Governing board banks on new strategy

Who doesn’t want a little extra money?

Supervisors on the Heritage Harbour South Development District do, and they hope a slight change in investment strategy could result in extra money for district projects without additional charges to homeowners.

At the board’s Nov. 7 meeting, Rod Bettini, managing partner for Municipal Asset Management Group, shared how by investing some of the district’s reserves in certificates of deposit, rather than a money market account, could earn them thousands of dollars each year.

“Our focus is on idle funds,” Bettini said. “It’s basically an optimization play. There’s not a big difference the first year, but the big difference is over the life of the bond.”

Scott Brizendine, manager of district financial services for the CDD’s management company, Rizzetta & Co., simplified the numbers. For example, in the district’s capital reserves account, the interest jump would be from 0.8% to 2% — a change from $200 to more than $5,000 annually in interest earned, assuming the district converts about $200,000 of $300,000 into CDs. The district could use those additional funds for any capital project it wanted.

“It’s significantly more,” Brizendine said.

Interest earned on reserves for the district’s debt service bond would be reinvested to pay down the bond at a faster clip.

CDD supervisors supported the idea.

“Having our reserve funds and our debt service reserve funds sitting in a money market doesn’t make a lot of sense,” CDD Supervisor Rick Lane said. “We’re not going to earn great sums of money, but every little bit helps. This makes sense for us.”

Bettini will come back to the Dec. 5 meeting with a more formal proposal. If the board likes it, it will authorize its trustee to make the investment change on its behalf.

Under the arrangement with MAMG, the company would not take custody of the district’s funds, and the company would be compensated by the CD issuer, not by the CDD.