The Apopka City Council unanimously approved moving $10 million out of a bank as well as modifying the city’s investment policy statement (IPS) to allow for long-term cemetery fund investments in low-fee equity and cash funds.
On June 18, Morgan Stanley financial advisors Trisha Mingo and Glenn Scott presented the City Council with an overview of the city’s investment portfolio and advised how to manage it.
After giving an overview of the interest rate trends and economic forecast, Scott recommended the IPS modification to allow for investments in low-fee, passive, broadly based equity funds and low-yield cash funds. This would create a diversified portfolio that balances equity and cash exposure, ensuring long-term capital appreciation.
Scott said it was “probably a good idea” to move the $10 million out of Synovus and invest it in only treasuries.
“I don’t think there’s any reason to be going out and doing any … highly rated corporate securities,” Scott said. “Stay safe. Stay liquid, keep it simple. Keep it safe just as we go into these uncertain times.”
The city’s 2025 first quarter portfolio has $136 million in cash, $24 million in money market funds and $64 million in fixed income securities, with a book yield of 4.298%, according to Mingo.
The breakdown of investment buckets is as follows: 61% in demand deposits at Seacoast and Synovus banks, 26% in U.S. government treasuries, 10% in local government investments (State Board of Administration, or SBA), 2% in corporate notes, and 1% in money market funds.
Because Synovus exceeded the 50% threshold per the investment policy, $10 million must be moved out of that bank. Mingo presented three options for where the $10 million should be moved to: Seacoast Bank, which is yielding 3.45% as of the end of May; the SBA, which was yielding 4.48%; or new securities that could be found for the city to invest in.
“Normally, we will do two $5 million investments for the city, but we just need to go ahead and get that money moved out of there to get back in alignment with the IPS (investment policy statement),” Mingo said.
During council discussion, Scott recommended that commissioners give his firm discretion to decide based on the rapidly changing economic environment. He asked for two weeks to select which bank to transfer the $10 million to and whether it should be all at once or split up.
Commissioner Nick Nesta said he was comfortable with the proposed investment strategy and asked how much was earmarked in the cemetery fund. City finance director Blanche Sherman said about $130,000. Nesta questioned the goal was for the cemetery fund investment.
“It’s a long-term investment, so we can make corrections,” Nesta said. “We have time, but at the same time, what’s that general goal, I think is important to understand as a whole.”
The Apopka Chief and The Planter are weekly community newspapers, independently owned and family operated, that have served the greater Apopka area in Central Florida since 1923 and 1965 respectively.
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