Romulus treasurer presents quarterly investment report; PFM notes lower near‑term yields under current Fed policy

The Romulus treasurer on Oct. 27 presented a quarterly investment report for the period ending June 30, 2025, delivered by PFM representative Grama Lepley. The combined city portfolio was reported at approximately $85.8 million as of June 30, with roughly $37.1 million managed actively by the city’s advisor.

Lepley told the council the portfolio returned about 5.87% over the past year and that the three‑month total‑dollar return equated to roughly $500,000 for the quarter. She said the portfolio outperformed the 0–5 year Treasury benchmark by about 12 basis points for the quarter and that investments remained concentrated in short‑ to intermediate‑term, highly rated sectors (principally double‑A and AA+ ratings on agencies and short‑term funds).

The presentation noted broader market context: inflation remained elevated (about 3% per the presenter), the unemployment rate was about 4.3%, and federal reports were limited by an ongoing federal government shutdown. Lepley said the Federal Reserve cut rates 25 basis points in September to a 4.0%–4.25% range and that further rate cuts were expected to be priced into markets, which would reduce near‑term interest income on short‑term investments.

Council members asked why the city does not invest in equities, cryptocurrencies or other higher‑yielding assets. Lepley and the treasurer explained that Michigan’s Public Act 20 and the city’s investment policy constrain allowable investments to highly rated, liquid debt instruments (treasuries, federal agencies, certain bank deposits/local government investment pools, and high‑quality commercial paper with short maturities). The treasurer emphasized the city follows three priorities in order: safety, liquidity, then return.

Lepley showed the portfolio’s sector and duration distribution and noted strategic increases in commercial paper during the quarter to capture short‑term yield; the report also showed net sales of federal agencies into commercial paper and a duration posture with allocations in the 0–1 year and 3–4 year buckets. Accrual‑basis earnings for the quarter were shown at approximately $400,000, with longer‑term accumulated returns noted on a 10‑year time horizon.

Council discussion was limited and the presentation was accepted; the treasurer said future study sessions would continue to provide detail on investments as needed. The presentation clarified the city’s adherence to state law and its own investment policy, and it explained why higher‑risk asset classes are not permissible for the city portfolio.

Ending: The council accepted the treasurer’s report with no follow-up votes recorded at the meeting; the treasurer and PFM will continue to brief council at study sessions.