On Nov. 15, the two top officials in charge of Orange County’s tax dollars met by phone and decided on a radical move.
They withdrew all $370 million the county had invested in a state-run money market fund that for 25 years had been considered one of the safest bets for local government investments.
Orange County was not the only entity to suddenly get skittish about the safety of the Local Government Investment Pool. Within a month, they would become part of an unprecedented run on the bank that cut the pool in half from roughly $28 billion to $13 billion.
The fund’s meltdown threatened to leave some government bodies without the tax dollars needed to provide services and write paychecks.
It led to the resignation of the state administrator who oversaw the fund, and some government officials have speculated that the fund could disappear altogether if confidence is not restored.
The story of how Florida experienced what may have been one of the largest bank runs since the Great Depression is a cautionary tale for similar government-run funds nationwide.
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Matthew Doig 