Seminole sues clerk of courts over control of millions in investments

A simmering feud between Seminole County commissioners and the clerk of courts over who controls the investment of hundreds of millions of dollars is headed to court.

Clerk of Courts and Comptroller Grant Maloy, who was elected last year, has asserted that his job includes making the day-to-day investment decisions on as much as $460 million in surplus county funds.

Commissioners say he’s wrong and unanimously voted last month to file a lawsuit against him in hopes a judge will side with them.

“Mr. Maloy is very full of himself as far as this is concerned,” commission Chairman John Horan said at a recent meeting. “I’m exhausted working with Mr. Maloy on this issue. … I don’t trust him. I just don’t

trust the man.”

Maloy shot back, saying his duties include providing independent oversight of how the county invests its money. But commissioners want to strip him of that role by hiring an Orlando investment firm to help them handle the task.

“They’re hiring a company to take over my job, and I don’t have any say in the matter,” said the former county commissioner who took office in January. “I don’t think the citizens of Seminole County will stand for that. It takes over the checks and balances. And I’m not going to roll over.”

Under state law, counties are required to set up a basic investment policy for their surplus funds.

Most property taxes are paid between November and March, and much of that tax revenue is held as “surplus” by the clerk of the courts office until the county draws from it throughout the year to pay expenses via bank checks from the clerk’s office. Surplus funds must be invested to earn income for the public’s benefit before being spent.

In 1995, Seminole delegated the responsibility of investing surplus funds based on the county’s investment policy to the clerk of the courts office.

At the time, Maryanne Morse, who was first elected in 1988, was the clerk. After she announced she would retire at the end of her most recent term, Seminole commissioners in May 2016 said they planned to take over the financial investment responsibility this year.

But Maloy refused to give up control and hired an Orlando investment firm shortly after taking office to assess the county’s investment policy.

He said investment decisions within a year garnered the county about $4 million in interest.

“We’re doing a good job,” he told commissioners. “This is more interest revenue to the taxpayers than we’ve had in years. … Our changes outperformed what the county told us to do.”

In an effort to wrest control of investments, commissioners last month voted to hire Public Trust Advisors, an Orlando firm, to provide financial recommendations to the board and direct the “day-to-day” investment decisions of the county’s surplus funds.

The contract calls for paying Public Trust $60,000 a year for three years.

Maloy tried to preempt that move.

Eight days before commissioners agreed to hire Public Trust, an attorney representing Maloy’s office sent letters to Public Trust Advisors and the other three firms that applied for the work, saying the clerk of courts can’t pay for their services or acknowledge their financial direction regarding the surplus funds.

Furious county commissioners then agreed to file the lawsuit.

“I’m not sure how we got here,” Commissioner Brenda Carey said. “I tried very hard. I think we’ve all tried very hard to work together. … So if we just can’t agree, then somebody else is going to have to make that call. … It’s a shame that it’s come to this.”

Handling investments constitutes a “dramatic conflict of interest” for Maloy because he also is in charge of auditing county spending, County Attorney Bryant Applegate said.

In Orange County, the elected comptroller — with the guidance of a fivemember committee — oversees and makes day-today investment decisions on $1.8 billion in county funds.

In Lake, the Clerk of Courts office also serves as comptroller and handles investment decisions of about $146 million in funds based on recommendations from a six-member advisory team.

Seminole Commissioner Lee Constantine urged his fellow board members to come to an agreement with Maloy rather than sue.

“I would implore both sides to take a deep breath, get out of themselves, and realize that we serve the people of Seminole County,” he said. “We all need to take a step back and find a reasonable solution before we make all the lawyers happy and we go to court.”

Maloy said he’s willing to work with the county.

“This is an issue about control,” he said. “And this [lawsuit] is going to be a huge waste of tax money, and I think it’s unnecessary. It seems to me quite silly to get involved in a lawsuit and a waste of money.”