Ordinary Council Meeting - Hastings Council - NSW Government

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PORT MACQUARIE-HASTINGS COUNCIL Governance Meeting Date: 16/02/2011 - Council Meeting ___________________________________________________________ Item 19 Subject INDEPENDENT INVESTMENT ADVISORY SERVICES Director TONY LEAHY (CBS) ___________________________________________________________ To provide information and determine whether there is a need for Council to use an Independent Investment Advisor. RECOMMENDATION 1. That Council proceed with Option 1 as listed in this Report - that is to undertake a Request for Quotation process to seek interest from Advisory Sevice Providers. 2. To continue with the current arrangements with Oakvale Capital on an interim basis. Discussion In July 2008 the Division of Local Government (DLG) issued a new Investment Order which inposed greater restrictions on the products NSW Council's were able to invest in. This in turn removed many of the complexities involved in making investment decisions and hence reduced the role of third party investment advisors. In May 2009 the DLG released draft Investment Policy Guidelines and then a year later, May 2010, the final document was released. Whilst the DLG Investment Guidelines make reference to the role of investment advisors, there is no requirement or legal obligation for Council to engage an advisor. In June 2008, Oakvale Capital Limited (Oakvale) was appointed as Council's Independent Investment Advisor. The main objective of this appointment was to maximise returns whilst managing the general level of risk associated with the investment of Council's funds. It was also in line with Council's core value of 'Openness & Accountability'. Council's contract with Oakvale concluded in June 2010 and, with advisory services continuing since then on a month-by-month basis. As this tender has now lapsed, is recommended that Council again 'test the market' by way of a Request for Quotation to provide investment advisory services to Council. Alignment With Strategic Direction Not applicable. Consultation The following consultation has occurred: General Manager Acting Director, Corporate and Business Services Council has also continued to maintain a relationship with investment providers, banks & credit PAGE 40
PORT MACQUARIE-HASTINGS COUNCIL unions and has a trusted base of contacts to seek competitive rates directly. Planning and Policy Impact If adopted, Council's Investment Policy will need to be amended. There are no planning impacts. Financial & Economic Implications Council will save the fees currently paid for the advisory services. The monthly fee for Oakvale Capital Limited is $4,710 (ex GST). However should Council seek independent advice on a as-needs basis, this will normally be quoted at the time the request is made, however an indicative price would be approximately $400 per hour. Options • Council could opt to continue to use an Independent Investment Advisor, in which case a new Request for Quotation would need to be completed (the RFQ conducted in July 2010 is now outdated). • To provide the investment advisory service internally • To engage advisory services on a month-by-month basis. PAGE 41
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Ordinary Council Meeting - Hastings Council - NSW Government

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