Covenant updated on laddering and insuring of investments

RANCHO SANTA FE — At the Feb. 4 Rancho Santa Fe Association’s board of directors meeting, a segment of the manager’s report addressed the laddering and insuring of investments. According to Association Manager Bill Overton, this item was officially completed.

Before diving into specifics, Overton first reminded everyone how the Association renegotiated all of its banking relationships with Union Bank a few months ago. In fact, they researched various institutions. However, renegotiations with Union Bank resulted in a better loan and lower banking fees.

“And we also embarked on matching our restrictive reserves to independent bank accounts for each entity,” he said.

Those entities included the RSF Golf Club, RSF Tennis Club, RSF Association and the Community Enhancement Fund. Don May, the Association’s finance and operations manager, along with Matthew Ditonto, their controller, championed this and more.

Overton said that once May and Ditonto made sure they had all their liquidity needs covered, about 80 to 85 percent of those funds became laddered certificates of deposit which were highly rated and all FDIC insured.

“Now it sounds easy but it’s actually harder than it sounds because FDIC insurance caps at $250,000 per instrument,” Overton said. “We have more than $11 million invested so we had to buy a lot of CDs.”

Overton pointed out that they are at various maturities so that the Association will always have the liquidity means it requires.

“This is important. It means that all Association funds that are invested for future needs are protected by FDIC insurance or by a brokerage account where we have 100 percent liquidity,” he said. “It’s a long time coming, and we got it done.”

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