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RBC — As any investor knows, there is always a risk factor. It’s no different for Rio Blanco County. The job of County Treasurer Karen Arnold is to minimize those risks.
“The county’s policy has always put safety before liquidity or yield,” Arnold said. “We may not get the best yield, but I make every effort to ensure safety. And, sometimes, liquidity takes center stage over yield.”
Arnold gave her quarterly treasurer’s report Oct. 27 at a meeting of county commissioners.
One factor in the liquidity of the county’s investments is the uncertainty of the outcome of a lawsuit with ExxonMobil over the county’s use tax. The county has petitioned the Colorado Supreme Court to review a court of appeal’s ruling in favor of ExxonMobil, which challenged the county’s use tax.
“Until we know just where the county’s position will be concerning the use tax lawsuit, we are keeping liquid as much as possible,” Arnold said.
Officials estimate, if the court of appeal’s decision stands, the financial impact to the county could be $12.5 million.
“That’s our best guess,” said County Administrator Pat Hooker. “We just don’t know at this time, until we find out more from the court.”
As of the end of October, the county’s general accounts had $4.265 million in checking and money markets, $11.685 million in the government asset pool (Colotrust) and $4.578 million in CDs. The use tax, which has separate accounts, has $1.541 million in checking, $3.128 million in the government asset pool and $3 million in CDs.
All of the investments are local, Arnold noted, except Colotrust, which is in Denver.
“This is a very liquid mix of investment instruments,” Arnold said. “The CDs being no further out than one year. The government asset pool and CDs are making the best interest, while the operating (checking and money market) have approximately three months’ operating monies available.”
Money coming in from collection of the use tax as well as the impact trust fund — a fee on industrial, commercial and residential development approved by county commissioners in June — have added to county coffers and helped offset the additional expense of maintaining the county’s infrastructure due to increased usage.
“The stance the county has taken with the use fax fund and the impact trust fund have a lot to do with the county balance being greater,” Arnold said. “Times change and so do circumstances.”
However, according to the resolution passed by commissioners, revenue brought in from the impact trust fund can only be used to offset the county’s expanding infrastructure costs due the amount of new development in the area.
“The impact trust fund is a working fund,” Arnold said. “Deposits and withdrawals are daily.”
As of Nov. 7, the balance in the Impact Fee Trust Fund was $2.1 million.
There are procedures for Arnold to follow on how to invest county funds.
“The investment policy states where I am allowed to deposit county money,” Arnold said. “The policy is based on a quarterly report, which reports on equity, assets, positive net income, as well as federal regulatory actions, problem loans, net losses, etc.”
The county’s investment committee — made up of Arnold, County Finance and Budget Director Diane Sorensen and Commission Chairman Forrest Nelson — is in the process of adjusting its policies to spread out its investments locally, between First National Bank of the Rockies and Mountain Valley Bank.
“At present MVB (Mountain Valley Bank) has a $100,000 CD, which was a good-faith investment by the county when MVB first opened,” Arnold said. “Both area banks have the same rating; both banks are rated high.”
In her report to commissioners, Arnold also noted there had been seven foreclosures in Rio Blanco County this year. There have been two more foreclosures since she gave commissioners the quarterly report, Arnold said.