Reports of Committee meetings of NELPG Ltd and NELPG Enterprises Ltd
14 March 2016
Present: John Hunt (in the chair), Martin Lloyd, Michael Chyriwsky, John Hall, Nigel Hall, Chris Lawson, Richard Pearson, Richard Wheeler. Derek Parry and Matthew Whitehurst of Bluefin also attended for the insurance review and were welcomed to the meeting.
John Hunt declared an interest as an employee of West Coast Railway Company and Richard Pearson declared an interest as an employee of NRM Locomotion, Shildon.
In introducing his insurance review report, Derek Parry concentrated on the insurance value options for the locomotives under the engineering policy. A query had previously been raised by a locomotive hirer about the insurance valuation used in our locomotive hire contracts as being excessive and out of line with other locomotives they dealt with. Derek explained that a sum insured approach meant that any deemed underinsurance would result in only a part payment in respect of a claim. Bluefin had therefore agreed with insurers to adopt a limit of liability approach where there would be no element of underinsurance. Any claim would be met in full up to the limit of liability. This was the approach taken with all railway heritage organisations for whom they acted, and was reflected in the current insurance valuations shown in our present policy. The only issue was the maximum possible loss, and it was felt most unlikely that even a major incident such as a boiler explosion would result in a total loss and a need to rebuild from new.
In discussion, it was confirmed that if a claim was made while our locomotives were on hire, then it would be dealt with by our insurers first, and would then be taken up by them with the hirer’s insurers. Also that there was no double insurance: the insurer takes account of proposed locomotive usage during the year and reflects that in setting the premium. For the J27 therefore, the premium reflects the fact that it is currently not operational, but it is important to make sure that Bluefin continue to be advised of any changes in locomotive use – for example the return of the Q6 to traffic. In conclusion, it was agreed that in future, locomotive hire contracts should show the limit of liability insurance value rather than the sum insured used previously.
The review had shown however, that the insurance values currently shown were out of line with those for other locomotives dealt with by Bluefin. Following discussion, these had been increased and were shown, with the changes in premium, as an alternative in the review report. After a brief discussion, in which the importance of maintaining full insurance values was emphasised, it was agreed that the increased insurance values should be adopted.
Responding to a question from the Chairman, Derek Parry confirmed that any lineside fires on the Jacobite which could be shown to be due to the negligence of the locomotive owner – and any claims that could be linked to a locomotive which had passed its Fitness To Run exam would be firmly rejected – would be covered by our public liability policy. He also advised that if WCRC lost their licence and the K1 was stranded say at Fort William, then no insurance cover was available for such an eventuality. We would have to meet the costs of any retrieval operation ourselves.
A request from Bryan Orange that accident benefits for JVs be brought in line with those for adults could not be met because of certain limits imposed by legislation.
The remaining insurance renewals were straightforward updates of existing policies and were agreed without discussion. Derek Parry pointed out though that since the report had been prepared, Chaucer had been taken over and Aviva had decided to concentrate their business with a different broker. Replacement insurers, providing the same cover, had been found with no increase in premium, and the possibility of a reduction. An addendum and revised invoice would be issued. Until that had been received and paid, cover would continue past the 1 April renewal date regardless.
The Monthly Financial Report was noted, with confirmation that 80% of each loco's gross earnings had been transferred to its respective DMF in the Charity account (in line with the terms of the licence between Enterprises and the Charity). The surplus remaining after deducting expenditure incurred in mainline running plus the accountancy fees for the Enterprise account will be shown as a debt owed to the charity. This sum will be retained in the Enterprise account as a loan to provide working capital for Enterprises but will be transferred to the Charity account as unrestricted funds once sufficient 2016 hire income has been received. Payment for the NELPG 50th anniversary calendars had been received from the NYMR, and a query over an invoice from the NYMR had been satisfactorily resolved with the invoice cancelled.
The Treasurer was thanked warmly for all the work that he had put in to improve the financial information that was now available, and which provided greater clarity of our financial position.
In presenting his revised proposals for changes in subscription levels following the discussion by the Fundraising Sub Committee, the Treasurer made clear his view that he did not see Life Membership providing any benefit to the Group, and that it should be abolished with effect from the AGM. After discussion, and with one abstention, it was agreed that this should be recommended for approval at the AGM. The proposed increases in the rest of the subscription rates were also agreed, to take effect from 2017 membership renewals, subject to members’ approval at the AGM.
In respect of Patrons, it was agreed the ordinary membership subscription should be allocated to the general account from Patron contributions to the Patron fund. This should not however, apply to Life Members who were also Patrons. They had paid their membership subscription already, and it was therefore quite wrong to expect them to pay an annual subscription as well. A note would need to go to those Patrons affected, explaining the position and its reasons.
For the future, when seeking donations at time of membership renewal, to maintain financial flexibility, members should be given the choice of specific projects to which they could contribute (which would be restricted funds) or for unrestricted use. If unrestricted funds were used for general administration however, there could be an issue with Gift Aid eligibility which needed to be explored. The possibility of paying subscriptions by Pay Pal or other similar means was raised, and while possible to introduce, there would be a cost per payment which would probably exceed the benefits.
The arrangements for the AGM were confirmed, along with the order of contents for the AGM Supplement, which would be considerably larger than in previous years. Richard Pearson confirmed his willingness to stand for re-election to the Committee. Ribchesters had also confirmed their willingness to be re-appointed Independent Examiner of our 2016 accounts.
In relation to the Trustees Annual Report (TAR), two further amendments were discussed and appropriate changes agreed. Subject to those, the TAR was approved for submission to members for approval at the AGM, and subsequently to the Charity Commission and Companies House.
Some amended pages for the NELPG Ltd accounts had been received from Ribchesters at the last minute to replace those previously circulated, which had suffered a corrupt file in transmission. With those amendments, the accounts for both NELPG Ltd and NELPG Enterprises Ltd were approved, and could be consolidated with the TAR by Ribchesters into one document to go into the AGM Supplement.
Succession planning continued to be a difficult issue to progress and it was felt that external advice on how this might best be tackled could be appropriate. Legal advice on the future of NELPG Enterprises Ltd as a separate trading company could also be required. Ribchesters had advised that a separate company was no longer necessary. HRA would be approached for advice.
Under Health and Safety, Michael Chyriwsky reported that a revised Section 10 of the Locomotive Maintenance Policy: Safety Policy was being prepared for circulation and comment.
Nigel Hall reported that during the servicing of the fire alarm system at Hopetown, the fire alarm engineer had pointed out that the Regulations had changed and our arrangements would need altering to ensure compliance. The requirements would be set out in the engineer’s report, but could involve some significant expenditure.
Of the 9 PTS holders due to renew this year, Martin Lloyd advised that 5 would be attending a renewal course at Carnforth this week, and 4 had said they were retiring. He would send the current PTS list showing pending renewals and medicals to thr Chairman. 13 were due a medical, but he needed to know who would be required for Scotland before making any arrangements. It was noted that a decision would be needed on payment for those not on the roster but still requiring a medical.
The normal locomotive updates were provided, and the latest position is reported in the current issue of NELPG News. The order for the retubing of the J27 boiler and smoke box repairs would be issued to LNWR Crewe in the next day or so, as agreed by the Committee in correspondence. Work on the J27 tender tank was due to start in early April and take 6 weeks to completion. The J72 was due its insurance steam test on 15 March, subject to which it would move to the Wensleydale Railway at the end of the week. Following a test run on the 23 March it was expected to enter revenue earning service on Good Friday.
There were a number of locomotive hire issues. The Secretary advised that the Wensleydale Railway had provided Fred Ramshaw with provisional operating and driver experience dates, but they were very optimistic in terms of the J72’s practical availability. The hire contract for the 2016 season had not been issued pending resolution of these issues, but, with the locomotive due to move to the Railway by the end of the week that would now be done.
A meeting was to be held on Wednesday between WCRC and ORR. The signs were that there would be a positive outcome, but it was agreed that if not, then alternative means should be pursued for getting the K1 to the NYMR in view of the continuing uncertainty over whether the Wansbeck railtour would run on 2 April. So far as the Jacobite was concerned, we had to plan on the basis that it would run and the K1 be involved. There were still one or two gaps in the roster, but none were considered insurmountable. The possibility of A4 support crew involvement had yet to be pursued.
A request had been received from the NYMR for the Q6 to be used on a special train on 3 May for those serving more than 45 years on the Railway, and for the mileage rate to be waived. This was agreed.
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