Mobile County Commissioners are weighing a motion to strip Treasurer Phil Benson of his authority to manage the daily operations of the county’s investments — citing a lack of information from his office and strategies that have overlooked local and minority-owned banks.
As treasurer, Benson and his staff are tasked with handling the money the county government receives and pays out to its employees, vendors and other entities. Elected by a vote of citizens, Benson is not a county employee and doesn’t answer directly to the commissioners.
However, in 2006 the commission voted to delegate the responsibility for managing county investments to the treasurer’s office. Commissioners retroactively approve all investment purchases, but day-to-day operations are currently at the treasurer’s discretion.
According to Mobile County Finance Director Dana Foster-Allen, Mobile County’s investments totaled $256.9 million as of Feb. 28. Typically, that money is invested in stable, low-risk options such as money market funds and CDs sold by banks and other financial institutions.
Those dollars are currently controlled by Benson’s office, but the commission is considering a change that would make Foster-Allen the lead “investment officer” and bring investment management back under the umbrella of the county administration.
It would also establish an “investment team” that would include Benson, Foster-Allen, County Administrator Glen Hodge and other officials — something the current policy also requires but the county has apparently failed to follow since at least 2006.
Commissioners delayed a scheduled vote on the issue after Benson, who said he was “blindsided” by the proposal, raised concerns about the sudden need to change a 13-year-old policy. Last week, Commissioner Jerry Carl said he was equally surprised by the change.
“It was brought to our attention that the county, at this point, is not adhering to its own investment policies,” Commission President Connie Hudson said. “I like the idea of having the additional oversight [of a committee]. This is a large amount of money we’re talking about.”
However, the lack of a regular “investment team” meeting isn’t anything new. In fact, several county officials have said they weren’t even aware an investment policy existed. Some of the public exchanges about this issue have also suggested a communication breakdown has occurred between the treasurer’s office, the finance department and the commission over the years.
Speaking to Lagniappe, Hudson said commissioners get a list of new investments when they’re approved each month but don’t receive regular updates on why certain investments are selected or how the county’s existing investments are performing. In his defense, Benson said, if the commissioners aren’t getting information, it’s because they aren’t asking for it.
“It’s a two-way street,” he said. “Pick up the phone and call or walk down to my office. There’s two floors between us and the commission offices, and the finance department is next door.”
Benson said he wouldn’t have a problem providing any information the commission requests or meeting to discuss investments. But even if those meetings are held, Foster-Allen and Hudson have raised other concerns about Benson’s approach to managing the county’s assets.
That caused a somewhat tense exchange during an April 4 conference meeting when Foster-Allen aired some of her concerns publicly before the commission and Benson himself.
“I’ve been approached by several bankers, who’ve tried to get business with the county and got a halt from the treasurer … he wouldn’t even take a meeting,” she said. “Unfortunately, I couldn’t take meetings with them because I had no authority over the depositories.”
Foster-Allen also described a lack of diversification among entities the county is invested in.
She said Raymond James Financial alone holds more than 60 percent of the county’s current cash and investments, adding the county should be considering investments with more community banks and minority-owned institutions to comply with its existing policies.
“I think there should be a fair process. There should be an RFP process annually where the commission votes and decides on which depositories will be used,” she added. “There needs to be more transparency. You need to know the gains or losses by investment type and firm.”
However, Benson told Lagniappe he chooses investments based on what’s best for the county, not the owners’ race. He added that stable, nationwide financial institutions tend to offer a better rate of return for taxpayers’ money than smaller, more local banks can.
He said Raymond James officers “excellent rates” and has the liquidity necessary for the county to withdraw large amounts of cash when needed. It’s also worth noting the county’s current investment policy and the proposed changes highly prioritize “safety, liquidity and yield.”
The commission is expected to revisit its investment policy during its April 22 meeting, but it’s not the first time this issue has come up in Mobile County — one of only three counties in Alabama that still elect a separate county treasurer.
Benson’s predecessor, Al Sessions, butted heads with commissioners when he argued the treasurer’s office should oversee county investments. That led to a 2001 Attorney General’s opinion that clearly stated a county treasurer “is not authorized to determine how to expend county funds or to invest [them].” That was before the county delegated the authority to the treasurer’s office in 2006.
In previous years, the idea has even been floated to get rid of the office altogether. In fact, Benson’s opponent in his 2012 election ran on a platform of dissolving the position in Mobile County. Benson, though, still believes it’s an important function of county government.
“It’s important that we have another set of eyes on the county’s finances because it does impact how money is spent,” he said. “If you look around at the other places without another set of eyes on things, people are going to jail. I’m not going to jail for anybody.”
Hudson dismissed the notion that Benson has any impact on how the county spends money, stating that his role as treasurer is to “deposit cash” and “write checks.” Those are also responsibilities his office would retain even if the county’s investment policy changes.
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