Milford Finance Committee Meeting Summary - June 22, 2026

The Finance and Audit Committee met on June 22, 2026 at 5:00 PM to review quarterly investment performance, an S&P Global rating update, audit services recommendation, and reserve policy amendments. The meeting began with a 15-minute public comment period; no members of the public signed up to speak, either in person or online, so it was closed.

Public Comments & Testimony

• No public comments were made; the period was closed with no speakers.

Discussion Items

• Quarterly Investment Performance Review: Jeff Facino of PFM Asset Management presented the first quarter 2026 review (ended March 31, 2026). Key points: unemployment remained steady at 4.3% through May; inflation (CPI) rose to 4.2% in May due to energy price spikes from the Iran war; Treasury yields increased over the quarter, but the portfolio's three-month return was 0.44% vs. a benchmark of 0.33%, outperforming by 11 basis points. One-year return was 4.54% vs. 3.91% benchmark. The portfolio market value was just under $39 million with an effective duration of 2.08 years and a yield of 4.15%. Annual fees are 15 basis points (0.15%). Lou Vitola noted that prior to professional management, the city earned only 56 basis points blended (including earnings credit), and the professional management has generated approximately $4–5 million in returns over 2.5 years, avoiding $2 million in lost earnings. Council members expressed appreciation for the fiscal responsibility.
• S&P Global Rating Update: Lou Vitola reported that S&P Global downgraded the city's 2016 GO bond rating from AA- (excellent) to A+ (strong). The downgrade stems from two factors: (1) under GASB rules, the city's interfund loan for the police facility construction created a negative unrestricted net position on the governmental fund balance sheet (despite overall net position increasing for 11 straight years); (2) S&P assessed the city's economic metrics (income, employment, etc.) as weaker than surrounding counties or the state. Lou explained that the rating has minimal practical impact since the city does not currently rely on public debt markets (using state/federal loans and grants). He emphasized the $600,000 in interest savings achieved by paying off the construction loan early using internal reserves. Council members discussed the disconnect between S&P's view and the city's strong financial management.
• Audit Services Recommendation: Kevin Gaboria, Acting Finance Director, presented the results of an RFP for independent audit services for FY 2026–2028 (with two one-year options). Three proposals were received and evaluated using a scoring rubric (75% qualitative, 25% cost). All three firms were qualified. One firm was double the cost and received a zero in cost. The top two firms had similar scores, but ZA (the current auditor) was recommended due to its 100% public sector focus, experience with cities offering electric utilities (matching Milford's electric, water, sewer, and solid waste), and the majority of ZA's clients reporting on a calendar-year basis, offering more flexibility. The committee voted unanimously to recommend ZA to the full council.
• Reserve Policy Amendments: Lou Vitola proposed updates to the city's reserve policy originally adopted in 2021. Key changes include adding a utility transfer policy (based on American Public Power Association research) that sets maximum transfer percentages from electric, water, and sewer funds at 12.5% each, and a minimum of 0% from solid waste. The policy also updates the realty transfer tax reserve to a five-year average. The committee voted unanimously to recommend adoption to the full council, though Lou noted that the recommendation will appear on a future council agenda, as it was not expected for final approval at this meeting.

Key Outcomes

• Motion 1: A motion to recommend to the full council that ZA be selected for audit services for FY 2026–2028 passed unanimously (all in favor).
• Motion 2: A motion to recommend adoption of the reserve policy amendments passed unanimously (all in favor). This item will be placed on a future council agenda for final approval.
• The committee received the quarterly investment report and S&P rating update as informational items; no formal action was taken.