This report examines the performance of the public funds currently invested by the Will County Treasurer’s Office. This narrative covers investment activity and performance in October 2011.

Corporate Class C Fund

The Corporate Class C Fund is the principal operating account for the county. The Treasurer’s Office uses this fund to pay employees, vendors, and other operating liabilities.

As of September 30, 2011, Corporate Class C Fund had a total balance of $138.6-million. Of this total, we have invested 69.5% ($95.6-million). The total value of the Corporate Class C Fund decreased approximately $5.3-million, month-over-month.

As we discussed last month, the county will draw on its investments to cover its operating expenses until the next levy collection in 2012. Total investments in the Corporate Class C Fund are $48.6-million greater with a slightly better yield than at this time last year. As the county draws on these investments, we expect smaller swings in performance because maturing investments have stable PAR values.

Overall performance remains ahead of our benchmarks, with a weighted average yield of 91 basis points, or 0.91%. By comparison, the 6-Month Treasury Bond has a yield of 5 basis points, or 0.05%.

Treasurer’s Class C Fund

The Treasurer’s Class C Fund is the county’s capital improvements fund. The Treasurer’s Office holds proceeds from the county and township motor fuel tax, automation funds, and other revenue.

As of October 31, 2011, Treasurer’s Class C had a total balance of $171.1-million, an increase of $2.3-million month-over-month. Of this total, we invested $145.1-million (84.8%) in fixed income classes.

Treasurer’s Class D Fund

The Treasurer’s Class D Fund holds all other county money not belonging in the Treasurer’s Class C Fund. Examples of holdings include our Sale in Error, Center Point Pass Through, and Special Trust Funds.

As of October 31, 2011, Treasurer’s Class D Fund had a total balance of $5.3-million. Of this total, we invested $2-million (39.4%) of Special Trust Fund money in municipal bonds.

By the end of 2011, we will invest $3-million of the Special Trust Fund in instruments that mature every 30 days. We expect yield in this fund will be lower than other funds because of shorter maturities.

Collector’s Class A Fund

The Collector’s Class A Fund holds all taxes and special assessments received by the County pending distribution to the various taxing districts in the county. The money in these funds is fiduciary holdings.

As of October 31, 2011, Collector’s Class A Fund had a total balance of $10.7-million. Of this total, we invested $2.5-million (23.2%) in commercial paper. The remainder is in money market funds for bi-weekly tax distribution.

Benchmark Tests

The Will County Treasurer’s Investment Policy sets two benchmarks to which we will compare investment performance:

  1. The 3-month average of the 90-day Treasury Bill as quoted by Bloomberg LP
  2. The Money Funds Report of all taxable 7-day simple yield as reported on www.IMoneyNet.com

As of October 3, 2011, both the Corporate Class C Fund and Treasurer’s Class C Fund exceed our policy benchmarks. The funds also exceed informal benchmarks against the 12-Month Treasury and 52-Week CDAR. For comparison to the broader market, both funds exceed the yield of the 5-Year Treasury.

October 3, 2011 Collector’s Class A Corporate Class C
7-Day Net Simple 0.0200 % 0.3600 % (Exceed) 0.9076 % (Exceed)
90-Day Treasury Bill 0.0100 % 0.3600 % (Exceed) 0.9076 % (Exceed)
12-Month Treasury 0.1000 % 0.3600 % (Exceed) 0.9076 % (Exceed)
52-Week CDAR 0.1300 % 0.3600 % (Exceed) 0.9076 % (Exceed)

October 3, 2011Treasurer’s Class CTreasurer’s Class D7-Day Net Simple0.0200 %1.9126 % (Exceed)0.0262 % (Exceed)90-Day Treasury Bill0.0100 %1.9126 % (Exceed)0.0262 % (Exceed)12-Month Treasury0.1000 %1.9126 % (Exceed)0.0262 % (Exceed)52-Week CDAR0.1300 %1.9126 % (Exceed)0.0262 % (Exceed)Summary
In a period of declining yield, our portfolio has strong performance compared to its benchmarks. Equally, our portfolio meets all six Investment Objectives as set forth by our Investment Policy.

1. Provide investments that conform to all federal, state, and regulatory requirements.

2. Maintain the Public Trust by including participants in the investment process that seek to act responsibly and that avoid transactions that may impair public confidence.

3. Implement an investment strategy that provides sufficient liquidity to meet the county’s operating, payroll, capital and statutory disbursement requirements.

4. Structure investments to preserve principal capital and perfect the county’s interests.

5. Establish procedures to control risk and diversity the portfolio regarding security types, maturities and financial institutions.

6. Invest public funds to maximize overall portfolio yield while minimizing risk.

Finally, the period of active investing has ended for the year. Our office will begin drawing on our investments to cover the county’s operating expenses until next June. Both the Treasurer’s Class C fund and Corporate Class C Fund are more heavily invested than at this time last year. The funds also are more diversified and in smaller money pools than last year. We expect our approach will provide a consistent income stream for the county while remaining invested in the market as long as possible.

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