Risk too great for KLC Money Market investment

The Corbin City Commission has elected to hold off on investing money received through the American Rescue Plan into the Kentucky League of Cities Money Market.

At a special called meeting Tuesday morning, commissioners did not make a motion to move the approximate $932,000 into the investment pool.

The city received the money in July as part of the American Rescue Plan, which distributed funding to 360 smaller cities across Kentucky.

When the money was first released, Gov. Andy Beshear announced the funding for the cities with populations under 50,000.

“Local governments have been important partners in our battle against COVID-19, and we know they have taken on great hardship and expenses to protect our people,” said Beshear. “I’m relieved our eligible city governments will receive these funds, because if we are to build a better Kentucky, we must ensure our communities are supported and positioned for growth.”

Corbin is expected to receive more than $1.856 million with a second distribution set to be released in March.

The commission was tasked with deciding how and where to invest the money.

One option was the Kentucky League of Cities Money Market. Despite the money market’s accessibility, the risk of the investment outweighed the benefits, according to the city commission.

City Attorney Bob Hammons told commissioners, “It is a bigger risk with your money. If everything goes bad, this will go bad.”

Commissioner Seth Reeves said, “I know that banks are very low interest rate, but they are also protected.”

Other options available to the commission include CDs (Certificate of Deposit) or a checking/savings account at a local bank.

CDs restrict access to the money and was not one of the options given consideration at Tuesday’s meeting.

The commission could not take any other action on the matter because it was a special called meeting. According to the Kentucky Open Meetings Act, only items specifically listed on the agenda at a special called meeting by a public agency can be discussed during that meeting.