So below you’ll find the text from the first outline proposal sent to Scottish Canals which should be negotiated through and hopefully come out with something that works for both parties (but especially for us). Katie Hughes requested a simple document that outlined the vision and the trading proposal, she didn’t require any complex detail or business plans at this stage, so that is what she got. The document aims to clarify the idea, outline its benefits and put in place an argument which will hopefully end with a deal in our favour. The main goals in terms of the ‘deal’ from my perspective are as follows:
- Terms which are as long as possible so we have a clear future to plan
- Fees based on a % of moorings fees (rather than a flat fee) to help with our cash-flow
- A % fee as low as possible to reflect the benefits of COMs to SC
I’d be interested in input in terms of how to take negotiations forward and what to aim for and look out for…
The Vision for Community-Owned Moorings
Community-Owned Moorings (COMs) will be a new social enterprise on the canals of Scotland. They are defined as moorings which are under the control of a community-run ‘not for profit’ company. So any boater who has their ‘home’ mooring (whether it is leisure, residential or commercial) at a community-owned mooring location will no longer deal with Scottish Canals (SC) with respect to their moorings. Instead the community-owned company will manage the moorings and collect mooring fees.
The community-run company could enter into a long-term trading agreement with SC and pay a percentage of mooring fees collected from boaters as a fee to SC. It is envisaged that boaters with a mooring at a COM will still deal with SC in terms of licensing, insurance and boat safety regulations (although this is available for negotiation). COMs will be located on land which is either owned or under a long-term lease to the community-run company from SC.
It is proposed to incorporate the community-run company as a Company Limited by Guarantee (CLG) and all profits will be re-invested in the COMs and potentially other projects which benefit the canal system. The COM CLG will be responsible for raising the required capital to create new COMs and have a sustainable business model to run COMs without funding from SC.
The COM CLG will work in partnership with SC to contribute to the vibrancy and quality of life on the Scottish Canals. There are a number of key aims associated with this initiative:
1. Allow boaters to become more active in contributing to the success of the canals
2. Stimulate boat movements and increase the number of active boats on the canals
3. Offer the boating community the opportunity to secure their future on the canals by managing their own moorings with security of tenure through long-term agreements
4. Create a new best-practice model for community-owned moorings which reduces the management burden on Scottish Canals and can be rolled-out elsewhere
5. Generate income which is re-invested in the canals of Scotland
Company Structure and Governance
It is proposed to establish a Company Limited by Guarantee (CLG) registered in Scotland which will will sign up to ‘The Code’: the voluntary code of practice for social enterprise in Scotland (www.se-code.net). An asset lock will be in place and all trading profits will be re-invested for the benefit of the canals (not shareholders) and any disposed assets will be passed on to a social enterprise with similar goals. Further registration as a Community-Interest Company, Scottish Charitable Incorporated Organisation or Charity will be investigated in the future if these structures benefit the aims of the COM CLG.
The COM CLG will be open to membership from anybody in the boating community and decisions will be made democratically through a majority voting procedure. The company’s memorandum and articles will closely define the structure, duties and powers of the business and its code of conduct. Initially the COM CLG will look to the Scottish Canals Boaters Group for its direction.
Proposal for a trading agreement with Scottish Canals
To allow COMs to succeed, it is vital to enter into a robust, long-term and mutually-beneficial trading agreement with Scottish Canals. This trading agreement should reflect the underlying benefits of working in partnership with COM CLG to make COMs a reality:
1. COMs are closely aligned to current Scottish Government policies and will be an excellent example of community empowerment by Scottish Canals
2. COMs will have minimal set-up, administrative and maintenance costs for Scottish Canals
3. COMs trading profits will be re-invested in the Scottish Canals infrastructure
4. COMs will stimulate secondary income for Scottish Canals by increasing the vibrancy of the Scottish Canals and increasing the number of people living, working and playing on the canals
5. COM CLG will bring in significant funding for facilities on the canals which would be otherwise unavailable to Scottish Canals. COM CLG will be investing significant amounts of time, money and other resources into creating new facilities on the canals.
In respect of the above benefits it is proposed to pay a small percentage of moorings income to Scottish Canals. By paying a fee proportional to the company income, it will offer the opportunity for the company to manage its cash-flow which will be vital to the success of the project. It will also ensure a fair return for Scottish Canals’ partnership in the project as the success (and thus income) of the company grows over time. It is likely in early stages that the majority of moorings are visitor moorings as the community tries and tests new moorings and the infrastructure is tweaked to the best design. Therefore it is likely that income (and therefore trading fees) will be low initially and will gradually increase over the duration of the trading agreement.
In addition to the agreement in terms of trading fees, it will probably be necessary for COM CLG to enter into long-term access agreements on Scottish Canals’ land. One current proposed site East of Linlithgow is on land owned by Scottish Canals and it is presumed that other locations will also include land owned by Scottish Canals. To ensure security of tenure and to satisfy funders, COM CLG will require a long-term lease (or licence) to use this land for the agreed purposes of access and mooring of boats. COM CLG would benefit from the longest terms possible for these agreements.
The projected timescales for implementing COMs are as follows:
March 2016: Agreement with Scottish Canals Boaters Group to pursue Community Moorings
April 2016: Outline trading agreement negotiated between SC and COM CLG (to be incorporated)
September 2016: COM sites selected and permissions in place for work to commence
October 2016: Legal agreements in place with SC and resources in place to create first site(s)
Winter 2016/Spring 2017: First COM(s) in place and functional