In 1993, south and southwest suburban community treasurers and money managers approached the South Suburban Mayors and Managers Association, looking for joint investment strategies.
The money managers needed some method that would allow them to pool their resources for higher interest rates, and they wanted some way to invest for longer than the 60 to 90 days most certificates of deposit offered.
Three years later, municipalities are signing on to the newly developed Illinois Metropolitan Investment Fund, which will allow them to pool investment dollars, make investments for as short as 18 months or as long as five years, and collect higher yields on their cash deposits.
“We had been designing an investment strategy for our members,” said Beth Ruyle, executive director of the mayors association, “but joining this fund gives our municipalities greater investment opportunities and reduces the costs.”
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Since the fund began accepting deposits July 1, seven municipalities, including Richton Park, have signed on with $6 million. Another six municipalities are expected to deposit $6 million this week, according to Bill Stafford, executive director of the fund.
Stafford, the former director of the Illinois Government Finance Officers Association, designed the Illinois Metropolitan Investment Fund. It is one of only three pools recognized by the Illinois Department of Insurance, and it includes a number of safeguards to prevent poor investments such as those that forced Orange County, Calif., into bankruptcy.
“This is not like a checking account,” Stafford said. “This is meant as an investment strategy. It is a longer-term alternative to money-market funds, treasury bills and bank certificates of deposit. The municipality has to invest at least $50,000.”
First National Bank of Chicago and affiliates of First Chicago NBD will be making the investments, but they must report to the fund’s board of trustees, chaired by David Cook, finance director of Hinsdale. Finance directors from Western Springs, Buffalo Grove, Richton Park, Skokie, Shorewood and Westchester also are on the board.