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County's Investments Grew $7.5 Million in Last Fiscal Year

MANATEE COUNTY – During a BOCC special work session on Tuesday, county commissioners received an update on county investments from the Manatee Clerk of the Circuit Court. As of the end of the county’s last Fiscal Year ending Sept. 30, 2022, the county’s investment portfolio saw net earnings of roughly $7.5 million.

By state statute, the county clerk is the custodian of the county’s assets and is responsible for its investments, which currently total approximately $1.8 billion. The clerk’s staff and investment advisor manage the county’s assets and make reallocations in response to market conditions. During the first part of 2022, the clerk hired an independent asset management firm, Deep Blue Investment Advisors, due to the historically volatile and unpredictable market.

"I will say happily, at this time, after about four months into our new Fiscal Year, we are already up to about $18 million dollars in interest. We expect to more than double what we did last year," Colonneso told commissioners in her opening statements.

Two representatives of Deep Blue Investment Advisors appeared before the board Tuesday to provide an investment update. Dominick Cristofaro, Deep Blue’s Director of Client Advisory Services, told commissioners that the earnings so far achieved by the county’s investments were notable considering interest rates and adjustments from the previous two years.

"We’ve looked at other counties and your county has done an excellent job of making sure that you earned the most for your county. $7.5 million dollars is an excellent amount," Cristofaro told the board.

Deep Blue’s National Director, Ken Couch, expanded on Cristofaro’s statements by explaining that the firm considered the portfolio earnings of Manatee County’s neighboring counties for the same time period. Manatee County out-performed Sarasota and Charlotte Counties, Couch said, during what Couch referred to as an "unprecedented year."

"When the FED raised rates seven timesÉ that was a huge impact on the market. To have earned what the county earned last year was well done by the county clerk and her staff," said Couch.

Also presented to commissioners on Tuesday was a draft of proposed investment policy updates for review and potential future adoption. Colonneso explained to commissioners that the draft was something she began working on roughly two years ago with the county’s financial investor for bonds, and later after Deep Blue was hired, its consultation was given to the draft. According to Colonneso, the proposed policy updates had been presented to the prior county administrator but had never made it onto an agenda. In the interim, the board's previously adopted policy remained in effect.

Another proposal by Colonneso during the work session was that the board consider the creation of an investment oversight committee. The potential future committee would be composed of the county clerk, clerk's staff, one member of the board of county commissioners, and a representative from the county’s investment advisory firm. The committee would be established to do annual reviews of the investment policy and recommend changes–when needed. Colonneso said the creation of such a committee would help to ensure investment strategies remained up to date through the assessment of quarterly and annual reports, and investment results.

Commission Chair Kevin Van Ostenbridge gave comments after the presentation on Tuesday, saying that there had been past failures of communication between the clerk’s office and commissioners. Van Ostenbridge stated that it was his understanding that Colonesso hired Deep Blue in response to his criticisms over what he referred to as a "seven-figure loss" back in May of 2022. The reference was presumably to allegations that Van Ostenbridge levied at the clerk’s office back in May in response toColonneso having expressed to the board her significant concerns about some of the actions of the county's former administrator, Scott Hopes.

In May, Colonneso responded to Van Ostenbridge's letter with a follow-up letter, attempting to clarify the nature of the temporary losses and the actions and decisions of the clerk's office in response.

During Tuesday's meeting, Colonneso responded to Van Ostenbridge's comments by providing some of the considerations of her office in its decision to hire Deep Blue. One consideration, explained Colonneso, was to make sure hiring a firm would not "dig into" any returns from investments.

"Our portfolio grew exponentially over time," Colonneso described, adding that despite unprecedented economic conditions and interest rates, the county’s portfolio has maintained at more than a billion dollars for over a year.

"When we saw that the rates in one particular fund were going down, and were projected to keep going down, we moved it. I asked Deep Blue to analyze it, because you don’t keep something in a losing proposition," Colonneso stated. She added that considerations were made about how and where to move the investment, citing having identified the Day to Day Fund and its upward projection as a viable option.

"It is not a loss until you get to the end of your portfolio, we did not have a losing portfolio," Colonneso clarified, detailing that $5 million dollars was saved by making the move and that those funds went on to earn $2 million dollars–including $1 million in the last six months of the year.

Colonneso also told the board on Tuesday that she has requested that Deep Blue develop a monthly economic and portfolio update which will be produced for commissioners and the public. The goal, as explained by Couch, is to have the monthly updates posted publicly on the clerk's website. Couch anticipates that these regular investment updates will begin posting to the clerk's website next month in March.

To access the PowerPoint presentation and portfolio update Deep Blue Investment Advisors prepared for the board, click here. To replay Tuesday's meeting discussion on this topic, click the video below.


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