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INFORMATIONAL MEMO <br />Page 2 <br />earned on the operating loan through March 2017 is $3,610. The capital loan is being repaid <br />semi - annually and will be paid in full by December 2022. Interest accrued through March 2017 <br />is $5,215. Attached to the investment report are amortization schedules for both loans to the <br />MPD. <br />Policy Compliance and Liquidity Analysis <br />As of the end of the 1St quarter, the portfolio profile is well within the range of all the investment <br />policy parameters. There is currently a healthy mix of investments with a range of maturity dates. <br />Current investments allow for adequate cash flow requirements. <br />Fund Cash & Investment Balances Year over Year Comparison <br />Total fund cash and investments balances are $91.499 million, which is $40.495 million higher <br />than first quarter 2016. <br />The general fund total cash and investment balance is $6.712 million, which is $1.048 million <br />higher than March of 2016. Transfers of $546 thousand from the general fund into capital projects <br />funds for first quarter have not been recorded yet. Rather than transferring funds automatically, <br />we will be transferring funds into the capital projects funds as needed. <br />Special revenue funds all show a year- over -year increase. Over $460 thousand was transferred <br />to the contingency fund from the general fund per the City's minimum fund balance policy. <br />Additionally, the drug seizure fund received almost $539 thousand in seizure funds from the <br />federal government related to the motel seizure that occurred in 2013. <br />In November, voters approved a $77 million bond measure to fund public safety facilities and <br />equipment. The first debt issue occurred in December, increasing fund balance in the capital <br />projects funds group by $36.5 million. Fund 306, city facilities, currently shows a negative balance <br />of $40 thousand. Allocation of the project manager fees, SOJ, for the upcoming Public Works <br />Shops facility have been incurred. A funding source for these costs will be identified and included <br />in the budget amendment process later in the year. <br />Utility funds all have increases in fund balances from the prior year. <br />Investment Environment <br />The Federal Reserve raised interest rates in December 2016 and again in March 2017, signaling <br />rising confidence that the economy is poised for more robust growth. The overnight funds rate is <br />now at 1 % and sets the Feds on a likely path of regular hikes in the future. We have seen interest <br />rates increase in all our short -term investment vehicles. <br />Locally, the economy in King County remains positive. Employment grew by 3.4% in the fourth <br />quarter of 2016 relative to 2015, with continued growth in information jobs. Unemployment rate <br />for King County declined again, down to 3.4% in December 2016. Home prices continue to rise, <br />with a 10.4% increase since fourth quarter 2015. <br />The portfolio will continue to be managed to take advantage of investment opportunities as they <br />arise. <br />RECOMMENDATION <br />Presentation is for information only. <br />ATTACHMENTS <br />Cash and Investment Report <br />Policy Compliance & Liquidity Analysis <br />20 <br />