Wicomico County moves to modernize investment policy after 1998 update; council asks questions on liquidity and risk

Wicomico County finance officials on Feb. 18 presented a proposed overhaul of the county's investment policy, which has not been substantially updated since 1998. The draft policy updates allowed instruments, introduces diversification guidance consistent with Government Finance Officers Association (GFOA) recommendations and enables staff to work with an advisory firm for portfolio construction and custody services.

Deputy Finance Director Charles Schmeickel said the county currently places most short-term cash in the Maryland Local Government Investment Pool (MLGIP) and that rising market rates create an opportunity to lock stronger yields for some county funds if done prudently. The proposed policy adds permissible instruments (for example, repurchase agreements, agency notes, certificates of deposit and limited mortgage-backed securities) with percentage‑of‑portfolio caps, and it would allow the county's advisor to stagger longer-term purchases to avoid maturity cliffs and preserve liquidity for operating needs.

Council members pressed staff on key safeguards: minimum credit ratings for counterparties, limits on exposure to single institutions, liquidity needs for the county's operating accounts, and the process for selecting an advisory/custodial firm. Finance staff said the next steps would include issuing an RFP for advisory and custodial services and returning with a resolution to adopt the revised investment policy and appoint an adviser.

The council did not take a vote on the policy but generally signaled support for modernizing the policy while requiring clear credit, diversification and liquidity protections. Staff said they would bring a final resolution for adoption after RFP responses and input from the county's bond counsel and investment advisor.