2021-06-30 Special Meeting Agenda

SPECIAL MEETING AGENDA   30 JUNE 2021




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SPECIAL MEETING AGENDA                                                                         30 JUNE 2021

 INVESTMENT OF SURPLUS FUNDS POLICY

 Investment officers are to manage the investment portfolios not for speculation, but for investment
 and in accordance with the spirit of this policy. Investment officers are to avoid any transactions that
 might harm confidence in Council and will consider the safety of capital and income objectives when
 making investment decisions.
 Ethics and conflicts of interest
 Consideration will be given to ethical investment principles in determining the approved counterparty
 for investment of funds.

 Investment officers / employees shall refrain from personal activities that would conflict with the
 proper execution and management of Council's investment portfolio. This includes activities that
 would impair the investment officer's ability to make impartial decisions. This policy requires that
 employees and investment officials disclose to the Chief Executive Officer (CEO) any conflict of
 interest or any investment positions that could be related to the investment portfolio.
 Delegation of authority
 Authority for implementation of this policy is delegated by Council to the CEO in accordance with the
 Local Government Act 2009, Section 257 (1) (b) — Delegation of local government powers.
 Authority for the day-to-day management of Council's Investment Portfolio is to be delegated by the
 CEO to the Director Corporate Services and to the Financial Services Manager in accordance with
 section 259 of the Local Government Act 2009, and subject to regular reviews with the Director
 Corporate Services and CEO.

 GUIDING PRINCIPLES
 Council's overall objective is to invest its funds at the most advantageous rate of interest available
 to it at the time, for that investment type, and in a way that it considers most appropriate given the
 circumstances. In priority, the order of investment activities shall be the preservation of capital,
 liquidity, and return.
 Preservation of capital
 Preservation of capital shall be the principal objective of the investment portfolio. Investments are to
 be performed in a manner that seeks to ensure security of principal of the overall portfolio. This would
 include managing credit and interest rate risk with given risk management parameters and avoiding
 any transactions that would prejudice confidence in Council or its associated entities.
 Credit Risk
 Council will evaluate and assess credit risk prior to investment. The investment officer will minimise
 credit risk in the investment portfolio by prequalifying all transactions including the brokers / securities
 dealers with which they do business, diversify the portfolio and limit transactions to secure
 investments.

 Interest Rate Risk
 The investment officer shall seek to minimise the risk of a change in the market value of the portfolio
 because of a change in interest rates. This would be achieved by measuring the investment term
 against the cash flow requirements of Council and structuring the portfolio accordingly. This will avoid
 having to sell securities prior to maturity in the open market. Secondly, interest rate risk can be limited
 by investing in shorter term securities.
 Maintenance of liquidity
 The investment portfolio will maintain sufficient liquidity to meet all reasonably anticipated operating
 cash flow requirements of Council, as and when they fall due, without incurring significant transaction
 costs due to being required to sell an investment. For these purposes, illiquid investments are
 defined as investments that are not publicly traded in sufficient volume to facilitate, under most
 market conditions, prompt sale without severe market price effect.

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