Minutes:
Mr Harrington, the Finance Manager, advised the Board of the 2 month result to the end of May 2007. Mr Harrington advised that the Board at its meeting on 6th February 2007 agreed to set its net budget estimate for 2007/08 at £740,000. This estimate reflected the limited direct activity of the charity post the transfer of the asset and mainly comprised the maintenance of the parkland, maintenance of the through road, maintenance of the buildings within the park (excluding the Palace), security within the park and professional fees.
Mr Harrington went on to advise that arising from the uncertainty in respect of the actual date of receipt of the Order and subsequent transfer to the Firoka Group at that time the Board was advised that a further £65,000 per month was likely to be required for each month that the transfer of the asset was delayed beyond 31st March 2007. This sum was calculated on the basis of the local authority’s agreed forward financial plan less the £740,000 shown in the previous paragraph and calculated on a pro-rata basis for the whole year. The actual cumulative results for the accounting period to May 2007 (2 months) showed a positive variance on the budget estimate of £ 8K (6.5%) before the inclusion of transfer delay costs.
Mr Harrington further commented that the transfer delay costs have been incurred directly as a result of the continuing delay in the transfer of the whole operation. The costs were specific in nature being attributable to repairs and maintenance arising from the terms of the lease which required all assets to be maintained at the level described in the measured survey on an on-going basis. The inclusion of the additional costs incurred was a result of the delay in transferring the Palace building, which added a further net £181,000 to the deficit which was offset by the £130,000 additional funding being provided over the two months. The net effect on the budget at month 2 therefore was a negative variance of £43,000.
Mr Harrington advised that because of the uncertainty relating to the timing of the transfer there was the possibility that future expenditure arising from continuing delays may well exceed the profile of £65,000 per month. In addition the budget did not allow for legal fees arising from any continuing delays in the transfer process, and it was recommended that advice should be taken on the ability to recover any legal costs incurred through such delays.
In respect of comments from Councillor Hare in respect of on-going payments from the Council to the Trust in respect of its financial difficulties, especially in light of the alleged halting of the process of entering into a contract with the Firoka Group, and the resultant consequences of such action, the Chair advised Councillor Hare that this comment was in specific reference to the future of the asset and therefore would be addressed during Item 13 on the agenda.
The Chair, having ascertained whether there were any further relevant questions pertaining to the report, MOVED the recommendation as detailed below. It was:-
RESOLVED
That the income and expenditure for 2 months to the end of May 2007 contained in the report and summarised at Appendix 1 be noted.
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