HomeMy WebLinkAbout4E - 2nd Quarter Investment Report
MEETING DATE:
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AGENDA ITEM:
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RECOMMENDED
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STAFF AGENDA REPORT
mLY 19, 1999
4E
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF 1999 2ND QUARTER
INVESTMENT REPORT
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 t
Quarter Investment R
consent agenda to approve the 1999 2nd
rt as submitted.
1. 1999 uarter Investment Report
2. Investment Report Summary Narrative
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16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612t447-4245
AN EQUAL OPPORTUNITY EMPLOYER
INVESTMENT REPORT SUMMARY
June 30.1999
Reference Interest Purchase Maturity
Number Investment Cost Rate Date Date
500754-00 Bank & Trust, Puerto Rico 79,147.80 6.21% 12/18/95 03/15/00
500754-00 1 st National Bank, OK 79,147.80 6.21% 12/18/95 03/15/00
500754-00 New South Federal Savings, CA 79,147.80 6.21% 12/18/95 03/15/00
500754-00 River Bank America, NY 79,147.80 6.21% 12/18/95 03/15/00
500754-00 Standard Federal Bank, MI 79,147.80 6.21% 12/18/95 03/15/00
MN-01-145-1
Liquid Asset Fund
2,000,000.00
4.60%
06/30/99
--/--/99
50912553 G.E. Commercial Paper 590,319.00 4.75% 03/12/99 07/16/99
50912553 GE Commercial Paper 779,150.00 4.64% 01/15/99 08/13/99
50912553 G.E. Commercial Paper 482,740.00 5.01% 12/29/98 09/15/99
50912553 U.S. Treasury Notes 856,560.00 6.29% 05/15/97 11/15/99
50912553 U.S. Treasury Notes 462,130.00 5.43% OS/26/98 11/15/99
50912553 G.E. Commercial Paper 482,428.00 4.91% 02/22/99 11/19/99
50912553 U.S. Treasury Notes 406,010.00 6.16% 06/09/97 11/15/00
50912553 GE Commercial Paper 963,600.00 5.09% 05/17/99 02/11/00
50912553 G.E. Commercial Paper 288,432.00 5.42% 06/16/99 03/10/00
50912553 FNMA govt agency 1,000,000.00 5.21% 02/24/99 02/16/01
50912553 U.S. Treasury Notes 397,890.00 6.03% 07/11/97 05/15/01
50912553 U.S. Treasury Notes 380,800.00 6.24% 06/09/97 11/15/01
50912553 FNMA govt agency 996,000.00 5.45% 03/23/99 02/01/02
50912553 FHLB govt agency 1,000,000.00 5.54% 12/03/98 06/03/02
50912553 Apple Valley G.O. bonds 500,000.00 5.75% 09/03/98 12/01/02
50912553 FHLMC govt agency 500,000.00 6.12% 01/19/96 01/21/03
50912553 FHLB govt agency 500,000.00 5.56% 10/20/98 1 0/20/03
50912553 FHLB govt agency 500,000.00 6.00% 06/28/99 06/28/04
008-950601-33 Certificate 96,000.00 6.20% 12/05/97 11/28/02
008-950601-33 Certificate 96,000.00 6.10% 04/22/98 04/22/03
008-950601-33 Certificate 96,000.00 6.00% 05/12/98 11/12/03
008-950601-33 FNMA govt agency 200,000.00 5.52% 12/01/98 12/01/03
008-950601-33 Certificate 96,000.00 6.00% 08/05/98 02/05/04
008-950601-33 FNMA govt agency 100,000.00 6.00% 02/18/99 02/19/04
008-950601-33 Certificate 99,000.00 6.00% 06/04/99 06/04/04
008-950601-33 Certificate 96,000.00 5.13% 02/16/99 08/16/04
008-950601-33 Certificate 99,000.00 6.00% 09/02/98 09/02/05
008-950601-33 FHLB govt agency 249,375.00 6.42% 03/09/98 02/27/06
# 19089 Certificate 96,000.00 5.00% 10/07/98 10/07/99
# 19089 FNMA zero bonds 849,900.00 5.80% 12/04/97 1 0/08/00
# 19089 Govt Trust zero bonds 97,800.00 5.79% 04/14/98 11/15/01
# 19089 Govt Trust zero bonds 311,087.00 5.66% 04/14/98 11/15/01
# 19089 TV A zero bonds 387,555.00 5.65% 03/20/98 10/15/02
# 19089 TV A zero bonds 115,981.00 5.65% 03/20/98 11/01/02
# 19089 Certificate 96,000.00 5.25% 09/30/98 09/30/03
# 19089 FNMA govt agency 400,000.00 5.10% 10/01/98 10/01/03
# 19089 Certificate 96,000.00 5.20% 10/07/98 10/07/03
# 19089 Certificate 96,000.00 5.30% 10/07/98 10/07/03
# 19089 FHLB govt agency 500,000.00 6.50% 06/29/99 06/29/04
# 19089 TV A zero bonds 205,602.00 5.84% 03/23/98 10/15/04
# 19089 FNMA govt agency 100,000.00 6.13% 02/06/98 01/24/05
# 19089 FNMA govt agency 256,525.00 6.34% 12/06/95 11/10/05
# 19089 FHLMC govt agency 250,000.00 6.13% 01/13/99 01/13/06
# 19089 FNMA govt agency 250,000.00 7.14% 05/15/97 11/17/06
# 19089 FNMA govt agency 250,587.00 7.16% 05/15/97 02/14/07
# 19089 FHLMC govt agency 99,786.00 7.17% 03/24/97 03/12/07
Investment Portfolio Total ~ I ~, IOf ,99o.uu 0.00"/0 (weighted average)
INVEST2.XLS Page 1 11 :00 AM7/1/99
INVESTMENT REPORT SUMMARY NARRATIVE
The attached Investment Report identifies the various types of investments and those
brokers/banks 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 "AAA" and matures in 270 days or less.
6. Repurchase Agreements 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 15 funds 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 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 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.
~~
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City Store Fund - The City Store Fund was established recently to provide city logo
merchandise to the residents as a public relations effort to promote the community. These
funds are designated to purchase such stock as clothing, mugs and souvenirs.
Capital Park Fund - Capital Park funds are dedicated funds generated by the 10% park
dedication fee 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.
EDC Loan Fund - This fund was created to account for the proceeds of an economic
development grant which was received from 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.
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 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 bond proceeds from the issuance of
water revenue bonds necessary for the construction of the maintenance facility. The CF AC
(capital facility) charge of $7.50 on each utility bill is reserved to pay the bond principal
and interest installments.
Construction Fund - Construction Fund dollars represent unexpended bond proceeds which
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.
Park Referendum Fund - Park Referendum Fund dollars represent unexpended bond
proceeds which are reserved to pay for improvement projects that have been authorized by
the City Council and approved by the voters as a result of the referendum election
conducted during 1997. For the most part, these moneys are necessary to complete
outstanding construction contracts and related engineering and professional services
associated with those identified park improvements.
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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..
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.
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.
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.. ,.."
TREASURER'S REPORT FUND DESCRIPTIONS
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 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 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.
City Store Fund - The City Store Fund was established recently to provide city logo
merchandise to the residents as a public relations effort to promote the community. These
funds are designated to purchase such stock as clothing, mugs and souvenirs.
Capital Park Fund - Capital Park funds are dedicated funds generated by the 10% park
dedication fee 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.
EDC Loan Fund - This fund was created to account for the proceeds of an economic
development grant which was received from 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.
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 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.
.' --
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Revolvin~ 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 bond proceeds from the issuance of
water revenue bonds necessary for the construction of the maintenance facility. The CFAC
(capital facility) charge of $7.50 on each utility bill is reserved to pay the bond principal
and interest installments.
Construction Fund - Construction Fund dollars represent unexpended bond proceeds which
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.
Park Referendum Fund - Park Referendum Fund dollars represent unexpended bond
proceeds which are reserved to pay for improvement projects that have been authorized by
the City Council and approved by the voters as a result of the referendum election
conducted during 1997. For the most part, these moneys are necessary to complete
outstanding construction contracts and related engineering and professional services
associated with those identified park improvements.
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..
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.
..-
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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
monthly 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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