Policy And Resources Committee - 09/01/2017

At a MEETING of the POLICY AND RESOURCES COMMITTEE held at Dundee on 9th January, 2017.

Present:-

BAILIES

COUNCILLORS

Councillor Ken GUILD, Convener, in the Chair.

The minute of meeting of this Committee of 12th December, 2016 was held as read.

Unless marked thus * all items stand delegated.

I DECLARATION OF INTEREST

No declarations of interest were made.

II MINUTE OF PENSION SUB-COMMITTEE AND PENSION BOARD OF 5TH DECEMBER, 2016

The minute of meeting of the above Sub-Committee and Board, a copy of which is appended hereto, was submitted for information and record purposes.

III REVENUE MONITORING

There was submitted Report No 3-2017 by the Executive Director of Corporate Services providing an analysis of the 2016/2017 projected revenue outturn as at 30th November, 2016 monitored against the adjusted 2016/2017 Revenue Budget.

The Committee:-

(i) noted that the overall General Fund 2016/2017 projected revenue outturn as at 30th November, 2016 had an overspend of 610,000 against the adjusted 2016/2017 Revenue Budget;

(ii) noted that the Housing Revenue Account as at 30th November, 2016 was projecting a breakeven position against the adjusted HRA 2016/2017 Revenue Budget;

(iii) instructed the Executive Director of Corporate Services to take every reasonable action to ensure that the 2016/2017 revenue expenditure was below or in line with the adjusted Revenue Budget; and

(iv) instructed the Executive Director of Corporate Services, in conjunction with all Chief Officers, to continue to monitor the Councils 2016/2017 projected revenue outturn.

The Convener agreed that the undernoted item of business be considered as a matter of urgency in terms of Standing Order No 17(b) in view of the timescales involved.

IV LOCAL GOVERNMENT FINANCIAL SETTLEMENT 2017/2018 AND FINANCIAL IMPLICATIONS FOR THECITY COUNCIL

There was submitted Report No 24-2017 by the Executive Director of Corporate Services advising elected members of the announcement made by the Cabinet Secretary for Finance and the Constitution on 15th December, 2016 in respect of the Local Government Finance Settlement for 2017/2018. The report identified the likely implications for the City Council and set out the current position on the Council's Provisional 2017/2018 Revenue Budget and 2017-2022 Capital Plan. The medium-term financial outlook and strategy was also set out.

The Committee:-

(i) noted the contents of the report;

(ii) noted the Council's Revenue and Capital Funding Allocations for 2017/2018, as announced by the Cabinet Secretary for Finance and the Constitution on 15th December, 2016, and the associated implications;

(iii) noted the package of measures that make up the settlement to be provided to Local Government, as advised by the Cabinet Secretary for Finance and the Constitution in a letter to COSLA dated 15th December, 2016;

(iv) noted the current position on the Council's Provisional 2017/2018 Revenue Budget and 2017-2022 Capital Plan;

(v) noted that the financial information included in this report would be updated as necessary and included in the Council Tax proposals to be submitted to the Special Policy and Resources Committee on 23rd February, 2017;

(vi) approved the procedures to be followed for setting the 2017/2018 Revenue Budget and Council Tax level, as set out in Section 11 and Appendix 1 of the report; and

(vii) noted the medium-term financial outlook and strategy as set out in Section 8 of the report.

Ken GUILD, Convener.

At a JOINT MEETING of the PENSION SUB-COMMITTEE OF THE POLICY AND RESOURCES COMMITTEE AND THE PENSION BOARD held at Dundee on 5th December, 2016.

APPENDIX

Present:-

PENSION SUB-COMMITTEE

COUNCILLORS

PENSION BOARD

Councillor Gregor MURRAY, in the Chair.

I DECLARATION OF INTEREST

There were no declarations of interest.

II TAYSIDE PENSION FUNDS RISK REGISTER

There was submitted Report No 398-2016 by the Executive Director of Corporate Services updating the Risk Register for the Tayside Pension Funds.

The Sub-Committee and Board approved the updated Quarterly Risk Register for the Tayside Pension Fund and Tayside Transport Pension Fund and noted there were no changes to risk profiles from the previous report.

III PROPOSED TIMETABLE OF MEETINGS FOR 2017

There was submitted Report No 399-2016 by the Executive Director of Corporate Services proposing a suggested programme of meetings of the Pension Sub-Committee and Pension Board in 2017.

The Sub-Committee and Board examined the dates set out in the timetable in Appendix 1 and agreed the proposed programme of meetings.

IV PENSION ADMINISTRATION PERFORMANCE

There was submitted Report No 400-2016 by the Executive Director of Corporate Services providing information on the recent quarters operational performance in relation to Pension Administration.

The Sub-Committee and Board noted the content of the report.

V FUNDING STRATEGY STATEMENTS

There was submitted Report No 401-2016 by the Executive Director of Corporate Services reviewing the Funding Strategy Statements for the Tayside Pension Funds.

The Sub-Committee and Board approved the Funding Strategy Statements for Tayside Pension Fund and Tayside Transport Pension Fund.

VI REPATRIATION OF TAYSIDE TRANSPORT FUND

There was submitted Report No 402-2016 by the Executive Director of Corporate Services setting out the proposal to repatriate the assets and liabilities of the single employer, Tayside Transport Fund, back to the Main Fund. It also presented specialist opinion on the proposal and requests agreement to proceed.

The Sub-Committee and Board agreed, in principle, to the proposal of repatriation of the Transport Fund, subject to final agreement of employer contribution rate and guarantee as required by Tayside Pension Fund specialist advisers.

VII POTENTIAL IMPACT OF THE OUTCOME OF US ELECTIONS

A verbal update on the impact of the election outcome on the portfolio and the latest views from Investment Managers was given by the Financial Services Investment Manager.

Members noted that to date there had been minimal impact on the markets, however Fund Managers were continuing to be cautious regarding the future.

VIII SUB-COMMITTEE AND PENSION BOARD TRAINING

Sub-Committee and Board members were given a verbal update of a national training event on 12th December, 2016 at COSLA. It was agreed that should members wish to attend then contact should be made with the Financial Services Investment Manager.

The Sub-Committee and Board resolved under Section 50(A)(4) of the Local Government (Scotland) Act 1973 that the press and public be excluded from the meeting for the undernoted items of business on the grounds that they involved the likely disclosure of exempt information as defined in paragraphs 4, 6 and 11 of Part I of Schedule 7A of the Act.

IX TAYSIDE PENSION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 403-2016 by the Executive Director of Corporate Services relating to Performance Summaries for all relevant investment time periods to 30th September, 2016 and reviewing the investment performance of the Main Funds five Fund Managers (including Property) and the Financing Fund for the quarter 30th September, 2016. It also considered the performance of the Transport Fund which invested with four of these managers.

The report compared investment performance of the Funds with the Funds specific benchmarks which consisted of various stock and security market indices.

The Sub-Committee and Board noted the information contained therein with regard to the performance of the Tayside Main Fund and Tayside Transport Fund and their Fund Managers.

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 270-2016 by the Executive Director of Corporate Services summarising investments and transactions during the period 1st April to 30th June, 2016 reviewing the investment activities of the Main Funds seven Fund Managers for the quarter to 30th June, 2016. The Transport Fund shared three of these managers and their transactions were included.

The report summarised the transactions of each Fund Manager and showed the market values of the Main and Transport Fund.

The Sub-Committee and Board noted the information contained therein with regard to the activities of the Tayside Pension Fund and Tayside Transport Pension Fund and the Fund Managers.

(c) QUARTERLY FUNDING REPORT

There was submitted Report No 404-2016 by the Executive Director of Corporate Services which considered report by the Fund Actuary, which reviewed the current funding level of the Funds.

The Sub-Committee and Board noted the report by the Fund Actuary, in particular the slight improvement in funding level of the Transport Fund.

X AMENDMENTS TO BOND AND PASSIVE EQUITY MANDATES

A verbal update on a transfer of assets which was undertaken in November, 2016 was given to members by the Financial Services Investment Manager.

The Sub-Committee and Board noted accordingly.

XI INFRASTRUCTURE INVESTMENT

A verbal update was given on potential opportunities for investment in the asset class members by the Financial Services Investment Manager.

The Sub-Committee and Board noted accordingly.

XII SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT

There was submitted Report No 405-2016 by the Executive Director of Corporate Services which reviewed the progress by the Fund Managers regarding the positive engagement Policy on Environmental, Social and Corporate Governance approved by the Sub-Committee on 6th June, 2016. (Article XI of the minute of meeting of this Committee of 6th June, 2016 refers).

The Sub-Committee and Board noted the information contained within the report with regard to the activities of the Fund Managers during the six month period ended 30th September, 2016.

XIII INVESTMENT IN TOBACCO

There was submitted Report No 406-2016 by the Executive Director of Corporate Services which summarised industry investments as at 30th September, 2016.

The Sub-Committee and Board noted the content of the report.

XIV PRESENTATION

Nick Davidson from Alliance Bernstein gave a short presentation to the Sub-Committee and Board.

A review of the current investment portfolio, including benchmarks and performance summary, was noted and the Fund was still continuing to perform above the benchmark despite recent global events, and the predictions for market pessimism.

After Mr Davidson had given his presentation and answered questions from members, the Chair thanked the presenter on behalf of members.

Gregor MURRAY, Chair.