Archived decisions

Supporting Financial Information

1. Introduction

1.1 The funding of Project Integra was a matter of considerable debate for Integra towards the end of 2002/03. The founding formula outlined below was approved at the Board meeting on 4^th April 2003. In the interest of clarity the budget has been split into two parts:

· Part 1 - Funding the Executive

· Part 2 - Funding Joint Projects

2. Part 1 - Funding the Executive

2.1 It is proposed to fund the Executive and Support functions entirely by subscription. This has two perceived benefits :

(a) It would be on an equitable per capita basis

(b) It would protect the core Integra functions from the vagaries of the market.

2.2 The Budget for the Executive for 2003/4 and following three years is set out in table 1 below.

Table 1

Expenditure	2003/4	2004/5	2005/6	2006/7
Executive Officer
Salary 1	58,000	72,600	72,600	72,600
Expenses	4,000	4,000	4,000	4,000
Recruitment & selection 2	16,000
Best Value Funding
Staff Time Senior Officer	13,700	0	0	0.00
Expenses	0	0	0	0.00
Other Support Staff
Legal Support	3,000	3,000	3,000	3,000
Financial Support 3
Secretariat
Communications & Research SLA 4	30,000	30,000	30,000	30,000
Project Integra Liaison Officer	12,000	12,000	12,000	12,000
Clerical & Committee Support	22,000	22,000	22,000	22,000
Room Hire	4,000	4,000	4,000	4,000
Stationery, IT etc	2,000	2,000	2,000	2,000
Other
Training Visits	2,500	2,500	2,500	2,500
Assure membership Fee	700	700	700	700
Total Expenditure	167,900	152,800	152,800	152,800

Notes

1. Salary will depend on review of EO terms and conditions

2. It is proposed that this one off cost be funded from income share, not subscription. This would reduce the bottom line in 2003/4 to £151,900.

3. Hampshire County Council have offered to provide financial support from 2003/4 as an adjunct to the Communications and research SLA without additional charge.

4. See Appendices 6 and 7 for details

2.3 Table 2 below sets out the proposed relative contributions from partners. The model uses the current contribution levels (equating to £17 per 1000 population) for the WDA contribution and a correspondingly higher rate for the WCAs (£74 per 1000). This is inclusive of the separate fees paid now by members for secretarial support. Under the model the Unitaries continue to pay twice as WDAs and WCAs at the respective rates quoted. HWS continue to pay 3,500 pa for the secretarial support as per present arrangements.

Table 2

Contributions to Executive and Secretariat
		£
	Population*	Subscription
Basingstoke	152,600	11,292
East Hampshire	109,400	8,096
Eastleigh	116,300	8,606
Fareham	108,100	7,999
Gosport	76,400	5,654
Hart	83,600	6,186
Havant	116,900	8,651
New Forest	169,500	12,543
Portsmouth	186,900	17,008
Rushmoor	90,900	6,727
Southampton	217,600	19,802
Test Valley	109,900	8,133
Winchester	107,300	7,940
HCC	1,240,800	21,094
HWS		3,500
Total		153,230
	* 2001 Census

2.4 It is acknowledged that this approach puts a short term burden on poor performing authorities. To overcome this it is proposed to maintain a short term reserve against which authorities could "borrow". The funds drawn would be paid back in future years when they have an income stream.

2.5 To facilitate this, all LA partners will have to sign a formal income share agreement, acknowledging that there is always a risk that income share may not materialise or that, worse, in the future it may be necessary to pay to dispose of material in this fashion. The short to medium term prospects of this occurring are remote as secure long term deals are being put in place with suppliers but it always remains a possibility.

3. Part 2 - Funding Collective Projects

3.1 There are two main options for Funding Projects:-

· Through subscriptions

· Through a portion of the income share

3.2 The Board have recommended that after 2003/4, the partnership raises the majority of project funds through subscription. Major projects will be identified through the ABP process. The Board acknowledge that the main drawback of this suggestion is that it would mean a rate being agreed on an annual basis. The main advantage is that partners could, for example ring fence their own income from the sale of recyclables to provide a source of revenue for collective contribution. Several partners have indicated that they do not wish their income share to be paid out but held "on account" from which their annual contributions can be drawn.

3.3 Table 3 Below is for illustrative purposes only and shows the level of contribution from each authority required to raise £150,000 for collective projects. It is recommended that a minimum of £150,000 per annum is retained by the Board although the actual sum should be subject to an annual recommendation prior to the each years' business planning cycle as it might be beneficial to fund projects over and above the usual annual sum if wider benefits were likely to accrue to the partnership.

Table 3

Authority	Contribution
	£
Basingstoke	13,917
East Hampshire	9,977
Eastleigh	10,607
Fareham	9,859
Gosport	6,968
Hart	7,624
Havant	10,661
New Forest	15,458
Portsmouth	17,045
Rushmoor	8,290
Southampton	19,845
Test Valley	10,023
Winchester	9,786
HCC	Nil
HWS	Nil
Total	150,060
Project subscription rate = 9.12p per capita

3.4 In the above model, The contribution is only made by WCAs as HCC does not have opportunity to derive income. Accordingly the Unitaries only pay as WCAs. No contribution from HWS is assumed.

3.5 For 2003/4 It is suggested that a portion of income share is retained for projects and to cover other collective revenue costs and the remainder is distributed to WCAs. In future all income, less any deductions collectively agreed, would be available for redistribution or to be held on account against each authority's name.

3.6 To date there is total of £701,800 of income either already accumulated or estimated up to the end of the 2002/3. A surplus of £33,000 from the 2002/03 trading account is also available giving a total to be apportioned of £734,800.

3.7 It is proposed that this total be apportioned as set out in Table 4

Table 4

Purpose	Amount £
Buffer against contractual risk1	140,000
Bank	25,000
Additional short term MRF capacity2	150,000
Executive Officer Appointment Process	16,000
PI Projects Fund	200,000
Redistribution (or to holding account)	203,800
Total	734,800

Notes

1. replaces current 18 month delay in payment (equivalent to around 6 months income at predicted rates for 2003/4).

2. This figure covers the estimated premium cost (£113,000) of processing recyclables at MRFs outside the County in order to avoid landfilling any material and provides some flexibility if predictions are exceeded.

3.8 Table 5 below shows how this is apportioned in relation to tonnages of dry mixed recyclate delivered per authority.

Table 5

	Estimated Total Fund £	Retained For Projects £	Available For Redistribution £	Other* £
Basingstoke	60,512.65	16,471.56	16,784.52	27,256.57
East Hants	61,599.73	16,767.46	17,086.04	27,746.22
Eastleigh	108,245.01	29,464.32	30,024.14	48,756.55
Fareham	87,189.40	23,732.98	24,183.90	39,272.52
Gosport
Hants	275.43	74.97	76.40	124.06
Hart	32,892.10	8,953.24	9,123.35	14,815.51
Havant	64,445.07	17,541.97	17,875.26	29,027.84
New Forest	105,712.63	28,775.01	29,321.73	47,615.89
Rushmoor	15,402.60	4,192.59	4,272.25	6,937.76
Test Valley	42,073.68	11,452.47	11,670.06	18,951.15
Winchester	52,665.25	14,335.50	14,607.87	23,721.89
Portsmouth	70,164.17	19,098.71	19,461.58	31,603.88
Southampton	575.41	156.63	159.60	259.18
Sub Total	701,753.13	191,017.39	194,646.72	316,089.02
2002/03 Surplus	33,000.00	8,982.61	9,153.28	14,864.11
TOTAL	734,753.13	200,000.00	203,800.00	330,953.13

* other = short term MRF capacity, contractual buffer, bank and Executive Officer appointment process (see table 4 for totals)

3.9 Table 6 shows the tonnage of material delivered by each authority based on Waste Volume Service Plan predictions

Table 6

	Tonnes
	2003/04	2004/05	2005/06	2006/07
Basingstoke &Deane	8400	8400	8433	8787
East Hants	11016	11236	11461	11690
Eastleigh B.C	10080	10080	10239	10443
Fareham	8400	8579	9008	9459
Gosport	3375	4500	7500	7500
Hart D.C	4800	6980	7765	8100
Havant B.C	6420	7051	7458	7624
New Forest	10300	12150	12650	13150
Portsmouth	9370	12000	13000	13500
Rushmoor	4650	5700	6000	6300
Southampton	1922	13623	13990	14410
Test Valley	4980	5310	5629	5854
Winchester	6960	7242	7534	7838
Grand Total	90673	112851	120667	124655

3.10 Table 7 shows income available for distribution based on 72,000 tonnes of material processed in 2003/4 but thereafter, income received on all material processed. This prediction assumes that the Alton MRF is on line shortly after the start of 2004/5 and that the average price per tonne is £3.13, being the average income per tonne during the current financial year.

Table 7

	Income per authority
	2003/04	2004/05	2005/06	2006/07
Basingstoke	20877	26292	26395	27503
East Hants	27379	35169	35873	36590
Eastleigh	25053	31550	32048	32687
Fareham	20877	26852	28195	29607
Gosport	8388	14085	23475	23475
Hart	11930	21847	24304	25353
Havant	15956	22070	23344	23863
New Forest	25600	38030	39595	41160
Portsmouth	23288	37560	40690	42255
Rushmoor	11557	17841	18780	19719
Southampton	4777	42640	43789	45103
Test Valley	12377	16620	17619	18323
Winchester	17298	22667	23581	24533
Totals	£ 225,360	£ 349,255	£ 374,652	£ 386,978
Tonnes	72,000	111,583	119,697	123,635

3.11 Table 8 is as per table 7 but with less a pro-rata contribution from each authority totalling £150,000. Income is still assumed at £3.13 per tonne.

Table 8

Income per authority less £150,000 contribution for projects
	2003/04	2004/05	2005/06	2006/07
Basingstoke	6981	15127	15912	16930
East Hants	9156	20234	21626	22523
Eastleigh	8378	18152	19320	20120
Fareham	6981	15449	16997	18224
Gosport	2805	8104	14152	14450
Hart	3989	12570	14652	15606
Havant	5336	12698	14073	14689
New Forest	8561	21880	23869	25336
Portsmouth	7788	21610	24530	26010
Rushmoor	3865	10265	11321	12138
Southampton	1597	24532	26398	27763
Test Valley	4139	9562	10621	11279
Winchester	5785	13041	14216	15101
TOTALS	75360	203224	227688	240170
Tonnes	72000	112503	120667	124655

4. Expenditure

4.1 The following projects have been identified as having a resource commitment.

Minor Projects Fund	40,000
Glass Collection	TBA
Community Engagement Team	20,000
Biowaste	30,000
MRF Contamination Analysis	20,000
2020 Vision / Best Value	30,000
Waste Minimisation Projects	15,000
Best Value	20,000
Total	175,000

4.2 The minor Projects fund would be a pool of income which the executive officer, in consultation with the Strategy Officers Group could use for projects which emerge during the course of the year. Examples of the sort of projects include the include the Southampton University transport study, the Alton MRF rail link feasibility study and the research into attitudes towards textile recycling. In addition, funds in this area could be used to pump prime external funding bids.

4.3 The kerbside glass collection project is described in Appendix 3. At present the costs are not known but these will be outlined in a report to the Board in July 2003.

4.4 The Community Engagement Team would be subject to a bid for external funding, possibly through the revised landfill tax credit scheme. £20,000 is retained as a 10% contribution.

4.5 The exploration of biowaste solutions is outlined in Appendices 1 and 5 as a major issue for Integra over the coming years. This funding will support consultancy and research work.

4.6 The MRF Input analysis is described in Appendix 6. The aim of the study is to investigate the level of contamination in MRF input material from a number of different waste collection authorities. In particular the study aims to address the question of whether contaminant levels are higher from areas where alternate weekly collection schemes are in operation. A number of authorities have AWC schemes under active consideration or trial at present. The work will be undertaken by a specialist consultant. Quotations are being sought but £20,000 should be sufficient to provide a robust analysis.

4.7 The process of consulting with the public over the future of Integra is vital and sufficient resources should be set aside for this process. It is recommended that £30,000 is allocated to cover the cost of countywide publicity.

4.8 The Waste Minimisation Group (Appendix 2) have recommended that £15,000 for three years is set aside for waste minimisation projects.

4.9 In all the above cases a detailed project plan will be submitted and approved by the Officer Strategy Group prior to the release of funding. Appendix 12 sets out a standard proforma . Should other major projects or additional resources for the above projects be requested, these would be referred to the Board.