HomeMy WebLinkAboutFS 2010-09-08 Item 2D - Report - Investment ReportTO:
City of Tukwila
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance and Safety Committee
FROM: Peggy McCarthy, Deputy Finance Director
DATE September 1, 2010
SUBJECT: June 30, 2010 Quarterly Cash Investment Report
ISSUE
BACKGROUND
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 March
31, 2010 and was presented at the May 18, 2010 Finance and Safety Committee meeting.
The City invests its funds with the goal of maximizing return while preserving principal and
ensuring sufficient liquidity to meet the City's operating needs. As of June 30, 2010, the City's
cash and investment portfolio comprised a bank depository account, an investment pool, a
money market account, certificate of deposits, and government agency notes. Since the last
reporting period, a $1,000,000 1.68% certificate of deposit matured and a $2,000,000 agency
note was purchased. The agency note has a three year term with a 6 month call date of
December 10, 2010 and a current interest rate of 1% stepping up to 2% in the second year and
3.25% in the third year.
The portfolio remains diversified in terms of both security type and financial institution. The
Local Government Investment Pool (LGIP) operated by the Washington State Treasurer's office
constitutes the highest concentration of both investment type and financial institution with 55%
of the portfolio invested in the pool at the report date still well within the 75% allowed by the
investment policy. Certificates of deposit at 33% of the portfolio represent the second largest
concentration by security type. Sound Community Bank is the financial institution holding the
second highest percentage of City funds, after the State Treasurer, with $7 million or 17% of the
portfolio. This concentration is also within the 50% limit prescribed by the investment policy. All
banks holding City funds are members of the Public Deposit Protection Commission (PDPC)
and, pursuant to PDPC regulations, fully collateralize deposits of public funds.
The June 30, 2010 portfolio average yield was .78 a slight improvement over the March 31,
2010 average yield of .76 and better than the benchmark 90 day treasury rate of .16% but still
very low historically
The portfolio balance has remained relatively level from quarter to quarter. It increased from
$39,817,919 at December 31, 2009 to $40,470,883 at March 31, 2010 and to $42,161,947 at
June 30, 2010. A schedule showing the cash and investment balances held by each fund and
fund group (i e., general, special revenue, debt service, etc), at June 30, 2010 is included as an
attachment to this memorandum.
27
INFORMATIONAL MEMO
Page 2
DISCUSSION
Interest rates, already low, dropped in the second quarter of 2010 and the yield curve flattened.
The 6 month, two -year, five -year and ten -year treasury yields fell from .24 1.06 2.60 and
3.86% at March 31, 2010 to .21%, .59 1.77 and 2.95% at June 30, 2010. As mentioned in
the first quarter investment report, strategies to mitigate this low interest rate environment have
been to 1) invest a high percentage of the portfolio in short maturity instruments until rates
improve, 2) invest additional LGIP funds in higher yielding short term, fixed rate instruments, 3)
explore investment alternatives, and 4) revise the City's investment policy allowing investment
of a small percentage of the portfolio in longer term investment to take advantage of the higher
yields at the end of the yield curve.
The revised investment policy was sent to the Washington Municipal Treasurers Association for
review and certification on July 12, 2010. The review remains in- process.
RECOMMENDATION
No recommendation, for Committee information only.
ATTACHMENTS
Cash and Investment Report as of June 30, 2010
Cash and Investment Balances by Fund and Fund Group at June 30, 2010
Combined Cash Investment Balances By Month, January to June 2010
Yield curve at 3- 31 -10, 6 -30 -10 and 8 -25 -10
28 H: \Invst1201016 -30 -10 Investment Report\New Folder\InfoMemo Invstmnt Rprt 6- 30 -10, 9- 1- 10.docx
US Bank
Agency Issuer
CASH CASH EQUIVALENTS
Washington State Local
Government Investment Pool
Sound Community Bank
LONG -TERM INVESTMENTS
First Savings Bank Northwest
Sound Community Bank
Charter Bank
US Bank
Sterling Bank
Sound Community Bank
Federal Home Loan Bank
Federal Home Loan Bank
Investment Tyoe
Depository
Investment Pool
Money market
TOTAL CASH, CASH EQUIVALENTS INVESTMENTS
CITY OF TUKWILA
CASH INVESTMENT REPORT
June 30, 2010
Purchase
Deposit
Date
Various
Maturity
Date
Various
(b)
Various
(a) To maturity even though call date may occur first; maturity of liquid investments is one day
(b) No fixed maturity, funds are available within one day
(c) Annualized return based on purchase price and yield to maturity
(d) Call date is 12/23/10.
(e) Call date is 12/10/10; interest rate steps to 2% in year 2 and 3.25% in year 3.
(a)
Term Purchase
(months) Price
03 1,555,894 1,555,894 0 00%
03 23,246,081 23,246,081 0 30% 69,738
03 500,000
03
Certificate of Deposit 05/01/2009 05/01/2011 24 2,000,000 2,055,860 2.50% 50,000
Certificate of Deposit 05/20/2009 04/20/2011 23 1,500,000 1,536,532 2.22% 33,330
Certificate of Deposit 05/26/2009 05/26/2011 24 1,500,000 1,532,528 1 98% 29,700
Certificate of Deposit, 02/15/2010 02/15/2013 36 3,450,000 3,468,375 1 44% 49,680
compensating balance
Certificate of Deposit 02/16/2010 08/16/2011 18 250,000 251,101 1.20% 3,000
Certificate of Deposit 03/04/2010 03/04/2011 12 5,000,000 5,012,487 0 99% 49,500
US agency 03/23/2010 12/23/2013 (d) 36 1,000,000 1,000,000 2.08% 20,800
US agency 06/10/2010 6/10/2013 (e) 36 2,000,000 2,000,000 1 00% 20,000
Weighted Average Maturity Months
25,301,975 25,305,064 0.28% 71,238
25 16,700,000 16,856,883 1.53% 256,010
10 $42,001,975 $42,161,947 0.78 %l $327,248
1'
Blended Tukwila rate
Investment Mix
Depository
State Investment Pool
Money market
Certificate of Deposit
US Agency
Book Yield to Annualized
Balance Maturity Return (c)
503,089 0 30% 1,500
Benchmarks At 6/30/10
90 -day treasury rate 0 16%
6 -month treasury rate 0.21%
State Pool rate 0 30%
of Total
3 7%
55 1%
1.2%
32.9%
7 1%
100 0%
29
30
Fund Group
Fund Name
Cash
E uivalents
Investments Grand Total
General
General Total'
Special Revenue
101
103
104
105
107
109
Special Revenue, Total
Debt Service
Debt ServiceTotal
Capital Project 301
302
303
Capital ProjectTotal
Enterprise 400
401
402
404
405
411
412
Fiduciary Total
Grand Total
CITY OF TUKWILA
CASH INVESTMENT REPORT
June 30, 2010
Cash Investment Balances By Fund and Fund Group
000 GENERAL
HOTEL /MOTEL TAX
STREET
ARTERIAL STREET
CONTINGENCY
FIRE EQUIP CUM RESERVE
DRUG SEIZURE FUND
207 LIMITED TAX G O. BONDS 1999
208 LIMITED TAX G 0 BONDS 2000
209 LIMITED TAX G O. BONDS 2003
210 LIMITED TAX G.O. REFUNDING 2003
211 LIMITED TAX G O. REFUNDING 2008
LAND ACQ. REC PARK DEVLPMNT
FACILITY REPLACEMENT
GENERAL GOVERNMNT IMPROVEMENTS
304 FIRE IMPACT FEES
UTILITY ON ACCT (overpayments)
WATER
SEWER
WATER /SEWER REVENUE BONDS
BOND RESERVE
FOSTER GOLF COURSE
SURFACE WATER
Enterprise Total
Internal Service 501
502
503
Internal Service Total
Fiduciary 611 FIREMEN'S PENSION
640 AGENCY FUND
EQUIPMENT RENTAL
INSURANCE
INSURANCE LEOFF
825,358
269,702
652,968
805,558
802,518
247,886
3,6,9911
118,267
133,945
(3,914)
71,715
(74,699)
245;314
2,187,817
2,073,625
363,610
145,423
4,770,474
13,184
1,063,189
1,417,101
135,566
393,547
142,065
860,351
4,025,004 'r
2,604,004
2,912,261
1„323,689
6,839,954
1,485,298
129,309
1,614,607
$25,305,064 $16,856,884
4,205,720 1,109,163 5,314,883
4,205,720 1,109,1 '5,314,883
102,436 927,794
194,628 464,330
4,322,875 4,975,843
81,735 887,293
802,518
10,217 258,103
.4,711 8,315,88.1
118,267
133,945
(3,914)
71,715
(74,699)
245,314'
2,027,482 4,215,300
2,073,625
363,610
145,423
2,027,482' 6,797,956
13,184
3,980,867 5,044,056
204,997 1,622,098
135,566
393,547
0 142,066
1,104, 995 1,965, 347
5,290,860 9,315,863
1,000,000 3,604,004
2,512,492 5,424,753
204,997 1,528,686
3,717,489 10, 557,443
1,485,298
129,309
1,614,607
42,161, 947
Special Revenue 8,740,179
W 101 921,687
103
104
105
107
109
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
Debt Service
207
208
209
210
211
Capital Project
301
302
303
304
Enterprise
400
401
402
404
405
411
412
Internal_Service
501
502
503
CITY OF TUKWILA
CASH INVESTMENT REPORT
June 30, 2010
Combined Cash Investment BALANCES BY MONTH, January to June 2010
A--
JAN FEB
Row Labels JAN
General 3,935,260
000 3,935,260
655,941
5,217,829
885,663
801,951
257,108
(40, 284)
(27,536)
71,551
(39,055)
(24,067)
(21,176)
6,837,548
4,399,753
2,075,050
347,556
15,190
_10,102,215
9,658
5,598,247
1,675,759
262,070
393,547
129,439
2,033,496
9,732,063
3,423,487
4,916,918
1,391,657
Fiduciary 1,548,349
611 1,436,388
640 111,961
Grand Total 40,855,330
MAR
FEB
3,826,629
3,826,629
8,448 543
904,52
378,263
5,220,678
885,834
802,121
257,120
135,494
13,225
92,000
7,752
16,320
6,198
6,712,858_
4,256,879
2,074,906
364,957
16,116
10,301,874
10,634
5,688,511
1,712,635
4,150
393,547
102,858
2,389,539
9,894,238
3,492,044
4,979,377
1,422,817
1.554,931
1,437,915
117,016
40,874,568
APR
MAR
2,413,254
2,413,254
8,857,321
961,314
398,453
5,552,566
885,989
802,232
256,766
163,440
38,398
24,536
36,446
41,080
22,980
W _6,686,776
4,232,251
2,074,844
363,563
16,119
10,864,367
11,159
5,642,665
1,879,002
31,866
393,547
104,643
2,801,485
9,945,333
3,363,840
5,128,996
1,452,497
1,540,391
1,438,192
102,199
40,470,883
MAY JUN
APR
4,567,026
4,567,026
8,435,946
910,043
417,899
5,163,115
886,139
802,382
256,368
348,278
62,847
116,711
64,314
65,127
39,279
6,576,181_
4,141,657
2,074,368
342,190
17,966
10, 640, 752
10,847
5,618,118
1,811,025
84,583
393,547
104,410
2,618,223
10,356,050
3,608,628
5,272,045
1,475,377
1,547,087
1,435,460
111,626
42,471,319
MAY
General
Special Revenue
e Fiduciary
--X- Debt Service
Capital Project
Service
Enterprise
6,446,060
6,446,060
8,842,642
978,466
440,293
5,478,828
886,328
802,346
256,381
462,971
90,988
124,748
96,391
92,805
58,039
6,700,075
4,T65,027
2,074,448
349,136
111,464
10,215,457
12,474
5,242,383
1,818,210
137,299
393,547
154,947
2,456,597
10,569,876
3,688,073
5,383,104
1,498,699
_1,5_91213
1,485,786
105,427
$44,828,295
JUN
5,314,882
5,314,882
8,315,881
927,794
464,330
4,975,843
887,293
802,518
258,103
245,314
118,267
133,945
(3,914)
71,715
(74,699)
6,797,956
4,215,300
2,073,625
363,610
145,423
9,315,863
13,184
5,044,056
1,622,098
135,566
393,547
142,066
1,965,347
10,557,443
3,604,004
5,424,753
1,528,686
1,614,607
1,485,298
129,309
$42,161,946
31
32
Today's Yield 03/31/2010
4.5
3.5
4.5
4
3.5
1.5
0.5
4.5
4
4
3.5
3
2.5
2
1 .5
0.5
0
-&--6 -6 AC"
Today's Yield 06/30/2010
3
2.5
2-
0
1. '5 <5
2/26/2010
Today
5/28/2010
Today
0
-4S
J
Today's Yield 08/25/2010
7/23/2010
Today