By JUDITH E. MADONIA, President
Illinois Municipal Treasurers Association

Does your municipality have a formal investment policy; one that you can cite and explain whenever necessary? An investment policy that has been thoroughly reviewed by your governing body; signed, and filed as an ordinance? Having an official investment policy is the best protection against risky or unwise investments. While all of the risks cannot be completely eliminated, last December's debacle by Orange County, California can be avoided, providing that the types of investments stipulated in the policy meet the "prudent person" standard. The portfolio objectives must be clearly stated and priorities such as safety, liquidity and rate of return should be identified.

Responsible municipal treasurers prefer to have an official and open policy under which all public funds are invested. The parameters set by such a policy for making investments allows the treasurer to determine the types of securities to be acquired; and not necessarily those recommended by a broker. Brokers sometimes can be overwhelming and persistent, and if there is the additional pressure of local government needs, the temptation to purchase unusually high yielding or complex investments is hard to resist, resulting in a high risk portfolio.

Another sure-fire protection for the public's money is to have a knowledgeable and well-trained treasurer at the helm working with the portfolio. We should all support and encourage our municipal treasurers to participate in such programs as the Illinois Municipal Treasurers Certification Program. This is an intensive training program conducted in conjunction with Eastern Illinois University. It emphasizes sound investment practices, analysis of current market conditions, and other important governmental finance issues. A Certified Illinois Municipal Treasurer is a professional finance official who's first responsibility is the protection of the public's funds.

The Illinois Municipal Treasurers Association encourages safe investment practices and urges every municipality, large or small, to have an investment policy that has been thoroughly reviewed and approved. The Association also urges every treasurer to participate in the previously described certification program as a means for ensuring continued professional growth.

A copy of a "Model Investment Policy" may be obtained from:

MTA US & C, 1229 Nineteenth Street, N.W.,
Washington, D.C. 20036, (202) 833-1017, Fax
(202) 833-0375
Illinois Municipal Treasurers Association, P.O.
Box 1382, Springfield, IL 62705, (217) 793-2265,
Fax (217) 698-1998.

Information about the Illinois Municipal Treasurers Association Certification Program is available from:

Eastern Illinois University, School of Adult and
Continuing Education, Charleston, IL 61920,
(800) 446-8918.

Page 20 / Illinois Municipal Review / March 1995