Quarterly investment report: town portfolio yields improve while cash balances dip awaiting reimbursements

Jim McCourt of METER Investments presented the quarterly investment report to Paradise Town Council, saying the town’s portfolio is invested mainly in fixed‑income securities and is positioned to benefit from higher rates locked in during the prior two years.

McCourt said the portfolio’s book value has declined to about $170.9 million from roughly $207 million last year as the town has spent funds on large capital projects. He reported a weighted average yield to maturity of about 3.8% for the securities portfolio and said much of the portfolio is laddered out to five years (the town cited a five‑year maximum maturity per state investment rules).

Staff and the investment advisor emphasized the town’s strategy of keeping adequate cash on hand while reinvesting maturing securities to lock attractive yields. McCourt noted about $25.9 million had been taken from the portfolio in the current fiscal year to fund work, and that staff were awaiting roughly $25–26 million in reimbursements (he identified FEMA as a primary source). Council members asked whether incoming reimbursements could be re‑invested when not needed for near‑term cash flow; McCourt and staff said they coordinate regularly to maintain two to six weeks of expected cash outflows in liquid accounts while reinvesting other funds.

Council discussed risks if cash balances fell low enough to trigger sales of securities; McCourt said selling higher‑yield bonds into a lower‑yield market would still capture realized gains and provides backup liquidity, but staff prefer not to sell at a loss.

The quarterly presentation included portfolio allocation by asset class, maturity distribution, realized investment income for recent fiscal years, and an explanation of how reimbursements and grant timing affect reported cash balances. Council thanked staff for the clear explanation and asked that receivables/reimbursement timing be incorporated into future cash‑position snapshots.

The presentation will inform upcoming budget and cash‑flow decisions as the town fronts capital work and awaits reimbursement from state and federal programs.