McMinnville officials weigh modernizing 1989 investment policy, hiring adviser via intergovernmental contract

Finance Director Katie Henry told the City Council at a work session that McMinnville's existing investment policy, last reviewed in January 1989, limits the city to very short maturities and prevents the city from investing funds for long-term utilities and capital projects.

"Our maximum maturity for our investments is 18 months," Henry said, adding that the policy "emphasizes our cash flow and liquidity over making money over the long term." She recommended rewriting the policy to allow more diversification, to submit the revised policy to the Oregon Short Term Fund Board for review, and to retain outside assistance for portfolio implementation.

Henry introduced Diane Woodring of Government Portfolio Advisors (GPA), who described GPA's services to Oregon local governments and recommended a balanced portfolio that preserves safety and liquidity while extending average maturities to capture higher yields. "The policy again will be aligned to where the city council is the the main fiduciaries with the delegations of duties to the finance committee," Woodring said, describing a process that would include a policy update, cash-flow analysis by fund, and a move into investing once policy and strategy are set.

Woodring said GPA manages public-sector portfolios and provides compliance reporting, custody integration and staff training. She described a two-phase approach: (1) update the city's policy and secure Oregon Short Term Fund Board review, and (2) implement an investment program tailored to the city's cash-flow needs. She also discussed typical fees: a setup/first-year fee and an ongoing asset-based fee (discussed in the meeting as a first-year setup around $15,000 and an ongoing basis-point fee that the presenter said would be drawn from interest earnings).

Councilors pressed staff on procurement and vendor selection. Several councilors said they were uneasy with the plan to "piggyback" on RFPs run by other cities rather than soliciting multiple vendors locally. Councilor Chenoweth asked whether the adviser's services "pay for themselves." Woodring replied that the goal is to improve earnings through execution and access to brokers, and that GPA would not include markups in trade execution. Councilors asked for historic performance examples and for procurement documents from cities that previously ran RFPs (Woodring said she would provide the previous solicitation responses from Gresham and Albany).

Interim City Manager Adam Garvin and Finance Director Henry said the next steps would be to gather procurement materials and bring a contract forward at a regular meeting for council consideration. Henry told council the investor services and fees are not currently budgeted and that a supplemental budget request would be submitted in September if council decided to proceed.

Why it matters: McMinnville is seeking flexibility to invest for long-lived utility and capital needs, including wastewater and potential stormwater funds. Under the current policy the city cannot ladder maturities to match project timelines, potentially leaving interest earnings on the table.

What council asked for next: councilors asked staff to provide (a) the RFP responses from other Oregon cities used for piggyback procurement; (b) performance data from other GPA clients showing value added; and (c) documentation on alternative vendors, including any Oregon-based firms. Staff committed to return with the procurement paperwork and a contract review in a future regular-session agenda.

Ending: Finance staff said they will prepare a procurement package and a supplemental budget request for council consideration; no contract was signed at the meeting.