STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

September 8, 1975

Mr. David Yolk
State Treasurer
Capitol Building
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 75-153

Investment of city firemen retirement funds

Dear Mr. Yolk:

You have requested an opinion from this office as to whether or not the City of Rapid City can hire professional financial counseling to invest funds held in the Municipal Firemen's Retirement Fund.

SDCL 4-5-6 provides:

Any funds which will not be needed for current operating expenses, may be invested in securities of the United States and securities guaranteed by the United States government either directly or indirectly and redeemable within 18 months from the date of purchase. The maturity date may exceed 18 months. Provided, however, that permanent, trust, retirement and building funds may be invested in securities having a redeemable date beyond 18 months.

SDCL 4-5-5 provides:

"Public Funds" in sections 4-5-6 through 4-5-11, inclusive, shall include all general, special, and other funds, regardless of source or purpose, that may now or hereafter be owned, held or administered by any political subdivision of this state, including counties, municipalities, townships and school districts, or by any officer, commission, board, bureau, or agency of the political subdivision.

It is my opinion that the above-cited statutes clearly authorize the City of Rapid City to invest funds presently held in the Municipal Firemen's Retirement Fund in securities authorized by SDCL 4-5-6. It is also my opinion that under the authority granted to municipalities in SDCL 9-12-2 to control its finances and property and to appropriate money for authorized purposes, the municipality has the lawful authority to hire professional financial counselors to assist in their investment program. The municipality is not free, however, to invest their funds in securities other than those permitted under SDCL 4-5-6.

In view of the special provisions of SDCL 9-16-28 which require the municipal treasurer to be the custodian of any investments made with the pension funds, the general provisions of SDCL 4-5-9 would not apply to the situation you present.

Respectfully submitted,

William Janklow
Attorney General

WJJ:DOC:mhb