Board accepts Lake County pooled investment report; treasurer warns returns may moderate

The Lake County Board of Supervisors on a voice vote accepted the county pooled investment report for the quarter ending March 31, 2025, following a presentation by Treasurer-Tax Collector Patrick Sullivan and Chandler Asset Management.

The report showed a portfolio of roughly $526 million and a yield of about 4.09% as of March 31, with quarterly cash earnings of just over $5,000,000. Presenters said those results reflected strong interest income and fair-value appreciation over the prior 12 months; the 12-month return through April was reported at about 6.61%.

"The past numbers, all good news. ... Into the future, a little bit more uncertainty," said Carlos Oblides of Chandler Asset Management, summarizing the investment outlook. Oblides and county treasury staff told supervisors that recent market moves — driven in part by tariff developments and uncertainty in federal fiscal policy — have increased volatility in yields and could pressure future earnings.

Oblides reviewed economic indicators the advisory team is watching, including payroll gains, retail sales, inflation readings and Treasury yields. He noted that the two-year Treasury yield moved during the period and that investors have bid prices up and down in response to perceived risks. "Moody's... followed through" on a recent U.S. credit rating action, Oblides said, referring to recent downgrades by rating agencies and the potential market reaction.

Patrick Sullivan, Lake County treasurer-tax collector, told the board the portfolio was in compliance with the county's investment policy and with the California Government Code. "The answer is yes," Sullivan said when asked whether the portfolio met policy and statutory requirements.

County staff described the portfolio makeup and strategy: about 35% was held in U.S. Treasury securities, corporate bonds comprised the next-largest portion (roughly the high-teens percentage), and the remainder included cash sweeps and short-term liquidity investments. The portfolio's average duration is about 1.7 years, meaning it takes roughly that long, on average, for the portfolio to turn over. Staff said about 38%–40% of holdings fell in the six- to 12-month maturity band, and the county currently has only a very small allocation to the State Local Agency Investment Fund (LAIF), roughly 0.8%.

Treasury staff said the county has three investment components: the advisor-managed securities portfolio, a small seasonal liquidity portfolio, and an in-house liquidity component that uses bank accounts, LAIF and local government investment pools. Staff said they expect to increase liquidity in the near term and to take advantage of local government investment pools (LGIPs); the board was told it will see a related agenda item in the coming weeks to join a multi-county pool intended to provide greater flexibility and improved buying positions.

Supervisor Sabatier asked whether the county's investment policy still provides sufficient flexibility amid the expected turbulence. Sullivan and Oblides replied that the current policy remains adequate and in compliance with code but that staff are monitoring markets and could return to the board if changes are needed.

No members of the public spoke on the item. A supervisor moved to accept the pooled investment report; a second was given, and the chair called for the vote. "All in favor? Aye. Any opposed?" the chair said; the motion carried by voice vote and was recorded as accepted. The record does not specify individual vote counts.

Treasury staff closed by saying they expect portfolio earnings to level off from the recent peak and that the county will remain vigilant about credit quality, duration and liquidity as markets evolve.