Agenda item

Consider report by Executive Director Finance & Regulatory (copy attached).

2.1       There had been circulated copies of a report by the Executive Director Finance & Regulatory providing the details of income and expenditure for the Selkirk Common Good Fund for the year 2019/20, including balance sheet values as at 31 March 2020 and proposed budget for 2020/21.  Treasury Business Partner, Sara Halliday, highlighted the main points of the report.   Appendix 1 to the report provided the actual income and expenditure position for 2019/20.  This showed a surplus of £41,230 for the year, which was an increase from the projected surplus figure reported at the 19 February 2020 meeting, due to the sale of a piece of land at South Common Farm.  Included in the final outturn were dividends from the Common Good Funds investment in Kames Capital amounting to £11,313 which was less than the overall 5% target and the monthly distribution profile projections provided by Kames. This was as a result of the market value dropping due to the impact of the COVID-19.  As the full economic impact of COVID-19 was not yet known the dividend budget had been reduced to reflect 2.5% compared to the target of 5%.  Ms Halliday also drew attention to the proposed property repair budget within the proposed budget for 2020/21 shown in Appendix 1.  Following advice provided from Property Services, it was proposed to increase the property repair budget by £77,125 which was mainly to allow for the planned maintenance on Smedheugh Farm £34,000 and Linglie Farm £29,000.  A list of recipients was included within the report who were in receipt of grants and donations from the Fund, the total amount being £28,037 which was over the budget of £23,000 due to an increase in the number of applications approved. An actual balance sheet was provided in Appendix 2 of the report, showing an increase in the reserves of £863,606 due to the revaluation of properties offset slightly by unrealised loss on the Kames Investment Fund.  Appendix 3 to the report showed a breakdown of the property portfolio, showing the effect of the revaluation. The value of the Kames Capital Investment Fund to 31 March 2020 was shown in Appendix 4 to the report. The fund had a 5.98% unrealised loss in market value since investment, largely due to continued volatility in investment markets.  Overall, however taking account of the income received the fund had achieved a return of –4.83% since investment in February 2018.  As a result of the COVID-19 global markets across most asset classes had seen a drop, resulting in an overall negative return for 2019/20.  Markets had however seen a bounce back during April and May which had resulted in some of the unrealised loss being negated.

2.2       In a discussion of the report, attention was drawn to a mathematical error in the revaluation figures in Appendix 3 to the report, which was issued with the agenda, although this did not affect the final balances. Ms Halliday confirmed that this would be corrected and an amended appendix circulated.  In response to a question about the whereabouts of moveable assets, owned by Selkirk Common Good, previously housed in the Town Hall, Solicitor Jane Webster confirmed that, under the terms of the Community Empowerment Act, a list of moveable assets was currently being prepared by legal services.  The Chairman agreed to pass on any information he had about these assets which may be helpful in compiling this list.

DECISION

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

(i)               actual income and expenditure for 2019/20 in Appendix 1;

(ii)             final balance sheet value as at 31 March 2020 in Appendix 2;

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

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

(b)       AGREED the proposed budget for 2020/21 as shown in Appendix 1 to the report.                 

Note:  with reference to paragraph 2.2 above, an amended version of Appendix 3 to the Monitoring Report is attached to this Minute.