1. PUT TITLE HERE GSN Briefing Capital Programs Branch Ministry of Education OASBO March 27, 2008

2. Purpose  To provide school boards with an overview of the capital-related changes proposed in the Grants for Student Needs (GSN) in 2008- 09, as well as changes to the 2007-08 GSN and three additional Education Act regulations. It should be noted that regulations to govern grants to school boards in their 2008-09 school board fiscal year has not yet been made. The information in this presentation are provided in the absence of such a regulation. As well, proposed changes in this presentation for the 2007-08 school board fiscal year have not yet been made. The initiatives and investments described in this presentation must be implemented by, and are conditional upon, the approval of such a regulation by the Lieutenant Governor in Council, or the Minister of Education. The Ministry intends to seek approval for such regulations and will advise you if they are approved.

3. New Capital Funding Investments for 2008-09 $750M in new funding to support capital investments  $500M in new funding for boards to support their capital priorities, including Growth and Prohibitive to Repair (PTR)  This new funding is in addition to the $137M Growth Schools funding announced in August 2007, for the 2008-09 school year  $250M in new funding to support Good Places to Learn (GPL) high and urgent needs and renewal projects, including to address inadequate or lack of specialized spaces such as gymnasia, libraries and science labs.  This new funding is in addition to the $500M that has now been allocated in the 2007-08 school year for Stage 3 GPL renewal project.

4. Good Places to Learn  In 2005, the Ministry announced approximately $2B to support high and urgent renewal projects.  GPL Stage 1 (2005-06) provided an allocation of $1B to address high and urgent and renewal needs.  GPL Stage 2 (2006-07) provided an allocation to support a further $500M to address additional high and urgent renewal needs not funded in Stage 1, and to recognize schools that lack, or have inadequate, specialized spaces, such as science labs, libraries, gymnasia or broad-based technology.  GPL Stage 3 (2007-08) will provide school boards with an allocation to support a further $500M to continue to address urgent and high renewal needs, schools that have lack, or have inadequate, specialized spaces not funded in Stage 1 or Stage 2.  GPL Stage 4 (2008-09) will provide school boards with an allocation to support a further $250M to continue to address high and urgent and renewal needs.

5. Growth School Capital Program Growth School Program changes for 2008-09  Growth School funding eligibility has been extended to planned schools that will be opened by the 2011-12 school year.  This is an additional two years in comparison to the 2007-08 program.  Growth School funding eligibility has been extended to boards that do not have an Education Development Charges (EDC) by-law.  A number of boards have were not eligible because they did not have an EDC but are experiencing pockets of new residential growth.

6. Capital Debt Commitment Program These technical changes take affect in the 2007-08 school year.  Protect un-accessed Enrolment Pressures funds in NPP reserve  Enrolment Pressure (EP) related funds that exist in a board’s NPP capital reserve as of August 31, 2006, would not have to be applied against the board’s capital debt commitments.  Only EP related funds in reserves that are still required by the board to address enrolment pressures at the school or areas where they were generated would be protected.  Protect un-accessed 2005 Policy Transitional funds in NPP revenues  2005 Policy Transitional Funds that have not been used by a board to address the intended need for these funds would be protected in the board’s NPP revenue stream from being applied against a board’s capital debt commitments.  Recognize capitalized lease payments as an eligible Debt Commitment  Long-term lease payments for educational spaces that were committed by a board before August 31, 2006 are eligible for capital debt commitment funding.  To recognize these amounts where a board converts the annual lease amounts to fund the acquisition or building costs of replacing the leased space.

7. Other Capital Regulation Amendments These proposed amendments would take affect in 2007-08  Create Proceeds of Disposition (POD) Reserves for Prohibitive to Repair (PTR) schools  Amendment to Reserve Fund Regulation (Reg. 446/98)  To create a new category of POD capital reserve.  Boards that receive POD revenues from a PTR-funded site are required to place the proceeds into this new reserve and will be required to consult with the Ministry on the application of these proceeds to future capital priorities.  Long-term Financing of New Administration Buildings  Amendment to Permanent Improvement Regulation (Reg. 580/07)  School boards will now be able to long-term finance the construction costs of new administration buildings.  Clarify Circulation of Surplus Properties before Sale on Open Market  Amendments to Disposition of Real Property Regulation (Reg. 444/98)  To clarify that boards need to re-circulate a property they want to dispose of through the identified agencies (e.g. school board, municipality, other government agency) if it has been more than three years since it was circulated to the identified agencies.

8. Long-Term Financing for Capital Programs  The Ministry and the Ontario Financing Authority (OFA) will continue working together to offer a provincial long-term financing vehicle for construction costs by school boards under the following programs:  Good Places to Learn  Prohibitive to Repair  Primary Class Size Capital  Growth Schools  Capital Transitional Adjustment for French-Language boards.  Ministry will also work with the school boards to provide financing through the OFA for costs funded through New Pupil Places allocations, where these costs have not been permanently financed.  Short-term Financing  Recognize 3 month Banker’s Acceptance (BA) rate in effect on September 2, 2008 for internal reserves borrowing.  Recognize short-term interest costs for the 1, 2, or 3 month BA plus 20 points for external borrowings.

9. Next Steps  A memorandum will be released in the near future to school boards to provide more details on capital funding, including:  A reporting/submission cycle for Ministry’s approvals for Transfers from Reserves, PTR and Growth Schools approvals;  Boards will be asked to update information in their capital plans to identify and support their capital priorities over the next 1 to 3 years.  Ministry will continue to work with school boards to complete their Capital Liquidity Templates, and approve Transfers from Reserves  Ministry will continue working on changing existing grant accountability processes to ensure equitable and adequate allocation of funds, efficient utilization of existing space, energy efficiency, appropriate design and construction of schools, and cost- effective maintenance and repair of schools.