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County Funds A Slow Grow

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By KEVIN WIATROWSKI

kwiatrowski@tampatrib.com

Published: November 9, 2008

While the stock market has performed like Busch Gardens' SheiKra roller coaster, Pasco County's investment portfolio has offered all the thrills of a kiddie ride.

A recent report by the Pasco County Clerk of Court's Office, which manages the county's investments, shows a slow and steady growth rate of 1 percent or less on $241.6 million the county has kept in investment funds.

Until last month, the county's funds were spread over several investment vehicles, including the state's Local Government Investment Trust and two other funds run by the State Board of Administration, known as SBA A and SBA B.

Last month, commissioners directed the clerk's office to shift the county's investments to a low-interest money market fund invested heavily in U.S. Treasury bills. Treasury bills have become a haven worldwide for investors concerned about wild swings in the stock market.

The money market was deemed safe, but the lack of risk - and the widespread demand for Treasury bills - has reduced the return to almost nothing, said Jay Kaminski of the clerk's office.

The county has about $22 million tied up in the moribund SBA B fund, which state officials froze last year because it held some "toxic assets" that included the kind of sliced-and-diced subprime mortgage components that recently turned Wall Street on its ear.

As the county's SBA B investments mature, they come available and can be moved to safer locations. In the meantime, anyone with money in the fund is blocked from removing it.

"I think it's safe to say that everyone that has money in that B fund is going to incur some losses unless the state steps up and make us whole," said County Commissioner Michael Cox, a certified financial planner.

Cox serves as a trustee on the Florida Trust, the successor to the Local Government Investment Trust, which plans to create its own money market fund.

Cox said Thursday he plans to meet with the incoming clerk of court, Paula O'Neil, and the county's financial staff to discuss options for investing the county's day-to-day funds. One option might include shifting money into the Florida Trust's money market.

"The fact that I'm serving as a trustee on that gives Pasco County an advantage because I'll be able to see the reports," Cox said.

Even as Cox was speaking, the New York Stock Exchange was plunging for the second day in the row, driving the Dow Jones Industrial Average below 9,000 points.

"Just because the stock market is going crazy doesn't mean the bond market is going crazy," Cox said.

Reporter Kevin Wiatrowski can be reached at (813) 948-4201 or kwiatrowski@tampatrib.com.

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