CCMSD to work with Sundance State Bank on investment portfolio

The Board of Trustees has approved a new investment policy that will allow Crook County Medical Services District (CCMSD) to invest excess money as a way of increasing its liquidity.

CCMSD intends to entrust Sundance State Bank with its portfolio.

The board kickstarted this process in August after listening to a presentation from a local government investment pool called Wyoming CLASS.

The name stands for “Wyoming Cooperative Liquid Assets Securities System”, a program organized in 2020 to provide public entities in this state with a competitive investment alternative. Participants are invested in short-term, prime or high-grade fixed income instruments.

Regional Director of Marketing Troy Hunsucker told the board that Wyoming CLASS is averaging a 5.3% interest rate, making it a potentially better way to “store” funds that are not currently being used.

Since that time, however, the board has discovered that Sundance State Bank also offers the service and would be interested in working with CCMSD.

In the interests of “keeping it local”, says Chairman Mark Erickson, and because it would offer a similar interest rate that would mean a difference of “a matter of pennies”, the board decided to move forward with Sundance State Bank.

Erickson stressed that this decision is not a reflection on Wyoming CLASS.

Before the board could do so, however, the policy needed to be finalized. At last week’s meeting, the board considered a final version of the policy, with revisions already made according to trustees’ input.

“At this point, I’m just kind of looking for your thoughts and what Micki and I need to do to make this reflect what you would like,” Board Attorney Kara Ellsbury said.

Keen to ensure that the board maintains control of the district’s finances, including any money that is invested, the new policy specifies that the board makes all investment decisions, though the district’s chief financial officer can make recommendations.

“Only the board,” can actually make the final decisions, Trustee Brent Fowler stressed.

Similarly, only the board will be able to authorize investments or withdrawals, or change the amounts invested.

Ellsbury asked for clarity in defining the board’s investment objectives; for example, she said, in, “safety, liquidity, yield.”

“For example, for liquidity we say that our investments need to be liquid enough that we can meet our cash needs,” she said.

Yield and safety meanwhile need to be balanced, because you can’t get the highest returns without riskier investments, she said.

“What do we want to specify so that whoever handles our investments…knows what the board desires?” she asked.

Erickson spoke to the importance of keeping the guidance broad so as not to cripple future boards. For example, he said, right now CCMSD would not be interested in cryptocurrency investments, but it’s impossible to know whether that would change in the future.

The board approved of Ellsbury’s suggestion of “reasonable and prudent” investments to describe the board’s guidance for level of risk.

For the same reason of not constraining future boards, trustees also opted not to change the wording that the board shall “periodically” review the portfolio.

A motion was passed to approve the investment policy.

A second motion was made to “invest some of our excess moneys with Sundance State Bank and to execute any necessary agreements” with the bank.