Hubbard County moves cash for bigger return
Hubbard County Auditor-Treasurer Kay Rave proposed converting up to $5 million of the county’s cash assets into a liquid, ladder account with Pershing Advisor Solutions.
Looking for the best return on county investments, Hubbard County opened an account with Pershing Advisor Solutions and engaged Ehlers Investments as an investment advisor.
Hubbard County Auditor-Treasurer Kay Rave proposed converting up to $5 million of the county’s cash assets into a liquid, ladder account with Pershing.
County Administrator Jeff Cadwell noted that the county reupped CDs at better interest rates with local banks as well.
“We know, for the last two years, our investment income has been really lousy, with the markets the way they were. The markets are changing,” he said, adding investment performance has dwindled from a high of nearly $500,000 to less than $200,000.
“This action supports an additional $200,000 of investment income of our taxpayer money working harder for them,” Cadwell said.
Rave said she always includes the four local banks when she’s looking to invest.
“They have an equal opportunity to submit their rates. After that, it’s my responsibility to do what I think is in the best interest of the county, and that is to increase those investment earnings as much as I can.”
She agreed earnings have been dismal in recent years.
Rave received two local bids. She commented that one local bank has become “a little more competitive,” while the other is not competitive at all.
“It’s more worth our while to leave our money in the money market fund. If we’re able to increase our investment earnings going outside of the county, that is where we’re at,” Rave said.
County commissioner Char Christenson asked how Pershing compares to the Minnesota Association of Governments Investing for Counties (MAGIC) Fund.
The MAGIC Fund is a local government investment pool sponsored by the Association of Minnesota Counties and Minnesota Association of County Auditors, Treasurers and Finance Officers. It was established in 1990 and complies with Minnesota Statute.
Rave said the MAGIC Fund’s interest rates plummeted during COVID, but are coming back now.
Cadwell said Ehlers can guarantee investments of public monies are safe. They are also more reactive to quickly changing market conditions and have time to manage the county’s portfolio, he added.
The best rate in Hubbard County is currently 3.65%, Rave noted.
Cadwell said government investments are seeing 6% returns elsewhere.
“It’s shameful to be investing county dollars at a low rate when we know we can do better,” Rave said. “We need to do better.”
“It’s a dynamic market,” Cadwell added.
County commissioner David De La Hunt advocated for local banks. “Those dollars are being used to invest in the community, in starting businesses and building people’s homes. There’s a hidden value in that that we need to consider,” he said.
De La Hunt recommended establishing a bare minimum that is kept locally. “That money needs to be working here.”
Cadwell said he plans to prepare monthly investment reports.
The county board approved the motion at their Dec. 13 meeting.
In other business, the board did as follows:
- Approved an agreement with Advanced Correctional Healthcare, Inc. to provide healthcare to the detainees and inmates of the Hubbard County Jail. The term begins on Feb. 28, 2023 and continues through Dec. 31, 2027. The cost is $227,872 per year, or $18,989.36 per month.
- Approved a new quote for two 2024 Mack tandem axle plow trucks from RDO Truck Center of Fargo at $137,331 each. Due to supply chain shortages, County Public Works Director Jed Nordin explained a $4,000 surcharge was added to the original price. This is the second surcharge. The only other option was to cancel the order, he said.
- Approved a contract between the City of Park Rapids and Hubbard County Attorney Office for prosecuting crimes on behalf of the city. The two-year agreement begins Jan. 1, 2023 and ends Dec. 31, 2024, with a rate of $5,972.16 per month in 2023 and $6,151.32 (3% increase) in 2024.
- Renewed a two-year contract with Lake Country Associates Inc. to provide behavioral health services for Hubbard County Social Services as well as clinical supervision for social services staff, as required by the Minnesota Department of Health. Services include diagnostic assessments, individual, family, and group therapy sessions and drop-in center services. The state rate changed: community support services and drop in-center services increased from $50 to $74.50 per hour, increasing the contract from $47,600 to $67,984, which is 100% paid by a State Community Support Services Grant.
- Recognized employees with five, 10, 15, 20, 25 and 35 years of service. Those in the top three tiers were Jill Christenson, Thomas Johnson, Chad Olson, Jill Thompson, David Kahlstorf, Herbert McCormick and Sandra Rittgers.
- Approved final payment of $176,298 to Mark Sand & Gravel Company of Fergus Falls for a project on County State Aid Highway (CSAH) 7 and County Road 91 and resurfacing from CSAH 40 to County Road 90.
- Acknowledged legal access from Hubbard County to a Scientific and Natural Area (SNA) near Little Mantrap Lake in Becker County.
- Renewed a two-year joint powers agreement with the North Country Community Health Board.