Created a public member majority on Treasury Oversight Committee (TOC) ensuring strong fiscal independent oversight.
Benchmarked County Investment Policy Statement (IPS) to peer counties and incorporated changes to security maturity limitations and added a duration limit to increase safety of principal consistent with our and other county’s public fund objectives of safety and liquidity.
Consolidated banking and investment activities into a single pooled fund that reduces duplication, achieves economies of scale to carry out coherent and consolidated activities, a structure consistent with the other 57 counties. This change resulted in reducing risk to the portfolio, streamlining the accounting and compliance processes and along with other efficiencies implemented reduced operational costs (10 basis points to less than 5 basis points) in addition to eliminating significant work that was not adding value to the operations.
Instituted a daily electronic file of security market value pricing from our custodial bank, easily confirmable by auditors and purchased a GASB 72 report from the custodial bank providing required disclosures for the County ACFR.
Hired an investment consultant to provide additional independent oversight on public funds and to review our internal controls and operational processes to further enhance the safety of public funds.
Hired an independent credit rating agency, Fitch, LLC to provide a first time ever credit rating of 100% of the pooled funds, and they issued the highest credit rating of AAAF, with a volatility factor of S1, indicating low volatility to market changes.
Implemented an economies of scale policy to trade in $50 Million blocks, significantly reducing our transactional staff time on both investment input and compliance and lowering overall costs of investing.
Consolidated all liquidity trades to a no-cost secure liquidity trading portal offered by our treasury management software (TMS) vendor significantly reducing our overall staff time, reducing our internal risk by automating workflow approvals, and minimizing trade processing time and costs and increasing training opportunities with the vendor at no additional cost due to negotiated revenue sharing of fees paid by the liquidity vendors on the platform.
Implemented a liability matching investment strategy that matches investment maturities to specific large cash outflows such as payroll and debt service, reducing trading staff time and costs and adding additional cost-efficiencies to operations.
Initiated a strategy to maintain a higher liquidity base in early 2020 due to economic uncertainty that significantly benefited the County when the Federal Reserve shortly after raised short-term interest rates over 5% in mid-2020.
Implemented a higher quality pooled fund portfolio to primarily purchase explicitly and implicitly backed US Government debt instruments that, when there were economic downturns and the recent banking crisis, allowed the pool participants and the Treasurer to not worry about the loss of principal from credit issues and implemented a policy focus on improving cash forecasts accuracy to earn additional yield safely versus taking additional credit risk.
Designed a Specific Investment strategy earning $18+ million that replaced the annual OCERS employee pension pre-payment discount savings of $18+ million when interest rates rose and County proposed borrowing funds at higher rates would not have resulted in County savings and renewed the agreement with the CEO for a second year due to its success providing savings of over $40+ million in the last two years.
Contracted with an outside accounting firm for an ACFR of the County Treasury to provide additional oversight and transparency of the public funds and changed the annual compliance audit from an agreed-upon procedure to an audit with an opinion that further protects pool participants from having additional oversight and transparency of records.
Added additional transparency for the public on the octreasurer.gov/publicfunds website by including audit reports and copies of the TOC annual report since 2011 along with the TOC agenda and minutes and a quick URL link to online information.
Expanded the required annual TOC report to provide a summary of the activities during the year of the TOC and specifically provide details on reports issued and compliance findings and status, if any were found.
Added a secure online portal for monthly account statements for non-county local agency pool participants significantly reducing internal administrative time and providing higher security for report distribution and ease of customer use 24/7 (excluding Educational Districts).
Increased transparency of the market value of the pooled funds in the monthly investment by adding the net asset value (NAV) due to its significant to the public fund objective of safety to the first page of the executive summary, and also added safety protections to the IPS that if NAV drops below 99.75, the variance will be reported with any proposed impact on forecasted cash outflows in the report.
Received recently a survey produced by Sacramento County as of September 2024, with investment data from 14 counties, including many peer counties with data that established Orange County pooled funds having both strong liquidity and a higher return than most other counties (attached). Orange County is in the top four ranking of market value at 100.45% (nine counties including Los Angeles (96.97%), San Diego (99.56), San Francisco (99.61%) and Riverside (99.82%) are below 100.00). The County’s yield at 4.46% is higher than all of the four counties noted under market value, with San Diego County similarly sized at a 3.61% yield, which calculates out to an additional revenue by Orange County with a .85% higher yield to $117 million annually. Due to expected possibly cash outflow in 2025 and beyond, Orange County is well positioned to meet any cash outflow needs with a weighted average maturity of approximately 1 year that also allow Orange County to take advantage of the slowing of interest rate cuts by the Federal Reserve.
Reduced investment compliance exceptions to almost zero during my tenure reported in the various compliance reviews and audits required by law and the overwhelming majority of the limited number of compliance exceptions were self-identified by my Office and all reported in the monthly investment report and at each of the Treasury Oversight committee meetings.
Audited recently by the Internal Audit Department in the area of cash receipts that did not contain any critical control weaknesses.
Policy and operational changes in Public Funds since 2011