"It has become much more extensive than it was a few years ago," says Tanja Dandl, the treasurer of the Graefelfing community.
That relates to the sums it manages - and the effort that goes with it.
The municipality's fixed assets are currently around 260 million euros, spread across 21 banks.
A responsibility that can sometimes cost you sleep.
Gräfelfing
- "Chamberlain", that sounds good. And yet the official title “Head of the financial administration of the municipality of Graefelfing” is a better match, with which Tanja Dandl now spends a large part of her working day. Because she and her team constantly have to juggle high amounts of millions in order not to lose money in times of negative interest rates.
The year 2020 meant a quantum leap for the Gräfelfingen municipal finances - not the first, but the largest so far. The total volume of the budget shot up in the final annual accounts to 333 million euros. Until then, the previous year 2019 was an astronomical record with 225 million euros. So now 108 million euros more - within a year. The reason was the same that has applied to Graefelfing's financial well-being for decades: an exceptionally good development in trade tax income, which in turn is closely linked to a clever economic policy.
In any case, at the beginning of 2021 Tanja Dandl was embarrassed to invest 260 million euros, the reserve of the municipality of Graefelfing, sensibly. "The top priority is safety," says Tanja Dandl time and again. According to the rules of procedure, the municipality has to invest these funds “safely, profitably and taking into account timely availability”. Fundamentally, fixed-income securities (Pfandbriefe, municipal bonds, bonds), fixed-term deposit accounts, overnight money accounts or savings accounts can be considered as investment forms.
In view of the high investment sums, Tanja Dandl and Mayor Peter Köstler got the backing of the local council. The committee adopted “investment guidelines” in April. They regulate the permitted investment forms and sums as well as the responsibilities. As before, the fund, under the direction of Stefanie Bierlmaier, prepares the investment offers in consultation with the treasurer, and the mayor signs them. Twice a year, a report on the municipal facilities must be submitted to the finance committee and the municipal council.
The banking landscape in which Tanja Dandl, Stefanie Bierlmaier and their colleague Christine Wochinger can move with “their” millions has become smaller. In the past, deposit protection also applied to municipalities. This was changed in 2017 in order to empower the communities to be more responsible and knowledgeable. As a result, Graefelfing got out of private banks - regardless of how good their rating was. This leaves only banks that have institutional security, such as savings banks or Raiffeisen banks. The bankruptcy of the private Greensill Bank, in which 50 German municipalities lost hundreds of millions of euros in the spring of 2021, confirmed this path.
He is still a rocky one.
Tanja Dandl says: "We have set out in writing that we only invest funds with appropriate security and according to the rating of the three major agencies Standard & Poor's, Moody's and Fitch." The upper limit per institute is 45 million euros, each individual amount 10 million Euros to create a diversification.
Because the offers are often very short-term, the chamberlain cannot go to the municipal council with every system, but has to decide together with the mayor herself.
That is why the guidelines now in force were so important.
However, deviations from this must be approved by the municipal council.
In times of negative interest rates, Tanja Dandl says: "We are happy when we don't have to pay anything for our money." For some investments there is 0% interest, in the worst case also in the long-term deposit area. The community only gets 0.3% interest for the best. “There is not much to be gained,” Dandl concluded. Because the safer the investment, the less interest it pays. The municipality only has to accept negative interest rates for overnight money accounts. “The bottom line is that we're easily in the black,” says the chamberlain.
On the one hand because of the security, on the other hand to have liquid funds available if necessary, Tanja Dandl and Stefanie Bierlmaier invest the money in multiple graduations, currently at 21 different banks.
It is constantly important to compare offers, to keep an eye on the current rating for each bank in order to reallocate if necessary, and not to miss the regular due dates because the money then has to be re-invested - if the municipality still does not need it.
Tanja Dandl is aware that she is experiencing a transformation in the job of the municipal treasurer.
But she lives it too, with full vigor.
And great security.
