At Monday night's work session of the Crest Hill City Council, the city's bond counsel and another financial advisor presented an analysis of the city's finances and recommendations of actions to be taken or considered. Most of the presentation was focused on issuing bonds to pay for upgrades to the sanitary sewer system, but some general issues were also addressed. One recommendation was that the city needs an investment policy that requires all deposits in excess of FDIC insurance to be fully collateralized with either US Treasury or US Agency securities, that those securities be held by a third party, and that the value of those securities be marked to market monthly to determine actual value. This is to ensure that the city's money is backed by good securities, that those securities have not been pledged to other depositors as has been done by some banks, and to ensure that the value of those securities has not dropped below the amount being collateralized.
City Treasurer, Joe Bobikiewicz, responded that the auditors made the same recommendation back in September of 2009 and he has been working on it with the City Attorney. When pressed as to when a policy would be ready, he responded that it would be a few months, but that he would poke the Attorney at the next council meeting and let him know to get working on it again. He stated that he plans to have it in place before the next audit so that the City does not get dinged again.
This is a shocking and dangerous attitude that he is taking. He refuses to make protecting the city's money a priority. Instead of waiting for the next meeting, he should pick up a phone and call the City Attorney. In fact, he should have taken care of this at least 7 months ago when the issue was raised by the city's auditors. He was even aware of this issue before then since I had brought questions regarding the collateralization of city deposits to his attention in March of 2009.
This is not a policy to be put on the back burner, this is not something that can wait, this is something that needs to be done now and implemented now. This is not about the Treasurer not getting dinged on an audit. This is about one day finding out that the city has millions of dollars of deposits that were improperly collateralized with toxic assets, bonds pledged to multiple cities, or long term securities that have to be sold at below face value in order to access our money. These are real threats and we need to demand that the City and the City Treasurer better protect our money.