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Since taking office in June 2005, Treasurer Meacham has overseen numerous projects to enhance performance, reduce costs and increase investment earnings to benefit the state.
Banking Services
- Two new contracts negotiated by Treasurer Meacham for banking services will save the state more than $1.2 million during the five-year life of the contracts.
Investment Portfolio
The treasurer directs the investment of more than $5 billion for the state’s General Revenue Fund and for individual state agencies.
- During Treasurer Meacham’s first two years in office, investment earnings were tripled – generating almost $100 million during FY 2006 and almost $150 million during FY 2007. For FY 2008, earnings are estimated to be $153 million.
Changes that have been implemented to enhance investment earnings include:
- Investing more in US Agency securities which yield approximately 25 basis points more than comparable US Treasury securities.
- Reducing overnight liquidity – in essence, the state’s checking account balance – by $1 billion. Instead, the money was moved into the longer-term investment portfolio.
- Online trading was implemented to increase earnings and provide additional security. During FY 2006, this change saved the state almost $29,000. During FY 2007, online trading has saved $82,000.
US government agency mortgage-backed securities were recently added to the portfolio to enhance earnings. Also, a dynamic liquidity target will soon be put in place to further improve earnings.
Securities Lending
- Through negotiation with the treasurer’s custodial bank, we anticipate earning an additional $1.25 million over the next five years due to a 10 percent increase in the share we receive on securities lending.
- The change increases the portion the state receives from 75 percent to 85 percent of the proceeds.
Direct Deposit/PayCard Contract
State law requires all employee pay be done with direct deposit. Employees that are unable to have a banking relationship can use a pay card.
- Annual savings are approximately $250,000 for state government. This is calculated at $1 savings per pay check.
Merchant Credit Card Contract
- Treasurer Meacham negotiated a new contract for processing of transactions made with the state using credit cards. The new contract will save the state $1.5 million over the next five years.
Record Storage Efficiency
- Legislation introduced and enacted at the request of Treasurer Meacham in 2006 will allow the state to save approximately $40,000 each year by eliminating the need to store paper records, moving instead to more electronic imaging.
Staffing
- Staffing within the treasurer’s office has been reduced by 10 positions in the past two years to save approximately $400,000.
- As vacancies come at the agency, the positions are carefully analyzed to determine whether duties can be transferred to existing employees. This process has resulted in the reduction of two positions within the administration division, and one employee each in banking operations and accounting.
- A restructuring in the Information Service Division eliminated six positions.
Unclaimed Property Division
The Treasurer’s Unclaimed Property Division has $175 million for 350,000 Oklahomans. The office is holding unclaimed property for about 1-in-10 Oklahomans. That is better odds than winning the lottery!
- In the first two years under Meacham’s direction, the number of claims paid has jumped 52 percent and the amount of money returned has increased by 26 percent.
- In seven years at the Oklahoma City Fair, some $1.98 million has been found for 5,839 people. In three years at the Tulsa Fair, $961,000 has been found for 1,777 people. The combined total for the fairs is more than $2.9 million found for 7,616 people.
Oklahoma College Savings Plan
The Oklahoma College Savings Plan was introduced in April 2000 and had grown to include more than 36,000 accounts containing more than $275 million. Originally launched with only an age-based allocation option and no state tax deduction, the program now includes the age-based option along with five other investment options and one of the most generous income tax deductions of any 529 Plan in the USA.
- Since Treasurer Meacham assumed the chairmanship of the Oklahoma College Savings Plan, the number of accounts in the plan has increased by 38 percent (26,187 in June 2005 to 36,160 in October 2007).
- The amount of money contained in the Plan has increased by 112 percent ($131.3 million in June 2005 to $277.9 million in October 2007).
- The average account size has increased by 53 percent ($5,014 in June 2005 to $7,686 in October 2007).
- A tax deduction of up to $10,000 per year for single taxpayers and $20,000 per year for couples filing jointly is available. Also, a five-year carry forward provision was enacted. This provision would allow a married couple, for example, to contribute $120,000 to an OCSP account and deduct the entire amount in $20,000 increments for six years.
Recognizing the limitations of being exclusively a direct-sold plan, Treasurer Meacham, with approval of the trustees, appointed an ad hoc task force to explore options to open the plan to advisor-sold products.
In spring 2007, the task force issued its final report recommending creation of a hybrid plan that includes both direct and advisor sold products. Adopted by the board, negotiations are now underway to add the new components.
Oklahoma Tobacco Settlement Endowment Trust Fund
The Oklahoma Tobacco Settlement Endowment Trust Fund was approved by voters in November 2000 to permanently invest a majority of Oklahoma’s share of the National Settlement Agreement with tobacco companies. The earnings are to be used to combat tobacco addiction and for other health-related programs.
Spending decisions are made by an appointed board of directors with investments controlled by a board of investors, chaired by Treasurer Meacham.
- When the treasurer took office, the fund contained $246 million and $4.5 million was certified for spending. One year later, at the end of Fiscal Year 2006, the fund contained $301 million and $6.8 million was certified for spending. For Fiscal Year 2007, the fund contained $379 million and a total of $10.3 million was certified for spending.
- In early 2007, Treasurer Meacham and the board of investors made a change in investment policy that will generate $10.5 million in additional income during the next five years while protecting the funds for generations to come.
- The revised investment policy reallocates the portfolio into assets that generate more cash, as opposed to simply boosting the value of the fund. However, the board’s policy ensures the value of the fund will continue to grow faster than inflation.
- Treasurer Meacham also renegotiated virtually all investment contracts held by the board of investors to generate an additional $3.6 million during the next five years.
- Due to the renegotiated contracts and investment policy changes, the total benefit is $14.1 million for spending on programs to improve the health of the people of Oklahoma.
- The trust fund currently contains $382 million.
Refinanced Turnpike Bonds
- At Treasurer Meacham’s urging, the Oklahoma Turnpike Authority refinanced its debt during a time of low interest rates to realize a total savings of $40.6 million.
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