Carbon County officials are joining a government financial trust in the hopes of getting a better interest rate during this uncertain time.

Last week, the county commissioners approved a resolution authorizing the process to begin to join the Pennsylvania Local Government Investment Trust, which serves over 3,000 public entities, as a way to salvage some of the interest rate they lost over the last year.

Carbon County’s current funds, which total $42.5 million, with $15.8 million being in the general fund, is held on deposit in Mauch Chunk Trust Company.

County treasurer Ron Sheehan said that the interest rate at Mauch Chunk is set at Fed funds minus 25 basis points.

“In the past, that has served us quite well,” he said, but noted that recent months have proved challenging.

In August, Carbon County was receiving 2 percent interest, but by October, that rate had dropped to 1.5 percent.

In March, as the pandemic began gripping the nation, the fund dropped twice, first to 1 percent and then a few weeks later to 0.25 percent, where it stands now.

“As with everyone else, Carbon County has felt the financial strain and we have been seeing some strain on our revenues such as parking, parks and recreation, filing fees, fees for services within the offices while still providing all the county services,” Sheehan said. “Our county budget was based on 1.5 percent interest revenues.”

If this was normal times, the decrease in interest rates would mean the county should begin shopping local banks for certificates of deposits and better interest rates, but the process, with the need for liquidity in the funds and practicing social distancing compounded the problem.

“Because of the uncertainty of the county’s finances, it was decided these funds needed to stay liquid,” Sheehan said, adding that the reason for the timing was also the solid numbers the commissioners are securing for the capital projects such as the Susquehanna Street building project. “That’s where the bulk of the movement may be.”

Looking forward, Sheehan said the county may do CD transactions with local banks once it is feasible to do so.

When the anticipated closing happens on July 8, the county is looking at moving approximately $950,000 from the operating reserve funds, $750,000 from the parking lot funds, $5 million from the general fund and $8 million for capital projects into a PLGIT Prime account and will receive 0.46 percent interest with no fees. An additional $5 million may be put into a one-year CD at an interest rate of 0.6 percent.

Sheehan noted that these dollar figures may be more or less pending the rate the county is quoted when going to settlement.

The commissioners and Sheehan both stressed they are only making this move away from Mauch Chunk Trust because the need for liquidity and a higher interest rate right now.

“We have always had a good relationship with them,” Sheehan said, noting that Carbon has used Mauch Chunk Trust as its depository since 2004.