CLERK & COMPTROLLER’S INVESTMENT PORTFOLIO MANAGEMENT
PROTECTS TAXPAYER MONEY
Debt ceiling debate may affect portfolio’s rating, but not its ability to earn investment income
WEST PALM BEACH, FL (August 2, 2011) – As the debate over the debt ceiling went on in Washington, D.C., the Clerk & Comptroller’s office in Palm Beach County took steps to minimize risks to investments of taxpayer money.
“Because of our day-to-day active management of the county’s investment portfolio, we were able to safeguard taxpayers’ money to avoid a drop in investment income,” Clerk Sharon Bock said.
The nearly $1.8 billion portfolio earned more than $74 million in interest last year, all of which goes to help pay for county operations – providing critical income at a time when the county is slashing expenses. Investment income from the portfolio saved each Palm Beach County taxpayer $121 last year.
Because the portfolio pays the county’s bills, the Clerk’s office took steps to ensure adequate cash flow. The Clerk’s in-house investment professionals increased cash balances by selling certain securities and moving the proceeds into different accounts to ensure that liquidity wasn’t concentrated in any one place.
Since 2009, Standard & Poor’s has rated Palm Beach County’s investment portfolio at the highest possible credit rating – a AAAf rating. This indicates extremely strong protection against credit losses. The portfolio rating is still AAAf, but because of the potential federal credit downgrade, the county’s portfolio – like most county and municipal portfolios – is now on a negative credit watch.
Even with Congress reaching a deal on raising the debt ceiling, ratings agencies such as Standard & Poor’s have indicated they still may downgrade the U.S. Government’s credit rating. Should the U.S. Government’s credit be downgraded, Palm Beach County’s investment portfolio would be downgraded as well.
However, even with a slight downgrade, the portfolio’s investments will continue to be of the highest credit quality.
“Even in a downgrade, we don’t expect to see much of a change in our portfolio earnings,” Clerk Bock said. “We will continue to monitor the markets and make whatever moves we believe are necessary to ensure the county continues to earn money on taxpayers’ investments.”
The Clerk also averted the loss of millions of dollars from the portfolio when, in 2007, the State Board of Administration froze withdrawals from their managed local government investment pool due to the instability of the fund itself. The Clerk’s office was the first government agency in the state to question the soundness of the pool months before the crisis, and elected to withdraw all county funds prior to the freeze. Municipalities across the state lost millions of dollars in taxpayer funds.
As the independently elected Chief Financial Officer of the County, the Clerk & Comptroller’s office provides a check and balance on county government as the accountant, treasurer and auditor, handling finances, investments and county financial reporting.
For more information about Palm Beach County finances or to view the Clerk’s financial publications, please visit the Public Funds section of www.mypalmbeachclerk.com or call (561) 355-2996.
The Florida Constitution established the independent office of the Clerk & Comptroller as a public trustee, responsible for safeguarding public records and public funds. Clerk Sharon Bock is directly elected by and accountable to Palm Beach County residents. In addition to the roles of Clerk of the Circuit Court, County Recorder and Clerk of the Board of County Commissioners, the Clerk & Comptroller is the Chief Financial Officer, Treasurer and Auditor for Palm Beach County.
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