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Mandated Waste
Mandated Waste
Host
Joshua Black
Description
Government Overreach Hinders Progress in Our City
Listen
Transcript
Welcome to the 9th edition of the Saint Petersburg Florida Area News podcast for the year 2019. I’m your host, Joshua Black, and this episode will cover the City Council committee meetings held on February 28th. This episode is a bit more detailed than most previous episodes, but there is a good reason for that.
But first, we must pause, because Councilmember Lisa Wheeler Bowman had a death in her family last week and thus has been absent for the last two meetings. Please keep her in your prayers.
The first committee of the day was the Budget, Finance, and Taxation Committee (also known as BF&T). Council received a quarterly financial report from Anne Fritz.
As she gave her report about city investments, Charlie Gerdes (council chair, but committee vice chair) asked what legal issues might arise if the city invested some of the monies tied up in bonds to make loans to local businesses who couldn’t get loans elsewhere. His reasoning is that the city could probably get the same rate of return on the investment as they were getting from the bonds. He might be right, but it isn’t his money. Sad how willing he is to risk other people’s money, especially after forcing them to pay it into city coffers in the first place. City Council’s attorney told him that it’s probably illegal to do it, anyway.
As she continued her report, Anne made the claim that the city’s investment strategy is to buy stable investments for the most part (21% of the portfolio is US Treasury Bonds, so your taxes are funding federal deficit spending, too), staying away from investments rated BBB or lower, by general policy. When Ed Montanari (council vice chair, but chair of this committee) pointed out that a recent investment in AT&T was rated BBB instead of BBB+, she explained that the downgrade happened after the purchase by the city and was only for a 1 year term, versus the 5 year or longer terms generally sought.
When Gerdes asked about the dire predictions for the market, Anne said that the types of investments the city holds are generally the kind of investments that investors seek in a bad market. Thus, the city expects to have its holdings increase in value during a recession, should it hit. Gerdes also asked about liquidity. Anne responded that the city investment team timed the maturity of some bonds and other investment certificates to coincide with expected increases in city expenditures.
On page 64 of the pdf for the council committee report (link is here, but make sure you view it instead of download, unless you have 262 pages worth of space on your device: http://www.stpete.org/committee%20packets/Budget%20Finance%20and%20Taxation%20Committee/2019-02-28%20BFT%20Agenda.pdf), Anne showed that the pension funds for the city’s employees are generally solvent, with the Fire Department having the best position overall, followed by most other employees, and then by the police.
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By St. Petersburg, FL Area News | Reconstructionist Radio Reformed Podcast NetworkMandated Waste
Host
Joshua Black
Description
Government Overreach Hinders Progress in Our City
Listen
Transcript
Welcome to the 9th edition of the Saint Petersburg Florida Area News podcast for the year 2019. I’m your host, Joshua Black, and this episode will cover the City Council committee meetings held on February 28th. This episode is a bit more detailed than most previous episodes, but there is a good reason for that.
But first, we must pause, because Councilmember Lisa Wheeler Bowman had a death in her family last week and thus has been absent for the last two meetings. Please keep her in your prayers.
The first committee of the day was the Budget, Finance, and Taxation Committee (also known as BF&T). Council received a quarterly financial report from Anne Fritz.
As she gave her report about city investments, Charlie Gerdes (council chair, but committee vice chair) asked what legal issues might arise if the city invested some of the monies tied up in bonds to make loans to local businesses who couldn’t get loans elsewhere. His reasoning is that the city could probably get the same rate of return on the investment as they were getting from the bonds. He might be right, but it isn’t his money. Sad how willing he is to risk other people’s money, especially after forcing them to pay it into city coffers in the first place. City Council’s attorney told him that it’s probably illegal to do it, anyway.
As she continued her report, Anne made the claim that the city’s investment strategy is to buy stable investments for the most part (21% of the portfolio is US Treasury Bonds, so your taxes are funding federal deficit spending, too), staying away from investments rated BBB or lower, by general policy. When Ed Montanari (council vice chair, but chair of this committee) pointed out that a recent investment in AT&T was rated BBB instead of BBB+, she explained that the downgrade happened after the purchase by the city and was only for a 1 year term, versus the 5 year or longer terms generally sought.
When Gerdes asked about the dire predictions for the market, Anne said that the types of investments the city holds are generally the kind of investments that investors seek in a bad market. Thus, the city expects to have its holdings increase in value during a recession, should it hit. Gerdes also asked about liquidity. Anne responded that the city investment team timed the maturity of some bonds and other investment certificates to coincide with expected increases in city expenditures.
On page 64 of the pdf for the council committee report (link is here, but make sure you view it instead of download, unless you have 262 pages worth of space on your device: http://www.stpete.org/committee%20packets/Budget%20Finance%20and%20Taxation%20Committee/2019-02-28%20BFT%20Agenda.pdf), Anne showed that the pension funds for the city’s employees are generally solvent, with the Fire Department having the best position overall, followed by most other employees, and then by the police.