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Published: 2002-08-16 00:00:00

Environment Waikato has ended its financial year $165,000 under spent in its operating budget.

Poor performance of the Investment Fund with losses of $4.1 million, plus a draw down on reserves to fund budgeted expenditure resulted in a net deficit of $8.69 million. Savings were made across most activities, but there were small deficits in areas such as flood control, and a new rating system which was developed through Project Watershed.

The Policy area also had increased costs due to extra expense in addressing water quality issues at Lake Taupo. Spending on navigation safety issues as the Council took over these new responsibilities was also higher than anticipated.

Corporate Services Committee chair Barry O’Connor said although the Council lost $4.1m on the value of its Investment Fund, it had minimised its exposure to even greater potential losses by having a diversified portfolio.

Overall the Fund had performed better than the benchmarks for similarly diversified funds. Changes had been made away from fund managers Lazards and State Street to further diversify the portfolio.

“The Council needs to be mindful of currency exchange rate levels and likely reserve bank interest rate movements when making structural changes to the fund. In spite of recent losses on overseas investments, the average annual return from the Fund is 8.1 percent. This has allowed the General rate to be subsidised by $33.4 million over the last eight years.”