Source: Delaware State News
DOVER — In a letter e-mailed to state legislators Friday morning, state treasurer Chipman “Chip” L. Flowers stated his strong opposition to proposed legislation regarding the state’s $2 billion portfolio he said would hamper his office’s ability to meet daily cash flow obligations.
Treasurer Flowers also said Senate Bill 151 would grant members of the Cash Management Policy Board the right to allocate state funds to banking institutions and exempt the portfolio from open government requirements.
The bill’s synopsis states that the act clarifies the original intent of CMPB powers, which are to protect state investments through oversight. The act clarifies that the board is exempt from the Administrative Procedures Act, since decisions need to be made in a timely matter as a result of changing market conditions.
In an email to local media, Treasurer Flowers described the bill as “nuts” and legislators are trying to sneak it through on the last day of the session on Sunday.
The bill is sponsored by Sen. Patricia M. Blevins, D-Elsmere, and Rep. Peter C. Schwartzkopf, D-Rehoboth Beach.
The legislation states that the board must approve the selection of financial institutions to provide banking and investment services conducted on an open and competitive basis. The board will be responsible for setting police regarding allocation between short and long term investments, and allocation of funds to the financial institutions.
If SB 151 is passed, Treasurer Flowers said his office cannot be responsible for ensuring state obligations are paid and “the record should note that this could impact our ability to protect the state’s AAA bond rating …”
The treasurer said the bill fosters open government transparency issues and “would give this Board the ability to conduct independent allocation decisions in secret.
“This is a practice that the state treasury cannot support or condone and no other state has granted the ability to allocate treasury funds to a board operating in secret and counter to their treasury.”
Treasurer Flowers suggested that his office would defer enforcement of the bill to the governor’s office and legislative branch after a constitutionality review by the Supreme Court of the State of Delaware.
Since his office was not consulted in the crafting of SB 151, the treasurer said he could not issue a full position statement before a possible vote on the measure this weekend. Treasurer Flowers said he would have consulted with the treasury’s independent financial adviser under what he described as “normal” circumstances.
