MOOSE JAW — City hall will use more than $6 million of investment portfolio earnings this year to support various projects ranging from infrastructure to operations to scholarships.
During its 2025 budget meeting on Jan. 15, city council voted unanimously to approve the drawdown of $6,263,986 from the investment portfolio, with $1,314,290 coming from the moderate-term portfolio and $4,949,696 from the long-term portfolio.
Money from the long-term portfolio will support initiatives such as the Snowbirds’ Scholarship Fund, capital projects for transportation and parks and recreation, operations equipment purchases and the capital reserve.
Money from the moderate-term portfolio will enhance areas such as the police service's accumulated surplus account, the city’s accumulated surplus account, Mosaic Place and Yara Centre reserves, retirement pension supplements, contaminated site reserves and land development.
The expected annual return for the long-term portfolio is six per cent, but in 2024, it was 16.83 per cent, while the expected annual return for the moderate-term portfolio is 4.25 per cent, and in 2024, it was 11.07 per cent, a budget report said.
Last year’s performance was better than expected, so additional earnings can be withdrawn and spread throughout the budget, the report continued. City has determined there is roughly $3.1 million in extra investment earnings that could be used for other purposes, including $2.5 million to cover the capital reserve deficit.
Instead, council unanimously approved a motion directing administration to identify opportunities to use $300,000 in investment earnings to support one-time projects in the operating and/or capital budgets and to present a report with those options.
Council discussion
“It’s great news that we’re seeing higher-than-expected returns on our investments … . Obviously, it’s been helping to fund our budgets and keeping the mill rate increases down,” said Coun. Chris Warren.
The $6.2 million is likely more than city administration expected to have when it began the budget process, he pointed out, and likely budgeted based on what it thought the earnings would be.
Finance director Brian Acker concurred, saying administration did not expect those types of returns in 2024 and budgeted the earnings with a status quo-type mindset. He noted that administration budgeted $2.75 million to flow into the general capital expenditure reserve and not the extra $2.5 million that it was requesting be used.
Warren thought council could use $300,000 of extra earnings to fund one-time expenses in this year’s operating or capital budgets and potentially reduce the mill rate increase; he then made a motion to that effect.
Coun. Heather Eby didn’t think council should panic and spend $300,000 by the end of January, pointing out they have 11 more months to consider projects they could fund. Moreover, she didn’t think spending that money would affect the mill rate that much.
The $300,000 represents almost one percentage point of taxation, so council should use that money to reduce the mill rate, Warren replied. Currently, the municipal tax hike — including the police budget request — is roughly five per cent, while there are levies and utility increases on top of that.
An odd year but good year
Last year “was a pretty odd year in the markets,” but they were “really good,” while it will be interesting to see how this year pans out in light of the inauguration of U.S. President Donald Trump, said Coun. Dawn Luhning. She noted that all signs point to another year of good markets.
Meanwhile, since the City of Moose Jaw was a corporation and should technically exist forever, Luhning hoped that future councils saw the benefits of investing tax dollars because they increased over time. That meant it was important to keep the principal investment amount intact.
“This report is a prime example of why the reserves the City of Moose Jaw has (are) helpful for the budgets we do (because) 11 (per cent) and 16 (per cent increases) don’t happen every year,” she continued.
While some residents say council should spend those reserves, they should think about how detrimental that would be, Luhning added. Those earnings keep tax increases low and ensure the city can maintain programs and services that people enjoy.
The current value of the investment portfolios is over $110 million, so city administration works to protect that amount from erosion and only uses the excess earnings, said Acker. However, since $14 million of that principal is to close the landfill, the actual amount is just under $100 million.
