Finance

Clerk’s Annual Report

2007-08 Budget Summary by Expense

2007-08 Budget Summary

UPDATE ON THE COUNTY SBA FUNDS

Since we last updated you on the status of Wakulla County funds held in SBA (State Board of Administration) there have been quite a few developments. 

First, SBA has had a fine interim director, General Bob Milligan, at the helm during this difficult time.  I know him to be a man of honor and integrity, and have twice met personally with him to discuss small county concerns relating to the SBA.   Both discussions have gone well, and the SBA has continued to be congnizant of small county issues, as reflected in their policies.

Second, a permanent fund manager has been hired by the State to run SBA, Federated Management.  When compared to the news from last November, much of the news coming out about the most recent performance of the investments SBA has been positive for investors.  There are however, growing concerns about how the SBA got in the shape it was in and how it communicated to investing units of local government on these matters during at least the last year.

In addition to an internal audit currently underway (ordered by the SBA Trustees-the Governor, Attorney General, and Chief Financial officer of Florida), the legislature recently announced doing their own investigation into the activities of the SBA over the recent past.  We certainly await the results of these audits. 

Just this week, the CFO discussed the State litigating against the institutions who sold the problematic securities to Florida.  No one is sure of where this will all lead, but there are clearly questions about why the State’s advisors sold them some of these securities, and whether the SBA was following their own rules, which we in local government depend upon them to follow.

It is important to note that as of the last communication from SBA, no investments had been sold at a loss of principle.  As to the future, we have reason to believe that with the reserve held by SBA, and the market conditions improving somewhat, all local government shareholders in SBA should emerge in good shape.  As of 3-14-08, our balance in SBA is $1.06 million.  We have conscientiously chosen to withdraw the maximum allowable when the State has “unfrozen” funds, are well diversified in our holdings, and will make future decisions about SBA as the facts come out and the State shows a level of responsibility commensurate with those findings.

Thank you for the privilege of serving you.

Brent X. Thurmond,Clerk of Court
Wakulla County, FL
3056 Crawfordville Highway
Crawfordville, FL  32327

COUNTY SBA FUNDS

As we have for most of the last 20 years, Wakulla County Board of County Commissioners, through the office of Clerk of Court, has had funds on deposit with the State Board of Administration, Local Government Investment Pool.

This investment vehicle was established by the State 25 years ago as a low-cost, safe, highly liquid, money market type fund.  It is by law a proportional fund, meaning every participant holds a proportional share of its investments.  It has always lived up to that reputation until recently.

In the latter half of November, there was a “bank run” type situation, where several larger local governments withdrew large sums of the funds.  Due to some liquidity problems that resulted, things have changed rather dramatically.  On November 29, 2007, the SBA trustees (the Governor, CFO, and Attorney General) froze the fund to withdrawals and subsequently have placed limits on withdrawals.

As of 12/19/07, Wakulla County has $3.6 million in SBA, and we anticipate based upon projected withdrawal capacities, along with our other cash held at local banks, being fully able to timely pay all of our obligations for the remainder of this fiscal year (through September 30, 2008. 

We remain cautiously optimistic about our fund balance, about the appropriateness of the investments SBA made with the local government pool funds that are just now coming to light, about any potential losses that are part of the SBA investments, about whether the State will stand good for any problems caused by their actions, and how the State will address the issue of proportionality as it relates to any losses, among other issues and concerns.

We are keeping the Board of County Commissioners updated on this matter, and will continue to follow it on behalf of the taxpayers of Wakulla County.  If you have any questions, please let us know.