HomeMy WebLinkAboutFIN 21-24Report to
Executive Committee
Report Number: FIN 21-24
Date: October 7, 2024
From: Stan Karwowski
Director, Finance & Treasurer
Subject: Investment Portfolio Activity for the Year Ended December 31, 2023
Ontario Regulation 438/97 under the Municipal Act, 2001
- File: F-3700-001
Recommendation:
It is recommended that Report FIN 21-24 of the Director, Finance & Treasurer regarding
Investment Portfolio Activity for the Year Ended December 31, 2023 be received for
information.
Executive Summary: The purpose of this report is to share a summary of the investment
activity and year end balance in the portfolio for 2023. Investment activity for the year totaled
approximately $261.0 million with a year end balance in the portfolio of approximately $195.7
million. Current Fund investments are limited to one year or less and Reserve Funds to 10
years or less under the Council approved policy. The last few years have seen the value of the
portfolio consistently rise which is primarily a result of the ongoing development in Pickering
which provides the collection of development charges. Overall, returns on the City’s portfolio
compare favourably to market benchmarks.
Relationship to the Pickering Strategic Plan: The recommendations in this report
respond to the Pickering Strategic Plan Corporate Key to Deliver on Good Governance – Open
& Transparent Decision-Making.
Financial Implications: Total investment income, including bank account interest for 2023
was $8.29 million (2022 - $2.72 million) of which $6.51 million (2022 - $2.10 million) was for
Current (Operating) Funds. The balance of the income was allocated to the various reserve
funds.
Discussion: The purpose of this report is to share a summary of the investment activity
and year end balance in the portfolio for 2023. The City’s investment portfolio is comprised of
two main components:
(i) Reserve Funds; and
(ii) Balances available in the Current Fund, when not required to meet current operating
expenditures. This latter balance can vary greatly depending upon many factors
FIN 21-24 October 7, 2024
Subject: Investment Portfolio Activity for the Year Ended December 31, 2023 Page 2
Ontario Regulation 438/97 under the Municipal Act, 2001
including the timing of the receipt of property taxes and levy payments to the School
Boards and the Region.
Investments are undertaken as one consolidated pool of funds and interest earned is credited
back to the appropriate funds.
The Treasurer of the City of Pickering is required under Provincial Regulation 438/97 to report
certain information and opinions to Council. The schedules to this report are included as part of
that Regulation’s information requirements. The portfolio balance at December 31, 2023 of
$195.7 million (2022 - $188.5M) has increased over the prior year. This is primarily a result of
an increase in development charge collections over prior year from the ongoing building
activity in the City, particularly in the Seaton area.
The return on the portfolio, maintained with Nesbitt Burns, increased in 2023 with a weighted
yearly rate of return of 4.59 percent (2022 – 1.61%) on the combined short-term and long-term
investments. This was a result of the interest rates beginning to rise in the latter half of 2022
and remaining elevated throughout 2023. As we came out of the pandemic in early 2022 we
started out with GIC rates below 1.00 percent but as they continually rose throughout that year
we entered 2023 with GIC rates around 4.50 percent and topping out around 5.75 percent by
the end of the year.
Also from the pandemic the City switched the types of investments being held in the portfolio,
transferring from banker’s acceptances and bonds to guaranteed investment certificates (GIC)
to take advantage of higher yields. Since GICs don’t provide the same liquidity, the City also
changed the timing of maturities to a ladder approach with both the short term and long term
paper, to allow for maturities every month. As a result the City was able to lock in to GICs to
obtain higher yields but also ensuring sufficient cash flows to meet the City’s financial needs.
For 2024, the recent decreases in the Canada bank rate will have an impact on the portfolios
2024 performance.
The net performance on TD Wealth’s portion of the portfolio for 2023 was 4.44 percent (2022 –
1.25%). Again the significant increase in the interest rates from the latter half of 2022 through
to the higher level for all of 2023, as explained above, has contributed to the higher return over
prior year.
Investment parameters are narrow due to the Municipal Act and Regulations limiting the
selection of qualified investments for municipal entities. Furthermore, staff’s approach tends to
be conservative, given that they are investing public money. Notwithstanding these restrictions,
the annual returns from both Nesbitt Burns and TD Wealth either outperformed or were in line
with the annual returns for the CIBC Canadian T-Bill Premium Class Fund (4.46%) and the
Morningstar Canadian Money Market Mutual Fund Index (4.32%). These indices were deemed
to be the most appropriate benchmarks for reviewing the portfolio’s performance given the
guidelines that govern municipal investments.
The average return on interfund investments (internal loans) was 2.29 percent (2022 – 0.83%).
FIN 21-24 October 7, 2024
Subject: Investment Portfolio Activity for the Year Ended December 31, 2023 Page 3
Ontario Regulation 438/97 under the Municipal Act, 2001
At year end 2023, the total portfolio of approximately $195.7 million, consisted of
approximately $96.6 million or 49.4 percent in external long-term investments and
approximately $2.2 million or 1.1 percent in Interfund Investments (Internal Loans). The
balance of approximately $96.9 million is short-term investments due within the year.
All investments were made in accordance with the Investment Policy approved by Council on
March 4, 1998 (Resolution #56/98).
Attachments:
1.Investment Activities for 2023
2.Outstanding Investments as at December 31, 2023
3.Investment Account Overview - Correspondence from BMO Nesbitt Burns
4.Performance Report - Correspondence from TD Wealth
Prepared By: Approved/Endorsed By:
Original Signed By: Original Signed By:
Kristine Senior Stan Karwowski
Manager, Accounting Services Director, Finance & Treasurer
Recommended for the consideration
of Pickering City Council
Original Signed By:
Marisa Carpino, M.A.
Chief Administrative Officer
Financial Purchase Maturity
Institution Instrument Cost Principal Yield Term Date Date
Short Term
Nesbitt Burns National Bank of Canada GIC Annual 6,588,000 6,588,000 4.750%365 21-Sep-22 21-Sep-23
Bank of Montreal GIC Annual 7,110,000 7,110,000 4.800%365 21-Sep-22 21-Sep-23
National Bank of Canada GIC Annual 8,166,000 8,166,000 4.750%270 26-Sep-22 23-Jun-23
Bank of Montreal GIC Annual 5,000,000 5,000,000 4.950%365 28-Sep-22 28-Sep-23
National Bank of Canada GIC Annual 5,984,000 5,984,000 4.800%365 28-Sep-22 28-Sep-23
Bank of Montreal GIC Annual 6,224,000 6,224,000 4.800%365 29-Sep-22 29-Sep-23
Bank of Montreal GIC Annual 5,000,000 5,000,000 4.800%365 4-Oct-22 4-Oct-23
National Bank of Canada GIC Annual 5,000,000 5,000,000 3.900%91 4-Oct-22 3-Jan-23
National Bank of Canada GIC Annual 5,000,000 5,000,000 3.900%91 5-Oct-22 4-Jan-23
National Bank of Canada GIC Annual 3,000,000 3,000,000 3.900%90 6-Oct-22 4-Jan-23
Bank of Montreal GIC Annual 1,896,000 1,896,000 5.460%365 24-Nov-22 24-Nov-23
Bank of Montreal GIC Annual 3,907,000 3,907,000 5.360%365 24-Nov-22 24-Nov-23
Bank of Montreal GIC Annual 6,694,000 6,694,000 5.360%365 13-Dec-22 13-Dec-23
National Bank of Canada GIC Annual 8,825,000 8,825,000 4.560%90 21-Dec-22 21-Mar-23
National Bank of Canada GIC Annual 8,397,000 8,397,000 4.610%90 29-Dec-22 29-Mar-23
National Bank of Canada GIC Annual 5,000,000 5,000,000 4.710%90 11-Jan-23 11-Apr-23
National Bank of Canada GIC Annual 3,000,000 3,000,000 5.060%272 11-Jan-23 10-Oct-23
Bank of Montreal GIC Annual 5,000,000 5,000,000 5.360%365 11-Jan-23 11-Jan-24
National Bank of Canada GIC Annual 9,270,000 9,270,000 4.710%90 24-Mar-23 22-Jun-23
National Bank of Canada GIC Annual 8,537,000 8,537,000 4.710%89 29-Mar-23 26-Jun-23
Bank of Nova Scotia GIC Annual 5,060,000 5,060,000 4.960%90 12-Apr-23 11-Jul-23
Bank of Montreal GIC Annual 9,270,000 9,270,000 5.710%367 23-Jun-23 24-Jun-24
Bank of Montreal Trust Company GIC Annual 8,384,000 8,384,000 5.710%366 26-Jun-23 26-Jun-24
Bank of Montreal Mortgage Corp GIC Annual 8,824,000 8,824,000 5.710%366 27-Jun-23 27-Jun-24
Bank of Montreal Trust Company GIC Annual 5,307,587 5,307,587 5.760%366 19-Jul-23 19-Jul-24
Bank of Montreal GIC Annual 10,000,000 10,000,000 5.860%369 28-Sep-23 1-Oct-24
Bank of Montreal Trust Company GIC Annual 10,000,000 10,000,000 5.860%369 28-Sep-23 1-Oct-24
Bank of Montreal Mortgage Corp GIC Annual 10,000,000 10,000,000 5.860%368 29-Sep-23 1-Oct-24
Bank of Montreal GIC Annual 8,000,000 8,000,000 5.910%367 6-Oct-23 7-Oct-24
Bank of Montreal Trust Company GIC Annual 3,176,000 3,176,000 5.910%369 12-Oct-23 15-Oct-24
Bank of Montreal GIC Annual 4,116,415 4,116,415 5.810%366 28-Nov-23 28-Nov-24
Bank of Montreal Trust Company GIC Annual 1,999,521 1,999,521 5.810%366 28-Nov-23 28-Nov-24
Bank of Montreal GIC Annual 7,239,713 7,239,713 5.510%366 18-Dec-23 18-Dec-24
TD Wealth Toronto Dominion Bank GIC 2,283,005 2,283,005 1.000%367 28-Jan-22 30-Jan-23
Bank of Nova Scotia GIC 2,247,570 2,247,570 1.250%367 25-Feb-22 27-Feb-23
Toronto Dominion Bank GIC 2,300,152 2,300,152 4.100%365 29-Aug-22 29-Aug-23
Toronto Dominion Bank GIC 2,581,700 2,581,700 4.950%365 30-Jan-23 30-Jan-24
Toronto Dominion Bank 2,244,852 2,286,000 2.850%373 1-Mar-23 8-Mar-24
ISA-TDB@4.55% PA/NL 388,872 388,872 4.550%64 28-Nov-23 31-Jan-24
ISA-TDB@4.55% PA/NL 279,125 279,125 4.550%57 5-Dec-23 31-Jan-24
ISA-TDB@4.55% PA/NL 23,000 23,000 4.550%56 6-Dec-23 31-Jan-24
CITY OF PICKERING INVESTMENT ACTIVITIES FOR 2023
Attachment 1 to Report FIN 21-24
Financial Purchase Maturity
Institution Instrument Cost Principal Yield Term Date Date
CITY OF PICKERING INVESTMENT ACTIVITIES FOR 2023
Total Short-term 221,323,512 221,364,660
Financial Purchase Maturity
Institution Instrument Cost Principal Yield Term Date Date
CITY OF PICKERING INVESTMENT ACTIVITIES FOR 2023
Long Term
Nesbitt Burns Bank of Montreal GIC Annual 2,662,000 2,662,000 4.980%733 18-Jan-23 20-Jan-25
Bank of Montreal GIC Annual 1,755,777 1,755,777 4.550%1,096 1-May-23 1-May-26
Bank of Montreal GIC Annual 1,868,000 1,868,000 5.040%1,097 31-May-23 1-Jun-26
Bank of Montreal GIC Annual 2,346,000 2,346,000 5.710%733 19-Jul-23 21-Jul-25
Bank of Montreal GIC Annual 5,739,000 5,739,000 5.560%1,098 22-Aug-23 24-Aug-26
Bank of Montreal Trust Company GIC Annual 6,368,000 6,368,000 5.560%1,098 29-Aug-23 31-Aug-26
Bank of Montreal GIC Annual 7,400,000 7,400,000 5.760%731 15-Sep-23 15-Sep-25
Bank of Montreal GIC Annual 3,089,000 3,089,000 5.620%1,097 12-Oct-23 13-Oct-26
Bank of Montreal GIC Annual 3,480,000 3,480,000 5.800%732 16-Nov-23 17-Nov-25
TD Wealth Toronto Dominion Bank 2,363,038 2,482,000 2.667%740 31-Aug-23 9-Sep-25
Toronto Dominion Bank GIC 1,032,570 1,032,570 5.100%1,096 10-Nov-23 10-Nov-26
Total Long-term 38,103,385 38,222,347
Total External Investments 259,426,897 259,587,007
Interfund Investments (Internal Loans)1,390,000
Total Investment Activity 260,977,007
Long Term Dispositions
Nesbitt Burns Bank of Nova Scotia Unsecured Sr Serial Dep Note 1,824,631 1,730,000 2.980%1,043 8-Jun-20 17-Apr-23 Matured
Toronto Dominion Unsecured Serial Dep Note 1,978,361 1,868,000 3.005%1,078 16-Jun-20 30-May-23 Matured
Cdn Imperial Bk of Comm. Sr. Dep Note 2,494,643 2,346,000 2.970%1,085 21-Jul-20 11-Jul-23 Matured
Bank of Montreal GIC Annual 5,739,000 5,739,000 1.230%1,096 20-Aug-20 21-Aug-23 Matured
Bank of Montreal GIC Annual 6,368,000 6,368,000 1.160%1,097 26-Aug-20 28-Aug-23 Matured
Bank of Montreal GIC Annual 1,978,000 1,978,000 2.000%550 4-Mar-22 5-Sep-23 Matured
Bank of Montreal GIC Annual 2,502,000 2,502,000 1.160%1,096 10-Sep-20 11-Sep-23 Matured
Bank of Montreal GIC Annual 2,694,000 2,694,000 1.070%730 15-Sep-21 15-Sep-23 Matured
Bank of Montreal GIC Annual 3,089,000 3,089,000 1.160%1,098 7-Oct-20 10-Oct-23 Matured
Bank of Montreal GIC Annual 3,103,333 3,103,333 5.460%365 10-Nov-22 10-Nov-23 Matured
TD Wealth Bank of Nova Scotia GIC 1,013,944 1,013,944 0.850%1,095 10-Nov-20 10-Nov-23 Matured
Total Dispositions 32,784,912 32,431,277
Financial Purchase Maturity Interest
Institution Instrument Cost Principal Yield Term Date Date Payable Dates
Short-term Current & Reserve Fund Investments
Nesbitt Burns BMO GIC 5,000,000.00 5,000,000.00 5.36%365 11-Jan-23 11-Jan-24
BMO GIC 9,270,000.00 9,270,000.00 5.71%367 23-Jun-23 24-Jun-24
BMO Trust Co GIC 8,384,000.00 8,384,000.00 5.71%366 26-Jun-23 26-Jun-24
BMO Mortgage Corp GIC 8,824,000.00 8,824,000.00 5.71%366 27-Jun-23 27-Jun-24
BMO Trust Co GIC 5,307,587.00 5,307,587.00 5.76%366 19-Jul-23 19-Jul-24
BMO GIC 10,000,000.00 10,000,000.00 5.86%369 28-Sep-23 1-Oct-24
BMO Trust Co GIC 10,000,000.00 10,000,000.00 5.86%369 28-Sep-23 1-Oct-24
BMO Mortgage Corp GIC 10,000,000.00 10,000,000.00 5.86%368 29-Sep-23 1-Oct-24
BMO GIC 8,000,000.00 8,000,000.00 5.91%367 6-Oct-23 7-Oct-24
BMO Trust Co GIC 3,176,000.00 3,176,000.00 5.91%369 12-Oct-23 15-Oct-24
BMO GIC 4,116,415.00 4,116,415.00 5.81%366 28-Nov-23 28-Nov-24
BMO Trust Co GIC 1,999,521.00 1,999,521.00 5.81%366 28-Nov-23 28-Nov-24
BMO GIC 7,239,713.00 7,239,713.00 5.51%366 18-Dec-23 18-Dec-24
TD Wealth TD BK GIC 2,581,700.00 2,581,700.00 4.95%365 30-Jan-23 30-Jan-24
TD Bank 2,278,498.49 2,286,000.00 2.85%373 1-Mar-23 8-Mar-24
ISA-TD Bank 389,017.43 389,017.43 4.55%64 28-Nov-23 31-Jan-24
ISA-TD Bank 279,125.00 279,125.00 4.55%57 5-Dec-23 31-Jan-24
ISA-TD Bank 23,000.00 23,000.00 4.55%56 6-Dec-23 31-Jan-24
Total Short-term 96,868,576.92 96,876,078.43
Long-term Reserve Fund Investments
Nesbitt Burns BMO GIC 2,516,000.00 2,516,000.00 1.04%1098 16-Mar-21 18-Mar-24
BMO GIC 4,008,000.00 4,008,000.00 1.11%1098 27-Apr-21 29-Apr-24
BMO GIC 1,789,000.00 1,789,000.00 1.32%1096 4-Jun-21 4-Jun-24
BMO GIC 3,851,000.00 3,851,000.00 1.37%1096 16-Jul-21 16-Jul-24
BMO GIC 2,053,000.00 2,053,000.00 1.86%1096 5-Nov-21 5-Nov-24
BNS GIC 2,944,000.00 2,944,000.00 1.68%1097 22-Dec-21 23-Dec-24
BMO GIC 1,827,000.00 1,827,000.00 2.88%733 23-Mar-22 25-Mar-24
National Bank of Canada GIC 2,402,000.00 2,402,000.00 4.76%547 21-Sep-22 21-Mar-24
BMO GIC 3,451,000.00 3,451,000.00 4.80%547 21-Sep-22 21-Mar-24
BMO GIC 1,966,000.00 1,966,000.00 4.80%547 26-Sep-22 26-Mar-24
BMO GIC 3,100,000.00 3,100,000.00 4.81%549 7-Oct-22 8-Apr-24
BMO GIC 3,479,000.00 3,479,000.00 5.27%731 13-Dec-22 13-Dec-24
BMO GIC 1,850,000.00 1,850,000.00 5.00%747 22-Dec-22 7-Jan-25
BMO GIC 2,662,000.00 2,662,000.00 4.98%733 18-Jan-23 20-Jan-25
BMO GIC 1,755,777.00 1,755,777.00 4.55%1096 1-May-23 1-May-26
BMO GIC 1,868,000.00 1,868,000.00 5.04%1097 31-May-23 1-Jun-26
BMO GIC 2,346,000.00 2,346,000.00 5.71%733 19-Jul-23 21-Jul-25
BMO GIC 5,739,000.00 5,739,000.00 5.56%1098 22-Aug-23 24-Aug-26
CITY OF PICKERING OUTSTANDING INVESTMENTS AS AT DECEMBER 31, 2023
Attachment 2 to Report FIN 21-24
Financial Purchase Maturity Interest
Institution Instrument Cost Principal Yield Term Date Date Payable Dates
CITY OF PICKERING OUTSTANDING INVESTMENTS AS AT DECEMBER 31, 2023
BMO Trust Co GIC 6,368,000.00 6,368,000.00 5.56%1098 29-Aug-23 31-Aug-26
BMO GIC 7,400,000.00 7,400,000.00 5.76%731 15-Sep-23 15-Sep-25
BMO GIC 3,089,000.00 3,089,000.00 5.62%1097 12-Oct-23 13-Oct-26
BMO GIC 3,480,000.00 3,480,000.00 5.80%732 16-Nov-23 17-Nov-25
TD Wealth TD Mortgage GIC 1,013,945.00 1,013,945.00 0.95%1826 10-Nov-20 10-Nov-25
RBC GIC 2,750,000.00 2,750,000.00 5.05%733 23-Nov-22 25-Nov-24
RBC GIC 2,151,882.00 2,151,882.00 5.10%1097 23-Nov-22 24-Nov-25
TD GIC 2,750,000.00 2,750,000.00 5.10%1097 23-Nov-22 24-Nov-25
Laurentian Bank of Canada 3,937,219.42 4,000,000.00 1.15%556 25-Nov-22 3-Jun-24 Jun 3 & Dec 3
Canadian Western Bank 1,972,944.64 2,000,000.00 3.86%878 25-Nov-22 21-Apr-25 Apr 21 & Oct 21
BMO GIC 2,750,000.00 2,750,000.00 5.05%732 1-Dec-22 2-Dec-24
TD Mortgage GIC 2,750,000.00 2,750,000.00 5.10%1096 1-Dec-22 1-Dec-25
TD Protected Notes 3,000,000.00 3,000,000.00 6.00%1096 16-Dec-22 16-Dec-25
TD Bank 2,382,650.44 2,482,000.00 2.67%740 31-Aug-23 9-Sep-25 Mar 9 & Sep 9
TD Bank GIC 1,032,570.00 1,032,570.00 5.10%1096 10-Nov-23 10-Nov-26
Total Long-term 96,434,988.50 96,624,174.00
Total External Investments 193,303,565.42 193,500,252.43
Interfund Investments (Internal Loans)
Development Charge Reserve Fund 2,209,870.00 3.65% to 5.50%various various various
Total as at December 31, 2023 195,710,122.43
Investment Account Overview
Comparative Returns 2023 Annual Return
City of Pickering Portfolio 4.59%
CIBC Cdn T-Bill Premium Class 4.46%
Morningstar Canadian Money Market Fund Index 4.32%
Attachment 3 to Report FIN 21-24
Attachment 4 to Report FIN 21-24