Loading...
HomeMy WebLinkAbout2007 12 07 Documents Provided to the City Commission Date: December 7, 2007 These documents were provided to the City Commission during the December 7, 2007 City Commission Special Meeting. First morning update on the newly reopened LGIP We were delighted to reopen the LGIP today. As expected, we saw heavy redemptions in order to satisfy the pent up need of last week. This level of redemptions was very much in line with our expectations. We are pleased that we also saw some subscriptions and expect to see further subscriptions over the coming days. If you can make a subscription - we urge you to support the fund by doing so. Remember that subscriptions are entirely free of the withdrawal limits we have established. We believe this morning has been a very positive step in restoring the LGIP and thank you again for working with this. We will periodically publish further updates to make sure you are informed. Please see below a note from the trustees. From the Trustees Governor Charlie Crist, Attorney General Bill McCollum and Chief Financial Officer Alex Sink were pleased to see the Local Government Investment Pool reopen on schedule this morning, and offered the following statement: "In conversations with numerous local government investors, we were very encouraged by the level of support we heard and the expressed commitment of many investors to ensure the success of the reopening of the LGIP. Many investors have told us how useful this fund has been to their operations over its 25-year history. In particular, we hope to see former participants help out by reentering the fund. Remember that all new subscriptions are fully available for withdrawal under this plan." "We will be getting an update on the fund's progress from the SBA later today and hope to see progress in getting the LGIP back on the proper footing. A special thanks to all the investors for their patience during this very unusual time in the capital markets." Citizens . pares Its . . securItIes . .~.....': .. j i i' ,~I ~ I exposure By MICHAEL QUINT BLOOMBERG NEWS Citizens Property Insurance Corp. was paring its holdings of asset -backed commercial paper by about 70 percent .e~~n as it pulled about $1 billion from a state-run investment pool. Sharon Binnun, chief finan- cial officer of Citizens, said that "over the last couple months" she had told the State Board of Administration to reduce the $304 billion it had invested in ass~t-backed comm~rcial pa- per on behalf of the state- backed insurer of last resort. The insurer's asset-backed commercial-paper holdings are now down to about $900 mil- lion, Binnun said earlier this week at a meeting of the in- surer's finance and investment committee. "We are actively working with them," she said. . . As the asset-backed com- mercial paper matures;it is be- ing reinvestediha money-mar- ket mutual fund run by other. managers. Still,. Citizens - the largest provider..of homeown- ers insurance in Florida -may wind up selling some of its commercial"paperat less than par, or for somethihg less than 100 cents on the dollar, she said. "We face the very real pros- pect of losing some princip~," agreed Bruce Douglas, the fi- surer's chairman. The state board manages about $7 billion of Citizens' $10 billion of assets. On Oct. 30, the insurance company reduced its investment in the state-run lo- cal Government Investment Pool from $2.9 billion to $1.9 billion, as it tried to keep its share of that pool at no more than 10 percent. That limit was intended to protect the pool from a sudden withdrawal if Citizens needed the money to .~ C2 Orlando Sentinel Citizens pares its securities exposure INSURANCE FROM Cl I ) i J :f :i f , I I pay claims after a hurricane. Word that some of the local- government fund's asset- backed commercial paper had. been downgraded by rating agencies prompted a run on the fund by local governments last month, dropping its bal- ance from $26 billion on Nov. 1 to $14 billion last week. Investment losses don't pose much of a threat to Citizens, which generates about $200 million of cash per month above what it needs to pay ex- penses, including interest on its debt, said John Forney, fi- nancial adviser to Citizens ano a managing director at Ray- mond James Financial Inc., based in St. Petersburg. The insurer also has the backing of special state assess- ment funds should it run short of cash after a hurricane. Forney said the investments "confounded the intent of the very conservative investment policy that Citizens has." Those guidelines didn't refer to asset-backed commercial paper, which allowed the state- run fund to bufpaper that car- ried the highest rating. Much of the asset-backed commercial paper is backed by pools of mortgages, whose val- ue is now in doubt amid the housing slump and the melt- down of the subprime mort. gage market. Florida reopened the invest- ment pool briefly Thursday, a week after it was frozen. Local governments withdrew more than $ 1.1 billion, but Citizens - the largest investor in the . fund - did not remove any money. The fund will be accessible again today to towns, counties, school boards and other gov- . ernmeut investors. )lans to buy 56 of the rs that connect to in- lputers, but can be e car on a long cord r departments, such :ounty Sheriff's Of- ortable scanners but ~d them in all patrol lsaid. :tudent was drunk ,.ay Patrol troopers y of Central Florida toxicated Thursday d into the back of an 1ge County Sheriff's Ondrejack, 20, of as approaching the )rpington Street and tOut 1:45 a.m. when lck of Deputy Chris- 'ehicle. s passenger, Deputy IUgherty, were not 'horn University of lfficials confirmed is rolled i:n the College dministration, told I had been drinking Iff University Boule- hQ was not injured, the Orange County hiving under the in- ,sessing more than ~rs license. r/ station to open rtment of Environ- ion Secretary Mi- l be in Oviedo today ydrogen energy sta- ld to start up in the )ast six months. s from Ford Motor nerica, Progress En- d the U.s. Depart- will join in the cere- a.m. at Jamestown 19 Station, 2801 W da was selected as es in the nation to ,llution-free hydro- eb, Denise-Marie Balona, Iher Shennan, Walter edidni of the Sentinel is report. Fast-food manager found tied up in car She had left a restaurant in Pasco to make a bank deposit and apparently was abducted, authorities say. By KATIE FRETLAND SENTINEL STAFF WRITER OCArA NATIONAL FC>REST Deputies in Lake and Pasco counties are investigating the abduction and assault of a 49-year-old McDonald's manager who was found bound and battered in her car. The New Port Richey woman told detectives a man took her on a har- rowing journey, forcing her to drive nearly 140 miles from the restaurant in Holiday to the wood line of the for- est near Astor, where he beat and cut her with a bladed weapon. The woman left the McDonald's on U.S. Highway 19 in Holiday about 7 a.m. Wednesday to make a deposit at a nearby bank. She got into her sil- ver 2006 Chevy Malibu, not knowing a man was hiding in the. back. seat, she told investigators. She had driven about two blocks when the man made his presence known. He held a bladed weapon to her neck and told her to keep driving. Meanwhile, employees at the res- taurant were becoming worried. They expected her to return by 8 a.m., and it was not like her to be late. Managers called the Pasco County Sheriff's Of- fice at 10:50 a.m. Detectives determined the woman's cell phone was near Lake County and called local deputies to be on the look- out for her vehicle. At 7:45 p.m., Lake Deputy Harold Howell saw the car parked in the wood line off State Road 19 north of Forest Road 595. They found the woman in the driver's seat. Her mouth was bound and she had cuts on her neck, accord- ing to a report. They did not release her name because of the possibility that she was sexually assaulted, Pasco Sheriff's spokesman Doug Tobin said. The woman told deputies the man attempted to cut her throat several times and told her he would leave her there to die. He then took the money from the bank drop before fleeing. The woman, who was treated at Florida Hospital Waterman in Ta- vares, described her attacker as a white male in his 20s with red hair and a red beard. She told detectives he is tall, weighing about 160 pounds, with a pock-marked complexion. He wore an orange sweat shirt, orange cotton gloves, darkjeans and tan work boots, she said. He also carried a backpack. Katie Fretland can be reached at 352-742-5934 or kfretland@orlandosentinel.com. Governments withdraw $1.2 billion from fund By AARON DESLATTE TALLAHASSEE BUREAU TAllAHASSEE - With the teller windows reopened, Florida cities, counties and school districts Thursday withdrew $1.2 billion from the battered state-run investment fund that was shut down last week to halt a $13 bil- lion run. The State Board of Administration announced that, by the 11 a.m. cutoff for transactions, $1.196 billion - nearly 10 percent of the money avail- able for withdrawal - had been taken out. Just over $7 million was deposited. Skittish officials called the less-than- maximum withdrawals a sign that state-ordered reforms, including hiring New York-based BlackRock Inc. to run the fund, have begun to restore the confidence of local governments, which use it as a money-market ac. countto eani interest on surplus cash. ''It's fantastic neWS. I was very, very pleased," Chief Financial Officer Alex Sink said. BlackRock's solution was to divide the fund in two - segregating ~ billion in shaky, mortgage-backed securities. 'ford that some of these securities had been downrated, and others were at risk, prompted withdrawals that saw the fund plunge from ~6 billion on Nov. 1 to $14 billion last week. BlackRock created a second fund holding $12 billion in top-rated securi- ties. Governments were allowed Thurs- day to pull out 15 percent of their in- vestments, or ~ million, whichever is greater, from that fund. Had everyone withdrawn their maxi- mum allotted amount, the fund would have lost about ~ billion. The fund closed business Thursday with a $10.8 billion balance. Many governments said they needed cash to pay operating expenses. But others withdrew the most they could, without paying a 2 percent penalty, just to get their mon.ey. ''We wanted to get as much out as we could," said William Collins, the Osce- ola County School District finance di~. rector, who pulled $9 million of the dis- trict's $59 million in the fund. "Until there's some guarantees, I don't see anybody putting any money back in," added Osceola School Board member Tom Greer. Wmter Garden took out ~ million of its $ 12.!;'million. "I would imagine most people are going to pull out what is per- mitted," said Brian Strobeck, the city's finance director. Michael McCauley, the SBA's senior corporate-governance officer, said the agency had no idea if the pent-up de- mand for cash - and security concerns - were satisfied, or if more big with- drawals were coming. "We expect more money coming into. the fund. Whether it will outweigh the withdrawals, we don't know," he said. Sink said she thought the worst was over "I would think that everybody who needed to withdraw, did it," she said. "I'm encouraged by this." The SBA has at least of ~.5 billionm . exposure to shaky, mortgage-backed investments spread throughout five pools it manages, including $756 rnJl- lion in the state pension fund, $571 mil- lion in a Citizens Property Insurance Corp. fund and $867 million in the lo- cal-government pool. Citizens, Florida's largest home in- surer, has $2 billion in the local-govern- ment pool and s~t tight on its money. Aaron Deslatte can be reached at 850-222-5564 . or ade~"tte@or1andosentineLcom. :t