CAA Reviews Policy
GRAND RAPIDS — The Convention and Arena Authority is in the process of reviewing the investment policy the board approved three years ago.
Back then members agreed to join the investment pool Kent County Treasurer Ken Parrish manages because the county was earning a higher return rate than the CAA was getting from its bank accounts. CAA Chairman Steven Heacock asked the Finance Committee last month to determine if the $20.4 million the board has invested was earning its highest possible return. Committee members began doing that this month.
“I don’t see anywhere else you can earn a higher rate of interest given the restrictions you’re under,” said Kent County Fiscal Services Director Robert White, also a member of the Finance Committee.
State law requires the CAA to invest in securities that provide the maximum amount of security.
“Given the parameters of what we’re allowed to do, this is pretty good,” said Robert Herr, a committee member.
White said the county pool earned an average rate of 5.09 percent for September and that the county primarily invests in one-year certificates of deposit with local banks. “There doesn’t look like there is much of an opportunity to increase yield,” said Michael Freed, chief financial officer for Spectrum Health and committee member.
But Freed suggested the committee needs to compare the return the CAA gets with rates paid by comparable securities to get a better grasp as to how well the board’s investments are doing. White said he would prepare a quarterly comparison of the board’s earnings with the yield of securities issued by the U.S. Treasury and have that report for the next meeting.
Heacock, chief administration office at Van Andel Institute, wants to maximize the return to ensure the board has enough funding to make the necessary improvements to Van Andel Arena and DeVos Place.
Finance Committee Chairwoman Birgit Klohs, president of The Right Place, said the group should file its recommendation with the board in December and should review the investment policy on a regular basis.
“We really have a very limited basket of opportunities,” she said. “We don’t want to handle this $20 million on our own.”