HomeMy WebLinkAbout11/17/2015 05A 3rd Quarter 2015 Treasury ReportBUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 5. A.
For Meeting of. November 17, 2015
ITEM TITLE: 3rd Quarter 2015 Treasury Report
SUBMITTED BY: Cindy Epperson, Director of Finance & Budget
Tara Lewis, Financial Services Manager
SUMMARY EXPLANATION:
The Treasury Report for the third quarter of 2015 is attached and consists of the following:
1. Memo: Summary and Narrative
2. Reports
Cash and Investment Summary
Investment Portfolio — Inventory by Agency
Investment Portfolio — Detail of Activity
Bonded Debt Schedule
Interfund Borrowings
Resolution:
Other (Specify): Report
Contract:
Start Date:
Item Budgeted: NA
Funding Source/Fiscal Impact:
Strategic Priority:
Insurance Required? No
Mail to:
Phone:
APPROVED FOR
SUBMITTAL:
RECOMMENDATION:
Accept report.
Ordinance:
Contract Term:
End Date:
Amount:
Public Trust and Accountability
f
City Manager
ATTACHMENTS:
Description Upload Date Type
3rd QUairteir, [ir�aSLJIrY SUIrnirnary and IIVarra five. 11/(V201 5 Uwar Memo
3rd QUairteir, IRe.aSLJIry IRnnl F.X)rtS 11 1EV201 5 Exlhilbi�
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 17, 2015
Re: 2015-3 rd 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 or "Pool ") 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 is beginning to see some activity as short term interest rates are
projected to move higher in the foreseeable future. Rates did not move much during the third
quarter of 2015, but we had a couple of investments that were within two and three years of
maturity that the issuer called ahead of the stated maturity dates. Also, the Grays County bonds
held by the City matured on July 1.
Continued low interest rates along with the prediction of higher future rates enticed the Federal
Home Loan Bank to call two securities held by the City that were paying above market rates to their
investors. One incentive for an issuer to call a bond is when they can refinance their debt at lower
rates. These two bond investments were paying the City 0.85% and 1.00% with maturity dates of
April, 2017 and June, 2018 respectively. Since market rates for those respective (remaining) debt
terms are lower, the bonds were called early. The City can now reinvest those funds for longer
terms to continue getting higher rates or use them for current projects. As of the date of this report
the funds were not yet reinvested, but used to pay the City's own debt payments which tend to be
large in November and December. Excess cash will be reinvested in the fourth quarter, and
hopefully can take advantage of rising interest rates.
Short term rates increased slightly in the LGIP. The rate rose another hundredth of a point during
the third quarter. The 3 month Treasury bill fell back to .05% from a low in 2015 of .01 % and a high
last quarter of .08 %. So although short term rates are trending ever so slightly upward, until the fed
increases the overnight cost of funds above a virtual zero, rates won't get much traction.
Longer term rates have been quite volatile and are still far below pre- recession levels. While this is
good news for agencies issuing new debt, the volatility adds extra risk to the debt marketplace. An
issuer can get lucky on a downturn or find themselves with a higher rate than anticipated due to an
upswing.
The Citv's Bonded Debt Schedule
The City's debt activity is typically pretty quiet during third quarter. The bulk of principal payments
occur in November and December. Bond principal payments totaled just over $200,000 during the
quarter.
The newest debt on the schedule pertains to the relocation of the Communications Center which
was financed by County- issued bonds in 2014. The City's portion, agreed to by Resolution 2014-
086 is listed as bonded debt on the schedule. $51,500 was paid toward principal in May.
The Fiscal Agent for the State of Washington changed in February 2015 from the Bank of New York
Mellon to US Bank. The transition occurred smoothly and the City has received excellent service
from the new agent.
Interfund Borrowings and Investments
REET continues to pay monthly payments to the Equipment Rental reserve fund for the Kiwanis
Park interfund loan.
Refuse, Fund 471 has continued to be in a negative cash position off and on during much of 2014
and most of 2015. Despite the deteriorating cash position, the fund has managed to repay its short
term loans in time to avoid triggering interest as per the City's policy. (The Interfund Loan policy
states that a fund in a negative position for more than one calendar quarter will be subject to
interest to be repaid to the fund making the loan.) The recently approved rate increase is
anticipated to improve this situation during the next year. It will take some time for the fund to
become stable again, but this first step combined with continued prudent management will alleviate
the past pressure of keeping the fund operating within legal limits.
City of Yakima
Cash and Investment Summary
September 30, 2015
Page 1 of 5 Yakima.6189.1.TSO_Q3_2015.xlsx
Book Balance Purchases
Interest
Maturities, Calls
Percent of
Average
Average
Description
Qty
Par
Book
Portfolio
Yield Q2'15
Yield Q3 '15
Cash Balances on Hand and in Banks
Federal Agency Coupon and Discount
NA
$ 11,913,957
NA
NA
NA
Local Government Investment Pool (LGIP)
1
$ 1,543,582
1,543,582
3%
0.15%
0.16%
Federal Agency Coupon and Discount
19
45,540,000
44,324,109
91%
1.26%
1.30%
Other Investments
2
2,738,555
3,025,683
6%
1.13%
1.06%
Total Invested
22
$ 49,822,137
$ 48,893,374
100%
1.29%
1.25%
Page 1 of 5 Yakima.6189.1.TSO_Q3_2015.xlsx
Book Balance Purchases
Interest
Maturities, Calls
Book Balance
Summary of Investment Activity
7/1/2015 & Deposits
Reinvested
& Withdrawals
9/30/2015
Local Government Investment Pool (LGIP)
$ 1,542,964 $ -
$ 618
$ -
$ 1,543,582
Federal Agency Coupon and Discount
49,319,124 -
-
-
49,319,124
Other Investments
3,590,998
175
-
3,591,173
Totals
$ 54,453,085 $ -
$ 793
$ -
$ 54,453,878
Page 1 of 5 Yakima.6189.1.TSO_Q3_2015.xlsx
City of Yakima
Investment Portfolio - Inventory by Agency
September 30, 2015
Expected Call Most
Agency Inv# 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
11/25/15
Amer
9/25/16
FFCB 1481
1,000,000
998,844
0.690
0.690
5/1/17
5/30/14
11/25/15
Amer
5/1/16
FFCB Totals and Avera;
3,000,000
2,998,844
1.090
Federal Home Loan Bank
FHLB 1466
2,000,000
1,998,940
1.150
1.186
7/25/18
2/6/13
10/26/15
Qrty
10/26/15
FHLB 1467
2,000,000
1,994,456
0.850
0.850
10/30/17
2/6/13
10/30/15
Qrty
10/30/15
FHLB Totals and Avera
4,000,000
3,993,396
1.018
Federal Home Loan Mortgage Corporation
FHLMC 1480
1,660,000
1,654,394
1.200
1.422
6/12/18
05/27/14
12/12/15
Qrty
6/12/16
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
10/19/15
Qrty
10/19/15
FNMA 1469
3,000,000
2,991,678
1.000
1.094
12/20/18
5/20/13
11/20/15
Qrty
12/20/18
FNMA 1475
2,000,000
1,985,500
1.300
1.400
7/30/18
12/13/13
10/30/15
Qrty
10/30/15
FNMA 1476
2,000,000
1,978,940
1.640
1.750
9/26/19
3/19/14
12/26/15
Qrty
9/26/16
FNMA 1477
2,400,000
2,394,468
1.200
1.500
2/22/18
3/19/14
11/22/15
Qrty
2/22/16
FNMA 1479
2,000,000
1,992,388
1.625
1.884
8/28/19
5/27/14
11/28/15
Qrty
8/28/16
FNMA 1484
2,000,000
1,997,730
1.625
1.870
8/28/19
12/19/14
11/28/15
Qrty
8/28/16
FNMA Totals and Aver
20,400,000
20,077,734
1.405
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 Avera;
16,480,000
15,599,741
1.261
Other Investments
LGIP LGIP
1,543,582
1,543,582
0.159
0.159
NA
NA
NA
NC
NA
WED 1473
175,570
175,570
0.400
0.400
NA
7/1/13
NA
NC
NA
CNTY 1471
2,295,000
2,582,127
5.000
1.000
9/1/16
6/24/13
9/1/16
NC
9/1/16
YF -CD 1447
267,985
267,985
2.050
2.100
8/31/18
2/28/15
8/31/18
NC
8/31/18
Other Totals and Avera
4,282,137
4,569,264
0.757
Grand Totals $
49,822,137
$ 48,893,374
1.248
Average Expected Yield
Page 2 of 5 Yaldma.61891.TS0_03_2015.xlsx
City of Yakima
Investment Portfolio - Detail of Activity
Quarter Ending September 30, 2015
Page 3 of 5 Yakima.6189.1.TS0_Q3_2015.xlsx
Beginning
Additions and Calls and
Ending
Date of
Agency
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)
-
9/20/15
FHLB
1474
3,000,000
(3,000,000)
-
7/16/15
FHLB Totals
9,000,000
- (5,000,000)
4,000,000
Federal Home Loan Mortgage Corporation
FHLMC
1480
1,660,000
1,660,000
FHLMC Totals
1,660,000
- -
1,660,000
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
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
1484
2,000,000
2,000,000
FNMA Totals
20,400,000
- -
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
1464
3,630,000
3,630,000
FICO
1478
1,366,000
1,366,000
FICO
1482
2,100,000
2,100,000
FICO
1483
4,160,000
4,160,000
FICO Totals
16,480,000
- -
16,480,000
Other Investments
LGIP (State Pool)
LGIP
1,542,964
618 -
1,543,582
Yakima Federal Savings
YFED
175,396
175
175,570
Grays County Bonds
1442
500,000
(500,000)
-
7/1/15
Cowlitz County Bonds
1471
2,295,000
2,295,000
Yakima Federal CD
1447
267,985
267,985
Other Investment Totals
4,781,344
793 (500,000)
4,282,137
Grand Totals
$ 55,321,344
$ 793 $ (5,500,000)
$ 49,822,137
Page 3 of 5 Yakima.6189.1.TS0_Q3_2015.xlsx
City of Yakima
Bonded Debt Schedule - by Project Group
Quarter Ending September 30, 2015
I� Date Issued
Maturity
Description
Note
Amount of Issue
Current Balance
Payments JI
General Obligation Bonds
9/7/2004
11/1/2019
PFD Convention Center II
Refunded 1996 issue
$
4,175,000
$
1,830,000
$ -
5/8/2007
5/1/2026
PFD Convention Center III
Partial refunding of 2002 issue
4,910,000
4,045,000
8/28/2009
12/1/2018
PFD Capitol Theatre
Tax exempt portion
2,055,000
925,000
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
647,665
8/28/2008
12/1/2021
Fire Apparatus
Ladder Truck
760,000
445,000
5/8/2007
5/1/2022
Fire Station
Remodel Facility
815,000
445,000
12/1/2005
12/1/2015
Parks and Recreation
Parks improvements
755,000
90,000
8/28/2008
12/1/2019
Infrastructure Projects
Ped crossing, street, infrastructure
2,190,000
1,075,000
5/8/2007
5/1/2022
Downtown Futures
Renovate downtown improvements
1,490,000
810,000
5/8/2007
5/1/2017
River Road
River Road improvements
1,765,000
420,000
6/20/2013
6/20/2028
Street Project Demonstration
Various City street improvements
5,000,000
4,329,416
76,020
6/9/2014
6/1/2024
Street Resurfacing Project
Streets improvements
13,140,000
12,255,000
6/17/2014
12/1/2034
Comm Center Move
City portion of County GO Bond.,
1,716,500
1,665,000
Subtotal General Obligation Bonds
$
45,182,028
$
33,962,081
$ 76,020
Certificate of Participation - State of Washington
8/22/2013
6/1/2019
Police Vehicles
74 Take -home vehicles
$
4,173,190
$
2,877,771
$ -
8/22/2013
6/1/2019
Fire Air Packs
70 Air Packs
459,602
316,935
6/1/2011
12/1/2020
Fire Apparatus
Two trucks purchased
576,847
366,732
3/19/2013
7/1/2023
Fire Apparatus
One truck
310,414
258,748
Subtotal Certificates of Participation
$
5,520,054
$
3,820,186
$ -
Revenue Bonds
5/31/2012
11/1/2023
Wastewater
Refunded 2003 $10,155,000 issue
$
9,400,000
$
8,765,000
$ -
6/5/2008
11/1/2027
Wastewater
5,440,000
4,095,000
6/5/2008
11/1/2018
Water
Refunded 1998 issue
1,883,951
835,000
9/4/2004
9/1/2034
Irrigation
5,215,000
3,960,000
130,000
Subtotal Revenue Bonds
$
21,938,951
$
17,655,000
$ 130,000
Grand Total
$
72,641,033
$
55,437,267
$ 206,020
Page 4 of 5 Yakima.6189.1.TSO_Q3_2015.xlsx
City of Yakima
Interfund Borrowings and Investments
Quarter Ending September 30, 2015
Original Beginning Ending
Description Balance Balance Issued Retired Balance Investment Held by:
Local Improvement District Bonds /Notes
$ 1,432,509 $
281,902
$ - $ 281,902
Equipment Rental
REET 1 - Upper Kiwanis Park
600,000
345,982
25,827 320,155
Equipment Rental
Ending Cash
Funds in Negative Cash Position at Quarter End Balance Cash Extended by:
Fund 471 - Refuse (333,158) General Fund, Wastewater
The Refuse Fund has continued to be in a negative cash position off and on during the much of 2014 and the first half of 2015. The cash situation continues to
deteriorate as the fund is not earning sufficient revenue to cover its own expenses. The Interfund Loan policy states that a fund in a negative position for more than
one calendar quarter will be subject to interest to be repaid to the fund making the loan. To date the fund has managed to repay all loans within each calendar quarter
and has not triggered the interest requirement. The most recent loan was repaid on October 23.
Fund 151 - Public Safety Communications (97,778) General Fund
The Public Safety Communications Fund has a negative cash position due to their move to the new Communications Center. It was budgeted to use an interfund loan
up to $720,000 to cover excess costs for new equipment and furniture. The Fund has only been in a negative position for a few weeks so the loan has not yet charged
any interest. Upon such time as the loan goes beyond one calendar quarter, as per Policy the Fund will pay interest to the loaning fund.
Page 5 of 5 Yakima.6189.1.TS0_Q3_2015.x1sx
City of Yakima
Bonded Debt Schedule - by Project Group
Quarter Ending September 30, 2015
II Date Issued Maturity Description Note Amount of Issue Current Balance Payments
General Obligation Bonds
9/7/2004 11/1/2019 PFD Convention Center II Refunded 1996 issue $ 4,175,000 $ 1,830,000 $ -
5/8/2007 5/1/2026 PFD Convention Center III Partial refunding of 2002 issue 4,910,000 4,045,000
8/28/2009 12/1/2018 PFD Capitol Theatre Tax exempt portion 2,055,000 925,000
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 1,430,528 647,665
8/28/2008 12/1/2021 Fire Apparatus Ladder Truck 760,000 445,000
5/8/2007 5/1/2022 Fire Station Remodel Facility 815,000 445,000
12/1/2005 12/1/2015 Parks and Recreation Parks improvements 755,000 90,000
8/28/2008 12/1/2019 Infrastructure Projects Ped crossing, street, infrastructure 2,190,000 1,075,000
5/8/2007 5/1/2022 Downtown Futures Renovate downtown improvements 1,490,000 810,000
5/8/2007 5/1/2017 River Road River Road improvements 1,765,000 420,000
6/20/2013 6/20/2028 Street Project Demonstration Various City street improvements 5,000,000 4,329,416 76,020
6/9/2014 6/1/2024 Street Resurfacing Project Streets improvements 13,140,000 12,255,000
6/17/2014 12/1/2034 Comm Center Move City portion of County GO Bonds 1,716,500 1,665,000
Subtotal General Obligation Bonds $ 45,182,028 $ 33,962,081 $ 76,020
Certificate of Participation - State of Washington
8/22/2013 6/1/2019 Police Vehicles 74 Take -home vehicles $ 4,173,190 $ 2,877,771 $ -
8/22/2013 6/1/2019 Fire Air Packs 70 Air Packs 459,602 316,935
6/1/2011 12/1/2020 Fire Apparatus Two trucks purchased 576,847 366,732
3/19/2013 7/1/2023 Fire Apparatus One truck 310,414 258,748
Subtotal Certificates of Participation $ 5,520,054 $ 3,820,186 $ -
Revenue Bonds
5/31/2012 11/1/2023 Wastewater Refunded 2003 $10,155,000 issue $ 9,400,000 $ 8,765,000 $ -
6/5/2008 11/1/2027 Wastewater 5,440,000 4,095,000
6/5/2008 11/1/2018 Water Refunded 1998 issue 1,883,951 835,000
9/4/2004 9/1/2034 Irrigation 5,215,000 3,960,000 130,000
Subtotal Revenue Bonds $ 21,938,951 $ 17,655,000 $ 130,000
IIGrand Total $ 72,641,033 $ 55,437,267 $ 206,020
Page 4 of 5 Yakima.6189.1.TSO_Q3_2015.xlsx
City of Yakima
Interfund Borrowings and Investments
Quarter Ending September 30, 2015
Original Beginning Ending
Description Balance Balance Issued Retired Balance Investment Held by:
Local Improvement District Bonds /Notes $ 1,432,509 $ 281,902 $ - $ 281,902 Equipment Rental
REET 1 - Upper Kiwanis Park 600,000 345,982 25,827 320,155 Equipment Rental
Ending Cash
Funds in Negative Cash Position at Quarter End Balance Cash Extended by:
Fund 471 - Refuse (333,158) General Fund, Wastewater
The Refuse Fund has continued to be in a negative cash position off and on during the much of 2014 and the first half of 2015. The cash situation continues to
deteriorate as the fund is not earning sufficient revenue to cover its own expenses. The Interfund Loan policy states that a fund in a negative position for more than
one calendar quarter will be subject to interest to be repaid to the fund making the loan. To date the fund has managed to repay all loans within each calendar quarter
and has not triggered the interest requirement. The most recent loan was repaid on October 23.
Fund 151 - Public Safety Communications (97,778) General Fund
The Public Safety Communications Fund has a negative cash position due to their move to the new Communications Center. It was budgeted to use an interfund loan
up to $720,000 to cover excess costs for new equipment and furniture. The Fund has only been in a negative position for a few weeks so the loan has not yet charged
any interest. Upon such time as the loan goes beyond one calendar quarter, as per Policy the Fund will pay interest to the loaning fund.
Page 5 of 5 Yakima.6189.1.TSO_Q3_2015.xlsx