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City of Tukwila <br />Allan Ekberg, Mayor <br />INFORMATIONAL MEMORANDUM <br />TO: Mayor Ekberg <br />Finance and Safety Committee <br />FROM: Peggy McCarthy, Finance Director <br />BY: Vicky Carlsen, Deputy Finance Director <br />DATE: June 14, 2017 <br />SUBJECT: First Quarter 2017 Cash & Investment Report <br />ISSUE <br />The first quarter Investment Report is included with this memorandum and is discussed below. <br />BACKGROUND <br />City funds are invested to earn a reasonable return while preserving principal and allowing <br />sufficient liquidity to meet the City's operating needs. To achieve these objectives investments <br />are diversified by type, by financial institution, and by maturities in compliance with the City <br />Investment Policy. <br />DISCUSSION <br />Portfolio Components <br />As of March 31, 2017, the portfolio totaled $93.266 million comprised of $78.660 million in cash <br />and cash equivalents and $14.606 million in longer term investments. The portfolio balance <br />decreased by $66 thousand from a December 31, 2016 balance of $93.332 million. Details on <br />individual fund activity is provided below in the Fund Cash & Investment Balances section. <br />In January, the City purchased two agencies of $1 million each. One agency was placed in the <br />general fund and the other was placed in the public safety plan fund. Additionally, in March an <br />agency of $2 million was purchased and placed in the contingency fund. No investments matured <br />or were called during the first quarter of the year. We continue to look for investments where the <br />interest rate exceeds the rate the City receives with US Bank. <br />Portfolio Performance <br />The portfolio weighted average yield on March 31, 2017, was 0.87 %. Considering the portfolio's <br />weighted average maturity was 0.5 years, and the yields on the cash & cash equivalent accounts <br />was 0.69 %, the portfolio yield of 0.87% is still favorable. The total yield has been sustained by <br />the 3.98% average yield on the municipal bond investments, the 1.3% average yield on the <br />agencies, the 1.35% yield on the certificate of deposits, and the 0.45% earnings credit on the US <br />Bank depository account. <br />Investment income received through the end of March 2017 for all investments is $31,002 against <br />an annual budget of $270,809. It should be noted that a significant portion of investment interest <br />is received from agencies and municipal bonds, which is received twice a year rather than <br />monthly. <br />Not included in the portfolio is interest earned from the operating and capital loans to the MPD. <br />The operating loan is being repaid on a monthly basis and will be paid in full by May 2023. Interest <br />W <br />