Despite a slight increase in 2011, investment returns for the city of Port Coquitlam remain at historically low levels, according to a staff report.
Last year the city managed a 1.88% rate of return on cash reserves it has invested with the municipal finance authority, up from 1.44% in 2010.
But with current market conditions, small returns on investment dollars may be something the municipality has to become accustomed to, according to Mindy Smith, PoCo's director of corporate services.
"This is kind of the new normal," she said. "It has been like this for years. We do continue to watch the markets. It if makes sense and we see a good product to purchase for a longer term investment, we do take advantage."
Municipalities are limited in what type of investments they are allowed to make. Port Coquitlam, for example, invests mainly in low risk bonds with the provincial and federal government and secured bonds with banks.
The city also put money into the Municipal Finance Authority, which has a broader range of investment opportunities.
"Those are really secure but there is less risk and less return," she said.
Since the economic downturn in 2008, Port Coquitlam has focused more on short-term investments, with the hopes that a return to market normalcy could help boost city revenues.
In 2011 more than $65 million was placed in short-term investments, compared to approximately $3 million in longer-term (greater than 365 days) investments, according to the city's investment report.
Close to $20 million remains in cash and cash equivalents.
