HomeMy WebLinkAboutFY 2015 Annual Investment ReportCITY OF EULESS
INVESTMENT COMMITTEE MEETING
FISCAL YEAR 2014-2015
Building on a Strong Foundation
201 North Ector Drive
Euless, Texas 76039
www.eulesstx.gov
Investment Committee Meeting
1/12/2016
* Compliance Summary - Legislative Requirements
Introduction
Investment Strategy Compliance
* Annual Review, Fiscal Year 2015
I. Portfolio Summary
II. Performance Summary
III. Interest Income Summary
IV. Collateral Review
V. Broker Selection Process
VI. Summary
* Certification
* Minutes from 1/13/2015
* Appendices
Appendix A - Investment Portfolio by Fund
Appendix B - Investment Purchases
Appendix C - Investment Maturities
Appendix D - Investment Types and Institutions
* Investment Policy
* Broker / Dealers
* Economic News
INTRODUCTION
This report is written and submitted in accordance with Chapter 2256 of the Texas Government Code
entitled the "Public Funds Investment Act," which states that "at least once each year, the investment
officer of a state agency or political subdivision shall prepare a written report concerning the agency's or
subdivision's local funds investment transactions for the preceding year and describing in detail the
investment position of the agency or subdivision as of the date of the report.
The City's investment policy designates the Investment Officers as the responsible managers for the
City's investment program. The daily investment procedures are monitored by the City's Finance
department and reviewed by the investment officers. This report has been signed by each investment
officer as required by the Public Funds Investment Act and the City's investment policy.
In compliance with the City's investment policy, the Finance department fulfills four main objectives:
compliance, safety, liquidity, and yield, in that order. Compliance is maintained through regular
reporting to City management on a monthly, quarterly and annual basis. Safety is insured by 1)
investing only in securities allowed by Chapter 2256 of the Texas Government Code entitled the "Public
Funds Investment Act"; 2) using delivery vs. payment for all purchases; 3) protecting all non-
government securities (cash and bank certificates of deposit) with collateral in the form of government
securities which are pledged to the City of Euless and safekept by the Federal Reserve Bank; and 4)
diversifying investment purchases into different security markets to minimize individual market risk.
Liquidity is met by matching investment terms to future operating cash needs such as payroll, accounts
payable, debt service, and capital improvement disbursements. The City also utilizes money market
funds and local government investment pools to provide daily liquidity needs. The yield or rate of return
which the City receives is measured against the 90 -day treasury bill yield as set by the investment
policy.
The information contained in this report will quantitatively and graphically demonstrate the achievement
of these City objectives for Fiscal Year 2014-15.
2
Investment Strategy Compliance
The strategy for all pooled funds is to assure that cash flows are matched with projected needs and provide adequate
liquidity and safety. This may be accomplished by purchasing high quality securities in a laddered structure or utilizing
an investment pool. Furthermore, the following purposes are also considered when investing.
-Operating Funds will be structured in such a way as to minimize volatility during economic cycles. This may be
accomplished by purchasing high quality short-term securities. The weighted average maturity on these funds will
remain within the 6 to 9 month range. These funds include:
101 General Fund
201 Hotel -Motel Tax Fund
202 Juvenile Case Fund
210 1/2 Cent Sales Tax Operations Fund
220 Crime Control & Prevention District Fund
221 Police Seized Asset Fund
230 Police Drug DEA Awards Fund
231 Police Drug State Awards Fund
240 Car Rental Tax Fund
245 Glade Parks PID Fund
250 Glade Parks TIRZ Fund
260 Cable PEG Fund
501 Water & Wastewater Fund
504 Service Center Fund
510 Drainage Utility Fund
520 Recreation Classes Fund
521 Arbor Daze Fund
530 Softball World Operations Fund
540 Golf Course Operations Fund
550 Parks at Texas Star Operations Fund
601 Equipment Replacement Fund
610 Health Insurance Fund
615 Risk Management Fund
-Funds for Capital Improvement Projects (CIP) and Special Purposes may purchase securities which allow for flexibility
and unanticipated project outlays by having a portion of their investments in highly liquid securities. The stated final
maturity dates of securities held should not exceed the estimated project completion date. These funds include:
301 Developer's Escrow Fund
305 Streets CIP Fund
310 1/2 Cent Sales Tax CIP Fund
320 General Capital Projects Fund
321 Redevelopment Fund
325 Police Facility Construction Fund
330 Car Rental CIP Fund
502 Water & Wastewater CIP Fund
505 Water Impact Fees Fund
508 Wastewater Impact Fees Fund
511 Drainage CIP Fund
543 TSGC CIP Fund
552 TSSC CIP Fund
725 Glade Parks Escrow Phase III Fund
730 Glade Parks Escrow Phase IV Fund
- Debt Service Funds should assure adequate liquidity to cover the debt service obligation on the required payment date.
These funds include:
401 Debt Service/General Obligation Fund
402 Star Center Debt Service Fund
403 Glade Parks Debt Service Fund
410 1/2 Cent Sales Tax Debt Service Fund
506 Water & Wastewater Debt Service Fund
531 TSSC Debt Service Fund
541 TSGC Debt Service Fund
- Emergency, Contingency, Operating and Debt Service Reserve funds will have the ability to generate a dependable
revenue stream to the appropriate fund from securities with a low degree of volatility. Such securities will tend to hold
their value during economic cycles. The stated final maturity dates of securities held should not exceed five years.
These funds include:
102 General Fund Emergency Fund
103 General Fund Contingency Fund
211 1/2 Cent Sales Tax Debt Reserve Fund
240 Car Rental Tax Fund ($2,000,000 Reserve)
503 Water & Wastewater Debt Reserve Fund
507 Water & Wastewater Emergency Fund
509 Water & Wastewater Rate Stabilization Reserve Fund
532 TSSC Reserve Fund
542 TSGC Reserve Fund
705 Star Center Escrow Fund
Based on the above strategies, the investment portfolio reported herein is in compliance with the City's adopted
investment policy.
Janina Jewell
Director of Finance
Jackie Theriot
Assistant Director of Finance
3
I. PORTFOLIO SUMMARY
The City's investment portfolio at the end of the fiscal year, September 30, 2015, is
summarized by instrument as shown below.
Distribution by Instrument
of Average Avg. Yield
Instrument $ Cost Portfolio Yield Prior Qtr.
Agencies $ 36,416,467 51.15% 0.31% 0.33%
Investment Pools $ 34,773,122 48.85% 0.04% 0.02%
$ 71,189,589 100.00%
The Distribution by Instrument table shows that the majority of City funds, approximately
51% are invested in government agencies, while the remaining 49% is invested in local
government investment pools. As of the date of this report, the weighted average yield on
the portfolio was .35%. When compared to prior quarter levels, the yield on the portfolio has
remained relatively stable. The portfolio composition below demonstrates the diversity
within the portfolio.
FHLB
27%
FAMCA
FNMA 1%
1%
Portfolio Composition
as of September 30, 2015
17%
BK OF TX
13%
TexPool
17%
TexStar
19%
4
I. PORTFOLIO SUMMARY (CONTINUED)
The City's investment portfolio at the end of the fiscal year, September 30, 2015, is
summarized by maturity as shown below.
Distribution by Maturity
# of months $ Cost
Overnight $ 34,773,122
< 1 mo $ 2,000,000
up to 6 mos $ 6,763,317
6 to 9 mos $ 3,998,755
9 to 12 mos $ 5,628,760
12 to 18 mos $ 9,625,460
18 to 24 mos $ 7,900,175
> 24 mos $ 500,000
$ 71,189, 589
of Portfolio
48.8%
2.8%
9.5%
5.6%
7.9%
13.5%
11.1%
0.7%
100.0%
The Distribution by Maturity table reflects the degree of liquidity in the City's
portfolio. Currently, access to 49% of the portfolio is available within 24 hours, with
an additional 12% available within 6 months. This liquidity strategy was followed to
meet cash flow requirements for construction projects, payroll, debt service, and
other operating expenses. An additional 13.5% of the portfolio matures within one
year. Currently, the City has 13.5% of the portfolio invested between 12 - 18
months, 11 % of the portfolio invested between 18 - 24 months, and an additional
1% beyond 24 months to take advantage of yields in this area of the curve. The
weighted average maturity on the portfolio is currently 210A2 days.
Investment Maturity Distribution
as of September 30, 2015
> 24 mos $0.5
18 to 24 mos $7.9
12 to 18 mos $9.6
9 to 12 mos $5.6
6 to 9 mos $4.0
up to 6 mos $6.8
< 1 mo $2.0
Overnight
$0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0
Shown in millions
5
I. PORTFOLIO SUMMARY (CONTINUED)
The City's investment portfolio at the end of the fiscal year, September 30, 2015, is
summarized by institution as shown below.
Institution
Cantor Fitzgerald
Coastal Securities
Duncan Williams
First Southwest
Mutual Securities
Samco Capital
Vining Sparks
TexPool
TexStar
B of TX
Distribution by Institution
$ Cost
$ 5,999,600
$ 4,999,925
$ 3,750,795
$ 3,008,280
$ 12,258,087
$ 5,499,780
$ 12,583,220
$ 14,080,968
$ 9,008,934
of Portfolio
0.0%
8.4%
7.0%
5.3%
4.2%
17.2%
7.7%
17.7%
19.8%
12.7%
$ 71,189,589 100.0%
The City strives to not only diversify the portfolio by the type of instruments that are
purchased, but also by the institution in from which they are purchased. The City
uses the following guidelines:
- No more than 10% in repurchase agreements,
- No more than 33% in investment pools with any single institution,
- No more than 33% in money market mutual funds, and
- No more than 33% by individual brokerage firms.
The chart below demonstrates the City's compliance with the above guidelines.
Investments by Institution
as of September 30, 2015
B of TX $9.0
1
TexStar $14.0
TexPool $12.6
Vining $5.5
Samco
Mutual
FSW
Duncan
Coastal
Cantor
filUE.M1111.111.1111111i
$3.0
$3.8
$5.0
$6.0
$12.3
$0.0 $4.0
$8.0
Shown in millions
$12.0
$16.0 $20.0
6
Investments at June 30, 2015
Investment Purchases/Dividends
Investment Maturities
Investments at September 30, 2015
City of Euless
Pooled Portfolio Summary
for Quarter Ending
September 30, 2015
Cost Book Market
Principal Only Value Value
$ 63,389,851 $ 63,377,794 $ 63,376,881
$ 26,657,685
$ (18,857,947)
$ 71,189,589
$ 71,168,045 $ 71,212,549
Janina Jewell
Director of Finance
Jackie Theriot
Assistant Director of Finance
Summary of Investments by Fund
The following is a summary of cash and investments held by each fund at June 30, 2015 and September 30, 2015. The changes include
all investment purchases, maturities, revenues, expenses, and transfers that occurred during the fourth quarter of FY2015.
101 General Fund
102 General Fund Emergency
103 General Fund Contingency
201 Hotel -Motel Tax Fund
202 Juvenile Case Fund
210 1/2 Cent Operations Fund
211 1/2 Cent Debt Reserve
220 CCPD
221 Police Seized Asset Fund
230 Police Drug DEA Awards
231 Police Drug State Awards
235 Public Safety Grant Fund
236 Police Grant Fund
237 Texas Transportation Grant
240 Car Rental Tax Fund
240-R Car Rental Reserve Fund
245 Glade Parks PID
250 Glade Parks TIRZ #3
260 Cable PEG Fund
301 Developer's Escrow Fund
305 Streets CIP
310 1/2 Cent Sales Tax CIP
320 General CIP Fund
321 Redevelopment CIP Fund
325 Police Facility CIP
330 Car Rental CIP Fund
401 Debt Service/General
402 Star Center Debt Service
403 Glade Parks Debt Service
410 EDC Debt Service
501 Water & Wastewater Fund
502 Water & Wastewater-CIP
503 Water & Wastewater Bond Reserve
504 Service Center Fund
505 Water Impact Fees
506 Water & Wastewater -Debt Service
507 Water & Wastewater -Emergency
508 Wastewater Impact Fees
509 W/WW Rate Stabilization
510 Drainage Utility
511 Drainage CIP
512 Drainage Reserve
520 Recreation Classes Fund
521 Arbor Daze Fund
530 Softball World Operations
531 TSSC Debt
532 TSSC Debt Reserve
540 TSGC Operations
541 TSGC Debt
542 TSGC Debt Reserve
543 TSGC CIP Fund
550 Parks @ Texas Star
552 Parks @ Texas Star CIP
601 Equipment Replacement
610 Health Insurance Fund
615 Risk Management Fund
701 Payroll Clearing Fund
705 Star Center Escrow
725 Glade Park Phase III Escrow
730 Glade Park Phase IV Escrow
TOTAL
Cash & Investment
at Market Value
6/30/2015
10,604,093
499,550
500,350
184,528
186,255
1,851,720
915,038
522,607
920,126
141,644
126,147
(14,593)
3,543
65,108
7,150,159
2,000,500
726,683
94,572
346,862
1,824,111
1,156,857
989,873
1,002,380
214,658
454
1,666,074
1,538,946
570,406
219,312
674,025
4,770,677
2,250,856
305,287
2,980
1,441,014
409,914
499,546
543,194
1,245,039
264,712
1,097,576
376,196
27,097
(418,510)
(28,644)
1,076,015
85,988
(19,345)
1,131,609
395,857
753,343
2,514,193
3,753,547
2,018,157
749,491
1,420,742
(40,473)
167,282
63,475,327
Cash & Investment
at Market Value
9/30/2015
8
10,288,301
500,650
500,940
181,575
198,300
1,893,059
915,477
669,333
877,521
141,667
146,429
(102,020)
3,543
(14,410)
9,216,203
2,004,890
750,000
13,342
379,067
1,854,938
935,338
896,411
1,028,360
202,286
454
1,594,536
684,235
131,840
2
2,163
12,845,581
3,117,241
641,351
15,122
1,487,846
92,212
500,810
478,979
797,623
303,229
1,008,834
334,895
16,434
(429,973)
8,009
1,085,080
207,260
54,721
985,765
172,498
411,409
753,466
2,957,921
3,724,034
2,076,662
519,880
1,420,809
Increase/
Decrease
In Fund
(315,792) Operating expenses
1,100
590
(2,953)
12,045
41,339
438
146,726 Operating revenues
(42,604) Seized funds
22
20,282
(87,427)
(79,518)
2,066,044 Operating Revenues
4,390
23,318 Transfer to Debt
(81,230) Transfer to Debt
32,204 Cable Franchise PEG Fees
30,828
(221,519) Capital outlay
(93,462) Capital outlay
25,981
(12,372)
(71,539)
(854,711) Debt service payments
(438,565) Debt service payments
(219,310) Debt service payments
(671,862) Debt service payments
8,074,904 Loan proceeds received
866,385 Capital outlay
336,064
12,142 Operating expenses
46,832 TRA water pmt/debt pmt
(317,703) Debt service payments
1,264
(64,214) TRA WW pmt/debt pmts
(447,416) Transfer to W/WW operations
38,517 Operating expenses
(88,743) Capital outlay
(41,301) Operating expenses
(10,663)
(11,463)
36,653 Transfer from operating
9,065 Gas royalty payments
121,272 Transfer from Reserve/op revs
74,066 Transfer from operating
(145,844) Proj exps/transfer to operations
172,498
15,552
123
443,727 Transfer from other funds
(29,513) Insurance claims
58,505 Transfer from other funds
(229,610) EOY balance will clear next mo.
67
40,473 Capital outlay
(167,282) Capital outlay
71,482,125 8,006,798
II. PERFORMANCE SUMMARY
Cash and Investment Balances -Full utilization of funds and minimization of idle cash is
necessary to pursue additional interest income revenues for the City. The average percent
of invested funds is 100% for FY2015. The monthly data below shows the continued
utilization of City funds through investments.
Consolidated Invested Percentage
FY2014 Cash Balance Invested
October $ 353,570 $ 69,213,957
November $ (467,867) $ 68,498,400
December $ (345,724) $ 71,609,800
January $ 1,260,771 $ 75,584,854
February $ (551,590) $ 76,743,544
March $ 385,538 $ 65,604,049
April $ 497,660 $ 66,134,052
May $ 695,516 $ 68,811,877
June $ 185,368 $ 67,997,489
July $ 513,369 $ 66,460,866
August $ 157,817 $ 65,102,085
September $ 143,581 $ 63,897,098
Average $ 235,667 $ 68,804,839
99%
101%
100%
98%
101%
99%
99%
99%
100%
99%
100%
100%
100%
Consolidated Invested Percentage
FY2015 Cash Balance Invested
October $ (198,600) $ 63,731,625 100%
November $ 115,485 $ 69,380,120 100%
December $ 220,499 $ 67,322,792 100%
January $ 1,721,410 $ 69,319,182 98%
February $ (226,564) $ 71,613,082 100%
March $ (162,296) $ 61,450,653 100%
April $ (401,266) $ 61,112,712 101%
May $ 131,804 $ 62,873,859 100%
June $ 209,414 $ 63,389,851 100%
July $ 291,362 $ 62,990,544 100%
August $ 342,308 $ 62,744,536
September $ 269,578 $ 71,189,589
Average $ 192,761 $ 65,593,212
99%
100%
100%
This graph shows how a greater portion of the City's funds continue to be invested, always in
pursuit of 100%.
Percent Invested
105.00%
100.00%
95.00%
90.00%
85.00%
I
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Fiscal Year
9
Cash management performance - effectiveness of the cash management program has
been measured utilizing actual figures for FY2015 as shown below:
Average City's Number Estimated
90 -day Invested Days in Interest
Month T-bill Yield Balance Month Earnings
October 0.01`)/0 $ 63,731,625 31 $541
November 0.02% $ 69,380,120 30 $1,140
December 0.04% $ 67,322,792 31 $2,287
January 0.02% $ 69,319,182 31 $1,177
February 0.02% $ 71,613,082 28 $1,099
March 0.03% $ 61,450,653 31 $1,566
April 0.01% $ 61,112,712 30 $502
May 0.01% $ 62,873,859 31 $534
June 0.01% $ 63,389,851 30 $521
July 0.08% $ 62,990,544 31 $4,280
August 0.08% $ 62,744,536 31 $4,263
September -0.01% $ 71,189,589 30 ($585)
Average 0.03% $ 65,593,212 $1,444
Estimated earnings at benchmark yields: $17,326
Actual FY2015 interest income (un -audited) $167,649
Earnings over benchmark: $150,323
Key rate comparisons - an objective of the investment policy is for the City's average rate
of return to consistently exceed that of the three-month U.S. Treasury Bill, as stated
before. Therefore, returns for both have been presented for comparative purposes below.
Benchmark
90 -day City's Avg.
Month T-bill yield Portfolio Yld Difference
October 0.01% 0.16% 0.15%
November 0.02% 0.15% 0.13%
December 0.04% 0.19% 0.15%
January 0.02% 0.21% 0.19%
February 0.02% 0.21% 0.19%
March 0.03% 0.28% 0.25%
April 0.01% 0.30% 0.29%
May 0.01% 0.33% 0.32%
June 0.01% 0.35% 0.34%
July 0.08% 0.35% 0.27%
August 0.08% 0.37% 0.29%
September -0.01% 0.35% 0.36%
Average 0.03% 0.27% 0.24%
During FY2015, the Federal Reserve left rates unchanged. The Federal Open Market
Committee has kept the target fed funds rate between 0.00% and 0.25% throughout the
year and currently anticipates economic conditions are likely to warrant exceptionally low
levels for the fed funds rate at least through mid -2016. The average yield on the City's
portfolio has increased slightly from month-to-month throughout the year. Therefore, the
City's portfolio continues to surpass the benchmark 90 -day T-bill rate by an average of 24
basis points for the year.
10
Interest Income Summary'
III. INTEREST INCOME SUMMARY
FY11 Audit
FY12 Audit
FY13 Audit
FY14 Audit
FY15 Unaudited
FY15 Budgeted
$235,087
$193,366
$146,562
$104,437
$167,649
$91,233
Interest Earnings
$250,000
$200,000
$150,000
$100,000
$50,000
so
6
FY11 Audit FY12 Audit FY13 Audit FY14 Audit
FY15 FY15 Budgeted
Unaudited
Interest income exceeded the budgeted level for fiscal year 2015. When compared to prior year,
interest earnings have increased. This increase can be attributed to the reinvestment of
proceeds from maturing securities into slightly higher yield investments.
11
Interest Income By Fund
For Fiscal Year Ending September 2015
# Fund FY 14 FY 14 Actual FY 15 FY 15 Actual Diff FY15
Budget Audited Budget (Unaudited) Bud. -Act.
101
General
$61,725
$26,601
$30,000
$55,022
$25,022
201
Hotel/Motel
120
41
50
105
$55
202
Juvenile Case Fund
0
27
30
91
$61
210
Half Cent Sales Tax -Operations
1,300
2,021
800
3,441
$2,641
211
Half Cent Sales Tax -Reserve
6,500
9,219
9,220
10,125
$905
220
Crime Control Prevention District
160
110
100
245
$145
221
Police Seized Asset Funds
0
338
0
509
$509
230
Euless DEA Fund
500
0
500
55
($445)
231
Police DEA State Awards
500
32
500
63
($437)
240
Car Rental
21,935
8,577
15,000
25,747
$10,747
245
Glade Parks PID
0
0
0
5
$5
250
Glade Parks TIRZ
0
0
0
3
$3
260
Cable PEG Fund
0
0
0
183
$183
301
Developer's Escrow
1,000
3,137
0
3,763
$3,763
305
Streets CIP
0
2,229
0
872
$872
310
Half Cent Sales Tax - CIP
2,500
1,987
0
573
$573
320
G.O. CIP
2,500
242
0
560
$560
321
Redevelopment CIP Fund
345
36
122
163
$41
325
Police Facility CIP
167
26
11
2
($9)
330
Car Rental CIP
0
2,740
0
2,898
$2,898
401
GO Debt Service
1,000
406
500
680
$180
402
Star Centre Debt
350
110
300
136
($164)
403
Glade Parks Debt Service
0
0
0
37
$37
410
EDC Debt Service
0
0
0
167
$167
501
Water and Wastewater
30,000
11,095
12,000
22,185
$10,185
502
Water and Wastewater CIP
7,000
8,126
0
2,126
$2,126
503
Water and Wastewater Reserve
0
108
0
204
$204
504
Service Center Fund
0
0
0
0
$0
505
Water Impact Fees
5,000
4,257
0
3,489
$3,489
508
Wastewater Impact Fees
1,000
165
0
265
$265
509
W/WW Rate Stabilization
5,000
4,701
5,000
5,223
$223
510
Drainage
500
92
120
111
($9)
511
Drainage CIP
0
2,737
0
1,057
$1,057
520
Recreation Classes
500
108
200
162
($38)
521
Arbor Daze
0
4
10
0
($10)
530
Softball World
0
0
0
0
$0
531
Softball World Debt
0
0
0
0
$0
532
TSSC Reserve
1,000
314
400
2,244
$1,844
540
Golf Course
190
3
0
2
$2
541
Golf Course Debt
0
12
20
14
($6)
542
Golf Course Reserve
1,200
1,997
950
2,614
$1,664
543
TSGC CIP Fund
0
0
0
28
$28
550
Parks At Texas Star
200
95
200
197
($3)
552
Athletic Complex - CIP
500
249
0
360
$360
601
Equipment Replacement
3,000
3,369
3,000
4,792
$1,792
610
Health Insurance
10,000
6,819
10,000
12,768
$2,768
615
Risk Mgmt/Worker's Comp
1,200
2,306
2,200
4,364
$2,164
Total
$166,892
$104,437
$91,233
$167,650
$76,417
Note that interest earnings are being earned on all investable City funds and great efforts are pursued to meet budgeted
levels. This report points out that the un -audited interest earnings for the end of the fiscal year has exceeded the
budgeted expectations due to slightly higher reinvestment rates.
Several funds were budgeted conservatively or not at all due to the volatility of revenues and expenditures. However,
these funds are used for investment purposes when available. These funds include Capital Improvement Projects, DEA
Funds, Grant Funds, and Debt Service Funds.
IV. COLLATERAL REVIEW
The first and most important objective of investing public funds is safety. One way to insure the City's assets is to have
them fully secured with "collateral." Acceptable collateral is defined in the City's investment policy, but generally
consists of types of securities in which the City would invest. Bank balances are monitored daily to assure full
coverage. The amount of collateral required by the depository bank varies with the expected level of deposits (typically
correlates with large receipts such as property taxes, franchise taxes and investment maturities).
City of Euless
Collateral Analysis for
Cash & C.D. Investments
as of 09/30/15
Pledging Safekeeping Pledged Sec. Security Market Value Inv. Value Difference
Institution Location Description Par Value (w/FDIC Ins.) @ Mat'y (P & I) Over/(Under)
Frost Bank Federal Reserve $1,198,662 $1,495,165 $409,082 $1,086,084
Bank FHLMC Payroll $19,813
4/1/2018 $1,198,662 Operating $292,170
Insurance $97,098
Produced By:
Director of Finance
Reviewed by:
Assistant Director of Finance
This review is practiced on a regular basis assuring coverage. Another regular practice is reviewing each individual
instrument purchased. This assures compliance with the investment policy and consideration of the underlying
security. This separate but thorough practice has protected the City's portfolio against derivative products.
13
V. BROKER SELECTION PROCESS
This section of the report is to provide a brief explanation of the process undertaken to
select brokers with which the City invests. The broker/dealer list is reviewed annually,
and additions/deletions are made as necessary. The City currently maintains a list of
seven broker/dealers. The process is outlined below:
1. Brokers express an interest in doing business with the City's investment portfolio.
2. A questionnaire is sent to the broker which requests the necessary information for
management to review including references, capital adequacy ratios, etc.
3. The Finance Department reviews all received questionnaires, summarizes the
information and recommends the desired list of brokers with explanatory notes in
conjunction with the first quarter investment report.
4. The list is presented to the investment committee annually for their approval.
5. All brokers are notified after the selection is complete.
VI. SUMMARY
The primary objectives of compliance, safety, liquidity and yield have been achieved for
the reporting period as evidenced by this report. These objectives will continue to be
pursued for the City of Euless as provided by the investment policy. This year proved to
be another successful year for the investment program. The City of Euless, like all other
local governments, is faced with the challenge of meeting benchmark levels triggered by
the Fed's actions and meeting additional reporting requirements as stated by new
legislation. Therefore, the City's investment program will continue to seek new
techniques, instruments, etc. to enhance the return on the City's funds, as well as the
return of all City funds.
The investment committee will meet on January 12, 2016 to discuss the Annual
Investment Report. Once the annual report is approved by the committee, it will be
forwarded to the City Council.
Janina Jewell Jackie Theriot
Director of Finance Assistant Director of Finance
14
CERTIFICATION
This report has been examined and approved by the Investment Officers of the City of Euless.
Information presented in this report to the Investment Committee and City Council represents
an accurate description of the City's investment activity for the fiscal year ending September
30, 2015. This report meets all requirements specified by the Public Funds Investment Act
and the Policy of the City of Euless.
Investment Officers
i
Janina Jewell
Director of Finance
4t6124J L1/22A
Jackie Theriot
Assistant Director of Finance
Diana L Ayala
Budget and Treasury Manager
15
Minutes —1/13/2015 Investment Committee Meeting
Members: Linda Martin, Mayor
Gary McKamie, City Manager
Loretta Getchell, Deputy City Manager
Janina Jewell, Director of Finance
Committee members presented included Mayor Martin, Gary McKamie, Loretta Getchell, and Janina
Jewell. Non -committee present included Chris Barker, Assistant City Manager.
Jewell presented the committee with Quarterly Investment Reports for FY2014 as well as a
supplemental summary packet of the annual review. She stated that per the Investment Policy a
strategy had been defined for each fund. Generally that operating funds are invested in short-term
securities with a weighted average maturity, or WAM, between 6 to 9 months. Capital Improvement
Project funds are invested in accordance with drawdown schedules. Debt Service funds are invested
according to the required debt service payment dates and Reserve and Contingency funds are invested
in securities with a final maturity date no greater than five years.
Jewell then reviewed the City's portfolio market values for the last two fiscal years where as of
September 30, 2014 the total was $64,094,617 compared to the end of June 2014's $66,789,560. She
then presented the invested portion of the portfolio for the last two years based on type of investment.
The City's September 30, 2014 investments were very liquid with 44%, or over $28M, of the portfolio
invested in local government pools. The remaining 56% or $35.69M was invested in government
agencies. The 44% of pooled funds was broken down into 23% being in TexStar and 21% in TexPool.
Jewell showed the percent of invested portfolio by maturity over the last two years. For September 30,
2014, 44% was available overnight, 21% available within 6 months, and 18% available within 1 year. The
remaining 17% has been invested beyond one year to take advantage of higher yields and consists
primarily of emergency, contingency, and reserve funds.
Next, she presented the WAM for the last two fiscal years and noted that the City's investment policy
gives staff a 365 day guideline to follow. As of September 30, 2014 the overall WAM of the portfolio
was 152.76 days, well within the limits of the investment policy.
Jewell next showed graphically that as of September 30th diversification by institution was met and that
although the City's policy is to hold all investments to maturity, if the entire portfolio were to have been
liquidated, we would have had a loss of almost $21K or 0.03% of the invested portfolio. The City strives
to be 100% invested and the average for Fiscal Year 2014 was 100%.
The City's portfolio had significantly outperformed the benchmark rate, the 90 day Treasury Bill (T -Bill),
for each month during Fiscal Year 2014. Overall, the City averaged 0.13% greater than the 90 Day T -Bill.
This equated to about $76,222 over the fiscal year. Jewell also stated that in keeping with the
requirements of the investment policy, every quarter's collateral analysis documented sufficient
collateral to cover all depository accounts.
16
Jewell noted that interest income did not meet the budgeted level for Fiscal Year 2014 and, when
compared to the prior year, interest earnings had decreased. This decrease was attributed to the
reinvestment of proceeds from maturing securities into lower yielding investments.
The committee took more time to review the reports and with a motion by Ms. Getchell and a second by
the Mayor, unanimously accepted all reports and referred to City Council the annual report.
Jewell brought up the discussion that the investment policy requires a significant amount of work for the
Finance Staff that does not seem to be of value to the users and are not required by PFIA. Mr. McKamie
made a motion to request a change from City Council to the policy to removed detailed requirements
and just make a statement to be compliant with PFIA therefore not needing a change every time the
PFIA is changed. Ms. Getchell seconded the motion and the motion was approved unanimously.
Mayor Martin moved for approval of the minutes from January 14, 2014, which was seconded by Ms.
Getchell and approved unanimously.
Ms. Getchell motioned to reaffirm the list of brokers/dealers as all were helpful and compliant over the
last fiscal year. The Mayor seconded the motion and the committee approved unanimously.
The meeting was adjourned.
17
APPENDIX
APPENDIX A
19
City of Euless
Change in Portfolio Values by Asset and investment Fund
For the Quarter Ending September 30, 2015
Inv.
CUSIP
Maturity/
Par
Market Value
Market Value
Change in
Book Value
Book Value
Change in
Type
Number
CaII Date
Value
09/30/2015
06/30/2015
Market Value
09/30/2015
06/30/2015
Book Value
OPERATING FUNDS:
FFCB
3I33ED4A7
10/07/2015
1,000,000
1,000,300
1,000,700
(400)
1,000,000
1,000,000
-
FHLB
3130A1UC0
11/23/2015
1,000,000
1,000,260
999,900
360
1,000,000
1,000,000
-
FHLB
3130A2ZY5
10/09/2015
1,000,000
1,000,020
1,000,100
(80)
1,000,000
1,000,000
-
FHLB
3130A2YY6
02/01/2016
1,000,000
1,000,510
1,000,000
510
1,000,000
1,000,000
FFCB
3133EDU83
03/02/2016
1,000,000
1,000,890
1,000,100
790
1,000,000
1,000,000
-
FFCB
3133EDHS4
03128/2016
745,000
745,820
745,224
597
745,447
745,447
-
FFCB
3133EDV66
114/18/2016
1,000,000
1,000,900
999,200
1,700
1,000,000
1,000,000
FFCB
3133EDTM4
02/26/2016
1,000,000
1,000,370
999,500
870
999,550
999,550
FFCB
3133EEDQO
12/01/2016
500,000
500,995
499,500
1,495
500,000
500,000
-
FHLB
3130A3P32
07/01/2016
1,000,000
1,000,980
1,000,100
880
1,000,470
1,000,470
FHLB
3130A31 -1Q0
06/30/2016
1,000,000
1,000,530
1,000,000
530
997,270
997,270
-
FHLB
3130A3M43
12/23/2016
1,000,000
1,000,390
999,100
1,290
997,300
997,300
FHLB
3130A3QU1
12/30/2016
1,000,000
1,001,470
1,001,700
(230)
1,000,000
1,000,000
-
FHLB
3130A3VW1
05/09/2016
500,000
500,400
500,050
350
500,000
500,000
FHLB
3130A45N8
08/09/2016
500,000
500,310
499,850
460
500,000
500,000
-
FFCB
3133EEND8
09/16/2015
1,000,000
1,000,460
1,000,100
360
1,000,000
1,000,000
-
FFCB
3133EESZ4
07/12/2016
500,000
500,350
500,550
(200)
500,000
500,000
-
FFCB
3133EETK6
08/16/2016
500,000
500,445
500,300
145
500,000
500,000
-
FHLB
3130A4GS5
03/23/2017
1,000,000
1,002,660
999,100
3,560
1,000,000
1,000,000
-
FHLB
313382UZ4
11/14/2016
500,000
499,940
499,100
840
498,815
498,815
-
FHLB
3130A4Y63
04/15/2016
500,000
500,125
499,900
225
499,250
499,250
-
FHLB
3130A56G9
02/24/2017
500,000
500,225
500,200
25
500,000
500,000
-
FHLB
3130A5CHO
1 1/30/2016
500,000
500,265
499,300
965
500,000
500,000
-
FHLB
3130A4F72
02/24/2014
750,000
751,245
748,350
2,895
750,795
750,795
-
FHLB
3130A52C2
05/12/2017
1,000,000
1,000,100
997,900
2,200
1,000,000
1,000,000
-
FHLMC
3134G6W66
06/1612017
1,000,000
1,003,100
1,000,200
2,900
1,000,250
1,000,250
-
Purchases
FHLB
3130A5AU3
04/29/2016
500,000
499,990
-
499,990
500,000
-
500,000
FHLB
3130A5D97
05/11/2016
500,000
499,710
-
499,710
499,745
499,745
FAMCA
31315PA25
07/27/2016
500,000
506,430
506,430
506,558
-
506,558
FHLB
3130A5ZX0
07/22/2016
500,000
500,075
-
500,075
500,000
-
500,000
FHLB
3130A4ZF2
04/20/2017
500,000
500,380
-
500,380
499,355
-
499,355
FFCB
3133EE6A3
02/06/2017
1,000,000
1,001,820
-
1,001,820
1,000,000
-
1,000,000
FHLB
3133XTEE2
03/24/2016
1,000,000
1,016,330
1,016,330
1,015,789
-
1,015,789
FFCB
3133EFBT3
09/01/2016
1,000,000
1,000,250
1,000,250
1,000,000
-
1,000,000
Maturities
FHLB
3130AOQG8
07/29/2015
1,000,000
-
1,000,200
(1,000,200)
1,000,374
(1,000,374)
FHLB
3130A1UD8
08/05/2015
1,000,000
-
1,000,000
(1,000,000)
999,550
(999,550)
FHLMC
3134G6AA1
01/30)2017
1,000,000
-
999,700
(999,700)
-
1,000,000
(1,000,000)
FHLMC
3134G5YD1
111/27/2017
1,000,000
-
1,000,400
(1,000,400)
1,000,000
(1,000,000)
FFCB
3133EDEK4
09/10/2015
500,000
-
500,150
(500,150)
-
500,000
(500,000)
FHLB
3130A4JN3
-
1,001,400
(1,001,400)
-
1,000,000
(1,000,000)
Par total does not
Total Operating
!include maturities
$ 26,495,000
$ 26,538,045
$ 26,491,874
$ 46,172
$ 26,510,594
$ 26,489,071
$ 21,523
19
APPENDIX A
City of Euless
Change in Portfolio Values by Asset and Investment Fund
For the Quarter Ending September 30, 2015
Inv. CUSIP
Maturity/
Par
Market Value
Market Value
Change in
Book Value
Book Value
Change in
Type Number
Call Date
Value
09/30/2015
06/30/2015
Market Value
09/30/2015
06/30/2015
Book Value
CIP FUNDS:
FHLB 3130A4FR8
03/02/2017
500,000
501,435
500,550
885
499,340
499,340
-
FFCB 31331YP95
10/16/2016
150,000
156,371
157,245
(874)
156,035
157,544
(1,509)
FHLMC 3134G6E82
05/26/2017
500,000
500,510
500,000
510
500,000
500,000
-
FHLB 3130A3NM2
12/30/2016
1,000,000
1,000,920
1,001,300
(380)
1,001,425
1,001,710
(285)
Purchases
None
-
-
-
-
-
Maturities
None
-
-
-
-
Par total does not
Total CIP:
include maturities
$ 2,150,000
$ 2,159,236
$ 2,159,095
$ 141
$ 2,156,800
$ 2,158,594
$ (1,794)
RESERVL FUNDS:
FNMA 3136G1ZD4
09/28/2017
900,000
903,555
898,110
5,445
900,000
900,000
-
FFCB 3133EDM82
11/27/2015
1,000,000
1,000,010
999,200
810
998,800
998,800
-
FHLMC 3134G5RS6
11/28/2016
500,000
500,940
500,350
590
501,195
501,195
-
FFCB 31331JX32
10/28/2016
500,000
507,245
507,100
145
506,485
507,981
(1,496)
FHLB 3130A4MS8
06/30/2017
1,000,000
1,003,200
1,000,800
2,400
1,000,000
1,000,000
-
FHLMC 3134G6UC5
04/28/2017
500,000
500,810
499,450
1,360
500,000
500,000
FNMA 3136FPJQ1
09/21/2016
117,000
118,931
119,387
(456)
118,839
119,340
(501)
FFCB 31331J2M4
11/22/2016
200,000
203,174
203,620
(446)
203,069
203,778
(708)
FFCB 3133EEG53
08/04/2017
500,000
500,320
499,650
670
498,500
498,500
-
FHLMC 3134G6G49
05/08/2017
1,000,000
1,001,690
999,600
2,090
1,000,640
1,000,640
-
FHLB 3130A5C98
08/21/2017
500,000
500,375
499,500
875
500,000
500,000
-
Purchases
FHLB 3130A5VE6
10/13/2017
500,000
501,245
-
501,245
500,000
500,000
FFCB 3133EE5T3
08/03/2017
500,000
500,650
500,650
500,000
-
500,000
Maturities
FHLMC 3130A4UY6
07/28/2015
500,000
-
499,550
(499,550)
-
500,000
(500,000)
FHLMC 3134G6W58
09/18/2015
1,000,000
-
999.700
(999,700)
-
1,000,000
(1,000,000)
Par total does not
Total Reserve:
include maturities
$ 7,717,000
$ 7,742,145
$ 8,226,017
$ (483,872)
$ 7,727,528
$ 8,230,234
$ (502,706)
OV ERN 'GI IT1NVEST%'IENI'Ss
Beginning Bal
Ending Bal
Texpool Balance
13,764,817
12,583,221
12,583,220
13,764,816
(1,181,596)
12,583,220
13,764,816
(1,181,596)
Purchases
3,426,126
-
-
Maturities
4,607,723
-
'Fcxstar Balance
12,728,275
14,080,967
14,080,968
12,728,276
1,352,692
14,080,968
12,728,276
1,352,692
Purchases
8,602,692
-
-
Maturities
7,250,000
-
-
B of T Escrot Balance
-
8,102,131
8,102,131
8,102,131
8,102,131
8,102,131
Purchases
8,102,131
Maturities
-
13 ofT Balance
6,803
6,803
6,803
6,803
-
6,803
6,803
-
Purchases
0 '
Maturities
-
Total Overnight:
$ 34.773.123
$ 34,773,123
$ 26,499,895
$ 8,273,227
$ 34,773,123
$ 26,499,895
$ 8,273,227
20
APPENDIX A
21
City of Euless
Change in Portfolio Values by Asset and Investment Fund
For the Quarter Ending September 30, 2015
Inv.
Type
CUSIP
Number
Maturity/
Call Date
Par
Value
Market Value Market Value Change in
09/30/2015 06/30/2015 Market Value
Book Value
09/30/2015
Book Value
06/30/2015
Change in
Book Value
Total Portfolio
Par total does not
include maturities
$ 71.135.123
$ 71,212,549 $ 63,376,881 $ 7,835,668
$ 71,168,045
$ 63,377,794
$ 7,790,250
21
APPENDIX B
City of Euless
Schedule of Purchases
FY2015 4th Quarter
Cost Accrued
Inv CUSIP Purchase Maturity Call Term Price Par Book Value Coupon Interest Seller Total Cost
Type Number Date Date Date (in days) Per $100 Value (Erin. Only) YTM Rate Purchased Inst. Discount Premium Fund of investment
Texpool July $ 841,250 $ 841,250 Various $ 841,250
Texpool August 1,150,000 1,150,000 Various 1,150,000
Texpool September 1,432,500 1,432,500 Various 1,432,500
Texstar July 1,750,000 1,750,000 Various 1,750,000
Texstar August 3,250,000 3,250,000 Various 3,250,000
Texstar* September 3,600,000 3,600,000 Various 3,600,000
B of T Escrow BOT S/T Cash Fund 8,102,027 8,102,027 B of T - 502 8,102,027
FHLB 3130A5VE6 07/08/15 10/13/17 10/13/16 815 100 0000 500,000 500,000 0.90% 0 900% $ - FSW - 532 500,000
FHLB 3130A5AU3 07/10/15 04/29/16 N/C 289 100.0000 500,000 500,000 0 25% 0.250% $ 239 58 Mutual 101 500,240
FHLB 3130A5D97 07/10/15 05/11/16 N/C 301 99 9830 500,000 499,915 0 27% 0 250% $ 416 67 Mutual (85 00) 101 500,332
FAMCA 31315PA25 07/10/15 07/27/16 N/C 377 101.7230 500,000 508,615 0 35% 2 000% $ 4,527 78 Mutual 8,615 00 240 513,143
FHLB 3130A5ZX0 07/27/15 07/22/16 N/C 355 100 0000 500,000 500,000 0 38% 0 375% $ 26 04 FSW - 101 500,026
FHLB 3130A4ZF2 07/29/15 04/20/17 06/16/16 621 99 9570 500,000 499,785 0 65% 0 625% $ 859.38 Duncan (215 00) - 501 500,644
FFCB 3133EE5T3 08/03/15 08/03/17 N/C 720 100 0000 500,000 500,000 0 75% 0.750% $ - Samco - 102 500,000
FFCB 3133EE6A3 08/06/15 02/06/17 N/C 540 100.0000 1,000,000 1,000,000 0 59% 0.590% $ Coastal 601 1,000,000
FHLB 3133XTEE2 08/27/15 03/24/16 N/C 207 101 8420 1,000,000 1,018,420 0 30% 3 510% $ 14,917.50 Samco - 18,420.00 240 1,033,338
FFCB 3133EFBT3 09/01/15 09/01/16 N/C 360 100 0000 1,000,000 1,000,000 0 42% 0 420% $ - Coastal - - 1,000,000
Totals $ 26,625,777 $ 26,652,512 0.44% $ 20,987 $ (300) $ 27,035 $ 26,673,499
B of T Escrow Dividends Reinvested 104 104 B of T - - 502 104
Texpool Dividends Reinvested
July 712 712 - Texpool - Various 712
August 802 802 - Texpool - - Various 802
September 862 862 Texpool - Various 862
Texstar Dividends Reinvested
July 765 765 Texstar Various 765
August 897 897 - Texstar - Various 897
September 1,030 1,030 - Texstar - - Various 1,030
B of T EDC Reserve Dividends Reinvested B of T 211 -
Totals including Dividends $ 26,630,950 $ 26,657,685 $ 20,987 $ (300) $ 27,035 $ 26,678,672
* excludes transfers
22
APPENDIX C
City of Euless
Schedule of Maturities
FY2015 4th Quarter
Term to Cost Accrued
Inv. CUSIP Purchase Maturity Call Mary Price Par Book Value Yield To Coupon Interest Seller Total Cost
Type Number Date Date Date (in days) Per $100 Value (Priv Ono) Maturity Rate Purchased Inst Discount Premium Fund of Investment
Texpool July - Various 5 841,445
$ 841,445 $ 841,445
Texpool August - - Various 5 2,366,278
2,366,278 2,366,278
Texpool September 1,400,000 1,400,000 - - Various 5 1,400,000
Texstar July 1,650,000 1,650,000 - - - Various 5 1,650,000
Texstar August 3,800,000 3,800,000 - Various $ 3,800,000
Texstar* September 1,800,000 1,800,000 - Various $ 1,800,000
B of T Escrow BOT S/T Cash Fund 0 0 - - 502 5 -
FHLB 3130A0QG8 01/29/14 07/29/15 N/C 540 100 0374 1,000,000 1,000,374 0 26% 0 280% 0 Coastal - 374 05 101 1,000,374
FHLMC 3134G5YD1 01/27/15 07/27/15 07/27/15 180 100 0000 1,000,000 1,000,000 0 80% 0 800% 0 Duncan - 501 1,000,000
FHLMC 3130A4UY6 04/28/15 07/28/15 Qtr 90 100 0000 500,000 500,000 0 53% 0 530% 0 Duncan - - 102 500,000
FHLMC 3134G6AA1 01/30/15 07/30/15 07/30/15 180 100 0000 1,000,000 1,000,000 0 70% 0 700% 0 Samco - 101 1,000,000
FHLB 3130A1UD8 05/05/14 08/05/15 N/C 450 99 9850 1,000,000 999,850 0 15% 0 140% 0 Samco (150 00) - 601 999,850
FFCB 3133EDEK4 03/12/14 09/10/15 N/C 538 100 0000 500,000 500,000 0 25% 0 250% 7 Duncan - 601 500,007
FHLMC 3134G6W58 06/18/15 09/18/17 09/18/15 810 100 0000 1,000,000 1,000,000 1 00% 1 000% 0 Samco - 240R 1,000,000
FHLB 3130A4JN3 03/30/15 09/30/17 09/30/15 180 100 0000 1,000,000 1,000,000 0.85% 0 850% 0 Duncan - 610 1,000,000
TOTAL $ 18,857,723 $ 18,857,947 0 57%
excludes transfers
23
6.94
(150.00) 374.05 $ 18,857,954
APPENDIX D
City of Euless
Investment Portfolio General Information
Investment Types and Institutions
Investment Types
LOGIC Local Gov't Pool
Texstar Local Gov't Pool
Texpool Local Gov't Pool
FGIC Money Mkt Fund
FNMA
FFCB
FHLB
Institution
Fed. Nat'l Mort. Assoc.
Fed. Farm Credit Bank
Fed. Home Loan Bank
FHLMC Fed. Home Loan Mort. Corp
CD Certificates of Deposit
TBILL Treasury Bill
LOGIC Local Gov't Invest. Coop.
Texstar TexSTAR
Texpool TEXPOOL
FGIC Federated Investors Trust
Vining
Coastal
Samco
Mutual
Vining Sparks
Coastal Securities
Samco Capital
Mutual Securities
24
FSW First Southwest
Cantor Cantor Fitzgerald
Duncan Duncan Williams