The Council meeting on Thursday this week should be of interest to every resident of the region. At stake is over $200million in assets held by Eastland Community Trust on behalf of all Gisborne residents.
ECT Trustees want to change the rules that govern how they are appointed, they want to take the decision making away from Council as the sole decider of who should govern the Trust on behalf of the community.
The Trustees also want to limit the capital due back to GDC to the amount originally provided when ECT was established rather than the capital base that will have been grown by the time the Trust winds up.
And they want to make these big changes, at least one of which appears contrary to the rules under which the Trust was established, very quickly.
The report that Council CEO Lindsay McKenzie has put to Thursday’s meeting suggests Councillors don’t have to ask the community what our preferences are on these matters. He also expects to put new information before Councillors at the meeting on Thursday which the public will not have access to prior to the meeting. Mr McKenzie suggests Councillors take into consideration the views of their constituents, but given the rushed nature of this process, I wonder how those Councillors, who want to consult, could canvas a representative sample of residents in such a short time.
ECT say they want GDC out of the full control of Trustee appointment because it prevents ECT from being exempt from income tax on the profit made by the Trust’s investments. My first problem with this suggestion is that the only evidence presented on this being an accurate assessment of the situation has come from a lawyer acting on behalf of the Trustees. What GDC need to know is whether or not IRD and the Charities Commission will grant the Trust charitable status. The next problem with the proposal, if IRD say ECT can’t be income tax exempt, is whether the less than $1million the Trust would save in tax payments is worth losing democratic control of the Trust for. In a worst case future scenario we could see the Trust assets captured by a small group of ideologically motivated individuals who look after their mates at the expense of the region’s economic and social wellbeing.
ECT are proposing an electoral college structure with two appointments being made by the Trust and two coming from GDC with the fifth coming from the Law Society. They are justifying the need for more ECT membership of the electoral college on the grounds that ‘Trustee skills, acumen and contribution’ are conveyed and considered in the appointment process. I’m not sure why the Chairperson needs to be on the decision-making body, he or she is already able to convey their preferences and needs to the appointment panel under the current structure. Given the demographic imbalance of the Trustees to date, it is hard to see under-represented sectors of our community having a greater chance of being appointed as a Trustee under the proposed regime.
If the Trust did need to change the appointment process to become charitable, and if the benefits outweighed the costs of changing the process, a more effective way to choose Trustees could be through tri-annual elections that could be held at the same time as local authority elections. This would ensure we retain the principle of community control over the Trust.
ECT is the economic nest egg for future generations established with community resources and it needs to remain under community control for community benefit as long as it is in existence.