Board of Finance elects officers, hears First Source review and backs four-year investment ordinance structure

The Board of Finance elected Sheila Naskowski president and Terry Warner secretary during an organizational meeting and annual review of the city's investment portfolio. The board also reviewed a presentation from First Source Bank on the city's portfolio and forwarded an ordinance (Bill 4-25) that would adopt a four-year framework for the city's investment policy to the Committee of the Whole with a favorable recommendation.

The meeting opened with roll call and nomination votes. A motion to elect Sheila Naskowski as board president passed by roll call: eight ayes, one nay (Council Member Bowden Simpson). A subsequent vote to elect Terry Warner as secretary passed unanimously in the roll call recorded by the clerk.

The board then heard Paul Gifford, chief investment officer at First Source Bank, summarize the portfolio the bank manages for the city. He said the account is approximately $200,000,000 and is currently invested roughly 61 percent in cash instruments (certificates of deposit or government money-market funds) and about 39 percent in government securities such as U.S. Treasuries and agency bonds. "For the first time in about 15 years, you're actually earning a rate of return above inflation," Gifford said, adding that recent portfolio performance produced about a 5.15 percent return over the last year and roughly $6.9 million in interest paid back to the city in that period.

Gifford told the board that the portfolio's near-term performance is tied to Federal Reserve policy: short-term money-market returns can move quickly when the Fed changes rates. He described his current strategy as letting bonds mature and reinvesting proceeds at prevailing rates while selectively buying CDs when bank deposit demand pushes CD yields above Treasuries.

City Attorney Jenna Throws briefed the committee on Bill 4-25, an ordinance that would authorize the categories of investments the council must approve by ordinance for up to four years while leaving annually authorized items to be adopted by resolution. "In reviewing the statute more closely ... we noticed that the statute actually authorizes the council to adopt an investment policy by ordinance for a period of up to four years," Throws said, explaining the change is procedural: categories that must be set by ordinance would be adopted for four years and other categories would be handled more frequently by resolution when needed.

After discussion there were no public speakers. Committee members moved to send Bill 4-25 to the Committee of the Whole with a favorable recommendation; the committee recorded four ayes.

Lede context: the presentation and discussion were part of the board's routine annual review; the ordinance change aims to match the council's adoption process with what the city attorney said the statute permits. The board did not change portfolio allocations at the meeting; First Source reiterated it will continue to manage investments within the policy and state law.

The board adjourned after the votes and the routine investment-review discussion. Members were told quarters will continue to have virtual briefings from First Source Bank and the controller's office if councilors wish to join.