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Supervisors create reserve fund, adopt investment policy to manage EIT and future capital risk
Summary
The board approved a resolution to establish a reserve fund and adopted an investment policy statement after staff and ECAC described the fund’s role in smoothing capital timing and responding to revenue uncertainty, particularly related to EIT receipts and potential fire/EMS costs.
The Easttown Board of Supervisors voted June 15 to establish a reserve fund and approve an investment policy statement intended to manage new Earned Income Tax (EIT) revenues and provide flexibility for capital planning.
Staff said the reserve would serve five targeted functions and would not itself make investments until specific investment actions are brought back to the board. The board discussed governance: the policy states that the board retains final decisionmaking authority while ECAC will act as a delegate to monitor and report under the IPS.
ECAC members and staff framed the reserve as a prudent tool to smooth ‘‘lumpy’’ revenue and debt-service timing and to hold cash or short-duration instruments until the board decides on specific capital uses. ‘‘This isn’t going to make any investments immediately — all particular investments will come back to you as a specific cash amount with a specific investment vehicle,’’ staff said.
The board approved the resolution to create the reserve fund (resolution referenced in the packet) and then approved the investment policy statement; votes were recorded by voice. Public commenters asked whether ECAC would make decisions or only recommendations; staff and the ECAC presenters clarified that ECAC would recommend while the board retains authority.
Next steps: staff and ECAC will monitor EIT receipts and bring investment actions and any recommended uses of the reserve back to the board for approval.
