[Editor's Note: This is the third and final report of the Commission work session on March 23, 2021.]

By Mary Alice Murphy

Grant County commissioners heard two presentations prior to discussing a new county investment policy at the second work session of the month on March 23, 2021. The previous presentations can be read at https://www.grantcountybeat.com/news/news-articles/63903-grant-county-commissioners-hear-presentations-at-second-work-session-of-month-032321-part-1 and https://www.grantcountybeat.com/news/news-articles/63913-grant-county-commissioners-hear-proposal-for-a-county-health-and-human-services-department-032321 .

Grant County Treasurer Patrick Cohn said he has worked hard on the investment policy. "I talked to a lot of other county treasurers across the state, as well as our financial advisor, Larry Lundberg of Moreton Capital."

District 3 Commissioner Alicia Edwards asked if the investment policy was simply revised or fully new.

Cohn replied that the whole thing was new. "The purpose is for the Board of County Commissioners and the treasurer to clarify guidelines and objectives in determining what is best to do with the county's monies."

He noted that under investment authority neither the county treasurer nor the County Board of Finance has sole policy-making authority over county investments. The County Commission members are ex officio, without additional compensation and constitute the County Board of Finance, with the clerk, also without additional compensation, acting as the clerk for the Board of Finance.

Section III stated the Advisory Investment Committee (AIC) shall be established, consisting of the county treasurer as chairman/chairwoman during the election term, the deputy treasurer as vice-chair during the election term, with the county manager for a one-year term and the county finance director for a one-year term.

The AIC would meet at least quarterly, following the Open Meetings Act. The committee shall review a listing of all future projects/expenditures provided by the county manager or finance director in order for the committee to determine the liquidity requirements. All members of the committee must become familiar with applicable laws and regulations regarding investment of public funds and to review the county's investments. Any action would be presented to the commissioners at the next regular meeting.

Section IV stated the investment would be made with the emphasis of the county's investments to prioritize safety, liquidity and yield.

Section V lays out in detail the investment objectives of safety, liquidity and yield.

Section VI presents the investment guidelines per state statute.

Section VII gives the standards of prudence.

Section VIII addresses the safekeeping and custody of county funds.

Section IX talks about ethics and conflicts of interest for internal standards.

Section X is cash management, which has the treasurer and manager regularly meeting.

Section XI addresses reporting policies from any investment broker or financial advisory doing business with the county, so that reports are presented quarterly and annually.

Section XII is internal controls to prevent losses of public funds, through fraud, employee error or misrepresentation by third parties, or through unanticipated market changes, conflicts of interest or imprudent actions by employees and officers of the Treasurer's office.

Section XIII states the county's investment portfolio shall be designed and managed with the objective of obtaining a market rate of return, commensurate with the investment risk constraints and shall remain diversified.

Section XIV is implementation of the investment policy, which may be amended to allow for changes in state law or any other regulatory requirements governing investments.

Section XV provides for the policy to be distributed to committee members, the Board of Finance, approved depository institutions, the Department of Finance and Internal Auditors (upon request).

District 1 Commissioner and Chair Chris Ponce asked why the county manager and finance officers had only one-year terms. "I think the committee should always be these four."

All the commissioners expressed that they had had the same question.

Cohn said it would simply name the manager and the finance officer every year.

District 5 Commissioner Harry Browne said if someone leaves either post, "wouldn't that be the time to name a new one?" He also asked if Cohn had considered putting a county commissioner on the committee.

"I did think of that," Cohn replied, "but because the commissioners are also the Board of Finance, I saw a conflict of interest."

Browne said he thought it was the same with other boards that commissioners serve on. "For instance, when I was on the Regional Dispatch Board, I could vouch for certain items."

District 4 Commissioner Billy Billings said it seemed to him that since the commissioners are the Board of Finance, there should be meetings between the AIC and the Board of Finance.

Edwards said when she thinks of making an investment, she has a plan and a goal. "I decide whether to reinvest any interest or spend it. We, as the county, are required to have a 3/12ths reserve that we can't spend. I assume that money is part of the investment portfolio."

Cohn said his understanding is that the county retains the interest each month and credits the General Fund with the accrued interest.

Edwards said she understands the need for the investment policy, but "do we have a strategy for our investments, such as will the money be used for a specific item?"

County Manager Charlene Webb said that they couldn't answer that question at this time. "He will be meeting with Larry Lundberg. There is a lot of statutory responsibility with the AIC reporting to you to give you transparency. After seeing the reports from Lundberg, the new policy made more sense to me and made me feel much better."

Edwards said she was in favor of having a commissioner on the advisory committee. "If we don't hear a report initially, I would like to hear the quarterly report. I'm pleased we're heading into no darkness."

Browne asked what leeway there is in state law about something along the lines of local benefit. "I would rather put our money into our community instead of sending it to New York."

Webb read a portion of the statute.

"So, it's almost the opposite of what I'm saying, because we have to allow all interested entities," Browne said.

Cohn said he did see that "we need a way to invest into our community."

Browne gave the example of having two banks, with one having investments in local infrastructure, but the other having municipal bonds in Pennsylvania and California.

Webb said the intent of state statute is equitability in distribution. "We cannot give one more money than another."

Billings said Browne has a valid concern. "Just because a bank has a local presence, it doesn't mean they are invested in our county or state. Sounds like a need for a change in state statute."

Cohn said that even though interest rates are low, "we're doing well on interest rates where we are invested."

Billings said the treasurer develops the Section 12 internal controls. "Can the treasurer develop outside controls?"

Cohn said that might require a resolution.

Webb noted that "our treasurer's office may or may not have internal controls."

Edwards said perhaps they don't need to be written down, because the audit provides the checks and balances.

Browne said he had heard some bifurcation in county finance. "The treasurer sends money to a fund that the manager can use. The use of the money should be written policy. It may be the responsibility of the Board of Finance to have some policies in place."

Cohn said in Section X, cash management, the manager's office and the treasurer's office jointly prepare and maintain an ongoing cash management program. It involves the preparation of a regular report that includes projects of cash revenues and expenditures. The manager's office shall notify the county treasurer on a regular basis of county expenditures and of any large expenditures anticipated so that cash liquidity can be planned. "We stay in communication, so a balance remains."

"With this policy, I wanted to make sure you as the Board of Finance and as the Commission, as well as the public know what's going on. My goal is to have this policy for approval at the April regular meeting."

Billings, District 2 Commissioner Javier "Harvey" Salas, Browne and Ponce has no reports. Edwards said she really likes these work sessions.

The commissioners adjourned the meeting.