Three financial experts named for comprehensive review of King County Investment Pool

The Metropolitan King County Council today appointed three local financial experts to an advisory panel that will conduct a comprehensive review of the $4 billion King County Investment Pool.

“Recent instability in the financial markets shows that we need an expert panel to help guide our investment decisions and protect taxpayers from further fluctuations," said Councilmember Bob Ferguson, chair of the Council’s Operating Budget Committee. “This is a stellar group of experts in the financial industry who bring us broad expertise in financial markets and public investment pools.”

The King County Investment Pool invests the cash reserves for all King County agencies and nearly 100 other public entities in the county, including school, fire, sewer and water districts. It is one of the largest investment pools in the State of Washington.

The County Council today appointed the following individuals to the Investment Pool Advisory Panel:

• John Rose is the former CEO of Seattle-Northwest Securities Corporation, the region’s largest underwriter of bonds. He was recently elected chair of the board of trustees for the Nature Conservancy’s Washington state chapter. He served as King County Budget Director for County Executive John Spellman.
  
• John Dobrowolski was a Senior Vice President and Division Executive Portfolio Management for Washington Mutual. He has also worked as a portfolio manager for GE Financial and a Financial Risk Management Specialist for International Finance Corporation, a member of the World Bank Group.
  
• Mary Ellen Mullen is the Principal & Senior Consultant for Bellevue-based Bridgebay Consulting, which conducts institutional investment consulting and research. Mullen has previously worked for Wells Fargo, Seattle-First National Bank, and Bank of America, where she was a co-founder of the investment management subsidiary, Seattle Capital Management.

“Inviting additional experts to help the County navigate difficult financial markets can only help us further protect precious taxpayer dollars,” said Councilmember Jane Hague, chair of the Operating Budget Panel.

“With our expert panel now in place, King County can commence its comprehensive review of the investment pool’s policies and operations,” said Councilmember Dow Constantine. “The goal, as always, is to ensure that taxpayer dollars are invested prudently and accountably.”

“Recent events in the commercial paper market have led to the sudden and unprecedented downgrade of three of the Investment Pool’s commercial paper holdings,” said Councilmember Kathy Lambert, vice chair of the Capital and Operating Budget Panels. “The Advisory Panel’s review will help to ensure that the County’s investment practices are well-equipped to deal with these uncertainties and any future market disruptions.”

“Expert oversight of the public’s investment pool is needed to ensure strong financial ratings,” said Councilmember Larry Phillips. “These nominees bring to the table the financial expertise we need. I look forward to hearing their advice for strengthening our investment policies and meeting our investment goals.”

The advisory panel will review the King County Investment Pool for best practices in five areas:

• The investment goals of the Pool, including risk tolerance, liquidity targets, and rates of return.
  
• The membership goals of the Pool, including the size of membership, the value of maintaining a high credit rating with a national rating agency, and the roles and responsibility of members in sharing risks and returns.
   
• The investment policies of the Pool, including maturity, duration, liquidity, and diversification policies, as well as the types, creditworthiness, and limits on the securities held by the pool.
   
• The portfolio of the Pool, including how well investment goals are maximized and policies are followed.
  
• The management structure of the Pool, including how day-to-day operational and investment decisions are made and the role of the Executive Finance Committee. The pool’s structure shall be reviewed for its inclusion of financial expertise and the availability of objective advice when establishing investment policies and practices.

The panel will also review the county’s written investment manual, and examine whether financial experts should be available to help guide the policy and operational decisions of the Pool.

Appointment of the Investment Pool Advisory Panel will also fulfill expectations expressed at the Council’s Citizen Engagement forums earlier this year, where citizens voiced desires for greater fiscal accountability when taxpayer dollars are involved.

Read more about this legislation on the King County Council’s LEGISEARCH system.  Type in “2007-0578”