2020-07-10 Special Meeting Agenda

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INVESTMENT OF SURPLUS FUNDS POLICY

Examples include:
e   investment in private placements;
e   asecurity that is not supported or priced by at least two approved brokers/securities dealers;
e   sub investment grade (i.e., a lower than rating BBB- (Standard and Poor’s) or equivalent), and
    in most cases, BBB rated investments; and
e   unrated securities.

Return on investments
The portfolio is expected to achieve a market average rate of return and take into account Council’s
ethical investment appetite, risk tolerance, current interest rates, budget considerations, and the
economic cycle. Any additional return target set by Council will also consider the risk limitations,
ethical and prudent investment principles and cash flow characteristics identified within this policy.
Comparison of performance
For performance purposes, the portfolio will be compared to the Bloomberg AusBond Bank Bill Index
and/or the Bank Bill Swap Reference Rate over a rolling one-year period. The benchmark target is
to be set equal to or above the benchmark yield and consider the expected types of securities held
in each portfolio. In comparing performance, the portfolio will be market valued and take into account
all coupons, deposits and withdrawals to / from the portfolio.

ROLES AND RESPONSIBILITIES

Authorised personnel
The Director Corporate Services and the Financial Services Manager are authorised to invest funds
at their discretion in investments consistent with this policy and legislation.
The Financial Services Manager will report to Council for investment guidelines and oversight of
investment activities for the purposes of this policy.
Internal controls
The Financial Services Manager in consultation with the Director Corporate Services shall establish
internal controls and processes that will ensure investment objectives are met and that the
investment portfolios are protected from loss, theft or inappropriate use.
The established processes will include monthly and quarterly reporting, as well as an annual review
of the policy. The internal controls will address the following:
e   control of collusion;
e   accounting and record keeping;
e   evidence of quotes for each investment transaction;
e   delegated authority to investment officers;
e   compliance and oversight of investment parameters; and
¢   reporting guidelines.
The internal controls will be subject to periodic reviews by Council’s Internal Audit function to verify
compliance with the policy and legislation.

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