SAN FRANCISCO — Despite a challenging environment for public funds investors, most California county investment pools continue to manage their funds conservatively, according to a Standard & Poor’s research survey released this week.

The survey found that, on the whole, the investment pools are maintaining slightly longer average maturities and bond durations in the face of historically low federal funds rates. Longer durations bring potentially higher rates of return, but also increased volatility, said the report’s author, analyst Gabriel Petek.

“On balance we view the county investment pools as posing relatively little risk to local agency credit quality despite uncertainty regarding the direction of interest rates,” he said in a news release.

The health of the investment pools is important, according to Standard & Poor’s, because they are vehicles in which local governments and agencies invest idle funds, including bond and note proceeds.

Therefore, S&P usually surveys the pools at this time of year, when many agencies are issuing tax and revenue anticipation notes to smooth out their annual cash flows. Proceeds from such Tran sales are typically invested in the county investment pools.

“We therefore view the condition of the county investment pools as relevant to the Trans, many of which we rate,” the report said.

The role of the pools in the operation of local governments came into sharp focus with the 1994 Orange County bankruptcy filing, sparked when risky investments by the county pool backfired, impacting local governments, agencies, and school districts that had invested in the pools.

“Results from our annual and event-driven periodic surveys suggest to us that most California county investment pools manage their assets conservatively and that legislative reforms put in place following the 1994 Orange County bankruptcy continue to mitigate instances of significant risk taking,” the Standard & Poor’s report said.

The report, released Wednesday, is titled “California County Investment Pools Weather Uncertain Interest Rate Environment.”

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