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County to shop for new investment firm

July 14, 1998|By BRENDAN KIRBY

The Washington County Commissioners on Tuesday voted against renewing the contract of the firm that manages the county's $31 million pension plan, choosing instead to invite other companies to bid on the contract.

INVESCO Capital Management Inc., which manages the fund now, became embroiled in controversy last year when it invited three county officials to attend The Masters golf tournament.

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Commissioner John S. Shank, who proposed asking for new bids, said in an interview that his motion had nothing to do with the golf trip.

Shank and Commissioner Ronald L. Bowers said they think the county might get a better deal.

The existing agreement pays INVESCO a percentage of the total assets of the fund, which is around $31 million.

At its present size, fees would total about $152,500 a year, according to the formula.

"The larger the investment, the cheaper it should operate," Shank said.

Commissioner R. Lee Downey, who cast the lone vote to retain INVESCO, said starting a new bidding process carries risks. A firm with lower fees might not produce as high a return, he said.

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"The only thing is, this firm - at least I believe - has a tremendous track record," he said.

Commissioners President Gregory I. Snook, who attended the golf tournament along with County Administrator Rodney M. Shoop and Human Resources Director Alan J. Davis, abstained from Tuesday's vote.

Commissioner James R. Wade was absent.

Although another firm may offer lower rates, Downey said the county will have to pay transfer fees if it switches companies.

As he has in the past, Bowers praised Snook for abstaining from the vote.

Bowers voted against the contract last year because he said the process through which the firm was selected was unfair.

A year ago, Wheat First Butcher Singer submitted a bid that was $98,500 lower than INVESCO's. But the county chose INVESCO because an investment adviser from BGS&G, the county's actuarial contractor, told officials Wheat First's bid contained hidden costs.

He also said the firm had a weaker investment record.

Bowers said BGS&G competes with Wheat First and called for a new bidding process that did not include BGS&G.

Snook has abstained from all votes on the county's pension fund because he attended The Masters in April 1997. He, Davis and Shoop paid the $100 price of the tickets, but might not have been able to attend without INVESCO's offer.

The ticket-holder list for the exclusive tournament has been closed since 1978 and tickets have been scalped for as much as $8,000, golf observers said.

Downey said the flap may have contributed to Tuesday's decision.

"I think it might have had a bearing," he said.

The Washington County Ethics Commission, which reviewed the trip, ruled it was "not a bright idea" but said it did not constitute a conflict of interest.

The county awarded INVESCO a three-year contract last August, but the pact allows the county to cancel it at the end of each year.

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