The Mt. Vernon Board of School Trustees voted unanimously to invest in TrustINdiana, an investment pool for local governments, at its Monday night meeting.
Indiana Treasurer of State Daniel Elliot, who supervises TrustINdiana, says the purpose of the program is to “provide Indiana local units of government the opportunity to invest in a common pool of investment assets that seeks to preserve the principal of the public’s funds, remain liquid, and prioritize the return on the investment.”
Only public entities such as towns, counties, and school districts in the state of Indiana are eligible for the program.
The program allows local governments to invest money over shorter periods of time, which usually are around 30 days but can go up to 270.
Greg Elkins, Mt. Vernon Community School Corporation CFO, emphasized that this would not be a replacement for the district’s current bank relationships.
“We have a great relationship with Greenfield Banking Company,” Elkins said. “It’s just a diversification of investments, there’s a lot of good things there that municipalities can take advantage of.”
The district began considering the program following an event Elkins attended which was hosted by TrustINdiana. One of the primary reasons he thought TrustINdiana was a good fit was the lack of withdrawal penalties, allowing the district to remain liquid and utilize the funds as costs came up.
He specifically drew comparisons to Certificates of Deposit, which have similar lengths of investment, which do have withdrawal penalties and therefore provide much more risk to the district.
Elkins also emphasized that TrustINdiana’s status as a public program set up by the Indiana General Assembly provided an additional level of transparency, which was valuable to the district. This transparency is reinforced by annual audits required by the legislation which created the program, which was passed in 2007.
With interest rates on the rise after several years of stability, the district felt now was the right time to pursue investments. Elkins said that these funds would be used to provide a “safety net” for the school, but that the districts primary financial commitment was still an investment in students.
Once investments are finalized, the district will receive daily and monthly reports on the investments made by TrustINdiana and its overall finances.
