WANAKA WASTEBUSTERS
CONSULTATION WITH UPPER CLUTHA COMMUNITY
RE RESTRUCTURING
Reasons for Consultation
“Wanaka Wastebusters” is currently structured as an Incorporated Society under the Incorporated Societies Act 1908. While this was an appropriate structure for the fledgling organisation when it was formed in 1999, it is now not an appropriate legal structure for what is a significant trading organisation with associated operational and trading risks and liabilities.
Wanaka Wastebuster’s Executive Committee proposes that the legal structure of the organisation be changed to that of a community owned company under the Companies Act 1993, using a structure similar to the successful structure used for Dunstan Hospital.
This document has been prepared by the Wanaka Wastebuster’s Executive Committee for consultation with the Upper Clutha community on its proposals, with the objective of getting approval for the proposals at organisation’s Annual General Meeting on November 14, 2012.
Preamble
· Wanaka Wastebusters was formed by a group of Wanaka residents in 1999, who saw the need to develop recycling and environmental education in the Upper Clutha.
· The organisation was established as the Upper Clutha Recycling and Environmental Society Inc. under the Incorporated Societies Act of 1908, to be known as “Wanaka Wastebusters”.
· The organisation was based on subscription paying members, and a number of these members were very actively involved in day to day operations – some actually did much of the early recycling collection themselves using their own vehicles and trailers.
· The organisation has grown dramatically since its formation, such that today it is a commercial organisation providing a range of recycling services from its base in Ballantyne Road, and provides recycling and environmental education and consulting services both in the Upper Clutha, and at a national level in New Zealand.
· In its last financial year the organisation had a turnover of some $1.6 million with a payroll of $1 million. Such an operation has significant operational and trading risks.
· The membership of the organisation is generally not now involved in the day to day work of providing the services to the community
· The Incorporated Society structure initially adopted was appropriate in the organisation’s early days when it was member driven, but it is a legal structure meant for member based clubs and societies, not for a significant trading organisations such as Wanaka Wastebusters has developed into. The organisation’s membership varies year-to-year depending on the organisation’s profile - in the 2010-11 financial year there were only 50 members paying a $1 subscription, although the organisation provides services to the entire population of the Upper Clutha.
· Wanaka Wastebuster’s Executive Committee is unanimously of the view that the organisation’s Incorporated Society legal structure is now inappropriate for the type of business that Wanaka Wastebusters has evolved into. The Committee has taken legal advice on the matter which has confirmed the Committee’s views.
· The Executive Committee believes that business needs to be structured as a community owned limited liability company, under the Companies Act 1993, for commercial credibility and to respond to the operational and trading risks inherent in the organisation’s current operations.
· The Executive Committee believes that the community ownership model used by Dunstan Hospital is an appropriate model for use by Wanaka Wastebusters with some fine tuning.
Re structuring Proposal
The Executive Committee’s proposals for restructuring the organisation are as follows:
a) Form a limited liability company to be known as Wanaka Wastebusters Ltd, with the shares in this company to be owned by the Upper Clutha community, through a community trust. This company to commence operations in by the end of 2012
b) Form a new community trust organisation to be known as the Wanaka Wastebusters Trust to hold the ownership of the shares of Wanaka Wastebusters Ltd on behalf of the Upper Clutha Community. This trust to commence operations early in 2013
c) Transfer the business, staff and assets of the Upper Clutha Recycling and Environmental Society Inc to the new company Wanaka Wastebusters Ltd, following approval of these proposals at the AGM of the said Society on November 14, 2012.
d) Wind up the Upper Clutha Recycling and Environmental Society Inc in due course, once the above changes have been effected.
A schematic of the proposed new structure for Wanaka Wastebusters is shown in Figure 1
Discussion
Wanaka Wastebusters Trust
· The purpose of this Trust would be:
o To hold the shares in Wanaka Wasterbusters Ltd (the Company)on behalf of the Upper Clutha community
o To appoint the Directors of the Company
o To monitor the operation of the Company, as its shareholder
o To decide those matters which are the prerogative of the shareholders of the Company
o To represent the community to the Company
· It is proposed that the Trustees would consist of nominees from the following Upper Clutha community groups:
o One nominee from the Wanaka Community Board (preferably a local Board member, not a QLDC Councillor)
o One nominee from the Wanaka Residents Association
o One nominee from the Hawea Community Association
o One nominee from the Wanaka Chamber of Commerce
o Up to two additional Trustees, co-opted by the above Trustees
· The above Trustees would serve three year terms (renewable), subject to their continuing membership of their nominating group and their personal qualification to serve as a Trustee.
· Each year two Trustees would retire in rotation, and if qualified could offer themselves for reappointment by their nominating organisation
· The Trustees would elect their own Chair
· The Trustees to generally meet quarterly to receive quarterly reports from the Company, or as required otherwise, such as to remove or appoint Directors the Company.
· When appointing directors to Wanaka Wastebusters Ltd, the Trustees would be required to run a formal process involving:
o Publicly calling for applicants suitably qualified for appointment as directors
o An interview process, in which the Chair of Wanaka Wastebusters Ltd would participate
o Selection of the best qualified candidate for the appointment
· A Constitution for this organisation is being drafted, but will only be finalised after the approval of the proposals to change the legal structure of Wastebusters.
Wanaka Wastebusters Ltd
· The purpose of this company would be:
o To promote and encourage sustainable communities, zero waste and recycling both within the Upper Clutha community and more widely for the benefit of New Zealand.
o To own and operate a community enterprise which recovers resources for reuse and recycling (including the wholesale and retail trading of recovered materials and products) and to provide a working model of the benefits of community enterprise.
o To provide advisory, consultancy and educational services relating to zero waste and sustainable communities, including recycling and waste minimisation.
o Such other business or activities as approved by the Company’s shareholders from time to time
· The Company would be operated as a not-for-profit organisation
· The Company would not be able to pay dividends
· The Company would not be able to issue shares of any type without the prior approval of the shareholders
· All Directors of the Company would be appointed by the shareholders (Wanaka Wastebusters Trust)
· The Company would decide from time-to-time how many directors are necessary for the governance of the Company, but with a minimum of six.
· Each year two directors would retire in rotation, and if qualified could offer themselves for reappointment by the shareholder
· The Directors would elect their own Chair
· It is not intended that the directors initially be paid for their services, but provision is made in the Constitution for directors be paid at the shareholders discretion, if payment of the directors becomes necessary or appropriate.
· The Board of Directors would prepare and seek the shareholders agreement to a set of “Long Term Guiding Principles” that will constitute a mandate to the Board of Directors from the shareholder, for the strategic planning and direction of the Company’s business. The Guiding Principles to be reviewed three yearly.
· The Board of Directors may delegate the day-to-day management of the Company to a General Manager or Managing Director appointed by the Board of Directors.
· A draft Constitution for this Company has been prepared using paid professsional legal advise, and is available for review on request
Support by Founders of Wanaka Wastebusters
The proposal to restructure Wanaka Wastebusters as set out above under “Restructuring Proposal”, has been discussed with Sally Middleton, Bridget Rennie and Dr Dennis Pezaro who were part of the original group that established Wanaka Wastebusters in 1999.
They have commented that the organisation has grown beyond their original expectations, and they understand and fully support the need for the proposed restructuring.
Support by Upper Clutha Community Organisations
The proposal to restructure Wanaka Wastebusters as set out above under “Restructuring Proposal”, has been discussed with the following Upper Clutha Community organisations, all of whom have confirmed their support for the proposals and their willingness to participate as in the Wanaka Wastebusters Trust as proposed above.
· Wanaka Residents’ Association Inc
· Hawea Community Association Inc
· Wanaka Community Board
· Wanaka Chamber of Commerce (to be confirmed)
Executive Committee
Wanaka Wastebusters
Russell McGeorge
Chairman
Trust comprises nominees from various Community Organisations
Trust appoints the Directors of Wanaka Wastebusters Ltd
FIGURE 1: Schematic of the proposed new structure of Wanaka Wastebusters
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