Travis County Commssioners Court
April 8, 2003
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Item 35
35 is consider and take appropriate action on request to approve order amending chapter 23, investment policy and procedures, of the Travis County code.
>> good morning. I’m mary may. [inaudible] our annual review of the Travis County investment policy. The investment advisory committee has met and we viewed our recommended changes and concurred with them. And I’m now bringing these changes to you for your review. And possible approval. Most of the recommended changes really best practices in our industry. Most of them Travis County is already doing these things, but we felt that they were important enough to include them in the policy. We do have one change which does represent a change and it has to do with our investments in local government investment pool. Travis County currently invests in two of these. At the current time, our policy reads that the investment pools may only invest in securities that Travis County is allowed to invest in. As you know, we are in several instances more conservative than the state law. I’m recommending that we change our policy so that the investment pools that we invest in can invest in any security that is allowed by the state law [inaudible] investment act. The changes -- the change primarily will be in commercial paper. It will allow the pools to invest in commercial paper issued by domestic companies whose parent companies are non-domestic or foreign companies. Also, it will allow the pools to invest in commercial paper that has a credit rating of either a-1 or p-1, whereas our policy requires that Travis County invest directly in commercial paper that has a credit rating of a-1 and p-1, which is more strict. So these are the main changes that would be involved. There are two main reasons why I feel that this should be. One is that the pools are not bound by our policy and so they could, for excellent reasons of their own, make a change that would suddenly put us out of compliance with our policy. We really can't force them only to buy things that we can buy. And the other one is that these pools are managed by huge investing firms with large staffs of analysts. And it's more appropriate for them to have these investments than it would be for Travis County to buy them directly. This will not change the way Travis County invests in commercial paper. We will continue to invest as the policy requires in domestic commercial paper, companies that are truly domestic, do not have the foreign parents. And we will continue of course as appropriate to invest only in commercial paper that's a-1 and p-1. Do you have any questions?
>> mary, not a question about that, could you just give a quick reminder as to who sits on our investment advisory committee to kind of give us the perspective who it is working with your office to make this recommendation on best practices?
>> sure. Two of your colleagues, Commissioner Davis and Commissioner Daugherty are on the committee. In addition we have the treasurer and the county auditor from Travis County as well as christian smith, the executive manager that we report to. And then we have outside advisers who are in the investment profession. We have dennis whaley from the city of Austin. We have marvin poundton. We have -- let's see, who else? She's gone. The -- gosh, I’m [inaudible]. Lcra is represented. So we do have people who have investment portfolios and make decisions in this field every day.
>> and [inaudible] sector representatives, are they not on the committee?
>> we do have -- well, no, I guess the university of Texas system is represented, but they are governments as well.
>> do you have a couple of bank people?
>> we have a retired bank person, that person is retired from j.p. Morgan chase.
>> is this the recommendation of the committee?
>> yes, it is.
>> and is this pretty much what the other large public entities do?
>> yes. I have checked with the other large counties within the state of Texas, and they are -- their pools are in most cases, where they have pools, they are investing in whatever commercial paper the law allows. And then there is one, the largest county that invests indirectly in commercial paper that the law allows. So yes, it's consistent with their practice.
>> and do the public representatives on our committee support this also, lcra, city of Austin and u.t.?
>> yes, they do.
>> that's why I move approval.
>> second.
>> any more discussion? All in favor? That passes by no one vote.
>> thank you.
>> thank you.
>> thank you.
Last Modified: Wednesday, April 9, 2003 1:25 PM