New Investment Strategies at Lake County Treasurer's Office Helps Recapture Lost COVID-19 Revenue.
The Lake County Treasurer’s Office announced that in fiscal year 2020 they earned $9.7 million in investment income across all funds for Lake County. “By using improved investment strategies over the past two years we were able to recapture some lost COVID-19 revenue in Fiscal Year 2020,” County Treasurer Holly Kim said.
“For every dollar the Treasurer’s Office spent in 2020, it received $8 in return revenue due to the changes in our investment strategy,” Kim said. “That money went a long way to helping the county during this fiscally trying time. Our office not only pays for itself, but we also reduce the tax burden by bringing in this non-tax revenue.”
The Treasurer’s Office ultimately generated an investment income of $9.7 million across all funds in Fiscal Year 2020 in addition to $3 million in fees for Lake County. Kim said that money is earmarked for the Lake County’s use, not as a special fund for the Treasurer’s Office. This money is in addition to the property taxes collected for all local governments in Lake County.
Prior to Treasurer Kim taking office, Lake County’s self-managed investment portfolio was mostly in the form of CDs. Had she stuck with that policy during Fiscal Year 2020, the county would have generated about $1.9 million when the pandemic hit.
However, Kim said the treasurer’s office met with investment firms in 2019. One important result of these meetings was a change in the County’s investment policy that allowed the office to begin purchasing corporate bonds and commercial paper that matured within three years. The decision to change investments was allowed under the new parameters of the Illinois public funds investment policy and allowed her office greater flexibility in the types of investments the county could purchase and manage.
“When the economic crisis hit because of the pandemic, the Federal Reserve severely cut interest rates to almost zero, prompting yields on CDs to drop significantly,” Kim said. “We shifted gears quickly to reorient our investment strategies and purchased short-term, highly-rated corporate and municipal bonds, which paid higher returns.”
She also adopted a “buy local” mindset to support Lake County and purchased municipal bonds from a dozen Lake County taxing districts.
“That decision was a win-win because we were able to reap the benefits of purchasing the bonds while the taxing district reaped the benefits from selling,” she said. “Our changes were made in our investing strategies but always grounded in maximum safety and compliance with state laws on public funds investing.”
Lake County Board Chair Sandy Hart said, "We are thankful to Treasurer Kim and her team for their efforts in making sure that these important investments benefit our community. The return on these investments goes directly back to the County, which aids in our efforts of keeping property taxes as low as possible.
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