Milford Finance & Audit Committee Meeting – March 11, 2026

The Milford Finance and Audit Committee met on March 11, 2026, at 5:02 PM. The meeting included a public comment period, a quarterly investment review by PFM Asset Management, and a discussion of proposed changes to the city's reserve fund policy. No votes were taken; items were presented for committee review.

Public Comments & Testimony

• Julie Morris (21142 CWB Church, Milford) raised concerns about the meeting packet: the Zoom links required a corporate account login and needed the "Milford" portion removed. She stated the reserve policy is not easy for the average person to understand. She asked: what 12.5% means in dollars for electric, water, and sewer; why realty transfer tax (RTT) money is being used to support general fund reserves and how long that will continue; what happens if RTT revenue drops; and requested a simple public explanation of long-term stability. She argued the policy should be reviewed annually, not only when changes occur, because it is the public's money.

Discussion Items

• Quarterly Investment Review – Presented by Jeff Facino (PFM Asset Management). He reviewed the market summary: the Fed cut rates twice in Q4 2025 to a target range of 3.5–3.75%, with one to two additional cuts anticipated in 2026. CPI was 2.7% in December 2025, then 2.4% in January and February 2026. The recent Iran conflict caused oil to spike near $120 but fall back to ~$85. The portfolio total market value was ~$38.8 million, with a duration of 1.79 years (benchmark 2.02 years). Credit quality is high. Portfolio performance: 1.2% for the quarter vs. 1.1% benchmark; 5.88% for the year vs. 5.44% benchmark; since inception (12/31/2023): 5.33% vs. 4.62%. Cash flow account balance: $3,555,681. Lou Vitola (Finance) noted that unexpected fund retention due to delayed pulls from the portfolio had allowed extra earnings, but funds are scheduled to be withdrawn by end of the current quarter. A committee member clarified that duration and maturity are different concepts; the shorter duration indicates less interest rate risk.
• Reserve Fund Policy Review – Led by Lou Vitola. He presented a redlined version of the policy (page 47 of the packet). Key proposed changes: (1) Generalize the term from "Carlisle fire company funds" to "fire company funds" to accommodate future city expansion. (2) Update figures to Fiscal 26 data (e.g., target MCR line changed from $1.358M to $1.759M). (3) Maintain the electric equipment replacement reserve (ERR) at 1.1 times next year's replacements (a proposed reduction to 1.0 was rejected after staff discussion). (4) For the Realty Transfer Tax (RTT) reserve: change from a three-year average to a five-year average; remove a more complex formula (trailing five minus 20-year minimum) to keep it simple. Rationale: the RTT has been historically sustainable, but the city budgets zero for RTT each year and uses it only for capital. (5) Adjust the cap on RTT pledged to general fund reserves from a static $2 million to a dynamic amount up to 2.5 times the RTT MCR (e.g., in Fiscal 26, three-year average RTT of $1.564M would cap support at ~$2.7M). (6) Add a section on enterprise fund operating transfers – limit transfers to the general fund from electric, water, sewer, and solid waste funds to 12.5% of the respective top-line revenue. This memorializes existing practice and provides policy continuity for credit ratings and future councils. Vitola noted that the policy does not require annual review; he argued the parameters are updated annually through budget figures and monthly financial reports.

Key Outcomes

• No formal votes or decisions were taken; the committee received reports and discussed the proposed reserve policy changes. The policy will likely be brought forward for council action at a future meeting.
• The quarterly investment report was accepted for informational purposes.
• Staff noted that a revised reserve policy (revision 3, version 2) is presented for committee feedback; the goal is to codify existing practices and make the policy more dynamic and clear.