A trust account set up a decade ago as a "rainy day fund" for the Alexandra Blossom Festival cannot be used to pay off the debts incurred by the 2009 festival.
The Alexandra Blossom Festival Trust has more than $100,000 in the bank but trustees Robert Cooper and Daphne Hull, both of Alexandra, said this week it was set up as an "insurance policy" in case bad weather affected the festival.
Under the terms of the trust deed, the money could not be used to fund a deficit, other than a weather-related loss.
"There's no way we can fund losses and prior years' losses to the tune of $134,000," Mr Cooper said.
The festival is insolvent, with three successive years of losses, adding up to $134, 451 and the 2009 event owes creditors more than $81,000.
A meeting will be held in Alexandra next week to gauge support for the festival and to launch a fund-raising campaign.
If it goes ahead, this year's event would be the 54th.
The future of the festival, believed to be the longest-running annual festival in the country, hinges on the outcome of that meeting and the Vincent Community Board's decision later this month on whether it will bail out the event.
Mr Cooper said although it could not use the trust fund to pay off the festival's debts, the trust could lend the festival committee money and grant some as seeding funds to ensure the event continued.
He declined to say how much, except that it would be a "significant amount".
Mrs Hull, who chaired the festival committee for seven years before stepping down in 2002, said the $100,000 was established with profits from three or more festivals.
"It was set up one year when we'd booked a band for an evening concert and it started to rain and we were worried we'd have to can the concert and still incur costs.
We called an emergency meeting and the band said it would continue with the concert if it was wet, but it still expected to be paid, regardless of the attendance.
"We realised that we had no insurance to cover that possibility.
"We'd looked at insurance in the past to cover the event but it was too expensive to insure against losses as a result of adverse weather.
"The committee decided to form the trust so the funds would be there if an event was rained out and bills still needed to be paid," Mrs Hull said.
Several grants had been paid to the committee in the past couple of years out of the trust funds.
The requests were considered and the trustees had "viewed the books" before agreeing to give a grant, she said.
However, the loss incurred by the 2009 festival was "non weather-related".
