Meeting documents

1 THE ISSUE

1.1 This report reviews the Trust's financial position and makes recommendations for 2009/10 based on the financial risks facing the Trust

2 RECOMMENDATIONS

The Bath Recreation Ground Trust Board is asked to:

2.1 Note the provisional outturn position for 2008/09.

2.2 Determine the priorities for repairs and maintenance

2.3 Request officers to develop a charging policy for consideration at the next Trust Board Meeting

2.4 Request Sports Development officers to develop a suitable scheme for utilisation of Medlock Trust funding

2.5 Approve the budget proposal for 2009/10 subject to any amendments agreed at this meeting.

2.6 Note the current spend on the Strategic Review and drawdown of loans.

3 FINANCIAL IMPLICATIONS

3.1 Included in the report.

4 REPORT

4.1 Financial Position 2008/09

The Trust is on course to generate an operating surplus for 2008/09 of approximately £33,000 allowing it to meet its loan repayment and reduce its outstanding deficit. The Trust continues to rely on income from Bath Rugby Club to fund the day to day running costs with approximately 85% of income coming from the club and the temporary east stand lease in particular. Income from other leases, tenants and users is approximately £23,000 which remains far less than the operational costs of supporting these uses.

Business rates have increased following the phasing out of transitional relief after the revaluation in 2005. Details of the 2008/09 actuals to date and forecast outturn are contained in appendix 1

4.2 Budget 2009/10

The budgeted position for 2009/10 is shown in appendix 2. This indicates the scenarios with and without the income from the East Stand. If the Charity Commission determines not to approve a further temporary lease for the East stand, the Trust run the risk of an operating deficit for 2009/10 of approximately £90,000 before loan repayments. This could be more if discretionary income declines which is possible during the present economic downturn. In recent years decisions regarding the temporary stand have not been forthcoming until late spring which will give months of financial uncertainty if the situation is repeated in 2009.

Costs from council officers remains high which reflects the need to deal with issues arising from the strategic review, regularisation of uses and increased management. These costs are higher than under "normal" operating circumstances and are likely to remain the case through 2009/10.

The Trust also faces a backlog of repairs and maintenance to facilities which are detailed in appendix 3 following a condition survey of the site and its facilities. At present the budget reflects an ongoing provision of £5,000 to deal with emergency maintenance issues arising, however the cost of works identified totals £107,650. In addition professional fees will normally be in the order of 12 -15% approximately £16,000 and no contingency sum is provided or any allowance for conservation works. Category C and D are considered high priority due to risk of failure. In particular the Cricket Pavilion requires substantial attention.

4.3 Budget Options

In view of the financial pressures, the Trust should consider ways in which it either reduces some of its costs or increases its income.

4.3.1 Grounds Maintenance

Apart from the cost of officer time explained above the next most significant cost is grounds maintenance. The table in appendix 4 reflects the grounds costs elements associated with different uses and the relative income generated. In the case of the Croquet and Tennis clubs there is significant under recovery of costs. The costs of maintaining a cricket square and therefore restricting access to that part of the site for periods is also disproportionate to the income received. For all other regular and casual users the income received is again insufficient to cover costs.

Whilst the Trust may have obligations in respect of both Tennis and Croquet it should seek to renegotiate these as soon as practicable. The Trusts should also renegotiate the Service Level Agreement with the Councils' Grounds Maintenance Service with a view to reducing the specification, and in particular consideration should be given to how to reduce the cost of cricket on the site.

4.3.2 Charging Policy

The present user charges are based on general playing field charges applied across playing fields within council control. Special rates are applied for specified events where the site may be rented in whole or in part for a number of days. The basis of these charges is largely historic and in the case of the Recreation Ground does not reflect either the true cost (as highlighted in above paragraph) or the affordability of the user. Details of current charges are provided in appendix 5.

The range of users includes commercial organisations, charities and individuals and group and affords the Trust an opportunity to consider introducing differential pricing reflecting its objectives, the financial position of user and costs. Such a pricing structure could distinguish between Commercial and charitable users and offer a menu of facilities such as parking, use of pavilion, grounds set up, whilst recognising that organisations have differing levels of resources to fund such activities. The Trust is requested to set parameters for the development of a charging policy with recommendations brought back to the next meeting.

4.3.3 Grant Funding

Opportunities to access grant funding should be explored wherever possible. The Medlock Trust has offered a grant of £10,000 for the next five years to support a suitable scheme for younger, elderly or disabled involving outdoor recreation. In providing such a scheme there will be costs involved and the Trust should request the Sports Development department to determine if a practical scheme can be delivered.

4.3.4 Leisure Centre lease

The Charity Commission's agreement to the amendments of the Trust objectives to temporarily allow the leisure centre to remain will generate additional income for the Trust when the lease is concluded. It is recommended that this lease should be concluded as soon as possible in 2009 to secure the additional income stream.

4.4 Strategic Review

The Strategic Review costs are detailed in appendix 6 which also sets the Trusts overall funding position. Further professional fees have been estimated for 2009/10 of £10,000 which will be dependent on the course of action adopted by the Trust Board. Based on the forecast outturn for 2008/09 the Trust will be able to draw upon loan facility of £23,952 due to repayments made in previous years. The total accumulated deficit including prior years operating deficit at 31^st march 2009 is likely to be £273,486 providing the Rugby Club income is secured increasing to £384,000 with the loss of income and no alternative provision. In view of the uncertainty over funding and mounting repairs pressures consideration should be given to approaching the Council for additional funding.

5 RISK MANAGEMENT

5.1 The key risk remains ability of the Trust to deliver the preferred outcome of the Strategic Review, and in particular the future of the Rugby Club which is key to the financial viability of the Trust at this present time.

6 RATIONALE

6.1 The 2008/09 provisional outturn and Strategic Review spend are for information only. Approval of the budget for 2009/10 is required.

7 OTHER OPTIONS CONSIDERED

7.1 None

8 CONSULTATION

8.1 Deputy Section 151 Finance Officer

9 ISSUES TO CONSIDER IN REACHING THE DECISION

9.1 Other legal considerations.

10 ADVICE SOUGHT

10.1The Council's Monitoring Officer (Council Solicitor) and Section 151 Officer have had the opportunity to input to this report and have cleared it for publication.