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Analysis shows the corpus about $6 million short of its obligations to 2036
With bond values down as interest rates rose, the District's money managers presented an asset-liability analysis. Sage put the future value of the District's known liabilities through the 2036 end of the Indigent Care Agreement at $167.7 million, with a present value of $132.8 million, against current assets of $126.8 million, a gap of about $6.0 million. The board voted to seek a single money manager with actuarial support for the whole portfolio and changed the corpus investment policy to match assets to liabilities.[1][2]
Laura StorrsSage Advisory Services (Sage Investment Managers)Wells Fargo Advisors
What the sources say
- ✓ Verified
Amarillo National Bank (District money manager): At the December 2, 2022 Finance Committee meeting, Amarillo National Bank said the District had about a 16 cent loss per dollar on its current bond holdings because of the inverted yield curve and was taking out more each year than the investments earned. [1]
- ✓ Verified
Sage (District money manager): Sage's analysis put the future value of the District's liabilities to 2036 at $167.7 million and their present value at $132.8 million, against current assets of $126.8 million, and said the total deficit was approximately $6.0 million and could be spread over the years through 2036. [2]
- Liabilities present value
- $132,800,000
- Assets
- $126,800,000
- Deficit
- $6,000,000
- ✓ Verified
Laura Storrs, Assistant City Manager: Asked why the liabilities were no longer covered, the Assistant City Manager said market interest rates had not performed as projected, which resulted in the deficit. [2]
- ✓ Verified
The investment counselor reported the corpus portfolio down 12.6% for the year ended September 30, 2022, against a policy benchmark down 9.8%. [2]
- ✓ Verified
The revised corpus investment policy identifies the funds as being for indigent care and other health care services and changes the investment objectives to matching the District's assets to its liabilities. Both the policy and the request for proposals passed unanimously. [2]
