RECORD OF DECISION OF THE Cobtree Manor Estate Charity Committee
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Decision Made: |
09 March 2011 |
FUNDING PROPOSALS FOR THE MASTER PLAN - COBTREE MANOR PARK
Issue for Decision
To consider the options for the funding of the proposed enhancements and improvements to the Cobtree Manor Estate as detailed in the revised master plan, outline project plan, budget assessment and the related design elements (“the scheme”).
Decision Made
That the Cobtree Manor Estate Charity Committee agrees approves and resolves to pass the following:-
(i) To approach the Charity Commission using either the Charity’s statutory powers under Section 75A of the Charities Act 1993, as amended by the Charities Act 2006, or other appropriate powers, seeking the release of up to £275,000 of the permanent endowment in the following terms:
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That the Committee acting as the Trustee to the registered charity known as “Cobtree Manor Estate” resolves to release from its permanent endowment funds to install a children’s play area within Cobtree Manor Park; such facility being in full compliance with the objects of the charity and seen in its best interests to encourage greater use of the Park by the general public. |
(ii) Should the Charity Commission give its approval for the releasing of part of the permanent endowment as outlined in (i) above, to spend that released sum on completing one part of the scheme; namely the supply and construction of a play area.
(iii) To allocate not less than £ 25,000 per annum of the future yearly revenue stream over a minimum period of ten years to a separate account, which account shall then be used towards the costs of the proposals outlined in the scheme.
(iv) To agree and authorise Officers to discuss further with heritage Lottery Officers, other grant making organisations and the Charity Commission proposals for the future funding of the remainder of the scheme, and to bring a further report or reports to the Committee at the earliest available opportunity.
Reasons for Decision
The trusts governing the Charity’s functions are set out in the lease dated 13 July 1971. Some of those trusts are no longer capable of being implemented: for example, the use of Cobtree Manor House as a residence for Her Majesty’s Judges on circuit or any other distinguished visitors to Maidstone, or the County of Kent.
The trusts which are still relevant to the Charity’s functions are outlined below:
[the Charity] will not use or permit to be used Cobtree Manor Estate or
any parts thereof otherwise than for the benefit of the inhabitants of
Maidstone and other members of the general public in one or all of the
following ways:-
by maintaining the Cobtree Manor Estate as an open space as
defined by the Open Spaces Act 1906 and if [the Charity] think fit providing [at Cobtree Manor Park] facilities for organised games and other sports.
Over time the Charity has received monies from the compulsory sale of land in relation to the building of the M20 motorway and the sale of various properties no longer relevant to the functioning of the charitable trusts.
Those monetary sums have been invested in Charifund holdings and treated as permanent endowment, the combined value currently being £1.39M.
Over the past several years the Charity has had an aspiration to enhance and improve Cobtree Manor Estate for the greater enjoyment, and increased numbers, of visitors to that Park. Those enhancements and improvements are the subject of a further report to the Committee.
The Committee wished to go ahead with the enhancements and improvements proposed under the scheme and in particular of the cost of the supply and installation of the play area, the total cost of that play area to not exceed £250,000.
The legal advice of the Charity’s solicitor is that the enhancements and improvements to Cobtree Manor Park, including the play area, fall within the scope of the trusts set out in the 1971 lease.
However, notwithstanding the advice set out above, the Committee still had to consider whether or not the proposal for the releasing of part of the permanent endowment (not exceeding £250,000) was in the best interests of the Charity. The view of Officers is that such proposals will be in the best interests of the Charity as the scheme will improve the park and most probably lead to increased visitor numbers and enjoyment of Cobtree Manor Park, thus better meeting the principal object of the Charity.
In addition, the financial risks that could result from the partial expenditure of the permanent endowment will, in the opinion of Officers, be minimised by the following proposal:
That is, the loan to the Council will be fully repaid as of 1 April 2011, and
the regular yearly revenue then available to the Committee from all
sources will be approximately £350,000. Of this amount, the projected
expenditure per annum over the next five (5) years is estimated at
£230,000.
The Committee will therefore have available each year an additionalyearly
estimated revenue stream of £120,000. Clearly a percentage of that
revenue stream should be kept available for unexpected maintenance and
repair payments to the Park, but it is anticipated the sum of £25,000 per
year can be put into a separate account over a minimum period of ten
(10) years (designated, for example, as an unrestricted accumulated
income account) and treated in a similar fashion, but not as, permanent
endowment.
The monies held in the unrestricted accumulated income account could then be used as match funding with any lottery bid and bids to other grant making organisations, and in order to fund other elements of the scheme over the next several year. Further use of part of the permanent endowment fund might also be considered with the consent of the Charity Commission. As outlined in the report relating to the Master Plan, those proposals will have to be the subject of future reports to the Committee, and costed out.
The Officers consider that by using part of the permanent endowment now, but also setting aside part of the future revenue stream to another account, the finances of the Charity can be kept fully secure, and future expenditure needs can be met (including any expenditure of an unexpected nature).
Although the provision of the children’s play area will inevitably increase the revenue maintenance costs, the level of revenue income will be sufficient to meet such increase and generate a surplus for implementing future enhancements.
Discussions have been held with the Cobtree Charity Trust Limited and officers from the National Lottery to explore possible contributions from these sources. The outcome of these discussions is still not complete, but it is hoped that the Committee could proceed with the play area and use the cost as matched funding to assist with the implementation of the remainder of the proposed works.
Alternatives considered and why rejected
No alternative course of action is considered appropriate as the Committee cannot proceed to release permanent endowment funds without the consent of the Charity Commission.
Background Papers
None
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Should you be concerned about this decision and wish to call it in, please submit a call in form signed by any two Non-Executive Members to the Head of Change and Scrutiny by: 18 March 2011 |