Archived decisions

Contact: Tom Niedrum, ext 6931 email: [email protected]

David Evans, tel 01489 576387 email: [email protected]

1. Summary

1.1 The final accounts of the Harbour Authority for the year ended 31 March 2006 are being presented to the River Hamble Harbour Board for approval.

1.2 This report compares the River Hamble income and expenditure at 31 March 2006 with the revised 2005/06 budget.

1.3 In summary, the Harbour Undertaking and Management of Moorings has made a surplus of £24,679 to add to reserves. A large part of this is due to higher than budgeted miscellaneous income, and a new source of income which was not budgeted for (Harbour Dues for dry-sailed vessels). There have also been savings in premises, office and transport running costs as well as environmental areas.

1.4 The Visitor Centre Partnership has made a deficit of £9,280. This is because, despite underspending across all budget heads, there was significant under recovery on visitor income.

2. Corporate Strategy

2.1 This report supports Aims 2 and 5 of the Corporate Strategy (Stewardship of the Environment and Improving Services).

3. Harbour Undertaking and Management of the Moorings

3.1 In 2005/06, the Harbour Undertaking has made a surplus of £24,679 (comprising £19,557 additional income and £5,122 less expenditure).

3.2 This is broken down as follows:

	Outturn 2005/06 £	Revised Budget 2005/06 £	Surplus / (-) Deficit 2005/06 £
Income	523,757	504,200	19,557
Less: Employees	279,138	278,600	-538
Premises	15,662	18,300	2,638
Transport	23,466	28,700	5,234
Supplies/Services	180,812	178,600	-2,212
Gross Expenditure	499,078	504,200	5,122
SURPLUS / (-) DEFICIT	24,679	0	24,679

3.3 A full breakdown of expenditure and income is shown in Appendix 1A.

3.4 Explanations for the variation against budget for each category of spend/income are provided in Appendix 1B.

3.5 The surplus of £24,679 is transferred to reserves, which will further help reduce the deficit, over and above the planned £38,000 transfer under budgetary pressures.

4. Visitor Centre Partnership

4.1 In 2005/06, the Visitor Centre Partnership made a deficit of £9,280 (comprising a shortfall on income of £13,660, less reduced expenditure of £4,380).

4.2 This is broken down as follows:

	Outturn 2005/06 £	Revised Budget 2005/06 £	Surplus / (-) Deficit 2005/06 £
Income	66,740	80,400	-13,660
Less: Employees	24,790	25,200	410
Premises	2,365	5,300	2,935
Transport	309	600	291
Supplies/Services	48,556	49,300	744
Gross Expenditure	76,020	80,400	4,380
SURPLUS / (-) DEFICIT	-9,280	0	-9,280

4.3 Appendix 2A shows the 2005/06 outturn and the revised budget figures for the Visitor Centre Partnership.

4.4 Explanations for variations against budget for each category of income and expenditure are shown in Appendix 2B.

5. Reserves

5.1 Total Reserves for the River Hamble stood at £285,665 at 31 March 2006. This comprises:

Reserve	£
Harbour Undertaking	-24,920	(Deficit)
Capital Receipts	270,595
Boat Replacement Fund	26,490
Fisherman's Jetty Fund	13,500
Visitor Centre Partnership	0
TOTAL	285,665

5.2 The movement in the year on the Reserves is detailed in Appendix 3.

5.3 The deficit balance on the Harbour Undertaking is being reduced faster than the three year plan to bring reserves back into credit, which was reported last year.

5.4 Interest charged or received on reserve balances has been based on the average 7 day rate throughout the year, less 0.5%.

5.5 The 4th Capital receipt of £100,000 was received from The Crown Estates for the sale of the piles, giving a balance on the Capital Receipt Reserve of £424,242. This was used to eradicate the deficit on the Partnership Account in accordance with the recommendation approved by the Harbour Management Committee and Harbour Board in last year's Final Accounts report.

5.6 A new reserve has been established for boat replacement and was funded from revenue, and a further reserve has been established to manage initial costs and further expenditure and income streams associated with the Fisherman's Jetty.

Recommendation

That this report be approved by the River Hamble Harbour Board.

956/TN/DE

APPENDIX 1A

HARBOUR UNDERTAKING & MANAGEMENT OF MOORINGS 2005/06

APPENDIX 1B

HARBOUR UNDERTAKING & MANAGEMENT OF MOORINGS 2005/06

Explanation of variation against budget

1 Income

	Outturn 2005/06 £	Revised Budget 2005/06 £	Surplus / (-) Deficit 2005/06 £
Misc. Income (see note i)	28,123	13,700	14,423
Harbour Dues (ii)	367,513	360,800	6,713
Supervision Charges	97,230	98,900	-1,670
Crown Estate Funding (iii)	30,750	30,700	50
Rates	141	100	41
TOTAL	523,757	504,200	19,557

(i) There was additional Miscellaneous income of £14,423. This was, in the main, due to:

· Higher than anticipated income from commercial operators

·

· £6,460 settlement from The Crown Estate for moving boats between moorings as necessary as a result of the pontoon work.

· A £4,186 prior year accounting adjustment re a creditor provision previously set up where actual costs were lower than anticipated

(ii) £7,776 Harbour Dues, which weren't budgeted for, offsetting Harbour Dues for mid-stream moorings were under budget. This was due to a delay in the J pile work and other moorings being lifted.

(iii) Crown Estate funding (income) was in line with budget

2 Employees

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Salaries	275,950	275,800	-150
Training (i)	3,106	2,774	-332
Staff Advertising and Interview Expenses (ii)	82	26	-56
Other Employee Expenses	0	0	0
TOTAL	279,138	278,600	-538

(i) Training costs were £332 overspent. This includes training courses for Enforcement, Oil Spill Response and First Aid.

(ii) Expenditure relates to the cost of hiring a room for interviews of Harbour Board candidates.

3 Premises

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Repairs and Maintenance (i)	671	2,200	1,529
Electricity (ii)	373	1,000	627
Gas	518	400	-118
Rent/Rates (iii)	2,537	2,550	13
Rental of Workshop	10,500	10,500	0
Water/Sewerage (ii)	397	400	3
Fixtures, Fittings and Repairs (iii)	37	700	663
Cleaning	384	250	-134
Burglar Alarms/Security (iv)	245	300	55
TOTAL	15,662	18,300	2,638

(i) The repairs and maintenance budget was anticipated to be required for health and safety modifications. None of these were required during 2005/06.

(ii) Electricity charges were less than anticipated.

(iii) Fixtures and Fittings budget not required

(iv) Rates were paid to Fareham Borough Council (£2,532). £5 was paid to D. Olley for the rental of the site of the office.

(v) Security payments were paid to SECOM Plc.

4 Transport

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Repairs and Maintenance (i)	15,263	14,500	-763
Vehicle Running (ii)	2,344	6,000	3,656
Tools (iii)	874	1,900	1,026
Car Allowances/ Staff Travel (iv)	3,655	5,000	1,345
Insurance	1,330	1,300	-30
TOTAL	23,466	28,700	5,234

(i) Repairs and Maintenance covers the ongoing repair and maintenance of the boats. Costs incurred included engine servicing, propeller replacement, lift out/lift in of launches and antifouling.

(ii) Vehicle running is predominately fuel costs. Savings have occurred from newer, more economical engines and economical speeds used during patrols.

(iii) Tool costs also covers chandlery such as rope and fenders.

(iv) Car allowances also includes staff travel i.e. rail, mileage and parking costs.

5 Supplies and Services

	Outturn 2005/06 £	Revised Budget 2005/06 £	Surplus / (-) Deficit 2005/06 £
Office Expenses (see 5.1)	22,897	23,200	303
Environmental Maintenance (i)	1,361	2,500	1,139
Public Jetties and Navigational Safety (ii)	10,821	12,000	1,179
Central Dept Charges (see 5.2)	33,412	27,400	-6,012
Other Services (see 5.3)	8,874	13,100	4,226
Budgetary Pressures (see 5.4)	92,237	89,400	-2,837
Oil Spill Response Plan (iii)	2,701	3,100	399
Port Waste Management Plan (iv)	2,034	2,000	-34
Estuary Management Plan (v)	584	1,000	416
Hydrographic Consultancy (vi)	5,000	5,000	0
Dredging Plan	-77	-100	-23
CCTV (vii)	968	0	-968
TOTAL	180,812	178,600	-2,212

(i) Environmental maintenance is a reactive budget to fund signage, cutting back of foliage and educational material. It was £1,139 underspent due to less demand than anticipated.

(ii) Public Jetties and navigational safety was also underspent (£1,179) and included costs for the repair and maintenance of the jetties. Spend was contained on smaller maintenance jobs for the Harbour Master's jetty as it needs complete replacement. Any further spend now would not be economical and would not add to the life of the jetty. Major repairs are planned during 2006/07.

(iii) Oil Pollution Response Plan costs included the £2,570 annual subscription and additional equipment.

(iv) Port Waste Management was overspent by £34. The budget, which is demand led, was set up to cover:-

· sewage pump out facilities,

· Parts and emergency call out,

· Emptying of battery cage,

· Refuse Collection,

· Large river rubbish removal, and

· Disposal of non-EU food waste.

(v) Estuary Management Plan was underspent (£416). The breakdown of the £1,000 budget is:-

· Student Fund Contribution £600

· Meetings £100

· Student Fund Presentation £50

· Education Group Meetings £250

The underspend was as a result of the Education Group meetings taking place on site, and a refund of IFOS pavilion contribution.

(vi) Hydrographic consultancy was in line with budget and covers the cost of ABP carrying out hydrographic surveys on two sheets of soundings on the River each year (nine sheets altogether, which are surveyed on a rolling programme).

(vii) Maintenance on CCTV system not budgetted for, or anticipated to be required

5.1 Office Expenses

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Equipment (i)	162	500	338
First Aid Supplies/Health and Safety (ii)	578	500	-78
Printing and Stationery (iii)	2,957	3,000	43
Catering/General (iv)	686	800	114
Protective Clothing (v)	3,013	2,500	-513
IT Charges (vi)	10,293	10,000	-293
Postage (vii)	2,982	2,500	-482
Telephones (viii)	1,363	2,400	1,037
Promotional Events/ Publicity/Publications	863	1,000	137
TOTAL	22,897	23,200	303

(i) Equipment costs (£162) were less than anticipated.

(ii) First Aid Supplies/Health and Safety costs (£578) includes fire extinguishers and servicing. It also covers safety equipment and first aid supplies.

(iii) Printing and stationery costs (£2,957) include photocopy rental as well as County Supplies and Hampshire Printing services.

(iv) Catering/general costs of £686 includes refreshments for meetings, the supply of water coolers (£254) and general costs e.g. disposal of confidential waste (£45).

(v) Protective clothing (£3,013) was used to provide uniforms and safety wear for the staff.

(vi) The IT costs include Hampshire Public Services Network (HPSN) charges and IT 2000 charges (including dial up).

(vii) Postage was £482 overspent. This related to franking machine costs and an unanticipated increase in routine postage requirements.

(viii) Telephone charges are now included under IT Charges, and were lower than anticipated.

5.2 Central Support Charges

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Devolved Finance Unit	11,400	11,400	0
Central Finance	5,260	5,000	-260
Chief Executive Committee & Legal (i)	16,752	11,000	-5,752
TOTAL	33,412	27,400	-6,012

(i) Includes additional charges from Democratic Services to support the new governance arrangements, including the Annual Forum.

5.3 Other Services

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Legal Expenses (i)	281	4,000	3,719
Subscriptions/Memberships / Licences (ii)	1,388	2,100	712
SMS/Designated Person (iii)	7,205	7,000	-205
TOTAL	8,874	13,100	4,226

(i) Legal costs are demand led and are therefore an estimate is included in the budget to cover any need that arises for external legal advice.

(ii) Subscriptions/Memberships/Licences included the British Ports Association subscription and radio licences.

(iii) Designated Persons was overspent by £205. An element of these costs is unpredictable in nature and reflects the work undertaken during the course of this financial year.

5.4 Budgetary Pressures

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Fisherman's Jetty (i)	1,290	1,290	0
Harbour Jetty (ii)	15,783	9,500	-6,283
Navigational Approach purchase (iii)	2,641	7,500	4,859
Harbour Dues Set Up costs (iv)	1,674	0	-1,674
Uncommitted (v)	5,249	5,510	261
TOTAL	92,237	89,400	-2,837

(i) Payments in respect of maintenance on Fisherman's Jetty

(ii) Expenditure on Harbour Jetty includes additional cost of advice on dredging and rebuilding of Harbour Master's Jetty.

(iii) Cost of Navigational Approach work lower than expected

(iv) Harbour Dues Set Up is a re-active budget with costs difficult to anticipate

(v) The uncommitted budget was to cover unforeseen pressures, and includes expenditure on additional staff during the summer months.

5.5 Transfers to Reserves

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Payment to Reserve (i)	38,000	38,000	0
Boat Replacement Fund (ii)	14,100	14,100	0
Fisherman's Jetty (ii)	13,500	13,500	0
TOTAL	65,600	65,600	0

(i) Payment to reserve is part of the three year plan to eliminate deficit on Harbour Undertaking Reserve.

(ii) Payment to Boat Replacement and Fisherman's Jetty are agreed contributions to reserves.

APPENDIX 2A

APPENDIX 2B

VISITOR CENTRE PARTNERSHIP 2005/06

Explanation of variation against budget

1 Income

	Outturn 2005/06 £	Revised Budget 2005/06 £	Surplus / (-) Deficit 2005/06 £
Net Berthing/Visitors (i & ii)	26,910	39,000	-12,090
Sub-let income (iii)	1,500	1,500	0
Management Fee (iv)	10,000	10,000	0
Misc. Income (note v)	28,330	29,900	-1,570
TOTAL	66,740	80,400	-13,660

(i) Visitor income was £12,090 less than budget due to the restrictions imposed during the pontoon works.

(ii) Non visitor income reflected a one off payment by The Crown Estate of £7,000 for loss of income during pontoon works.

(iii) Sub let income is 75% (April - December) of the agreed fee for managing this on behalf of The Crown Estate, as reported last year. From January, there is a new fee arrangement in place.

(iv) Management fee is part of the agreement reached with The Crown Estate and stands at £10,000 per annum, which is a £20,000 fee split equally between the Harbour Authority and The Crown Estate.

(v) Miscellaneous income is almost exclusively from the sub-letting of the former Solent School of Yachting..

1 Employees

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Salaries	24,490	24,400	-90
Staff training	300	300	0
Other Employee Exp	0	100	100
Staff advertising and interview expenses	0	400	400
TOTAL	24,790	25,200	410

(i) The above costs are an allocation on the basis of resources used to service visitors.

2 Premises

(i) Electricity charged in April 2005 was on actual meter reading compared to previous estimates. This pre-dates the sub-lease and could not be passed on.

(ii) Gas and water costs were less than budgeted, after passing on a proportion of them to the sub-lessee.

(iii) Rates lower than expected due to recharge to sub-lessee

(iv) There was no expenditure on fixtures fittings and repairs following reassignment of the lease.

(v) Cleaning costs lower than expected following reassignment of lease.

(vi) Some on-off costs transferred to capital scheme

4 Transport

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Tools	0	300	300
Car Allowances / Staff Travel	309	300	-9
TOTAL	309	600	291

5 Supplies and Services

	Outturn 2005/06 £	Revised Budget 2005/06 £	Surplus / (-) Deficit 2005/06 £
Office Expenses (see 5.1)	1,400	1,500	100
Harbour Dues (i)	4,200	4,200	0
Central Dept Charges (i)	3,600	3,600	0
Former SSY	34,500	34,500	0
Crown Estate Rents (ii)	4,856	5,500	644
TOTAL	48,556	49,300	744

(i) Harbour dues (£4,200) and central support charges (£3,600) were an allocation from Harbour Undertaking.

(ii) Crown Estate rent paid was £644 less than budget as a result of lower than budgeted income.

5.1 Office Expenses

	Outturn 2005/06	Revised Budget 2005/06	Surplus / (-) Deficit 2005/06
	£	£	£
Other Misc. (inc mooring maint)	10	0	-10
IT Charges (i)	1,000	1,000	0
Credit Card Facilities	390	500	110
TOTAL	1,400	1,500	100

(i) IT Charges of £1,000 were allocated from the Harbour Undertaking.

APPENDIX 3