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Redcliff opts for more aggressive investment strategy

Posted on January 19, 2016 by 40 Mile Commentator

By Tim Kalinowski
Redcliff town council voted to change the town’s investment policy to allow the community to invest in higher risk/ higher return bonds at last Monday’s meeting. The numbers were presented by the town’s Director of Finance Jenny Tu.
Redcliff has only been getting approximately 1.2 per cent return on its basic GIC bonds. With the financial pressures facing the town, most councillors were in agreement that a little more risk in the investment portfolio was warranted at this time. The final vote was 5-1 in favour of adopting a more aggressive investment strategy.
However, local businessman Coun. Larry Leipert was opposed to the move. He explained his thinking to the Courier after recording his “nay” vote.
“What could possibly go wrong with that?” asked Leipert sarcastically. “Basically, I think with the economic situation with investments right now, it’s a good possibility you could lose even a very good rated bond or rated investment. Everybody seems to have investments, and if you look at your investments right now they are not doing that well.”
Leipert acknowledged communities investing even their operating capital in short term bonds has become the norm through much of Alberta in recent years, but he wasn’t sold on the benefits of this more aggressive strategy for Redcliff.
“This is too big of a step up. To go into a riskier portfolio is what I am concerned with,” said Leipert.
Redcliff mayor Ernie Reimer voted in favour of the new investment policy. He did not feel the risks were out of line with what other communities are taking already.
“As opposed to the low interest rate we have been commonly getting in the past with our investments, I think this is a good step forward for the Town of Redcliff to try and get extra monies for investment purposes. I don’t know if the risks are all that great. I am not understanding finance that well, but I don’t think what we have done is all that different from what other communities and cities are doing right now,” Reimer said.

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