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Agenda item

Cobtree Manor Estate Financial Position

Minutes:

Mr Paul Holland, the Senior Finance Manager (Client), presented a report to the Committee which set out the current financial position of the Estate as at 30 June 2018. 

 

The Committee noted the following:-

 

Golf Course – There were no particular issues arising

 

Manor Park – There had been a small overspend due to some tree clearance works which had been required for highways compliance purposes and additional costs associated with the recent break-ins at the Café/Visitor Centre.

 

Kent Life – Following the change to the payment profile for the annual management fee, two instalments would be paid in arrears in September and April.

 

Café/Visitor Centre – There had been an overspend in the staffing budget prior to the handover to DAGT.  This had been due to a shortage of staff and paying overtime had been the only solution to enable the facility to remain open. There had been a number of additional repairs and maintenance costs associated with the recent break-ins.

 

However, it was noted that some of the costs could be recovered as part of the insurance claims that are in progress for these incidents.

 

Mytime Settlement – An adjustment would be made to the budget following the sum written off which would have an adverse impact on the resources available to the Trust. 

In response to questions from Members, Officers advised that:-

 

·  The Trust should be able to recover some if not all of the overspend from the insurance claim for the break-ins.

·  That the grounds work tended to be loaded at the beginning of the year and there were no additional works planned.

 

VAT – Mr Holland confirmed that VAT rules state that rental contracts are classed as exempt for VAT purposes.  However, any VAT charged on associated supplies of goods and services that are directly attributable to the activities of the estate cannot be reclaimed by the Trust.  Although VAT can be reclaimed on the car park and the Café/Visitor Centre. 

 

Recharges - The Committee expressed concern about the amount of recharges that were attributed to the Trust and in response Ms Dawn Hudd, the Head of Regeneration and Economic Development, felt that some of these would diminish as there were only two members of staff now directly employed by the Council.

 

The Chairman advised that the Audit, Governance and Standards Committee had already requested that a Members Briefing session be held before the November meeting of that Committee to discuss the whole element of recharges across the Council. 

 

Financial Management System – The Committee noted that following the External Auditors’ recommendation that the Trust should have a separate financial management system, the Sage accounting package was identified as being the most suitable.  A dedicated resource within the finance team to progress implementation had been identified and a project plan drawn up.

 

However, it was noted that the previous costs quoted by Agresso had revealed that the cost of that system may be less expensive than previously advised.  Mr Holland advised that a revised costing was being pursued and should it be comparable to the cost of a Sage system then a further report would be brought back to the Committee.

 

However, the Committee agreed that the costs should be emailed to Committee Members to avoid any delay in the implementation of the system.

 

Cashflow Projection – It was noted that future income was far more certain with the contracts in place for the Golf Course, Kent Life and the Café/Visitor Centre, with a potential operational surplus of approximately £100,000.

 

Mr Holland also advised that the cost of the car park resurfacing works could cause a cash flow issue in the short term.  However, following discussions with the Director of Finance and Business Improvement, it had been agreed that the Council would be prepared to defer any sums due to the Council as part of the arrangement with the Trust to ensure that there would be sufficient resources available to meet ongoing obligations.  This would mean that the sum could be spread over 3 or 4 years. 

 

In response to a question from a Member, Ms Hudd advised that the provision of a small solar farm on the estate would not necessarily assist the Trust as advantageous feed-in tariffs were no longer available.   

 

RESOLVED:

 

1)  That the current financial position be noted.

2)  That the progress to date with the separate financial management system be noted.

3)  That the situation with the VAT status of the Trust be noted.

4)  That the updated cashflow projection be noted.

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