The city will have $50M-plus to think about in August

When the City of Peterborough first got serious about what it would do with roughly $50 million from the sale of a chunk of its public utility company, two options were considered.

One was to return the $50 million to $55 million to the utility company to be invested in new alternative energy projects.

Option 2 was to create a legacy fund with the money managed by a nonprofit investment firm, One Investment, that specializes in handling money for municipalities.

Four more proposals have since cropped up.

There is no great rush to choose one, or more, of the six options. But the cheque is set to arrive Aug. 4 and a couple of percentage points on $50 million is a sizeable amount, so dilly-dallying cannot be tolerated either.

Last week council made one key commitment: the entire amount would be invested and only the returns spent. It also struck a working group of council members and city staff that will recommend which option, or options, to pursue.

There are two considerations at work: How to invest the money and how to spend it.

The original two options and one new one are about investment only. They would produce a return and council could decide how it wanted to spend the cash.

The other three, to varying degrees, are asking for control over how the money would be spent. Another wrinkle is that one is asking for just 20 per cent of the proceeds, about $10 million, leaving the rest for one of the other options.

When there were just two choices we preferred turning the money over to the utility, known as City of Peterborough Holdings Inc. (COPHI), to invest in renewable energy projects. Nothing in the four new proposals has changed our mind.

COPHI’s annual dividend payment to the city has grown to $6 million There is no reason to doubt it could return six per cent on the $50 million while delivering a 100 per cent “green” investment that fits the city’s stated, and necessary, goal of reducing climate change impacts.

One investment is just as safe but not as lucrative — the firm suggests a three per cent return — or as environmentally effective.

Two of the remaining four should be dropped from consideration. Transition Town Peterborough’s proposal goes beyond its ability to deliver, creates a new layer of administration and calls for nearly $3 million in annual contributions from city taxpayers.

BMO Nesbitt Burns is a for-profit investment firm. If the city wants to go that way it would have to allow any competing firms to bid.

Alan Slavin, a retired Trent professor and respected environmental activist, proposed all investment revenue be used to help homeowners retrofit their homes for energy efficiency. If council agrees, it could use the COPHI dividend that way.

The final hopeful, the Peterborough Community Foundation, would create a roughly $10-million fund with annual income going to social causes.

That’s an interesting idea with some underlying effects.

The foundation is a successful local nonprofit fundraiser and philanthropic organization that struggles to meet its administration costs.

It proposes to use $150,000 of the revenue from a $10-million fund for its own costs, and still return $500,000 to be handed out to local nonprofits and community projects.

The city could provide stable footing to an effective community agency and have $40 million left to invest in COPHI.