PROVIDENCE – The Senate and House have approved legislation that would allow Rhode Island cities and towns to pool their funds for short-term investments.
The R.I. Government Investment Pool Act allows the state general treasurer to establish, with the approval of the State Investment Commission, one or more investment pool trust funds. The pools would be able to contain money of several funds of the state, proceeds of all bond issues not immediately required, or the funds under the custody of agencies, authorities, commissions, boards, municipalities, political subdivisions and other public units of the state.
Participation would be voluntary. Such investment pools are allowed in nearly every other state in the nation, according to supporters of the bill.
The Senate approved S0858aa. Four senators did not cast a vote.
Sen. Walter S. Felag Jr., D-Warren, the prime sponsor, said the creation of these investment pools overseen by the general treasurer would allow some communities to participate since they would not need their own staff to handle the investments.
Identical legislation, sponsored by Majority Leader Nicholas A. Mattiello, D-Cranston, was approved Thursday, 72-0.
The combined liquid assets of the state and local government could be more than $500 million, according to Felag.
The legislation empowers the treasurer to serve as trustee for the investment pool and to sell to all agencies, municipalities and other entities participation units in any such combined pools. The bill requires the General Treasurer to keep a separate account of each participant in the pool and to provide an annual report at the end of the fiscal year to the governor and state auditor.
“The General Treasurer has said that establishing these investment pools could be a tool for municipalities to help modestly improve their bottom line,” Felag said. “Considering the difficult fiscal situation of our cities and towns, a modest improvement is would be welcome and this legislation provides that possibility.”
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