} Silverton Community Hall Trust
Silverton Community Hall Trust
Financial Report and Accounts to 31 May 2014
1. Financial Headlines
2014 2013
Turnover 21,057 25,683
Operating Income 13,357 14,576
Operating Expenses 12,399 11,954
Operating Surplus 958 2,622
Other Income 7,699 11,106
Extraordinary Expenditure 1,548 7,451
Surplus Income Before Provisions 7,109 6,277
Provisions Recovered Nil 1,677
2. Results and Comparisons
I am able to report a satisfactory year for Silverton Community Hall Trust in which surplus income increased by 13% to £7,109. However, operating income generated by letting the hall actually fell by £1,219 to £13,357; a drop of just over 8%, the result of a number of regular bookings being discontinued during the year. The fuller effect of this downturn will be felt in 2014-15. At the same time, operating costs continue to rise, up by a net £444 to £12,399 – an increase of 3.7%. As a result, operating surplus, the measure of the Trust’s operating efficiency, fell from £2,622 to £958.
Income from the monthly markets held up well at £1,563, a fall of 4% in what proved to be very difficult trading conditions. The Trust was once again a beneficiary of Silverton Street Market and the trustees remain grateful to the Street Market committee for their continuing support. In 2012 an extension was added to the adjoining retail unit resulting in a proportionate increase in rental income and this year the Trust has benefitted from a full year’s rental income, up from £5,460 to £5,712.
Bank interest rates remain minimal for the sixth consecutive year.
The trustees continue to make improvements to the facilities, this year adding disabled ramps, bollards and a cycle rack in the car park, and replacing the sink and water heater in the small hall at a total cost of £1,548.
The surplus before extraordinary items was £8,658 and after meeting extraordinary expenditure, a surplus of £7,109 had been retained.
Fig.1. How Each Pound Was Earned
Fig.2. How Each Pound Was Spent
3. Letting the Hall
Use of the hall fell for the first time in several years. Bookings in the Millennium Hall were down by 7.5% with 1,285 hours let compared with 1,390 during the previous twelve months. Occupancy fell from 27.3% last year to 24.7%, and to 25.9% when unremunerated use is included. Bookings in the Dorothy Grainger Room were down by almost 21% with 778 hours let compared with 983 during the previous year. Occupancy fell from 19.3% to 15.25%, and to 16.67% when unremunerated use is included. The overall remunerated occupancy rate was 20.25%, down from 23.3% last year, and total occupancy fell from 24.3% to 21.3%. This still represents a high level of use for a village hall complex offering twenty-eight hours of availability per day and compares well with usage at other local halls. As a result of this downturn in bookings, income from letting the hall fell by 8% to £13,357. The full effect of this lost business is likely to be felt next year.
Fig.3. Occupancy Broken Down by Activity
The average hourly hire fee was £6.47, marginally up on last year. The scale of fees was last reviewed in 2011 and is considered to be competitive when compared with other village halls of this standard. It is available for inspection at the hall or by visiting the website www.silvertonhall.com
4. Rental Unit
Rent from the adjoining rental unit, currently used as a hairdressing salon, is subject to a three-yearly review and was revised to £4,200 from 1 June 2011. The rent is due for review this year. In 2012 an extension was added to the retail unit with proportionate increase in rent. This year has seen the first full year’s increased rental receipts, up from £5,460 to £5,712.
5. Grants and Donations
As in earlier years, the Trust has been fortunate to have been a beneficiary of the annual Silverton Street Market and this year was granted £1,000 as its share of the funds generated by this popular event.. The trustees voted again this year to redirect the grant to Silverton Parish Council to help meet the cost of the Jubilee Garden. The trustees were asked to pay £400 in advance of the grant being received, in order to purchase a bench, and this sum was paid during the previous financial year. The remaining £600 was paid in October 2013 with the balance of the grant being retained. The trustees remain grateful to the Street Market committee for their continuing support.
6. Monthly Markets
The trustees hold an indoor market in the hall on the first Saturday of each month. Attendance at the market has been falling steadily over the past few years and stallholder numbers have been declining as a result. This year the market raised £1,563, down by 4%. However, stall bookings, the main source of market revenue, are down by over 26% despite the introduction of a stallholder loyalty discount scheme. The future of the market is currently under consideration.
7. Operating Costs
Net operating costs rose by 3.7% to £12,399, an increase of more than double the rate of UK inflation over the year. However, the net figure contains a number of significant increases and reductions in individual costs.
7.1 Cleaning and Hygiene
Having been without a contract cleaner for several months, a new contract was put in place in October 2013 at a higher monthly rate. As a result, our contract cleaning costs rose by almost 44% to £1,574. We have also uplifted the level of service under our hygiene contract and had carpet cleaning carried out. As a result, our total cleaning and hygiene costs have risen by just over 36% to £2,325. A further new cleaning contract will take effect from June 2014.
7.2 Routine Maintenance
Routine maintenance is the repair or replacement of breakages and damages as and when they occur and, therefore, the spend can vary significantly from year to year. The winter of 2013-14 was exceptionally wet and stormy and £877 had to be spent repairing various dampness-related problems. Further damage caused by rainwater ingress in the foyer has still to be remedied. £716 was incurred rebuilding part of the boundary wall and a further £120 dealing with a plumbing problem in the toilets. In total, maintenance spend rose by 43% to £2,426.
7.3 Utility Bills
Electricity continues to be our largest cost. The building is all-electric and although we mitigate the ever-rising price of energy by entering into fixed-term contracts with our supplier, we have little control over consumption. Hirers are not charged directly for the energy they consume and, thus, have little incentive to control usage. We, therefore, experience a direct correlation between weather conditions and consumption. The fitting of time switches to the heating circuits in the main hall has been of benefit.
Our previous contract at 10.56p per kWh expired in February 2014. In August 2013 we entered into a new contract fixing prices at 12.2157p per kWh effective from 1 March 2014 until 29 February 2016. A mild winter in 2013-14 saw consumption drop to 17,055 kWh and electricity costs fall by 16.25% to £2,428.
Water and sewage prices have, for many years, increased significantly above the rate of inflation. This year our water and sewage charges rose by 9.5% to £1,179, while our consumption actually fell by almost 7% from 202 cubic meters last year to 188 cubic meters this year. This continues to be offset by a charge-back to our rental unit tenant, currently at the rate of £216 per annum, although this does not reflect the full cost of water consumed in the rental unit. Our net water costs fell by £113 to £963.
7.4 Administration
Administration costs have been reduced by 18.7% to £1,555. The honorarium paid to the booking clerk has been held at the same figure for some years. The cost of communicating with our customers has fallen by almost £250 to £187, largely due to closing our PO Box. Whilst advertising costs have risen, we did not pay a subscription to Community Council of Devon due to problems with their banking facilities. Having been obliged to pay a backdated increase in our music licenses last year, the cost of these have fallen by £135 to £350. The lotteries license has been taken over by another local organization.
7.5 Insurance
In June 2013 the trustees took the decision to renew the three-year agreement with our brokers fixing our insurance rates at a discounted premium for the duration of the agreement, subject to inflation-linked increases in the level of cover. This year our premium rose by 1.8% in line with building costs but it was discovered during the course of the year that the dimensions of the building had been incorrectly stated when the policy was originally taken out. As a result we were obliged to pay an additional premium of £170 to rectify this error, bringing our total insurance premium to £1,229.
7.6 Health and Safety
The cost of testing fire equipment saw no increase this year, no electrical systems test was required, and the small appliances have not been tested. However, our fire extinguishers became time-expired this year and have all been replaced at a cost of £204 which, together with sundry items, brought the health and safety spend to £322, down by £268 from last year.
7.7 Depreciation
See Section 9 on fixed assets, capital expenditure and depreciation.
Fig.4 Breakdown of Operating Costs
8. Extraordinary Expenditure
Extraordinary expenditure relates to planned maintenance and improvements which have been undertaken in order to improve the hall. This year the trustees upgraded the car park with new bollards, disabled ramp, re-aligned parking bays and cycle racks, and the sink and water heater in the tea bar were replaced at a total cost of £1,548.
9. Capital Expenditure, Fixed Assets and Depreciation
Expenditure on new equipment this year totalled £1,194 of which £1,128 was spent on new kitchen equipment, £40 on a mail box, and £26 on storage boxes. It continues to be the policy of the trustees to write-down fixed assets over their useful life and, consequently, furniture, equipment and loose items are depreciated over ten years at 10% of cost price per annum, and electronic equipment over five years at 20%. The net book value of fixed assets shown in the accounts is therefore the historic cost less accumulated depreciation.
Equipment / Electronics / TotalBook Value 31 May 2013 / £6,741.21 / £1.00 / £6,742.21
Purchases / £1,194.47 / £0.00 / £1,194.47
£7,935.68 / £1.00 / £7,936.68
Rate / 10% / 20%
Depreciation / £1,148.06 / NIL / £1,148.06
Book Value 31 May 2014 / £6,787.62 / £1.00 / £6,788.62
Fig. 5 Table of fixed assets and depreciation
The trustees have contracted to spend approximately £10,000 refurbishing the showers and changing room.
10. Debtors and Credit Control
Debtors represent invoices sent to hirers which have not yet been paid. Regular users are invoiced at the end of each month with payment due upon invoice, while single hirers pay a 25% non-refundable advance payment with the balance due immediately after the event.
At the year-end, debtors stood at £1,118 which represented 4.7 weeks’ worth of invoices. Of these 92% were less than one month old, 3% were between one and two months old, and 5% were between two and three months old. Debtors were well spread across twenty-one accounts with no individual debtor owing more than 16% of the total. The average debt at year-end was £53.
The debtor book is actively managed and no significant credit control problems have been experienced. On average, the debtor book turned over every 4.1 weeks, improved slightly from last year’s figure of 4.4 weeks, and well within the target of 6 weeks set by the trustees. There were no bad debts this year.
Fig. 6 Credit control: A ten year comparison of the average number of weeks taken to pay
11. Taxation and Business Rates
The Trust has no employees. The Trustees are unpaid and all cleaning and maintenance work is contracted. An honorarium is paid to the bookings clerk to cover unquantifiable expenses. As the Trust is a registered charity, no tax liability arises on income and no provision has been made in these accounts for tax. The Trust is liable to pay VAT but is not registered for VAT. Bank interest is received gross.
Following a successful appeal in 2012, the Valuation Office Agency reduced the hall’s rateable value from £6,200 to £5,600. For the financial year 2013/14 Mid Devon District Council levied a business rate of 47.1p in the pound which resulted in a charge of £2,637.50 offset by 80% Charity Relief of £2,110. For 2014-15 they have set a rate of 48.2p resulting in a charge of £2,699.20 offset by Charities Relief of £2,159.36.
Since 2007 it has been the policy of Mid Devon District Council to offer charities Discretionary Relief for the remaining 20% meaning that the Trust has paid no business rates since 2006/07. This concession expired this year and the trustees have applied to renew it.
12. Financial Objectives and Performance
The financial objectives of the Trustees may be summarized as:
12.1 Provide a First-Class Community Resource at a Competitive Price
Whilst the hall is not operated for profit, a primary objective of the Trustees is to generate sufficient income to run and maintain the facility for the on-going benefit of the community. The hall is not supported by local authority funding and all operating and maintenance costs, therefore, have to be generated by the Trustees.