City treasurer reports strong fiscal-year 2024 investment returns; portfolio remains compliant with state law

The Boca Raton City Council received the city’s annual investment report for fiscal year 2024 on March 17, with Treasury Manager Conahan reporting a 4.28% amortized return for the portfolio measured Oct. 1, 2023 through Sept. 30, 2024.

Conahan told the council the city’s investment policy — most recently updated in September — and Florida law (Florida Statute Chapter 218, Part IV) guide the portfolio. He said the city stayed within its policy allocation limits and that the portfolio’s composition favored longer-duration fixed-income, particularly U.S. government-sponsored enterprise securities, during the fiscal year.

Conahan explained staff’s approach: for fiscal 2024 the city increased holdings with 3–5 year maturities and purchased “bullet investments” intended to lock in yields for multiple years amid uncertain Federal Reserve decisions. He said the portfolio’s total return benefited from unrealized gains at the Sept. 30 measurement point because yields had been declining late in the fiscal year.

“As of Sept. 30, we achieved very strong returns for fiscal year 2024,” Conahan said, noting the 4.28% amortized return versus 3.09% the prior year. He cautioned the council that market sentiment shifted after the measurement date and that current-year yields were lower than the FY24 peak.

Councilmembers asked questions about where the city holds money and whether the portfolio includes international investments. Conahan said the city uses a third-party custodian and that money-market funds held temporarily in the custodian account are currently with the principal bank. He clarified the report covers city-held investments (general fund, utilities and other non-pension assets) and does not include pension assets, which are governed by separate pension boards and policies.

When asked about foreign holdings, Conahan said the city’s policy permits Israel bonds and that outside of a small position in Israel bonds the city’s investable holdings are domestically focused fixed-income; the report contains no equities from the city portfolio. He added that corporate bond names may reflect U.S.-based financing affiliates of multinational firms (for example, Toyota Motor Credit Corporation), which are not foreign-issued debt in the portfolio.

Councilmember Wicker asked staff to provide more-detailed holdings information; staff and the Financial Advisory Board have already reviewed the detailed positions, and staff said it would make the more granular report available to council members on request.

No action was taken; the presentation was informational and the city retains existing investment guidelines while continuing to monitor interest-rate and market developments.