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City investments reviewed; council raises charter question about single‑institution limit
Summary
Huntington presented the city’s portfolio and liquidity portal; council questioned whether the capital sinking fund’s holdings with a single bank exceeded the city charter’s $500,000 single‑institution cap, and staff said they have asked the city attorney for clarification while indicating the CDs are diversified across institutions.
Jamie Hebebrand of Huntington National Bank reviewed the City of Allegan’s investment portfolio and provided an economic outlook at the July 28, 2025 council meeting. Hebebrand walked council through a Fed dot‑plot overview, noted expectations for rate cuts later in the year, and described the city’s Huntington liquidity portal that holds government and treasury money‑market funds and other public‑act‑20‑compliant options.
Hebebrand reported roughly $6.5 million in liquid government/treasury funds across the liquidity portal (snapshot as of July 22) and described laddered general‑fund investments totaling about $2.1 million with maturities staggered from 2026 through 2030; staff also noted a capital reserve position currently invested in a long‑term Treasury note of approximately $222,000 maturing in August 2034. Hebebrand explained why market valuations for older bonds may appear below par when rates rise and underscored that holding to maturity returns par value plus coupons.
During Q&A, council raised a potential charter compliance issue. City staff cited City charter section 14.8, which states that amounts invested with any single institution (except U.S. obligations) shall not exceed $500,000. Staff said the packet (page 26) lists CDs, money market accounts and government bonds that overall appear to total roughly $2.7 million under the capital sinking fund, and that staff has emailed the city attorney asking for clarification. Huntington and staff explained that some positions are held at different institutions and that FDIC coverage applies at the institution level; Huntington identified positions in Flagstar, Morgan Stanley, JPMorgan and others as part of the diversified holdings.
Council asked for clearer reporting alignment between the liquidity portal presentation and the packet totals; Huntington said it would revise reporting formats to make cash vs. par values clearer in future printouts. Staff did not recommend any immediate portfolio moves while seeking legal direction on the charter question.
No formal investment action was taken at the July 28 meeting; staff will follow up with the city attorney and provide clarified portfolio reporting.
