Harbours Advisory Committee

15 March 2023

Harbours Budget Monitoring Report 2022/23

For Recommendation to the Portfolio Holder

Portfolio Holder:	Cllr R Bryan, Highways, Travel and Environment

Local Councillor(s):	All Councillors

Executive Director:	J Sellgren, Executive Director of Place

Report Authors: Ed Carter (Weymouth) Claire Connolly (Weymouth), James Radcliffe (Bridport and Lyme Regis)

Title:	Business Manager, Harbour Masters

Tel:	01305 8382423, 01308 423222

Email:	ed.carter@dorsetcouncil.gov.uk

claire.connolly@dorsetcouncil.gov.uk

James.radcliffe@dorsetcouncil.gov.uk

Report Status: Public

Brief Summary: The purpose of the report is to set out the current budget monitoring position for the harbour operational budgets for Weymouth, Bridport and Lyme Harbours at the end of January 2023 and the predicted position of the Harbour Reserves for 2022/23. The financial summaries are given in the Appendices.

Recommendation: To note the current budget monitoring figures for 2022/23.

Note the budget monitoring position 2022/23 for Weymouth Harbour

Note the budget monitoring position 2022/23 for Bridport Harbour

Note the budget monitoring position 2022/23 for Lyme Regis Harbour

Reason for Recommendation: The Dorset Council Harbour Strategy, strategic goal number four is to have a balanced budget whilst building the ability for investment into the harbours. It is intended for harbours to become financially self-sufficient and be able to manage any reserves to ensure that the harbours see reinvestment to support strategic goals.

The Harbours’ budget monitoring and regular reporting to the Harbours Advisory Committee helps manage the risks of under or overspending the budget.

Weymouth Harbour – Budget Monitoring as at end of January 2023

The Budget Monitoring figures as are given at Appendix 1. The Weymouth Harbour operational budget was approved with an expectation that there would be a surplus of £104,637. Current predictions are that this surplus will be £226,704. Surpluses will be transferred to the harbour reserve at the end of the financial year.

The Harbour Revision order clarifies the car parks which are located inside the harbour estate. The net income generated from those car parks are transferred into the harbour reserve at the year end to support the harbour asset plan and to contribute to the regeneration of the peninsula through improvements to car parks, commercial area, walls, public realm and pleasure pier. The net surplus is budgeted at £349,460, current forecasts indicate that this could be £545,000. This figure could be overstated as discussions are on-going to agree a Service Level Agreement between the Harbour and Parking Services

Operational Budget Income: Overall £135,609 (F)

There is reduced income in the following areas:

Reduced number of visiting fishing vessels

Favourable variances are as follows:

Fees for filming that took place in and around the harbour.

Increased recharges for customers requiring services such as vessel moves / forklifting.

Berthing fees generated from commercial visiting vessels associated with the Tugs moored in the commercial area.

Marina berths both annual and temporary.

Income from slipway and sale of motorised water sports permits.

Income from visiting leisure craft.

Operational Budget Expenditure: Overall £13,542 (A)

The variances to budget predictions are as follows:

Increased salary costs due to pay award.

Increased insurance costs based on last year's actuals.

Reduced spend on advertising and marketing based on previous trends.

Increased energy costs. Weymouth Harbour has been appointed a technical officer via the Low Carbon Dorset programme who will carry out a site visit on Friday 24th February 2023 to work with Harbour staff to identify areas for improvement regarding our energy efficiency and make recommendations to lower our carbon footprint through the use of renewable energy and low carbon products, in addition to behaviour change.

Asset Management Plan Improvements Weymouth Harbour Budget:

Below is a list of projects that are planned to be completed during	2022/23. The programme of works is an extract from the 25-year Harbour	Asset Management Plan. In-year projects are funded from revenue	budgets; pontoon replacement and maintenance dredging are funded from	reserves.

PROJECT	BUDGET	COMMENTS
Refurbishment to Port Traffic Signals	£3,250	Obtaining quotes
Cargo stage works following relocation of fish landing quay	£51,000	Relocation not complete, project to be carried forward into new financial year
Provision of Local Traffic Service and Weather Station	£25,000	Project complete
Oil spill provisions	£10,000	Stock being reviewed and any additional requirements from the planned emergency exercise will be funded from this budget
Replace Pleasure Pier railings	£30,000	Quote received for railings, await quote for installation
Works to Pleasure Pier buildings	£20,000	Complete
Works to be funded by revenue budget	£139,250
Maintenance Dredging	£50,000	Requirements being reviewed following bathymetric survey
Pontoon replacement for visiting vessels	£280,000	Approval given to replace larger section of pontoon. See para 1.5.2
Whaley boat package	Cost £7,680 – to be funded from capital receipt reserves. See para 1.6 bullet point 3.
Electric / lighting installation commercial berths	Cost £6,250. Funding £5,190. See para 1.5.3
Works to be funded from reserves	£330,000

The approved schedule of works for 2022/23 included replacing a section of visitor pontoon berths in the outer harbour at a budgeted cost of £280,000. Concerns on the condition of adjacent pontoon sections resulted in a decision to consider advancing the replacement of all of these sections. Costs came back on the following: option 1 to replace the whole run or option 2 to replace all but one section as this section was newer. The costs are £554,000 versus £488,000. Approval has been given to proceed with option 1 as it was considered better value overall and safer to have the same safe berthing guidelines for the whole facility. The newer sections of pontoon will be utilised elsewhere in the harbour.

Funding from reserves has also been taken to install electricity and	lighting to the commercial pontoons, east of the town bridge. We were	successful in receiving 75% funding towards this project from the	Fisheries and Seafood Scheme.

Careful consideration of the harbour’s assets continues to be key to the	financial success of the harbour and to protect and improve income. This	is under constant review both in the short and long term to review how	assets are being used, to maximise the life of items and to review the	priorities.

Weymouth Harbour Reserves Summary

Revenue reserve - The predicted year end position is £2,265,487, this ringfenced balance is committed to the future cost of the pontoon replacement which is a significant financial commitment and essential to maintain and improve income.

Pleasure Pier Reserves – there is an historic allocation of £20,000 per annum to fund basic maintenance to the Pleasure Pier. The last major works were undertaken in 2016 to the value of about £65,000. An above water and diver visual condition survey of the Pleasure Pier has been undertaken. A decision will now be made on the level of works that is needed and any future financial commitment.

Capital Receipt Reserves a number of assets were sold in 2021 and the revenue generated has been placed in the reserve fund. These funds can be used for Capital works; a decision was taken to purchase a vessel suitable to assist staff to carry out general harbour maintenance, specifically in the marinas which will be taken from this reserve.

Bridport Harbour Budget Monitoring as at end January 2023

The Bridport Harbour budget monitoring figures are given at Appendix 2.

Expenditure Overall - £108,904 (A)

The main variances to the budget predictions are as follows:

Salary overspends due to pay award being larger than originally anticipated 2.25%.

Transport Cost – fuel cost and travel expenses.

Supplies & Services – overspend on dredging cost due to MMO licensing requirements for disposal of material and replacement cost of new harbour RHIB.

Revenue Budget Income - £117,221 (F)

Increase in car park income relating to the HRO

Increase in licenses relating to the HRO

Increase in diving air fills

Reserve Movements

The budgeted transfer to reserves is currently predicted to be £59,050.

Lyme Regis Harbour Budget Monitoring as at end of January 2023

The Lyme Regis budget monitoring figures are given at Appendix 3.

Expenditure Overall - £182,375 (A)

The main variances to the budget predictions are as follows:

Salary savings due to staff vacancies – especially the Assistant Harbour Master post which was only recently filled.

Transport overspends due to fuel and travel expenses.

Significant overspend in supplies & services mainly due to 2 dredges forecast in financial year (June 22 and March 23). Also, smaller overspend on equipment which includes 16K on the new harbour RHIB.

Overspend on contractors.

Revenue Budget Income - £150,099 (F)

Two lots of EA funding to mirror the 2 dredges this year.

80K surplus income – spread over all streams i.e., licences, car parks, mooring fees, overnight stays etc.

Increase in slipway car park income

Shop income

Increase use of Kayak storage

Increase in Visiting vessels & overnight stays

Reserve Movements

No anticipated transfer to reserve at year end as now forecasting an overspend and is still a DC funded service by £62K.

Financial Implications

The report covers the harbours’ budgets. The summary information is presented under the standard corporate headings.

The types of expenditure included within each heading are as follows:

Internal charges – this includes the “above the line” service recharges paid to Dorset Council.

Pay related costs- costs relating to staffing including basic pay, national insurance, pension contributions and training.

Premises related costs– utilities and rates, refuse, planned maintenance, surveys, response maintenance.

Transport related costs – fuel, travel and subsistence.

Supplies and services – Insurance, advertising, equipment, subscriptions, printing and stationery.

The income is made up of:

Commercial activities – income relating to annual commercial berths, visiting commercial vessels and visiting fishing vessels.

Leisure activities – marina berths, visiting yachts, use of slipway and PWC permits (PWC permits relate to Weymouth only).

Rents and licences – income relating to rental of property, vessel and operating licences.

Recoverable costs – where recharges are made to lease and licence holders for energy. Also includes electricity charged to annual berth holders and visiting vessels

Climate Implications

The Harbours’ Budget funds items that have implications for sustainability and climate change. In utilising future budgets every effort will be made where possible to consider how carbon output can be minimised and operations made more sustainable.

Well-being and Health Implications

The Harbours’ Budgets fund items that have implications for voluntary organisations, community safety and physical activity. It is recognised that looking after the Harbour infrastructure is vital for the safe and efficient use of the Harbour for these purposes. The implications are considered for individual items when funding commitment is being approved.

Other Implications

Harbour issues are subject to regular consultation with customers, the Harbour Consultative Groups and the Harbours Advisory Committee.

The harbours’ accounts form part of the Council’s overall Statement of Accounts, which is considered and approved by the Audit Committee.

Risk Assessment

HAVING CONSIDERED: the risks associated with this decision; the level of risk has been identified as:

Current Risk: Medium

Residual Risk: Medium

The Harbours’ budget monitoring and regular reporting to the Harbours Advisory Committee helps manage the risks of under or overspending the budget. Many items of expenditure have a link to safety of customers and the general public.

Equalities Impact Assessment

There are no equalities implications arising from this report.

Appendices

Appendix 1 Weymouth Harbour Financial Summary

Appendix 2 Bridport Harbour Financial Summary

Appendix 3 Lyme Regis Harbour Financial Summary

Background Papers None