New Start. New Management.
New Era of Safe and Affordable Flying.
After 2 years of negotiation, it has been achieved!
Objectives
• Establish a ‘not for profit’ airfield operating company unlike all of the
previous lease holders.
• Provide the ‘comfort’ required for the land owners of a responsible single
point of contact, similar in their view to the existing arrangement with
AOL Ltd.
• Directors loan to settle AOL Ltd’s interest in the airfield and ensure
essential maintenance is carried out.
• Secure tenure of the airfield for the Staffordshire Aero Club and Flying
School for the long foreseeable future.
• Set user fees and hangar rent at a reasonable level to cover ongoing
maintenance costs and generate sufficient surplus funds for investment.
• Invest surplus funds in airfield facility improvements .
• Enable the flying club to provide its members with the best airfield
possible at the lowest cost possible.
• To support the flying school.
• Ensure everyone has a safe, affordable and happy aviation experience.
Management Structure
• Staffordshire Aero Club Ltd
– Board of directors
• Peter Davis (MD), Graham Wiley (Co Sec), Jon Jordan, Mark Deeley,
Bill Turner (non-Exec)
• Staffordshire Aero Club
– Committee
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Chairman - Graham Wiley
Secretary - Simon Ganecki
Treasurer – Ken Seedhouse
Site & Safety Officer – Peter Davis
Events Officer – Jon Jordan
General member – Bill Turner
General member – Bob Arnold
– Members.
Roles and Responsibilities
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Staffordshire Aero Club Ltd – Board of Directors
– Finance
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Budgeting.
User fee and hangar rent collection.
Rent payment. Personally guarantee the lease. Personally guarantee the Section 106 Agreement
Maintenance .
Insurance .
Equipment and facility improvements.
Asset register.
SAC accord and tenancy agreement for hangar owners.
– Communication.
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Club committee,
Land owner,
Planning and other authorities.
– Safety.
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Ensure airfield users comply with ANOs,
Airfield operating procedures comply with CAA / EASA and other authorities recommendations and
regulations. Personally answerable to the CAA and local Council.
Provision of safety equipment.
– Security
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Provision and maintenance of a visitors book for those that drive or walk in.
Security devices.
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THE ‘BUCK STOPS’ WITH THE DIRECTORS!
Roles and Responsibilities
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Directors
– Make initial investment and agree new lease with land owners.
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The solution requires an upfront payment to AOL and all the 2011 income. In addition Directors will
provide sufficient funds for essential maintenance.
The existing lease will remain with AOL until expiry in 2012 when a new SAC Ltd Lease will take effect
but will be executed immediately. The right to renew by AOL will be forfeited immediately
Directors expect to achieve a fair return on their investment from airfield income from 2012 onwards.
No interest will be paid to Directors for their investment.
Share holding Directors will be offered a retainer of £625.00 per annum for their services (£12.00 per
week).
Surplus Income from 2012 onwards will be used to provide a service to members and improve
facilities .
Manage SAC Ltd
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Take responsibility and consequent financial risk with immediate effect.
Receive no interest on their invested capital.
Allowed to claim reasonable expenses for costs incurred on company business, but not for leisure
flying and casual visits to the airfield!
Must be members of Staffordshire Aero Club.
May be SAC committee members but not a requirement.
Directors are appointed by the SAC Ltd board.
Roles and Responsibilities
• Staffordshire Aero Club - Committee
– Membership.
• Represent members.
• Approve new members.
• Arbitrate between members and management if required
– Social.
• Maintain social event budget.
• Organise social events.
– Fly ins
– Fly outs
– Club nights
– Constitution.
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Ensure members comply with club rules
Roles and Responsibilities
• Committee Members
– Elected annually in accordance with the SAC
constitution.
– Must be Staffordshire Aero Club Members for at least
one year.
– May be SAC Ltd directors but not a requirement.
– Expected to work in conjunction with the SAC Ltd
board of directors.
– Represent the Staffordshire Aero Club members
interests.
– Carry out the offices they have been elected to,
responsibly and to the best of their abilities.
Financial Model
• AOL immediate payment of £21 K + all 2011 income
• Directors loan expected to be £28 K
– 4 shareholding directors at £7K each
• Assuming income and expenses are as expected.
(Directors loan repayment anticipated in 2013 )
– Income should generate a surplus fund for contingencies
and greater investment from 2013 onwards.
– The calculation takes into consideration 3 yearly increases
in rent to the land owners.
Financial Model
• Investment plans under consideration
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Club / Airfield Sales and Marketing
Replace tractors and runway mowers
Electricity to Club house and School
Resurface access track
Telephone line to club house and school
On line weather station and web cam
Extension of Runway 11/29
Additional hangars
All when funds permit!
Section 106 Agreement
• Local Authority has approved the following
amendments:
• Amend names to the current Land Owners.
• Remove the word ‘micro’ to now read ‘Light
Aircraft’ to cater for changes in aircraft
designations (VLA, Light Sport etc)
• Amend ‘one employed Instructor’ to ‘two
contracted Instructors’
• Addition of SAC Ltd in a unilateral agreement
Questions
Questions
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Q. Why do we need a management company? Why can’t the committee take on all the roles
and responsibilities?
A. The landowners are not comfortable with dealing with a committee and therefore a
structure is required to enable all parties to reach agreement. Land owners want a stable
business relationship. The committee could change on an annual basis. Staffordshire Aero
Club Ltd will provide a consistent approach to financial , legal and regulatory matters. The
landowners are more than comfortable with our our suggested structure and to the parties
who have taken on the responsibility as Directors. A ‘Committee’ cannot guarantee the lease
or the responsibility of the Section 106 Agreement.
Q. Why have not all member been asked if they want to be on the board of directors?
A. It was considered more than 4 or 5 people on the board would be unmanageable. The
land owner only wanted one person but has compromised. Certain members were asked
based on their business experience, knowledge of airfield operations and ability to make a
significant long term investment together with their acceptance of the personal legal
responsibilities required. As soon as 4 such individuals who met the criteria had agreed to the
terms, we had to progress with the project and seek approval from the land owners.
Q. Will directors money be paid into a company bank account then to AOL once cleared?
A. The transaction will be like selling a house. New post dated lease will be effective on the
same date as the old lease is cancelled/forfeited. The financial transaction from the SAC ltd
bank account to the AOL account will be at the same time.
Q. What rules will govern the appointment of board members?
A. Directors will have to be SAC members, and meet normal criteria. Shareholders will vote.
Questions
• Q. How can Directors be removed if they act against the company / clubs
best interests.
• A. Shareholders vote and in accordance with the Memorandum and
Articles of Association and the Directors/shareholders Agreement.
• Q. What risks legal and financial do directors face?
• A. Can be prosecuted and fined for failure to prepare accounts or other
documents on time. Prosecuted, fined and/ or imprisoned for failure to
comply with heath and safety regulations. There is no limit to personal
liability of directors or officers. Personally guarantee the lease and the S
106 Agreement.
• Q. Will each director require insurance, eg: personal indemnity, directors
liability?
• A. Yes
• Q. Will insurance costs be paid by SAC ltd?
• A. Yes
• Q. If a Director decides to resign before loan is repaid will repayments to
him/her still continue?
• A. Yes, until his/her interest is settled.
Questions
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Q. Can a share holding Director sell his share to another?
A. Yes but the number of shares any one Director can hold must be limited with no
majority shareholders.
Q. What rules will govern this? What happens if share holder dies?
A. The percentage shareholding of any one director will be exactly proportional to 100%
of the authorised and issued shares divided by the number of directors . If a share
holder dies their shares will be divided equally between other shareholders or passed
to a suitable replacement, if acceptable to the remaining Directors.
Q. What are the tax implications for SAC Ltd Directors?
A. SAC Ltd will not make any profit so Directors cannot be paid dividends. Tax will only
be payable by an employee of the company receiving remuneration.
Q. Will SAC Ltd have to be VAT registered?
A. No as long as the turnover remains less than £70K. May still be exempt if HMRC
agree that the company is a recreation or hobby.
Q. Can surplus income be classed as profit?
A. It can be classed as retained earnings if reinvested in the company. Or paid as
dividends to shareholders.
Questions
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Q. How long will the new lease be for?
A. To be agreed. Ideally 10 years.
Q. S106 requires changes and SAC Ltd will have to maintain future compliance.
A. SAC Ltd and the Land owners will work together to update the S106 agreement
which has been agreed ‘in principle’ by the authorities. SAC Ltd will have to enter into a
‘joint and several’ unilateral undertaking with the landowners.
Q. Will all members be given a new contract, similar to the accord? Should this be a
signed commitment to pay on time? In return should there be a tenants agreement for
hangar owners?
A. Yes. Existing accord to be reviewed and tenants agreement to be drafted.