Committee hears plan to invest $14 million in referendum proceeds; second $11 million planned

A district finance staff member told the Manitowoc School District finance and facilities committee on Aug. 5 that $14,000,000 in referendum debt was drawn July 10 and will be invested while projects proceed. The district is working with financial adviser PMA to create a draw schedule that will guide short-term investment and liquidity needs.

PMA, represented to the group by a representative named Matt, will allocate funds among three primary tools: money-market funds (overnight instruments), U.S. Treasury securities and FDIC-insured certificates of deposit, the staff member said. "They're going to take what's created as a draw schedule and figure out what investment tools are going to fit in best to do that," the staff member said.

The staff member said market conditions and Federal Reserve decisions will affect near-term yields. He described current overnight money-market rates in the roughly 4.25%–4.5% range and said recent Fed decisions and economic data have shifted short-term expectations. He added that PMA is targeting "about a 4% return on our money over the next 3 years," noting that the district has about three years from July 10 to spend the $14 million under the current plan.

Staff also told the committee the district plans to borrow an additional $11,000,000 on April 1, 2026, and that PMA will coordinate the draw schedules for the full $25,000,000 to maximize returns across both issuances. The staff member said the projected return specifically on the $14 million could be roughly $500,000 to $600,000 over the multi-year horizon, contingent on market changes.

Committee members asked operational questions about how PMA allocates among the three instruments and whether ratio targets are set; staff replied that PMA handles day-to-day allocation decisions based on the draw schedule and market offers and that allocations may be adjusted if market conditions change before the April borrowing. The staff member cautioned that yields and the yield curve have altered significantly in recent weeks, so the precise allocation and realized return are subject to market risk.

The committee asked that this summary explanation be included in the full board packet so the entire board can see the investment plan and draw schedule. No formal vote was taken on the investment strategy at this meeting.