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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EDITOR’S NOTE: Following a series of articles published by the Courier Mail in relation to the City of Logan Charitable Trust, Mayor Jon Raven contacted this masthead to express concerns with some of the coverage of the issue. Mayor Raven wishes to make clear that he has no power to wind up the City of Logan Charitable Trust, and that his concerns were regarding the effectiveness of the Charitable Trust in meeting its goals and whether its continued existence was a good use of ratepayers’ money. Keith Bailey has also contacted this masthead and unreservedly retracted his comments that Cr Raven “abused his position” and “threatened” the board of the trust. Mr Bailey says there was no basis for the statements to be made. He has apologised for the statements.
The mayor of a southside council has threatened to shut down his city’s charitable trust fund, after it was revealed the trust had raised about $1017 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 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.”
Mr 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.
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.
The Australian Securities and Investments Commission require details of directorship changes within 28 days.