Seminole County adopts investment-adviser recommendations; board discusses Israeli bond option

Seminole County on Jan. 28 voted unanimously to implement the county investment adviser's recommendations to adjust the county's portfolio strategy and extend the average maturity of certain holdings, the Board of County Commissioners said during its morning session.

Scott McIntyre, the county investment adviser, told commissioners the U.S. economy was "on solid ground," cited recent Federal Reserve moves and recommended shifting some funds from short-term pool rates into longer Treasury maturities—targeting roughly three-year securities—to lock in yields while preserving liquidity.

McIntyre said the recommendation is designed to ‘‘bolster income’’ for the county’s portfolio as market conditions evolve. He told the board current yields allow the county to extend average maturity without materially reducing income and that the county’s portfolio average yield would shift only slightly under the recommended purchases.

The discussion included Commissioner Constantine asking about higher-yield foreign options. McIntyre explained that purchases of Israeli Jubilee bonds—nonmarketable sovereign issues that recently yielded above 5 percent for some buyers—would require a minor amendment to the county’s investment policy before the county could purchase them. "Your policy will need to be slightly adjusted to allow for those. You can do those within your state statutes," McIntyre said. He also noted credit agencies had been reviewing Israel amid recent geopolitical events and that counties that buy those bonds typically limit exposure to a small percentage of the overall portfolio.

Several commissioners expressed caution about investing public funds in securities tied to a nation at war. Commissioner Lockhart said investing in Israel because it is an ally “is political investment,” and Commissioner Lawrie and others said any allocation would likely be small and should be approached conservatively. McIntyre said other Florida counties have made similar, limited allocations and that he had sent sample policy language and Palm Beach County’s limits for review.

After discussion, a commissioner moved to "implement the recommendations of our financial advisor based on the report submitted today, and recommend the clerk implement said board's recommendation." The motion was seconded and carried unanimously.

The board instructed the clerk’s office to implement the advisers’ recommendations and to coordinate policy language if the board later opts to permit the purchase of Jubilee bonds or similar instruments. McIntyre said he would forward additional materials, including Palm Beach County data, to the clerk for the board’s review.

The action does not authorize any sovereign foreign purchases immediately; McIntyre and staff said a policy amendment is required before purchases of Israeli Jubilee series bonds could proceed.