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State Treasurer urges funding for investment staff and LGIP bar authority; committee adopts LFC recommendation amid questions
Summary
State Treasurer Cindy Montoya told the committee that the Local Government Investment Pool has tripled in size and that external audits recommend adding a CIO and portfolio managers; she requested about $2 million to sustain operations and retain staff, and urged the legislature to preserve the LGIP bar authority. The committee adopted the LFC recommendation but signaled continued review.
State Treasurer Cindy Montoya told the Appropriations & Finance Committee that the Treasurer's Office now manages roughly $19.4 billion in state and partner funds and that the Local Government Investment Pool (LGIP) has grown from about $1.5 billion to roughly $3.37 billion.
Montoya said the office earned approximately $722 million in investment income in the most recent reporting period and that a legislatively authorized portion of LGIP fees (5 basis points) supports the office's operations. She asked the committee to preserve the office's ability to BAR (budget adjustment request) and retain the full LGIP fee authority so the office can invest in staff and systems.
She described external audit recommendations that called for a chief investment officer and additional portfolio managers and said those roles are necessary to meet industry best-practices where one portfolio manager typically oversees about $4 billion in assets. "We're asking for about $2,000,000. That's about 1 day's worth of the money that we've earned," Montoya told the committee, arguing the investment would generate returns and reduce operational risk.
Analysts and legislators reviewed fund reversions, vacancy data and unfunded positions. LFC placed some LGIP-generated revenue into the base and recommended a personal-services increase; the Treasurer asked for the executive recommendation to secure full ongoing bar authority and additional positions. Committee members sought projected returns from the requested staff and asked for clearer dollar-for-dollar ROI projections.
Treasurer Montoya warned of single-point-of-failure risks if staff departures occur and said losing experienced staff would undermine LGIP operations and local-government outreach. LFC analysts noted the committee funded some personal-service increases through LGIP receipts in the LFC recommendation, and the committee ultimately adopted that LFC recommendation by voice consent while reserving further oversight and follow-up discussions about BAR authority and staffing levels.
Montoya also outlined education and outreach programs (STABLE accounts, financial literacy outreach to schools) and work with universities to develop a concentration in governmental accounting to grow the state's financial workforce.
The committee approved the LFC recommendation; members and the Treasurer agreed to continue discussions about BAR authority, the precise staffing mix and measurable ROI for added positions.
