HomeMy WebLinkAbout5F - 2006 3rd Q. Investment Report
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16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
CITY COUNCIL AGENDA REPORT
OCTOBER 16,2006
SF
Ralph Teschner, Finance Director
CONSIDER APPROVAL OF 2006 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 2006 3RD Quarter
Investment Report as submitted.
1. 2006 3RD Quarter Investment Report
2. Investment Report Summary Narrative
www.cityofpriorlake.com
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Phone 952.447.4230 / Fax 952.447.4245
Reference
Number
INVESTMENT REPORT SUMMARY
Seotember 30. 2006
Investment
Cost
Interest
Rate
Purchase
Date
Maturity
Date
Liquid Asset Fund
2,500,000.00
4.94%
09/29/06
--/--/06
76T -155845 FHLMC gavt. discount 987,500.00 5.08% 07/11/06 10/10/06
76T-155845 G.E. commercial paper 976,460.00 4.82% 04/17/06 10/16/06
76T-155845 FHLMC govt. agency 1,974,140.00 4.48% 11/30/05 11/06/06
76T-155845 FHLMC govt. agency 493,540.00 4.48% 12/01/05 11/06/06
76T -155845 FHLMC govt. discount 982,800.00 5.07% 07/11/06 11/14/06
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 FNMA govt. discount 978,700.00 5.06% 07111/06 12/15/06
76T -155845 FHLB govt. agency 1,000,000.00 4.00% 12/23/03 12/23/06
76T -155845 G.E. commercial paper 983,300.00 5.04% 09/15/06 01/16/07
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 FHLB govt. agency 500,000.00 5.00% 12/15/03 12/15/07
76T -155845 FNMA 990,650.00 5.14% 09/15/06 02/15/07
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% 06/30/03 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 10/08/1 0
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
11..--1- --..
008-950601-33 FHLB govt. agency 500,000.00 4.50% 08/20/03 08/20/07
008-950601-33 FHLMC govt. agency 499,375.00 4.00% 02/17/04 02/10/07
008-950601-33 FHLB govt. agency step-up 498,750.00 5.00% 05/01/03 05/01/09
# 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 FNMA govt. agency 2,000,000.00 6.63% 06/20/06 10/15/07
# 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 FNMA govt. agency 1,000,000.00 5.25% 06/20/06 06/15/08
# 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 - monthly 500,000.00 4.00% 03/25/04 03/15/12
# 19089 FNMA govt. agency 495,000.00 5.13% 12/02/05 07/20/12
# 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 1 0/24/13
Investment Portfolio Total $ 34,072,541.00 4.73% (weighted average)
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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 ofa United States Bank.
5. Commercial Paper that is rated "A1+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 19 fund types 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.
Water Ouality 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 fmance 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
pay for community transit services such as the downtown commuter service, van pool and dial-a-ride
services.
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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 paid
at time of development contract execution as a result of new development. Funds are collected 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 fmal 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 writedowns in the form
of tax increment fmancing 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
most part, these moneys are necessary to complete outstanding construction contracts and related
engineering and professional services.
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Street Oversize 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.
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.
Water Storage Fund - The Water Storage Fund accounts for the water tower fee that is charged and
collected on building permits. This fund balance is 100% reserved for the construction of elevated and
ground water storage facilities.
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 fmancial
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.
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