Findlay council member proposes overhaul of 30-year investment policy; auditor urges caution on liquidity and compliance

Council member Dan DeArmond presented a draft overhaul of Findlay's 30-year investment policy at the finance committee meeting on April 12, proposing increased transparency and the retention of an outside investment advisor to manage and report on the city's portfolio.

DeArmond said the policy needs improvement in six areas: communication, transparency, reporting, accountability, strategy and continuity. He proposed that the city retain an investment advisor, that the auditor seek competitive proposals within three months of policy approval, and that the advisor report monthly to the auditor, be available quarterly to the finance committee and provide an annual abbreviated portfolio review to full council.

Using a public Meeder report from the city of Dublin as an example, DeArmond pointed to potential budgeting benefits and to a management-fee trade-off: Dublin's report showed a portfolio-level yield and identifiable projected income that can be used for budget planning, while advisors charge annual management and custodial fees (DeArmond cited roughly $65,000/year on a ~135M portfolio in the example).

The auditor urged caution. The auditor reiterated the two legal priorities under Ohio law: preservation of principal and maintenance of liquidity to pay bills. The auditor told the committee the group should fully understand cash-flow management, the state auditor's compliance supplement and the depository agreement implications before changing the city's approach or moving significant funds from highly liquid vehicles such as STAR Ohio.

DeArmond's draft also suggested extending allowable maturities from the current two-year limit to five years, subject to cash-flow analysis; committee members said any move beyond two years should follow a review of multi-year cash-flow projections and reserve targets.

Next steps: committee members asked for additional source documents, legal guidance and cash-flow projections. The investment-policy draft will return to a future meeting after administrators and the law director refine legal and operational implications.