News Column

New money team for Sandoval County

July 12, 2014

By Rosalie Rayburn, Albuquerque Journal, N.M.

July 12--Sandoval County has had a shake-up in its financial management.

From Thursday on, the county's longtime financial adviser and investment portfolio manager, Rob Burpo of First American Financial Advisors, will serve in only one capacity.

Burpo will continue as financial adviser to the county commission and administration. Denver-based Public Trust Advisors, a company recently hired by County Treasurer Laura Montoya, will oversee the county's $15 million investment portfolio.

The county has had contracts with Burpo since 1999 to perform both functions. But in light of problems Bernalillo County has had with its investment strategy, County Manager Phil Rios said he was concerned about a conflict of interest if the same person managed the county's investment portfolio and was financial adviser for the administration and the commission, which acts as the county board of finance.

"You can't work for the treasurer and the board of finance because, if there's a conflict like in Bernalillo County, then who does he work for? That's what I was trying to avoid," Rios said in an interview on Friday.

Bernalillo County has sold investments at a $15.7 million loss this year as part of an effort to restructure its portfolio, and Bernalillo County Commissioners have been strongly critical of County Treasurer Manny Ortiz over his investment strategy.

Interviewed Friday, Burpo said he has had ongoing disagreements with Montoya since she took office in January 2013 and no longer wanted to manage the Sandoval County portfolio.

Rios said he issued a request for proposals in March for the adviser job and signed a new contract with Burpo in April for that work. Rios said he wanted to end the portfolio management contract at the same time but held off because the treasurer said she needed more time to find a new portfolio manager.

Rios said he and Burpo mutually agreed on Thursday to end his portfolio management duties.

On Thursday evening, the commission met as the board of finance, where they heard a report from Montoya. She expressed frustration over her communications with Burpo related to transferring $5.5 million held by LPL Financial, a firm Burpo represents, to New Mexico Bank and Trust as part of a bond refinancing deal. Montoya questioned a $25,000 difference between the balance on the account and the final amount transferred by LPL Financial.

After the meeting, Montoya told reporters that Burpo had liquidated the assets without communicating with her.

"That's not the way of doing business when you are dealing with this type of liquidation," she said, adding that she should have had the opportunity to explore other options without incurring losses.

Rios said he would look into the details of the transaction. He said refinancing the deal Burpo arranged to refinance the bond debt will save the county $3 million by 2020.

Burpo believes Montoya did not understand the effect a change in interest rates had on the bond value.

"Markets go up and down -- that's it," Burpo said. "She's never quite understood the fact that interest rates have a direct impact on your investment portfolio. That's going to happen."

Burpo said he strongly disagrees with the analysis Montoya presented to the commission this week. He will present a report to the commission within a few weeks.

"We're going to dig into this a little deeper and see what exactly went on. I get a feeling that things are not right," Commissioner Don Chapman said on Friday.


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Source: Albuquerque Journal (NM)

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