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01/19/2021 04C 2020 4th Quarter Treasury Report to\'4\lyy tbxk ik 1 PPP d g. P A P 1 PPi • ittYlltYlt.\ta. BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 4.C. For Meeting of: January 19, 2021 ITEM TITLE: 2020 4th Quarter Treasury Report SUBMITTED BY: Steve Groom, Director of Finance and Budget Kimberly Domine', Finance Services Division Manager SUMMARY EXPLANATION: The Treasury Report for the fourth quarter of 2020 is attached and consists of the following: 4th Quarter Treasurer's Report • Cash and Investments • Long term Debt • I nterfund Borrowings ITEM BUDGETED: NA STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: Review only. Submitted for routine transparency and accountability. ATTACHMENTS: Description Upload Date Type D uar erly Treasure e rt 11 12021 r Me o 2 `"7 ; \ ••`t ., i •t1 • a �-is ;F,K":uxw FINANCE Date: January 7, 2021 W f.” To: Mayor and City Council CERDECAiratXCEILOCE Bob Harrison, City Manager =°`• art OF YAKIMA From: Steve Groom, Finance Director n,.•..,., Kimberly Domine, Finance Division Manager 1."1 rr_1 Jennifer Morris, Financial Services Officer 'a: Re: 2020 - 4th Quarter Treasury Report This report is to transparently report the City's cash position and investment activity for the quarter just ended. Each investment is in compliance with the City's Investment Policy, State Statues and City Municipal Code. The City's investment policy was reviewed and approved by City Council on March 5, 2019; and the policy received a Certification of Excellence from the Washington Public Treasurer's Association on April 10, 2019. Total Cash and Investments at Quarter-end total $112.8 million: $14.7 million in depository banks, $64.5 million in the State Pool, and $33.7 million invested. The following chart shows the 5-year trend of total cash and investments month by month (showing only permanent accounts comparable year over year). City of Yak:ir,a Liquid Cash and investments Hfstorr $12QOC6,000 - $10O,OQ,000 . . $sc:u<to,ce .. so ................................ �h . K= 1C .k �• k i ♦ 1. S �( ry .Q cr w x� r �Foe r � ,o°�o`� 3 FINANCE The City's Investment Portfolio The City's investment activities are governed by State regulations and the City of Yakima's Investment Policy. All investments are in full compliance with the City's Investment Policy, State Statues and City Municipal Code. Calls or Maturities. During last quarter, the following matured or were called at full value: • 1502 $2,122,000 Resolution Funding Corp. matured 10/15/2020 • 1536 $1 ,000,000 FHLMC matured 10/28/2020 • 1534 $1 ,000,000 US Treasury matured 11/30/2020 • 1542 $1 ,000,000 FFCB matured 12/22/2020 • 1507 $1 ,000,000 FHLB called 12/28/2020 Purchases: During the last quarter, no investments were purchased; proceeds from all calls and maturities were invested in the State Local Government Investment Pool. Portfolio and Benchmark Yield and Maturity: Avg. weighted yield of City investments, excluding LGIP: 0.84% LGIP State Pool 30-day yield: 0.14% Weighted average maturity of City investments, excluding LGIP: 236 days Weighted average maturity of LGIP State Pool 30-day yield: 47 days Execution of each investment transaction contemplated ongoing cash flows from city operations, debt obligations, liquid and maturing securities, and contingencies to meet the City's future cash flow requirements. The City's Investment Portfolio consists of three general tiers which coincide with the primary considerations of prudent investing: 1) The Safety portion of the Portfolio consists of funds invested in the Local Government Investment Pool (LGIP, or State Pool) managed by the State Treasurer, available same- day. This allows for seasonal fluctuations, primarily the April/October inflows of Property Tax and the outflows of debt service and capital projects. 2) The Liquidity portion of the Portfolio consist of demand deposit (checking) accounts at banks which are qualified public depositaries, protected above FDIC-insured balances through the actions of the Washington State Public Deposit Protection Commission (PDPC). 3) The Yield portion of the Portfolio consists of a diversified portfolio of Agencies, Treasuries and/or other authorized investments with staggered maturities of up to five years. Based on analysis of historical cash reserves and budgetary planning, this segment will not be subject to seasonal spending and continues to be safely invested long-term. 2 4 FINANCE Current Rates. As of December 30, 2020, the fixed income market is still plateaued at record low levels, evidenced by a yield curve that is extremely low and flat. The difference between the 1- year Treasury at 0.10% and the 5-year Treasury at 0.36% was 26 basis points. The 30-day yield of the State Pool was at 0.14%, with a 47-day avg. maturity and expected to stay low. Economic Outlook. The Federal Reserve had lowered the rates in March 2020 lowered to zero, during the Coronavirus pandemic, and signaled it will likely keep rates low for three years. Unemployment, nationally, is recovering and the economy is experiencing less volatility; it is unclear how long nor how deep the current conditions will exist. Strategy Notes. The City of Yakima's Actual % Policy % 1= investments are not typically actively LGIP 64,463,552 66% 100% 's traded, meaning that no attempt to Treasuries 5,000,000 5% 100% "buy low and sell high" or "time the Agencies 23,667,000 24% 100% market" is made. Investments Corporates 5,000,000 5% 15% purchased with the intent of providing 98,130,552 100% investment income are intended to be held to maturity, relying on following a prudent course of action for income rather than predicting market direction. Debt Activity All debt payments were paid out as scheduled. A comprehensive city-wide debt report is attached with current balances. Interfund Borrowings and Investments Borrowing between funds is temporary in nature, reviewed periodically by staff and Council, amended as circumstances change. All debt payments continue as scheduled. 3 City of Yakima Cash and Investment Summary December 31 , 2020 Current Prior Quarter Prior Year Description 12/31/2020 9/30/2020 12/31/2019 Cash Balances on Hand in Banks $ 14,699,272 $ 14,735,513 $ 18,154,002 Local Government Investment Pool (LGIP) 64,472,094 51 ,447,363 19,786,229 Investment Portfolio 33,667,000 39,789,000 64,184,000 Total Investments 98,139,094 91 ,236,363 83,970,229 Total Cash and Investments $ 112,838,366 $ 105,971 ,876 $ 102,124,231 Beg Balance Purchases Interest Maturities, Calls End Balance Summary of Investment Activity 9/30/2020 & Deposits Reinvested & Withdrawals 12/31/2020 Local Government Investment Pool (LGIP) $ 51 ,447,363 $ 13,000,000 $ 24,731 $ - $ 64,472,094 Investment Portfolio 39,789,000 - - (6,122,000) 33,667,000 Total Investments $ 91 ,236,363 $ 13,000,000 $ 24,731 $ (6,122,000) $ 98,139,094 Page 1 of 8 2020 Q4 TSO spreadsheet 01-04-2021 City of Yakima Distribution of Cash and Investments as of 12/31/2020 Depository Banks, $14,699,272 , 13% Investment o, 33 ,6P6o7r,tof000r , 30% Atiogiggiugs11111111131 asse11111111.1.1.1.1.1.1.....aaA. 321111151 spestogatillillagagilliti1111 ispeoggpEullizmunvinv;;;;;;811"111813 sogaggagagpaggetotElitlatillgitill gotoggeoggsgsg0111101011!!!! p1111811111111181"""""111111BEE;Si 11802wn=- e12g:0g2:y20s2tElatwo. .:-"gx=-- gogatoatunsat;:;:;:;l2:24245,,E'''''''-- Local Government Investment Pool, $64,472,094 , 57% Page 2 of 8 City of Yakima Investment Portfolio - Inventory by Agency December 31 , 2020 Expected Days to Call Agency Inv# CUSIP Face Value Price Coupon Yield Settle Maturity Maturity Market Type Moodys S&P Fitch RFCSP 1500 76116FAG2 2,667,000 2,499,062 2.200 2.200 01/25/18 1/15/21 15 2,666,923 NC Aaa AA+ AAA UST 1549 912828Q37 1,000,000 997,695 1.625 1.496 2/4/20 3/31/21 90 1,002,644 NC Aaa NA AAA FFCB 1518 3133EKGY6 1,000,000 1,000,000 2.375 2.375 4/15/19 4/15/21 105 1,006,879 NC Aaa AA+ AAA BNY 1521 06406FAB9 1,000,000 989,800 2.050 2.574 4/30/19 5/3/21 123 1,004,985 NC Al A AA- UST 1543 912828WY2 1,000,000 1,009,453 2.250 1.660 12/11/19 7/31/21 212 1,012,266 NC Aaa AA+ AAA FHLMC 1539 3137EAEC9 1,000,000 991,002 1.125 1.650 11/14/19 8/12/21 224 1,006,207 NC Aaa AA+ AAA FFCB 1527 3133EKP67 1,000,000 996,900 1.625 1.780 9/17/19 9/17/21 260 1,011,092 NC Aaa AA+ AAA USB 1515 91159HHP8 1,000,000 997,300 2.625 2.723 3/18/19 1/24/22 389 1,023,139 1X Al A+ AA- MSFT 1512 594918BW3 1,000,000 996,920 2.400 2.575 3/15/19 2/6/22 402 1,020,425 NC Aaa AAA AA+ FHLB 1556 313378CR0 1,000,000 1,032,367 2.250 0.630 3/6/20 3/11/22 435 1,025,437 NC Aaa AA+ NA FNMA 1550 3135G0T45 1,000,000 1,009,506 1.875 1.422 2/14/20 4/5/22 460 1,022,171 NC Aaa AA+ AAA FFCB 1523 3133EKLR5 1,000,000 999,100 2.250 2.281 5/16/19 5/16/22 501 1,028,920 NC Aaa AA+ AAA FAMCA 1522 31422BFF2 1,000,000 1,000,000 2.350 2.350 5/9/19 6/1/22 517 1,031,338 NC Aaa AA+ AAA FHLB 1509 313383WD9 1,000,000 1,013,146 3.125 2.750 12/19/18 9/9/22 617 1,050,467 Amer Aaa AA+ AA+ FFCB 1519 3133EKHN9 1,000,000 997,450 2.330 2.406 4/18/19 10/18/22 656 1,039,063 NC Aaa AA+ AAA FFCB 1551 3133EA7E2 1,000,000 1,014,130 1.960 1.430 2/14/20 11/7/22 676 1,033,261 NC Aaa AA+ AAA FHLB 1544 313381BR5 1,000,000 1,006,250 1.875 1.660 12/11/19 12/9/22 708 1,033,600 NC Aaa AA+ AAA FNMA 1541 3135GOT94 1,000,000 1,023,490 2.375 1.610 11/20/19 1/19/23 749 1,045,652 NC Aaa AA+ AAA FFCB 1557 3133EG5Y7 1,000,000 1,045,401 2.230 0.650 3/6/20 2/2/23 763 1,042,717 NC Aaa AA+ AAA AAPL 1516 037833AK6 1,000,000 991,000 2.400 2.634 4/8/19 5/3/23 853 1,048,899 NC AA1 AA+ - WMT 1513 931142EK5 1,000,000 1,026,800 3.400 2.730 3/15/19 6/26/23 907 1,076,224 NC Aa2 AA AA UST 1545 9128284X5 1,000,000 1,039,063 2.750 1.660 12/11/19 8/31/23 973 1,069,180 NC Aaa AA+ AAA FAMCA 1508 3132X06C0 1,000,000 1,010,972 3.050 2.801 12/19/18 9/19/23 992 1,076,308 NC Aaa AA+ AAA FFCB 1537 3133EK4X1 1,000,000 997,924 1.600 1.654 11/6/19 11/1/23 1,035 1,038,269 NC Aaa AA+ AAA FAMCA 1552 31422BSD3 1,000,000 1,004,430 1.590 1.470 2/14/20 1/10/24 1,105 1,040,309 NC NA NA NA FNMA 1540 3135G0V34 1,000,000 1,032,055 2.500 1.710 11/14/19 2/5/24 1,131 1,070,899 NC Aaa AA+ AAA UST 1553 9128286R6 1,000,000 1,034,063 2.250 1.413 2/14/20 4/30/24 1,216 1,067,969 NC Aaa NA AAA FAMCA 1533 31422BGA2 1,000,000 1,022,900 2.150 1.634 10/18/19 6/5/24 1,252 1,062,713 NC NA NA NA UST 1546 9128282U3 1,000,000 1,008,789 1.875 1.660 12/11/19 8/31/24 1,339 1,060,078 NC Aaa NA AAA FFCB 1538 3133EK6J0 1,000,000 994,700 1.625 1.736 11/8/19 11/8/24 1,408 1,049,869 NC Aaa AA+ AAA FHLB 1554 3130A3GE8 1,000,000 1,058,979 2.750 1.480 2/14/20 12/13/24 1,443 1,095,029 NC Aaa AA+ NA FAMCA 1555 31422BRT9 1,000,000 1,011,943 1.750 1.495 2/14/20 1/3/25 1,464 1,053,861 NC NA NA NA Subtotal 32 33,667,000 33,852,589 Avg. 2.19% 34,916,793 LGIP LGIP NA 64,472,094 64,472,094 0.300 0.300 NA NA 1 64,472,094 NC (Grand Totals $ 98,139,094 $ 98,324,683 0.95% 235 $ 99,388,887 Page 3 of 8 2020 Q4 TSO spreadsheet 01-04-2021 City of Yakima Investment Portfolio by Issuer at 12/31/2020 FAMCA, 5,000,000, 5% US T, 5,000,000, 5% FHLB , 4,000,000, 4% FNMA, 3,000,000, 3% FFCB 8,000,000 8% RFCSP 2,667,000 3% 0 11111111 ifsessas FHLMC, 1,000,000, 1,000,000, 1% AAPL 1 ao 00a 1% stsssss BNY, 1,000,000, 110 NEM MSFT 1,000,000 1% USB, 1000000, 1% WMT, 1,000,000, 1% Diversifying by issuer reduces the credit risk the city is subject to from any one issuer as well as diversifies market price fluctuations which can vary by issuer. LGIP, 64,472,094, 66% Page 4 of 8 2020 Q4 TSO spreadsheet 01-04-2021 Page 5 of 8 City of Yakima Investment Portfolio Maturity Distribution at 12/31/2020 $4,000,000 $a,soo,000 Diversifying by maturity reduces the re-investment risk the city is subject to in any $3,000,000 given month when an investment matures and the principal is reinvested at rates 52,5oo,000 available at that moment. $2,000,000 $1,500,000 $1,000,000 Ssoo,000 $o ,0 ,0 0. 0 0' titi 0 7i). '13' titi ti3 0 0 0 n?j 1" bry D ?,rt cy0 0 c �' i � � � aar J � a � J 1Jp 4, 4, q. +o Sa a cf. a 4a \ 5e, a0 5¢ p .a 4.a Page 5 of 8 2020 Q4 TSO spreadsheet 01-04-2021 10 City of Yakima Investment Portfolio- Detail of Activity December 31, 2020 Beginning Additions and Calls and Ending Agency Inv# Face Value Purchases Maturities Face Value Farmer Mac FAMCA 1508 1,000,000 - - 1,000,000 FAMCA 1522 1,000,000 - - 1,000,000 FAMCA 1533 1,000,000 - - 1,000,000 FAMCA 1552 1,000,000 - 1,000,000 FAMCA 1555 1,000,000 - - 1,000,000 FAMCA Total 5,000,000 - - 5,000,000 Federal Farm Credit Bureau FFCB 1518 1,000,000 - - 1,000,000 FFCB 1519 1,000,000 - - 1,000,000 FFCB 1523 1,000,000 - - 1,000,000 FFCB 1527 1,000,000 - - 1,000,000 FFCB 1537 1,000,000 - - 1,000,000 FFCB 1538 1,000,000 - - 1,000,000 FFCB 1542 1,000,000 - (1,000,000) - FFCB 1551 1,000,000 - - 1,000,000 FFCB 1557 1,000,000 - - 1,000,000 FFCB Total 9,000,000 - (1,000,000) 8,000,000 Federal Home Loan Bank FHLB 1507 1,000,000 - (1,000,000) - FHLB 1509 1,000,000 - - 1,000,000 FHLB 1544 1,000,000 - - 1,000,000 FHLB 1554 1,000,000 - - 1,000,000 FHLB 1556 1,000,000 - - 1,000,000 FHLB Total 5,000,000 - (1,000,000) 4,000,000 Resolution Funding Corporation RFCSP 1500 2,667,000 - - 2,667,000 RFCSP 1502 2,122,000 - (2,122,000) - RFCSP Total 4,789,000 - (2,122,000) 2,667,000 Federal Home Loan Mortgage Corporation FHLMC 1536 1,000,000 - (1,000,000) - FHLMC 1539 1,000,000 - - 1,000,000 FHLMC Total 2,000,000 - (1,000,000) 1,000,000 Federal National Management Association FNMA 1540 1,000,000 - - 1,000,000 FNMA 1541 1,000,000 - - 1,000,000 FNMA 1550 1,000,000 - - 1,000,000 FNMA Total 3,000,000 - - 3,000,000 US Treasury US Treasury 1534 1,000,000 - (1,000,000) - US Treasury 1543 1,000,000 - - 1,000,000 US Treasury 1545 1,000,000 - - 1,000,000 US Treasury 1546 1,000,000 - - 1,000,000 US Treasury 1549 1,000,000 - - 1,000,000 US Treasury 1553 1,000,000 - - 1,000,000 US Treasury 6,000,000 - (1,000,000) 5,000,000 Corporate Notes AAPL 1516 1,000,000 - - 1,000,000 MSFT 1512 1,000,000 - - 1,000,000 WMT 1513 1,000,000 - 1,000,000 USB 1514 1,000,000 - 1,000,000 BNY 1521 1,000,000 - 1,000,000 Corporate Total 5,000,000 - - 5,000,000 Subtotal 39,789,000 - (6,122,000) 33,667,000 Other Investments - - - - LGIP(State Pool) LGIP 51,447,363 13,024,731 - 64,472,094 Other Investment Totals 51,447,363 13,024,731 - 64,472,094 !Grand Totals $ 91,236,363 $ 13,024,731 $ (6,122,000) $ 98,139,094 Page 6 of 8 2020 Q4 TSO spreadsheet 01-04-2021 City of Yakima Long Tenn Debt Schedule-by Project Group December 31,2020 Date Issued Maturity Description Note Amount of Issue Current Balance General Obligation Bonds 6/17/2003 12/1/2023 Sundome Expansion Deferred Interest-Maturity$25M 1,430,528 179,062 6/20/2013 12/1/2028 Street Project Demonstration(Refunded) Various City street improvements 3,500,000 2755,876 6/9/2014 6/1/2024 Street Resurfacing Project Streets improvements 13,140,000 5,995,000 9/24/2018 6/1/2035 Soccer Complex(Refunded) City portion of SOZO Sports Complex 4,440,127 4,071,827 9/24/2018 12/1/1942 2018 Aquatic Center YMCA City portion of Aquatic Center 8,009,873 7,948,649 4/21/2020 12/1/2022 2020 Refunding Bonds,Downtown Future 2020 Refunding Bonds,Downtown Futures 260,000 253,500 4/21/2020 12/1/2021 2020 Refunding Bonds,Fire Apparatus 2020 Refunding Bonds,Fire Apparatus 140,000 70,000 4/21/2020 12/1/2022 2020 Refunding Bonds,WV Fire Station 2020 Refunding Bonds,WV Fire Station 140,000 136,500 4/21/2020 12/1/2032 2020B Capital Theatre 09 Refunded 2020B Capital Theatre 09 Refunded 4,910,000 4,535,000 4/21/2020 12/1/2044 2020B Convention Center Addition 2020B Convention Center Addition 12,620,000 12,405,000 4/21/2020 12/1/2044 2020B Convention Center Addition III Ref 2020B Convention Center Addition III Refunded 2,495,000 2,450,000 Subtotal General Obligation Bonds 64,040,528 40,800,414 Certificate of Participation-State of Washington 3/19/2013 6/1/2023 Fire Apparatus One truck 310,414 109,270 9/28/2017 6/1/2027 Energy Project 2017 Energy Project(lighting) 921,863 701,900 7/21/2020 6/1/2035 Energy Project 2020 Energy Efficiency Project(lighting) 1,415,000 1,415,000 9/28/2017 6/1/2027 Fire Aerial&Pump App Fire Aerial 1,268,053 965,674 Subtotal Certificates of Participation 4,492,178 3,191,844 Revenue Bonds 43942 49279 2020 Ref 04 Irrigation 2020 Ref 04 Irrigation 3,260,000 3,085,000 43942 46722 2020 Ref 08 WS Rev 2020 Ref 08 WS Rev 2,590,000 2,395,000 5/31/2012 11/1/2023 Wastewater Refunded 2003$10,155,000 issue 9,400,000 3,230,000 Subtotal Revenue Bonds 25,905,000 8,710,000 Intergovernmental Loans 8/14/2009 7/1/2028 PC-08-951-052 2009 Railroad Grade Separation 3,000,000 1,320,802 5/6/2010 6/1/2034 41000030-0 2010 Railroad Grade Separation 1,149,841 936,756 6/17/2014 5/1/2034 Comm Center Move City portion of County GO Bonds 1,716,500 1,325,000 9/30/2015 6/1/2023 '15 Yak Co SIED-21st Ave/Airport 2015 Yakima Co SIED Loan-21st Ave/Airport 307,000 166,099 6/1/2016 6/1/2027 '16 Yak Co SIED-SOZO 2016 Yakima Co SIED Loan-SOZO 900,000 671,090 11/21/2017 6/1/2024 '17 Yak Co SIED-YV Brewing Project 2017 Yakima Co SIED Loan-YV Brewing Project 61,580 52,388 7/17/2018 6/1/2029 '18 Yak Co SIED-River Rd. 2018 Yakima Co SIED-River Rd Improvements/Aquatics Center 500,000 472,304 6/1/2001 6/1/2021 PW-01-691-071 2001 Fruitavale Neighborhood Sewer 1,466,250 77,625 9/1/2003 6/1/2023 PW-03-691-027 2003 Naches WTP Improvements 2,694,500 404,175 6/27/2005 10/1/2025 SRF-04-65104-037 2005 Naches River WTP Filter Rehab 966,772 235,363 12/30/2005 6/1/2025 PW-05-691-064 2005 River Road Sewer 2,307,000 621,229 4/30/2007 6/1/2027 PW-07-962-019 2007 Ultra Violet Disinfection 2,300,000 849,722 4/15/2009 6/1/2028 PC-08-951-051 2009 New Water Well 2,257,200 969,191 10/10/2011 3/31/2033 4110000E 2011 Energy Efficiency 503,558 364,810 8/1/2011 7/1/2034 41200019 2012 Industrial Waste Anaerobic 590,350 459,548 6/1/2012 6/1/2031 PC-12-951-065 2012 Wastewater Treatment Plan 5,000,000 2,959,871 10/11/2012 6/1/2037 PC-13-961-059 2012 Industrial Sewer Extensions 2,000,000 1,382775 8/5/2013 6/1/2032 PC-13-961-074 2013 Automated Reading System 5,000,000 3,157,895 12/12/2013 10/1/2034 DM-11-952-038 2013 Design WTP Lagoons 3,514,800 2,460,360 Subtotal Intergovernmental Loans 36,235,351 18,887,002 °Grand Total 130,673,056 71,589,260 II Page 7 of 8 2020 04 ISO spreadsheet 01-04-2021 City of Yakima Interfund Borrowing December 31,2020 Original Beginning Ending Description Balance Balance Issued Retired Balance Local Improvement District Bonds/Notes $ 1,432,509 $ 34,072 $ - $ 17,606 $ 16,466 Equipment Rental Reserve Fund 153- Public Safety Communications 450,000 150,000 - 150,000 - Equipment Rental Reserve Total across all funds 1,882,509 184,072 - 167,606 16,466 Fund 151 - Public Safety Communications- Interfund Loan The Public Safety Communications Fund borrowed from the Equipment Replacement and Reserve Fund to provide working capital while they recover from the excess cash outflow caused by the move to the new Communications Center last year.A$150,000 payment was made in 2019. The final payment$150,000 will be paid in December 2020. Page 8 of 8 2020 Q4 TSO spreadsheet 01-04-2021