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10/19/2021 04.C. 2021 3rd Quarter Treasury Report • V41 rr 11 i�O enc u nrry 1 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 4.C. For Meeting of: October 19, 2021 ITEM TITLE: 2021 3rd Quarter Treasury Report SUBMITTED BY: Jennifer Ferrer Santa Ines, Director of Finance and Budget SUMMARY EXPLANATION: The Treasury Report for the third quarter of 2021 is attached and consists of the following: Third 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 ❑ Q3 Treasury Report 10/8/2021 Corer Memo 2 r...Y ...., :,.,s 40)1 .....,>] _:_--, FINANCE Date: October 8, 2021 WPTA To: Mayor and City Council ; CERTIf!CAT£OFEXCELLENCE q Imesunent VnIIq Bob Harrison, City Manager — crrY OF YAKIMA February 2019 From: Jennifer Ferrer-Santa Ines, Director of Finance �.T,b.., ,p_-°r° -..,�..• ,•M and Budget *= r~. Re: 2021 - 3rd 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 $118.0 million: $15.4 million in depository banks, $57.6 million in the State Pool, and $45.0 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). The September 2021 balance is higher than prior year due to approximately $13 million in American Rescue Plan Funds. City of Yakima Liquid Cash and Investments History $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 l0 l0 n n n n W 00 00 00 01 01 01 01 O O O O c-I .--I c-I 1--I 1-i 1-i 1--I 1--I 1-i 1-i 1--I 1--I 1-i 1-i 1--I 1--I 1-I N N N N N N N Q 6 6 IZ 6 6 IZ 6 6 IZ 6 6 IZ U 6 IZ 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: • 1527 $1 ,000,000 Federal Farm Credit Bureau. matured 9/17/2021 • 1539 $1 ,000,000 Bank of New York. matured 8/12/2021 • 1543 $1 ,000,000 US Treasury. matured 7/31/2021 Purchases: During the last quarter, the following were purchased: • 1567 $2,000,000 US Treasury to mature 10/31/2024 • 1568 $2,000,000 US Treasury to mature 04/30/2025 Portfolio and Benchmark Yield and Maturity: Avg. weighted yield of City investments, excluding LGIP: .91% LGIP State Pool 30-day yield: 0.08% Weighted average maturity of City investments, excluding LGIP: 332 days Weighted average maturity of LGIP State Pool 30-day yield: 50 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 September 30, 2021, 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 0.07% and the 5-year Treasury at 1.0%was 93 basis points. The 30-day yield of the State Pool was at 0.08%, with a 50-day avg. maturity and expected to stay low. Economic Outlook. The Federal Reserve had lowered the rates in March 2020 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 investments are not typically actively traded, meaning that no attempt to"buy low and sell high" or"time the market" is made. Investments purchased with the intent of providing investment income are intended to be held to maturity, relying on following a prudent course of action for income rather than predicting market direction. Actual% Policy 0/0 LGIP 57,617,282 56% 100% Treasuries 17,000,000 17% 100% Agencies 24,000,000 23% 100% Corporates 4,000,000 4% 15% 102,617,282 100% Debt Activity All debt payments were paid out as scheduled. A comprehensive city-wide debt report is attached with current balances. Inter-Fund Borrowings and Investments Borrowing between funds is temporary in nature, reviewed periodically by staff and Council, amended as circumstances change. Currently there are no interfund borrowing balances between funds. 3 City of Yakima Cash and Investment Summary September 30, 2021 Current Prior Quarter Prior Year Description 9/30/2021 6/30/2021 9/30/2020 Cash Balances on Hand in Banks $ 15,367,474 $ 16,618,602 $ 14,735,513 Local Government Investment Pool (LGIP) 57,617,282 57,600,578 51,438,663 Investment Portfolio 45,000,000 44,000,000 39,789,000 Total Investments 102,617,282 101 ,600,578 91 ,227,663 Total Cash and Investments $ 117,984,756 $ 118,219,180 $ 105,963,175 Beg Balance Purchases Interest Maturities, Calls End Balance Summary of Investment Activity 6/30/2021 & Deposits Reinvested & Withdrawals 9/30/2021 Local Government Investment Pool (LGIP) $ 57,600,578 $ 564,319 $ 16,704 $ (564,319) $ 57,617,282 Investment Portfolio 44,000,000 4,000,000 - (3,000,000) 45,000,000 Total Investments $ 101 ,600,578 $ 4,564,319 $ 16,704 $ (3,564,319) $ 102,617,282 Page 1 of 7 2021 Q3 TSO spreadsheet City of Yakima Distribution of Cash and Investments as of 9/30/2021 Depository Banks, $15,367,474 , 13% Investment Portfolio, 45,000,000 , 38% Local Government Investment Pool, $57,617,282 , 49% Page 2 of 7 City of Yakima Investment Portfolio- Inventory by Agency September 30, 2021 Expected Days to Call Agency Inv# CUSIP Face Value Price Coupon Yield Settle Maturity Maturity Market Type Moodys S&P Fitch USB 1515 91159HHP8 1,000,000 997,300 2.625 2.723 3/18/19 1/24/22 116 1,005,633 1X Al A+ AA- MSFT 1512 594918BW3 1,000,000 996,920 2.400 2.575 3/15/19 2/6/22 129 1,005,744 NC Aaa AAA AA+ FHLB 1556 313378CR0 1,000,000 1,032,367 2.250 0.630 3/6/20 3/11/22 162 1,009,905 NC Aaa AA+ NA FNMA 1550 3135G0T45 1,000,000 1,009,506 1.875 1.422 2/14/20 4/5/22 187 1,009,367 NC Aaa AA+ AAA FFCB 1523 3133EKLR5 1,000,000 999,100 2.250 2.281 5/16/19 5/16/22 228 1,013,841 NC Aaa AA+ AAA FAMCA 1522 31422BFF2 1,000,000 1,000,000 2.350 2.350 5/9/19 6/1/22 244 1,015,331 NC Aaa AA+ AAA FHLB 1509 313383WD9 1,000,000 1,013,146 3.125 2.750 12/19/18 9/9/22 344 1,028,633 Amer Aaa AA+ AA+ FFCB 1519 3133EKHN9 1,000,000 997,450 2.330 2.406 4/18/19 10/18/22 383 1,023,344 NC Aaa AA+ AAA FFCB 1551 3133EA7E2 1,000,000 1,014,130 1.960 1.430 2/14/20 11/7/22 403 1,020,289 NC Aaa AA+ AAA FHLB 1544 313381BR5 1,000,000 1,006,250 1.875 1.660 12/11/19 12/9/22 435 1,020,855 NC Aaa AA+ AAA FNMA 1541 3135GOT94 1,000,000 1,023,490 2.375 1.610 11/20/19 1/19/23 476 1,027,954 NC Aaa AA+ AAA FFCB 1557 3133EG5Y7 1,000,000 1,045,401 2.230 0.650 3/6/20 2/2/23 490 1,027,442 NC Aaa AA+ AAA AAPL 1516 037833AK6 1,000,000 991,000 2.400 2.634 4/8/19 5/3/23 580 1,034,522 NC AA1 AA+ - WMT 1513 931142EK5 1,000,000 1,026,800 3.400 2.730 3/15/19 6/26/23 634 1,050,712 NC Aa2 AA AA FFCB 1561 3133EMWL2 2,000,000 2,000,314 0.200 0.193 4/19/21 7/19/23 657 1,996,794 NC Aaa AA+ AAA US T 1545 9128284X5 1,000,000 1,039,063 2.750 1.660 12/11/19 8/31/23 700 1,047,031 NC Aaa AA+ AAA FAMCA 1508 3132X06C0 1,000,000 1,010,972 3.050 2.801 12/19/18 9/19/23 719 1,053,904 NC Aaa AA+ AAA FHLB 1558 313375ZL4 2,000,000 2,143,690 2.795 0.200 1/7/21 10/17/23 747 2,103,340 NC Aaa AA+ AAA FFCB 1537 3133EK4X1 1,000,000 997,924 1.600 1.654 11/6/19 11/1/23 762 1,025,769 NC Aaa AA+ AAA FFCB 1560 3133EJ2B4 2,000,000 2,147,340 3.000 0.260 3/24/21 12/6/23 797 2,113,678 NC Aaa AA+ AAA FAMCA 1552 31422BSD3 1,000,000 1,004,430 1.590 1.470 2/14/20 1/10/24 832 1,027,190 NC NA NA NA FNMA 1540 3135G0V34 1,000,000 1,032,055 2.500 1.710 11/14/19 2/5/24 858 1,049,961 NC Aaa AA+ AAA US T 1559 912828W71 2,000,000 2,112,188 2.125 0.290 3/4/21 3/31/24 913 2,084,610 NC Aaa AA+ AAA US T 1565 91282CBV2 1,000,000 999,023 0.380 0.410 6/30/21 4/14/24 927 998,516 NC Aaa NA AAA US T 1553 9128286R6 1,000,000 1,034,063 2.250 1.413 2/14/20 4/30/24 943 1,046,367 NC Aaa NA AAA US T 1562 912828XT2 2,000,000 2,103,125 2.000 0.325 4/26/21 5/31/24 974 2,081,328 NC Aaa NA AAA FAMCA 1533 31422BGA2 1,000,000 1,022,900 2.150 1.634 10/18/19 6/5/24 979 1,044,278 NC NA NA NA US T 1566 91282CCG4 1,000,000 994,102 0.250 0.451 6/30/21 6/15/24 989 993,906 NC Aaa NA AAA US T 1563 9128282N91 2,000,000 2,112,813 1.125 0.352 5/16/21 7/31/24 1,035 2,091,484 NC Aaa NA AAA US T 1546 9128282U3 1,000,000 1,008,789 1.875 1.660 12/11/19 8/31/24 1,066 1,039,258 NC Aaa NA AAA US T 1564 912828YH7 2,000,000 2,074,922 1.500 0.361 6/8/21 9/30/24 1,096 2,057,422 NC Aaa NA AAA US T 1567 912828YM6 2,000,000 2,074,531 1.500 0.343 8/3/21 10/31/24 1,127 2,057,500 NC Aaa NA AAA FFCB 1538 3133EK6J0 1,000,000 994,700 1.625 1.736 11/8/19 11/8/24 1,135 1,030,778 NC Aaa AA+ AAA FHLB 1554 3130A3GE8 1,000,000 1,058,979 2.750 1.480 2/14/20 12/13/24 1,170 1,068,789 NC Aaa AA+ NA FAMCA 1555 31422BRT9 1,000,000 1,011,943 1.750 1.495 2/14/20 1/3/25 1,191 1,036,049 NC NA NA NA US T 1568 912828ZL7 1,000,000 995,467 0.375 0.500 9/1/21 4/30/25 1,308 988,086 NC NA NA NA US T 1568 912828ZL7 1,000,000 995,467 0.375 0.500 9/1/21 4/30/25 1,308 988,086 NC NA NA NA Subtotal 37 45,000,000 46,121,659 Avg. 1.89% 46,317,696 LGIP LGIP NA 57,617,282 57,617,282 0.300 0.300 NA NA 1 57,617,282 NC IIGrand Totals $ 102,617,282 $ 103,738,941 1.02% 336 $ 103,934,978 Page 3 of 7 2021 Q3 TSO spreadsheet City of Yakima Investment Portfolio by Issuer at 9/30/2021 FAMCA, 5,000,000, 5% US T, 17,000,000, 16% FHLB , 6,000,000, 6% r FNMA, 3,000,000, 3% / FHLMC, -, 0% r AAPL, 1,000,000, 1% 111/aiiiiiiiiiiiiik. ..,_MS FT, 1,000,000, 1% USB, 1,000,000, 1% \_ 1,000,000, 1% FFCB, 10,000,000, 10% Diversifying by issuer reduces the credit risk the city is subject to from any one issuer as well as diversifies market price fluctuations LGIP, 57,617,282, 56% which can vary by issuer. Page 4 of 7 2021 Q3 TSO spreadsheet Page 5 of 7 City of Yakima Investment Portfolio Maturity Distribution at 9/30/2021 $5,000,000 $4,500,00o Diversifying by maturity reduces the re-investment risk $4,000,000 the city is subject to in any given month when an $ 500 00o investment matures and the principal is reinvested at rates available at that moment. $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 c-I ci N N N N N N N N N N N N m m m m m m m m m m m m V V V '7 71. V V' V V ul ul If) If) LT) LT) N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N } V c ..Q i i T C - tt0 Q 7 V c ..Q i i >' C - 4.0 Q +' 7 U c i i > C - 4.0 0. +' } U C i i > C dO N N Q1 f6 Q N .� 7 Q1 V O N N Q1 f6 O- (6 , 7 O V O O N N f6 Q N 7 .� 7 N V O O (a N N Q to 7 z 0 Q Q n O z 0 Q Q n O z O u Q Q vl O z d u Q Page 5 of 7 2021 Q3 TSO spreadsheet 10 City of Yakima Investment Portfolio-Detail of Activity September 30, 2021 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 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 1551 1,000,000 - - 1,000,000 FFCB 1557 1,000,000 - - 1,000,000 FFCB 1560 2,000,000 - 2,000,000 FFCB 1561 2,000,000 - 2,000,000 FFCB Total 11,000,000 - (1,000,000) 10,000,000 Federal Home Loan Bank 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 1558 2,000,000 - 2,000,000 FHLB Total 6,000,000 - - 6,000,000 Federal Home Loan Mortgage Corporation FHLMC 1539 1,000,000 - (1,000,000) - FHLMC Total 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 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 1553 1,000,000 - - 1,000,000 US Treasury 1559 2,000,000 - 2,000,000 US Treasury 1562 2,000,000 - 2,000,000 US Treasury 1563 2,000,000 - 2,000,000 US Treasury 1564 2,000,000 2,000,000 US Treasury 1565 1,000,000 1,000,000 US Treasury 1566 1,000,000 1,000,000 US Treasury 1567 2,000,000 2,000,000 US Treasury 1568 2,000,000 2,000,000 US Treasury 14,000,000 4,000,000 (1,000,000) 17,000,000 Corporate Notes AAPL 1516 1,000,000 - - 1,000,000 MSFT 1512 1,000,000 - - 1,000,000 W MT 1513 1,000,000 - 1,000,000 USB 1514 1,000,000 - 1,000,000 BNY 1521 - Corporate Total 4,000,000 - - 4,000,000 Subtotal 44,000,000 4,000,000 (3,000,000) 45,000,000 Other Investments - - - - LGIP(State Pool) LGIP 57,600,578 581,023 (564,319) 57,617,282 Other Investment Totals 57,600,578 581,023 (564,319) 57,617,282 (Grand Totals $ 101,600,578 $ 4,581,023 $ (3,564,319) $ 102,617,282 Page 6 of 7 2021 Q3 TS0 spreadsheet City of Yakima Long Tenn Debt Schedule-by Project Group September 30,2021 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 2600,827 6/9/2014 6/1/2024 Street Resurfacing Project Streets improvements 13,140,000 4,595,000 9/24/2018 6/1/2035 Soccer Complex(Refunded) City portion of SOZO Sports Complex 4,440,127 3,976,941 9/24/2018 12/1/1942 2018 Aquatic Center YMCA City portion of Aquatic Center 8,009,873 7,928,271 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 12405,000 4/21/2020 12/1/2044 2020B Convention Center Addition III Ref 2020B Convention Center Addition III Refunded 2,495,000 2450,000 Subtotal General Obligation Bonds 64,040,528 39,130,101 Certificate of Participation-State of Washington 3/19/2013 6/1/2023 Fire Apparatus One truck 310,414 74,652 9/28/2017 6/1/2027 Energy Project 2017 Energy Project(lighting) 921,863 614,757 7/21/2020 6/1/2035 Energy Project 2020 Energy Efficiency Project(lighting) 1,415,000 1,355,000 9/28/2017 6/1/2027 Fire Aerial&Pump App Fire Aerial 1,268,053 845,784 Subtotal Certificates of Participation 4,492,178 2890,193 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 2395,000 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 1,155,702 5/6/2010 6/1/2034 41000030-0 2010 Railroad Grade Separation 1,149,841 908,197 6/17/2014 5/1/2034 Comm Center Move City portion of County GO Bonds 1,716,500 1,250,000 9/30/2015 6/1/2023 '15 Yak Co SIED-21st Ave/Airport 2015 Yakima Co SIED Loan-21st Ave/Airport 307,000 112,062 6/1/2016 6/1/2027 '16 Yak Co SIED-SOZO 2016 Yakima Co SIED Loan-SOZO 900,000 582,509 11/21/2017 6/1/2024 '17 Yak Co SIED-YV Brewing Project 2017 Yakima Co SIED Loan-YV Brewing Project 61,580 39,901 7/17/2018 6/1/2029 '18 Yak Co SIED-River Rd. 2018 Yakima Co SIED-River Rd Improvements/Aquatics Center 500,000 427,216 6/1/2001 6/1/2021 PW-01-691-071 2001 Fruitavale Neighborhood Sewer 1,466,250 - 9/1/2003 6/1/2023 PW-03-691-027 2003 Naches WTP Improvements 2,694,500 269,450 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 2,307,000 496,983 4/30/2007 6/1/2027 PW-07-962-019 2007 Ultra Violet Disinfection 2,300,000 728,333 4/15/2009 6/1/2028 PC-08-951-051 2009 New Water Well 2,257,200 848,042 10/10/2011 3/31/2033 4110000E 2011 Energy Efficiency 503,558 340,086 8/1/2011 7/1/2034 41200019 2012 Industrial Waste Anaerobic 590,350 431,974 6/1/2012 6/1/2031 PC-12-951-065 2012 Wastewater Treatment Plan 5,000,000 2690,791 10/11/2012 6/1/2037 PC-13-961-059 2012 Industrial Sewer Extensions 2,000,000 1,301,435 8/5/2013 6/1/2032 PC-13-961-074 2013 Automated Reading System 5,000,000 2894,737 12/12/2013 10/1/2034 DM-11-952-038 2013 Design WTP Lagoons 3,514,800 2460,360 Subtotal Intergovernmental Loans 36,235,351 17,173,141 Grand Total 130,673,056 67,903,435 Page 7 of 7 2021 03 ISO spreadsheet 12 (fr. W 2' FINANCE Committee Review of Investment Rationale Date: September 8, 2021 Investment # 2021-1568 is a 4-year US Treasury (UST), face value $2,000,000, maturing April 30, 2025, 0.34% coupon at 99.5467 to yield 0.50%. This trade settled September 1, 2021 with Time Value Investments, Inc., US Bank Safekeeping, reducing our elevated LGIP position caused by maturities called during 2021. Liquidity: At August 31st, month-end, Key Bank checking account balance was $9.8 million (target minimum is $3 Million), US Bank checking balance was $3.6 million and investment portfolio was $44.0 million (target is $64 million for Treasuries, Corporates and Agencies). Current LGIP balance was $57.1 million (target minimum is $5 million). Safety: This purchase is a debt issue of the Federal Government, equivalent to Aaa/AAAu rating by Moody's and S&P. Yield. Yield is 0.50%. This investment is 43 basis points over LGIP, seeking to protect yield in an uncertain environment. LGIP's yield is expected to stay level over the next year. Comparable yields are: LGIP current 30-day yield 0.07463% www.secureaccess.wa.gov 3-year corporate Unavailable in AA Treasury.gov 3-year Agency FNMA 0.4100% Broker daily runs Callability. This investment is not callable (a bullet). Diversification. This purchase brings this issuer to 16.5% of total portfolio. This purchase added a maturity date previously not covered in the city's laddered portfolio. Outlook. The yield curve is currently low and flat; the 1-year Treasury at 0.07%, the 2- year at 0.20% the 3-year at 0.42%, and the 5-year at 0.78%. The Federal Reserve Bank has been keeping rates low with uncertainty of a 2022 rate hike increasing. By filling maturity gaps in a shortened 3-year ladder, we minimize reinvestment risk subject to rates at any one point in time and hedging against further decreasing rate LGIP exposure. Investment Committee review: Finance Director: Date W / City Manager: Date to�l�'zO"1-1 13 -7/41111111 FINANCE Committee Review of Investment Rationale Date: October 8, 2021 Investment # 2021-1569 is a 4-year US Treasury (UST), face value $1,000,000, maturing September 30, 2025, 0.25% coupon at 98.0735 to yield 0.74%. This trade settles October 1, 2021 with Time Value Investments, Inc., US Bank Safekeeping, reducing our elevated LGIP position caused by maturities called during 2021. Liquidity: At September 30th , month-end, Key Bank checking account balance was $9.0 million (target minimum is $3 Million), US Bank checking balance was $3.6 million and investment portfolio was $45.0 million (target is $64 million for Treasuries, Corporates and Agencies). Current LGIP balance was $57.6 million (target minimum is $5 million). Safety: This purchase is a debt issue of the Federal Government, equivalent to Aaa/AA+ rating by Moody's and S&P. Yield. Yield is 0.74%. This investment is 66 basis points over LGIP, seeking to protect yield in an uncertain environment. LGIP's yield is expected to stay level over the next year. Comparable yields are: LGIP current 30-day yield _ 0.080144% www.secureaccess.wa.gov 3-year corporate Unavailable in AA Treasury.gov 3-year Agency FNMA 0.4900% Daily Treasury Yield Curve Callability. This investment is not callable (a bullet). Diversification. This purchase brings this issuer to 17.4% of total portfolio. This purchase added a maturity date previously not covered in the city's laddered portfolio. Outlook. The yield curve is currently low and flat; the 1-year Treasury at 0.09%, the 2- year at 0.27% the 3-year at 0.49%, and the 5-year at 0.93%. The Federal Reserve Bank has been keeping rates low with uncertainty of a 2022 rate hike increasing. By filling maturity gaps in a shortened 3-4 year ladder, we minimize reinvestment risk subject to rates at any one point in time and hedging against further decreasing rate LGIP exposure. Investment Committee review: Finance Director: Date MA1 / City Manager: Date /O /8 l �r