GAINESVILLE – Getting a quarter-of-a-percent better interest rate may not sound like a big deal but when it’s applied to a $20-million balance $50,000 of additional revenue gets the attention of school board members.
That was the case Monday evening when, at the recommendation of Hall County School Superintendent Will Schofield, a resolution was approved that allows the district’s reserve fund balance to be moved from current bank accounts into U.S Treasury Bills.
“We are at a position where we generally…put surplus funds in the Georgia One Fund, however United States treasuries…and it’s one of our legal avenues…with the potential to earn us anywhere from a quarter to a half of a percent more interest, which on several million dollars starts to add up,” Schofield told board members.
Schofield called Johnny Johnson from the audience, financial advisor with Turner Johnson Group of Gainesville, to explain to the board his offer of investment services at a minimal expense.
“Treasuries are available to you for investing with maturities as short as a week to as long as one year,” Johnson said.
“Investing in T-Bills basically gives you as low a risk investment as you can make. They’re backed directly by the U.S. Treasury; they are liquid should you have need of the funds before the maturity date,” Johnson added.
Johnson informed the board that by law it could place funds in other government investments and gain a higher rate of return, but he suggested waiting to make that move until everyone was comfortable with the new investment strategy. “I recommend that we walk before we run; we’ll start with T-Bills and assuming that this works out we might pick up another tenth to a quarter of a point,” Johnson explained.
“In the interest of full disclosure,” Johnson said, “I want you to know that Mr. Schofield does have an investment account with me…that has no bearing whatsoever on my investment relationship with the Hall County Board of Education.”
Johnson said he would provide his services to the school board for a flat one-time fee of $500, enough, he explained, to cover his costs.
Schofield said, “Right now we are receiving a tenth-of-a-percent interest compounded annually on accounts that sit…at our local bank. The Georgia Fund for the month of July was 1.95 percent; T-Bills anywhere from one week to fifty-two weeks ranged from 2-percent to 2.45-percent. That’s a significant difference.”
Schofield said the interest earned from investments was tax-free to the school district, and that TSPLOST funds would be held in a separate account at Georgia Fund 1.
“To me it’s a no-brainer,” Schofield said. The board agreed and approved the resolution unanimously.
http://accesswdun.com/article/2018/8/706689/hall-schools-look-to-t-bills-as-investment-for-surplus-funds