As financial advisers give a “cautiously optimistic” outlook on the long-term market, the City of Butler is gearing up to start investing a portion of the Butler Area Sewer Authority sale funds.

Out of the roughly $90 million the city received from the sale of BASA, $50 million is sitting in a PNC Bank account. At the Butler City Council meeting Thursday, May 15, two representatives from PNC presented details and discussed next steps to council members.

Henry Wilson, a senior business development officer for PNC, said all of the assets have been transferred into the account and the trust agreement has been finalized. Until an investment policy statement is finalized, however, the funds are sitting in a “cash vehicle.”

“The investment policy statement is the guidebook for how we invest the assets going forward,” Wilson explained. “So, things we’re considering in that IPS are the spend rate, which is the percentage you intend to pull off the funds every year. Right now, we’re looking at a 4 to 5%percent spend rate.”

Wilson also clarified that the investment policy will aim to earn more than the spend rate, to keep the funds growing in perpetuity.

Wilson then introduced David Harvey, the city’s assigned institutional investment adviser, to council. Harvey gave an update on the funds and the income already generated in the cash vehicle.

“(The account) was funded April 14, so mid-month. The way cash vehicles work is you get income posted at the month’s end, so you had a mid-month deposit. It resulted in almost $93,000 of income, just generating, sitting in cash.”

Harvey said that at the current interest rate, the trust fund would generate $2.1 million annually without even investing. However, Harvey informed council that PNC is predicting interest rate cuts in the coming year.

Despite the expected interest rate cuts, alongside other market volatility such as tariffs, Harvey said PNC has a “cautiously optimistic” outlook on the long-term economy.

“I’m sure everybody has seen either a tweet or some sort of news around some volatility, we seem to go both ways, down and up very quickly,” Harvey said. “Ultimately, the game plan is long term. We need to think long term with these; there are going to be fluctuations in the short term.”

Once the investment policy is put into place, Harvey said he will meet with council at least yearly to review any changes needed or desired. He said he will also provide frequent performance updates and is willing to meet with council as often as they wish.

When the investment policy is finalized, it will be brought to a vote by council before being implemented.