The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

Public Accounts Committee -- Wed., May 9, 2001

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HALIFAX, WEDNESDAY, MAY 9, 2001

STANDING COMMITTEE ON PUBLIC ACCOUNTS

8:00 A.M.

CHAIRMAN

Mr. Howard Epstein

MR. CHAIRMAN: Ladies and gentlemen, good morning. I am going to call this session of the Standing Committee on Public Accounts to order. I would like to welcome today our guests who are here representing the Halifax Regional School Board. We have with us the Chairman, Sandra Everett; beside her the Superintendent, Mr. David Reid. Perhaps you could introduce the two others who are beside you.

MR. DAVID REID: Mr. Chairman, our Chief Financial Officer is Richard Morris, and the general counsel to the board is Rene Gallant.

MR. CHAIRMAN: Thank you very much. The members of the Public Accounts Committee are interested to hear a statement, if any, from the representatives of the Halifax Regional School Board. Our usual practice is to invite an introductory statement. Following that there will be a series of questions. It will rotate through the different caucuses, starting with the Opposition, the NDP, and then going to the Liberal caucus, and then going to the government caucus. Assuming time allows, we will go a second round. It is usually adequate.

Joining us today as observers, we have the Auditor General and two members of his staff, Elaine Morash and Roger Lintaman, and, of course, we have visitors in the gallery. Welcome to all of them. I would ask, if the board does have an introductory statement to make - is it you, Mr. Reid, who will be making that statement, thank you - I would invite you to get through it as expeditiously as possible. I think there are a lot of questions. When it comes to the questioning, perhaps we can keep it, on both sides, as crisp as possible. Please start.

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MR. REID: Mr. Chairman, let me say first of all that we appreciate the opportunity to be here, we appreciate the invitation and a chance to respond to questions about our operations and aspects of the service that we deliver for about 58,000 students in 146 schools. It is fair to say that the school board attracts a lot of attention in this community, and some of it, in fact, in this Chamber.

This year, for the first time in the history of the board, we have a modest operating surplus, but it is a fact that our facilities need improvement; our students need help. I think it is fair to say that for the predecessor board and this board, it has been a very difficult road, but we do have our financial house in order for the first time. We have laid off over 200 employees; we have closed schools. We have done our best to rationalize every service, every program and every expenditure. We have reviewed every contract, every agreement, every aspect of our operations with the objective of spending money more wisely.

I think that we have an opportunity, as the Halifax Regional School Board, to be an outstanding board of education in the province and to be an outstanding board of education in Canada. We are very close by to three of the best universities in Canada; we are very close by to three of the best colleges of education in North America. We have a community that values education very highly, and we do have an extraordinary opportunity to be a world-class, truly leading-edge system of education. The tools are there. I think we have the opportunity to participate with other boards of education, with the department, with government generally, to help Nova Scotia become the model learning province for Canada.

I am sad at the moment because our potential is just that, it is potential. We have 400 very good people, very good custodians and maintenance workers who have been led to believe that the board's offer is harmful to their interests. I am sad because these valued employees have endured seven hard weeks on the picket line because they have been convinced by their leadership that their jobs are in jeopardy and that outside contractors will be called in. I am sad because these people have not been trusted with a vote.

Where are we now as a board? We have reorganized from top to bottom; we have addressed an accumulated deficit of more than $10 million; we have dealt with significant funding reductions over the last 24 months and, as I have mentioned, we have put our financial house in order. I believe that we have demonstrated to the Auditor General that we are on the right track, but we have a great deal left to do.

Mr. Chairman, once again, I appreciate the opportunity and the invitation to come here with representatives of the board and have the opportunity to respond to questions, because of all of the responsibilities that we have as a board of education, the issue of accountability is probably the highest on our list. We want to provide open, transparent reporting to our community; we want to be responsible and accountable for the service that we provide; we want to demonstrate consistently that our interests lie with students. So we appreciate the opportunity to respond to questions today to demonstrate that commitment.

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MR. CHAIRMAN: Your presence here today, of course, followed the focus of the Auditor General on not just your school board but the Halifax Regional School Board and others in his last report. What we will do now is move to the different caucuses for questioning and we will start with an initial period of 20 minutes each. I will ask Maureen MacDonald, MLA for Halifax Needham to start.

MS. MAUREEN MACDONALD: Good morning. I want to start by saying that there have been a lot of issues in the press, in the public and, indeed, in this House with respect to the board. I think it is fair to say that members have some serious concerns about the issues that are being raised and certain allegations that have been made. I want to start, not by talking in the beginning about how you have dealt with your accumulated deficit and where you are going, I want to start with the restructuring inside the board itself.

I note in the Auditor General's Report he indicates that in the last 18 months, 11 of 12 senior management positions at the board, including the superintendent and executive director of business services have been filled by new individuals. I want to ask about the salaries of administrators at the board, whether the replacement and the bringing in of new people incurred an increase in expenditure on administration, to what extent there may have been an increase in expenditure on administration. Could you please provide that information?

MR. REID: Mr. Chairman, I will respond initially to that question, then on some of the more technical financial aspects I defer to Mr. Morris. It is true that 11 of 12 of our senior administrative staff are new over the last 24 months. In the last 24 months, beginning virtually 24 months ago, we did a complete financial audit of the board; we did a complete management audit of the school board. Without putting too fine a point on it, to be frank, we didn't have the right people in the right places. I was given complete latitude by the school board to redesign the organization and to promote people into positions of responsibility who, in my judgment and on the advice of people who I consulted, I brought forward people who I felt could do the job.

I guess the best illustration of that would be in terms of our business services, our financial services, operation services and so on. In redesigning the organization we created basically four services: board services, school services, business services and corporate services. Each of those is headed by a senior executive manager and in the case of business services, within about six weeks of joining the board, I was able to persuade Richard Morris, who is the senior financial person in the Department of Education, to join the school board as its executive director. The design of the organization was my responsibility. The promotion of people into positions of senior responsibility was mine. I believe that the record speaks for itself that there is a reason why we are a better organized, more focused and certainly more solvent board than we were and that is because we have the people in place who can manage the system.

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The other thing we have had to deal with over the last 24 months, and in particular with EXCEL and with our Community Collaborations and Partnership audit, was dealing with what our management audit concluded was gross mismanagement of the board's resources. We did do a complete forensic audit of that particular aspect of the operations to reveal that quite likely criminal activity occurred in there. We have dealt with that entirely. We have provided our reports to the school board and so on.

Mr. Chairman, my point is that this has been an extremely complex problem that required very capable, very highly professional people to manage and I am very pleased with the fact that I have those people to work with today. In terms of the overall cost, our administrative cost right now relative to overall funding is 2.07 per cent. It is the lowest of any board of education in the province by a significant margin. Last year alone we took in excess of $1.6 million out of our administrative costs. Certainly a major portion of that was associated with the non-credit portion of Community Collaborations and Partnership and so that is one bit of information that I would give you and I defer to Richard Morris on a more technical response if that is required.

MS. MAUREEN MACDONALD: I wasn't questioning the reorganization, I was questioning the cost of the reorganization, higher salaries, severance buy outs, actually trying to look for some detail about what this reorganization cost, and I don't know if Mr. Morris has that information or not.

MR. RICHARD MORRIS: I don't have the information with me today, but the salaries of the school board are a public record. We are required under provisions of the Education Act to produce a report annually of salaries and expenses. I didn't bring that report with me today. We have last year's report. The report for this year would not be ready probably until the end of June, early July, and that can be provided as a record to this committee.

MS. MAUREEN MACDONALD: I understand that getting information from this board is itself an issue that has been raised. It has been raised by the Auditor General. It has been raised by elected members of the school board and I think that that is a very unfortunate situation. I want to ask some questions about some of the concerns that have been raised, first by the Auditor General, who I believe has raised some questions about this $1.6 million of expenditures that were cut, that you have just referred to, but when you examine in more detail these revenues, on the revenue side there was a loss of $1.3 million in revenue, so in fact $1.6 million was not saved.

MR. REID: Mr. Chairman, I believe that what is being referred to here was a budget report last year called 212 - Community Collaborations and Partnership. We are not talking about the same $1.6 million. In that Community Collaborations and Partnership's report - once I finish speaking to it, I would be glad to provide that to the committee for their review - is a cost report to support budget input. What it says quite clearly in the report, in the general

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summary is, it is expected that most of the expense associated with programs can be reduced while the revenue can be retained.

Under the cost section it indicates that the savings to our costs will be $1.611 million. In fact, our audit of this over the course of the year has indicated that the actual savings on the cost of Community Collaborations and Partnerships, salaries and so on and so forth, was $1.675 million. So the savings on the costs of administration were there. It also goes on to say that the report recommends the effective dissolution of the Community Collaborations and Partnerships Department with the result that more than $1.6 million of expenditures will be removed from the board's budget. This is a budget document. It talks about cost expenditures and the fact that by taking the action that we recommended to the board that they could reduce the actual cost of administration for this service by $1.611 million. We exceeded that by a modest amount of money.

It also, as I have mentioned, indicates that we looked to retain a significant portion of the revenue. This report was written at a time when we had serious concerns about EXCEL and about the quality of the information that had been produced by that department over a number of years. I will defer again to Mr. Morris on the detail but, in fact, a significant portion, as the report suggests, of the revenue was retained. We did attempt, during the course of our audit by the Auditor General, to explain the difference and the distinction that this report was making. It is apparent that we failed to make that case, but I am here to tell you that is what the report said. It is consistent with everything that has happened and the notion that such a report was intended to mislead the board is just not based on fact. So I will defer to Mr. Morris on the more specific details of expenditures versus revenues.

MR. MORRIS: I may just add to what was in this report on Community Collaborations and Partnerships. It outlined the seven different programs and services that comprised Community Collaborations and Partnerships. There was supporting information on each one of those seven programs and within the body of the report it talked about the expenditures to offer those programs and services, but it also did indicate the revenues that were associated with them as well. So when the board members were reviewing this report, they were given the full information on what the expenditures were as well as what the revenues were for each of these programs and showed the net figures as well. So they were fully aware when they were reviewing this what the revenues and expenditures in total were associated with Community Collaborations and Partnerships.

In reviewing the documents that you have in your binder for today, they are not numbered, I don't believe the pages are numbered, but there is a document in here that also shows some of the information that the board was reviewing during its budget deliberations that showed sort of a starting point of where we were in terms of a shortfall and then it showed the impact of the decision on Community Collaborations and Partnerships. It showed reductions in revenue from community education programs. It showed the reduction from EXCEL, but it also then showed the expenditure reductions as well. So, again, when the

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board was reviewing the budget, they were fully aware of what the impact was in terms of the overall bottom line from this report on Community Collaborations and Partnerships. So, again, to reiterate what Mr. Reid said, there was certainly no information withheld at all from the board in making that decision. They had every piece of information they felt was necessary to make an informed decision.

MR. CHAIRMAN: Can you help us just understand this, I have lost a little track, Mr. Reid, was Mr. Morris the author of that document?

MR. REID: Documents like that are produced by a variety of different people. In fact, part of our process with the budget review last year was to generate a list of 14 budget documents. They were actually created by 14 different individuals. Every document of that nature comes through the executive council. The reference was made earlier to 11 out of 12 people. It is the 12 people who sit as executive council, the senior executive body of the board, they review all the documents. They approve them to go forward to the board as a recommendation or otherwise.

MS. MAUREEN MACDONALD: I have never known our Auditor General or his staff to be alarmists or sensational in any way. In my limited experience, the Auditor General's Office has always been very cautious in the approach they take. It is my understanding that the Auditor General and his staff raised serious concerns about the information that the board had when they made this decision and that, in fact, they were feeling that the members of the board did not have all of the information in front of them and, in particular, they did not have information with respect to the full impact on the revenue side.

My time is getting short. I want to move on to a matter that is very much on the minds of members in this Chamber and that is the current labour unrest and the strike that is happening now in the board. We are all very aware that this strike has gone on for a long time, but that there are other bargaining units representing secretaries, library technicians, EPAs and so on, that may very well be joining the men and women who are already in this protracted dispute. I want to ask, how much money is the board saving by this current strike and through this current strike?

MR. MORRIS: At this point we do not have a full accounting of all the costs yet because costs are coming in, but the information that I have been able to obtain from our finance department at this point in time is that we are not spending more than we would have if our employees were at work. So we are assured that the board is not incurring additional costs. In fact, there are some modest savings, but we do not have a full and detailed accounting of that yet.

MS. MAUREEN MACDONALD: And why don't you have a ballpark figure of what is being saved at this point?

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MR. REID: Well, I could give a rough estimate, but I am hesitant to give rough estimates at this point because I would prefer to give much more accurate information when it is available. This is a particularly busy time of year. Our staff have been working flat out to complete the year-end financial statements which were completed and presented to the auditors earlier this week. We are involved in trying to complete our budget. We just haven't had the opportunity yet for staff to do a detailed accounting yet at this point.

MS. MAUREEN MACDONALD: I want to ask, there have been concerns raised that the board is really thinking about contracting out the work of the cleaners. We have seen that, certainly with the bus drivers hired through Stock and their contract, they have had a rollback in their benefits and wages and what have you and that the management of the board, the administration of the board, are really looking at ways to find financial savings through the privatization or the contracting out of work to the extent that there was an American multi-national in here meeting with administrators and looking at provision of service.

I would like to know if the change in management at the board and some of the events that we have seen unfolding indicates a new approach to managing the Halifax Regional School Board that will result in the kinds of occurrences that we are seeing on an ongoing basis and may lead to privatization of the cleaners' work?

MR. REID: Mr. Chairman, I will respond to the first bit of that question and then defer to Mr. Gallant, the general counsel to the board, on the specifics, contracting out and

privatization and so forth. Sodexho-Marriott is the company to which you refer. Apparently it is the largest facilities management company in the world. We were approached by them, I would say, in March or April last year with an offer to come in and do a complete assessment of our facilities, all the mechanical systems, the air-handling systems, everything right down to what they called a curb appeal factor, and so on. They offered to do that at their expense. There is no question that they would not make such an offer, which I understand cost them in excess of $100,000, unless they thought there was a business opportunity there.

We needed to work with the department in gathering detailed, qualitative, quantitative information on the condition of our facilities. We had participated in a joint effort with the department on reviewing those facilities. We saw this as an opportunity to have some external validation of the condition of those buildings, and so we accepted that offer readily. About 20 to 25 architects, engineers, mechanical-systems specialists and so forth came in over last summer, completed that assessment and provided that information to the operations department of the board.

Shortly thereafter, no surprise whatsoever, they asked for the opportunity to make a proposal to executive council on, essentially, a takeover of our operations department. We listened to that presentation. We provided our director of operations with about a month, approximately, six weeks, to respond to that recommendation. He did so indicating that given the calibre and the abilities of our own staff, given the - I will put it this way - hopes that we

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had for the review of the contract and building in some efficiencies, he convinced executive council beyond a shadow of a doubt that our own employees could do the job better. We rejected Sodexho out of hand, there is no intention whatsoever of rekindling that. That is the sequence of events. On that point, I would like to defer to Mr. Gallant on the other issues.

MR. CHAIRMAN: Mr. Gallant.

MR. RENE GALLANT: Just to speak to this issue of privatization and contracting out, it has been the favourite catchphrase of the union leadership, Ron Stockton in particular, appears to be continuing the strike on the basis of creating a fear of privatization. I think he refers to it as globalization of the employees. The fact is that under the previous contract, there was an article in the contract that dealt with contracting out, and it was an almost complete prohibition on contracting out of this work. The only exception was work that had traditionally and was existing to be contracted out, for maintenance work. There was some maintenance work that had always been done by contractors, and it would continue to be done. It could only continue to be done if it would result in no layoff or displacement or dismissal of existing employees. It was a very strong contracting-out protection for the employees, in fact, stronger than any other bargaining unit.

Now, on February 20, 2001, in negotiations, Mr. Stockton agreed with us that that language would return to the new contract. The next contract will have the same prohibition against contracting out, exactly the same language as the old contract. In addition to that, last Friday, in negotiations, we made a commitment, on the basis that there would be a vote on Sunday, that there would be no layoffs of the full-time employees and the part-time employees would continue to hold part-time positions throughout the life of this contract. They have two strong protections, they have a guarantee against contracting out and they have an employment guarantee.

There should be absolutely no more need to talk about privatizing this bargaining unit, because all Mr. Stockton has to do is hold a vote and sign the contract. The irony of all of this is that right now, while the employees are on strike, there is no collective agreement in place. The collective agreement that they formerly had is suspended. Right now, while they are on strike, there are no prohibitions against contracting out or privatization. If they would sign the new contract, they would be in place immediately. I guess what I am suggesting is Mr. Stockton, by continuing the strike, by prolonging it, is in fact allowing the risk of privatization to continue. All they have to do is sign the contract, and we can't do it. Mr. Reid has said we have no intention of doing it, and that has always been the case.

[8:30 a.m.]

MR. CHAIRMAN: We have finished the first 20 minute tranche, so we will move to the Liberals. Mr. MacKinnon.

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MR. RUSSELL MACKINNON: Mr. Chairman, my first question is to the Auditor General. On Page 71 of your report, you state in paragraph two, "We became aware of one instance where the members of HRSB were given inadequate information upon which to base a budget-related decision." Do you still stand by that statement, Mr. Salmon?

MR. ROY SALMON: Yes, I do.

MR. MACKINNON: Ms. Everett, with regard to the school closing of Mary Lawson School and Alderney School, do you feel that all the school board members had sufficient information to make an adequate decision on that?

MS. SANDRA EVERETT: At the time they made the decision, they did, yes. Alderney School, by the way, did not close.

MR. MACKINNON: That is correct. Was there any recommendation to close Alderney School?

MS. EVERETT: I believe there was, now I am going on my memory.

MR. MACKINNON: Are you suggesting that possibly the school board members may have additional detail that would draw them to a different conclusion today?

MS. EVERETT: No, I am not.

MR. MACKINNON: Are you aware of any additional information that, perhaps, they could have had at the time of the decision that would allow them to consider various options?

MS. EVERETT: In retrospect, if we were doing the whole thing again, I would suggest that we change the policy somewhat, in that they had that information earlier in the process and the public have it as well. We were operating under a policy approved by the board, and certainly that policy was followed.

MR. MACKINNON: You are familiar with the facilities report that was done on both those facilities. My understanding is that with regard to Mary Lawson School, it didn't really require any substantive amount of expenditure for retrofitting or upgrading at all, is that correct?

MS. EVERETT: Certainly . . .

MR. MACKINNON: Yes or no would be fine.

MS. EVERETT: I would say no.

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MR. MACKINNON: No, in agreement to . . .

MS. EVERETT: No, it is not correct.

MR. MACKINNON: What expenditure would be required?

MS. EVERETT: It is my belief, although I know the public will argue with me, that the gym at Mary Lawson School is not adequate, and was never adequate in all probability. I know in the early 1990's we tried very hard to get a new gym built for that school, prior to amalgamation. It was one of the items on which I took numerous phone calls, but the concern seemed . . .

MR. MACKINNON: Was it included in the facilities report?

MS. EVERETT: Yes, it was.

MR. MACKINNON: Do you have the facilities report for Mary Lawson School and Alderney School?

MS. EVERETT: I have them; I do not have them with me this morning.

MR. MACKINNON: Would you table them for the committee?

MS. EVERETT: Certainly.

MR. MACKINNON: My colleague, the Leader of the Liberal Party, suggested, perhaps, there may have been a little political interference in keeping Alderney School open. Was there any political intervention from the provincial level to you?

MS. EVERETT: Yes, from all three Parties.

MR. MACKINNON: I see. Did you have any specific correspondence from all three Parties?

MS. EVERETT: I believe so, yes.

MR. MACKINNON: Will you table that with the committee?

MS. EVERETT: We will have to go back to our files, but I am sure we can.

MR. MACKINNON: Do you recall a particular letter dated April 12, 2001, faxed to yourself by a Mr. T.A. Olive, Chairman of the Tory caucus?

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MS. EVERETT: Yes, I do.

MR. MACKINNON: Was that letter made available to all the board members, before they made their decision?

MS. EVERETT: Yes.

MR. MACKINNON: All board members?

MS. EVERETT: All board members should have had it, yes.

MR. MACKINNON: In that particular letter, it states some rather concerning information about the Halifax Regional School Board. I am just going to refresh your memory.

MR. DAVID HENDSBEE: Mr. Chairman . . .

MR. MACKINNON: I will table the letter.

MR. CHAIRMAN: Thank you.

MR. MACKINNON: Absolutely. I would be surprised, since it came from the Tory caucus, they wouldn't have a copy, but that is okay, we will make sure they get one.

MR. HENDSBEE: Mr. Chairman, on a point of order or clarification. I hope he does table the letter, and I wish he would do it quickly so we can refer to it also. I believe the letter is from Mr. Olive as the MLA for Dartmouth South, where the school is located, and not as the Tory caucus Chairman.

MR. CHAIRMAN: Well, we haven't seen the letter. We can get a copy soon, I assume.

MR. MACKINNON: Mr. Chairman, he can't have it both ways. Either he knows what is in the letter or he doesn't.

MR. HENDSBEE: I don't.

MR. MACKINNON: He has already stated that it is not as chairman of the caucus.

MR. CHAIRMAN: I think your point . . .

MR. MACKINNON: Maybe he should wait to read the letter first. Anyway, I will proceed.

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MR. HENDSBEE: Mr. Chairman, I want to make the point that in regard to his being caucus chairman, he should be making reference to . . .

MR. CHAIRMAN: That is true. The correspondence that is in the possession of the member, it might be useful to table it at the same time it is referred to. Have you an extra copy, by any chance, Mr. MacKinnon?

MR. MACKINNON: Not at the moment.

MR. CHAIRMAN: As soon as you are finished with it, we can have a copy made. Thank you.

MR. MACKINNON: I know Mr. Hendsbee is a little sensitive about accountability.

MR. HENDSBEE: I want it to show for the record that the MLA for Dartmouth South . . .

MR. CHAIRMAN: The time of the member is being used up. Question?

MR. MACKINNON: "Another issue that is of grave concern to the public is the apparent total disregard by the HRSB up to this point, for the health and safety of those students, who would be dislocated from their community." Then he goes on to state, "I am not prepared to stand by and allow the HRSB to implement a school closure that directly and clearly contravenes the Education Act that stipulates that the Provincial Government has the responsibility to review a decision of a board . . ." Then, in closing, he states, "In closing, I would expect that any recommendation to close Alderney School will be rejected based on the need to maintain Health and Safety of the children who attend this school."

Do you still stand by the fact that all school board members were provided this information prior to making this decision?

MS. EVERETT: I believe they were, yes.

MR. MACKINNON: So you have no quality assurance that this letter was provided to school board members?

MS. EVERETT: Normally, all letters I receive go out with the next package to the members.

MR. MACKINNON: Okay, who would have provided that? Who is responsible for providing this?

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MS. EVERETT: The secretary to the board and I am sure she would have done so. I know some have had it because they spoke about it.

MR. MACKINNON: In the report that was done, September 5, 2000, the report to the board for schools on possible permanent closure, and I will fast-forward to the comparative analysis that was done on the various schools and I will just focus in on Alderney and Mary Lawson. I notice that Alderney had five vacant classrooms with a percentage of classroom utilization at 64 per cent and Mary Lawson only had three vacant classrooms with a 73 per cent utilization. Why was Alderney not closed instead of Mary Lawson?

MS. EVERETT: The decisions were made on a number of criteria. Both the conditions of the buildings - we were trying to reduce classrooms across a given area, in this case the Dartmouth High family of schools. Actually we didn't reduce to the target that we were trying for, but it did not necessarily fit in with any particular school and its vacancy rate or lack of extra classrooms. In fact, one of the ones that was closed had much higher utilization than did Mary Lawson. That was one factor . . .

MR. MACKINNON: But in this particular family of schools, that factor didn't apply.

MS. EVERETT: Actually, they are in two different families of schools.

MR. MACKINNON: But Alderney and Mary Lawson are in the same family of schools.

MS. EVERETT: No, Alderney is in the Dartmouth High family of schools, and Mary Lawson . . .

MR. MACKINNON: But the cause-and-effect relationship is essentially the same, isn't it? Because . . .

MS. EVERETT: What was done was the number of classrooms that we were not utilizing was looked at. A committee made up of school council members from throughout the Dartmouth High family or the Prince Andrew High family - they were separate - they were asked to look at a target to give us and the board passed a motion to attempt to have 90 per cent utilization. We did not reach 90 per cent, but nevertheless those came from two different committees and two different staff reports.

MR. MACKINNON: Thank you. Mr. Reid, have you ever had any discussions with the Deputy Minister of Education with regard to the province taking over responsibility for facilities and transportation?

MR. REID: Yes, I have.

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MR. MACKINNON: You have. Have you had a particular meeting with the deputy minister and other superintendents on this particular issue?

MR. REID: I would say we have probably had as many as three different meetings on that and a variety of other issues. We meet . . .

MR. MACKINNON: Let's focus specifically on this issue.

MR. CHAIRMAN: I am sorry, could we hear the rest of the answer? It seems . . .

MR. REID: We meet roughly once a month. As a matter of fact, following this meeting today, we will have another meeting with the deputy. There is always a huge number of items on the agenda. Certainly, the idea of boards co-operating to create efficiencies in the province is a topic of conversation or discussion, rather, that we have on a fairly regular basis and in that context we have certainly discussed how our transportation services in the province could be managed more efficiently. How facilities could be managed in the province more efficiently.

MR. MACKINNON: Who raised that issue?

MR. REID: I would say, probably within about the first month of my joining the school board two years ago, the deputy minister of the day talking about those types of issues. I recall a discussion that we had probably two years ago about - for example - why could we not pay all employees of all school boards in the province from one payroll department, as a case in point. Why would we not think about managing HR services province-wide? Because the scale of operation is really not, in relative terms, all that large. If there was some way that we could save some dollars by doing that, I can tell you it is something that I would support quite readily. Whether that is transportation or facilities, or whatever.

MR. MACKINNON: Thank you. That leads, obviously to another question with regard to the directive that was issued by the Minister of Finance to the Minister of Education just after the approval of last year's budget, which subsequently went to all boards requesting all boards go on-line with the same central computer systems and programs. Was that directive issued to the Halifax board?

MR. REID: I know that . . .

MR. MACKINNON: Did you receive a directive from the Department of Education?

MR. REID: That we would . . .

MR. MACKINNON: Like sap.com?

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MR. REID: We haven't received a directive of that nature. I know that we have had a lot of discussion on an integrated software to manage financial reporting, reconciled to HR and so forth, . . .

MR. MACKINNON: There was no written correspondence? No directive at all from the Department of Education to your board? Ms. Everett?

MS. EVERETT: I am not aware of any. I was not chairman at that time, so I . . .

MR. CHAIRMAN: Mr. Morris?

MR. MORRIS: My understanding, and I am not sure of the exact name of the Act, but my understanding is that there is an actual legislative requirement now that the provincial public sector is - SAP is the common software system for the provincial public sector.

MR. MACKINNON: Just to refresh your memory, under the Finance Act, the minister was empowered in the last budget to be able to direct all government agencies of the Crown to go on-line if they so choose. So, is that directive still in effect?

MR. MORRIS: My understanding, it is and . . .

MR. MACKINNON: And has the Halifax Regional School Board made any effort to go on-line with that provincial system?

MR. CHAIRMAN: Mr. Reid?

MR. REID: Mr. Chairman, we have worked probably for the last one and one-half years with other boards of education in the province and with an external facilitator that was engaged by the department for that purpose - to look at the sort of problems that we would have with going to a province-wide, integrated software. We were, I guess, proceeding on the assumption that there would be a government-wide integrated software, that it would impact on the school boards. I can tell you it is something that I would readily endorse. In our particular case, we have a very difficult time reconciling financial reporting to HR and those types of things, so to have a sophisticated software that can help us manage our services more efficiently, is something that I would welcome. I think the connection to the department is also something that I would encourage.

MR. MACKINNON: That would certainly make it a lot easier for the province to take over facilities and transportation, wouldn't it? Would it not?

MR. REID: I don't know whether that would be the objective . . .

[Page 16]

MR. MACKINNON: It may not be the objective, but it would certainly make it easier, wouldn't it?

MR. REID: I am not so sure what financial reporting software and facilities management necessarily have to do with one another, but I defer to your opinion on that.

MR. MACKINNON: No, maybe we will refer to the Auditor General on a future day. Mr. Reid, this strike has been difficult for all board members, difficult for staff, difficult for the custodians, the secretaries, the teachers and difficult for members of the Legislature. We may not necessarily agree on certain things, students most importantly, and that is what I want to focus on right now. Mr. Reid, your working relationship with the custodians, would you describe it as relatively good?

MR. REID: No, I wouldn't.

MR. MACKINNON: Okay. Would you describe your working relationship with all the staff within the board, relatively good?

MR. REID: Yes, I would.

MR. MACKINNON: Would you describe your working relationship with the Teachers Union, relatively good?

MR. REID: We have very serious differences of opinion.

MR. MACKINNON: Ms. Everett, through this strike, how have the teachers in the schools reacted to all the pressures because of the strike?

MS. EVERETT: Well, you have to remember that these men and women who are on strike, we all know well. They are friends, in many cases. They are disturbed, as we are and as I am sure, you are. In my experience - Mr. Reid and Mr. Morris maybe have encountered something different - they have all been most co-operative. I have not had a lot of . . .

MR. MACKINNON: You would describe the teachers as pretty caring individuals, wouldn't you?

MS. EVERETT: I certainly would, yes.

MR. MACKINNON: The Teachers Union, I would think, would be the voice that would reflect that. Is that correct?

MS. EVERETT: I have no idea, quite honestly.

[Page 17]

MR. MACKINNON: I am a little concerned because of this memo dated May 2nd from Mr. Reid, and I will table it again, too. "It is particularly gauling [sic] to me to have the NSTU interfering with our employees (teachers and principals), fear-mongering over school cleanliness and attempting to show solidarity with NSUPE. Brian Forbes and NSTU don't give a damn about our custodial/maintenance staff.". Now, does that reflect the opinion of the board?

MS. EVERETT: I think the board felt that was inappropriate.

MR. MACKINNON: Inappropriate. Yes, thank you. I will certainly table this particular document.

MR. CHAIRMAN: Mr. Reid has something to add on that too.

MR. REID: I think what is being referred to there is a confidential memorandum given to Mr. Flemming and to other board members. But it does, I have to say, fairly accurately reflect my attitude on this. If I may just explain that further. There is a big difference . . .

MR. MACKINNON: Is that the same attitude that was displayed when you threatened to sue one of the board members?

MR. REID: What I indicated to Mr. Flemming, which is part of my duty and responsibility as superintendent, when the behaviour of the board, generally, or the actions of an individual board member places the board at risk, I have a responsibility to say so and that is exactly what I did.

MR. MACKINNON: Did you feel my questions in the Legislature put the board at risk?

MR. REID: I have no comment on that. I don't hear what you have to say.

MR. MACKINNON: Did you seek legal opinion as to whether I should be sued or not? Could you answer yes or no?

MR. REID: With great respect sir, I don't pay attention to what you say in the House.

MR. MACKINNON: Mr. Gallant, were you asked to give an opinion as to whether I should be sued for my comments and questions in regard to Mr. Reid?

MR. GALLANT: Certainly, my professional code of conduct and my responsibility as the legal advisor to the Halifax Regional School Board would not enable me to indicate whether or not I have been asked for opinion or what that opinion is, given that that would

[Page 18]

be solicitor-client privileged information. Frankly, we are quite aware that inside the doors and on the floor of the House, you have certain qualified privileges to make statements; outside the House or other people making statements that might be defamatory to the board as a whole or to senior staff, we certainly look at those very carefully because that is something that we treat very seriously.

MR. MACKINNON: Thank you. Ms. Everett, are you aware of any request to seek a legal opinion?

MS. EVERETT: No, I am not.

MR. MACKINNON: You wouldn't be aware. So that is another elected official that wouldn't be aware of, perhaps, what is going on at the board.

MS. EVERETT: I would suggest I was aware in the case of Mr. Flemming and I feel Mr. Reid acted appropriately.

MR. MACKINNON: Pardon?

MS. EVERETT: I said, I was aware of the legal opinion being sought on the case of Mr. Flemming and I feel Mr. Reid acted appropriately.

MR. CHAIRMAN: Thank you for that answer and we are just finished the 20 minutes session with the Liberal caucus and I move now to the PC caucus. We have Mr. Barnet, MLA for Sackville-Beaver Bank.

MR. BARRY BARNET: Mr. Chairman, first of all, I want to welcome our guests. I want to, as well, thank Mr. Reid for providing me an opportunity to meet with him earlier to discuss a number of issues, one of which was trying to encourage a resolution to the existing strike between your workers and the board. It is my hope and expectation that the board and management will do everything they can to resolve this issue as quickly as possible; as well, so will the union and I would like to see this over as quickly as possible.

I want to immediately move to some areas of concern that I have had for quite some time. These are issues that constituents have brought to me, that I have discovered through some research, that deal with the way that board has done business over the past number of years. What I am going to be referring to is audited financial statements from 1998-99. I know you are not going to have that there. I will try to make the questions general so that you can respond to them.

There is some disturbing information when you compare, not the budgets, but the audited financial statements year over year. One of the questions that has continually been brought to me is how much money the board spends in the administration of the school board

[Page 19]

compared to the offering of programs like cleaning the schools, educating the children and that kind of stuff. The other overwhelming issue that has been brought to me is the difference between the actuals and the budgets, what was budgeted and what the actual expenditures are. I wonder if you can explain to this committee how it can be that, line for line, under administration in the 1999 audited financial statement, with a couple of very small exceptions, in nearly every circumstance, the board has actually spent more than it budgeted.

I will point to one example: board management salaries and wages in the 1999 audited financial statement, you budgeted $3.872 million and you actually spent $4,869,918. That is a substantial difference. Can you explain why that is?

MR. MORRIS: I certainly can't explain the difference in those particular years at this point in time because, as you indicated, I don't have those financial statements with me and I wasn't part of the board at that time so I don't know exactly what kinds of documentation were provided to the board when those financial statements were tabled. But I think what it does point out, it gets to the root of exactly what the board has been doing in the last two years, and that is getting its financial house in order, making the appropriate changes in its systems and procedures and financial reporting so that that kind of situation does not occur in the future. I think we have made substantial progress. We still have progress to make. I think, as the Auditor General pointed out two weeks ago when he visited the board, that we are on the right track. We are making progress. I think, from the results we have seen in the last fiscal year and the budget we are preparing for the current fiscal year, we will not see evidence of those kinds of variances in the future.

MR. BARNET: It is my expectation that you won't, but I expect that this same sort of thing has been discussed in the past. Because when you look at the 1997 actuals - in fact I recall clearly back in 1998, 1999, there were some decisions that the board had to make to try to balance its budget. I recall that parents and others protested at board offices to try to lobby for their programs not to be cut and for the board to maintain certain levels of services. The board, through their budget process, made some very difficult decisions. But yet when you look at 1997 and you compare it to 1998 and then you compare it to 1999, in my mind, you can see where the board made clear directions or decisions on where they were going to reduce, but yet the expenditure pattern continued on.

I want to point out that in 1997, the actual expenditure in the same line item was $4.326 million. Then they went to $4.2 million, which is a slight decrease and then they went to $4.8 million. But, at the same time, they budgeted considerably less. Their budget targets

were $1 million less. My question is, were the budget targets simply guesstimates, or were decisions and directions of the board not followed in order to have this $1 million or 20 per cent difference in this particular line item?

[Page 20]

MS. EVERETT: I am not sure I can answer all of your questions quickly without it in front of me but I will give it a try, Mr. Barnet. For one thing I would point out that 1999 would have been a particularly expensive year simply because we hired a new superintendent which entailed some costs. I have to say there weren't a lot of people who wanted to come. The other thing is we had a very long-serving superintendent retire, which also entailed costs to the board, I would suspect some of the differences in there, probably not all, I am not saying that is all, but that would be one reason that would leap to mind.

One of the reasons - and it was made quite clear to Mr. Reid when he was hired by the board - he was hired was we wanted to get control. We felt the controls were lacking, and you have cited some of the directions of the board, I don't think there was any deliberate attempt not to follow it but it somehow never worked out that we hit and therefore I think Mr. Reid would tell you, too, it was made quite clear to him when he was hired that that was one of the things we were looking for.

MR. BARNET: I guess a glaring example of a decision of the board that appears to me not to have been fulfilled and I recall this as clearly as if it were yesterday, there was an issue in 1999 surrounding the half day Primary for county residents. The board had made a number of budget cuts internally to their administration. One of the things the board did and I commended them for it at the time, was they said, because of the fact we have these very difficult decisions to make we are going to eliminate from our budget, travel, conference, and professional development. At the time it sounded like a very good thing to do, they were spending at the time $210,000 annually for that particular line item. They zeroed the budget, no money was to be spent, no staff were to travel to go to conferences for professional development. Yet in the same year they had a zero budget, somebody obviously didn't read the budget or ignored it because they spent $81,000. They had nothing in the budget, yet they spent that money.

My question is considering these glaring differences between actual and budget, is there an opportunity for the board to assess and to review their audited financial statements? Do you sit down and talk to board management at a board meeting and question the management on the audited financial statement?

MS. EVERETT: We afford, actually, two opportunities at a minimum. There is the Audit and Finance Committee, which we invite and strongly suggest that all board members attend and obviously, everyone who attends may not have a voting right but certainly have a questioning right. Then the report from there goes to the board meeting at which point questions again can be entertained and answered by staff or others. I would suggest on the other item, I will always support professional development for both staff and board members, I have seen the difference and I have worked with boards, which you will know, Mr. Barnet, all over this province. In actual fact the Education Act guarantees board members $1,600 a year for conference professional development. I don't remember the circumstances at the

[Page 21]

time but I very much see a difference in board members who do attend such things and those who don't.

MR. BARNET: This actually is not for board members. There is a separate line item for board members, I understand that and I appreciate that as well. I also understand the fact that the board believes they finally now have a budget that they can live within. I think part of the problem that this school board has had is the fact that for too long - and it is documented through the audited financial statements - the board hasn't actually used its budget for anything more than an exercise at the beginning of the year, that they simply pass the budget and if they over-expend, somehow, someway it disappears and the last time it disappeared, our government was good enough, kind enough - I guess, the taxpayers of the Province of Nova Scotia were - to eliminate the deficit and give you a clean slate and we certainly hoped from that point forward the budgets would be used to direct decisions that the board has made.

MS. EVERETT: That certainly is our intent.

MR. CHAIRMAN: I think Mr. Reid was trying to give an answer to this, as well.

[9:00 a.m.]

MR. REID: Mr. Chairman, Mr. Barnet's remarks are very reasonable and they are to the point and correct. The comment that I would like to make is in reference to the work of the Auditor General most recently. The impression from some comments made by a variety of different people is that we questioned every aspect of the Auditor General's Report. That is just absolutely not true. We did question a few items, one of which we have referred to today, those are very modest differences of opinion.

I want to state for the record that we appreciate, respect and value very highly the critical comment of the Auditor General and the advice that is provided to us. We know that we have a good budget process emerging, we have our business plans which have been in development for a year emerging, it will be all part of this year's budget process. We benefit considerably from the advice, particularly that advice coming from external, qualified sources such as the Auditor General's Office.

Our focus over the next two years, at least, is going to be on control. So we are anxious and have, in fact, invited the Auditor General to return to the board in a year or two years, whatever is possible given their schedule, to give us an opinion on how well we are doing with that particular aspect of our operations. So, I just want it to be clear, we do value their service very highly and do appreciate Mr. Barnet's statement.

[Page 22]

MR. BARNET: Thank you. My next question to you, Mr. Reid - and I will be direct - what is the relationship between you and a company known as CHESCROW and what, if any, business relationship does the school board have with the company known as CHESCROW?

MR. REID: Well, I appreciate that question also. CHESCROW is a company that is in development. The Chief Executive Officer of that company is my son, Justin. It is a company that facilitates the transfer of donated items, computers and so forth in exchange for a charitable receipt. It also manages, for example, the transfer of tangible goods to support, for example, breakfast programs, to schools. There is no other company like it that I am aware of. I asked my son, at his expense, to contribute this service to the Halifax Regional School Board knowing full well that it was a product that would be in development over the year and so on. I have a report here that I will gladly table with the chairman.

The Students First Fund was created in November. It is to facilitate the transfer of computers and as I understand it, we receive somewhere between 500 and 1,000 donated computers a year from government sources and from private individuals. It is a significant contribution which we appreciate greatly. We also have a very strong need to develop breakfast programs. We calculate that in our system every day we have about 20,000 children, believe it or not, who show up at school in the mornings who are hungry. It is a well-researched, well-understood fact that children who are hungry do not function well in learning. Often, the best thing that anybody can do for a child is to feed them. So we want to encourage the growth of this breakfast program; CHESCROW is a product that can do that.

I want to say, incidentally, that the understanding with my son is that this would be his charitable donation to the school board, that his company would receive no financial benefit whatsoever. Their business plan is based on funding from, first of all, charging for the service, charging for the in-service and training of users, and also receiving a portion of the charitable receipt that is issued. It was understood and agreed that absolutely no benefit would accrue to this company at all.

I think within about two days after that was announced, the School Breakfast Program, the Students First Fund and the connection to CHESCROW, I started to hear about, oh, you've given your son a benefit, you've given your son an advantage. Right from that point on I started thinking, I am not going through with this; I am going to withdraw from this. My son's charitable donation would probably be worth tens of thousands of dollars to the school board and to the community, because they still have to spend, and they do spend, a lot of money on software development. My bright idea was that he would have some of that software development done here, use some of the local expertise here. My thought was that that investment could be made here as opposed to anywhere else.

[Page 23]

In early January - and maybe I am being too thin-skinned about this - I just wasn't prepared to fight those battles. So when my son said, we are now ready to come down and we will do the training and in-service of your users, we will hold a reception and invite the corporate partners in and anybody else who wants to come and we will do it at our expense - they had budgeted around $30,000 to $40,000 to do that - I said don't, just hold off. I don't have a good feeling about this. We have lots of battles to fight in the board, so this is just not another one I want to do. So I said hold off for awhile.

In early February, I got an indication that this was going to be made a petty political issue and so I said to him at that time, I am sorry, we are done. So I took it off the Web site, and I terminated our relationship with the company . . .

MS. EVERETT: Not with your son.

MR. REID: Not with my son, no. What have we lost? Well, CHESCROW will invest thousands of dollars developing its software before it achieves the final version sometime next year. This software development could have been purchased from qualified people and companies in Nova Scotia. CHESCROW will invest thousands of dollars in promotion, marketing and advertisement. That is the only way it works, by the way, if people know that they can use it. This expenditure could have involved Nova Scotia companies with the experience and expertise. CHESCROW could have used the Halifax Regional School Board as a model for other charitable organizations; United Way Canada is going to be using it.

The bottom line for us is that we want to feed hungry children. We have a large corporate partner waiting in the wings prepared to donate very large volumes of food to our breakfast program. The way CHESCROW works is that the schools log into CHESCROW and if they need a dozen boxes of cornflakes and 50 bags of this, they simply claim it off CHESCROW and e-mail is immediately generated confirming that purchase from this cyber-warehouse. Once those are delivered to the school, with the instructions delivered also by e-mail, a charitable receipt is issued and it is all done electronically. There is no cost to the board. What could be better than that? We are going to miss that. We will find other ways to do this.

MR. BARNET: Can I just interrupt? Can you be quick? I have two minutes left and two questions left to ask.

MR. REID: I am finished, and so is our relationship with CHESCROW.

MR. CHAIRMAN: Was there a document that you were going to allow us to copy? Thank you.

[Page 24]

MR. BARNET: I just have two questions left and my next question is with respect to, and I know you can't comment on the audit of the Chignecto-Central Regional School Board, but obviously there are substantial differences between the findings of the Auditor General with the Chignecto-Central Regional School Board and the findings of the Halifax Regional School Board. Can you give us a very quick and brief comment with respect to the different findings between the two audits?

MR. REID: You are being pretty hard on me this morning. Elmer MacDonald is the CEO of the Chignecto-Central Regional School Board. I have known him for 15 years. Elmer was my boss overseas when he was the Director of Dependence Education. You may not know this, but I do - he is one of the most outstanding senior executive officers of a school board in Canada. He is certainly one of the best I have ever worked with. That is one of the reasons, and another reason is he has had a top team working with him since amalgamation. Allan MacDougall is a person I worked with overseas, as well. I know these people. That is a very well-managed board. If we can achieve that level of quality before this year is out, I will be delighted.

So they have a good operation. They have aspects of their operation that we want to emulate and I believe we will accomplish that. So I appreciate the question because I believe in giving credit where credit is due. So any accolades that were given in the Auditor General's report . . .

MR. BARNET: I have 15 seconds left, so I am going to try to squeeze my last question in.

MR. CHAIRMAN: You have 30 seconds.

MR. BARNET: I have 30 seconds? Oh, good.

The board had the opportunity to amortize amalgamation costs, and as well they amortized a loan for $4 million or $5 million to bridge some decisions they had to make. What is the status of those loans and those amalgamated costs? Have they been eliminated as a result of the decision our government has taken?

MR. MORRIS: Yes, those were eliminated last spring with the decision the government made last spring.

MR. BARNET: So there is nothing in the budget for repayment or any of that kind of stuff.

MR. MORRIS: Yes, those have been eliminated. They were eliminated last spring with the government's decision on school board deficits.

[Page 25]

MR. BARNET: Is my time up?

MR. CHAIRMAN: Yes, it is. Thank you. We are going to back through the three caucuses again. We have enough time for about 16 minutes each. So we will start again with Ms. MacDonald.

MS. MAUREEN MACDONALD: Mr. Chairman, I would like to go to Ms. Everett, the chairman of the school board, please, because, as the elected representative, speaking on behalf of the board, I think it would be unfortunate if we left here today without a better understanding of where the board is going with respect to the current labour dispute. It is in its eighth week. I am speaking now as an elected person myself. The calls are coming into my office from parents in my constituency, North End Halifax, in growing numbers every day.

Not only are the numbers of calls I am getting, growing, but the tone, the frustration, the anger, the concern that is being expressed is growing. For example, I had calls from several parents at Joseph Howe Elementary School, an inner-city elementary school, yesterday, who told me that children in that school are being bitten by fleas and bugs in the school and they are very, very upset about the conditions in that school. I know that the conditions in many other schools aren't good. So there is a lot of concern in our community.

I want to say that I have been concerned about the tone and the implications of certain comments that I have heard coming from the board. I don't think labour peace is a luxury. I am from the school of management and labour relations that believes that a strong foundation for any organization is good working relations between an employer and its employees, and that that is actually the way to savings and productivity and efficiency, not the other way around. That is my own bias and views and assumptions.

So I want to ask you whether or not you would agree to mediation, whether or not you would agree to contacting the Minister of Education and asking her to ask the Minister of Environment and Labour to appoint a mediator and let's get on with attempting to settle this dispute because it seems clear that both sides in this have lost the capacity to talk to one another on their own.

MS. EVERETT: I appreciate your suggestion and we actually wrote to the Minister of Education making just that request, yesterday.

MR. REID: That letter went yesterday with the request that it be referred to the Minister of Environment and Labour for some consideration. I need to say that our belief is that with a mediator, and understanding that the usual function of a mediator is not necessarily to interpret the board's position, but clearly the rank and file membership, who we want back in our schools as quickly as possible, do not believe what the board is saying.

[Page 26]

We are going to attempt, this week, to communicate with the membership in a variety of ways. But we feel that the appointment of a mediator might help as a neutral third party to explain to the membership, this is what it means. This is where job security is. This is where privatization is, and all of those things. So, feeling that if it comes from a neutral third party, there might be some willingness on the part of the membership to see really what the board's offer is and what it is worth and then to conduct a vote. However that vote turns out, I mean that's up to individual members to convey that message to the school board. So that's why we thought yesterday it was important to look for any means that we could to find some resolution to this. I might add, incidentally, throughout, this is the first time I believe that the Nova Scotia Teachers Union has made a constructive recommendation and we endorse it fully.

MS. MAUREEN MACDONALD: I want to go back to a point that was made earlier around the cost of administration and the board. I think the statement was made that 2.07 per cent of the board's cost is administration. What does that include? Does that include principals, for example, and, if not, what percentage of administration would you have if principals were included? Maybe you could give me a bit of a breakdown?

MS. EVERETT: Mr. Morris may have the information with him. It would be difficult for me to give it to you from the top of my head because we have many principals who are principals all the time but teach part of the time. Therefore, it would be a proportion of their salary that would have to be allocated.

MR. MORRIS: The budget for the 2000-01 fiscal year for teacher administrators, which are principals and vice-principals, their salaries and benefits are approximately $14.8 million.

MS. MAUREEN MACDONALD: Mr. Chairman, back to Mr. Morris. When you say administration 2.07 per cent, what is it that you count as administration? Where does the level of management sort of end and what are you counting into the administrative side?

MR. MORRIS: Administration would basically involve all of the staff and support functions at 90 Alderney Drive, which is the central office, as well as some of the operations at area offices that support the overall board programs and services, but that is basically where it ends. There are no costs at the school level that are deemed administration.

MS. MAUREEN MACDONALD: When the school closing debate was raging, when that process was going on, there were quite a few concerns raised about the time of the process, the shortness of time that elected board officials had to go through this kind of process. I know that feeder schools to QEH and St. Pat's, for example, are going to be up for review in the coming year. I would like to ask, Mr. Chairman, the Chairman of the board what changes can we anticipate in the review process given the criticisms and given the experience now of the process that has just happened in Dartmouth?

[Page 27]

MS. EVERETT: That policy is being reviewed. I presume there will be changes in time. I think that that is often the red herring; since I have been going through this for 10 or 12 years, I have never known a school closure that people felt they had enough time. In my own view, for what its worth, I think, really, the more time you give the more pain you put the community through. That will all be discussed, but whatever policy we come up with as we review it will have to fit with the Department of Education's policy and be approved by the department.

MS. MAUREEN MACDONALD: Mr. Chairman, there are a couple of things that I would like to say about this, basically as an MLA where there are inner-city schools that will be reviewed. Around the time of this process, the Minister of Education, outside this Chamber, I heard her say this myself and she was quoted in the newspaper as saying that inner-city schools will close as a result of the process next year and I have to say I was quite stunned to hear the Minister of Education say this before the process even occurred. I know from contact I have with parents, they frequently are sceptical that the process is one where decisions haven't already been made prior to the process happening, they have become quite cynical, and I have also heard parents say that there are no objective standards that are being used in the decision-making process, that it is not a process that is based on evidence and good information.

So I guess I would like to know from the board what objective standards are going to be put in place and how will you move toward a more information-based or evidence-based process to review school closures?

MS. EVERETT: I don't know that there will ever be a standard as to how we do it. There certainly will be information and suggestions. I do like the idea of doing a group of schools rather than one school in isolation. I cannot make any statement about what might close and I would suggest that board members will vote on a variety of things. Among those things will be the information they receive, but I do know that the public presentations make a difference. I have seen minds changed at those presentations and so it should. I mean, the community should be able to change minds if they are able and I would not necessarily say that inner-city schools will close.

I don't know what the ratio is of unused or underutilized space in either the QEH or St. Pat's family at this moment. If there is underutilized space, then it certainly is a possibility but, again, I would not - I am not trying to contradict the minister, I have great respect for the minister, but it will be a decision for the board which could lead to a number of closings or it could lead to none, or it could lead staff to advise us that there isn't any space and not to bother talking about it which would certainly make the board very happy I might add. Nevertheless, that is about all I can tell you at this point in time.

[Page 28]

MS. MAUREEN MACDONALD: I want to go back to the earlier issue I had raised around the Auditor General's Report and assumptions that appear to have been made that revenue could be retained when that particular program was being cut. I am wondering if you could tell me what justification there was for that assumption that $1.3 million in revenues could be retained and whether or not that was a correct statement now when you look at the information, or whether the provision of that information or the fact that information going to the board wasn't provided, was it negligent or was it deliberate?

MR. CHAIRMAN: Mr. Morris, are you going to tackle that?

MR. MORRIS: I assume you are talking about all of Community Collaborations and Partnerships and not just EXCEL.

MS. MAUREEN MACDONALD: Yes.

MR. MORRIS: Actually the net effect of dissolving Community Collaborations and Partnerships was removing $1.6 million of expenditures from the expenditure side of the budget and removing $1.3 million of revenue. So there was still a net revenue gain from that decision and basically the two main programs that comprised those numbers were the EXCEL Program, the child care program and the community education, or the sort of after school, evening type programs.

It was our analysis that by looking at alternative ways to deliver those programs, we could still retain the net revenue by allowing for other options for external providers to continue to offer those programs and we would rent the space to those external providers and, therefore, rather than the board operating and managing those programs, we would just be the provider of the space and retain a rental revenue. So the budget clearly indicated what those net revenues would be as a result of the decision that was made by the board on Community Collaborations and Partnerships.

MS. MAUREEN MACDONALD: It is rather a significant difference though, isn't it, between what was proposed and what actually occurred?

MR. MORRIS: Historically I would say it is a rather dramatic change, but a change for the positive because in looking at the financial results of the Community Collaborations and Partnerships division in the previous two years, the net combined operations were showing a fairly significant deficit from that operation of the board, but by moving to a new service delivery model, especially for EXCEL and community education, we were actually able to turn that around so that those programs and services now provide a contribution to the board as opposed to running a deficit.

[Page 29]

MS. MAUREEN MACDONALD: I guess the last thing I would like to say is that you are in a budget-making process right now for the coming year and I am wondering if you have learned any lessons from this. Are you doing this process with comparative figures, for example, the year before, making your financial assumptions more transparent and actually documenting them, and what have you, because it seems to me this was a major failing of last year's process?

MR. MORRIS: We have learned a lot of lessons over the last two years. As Mr. Reid indicated, we are very grateful when external experts like the Auditor General, like officials from the Department of Education, like our auditors from Grant Thornton, when they come in and provide us their observations and their expertise; we welcome that and we have learned a lot, not only ourselves, but we have learned a lot from those people who have come in and helped us. We have made dramatic change in the last year and a half to two years and we still have a lot of change left to go through, but we are on the right track.

MR. CHAIRMAN: Time is up and we are back to Mr. MacKinnon. I am sorry, my apologies, the MLA for Victoria, Mr. MacAskill.

MR. KENNETH MACASKILL: Mr. Reid, in your opening comments you made some statements that I would like a clarification on. You used such words as your house was in order. You used words like world-class model for Canada. The question or the explanation I would be looking for is the schools are without toilet paper and other paper, soap, and the report is saying schools are - and I will use their words - filthy; student safety has been compromised; 400 people on strike. Surely, when you were putting your house in order, you would have put some money aside for collective agreements that might have expired. So I am asking, could you explain how you consider your house in order?

MR. REID: Mr. Chairman, there is a variety of questions in there and some observations. What has been indicated is that the schools are unhealthy and so forth and I assume from that that the expectation is that schools would be closed. Our fundamental responsibility as a board of education is to provide education and so that has been our objective. Our schools have toilet paper. Our schools have soap. There is no school that does without. If they do, we have a communication protocol in place that the principal on a daily basis identifies those issues with the operations department.

MR. MACASKILL: So the media reports are wrong?

MR. REID: Yes, they are. Those issues are addressed immediately. What we rely on is the external expertise of the medical officer of health who has been in 29 schools - some of them more than once - who has indicated to us that the schools meet acceptable standards of health and safety. I can tell you that if there was any situation whatsoever based on the advice of the medical officer of health that put staff or put students at risk, I would close it in a minute. I will not keep a school open that exposes people to risk. But I have to tell you

[Page 30]

that we do have a process in place to address those issues. The bottom line is, are we able to maintain, consistently across the system, the same high quality standard that is provided by our custodial maintenance people? Absolutely not and that is why we want them back and I guess that is all I would say on that item.

[9:30 a.m.]

MR. MACASKILL: So, you still consider your school board a role model?

MR. REID: What I said in my opening remarks is that we have the potential to be an outstanding board. We have the potential in the province to be an outstanding province in terms of public education. All the tools are there. The universities, the colleges of education, the commitment in the community to education - all of the tools are there. I do believe that given that we continue on the track that we are on, we will help to contribute to a better future for students in this province. I believe that with all my heart.

MR. MACASKILL: Let me move to another area. As we know, there is a great deal of discussion and controversy around the issue of school closures in the HRM. Initially, schools within the families of schools were targeted and then the school closure process was stopped - just when parents thought things were going fine, more schools were brought forward and the long, arduous process began all over again - more schools were brought forward for closure. Can you explain why the process was started, stopped and then started again with a larger list of schools than was first announced?

MR. REID: In September of the year, the area of schools were designated. Those were the schools that were designated for review. That list never changed, it didn't change from September 25th through to April 17th. The process that was developed was first of all that we would conform entirely to the requirements of the Education Act and its regulations on review of schools for closure. The board also directed that we would give a legitimate role to the school review committees, that we would ensure broad public consultation at a variety of levels. The whole model of review was that the senior staff of the board, the review committee in the communities composed of the school advisory council and the board itself would operate independently right through to April 15th. That is exactly what happened.

The school review committees in the communities generally made certain assumptions about the process that, despite our best efforts to explain what they were, were not accepted. The community thought that it had the authority to decide certain things that didn't - it had the challenge of solving a problem. The board set a reduction target - in the case of Dartmouth High and the Prince Andrew High family of, I believe, it was 76 classrooms. Their task was to come up with scenarios that would achieve that outcome. They didn't, nor did senior staff. In the final analysis, the board determined that it would reduce by 46 or 47. That was the process and it was very onerous and we will be looking to make it more efficient. It will garner the same complaints and the same concerns.

[Page 31]

MR. MACASKILL: So, that was strictly the board's decision without any interference?

MR. REID: Mr. Chairman, I don't understand the question.

MR. CHAIRMAN: Mr. MacAskill, I am not sure I head the question, could I hear it again?

MR. MACASKILL: That was the board's decision clearly without any political interference? Just tell me yes or no to that.

MR. REID: The board's decision on which schools closed?

MR. MACASKILL: On the change, from starting the process on what schools were going to be closed and then stopping it and starting it again.

MR. REID: The process in mid-February, what you are referring to there, that was a Committee of the Whole recommendation to the board. It didn't stop the process, not for a minute. It caused some confusion, but yes, it was a board decision but based on independent advice from the school advisory councils and from senior staff of the board, the information that the board itself garnered from its public meetings.

MR. MACASKILL: That is fine, Mr. Chairman.

MR. CHAIRMAN: Back to Mr. MacKinnon.

MR. MACKINNON: Ms. Everett, you indicated that you asked the Minister of Education to approach the Minister of Environment and Labour to appoint a mediator. Have you made the union aware of your intentions?

MS. EVERETT: Not to my knowledge as yet, no. They may know, but they have not been formally advised.

MR. MACKINNON: I might be wrong, but in my experience, having served as minister, generally that would be cc'd off to the union. Was that the case?

MS. EVERETT: Not to this moment, no.

MR. MACKINNON: Would you be willing to do that?

MS. EVERETT: Certainly.

MR. MACKINNON: Perhaps, before the day is out.

[Page 32]

MS. EVERETT: Oh, yes. Within an hour, how is that?

MR. MACKINNON: It may help to stop the bells ringing on the street.

Mr. Reid, with regard to the budgetary process, and obviously that was a concern. (Interruptions) I don't know if my wires are loose, but maybe the wires of the mike are loose. (Interruption) That is argumentative.

MR. CHAIRMAN: I think we are getting a message from the technician. Is the system all right? (Interruptions) Perhaps, Mr. MacKinnon and Mr. MacAskill could switch seats.

MR. MACKINNON: Mr. Reid, with regard to the budget managers within the Halifax Regional School Board, are they all involved in the budgetary process in terms of the responsibility, the accountability and the authority to report?

MR. REID: Yes, they are.

MR. MACKINNON: My next question would be to the Auditor General. Mr. Salmon, you have raised a number of concerns with regard to the Halifax Regional School Board. Would you agree with that statement of Mr. Reid's?

MR. SALMON: Yes, Mr. MacKinnon. If you read Paragraph 5.51 on Page 76 of my report, I indicate the key features of the budget process in the school board. I think point three indicates that there is instruction from senior management to financial planning staff to complete preliminary budgets. The process was there, those were key features. Our concern was lack of documentation, not the process.

MR. MACKINNON: The lack of documentation would leave it open as to whether, in fact, all those budget managers were effectively part of the process?

MR. SALMON: If the documentation had been available to us, we would have been able to form a more concrete conclusion.

MR. MACKINNON: Mr. Reid, you indicated that if you had any inclination whatsoever that the schools weren't a safe environment for the children you would close them down. Have you had an opportunity to review the Joint Occupational Health and Safety reports from the various schools?

MR. REID: No.

MR. MACKINNON: Are you aware that there are Joint Occupational Health and Safety reports prepared on a regular basis?

[Page 33]

MR. REID: It is part of our process, yes.

MR. MACKINNON: When was the last time you reviewed them?

MR. REID: I think the last time I took a specific look at a joint occupational report would be with respect to Halifax West High School. That isn't something that my day allows me to do.

MR. MACKINNON: Would you give an undertaking to the committee that you would secure whatever Joint Occupational Health and Safety reports are available, that they will be provided, the latest ones that have been prepared?

MR. REID: Provided to whom?

MR. MACKINNON: To the committee.

MR. REID: Mr. Chairman, with respect, whatever Joint Occupational Health and Safety reports there are, I would be pleased to provide to the committee but, to be frank about it, I don't see how relevant it would be.

MR. MACKINNON: I think the committee will make that determination. Having a safe environment is certainly a cost factor, and this is a committee of cost for value. Mr. Reid, what is your salary with the board?

MR. REID: It is $135,000.

MR. MACKINNON: Is this a long-term contract or a short-term contract?

MR. REID: It is five years with three to go.

MR. MACKINNON: I see. First of all, I would like to direct my next comment, observation to Ms. Everett. I know we have, perhaps through the media and through general conversation, been jostling a little politically, as of late. I think Ms. Everett would readily agree, at no point in time would I ever suggest or did I ever suggest that the board was not

being as effective as it possibly could. It is as effective as the information that is being provided. I have a lot of respect for the board - I may not agree with all the decisions, but I think we have discussed that before; we have met on committee before and I wanted to state that for the record. My concern is not at the elected board level, it is with the senior administration and the lack of accountability and I wanted to put that on the record.

Clearly, what I have witnessed here today is even the suggestion that you wouldn't be aware of a senior staff member looking to take action against a member of the Legislature and you are chairman of the board. That type of flow of information - it is quite concerning.

[Page 34]

If that is going on, how many other individuals would be intimidated by such a process. Certainly whether you would agree on the issue with regard to Mr. Flemming or not, that is another matter. That flow of information seems to be very restricted, in my view, from what we have been able to determine. That's a concern that I raise with you as chairman of an elected board. I know it is very difficult because, in many cases, the board members are part time for the most part, they get paid very little and they have to rely on the expertise that is within the board.

I take a bit of an affront to Mr. Reid's comments with the Teachers Union. My mother is a life member of that - she is only one of maybe seven or eight in the entire province. She taught school for 45 years, about to receive her second honorary doctorate degree of law from a university, well respected. I have at least four members of my family at various levels who are school teachers and I have never, ever witnessed a senior administrator make such a negative comment. Those comments are counterproductive, in my view, to bringing closure to a very unfortunate situation. They do very little to enhance a very . . .

MS. EVERETT: Well, I was aware of it at the time, I have to state that. I do believe that Mr. Flemming was acting inappropriately - boards work a little differently than most - this House, for instance. The agreement under our code of ethics is that the majority decides. Everyone has one vote, including myself and when, if I don't agree with the board, sorry, that is tough. It is my duty to say what they tell me to say and that is fine. Everyone else - we tend to have an agreement that we do not criticize once the vote is taken. We all have an opportunity to influence what people think, but basically, it is the majority that rules. It is really the only way this kind of an organization, I believe, can work.

I don't believe Mr. Flemming was intimidated. I don't believe most board members can be intimidated and I also believe that Mr. Flemming is smart enough and self-confident enough not to be, but that is beside the point. I guess the point to the whole thing and the only way I can respond is that - and it was discussed again last night, although we did not take a formal vote at that time - it was quite obvious from the different comments around the table that the board is fully in support of the negotiating team and the actions that have been taken so far.

That is not to say we don't want a settlement, we want a settlement very badly, but there are some things that we feel there need to be changes in and the board is not prepared to move on those things.

MR. CHAIRMAN: Okay, thank you. I know Mr. Reid wanted (Interruption) But we are through the time for the Liberal caucus so I have to move now to the PC caucus and Mr. Hendsbee wishes to start off.

MR. REID: Mr. Chairman, do I have . . .

[Page 35]

MR. CHAIRMAN: I am afraid that (Interruption)

MR. HENDSBEE: I will allow Mr. Reid to comment.

MR. CHAIRMAN: In that case, you have been invited to add comments, please do.

MR. HENDSBEE: Yes, I will allow Mr. Reid to make a quick comment before I ask my questions.

MR. REID: Thank you, Mr. Chairman. Just in reference to a comment that was made just now about NSTU. I have been a teacher for 31 years and proud of it. I have taught from Grade 2 through university and I have done that over the last 31 years. Through a rather strange irony that is quite unique to the Province of Nova Scotia, I am a member in full standing in the Nova Scotia Teachers Union. I pay dues every month. I can't understand why, but I do. The suggestion is not appreciated. I am teacher, proud of it, and that is all I will say on that subject.

MR. HENDSBEE: I would like to, first of all, make a quick comment for the record. I did not appreciate the misrepresentation by the member for Cape Breton West in regard to the lobbying letter that the member for Dartmouth South sent in regard to Alderney Elementary School. I think that if the honourable member looked at the facts that were available for the school board in regard to the safety factor of what alternative locations there were for those students, in walking distance or busing, I think the member should look at those factors before making such comments.

I am surprised that the member for Dartmouth East did not make representations here on behalf of the Liberal caucus instead of the members for Cape Breton West and for Victoria. The member for Dartmouth East has been present in the gallery, and I am sure the substitutions are available for that caucus to allow representation from the honourable member who lives in the Halifax Regional School Board area.

Anyway, I would like to go on in regard to the comment that Mr. Reid just made, about his being a member of the Teachers Union. You are not recognized as a teacher in the profession of the superintendent, is that correct? I have looked at statistics here, the teachers by position as of September 30, 1999, under the superintendent of Halifax it says zero. This is off the Department of Education Web site of research and statistics. Could you just clarify that matter in regard to your relationship with the Teachers Union as an active or non-active teacher?

[Page 36]

MR. REID: I am not sure I understand the question. I am a qualified teacher; it is a requirement, to hold the position of superintendent in the province. I am a member of the Nova Scotia Teachers Union, because that is also a requirement. Am I an active member? No. I am not sure that responds to your question.

MR. HENDSBEE: Perhaps I will just put the question another way. Do you think there has been any professional or personal animosity towards you in regard to your capacity in dealing with the unions?

MR. REID: Sorry, would you repeat that?

MR. HENDSBEE: Do you believe there has been any professional or personal animosity towards you in your position as superintendent, towards any union negotiations?

MR. REID: It is a fact of life. Having had this job before in other jurisdictions, when you are the superintendent of the school board you are the one who attracts the majority of attention. Every perceived misdeed or whatever of the board is focused on you.

MS. EVERETT: In case it isn't, we blame him.

MR. REID: There you go. With respect to the, I bear no animosity whatsoever to any union. I do question, however, the actions of the Nova Scotia Teachers Union with putting teachers in the situation where they become health and safety inspectors in school. I think it detracts from their ability to focus on students and learning, which are their primary responsibility. I have some issues there, but I certainly don't with the teachers themselves. I do know the difference. This province is blessed with extremely well-trained, well-qualified teachers who do an outstanding job in classrooms every day.

With respect to animosity towards any other union, I do not. I have very serious issues with Mr. Stockton. I am on record, very clearly, as saying that. I have no animosity towards, nor bear any ill will towards, any of the people who are sitting in this gallery today. I want these people back to work; I think they should be back to work. Given a proper interpretation of the information on the board's offer, they will be back to work. I am just hoping they have that opportunity sooner than later.

MR. HENDSBEE: When I was a municipal councillor, and also with one of my colleagues, a representative of the school board at the time, Ms. Dawn O'Hearn from the Lake Echo region, we both asked for the possibility of looking at, for the regional school board and the regional municipality, practices related to economy of scale of joint services, be it shared services or bulk purchasing, whatever the case may be. Has there been any progress in regard to trying to find savings within the system?

[Page 37]

MR. MORRIS: Mr. Chairman, we exchange views with the HRM on a fairly regular basis. Where the opportunity arises, we have the ability to partner with them on some of their

procurement initiatives and, in fact, we do partner with them in that regard. One of the discussions we had last year was with regard to the implementation of SAP, because HRM uses SAP as well. There has been some discussion of working co-operatively with HRM on that particular initiative as well. We do have discussions from time to time, and where opportunities arise for mutual benefit we certainly do explore those.

MR. HENDSBEE: Under your Halifax Regional School Board Cost Driver Review, June 1999 report, there is a subheading of Property Services, talking about some of the procurement problems. I understand that there has been an awarding of tenders to be a supplier of record. One such instance would be CHEM TECH in Chezzetcook, I believe it was the company that was supposed to supply maintenance supplies, cleaning agents and solutions. I understand that it has been the practice that they are not being utilized and, therefore, they are going and buying cleaning agents and materials at various stores for the various schools. What is the problem going on there?

MR. REID: I haven't been advised of that particular situation, but I can certainly look into it.

MR. HENDSBEE: Thank you. My last question will be in regard to facility management. There was a reference that perhaps the province may take it over. As a municipal councillor, I always felt the municipality should provide facility management property services. Do you have comments you would like to add to that?

MR. REID: If facilities in the province, whether handled by municipalities or by the Department of Education or by the Department of Transportation and Public Works, if that can be done in a way that achieves savings that we can reinvest in the classroom, I am all for it. Our job is primarily to focus on the education of children. All of the other things that we have to do in the course of managing the board's affairs that detract from that are things that I would personally prefer others do. If we can find ways to make savings on those things that really have nothing to do with teaching and learning I am all for someone else doing it. I want us to focus on kids and how they learn.

MR. CHAIRMAN: Now some questions from Mr. Chataway, MLA for Chester-St. Margaret's.

MR. JOHN CHATAWAY: Mr. Chairman, good morning. Welcome, colleagues, and certainly welcome to the Halifax Regional School Board and the Auditor General. Basically, I see the Auditor General and the school board had a relationship when they were audited, of course. Your responsibilities are to administer and account for public education in the HRM. Presumably, when the audit went on, you had some agreements and you had some disagreements on the way you were doing your business, and things like that. Very simply

[Page 38]

put, I would like to know the top three things from the audit process that you consider to be the most beneficial, helpful and informative for the board, as a result of that process.

MR. MORRIS: This would be, perhaps, my own personal view, this isn't a list that the board would have put together. I think the benefit from this report, the idea of proceeding with implementation of a formal business planning process and making sure that is integrated with the budget is an important finding, and an observation which we have acted upon. A clear statement of the budget assumption so that the board and the staff who are involved in the budget preparation are fully aware of the basis on which we have built the budget, so they can be comfortable that the numbers that are being brought forward have a rational basis to them and we can provide them with that rational basis. Again, we have acted upon that. I think it is very important for the board members to have that information.

Perhaps, the final one, again, which we are working on, is a clear documentation of our staffing model and how that integrates with the budget so that with the enrolment projections that we have for the coming September, we will be showing how the staffing model that the board employs to allocate teaching staff and all education staff really, to the various schools, will be implemented based on the projected enrolment, and then how the dollars are tied into the budget with those actual teaching positions. Again, I think those are, probably, personally, my three top items. I think the board will see a dramatic improvement in that kind of documentation when it comes forward.

MR. CHATAWAY: Mr. Morris, certainly you have made some very good points and I think we all agree to that. I think we have heard it all along, the Auditor General talked about the audit of the Halifax Regional School Board, I think, basically, made the statement that there was far more good than evil in that process. I think you are saying the very same thing. I guess, just for curiosity though, what three things, if you want to make it four, or two, or one or three things, do you consider from the audit process as the least beneficial or distracting or superfluous to the task of being a school board?

MR. MORRIS: Personally, my response to that would be I don't think anything was distracting. I mean there may be some particular things that we don't necessarily see eye to eye on or necessarily agree on but I think that is all part of the audit process. The Auditor General's staff did a very thorough review and I think we welcome all of their observations, whether we agree with them or not.

MR. CHAIRMAN: Thank you, Mr. Chataway, now to Ms. McGrath.

MS. MARY ANN MCGRATH: Mr. Chairman, and welcome. I just want to make a brief comment about the current labour dispute, just to say that I know that we all have not only neighbours and students enrolled in schools but we all have neighbours and friends involved in the strike, or at least I do, and that whatever you can do to bring an end to this I personally would appreciate it, for their sake.

[Page 39]

My question is regarding supplementary funding and a point of curiosity for me. During the plebiscite that was run in concurrence with the school board elections, there were advertisements that appeared in the paper dealing with the revenue generated from supplementary funding, which is approximately $17 million. It also indicated that the cost of administering and accounting for that $17 million was $440,000.

MR. REID: It was $340,000.

MS. MCGRATH: That was, I don't know, maybe in my mind, quite an excessive proportion of the $17 million in relation to what you would spend accounting for, roughly, $300 million that you administer in the rest of the budget. So I would be curious to get an explanation as to why those costs are so high.

MR. REID: Yes, I can do that. When we started two years ago, literally, to bring some accountability to the supplementary fund, the board established a policy, we established a financial reporting process. We spent a lot of money out of our overall administrative budget to bring some clarity to that particular fund and how it is expended. Basically, if you take $17 million, our factor for administration is 2 per cent, that's where the $340,000 comes from.

MS. MCGRATH: One other question. Paper, there has been quite a long and involved public discussion about the school board's use of paper or lack of its availability. Yet I would note that, particularly last spring and again somewhat this year, during whatever disputes that seem to be ongoing with the board, there seems to be no lack of the availability of paper to lay out whatever version it is of the facts that you wish to but at the same time at the school level, paper continues to be a shortage. Do you consider that to be a slight conflict in the way that you use your paper budget?

MR. REID: No, I think people in this Chamber are aware of the fact that for the first time in its history the board balanced its budget. Our financial statement, unaudited financial statements indicated that we achieved an operating surplus last year. We did that because in our December financial statement we were tracking a potential deficit in excess of $3 million. I have to tell you that that is a nightmare for a board that is trying desperately to balance its budget. So we had to take some very, very tough measures, as the board has done for the last couple of years on all of the things that it has done, we had to take some tough measures to rein that in so that we would be able to have a financial statement that showed that we were balanced.

[10:00 a.m.]

So it did impact on schools, no question. Were schools out of paper? No, they weren't. We had a process in place with a reserve of paper that any school could call and make a claim from. We, in addition to that, had a significant contribution of paper from a

[Page 40]

couple of corporate partners in the community. So those resources were there. The media reported a certain story that, frankly, didn't have a lot of basis in fact.

MR. CHAIRMAN: Thank you. All of our time this morning for questioning and answering is up. There a couple of administrative things before we finish off. I will note that the April 12, 2001 letter from the MLA for Dartmouth South has been tabled. The other two documents that have been tabled this morning are an e-mail dated May 2, 2001, from David Reid addressed to Michael Flemming, the third document tabled was a May 7, 2001 memorandum, again from Mr. Reid, which is a response to an application for access to information, No. 06-A-01. As for materials that we have requested from the school board this morning and you have agreed to provide, if it turns out that there is any problem providing them to the committee, say before the end of this week, perhaps you could let Ms. Stevens know. If there is a problem, please let us know and the nature of that difficulty.

The last item I think I should note is that I think I heard Mr. Gallant suggest that there was something he characterized as qualified privilege for MLAs. I think it is, in fact, absolute privilege, if you check Section 27 of the House of Assembly Act. The last point for members of the committee is we do meet again on May 23rd in order to look at OTANS.

Mr. Hendsbee, did you want to help us here?

MR. HENDSBEE: Mr. Chairman, I thought our practice was to have an opportunity for a closing comment or remark by our guest.

MR. CHAIRMAN: It is not unusual to ask anyone who appears here to make closing comments. On the other hand, we are scheduled to appear from 8:00 a.m. to 10:00 a.m. Our time actually is up. That is the only reason. In any event, I think we are past our time, at this point. Thank you all very much. Mrs. Everett, did you wish to . . .

MS. EVERETT: I will be very, very brief. I wanted to thank you for this opportunity but more than that even, I wanted to thank Mr. Salmon and his staff. I think it was tremendously helpful to the board to have him do the audit. I would like to have him back every year, or every couple of years, whatever. Thank you.

MR. CHAIRMAN: Thank you, Ms. Everett and thank you to the rest of your staff as witnesses. Thank you to the committee members and to our guests today. We stand adjourned.

[The committee adjourned at 10:04 a.m.]