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County hears pitch to move idle funds into Treasury-backed money-market option
Summary
A visiting financial advisor presented a Treasury-backed money-market fund as a liquid, low-risk option that he said yields 'low to mid 4%'—about 2 percentage points more than the county's checking account—while providing daily access via wire or ACH; the board agreed to study the proposal and follow up in the coming weeks.
A visiting financial adviser introduced himself to the Todd County governing body and urged officials to consider moving idle county funds into a Treasury-backed money-market fund that he described as both safe and more lucrative than the county’s current checking balance.
The adviser, introduced in the meeting as David Shafer, told the board the recommended fund is "backed entirely by US treasuries" and called it "the most safe, and the most liquid version" of money-market investments for public funds. He said the county’s local bank checking account currently yields "somewhere in the low to mid 2 percents" while the money-market option "earns you currently, in the low in mid 4%," describing an approximate 2-percentage-point improvement.
Why it matters: County treasuries and cash-management choices can affect the revenues available for services and capital projects. A modest difference in interest rates applied to large or long-held balances can change near-term interest income available for the budget.
Shafer described operational features that he said make the product suitable for governments: transfers by wire or ACH, access within one business day (often within an hour by wire), and no transfer fees charged by his firm. He also noted the funds pay interest as a monthly dividend, which he said simplifies bookkeeping because the county’s balance is updated monthly rather than daily.
He told the board he places most municipal customers into money-market funds that hold U.S. Treasuries, adding: "there's other types out there that, frankly, I don't think particularly appropriate for the public's money... so we always direct our customers into ones that have money market funds with US Treasury's system." When asked whether other counties use such accounts, he said many do and that his firm had established roughly 15 accounts in Tennessee during the last year, with about half using money-market funds for a portion of their funds.
Next steps: The moderator said the board would "study this" and expected follow-up questions in "the next week or two," and Shafer said he would be available for additional questions or technical follow-up.
Attribution and context: The adviser was introduced during the meeting as David Shafer and identified his workplace in the discussion as Morton Capital Markets; the moderator initially introduced the visitor as being "with Morgan Stanley," a discrepancy that was recorded in the meeting transcript. The board did not vote or take formal action on the proposal during the session; members said they would examine the recommendation and return with questions.
The meeting transcript records the adviser’s rate comparisons and operational descriptions as statements he made to county officials; it does not include a motion or formal acceptance of any investment arrangement.
