You asked whether state statutes control or limit Stamford's chief operating officer's ability to use deposits in the city's classified employees retirement fund.

SUMMARY

The city's charter created the classified employees retirement fund and prescribes how the fund is controlled, including creating a board of trustees to oversee it. The statutes do not provide any control or limit on this fund or any other municipally created and administered retirement fund. They govern only how fund money is invested in securities because the charter only allows investments in securities designated by statute as trust fund investments. (Statutes allow towns two options for providing retirement programs for their employees (1) a town may create its own retirement fund or funds, as Stamford has done, or (2) it can join the Municipal Employees Retirement Fund, a state-run retirement fund created by statute. )

Stamford does not have the position of chief operating officer, but the mayor is the chief executive officer. This report addresses the role of the mayor and other senior city officials in the fund's management.

CITY OFFICIALS AND FUND PROCEDURES

Overview

The city charter authorizes the following officials to manage the fund and prescribes their functions:

1. The city director of administration collects classified employee fund contributions (from paycheck deductions) and deposits them in the fund at the end of each month.

2. The city controller acts as the fund treasurer, and all fund money is deposited with the controller.

3. A six-member board of trustees manages the fund and selects a bank to hold fund assets and an investment manager to invest them. No action can be taken regarding the fund without a majority vote of the trustees. The trustees consists of: (a) the mayor, who serves as chairman, (b) the board of finance chairman, (c) the board of representatives president, and (d) three representatives of current or retired classified employees.

4. The city personnel director serves as executive secretary to the trustees, but does not have a vote.

5. The auditor selected by the board of finance to audit city accounts must also audit the fund and include this in the overall city audit.

Investments and Deposits

The charter provides a guideline for fund investments and allows the investment manager "full discretion" within the guidelines.

Under the charter, fund assets may be:

1. invested in Stamford city bonds,

2. invested in securities authorized by statutes as trust fund investments,

3. deposited in savings bank or trust company accounts, and

4. used to purchase life insurance or endowment policies or annuity contracts with life insurance companies authorized to do business in Connecticut.

The trustees must annually publish and provide to the classified employees a summary statement of the fund's year-end total cost and market value, yield, total contributions of employees and the city (stated separately), and unfunded vested and prior-service liabilities.

Payments Out of the Fund

The controller and the board of trustees chairman must both sign all orders for payments from the fund, including monthly retirement payments. The trustees may delegate this authority to other trustees in the absence or inability of the controller or chairman, and may authorize use of a check-signing machine as provided in the charter for orders on other city funds.

JM: eh