Three things to do before next year’s municipal election
With Ontario’s municipal elections just one year away, it’s not too early to start planning for a new term of Council.
Your goal over the next year should be to get a good picture of current municipal finances and investments, as well as a strong understanding of future needs. This will help you provide Council with good, strategic advice.
Investment income is one of the few revenue tools available to municipal governments beyond taxes and user fees. Leveraged strategically, investment income can help municipalities pay for long-term infrastructure needs with less reliance on taxpayers.
ONE Investment Co-Presidents, Judy Dezell and Donna Herridge, have both experienced many Council changeovers. They shared their top three steps to prepare for the municipal election:
- Take stock of Capital Plans and Asset Management Plans: Asset Management Plans are a useful tool to help Treasurers plan how much funding is needed and when – helping to shape capital budgets as well as investment goals and objectives. This will prepare you to help a new Council understand what is needed to fund capital projects and to keep infrastructure in good repair. This is key to helping Councillors understand the long-term pressures on the municipality and focus their attention not just on immediate needs but also those of the next 10 years or more. Keep in mind that while plans should be based on good information, they don’t need to be perfect for the municipality to start planning how to pay for it. Strive for progress over perfection.
- Check your cash flow plan and projections: Treasurers generally have a good idea of their cash flow. Laying out a plan in writing will help you identify what a new Council needs to understand about the municipality’s financial landscape – including both revenues and expenditures. A cash flow plan also helps you develop a realistic picture of what funds are available for investments and when. This will help you talk about municipal investments with confidence.
- Consider new Council orientation: Aim to build a more strategic understanding of municipal finance including revenue sources. Make sure to include the role that investment income can play in financing long-term capital plans, and the legislative framework for municipal investing. When investing over a longer time horizon, municipalities have a variety of ways to take advantage of equity market opportunities – potentially reducing reliance on property taxes or grants. In fact, it’s important for Councils to know that for very long-term money, a savings account may actually deliver less than inflation and result in a loss of buying power.
How to do it all?
The good news is that Treasurers do not have to do this work alone. With COVID-19, many finance teams (including teams of one) are exhausted. Tapping into the investment advisory team at ONE Investment builds capacity and provides investment expertise tailored to municipal government.
Advisors can help with the entire process, translating an asset management plan into a financial strategy and setting up investments. The team includes a municipal finance expert and a CFA who is on salary, not commission, to provide investment advice. They can also provide guidance on the appropriate investment policy and portfolio structure. Learn more about the team.