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 income and expenditure for three months to 30 June 2018, full year projected out-turn for 2018/19 and projected balance sheet values as at 31 March 2019.  Pensions and Investment Manager, Kirsty Robb, highlighted the main points of the report and appendices. She drew attention to an error which affected certain figures in Appendices 1 and 2 of the papers circulated and provided Members with correctly amended replacement appendices. The projected income and expenditure position in the amended Appendix 1 showed a projected surplus of £2,247 for the year.  Included were dividends from the Common Good Funds investment in Kames Capital Investment Fund amounting to £7,399.  This dividend projection was significantly more than previous dividends earned by Newton.  Dividends earned to date amounted to £2,179 which was in line with the overall 5% target and the monthly distribution profile projections provided by Kames.  The projected Balance Sheet as at 31 March 2019, shown in the amended Appendix 2 to the report, indicated a projected decrease in the reserves of £33,945 due to the depreciation charge.  The breakdown of the property portfolio was shown in Appendix 3. 

2.2       The current position of the Kames Capital investment was shown in Appendix 4 to the report. 30 June 2018 represented the end of the first full quarter that Common Good and Trust funds had held investments with the Kames Capital plc Diversified Monthly Income Fund.  Dividend receipts amounted to £2,179 for the quarter.  This was in excess of the 5% target. Although dividends were profiled to reduce slightly over the coming months, they were still projected to meet the projected total of £7,399 for the year.  The fund had a 0.59% unrealised loss in market value for the quarter, largely due to continued volatility in equity markets.  Overall, however taking account of the income received the fund had achieved a return of 0.9% to date.  Reference was made to the recent Trustees Seminar held at the Council, where further information was provided by Kames Capital and it was noted that this would be an annual event.  Members discussed the financial report and Mrs Robb provided further details where requested. After careful consideration Members agreed to transfer an additional £10,000 from the sum of cash deposited with Scottish Borders Council, to the Kames Capital investment fund.

            DECISION

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

(i)            the projected income and expenditure for 2018/19 in Appendix 1 (as amended);

(ii)          the projected balance sheet value as at 31 March 2019 in Appendix 2 (as amended);

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

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

(b)          AGREED the projected income and expenditure budget for 2018/19 as shown in Appendix 1 (as amended).

(c)          AGREED to request that the Chief Financial Officer transfer a further £10,000 from the cash deposited with Scottish Borders Council to the Kames Capital plc investment fund.

NOTE: The Financial Monitoring Report to 30 June 2018, which accompanied the agenda on the SBC website, has been replaced with the amended version showing the corrected figures.