Clerk’s Office is Proactive in Protecting Your Tax Dollars
By J. Anthony Beard, Treasurer, Clerk & Comptroller
The Clerk & Comptroller’s office took proactive steps to protect your tax dollars, removing all money from the state investment pool before the recent freeze of assets in the fund that caught many other counties and municipalities across Florida by surprise.
The Clerk’s Treasury department, which actively manages County taxpayers’ $2 billion plus cash and investment portfolio, continuously monitors the markets and evaluates assets. In August, as our investment professionals performed due diligence in preparation of receiving and investing an estimated $600 million of Ad Valorem tax money, the office began to question the safety and liquidity of funds invested within the State Board of Administration’s (SBA) Local Government Surplus Funds Trust Fund (LGSFTF).
Concern increased because the pool continued to earn above-market returns despite market dynamics that would suggest otherwise. State officials were not forthcoming despite requests for full disclosure and transparency of assets in the pool. Over the next few months, it became increasingly clear that the SBA continued to achieve stellar returns by holding high-yielding, potentially illiquid assets as opposed to safer and more liquid U.S. Government and Agency securities. Many of these investments subsequently were downgraded. Some defaulted and some became illiquid. As a result of this information becoming more public, concerned local governments across Florida began excessive withdrawals from the fund, prompting the Trustees of the pool to place a freeze on the fund to stop a “run on the bank.”
Fortunately, due to active money management, the Clerk & Comptroller’s office had already completed its systematic withdrawal of funds from the state pool. By the time the SBA froze the fund on November 29, our balance was zero.
At this time the pool has reopened for withdrawals, albeit with limits and penalties. A new advisory committee has come into play and a professional money manager has temporarily taken over management of the pool. Details of the restructuring and ongoing developments are available on the SBA’s Web Site.
In the interest of protecting your tax dollars, the Clerk’s office has decided against investing any money in the pool until further notice. Instead, the money will be invested in alternative money market accounts as we continue to monitor the situation with the SBA.
Treasurer J. Anthony Beard brings more than 15 years of experience in the field of finance to the Clerk & Comptroller's office. He holds degrees in Finance and International Business and has been accepted into the MBA program at Northwestern University’s Kellogg School of Management.