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County treasurer gets presentation showing higher yields from a longer portfolio; staff says portfolio earned more than LGIP since manager engagement
Summary
A private investment manager presented a review showing the county's longer-duration portfolio is earning higher yields than the local government investment pool (LGIP) over time; the treasurer's report noted part of the county's cash belongs to other local entities held by the treasurer.
A presentation by METER Investment Management director Greg Balsz gave the Lyon County Board of Commissioners a quarterly review of the county investment portfolio on May 15. Balsz said the county's portion under active investment management has a weighted-average life of about 1.57 years and a book yield near 4.38% (excluding the LGIP pooled funds), and he argued a longer-duration portfolio has generated incremental investment income compared with keeping funds entirely in the short-term Local Government Investment Pool (LGIP).
Key points from the presentation: - The managed portfolio is diversified and currently skewed to U.S. Treasuries and agencies; unrealized market losses reflect current market valuation but are not a realization issue if securities are held to maturity. - Since the county started the longer portfolio relationship the manager estimates the incremental value added over LGIP was roughly $214,000 in additional portfolio earnings before fees; fees since inception were presented as about $100,000 (the presenter stated fee as 7.5 basis points of assets under management). - The manager reviewed yield-curve behavior and argued that locking longer-term yields now can provide budget stability if short-term yields drop; the manager said the county's timing of allocation to the longer portfolio was favorable. - The treasurer (Josh Borley) clarified the pooled funds managed by the treasurer include cash that belongs to other local entities (fire districts, swimming pools, improvement districts); about two-thirds of invested cash is county-controlled funds while one-third represents other local governments that deposit with the treasurer.
Commissioners asked about fees and who benefits from earnings; the treasurer said investment income is allocated to participants proportionally and that the managed program was intended to increase long-term interest earnings available to the general fund and other local entities.
No action was taken; the presentation was informational.
