prosiect gwyrdd joint committee agenda 29 november 2013 · jwa covered this scenario through the...

Partnership of Councils Supporting partner

Prosiect Gwyrdd: Joint Committee Meeting Meeting No: 03-13 Date & Time: 29 November, 2013 at 09.30 am Location: Council Chamber, Monmouthshire County Council, Usk Membership: Councillors Goodway, Curtis, Giles, Govier, Jones, Moore, Murphy, Poole, Reynolds and Truman

AGENDA

No. Item Presenter Mins

1 Apologies Chair -

2 Declarations of Interest

To receive declarations of interest (such declarations to be made in accordance with the Members Code of Conduct)

Chair 5

3 Minutes of the last meeting – 23 September, 2013 Chair 5

4 Matters Arising MW 5

5 2014-15 Budget and 2013-14 Month 7 Monitoring Position and Projected Out-turn MF 15

Part 2 – Exempt or Confidential Item To consider whether to exclude the press and public during consideration of the following item on the grounds that information in Part 2 is exempt from publication pursuant to the provisions of Schedule 12A Part 4 Paragraphs 14, 16 & 21 of the Local Government Act 1972

6

Project Update Update from the Project Director following Project Board on the 27/11/13. Because of the date of Project Board being held this will be a verbal update and will cover finalisation of the PA and JWA2.

MW 15

7 Proposed Date of Next Meeting - TBC Chair -

See continuation page overleaf


Please click on this link for directions to the Council Chamber, Monmouthshire County Council, Usk:- http://www.monmouthshire.gov.uk/home/local-democracy-and-councillors/get-involved/contact-us/how-to-find-our-offices/ For those travelling via the M4, exit at junction 24 and take the A449 towards Monmouth/M50. Leave the A449 at the first exit (A472 towards Usk). Go through Usk and head for Pontypool on the A472 taking particular care on the narrow Usk bridge. County Hall is three quarters of a mile from Usk Bridge on the right hand side and is adjacent to the Coleg Gwent campus.

Table of Contents

Prosiect Gwyrdd Joint Committee Minutes 23/09/13 Page 1

2014-15 Budget & 2013-14 Month 7 Monitoring Position & Projected Outturn Page 6

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PROSIECT GWYRDD JOINT COMMITTEE MEETING

Monday 23 September 2013 – 10.00am

LOCATION: Council Chamber, Monmouthshire County Council, Usk

Present: Initials Elected Members: Councillor Russell Goodway, Cardiff City Council Councillor Ashley Govier, Cardiff City Council Councillor Bryan Jones, Monmouthshire County Council Councillor Gail Giles, Newport City Council Councillor Keith Reynolds, Caerphilly County Borough Council Councillor Rob Curtis, Vale of Glamorgan CC

RG AG BJ GG KR RC

Officers: Mike Williams, Project Director, Prosiect Gwyrdd Sian Humphries, Solicitor, Cardiff City Council Marc Falconer, Finance Officer, Prosiect Gwyrdd Mark Williams, Caerphilly County Borough Council Tara King, Cardiff City Council Andrew Kerr, SRO & Business Adviser Malcolm Lane, Newport City Council Roger Higgins, Monmouthshire County Council Rob Bailey, Democratic Administrator, Newport City Council

MW SH MF MW TK AK ML RH RB

Apologies: Councillor R Truman ( Newport City Council ), Councillor D Poole ( Caerphilly County Borough Council ), Councillor N Moore ( Vale of Glamorgan CC ), Councillor P Murphy ( Monmouthshire CC ),Sheila Davies & Andrew Morris ( Newport CC ) and Clifford Parish ( Vale of Glamorgan CC)

Page 1 of 12 Prosiect Gwyrdd Joint Committee Agenda 29 November 2013

Prosiect Gwyrdd Joint Committee Minutes 23/09/13



No Item Action 68 Apologies for Absence Apologies for absence as listed above were reported. Noted 69 Declarations of Interest None received. Noted 70 Minutes The Minutes of 7 February, 2013 were confirmed as a true

record and signed by the Chair. Noted

71 Audited Statement of Accounts 2012-13

Consideration was given to a report seeking approval of the Statement of Accounts for 2012/13 ahead of the statutory deadline of 30 September, 2013. MF advised that the accounts had been subject to public inspection between 24 June - 19July, 2013. Members attention was drawn to the document Appendix A of the Report. MF drew Members attention to two specific concerns which the Auditor raised regarding (i) review of receipts at the end of the financial year and (ii) delays in submission of supporting information required to complete the audit. Both areas of concern had been subsequently addressed as detailed within the Report. Reference was made to the subsequent appendices which provided details of the 2012-13 Audited Statement of Accounts and of the auditors report “ Prosiect Gwyrdd - Audit of Financial Statements Report “ and the misstatements that had been corrected, details of which were noted. Councillor Goviers enquiry as to the role of the Audit Office once the contract had commenced was duly clarified by MF

1. To approve the Statement of Accounts for the financial year 2012/13 and the content of the Letter of Representation to the External Auditors. 2. To authorise the Chairman to sign the documents on behalf of the Joint Committee along with the Treasurer and the Senior Responsible Officer, where appropriate.

72 Monitoring Report

Consideration was given to a report providing an update of the financial monitoring position and projected out-turn for Prosiect Gwyrdd based on the first five months of the 2013-14 financial year. MF referred to the 2013-14 monitoring position with regard to both the procurement phase (April to October 2013) and the transitional phase (November 2013 to March 2014), the figures of which were tabulated within the Report. Members noted that financial close was projected to occur towards the end of October, 2013 and as such a seven month projection of

To note the projected outturn forecast including the proposed drawdown from the Reserve Account and the projected balance of this Account being carried forward onto 2014-





procurement phase expenditure would now be incurred compared to the four months included in the original budget. The improved position for the balance remaining in the Joint Committee Reserve Account compared to the original budget position was also highlighted. The additional costs for the extended procurement phase would be funded by a drawdown from the Joint Committee. The resources for the Transitional phase had also been strengthened to reflect the condensed transitional period with this enhanced expenditure also being funded by the Joint Committee Reserve Account. MF referred to the Summary Monitoring Position 2013-14 table which aggregated together the projected outturn position of both the Procurement and Transitional activities and indicated that these were fully funded in 2013 -14 without the need to increase Partner contributions. The table also projected a balance carried forward on the Reserve Account of £132,463 to assist in the funding of future PG expenditure. Councillor Giles queried the level of partnership contributions for the next financial year. MF advised that this would be formally approved as part of the Budget at the December meeting but he would liaise prior to then with Partner Authority Officers as to indicative figures. Councillor Curtis referred to complaints he had received from constituents that Viridor were not employing local labour as part of the project. It was advised that this was an issue for Viridor. As part of the project Viridor would provide community benefits and would produce information on the local firms and individuals employed on the construction and operation of the facility.

15.

73 Progress to Contractual Close .

Consideration was given to a report providing an update on the process of finalising the Prosiect Gwyrdd procurement process and achieving Contractual Close. Members noted that following the appointment of Viridor as the preferred bidder authority was delegated to the SRO of the Project Board (in consultation with the Project Board ) for finalisation of the procurement to successful contractual close. Details of this process were duly noted and subject to all documentation being completed to the Project’s satisfaction, a report would be submitted to the Project Board on 9 October,

To note the update on progress to contract close.





2013 with a view to facilitating the formal signing and sealing of the Contract by toward the end of October, 2013. Contract commissioning was due to start in September, 2015 with full service commencement planned for April,2016.Reference was also made to the Partnership receiving notification that the Minister had formally approved funding for the Project. Councillor Govier referred to Paragraph 3.3 where it was noted that Viridor had proposed a change to the structure of the Method Statements which required a considerable quantum administrative rearrangement pushing the target date back a few months. It was noted that this was agreed to as the change provided long term benefit to the Partnership. In response to Councillor Reynolds query on Paragraph 5.1, SH confirmed that the structure of method statements had not changed the commercial deal offered.

74 Joint Committee Role ( During the transitional and operational phases )

Consideration was given to a report providing an outline of this Joint Committee`s role and an indication of required meeting frequency during the (i) Transition Period from financial close i.e October 2013 to service commencement in September 2015 and (ii) Service Period from September 2015 to March 2041. The role of the Joint Committee is set out in the second Joint Working Agreement (JWA2) ,which was appended to the Report, together with the proposed terms of reference. MW advised that,in theory, the Joint Committee was required to meet twice a year to approve the audited Joint Committee Statement of Accounts by end of September following the end of the financial year and , in December to recommend a budget to the Partner Councils. However, it was noted that if the contract was running smoothly during the Service period, the frequency of meetings could be reduced to one meeting each year. Reference was made to other non-routine issues which were listed within the Report which might require a special meeting of the Joint Committee. With regard to the possibility of a Local Government Re-organisation in the future it was queried as to whether this would have implications on the Project. SH advised that the JWA covered this scenario through the clause on successors

To note the future role of this Joint Committee.





within the agreement.

75 Date of next meeting

The next meeting to be held in December 2013 , the actual date to be confirmed following consultation with all Partner Authorities.

Noted



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THE BOROUGHS, CITY AND COUNTY COUNCILS OF CAERPHILLY, CARDIFF, MONMOUTHSHIRE, NEWPORT AND THE VALE OF GLAMORGAN

PROSIECT GWYRDD JOINT COMMITTEE : REF: 03/13/JC DATE: 29/11/2013

2014-15 BUDGET AND 2013-14 MONTH 7 MONITORING POSITION AND PROJECTED OUT-TURN REPORT OF: TREASURER TO THE PROSIECT GWYRDD JOINT COMMITTEE

AGENDA ITEM: 5

PURPOSE OF REPORT 1. To provide Members with an update of the financial monitoring position and projected

out-turn for the Prosiect Gwyrdd Budget based on the first seven months of the 2013-14 financial year.

2. For Members to consider the proposed 2014-15 Revenue Budget and for Members to

recommend these budgets to partnering Councils for consideration as part of their budget planning frameworks for 2014-15.

3. To provide Members with early indicative estimates for the transitional monitoring and

contract management period from 2015-16 onwards. BACKGROUND 4. The Prosiect Gwyrdd Joint Committee approved the Original 2013-14 Budget Report

at its meeting on the 17th December 2012, which recommended the 2013-14 Revenue budget to partnering councils for consideration as part of their respective annual budget setting processes. This Budget report identified the projected budgetary resources required for both :-

4.1 the procurement phase with a Financial Close assumption of the end of July 2013 and :

4.2 an initial calculation of the on-going resources required for the transitional management of the PG contract until the Preferred Bidder facility was able to


2014-15 Budget & 2013-14 Month 7 Monitoring Position & Projected Outturn

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accept waste from the PG Partners and the contract management phase commenced.

5. The Joint Committee’s budget approval process is set-out in the Joint Working

Agreement (JWA). In addition, the JWA also provides that the budget is reviewed on a regular basis during the financial year and where appropriate, action taken to ensure sufficient resources are available to the project in order to deliver the agreed outcomes.

6. The Joint Committee has also received, at the meeting on 23rd September 2013, a

Month 5 Monitoring report which included the projected financial implications of the extension in the anticipated procurement timetable from July to October 2013 with a corresponding reduction in the Transitional Monitoring phase budget for 2013-14. This report will update the position for projected expenditure, and partner contributions, for both 2013-14 and 2014-15.

2013-14 MONITORING

7. When the 2013-14 Budget was originally presented in December 2012 it was based

on an assumption that Financial Close for the Project would occur at the end of July 2013 so the 2013-14 procurement budget would have been based on a 4 month projection of expenditure. The Month 5 Monitoring Report was based on a revised Financial Close assumption of the end of October 2013 and for this report this has now been extended to an end of November 2013 assumption.

8. Table 1.0 below provides an update on the Project’s financial position for the

Procurement Phase as at Month 7 which is broadly in line with the outturn position reported at Month 5. In summary the Month 7 position shows a projected gross expenditure outturn of £497,765 which represents an increase of £101,098 over the original 2013-14 Procurement gross expenditure budget of £396,667. The original budget assumed that the Joint Committee Reserve Account would have been fully drawdown to fund 2012-13 expenditure but a balance of £263,365 has been carried forward to support the funding of future PG expenditure. By utilising the Partner contributions approved in the December 2012 report, the final tranche of the Welsh Government Procurement funding support and the Reserve Account a fully funded position for the Procurement is now being reported at Month 7.

9. As previously covered in the Month 5 monitoring report the slippage in the projected

Financial Close date has been primarily caused by Viridor’s concerns over the structure of the contract documents, particularly the Technical Method Statements where Viridor have proposed a reorganisation of the extensive volume of documentation. As a consequence the Project has had to commit significant resources, from both the Project Team and its professional advisors, to ensure that there has been no dilution to the Final Tender commitments submitted by Viridor.



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10. Table 1.0 below summarises the projected outturn position for the 2013-14 Procurement phase of the Project which is now assumed to be 8 months compared with the original Procurement budget assumption of 4 months.

TABLE 1.0: Month 7 Summary Procurement Monitoring Position

2013-14Original Budget

£

2013-14Projected

Out-turnMonth 7

£

2013-14 Change Mth 7 – Current Budget

£ Procurement Costs Project Team 163,719 237,816 74,097 Supplies & Services 8,775 14,251 5,476 Committee & Support Services 6,948 11,500 4,552 External Advisors 182,225 209,198 26,973 Contingency 20,000 10,000 (10,000) Procurement Gross Expenditure 381,667 482,765 101,098

Other Project Costs 15,000 15,000 0

Gross Expenditure 396,667 497,765 101,098

WG RCAF Grant (100,000) (100,000) 0 Appropriations (from) / to Joint Committee Reserve A/c 0 (101,098) (101,098)

Net Expenditure 296,667 296,667 0 Partnership Contributions (296,667) (296,667) 0

2013-14 MONITORING – TRANSITIONAL PHASE 11. Transitional monitoring covers the period from the end of the procurement at financial

close until the Viridor facility at Trident Park takes the Partnership’s waste when Contract Management resources will be required. The original 2013-14 budget report included an indicative estimated Transitional Monitoring resource requirement of £180,000 per annum with an eight (8) month requirement in 2013-14 which equated to £120,000. The Month 5 Monitoring Report presented at the September 2013 Joint Committee meeting emphasised the increased resources to be allocated to the Transitional Monitoring phase to enhance the Project’s resilience moving forward. The projections contained in this report are based on a continuation of the level of activity included in the month 5 report. With the slippage in the projected Financial Close to November four (4) months of Transitional activities are anticipated for this financial year. A projected cost of £139,096 has been calculated for these activities with the increase over the current Partner contributions of £120,000 being funded by the Joint Committee Reserve Account. Table 2 below provides further analysis of the projected expenditure for this period



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TABLE 2.0: Month 7 Summary Transitional Monitoring Position

2013-14Current Budget

£

2013-14Projected

Out-turnMonth 7

£

2013-14 Change Mth 7 -

Current £

Transitional Cost Project Team 80,561 73,463 (7,098) Supplies & Services 8,259 11,000 2,741 Committee & Support Services 4,500 4,500 0 External Advisors 26,680 40,133 13,453 Contingency 0 10,000 10,000 Gross Expenditure 120,000 139,096 19,096 Partnership Contributions (120,000) (120,000) 0

Net Expenditure 0 19,096 19,096

Appropriations (from) / to Joint Committee Reserve A/c 0 (19,096) (19,096)

2013-14 MONITORING – SUMMARY 12. Table 3 below aggregates together the projected outturn position of the two discreet

phases of Procurement and Transitional activities. This indicates that both activities are fully funded in 2013-14 with a projected balance carried forward on the Reserve Account of £143,171 to assist in the funding of PG expenditure in 2014-15 financial year.

TABLE 3.0: 2013-14 Summary Monitoring Position 2013-14

Current Budget

£

2013-14 Projected Out-turn Month 7

£

2013-14 Change Mth 7 - Current

£ Procurement 396,667 497,765 101,098 Transitional 120,000 139,096 19,096 Gross Expenditure 516,667 636,861 120,194 WG RCAF Grant (100,000) (100,000) 0 Partnership Contributions (416,667) (416,667) 0 Net Expenditure 0 120,194 120,194 Appropriations (from) / to Joint Committee Reserve A/c

0 (120,194) (120,194)

13. The JWA permits the Joint Committee to draw down from the Reserve up to a cap of

5% of the annual approved budget. The recommended action of drawing down from the Reserve an additional amount of £120,194 to ensure expenditure is fully funded



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represents 23% of the annual approved budget for 2013-14. The recommendations for this report include an appropriate action with regard to the drawdown from the Joint Committee Reserve Account.

2014-15 BUDGET 14. Partner Contributions will be required in 2014-15 to support the continued

Transitional Monitoring activity prior to the Trident Park facility accepting waste from the Partnership. Further details of projected 2014-15 expenditure is provided in the following table. A pay award of 1% from 1st April 2014 has been assumed for the staff employed by the Partnership Councils.

TABLE 4.0: Summary Budget Position 2014-15

2014-15

Original Budget

£ Transitional Activity Costs

Project Team 189,057 Supplies & Services 21,500 Support Services 11,950 External Advisors 88,000 Contingency 12,664

Gross Expenditure 323,171

Partnership Contributions (180,000)

Net Expenditure 143,171

Appropriations from Joint Committee Reserve A/c (143,171) 15. The additional resources, compared to the original indicative projection of £180,000

included in the December 2012 budget report, reflect the strengthening requested by Project Board and outlined in paragraph 11 of this report. It is anticipated that the additional resources will be funded from the carried forward balance of the Joint Committee Reserve account. Based on the expenditure projections in this report the Joint Committee Reserve Account would have been fully drawn down by the end of 2014-15 financial year.

POST 2014/15 BUDGET PROJECTIONS 16. The current assumption is that the Contract Management phase will commence in

July 2015 as the Partnership gears up to deliver residual waste to Trident Park from 1st September 2015. The indicative budget projection for 2015-16 is therefore based on three (3) months of transitional monitoring activity and nine (9) months of contract management activity. Indicative budget allocations for 2016-17 and onwards are based on full year costs of contract management activity.



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17. The indicative contract management budget is based on Waste Infrastructure Delivery Programme (WIDP) suggested guidance and includes a staffing complement of 3 officers supplemented by a support budget for specialist advice from both officers from within the Partnership and External Advisors. The indicative resource requirements and partner contributions, indexed by 2.5% per annum, for the financial years 2015-16 to 2017-18 are summarised in the table below :-

TABLE 5.0: Summary 2015-16 to 2017-18 Indicative Resource Requirements

Financial Year Task Indicative Budget Contributions per

Partner £ £ 2015-16 Post-procurement

Monitoring (3 months) Contract Management (9 months)

294,000 58,800

2016-17 Contract Management 292,000 58,400 2017-18 Contract Management 299,000 59,800

FINANCIAL IMPLICATIONS 18. This report provides Project Board with an update on the 2013-14 Projected Outturn

position at Month 7. It is proposed to maintain Partner contributions for 2013-14 at the level agreed by the Joint Committee at the December 2012 meeting as a consequence of resources being available in the Joint Committee Reserve Account to ensure 2013-14 expenditure will be fully funded. The projected financial year end balance of the Reserve Account of £143,171 will be carried forward into 2014-15 to assist in funding Prosiect Gwyrdd expenditure in that financial year. The proposed drawdown from the Joint Committee Reserve of £120,194 is more than 5% of the approved 2013-14 budget and the recommendations to this report include a reference to Partner Councils noting this action.

19. The budget requirement of £323,171 for 2014-15 represents an increase of £143,171

compared to the indicative budget calculation of £180,000 with the additional expenditure being funded from the Joint Committee Reserve Account. It is anticipated that the Joint Committee Reserve Account will be fully drawdown in 2014-15. Partner contributions for 2014-15 will remain at £36,000 per partner.

20. Indicative budgets have also been prepared for the remaining transitional monitoring

period and contract management activities for financial years 2015-16 to 2017-18 to inform Partner Councils in considering Prosiect Gwyrdd Joint Committee funding requirements in setting their Medium Term Financial Forecasts.

LEGAL IMPLICATIONS



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21. The Joint Working Agreement (JWA) makes provision in respect of approving annual

budgets, council contributions, project expenditure and subsequent reimbursements to councils. It is understood the additional financial contributions shall be reported to each Council for approval and the way forward accords with the provisions of the JWA.

22. It should be noted that the figures set out in this report are the project’s best

estimates at this time and as with any complex procurement there is always a risk that the costs may exceed estimates as the procurement progresses. The JWA provides that members are kept informed of changes on a regular basis. This report provides such an update and allows members to review the adequacy of existing budgets and if appropriate propose changes. It is for Councils to consider such proposals as part of their annual budget setting processes.

RECOMMENDATIONS

I. That the Joint Committee notes the 2013-14 actual spend to date and projected outturn forecast including the requirement for a drawdown from the Joint Committee Reserve Account.

II. That the Joint Committee asks the Partnering Councils to note the drawdown from

the Reserve Account in 2013-14 as part of the 2013-14 funding package.

III. That the Joint Committee recommends the 2014-15 budgets to Partnering Councils for approval as part of their respective budget planning frameworks for 2014-15 which will require individual partner contributions of £36,000.

IV. The Joint Committee asks the Partnering Councils to note the indicative budgets, and

associated partner contributions, outlined for the financial years 2015-16 to 2017-18. Marcia Sinfield Interim Section 151 Officer – Cardiff Council Treasurer to the Prosiect Gwyrdd Joint Committee 29th November 2013



prosiect gwyrdd joint committee agenda 29 november 2013 · jwa covered this scenario through the...

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