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Home My WebLink About03-12-18 Fiscal Affairs Committee Meeting CHUCK ENGELKEN, CHAIR JAY MARTIN Councilmember District 2 Councilmember District 5 DARYL LEONARD DOTTIE KAMINSKI Councilmember District 3 Councilmember At Large B Alternate Member MINUTES OF MEETING OF FISCAL AFFAIRS COMMITTEE NOVEMBER 13, 2017 The Fiscal Affairs Committee met on November 13, 2017, at 5:00 p.m., in the La Porte City Hall Council Chambers, 604 West Fairmont Parkway, La Porte, Texas, to consider the following items of business: 1.Call to Order Chairman Chuck Engelken called the meeting to order at 5:00 p.m. Also present were: Committee Member Daryl Leonard and Jay Martin. Also present: City Secretary Patrice Fogarty, City Manager Corby Alexander, Finance Director Michael Dolby, and Treasurer Shelley Wolny. 2.Consider approval or other action regarding minutes of the September 11, 2017 meeting of the Fiscal Affairs Committee P. Fogarty Committee Member Leonard moved to approve the minutes of the September 11, 2017, meeting. Committee Member J. Martin seconded. MOTION PASSED UNANIMOUSLY 3/0. 3.Receive and review Fourth Quarter (FY2017) Investment Report M. Dolby Treasurer Shelley Wolny presented the Fourth Quarter (FY2017) Investment Report. There were no questions from Committee Members. 4.Receive and review months of June; July and August (FY2017) Purchasing Card Expenditures M. Dolby Purchasing Manager Cherell Daeumer presented June; July and August (FY2017) Purchasing Card Expenditures. There were no questions from Committee Members. 5.Receive and review the City of La Porte Investment Policy M. Dolby Treasurer Shelley Wolny presented the City of La Porte Investment Policy. There were no questions from Committee Members. 6.Set date for next meeting. The Committee set March 12, 2018, at 5:00 p.m., as the date and time for the next meeting. 7.Administrative Reports C. Alexander Page 1 of 2 November 13, 2017, Fiscal Affairs Committee Minutes There were no administrative reports. 8.Committee Comments Matters appearing on agenda; Recognition of community members, city employees, and upcoming events; Inquiry of staff regarding specific factual information or existing policy. There were no Committee comments. 9.Adjourn There being no further business, Committee Member Earp moved to adjourn the meeting at 5:11 p.m. Committee Member Leonard seconded. MOTION PASSED UNANIMOUSLY 3/0. Respectfully submitted, ________________________________ Patrice Fogarty, City Secretary th Passed and approved on the 12 day of March, 2017. ________________________________ Chairman Chuck Engelken Page 2 of 2 November 13, 2017, Fiscal Affairs Committee Minutes CITY OF LA PORTE Interoffice Memorandum TO:Chuck Engelken, Councilmember Daryl Leonard, Councilmember Jay Martin, Councilmember Dottie Kaminski, Councilmember Corby Alexander, City Manager Jason Weeks, Assistant City Manager FROM:Michael Dolby, Director of Finance Shelley Wolny,Treasurer DATE:January15,2018 SUBJECT:Quarterly Investment Report For the firstquarterof the 2018fiscal year, the City’s investment portfolio yield averaged1.28%, which is belowthe average yield of our benchmarkat 1.38% (see graph below).Since the City’s practice is to hold investments until maturity, many of the agencies in the portfolio are yielding lower than the benchmark of the 6-month T-Billrate. As securities mature,staff will reinvest at higher rates. The total interest earned through December2018for all fundsis$255,101,whichis 48% of the budget of $536,150. City vs. Benchmark 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% ` 0.20% 0.00% Portfolio YieldBenchmark st At December31,the City’s portfoliototaled $78,595,415and consisted of 26%in Texpool,46% in Agency Notes and 28% in Logic.Half of the portfolio remains in theinvestment pools to maintain adequate liquiditywhile pursuing opportunities for to optimize yield.Staff will continue to focus on laddering and diversifying the portfolio through the purchase of agenciesto strengthen returns. 1 By Investment Type 28% 46% 26% TexpoolLogicAgency Notes At the end of thefirstquarter, the City’s portfolio consisted of54% of the portfolio maturing overnight, 15% maturing in 1 year, 21% maturing in 1-2 yearsand 10% maturing beyond two years. By Investment Maturity 10% 21% 54% 15% Overnight1-12 Months 12-24 Months24-36 Months Currently, the 3-month T-Bill is at1.34%; 2-year, at1.84%; 5-year, at2.18%; and, the 20-year is at2.60%. Theyieldcurve on the following pageshows a flattening trend that occurred in 2017 due to a rise in short- term yields. However,in 2018 the yield curve has begun to steepen as a reflection of a strengthening economy. 2 Yield Curve 3.00% 2.00% 1.00% 0.00% Treasury Bills 1 year ago3 months agocurrent At the December Federal Open Market Committee meeting, the Fed increased the target rate to1.25% to 1.50%. Although the rate remained unchanged at the January meeting, strong momentum from 2017 is continuing into 2018. Continued economic growth, positive assessments of the labor market and rising consumer confidence are fueling expectations of three to four rate increases in 2018 with the first likely to occur in March. While staff continues to monitor rates and economic conditions,the strategy for the portfolio will,as always,focus on ladderingto pick up yield along the curve and maintaininga constant cash flow and liquid position. 2 Year T-Note 8.00% 6.00% 4.00% 2.00% 0.00% In summary, we will continue to invest the City’s funds in conservative investments, as authorized by the Public Funds Investment Act, always keeping in mind Safety first, and then Liquidity and lastly Yield. 3 Portfolio Composition and Value as of December 31, 2017 100.00% 80.00% ParBookMarketDays to 60.00% ValueValueValueMaturity Investment Pools42,595,41542,595,41542,595,41531 40.00% Agencies36,000,00036,000,00035,748,598523 Total78,595,41578,595,41578,344,013256 20.00% 0.00% Investment PoolsAgencies Dec-17Dec-16 Investment Maturity Schedule 1-12 months as of December 31, 2017 Book ValuePercent 1-2 years Overnight42,595,41554.20% 1-12 months12,000,00015.27% 1-2 years16,000,00020.36% 2-3 years8,000,00010.18% Overnight Total78,595,415100.00% 2-3 years Portfolio Performance for the month of December 31, 2017 1.50% Weighted PortfolioBenchmarkAverage YieldYield*Maturity 1.00% Pooled Funds1.34%1.50%8.95 months Bond Funds1.18%1.34%33 days 0.50% Total1.26%1.42%8.62 months 0.00% *The pooled funds benchmark is based on the average monthly yield of a 6-month Treasury. Pooled FundsBond FundsTotal The bond funds benchmark yield is based on the average monthly yield of a 3-month Treasury. The total is based on weighted average monthly benchmark yields. Portfolio YieldBenchmark Yield* Portfolio Earnings as of December 31, 2017 350,000 300,000 BudgetActualPercent 250,000 General325,000131,07140.33% 200,000 Enterprise105,65035,03933.16% 150,000 Internal Service30,50017,58457.65% Other Funds75,00071,40895.21% 100,000 Total536,150255,10147.58% 50,000 - GeneralEnterpriseInternal ServiceOther Funds BudgetActual Yield Curve WAM -Pooled Funds 2.50% 12.00 December 2.00% 10.00 % of funds invested in:20172016 1.50% Securities & Pools83.01%83.10% 8.00 Bank Depository16.99%16.90% 1.00% 6.00 Total % of funds invested100.00%100.00% 0.50% 4.00 Operating Account Balance16,081,21313,866,424 0.00% 2.00 3 mo6 mo1 yr2yr5yr 0.00 Oct-17Nov-17Dec-17 Oct-17Nov-17Dec-17 4 Portfolio Yield vs Benchmark Aug-18 Jun-18 Apr-18 Feb-18 Dec-17 Oct-17 0.00%0.20%0.40%0.60%0.80%1.00%1.20%1.40%1.60% Oct-17Nov-17Dec-17Jan-18Feb-18Mar-18Apr-18May-18Jun-18Jul-18Aug-18Sep-18 Portfolio Yield 1.25%1.26%1.34% Benchmark 1.25%1.39%1.50% Additional Earnings (over 6 month Treasury Bill) - (2,000) (4,000) (6,000) (8,000) (10,000) (12,000) (14,000) (16,000) (18,000) (20,000) Oct-17Nov-17Dec-17Jan-18Feb-18Mar-18Apr-18May-18Jun-18Jul-18Aug-18Sep-18 Add Erng (1,813)(6,488)(9,049) Cumm Erng (1,813)(8,301)(17,350(17,350(17,350(17,350(17,350(17,350(17,350(17,350(17,350(17,350 Investment Maturity & Cashflow (excluding Texpool & Logic) 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - 5 Market Gain (Loss) by Month - (50,000) (100,000) (150,000) (200,000) (250,000) (300,000) OCTNOVDECJANFEBMARAPRMAYJUNJULAUGSEP AGENCIES (151,160(222,660)(251,402 Monthly Portfolio Division 11% 17% 28% 44% Wells FargoCoastal SecuritiesCantor FitzgeraldFTN Financial Average Return on Investments 1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% CoastalCantorWellsFTN SecuritiesFitzgeraldFargoFinancial Series1 1.19%1.43%1.10%1.72% 6 7 11,889.00 Aug June WARE7,883.48 LLC25,025.23 T Vendors INC9,366.76 #05208,216.36 AR23,860.95 20 LP6,507.49 SERVI9,627.22 MEDICAL INC.6,629.00 COMPUTER Top TIRE AUTO MAIN TREE INC6,176.34 INDUSTRI10,017.00 & CAPITAL6,374.56 SERVICES GRAINGER7,988.42 LEASEDEQUIPMEN SERVICE15,323.00 LIGHTWAVE, 2017 Cycle 2,465.41CELLEBRITE2,279.96CORE Amount Nov 11,889.00BOUND LLC9,796.63G&K T K VB6,970.39AMAZON16,493.73 COMPAN4,000.00BEASLEY LA Name #05202,991.80OREILLY AR9,413.32VZWRLSS22,048.33 PAY SERVI6,772.58DX MEDICAL CLEAR FREIGHTLINER 62554682,614.88SOUTHERN HAREWARE2,240.98WCA BILL TIRE AUTO Vendor PRINTING TREE TECHNOLO1,988.00ZONES INC6,176.34PBI INDUSTRI2,530.00CEMEX7,104.00 CAPITAL2,903.36GALLS7,986.22 SERVICES BARN VENDORS LEASEDEQUIPMEN SERVICE4,640.00TEXAS 20 TOP 2017 Cycle Amount Oct 43,035.20ATT63,928.72ATT171,610.54 P3,172.39BIKE S3,136.00FISCHER'S WARE7,883.48VZWRLSS LLC15,228.60PBI VB7,464.68ZONES Name INC9,366.76BOUND PAYLP6,507.49GIBSONLLC5,890.00AMAZON3,068.72PS MEDICAL CUSTOMER INC3,884.36WCA INC.6,629.00DX COMPUTER ALLSTATE4,936.00OREILLY FREIGHTLINER 62554682,872.16COBAN BILL Vendor MAIN TREE INDUSTRI7,487.00BEASLEY NFIP SHAD3,387.50TEXAS & GRIFFIN GRAINGER7,988.42G&K SERVICE3,561.00PCMG800 LIGHTWAVE, 2017 Cycle 3,809.39FEMA2,907.00VESCO3,297.80HOUSTON Amount Sep T INC2,946.00DX MAR #B2,443.21PCMG800 Name #05205,224.56AMAZON7,400.58VESCO5,495.08VESCO11,713.62 AR14,447.63BOUND SERVI2,854.64HOUSTON VB7,613.26PS CO TIRE GROUP5,070.00CORE CONSULTING2,673.32BUD IVR LLC3,000.00ANYPROMO TIRE OIL Vendor AUTO DEPOT FINANCE6,052.00TEXAS CAPITAL3,471.20ARCHIVESOCIAL4,788.00GALLS2,910.85WW SERVICES TECHNOLOGIES MEDIA SERVICE7,122.00WW ATT64,646.62ATTG&KVZWRLSSDXCEMEX7,104.00SOUTHERNTXDOTAMAZON6,024.43VZWRLSSOREILLYGALLS5,075.37CELLEBRITEAJRRLOVELACE@MEADOR.CON4,851.00LEADSONLINEOFFICEWCABILLTECHKAPVESCO2,920.74FREDSOUTHERNBEASLEYI MAGENETAPACHE 2017 2017September, 12.39%7.51% $29,659.85$21,399.47 $239,431.61$284,853.74 2017August, $26,505.14 $233,831.19 2017July, 15.50%11.34% $301,016.61 2017June, Summary 2017May, Spend Vendor 2017April, Local 2017March, 2017Feb, 7.34%9.61%8.53%10.06%11.19%13.24% 2016Jan, $21,381.90$28,991.91$24,162.23$35,247.90$32,379.86$45,668.18$46,655.74 $291,466.56$301,540.43$283,097.26$350,242.33$289,331.30$344,916.31 9.04% 2016Dec, Nov, Porte$20,307.80 Month/cycle$224,718.28 La forin Spend Local TransactionsTransactions TotalTotal Percent $870.45 Nov, 2017 Oct, 2017 FUND BY PURCHASES Fund Number and DescriptionSep, 2017General$178,644.64$221,273.41$181,649.51Utility Fund$23,729.82$30,545.66$22,673.45Utility CIP Fund$2,255.52$763.29$2,642.46Vehicle Replacement Fund$270.00Airport Fund$55.00Insurance Fund$985.00$7,318.88$1,526.25General CIP Fund$2,276.82$1,897.99La Porte Area Water Authority$1,328.73$4,284.64$54.06Sewer Rehabiiltation fund$2,606.20$2,770.35$1,477.60Drainage Improvement fund$100.00$1,811.47Technology fundVehicle Maintenance Fund$27,371.48$26,186.16$25,775.17Grant fund$2,593.75$19,781.30$10,028.28Street Maintenance Sales TaxEmergency Services Fund$10,354.57$8,213.19$6,962.58Hotel/Motel Occupancy$32,382.21$17,982.67$5,978.14Section 4B Sales TaxTotal for Month$284,853.74$341,117.54$261,449.42 001002003009010014015016018019023024032033034037038