ordinary meeting of council to be held on tuesday, 26 april 2005 at ...

Ordinary Meeting <strong>of</strong> Council -26 April 2005 5 / 2
Item 5
S02722
1 April 2005
PURPOSE OF REPORT
To present <strong>to</strong> Council the investment allocation and the performance <strong>of</strong> investment funds, monthly
cash flow and details <strong>of</strong> loan liability for March 2005.
BACKGROUND
Council’s investments are made in accordance with the Local Government Act (1993), the Local
Government (Financial Management) Regulation (1999) and Council’s Investment Policy which
was adopted by Council on 12 Decem<strong>be</strong>r 2004 (Minute No. 480).
This policy allows Council <strong>to</strong> utilise the expertise <strong>of</strong> external fund managers for the investment <strong>of</strong>
Council’s short term surplus funds. This is done, as for many other Councils, with the advice <strong>of</strong>
Grove Research & Advisory Pty Limited.
COMMENTS
During the month <strong>of</strong> March Council’s cash increased by $2,850,000 and gross capital appreciation
on Council’s investments was $93,200.
Council’s <strong>to</strong>tal investment portfolio at the end <strong>of</strong> March 2005 is $19,478,100. This compares <strong>to</strong> an
opening balance <strong>of</strong> $17,271,200 as at 1 July 2004.
Council’s General Fund interest on investments for March year-<strong>to</strong>-date is $760,400. This compares
favorably <strong>to</strong> the year-<strong>to</strong>-date budget <strong>of</strong> $640,000.
Council’s <strong>to</strong>tal debt as at 31 March 2005 is $10,385,900. This compares <strong>to</strong> a <strong>to</strong>tal debt <strong>of</strong>
$11,850,000 as at 1 July 2004.
PERFORMANCE MEASURMENT
Council’s investment portfolio is moni<strong>to</strong>red and assessed based on the following criteria:
• Management <strong>of</strong> General Fund Bank Balance
The aim is <strong>to</strong> keep the general fund bank balance as low as possible and hence maximise the
amount invested on a daily basis.
• Performance against the UBS Bank Bill Index
This measures the annualized yield (net <strong>of</strong> fees and charges) for each <strong>of</strong> Council’s portfolios.
The weighted average return for the <strong>to</strong>tal portfolio <strong>of</strong> funds is compared <strong>to</strong> the industry
<strong>be</strong>nchmark <strong>of</strong> the UBS Bank Bill Index.
• Allocation <strong>of</strong> Surplus Funds
This represents the mix or allocation <strong>of</strong> surplus funds with each <strong>of</strong> Council’s Fund Managers.
Council’s investment policy requires that not more than 45% <strong>of</strong> funds are <strong>to</strong> <strong>be</strong> with any one
Fund Manager. All funds are kept <strong>be</strong>low this required level <strong>of</strong> 45%.
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