HomeMy WebLinkAbout12/14/2010 07B 3rd Quarter 2010 Treasury Report BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
• AGENDA STATEMENT
Item No - g - 7g
For Meeting of 12 -14 -2010
ITEM TITLE: City of Yakima - 3rd Quarter 2010 Treasury Report
SUBMITTED BY Finance Department
CONTACT PERSON /TELEPHONE: A Rita DeBord, Finance Director / 575 -6070
Tara Lewis, Financial Services Officer / 576 -6639
SUMMARY EXPLANATION-
The Treasury Report for the third Quarter of 2010 consists of the following. (
• Investment Portfolio - Summary
• Investment Portfolio - Detailed Inventory by Investment
• Investment Portfolio - Detail of Activity
• Report of Cash Balances as of September 30, 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
STAFF RECOMMENDATION Accept Report.
BOARD /COMMISSION RECOMMENDATION N/A
COUNCIL ACTION
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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 — 09/30/10
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 9/30/10 was
1 37 %, up from 1.24% for second quarter It should be noted that the improved yield was due
primarily to 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
The Liquidity Portfolio is invested predominately with the State of Washington Investment
Pool and was 31% of the total portfolio as of 09/30/10 The yield continues to be very low at 26
to 30 basis points (i.e. 0 26% to 0 30 %)
The Security Portfolio currently comprises 69% of the total with an average yield of 1 86 %,
compared to 2.47% and 2.44% in the second and first 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 m securities open to investment by the City are bringing
yields to call as low as 0 35%
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 sec 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
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maturity due to its inherent call features. Calls on existing securities allow for a certain amount
Page 2 of 4 12 -14 -10 3rd Qtr 2010 Treasury Rpt
of investment flexibility which can lead to higher current interest income much sooner than if
the securities were non - callable;
(3) By buying US Agency callable securities, the City's security investments have the direct or
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
loss 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
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Page 3 of 4 12 -14 -10 3rd Qtr 2010 Treasury Rpt
• Description of Treasurer's 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.
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Page 4 of 4 12 -14 -10 3rd Qtr 2010 Treasury Rpt
City of Yakima
Investment Portfolio - Summary
September 30, 2010
Percent of Average Average
Investment Type Par Book Quantity Portfolio Yield Q3 Yield Q2
Local Government Investment Pool (LGIP) $ 15,351,001 $ 15,351,001 1 31% 0.28% 0 30%
Federal Agency Coupon Bonds - Callable 34,031,000 34,026,377 15 69% 1.86% 2.47%
Federal Nat'l Mortgage Assoc. -1986 Non - callable 9,065 10,875 1 0% 8 91% 8 91%
Totals $ 49,391,066 $ 49,388,253 17 100% 1 37% 1 24%
Book Balance Purchases Interest Maturities, Calls Balance
Summary of Activity 7/1/2010 & Deposits Reinvested & Withdrawals 9/30/2010
Local Government Investment Pool (LGIP) $ 27,829,119 $ 8,250 $ 13,632 $ 12,500,000 $ 15,351,001
Federal Agency Coupon - Callable 21,452,652 29,776,065 - 17,202,340 34,026,377
Federal Nat'l Mortgage Assoc. - 1986 Non - callable 11,698 824 10,875
Totals $ 49,293,469 $ 29,784,315 $ 13,632 $ 29,703,164 $ 49,388,253
ISO Report TL 2010 - 3rd Quarter
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• Cit akima
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Investment Portfo Inventor by Agency
Inventory Y. g Y
September 30, 2010
Yield to Call Most
Agency Fund Inv# Face Value Price Coupon Step . CaII Maturity Settle Next Call Type Likely Call
Federal Farm Credit Bank
FFCB 479 1365 $ 1,000,000 $ 1,000,000 4.250 4.250 10/15/13 10/15/09 10/15/10 Amer 10/15/10
FFCB 896 1401 4,000,000 4,000,000 2 120 2.120 4/28/15 7/28/10 10/28/10 Amer 10/10/10
FFCB 896 1402 5,000,000 5,000,000 1 350 1 350 7/22/13 7/22/10 10/22/10 Monthly 10/22/10
FFCB 896 1403 2,370,000 2,368,815 1 750 1 770 7/8/14 7/19/10 7/8/11 Amer 7/8/11
FFCB 896 1406 1,500,000 1,500,000 1 750 1 750 8/4/14 8/4/10 2/4/11 Qtry 2/4/11
FFCB 896 1407 2,000,000 2,000,000 1 740 1 740 8/12/14 8/12/10 11/12/10 Amer 11/12/10
FFCB 896 1410 2,120,000 2,120,000 1.250 Step 1.250 8/4/14 8/17/10 11/4/10 Amer 11/4/10
FFCB Totals and Average 17,990,000 17,988,815 1 803
Federal Home Loan Bank
FHLB 896 1342 1,000,000 1,000,000 3150 3150 11/23/11 11/24/08 11/23/10 1x 11/23/10
FHLB 896 1393 2,000,000 2,000,000 2.000 2 000 4/26/13 4/29/10 10/26/10 Monthly 10/26/10
FHLB 896 1408 2,500,000 2,498,125 2 000 2.020 5/18/15 8/18/10 11/18/10 Amer 11/18/10
FHLB 896 1409 690,000 690,000 2 000 2 000 5/18/15 8/18/10 11/18/10 Amer 11/18/10
FHLB 896 1411 250,000 249,875 1 720 1 731 5/26/15 8/26/10 11/26/10 Amer Daily*
FHLB 896 1412 3,000,000 2,999,250 1 450 1 456 9/2/14 9/2/10 3/2/11 Amer 3/2/11
FHLB 896 1414 3,000,000 3,000,000 2.050 2 050 9/28/15 9/28/10 10/28/10 Monthly 10/28/10
FHLB Totals and Average 12,440,000 12,437,250 1 972
Federal Home Loan Mortgage Corporation
FHLMC 896 1371 500,000 499,375 1 000 Step 1 020 10/15/12 11/16/09 10/15/10 Qtrly 10/15/11
Federal National Management Association
FNMA 896 1396 251,000 250,937 2.125 2.126 7/26/13 5/18/10 10/26/10 Monthly 10/26/10
FNMA 896 1399 470,000 470,000 2.000 Step 2.000 7/14/15 7/14/10 1/14/11 Qtry 1/14/11
FNMA 896 1400 2,000,000 2,000,000 1 750 Step 1 750 7/27/15 7/27/10 7/27/11 Qtry 7/27/11
FNMA 896 1405 380,000 380,000 1 875 Step 1 875 8/4/15 8/4/10 2/4/11 Qtry 2/4/11
FNMA Totals and Average 3,101,000 3,100,937 1 834
Grand Total $34,031,000 $34,026,377 1 856
Coupon Steps * Note: Investment #1411 was
Inv # To: 2010 2011 2012 2013 2014 2015 not called as expected on 11/26.
1371 Oct 15 1 000% 1 000% 1 500% NA NA NA From that date forward it is
1399 Jul 14 NA NA 2.000% 2.500% 3 000% 3 75/4 75% subject to call at any time.
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%
1410 Feb /Aug 3 NA NA 1.25/1 5% 1 75/2.0% 2.5/3.0% NA
TSO Report TL 2010 - 3rd Quarter
City of Yakima
Investment Portfolio - Detail of Activity
September 30, 2010
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
FFCB 896 1394 2.033 1,500,000 (1,500,000) - 7/26/10
FFCB 896 1397 2.000 2,000,000 (2,000,000) - 9/2/10
FFCB 896 1398 2.000 1,125,000 (1,125,000) - 9/3/10
FFCB 896 1401 2.120 4,000,000 4,000,000 7/28/10
FFCB 896 1402 1 350 5,000,000 5,000,000 7/22/10
FFCB 896 1403 1 770 2,370,000 2,370,000 7/19/10
FFCB 896 1406 1 750 1,500,000 1,500,000 8/4/10
FFCB 896 1407 1 740 2,000,000 2,000,000 8/12/10
FFCB 896 1410 1.250 2,120,000 2,120,000 8/17/10
FFCB Totals 5,625,000 16,990,000 (4,625,000) 17,990,000
Federal Home Loan Bank
FHLB 896 1318 3 100 1,000,000 (1,000,000) - 8/25/10
FHLB 896 1342 3 150 1,000,000 1,000,000
FHLB 896 1385 2.443 1,250,000 (1,250,000) - 7/6/10
FHLB 896 1391 2.300 1,500,000 (1,500,000) - 8/12/10
FHLB 896 1392 1 875 1,000,000 (1,000,000) - 7/29/10
FHLB 896 1393 2.000 2,000,000 2,000,000
FHLB 896 1395 2 797 1,500,000 (1,500,000) - 7/6/10 ID
FHLB 896 1408 2.020 2,500,000 2,500,000 8/18/10
FHLB 896 1409 2.000 690,000 690,000 8/18/10
FHLB 896 1411 1 731 250,000 250,000 8/26/10
FHLB 896 1412 1 456 3,000,000 3,000,000 6/2/10
FHLB 896 1414 2.050 3,000,000 3,000,000 9/28/10
FHLB Totals 9,250,000 9,440,000 (6,250,000) 12,440,000
Federal Home Loan Mortgage Corporation
FHLMC 896 1382 2.125 1,000,000 (1,000,000) - 9/24/10
FHLMC 896 1371 1 020 500,000 500,000
FHLMC Totals 1,500,000 - (1,000,000) 500,000
Federal National Management Association
FNMA 896 1376 3 000 1,000,000 (1,000,000) - 7/29/10
FNMA 896 1377 3 000 1,500,000 (1,500,000) - 8/3/10
FNMA 896 1378 3 050 1,335,000 (1,335,000) - 8/18/10
FNMA 896 1380 2.000 1,000,000 (1,000,000) - 9/24/10
FNMA 896 1396 2.126 251,000 251,000
FNMA 896 1399 2.000 470,000 470,000 7/14/10
FNMA 896 1400 1 750 2,000,000 2,000,000 7/27/10
FNMA 896 1404 1 500 500,000 (500,000) - 7/27 - 9/1/10
FNMA 896 1405 1 875 380,000 380,000 8/4/10
FNMA Totals 5,086,000 3,350,000 (5,335,000) 3,101,000
Grand Totals $20,961,000 $29,780,000 $(17,210,000) $34,031,000
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ISO Report TL 2010 - 3rd Quarter
CITY OF YAKIMA
REPORT OF CASH BALANCES
September 30, 2010
Key Bank 4,390,178 34
Bank of New York (Fiscal Agent)(1) 0 00
U S Bank (Housing loan repayments) 131,935 59
Yakima Federal Savings and Loan Association (Housing) 167,200 92
Bank of America (Claims Control) 2,515,299 65
U S Bank (Payroll Control) 10,893 51
Inmate Trust - Key Bank 13,481 79
Inmate Welfare - Key Bank 7,734 80
Municipal Court - Key Bank 125,819 33
Petty Cash (2) 3,475 00
Police - Special Investigations(2) 7,500 00
Change Funds (3) 3,780 00
Travel Advance 3,700 00
Total Cash On Hand and
In Bank Accounts 9130110 $7,380,998 93
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
City of Yakima
Schedule of General Obligation and Revenue Bond Activity
For the Period 07/01/2010 through 09/30/2010
GENERAL OBLIGATION BONDS
Original Final 07/01/2010 Principal Amount 09/30/2010
Fund Date Issued Description Outstanding Payment Balance Redeemed Issued Balance
272 2002 PFD Convention Center I - unrefunded $ 1,280,000 5/31/08 $ 460,000 $ - $ - $ 460,000
283 6/17/2003 Series B Law and Justice -1994 refunded 4,155,000 11/30/09 1,910,000 - - 1,910,000
284 9/7/2000 Fire -1995 Refunded 2,300,000 11/30/10 1,330,000 - - 1,330,000
281 11/30/2001 Parks and Recreation 755,000 1/31/11 490,000 - - 490,000
281 5/7/2003 River Road / 16th Fruitvale 1,765,000 4/30/13 1,315,000 - - 1,315,000
272 8/28/09 Series A PFD Capital Theatre Expansion - tax exempt 2,055,000 11/30/14 1,880,000 - - 1,880,000
287 8/31/2000 PFD Convention Center II -1996 refunded 4,175,000 10/31/15 3,420,000 - - 3,420,000
281 8/27/2004 Infrastructure Projects 2,190,000 11/30/15 1,980,000 - - 1,980,000
281 8/27/2004 Fire Truck 760,000 11/30/17 705,000 - - 705,000
281 8/27/2004 Fire Station 92nd Facility 815,000 4/30/18 690,000 - - 690,000
281 5/7/2003 Downtown Futures 1,490,000 4/30/18 1,260,000 - - 1,260,000
281 6/17/2003 Series A Sundome Expansion 1,430,528 11/30/19 1,173,812 - - 1,173,812
272 8/28/09 Series B PFD Capital Theatre Expansion - BABs, taxable 1,755,000 11/30/20 1,755,000 - - 1,755,000
272 5/7/2003 PFD Convention Center III- 2002 Partial refunded 4,910,000 4/30/22 4,880,000 - - 4,880,000
272 8/28/09 Series B PFD Capital Theatre Expansion - BABs, taxable 3,225,000 11/30/28 3,225,000 - - 3,225,000
Subtotal $ 33,060,528 $ 26,473,812 $ - $ - $ 26,473,812
REVENUE BONDS
Original Final 07/01/2010 Principal Amount 09/30/2010
Fund Date Issued Description Outstanding Payment Balance Redeemed Issued Balance
493 12/2/2003 Series A Wastewater $ 7,390,000 10/31/10 $ 3,310,000 $ - $ - $ 3,310,000
484 6/4/2004 Water/Wastewater -1998 refunded 1,516,049 10/31/14 1,025,000 - - 1,025,000
486 6/4/2004 Water -1998 refunded 1,883,951 10/31/14 1,720,000 - - 1,720,000
493 12/2/2003 Series B Wastewater 10,155,000 10/31/19 10,155,000 - - 10,155,000
488 6/4/2004 Wasterwater 5,440,000 10/31/23 5,175,000 - - 5,175,000
491 9/1/2000 Irrigation 5,215,000 8/31/30 4,695,000 115,000 - 4,580,000
Subtotal $ 31,600,000 $ 26,080,000 $ 115,000 $ - $ 25,965,000
Grand Total $ 64,660,528 $ 52,553,812 $ 115,000 $ - $ 52,438,812
updatill erp 12/9/2010 1 50 PM TSO Q3 2010 council.xls
ID III
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LID CASH BALANCES LID BONDS AND NOTES PAYABLE
As Of Quarter Ending September 30, 2010 As Of Quarter Ending September 30, 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 17,671 40 218,481 02 89,000 00 0 00 0 00 89,000 00 Equipment Rental
1057 - N 84th & Hawthorne 7,938 13 179,550 01 82,500 00 0 00 0 00 82,500 00 Equipment Rental
105.8- N 95th, 94th Place 28,141.95 160,868 69 85,000 00 0 00 0 00 85,000 00 Equipment Rental
1060 - 85th and Kail 0 00 375,880 89 204,843 97 0 00 0 00 204,843.97 Equipment Rental
1061- Simpson Lane 100 00 497,727.90 420,818 96, 0 00 0 00 420,818.96 Equipment Rental
Totals $53,851 48 $1,475,260 46 $882,162.93 $0 00 $0 00 $882,162.93
ERP 11/19/2010 12.17 PM LID 3rd Quarter 2010 xls Page 1 of 1
LID BONDS / NOTES PAYABLE
vs.
LID GUARANTY FUND
AS OF QUARTER ENDING September 30, 2010
Outstanding Bonds and Notes Payable (1) $882,162.93
x 10%
10% of Outstanding Balance $88,216.29
Guaranty Fund #221 Balance $79,875 13
10% of Outstanding L1D's Bonds and Notes Payable ($88,216.29)
Amount above (below) targeted lninunuln (2) ($8,341 16)
(1) This is an investment by the City's Equipment Rental Fund.
(2) The shortfall in the minimum guarantee balance will be satisfied overtime and
since there are no external investors who rely on this guarantee fund, this tuning
difference is not significant.
ERP 11/1, 12.16 PM LID 3rd Quarter 2010 xis Pagel
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