Elizabeth staff propose moving $14 million into fixed-term investments
The strategy would split the town’s $28.85 million COLOTRUST balance between daily-access funds and 3- to 12-month terms; staff estimate it could earn about $80,663 more a year at rates available when they made the proposal.
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Elizabeth staff proposed moving about $14 million of the town’s investments into fixed-term COLOTRUST accounts, estimating the strategy could earn about $80,663 more a year at rates available when they made the proposal. The town then had $28,852,067 in COLOTRUST earning a variable 4% rate with daily access to the funds, a Nov. 4 staff memo says.
Under the proposal, the town would keep half its balance in the liquid pool and divide the other half among 3-, 6-, 9- and 12-month terms. Staff intend to hold the term investments until maturity, so that portion would not be available for daily withdrawals.
The town’s investment policy prioritizes safety, liquidity and yield, in that order. COLOTRUST disclosure materials warn that early redemption generally requires advance notice and may trigger a penalty or market-value adjustment that could reduce earnings or principal. The projected additional earnings are based on rates available when staff prepared the proposal, not a guaranteed return.
Trustees were scheduled to discuss the investment policy and strategies, with possible action, at their Nov. 10 meeting, the agenda states.