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Woodburn has seen so much growth in recent years that the city has hired an investment adviser.

PMG PHOTO: JUSTIN MUCH - System development charges from building projects around Woodburn, such as Amazon shown here, have resulted in the city housing so much money its hired an investment advisor.

Have you ever had so much money you didn't know what to do with it?

Not many people can answer that question in the affirmative, but the city of Woodburn can.

It turns out rapid development issues that spurred a horde of Smith Creek citizens to a late September City Council meeting to voice complaints have other spillover effects: money.

"In the past couple of years the city has found itself in the position of growing our cash position beyond the local government investment pool cap, which is capped at $56 million dollars," Woodburn City Administrator Scott Derickson told the council. "And, it is projected that by the end of the calendar year, our cash position will grow to about $90 million dollars as a municipal organization, which is a record position for the city to have at the end of a calendar year — at least in the 14 years that I've been here."

So, what does that mean?

Derickson said much of the growth is due to capital investment within the city, and most of the money is, by law, dedicated to specific services.

"We are seeing a swelling of resources in our system development charge fees and other dedicated funds primarily because of Amazon and other types of (building) projects," Derickson said. "This means that we need to have investment advice specific to municipal government."

State law specifies certain restrictions on where municipalities can house such cash. The unprecedented financial scenario presents a problem for the city though "It's a good problem to have," Derickson stressed.

Fortunately, prior to coming to town Woodburn Finance Director Tony Turley worked with someone who knows a thing or two about this sort of issue.

Turley introduced PFM Asset Management Group Managing Director Lauren Brant to the council. Her firm offers investment and asset management services, and the council agreed to hire her in a non-discretionary capacity, which means she can recommend investment options to the city but not make transactions for the city.

"I worked with Lauren … when I was with the city of Salem, and she is their non-discretionary investment advisor," Turley said. "We started preparing for this late last year when we were preparing the financial plan."

Turley said city financial planners anticipated the city would need better diversification of its assets, hence the expertise to do that. He said the city consulted with PFM and city of Salem in advance of preparing its presentation to the council.

Brant said PFM has been working with state and local governments for 42 years and manages about $189 billion nationwide. Other Oregon entities using its services include city of Redmond, Legacy Health, Oregon State Treasury, Oregon State University, University of Oregon, Tualatin Valley Fire & Rescue, Special Districts Association of Oregon and Citycounty Insurance Services.

"We are specialists in the area of high-quality, fixed-income investment grade securities; so, fixed-income strategies which very much align with the city of Woodburn's investment policy and portfolio strategy," Brant said.

A report to the council estimated the service fees the city will pay range from $30,00 to $50,000 annually and can be absorbed in the non-departmental professional services budget in the general fund.


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