Update from the Board of Directors

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UPDATE FROM THE BOARD OF DIRECTORS

October 10, 2012

Dear TLC Members and donors,

Your Board of Directors is providing this update for members leading up to our Annual General Meeting being held November 3rd in Victoria because of the urgency of TLC’s situation. It is important we keep you apprised of our on-going efforts to address TLC’s current difficulties. This update builds on information that outlines the transition plan, Phase 1 and 2, in the enclosed Landmark newsletter prepared earlier this fall by staff.

The Land Conservancy of BC is roughly $1 M in arrears for critical, short-term payables that must be addressed immediately. The Directors have, or are negotiating, agreements with Canada Revenue Agency, creditors and employees on repayment arrangements, but we have to raise the funds to meet our commitments.  We have achieved most of Phase 1 of our transition plan, which involves capping debt and cutting operating costs to sustainable levels, based on very conservative revenue estimates. Due to necessary cost reductions, TLC is now being managed by an interim Finance Director and a small handful of staff and support contractors—down from over 50 employees three years ago—which means a vastly reduced capacity to deal with properties, members, donors and other issues.  Directors are filling some gaps with many hours of volunteer time. There are no new acquisitions planned for the immediate future.

 However, VanCity, one of British Columbia’s leading financial institutions in social enterprise, has recently made the following expression of interest “to provide support and assistance to TLC as it works its way through this challenging transition.  We share the fundamental principles of land conservation and restoring confidence in the land trust/conservancy movement in BC.” This support, in conjunction with assistance from other land trust/conservancy organizations, is a critical element of TLC’s transition plan over the next few months. The other critical element of the plan is continuing support and input from our members. We need your support, to make VanCity’s generous offer of assistance work.

What can you do?

1. We need your help and support NOW. We need to pay off the $1M as soon as possible. TLC was started with the first Board members donating $100 each for a total of $500 in start-up capital. In this spirit, one member has stepped forward and donated $500 with the challenge to every member to do the same. We only need half of our members to meet this challenge to eliminate our critical payables. Board members have stepped forward generously too. You are a member because you believe in what TLC has been able to protect and nurture. Member support will be critical to the long-term protection of these properties, whatever future options are taken.

  • Do you have contacts or friends who support what TLC protects and provides? How can we reach them?
  • Do you have any other ideas about how funding can be immediately raised?

 

2. We need your input now, and ask that you complete a short TLC Members’ Survey. Please go to the following web link https://www.surveymonkey.com/s/TLCMemberSurveyOct2012 to complete the survey. If you do not have internet access, phone the office and we will send you a print version for your response. Paper copies will also be available at the AGM. Please get your responses back to us by November 15th.

 The Board and members have to make many decisions at the AGM and over the next few months on how to establish a stronger financial framework, set priorities, determine partnerships and in what capacity TLC can continue to save places. We need guidance from the membership on this.

 3. We need you to come to the AGM and vote on our proposed bylaw amendments. We are proposing bylaw amendments through two Special Resolutions to be presented at the November 3rd Annual General Meeting that will provide more flexibility and ultimately long term protection for properties in our transition plan.

 Thank you for your continued support. The Land Conservancy has made a significant difference in this province in the past 15 years. Let’s continue to work together to make sure TLC has a strong future.

 Respectfully,

 Alastair Craighead, Chair               Nitya Harris                       Mary Sanseverino

Briony Penn, Vice-Chair                  Mel Lehan                           Tom Watson

Gary Holman, Treasurer                 Nicole Mackay                   Todd Wong

France Pugh, Secretary                   Fred Newhouse                              

 

BYLAW AMENDMENTS

[1]SPECIAL RESOLUTION 2: The Board has received differing legal opinions that the mortgages presently in place on TLC properties may or may not be enforceable because they were not approved by the membership of the Society.  So, as a precautionary measure and to provide our mortgage holders with some assurance, a Special Resolution is needed to approve all existing mortgages held by TLC.

PROPOSED MOTION “Be it resolved that all existing mortgages held by TLC are approved by the members of the Society.”

[1] SPECIAL RESOLUTION 1: The full text of Special Resolution 1 is included in the original AGM materials and is a housekeeping matter with regard to Ecological Gifts.

 

SPECIAL RESOLUTION 3: BYLAW AMENDMENT – Transfer of Inalienable Property

TLC’s mandate is the protection, preservation, restoration, beneficial use and management of lands across British Columbia.  Over the past 15 years, many lands that TLC has protected have been transferred to other organizations or agencies (e.g., regional districts), to ensure the best management with covenants attached to the title.  About 50 properties have been retained by TLC and many have been declared inalienable under TLC bylaws, which restrict transfers to other organizations with similar purposes and are able to provide the same or better levels of protection.  However, as we move towards restructuring, TLC needs the flexibility to transfer inalienable properties to appropriate organizations, if necessary.  Such transfers will decrease the risk to the lands from financial instability while reducing TLC’s operating costs.  It will also strengthen the stewardship movement generally by enabling us to work more efficiently with our sister organizations and maximize management efficiencies.

 

PROPOSED MOTION:

“That the Society approve Section 20 of the Bylaw as shown below to allow the transfer of inalienable properties to an organization with similar purposes through a special resolution of the Society.”

Protection of Property

20.01 The Directors may declare a property or an interest in land to be inalienable.

20.02 When a property or an interest in land is declared to be inalienable, the Society will take every measure possible to ensure its protection in perpetuity.

20.03 A property that has been declared inalienable shall be:

(a) protected by a Conservation Covenant under section 219 of The Land Title Act (British Columbia). The Covenant shall be held by one or more organizations independent of the Society and shall, if allowed by the Registrar of Land Titles, prohibit mortgaging and restrict sale; and

(b) protected by adequate insurance.

20.04 A property that has been declared inalienable shall not be:

(a) mortgaged under any circumstances; or

(b) sold unless the Society is being dissolved, and then may be sold only to another society having similar purposes.

20.05 A property that has been declared inalienable may be transferred to a qualified donee that has similar purposes to the Society by a Special Resolution of the Society. TLC shall retain a conservation covenant or reversionary interest on any inalienable property that has been transferred to a qualified donee.

20.06 An interest in land that has been declared inalienable shall not be released or sold.

20.07 An interest in land that has been declared inalienable may be:

(a) transferred or assigned only to a qualified donee that has similar purposes to the Society, provided that the Society retains a reversionary interest in the land and such transfer is approved by a Special Resolution of the Society; or

(b) transferred or assigned only to an organization having similar purposes to the Society, without a Special Resolution of the Society and without a reversionary interest, if the Society is being dissolved.

20.08 The Society will seek to constantly improve the level of protection provided to

inalienable property as new legal mechanisms become available.

20.09 The Society may not remove inalienable status once granted.

 

FINANCIAL SUMMARY 2011/12 AND UPDATE

A detailed management report from our Finance Director will be provided on the TLC website and at our AGM, November 3.  A summary of cash income and expenses, and assets and liabilities is shown below.

As the summary shows, overall operating cash revenues ( donations in kind, transfers) for 2011-12 year ending May 31, 2012 were down from 2010-11, although primarily due to fundraising for Madrona Farm in 2011-12.  Despite significantly reduced operating costs, primarily through staff reduction, TLC’s cash operating expenses exceeded revenues by about $190,000.  The remaining deficit was covered by an interest free, potentially forgivable loan, and the sale of a non-conservation property.

The Board also learned toward the end of the fiscal year that payments to lenders were not being made.  As a result, the Board immediately implemented much more severe cash operating cost reductions in staffing, moving offices to TLC-managed property, and renegotiating loans and mortgages.

As a result of these changes, TLC has reduced its ongoing operating costs from roughly $300,000 per month several years ago, to less than $100,000 today.  In the short term, staff and other cost reductions crystalize liabilities (e.g., employee vacation time) that actually increase cash costs.  Once these adjustment costs have been addressed, TLC will be on much stronger financial ground. 

 However, cost reductions can and likely will create organizational capacity and revenue impacts.  For the first several months of the current fiscal year, average cash revenues (including memberships, donations and earned income), have exceeded $100,000 per month.  However, many of our income earning properties will not be generating revenue until next year, and donations have been declining.  

 The Board is exploring a number of options to generate additional funding and reduce costs, including restructuring of debt and discussions with other like organizations about potential property transfers.  However, our ability to meet even significantly reduced operating costs and to clear up our short term debt, will depend on continued support from our members and other donors.

 

Comparative Summary of Cash Income and Operating Expenses

For Fiscal Years 2011-12 and 2010-11

($’000)

 

 

2011-12

2010-11

Revenues    
  Memberships / Donations

1,788

3,824

  Grants

423

384

  Earned Income (incl. TLCE)

770

492

Total Cash Revenue

3,126

4,700

Costs

 

 

  Wages, Salaries, Contract Staff

1,868

2,566

  Interest, Amortization

542

458

  Office, Property Costs

529

536

  Other

375

377

Total Cash Operating Cost

3,314

3,937

TOTAL NET OPERATING

(188)

763

  

Comparative Statement of Assets and Liabilities

For Fiscal Years 2011-12 and 2010-11

($’000,000)

 

 

2011-12

2010-11

Total Assets

48.0

47.0

Current Liabilities

1.7

1.0

Long Term Liabilities

6.1

5.8

 

Your support at this time is critical. Any gift you make – be it $50, $500, or any other amount – will help TLC move forward with the best plans for the future. By working together, we can continue making a lasting difference for B.C.’s special places.

 

 

By | 2016-10-26T18:38:14+00:00 October 23rd, 2012|Board of Directors|0 Comments

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