8 May 2013

 

Dear Councillor,

In pursuance of the provisions of the Local Government Act, 1993 and the Regulations thereunder, notice is hereby given that a POLICY REVIEW COMMITTEE MEETING of Penrith City Council is to be held in the Passadena Room, Civic Centre, 601 High Street, Penrith on Monday 13 May 2013 at 7:30PM.

Attention is directed to the statement accompanying this notice of the business proposed to be transacted at the meeting.

Yours faithfully

 

 

Alan Stoneham

General Manager

 

BUSINESS

 

1.?????????? LEAVE OF ABSENCE

 

2.?????????? APOLOGIES

 

3.?????????? CONFIRMATION OF MINUTES

Policy Review Committee Meeting - 15 April 2013.

 

4.?????????? DECLARATIONS OF INTEREST

Pecuniary Interest (The Act requires Councillors who declare a pecuniary interest in an item to leave the meeting during discussion of that item)

Non-Pecuniary Conflict of Interest ? Significant and Less than Significant (The Code of Conduct requires Councillors who declare a significant non-pecuniary conflict of interest in an item to leave the meeting during discussion of that item)

 

5.?????????? ADDRESSING THE MEETING

 

6.?????????? MAYORAL MINUTES

 

7.?????????? NOTICES OF MOTION TO RESCIND A RESOLUTION

 

8.?????????? NOTICES OF MOTION

?

9.?????????? DELIVERY PROGRAM REPORTS

 

10.???????? REQUESTS FOR REPORTS AND MEMORANDUMS

 

11.???????? URGENT BUSINESS

 

12.???????? CONFIDENTIAL BUSINESS


POLICY REVIEW COMMITTEE MEETING

 

Monday 13 May 2013

 

table of contents

 

 

 

 

 

 

meeting calendar

 

 

confirmation of minutes

 

 

DELIVERY program reports

 


Council_Mark_POS_RGB2013 MEETING CALENDAR

January 2013 - December 2013

(adopted by Council 19/11/12)

 

 

 

TIME

JAN

FEB

MAR

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

Mon

Mon

Mon

Mon

Mon

Mon

Mon

Mon

Mon

Mon

Mon

Mon

 

Ordinary Council Meeting

7.30pm

 

4

 

 

 

 

 

 

 

23^?

(7.00pm)

 

 

16

(7.00pm)

 

25@

25

29v

27#

24 *

22

26@

30

21

25#+

 

Policy Review Committee

7.30pm

 

11

11

15

13

17

8

12

9

14

11

9

 

 

 

 

 

 

 

 

 

 

 

 

 

?v

Meeting at which the draft corporate planning documents (Community Strategic Plan, Delivery Program, Operational Plan, Resource Strategy) are endorsed for exhibition

?*

Meeting at which the draft corporate planning documents (Community Strategic Plan, Delivery Program, Operational Plan, Resource Strategy) are adopted

?#

Meetings at which the Operational Plan quarterly reviews (March and September) are presented

?@

Meetings at which the Delivery Program progress reports (including the Operational Plan quarterly reviews for June and December) are presented

?^

Election of Mayor/Deputy Mayor

??

Meeting at which the 2012-2013 Annual Statements are presented

?

Meeting at which any comments on the 2012-2013 Annual Statements are presented

?+

Meeting at which the Annual Report is presented

-            Extraordinary Meetings are held as required.

-            Members of the public are invited to observe meetings of the Council (Ordinary and Policy Review Committee).

Should you wish to address Council, please contact the Senior Governance Officer, Glenn Schuil.

?


UNCONFIRMED MINUTES

?OF THE POLICY REVIEW COMMITTEE MEETING OF PENRITH CITY COUNCIL HELD IN THE PASSADENA ROOM, PENRITH

ON MONDAY 15 APRIL 2013 AT 7:31PM

PRESENT

His Worship the Mayor, Councillor Mark Davies, Deputy Mayor, Councillor Ross Fowler OAM and Councillors Jim Aitken OAM (arrived 7:36 pm), Bernard Bratusa, Kevin Crameri OAM, Greg Davies, Maurice Girotto, Ben Goldfinch, Jackie Greenow, Tricia Hitchen, Karen McKeown, John Thain and Michelle Tormey.

 

LEAVE OF ABSENCE

Leave of Absence was previously granted to Councillor Prue Car for the period 11 March 2013 to 19 April 2013 inclusive.

APOLOGIES

PRC20? RESOLVED on the MOTION of Councillor Ben Goldfinch seconded Councillor Ross Fowler OAM that an apology be received from Councillor Marcus Cornish.

?

CONFIRMATION OF MINUTES - Policy Review Committee Meeting - 11 March 2013

PRC21? RESOLVED on the MOTION of Councillor Greg Davies seconded Councillor Kevin Crameri OAM that the minutes of the Policy Review Committee Meeting of 11 March 2013 be confirmed.

?

DECLARATIONS OF INTEREST

?

Councillor Kevin Crameri OAM declared a Non-Pecuniary Conflict of Interest ? Less than Significant in Item 4 ? Badgerys Creek Airport Site as he was one of the founders of the Western Sydney Airport Alliance that opposed the Airport.

?

DELIVERY PROGRAM REPORTS

 

A Leading City

 

The Sustainability and Planning Manager, Paul Grimson, introduced the report and gave a presentation.

 

Councillor Maurice Girotto left the meeting, the time being 7:34 pm.

 

Councillor Jim Aitken OAM arrived at the meeting, the time being 7:36 pm.

 

5??????? Planning Proposal for Penrith Local Environmental Plan????????????????????????????????????????????

Councillor Maurice Girotto returned to the meeting, the time being 7:51 pm.

 

PRC22? RESOLVED on the MOTION of Councillor Kevin Crameri OAM seconded Councillor Ben Goldfinch

That:

1.???? The information contained in the report on Planning Proposal for Penrith Local Environmental Plan be received.

2.???? Council defer the lands as shown in Appendix 1 from Stage 2 of the City-wide Local Environmental Plan (to allow further negotiations with the State Government to reach its conclusion) and amend the Planning Proposal for Penrith Local Environmental Plan accordingly.

3.?????? Penrith Urban Study and Strategy be exhibited as a background document to the Planning Proposal for Penrith Local Environmental Plan.

4.???? Council undertake further discussions with the State Government concerning who will be responsible for the cost of ground truthing of Deerubbin lands in order to satisfy the Minister?s requirements for the application of the E2 zone.

In accordance with Section 375A of the Local Government Act 1993, a DIVISION was then called with the following result:

For

Against

 

Councillor Greg Davies

 

Councillor John Thain

 

Councillor Karen McKeown

 

Councillor Michelle Tormey

 

Councillor Jackie Greenow

????????????????????????????????????????????????????????

Councillor Maurice Girotto??????????????????????

 

Councillor Kevin Crameri OAM

 

Councillor Jim Aitken OAM

 

Councillor Ross Fowler OAM

 

Councillor Ben Goldfinch

 

Councillor Tricia Hitchen

 

Councillor Bernard Bratusa???

 

Councillor Mark Davies

 

 

Councillor Michelle Tormey left the meeting, the time being 8:12 pm.

 

1??????? 2013 Australian Local Government Association (ALGA) National General Assembly of Local Government?????????????????????????????????????????????????????????????????????????????????????????????????????????????

PRC23? RESOLVED on the MOTION of Councillor Ben Goldfinch seconded Councillor Bernard Bratusa

That:

1.???? The information contained in the report on 2013 Australian Local Government Association (ALGA) National General Assembly of Local Government be received.

2.???? Council nominate Councillor Jim Aitken OAM as its voting delegate for the 2013 National General Assembly of Local Government.

 

 

 

 

 

2??????? Results of the feasibility assessment into Environmental Upgrade Agreements in Penrith City??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

PRC24? RESOLVED on the MOTION of Councillor Greg Davies seconded Councillor Karen McKeown

That:

1.???? The information contained in the report on Results of the feasibility assessment into Environmental Upgrade Agreements in Penrith City be received.

2.???? Council does not proceed with an Environmental Upgrade Agreement program at this time.

3.???? Council reviews the opportunities for an Environmental Upgrade Agreement program in 2-3 years.

4.???? An education program focusing on commercial and industrial building owners is considered as part of the Delivery Program 2013-2017.

 

Councillor Ben Goldfinch left the meeting, the time being 8:14 pm.

 

Councillor Michelle Tormey returned to the meeting, the time being 8:15 pm.

 

3??????? St Marys Village Precinct Development

Councillor Ben Goldfinch returned to the meeting, the time being 8:16 pm.

?????????

PRC25? RESOLVED on the MOTION of Councillor John Thain seconded Councillor Kevin Crameri OAM

That:

1.         The information contained in the report on St Marys Village Precinct ???? Development be received.

2.         Council give its qualified approval to:

?    the preparation of a masterplan over public land

?    the undertaking of studies relating to economic, traffic and parking, and stormwater impacts, and

?    extensive stakeholder consultation

 

??????? to assist in the assessment of proposals for the redevelopment of the St Marys Village Shopping Centre.

3.         The outcomes of the studies, stakeholder consultation, masterplan preparation ????????? and the nature and extent of the material public benefit that will result from ???????? the proposal ??????? be reported to Council seeking direction on the next steps for the ??????? project.

 

4.???? Council submit an application recommending to the Department of Primary Industry (Crown Lands Division) that a permanent legal closure of the remaining part of Kokoda Place, St Marys be approved.

5.???? Following approval and legal closure of Kokoda Place, St Marys it be consolidated with adjoining land.

In accordance with Section 375A of the Local Government Act 1993, a DIVISION was then called with the following result:

For

Against

 

Councillor Greg Davies

Councillor Ross Fowler OAM

Councillor John Thain

Councillor Jackie Greenow

Councillor Karen McKeown

Councillor Maurice Girotto

Councillor Michelle Tormey

 

Councillor Kevin Crameri OAM

 

Councillor Jim Aitken OAM

 

Councillor Ben Goldfinch

 

Councillor Tricia Hitchen

 

Councillor Bernard Bratusa???

 

Councillor Mark Davies

 

 

4??????? Badgerys Creek Airport Site????????????????????????????????????????????????????????????????????????????????????????????

PRC26? RESOLVED on the MOTION of Councillor John Thain seconded Councillor Karen McKeown

That:

1.      The information contained in the report on Badgerys Creek Airport Site be received.

2.      Council write to WSROC requesting that when future decisions are taken at Board meetings it be made clear in minutes, media statements and other communiqu?s which Councils have supported or not supported a particular resolution and also request that should the Wilton Study  not support the Wilton site as suitable for a second airport for Sydney, WSROC give consideration to other potential options, such as the provision of the ?very fast train? in lieu of an airport at Badgerys Creek.

3.      A further report be presented to Council on the outcome of the Wilton Study and the Western Sydney Employment Area Structure Plan.

Councillor Kevin Crameri OAM requested that his name be recorded as having voted against the MOTION.

 

 

There being no further business the Chairperson declared the meeting closed the time being 8:49 pm.

????


DELIVERY PROGRAM REPORTS

 

Item?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? Page

 

 

A Leading City

 

1??????? Investment Policy ????????????????????????????????????????????????????????????????????????????????????????????????????????????? 1

???

A Liveable City

 

2??????? Further Review of the Suitability & Performance of Fibre Reinforced Concrete Pipes in the Penrith Local Government Area ??????????????????????????????????????????????????????????????????????????????????????????????????? 9

?

A Vibrant City

 

3??????? Moveable advertising and signage on Council land ??????????????????????????????????????????????????????? 19

?

 


 

 

 

 

THIS PAGE HAS BEEN LEFT BLANK? INTENTIONALLY


A Leading City

 

Item?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? Page

 

1??????? Investment Policy ????????????????????????????????????????????????????????????????????????????????????????????????????????????? 1

?

 



Policy Review Committee Meeting ???????????????????????????????????????????????????????????????????????? 13 May 2013

A Leading City

 

 

1

Investment Policy???

?

Compiled by:?????????????? Pauline Johnston, Expenditure Accountant

Authorised by:??????????? David McIllhatton, Acting Financial Services Manager ??

 

Objective

We demonstrate accountability, transparency and ethical conduct

Community Outcome

A Council that manages its finances, services and assets effectively (4)

Strategic Response

Deliver services for the City and its communities, and maintain our long term financial sustainability (4.1)

???????

 

Executive Summary

The amended Investment Policy (Attachment 1) has been revised to incorporate legislative changes, and to reflect the Investment Policy Guidelines issued by the Division of Local Government (DLG).

 

The revised Policy presents a more conservative approach to investing Council?s surplus funds and contains specific parameters to ensure a balanced and diversified portfolio. With preservation of capital a primary objective, the amended Policy removes authority to place funds with Local Government Financial Services and in structured products, including collateralised debt obligations (CDOs) and managed funds with the exception of NSW TCorp.

 

The revised Policy was discussed at the Finance Working Party held on 18 February 2013.

 

Since the meeting of the Finance Working Party the Division of Local Government released in late April 2013 its Review of NSW Local Government Investments. There are a number of proposed recommendations in the review which are largely based on the Cole Report and at this stage have no impact on this revised Investment Policy. Should any of the recommendations be implemented by the DLG then a further report to the Finance Working Party will be prepared.

Background

The amended Investment Policy (Attachment 1) has been revised to reflect the prevailing Ministerial Investment Order that prescribes the type of investments in which councils may invest under section 625 of the Local Government Act.

 

The changes present a more conservative approach to investing Council?s surplus funds, in line with recommendations of the Cole Report which was commissioned by the DLG to investigate the impact of the Global Financial Crisis on Councils? investments. With preservation of capital a primary objective, the report advised councils cease placing funds in structured products, including collateralised debt obligations (CDOs) and those managed funds that could suffer from exposure to sub-prime markets, as occurred following the 2007 Global Financial Crisis. The Cole recommendations were adopted in full by the DLG with the result that there are fewer types of investments in which councils may invest. The amended Policy incorporates these changes and reflects the fiduciary responsibility of councils to exercise due care, diligence and skill in managing the portfolio in line with the ?prudent person? principal (section 14 of the Trustee Act).

Variations to existing Policy

The revised Policy contains specific parameters to ensure a balanced and diversified portfolio. Diversification reduces risk by spreading investments across the multiple financial institutions and asset classes which comply with the Policy?s credit-rating requirements. To comply with the revised Ministerial Order, authority to invest with the Local Government Financial Services has been deleted. In addition, some types of structured securities including CDOs and Managed Funds (excluding NSW TCorp), in which councils were authorised to invest, are excluded, although existing investments which now become non-complying investments under the revised policy may be retained to maturity.

 

New limits are detailed in the table below.

 

 

Institutions??

Australian Cash & Fixed Interest

Max % with a single issuer

Max % with NSW T Corp

S & P Rated AA- (very strong capacity to pay) or better

100

25

N/A

S & P Rated A+ and A (strong capacity to pay)

100

20

N/A

NSW Treasury Corporation ( T Corp)

20

20

20

Building Societies (holding S&P Investment grade rating as a minimum) or Moody?s / Fitch equivalents

20

20

N/A

 

It is not proposed to alter the frequency or content of reporting to Council and the 90 day Bank Bill Swap Rate (BBSW) will continue as the benchmark against which Council?s portfolio performance is measured.

 

The Investment Policy will continue to be reviewed at least once a year or as required in the event of legislative changes.?????????

 

 

 

RECOMMENDATION

That:

1.???? The information contained in the report on Investment Policy be received.

2.???? Council adopt the proposed changes to the Investment Policy.

 

ATTACHMENTS/APPENDICES

1. View

Investment Policy - draft

18 Pages

Attachment

???


 

 

A City of Opportunities

 

 

There were no reports under this Delivery Program when the Business Paper was compiled


 

 

 

 

THIS PAGE HAS BEEN LEFT BLANK? INTENTIONALLY


 

 

A Green City

 

 

There were no reports under this Delivery Program when the Business Paper was compiled


 

 

 

 

THIS PAGE HAS BEEN LEFT BLANK? INTENTIONALLY


A Liveable City

 

Item?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? Page

 

2??????? Further Review of the Suitability & Performance of Fibre Reinforced Concrete Pipes in the Penrith Local Government Area ??????????????????????????????????????????????????????????????????????????????????????????????????? 9

?

 



Policy Review Committee Meeting ???????????????????????????????????????????????????????????????????????? 13 May 2013

A Liveable City

 

 

2

Further Review of the Suitability & Performance of Fibre Reinforced Concrete Pipes in the Penrith Local Government Area???

?

Compiled by:?????????????? Jacob Strong, Trainee Engineer

Authorised by:??????????? Eric Hausfeld, Acting Engineering Services Manager ?

Requested By:???????????? Councillor Kevin Crameri OAM

 

Objective

Our physical infrastructure is adaptable, and responds to changing needs

Community Outcome

A City with infrastructure that responds to community needs (17)

Strategic Response

Improve the City's drainage network (17.2)

???????

 

Executive Summary

The purpose of this report is to provide additional information relating to a review of the suitability and performance of fibre reinforced concrete (FRC) pipes in the Penrith Local Government Area (LGA) following the report to Council at its Ordinary Meeting dated 25 March 2013.? The report recommends that the information be received and a further amendment be included in Council?s ?Guidelines for Engineering Works for Subdivisions and Developments (1997)?.

Background

Council, at its Ordinary Meeting on 25 March 2013, considered a report titled ?Review of the Suitability and Performance of Fibre Reinforced Concrete Pipes in the Penrith Local Government Area? (attached as Appendix 1).? The report provided Council with information relating to the suitability and performance of FRC pipes.? Council resolved that:

 

?1.?? The information contained in the report on Review of the Suitability and Performance of Fibre Reinforced Concrete Pipes in the Penrith Local Government Area be received.

2.???? The use of fibre reinforced concrete pipes below the water table and in submerged situations be prohibited.

3.???? Where fibre reinforced concrete pipes will become future public assets, they be required to be fitted with collars.

4.???? Council?s ?Guidelines for Engineering Works Associated with Subdivisions and Developments (1997)? be amended to reflect the proposed specification changes for fibre reinforced concrete pipes.

5.???? The development industry, and particularly subdivision contractors, be formally notified of the changes to Council?s specifications.

6.???? Council?s Engineering Services Department continue to monitor the performance of fibre reinforced concrete pipes with a view to reassessing Council?s position as part of a complete review of Council?s ?Guidelines for Engineering Works Associated with Subdivisions and Developments (1997)?.

7.???? A further report be presented to a Policy Review Committee meeting detailing Asset Life, Vic Roads position and implications for Penrith on Fibre Reinforced Concrete Pipes in the Penrith Local Government Area.?

 

Current Situation

In response to resolution 7 of the previous report, further information is provided below in relation to asset life, position of State road authorities and further discussion on the implications for Penrith.

 

Asset Life

Council?s Engineering Services Department has reviewed current information regarding the design life of both Steel Reinforced Concrete (SRC) pipes and FRC pipes.

 

Testing and technical documentation provided by the pipe manufacturers states that where these pipes are constructed in accordance with AS4058 (SRC pipes) and AS4139 (FRC pipes) and installed in accordance with AS3725, then a design life of at least 100 years is expected.

 

In accepting this information, Council has the reassurance that all road building materials and products are heavily scrutinised by State road authorities as part of their quality assurance processes.? These authorities need to be satisfied that stormwater pipes used in their road work projects have an acceptable design life.? The latest position of the Roads and Maritime Services (RMS) and VicRoads is discussed below.

 

State Road Authorities

 

RMS

Conversations held with the RMS have indicated that the position on FRC pipes is currently under review.? The pipes are currently being used in State projects, with all joints being required to be collared.

 

VicRoads

In the time since the preparation of the last report, VicRoads has revised its policy on FRC pipes.? Previously, a materials alert had been issued for FRC pipes, stating that FRC pipes were not permitted beneath roads, and in all other cases, pipes were permitted at no greater size than 550mm diameter.? This was done to minimise the risk to VicRoads by restricting usage, until such time as technical information associated with asset life and performance of the product was provided to VicRoads for review.

 

The technical information has subsequently been provided to VicRoads by the manufacturer, and the materials alert has been revisited.? A revised specification for FRC pipes was released in March 2013.? The controls on the use of FRC pipes were revised as follows:

 

-???? FRC rigid pipes accepted, up to and including 750mm diameter

-???? design life is to be 100 years

-???? all pipes are to be fitted with collars

-???? continuous quality control testing shall be undertaken.

 

Implications for Penrith

Council?s City Works Department has advised that in the last three years Council has received approximately 21 lineal kilometres of stormwater pipes to manage and maintain, equating to approximately $6.5 million in new assets.? Based on knowledge of recent subdivision release areas, the use of FRC pipes is becoming more predominant and therefore it is important that the Council is satisfied with their suitability and performance to ensure future budgets are not adversely impacted.

 

It is important to note that Council officers have full control over the acceptance of stormwater pipes through the inspection and certification process.? The pipes are inspected before installation, prior to backfilling and post construction (via closed circuit television).? Due to the rigorous inspection and certification regime, the risk to Council of accepting these assets is considered to be minimal.

 

Conclusion

The additional information provided in this report has strengthened Council?s previous position for the continued acceptance of FRC pipes, subject to the required updates to Council?s specifications and continued monitoring of these pipes.?

 

Council?s ?Guidelines for Engineering Works for Subdivisions and Developments (1997)? should be further updated to require that a 100-year design life be adopted for all stormwater pipe systems.

 

 

 

RECOMMENDATION

That:

1.???? The information contained in the report on Further Review of the Suitability & Performance of Fibre Reinforced Concrete Pipes in the Penrith Local Government Area be received.

2.???? Council?s ?Guidelines for Engineering Works for Subdivisions and Developments (1997)? be further amended to specify that the design life of all pipe systems is to be 100 years.

 

ATTACHMENTS/APPENDICES

1. View

Review of Suitability & Performance of FRC Pipes in the Penrith LGA - OM Report 25.03.2013

4 Pages

Appendix

??


Policy Review Committee Meeting????????????????????????????????????????????????????????????????????????????????????????? 13 May 2013

Attachment 1 - Review of Suitability & Performance of FRC Pipes in the Penrith LGA - OM Report 25.03.2013

 




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THIS PAGE HAS BEEN LEFT BLANK? INTENTIONALLY


A Vibrant City

 

Item?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? Page

 

3??????? Moveable advertising and signage on Council land ??????????????????????????????????????????????????????? 19

?

 



Policy Review Committee Meeting ???????????????????????????????????????????????????????????????????????? 13 May 2013

A Vibrant City

 

 

3

Moveable advertising and signage on Council land???

?

Compiled by:?????????????? Julie Condon, Development Enquiry Unit Coordinator

Authorised by:??????????? Colin Wood, Acting Development Services Manager ?

Requested By:???????????? Councillor Greg Davies

Councillor Jim Aitken OAM

 

Objective

We build on our strengths, value our heritage, celebrate our cultural diversity, and foster creativity

Community Outcome

A City with design excellence that respects our local identity (22)

Strategic Response

Promote good design, sustainable buildings, and development that enhances our City (22.1)

???????

 

Executive Summary

Moveable signage is becoming an increasingly popular method of promoting businesses, products, organisations and events. This type of advertising is often found to be located on Council owned land, public roads or road reserves where they are not authorised and may cause an obstruction to traffic or pedestrians or be a distraction to drivers.

 

The purpose of this report is to outline the planning provisions which relate to these signage types and recommend Council adopt a policy position regarding this matter.

 

Background

Historically, advertising and signage approval have been limited to signage attached to a property or business premises. The regime of planning policy and controls relating to signage are based on this premise. Consent can be granted for signage on a property where the proposed sign meets the development controls for the zone and use as described in the Local Environmental Plan (LEP) and Development Control Plan (DCP).

 

More recently there has been a trend for businesses to become more mobile and they are now promoting their activities in locations not limited to the premises they occupy. Examples of this include signage on vehicles and trailers such as coffee carts, mobile dog washes, and the trailers of tradesmen in which they carry their tools. Other examples are trailers with signs built into them which are purpose built for promotions carried out by businesses or organisations such as the NRMA or radio stations, or for the promotion of a candidate in an election.

 

The type of advertising is often found to be located on Council owned land, public roads or road reserves where they are not authorised and may casue an obstruction to traffic or pedestrians or be a distraction to drivers.

 

The current framework of planning policy which relate to advertising and signage contains provisions covering the majority of scenarios where signage is affixed to a premises.? The land based nature of the approvals regime does not adequately address regulation of signage which is moveable.

 

Planning Policy/Legislation Relating to Moveable Advertising and Signage

Many policies provide for advertising and signage across the Local Government Area at a State and local level. They cover zoning, permissibility, design and merit considerations of the development as well as signage on private and publicly owned land.

 

State Environmental Planning Policy No.64 ? Advertising and signage and the associated guidelines prepared by the Department of Planning and Infrastructure, provide for assessment and consent requirements for advertising that is visible from public places, including roads.?

 

Local Environmental Plans provide for zoning and permissibility of advertising and signage, and development control plans provide detail to guide the quality of advertising and signage design and location.

 

In considering the merits of using roads for advertising structures, the ?Advertising and Signage? provisions of Council?s Development Control Plans consider the following signs inappropriate:

?

?signs mounted on motor vehicles, trailers (both registered and unregistered) where the principal purpose of the vehicle or trailer is not for the transportation of goods or people but is parked in a location and position as an advertising medium.?

 

This means it may be considered acceptable to have signage painted or mounted on a work vehicle being used by the person travelling to or undertaking the work advertised.? However, it is not appropriate to fit a sign to a trailer or the side of a vehicle purely for the purpose of promoting a business, organisation, person or event or for commercial gain.

 

Other legislation is used to determine whether advertising and signage on roads is lawful and Council?s Rangers enforce these policies.

 

1.?? Zoning and ownership of roads

Permissibility and approval for signage is dependent on the location of the site and the land uses which are permitted to be conducted upon the land as prescribed by an environmental planning instrument. An application for approval for signage is required to be endorsed by the owner of the land on which the sign is to be located.

 

Where signage requiring consent is not located within or upon privately owned land, the issue of seeking or granting approval becomes problematic. Parking a sign on a piece of land would require development approval in the same way as erecting a permanent sign or advertisement.?

 

This issue is further complicated where the sign is located within a road reserve or on public land.

 

Some roads (usually local roads) are allocated the same zoning as the adjoining land. Other roads that are higher in hierarchy to local roads are usually zoned as roads in the LEP. Advertising and signage are prohibited on local roads that are zoned for road purposes only. For other local roads, consent for advertising and/or signage on the road is not likely to be granted despite being ?permissible? as consent from the owners of the land (Council) for the submission of the application is unlikely to be issued.?

 

The Roads and Maritime Service (RMS) have advised that for higher order roads in their ownership, advertising signage can contain either messages for road users. Where messages on signs are for road users, the RMS have policies ensuring they are put into operation correctly and also have authority to remove the structure where it is not compliant. Other unauthorised signage is not supported by the RMS, owing to safety concerns. The RMS have advised they would not issue owner?s consent for use of their land for moveable advertising structures.

 

2.?? Council?s compliance role in ensuring these structures are managed

Council?s Rangers use the following legislation and authority, where appropriate, to enforce car parking requirements:

 

1.? The Local Government Act 1993 outlines circumstances where Council has responsibility to issue orders under the Roads Act 1993 for the removal of an obstruction or encroachment on a road;

 

2.? The Roads Act 1993 defines Council as the ?roads authority?, to undertake certain functions, including the above referred orders;

 

3.? Under the Australian Road Rules 2008 (as made under Road Transport (Safety and Traffic Management) Act 1999), Council has authority to regulate car parking;

 

4.? Environmental planning policies at a State and Local level (being provisions within Local Environmental Plans (LEP?s) and DCP?s provide for instances where consent is (or is not) required for advertisements and their associated structures or where they are prohibited.

 

In the absence of consent, Council?s Rangers use their authority to order the removal of unauthorised inappropriate moveable advertising and signage under the applicable legislation. This method of controlling moveable signage can only be undertaken where there is an infringement of the legislation. If the vehicle and/or attachment is lawfully parked, Council?s ability to undertake compliance action can be compromised.??

 

3.?? Management of Moveable Signage

Council?s Rangers undertake compliance action where they are authorised to do so however, Council has not taken a formal policy position on this issue.?

 

Other councils, such as Liverpool, have taken a position and adopted policies strengthening their position in enforcement of signage on roads and Council owned land.

 

These policies contain statements to the effect that signage is not permitted on Council owned land, roads or road reserves, and that Council Officers will enforce the policy and the relevant legislation.

 

 

Conclusion

Moveable signage is becoming an increasingly popular method of promoting businesses, products, organisations and events. This type of advertising is often found to be located on Council owned land, public roads or road reserves where they are not authorised and may cause an obstruction to traffic or pedestrians or be a distraction to drivers.

 

Advertising and signage on roads and public land is managed through existing planning policy and legislation. Development consent is not able to be obtained for signage on roads and public land without the endorsement of the land owner (i.e. Council).

 

At the present time Council has not taken a formal policy position on the issue. It is recommended Council adopt a position not to support moveable signage on Council owned land, including public roads and road verges, and that a Policy be prepared regarding signage on Council owned land.

 

 

 

RECOMMENDATION

That:

1.???? The information contained in the report on Moveable advertising and signage on Council land be received.

2.???? A Policy be developed for endorsement by Council regarding the placement of signage on Council land.

 

ATTACHMENTS/APPENDICES

There are no attachments for this report. ?


 

ATTACHMENTS???

 

 

Date of Meeting:???????? Monday 13 May 2013

Delivery Program:????? A Leading City

Issue:??????????????????????????? Deliver services for the City and its communities, and maintain our long term financial sustainability (4.1)

Report Title:??????????????? Investment Policy

Attachments:?????????????? Investment Policy - draft



Policy Review Committee Meeting?????????????????????????????????????????????????????????????????????????????? 13 May 2013

Attachment 1 - Investment Policy - draft

 

 

 

 

 

 

 

 

investment policy


 

 

 

 

 

 

 

 

 

DRAFT???????????????????????????????????????????????????????????????????????????????????????????????????

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1??? Contents

 

 

1???? Contents. 2

2???? Definitions. 3

3???? Purpose. 5

4???? Objectives. 5

5???? Policy Statement 5

6???? Legislative Requirements. 5

7???? Authorised Investments. 6

8???? Transitional Arrangements. 6

9???? Safe Custody Arrangements. 6

10?????? Risk Management 7

10.1??? Credit and Maturity Guidelines. 7

10.2??? Overall Portfolio Credit Framework. 7

10.3??? Additional Guidelines. 8

11?????? Liquidity. 8

12?????? Performance Benchmarks. 8

13?????? Investment Strategy. 8

14?????? Direct Investments. 9

14.1??? Quotations on Investments. 9

15?????? Minimum Investments. 9

16?????? Ethical and Socially Responsible Investments. 9

17?????? Responsibility for Implementing this Policy and Reporting. 9

18?????? Delegation of Authority. 10

19?????? Use of Investment Advisors. 10

Attachment A ? Local Government Act 11

Attachment B ? Investment Order 12

Attachment C ? Local Government (General) Regulation. 13

Attachment D ? The Trustee Act 14

Attachment E ? Investment Instrument Description. 16

Attachment F ? Standard & Poor?s Ratings Description. 17

 

 

 


 

2??? Definitions

 

Authorised Deposit Taking Institutions

ADIs (Authorised Deposit-taking Institutions) are financial institutions which are authorised under the Banking Act 1959 and are subject to the prudential standards set out in the Act and regulated by APRA.

 

Australian Prudential Regulation Authority

APRA (Australian Prudential Regulation Authority) is the prudential regulator of the Australian financial services industry.? APRA enforces prudential standards and practices (e.g. capital adequacy and other risk management issues) of banks, credit unions, building societies, insurance companies and friendly societies

 

Austraclear

Austraclear is a clearing and settlement facility, licensed by the Australian Securities and Investments Commission and subject to certain financial stability standards administered by the Reserve Bank of Australia.

 

Bill of Exchange

A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of the specified person, or to the bearer.

 

Code

Code means the Local Government Code of Accounting Practice and Financial Reporting published by the Division of Local Government (as in force from time to time).

 

Credit Rating

Credit Rating refers to a short or long term summary assessment of the credit worthiness of a debt issuer or of a specific issue.

 

Credit Risk

Credit risk is the risk of loss to an investor due to the failure of the institution /entity with which an investment is held to pay the interest and/or repay the principal of an investment.

 

Direct Deposits

Direct deposits refer to investments made by Council (or on behalf of Council) directly with financial institutions.

 

Investment Portfolio

The total pool of Council?s investments.

 

Minister?s Order

Minister?s Order refers to the Order of the Minister for Local Government relating to Investments made by Councils dated 12 January 2011.

 

Moody Investor Services

Moody Investor Services is a credit rating agency that assigns credit ratings to corporate issues based on the prospects of default.

 

Prudent Person Standard

Prudent person standard is a legal standard restricting the investing and managing of a client?s account to what a prudent person seeking reasonable income and preservation of capital might exercise for his or her own investment.

 

Responsible Accounting Officer

Responsible Accounting Officer (RAO) of a council means a member of the staff of the council designated by the General Manager, or if no such member has been designated, then the General Manager.

 

Standard & Poor?s

Standard & Poor?s is a credit rating agency that assigns credit ratings to corporate issues based on the prospects of default.

 

Surplus Funds

Surplus Funds refers to money that is not, for the time being, required by the council for any other purpose.

 

 


 

3??? Purpose

 

The purpose of this policy is to:

 

a)?? Outline considerations for investment of surplus funds in line with Council?s current Investment Strategy;

 

b)?? Provide a strategy & framework to maximise earnings from authorised investments and ensure the security of Council funds;? and

 

c)?? Ensure that Council and its representatives exercise care, diligence and skill that a prudent person would exercise in investing Council?s funds.

 

 

4??? Objectives

 

While exercising the power to invest, consideration needs to be given to preservation of capital, liquidity, and the return on investment.

 

???? Preservation of capital is the principal objective of the investment portfolio.? Investments are to be placed in a manner that seeks to ensure security and safeguarding the investment portfolio. Officers are to manage the investment portfolio to safeguard the portfolio in accordance with the spirit of this Investment Policy and the Ministerial Investment Order, and not for speculative purposes.?

 

???? The investment portfolio will ensure there is sufficient liquidity to meet all reasonably anticipated cash flow requirements, as and when they fall due, without incurring significant costs due to the unanticipated sale of an investment.

 

???? The investment is expected to achieve an acceptable rate of return having reference to the Council?s risk tolerance. Any additional return target set by the Council will also consider the risk limitation and prudent investment principles.

 

 

5??? Policy Statement

 

Council will seek to maximise earnings from authorised investments within agreed levels of risk, return and exposure.

 

 

6??? Legislative Requirements

 

?????????

All investments are to be made in accordance with:

 

???? Local Government Act 1993 ? Section 412 & 625???????

Attachment A

 

???? Local Government Act 1993 ? Prevailing Order (of the Minister)

Attachment B

 

???? Local Government (General) Regulation 2005 ? Clause 212

Attachment C

 

???? The Trustee? Act 1995 ? Sections 14A(2), 14C(1) & (2)

Attachment D

 

???? Australian Accounting Standards

 

???? Division of Local Government Investment Policy Guideline May 2010

 

???? Division of Local Government Circulars

 

 

7??? Authorised Investments

 

All of the Council?s investments must be denominated in Australian Dollars. The Council may only invest money in the following forms of investment, as taken directly from the Local Government Act 1993 ? Order (of the Minister) Circular No: 11/01 gazetted on 11 February 2011 (Full document included in Schedule 3):

 

a)?? Any public funds or securities issued by or guaranteed by, the?? Commonwealth, any State of the Commonwealth or a Territory;

 

b)?? Any debentures or securities issued by a council (within the meaning of the Local Government Act 1993 (NSW));

 

c)?? Interest bearing deposits and floating rate notes with, or any debentures or bonds issued by, an authorised deposit-taking institution (as defined in Banking Act 1959 (Cwth)), but excluding subordinated debt obligations;

 

d)?? Any bill of exchange which has a maturity date of not more than 200 days, and if purchased for value confers on the holder in due course a right of recourse against a bank which has been designated as an authorised deposit-taking institution by the Australian Prudential Regulation Authority;

 

e)?? A deposit with the New South Wales Treasury Corporation or investments in an Hour-Glass investment facility of the New South Wales Treasury Corporation.

 

All investment instruments (excluding short term discount instruments) referred to above include both principal and investment income.

 

 

8??? Transitional Arrangements

 

Subject to paragraph (ii) nothing in this Order affects any investment made before the date of this Order which was made in compliance with the previous Ministerial Order dated 31 July 2008 and such investments are taken to be in compliance with this Order.

 

Paragraph (i) only applies to those investments made before the date of this Order and does not apply to any restructuring or switching of investments or any re-investment of proceeds received on disposal or maturity of such investments, which for the avoidance of doubt must comply with this Order.

 

 

 

 

9??? Safe Custody Arrangements

 

Where necessary, investments may be held in safe custody on Council?s behalf, as long as the following criteria are met:

 

???? Council must retain beneficial ownership of all investments and investments must be held in Council?s name.

 

???? Adequate documentation is provided, verifying the existence of the investments.

 

???? The Custodian conducts regular reconciliation of records with relevant registries and/or clearing systems.

 

???? The Institution or Custodian recording and holding the assets will be:

 

o? Austraclear, or

o? An institution with an investment grade rating from Standard and Poor?s or equivalent, or

o? An institution with adequate insurance, including professional indemnity insurance and other insurances considered prudent and appropriate to cover its liabilities under any agreement.

 

 

10? Risk Management

10.1?? Credit and Maturity Guidelines

 

Investments are to comply with two key criteria relating to:

 

???? Overall Portfolio Credit Framework:? limit overall credit exposure of the portfolio, and

 

???? Institutional Credit Framework:? limit exposure to individual institutions based on their credit ratings.

 

All references to credit ratings refer to that applied by ratings agency Standard and Poor?s (or equivalent).

10.2?? Overall Portfolio Credit Framework

 

To control the credit quality on the entire portfolio, the following credit framework limits the percentage of the portfolio exposed to any particular credit rating category so that single entity exposure is limited (refer to Appendix F for Standard and Poor?s ratings? definitions).

 

 

Portfolio mix

Direct Investments

NSW Treasury? Corp (Managed Fund)

Institutions

Australian Cash & Fixed Interest

Max % with a single issuer

Max %

S & P Rated AAA- to AA- (very strong capacity to pay)

100

25

NA

S & P Rated A+ to A- (strong capacity to pay)

100

20

NA

NSW Treasury Corp/Hourglass Facility

20

20

20

Building Societies (holding S&P Investment grade rating as a minimum)

20

20

NA

????? or Moody?s / Fitch equivalents

?                  

The Council?s risk profile for the purposes of investing surplus cash funds can generally be described as conservative, risk averse and income defensive and has the following characteristics:

 

???? A requirement for secure income stream, and

???? A requirement for capital protection.

 

Section 14C of the Trustee Act 1925 provides guidelines for trustees to have regard to when exercising the power of investments. These guidelines (Attachment D) are considered appropriate for Council and underpin the formulation of this investment policy and are in accordance with legislative requirements.

 

10.3?? Additional Guidelines

?????????

The following Risk Management Strategies will apply where appropriate:

 

???? Investment credit rating and maturity percentage limits will be applicable as at the time of making the specific investment taking into consideration of reasonable cash flow expectations.

 

???? Investments that fall outside of the above parameters post initial investment shall be divested as soon as practicable whilst being cognisant of prevailing market conditions.

 

???? In the event that the credit rating of a security falls below the credit rating limits as set within this Investment Policy, Council will divest of the investment as soon as practicable whilst being cognisant of any extenuating circumstances.

 

 

11? Liquidity

 

Council must ensure it maintains a minimum level of liquid funds available to finance day-to-day requirements. Cash flows must be monitored daily.

 

 

12? Performance Benchmarks

 

Within legislative and policy constraints, Council?s performance benchmark from which to measure rates of return will be the 90 day Bank Bill Swap Rate (BBSW).

 

 

 

 

 

13? Investment Strategy

 

????? Council?s investment objective is to optimise interest income within acceptable risk parameters whilst ensuring the security of these funds. This can be achieved whilst complying with relevant legislation by investing in Australian Cash and Fixed Interest.

 

????? An Investment Strategy will run in conjunction with the Investment Policy. The Strategy will be reviewed regularly and may involve consultation with independent investment advisors.? The Strategy will consider:

 

???? Council?s cash flow expectations,

???? Optimal target allocation of investment types, credit rating exposure, and term to maturity exposure,

???? Appropriateness of overall investment types for Council?s portfolio, and

???? The investment portfolio level required for the forthcoming year.

 

The Investment Strategy will fully comply with legislative requirements and the investment policy.

 

 

14? Direct Investments

14.1?? Quotations on Investments

 

For direct investments made by Council independent of investment advice from Council?s advisor(s), not less than 3 quotations from authorised institutions must be sought whenever an investment is proposed. The best quote of the day will be allowed after allowing for risk and other costs and after having regard to limits as listed in Council?s Investment Portfolio Guidelines.

 

Note: Clause (d) of the Minister?s Order restricts ?Bills of Exchange? to 200 days.

 

Other direct investments should be bought and held to maturity unless an opportunity presents itself to trade the security to Council?s advantage.

 

 

15? Minimum Investments

 

Face value of individual investments should generally be a minimum of $500,000, but typically a larger amount.

 

 

16? Ethical and Socially Responsible Investments

 

Ethical and socially responsible investments (SRIs) are a means for investors to support their values in terms of socially responsible investments. In addition to normal risk assessment, investments can be further evaluated in terms of environment, social and governance issues.

 

Subject to legislative compliance and investment policy objectives, Council supports investments in Ethical and Socially Responsible Investments.

 

 

 

 

17? Responsibility for Implementing and Reviewing this Policy and Reporting of Investments

 

The Trustee Amendment (Discretionary Investments) Act 1997 requires at Section 14 (4) that: ?A trustee must, at least once in each year, review the performance (individually and as a whole) of trust investments.? This policy provides far more stringent reporting requirements as detailed below.

 

The Financial Services Manager is responsible for implementing this investment policy and providing the following reports:

 

a)?? A monthly report to Council showing:

 

o? Confirmation of compliance with legislation and policy limits, and

o? Investment portfolio performance.

 

b)?? For audit purposes, certificates must be obtained from financial institutions confirming the amounts of investment held on Council?s behalf at 30th June each year.

 

The Investment Policy will be reviewed on a regular basis, at least once a year or as required in the event of legislative changes. Any amendment to this Policy must be by way of Council resolution.

 

????

18? Delegation of Authority

 

The Group Manager - Finance has authority to invest surplus funds and may delegate this function subject to various financial limits and restrictions as stated in this investment policy. Delegation has been given to the Financial Services Manager, Financial Accountant, Expenditure Accountant and Expenditure Officer.

 

 

19? Use of Investment Advisors

 

Council?s investment advisor must be independent and with no actual or potential conflict of interest in relation to the investment products they recommend or review.

 

The investment advisor will be engaged in line with Council?s adopted tender guidelines and procedures or consulted on a one-off basis as required.

 

 

 

 

 

 

 

 

 

 


 

Attachment A ? Local Government Act

 

Local Government Act 1993 ? Section 625

 

625?????? ? How may councils invest?

(1)??????? A council may invest money that is not, for the time being, required by the council for any other purpose.

 

(2)??????? Money may be invested only in a form of investment notified by order of the Minister published in the Gazette.

 

Editorial note. See Gazettes No 152 of 24.11.2000, p 12041; No 94 of 29.7.2005, p 3977 and No 97 of 15.8.2008, p 7638.

 

(3)??????? An order of the Minister notifying a form of investment for the purposes of this section must not be made without the approval of the Treasurer.

 

(4)??????? The acquisition, in accordance with section 358, of a controlling interest in a corporation or an entity within the meaning of that section is not an investment for the purposes of this section.


Attachment B ? Investment Order

 

?


 

Attachment C ? Local Government (General) Regulation

 

Local Government (General) Regulation 2005 ? Clause 212

 

212???????????????? Reports on council investments

(1)?? The responsible accounting officer of the council:

 

(a)  must provide the council with a written report (setting out details of all money that the council has invested under section 625 of the Act) to be presented:

 

(i)???????? if only one ordinary meeting of the council is held in a month, at that meeting, or

 

(ii) if more than one such meeting is held in a month, at whichever of those meetings the council by resolution determines, and

 

(b)  must include in the report a certificate as to whether or not the investment has been made in accordance with the Act, the regulations and the Council?s investment policies.

 

(2)??????? The report must be made up to the last day of the month immediately preceding the meeting.

 

Note. Section 625 of the Act specifies the way in which a council may invest its surplus funds.


Attachment D ? The Trustee Act

 

The Trustee Act 1925 Sections 14A (2), 14C (1) & (2)

 

14 Powers of investment

 

A trustee may, unless expressly forbidden by the instrument (if any) creating the trust:

 

(a) invest trust funds in any form of investment, and

(b) at any time vary any investment.

 

14A Duties of trustee in respect of power of investment

 

(1) This section has effect subject to the instrument (if any) creating the trust.

 

(2) A trustee must, in exercising a power of investment:

 

(a) if the trustee's profession, business or employment is or includes acting as a trustee or investing money on behalf of other persons, exercise the care, diligence and skill that a prudent person engaged in that profession, business or employment would exercise in managing the affairs of other persons, or

(b) ????????? if the trustee is not engaged in such a profession, business or employment, exercise the care, diligence and skill that a prudent person would exercise in managing the affairs of other persons.

 

Some Acts deem investments under the Acts to be investments that satisfy the prudent person test. See, for example, section 39 of the Public Authorities (Financial Arrangements) Act 1987.

 

(3) A trustee must exercise a power of investment in accordance with

??? any provision of the instrument (if any) creating the trust that?

??? is binding on the trustee and requires the obtaining of any

??? consent or approval with respect to trust investments.

 

(4) A trustee must, at least once in each year, review the performance (individually and as a whole) of trust investments.

 

14C Matters to which trustee is to have regard when exercising power of investment

 

(1) Without limiting the matters that a trustee may take into account

??? when exercising a power of investment, a trustee must, so far as

??? they are appropriate to the circumstances of the trust, if any,

??? have regard to the following matters:

 

(a) the purposes of the trust and the needs and circumstances of

??? the beneficiaries,

(b) the desirability of diversifying trust investments,

(c) the nature of, and the risk associated with, existing trust

??? investments and other trust property,

(d) the need to maintain the real value of the capital or income

??? of the trust,

(e) the risk of capital or income loss or depreciation,

(f) the potential for capital appreciation,

(g) the likely income return and the timing of income return,

(h) the length of the term of the proposed investment,

(i) the probable duration of the trust,

(j) the liquidity and marketability of the proposed investment

??? during, and on the determination of, the term of the

??? Proposed investment,

(k) the aggregate value of the trust estate,

(l) the effect of the proposed investment in relation to the tax

??? liability of the trust,

(m) the likelihood of inflation affecting the value of the

??? proposed investment or other trust property,

(n) the costs (including commissions, fees, charges and duties

??? payable) of making the proposed investment,

(o) the results of a review of existing trust investments in

??? accordance with section 14A (4).

 

(2) A trustee may, having regard to the size and nature of the trust,?

??? do either or both of the following:

 

(a) obtain and consider independent and impartial advice

??? reasonably required for the investment of trust funds or the

??? management of the investment from a person whom the trustee

??? reasonably believes to be competent to give the advice,

(b) pay out of trust funds the reasonable costs of obtaining the

??? advice.

 

(3) A trustee is to comply with this section unless expressly

??? forbidden by the instrument (if any) creating the trust.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Attachment E ? Investment Instrument Description

 

11am call deposits

Cash invested on an overnight basis.? Funds can be recalled or re-invested before 11am on the following business day.?

Term Deposit

Funds invested with a financial institution at a predetermined rate that applies to the duration of the deposit.? The principal is held on deposit for a fixed term with interest payable at set periods during the term and/or on maturity.? It is not a tradeable security and the investor is penalised when funds are prepaid.?

Bank Bill

Bank-accepted bills are bills of exchange drawn by a company or individual (borrower) usually for periods between 30 and 180 days.? The bill is accepted by the bank, which in turn accepts the liability for payment at maturity.? It is a short-term investment issued at a discount to the face value and is of a very high credit standing, consequently trades at the lowest yields of all commercially issued bills.?

Negotiable Certificate of Deposit (NCD)

These are short-term bearer securities issued by banks for up to 180-days.? They are sold at a discount to face value and are highly liquid discount securities; representing the bank?s debt, therefore trade at similar yields to bank bills.? Creditworthiness of the bank will determine where the bank?s NCD trades, relative to the BBSW.

Floating Rate Note/Bond (FRN)

The FRN is a longer-term debt security issued for a fixed period of time but has a variable (floating) coupon on a monthly or quarterly basis.? The coupon reflects current interest rates, which is determined as a margin over the BBSW rate set.? FRNs appeal to investors who are reluctant to commit funds to fixed interest investments for longer periods in times of fluctuating interest rates.? Typical issuers are banks, corporates, financial institutions and securitised vehicles. Only Senior FRNs issued by an Australian Authorised Deposit Taking Institution such as a bank, credit union or building society are an eligible form of FRN investment.?

Fixed Interest Securities (Bonds)

Securities issued by Commonwealth, State or corporate institutions that pay a fixed rate of interest (coupon) and mature at a fixed point in time.? The interest (coupon) is paid at regular intervals (semi-annually, but can be paid monthly, quarterly, or annually).? These securities are generally issued for a period of greater than one year.

Pooled Managed Funds

??? Sector Specific Funds

These funds invest in one particular asset sector.? A Cash Management Fund is an example of Sector Specific Funds as they predominately invest in the single asset sector of fixed/floating income securities with the aim of outperforming the UBS 90 day Bank Bill Index benchmark. They are designed to enhance returns on short-term holdings as an alternative to short-dated bank bill and term deposit portfolios.? They provide easy access to holdings and are usually redeemable within 24 to 48 hours.

These types of funds tend to have no fixed maturity date. Only funds managed by NSW Treasury Corporation are currently eligible pooled managed fund investments.


Attachment F ? Standard & Poor?s Ratings Description

 

Credit Ratings

Standard & Poor?s (S&P) is a professional organisation that provides analytical services.? An S&P rating is an opinion of the general creditworthiness of an obligor with respect to particular debt security or other financial obligation ? based on relevant risk factors.

 

Credit ratings are based, in varying degrees, on the following considerations:

 

???? Likelihood of payment.

???? Nature and provisions of the obligation.

???? Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganisation or other laws affecting creditors? rights.

 

The issue rating definitions are expressed in terms of default risk.

 

Short-Term Obligation Ratings are:

???? A-1: This is the highest short-term category used by S&P.? The obligor?s capacity to meet its financial commitment on the obligation is strong.? Within this category, certain obligations are designated with a plus sign (+).? This indicates that the obligor?s capacity to meet its financial commitment on these obligations is extremely strong.

 

???? A-2: A short-term obligation rated A-2 is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories.? However, the obligor?s capacity to meet its financial commitment on the obligation is satisfactory.

 

???? A-3: A short-term obligation rated A-3 exhibits adequate protection parameters.? However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

 

Long-Term Obligations Ratings are:

???? AAA: An obligation/obligor rated AAA has the highest rating assigned by S&P.? The obligor?s capacity to meet its financial commitment on the obligation is extremely strong.

 

???? AA: An obligation/obligor rated AA differs from the highest rated obligations only in a small degree.? The obligor?s capacity to meet its financial commitment on the obligations is very strong.

 

???? A: An obligation/obligor rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than

 

 

Obligations/obligor in higher rated categories.? However, the obligor?s capacity to meet its financial commitment on the obligation is still strong.

 

BBB: An obligation/obligor rated BBB exhibits adequate protection parameters.? However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to the obligor to meet its financial commitment on the obligation.

 

Unrated: Financial institutions do not necessarily require a credit rating from the various ratings agencies such as Standard and Poor?s and these institutions are classed as ?Unrated?.? Most Credit Unions and Building Societies fall into this category. These institutions nonetheless must adhere to the capital maintenance requirements of the Australian Prudential Regulatory Authority (APRA) in line with all Authorised Deposit Taking Institutions (Banks, Building Societies and Credit Unions).?

 

Plus (+) or Minus (-): The ratings from ?AA? to ?BBB? may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

 

CreditWatch highlights an emerging situation, which may materially affect the profile of a rated corporation and can be designed as positive, developing or negative. Following a full review the rating may either be affirmed or changed in the direction indicated.

 

A Rating Outlook assesses the potential direction of an issuer?s long-term debt rating over the intermediate-to-long term.? In determining a Rating Outlook, consideration is given to possible changes in the economic and/or fundamental business conditions.?? An outlook is not necessarily a precursor of a ratings change or future CreditWatch action.? A ?Rating Outlook ? Positive? indicates that rating may be raised.? ?Negative? means a rating may be lowered.? ?Stable? indicates that ratings are not likely to change.? ?Developing? means ratings may be raised or lowered.?

 

?