Investment Committee Re-debated
with the return of Councillor Brian Swanson from vacation. The draft bylaw to establish an investment committee was up for a re-vote and discussion.
Coun Swanson wasted little time in speaking against Executive Committee’s approving the establishment of an investment committee.
“This is to facilitate a wider range of investment of reserve funds in equities or the stock market that I am not in favour of doing,” Coun Swanson said.
The City’s reserves generate income he said was needed for capital programs on an annual basis.
Coun Swanson was opposed to the risk, fearing losses.
“Higher risk does not always mean higher returns,” he said, adding “losses are made bigger but gains are reduced when every year you have to take some money out….Losses are compounded.”
“You shouldn’t invest money in the stock market you are not prepared to lose…the blue chip bond market has paid well over the years.”
At the present time, the City’s investment in bonds yield 2.8 percent, the lowest its been in a significant amount of time, Brian Acker, the City of Moose Jaw's Finance Director said, later in Executive Committee.
Coun Swanson felt the City should invest in itself.
“I suggest a better option; instead of investing in the stock market to invest in ourselves…it increases the return to the City of Moose Jaw by lending money to ourselves. It’s the most secure.”
“I don’t believe we should be engaging the services of an outside investment manager,” Coun Swanson stated.
Councillor Dawn Luhning said she had many of the same concerns as Coun Swanson.
“I’m not opposed to more oversight at the committee. I’m not in agreement with hiring a money manager,” Coun Luhning said, with the committee “Council will have a better understanding of where the money is going.”
Councillor Scott McMann said he favoured the investment committee, plus the potential of diversifying the City’s investment portfolio.
“We have to have a long term focus on it. The long term potential is there. How fast we want to get there is up to us as a council,” Coun McMann stated.
“We need to get some money management to help us with this…it’s a great idea.”
Finance Director, Brian Acker, said one of the first jobs of the new committee would be to undertake a review of the City’s investment policy. With any changes to policy coming back to Council for approval.
The Investment Committee’s meetings would “be a public meeting and provide input,” Acker stated.
The draft bylaw to establish the committee was approved in a 5-2 vote with Coun Swanson and Luhning opposed.
See Related: Executive Committee to Set up Investment Committee