DOVER, DE--(Marketwire - February 12, 2013) - On Monday, February 11, Delaware State Treasurer Chip Flowers told the General Assembly's Joint Finance Committee that the interest earned on the state's investment portfolio will continue to grow this year, the second year of improved performance following a drop in interest earnings from FY 2009 through FY 2011.
Gross earned income from the portfolio declined from $37.8 million in Fiscal 2009 to $19.3 million in Fiscal 2011, but increased to $20.9 million in Fiscal 2012 (the first full year in office for Treasurer Flowers), and is projected to increase to nearly $22.5 million by June 30, the end of the current fiscal year.
The increase is primarily the result of a gradual restructuring of the investment portfolio following a report last year by an independent advisor, Credit Suisse Securities (USA) LLC, which found that the portfolio had been generating historically low returns that were failing to keep up with the pace of inflation.
"The improved returns continue to demonstrate that we are on the right track -- improving the portfolio's performance without increasing risk by implementing best practices with the advice of independent financial experts. Despite economic uncertainty arising from our national's fiscal policies, the Delaware State Treasury emerged from 2012 with numerous accomplishments in its service to the People of the State of Delaware," Flowers said.
At the annual hearing before the budget-writing Joint Finance Committee, Flowers also released his Third Report on the Delaware State Treasury, a 12-page document that outlines the strengths of the office, the accomplishments during the second year of his administration, and challenges and initiatives for the coming year.
"Promoting an open and competitive bid process for treasury contracts, realigning our state investment portfolio, adopting historic measures to protect public funds and removing barriers to economic opportunity are just a few of the many actions undertaken over the past 12 months in order to ensure the safety and stability of public credit and funds as well as the financial health of the State of Delaware," Flowers said in releasing the report, which is available online at the Delaware State Treasury website, http://treasury.delaware.gov/.
At the annual hearing, Flowers supported the $1.25 million General Fund budget recommended for his office for FY 2014 by Gov. Jack Markell.
In his report, Flowers noted a significant number of achievements including:
- Signing a directive to protect and collateralize state funds to coincide with the expiration of the Federal Deposit Insurance Corporation's Transaction Account Guarantee Program;
- Issuing an open and competitive proposal for choosing an increased number of investment managers;
- Negotiating reductions in the fees charged by the state's current investment managers;
- Establishing new performance measures for the state's investment managers;
- Launching a prepaid debit card program to reduce the number of checks issued by the Treasury;
- Creating the Delaware Stock Index; and
- Receiving White House recognition for the Treasury's financial literacy programs.
For a copy of the report, visit http://treasury.delaware.gov.