Analysis of Capital Funding for School Facilities

Transcription

1 ECS RJR nalysis of Capital Funding for School Facilities Ontario Ministry of Education and Training Final Report - September 1996 Educational Consulting Services (Canada) Inc. RJR Educational Services Inc.

2 Table of Contents Glossary of Terms... ii Chapter 1: Introduction Chapter 2: Demand for New Pupil Places Chapter 3: Facilities Renewal and Replacement Chapter 4: Capital Grant pproval Process Chapter 5: Utilizing Schools Effectively Chapter 6: Reducing Building and Site Costs Chapter 7: Private Source Financing Chapter 8: Design, Build, Finance and Operate Chapter 9: lternative Sources of Revenue for School Development Chapter 10: Summary of Conclusions and Recommendations ppendices ppendix : Demographic Profiles ppendix B: Demographic and Enrollment Projections...B-1 ppendix C: Current Needs... C-1 ppendix D: Projected Needs to D-1 ppendix E: Projected Needs to E-1 ppendix F: Projected Needs to F-1 Table of Contents nalysis of Capital Funding for School Facilities Page i

3 Glossary of Terms Technical terms and abbreviations used in this report are defined briefly below for the assistance of the reader. BOOT: Build, Own, Operate and Transfer The practice where a private sector developer or consortium will build a school facility and provide the non-educational operating services for a number of years and then transfer the facility to a school board or ministry. BOT: Build, Own and Transfer Similar to BOOT described above, but without the operating component. CC: Capital Cost llowance The capital amount which can be depreciated by a private sector owner of a school facility. EDC: Education Development Charge Charges imposed on new residential and commercial/industrial/institutional development as an additional source of funding for education capital costs. EDCs are designed to cover the local school board s share of the cost of providing new pupil places to be occupied by students originating from the new development areas. FRC: Functional Rated Capacity The capacity of a school taking into consideration constraints created by collective bargaining agreements, special education and alternative programs. Similar to Program Rated Capacity (PRC). GFF: Gross Functional Floor rea Total floor area of a school building. Glossary of Terms nalysis of Capital Funding for School Facilities Page ii

4 GT: Greater Toronto rea Metropolitan Toronto and the surrounding Regions of Durham, York, Peel and Halton. IRR: Internal Rate of Return Rate of return to an investor after taking into account all of his, her or its tax considerations including potential deductions for depreciation. JK: Junior Kindergarten The academic program for children reaching their fourth birthday during that calendar year. Not offered in all jurisdictions or in all schools within a jurisdiction. MET: Ministry of Education and Training The ministry responsible for education in the Province of Ontario. MRC: Ministry Rated Capacity figure used by the Ontario Ministry of Education and Training to quantify the capacity of a school. It is calculated by multiplying each type of room within a school by a pupil loading. It does not take into consideration constraints imposed by collective bargaining agreements, special education or alternative programs. NFF: Net Functional Floor rea rea of a school which is used as teaching spaces, offices, library/resource centres, cafeterias, gymnasia and similar purposes. Does not include area required for circulation (corridors, lobbies, atria, etc.), washrooms and mechanical rooms. OC: Ontario cademic Credit The final year of secondary school in Ontario for students intending to qualify for university admission. Scheduled to be terminated after the academic year. PRC: Program Rated Capacity Glossary of Terms nalysis of Capital Funding for School Facilities Page iii

5 The capacity of a school taking into consideration constraints created by collective bargaining agreements, special education and alternative programs. Similar to Functional Rated Capacity (FRC). Glossary of Terms nalysis of Capital Funding for School Facilities Page iv

6 Chapter 1: Introduction Purpose of Study Many governments, including the Government of Ontario, have adopted a policy of fiscal restraint. Nevertheless, in some sectors the need and demand for capital investment remains high. This is particularly true in the education sector. There are many school boards in Ontario which are faced with increasing demands for instructional spaces because of rapidly expanding enrollments. In this environment of rising needs and shrinking resources, the Ontario Ministry of Education and Training (MET) commissioned this study to examine alternative long term funding strategies and allocation and approval mechanisms for capital projects. Terms of Reference The Request for Proposals issued on 19 March 1996 by the Ministry of Education and Training states: There is a need to assess alternative financing approaches which might be employed to ensure that the school facilities required in the province are built. It is recognized that new approaches may change the traditional notions of school location, design and ownership. Strategies such as joint ventures, shared facilities and lease-backs from private developers, which have been implemented in other jurisdictions, may help address the capital funding problem in Ontario. In order to respond fully to these issues, the Study Team has framed the following questions. 1. What is the demand for capital for new pupil places in Ontario now and how much demand will there be over the next 25 years? 2. What is the demand for capital for facility renewal and/or facility replacement? 3. How can the demand for new pupil places be reduced? 4. How can the capital costs of constructing these pupil places be reduced? Introduction nalysis of Capital Funding for School Facilities Page 1-1

7 5. What alternatives are available for the financing of the capital funds required? 6. What changes, if any, are required to the current Capital Grant Plan to facilitate the above? Organizations Consulted The Study Team met with representative public and separate school boards throughout Ontario where the demand for new pupil places is the greatest. In addition, the Study Team met with representatives of the Ontario Ministry of Education and Training and with ministries in other jurisdictions. Valuable input was also received through consultation with and written submissions from school board and industry associations including the Ontario Public School Boards ssociation, the Ontario Separate School Trustees ssociation, various subcommittees of the Ontario ssociation of School Business Officials and the Ontario ssociation of rchitects. Sources of Data The demographic data used in this report was provided by the Ontario Ministry of Finance and reflects the Ministry s population projections for a 25 year period from 1996 to The enrollment data, Ministry Rated Capacities (MRC) of school facilities, and facilities renewal data were provided by the Ontario Ministry of Education and Training. The Ministry Rated Capacities are the most accurate which could be provided at this point in time. Some of the data reported by the schools boards may require revision. Organization of this Report The remainder of this report is organized as follows: θ θ Chapter Two provides an analysis of the need for new pupil places for a 25 year planning period (1996 to 2021) and the cost of providing such pupil places. The supporting data are provided in ppendices to F. Chapter Three addresses the issues of facilities renewal and facilities replacement. Introduction nalysis of Capital Funding for School Facilities Page 1-2

8 θ θ θ θ θ θ θ θ θ θ θ θ θ Chapter Four provides an analysis of the current capital grant approval process and identifies alternative approval models. Chapter Five identifies strategies to utilize schools more effectively thereby reducing the need for new pupil places. Chapter Six identifies strategies for reducing building and site costs. Chapter Seven was written primarily by the Centre for Government Group of the accounting firm KPMG. It provides an analysis of private source financing for schools. Chapter Eight analyzes the design, build, finance and operate concept with respect to the provision of schools. Chapter Nine identifies alternative sources of revenue for school development. Chapter Ten provides the conclusions of the study and a summary of the recommendations. ppendix shows the demographic profiles of the 49 counties, districts and regional municipalities in Ontario for elementary school age children and secondary school age children over the 25 year planning period. ppendix B converts the demographic profiles from ppendix to enrollment projections for each school board. ppendix C shows the calculation of the current need for new pupil places for each school board. ppendix D shows the calculation of the estimated need for new pupil places from 1997 to ppendix E shows the calculation of the estimated need for new pupil places from 2002 to ppendix F shows the calculation of the estimated need for new pupil places from 2012 to Introduction nalysis of Capital Funding for School Facilities Page 1-3

9 Chapter 2: Demand for New Pupil Places New Pupil Places Increases in the population and the corresponding growth in school enrollments create a need for new pupil places. In this study, the demand for new pupil places has been projected on the basis of the relationship between the projected enrollments and the current number of pupil places in the existing schools. The analysis has been done for a 25 year planning period ( ) to avoid the pitfall of responding to a short term need for pupil places that might not be sustained over a longer time frame. These enrollment projections and analyses of the demand for new pupil places are outlined in the five appendices which are attached to this report. summary of the main features of each of the appendices is provided below. ppendix : Demographic Profiles The Ontario Ministry of Finance has prepared population projections by age for each of Ontario s counties, districts and regional municipalities for the next 25 years. The data for elementary and secondary school age children have been provided in graph format in ppendix of this report. Graph Types To aid in the analysis work and to identify those enrollment projections which indicate a sustained need for new pupil places, the following graph types have been characterized. Type - Growth The Type graph shows steady growth over the 25 year planning period with cumulative growth exceeding 10%. Demand - Growth nalysis of Capital Funding for School Facilities Page 2-1

10 Type B - Bell Curve The Type B graph shows growth for approximately half of the planning period, followed by a decline in the school age population. It is important to ensure that pupil places are not provided for that portion of the growth that will be a relatively short term need. Type C - Steady State The Type C graph categorizes any jurisdiction where the overall growth or decline in the school age population will be less than 10%. Demand - Growth nalysis of Capital Funding for School Facilities Page 2-2

11 Type D - Reverse Bell Curve The Type D graph is the opposite of Type B in that there is a decline for the first part of the planning period followed by growth in the school age population in the latter half. Type E - Declining The Type E graph categorizes a jurisdiction where the school age population will decline. In these situations, care must be taken to ensure that new pupil places are not provided in response to a current demand which will soon disappear. Demand - Growth nalysis of Capital Funding for School Facilities Page 2-3

12 Summary of Demographic Findings Graphs have been provided for each of Ontario s counties, districts and regional municipalities in ppendix. The distribution of each type of graph is shown below. Graph Type Growth B Bell Curve C Steady State D Reverse Bell Curve E Declining Elementary (ges 5 to 13) (ges 14 to 17) The following tables provide a summary of how the 5 demographic profile types are distributed among the regions of Ontario. Separate summaries are provided for elementary and secondary age groups. Elementary (ges 5 to 13) Number of Districts by Region Central Grand Total Profile & GT East North-east North-west South-west (growth) B (bell curve) C (steady state) D (reverse bell curve) E (declining) Grand Total (ges 14 to 17) Profile Number of Districts by Region Central Grand Total & GT East North-east North-west South-west (growth) B (bell curve) C (steady state) D (reverse bell curve) E (declining) Grand Total Demand - Growth nalysis of Capital Funding for School Facilities Page 2-4

13 The school boards that are in a Type jurisdiction are the only boards which will have a sustained demand for new student places over the next 25 years. School boards in Type, B, C or D jurisdictions could have current demand for new student places that should be addressed. ll Type jurisdictions are in southern Ontario with the exception of Parry Sound. The map on page 2-6 shows where within southern Ontario the Type growth in the school age population is projected to occur. lthough growth is predominantly in the GT and vicinity, there is also growth in other regions of the province as shown in the map. ppendix B: Enrollment Projections The demographic profiles for each county, district and regional municipality have been converted into enrollment projections. Enrollment projections by school board and by panel (elementary and secondary) have been provided in ppendix B for each year from 1996 to ppendix C: Current Needs ppendix C contains a calculation of the current demand for new pupil places for each school board for both elementary schools and secondary schools. The calculations have been made by comparing the current projected enrollments (from ppendix B) with the Ministry Rated Capacity (MRC) of the existing schools as provided by the Ministry of Education and Training. The Ministry Rated Capacity is a figure which is used by the Ministry and by the school boards to quantify the number of student places in a school. It is calculated by multiplying each type of room within the school by a pupil loading. The MRC calculation is relatively simple and permits a consistent analysis of all school facilities within the province. It is recognized that the distribution of existing school facilities does not always match enrollment distribution, thus making it exceedingly difficult to achieve 100% utilization of school facilities. However, the match is sufficiently close to use the relationship between MRC and enrollment to provide an understanding of the magnitude of the need for new pupil places. Demand - Growth nalysis of Capital Funding for School Facilities Page 2-5

14 Map Showing Type (Growth) Counties, Districts and Regional Municipalities # Type (Growth) Counties, Districts and Regional Municipalities CENTRL EST GT SOUTHWEST 1. Brant 14. Frontenac 24. Durham 29. Bruce 2. Dufferin 15. Hastings 25. Halton 30. Elgin 3. Haldimand-Norfolk 16. Lanark 26. Metro Toronto 31. Essex 4. Haliburton 17. Leeds & Grenville 27. Peel 32. Grey 5. Hamilton-Wentworth 18. Lennox & ddington 28. York 33. Huron 6. Muskoka 19. Ottawa-Carleton 34. Kent 7. Niagara 20. Prescott & Russell 35. Lambton 8. Northumberland 21. Prince Edward 36. Middlesex 9. Peterborough 22. Renfrew 37. Oxford 10. Simcoe 23. Stormont, Dundas 38. Perth 11. Victoria & Glengarry 12. Waterloo 13. Wellington Demand - Growth nalysis of Capital Funding for School Facilities Page 2-6

15 Most of the school board officials interviewed are of the opinion that an individual school can be loaded to approximately 90% of the MRC. It is difficult to exceed 90% because of constraints created by space requirements for special and alternative education programs, collective bargaining agreements which have an impact on class size, utilization of specialized facilities and other factors. Most of the officials interviewed are also of the opinion that while an individual school can be loaded at approximately 90% of MRC, it is not possible for all schools within a jurisdiction to be loaded to that extent because of the variation between the distribution of the population and the location of the schools. figure of 90% of 90%, or roughly 80% of the MRC, was seen as a realistic target for the loading of schools. Three Scenarios In calculating the need for pupil places, three scenarios have been used: 1. enrollments equal to 80% of MRC; 2. enrollments equal to 90% of MRC; and 3. enrollments equal to 100% of MRC. School boards have some flexibility in increasing the overall utilization of a school. Students can be bussed from the area in which they live to a school which is underutilized. Portables can be provided at schools where the enrollments are greater than the capacity of the school. In order to increase the overall utilization of all schools within a jurisdiction, schools may be amalgamated. Other methods of increasing utilization are discussed in more detail in Chapter 5 of this report. In determining which scenario is the most appropriate, the increased capital costs of targeting a lower ratio of enrollment to MRC must be weighed against the increasing level of difficulty which the school boards will face in raising their utilization rates. high ratio of enrollment to MRC will likely lead to a narrowing of the curriculum options available to secondary school students and a greater reliance on portable accommodation. Demand - Growth nalysis of Capital Funding for School Facilities Page 2-7

16 ppendices D, E and F ppendices D, E and F present the projected needs for new pupil places for 2001, 2011 and 2021, respectively. s with ppendix C, three scenarios have been provided in each ppendix. summary of the projected need for new pupil places is provided in the tables on pages 2-10 and The first set of three tables on page 2-10 shows the cumulative need for elementary schools, secondary schools and the combined totals; the second set of three tables on page 2-11 reflects the incremental needs. It has been announced that the OC year will be eliminated in school enrollments will therefore be reduced by approximately 12% in September This reduction is reflected in ppendices E and F (2011 and 2021 respectively) but not in ppendix D which projects needs to Caveats There are a number of factors which should be taken into consideration when analyzing the figures contained in the tables and in ppendices C, D, E and F. 1. The population projections provided by the Ministry of Finance are based on the 1991 census data, since the 1996 census data will not be available for several months. s the more recent data becomes available, the projections for both population and enrollments should be updated. 2. There are likely opportunities to redistribute and/or share pupil places between elementary and secondary school facilities within a school board. The Study Team estimates that at the 90% of MRC target, the current demand could be reduced by approximately 2,000 pupil places across Ontario if surplus secondary school seats were redistributed as elementary school seats. The surplus of secondary school seats will increase significantly in 2002 when the Ontario cademic Credits are discontinued. 3. Similarly, there may be opportunities to redistribute and/or to share pupil places between coterminous boards. The Study Team estimates that at the 90% of MRC target, there are 8,500 pupil places available for redistribution or sharing; however the distribution of these pupil places and the number in any single location make it difficult to use these pupil places effectively. Demand - Growth nalysis of Capital Funding for School Facilities Page 2-8

17 4. The MRC figures shown are the best available data at the time of preparation of this report. These figures should be validated to ensure that they have been calculated consistently for all school boards. 5. The Ministry of Education and Training has announced that Junior Kindergarten (JK) is optional for all Boards. No adjustment is made for Boards that currently offer JK. Effectively, the projections in ppendices D, E and F assume that Boards currently offering JK will continue to do so at current participation rates. Summary Tables Beginning on the following page, a number of tables are provided which summarize the data contained in ppendices C, D, E and F. The tables summarize current information and show projected values for 2001, 2011 and The tables include summaries of the following information: 1. Cumulative Need for Pupil Places; 2. Incremental Need for Pupil Places; 3. Cumulative Need for dditional Schools; 4. Incremental Need for dditional Schools; 5. Cumulative Costs for the Construction and Design of New Schools; 6. Incremental Costs for the Construction and Design of New Schools; 7. Cumulative Costs for New Sites; 8. Incremental Costs for New Sites; 9. Cumulative Total Costs; and 10. Incremental Total Costs. For each of the categories listed above, there are three tables which summarize Ontario totals for: θ θ θ Elementary Schools Schools School Totals (Elementary and ) It should be noted that there is a noticeable downward jump in the secondary school pupil place requirements between 2001 and This is due to the elimination of the OC year in 2002 which reduces secondary school enrollments (and demand for secondary school pupil places) by an estimated 12%. Demand - Growth nalysis of Capital Funding for School Facilities Page 2-9

18 If schools were to be built to fully accommodate the secondary school needs projected for 2001, there would be a 12% surplus of secondary school pupil places in the following year due to the elimination of the OC year. The Ministry of Education and Training should be careful to take this into account when planning for meeting future demand. Cumulative Need for Pupil Places Elementary Summary Year Pupil Places Required for 80% Enrollment/MRC Ratio Pupil Places Required for 90% Enrollment/MRC Elementary Ratio Pupil Places Required for 100% Enrollment/MRC Ratio ,807 64,000 21, , ,650 45, , ,572 70, , , ,607 Summary Year Pupil Places Required for 80% Enrollment/MRC Ratio Pupil Places Required for 90% Enrollment/MRC Ratio Pupil Places Required for 100% Enrollment/MRC Ratio ,978 23,943 8, ,238 71,374 30, ,931 47,555 20, ,372 60,660 30,398 Totals (Elementary and ) Year Pupil Places Required for 80% Enrollment/MRC Ratio Pupil Places Required for 90% Enrollment/MRC Ratio Pupil Places Required for 100% Enrollment/MRC Ratio ,785 87,943 29, , ,024 75, , ,127 91, , , ,005 Demand - Growth nalysis of Capital Funding for School Facilities Page 2-10

19 Incremental Need for Pupil Places Elementary Summary Year Pupil Places Required for 80% Enrollment/MRC Ratio Pupil Places Required for 90% Enrollment/MRC Ratio Pupil Places Required for 100% Enrollment/MRC Ratio ,807 64,000 21, ,911 44,650 23, ,136 31,922 25, ,590 48,938 35,779 Total 315, , ,607 Summary Year Pupil Places Required for 80% Enrollment/MRC Ratio Pupil Places Required for 90% Enrollment/MRC Ratio ,978 23,943 8,047 Pupil Places Required for 100% Enrollment/MRC Ratio ,260 47,431 22, (47,307) (23,819) (10,187) ,441 13,105 9,974 Total 114,372 60,660 30,398 Totals (Elementary and ) Year Pupil Places Required for 80% Enrollment/MRC Ratio Pupil Places Required for 90% Enrollment/MRC Ratio Pupil Places Required for 100% Enrollment/MRC Ratio ,785 87,943 29, ,171 92,081 45, (4,171) 8,103 15, ,031 62,043 45,753 Total 429, , ,005 Demand - Growth nalysis of Capital Funding for School Facilities Page 2-11

20 lternative Summary of Need It is sometimes easier to comprehend the order of magnitude of the demand for new pupil places by converting the number of student places into the number of additional schools which are required. typical new elementary school in Ontario can accommodate approximately 500 students while a typical new secondary school can accommodate roughly 1,000 students. The school requirements in the tables that follow have been calculated using the pupil place summaries on the previous pages. The number of pupil places has been divided by 500 for elementary schools and by 1000 for secondary schools. For example, to achieve an elementary school enrollment / MRC ratio of 90% in 1996, an additional 64,042 pupil places are needed across Ontario. The number of schools required to house this number of students is: 64,042 pupils 500 pupils/school = 128 schools summary of the need for new schools, both cumulative and incremental, is shown for elementary schools and secondary schools on the following pages. Demand - Growth nalysis of Capital Funding for School Facilities Page 2-12

21 Cumulative Need for dditional Schools Elementary Summary Year Schools Required for 80% Enrollment/MRC Ratio Schools Required for 90% Enrollment/MRC Ratio Schools Required for 100% Enrollment/MRC Ratio Summary Year Schools Required for 80% Enrollment/MRC Ratio Schools Required for 90% Enrollment/MRC Ratio Schools Required for 100% Enrollment/MRC Ratio Totals (Elementary and ) Year Schools Required for 80% Enrollment/MRC Ratio Schools Required for 90% Enrollment/MRC Ratio Schools Required for 100% Enrollment/MRC Ratio Demand - Growth nalysis of Capital Funding for School Facilities Page 2-13

22 Incremental Need for dditional Schools Elementary Summary Year Schools Required for 80% Enrollment/MRC Ratio Schools Required for 90% Enrollment/MRC Ratio Schools Required for 100% Enrollment/MRC Ratio Total Summary Year Schools Required for 80% Enrollment/MRC Ratio Schools Required for 90% Enrollment/MRC Ratio Schools Required for 100% Enrollment/MRC Ratio (47) (24) (10) Total Totals (Elementary and ) Year Schools Required for 80% Enrollment/MRC Ratio Schools Required for 90% Enrollment/MRC Ratio Schools Required for 100% Enrollment/MRC Ratio Total Demand - Growth nalysis of Capital Funding for School Facilities Page 2-14

23 Costs - Construction and Design Fees Estimates have been made on the projected costs of constructing the new pupil places required based on the following planning parameters. q q q q q q pproximately 100 square feet of construction are required for each new pupil place. For elementary schools, a construction cost of $89.96 per square foot has been used, based on the 1996 edition of Yardsticks for Costing. For secondary schools, a construction cost of $93.78 per square foot has been used, based on the 1996 edition of Yardsticks for Costing. No allowances have been made for future increases or decreases in construction costs after the publication of the 1996 edition of Yardsticks for Costing, inflation or variations in construction costs in different geographical areas of Ontario. The Ontario ssociation of rchitects has prepared a Schedule of Recommended Fees which includes elementary and secondary schools. The percentage fee varies based on the construction cost. For the purposes of this report, an approximate mid-point fee of 8% has been used for all projects. The construction and design costs for each elementary pupil place has been calculated as follows: 100 square feet X $89.96 per square foot X 1.08 = $9,716 per elementary pupil place. q The construction and design costs for each secondary pupil place has been calculated as follows: 100 square feet X $93.78 per square foot X 1.08 = $10,128 per secondary pupil place. Summaries of the building costs (cumulative and incremental) are provided for elementary, secondary and total requirements on pages 2-16 and Note that these building costs do not include site costs which are summarized on pages 2-19 and Demand - Growth nalysis of Capital Funding for School Facilities Page 2-15

24 Cumulative Costs for the Construction and Design of New Schools (Not Including Site Costs) Elementary Summary Year Estimated Capital Costs for 80% Enrollment/MRC Ratio Estimated Capital Costs for 90% Enrollment/MRC Ratio Estimated Capital Costs for 100% Enrollment/MRC Ratio 1996 $1,581,832,812 $621,824,000 $213,042, $2,086,200,088 $1,055,643,400 $440,717, $2,505,309,464 $1,365,797,552 $688,164, $3,064,853,904 $1,841,279,160 $1,035,793,612 Summary Year Estimated Capital Costs for 80% Enrollment/MRC Ratio Estimated Capital Costs for 90% Enrollment/MRC Ratio 1996 $749,249,184 $242,494,704 $81,500,016 Estimated Capital Costs for 100% Enrollment/MRC Ratio 2001 $1,470,970,464 $722,875,872 $310,028, $991,845,168 $481,637,040 $206,854, $1,158,359,616 $614,364,480 $307,870,944 Totals (Elementary and ) Year Estimated Capital Costs for 80% Enrollment/MRC Ratio Estimated Capital Costs for 90% Enrollment/MRC Ratio Estimated Capital Costs for 100% Enrollment/MRC Ratio 1996 $2,331,081,996 $864,318,704 $294,542, $3,557,170,552 $1,778,519,272 $750,745, $3,497,154,632 $1,847,434,592 $895,019, $4,223,213,520 $2,455,643,640 $1,343,664,556 Demand - Growth nalysis of Capital Funding for School Facilities Page 2-16

25 Incremental Costs for the Construction and Design of New Schools (Not Including Site Costs) Elementary Summary Year Estimated Capital Costs for 80% Enrollment/MRC Ratio Estimated Capital Costs for 90% Enrollment/MRC Ratio Estimated Capital Costs for 100% Enrollment/MRC Ratio 1996 $1,581,832,812 $621,824,000 $213,042, $504,367,276 $433,819,400 $227,675, $419,109,376 $310,154,152 $247,447, $559,544,440 $475,481,608 $347,628,764 Total $3,064,853,904 $1,841,279,160 $1,035,793,612 Summary Year Estimated Capital Costs for 80% Enrollment/MRC Ratio Estimated Capital Costs for 90% Enrollment/MRC Ratio Estimated Capital Costs for 100% Enrollment/MRC Ratio 1996 $749,249,184 $242,494,704 $81,500, $721,721,280 $480,381,168 $228,528, ($479,125,296) ($241,238,832) ($103,173,936) 2021 $166,514,448 $132,727,440 $101,016,672 Total $1,158,359,616 $614,364,480 $307,870,944 Totals (Elementary and ) Year Estimated Capital Costs for 80% Enrollment/MRC Ratio Estimated Capital Costs for 90% Enrollment/MRC Ratio Estimated Capital Costs for 100% Enrollment/MRC Ratio 1996 $2,331,081,996 $864,318,704 $294,542, $1,226,088,556 $914,200,568 $456,203, ($60,015,920) $68,915,320 $144,273, $726,058,888 $608,209,048 $448,645,436 Total $4,223,213,520 $2,455,643,640 $1,343,664,556 Demand - Growth nalysis of Capital Funding for School Facilities Page 2-17

26 Costs - cquiring and Servicing Sites Significant capital funds will be required to acquire and to service building sites. It is very difficult to quantify these costs accurately for the following reasons: q q q The costs of acquiring sites will vary widely. For some projects, such as additions, there may be no cost. For other projects where the market price of land is high and where the owner has no incentive to offer the site to a school board at a reduced rate, the cost of land can typically be 25% of the total project cost. Site servicing needs and the corresponding costs also vary widely from site to site. Some sites may already be serviced; while others will require major upgrades to the municipal infrastructure. There are numerous other factors which can have a major impact on a project s capital cost. For example, some municipalities charge significant site plan and building permit fees, while others do not. Municipal regulations can increase costs for landscaping, provision of parking lots and other factors. new school in a rural area with poor soil conditions may require extensive capital to provide a proper septic system. Estimated Site Costs The estimated cumulative and incremental site costs on the following pages are based on a rough average site cost of $1,000,000 for an elementary school ($2,000 per pupil) and $3,000,000 for a secondary school ($3,000 per pupil). These figures appear in the tables on pages 2-19 and Given the points listed above, it is important to note that these figures are rough estimates; more precise site cost estimates would need to be calculated on a case by case basis. Estimated Total Costs Estimated total costs are summarized on pages 2-21 and These tables add the estimated construction costs and the estimated site costs to produce a total cost for an enrollment/mrc ratio of 80, 90 or 100%. The total costs per pupil are $11,716 for elementary student places and $13,128 for secondary student places. Demand - Growth nalysis of Capital Funding for School Facilities Page 2-18

27 Cumulative Costs for New Sites Elementary Summary ($1 Million Per School) Year Estimated Site Costs for 80% Enrollment/MRC Ratio Estimated Site Costs for 90% Enrollment/MRC Ratio Estimated Site Costs for 100% Enrollment/MRC Ratio 1996 $325,614,000 $128,000,000 $43,854, $429,436,000 $217,300,000 $90,720, $515,708,000 $281,144,000 $141,656, $630,888,000 $379,020,000 $213,214,000 Summary ($3 Million Per School) Year Estimated Site Costs for 80% Enrollment/MRC Ratio Estimated Site Costs for 90% Enrollment/MRC Ratio Estimated Site Costs for 100% Enrollment/MRC Ratio 1996 $221,934,000 $71,829,000 $24,141, $435,714,000 $214,122,000 $91,833, $293,793,000 $142,665,000 $61,272, $343,116,000 $181,980,000 $91,194,000 Totals (Elementary and ) Year Estimated Site Costs for 80% Enrollment/MRC Ratio Estimated Site Costs for 90% Enrollment/MRC Ratio Estimated Site Costs for 100% Enrollment/MRC Ratio 1996 $547,548,000 $199,829,000 $67,995, $865,150,000 $431,422,000 $182,553, $809,501,000 $423,809,000 $202,928, $974,004,000 $561,000,000 $304,408,000 Demand - Growth nalysis of Capital Funding for School Facilities Page 2-19

28 Incremental Costs for New Sites Elementary Summary ($1 Million Per School) Year Estimated Site Costs for 80% Enrollment/MRC Ratio Estimated Site Costs for 90% Enrollment/MRC Ratio Estimated Site Costs for 100% Enrollment/MRC Ratio 1996 $325,614,000 $128,000,000 $43,854, $103,822,000 $89,300,000 $46,866, $86,272,000 $63,844,000 $50,936, $115,180,000 $97,876,000 $71,558,000 Total $630,888,000 $379,020,000 $213,214,000 Summary ($3 Million Per School) Year Estimated Site Costs for 80% Enrollment/MRC Ratio Estimated Site Costs for 90% Enrollment/MRC Ratio 1996 $221,934,000 $71,829,000 $24,141,000 Estimated Site Costs for 100% Enrollment/MRC Ratio 2001 $213,780,000 $142,293,000 $67,692, ($141,921,000) ($71,457,000) ($30,561,000) 2021 $49,323,000 $39,315,000 $29,922,000 Total $343,116,000 $181,980,000 $91,194,000 Totals (Elementary and ) Year Estimated Site Costs for 80% Enrollment/MRC Ratio Estimated Site Costs for 90% Enrollment/MRC Ratio Estimated Site Costs for 100% Enrollment/MRC Ratio 1996 $547,548,000 $199,829,000 $67,995, $317,602,000 $231,593,000 $114,558, ($55,649,000) ($7,613,000) $20,375, $164,503,000 $137,191,000 $101,480,000 Total $974,004,000 $561,000,000 $304,408,000 Demand - Growth nalysis of Capital Funding for School Facilities Page 2-20

29 Cumulative Total Costs Elementary Summary Year Estimated Total Costs for 80% Enrollment/MRC Ratio Estimated Total Costs for 90% Enrollment/MRC Ratio Estimated Total Costs for 100% Enrollment/MRC Ratio 1996 $1,907,446,812 $749,824,000 $256,896, $2,515,636,088 $1,272,943,400 $531,437, $3,021,017,464 $1,646,941,552 $829,820, $3,695,741,904 $2,220,299,160 $1,249,007,612 Summary Year Estimated Total Costs for 80% Enrollment/MRC Ratio Estimated Total Costs for 90% Enrollment/MRC Ratio Estimated Total Costs for 100% Enrollment/MRC Ratio 1996 $971,183,184 $314,323,704 $105,641, $1,906,684,464 $936,997,872 $401,861, $1,285,638,168 $624,302,040 $268,126, $1,501,475,616 $796,344,480 $399,064,944 Totals (Elementary and ) Year Estimated Total Costs for 80% Enrollment/MRC Ratio Estimated Total Costs for 90% Enrollment/MRC Ratio Estimated Total Costs for 100% Enrollment/MRC Ratio 1996 $2,878,629,996 $1,064,147,704 $362,537, $4,422,320,552 $2,209,941,272 $933,298, $4,306,655,632 $2,271,243,592 $1,097,947, $5,197,217,520 $3,016,643,640 $1,648,072,556 Demand - Growth nalysis of Capital Funding for School Facilities Page 2-21

30 Incremental Total Costs Elementary Summary Year Estimated Total Costs for 80% Enrollment/MRC Ratio Estimated Total Costs for 90% Enrollment/MRC Ratio Estimated Total Costs for 100% Enrollment/MRC Ratio 1996 $1,907,446,812 $749,824,000 $256,896, $608,189,276 $523,119,400 $274,541, $505,381,376 $373,998,152 $298,383, $674,724,440 $573,357,608 $419,186,764 Total $3,695,741,904 $2,220,299,160 $1,249,007,612 Summary Year Estimated Total Costs for 80% Enrollment/MRC Ratio Estimated Total Costs for 90% Enrollment/MRC Ratio Estimated Total Costs for 100% Enrollment/MRC Ratio 1996 $971,183,184 $314,323,704 $105,641, $935,501,280 $622,674,168 $296,220, ($621,046,296) ($312,695,832) ($133,734,936) 2021 $215,837,448 $172,042,440 $130,938,672 Total $1,501,475,616 $796,344,480 $399,064,944 Totals (Elementary and ) Year Estimated Total Costs for 80% Enrollment/MRC Ratio Estimated Total Costs for 90% Enrollment/MRC Ratio Estimated Total Costs for 100% Enrollment/MRC Ratio 1996 $2,878,629,996 $1,064,147,704 $362,537, $1,543,690,556 $1,145,793,568 $570,761, ($115,664,920) $61,302,320 $164,648, $890,561,888 $745,400,048 $550,125,436 Total $5,197,217,520 $3,016,643,640 $1,648,072,556 Demand - Growth nalysis of Capital Funding for School Facilities Page 2-22

31 The incremental need for capital for new pupil places across Ontario for the next 25 years is shown diagrammatically below to emphasize the effect of demographics over this planning period. The diagram uses a 90% enrollment to MRC ratio. Incremental Total Costs $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 CURRENT Demand - Growth nalysis of Capital Funding for School Facilities Page 2-23

32 llocation Process Most school board officials interviewed believe the current allocation process for new pupil places is both inconsistent and subjective. They would like a process of determining need which is rational, easily understood, and which could be applied consistently across the province both now and in the future. The relationship between the MRC and enrollment is not a perfect measure of need, however, it meets the test of rationality, it is easily understood and it could be applied consistently. It provides rough justice and seems to be acceptable to those school board officials interviewed. Policies and procedures would have to change at a number of boards to achieve a closer match between enrollments and the MRC. Using the enrollment/mrc ratio as the basis for determining need might accelerate these changes in policies and procedures. It is interesting to note that the lberta Department of Education utilizes a similar method of comparing enrollments to school capacities for the allocation of capital funds for growth. Notwithstanding the importance of objectivity, there would be a need for exceptions in unique circumstances. These circumstances should be few in number and could be a subjective overlay to the process. The Ministry of Education and Training would have to verify the current MRC data to ensure its accuracy if it is to be used as the basis for determining need. number of boards are currently upgrading their own data, referred to as either program rated capacity (PRC) or functional rated capacity (FRC), so that they can gain a better understanding of their current stock of school facilities and how they can utilize them most effectively. Recommendations For reasons set out earlier in this chapter, it is recommended that: 1.0 Determination of Need for dditional Pupil Places 1.1 The determination of need for the construction of new pupil places in Ontario be based on the relationship between enrollments and the number of current pupil places for each school board jurisdiction. 1.2 In the short term, the number of pupil places be set at the Ministry Rated Capacity (MRC). In the longer term, the Ministry of Education and Training give Demand - Growth nalysis of Capital Funding for School Facilities Page 2-24

33 consideration to replacing the MRC calculation with a Functional Rated Capacity (FRC) or Program Rated Capacity (PRC) calculation. 1.3 The ratio of enrollment to MRC be set on the basis of Ministry policies and the availability of capital funds. 1.4 The ratio of enrollment to MRC be consistent for all school boards which are predominately urban or suburban. 1.5 lower ratio of enrollment to MRC be set school boards which are predominately rural. 1.6 Exceptions be permitted in extraordinary circumstances where a school board is unable to reach the targeted ratio of enrollment to MRC because of geographic, demographic or other special circumstances. Such exceptions should be few in number. 2.0 Enrollment Projections 2.1 The Ministry of Education and Training establish and maintain a computerized model of enrollment projections for each school board based on the population projections provided by the Ontario Ministry of Finance. 2.2 The need for capital funds for school boards where enrollments are projected to decline be reviewed on a case-by-case basis to ensure that facilities are not constructed because of a short term need which is not sustainable over a longer time frame. 2.3 The need for capital funds for secondary pupil places be reviewed on a case by cases basis in the years inclusive to ensure that facilities are not constructed which will not be required after the discontinuation of the Ontario cademic Credits. Demand - Growth nalysis of Capital Funding for School Facilities Page 2-25

34 CHPTER 2 - CHRTS: Cumulative Need for Pupil Places Elementary Summary Year Pupil Places RequiredPupil Places RequiredPupil Places Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio ,807 64,000 21, , ,650 45, , ,572 70, , , ,607 Cumulative Need for Pupil Places Summary Year Pupil Places RequiredPupil Places RequiredPupil Places Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio ,978 23,943 8, ,238 71,374 30, ,931 47,555 20, ,372 60,660 30,398 Cumulative Need for Pupil Places Totals (Elementary and ) Year Pupil Places RequiredPupil Places RequiredPupil Places Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio ,785 87,943 29, , ,024 75, , ,127 91, , , ,005 Page 2-10

35 Incremental Need For Pupil Places Elementary Summary Year Pupil Places RequiredPupil Places RequiredPupil Places Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio ,807 64,000 21, ,911 44,650 23, ,136 31,922 25, ,590 48,938 35,779 Total 315, , ,607 Incremental Need For Pupil Places Summary Year Pupil Places RequiredPupil Places RequiredPupil Places Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio ,978 23,943 8, ,260 47,431 22, (47,307) (23,819) (10,187) ,441 13,105 9,974 Total 114,372 60,660 30,398 Incremental Need For Pupil Places Totals (Elementary and ) Year Pupil Places RequiredPupil Places RequiredPupil Places Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio ,785 87,943 29, ,171 92,081 45, (4,171) 8,103 15, ,031 62,043 45,753 Total 429, , ,005 Page 2-11

36 Cumulative Need for dditional Schools Schools Needed (Elementary = 500; = 1,000) Elementary Summary (500 per School) Year Schools Required Schools Required Schools Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio Cumulative Need for dditional Schools Schools Needed (Elementary = 500; = 1,000) Summary (1,000 per School) Year Schools Required Schools Required Schools Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio Cumulative Need for dditional Schools Schools Needed (Elementary = 500; = 1,000) Totals (Elementary and ) Year Schools Required Schools Required Schools Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio Page 2-13

37 Incremental Need for dditional Schools Elementary Summary (500 per School) Year Schools Required Schools Required Schools Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio Total Incremental Need for dditional Schools Summary (1,000 per School) Year Schools Required Schools Required Schools Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio (47) (24) (10) Total Incremental Need for dditional Schools Totals (Elementary and ) Year Schools Required Schools Required Schools Required for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio Total Page 2-14

38 Building Costs: Elementary: $9,716 : $10,128 Cumulative Cost for the Construction and Design of New Schools (Not including site costs) Elementary Summary (9,716 per Pupil) Year Estimated Capital Costs Estimated Capital Costs Estimated Capital Costs for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio 1996 $1,581,832,812 $621,824,000 $213,042, $2,086,200,088 $1,055,643,400 $440,717, $2,505,309,464 $1,365,797,552 $688,164, $3,064,853,904 $1,841,279,160 $1,035,793,612 Cumulative Cost for the Construction and Design of New Schools (Not including site costs) Summary (10,128 per Pupil) Year Estimated Capital Costs Estimated Capital Costs Estimated Capital Costs for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio 1996 $749,249,184 $242,494,704 $81,500, $1,470,970,464 $722,875,872 $310,028, $991,845,168 $481,637,040 $206,854, $1,158,359,616 $614,364,480 $307,870,944 Cumulative Cost for the Construction and Design of New Schools (Not including site costs) Totals (Elementary and ) Year Estimated Capital Costs Estimated Capital Costs Estimated Capital Costs for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio 1996 $2,331,081,996 $864,318,704 $294,542, $3,557,170,552 $1,778,519,272 $750,745, $3,497,154,632 $1,847,434,592 $895,019, $4,223,213,520 $2,455,643,640 $1,343,664,556 Page 2-16

39 Incremental Cost for the Construction and Design of New Schools (Not including site costs) Elementary Summary (9,716 per Pupil) Year Estimated Capital Costs Estimated Capital Costs Estimated Capital Costs for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio 1996 $1,581,832,812 $621,824,000 $213,042, $504,367,276 $433,819,400 $227,675, $419,109,376 $310,154,152 $247,447, $559,544,440 $475,481,608 $347,628,764 Total $3,064,853,904 $1,841,279,160 $1,035,793,612 Incremental Cost for the Construction and Design of New Schools (Not including site costs) Summary (10,128 per Pupil) Year Estimated Capital Costs Estimated Capital Costs Estimated Capital Costs for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio 1996 $749,249,184 $242,494,704 $81,500, $721,721,280 $480,381,168 $228,528, ($479,125,296) ($241,238,832) ($103,173,936) 2021 $166,514,448 $132,727,440 $101,016,672 Total $1,158,359,616 $614,364,480 $307,870,944 Incremental Cost for the Construction and Design of New Schools (Not including site costs) Totals (Elementary and ) Year Estimated Capital Costs Estimated Capital Costs Estimated Capital Costs for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio 1996 $2,331,081,996 $864,318,704 $294,542, $1,226,088,556 $914,200,568 $456,203, ($60,015,920) $68,915,320 $144,273, $726,058,888 $608,209,048 $448,645,436 Total $4,223,213,520 $2,455,643,640 $1,343,664,556 Page 2-17

40 Site Costs Elementary: $1,000,000 : $3,000,000 Cumulative Costs for New Sites Elementary Summary ($1M per School) Year Estimated Site Costs Estimated Site Costs Estimated Site Costs for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio 1996 $325,614,000 $128,000,000 $43,854, $429,436,000 $217,300,000 $90,720, $515,708,000 $281,144,000 $141,656, $630,888,000 $379,020,000 $213,214,000 Cumulative Costs for New Sites Summary ($3M per School) Year Estimated Site Costs Estimated Site Costs Estimated Site Costs for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio 1996 $221,934,000 $71,829,000 $24,141, $435,714,000 $214,122,000 $91,833, $293,793,000 $142,665,000 $61,272, $343,116,000 $181,980,000 $91,194,000 Cumulative Costs for New Sites Totals (Elementary and ) Year Estimated Site Costs Estimated Site Costs Estimated Site Costs for 80% for 90% for 100% Enrol/MRC Ratio Enrol/MRC Ratio Enrol/MRC Ratio 1996 $547,548,000 $199,829,000 $67,995, $865,150,000 $431,422,000 $182,553, $809,501,000 $423,809,000 $202,928, $974,004,000 $561,000,000 $304,408,000 Page 2-18