HomeMy WebLinkAbout07-395
RESOLUTION NO. 07-395
A RESOLUTION APPROVING THE
RECOMMENDATIONS OF THE STATE BOARD
OF ADMINISTRATION'S LOCAL
GOVERNMENT INVESTMENT POOL ADVISORY
COMMITTEE
WHEREAS, the Board of County Commissioners of St. Lucie County, Florida, has made
the following determinations:
1. The Local Government Investment Pool (LGIP) as managed by the State Board
of Administration's Local Government Advisory Committee, was established to provide local
governments a low cost, low risk, fully transparent investment option for their surplus funds.
2. St. Lucie County has relied on the Investment Pool to ensure that both surplus
funds and local funds are invested and readily available; and that the LGIP would be able to
return 1001'0 of the principal invested immediately.
3. In recent months, however, it appears that the Trustees of the Local
Government Investment Pool have not placed the highest priority on the safety of the
principal and liquidity of public funds.
4. This Board believes that it is in the best interest of the health, safety, and
public welfare of the citizens of St. Lucie County, Florida, to approve the recommendations
of the State Board of Administration's Local Government Investment Pool Advisory
Committee.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of St.
Lucie County, Florida:
1. This Board does hereby approve the recommendations of the State Board of
Administration's Local Government Investment Pool Advisory Committee as follows:
a. The State should provide a guarantee that participants will receive 1001'0
of their assets back. This can be subject to reasonable withdrawal provisions to meet
liquidity needs.
b. Continued use of an independent advisory firm to assist in the review of
holdings to develop a plan to restructure the portfolio to align with the guidelines to be
established in an interim investment statement communicated to participants. This statement
should ensure the safety and liquidity of the fund.
c. Supporting the BlackRock proposal of utilizing a "Fund A" and a "Fund
B" structure with the Fund B holding the questionable at risk securities only and Fund A
securing and maintaining a AAA rating.
d. Opposing redemption fees for withdrawal. Supporting the
implementation of temporary withdrawal provisions for immediate needs such as payroll, debt
service and operations. These would be temporary provisions until normal liquidity is
restored.
e. Focusing on communication from the State Board of Administration to
the participants is absolutely necessary. This includes full disclosure of the pool's portfolio,
current assets and liquidity potential. Reports should be prepared and distributed monthly
and holdings updated daily online.
f. An advisory committee should be established comprised of depositors
(local government officials as well as finance officers that manage government funds). This
committee will work with the State Board of Administration staff and the investment advisor
to establish a new long-term investment policy. This policy should include limits by type of
security, sector and issuer. The goals of this policy would be to (a) ensure safety of principal,
(b) ensure liquidity of funds, (c) yield. The policy will also provide withdrawal restrictions
only to the extent to prevent another "run of the pool". The committee should also meet
periodically, at least quarterly, to review reports and provide feedback to the State board
of Administration staff. The committee may request additional oversight from another
agency such as the auditor general to ensure that the interim policy is being followed.
2. The County Administrator is hereby directed to forward a copy of this
resolution to the Governor, the Cabinet, and the County's Legislative Delegation.
After motion and second the vote on this resolution was as follows:
Chairman Joseph E. Smith AYE
Vice-Chairman Paula A. Lewis AYE
Commissioner Doug Coward AYE
Commissioner Charles Grande AYE
Commissioner Chris Craft AYE
PASSED AND DULY ADOPTED this 11th day of December, 2007.
ATTESTED:
~4
DEPUTY CLE
BOARD OF COUNTY COMMISSIONERS
ST. LUCIE COUNTY, FLORIDA
C> BY:~~.~
! CHAIRMAN
APPROVED AS TO LEGAL FORM AND
CORRECTNESS: