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Home My WebLink AboutFY2024 1st Qtr Investment ReportCity of Iowa City Quarterly Investment Report July 1, 2023 to September 30, 2023 Finance Department Prepared by: Emily Droll Senior Accountant-Revenue 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 5.44%. The City purchased four new investments in this quarter. The Federal Funds Rate was up 4.92% at quarter end to 5.33%. 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 4.84% and the twelve-month return was 4.71%. 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 4.04%. Investments for this year are $774,800,001 higher than last year. The increase in investments is due to investing more of the City’s cash on hand as interest rates have increased. 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Pe r c e n t a g e o f r e t u r n City of Iowa City vs. 6 and 12 Month Treasury Bill City of Iowa City 6 Month T-bill 12 Month T-bill Treasury bills and fed funds are competing investments in the money market. The federal funds rate is highly influential and often has a direct effect on the U.S. economy, because it serves as a base for interest rates offered by various financial and credit institutions to businesses and consumers. The Federal Open Market Committee (FOMC) seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy. In addition, the FOMC will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in previously announced plans. The FOMC is strongly committed to returning inflation to its 2 percent objective. 0.0 1.0 2.0 3.0 4.0 5.0 6.0 In t e r e s t R a t e Federal Funds Rate 9/30/23 9/30/22 Investment Investment Depository Institution Name Amount Amount Limit MidwestOne Bank 66,296,860$ 35,520,918$ 150,000,000$ Piper Jaffray & Co.58,963,626$ 51,110,138$ N/A Iowa Public Agency Investment Trust 31,406,500$ 20,273,834$ N/A First Interstate Bank -$ -$ 100,000,000$ US Bank -$ 5,000,000$ 65,000,000$ Green State Credit Union 15,000,000$ -$ 50,000,000$ Hills Bank & Trust 100,913$ 100,662$ 25,000,000$ Bankers Trust 12,725,562$ 563,667$ 50,000,000$ NXT Bank -$ -$ 10,000,000$ West Bank 73,538,116$ 70,662,356$ 75,000,000$ Total 258,031,576$ 183,231,575$ City of Iowa City Investments On Hand Listing By Institution MidwestOne Bank Piper Jaffray & Co. Iowa Public Agency Investment Trust First Interstate Bank Hills Bank & Trust Bankers Trust West Bank City of Iowa City Investments by Institution September 30, 2023 9/30/23 9/30/22 Investment Investment Fund Type Amount Amount Operating 224,032,888$ 147,028,550$ General Fund Reserve 9,998,688$ 9,998,025$ Equipment Reserve 10,000,000$ 10,000,000$ Health Insurance Reserve 6,000,000$ 6,000,000$ Landfill Replacement Reserve 2,000,000$ 2,000,000$ Landfill Closure 6,000,000$ 6,000,000$ Water Reserve -$ 2,205,000$ Total 258,031,576$ 183,231,575$ City of Iowa City Investments On Hand Summary By Fund Operating General Fund Reserve Equipment Reserve Health Insurance Reserve Landfill Replacement Reserve Landfill Closure Water Reserve City of Iowa City Investments by Fund September 30,2023 Fund Investment Purchase Maturity Investment Institution Type Type Date Date Amount Investments on Hand at 6/30/23 251,252,588.37$ Purchases Bankers Trust Operating Money Market 7,228,534.38$ Greenstate Credit Union Operating CD 8/23/2023 8/23/2024 5,000,000.00$ IPAIT Operating Money Market 10,310,000.00$ Greenstate Credit Union Operating CD 8/16/2023 8/16/2024 5,000,000.00$ Greenstate Credit Union Operating CD 8/16/2023 8/16/2024 5,000,000.00$ Bankers Trust Operating Money Market 5,105,000.00$ MidwestOne Bank Operating CD 9/14/2023 9/14/2024 5,000,000.00$ Interest and Accretion 1,658,968.97$ Total Purchases 44,302,503.35$ Redemptions Piper Sandler Water Reserves Fed Home Loan 7/14/2020 7/14/2023 2,205,000.00$ Piper Sandler Operating Fed Home Loan 10/20/2022 7/20/2023 5,000,000.00$ IPAIT Operating Money Market 10,000,000.00$ IPAIT Operating US Treas 08/19/2022 08/10/2023 10,310,000.00$ MidwestOne Bank Operating CD 08/23/2022 08/23/2023 5,000,000.00$ MidwestOne Bank Operating CD 12/13/2022 09/13/2023 5,000,000.00$ Expenses 8,515.68$ Total Redemptions 37,523,515.68$ Investments on Hand at 9/30/23 258,031,576.04$ City of Iowa City Investment Activity For The Quarter Ended September 30, 2023 Institution Investment Purchase Maturity Investment Name Fund Type Date Date Amount MIDWESTONE BANK OPERATING MMFUND ---09/30/2023 26,296,859.52 HILLS BANK OPERATING MMFUND ---09/30/2023 100,912.91 WEST BANK OPERATING MMFUND ---09/30/2023 73,538,115.87 BANKERS TRUST OPERATING MMFUND ---09/30/2023 12,725,561.55 IPAIT OPERATING MMFUND ---09/30/2023 526,724.63 Cedar Rapids Bank and Trust Company, IA OPERATING MMFUND ---09/30/2023 10,238,512.06 MIDWESTONE BANK OPERATING CD 10/12/2022 10/12/2023 5,000,000.00 MIDWESTONE BANK OPERATING CD 01/27/2023 01/27/2024 5,000,000.00 MIDWESTONE BANK OPERATING CD 05/16/2023 05/16/2024 10,000,000.00 Midwestone Bank OPERATING CD 06/13/2023 06/13/2024 10,000,000.00 MIDWESTONE BANK OPERATING CD 08/23/2023 08/23/2024 5,000,000.00 MIDWESTONE BANK OPERATING CD 09/14/2023 09/14/2024 5,000,000.00 CITY OF IOWA CITY INVESTMENTS OPERATING Time Deposit 07/27/2023 07/29/2024 5,000,000.00 GreenState OPERATING CD 08/16/2023 08/16/2024 5,000,000.00 GreenState OPERATING CD 08/16/2023 08/16/2024 5,000,000.00 UNITED STATES TREASURY OPERATING US GOV 04/11/2022 04/15/2024 10,290,606.02 FEDERAL HOME LOAN BANKS OPERATING AGCY DISC 12/14/2022 12/12/2023 5,189,008.16 FEDERAL HOME LOAN BANKS OPERATING AGCY DISC 01/30/2023 01/24/2024 5,161,649.60 FEDERAL HOME LOAN MORTGAGE CORP HEALTH INSURANCE RESERVE AGCY BOND 11/17/2020 05/17/2024 2,000,000.00 FEDERAL HOME LOAN BANKS GENERAL FUND RESERVE AGCY BOND 08/09/2021 08/09/2024 2,000,000.00 FEDERAL HOME LOAN BANKS EQUIPMENT REPLACEMENT FUND AGCY BOND 11/24/2021 11/24/2023 4,000,000.00 FEDERAL HOME LOAN BANKS OPERATING AGCY BOND 12/01/2022 11/30/2023 4,999,958.79 FEDERAL NATIONAL MORTGAGE ASSOCIATION OPERATING AGCY BOND 12/01/2022 11/27/2023 4,964,978.95 FEDERAL HOME LOAN BANKS OPERATING AGCY BOND 04/14/2023 04/12/2024 10,000,000.00 FEDERAL HOME LOAN BANKS OPERATING AGCY BOND 05/25/2023 05/24/2024 5,000,000.00 FEDERAL HOME LOAN MORTGAGE CORP EQUIPMENT REPLACEMENT FUND AGCY BOND 08/19/2020 02/14/2025 2,000,000.00 FEDERAL FARM CREDIT BANKS FUNDING CORP HEALTH INSURANCE RESERVE AGCY BOND 09/10/2020 09/10/2040 2,000,000.00 FEDERAL HOME LOAN BANKS GENERAL FUND RESERVE AGCY BOND 10/02/2020 09/22/2025 1,998,688.00 FEDERAL NATIONAL MORTGAGE ASSOCIATION LANDFILL CLOSURE FUND AGCY BOND 12/22/2020 06/22/2029 2,000,000.00 FEDERAL NATIONAL MORTGAGE ASSOCIATION LANDFILL CLOSURE FUND AGCY BOND 12/29/2020 12/29/2027 2,000,000.00 FEDERAL FARM CREDIT BANKS FUNDING CORP EQUIPMENT REPLACEMENT FUND AGCY BOND 12/23/2020 12/23/2024 2,000,000.00 FEDERAL HOME LOAN BANKS GENERAL FUND RESERVE AGCY BOND 01/14/2021 01/14/2026 2,000,000.00 FEDERAL HOME LOAN BANKS LANDFILL CLOSURE FUND AGCY BOND 01/29/2021 01/29/2027 2,000,000.00 FEDERAL HOME LOAN BANKS LANDFILL REPLACEMENT FUND AGCY BOND 01/27/2021 07/27/2026 2,000,000.00 FEDERAL HOME LOAN BANKS GENERAL FUND RESERVE AGCY BOND 01/28/2021 01/28/2026 2,000,000.00 FEDERAL HOME LOAN BANKS EQUIPMENT REPLACEMENT FUND AGCY BOND 02/17/2021 02/17/2026 2,000,000.00 FEDERAL HOME LOAN BANKS GENERAL FUND RESERVE AGCY BOND 03/30/2021 03/30/2026 2,000,000.00 FEDERAL HOME LOAN BANKS HEALTH INSURANCE RESERVE AGCY BOND 08/23/2021 05/23/2025 2,000,000.00 258,031,576.06$ City of Iowa City Investments On Hand September 30, 2023