THT and Koha

The future of THT in relation to Koha.

A paper prepared by ex-CEO of Te Horowhenua Trust (THT) and Koha community member Joann Ransom, 10 October 2016.

1. Audience

This paper has been written for the following audience:

• The Trustees of Te Horowhenua Trust
• Horowhenua District Council (HDC) CEO,
• Koha community
  

2. The Situation

• THT is a charitable trust and a council controlled organisation that was established by HDC in 1996 to provide library services in Horowhenua. It was originally called Horowhenua Library Trust. It receives the bulk of its funding from HDC.
• Koha is the open source library management system developed by THT in 1999. It is the world’s most used library management software with about 16,000 installs.
• THT is the home of global Koha ‘assets’ including trademarks, urls and the Koha development fund.
• HDC has decided to provide library services directly in Horowhenua and will no longer fund THT. As the settlor of the Trust, HDC has suggested that THT be wound up.
  

3. The Challenge
Winding up THT is not straight forward with regard to Koha. THT ‘owns’ many global assets registered in the name of THT which THT does not know about or pay for. Supporters around the globe have purchased and pay renewal fees directly. The challenge is:

• THT needs to distribute its assets according to the Trust Deed,
• There is no other global body that the Koha assets could be transferred to,
• Even if another body existed, it would be very difficult to trace all the assets and transfer their ownership.
  

4. Options
There are 4 options for THT going forward
4.1   Dissolution
4.2   Liquidation
4.3   Repurposing
4.4   Establish a new Trust

4.1 Dissolution
The following information is taken from the NZ charities website which outlines the process for ending a charitable Trust.

When a charitable trust board is no longer operating
If the charitable trust board has no assets or liabilities, the board can send the Registrar written advice that the board is no longer carrying on its operations and request that it be dissolved and removed from the register. Prior to a board sending the Registrar a request to be dissolved it should deal with any outstanding assets and/or liabilities in the manner specified by the board’s rules or trust deed.

4.2 Liquidation
Liquidation of a charitable trust is initiated in one of two ways; by resolution of the board or by the High Court.

By resolution of the board
A board incorporated on the application of members of a society can be put into liquidation by a members’ resolution that is confirmed at a later meeting. This is equivalent to the liquidation of a company by resolution of its shareholders under the Companies Act 1993 and is treated in the same way. A board should take advice from its accountant and solicitor before considering this procedure.

4.3 Repurpose
THT could be repurposed so that it no longer provides library services in Horowhenua but supports Koha. This is done through a ‘variation’ to the Trust.
Registering an alteration to your rules or a variation to the trust
A charitable trust board needs to provide a copy of a change to the rules of a trust or a change to the trust itself to the Registrar of Incorporated Societies within a month of the change being approved.
The two types of changes that must be registered are:
1. An alteration to the rules, typically administrative such as a change of trustees or officers, procedures around appointments, resignations, meetings and changes to the powers of a board under section 23(2) of the Charitable Trusts Act 1957 (the Act).
2. A variation to the trust, typically a more significant change, often involving property. These changes need to be certified by a trustee or a member of the governing committee of the society with the following statement “I hereby certify that this is a correct copy of the trust deed or rules of the [Name of Trust Board]” placed on the document (usually on the cover page) under section 23 (1) of the Act. A statutory declaration is also required for a variation to the trust.

4.4 Establish a new Trust
The simplest option is to repurpose THT but this requires the permission of HDC. If HDC refuse to give their permission then THT could establish a new Trust eg ‘THT 2016’ and transfer the Koha assets to it, transfer the remaining assets to HDC, and then dissolve THT.

5 Legal Position of Trustees
THT still exists as a legal entity and all trustees are still office holders of the Trust until such time as they resign and their names are removed from the Charities Register. The Trust board has not met since May 2016 but will need to reconvene to discuss the matters raised in this paper and to resolve the way forward for Koha and the Trust itself. 

6 Next Steps
Regardless of whether the decision is made to repurpose the existing trust or create a new one, a new Trust Deed will be required. It is the authors objective to work with the Koha community to develop a draft new Trust Deed for HDC and THT to consider.

Joann Ransom.
10 Oct 2016.