DISTRICT, BRACEBRIDGE, HUNTSVILLE JOIN ‘FIRST OF KIND’ INVESTMENT SCHEME
MUSKOKA — Muskoka government used to gambling taxpayers’ money are putting your money where their mouths are again.
Bracebridge, Huntsville and the District of Muskoka are half of six Ontario municipalities in a new scheme to reap risky returns on an array of financial projects.
A press release from the district — datelined “TORONTO” — boasts they are “among the first to head to Bay Street to exercise new investment powers.”
They join Kenora, Innisfil and Whitby in investing under the Prudent Investor Standard with ONE Investment, says the release.
And it claims to be “the first of its kind in Ontario.”
Apparently bylaws approving investment under the new standard have just come into effect, claims the release, “helping municipalities to diversify their investments and improve returns.”
It says under Prudent Investor, municipal governments, like pension plans and trusts, municipalities can invest in any product they like.
Previously, it says, municipalities could only invest in a list approved by the province and securities were limited to Canadian firms, which make up only 3 per cent of worldwide securities.
ONE Investment is a not-for-profit investment service for municipalities and the public sector. It has been serving municipalities for more than 25 years and currently manages about $2 billion in municipal investments.
“Every dollar a municipality earns through investing is one less dollar it has to collect from taxpayers. That’s more important now than ever,” said Ken Nix, chair of ONE Investment and Whitby’s commissioner of corporate services/treasurer.
Under provincial rules for Prudent Investor, an independent investment board must manage investments on behalf of the municipality.
ONE says it has created a joint investment board with the six founding municipalities. It is the first of its kind in Ontario, says the release.
“Municipalities are entrusted with taxpayer money. Our council was interested in improving our investment returns,” said Julia McKenzie, manager of finance/treasurer for Huntsville.
“As a smaller municipality, trust was critical to us. Pursuing Prudent Investor with ONE Investment, and having our investments managed by industry experts on the joint investment board, provides us with confidence.”
“Municipalities don’t have to navigate markets alone,” said Judy Dezell, ONE Investment co-president/CEO.
“The investment advisory team helps with investment planning and policies, while the joint investment board provides hands-on expert management.”
The ONE Joint Investment Board is made up of two municipal treasurers and six professionals with a mix of experience in the municipal sector and the investment industry, including global markets and pensions.
“Having professional advice and flexibility are particularly important right now as markets fluctuate in response to COVID-19’s economic impact,” added Donna Herridge, ONE Investment co-president/CEO and executive Director of the Municipal Finance Officers’ Association (MFOA).
“Municipalities are investing for the long-term. With professional support, they can manage current market conditions to meet future goals.”
“As a joint investment board, we provide every participating municipality with its own tailor-made investment plan,” said Bill Hughes, chair of ONE’s joint investment board.
“It’s our job to make wise and prudent investment decisions to meet each municipality’s goals.”
About ONE:
ONE Investment claims it combines municipal investments to achieve economies of scale for lower fees and better returns. It is a not-for-profit formed by the municipal sector, including the Local Authority Services (LAS) and CHUMS. LAS is the business services arm of the Association of Municipalities of Ontario (AMO). CHUMS is a subsidiary of MFOA.
ONE claims it has a proven track record of providing competitive returns through products that comply with provincial regulations. ONE Investment continues to operate funds under the legal list as well.
