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HomeMy WebLinkAbout5G - Third Q. Investment Report 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: RECOMMENDED MOTION: Reviewed by: t l CITY COUNCIL AGENDA REPORT OCTOBER 17, 2005 5G Ralph Teschner, Finance Director CONSIDER APPROVAL OF 2005 3RD QUARTER INVESTMENT REPORT Introduction Staff has prepared this written narrative to serve as an informational addendum to the quarterly investment report summary. Also attached to the quarterly investment report is a document entitled "Investment Report Summary Narrative", It is intended to provide supplementary information with respect to those allowable forms of investment permitted by Minnesota Statute. Additional objectives of the report narrative are to identify the various funds established and describe the purpose those funds serve. In most instances, the dollars are either reserved and restricted for specific expenditures as indicated or sufficient fund balances are necessary to provide adequate operational cash flows as in the case with the General Fund and Sewer and Water Fund. If councilmembers have questions please feel free to contact me at 447-9841 for more information. A motion as part of the consent agenda to approve the 2005 3rd Quarter Investment Report as submitted 1. 2005 3rd Quarter Investment Report 2. Investment Report Summary Narrative www.cityofpriorlake.com Phone 952.447.4230 / Fax 952.447.4245 INVESTMENT REPORT SUMMARY September 30 2005 Reference Interest Purchase Maturity Number Investment Cost Rate Date Date League 4M Fund: MN-01-145-1 Liquid Asset Fund 500,000.00 3.31% 09/30/05 --/--/05 Northland Securities: 76T -155845 City Group commercial paper 993,020.00 3.28% 07/28/05 10/14/05 76T -155845 FHLB discount notes 987,220.00 3.01% 05/17/05 10/21/05 76T -155845 FHLMC govt. agency 995,250.00 3.10% 05/17/05 11/15/05 76T -155845 FHLMC govt. agency 995,250.00 3.33% 06/22/05 11/15/05 76T-155845 U.S. Treasury Bill 495,245.00 3.21% 07/28/05 11/15/05 76T-155845 G.E. commercial paper 1,988,200.00 3.54% 09/15/05 11/15/05 76T-155845 U.S. Treasury Bill 1,987,500.00 2.51% 12/01/04 11/30/05 76T-155845 FHLB discount notes 7,839,328.00 3.36% 09/07/05 11/30/05 76T -155845 Chaska G.O. bonds 500,000.00 5.00% 10/23/01 12/01/05 76T-155845 FNMA discount notes 982,250.00 3.19% 05/17/05 12/09/05 76T-155845 FHLB govt. agency 500,000.00 3.13% 12/15/03 12/15/05 76T -155845 FHLMC govt. agency 5,500,000.00 3.33% 05/17/05 01/15/06 76T -155845 Chaska G.O. bonds 600,000.00 5.20% 10/23/01 12/01/06 76T -155845 Waite Park G.O. bonds 235,002.00 5.00% 12/21/01 12/01/06 76T -155845 FHLB govt. agency 1,000,000.00 4.00% 12/23/03 12/23/06 76T-155845 FHLB govt. agency 500,000.00 4.00% 01/16/04 01/16/07 76T-155845 FNMA govt. agency 498,750.00 3.45% 11/29/02 11/21/07 76T-155845 Waite Park G.O. bonds 221,100.00 5.20% 12/21/01 12/01/07 76T-155845 Waite Park G.O. bonds 208,620.00 5.30% 12/21/01 12/01/08 76T -155845 FHLMC govt. agency 498,750.00 3.00% 06/25/03 06/30/09 76T -155845 FNMA govt. agency 998,125.00 4.25% 02/20/03 02/20/10 76T -155845 FHLB govt. agency 500,000.00 4.14% 04/01/03 10/01/10 76T -155845 FHLMC govt. agency 500,000.00 4.00% 04/08/03 10/08/10 76T -155845 Waite Park G.O. bonds 183,051.00 5.60% 12/21/01 12/01/10 76T-155845 FHLMC govt. agency 500,000.00 4.50% 12/23/02 12/17/10 76T-155845 Waite Park G.O. bonds 170,721.00 5.75% 12/21/01 12/01/11 76T-155845 Waite Park G.O. bonds 159,606.00 5.85% 12/21/01 12/01/12 Prudential Securities: 008-950601-33 FHLB govt. agency step-up 498,750.00 4.00% 05/01/03 05/01/06 008-950601-33 FHLB govt. agency 500,000.00 4.00% 08/20/03 08/20/06 008-950601-33 FHLMC govt. agency 499,375.00 4.00% 02/17/04 02/10/07 Smith Barney: # 19089 FHLMC govt. agency 500,000.00 4.13% 12/18/03 12/15/06 # 19089 Certificates of deposits 480,000.00 4.04% 07/27/05 07/27/07 # 19089 FHLMC govt. agency 1,000,000.00 4.00% 03/25/04 03/15/08 # 19089 FHLB govt. agency 500,000.00 5.75% 06/29/01 05/15/08 # 19089 FHLMC govt. agency 500,000.00 4.00% 08/26/04 08/15/08 # 19089 FHLMC govt. agency 500,000.00 4.00% 09/16/04 09/15/08 # 19089 FICO zero govt, agency 402,745.00 3.76% 03/24/03 01/15/09 # 19089 FHLB govt. agency 500,000.00 3.57% 07/30/03 01/30/09 # 19089 FHLMC govt. agency 500,000.00 4.00% 03/30/04 03/30/09 # 19089 FICO zero govt. agency 389,600.00 3.75% 03/21/03 12/06/09 # 19089 FICO zero govt. agency 673,760.00 4.79% 12/05/02 04/06/11 # 19089 FHLB govt. agency 1,000,000.00 4.63% 11/17/04 11/04/11 # 19089 FHLB govt. agency 1,000,000.00 4.88% 12/20/02 11/15/11 # 19089 FHLMC govt. agency 500,000.00 4.00% 03/25/04 03/15/12 # 19089 FNMA govt. agency 500,000.00 4.75% 10/15/04 10/15/12 # 19089 FHLMC govt. agency 499,375.00 5.00% 12/17/13 02/27/13 # 19089 FHLMC govt. agency 495,621.00 4.63% 07/24/03 07/09/13 # 19089 FHLMC govt. agency 997,500.00 5.00% 10/24/02 10/24/13 Investment Portfolio Total $ 43,473,714.00 3.76% (weighted average) Inves12.xls 10:49 AM10/7/05 ^-~~~--_._~-~-~~ -"---"~. ~_""'_"''''',,~,_'__~4"_'__'_'''_'___'''''''____~_~_'''''__'''h''',~_~"._."___.__~.__~~"__~__ INVESTMENT REPORT SUMMARY NARRATIVE The attached Investment Report identifies the various types of investments and those brokerslbanks the City of Prior Lake uses for investment purposes. At the end of the report summary is the grand total of all city moneys currently invested and the weighted average return of the investment portfolio. Investments for local governments are restricted to only those permitted by Minnesota Statutes. They are identified as follows: 1. U.S. Treasury Bills and Notes which are direct obligations of the federal government. 2. U.S. Government Securities which are guaranteed or insured by the federal government i.e., FHLB, FNMA, FHLMC agencies or authorities such as TV A. 3. State and Local Government bonds that are rated "A" or better. 4. Bankers' Acceptances of a United States Bank. 5. Commercial Paper that is rated "AI +Pl" and matures in 270 days or less. 6. Repurchase Agreements/Certificate of Deposits with banks having capitalization exceeding $10,000,000. Also allowable, but of higher risks, are guaranteed investment contracts (GIC's) and mortgage-backed securities (CMO's) which because of their sophisticated nature and inherent risk, Prior Lake does not participate in. The City's investment portfolio amount is a pool of funds identified on the monthly Treasurer's Report which is comprised of 18 fund tupes that have been established by the City as allowable under state statute. A short description of these funds is outlined below and for the most part are dedicated for specific purposes. General Fund - The General Fund represents the necessary resources to support general operating budget expenditures of the City. The year-end fund balance represents dollars that have accumulated over a period of time as a result of cumulative budgetary revenue surpluses and expenditure under runs. The City Council has designated a portion of this amount, equal to a minimum of 30% of the current operating budget, for working capital to finance city operations. Sewer & Water Fund - The Sewer and Water Fund accounts for the collection of sewer and water billing utility revenue. This enterprise fund balance is allocated for the operational costs of the Water/Sewer departments and normally reserved for large capital municipal system expenses. Storm Water Fund - The Storm Water Fund is an enterprise account funded by the $3.75 storm water charge on the water bills and is dedicated to finance water quality improvements including departmental administration, storm water maintenance operations and improvement projects such as water quality ponds. Transit Fund - The Transit Fund is an enterprise account funded predominantly (90%) by state aid that is derived from the vehicle excise tax paid thru annual license tab renewals on vehicles and is dedicated to ~._----------.....-.- ._-"",~-~_._.~----,~.,--_._<----".---'t-~---",+-.....,._..~.._"-_.---"..__."..,-,....._".."...,.._,_..._.~_._-_._,.~_._-~.........-~....-_._".,..~._.,'--~-_._~--~._---- pay for community transit services such as the downtown commuter service, van pool and dial-a-ride servIces. Cable Franchise Fund - This fund was created to act as a clearing house for funds that were received from the cable franchise company as specified by ordinance which are then paid to ISD #719 as payment support for 50% of the public access coordinator position and for cable studio equipment replacement. Capital Park Fund - Capital Park funds are dedicated funds generated by the cash park dedication fees as a result of new development and by park support fees on new construction building permits for the purpose of developing the City's neighborhood park and trail system. These dollars are programmed throughout the course of the city's capital improvement plan. Severance Compensation Fund - This fund was established to partially fund the City's compensated absence liability which is associated with the accrued vacation and sick leave for employees upon employment termination. The State Auditor's Office has recommended that local governments set aside a certain percentage on the basis of foreseeable turnover. ED Fed/MN Loan Funds - These funds were created to account for the proceeds of economic development grants received either from the federal government or the State of Minnesota to provide seed money for a revolving loan account. The purpose is to provide economic incentive for new business expansion within the community. Downtown Redevelopment Fund - This fund was created to provide development assistance in the context of building facade improvements for downtown businesses in an effort to revitalize and renew the general appearance of the downtown business district. DAG Special Revenue Fund - The DAG Fund is a special revenue fund to account for project engineering and inspection fees that are collected as a result of a developer's agreement contract. The fees are paid to the City by the developer when the contract is executed at the time of final plat approval. These revenues are used to pay for legal expenses and inspection services on developer installed utilities including sewer, water and street installation for newly approved subdivisions within the City of Prior Lake. Tax Increment Funds - The Tax Increment Fund represents an accumulation of funds such as bond proceeds and project administration fees charged to companies requesting project write downs in the form of tax increment financing for new and/or redevelopment. The TIF district property taxes are then deposited in a number of tax increment funds established to track their respective revenue. Revolving Equipment Fund - A regular replacement schedule for equipment needs of the City in excess of $5,000 has been adopted. Periodic fund transfers are appropriated to provide supplemental revenue to finance the acquisition and purchase of new and replacement vehicles and equipment. The long term effect of contributing occasional fund contributions is to mitigate property tax increases and eliminate debt financing. Building Fund - The funds within the Building Fund are reserved for future building needs. A high priority has been established by the Council to build a new city hall, police and community facility. Also a space needs analysis has identified that the city will require another satellite fire station to serve the northwest section of the city that will experience the greatest growth. Construction Fund - Construction Fund dollars represent unexpended bond proceeds that are reserved to pay for improvement projects that have been approved by the City Council on an annual basis. For the -------.------r--.--....-....-~-.-.--....-.--.------ most part, these moneys are necessary to complete outstanding construction contracts and related engineering and professional services. Trunk Reserve Fund - The Trunk Reserve Fund consists of dedicated revenue generated from utility connection permits and acreage fees assessed at time of sewer and water installation for the purpose of recovering trunk oversizing costs and central municipal system improvements i.e., wells lift stations, force mains, etc. These dollars are programmed throughout the course of the city's capital improvement plan. Collector Street Fund - The Collector Street Fund consists of dedicated revenue generated by fees associated with new development and new construction building permits for the purpose of funding pedestrian related improvements i.e., bikeways, sidewalks, trail systems plus right of way acquisition along collector streets and occasional collector street links. Debt Service Fund - The Debt Service Fund represents prepayments of special assessments, property tax collections and special levies needed to amortize the outstanding bonded indebtedness of the City. This fund balance is 100% reserved for the payment of bond principal and interest. Agency Fund - The Agency Fund accounts for the $1500 residential building permit deposit that is refunded to the building contractor upon final inspection. This provides the City the required financial assurance that the property site will be adequately cleaned up and debris free before an occupancy permit is granted. Because city funds are pooled for investment purposes, interest is allocated to each fund on a quarterly basis, and is based upon each individual fund's proportionate share of the total amount. Overall the total investment pool does not represent excess reserves but rather available financial resources. In most instances these funds were established and restricted for specific and designated purposes by either Minnesota Statutes or City Code to accomplish the goals and objectives of the City of Prior Lake.