Including Liability Management and Investment Policies.

Policy purpose

The purpose of the Treasury Risk Management Policy is to outline approved policies and procedures in respect of all treasury activity to be undertaken by Christchurch City Council. The formalisation of such policies and procedures will enable treasury risks within the Council to be prudently managed.

As circumstances change, the policies and procedures outlined in this policy will be modified to ensure that treasury risks within the Council continue to be well managed. In addition, regular reviews will be conducted to test the existing policy against the following criteria:

  • Industry best practices for a council the size and type of the Council.
  • The risk-bearing ability and tolerance levels of the underlying revenue and cost drivers.
  • The effectiveness and efficiency of the policy and treasury management function to recognise, measure, control, manage and report on the Council’s financial exposure to market interest rate risks, funding risk, liquidity, investment risks, counterparty credit risks and other associated risks.
  • The operations of a pro-active treasury function in an environment of control and compliance.
  • The robustness of the policy’s risk control limits and risk spreading mechanisms against normal and abnormal interest rate market movements and conditions.
  • Assistance to the Council in achieving strategic objectives.

Policy setting and management

The Council approves policy parameters in relation to its treasury activities. The Council’s Chief Executive has overall financial management responsibility for the Council’s borrowing and investments, with operational authority delegated to staff as recorded in the Council’s Delegations Register. 

The Council exercises ongoing governance over its subsidiary companies (CCO/CCTO), through the process of approving the constitutions, statements of (corporate) intent, and the appointment of directors and trustees of these companies. 

Scope and objectives

Scope:

  • This document identifies the policy of the Council in respect of treasury management activities.
  • The policy has not been prepared to cover other aspects of the Council’s operations, particularly transactional banking management, systems of internal control and financial management. Other policies and procedures of the Council cover these matters.

Treasury management objective:

  • The objective of this policy is to control and manage borrowing costs, investment returns, liquidity requirements and risks associated with treasury management activities.