Flathead County isn't losing money on its investments, but it's not getting rich, either.

A drastic drop in investment earnings is due in large part to interest rates that have plummeted over the past 18 months.

The interest rate on the short-term investment pool run by the state has dropped to a mere .78 percent. Compare that to October 2007 when the county was making 5.5 percent on its pooled short-term investments.

By October 2008 the short-term rate had dropped to 2.52 percent, and in February this year it had slipped further, to 1.91 percent.

In the sweep account - the account in which the county takes all the excess available money at the close of each business day and invests it in overnight interest-bearing instruments such as money market mutual funds or repurchase agreements - the interest rate is now at 1.35 percent, down from 1.8 percent in February. The interest rate for the sweep account was 5.57 percent in late 2007 and 3 percent in late 2008.

The county's top rate for the fourth quarter was 3.55 percent at Rocky Mountain Bank for an investment that matures in June 2013.

There may be a glimmer of hope, however.

"It seems like rates are going up a little bit, but nothing substantial," County Treasurer Adele Krantz said. "This morning I made an investment at 3 percent, which is really good because it had been at 2 percent."

Flathead County earned net interest of $120,710 for the fourth quarter ending June 30.

The county distributed $2.7 million in investment earnings for fiscal year 2009, down significantly from fiscal year 2008's distribution of $4.1 million.

"It's kind of scary," Krantz said as she reported to the commissioners on Wednesday.

The county has $108 million in the pooled investment program.

A local governing body may invest public money not necessary for immediate use in a limited number of eligible securities, including U.S. Treasury bills and agencies such as the Federal Home Loan Bank, Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal Farm Credit Bank.

County money also is deposited in local financial institutions, but the county requires those institutions to "pledge" or secure the investments.

State law dictates that counties cannot directly invest in securities maturing more than five years from the date of purchase.

IN OTHER business, Krantz reported that Flathead County's delinquent taxes currently total about $7 million out of $125 million in collectible taxes. It's about $1 million more in delinquent taxes than last year, she said, but noted that the county last year had a lower amount of taxes receivable.

Personal property tax notices recently were mailed out, and mobile home tax notices will be mailed Friday.

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at [email protected]