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 the details of income and expenditure for the Selkirk Common Good Fund for the year 2017/18 including balance sheet values as at 31 March 2018 and proposed budget for 2018/19. Senior Finance Officer, John Yallop, highlighted the main points of the report and appendices.  Appendix I to the report, provided detail on income and expenditure for the 2017/18 which showed a surplus of £24,688. Additional dividend income and lower than anticipated property expenditure was off-set by costs associated with the investment fund transfer to Kames Capital and lower than anticipated rental income, resulting in variance of £1,292 to the surplus of £25,982 reported at the 14 February 2018 meeting. Appendix 2 provided a projected Balance Sheet as at 31 March 2018.  It showed a decrease in the reserves of £40,787.  An addition amounting to £20,392 had been made to the fixed assets in the year to 31 March 2018, representing the work carried out replacing stone pillars at Selkirk Victoria Hall. A breakdown of the property portfolio and details of the annual rental income by individual property was shown in Appendix 3 to the report.  Actual rental income received was £13,065 lower than anticipated due to a lease termination by Electricity Network Solutions at Smedheugh Farm and agreed short term rent reductions at 26 and 28 Market Place.  With regard to non-property related income, dividends from Newton until the point of disinvestment amounting to £4,367 were included as well as the first monthly dividend from Kames Capital amounting to £730.  Mr Yallop went on to give an update on the current position with regard to the Kames Capital PLC Investment as detailed in Appendix 4 to the report. The disinvestment from the Newton Fund and opening of the Kames Capital account was at a time of market volatility resulting in a negative impact on the market value of the Newton Fund and a realised loss on investment of £3,062.  Unfortunately, due to the increase in market volatility which started in February, the value of the Kames Fund fell by 0.3% as at 31 March 2018, resulting in an unrealised loss at this time of £588. 

2.2    Mr Yallop referred to the projected budget figures for 2018/19 and drew attention to certain elements, referring to the projected surplus for the financial year 2018/19 of £29,133.  With regard to non-property related income he explained that the projected budget for 2018/19 included a full year estimate of the Kames dividend amounting to £11,568, reflecting the fact that Kames had historically generated, and also targeted dividend income in the region of 5% of total investment. This return had been reflected in the monthly dividends received in the first two months of the new financial year. In accordance with the agreed Scottish Borders Council budget for 2018/19 there would be no grant from the Council to offset the Central Support Charge to Common Good Funds. Members discussed the budget for the forthcoming year and received answers to their questions from Mr Yallop. He explained that the projected expenditure of £15,000 on property excluded the agreed expenditure to repair the town hall clock as the latter would be accounted for in capital expenditure.

DECISION

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

(i)            the actual income and expenditure for 2017/18 in Appendix 1;

(ii)          the final balance sheet value as at 31 March 2018 in Appendix 2;

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

(iv)         the current position of the Kames Capital investment Fund in Appendix 4.

(b)          AGREED the proposed budget for 2018/19 as shown in Appendix 1.