Mr President

It is an honour for me, on behalf of my fellow Trustees, to present this report to this 61st session of General Synod/Te Hinota Whanui on the operations of the St John’s College Trust Board and the Te Aute Trust Board.

To do so in this year of celebration of 200 years since the Gospel was preached in Aotearoa is an added pleasure.

Mindful of the significance of this anniversary St John’s Trustees have been pleased, in assocation with Te Kotahitanga, to make a gift to the church in the form of an additional distribution of $50,000 towards educational initiatives at the Marsden Cross at Rangihoua.

We make this gift, to the glory of God, and in recognition of the unique educational resource that this place of pilgrimage represents for both church and nation.

Growing the Trust

The St John’s College Trustees, a number of whom are with me here today, are called to  further God’s mission in the world by providing careful stewardship of the significant endowment that is the St John’s College Trust.

As Synod members will be well aware the Trust was established by Bishop Selywn in 1859 with an initial contribution of 1500 pounds.

Today that legacy has grown to an investment capital of $293 million (excluding the value of the St John’s College site), providing annual income of $11.4 million and generating distributions to beneficiaries across our three tikanga church of $12 million.

Trustees oversee the management of these assets for the benefit not just of the church today but for future generations.

We are the inheritors of those who have gone before  - nga tupuna tuku iho - and whose skill and dedication have made the Trust what it is today.

The size of the Trust is a significant blessing.

It enables us to fund a wide variety of education and ministry development activities in all corners of Aotearoa, New Zealand and Polynesia.

It represents an important buffer against shocks to financial markets such as the recent global financial crisis whose reverberations continue to be felt.

It enables us to take on new responsibilities in response to changing needs such as our assumption of the trusteeship of the Te Aute Trust, about which I will speak further in just a moment.

At the same time the Trust is not immunue from economic change and movements in financial markets.

Today’s environment continues to provide challenges.

Our diversified investment portfolio helps mitigate risks and Trustees maintain a level of reserves to ensure that distributions to beneficiaries in the church can be maintained even in the most difficult of times.

I am proud to report to you that even at the height of the financial crisis the Trust’s funding of education and ministry was not disrupted.

Even today when our our annual disbursable income is less than the annual distribution we have made no change to our level of funding.

Evaluating expenditure

This challenging financial context leads Trustees to exercise prudence in the allocation of assets and also to focus new attention on the quality of our expenditure.

Trustees have been pleased to see the positive changes at St John’s College and the new confidence being displayed by the College’s governors and management.

We are grateful for the role played by the former Commissioner Gail Thomson who continues to work with us as we rebuild Te Aute and Hukarere.

We commend Te Manukura Rev Tony Gerritson and his team for the energy they bring to their roles and St John’s students for their commitment to their studies.

Trustees do remain concerned at the high costs of operating St John’s College both in terms of the size of the operating expenditure ($4.6 million  in 2013, down slightly from $4.9 million in 2012), as well as the current and future costs associated with maintaining a large number of College properties.

Trustees are mindful of their responsibilities for St John’s and the significant value the church derives from a fully-funded, residential seminary, but from a financial viewpoint these costs are unsustainable.

In association with Te Kotahitanga we are undertaking a review of funding at the College, which will hopefully help us identify a more appropriate funding model.

The views of stakeholders will be sought in the coming year before any final decisions are made.

This past year, again in association with Te Kotahitanga, we have initiated the development of a template for measuring the effectiveness in terms of education and mission of the Trust’s funding of other beneficiaries.

We are grateful to those ministry units who have participated in a number of pilot evaluations which have yielded valuable information for Te Kotahitanga and Trustees.

In particular I would like to congratulate the diocese of Polynesia for showing us how wisely and carefully St John’s funding is used in education projects in Fiji.

As faithful stewards we must always ask ourselves how well we are doing:  the further roll out of our evaluation template will assist us in prioritising future expenditure

Managing our assets

In that same vein I should like to draw your attention to the St John’s College Trust’s performance over the last year which has been a significant one.

I am pleased to report that notwithstanding the difficult investment environment we have succeeded in growing the size of the Trust as a result of capital gains.

As you will see on page 7 of our written report, the value of the Trust’s capital has almost returned to the level it was in 2007, prior to the global financial crisis.

This result improves the Trust’s ability to continue the present distribution of

$ 12 million per annum on a sustainable basis.

Graphs on page 6 of our written report illustrate the spread of distributions. 

It will be seen also that Tikanga Maori remains, as it has for many years, the largest beneficiary followed by St John’s College and Tikanga Pakeha and other common life beneficiaries.  Tikanga Pasifika receives a modest amount of funding.

Saving Te Aute and Hukarere

I’d like now to turn to the affairs of the Te Aute Trust. 

I’m conscious that Te Aute was the source of extensive debate and even division at the last meeting of General Synod/Te Hinota Whanui.

I am pleased to stand before you today to confirm that Te Aute and Hukarere have been placed on a much firmer footing and no immediate threat hangs over the schools’ continuing existence.

After a significant due diligence process, extensive consultation with Te Kotahitanga, Te Runanga Whaiti o Te Pihopatanga, and the General Synod Standing Committee, Te Runanga Nui invited the St John’s Trustees to assume the trusteeship of the Te Aute Trust Board.

St John’s Trustees, as individuals, assumed their new trustee roles on 3 December 2013.

Trustees would like to acknowledge the work of former Chairman Robin Hapi and the former Trustees of the Te Aute Trust Board and the efforts these Trustees made in very difficult conditions.

The immediate priority of the new Trustees has been to stabilise the financial position of the Trust and establish new governance structures.

This has been achieved.

A Proprietors’ Board has been established, chaired by my colleague Maui Tangohau, to oversee the operation of the hostels and special character aspects of both  schools.

Immediate expenditures of some $300,000 have been approved to improve the living experience of students and a future investment programme of up to $4 million is in the process of being identified.

A close working relationship has been established with the two Boards of Trustees who are responsible for the schools’ educational achievement.

A partnership has been established with Ngatiwhatuiapiti as the hapu which made the original gift of land to establish Te Aute .

Dr James Graham and Mr Robin Hape attend all Te Aute Trust meetings as Honorary Mana Whenua Advisors.

Trustees have sought to separate issues of debt and commercial operations from the running of the schools.

The debt situation is precarious with $9.5 milllion owed to the BNZ.

The Trust and its advisors are negotiating with the BNZ and progressing the settlement of legal issues concerning the Trust’s rights to certain lands bequeathed to the Trust Board.

I am pleased to report that both Te Aute and Hukarere are in good sprits, rolls are improving and the leadership and students are firmly focused on the future.

A lot of work remains to be done to restore the two schools to their rightful place of significance within the church and community.

As part of this Trustees are committed to building a new chapel at the Hukarere site.

Planning is underway and we hope to open this church in early 2015.

Te Aute and Hukarere are special character schools which are unambiguously Anglican and unambiguously Maori.

As prescribed by Te Runanga Nui, the trusteeship of St John’s Trustees will last for a defined period whereupon we will return these assets to Te Pihopatanga for the appointment of new Trustees.

It has taken our whole three tikanga church to come to the aid of these schools through the St John’s College Trust.

This issue that earlier divided threated to divide this Hinota Whanui, need no longer do so.

Ka pu te ruha, ka hao te rangatahi.

Looking Ahead

I mentioned earlier that the low return environment experienced since the global financial crisis continues to impact on the income returns of the Trust. 

In addition, the Trust’s property portfolio is entering into a period where a number of commercial property leases reach expiration and Trustees are anticipating a period of consequential volatility of and reduction in income.

The Trust is well positioned to meet this (hopefully) short term situation but expects to need to continue to use its reserves to maintain distributions. 

To ensure we can continue to meet the church’s needs we will need to find ways of making the Trust work harder.

You can expect us to continue to review strategies and asset allocations to mitigate risks and to identify new sources of revenue.

You can also expect us to take a close interest in value for money, for mission and ministry, from our funding.

Earlier this year the Trust was successful in selling its remaining 62 residential ground leases realising $30 million.

These assets had proved useful investments over a long period but no longer served their purpose.

Trustees also plan to investigate the conversion of the very valuable piece of land commonly known as ‘Parsons Paddock’ at St John’s College from its current fallow state into an asset that will generate returns for future beneficiaries of the Trust. 

It is for this reason we seek the permission of Synod to be able to lease this and the adjacent parcels of land for a period of greater than 21 years.

Conclusion

It remains for me to thank my fellow Trustees who work hard to protect and advance both Trusts’ interests on a voluntary basis. 

The governance of the two Trusts’ affairs requires a significant commitment of time and effort, and the continued strong performance of the Trust in difficult times is testament to a strong, committed and skilled Board of Trustees.

I want to express my thanks to Kathy Boardman who after 14 years’ service resigned from the Trust at the end of last year.

I am conscious too of the contribution made by my predecessor as Chair, Anne Hinton QC.

My fellow Trustees and I are especially grateful to Grant Hope and his colleagues at Trust Management who advise us with a high degree of expertise and commitment and had made possible the achievements of the Trust over the last year.

We thank Bishop Kito and his fellow members of Te Kotahitanga on whom rely for advice and support in taking forward our role as Trustees.

Lastly I would like to thank you, the members of General Synod/Te Hinota Whanui, for the confidence you have placed in us and I ask for your prayers for our continuing work.

I would like to end these remarks with a note of encouragement to you the members of this General Synod/Te Hinota Whanui.

The church faces many challenges. But we are not without resources to proclaim God’s love to a seeking world.

Thanks to Bishop Selwyn’s foresight and Trustees careful stewardship for well over 150 years the St John’s College Trust stands as a significant taonga for our three tikanga church.

The resolution of the issues around the Te Aute Trust Board, along with progess at the St Stephen’s Trust Board provides Te Pihopatanga with a God-sent opportunity to consider what Maori, Anglican education will look like in the future.

In this jubilee year of celebration may we resolve to continue to build on this significant inheritance and may we use these assets wisely to further God’s mission and the church’s ministry.