Coffee County investment committee reviews draft policy after trustee cites $3.8M 2024 yield

The Coffee County Tennessee Investment Committee met Feb. 18 to review a draft county investment policy and to discuss recent investment activity the trustee said led to a large increase in interest revenue.

Chair Dennis opened the meeting, confirmed a six-member quorum and the committee approved the agenda. The committee later voted 5–1 to approve the March 11, 2024 minutes; Trustee John H. Marchesoni was recorded as the sole opposing vote.

The meeting focused on draft language under “safekeeping and custody” that addresses how interest earned on county investments should be allocated. A member read Section 7 aloud, which lays out that interest earned on county investments is to be accrued to the general debt service fund “unless otherwise specified by law” and lists several restricted accounts that are treated separately. A transcript reading states: “Interest gathered from the county's investment shall be deposited in the general debt service fund.”

Trustee John H. Marchesoni argued the investment committee should not be authorized to direct restricted funds because the county’s tax levy already specifies how interest on those funds is handled. “The investment committee has no authority or direction to determine or specify where these funds go or how they're spent or how they're invested,” Marchesoni said, urging removal of language from the policy that could conflict with the tax levy.

Marchesoni also recommended adding a designated investment officer to the policy so investments can be executed quickly without convening the full commission for routine, time-sensitive purchases. He cited Tennessee Code Annotated §5-8-301 as the statutory framework that limits the types of investments counties may make and that generally supports a short-term investment window.

A substantial portion of the discussion centered on the trustee’s recent investment results. Marchesoni presented annual yields and said that reported interest earned rose from roughly $972,030 in 2023 to about $3,835,832 in 2024. He told the committee that, beginning in December 2022, the trustee pursued U.S. Treasury bills at market rates (reported then at roughly 5–5.6%) instead of leaving those funds at local banks where rates were about 3.5%. Marchesoni said approximately $25,000,000 — about 60% of the funds he referenced — was placed in those Treasury investments and that the money has since been returned to local banks.

“I have a responsibility to invest out of funds at the maximum amount, and that's exactly what I did,” Marchesoni told the committee. Several members praised the results: one commissioner said, “A job was well done,” and urged care in any policy changes that might prevent similar market-based actions.

Committee members pressed for clarity on internal controls, particularly a prior discussion about requiring two authorized signatures on certain investments. Marchesoni noted the chief deputy trustee has historically signed for CDs and warned that requiring a committee member to join every investment transaction could be operationally burdensome.

The committee agreed to distribute a March 2024 draft policy prepared by the trustee and to reconvene to review it. Members set a follow-up meeting for Monday the 24th at 08:30 to consider edits, including language on restricted funds and the two-signature process. The meeting also included brief new-business items: a member said four upcoming projects (including an animal shelter, a health-department facility and wastewater work) will require separate, labeled interest-bearing accounts for retainage and that one contract had been awarded to Rogers Group.

The meeting ended after members confirmed they would receive copies of the draft policy to review before the next meeting.

Next steps: committee members will review the March 2024 draft policy that the trustee circulated and meet on Feb. 24 at 08:30 to consider adoption and language governing restricted funds and signature requirements.