The Executive, on 15 September 2016, authorised the Property Sub Committee to take on the responsibility of Shareholder in relation to the Property Company. It was noted that associated with those responsibilities the Shareholder was required to put the following in place:
• Shareholder Agreement
• Business Plan
• Directors Service Agreements
• Resourcing agreement
• Loan/Draw Down agreement
• Articles of Association
The Sub Committee was requested to approve the documents with the exception of the Directors Service Agreements and Resourcing Agreement which would be considered at a future meeting. It was also noted that the Shareholder Agreement; Business Plan and Loan/Draw Down Agreement were set out in the exempt part of the agenda (Part 2).
The Leader advised the Sub Committee that the Articles of Association would in effect be the constitution of the Property Company covering the basic operating parameters of the new organisation. The Articles had been derived from the model articles of association adjusted to reflect that the company was a Council owned entity.
The Leader elaborated further on the background to why the Directors Service Agreements would not be considered at this meeting as the officers would be seconded into the company and the company would pay the Council for their time. As a result the officers’ remuneration would not change at this point, though it was envisaged that in time this may change as the balance of Council and company funding for key posts became different with the potential for the company to take on more responsibility for funding staff. As that position became clearer the issue of Directors Service Agreements would be a matter for the Sub-Committee to consider.
Related to this was the Resourcing Agreement, which would explain how the Council would be reimbursed for officer time, accommodation and support services etc. A model agreement was being prepared for both the Property Company and for the Council’s social care company. These documents would be presented to the Sub-Committee in due course when the Council had a suitable form of Agreement that was robust enough to cover all eventualities in line with the Council’s wider commercial objectives.
(i) the following agreements and plans, that are the Shareholder responsibility for the Property Sub Committee, be agreed:
• Shareholder Agreement (as set out in Part 2 of the agenda)
• Business Plan (as set out in Part 2 of the agenda)
• Loan/Draw Down agreement (as set out in Part 2 of the agenda – noting the adjustments identified at the meeting)
• Articles of Association
(ii) the Head of Legal Services be authorised to finalise the above documents.
Reasons for decision:
To approve the Shareholder responsibilities that have been delegated to the Sub Committee from the Executive to enable the Property Company to take forward its operations.
Asking Officers to review the documents that form the Sub Committee’s responsibilities as Shareholder further and present them to a future meeting taking on board any comments at the meeting.
To offer comments on the draft documents and authorise the Head of Legal Services to agree/finalise the documents taking on board the comments of the Sub Committee.