2 nd Quarter Investment Report (For the Quarter Ended March 31, 2018) Fiscal Year City of Richardson, Texas

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1 2 nd Quarter Investment Report (For the Quarter Ended March 31, 2018) Fiscal Year City of Richardson, Texas

2 Investment Report Overview Quarter Ending March 31, 2018 Portfolio Balance The Market Value of the City s Investment Portfolio as of March 31, 2018 was $160,388,204. The City of Richardson maintains portfolios which utilize four specific investment strategy considerations designed to address the unique characteristics of the fund groups represented in the portfolios. (Article XIII of the City s Investment Policy) The four portfolios are Operating, Bond Proceeds and Capital Projects, Deposit and Debt Service. More information on the funds and fund groups in each portfolio can be found on pages 9-10 of this report. Investment and Interest Rate Information The City s yield on the total portfolio was 1.54% as of March 31, 2018, below the benchmark of the 91-day Treasury bill at 1.70% but within the recently hiked Fed Funds rate range of between 1.50% and 1.75%. The Federal Open Market Committee (FOMC), a committee of the Federal Reserve Board, at their meeting on March 21, 2018, decided to raise the target range for the federal fund rate from 1.25% to 1.50% to 1.50% to 1.75%. The FOMC judged that the labor market had continued to strengthen and that economic activity had been rising at a moderate rate. With respect to the economic outlook and its implications for monetary policy, members continued to expect that, with gradual adjustments in the stance of monetary policy, economic activity would expand at a moderate pace and labor market conditions would remain strong. Investment Type Yield Total Portfolio 1.54% Securities and Certificates of Deposit 1.58% Money Market Mutual Funds and Local Investment Pools 1.43% Reference: Benchmark 91-day Treasury Bill 1.70% The City has focused on preserving the safety of the investment portfolio while trying to keep a balance between maintaining adequate liquidity for ongoing operations and the ability to earn interest. The City continues to invest in U.S. Agency Securities, U.S Treasury Notes, Certificates of Deposit, money market funds and local government investment pools which invest only in U.S. Treasuries and Agencies. The City requires that bank deposits are fully collateralized with Obligations, including letters of credit, of the United States or its agencies and instrumentalities. The portfolio contains a mix of 1

3 investments in money market funds and local government investment pools for funds that will be used in the short term, and direct investments in Treasury and Agency Securities or Certificates of Deposit for funds that will be used in the future. Earnings Total interest on the City s investments for the quarter was $571,328. The interest by Portfolio is listed in the chart below. Portfolio Interest 1st Quarter Interest 2nd Quarter Interest 3rd Quarter Interest 4th Quarter Interest YTD Operating $149,149 $303,951 $453,100 Bond Proceeds & Capital Proj. 165, , ,166 Debt Service 22,161 56,959 79,120 Deposit 8,173 22,989 31,162 Total $345,220 $571,328 $916,548 Additional information on interest earned can be found on pages 9-10 of this report. Rising Interest Rate Environment When the Federal Fund rate increases it eventually drives higher yields for the city. However, in this type of environment, the city s portfolio as well as local government investment pool yields will typically lag new money rates. These yields will increase as lower yielding investments mature and newer investments are purchased with higher rates. Abbreviations Throughout this report, the following common abbreviations are used for securities which are held in the City s Portfolio. FNMA FFCB FHLB FHLMC CD T-Note Abbreviation Official Name Federal National Mortgage Association Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mortgage Corporation Certificate of Deposit U. S. Treasury Note 2

4 Lone Star $4,870,117 Cash in Bank (1) $(1,640,090) Legacy Money Market $4,001,189 TexStar $21,010,712 PORTFOLIO BALANCE AS OF MARCH 31, 2018 $160,388,204 CD $3,945,000 FHLMC $3,996,795 FHLB $15,979,069 FFCB $7,998,996 FNMA $7,996,482 TexasDaily $12,966,788 Federated - Agency $496,243 TexPool $19,586,669 Invesco - Agency $418,342 T Note $58,761,892 (1) Actual cash balances in Legacy and Frost on March 31, 2018 were $909,334. Due to outstanding checks that had been written the cash book balance is negative. The City funds these checks when they are presented for payment to the bank. 3

5 City of Richardson, Texas Investment Report Investment Officers Signature Page Quarter Ending March 31, 2018 This report is in compliance with the investment strategy as established in the City s Investment Policy and the Public Funds Investment Act, Chapter 2256, Texas Government Code. Prepared on: April 28, 2018 Kent Pfeil Chief Financial Officer Keith Dagen Director of Finance Cara Copley Treasurer and Revenue Manager Vicki McCarthy Controller Michael Spanos Treasury Accountant 4

6 250 Investment Portfolio Balance Fiscal Year $ Millions Weighted Average Maturity Total Portfolio Fiscal Year Number of Days

7 Percentage 1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Comparison of the City's Yield to the 91-day Treasury Bill Rate Fiscal Year Day Treasury Bill Rate City's Yield 6

8 City of Richardson Investment Report Schedule of Investments by Source of Funds March 31, 2018 Securities & CD's Source of Purchase Maturity # of Market Book Purchased Funds Date Date Days Value Value Yield Callable From Operating Agency Bond FFCB 01/30/17 04/04/ ,999,880 3,996, % N/A Coastal Bonds & Cap Proj. Agency Bond FFCB 06/21/17 04/18/ ,999,116 3,999, % N/A FTN Operating CD CD 06/16/17 04/30/ ,945,000 3,945, % N/A Texas Term Bonds & Cap Proj. Agency Bond FNMA 06/22/17 05/21/ ,998,109 3,998, % N/A Hilltop Operating US Treas Note T-Note 11/22/17 05/31/ ,996,558 3,996, % N/A Hilltop Operating Agency Bond FHLB 02/01/17 06/08/ ,996,040 3,999, % N/A Hilltop Operating Agency Bond FHLB 02/08/17 06/08/ ,996,040 3,999, % N/A Coastal Bonds & Cap Proj. Agency Bond FHLB 08/11/17 06/29/ ,996,577 3,996, % N/A Samco Bonds & Cap Proj. Agency Bond FNMA 08/10/17 07/20/ ,998,373 3,998, % N/A FTN Operating US Treas Note T-Note 01/10/18 07/31/ ,989,080 3,989, % N/A Samco Bonds & Cap Proj. Agency Bond FHLMC 09/08/17 08/15/ ,997,328 2,997, % N/A Samco Bonds & Cap Proj. Agency Bond FHLMC 09/08/17 08/24/ , , % N/A Samco Operating US Treas Note T-Note 01/10/18 08/31/ ,997,071 3,997, % N/A Hilltop Bonds & Cap Proj. US Treas Note T-Note 11/22/17 09/30/ ,983,577 3,983, % N/A Raymond James Operating Agency Bond FHLB 01/11/18 10/02/ ,990,412 3,990, % N/A Raymond James Operating US Treas Note T-Note 01/09/18 10/31/ ,988,490 3,988, % N/A Raymond James Bonds & Cap Proj. US Treas Note T-Note 01/09/18 10/31/ ,988,714 3,988, % N/A FTN Operating US Treas Note T-Note 01/26/18 11/30/ ,984,889 3,984, % N/A Hilltop Bonds & Cap Proj. US Treas Note T-Note 01/09/18 11/30/ ,986,206 3,986, % N/A FTN Operating US Treas Note T-Note 02/14/18 12/31/ ,986,951 3,986, % N/A Hilltop Operating US Treas Note T-Note 02/15/18 12/31/ ,986,025 3,986, % N/A FTN Operating US Treas Note T-Note 02/14/18 01/31/ ,972,623 3,972, % N/A Hilltop Bonds & Cap Proj. US Treas Note T-Note 02/16/18 01/31/ ,982,808 3,982, % N/A Samco Bonds & Cap Proj. US Treas Note T-Note 02/16/18 02/28/ ,977,800 3,977, % N/A Samco Operating US Treas Note T-Note 02/15/18 02/28/ ,972,960 3,973, % N/A FTN Deposit US Treas Note T-Note 03/01/18 03/15/ ,968,140 2,966, % N/A FTN Total $ 98,678,234 $ 98,679,073 Money Market Funds, State Pools and Uninvested Balances Source of Funds Type Market Value Purchased From Operating State Pool $ 14,757,614 TexPool State Pool 274,167 TexPool Debt Service State Pool 4,554,888 TexPool Operating State Pool 11,817,940 TexStar State Pool 6,451,987 TexStar Debt Service State Pool 29,599 TexStar Deposit State Pool 2,711,186 TexStar Operating State Pool 6,020,032 Texas Daily State Pool 541,141 Texas Daily Debt Service State Pool 5,556,012 Texas Daily Deposit State Pool 849,603 Texas Daily Operating State Pool 4,790,160 Lone Star State Pool 9,257 Lone Star Debt Service State Pool 70,700 Lone Star Money Market 496,243 Federated - Agency Money Market 418,342 Invesco - Agency Operating Money Market 4,001,189 Legacy Bank Operating Cash in Bank 460,056 Legacy Operating Cash in Bank 119,045 Frost Deposit Cash in Bank (2,138,219) Legacy Debt Serrvice Cash in Bank (120,702) Legacy Cash in Bank 39,730 Legacy Total $ 61,709,970 Type Market Value Percentage Securities Agency Bonds $ 35,971, % Treasury Note 58,761, % CD's 3,945, % TexPool 19,586, % TexStar 21,010, % Texas Daily 12,966, % Lone Star 4,870, % Invesco - Agency 418, % Federated - Agency 496, % Legacy Money Market 4,001, % Cash in Bank (1) (1,640,090) -1.0% Total Investments $ 160,388, % (1) Actual total cash balances in Legacy and Frost on March 31, 2018 were $909,334. Due to outstanding checks that had been written the cash book balance is negative. The City funds these checks when they are presented for payment to the bank. 7

9 City of Richardson Investment Report Schedule of Beginning and Ending Market Value and Interest Earned March 31, 2018 Quarter Quarter Interest Interest Portfolio Beginning Ending Income Income Market Value Market Value Quarter YTD Operating Portfolio General Fund $ 26,788,560 $ 46,856,187 $ 156,305 $ 204,717 Special Police Funds 276, , ,594 Municipal Court Building Security Fund 179, , ,064 Technology Fund 134, , Wireless 911 Fund 379, ,221 1,366 2,393 Judicial Efficiency Fund 14,975 15, Traffic Safety Fund 23,286 12, Hotel/ Motel Tax Fund 2,669,226 2,858,015 9,318 16,804 Tax Increment Financing Fund #1 2,901,597 6,892,105 18,234 25,834 Tax Increment Financing Fund #2 45,185 4,426,510 10,291 10,421 Tax Increment Financing Fund #3 51, ,783 1,023 1,155 Franchise PEG Fund 1,112,872 1,121,981 3,720 6,601 Drainage Fee Fund 3,615,894 3,903,595 12,692 22,094 State Grants Fund 22,626 16, Federal Grant Funds 44,763 21, Economic Development 2,104,722 2,143,777 7,123 12,216 Water and Sewer Operating Fund 13,476,655 13,590,049 40,848 74,447 Water and Sewer Rate Stablization Fund 1,830,093 1,747,977 5,983 10,848 Golf Fund 166,178 36, Solid Waste Services Fund 2,256,589 1,842,019 6,990 14,502 Central Services Fund 506, ,694 1,516 1,985 Insurance and Flexible Spending Fund 7,896,469 8,288,683 26,249 44,528 Payroll Liability Fund 1,969,861 2,116, Total Operating Portfolio $ 68,466,798 $ 97,768,057 $ 303,951 $ 453,100 8

10 City of Richardson Investment Report Schedule of Beginning and Ending Market Value and Interest Earned March 31, 2018 Quarter Quarter Interest Interest Portfolio Beginning Ending Income Income Market Value Market Value Quarter YTD Bond Proceeds and Capital Projects Portfolio Capital Projects - Equipment Funds $ 2,486,025 $ 560,349 $ 8,230 $ 16,393 Capital Projects - Major Projects Funds 29,435,972 33,120, , ,975 Water and Sewer - Capital Project Funds 3,258,541 2,600,397 9,775 19,379 Solid Waste - Capital Projects Funds (1) 418,955 (159,523) 1,168 2,429 Non-Bond Capital Projects: Special Projects Fund 11,468,624 7,317,630 33,987 56,456 Eisemann Center Capital Fund 332, ,627 1,068 1,896 Street Rehabilitaion Fund 2,248,390 2,440,338 8,077 14,395 Water Sewer Special Projects Fund 283, , ,737 Solid Waste Special Projects Fund 1,719,514 1,691,043 5,691 9,506 Total Portfolio $ 51,652,394 $ 48,138,942 $ 187,429 $ 353,166 Debt Service Portfolio General Debt Service Fund $ 17,365,162 $ 10,090,496 $ 53,274 $ 71,607 Water and Sewer Debt Service Fund 1,899,106-2,941 6,000 Solid Waste Debt Service Fund 479, ,513 Total Debt Service Portfolio $ 19,744,218 $ 10,090,496 $ 56,959 $ 79,120 Deposit Portfolio Water and Sewer Deposit Fund $ 4,304,789 $ 4,390,709 $ 22,989 $ 31,162 Total Deposit Portfolio $ 4,304,789 $ 4,390,709 $ 22,989 $ 31,162 Total All Portfolios $ 144,168,199 $ 160,388,204 $ 571,328 $ 916,548 (1) Solid waste capital project funds cash and cash equivalent totals are negative due to pre-spending of the 2018 solid waste C.O. C.O. funds for the 2018 issuance will be received on

RICHARDSON INDEPENDENT SCHOOL DISTRICT INVESTMENT OFFICER'S CERTIFICATION STATEMENT INVESTMENT REPORT FOR THE QUARTER ENDED September 30, 2016

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