The Apopka City Council voted 3-2 at its December 6th meeting to amend its investment/portfolio policy. The vote was successful despite a last-minute pushback from the Apopka Area Chamber of Commerce and two local banks.
Commissioners Kyle Becker, Nick Nesta, and Diane Velazquez voted in favor of the resolution, while Apopka Mayor Bryan Nelson and Commissioner Alexander Smith voted against it.
Now, a month later, the controversy swirling around the policy continues.
During the city commissioner reports section of the January 3rd City Council meeting, Commissioner Nick Nesta had a dialogue with Apopka Finance Director Blanche Sherman about the comments he read on social media about the policy:
"It was discussed that we were moving money in large amounts out of state... out of our banks that we've already partnered with. Is any of that true? Nesta asked Sherman.
"No, sir," she said. "We have not looked at that."
"Do we have any intent to move any of these funds out of these banks? That you know of? Has anybody discussed this?" Nesta asked.
"There has been no decision," Sherman said. "We have not even brought the investment strategy before this council."
"And nor could we move any money," he said. "Is this true? We could not move more than $10 million out of any of these accounts now without public comment, public notice, all that?"
"That is correct", said Sherman. "That is the policy that was adopted."
"With the dialogue that was going on last meeting, it seemed like there was a lot of misinformation," Nesta said. "I'm going to use the word lies that the Chamber of Commerce had received as well as our banking partners. Do you know how that happened?"
"No, I don't," Sherman said. "There was communication with them. They were aware of what was going on in regards to adopting a new investment policy and the investment advisor RFP."
"That's a big concern of mine... that our banking partners were so upset with us when it wasn't true information that was actually happening," Nesta said. "So I want to make sure that as a Council, we all can commit that we are not going to spew lies in any capacity to our banking partners and the Chamber of Commerce. As it was direct lie that money was being moved to Colorado in some capacity and then social media was going crazy that we move money and that's why I just kept saying how odd this was that this is coming up because I just spoken to many of our banking partners days before and they didn't bring any of this up. So I want to make sure none of us are dispelling misinformation and not leaving any of our partners astray in that, especially if it's for political gain."
After hearing Nesta's comments, Cate Manley, CEO and President of the Apopka Area Chamber of Commerce, wrote this letter to the editor of The Apopka Chief, which appeared in its January 5th edition:
"For 110 years, the Apopka Chamber has encouraged the community and businesses to patronize chamber members. This includes our local banks.
On December 6, 2023, Apopka City Commissioners passed a policy to move city investment funds out of local banks to use Zephyr Group | Morgan Stanley of Denver, Colorado for investment advisory ($40,000), and has touted an increase in the city income at 1 million dollars in revenue, with an added increase in transparency.
Please note the timeline: Federal fund rates were 0.09% on August 31, 2021, 2.33% on August 31, 2022, and August 31, 2023; it was up to 5.37% with our local banks. The increase in interest rates, and the city’s administration of the budget is the reason for any increase in revenue thus far, as funds haven’t been moved yet.
Based on the Morgan Stanley investment program presentation that was accepted by council, the current investment account holdings are $147,138,796.77. The portfolio plan reflects a money market allocation at 10% of the funds, which is nearly 15 million dollars.
It is not a defined number, leaves room for adjusting the portfolio and doesn’t specify the notification process for doing so. It also states that they will quantify risks in the banking system, specifically Florida regional and community banks. The disclaimer page states there is no guarantee that this investment strategy will work.
We know numbers hold NO bias or reframe history. Adopting a bid policy change increase from 3% to 10% for local bid preference and adopting a minority small business bid preference policy would go a long way for the business community and citizens of Apopka."
Although he voted against the policy, Nelson offered little resistance to its adoption during the presentation or during the Council discussion before the vote. He did, however, have plenty to say after Manley's letter.
"The Chamber of Commerce President’s actions continue to perplex me," he said in a text to The Apopka Voice. "Instead of facilitating productive in-person conversations with our city’s elected policymakers, she continues a letter-writing campaign comingling thoughts on an Investment Policy we have already passed and a separate bid policy.
It’s interesting to hear the commentary on this topic, as prior to the public hearing in which we took the vote, the Chamber leadership nor the Mayor had voiced any material objection to the policy being crafted. A policy in which the sole purpose is to maximize returns in a safe and sound manner for our tax-paying residents. So, to reiterate, the only time the Chamber officially opined on the revised Investment Policy was the actual day we were taking a final vote after well over six months of publicly discussing the very topic. And now this, another policy plea in the form of a letter to the editor of a newspaper.
What I would recommend is that the Chamber leadership put the typewriter away and take a more active role in actually attending our City Council meetings, have a real-time voice, and play a more proactive part in helping shape pro-business policy, which I know this City Council has always exhibited a desire to accomplish."
Nesta, too, was surprised by the letter and, like Becker, called for more productive dialogue. He sent the following statement to The Apopka Voice:
"The City of Apopka Council approved the utilization of services from the Zephyr Group I Morgan Stanley, after the current administration and City of Apopka Staff’s recommendations, to help plan and coordinate major capital expenditures and projects that are on the City’s five and 10-year horizon (Fire Station(s), Public Services Building, Additional Sports Courts and Outdoor Activities, etc.)
This is in no way a “move money” out of the City of Apopka scenario. This is a vendor contract for services to ensure our funds are being properly handled and/or invested for the exclusive benefit of our residents. I look forward to, as do many residents, the continued relationship with the Zephyr Group I Morgan Stanley, as they have already provided value by way of providing an updated investment policy in sync with similar-sized municipalities and their growth trajectory.
In addition, during this same time, as the duly elected City of Apopka Commissioner, I was able to advocate & achieve the transfer of funds from one local bank (One Florida Bank) to another local bank (Seacoast Bank) pursuant to the State of Florida banking regulations that afforded less of a risk to capitalize on a rapidly changing interest rate market. This important and overdue move helped create over $1,000,000 in additional return for our resident's funds, which in turn has aided in keeping our taxes low without sacrificing services.
The City of Apopka’s residents funds cannot be used to subsidize anything, instead they must be used to promote, educate and empower businesses to be self-sufficient through a strong local economic environment. Our local economy is thriving more with new businesses, new job growth and development due to more recent carefully scrutinized fiscally responsible investing and spending in the City of Apopka.
Specific to the City of Apopka Bid Policy that is already in place by the current administration, it allows for anyone having suggestions to be able to edit or revamp the current policy or we can simply leave it the way it is. Of paramount importance is the will of the City Council to listen and apply suggestions that are received. I will continue to work closely with our small business partners to promote economic growth, ease of access to city services, and a smooth permitting process.
True positive change can only happen through active and open dialogue. Continued distortions, orchestrated distractions, and disingenuous posturing to the community can only hurt our small businesses, vendor partners, and our community. Many say my door is always open, and instead, I say I will meet you where you are. Wherever and whenever an active open dialogue may happen with the sole goal being a benefit to our residents, I will be there.
Fiscal stability is a positive asset for any individual, business, and the City of Apopka.
Lastly, I welcome the opportunity to see more Apopka Chamber of Commerce business in 2024, similar to so many other chambers I have watched that are always addressing matters under the scope of their purview."
Manley later explained the motives and timing of the letter were a direct response to Nesta's discussion with Sherman at the meeting.
“After commissioners made statements about the city investment funds in their closing reports at the January 3 Council meeting I had several businesses reach out with concerns.
There should always be an Apopka first preference for the needs of the city. We have multiple banks and investment advisors in Apopka. In August Seacoast was paying 5.37% interest when the Federal rate was 5.20%.
If a higher local bid opportunity preference policy were to be at 10% instead of 3%, and if we had a minority bid opportunity preference policy in place then it is unlikely that the RFP could have been awarded to an out of state firm. Both local bank branch managers are minority women.“
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