CITY OF HARTFORD TREASURER'S OFFICE

Kathleen E. Palm, Treasurer

MISSION STATEMENT:

Receive, deposit, invest and disburse City funds in a manner that maximizes the amount of cash available to meet daily cash requirements and to increase the amount available for investment, thereby providing a source of revenue to support the City's financial commitments.

CITY OF HARTFORD TREASURER  

10 Prospect Street

HARTFORD, CONNECTICUT 06103

KATHLEEN E. PALM, Telephone (860) 522-4888, ext. 6305

TREASURER Fax: (860) 722-6126

Biography of Hartford City Treasurer Kathleen E. Palm

Kathleen E. Palm, Hartford's City Treasurer, was elected to the office in November, 1999.  She was appointed as City Treasurer in January, 1999 by Mayor Michael P. Peters and the City Of Hartford Court of Common Council to serve the unexpired term of former Hartford City Treasurer Denise L. Nappier, after Ms. Nappier's election as State Treasurer.  Ms. Palm served as Ms. Nappier's Assistant City Treasurer between January, 1995 and January 1999.

Before joining the City of Hartford, Ms. Palm served as a finance professional since 1988 as investment officer on the executive staff of Connecticut State Treasurers Francisco L. Borges and Joseph M. Suggs, Jr.  Previously, she worked in journalism, public relations and the non-profit sector.

A member of the Government Finance Officers Association, Council of Institutional Investors and Institute for Fiduciary Education, Ms. Palm is a graduate of Manhattanville College in Purchase, NY, and holds a certificate in pension fund investing from the Institute for Fiduciary Education.

Under the City Charter, Treasurer Palm is the custodian of all City funds, with a fiduciary responsibility to the taxpayers, residents and retirees of Hartford.  She oversees and manages the City's pension fund, with assets currently exceeding $1 billion, and serves as Secretary of the City of Hartford Pension Commission, with responsibility for making all investment and benefit-related recommendations to the Commission and administering pension benefits.  Treasurer Palm also manages the City's annual $425-million general fund annual cash-flow, supervises all banking relationships and functions, and invests $75 million in City trust funds.  She also is co-issuer of all City Bonds used for capital improvements and other public purposes.

A Hartford native, Ms. Palm, who resides in Asylum Hill, has long been active in and committed to, her community.  Immediate past president and member of the board of directors of the Artists Collective, Inc., an African-American-oriented youth arts group in North Hartford, Ms. Palm was fund-raising chair for the Collective's new $7-million arts center on Albany Avenue.  She is Vice-President of the Board of Directors and Chair of the Investment Committee of the Harriet Beecher Stowe Center in Asylum Hill, which is dedicated to the preservation of the 19th century home of the famed abolitionist.  She is a member of the Board of Directors of the Friends of Keney Park in Hartford and the Boys and Girls Club Development Association of Asylum Hill.  She also serves on the fundraising committee of Amistad America, Inc., which launched the replica of the schooner Amistad last year in Mystic, Connecticut.   

Ms. Palm is the mother of one daughter, Caitlin Palm, who teaches sixth grade at the John Reisenbach Charter School in Harlem, New York.  She served as President of the Thomas Quirk Middle School PTO and on the boards of the PTOs of Noah Webster School and Hartford Public High School, from which Caitlin graduated in 1994.

The City Treasurer is the custodian of all funds belonging to the City which includes the investment and disbursement of City funds.  A primary responsibility of the City Treasurer is to maximize the amount of cash available, both to meet daily cash needs and to increase the amount available for investment, thereby providing a source of revenue to support the City's financial commitments.  Additionally, in the City Treasurer's capacity as Secretary of the Pension Commission, the office assists her in the management of the Municipal Employees' Retirement System.  The purpose of this system is to assure that current retirees receive accurate, timely benefit payments while generating income sufficient to finance the City's future pension obligation.  

In accordance with the Connecticut General Statutes, the City Council designates the qualified public depositories and financial service providers, which the City Treasurer may use for public deposits and investments. Eligible investments for Connecticut municipalities are governed by the Connecticut General Statutes, Section 7-400. The City Treasurer invests the City’s operating and working capital funds accordingly.

In addition, the City Treasurer monitors the risk-based capital ratios and collateral requirements of the qualified public depositories, as defined by the Connecticut General Statutes, Section 36-382, in which it places deposits or makes investments.

The operating and working capital funds are invested at the direction of the City Treasurer in bank certificates of deposit and with the State of Connecticut’s Short-term Investment Fund (STIF), MBIA Class Plus, and Financial Investors Trust. M.B.I.A. Class Plus investments consist of U.S. Treasuries; obligations of governmental agencies and repurchase agreements collateralized by U.S. Treasuries and agency obligations. Financial Investors Trust investments consist of U.S. Treasuries and repurchase agreements collateralized by U.S. Treasuries. STIF was authorized in 1978 (P.A. 78-236) for investment by the State Treasurer of various funds. Section 3-27a of the Connecticut General Statutes spell out the various governmental entities eligible to participate in STIF. Section 3-27f authorizes all agencies, instruments and political subdivisions in the State of Connecticut to invest in STIF.  What about liaison work w/ QPD and other financial institutions???  Debt Issuance??? = big KP responsibility.  Also Tax Abatement.  

CUSTODY OF FUNDS

The primary function of this unit is to provide custodial and fiscal management services for all funds belonging to the City by directing the Treasury's check signing, cash management, banking and accounting systems and procedures.  This unit also conducts performance evaluations of the Treasury's cash management program and develops and implements policy and procedures as a result of these periodic reviews.  

INVESTMENT MANAGEMENT

In addition to the Connecticut General Statutes governing eligible investments, the City has its own investment policy. This document sets forth the "prudent person" standard of care; defines investment objectives as safety of principal, liquidity, and return on investment; imposes certain diversification guidelines; and applies the City’s Code of Ethics to investment activities.

Under the authority of Chapter XVII, Section 5 of the Charter of the City of Hartford, the pension funds for City employees are invested as recommended by the City Treasurer, who serves as Pension Commission Secretary. Investments for the Municipal Employees’ Retirement Fund (MERF) are made in accordance with the MERF’s Funding and Investment Policy Statement, which addresses investment objectives , asset allocation, and investment guidelines, among other things. This activity is supervised by the MERF’s Investment Officer. In a market cycle, the MERF’s overall rate of return is expected to be equal to or exceed the rate assumed by sound actuarial principles, and to exceed inflation by 350 basis points(still valid?). The MERF’s investment managers’ performance records are monitored in comparison to market-based benchmarks on an ongoing basis, and independent reviews of the MERF’s asset allocation and its experience study are undertaken every five years, with a complete actuarial valuation of the plan performed annually. Under the Funding and Investment Policy Statement, the asset allocation is 49% to 67% equities, 29% to 41% fixed-income securities, 0% to 2% real estate and 4% to 6% cash. The general guidelines notably include the MERF’s expectation that the investment manager’s philosophy and style will remain consistent and specify that buying on margin, short sales and the purchase or sale of derivatives are prohibited. Guidelines are also defined for the various asset classes.

Teachers in the City school system participate in the Connecticut Teachers’ Retirement System. The investment of teachers’ funds is managed by the State.

There are four defined benefit pension plans for employees of the City of Hartford. Two are single-employer plans, one is a cost sharing multiple-employer plan with the State of Connecticut and one is a plan with the State of Connecticut for certified teacher at the Board of Education in which the City is a noncontributing employer.

The City also administers an excess benefit plan established to fund that portion of certain retirees’ pension benefits that exceed the limits permitted under Section 415 of the Federal Internal Revenue Code (IRC).

Two single employer plans are administered by the City. The City pays retirement and single benefit survivor benefits to pensioners under three old unfunded programs on a "pay-as-you-go" basis. For financial reporting purposes, these programs are reflected as one plan. These programs cover City employees hired before the current City Municipal Employees Retirement Fund ("MERF") went into effect on May 1, 1947; there are 494 pensioners under these old plans as of June 30, 1998. There are no remaining active members and the unfunded liability is decreasing rapidly. The plans provide retirement, disability and survivorship benefits for all retired employees, in accordance with provisions which are subject to bargaining with unions representing most of the employees.

The City provides retirement benefits for employees hired after 1947, through the City MERF, a contributory defined benefit plan. Under the Plan, all full time employees, except teachers and members of certain union groups who have elected to join the State Municipal Employees’ Retirement Fund (State MERF-B), are eligible. The City MERF is considered to be part of the City of Hartford’s financial reporting entity and is included in the City’s financial reports as a pension trust fund. The Plan is required by City Charter to be actuarially sound, based on employee contributions and mandatory annual contributions from the City as employer as determined by the Pension Commission. As of July 1, 1998, the City MERF membership consisted of 2,286 pensioners and 2,515 active employees.

Employees are 100% vested after 10 years of service. If an employee leaves covered employment or dies before 10 years of service, accumulated employee contributions are returned with interest.

There are no investments in, loans to or leases with any City MERF official, City of Hartford official, party related to a City MERF official or City of Hartford official, or organization included in the City of Hartford reporting entity, except for the leases of Ten Prospect Street to the City of Hartford.

PENSION COMMISSION  

Chapter XVII, Section 2 of the Charter of the City of Hartford, establishes a pension commission that shall be comprised of three (3) members none of whom shall hold any other office in the city government and one (1) of whom shall be a fellow or associate of either the Actuarial Society of America or the American Institute of Actuaries.  This commission appointed by the City Manager, shall promulgate policies and administer the retirement system for city employees.  In addition to the three (3) voting members, there shall be one (1) nonvoting member of the commission elected by the members of the municipal employees retirement fund.