The Paris Town Board Tuesday heard a presentation from its new lead bank on how it will invest the town’s approximately $18 million in cash reserves.
Neil Buchanan, a Johnson Bank vice president, and Mark Oechler, certified financial planner and vice president of Johnson Investment Services, described a portfolio that will sacrifice some liquidity in favor of higher rate of return than might be expected from other municipalities with less cash. The bankers are recommending the town invest in agency bonds that are either AAA or AA rated or backed by the federal government and “laddered” for maximum return. “Laddering” refers to an investment strategy that uses investments with rolling maturity dates.
“It’s more like having a CD, or multiple CDs, instead of a savings account,” Buchanan said.
The town has substantial cash on hand due to payments it receives from Waste Management’s Pheasant Run Landfill, which is located in the town.
Supervisor Ron Kammerzelt said the town’s investments were structured as if the town would not have future revenue — just to be safe.
“This is very conservative,” Kammerzelt said.
Johnson is not investing all of the town’s money. About $5 million will be held in a money market fund at Community State Bank in Union Grove and the State Investment Pool. That money is more liquid and should be enough to meet the town’s cash flow needs, Buchanan said.
Finally, after almost two years of having this on every agenda. Coincidence it happens just before election.