With a total of $13.1 million sitting in separate bank accounts and not making interest, the Reedsburg council is hoping to take advantage of investing a portion of that money into low risk options to generate additional funds.
The Reedsburg Council unanimously approved to pursue an investor agreement with American Deposit Management at its April 9 meeting. As a part of the agreement with the financial services firm will review the city’s current investment policy and procedure which City Clerk/Treasurer Jacob Crosetto said was last updated in 2007. The other part of the agreement allows the council the option of purchasing low risk investment options from the firm.
If any changes are made to the city’s investment policy, it will be discussed at the April 23 and May 14 council meetings.
If investment policy is changed and approved, the council can start investing the funds. The funds the council are looking to invest include money from the general fund, sewer utility funds, park impact fees and CDBG funds into certificate of deposits and the company’s money market account.
The proposal rates with American Deposit Management carry an average weighted maturity of 16 months and the average yield to maturity at 2.1 percent, net of fees while the money market account has a 1.56 percent yield to maturity, net of fees. Crosetto said investing the money could contribute to a rate of return of around $45,000 to $75,000 a year.
With the federal interest rate expected to increase, one of the reasons why the council chose American Deposit Management was because they offered certificates of deposit with a variable interest rate, which flex with the market.
“So we’re not locked in at that 2.1 percent average it will go up with the market,” Crosetto said.
The next step to building the new elementary school was approved at the April 9 meeting when the council unanimously approved to annex the two tax parcels located on E6977 E. Reedsburg Road.
The Reedsburg School District plans to build its new elementary school on the west side of the 80 acre parcel that was approved by the electors last winter while the east side plans to be used for continuation of farming and agriculture uses for the time being with the possibility of future development. The land originally was located in the Town of Reedsburg with a total population of five people living in the area.
The re-zoning of the parcels will be discussed at the April 23 meeting.
The council unanimously approved to reconfigure 19th Street and Ridgeview Drive, which dedicates the land as a public right of way.
The council unanimously approved to appoint Daniel J Debaets to the City Plan Commission and Dennis Andreasen to the Board of Review.