HomeMy WebLinkAbout03/03/2015 05B 4th Quarter 2014 Treasury ReportBUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 5.B.
For Meeting of: March 03, 2015
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ITEM TITLE:
SUBMITTED BY:
SUMMARY EXPLANATION:
4th Quarter 2014 Treasury Report
Cindy Epperson, Director of Finance and Budget
Tara Lewis, Financial Services Manager
The Treasury Report for the fourth 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
Interfund Borrowings and Investments Schedule
Resolution:
Other (Specify): Report
Contract: Contract Term:
Start Date: End Date:
Amount:
Ordinance:
Item Budgeted: NA
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
Q4 Treasury Narrative
TSO report
Upload Date
2/23/2015
2/25/2015
Type
Cover Memo
Cover Memo
Memorandum
To: The Honorable Mayor and Members of City Council
From: Cindy Epperson, Director of Finance and Budget
Tara Lewis, Financial Services Manager
Date: February 26, 2015
Re: 2014 — 4th 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 fourth quarter of 2014. The bond
proceeds account at the LGIP was drained to pay street construction costs. Two investments were
liquidated. Interest rates remain unimpressive.
The Fed again announced that short term rates will remain low for the time being. Although
unemployment rates have dropped and the economy shows signs of strengthening, the recovery is
far from robust. The shortest terms of 0 — 3 years remain very low. Longer terms of 3 - 5 years are
starting to creep up over previous quarters. So there is some hope.
The effective yield on the City's entire Investment Portfolio rose slightly from 1.13% in the third
quarter to 1.29% for the fourth quarter of 2014. A portion of that rise is somewhat artificial in that the
City was still drawing construction funds from the LGIP for the Street Project into the fall. As the
LGIP balance decreased relative to our investments in higher yielding agency bonds, the average
yield rose accordingly.
The LGIP rate continues to hover just above zero. Generally, with 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.
Although the standard practice of the City is to keep investments to maturity, certain federal agency
holdings are kept at the ready to liquidate should cash needs dictate such action. Two holdings
were liquidated before call or maturity during the fourth quarter. In early October a FICO holding
was liquidated for a profit to supplement cash flow. In mid-December a FHLMC holding was
liquidated and the proceeds rolled into a like investment (similar maturity date) with a higher yield to
take advantage of an unusual timing opportunity. The yield on the old investment was 1.0%, the
yield on the reinvested funds, 1.29%.
The City's Bonded Debt Schedule
The new Limited Tax General Obligation bond issue of $13.14 million for the 2014 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 are a number of principal
payments reflected on the Debt Schedule this quarter.
The Fiscal Agent for the State of Washington will change in 2015 from the Bank of New York Mellon
to US Bank. The transition of the City's debt to the new agent has begun. Our first debt payment in
2015 will be due on March 1 and will be handled by the new agent.
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 has been in a difficult
cash position for much of 2014. 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.
Terms of the City's Interfund Loan Policy require a fund pay interest whenever a fund has not been
able to repay a loan for any full quarter of the year. Thus far, the fund has been solvent off and on
during each quarter and has not been forced into a formal borrowing.
2
City of Yakima
Cash and Investment Summary
December 31, 2014
Description
Qty
Par
Book
Percent of
Portfolio
Average
Yield Q3 '14
Average
Yield Q4 '14
Cash Balances on Hand and in Banks
NA
$ 10,187,502
NA
NA
NA
Local Government Investment Pool (LGIP)
1
$ 1,541,963
1,541,963
3%
0.10%
0.10%
Federal Agency Coupon and Discount
19
50,540,000
49,319,123
91%
1.31%
1.34%
Other Investments
2
3,238,031
3,590,649
6%
1.13%
1.13%
Total Invested
22
$ 55,319,994
$ 54,451,735
100%
1.13%
1.29%
Summary of Investment Activity
Book Balance Purchases Interest Maturities, Calls
10/1/2014
& Deposits Reinvested & Withdrawals
Book Balance
12/31/2014
Local Government Investment Pool (LGIP)
Federal Agency Coupon and Discount
Other Investments
$ 7,972,088 $ - $
46,326,820
3,584,961
7,991,792
668 $ 6,430,793
- 4,999,488
5,687
$ 1,541,963
49,319,124
3,590,648
Totals
$ 57,883,869 $ 7,991,792 $ 6,355 $ 11,430,282 $ 54,451,735
Page 1 of 5
PDFConvert.5214.1. TSO_Q4_2014. xlsx
City of Yakima
Investment Portfolio - Inventory by Agency
December 31, 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 4/25/15 Amer 9/25/15
2.000 5/1/17 5/30/14 4/1/15 Amer 5/1/15
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 1.186 7/25/18 2/6/13 4/25/15 Qrty 7/25/15
FHLB 1467 2,000,000 1,994,456 0.850 0.953 10/30/17 2/6/13 4/30/15 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 3/30/15 Qrty 6/20/15
FHLB 1474 3,000,000 2,995,014 0.750 0.890 4/17/17 12/3/13 4/17/15 Amer 4/17/15
FHLB Totals and Averal 9,000,000
8,988,410 0.994
Federal Home Loan Mortgage Corporation
FHLMC 1480 1,660,000 1,654,394 1.200 1.422 6/12/18 05/27/14 3/12/15 Qrty 12/12/15
FHLMC Totals and Ave 1,660,000
1,654,394 1.422
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 4/18/15 Qrty 4/18/15
FNMA 1469 3,000,000 2,991,678 1.000 1.094 12/20/18 5/20/13 3/20/15 Qrty 5/20/16
FNMA 1475 2,000,000 1,985,500 1.300 1.753 7/30/18 12/13/13 4/30/15 Qrty 7/30/15
FNMA 1476 2,000,000 1,978,940 1.640 2.309 9/26/19 3/19/14 3/26/15 Qrty 9/26/15
FNMA 1477 2,400,000 2,394,468 1.200 1.777 2/22/18 3/19/14 2/22/15 Qrty 2/22/15
FNMA 1479 2,000,000 1,992,388 1.625 1.884 8/28/19 5/27/14 2/28/15 Qrty 5/28/15
FNMA 1484 2,000,000 1,997,730 1.625 1.884 8/28/19 12/19/14 2/28/15 Qrty 5/28/15
FNMA Totals and Aver, 20,400,000
20,077,734 1.529
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 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 1482 2,100,000 1,998,482 1.373 1.373 8/3/18 12/19/14 8/3/18 NC 8/3/18
FICO 1483 4,160,000 3,995,580 1.290 1.290 2/8/18 12/19/14 2/8/18 NC 2/8/18
FICO Totals and Averal 16,480,000 15,599,741 1.261
Other Investments
LGIP LGIP
YFED 1473
CNTY 1442
CNTY 1471
YF -CD 1447
1,541,963 1,541,963 0.099
175,046 175,046 0.400
500,000 565,490 5.000
2,295,000 2,582,127 5.000
267,985 267,985 2.050
Other Totals and Averal 4,779,994 5,132,611
0.099 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 2/28/15 8/31/11 2/28/15 NC 2/28/15
0.821
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.5214.1.TSO_Q4_2014.xlsx
City of Yakima
Investment Portfolio - Detail of Activity
Quarter Ending December 31, 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) 12/19/14
FHLMC 1480 1,660,000 1,660,000
FHLMC Totals
4,660,000 (3,000,000) 1,660,000
Federal National Management Association
FNMA 1460 5,000,000
FNMA 1468 2,000,000
FNMA 1469 3,000,000
FNMA 1475 2,000,000
FNMA 1476 2,000,000
FNMA 1477 2,400,000
FNMA 1479 2,000,000
FNMA 1484
2,000,000
5,000,000
2,000,000
3,000,000
2,000,000
2,000,000
2,400,000
2,000,000
2,000,000 12/19/14
FNMA Totals
18,400,000 2,000,000 20,400,000
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) 10/1/14
FICO 1464 3,630,000 3,630,000
FICO 1478 1,366,000 1,366,000
FICO 1482 2,100,000 2,100,000 12/19/14
FICO 1483 4,160,000 4,160,000 12/19/14
FICO Totals
12,362,000 6,260,000 (2,142,000) 16,480,000
Other Investments
LGIP (State Pool) LGIP 7,972,088
Yakima Federal Savings YFED 174,872
Grays County Bonds 1442 500,000
Cowlitz County Bonds 1471 2,295,000
Yakima Federal CD 1447 262,473
668 (6,430,793) 1,541,963
174 175,046
500,000
2,295,000
5,512 267,985
Other Investment Totals
11,204,432
6,355
(6,430,793) 4,779,994
Grand Totals $ 58,626,432 $ 8,266,355 $ (11,572,793) $ 55,319,994
Page 3 of 5
PDFConvert.5214.1.TSO_Q4_2014. xlsx
City of Yakima
Bonded Debt Schedule - by Project Group
Quarter Ending December 31, 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
1,830,000
4,330,000
1,130,000
1,550,000
3,225,000
647,665
0
445,000
500,000
90,000
1,075,000
905,000
615,000
4,556,530
13,140,000
340,000
205,000
95,455
285,000
55,000
85,000
195,000
75,075
Subtotal General Obligation Bonds
$45,765,528
$34,039,195 $1,335,530
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
$0
8,765,000
4,095,000
835,000
4,090,000
$255,000
590,000
235,000
195,000
Subtotal Revenue Bonds
$29,328,951
$17,785,000 $1,275,000
Grand Total
$80,614,533
$56,452,271 $2,610,530
Page 4 of 5 PDFConvert.5214.1.TSO_Q4_2014.xlsx
City of Yakima
Interfund Borrowings and Investments
Quarter Ending December 31, 2014
Description
Original Beginning Ending
Balance Balance Issued Retired Balance
Investment Held by:
Local Improvement District Bonds/Notes $ 1,432,509 $ 362,812
REET 1 - Upper Kiwanis Park
600,000 423,012
$ 25,516 $ 337,296 Equipment Rental
25,588 397,424 Equipment Rental
Funds in Negative Cash Position at Quarter End
Ending Cash
Balance
Cash Extended by:
Fund 471 - Refuse (117,238) General Fund
The Refuse Fund has been in a negative cash position off and on during 2014. The Interfund Loan policy states that a fund in a negative position for more than a
calendar quarter will be subject to interest to be repaid to the fund making the loan. So far the fund has managed to repay all loans within each calendar quarter to
date. The Refuse Fund operates very close to the margin.
Page 5 of 5
PDFConvert.5214.1.TSO_Q4_2014.xlsx