About $276,000 in village money will soon be moved into a state-run investment fund.
STAR Ohio is a public investment pool that allows local governments to put funds toward a stake in short-term securities such as corporate bonds and U.S. Treasury notes.
The fund is run directly by Ohio Treasurer Josh Mandel’s office along with an additional public pool, Star Plus.
STAR Plus is deposited into banks in amounts that stay under the $250,000 limit set by the Federal Deposit Insurance Corporation. The village has only signed on to invest in STAR Ohio at this point.
Wellington village manager Vanya Hales said a 1.04 percent yearly return to the village is expected in the venture. The initial investment money comes from what’s left over of an escrow account controlled by the Ohio Department of Transportation that went unused in the $15 million Main Street underpass project.
“It’s a normal savings account with no special deals or anything on interest rates,” said Hales. “When we went into the project with ODOT we had to reserve a certain amount of funds to make sure we came up with our end.”
Huntington Bancshares, the village’s bank since taking over First Merit Corporation last August, has said it no longer wishes to hold escrow accounts, according to Hales.
The money can only be withdrawn by the village, though, once ODOT officially signs off on the underpass project. Four final items remain until that can be accomplished: a gas detection system, heat and security sensors for the pump station, an ultrasonic sensor for the detention basin, and a rock trap gate replacement.
Nearly any kind of local government can invest in either STAR program, from cities, townships, and villages to community hospitals, housing authorities, and school districts.
Basis points are the common unit of measure for interest rates and are equal to .01 percent.
According to Mandel’s office, STAR Ohio’s rates have drastically climbed to 66 basis points in the past year after hovering between 11 and 18 from 2011 to 2015. Before that, rates had fallen from 77 basis points in 2009.
Even after the money is invested in STAR Ohio, it can be withdrawn at Wellington’s discretion on a daily basis.
Council members said the funds could eventually go toward $225,000 in needed railroad improvements to establish a “quiet zone” for CSX trains passing through Wellington.
Jonathan Delozier can be reached at 440-647-3171 or @DelozierNews on Twitter.