Insights

Every public entity reaches a point in the year when the books close. Obligations are settled, open encumbrances and appropriations lapse or carry forward, balances are reconciled, and the portfolio is measured for the annual report and the audit that follows. It is a demanding stretch of work, and it can invite a particular instinct: … Continued

For many public entities, the investment policy comes up for review on a set cycle, often as a new fiscal year approaches and the budget is adopted. Sometimes that review is simply good practice. Often it is required. Texas entities, for example, must review their investment policy and investment strategies at least annually and formally … Continued

For public-funds investors, mid-year is often when planning assumptions begin to meet operational reality. Cash balances may remain elevated longer than expected. Project timelines may shift. Reserve use may become more immediate, or less immediate, than originally assumed. Even when those changes seem operational rather than investment-related, they can materially affect whether a portfolio is … Continued

The fiscal year is an important planning tool, but may not always be the best proxy for investment horizon. Reviewing reserves and liquidity through the lens of actual cash needs may reveal whether public balances are still aligned with the portfolio built to serve them. Public finance professionals operate in a world shaped by budgets, … Continued

For many public entities, the last several years created an unusual environment. Federal funding expanded, liquidity was abundant, and strong short-term interest rates helped operating cash generate meaningful income with relatively little effort. Holding large balances in overnight structures often felt both safe and productive. That environment may be starting to change. As federal funding … Continued