Selectmen gather information on setting new investment policy
By Tom Relihan
WILBRAHAM -- The Wilbraham Board of Selectmen met on Dec. 14 at Town Hall where they discussed a new written policy on investments with Town Treasurer Thomas P. Sullivan. The policy was recommended in a letter from the independent auditor who performs an annual review for the town. The suggested changes in procedures were raised in response to investment problems encountered last year by 12 to 15 neighboring towns and cities.
Sullivan explained that communities such as Springfield, Belchertown and East Longmeadow had made some investments in the past year that ultimately were not safe, such as Springfield, which invested in real estate backed securities, the market for which then declined. This resulted in a loss of substantial monies and required the Attorney General to become involved to ensure reimbursement.
According to Sullivan, the unsafe investments were made due to increased financial pressures on the cities and towns to make the most money they could on said investments, leading them to invest in funds that would provide the most interest but also had high risk attached to them.
The new policy was recommended because the auditors felt that the town needed written guideline on this issue. The resulting document will be used by the auditors to determine how safely the town's investments are being made and whether or not the treasurers are following the established policies.
Sullivan said that with the exception of some formal reporting procedures, the recommended policy guidelines were things he was "doing already."
"What this is saying is that if we're going to invest, safety is the number one item on the agenda," Sullivan explained. "You want to make sure you're going to get your principal back, then the next is liquidity, and the third objective is yield, as opposed to wanting the highest return possible first."
No decision was made on the policy during the meeting.
The selectmen did approve reserve fund requests for both veterans assistance and the state primary and special elections at the meeting. The Veterans' Benefits Program, Chapter 115, was granted $7,000 for medical care and other expenses, and $12,568 was transferred to cover various expenses for the elec