Fiscal year 2023 was a record setting year for County investments. Aggregate cash interest revenue postings were $48.9 million over the 12-month period ending September 2023. That was an average of over $4.0 million a month added to the County coffers, or approximately equal to the tourist tax dollars collected by the County over the same period. Interest revenues are allocated across the County’s many governmental and enterprise funds based upon the average daily cash balance of each fund. Projected interest revenues are budgeted each year. The largest interest recipients for fiscal year 2023 were the Water and Sewer District, the Infrastructure Surtax Fund, the County’s General Fund and the Tourist Tax Funds.
Florida Statutes task the Clerk and Comptroller with the responsibility for the investment of County monies. To this end, the Board has adopted an investment policy that is utilized by the Clerk and Comptroller for the investment of taxpayer funds. The goals of the Collier County investment policy are safety, liquidity and yield, in that order. The investment policy enumerates, in detail, the types of investments, and respective percentages, in which the County can invest.
The investment function is performed in-house by the Clerk and Comptroller’s Office. Current holdings include United States Treasuries, federal agencies, corporate debt issuances and local government investment pools. In addition, the County’s depository bank offers a competitive overnight rate, and all County monies are invested and earn interest. Monies on deposit with the County’s bank are fully collateralized, with no Federal Deposit Insurance Corporation (FDIC) insurance limitations. Investment holdings are listed monthly on the Clerk’s website and reported quarterly to the Collier County Board of County Commissioners at a public meeting. Invested monies include ad valorem proceeds, sales and gas tax dollars, impact fees, tourist taxes and charges for services, such as Water and Sewer revenues. The average monthly balance invested for fiscal year 2023 was $2.0 billion dollars.
The record setting year was largely the result of 6 Federal Reserve rate hikes over the October 2022 to September 2023 timeframe. The resultant 2.25% increase directly impacted fixed income rates, particularly investments with a maturity of up to two (2) years. These increases created an inversion in the yield curve and allowed the Clerk and Comptroller’s office to take advantage by investing over $500.0 million on a short-term basis. Currently, short-term investments earn over 5.00% and are available for redemption on an overnight basis to pay capital and operating costs of the County.
The process of managing and investing County funds is continuous, as payment processing and revenue intake occurs daily. Cash forecasting is an essential tool for effective investment management, and it is relied upon to ensure investment terms are matched to cash needs. Forecasts predict both revenue intake and disbursements and are continually updated. Daily aggregate disbursements may exceed $40 million dollars on several business days throughout the fiscal year. In addition, subsequent to the 2018 adoption by the County of an infrastructure sales tax, payments for capital related programs have increased. Individual payments for construction projects such as roads, buildings and improvements routinely run into the millions of dollars.
The investment of County funds is an important function of the Office of the Clerk and Comptroller and a prime example of one of the Clerk’s duties in upholding the public’s trust.