City administration intends to draw down $6,070,895 next year from the city’s investment portfolios to help fund capital projects that focus on areas such as roads and green spaces.
During its Dec. 11 budget meeting, council unanimously agreed to have administration drawdown from the long-term portfolio $1,170,853 from the capital expenditure fund equity, $3,426,692 from the land development fund, $449 from the Snowbirds’ scholarship fund and $96,900 from the perpetual care fund for cemetery maintenance.
In particular, $3 million from the land development fund will go toward partially funding the $66.7 million Crescent View Lift Station project.
The total drawdown from the long-term portfolio is $4,694,894.
Furthermore, from the moderate-term portfolio, city hall will withdraw $125,000 from the housing reserve, $165,216 from the police accumulated surplus, $653,453 from the city accumulated surplus, $679,890 from the land development funds and $11,095 from other funds held in trust.
The total drawdown from the moderate-term portfolio is $1,634,654.
City administration also plans to reinvest into the moderate-term portfolio $13,449 for the supplemental pension reserve and $245,204 for the contaminated site reserve.
Adding the long-term and moderate-term drawdowns together and subtracting the reinvested money equals $6,070,895.
City hall will direct $1,737,435 of earnings to the general capital budget to support capital projects in transportation and parks and recreation, a budget report said.
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 added.
As of Sept. 30, RBC Dominion Securities managed $95,576,492 in municipal investments, including $71,009,836 in the long-term portfolio and $24,566,656 in the moderate-term portfolio.
The expected return on the long-term portfolio should be six per cent, but year-to-date, it has been 2.73 per cent. Meanwhile, the expected return on the moderate-term portfolio should be 4.25 per cent, but year-to-date, it’s been 2.4 per cent.
Looking at how much money council has drawn down from investments between 2020 and 2023 — $21,865,334 in total — shows how wise it was for the City of Moose Jaw to invest this money and have an investment committee manage it, said Coun. Heather Eby.
Coun. Crystal Froese agreed, saying the $6-million drawdown was “a reasonable amount.”
