Investment adds a little more to Kane coffers
A new investment opportunity is expected to result in a small windfall for Kane County.
Treasurer Dave Rickert last month invested $19.5 million of the county's funds into the Certificate of Deposit Account Registry Service, an innovative program that's relatively new in Illinois.
Known by its acronym, CDARS (pronounced "cedars"), the program allows governments, individuals, companies and other investors to deposit large amounts of money into a special network. The short-term investment is fully insured and produces a high interest yield without the need for collateral.
The county's investment -- which is projected to generate $189,000 in interest at maturity -- was split into three $6.5 million chunks that will mature after three months, six months and one year, respectively.
The investment was further split into individual certificates of deposit, each less than $100,000; that is ceiling for full insurance under the Federal Deposit Insurance Corp.
"We've had very good years the last couple years with our investments," Rickert said. "We're attempting to do everything we can to maximize our yield."
More than 1,900 banks nationwide, including 90 in Illinois, offer CDARS. Kane County's investment was handled by The Private Bank in St. Charles. The program is only available to investors who can deposit at least $10,000; the maximum deposit is $50 million.
Rickert learned about the program through his involvement in the state's County Treasurers Association. It was started in 2002 by Eugene Ludwig, former comptroller of the currency. In 2004, Gov. Rod Blagojevich signed a law that eased restrictions on public agencies and financial institutions seeking to participate in CDARS and similar investment programs.