Agenda and minutes

The members had before them:

1. The Agenda papers (previously circulated); and

B.    The Minutes of the meeting held on 24 June 2022 (previously circulated).

An apology was received from Cllr Bill Hopkins.

None.

Members of the public wishing to take part should notify the Assistant Director for Legal and Governance in writing or by email indicating the nature and content of their proposed participation no later than 9.00am on the working day before the meeting (in this case 8 December 2022). Further details are available on the Council's website. Enquiries can be made through the telephone number/e-mail listed in this agenda and on the website.

None.

To confirm the Minutes of the meeting held on 24 June 2022. (previously circulated)

RESOLVED that the Minutes of the meeting held on 24 June 2022 be confirmed as a correct record and signed by the Chairman.

The Committee considered the Technical Update - Energy from Waste (EFW) Plant Reporting Requirements.

Rob Wilson informed the Committee that Jim Haywood from Mercia Waste Management (MWM) was unable to attend the meeting and sent his apologies as he was currently working on the Waste Management Services contract extension. Any questions raised by members on the Assurance Statement would be reported to Jim and an email response provided. The Council was now in receipt of the draft KPMG report and a summary of the key points in the report had been circulated to members of the Committee.

In the ensuing debate, the following points were raised:

·         In response to a query, Rob Wilson confirmed that any future upgrade of the Envirosort plant facilities at Norton would be addressed through the negotiations for the renewal of the waste contract

·         It was noted that a new EfW plant manager had been appointed. Had the new manager identified any issues that could improve the performance of the plant? Rob Wilson would raise that query with Jim Haywood

·         It was queried whether the EFW plant would be upgraded to the latest specifications when it was finally handed over to the Council. Rob Wilson responded that that was an operational matter for consideration as part of the contract negotiations. The key issue from a lender perspective was that everything was covered in the contract. KPMG had indicated that they were comfortable with the financial modelling that showed that MWM could meet the financial ratios on the basis that the 5-year loan was agreed

·         In response to a query, Rob Wilson explained that at the end of the contract extension, the value of the EfW plant would be transferred as an asset to the Council’s balance sheet

·         It was queried how long the EfW plant would be viable as an asset to the Council. Rob Wilson responded that the asset life of the plant was estimated to be 30 years from the time it was built

·         If MWM decided to pay off their debt earlier, would that be beneficial to the Council? Rob Wilson commented that there would be an impact on the debt repayments received by the Council from MWM but the debt repayments on the whole should be beneficial to the Council.

RESOLVED that:

a)    The main categories of reports or information that the Borrower must regularly produce be noted:

·         Appendix 1 - The Historic Annual Debt Service Cover Ratio (“ADSCR”)

·         Appendix 2 - Ratio compliance certificate 

·         Senior Term Loan Facility Agreement (STLFA) Assurance Statement for the Council attached as Appendix 3 to the report

b)   The update on the contract extension with Mercia Waste Management and the attached KPMG Report attached as Appendix 4 to the report be noted.

The Committee considered the Risk Register.

In the ensuing debate, Rob Wilson indicated that an additional risk had been added to the Register in relation to the loan extension. He expected this risk to be removed by the next Committee meeting after the contract extension had been signed. In response to a request, Rob Wilson undertook to circulate the final version of the KPMG report to Committee members when available and would provide a covering note referring to the key areas of the report.

RESOLVED that:

a)    The open risks set out in the Risk Register be accepted; and

b)   There were no matters of concern to report to Council.

RESOLVED that the work plan be noted.