The City of Moose Jaw’s investment portfolios gained more than $1.2 million during this year’s second quarter, a decrease of nearly $3 million from the previous quarter.
During city council’s Aug. 14 regular meeting, the investment committee presented a report dealing with the second-quarter results. Council then voted unanimously to receive and file the document.
The report showed there was $71,942,340.97 in the long-term portfolio and $24,751,939.23 in the moderate-term portfolio as of June 30, for a total of $96,694,280.20.
In comparison, as of March 31, those numbers were $74,527,829.86, $25,507,685.20 and $100,035,515.06, respectively.
Moderate-term portfolio
The report showed that from April 1 to June 30, the moderate-term portfolio increased by 0.86 per cent and gained $214,672.03. While this increased the portfolio to $24,751,939.23, because of a planned withdrawal of $670,418 during the quarter, the portfolio’s total value was lower than the Q1 value.
Long-term portfolio
The report showed that from April 1 to June 30, the long-term portfolio increased by 1.34 per cent and gained $986,882.11. While this increased the portfolio to $71,942,340.97, because of a planned withdrawal of $3,572,371 during the quarter, the portfolio’s total value was lower than the Q1 value.
Combined, both portfolios gained $1,201,554.11 during the second quarter, equal to roughly 3.7 percentage points of municipal taxation; one percentage point this year is $330,701.
In comparison, both portfolios gained $3,783,220.57 in Q1; the difference from the first to second quarter is $2,581,666.46.
Since inception in July 2019, both portfolios have produced a total return of $19,228,481.14, equal to a municipal tax increase of roughly 58.2 per cent. City hall has used that money to fund annual programs and services.
Meanwhile, the average annual return has been about $4.5 million, equal to a municipal tax increase of roughly 13.5 per cent.
Comments on portfolios
The first and second quarters of this year saw positive economic data and returns despite continued increases in interest rates and the continued threat of a recession, said Coun. Dawn Luhning, a member of the investment committee.
She explained that the municipality’s investment policy is based on a long-term timeline, which allows the city to weather short-term downturns in the market, as happened last year.
Moreover, the investment committee has structured the investments so there are liquid assets — such as GICs — that mature in the coming years, ensuring the committee does not need to sell equity or bond investments in those down years to fund planned cash-flow needs.
Portfolio manager RBC Dominion Securities will re-balance both portfolios when the market is stronger to a neutral-asset mix by adding bonds and GIC investments when appropriate, Luhning said.
“That … is why we hired the financial group we did, is because they are working with managers with these funds to determine when is a good time to buy and sell and manage those assets accordingly for city,” she added.
It’s good for residents to know how much the portfolios have produced since inception, their annual returns, and the equivalent municipal tax increases because many people think the city should spend that money in one shot, said Coun. Heather Eby.
However, what they fail to recognize is the value those portfolios bring to the municipality annually, which ensures council doesn’t have to increase taxes by higher amounts, she continued.
“That money will work for us for eternity … or as long as the City of Moose Jaw exists,” Eby added with a chuckle.
The next regular council meeting is Monday, Aug. 28.
In response to some providers blocking access to Canadian news on their platforms, our website, MooseJawToday.com will continue to be your source for hyper-local Moose Jaw news. Bookmark MooseJawToday.com and sign up for our free online newsletter to read the latest local developments.
