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Process Errors and the True Costs of School Closures (Round Two)

Process Errors and the True Costs of School Closures (Round Two). Arthur Cockfield June 11, 2012. Overview. Review of building costs and operating gains/losses (from report)

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Process Errors and the True Costs of School Closures (Round Two)

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  1. Process Errors and the True Costs of School Closures(Round Two) Arthur Cockfield June 11, 2012

  2. Overview • Review of building costs and operating gains/losses (from report) • Serious concerns about process to calculate costs of closure: Public statements by Board Director make it appear matter is now closed • Ruling sought from PARC Chair (or trustees) on matters of process

  3. Main Conclusions of Our Report • Non-financial factors are very important and we support keeping all three schools open, however: • Limestone Board would save the most money by closing LCVI • Limestone Board would save less money by closing KCVI or QECVI

  4. Board Estimate of Building Costs • Only looks at backlog repairs: • LCVI + CP building: $18,094,003 • KCVI: $20,080,959 • QECVI: $17,329,178 Problem: Ignores ‘all in’ cost estimates by outside firm (Stantec) hired by Ministry and Board

  5. Actual Building Costs According to outside expert (Stantec) must look at (a) backlog of repairs, (b) needed upgrades over next ten years, (c) and accessibility costs Three high schools require major repairs, Calvin Park building in worst shape LCVI site ‘all in’ costs are $32,935,226 KCVI costs are $25,827,751 QECVI costs are $21,596,305

  6. 2010 Operating Gains/Losses • All figures taken directly from Board accountant’s financial statements: • LCVI has an operating loss of $919,884 • QECVI has an operating loss of $613,599 • KCVI has an operating gain of $392,074

  7. PROCESS ERROR:Three Public Statements by Board Director with Problems • All quotes taken from Mike Norris, “School Closing Decision Set for Early 2013”, Whig Standard, May 23, 2012, available on Internet

  8. Statement Number 1 • Board Director: “Should we need to bring each of the schools to building code standards, the cost will be $20 million for each of the three schools.”

  9. Problems with the First Statement • This ignores Calvin Park building and ‘all in costs’ • New Option 4 to close LCVI incorrectly states a long term capital savings of $12,650,330 • Board Director’s view that all the same mainly hurts QECVI as it loses big cost advantage over LCVI (when there is really an $11 million difference)

  10. Statement Number 2 • Board Director: “It’s not accurate to say Kingston Collegiate makes money. That’s not how schools function.”

  11. Problems With Second Statement • Board’s own accountants use terms ‘operating gains’ and ‘operating losses’ • Purpose of these financial statements is to hold Director and Board accountable to taxpayers and trustees • Numbers taken from School Information Profiles – defined by Board as “A set of criteria established by the Board based on Ministry guidelines to determine the value of a school for comparison purposes.” • If irrelevant why does law compel Board to disclose these financial statements?

  12. Also Ignores Financial Costs of Closing KCVI as a Full School • Hard to measure as has never happened before (as per Dr. Dixon in Appendix D of our report) • Massive transition costs from changing programs and thwarting interests of students and parents at a full school • Need realistic revenue projections if KCVI is closed (lose IB revenues, less than 500 students may go to QE or LC each, etc.) • Contrary to provincial government orders to only close ‘under-utilized’ schools (Ont. Budget 2012)

  13. Statement Number 3 • Board Director: “You have to understand that should one of the schools be closed, there’s potential savings of approximately $1 million, regardless of which school is closed.” • (Also from article: “Hunter took issue with Cockfield’s claim that Kingston Collegiate was able to make big gains because the principal and staff have found ways of cutting costs.”)

  14. Problems with Third Statement • Due to different expense flows not all schools are equal • Example: In 2010, Board indicates LCVI spent $1,629,934 for ‘utilities and custodians’; KCVI spent $1,372,051 for same expenses even though it has roughly 400 more students • Board’s own numbers show different operating savings for closing each school and indicate in new Option 4 that greatest ‘annual net operating savings’ of $1,218,000 generated by closing LCVI

  15. Main process error • Board Director is boss of PARC Chair, principals and teachers on PARC committees (half the votes) • Board Director should never make public statements (even if well-meaning) that appear to pre-judge critical issues • Process undermined: • (a) appearance of bias and improper influence; • (b) statements inaccurate and misleading; and • (c) Director is ultimate recipient of PARC recommendations.

  16. Conclusion • PARC Chair, members of PARC committees, trustees and Board staff appear to be following proper process • Is it ever acceptable for a Board Director to make public statements that appear to pre-judge important issues before PARC committees? • Is this a fatal process error? • Due to conflict of interest with PARC Chair, trustees should provide input • May we have a ruling?

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