Dyersburg State Gazette: Local News: Finance Committee ...

The Dyer County Finance Committee met for the third consecutive month and was finally able to recommend an investment policy for the County Commissioners to approve at their next scheduled meeting on Monday, Nov. 14. The policy was drafted by county attorney Michael Gauldin in consultation with the Finance Committee, the Tennessee Comptroller's Office, the County Technical Assistance Service and Tennessee Code Annotated.

According to Gauldin there were three deviations from what he had heard at the previous Finance Committee meeting on Sept. 29 and the final policy he drafted. The first difference was that the committee had recommended in its previous meeting that the county make investments in bonds that are rated A or higher and that the county should not hold onto any bond that dropped below a BBB- rating. Tennessee Code Annotated 5-8-301 provides that counties cannot invest in any bond rated less than A. John Cloar, a financial advisor for Edward Jones, expanded on that restriction by pointing out that TCA only requires the minimum rating from one of the three nationally recognized rating services.

In previous meetings there was discussion of the time-sensitive nature of investing in bonds and that it was not practical to approve each bond prior to purchase. One of the goals of recent meetings was to give Dyer County Trustee Judy Patton a framework that she could go by in order to make those investments on behalf of the county with the understanding that she would periodically report the investments back to the committee. However, Gauldin pointed out that TCA also provides that, "No idle funds are to be invested for a maturity of greater than two (2) years, unless first the county legislative body shall appoint an investment committee as authorized by ? 5-8-302 or ? 5-21-105, and such investment committee shall give its prior approval. Such investment committee may approve investments in maturities of up to five (5) years." Any investment beyond five years must be approved the Tennessee Comptroller's Office.

Dyer County Mayor Richard Hill was in agreement with the change saying that five heads are better than one.

"This is checks and balances," said Hill. "It is better to be over cautious rather than not cautious enough."

A discussion ensued as to what method would be used to get the committee together. The committee agreed to meet when necessary to approve the investments as Hill pointed out that only a majority of the members of the committee (three) needed to be present to make a decision.

The last difference was in nonconvertible debt securities, which require ratings in the highest category by at least two nationally recognized rating services as opposed to one as is the case with bonds. Commissioner John Uitendaal brought up for discussion the fact that this section of TCA was for the investment of idle funds and asked if there was flexibility within the law since the funds being discussed for investment he did not consider to be idle funds.

"These are the only codes related to investing funds," said Gauldin, further adding that the county can only do what the state has allowed it to do.

The committee unanimously passed the drafted investment policy with minor changes on a motion by Commissioner Jimmy Hester and a second by Uitendaal.

Source: http://www.stategazette.com/story/1776280.html

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