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Township loses over $700k in investments

May 21, 2014 - By Meg Peters

Review Staff Writer

Over the last year Orion Township has accumulated an unrealized loss of over $700,000 in investments according to the most recent audit reports received by the township.

An unrealized loss is not an actual loss unless the investment is sold before its maturity date, Orion Township Treasurer Mark Thurber said.

A majority of those investments are from three mutual funds that were purchased in the mid 2000's, before Thurber took office, of which he has not invested any more into.

"I have a problem with you saying these are unrealized losses, is there any guarantee those will be recovered?" Township Supervisor Chris Barnett asked Thurber.

"Absolutely not," Thurber replied.

Thurber said the losses are "fictitious numbers" because they have not matured, and he has not been "unduly concerned" when tracking the investments. He said the losses have been depicted in the numbers of his quarterly reports.

Trustees disagreed.

"I feel like I'm just getting little flash cards, I want a quarterly report. Balances from the beginning of the quarter and end of the quarter," Trustee John Steimel said.

Trustee Donni Steele concurred.

"You have been here over a year and I sit here and piece together little bits of information. I still don't know where the money is invested, I still don't know what the beginning balances are, the beginning or ending yields, what the interest rates were, what funds they are in, and that's not our job," Steele said.

Of the three municipal mutual funds in question, EANAX, FTTMX, and FKUSX, Thurber said the most volatile scenario concerns a fund with the beginning principal of about $1.98 million which has dropped to about $1.92, or about a $60,000 loss.  

"I'm not alarmed by what's taken place, but yeah I would like to get this out of my portfolio just so I don't have to deal with it. So my recommendation is as soon as the principal approaches within ten percent of our principal price we get rid of it, for all three mutual funds," Thurber said.

Board members commented they had not received any reports concerning these losses over the last year.

"The first time I heard about the losses were from a post audit hearing saying 'everything looks good, by the way here are these losses," Barnett said. "That's where we are getting at with the quarterly reports, it needs to be reported to the board, when it's dropping we should at least know about it."

"We are going to get that principal back, every  penny," Thurber said. "We are not at our maturity day. If for some reason an earthquake ripped through Orion Township and we needed our money we could sell these things in a second market," he said.

The Review is investigating the investments further and will provide more in depth coverage in the next edition.

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