Wednesday, March 19, 2014 | NEWS
Burnett County revisits investment strategy
Jean Koelz | Staff writer
BURNETT COUNTY—Last month a newly formed investment committee met for the first time to discuss Burnett County’s financial policies, and brought some suggestions to the Monday, March 17, administration committee meeting for consideration. Although the existing policy, developed in 2009, states that the investment strategy would be reviewed annually, there’s been no activity for years.
Upon his arrival last fall, county Administrator Nate Ehalt dug through the county’s many policies and procedures in an effort to gain a working understanding of the mechanics of this local government and familiarize himself with the internal culture. What he found was a collection of often unwritten policies or drafts that were never quite finalized. He immediately rolled up his sleeves and began working with department heads to formalize procedures and document policies.
The new committee proposed several changes for review, and invited Bremer Bank financial advisor Scott Husnick to the administration committee to answer any questions. Although government investment portfolios are heavily regulated, there are some things the county can do to improve its returns.
“We find that the three- to five-year horizon is the sweet spot to increase yield,” explained Husnick. To date, the county typically turns its investments in under three years. “We’re missing out, so that’s one policy change I’d make,” Husnick added.
Additionally, the county has historically kept two pools of money (in addition to cash reserves): trusts and investments. “With interest rates being where they’re at, the two funds were invested similarly anyway,” Husnick commented. By consolidating the funds, the county could save some costs because the fee structure for investments is lower.
“Plus, it will provide more flexibility,” Ehalt added regarding the recommendation. “We can maneuver funds more easily.”
The policy changes recommended by the investment committee were drafted after reviewing neighboring county policies. The revisions included definitions and reporting guidelines, among other details. Administration committee member Maury Miller suggested that the policy also detail certain benchmarks for accountability purposes.
The committee will review the policy again in April before sending it to the board of supervisors for approval.