At the recent Investment Advisory Board Meeting, Medina County Treasurer Burke reported that investment earnings for the County totaled $2,087,913 in 2022, up 61% from the previous year. Burke said the large increase of $795,112 was the result of a successful investment strategy implemented to take advantage of rising interest rates in the financial markets.
“This increase of investment revenue is extra income for the County which can be used by the Commissioners to help pay for services and operational costs of the County. This extra revenue source also helps to diminish the need for additional taxes,” noted Burke.
At the beginning of 2022, interest earnings from the investment portfolio were projected to be $1,300,000 for the entire year. Because of the changes in the financial market Burke rebalanced the maturity of the investments in the County’s portfolio to take advantage of higher short-term rates. Burke said, “This investment strategy brought in an additional $800,000 by the end of the year”.
Burke reported that the increase in interest rates over the last year was largely due to the Federal Reserve increasing their fund’s rate charged to banks. In 2022, the Fed increased their interest rate eight times from 0.25% to 4.5%. As a result, the cost of borrowing money from the banks dramatically increased. For example, home mortgage rates have more than doubled to over 6%. “These changes in the financial market provided opportunities to earn higher interest earnings on various investments according to their type and maturity,” he noted.
As Treasurer, Burke oversees the County’s investment portfolio which currently has over $168 million invested. “We normally have about 120 to 170 different investments on any given day,” Burke explained. The largest investment allocation currently is 49% in US Government agencies such as Federal Farm Credit Bank, Federal National Mortgage Association, Sallie Mae Bank, and Federal Home Loan Mortgage Corp. The second largest investment of 24% is currently in U.S. Treasuries.
To make those investments the Ohio Revised Code requires County Treasurers to take continuing education courses each year approved by the State of Ohio Treasurer and Auditor. Besides completing his annual hours of continuing education, Treasurer Burke has also earned other certifications such as the “Chancellor’s Certification for Public Administration” from IGO International Government Officials Association; “Financial Officer Certification” from NACTFO (National Association of Treasurers and Finance Officials); and numerous Professional Development Awards from the CTAO (County Treasurer’s Association of Ohio). “Continual learning is important for every public fund manager to safely invest public funds and get the highest yield possible,” stated Burke who also has a BA and a Master’s in business administration from Miami University.
Treasurer Burke is chairman of the County Investment Advisory Board which meets quarterly to review the investment portfolio managed by the Treasurer. The other members of the Investment Advisory Board include the three County Commissioners and the County Clerk of Courts.
PLEASE NOTE: The information contained in this article was not intended to be nor should be considered investment advice.