In 2002, Yolo County participated in the Pooled Tobacco Securitization Program administered by the California Statewide Financing Authority ("the Authority"). In accordance with U.S. Treasury regulations, all investments held in connection with the bonds are restricted by a universal cap, which essentially requires that the value of investments equals at least the value of outstanding bonds. After each semi-annual debt service payment (May and November), the bonds and investment holdings are revalued and any excess of investment value over bond value is de-allocated, that is, released back to the County for unrestricted use. In 2003, the Board of Supervisors approved an investment strategy for tobacco settlement receipts securitized in 2002 and directed the Chief Financial Officer (in role as Auditor-Controller) to make an annual report on the status of the endowment fund ("Demeter") and annuity fund ("Pomona") and recommend necessary adjustments to the investment strategy.

At the November 06, 2018 meeting, upon the Department of Financial Services' recommendation, based on revised long-term projections for the funds, the Board adjusted the investment strategy and the distribution of de-allocated funds (Att. B. Deallocated Funds Flow). In brief, the adjusted strategy called for annual transfers of $225,000 of de-allocated monies to the former Pomona Fund (now titled the Health & Human Services Emerging Needs Fund) and make $225,000 available from appropriations to fund these programs as determined by the Board until the year 2043. The balance of de-allocated monies is directed toward the continued buildup of the Demeter Fund so that it can generate a perpetual annuity of $300,000 beginning in year 2043.

The Department of Financial Services staff, together with Public Financial Management (as investment advisor), will continue to review financial models for availability of resources from de-allocated funds and update the Board when conditions change.