Item - 2017.EX23.2

The Executive Committee recommends that:

1.  City Council establish an Investment Board and delegate its authority to the Board to manage and oversee the City's investments of funds not immediately required by the City, as is required by Regulation 610/06, Financial Activities, under the City of Toronto Act, 2006 and pursuant to the governance structure outlined in Attachment 1 to the report (February 21, 2017) from the City Manager and the Deputy City Manager and Chief Financial Officer.

2.  City Council direct that a separate Toronto Municipal Code Chapter be established for the Investment Board substantially as provided for in Attachment 1 to the report (February 21, 2017) from the City Manager and the Deputy City Manager and Chief Financial Officer, and authorize the City Solicitor to bring forward the necessary bills.

3.  City Council authorize the City Clerk to initiate a recruitment process for Investment Board members for review by the Facilities and Finance Nominating Panel for recommendation of appointment by City Council.

4.  City Council direct the City Clerk to provide secretariat support to the Investment Board.

5.  City Council direct the Deputy City Manager and Chief Financial Officer to support the implementation and ongoing maintenance of the Investment Board.

6.  City Council approve an interim 2017 budget of $557,500 for the Investment Board as detailed in Attachment 2 to the report (February 21, 2017) from the City Manager and the Deputy City Manager and Chief Financial Officer, and funded from non-program investment income.

7.  City Council request the Integrity Commissioner to review the Code of Conduct for Local Boards and recommend any required amendments to the Code of Conduct for the Investment Board given its fiduciary responsibilities.

8.  City Council dissolve the Independent Investment Advisory Committee effective December 31, 2017.

This report recommends that City Council establish an Investment Board (the Board) to manage and invest City funds which are not immediately required, pursuant to Regulation 610/06, Financial Activities, of the City of Toronto Act, 2006. This Regulation comes into force on January 1, 2018 and introduces much greater flexibility with the City's investment powers but prescribes that City Council must exercise this expanded authority through a City Investment Board.

The Board is required to exercise its investment authorities pursuant to the prudent investor standard and in compliance with an Investment Policy approved by City Council. The prudent investor standard sets parameters for those entrusted with the responsibility of managing others' money, and requires that they weigh risk versus reward when making investment decisions, taking into account the income that may be generated by the investment as well as the probable safety of the invested capital.

This report recommends the governance structure for the Investment Board including mandate and responsibilities, composition and eligibility, qualifications of members and Chair, remuneration, term and appointment process and accountability and reporting.

Lastly, the dissolution of the Independent Investment Advisory Committee, established in April 2011 to advise the Deputy City Manager and Chief Financial Officer on portfolio strategies and governance issues for the City's investment portfolios, is recommended as the Investment Board will now have responsibility for managing and investing the City's portfolios.