Special General Meeting, 22nd August 2002
Venue: Raith Suite, Stark’s Park, Pratt Street, Kirkcaldy
Introduction / Welcome
The Chairman thanked everyone for attending the meeting. He introduced the meeting by re-stating the two requests which were recently made by RRFC: for a financial contribution early in the season, and for regular monthly contributions during the season. The Society’s initial response had been that we would need to consult with our membership, therefore there would be two proposals to vote on in the meeting following a presentation from three of RRFC’s directors (Danny Smith, Turnbull Hutton and Eric Drysdale).
Update on RRFC’s Financial Position
Eric Drysdale began by stating that the club’s financial problems are well documented. The situation was critical in 1999 when the current board took over, significant inroads have been made since then – creditors have fallen from 92 to 12-15 since 1999, and agreements for gradual repayments have been put in place to avoid legal action from these creditors. The wage bill has been substantially lowered. At the start of the close season the situation was that income had fallen due to relegation, and cash flow problems required investment from board members to get through the close season.
Since 1999 the club haven’t been fully up-to-date with a debt to the Inland Revenue. The Inland Revenue now seem to have run out of patience, the club is not in mortal danger but the situation needs to be tackled urgently. The Board are asking us to give the club whatever money we can, as soon as we can. The Supporters Club and 200 Club have both given the club 4 figure sums in the last month – but the IR are still a problem. Danny Smith explained that the IR were given a payment plan in 1999, but we have struggled to keep up to date with these payments. The proposal that will be put to the IR is to continue with regular payments, but at an increased level – this will buy the club time to find a refinancing deal, sell a player, etc.
Turnbull Hutton described the work being done on refinancing – they have been close to agreements a couple of times but haven’t managed to do this. Scottish football is currently seen as a bad investment for banks.
In response to a question from the floor regarding due diligence, the board responded that they took over the club because they wanted to get involved in Scottish football. If they had taken due diligence the club wouldn’t be here today. They are doing the best they can with very limited resources.
The decision to stay full time was questioned, and the board responded by explaining that their intention at the time of the AGM was to have the 8 full time players signed to the club at that time and to bring in 3 more. The youth teams would also be kept to make up the squad. Antonio Calderon’s preference was to spend the same money on a smaller number of players but have them all full time -cutting the same cake a different way. The full time players have been brought in on wages equivalent to part timers, the loan players are effectively favours from other clubs, and the youth players are on ‘a pittance’.
Concerns were expressed about continuous reports of attempts to sign players – even at low wages we can’t afford this. The board stated their desire to get the club out of Division 2 at the first attempt, and to ensure that there was a big enough squad in place before the transfer window closed to keep a team on the park throughout season. The wage bill is now a fraction of what it was when we were relegated from SPL – some part-time clubs have a higher wage bill than us. Turnover was £1.1m three years ago, £900k last year, and is predicted to be £800k this year.
The board were asked what their long term plan for the club was. The board have an implicit belief that fortunes turn, and this can only happen with a decent team on the park.
Ken Foster’s work as Community Development & Marketing has raised the profile of the club through the papers and website. Ken is getting some positive responses, but there is not a significant amount of money in Kirkcaldy businesses for advertising.
The board have budgeted for success and gates of more than last season – with lower prices than last season we budgeted for equivalent gate revenue. It is very difficult to budget things like commercial revenue, SFA payments, or revenue from cup runs.
The current level of debt is much lower than at the end of the Alan Kelly era, and the IR are the only creditor likely to pose the club a serious problem this season. At the current rate, it will take 20 years to clear the debt, but it doesn’t matter how long it takes as long as the club is still there. There are no begging bowls this time – the board are asking a shareholder to increase its shareholding.
The Chairman drew the discussion to a close, and thanked the board members for coming.
Discussion on the two proposals
Before voting on each of the proposals, there was a discussion of some of the points arising from the board’s presentation.
Concern was expressed that the issues don’t seem as clear-cut as people had hoped. We want to know what any money we give will be spent on – effectively all of our funding to date has gone into a black hole. We have no real control over what our money is spent on, but it looked like it was spent on youth development as we had wanted last year. We need to know what we will get in return – anything other than shares?
Any funding we provide should be reviewed at the end of the season.
Vote on the two proposals
One member, one vote = democracy. This is the most important principle of the Trust. A simple majority carries.
Resolution 1 (lump sum) For 44, against 19 CARRIED
Resolution 2 (monthly payment) For 30, against 29 CARRIED
We need to publicise this decision effectively, and negotiate what we will get in return – George Howie will take this action as Chairman of the Trust.
General matters
Recruitment drive – a ‘big bang’ event is being planned for November 27th.
Current status – 94 members (34 Kirkcaldy, 26 other Fife, 18 other Scotland, 12 other UK, 4 outside UK).
Income from standing orders is approx £700/month, annual income is equivalent to approx £100/month.
Registration as an Industrial & Provident Society should come through within the next week.
The Chairman closed the meeting and thanked everyone for attending.
