Agenda Item No. 4
The Vale of Glamorgan Council
Trust Committee: 22nd July 2013
Report of the Managing Director
Retention for Abnormal Ground Conditions on the Sale of the Former Cowbridge School, Lower School Site, Townmill Road.
Purpose of the Report
1. To update Trustees on the £75,000 retention in relation to abnormal ground conditions at the Lower School Site.
1. That Committee agree the cost to cover abnormal ground conditions recommended in the independent consultant's ground conditions report of £21,479.85.
2. That the remaining sum of £53,520.15 plus interest of £936.60 is released to the Cowbridge Trust and that £53,520.15 is paid over to Transact to be invested in accordance with the recommendations of Bluefin (Independent Financial Adviser). That the interest generated on this sum is released as revenue income into the Trust's accounts.
Reasons for the Recommendations
1. To update Committee on the position with retention amount for abnormal ground conditions on the sale of the former Cowbridge School, Lower School Site, Townmill Road.
2. To ensure Trustees are aware of the balance available for reinvestment.
2. Following negotiations made on behalf of Trustees by Rawlins and Madley with Taylor Wimpey it was agreed that £75,000 would be held on retention in relation to possible abnormal ground conditions at the Lower School Site. The sum was to be held subject to the buyer obtaining within 6 months of completion a ground inspection report carried out by an independent consultant indicating whether the ground conditions were suitable for the development Taylor Wimpey propose. If they were not suitable then the retention sum would be permanently retained. Otherwise the retention sum would be reduced to cover any works recommended in the consultant's report which the buyer would need to carry out to make the ground conditions suitable and any balance remaining returned to the Cowbridge Comprehensive Trust.
3. Taylor Wimpey commissioned a ground inspection report in accordance with the Sale Contract. The Consultants commissioned were Integral Geotechnique (the same consultants who were appointed by the Trust to undertake the initial ground investigation report prior to marketing). The report concludes that a sum of £21,479.85 was appropriate to cover the additional development costs associated with the abnormal ground conditions found on site. The Technical report was considered by appropriately qualified Officers in the Council's Property Section who have confirmed that the costs are proportionate and reasonable and therefore deemed acceptable abnormal costs.
Relevant Issues and Options
4. A summary of the abnormal costs provided by Taylor Wimpey is attached at Appendix A. The full technical survey is available for inspection if Committee are interested in viewing the full document in its entirety.
5. The report recommends that an amount of £21,479.85 is retained of the original retention amount of £75,000 by Taylor Wimpey.
6. Subject to the agreement of Trustees an amount of £53,520.15 (plus interest @ 3.5% pa in line with the Contract amounting to £936.60) will be returned to the Cowbridge Comprehensive School Trust and will be available for reinvestment. The interest generated on this sum (£936.60) will be released as revenue income into the Trust's accounts.
7. The amount will be invested with Transact to be invested in accordance with the recommendations of Bluefin (Independent Financial Adviser), Minute 776, Trust Committee held 28 January 2013.
Resource Implications (Financial and Employment)
8. The ground inspection report recommends that £21,479.85 is retained by Taylor Wimpey to cover the cost of abnormal ground conditions. An amount of £53,520.15 will be available for reinvestment by the Trust. The interest £936.60 will be released as revenue income into the Trust's accounts.
Sustainability and Climate Change implications
9. There are no sustainability and climate change implications.
Legal Implications (to Include Human Rights Implications)
10. The Trust is required to abide by the conditions contained in the Charities Act 2011.
11. The Trust is also obliged to act in accordance with the Sale Contract entered into with Taylor Wimpey.
Crime and Disorder Implications
12. There are no crime and disorder implications.
Equal Opportunities Implications (to include Welsh Language issues)
13. There are no equal opportunities implications.
14. The sole concern of the Trustees is to act in the best interests of the Trust.
Policy Framework and Budget
15. Not applicable.
Consultation (including Ward Member Consultation)
Relevant Scrutiny Committee
Gemma Jones, Accountant, Resources, 01446 709141
Head of Legal Services.