Meeting documents

RESOLVED that Councillor V.W. Broad be appointed Chairman of the Property Sub Committee for the remainder of the 2016-17 Municipal Year.

None.

RESOLVED that Councillor T. Schofield be appointed Vice Chairman of the Property Sub Committee for the remainder of the 2016-17 Municipal Year.

None.

• (Attachment: 1)Item 5: Remit of the Sub Committee (268K/bytes)

The Sub Committee noted that, on 15 September 2016, the Executive had authorised the establishment of the Property Sub Committee and it received a copy of the relevant report setting out its remit and working arrangements including the Sub Committee’s Terms of Reference.

RESOLVED that the remit and responsibilities for the Property Sub Committee and their working arrangements, as they fit with the Property Company and the Council, be noted.

Reasons for decision:
To provide Members with clarity about the working arrangements for this new Sub Committee established by the Executive.

Alternative options:
To request that any of the responsibilities of the Sub Committee be clarified by the Executive.
 

• (Attachment: 2)Item 6: Appointment of Directors (109K/bytes)

The Leader of the Council, Councillor V.W. Broad reminded the Sub Committee that the Executive had delegated it authority to appoint the Members of the Board of Directors for the new Property Company.

The Leader indicated that consideration had been given to the wider question of appointing additional Directors and the possibility of Non-Executive Directors being appointed and that such decisions would follow in time, if and when the company and the Council agreed it was appropriate. Following their nomination by the Leader it was

RESOLVED that the Chief Executive and Head of Property Services be appointed as Joint Managing Directors and the Head of Finance be appointed as Finance Director of the Property Company with immediate effect.

Reasons for decision:
To appoint the Board Members to the Property Company as noted by the Executive in September 2016 as part of the governance arrangements for the Council’s property strategy.

Alternative options:
To not appoint the Directors as proposed or to request a further report back with alternatives to consider.
 

• (Attachment: 3)Item 7: Appointment of Secretary and Auditor (110K/bytes)

The Sub Committee noted that as part of its wider governance arrangements the Executive had delegated it with the authority to appoint the Company Secretary and Auditor for the new Property Company. It was proposed that the Head of Legal Services be appointed as Company Secretary upon incorporation.

It was noted that the Sub Committee was also authorised to appoint an Auditor for the Property Company. The Head of Finance had been investigating local accountants who could act as suitable Auditors to the company and this would be a matter for further consideration in due course.

RESOLVED that:

(i) the Head of Legal Services be appointed as Company Secretary to the Property Company upon incorporation or at the first Board meeting thereafter; and

(ii) an Auditor, to be identified at a future meeting, be nominated as the Council’s choice for appointment by the Board as the Auditors for the Property Company, to be implemented as soon as possible after incorporation.

Reasons for decision:
To appoint the Company Secretary and Auditor to the Property Company as noted by the Executive in September 2016 as part of the governance arrangements for the Council’s property strategy.
 
Alternative options:
To not appoint the Company Secretary or the Auditor as proposed or to request a further report back with alternatives to consider.
 

• (Attachment: 4)Item 8: Shareholder Responsibilities of the Sub Committee (412K/bytes)

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.
 
RESOLVED that:

(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.

Alternative options:
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.
 

None.

RESOLVED that members of the Press and public be excluded from the meeting for the following items of business under Section 100A(4) of the Local Government Act 1972 on the grounds that:

(i) it involved the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of the Act; and

(ii) the public interest in maintaining the exemption outweighed the public interest in disclosing the information.
 

• (Attachment: 5)Item 11: Shareholder Agreement and Business Plan - Part 2 (3M/bytes)

The Leader of the Council presented a draft Shareholder Agreement and Business Plan that provided details of the way in which the company would operate and the opportunities which it would pursue.

Once agreed by the Council it could be agreed by the Board on behalf of the company and would be effective after incorporation following the first Board meeting.

The documents identified a number of matters where consent of the Shareholder would be required. It was noted that in some cases the Leader would approve matters and others would be referred back to the Sub-Committee as detailed in the Agreement. The key objective being to introduce a clear governance process that ensured there was sufficient Member oversight of the most fundamental matters.

RESOLVED that the exempt information in relation to the Shareholder Agreement and Business Plan be noted.
 

• (Attachment: 6)Item 12: Loan and Draw Down Agreement - Part 2 (29K/bytes)
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  (Attachment: 7)Item 12 Addendum: Loan and Draw Down Agreement Annex 1 - Part 2 (696K/bytes)

The Leader informed the Sub Committee that the Loan and Draw Down Agreement had been prepared to allow for the Council to be able to fund the company in three key ways:

• to purchase the key sites which were identified in the business plan.
• to provide working capital to allow the company to work up schemes and developments.
• to fund further projects and purchases in accordance with the business plan.

It was noted that where the Council funded any scheme it would take security from the company in the form of a first charge over the property concerned.

Members noted a number of small corrections to the document circulated to adjust the following areas of the Agreement:

• Definitions and interpretation: Final Repayment Date and Security;
• Lender obligations;
• Repayment arrangements;
• Covenants between the Borrower and the Lender;
• Clarifying the name of the Company Directors

RESOLVED that the exempt information in relation to the Loan and Draw Down Agreement be noted.