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HomeMy WebLinkAbout2003-11-05 Council Minutes• Council Agenda item #5(a) To. Reeve Hoppms Members of Council From Mac deBeaudrap, ESMC Date- November 5 2003 Issue Municipal Disaster and Emergency Reserve Policy Background Proposed new policy for the administration of a Municipal Disaster & Emergency Reserve fund Discussion Attached to this report you will find a copy of the amended County policy statement Subsequent to the last policy draft and discussion in Council I have modified the Policy Guideline #1 to facilitate a reasonable fund replacement. Council determined that their desire would be to redesignate existing Operating Reserve Contingency funds in the amount of $500,000 00 to the Municipal Disaster and Emergency Reserve Recommendation 1) That Council Redesignate Reserve Funds in the amount of $500,000 00 from the Operating Contingency Reserve to the Municipal Disaster and Emergency Reserve 2) That Council adopt the proposed Disaster and Emergency Reserve Policy Mac deB a rap EMS Coordinator Page 19 0 C is 1*15yli Policy # Municipal Disaster and Emergency Reserve Department Emergency Management Services Approved Dates Amendment Dates Replaces PURPOSE. To administer a monetary reserve for the purpose of providing funds to respond to unbudgeted expenses incurred as a result of local emergencies or disasters POLICY STATEMENT A financial reserve shall be established for the purpose of providing monetary funds to respond to unbudgeted expenses incurred by the County as a result of a state of local emergency or other disasters The reserve balance shall not exceed Five Hundred Thousand ($500,000.00) dollars The County Disaster and Emergency Reserve funds are primarily intended for a) Providing funding necessary to meet obligations of the County during a state of local emergency, and b) Meeting the County's obligations associated with Provincial and Federal government disaster or emergency programs (eg Municipal Wildfire Assistance program) DEFINITIONS - a) Disaster- means an event that has resulted or may result in serious harm to the safety health, or welfare of people or in widespread damage to property b) Emergency means a present or imminent event that requires prompt coordination of action or special regulation of persons or property to protect the health, safety or welfare of people or to limit damage to property An urgent need for assistance Page 20 • • 0 0 POLICY GUIDELINES 1 The Council shall ensure that an amount of $500,000 00 is maintained annually in the County Disaster and Emergency Reserve, and that the Reserve does not exceed that amount. Should the Reserve be used and is not immediately reimbursed by the Provincial or Federal Government the maximum yearly contribution to replenish the funds would be $100,000 00 from Operating funds, subject to a motion by Council 2 The Director of Disaster Services, or the designate, is authorized to utilize funds from the County Disaster Reserve during a state of local emergency to meet unbudgeted expenses 3 Funds from the County Disaster and Emergency Reserve may be used to meet unbudgeted expenses for local emergencies or disasters which did not require a state of local emergency, only upon Council approval 4 Council shall be advised as soon as practical as to the amount of funds used and general areas of expenditure (e.g wages, contracted services, materials, etc ) whenever funds are drawn from this reserve Page 21 C is • 0 To Reeve and Council Gene Kiviaho CAO From, Mac deBeaudrap, EMSC Date November 5, 2003 Issue Trochu Fire Hall Addition Council Agenda Item 4 5(b) Background Council has previously approved in principle the construction of an addition to the Trochu Fire Hall for the purpose of a Training Centre, EOC site and meeting area Discussion We have received a letter from the Town of Trochu indicating that they have allocated $5,000.00 to the reserve account to have architectural drawings completed for the proposed Fire Hall addition. The project is heavily dependant on grant funding and there is currently a reserve set aside ($41,200) which in accordance with our 2002 grant application, must be spent before the years end We also applied for further funding from the Inter Municipal Grant for the Trochu Hall Project and the Torrington Tanker replacement We have now received the contract and a grant amount of $66,000.00 Further, Chief Hogg has provided me with a quote from Richards Consulting & Associates for Architectural and Structural drawings It requires signatures Should Council wish to have the Training Centre / EOC / Meeting Area remain a 2003/2004 priority, we will need direction from Council and authorization to commence with construction In consultation with Chief Hogg the following recommendations are presented to Council for consideration Recommendations 1) That Council support the Town of Trochu in the allocation of funds for the Architectural drawings and provide signatures on the quote 2) That Council direct Administration to commence with construction plans for the Trochu hall addition. A GO/ Mac deBeau ap Emergency Management Services Coordinator Page 22 0 • • is To Gene Kiviaho Reeve Hoppins Members of Council From. Terry Nash Date- November 5 2003 Council Agenda Item #5(c) Issue Investment Policy — tabled from October 14 2003 Council meeting until Mr Al Martinot, BDO Dunwoody, could be present to answer any questions or provide further information Purpose To ensure the funds of Kneehill County are invested and secured in compliance with the various provisions of the Municipal Government Act This Policy specifies the objectives, strategies and the scope of authority of the County Designee who is responsible for the investment of Kneehill County funds Background The Draft Policy was submitted to Bob Klotz — Senior Relationship Manager and referred to Mike Drotar — Corporate Treasurer Community Savings for their comments They replied "for the most part it is an excellent policy and our comments will suggest you clarify or be more specific in some areas " Discussion Under this policy Funds of the County may be invested in any of the securities authorized by Section 250(a) to (d), Municipal Government Act with a minimum (DBRS) Dominion Bond Rating Service of R 1 or AAA A copy of this policy will be provided to all financial institutions that will be investing funds on behalf of Kneehill County Policy Highlights The Investment Officer is the CAO/Designate The Investment Officer must disclose any potential conflict of interests Written Reports must be submitted to Council at least quarterly RFP process for selection of Bank and Securities Dealers, and evidence of registration Investment Objectives Internal accounting controls and bonding of employees Page 23 • Specifies maximum investment terms Debt Service not more than 2 years County Funds not more than 3 years Capital Funds not more than 3 years Road Renewal & Replacement. Funds, and. Contingency Funds not more than 7 years Diversification maximum 25% invested more than 2 years (not including capital and debt service) maximum 50% in time deposits of a single user unless 100% guaranteed at least 15% in overnight instruments, cashable 24 hours notice Annual Review of Policy by Council Specifies Investment Strategies for Funds General Fund average duration of funds for operating activities will be one year or Debt Service Fund average duration is 9 months or less Capital. Project Funds maximum duration. of 3 years Proprietary Funds project funds advanced in trust 3 years or less Road Renewal and Replacement average duration of 5 years or less The investment officer will have the ability to execute transactions alone unless the transaction requires funds being transferred to another institution Then the signing authorization policy would require a second signature Recommendation That Council approve the investment policy th:M Government Act Terry Tq4Assistant CAO which has been prepared in accordance with (L Gen)Kiviaho, CAO Page 24 • INVESTMENT POLICY This Investment Policy is adopted by Kneehill County pursuant to Section 250 of the Municipal Government Act PURPOSE This Policy with respect to Kneehill County investments has been adopted to establish policies and procedures that enhance opportunities for a prudent and systematic investment of Kneehill County funds The initial step toward a prudent investment policy is to organize and formalize investment related activities Related activities which comprise good cash management include accurate cash projection, the expeditious collection of revenue, the control of disbursements, cost-effective banking relations, and a short-term borrowing program which coordinates working capital requirements and investment opportunity In concert with these requirements are the many facets of an appropriate and secure short term investment program The funds of Kneehill County shall be invested and secured in compliance with the various provisions of the Municipal Government Act. This Policy will also specify the scope of authority of the County Designee who is responsible for the investment of Kneehill County funds SCOPE It is intended that this policy cover all County funds and funds under the direct control of Kneehill County INVESTMENT OFFICER Council hereby appoints the Chief Administrative Officer/Designate to serve as Investment Officer to handle the investment of County funds The Investment Officer shall be responsible for investing County funds in accordance with this Policy The Investment Officer shall invest County funds using the judgment and care, under circumstances then prevailing that persons of prudence discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital, as well as the probable income to be derived The standard of prudence to be used by the Investment Officer shall be the "prudent person," and shall be applied in the context of managing an overall portfolio The Investment Officer (1) acting in accordance with this Policy and any written procedures approved by Council and (2) exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes provided that deviations from expectation are reported in a timely fashion and appropriate action is taken to control adverse developments Disclosures of Relationships with Persons Selling Investments to the County An investment officer of an entity who has a personal or business relationship with an entity seeking to sell an investment to the entity shall file a statement disclosing that personal business interest An investment officer who is related within the second degree by affinity Page 25 or consanguinity, to an individual seeking to sell an investment to the investment officer's entity shall file a statement disclosing that relationship Renortin by the Investment Officer Not less than each Fiscal Quarter and within a reasonable time after the end of the period reported, the Investment Officer shall prepare and submit to Council a written report of the investment transactions for all funds of the County for the preceding reporting period The reports must (1) describe in detail the investment position of the County on the date of the reports, (2) state the book value and the market value of each separately invested asset at the beginning and end of the reporting period by the type of asset and fund type invested, (3) state the maturity date of each separately invested asset that has a maturity date, (4) state the fund for which each individual investment was acquired, and (5) exceptions to the policy Selection of Bank and Securities Dealers Depositories seeking to establish eligibility for certificate of deposit purchase programs shall be selected through the County's depository procurement process which shall begin with a formal request for proposals every three years All financial institutions and broker/dealers who desire to become qualified bidders for investment transactions must supply the Office of Corporate Services with the following (1) Audited financial statements for the financial institution or broker/dealer (2) Evidence of appropriate registration For Bank Dealers this requires a statement from a senior bank official that the Bank Dealer is appropriately registered with its primary regulatory agency as a government securities dealer, municipal securities dealer, or both. All transactions will be on a delivery versus payment basis Certifications from Approved Sellers of Investments The Investment Officer shall present this Policy to any person seeking to sell to the County an Authorized Investment and to obtain from a principal written confirmation of their intention to adhere to the County's investment policy prior to executing any transaction Objectives INVESTMENT OBJECTIVES The County's general objectives in investing its funds, listed in the order of importance are a. preservation and safety of principal, b understanding of the suitability of the investment to the financial requirements of the County, c liquidity; d marketability of the investment if the need arises to liquidate the investment before maturity, e diversification of the investment portfolio, and f yield Page 26 U 0 Safety of principal is the foremost objective of the County 3 Investment decisions should favor stability of principal over income 4 The County's investment portfolio shall be structured so as to be sufficiently liquid to enable the County to meet all operating requirements which might be reasonably anticipated This need for investment liquidity may be tempered to the extent that the County is allowed to borrow under a short term basis to meet its operating requirements if needed, taking into consideration the net cost to the County 5 The investment portfolio shall be designed to attain a rate of return comparable to the constant maturity treasury which most closely matches the portfolio's average weighted maturity 6 Investments shall be made to avoid incurring unreasonable and avoidable risks regarding specific security types or individual financial institutions 7 No investments shall be made for the purpose of trading or speculation, such as anticipating an appreciation of capital through changes in market interest rates The Investment Officer shall seek in the investment process to act responsibly as a custodian of the public trust. The Investment Officer shall avoid any transaction that might impair public confidence in the County's ability to operate effectively The Investment Officer shall recognize that the investment portfolio is subject to public review and evaluation. The overall program of managing the County's funds shall be designed and managed with a degree of professionalism that is worthy of public trust 9 The County, as a general objective plans to hold investments to maturity while protecting principal and obtaining the highest rate of return possible at the date of investment It is not the intent to devote substantial efforts to earn profit on investment market fluctuations Investments will be purchased because of their interest yield expectations over their remaining life rather than for speculative purposes 10 Investments will be primarily fixed income securities and generally held to maturity Investments can be sold prior to maturity as long as it can be demonstrated to be in the best interests of the County Investments will not be sold based on projected interest rate movements 11 Pooling of fund groups for the purposes of investment is approved and allowed Page 27 0 c: 0 Authorized Investment Instruments Funds of the County may be invested in any of the securities authorized by Section 250 (a) to (d), Municipal Government Act with a minimum (DBRS) Dominion Bond Rating Service of R 1 or AAA Internal Accounting Controls The Investment Officer, shall prepare a system of internal accounting controls which shall be documented in writing The controls shall be designed to prevent losses of public funds ansing from fraud employee error, misrepresentation by third parties, unanticipated changes in financial markets or imprudent actions by employees and officials of the County Controls deemed most important include control of collusion, segregation of duties segregation of transaction authority from accounting and record keeping, custodial safekeeping, avoidance of bearer form securities, clear delegation of authority specific limitations regarding securities losses and remedial action, approved written confirmation of telephone transactions documentation of transactions and strategies and code of ethics standards Investments will be valued and accounted for according to Generally Accepted Accounting Principles Mature County funds except funds accumulated for debt service, Road renewal and replacement and operating contingency shall be invested only in investments whose maturities do not exceed three years at the time of purchase Debt service funds may be invested for a period not to exceed two years Capital funds may be invested for a period not to exceed three years Road Renewal and Replacement Funds and Contingency Funds may be invested for a period not to exceed seven years In addition, the weighted average maturity of the overall portfolio, excluding those investments held for future major capital expenditures (construction funds), debt service, and Road renewal and replacement shall not exceed two years Diversification It is the policy of the County to diversify its investment portfolio All funds shall be diversified to eliminate the risk of loss resulting from over concentration of assets in a specific maturity a specific issuer or a specific class of securities In establishing specific diversification strategies, the following general policies and constraints shall apply 1 Portfolio maturities shall be staggered in a way that avoids undue concentration of assets in a specific maturity sector Maturities shall be selected which provide for stability of income and reasonable liquidity 2 Liquidity shall be maintained through practices that ensure that the liquidity needs of the next disbursement date and payroll date are covered through maturing investments or marketable securities 3 Risks of market price volatility shall be limited through maturity diversification Page 28 • W 0 4 The following diversification limitations shall be unposed on the portfolio a Maturity No more than 25% of the portfolio, excluding those investments held for future mayor capital expenditures, debt service payments, may be invested beyond twenty four (24) months and the average maturity of the overall portfolio, with the previous exception shall not exceed two years b Risk Default Stringent restrictions on legally authorized investments and the legal requirements for full collateralization severely reduce the potential of default risk Nonetheless no more than 50% of the overall portfolio may be invested in time deposits, including certificates of deposit, of a single issuer unless 100% guaranteed. Marketability At least 15% of the portfolio, excluding those investments held for future major capital expenditures, debt service payments, bond fund reserve accounts, and capitalized interest funds, shall be invested in overnight instruments or in marketable securities which can be sold to raise cash within one day's notice Risk Tolerance The County recognizes that investment risks can result from issuer defaults, market price changes or various technical complications leading to temporary liquidity Portfolio diversification is employed as a way to control risk The Investment Officer is expected to display prudence in the selection of securities as a way to minimize default risk. No individual investment transaction shall be undertaken which jeopardizes the total capital position of the overall portfolio In addition to these general policy considerations the following specific policies will be strictly observed 1 All investment funds will be placed directly with qualified financial institutions 2 All transactions will be settled on delivery versus payment basis 3 The County will not enter into reverse repurchase agreements or trade in options or future contract 4 A competitive bid process will be used to place government security purchases or sales Based on an annual evaluation, banks and securities dealers will be dropped from or continued on the eligibility list The following criteria will be used in the annual evaluation a. number of transactions competitively won, b prompt and accurate confirmation of transactions, c efficient securities delivery, d accurate market information, e account servicing f moral character and public ethics of both broker and firm Page 29 00 • g trading history Safekeepin , and Custody To protect against potential fraud and embezzlement, the financial assets of the County shall be secured through safekeeping procedures County employees shall be bonded to protect the public against possible embezzlement and malfeasance Policv of Securing Deposits of County Funds Applicable to all Deposited Coun Funds 1 Only Alberta Credit Unions are insured by the Province of Alberta for 100% of its member's deposits The County recognizes that CDIC (or its successor) insurance is available for County funds deposited at any other Financial Institution (including branch banks) only up to a maximum of $60,000 (including accrued interest) for each of the following (i) demand deposits, (ii) time and savings deposits, and (iii) deposits made pursuant to an indenture or pursuant to law in order to pay bondholders or noteholders It is the policy of the County that all deposited funds in each of the County's accounts shall be insured by the CDIC, or its successor unless 100% guaranteed by the Province 2 Certificates of deposit, to the extent that they are not insured, may be secured by any securities allowed under the Investment Act and depository contract 3 Demand deposits (for example, checking accounts) and savings accounts, to the extent that they are not insured, may be secured by any securities allowed under the Collateral Act Investment Policy Review The Investment Policy shall be formally reviewed and approved by Council when amendments are made or at least annually INVESTMENT STRATEGIES FOR FUNDS General Fund Group The County's operating expenditures and the revenues to fund those expenditures are accounted for in the County's general fund The general fund is also used to account for revenues restricted by statute for debt service funds and to account for the accumulation of resources for public improvement contingencies Most of the general fund is pooled with other County funds for investment purposes The amount restricted for the Contingency Fund is invested in the County's pooled investments The debt service funds included within the general fund classification are not pooled with other County funds for investment purposes and should be invested in compliance with the strategies for Debt Service Funds. Short term borrowing may be necessary during the fiscal year for the general fund operating expenditures to cover negative cash positions until ad valorem tax receipts are received The average duration of the investments relating to the general fund operating activity is to be one year or less Debt Service Funds The debt service funds including those reported in the County's financial reports within the general fund, are used to account for the accumulation of resources to fund periodic Page 30 principal and interest payments on outstanding obligations The revenue stream is predictable and the majority comes from ad valorem tax and special purpose revenues The average duration is rune months or less for these funds Most of these debt service funds are not pooled with other funds for investment purposes I! Capital Project Funds Capital project funds for the County are used to account for construction and other nonrecurring capital expenditure activity Investment of most of these funds results in a maximum duration of three years for the investments Propriety Funds The County's Road project is also accounted for as a proprietary type fund with investments restricted by a trust indenture executed in connection with the financing of the project The duration of the investments is generally three years or less, with the exception of the bond reserve and Road renewal and replacement funds, which are invested with an average duration of five years or less ,I Page 31 is 61, Municipal Government W.A' Board (MGB) LETTER OF ACKNOWLEDGEMENT November 05, 2003 C Frank Grills AMAA Assessor Kneehill County 232 Main Street Post Office Box 400 Three Hills, Alberta TOM 2A0 15th floor, Commerce Place 10155 102 Street Edmonton Alberta Canada T5J 41.4 Tel 780.427.4864 Fax 780.427.0986 Re Request to be Lranted intervener status in appeals for Throughput Grain Elevators The Municipal Government Board (MGB) hereby acknowledges receipt of your letter of November 03, 2003, in which you request to be granted intervener status in any and all appeals for Throughput Grain Elevators Don Marchand of our office is case managing your request, you may contact him for further information at 427 — 4864 Please note that the MGB requires council authorization to become an intervener in this and similar matters The MGB asks that a copy of the Council Motion be forwarded by November 30, 2003 Muni al Government Board