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POLICY WEST HANTS REGIONAL MUNICIPALITY
RCOFN-005.00
INVESTMENT POLICY
West Hants Regional Municipality
Page 1 of 5
Investment Policy, RCOFN-005.00
1. PURPOSE
The Investment Policy of the West Hants Regional Municipality will govern the
investment of trust funds, reserve funds, and surplus cash balances at an
optimum level of return while ensuring the principal amount of investment is
preserved.
2. INVESTMENT OBJECTIVES
The Investment Policy seeks to preserve and grow the Municipality's revenues
while adhering to strict legal requirements. Preservation of the principal amount
implies a policy of conservative investing which will not necessarily produce the
highest rate of return. The fundamental objectives of this Policy are built upon
the preservation of capital as well as cash flow liquidity commensurate with the
Municipality's expenditure requirements. This is accomplished by structuring the
portfolio so that securities mature and/or are accessible concurrent with cash
needs to meet anticipated demands.
The investment portfolio will be designed with the objective of attaining a market
rate of return subject to an agreed upon level of risk. The portfolio of the
Municipality will be managed in a manner which prioritizes 1) liquidity
requirements, 2) an acceptable and agreed upon level of risk, and 3) earns the
highest rate of return given priorities 1 and 2. The standards and guidelines for
permissible investment are set out in Section 6 of this Policy.
3. DEFINITIONS
For the purposes of this Policy, the following definitions are provided:
a. "Audit Committee" refers to a committee of Council, which is responsible
for assisting Council in meeting its oversight responsibilities by ensuring
the adequacy and effectiveness of financial reporting, risk management,
and internal controls.
b. "CAO" refers to the Chief Administrative Officer of the Municipality.
c. "Council" refers to the Council of the Municipality.
d. "Councillor" refers to a Council member and includes the Mayor and
Deputy Mayor unless the context indicates otherwise.
e. "Director, Financial Services" refers to the senior administrative officer for
the Financial Services Department with the West Hants Regional
Municipality.
f. "Employee" refers to any person directly employed by the Municipality.
POLICY WEST HANTS REGIONAL MUNICIPALITY
RCOFN-005.00
INVESTMENT POLICY
West Hants Regional Municipality
Page 2 of 5
Investment Policy, RCOFN-005.00
g. "Municipality" refers to the West Hants Regional Municipality.
4. APPLICATION
This Policy applies to investments of surplus cash balances held in any funds
within the control of the Municipality. The CAO is responsible for administering
the investment activities and ensuring compliance with this Policy.
Director, Financial Services will recommend to the CAO investment asset mix
parameters and credit quality restrictions and will develop and maintain
appropriate procedures and controls for recording, reporting, and monitoring
investments to ensure that they are made in accordance with the Investment
Policy. Director, Financial Services will monitor investment performance and
prepare annual reports for the CAO and Audit Committee at least annually.
Director, Financial Services will consult with any other person or persons whose
advice is deemed to be desirable.
This Policy will be reviewed at least every three (3) years, and reports to Council
recommending changes, deletions, or additions to the Policy as considered
appropriate.
5. CONFLICT OF INTEREST
A conflict of interest occurs when any interested person may benefit materially
from knowledge of, participation in, or by virtue of an investment decision.
An "Interested person" includes:
-
Any employee or Councillor of the Municipality who is managing in-house
portfolios or is involved in the investment of fund by the Municipality.
Neither the Councillors nor employees of the Municipality will engage in personal
or business activities which would profit from or be affected by the carrying out
of their responsibilities as investors of the Municipality's fund that could result in
personal gain.
Should a conflict of interest occur the person who has a conflict of interest or any
person who becomes aware of a conflict of interest situation, will immediately
disclose the conflict to the CAO. Any such party will abstain from decision making
with respect to the area of conflict, and a written record of the conflict will be
maintained by the Director, Financial Services.
6. ELIGIBLE INVESTMENT
POLICY WEST HANTS REGIONAL MUNICIPALITY
RCOFN-005.00
INVESTMENT POLICY
West Hants Regional Municipality
Page 3 of 5
Investment Policy, RCOFN-005.00
The minimum standards and guidelines for competitive bids, and the maximum
amounts and terms for each type of investment are outlined below. All
investments are denominated in Canadian Dollars.
Investment
Maximum Investment
Level ($)
Maximum Investment
Terms
Federal Government,
and its agencies
No dollar limit
2-year term
Province of Nova Scotia
No dollar limit
2-year term
Any Provincial
Governments, or its
agencies when their
credit rating is A or
greater1
No dollar limit
2-year term
Municipal Finance
Corporation of Nova
Scotia
No dollar limit
No term limit
Chartered banks, trust
companies, and credit
unions; operating in the
Province of Nova Scotia
$200,000.00
1-year term
Commercial Paper with a
Dominion Bond Service
rating of R-1 (low)or
higher
$200,000.00
1-year term
Institutions covered by
Canadian Deposit
Insurance
Up to insured limit
2-year term
Deposit in accounts at
the Municipality's
financial institution
Up to insured limit
No term limit
7. SAFE KEEPING
Any investment statement or purchase confirmation resulting from the
acceptance of an investment should be forwarded to the Director, Financial
Services or designate, for safekeeping. This should not preclude the option of
having certificates held by financial institutions or if a book-based investment,
held electronically.
8. INVESTMENT PROCESS
The procedure of acquiring investments will be as follows:
1 Credit ratings found on Standard & Poor's Global Ratings or Dominion Bond Rating Services, the investment is
subject to the lower of the two ratings.
POLICY WEST HANTS REGIONAL MUNICIPALITY
RCOFN-005.00
INVESTMENT POLICY
West Hants Regional Municipality
Page 4 of 5
Investment Policy, RCOFN-005.00
a. The Director, Financial Services determines the amount to be invested by
referring to the cash flow forecast.
b. The Director, Financial Services determines the length of time to invest
funds and the flexibility of that term. The term is determined within the
constraints of the cash flow forecast. Flexibility on the term of the
investment may range from one week to a date specified.
c. The selections of the investments(s) will be made based on comparison of
rates and subject to Section 4 of this Policy. The Director, Financial
Services may provide an updated copy of the Policy or see that the
updated copy of the Policy (which includes a listing of eligible
investments, Section 6) is provided to participating banks, brokers, or
trust companies.
d. The Director, Financial Services will phone banks, brokers, and/or trust
companies and inform them of the following:
-
Amount to invest
-
Term
-
Flexibility of term
-
Time and date that rates are to be received at the Municipal Office
in person, by mail, electronic mail, courier, or by facsimile.
e. The Director, Financial Services requests approval from the CAO for
proposed investments. The selections of the investment(s) will be made
based on comparison of rates and subject to Section 4 of this Policy.
f. The Director, Financial Services will advise the successful bidder and
ensure that the investment amount(s) and rate(s) are confirmed and
advise the unsuccessful bidders that they were not successful.
g. The rate as it is received noting all information will be recorded.
h. The Director, Financial Services will initiate the accounts payable process
to issue a cheque or arrange for a bank transfer payable to the successful
financial institution. (Financial institutions are to pay bank charges, if any,
for bank transfer.)
i. Every investment is to be in the name of the Municipality and all
registered securities are to bear the name of the Municipality.
j. The Municipality requires receipts of investment documents which may
come in the form of a certificate from the financial institution or a
confirmation of purchase. If documents are being held offsite, the
Municipality also requires confirmation that the documentation is held in
safekeeping by those institutions. Investment documentation, if not held
by financial institutions, will be kept by the Municipality.
POLICY WEST HANTS REGIONAL MUNICIPALITY
RCOFN-005.00
INVESTMENT POLICY
West Hants Regional Municipality
Page 5 of 5
Investment Policy, RCOFN-005.00
k. Any investments made are to be presented to the Audit Committee and
then reported to Councillors at either the next Committee of the Whole or
Council meeting. The report will include the principle amounts of
investments, what the investments are, as well as maturity dates and
yields. The report will also include details of other investment options
received but not selected as well as the current interest rate received on
bank deposits held.
9. REPEAL
The Financial Controls and Reporting Policy dated December 16, 2008 as
amended to January 28, 2014 of the former Town of Windsor, and the
Investment Policy, COFN-006.00 dated March 13, 2018 of the former
Municipality of the District of West Hants are hereby repealed.
I, Rhonda Brown, Municipal Clerk of the West Hants Regional Municipality,
the Province of Nova Scotia, do hereby certify that this is a true copy of
the Policy as adopted by the Council of the West Hants Regional
Municipality at a meeting duly called and held on the 28th day of April
,2020 and amended by Council on the 28th day of July, 2020.
________________________________
R. N. Brown
Municipal Clerk
Adoption
Notice to Council:
April 14, 2020
Approval:
April 28, 2020
Description: Initial approval of Investment Policy, RCOFN-005.00.
First Amendment
Notice to Council:
July 14, 2020
Approval:
July 28, 2020
Description: Revised Policy to replace the terminology of "Elected
Municipal Official" with "Councillors", and updated Section 6 - Eligible
Investment in accordance with Provincial requirements.