School District 91, through their new business company is requesting help from four district municipalities in order to get the company off the ground.
They are planning on requesting loans from all district municipalities within the school district, using funds from the Northern Development Initiative Trust (NDIT) to start their proposed international school program in China as well as other initiatives including bringing international students to district schools.
According to Ray LeMoigne, superintendent of schools for School District 91, it was NDIT who suggested that the funds it sets aside for municipalities to access in the form of a loan could be accessed if municipalities gave the go ahead.
The Village of Burns Lake is able to borrow up to $463,000 from NDIT for municipal projects and the school district is hoping to borrow up to $300,000 of this amount.
During a recent Fort St. James council meeting, mayor Sandra Harwood and councillors voted against supporting the $300,000 loan for the company.
Village of Burns Lake mayor and council also recently discussed School District 91’s plans, choosing to hold off on making any decisions until a formal request is made to them.
Allowing the school district to access the funding would mean the village would not have access to the funds until they are repaid by the school district company, which they expect would take up to five years.
LeMoigne said the company are hoping to start with $1 million. “It depends on how big we get and how quickly,” he said.
The company is looking at sourcing start up funds from a number of avenues if municipalities say no to the proposal including private businesses and industry.
“The School District business company has to remain at arms length from the school district. We are not permitted to use any of the funds set aside for the education of our students. We don’t touch any of those dollars so the only way to establish start up dollars is to pursue contributions.”
During the Fort St. James council meeting, Coun. Brenda Gouglas said she studied a number of companies previously started by other B.C. school districts. All showed a much lower rate of success than council would be comfortable with.
Councillor Gouglas reported that out of 12 other school districts that started companies, eight of those companies were now inactive. One of the few still active companies owes their school district almost $1 million and another was dissolved in 2009 with over $66,000 owing to the school district.
“While we applaud the effort, we are not prepared to risk that kind of borrowing power for the community,” said mayor Harwood.
LeMoigne said to Lakes District News that it was not in school district’s plans to create a company, but rather they were approached with the idea and the opportunity and it moved forward from there.
“We didn’t go and set up a company and then go looking for opportunities, they came to us. I also know of other school district companies that have had varying degrees of success.
LeMoigne said the company is restricted in what it can and can’t do and also wants to keep any loans to a minimum.
He said that while they are asking for upwards of $1 million in loans from municipalities through NDI, that 100 per cent of the funds would come back in the form of tuition agreements at offshore schools and international student tuition.
He said these agreements have already been secured. “We want to be able to take advantage of these opportunities.”
Village of Burns Lake’s chief administrative officer, Sheryl Worthing also spoke to council about the proposal earlier this month.
“They are asking each community to access their NDIT loan amount.”
Worthing went on to say that allowing School District 91 to access the funding would take away the village’s ability to borrow money for any future projects that may come up.
She said, “I would prefer that we don’t do this, we may want to use the funding for a village project. This is just my recommendation without hearing the presentation,” she added.
Councillor Quentin Beach asked if the NDIT funds that are available to the village could be used for the district energy project.
“Absolutely,” said Worthing, who went on to explain that there is some funding criteria that needs to be met with the NDIT funds.
We can’t use NDIT funds to borrow money for a fire truck for example, but it is possible to use both NDIT funds as well as borrow from MFA [Municipal Financing Authority] for a single project,” she added.
Worthing said last week that so far no official request has been made to the village for the NDIT loan.
She went on to say that council and the school district company did have an in camera meeting and information was presented to them during the meeting, but that no official request was made and no decision has been made by council regarding the project.
“If there is an official request made, this discussion will be brought up at a regular council meeting,” she added.
With files from Ruth Lloyd.