Escalon staff outline investment plan; federal CPF grant for surface water approved
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Summary
Finance staff told the council ~92–93% of city funds are invested and discussed shifting money from LAIF into an Oak Valley Bank sweep for improved liquidity; the city manager reported a roughly $1.1 million federal CPF award for a surface water project pending administrative steps.
Finance staff provided the council a midyear investment briefing and recommended a cautious reallocation of some funds to increase liquidity and returns.
"We have about 92 to 93% of the city's money invested in any given time," the finance presentation said, and staff proposed moving portions held in LAIF into an Oak Valley Bank sweep account that earns a higher effective rate for balances above $3,000,000 while retaining a $1,000,000 secured, longer‑term allocation with Cetera.
Staff explained the rationale: shorter‑term sweep accounts provide immediate access for planned projects while longer‑term Cetera allocations can yield higher returns on 3–12 month maturities. The presentation noted midyear investment earnings of about $609,000 (projected to roughly $1.2 million annualized) and year‑to‑date interest payments of about $432,000, which factor into decisions about paying down CalPERS liabilities versus retaining invested balances for income.
In a separate staff announcement, the city manager said Representative Harter's office had secured an allocation of approximately $1,100,000 from the federal Community Projects Fund for the city's surface water project. The manager said the appropriation has been signed into law and will require an administrative step through a federal department before funds arrive in the coming months.
Council asked follow‑up questions about statutory limits on fee subsidization (Gov. Code 66000), the liquidity and ratings of Oak Valley Bank, and the city's strategy for balancing long‑term investments against near‑term capital needs. Staff said more detailed reports and supporting slides will be available at the next meeting.