HomeMy WebLinkAboutFIN 2020-11-09 Item 1D - Report - 2020 3rd Quarter Cash and Investment Report
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance Committee
FROM: Vicky Carlsen, Finance Director
BY: Aaron Williams, Fiscal Coordinator
CC: Mayor Ekberg
DATE: October 26, 2020
SUBJECT: 2020 3rd Quarter Cash & Investment Report
ISSUE
The Quarterly Cash & Investment Report is provided to the Finance Committee in accordance with the City’s
Investment Policy.
SUMMARY OF INVESTMENT POLICY
It is the policy of the City of Tukwila to invest public funds in a manner that will provide maximum security with
the highest investment return while meeting the daily cash flow demands of the City while conforming to all state
and local statutes governing the investment of public funds.
INVESTMENT HOLDINGS
As of September 30, 2020, the portfolio totaled $75.6 million comprised of $71.6 million in cash and cash
equivalents and $4.0 million in longer term investments. The attached “Cash and Investment Report” provides
additional details on the cash and investment holdings of the City.
Below is a comparison of the current portfolio allocation compared to the prior year-end.
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INFORMATIONAL MEMO
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INVESTMENT ACTIVITY
Through nine months of 2020 the City received $554 thousand in interest earnings from the LGIP and
Money Market accounts. Most of those interest earnings (68%) came from the first quarter, prior to the
interest rate cuts. Third quarter interest earnings were $48.8 thousand.
Longer term investments held by the City paid interest totaling $26.6 thousand during the third quarter
and $2.64 million in investments matured or were called. No new bond investments were made during
this period. Due to the ongoing pandemic significantly reducing revenues, longer term investments are
not currently being pursued in order to maintain liquidity.
RETURN ON INVESTMENTS
The current portfolio yield at the end of the third quarter was 0.46%, Washington State LGIP and the
Columbia Bank money market accounts were earning 0.21% and 0.34%, respectively.
Longer term investment holdings have an average return of 2.99%.
POLICY COMPLIANCE AND LIQUIDITY ANALYSIS
The portfolio profile is well within the range of all investment policy parameters. During 2020 we will
maintain liquidity to meet the cash flow needs of Public Safety Plan construction. See “Policy
Compliance & Liquidity Analysis” attachment for additional detail.
The portfolio benchmark is the 2-year treasury rate, which is closely tied to the changes in the Federal
Reserve Fed Funds Rate. This rate steadily climbed until late 2018 when several Federal Funds Rate
cuts moved the 2-yr treasury note to just above 1.5% at year end 2019. In response to the COVID-19
pandemic, there were significant cuts to the Fed Funds Rate bringing it near 0.13% currently. The chart
below illustrates the return over the past 5 years.
The investment portfolio will continue
to be managed to take advantage of
investment opportunities as they arise
while maintaining adequate liquidity to
meet obligations.
RECOMMENDATION
Presentation is for information only.
ATTACHMENTS
2020-Q3 Cash and Investment Report
Policy Compliance & Liquidity Analysis
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(a)(c) (d)
Agency / Issuer Rating
Moody's
Investment
Type
Purchase
Date
Maturity
Date
Term
Yrs.
Par
Value
Book
Balance
Yield to
Maturity
Annualized
Return
CASH & CASH EQUIVALENTS
US Bank Operating Cash Depository various (b) - 8,879,196 8,879,196 0.20% 17,758 (e)
Washington State Treasurer LGIP Investment Pool various (b) - 47,672,055 47,672,055 0.21% 98,109 (f)
Columbia Bank Money Market various (b) - 15,112,614 15,112,614 0.34% 51,383 (f)
Total Cash & Cash Equivalents 71,663,865 71,663,865 0.23% 167,250
INVESTMENTS
Certificates of Deposits
Sound Community Bank Certificate of Deposit 3/4/2019 3/4/2021 0.4 2,091,424 2,091,424 2.97% 62,115
TOTAL CERTIFICATES OF DEPOSIT 2,091,424 2,091,424 2.97% 62,115
Taxable Municipal Bonds
Douglas County Washington Sch Dist. Aaa UTGO 12/2010 12/1/2020 0.2 400,000 406,504 4.80% 19,200
Port Tacoma WA GO LTD Txbl Ref Aa2 LTGO Refunding 09/2017 12/1/2020 0.2 510,000 513,198 2.50% 12,750
Multnomah County OR GO LTD Aaa Revenue Bonds 08/2017 6/1/2021 0.7 500,000 494,355 2.28% - (g)
Burien WA GO LTD Bld Am Bnds Aa2 LTGO 12/2017 12/1/2025 5.2 500,000 501,000 5.13% 25,625 (h)
TOTAL MUNICIPAL BONDS 1,910,000 1,915,057 3.01% 57,575
Total Investments 4,001,424 4,006,480 2.99% 119,690
Interest earned from matured/called investments 60,388
TOTAL CASH, CASH EQUIVALENTS & INVESTMENTS 75,665,289 75,670,345 0.46% 347,329
Current Portfolio Yield
(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 earned interest up to the amount of fees.
(f) Represents rate in effect for period ending this report.
(g) Zero coupon bonds, pays no interest until matured.
(h) bond callable as of 6/1/20
CITY OF TUKWILA
CASH & INVESTMENT REPORT
September 30, 2020
(a) On Callable 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.
Cash and Investment Details
Cash, 12%
LGIP, 63%
Money Market,
20%
CDs, 3%
Agencies, 0%
Municipal
Bonds, 3%
Current Portfolio Allocation
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Liquidity Analysis & Maturity Diversification
Portfolio
Amount
Available
Within 1 Year
Available
Within 5
Years
Available in
5 - 10 Years
Funds immediately available - US Bank,
State LGIP, Money market 71,663,865$ 71,663,865$ 71,663,865$
Fixed Maturity Investments, maturing in:
0-90 days after Report Date 910,000
91-180 days after Report Date 2,091,424
181-270 days after Report Date 500,000
271-360 days after Report Date -
Investments maturing in 1 year or less 2019 3,501,424 3,501,424 3,501,424
Investments maturing in 1-2 years 2020 - -
Investments maturing in 2-3 years 2021 - -
Investments maturing in 3-4 years 2022 - -
Investments maturing in 5-10 years 2023 500,000 500,000
Investments maturing in more than 1 year
and less than 10 years.500,000
TOTALS 75,665,289$ 75,165,289$ 75,165,289$ 500,000$
99% 99% 1%
Portfolio POLICY Policy
Financial Institution Diversification Amount % of Total MAXIMUM Met?
US Bank 8,879,196$ 11.7%50.0%Yes
Columbia Bank 15,112,614 20.0%50.0%Yes
Sound Community Bank 2,091,424 2.8%50.0%Yes
Investments in Financial Institutions 26,083,234 34.5%
Investments in US Government and other
non-financial institutions 49,582,055 65.5%
Total 75,665,289$ 100.0%
Portfolio POLICY Policy
Investment Mix Amount % of Total MAXIMUM Met?
Depository 8,879,196 11.7%insured by PDPC Yes
State Investment Pool 47,672,055 63.0%75.0%Yes
Money market 15,112,614 20.0%insured by PDPC Yes
Certificate of Deposit 2,091,424 2.8%insured by PDPC Yes
US Agency - 0.0%75.0%Yes
Municipal Bonds 1,910,000 2.5%no limit specified in policy Yes
Total 75,665,289 100.0%
Weighted Average Maturities:Years Performance Analysis
Certificates of deposit 0.4 Current portfolio yield 0.46%
Agencies 0.0
Municipal bonds 1.5 Benchmarks:
Total Investments 0.9 2 year treasury 0.13%
POLICY MAXIMUM 3.5 Local Govt Invst Pool 0.37%
Policy Met? Yes
Note: Cash and cash equivalents are available within one day and are not
factored into the Total Investments weighted average maturity.
CITY OF TUKWILA
Policy Compliance & Liquidity Analysis
CASH & INVESTMENT REPORT
September 30, 2020
As of Report Date
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