It appears the old adage, that if at first you don’t succeed, try, try again, could be the new motto for Coun. Brian Swanson.
After Swanson failed to have three amendments approved to the municipality’s investment policy during a previous council meeting, he had council re-vote on them during its June 10 regular meeting.
Although he provided some explanation for why he wanted the amendments made, the end result was still the same: council voted 6-1 against all three amendments.
The amendments were:
- Under the fixed income pool, the minimum quality standard for individual money market instruments be changed from BBB to single A for individual bonds
- Under the moderate term pool, the asset class equity be changed to a maximum of 30 per cent from 50 per cent
- Under the long-term pool, the asset class equity be changed to a maximum of 30 per cent from 90 per cent
A report presented during a previous executive committee meeting showed the City of Moose Jaw has $100 million in reserves targeted for medium- and long-term investments. About $70 million would be invested in a long-term pool and $30 million would be invested in a moderate term pool.
About $2.75 million is generated annually in interest from the $100 million.
Council discussion
Swanson didn’t support BBB bonds since he thought there was a significant risk for those individual bonds. He also did not support watering down the bonds by giving them that rating.
He gave no reason for changing the moderate term pool to a maximum of 30 per cent. However, for the long-term pool, Swanson pointed out that that $70 million is taxpayers’ money, while any reserves the municipality has could represent money received from over taxation.
“I have yet to have anyone tell me the city should invest in the stock market,” he said.
Swanson was not in favour of investing 90 per cent of $70 million in the stock market but was OK with investing $30 million.
Investing this money is a benefit, said Coun. Chris Warren. Moose Jaw is the envy of other Canadian municipalities because of the foresight the city’s forefathers had to create these reserves, which help fund infrastructure projects.
In a perfect world, city council would throw all available money at fixing roads and other infrastructure, Warren continued. It would be great to fix 80 kilometres of roads in three years, but then no one would get around.
Don’t sell the farm
Professional experts were asked to help grow this money, said Coun. Heather Eby. Having $100 million is more than she can imagine, so she was glad there were intelligent experts available to help manage it.
“You only get to sell the farm once. It won’t make you a dime once it’s gone,” she added. “I would never be in favour of selling the farm and putting it into streets and roads.”
Anyone who thinks the stock market always generates positive returns has never studied the stock market, said Swanson. He would never suggest spending the entire $100 million on infrastructure in one or two years. But he believes the current investments are too risky, so he would prefer to stick to high-quality bonds that generated guaranteed money every year.
Too much doom and gloom
Coun. Dawn Luhning, one of two councillors on the investment committee, said she didn’t appreciate the investment committee being painted in such an unfair light, or having its efforts questioned.
“The doom and gloom about the decisions we make around the table are getting a little bit tiring for me. I think we are all trying to do what we believe is the best we can do,” she said.
“At one point, I’d like to ask what we are in favour of. But it appears we are not in favour of a lot of things at this table … ,” she added.
When people become a city councillor, they should take ownership of what they say and do, said Mayor Fraser Tolmie. Councillors need to accept the past and look to the future. He appreciated the investment committee’s efforts.
“We need to leave a legacy,” he added, “and the legacy of this council will be that it dealt with infrastructure, solved problems and looked at opportunities for future in this community.”
The next regular council meeting is Monday, June 24.
