MEDINA COUNTY, OHIO – At the recent third quarter Investment Advisory Board Meeting, Medina County Treasurer John Burke reported that the County has earned $1,308,316 interest income from the investment portfolio that he administers. That is an income increase of 30% or $305,686 more than last year to date as of September. Burke said this large increase of interest earnings is a result of a successful investment strategy implemented to take advantage of rising interest rates.
Burke reported that the financial market has seen interest rates increase this year, largely due to the Federal Reserve increasing their fund’s rate charged to banks from 1.0% to 3.25%. As a result, the cost of borrowing money from the banks has dramatically increased. For example, home mortgage rates have more than doubled. At the same time this has provided opportunities to earn higher interest earnings on various investments according to their type and maturity.
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 advantages of higher short-term rates. “We recalculated the expected interest income and updated the 2022 estimate, and now it is going to be closer to earnings of $2,000,000 for this year,” Burke said. This increase of investment revenue is extra income for the County that can be used by the Commissioners to help pay for services and the operational costs of the County. This extra revenue source also helps to diminishes the need for additional taxes according to Burke.
As Treasurer, Burke oversees the County’s investment portfolio which currently has over $157 million invested. “We normally have about 100 to 120 different investments on any given day,” Burke explained. The largest investment allocation currently is 45% in US Government agencies such as Federal Farm Credit Bank, Federal National Mortgage Association, Sallie Mae Bank and Federal Home loan Mortgage Corp.
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 the International Government Officials Association (IGO), the “Financial Officer Certification” from the National Association of Treasurer and Finance Officials (NACTFO), and numerous Professional Development Awards from the County Treasurer’s Association of Ohio (CTAO). “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.