January 14, 2015 JAC Agency Hearings 151 - Laramie County District Attorney 004 – State Treasurer 1/14/2015 4:17:59 PM Harshman: Welcomed Attorney Sandburg Sandburg: Victims not feeling as though their voice is being heard. Will work on expanding the volunteer base in victim’s services, will need someone to manage the volunteers. Victim witness assistance is the one I would highlight as the most need. Natrona County has 3 people, same caseload, and same need. 1/14/2015 4:20:44 PM Sandburg: 2nd request for legal assistance exists, being paid out of 900 series, deals with victims of domestic violence and violent crime, subject to sundown. If we use 900 series for other things, like going to trial, would not have money to fill this position. Current person is retired law enforcement so does not need benefits. It is not a new position; We are asking to make it permanent. 1/14/2015 4:22:13 PM Harshman: Total staff? 20, Natrona County has 19. Can you move people around? 1/14/2015 4:22:50 PM Sandburg: more crime investigated and reported in Laramie County. Campbell county highest, Natrona county second and Laramie county third, fractional difference. Population in Laramie county is higher. Comparing complexity of cases. 50 shoplifting for every aggravated battery. The more complex crimes in Wyoming have increased over the last 8 years. Aggravated battery by 60%, juvenile increase. 1/14/2015 4:24:28 PM Nicholas: Have you had conversations with Natrona County about number of employees, case load, etc. How do we make a realistic decision without having the information you are talking about…types of caseloads, what makes you different. Are people paid less in NC, one more attorney on staff. We need answers on those. This is a supplemental budget so typically they are for an emergency. What is different now than a year ago? What makes it so important that you have it now? 1/14/2015 4:26:18 PM Sandburg: I have not had those conversations with NC DA. One legal assistant per each two attorneys. What are those individuals doing? Do not know if we can get a fair comparison. 1/14/2015 4:27:28 PM Nicholas: Victim assistance funds – any go to administration? Sandburg: No Nicholas: 3.5 to 4 million in that fund right now. If we continue to increase the staffing needs for victim compensation, should figure out how to make a funding mechanism instead of through the GF. Harshman: That is a question, do you agree? 1/14/2015 4:28:38 PM Burns: If legislature agreed to this funding would there be a corresponding decrease in the 900 series. Sandburg: I believe we would be able to return money at the end of the session? Burns: Same amount or not? If it is working now, why are we changing it as part of the supplemental budget? Sandburg: Concern over the person remaining and hiring someone new. I am anticipating individual will not stay through the end of the year. Focusing on priority 1 and 2. What has changed is the fact that we had an election and voters are not being heard. Part of the reason is because we have not had the staff. 1/14/2015 4:30:58 PM Ross: 2014-15 budget request. District 1 vs district 7, receive 300,000 more. District 7 has 19 employees, you have 20. What if your office not doing that they can do for less? Sandburg: I am not sure how many crimes have victims vs. those that don’t. ….. WE have more identified victims than we can deal with. 1/14/2015 4:33:08 PM Harshman: last page of handout shows domestic violence cases. Handout 151-58 1/14/2015 4:35:23 PM Nicholas: Graph of domestic violence., 400 less domestic violence cases than you had two years ago, therefore suggest less need. Sandburg: Did not take graph back far enough. 2014 is only for ¾ of the year. Missing the fourth quarter. Nicholas: Why the f=difference in the number of domestic violence cases in Laramie County than NC. His answer was that Laramie county is more aggressive with those cases than NC. Sandburg: Discussions with local law enforcement. Made sure they knew they had discretion in the field on those cases. Law enforcement said they know that. If you have a case of sending each party to their corner and that ends up with a shooting,... Believe there is more awareness here. Nicholas: makes about 35000 per year? For biennium, moving it to 97000? Sandburg: A large portion is for the benefits associated with the position. Nicholas: appropriating for the full amount in the budget so have the full amount Sandburg: I suppose so. 1/14/2015 4:40:21 PM Harshman: ….Anything else? Do not anticipate any call back. If you have other information, please send it to us. 1/14/2015 4:40:55 PM Harshman: Welcome to the Treasurer. Gordon: Deputy treasurer Sharon Garland is here Two handouts: public fund compensation analysis by Kunz and a more recent one. Office has investigated how to be more efficient. We are doing this in the supplemental.. Michael brought funds up from 6 b to 18 B. He left for a job in Nebraska. We lost his experience and his contacts. To get a CIO who can help us mange all of these accounts, we have to pay in this range..around 250,000. State employees are committed, competent, work long hours. Because of IT, run 4 sets of books, working to rectify. We are here today to present priority 1 for CIO, 2nd to build the staff out to build stability in the system, which is 3 senior investment.. We have 2 vacant positions, want to upgrade them. 4th priority is another position. Sharon will walk us through the details. 1/14/2015 4:46:53 PM Garland: page 3 of budget request is a summary. Manager payment code 0600- investment division. 665,000 for salary and fringe benefits, come from special revenue funds. Harshman: one year number? Garland: it is a 15 month number. Burkhart: Money out of 600 series? Why not out of 100 series? Harshman: salaries Garland: 0600 is the division number, it is series 100 1/14/2015 4:48:43 PM Connolly: where are salaries coming out of right now. Garland: in investment division, from investment income Connolly: CIO? Garland: All positions are from the investment division so the funds come from investment income. 1/14/2015 4:49:35 PM Harshman: can put all money into GF and take it out or intercept before it gets there. Garland: 0002 is chief assessment officer, current salary is 125,000. Requesting increase to 250000. Amount requested is for 15 months. Benefits in the next column. Garland: 0021, second position is currently vacant in Treasurer’s office. Rewrite the position description, 89000 now, increase to .. 0019 is not vacant. Perkins: How long vacant? Garland: CIO since December. Position 21 for several years. Perkins: Summary, netted out. Was full deducted against? Garland: not on this page but later it was 1/14/2015 4:52:53 PM Harshman: Other agencies will take the money and use on other positions. Garland: it is not being used in total on other positions. Ex: pay increase authorized by legislature but not given funds. Look to 100 series money first. 1/14/2015 4:53:53 PM Senator Wasserburger: I read the budget from last year. Approx. 2 B of the state’s investments were invested by external management. Vs. amount managed internally by your staff. Asking for salary increase .. using outside mgt. Gordon: External management fees Each manager has a contractual arrangement with us and reports to us. We do a significant amount of asset allocation, across investment vehicles. Our job is manage asset allocation range, very time consuming, 4 people work on it within our office. Direct fees or net of fees. Roughly a half and half arrangement. Have 1 Billion in internal fund 1/14/2015 4:57:01 PM Ross: If we pass the constitutional amendment to allow you to invest additional funds, are you anticipating additional people needed? Gordon: I do not. Build out an office for a 20B fund. Some efficiency we can achieve. Some passive, like picking an index like Standard and Poor’s. We currently pay for that, could bring it in house. Point is to have a platform to build from 20 B to 30 B without additional staff (other than what is being asked for in this request) 1/14/2015 4:59:09 PM Perkins: 100-200 external money managers? Gordon: No, about 35. Perkins: Do any of the 35 understand the Wyoming investment strategy overall? Gordon: no, may have some inkling but run their section..We do all the balancing internally. Perkins: investment staff building out – Person between state loan investment board and your office carry out the strategy in whole, makes sure strategy is carried out among all the managers we have? Gordon: yes Burns: What was Michael Walters’s salary? Garland: 125000 Burns: looking to double that? Gordon: correct 1/14/2015 5:01:59 PM Harshman: clarification of open positions Garland Nicholas: Where did you come up with 250000? Gordon: That number was antidotal from a meeting. Salary surveys are old, 2010 and 2012. Her exact comment is that the avg median salary in the Rocky mtns is 250,000 Nicholas: What is the comparison….retirement centers, fund amounts, etc? Gordon: range of salary structures is vast. In studies, show ranges. Nicholas: Define public funds Gordon: pension funds, sovereign funds, state funds. Nicholas: loading the ammunition before the gun goes off..fill a position, raise salaries, sequence does not make sense. Why wasn’t the position filled two years ago, a step process? Gordon: We have been working for 2 years to redesign our office, make it more efficient. Two years ago, I said we wanted to keep the position but not fill it yet. We want to have a CIO whose responsibilities will include dealing with this body, work with a committee that reports quarterly on portfolio risk so we do not rely so heavily on external consultants, so we have an expertise on bonds. Raft of Wyoming type of investments which we currently do not have the staff to manage. We started working on what we planned to present now, a year ago. Nicholas: When you hire these new folks, is 250000 the starting salary, so there will be pay raises. Gordon: I am asking for the capacity to be able to go up to that amount, will not advertise at that amount. 1/14/2015 5:08:47 PM Greear: Kunz report..terms. Investment advisor. Director of asset allocation and risk management, which is kind of what we are looking at. If we had a CIO, he may manage those assets. Would that net a savings on outside fees? Gordon: 2nd question: yes, hope to bring back in house some of the passive. We do not want to do it without the expertise. Director of asset allocation and risk management title is a junior position which is not what we are looking for. We want a CIO. That is a different set of skills than simply looking at a chart. 1/14/2015 5:11:48 PM Ross: Other funds.. actually these positions being paid out of investment earnings. Out of the long haul, save money because we would utilize our own people to do the work so net wash or gain? Gordon: Yes. That would be the hope. Depends on who we have and how we approach it. 1/14/2015 5:13:00 PM Wasserburger: Non-negotiable indenture bonds? Pg. 21 in the biennial budget. Garland: Some of the farm loans that the state invests in, mechanism used for those is a nonnegotiable signature bond. The state cannot give a loan to an individual. State loan and investment board issue a bond, state treasurer buys the bond, gives money to office of state land an investment, which writes the mortgage to the individual. 1/14/2015 5:14:42 PM Perkins: Clarification – non-negotiable means treasurer must hold until maturity or default, can’t be sold off to anyone else Burns: Wyoming Star program lists professional fees of 250,000. Page 29 of biennial budget Garland: paying money managers fees. Burns: 1.4 million fund, much smaller Gordon: It is a very specific fund, overnight money, much smaller fund. 1/14/2015 5:16:23 PM Connolly: In the handout, 3rd page, public funds CIO pay, unearned and earned bonuses. The positions listed by you, would they receive that? Gordon: WE do not anticipate that, may be some constitutional issues Connolly: do you do it now? Gordon: No Nicholas: Two new positions will not manage funds. They will oversee the 35 managers. Is that accurate? Gordon: We do have in house a bond fund approaching a billion dollars. Notion is pretty much what you describe but we want the capacity to drill down into the mangers. Example given. Want capacity to understand the depth of commitment from the managers we have and whether they are still doing what they were hired to do. We rely on consultants. Consultants have limitations. We want to use them as needed. Want capacity in house to know that the 19B market fund is not at risk. Nicholas: How will you get quality person when paying a third under private mkt share? 400 M under investment. Explain bond fund and how it is managed. Gordon: Run by Diana Walter in our office. It is 450,000. Nicholas: Short term bonds? Gordon: full-fledged bond portfolio Nicholas: Need 500,000 for really qualified individual? Gordon: We are trying to find a good balance. I do not believe there is a direct correlation between money paid to a manager and results from a manager. We understand that public funds are launching pads for individuals. Want to allow for people to improve without losing our program 1/14/2015 5:23:17 PM Harshman: Other agencies had that problem..mineral taxation. Chairmans will handle this budget Burns: Baldridge program is what? Gordon: Named after and started by Malcom Baldridge, sec of commerce under Reagan. Seeks best performance for entities, provide best mgt possible, put out for peer review, puts in place metrics. I brought it here because we put it in place at the Federal Reserve Bank in Kansas City and it improved our performance Burns: level of achievement or performance? Gordon: There is an award. You provide to the Baldridge community a rubric that has all your performance measures, etc. The Baldridge community reviews it, gives suggestion. Burns: a program of peer review? Gordon: yes Harshman: anything else Gordon: not just private funds, across all areas 1/14/2015 5:27:14 PM Harshman: scheduled at noon for Capital update. Richards: I have not received any requests for other agencies.