County investments continue to rebound

Flathead County’s investments are making strides amid a robust national economy, but interest rates still are nowhere near what they were 10 years ago when the recession began.

County Treasurer Adele Krantz gave the county commissioners a snapshot of the current investment rates during her quarterly report last week, noting the short-term investment pool averaged 1.33 percent for the second quarter of the 2018 fiscal year.

“That’s a real good rate,” Krantz said, so good, in fact, that the county is funneling more of its investments into the short-term investment pool and not as much into the sweep account.

The sweep account enables the county to take all the excess available money at the close of each business day and invest it in overnight interest-bearing instruments such as money market mutual funds or repurchase agreements.

A decade ago, the short-term investment pool rate averaged 2.52 percent in September 2008. In 2007, though, when the national and local economies where still healthy, that interest rate was 5.5 percent.

The short-term investment account acts as an easily tapped account to pay major bills.

As the recession dragged on, Flathead County wisely pulled its money from the short-term investment pool in early 2010 when the interest rate dropped to .31 percent. By January 2013 the interest rate had sunk even lower, to .24 percent for the quarter ending Dec. 31, 2012.

The top investment rate for the county for the second quarter of fiscal year 2018 was a 2.25 percent rate through Buchanan Capital that stepped up to 3.5 percent. Krantz noted that also is a very good rate.

“They’re inching up,” she said of interest rates in general, “but there’s no comparison to [pre-recession] rates,” Krantz said.

Five years ago for the same time-frame, the top investment was a 1 percent certificate of deposit with First Interstate Bank and a government agency step-up investment with D.A. Davidson & Co. that started at .75 percent interest and graduated to 3 percent.

During the last full fiscal year that ended June 30, 2017, the county’s investments in its pooled investment program averaged $160.6 million, with average monthly interest distributions of $119,371.

For the first two quarters of fiscal year 2018 — July 1, 2017, through Dec. 31, 2017, the county’s investments averaged $192.9 million, with average monthly interest distributions of $181,404. By comparison, for the first two quarters of fiscal 2013, when rates will still quite sluggish, the county investments averaged $131.7 million, with average monthly distributions of $60,469.

In another snapshot in time, Flathead County distributed $1.6 million in interest from its investments in fiscal 2005; $3.5 million in fiscal 2006; $4 million in fiscal 2007; and $4.1 million in fiscal 2008, just before the country was plunged into a recession. That compares to $1.4 million distributed in fiscal 2017.

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.

A local governing body may invest public money not necessary for immediate use in a limited number of eligible securities.

Lynnette Hintze may be reached at 758-4421 or lhintze@dailyinterlake.com.