The Macomb County Treasurer’s Office is seeking to revise its investment policy so it can pool investments with local communities, increase the maximum length of investments to five years and develop a “model” policy.
Deputy Treasurer Joe Biondo appeared before the Finance, Audit and Budget Committee of the county Board of Commissioners on Tuesday to present proposed changes to the policy, which two years ago received a major uplift.
“We’re coming back asking for additional policy updates because we believe it’s in the best interests of Macomb County residents to do this,” Biondo told the board. “I look at this as good public policy.”
The board voted at its meeting in the county Administration Building in Mount Clemens to “receive and file” the proposal, which will be presented again at an upcoming finance committee meeting.
Biondo said once the policy is approved, it will be submitted by Treasurer Lawrence Rocco to the National Association of Public Treasurers for approval as a “model investment policy.”
“It’s the right thing to do for the residents but also we can use it as an opportunity to submit it for certification as a model investment policy,” Biondo said. “That would be a nice public relations thing for the county to help improve the county brand image, telling people, ‘Hey, this is us looking above and beyond on things that aren’t a problem.’ Why wait for a problem before making things better is sort of the mentality in the Treasurer’s Office?”
“What you will see … is a bunch of restrictions that we’re putting in, really guardrails that you would want in an investment policy. These are all things that would limit what any treasurer can do. There are things that you expect to see in a model investment policy.”
The highlight of the revised policy is it would permit cities, townships and villages to join with the county to pool dollars to create larger investments to achieve higher rates of return, Biondo said after the meeting. County lawyers are researching whether school districts can be included, he said.
“By pooling money together you have an opportunity to do bigger types of investments and get a higher return,” he said.
Clinton Township Treasurer Paul Gieleghem believes the pooling will benefit smaller communities more than his township, the largest in the state by population. But he said he supports adding another option for him to consider in investing township dollars. The township already invests with two other pools.
“Having more compliant funds, safe vehicles to invest in is a good thing,” he said. “I think we would look at it.”
Biondo expects at least half of the local communities in the county to participate, based on feedback.
Also in an effort to gain higher returns, the proposed policy suggests increasing the cap from three to five years for the maturity date on investments, Biondo said.
The board panel also Tuesday gave preliminary approval to Rocca’s request to add two more financial institutions to its roster for liquid investments such as certifies of deposit. It will increase its number of eligible institutions to 17.
The two new institutions are Independent Bank, which claims to be the largest bank in Michigan headquartered in the state (Grand Rapids), and Dearborn-based DFCU Financial Credit Union, the second credit union on the county’s investment roster. DFCU was formed in 1950 as Ford Engineering Employees Credit Union.
The number of financial institutions on the county roster has increased from 11 three years ago due to the county’s revenues growth in recent years, Biondo said. The county budget, including state and federal dollars, last year exceeded $1 billion for the first time.
The amount of money currently invested is $830 million, with a peak of $890 million last October, Biondo said. Two years ago, the top figure was about $700 million.
Rocca’s office invests virtually all money that comes into the county except for pension and retirement funds, which are invested by a board.
About 60% invested by the Treasurer’s Office is in the safest investment, U.S. Treasuries. The county, under its policy, can invest up to 5% through each of the local financial institutions.
“We did the overhaul,” Biondo said in reference to the idea for a second revamp. “Now why don’t we do the right finish on it in terms of making it a model investment policy?”
Biondo, Rocca and Christina MIller, who is deputy treasurer of investments, were certified two years ago as public fund investment managers, Biondo said. Their instructor in the program, Greg Prost, also provided advice on updating the policy, Biondo said.
Feedback from the board was positive.
“I love the investment pool,” committee Chairman Joe Sabatini of Macomb Township said. “I think it’s a fabulous idea. … I’m glad that you expanded on the ethics ordinance and added some additional language.”
The new policy would add language beyond the county’s existing ethics ordinance that applies to Treasurer’s Office staff.
Governmental treasurers must follow regulations in Public Act 20 of 1943. The top priority is to keep the funds safe and the second priority is to ensure enough funds are available for the unit to spend. The third priority to achieve the highest rate of return.
The proposed updated policy includes an extensive, 7-page glossary of terms.