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11/06/2012 04A 3rd Quarter 2012 Treasury Report BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT rr��//�� Item No. I /4- For Meeting of: November 6, 2012 ITEM TITLE: 3rd Quarter 2012 Treasury Report. SUBMITTED BY: Cindy Epperson, Director of Finance and Budget CONTACT Cindy Epperson, Director of Finance and Budget, 576 - PERSON/TELEPHONE: 6771 Tara Lewis, Financial Services Manager, 576 - 6639 SUMMARY EXPLANATION: The Treasury Report for the third quarter of 2012 is attached and consists of the following: 1. Summary and Narrative • 2. Reports • Cash and Investment Summary • Investment Portfolio - Detailed Inventory by Agency • Investment Portfolio - Detail of Activity Schedule of Outstanding General Obligation & Revenue Bonds • Schedule of Interfund Borrowings and Investments 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 9/06/11. Snapshot of the Portfolio The City's Investment Portfolio can be divided into two general categories: 1) A Liquidity Portfolio of overnight investments. This category generally consists only of funds invested in the Local Government Investment Pool (LGIP) managed by the State Treasurer. 2) A Security Portfolio of investments in various securities with maturities normally not to exceed five years except when conditions warrant, and then up to eight years. The effective yield on the City's entire Investment Portfolio for the quarter ending 9/30/12 has held steady at about 1.2% thus far in 2013. No real change is expected this year. The LGIP has actually risen a bit since the beginning of the year, but then it couldn't have gone much lower. It yielded about 0.18% this quarter, up from 2nd and 1 quarters at 0.16% and 0.13% respectively. Despite this rise in rates it continues to be a very poor investment and is utilized solely for emergency cash needs at this point. Overnight rates in our bank accounts yield a higher rate than LGIP and so we have been maintaining larger balances there than we have done historically. • The security portfolio earned 1.30 %, again dropping slightly as higher yielding securities continue to mature or be called and can only be replaced with securities that have much lower yields. Unbelievably, the market yields are still lower than our portfolio averages. Unfortunately this means that our callable securities will continue to be called and we will continue to earn lower returns upon reinvestment. The current: cash balances are higher than one would expect due to the call of several large holdings in September. These balances are in process of being reinvested at unbelievably low rates. The market conditions under which we are operating are likely to hold fairly steady in the near term. The Federal Reserve Chairman announced in September that the Fed will not raise Treasury rates at least until mid -2014. Resolution Ordinance Other (specify) Contract: Mail to: Contract Term: Amount: Expiration Date: Insurance Required? No Funding Source: Phone: APPROVED FOR SUBMITTAL: ag =livir City Manager STAFF RECOMMENDATION: Accept report BOARD /COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download E 2012 3rd Qtr Treasury Services Report • • • City of Yakima Cash and Investment Summary September 30, 2012 Percent of Average Average Description Qty Par Book Portfolio Yield Q2 '12 Yield Q3 '12 Cash Balances on Hand and in Banks NA $ 15,965,533 NA / NA NA Local Government Investment Pool (LGIP) 1 $ 3,798,787 3,798,787 10% 0.16% 0.18% Federal Agency Coupon and Discount 19 33,116,000 32,588,748 88% 1.34% 1.30% Other Investments 2 750,000 815,490 2% 1.78% 1.77% Total Invested 22 $ 37,664,787 $ 37,203,024 100% 1.23% 1.20% Book Balance Purchases Interest Maturities, Calls Book Balance Summary of Investment Activity 7/1/2012 & Deposits Reinvested & Withdrawals 9/30/2012 Local Government Investment Pool (LGIP) $ 6,094,645 $ 2,369 $ 1,773 $ 2,300,000 $ 3,798,787 Federal Agency Coupon and Discount 42,281,470 2,000,000 - 11,692,722 32,588,748 Other Investments 815,490 - - 815,490 • Totals $ 49,191,605 $ 2,002,369 $ 1,773 $ 13,992,722 $ 37,203,025 Page 1 of 5 PDFConvert .1817.1.TSO_Q3_2012.xlsx City of Yakima Investment Portfolio - Inventory by Agency September 30, 2012 Expected Call Most Agency Inv# Face Value Price Coupon Step Yield Maturity Settle Next Call Type Likely Call Federal Farm Credit Bank FFCB 1462 Z000,000 2,000,000 1.290 1.290 9/25/18 9/25/12 9/25/13 Amer 9/25/13 FFCB Totals and Avera 2,000,000 2,000,000 1.290 Federal Home Loan Bank FHLB 1456 2,000,000 2,289,700 5 630 2.050 6/13/16 3/12/12 6/13/16 NC 6/16/16 FHLB Totals and Avera 2,000,000 2,289,700 2.050 Federal Home Loan Mortgage Corporation FHLMC 1438 2,000,000 2,000,000 2.000 2.000 8/8/16 08 /08 /11 2/8/13 lx 2/8/13 FHLMC 1453 2,000,000 2,001,920 1.300 1.250 1/30/17 01/30/12 1/30/14 Qrty 1/30/14 FHLMC 1459 2,000,000 2,000,000 1.350 1.350 11/30.17 5/30.12 5/30/13 Qrty 5/30/13 FHLMC Totals and Avi 6,000,000 6,001,920 1.533 Federal National Management Association FNMA 1445 4,000,000 4,000,000 1.420 1.420 9/20/16 9/20/11 9/20/13 1x 9/20/13 FNMA 1448 1,750,000 1,750,000 1.000 1.000 9/9/15 9/9/11 9/9/13 1x 9/9/13 FNMA 1452 1,000,000 1,000,000 0.850 0.850 12/5/14 12/5/11 12/5/13 1x 12/5/13 FNMA 1460 5,000,000 4,737,030 1.100 1.100 6/1/17 6/28/12 6/1/17 NC 6/1/17 FNMA 1461 2,000,000 2,008,310 0 900 0.760 9/27/16 6/28/12 3/27/14 lx 3/27/14 FNMA Totals and Ave] 13,750,000 13,495,340 1.113 Financing Corporation FICO 1450 2,000,000 1,928,880 1.020 1.020 5/11/15 10/20/11 5/11/15 NC 5/11/15 FICO 1454 722,000 678,045 1.200 1.200 5/2/17 2/2/12 5/2/17 NC 5/2/17 FICO 1455 2,356,000 2,199,953 1.348 1.348 4/6/17 2/29/12 4/6/17 NC 4/6/17 FICO 1457 2,146,000 1,995,422 1.340 1.340 10/6/17 4/25/12 10/6/17 NC 10/6/17 FICO 1458 2,142,000 1,999,488 1.250 1.250 11/30/17 5/21/12 11/30/14 NC 11/30/14 FICO Totals and Avera 9,366,000 8,801,788 1.241 Other Investments CNTY 1442 500,000 565,490 5.000 1.631 7/1/15 8/19/11 7/1/15 NC 7/1/15 YF -CD 1447 250,000 250,000 2.050 2.100 3/30/16 8/31/11 2/28/15 NC 2/28/15 Other Totals and Avera 750,000 815,490 1.775 I JGrand Totals $ 33,866,000 $ 33,404,238 1.313 Average Expected Yield I Pae5 PDFConvert.1817.1.TSO_Q3 sx City of Yakima Investment Portfolio -.- Detail of Activity • III September 30, 2012 Yield Beginning Calls and Ending Date of Agency Inv# Rate Face Value Purchases Maturities Face Value Activity Federal Farm Credit Bureau FFCB 1462 1.290 2,000,000 2,000,000 9/25/12 FFCB Totals - 2,000,000 - 2,000,000 Federal Home Loan Bank FHLB 1456 2.050 2,000,000 2,000,000 FHLB Totals 2,000,000 - - 2,000,000 Federal Home Loan Mortgage Corporation FHLMC 1438 2.000 2,000,000 2,000,000 FHLMC 1440 2.000 1,800,000 (1,800,000) - 8/17/12 FHLMC 1451 1.330 2,000,000 (2,000,000) - 9/21/12 FHLMC 1453 1.250 2,000,000 2,000,000 FHLMC 1459 1.350 2,000,000 2,000,000 FHLMC Totals 9,800,000 - (3,800,000) 6,000,000 Federal National Management Association FNMA 1439 2.000 1,640,000 (1,640,000) - 8/17/12 FNMA 1443 1.000 3,000,000 (3,000,000) - 9/14/12 • FNMA 1445 1 420 4,000,000 4,000,000 FNMA 1446 1.500 2,000,000 (2,000,000) - 9/21/12 FNMA 1448 1.000 1,750,000 1,750,000 FNMA 1449 1.000 1,250,000 (1,250,000) - 9/14/12 FNMA 1452 0.850 1,000,000 1,000,000 FNMA 1460 1.100 5,000,000 5,000,000 FNMA 1461 0.760 2,000,000 2,000,000 FNMA Totals 21,640,000 - (7,890,000) 13,750,000 Financing Corporation FICO 1450 1 020 2,000,000 2,000,000 FICO 1454 1.200 722,000 722,000 FICO 1455 1.348 2,356,000 2,356,000 FICO 1457 1.340 2,146,000 2,146,000 FICO 1458 1.250 2,142,000 2,142,000 FICO Totals 9,366,000 - - 9,366,000 Other Investments Grays County Bonds 1442 5.000 500,000 500,000 Yakima Federal CD 1447 2.050 250,000 250,000 Other Investment Totals 750,000 - - 750,000 (Grand Totals $ 43,556,000 $ 2,000,000 $ (11,690,000) $ 33,866,000 I 0 Page 3 of 5 PDFConvert .1817.1.TSO_Q3_2012.xlsx - City of Yakima Bond Schedule - by Project Group ' September 30, 2012 Final Amount Current Redeemed Date Issued Payment Description Note Issued Balance Due This Quarter General Obligation Bonds 5/8/2007 6/1/2012 PFD Convention Center I Unrefunded portion of 2002 issue $1,280,000 $0 9/7/2004 11/1/2019 PFD Convention Center II Refunded 1996 issue 4,175,000 2,820,000 5/8/2007 5/1/2026 PFD Convention Center III Partial refunding of 2002 issue 4,910,000 4,855,000 8/28/2009 12/1/2018 PFD Capitol Theatre Tax exempt portion 2,055,000 1,515,000 8/28/2009 12/1/2024 PFD Capitol Theatre Build America Bonds (Taxable) 1,755,000 1,755,000 8/28/2009 12/1/2032 PFD Capitol Theatre Build America Bonds (Taxable) 3,225,000 3,225,000 6/17/2003 12/1/2023 Sundome Expansion Deferred Interest- Maturity $2.5M 1,430,528 943,268 6/17/2003 12/1/2013 Law and Justice Center Refunded 1994 issue 4,155,000 985,000 9/7/2004 12/1/2014 Fire Station Refunded 1995 issue (voted issue) 2,300,000 '825,000 8/28/2008 12/1/2021 Fire Apparatus Ladder Truck 760,000 605,000 5/8/2007 5/1/2022 Fire Station Remodel Facility 815,000 600,000 8/28/2008 12/1/2019 Infrastructure Projects Ped crossing, street, infrastructure 2,190,000 1,635,000 5/8/2007 5/1/2022 Downtown Futures Renovate downtown improvements 1,490,000 1,090,000 5/8/2007 5/1/2017 River Road River Road improvements 1,765,000 980,000 12/1/2005 12/1/2015 Parks and Recreation Parks improvements 755,000 340,000 Subtotal General Obligation Bonds $33,060,528 $22,173,268 $0 Certificate of Participation - State of Washington 6/1/2011 12/1/2020 Fire Apparatus Two trucks purchased $576,847 $523,124 Revenue Bonds 12/2/2003 11/1/2014 Wastewater $7,390,000 $1,835,000 5/31/2012 11/1/2023 Wastewater 2003 $10,155,000 refunded May 2012 9,400,000 9,400,000 6/5/2008 11/1/2027 Wastewater 5,440,000 4,770,000 6/5/2008 11/1/2018 Water Refunded 1998 issue 1,883,951 1,385,000 9/4/2004 9/1/1934 Irrigation 5,215,000 4,345,000 120,000 Subtotal Revenue Bonds $29,328,951 $21,735,000 $120,000 1Grand Total $62,389,479 $43,908,268 $120,0001 Page 40 0 PDFConvert.1817.1.TSO_411012.xlsx • • • City of Yakima Interfund Borrowings and Investments September 30, 2012 Original Beginning Ending Description Balance Balance Issued Retired • Balance Investment Held by: Local Improvement District Bonds /Notes $1,432,509 $620,000 $620,000 Equipment Rental • Irrigation Capital Fund 0 859,000 345,000 514,000 Equipment Rental Parks Capital Fund - Upper Kiwanis Park 0 520,000 80,000 0 600,000 Equipment Rental Page 5 of 5 PDFConvert.1817.1.TS0 Q3 2012.xisx