Agenda item

Treasury Management Mid Year Review 2019-20

(Cabinet Member with Special Responsibility Councillor Whitehead)

 

Report of Chief Finance Officer

Minutes:

(Cabinet Member with Special Responsibility Councillor Whitehead)

 

Cabinet received a report from the Chief Finance Officer, which sought Cabinet’s considerationof variousmattersinconnectionwiththeTreasury ManagementMid-Year Review 2019/20 and associated revisions to the Council’s Prudential Code Indicators.

 

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

 

 

Option 1:

Cabinet considers the report and passes to Full Council for approval of the revisions to the Prudential Code indicators.

 

Advantages:

Should Cabinet forward on to Full Council for consideration and approval of the revisions to the Prudential Code indicators is given, the Council will be able to proceed with the purchase of the investment opportunities and associated net revenues.

 

Disadvantages:

None

 

Risks:

Council does not approve the revisions and the purchases are therefore unable to proceed resulting in the loss of important additional revenue contributions.

 

Option 2:

Cabinet does not consider the report, or pass to Full Council for approval of the revisions to the Prudential Code indicators.

 

Advantages:

None

 

Disadvantages:

Should Cabinet not forward the report on to Full Council for approval, the purchases may stall until a point when Council is able to approve the Treasury Management Strategy and associated indicators, or fail all together resulting in the delay or loss of the associated revenue streams.

 

Risks:

Council does not approve the revisions, the investment and revenue generating opportunities are lost

 

 

 

 

 

The officer preferred option is Option 1.  The Code requires Full Council to approve any revisions to the Council’s Prudential Code Indicators. The Indicators have been revised to allow sufficient flexibility to enable the Council to proceed with its agreed initial purchased, but also allow for those which may occur before 31st March 2020.  The acquisition of commercial investment opportunities and the revenues streams form a central pillar in the Councils Funding the Future Strategy and will play a significant role in addressing the budget deficit over the next 4 years.

 

Councillor Whitehead proposed, seconded by Councillor Reynolds:-

 

“That the recommendation, as set out in the report, be approved and that the Financial Resilience Group be requested to review the Treasury Management Strategy to ensure it is consistent with the Climate Emergency priority prior to Budget Council in February 2020.”

 

Councillors then voted:-

 

Resolved unanimously:

 

(1)          That Cabinet endorse the various matters in connection with the Treasury Management Mid-Year Review 2019/20 and associated revisions to the Council’s Prudential Indicators.

 

(2)          That Cabinet recommend that Full Council approve the acquisitions and associated funding into the Council’s capital programme in accordance with the Council’s Budget and Policy Framework.

 

(3)          That Cabinet recommend that Full Council approves the revisions to the Council’s Capital Financing Requirement (CFR), the Operational and Authorised limits for External Debt and the Ratio of Borrowing Cost to Net Revenue Stream as set out in the report and Appendix A to the report.

 

(4)          That the Financial Resilience Group be requested to review the Treasury Management Strategy to ensure it is consistent with the Climate Emergency priority prior to Budget Council in February 2020.

 

Officer responsible for effecting the decision:

 

Director of Corporate Services

 

Reasons for making the decision:

 

Treasury Management forms part of the Council’s Budget Framework and the decision is consistent with the Council’s priorities:

 

A Thriving & Prosperous Economy: Economic Prosperity is a high level Corporate Priority for the City Council; whilst the acquisition of an investment does not give an immediate opportunity to generate short term wealth building, the medium term control of land and redevelopment does.

 

Clean Green & Safe Neighbourhoods:  As the freeholder of an estate the ability to provide renewable energy sources (solar power), can be delivered as part of the asset management strategy, however this can only be undertaken with the tenants consent or once a lease has been determined. The Council cannot force a tenant to change the terms of their lease.

 

A Smart & Forward Thinking Council:  This is the first investment acquisition by the Council, helping to deliver the ambition to be smart, forward thinking and commercially astute. The Property Investment Strategy is one the four pillars of the Funding the Future Strategy which aims to provide financial stability.

 

Supporting documents: