Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

1. Executive Summary

1.1 The final accounts of the Harbour Authority for the year ended 31 March 2009 are being presented to the River Hamble Harbour Management Committee for consideration and the River Hamble Harbour Board for approval.

1.2 This report compares the River Hamble income and expenditure at 31 March 2009 with the 2008/09 revised budget.

1.3 In summary, the Harbour Undertaking has made a surplus of £7,041 to be added to the reserves. Overall expenditure exceeded the budget by £9,653, but this was more than offset by additional income of £13,194 which ensured that a draw on reserves would not be required.

2. Harbour Undertaking and Management of the Moorings

2.1 In 2008/09, the Harbour Undertaking budget was set to make a surplus of £3,500, but a revenue surplus of £7,041 was achieved.

This is broken down as follows:

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

2.3 Explanations for significant variations against budget for relevant categories of expenditure and income are provided in Appendix 1B.

2.4 The surplus of £7,041 is transferred to Revenue Reserve, in addition to the planned transfer to the Asset Replacement Reserve of £43,000.

3. Reserves

3.1 Total reserves for the River Hamble were £529,652 at 31 March 2009.

3.2 Based on the 2009/10 budget, an adverse variance of 5% in either income or expenditure would create a call on the revenue reserves of £36,000.

3.3 The Asset Enhancement Reserve is the balance of the receipt from the sale of the midstream mooring piles to The Crown Estate. The Asset Replacement Reserve is designed to be adequate to fund a 25 year replacement programme of all Harbour assets.

3.4 Interest received on reserve balances has been based on the average 7 day interest rate throughout the year, less 0.5%

3.5 The reserves policy is that the Revenue Reserve should stand at approximately 10% of the gross revenue budget, which currently requires a balance of some £70,000. At £125,710 the Revenue Reserve is substantially in excess of this level. It is proposed that the level of reserves be reviewed as soon as possible in the light of the following issues:

· An objection to the 2007/08 accounts has been received, challenging the legality of the accounts. There are several aspects to the objection, including: consultation on ships dues; the extent of costs charged to the River Hamble trading account rather than the County Council's revenue accounts (which are funded by taxation rather than Harbour Dues), and the level of reserves. The District Auditor will investigate the objection and estimates the cost of investigating and deciding the objection to be £32,000, which would be charged to the trading account, and thus have an adverse effect on the level of the Revenue Reserve.

· The Harbour Authority has also been informed that the Department for Transport (DfT) intends to hold a Public Inquiry, probably this autumn, into Warsash Sailing Club's objection to Harbour Dues. Whilst the direct costs of the Inquiry will be borne by the DfT, there are likely to be significant costs to the Harbour Authority associated with representing the Harbour Authority's interests at the Inquiry.

· The frequency with which the Harbour patrol boats are replaced is currently being reviewed, and this is likely to result in a cost reduction.

3.6 When the costs of the objections are finalised it would be appropriate to review whether the remaining level of Revenue Reserve is sufficiently high to justify a transfer to the Asset Replacement Reserve. It would then be timely, in the light of this and the savings from the boat replacement policy, to revisit the Asset Replacement programme. It may well be that it is then possible to reduce the annual contribution to the Asset Replacement Reserve.

4. Harbour Dues 2010

4.1 Previous policy was to set Harbour Dues for the forthcoming year based on the RPI figure for May of the current year. The RPI for May 2009 was minus 1.1%. It is therefore recommended that there should be no change in the basic rate of Harbour Dues for 2010.

5. Impact Assessments

5.1 This report is a formal position statement only and has not been subject to an equalities impact assessment.

6. Conclusion

6.1 This report shows that the finances of the River Hamble Harbour Authority are in a healthy state, with expenditure being well managed. The reserves position should be reviewed following the resolution of the outstanding objections.

7. Recommendations

7.1 That the River Hamble Harbour Board approves the final accounts for 2008/09.

7.2 That the River Hamble Harbour Board agrees that the basic rate of Harbour Dues for 2010 should remain unchanged.

CORPORATE OR LEGAL INFORMATION:

Links to the Corporate Strategy

APPENDIX 1A

HARBOUR UNDERTAKING

APPENDIX 1B

HARBOUR UNDERTAKING

Explanation of variation against budget

1 Income

(i) The surplus on Visitor and Miscellaneous income is due to unbudgeted income for environmental maintenance and higher than expected visitor income.

(ii) Income from The Crown Estate for managing the mid-stream moorings was slightly lower than budgeted, due to a prudent estimate of the sum due from The Crown Estate for the management agreement which had not been finalised when the 2008/09 accounts were closed.

2 Employees

(i) Advertising and interview expenses budget is dependent on the number of vacancies to be filled in the year.

3 Premises

(i) The repairs and maintenance budget was set aside for unexpected contingencies, and was not fully required during 2008/09.

(ii) The expenditure on gas was lower owing to a prior year refund being received.

(iii) Rates expenditure and rent charges to Crown Estates were on target. The overspend was due entirely to the rent paid to The Royal Thames Yacht Club for the lease of a pontoon during the winter maintenance programme.

4 Transport

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

(ii) Vehicle running expenses are predominantly fuel costs.

(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. There was a marked reduction in the number of journeys made.

5 Supplies and Services

(i) Environmental maintenance is a reactive budget to fund signage, cutting back of foliage and educational material.

(ii) Public Jetties and navigational safety is also a reactive budget, and includes costs for the repair and maintenance of the jetties. The overspend is due mainly to the work on the navigation lights.

(iii) Port Waste Management was underspent by £1,388. This 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.

(iv) The dredging plan budget was not used in 2008/09

(v) Similarly, there were few calls on the Estuary Management Plan budget

5.1 Office Expenses

(i) First Aid Supplies/Health and Safety costs include fire extinguishers and servicing, safety equipment and first aid supplies.

(ii) Printing and stationery costs include photocopy rental, County Supplies stationery and Hampshire Printing Services.

(iii) Catering/general costs include refreshments for meetings, water cooler and general costs e.g. disposal of confidential waste.

(iv) Protective clothing is used to provide uniforms and safety wear for the staff.

(v) The IT charges include Hampshire Public Services Network (HPSN) charges and IT2000 charges (including dial up). .

(vi) Postage was £1,147 underspent due to information being sent electronically where possible.

5.2 Central Support Charges

(i) These costs include regular administrative support for Management Committee and Harbour Board meetings, meeting room rental and legal advice, as well as other ad hoc support such as the legal costs associated with Freedom of Information issues and the Section 31 objection.

5.3 Other Services

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

5.4 Transfers to Reserves

(i) The budgeted contribution to reserves was achieved.

APPENDIX 2

RIVER HAMBLE RESERVES - 2008/09