Date: 01/28/2009

Presentation by Treasury


Votes: View--> Action Taken:

12:05 PM -- Presentation by Ms. Cary Kennedy, Colorado State Treasurer

Representative Judd, Chairman, called the meeting to order and welcomed the State Treasurer to the Joint Hearing of the House and Senate Finance Committees. The Treasurer's Office distributed a department overview (Attachment A) and an in-office General Fund overview (Attachment B) to the committees.

09JointFin0128AttachA.pdf 09JointFin0128AttachB.pdf

12:11 PM -- Ms. Cary Kennedy, State Treasurer, introduced the Treasury staff, described the Treasury Divisions in the Treasury Office, and gave the committee a broad overview of the office's functions. In the Operations Division, investment, accounting, and cash management functions are implemented. The Unclaimed Property Division is cash funded and total collections amounted to $66.9 million in FY 2007-08, up from $51.7 million in the prior year.

Ms. Kennedy commented on the state's investments. The market value of the state's five largest funds currently under management are the following:

T-Cash/T-Pool - $5.7 billion with a 3.4 percent yield;
Public School Fund - $591.3 million with a 5.1 percent yield;
State Education Fund - $474.2 million with a 3.6 percent yield;
Unclaimed Property Tourism Promotion Trust Fund - $67.3 million with a 4.7 percent yield; and
Major Medical Insurance Fund - $124.7 million with a 4.7 percent yield.

Ms. Kennedy reported that the total interest earnings for FY 2007-08 for all funds was $286.0 million. She continued by discussing the state's accounting system. Accounts for all cash received by the state ensures liquidity to meet daily payments. In addition, the state accounted for nearly 493,000 checks that totaled $640.5 million and $20.4 billion in electronic deposits during FY 2007-08. The State Treasury was also responsible for distributing $1.1 billion in Surety and Performance bonds.

12:20 PM -- Ms. Kennedy commented on state distributions to the Highway User Tax Fund (HUTF). For FY 2007-08, the State Treasury made distributions to 62 counties and 270 incorporated municipalities. The distribution to the Colorado Department of Transportation (CDOT) was $840.5 million, down from $914 million in the prior year. The Department of Public Safety received $86.8 million, the Department of Revenue received $13.5 million; counties received $163.7 million; and cities received $106.7 million. Federal mineral lease distributions totaled $153.6 million.

Ms. Kennedy reported that the Cash Division issued series 2008A Revenue Anticipation Notes for a total amount of about $350 million. These notes assist the Treasury in managing cash flows. In regard to this years' note issues, the interest cost was 1.68 percent. The notes received the highest possible ratings, F-1 from Fitch Ratings, and SP-1 from Standard & Poor's.

12:34 PM - Ms. Kennedy continued the presentation by discussing Colorado's homestead exemption and the property tax deferral program. The payments for the senior homestead exemption in FY 2007-08 were $78.9 million and are expected to grow to over $90 million by FY 2009-10. For the Property Tax Deferral Program, there were 379 new applications for FY 2007-08 while the total number of participants is 480. The total amount lent to elderly homeowners in FY 2007-08 was $818,000, up from $545,000 in the prior year. Total loans outstanding as of the close of FY 2007-08 were $4.8 million.

Ms. Kennedy continued by discussing the Interest-Free School Loan Program and the Bond Intercept Program. The Bond Intercept Program ensures full and timely payment of school debt. The number of bond issues is 447 amounting to $7.3 billion.

Ms. Kennedy closed by discussing the State Treasurer's initiatives for 2008. The State Treasury's Transparency program allows a "one-stop" shop website for information on how tax dollars are used. Another initiative, the State Taxpayer Accountability Report (STAR), is a report that presents state revenue and expenditures in an easy to understand format. These initiatives are making state government more transparent for everyone in Colorado.