Worse than a Bake Sale…..
The following is a presentation made to the School Board on October 9, 2007
On October 3, 2007, I attended the School District Business Company AGM. The audited financial report for the past fiscal year indicates that there was absolutely no revenue generated. In fact, the SDBC had a deficit of $13,771 for 2006/07 and is now showing a cumulative deficit over the past two years of $22,545.
On April 27, 2004 a report was presented to the Board which included the following information.
Initial development, marketing and legal costs incurred by the school district that related to the World Kids project amounted to $307,000.
The revenue projections were:
$ 53,000 for 2003 - 2004
$160,000 for 2004 - 2005
$288,400 for 2005 - 2006
Trustees indicated that the first $300,000 of generated revenue be retained by the school district.
Any subsequent revenues were to be shared 50/50 with the School District Foundation.
To date, the net revenue for the School District Business Company (SDBC) is as follows:
$ 0 fiscal year ending June 2004
$ 214 fiscal year ending June 2005
-$ 8,988 fiscal year ending June 2006
-$ 13,771 fiscal year ending June 2007
By any measure, this venture has been a failure. The only thing that appears to be rising is the deficit.
This year’s annual report notes a strong shift in the market and that without significant additional investment to support the implementation of World Kids in classrooms and/or modify the product, it is quote…. ”unlikely to achieve any significant market penetration”
The report further states:
“In order for the SDBC to seek opportunities and to develop business partnerships for materials developed by Langley it necessitates the investment of time, expertise and capital. The intent was for the SDBC to generate any funding required from the sale of WK materials in Korea. Any planned activity by the SDBC in any other area has been deferred until such time as the work can be funded through revenues generated.”
Trustees should know that an MOU (memorandum of understanding) with a secondary investor has not resulted in any significant revenues since being signed over two years ago in August 2005.
The SDBC currently owes the school district $68,000 in addition to the initial $300,000 start-up cost incurred by the district. A loan and security agreement between the school district and the SDBC stipulates that any outstanding amount from the $100,000 line of credit that the school district has extended must be fully repaid by June 30, 2008.
How does the SDBC realistically expect to repay this debt on time if ever?
The SDBC clearly does not have the time, expertise or capital to be a successful venture in this fiercely competitive market. When will this district get with the times and realize that the SDBC is not working because in today’s world of business you need to put in a 24/7 effort in to succeed. You do not have this and you do not have the finances. Business analysts have already stated that Canada is losing out in this area and we are in the same sinking boat.
At last year’s AGM, the president of the SDBC clearly stated that if things had not turned around by the end of this fiscal year, he would be the first to recommend dissolution of the company. As the sole shareholder of the SDBC, when will this Board put forth a motion to dissolve the SDBC? Surely, the Board must realize that this will never be a successful endeavour.
I ask the Board…
How long are you going to let this situation continue? In my opinion, ISP funds should be used for direct student services.
When will this situation become intolerable for the trustees that you will no longer be able to sit there without making a motion to remove this financial burden from the students who are paying for it?
When did the Board meet and discuss this issue as a whole or has it been the decision of one (the Chair)? The Board, which represents its constituents, has seven members with an equal voice, correct?
This year the District has shown a $33,000 surplus when it was over $240,000 last year. This surplus is on the decrease yet the Education Ministry assures us we receive enough money to educate our children. Therefore, it must be the management of our money that is the problem. I plead with you to dissolve this company and place these resources back to the students where they belong.
You are closing schools, disrupting communities and creating stressess that are not necessary if simple actions are taken. I hope we can count on you to do the right thing. Do something that will start to help the situation instead of exacerbate it.
I look forward to a written response to all my questions.
Thank you for your time
Susan Semonick
Supplementary Comments re my presentation
This is something that does not affect students but does create money for direct student services. If the Board would take my suggestions and implement them they would not be talking about reconfiguration and closure for at least two more years, which would allow for a better transition plan. It has been stated that closing schools only recovers $250,000 to 300,000 back into the budget annually. They are suggesting creating a middle school that will cost more (no definite or even estimated costs presented anywhere) and are not sure if it will work. They are only hoping it will. How does that better our situation?
The public should realize that, in the midst of all of this, the trustees will be receiving another raise in December. Does anyone care? Take care of your pennies and keep your schools open. They should be doing everything else necessary before closing schools and contemplating reconfiguration.
Respectfully submitted by
Susan Semonick ...
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