Hillsborough County Public Schools Business
Action Item

DATE: Thursday, February 7, 2008
TO: School Board Members
FROM: MaryEllen Elia, Superintendent

SUBJECT / RECOMMENDATIONS

Approve Emergency Item to Diversify Investment Accounts (Business Office)

EXECUTIVE SUMMARY

The prudent investment of public funds is a key responsibility of government officials entrusted with public monies. The success or failure of an investment program must include ensuring that the funds are safe and secure, and at the same time, yielding market rates of return.

The investment process involves many players. Ultimate responsibility for the investment function belongs with the governing body. The Hillsborough County Public Schools has a formal investment policy. This agenda item is seeking approval to invest our dollars safely outside of the State Board of Administration (SBA).

As the dollars at the SBA start becoming available, we are seeking to open five separate “AAA” rated Money Market Mutual Funds (MMMFs), to provide additional investment options for district funds while at the same time avoiding concentration/exposure to any one fund in particular. Why Money Market Mutual Funds? A money market fund is a mutual fund that invests in forms of debt that mature in one-year or less. These funds seek to limit exposure to losses due to credit, market and liquidity risks. Money market mutual funds are defined and regulated under Rule 2a-7, which governs the credit quality, diversification practices, and maturities of portfolio securities of the Investment Company Act of 1940. Money market mutual funds are required by the Act to maintain a weighted average maturity (WAM) of 90 days or less. The benefits of money market funds are typically safety of principal and a fixed net asset value (for example, a dollar in and a dollar out).

Currently, we have established one of the five accounts with Evergreen Investments, a fully owned subsidiary of Wachovia. The Evergreen Institutional U.S. Government Money Market Fund is rated AAAm by S&P (Standard & Poor’s) and Aaa by Moody’s. The fund invests in securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities and repurchase agreements backed by such obligations.

As we continue to write, edit and recommend changes to the School Board’s formal investment policy we will identify and define risk tolerance, responsibility and establish control over the investment process.

ANNUAL DISTRICT GOAL(S) AND CRITICAL SUCCESS FACTOR(S)

N/A

FINANCIAL IMPACT (Budgeted: Yes)

There may be changes in the rates of return on our investments, but the amount of these changes cannot be determined until new investment options are available. Dollars will be transferred from the SBA accounts into established MMMF accounts.

EVALUATION

The Business Division will monitor established benchmarks, performance goals and market conditions to track our ongoing investments, to maximize the security of the principal and the interest earnings.

SUBMITTED BY:



Gretchen Saunders
Chief Business Officer
(813) 272-4270
A 5.23
Hillsborough County Public Schools (Florida) * Mtg.#20080207_287 * Section A Item# 5.23