vancouver board was singled out because it spoke out.

"If you put your head out of a foxhole, this is what happens," she said Thursday.

Ms. MacDiarmid says the board's difficulties suggested that it needed extra help and that the board should focus on balancing its budget, providing quality education and tackling the governance problems flagged in the comptroller-general's report.

"This a report that highlights waste and resources that have not been used wisely, and that needs to change," she said this week.


The comptroller-general's report was released in early June. Ms. Wenezenki-Yolland concluded the board had enough money, but wasn't managing it well. She also concluded that the board was focused on lobbying the government at the expense of managing its finances and that decision-making was often bogged down by committees and interest groups.

In response, the board said the report didn't do anything to improve the board's finances, that many of its recommendations were under way and that others, such as raising rents for non-profit childcare groups, were questionable.

So, in a rare move, Ms. MacDiarmid ordered the board to send a preliminary budget to her by June 18, before a board vote, and to take all of the recommendations of the comptroller-general's report into account.

The board sent its preliminary budget to the minister this week, but said the document was much the same as the one trustees had been working on in April, before Ms. Wenezenki-Yolland came on stage.

School closures are being considered, a band and strings program appears to have been spared, and daycare rents are headed up.

In a letter to Ms. MacDiarmid, the board said the draft budget, if approved, would meet the requirement to file a balanced budget and also comply with the minister's directive.

The budget is based, however, on a bigger deficit, $17.2-million, than the $11.8-million identified in the comptroller-general's report. The gap stems primarily from different ways of accounting for funds left over from a previous year.

Ms. MacDiarmid says the board has a habit of crying wolf.

"The comptroller-general has gone back many years, both with this board and previous Vancouver school boards, and has discovered that they continually, every year, have very pessimistic outlooks in their forecasting, and they're always wrong. Every single year," Ms. MacDiarmid said on Thursday.

The last time Vancouver closed a school was in 2003. Plans to close the Queen Elizabeth and Garibaldi annexes were cancelled in 2008, after a public backlash and changes in government policies relating to sale of school properties.

The board is again considering closing schools, although it has not yet announced how many or which ones.


Since the comptroller-general's report came out, there has been widespread speculation that Ms. MacDiarmid might fire the board. It has happened before.

In 1996, the North Vancouver school board was fired by the NDP government for failing to bring a deficit under control. And in 1983, the Social Credit government of the day fired the Vancouver School Board when it refused to pass a restraint budget as dictated by the province.

Under the provincial school act, boards must file a balanced budget by the end of June for the next school year.


As the drama around the Vancouver School Board's budget has played out, a related theme has remained close to the surface of the debate - whether the province is adequately funding education. Trustees around the province say government operating grants do not fully cover new costs faced by districts. Two NDP MLAs this month asked the Auditor-General of B.C. to investigate whether the Vancouver district's costs are being fully funded by the province. The auditor's office does not disclose whether or when it responds to a request.


After so many recent verbal fireworks from the parties, all was quiet on the budget front Friday, as Ms. MacDiarmid reviewed the balanced financial statement submitted by the Vancouver School Board. Neither side was planning any public comments, ahead of next week's potential showdown.

Footnote: At Vancouver School Board offices Thursday, Ms. Bacchus said the tension between the board and the province had been misinterpreted as a standoff between her and Ms. MacDiarmid. "This is not a story about the Minister of Education and me. She and I have both benefited from the public education system. This is about whether or not Vancouver children will have those same opportunities."

With a report from Rebecca Lindell

Editor's Note: Margaret MacDiarmid was elected as MLA for Vancouver Fairview in 2009. Incorrect information appeared in an earlier online version of this story. This version has been corrected.

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