Investment Committee Minutes

MEETING MINUTES

Attending In-Person: Mayor Doug Farnsley; Council Member Don Gibson, Committee Members Bill Brab, Susan Nicholson, Dennis Riggs; City Attorney F. Chris Gorman; City Clerk John S. Carter

Mayor Farnsley called the meeting to order at 3:00 p.m.

Mayor Farnsley provided a brief overview of the city’s finances, including the city’s current cash balance, the history of the city’s cash flow, and the amount of money held in reserve for state retirement obligations pursuant to city ordinance. 

The city’s new solid waste contract with Rumpke is significantly higher than the prior contract.  This increase has made the new 2023/2024 fiscal year budget challenging.  Were the city to maintain the same level of service as the prior contract the expense would rise from approximately $750, 000 annually to approximately $1.2 million annually.   There was a short discussion on a new level of sanitation service to save money.

Susan Nicholson agreed to act as the chairperson for the Investment Committee.

The mayor recommended that an investment plan be created for the $1.8 million held in reserve for the city’s state retirement obligation.

Chairperson Nicholson recommended that the committee consider an asset allocation of $1.8 million with a long-term horizon and an asset allocation for the city’s accumulated surplus that provides liquidity.

Council Member Gibson recommended that the city create a separate budget for capital improvements.

Committee Member Brab recommended that the committee focus on the performance of various Kentucky League of Cities [KLC] financial products and compare it to the current rate of return on the short-term money market accounts and certificates of deposits.  The asset allocation ought to be modeled like a portfolio for a person nearing retirement as opposed to someone at the beginning of their career.  The city should be cautious with the timing of its investments and at this time invest slowly and monitor the performance of investments.

The committee discussed the differences between the city’s investment policy statement compared and KRS 66.480 Investment of Public Funds.   The committee agreed to further evaluate the city’s investment policy with the goal of simplifying it.

The committee agreed to perform further research and evaluation of the various financial products offered by KLC.

Chairperson Nicholson will contact Steve Pickarski at KLC to obtain more information on the performance of KLC’s financial products and to discuss the city’s investment policy.

The City Clerk stated that there are two CDARs totally $2 million that will mature in early August 2023.  At that time the city will need to determine whether to reinvest or to redeem and invest in a different financial instrument(s).

The committee agreed to gather additional information on KLC investments and review that material at the next committee meeting.

There was further discussion of current financial market conditions and how to prudently invest in the current economic climate.

The committee asked the city clerk to check with Jessica Beatty of Republic Bank about the ability to invest in a money market fund that will sweep to the city’s checking account.

The committee tentatively agreed to reconvene around Tuesday, July 18, 2023.

The meeting was adjourned at 4:05 p.m.