The money man

If Bill Melton had been a morning person, he might be a sportscaster today. That was his first love — and job — after his graduation from the University of Texas in 1964. But the hours at a radio station in New Braunfels, Texas, left something to be desired.

“I suddenly realized going on at 5:45 a.m. was not what I wanted to do,” says Melton, who nonetheless keeps his hand — or voice — in the business by serving as the public address announcer for Southern Methodist University. (He is also the former p.a. announcer for the Dallas Cowboys.) But Melton’s affinity for his snooze alarm has been a boon to the residents of Dallas County, Texas, whom he serves as county treasurer and whose tax dollars he carefully tends.

Given the scrutiny under which city and county treasurers have operated since the Orange County, Calif., bankruptcy, Melton’s dedication to his job and protection of Dallas County taxpayer dollars have earned him American City & County’s 1995 County Leader of the Year award.

Despite his success at it, however, the job was not something he would have predicted for himself. “I had never felt I would hold elected office,” says Melton, who previously worked as a chamber of commerce administrator and later managed shopping centers and apartment complexes. Still, he is now in his fifth term and has run for office unopposed three times. “I thought I would speak my mind to the point that I might not get elected again. But the taxpayers have seemed to like that,” he says.

STRETCHING A DOLLAR

Since Melton took office in 1977, the amount of money he handles has increased 3,393 percent (from $458 million to $16 billion). Very little of that, however, is due to higher taxes. And despite the numbers, Melton describes the county’s budget as “frugal.” He has kept it that way by instituting innovative cost savings programs to pay for county services. Those programs have been widely emulated by other counties.

Melton’s first step was to install a computer system. In 1977, ledger postings were recorded on a 1940s-style Burroughs machine, and transactions took up to two minutes each. Melton requested money to fund a long-range computerization plan.

“If you’re going to manage money in this day and time, you simply can’t take chances,” he says. So the treasurer’s office developed and built a customized program that could interface with the county mainframe and the Dallas County’s depository bank to allow electronic investments. Encoding machines also were purchased to speed the handling of a steadily increasing number of transactions.

The machines allowed deposited checks to be encoded daily and routed directly for investment.

Savings of $.03 per check add up to $60,000 annually. And, what was once a two minute transaction now takes only 20 seconds.

Then, in 1989, faced with a prisoner housing cost of $50 per prisoner per day and state funding of only $20, Melton had five ATMs installed in Dallas County buildings and jails.

The ATMs allow non-felons to bail themselves out of prison, saving the county a night of housing costs. “Say someone runs a red light on a Saturday night. He’s not drunk, but a check shows outstanding traffic tickets. Most people don’t carry around the amount of bail,” Melton explains. Thus far in fiscal year 1995, about 1,500 withdrawals have amounted to $73,000 in the county’s coffers.

Another Melton innovation, the county’s juror fee donation program, which enables jurors to donate their fees to the county to help area youth, has also been widely copied. Since 1990, Dallas County jurors have donated $1.1 million for use by the county’s juvenile department, which gives 10 percent annually to the Foster Parent’s Association for holiday gifts, food and clothing.

In 1994, 35 percent of jurors contributed, helping more than 1,000 youngsters. This year, when the legislature sought to use the donated funds to compensate crime victims, Melton fought it, ultimately winning an exemption from the law for programs existing before Jan. 1, 1995.

Yet another Melton battle, one he has fought for five years, may create further savings for the county. As current chair of the National Association of Counties’ (NACo) Taxation and Finance Steering Committee — he is the first treasurer to hold the position — Melton has pursued obtaining non-profit postal status for essential county mailings. “We don’t understand why we must pay for government mandated mailing at bulk first class,” Melton says. Non-profit status “would save $.05-$.06 per mailing,” according to task force member Alfred Lomeli. If the post office awarded mailings such as jury duty notification — the discount given to “junk” mail — Melton thinks counties could see substantial savings.

MAKING A BUCK

Penny pinching helps stretch county budgets, but the rest is made up in cautiously managed investments. Under Melton’s leadership, the NACo Taxation and Finance Committee helped author a response to the Orange County, Calif., crash. Melton calls the loss of more than $700 million to a failed investment policy “regrettable” and says counties need written policies naming investment officers.

However, “all officials become responsible if a policy fails. If the government body suffers, taxpayers suffer,” Melton says. “And you can’t issue a policy statement that will guarantee [failure] won’t happen in the future.” Though the NACo policy can be applied to all U.S. counties, Melton is quick to point out “the management of funds is a state and local issue, not a federal issue.”

Still, Dallas County is different from Orange County on several policy points. While the Texas legislature is in the process of strengthening investment procedures, California state law pools the money of all taxing entities with the county treasurer. More importantly, Melton says, “In Texas, we don’t borrow for the purpose of investment.” Orange County’s investment of choice — derivatives — is an “unknown factor,” he says. “Derivatives have gotten a bad name. They can be managed, but the county official should be very knowledgeable.”

As the county’s chief investment officer, Melton takes competitive bids daily and has contracts with 16 brokers. The average investment has a current 101-day portfolio. In general, Melton invested in short-term instruments during the rising economy of the past two years.

That investment strategy also originated with Melton. Previously, funds were managed by a different office that invested about 98 percent of taxpayer dollars primarily in bank CDs. Melton has boosted that figure to 102 percent by investing on the flow of money.

Counting money out only when checks are actually presented lets the unclaimed dollars (the 2 percent above what is available on the books) “float.” Those funds are reinvested daily. A similar policy pays for non-budgeted benefits to the county. The treasurer’s office is charged with “holding” money that does not belong to the county — money tied up in court costs, for example.

Rather than employ a clerk to calculate and reimburse the interest earned by the money in holding, the office earns bank credits that benefit all taxpayers, who are freed from paying for encoding overhead or on-line bank services. The credits on $15 million-$18 million annually exceed $1 million per year.

LOBBYING THE LEGISLATURE

In 1977, when Melton was appointed to serve out the previous treasurer’s remaining three months, interest earnings were less than $1 million. By building a program based on safety first and earnings second, the county reached an earnings high of $31.7 million in 1989.

In his 18 years in office, Melton has earned Dallas County $300 million, twice that earned by all other Dallas County treasurers in the previous 131 years. In 1987, NACo named the Dallas County cash management program the nation’s top program in governmental fiscal management.

The investment opportunities Dallas County has taken advantage of would not have been available had Melton not successfully suggested legislation to the state house in Austin. “Bill’s creativity in getting legislation through in Austin has allowed counties to broaden and be more flexible in investing,” says Vincent Matrone, Dallas County’s financial advisor. “At a time when banks were withdrawing from the market, he kept the county at the forefront of activity.”

One piece of that legislation allows the county treasurer to be paying agent/registrar for all county bond issues, eliminating fines for agents and reducing the cost of bond printing.

“I have a lot of confidence in Bill’s handling of Dallas County’s financial affairs,” says Nancy Buschmann, senior vice president of NationsBank Texas, the current Dallas County depository bank.

“He’s certainly innovative and proactive in initiating legislation and getting sponsors to update and modernize state laws,” she says. “Money is non-political,” Melton says of his success. “I work actively within my party, but where management of money is concerned, it stops at the door. The legislature and the county treasurer’s office both want what’s best for the taxpayers. It doesn’t matter who’s a Democrat or a Republican.”

BEYOND DALLAS COUNTY

Melton’s dedication extends further than Dallas County’s two million residents. “Bill Melton represents the very best in political statesmanship and stewardship,” says Earle Morris, chairman of the Government Accounting Standards Advisory Council (GASB). As vice chairman of the council in 1994, Melton displayed the “dignity and demeanor of a classic gentleman to help us get through some difficult, confrontational issues,” he says. “Bill is not a compromising person in his convictions. He is a problem solver.”

During his tenure as president of the County Treasurer’s Association of Texas from 1982-83, Melton helped enhance the office of county treasurer. To help treasurers better serve their constituency, he worked with the V.G. Young Institute at Texas A&M University in College Station, to create a curriculum for the continuing education of county treasurers.

Melton found sponsorship for a bill that required 20 hours of continuing education every two years or removal from office. When the legislature resisted on the grounds of cost, Melton argued that no new money would be required because continuing education funds were already budgeted for the Institute.

Then, as president of the National Association of County Treasurers and Finance Officers (NACTFO) in 1988-89, Melton helped extend this effort to create a national continuing education program.

Additionally, for the past 15 years, Melton has chaired the Dallas County U.S. Savings Bonds drives, and in 1994, then-Secretary of the Treasury Lloyd Bentsen tapped him to run the national campaign. Dallas County has twice received the national award for outstanding campaign. “We have no volunteer in any place in the nation with the prestige or longevity that Bill has,” Dallas-Southwest Region bond coordinator Don Carter says. “He writes letters, makes speeches, goes places; he does everything we ask him. I can’t conceive of anyone more dedicated.”

Occasionally, Melton is able to combine his roles as civil servant, civic leader and sports announcer. Eight years ago, then-mayor Annette Strauss asked Jim Graham to co-chair the effort to bring World Cup Soccer to Dallas.

“At the time there were very few people who were helpful or cared about bringing this event to Dallas,” Graham says. “One of those who beat the drum and patted me on the back when I felt down was Bill Melton. It wasn’t politically in’ to jump on the bandwagon, but Bill was one of the first to do so. And he said, ‘If we’re going to go after it, then we should win it.'” In 1994, Melton announced the World Cup games at the Cotton Bowl.

But Melton’s enthusiasm for bringing the World Cup to Dallas is equalled by his enthusiasm for all things Dallas. Taxpayers may benefit from his careful shepherding of their finances, but the entire community benefits from his offwork activities, which include participation in numerous charities.

“I’m proud to know him,” says Bobby Leach, who currently serves on the Dallas County Treasurer’s Public Advisory Board. “If everyone ran his county like Bill, we’d be better off.”