18622_Authority_August_Web

municipalauthorities.org | 43 list of federal regulations. These rules define what funds are subject to rebate, how to calculate liabilities, and when payments must be made. They also set strict deadlines for filing and stringent rules for recordkeeping. The stakes are high: an incorrect decision along the way could cost a municipality hundreds of thousands of dollars. For example, a local government may pay too much because they’ve gotten cookie-cutter advice or they’ve worked with an advisor who neglects a beneficial calculation method. Conversely, a municipality may pay too little Payment miscalculation or failure to comply with other aspects of the regulations may result in hefty penalties and interest – or even the loss of the tax-exempt status for the issue. That’s why many local governments find it critical to seek professional assistance. There may be more than one “right” answer. The IRS has issued dozens of rules and technical clarifications. This thicket of regulation means that, in many cases, more than one approach is legally permissible. A professional advisor will review every possible permutation to help ensure local governments get the best available after-tax result. Track the project spend There are times when projects move forward on time and on budget: there are times when they don’t. Local governments should track their actual spending on a bond-issuance project versus the projected spending. If a project is delayed, investment managers or advisors should take steps to rebalance or reinvest a municipality’s portfolio as required. Develop an investment plan, but be ready to adapt Just as in the case of a municipality’s overall investment policy, bond proceed investments should be structured to place the emphasis on the following: Safety - Transparent and accountable investment practices not only ensure compliance with legal and ethical standards but also maximize the impact of every dollar spent. Ultimately, prioritizing the safety of these funds – such as understanding the security of the institutions and products in which bond proceeds are held -- allows local governments to fulfill their responsibilities effectively, and provide the structure necessary for local governments to ensure that these resources are used for their intended purposes. Liquidity - Whenever bond proceed investment decisions are made, the funds that are invested must be available to pay for the expenditures for which those funds were obtained. Liquidity is essential in an investment plan because it ensures that a local government can meet its short-term financial obligations and respond to unforeseen expenses. Liquidity allows for a local government to have enough readily accessible assets to cover project obligations efficiently if needed, avoiding potential disruptions in services or financial strain. The timing of project spending can change over time due to unforeseen factors like weather delays, disruptions in getting supplies or manpower, or project changes in the design. Monitoring and adjusting as the project spending plan changes is key to optimizing returns and maintaining adequate liquidity. Optimization of returns - While return-on-investment should always be secondary to safety and liquidity, local governments should use diversification to seek to maximize earnings where possible. As previously mentioned in the topic of liquidity, a local government may benefit from having readily accessible funds to take advantage of investment opportunities. Compliance - Pennsylvania law requires a high level of security and safety for investment of public funds, charging local governments with finding investment options with the primary objective of protecting the principal. Municipalities should research potential investments to ensure that their investment planning conforms to those permitted investments. These are just a few basic rules of thumb regarding this important component of local government investing. If you have any questions about this topic, or about any of the Four Pillars of Local Government Investing, contact your PLGIT representative. S PLGIT article continued from page 31. Author bio: Paul Robinson works with public entity investors in the eastern part of Penn- sylvania. He can be reached at robinsonp@ pfmam.com. Important Disclosure Information This information is for institutional investor use only, not for further distribution to retail investors, and does not represent an offer to sell or a solicitation of an offer to buy or sell any fund or other security. Investors should consider the investment objectives, risks, charges and expenses before investing in any of the Trust’s portfolios. This and other information about the Trust’s portfolios are available in the current Information State- ment, which should be read carefully before investing. A copy of the Information Statement may be obtained by calling 1-800-572-1472 or is available on the Trust’s website at www. plgit.com. While the PLGIT and PLGIT/PRIME portfolios seek to maintain a stable net asset value of $1.00 per share and the PLGIT/TERM portfolio seeks to achieve a net asset value of $1.00 per share at its stated maturity, it is possible to lose money investing in the Trust. An investment in the Trust is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Shares of the Trust’s portfolio are distributed by U.S. Bancorp Investments, Inc., member FIN- RA (www.finra.org ) and SIPC ( www.sipc.org) . PFM Asset Management is a division of U.S. Bancorp Asset Management, Inc., which serves as administrator and investment adviser to the Trust. U.S. Bancorp Asset Management, Inc. is a direct subsidiary of U.S. Bank N.A. and an in- direct subsidiary of U.S. Bancorp. U.S. Bancorp Investments, Inc. is a subsidiary of U.S. Bancorp and affiliate of U.S. Bank N.A.