Bay of Plenty Community Trust Incorporated

Chair and Trust Manager report

For the year ended 31 March 2013

What a great time to be in the Bay of Plenty! We are delighted to be able to report on an exceptionally positive 12 months for your Community Trust.

In the 12 months to 31 March 2013 BayTrust approved a total of $2,546m in grants (2012 $2,285m) to 118 community organisations including $95,595 in Dillon Scholarships (2012 $143,000) to 53 tertiary students with disabilities.

BayTrust’s Investments returned $17.641m (12%) (2012 $6.846m, 4.8%) over the year, one of the Trust’s best-ever yields and this has enabled it to not only grant the $2.5m referred to above but to maintain its reserving for the effects of inflation and also to add significantly to its Grants Maintenance Reserve (GMR) – the buffer which allows grants to continue even in negative income years. The Trust works to statistically-calculated reserving levels for this buffer and by year end the GMR had reached the lower level (the first time since 2010).

The short-medium term outlook for investments generally is much reduced from previous years (remember when home mortgages were nearly 9% and term deposit rates not much less?) The Trust has therefore had to also reduce its expectations of future income but has committed to granting at least $2m a year.

At year-end actual net Capital was $160.1m, up from $146.9m at 31 March 2012.

Other highlights of the BayTrust year include:

• A further 3-year renewal of the BayTrust/Sport BoP CoachForce programme from 1 July 2013, providing $1,268m towards gaining, training and retaining sports coaches in the Bay.

• Also a further 3-year renewal of the Rotorua-based BayTrust Rescue Helicopter operated by the Philips Search & Rescue Trust, $600,000.

• Funding of the Neighbourhoods of Healthy Homes project in Kawerau along with the Eastern Bay Energy Trust and the KDC. This is a high-engagement, community-led project focused on community enhancement and development through the vehicle of housing improvement. BayTrust has funded $400,000 into this through its innovative Henry Duncan Fund.

• Continued support for Opotiki District Council’s Harbour Development strategy as an impetus for major social and economic development in the Eastern BOP.

• In July 2012 the Trust entered a three-year Fiduciary Management Agreement with Seattle-based Russell Investment Group. This formalised a developing relationship with the firm which has been the Trust’s investment advisor since 1997 and allows the Trust to benefit from more efficient investment implementation and adjustments to global market conditions. At the same time, the Trust entered into a monitoring arrangement with Auckland-based Actuaries Melville Jessup Weaver to provide formal, independent monitoring of the Russell performance.

• The Trust invited Steven Bowman (Conscious-Governance.com) to run one-day Master Classes in Strategic Leadership & Innovation for Community groups in Rotorua and Tauranga and very heavily subsidised the fees so that price would not be a barrier to attendances. In total 126 people from 64 organisations attended the sessions and feedback has indicated they were very well received with some groups implementing exciting changes in their governance practices.

Steve Bowman also facilitated the Trust’s Strategic Planning workshop in February this year. Trustees have now adopted a vibrant new Plan for the next three years concentrating on closer community connections, a broader range of community support mechanisms and a tighter focus on where and how Trust support should be directed.

During the year under review Trustees Mary Dillon (Tauranga) and Peter Blanks (Taupo) retired and Michael Christensen (Tauranga) and Nigel McAdie (Taupo) were appointed to the Board. Both Mary and Peter had served 4 years and Mary had been Chair from September 2010.

Gregg Brown from Rotorua was elected Chair in September 2012 with Tracy Rea (Tauranga) as his Deputy.

We offer our sincere congratulations to all Bay of Plenty community groups and their supporters for their efforts and achievements over the past 12 months and we thank all Trustees and staff for their on-going enthusiasm, energy and commitment to the community through the work of BayTrust.

Greg Brown
Chair

Bruce W. Cronin
Trust Manager

27 June 2013