ASHTON – Just months after enacting an investment policy for its cemetery, Ashton is considering changes to ease the rules for village to borrow cemetery money for other purposes.
Wednesday, the village declined to release proposed policy changes that had been distributed to members of the board of trustees for a recent meeting. Clerk Sharon Van Dam decided to keep the document under wraps because the village attorney had issues with it.
Sauk Valley obtained the document through another source.
In April, then-Trustee Andrew Kida drafted an investment policy because the cemetery's funds had been invested in CDs that had been getting interest of less than 1 percent, rather than the historical 2 percent.
The policy came in the wake of receiving $217,000 from the estates of Ina and Milburn Eckhoff. The money, as are most cemetery donations, is designated for the perpetual care and maintenance of the cemetery. The interest from such funds is typically used for upkeep, while the principal is kept intact.
Under the investment policy, the cemetery is allowed to buy municipal bonds from the village, but the Eckhoff money may be used for such bonds only in cases where matching grant funds have been given to the village.
Any money lent to the village, though, must be repaid at the going rate of the cemetery's other investments – at least 1.5 percent.
The proposed policy change, by contrast, would allow the village board to lend the cemetery funds internally – with no rules for such transfers.
Sandra Pankhurst, the cemetery board's secretary and treasurer, said she was uncomfortable with the current investment policy from the start.
"I was in banking for 40 years," she said. "There were percentages in the policy that a banker can't adhere to. They can't guarantee us a percent and a half each year."
Pankhurst also said the policy should be more general, not mentioning specific names such as Eckhoff.
Asked whether she believed the policy loosened the rules for village borrowing, she said no.
"We have elected a village board because we feel they will invest funds wisely," she said.
Kida, who left the board in May, said he opposed a general policy, contending it gave the village board too much latitude.
"I'm not trying to say what anyone on the current board would want to do," he said "Some board member 5 years down the road may see a loophole and get access to the money. That's why you don't want a generalized policy. It allows people to reinterpret it later on."
Kida said he ran his policy through the cemetery board, which had no objections, and sent it to the village attorney for review before going to the board of trustees. But when the cemetery board decided to change the policy, it sent its proposal to the village board before sending it to the attorney, he said.
Village President Don Ross pulled the proposal off the agenda for a recent village board meeting, saying the attorney needed to review it.
The existing policy, Kida said, is realistic and doesn't require that funds be invested in FDIC-insured accounts. If an account fails to draw 1.5 percent interest, the village can go to the next safest account that does.
"The village would always get the advice of an investment banker, not make the decisions on the whims and fancies of an elected board," Kida said.
The village board will meet Monday, but it's unclear whether it will revisit the issue at that time.
Ross didn't return a message for comment.