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Investment Policy

Purpose

This policy is established to ensure that Idea Exchange (IE) funds including, but not limited to, operating, reserve and trust funds are invested to provide optimal returns with a prudent level of risk as approved by the Library Board.  The policy provides principles and guidelines designed to ensure that funds are invested in such a manner that both liquidity and growth are met and assets are protected.

Scope

This policy guides the actions of the Library Board, Chief Executive Officer (CEO) and Director, Finance and Facilities.

Definitions

Liquidity means measure of an asset’s convertibility to cash.

Invest means to allocate money in the expectation of some benefit in the future.

Canadian Deposit Insurance Corporation (CDIC) is a Government of Canada crown corporation that contributes to the stability of the Canadian financial system by providing deposit insurance against the loss of eligible deposits at member institutions in the event of failure.

Discretionary Funds mean funds which are not required to support the immediate ongoing cash requirements of the organization.

Policy

  1. Idea Exchange’s main objective is to invest discretionary funds with the care, skill, diligence and judgement that a prudent person in similar circumstances would exercise in making investments.

  2. The objectives of this Investment Policy are to:

    • Protect assets – minimize the risk of incurring a capital loss and preserve the value of invested principal.
    • Maintain liquidity – investments shall be managed to minimize cash flow risk so as to meet reasonably anticipated fiscal operating requirements.
    • Minimization of Risk - all attempts shall be made to minimize risks inherent in investment through diversification so as to eliminate the risk of loss resulting from an over-concentration of funds in a specific maturity, issuer, industry or class of securities.
    • Maximization of Income – investment yields that maximize returns as is reasonable and prudently achievable within defined parameters.
  3. Funds

    Idea Exchange maintains the following funds:

    • Operating Funds – budgeted income and expenses monies used for operating requirements.
    • Reserve Funds – monies set aside to meet future costs or financial obligations as authorized by the Library Board.
    • Trust Funds – contributions received from donors or from fundraising activities or any other contribution authorized by the Library Board.  Trust funds may be restricted for a particular use or unrestricted as to use.
  4. Responsibility

    The directing and monitoring of IE’s investments will be the responsibility of the Director, Finance and Facilities, in consultation with the CEO, as authorized by the Library Board.

    The Library Board may delegate some of its responsibilities with respect to the investments to agents and advisors.

  5. The Cambridge and North Dumfries Community Foundation (CNDCF)

    The Library Board has established Managed Funds with CDNCF.  The Managed Funds have been established to invest a portion of the Library Trust Funds.  These investments are managed in accordance with the written agreement between the Library Board and the CNDCF the CNDCF Investment Policy.

  6. Investing Guidelines

    The Director, Finance and Facilities will invest discretionary funds as follows:

    • Operating Funds that are in excess of monthly operating expenditures will be held with the organization’s CDIC insured commercial financial institution in an interest bearing savings account,  Certificates of Deposit, Term Deposits or Guaranteed Investment Certificates (GIC).
    • Reserve Funds will be held by the Corporation of the City of Cambridge (City) and will be invested in accordance with the Municipal Act.
    • Trust Funds will be held by either:
      • The City and will be invested in accordance with the Municipal Act.
      • The Cambridge and North Dumfries Community Foundation and will be invested in accordance with the CNDCF Investment Policy.
    • Investment Income – any investment income, net of costs, shall be credited to the fund balance that generated the income.
  7. Reporting

    The CNDCF will provide quarterly reports to the Library Board.  This report will include portfolio transactions, balances (market values), asset mix information, management fees expenses, income, and realized and unrealized gains.  The CNDCF will provide annual audited financial statements to the Library Board and any updated investment policies of the CNDCF.  At the discretion of the Library Board, a representative of the CNDFC may meet with the Board.

    The City will provide an annual report to the Director, Finance and Facilities detailing Reserve and Trust Fund balances and income. 

    The Library Board will be provided with the annual audited financial statements which include summary information on fund investment transactions and balances.  In addition, the Director, Finance and Facilities, will provide the Library Board with an annual report detailing Trust Fund transactions and balances including restricted and unrestricted amounts.  Should more detailed information be required by the Library Board on any Fund, the Director, Finance and Facilities, will be responsible to prepare a suitable report. 

  8. Review

    This policy will be reviewed bi-annually by the Library Board with recommendations from the C.E.O. and Director, Finance and Facilities. 

 

Adopted: November 28, 2018 (Board Motion 18.66)