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Farmers Branch council tables vote to add TexSTAR and LOGIC to investment policy after questions about fund managers
Summary
The City Council discussed amending its investment policy to add two local government investment pools — TexSTAR and LOGIC — but voted unanimously to table action to the June 3 meeting after members asked for more information and for a representative from JPMorgan Chase, the funds' active manager.
The Farmers Branch City Council on May 20 discussed amending the city's investment policy to allow the use of two additional local government investment pools, TexSTAR and the Local Government Investment Cooperative (LOGIC), but voted to table the related resolutions to the June 3 meeting.
The item drew extended questions about how the funds would be managed and whether the city’s investment strategy would be active or passive. Lynn Huddleston, representing the finance department, told council that Hilltop Securities has reviewed the policy and that the city uses an external adviser; she also said the city currently uses short-term pools for about 20% of its investments. Huddleston said Hilltop has been the city's financial adviser since 1999.
Council members asked for clarity on operational details before approving pool participation. A council member asked whether the funds would be managed with an active or passive strategy and requested that a representative from JPMorgan Chase — described in the meeting as the active manager for the funds — appear to answer specific operational and portfolio questions. Huddleston offered to provide a more detailed portfolio packet (roughly 35–40 pages) and to arrange for JPMorgan to attend.
Finance staff provided current reported yields during the discussion: a short-term pool referenced in the meeting as TexPool at about 4.3%, TexSTAR about 4.28%, and LOGIC about 4.42%. Council members said those yield differences reinforced the value of having flexibility, but they pressed for clearer written descriptions of the funds’ management, risks, and exactly how the city’s Investment Policy Statement would be implemented by outside managers.
Formal action: the council moved, seconded, and voted unanimously to table three related items — the investment policy adoption and the two pool participation resolutions — to the June 3 meeting so staff could supply the additional portfolio materials and arrange for the funds’ manager to appear.
Why it matters: changing short-term investment vehicles affects cash-management flexibility and the city’s interest income. Council members said they wanted to avoid approving policy language that could be interpreted differently by an external manager than staff intends.
What comes next: staff will provide the detailed portfolio documents and attempt to schedule a representative from JPMorgan Chase for the June 3 meeting, per council direction.
