News & Notes
SBA Reopens Local Government Investment Pool
The State Board of Administration (SBA) announced the reopening of the Local Government Investment Pool (LGIP) this Thursday, one week after they shut the pool down at an emergency meeting. Over the past few weeks local governments across the state began withdrawing funds from the pool at record rates after learning that specific investments within the LGIP had been downgraded. Upon the pool's reopening Thursday, local governments withdrew approximately $1.2 billion under new guidelines prescribed by the SBA that limit withdrawal amounts.
To restore confidence in the pool, the SBA hired BlackRock, a global investment management firm and assembled an advisory committee of local government finance professionals to advise them how to best protect the reaming assets in the pool, develop interim procedures to ensure adequate cash flow and ensure the long term viability of the program. Those representing FAC on the advisory committee are Eric Johnson, Director, Hillsborough County Office of Management and Budget; Davin Suggs, Director, Gadsden County Office of Management and Budget; and Marie Gouin, Director, St. Lucie County Office of Management and Budget.
On Tuesday of this week the SBA adopted a recommendation to divide the remaining assets of the LGIP into two separate pools. One pool now contains the high quality, AAA investments in the portfolio (approximately $11 billion) and second pool contains the investments in default status or in "distress" (approximately $ 2 billion).
FAC and its appointees to the advisory committee are engaged in all activities related to this matter. There have been numerous meetings, conference calls and other communications among the SBA, LGIP Advisory Committee, the Governor's Office, the Chief Financial Officer's office and other local government associations. It is anticipated that there may be additional action by the SBA Trustees at their next meeting on Dec. 18 to further restore confidence in the pool.
We will continue to keep you apprised of any developments on this issue. If you have any questions you can obtain information at the SBA's website: https://www.sbafla.com/pool/ or contact John Ricco at 850/922-4300.