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HomeMy WebLinkAbout2008 09 17 Document Given By Mark W. Bloss, Federated Investors, Inc.Date: September 17, 2008 THE FOLLOWING DOCUMENT WAS GIVEN TO THE BOARD MEMBERS BY MARK W. BLOSS FROM FEDERATED INVESTORS, INC. i Exclusive presentation to the City of Winter Springs, Florida. Federated Investment Counseling. 2008 ©Federated Investors, Inc. 08-28353 (9108) Federated Mark W. Bloss Participant Consultant Federated Investors: Institutional Investment Manager • $333 billion under management — our entire revenue base • 53-year history S&P 500 firm; publicly traded on NYSE Headquartered in Pittsburgh, offices in: Boston, New York, Frankfurt, Dublin, London Strong Florida presence - Manage $6 billion for Florida clients - Own $1.4 billion in Florida debt As of 6130108. 1 Federated Investors: Partner in Public Money Management • Manage public sector money in all 50 states • Service 3,500 public entities directly • Manage nation's largest LGIP relationship • Proven track record in LGIP management - Results - Growth - Satisfied participants `A Federated Liquidity Management Product Excellence More than $333 billion in Total Assets Under Management, including Separate Accounts and Offshore Products • 147 mutual funds and separately managed accounts • $37 billion in Equity Assets ■ $25 billion in Fixed Income Assets • $271 billion in Money Market Assets • 55 Money Market Portfolios 29 Taxable 6 Tax-free National • 16 State -specific Gover 22 AAAm portfolios ($165 billion)Mone4 Prime Money Market $93.0 $37.3 As of 6130108. Separately managed accounts available through Federated Investment Counseling, a registered investment advisor. Tax -Free Money Market $32.6 Ked Income $25.1 3 Portfolio Considerations • Applicable statutory constraints • SBA of Florida Investment Policy • Rule 2a-7 • S&P AAAm Rating Investment Analysis 5 Experienced Money Market Analysts Legal Counsel Rule 2a-7 Expertise Portfolio Management Deborah A. Cunningham, CFA ♦� Paige M. Wilhelm Susan R. Hill, CFA Joseph M. Natoli Trading 4 Securities Desk Traders 4 Cash Desk Traders Bank Credit and Corporate Credit Committees Investment Strategy • Committees chaired by Senior Vice President of Investment Research • Voting members include portfolio managers, senior analyst and dedicated team of money market investment analysts Stringent Credit Review Process • Each issuer must Key decision factors have at least two include: NRSRO ratings • Financial analysis • Quantitative and • Industry conferences, qualitative analysis publications • Rating scale of "1" through "5" with credit ranked as "1" being most favorable • Wall Street and other third party information • Due diligence meetings • Relative value analysis • Compliance with Rule 2a-7 and other SBA of Florida provisions • Average duration of 20-60 days 2 Portfolio Compliance Average Maturities Diversification Rules Investment Policy FedPorts Custodian Trading J a Portfolio Parameters Rating Agency Compliance SBA of Florida Federated Investors: 35-Year Platinum Cash Legacy • Strong people, process and systems * Internal analysis by veterans; proprietary systems » Optimize results within Rule 2a-7, statutory constraints, and policy guidelines - Never broken $1.00* - Never infused capital to make a fund whole - Never owned a defaulted security in any taxable money market portfolio INNOVATION • CONSERVATIVE BIAS • THOUGHT LEADERSHIP *Although Federated monev market,funds have never broken the $1.00 stated price, there is no guarantee that such price stability will be achieved in the future. A LGIP A and B Update Current portfolio configuration allows for increased liquidity ceiling Ceiling raised from 37% to 50% of original Pool A balances; $12 million Expecting full liquidity at year end, 75% this fall We have examined and continue to examine and evaluate credits in both LGIPs on a daily basis Positive response from LGIP participants Portfolio Construction LGIP A managed in compliance with investment guidelines, Rule 2a-7 and S&P AAA rating criteria - Dollar -weighted average maturity not greater than 60 days - Final maturity of an individual security not greater than 397 days - 5% individual issuer limit - 10% limit on illiquid securities/"limited liquidity securities" - At least 50% of the LGIP's securities must be rated Al+; remainder invested in Al only - Weekly reporting to Standard & Poor's - No derivatives s$] Portfolio Construction 4 LGIP B - Daily assessment of liquidity - Daily assessment of market value of all securities - All cash invested in overnight securities only - Countrywide maturity: $200 million moved to LGIP A on 3/17/08 - WAMU maturity: $90 million moved to LGIP A on 4/18/08 - CIT maturity: $290 million moved to LGIP A on 6/18/08 - Countrywide maturity: $150 million moved to LGIP A on 6/25/08 - KKR restructuring complete; new names • Florida East Funding Florida West Funding - Issuer entity (OTTIMO) - AXON 11 Legislation Review Offer participants unprecedented protections Positions Pool to set a new standard through: - superior governance - quality investment management - frequent reporting 12 Benefits of Investing in the Florida LGIP = Managed by one of the largest managers of short-term investment products Now run under tighter constraints/AAAm rated by Standard & Poors • 100% liquidity on all new money invested • New legislation enacted to provide safeguards for participants • Attractive yield versus other short-term alternatives 13 Disclosure Standard & Poor's: AAAm rating by Standard & Poor's is obtained after S&P evaluates a number of factors, including credit quality, market price exposure and management. This rating, however, is subject to change, and does not remove market risk. An investment in the security is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the issuer seeks to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in the security. Past performance is no guarantee of future results. 14 APPENDIX 15 Local Government Investment Pool - Fund A Holdings Report Data as of September 11, 2008 Securih Name Security Classification CUSIP Cpo/Dis Maturity Rate Reset Par Current Amort C'osl''' )lkt N alue Field American Express Centuri, 9/17/2008 VARIABLE RATE BANK NOTE 02581 FYFO 2.72 9/17/2008 9/17/2008 $ 45,000,000 2,50 $ 45.000,000 $ 44.998,650 XWerfamwin General 1i'nance, Series J, 9/18/2008 VARIABLE MEDIUM TERM NOTE 02635PTN3 3.06 9/18/2008 9/18/2008 $ 215,000,000 3.11 $ 215,000,000 $ 214,971,190 Bank of America Triparty Repo Overnight Fixed REPO TRIPARTY OVERNIGHT FIXED 070994009 2.10 9/12/2008 $ 960,000.000 2.13 $ 960,000.000 $ 960,000,000 Bear Steams Cos., Inc., Dec 14, 2008 VARIABLE RATE TERM NOTE 073902ND6 2.60 12/14/2008 9/15/2008 $ 250,000,000 2.64 $ 250,000,000 $ 249,908,750 Bear Steams Cos., Inc., Dec 15, 2008 VARIABLE RATE TERM NOTE 073902JJ8 2.63 12/15/2008 9/15/2008 $ 278.000,000 2.51 $ 277,987,312 $ 277,917.990 Caterpillar Financial Services Corporation, Jan 08, 2009 VARIABLE RATE TERM NOTE 14912L3O2 2.46 1/8/2009 10/8/2008 $ 50,000,000, 2.49 $ 50,000,000 $ 49,941,200 Dreyfus Government Cash Management Fund OVNMF OVERNIGHT MUTUAL FUND 2.13 9/12/2008 $ 7,448,005 2 17 $ 7,448,005 $ 7,448.005 Florida Hurricane Catastrophe Fund Finance Corp., Dec 12, 2008 VARIABLE RATE TERM NOTE 34074GAZ7 2.68 i2/2008 9/15/2008 $ 452,500,000 2.71 $ 452,488,283 $ 452,500,000 Genworth Global Funding Trust 2006-F, Sep 15, 2008 VARIABLE RATE TERM NOTE 37247XAM4 2,45 9/15/2008 9/15/2008 $ 290,000,000 2,48 $ 290,000,000 $ 289,906,620 HSBC Finance Corp., Oct 06, 2008 VARIABLE RATE TERM NOTE 40429CDW9 2.50 10/6/2008 10/6/2008 $ 150,000,000 2.53 $ 150,000,000 $ 149,969,100 HSBC Finance Corp., Sep 24, 2008 VARIABLE RATE TERM NOTE 40429CBJ0 253 9/24/2008 9/24/2008 $ 280.000.000 2.56 $ 280,000.407 $ 279.989.360 Hartford Life Global Fur 'Trust, Sep 15, 2008 VARIABLE RATE TERM NOTE 41659EDF1 2.49 9/15/2008 9/15/2008 $ 100,000,000 2.53 $ 100,000,000 $ 100,000,000 Marshall & Ilsley Bank, Milwaukee, Sep 25, 2008 VARIABLE RATE BANK NOTE 55259AEY1 2.46 9/25/2008 9/25/2008 $ 130,000,000 2,48 $ 130,000.000 $ 129.966.590 Merri h & Co., Inc., Dec 12, 2008 VARIABLE RATE TERM NOTE 5901882R8 2.47 12/12/2008 9/15/2008 $ 100,000,000 2.50 $ 100,000,000 $ 99,395.700 Merrill Lynch & Co., Inc., Dec 17, 2008 VARIABLE RATE TERM NOTE 59022CAZ6 2,61 12/17/2008 9/19/2008 $ 250.000,000 2.65 $ 250,000,000 $ 248,377,000 & Co., Inc., Dec 23, 2008 VARIABLE RATE TERM NOTE 5901885K0 2.61 12/23/2008 9/25/2008 $ 190,000,000 2.65 $ 190,000,000 $ 188,690,330 Merrill Lynch Government Securities Repo Triparty Overnight Fixed REPO TRIPARTY OVERNIGHT FIXED 590997003 2.11 9/12/2008 $ 350,000,000 2.14 $ 350,000,000 $ 350,000,000 Morgan Stanley & Co., Inc. Triparty Repo Overr.Wk d REPO TRIPARTY OVERNIGHT FIXED 617470000 2.12 9/12/2008 $ 1,625,000,000 2.15 $ 1,625,000,000 $ 1,625,000,000 Morgan Stanley, Dec 03, 2008 VARIABLE RATE TERM NOTE 617446UJ6 264 12/3/2008 10/3/2008 $ 321,750.000 2.51 $ 321,741,665 $ 320,750,966 Morgan Stanley, Dec 15, 2008®_ VARIABLE RATE TERM NOTE 617446PL7 2.59 12/15/2008 9/15/2008 $ 263,750,000 2.63 $ 263,748,867 $ 262,855,888 National Rural Utilities Cooperative Finance Corp., Oct01, 2008 VARIABLE RATE TERM NOTE 637432DW2 2,50 10/1/2008 10/1/2008 $ 211,000,000 2.51 $ 211,000,000 $ 210.935.434 National Rural Utilities Cooperative Fnance Corp., Oct 04, 2008 VARIABLE RATE TERM NOTE 637432GC3 2.50 10/4/2008 10/4/2008 $ 210,000,000 2.50 $ 210,000,000 $ 209,969,550 Southern Co , Sep 19, 2008 VARIABLE RATE TERM NOTE 842587AH0 2.81 9/19/2008 9/19/2008 $ 95.000,000 2.85 $ 95,000,000 $ 94,994,965 Wells Fargo & Co., Jan 16, 2009 VARIABLE RATE TERM NOTE 9497413CE8 2.43 1/16/2009 9/18/2008 $ 95,000,000 2.46 $ 95,000,000 $ 94,770,290 $ 6.919,448,005 $ 6.919,414,539 $ 6.913,257,578 (1) Market values of the portfolio securities are provided by the Custodian and the Manager has no responsibility for the accuracy thereof. The Manager acknowledges that it is the source for other data contained herein. (2) Amortized cost is calculated using a straight-line method. Note: The data included in this report is unaudited. Local Government Investment Pool - Fund A Summary Report Data as of September 11, 2008 Top Holdings(excluding Repurchase Agreements) Morgan Stanley 8.5 Merrill Lynch & Co., Inc. 7.8 Bear Steams Cos., Inc. 7.6 Florida Hurricane Catastrophe Fund Finance Corp. 6.5 HSBC Holdings PLC 6.2 National Rural Utilities Cooperative Finance Corp. 6.1 Genwonh Financial, Inc. 4.2 American International Group, Inc. 3.1 Marshall & Ilsley Corp. 1.9 Hartford Financial Services Group, Inc. 1.4 Total % of Portfolio: 53.4 S&P Credit Quality Composltion(at least 50 % A-1+) A-1 + 69.9 A-1 30.1 Total %of Portfolio: 100.0 Local Government Investment Pool - A Final M., Ily Profile A. of September 11. 1008 rw na, sr.om --------' ------- ----------------------so---------------------------------------- ----.......--------------......------------_..._........-----------------------........-------......- !-- war. IjM.we --------------_..............---------------------............................ i".."d wo+n ------------------- ..------- ----------------------------- 0n es se.000 ----- .............. _...._.... _.. ------ ....................... A e'6 ._..........._............ so 0.p9 2 1 q Doss Selz 2008 U« •UUB Nov ].OB net ]wB Jan ]OW raw away a etautr ewaw�.r n.caxxa •rc me,aoxmypomo. dr«.r mon�,nM. Portfolio Composition ■Asset Backed Commercial Paper - Fixed ■Ansel Backed Commercial Paper - Floating GBank Instrument - Fixed ■ Bank Instrument - Floating ■Corporal. CP - Fixed ■Corporate CP - Floating ■ Corporate Notes - Floating ■ Mutual Funds - Money Markel ■Repo Portfolio Composition Asset Backed Commercial Paper - Fixed 0.0 Asset Backed Commercial Paper - Floating 0.0 Bank Instrument - Fixed 0.0 Bank Instrument - Floating 2.5 Corporate CP - Fixed 0.0 Corporate CP - Floating 0.0 Corporate Notes - Floating 54.9 Mutual Funds - Money Market 0.1 Repo 42A Total %of Portfolio: 100.0 Effective Average Maturity(can't exceed 60 days) 9.6 Days Effective Maturity Schedule Eff Final 1-7 days 72.7 51.9 8-30 days 23.7 15.6 31-90 days 0.0 4.6 91-180 days 3.6 27.9 181+days 0.0 0.0 Total % of Portfolio: 100.0 100.0 Illiquid Securlties(can't exceed 10 %) 0.00% Portfolio holdings are shown as of the date indicated. Since market conditions fluctuate suddenly and frequently, the portfolio holdings may change and this list is not indicative of future portfolio composition. These portfolio holdings are not intended to be and do not constitute recommendations that others buy, sell, or hold any of the securities listed. Past a finance is no uarantee of future results An explanation of the significance of such ratings may be obtained from the companies furnishing the ratings. The ratings reflect only the view of such organizations at the time such ratings were given and Federated does not make any representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by said rating companies, if in the judgment of said rating companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price on the Investments. Note: The data included in this report is unaudited. Local Government Investment Pool - Fund B Holdings Report Data as of September 11, 2008 Security Name Tye P CUSIP C n/Dis P Maturity Rate Reset Par Current Amort Cost is Mkt Value u. Yield Axon Financial Funding LLC, Dec 31, 2008 VARIABLE RATE COMMERCIAL PAPER 05462NAD1 2A7 12/31/2008 9/25/2008 $ 175,000,000 2.51 $ 174,998,009 $ 99,750,000 Dreyfus Government Cash Management Fund OVNMF OVERNIGHT MUTUAL FUND 2.13 9/12/2008 $ 106,678 2.17 $ 106,678 $ 106,678 Florida East Funding LLC, Mar 25, 2010 VARIABLE RATE TERM NOTE 999A50568 2.82 3/25/2010 9/28/2008 $ 145,210,088 2.86 $ 145,210,088 $ 119,139,605 Florida West Funding LLC, Mar 25, 2010 VARIABLE RATE TERM NOTE 999A50576 2.82 3/25/2010 9/28/2008 $ 304,073,035 2.86 $ 304,073,035 $ 223,068,863 Issuer Entity LLC (Ottimo), Dec 31, 2049 VARIABLE RATE COMMERCIAL PAPER 999A49941 2.16 12/31/2049 3/25/2008 $ 163,076,255 3.35 $ 163,076,255 $ 75.476,539 $ 787,466,056 $ 787,464,064 $ 517,541,685 (1) Market values of the portfolio securities are provided by the Custodian and the Manager has no responsibility for the accuracy thereof. The Manager acknowledges that it is the source for other data contained herein. (2) Amortized cost is calculated using a straight-line method. Note: The data included in this report is unaudited. Local Government Investment Pool - Fund B Summary Report Data as of September 11, 2008 Top Holdings(excluding Repurchase Agreements) Florida West Funding LLC 38.6 Axon Financial Funding LLC 22.2 Issuer Entity LLC (Ottimo) 20.7 Florida East Funding LLC 18.4 Dreyfus Government Cash Management Fund 0.0 Total % of Portfolio: 100.0 S&P Credit Quality Composition A-1 + 0.0 A-1 0.0 Other 100.0 Total % of Portfolio: 100.0 Current Actions at a Glance AXON: Not receiving principal and interest Florida East and West: restructured from KKR and receiving principal and interest. Otfimo: Receiving principal and interest Portfolio Composition ■Asset Backed Commercial Paper- Fixed ■Asset Backed Commercial Paper - Floating GBank Instrument - Fixed O Bank Instrument - Floating ■Corporals CP - Fixed ■ Corporate CP - Floating ■Corporate Notes - Floating ■Mutual Funds - Money Markel ■Repo Portfolio Composition Asset Backed Commercial Paper - Fixed 0.0 Asset Backed Commercial Paper- Floating 0.0 Bank Instrument - Fixed 0.0 Bank Instrument - Floating 0.0 Corporate CP - Fixed 20.7 Corporate CP - Floating 22.2 Corporate Notes - Floating 57.1 Mutual Funds - Money Markel 0.0 Repo 0.0 Total % of Portfolio: 100.0 Effective Average Maturity 3468.3 Days Effective Maturity Schedule Eff Final 1-7 days 0.0 0.0 8-30 days 0.0 0.0 31-90 days 0.0 0.0 91-180 days 22.2 22.2 181+days 77.8 77.8 Total % of Portfolio: 100.0 100.0 Illiquid Securities(can't exceed 10 %) 0.00% Portfolio holdings are shown as of the date indicated. Since market conditions fluctuate suddenly and frequently, the portfolio holdings may change and this list is not indicative of future portfolio composition. These portfolio holdings are not intended to be and do not constitute recommendations that others buy, sell, or hold any of the securities listed. Past performance is no guarantee of future results. An explanation of the significance of such ratings may be obtained from the companies furnishing the ratings. The ratings reflect only the view of such organizations at the time such ratings were given and Federated does not make any representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by said rating companies, if in the judgment of said rating companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price on the Investments. Note: The data included in this report is unaudited. Review of 2008 Legislative Changes The Florida Legislature passed several bills affecting the Local Government Investment Pool during its 2008 session. In addition to offering fund participants unprecedented protections and positions, the legislation sets a new standard for superior governance, quality investment management, and thorough, frequent reporting for the Local Government Investment Pool. The SBA and Federated are working towards full implementation of the legislative requirements. The new Investment Policy Guidelines effective July 1, 2008 for the LGIP and Fund B will incorporate all of the 2008 legislative changes The Local Government Surplus Funds Trust Fund previously identified as LGIP A/Fund A/Pool A from December 2007 through June 2008 will collectively be referred to as the LGIP. House Bill 7097 created the Fund B Surplus Funds Trust Fund previously known as LGIP B from December 2007 through June 2008. These names will be utilized in all future documents and throughout the SBA website. Collectively, each line item of the new legislation adds up to a potent mix of protections for participants. The following table is a review of the key legislative points and their benefits to participants: KEY LEGISLATIVE PARTICIPANT BENEFITS POINTS SENATE BILL 2422 A Clarified Investment A Formalized Approach to Risk Management Objective in Plain English New language: The primary objective, in priority order, of investment activities shall be: • Safety • Liquidity • Competitive returns with minimization of risks Annual Best -Practice Dedication to Best Practices and Trustee Sign -off Certification Trustees shall annually certify to the Joint Legislative Auditing Committee that they have conducted a review of the trust fund and determined that the management of the trust fund is in accord with best investment practices and that that the trust fund is in full compliance with the certification requirements. Mandatory Enrollment Clear Up -front Communication Materials Prior to enrollment, potential participants must be provided a fund profile containing impartial educational information describing the administration and investment management of the fund, including (but not limited to): rights and conditions of participation; investment policy; historical performance; holdings information; administrative rules; any fees, charges, or deductions that apply; recently published financial statements; and a disclosure statement for signature by the appropriate local government official. Mandatory Signed Participants Acknowledge Receipt and Understanding of Disclosure Statement Enrollment Materials and Give Authority to Invest Upon review of enrollment materials, the appropriate officer of each local government entity will determine appropriateness of investment in the pool and will provide a Resolution and a signed acceptance of the disclosure statement. This type of requirement is customarily required by other money market vehicles. Implementing a disclosure requirement for the participant encourages pool to address the terms of investing up front and to question any points that are unclear. Written Investment Policy Best Practices - Fiduciary Standards Funds will be invested in accordance with a written investment policy that will be updated annually to conform to best investment practices. The policy will be reviewed and approved as needed or annually by the Trustees, Investment Advisory Council and the Local Government Investment Pool Advisory Council. Adherence to fiduciary standards will be expected in managing the overall portfolio. Any portfolio deviations from initial expectations will be reported through a formal escalation process. Ethics Commitment Best Practices — Ethics Officers, employees and investment professionals shall: • Refrain from any personal business activity that could conflict with proper execution of the investment program ■ Fully disclose any personal financial or investment positions that could be related to the performance of the investment portfolio; and, disclose any material interests in financial institutions with which they conduct business on behalf of the fund. ■ Refrain from undertaking personal investment transactions with individuals with whom business is conducted on behalf of the board Affirmative Disclosure; Transparency in Disclosure and Escalation Procedures that Internal Controls Facilitate Prompt Resolution of Issues The Board and the money management firm must immediately disclose any material impact to the fund to participants. Internal controls will be established by the Board and documented in writing. These controls will include formal escalation procedures for all employees to follow. The intent is to protect participants from losses that could result from fraud, employee error, misrepresentation by third parties, unanticipated market changes, or imprudent actions by any employees or officers of the Board or money manager. Reserve Fund Permissible A Provision for a Reserve Fund with Strong Controls with Limitations A reserve fund may be established to protect the fund; however, any reserve must be a portion of the management fee and must be fully disclosed in the enrollment materials. In addition, any change in the amount to be charged for a reserve must be announced with a reasonable notice period to allow any participant to withdraw from the fund prior to the new charge being imposed. Pro-Rata Gain Sharing; Best Practices - Gain Sharing and Penalties Penalties All participants share pro rata in the capital gain, income, or losses of the fund's investments. Any provisions for penalties will be fully disclosed in the enrollment materials. In addition, any change in the amount to be charged for a penalty must have a reasonable notice period to allow any participant to withdraw from the fund prior to the new penalty charge taking effect. Comprehensive, Frequent Best Practices in Reporting and Full Accountability for Reporting Disclosure The board is required to provide a monthly report (or upon the occurrence of a material event) of any material impacts on the fund and any actions taken as well as an analysis of the current investment portfolio and the transactions executed over the past month. The Trustees will provide a quarterly report to the Joint Legislative Auditing Committee stating that they have reviewed and approved the monthly reports. Market Valuation Transparency in Reporting Market Valuation The market value of the portfolio will be calculated daily and withdrawals from the trust fund will be based on a process that is transparent to participants. Participants can access market value and amortized cost information at anytime via the Pool website. Additional reporting will be made available to pool participants through regular and frequent ongoing communication. Interest; Limitations on Strong Controls on the Use of Interest Uses Costs, expressed through the stated expenses of the fund, are deducted from interest earnings and prorated among the participants' accounts as has always been the practice. Additional protections state that the board or money manager may not transfer the interest or use the interest for any other purpose, including making up investment losses. Withdrawals; Limitations Defined Courses of Action on Managing Material Events that Impact Liquidity In the occurrence of an event that has a material impact on liquidity or operation of the fund, the executive director may, in good faith, for 48 hours, limit contributions to or withdrawals from the fund to ensure that the board can invest moneys within its fiduciary responsibility. Such action must be fully and immediately disclosed to participants and all parties involved. The Trustees would be required to convene an emergency meeting to review the situation and could vote to continue the measures for up to an additional 15 days. In no case may the time limit set by the Trustees exceed 15 days., Annual Financial Audit Best Practices — Audit The Auditor General will conduct an annual financial audit of the fund, inclusive of testing for compliance with investment policy. Upon completion, but no later than 30 days following the audit, the Trustees will report to the Joint Legislative Auditing Committee, indicating that they have reviewed the audit and certifying that any necessary items are being addressed by a corrective action plan with target completion dates. Participant Advisory Participant Representation Council A six -member Participant Local Government Advisory Council will be created to regularly review the administration of the trust fund and make recommendations to the Trustees. These members will be appointed by the board and subject to confirmation by the Senate. Members will serve a 4-year term HOUSE BILL 7097 Special Provisions Clearly Stated Path of Action for Fund B and Separation of Governing the Fund B Fund B into its own legal trust fund Surplus Funds T.F., a.k.a. The purpose of Fund B Surplus Funds Trust Fund is to maximize LGIP B the payout of principal with the ultimate goal of self-liquidating the trust fund through maturity and payout of the investments. Any new investments must be made in money market or equivalent funds. After the trust fund self -liquidates, any remaining reserve may be transferred by the Trustees at their sole discretion back to the trust fund from which the assets were originally separated.