• TCAF would be a non-profit organization whose membership would consist of those private post-secondary educational institutions in Ontario that voluntarily participate in the fund and are in good standing (i.e. have fully paid all premiums, fees, and special levies; and are in adherence with TCAF by-laws).
  
• A Governing Board would govern TCAF. The Governing Board composition would be five (5) OACC member institutions that are also TCAF members, two (2) non-OACC institutions that are TCAF members, and two (2) non "industry" representatives (perhaps individuals from the fields of finance and law).
  
• To have quorum at a Board meeting, there would have to be at least 5 members present with a minimum of one member present from each of the three categories of Board members (OACC, non-OACC, and non industry). Annually TCAF members would elect officers (i.e. Chair, Vice Chair, and Secretary/Tresurer)
  
• A Government Liaison person that would collaborate with TCAF would be appointed by the Deputy Minister of Training, Colleges, and Universities. Such an appointee would not serve as a voting member of the Governing Board, but would function in an ex officio capacity.
  
• The Governing Board of TCAF would be responsible for the overall administration of the fund. Thus, the Board would be responsible for setting premium rates and fees, collecting premiums and fees, overseeing the financial status of the organization, and reporting to members annually (including audited statements and an activity report).
  
• The Governing Board would recruit and maintain a roster of at least 20 "trainout experts".
  
• Upon learning of a school closure, The Board would select up to 5 individuals from that roster on a case by case basis to form a SWAT team with the appropriate geographic, discipline, and experience background that would be responsible for developing the most appropriate training completion plan within two weeks of a school closure. Acting somewhat like a volunteer fire department, the SWAT Team would take responsibility for all matters relating to the organization of the training completion plan and would, in fact, go into a school at the time of closure to pull everything together and act as a liaison between the Ministry, the train out institutions, and the students.
  
• While the Governing Board would be comprised of unpaid volunteers, the governing Board may from time to time approve the payment of a nominal stipend to the members of the Board that are non-industry members.
  
• TCAF would ensure that any training completion plan would fully utilize any outstanding revenues to come in from students or their funders, and minimize the cost to the trainout fund of any on-going expenses.
  
• The private career college members of the Governing Board would be elected by TCAF members with OACC members voting for the Board members filling the OACC seats and non-OACC members voting for the Board members filling the non-OACC seats.
  
• The elected Board members would appoint the non-industry members of the Board.
  
• The fiscal year would run from April 1 to March 31.

• The target commencement date for TCAF to begin operation would be January 2, 2003. Commencing two months prior to TCAF's first day of operation, TCAF would begin to collect trainout premiums and administration fees from the member institutions. All such premiums and fees would be collected annually in advance based on applicable revenues reported on the institutions' most recent financial statements that have been verified by an accountant's statement. TCAF would adhere to strict confidentiality principles that would ensure that no TCAF member has access to financial information from any other member institution.
  
• For the purposes of TCAF, institutions that have been "registered" for more than 5 years would be deemed to be mature institutions. Institutions that have been "registered" for less than 6 years would be deemed to be institutions that have not reached maturity. Each year the trainout premium charged to institutions that have not reached maturity will be based on a percentage that is 50% higher than the percentage established for mature institutions. A change of ownership would not impact on the status of a mature institution (i.e. an institution that had been "registered for more than five years prior to the change of ownership would still be considered to be a mature institution); unless the TCAF trainout funds had been drawn upon in respect to the institution's students prior to the change of ownership. In such a case, the institution under new ownership would be deemed to be a newly registered institution with 0 years of operation and therefore would not be eligible to participate in TCAF until it had completed one year of operation. After one year of operation, such an institution would be eligible to participate in TCAF as a non-founding institution that had not reached maturity.
  
• Founding institutions for TCAF purposes would be those institutions that participate in TCAF in its inaugural year of operation.
  
• The trainout premiums charged to mature founding institutions in respect to TCAF"s first year of operation would be based on 0.15% of the institution's applicable revenues, despite the fact that the combined cost to institutions for TCAF and bonding will exceed current bonding costs. The rates for trainout premiums to be charged to mature founding institutions for all subsequent years would be determined by the Governing Board in accordance with current needs. The goal would be to build the trainout fund up enough to eventually eliminate the need to collect trainout premiums. (Please refer to the spreadsheets posted on the tcaf.ca web site that outline the estimated TCAF premiums, administration fees, and bonding costs for the range of various institution sizes over the first 5 years of TCAF's operation)
  
• The TCAF trainout premium for mature non-founding participating institutions would be based on the 0.15% base rate in their first year of participation, and will follow the established pattern of percentage rates charged to founding institutions in subsequent years (i.e. if the 2nd year rate for mature founding institutions had been set at 0.12%, then the second year rate for mature non-founding institutions would also be 0.12%). Again, the percentage used for non-founding institutions that have not reached maturity would be 50% higher than the rates for mature non-founding institutions.
  
• Applicable revenue would be defined to be those revenues derived from tuition, books, exam vouchers, and supplies for those programs that qualify for TCAF coverage.
  
• The Ontario Government would backstop the fund with an interest-free loan guarantee (line of credit) during TCAF's ramp up time or in the case of a shortfall as a result of a large hit on the fund.
  
• The amount of loan guarantee that would be required is as follows:
  
  1. $750,000 during the first two years of TCAF's operation,
  2. $500,000 during TCAF's third and fourth years of operation,
  3. $250,000 during TCAF's fifth year of operation,
  4. $0 during subsequent years.
     
• This schedule of declining loan guarantee by the government would be reviewed as to its appropriateness for year three and beyond, prior to the end of year two of TCAF's operation.
  
• The amount of the loan guarantee in year one and two is approximately equal to the amount of premiums and fees that TCAF projects to collect in its first year.
  
• The business plan for TCAF assumes that there will be 100% participation by all registered institutions in the province, commencing in year one. Based on that assumption TCAF would start out with approximately $1.3 million in available trainout resources including the Government loan guarantee. Should the participation rate fall significantly short of 100%, TCAF may have to impose a special levy on its member institutions.
  
• Any money advanced to TCAF by the Government under the terms of the loan guarantee would be repaid by TCAF within two years. This would be accomplished through the imposition of a special levy on all TCAF member institutions.
  
• The TCAF governing Board would be required to keep the fund viable to serve its purpose. It would be responsible for ensuring that the total resources available to the trainout fund including funds on hand and the Government backstop is maintained at a level of at least $1 million. If after covering the cost of a trainout, the total resources available in the trainout fund fall below $1 million, a special levy would be imposed on all TCAF member institutions to return the total resources available back to $1 million.
  
• Trainout premiums collected by TCAF would be used to cover only the direct costs of providing training completion services. They would not be used to cover administration costs.
  
• Institutions that are delinquent in paying their annual TCAF premiums or fees would forfeit their status, as TCAF participating members for one year and TCAF would notify the Government.
  
• TCAF would also collect an administration fee from participating institutions separate from their trainout premiums, which the Board would use solely to cover administration expenses. It is anticipated that these costs will amount to $160,000 in the initial year and will remain fairly constant year after year, subject to inflation or cost of living adjustments. The Governing Board would have the right to set the administration fee to be charged to participating institutions from time to time as required. The draft administration budget for year 1 is as follows:

• Staffing (Executive and Administrative) $ 25,000
  
• Premises 5,100
  
• D & O Insurance 1,100
  
• Supplies 800
  
• Travel 5,000
  
• Telephone 5,000
  
  
• Web Site/Network 5,000
  
• Swat Team 22,000
  
• Professional Services 26,000
  
  
• Misc. 5,000
  
• Marketing 60,000
  
  
• Total 160,000
  
• The TCAF board would ensure that the appropriate legal steps are taken to establish and manage a trust fund for the trainout premiums collected from member institutions.
  
• The TCAF Board would be required to invest the monies held in the trainout fund, and any interest income realized from such investments would be deposited into the trainout fund. 

PARTICIPATION

• Participation in TCAF would be open to all "registered" private career colleges in Ontario, that have been "registered" and operating as a private career college for at least one year.
  
• The Governing Board of TCAF would have the right to refuse membership or charge special trainout premiums in respect to private post-secondary institutions that are offering programs that are unique enough in the Board's opinion to make student train outs impossible.
  
• All students enrolled in all "registered" programs at TCAF participating institutions would be entitled to access training completion services from TCAF.
  
• All students enrolled in "non-registered" programs at participating TCAF institutions would be eligible to receive training completion services from TCAF, provided those programs are full-time programs that are at least 12 weeks in length.
  
• TCAF would extend training completion services to students in "non-registered" programs who are clients of agencies such as HRDC or WSIB, pending recognition of TCAF participating institutions by those agencies. This would provide protection for students that the Province would not cover normally under the Act.

• Training completion services would be available to eligible students attending participating institutions effective as of TCAF's commencement date.
  
• Once the Governing Board of TCAF has been notified of a closure of a participating institution, it would select a customized SWAT Team of up to 5 individuals from its roster of trainout experts.
  
• Members of The SWAT Team would immediately meet with officials from the closed institution and the ex officio Government appointee to assess the situation with respect to the number of students affected, the types of training programs involved, the amount of training yet to be done, the amount of financial resources available, potential trainout sites, etc. The SWAT Team would take the prime responsibility for communicating at the earliest moment with the affected students and local media, assuring them that all students will be trained out at no additional cost.
  
• The SWAT team's approach to developing the most appropriate trainout plan would start with an evaluation of the various options available in the following suggested order of priority:
  
• A third party takes over the institution which then continues as an on-going concern and all students complete their programs as contracted, while recruitment of new students continues.
  
• The SWAT team contracts with the landlord, utility companies, and instructors to allow for a trainout in the existing premises as contracted with no recruitment of new students and ultimate shut down.
  
• The SWAT Team identifies alternate sites (likely at other participating institutions) where subsets of students and instructors can be relocated in order to complete the training and eventually release the instructors.
  
• The SWAT Team identifies other participating institutions that offer similar programs and have seats available, and students are absorbed into the train out institutions existing classrooms.
  
• If the potential participating host institutions are not in a position to provide the trainout at no cost, the SWAT Team would use a tendering process to determine the trainout site, and the host institution would not be allowed to refuse any student for financial resource or any other reasons. The tendering process would adhere to strict conflict of interest guidelines.
  
• The SWAT Team may recommend to the Governing Board that TCAF cover the cost of books, supplies, exams, or student relocation expenses.
  
• If none of the above options are feasible or viable, the SWAT team may recommend to the Governing Board that refunds be issued to the affected students in respect to their out of pocket costs relating to their training program.

• All TCAF participating institutions would be required to obtain a surety bond annually in accordance with a recommended revised bond table that provides most TCAF institutions with a bonding reduction of approximately 60% from current requirements. (Please refer to the spreadsheets posted on the tcaf.ca web site that outline the estimated TCAF premiums, administration fees, and bonding costs for the range of various institution sizes over the first 5 years of TCAF's operation)
  
• In contrast, all non-participating institutions would be required to obtain a surety bond annually based on an amount equal to the institution's maximum level of unearned revenues during the year. A minimum bond requirement would be in place for institutions that report little or no unearned revenue.
  
• The new bonding requirements for participating and non-participating institutions would take effect simultaneously as of TCAF's commencement date.
  
• TCAF would be permitted to make a claim against a closed institution's surety bond to recover some or all of the costs associated with a trainout. To do so, the students being trained out must be able to assign to TCAF, their ability to make claims against the bond, similar to past practice whereby students have assigned their claims over to the trainout institution. Consistent wording regarding such assignments and TCAF coverage will have to be developed for use on student contracts.

• Capping the fund (to be decided in collaboration with the Government).
  
• The treatment of institutions wanting to participate, in the case where the owners have previously owned an institution that has accessed the fund.
  
• The inclusion of private universities for eligibility to participate in TCAF.
  
• TCAF taking over the administration of surety bonds from the Government.