The Head of Financial Services submitted a report to the City Executive Board (attached) which details the Council’s treasury management activity and performance for 2014-2015 and recommends some changes to the Treasury Management Strategy for 2015-16.

Please see agenda item 7 for information relating to the changes.

The relevant draft minute of the City Executive Board meeting on 10 September is attached later in the agenda.

The Board member will present the report and recommendations.

Recommendations

The City Executive Board recommends Council to:

1.    approve the Revised MRP Policy as set out in Appendix 1 and

2.    approve the amendment to the Non-Specified Investments list attached at Appendix 2 of the report.

Council had before it a report detailing the Council’s treasury management activity and performance for 2014-2015 and recommending some changes to the Treasury Management Strategy for 2015-16 and the recommendations of the City Executive Board meeting on 10 September 2015.

Council resolved to:

1.    approve the Revised MRP Policy as set out in Appendix 1 and

approve the amendment to the Non-Specified Investments list attached at Appendix 2 of the report.

The Head of Financial Services has submitted a report which details the Council’s treasury management activity and performance for 2014-2015 and recommends some changes to the Treasury Management Strategy for 2015-16.

Officer Recommendations: That the City Executive Board resolves to:

1.         note the report; and

2.         recommend Council to resolve to approve the Revised MRP Policy as set out in Appendix 1 and approve the amendment to the Non-Specified Investments list attached at Appendix 2 of the report.

The Head of Financial Services submitted a report (previously circulated, now appended) which detailed the Council’s treasury management activity and performance for 2014-2015 and recommended some changes to the Treasury Management Strategy for 2015-16.

Councillor Turner, Board Member for Finance, Corporate Asset Management and Public Health presented the report.

In discussion of this agenda item the Board also considered the report of the Scrutiny Finance Panel on Municipal Bonds (agenda item 5c refers) and the City Executive Board responses to the Scrutiny recommendations.

The Board welcomed the establishment of the Municipal Bonds Agency (MBA) as an alternative source of financing, whilst noting that the City Council was unlikely to need to use its services in the immediate future. The Section 151 Officer said that he and the Council’s financial advisers had some reservations about the detail and robustness of the MBA service offering and preferential investment rates.  The Board Member said that he would bring an update report to the City Executive Board once these points had been clarified.  The Board noted that the final decision on any potential future investment would be a matter for the Section 151 Officer in consultation with the Portfolio Holder.

The City Executive Board resolved to:

1.         Note the Treasury Management Annual Report; and

2.         Recommend Council to resolve to approve the Revised MRP Policy as set out in Appendix 1 and approve the amendment to the Non-Specified Investments list attached at Appendix 2 of the report.

The Head of Finance has submitted a report which details the performance of the treasury management function for the six months to 30th September 2014.

Officer Recommendation: That the City Executive Board note the performance of the treasury management function for 2014/15 to date.

The Head of Finance has submitted a report (previously circulated, now appended) which detailed the performance of the treasury management function for the six months to 30th September 2014.

Cllr Turner, Board member for Finance, Asset Management and Public Health presented the report. He explained that

• Invested money with commercial property funds was getting a 6% return.
• The amount of money in Iceland banks was dwindling.
• We were now following Council’s ethical investment statement.
• Most debt was related to the HRA and the purchase of the Council’s housing stock from the government.

Cllr Tanner noted that all the maturity dates were short term. He asked whether the Council had any longer term deposits. The Head of Finance explained that interest rates are currently forecast to increase in the second quarter of 2015 and it made sense to invest short term to guard against the risk of being caught by interest rate rises. The Council does have £10 million in long term indirect property funds although the interest rates are significantly higher than traditional investments.

Cllr Price noted that the Low Carbon Hub investment proposal had offered quite a high interest rate. He asked whether the Council had looked into any other forms of energy schemes. The Head of Finance explained that these form of investments are classified as ‘non-specified investments’ as the organisations being invested with have no official credit rating and as such they tend to be more risky but offered a higher return. Under the Council’s current Treasury Strategy such investments are limited to 25% of the total portfolio and the Council already held £10 million in indirect property fund non-specified investments.

The Head of Finance explained that these forms of investment fall into a non-specified investment category and these tend to be more risky but offered a higher return. The Chief Executive stated that investing in bonds was a growing area for local authorities. Green energy investments provided a modest rate of return with risks spread over a number of smaller schemes. Possibly the Council should consider using treasury management funds to support some of the strategic objectives, for example to encourage people to purchase property in Oxford. The Executive Director of Organisational Development and Corporate Services explained that there were set limits on different types of investment so that the Council always has  the cash flow to deal with its daily business. While it is possible to look at alternatives the Council needed to be mindful not to put too much into risky investments

Consideration of investing in other vehicles such as Green energy bonds would be considered when the Treasury Management Strategy was reviewed in a few months time.

The City Executive Board resolved to:

·         Note the performance of the treasury management function for 2014/15.

·         Thank officers for the work done

The Head of Finance has submitted a report which presents the Treasury Management Strategy for 2014/15 with the Prudential Indicators for 2014/15 – 2017/18.

This report was submitted to the City Executive Board on 12^th February 2014. An extract from the minutes of this meeting will be circulated separately prior to the meeting of Council.

Council is asked to:

(1)          Approve the Treasury Management Strategy 2014/15, and the treasury prudential indicators at paragraphs 13 – 28.

(2)          Approve the Investment Strategy for 2014/15 and the detailed investment criteria as set out in paragraphs 29 – 48 and appendix 1, including the changes highlighted in paragraph 9.

(3)          Adopt and approve the Prudential Indicators and limits for 2014/15 to 2017/18 as set out in paragraphs 50-51 and Appendix 2 below.

(4)          Approve the Minimum Revenue Provision (MRP) statement at paragraphs 18 – 28 which sets out the Council’s policy on repayment of debt.

Council had before it the following (previously circulated, now appended):

(1)          Report of the Head of Finance which had also been submitted to the City Executive Board on 12^th February 2014. The report presented the Treasury Management Strategy for 2014/15 with Prudential Indicators for 2014/15 – 2017/18

(2)          Extract from the minutes of the City Executive Board held on 12^th February 2014.

Councillor Ed Turner moved and spoke to the report.

Following a debate, Council voted and agreed to:

(1)          Adopt the Treasury Management Strategy 2014/15, and to approve the treasury prudential indicators at paragraphs 13 – 28 of the report;

(2)          Approve the Investment Strategy for 2014/15 and the detailed investment criteria as set out in paragraphs 29 – 48 of and Appendix 1 to the report, including the changes highlighted in paragraph 9 of the report;

(3)          Approve the Prudential Indicators and limits for 2014/15 to 2017/18 as set out in paragraphs 50-51 of and Appendix 2 to the report;

(4)          Approve the Minimum Revenue Provision statement (which sets out the Council’s policy on repayment of debt) at paragraphs 18 – 28 of the report.

·                     See pages 207 to 234 of the main agenda.

·                     See page 33 of the supplement agenda for an extract from the minutes of the City Executive Board held on 12^th February 2014.

Report of the Head of Finance

The report presents the Treasury Management Strategy for 2014/15 with the prudential indicators for 2014/15 – 2017/18.

City Executive Board is asked to recommend that Council:

1.     Approve the Treasury Management Strategy 2014/15, and the treasury prudential indicators at paragraphs 13 – 28;

2.     Approve the Investment Strategy for 2014/15 and the detailed investment criteria as set out in paragraphs 29 – 48 and appendix 1, including the changes highlighted in paragraph 9;

3.     Adopt and approve the Prudential Indicators and limits for 2014/15 to 2017/18 as set out in paragraphs 50-51 and Appendix 2 below;

4.     Approve the Minimum Revenue Provision (MRP) statement at paragraphs 18 – 28 which sets out the Council’s policy on repayment of debt.

The Head of Finance submitted a report (previously circulated, now appended).  With the agreement of the Chair, Councillor Simmons addressed the meeting and spoke to the Scrutiny report and generally.

Resolved to RECOMMEND Council to:-

(1)  Adopt the Treasury Management Strategy 2014/15, and to approve the treasury prudential indicators at paragraphs 13 – 28 of the report;

(2)  Approve the Investment Strategy for 2014/15 and the detailed investment criteria as set out in paragraphs 29 – 48 of and Appendix 1 to the report, including the changes highlighted in paragraph 9 of the report;

(3)  Approve the Prudential Indicators and limits for 2014/15 to 2017/18 as set out in paragraphs 50-51 of and Appendix 2 to the report;

(4)  Approve the Minimum Revenue Provision statement (which sets out the Council’s policy on repayment of debt) at paragraphs 18 – 28 of the report;

(5)  On the recommendations from Scrutiny, to respond to them in the terms set out in paragraphs 7-10 of the Scrutiny report.