The Vancouver school board has taken out a $1.6-million loan from BMO to help the province fund a new elementary school in downtown Vancouver.

Funding new schools is a provincial responsibility, but when Victoria balked this year at covering unexpected additional costs for the project, the board decided to use its own operating dollars to get the school built, according to a Friday announcement.

“I am very pleased to announce that the board, through some creative and unique solutions, can now move ahead with the construction of this much-needed school,” board chairman Christopher Richardson stated.

The education ministry had earmarked about $13.5 million in 2012 for the 510-student school at International Village at Abbott Street and Expo Boulevard. But the price tag had climbed to $17 million by 2014 because of design changes and other expenses, and the shortfall was funded by the school board’s capital reserves after Victoria refused to cover the increase.

Construction bids came in earlier this year, and they were high. More than $1.5 million extra was needed, but the province told the school board to cover it themselves, according to an emailed statement from the education ministry.

“The ministry advised that additional funding will not be approved and that we expect the (Vancouver board of education) to reduce the project scope or fund the additional costs. ... We will continue to work with the board in support of the project.”

The winning construction bid was set to expire this weekend and the board, needing to act quickly and unwilling to redesign the project, went to the Bank of Montreal and secured a loan, Richardson explained.

“We were down to the eleventh hour and this going out and getting a loan was seen by us as a prudent thing to do,” he said in a phone interview. “We don’t have operating funds just lying around. However, we don’t have a lot of other choices.”

The board did not consult members of the public because of the urgency of the situation, said Richardson.

“This wasn’t to avoid going to the public or be secretive,” he said. “We had exhausted alternatives and that process took until earlier this week. Therefore at that point there wasn’t time to go out and consult the public ... in this case I think they’ll understand because they know we need this school.”

Vision Vancouver school trustee Patti Bacchus said it was the first time she could recall a board using operating funds to help the province build a school.

“I’m very pleased the project is going forward, but this is really troubling. What will happen the next time when the seismic budget isn’t enough? Will (the ministry of education) expect us to take that from classrooms as well?”

Bacchus criticized the decision by the Non-Partisan-Association-led board, saying it will put even more strain on an already tight operating budget, and said members of the public should have been consulted.

A new elementary school in False Creek is needed to take pressure off others downtown that are at or over capacity. Construction on the four-storey, 48,000-sq-ft LEED Gold school is set to begin shortly with a targeted opening date of early 2017. It will be integrated into a mixed-use residential development near Andy Livingstone Park.

It’s a tight spot to build in, but the project is no more expensive than the average school, said Bacchus.

“The pricing we’re getting is consistent with current construction costs and government is choosing to ignore that and saying ‘Too bad, you’ll have to figure it out,’ and walking away.”

The board recently unveiled a preliminary budget proposal that called for nearly 100 layoffs and the closure of 28 Vancouver classrooms as it works on balancing its nearly $500-million budget. It must approve a final budget by the end of June.

mrobinson@vancouversun.com