HomeMy WebLinkAboutFY2019 3rd QTR Investment Report
CITY OF IOWA CITY
QUARTERLY
INVESTMENT REPORT
January 1, 2019
to
March 31, 2019
Finance Department
Prepared by:
Brian Cover
Senior Accountant
OVERVIEW
The City of Iowa City’s investment objectives are safety, liquidity and yield. The
primary objective of the City of Iowa City’s investment activities is the
preservation of capital and the protection of investment principal. The City’s
investment portfolio remains sufficiently liquid to enable the City to meet
operating requirements that cash management procedures anticipate.
Investments purchased by the City of Iowa City for the third quarter of this fiscal
year had an average return of 2.684%. Rates on new investment purchases in
our operating cash portfolio for the third quarter were 110 basis points higher
than investments purchased at this time last year. The increase is due to the
higher interest rates of the new investments.
In investing public funds, the City’s cash management portfolio is designed with
the objective of regularly exceeding the average return on the six month U.S.
Treasury Bill. The Treasury Bill is considered a benchmark for riskless
investment transactions and therefore comprises a minimum standard for the
portfolio’s rate of return. Since the city’s investments are mostly between the six
month and twelve month range, the yield curve for the twelve month U.S.
Treasury Bill has been added to the chart. The rolling average return on the six
month U.S. Treasury Bill for the prior 365 days was 2.325% and the twelve
month return was 2.471%. The investment program seeks to achieve returns
above this threshold, consistent with risk limitations and prudent investment
principles. The rate of return on the City’s entire portfolio for the quarter was
2.377%.
Treasury bills and fed funds are competing investments in the money market.
The federal funds rate is highly influential and often has a direct effect on the
U.S. economy, because it serves as a base for interest rates offered by various
financial and credit institutions to businesses and consumers.
The federal funds rate is the interest rate at which banks lend to each other. In
the March 20th meeting of the Federal Open Market Committee, the decision was
made to maintain the target range for the federal funds rate at 2.50 percent. The
Committee will assess realized and expected economic conditions relative to its
maximum employment objective and its symmetric 2 percent inflation objective.
City of Iowa City
Investments by Fund Type
March 31, 2019
OPERATING
86%
EQUIPMENT
RESERVE
3%
HEALTH INSURANCE
RESERVE
3%
LANDFILL RESERVE
2%
LANDFILL CLOSURE
2%
SEWER
RESERVE
2%
GO BOND PROCEEDS
1%WATER RESERVE
1%
PARKING
OPERATIONS
0%
3/31/19 3/31/18
FUND INVESTMENT INVESTMENT
TYPE AMOUNT AMOUNT
OPERATING 169,644,667$ 179,284,252$
EQUIPMENT RESERVE 6,000,000$ 6,000,000$
HEALTH INSURANCE RESERVE 6,000,000$ 4,000,000$
LANDFILL RESERVE 4,000,000$ 4,000,000$
LANDFILL CLOSURE 4,000,000$ -$
SEWER RESERVE 3,510,000$ 5,125,000$
GO BOND PROCEEDS 2,364,540$ 7,093,624$
WATER RESERVE 2,000,000$ 2,500,000$
PARKING OPERATIONS 602,843$ 602,843$
PARKING RESERVE -$ 2,000,000$
TOTAL 198,122,050$ 210,605,719$
City of Iowa City
Investments by Institution
March 31, 2019
MIDWESTONE BANK
31%
PIPER JAFFRAY & CO
22%
IOWA PUBLIC
AGENCY INVESTMENT
TRUST
18%
GREAT WESTERN
BANK
15%
CEDAR RAPIDS BANK
& TRUST
6%
UICCU
3%
HILLS BANK & TRUST
3%
BANKER'S TRUST
1%US BANK
1%TWO RIVERS BANK
0%
3/31/19 3/31/18
INSTITUTION INVESTMENT INVESTMENT DEPOSITORY
NAME AMOUNT AMOUNT LIMIT
MIDWESTONE BANK 60,731,436$ 74,387,504$ 100,000,000$
PIPER JAFFRAY & CO 43,070,000$ 27,500,000$ N/A
IOWA PUBLIC AGENCY INVESTMENT TRUST 36,695,072$ 50,878,602$ N/A
GREAT WESTERN BANK 29,298,179$ -$ 100,000,000$
CEDAR RAPIDS BANK & TRUST 11,000,000$ 21,000,000$ 50,000,000$
U OF I COMMUNITY CREDIT UNION 6,600,000$ 7,600,000$ 50,000,000$
HILLS BANK & TRUST 6,099,054$ 6,098,562$ 25,000,000$
BANKER'S TRUST 2,025,466$ 636,105$ 20,000,000$
US BANK 2,000,000$ 49,072$ 65,000,000$
TWO RIVERS BANK 602,843$ 12,602,843$ 15,000,000$
CBI BANK & TRUST -$ 6,500,000$ 15,000,000$
FARMERS & MERCHANTS SAVINGS BANK -$ 250,000$ 15,000,000$
NXT BANK -$ 2,000,000$ 10,000,000$
WELLS FARGO SECURITIES -$ 500,000$ N/A
WELLS FARGO BANK -$ 603,030$ 50,000,000$
TOTAL 198,122,050$ 210,605,719$