ASSET MANAGEMENT GROUP 18 JUNE 2015 SUBJECT: REPORT BY: LEAD OFFICER: FINANCIAL MONITORING UPDATE REPORT 2014-15 OUTTURN DIRECTOR OF RESOURCES LOUISE ALLISON, FINANCIAL SERVICES MANAGER 1. Purpose of Report 1.1 To report to the Asset Management Group the final position at the end of in relation to the property budgets as contained within the Medium Term Financial Strategy 2014-19. 2. Executive Summary The results of performance against targets and budgets within the Medium Term Financial Strategy that are monitored by this group are summarised below for the year 2014-15. The full details and explanation of variances are contained within the main body of the report at sections 3 and 4. 2.1 GIP Capital Receipts Target In 304,608 has been received against the revised full year target of nil. This consisted of General Fund receipts of 239,099 and Housing General Fund (HSGF) receipts arising from repaid home improvement grants of 65,509. The HSGF receipts have been applied towards funding the expenditure on improvement grants. The MTFS 2015-20, approved by Council on 3rd March 2015, replaced the capital receipts targets for the years to 2016/17 with prudential borrowing, reflecting a more achievable timescale for realising the receipts. 2.2 Planned Capitalised Maintenance Budget At the end of, 318,473 had been spent against the full year budget of 266,138, giving an overspend of 52,335. This represents 20% of the total budget and was mainly due to the early start on the City Hall lifts scheme for which had been included in the 2015/16 budget. The scheme budget will be re-profiled to match the expected spend. 2.3 Revenue Repairs and Maintenance Budget At the end of, 648,160 has been spent against the full year budget for corporate buildings revenue repairs and maintenance of 619,210. An underspent of 110,000 on Yarborough Leisure Centre R&M has been transferred to an earmarked reserve for use in 2015/16. Also works on priority one and priority two property repairs have been funded from a reserve totalling 98,770, meaning an underspend on corporate repairs and maintenance of 17,690. As agreed previously this will be put into an repairs and maintenance reserve to fund future works.
2.4 Investment Portfolio Revenue Income Target At the end of (1,809,750) income was received against an annual income target of (1,825,230) 3. Background 3.1 There are a number of budgets, approved as part 5-year Medium Term Financial Strategy 2014-19, that are being monitored by this Group. These budgets are as follows: General Investment Programme (GIP) Capital Receipts Target General Fund (GF) Loss of Revenue Income Target Housing Investment Programme (HIP) Capital Receipts Target Housing Revenue Account (HRA) Loss of Revenue Income Target Capital Planned Maintenance Budget Revenue Repairs and Maintenance Budget Investment Portfolio Revenue Income Target The outturn position for is shown below in section 4. 4. Financial Position 4.1 At the end of 304,608 of capital receipts have been received against a target of nil. The final position is summarised in the table below: GIP Capital Receipts Target Statement General Fund Capital Receipts Target 0 Actual Sales: St Peter at Arches toilets and snooker club Lawrence Close former depot Repaid loan to Abbey Centre 157,349 61,750 20,000 Other receipts Repaid home improvement grants 65,509 Total Receipts for 304,608 4.2 The outturn expenditure in the GIP gave rise to a borrowing requirement of 2,010,283. The MTFS 2015-20, approved by Council on 3rd March 2015, replaced the capital receipts targets for the years to 2016/17 with prudential borrowing, reflecting a more achievable timescale for realising capital receipts. Adjusting for the outturn position at 31 March 2015, this gives rise to a borrowing requirement of 5,470,841 in 2015/16 and 725,000 in 2016/17, giving a total of 6,195,841. If capital receipts should be realised during the first three years, then the following
options for use of the receipts will be considered:- reduction in level of assumed prudential borrowing investment in existing assets investment in new income generating assets reduction of future years capital receipts targets use for other strategic priorities Current cashflow forecasts show that the borrowing need for both the current year and 2015/16 to 2016/17 can be resourced internally, thereby reducing the cost of borrowing. However, cashflow requirements will be kept under constant review so that should it become necessary to take external borrowing, this will be taken at the most advantageous time for borrowing rates. 4.3 General Fund (GF) Loss of Revenue Income Target The original loss of income on asset sales budget for was 225,380 to cover income lost (e.g. rents) on the sale of assets. There is no loss of income associated with the disposals in and the budget has been used as a one-off contribution to the towards Financial Sustainability Programme in. 4.4 HIP Capital Receipts Target In line with the HRA Business Plan there are no capital receipt targets for the HIP. Any capital receipts received are windfall amounts that will be used to support the delivery of the HIP in line with the Business Plan. In, there were no capital receipts. 4.5 Housing Revenue Account (HRA) Loss of Revenue Income Target there is no annual budget for loss of income on asset sales within the HRA Business Plan. There have been no property sales in. 4.6 Capital Planned Maintenance Budget is monitored by the Strategic Plan Implementation Team (SPIT). The original budget for in the MTFS 2014-19 was 299,228. This has been re-profiled through SPIT to reflect the anticipated level of work to be completed in year following the results of property condition surveys. The revised budget and the expenditure in are shown below. The expenditure outturn was 120%, representing an overspend of 52,335, mainly due to the early start of the City Hall lift replacement scheme which was included in 2015/16 in the MTFS 2015-20. The budget will be re-profiled from 2015/16 to match the phasing of the expenditure.
Outturn Original Budget Outturn Variance Budget SPIT as at Scheme 23/02/15 31/03/15 Planned Capitalised Works 299,228 8,770 0 (8,770) Structural remedial works to Lucy Tower St car park 0 81,678 95,043 13,365 Structural remedial works to Thornbridge car park 0 81,222 43,644 (37,578) Other schemes 0 94,468 73,282 (21,186) City Hall new lifts 0 0 106,504 106,504 TOTAL 299,228 266,138 318,473 52,335 4.7 Revenue Repairs and Maintenance Budget The original budget for was 648,160 and at the end of the year 619,244 ad been spent. The outturn position for is shown below: Cost Centre Outturn Budget (Full Year) Variance City Hall 75,120 143,440 (68,320) Guildhall 5,150 14,200 (9,050) Industrial Estates 8,440 8,800 (360) Lincoln Properties 143,350 45,500 97,850 City Square and Cornhill Markets 610 1,320 (710) Markets 16,890 18,090 (1,200) Crematorium 17,230 10,520 6,710 Cemeteries 5,150 4,490 660 Old Burial Grounds 0 5,370 (5,370) Public Conveniences 40,560 16,120 24,440 Abbey Neighbour Office 950 0 950 Arboretum 7,040 1,040 6,000 Boultham Park 12,330 2,070 10,260 Hartsholme Country Park 23,360 13,960 9,400 Recreation Grounds 99,420 65,870 33,550 Commons 3,760 5,670 (1,910) Grandstand Community Centre 19,280 4,770 14,510 Moorland Community Centre 20,930 4,090 16,840 St. Giles Community Centre 12,510 4,970 7,540 Sudbrooke Community Centre 4,860 9,550 (4,690) Bracebridge Community Centre 5,960 6,820 (860) Allotments 4,530 7,500 (2,970) The Lawn 5,800 47,000 (41,200) Beaumont Manor 4,090 2,430 1,660 Yarborough Leisure Centre 27,370 137,370 (110,000)
Central Neighbourhood Team 10 0 10 DOR Property Management (4,500) 0 (4,500) City Hall Car Park 5,260 0 5,260 Flaxengate 4 Car Park (170) 0 (170) Tentercroft Street Car Park 590 0 590 Thornbridge Car Park 5,220 0 5,220 Castle Hill Car Park 80 0 80 Langworthgate Car Park 270 0 270 Lucy Tower Car Park 11,140 0 11,140 Broadgate Car Park 12,970 0 12,970 Westgate Car Park 9,530 0 9,530 Lawn Car Park (170) 0 (170) Car Parks 270 55,900 (55,630) Chaplin St Car Park 1,360 0 1,360 City Bus Station 11,260 10,590 670 Housing Management North 80 0 80 De Wint Court 60 0 60 Housing Estate Shops 200 0 200 Newland Street West Depot 1,060 710 350 TOTAL 619,210 648,160 (28,980) 4.8 The repairs and maintenance budget is allocated to the various cost centres at the start of the financial year; however, due to the significant reactive element of the budget, it is managed as a single resource. The under spend of 28,980, in the table above, has been reduced by a transfer to an earmarked reserve of the 110,000 underspend on Yarborough Leisure Centre. In addition works on priority one and priority two property repairs have been funded from contribution from reserves of 98,770, resulting in an underspend on corporate repairs and maintenance of 17,690. As agreed previously this will be put into a repairs and maintenance reserve to fund future works. 4.9 Investment Portfolio Revenue Income Target The budget for revenue income to be received from the investment portfolio for is 1,825,230, and income received in was 1,809,750. Currently there are two areas of concern being the Lawn, which currently has no tenants and Industrial Estates, which has seen all of Sadler Road units vacant all year (units have subsequently been re-let). The details of each item are shown in the table below: Investment Budget Actual Variance (full year) Lincoln Properties (551,320) (517,380) (33,940) Industrial Estates (390,120) (408,210) 18,090 The Lawn (3,250) (28,350) 25,100 Central Markets (240,470) (256,250) 15,780 City Hall (430,160) (416,460) (13,700) The Terrace (194,430) (198,580) 4,150 TOTAL (1,809,750) (1,825,230) 15,480
5. Significant Policy Impacts 5.1 There are no significant policy implications directly arising from this report. 6. Organisational Impacts 6.1 Finance - The financial implications are contained within section 4 above. 6.2 Legal There are no legal implications arising from this report 7. Risk Implications 7.1 There are no risk implications arising from this report 8. Recommendations 8.1 Asset Management Group is recommended to note the contents of the report. List of Background Papers: Lead Officer: None. Louise Allison, Financial Services Manager Telephone 873361