HomeMy WebLinkAbout03/15/2011 11B 4th Quarter 2010 Treasury Report BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. * 118
For Meeting of March 15, 2011
ITEM TITLE: City of Yakima — 4 Quarter 2010 Treasury Report
SUBMITTED BY: Finance Department
CONTACT PERSON/TELEPHONE: Rita DeBord, Finance Director / 575 -6070
Tara Lewis, Financial Services Officer / 576 -6639
SUMMARY EXPLANATION:
The Treasury Report for the fourth Quarter of 2010 consists of the following: (
• Investment Portfolio - Summary
• Investment Portfolio - Detailed Inventory by Agency
• Investment Portfolio — Detail of Activity
• Report of Cash Balances as of December 31, 2010
• Schedule of Outstanding General Obligation & Revenue Bonds
• LID Cash Balances, & LID Bonds & Notes Payable
• • LID Bonds /Notes Payable vs. LID Guaranty Fund
(1) Refer to page 4 for a description of Treasurer's Reports.
Continued on next page...
Resolution Ordinance Other (Specify) Report
Contract Mail to (name and address):
Phone:
Funding Source
APPROVED FOR SUBMITTAL:
City Manager
ager
STAFF RECOMMENDATION: Accept Report.
BOARD /COMMISSION RECOMMENDATION: N/A
COUNCIL ACTION:
•
• The City's Investment Portfolio
The City's investment activities are governed by State regulations and the City of Yakima's
Investment Policy, as revised 3 /24/09.
Snapshot of the Portfolio — 12/31/10
The City's Investment Portfolio can be divided into two general buckets:
1) A Liquidity Portfolio of overnight investments..
2) A Security Portfolio of investments in various securities with maturities out to five years.
The effective yield on the City's entire Investment Portfolio for the quarter ending 12/31 /10 was
.99 %, down from 1.37% in the third quarter and 1.24% in the second quarter. It should be noted
that the yield in the third quarter was slightly buoyed by investing in bonds with an expected
short call period. The strategy rests on the expectation that the bonds will be called due to a
higher coupon rate than the market interest rates. The risk associated with such a strategy is
that if the rates rebound suddenly, the bonds will not be called and the bonds will go to maturity
at a rate lower than market. Due to this risk, the City has used this strategy in a limited manner.
In the fourth quarter, as rates are starting to even out, some of these callable bonds have in
fact, not been called and are therefore expected to go to maturity.
The Liquidity Portfolio is invested predominately with the State of Washington Investment Pool
and was 39% of the total portfolio as of 12/31/10. The yield continues to be very low at 22 to 27
basis points (i.e. 0.22% to 0.27 %). Despite such low rates, due to the risk of callable bonds
going to maturity at low rates, the liquid portion of the portfolio was allowed to grow as bonds
III matured or were called so that the City may take advantage of slightly higher rates expected in
the spring and summer.
The Security Portfolio currently comprises 61% of the total with an average yield of 1.46 %,
compared to 1.86% and 2.47% in the third and second quarters respectively. It is made up of
predominately US Government Agency callable securities, along with a legacy $10,000
investment in a FNMA Mortgage Backed Security ( "MBS "). Average yields on the Security
Portfolio will continue to fall as bonds are called or mature and can be reinvested only at much
lower rates. Current rates available in securities open to investment by the City have been
yielding rates as low as .35 %, but appear to be rallying slightly with improved predictions of
economic recovery. The impact of rising fuel costs will likely dampen this trend.
Investment Composition Strategy
The City looks to maintain an Investment Portfolio with a Liquidity Portfolio sufficient to cover
cash flow needs and provide a cushion for unusual and emergency expenditures.
The Security Portfolio contains predominately callable US government agency securities.
Callable agency securities serve three purposes:
(1) The City earns a higher coupon (yield) than it would have earned from a non - callable
security with the same maturity date and same issuer;
(2) The actual experienced maturity of a callable security is usually shorter than its stated
maturity due to its inherent call features. Calls on existing securities allow for a certain amount
of investment flexibility which can lead to higher current interest income much sooner than if the
securities were non - callable;
Page 2 of 4 3-15-11 4th Qtr 2010 Treasury Rpt
(3) By buying US Agency callable securities, the City's security investments have the direct or ip
implied backing of the US Government and as such, any of the City's securities could be sold
immediately at current market prices for cash if the need arose.
The City owns securities issued by US government- backed entities such as the Federal Home
Loan Bank ( "FHLB "), Freddie Mac ( "FHLMC "), Fannie Mae ( "FNMA "), and Federal Farm Credit
( "FFCB "). While the public stock of FHLMC and FNMA are currently suffering, they do have
lines of credit with, investment by, and the support of the US Treasury. The City's risk of Toss
due to credit exposure from any of these agencies is thought to be miniscule.
The City does not invest in any Structured Investment Vehicles (SIV's), Collaterized Mortgage
Obligations ( CMO's), or Collateralized Debt Obligations (CDO's). These types of investments,
along with certain asset - backed Commercial Paper have much higher price and demand
volatility. The City has not purchased these types of instruments.
•
Page 3 of 4 3 -15 -114th Qtr 2010 Treasury Rpt
•
Description of Treasurer's Reports
• Investment Portfolio - Summary
This report shows a summary of investments by type including the percentage of each
category relative to the total portfolio. A summary of activity shows by category the
balances at the beginning of the reporting period, activity that occurred during the
quarter and ending balances as of the report date.
• Investment Portfolio — Detailed Inventory by Agency
This report lists all of the City's major security investments excluding funds in the State
of Washington Investment pool as of the report date.
• Investment Portfolio — Detail of Activity
This report contains detailed lists of security purchases, maturities and calls during the
reporting period.
• Report of Cash Balances
A list of cash balances in each of the City's major bank accounts.
• Schedules of General Obligation & Revenue Bonds Payable
This report indicates principal payments made during the reporting period, and the
® current balances of the City's bonded debt.
• LID Cash Balances, & LID Bonds & Notes Payable
A Local Improvement District is an instrument utilized by citizens to fund specific local
community improvements. This report identifies outstanding obligations relative to Local
Improvement Districts' bonds and notes payable.
• LID Bonds /Notes Payable vs. LID Guaranty Fund
Once a Local Improvement District bond or note is issued, there is a required minimum
reserve which the City must maintain so long as the bond or note is outstanding. This
report compares the current Local Improvement Districts outstanding debt to the
required reserve balance.
•
Page 4 of 4 3 -15 -114th Qtr 2010 Treasury Rpt
ill III •
City of Yakima
Investment Portfolio - Summary
December 31, 2010
Percent of Average Average
Investment Type Par Book Quantity Portfolio Yield Q4 Yield Q3
Local Government Investment Pool (LGIP) $ 18,562,076 $ 18,562,076 1 39% 0.24% 0.28%
Federal Agency Coupon Bonds - Callable 29,515,000 29,503,928 17 61% 1.46% 1.86%
Federal Nat'l Mortgage Assoc. -1986 Non - callable 8,458 8,655 1 0% 5.19% 5.19%
Totals $ 48,085,534 $ 48,074,659 19 100% 0.99% 1.37%
•
Book Balance Purchases Interest Maturities, Calls Book Balance
Summary of Activity 10/1/2010 & Deposits Reinvested & Withdrawals 12/31 /2010
Local Government Investment Pool (LGIP) $ 15,351,001 $ 7,000,000 $ 11,075 $ 3,800,000 $ 18,562,076
Federal Agency Coupon - Callable 34,026,377 19,535,988 - 24,058,437 29,503,928
Federal Nat'l Mortgage Assoc. - 1986 Non - callable 8,985 - - 330 8,655
Totals $ 49,386,363 $ 26,535,988 $ 11,075 $ 27,858,767 $ 48,074,659
•
TSO Report TL Page 1 of 7 2010 - 4th Quarter
City of Yakima
Investment Portfolio - Inventory by Agency .
December 31, 2010
Expected Call Most
Agency Fund Inv# Face Value Price Coupon • Step . Yield Maturity Settle Next Call Type Likely Call
Federal Farm Credit Bank •
FFCB 896 1403 $ 2,370,000 $ 2,368,815 1.750 1.783 7/8/14 7/19/10 7/8/11 Amer 7/8/14
FFCB 896 1406 • 1,500,000 1,500,000 1.750 1.750 8/4/14 8/4/10 2/4/11. Qtry 8/4/14
FFCB Totals and Average 3,870,000 3,868,815 1.770
Federal Home Loan Bank
FHLB 896 1411 250,000 249,875 1.720 1.731 5/26/15 9/2/10 7 days Amer 5/26/15
FHLB 896 1412 . 3,000,000 2,999,250 1.450 1.456 9/2/14 9/2/10 7 days Amer 9/2/14
FHLB 896 1421 5,000,000 5,000,000 1.250 1.250 12/13/15 12/13/10 1/13/11 Monthly 12/13/15
FHLB 896 1422 2,000,000 2,000,000 2.125 2.125 12/14/15 12/14/10 1/14/11 Monthly 4/15/11
FHLB 896 1424 2,000,000 2,000,000 1.550 1.550 12/3/14 12/3/10 6/3/11 Qtry . 6/3/11
FHLB Totals and Average 12,250,000 12,249,125 1.502
Federal Home Loan Mortgage Corporation
FHLMC 896 1415 . 500,000 501,675 1.750 0.361 • 1/28/13 11/01/10 1/28/11 1x 1/28/13
FHLMC 896 1420 . 2,000,000 1,996,500 1.700 ' 1.736 11/16/15 11/16/10 2/16/11 Monthly 11/16/15.
FHLMC 896 1418 2,000,000 1,999,000 0.800 • 0.816 11/4/13 11/04/10 8/4/11 lx 11/4/13
FHLMC Totals and Average . 4,500,000 4,497,175 1.174
Federal National Management Association .
FNMA 896 1399 470,000 . 470,000 2.000 Step 2.960 7/14/15 7/14/10 1/14/11 Qtry 4/14/11
FNMA 896 1400 2,000,000 2,000,000 1.750 Step 1.750 7/27/15 7/27/10 7/27/11 Qtry 7/27/15
FNMA 896 1405 380,000 380,000 1.875 Step 1.875 8/4/15 8/4/10 2/4/11 Qtry 8/4/15
FNMA ' 896 1416 1,000,000 1,001,200 0.800 0.505 9/28/12 11/01/10 3/28/11 Qtry 9/28/12
FNMA 896 1417 1,045,000 1,047,613 1.000 0.391 3/29/11 11/01/10 3/29/11 1x 3/29/11
FNMA 896 1419 2,000,000 2,000,000 1.000 1.000 11/26/13 11/26/10 5/26/11 Qtry 11/26/13
FNMA 896 1423 . 2,000,000 1,990,000 1.125 Step 2.068 ` 10/29/15. 11/22/10 4/29/11 Qtry 10/29/15
FNMA Totals and Average 8,895,000 8,888,813 1.421
Grand Total $29,515,000 $29,503,928 1.463 •
Coupon Steps
Inv # To: 2010 - 2011 2012 2013 2014 2015
1399 Jul 14 NA • NA 2.000% 2.500% 3.000% 3.75/4.75%
1400 'Jul 27 NA 1.750% ' NA 2.250% 3.000% 4.000%
1405 Aug 4 NA 1.875% 2.125% _ 2.375% 2.875% 3.250%
1423 Oct 29 NA NA 1.125% 1.625% 2.500% 3.500%
TSO Re�TL Page 7 2010 - 4ttjrter
City of Yakima
Investment Portfolio - Detail of Activity
For the Quarter Ended December 31, 2010
Coupon Beginning Calls and Ending Date of
Agency Fund Inv# Rate Face Value Purchases Maturities Face Value Activity
Federal Farm Credit Bureau
FFCB 479 1365 4.250 $ 1,000,000 $ - $ (1,000,000) $ - 10/15/10
FFCB 896 1401 2.120 4,000,000 (4,000,000) - 10/28/10.
FFCB 896 1402 1.350 5,000,000 (5,000,000) - 10/22/10
FFCB 896 1403 1.750 2,370,000 • 2,370,000
FFCB 896 1406 1.750 1,500,000 1,500,000
FFCB 896 1407 1.740 2,000,000 (2,000,000) - 11/12/10
FFCB 896 1410 1.250 2,120,000 (2,120,000) -. 11/4/10
FFCB Totals 17,990,000 - (14,120,000) 3,870,000
Federal Home Loan Bank
FHLB 896 1342 3.150 1,000,000 (1,000,000) - 11/23/10
FHLB 896 1393 2.000 2,000,000 (2,000,000) - 10/26/10
FHLB 896 1408 2.000 2,500,000 (2,500,000) - 11/18/10
FHLB 896 1409 2.000 690,000 (690,000) - 11/18/10
FHLB 896 1411 1.720 250,000 250,000
FHLB 896 1412 1.450 3,000,000 3,000,000
FHLB 896 1414 2.050 3,000,000 (3,000,000) - 10/28/10
FHLB 896 1421 1.250 5,000,000 5,000,000 12/13/10
FHLB • 896 1422 2.125 2,000,000 2,000,000 12/14/10
FHLB 896 1424 1.550 2,000,000 2,000,000 12/3/10
FHLB Totals 12,440,000 9,000,000 (9,190,000) 12,250,000
Federal Home Loan Mortgage Corporation
FHLMC 896 1371 1.000 500,000 (500,000) - 10/15/10
FHLMC 896 1415 1.750 500,000 500,000 11/1/10
FHLMC 896 1418 0.800 2,000,000 2,000,000 11/4/10
FHLMC 896 1420 1.700 2,000,000 2,000,000 11/16/10
FHLMC Totals 500,000 4,500,000 (500,000) 4,500,000
Federal National Management Association .
FNMA 896 1396 2.126 251,000 (251,000) - 10/26/10
FNMA 896 1399 2.000 470,000 470,000
FNMA 896 1400 1.750 2,000,000 2,000,000
FNMA 896. 1405 1.875 380,000 380,000
FNMA 896 1416 0.800 1,000,000 1,000,000 11/1/10
FNMA 896 1417 1.000 1,045,000 1,045,000 11/1/10
FNMA 896 1419 1.000 2,000,000 2,000,000 11/26/10
FNMA 896 1423 1.125 2,000,000 2,000,000 11/22/10
FNMA Totals 3,101,000 6,045,000 (251,000) 8,895,000
Grand Totals $34,031,000 $19,545,000 $(24,061,000) $29,515,000
•
TSO Report TL Page 3 of 7 2010- 4th Quarter
CITY OF YAKIMA
REPORT OF CASH BALANCES
December 30, 2010
Key Bank 7,211,350.19
Bank of New York (Fiscal Agent)(1) 0.00
U.S. Bank (Housing loan repayments) 176,854.91
Yakima Federal Savings and Loan Association (Housing) 167,839.88
Bank of America (Claims Control) 1,406,073.13
U. S. Bank (Payroll Control) 7,837.54
Inmate Trust -• Key Bank 14,330.95
Inmate Welfare - Key Bank 9,048.35
Municipal Court - Key Bank 178,690.87
Petty Cash (2) 3,475.00
Police - Special Investigations(2) 7,500.00
Change Funds (3) 3,780.00
Travel Advance 4,212.97
Total Cash On Hand and
In Bank Accounts 12/31/10 $9,190,993.79
1 Balance is zero as all coupons and principal has been paid to bond holders.
2 Represents imprest amounts. Cash on hand plus receipts for paid items equals this amount
per Resolution R2008 -32
3 Change for customers established by Resolution R2008 -32
qtr cash bal /tab Page 4 of 7 2010 - 4th Quarter
• • •
CITY OF YAKIMA
Schedule of General Obligation and Revenue Bond Activity
For the Period 10/01/2010 through 12/31/2010
GENERAL OBLIGATION BONDS
•
Original Beginning Principal Amount Ending
Fund Date Issued Description Outstanding Final Payment Balance Redeemed Issued Balance
272 2002 PFD Convention Center I - refunded $ 1,280,000 6/1/2012 $ 460,000 $ - $ - $ 460,000
283 6/17/2003 Series B Law and Justice - 1994 refunded 4,155,000 12/1/2013 1,910,000 455,000 - 1,455,000
284 9/7/2000 Fire - 1995 Refunded . 2,300,000 12/1/2014 1,330,000 250,000 - 1,080,000
281 11/30/2001 Parks and Recreation 755,000 2/1/2015 490,000 75,000 - 415,000
281 5/7/2003 River Road / 16th Fruitvale 1,765,000 5/1/2017 1,315,000 - - 1,315,000
272 8/28/09 Series A PFD Capital Theatre Expansion - tax exempt 2,055,000 12/1/2018 1,880,000 180,000 - 1,700,000
287 8/31/2000 PFD Convention Center II - 1996 refunded 4,175,000 11/1/2019 3,420,000 295,000 3,125,000
281 8/27/2004 Infrastructure Projects 2,190,000 12/1/2019 1,980,000 170,000 - 1,810,000
281 8/27/2004 - Fire Truck 760,000 12/1/2021 705,000 50,000 - 655,000
281 8/27/2004 Fire Station 92nd Facility 815,000 5/1/2022 690,000 - - 690,000
281 5(7/2003 Downtown Futures 1,490,000 5/1/2022 1,260,000 - - 1,260,000
281 6/17/2003 Series A Sundome Expansion 1,430,528 12/1/2023 1,173,812 118,125 - 1,055,687
272 8/28/09 Series B PFD Capital Theatre Expansion - BABs, taxable 1,755,000 12/1/2024 . 1,755,000 - - 1,755,000
272 5/7/2003 PFD Convention Center III- 2002 Partial refunded 4,910,000 _ 5/1/2026. 4,880,000 - - 4,880,000
272 8/28/09 Series B PFD Capital Theatre Expansion - BABs, taxable 3,225,000 12/1/2032 3,225,000 - - 3,225,000
subtotal $ 33,060,528 $ 26,473,812 $ 1,593,125 $ - $24,880,687
REVENUE BONDS .
Original Beginning Principal Amount Ending
Fund Date Issued Description Outstanding Final Payment Balance Redeemed Issued Balance
493 12/2/2003 Series A Wastewater $ 7,390,000 11/1/2014 $ 3,310,000 $ 725,000 $ - $ 2,585,000
484 6/4/2004 Water /Wastewater - 1998 refunded 1,516,049 11/1/2018 1,025,000 500,000.. - 525,000
486 6/4/2004 Water - 1998 refunded 1,883,951 11/1/2018 1,720,000 165,000 = 1,555,000
493 12/2/2003 Series B Wastewater 10,155,000 11/1/2023 10,155,000 - - 10,155,000
488 6/4/2004 Wasterwater 5,44.0,000 11/1/2027 5,175,000 200,000 - 4,975,000
491 9/1/2000 Irrigation 5,215,000 9/1/2034 4,580,000 - - 4,580,000
subtotal $ 31,600,000 $ 25,965,000 $ 1,590,000 $ - $24,375,000
Grand Total $ 64,660,528 $ 52,438,812 $ 3,183,125 $ - $49,255,687
TSO Report erp Page 5 of 7 . 2010 - 4th Quarter
LID CASH BALANCES LID BONDS AND NOTES PAYABLE
As Of Quarter Ending December 31, 2010 As Of Quarter Ending December 31, 2010
LID Current LID Original LID Bond/Note Amount New LID LID Bond/Note Invested By
District District Bond Beginning Quarter Bonds/Notes Districts Ending Quarter
No. Cash Balance Assessment Balance Paid Added Balance
1056 - S 7th, 8th, 9th 0.00 218,481.02 89,000.00 22,000.00 0.00 67,000.00 Equipment Rental
1057 - N 84th & Hawthorne 609.87 179,550.01 82,500.00 5,000.00 0.00 77,500.00 Equipment Rental
1058 - N.95th, 94th Place 211.29 160,868.69 85,000.00 22,000.00 0.00 63,000.00 Equipment Rental
1060 - 85th and Kail 0.00 375,880.89 204,843.97 4,843.97 0.00 200,000.00 Equipment Rental
1061- Simpson Lane 765.29 497,727.90 420,818.96 11,818.96 0.00 409,000.00 Equipment Rental
Totals $1,586.45 $1,475,260.46 $882,162.93 $65,662.93 $0.00 $816,500.00
Tso Report erp Page 6 of 7 2010 - 4th Quarter
411 411 III
City of Yakima
LID BONDS / NOTES PAYABLE
vs.
LID GUARANTY FUND
AS OF QUARTER ENDING December 31, 2010
Outstanding Bonds and Notes Payable (1) $816,500.00
x10%
10% of Outstanding Balance $81,650.00
Guaranty Fund #221 Balance $79,986.59
10% of Outstanding LID's Bonds and Notes Payable ($81,650.00)
Amount above (below) targeted minimum (2) ($1,663.41)
(1) This is an investment by the City's Equipment Rental Fund.
(2) The shortfall in the minimum guarantee balance will be satisfied over time and
since there are no external investors who rely on this guarantee fund, this timing
difference is not significant.
TSO Report erp Page 7 of 7 2010 - 4th Quarter