Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the County Finance topic
No spam. Unsubscribe anytime.
Ada County treasurer reports $252 million in tax collections, flags LGIP sensitivity to Fed rate cuts
Summary
Ada County Treasurer’s Office reported roughly $252 million in tax collections to be distributed, noted that about $51 million will go into the Local Government Investment Pool (LGIP), and cautioned that LGIP yields could fall if the Federal Reserve lowers rates.
Ada County Treasurer Bev Moss and Treasury staff reported during the commission’s July 15 meeting that the county will distribute approximately $252 million in tax collections for the period and that roughly $51 million of that will be added to the county’s Local Government Investment Pool (LGIP).
Tim Klein, speaking for the treasurer’s office, said the LGIP’s current yield to maturity is about 4.356 percent and that the county’s money market yield is about 4.147 percent. He told commissioners that if the Federal Reserve cuts rates — potentially in September according to discussion at the meeting — yields on short-duration holdings such as the money market and much of the LGIP could decline, which would reduce income realized by the county’s investment portfolio.
"We had a total tax collection of about 252,000,000 that was distributed," Klein said during the presentation. "If you just look at the LGIP there in the very top, in the summary, you'll see that the, current yield to maturity is about 4.356. And then ... the money market now is dropping. It's at 4.147."
Klein explained that a sizable share of the county’s liquidity is held in short-duration securities (he said nearly 98% of holdings in the LGIP are six months or less), which leaves the portfolio sensitive to short-term rate moves. He said staff is monitoring options such as extending duration to capture higher yields if market conditions allow, but county investment policy limits holdings to secure, liquid assets.
The treasurer’s presentation also referenced recent Consumer Price Index figures; Klein said CPI for the latest month came in at 2.7 percent, above the Federal Reserve’s 2 percent target.
Why it matters
The county’s investment income helps support operations and programs; a pullback in short-term yields could lower expected revenue from the LGIP and money market accounts. Staff said they will continue to monitor markets and consider duration adjustments within statutory investment limits.
What commissioners asked
Commissioners pressed staff about limits on investments and timing of potential Federal Reserve action. Klein reiterated statutory and policy constraints that favor secure, liquid investments for county funds and said staff will return recommendations as market conditions change.
