The Cape Charles Town Council adopted a resolution that would enter the town into a Virginia Municipal League Investment pool. According to Treasurer Debra Pocock, current investment possibilities for the town are limited with the current money market at Xenith Bank and in the Local Government Investment Pool.
On the shore, the Town of Wachapreague has elected to join the same Trust.
According to Pocock, the VIP will give the town much more flexibility with its cash base. The primary benefits of participation in the Trust include “professional management of trust assets, diversification, shared costs, and competitive rates of return”.
The City of Chesapeake and the City of Roanoke joined forces to establish the Virginia Investment Pool Trust Fund (VIP.) The Trust is jointly sponsored by the Virginia Association of Counties (VACo) and the Virginia Municipal League (VML) and operates as the “VACo/VML Virginia Investment Pool (VIP.).
Income of the Trust is tax-exempt under Section 115 of the Internal Revenue Code. The VIP Trust Fund currently has approximately $550 million in assets. The Trust currently offers two portfolios: the Stable NAV Liquidity Pool and the 1-3 Year High Quality Bond Fund. The Stable NAV Liquidity Pool is rated AAAm by Standard & Poor’s (S&P) and offers a stable net asset value, daily liquidity and a competitive yield. The 1-3 Year High Quality Bond Fund is rated AAf/S1 by S&P and is designed for funds that can be invested generally for one year or longer.
The Trust benchmarks the 1-3 Year Fund’s returns against the Bank of America Merrill Lynch One-to-Three Year Corporate & Government Index. The 1-3 Year Fund aims to exceed the return of the benchmark over three-year periods while preserving participant capital. Both portfolios are governed by investment policies adopted by the Board and that incorporate the allowable investments identified in the Code of Virginia.
The Trust Fund is governed by a Board of Trustees, composed of Treasurers and chief investment officers elected by participants. The current Trustees are from the counties of Arlington, Fairfax, Washington and Wise, the cities of Alexandria, Chesapeake, Falls Church, Roanoke, and Virginia Beach, the towns of Christiansburg and Smithfield, the Northern Virginia Transportation Authority. The Executive Directors of VML and VACo serve as ex officio members.
The vote to approve the resolution was 4 to 1, with only Dora Sullivan voting against. Sullivan was skeptical about the management and volatility of the VIP, and felt it might be safer to continue using the current investment strategy.