But, superintendent stresses, profit isn’t greatest measure of the program’s success
Crookston School District Superintendent Chris Bates said this week that he wants the Construction Trades program to be as successful as anyone, and if that means it makes a bigger profit, great. But, to him, he added, the program is most successful when the students enrolled in it learn important skills that benefit them later in life.
Bates spoke at this week’s meeting of the Crookston Housing & Economic Development Authority Board of Directors. A CHEDA Board member himself, Bates was unable to attend the board’s April meeting, when a discussion commenced about the school district’s apparent desire to squeeze more of a profit out of the program – a partnership between CHEDA, the school district, and Northwest Minnesota Housing Cooperative – that has Crookston High School students construct a new house each year, which is then sold.
After selling the house, paying expenses and covering CHEDA’s costs to cover the logistics of the program, CHEDA Executive Director Craig Hoiseth has said that the net profit over the past couple of years has been up somewhat, to the $6,000-$7,000 range. Those profits have been divvied up evenly between the school district and CHEDA.
Last month, Hoiseth told his board that Bates and school district Business Manager Laura Lyczewski had mentioned their desire to make the CT program more profitable. CHEDA Board members, figuring that the most clear-cut way to do that would be to increase the sale price of the house each year, were hesitant to do so, saying that the sale of the house each year essentially finances the following year’s CT program. When they discussed the program’s profits at their April meeting, this year’s CT house had just sold, for a hair under $200,000.
This week, in conjunction with his comments, Bates handed out a spreadsheet tabulated by Lyczewski that broke down the program’s numbers dating back to the 2011-12 school year, including the sale price of each home and various expenses, for things from siding, to concrete, to paint, to gutters, to lumber, etc. The spreadsheet averaged all of those costs individually, and included their high and low range over the past five years. Using lumber materials as an example, Bates noted that the highest cost was $59,505, with a low of $42,442. That’s a range of just over $17,000. For all of the costs included on the spreadsheet, the high over the past five years was $277,107, and the low was $165,869, adding up to a range of $111,238, or right around 60 percent of the average sale price of the CT house.
“I would say 60 percent for a range is a bit high,” Bates said. “I threw this together because I wanted to know, and what I think I found out is that this shows a degree of volatility.”
CHEDA Board member Paul Eickhof said the numbers were “very interesting,” and added that he can’t believe a house as basic as the one built by the CT students each year can sell for $200,000.
“The margins are very thin and very volatile,” Bates added. “If this was a business plan proposed to you, I don’t know if you’d jump right in.”
Bates’ comments were for the sake of conversation only at this stage; the CHEDA Board took no action.