Integrated treasury for Auckland councils

General News | 11/12/2009

Integrated treasury for Auckland councils

The Auckland Transition Agency (ATA) has worked with Auckland’s existing local councils to create an integrated treasury group to coordinate treasury decisions during the transition period with the objectives of reducing treasury related risks for the Auckland Council on 1 November 2010 and achieving efficiency savings.

ATA advisor Andy Coupe, who co leads the finance and treasury work stream, said the integrated treasury group will source funds on behalf of Auckland’s existing local councils prior to the establishment of the new Auckland Council.

It avoids the need for the separate councils to continue with individual strategies to raise funds, such as issuing parcels of debt to investors through banks on the wholesale market or through retail bonds.

Until the formation of the Auckland Council, the group will work jointly to ensure the borrowing needs of the existing councils are met as efficiently as possible. Auckland City Council, which has the strongest credit rating, will be used as the conduit for the region’s borrowing.

Decisions made by the group must fit with individual councils’ long-term plans and treasury management policies.

Andy said that without such an integrated treasury decision-making framework there was a high likelihood that the Auckland Council would have inherited an imbalanced treasury portfolio on 1 November 2010 with a high concentration of maturing debt and interest rate risk. The integrated treasury group will be coordinating treasury decisions to mitigate this risk.