H.M. Payson, the Portland-based firm managing Wiscasset’s investments, will review the portfolio with selectmen Tuesday, Feb. 16.

A report from H.M. Payson summarizing the performance of the town’s investments over the past six months shows the town closed out 2015 with a market value of $12.64 million. The amount includes endowments that ended 2015 with a value of $2.65 million. As noted in the report, the market value of the portfolio on July 1, 2015, the start of the town’s new fiscal year, was listed as $13.785 million.

Selectman Jeff Slack said although the town’s investment portfolio had fallen off over the last six months, it has performed very well, considering how much has been withdrawn from it over the last several years. Slack represents the board on its investment committee.

“What you have to take into consideration is what the town’s portfolio has done since H.M. Payson has been managing it over the last six years,” he said.

A chart comparing the town’s consolidated market value versus invested capital shows a beginning value of just over $12 million when H.M. Payson took over management on Aug. 31, 2010. The ending value as of Dec. 31, 2015 reveals the market value holding steady at $12.6 million even though the town has drawn from the reserves every year for both capital expenditures and to help fund the tax commitment.  

Following H.M. Payson’s hiring, selectmen have refrained from drawing monies from the principle and relied instead on what the investments have earned in interest.

“We’ve had a policy since I’ve been on the board to take a percentage every year for capital improvements,” explained Slack. The percentage is about 3.5 to 4 percent or roughly half the amount the town might have earned on its investments on the year. The interest earned on the town’s portfolio has averaged between 6 and 8 percent annually, according to Slack.

Last year voters approved taking $266,227 from capital reserves (interest earned on the investments) to purchase a utility truck for the treatment plant, along with monies for road paving and to pay down the debt on the municipal pier.

In 2014, the townspeople tapped into the principle when it voted to take $1.25 million to reduce the town’s tax commitment. That same year another $401,200 was taken from the capital reserve to cover the cost of replacing the municipal building roof and other major expenditures.

“If you take a look at the big picture over this time frame, the town’s portfolio really hasn’t done that badly,” Slack continued. “We’ve spent (from it) and made a lot of capital improvements and haven’t taken that big of a hit.” To put it another way Slack said the town gained about $881,000 in the six years H.M. Payson has been handling the investments while spending millions from it.

The town manager and selectmen are just beginning work on the 2016-17 budget. No discussion has taken place regarding how much the board might recommend the townspeople take from reserve accounts this year.

It will depend on many things including how much the board carries forward from this year’s budget, including monies left in the undesignated fund balance. Another consideration will be the school budget and its impact on the tax commitment.