Decision details

The Assistant Director Finance (Section 151 Officer) submitted an exempt report to bring to the attention of the Executive the request from Graven Hill Village Development Company Ltd (Dev Co) for the Council to act as surety in three performance bonds for roadway infrastructure works to be undertaken by Dev Co under section 38 of the Highways Act 1980.

Resolved

(1)            That it be approved in principle that the Council act as surety for Dev Co in respect of two performance bonds (up to the sum referred to in the exempt Appendix to this report) relating to the construction of highway works by Dev Co pursuant to agreements between Dev Co and Oxfordshire County Council (as local highway authority) to be made under section 38 of the Highways Act 1980.

(2)            That authority be delegated to the Shareholder Representative to agree on the formal documentation in relation to the bonds in consultation with the s.151 Officer, the Monitoring Officer, the Leader and the Portfolio Holder for Finance and Property.

(3)            That it be agreed that Dev Co be requested to pay the council a market fee for the bond facility.

Reasons

The recommendations in this report have been subject to discussion between the Shareholder Representatives, CDC Finance Representatives and the Dev Co Managing Director and Finance Director.

By agreeing with the recommendations in this report, the council is ensuring that Dev Co can act swiftly to meet its aims and delivery objectives regarding the highway works and safeguard the council’s investment and return on investment.

Alternative options

Option 1: Not to give a performance bond. This has been dismissed by officers on the grounds that OCC would not accept a bond from either Hold Co or Dev Co and, because performance bonds are prerequisites for entering section 38 adoption agreements with the county council, the company would have to go to the market. The additional time required for this at this stage would impact on the delivery of the agreement. Officers are in discussion with Dev Co about the company securing future bonds from the open market rather than from the council.