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Committee hears update on investment-policy language after state clarification on agency securities
Summary
Staff reviewed proposed updates to the City of Franklin investment policy (Resolution 2025-47), explaining a recent change in state statute clarified local governments may purchase U.S. agency securities; the committee discussed the clarification but did not vote because there was no quorum.
City of Franklin staff reviewed a proposed amendment to the city's investment policy for non-pension assets (Resolution 2025-47), explaining that recent state-level clarification permits local governments to hold or purchase certain U.S. federal agency securities and that the policy language is being updated to reflect current Tennessee guidance and internal delegation of authority. The committee discussed the update but did not vote because there was no quorum.
Margaret introduced the item and deferred to staff for technical detail. A staff member summarizing the issue said local governments previously were allowed to hold certain federal agency securities but the state treasurer and state comptroller had differing interpretations when U.S. Treasury bond ratings declined. "We were locals were kind of caught in the middle between these two officers and certainly we wanted to be in compliance with both," the staff member said. The staff member said the city received written advice that existing agency securities could be held to maturity but additional purchases were suspended until the state clarified policy. The staff member added that in recent months the state statute was changed to clarify local governments may purchase Treasury agency securities; local policy language is being updated accordingly.
Staff noted the city still holds a few agency securities and has at least one maturing in the near future; the proposed investment-policy changes update delegation of authority and local considerations to ensure compliance with Tennessee statute (referred to in the discussion as TCA). Committee members asked no substantive follow-up questions.
Because there was no quorum, Resolution 2025-47 was discussed but not formally approved; staff will return the item for formal action at a future meeting. The presentation emphasized the changes align local policy with updated state guidance and do not require immediate portfolio action beyond routine maturity management.
