Alief Independent School District Board Meeting January 23, Annual Investment Review

Transcription

1 Alief Independent School District Board Meeting January 23, 2018 Annual Investment Review

2 Investment Policy Summary Public Funds Investment Act provides the framework for Board policies related to investments CDA(Local) & CDA(Legal) policies in place Policies cover investment objectives, approved types of investments, internal controls, performance standards and reporting CDA (Local) last updated in Oct 2016 Second reading of minor wording changes tonight Prior to handing investments on behalf of the District, a a broker/dealer or qualified representative of a business organization must submit required written documents in accordance with law.

3 Investment Reports Quarterly investment reports are submitted to Board Book value & market value of all investments Investment earnings Summary by investment type Maturity schedule Annual review of internal controls and quarterly investment reports included in the audit performed by our independent auditors

4 Investment Objectives Preservation and safety of principal Low risk investment credit risk/market risk Liquidity Yield Diversity

5 Investment Summary-by Type Book Value 12/31/2017 Frost Bank $ 8,294,591 Texpool 43,585,579 Logic 69,042,604 LoneStar 71,609,714 Certificates of Deposit 600,000 Agency Notes 32,443,318 $ 225,575,806

6 Investment Summary-by Type Agencies 14.4% Cash 3.7% CD's 2.7% Pools 81.6% Pools LoneStar 38.9% Texpool 23.7% Logic 37.4%

7 Investment Summary-by Fund Book Value Book Value 12/31/ /31/2017 General $ 125,741,973 $ 129,774,970 Debt Service 23,804,180 23,446,167 Construction 57,006,498 57,669,983 Food Service 7,021,304 11,100,889 Insurance 9,272,788 3,583,797 $ 222,846,743 $ 225,575,806

8 Investment Pools Investment pools offer a safe, efficient and liquid investment alternative to local governments Economies of scale Professional investment expertise Three pools used are rated AAA by Standard & Poor s Extremely strong capacity to maintain principal stability Limits exposure to credit, market & liquidity risks

9 Investment Pool Rates January December, 2017 (monthly averages) 1.50% 1.40% 1.30% 1.20% 1.10% 1.00% 0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% Dec Nov Oct Sept Aug Jul Jun May Apr Mar Feb Jan Logic Lone Star Texpool

10 Authorized Brokers At least annually the Board shall review and approve a list of qualified brokers that are authorized to engage in investment transactions with the District. Coastal Securities John B. Saragusa II Wells Fargo Susan Ward Cantor Fitzgerald & Co. Gil Ramon Multi-Bank Securities Luigi Mancini Global Financial Services Javier Altimari Ramirez & Co. Tracy Marcus

11 Yield Curve Historical Comparison 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 3 mo 6 mo 1 yr 2 yr 5 yr 10 yr 30 yr 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17

12 AISD Portfolio vs. Benchmarks January December, 2017 (monthly averages) 2.00% 1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 3 Month T-Bill 1 Yr. T-Bill AISD Pools AISD Agencies AISD Total Portfolio 0.60% 0.40% 0.20% 0.00% Apr Mar Feb Jan Jul Jun May Aug Oct Sept Dec Nov

13 Interest Earnings by Fund Compared to Prior Years Earnings for the years ended 12/31/ /31/ /31/ /31/ /31/2017 General $ 173,729 $ 128,396 $ 209,681 $ 607,250 $ 1,217,106 Food Service 10,801 11,745 20,814 44,890 84,797 Debt Service 21,777 17,501 39, , ,895 Capital Projects 16,296 17,361 33, , ,460 Internal Service 5,638 4,799 6,527 28,023 45,780 $ 228,241 $ 179,802 $ 310,050 $ 1,093,964 $ 2,579,038 1 yr Treasury rate average for year 0.12% 0.11% 0.30% 0.60% 1.19%

14 Maturity Schedule - Unreserved Investments Owned at 12/31/17

15 Maturity Schedule Reserved Investments Owned at 12/31/17 Reserved for 2009 & 2010 QSCB Bonds payable in 2024 & 2027

16 Cash Management Goals Ensure proper collateralization of deposits Ensure adequate balances to cover cash disbursement needs Maximize interest earnings Minimize bank charges

17 Investment Strategy The following investment strategy is designed to meet our investment objectives and ensure the safety and liquidity of District funds. Invest the portfolio fully based on projected cash flow forecasts while minimizing bank charges. Stay in short to medium term highly rated liquid investments to avoid market risk and credit risk. Maintain liquidity base invested in pools to provide for short term disbursement needs. Study investment alternatives and monitor market conditions.

18 Approval of Ordinance The Public Funds Investment Act and policy require the Board to adopt an ordinance stating that it has reviewed the investment policy and investment strategies.