City administration intends to draw down $2,035,716 next year from the city’s investment portfolios to help fund capital projects that focus on areas such as roads and green spaces.
From the long-term portfolio, administration plans to withdraw $1,158,187 from the capital expenditure fund equity, $658,465 from the land development fund, $495 from the Snowbirds’ scholarship fund and $113,000 from the perpetual care fund for cemetery maintenance.
From the moderate-term portfolio, administration will withdraw $87,637 from the land development fund and $17,932 from other funds held in trust.
City hall will direct $1.904 million of earnings to the general capital budget to support capital projects in transportation and parks and recreation, a budget report explained.
If any shortfalls arise from next year’s drawdowns, city administration will adjust the portfolios by reducing future years’ drawdown requests to maintain the original principal investment over the long term, the report continued. To preserve the portfolios’ equity component, all drawdowns in 2023 will come from maturing GICs.
As of Oct. 31, RBC Dominion Securities managed $93,929,661 in municipal investments, including $74,347,567 in long-term portfolios and $21,979,940 in moderate-term portfolios.
Meanwhile, the city is holding $2,715,995 of long-term portfolio money in its operating account because the account has a rate of return at 4.35 per cent, which brings the total amount invested to $96,645,656, the report said.
In comparison, year-to-date, the long-term portfolio has returned minus-10.53 per cent and the moderate-term portfolio has returned minus-5.84 per cent.
During its Dec. 5 budget meeting, council unanimously voted to approve the drawdown of $2,035,716 for next year.
“The drawdown in 2022 is significantly less than it was in 2021 — over $600,000 (less) if my calculator worked correctly,” said Coun. Heather Eby. “So that just says to me that we have less money to spend, so we need to spend less money. And we need to be aware that there is a finite amount of money coming off those reserves, even though it’s great to have it.
“Hopefully, we’ll see those markets rebound in the next few years and get the money back up there.”
Finance director Brian Acker showed two slides with information about the money the municipality had invested in 27 categories. The total amount at the end of 2021 was $126,726,082, versus $116,371,445 at the end of 2020.
For example, the Moose Jaw Police Service has an accumulated surplus account where its excess revenues go. At the end of 2021, there was $170,275 versus $380,787 at the end of 2020.
Other notable accounts included (2021 vs. 2020):
- Landfill closure and post-closure: $5.6 million / $5.2 million
- Snow removal: $906,943 / $906,943
- Traffic safety reserve: $2.2 million / $1.5 million
- Parking reserve: $2.07 million / $1.87 million
The money for the parking reserve has come from the sale of city parking lots during the last 20 years, Acker said.
There is also an Employees Disability and Death Benefit Fund, which had $1.3 million at the end of 2021 versus $1.2 million at the end of 2020.
The city uses this to support firefighters either injured or killed on the job, said Acker. The municipality pays 70 per cent of an employee’s benefits over 20 years for an injury or to the family should a firefighter die on duty.
Most money is invested in medium- or long-term funds, with the long-term money held “pretty much indefinitely” and medium-term funds invested for five to 10 years before being withdrawn, he continued.
City administration is being “quite conservative” next year with how much investment money it is withdrawing, Acker added.
The next budget meeting is Dec. 7, while the next regular council meeting is Monday, Dec. 12.
