The Panel to receive a presentation on “the financial and operational performance of the Ramsgate Port and Harbour.”
Minutes:
During the first part of his presentation, Councillor Bayford, Leader of the Council explained that the deficit affecting the Ramsgate Port and Harbour had accumulated over a number of years and across three Council Administrations. It was worth noting that the total deficit figure of £2.637 million included noncash items that included depreciation and employee pension revaluation. If the figure excluded these non-cash items the figure would go down to £1.4 million.
1. The income and expenditure statement for the Port 2017/18 there is a £500k Direct Grant/ Contribution expenditure. What is it and who were the recipients and what for?
This amount represented contribution to provisions and as set aside at year end after an assessment of outstanding claims compared to the amount that had been set aside for that expenditure item. Due to the nature of the item there was no named recipient. This amount was set aside for prudency purposes.
2. What is the breakdown of the £750k to Central Support Services?
The Panel was given a detailed breakdown of the £721k (the correct figure in the financial accounts instead of £750k). It was explained that some of the expenditure that contributed to the £721k could be treated as direct costs to the Port and Harbour and if that was done the central support cost charges would go down to £252k.
However this did not make any difference to the overall outcome.
3. We lease the Port from Crown Estates is the total of this lease £246k?
The area of the sea bed leased by Crown Estates attracted a lease charge of £246k.
4. How was the depreciation figure of £309k arrived at?
The actual depreciation was £1.052 million. This was initially worked out at £309k, which only looked at a three month period as opposed to a twelve month period which made it £1.052 million.
5. To whom was £51.7k in consultancy fees paid and for what? What procurement process was followed to engage this consultant?
This was paid to pilot consultancy to carry out market engagement, to produce business plans for interested parties, provide on-going market intelligence and to support officers as part of the negotiations with interested parties.
As part of the consultancy brief, it was hoped that this would lead to a ferry business coming to Ramsgate Port and Harbour.
Council Contract Standing Orders were followed for amounts of up to £74,999 in that three quotes were sought and full consideration was taken in assessing the preferred supplier.
6. What is the breakdown for the £200k for security?
The 2017/18 costs for security was £194k. This allows for 24/7 cover with two staff and ad hoc cover as required. This presents good value as this 52 weeks of 24/7 cover.
The Port was under Maritime Law obligation to provide cover 24/7.
7. Why are the employees superannuation contributions £55k on a salary bill of £177k?
There were adjustments due to revaluation of £35k with the other figure being the normal employer pension contribution.
8. How were the contractors, Burgess Marine selected? Was due diligence carried out for the company went into administration towards the end of 2017?
Burgess Marine had submitted tender bid for similar maritime works and were a respected contractor in the industry and. They had returned tender documents of the specialist berth refurbishment works at short notice.
Due diligence had been carried out in form of a credit rating checks in September 2016 and had returned a good score. This was followed by the refurbishment works being carried out in October 2016.
Burgess Marine undertook planned inspections and maintenance works following completion of the refurbishment works in 25 April 2017 and 13 December 2017.
9. What is the regeneration plan to return the Port to profitability?
At the moment the primary focus was still to establish the RoRo cross channel ferry business to the Port. The Council was still exploring the opportunities for mixed use development at the Port and Harbour estates and maximising income opportunities.
10. How much of the Port land is owned by the Crown Estates?
The area that was previously under low tide mark (mean low water mark) before construction at the port was owned by Crown Estates. This was just below 25 acres.
11. How long is Brett’s lease in the Port?
The lease agreement expires in April 2029 and December 2032 with an option to extend it for another five years, but not beyond 2054.
12. Do Brett’s comply with all health and safety standards? i.e. storage of sand and cement. If yes can we see the reports?
Brett Aggregates are a private company with a requirement to comply with all health and safety laws. They also have in their lease agreement the requirement to comply with all laws relating to the following:
· The property, the occupation and use of the property by the tenant;
· The use of all service media, machinery and equipment at or serving the property;
· Any works carried out at the property;
· All materials kept or disposed of from the property.
13. Why were two berths expensively repaired and why was it an urgent decision that needed immediate attention?
The berths were over 30 years old and there was no guarantee that they could be serviceable if a new operator approached the council to run the business at the Port. An urgent decision was made to ensure that the Port was still open for business and avoid missed opportunities.
14. Apart from the car Ferry is there any other Ferry company interested in the Port. If yes whom and to where?
There were ongoing negotiations with Seaborne Freight. However no agreement had been signed as yet and there were no other negotiations with any other potential operators.
15. Is there a plan to sell the Port?
There were no plans to sell the Port. However as part of the review all options were open for consideration.
16. Is it still council policy to have a coach/ lorry park in the Port? If yes when will it open? If no why not?
A planning consent was granted for a coach and lorry park at the Port in January 2018. This was not taken forwarded immediately due to the re-commencement of the car imports at the Port. There were no immediate Plans to follow that policy.
17. What is the condition of the sluice gates in the inner harbour? I have been told that they are leaking, is this correct and if so what are the possible ramifications?
This question would be responded to in writing.
In response to the presentation Members of the Panel asked further questions and made comments as follows:
· With regards to the £721k, which would be £252k if the noncash items were not factored in: Where had the difference out those two figures be reported in the Council accounts?
· Why can’t the accounts regarding the Port be reported separately from those of the Harbour?
· When was the consultancy awarded? What was the brief for the consultancy and when was it awarded?
· Does the Council make regular checks for compliance with laws and regulations by Bretts? When were the last checks made?
· 25 acres owned by Crown Estates: What was the percentage acreage owned by Crown Estates of the whole area at the Port site?
· If there was a suggestion by the local community that Bretts were not complying with aspects of the law governing the operations of the Port and Harbour, who should be approached to investigate?
· What were the council’s legal responsibilities as the landlord?
· There some wonderful ideas for developing the Ramsgate Port and harbour. The principle of a marine village is one such idea that could be pursued as some works had already been carried out which the council consider.
· Can the communication with the public regarding the Port and Harbour be done in an improved and easy to understand way?
· Had the Council been approached by Bretts regarding the use of Ramsgate Port for extended aggregate works as a replacement to the one currently operating in Whitstable?
· Did Bretts have an allocation of tonnage and what their current usage was and if they had were they fully utilising it?
Speaking under 20.21, Councillor Messenger suggested that the topic on the Port and Harbour could be added to the agenda of a future Members Briefing session.
Responding to the queries the Leader, Madeline Homer, CEx, Tim Willis, Deputy Chief Executive and Tim Howes, Director of Corporate Governance said the following:
· A written response will be provided to explain the difference between the £721k and the £252k;
· The figures presented only related to the port because the question related only to the port. The whole port and harbour accounts can be provided in the written response;
· Brett Aggregates were required by law to ensure compliance to appropriate regulations during their operations at the Port and Harbour;
· The Health and Safety Authority would conduct any such investigations regarding compliance;
· All ideas for developing the Port and Harbour would be considered. The Council was currently working on putting together a brief for consultancy work to be undertaken for the procurement document to support the council in the future development of the Port and Harbour;
· Officers would work on a format for presenting financial information to Members in an easy to understand way and hoped that the same format would then be used to share such information with the public;
· The Council had not been approached by Brett regarding extending their aggregate works at the Port.
The Panel was advised that any questions that had not been fully responded to at the meeting were going to be answered in writing after the meeting and the responses would be sent to all Panel Members.
In conclusion the Leader indicated that the Council would like to see the budget deficit go down and was working on ways to improve the situation. The Port and Harbour will be an additional agenda item to the topics for a future Members Briefing session. Councillor Bayford indicated that the council would look for ways of communicating the information regarding the Port and Harbour in an improved way on a continuous basis.
Members thanked the Leader for the presentation and noted the report.