City puts investment policy in writing

Marney Simon
Staff writer

A local citizens group has questioned if the city of Braidwood is financially stable. But, city officials insist that things are looking good as the new fiscal year kicks off.

On April 24, the city’s outsourced finance director Maria Alexychuk gave a vote of confidence to the city’s financial practices, telling those gathered at the regular meeting of the City Council that the books look good for the city.

“There have been questions in the past, and, right now, as it stands, it appears that the city is fiscally responsible,” Alexychuk said “It’s sound at this point in time. We’ll have additional tax money coming in.”

Fiscal year 2019 began on May 1. While the new fiscal year is underway, the city has yet to pass the new budget. An audit of the fiscal year that ended on April 30 is due later this year.

In the meantime, the city is working on bolstering its financial standing, starting with the adoption of a new investment policy.

The new policy maps out ways for the city to make investments to provide the highest investment return with the maximum security, while also meeting the daily cash flow demands of the city. The policy conforms with the IRS code of 1986.

“This investment policy just kind of sets an outline for the city, if you guys chose to do any types of investments. It outlines what you are allowed to invest in, what you aren’t allowed to invest in,” Alexychuk said. “Also, it states a conflict of interest, so no one on the council can get involved personally with the investments and gain from that.”

The policy applies to the investment of all funds, except for pension funds.

Per the policy, prohibited investments include commercial paper of any corporation, repurchase agreements of government securities, derivative products, leveraging of assets through reverse repurchase agreements, or direct investments in tri-party repurchase agreements.

The policy allows for cash balances in funds to be consolidated to maximize investment earnings. Investment income will be allocated to the various funds based upon their respective participation and in accordance with generally accepted accounting principles.

Per the new policy, the mayor will maintain a list of financial intuitions authorized to provide investment services.

The mayor is responsible for establishing and maintaining an internal control structure to make sure the city’s assets are protected from loss of funds arising from fraud, employee error, theft, misuse, misrepresentations by third parties, unanticipated changes in financial markets, or imprudent actions by city employees. The mayor can also rely on services from an independent CPA in preparing the annual audit or financial statement for internal control purposes.

The policy is in accordance with the provisions of the Public Funds Investment Act. The adoption of the measure is effective as of April 10.