City’s investment portfolio anticipated to reach $2 million in income by end of fiscal year

QUINCY — City Treasurer Linda Moore admitted that when department heads approach the Quincy City Council, they’re typically asking for money.

“Kelly (Stupasky, manager of the treasurer’s office) and I are here to tell you how we’ve made money for the city,” Moore said with a smile during Monday’s meeting of the Quincy City Council. “Typically, throughout the year, we budget about $330,000 in investment interest income. To date for this fiscal year, we’ve already hit a million. We anticipate that we’re going to hit $2 million by the end of this fiscal year.”

Moore and Stupavsky delivered the City Treasurer Cash Management Investment Portfolio report to aldermen. 

Moore said a few things have contributed to what she called “the perfect storm.”

“Interest rates are up. That’s a big one,” she said. “In the last couple of years, we’ve gotten excess PPRT (personal property replacement tax). We’ve got ARPA (American Rescue Plan Act) money. We can’t spend capital as fast as we allocate it. Any idle cash … I’ll use the word ‘invest,’ although it’s still liquid, and we still have access to it.”

Stupasky said the city has used a “three-pronged” approach with the money it has.

First, it has negotiated a 2 percent interest rate on its checking accounts at First Bankers Trust. Stupasky said those were below a 1 percent rate less than a year ago.

Stupasky said the city’s money market account is paying 3.8 percent.

“We are transferring money out of the operating account into that account more frequently and keeping less in that operating account to operate on,” he said. “We were keeping about four weeks’ worth of cash flow needs in the operating account, and we’ve reduced that down to about one week. That 3.8 percent on $4 or $5 million, that makes a big difference.”

Stupasky also said the city has placed idle cash in brokered CDs and is averaging about 5.17 percent on those. 

“We have CDs also spread out at the various local banks, and we want to keep some funds in the community at these community banks because they are reinvesting in Quincy,” he said. “Also with that, they can compete with each other for those deposits, and we can get a better rate that way.”

Stupasky also said the Illinois Trust Fund in paying 5.46 percent, and the city utilizes that as well.

He said he likes the city’s mix of its asset allocation. He says the city has about 50 percent with liquid funds, about 34 percent in brokered CDs, 12 percent with CDs in local banks and 4 percent with U.S. Treasuries.

Moore said the length of the CDs are 12 months or less.

“Come next summer, we may go out a longer duration as the curve changes,” she said.

“At the end of the year, we like to have fund balance, and we like to have reserves in every fund. If we can generate interest income that will help increase that fund balance, that just helps everybody. Every dollar that we raise through investment income is $1 we don’t have to tax somebody.”

Aldermen had a light night with just a 20-minute meeting, voting to approve one resolution and one ordinance.

A proposal from Rubric Enterprise Edition for a backup storage system for $196,920.07 for a 36-month subscription and $29,215.35 for additional one-time costs for repaired hardware, cable, transceiver and system installation had been recommended for approval by the Technology Committee.

Alderman Ben Uzelac (D-7) called this “the missing piece for recovering from any cyberattacks like the one that we experienced. … They have to put a piece of hardware in our server room in order to backup securely to the cloud.”

Uzelac, a Technology Committee member, explained the cloud component will be new for the city.

“I would say from May 2022 until now, the biggest difference is we’ve migrated away from our exchange server to Office 365,” he said. “That closes a pretty big security gap.

“If anything were to happen, be it another cyber incident, or we have some sort of disaster that happens on site, or a power surge or something that destroys the hardware, then all of our data will be uploaded to the cloud. The other piece that this will do for us is it actually scans the files that we’re uploading for backup to see if it detects the type of cyber incident that we had before. If it notices that files are becoming encrypted, it sends out alerts immediately. We can catch that kind of stuff early as well.”

Aldermen also approved an ordinance to lease 128 N. Fifth to Impact Global, which launched about two years ago. It currently operates out of the Quincy Business and Technology Center, 301 Oak. It was one of 30 recipients to receive part of $13 million in the Illinois Works program’s second year. The program will serve up to 1,400 pre-apprentices, a 40 percent increase from the program’s inaugural year. 

The term of the proposed sublease is one year, with a self-renewing option after the first year. Impact Global would pay $25 a month in rent and be responsible for utilities, housekeeping, staffing the center and maintaining regular office hours Monday through Friday.