About the School Board Meeting
Dear FLT Members,
Your representative parents were present at the School Board Meeting on February 18.
Please find hereafter our summary of this meeting. The summary of the previous meeting is attached.
Parents’ representatives (FLT) : Nicolas Di Costanzo, Pierre-François Vilquin, Guillaume Fernet.
This summary comes in addition to the official meeting minutes of the 8 February 2018 School Board meeting, available on the LFI Tokyo website. It aims at providing additional information and explanations of your representatives’ positions at the meeting.
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The previous School Board meeting minutes – including the remarks from the parents, is adopted.
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A new mandate started in December 2017. 12 board members and 2 auditors are renewed for a 4-year period.
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2 school trips are approved: Oshima and Okayama (Oshima in lieu of Poland).
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In line with the budget guidance, the tuition will increase by 1% – despite an overall revenue increase of 8.43% over the period. The management of LFI Tokyo forecasts an increase of the student enrollment over the next 3 years.
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This year the Corporate contribution Plan should raise to 190MJPY with 11 companies. Some of that amount will be allocated to the debt repayment (118M per year until 2032) and will also contribute to the real estate extension project.
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Total number of students for 2018 is forecasted at 1342, knowing that the Tokyo Metropolitan Government recently authorized the LFIT to enroll up to 1350 students.
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In order to balance the budget, the LFI Tokyo Management found 40MJPY of savings across various items. The FLT welcome favorably those efforts and wish they could have been made earlier… However the fees paid to AEFE are increasing significantly on this budget, from 6% to 9% of tuition, hence now a total amount of 123MJPY. This 50% increase should be financed with savings.
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The total scholarship budget remains at 170MJPY, the same for the past 3 years despite a significant increase of the number of students over the same period. The management says that this budget is sufficient, though we do not have any element to assess this at the moment.
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Given the anticipated increase of student enrollment, the LFI Tokyo is planning to open new buildings for September 2018. The only option proposed is the “School #6”, located across the street from the LFIT. As a first step, the LFIT will rent the 3rd floor of this building for 3 years, for 50MJPY per year. This 3rd floor would offer an additional capacity of 250 students (to be confirmed). Refurbishing works are estimated at 100MJPY, all financed by the LFIT (partly thanks to a provision decrease of 73MJPY).
Depending on the actual student enrollment, various options can be adopted later: renting the rest of the building or purchasing it (for a maximum price of 100MJPY). Refurbishing is again estimated at 100MJPY per floor + 20MJPY for the common areas. The estate could be rented for 70MJPY per year since it would be too expensive to purchase for the LFIT (2,25bn JPY ~ 17MEUR) who cannot borrow any more money until 2032. Besides the Tokyo Metropolitan Government requests a lease before any purchase. -
No financing plan was presented to date, except for the 3rd floor and over the 2018 period only.
No concrete study has yet been completed to assess the necessary works to refurbish the building (since the LFIT has yet no access to the building). The estimates are based on the experience of the management for the refurbishment of Takinogawa. -
The parents regret that there is to date no alternative proposal presented by the management. With only one option there is no room for negotiation. The parents tough requested during last year’s board meeting to consider multiple options (there are 6 other empty schools in Kita-ku). Should this “School #6” project fail, the other options would be:
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Optimizing the usage of existing rooms and facilities on the Takinogawa site (meeting rooms, temporary constructions…)
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Cap the enrollment of new students
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A few months from the September deadline, and after more than one year of research, the FLT regret there is not a more solid project in place.
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Another sensitive point at this Board meeting is the planned 12.37% increase of the salary cost because of natural increase and the hiring of 9 additional FTE, including 3 FTE for admin purposes (mostly in accounting).
The parents request that the salary cost increase do not exceed the revenue increase, i.e. 8.5% on this budget. We therefore asked the management to phase the hiring over multiple years and received a negative answer. Salary cost increase faster than revenues over the past years and it is increasing (it was 11% last year).
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The parents voted against this 2018 budget. The main reason being the lack of preparation of the real estate project and the lack of understanding of its financial impact in the future, in particular any impact on tuition cost. Whereas the parents are favorable to the extension project to School #6, we cannot vote a budget without a solid assessment of the costs to refurbish the building (including seismic or chemicals security audits) and without reference to benchmark such costs.
The other reason is the uncontrolled increase of the salary cost, now accounting for 67.5% of tuition (was 65% last year), de facto reducing our investment capability when we need it the most. We cannot endorse such lack of consistency.
* According to our estimates, it seems that the number of students required to finance the 3rd floor it larger than the floor capacity… We are still waiting for an answer to this question.
Sincerely yours,
FLT-Fapée Team