WEST BLOOMFIELD — The township’s investment policy will get a closer look and possibly even some changes, according to members of the Board of Trustees.
Supervisor Michele Economou Ureste told the Beacon in late February that some board members are hoping to review the policy in March.
Currently, Treasurer Teri Weingarden has sole and final authority on how funds are invested. But Ureste said she’d like to require multiple signoffs from the supervisor and clerk on investments with premiums exceeding $10,000.
“I’d like to have some checks and balances built into the investment policy,” the supervisor said.
The decision comes as the township has been racing to sell a $2.86 million real estate mortgage investment conduit (REMIC) investment involving pools of mortgage-backed securities.
Some officials at a Jan. 28 board meeting said that Weingarden’s decision to make the investment last fall broke the township’s rules on investing.
Trustee Larry Brown said a 1998 Michigan Department of Treasury letter could categorize this particular investment as illegal. Clerk Cathy Shaughnessy said the investment dealt with 30-year mortgages and is therefore against the township’s investment policy, which tends to favor more short-term investment vehicles.
At the meeting, Weingarden said that she did the investment through Multi-Bank Securities because she wanted to diversify the township’s assets, especially in a time of low interest rates.
While she said didn’t contact the township attorney in advance on the investment’s legality, she said the broker read the township’s investment policy and told her the deal was legal.
Trustee Howard Rosenberg criticized the move.
“He’s a salesperson,” he said concerning MBS. “He sells stuff. He is not a legal advisor.”
At the January meeting, township attorney Derk Beckerleg said the township should sell the investment as soon as possible and revisit its investment policy to make sure everyone is aware of what is in it. In February, the township board voted to sell the investment by the end of that month.
After the meeting, Ureste predicted that the potential loss on selling the REMIC investment could exceed $100,000.
In contrast, Weingarden said Feb. 26 that the sell order has been placed on the REMIC investment and that the township “recouped 100 percent of our initial investment,” with zero loss, and it will receive some interest.
Weingarden said the REMIC investment would have produced a favorable profit, and she said it was legal. She said she supported selling it because the investment is a “gray issue” with regard to the township’s own policies.
Weingarden said she anticipated the investment to pay off within 16 months, whereas the current township policy sets a 10 percent maximum on investments lasting more than a year on average.
She said she is hoping for a longer maturity, adding that the current policy is quite restrictive compared to other communities.
“I am actually requesting that the township board expand the duration of investment,” she said. “With a declining rate environment, it’s very difficult to produce any kind of yields.”
In response to Ureste’s idea to require multiple signoffs on investments with premiums exceeding $10,000, Weingarden said she would not approve. The treasurer said premiums are often high in the current investing market.
“It would basically be making it impossible for me to make timely decisions on investments,” she said.
Ureste disagreed, saying that many township investments have premiums that fall under the $10,000 threshold.
Learn more about West Bloomfield at www.wbtwp.com or by calling (248) 451-4800.
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