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Home My WebLink AboutFIN 2021-05-24 Item 1D - Report - 2021 1st Quarter InvestmentCity of Tukwila INFORMATIONAL MEMORANDUM TO: Finance & Governance Committee FROM: Vicky Carlsen, Finance Director BY: Aaron Williams, Fiscal Coordinator CC: Mayor Ekberg DATE: May 24, 2021 SUBJECT: 2021 1st Quarter Cash & Investment Report ISSUE Allan Ekberg, Mayor 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 March 31, 2021, the portfolio totaled $63.4 million comprised of $59.3 million in cash and cash equivalents and $4.1 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. Portfolio Allocation 3/31/2021 Operating Cash 4,465,518 7% LGIP 39,703,227 63% Money Market 15,131,571 24% Certificates of Deposit 2,122,550 3% Government Agencies 1,000,000 2% Municipal Bonds 1,000,825 2% 63,423,691 Portfolio Allocation 12/31/2020 Operating Cash 10,358,248 15% LGIP 41,690,157 59% Money Market 15,123,022 22% Certificates of Deposit 2,106,948 3% Government Agencies - 0% Municipal Bonds 1,000,195 1% 70, 278, 570 Government Agencies, 2% Ce rti fi cates of Deposit, 3% A Money Market, 24% Municipal Bonds, 2% 1h Operating Cash, 7% LGIP, 63% 49 INFORMATIONAL MEMO Page 2 INVESTMENT ACTIVITY Interest earnings on cash and money market investments during the first quarter were $21,620. The City held a $2M 2 -year CD with Sound Community Bank which earned $15,602 during the year, but matured mid-March. The City chose to liquidate this account and the funds were returned to the City in early April. Longer term investments held by the City are projected to pay $31,875 during the year with a $500k bond scheduled to mature in June. One new bond investment was purchased during the first quarter, investing $1 million in a FHLB Bond paying 0.625%. Additional Bond investments will be pursued during the year as opportunities are identified. The chart below provides the investment income Budget to Actual for the Government Funds and Enterprise funds. Investment Income Annual Budget YTD Actuals Pct of Budget Government Funds Enterprise Funds $ 290,500 $ 13,561 4.7% 118,000 23,660 20.1% $ 408,500 $ 37,221 9.1% RETURN ON INVESTMENTS The current portfolio yield on March 31st was 0.21 % with the Washington State LGIP and the Columbia Bank money market accounts were earning 0.113% and 0.22%, respectively. Longer term investment holdings have an average return of 1.15%. POLICY COMPLIANCE AND LIQUIDITY ANALYSIS The portfolio profile is within the range of all investment policy parameters. 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. In response to the COVID-19 pandemic, there were significant cuts to the Fed Funds Rate reducing the rate to 0.16% currently. The chart below illustrates the 2 -year treasury rate 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 2021-Q1 Cash and Investment Report Policy Compliance & Liquidity Analysis 50 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2 -Year Treasury Note Rate UD tD 1.0 1.0 IN N N N CO 00 00 CO CO 01 01 Ot 0 0 0 0 1-1 ▪ N N N N N N N N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N M• \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1.0 CO N M tO Cl N M LD Cl N CO tD Cl N CO tD 01 N CO , ey . 1-1 1-1 Agency / Issuer CASH & CASH EQUIVALENTS CITY OF TUKWILA Cash and Investment Details CASH & INVESTMENT REPORT March 31, 2021 (a) (c) (d) Rating Investment Purchase Maturity Term Par Book Yield to Annualized Moody's Type Date Date Yrs. Value Balance Maturity Return US Bank Operating Cash Depository (b) - 4,465,518 4,465,518 0.20% 8,931 (e) Washington State Treasurer LGIP Investment Pool (b) - 39,703,227 39,703,227 0.11% 45,222 (f) Columbia Bank Money Market (b) - 15,131,571 15,131,571 0.22% 33,289 (f) Total Cash & Cash Equivalents 59,300,316 59,300,316 0.15% 87,442 INVESTMENTS Certificates of Deposits Sound Community Bank Certificate of Deposit 3/4/2019 3/4/2021 -0.1 2,122,550 2,122,550 2.97% 15,602 (g) TOTAL CERTIFICATES OF DEPOSIT 2,122,550 2,122,550 Agencies Federal Home Loan Bank 0.74% 15,602 US agency 02/2021 2/24/2026 0.1 1,000,000 1,000,000 0.63% 6,250 TOTAL AGENCIES 1,000,000 1,000,000 0.63% 6,250 Taxable Municipal Bonds Multnomah County OR GO LTD Aaa Revenue Bonds 08/2017 6/1/2021 0.2 500,000 499,715 2.28% - (h) Burien WA GO LTD Bld Am Bnds Aa2 LTGO 12/2017 12/1/2025 4.7 500,000 501,110 5.13% 25,625 TOTAL MUNICIPAL BONDS 1,000,000 1,000,825 2.56% 25,625 Total Investments 4,122,550 4,123,375 1.15% 47,477 Interest earned from matured/called investments TOTAL CASH, CASH EQUIVALENTS & INVESTMENTS $ 63,422,866 $ 63,423,691 0.21% $ 134,919 (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. (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) Sound Comm Bank CD matured as of Mar -21, deposit returned to City in April. (h) Zero coupon bonds, pays no interest until matured. Current Portfolio Yield Current Portfolio Allocation Municipal Agencies, 2% Bonds, 2% CDs, 3% Money Market, 24% Cash, 7% �LGIP, 63% 51 CITY OF TUKWILA Policy Compliance & Liquidity Analysis CASH & INVESTMENT REPORT March 31, 2021 Portfolio Liquidity Analysis & Maturity Diversification Amount As of Report Date Available Within 1 Year Funds immediately available - US Bank, State LGIP, Money market $ 59,300,316 $ 59,300,316 Fixed Maturity Investments, maturing in: 0-90 days after Report Date 91-180 days after Report Date 181-270 days after Report Date 271-360 days after Report Date Investments maturing in 1 year or less 2,622,550 2,622,550 Investments maturing in 1-2 years Investments maturing in 2-3 years Investments maturing in 3-4 years Investments maturing in 5-10 years Investments maturing in more than 1 year and less than 10 years. TOTALS $ 63,422,866 $ 61,922,866 98% 2,622,550 1,500,000 1,500,000 Available Within 5 Years $ 59,300,316 2,622,550 Available in 5 - 10 Years 1,500,000 $ 61,922,866 $ 1,500,000 98% 2% Financial Institution Diversification US Bank Columbia Bank Sound Community Bank Investments in Financial Institutions Investments in US Government and other non-financial institutions Total Investment Mix Depository State Investment Pool Money market Certificate of Deposit US Agency Municipal Bonds Total Portfolio Amount $ 4,465,518 15,131, 571 2,122, 550 % of Total 7.0% 23.9% 3.3% 21,719,639 34.2% 41,703,227 65.8% $ 63,422,866 100.0% Portfolio Amount 4,465,518 39,703,227 15,131,571 2,122, 550 1,000,000 1,000,000 % of Total 7.0% 62.6% 23.9% 3.3% 1.6% 1.6% 63,422,866 100.0% POLICY MAXIMUM 50.0% 50.0% 50.0% POLICY MAXIMUM insured by PDPC 75.0% insured by PDPC insured by PDPC 75.0% no limit specified in policy Policy Met? Yes Yes Yes Policy Met? Yes Yes Yes Yes Yes Yes Weighted Average Maturities: Certificates of deposit Agencies Municipal bonds Total Investments POLICY MAXIMUM Policy Met? Years 0.0 4.9 2.2 1.7 Performance Analysis Current portfolio yield 0.21% Benchmarks: 2 year treasury 3.5 Local Govt Invst Pool Yes Note: Cash and cash equivalents are available within one day and are not factored into the Total Investments weighted average maturity. 52 0.16% 0.13%