Community Fund Trustees
Under the terms of the Trust Agreement executed March 12, 2005, a Trustee Selection Committee is now being established made up of Members of the First Nations. Applications for this Committee are being requested from the membership and, after a detailed review of the applications, 7 Members will be appointed by Council early this summer. The Trustee Selection Committee will have the important responsibility of identifying suitable candidates for appointment as either Community Fund Trustees or Financial Trustees.
This Overview was prepared as a means of explaining the task of the Community Fund Trustees and the individual duty, role and responsibilities of a Community Fund Trustee.
Unlike a corporation, a "trust" is not a legal entity itself, rather a trust describes a legal relationship that is created between a beneficiary (the Rainy River First Nations in this case) and a person called a "trustee", in this case a Community Fund Trustee as defined in the Trust Agreement. Although the Community Fund Trustees do not hold legal title to the Trust Property in this case (the Financial Trustees alone hold title to the settlement funds), they each accept the obligation to perform certain significant duties and assume broad responsibilities in relation to the disbursement of Trust Property for the benefit of the RRFNs and its Members.
There will be 5 Community Fund Trustees (including up to 2 Members living off Manitou Rapids Reserve) appointment by Council. Council must appoint Trustees in the order recommended by the Trustee Selection Committee. This is an important and highly critical process which must be approached with utmost caution and care by the Trustee Selection Committee due to the nature of the responsibilities to be undertaken by each person as a Trustee of the RRFNs Trust.
Responsibility of Community Fund Trustees:
The Community Fund Trustees have responsibility for:
- The identification of "expenditures beneficial to the beneficiary for community purposes" meaning determining projects to fund, rules of eligibility, applications and monitoring is undertaken
- The issuance of "funding directions meaning authorizing expenditure of Trust money for approved projects only"
- Reporting to Council and the Members on:
- Details of their recommended expenditures as they relate to Community Purposes
- The achievement of the objectives of the Trust
- Future projects, plans and programs under consideration.
The above responsibilities can only be fully understood through a careful and detailed reading of the Trust Agreement. Each Trustee must have a thorough understanding of the Trust Agreement.
Expenditures of Benefit to the Community:
Guidelines are provided to the Community Fund Trustees based on the definition of "expenditures beneficial to the beneficiary for community purposes" at page 14 of the Trust Agreement, specifically Paragraph 8.2(b) which include health care, education support, elder needs, community development, language preservation, cultural learning, community activities, financial services, housing incentives, economic development, protection and advancement of Treaty and aboriginal rights, Trust costs including professional services and any other activities deemed to be of community benefit of a similar nature, except for the payment of First Nations debt or any cash distributions to individual Members.
The Community Fund Trustees may approve of projects up to $75,000. only. Projects above $75,000.00 and up to $250,000.00 must also be approved by Council and projects over $250,000.00 need the approval of the Members at a general meeting.
Duties and Standards of Conduct of Trustees:
Community Fund Trustees, as Trustees, are legally obliged to act in utmost good faith with a view to the best interest of the Trust and to avoid conflicts of interest at all times. The standard or duty of care for a Trustee is the highest standard known in law.
The Community Fund Trustees must also act in strict accordance with the Trust Agreement in terms of the guidelines for expenditures, limits of authority, funding directions, reporting and applicable trust law requirements.
Failure to act in accordance with the Trust Agreement and applicable law will attract serious personal legal liability. Trustees are protected from liability for their actions under the Trust Agreement, but not for any individual fraud or negligence.
Consent and Acknowledgement:
Each Trustee must sign a consent to act and acknowledgement containing the following statements:
"I, ___________________, of the _____________ of ___________________, in the Province of ________________, Canada, hereby accept and consent to my appointment as a Trustee of the Rainy River First Nations Trust by the resolution of the Council of the Rainy River First Nations dated _________________, a copy of which is attached as Appendix A.
I pledge that I will act as a Trustee to the best of my knowledge, ability and skill, in utmost good faith, with due care and diligence at all times in accordance with the terms of the Trust Agreement, a copy of which is attached as Appendix B.
I have read the Trust Agreement understand that will be liable for breach of the duty of care I am bound to exercise as a Trustee at law, and in particular for my individual fraudulent or negligent act or omission, but that I am otherwise indemnified and saved harmless from claims and costs arising from the performance of my duties as Trustee from the Trust Property in accordance with the terms of the Trust Agreement. I also understand that the Trust Agreement provides for strict and detailed guidelines in relation to the disclosure of conflicts of interest, the breach of which could result in the withdrawal of my appointment, accounting for profit or returns received and other civil or criminal penalties.
I acknowledge and agree that I may be obliged to participate in financial management and investment or Trust management orientation and training workshops or programs to assist me and the other Trustees in the better management and administration of the Rainy River First Nations Trust."
Trustees must be at least 18 years of age upon appointment and are expected to be persons of good character and exceptional experience. Although not required post-secondary education would be preferred as well as suitable administrative or business experience to appreciate the duties of a Trustee and effectively perform the duties of a Trustee. Trustees must be bondable and have no criminal record involving financial matters, interpersonal violence or other matters affecting personal reputation or credibility as a Trustee.
A Trustee is a volunteer, however, a Trustee may receive compensation for meeting attendance and income loss and reimbursement of pre-approved incidental expenses for meeting attendance. Compensation and expense allowances are not set by the Trustees, rather they are set by the general membership from time to time. Meetings are to take place at least once every 2 months, but frequency will vary with the amount of planning activity. Trustees living off Reserve will typically participate by conference calls, but be expected to attend the annual general meeting at which reports are given to the Members.
Overall Structure for Implementation:
See the chart illustrating the overall structure within which the Community Fund Trustees will operate during the implementation of the settlement agreement.