Municipalities in most states utilize the Local Government Investment Pool (LGIP) to manage their cash deposits and to optimize return on investment (ROI), which allows busy district financial managers and CFOs to spend their time working on other financial obligations.

However, in an effort to optimize ROI and “hit the easy button” municipalities may be unintentionally shortchanging the very communities they are trying to serve.   

Top Five Reasons the LGIP Might Not Be the Best Choice for Your Deposits

1. You may not be getting the best possible rate. The LGIP is too large to be dedicated to monitoring all the possible FDIC insured deposit options available. The result: as rates fluctuate, the LGIP yield tends to lag.  
2. You need to ensure liquidity. Funds deposited in the LGIP may not always be immediately available to settle. It often takes approximately 2-3 days to settle funds. When you have expenses today, you can’t afford to wait up to three days for your funds to be available. 
3. Your deposit deserves a dedicated customer service team. The LGIP customer service department is available for limited hours, and in most cases requires you to leave a voice message to get a response. Limited availability paired with a massive client base to serve adds up to a lot of frustration when you need help.
4. Funds deposited in the LGIP are typically deployed into US federal level investments. These deposit placements may meet the technical objectives of an investment policy. However, it may be more beneficial to your community to keep funds in local banks that help the community to grow and prosper.
5. You need an expert partner for your public entities’ specific needs. The LGIP can be one size fits all, whether you are a school district, a country government or a police department. Your deposit administrator should understand your distinct needs and be able to help you meet your specific objectives. 

In today’s climate, it is critically important to ensure you are maximizing the impact of every public dollar. Ampersand has built a solution specifically for the needs of public entities which overcomes the disadvantages of the LGIP.

Ampersand can help your district with deposit management strategies. Contact Ampersand   to learn how.