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Nelson City Council: Hedgebook single source of treasury truth

Nelson City Council primarily uses Hedgebook for interest rate swaps on infrastructure projects with the entire process - entering, maintaining, and checking the data - run by the team, in using Hedgebook.

Nelson City Council explores Hedgebook

When Prabath Jayawardana started as Manager, Finance, with Nelson City Council he was delighted to find Hedgebook was already in play. He had previously worked with the cloud-based solution at Gisborne District Council and then Westland District Council and was keen to explore the full extent of what it could do.

CHALLENGE

Nelson City Council runs a large number of infrastructure projects with a budget in the tens of millions. For its finance team this means tightly managing interest rate swaps to stay within budget and treasury policy limits.

SOLUTION

Hedgebook enables finance teams to securely record and manage swap details.

OUTCOME

The finance team is confidently able to provide treasury management to the Council.

“Having a trusted system where you’re not spending time doing additional checking, particularly when under pressure at year end, makes a world of difference.”
Prabath Jayawardana, Manager Finance, Nelson City Council

Nelson City Council primarily uses Hedgebook to manage interest rate swaps on infrastructure projects. “It is really good not to be maintaining this information on spreadsheets as anyone can change it and that is when errors get in,” explains Prabath.

Nelson City Council has 20 in its finance team. While Prabath takes responsibility for running Hedgebook, others in the team help enter instruments or with filing and document management. They collectively need to stay on top of working within the approved risk control limits of the Council’s Treasury Policy as the team can be held to account for any variance.

One source of truth

“Hedgebook gives us one source of truth for the Treasury function. We have controlled logins plus the ability to create read only access as well,” explains Prabath. “As an administrator I can have Hedgebook tailor access at an individual level, to what someone needs to see and do.

“We have invested in all the right tools at Nelson City Council and it is a wise investment that ultimately saves on time, errors and money. Spreadsheets might be ‘free’ but entering the wrong date in a column, or shifting a decimal point by mistake can be catastrophic.

“Our Debt and Swap portfolio is several hundred million which reflects the level of infrastructure investment we are making to put the Nelson region in a good position. Tightly managing interest rate swaps helps us keep these projects within an affordable budget and ultimately stops additional burden falling on rate payers.”

Nelson City Council has tight reporting windows

While it is undoubtedly an interesting job a lot of the risk management activity falls into tight reporting windows at month and year end. Relying on manual spreadsheets to prepare these reports is not something Prabath ever wants to go back to.

He explains; “At month end we need to accrue interest for the month for management reporting purposes. In Hedgebook, we can do accrual reports at the click of a button. We don’t have to do any calculations, Hedgebook does it for us which really takes the pressure off.

“We enter, maintain, and check the data ourselves – managing it all from start to end in Hedgebook. It is a lot easier than having someone trying to do this for us. Nobody is making assumptions that aren’t correct – we know firsthand what it should look like – and why.”
Prabath Jayawardana, Manager Finance, Nelson City Council

No external assistance needed

“We also run the Cashflow Report which tells you when payments on loans and other financial instruments are due and helps us to manage working capital. At year-end, we use Hedgebook to value Swaps at the click of a button.

“We don’t need any additional external assistance to create the valuations needed for audit. Nothing goes into the system without us knowing it giving us total ownership and accountability with this single source of truth.”

If you found this case study of interest you might also like to see how New Plymouth and Hurunui District Councils also use Hedgebook or check out our eBook : 5 Reasons Why Councils Need Hedgebook