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 Welcome to the New Mexico State Treasurer's New MexiGROW LGIP, a short-term money market fund created by state statute and available for use exclusively by governmental entities in New Mexico. The fund currently holds more than $1 Billion in pooled assets from over 136 participating local governments, primary schools, colleges, special districts, quasi-state agencies, and tribal governments.
1. What is the State Treasurer's Investment Policy? LGIP investments are governed by the State Treasurer's Investment Policy, a document approved by the State Treasurer's Investment Committee and the New Mexico State Board of Finance. It sets forth investment guidelines for investments allowed by state statute. Pursuant to that policy, all investments made by the State Treasurer adhere to three fundamental principles: SAFETY, LIQUIDITY, and RETURN – in that order.
2. Who may participate in the New MexiGROW LGIP? Eligible participants include school districts, post-secondary educational institutions, special purpose districts, cities and counties, and tribal governments and pueblos.
3. What are the advantages of participation in the Pool? The fund's purpose is to maximize interest earnings utilizing economies of scale: a large pool commands the purchasing power necessary to get the best yields at the lowest cost available. Also, the New MexiGROW LGIP is now AAA rated by Standard & Poor's; the highest money market fund credit quality rating assigned by S&P and New Mexico is one of only 12 states attaining this high rating.
4. Where are the securities held? The state's fiscal agent bank contracts with Northern Trust, one of the nation’s leading fiduciaries, to act as a third-party custodian to hold all purchased securities along with the required collateral pledged for the overnight repurchase agreements.
5. In what types of securities are the New MexiGROW LGIP funds invested? The types of investments which may be made with state funds by the State Treasurer are defined by statute. Pooled assets may be invested in the following: U.S. Government Obligations, Commercial Paper, Asset-Backed Obligations, Money Market Mutual Funds, and Repurchase Agreements. It is the policy of the Treasurer's Office to comply with all applicable investment statutes.
6. Who manages the investments of the fund? The State Treasurer's LGIP Bureau is comprised of a qualified fund manager and an experienced customer service technician. The fund manager handles the investing and reporting for the LGIP. The LGIP Bureau staff utilizes an investment software system to track participant holdings, compute and distribute investment earnings based on the balance and term of deposits, and issue monthly participant statements.
7. Is my local public money available when I need it? You can call the Local Government Investment Pool Bureau at 505-955-1154 or 505-955-1120 and have your money within 24 hours.
8. What interest do I earn on my investment? The rate changes every day and is on the State Treasurer's telephone rate line, 505-955-1171, as well as the website: www.stonm.org. Interest income is distributed to participants monthly via automated clearing house (ACH) transaction or reinvestment by the first working day of the following month.
9. Is my local public money kept separate from other public money in the investment account? Your local public money is accounted for and tracked separately but is pooled with other public money for investment purposes. By law, accurate and detailed accounting records must be maintained for each individual LGIP account.
10. What are the costs to my local public body to participate the Pool? The State Treasurer's Office is allowed by statute to charge a fee for use of the Pool. The STO charges a minimal variable rate fee which is assessed at the end of each month. The fee, approximately 5 basis points and one of the lowest fees available on any money market fund, covers the costs involved to manage and operate the Pool.
11. Is there a minimum or maximum number of days my local public money must be invested? There is no minimum; you may even invest for a single day; however, in this case you must inform the STO of the term upon deposit to satisfy the 24-hour advance notice requirement. The maximum term an investment may be held in the LGIP is specified by state statute as six months but term renewal is permitted. The State Treasurer's Office contacts participants semi-annually to confirm that they intend to reinvest their holdings in order to comply with this limitation.
12. What is the risk? All investments purchased for the New MexiGROW LGIP must be high quality, with a credit rating of A or better to ensure the highest level of safety; U.S. Government securities are rated AAA and all commercial paper investment is A-1+. Also, the State Treasurer is required by law to have the overnight repurchase agreements secured by U.S. Government securities at 102%. The quality and security of the investments in the Pool ensure an extremely minimal risk.
13. How does the Pool's performance compare to other investment options? Currently, the LGIP compares favorably to similar money market funds and with other state LGIPs, while consistently outperforming bank-offered options.
14. How did the recent scandal at the Treasurer's Office affect the Pool? The type of investments selected for the Pool by prior administrations proved inappropriate for a money market fund. The length (term) of the investments was longer than should be selected for a liquid asset fund causing the blended yield of the Pool to lag behind comparable funds when interest rates began to increase. These assets have since matured and no longer remain in the portfolio. No assets of the Pool were lost, though local governmental participation in the Pool decreased.
15. What changes have been made to the LGIP by the Treasurer? The State Treasurer's Investment Policy has been revised to limit exposure to such investments also reducing the term of maturities in order to maintain liquidity and attain optimum yield. The blended yield on the LGIP increased almost 2 percent through the beginning of 2006, from 3.35 percent in January to 5.25 percent in August. The State Treasurer's Office is actively incorporating the needs of New MexiGROW LGIP participants into operations of the Pool in order to offer a fund with not only competitive performance but also exceptional customer service.
16. How does Standard & Poor’s regard the New MexiGROW LGIP? 2006 legislation enabled the Pool to apply for a money market fund credit rating from Standard & Poor's, a nationally recognized statistical rating organization. The rigorous rating process involved a review of internal controls, investment policies and procedures, portfolio inventory, and the fund manager's experience. The New MexiGROW LGIP was awarded a AAAm, the highest money market fund credit quality rating awarded by Standard & Poor's. Only 12 other states have earned a rating of AAAm on their LGIP. Going forward, S&P will monitor the Pool to ensure that the high quality standards are continuously maintained.
17. What is required to get my public entity participating in the LGIP? Contact us at the numbers listed below; we will send you a packet that includes an application, an authorized persons designation, and a sample resolution. In order for an entity to participate in the New MexiGROW LGIP, a resolution stating this intent must be adopted by the entity's governing body.
Contact us:
Kirene Bargas LGIP Portfolio Manager / Bureau Chief
505-955-1136
Kirene.Bargas@state.nm.us
Hannah Chavez LGIP Account Technician
505-955-1154
Hannah.Chavez@state.nm.us
505-955-1180 Fax
505-955-1120 State Treasurer’s Office
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