Logan Mayor’s ultimatum to voluntary board: raise funds or wrap up
Volunteer directors on Logan council’s charity trust have been issued an ultimatum with mayor Jon Raven threatening to axe the body if fundraising efforts did not ‘dramatically’ rise by October.
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The mayor of a southside council has threatened to shut down his city’s charitable trust fund and possibly set up an independent entity headed by his wife, after it was revealed the trust had raised about $1,017 in the past year.
Logan City Council mayor Jon Raven gave the board of the City of Logan Charitable Trust, who are all volunteers, a three-month ultimatum citing concerns over its effectiveness in fundraising.
A report including a breakdown of the Trust’s role and outlining its options for the future including financial implications, will come to the council before November.
The ultimatum has led to questions about the longevity of the trust.
The mayor’s comments came less than two weeks after Mr Raven said he wanted to establish a separate Trust fund, possibly headed by his wife, fellow Logan council officer Alison Liddell, who he married in a “surprise” backyard wedding on June 29.
The proposal to “wrap up” the Trust followed failed calls last month for the council to investigate the role of the mayoress and the legalities of her heading up a Trust.
The role of a mayoress is not defined in the Local Government Act and in Logan, the position is voluntary and unpaid.
The Trust started operating in 2018 and was later restructured after a Crime and Corruption Commission order to ensure it would remain outside direct council control.
The CCC also barred the use of the words “Mayor” and “Mayoress” from its title.
Charitable Trust Board chair Sohana Maharaj and director Keith Bailey dismissed Cr Raven’s comments at a council committee meeting this month.
They told councillors that the Trust was in its formative stages and high revenue from fund raising was premature as a mature corporate governance structure was still being built and board members had only been appointed in February.
The committee heard that the trust had a 12-month fundraising regime in place which would be put in jeopardy under the mayor’s three-month time constraint.
The ultimatum had also put in jeopardy the Trust’s fundraising activities with the board obliged to disclose to all donors the potential of a winding up decision.
If a winding up decision were made, all funds raised by the trust would have to be returned to the community in accordance with the trust’s deed and in line with ATO guidelines.
Under the Corporations Act, any director taking funds knowing that a company was to be wound up would also be breaching their director duties.
Ms Maharaj told this month’s committee meeting that under the council’s own Best Practice Framework for Beneficial Enterprises that the board was required to operate independently.
The council document states: “To ensure independent arms’ length arrangements are observed, the board should not be made up of members of council, such as executive staff or councillors. Directors should be independent and not also fulfil executive management functions at the company.”
Cr Raven questioned the Trust’s effectiveness and blamed a high turnover of board members on stringent mandatory qualifications, which Ms Maharaj told the meeting was incorrect.
She said that directors in their exit meetings had expressed concerns about having to fill the dual role of acting as both director and in management without any council operating funding for managerial roles.
Under the Trust’s recruitment processes, directors must have completed the Australian Institute of Company Directors course or recognised director accreditation training.
The council was advised that recruitment for the board positions was conducted by Logan’s own administrative services office.
Ms Maharaj also explained that the Trust had had conversations with Mrs Raven and board members were happy to “mentor her” before she received the AICD credentials.
The mayor also said the board had not broadly publicised vacant positions and said he knew a number of people who would have applied for a post had they known they were being advertised.
He also said the Trust was merely “doubling up” on services the council already provided at a cheaper cost.
“The reality is that you’re not independent because you’re a beneficial enterprise owned by Logan City Council and receive (up to) $75,000 a year from the council along with admin support and you want operational support too,” he said.
“We don’t need you to take $75,000, take your $20,000 clip off that and then give it out to the community … because we do that every week and we have a whole bunch of corporate structure that makes it easy for us.
“ … What we do need you to do, because you are a charity, is raise money … but you need to be raising a lot more than that ($1017).
“So if the doing (fundraising) doesn’t start by the time this report comes back to council, then I’ll be moving to close down the trust because it’s not a good use of ratepayers’ money.”
Mr Raven said a previous Logan mayoral Trust had raised more than $200,000 on one event and he had raised more than $240,000 during his election campaign which he said was more difficult than asking people to make philanthropic donations for a charity cause.
The plan to potentially dismantle the Trust was opposed by councillor Lisa Bradley who said a charity headed by a mayoress could lead to political interference.
The Australian Securities and Investments Commission require details of directorship changes within 28 days.
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