Board saves money; on-line bids on way
Released Jan. 6, 2006

     CHARLESTON – An investment board overseen by State Treasurer John Perdue is operating $125,000 below budget, planning an on-line bidding process to attract more state investment and showing a steady increase in returns.

       “We couldn’t be more thrilled with the early results,” said Perdue, chairman of the Board of Treasury Investments. “We’re proud of our management of the state’s operating funds and look forward to more innovation and positive performance in the future.”

       Perdue made his remarks after a Thursday quarterly board meeting. Besides Perdue, the board consists of State Auditor Glen Gainer; governor’s representative and vice chairman Brian Kastick; director Martin Glasser and Secretary Jack Rossi.

       Legislators returned the state’s Consolidated Fund, comprised of three pools of state operating funds, to Perdue’s office during the 2005 legislative session. Returns in three of the four funds, including state bank investments, are up since the July takeover from the state Investment Management Board.

       Treasury staff adopted the IMB’s fiscal 2005 budget and had been running at a $125,000 surplus as of Nov. 30. “We pledged to administer the fund more cheaply and so far we have,” the Treasurer said.
     
       The treasurer is also eager to launch an on-line bidding process by which state banks bid on-line for certificate of deposit rates. The treasury promises to invest a certain amount of money to the winning bank.

       Bank officers are given a certain window of time in which to make a percentage offer, then are notified if theirs is the top bid or not. The bidding continues for the allotted time.
  
       “About 10 other states have done this with a lot of success,” Perdue said. “They’ve made a lot more than going out and buying CDs straight up.”

       The Treasurer also wants to realign the program’s overall investment strategy, which includes investing more money within the state; making investments more responsive to the needs of participants; and working closer with and holding investment advisors accountable.

      “Our role is to make sure they’re doing their job,” Perdue said of the investment advisors.

       Under the previous investment regime, only 5 percent of $2.5 billion was invested in West Virginia.

       “We want to spur economic development and job growth in this state,” Perdue said. “This is one method.”