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THE CORPORATION OF
THE TOWNSHIP OF SOUTH ALGONQUIN
BY-LAW NO. 21-649
BEING A BY-LAW TO ADOPT AN INVESTMENT POLICY
WHEREAS the Municipal Act S.O. 2001, c.25 and Ontario Regulation 438/97 provide for the
authorization of municipal investments.
AND WHEREAS the Council of The Corporation of the Township of South Algonquin is
authorizing the investment of municipal funds in accordance with the Municipal Act S.O. 2001, c.25
and Ontario Regulation 438/97.
NOW THEREFORE the Council of The Corporation of the Township of South Algonquin hereby
enacts the following as a By-Law;
1. THAT the Council for the Township of South Algonquin hereby adopts the Investment
Policy attached hereto as Schedule "A" and forming part of this By-Law.
2. THAT this By-Law shall come into force and take effect on the date of its final
passing.
3. THAT the CAO / Clerk-Treasurer for the Township of South Algonquin is hereby
authorized to make minor modifications or corrections of a grammatical or typographical
nature to the By-Law and schedule, after the passage of this By-Law, where such
modifications or corrections do not alter the intent of the By-Law.
4. THAT any other By-Law inconsistent with or antedating this By-Law is hereby repealed.
READ A FIRST & SECOND TIME this 7th day of July, 2021.
_________________________
______________________________
Jane A.E Dumas, Mayor
Bryan Martin, CAO Clerk-Treasurer
READ A THIRD TIME AND PASSED this 7th day of July, 2021
_________________________
_______________________________
Jane A.E Dumas, Mayor
Bryan Martin, CAO Clerk-Treasurer
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POLICY MANUAL
POLICY NO. FIN-003-01
For Township of South
Algonquin
EFFECTIVE DATE: July 7, 2021
Revised:
SUBJECT: Investment Policy
DEPARTMENT: Finance
PURPOSE
The goal of the Township investment policy shall be to set out the guiding principles and establish a statement of the
Township's investment policies and goals for the purpose of investing public funds held by the Township of South
Algonquin, while meeting the related statutory requirements. Ideally the market yields should be higher than the rate
given by the Township's bank for the various bank accounts.
GUIDING PRINCIPLES
The Township shall adhere to the following guiding principles in the consideration, purchase, disposal and
administration of any Township held investments:
a) Adhere to statutory requirements
b) Preservation of capital
c) Liquidity
d) Diversification
e) Yield
DEFINITIONS
- CAO/Clerk -Treasurer means the Chief Administrative Officer/ Clerk Treasurer of the Township of South Algonquin
- Deputy Treasurer means the Deputy Treasurer of the Township of South Algonquin
- Investment Committee means the Finance Committee of the Township of South Algonquin
Investment Manager(s) means the person that makes investments in portfolios of securities on behalf of the Township
of South Algonquin, in accordance with the investment objectives and parameters defined by this policy. An investment
manager may be responsible for all activities associated with the management of client portfolios, from buying and
selling securities on a day-to-day basis to portfolio monitoring, settlement of transactions, performance measurement,
and regulatory and client reporting.
- Custodian means an agent, bank, trust company, or other organization which holds and safeguards an individual, or
investment company's assets for them.
ADHERE TO STATUTORY REQUIREMENTS
All investment activities shall be in compliance with the relevant sections of the Municipal Act, 2001 along with any
applicable legislation and related regulations as amended from time to time.
Investments issued or guaranteed shall be in accordance with Ontario Regulation 438/97 as amended.
PRESERVATION OF CAPITAL
Safety of principal is a primary objective of the investment program. Investments shall be undertaken in a manner that
seeks to ensure the preservation of capital in the overall portfolio.
LIQUIDITY
The investment portfolio shall remain sufficiently liquid to meet all operating or cash flow requirements and limit
temporary borrowing requirements. Furthermore, since all possible cash demands cannot be anticipated, the portfolio
shall consist largely of securities with active secondary or resale markets. A portion of the portfolio may also be placed
in local government investment pools that offer liquidity for short-term funds.
DIVERSIFICATION
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The portfolio shall be diversified by asset class, issuer type, credit rating and by term to the extent possible, given legal
and regulatory constraints.
YIELD
The Township shall maximize the net rate of return earned on the investment portfolio, without compromising the other
objectives listed previously. Investments are generally limited to relatively low risk securities in anticipation of earning a
fair return relative to the assumed risk.
PRUDENCE
Investments shall be made with judgement and care, under circumstances then prevailing, which persons of prudence,
direction and intelligence exercise in the management of their own affairs, not for speculation, but for investment,
considering the probable safety of capital as well as the probable income to be derived. Authorized employees acting in
accordance with this policy and exercising due diligence shall be relieved of personal responsibility for an individual
security's credit risk or market price changes.
DELEGATION OF AUTHORITY
The Investment Committee has responsibility for the prudent investment of the portfolio held by the Township of South
Algonquin. The Investment Committee will make recommendations to the Treasurer to act on behalf of the Township.
The Treasurer will act on these recommendations as long as they are consistent with this policy.
Authority to manage and implement the investment program may be granted for all or a portion of the Township's
overall investment portfolio, to an external investment Agent, to act as an Investment Manager on behalf of the
Township, as determined through an independent and competitive bidding process every five (5) years in consultation
with the Township. That Agent shall act in accordance with the established procedures and internal controls consistent
with this investment policy. The performance of any Agent will be assessed annually. Those investments governed by
the provisions of the "ONE - The Public Sector Group of Funds" agreement shall be deemed delegated to that Agent.
SAFEKEEPING & CUSTODY
The Custodian services are to be provided by a designated Custodian.
REPORTING
The Treasurer shall cause to have submitted an annual investment report to Council of the Township of South
Algonquin, together with the annual audited Township Financial Statements.
The investment report should include the following:
a) A listing of individual securities held at the end of the reporting period by maturity date;
b) A statement about the performance of the portfolio of investments of the Township during the period covered
by the report;
c) A description of the estimated proportion of the total investments of the Township that are invested in its own
long-term and short-term securities to the total investment of the Township and a description of the change, if
any, in that estimated proportion since the previous year's report;
d) A statement by the Treasurer as to whether or not, in his or her opinion, all investments were made in
accordance with the investment policies and goals adopted by the Township when applicable;
e) A record of the date of each security transaction, including a statement of the purchase and sale price of each
security;
f) Such other information that the Council may require or that, in the opinion of the Treasurer, should be
included.
PERFORMANCE BENCHMARKS
The investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio
should obtain a market average rate of return throughout budgetary and economic cycles that is commensurate with the
investment risk constraints and cash flow needs of the Township
MARKET VALUE
The market value of the portfolio shall be calculated at least annually as at December 31st.
SIGNING AUTHORITY
Transactions related to investments made by the Treasurer require approval by the Investment Committee.
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MAXIMUM MATURITIES
To the extent possible, the Township shall attempt to match investments with anticipated cash flow requirements.
Reserve and Trust funds with longer-term horizons may be invested in securities exceeding ten (10) years if the
maturities of such investments are made to coincide as nearly as practicable with the expected use of the funds.
CURRENCY
The Township shall not invest in a security that is expressed or payable in any currency other than Canadian dollars.
EXEMPTION
Any investment currently held by the Township that does not meet the guidelines of this policy shall be exempted from
the requirements of this policy. At maturity or liquidation, such monies shall be reinvested only as provided by this
policy.
RESPONSIBILITIES
CAO/Clerk - Treasurer
-
Obtain adequate insurance coverage to guard against any losses that may occur due to misappropriation, theft,
or other unscrupulous acts of fraud with respect to the Township's financial assets.
-
Enters into arrangements with Investment Managers;
-
Executes and signs documents on behalf of the Township and performs all other related acts in the day-to-day
operation of the investment and cash management program;
Deputy Treasurer
-
Consults with the Investment Committee on all transactions;
-
Presents the quarterly reports to the Committee; and
-
Develops and maintains all necessary operating procedures for effective control and management of the
investment function and reasonable assurance that the Township's investments are properly managed and
adequately protected.
Investment Committee
-
The Investment Committee has responsibility for the prudent investment of the Townships portfolio.
-
The Investment Committee will direct the Treasurer to act on behalf of the Township.
Investment Manager(s)
-
Allocates assets and selects securities or investments within such classes, in accordance with established
investment policy;
-
Provides regular reports (quarterly, at a minimum) to Administration, which include the performance and risk
characteristics of the Township's Investment Portfolio and meets with Administration and / or Committee as
required;
-
Recommends changes to established investment policy that are deemed appropriate;
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Provides advice and counsel with respect to the Investment Portfolio; and
-
May also act as Custodian.
Custodian
-
Provides safekeeping of the Investment Assets;
-
Processes transactions as directed by the Investment Manager(s) and / or the Township;
-
Collects interest, dividends and the proceeds of cash equivalent and fixed income instrument maturities;
-
Deposits funds and pays expenses as directed by the Township;
-
Maintains a record of all transactions;
-
Provides regular (monthly at a minimum) reports to the Township; and
-
Provides the Investment Manager(s) and the Township with information required to fulfill their duties.
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