An Arkansas Senate committee Tuesday endorsed legislation that would shift three employees in the state treasurer's office to the purview of the Board of Finance, despite opposition from Treasurer Dennis Milligan's aides.
Under Act 1088 of 2013, the Board of Finance selects the state's chief investment officer based on the treasurer's nominations. The chief investment officer is employed by the board and works with and at the direction of the treasurer consistent with the policies and directives of the board.
In a voice vote, the Senate State Agencies and Governmental Affairs Committee recommended Senate approval of Senate Bill 425 by Sen. Terry Rice, R-Waldron. The bill would require the chief investment officer to have three employees, classified as a senior investment manager, treasurer manager IV and treasurer manager II.
The chief investment officer is Autumn Sanson, whose salary is $93,785 a year. Senior Investment Manager Ed Garner is paid $108,000 a year, while Treasury Manager IV Larry Tate makes $68,399 a year and Treasury Manager II Celeste Gladden is paid $61,799 a year, said Stacy Peterson, a spokesman for Milligan.
Rice said it's prudent to expand the board's financial oversight of the treasury's $3 billion in investments by increasing the number of investment employees that it oversees from one to four, as well as to make sure that these employees are qualified for the long-term best interests of the state.
He said he doesn't have a problem with anybody in the treasurer's office, and he lauded the increased earnings on investments under Milligan. Milligan is a Republican from Benton who has been treasurer since January 2015.
The Board of Finance includes the governor, treasurer, auditor, bank commissioner, director of the state Department of Finance and Administration, securities commissioner and two appointees each from the House speaker and Senate president pro tempore.
Jason Brady, who is chief deputy treasurer for operations, told the Senate committee that the "the bill is looking for a problem that doesn't exist." He said the bill would separate the treasury's investment department from the rest of the office and would lead to a lack of cohesion.
T.J. Fowler, legal counsel for the treasurer's office, said SB425 appears to violate the Arkansas Constitution's separation of powers doctrine. The legislation would shift control of the treasurer's investment division -- now comprised of five employees -- to the Board of Finance, he said. The treasurer's office has 33 employees.
The bill is akin to having the governor selecting employees at the Bureau of Legislative Research, who work for the Legislature, he said.
But Rice said the treasury's investments would benefit from the broader oversight of these taxpayer funds under his legislation. These four positions still would work with and at the direction of the treasurer consistent with the policies and directions of the board, he said.
During the first six months of fiscal 2017, Milligan reported the treasury earned $21.6 million -- up from $16 million in the same period in fiscal 2016.
A Section on 03/01/2017