Government of Jersey

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A decision made 17 November 2014:

Decision Reference: MD-T-2014-0118
Decision Summary Title :	Creation of a new capital head of expenditure for Solid Waste Minor Assets and associated budget transfer.		Date of Decision Summary:	12 November 2014
Decision Summary Author:	Capital Accountant		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Creation of a new capital head of expenditure for Solid Waste Minor Assets and associated budget transfer.		Date of Written Report:	12 November 2014
Written Report Author:	Capital Accountant		Written Report : Public or Exempt?	Public
Subject: The creation of a new capital head of expenditure for Solid Waste Minor Assets and the transfer of funding into this newly created head of expenditure
Decision(s): The Minister approved the creation of a new capital head of expenditure called “Solid Waste Minor Assets” and approved the transfer of up to £450,000 from the EFW Replacement Asset Vote (Q00MF14036) to this new capital head of expenditure.
Reason(s) for Decision: The existing green waste shredder is now seven years old and although an asset life of 10 years was assigned in the replacement schedule, this was overly optimistic and increasing maintenance costs and breakdowns mean that a new shredder is required to ensure continuity of operation at the Green Waste site. As the current backup shredder is now subject to continual breakdown and uneconomic to repair, it is proposed to use the existing shredder as backup plant. As a result of the extended defects period imposed upon the EFW plant, some assets which were to have been replaced from the EFW replacement assets funding have been replaced under contract at nil cost to the States. As such, it is proposed to transfer these funds to a new head of expenditure “Solid Waste Minor Assets” to fund the shredder replacement. The “Replacement Assets” funding provided to TTS is insufficient to provide for the replacement of this asset which is essential for the continued operation of the Green Waste composting operation in accordance with Waste License requirements. Under Financial Direction 3.6 the approval of the Minister for Treasury and Resources is required for variations to heads of expenditure, although this power has been delegated to the Treasurer of the States for amounts under £1,000,000.
Resource Implications: The TTS capital head of expenditure EFW Replacement Assets (Q00MF14036) will decrease by up to £450,000 and a newly created capital head of expenditure called “Solid Waste Minor Assets” will increase by an identical amount.
Action required: The Minister to request the approval of the Minister for Treasury and Resources Department for the creation of this new head of expenditure and subsequent budget transfer.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Solid Waste Minor Assets - New Capital Head of Expenditure: Budget Transfer from Energy from Waste Replacement Asset Vote

TRANSPORT AND TECHNICAL SERVICES DEPARTMENT

CREATION OF A NEW CAPITAL HEAD OF EXPENDITURE AND BUDGET

FOR SOLID WASTE MINOR ASSETS

Purpose of Report

To enable the Minister to approve the creation of a new capital head of expenditure for Solid Waste Minor Assets and the transfer of funding into this newly created head of expenditure.

Background

The shredding operation at La Collette is a critical part of the Transport and Technical Services (TTS) organic waste processing site. Large mobile shredders are used to break up the incoming green garden waste and plasterboard so that it can be taken to the composting slab for open windrow composting. In order to continue producing quality end products from the organic waste site, as well as meeting the Waste Management Licence requirements of shredding waste within 48 hours, reliable machinery capable of effective particle reduction is essential.

The current main shredder unit, which is used for approximately two hours per day, is a Crambo 5000 slow speed shredder. Maintenance requires the unit to be taken offline for roughly two days per month, although major services can take up to a week.

The TIM 1430 high speed shredder, which was reconditioned in 2000, is used as a backup unit for the Crambo when it is taken offline for maintenance.

The Crambo 5000 was purchased new in 2007 and was assigned an asset life of 10 years. Given the volume of work and harsh working environment this was overly optimistic as the shredder is now seven years old and is requiring increasing amounts of maintenance to continue operating.

A replacement main shredder is therefore required. TTS have estimated between £400,000 and £450,000 for a replacement shredder.

The Medium Term Financial Plan (MTFP) capital programme originally allocated funding to TTS for the replacement of their assets, however this is substantially inadequate to cover the amount of assets which require replacing.

In addition the MTFP capital programme allocated £1,586,000 for the replacement of EFW assets. Due to the extended defects period imposed upon the EFW some of the assets due to be replaced from this funding were replaced by the contractor at nil cost to the States. As both the EFW and the green waste shredder fall under the remit of Solid Waste, TTS propose to reallocate up to £450,000 to a new capital head of expenditure for Solid Waste Minor Assets.

Discussion

Finance Direction No.3.6 ‘Variations to Heads of Expenditure’ sets out the procedures for the transfers between revenue and capital heads of expenditure and states that budget transfers in excess of £1,000,000 require the approval of the Minister for Treasury and Resources and the relevant Minister party to the transfer. Authority to approve non-contentious budget transfers under £1,000,000 has been delegated to the Treasurer of the States.

Recommendation

That the Minister approves the creation of a new capital head of expenditure called “Solid Waste Minor Assets” and approves the transfer of up to £450,000 from the EFW Replacement Asset Vote (Q00MF14036) to this new capital head of expenditure.

Resource Implications

The TTS capital head of expenditure EFW Replacement Assets (Q00MF14036) will decrease by up to £450,000 and a newly created capital head of expenditure called “Solid Waste Minor Assets” will increase by an identical amount.

Action required

The Minister to request the approval of the Minister for Treasury and Resources Department for the creation of this new head of expenditure and subsequent budget transfer.

Written by:	Capital Accountant
Approved by:	Director of Finance