Finance staff reports Q1 2025 investment portfolio: county funds shift to treasuries and LGIP for liquidity

Joe Bartlemais of the City of Kent finance department presented the city's first-quarter 2025 investment report to the Committee of the Whole on June 17. He said the city's total cash and investment portfolio at the end of Q1 2025 was about $383.5 million, with material balances held in a Washington State Local Government Investment Pool (LGIP) and a laddered long-term portfolio.

Bartlemais said the portfolio structure is: approximately $4.9 million in bank cash (earning an earnings credit to offset bank fees), roughly $119.4 million in the short-term LGIP (overnight liquidity, yield ~4.4%), and a long-term portfolio with an average yield around 3.38% and a market value near $258.2 million. He reported a roughly 47% allocation to U.S. Treasuries within the long-term portfolio and described a laddered maturity profile with an average maturity of about 879 days for the long-term holdings.

The finance presentation noted that the city incrementally increased the long-term portfolio in 2024 to take advantage of higher yields, and that fund balances were drawn down last year to pay for large projects including an administrative services building and the Keahok project and ARPA fund expenditures. The Q1 2025 trajectory was reported as tracking close to 2024 levels for the first quarter. Bartlemais said all investments were within established policy limits.

Council members praised the finance team and asked about allocations to corporate securities versus treasuries; staff responded that advisors (PFM) evaluate maturing investments to determine best value and that corporates sometimes offer incremental yield, though treasuries have comprised a larger share recently.

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