Council loses another $2.79M

Gosford Council has reported another investment loss totalling $2.79 million from two of its structured securities.

Council's director of corporate services Mr Nic Pasternatsky has told the council that Parkes Junior reported a principal loss of $1.29 million and Torquay reported a principal loss $1.5 million.

Mr Pasternatsky maintained that the losses reported would not affect the service levels or works completed within the Gosford Local Government Area.

He said that the council could not have predicted the loss on the investments.

"How can anyone have predicted the Global Financial Crisis?" Mr Pasternatsky said.

"Council is no different from any other council in Australia who did not see this coming.

"Gosford followed guidelines in accordance with the Local Government Act, as per the Minister's Order, the Local Government Regulation and council's investment policy, when making its investment decisions.

"No council did anything wrong, so to speak, when they followed the appropriate guidelines and used the advice they were given at the time."

Mr Pasternatsky claimed: "Gosford is not in any detrimental position and provisions have been built into council's current budget totalling $10 million."

He said council had suffered a total net loss of $8 million on investments and said it was too hard to predict council's total projected loss on investments by the end of this financial year.

"To project this would be like gazing into a crystal ball," Mr Pasternatsky said.

"There is just no guarantee.

Mr Pasternatsky said Gosford council was in a financially viable position, claiming an investment portfolio of more than $118 million at the end of March and a cash flow return of around $33 million.

He said the net return on investments for council's investment portfolio since 2002 was $52 million, representing an average return of 5.93 per cent.

"If we didn't have this net return then we would be in trouble," Mr Pasternatsky said.

"But we are still in front."

Clare Graham, 6 May 2010 Media statement, 27 Apr 2010 Nic Pasternatsky, Gosford Council Council agenda COR.37, 27 Apr 2010