Cumberland Times-News

Editorials

November 18, 2013

Better return

State should ease restrictions on library system investments

Maryland legislators need to take a look at easing the over-restrictive policy county library systems face in trying to get a better return on fund investments.

At its meeting last week, the Allegany Country Library System’s board of trustees lamented the state’s restrictions on how library accounts, primarily from bequests, can be invested.

Although the local system’s investments were returning more than 8 percent a few years ago, the return lately has been about 2 percent. The library system would like to put its money into something more lucrative, but state law only allows investment in bonds backed by 100 percent collateral, primarily mortgage-backed securities. The library cannot invest money even in relatively conservative investments like preferred stocks or corporate bonds.

“A big concern is that interest rates have been on a 20-year decline and are heading upwards,” said Mirjhana Boggs-Buck, a vice president with Wells Fargo Advisors LLC in Cumberland. Wells Fargo manages some of the library system’s investments. That upward trend means the principal value of the bonds will drop. The only remedy is to try to buy short-term bonds, Boggs-Buck said. “It’s unfortunate the rates are coming down, but it is what it is,” Boggs-Buck said. “The shorter you go, the lower the rates.”

The only flexibility is if the library receives a gift specifying that the gift has to remain in stocks or other securities. If not, the library cashes the stocks and places them in state-approved investments, said John Taube, the director of the Allegany County Library System.

The lower return on investments comes at a time when the library faces financial constraints brought on by tighter state and county budgets.

We’re not advocating allowing library systems to go unchecked on how they invest money from bequests. But limiting investments to only super-conservative options seems to us to be leaving money on the table.

 

1
Text Only
Editorials
  • Preposterous Preposterous

    File this one under the We Thought We’d Heard Everything category: A man who attempted the armed robbery of a pizza shop is now suing the pizzeria and the employees who tackled him and wrestled his gun away during the holdup.

    July 22, 2014 1 Photo

  • No secrets No secrets

    The idea of fracturing for natural gas makes many people anxious about potential harmful effects. For that reason alone, it is incumbent on Maryland government to require full disclosure of chemicals used in the process.

    July 21, 2014 1 Photo

  • Don’t do it. Don’t do it

    Temperatures have been moderate recently but are projected to rise to the upper 80s and low 90s later this week, so we want to remind you: Never leave children unattended in a vehicle.

    July 21, 2014 1 Photo

  • July 20, 1969 July 20, 1969

    When Apollo 11 landed on the moon 45 years ago today, it was until that time the mostwatched television programming in history.

    July 20, 2014 1 Photo

  • Stopgap

    Kicking the can down the road was one of the things American kids did to pass the time in the old days, particularly if they lived in rural areas where there was little traffic to contend with.

    July 16, 2014

  • Maryland on target to meet 2025 bay restoration goals

    July 16, 2014

  • Tough luck Tough luck

    The state has for a second time declined to help Allegany County get federal flood recovery funds in the wake of the June 12 storm.

    July 15, 2014 1 Photo

  • Heard it all Heard it all

    Pesky thing, this requirement that political candidates file campaign finance reports.

    July 14, 2014 1 Photo

  • Build it now Build it now

    Anticipated savings from demolition work that will provide ground for a new Allegany High School on Haystack Mountain may allow the addition of an auditorium at the school.

    July 14, 2014 1 Photo

  • Get on with it

    Now that Maryland State’s Attorney General Doug Gansler has been asked to help with the investigation of the McCoole Volunteer Fire and Rescue Department it is our hope that the probe regains traction.

    July 12, 2014