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Home My WebLink AboutFS 2011-05-03 COMPLETE AGENDA PACKET City of Tukwila Distribution: K. Hougardy 3. Hernanez Finance and Safety D. Robertson A. Ekberg Committee Mayor Haggerton S. Lancaster O Kathy Hougardy, Chair C. o 'Raherty h� O Joan Hernandez S. Kerslake K. Mate] 0 Dennis Robertson AGENDA TUESDAY, MAY 3, 2011 CONFERENCE ROOM #3, 5:00 PM Item Recommended Action Page 1. PRESENTATION(S) 2. BUSINESS AGENDA a. Investment Report for 1st Quarter of 2011. a. Information Only Pg.1 Peggy McCarthy, Deputy Finance Director b. Sales Tax Report b. Information Only Pg. 7 Shawn Hunstock, Finance Director 3. ANNOUNCEMENTS 4. MISCELLANEOUS Next Scheduled Meeting: Tuesday, May 17, 2011 The City of Tukwila strives to accommodate individuals with disabilities. Please contact the City Clerk's Office at 206 433 -1800 or (tukclerk @ci.tukwila.wa.us) for assistance. blank City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance and Safety Committee FROM: Peggy McCarthy, Deputy Finance Director DATE: April 27, 2011 SUBJECT: First Quarter 2011 Cash Investment Report ISSUE 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 and a summary of performance. The March 31, 2011 Investment Report is included with this memorandum and is discussed below. BACKGROUND Investment decisions are guided by the three investing objectives 1) the preserving principal 2) earning a reasonable return and 3) ensuring sufficient liquidity to meet the City's operating needs. To achieve these objectives, investments are diversified by type, by financial institution, and by maturities. To ensure sufficient liquidity exists to meet the City's operating needs, cash requirements needed for special circumstances, such as capital projects, is considered as well as the normal variations in the monthly cash flow cycles. The City has established a minimum operating liquidity threshold that is equal to the largest monthly decline in combined cash and investment balances over the most recent thirty -six month period, or $7 million, then doubled this amount to $14 million to provide a cushion, or safety net, for unforeseen circumstances. In addition, funding requirements for known special needs such as capital projects are added to this threshold. DISCUSSION Portfolio Activitv, Components Characteristics. During the first quarter of 2011, the following activity took place. Maturities/Redemptions $5,000,000 certificate of deposit, yielding .99 36 month term Purchases $3,000,000 certificate of deposit, yielding 1.4 36 month term $1,000,000 Fannie Mae -US Agency, yielding 1.5 callable 2/22/12 with 3.25% step up, maturity 2/22/16 $1,500,000 Freddie Mac -US Agency, yielding 1.75 callable 3/23/12, maturity 9/23/14 $500,000 Federal Home Loan Bank -US Agency, yielding 1.35 various calls, 12/30/13 maturity $185,000 Educational Service District Municipal bond, yielding 1 12/1/2011 maturity 1 INFORMATIONAL MEMO Page 2 At March 31, 2010, the portfolio was in compliance with all parameters and limitations set forth in the investment policy including investment mix, investment maturities and diversification of financial institutions. Funds available within one day and invested in the US Bank checking account, the state investment pool and the money market accounts totaled $28.6 million representing 60% of the portfolio. Certificate of deposits constituted $12.4 million or 26% of the portfolio with $5.2 million of this amount maturing in the second quarter of 2011. Funds available within one year or less represented 72% of the portfolio; 92% of the portfolio was available within five -years or less. In 2010, the financial institution with the largest holding of City investments was the Washington State Treasurer's Office. However because the new banking services contract with US Bank provides an earning credit of .5 funds were moved during the first quarter 2011 from the Washington State Treasurer's Office local government investment pool, with a yield during March 2011 of .23 to US Bank. US Bank held $13.6 million of City funds at March 31, 2011 representing the largest investment with one financial institution. Portfolio Performance. The weighted average portfolio yield increased slightly from .96% at the end of the fourth quarter 2010 to 1.08% at the end of the first quarter 2011. Estimated annual investment earnings calculated based on the portfolio components at March 31, 2011 totaled $516,186. Fund Cash Investment Balances. The largest balances at March 31, 2011 occurred in the 104 Arterial Street fund with $10.3 million, the 502 Self Insurance fund with $5.9 million, the 401 Water Fund with $4.9 million and the 301 Land Acquisition Park Development Fund with $4.8 million. City -wide cash and investment balances increased from their December 31, 2010 level Of $46,931,966 to a March 31, 2011 level of $47,791,612, representing an increase of $859,646. Investment Environment and Strategies. Interest rates rose slightly in the first quarter 2011. The $5 million in certificates of deposits maturing in the second quarter 2011 will be invested in the Columbia Bank money market fund and serve as an additional set aside for the Southcenter Access Project (Mickitat). The yield on this money market fund was .11% higher than the local government investment pool at March 31, 2011. RECOMMENDATION Presentation is for information only. ATTACHMENTS Cash and Investment Report as of March 31, 2011 Policy Compliance Liquidity Analysis as of March 31, 2011 Cash and Investment Balances by Fund at March 31, 2011 Yield curve and Treasury Rates at March 31, 2011 and December 31, 2010 H:llnvst120111Q1 201111nfoMemo Invstmnt Rprt 3- 31- 11.docx 2 CITY OF TUKWILA CASH INVESTMENT REPORT March 31, 2011 (a) Purchase Maturity Term Par Book Balance Yield to Annualized Aqency Issuer Rating Investment Tyoe Date Date Yrs Value Purchase Price Maturity Return (C) CASH CASH EQUIVALENTS US Bank Depository Various (b) 10,187,709 10,187,709 0.50% 50,939 Washington State Treasurer LGIP Investment Pool Various (b) 8,125,344 8,125,344 0.23% 18,688 Regal Bank Money market Various (b) 250,000 250,000 1.10% 2,750 Columbia Bank Money market Various (b) 10,008,137 10,008,137 0.34% 34,028 Total Cash Cash Equivalents 28,571,190 28,571,190 0.37% 106,405 INVESTMENTS Certificates of Deposit First Savings Bank Certificate of Deposit 05/01/2009 05/01/2011 2.0 2,000,000 2,088,970 2.31% 46,200 Northwest Sound Community Bank Certificate of Deposit 05/20/2009 04/21/2011 1.9 1,500,000 1,565,289 2.22% 33,330 Charter Bank Certificate of Deposit 05/26/2009 05/26/2011 2.0 1,500,000 1,555,735 1.98% 29,700 US Bank Certificate of Deposit 02/15/2010 02/15/2013 3.0 3,450,000 3,450,000 1.44% 49,680 Sterling Bank Certificate of Deposit 02/16/2010 08/16/2011 1.5 250,000 253,372 1.20% 3,000 Sound Community Bank Certificate of Deposit 03/04/2011 03/04/2014 3.0 3,000,000 3,003,107 1.40% 42,000 Sound Community Bank Certificate of Deposit 11/15/2010 05/15/2012 1.5 503,414 504,990 0.75% 3,776 CERTIFICATES OF DEPOSIT TOTAL 2.5 12,203,414 12,421,462 1.70% 207,686 Agencies Fannie Mae US agency 02/2212011 02/22/2016 5.0 1,000,000 1,000,000 1.50% (e) 15,000 Freddie Mac US agency 03/23/2011 09/23/2014 3.5 1,500,000 1,500,000 1.75% 26,250 Federal Home Loan Bank US agency 03/30/2011 12/30/2013 2.8 500,000 500,000 1.35% 6,750 TOTAL AGENCIES 3.9 3,000,000 3,000,000 1.60% 48,000 Taxable Municipal Bonds City of Marysville, sinking Al LTGO Refunding 11/23/2010 12/01/2017 5.5 535,000 602,531 3.37% 20,305 2014 -2017, ave 5.5 years Washington State Aa3 Lodging Tax Bonds 11/30/2010 07/01/2016 5.6 500,000 507,969 3.60% 18,287 Convention Center Facility A+ UW Biomedical Center AA1 Revenue Bonds 12/14/2010 07/01/2017 6.6 500,000 506,932 4.05% 20,531 AA+ UW Biomedical Center AA1 Revenue Bonds 12/14/2010 07/01/2019 8.6 500,000 506,248 4.70% 23,794 AA+ Douglas County, ESD, Aa1 UTGO 12/23/2010 12/01/2020 8.9 1,135,000 1,157,359 4.55% 52,660 sinking 2018 -2020, ave 9 yrs Aa3 Port of Anacortes Al LTGO 12/17/2010 09/01/2020 9.7 340,000 326,742 5.00% 16,337 Educational Servic District 03/23/2011 12/01/2011 0.7 185,000 191,179 1.00% 1,912 TOTAL MUNICIPAL BONDS 7.2 3,695,000 3,798,960 4.05% 153,825 Total Investments 3.6 18,898,414 19,220,422 2.13% 409,511 TOTAL CASH, CASH EQUIVALENTS INVESTMENTS 1.5 47,469,604 47,791,612 .1 1.08% 515,915 Current Portfolio Tield (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) Annualized return based on purchase price and yield to maturity. (d) Estimated market value at 12 -31 -10 was $102,535 less than purchase price. (e) Steps up to 3.25% on 2 -22 -12 if not called. 3 CITY OF TUKWILA CASH INVESTMENT REPORT Policy Compliance Liquidity Analysis March 31, 2011 As of Report Date Available Available Available Portfolio Within 1 Year Within 5 5 10 Years Liquidity Analysis Maturity Diversification Amount Years Funds immediately available 28,571,190 28,571,190 28,571,190 Investments Maturing in 2011: Second quarter 2011 5,209,994 Third quarter 2011 253,372 Fourth quarter 2011 191,179 Fixed Maturities of 1 year or less 5,654,545 5,654,545 5,654,545 Fixed maturities of 1 -3 years 7,458,097 7,458,097 Fixed maturities of 3 -5 years 2,500,000 2,500,000 Fixed maturities of 5 -7 years 1,617,432 1,617,432 Fixed maturities of 7 -10 years 1,990,349 1,990,349 Fixed Maturities of 1 -10 years 13,565,878 TOTALS 47,791,612 34,225,735 $44,183,831 $3,607,781 72% 92% Investment Policy Parameters POLICY LIMIT PORTFOLIO Policy Met? Funds available within 1 year 30.0% min 72% Yes Funds available within 5 years 80.0% min 92% Yes Funds available in 10 years or more 20.0% max 11% Yes Liquidity Requirements and Funds Available for Investing: Funds immediately available 28,571,190 Restrictions designations: Southcenter Parkway Project 4,331,034 Klickitat Project 10 Operating liquidity (h) 14,000,000 Liquidity threshold 28,331,034 Funds available for longer term investing 240,156 (h) Represents largest one month decline in portfolio balance over the most recent 36 month period doubled; or the equivalent of a 100% cushion c Portfolio POLICY Policy Financial Institution Diversification Amount of Total MAXIMUM Met? US Bank 13,637,709 28.5% 50.0% Yes Washington State Treasurer 8,125,344 17.0% 75.0% Yes Columbia Bank 10,008,137 20.9% 50.0% Yes Sound Community Bank 5,073,386 10.6% 50.0% Yes Other financial institutions 10,947,037 22.9% 50.0% Yes Total 47,791,612 100.0% Portfolio POLICY Policy Investment Mix Amount of Total MAXIMUM Met? Depository 10,187,709.12 21.3% insured by PDPC State Investment Pool 8,125,344 17.0% 75.0% Yes Money market 10,258,137 21.5% insured by PDPC Certificate of Deposit 12,421,462 26.0% insured by PDPC US Agency 3,000,000 6.3% 75.0% Yes Municipal Bonds 3,798,960 7.9% no limit specified in policy Total 47,791,612 100.0% Weiahted Averaoe Maturites: Years Performance Analvsis Certificates of deposit 2.5 Current portfolio yield 1.08% Agency bonds 3.9 Benchmarks: Municipal bonds 7.2 6 month treasury 0.17% Total Investments 3.6 2 year treasury 0.78% Total Portfolio 1.5 Local Govt Invst Pool 0.23% POLICY MAXIMUM 3.5 Policy Met? Yes Note: Cash and cash equivalents are available within one day and are factored into the Total Portfolio weighted average maturity. 4 CITY OF TUKWILA CASH INVESTMENT REPORT March 31, 2011 Cash Investment Balances By Fund and Fund Group General 000 GENERAL 1,660,218 1,127,775 2,787,994 General Total 1,660,218 1,127,775 2,787,994 2,772 876 Special Revenue 101 HOTEUMOTEL TAX 591,624 104,353 695,976 103 STREET 471,853 198,270 670,123 104 ARTERIAL STREET 7,834,837 2,442,148 10,276,985 105 CONTINGENCY 807,374 82,973 890,346 107 FIRE EQUIP. CUM. RESERVE 804,457 804,457 109 DRUG SEIZURE FUND 272,965 10,372 283,337 Special Revenue Total 10,783,110 2,838,114 13,621,224 k 73, ail 332'Y Debt Service 208 LIMITED TAX G.O. BONDS 2000 70 70 209 LIMITED TAX G.O. BONDS 2003 236 236 210 LIMITED TAX G.O. REFUNDING 2003 356 356 211 LIMITED TAX G.O. REFUNDING 2008 7,941 7,941 214 LTGO 2010 Series A 37 37 215 LTGO 2010 Series B 17 17 216 VALLEY COM Refunding bonds 2010 814 814 Debt Service Total 9,470 9,470 k';i5,895 Capital Project 301 LAND ACQ. REC. PARK DEVLPMNT 1,743,730 3,044,070 4,787,800 302 FACILITY REPLACEMENT 2,051,032 2,051,032 303 GENERAL GOVERNMNT IMPROVEMENTS 1,310,446 1,310,446 304 FIRE IMPACT FEES 165,331 165,331 Capital Project Total 5,270,540 3,044,070 8,314,610 8 4'5fi 737 Enterprise 400 UTILITY ON ACCT (overpayments) 21,000 21,000 401 WATER 953,592 3,970,999 4,924,592 402 SEWER 1,572,094 208,400 1,780,494 411 FOSTER GOLF COURSE (274,854) (274,854) 412 SURFACE WATER 3,401,619 104,200 3,505,819 Enterprise Total 5,673,452 4,283,599 9,957,051 Internal Service 501 EQUIPMENT RENTAL 1,781,074 2,191,179 3,972,253 502 INSURANCE 426,097 5,527,286 5,953,383 503 INSURANCE LEOFF 1 1,498,248 208,400 1,706,648 Internal Service Total 3,705,419 7,926,864 11,632,283 11;270,018; Fiduciary 611 FIREMEN'S PENSION 1,430,674 1,430,674 640 AGENCY FUND 38,306 38,306 Fiduciary Total 1,468,980 1,468,980 1:;437,566 Grand Total $28,571,189, $19,220,423 47;791,612 46,931,966 5 CITY OF TUKWILA CASH INVESTMENT REPORT Treasury Rates and Yield Curves March 31, 2011 Rates at March 31, 2011 Rates at December 31, 2010 Closing Current Closing Current Yield Yield Yield: Yield Term Term t 3mo 0.09% 0.09% 3mo 0.11% 0.12% 6m� t� ii 0 19% 1 Yr 0.26% 0.26% 1 Yr 0.27% 0.27% k .78 i) 7�3% .FYI,. aY ��.•64 °0 3% 3Yr 1.25% 1.25% 3Yr 1.05% 1.01% x r 5Yr 2D °l° w SYrY fl6 °o 2 01 10Yr 3.44% 3.42% 10Yr 3.36% 3.31% 30Y.'r fv 4 42 %t p4 37 s Yield Curve at 4.5 4 f March 31, 2011 3.5 3 2 15.. 2/28/2011 Today. f` 0 -5-, 0 a Yield Curve at 4.5 December 31, 2010 3 2. A 11/30/2010 Today O ry 'S 5 y 0 6 City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance and Safety Committee FROM: Shawn Hunstock, Finance Director DATE: April 24, 2011 SUBJECT: Sales Tax Revenue for February 2011 Schedule I in 1,000's Sales Receipt 2010 2011 2011 Increase/(Decrease) %Increasei(Decrease) Month Month Actual Estimated Actual Month YTD Month YTD Jan Mar 1,034 1,080 1,039 (41) (41) -3.80% 0.00% Feb Apr 1,006 1,033 1,043 10 (31) 0.97% -1.47% Mar May 1,157 1,179 (1,179) (1,210) 100.00% 36.76% Apr June 1,070 1,102 (1,102) (2,312) 100.00% 52.62% May July 1,067 1,138 (1,138) (3,450) 100.00% 62.36% June Aug 1,247 1,243 (1,243) (4,693) 100.00% 69.27% July Sept 1,251 1,299 (1,299) (5,992) 100.00% 74.21% Aug Oct 1,216 1,176 (1,176) (7,168) 100.00% 77.49% Sept Nov 1,357 1,185 (1,185) (8,353) 100.00% 80.05% Oct Dec 1,082 1,036 (1,036) (9,389) 100.00% 81.85% Nov Jan12 1,202 1,101 (1,101) (10,490) 100.00% 83.44% Dec Feb12 1,891 1,628 (1,628) (12,118) 100.00% 85.34% Totals 14,580 14,200 2,082 Mitigation Received 306 2,388 98.72% of Budget Incl. Mitigation Sales tax collections for February showed a modest increase versus the same month in the previous year. February represented the seventh consecutive increase, and ninth increase during the last twelve months. For February, collections more than the budget for the month, and more than actual collections in the same month in the previous year. Actual receipts for February were $10,000 more than budget, and $37,000 more than the same period last year. We are up 0.97% for the month compared to budget, and up by 2.06% compared to the same month last year. This is the first month since August 2008 that actual sales tax collections for the month were more than the budgeted amount. Including mitigation payments, we are currently at 98.72% of budget for the year to date. This includes a mitigation payment of $305,985.77 received on March 31, 2011. The last mitigation payment we received was on December 31, 2010 for $308,257.11. Mitigation payments are now annualized and will only be adjusted once per year in the fall, effective with the December 31S payment. Staff completed work on the last mitigation detail file and submitted to the Department 7 INFORMATIONAL MEMO Page 2 of Revenue a list of firms that should be removed from the mitigation calculation process. These firms are ones that were offsetting other losses, thereby reducing our mitigation payment. 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 most of the classifications. Schedule II YTD YTD Dollar Group Name Current Prior Diff. Diff. 448* Clothing and Accessories 265,910 256,866 9,044 3.52% 452* General Merchandise Stores 228,985 276,800 (47,815) 17.27% 443* Electronics and Appliances 213,198 133,541 79,657 59.65% 722* Food Services, Drinking Places 201,748 216,276 (14,528) -6.72% 423* Wholesale Trade, Durable Goods 163,947 220,597 (56,651) 25.68% 441* Motor Vehicle and Parts Dealer 90,088 94,343 (4,256) 4.51% 451* Sporting Goods, Hobby, Books 89,870 86,241 3,629 4.21% 453* Miscellaneous Store Retailers 75,377 68,685 6,692 9.74% 236 Construction of Buildings 70,565 53,855 16,711 31.03% 532 Rental and Leasing Services 69,753 44,423 25,330 57.02% Mitigated NAICS Code As you can see there are large variances from last year for the same time period. For instance, sales tax for Wholesale Trade and Durable Goods is down by 25.68 and General Merchandise Stores is down by 17.27 As illustrated above, four of the top ten merchant categories have declined versus prior year, and all but one of the 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 year -to -date. Schedule III YTD YTD Dollar Group Name Current Prior Diff. Diff. 423* Wholesale Trade, Durable Goods 163,947 220,597 (56,651) 25.68% 541 Professional, Scientific, Tech 22,791 28,950 (6,160) 21.28% 517 Telecommunications 52,889 65,295 (12,406) 19.00% 452* General Merchandise Stores 228,985 276,800 (47,815) 17.27% 811 Repair and Maintenance 13,723 15,029 (1,306) -8.69% 444* Building Material and Garden 63,426 68,742 (5,316) -7.73% 722* Food Services, Drinking Places 201,748 216,276 (14,528) -6.72% 424* Wholesale Trade, Nondurable 14,005 14,824 (819) -5.52% 441* Motor Vehicle and Parts Dealer 90,088 94,343 (4,256) 4.51% 721* Accommodation 61,391 64,014 (2,623) -4.10% Mitigated NAICS Code Attached is a Sales Tax Summary comparing year -to -date 2011 vs. 2010 by major NAICS codes. Also included is a comparison of total receipts year -to -date for the last six years. Please let me know if you have any comments or questions. Thank you. WAFIN ProjectslSales Tax InformationlSales Tax Files from Shawn12011\Info Memo Sales Tax 04242011.docx e n -o r'vvm w w w m r o m o o o w w w p m �y p q m> o �o o 0 o O c w C r N N it 12 a c G A I U U t c U L U w `w T d O x m m H O O rn m Q LL t 0 z v m� d m A v E E Z yw0 j o j t3 oL>w C c w c t Y c w G H rE o o< m m Q o E m p u a U w 2 O a 5 a r z LU N o e o J 0 0 0 p 0> m r o o e= x U) M. L 57 M W r� w 57 m m O m N vs o Q O m 0 0 0 Y M N ZE cIt 1Z o mmm H O o N on o o o N OM E o 0 S m w L w G w O t N c C Q W o 0 O 3 O u 3 m 2 v m v t= s o H m a w o f v r 2 O 0 LL a n o a F a 'c` a Q E a o a c a Ei z G c to u d c c c Q a p c Om a -ca o'' z z c RID E2 0 m 2 Aw _5 A? 8 a nc m A G a om m? h ~O 2y m_ m ~O c�= �0 N N vvvvvv c c v z 9 Six Year Comparison 2011 I i $2 ,081, 581' 2010 Iy x $2,041:;; 471 2009 23,267 2008 h 2007 Z�L,b /.i,4y5 Irt' 2006 1 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 Taxes Collected Year to Date 10