ESF Levy from 2011

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  1. #1

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    ESF Levy from 2011

    In a newsletter today.



    On that basis ESF's Board of Governors has approved the introduction of a one-off Refundable Capital Levy to be paid by the parents of every student who enters an ESF school in Year One or Seven. The levy will be HK$25,000 per child and it will be fully refunded when the child finishes school. The levy will be introduced from August 2011.The parents of children currently in Years One to Five will pay the levy when they enter Year Seven. Children currently in Years Six to Thirteen will not have to pay the levy.
    I assume this means that if your child is currently in not in ESF, but wll be entering in Y1 from 2011, you will need to budget for an extra $25K.

    Also, I assume this means that when your child transitions from Y6 to Y7 (goes to secondary school), you will need to budget for an extra $25K.

    Full text

    Each year the English Schools Foundation spends a considerable sum on the repair and maintenance of its school buildings ? often as much as HK$75m in the summer holidays alone. The money is spent on a variety of projects: from simply maintaining the fabric of buildings by re-painting or re-plastering; through increasing or enhancing the provision of laboratories, classrooms, play areas and toilets; to less visible work on electrical or plumbing systems.

    But there are times when repair and maintenance is not enough and wholesale changes are needed to the fabric of a school. You may have heard that there are pressing needs to undertake fundamental building projects at Kowloon Junior School, King George V School and Island School. The relatively poor physical condition of some of the accommodation at these schools contrasts markedly with ESF?s newer buildings, including those of the Private Independent Schools.

    However all of our schools have a finite lifespan. Timely repair and maintenance will help to ensure that this is maximised, but of all our school buildings will eventually need to be renewed. Like other organisations which rely on an extensive range of buildings, ESF should be making provision for the renewal of its infrastructure as a routine part of its financial and facilities planning.

    In the past this provision has been done in a rather haphazard manner, and this has resulted in the present situation, where we have three major projects competing for priority at once. In the future, we need to plan more systematically over a long-term period for a rolling programme of substantial renovation or total replacement of all our school buildings. In each ten-year period a number of our schools will approach the end of their useful lives and will need to be re-built in whole or in part.

    Click here for a table showing the age of each of our schools.

    Click here to see a table showing how the building replacement programme might look over the next fifty years.

    It is for this reason that we need to build up surpluses each year to contribute to a fund to meet the capital requirements of our schools so that, over time, we have sufficient resources to replace them. But surpluses will only meet part of our costs ? we have to look at additional sources of funding. Capital grants from the Government will be critical, as will borrowings using our property portfolio as security. We are also launching an alumni programme and will seek to raise funds from private and corporate donors.

    We have recently approached the Government to ask for assistance with the capital costs of Kowloon Junior School. We are optimistic that they will be supportive. (Similar applications will be made for KGV and Island School in the future). We believe that if we are to secure a long-term commitment from the Government for the funding of ESF?s infrastructure we need to demonstrate clearly that our own stake-holders share a sense of responsibility for safe-guarding the future of our schools. We, therefore, have decided to introduce a system whereby parents across ESF make a specific contribution to the capital costs of school renewal.

    On that basis ESF's Board of Governors has approved the introduction of a one-off Refundable Capital Levy to be paid by the parents of every student who enters an ESF school in Year One or Seven. The levy will be HK$25,000 per child and it will be fully refunded when the child finishes school. The levy will be introduced from August 2011.The parents of children currently in Years One to Five will pay the levy when they enter Year Seven. Children currently in Years Six to Thirteen will not have to pay the levy.

    After seven years the parents of all children studying with us will have paid the levy, thereby providing to ESF extra funds to contribute to major works. The parents of children who join ESF at other points during the Primary or Secondary years will also pay the levy. The Board of Governors of ESF is taking a long-term view of ESF's contribution to the education system of Hong Kong, and is committed to enabling future generations to continue to enjoy the excellence of an ESF education at a cost that remains fully competitive. You and your children are beneficiaries of investments made in the past, partly financed by the contributions of your predecessors. The Board is confident that all current parents will accede to the Board's objective and will accept the need to contribute to its achievement.

    A presentation describing these proposals in more detail and a full series of questions and answers on the levy have now been posted on our website. In addition, the Chief Executive, Chief Financial Officer and Head of Facilities Development will be taking questions on the Refundable Capital Levy at public meetings to be held in the following schools during December:

    Kowloon Junior School (Perth Street) 1 December
    Beacon Hill School 7 December
    Quarry Bay School 14 December


    All presentations will begin at 6.30pm. Further briefings in January will be announced shortly.

    Yours sincerely,

    Heather Du Quesnay
    Chief Executive
    English Schools Foundation

  2. #2

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    and then we say that banks are thieves.....


  3. #3

    Shall we take bets on 'when' the other shoe will drop and the "refundable levy" will not be refunded?


  4. #4

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    Well, there is a complete lack of transparency in the way the ESF and the Board operates.

    I'm not surprised that there was no consultation.

    I'd like to find out what sort of mechanisms will be put in place to make sure that the amounts are not "lost..."

    Mat - Hear hear...


  5. #5

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    Turns out ... this whole thing was designed to pay for two new schools. I am curious if anyone knows why the ESF had to go on an empire building spree and build two new schools? Could they not have been built independently like several new schools we've seen over the last 5 years?

    How can the English Schools Foundation's two private independent schools sustain losses of HK$21.3 million without it having any impact on its 14 publicly-funded schools?

    That is the question angry parents are asking, worried they have been "indirectly but effectively subsidising" the colleges through fee increases over the past five years.

    The foundation has opened its books on Renaissance College and Discovery College to explain how the HK$110 million it invested in building the former and HK$168 million paid towards construction of the latter is being repaid over a 20-year period.

    ESF chief executive Heather Du Quesnay insists the schools will be able to repay the HK$278 million within the repayment period and that they were never expected to generate a profit in their first years of operation.

    The HK$278 million, which was paid out from the ESF cash balance over several years before the launch of Renaissance College in 2006, is an investment repaid annually with a return based on the Hong Kong inter bank offer rate plus 1 per cent.

    Vivian Cheung, the ESF's chief financial officer, said Renaissance College had repaid the full returns for its first four years of operation totalling HK$12.5 million as well as HK$20 million of the capital sum, leaving HK$90 million still to pay.

    But Discovery College, which opened in 2007, had paid just HK$8.5 million of its three years of returns totalling HK$11.7 million, and none of its HK$168 million capital. Indeed, further investment increased the principal to HK$170 million.
    Wonder what the Board of Governers had to say about this or if they remained spineless and approved everything that was submitted to them by the ESF executives....

  6. #6

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    One more quote from SCMP...

    But the Concerned ESF Parents Group said there were no fixed terms to require the schools to pay back the money within the 20 years.


    The group's spokeswoman, Ada Cheng, pointed to a line in the 2008-09 auditor's report on the ESF, which states the "amount due from/to ESF Education Services Ltd is unsecured, interest free and has no fixed terms of repayment".


    She said: "Parents want the ESF management to give a clear account of how they are going to ensure that Discovery College repays its outstanding debts and both schools meet the timeframe of 20 years."

  7. #7

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    And finally .. it could all have been avoided.

    The head of the English Schools Foundation says the HK$25,000 levy being introduced next year could have been avoided if money had not been spent on building two private independent schools.

    But the foundation denied that hefty fee increases over the past five years are due to late repayments on the HK$278 million investment in the loss-making Renaissance College and Discovery College.



    Chief executive Heather Du Quesnay said yesterday: "I guess you could argue that we wouldn't need the refundable capital levy if the HK$278 million had not been spent on the private independent schools.


    "The amount of money that the refundable capital levy will raise - HK$300 million - is very similar to the amount that we spent on the private independent schools. But I think we still would argue that by establishing the levy, we hope to leverage extra government funding.


    "We are waiting for approval from Legco for the finance for the rebuilding of Kowloon Junior School and we hope that if we get that funding, it will lead to the government being able to fund us for some of the bigger schools such as KGV.


    "Fees in the ESF have not been affected at all by the establishment of the private independent schools. The funding of the PIS came from the cash balance, which had already been built up over the period when fees in the ESF were not increased."