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
  • About time About time

    Although many Cumberland streets are in need of repair and improvements, the decision by city and county officials to address Greene Street is a good one.

    July 28, 2014 1 Photo

  • Where is it?

    Once upon a time, the Maryland Chamber of Commerce held its annual conventions at the Bedford Springs resort hotel near Bedford, which is in Pennsylvania.

    July 28, 2014

  • Korean War Korean War

    July 27, 2014 1 Photo

  • Sloppy lawmaking is to blame

    July 27, 2014

  • C-minus grade C-minus grade

    If a survey conducted by Thumbtack.com and the Kaufman Foundation is an accurate portrayal, Maryland has a long way to go to become a business-friendly state.

    July 24, 2014 1 Photo

  • Big loophole Big loophole

    How ironic — and how sad — that the Potomac Highlands Airport Authority plans a closed executive session to discuss the open meetings law.

    July 23, 2014 1 Photo 1 Story

  • 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