North Carolina's former chief investment officer Pat Gerrick, who used to oversee the state's pension fund, has an unusual connection to Horsley Bridge Partners, a San Francisco investment firm where the pension fund invested $225 million, since 2007.

Carolina Journal reports that Pamela Joyner is an executor of Gerrick's will. Gerrick previously described the two as friends. Joyner's husband, Alfred Giuffrida, is a managing director of Horsley Bridge Partners.

The firm received almost $1.5 million in fees from the pension fund in 2007 and 2008, the paper reports.

Gerrick was fired in August amid questions about travel reimbursements from third parties and cell phone bills. In a statement released to the news media two weeks ago, she also acknowledged that investors who did business with the state contributed to Family House, a hospitality and support center for critically ill patients in Chapel Hill where Gerrick previously served on the board.

A bill meant to change the way cities and towns annex property owners is headed back to committee.

The bill was drafted in response to long-festering anger over municipalities' ability to annex property owners against their will.

The proposed bill leaves neither municipalities nor annexation opponents happy.

"It must be a pretty good bill if everybody is upset," said Rep. Bruce Goforth, an Ashville Democrat and co-sponsor of the bill.

Good bill or not, Rep. Mickey Michaux, a Durham Democrat and senior budget writer in the House was afraid it would be an expensive bill.

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More than $18 million in federal economic stimulus money has been approved for water projects in the Triangle and surrounding counties, State Treasurer Janet Cowell announced today.

The Local Government Commission, headed by Cowell, signed off on $18.6 million in spending. The money is administered by the state Department of Environment and Natural Resources.

More than 70 projects have been approved statewide totaling $83.3 million as part of the American Recovery and Reinvestment Act of 2009.

The loans are interest-free to local governments and only half of the principal amount has to be repaid.

Projects include $5 million for a water treatment system in Johnston County and $465,735 to install rain water harvesting systems at 12 locations in Raleigh.

State Treasurer Janet Cowell wants Congress to improve the structure of 529 College Savings Plans and increase participation by low- and moderate-income families.

Cowell has urged adoption of legislation that will help families save for college and allow for more flexibility in managing investments in the 529 plans. The Savings Enhancement for Education in College Act would extend the SAVERs Credit to college savings accounts as well as retirement plans, thereby encouraging low- and middle-income families to save.

It also would allow 529 plans to pay for computer equipment and would allow families to adjust their investment allocation more than once a year.

"This bill would give families more flexibility to respond to market conditions and allow 529 plan investment changes twice a year," Cowell said in a statement. "Additionally, by extending the tax credit families will have more incentive to save for their children's future."

Richard Moore says the state's pension fund is solid.

In an interview with the N&O, the outgoing state treasurer said the state's portfolio dropped from $72.3 billion in value at the end of June to $65.9 billion as of Sept. 30.

The portfolio secures pension funds for nearly 900,000 people in the state and local government retirement system, Rob Christensen reports.

"State pensioners should not be concerned about their checks," Moore said. "We will finish this year in an overfunded status. We will be one of the top-performing pension plans in the country this year. But we have lost money. We have lost a lot."

Because the state has long had a conservative investment policy — about half the assets are in fixed-income investments such as bonds — the state's losses were far less dramatic than in many investment funds.

The state pension fund was down 12 percent for the year ending Sept. 30, compared with the S&P 500, which was down 24 percent, Moore said.

North Carolina is one of three states — the others are New York and Connecticut — where an elected state official has sole responsibility for investment of the state's pension fund.

Cabinet members oversee more money than the Council of State.

A review of the 2007-08 budgets for the 10 appointed members of the governor's Cabinet show that they typically oversee larger budgets than the 10 statewide elected officials.

Only the departments of Public Instruction, Justice and Agriculture come close, and the superintendent of public instruction does not have similar authority over that department as a Cabinet official.

The smallest Cabinet budget was larger than all but three of the Council of State budgets.

Public Instruction: $9.5 billion

Justice: $121.7 million

Agriculture: $98.4 million

Treasurer: $38.5 million

Insurance: $36.2 million

Labor: $25.3 million

Auditor: $15.9 million

Secretary of State: $11.9 million

Governor: $6.7 million

Lieutenant Governor: $914,122

As before, the figures include money received from both state and federal sources. As a major player in the state budget, it goes without saying that the governor has more authority over state spending than these numbers indicate.

The revised numbers for 2008-09 are not yet available.

State Sen. Janet Cowell tried to use her Senate office to get a Dell lobbyist to help fix a campaign worker's laptop, according to a former Cowell Senate staffer.

The line-crossing between the campaign and the taxpayer-funded senate office was one of several examples of apparently inappropriate coordination between the two operations.

Sherry Johnson, who resigned from Cowell's senate office in February after complaining about demands from the campaign, said Cowell called last winter and asked another Senate staffer, Cindy Garrison, to contact a Dell lobbyist to help repair or replace a campaign worker's laptop.

Cowell said the campaign worker was a North Carolina resident who she was trying to help. Cowell initially said she asked for the lobbyist's phone number but then said she didn't remember if she asked the Senate staffer to call. Garrison said she vaguely remembered the exchange but was certain she did not call a lobbyist and may have called Cowell back to ask if the instructions were correct.

"This is another of those fine lines," Cowell said. "This was someone who had trouble with a laptop, and I knew someone who might be able to help and the (phone) number resided on a database in the office."

Johnson agreed that Garrison did not call any of the lobbyists because Johnson intervened on her behalf, calling Cowell about the request.

"I could not get it to resonate with her that the entire request was inappropriate from top to bottom," Johnson said. "I told her to remember the rule that if it's something you don't want on the 11 o'clock news or on the front page of the newspaper, then don't do it. And then it registered with her."

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Richard Moore says the Federal Reserve is welcome to borrow from North Carolina.

In an appearance on CNBC, the Democratic state treasurer said Wednesday that the state's public pension fund would be willing to lend money — at the right price — to try to boost liquidity in the banking industry.

"I'd like to think that Hank Paulson has been as creative as possible. I've got a solution for you this morning, Becky," Moore told the channel's Becky Quick.

If the Congress is not willing to loan this money, if the Fed will give me a guaranteed rate of return — 7, 8 percent — I'll loan them the money, and I think there are a lot of pension plans across the country that would loan money to the federal government at that kind of rate. And I'll give him the fire power he needs to settle this out.

Moore described the heart of the problem as banks being unwilling to loan to each other.

"We really do have a real problem if banks can't trust each other, particularly with short-term trading, so we do need a solution to this and we need it quickly," he said. "But boy, that's easier said than done in our society, isn't it?"

Moore spokeswoman Sara Lang told Dome Thursday that the idea of lending to the Federal Reserve is still only a hypothetical. 

The credit shortage is having an impact on the state's monthly debt payment.

Sara Lang, spokeswoman for the State Treasurer's Office, said Wednesday that the variable interest rates on about $855 million in state debt have gone up the last two weeks. Those rates are now almost five-fold what they were two weeks ago.

For about $500 million, the rate was 1.68 percent two weeks ago. It went up to 4.57 percent a week ago and to 7.58 percent this week.

For about $355 million, the rate was 1.58 percent two weeks ago. It went up to 4.46 percent a week ago and to 7.49 percent this week.

Lang said the difference in the monthly debt payment will be about $1.4 million more than it would have been if the rates had stayed the same. The state budget assumes a 4 percent interest rate, she said, blunting any immediate impact on taxpayers.

"We continue to be hopeful that, if a federal solution presents itself, the markets will settle down and these rates will settle down," Lang said. "We'll continue to watch the situation very closely."

The $855 million in variable-rate debt is about 12 percent of the state's total debt.

Lang said there has been no impact yet on the sale of any state bonds. The last sale was Aug. 12 for $200 million to finance various state construction projects. Lang said another sale is not expected until the spring.

Attorney General Roy Cooper says information about the pensions of state employees should be made available to the public after all.

Cooper's office this afternoon released a letter it sent to state Sens. Tony Rand and David Hoyle about questions that have surfaced in the past week over public access to government pension information.

The questions started after the State Treasurer's Office, which oversees the state retirement system, said it could not release information on the pension of state Rep. Thomas Wright, a Wilmington Democrat who is facing criminal fraud charges, becauses of a recent change in state law. The office cited an opinion by the Attorney General's office saying the information should not be released.

But lawmakers who worked on the bill, which dealt primarily with a different public records issue, said they never intended to close access to such information. So Rand and Hoyle asked Cooper to take another look at the issue.

He did, and concluded that, "Such information, upon request, should be made available for inspection and copying."

Cooper, in a separate statement, said, "North Carolina has some of the strongest public records laws in the nation, and the interpretation of those laws should favor openness.”