To: Board of County Commissioners
Through: Director Name, Title, Department
Prepared By:
prepared
Michael Westerberg, Treasurer, Treasurer’s Office
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Subject:
title
10:30 AM *Annual Financial Institution and Investment Policy Resolution and Discussion on Increasing Treasurer’s Authority to Purchase Debt Securities
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Purpose and Request:
recommended action
The Treasurer requests the Board of County Commissioners (“Board”) approve the financial institution and investment policy resolution accompanying this report, including the language granting the Treasurer broader authority to purchase debt securities meeting at least certain specified requirements under the Board of County Commissioners authority in C.R.S. §24-75-601.1(1)(a-b).
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Background and Discussion: The Board annually adopts a resolution establishing the banks and other institutions where county funds can be deposited by the Treasurer. The Board also has authorized Treasurer Westerberg to invest county funds in certain securities as allowed by state statute, subject to certain conditions. The current approved language can be found in Resolution No. 24-134, approved by the Board in May of 2024. The statutory authority for Resolution No. 24-134 comes from C.R.S. §§24-75-601.1, 30-10-708. Last year’s resolution passing was accompanied by a study session discussion because the former version of the stated resolution had not been substantially updated in many years. Last year’s resolution passing helped clear up multiple conflicting resolutions and give more clear investment authority and instructions to Treasurer Westerberg.
The investment authority granted in Resolution 24-134 generally follows the statutory limits in C.R.S. §24-75-601.1: debt securities having a maturity date of five years or less from the date of purchase and a par value of five million dollars or less may be purchased with County funds by Treasurer Westerberg. In the third quarter of 2024, Treasurer Westerberg purchased a Treasury Bond that was technically outside of the authority granted to him under Resolution No. 24-134, on the assumption the Board could retroactively approve said bond purchase, and that said purchase was in the best interest of the County and the residents of the County. After discussion was held between the Board of County Commissioners and Treasurer Westerberg, the Board agreed to approve the purchase of said Treasury Bond through a consent agenda approved at the November 12, 2024, regular meeting. The Board further noted, during the October 1, 2024, discussion, Resolution 24-134’s language was inadequate to avoid future situations from arising where the best interest of residents and the County were in conflict with the authority granted under Resolution 24-134.
Treasurer Westerberg comes now to the Board with suggested language to add to Resolution 24-134 to increase the maximum maturity period of debt securities meeting the requirements of C.R.S. §24-75-601.1(1)(b) to ten years. The Board noted during the October 1, 2024, discussions, a framework was needed to allow Treasurer Westerberg to purchase, on occasion, these debt securities as had been previously discussed that were within the best interest of the County and residents but no individual Commissioner felt comfortable making a decision in the moment of whether or not a debt security should be purchased or not. The Board noted a general level of trust of Treasurer Westerberg to make these decisions but also noted that trust did not extend beyond Treasurer Westerberg’s tenure as the Arapahoe County Treasurer. Therefore, Treasurer Westerberg also proposes language that allows this elevated maturity period only so long as Treasurer Westerberg holds the office of Arapahoe County Treasurer. A copy of the proposed language is attached to this document.
Alternatives: The Board could approve the annual resolution with the same language as last year’s Resolution 24-134 and continue to meet its statutory requirement. However, such approval would not solve the problem noted by the Board in our October 1, 2024, discussions, and investments could be missed out on that would positively affect the bottom line of the County as a whole. The Board could also seek differing language than what is proposed in the attachment. Without knowing such language, it is impossible to predict whether or not the previously noted problem would be solved by such language.
Fiscal Impact: Without approval of some form of change to the language in Resolution 24-134, it is possible, but not certain, that incredibly safe debt securities would not be able to be purchased by Treasurer Westerberg when found. Those debt securities could increase the overall investment returns the Treasurer’s Office is able to gain in any year in question.
Alignment with Strategic Plan:
☒Be fiscally sustainable
☒Provide essential and mandated service
☒Be community focused
Concurrence: The Treasurer’s Office agrees with the language in question. Finance has yet to express any opinion on the language in question, but I believe it could be reasonably assumed that the potential for more investment interest collected in any given year will not be frowned upon by Director Weaver. No other parties, to my knowledge, outside those listed here have expressed any interest in this issue nor have an opinion concerning its approval.
Resolution: Attached is a copy of the draft resolution.