Council, 23 March 2001. Amended July 2001, March 2004, June 2004 and February 2009.
Council, 23 March 2001
2. That $100 million of the capital return from Orion (NZ) Ltd be allocated to the debt repayment reserve and $75 million to the capital endowment fund.
3. That up to 100 per cent of the available income from the fund be allocated in year 1 and up to 75 per cent be allocated for subsequent years.
4. That to provide a more secure funding flow to local community projects, income from the fund be allocated each year in the following way:
5. That the above general categories be reviewed on a three yearly cycle.
6. That, if desired, funding for a particular category be carried forward to another year.
7. That civic and community projects which have a cost of less than $100,000 in any one year not be funded from the capital endowment fund.
8. That no single project be funded for more than three years, except in exceptional circumstances.
1. That the investment objectives and policies as follows be approved:
The Council will invest the assets of the fund in a broad range of investments designed to achieve the following objectives:
- Maintain the real value of the capital of the fund with regard to inflation.
- Maximise the value of the fund and therefore the amount that can be distributed from the fund over the long term, subject to a prudent level of portfolio risk.
- Maintain a degree of consistency in the amounts that can be withdrawn on an annual basis.
The Investment Policies adopted by the Council to achieve the above objectives are:
- Responsibilities under common law and statute must be met. The following policies will be interpreted and applied subject to this policy.
- The inflation-adjusted capital of the fund shall not be withdrawn.
- An appropriate level of portfolio risk will be determined and accepted by the Council in consultation with professional advisers.
- An appropriate level of diversification across securities, sectors, asset classes and countries must be maintained.
- The portfolio will accept risks in a prudent manner and investment risk will be minimised for the expected level of return.
- The capital of the portfolio will be preserved on a quarterly basis by adjusting for changes in the Statistics New Zealand All Groups CPI.
- An investment fluctuation reserve must be maintained to finance budgeted distributions from the fund.
- Liquidity must be considered and maintained at an appropriate level.
- The investment structure must be able to accommodate changes in the fund's requirements and the investment environment.
- All aspects of the investment process and functions will be reviewed regularly. In particular:
- The performance of investment managers will be monitored against benchmarks at least monthly, and against the performance of other investment managers at least quarterly.
- Investment managers will be monitored on an ongoing basis with respect to their organisational structure, investment processes and personnel.
- Investment policies and objectives, asset allocation strategy and overall investment management structure will be reviewed at least once every three years.
2. That the Capital Endowment Fund be set up generally in accordance with the recommendations of the Director of Finance and Frank Russell Company with equities of approximately 30 per cent subject to:
(a) A target of up to 10 per cent of the funds being invested in South Island owned or based companies consistent with prudent investment practice, the form and procedure for the investment being the subject of a report from the Director of Finance.
(b) A modest income fluctuation reserve of approximately $3.5M being established from the initial capital.
Council, 12 July 2001
1. That the interest from the Capital Endowment Fund be allocated as follows for the next three years:
Economic Development 60 per cent
Civic and Community Projects 40 per cent
2. That $100,000 from the Economic Development Funding be allocated to the Canterbury Development Corporation for economic development initiatives for three years.
3. That the balance of the Economic Development funding be allocated to the Canterbury Economic Development Fund.
5. That the earlier Council decision to pay 50 per cent of all future unbudgeted special dividends into the Capital Endowment Fund be rescinded.
Amended Council, 18 March 2004
(a) That the 70/30 ratio continue for 2004/05, 2005/06 and 2006/07 and be reviewed at that time.
Council, 30 June 2004
(g) That the Council confirm[s] the intent of the decision reached by the Metropolitan Funding Subcommittee at its meeting on 17 August 2005 to use the civic and community portion of the interest to fund community facilities, and that the staff be asked to report back on the mechanism to achieve this.
Council, 27 June 2004
1. That earnings from the capital endowment fund be split 30 per cent civic and community and 70 per cent economic development.
2. With regard to the economic development portion (estimate $2.1 million) the funds be allocated:
(a) $500,000 to CCT for special projects
(b) $500,000 to CDC for special projects
(c) $900,000 for iconic events, Buskers, PGA Golf, Cup and Show Week, Ellerslie Flower Show
(d) $200,000 for contribution to one-off events (exhibitions, concerts and sporting events)
3. That the minimum community grant for projects from the civic and community portion be set at $50,000.
4. That funding allocation be reviewed in three years or if the interest earned from the fund changes significantly (increase or decrease) within the three years.
Council, 16-18 February 2009