Local Officials — Help Protect Your Investment
By JUDITH E. MADONIA, President
Illinois Municipal Treasurers Association
Does your municipality have a formal investment
policy; one that you can cite and explain whenever
necessary? An investment policy that has been thoroughly reviewed by your governing body; signed, and
filed as an ordinance? Having an official investment
policy is the best protection against risky or unwise
investments. While all of the risks cannot be completely
eliminated, last December's debacle by Orange
County, California can be avoided, providing that the
types of investments stipulated in the policy meet the
"prudent person" standard. The portfolio objectives
must be clearly stated and priorities such as safety,
liquidity and rate of return should be identified.
Responsible municipal treasurers prefer to have an
official and open policy under which all public funds
are invested. The parameters set by such a policy for
making investments allows the treasurer to determine
the types of securities to be acquired; and not necessarily those recommended by a broker. Brokers sometimes can be overwhelming and persistent, and if there
is the additional pressure of local government needs,
the temptation to purchase unusually high yielding or
complex investments is hard to resist, resulting in a high
risk portfolio.
Another sure-fire protection for the public's money
is to have a knowledgeable and well-trained treasurer
at the helm working with the portfolio. We should all
support and encourage our municipal treasurers to participate in such programs as the Illinois Municipal
Treasurers Certification Program. This is an intensive
training program conducted in conjunction with Eastern Illinois University. It emphasizes sound investment
practices, analysis of current market conditions, and other important governmental finance issues. A Certified Illinois Municipal Treasurer is a professional finance official who's first responsibility is the protection
of the public's funds.
The Illinois Municipal Treasurers Association encourages safe investment practices and urges every
municipality, large or small, to have an investment policy that has been thoroughly reviewed and approved.
The Association also urges every treasurer to participate in the previously described certification program
as a means for ensuring continued professional growth.
A copy of a "Model Investment Policy" may be
obtained from:
MTA US & C, 1229 Nineteenth Street, N.W.,
Washington, D.C. 20036, (202) 833-1017, Fax
(202) 833-0375
Illinois Municipal Treasurers Association, P.O.
Box 1382, Springfield, IL 62705, (217) 793-2265,
Fax (217) 698-1998.
Information about the Illinois Municipal Treasurers
Association Certification Program is available from:
Eastern Illinois University, School of Adult and
Continuing Education, Charleston, IL 61920,
(800) 446-8918.
Page 20 / Illinois Municipal Review / March 1995
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