Time for a ‘fresh pair of eyes’ in the Treasurer’s Office
Posted: Tuesday, Oct 9th, 2012
In last week’s Arizona Silver Belt, Mr. Bob Moore from Colorado sent a letter talking about the importance of a Treasurer putting safety ahead of risk. He implied that someone different in the office would put the tax dollars of Gila County at risk just “to earn a small amount of additional interest income.” I agree with Mr. Moore that one should never put safety ahead of risk.
The Treasurer is responsible for the people’s money as the Banker for the County. My investment philosophy is Safety and Security before Liquidity and Liquidity before Yield. Arizona Statutes spell out very well what investments are acceptable by law.
Mr. Moore has a vested interest in keeping the status quo in Gila County. Mr. Moore is the account manager at Institutional Capital Management (ICM) in Lafayette, Colorado that manages over $28 million of Gila County money.
Let’s take a closer look at what’s going on. Yes, the County Treasurer has obtained competitive returns on the money invested. However, any money invested is at some level of risk because you have given it to someone else to invest. Is there any opportunity to increase the return without putting the county taxpayer’s money at a higher risk than it already is? I say YES! For example, the Arizona State Treasurer is the Banker for the State of Arizona. While Gila County in total has approximately $65 million under investment, the AZ Treasurer has over $14 Billion that they manage. This means with a larger amount to invest, the state gets a higher return on that money with the same level of safety ahead of risk. They have to comply with the same state law that our County Treasurer must meet. In comparison, while the county money earns approximately 1%, some of the state pool money is earning 1.5%, 50% better return with no increase in risk. In fact a majority of counties in Arizona invest with the State Treasurer to take advantage of this higher return without jeopardizing the safety of their money. My estimates indicate Gila County could earn as much as $125,000 more just by moving one of the investment pools to the AZ State Treasurer. This is not a “small amount of additional interest income.”
Another item to look at is the management cost paid to an investment company for their service. Currently the cost of managing our money at ICM is about 12 basis points (100 basis points equals 1.0%). The AZ State Treasurer only charges 6 basis points. What does this mean? If we would invest the money we have at ICM with the State of Arizona, we would save $16,000 a year in just the management cost. Just ask a tax payer if this is too small an amount to work for as a savings to the county! Additionally, the management fee the County Treasurer is paying is going to people who live in Colorado. Wouldn’t the taxpayers of Gila County prefer to keep our money in the State of Arizona, particularly if we will earn more for that money as well as having a lower cost to have it invested?
This is just a sample of some of the ideas I would bring to the County Treasurer’s office from ‘thinking outside the box’. It’s time to put a “fresh pair of eyes” in the Treasurer’s office. I would appreciate your support and your vote on Nov. 6.
Don Ascoli, Candidate for Gila County Treasurer
Paid for by the Ascoli4Treasurer Committee.