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Mesquite council hears investment‑policy review and economic outlook from new advisor Hilltop Securities
Summary
City finance staff and new advisor Hilltop Securities briefed council on investment performance, proposed investment‑policy changes tied to SEC and market rules, and an outlook that anticipates slowing growth and likely Fed rate cuts in September.
City Finance Director Ted Chen and Matt Harris of Hilltop Securities presented the city’s annual investment activity report and proposed amendments to the investment policy required by the Public Funds Investment Act.
Chen said staff supplied a red‑line copy of the policy and highlighted proposed changes including naming additional treasury employees as designated investment officers, reducing money‑market fund WAM language to 60 days to reflect SEC rules, increasing allowable investment pool exposure from 80% to 90% of the portfolio, clarifying composite WAM to no greater than 365 days, and adding Federal Home Loan Bank letters of credit as eligible collateral.
Harris summarized national economic indicators and portfolio strategy. "Economic growth is slowing, but a recession is not expected," he told council, noting the Fed was widely expected to cut 25 basis points at its upcoming meeting and that short‑term yields have fallen, prompting a recommendation to extend duration selectively to lock current yields.
Why it matters: Changes affect how the city benchmarks and manages cash, allowable investment vehicles and collateral, and internal controls for designated investment officers—matters governed by the state Public Funds Investment Act (Chapter 2256, Texas Government Code). The council received the briefing; staff said the policy will appear on the Sept. 15 consent agenda for approval.
Context and next steps: Harris said Hilltop has deployed about $40 million into the city’s securities portfolio since onboarding. Councilmembers asked technical questions about WAM, money‑market rules, and benchmarking; staff said the proposed policy would be brought back for council action on Sept. 15.
Sources: Statements by Ted Chen (City Finance) and Matt Harris (Hilltop Securities) at the Sept. 2, 2025 council pre‑meeting.
