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Home My WebLink AboutFS 2014-06-17 Item 2C - Report - 2014 First Quarter Investment ReportTO: City of Tukwila Jim Haggerton, Mayo; INFORMATIONAL U��U��U� nn�n��n�u��n mw°�n�m��~ wwn�~nmw��m~mn��n�n Mayor Haggerton Finance and Safety Committee FROM: Peggy McCarthy, Finance Director BY: Vicky Carlsem, Deputy Finance Director DATE: June 11, 2014 SUBJECT: First Quarter 2014 Cash & Investment Report ISSUE The first quarter Investment Report is included with this memorandum and is discussed below. BACKGROUND City funds are invested to earn a reasonable return while preserving principal and allowing sufficient liquidity to meet the City's operating needs. To achieve these objectives investments are diversified by type, by financial institution, and by maturities in compliance with the City Investment Policy. DISCUSSION Portfolio Components At March 31, 2014, the portfolio totaled $44.7 million comprised of $37.8 million in cash and cash equivalents and $6.9 in longer term investments. The portfolio balance decreased by $1 .8 million from December 31, 2013 balance of $46.5 million. A major reason for the decrease in funds is because property tax collections are primarily received in 2nd and 4th quarters while general fund expenditures are spread fairly evenly throughout the year. Portfolio Performance The portfolio weighted average yield at year end was .41°/0. Considering the portfolio's weighted average maturity was 0.8 years, and the yield on the cash & cash equivalent accounts was .06q6' the portfolio yield of 0.41% is still quite favorable. The yield has been sustained by the 4.22% average yield on the municipal bond investments, the .35% yield on the certificate of deposits, and the .45% earnings credit on the US Bank depository account. Investment income through 1s` quarter 2014 for cash equivalents and certificates of deposits is $32,796 plus $37'000 of accrued municipal bond interest for a total of $70.396 against a prorated budget of $65,539. Not included in the portfolio is interest earned from the operating and capital loans to the MPD. The operating loan is being repaid on a monthly basis and will be paid in full by May 2023. Interest earned on the loan for the first quarter of 2014 is $5,167. The capital loan is being repaid semi-annually and will be paid in full by December 2022. Accrued interest for the first quarter of 2014 is $3,942. Attached to the investment report are amortization schedules for both loans to the MPD. 16 INFORMATIONAL MEMO Page 2 Policy Compliance and Liquidity Analysis As of the end of the 1st quarter, the portfolio profile is well within the range of all the investment policy parameters. There is currently a healthy mix of investments with a range of maturity dates. Current investments allow for adequate cash flow requirements. Fund Cash & Investment Balances The general fund balance shows a decrease of $1.0 million from December 31, 2013, primarily due to the timing of property tax collections. However, both the general fund and contingency funds show significant increases from March 2013 to March 2014. This is due to the sale of LID bonds that occurred in November 2013. Other fund balances were fairly stable with minimal changes. Investment Environment Interest rates continue to remain low and are expected to remain low through 2015. At this point, the Federal Reserve is still tying short-term interest rates to the unemployment rate and intends to maintain a zero-interest-rate policy until the economy strengthens. The portfolio will be managed to take advantage of investment opportunities as they arise. RECOMMENDATION Presentation is for information only. ATTACHMENTS Cash and Investment Report Policy Compliance & Liquidity Analysis Cash and Investment Balances by Fund Treasury Rates and Yield Curves W:\1Users\Vicky\Investment Report\Info Memo Investment Report 2014 01.docx CITY OF TUKWILA CASH & INVESTMENT REPORT March 31, 2014 (a) (c) (d) Rating Purchase Maturity Term Par Book Yield to Annualized Agency / Issuer Moodys Investment Type Date Date Yrs Value Balance Maturity Return CASH & CASH EQUIVALENTS US Bank Depository Various (b) $17,697,208 $17,697,208 (e) 12,888 .. 0.45% Washington State Treasurer LGIP Investment Pool Various (b) 5,929,409 5,929,409 (f) 1,610 0.1138% Columbia Bank Money market Various (b) 14,094,112 14,094,112 (f) 6,802 0.19% Total Cash & Cash Equivalents 37,720,728 37,720,728 0.06% 21,299 INVESTMENTS Certificates of Deposit Sound Community Bank Regal Bank CERTIFICATES OF DEPOSIT -- TOTAL Certificate of Deposit 3/4/2011 3/4/2017 6.0 3,000,000 3,127,788 1.40% 10,696 Certificate of Deposit 6/20/2012 12/20/2014 2.5 250,000 250,000 1.30% 801 5.7 3,250,000 3,377,788 0.35% 11,497 Taxable Municipal Bonds City of Marysville, sinking Al LTGO Refunding 11/23/2010 12/1/2017 5.5 535,000 573,252 3.37% 19,319 2014-2017, ave 5.5 years Washington State Convention Aa3 Lodging Tax Bonds 11/30/2010 7/1/2016 5.6 500,000 503,625 3.60% 18,130 Center Facility UW Biomedical Center Aal Revenue Bonds 12/14/2010 7/1/2017 6.6 500,000 503,724 4.05% 20,401 UW Biomedical Center Aal Revenue Bonds 12/14/2010 7/1/2019 8.6 500,000 504,038 4.70% 23,690 Douglas County, ESD, sinking Aal UTGO 12/23/2010 12/1/2020 8.9 1,135,000 1,149,825 4.55% 52,317 2018-2020, ave 9 yrs Port of Anacortes Al LTGO 12/17/2010 9/1/2020 9.7 340,000 330,855 5.00% 16,543 TOTAL MUNICIPAL BONDS 7.6 3,510,000 3,565,320 4.22% 150,400 Total Investments 6.7 6,760,000 6,943,108 2.33% 161,897 TOTAL CASH, CASH EQUIVALENTS & INVESTMENTS 1.0 $ 44,480,728 $ 44,663,836 I 0.41% $ 183,196 (a) On calleable bonds, term is calculated to final maturity even though call date may occur first; term of liquid investments is one day; on sinking fund bonds, average maturity is used to calculate term. (b) No fixed maturity, funds are available within one day. (c) Yield to Maturity represents average rate for the year for various investment vehicles. (d) Annualized Return represents actual earnings for the fiscal year for bonds. (e) Represents earning credit from US Bank. City earns interest up to the amount of fees. Municipal (f) Represents rate in effect for period ending this report. Bonds (g) Annualized Return represents actual earnings through current reporting period 8% Current Portfolio Yield Percent of Cash & Investment Portfolio Money Market 31% Cash 40% 17 CITY OF TUKWILA Policy Compliance & Liquidity Analysis CASH & INVESTMENT REPORT March 31, 2014 Liquidity Analysis & Maturity Diversification Funds immediately available Fixed Maturity Investments, maturing in: 0-90 days after Report Date n1-1ao days after Report Date Investments maturing in 1 year or less Investments maturing in 1-3 years Investments maturing in 3-5 years Investments maturing in 5-7 years Investments maturing in 7-10 years Investments maturing in more than 1 year and less than 10 years. TOTALS As of Repo Date Available Available Available in Portfolio Within 1 Year Within 5 5 - 10 Years Amount Years $ 37.720728 $ 37.720.728 $ 37,720,728 250,000 3,631,413 1,076,976 1,984,719 6,693,108 $ 44,663,836 Liquidity Requirements and Funds Available for Investing: Funds immediately available $ 37.720.72e Restrictions & designations: Operating liquidity (a) 14.000.000 Liquidity threshold 14,00.000 Funds available for longer term investing $ 23.720.728 Represents largest one month decline in portfolio balance over the most recent 36 month period doubled; or the equivalent of a 100% cushion. Portfolio POLICY Policy Financial Institution Diversification Amount % of Tota MAXIMUM Met? US Bank $ 17.697.208 39.6% 50.0% Yes Washington State Treasurer 5.e29.409 13.3% 75.0% Yes Columbia Bank 14.0e1.112 31am 50.0% Yes Sound Community Bank 3.127.788 7.0% 50.0% Yes Other financial institutions 3.815.320 8.5% 50.0% Yes (a) 250,000 250,000 3,631,413 1,076,976 1,984,719 85% 96% 5% Total $ 44,663.836 100.0% Portfolio POLICY Policy Investment Mix Amount r/0n/Total MAXIMUM Met? Depository 17,697,208 39.6m insured by PDPC Yes State Investment Pool 5,929,409 13.3% 75.0% Yes Money market 14.094.112 31.6% insured by PDPC Yes Certificate of Deposit 3.377.78e 7.6% insured by PDPC Yes US Agency - 0.0% 75.0% Yes Municipal Bonds 3.565.320 8.0% no/mnonoomaumn"nov Yes Total 44.663.836 100o% INSINENWZMINENENUMISMIENVICESSISESSIBINMSERMIENCOnstungsnowsuggiummeaggsgfigusamo Weighted Average Mommes Certificates of deposit Municipal bonds Total Investments Total Portfolio POLICY MAXIMUM Policy Met? Years 5.7 7.6 6.7 1.0 3.5 Yes Note: Cash and cash equivalents are available within one day and are factored into the Total Portfolio weighted average maturity. 18 Performance Analysis Current portfolio yield Benchmarks: 6 month treasury 2 year treasury Local Govt Invst Pool 0.41% 0.07% 0.44% CITY OF TUKWILA Cash & Investment Balances By Fund and Fund Group CASH & INVESTMENT REPORT March 31, 2014 Balances 03/31/14 General 000 GENERAL 6,690,899 Balances Balances Balances Balances 3/31/13 3/31/12 3t31/11 3/31/10 $ 944197 $n.a77.804 $o.1a1,2or $ 2,e17,387 General Total 8,690.899 944197 3,277.804 3,181,257 2,817,38, Special Revenue 101 HOTELJMOTeLmx 433,781 440,090 453,083 695,976 961.314 103 STREET 1,350167 1.045.854 919.276 670.123 398,453 104 ARTERIAL STREET 772.003 588,392 4.595.453 10,289.119 5.057.833 105 CONTINGENCY 5.764.212 1.461.267 1.457.830 1.456.806 885,989 107 FIRE EQUIP. CUM. RESERVE 945.312 943.501 804,457 802.232 109 DRUG SEIZURE FUND 68.888 147.083 220.402 283,337 256.766 Special Revenue Total 8,394.470 4.627.998 8'595.703 14.178.619 8.38e.388 Debt Service 306 L|, GUARANTEE 668.897 207 LIMITED TAX G.O. BONDS 1oo8 13.246 38.398 208 LIMITED TAX G.O. BONDS pOun 70 70 104.536 20e LIMITED TAX Go. BONDS nouo 1 3^012.901 3.302.738 (1.5e2) 36.446 210 LIMITED TAX GO. REFUNDING 2003 195 (55) e53 (1.852) 41.080 211 LIMITED TAX ao. REFUNDING x000 416 (81) 5.105 (18.14e) 22.980 212 LTGO SCORE BONDS 1.*53 126 707 (146) ' 213 LTGO SCORE BLo AMER BONDS 995 618 (1,392) 214 LTGO 2010 Series A 5.910 (614) 37 37 215 LTGO 2010 Series B 4.612 4.611 17 216 VALLEY COM Refunding bonds 2010 74 14 14 814 217 LIMITED TAX GO BONDS REFUNDING 214 (299) 233 LID #33 42.591 ' Debt Service Total 719.850 3.017.595 3.314.751 (8.e47) 243.440 Capital Project 301 LAND ACQ, REC & PARK DEVLPMNT 1.157.3e1 1.088.513 1.665.327 4.787.800 1.232.251 302 FACILITY REPLACEMENT 1.967.648 2.103.824 2.01e.099 2.051.032 2.074.844 303 GENERAL GOVERNMNT IMPROVEMENTS 404.809 804.988 584.287 1.310.709 364.677 304 FIRE 43e.317 358.809 316.591 185.331 16.119 m��r-------- 3.968.165 4.356.334 1'585.304 8.314.873 6.687.891 Enterprise 400 UTILITY ow ACCT (v,erpapnonts) (1.e29) 22.585 18.449 13.e36 11.159 *01 WATER 5.701.994 5.306.16e 3.9e*.145 4.e*6.612 5.602.009 402 SEWER 3.431,464 1,e17.966 1.219.446 1.605.340 1,802.173 404 WATER/SEWER REVENUE BONDS - 31,866 405 BOND RESERVE 393.5*7 411 FOSTER GOLF COURSE 2e1.314 218.e7e (143.232) (2*3.075) e8.684 412 SURFACE WATER 3.083.605 3.433.716 3.126.e65 3.333.516 2.741.371 Enterpnse Total 12.436,448 10.89e.41* 8.215.773 9.555.929 10.870.809 Internal Service 501 EQUIPMENT RENTAL 4.482.90* 4.388.645 3.652.3*3 3.593.124 3^567.409 502 INSURANCE 5,483,559 6,559,638 6.502.805 5,953,383 5.128.ee6 �p/ 910.864 1.839.349 1.88e.703 1.706.648 1.452.497 intern��er�=er6u�--- 10.877,127 12.7e7.032 12.048.850 11.253.154 10.148.902 43,086,960 36,643,172 40,032,985 46,475,884 38,930,817 Grand Total Funds not included in the Grand Total are the fiduciary funds and the MPD. However, these balances are included in the investment balances. CITY OF TUKWILA Treasury Rates and Yield Curves CASH & INVESTMENT REPORT March 31, 2014 Rates at March 31, 2014 3mo 6mo 1Yr 2Yr 3Yr 5Yr 10Yr 30Yr 0.05% 0.07% 0.13% 0.44% 0.90% 1.73% 2.73% 3.56% Source: US Department of the Treasury 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 20 Rate % Change Change -0.02% -40% 3mo -0.04% -57% 6mo -0.01% -8% 1Yr 0.19% 43% 2Yr 0.54% 60% 3Yr 0.96% 55% 5Yr 0.86% 32% 10Yr 0.46% 13% 30Yr Rates at March 28, 2013 0.07% 0.11% 0.14% 0.25% 0.36% 0.77% 1.87% 3.10% Comparison of Treasury Rates 1,+1,1111( 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 10 yr 30 yr -3/31/2014 3/28/2013