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 July 2013.

Total Investment Portfolio

The county’s total holdings at the end of July had a market value of $238.2-million. The Treasurer’s Office has invested $186.9-million (78.5%) across a variety of fixed income security types (excluding cash). The total portfolio (including cash) has a Yield-to-Maturity of 82 basis points (0.820%) with an average maturity of 1,809 days (4.9 years).

The Treasurer’s Office began collecting the 2012 Real Estate Property Tax Levy in May 2013. Over the next six months, the office will collect and distribute approximately $1.67-billion in real estate taxes on behalf of more than 360 taxing districts.

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 July 31, 2012, the market value of the Corporate Class C Fund was $108.7-million. Yield in the Corporate Class C Fund, including cash and money markets, was 54.1 basis points.

Our office invested $11.9-million of the county’s levy during July, taking our total investment to $57.7-million. We structure this investment to mature beginning in December and continuing through next May so our office can meet the operational obligations such as accounts payable, receivable and debt service. By the end of September, we expect to invest $70-million into this structured investment.

Given the short-duration of this specific investment, we remain focuses on high-quality commercial and municipal bonds. We believe this sector is a safe place to earn a respectable interest rate compared to bank certificates or money market accounts. Compared to our Benchmark Goal, to be ahead of the Six Month U.S. T-Bill by 50 basis points, we are ahead by 10.9 basis points.

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 July 31, 2012, the market value of the Treasurer’s Class C Fund was $122.6-million. Yield in the Treasurer’s Class C Fund, including cash and money markets, was 1.1%.

The Treasurer’s Class C Fund has approximately $18.1-million on deposit in Money Market Accounts. These accounts are our cash reserve, and we draw on those accounts in months where our expenses are greater than the revenue we receive (from sources such as Motor Fuel Tax).

Of $18.1-million, we have a standing deposit agreement with MB Financial where we receive 0.25% yield on balances greater than $15-million. This interest rate is higher than what other Money Market Accounts return currently. Therefore, we “set aside” these funds and draw on the remainder.

In a typical month, we draw $500,000 to $750,000 to cover expenses. Over the past three months, however, our cash reserve has dropped by $5-million as a result of significant expenditures by the Highway Department. At the present rate, we will deplete our cash reserve by the end of FY2013.

Our office currently is working with William Blair & Company to redeem up to $15-million of fixed income investments by mid-September. We will implement a structured redemption where we will sell investments at a gain (or even) to raise the cash necessary without losing money.

Benchmark Performance

The Will County Treasurer’s Investment Policy sets two benchmarks against which we compare the performance of our investments.

  1. The 90-Day Average of the 1-Year Jumbo Deposit National Rate as quoted by the FDIC
  2. The 90-Day Average of the 3-Year Treasury Note as quoted by the U.S. Treasury Department

We use these two benchmarks because they closely relate to the length of time we hold an investment.

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