MULGRAVE: During a time of significant fiscal hardship, the Town of Mulgrave is trying to save money in any way they can and their new Chief Administrative Officer has indicated she will be reducing the insurance coverage on the former Mulgrave Memorial Education Centre from $7.7 million to $4.4 million.
Darlene Berthier Sampson explained the building was over-insured with the coverage based on the building being worth $7.7 million, which is the full-replacement value, and will be reduced by nearly 43 per cent to the actual cash value of $4.4 million.
“Which is probably closer to what we’re dealing with now, the cash-up value as opposed to a replacement,” she said. “The annual premium for the school was $6,207 based on a $7.7 million replacement cost, but we were given a second option to look at, the actual cash value limit of $4.4 million.”
Berthier Sampson advised the town had already paid the premium back in June, so being about halfway through the year and pro-rating the premium, there’s about $3,600 of pre-paid insurance remaining.
“Probably 50 per cent of that [$3,600] we could get back if we reduced that going forward,” she said. “It would avail a $1,500-plus refund. Given insurance of that value is not necessary as the full building would not be replaced.”
With the building being over-insured, and the town fighting fiscal challenges, Berthier Sampson took the opportunity to reduce the coverage and trigger a refund.
The Mulgrave Memorial Education Centre was turned over on July 6, 2018, after the decision was made to shut down for good and the town received $20,000 from the Strait regional centre for education to complete renovations that weren’t done by that body. Combining that with $30,000 from the town’s budget they weren’t going to use, extensive work was carried out on the old section of the school.
The town also received provincial funding of $80,000 to operate the building for the next year.
“When I was running through the costs of the school, with that $80,000 and the maintenance repairs and so on, insurance has not been factored into that calculation when we look at how much we’ve consumed out of it.”
This is something Berthier Sampson said she would fix on the books immediately to reflect actual, real-time accuracy.