TREASURY OPERATIONS in the City of Los Angeles

Transcription

1 TREASURY OPERATIONS in the City of Los Angeles Presented by: Vicky A. Santiago 10/18/2006

2 200 N. Spring Street, City Hall 201 Los Angeles, CA Phone: (213) Fax: (213) Website:

3 Primary Responsibilities of the Treasurer Manages receipt & disbursement of City funds ($50 billion combined cash flow) Manages the investment of the City s Core and Reserve portfolio ($6.5 billion) Manages issuance of debts (bonds) and ensures timely payments to bondholders Maintains proper City treasury accounting records and implements internal control.

4 Treasury Administration Staff: Assistant Treasurer - Vacant Executive Administrative Assistant - Anne Beckman

5 Treasury has 4 Divisions Cash Management Division Crista Binder, Director Investments Division Hank Stern, Chief Investments Officer Accounting Division Vicky Santiago, Dept. Chief Accountant Debt Management Division Arlitha Harmon, Financial Manager

6 CASH MANAGEMENT DIVISION

7 The Office of the Treasurer, through its Cash Management Division, establishes Citywide banking policies Handles fee negotiations and new services Is the central point of contact with all of the City s financial institutions. It handles (annually) over: 122,000 bank deposits 3,700 wires and ACH transfers

8 Electronic Fund Transfer and Payments thru ACH Request Procedures (covered by the Treasurer s Memo dated May 20, 2005 to all DCAs) Incoming Wire Transfers: SUMMARY 1) Funds in excess of $5M-notify Treasurer 2 days prior to receipt 2) Submit notification in writing, attach Wire-In Notification Form 3) Ensure information is complete so Treasurer can identify and verify receipt of funds to the respective Department.

9

10 Outgoing Wire Transfers: 1) Notify Treasurer in advance as follows: 2 Days : <$10M 3 Days : $10M-20M 5 Days : >$20M 2) Warrants must be payable to the City Treasurer. 3) Make sure information in both wire transfer request and warrant are matching. 4) Wrong information may result in the delay of processing the wire transfer requests. If so, late fees and penalties will be borne by the requesting Department.

11

12 ACH Payments: 1) Request in writing indicating the purpose of the payment (tax payments, direct deposits, etc). 2) Submit the request for payment to the Treasurer 3 days prior to settlement date. Documentation Requirements: 1) must be signed by an authorized representative whose signature is on file with the Treasurer. 2) Original documents, including original signatures, must be submitted for outgoing wire transfers and ACH payments. 3) No white outs or correction tapes over information will be accepted. Instead, cross out and initial by authorized representative. 4) Attach all supporting documents.

13 Coming Soon: Cash Management Division will be implementing the TWS (Treasury Work Station) which will automate the recording of over 500 daily deposits 14 daily wires and ACH transfers $195M cash receipts From over 300 Financial Institutions Wait for an announcement from the Treasury for Training schedules.

14 DIVISION

15

16 The Office of the Treasurer, through its Investments Division, is responsible for the City s Investment program. CITY S INVESTMENT POOL 1. General Pool a. Core b. Reserve 2. Special Pool Ex: Wastewater, MICLA, Harbor

17 GOVERNING BODIES 1. California Government Code Section 53600, et. Seq. 2. City s Statement of Investment Policy REPORTING DISCLOSURE REQUIREMENTS GASB # 3, as amended by GASB # 40 effective fiscal year 2005 and GASB #s 28 and 31. The Treasurer s Office has been in compliance with regulatory bodies, one of the reasons why the City maintained the best S&P and Moody s rating of AAA for credit and S1 for risk (volatility).

18 As of August 2006: Portfolio Market Value Book Value General $5.24B $5.32B Special $1.22B $1.22B Total $6.42B $6.54B Portfolio Funds Amount of Funds at Market Value Effective Yield Average Weighted Maturity Average Credit Rating Core Portfolio $823,302, % 5.0 Days AAA Reserve Portfolio $4,421,908, % 2.6 Years AAA Total Investment Pool $5,245,211, % 2.2 Years AAA

19 Treasury DIVISION

20 The Office of the Treasurer, through its Accounting Division, is responsible for the timely and accurate accounting for: $7B average daily cash balance, including over $195M daily cash receipts and disbursements, investments and debt service payments.

21 Other Accounting Functions: Assists in maintaining an effective internal control systems and procedures to mitigate the occurrence of fraudulent financial activity, both in the Department and those with Citiwide impact. Ex: Quarterly Bank Certifications The Office of the Treasurer requires all City Departments maintaining their own bank accounts to submit a Quarterly Bank Certification, Monthly Bank Reconciliation and Copies of Bank Statements.

22

23 To request for blank Treasury forms (Electronic Transfer Request, Quarterly Bank Certification, ACH Payment Requests, etc.), contact: Kent Case at (213)

24 Assists in drafting potential or amendment of legislation affecting control of City funds for City Council approval. Ex: 1) Abolishment of the City s revolving fund in order to transfer control and accountability of the collection of returned/bad checks to respective Departments (waiting for Council Action. Training will be announced soon after). 2) State Code provides that Cities can invest 25% of its portfolio in commercial papers. Now, City of LA can invest 40% of its portfolio in commercial papers similar to counties and city/county to maximize City investment revenues.

25 Plays a major role in spearheading public comments on proposed GASB Pronouncements (with national impact). Provides timely, accurate and meaningful financial information to support decision making and regulatory reporting for: a. Cash, Investments and Debt Management which forms part of the Treasurer s Monthly Report b. Other regulatory reporting required by the Federal and California governments. Ex: continuing disclosures for financing activities

26 Cash Receipts Departmental CRs those prepared by respective departments entered in the FMIS system by the Treasury Staff. This will change once the TWS (Treasury Workstation) is implemented. CRs will be automated and interfaced with FMIS on higher level of detail. The Departments with lower level details (Work order, contracts, etc.) will be required to prepare a CRC. Treasury will conduct training once TWS is implemented.

27 Presently, Treasury enters all City CRs in FMIS for cash control purposes: Average CRs: 200+ per day No. of Funds: 329 No. of Departments (inc. Proprietaries): 62 Range of CR Line Nos: 1 to 522

28 BREL shows the daily deposits by DEPT# BREL can be accessed through the City s Intranet: Scroll down to your Department No. to see deposits that need to be receipted. Look into Dept. 00 to see if some of the deposits are for your Department. DITs are swept during year end. Depending on the amount of DITs, Treasurer may sweep anytime.

29 Bad Checks/Returned Items Departments can view and monitor their bad checks/returned items (with image) by going to the To get your UserID and password, Crista Binder

30 INTEREST ALLOCATION 1. Interest earnings is accrued daily. 2. Interest is allocated to the various funds in the pool based on each fund s average daily balance. 3. Interest is distributed monthly to the various funds in the pool when cash is received from various City holdings.

31 INVESTMENT EARNINGS Investment Earnings consist of: 1. Interest Earnings 2. Gains/Loss on Sale of Investments 2. Securities Lending Revenues As of August 2006, $36.5M Investment Earnings have been paid to various City Funds of which $6.8M went to the General Fund. For FYE 6/30/2006, Total Investment Earnings paid out were $173M of which $35M went to the General Fund.

32 FUNDS 1. Funds earn interest when authorized by Council at the time the Fund is established. 2. Treasury maintains Fund level subaccounts based on written information provided by the respective Departments.

33 MANAGEMENT Division

34 The Office of the Treasurer, through its Debt Administration Division, is responsible for the City s assessment district financing. The Division works with respective Department s project managers to obtain accurate cash flows so that City bond proceeds maybe properly invested.

35 Bond Maturities and Interest Payments 1. Debt service payments is every 1 st and 15 th of the month. 2. Average Bond Maturity Payments (non- Proprietary) is $4M bi-monthly. 3. Average Interest (Coupon) Payments (non- Proprietary) is $3M bi-monthly. 4. Proprietary Debt Service paid by Wires averages from $2M to $20M bi-monthly per Special Fund.

36 Street Improvement Bonds (SIB) The City issues SIBs based on the Street Improvements Act of 1911 (other Cities are based on SIB Act of 1913/1915). Currently has: 54 Bondholders and 613 Properties Assessed

37 What s in store for the future? 1. Implementation of the Treasury Work Station (TWS) 2. Abolishment of the Revolving Fund for Returned Check Items 3. Implementation of the Treasurer s Strategic Plan which includes among others: a. Completion of the Department s Reorganization b. Comprehensive review of all Treasury Systems including the upgrade/replacement of obsolete Accounting Systems.

38 The End c:\docs\vickysantiago\municipal Finance Training October 18-19,2006