NC Local Government and Public Authority Investment Challenges
Recently, more than one NC local government finance officer has been presented with an annuity investment as an allowable investment option. Annuity investments are not expressly specified in NC § 159-30 as allowable investments for NC Local Governments or public authorities and are therefore not permitted.
The regular turnover that occurs in finance officer positions around the State means that some finance officers may not be aware of all the requirements and boundaries set by the Local Government Budget and Fiscal Control Act (G.S. 159 Article 3). The person holding the position of finance officer needs to know those requirements. NC § 159-30 spells out those requirements and boundaries as they apply to local government and public authority investments.
We understand that during times of declining interest rates, earnings for local governments take a heavy hit. A governing body may ask its finance officer to try and find ways to improve earnings. Investment brokers who work with NC local governments may offer various investments to as a way to do just that. Unfortunately, not all investment brokers are aware of the statutory requirements regarding what is an allowable investment for our local governments and public authorities. We encourage all finance officers to know the law regarding investment of their publics funds and to work with brokers that only offer allowable investments as defined by NC § 159-30.
For questions about this post or other aspects of local government investing, please contact Becky Dzingeleski at firstname.lastname@example.org or (919) 814-4287 or Kathy Howell at email@example.com or (919) 814-4216.