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Home My WebLink AboutFS 2012-12-04 Item 2E - Report - 2012 Third Quarter Cash and Investment City of Tukwila Jim Haggerton, Mayor •. INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance and Safety Committee FROM: Peggy McCarthy, Finance Director BY: Vicky Carlsen, Deputy Finance Director DATE: November 28, 2012 SUBJECT: Third Quarter 2012 Cash & Investment Report ISSUE The third 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 September 30, 2012, the portfolio totaled $38.2 million comprised of$27.7 million in cash and cash equivalents and $10.5 in longer term investments. The portfolio balance declined by $4.9 million from September 30, 2011 balance of $43.2 million. One certificate of deposit (CD) in the amount of $500,000 plus interest matured in the 2nd quarter of 2012. A new CD in the amount of $250,000 was purchased from Regal Bank. Additionally, two agency bonds, for total par value of $2.5 million were called during the 1St quarter of 2012. Funds received were not reinvested in long-term investment vehicles but were rolled into cash & cash equivalents for cash flow purposes. Portfolio Performance The portfolio weighted average yield at year end was .96%. Considering the portfolio's weighted average maturity was 1.3 years, and the yield on the cash & cash equivalent accounts was .42%, the portfolio yield of .96% is quite favorable. The yield has been sustained by the 4.05% average yield on the municipal bond investments, the 1.42% yield on the certificate of deposits and the .50% earnings credit on the US Bank depository account. Investment income through 3rd quarter 2012 is $218,321 and has already exceeded the 2012 budget of $182,585. However, investment income for 2012 is expected to be less than 2011 investment income due to a decline in the portfolio balance. Policy Compliance and Liquidity Analysis As of the end of the 3rd 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 43 INFORMATIONAL MEMO Page 2 Cash and investment balances of selected funds follow: Fund Fund Description Portfolio Balance in Thousands 09-30-12 09-30-11 09-30-10 09-30-09 09-30-08 000 General $593 $2,814 $1,867 $3,461 $6,871 104 Arterial Street $791 $7,065 $10,871 $6,019 $10,342 2XX Debt Service $5,696 $15 $835 $2,233 $1,956 301 Land Acquisition, Park Development $1,209 $4,791 $45672 $4,474 $4,790 The General Fund balance shows steady declines in cash and investment balances. It should be noted that it is anticipated that the General Fund balance will be higher at year-end than it is at the end of 3rd quarter largely due to property tax collections in 4th quarter. The Arterial Street Fund balance shows a continual decline which was expected as funds have been expended for the Southcenter Access Project and the Southcenter Parkway projects. The increase in the Debt Service fund and the corresponding decrease in the Land Acquisition and Park Development fund reflects a transfer of funds to pay off the golf course bond debt from a governmental fund as resolved by the Council at the November 21, 2011 regular meeting. Additionally, the December 1, 2012 debt service payments will reduce the debt service cash and investment balance by approximately$2.6 million. Comparing September 30, 2012 General Fund balance to the same time in 2011, the balance is lower now than in 2011 due to the timing of transfers to the debt service funds for December debt payments. Investment Environment Interest rates have remained low throughout 2012 and are expected to remain low until 2014. 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:\1 Users\Vicky\Investment Report\Info Memo Investment Report 2012 Q3.docx 44 CITY OF0KWIL CASH Q INVESTMENT REPORT September 30,2V12 (a) Rating Purchase Maturity Term Rn Book Yield to Annualized Moodw Investment Type Date Date Yrs _--Value Balance�--�Maturity _Return`~_ CASH&CASH EQUIVALENTS US Bank Depository vanmm (b) $ 3.5e8.182 $ 3,528182 0.50% $ 55.112 Washington State Treasurer LG|p Investment Pool vunvuo (^) 10.106.15e 10,106,158 0.12m 1e.946 ' Columbia Bank Money market Various w 14.044.e83 1*.044.983 0.30% 42.135 Total Cash m Cash Equivalents 27.67e.323 27,67e.323 0.42m 117.193 INVESTMENTS Certificates ofDeposit US Bank Certificate ofDeposit 02Y15/2010 02/150013 3.0 3.450.000 3.450.000 1,44% 49.680 Sound Community Bank Certificate ofDeposit 0304/2011 0304/201* 3.0 3,000,000 3'063.4*1 1.40m 42.000 nemdeanx Certificate ofDeposit 06/20/2012 12/20/2014 o.s 250,000 250.819 1.30% 3,250 CERTIFICATES OF DEPOSIT--TOTAL 3.0 6,700,000 6,764,280 1.42% 94,930 Taxable Municipal Bonds City of Marysville,sinking At [TGOnefvnmng 11/23/2010 1201/2017 5.5 535,000 592.771 3o7m 19.976 un\4-pn1r.aveo.ayears Washington State Convention Aan Lodging Tax Bonds 11002010 07/01/2016 oa 500,000 xus.so/ 3.60% 18.235 Center Facility oW Biomedical Center Ax1 Revenue Bonds 12Y14/2010 07/01/2017 sa sno'oon *05,863 *.onm 20,487 Uw Biomedical Center Ax1 Revenue Bonds 1eY14/7010 07/01/201e 8.6 000'ono 505.511 *.ru% 23.75e Douglas County,ESo.sinking Aa1 UTGO 12/23/2010 1201/2020 8.9 1.135.000 1.15*,848 4.55m 52.546 2018'2020.avu9 ym Port u+Anacorteo Al crGO 12/17/2010 09/01/2020 o/ 340.000 328.113 5.00% 16.406 Educational SemicDistrict 03/23/2011 12m1/2012 1.7 {es.ono 188.356 1.00m 1.88* TOTAL MUNICIPAL BONDS 7.3 3,695,000 3,781,984 4.05% 153,292 Total Investments 4 10395000 10546264 uosm 24e222 TOTAL CASH,CASH EOUIVALENTS&INVESTMENTS 1.3 $38,074,323 $38,225,587 1 0.961/61 365,415 Current Portfolio ield (a)On calleable bonds,term is calculated to final maturity even though call date may occur first;term of liquid investments is one day;nn sinking fund bonds,average maturity/o used m calculate term. (u)wo fixed maturity,funds are available within one day. (4 Annualized return based un purchase price and yield mmaturity. CITY OF TUKWILA Policy Compliance& Liquidity Analysis CASH&INVESTMENT REPORT September 30,2012 As of Report Date Available Available Available in Portfolio Within 1 Year Within 5 5-10 Years Liquidity Analysis&Maturity Diversification Amount Years Funds immediately available $ 27,679,323 $ 27,679,323 $27,679,323 Fixed Maturity Investments,maturing in: 0-90 days after Report Date 188,356 91-180 days after Report Date 3,450,000 Investments maturing in 1 year or less 3,638,356 3,638,356 3,638,356 Investments maturing in 1-3 years 3,314,280 3,314,280 Investments maturing in 3-5 years 1,012,384 1,012,384 Investments maturing in 5-7 years 1,098,283 1,098,283 Investments maturing in 7-10 years 1,482,961 1,482,961 Investments maturing in more than 1 year 6,907,907 and less than 10 years. TOTALS $ 38,225,587 $ 31,317,679 $35,644,343 $2,581,244 82% 93% 8% Investment Policy Parameters POLICY LIMIT PORTFOLIO Policy Met? Funds available within 1 year 30.0% min 82% Yes Funds available within 5 years 80.0% min 93% Yes Funds available in 5-10 years 20.0% max 8% Yes �,.�wrr�rn�rnfi i`1�,.,(�riits,�f�¢{rsltr!,t,:�.1 rNi.�§r,C n7�,9a��r��s/ �✓lrfiJ„ fr,d,a`,,ir t,,r J�uG�u�trwt.,.,.tLeVa rrS,WFS>J,�,rufi.,i`,af JilhL,..r,.l.... ,,..,.v.,.dJlar/.Pry,rrr';�/1.v,.,_L.,.,.1JJ.,..�„1�P:,.��;d,�„tiM.7,1X4{,r�t'R..nr 1u.,,N�Grd,�sre.,,;,,r,t,r�L/r, 4 Liquidity Requirements and Funds Available for Investing: Funds immediately available $ 27,679,323 Restrictions&designations: Operating liquidity (a) 14,000,000 Liquidity threshold 14,000,000 Funds available for longer term investing $ 13,679,323 (a) Represents largest one month decline in portfolio balance over the most recent 36 month period doubled;or the equivalent of a 100%cushion �AlwuiPr,IY RL„J�7�A!tf 1,n...,.a, 4..,,,,t.11"��1{.rYr,�)rlre.lsr(,P: yY�„,wr,ku,, -,udkti {,tsG.sklu..0 Vm,r,G !Ys„. ,rrlA,,,_.,tt _,r(.,1�U{,.,.,., i':s „ua.E._ry t �.i,rfll,6;.i, w!£„L1s,!U/z,.7,.>�;Y�,SGf>✓A...dv..r: lal�dIIr,!G 2;..,. Portfolio POLICY Policy Financial Institution Diversification Amount %of Total MAXIMUM Met? US Bank $ 6,978,182 18.3% 50.0% Yes Washington State Treasurer 10,106,158 26.4% 75.0% Yes Columbia Bank 14,044,983 36.7% 50.0% Yes Sound Community Bank 3,063,461 8.0% 50.0% Yes Other financial institutions 4,032,803 10.6% 50.0% Yes Total $ 38,225,587 100.0% Portfolio POLICY Policy Investment Mix Amount %of Total MAXIMUM Met? Depository 3,528,182 9.2% insured by PDPC Yes State Investment Pool 10,106,158 26.4% 75.0% Yes Money market 14,044,983 36.7% insured by PDPC Yes Certificate of Deposit 6,764,280 17.7% insured by PDPC Yes US Agency - 0.0% 75.0% Yes Municipal Bonds 3,781,984 9.9% no limit specified in policy Yes Total 38,225,587 100.0% �r. r r: t✓.. a ':t tz gnu, -r 's ,..t r ,r t. � J � x r✓ � r s �' ! r r r t ,,,ef1 �„f✓r/r4ur..hr, ,afl:,�k,,...:✓�l>�21tJ.�¢,Gnftr 1l `i firn.,,.,fir. d .s.,�....v ltAw.rt.ulMs��v.tu r',.,:U., .l.f.x�,�.,,�.Pl'�„aat�JulGtIG<!� ,ra.,�t.drr,,��.rlrar, �fi�<,.,_n:r5., .,�1.7!>..�r�r �lduJ`fi,.,spas.,, J .,,.,.,..,� t,�,.at...n,.,Ft uc Weighted Average Maturites: Years Performance Analysis Certificates of deposit 3.0 Current portfolio yield 0.96% Benchmarks: Municipal bonds 7.3 6 month treasury 0.14% Total Investments 4.5 2 year treasury 0.23% Total Portfolio 1.3 — Local Govt Invst Pool 0.12% 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. 46 CITY OF TUKWILA Cash & Investment Balances By Fund and Fund Group CASH &INVESTMENT REPORT September 30, 2012 . e :. :. . - >3al�rsces balances ��Iances, SaiBnces o• M 09 30-11 %t19 80,i q CM9 30109 ' 09�3C1-ClB ; General 000 GENERAL 593,027 $2,814,733 $1,867,415 $3,461,270 $6,$70,738 General Total 593,027 2,814,733 1,867,415 3,461,270 6,870,738 Special Revenue _101 HOTEUMOTELTAX _ 499,281 491,902 814,447 609,122 770,177 103 STREET 977,386 794,825 532,900 561,924 430,020 104 ARTERIAL STREET 791,077 7,064,975 10,871,165 6,019,043 10,341,630 105 CONTINGENCY 1,459,569 1,457,451 887,378 883,798 871,919 107 FIRE EQUIP.CUM.RESERVE 1,074,320 917,214 803,391 707,655 121,990 109 DRUG SEIZURE FUND 242,937 160,784 381,706 220,734 - Special Revenue Total 5,044,571 10,887,151 14,290,989 9,002,276 12;535,735 Debt Service Total _ u _ 5,695,584 15,105 835,243 2,233,223 1,956,121 Capital Project 301 LAND ACQ,REC&PARK DEVLPMNT 1,208,991 4,971,148 4,567,390 4,474,364 4,789,935 302 FACILITY REPLACEMENT 2,011,798 2,034,039 2,072,904 2,233,068 2,024,385 303 GENERAL GOVERNMNT IMPROVEMENTS 870,305 851,784 1,949,336 404,169 932,551 304 FIRE IMPACT FEES 318,792 311,493 155,929 13,345 - Capital Project Total _ 4,409,886 8,168,465 8,745,559 7,124,946 7,746,871 Enterprise 400 UTILITY ON ACCT(overpayments) 12,532 49,365 8,824 13,022 - 401 WATER 4,206,698 3,767,940 5,463,603 5,463,541 5,825,185 402 SEWER 1,334,051 760,203 1,703,186 1,679,034 1,830,983 404 WATER/SEWER REVENUE BONDS - - - 394,572 213,466 405 BOND RESERVE - 393,547 393,547 393,547 411 FOSTER GOLF COURSE 545,446 (116,347) 420,957 672,328 1,036,933 412 SURFACE WATER 3,059,552 3,483,618 2,760,828 3,428,087 3,944,187 Enterprise Total __ 9,158,279 7,944,780 10,750;944 12,044,132 13,244,302 Internal Service 501 EQUIPMENT RENTAL 3,941,086 3,838,521 3,561,621 3,346,549 3,616,980 502 INSURANCE 5,944,272 6,211,419 5,785,126 4,165,670 2,709,711 503 INSURANCE-LEOFF 1 1,878,247 1,778,889 1,577,126 1,268,707 992,616 Internal Service Total 11,763,604 11,828,829 10,923,873 8,780;925 7,319,307 Fiduciary 611 FIREMEN'S PENSION 1,474,540 1,478,358 1,486,915 1,483,628 1,482,295 630 METROPOLITAN PARK DISTRICT 39,491 (5,230) - - - 640 AGENCY FUND 46,559 30,862 65,084 119,641 - Fiduciary Total 1,560,591wm 1,503,989 1,551,999 1,603,269 1,482,295' Grand Total 38,225,541 43,163,053 48,966,022 44,250,041 51,155,369 47 CITY OF TUKWILA Treasury Rates and Yield Curves CASH & INVESTMENT REPORT September 30,2012 Rates at September 28, 2012 Rates at December 31, 2011 Closing Closing Yield III II I I Yield Term Rate % Term r• Change Change 3mo 0.10% -0.08% -80% 3mo 0.02% Arno -0.08% -57% 6rtei � 1 Yr 0.17% -0.05% -29% 1 Yr 0.12% 2Yr ' ,fir r' 11 % 0.02% 9% 3Yr 0.31% 0.05% 16% 3Yr 0.36% 0.21% 34% 10Yr 1.65% 0.24% 15% 10Yr 1.89% 3Ur f.a.,�,,.�� 2r✓a„ 0.07% 2% Source: US Department of the Treasury .n^_ Com .aµrisoaf __. .._ ...___._.............w._r.,_ . .__._.. ......_._.._._..�_.w.._.� Comparison Treasury Rates 3.50% ._.._._-------------._m.. ........ .........__.. ... _._ ._._.__..,_.._-_.__.___. .......__...____,.. 3.00% _._._,_.. .. _ _._. ...__.. 2.50% -.._--__-..__.__._. ..,_._,_.__._.. 1 2.00% 09/28/2012 1.50% _..__________.__.._...__... ... ...... ......_..._ .____._.. _...___.________.___ ._ .___.._. ^VIII 12/30/2011 1.00% ---------------- , 0.50% _..___ __.. ___... ___...____.._ 000 _ _e__._... . ....... ........ ......... 0.00% _.__. _ .._....... .. .......... ..,._._._ _. ._... __ ..__. 3mo 6 mo 1 yr 2 yr 3 yr 5 yr 10 yr 30 yr 48