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Maxwell council weighs options to invest $1–1.5M, hears bank and IPATE proposals
Summary
Council members discussed placing roughly $1–1.5 million of city funds into higher‑yield investments, heard rates and liquidity options from Maxwell State Bank and an IPATE representative, and directed the finance committee to form a recommendation on short‑term reserves and longer‑term ladders.
Council members on Tuesday debated how to invest roughly $1 to $1.5 million the city holds in operating and restricted accounts, focusing on maintaining short‑term liquidity while earning higher returns.
Wendy, the city clerk, told the council the city currently has about $1.5 million on hand earning about 1.25% and that staff would like guidance on how much cash to hold for the June–October tax cash‑flow window. "One of the easiest ways to determine what our cash needs are is starting with our June financial or July financial through October because that is our tightest time period," Wendy said.
Cam Droy, joining remotely, described a daily‑liquidity option available through the state enabling resolution (referred to in the meeting as IPATE). "There is no minimum balance that cities are required to maintain in IPATE—whether you've got $10 or $10 million with us, the daily fund receives a daily rate and interest is paid monthly," Cam said.
Randy Meyer, vice president at Maxwell State Bank, presented the bank's posted rates for certificates of deposit and a higher‑yield daily fund. "We're passionate about Maxwell and want to do right with Maxwell and our deposits," Randy said, noting the bank could structure access to funds "if you would need them quickly and without penalty." He added that CD rates are fixed for their term and would roll at maturity.
Council members asked staff to quantify short, medium and long‑term cash needs and to identify funds that are no‑brainers to invest (for example, the fire department trust fund). Several members suggested forming a finance committee subpanel to model cashflow requirements, propose minimum operating balances, and return a recommendation on a blended approach that preserves immediate liquidity while laddering certificates for longer holdings.
What happens next: The council directed the finance committee to meet, review historical revenues and expenditures for the June–October cash‑flow window, and return a recommendation on how much to keep liquid versus invest, and on the mix of daily liquidity and fixed‑term instruments.
