JIM DOYLE
Governor
Read and referred to committee on Transportation and Tourism.
State of Wisconsin
Office of the Governor
August 27, 2008
The Honorable, The Senate:
I am pleased to nominate and with the advice and consent of the Senate, do appoint Malecki, Andrew,
of Green Bay, as a member of the Snowmobile Recreation Council, to serve for the term ending July 1, 2011.
Respectfully Submitted,
JIM DOYLE
Governor
Read and referred to committee on Transportation and Tourism.
State of Wisconsin
Office of the Governor
August 27, 2008
The Honorable, The Senate:
I am pleased to nominate and with the advice and consent of the Senate, do appoint Thornton, Thomas,
of Grand View, as a member of the Snowmobile Recreation Council, to serve for the term ending July 1, 2011.
Respectfully Submitted,
JIM DOYLE
Governor
Read and referred to committee on Transportation and Tourism.
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State of Wisconsin
Investment Board
July 17, 2008
The Honorable, The Legislature:
Pursuant to 25.17 (14r), Stats., I want to advise you of revisions to SWIB's “Investment Policies, Objectives and Guidelines" approved by the Board of Trustees during the first six months of 2008. These guidelines apply to SWIB's internal investment managers. I am sending you electronic copies of the revised guidelines plus a red-lined copy that shows the language added or deleted. In summary, these changes:
1. Narrowed authorized investments in which the State Investment Fund (SIF) may invest. Although it does not hold such investments, SIF was authorized to invest in Canadian government bills and notes, some derivatives and certain asset backed and mortgage backed securities. With the primary objective of the SIF being safety of principal, SWIB staff did not believe these instruments were appropriate in the current market environment. Staff requested, and the Board approved, a narrowing of the guidelines investments considered most appropriate for the SIF.
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2. Added guidelines and soft parameters for the newly created US Russell 1000 passive index portfolio, which is managed internally. After receiving increased budget and position authority, SWIB created this portfolio as one of several initiatives to reduce investment costs. Funds are being moved from external managers and will be managed with internal staff. Currently, this portfolio is managing approximately $1 billion, but plans are to move more assets in-house until the portfolio reaches nearly $12 billion.
3. Amended guidelines for the Local Government Property Insurance Fund (LGPIF) to permit investments in individual fixed income securities. Prior to enactment of
2007 Wisconsin Act 170, the law only permitted SWIB to invest LGPIF assets in SIF.
4. Clarified that a US equity portfolio may invest up to 10% of the portfolio's market value in international and emerging market companies that are traded on an exchange located in a developed country. These investments are subject to the Freedom House and Index of Economic Freedom restrictions that apply to all investments in non-US countries.
5. Granted discretion to the Wisconsin private equity portfolio staff to hold or sell a company's stock that becomes publicly traded. The authority applies to shares the portfolio received through a distribution or holds because the company went public.
6. Added the 2008 asset allocation targets and made a few other non-substantive clerical corrections.
The reporting requirements in the statues appear to only apply to internal management and not to contracts we initiate with external managers or changes we make to existing contracts. However, because of the growth of assets managed by external managers over the past few years, we decided in 2006 to inform you of any new contracts with external managers or changes to existing contracts. In keeping with that decision, we want to advise you that we amended the contracts for a global fixed income portfolio and a treasury inflation protection security (TIPS) portfolio to provide the external manager latitude on counterparty ratings and to remove the statutory references to the use of derivatives. SWIB made these changes to further diversify its holdings.
If you have any questions on any of the changes, please contact me at 266-9451 or Sandy Drew at 261-0182.
Sincerely,
Keith bozarth
Executive Director
Referred to committee on Veterans and Military Affairs, Biotechnology and Financial Institutions.
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State of Wisconsin
Department of Health Services
August 13, 2008
The Honorable, The Senate:
The Department of Health Services is pleased to submit to you and the Legislature the Immunization Program Legislative Report for State Fiscal Year 2008. The attached report is required by Wisconsin Statute s.
252.04 (11).
Wisconsin continues to attain high preschool immunization levels and maintains a state of the art immunization registry. HIghlights of the Immunization Program include:
• Attaining an estimated immunization level of 80.6% for series complete among preschoolers, ranking Wisconsin in the top 15 states in the nation;
• Maintaining and improving the Wisconsin Immunization Registry (WIR), an information system that stores, tracks, recalls and assesses immunization information;
• Maintaining parental access to the WIR as part of Governor Doyle's Kids First Initiative;
• Providing a record $40.6 million in federally funded vaccines to Wisconsin's children in SFY 2008;
• Promulgating administrative rules changes to the Student Immunization Law to require adolescent Tdap and varicella (chickenpox) vaccines in selected grades and pnuemococcal vaccines in day care centers; and
• Maintaining strong collaborative efforts with both public and private sectors throughout the state in implementing the WIR and other immunization initiatives.
These successes help Wisconsin to achieve high immunization levels. The Department is committed to ongoing efforts that will continue to ensure that our children are safe from vaccine-preventable diseases.
Sincerely,
Karen e. timberlake
Secretary
Referred to committee on Health, Human Services, Insurance, and Job Creation.
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State of Wisconsin
Investment Board
August 15, 2008
The Honorable, The Legislature:
Attached is our quarterly report (Attachment A) listing all expenses that were charged directly to funds managed by the State of Wisconsin Investment Board (SWIB or the Board). This report includes expenses incurred during the quarter ending June 30, 2008. Section
25.17 (13m), Stats., requires that we provide this report on a quarterly basis.
The statutes authorize the Board to employ special legal or investment counsel in any matter arising from the scope of our investment authority and to employ professionals, contractors or agents to evaluate or operate any property in which the Board has an interest. The Board may also contract with external advisers to manage various types of investments. Expenses for these services are directly charged to the current income of the fund for which the services were furnished.
This report lists expenses on an accrual basis, which lists costs when they are incurred rather than paid. Providing the information on a n accrual basis gives a better picture of quarter to quarter trends in services that are directly charged to the funds. A negative charge typically indicates an adjustment to expenses accrued in a prior quarter or a refund of expenses that were prepaid and subsequently adjusted.
Attachment A lists all expenses by category. The following highlights changes from the previous quarter:
• Private equity fees increased $5.5 million during the second quarter. Of that amount, approximately $3.2 million was for expenses associated with new commitments. Real estate costs decreased by $337,000 from the first quarter of 2008. The total funded amount for each asset class has reached the 5% asset allocation target.
• Custodial fees decreased slightly during the second quarter. Because of the lower fees that SWIB negotiated with the custodian in 2007, fees for calendar year 2008 are expected to be less than 20% of the fees paid during calendar year 2007.
• Costs for investment counsel were slightly lower for the second quarter but are expected to be somewhat higher for the entire calendar year.
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• Indexed and enhanced commingled fund fees increased slightly during the quarter primarily due to a payment of BYN Mellon for managing assets when transitioned between managers or strategies. Assets managed in enhanced commingled funds decreased by approximately $1.5 billion in the second quarter, reflecting market effects and a further shift of assets to less expensive internal management. Active external investment management fees increased by $500,000 in the second quarter due to several accrual adjustments and corrections.
Attachment B provides further explanation about the various expenditure categories. Attachment C includes legal expenses that were capitalized at the time of acquisition or directly associated with the ongoing activity of an asset, such as appraisals or bankruptcy costs. Unlike other expenses listed in the report, these expenses are reflected in the value of the asset or are netted against gross returns of the asset, consistent with standard industry practices.
Attachment D shows the amount and percent of Wisconsin Retirement System (WRS) assets managed internally and externally over the last four quarters. For the fifth consecutive quarter, the percentage of total assets managed internally increased, while externally managed assets decreased. This shows the result of the increased staff and budget authority, which is allowing SWIB to manage more assets internally and reduce the use of more expensive external management.
We hope this report gives you a clear picture of expenditures and how funds are managed. Please contact me, however, if you have any questions or comments about the report.
Sincerely,
Keith Bozarth
Executive Director
Referred to committee on Veterans and Military Affairs, Biotechnology and Financial Institutions.
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State of Wisconsin
Department of Administration
August 19, 2008
The Honorable, The Legislature:
Included with this correspondence, I am submitting the reports from the Department of Administration, Division of Gaming (Gaming), for the fourth quarter of fiscal year 2008 (April 1, 2008 through June 30, 2008). As required by s.562.02(1)(g), Wis. Stats., the attached materials contain pari-mutuel wagering and racing statistical information, as well as the revenues for the program areas of Racing, Charitable Gaming, Bingo and Indian Gaming.
If you have any questions or comments regarding this report, please do no hesitate to contact Rachel Meek at (608) 270-2535.
Sincerely,
Robert W. Sloey
Administrator
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