1. How are you dealing with the $1.2 million TLC owes in short term arrears?
We have reduced operating costs to a third of past costs to ensure we aren’t adding to short term debt, and we are in discussions with employees, lenders and some suppliers to develop a plan to satisfactorily resolve their arrears.
We have a purchase offer on our lone non-conservation property which when it completes, will cover the CRA portion of the arrears and reduce overall TLC debt.
We are arranging some short term loans that can be fully secured by a substantial bequest which at some point in the future will accrue to TLC.
We are exploring arrangements on several TLC properties to operate them on a more stand-alone, entrepreneurial basis. If successful, this model will be considered for other TLC properties.
We are also exploring the transfer of several properties to appropriate equivalent organizations who are better set up to manage our properties. We have been successful with such transfers in the past.
We are participating in a Vancity-led process to develop a strategy for dealing with the short term funding issue as well as a longer term business plan.
2. What’s the plan to deal with the $7 million in longer term debt?
Some comments above also apply here.
It would be ideal to have no debt at all, but TLC can sustain the carrying costs on some long term debt as part of a viable cost structure.
We are participating in a Vancity-led process to develop a strategy for dealing with the short term funding issue as well as a longer term business plan.
3. Why should I donate to TLC (and not another conservancy organization)?
TLC plays a unique role, particularly at the regional and local level, that no other conservation organization plays. No other organization would have saved Sooke Potholes or will aim to save the eastern part of Sooke Potholes in the future.
We’re in a process of identifying and doing more of what we’re good at.
TLC strongly supports the work of other conservation organizations and frequently partners with them to protect precious natural landscapes. We hope that donors judge conservation organizations and individual projects on their own merits, and that they are not mutually exclusive.
4. How do you intend to pay the employees who are owed hundreds of thousands of dollars?
The TLC Board recognizes that we have a special, ethical and legal obligation to deal with employee arrears. We are having discussions with employees to develop a plan to satisfactorily resolve their arrears in an equitable manner.
Right now, the TLC Board is focused on stabilizing and strengthening our financial viability, as outlined above. This will allow us to better resolve our employee and other arrears.
The Vancity-led process will develop a strategy for dealing with the short term funding issue as well as a longer term business plan.
5. How can the organization continue with staff having been decimated from 50 to 6?
We are in a transition phase, and are hoping to increase staffing in the future once we have ensured the financial viability of the organization.
We are also looking for ways to focus more on what TLC does best and most efficiently.
We are now a working board, and the Vancity-led process will develop a strategy for dealing with the short term funding issue as well as a longer-term business plan.
6. Are you going to sell properties to deal with the financial situation?
We have already sold one non-conservation property and have a purchase offer on another. If the more recent purchase offer completes, part of our short term arrears will be eliminated.
We can explore land transfers through the Vancity process. TLC has always transferred properties to conservation buyers, but what is important to keep in mind is that any property that TLC transfers will always be protected for the purpose for which it was originally purchased.
7. Why did it take so long to figure out the issue? What is wrong with the financial people at TLC that the financial situation became so dire?
We identified serious issues three years ago. Since then we have:
• Dramatically reduced costs and downsized in an efficient and expedient manner
• Hired a major financial management firm to do a comprehensive risk analysis and follow up on their recommendations;
• Created a direct line of communication between our CFO and Board
8. What’s your intention with Madrona Farms (and other properties awaiting covenants)?
TLC is in a short term financial situation and at a place in its evolution where we must consider property transfers to like organizations and qualified donees as an option. This both reduces our ongoing overhead and ensures the better management of these properties. No properties will be transferred unless a covenant is registered, with one possible exception; should Parks Canada express an interest to take on a property, they require that a property not have a covenant on it. The Vancity process may identify such properties for transfer and the Board will consider any recommendations from this process, at that time.
It is important to realise that all properties are protected under provincial legislation because of the Charitable Purposes Preservation Act. These properties were donated for preservation purposes and that cannot change. One of the legal options being explored within the Act is that a property, on which a covenant is registered, might be sold into the private sector, since the purposes for which that property was intended would still be preserved. At this time the Board is not considering this kind of a sale although it has been used frequently in the past by many other land trusts internationally including the New Zealand National Trust.
What is a non conservation property?
Thanks for your comment Carole.
Non conservation properties are properties with no conservation value, given to us for the purposes of selling and deriving revenue, such as the Squamish gravel pit or the Ayum Creek suburban house — both of which have been used by TLC as saleable assets.
I have been a member of TLC for many years and over the years I have been impressed with what has TLC has accomplished. However, I have always been concerned with the somewhat cavalier approach as to how things will be paid for, whether it be mortgages, wages and property upkeep cost. etc. The ‘something will turn up’ approach simply has and will not work and I hope that the new operating plans include not accepting additional property donations or making property purchases unless an iron clad plan is in place to cover their individual carrying costs. The U.K. National Trust learnt this lesson the hard way.
I look forward to a long and ongoing association with TLC
Ian
Thank you for your comment Ian!
In conjunction with a team of consultants convened by Vancity, we are reviewing our entire inventory of properties and covenants to assess the best ownership/management structure. Our emphasis is to find the best and most efficient form of management, which (when there is capacity for it) is local groups who are on the ground and committed to that place. In the meantime, we are reviewing our future policy on what properties will be acquired and the best management model. We are looking at a range of options from only accepting covenants and properties that come with an adequate endowment to using the New Zealand National Trust model which is simply a monitoring agency of conservation covenants with an annual fee and/or national endowment attached. There are entrepreneurial models, volunteer-models and mixes of all the above. We’d love as much input from members into this process—which will probably take a year to work through.