At the start of the Dec. 2 conference meeting, Finance Director Linda Short told the City Commission that the city’s pooled investment funds earned nearly $35 million in FY2025 against a budget for the investment pool of roughly $8 million. Short said those gains would fall to fund balance and can be allocated by the commission for capital, debt paydown or other priorities.

Short gave fund‑level examples: the general fund had been budgeted to earn roughly $1.8 million and returned about $5.8 million, while the Water & Sewer fund had a budgeted return of about $1.9 million and achieved roughly $11.4 million in market returns in the year — figures she presented as illustrative of the investment pool’s outperformance.

PFM, the city’s financial adviser, told the commission the outperformance was largely driven by a falling interest‑rate environment around September that increased the market value of existing fixed‑income holdings. PFM cautioned, however, that forecasts call for further Fed rate reductions over the next year toward a neutral target near 3%, a scenario that typically reduces future portfolio earnings for a city that benefited from near‑term rate moves.

Commissioners asked whether the city should use the earnings to pay down debt, reduce rates for utility customers or preserve capital for future infrastructure. Short said the funds will accrue to fund balance and the commission will have discretion on uses in the budget process. PFM said the city’s strong credit and access to low‑cost capital remain important advantages but recommended sensitivity testing during budget formulation.

The commission did not take formal action during the presentation; staff will provide further modeling as the city develops the 2027 budget.