Establishing an Investment Committee Will Have to Wait
Establishing an Investment Committee to review and oversee the City’s investments is going to have to wait until Council’s next meeting, as the new measure failed to glean unanimous support.
The proposed bylaw, which would establish the committee, was opposed by Councillor Brian Swanson.
“This is the last hurdle to be cleared in the creation of the Investment Committee and I’m opposed to that. It might have value but this is a committee to pursue riskier investments,” Coun Swanson claimed.
He opposed the idea, calling the reserve funds “an investment portfolio.”
“This is taxpayer money, not really our investment portfolio,” Councillor Swanson said.
The hiring of a money manager for half or one percent could potentially cost the City $300,000 to $600,000 annually he said, meaning a higher rate of return was necessary to make up the difference.
“We need annual allocations from that money to sustain our capital programs,” he said, adding “the risks are much higher than what we are doing now and that is investing in blue chip bonds…we don’t hear about the downside and it seems the only way we will learn about that is the hard way.”
Councillor Don Mitchell said he felt Councillor Swanson was misleading people about what was occurring, as decisions on investment strategies lay with Council.
“The premise is the higher risk is stock market funds…I don’t think it’s the case we will be abandoning major reliance on equities,” Coun Mitchell said.
Councillor Chris Warren saw the committee as not secretive but as a means of accountability.
“I see it as another level of accountability to our investment policy,” Coun Warren said, adding “the intent of the committee is to maximize earnings and minimize risk.”
“Comparing historical averages made on bonds and other investment portfolios, there is a substantial gap there,” he stated.
The Investment Committee Bylaw passed two readings but failed to receive unanimous support on the third reading, with Councillors Dawn Luhning and Swanson opposed.
In order for any bylaw to be introduced and pass all three readings in the same council meeting, the vote must be unanimous.