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Board discusses investment policy, WSSI agreement; defers immediate changes to fiscal committee
Summary
Board members reviewed Reston Association investment holdings and an agreement (WSSI) that requires a stream-cap fund be invested 80% equities/20% fixed income; staff recommended further study and fiscal committee review rather than immediate reallocation.
Reston Association finance staff reported to the board on June 26 that the association's investment accounts are performing above recent budgets and that a requirement in the WSSI agreement constrains how the stream/wetlands catastrophe fund ("cap fund") is allocated.
Finance staff said RA holds roughly $4.3 million in its Bridal RF account (managed by "Rafa") and almost $1.5 million in the stream/wetlands cap fund; together, those accounts are a minority share of RA's overall liquidity. Staff reported interest and dividend receipts well above prior years and said RA has increased interest revenue by keeping more funds in higher-yield accounts and laddered Treasury bills.
Discussion turned to a term in the WSSI (Wetlands/Streams restoration) agreement added in 2012 that requires the cap fund to be invested 80% in equities and 20% in fixed income. Several board members said that allocation is higher risk than they expected for a fund intended to be available after catastrophe. Finance staff and the board's finance committee suggested the association could try to renegotiate the WSSI provision with the Army Corps of Engineers and the Virginia Department of Environmental Quality, but that would require negotiation with those signatories. Staff recommended more time for research, a fresh risk-tolerance survey for the board, and deeper review by the fiscal committee before making changes to Resolution 6 (the association's investment policy).
Directors asked staff to return with a recommendation and with a schedule for a risk-tolerance survey and fiscal-committee review; the board did not approve an immediate reallocation at the meeting.
