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1. What exactly are the Articles of Association in the process of being changed to include?

The Articles of Association are currently undergoing changes to incorporate certain provisions. The amended articles will be presented to the Members for approval, along with a summary of the modifications. However, before we can schedule a meeting, we need to obtain agreement from the other members to attend the Annual General Meeting (AGM) or make arrangements for a proxy vote or a similar mechanism. Our legal representatives have been in contact with them since 2021, addressing these matters and following up on their responses.

The current update does not include a change to allow non-resident directors and there is no intention or want for this to ever be the case. However, in the future, such an update may be necessary to enhance the organisation's viability. Currently, we are struggling to recruit residents as directors. It is crucial for the organisation to have the minimum required number of Directors in order to operate effectively. Without a sufficient number of Directors, the facilities would be forced to close, resulting in a loss of income. Therefore, if more residents do not volunteer to serve as Directors in the near future, it is likely that we will need to consider amending the articles to include non-resident directors and compensate them for their time.  

An alternative option would be to enforce a requirement for residents to become Directors. However, this approach could potentially have a negative impact on individuals' ability to sell their property. Prospective buyers may be hesitant to purchase a property if they are aware that there are provisions in place to compel residents to become Directors.

In the meantime, we continue to encourage anyone interested in becoming a Director to reach out to us. It is our intention to involve as many residents as possible in the governance of the organisation while we await the update of the articles.

2. What is the process of becoming a Director and why does it not involve member ‘vote in’?

Becoming a Director of LGM CIC involves a structured process. Member vote for appointment is not required where there are open seats and we do not have multiple residents expressing an interest that exceeds our quota. The process begins by expressing interest to the Community Development Manager (CDM), who serves as the primary point of contact. The CDM will provide detailed information and guidance to prospective Directors. It is important to note that the selection of Directors is not solely at the discretion of the CDM. Instead, the residents of LGM CIC have control over the appointment of Directors, as they volunteer themselves for the role.

In situations where the number of applicants exceeds the available Director seats, temporary measures such as shadow seats may be implemented. These shadow seats serve as interim positions until the articles of association are amended to accommodate an increased number of resident board seats. If we are ever in a position where there are more people wanting to become directors than seats available (or the number of shadow seats has become unmanageable), one solution would be to set up a vote.

It is important to note that residents who are appointed as Directors are expected to attend quarterly meetings and undergo approximately 12 hours of training. This position is unpaid.

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3. What is being done to alleviate growing anger and dissatisfaction amongst residents towards the LGM CIC/CDM, caused by a complete lack of consultation or proper (two-way) engagement?   

We understand that there may be some residents who have expressed dissatisfaction with LGM CIC or the CDM, but it is important to note that this represents less than 3% of households. Nonetheless, we are actively taking steps to improve consultation and meaningful engagement with residents in order to address their concerns.

A significant avenue for residents to actively participate in shaping the development's future direction is through Resident Directorships, which allow for direct involvement in the organisation's management. It is important to clarify that day-to-day management responsibilities do not fall under the purview of residents (members), and there are certain decisions in which members cannot be directly involved.

In order to ensure transparency and accountability, an Annual General Meeting (AGM) will be held annually, where the income accounts are published on Companies House and the service charge accounts are presented by the management company. These reporting procedures were explicitly outlined in the covenants and articles at the time of property purchase.

In May, a survey was distributed to all service users, providing an opportunity for input and influence regarding future investments in the site. This survey is not limited to residents alone, as the facilities benefit the broader community as well. This inclusive approach aligns with the planning requirements that we are bound to, as conveyed during the property purchase process, emphasising that the funding for community facilities would be exclusively covered by residents through the service charge. To support the ongoing operational costs of the facilities, we have initiated discussions with the Parish council to seek additional funding.

Residents have the option to schedule meetings with the Estate Manager, Simon, on most Wednesday afternoons. Additionally, small group meetings continue to be offered to residents, aiming to provide a valuable forum for discussion. While we apologise if these meetings have not met your expectations, it is important to acknowledge that many residents have found them to be beneficial in addressing their concerns.

4. What percentage/amount of the LGM CIC income is going to be used to offset the service charge residents pay AND what is the £100,000 due to be returned by Trinity in June going to be spent/used on?

We do not have information regarding a sum of £100,000 from Trinity. Trinity has not yet provided the final breakdown of the service charge accounts for 2022. Once the accounts are finalised, it will be determined if there is any positive balance to be returned to DMG.

For the year 2022, we anticipate that £16,500 of income will be returned to offset the service charge. This is in addition to £53,000 income allocated to fund the replacement of the playpark in Beadsman Crescent, which failed its health and safety inspection. The replacement of the playpark is a requirement under the planning obligations that we are obligated to fulfil. The total income allocated for these purposes in 2022 amounts to £69,500.

If residents are interested in participating in the day-to-day management of the company, the recommended avenue is to become a director. Our organisation is not structured as a rule by committee. If members do not become directors, their involvement is primarily limited to the Annual General Meeting (AGM). Member approval is only reserved for specific decisions as outlined in the Articles of Association.

The investment made in the site is driven by the specific requirements of the facilities. The increase in income is a direct outcome of strategic investments made in the buildings, aimed at ensuring their suitability for use and enhancing their appeal as rental venues. This investment was particularly crucial to capitalise on income opportunities, considering the financial losses incurred due to the restrictive measures imposed during the Covid-19 pandemic. It is important to note that a reduction in income, which may consequently lead to a reduction in community services, could potentially have a negative impact on property prices. The availability and quality of community services often contribute to the desirability and value of properties. Therefore, any significant decrease in community services could potentially affect property prices in an adverse manner.

Leasehold properties have always been governed by a separate contractual agreement and are not within the jurisdiction of LGM CIC. Initially, the developer appointed Trinity to manage both the freehold and leasehold properties. However, due to concerns related to the management of service charge funds, LGM CIC made the decision to terminate its partnership with Trinity for the freehold elements that were within our control. In cases where Trinity has not reduced their fees for the leasehold properties, it is advisable for leaseholders to address this matter directly with Trinity. To address concerns with the leasehold management company, leaseholders are encouraged to consider organising themselves into a Residents Association. By collectively working together, leaseholders can more effectively address and manage their concerns. DMG has expressed a willingness to explore assuming responsibility for the leasehold properties, however, it is important for all leaseholders to reach a consensus and have a clear understanding of the process and implications involved. Any decision to transfer management responsibilities should be carefully considered, taking into account the legal and practical implications for all parties involved.

5. Why is the Board unwilling to justify the increases in the LGM CIC fee that makes up the second biggest expense to residents on the Service charge?

The provision of high-quality facilities necessitates the employment of dedicated staff members who are responsible for their day-to-day operations. As the output and usage of these facilities have increased over time, the associated staff costs have naturally risen in alignment with the demands placed upon them.

To ensure fairness and equity, salary reviews were conducted in accordance with industry standards and in comparison to similar positions with equivalent roles and responsibilities. The objective was to establish competitive and appropriate compensation for our staff members, thus attracting and retaining talented individuals who play a crucial role in enhancing the facilities at Leybourne Chase.

The Board has complete confidence in the capabilities and dedication of our staff, and we would like to express our gratitude for their tireless efforts in improving and maintaining the facilities. Their commitment contributes significantly to the overall experience and satisfaction of the residents in Leybourne Chase.

6. What research has been undertaken by the LGM CIC to ensure that the proposal of de-parishing from Leybourne Parish Council is in the best interest for Leybourne Chase residents?

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LGM CIC has acknowledged the concerns expressed by residents of Leybourne Chase regarding the dual charges they face due to their current parish obligations. It is important to note that the decision to de-parish from Leybourne Parish Council ultimately lies with the residents themselves, and it is not within the remit of LGM CIC or the CDM to make this determination.

In response to residents' frustrations, LGM CIC has provided a platform for residents to voice their opinions and concerns. This feedback will be conveyed to the Borough council on behalf of the residents. To gain a comprehensive understanding of the de-parishing process and explore alternative options, we recommend referring to the government-issued white paper that outlines the concept and provides information on available choices and the associated procedures. This white paper was shared with the original post seeking residents' input on this matter.

It is important to highlight that residents of Leybourne Chase contribute a significant amount to the parish precept. The recently elected parish council, as of May 2023, will be reviewing the contributions that can be offered to Leybourne Chase and exploring ways to collaborate more closely with us to better meet the needs of the residents. This review aims to address the concerns raised and seek mutually beneficial solutions.

7. What is being done about the rising number of complaints you are receiving against the Community Development Manager’s misconduct and pattern of aggression towards residents?

We understand your concerns regarding the complaints made against the Community Development Manager (CDM). However, we must provide an objective response based on the information available to us.

We do not agree with the characterisation of the CDM's behaviour as misconduct or displaying a pattern of aggression towards residents. Our assessment has shown that the CDM has been working diligently despite facing significant hostility from some residents.

All complaints received have been duly addressed. Where necessary, we have sought external HR and legal services for advice and independent investigation. After careful evaluation, of each complaint, none have been upheld. We aim to ensure that all communication channels promote courteous behaviour, and any posts or emails containing gifs or attempts to offend the CDM have been deemed irrelevant and subsequently removed.

To close the Open Letter, a list of requests residents raised was provided. There was a demand that these are voted on at the upcoming AGM. These are listed below along with responses.

In order to propose the items as resolutions for the upcoming AGM, it is necessary to have the required number of signatures from members (majority). Please ensure that each signature includes the name and address of the member. Once you have collected the signatures and prepared the proposed resolutions, kindly submit them to us for review. It is important to note that only one member per household is eligible to vote on behalf of their household. 

Preliminary responses to the requests raised during the meeting are as follows:

1) 50% of LGM CIC income to be used to offset resident service fees every year without exception:

This request may potentially breach the block on dividends within the articles. We will consult our lawyers to review the articles and provide advice accordingly. However, LGM CIC can and aims to use income to offset the service charge costs but the amount must vary each year based on circumstance.

2) Any projects or expenditures amounting to more than £10,000 should involve a period of resident consultation before going ahead:

This request goes against the current setup of the organisation. Implementing such consultation would be costly and time-consuming, potentially delaying necessary works on site. Residents who wish to have a greater involvement in approving expenditures are encouraged to volunteer as resident directors.

3) CDM salary to be capped and reviewed due to current inflated status:

The salary of the CDM is not within the remit of the Members. Residents who wish to have a greater involvement in salary decisions and approving expenditure are encouraged to volunteer as resident directors.

4) LGM CIC Board seats only to be open to residents:

To clarify, the stability of the organisation is a priority, and there is no intention to change the Articles of Association to allow non-resident directors unless it becomes absolutely necessary (we hope this never is the case). The focus is on encouraging more residents to step up and volunteer as directors. In the unlikely event that the organisation does not have the minimum required number of directors and residents are not coming forward to fill those positions, we may be forced to consider temporarily seeking the services of non-resident directors. Any such necessary steps would require approval from the members.

5) Current and future Directors to be voted in or out by members - not just by the Board:

Voting for directors will be required once the number of directors exceeds the available seats or the ability to facilitate as shadow directors. Residents are encouraged to express their interest in becoming directors.

6) Minutes of all Directors meetings to be published on the LGM CIC website (with redacted information where necessary to protect sensitive or personal data):

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We aim to publish future minutes and may also consider adding past minutes with redacted information for data protection purposes.

7) LGM CIC full income accounts to be published and sent out to residents along with the service charge budgets each year:

The requirement to publish income accounts has already been in place, and they will be prepared and filed at Companies House by September each year. Residents and the public can access these accounts once published.

8) Bigger concessions offered to residents wishing to hire the LGM CIC facilities:

Our facilities are very popular. Providing bigger concessions for residents may impact the income generated by the facilities providing less available money to reinvest or use to offset service charges (as is the plan going forward). It is important to balance revenue generation with the needs of the community.

We are writing further to our letter earlier this year to update you on a few projects which are underway.

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