The Whakatāne District Council has agreed to develop an investment framework to safeguard and grow the $52 million of harbour-related assets it holds on the community's behalf. A report setting out an investment strategy was received by the Council last week, with Council elected members endorsing a three-phase approach to investigating and implementing future investment options.

The Council owns 131 properties, which were vested by the former Whakatāne Harbour Board when it ceased operations in 1976. Much of that portfolio is made up of property within the Whakatāne CBD, which the Council leases to building owners. Currently, the Harbour Fund holds properties worth an estimated $35.1 million, and has cash reserves of $17.2 million. Cash reserves are invested, with the interest income generated returned to the fund.

While the fund's primary purpose is to maintain and develop the harbour or harbour assets, funding can be provided for non-port activities, up to the level of the operating surplus in any one year, or with the approval of the Minister of Local Government.

Mayor Tony Bonne says the proposed strategy results from a desire to ensure that harbour assets are prudently managed, that sound investment decisions are made, and that assets and reserves should enable and promote economic, social and cultural goals.

"The Council has a responsibility to ensure that Harbour fund assets are securely invested for the benefit of future generations," he says. "That means maintaining the capital value of assets, minimising risk and ensuring that income streams are realised. The development and implementation of an investment strategy will help us to achieve that."

The framework will involve three phases:

• Development of an investment policy and objectives and appointment of a fund manager;
• Progression of an asset diversification and divestment strategy (essentially to ensure that all of the fund’s financial 'eggs' are not in one basket); and
• Identification of an investment structure which will ensure assets and investments are secure and managed for the benefit of future generations.

The first and second phases are expected to be completed by early-2019 and the investment structure phase will be completed in conjunction with the Council’s 2019/20 Annual Plan, allowing an opportunity for community input into the process.

"Staff will work with the Council's Commercial Advisory Board to consider an asset diversification and divestment policy and report back to the Council on possible ways forward by December this year," Mayor Bonne says. "We’ll be looking to both the business sector and the wider community for feedback on that policy."