Finance 101 Thompson-Nicola Regional District tnrd.ca Investing City of Kamloops kamloops.ca.

Finance 101

Thompson-Nicola Regional Districttnrd.ca

Investing

City of Kamloops

kamloops.ca

Thompson-Nicola Regional Districttnrd.ca

http://www.youtube.com/watch?v=vLNOpoQztFo

City of Kamloopskamloops.ca

Thompson-Nicola Regional Districttnrd.ca

LEGISLATIVE REQUIREMENTS

Municipalities: Community CharterPart 6 – Financial Management

Sections 183 – 187

Regional Districts: Local Government ActPart 24 – Regional Districts

Division 5 – Financial OperationsSection 815 – Financial Plan

Division 3 – Expenditures, Liabilities and Investments

City of Kamloopskamloops.ca

Investment of Municipal FundsCC section 183:

“Money held by a municipality that is not immediately required may only be invested or reinvested in one or more of the following:

a) securities of the Municipal Finance Authority (MFA);b) pooled investment funds under section 16 of the

Municipal Finance Authority Act;c) securities of Canada or of a province;d) securities guaranteed for principal and interest by

Canada or by a province;e) securities of a municipality, regional district or greater

board;

Investment of Municipal Funds

f) investments guaranteed by a chartered bank;g) deposits in a savings institution, or non-equity or

membership shares of a credit union;h) other investments specifically authorized under this

or another Act.

CC section 183 (cont’d):

Investment of Municipal Funds

What these all have in common is...

LOW RISK

City of Kamloops Investment Policy

• Investment policy conforms to CC section 183

• Primary Investment Objectives are the preservation of capital and high liquidity

• Secondary objective will be to maximize its ROI, while adhering to specific limits, for e.g., restricting the investment % by institution.

• Investments will be restricted to high-quality money market and fixed income instruments. Low risk.

City of Kamloops Investment Portfolio

• Maintains investment portfolios for its short-term investments (current operating requirements), medium-term and long-term investments.

• Cash flows are projected based on revenues, operating and capital expenditures to determine duration of investment period

Property Accepted in Trust

1) All money that is held by a municipality and is subject to a trust must be invested in accordance with section 183 until it is required for the purposes of the trust.

2) If, in the opinion of a council, the terms or trusts imposed by a donor, settlor, transferor or testator are no longer in the best interests of the municipality, the council may apply to the Supreme Court for an order under subsection (3).

CC section 184:

Ownership of Corporations

1) A municipality may only

a) incorporate a corporation other than a society, or

b) acquire shares in a corporation

with the approval of the inspector or as authorized by regulation.

2) An incorporation or acquisition under subsection (1) applies as an exception to the restriction under section 183 [investment of municipal funds]

CC section 185:

Investment Opportunities

1) Locally – Banks, GIC’s, etc.

2) MFA – GIC’s

– Index Funds

Its important to match the investment vehicle chosen against the needs of the local government

Consider

Short Term

Longer Term

-> cash management

-> reserves / LT savings

Thompson-Nicola Regional Districttnrd.ca

City of Kamloopskamloops.ca

tnrd.caThompson-Nicola Regional District

Questions?

City of Kamloops

kamloops.ca