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Home My WebLink About06-20-11 Regular Meeting of Fiscal Affairs Committee CHUCK ENGELKEN, CHAIR JAY MARTIN Councilmember District 2 O Councilmember District 5 DARYL LEONARD .~ J 9� JOHN ZEMANEK Councilmember District 3 v /r \ m Councilmember At -Large A - TOMMY MOSER Councilmember District 4 MINUTES OF MEETING OF FISCAL AFFAIRS COMMITTEE JUNE 20, 2011 The Fiscal Affairs Committee met on June 20, 2011, at 5 :15 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 p.m. Committee Members present were Councilmember District 3 — Daryl Leonard, Councilmember District 4 — Tommy Moser, Councilmember District 5 — Jay Martin, and Councilmember At -Large A — Zemanek. 2. Consider approval of minutes of the Meeting held on June 13, 2011, of Fiscal Affairs Committee — P. Fogarty Committee Member Moser moved to approve the minutes of the meeting held on June 13, 2011, of the Fiscal Affairs Committee as presented. Committee Member Martin seconded. MOTION PASSED. Ayes: Chairman Engelken, Committee Members Moser, Leonard Martin and Zemanek Nays: None 3. Consider approval or other action regarding the proposed list of firms to receive the City's RFP (request for proposal) for independent auditor services and review of RFP document for independent auditor services and proposed timeline — M. Dolby Director of Finance Michael Dolby presented the proposed list of firms to receive the City's RFP (request for proposal) for independent auditor services, reviewed the RFP document for independent auditor services, and provided the proposed timeline. Committee Member Zemanek questioned if alternate members of the Fiscal Affairs Committee were allowed to vote on items. Staff was directed to inquire with the City Attorney's Office and confirm the role of alternate members on the board. Committee Member Moser informed Mr. Dolby he does not want Belt Harris Pechacek to be entertained for independent auditor services. Committee Members Leonard and Zemanek agreed with Committee Member Moser. Director of Finance Michael Dolby reviewed the following proposed timeline with the committee members. The advertising dates for the RFP are June 16 through June 23. On June 21, RFPs will be distributed. July 12 through July 22, RFPs will be reviewed by staff. On July 25, staff would like to meet with committee members and discuss firms for interviews. Mr. Dolby asked how many firms would the committee would like to interview. Page 1 of 2 June 20, 2011, Fiscal Affairs Committee Minutes The committee members agreed to interview five firms and to meet on August 2, commencing interviews at 3:00 p.m. Interviews will be thirty minutes apart, and the interviewing should conclude by 6:00 p.m. At the August 8 City Council Meeting, the committee will recommend an auditing firm to the full Council. Michael Dolby was asked to provide the grading sheet to the committee. Committee member Leonard had questions on the evaluation worksheet and asked whether some parts are subjective. Mr. Dolby answered yes. The contract will be awarded the last Monday in August. The Council budget workshop meetings are August 8 through August 12, beginning at 6:00 p.m. 4. Administrative Reports — R. Bottoms Mr. Dolby reported city of La Porte sales tax entities are audited on a quarterly basis. The firm drives the streets and conducts an audit. The State of Texas sales tax is 6.25 %, the City of La Porte is 2 %. The City has received payment back for the automated meters. Mr. Dolby reported 2010 water loss and will provide a report at a future meeting on 2011 water loss. Committee members requested to receive the sales tax report on a quarterly basis. 5. 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. 6. Adjourn There being no further business, Committee Member Moser moved to adjourn the meeting at 5:54 p.m. Respectfully submitted, 10 Patrice Fogarty, ' ! Secret .f Passed and approved on the 20 day of June, 2011. UAAM/k Chairman Chuck Engelke Page 2 of 2 June 20, 2011, Fiscal Affairs Committee Minutes 2 3 CITY OF LA PORTE Interoffice Memorandum TO: Chuck Engelken, Councilmember Tommy Moser, Councilmember Daryl Leonard, Councilmember John Zemanek, Councilmember Jay Martin, Councilmember Ron Bottoms, City Manager Traci Leach, Assistant City Manager FROM: Michael Dolby, Director of Finance Shelley Wolny, Treasurer lS DATE: July 7, 2011 SUBJECT: Quarterly Investment Report For the third quarter of the 2011 fiscal year, the City's investment portfolio yield has been between 0.26% and 0.31 %. The average return on the portfolio for the third quarter of the fiscal year was 0.28 %, which is above the average yield of our benchmark, which was 0.10% (see graph below). Our benchmark is the 6- month T -Bill rate. The year to date interest earned for the 2011 fiscal year for all funds was $129,338 which is approximately 39% of the $335,000 budgeted for the year. City vs. Benchmark 0.80% - 0.60 % 0.40% 0.20% —� 0.00% 0 0 0 0 0 0 N. N. N. ti N. N. J JCo e Q N G JN C N O N. C y t` Q. c� O o � �a t Sa Q C�a 0 Portfolio Yield Benchmark At June 30 the City's portfolio consisted of 70% in Texpool, 13% in Agency Notes, 15% in Certificates of Deposit, 1% in TexSTAR and 1% in Logic (see pie chart below). By Investment Type 70% 1% 1% 13% 15% ■Texpool ■TexSTAR uLogic ■Agency Notes in Certificates of Deposit 1 The most current overnight rate was set on December 16, 2008 at 0.00% to 0.25 %. At the end of the third quarter, the City's portfolio consisted of 72% of the portfolio maturing overnight (see graph below), 15% of the City's portfolio matures in 1 -12 months, 11% maturing in 12 -24 months and 2% maturing in 24 -36 months. By Investment Maturity 11% 2% 15% 72% ■ Overnight • 1 -12 Months ® 12 -24 Months ■24 -36 Months Currently, the 3 -month T -Bill is at 0.04 %; 2 -year, at 0.41 %; 5 -year, at 1.58 %; and, the 20 -year is at 3.91% see yield curve below). Yield Curve 5.00% 4.00% 3.00% 2.00% 1.00 % - 0.00% ---••••• � d os 17\.c. ��s of t of t ti Treasury Bills al•■•3 months ago current The overnight rate is currently at 0.00% to .25 %. We will continue to focus on laddering the portfolio to maintain a constant cash flow and a liquid position. 2 2 Year T -Note 8.00% 6.00% 4.00% 2.00% 0.00% ^ O O ° � 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 June 30, 2011 80.00 %. Par Book Market Days to 60.00% -- - -- -- Value Value Value Maturity Investment Pools 42,459,220 42,459,220 42,459,220 1 4000 % -- -- - Agencies 8,000,000 8,000,000 8,017,739 678 Certificates of Deposit 8,500,000 8,622,645 8,622,645 206 2000% Total 58,959,220 59,081,865 59,099,604 123 0.00 Investment Pools CDs Agencies 71.87% 14.59% 13.54% Shin-11 ■Jun -10 Investment Maturity Schedule as of June 31, 2011 Book Value Percent Overnight 1-12 months Overnight 42,459,220 71.87% 1 -12 months 8,622,645 14.59% v ? Y 1 -2 years 6,500,000 11.00% 2 -3 years 1,500,000 2.54% Total 59,081,865 100.00% 1 -2 years 2 -3 years Portfolio Performance for the month of June 30, 2011 Weighted 1.00% Portfolio Benchmark Average Yield Yield* Maturity 0.80% Pooled Funds 0.26% 0.10% 4.46 months 0.60% Bond Funds 008% 0.04% 1 day 0.40% Total 0.17% 0 07% 4.10 months 0.20% 0.00% *The pooled funds benchmark is based on the average monthly yield of a 6 -month Treasury. Pooled Funds Bond Funds Total 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 Yield ■Bcnchmark Yicld• Portfolio Earnings as of June 30, 2011 200,000 reillill1111111111 Budget _ Actual Percent 150,000 —_-■ General 162,500 52,382 32.24% Enterprise 27,100 10,278 37.92% 100,000 0 IIIIIIIIIIIIIF ■ Internal Service 39,000 15,918 40.81% Other Funds 106,400 50,761 47.71% 50,000 • Total 335,000 129,338 38.61% General Enterprise Internal Service Other Funds •Budget NAotual Yield Curve WAM - Pooled Funds 2.50% 6.00 Average for June 2.00% —_ _. _._ _. _ —_. ... _— 5.00 !!ce ested in. 2011 2010 1.50% -- a 4.00 oolsory ds inve count Balance 2,693,723 2,270,136 3 mo 6 me 1 yr 2yr 5yr _ 0.00 Al." 11 ■May -1I on■Juo-11 Apr -I1 May -11 Jun-11 Portfolio Yield vs Benchmark Aug -11 Jun -11 Apr -11 Feb -11 Dec -10 Oct -10 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% Oct -10 Nov -10 Dec -10 Jan-11 Feb -11 Mar -11 Apr -11 May -11 Jun -11 Jul -11 Aug -11 Sep -11 ■ Portfolio Yield 0.51% 0.44% 0.40% 0.31% 0.29% 0.32% 0.31% 0.27% 0.26% • Benchmark 0A8% 0.18% 0.19% 0.18% 0.17% 0.16% 0.12% 0.09% 0.10% Additional Earnings (over 6 month Treasury Bill) 70,000 60,000 50,000 40,000 30,000 20, lo,00a 000 s jj 11 Oct -10 Nov -10 Dec -10 Jan-11 Feb -11 Mar -11 Apr -11 May -11 Jun -11 Jul -11 Aug -11 Sep -11 • Add Erng 10,521 8,449 5,915 4,099 3,652 6,934 7,876 6,301 5,464 • Cumm Erng 10,521 18,970 24,885 28,984 32,636 39,570 47,446 53,747 59,211 59,211 59,211 59,211 Investment Maturity & Cashflow (excluding Texpool, TexSTAR & Logic) 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 1 Jul -11 Sep -11 Nov -11 Jan-12 Mar -12 May -12 Jul -12 Sep -12 Nov -12 Jan-13 Mar-13 May -13 Jul -13 Sep -13 Market Gain (Loss) by Month 30,000 20,000 - 10,000 - (10,000) (20,000) - (30,000) - (40,000) OCT NOV DEC JAN rbB MAR APR MAY JUN JUL AUG SEP AGENCIES 1,027 (17,285) (23,511) (17,426) (27,372) (34,668) 1,054 17,715 17,739 Monthly Portfolio Division • 6% • 21% • 52% • 21% • Wells Fargo • Morgan Stanley • Coastal Securities • Amegy Bank Average Return on Investments 0.90% 0.80% 0 0 0 0.70 /o 0.60% #j #d 0.50% 111111 MIS 0.40 %€ r tt 11111 11111 111111 111111 0.30% 0.20% 0 „,,„ 0.10 ° /O 0.00% Coastal Morgan Wells Amegy • Average Yields STY/144es WAI#ai ° June 30, 2011 This report is in full compliance with the investment strategy as established for the pooled investment fund and the Public Funds Investment Act (Chapter 2256). W °4‘17 / dad. G. Dolby, . Director of Finans a Treasurer