PENINSULA : School District Alters Investment Strategy

Hoping to earn more money, Palos Verdes Peninsula Unified School District trustees have decided to invest up to $3 million in U.S. Treasury notes rather than in a county investment pool.

Trustees in a 5-0 vote Monday decided to invest $500,000 in one-year notes and $1.5 million in two-year notes. In the next 45 days, after the Federal Reserve is expected to re-examine interest rates, the school will decide how to invest another $1 million.

Two-year Treasury notes earn about 6.75% interest. School district money in the county pool, an investment fund of money from school and special districts, earns about 4.5%. The higher interest rates should net the school district about $150,000, school board President Joan Davidson said.

Districts often invest in the county pool because about half the investments are for 90 days, and the district money is more accessible. But Palos Verdes can afford to tie up its money for a longer time and earn more interest because of a $7.2-million surplus from the sale of undeveloped land once targeted for a high school.

About $2.1 million has already been earmarked to buy computers and to repair buildings in the next year. Davidson said trustees may invest the remaining money in Treasury notes or at a later date in a state pool that is similar to the county pool.