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a)
THAT the correspondence from Mr. Jason Hagan, LAS Program Manager,
Association of Municipalities of Ontario requesting support of resolution
regarding 'Prudent Investor Standard' be received and the following
recommendations be adopted:
i) WHEREAS municipalities are required to invest
their reserves in accordance with the Municipal Act, 2001 and Ontario
Regulation 438/97 (as amended), which specifically outlines allowable
investments;
ii) AND WHEREAS to ensure the sustainability and
sound stewardship of the municipality's investments, the municipality is of
the opinion that changes should be made to the Municipal Act, 2001 and
Ontario Regulation 438/97 (as amended), to allow for the prudent investment
of reserves, if those investments are professionally managed and part of a
broader investment strategy;
iii) AND WHEREAS the Prudent Investor Standard is an
industry accepted best practice in effectively managing a portfolio of
investments, and the Standard applies to investments, not in isolation, but
in the context of the portfolio of investments and as part of an overall
strategy, that should incorporate acceptable risk and return objectives
suitable to the stakeholders;
iv) AND WHEREAS the Province is conferring
"Prudent Investor" status on the City of Toronto to enable greater
diversification in portfolio management;
v) AND WHEREAS the Association of Municipalities of
Ontario (AMO), Local Authority Services (LAS), and the Municipal Finance
Officers Association of Ontario (MFOA), have long requested that the Prudent
Investor Standard apply to all municipal investments that are invested with
The One Investment Program;
vi) AND WHEREAS in 2005, municipalities were granted
the ability to invest in longer-term corporate bonds and Canadian equity
investments via only the One Investment Program, and the One Investment
Program has demonstrated strong investment returns for municipalities within
these 'new' investment sectors;
vii) AND WHEREAS the institutional portfolio
managers utilized by the One Investment Program recommend that the Prudent
Investor Standard approach is a more appropriate approach to investing;
viii) AND WHEREAS operating municipal investments
under the Prudent Investor Standard is precluded by the Municipal Act,
Eligible Investments, in its current form;
ix) THEREFORE BE IT RESOLVED THAT Council support
the request of AMO, LAS, and MFOA to amend Ontario Regulation 438/97 (as
amended) of the Municipal Act, 2001, to allow municipalities to invest
consistent with the Prudent Investor Standard, if such investments are through the One Investment Program.
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