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Finance director outlines conservative investment approach; council asks about active management options
Summary
Finance Director Chelsea Walls reviewed the city’s investment practices, noting primary use of the Local Government Investment Pool and two 12‑month certificates of deposit; a council member asked about higher‑yield asset management options and Walls noted tradeoffs in fees and liquidity.
Chelsea Walls, the city’s finance director, briefed the Spokane Valley City Council on May 6 about the city’s investment policy and current holdings. Walls said the city uses the Washington Local Government Investment Pool (LGIP) for most funds and maintains two 12‑month certificates of deposit at qualified public depositaries.
Policy and objectives: Walls cited the city’s Banking Authority resolution (Resolution 2042, Banking Authority) that designates officials authorized to invest city funds and to sign on behalf of the city. She emphasized the LGIP’s stated priorities — safety, liquidity and return — and said the city’s practice and budgeting assume conservative stewardship to protect public funds and to maintain cash flow flexibility.
Current yields and instruments: Walls told council the LGIP yield at the time of the meeting was about 4.4%. The two 12‑month CDs held by the city produced quoted yields in the mid‑4% range (Walls referenced rates approximately 4.25%–4.23% for the CDs). She explained the city solicits quotes from qualified public depositaries when CDs mature and awards them to the highest interest rate among qualified institutions.
Active management question: Councilmember McWick asked whether the city could pursue an asset management arrangement to chase higher yields; Walls said such arrangements can show higher nominal returns but involve higher fees and reduced liquidity and require staff time and oversight. She said staff would evaluate tradeoffs — yield net of fees, administrative burden and liquidity needs — before recommending any shift from the LGIP.
Ending: No policy change was approved at the meeting. Walls said she would provide further information and comparative analysis if council wished to evaluate the costs and benefits of third‑party asset management versus the LGIP.
