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Home My WebLink About11/18/2014 05B 3rd Quarter 2014 Treasury ReportBUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 5.B. For Meeting of: November 18, 2014 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII ITEM TITLE: SUBMITTED BY: SUMMARY EXPLANATION: 3rd Quarter 2014 Treasury Report Cindy Epperson, Director of Finance and Budget Tara Lewis, Financial Services Manager The Treasury Report for the third quarter of 2014 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 • Schdedule of Interfund Borrowings and Investments Resolution: Other (Specify): Report Contract: Contract Term: Start Date: End Date: Amount: Ordinance: Item Budgeted: Funding Source/Fiscal Impact: Strategic Priority: Insurance Required? No Mail to: Phone: APPROVED FOR SUBMITTAL: Public Trust and Accountability City Manager RECOMMENDATION: Accept report. ATTACHMENTS: Description Upload Date Type Treasury Report Summary and Narrative 11/10/2014 Cover Memo Treasury Reports 11/10/2014 Exhilblit 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 18, 2014 Re: 2014 – 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 City's Investment Portfolio saw very little activity during the third quarter of 2014. The Fed again announced that it would not touch short term rates for the foreseeable future. So despite the fact that the unemployment numbers have shown improvement, the economy is not yet strong enough to endure short term rate increases. The effective yield on the City's entire Investment Portfolio rose slightly to 1.13% from 1.03% for the third quarter of 2014. The rise is somewhat artificial in that second quarter saw a large balance in the LGIP from the Street Bond Proceeds. The relatively large amount of the bond proceeds pulled the overall rate down during second quarter. First quarter average was at 1.10% - which indicates no real change in the average return thus far in 2014. Short term rates remain low despite strengthening economic indicators. The LGIP continues to hover just above zero. Generally, with rates at such low yields, only a small emergency balance is kept in the Pool. More cash is being kept on hand in the City's operations bank accounts because such balances currently earn a higher rate than the LGIP and to transfer funds in and out adds costs which diminishes the net return even further. As of September 30, there was still a healthy balance of bond proceeds in the LGIP. However, those funds should be expended by year end as final invoices from the street construction are processed. Longer term interest rates have shown some improvement. However, due to liquidity needs and prudent policies, the City does not invest funds out longer than five years except in extraordinary circumstances—the terms on investments with improving rates are still outside the time parameters contained in our investment policy. The City's Bonded Debt Schedule The Limited Tax General Obligation bond issue of $13.14 million for the current street project netted the City $14.7 million due to fabulous timing in the market place aided by an improved debt rating granted the City by Standard and Poors. Principal payments on this new debt will begin in June 2015. Most debt payments are due in November and December so there was not much activity in the Debt Schedule this quarter. March 11, 2014 Interfund Borrowings and Investments REET continues to pay monthly payments to the Equipment Rental fund for the Kiwanis Park interfund loan. Fund 471 — Refuse was in a negative cash position at quarter -end. The Fund may need to borrow cash by year end according to the City's Interfund Loan Policy. Refuse has a very tight operating margin and timing issues surrounding the billing and collection process continue to cause cash flow issues for the fund. Fund 131 — Parks was in a negative cash position at quarter -end. This is not unusual due to their property tax funding source. As the City receives its share of the second 2014 tax payment, the Parks fund will realize a positive cash position again. 2 City of Yakima Cash and Investment Summary September 30, 2014 Description Qty Par Book Percent of Portfolio Average Yield Q2 '14 Average Yield Q3 '14 Cash Balances on Hand and in Banks NA $ 6,234,979 NA NA NA Local Government Investment Pool (LGIP)** 1 $ 7,972,088 7,972,088 14% 0.09% 0.10% Federal Agency Coupon and Discount 19 47,422,000 46,326,820 80% 1.33% 1.31% Other Investments 2 3,232,344 3,584,962 6% 1.13% 1.13% Total Invested 22 $ 58,626,432 $ 57,883,869 100% 1.03% 1.13% ** Includes Street Bond Proceeds of nearly $15 million Summary of Investment Activity Book Balance Purchases Interest Maturities, Calls 7/1/2014 & Deposits Reinvested & Withdrawals Book Balance 9/30/2014 Local Government Investment Pool (LGIP) Federal Agency Coupon and Discount Other Investments $ 15,554,062 $ 48,326,820 3,584,787 - $ 2,794 $ 7,584,768 174 2,000,000 $ 7,972,088 46,326,820 3,584,961 Totals $ 67,465,669 $ - $ 2,968 $ 9,584,768 $ 57,883,869 Page 1 of 5 PDFConvert.4735.1.TSO_Q3_2014.xlsx City of Yakima Investment Portfolio - Inventory by Agency September 30, 2014 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 FFCB 1481 1,000,000 998,844 0.690 1.290 9/25/18 9/25/12 11/25/13 Amer 9/25/18 2.000 5/1/17 5/30/14 8/31/14 Amer 11/1/14 FFCB Totals and Avera 3,000,000 2,998,844 1.526 Federal Home Loan Bank FHLB 1466 2,000,000 1,998,940 1.150 1.263 7/25/18 2/6/13 10/25/13 Qrty 7/25/18 FHLB 1467 2,000,000 1,994,456 0.850 1.170 10/30/17 2/6/13 10/30/13 Qrty 10/30/15 FHLB 1470 2,000,000 2,000,000 1.000 Step to 2.5 % 1.000 6/20/18 6/20/13 12/20/13 Qrty 6/20/17 FHLB 1474 3,000,000 2,995,014 0.750 0.917 4/17/17 12/3/13 4/17/14 Amer 4/17/16 FHLB Totals and Averal 9,000,000 8,988,410 1.069 Federal Home Loan Mortgage Corporation FHLMC 1463 3,000,000 3,000,000 1.000 FHLMC 1480 1,660,000 1,654,394 1.200 1.000 1/17/18 10/17/12 10/17/14 1 x 1/17/18 1.528 6/12/18 05/27/14 9/12/14 Qrty 6/12/15 FHLMC Totals and Ave 4,660,000 4,654,394 1.188 Federal National Management Association 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 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 1.200 12/20/18 5/20/13 5/20/14 Qrty 12/20/18 FNMA 1475 2,000,000 1,985,500 1.300 1.753 7/30/18 12/13/13 4/30/14 Qrty 10/30/15 FNMA 1476 2,000,000 1,978,940 1.640 1.933 9/26/19 3/19/14 6/26/14 Qrty 9/26/15 FNMA 1477 2,400,000 2,394,468 1.200 1.777 2/22/18 3/19/14 5/22/14 Qrty 2/22/15 FNMA 1479 2,000,000 1,992,388 1.625 2.010 8/28/19 5/27/14 5/28/14 Qrty 5/28/15 FNMA Totals and Aver, 18,400,000 18,080,004 1.480 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 1.049 1.049 2/8/18 10/31/12 2/8/18 NC 2/8/18 FICO 1478 1,366,000 1,297,155 1.320 1.320 5/2/18 5/27/14 5/2/18 NC 5/2/18 FICO Totals and Averal 12,362,000 11,605,168 1.229 Other Investments LGIP LGIP 7,972,088 7,972,088 0.097 YFED 1473 174,872 174,872 0.400 CNTY 1442 500,000 565,490 5.000 CNTY 1471 2,295,000 2,582,127 5.000 YF -CD 1447 262,473 262,473 2.050 Other Totals and Averal 11,204,432 11,557,049 0.097 NA NA NA NC NA 0.400 NA 7/1/13 NA NC NA 1.500 7/1/15 8/19/11 7/1/15 NC 7/1/15 1.000 9/1/16 6/24/13 9/1/16 NC 9/1/16 2.100 3/30/16 8/31/11 2/28/15 NC 2/28/15 0.418 Coupon Steps Coupon Steps Investment # Rate up to: 2013 2016 2016 2017 2017 1470 June, Dec 20 1.000 1.125 1.250 1.500 2.500 Page 2 of 5 PDFConvert.4735.1.TSO_Q3_2014.xlsx City of Yakima Investment Portfolio - Detail of Activity Quarter Ending September 30, 2014 Agency Beginning Additions and Calls and Ending Date of Inv# Face Value Purchases Maturities Face Value Activity Federal Farm Credit Bureau FFCB 1462 2,000,000 2,000,000 FFCB 1481 1,000,000 1,000,000 FFCB Totals 3,000,000 3,000,000 Federal Home Loan Bank FHLB 1466 2,000,000 2,000,000 FHLB 1467 2,000,000 2,000,000 FHLB 1470 2,000,000 2,000,000 FHLB 1474 3,000,000 3,000,000 FHLB Totals 9,000,000 9,000,000 Federal Home Loan Mortgage Corporation FHLMC 1463 3,000,000 3,000,000 FHLMC 1480 1,660,000 1,660,000 FHLMC Totals 4,660,000 4,660,000 Federal National Management Association FNMA 1460 5,000,000 5,000,000 FNMA 1468 2,000,000 2,000,000 FNMA 1469 3,000,000 3,000,000 FNMA 1472 2,000,000 (2,000,000) 7/10/14 FNMA 1475 2,000,000 2,000,000 FNMA 1476 2,000,000 2,000,000 FNMA 1477 2,400,000 2,400,000 FNMA 1479 2,000,000 2,000,000 FNMA Totals 20,400,000 (2,000,000) 18,400,000 Financing Corporation FICO 1454 722,000 722,000 FICO 1455 2,356,000 2,356,000 FICO 1457 2,146,000 2,146,000 FICO 1458 2,142,000 2,142,000 FICO 1464 3,630,000 3,630,000 FICO 1478 1,366,000 1,366,000 FICO Totals 12,362,000 12,362,000 Other Investments LGIP (State Pool) LGIP 15,554,062 Yakima Federal Savings YFED 174,697 Grays County Bonds 1442 500,000 Cowlitz County Bonds 1471 2,295,000 Yakima Federal CD 1447 262,473 2,794 (7,584,768) 7,972,088 174 174,872 500,000 2,295,000 262,473 Other Investment Totals 18,786,232 2,968 (7,584,768) 11,204,432 Grand Totals $ 68,208,232 $ 2,968 $ (9,584,768) $ 58,626,432 Page 3 of 5 PDFConvert.4735.1.TSO_Q3_2014. xlsx City of Yakima Bonded Debt Schedule - by Project Group Quarter Ending September 30, 2014 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 9/7/2004 12/1/2014 8/28/2008 12/1/2021 5/8/2007 5/1/2022 12/1/2005 2/1/2015 8/28/2008 12/1/2019 5/8/2007 5/1/2022 5/8/2007 5/1/2017 6/20/2013 6/20/2028 6/9/2014 6/1/2024 PFD Convention Center II PFD Convention Center III PFD Capitol Theatre PFD Capitol Theatre PFD Capitol Theatre Sundome Expansion Fire Station Fire Apparatus Fire Station Parks and Recreation Infrastructure Projects Downtown Futures River Road Street Project Demonstration Street Resurfacing Project Refunded 1996 issue Partial refunding of 2002 issue Tax exempt portion Build America Bonds (Taxable) Build America Bonds (Taxable) Deferred Interest -Maturity $2.5M Ladder Truck Remodel Facility Parks improvements Ped crossing, street, infrastructure Renovate downtown improvements River Road improvements Various City street improvements Streets improvements 4,175,000 4,910,000 2,055,000 1,755,000 3,225,000 1,430,528 2,300,000 760,000 815,000 755,000 2,190,000 1,490,000 1,765,000 5,000,000 13,140,000 2,170,000 4,330,000 1,130,000 1,755,000 3,225,000 743,120 285,000 500,000 500,000 175,000 1,270,000 905,000 615,000 4,631,605 13,140,000 74,762 Subtotal General Obligation Bonds $45,765,528 $35,374,725 $74,762 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 $3,533,597 $389,163 $420,411 $284,905 Subtotal Certificates of Participation $5,520,054 $4,628,076 $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 9/1/2034 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 $255,000 9,355,000 4,330,000 1,030,000 4,090,000 130,000 Subtotal Revenue Bonds $29,328,951 $19,060,000 $130,000 Grand Total $80,614,533 $59,062,801 $204,762 Page 4 of 5 PDFConvert.4735.1.TSO_Q3_2014.xlsx City of Yakima Interfund Borrowings and Investments Quarter Ending September 30, 2014 Description Original Beginning Ending Balance Balance Issued Retired Balance Investment Held by: Local Improvement District Bonds/Notes $ 1,432,509 $ 428,800 REET 1 - Upper Kiwanis Park 600,000 448,521 $ 65,988 $ 362,812 Equipment Rental 25,509 423,012 Equipment Rental Funds in Negative Cash Position at Quarter End Ending Cash Balance Cash Extended by: Fund 471 - Refuse (450,974) General Fund Refuse cash was fully expended at the end of the quarter due to tight margins and timing issues. Cash is still in a negative position and is being monitored. The fund will likely need an Interfund Loan before the end of the year. Fund 131 - Parks (260,013) General Fund Parks Operating Fund cash was fully expended at the end of the quarter due primarily to timing issues. The flow of property tax revenues does not match timing of regular operating expenditures. The situation should be resolved by early November. Page 5 of 5 PDFConvert.4735.1.TSO_Q3_2014.xlsx City of Yakima Bonded Debt Schedule - by Project Group Quarter Ending September 30, 2014 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 9/7/2004 12/1/2014 8/28/2008 12/1/2021 5/8/2007 5/1/2022 12/1/2005 2/1/2015 8/28/2008 12/1/2019 5/8/2007 5/1/2022 5/8/2007 5/1/2017 6/20/2013 6/20/2028 6/9/2014 6/1/2024 PFD Convention Center II PFD Convention Center III PFD Capitol Theatre PFD Capitol Theatre PFD Capitol Theatre Sundome Expansion Fire Station Fire Apparatus Fire Station Parks and Recreation Infrastructure Projects Downtown Futures River Road Street Project Demonstration Street Resurfacing Project Refunded 1996 issue Partial refunding of 2002 issue Tax exempt portion Build America Bonds (Taxable) Build America Bonds (Taxable) Deferred Interest -Maturity $2.5M Ladder Truck Remodel Facility Parks improvements Ped crossing, street, infrastructure Renovate downtown improvements River Road improvements Various City street improvements Streets improvements 4,175,000 4,910,000 2,055,000 1,755,000 3,225,000 1,430,528 2,300,000 760,000 815,000 755,000 2,190,000 1,490,000 1,765,000 5,000,000 13,140,000 2,170,000 4,330,000 1,130,000 1,755,000 3,225,000 743,120 285,000 500,000 500,000 175,000 1,270,000 905,000 615,000 4,631,605 13,140,000 74,762 Subtotal General Obligation Bonds $45,765,528 $35,374,725 $74,762 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 $3,533,597 $389,163 $420,411 $284,905 Subtotal Certificates of Participation $5,520,054 $4,628,076 $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 9/1/2034 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 $255,000 9,355,000 4,330,000 1,030,000 4,090,000 130,000 Subtotal Revenue Bonds $29,328,951 $19,060,000 $130,000 Grand Total $80,614,533 $59,062,801 $204,762 Page 4 of 5 PDFConvert.4735.1.TSO_Q3_2014.xlsx City of Yakima Interfund Borrowings and Investments Quarter Ending September 30, 2014 Description Original Beginning Ending Balance Balance Issued Retired Balance Investment Held by: Local Improvement District Bonds/Notes $ 1,432,509 $ 428,800 REET 1 - Upper Kiwanis Park 600,000 448,521 $ 65,988 $ 362,812 Equipment Rental 25,509 423,012 Equipment Rental Funds in Negative Cash Position at Quarter End Ending Cash Balance Cash Extended by: Fund 471 - Refuse (450,974) General Fund Refuse cash was fully expended at the end of the quarter due to tight margins and timing issues. Cash is still in a negative position and is being monitored. The fund will likely need an Interfund Loan before the end of the year. Fund 131 - Parks (260,013) General Fund Parks Operating Fund cash was fully expended at the end of the quarter due primarily to timing issues. The flow of property tax revenues does not match timing of regular operating expenditures. The situation should be resolved by early November. Page 5 of 5 PDFConvert.4735.1.TSO_Q3_2014.xlsx