FOR IMMEDIATE RELEASE
March 24, 2008
Contact:
Jill Chamberlin
850-921-2002
FLORIDA HOUSE CONSULTANTS ISSUE REPORT, RECOMMENDATIONS ON STATE
BOARD OF ADMINISTRATION’S LOCAL INVESTMENT POOL
TALLAHASSEE—Consultants hired by House Speaker Marco Rubio in February to conduct a due diligence review of the Local Government Investment Pool managed by the State Board of Administration have issued their report, urging the Legislature to consider 16 recommendations for actions to restore public confidence in the Pool.
The consultants, Tanya Styblo Beder, chairman of SBCC, a New York based firm providing independent advisory services, and Thomas Tew, partner in the Miami law firm of Tew Cardenas, are considered national experts in asset management, securities, and related litigation. In February, Rubio also announced that State Rep. Carl Domino, R-Jupiter, an investment manager for 35-years, would lead the House’s inquiry.
“I am pleased to present you with a report prepared by the team which contains 16 recommendations on how this confidence building may occur,” Domino said in his transmittal letter of the report to Rubio. “The report addresses a host of issues, some of which could be implemented immediately, and some which require further review and study,” he said.
Domino said, “I propose that the recommendations which can be implemented this session be prepared in a bill, in partnership with the Senate, and brought to the Governor for his signature as soon as possible. The changes that can be made now, I firmly believe, will go a long way in returning the Pool to its respected status as one of the best local government pools in the nation.”
In a statement today, Rubio said he is urging the House “to follow Rep. Domino’s guidance in adopting laws designed to increase investor confidence in the Pool.”
“As the consultants’ conclude in their report, this sort of opportunity to help local governments maximize their investment earnings safely and at low cost is an important service the state can provide, “ Rubio said. “The efficiencies offered by the Pool have generated hundreds of millions of dollars in extra earnings for local governments; we need to ensure this program is strong and ongoing.”
The Pool held some securities tied to the subprime mortgage market, leading to a run last year by local government investors. The Pool, once the largest in the nation before investors pulled their money, lost nearly half of its $26 billion before the state froze the Pool. It operates to provide local governments in Florida with a low-risk, low-cost opportunity and investors use it like a checking account, drawing on it
to pay day-to-day expenses. The State Board of Administration manages the Pool under the direction of its trustees, Gov. Charlie Crist, Chief Financial Officer Alex Sink, and Attorney General Bill McCollum. The Florida Legislature is scheduled to adjourn its 60-day 2008 session on May 2.
Copies of the due diligence report, the full letter from Rep. Domino and Speaker Rubio’s transmittal letter to the SBA Trustees are attached.
