HomeMy WebLinkAboutFS 2010-03-02 COMPLETE AGENDA PACKET1. PRESENTATION(S)
2. BUSINESS AGENDA
City of Tukwila
Finance and Safety
Committee
O De'Sean Quinn, Chair
O Allan Ekberg
O Kathy Hougardy
Item
a. City Investment Report;
Shawn Hunstock, Finance Director.
b. Sales Tax Report;
Shawn Hunstock, Finance Director.
AGENDA
TUESDAY, MARCH 2, 2010
CONFERENCE ROOM #3; 5:00 PM
Action to be Taken Page
a. Information only. Pg.1
b. Information only. Pg.5
Next Scheduled Meeting: Tuesday, March 16, 2010
Distribution: D. Haynes J. Pace
D. Quinn S. Hunstock D. Speck
A. Ekberg M. Hart R. Still
K. Hougardy S. Kerslake D. Tomaso
D. Robertson K. Kertzman M. Villa
Mayor Haggerton T. Kinlow Judge Walden
S. Lancaster K. Matej B. Arthur
C. O'Flaherty M. Miotke C. Parrish
S. Brown G. Labanara K. Narog
J. Ferrer -Santa Ines D. Lincoln S. Kirby
B. Giberson N. Olivas S. Norris
Committee Goals:
Work together in cooperation with nearby cities to address common problems in the Highway 99 corridor and Military
Road.
Ensure a commitment to continued human services funding in relation to the cost of living through consistent review
of regional, state and federal budgets affecting human services progams and services (also assigned to CAP).
Research the viability of sponsoring a City -wide Citizens' Academy (also assigned to CAP).
I The City of Tukwila strives to accommodate individuals with disabilities.
Please contact the City Clerk's Office at 206 433 1800 for assistance.
TO:
FROM: Peggy McCarthy, Deputy Finance Director
DATE: February 22, 2010
SUBJECT: City Investment Report as of December 31, 2009
ISSUE
BACKGROUND
DISCUSSION
City of Tukwila
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance and Safety Committee
Jim Haggerton, Mayor
Finance Policy and Procedure 03 -17, Investment Policy, calls for quarterly investment reports to
the Council Finance and Safety Committee. The report is to contain an inventory of investments
on hand and a summary of performance. The last report covered investments held on August
31, 2009 and was presented at the September 22, 2009 Finance and Safety Committee
meeting.
The City's investments have undergone a substantial change over the last two years. In the
summer of 2007, an average U.S. government agency investment, such as Fannie Mae or
Freddie Mac, could be purchased with a 5.25% yield. Currently such investments earn less than
1%, depending on the maturity. The intent of this memo is to provide some background on the
changes in the City's investment portfolio, and a review of the current holdings.
The current mix of City investments includes cash equivalents, certificates of deposits, and a
federal agency note. Cash equivalents are highly liquid, very safe investments which can be
easily converted into cash or have a maturity date of 3 months or less at the date of purchase.
The City's largest cash equivalent holding is in the Local Government Investment Pool (LGIP).
The City's investment in the LGIP totaled about $28 million at December 31, 2009. The LGIP is
an investment pool operated by the Washington State Treasurer. Every county, and all cities
over 10,000 in population, participate in the LGIP. It provides a measure of security, liquidity and
return that most cities find convenient to utilize. An attempt has been made to move more
money out of the LGIP given the return on that investment. The LGIP earned 5.3% in August
2007. As of December 2009, money in the LGIP was earning 0.20
Some of the money moved out of the LGIP was invested in certificates of deposit to earn a
better return. These deposits are insured by the Washington State Treasurer's Public Deposit
Protection Commission (PDPC). In early 2009, the PDPC changed their rules to require 100%
collateralization by participating banks and credit unions. This level of collateralization insures
100% recovery of public funds on deposit or invested with participating institutions.
The current portfolio also includes a government agency investment, a Federal Home Loan
Bank note with a yield of 2.3 The government agency investment is in bonds, rather than
equity. Equity investment in government agencies has seen a dramatic decline in value over the
last year or two, but agency debt carries the implicit guarantee of the U.S. government. The
INFORMATIONAL MEMO
Page 2
investment rating of these bonds (AAA) is a signal of the security offered by a government
backed guarantee.
A year ago, the City's portfolio included several investments yielding over 3.0 Since that time
all the higher interest rate investments either matured or were called. At December 31, 2009,
the weighted average interest rate on long -term investments ranged from 1.45% to 2.50% with a
weighted average yield on the entire portfolio of .65 Although this rate is low, it measures
favorably against the City's benchmark for performance, the 90 day Treasury bill rate, which
was .06% on December 31, 2009. Reinvesting the money has been a challenge due to the low
interest rates now being offered. The general consensus is that we are close to, if not at, the
bottom of the investment yield curve, meaning interest rates have more than likely dropped to
their lowest level and experts are now predicting a recovery sometime within the next year or
two.
An update to the City's investment policy is in the works. In addition to other changes, the new
policy will use additional yield benchmarks, such as the 6 month T -bill rate, LIBOR and other
indices to measure the City's investment performance. The policy will also contain a provision
for investing in instruments with a longer maturity of five to ten years for a small portion, less
than 20 of the investment portfolio. When the market turns down, having a portfolio with
some longer -term investments provides a better return than a portfolio with mostly shorter -term
investments. It can be shown over the long -run that the City's cash position never falls below a
certain dollar amount. A portion of this long -term cash balance should be invested longer term
to maximize return on the City's money. Security and liquidity are two cornerstones of public
investing, but the third characteristic, return, should be maximized to the extent possible within
the security and liquidity constraints.
RECOMMENDATION
No recommendation, for Committee information only.
ATTACHMENTS
Investment Portfolio Summary
Yield Curve graph at February 9, 2010
Agency New Issues listing at February 9, 2010
W: \2010 InfoMemos \Investment Review 12- 31- 09.docx
Agency Issuer
CASH EQUIVALENTS
Washington State Local
Government investment Pool
Money market
Sound Community Bank
LONG INVESTMENTS
US Bank
First Savings Bank
Sound Community Bank
Charter Bank
Sound Community Bank
Federal Home Loan Bank
TOTAL
(a)
Term
Investment Type (months)
Investment Pool
Certificate of Deposit
compensating balance
Certificate of Deposit
Certificate of Deposit
Certificate of Deposit
Certificate of Deposit
US agency
(b)
Investment Mix
State Investment Pool
Money market
US Agency
Certificate of Deposit
Purchase
Date
Various
24 5/1/2009
23 5/20/2009
24 5/26/2009
12 6/15/2009
6 8/25/20
City of Tukwila
Investment Portfolio Summary
As of December 31, 2009
Maturity Call
Date
(b) Various (b)
12 1/31/2009 1/31/2010
511/201
of Total
73.6
1.3%
2.6%
22.4%
100.0%
4/20/20
5/26/2
6/15/20
2/25/2010
Purchase
Price Balance
(b) 27,911,605
500,000
Interest
Credited to Interest
Account Accrued
2,168
Fair Market
Value
Adjustment
2,500,000 2.50%
2,000,000 30,860 2,030,860 2.22%
1,500,000 19,633 1,519,633
1,500,0 17' 1 980!0
1,517,6
F 1.68%
1,000,000 8,453 1,008,453 2.30%
8,060 3,200 1,010,560
999,300 9,587 ,183 1.97%
60 3,200 76,001,914 0.65% 37,910,905 78,791 8,0
Blended Tukwila gate
At 12 -31 -09 At 2 -3 -10
Benchmarks p.06 °!0 0.10 °!0
90 -day treasury rate
6 -month treasury rate 0.20% p.17%
0.25%
State Pool rate 0.33%
(a) To maturity or call date, whichever rthdr occurs
at par at any
time. 2/23/2010 8:44 AM
A. No maturity; funds may
N/A. ise \InfoMemo Investment Review 12 -31 -09 Attachment Portfolio.xlsx 2/23
(b) C: \temp \XPGrp
Ba
at
Market
Yield to
Maturity
27,911,605 0.20%
502,168 0.33%
28,413,773 0.20%
2,500,000 1.44%
0
AC"
Today's Yield
Agency New Issues
"It is better to know some of the questions than all of the answers."
James Thurber
Treasury Mkt. 2y, 3y, 5y, 10y 0.88 1.47 2.45 3.79 2/22/10
Issuer Coupon Maturity Call Date Type Stepup cpn Settlement
FFCB 1.2 3/1/2012 3/1/2011 Anytime 3/1/2010
FHLB 1.1 3/16/2012 3/16/2011 Onetime 3/16/2010
FHLB 1.6 9/17/2012 9/17/2010 Anytime 3/17/2010
FHLB 1.625 12/17/2012 3/17/2011 Onetime 3/17/2010
FHLMC 1.875 3/15/2013 9/15/2010 Onetime 3/15/2010
FHLB 2 3/18/2013 6/18/2010 Anytime 3/18/2010
FHLB 1 3/18/2013 6/18/2010 Quarterly 1.5 3/18/2010
FNMA 2 6/10/2013 3/10/2011 Onetime 3/10/2010
FHLMC 2 6/10/2013 6/10/2010 Onetime 3/10/2010
FHLB 2.2 9/10/2013 12/10/2010 Anytime 3/10/2010
FHLB 1.375 9/17/2013 6/17/2010 Quarterly 2 3/17/2010
FHLB 2.125 9/17/2013 3/17/2011 Onetime 3/17/2010
FFCB 2.5 3/3/2014 6/3/2010 Anytime 3/3/2010
FHLB 2 3/17/2015 6/17/2010 Quarterly 5 3/17/2010
FHLB 3.75 3/17/2017 3/17/2011 Anytime 3/17/2010
FHLB 3 8/24/2018 5/24/2010 Quarterly 5 2/24/2010
FHLB 4.25 3/18/2020 3/18/2013 Anytime 3/18/2010
FHLMC 4.25 2/25/2025 8/25/2010 Quarterly 5.5 2/25/2010
FHLMC 5 3/17/2025 3/17/2011 3/17/2010
Keith R Peterson 800-357-0252 206- 443 -7252
Kelly M Devlin 800- 357 -0247 206- 443 -7247
TO:
City of Tukwila
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance and Safety Committee
FROM: Shawn Hunstock, Finance Director
DATE: February 23, 2010
SUBJECT: Sales Tax Revenue for December 2009
Schedule I
in 1,000's
Sales Receipt 2008 2009 2009 Increase /(Decrease) %Increase /(Decrease)
Month Month Actual Estimated Actual Month YTD Month YTD
Jan Mar 1,347 1,403 1,172 (231) (231) 16.46% 0.00%
Feb Apr 1,357 1,397 1,051 (346) (577) 24.77% 20.61%
Mar May 1,601 1,654 1,146 (508) (1,085) 30.71% 24.36%
Apr June 1,365 1,497 1,191 (306) (1,391) 20.44% 23.37%
May July 1,635 1,560 1,082 (478) (1,869) 30.64% 24.88%
June Aug 1,646 1,757 1,217 (540) (2,409) 30.73% 25.99%
July Sept 1,535 1,661 1,473 (188) (2,597) 11.32% 23.76%
Aug Oct 1,555 1,647 1,118 (529) (3,126) 32.12% 24.86%
Sept Nov 1,426 1,685 1,110 (575) (3,701) 34.12% 25.95%
Oct Dec 1,298 1,521 1,032 (489) (4,190) 32.15% 26.55%
Nov Jan 10 1,265 1,589 1,140 (449) (4,639) 28.26% -26.71%
Dec Feb10 1,723 2,175 1,690 (485) (5,124) 22.30% 26.22%
Totals 17,753 19,546 14,422
Mitigation Received 1,589
16,011 81.91% of Budget Incl. Mitigation
Jim Haggerton, Mayor
Sales tax collections showed the sixteenth consecutive decrease in December compared to the
same period in the prior year. For 2009, collections were less than both budget and the same
month in the prior year. Actual receipts for December 2009 were $485,000 less than budget,
and $33,000 less than the same period last year. We are now down 26.22% for the year
compared to budget, and 18.76% compared to the same period last year.
The chart above also includes the mitigation payment we received at the end of December for
the third quarter of 2009. Including the mitigation payment, we are currently at 81.91% of budget
for the year to date. The mitigation payment we received on December 31s was $311,528.15.
This was an increase of 42.4% from the $218,797.89 we received for the same quarter last
year.
Schedule II shows the year -to -date sales tax from the top ten industry classifications. As this
schedule indicates, the trend is flat or down for all of the classifications.
INFORMATIONAL MEMO
Page 2
Schedule II
Group Name
452* General Merchandise Stores
448* Clothing and Accessories
423* Wholesale Trade, Durable Goods
722* Food Services, Drinking Places
443* Electronics and Appliances
441 Motor Vehicle and Parts Dealer
451* Sporting Goods, Hobby, Books
444* Building Material and Garden
453* Miscellaneous Store Retailers
721* Accommodation
Mitigated NAICS Code
As you can see there are large variances from last year for the same time period. For instance,
sales tax for Motor Vehicle and Parts Dealer is down by 30.88 Miscellaneous Store Retailers
is down by 29.82 and Wholesale Trade and Durable Goods is down by 24.65 As you can
see from Schedule II, all of the top ten merchant categories have declined versus prior year,
and all ten industry classification codes are ones for which we receive streamlined sales tax
mitigation.
Schedule III shows the ten largest declines in sales tax revenue for industries with over $10,000
collected through December.
Schedule III
Group Name
236 Construction of Buildings
323* Printing and Related Support
334* Computer and Electronic Produc
339* Miscellaneous Manufacturing
442* Furniture and Home Furnishings
314 Textile Product Mills
238 Specialty Trade Contractors
522 Credit Intermediation
541 Professional, Scientific, Tech
441* Motor Vehicle and Parts Dealer
Mitigated NAICS Code
YTD YTD Dollar
Current Prior Diff. Duff.
2,044,042 $2,231,745 (187,703) -8.41%
2,015,184 2,101,593 (86,409) -4.11%
1,339,565 1,777,808 (438, 243) 24.65%
1,291,855 1,309,329 (17,474) 1.33%
954,375 1,077,238 (122,864) 11.41%
686,478 993,146 (306,668) 30.88%
589,522 644,522 (55,000) -8.53%
506,177 619,645 (113,468) 18.31%
506,005 721,034 (215, 029) 29.82%
453,657 548,962 (95,305) 17.36%
YTD YTD Dollar
Current Prior Diff.
416,992 $1,302,567 (885, 576)
59,298 143,009 (83,711)
19,797 44,162 (24, 364)
10,665 22,411 (11,745)
350,625 621,785 (271,160)
12,852 22,660 (9,807)
347,910 530,490 (182,580)
41,901 63,568 (21, 667)
227,255 338,302 (111, 048)
686,478 993,146 (306,668)
Attached is a Sales Tax Summary comparing year -to -date 2009 vs. 2008 by major NAICS
codes. Also included is a comparison of total receipts year -to -date for the last four years.
Please let me know if you have any comments or questions. Thank you.
W:1FIN Projects\Sales Tax Information\Sales Tax Files from Shawn1200911nfo Memo Sales Tax 022210.docx
Diff.
67.99%
58.54%
55.17%
52.41%
43.61%
43.28%
-34.42%
34.08%
32.82%
30.88%
NAICS CONSTRUCTION 08 TOTAL
236 Construction of Buildings 1,302,567
237 Heavy Civil Construction 130,624
238 Specialty Trade Contractors 530490
TOTAL CONSTRUCTION 1,963,680
Overall Construction Change from Previous Year
MANUFACTURING
311 Food Manufacturing
312 Beverage Tobacco Products
313 Textile Mills
314 Textile Product Mills
315 Apparel Manufacturing
316 Leather Allied Products
321* Wood Product Manufacturing
322* Paper Manufactunnq
323* Printing Related Support
324 Petroleum Coal Products
325 Chemical Manufacturing
326 Plastic Rubber Products
327* Nonmetallic Mineral Products
331 Primary Metal Manufacturing
332 Fabricated Metal Mfg Products
333 Machinery Manufacturing
334' Computer Electronic Products
335 Electric Equipment, Appliances
336 Transportation Equipment Mfg
337' Furniture Related Products
339' Miscellaneous Manufacturing
TOTAL MANUFACTURING
08 TOTAL
4,997
2,328
1,050
22,660
215
9
9,515
21,545
143,009
9,630
8,068
4,085
5,242
52
6,310
-8,777
44,162
895
191,525
31,384
22,411
520,315
Overall Manufacturing Change from Previous Year
TRANSPORTATION 8 WAREHOUSING 08 TOTAL
481 Air Transportation 0
482 Rail Transportation 1,935
484 Truck Transportation 965
485 Transit and Ground Passengers 11,502
488 Transportation Support 28,728
491 Postal Services 88
492 Couriers Messengers 476
I 493' Warehousing Storage 781
TOTAL TRANSP WHSING S 44,475
Overall Transportation Change from Previous Year
WHOLESALE TRADE 08 TOTAL
423' Whls Trade Durable Goods 1,777,808
424* Whls Trade Nondurable Goods 113,096
425' Wholesale Electronic Markets 2,805
WHOLESALE TRADE TOTAL 1,893,709
Overall Wholesale Change from Previous Year
Sales Tax Mitigation NAICS Codes
02/23/2010
SALES TAX SUMMARY
December 2009 (Received in February 2010)
YTD
08 YTD 09 YTD Diff
1,302,567 416,992 -68.0%
130,624 98,105 -24.9%
530,490 347,910 -34.4%
1,963,680 863,006
($1,100,674) -56.1%
YTD
08 YTD 09 YTD Diff
4,997 1,173 -76.5%
2,328 3,070 31.9%
1,050 259 -75.3%
22,660 12,852 -43.3%
215 59 -72.5%
9 7 -18.2%
9,515 2,701 -71.6% I
21,545 20,392 -5.4% I
143,009 59,298 -58.5% I
9,630 8,157 -15.3%
8,068 6,368 -21.1%
4,085 3,928 -3.8%
5,242 2,279 -56.5%
52 534 920.8%
6,310 3,789 -39.9%
-8,777 5,586 -163.6%
44,162 19,797 -55.2% I
895 137 84.7%
191,525 135.430 -29.3%
31,384 8,575 -72.7% J
22,411 10.665 -52.4% I
520,315 305,059
($215,255) -41.4%
YTD
08 YTD 09 YTD Diff
0 0 0.0%
1,935 924 -52.3%
965 3,294 241.2%
11,502 11,105 -3.4%
28,728 21,879 -23.8%
88 0 100.0%
476 149 -68.7%
781 1,051 34.5%
44,475 38,401
($6,074) -13.7%
YTD
08 YTD 09 YTD Diff
1,777,808 1,339.565 -24.7%
113,096 105.260 -6.9%
2,805 2,208 -21.3%
1,893,709 1,447,033
($446,676) -23.6%
NAICS AUTOMOTIVE 08 TOTAL
441' Motor Vehicle Parts Dealer 993,146
I 447' Gasoline Stations 73,034
TOTAL AUTOMOTIVE 1,066,181
Overall Automotive Change from Previous Year
NAICS
442*
443'
444*
445*
446'
448'
451'
452'
453*
454*
51X Information
52X Finance Insurance
53X Real Estate, Rental, Leasing
541 Professional, Scientific, Tech
551 Company Management
56X Admin, Supp, Remed Svcs
611 Educational Services
62X Health Care Social Assistance
71X Arts Entertainment
72X' Accommodation Food Svcs
81X Other Services
92X Public Administration
TOTAL SERVICES
MISCELLANEOUS 08 TOTAL
000 Unknown 1,147
111 -115 Agriculture, Forestry, Fishing 1,095
211 -221 Mining Utilities 19,574
999 Unclassifiable Establishments 35,837
MISCELLANEOUS TOTAL 57,652
Overall Miscellaneous Change from Previous Year
Page 1
RETAIL TRADE
Furniture Home Furnishings
Electronics Appliances
Building Material Garden
Food Beverage Stores
Health Personal Care
Clothing Accessories
Sporting Goods, Hobby, Books
General Merchandise Stores
Miscellaneous Store Retailers
Nonstore Retailers
TOTAL RETAIL TRADE
SERVICES
08 TOTAL
621,785
1,077,238
619,645
88,317
146,841
2,101, 593
644,522
2,231,745
721,034
116.347
8,369,066
Overall General Retail Change from Previous Year
08 TOTAL
570,706
75,585
403,851
338,302
1,902
167,119
12,727
109,308
106,515
1.858,292
192,450
843
3,837,599
Overall Services Change from Previous Year
08 TOTAL
GRAND TOTALS $17,752,678
Grand Total Change from Previous Year
YTD
08 YTD 09 YTD Diff
993,146 686,478 -30.9%
73.034 62.584 -14.3%
1,066,181 749,063
($317,118) -29.7%
08 YTD 09 YTD Diff
621,785 350,625 -43.6%
1,077,238 954,375 -11.4%
619,645 506,177 -18.3%
88,317 86,349 -2.2%
146,841 189,603 29.1%
2,101,593 2,015,184 -4.1%
644,522 589,522 -8.5%
2,231,745 2,044,042 -8.4%
721,034 506,005 -29.8%
116,347 209,564 80.1%
8,369,066 7,451,446
($917,620) -11.0%
YTD
08 YTD 09 YTD Diff
570,706 528,044 -7.5%
75,585 53,850 -28.8%
403,851 412,907 2.2%
338,302 227,255 -32.8%
1,902 985 -48.2%
167,119 123,115 -26.3%
12,727 47,324 271.8%
109,308 91,637 -16.2%
106,515 93,799 -11.9%
1,858,292 1,745,512 -6.1% I
192,450 183,887 -4.4%
843 32,268 3727.6%
3,837,599 3,540,583
($297,016) -7.7%
08 YTD
1,147
1,095
19,574
35,837
57,652
08 YT D
$17,752,678
YTD
09 YTD Diff
397 -65.4%
221 -79.8%
14,549 -25.7%
12331 -65.6%
27,499
($30,154) -52.3%
YTD
09 YTD Diff
$14,422,090
($3,330,587) 18.76%
[UK Sales Tax Rpl 200912.xisn,
2006
Four Year Comparison
$17,847,929
$5,000,000 $10,000,000 $15,000,000
Taxes Collected Year to Date
$20,000,000