Bracebridge, Huntsville and the District of Muskoka have joined Kenora, Innisfil and Whitby as founding municipalities of a new Joint Investment Board (JIB), which will manage investments for the six member municipalities under the Prudent Investor Standard.
ONE Investment formed the JIB and announced it as the first of its kind in Ontario when launching the board on May 19. In the past, municipalities were limited to investing only in a provincially approved “legal list” of investments. The investments included some bonds, money market funds and securities limited to Canadian firms, which make up only 3 per cent of worldwide securities, according to ONE Investment. A security is a tradable financial asset with monetary value, such as a stock or bond. The Prudent Investor Standard, first introduced in March 2018, allows municipal governments to invest in any security that suits their situation provided they “exercise the care, skill, diligence and judgment that a prudent investor would exercise.”
“Building a more diverse portfolio is much better for managing risk and improving returns. It means you also have more flexibility to respond to changing financial markets, which has never been more relevant,” said Judy Dezell, co-president and CEO of ONE Investment. “It was important to create a way for any municipality to take part and benefit from these powers.”
The seven-member JIB is made up of one treasurer from a founding municipality and six professionals with a range of experience in the municipal sector and the investment industry. The board met for its inaugural meeting on launch day.
“All municipalities deserve the opportunity to generate as much return as we can on our existing tax dollars,” said Bracebridge Mayor Graydon Smith. “We believe ONE is the right fit for us based on our experience with the program over the years. They understand the municipal sector. We believe in their strategy and leadership in the municipal community.”
ONE Investment has worked with municipalities for 25 years and is now a not-for-profit formed by the municipal sector, including Local Authority Services (LAS) and CHUMS. LAS is the business services arm of the Association of Municipalities of Ontario (AMO) and CHUMS is a subsidiary of Municipal Finance Officers’ Association (MFOA).
“Unlike most financial institutions, ONE is a not-for-profit. This is all about municipal governments coming together to do more for their communities,” said AMO President Jamie McGarvey. “As municipalities try to do more with less, a well-planned investment strategy can help save for long-term projects.”
For more information about the board and its members, visit the ONE Investment website.