Pleas­ing signs for trust fi­nances

Kapi-Mana News - - NEWS - By SI­MON ED­WARDS

Some pos­i­tives, but must do bet­ter.

That was the flavour of dis­cus­sions at the an­nual meet­ing of the Hutt Mana Char­i­ta­ble Trust on Fe­bru­ary 3.

At what is be­com­ing a stan­dard pal­try turnout for the an­nual meet­ings – long-time fol­low­ers of trust af­fairs John Wat­son ( of Ti­tahi Bay) and Bill Clegg, and just three or four other mem­bers of the pub­lic – trustees out­lined the rea­sons be­hind a deficit of $1.2 mil­lion at June 30, 2010.

Ian Hutch­ings, who was re­elected trust chair­man, noted the awk­ward­ness that most of the trustees at the top ta­ble had not been around for the 12-month pe­riod to June 30 be­ing re­ported on.

Only Mr Hutch­ings and John Gwilliam sur­vived the vot­ers’ ver­dict last Oc­to­ber.

John Ter­ris, John Burke and David Og­den were voted out and Prue Lamason, Ken La­ban and Sarah Dow were the newly elected trustees.

The trust was set up af­ter the carve-up of power board as­sets and a pay­out to lo­cal elec­tric­ity con­sumers.

But $30m was kept to back a trust fund­ing en­ergy-ef­fi­ciency projects and mak­ing an­nual grants to com­mu­nity groups in Hutt Val­ley, Porirua and north Welling­ton.

In 2008-09, like many in­vest­ment funds, the trust’s cap­i­tal took a king hit. The global fi­nan­cial melt­down saw the trust’s cap­i­tal lose $8.24 mil­lion.

In the year to June 30, to­tal cap­i­tal value re­duced by a fur­ther $ 316,323 to $ 33.8 mil­lion, al­though in­vest­ments in­creased in value by $936,902.

Mr Hutch­ings said in the seven months since then, in­vest­ments have ‘‘ slowly but steadily’’ shown im­prove­ment ( to­tal value now stands at around $35.6m).

‘‘It’s hard to say whether we’re in the midst of a re­cov­ery, but there are some pleas­ing signs.’’

A pos­i­tive for com­mu­nity groups fac­ing lean times is that in­ter­est and div­i­dend im­prove­ments are such that the trust in­tends re­sum­ing two grants rounds this year of $300,000 each. In 2009-10 it only dis­trib­uted a to­tal of $372,084 to lo­cal clubs, char­i­ties and help agen­cies.

( Ap­pli­ca­tions for the next grants round close Fe­bru­ary 25. Go to to get de­tails and ap­pli­ca­tion forms.)

In 2009-10 the trust also spent $ 497,422 work­ing with the En­ergy Ef­fi­ciency and Con­ser­va­tion Au­thor­ity and oth­ers to retro­fit in­su­la­tion and other en­ergy-ef­fi­ciency mea­sures in homes of those on low in­comes.

The losses last year are due to the trust’s in­vest­ments in Smartlinx3 and En­ergy Smart, a Lower Hutt-based in­su­la­tion in­stalling com­pany.

The $825,000 the trust has put into Smartlinx3 is now val­ued at just $100,000. Mr Hutch­ings said the city coun­cils-backed broad­band com­pany had been ‘‘over­taken’’ by chang­ing events and the chas­ing of Gov­ern­ment ul­tra-fast broad­band ( UFB) roll­out money by ‘‘multi-mil­lion dol­lar big­ger com­pa­nies’’.

Mr Hutch­ings said there is a pos­si­bil­ity of re­coup­ing some of the loss as some of Smartlinx3’s as­sets may be ab­sorbed by one of the suc­cess­ful UFB providers.

‘‘How much, and when, we just don’t know.

‘‘I wouldn’t say there’s light at the end of the tun­nel . . . but a glim­mer of light.’’

Mr Gwilliam said the trust has found lack of in­for­ma­tion from Smartlinx3 as ‘‘frus­trat­ing’’ as the share­hold­ing coun­cils and pub­lic, but said re­cently there has been a bet­ter flow of com­mu­ni­ca­tion from the com­pany.

As for the trust-owned En­ergy Smart, its turnover in­creased to a healthy $13.6m in 2009-10 – but it still made a loss of some $750,000.

Mr Hutch­ings told us later that the ‘‘guts’’ of the loss was the theft of stock dur­ing the year to June 30. Po­lice in­ves­ti­gated, but con­cluded there was in­suf­fi­cient prov­able ev­i­dence to suc­cess­fully pur­sue a court case.

Var­i­ous changes in staff for a va­ri­ety of rea­sons – plus much tighter con­trols and prac­tices around in­ven­tory – has given trustees con­fi­dence there won’t be a re­peat of the prob­lem.

Two new direc­tors, Pat Waite and Vaughan Ren­nder, also bring a great deal of busi­ness ex­pe­ri­ence.

En­ergy Smart has only paid two div­i­dends since it was pur­chased by the trust in 2007.

Mr Hutch­ings agrees this is un­ac­cept­able and that the pre­vi­ous ex­cuse that money is be­ing rein­vested to build the com­pany’s ca­pa­bil­ity is wear­ing thin.

‘‘We need to make sure we clip the ticket on it . . . that’s the pur­pose of own­ing a com­pany.’’

Trustees voted to ac­cept a new sys­tem of re­mu­ner­a­tion, mir­ror­ing the prac­tice by most coun­cils to pay a to­tal base salary, and not a salary plus meet­ing fees.

Dur­ing the year, prod­ded by for­mer trustee John Ter­ris, Crown Law gave ad­vice to the trust that the ba­sis on which it was pay­ing some meet­ing fees was un­clear.

The new sys­tem will see to­tal re­mu­ner­a­tion for the five trustees capped at $105,000 – an av­er­age of the last three years’ fees. It will be shared ac­cord­ing to how trustees view work­loads.

For­mer trust chair­man Jeff Bur­kett crit­i­cised the ap­proach as ‘‘se­cret squir­rel’’ stuff and said at least coun­cil meet­ings are held in the open and peo­ple can see who put in work.

Trustees’ meet­ings are not open to the pub­lic, but Mr Hutch­ings said, in what is a fairly small trust, it will be abun­dantly clear if some­one is tak­ing the money and not con­tribut­ing at each meet­ing.

He added that there is a new pol­icy that mem­bers of the pub­lic have the right to make com­ments on trust af­fairs at the start of each monthly meet­ing.

Su­mati Govind, who asked a se­ries of per­cep­tive ques­tions dur­ing the an­nual meet­ing, said she is a trustee of a large su­per­an­nu­a­tion fund with in­vest­ments of more than $100 mil­lion, yet she is paid only $2500 in an­nual fees.

Hutt Mana trustees’ re­mu­ner­a­tion ranges from $18,000 to $28,000.

An­other on the ‘‘ must do bet­ter front’’ was the fact that the trust’s ac­counts had not been fi­nalised and au­dited un­til more than six months af­ter the fi­nan­cial year in ques­tion.

This meant there was no an­nual re­port ac­counts for peo­ple to read un­til a day or two be­fore the an­nual meet­ing.

Mr Hutch­ings pledged a bet­ter per­for­mance on this, with a strict timetable set to get fi­nan­cial re­ports to the au­di­tor.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.