IPTIP: The Treasurer's Answer By JERRY COSENTINO, Illinois State Treasurer

All over Illinois, treasurers of governmental bodies — and their treasuries — are enjoying the benefits of a unique program of the State Treasurer's Office. It is called IPTIP, which stands for Illinois Public Treasurers' Investment Pool.

IPTIP provides the public treasurer with an investment tool which enables him/her to earn a competitive rate of return on fully guaranteed investments, while maintaining immediate access to invested funds. In other words, you get a guaranteed high rate of return for your funds and you can get to your money instantly — with no penalty — if you need it.

IPTIP is no secret. There are more than 1,600 participants (at this writing) in IPTIP. However, there are plenty of people who haven't heard about IPTIP or who haven't had the opportunity to participate because of previous commitments. If IPTIP is news to you, read this article carefully.

Back in 1975, the Illinois General Assembly authorized the development of the Pool under the jurisdiction of the State Treasurer, to provide an investment alternative for public treasurers across the state. During the early years, a financial institution was assigned responsibility for managing the Pool's investments, providing accounting and custodial services. However, as the Pool has won widespread acceptance, the State Treasurer has assumed a more active role in the Pool's management.

There are plenty of advantages in IPTIP. Here are some of the major features:

SAFETY All investments are made in instruments authorized for purchase by the State Treasurer for his own portfolio. The Treasurer has traditionally invested in collateralized certificates of deposit issued by Illinois financial institutions, and in repurchase agreements purchased from primary government securities dealers.

All time deposit funds are fully guaranteed through a combination of FDIC or FSLIC insurance for the first $100,000, and collateral (treasury bills, bonds or notes) held by one of 18 State Treasurer's safekeeping banks for funds in excess of the insured level. Similarly, funds invested in repurchase agreements are secured by direct treasury securities held by the Pool's custodian via the Federal Reserve's book entry system.

CONVENIENCE All you have to do to participate in IPTIP is fill out a one-page application and a service selection form. When approval is granted, the application is forwarded to the custodian for immediate action. The custodian calls the public treasurer to supply the account number so that funds may be wired into the pool immediately. Participants can use multiple accounts in the Pool to segregate general corporate funds, bond funds, etc. They receive written confirmation of each IPTIP transaction daily, and on a cumulative basis each month. Distribution of investment income is received by check each month, or it can be reinvested.

YIELD Pooling permits a higher rate of return than if funds were invested separately at local institutions. Many treasurers use IPTIP not only as their best investment tool, but as an alternative to repurchase agreements over a weekend, particularly when the level of funds is too low to justify the paperwork and custodial expense of transactions.

LIQUIDITY IPTIP funds can be deposited in any amount, earn a competitive rate of return and still be available as needed to pay bills as they are presented. There is no need to monitor investment maturities or to update collateral, etc. Funds are always available when they are needed.

SERVICE Participants now can execute repurchase agreements with a financial institution of their own choice and have underlying securities held in a segregated custodial account via the Federal Reserve's book entry system.

Participants can also use their accounts to hold any book entry security purchased for their own portfolio. The fee for each security transaction, which covers both deposit and withdrawal, is $12.50. This is roughly half the cost assessed by most custodians.

DIRECT DEPOSIT ADVANTAGE Participants can receive deposit of sales, income and motor fuel tax distributive funds directly from the state into their account. This permits access 4 to 5 days earlier than if they receive distribution through the mail.

CHECK WRITING Participants will be able to disburse funds against their Pool balance to pay their bills. The custodian will establish checking accounts for each participant investment account, upon request of the public treasurer. The participant will then be able to pay its bills through the Pool.

IPTIP is the answer to the public treasurer's investment problem. For application forms, further information, or to arrange for an IPTIP Field Representative to visit you, call the toll-free IPTIP hotline at 1-800-346-7414. •

September 1989 / Illinois Municipal Review / Page 5