Treasurer Rory Casey details to Holyoke City Council how stabilization funds are invested, monitored

HOLYOKE — Some city councilors expressed surprise at a Monday night Finance Committee meeting when they learned investment services provider Flynn Financial is managing almost $15 million of the city’s money.

The comments came after acting City Treasurer Rory Casey offered insight into how city’s stabilization funds, also known as rainy-day funds, are managed and invested.

Casey, sworn in as acting treasurer over a month ago, said he plans no significant changes related to the stabilization accounts.

“I would say our funds are 100% secure in all the various accounts they’re in,” he said.

A recent transaction shifted money from Flynn Financial to PeoplesBank to create a capital improvement account. In addition, the city also established accounts to hold cannabis community impact fees and money it received from the federal American Rescue Plan Act.

As of Tuesday, the stabilization fund reported a $14.2 million balance, along with $1.05 million in the capital improvement account. Over $3.7 million sits in the cannabis impact fund, and the sewer enterprise fund stands at $293,000.

A total of $14,967,875.22 is invested through Flynn Financial. A representative from Flynn Financial was unavailable for the meeting.

Casey said the city abides by standard investment practices widely used by Massachusetts municipalities. State law dictates how the stabilization funds are invested. He will conduct a five-year lookback on the financial services companies used by the city.

Councilor at-large Kevin Jourdain said he was unaware of Flynn Financial and he did not recall seeing financial statements from the firm.

“We had no idea this was privately managed and was being invested and how they’re investing,” he said.

Casey responded that Flynn Financial began its relationship with the City of Holyoke 20 or more years ago.

“The amount of money they have with the city has fluctuated,” he said.

Jourdain called for greater transparency about the financial companies under contract with the city. Unlike the Retirement Board, which focuses on conservative, long-term investing, he noted that the stabilization funds are “straight out” tax dollars readily available.

In terms of liquidity, Casey was confident the stabilization funds could handle reasonable requests by the mayor or council, the most recent being the creation of the $1 million capital improvement account.

“Where we’re investing our money, protecting our money, is one of the most important jobs of the treasurer,” Casey said. “There are specific types of funds we can invest in as a municipality.”

Casey opposes risky investing or moving money around for the “quick buck,” likely producing “reconciliation nightmares.” Instead, he favored third-party firms or consultants to guide the city’s investment strategies.

Casey wants to educate the council and the public about the treasure’s role and the complexity of fiscal management.

Ward 6 Councilor Juan Anderson-Burgos said the longstanding agreement with Flynn Financial should be commonly known in city government.

“You need to make sure, every five to 10 years, you have a second set of eyes on your finances,” he said. “We got to do better than this.”

Councilor at-large Peter Tallman called for greater scrutiny of how and where the city’s dollars are invested.

“I never realized where the money was going or invested,” he said, unlike the Retirement Board that periodically updates the council.

Councilor at-large Joseph M. McGiverin disclosed he coached Timothy Flynn, the financial firm’s founder, in youth basketball years back. He added that Flynn’s company provides consulting services to several local nonprofits.

McGiverin said past practices divided the city’s stabilization funds into two accounts.

However, Casey said the Treasurer’s Office maintains 45 different bank accounts, some which he plans to cull. He added that reconciliation issues are a “direct result” of too many bank accounts.

Thirty-five accounts with PeoplesBank hold balances ranging from a few dollars to millions.

Other accounts include trust funds that support educational scholarships. McGiverin noted that some trust accounts ran deficits with the city getting “dinged” for the negative balances.

The committee tabled the discussions for a future meeting and an opportunity to review Casey’s documents.

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