Agenda & Packet
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CHUCK ENGELKEN, CHAIR JAY MARTIN Councilmember, District 2 Alternate Member 1 DARYL LEONARD DOTTIE KAMINSKI Councilmember, District 3 Alternate Member 2 TOMMY MOSER Councilmember, District 4 CITY OF LA PORTE FISCAL AFFAIRS COMMITTEE MEETING AGENDA Notice is hereby given of a meeting of the City of La Porte Fiscal Affairs Committee to be held on June 22, 2015, in the City Hall Council Chambers, 604 W. Fairmont Parkway, La Porte, Texas, beginning at 5:00 PM regarding the items of business according to the agenda listed below: 1. Call to order 2. Consider approval or other action regarding minutes of the March 23, 2015, meeting of the Fiscal Affairs Committee - P. Fogarty 3. Receive and review Second Quarter (FY2015) Investment Report - M. Dolby 4. Receive and review month of December (FY2014); January (FY2015) and February (FY2015) Purchasing Card Expenditures - M. Dolby 5. Receive report for Audit Services - M. Dolby 6. Set date for next meeting — M. Dolby 7. Administrative Reports — C. Alexander 8. Committee Comments regarding matters appearing on agenda — Committee members Engelken, Leonard, Moser, and Martin 9. Adjourn In compliance with the Americans with Disabilities Act, the City of La Porte will provide for reasonable accommodations for persons attending public meetings. To better serve attendees, requests should be received 24 hours prior to the meetings. Please contact Patrice Fogarty, City Secretary, at 281.470.5019. CERTIFICATION I certify that a copy of the June 22, 2015, agenda of items to be considered by the Fiscal Affairs Committee was placed on the City Hall Bulletin Board on June 16, 2015. Patrice Fogarty, City Secretary CHUCK ENGELKEN, CHAIR JAY MARTIN Councilmember District 2 Councilmember District 5 Committee Member Alternate Member 1 DARYL LEONARD DOTTIE KAMINSKI Councilmember District 3 Councilmember At Large B Committee Member Alternate Member 2 TOMMY MOSER Councilmember District 4 Committee Member MINUTES OF MEETING OF FISCAL AFFAIRS COMMITTEE MARCH 23, 2015 The Fiscal Affairs Committee met on March 23, 2015, at 5:00 p.m., in the La Porte City Hall Council Chambers, 604 West Fairmont Parkway, La Porte, Texas, to consider the following items of business: 1. Call to Order Chairman Chuck Engelken called the meeting to order at 5:00 p.m. Present were: Committee Members Tommy Moser and Daryl Leonard, Alternate Member 1 Jay Martin and Alternate Member 2 Dottie Kaminski. Also present: City Secretary Patrice Fogarty, City Manager Corby Alexander, Assistant City Manager Traci Leach, Finance Director Michael Dolby and Controller Phyllis Rinehart. 2. Consider approval of Minutes of the January 26, 2015, meeting of the Fiscal Affairs Committee – P. Fogarty Committee Member Moser moved to approve the minutes of the January 26, 2015 meeting. Committee Member Leonard seconded. MOTION PASSED. Ayes: Chairman Engelken, Committee Members Leonard and Moser Nays: None Absent: None Alternates members do not vote unless taking the place of an absent Committee member, in which case Alt. 1 steps up to member status. If two Committee members are absent, Alt. 2 steps up, as well. They are then authorized to vote. 3. Receive presentation of the 2014 Comprehensive Annual Financial (CAFR) Report – M. Dolby Finance Director Michael Dolby presented the 2014 Comprehensive Annual Financial (CAFR) Report and Tom Pederson with Whitley Penn presented a PowerPoint Presentation and explained the process and audit plan. Mr. Pederson informed a clean opinion was issued on the financial statements, and the total tax collection rate is 101%. 4. Discuss audit contract renewal – M. Dolby Finance Director Michael Dolby presented the audit contract renewal for discussion and requested one more year of service with Whitley Penn to perform the September 30, 2015, year end audit. Mr. Dolby stated one more year is requested with Whitley Penn because of the City’s implementation of One Solution. However, Committee members expressed a desire to change auditing firms as matter of policy when the same auditors have been used for several years in a row. Page 1 of 2 March 23, 2015, Fiscal Affairs Committee Minutes Committee Member Leonard moved to send out an RFP for new auditors. Councilmember Moser seconded. MOTION PASSED. Ayes: Chairman Engelken, Committee Members Leonard and Moser Nays: None Absent: None 5. Set date for next meeting – M. Dolby The Committee set May 11, 2015, at 5:00 p.m., as the date and time for the next meeting. 6. Administrative Reports – C. Alexander There were no Administrative Reports. 7. Committee Comments – Matters appearing on agenda; Recognition of community members, city employees, and upcoming events; Inquiry of staff regarding specific factual information or existing policy. There were no Committee Member comments. 8. Adjourn There being no further business, Committee Member Moser moved to adjourn the meeting at 5:42 p.m. Committee Member Leonard seconded. MOTION PASSED. Respectfully submitted, ________________________________ Patrice Fogarty, City Secretary Passed and approved on the _____ day of ___________, 2015. ________________________________ Chairman Chuck Engelken Page 2 of 2 March 23, 2015, Fiscal Affairs Committee Minutes CITY OF LA PORTE Interoffice Memorandum TO: Chuck Engelken, Councilmember Daryl Leonard, Councilmember Tommy Moser, Councilmember Jay Martin, Councilmember Dottie Kaminski, Councilmember Corby Alexander, City Manager Traci Leach, Assistant City Manager FROM: Michael Dolby, Director of Finance Shelley Wolny, Treasurer DATE: May 11, 2015 SUBJECT: Quarterly Investment Report For the second quarter of the 2015 fiscal year, the City’s investment portfolio yield averaged 0.30%, which is above the average yield of our benchmark at 0.09% (see graph below). The City’s investment portfolio has exceeded the benchmark by an average of 25 basis points this fiscal year, which equates to approximately $57,081 in additional earnings. Our benchmark is the 6-month T-Bill rate. The total interest earned through March 2015 for all funds is $93,149, which is 88.42% of the budget of $105,350. City vs. Benchmark 0.40% 0.35% 0.30% 0.25% 0.20% 0.15% 0.10% 0.05% ` 0.00% Portfolio Yield Benchmark At March 31st, the City’s portfolio totaled $68,012,802 and consisted of 23% in Texpool, 34% in Agency Notes and 43% in Logic. Approximately two-thirds of the portfolio remains in the investment pools to maintain adequate liquidity while pursuing opportunities for to optimize yield. Staff will continue to focus on laddering and diversifying the portfolio through the purchase of agencies to strengthen returns. 1 By Investment Type 43% 34% 23% Texpool Logic Agency Notes At the end of the second quarter, the City’s portfolio consisted of 66% of the portfolio maturing overnight, 3% maturing in 1 year, 16% maturing in 1-2 years and 15% maturing beyond two years. By Investment Maturity 15% 16% 3% 66% Overnight 1-12 Months 12-24 Months 24-36 Months Currently, the 3-month T-Bill is at 0.03%; 2-year, at 0.64%; 5-year, at 1.52%; and, the 20-year is at 2.41% (see yield curve below). Rates along the short end are the same as they were 3 months ago, and there have been no changes to the overnight rate. 2 Yield Curve 3.00% 2.00% 1.00% 0.00% Treasury Bills 3 months ago current The most current overnight rate was set on December 16, 2008 at 0.00% to 0.25%. As mentioned in the last report, timing of an increase in the fed funds rate will be highly dependent on economic data. Last quarter the consensus was that an increase would not happen until after April, possibly June/July. Economic data has been weaker than expected, which is pushing the projected date of an increase until September or even later. The economic environment is much stronger than it was when rates were initially decrease; however, inflation remains lower than 2%. We will continue to focus on laddering the portfolio to maintain a constant cash flow and a liquid position. 2 Year T-Note 8.00% 6.00% 4.00% 2.00% 0.00% In summary, we will continue to invest the City’s funds in conservative investments, as authorized by the Public Funds Investment Act, always keeping in mind Safety first, and then Liquidity and lastly Yield. 3 Portfolio Composition and Value as of March 31, 2015 80.00% 60.00% Par Book Market Days to Value Value Value Maturity Investment Pools 45,012,802 45,012,802 45,012,802 54 40.00% Agencies 23,000,000 23,000,000 23,008,806 667 Total 68,012,802 68,012,802 68,021,608 261 20.00% 0.00% Investment Pools Agencies Mar-15 Mar-14 Investment Maturity Schedule as of March 31, 2015 1-12 months Book 1-2 years Value Percent Overnight 45,012,802 66.18% 1-12 months 2,000,000 2.94% Overnight 1-2 years 11,000,000 16.17% 2-3 years 10,000,000 14.70% Total 68,012,802 100.00% 2-3 years Portfolio Performance for the month of March 31, 2015 Weighted Portfolio Benchmark Average 0.30% Yield Yield* Maturity Pooled Funds 0.32% 0.11% 8.89 months 0.20% Bond Funds 0.05% 0.03% 53 days Total 0.19% 0.07% 8.75 months 0.10% 0.00% *The pooled funds benchmark is based on the average monthly yield of a 6-month Treasury. Pooled Funds Bond Funds Total The bond funds benchmark yield is based on the average monthly yield of a 3-month Treasury. The total is based on weighted average monthly benchmark yields. Portfolio Yield Benchmark Yield* Portfolio Earnings as of March 31, 2015 75,000 Budget Actual Percent General 71,000 57,884 81.53% 50,000 Enterprise 8,500 9,763 114.86% Internal Service 8,000 7,836 97.95% Other Funds 17,850 17,666 98.97% 25,000 Total 105,350 93,149 88.42% - General Enterprise Internal