THE City of Busselton's investments in managed funds in the 2007-2008 Financial Year resulted in a net positive return of more than $800,000.

The City of Busselton's financial report was scrutinised at the Annual Meeting of Electors held in Busselton last Wednesday, where attendees were led to believe that more than $1 million had been lost by the Shire in the past 16 months.

A member of the public at the meeting questioned who was responsible for this purported million dollar loss.  However, the figures used to arrive at this assumption were not considered in the context of the complete report on the City of Busselton's investment portfolio which returned in the 2007-2008 Financial Year income of $1.6m, compared to $1.8m in 2006-2007 Financial Year; and a further $300,000 to 31^st December, 2008.

The City of Busselton has had an association with Counterpoint Grove Research and Advisory Pty Ltd since 1999 to provide the Shire with professional independent advice on, and review of, the City of Busselton's Investment Portfolio.  Since 1999, the majority of the City of Busselton's funds have been invested in Managed Funds. 

While in 2007/08 there were some realised losses incurred on the sale of financial units and the Shire has also reported some unrealised losses due to the current diminished value of units still held, this has been more than offset by distributions and other returns.  The value of the investment portfolio at the beginning of the 2007-2008 Financial Year was $28,717, 610.  Consequent to deposits and withdrawals within the Financial Year 2007-2008, the balance of the investment portfolio was $19,117,610.  After adjustments due to distributions, fees and the losses identified, the closing position at 30^th June, 2008 was $19,941,787.  This clearly represents an increase in value of more than $824,000. 

Shire President, Wes Hartley, said if only part of the reported return is considered in isolation, the true position achieved is not properly identified.  "The strictly controlled implementation of the City of Busselton's Investment Policy had ensured that the City of Busselton has minimised its exposure to the World Economic Crisis.  While the return achieved from the City of Busselton's Managed Funds has not been as high as it would have liked during the past 18 months, it must be noted that this result is extremely positive in the current environment",  Cr Hartley said.

"In late 2007, officers took a strategic decision within the investment policy framework to move investments to safer harbours.  This was reported clearly to the Electors' Meeting.  This is in stark contrast to numerous Local Government Authorities in Western Australia, both metropolitan and regional, who have reported significant losses in the book value of their investments", he said.

The Shire President reiterated that the City of Busselton's Finance Staff were recognised by the Minister for Local Government, the Hon John Castrilli, on 13^th October 2008, for their excellence in financial reporting and accountability.  At the presentation the Minister said "The world economic crisis gives these awards extra significance".  The City of Busselton's Investment Policy, which has been in place since 1999 and last reviewed by the Council in 2008, places very strict controls on where the City of Busselton's funds can be invested.  "We are in very safe hands", Cr Hartley said.        ENDS

Media enquiries can be directed to the City of Busselton's Public Relations Officer, Helena Webb,  on 9781 0446 or helena.webb@busselton.wa.gov.au