County still struggling with investments

Making money off its investments continues to be a challenge for Flathead County, Treasurer Adele Krantz told the county commissioners on Tuesday.

She recently pulled all of the county's money from the short-term investment pool run by the state when the interest rate dropped to an unprecedented .31 percent.

Interest rates for the pool have been steadily declining. Flathead County was earning 5.5 percent in the short-term investment pool at the end of 2007; by December 2008 it had slipped to 1.91 percent.

In the sweep account - the account in which the county takes all the excess available money at the close of each business day and invests it in overnight interest-bearing instruments such as money-market mutual funds or repurchase agreements - interest rates have been slipping, too.

For the first quarter of fiscal year 2010 (July through September) the rate was 1.25 percent. By comparison, that rate was 5.57 percent in late 2007 and by February this year had dropped to 1.8 percent.

The county earned $138,966 in interest from the sweep account for the fiscal quarter ending Sept. 30.

Last quarter's top investment rate was 3 percent with D.A. Davidson and Buchanan Capital.

In September the county's investment's totaled $99.8 million; interest earned and distributed was $107,050. During fiscal year 2009, investments averaged $102 million, with average monthly interest distributions of about $228,600.

Krantz invests money from the county, local school districts and other districts, such as fire and rural special-improvement districts, in a variety of short- and long-term funds, then distributes the interest back to those entities.