The City of Kelowna’s investment portfolio continues to benefit from high interest rates set out by the Bank of Canada.
Interest rates, which have soared from almost nil during COVID to five per cent in the summer have been a boon to the city’s investments.
The city’s portfolio, which includes short and long-term investments as well as cash on hand has inched closer to the $1 billion threshold.
At the end of 2023, investments sat at $950.5 million, up by nearly $160 million just a year previous.
“The Bank of Canada started raising interest rates in 2022 and the city has garnered favourable interest rates as a result of the increases in 2022 and 2023,” financial planning manager Melanie Antunes told council Monday.
“The city still expects to be able to cycle low interest investment vehicles into higher rate investment vehicles as investments mature throughout 2024 and beyond.
With the prospect of interest rates beginning to recede later this year Altunes says the city’s return on investment will continue its upward direction, but at a more moderate pace that the past year.
The city presently has $295.5 million in short term investments which mature in less than a year, $493.5 million is long-term investments maturing in one to 10 years and another $159.4 million in the city’s endowment fund created through the sale of its electric utility.
While the city appears to be flush with cash, much of it is already earmarked for specific purposes.
Finance director Joe Sass says investments are made up of a “number of different reserve funds,” including development cost charges, grant funds from senior levels of government and various other funds not at the discretion of staff or council.
The City of Kelowna’s investment portfolio reached a little more than $950 million at the end of 2023.
That’s nearly $160 million more than the city had in investments and cash a year earlier.
