Bethlehem Press

Sunday, January 20, 2019

Treasurer advocates investment strategy change

Monday, December 31, 2018 by BERNIE O’HARE Special to the Bethlehem Press in Local News

According to Newsweek, the U.S. stock market is experiencing its worst December since 1932, during the Great Depression. The Federal Reserve has announced its fourth interest rate hike this year. In this economic climate, and in a township that has just decided to raise real estate taxes 9 percent, is now the right time to relax the investment strategy on township pensions?

Bethlehem Township Treasurer Rosalia Italiano and a Wells Fargo Bank representative think so, and advocated for a formal change at commissioners’ Dec. 17 meeting.

The police pension board has already taken that step with the $17.4 million police pension. The remaining four pensions need the approval of commissioners. As explained in a memo from Township Manager Doug Bruce, “The changes allow for a slightly less conservative investment policy – moving the maximum percentage investment in equities (stocks) from 40 percent to 60 percent (most likely it will actually be 50 percent to start).”

The new policy would still ban commodity trading, short selling or option trading. There is no specific ban on hedge fund investments, which are risky investments designed to outperform the market.

According to Italiano, the township pensions are shooting for a 7 percent return.

Commissioners are taking time to consider the proposal.

“If this thing goes south, the township taxpayer has to make up the difference,” complained resident Ben Hedrick. “I’m very uneasy about it.”

Commissioners also voted unanimously to support an agreement with Bethlehem Area Public Library.

Lobbying for a satellite library at the Coolidge Building to be open three days a week, Commissioner John Merhotten is spearheading this effort and hopes it will be open at the end of April.

Commissioners heard complaints from resident Barry Roth about the township marshal, who takes a township vehicle home every night. Roth said a resolution adopted years ago bans all employees from taking vehicles home, excepting the K-9 officer.

Roth also complained about an $8,800 bill for repairs to a Ford Explorer that was flooded out in heavy rains. Manager Bruce said the damages are covered by insurance, but Roth went on anyway, saying that everyone knows what areas are inundated by heavy rains.

“You just piss money away and nobody gets held accountable for it,” Roth muttered as he returned to his seat.