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Consent-General Government # 13.
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| Board of Supervisors |
Financial Services |
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| Subject |
| Receive and file annual report on the de-allocation of securitized Tobacco funds and the status of Pomona and Demeter funds for fiscal year 2015-16. (No general fund impact) (Newens) |
| Recommended Action |
| Receive and file the Department of Financial Services' annual report on the de-allocation of securitized Tobacco funds and the status of the Pomona and Demeter funds for fiscal year 2015-16. |
| Strategic Plan Goal(s) |
Operational Excellence
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| Reason for Recommended Action/Background |
In 2002 Yolo County participated in the Pooled Tobacco Securitization Program administered by the California Statewide Financing Authority (the Authority). In accordance with U. S. Treasury regulations, all investments held in connection with the bonds are restricted by the universal cap, which essentially requires that the value of investments equals at least the value of outstanding bonds. After each semi-annual debt service payment (May and November) the bonds and investment holdings are revalued and any excess of investment value over bond value is de-allocated, that is, released back to the county for unrestricted use. In 2003 the Board of Supervisors approved an investment strategy for tobacco settlement receipts securitized in 2002 and directed the Auditor-Controller to make an annual report on the status of the endowment fund (Demeter) and annuity fund (Pomona) and recommend necessary adjustments to the investment strategy.
In 2013, upon the Department of Financial Services' (formerly Auditor Controller) recommendation, based on revised long-term projections for the funds, the Board adjusted the investment strategy and the distribution of de-allocated funds. In brief, the adjusted strategy called for annual transfers of $300,000 of de-allocated monies to the Pomona Fund and make $330,000 available from Pomona for appropriations to fund various programs as determined by the Board. The balance of de-allocated monies is directed toward the continued buildup of the Demeter Fund so that it can generate a perpetual annuity of $400,000 from the year 2023.
Deallocations in the past few years have been below the estimates projected by Public Financial Management, the County's outside investment advisor, in their calculations. These will be reviewed and updated in this fiscal year.
A financial summary of transactions for the Pomona Fund and Demeter Fund for fiscal year 2015-16 is presented in Att. A - Report on Tobacco Funds. |
| Collaborations (including Board advisory groups and external partner agencies) |
| None. Information in the report including balances and activity are generated from the accounting records |
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| Fiscal Impact |
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| Source of Funds for this Expenditure |
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