PROVO — Utah County has an extra $20,000, thanks to investing outside the state fund.

Yet despite the additional funds, Utah County commissioners said they wonder if they're getting the maximum possible return.

"The question was, 'How were those investments doing? What else should we have done?' " County Commissioner Steve White said. "All we're asking is that the moneys that the county has out for investment bring a sufficient return."

Normally, temporary excess and idle state money is poured into the Public Treasurers Investment Fund, where it is invested and managed by the state treasurer and other finance professionals.

But with the fund's low 1.7 percent return, Utah County Treasurer Melvin Hudman decided to go another route, and in July 2004 poured $5 million into a government investment with a 2.65 percent rate of return. A month later, he added another $2 million.

The $7 million government investments will mature — or be repaid to the county — beginning at the end of January 2006. But White said he wondered why more money hadn't been invested in similar options with quicker maturation times.

"Laddering," or purchasing investment options with six-, nine-, 12- or 18-month maturation times, would ensure quarterly cash flow.

The rest of the county's budget, 89 percent and almost $58 million, is housed in the PTIF fund, at the lower interest rate.

However, Hudman said he was hesitant to invest too much outside of the state pool because interest rates are unpredictable.

"I could see interest rates in the forecast," Hudman said. "Interest rates are going to go up, and with money invested at a fixed rate, then interest rates go up, you could reach the point where you're losing money. I didn't want to do that."

Both sides have agreed the next step will be to create a county-investment policy.

When done, it will help the commissioners know what is being done with public funds and to provide protocol for future investments.

Although investing in something other than the state pool isn't unusual, it's not as common because it requires more research and work on the county's part.

"It requires some regular tending, as it were, to manage it, to make sure that you're properly investing it as far as the time frame and not risking public moneys" said County Commissioner Larry Ellertson. "The PTIF fund does a very good job of doing that . . . the question is, can we do better?"

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