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
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pares Its
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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
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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