Agenda item

Consider report by Chief Financial Officer (copy attached).

2.1       There had been circulated copies of a report by the Chief Financial Officer providing details of the income and expenditure for the nine months to 31 December 2017, a full year projected out-turn for 2017/18 and projected balance sheet values as at 31 March 2018.  The Pensions and Investments Manager, Kirsty Robb, highlighted the main points of the report and appendices. Appendix 1 to the report provided a projected income and expenditure position, showing a projected surplus of £2,630 for the year.  There had been no requests for financial assistance from the Galashiels Common Good Fund and the approved budget of £500 remained to be disbursed. The cash held by the Fund was projected to be £12,509 at 31 March 2018. The projected Balance Sheet as at 31 March 2018, shown in Appendix 2 to the report, indicated a projected decrease in the reserves of £33,562 due to the depreciation charge.  The breakdown of the property portfolio detailing the values of the individual properties and projected depreciation charges for 2017/18 was shown in Appendix 3. 

2.2       Appendix 4 showed the value of the Newton Fund to 31 December 2017.  The fund produced a positive return in the quarter to 31 December 2017, albeit below its benchmark (0.4% against benchmark of 1.1%).  For the second consecutive quarter the 5 year annualised return, which the fund was ultimately measured against was below benchmark (4.1% against 4.4%).  Following the Council approved procurement exercise undertaken in November 2017, Kames Capital had been appointed as a new Fund Manager for Common Good and Trust Fund investments.  Kames Capital offered a Diversified Income Fund, designed to give the same capital preservation and divided income structure but with a track record of better returns on capital and dividend income.  The appointment of this Fund Manager was in line with the Common Good & Trusts Investment Strategy and was approved at Council on 21 December 2017. The transfer of investments from Newton to Kames was carried out in early February.  The market value of the Newton Investment at this time had resulted in a loss on the original investment (£878).  However the first part year dividend received from Newton off-set this loss.  The year-end unrealised gain or loss on monies invested in Kames would not be known until their fund valuation was received on 31 March 2018.  Mrs Robb advised that all Members would be invited to a presentation by Kames Capital, on their investment strategy, which was scheduled for August 2018.

2.3       Members discussed and asked officers questions on the property portfolio shown in Appendix 3 to the report. In particular they discussed the attributes of Old Gala House and hoped that Live Borders would be able to raise the profile of the building as a visitor attraction.  Attention was drawn to correspondence from the President of Galashiels Golf Club about winter maintenance of the access road and the provision of grit by the Council.  The Estates Manager, Neil Hastie, explained that the wording of the lease placed responsibility for maintenance of the property with the tenant but that there was no specific reference to the private road.  He suggested that officers should hold a meeting with Club representatives to discuss what could be done in future years.

            DECISION

(a)       AGREED the projected income and expenditure for 2017/18 in Appendix 1 to the report.

(b)          NOTED within the appendices to the report:-

(i)            the projected balance sheet value as at 31 March 2018 in Appendix 2;

(ii)        the summary of the property portfolio in Appendix 3; and

(iii)         the current position of the investment in the Newton Fund in Appendix 4.