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Taos board authorizes investment of GO bond sinking funds; finance director to invest via Goldman Sachs
Summary
The board authorized Finance Director Dr. Reineer Martins to invest roughly $10 million held in sinking funds from the 2010 GO bond series into a low‑risk investment vehicle (board discussed Goldman Sachs option). Staff said sinking funds had been held in non‑interest accounts and the investment would generate interest to offset future principal payments.
The Taos Municipal Schools Board voted April 8 to authorize the finance director to invest sinking-fund balances tied to the district’s 2010 general-obligation bond series. Finance Director Dr. Reineer Martins explained the funds — roughly $10 million in the bank — had been held in non‑interest-bearing accounts since issuance and could be placed into a low‑risk investment to generate interest that would offset future principal payments.
Dr. Martins presented three low-risk prospectuses and recommended investing with Goldman Sachs based on projected yields in the prospectus (presentation cited rates in the upper 3% range). He said the move is conservative and intended to improve fiscal stewardship of funds earmarked to satisfy future debt-service obligations.
"We forfeited 15 years of interest," Dr. Martins said in explaining why the district sought a change to active management of sinking funds that historically sat in checking accounts. Board members asked about risk, oversight and transaction security; staff said investments would follow bank and bond-counsel recommendations and the board would receive documentation and reporting.
Board action and rationale: After discussion about risk tolerance, oversight processes and the mechanics of sinking funds for bond repayment, the board passed a motion authorizing investment of the sinking funds as recommended. Board members noted the approach could reduce mill-rate pressure on property taxpayers by offsetting principal payment needs with earned interest.
Follow-up: Staff will provide prospectuses, bank confirmations and periodic reporting to the board. Bond counsel was consulted and staff said the proposal aligns with debt‑service procedures.
