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Friendship Heights treasurer rebuts public accusations over CD reinvestments; council discusses investment policy and oversight
Summary
Treasurer Roy Schaeffer publicly defended his handling of maturing CDs and said the mayor was informed; council members debated fiduciary practice and agreed to expand committee notice and consider a cash‑management policy.
Treasurer Roy Schaeffer used the council meeting to respond at length to accusations from Chairman Bobby Pestronk that he had acted without proper procedure when rolling maturing certificates of deposit.
Schaeffer said the CD account was created by the prior council on Dec. 12, 2022, with signers authorized to be the mayor, treasurer and chairman; he said the chairman refused to sign and that the mayor and he now serve as signers. Schaeffer said he consulted the village’s investment adviser, Brian Kusky, and that he had emailed and spoken with Mayor Melanie White and the village manager about recommended rollovers. He read email exchanges in which the mayor, he said, approved the actions.
Schaeffer also disputed claims that CDs should have required two signatures or that he acted to move funds without authority. He stressed that CDs are federally insured and that a Maryland fund (the Maryland local government investment pool, referenced during committee discussion) is not federally insured and currently pays a lower interest rate than CDs, creating riskier outcomes if funds were moved into that pool.
Several council members responded during discussion. One council member said fiduciary responsibility and transparent procedures are a long‑term policy issue; another noted errors in the certificate form that justified careful review. Council members said the finance committee will be notified when CDs mature and that the village will develop a cash‑management policy in coming weeks. The finance committee reported it will work with the village manager to draft a policy narrative describing current practice as a starting point for changes. The committee also flagged the village’s preliminary budget and projected capital needs.
No formal disciplinary action was proposed or voted on. Schaeffer said he would provide documentation and asked the chairman to present proof if he sought to rebut Schaeffer’s account.
The finance committee reported it is projecting an operating surplus but, when capital expenses (Page Park, Red House work) are included, a preliminary draft shows a capital‑inclusive deficit of roughly $300,000; committee members discussed holding the $1 million expected from a development agreement in capital funds but deferred final allocation until the budget is finalized.
Council did not adopt a new investment policy at the meeting but agreed to continued finance committee oversight, monthly statements for review, and to draft a cash‑management policy for future council consideration.
