At last night’s school board meeting, we finally got to see where the school district’s business company ended up financially at the end of June. Not surprisingly, the business company is claiming a miraculous pre-election profit of $36,649 for the year ending June 30th.
In light of last night’s announcement, it will be interesting to see the detailed financial information on the school district business company at their AGM next week. What I’m really curious to know is whether the accumulated interest on the $1 million borrowed from the school district by the business company will figure at all in their financial calculations. After all, there aren’t many places where you can borrow money for free. However, I doubt that any borrowing costs will be showing against the $36,649 being claimed as profit.
The other thing that needs to be taken into account is the fact that the business company’s CEO (Brent Atkinson) is working for free. In the real world a CEO position would represent a cost to the business company of at least $130,000 per year which means the business company really ended up last year with a minimum $100,000 loss.
It’s also important to keep in mind that when Brent Atkinson took over as CEO of the business company, on an emergency basis, it was intended to be a short term solution. It was recognised that there was an inherent conflict in having a school trustee serve as CEO. But Brent has now been in this CEO position for a considerable amount of time and it is therefore not unreasonable to expect that costs reflective of a CEO salary should be accounted for in the business company financials.
If my memory serves me correctly, the previous CEO of the business company (Russ Pacey) was being paid in the order of $120,000 per year as an Assistant Superintendent, of which 20% was being shown as a cost for the business company. Even at 20% of a $120,000 per year salary (and I believe the 20% figure is low), the previous cost of a CEO for the business company was a minimum of $24,000 per year.
So in my opinion, the profit being claimed for the business company is really just pre-election smoke and mirrors. The business company has not lived up to the promise held out to the community seven years ago that the venture would be financial boon to the school district and its students. In reality, it’s been a boondoggle and not a boon at all.
- Patrick O’Connor
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As a footnote to my posting above from yesterday: Record reporter Niki Hope was wondering whether the business company has “to pay interest to the school district on the $1 million loan it received to get the school off the ground.” The answer she received from the school district was, “no,” the business company does not pay interest on the $1 million it has received from the school district (see Niki’s blog on the Record’s website).
The information Niki received is, in fact, correct: The school district no longer charges the business company interest on the $1 million plus that the business company has borrowed from the district. The business company hasn’t been charged interest for a couple of years now even though many people in the community feel it should be.
Here’s the history as I know it: When the business company began operations about seven years ago it started coming up short at the end of each business year almost immediately. To fill the gap, money was taken from the school district and “loaned” to the business company to cover the financial shortfalls. This money ostensibly came from the surplus revenue generated by International Students; but ultimately it came out of the financial resources available to students and staff in this school district, which is when the business company really started to come onto the radar of the community.
At first, interest was being calculated and charged to the business company on the money it was being “loaned.” At one time, this accruing interest actually showed up in various spreadsheets and summaries we were shown at Finance and Administration Committee meetings. However, when these yearend operating deficits for the business company started to become an annual event, and the amount being “borrowed” to cover shortfalls had ballooned to several hundred thousand dollars of school district money, the “loan” was euphemistically renamed an “investment” and all of a sudden the accruing interest was wiped clean.
As you know, the business company continued along the path of ever-increasing yearend deficits for a number of years until Brent Atkinson finally stepped in and lowered the boom. That’s when he took over as CEO of the business company. As he told one Finance committee member back then, he just barely had “this tiger” by the tail.
However, Brent cannot be expected to work for free as the business company CEO indefinitely. It’s not fair to him because I’m sure the position entails a great deal of work. Brent has certainly managed to refocus the out-of-control business company and stop the bleeding of money by narrowing its scope, but the question of profitability and the promise of a massive financial return that would benefit the students and staff of this school district has yet to materialise.
Patrick O'Connor
Even if we leave aside the money that's been siphoned from New Westminster school district's children, just what kind of education are the students in China receiving? I do not believe that an education taught in English to a class full of students who do not speak English will generate anything like the results of a true "Dogwood."
This dubious experiment is draining money from this school district and watering down the value of a BC Dogwood. Drip, drip drip.Or should I say flush?
So here we have a business venture, with no known business plan, no risk profile and with no arms-length CEO operating in a country that is recognized by all experts as being one of the most difficult in the world in which to operate.
The School District has lost $1.4M over the last seven years, has not needed to pay interest on this loss, and a trumped up $36,000.00 reported year in the black is bring touted as a victory. The Acting CEO, is, by his own admission, in a conflict of interest, because as a trustee he should be providing oversight to this operation rather than being it's CEO.
On top of all of this, we have a majority of the board, a bunch of ideologues who profess their undying support to the notion of public education, operating a private, "elite" school in a country of immense poverty.
Rest assured that a Voice majority will take long look at this White Elephant to see what should be done with this boondoggle.
If nothing elso, the venture has been a huge distraction to the real issues in New Westminster.
Education ventures involving China and B.C. have been high profile recently, and the picture that has emerged is not a pretty one.
The Province should step in and examine this whole sordid mess that they have created.
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