Investment Advisory Board Meeting Summary (August 28, 2025)

The Rio Rancho Investment Advisory Board convened on August 28, 2025 (note: the meeting agenda listed the date as August 27, 2025) at 6:00 PM in the City Council Chambers. Board members present included Chair Kelly Wainwright (District 6), Van Billops (District 1), Ron Baker (District 4), Chandra McCray (District 5), and David Jablonski (At-Large). The board reviewed the second quarter 2025 performance of the Permanent Fund and the Core and Liquidity Portfolios, and discussed a procedural recommendation from Member Baker regarding an emergency fund allocation. The proposal was tabled to the February 2026 meeting.

Consent Calendar

• Approval of Minutes: The board unanimously approved the minutes from the May 28, 2025 regular meeting. The consent calendar was approved by Members Baker, Wainwright, Jablonski, and Billops.

Discussion Items

Permanent Fund Performance (Q2 2025) Chad Stapleton of PFM Asset Management presented the quarterly report. He highlighted strong market returns in Q2, with the S&P 500 rising nearly 11% despite geopolitical tensions and tariff uncertainty.

• The Permanent Fund's market value was $14,763,038 as of June 30, 2025.
• The portfolio returned 6.55% for the quarter (slightly underperforming the blended benchmark) and 11.70% for the fiscal year, equating to a gain of approximately $1.5 million.
• Since inception in January 2023, the annualized return stands at 13.30%, in line with the benchmark.
• The report reflected recent asset allocation changes, including the addition of real assets (real estate and real return pools) based on recommendations from the February 2025 policy review. The board had no questions.

Core and Liquidity Portfolios Performance (Q2 2025) Frank McDonald of Government Portfolio Advisors reviewed the fixed-income portfolios. He noted the normalization of the yield curve, with short-term rates declining.

• The total portfolio's annualized book income increased to $12.4 million in 2025, up from $11.7 million in 2024.
• The portfolio's unrealized position improved from a $1.8 million loss to a $1.3 million gain, providing greater flexibility.
• The portfolio remains highly conservative and liquid, with over 50% maturing within one year and approximately 70% in U.S. Treasuries and agencies. Full compliance with the investment policy was confirmed. The board had no questions.

Procedural Recommendation: Earning Withdrawal and Emergency Fund Allocation Member Ron Baker proposed setting aside up to 50% of the Permanent Fund's annual earnings during strong market years into a separate emergency fund. This fund would be used in years with negative market returns to finance community investments (e.g., parks, public safety, education) without requiring asset sales in a down market.

• Director Carroll Harrell explained the current process: the board makes a withdrawal recommendation in February, and the earnings have been returned to the Permanent Fund's principal in recent years to grow the corpus.
• Harrell noted that the city already maintains a strong General Fund reserve policy of 25%, likely sitting at 28-30% (approximately $30 million), which far exceeds the state's 8.33% mandate and serves similar purposes.
• Discussion covered the feasibility of creating a separate special revenue fund and the board's ability to direct the use of such funds once transferred out of the Permanent Fund.
• After the discussion, Member Baker moved to table the item to the February 2026 meeting to allow for further research and deliberation on how to implement the concept. The motion was seconded and unanimously approved by Members Wainwright, Baker, Jablonski, and Billops.

Key Outcomes

• Minutes Approved: Unanimously approved the May 28, 2025 regular meeting minutes.
• Performance Reports Received: The board reviewed and accepted the Q2 2025 performance reports for the Permanent Fund and the Core and Liquidity Portfolios.
• Proposal Tabled: The discussion on establishing an emergency fund from Permanent Fund earnings was tabled to the February 2026 meeting.