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Lake Stevens finance director, adviser propose laddered treasury strategy to diversify $62M cash
Summary
New finance director Lindsay and adviser Peter Becker of Time Value Investments outlined implementing the city’s 1992 investment policy to ladder ~ $10 million into 1–5 year treasury and agency bonds to improve yield and stabilize interest income, while keeping a sizable LGIP cash cushion.
Lindsay, the city’s new finance director, told the Lake Stevens City Council she plans to implement the city’s long‑standing 1992 investment policy and create a safekeeping account to diversify cash holdings. "This policy has existed since 1992," Lindsay said, and she described a cautious approach while she learns the city’s finances.
Peter Becker of Time Value Investments walked council through lawful public‑fund options and the mechanics of a laddered bond strategy. Citing the RCW noted in the packet, he emphasized safety and said the market timing makes laddering attractive: "Safety is the number 1 priority," Becker said, and treasuries and agencies are the principal instruments available to public entities.
Becker showed the city’s audited cash position — about $62,000,000 largely held in the state Local Government Investment Pool (LGIP) yielding about 3.68% — and explained that a partial reallocation into a 1–5 year ladder could increase interest while protecting against future rate drops. Council member discussion focused on implementation: Lindsay said the plan would preserve liquidity for short‑term needs and start conservatively. One council member summarized the expected near‑term gain as roughly $40,000–$45,000 annually on a $10 million ladder in current rates; Becker agreed that would be a reasonable year‑one estimate.
Becker also described compensation models for TVI: for a straightforward treasury ladder the firm would typically use transactional compensation retained from bond yields rather than charging a separate advisory fee. Lindsay said she intends to move cautiously and bring specific implementation steps back after the recess and the close of budget season.
The council did not take formal action tonight but asked staff to return with implementation details, guardrails on liquidity, and formal account‑opening documents.
