The investment portfolio of the Town of The Blue Mountains returned $585,685 in interest earnings in 2021.
Town staff delivered the municipal investment report at council’s committee of the whole meeting on May 31.
By the end of 2021, the town had $72.8 million in the bank, up $5.7 million over 2020. The town saw an increase in its reserves and reserve funds, mainly due to delayed capital projects.
The money earned $582,685 in 2021, down from $1,147,159 in 2020. Staff said the drop in investment year-over-year was due to lower returns caused by COVID-19.
Town staff told council that capital projects that were expected in 2021 are now being completed this year and the total amount in reserve would go down over the course of the year.
“The town is holding quite a bit of funds. It seems to be a little low,” Mayor Alar Soever said of the investment returns. “I know we don’t want to get into high risk investments.”
Soever suggested staff should look at projecting the town’s cash floor into the future, which could open an opportunity to lock the town’s reserves into term deposits that might have a higher rate of return.
The staff report on the topic projected that interest returns would increase.
“Over the past year, the High Interest Savings Account (HISA) with the ONE Investment Fund has been the best short term investment for the town, which ended the year at 0.715%. This rate was consistent from June to December and was up from the January rate of 0.165%,” Accounting Analyst Breanna Agnew stated in her report.
“The 2022 outlook on interest revenue from investments is an improvement over the two previous years. For 2022, staff have moved investment instruments into a HISA with One Fund at a rate of 3% – with a maximum deposit of $25 million. The HISA rate in January 2021 was 0.165% and at December 2021 reached 0.715%. Other short-term investments are also displaying improved rates for 2022.”
