East Aurora officials say investment account earning no interest
By Denise Linke For Sun-Times Media February 20, 2014 10:36AM
Updated: February 24, 2014 12:24PM
East Aurora School Board Tuesday night voted down a proposal to transfer the district’s investments from River Street Advisors and Pershing Advisor Solutions to Clear Perspectives, saying that they didn’t have enough information to make that decision.
Only board President Annette Johnson and board member Stella Gonzalez cast yes votes, with five board members voting no.
“We haven’t put the right amount of thought into this. It’s a big decision,” said board member Mary Lou Peryea.
Superintendent Jerome Roberts said he recommended the change after finding that about $14 million in district funds have been sitting in a money market account earning no interest for the past 18 months.
“Like my personal finances, when I see the district’s investments not doing well, I move the money,” he said. “It’s time to move to an organization that will manage it better. I will never allow the district to make less than top dollar.”
The proposed agreement with Clear Perspectives does not commit the district to stay with the investment firm for any set length of time, Johnson added.
“This company has a proven track record, and we’re not married to it. When you see a problem, fix it. We’re not being responsible stewards of the taxpayers’ money if we let it sit making no money,” she said.
Other board members argued that they only learned about the unprofitable account Feb. 11, and that they could not make an informed decision without seeing the proposed agreement and recent financial statements on all the district’s investment accounts.
“How long has this money been in an account making no money? All I have is a one-page letter. I don’t have the agreement, so I don’t know if there’s a time commitment in it or not,” said board member Richard Leonard.
Several board members suggested tabling the proposal for at least a month so that they could get more information from Crystal Financial Consultants, which is auditing the district’s business office records, and interview several investment firms to determine which one would best meet the district’s needs.
“I am very interested in seeing what the consultant says about our finances before voting on this. I’m not saying it’s the wrong decision: I just want to put it off,” said board member Kirsten Strand.
Johnson and Roberts, though, maintained that the district couldn’t afford to wait to finish the audit or bid out the investment contract.
“The business office doesn’t have time to draw up [bid documents]. It’s the same as with the gas and electricity, nobody’s looking after it. It’s been very transparent that there have been problems in the business office,” Johnson said. “But this is a no-brainer decision.”
Gonzalez suggested that the district transfer the money now, then investigate how the district’s other investments are being managed before changing investment firms entirely.
“I hate to see money not being gained. We need it for the kids. We don’t have to sever our relationship [with the district’s current investment advisors] to move one account,” she observed.