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District hears presentation on nonprofit school investment pool as an alternative for cash management
Summary
Representative Ken Schuler outlined a nonprofit local government investment pool option for school cash management, stressing a safety‑first approach, S&P triple‑A rating for the fund, same‑day crediting for state aid deposits and a low net fee structure; board members asked questions about liquidity, fees and risk.
Ken Schuler, who identified himself as a representative of a nonprofit local government investment pool, told the Jenkintown School District board on April 7 that the fund offers a safety‑first, pooled investment option for school districts.
Schuler said the pool had roughly $9,700,000,000 in assets last year, serves more than 500 participating school districts across Pennsylvania and counts about 20 participants in Montgomery County. He described the fund as run by a board of school business officials and school board members and said it invests only in securities approved under the district‑permissible list (referred to in the presentation as “440.1 approved investments”), avoiding newer, credit‑exposed options recently authorized for some school investments.
“The fund is rated triple‑A by S&P,” Schuler said, and he added that participants own a pro rata share of the portfolio. He described operational details: participant deposits move through a partner bank (PNC) and are swept into the pooled portfolio; the pool is constructed of treasuries, collateralized investments and FDIC‑backed instruments; and the fund is stress‑tested regularly. Schuler also said the pool can provide same‑day crediting for state aid deposits if notified before wire close.
Board members asked about fees, historical losses and how the rate is set. Schuler said the fund charges a fee taken from the gross rate and that the information statement allows a fee not to exceed 25 basis points, though he added the fund’s actual fees are well below that cap. Asked whether the pool had ever lost principal, he said he was not aware of any participant losses and offered to follow up with the firm's internal audit group for details about stress periods.
The presentation closed with staff and board members noting interest in seeing how peer districts use the pool and in which types of accounts (general fund, reserves, scholarship funds) they had deposit exposure. Schuler offered to help the district structure individual investments and to provide comparative usage data for county business managers.
The board did not take formal action on the presentation; questions and follow‑up remain pending.
