The coronavirus pandemic has taken a small bite out of the City of Moose Jaw’s financial investments, but how much money has been lost depends upon the calculations used.
The municipality has invested $100 million in the stock market, including $27.56 million in a moderate-term portfolio and $62.47 million in a long-term portfolio, according to a report from manager RBC Dominion Securities. As of March 25:
- the moderate portfolio had declined by $1.5 million, or 5.56 per cent;
- the long-term portfolio had declined $6.4 million, or 10.28 per cent;
- the total decline was $7.9 million.
Furthermore, an additional $2.7 million had been withdrawn from the moderate-term pool to fund land development in the Southeast Industrial Park and $372,700 had been withdrawn from the same portfolio to fund recreation enhancements in West Park.
This means, based on RBC’s numbers, the municipality’s investments have declined by $10.97 million through purposeful reductions and market fluctuations.
However, during the April 13 regular council meeting, different figures on how much money has been lost during the pandemic were presented during finance director Brian Acker’s presentation and in his report.
Half of the overall portfolio is held in guaranteed investment certificates (GICs). Those yields are higher than high-quality government and corporate bonds, and the municipality’s operating account, Acker said.
By holding GICs — which generate $1.2 million annually — the municipality has avoided some market volatility over holding bonds. Moose Jaw has also cushioned the decline of its portfolio value by underweighting in equities and overweighting in GICs.
The municipality had withdrawn $1.74 million from its investments before the downturn to meet budget requirements, Acker’s report said, although what those requirements were was not mentioned.
As of March 30, according to Acker’s report:
- the value of the total portfolio was $93.1 million;
- the moderate-term portfolio had declined by $1.3 million, or 4.85 per cent;
- the long-term portfolio had declined by $5.6 million, or 9.02 per cent;
- an overall portfolio decline by $6.9 million.
However, during his presentation, Acker provided updated numbers as of April 9. Those numbers showed:
- the value of the total portfolio was $95.2 million;
- the moderate-term portfolio had declined by $964,500, or 3.5 per cent;
- the long-term portfolio had declined by $4.1 million, or 6.61 per cent;
- an overall portfolio decline of $5.09 million.
“There have been some losses, but because of care and prudence of the (investment) committee and council, a lot of that has been mitigated,” he added.
In reading the report, Coun. Brian Swanson thought the portfolio had lost $6.2 million based on the cited percentage losses, while a report from December indicated $7.4 million might have been lost. Acker replied that the true decline was about $3.5 million, based on the withdrawal of $1.7 million in budget requirements and stock market losses.
“So are we down $6.2 million?” Swanson asked again.
“You can interpret that, but based on the principal (amount of $100 million) we are down about $3.5 million,” replied Acker.
Council later voted 6-1 to receive and file the report, Swanson was opposed.
The next regular council meeting is Monday, April 27.
