Crunch talks between council and charity as Honiton community centre's future hangs in the balance
PUBLISHED: 14:07 04 October 2019 | UPDATED: 15:09 04 October 2019
The future of Honiton's Beehive community centre could hang in the balance amid a financial dispute.
Honiton Town Council and the charity which runs it - Honiton Community Complex - are in mediation over £40,000, which the charity alleges it is owed by the council.
The charity says the money is owed according to the 10-year Beehive lease, signed in 2015.
The two parties have been butting heads for more than two-and-a-half years, and the charity has accused the council of failing to 'honour its financial commitments'.
Honiton Town Council today said the charity, which is in possession of the lease at the Beehive, are 'potentially considering entering into administration', but this has been rebutted by Honiton Community Complex.
The town council alleges the demands of the charity have increased 'fourfold' in the last four years and the dispute is based around what exactly the costs should be.
The two parties are to sit down next week and discuss the issue further.
Mark Tredwin, the town council's clerk, said: "There is an amount of money that Honiton Town Council is required to pay Honiton Community Complex, originally based around an agreement and a business plan.
"When Honiton Community Complex became a charity, it initially received an amount of money that was called into question by residents.
"A lease was drawn up, that was supported by a service level agreement.
"That lease specifies that for 10 years, the town council will provide the building to Honiton Community Complex for a nominal charge of £1 a year.
"In return, the council has three offices at its disposal and pays a 10 per cent service charge on those three offices.
"The dispute centres around what exactly the costs should be."
Mr Tredwin said Honiton Community Complex says the town council should pay ten per cent of all costs associated with the Beehive, while the authority believes it should just be paying for the office running costs and main building costs.
He said: "We have tried every possible way to resolve this without going into mediation let alone the much more costly process of arbitration."
A spokesman for Honiton Community Complex said the dispute is no longer about the 'interpretation' of the lease, but who should run the Beehive, what the centre should be providing for East Devon's community and what financial support the council is prepared to provide.
Barry Simmonds, chairman of the charity, said: "It is regrettable that after five years of hard work by the volunteers and the staff of the Beehive in producing this remarkable success story, we are in this situation with HTC."
More than 60,000 people use the Beehive each year, and the centre has welcomed international artists and bands to perform.
The Honiton Community Complex spokesman said: "The Beehive trustees will be entering into final discussions with the council and would like an outcome which sees the council actively participate as a partner in the affairs of the Beehive so the community can continue to benefit from all the centre has to offer."
The charity alleges the interpretation of the lease was challenged when John Zarczynski, Honiton's current mayor, was elected as chairman of the council in May 2017.
Mr Simmonds said: "Mr Zarczynski gave instructions that no further payments be made because he did not agree with the basis of the calculation."
Speaking to the Herald, Cllr Zarczynski said Mr Simmonds' allegations were untrue.
Cllr Zarczynski said when he became mayor in 2017, the only payments Honiton Town Council stopped were incorrect room hire invoices.
He said: "These invoices were returned to Honiton Community Complex with the request they resubmit the correct invoices.
"It has taken Honiton Community Complex nearly nine to ten months to resubmit the correct invoices.
"As soon as they were received, Honiton Town Council paid the bill."
Cllr Zarczynski said a dispute arose because the council noted no inspection of validation of service charge invoices took place in 2015/16.
He said as part of the lease agreement, Honiton Town Council requested Honiton Community Complex provide copies of invoices relating to the service charge for inspection and validation.
"This is where the dispute arose," he said, adding that the town council has been 'bending over backwards' to resolve the issue without the need for legal action.
He said: "Honiton Town Council also went to the expense to obtain the interpretation of the lease, by the authors of the lease, and agreed to comply with the authors' advice.
"When this interpretation was received from the authors, Honiton Community Complex still disputed the interpretation of the lease."