HomeMy WebLinkAboutFS 2013-03-19 Item 2A - Report - 2012 4th Quarter Cash and InvestmentTO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance and Safety Committee
FROM: Peggy McCarthy, Finance Director
BY: Vicky Carlsen, Deputy Finance Director
DATE: March 13, 2013
SUBJECT: Fourth Quarter 2012 Cash & Investment Report
ISSUE
The fourth 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 December 31, 2012, the portfolio totaled $37.5 million comprised of $27.1 million in cash and
cash equivalents and $10.4 in longer term investments. The portfolio balance declined by $0.7
million from September 30, 2012 balance of $38.2 million. One municipal bond matured with a
par value of 185,000 in the 3rd 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 .92%. Considering the portfolio's
weighted average maturity was 1.3 years, and the yield on the cash & cash equivalent accounts
was .36%, the portfolio yield of .92% is quite favorable. The yield has been sustained by the
4.22% 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 4th quarter 2012 is $357,643 and has exceeded the 2012 budget of
$182,585. However, investment income for 2012 is less than 2011 investment income of
$439,128 due to a decline in the portfolio balance.
Market value changes have no realized effect on the portfolio performance because
investments are held to maturity consistent with the City's policy. However, it is worth rioting
that, because of the decline in interest rates of the year, the market value of the portfolio
increased from a market value gain of $299,416 at December 31, 2011 to a market value gain
of $426,071.
1
INFORMATIONAL MEMO
Page 2
Policy Compliance and Liquidity Analysis
As of the end of the 4th quorter, 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 & lnvestment Balances
The General Fund balance shows a moderately healthier year-end balance in cash and
investments than the previous 2 years. This can be attributed to an increase in sales tax
revenue in 4th quarter that beat projections and continued restraint on spending. The Arterial
Street Fund balance shows a continual decline which was anticipated as funds have been
expended for the Southcenter Access P ject (LID) and the Southcenter Parkway p jecta.
Due to the economic situation of the last several yearo, cash and investment balances for
governmental funds, in total, have been trending downward. If reimbursement for the LID had
occurred in 2012 rather than 2013. year-end balances would have been at levels comparable
with 2010 and 2011.
Investment Environment
Interest rates have remained low throughout 2012 and are expected to remain low until 2015.
Reports have indicated that Fed Officials are temporarily tying the interest rate to the
unemployment rate. Current plans are to keep the federal funds rates near zero until the
jobless rates drops to 6.5 percent, as long as inflation expectations remain around 2 percent.
The portfolio will be managed to take advantage of investment opportunities as they arise.
RECOMMENDATION
Presentation is for information only.
ATTACHMENTS
Cash and lnvestment Report
Policy Compliance & Liquidity Analysis
Cash and lnvestment Balances by Fund
Treasury Rates and Yield Curves
W:11 Repot Info Memo Investment Report 2012Q4.clocx
2
Agency / Issuer
CITY OF TUKWILA
CASH & INVESTMENT REPORT
December 31, 2012
(a) (c) (d)
Rating Purchase Maturity Term Par Book Yield to Annualized
Moodys Investment Type Date Date Yrs Value Balance Maturity Return
CASH & CASH EQUIVALENTS
US Bank
Washington State Treasurer
Columbia Bank
Depository Various (b) $ 3,654,594 $ 3,654,594 (e) 5 54.574
LGIP Investment Pool Various
Money market
Various
(b)
(b)
0.5%
9,410,376 9,410,376 (f) 9,482
0.23%
14,055,527 14,055,527 (f) 33,793
0.3%
Total Cash & Cash
Equivalents
27,120,497 27,120,497 0.36% 97,850
INVESTMENTS
Certificates of Deposit
US Bank Certificate of Deposit 2/15/2010 2/15/2013 3.0 3,450,000 3,450,000 1.44% 49,680
Sound Community Bank Certificate of Deposit 3/4/2011 3/4/2014 3.0 3,000,000 3,074,090 1.40% 42,000
Regal Bank Certificate of Deposit 6/20/2012 12/20/2014 2.5 250,000 250,000 1.30% 3,250
CERTIFICATES OF DEPOSIT -- TOTAL
3.0 6,700,000 6,774,090 1.42% 94,930
Taxable Municipal Bonds
City of Marysville, sinking Al LTGO Refunding 11/23/2010 12/1/2017 5.5 535,000 583,012 3.37% 19,647
2014 -2017, ave 5.5 years
Washington State Convention Aa3 Lodging Tax Bonds 11/30/2010 7/1/2016 5.6 500,000 505,073 3.60% 18,183
Center Facility
UW Biomedical Center Aal Revenue Bonds 12/14/2010 7/1/2017 6.6 500,000 504,793 4.05% 20,444
UW Biomedical Center Aal Revenue Bonds 12/14/2010 7/1/2019 8.6 500,000 504,775 4.70% 23,724
Douglas County, ESD, sinking Aal UTGO 12/23/2010 12/1/2020 8.9 1,135,000 1,152,336 4.55% 52,431
2018 -2020, ave 9 yrs
Port of Anacortes
Al LTGO
12/17/2010 9/1/2020 9.7 340,000 329,484 5.00% 16,474
TOTAL MUNICIPAL BONDS 7.6
3,510,000 3,579,473 4.22%
150,904
Total Investments
4.6
10,210;000
0,353,563
2.3
7% 245,834
TOTAL CASH, CASH EQUIVALENTS & INVESTMENTS
1.3 $ 37,330,497 $ 37,474,060
0.92% 1 $ 343,684
Current Portfolio Yield
(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.
(e) Represents earning credit from US Bank. City earns interest up to the amount of fees.
(f) Represents rate in effect for period ending this report.
3
CITY OF TUKWILA
Policy Compliance & Liquidity Analysis
CASH & INVESTMENT REPORT
December 31, 2012
Liquidity Analysis & Maturity Diversification
Funds immediately available
Fixed Maturity Investments, maturing n:
0-90 days after Report Date
91-180 days after Report Date
Investments maturing in 1 year or less
Investments maturing
Investments maturing
Investments maturing
Investments maturing
in 1-3 years
in 3-5 years
in 5-7 years
in 7-10 years
Investments maturing in more than 1 year
and less than 10 years.
TOTALS
Investment Policy Parameters
Funds available within 1 year
Funds available within 5 years
Funds available in 5- 10 years
r&A":$104,111411relchori
ff ANANriPtai, 'OAAN 1101k, A
,11.1"+11,1i110101:;111
Portfolio
Amount
$ 27,120,497
3,450,000
3,450,000
3,324,090
1,592,878
504,775
1,481,820
6,903,563
$ 37,474,060
Liquidity Requirements and Funds Available for Investing:
(a)
no
4
Funds immediately available
Restrictions & designations:
Operating liquidity (a) 14,000,000
Liquidity threshold 14,000,000
Funds available for longer term investing $ 13,120,497
Represents largest one month decline in portfolio balance over the most recent 36 month period doubled; or the
Available
Within 1 Year
$ 27,120,497
3,450,000
$ 30,570,497
82%
POLICY LIMIT PORTFOLIO
30.0% min 82%
80.0% min 95%
20.0% max 6%
Tirki0A'0,
$ 27,120,497
1,}1;
As of Report Date
Available Available in
Within 5 5 - 10 Years
Years
$ 27,120,497
3,450,000
3,324,090
1,592,878
504,775
1,481,820
$ 35,487,465 $ 1,986,595
95% 6%
Policy Met?
Yes
Yes
Yes
equivalent of a 100% cushion.
faM1MBEM,
114 .444i
WWI
010.1104114,14'11
Financial Institution Diversification
US Bank
Washington State Treasurer
Columbia Bank
Sound Community Bank
Other financial institutions
Total
Investment Mix
Depository
State Investment Pool
Money market
Certificate of Deposit
US Agency
Municipal Bonds
Total
11;
PAO;
*4411.
Weighted Average Maturites:
Certificates of deposit
Municipal bonds
Total Investments
Total Portfolio
POLICY MAXIMUM
Policy Met?
Portfolio
Amount
$ 7,104,594
9,410,376
14,055,527
3,074,090
3,829,473
$ 37,474,060
Portfolio
Amount
3,654,594
9,410,376
14,055,527
6,774,090
3,579,473
37,474,060
Years
3.0
7.6
4.6
1.3
3.5
Yes
11/01.01,1151r, ;"%'.
Note: Cash and cash equivalents are available within one day and are factored
into the Total Portfolio weighted average maturity.
% of Total
19.0%
25.1%
37.5%
8.2%
10.2%
100.0%
% of Total
9.8%
25.1%
37.5%
18.1%
0.0%
9.6%
100.0%
:1"i";0111410.1,441,ii
POLICY
MAXIMUM
50.0%
75.0%
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
4:A1
Performance Analysis
Current portfolio yield
Benchmarks:
6 month treasury
2 year treasury
Local Govt Invst Pool
;or
Policy
Met?
Yes
Yes
Yes
Yes
Yes
Policy
Met?
Yes
Yes
Yes
Yes
Yes
Yes
0.92%
0.11%
0.25%
(f) 0.23%
CITY OF TUKWILA
Cash & Investment Balances By Fund and Fund Group
CASH & INVESTMENT REPORT
December 31, 2012
Governmental Funds
iteit
General Total 3,910,343 10.0% 3,554,218
Special Revenue Total 4,026,683 -52.9% 8,556,188
Debt Service Total 3,291,381 -1.2% 3,330,312
Capital Project Total 3,692,185 -19.1% 4,565,730
Grand TotaJ 14,920,592 ;
ekiiat
2.6% 3,462,672
-34.6% 13,083,348
109077.7% 3,050
-46.0% 8,457,000
—Addligliii 1: ' ' difir
-17.7% 4,208,419 -45.8% 7,759,376
• 62.9% 8,029,596 -34.0% 12,172,369
-101.3% (239,393) -124.5% 975,129
25.1% 6,762,348 14.2% 5,921,555
--"''70,tol60ro7onMeki•o* 429
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
Total Cash & Investments Governmental Funds
2008
Enterprise and Internal Service Funds
2009
2010
2011
2012
Enterprise 400 UTILITY ON ACCT (cnerpayments) $ 13,700 $ 14,551 $
401 WATER 4,636,192 4,533,184 5,767,311 5,790,806 5,895,729
4O2 SEWER 1,584,312 997,382 1,726,671 1,662,379 2,079,181
404 WATER/SEWER REVENUE BONDS - 209,313 208,910
405 BOND RESERVE - 393,547 393,547
411 FOSTER GOLF COURSE 309,581 32,012 57,199 181,626 395,908
412 SURFACE WATER 2,344,887 2,097,280 2,273,623 2,045,265 3,410,121
Enterprise Total 8,874,973 7,659,857 9,838,504 10,297,487 12,383,395
Internal Service 501 EQUIPMENT RENTAL 4,143,781 3,515,168 3,324,596 3,321,879 3,513,780
502 INSURANCE 5,988,312 6,435,672 5,678,846 4,548,635 2,786,419
503 INSURANCE - LEOFF I 1,921,032 1,822,186 1,657,049 1,347,955 1,053,348
Internal Service Total 12,053,124 11,773,025 10,660,491 9,218,469 7,353,547
Graflii T 1 20 0007 19,432,882 20,498,996 19,515,957 19,736,942
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
Total Cash & Investments Enterprise and Internal Service Funds
2008
2009
2010
2011
2012
Enterprise
El Internal Serivce
5
CITY OF TUKWILA
Treasury Rates and Yield Curves
CASH & INVESTMENT REPORT
December 31, 2012
Rates at December 31, 2012
3mo
pmt
1
2Yr
3Yr
10Yr
0.05%
0.16%
0.36%
1.78%
Source: US Department of the Treasury
3.50% t---
3.00% F.
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
6
Rate %
Change Change
0.03% 60%
0.05% 45%
0.04% 25%
0.00% 0%
0.00% 0%
-0.11% -15%
-0.11% -6%
0.06% 2%
Rates at December 30, 2011
3mo
Smc
1 Yr
2Yr
3Yr
r
10Yr
Comparison of Treasury Rates
3mo 6 mo 1 yr
2 yr 3 yr 5 yr 10 yr 30 yr
0.02%
0.12%
0.36%
1.89%
12/31/2012
12/30/2011