RECOMMENDATIONS OF THE FINANCE COMMITTEE to the: Takoma Adventist Education Planning Committee September 9, 2015
1. RECOMMENDATION FOR FUNDING NEW BUILDING COMPLEX RENOVATIONS AND IMPLEMENTATION COSTS Because the renovations and implementation costs would need to begin as early as December 2015, it is recommended to borrow funds from the current scholarship endowment fund to be recorded on the Statement of Financial Position as a loan to be paid back with interest with the assets from JNA used as collateral. The 2016-17 Budget would have a provision for paying the interest for the first year. Request that the Potomac Conference assist with at least 30% of the implementation costs.
2. RECOMMENDATION REGARDING ASSETS AND LIABILITIES Recommend:
that all assets and liabilities from Sligo Adventist School and J. N. Andrews School be combined into one Statement of Financial Position for the new school and that the percentage of net assets from each entity be calculated to determine how assets would be allocated should there be a dissolution.
that net assets from JNA be distributed to the new school in the following manner: Pay off the loan for renovations and implementation costs and from the remainder: 10% allocated for Operating Reserve 10% allocated for Capital Needs 80% allocated for the Scholarship Endowment Fund
3. RECOMMENDATION REGARDING SEVERANCE COSTS Recommend that any severance costs not covered by the Potomac Conference Policy be paid from the operating funds at the end of the 2015-16 school year at each school before transferring remaining fund balances to the new school.
4. RECOMMENDATION REGARDING CHURCH CONSTITUENCY Recommended that: Sligo SDA Church and Takoma Park SDA Church become the Constituent Churches for the new school. as a Constituent Church, their subsidies for the first year would be based on the 2015-16 subsidies, minus the Church Tuition Aid for each student from these churches. Each year after that, the subsidy would increase by the CPI rate. other churches would be considered Cooperating Churches with representation on the Board and/or Board Committees and would give Church Tuition Aid for each student from their church that is enrolled at the new school. Church Tuition Aid per student would be set at a rate determined by the school with signed written agreements each school year. in addition, churches could contribute to individual students through a Worthy Student Fund.
5. RECOMMENDATION REGARDING INCOME Recommendations for Income:
Tuition - based on full cost per student; Student Fees
Conference subsidy
Church Constituent subsidy & Cooperating Church Tuition Aid
Endowment Fund income for scholarships
Worthy Student Fund
CDC Lease
Rental Income
Fund Raisers, Grants from Foundations, Alumni & Friends
Donor Support
Other (ASC, Bus, Café, etc.)
6. RECOMMENDATION REGARDING EXPENSES Recommend that the following items be considered as essential in the new budget:
Funding for Faculty Development including coaches & mentors
Sufficient funds for technology including software, hardware and infrastructure (networking & wiring) to accommodate students and administrative needs.
Funds for Marketing and Recruitment
Funds for Capital Improvement
Funded Depreciation
Funded Operating Reserves(10% of budget)
Funding for Scholarships (from Budget, Endowment & other sources)
Funds for Transportation (bus service for students) that would include Takoma Academy
7. Funding for scholarships Recommend that scholarships be funded from:
Individual Donors
Fund Raisers
Percentage of Budget (perhaps 5%) $150,000
Endowment Fund based on Endowment Fund Policy i.e.
If 80% of Net Assets from JNA were added to the current endowment funds and suppose there was $5 million in the account with an assumption of 5% rate, there would be $250,000 annually for scholarships; or the same amount would be available annually from a lease.
Scholarships for 2016-17 be funded from:
Budget
$150,000
Endowment Fund $125,000
Implementation Costs
$75,000
8. Recommendation regarding enrollment: Recommend that we plan to accommodate 300 students, but budget with three scenarios:
80% of 300 = 240
85% of 300 = 255
90% of 300 = 270
9. Recommend the following for staffing: (19 FTE) Teachers:
(Consistent with PC Policies of a ratio of 14:1)
Classroom Teachers
Specialty Teachers:
FTE 14
Choir/Band
1
Physical Education
1
Resource
1
Art
1
Languages
1
10. Administrators and staff (7 FTE) FTE
Administrators: Principal Asst. Principal
1 2
Administrative, Recruitment, Teacher Mentor, Marketing
Staff: Business Manager IT Manager Admin. Asst. Plant Manager
1 1 2 1
Positions beyond those provided by Potomac Conference would be Local Positions. In Phase II, some of these positions would be shared with Takoma Academy.
11. Recommendation for Tuition, Subsidies and Scholarships Recommend the following:
Charge full tuition based on full budgeted cost per student.
Subtract the Conference Subsidy on a per student basis from the full tuition charged.
Churches would subsidize each student from their church based on a predetermined amount. If the church did not pay, the parent would be responsible.
Apply a 5% family discount for two children and 10% for three children
Give need-based scholarships based on graduated family income.
Determine whether to use “Facts” or other third party financial management package, but be consistent with Takoma Academy.
Example of tuition and subsidy Full tuition $8,500 Minus Conference Subsidy -$1,400 Minus Church Tuition Aid (from Cooperating Churches) -$1,200 Total Full-pay Tuition $5,900 or $590 per month *Need-based scholarship (Avg.) -$2,500 (25% of students) Balance $3,400 or $340 per month Minus any other guaranteed scholarships * Need-based scholarships are conditional upon completion of agreed-upon requirements such as grades and work.
Worthy Student Funds from churches could be used to help pay the balance for identified needy students.
12. RECOMMENDATION FOR NEW ACCOUNTING SOFTWARE PACKAGE Recommend that a new accounting software that can accommodate fund accounting be in place for the 2016-17 school year and that Takoma Academy and TAEPC work together to determine what the new package will be.