A Mayor & Treasurer Talk Prudent Investor

June 26, 2019

The opportunity for better planning, better returns and access to professional investment advice – these  were the main drivers for Innisfil Treasurer Lockie Davis to introduce prudent investor (PI) to his Council.

“The chance to get into different markets and earn more than we can with a savings account is really important,” Davis said.

Innisfil added a 1% capital levy in 2011 to deal with infrastructure needs. Davis believes PI holds further opportunities to build reserves and for better long-term planning.

Davis also sees it as a potential tool now that Bill 108 is locking in Development Charge rates at the time of registration, rather than allowing charges to be indexed. DC funds are earmarked specifically to pay for growth for a specific timeframe, making them a good fit for a more diversified long-term portfolio. This presents an opportunity to reduce the shortfall caused by the indexing changes.

Davis has introduced Council to the possibility of getting in on the ground floor of prudent investing with ONE Investment and its Joint Investment Board.

Innisfil Mayor Lynn Dollin actually thinks many elected officials and members of the public would be shocked at the restrictions on municipal investing under the legal list.

“It has been micromanaged,” said Mayor Dollin. “Most people wouldn’t allow their own savings to be invested with so many restrictions and such little choice.”

For the Mayor, the emphasis is on the word prudent when it comes to the new standard. Although it doesn’t limit specific types of investments, it does require care, skill, diligence and judgement.  

“It is well-managed, diversified and flexible,” she added. “It is important to make the most of what we have. Every little bit we can earn through investments is less that we have to ask from the taxpayer.”

Another important reassurance for Council is the fact that they retain oversight and accountability through their approval of an Investment Policy Statement, Davis noted.

When it comes to ONE Investment, Davis also likes the idea that municipalities can tap into investment advice and the benefits of a professional money manager.

“It’s not a skill set we would normally have on staff,” he said. “Further, ONE Investment is not like a typical investment dealer. They are focused on protecting municipal interests. ONE understands our responsibility to taxpayers and the need for the preservation of capital.”

For 25 years, ONE has provided investment products geared for the municipal community. After seeking an OSC exemption, ONE can now also provide investment services and advice through its customer service team. The team includes an investment manager with extensive Bay Street experience and retired municipal treasurers.

Davis has sought and received Council direction to do further due diligence on prudent investor and joining ONE’s Joint Investment Board as a founding member. He noted that the template staff reports provided by ONE were helpful in educating Council on the background of municipal investing – where it has been, and where it is going.

“Innisfil prides itself on showing leadership and being innovative,” Davis noted. “Council wants us to continue looking at the opportunity to see if it is a fit for us.”


Prudent Investor
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