Blue Ridge council hears proposal to move reserves into higher-yield municipal pools

The Blue Ridge City Council on June 3 heard a presentation from a Hilltop Securities representative about local government investment pools as an alternative to low-yield city accounts. The presenter said pools are structured for governments, offer same-day liquidity under normal conditions, and prioritize capital preservation while delivering higher yields than many municipal operating accounts.

David, an asset-management specialist for Hilltop Securities, told the council that "the principal has not been lost ever" in the pools his firm described and outlined the mechanics of liquidity and short weighted-average maturities. He gave examples of current yields and holdings, noting "Techstar is at 4.30, and Logic is at 4.42," and described a representative operating cost rate of about "6 basis points" per year on some pool options. He said weighted-average maturities for the strategy are kept at about "1 to 7 days" to preserve liquidity.

Council members asked how quickly funds could be redeemed and whether principal protection was reliable. Staff noted that some city accounts (referred to in the meeting as 4a/4b/revenue-holding accounts) currently earn little interest and that moving some reserve or bond cash to a pool could increase interest revenue while retaining liquidity. The presenter said the pools publish rates daily and are designed for government use only.

The council did not take an immediate vote. Staff will follow up with the related 4a and 4b boards and review the legal/operational implications before any funds are moved.