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Ways and Means committee hears $1.5 million reinvestment and awaits roughly $360,000 from CEMA
Summary
Committee reviewed a city investment update showing steady interest earnings and a recent $1.5 million reinvestment; staff said FEMA reimbursements are complete but CEMA still owes about $360,000, and March finances show sales tax up while use tax lags.
The Ways and Means Committee on May 7 heard that the city has reinvested roughly $1.5 million and is seeing continued interest earnings that staff say are supporting the general fund and capital accounts.
Brad, the presenter on investments, told the committee the city’s reported earnings totaled about $2.7 million before 2024 and that annual interest receipts were $728,405 in 2024 and $708,131 in 2025. “As of now, at the very top, we have $201,159 that has been earned to date in the 4 months here in 2026,” Brad said, adding, “That equates to about $50,000 a month in interest earnings.” He also reported that the city deployed about $1.5 million into the investment portfolio in the prior two weeks and that the additional principal will likely increase monthly interest receipts.
City staff clarified the source of the $1.5 million. Michelle said the funds were not new but came from accelerated purchases in fiscal 2025 that had been paid from city funds and later reimbursed: “We did some accelerated purchases in during FY25, pending some FEMA and CEMA dollars ... FEMA CEMA gave us the dollars back about 2 months ago. The recommendation was to reinvest those dollars.”
On outstanding federal and state reimbursements, Eric outlined what remains. He said FEMA reimbursements for recent disaster-related work have largely been received but that CEMA (the state emergency management funding) still owes money tied to two events. “Somewhere about $360,000 is what I’m expecting still to come to us from CEMA,” Eric said, describing roughly $350,000 tied to the 2022 flood and about $12,000 tied to a 2025 tornado. Eric said he could not give a precise timing for the CEMA payments but that the agency was closing out 2022 claims and often disburses funds in a single payment.
Staff also explained how any incoming reimbursements would be allocated across accounts: small amounts return to the general fund (fund 10), the capital fund (fund 40) would receive the bulk (about $290,000 for the 2022 flood portion), and the stormwater or related fund would receive roughly $62,000. Committee members asked whether those incoming dollars should be reinvested or reserved for upcoming stormwater bid packages; Michelle and Eric said staff would monitor timing and the results of the stormwater bid process before recommending a reallocation.
On overall fiscal trends, Michelle reviewed March financials and told the committee that sales tax collections were about 6% higher year over year while use tax lagged about 6%. She said occupational-license receipts were down roughly 9% for March but that collection season would likely raise that line in April. For budget planning, staff are using cautious assumptions and, at present, projecting about a 1% revenue increase for budget purposes until more data arrives from the state Department of Revenue.
The committee received the reports; there were no formal votes attached to the investment presentation. The audit draft and related adjusting journal entries are expected to be distributed to members within two weeks and submitted to the state auditor by the end of the month.
