Soldotna has more than $20 million that it wants to invest.
During a Wednesday city council meeting, members voted unanimously to adopt an investment strategy that is less conservative than the one the city currently uses.
“The city has had about $20 million sitting around making about two-tenths of a percent of interest over the year, because it has been set in a very, very secure situation — which is basically doing nothing — and we think that it’s inappropriate for the city to not be generating more revenue from that,” said Mayor Nels Anderson.
As of Dec. 31, 2014, the market value of Soldotna’s investments totaled about $23.5 million, according to documents from Alaska Permanent Capital Management, APCM. Of that money, $20.5 million is invested by APCM in a U.S. Treasuries and Agency portfolio, while $3 million sits in the Alaska Municipal League Investment pool. Neither portfolio earns much.
Last year, Kenai had an income of about $678,442 from investments in a variety of entities. Soldotna’s annual income from investments was $171,934.
Council members approved a long-term investment plan that would place the city’s money in three categories, or buckets, with different investment timelines and purposes.
The first bucket, would be a short-term, high-quality government portfolio and money market account. This account would be a low risk, low return account that would allow for high liquidity. The second would have bonds and securities with a maturity range of 1-5 years and the third would be for investments longer than five years, according to APCM documents.
Council member Pete Sprague said he supported the city’s move toward diverse investing.
“This is a pretty important step that we’re taking tonight,” he said. “I think our finances are in great shape and I think this is going to improve a really good situation.”
Reach Rashah McChesney at rashah.mcchesney@peninsulaclarion.com or follow her on Twitter @litmuslens. Clarion file material was used in this article.
