The City of Florence is putting its financial position to work for taxpayers through a new investment strategy expected to generate approximately $2.6 million annually in interest income from existing city reserves.
The strategy allows Florence to generate additional revenue without a new tax or fee while maintaining a balanced budget and protecting the financial reserves the city has worked for years to build. The additional revenue can help support continued tax relief, major park and infrastructure improvements, and future redevelopment opportunities.
The effort began when Mayor Julie Aubuchon asked city staff to review how Florence’s reserves were being managed and determine whether the city could earn a better return on funds already on hand without taking on additional risk.
As interest rates and economic conditions evolved in early summer 2025, the city began reviewing whether its intentionally conservative approach could be enhanced to provide greater predictability and long-term benefit while maintaining the same level of fiscal discipline.
Under the previous structure, a significant portion of city reserves were held in low-yield checking accounts and legacy investment arrangements that prioritized predictability but offered limited flexibility and declining returns as interest rates trended downward. City leaders identified an opportunity to manage those funds more strategically while continuing to prioritize their safety and availability.
Aubuchon directed staff to explore options for responsibly updating the city’s investment strategy without increasing risk. The effort was spearheaded by Finance Director Jason Lewis, with assistance from City Administrator Josh Hunt and Northern Kentucky native Daniel Shafer of Moreton Capital Markets LLC.
Together, the team developed and implemented a phased approach focused on safety, liquidity, predictability and long-term planning.
Rather than leaving funds fully exposed to declining bank interest rates, the city invested a significant portion of its reserves in U.S. Treasury securities. Two laddered investment portfolios were established to provide predictable returns while ensuring funds become available at regular intervals as the city needs them.
Together, the portfolios are expected to generate approximately $2.6 million annually in interest income.
“Our residents expect us to be just as careful with their money as they are with their own,” Aubuchon said. “We have worked hard to put Florence in a strong financial position, and now we are making sure those dollars are working for our community.”
“Earning additional revenue from funds we already have gives us another tool to invest in our parks, infrastructure and community while continuing to look for opportunities to reduce the tax burden on our residents,” added the Mayor.
City leaders view the additional interest income as a practical way to help offset property and insurance premium tax reductions approved by City Council, with the potential to support additional tax relief in the future.
The additional revenue also strengthens Florence’s ability to invest in priorities residents can see and use, including implementation of the Park Improvement Master Plan and future redevelopment opportunities such as the Florence Mall, while maintaining a balanced budget and protecting city reserves.
City of Florence