Mayor Duncan Gair said Council had invested $35 million in Australian financial institutions such as banks and building societies and $29 million on collateralised debt obligations through its former

As at May 31, 2009, Council’s total investments were valued at $53.8 million. Most of the potential losses are in CDO investments, now with a face value of $5.3 million.

In a Mayoral Minute, Cr Gair said the investment recovery strategy should include recommendations for future investment procedures.

“We can sit on our hands and do nothing, or we can take a proactive position and as a Council develop a strategy, or strategies, to regain our financial position.

“This will not be a short term fix and will require a commitment of this Council and future councils to maintain a course which will see a regaining of Council’s lost financial position.”

Cr Gair acknowledged that Council had every chance of losing substantial amounts in its CDO portfolio.

“[The investment recovery strategy] will at least give the public confidence that Council has taken the level of losses seriously,” he said.

“We don’t know how much financial losses will be. We haven’t realised it yet and hopefully we won’t.”

Council unanimously supported the move.

Deputy Mayor Ken Halstead said the investment recovery strategy would be conducted by the whole-of-council financial committee, which would have the power to co-opt expertise from the community.

Finance committee chairman Juliet Arkwright said the strategy would allow Council to consider options for sound, prudent and long-term investments.

“There will be some losses and we hope they won’t be as drastic as has been put about,” she said.