HomeMy WebLinkAbout11/05/2013 05B 3rd Quarter 2013 Treasury ReportBUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting of: 11/5/2013
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ITEM TITLE:
SUBMITTED BY:
SUMMARY EXPLANATION:
3rd Quarter 2013 Treasury Report.
Cindy Epperson, Director of Finance and Budget
Tara Lewis, Financial Services Manager
The Treasury Report for the third quarter of 2013 is attached and consists of the following:
1. Memo: Summary and Narrative
2. Reports
• Cash and Investment Summary
• Investment Portfolio -Detailed Inventory by Agency
• Investment Portfolio — Detail of Activity
• Bonded Debt Schedule
• Schedule of Interfund Borrowings and Investments
Resolution: Ordinance:
Other (Specify):
Contract: Contract Term:
Start Date: End Date:
Item Budgeted: Amount:
Funding Source/Fiscal
Impact:
Strategic Priority:
Insurance Required? No
Mail to:
Phone:
APPROVED FOR
SUBMITTAL:
City Manager
RECOMMENDATION:
Accept report
ATTACHMENTS:
Description Upload Date Type
2013 Q3 Summary and Narrative 10/22/2013 Cover Memo
2013 Q3 Treasury Reports 10/22/2013 Presentation
Memorandum
To: The Honorable Mayor and Members of City Council
From: Cindy Epperson, Director of Finance and Budget
Tara Lewis, Financial Services Manager
Date: November 5, 2013
Re: 2013 — 3rd Quarter Treasury Report: Summary and Narrative
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 September 6, 2011.
The City's Investment Portfolio can be divided into two general categories:
1) A Liquidity Portfolio of overnight investments. This category generally consists of funds
invested in the Local Government Investment Pool (LGIP) managed by the State Treasurer,
and currently, a savings account held by a local financial institution.
2) An Investment Portfolio of time deposits and 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 9/30/13 remained
fairly steady at approximately 1%. The $5 million street bond proceeds were invested in the Pool
and are currently being spent down. Due to the abysmal rate of return, only a small emergency pot
of money is kept in the Pool. More cash is being kept on hand in the City's operations bank
accounts because such balances currently earn approximately twice the rate of the LGIP.
Interest rates are starting to trend upwards, but mostly due to the Federal Government's inaction
with regard to the debt ceiling and federal budget. This rise in rates will make the debt market more
expensive for the City as we approach the need for a revenue bond issue for the upcoming and
ongoing Wastewater projects and a possible general obligation issue for street improvements. It will
also keep our current investments from being called thus degrading the liquidity we have
experienced over the past three years where 5 year investments were being called in as little as 90
days from the date of issue.
The LGIP yield has continued its downward slide, but it is about as close to zero as it can get. It is
essentially an overnight pool so one cannot expect much in this market. It yielded about 0.12% this
quarter as opposed to 0.14% in the second quarter. The LGIP is considered to be a very poor
investment and is utilized solely for emergency cash needs and currently, to keep designated loan
proceeds separate from other cash holdings. 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. We have also acquired a savings account at a local savings and loan that is no longer
needed by our HUD loan program. The rate of return is better than any overnight rate available and
as long as that is true we will keep the account open as part of our Liquidity Portfolio.
The City's Bonded Debt Schedule
There are some additions to the Debt Schedule. Two additions have been made to the State of
Washington Certificate of Participation bond issue section of the report. Known as the LOCAL
program, this debt option was used to finance the new Police take-home vehicles and the airpacks
for the Fire Department. Financing was achieved at a total rate of 1.67% (includes all fees and
August 20, 2013
issuance costs). This compares with about 3% to 6% that the City has to pay for its own issuance of
debt in the marketplace. Not only is the rate lower with the State's program, but there are no
additional fees involved as with a regular bond issue. Unfortunately the State will not allow
participation for infrastructure projects and so we can only take advantage of this option when
buying or building equipment, land or structures.
Monthly payments on the Street Project Demonstration began in July. Most other principal
payments occur in June or December and so there was not a lot of activity on existing debt.
Interfund Borrowings and Investments
The most significant item to note is the payoff of the interfund loan made by Equipment Rental to
the Irrigation Capital Fund. The cost for this interfund loan of $1.433 million amounted to less than
$10,000 in interest over a 16 month period with no other tangible costs. A bond issue would have
generated 4 or 5 times that amount in issuance fees and interest costs would be ongoing for years
at a much higher rate. Although the Irrigation project is not completed, it is anticipated that such
interfund borrowing will continue to keep the City out of the expensive debt markets with regard to
an Irrigation debt issue as the Department schedules its work over a period of several years with a
"pay-as-you-go" strategy.
Refuse was temporarily in a negative cash position at the end of the quarter. For a particular fund to
be in a negative cash position for a few days or weeks is not an unusual occurrence due to the
uneven flows of revenues and expenditures throughout the year. General Fund loaned cash to
cover excess expenditures. The cash balance in the Refuse fund was positive again by October 1
and remains healthy as of this report date. As per the City's Interfund Loan Program, adopted
earlier this year, the General Fund will begin to charge interest if a loan continues over more than
one calendar quarter.
2
City of Yakima
Cash and Investment Summary
September 30, 2013
Description
Qty
Par
Book
Percent of Average
Portfolio
Yield Q2 '13
Average
Yield Q3 '13
Cash Balances on Hand and in Banks
Local Government Investment Pool (LGIP)
Federal Agency Coupon and Discount
Other Investments
NA
1 $ 4,316,336
19 40,996,000
2 3,219,176
$ 8,363,396
4,316,336
40,330,047
3,571,793
NA
9%
84%
7°/0
NA
NA
0.12%
1.21%
0.51%
Total Invested
22 $ 48,531,511
$ 48,218,176 100%
1.03%
1.06%
Summary of Investment Activity
Book Balance
7/1/2013
Purchases
& Deposits
Interest Maturities, Calls
Reinvested & Withdrawals
Book Balance
9/30/2013
Local Government Investment Pool (LGIP)
Federal Agency Coupon and Discount
Other Investments
$ 8,804,001 $
46,008,927 2,000,000
3,397,617 173,882
$ 2,613 $ 4,490,278
294
7,678,880
$ 4,316,336
40,330,047
3,571,793
Totals
$ 58,210,545 $ 2,173,882 $ 2,907 $ 12,169,158 $ 48,218,176
Page 1 of 5
PDFConvert.3254.1.TSO_Q3_2013.xlsx
City of Yakima
Investment Portfolio - Inventory by Agency
September 30, 2013
Agency Inv#
Expected
Call Most
Face Value Price Coupon Step Yield Maturity Settle Next Call Type Likely Call
Federal Farm Credit Bank
FFCB 1462 2,000,000 2,000,000 1.290
1.290 9/25/18 9/25/12 11/25/13 Amer 9/25/18
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 6/13/16
FHLB 1466 2,000,000 1,998,940 1.150 1.160 7/25/18 2/6/13 10/25/13 Qrty 7/25/18
FHLB 1467 2,000,000 1,994,456 0.850 0.910 10/30/17 2/6/13 10/30/13 Qrty 10/30/17
FHLB 1470 2,000,000 2,000,000 1.000 Step to 2.5 % 1.200 6/20/18 6/20/13 12/20/13 Qrty 6/20/17
FHLB Totals and Avera 8,000,000 8,283,096 1.355
Federal Home Loan Mortgage Corporation
FHLMC 1453 2,000,000 2,001,920 1.300
FHLMC 1463 3,000,000 3,000,000 1.000
1.280 1/30/17 01/30/12 1/30/14 Qrty 1/30/17
1.000 1/17/18 10/17/12 10/17/14 lx 1/17/18
FHLMC Totals and Ave 5,000,000 5,001,920 1.112
Federal National Management Association
FNMA 1452 1,000,000 1,000,000 0.850 0.850 12/5/14 12/5/11 12/5/13 lx 12/5/14
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 0.900 9/27/16 6/28/12 3/27/14 lx 9/27/16
FNMA 1468 2,000,000 2,000,000 1.200 1.200 4/18/18 4/18/13 1/18/14 Qrty 4/18/18
FNMA 1469 3,000,000 2,991,678 1.000 1.050 12/20/18 5/20/13 5/20/14 Qrty 12/20/18
FNMA 1472 2,000,000 2,000,000 1.700 1.700 7/10/18 7/10/13 7/10/14 Qrty 7/10/14
FNMA Totals and Aver 15,000,000 14,737,018 1.141
Financing Corporation
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 11/30/17
FICO 1464 3,630,000 3,435,105 1.050 1.050 2/8/18 10/31/12 2/8/18 NC 2/8/18
FICO Totals and Avera 10,996,000 10,308,013 1.218
Other Investments
LGIP LGIP 4,316,336 4,316,336 0.120 NA NA NA NA NC NA
174,176 174,176 0.400 0.400 NA 7/1/13 NA NC NA
500,000 565,490 5.000 1.500 7/1/15 8/19/11 7/1/15 NC 7/1/15
2,295,000 2,582,127 5.000 1.000 9/1/16 6/24/13 9/1/16 NC 9/1/16
250,000 250,000 2.050 2.100 3/30/16 8/31/11 2/28/15 NC 2/28/15
YFED YFED
CNTY 1442
CNTY 1471
YF -CD 1447
Other Totals and Avera 7,535,511 7,888,129
0.510 (excludes LGIP)
Coupon Steps
Coupon
Steps
Investment#
Rate up to:
2013
2016
2016
2017
2017
1470
June, Dec 20
1.000
1.125
1250%
1500%
2500%
Page 2 of 5
PDFC onvert.3254.1.TS0_Q3_2013.xlsx
City of Yakima
Investment Portfolio - Detail of Activity
Quarter Ending September 30, 2013
Agency
Yield Beginning Additions and Calls and Ending Date of
Inv# Rate Face Value Purchases Maturities Face Value Activity
Federal Farm Credit Bureau
FFCB 1462 1.290 2,000,000 2,000,000
FFCB Totals
2,000,000 2,000,000
Federal Home Loan Bank
FHLB 1456 2.050 2,000,000 2,000,000
FHLB 1466 1.160 2,000,000 2,000,000
FHLB 1467 0.910 2,000,000 2,000,000
FHLB 1470 1.200 2,000,000 2,000,000
FHLB Totals
8,000,000 8,000,000
Federal Home Loan Mortgage Corporation
FHLMC 1453 1.280 2,000,000 2,000,000
FHLMC 1463 1.000 3,000,000 3,000,000
FHLMC Totals
5,000,000 5,000,000
Federal National Management Association
FNMA 1445 1.420 4,000,000
FNMA 1448 1.000 1,750,000
FNMA 1452 0.850 1,000,000
FNMA 1460 1.100 5,000,000
FNMA 1461 0.900 2,000,000
FNMA 1468 1.200 2,000,000
FNMA 1469 1.050 3,000,000
FNMA 1472 1.700
2,000,000
(4,000,000) -
(1,750,000) -
1,000,000
5,000,000
2,000,000
2,000,000
3,000,000
2,000,000 7/10/13
FNMA Totals 18,750,000 2,000,000 (5,750,000) 15,000,000
Financing Corporation
FICO 1450 1.020 2,000,000
FICO 1454 1.200 722,000
FICO 1455 1.348 2,356,000
FICO 1457 1.340 2,146,000
FICO 1458 1.250 2,142,000
FICO 1464 1.050 3,630,000
(2,000,000)
722,000
2,356,000
2,146,000
2,142,000
3,630,000
8/8/13
FICO Totals
12,996,000 (2,000,000) 10,996,000
Other Investments
LGIP (State Pool) LGIP 0.120 8,804,001
Yakima Federal Savings YFED 0.400
Grays County Bonds 1442 1.500 500,000
Cowlitz County Bonds 1471 1.000 2,295,000
Yakima Federal CD 1447 2.050 250,000
2,613 (4,490,278) 4,316,336
174,176 174,176 7/1/13
500,000
2,295,000
250,000
Other Investment Totals
11,849,001
176,789
(4,490,278) 7,535,511
Grand Totals $ 58,595,001 $ 2,176,789 $ (12,240,278) $ 48,531,511
Page 3 of 5
PDFConvert.3254.1.TSO_Q3_2013.xlsx
City of Yakima
Bonded Debt Schedule - by Project Group
Quarter Ending September 30, 2013
General Obligation Bonds
9/7/2004 11/1/2019
5/8/2007 5/1/2026
8/28/2009 12/1/2018
8/28/2009 12/1/2024
8/28/2009 12/1/2032
6/17/2003 12/1/2023
6/17/2003 12/1/2013
9/7/2004 12/1/2014
8/28/2008 12/1/2021
8/28/2008 5/1/2022
8/28/2008 12/1/2019
5/8/2007 5/1/2022
5/8/2007 5/1/2017
6/20/2013 6/20/2028
12/1/2005 2/1/2015
PFD Convention Center II
PFD Convention Center III
PFD Capitol Theatre
PFD Capitol Theatre
PFD Capitol Theatre
Sundome Expansion
Law and Justice Center
Fire Station
Fire Apparatus
Fire Station
Infrastructure Projects
Downtown Futures
River Road
Street Project Demonstration
Parks and Recreation
Refunded 1996 issue
Partial refunding of 2002 issue
Tax exempt portion
Build America Bonds (Taxable)
Build America Bonds (Taxable)
Deferred Interest -Maturity $2.5M
Refunded 1994 issue
Ladder Truck
Remodel Facility
Ped crossing, street, infrastructure
Renovate downtown improvements
River Road improvements
Various City street improvements
Parks improvements
4,175,000
4,910,000
2,055,000
1,755,000
3,225,000
1,430,528
4,155,000
2,300,000
760,000
815,000
2,190,000
1,490,000
1,765,000
5,000,000
755,000
2,500,000
4,595,000
1,325,000
1,755,000
3,225,000
841,654
500,000
560,000
555,000
550,000
1,455,000
1,000,000
800,000
4,928,791
260,000
0
0
0
0
0
0
0
0
0
0
0
0
0
71,209
0
Subtotal General Obligation Bonds
$36,780,528
$24,850,445
$71,209
Certificate of Participation - State of Washington
8/22/2013
8/22/2013
6/1/2011
3/19/2013
6/1/2019
6/1/2019
12/1/2020
7/1/2023
Police Vehicles
Fire Air Packs
Fire Apparatus
Fire Apparatus
74 Take-home vehicles
70 Air Packs
Two trucks purchased
One truck
$4,173,190
$459,602
$576,847
$310,414
$4,173,190
$459,602
$472,526
$310,414
$0
$0
$0
$0
Subtotal Certificates of Participation
$5,520,054
$5,415,733
$0
Revenue Bonds
12/2/2003
5/31/2012
6/5/2008
6/5/2008
9/4/2004
11/1/2014 Wastewater
11/1/2023 Wastewater
11/1/2027 Wastewater
11/1/2018 Water
9/1/1934 Irrigation
Refunded 2003 $10,155,000 issue
Refunded 1998 issue
$7,390,000
9,400,000
5,440,000
1,883,951
5,215,000
$1,060,000
9,355,000
4,555,000
1,210,000
4,220,000
$0
0
0
0
125,000
Subtotal Revenue Bonds
$29,328,951
$20,400,000 $125,000
Grand Total
$71,629,533
$50,666,178 $196,209
Page 4 of 5 PDFConvert.3254.1.TSO_Q3_2013.xlsx
City of Yakima
Interfund Borrowings and Investments
Quarter Ending September 30, 2013
Description
Original
Balance
Beginning
Balance
Issued
Retired
Ending
Balance
Investment Held by:
Local Improvement District Bonds/Notes
Irrigation Capital Fund
REET 1 - Upper Kiwanis Park
$ 1,432,509
514,000
600,000
$ 508,500
67,000
549,804
67,000
$ 508,500
25,195 524,609
Equipment Rental
Equipment Rental
Equipment Rental
Funds in Negative Cash Position at Quarter End
Ending Cash
Balance
Cash Extended by:
Fund 471 - Refuse (133,294) General Fund
Refuse cash was fully expended at the end of the quarter due to timing issues. The cash balance is positive again as of the date of this report. An interfund loan is not
necessary.
Page 5 of 5
PDFConvert.3254.1.TSO_Q3_2013.xlsx