HomeMy WebLinkAbout2012 Board of Finance Annual Investment ReportUT
City of South Bend
Board of Finance
Annual Investment Report
For the year ended
December 31, 2012
Report Date; January 28, 2013
Report Distribution: Mayor
Chief of Staff
Deputy Chief of Staff
City Clerk
South Bend Common Council Members
Common Council Attorney
City Attorney
State Board of Accounts (local office)
Submitted By: City Controller
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
Table of Contents
Investment Report
Page
Action Requested
Executive Summary
1
B of F review and acceptance of report
Report of 2012 investments
2
B of F review and acceptance of report
Report of 2012 interest Earnings
3
B of F review and acceptance of report
Report of Outstanding Loans
4
B of F review and acceptance of report
City Recommendation
5
B of F approval of Controller recommendation
Other Business
32 -35
Controllers Cash Report - December, 2012
Payroll Stale Dated Checks
6
B of F approval of Controller recommendation
Disbursement Stale Dated Checks
7 -8
B of F approval of Controller recommendation
Investment Policy
City of South Bend Policy 9 B of F approval of recommended 2013 policy
investment Officers 9
Investment Amount- 1S` Source 9
Stale Dated Check Policy
City of South Bend Policy 10 B of F approval of recommended 2013 policy
Cash Reserve Policy /Procedure
City of South Bend Cash Reserve 11 B of F approval of recommended 2013 policy
Policy & Procedure
Appendix
Appendix 1
12 -14
Investment Policy
Appendix 2
15 -16
Stale Dated Check Policy
Appendix 3
17 -20
Interest Earnings Summary & Chart
Appendix 4
21 -24
Cash Reserve Policy & Procedure
Appendix 5
25 -30
1s` Source Corporate Agency Account Summary
Appendix 6
31
1s` Source interest Earned by Month
Appendix 7
32 -35
Controllers Cash Report - December, 2012
Appendix 8
36 -37
GFOA Best Practice on Appropriate Level of Fund
Balance
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
Executive Summary
On January 23, 2012, the Board of Finance of the City of South Bend convened its annual meeting. The
Board elected Council Member Mr. Gavin Ferlic as President and Council Member Mr. Tim Scott as
Secretary. At this meeting, the Board of Finance approved the 2012 City of South Bend Investment
Policy, Stale Dated Check Policy and Cash Reserve Policy and Procedure. At this meeting, the Board of
Finance, reviewed, discussed and accepted the Annual Investment Report of the City of South Bend for
the year ended December 31, 2011.
The City of South Bend has in fiscal 2012 operated in compliance with the investment policy approved by
the Board of Finance and with the other policies as approved by the Board of Finance.
The City of South Bend, during fiscal 2012, has operated with 151 Source Bank; a South Bend State of
Indiana domiciled Commercial Bank, as its primary banking partner for depository and disbursement
account activity.
The City of South Bend, during fiscal 2012, has invested certain funds with other commercial banks in
accordance with the investment provisions defined in the City of South Bend Investment Policy. The City
of South Bend has continued with 1st Source Bank as its primary investment partner with investments at
the bank of $150,000,000. The account is managed by Mr. Paul W. Gifford, Jr. who is the Chief
Investment Officer of 1st Source Corporation Investment Advisors, Inc.
Interest income earned by the city in fiscal 2012, (does not include accrued interest or changes in market
value of assets) with comparison to prior periods is as follows:
For 2012, interest earned on investments increased due to the operation of the new 15` Source
investment account for the full year. (The investment account was started on May 11, 2011.) In addition,
the City's Major Moves fund received interest payments in the amount of $300,437.53 during 2012 from
the Northeast Neighborhood TIF fund for scheduled payments of interest on the Eddy Street Commons
project. The rate of interest earned on this interfund investment was 5 %.
Interest Earnings $
Change vs. prior year
Effective Rate
2012 Interest Income
1,474,283
+129%
0.50%
2011 Interest Income
643,643
-20%
0.37%
2010 Interest Income
802,734
-40%
0.72%
2009 Interest Income
1,348,289
-79%
0.90%
2008 Interest Income
6,281,342
-10%
3.64%
2007 Interest Income
7,010,895
+36%
5.50%
For 2012, interest earned on investments increased due to the operation of the new 15` Source
investment account for the full year. (The investment account was started on May 11, 2011.) In addition,
the City's Major Moves fund received interest payments in the amount of $300,437.53 during 2012 from
the Northeast Neighborhood TIF fund for scheduled payments of interest on the Eddy Street Commons
project. The rate of interest earned on this interfund investment was 5 %.
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
Report of 2092 Investments
Investment Maturity
Date Date
15' Source 05/11/2011 N/A
Investment
Acct
Total
Comment(s)
Funds Interest Financial
Invested Rate Institution
150,000,000 Varies 1S, Source
150,000,000
All investment instruments entered into during fiscal 2012 were /are in full compliance with the Board of
Finance Investment Policy in effect during the time period. A summary of the 15t Source Investment
Account is provided in Appendix 5.
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
Report of 2012 Interest Earnings (Net of Investment fees)
Instrument
1" Source Checking Accounts
1" Source Investment Account
Other Instruments
Other Bank Interest
Total Interest Earned
Comment(s)
Interest Earned ($)
162,715
828,988
451,860
30,720
1,474,283
Interest earned on depository accounts
Interest earned on investment account
DCI & Interfund loan interest earned
Bank of New York Mellon & Key Bank
1" Source checking and investment account interest is deposited in the City checking account on a
monthly basis one month in arrears (i.e. interest earned in January is deposited in February). A summary
of 1st Source Bank interest received during 2012 is provided in Appendix 6.
Other Instruments is the interest earned from economic development loans and interfund loans
outstanding during the period.
Other bank interest is for interest earned at Key Bank (Century Center) and at Bank of New York Mellon
(water works and wastewater debt service reserve accounts).
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
Report of Outstanding Loans
Debtor Instrument
Bosch IDFA Term Loan
Bosch
State Sponsored
Status
Term Loan
Various
CDBG — HIP
to settlement
Loan(s)
Ambulatory
SBCDA Loan
Care
September, 2020
Solutions,
LLC.
Various
UDAG — Business
current/some
Loan(s)
Anchor Realty
Term Loan
BDC
Term Loan
Total
Principal $ Interest
Outstanding Rate
579,779 3.0%
1,039,331 4.0%
406,841 various
883,311 6.0%
850
66,667
2,358,852
5,335,631
4
various
1.25%
0%
Payment
Term
Status
delayed due
March, 2021
to settlement
discussions
delayed due
September, 2020
to settlement
discussions
some
Various
current/some
delinquent
current
April 4, 2017
current Various
current December, 2014
in January, 2016
negotiations
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
City Recommendations
For fiscal 2013, the city will maximize investment earnings, to the extent possible, given available funds
for investment and interest rate potentials within the current state of economic conditions. The city will
affect all investments within the context of conditions as established by the City of South Bend Investment
policy as defined and approved for execution by the Board of Finance. The City of South Bend will
continue to monitor the effectiveness of its investment agreement with 1" Source Bank.
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
Other Business — Payroll Stale Dated Checks
The current policy, as defined and approved by the Board of Finance, has defined that payroll checks
drawn on city accounts will have a two (2) year active life from the date of issuance as noted on the
check. Un- cashed checks, beyond the two (2) year active life period, are no longer valid and shall be
classified as a stale dated check.
Such checks, defined as stale dated, will be reported to the Board of Finance with a recommendation
from the City Controller on the disposition of the stale dated checks.
Therefore, the following represents the list of Stale Dated Payroll Checks as of December 31, 2012.
Ck #
Name
Date
$ Amount
Fund #
Fund Name
Payroll
354021
Purcell, Eric D
03/05/2010
141.83
101
General
354084
Williamson, Troy R
03/05/2010
136.44
101
General
356530
Griffin, Matthew C
06/11/2010
112.82
101
General
357131
Mroczkiewicz, Albert P
06/11/2010
135.94
101
General
358449
Niedbalski, Leslie
07/09/2010
55.92
201
Parks & Rec
361030
Greenlee, Timothy D
09/03/2010
135.94
101
General
363380
Walker, Michael A
11/12/2010
619.52
101
General
364458
Humphrey, Michael A
12/10/2010
136.94
101
General
Total
1,475.35
City Recommendation
The City of South Bend recommends that such payroll checks, classified by city policy as stale dated, to
be approved by the Board of Finance for cancellation. Said checks, shall be voided within the city's
payroll system and removed as a payroll liability of the City of South Bend.
Indiana Statute, allowing cancellation and voidance of un- cashed payroll checks defined as stale dated,
will remain subject to claim by the payee for a period of seven (7) years from date of issuance. The City
will maintain record of these potential liabilities in the event a claim is made by any payee.
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
Other Business - Disbursement Stale Dated Checks
The current policy, as defined and approved by the Board of Finance, has defined that disbursement
checks drawn on city accounts will have a two (2) year active life from the date of issuance as noted on
the check. Un- cashed checks, beyond the two (2) year active life period, are no longer valid and shall be
classified as a stale dated check.
Such checks, defined as stale dated, will be reported to the Board of Finance,
with a recommendation
from the City Controller on the disposition of the stale dated
checks.
Therefore, following represents the list of stale
dated disbursement checks as of
December 31, 2012.
Ck #
Name
Date
Amount
Fund #
Fund Name
396691
Woofter, Eugene C
01/04/2010
13.59
620
Water Works Operations
396699
Heitkamp, Ralphy D
01/04/2010
21.04
620
Water Works Operations
397312
Phelim Cafferty
01/1812010
10.00
101
General Fund
397928
James A. Montague
02/04/2010
68.35
620
Water Works Operations
397961
Cannon, Rena E
02/04/2010
20.00
620
Water Works Operations
397993
Hillman, Marjorie M
02/04/2010
24.02
620
Water Works Operations
399944
Karissa Keen
03/15/2010
11.71
288
EMS Capital
400479
Theresa Moody
03/29/2010
119.63
203
Recreation
401139
Meridian Title Corp /Escrow Acct.
04/12/2010
125.00
101
General Fund
401229
Title One
04/1412010
82.25
620
Water Works Operations
401854
Paul Schultz
04/26/2010
178.00
203
Recreation
402199
GMAC Mortgage
05/06/2010
11.72
620
Water Works Operations
402204
Brenda Gilbert
05/06/2010
63.40
620
Water Works Operations
402205
GMAC Mortgage Corp.
05/06/2010
52.45
620
Water Works Operations
402208
Adrienne Reaves
05/06/2010
16.50
620
Water Works Operations
402213
Kevin Barnes
05/06/2010
36.96
620
Water Works Operations
402218
Peter & Virginia Basile
05/06/2010
46.54
620
Water Works Operations
402219
Mary Frances
05/06/2010
54.34
620
Water Works Operations
402221
Dawne Gosnell
05/06/2010
74.50
620
Water Works Operations
402238
Murphy, Tom
05/06/2010
22.51
620
Water Works Operations
402870
Alfredo Bolanos
05/17/2010
109.80
620
Water Works Operations
402881
Tosha Gullens
05/17/2010
93.72
620
Water Works Operations
402889
Tumaini Mgomi
05/17/2010
103.43
620
Water Works Operations
403595
Douglas Hummel
06/02/2010
31.09
620
Water Works Operations
403600
Thomas Davis
06/02/2010
54.40
620
Water Works Operations
403612
Lawler, Russell C
06/02/2010
55.56
620
Water Works Operations
404516
Quality Glass Service Inc.
06/21/2010
174.13
222
Central Services
404954
McBride, James R
07/02/2010
10.00
620
Water Works Operations
404958
Twyckenham Estates LLC
07/02/2010
43.58
620
Water Works Operations
406681
Darrold J. Kollar W /Life Estate
08/04/2010
100.29
620
Water Works Operations
406687
Casey Rettke
08/04/2010
90.80
620
Water Works Operations
406692
Tiffany Investments LLC
08/04/2010
85.49
620
Water Works Operations
406694
Roy Ruthven
08/04/2010
42.08
620
Water Works Operations
406696
Jessie Musonda
08/04/2010
59.69
620
Water Works Operations
406699
Ronald Mesaros
08/04/2010
59.72
620
Water Works Operations
406702
William Cole
08/04/2010
68.90
620
Water Works Operations
406704
D. Young, E. Keith & D. Rzepka
08/04/2010
70.16
620
Water Works Operations
406705
Cottage One Properties Inc.
08/04/2010
56.01
620
Water Works Operations
406734
Pewe, Kelly
08/04/2010
11.26
620
Water Works Operations
406742
Lavine, Donna Sue
08/04/2010
20.00
620
Water Works Operations
407246
Plug & Pay Technologies
08/16/2010
15.00
201
Parks & Recreation
407341
Francisco Medina
08/16/2010
20.00
288
EMS
408127
Schuenke, Kate
09/03/2010
70.64
620
Water Works Operations
408132
Fowler, Andrea
09/03/2010
9.80
620
Water Works Operations
408135
JW Homes 2 Live
09/03/2010
3.40
620
Water Works Operations
408139
Taylor, Danielle N
09/03/2010
4.47
620
Waterworks Operations
408373
Housing Authority of South Bend
09/07/2010
3,013.00
222
Central Services
408738
Kraz Construction Company
09/13/2010
90.00
600
Building Department
408741
Farmers Insurance Group
09/13/2010
272.75
226
Liability Insurance
409027
Housing Authority of South Bend
09/20/2010
3,000.00
288
EMS
409091
David Blade Jr.
09/20/2010
48.66
620
Water Works Operations
409109
Manuela Baluelos
09/20/2010
2.00
288
EMS
410106
U S Army Engineer District
10/11/2010
22,83
620
Water Works Operations
410116
Linares, Jesse J
10/11/2010
10.20
620
Water Works Operations
411109
Sullivan, Robert E
11/03/2010
40.00
620
Water Works Operations
411112
Dozier, William L
11/03/2010
40.00
620
Water Works Operations
411381
Miguel Rivera
11/08/2010
100.00
201
Parks & Recreation
412374
Wolfe, Mary L
12/03/2010
4.70
620
Water Works Operations
412393
Brumm, John
12/03/2010
8.19
620
Water Works Operations
413779
John R. Williams
12/20/2010
.40
709
Payroll
413786
Alan K. Delinski
12/20/2010
.94
709
Payroll
413813
James Wilder
12/20/2010
.80
709
Payroll
Total
9,170.40
City Recommendation
The city recommends that such disbursement checks, classified by city policy as stale dated, to be
approved by the Board of Finance for cancellation. Said checks, shall be voided within the city's accounts
payable disbursement system and removed as a liability of the City of South Bend.
Indiana Statute, allowing cancellation and voidance of un- cashed disbursement checks defined as stale
dated, will remain subject to claim by the payee for a period of seven (7) years from date of issuance. The
city will maintain record of these potential liabilities, in the event a claim is made by any payee.
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
Investment Policy
The City of South Bend recommends the adoption of the attached Investment Policy:
Refer to Appendix 1
Administration & Finance Policy 2.8 Investment Policy
to be effective January 1, 2013,
said policy recommended is to be amended as noted in Paragraph 7.0 Maturity Limitations.
Investment Officers
The city recommends the following Investment Officers for fiscal 2013:
Mark W. Neal City Controller
John H. Murphy Deputy City Controller
Investment Amount with If Source Bank
The city requests authorization to inprease its investments in the City of South Bend Corporate Agency
Account with 1" Source Bank from' a maximum of $150 million dollars to a maximum of $175 million
dollars. This will allow the City to take greater advantage of experienced financial management while
maintaining necessary banking liquidity in its checking accounts for regular City cash flow requirements.
The City Investment Officers may elect to invest less than the maximum stated amount in the Corporate
Agency Account if the necessary for operational needs.
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
Stale Dated Check Policy
The City of South Bend recommends the adoption of the attached Stale Dated Check Policy:
Refer to Appendix 2
Administration & Finance Policy 2.11 Stale Dated Check Policy
to be effective January 1, 2013,
said policy recommended is unchanged from the policy in effect during fiscal 2012.
10
City of South Bend
Board of Finance (B of F)
Annual Investment Report
For the year ended December 31, 2012
Cash Reserve Policy & Procedure
The City of South Bend recommends the adoption of the attached Cash Reserve Policv:
Refer to Appendix 4
to be effective January 1, 2013.
said policy is unchanged from the policy in effect during fiscal 2012.
The City of South Bend recommends the adoption of the attached Cash Reserve Procedure:
Refer to Appendix 4
to be effective January 1, 2013,
said procedure recommended is changed from the procedure in effect during fiscal 2012. The
new procedure is designed to provide a comprehensive listing of all funds with a capital reserve
requirement associated with each fund. Therefore, additional funds have been added to the revised Cash
Reserve Procedure.
iffil
Appendix 1
City of South Bend Administration & Finance Policy Manual
4561J Tu ,&4
Z, k
wVE,ACC y
1865 -
2.8 Investment Policy Effective: January 1, 2011. Revised January 1,
2013
Purpose: This policy defines the cash investment policy of the City of South Bend.
Scope: This statement applies to all governmental units, enterprise operations, and operations of the
City of South Bend. This policy shall be in accordance with the terms and limitations of I.C.
5 -13 -9, Deposit and Investment Powers, as amended from time to time.
Responsibility:This policy is the responsibility of the Board of Finance of the City of South Bend. Changes or
revisions to this policy are affected only with the consent and approval of the Board of Finance,
Effective Date: This policy is effective upon approval and execution of the Board of Finance. The Board of
Finance will review this policy on an annual basis coincident with the Annual Meeting of the
Board of Finance, held after the 1 'Monday in January and before January 31St
1.0 Policy Statement
The City of South Bend, Indiana shall make all investments, in both Deposit and Investment Accounts, in
accordance with the terms and limitations of IC 5 -13 -9, Deposit and Investment Powers, as amended
from time to time.
2.0 Deposit and Investment Options
Eligible deposit accounts mean any of the following:
1. Any account subject to withdrawal by negotiable orders of withdrawal, unlimited as to amount or
number, and without penalty, including NOW accounts
2. Passbook savings accounts
3. Certificates of Deposit
4. Money market deposit accounts
5. Any interest - bearing account that is authorized and offered by a financial institution in the course of its
respective business
City of South Bend Administration & Finance Policy Manual
3.0 Eligible Investment Products:
Each investment officer may invest or reinvest any funds that are held by the officer and available for
investment in any of the following (IC 5- 13 -9):
12
3.1 Securities backed by the full faith and credit of the United States Treasury or fully guaranteed by the
United States and issued by any of the following:
1. The United States Treasury
2. A federal agency
3. A federal instrumentality
4. A federal government sponsored enterprise
3.2 Discount notes issued by any of the following:
1. A federal agency
2. A federal instrumentality
3. A federal government sponsored enterprise
3.3 An investment officer shall annually obtain the approval of the Common Council before making
investments in the following:
1. Money market mutual funds that are in the form of securities of or interests in an open -end, no -load,
management -type investment company or investment trust registered under the provisions of the federal
Investment Company Act of 1940, as amended. The portfolio of this type must be limited to the following:
A. Direct obligations of the United States
B. Obligations issued by any of the following:
a. A federal agency
b. A federal instrumentality
C. A federal government sponsored enterprise
C. Repurchase agreements fully collateralized by obligations described in both A and B above.
2. The money market mutual fund must be rated as one of the following:
A. AAAm, or its equivalent, by Standard and Poor's Corporation
B. Aaa, or its equivalent, by Moody's Investors Service, Inc.
3.4 The investment is considered to have a stated final maturity of one day, and shall be made through
depositories designated by the state board of finance as depositories for state deposits under IC
5- 13 -9.5.
4.0 Terms of Repurchase Agreements
Each investment officer may enter into, with any funds that are held by the officer and available for
investment, repurchase agreements with depositories designated by the State Board of Finance as
depositories under IC 5- 13 -9.5; and involving the political subdivision's purchase and guaranteed resale
of any interest - bearing obligations;
A. issued; or
B. fully insured or guaranteed by the United States, a United States Government Agency, an
instrumentality of the United States, or a federal government sponsored enterprise.
The depository shall determine daily that the amount of money in this type of agreement must be fully
collateralized by interest - bearing obligations as determined by their current market value. The collateral
is not subject to the two -year maturity limitation.
13
Repurchase agreements may be entered into for a fixed term or arranged on an open or continuing basis
as a continuing contract that:
operates like a series of overnight repurchase agreements (may be referred to as overnight
sweep products),
is renewed each day with the repurchase rate and the amount of funds invested determined
daily; and
for this purpose is considered to have a final maturity of one day.
5.0 Investment in Other Securities
Each investing officer may invest or reinvest in obligations issued, assumed or guaranteed by the
International Bank for Reconstruction and Redevelopment or the African Development Bank (IC
5 -13- 9.3.3)
6.0 Inter -local Cooperation Agreement
IC 36 -1 -7 -1 authorizes and permits local units of government to enter into inter -local cooperation
agreements, and thus to exercise a power jointly pursuant to a written agreement authorized by
ordinance or resolution. MBIA provides through Invest Indiana, such an inter -local agreement. The
investments of the joint structure are limited to all investments authorized by IC 5 -13.
7.0 Maturity Limitations
1. A minimum of 75% of the total portfolio must be invested with a maximum maturity of two (2) years in permitted
investments as defined as above.
2. A maximum of 25% of the total portfolio maybe invested with a maturity of two (2) to five (5) years as permitted
in IC 5- 13 -9 -5.7 in permitted investments as defined as above. This policy expires on January 31, 2017.
14
Appendix 2
City of South Bend Administration & Finance Policy Manual
04'9N TH h
CF
1865
2.11 Stale Dated Check Policy Effective: January 1, 2010
Purpose: This policy defines the practice and protocol for handling stale dated checks issued by the City
of South Bend.
Scope: This statement applies to all governmental units, enterprise operations, and operations of the
City of South Bend.
Responsibility:This policy is the responsibility of the Controller of the City of South Bend. Changes or
revisions to this policy are affected only with the consent and approval of the Controller.
Effective Date: This policy is effective January 1, 2010.
1.0 Policy Statement
The City of South Bend has defined that payroll checks and account payable disbursement checks
drawn on city accounts will have a two (2) year active life from the date of issuance as noted on the
check. Un- cashed checks, beyond two (2) year active life period, are no longer valid and shall be
classified as a stale dated check.
2.0 Responsibility
Administration of the stale dated check policy is delegated by the Controller, to be the responsibility of
the Director City Finance.
The Director City Finance will identify the payroll and payable disbursement checks that are classified
as stale dated checks, prepare such list and submit to the Controller for approval. Upon approval of the
Controller, the stale dated check list will be presented to the City of South Bend Board of Finance, at
the first annual Board of Finance Meeting during each calendar year, for Board of Finance vote on the
stale dated check disposition recommendations as presented by the Controller.
3.0 Board of Finance Filing Requirements
3.1 The Controller shall file with the Board of Finance, documents as defined in paragraphs 3.1.1
and 3.1.2 and the Controller's recommendation, at least 72 hours prior to the first annual
Board of Finance Meeting called for each calendar year:
3.1.1 Payroll Stale Dated Checks: Proposed list of all stale dated checks recommended to be
written off, identifying the check number, employee name, date of check, amount of
check, fund name, fund number, and any other information deemed necessary by the
Controller.
3.1.2 Account Payable Stale Dated Checks: Proposed list of all stale dated checks
recommended to be written off, identifying the check number, vendor name, date of
check, amount of check, fund name, fund number, and any other information deemed
necessary by the Controller.
Approved By: City Controller Approved By: Mayor
AF Policy 2.1 ? Stale Dated Check Policy. doc Page 2 of 2
15
City of South Bend Administration & Finance Policy Manual
4.0 Board of Finance Requirements
The Board of Finance shall be required to review all information filed by the Controller as referenced
above and hear presentation and recommendation from the Controller or designee at the first annual
Board of Finance meeting,
The Board will motion, second, and vote on the recommendation as presented by the Controller with,
majority in favor and supporting the recommendation of the Controller, the recommendation will be
passed, and the Controller provided with the authority to execute the recommendation as approved.
A copy of all guidelines shall be filed of record with the Office of the City Clerk and with the City
Controller in the Department of Administration and Finance.
5.0 Other Matters
Additional guidelines may be promulgated by the Board of Finance when deemed necessary.
Approved By: City Controller Approved By: Mayor AF Policy 2. 11 State Dated Check Policy.doc Page 2 of 2
Approved By: City Controller Approved By: Mayor
AF Policy 2. 11 Stale Dated Check Policy. doc Page 2 of 2
16
Appendix 3
$8,000,000
$7,000,000
—
—
Interest Earnings 2002 -2012
- - - - - -- _�_
$6,000,000
- -_
_ - -- -
$5,000,000
861,968
2004
$4,000,000
- --
— __
$3,000,000
3,392,461
,
$2,000,000
5,132,272
2007
$1,000,000
7,010,895
2008
$0
6,281,342
2009
Actual
2002
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Actual
Actual
Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual
Interest Earnings
2002
Actual
$1,296,410
2003
Actual
861,968
2004
Actual
1,357,297
2005
Actual
3,392,461
2006
Actual
5,132,272
2007
Actual
7,010,895
2008
Actual
6,281,342
2009
Actual
1,348,289
2010
Actual
802,734
2011
Actual
643,643
2012
Actual
1,474,283
Total
2002 -2012
$29,601,594
The City of South Bend earns interest on checking account balances, certificates of deposit, repayment of loans
on economic development projects and short-term investments. In May 11, 2011, the City opened a new investment account
with 1st Source Bank in the amount of $150,000,000. Investment earnings are reported net of fees. Investment earnings
are recorded in the general ledger on a cash basis when realized and do not reflect changes in asset value
and accrued interest until the investment is sold or matures. Interest is also earned on advances from the Major Moves
Fund to the Northeast Residental and Douglas Road TIF Funds.
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Appendix 4
City of South Bend Administration & Finance Policy Manual
` � 45pUTH BE`,y
I
2.3 Cash Reserve Policy Effective: January 1, 2010
Purpose: This policy defines the cash reserve policy of the City of South Bend.
Scope: This statement applies to all governmental units, enterprise operations, and operations of the
City of South Bend.
Responsibility:This policy is the responsibility of the Controller of the City of South Bend. Changes or revisions
to this policy are affected only with the consent and approval of the Controller.
Effective Date: This policy is effective January 1, 2010.
1.0 Policy Statement
The City of South Bend will establish cash spending reserves in certain funds, as defined by the Mayor
and the Controller, to hold cash reserves to serve as fiscal protection against the risk of revenue
shortfalls, emergencies, unstable property tax collection, and other economic risks that may impact the
City's ability to meet financial obligations and commitments.
Such cash reserves, may also serve as a mechanism to maintain credit agency and bond ratings to
ensure creditworthiness and borrowing capacities, in the event they are required, at the lowest cost.
1.1 The Mayor and the Controller, jointly, will have authority to define the cash reserve guidelines in
effect for the City of South Bend.
1.2 Cash reserve guidelines, are targets, established for the intentions as stated in paragraph
1.0 of this policy, and may not be adhered to at all times due to unforeseen circumstances.
1.3 The city will review the cash reserve policyfrom time to time to determine if economic conditions
and circumstances warrant consideration of revision to the in effect cash reserve procedures.
Approved By: City Controller Approved By., Mayor AF Policy 2.3 cash Reserve Poficy.doc Page 1 or 1
21
City of South Bend Administration & Finance Policy Manual
45pUTHg� ,
WACE
`a
1865
2.3.1 Cash Reserve Procedure Effective; January 1, 2010, Revised January 1, 2013
Purpose: This procedure defines the cash reserve practices for the City of South Bend.
Scope: This statement applies to all governmental units, enterprise operations, and operations of the
City of South Bend.
Responsibility: This policy is the responsibility of the Controller of the City of South Bend. Changes or revisions
to this policy are affected only with the consent and approval of the Controller.
Effective Date: This policy is effective January 1, 2010 and revised January 1, 2013.
1.0 Procedure Statement
The City of South Bend has established the following cash reserve guidelines. Cash reserves are defined as cash
balances on hand less outstanding encumbrances.
Fund
Fund Name
Cash Reserve Policy
101
General Fund
25% of annual expenditures
102
Rainy bay Fund
3% contingency of total expenditures in
201
Parks & Recreation Fund
prior year
25% of annual expenditures
202
Motor Vehicle Highway Fund
20% of annual expenditures
203
Recreation — Nonreverting Fund
20% of annual expenditures
209
Studebaker /Oliver Reverting Grants Fund
: 20% of annual expenditures
210
Department of Community Investment State
Grants Fund
°
20% of annual expenditures
211
Department of Community Investment
Administration Fund
20% of annual expenditures
216
Police State Seizures Fund
20% of annual expenditures
217
Gift, Donation, Bequest Fund
20% of annual expenditures
218
Police Curfew Violations Fund
20% of annual expenditures
220
Law Enforcement Continuing Education Fund
; 20% of annual expenditures
222
Central Services Fund
20% of annual expenditures
226
Liability Insurance Fund
25% of annual expenditures
227
Loss Recovery Fund
! 20% of annual expenditures
249
Public Safety LOIT Fund
20% of annual expenditures
251
Local Roads & Streets Fund
; 20% of annual expenditures
252
Excess Welfare Distribution Fund
` 20% of annual expenditures
258
Human Rights — Federal Grants Fund
: 20% of annual expenditures
271
Eastrace Waterway Fund
20% of annual expenditures
273
Morris Performing Arts Center /Palais Royale
Marketing Fund
°
20% of annual expenditures
278
Take Home Vehicle Police Fund
20% of annual expenditures
22
Fund
Fund Name
Cash Reserve Policy
280
Police Block Grants Fund
20% of annual ex_ penditures
Economic Development Commission -
-- -
281
Revenue Bonds Fund
20% of annual expenditures
288
288
S /Fire
EMS /Fire Department Capital Fund
20% of annual expenditures
289
HAZMAT Fund
20% o - ' -
of annual'expenditures
291 _.
Indiana River Rescue Fund
t_ _ ..
20% of annual expenditures
29_2
Police Grants Fund
- -- - - -
20 %of annual expenditures_
294
Regional Police Academy Fund
_
20% of annual expenditures
295
COPS More _Grant Fund
_
20% of annual expenditu res
299
E
Police Federal Drug nforcement Gra_ nt
20% of annual expenditures
313
Hall of Fame Debt Service Fund
20% of annual expenditures
315
Airport 2003 Debt Reserve Fund
_ - - -
100% of debt service reserve per bond covenants
-
317 -
Coveleski Bond Debt Reserve Fund
100% of debt service reserve per bond covenants
31_9_
Redevelopment Bond - _Blackthor_n Golf Fund_
_
100% of debt service reserve per bond c_ ove_n_a_ nts_
324_
_TIF Revenue - Airport Fund _ _ __ _
25% of annual expenditures
328
SBCDA 2003 Debt Reserve Fund
-- -- -
100% debt service reserve per bond covenants
377
Professional Sports Development_Fund
20% of annual expenditures
Coveleski Stadium Capital Fund _
401
20% of annual expenditures--.--.
403
_
Zoo Endowment Fund _
o - -
20 /o of annual expenditures
404
County Option Income Tax Fund _
_
50% of annual expenditures
_405
Park Nonreverting Capital Fund
20% of annual expenditures
406
Cumulative Capital Development Fund_
_
25% of annual expenditures
407
_ _
Cumulative Capital Improvement Fund
_
25% of annual expendilure_s
_
Economic Development Income Tax Fund -
408 _�
50% of annual expenditures
410
Urban Development Action Grant (UDAG)
-�— -' -' - -' - -
Fund
20% of annual expenditures
412
Major Moves Costruction Fund
20% of annual expenditures
16
orris Performing Arts Center Capital Fund
20% of annual expenditures
420
_
TIF District - SBCDA General (Downtown)
Fund
25% of annual expenditures
422
TIF District -_West Washington Fund _
-_ -
_25% of annual expenditures
425
_
_
TIF Leighton Plaza Fund
_
20% of annual expenditures
_
TIF Central Medical Service Area Fund
426_
_
25% of annual expenditures _
Tlr Northeast District Fund
429
_
25% of annual expenditures
430
TIF Southside Development Area #1 Fund
_
25% of annual expenditures
432
TIF Southside Development Area #3 -_
`--
Erskine Village Fund
25 %of annual expenditures
433
Redevelopment Administration General Fund
20% of annual expenditures -
434
_ __._.
CREED Fund
_ ._ _
o -- - - - -
25/0 of annual expenditures
435
_
TIF -Douglas Road Fund
TIF - Northeast Residential Fund
-- - - - -
25% of annual expenditures
25% of annual expenditures
436
439
Certified Technology Park Fund
20% of annual expenditures
20% of annual expenditures
450
_
Palais Royale Historic Preservation Fund
454
--
Airport Urban Enterprise Zone Fund
-- P ---- - - - - -p - -- -- -
_
20% of annual expenditures
600 _
- _
Consolidated Building Department Fund
20% of annual expenditures
601
Parking Garages Fund
Solid Waste Operations Fund _
ures _ 20% of annual expendit _
20% of annual expenditures
610_
619
Blackthorn Golf Course Operations Fund
20% of annual expenditures
620
Water Works Operations Fund
5% of annual expenditures
622_
Water Works Capital Fund
20% of annual expenditures _
624
_
Water Works Customer Deposit Fund _
100% cash reserves for customer deposits
23
Fund
626
Fund Name - -- ---- ---
___ ___ _ _
Water Works Bond Reserve Fund
-1 --- -- - -- - -- -- - -- - -- . .
Cash Reserve Policy
-
_
100% cash reserves per bond covenants
629
Water Works Reserve - O & M Fund
16.67% of annual operating expenses in fund 620, net
-- ,-
-- -. -..
of transfers
64 0
�- ._
- -
ewer Re air Insurance Fund
S- -- -. _P
20% of annual expenditures
641
-_.. _
Sewage Works Operations Fund
- - - .g._______p�_ _._
- --
5% of annual expenditures
642
_
Sewa a Works Ca ltal Fund
_ g _ _ I?, __. _ _._... _
o ` -
20 /o of annual expenditures
643
Sewage Works Reserve - O & M Fund
16.67% of annual operating expenses in fund 641, net
of transfers
650 _
Clay Sewage Works Operations Fund
_
1_00% reserves of cash available
653
Sewage Works Debt Service Reserve Fund
100% cash reserv_e_s per bond covenants
655
Project Releaf Fund
20% of annual expenditures
670
Century Center Fund
20% of annual expenditures
671
Century Center Capital Fun
20% of annual expenditures j
677
Hall of Fame Capital Fund _
20% of annual expenditures
701
--
Firefighters Pension Fund
-
25% of annual expenditures
70_2_
_
Police Pension Fund
25% of annual expenditures
_
_Police/Fire 1977 State Pension Fund
100% cash reserves - trust & aaencv funds
705 Police K -9 Unit Fund
709 Payroll Fund - --
711 Self- Funded Employee Benefits _
712 Public Employees JRetiremert Fund
7 3 Unemployment Compensation Fund _
- - -- - - --
718 State Tax Deduction Fund _ _
725 Morris / Palais Box Office-Fund. _
730 _ City Cemetery Trust
- -- Water & Sewer Bond Funds
20% of annual ex
_ 100% cash reserves - trust & _agency funds
25% of annual expenditures _
100% cash reserves -trust &agency funds
20% of annual expenditures -
100% cash reserves - trust & agency funds
100% cash reserves - trust &agency funds
20% of annual expenditures-
_No cash reserves _spend down of cash on projects
24
Appendix 5
CSclurce.
Bank
Investment Presentation for
CITY OF SOUTH BEND CORPORATE AGENCY
Prepared by Paul Gifford, CFA
25
C BnnkCe.
Asset Allocation
$150,016,604.63
Total Unrealized Gain /Loss
Asset Category
Market Value
% Total
Equity
0.00
0.0
® Fixed Income
144,409,998.17
96.3
■ Cash
5,606,606.46
3.7
❑ Other
0.00
0.0
Total
$150,016,604.63
100.00/0
Account Summary as of 12/31/2012
CITY OF SOUTH BEND CORPORATE AGENCY
Total Market Value
$150,016,604.63
Total Unrealized Gain /Loss
$52,232.50
Estimated Annual Income
$870,105.08
Estimated Portfolio Yield
0.58%
YTD Long Term Gain /Loss
$0.00
YTD Short Term Gain /Loss
$0.00
Investment Officer
(I0) PWG - Paul W. Gifford
Administrative Officer
(AO) JEW - James Welch
Policy Account
Income
Index Account
Citi 1 -Year Treasury Benchmark
.. 5 Holdings
Asset
Units
Price
Tax Cost
Market Value
Gain /Loss
Est. Income
Yield
%Total
FEDERAL HOME LOAN BANKS .375%
10,000,000
100.22
10,010,290.00
10,022,400.00
12,110.00
37,500.00
0.37
6.68
DUE 01/29/2014
FEDERAL FARM CREDIT BANK .34%
10,000,000
100.00
9,993,750.00
10,000,200.00
6,450.00
34,000.00
0.34
6.67
DUE 04/23/2014 CALL 07/23/2012
FEDERAL NATIONAL MORTGAGE
9,000,000
100.67
9,058,230.00
9,060,210.00
1,980.00
56,250.00
0.62
6.04
ASSN .625% DUE 10/30/2014
FEDERAL NATIONAL MORTGAGE
8,500,000
100.60
8,529,885.00
8,551,000.00
21,115.00
63,750.00
0.75
5.70
ASSN.75% DUE 12/18/2013
FEDERAL HOME LOAN MORTGAGE
8,000,000
101.17
8,103,370.00
8,093,360.00
- 10,010.00
80,000.00
0.99
5.39
CORP 1.00% DUE 08/20/2014
Total
$45,695,525.00
$45,727,170.00
$31,645.00
$271,500.00
0.59%
30.480/b
January 16, 2013
Page 1 of 5
26
Historical Account Holdings Details as of 12/31/2012
CITY OF SOUTH BEND CORPORATE AGENCY
Asset
Units
Price
Tax Cost
Market Value
Gain /Loss
Est. Income
Yield
%Total
Fixed Income
Federal Agencies
FEDERAL FARM CREDIT BANK
.33% DUE 07/23/2014 CALL
5,000,000
100.00
4,998,000.00
5,000,100.00
2,100.00
16,500.00
0.33
3.33
10/23/2012
FEDERAL FARM CREDIT BANK
.34% DUE 04/23/2014 CALL
10,000,000
100.00
9,993,750.00
10,000,200.00
6,450.00
34,000.00
0.34
6.67
07/23/2012
FEDERAL FARM CREDIT BANK
.34% DUE 07/16/2014 CALL
2,000,000
100.09
2,000,000.00
2,001,760.00
1,760.00
6,800.00
0.34
133
07/16/2013
FEDERAL FARM CREDIT BANK
.35% DUE 06/19/2014 CALL
7,000,000
100.00
6,993,000.00
7,000,210.00
7,210.00
24,500.00
0.35
4.67
09/19/2012
FEDERAL HOME LOAN BANK
5,000,000
100.20
4,999,150.00
5,009,950.00
10,800.00
17,500.00
.35% DUE 02/25/2014
0.35
3.34
FEDERAL HOME LOAN BANK
.36% DUE 08/20/2014 CALL
4,350,000
100.03
4,350,435.00
4,351,348.50
913.50
15,660.00
0.36
2.90
02/20/2013
FEDERAL HOME LOAN BANK
3,000,000
100.02
3,000,000.00
3,000,660.00
660.00
12,000.00
.4% DUE 07/30/2014 CALL
0.40
2.00
01/30/2013
FEDERAL HOME LOAN BANKS
10,000,000
100.22
10,010,290.00
10,022,400.00
12,110.00
37,500.00
0.37
.375% DUE 01129/2014
6.68
FEDERAL HOME LOAN
MORTGAGE CORP ,625 ° /a DUE
2,200,000
100.65
2,213,728.00
2,214,212.00
484.00
13,750.00
0.62
1.48
12/29/2014
FEDERAL HOME LOAN
2,000,000
100.91
2,018,240.00
2,018,160.00
-80.00
15,000.00
MORTGAGE CORP .75% DUE
0.74
1.35
11/25/2014
FEDERAL HOME LOAN
MORTGAGE CORP 0.400% DUE
4,000,000
100.05
3,999,600.00
4,001,840.00
2,240.00
16,000.00
0.40
2.67
02/27/2014
FEDERAL HOME LOAN
5,000,000
101.20
5,065,500.00
5,060,000.00
- 5,500.00
50,000.00
MORTGAGE CORP 1.00% DUE
0.99
3.37
07/30/2014
January 16, 2013
Page 2 of 5
27
Asset
Units
Price
Tax Cost
Market Value
Gain /Loss
Est. Income
Yield
%Total
Federal Agencies (continued)
FEDERAL HOME LOAN
MORTGAGE CORP 1.00% DUE
8,000,000
101.17
8,103,370.00
8,093,360.00
- 10,010.00
80,000.00
0.99
5.39
08/20/2014
FEDERAL NATIONAL
MORTGAGEASSN.625% DUE
9,000,000
100.67
9,058,230.00
9,060,210.00
11980.00
56,250.00
0.62
6.04
10/30/2014
FEDERAL NATIONAL
MORTGAGE ASSN .75% DUE
8,500,000
100.60
8,529,885.00
8,551,000.00
21,115.00
63,750.00
0.75
5.70
12/18/2013
Subtotal
$85,333,178.00
$85,385,410.50
$52,232.50
$459,210.00
0.54%
56.92%
Time Deposits
ALLY BANK CD 1.00% DUE
06/10/2013
249,000
1.00
249,000.00
249,000.00
0.00
2,490.00
1.00
0.17
AMERICAN EXPRESS
CENTURION CD .75% DUE
245,000
1.00
245,000.00
245,000.00
0.00
1,837.50
0.75
0.16
03/22/2013 INTEREST
SEMI- ANNUALLY
APPLE BANK FOR SAVINGS N Y
250,000
1.00
250,000.00
250,000.00
0.00
1,375.00
0.55
CD .55% DUE 09/12/2014
0.17
BEAL BANK SSB-CD .45% DUE
06/05/2013
250,000
1.00
250,000.00
250,000.00
0.00
1,125.00
0.45
0.17
BEAL BANK USA CD .3% DUE
250,000
1.00
250,000.00
250,000.00
0.00
750.00
06/26/2013 INTEREST AT
0.30
0.17
MATURITY
BMW BANK NORTH AMERICA
249,000
1.00
249,000.00
249,000.00
0.00
2,116.50
0.85
.85% DUE 06/28/2013
0.17
COMPASS BANK CD .75% DUE
240,000
1.00
240,000.00
240,000.00
0.00
1,800.00
0.75
0.16
07/29/2013
DISCOVER BANK CD .95% DUE
06/17/2013
243,000
1.00
243,000.00
243,000.00
0.00
2,308.50
0.95
0.16
EAGLEBANK CD .4% DUE
11/24/2014
250,000
1.00
250,000.00
250,000.00
0.00
11000.00
0.40
0.17
EVERBANKJACKSONVILLE
250,000
1.00
250,000.00
250,000.00
0.00
1375.00
0.55
FL -CD .55% DUE 08/15/2014
0.17
FIFTH THIRD BANK CD
5,090,998
1.00
5,090,997.53
5,090,997.53
0.00
57,019.17
#002 - 0668294635 1.12% DUE
1.12
3.39
05/12/2013 INTEREST
MONTHLY
3anuary 16, 2013
Page 3 of 5
28
Asset
Units
Price
Tax Cost
Market Value
Gain /Loss
Est. Income
Yield
%Total
Time Deposits (continued)
FIFTH THIRD BANK CD
#002 - 0668301516 1.20% DUE
7,136,580
1.00
7,136,579.85
7,136,579.85
0.00
85,638.96
1.20
4.76
05/17/2013 INTEREST
MONTHLY
FIFTH THIRD BANK CD
#002 - 0668396324 0.86% DUE
3,021,858
1.00
3,021,858.00
3,021,858.00
0.00
25,987.98
0.86
2.01
02/27/2014 INTEREST
CAPITALIZED MONTHLY
FIRST NAIL BANK OF OMAHA
250,000
1.00
250,000.00
250,000.00
0.00
1,500.00
0.60
CD 0.60% DUE 06/20/2014
0.17
FIRST NATIONAL BK OMAHA -CD
.6% DUE 10/24/2014 CALL
250,000
1.00
250,000.00
250,000.00
0.00
1,500.00
0.60
0.17
04/24/2013
GE CAPITAL FINANCIAL INC CD
245,000
1.00
245,000.00
245,000.00
0.00
2,205.00
.90% DUE 09/16/2013
0.90
0.16
INTEREST SEMI- ANNUALLY
GE MONEY BANK CD 1.00%
249,000
1.00
249,000.00
249,000.00
0.00
2,490.00
1.00
DUE 06/10/2013
0.17
GOLDMAN SACHS BANK USA CD
245,000
1.00
245,000.00
245,000.00
0.00
2,205.00
.90% DUE 09/23/2013
0.90
0.16
INTEREST SEMI - ANNUALLY
HARRIS BANK CD #6900310796
0.712% DUE 01/24/2014
5,026,722
1.00
5,026,722.26
5,026,722.26
0.00
35,790.26
0.71
3.35
INTEREST CAPITALIZED
QUARTERLY
HARRIS BANK CD #6900311191
5,021,391
1.00
5,021,390.93
5,021,390.93
0.00
28,119.79
0.560/a DUE 02/06/2014
0.56
3.35
INTEREST CAPITALIZED
QUARTERLY
HARRIS BANK CD #6900312041
5,019,039
1.00
5,019,039.10
5,019,039.10
0.00
32,623.75
0.65
0.65% DUE 02/28/2014
3.35
INTEREST CAPITALIZED
QUARTERLY
HUNTINGTON NATIONAL BANK
2,500,000
1.00
2,500,000.00
2,500,000.00
0.00
12,500,00
0.50
1.67
.50% DUE 05/19/2014
HUNTINGTON NATIONAL BANK
2,500,000
1.00
2,500,000.00
2,500,000.00
0.00
13,750.00
0.55
1.67
CD .55% DUE 03/03/2014
HUNTINGTON NATIONAL BANK
2,500,000
1.00
2,500,000.00
2,500,000.00
0.00
16,250.00
0.65
1.67
CD .65% DUE 06/06/2014
HUNTINGTON NATL BANK CD
5,000,000
1.00
5,000,000.00
5,000,000.00
0.00
20,000.00
0.40
3.33
.40% DUE 11/18/2013
HUNTINGTON NATL CD 0.50%
2,500,000
1.00
21500,000.00
2,500,000.00
0100
12,500.00
0.50
DUE 05/27/2014
1.67
January 16, 2013
Page 4 of 5
29
Asset
Units
Price
Tax Cost
Market Value
Gain /Loss
Est. Income
Yield
% Total
Time Deposits (continued)
INVESTORS SAVINGS BK N) -
CD .50% DUE 07/21/2014
250,000
1.00
250,000.00
250,000.00
0.00
1,250.00
0.50
0.17
INTEREST MONTHLY
KEY BANK NA -CD .35% DUE
09/06/2013
1,500,000
1.00
1,500,000.00
1,500,000.00
0.00
5,250.00
035
1.00
KEY BANK, NA .35% DUE
04/24/2014
2,000,000
1.00
2,000,000.00
2,000,000.00
0.00
7,000.00
0.35
1.33
LAKE CITY BANK CD 0.43% DUE
06/19/2013 INTEREST
5,000,000
1.00
5,000,000.00
5,000,000.00
0.00
21,500.00
0.43
3.33
ANNUALLY
MERRICK BANK CD .60% DUE
245,000
1.00
245,000.00
245,000.00
0.00
03/20/2013
1,470.00
0.60
0.16
SAFRA NATIONAL BANK .8%
DUE 12116/2013
249,000
1.00
249,000.00
249,000.00
0.00
1,992.00
0.80
0.17
SALLIE MAE BANK MURRAY
UTAH CD 1.00% DUE
249,000
1.00
249,000.00
249,000.00
0.00
2,490.00
1.00
0.17
11/25/2013
SOVEREIGN BANK CD 0.65%
DUE 06/13/2014
250,000
1.00
250,000.00
250,000.00
0.00
1,625.00
0.65
0.17
VALLEY NATL BK WAYNE -CD
.6% DUE 07/28/2014 INTEREST
250,000
1.00
250,000.00
250,000.00
0.00
1,500.00
0.60
0.17
MONTHLY
Subtotal
$59,024,587.67
$59,024,587.67
$0.00
$410,334.42
0.70%
39.35%
Fixed Income Total
$144,357,765.67
$144,409,998.17
$52,232.50
$869,544.42
0.600%
96.26%
Cash
Money Market
FEDERATED TREASURY
OBLIGATIONS SS FUND #398
5,606,606
1.00
5,606,606.46
5,606,606.46
0.00
560.66
0.01
3.74
Subtotal
$5,606,606.46 ,
$5,606,606.46
$0.00
$560.66
0.010%
3.74%
Cash Total
$5,606,606.46
$5,606,606.46
$0.00
$560.66
0.01%
3.74%
Grand Total
$149,964,372.13
$150,016,604.63
$52,232.50
$870,105.08
0.58%
100.00%
January 16, 2013
Page 5 of 5
30
Appendix 6
City of South Bend, Indiana
1st Source Bank - Interest Earnings Summary - 2012
December 31, 2012
Prepared - January 22, 2013
Earned Paid Financial Investment Checking Total
Month Month Institution Interest Interest Interest
Dec -11
Jan -12
Feb -12
Mar -12
Apr -12
May -12
Jun -12
Jul -12
Aug -12
Sep -12
Oct -12
Nov -12
Jan -12
Feb -12
Mar -12
Apr -12
May -12
Jun -12
Jul -12
Aug -12
Sep -12
Oct -12
Nov -12
Dec -12
1st Source Bank
1 st Source Bank
1st Source Bank
1st Source Bank
1st Source Bank
1st Source Bank
1st Source Bank
1st Source Bank
1st Source Bank
1st Source Bank
1st Source Bank
1st Source Bank
$97,109
10,840
146,648
56,047
86,216
112,417
105,420
43,534
41,043
49,125
46,763
33,827
$9,071
13,714
10,746
11,722
10,002
9,655
15,764
20,981
16,677
15,079
15,860
13,446
$106,180
$24,554
$157,394
$67,769
$96,218
$122,071
$121,184
$64,515
$57,720
$64,204
$62,623
$472272
Total Interest
$828,988
$162,715
$991,702
31
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Appendix 8
BEST PRACTICE
Appropriate Level of Unrestricted Fund Balance in the General Fund (2002 and 2009) (BUDGET
and CAAFR)
Backeround, Accountants employ the term fund balance to describe the net assets of governmental funds
calculated in accordance with generally accepted accounting principles (GAAP). Budget professionals commonly
use this same term to describe the net assets of governmental funds calculated on a government's budgetary
basis. In both cases, fund balance is intended to serve as a measure of the financial resources available
in a governmental fund.
Accountants distinguish up to five separate categories of fund balance, based on the extent to which the
government is bound to honor constraints on the specific purposes for which amounts can be spent: nonspendable
fund balance, restricted fund balance, committed fund balance, assigned fund balance, and unassigned fund
balance,2 The total of the last three categories, which include only resources without a constraint on spending or
for which the constraint on spending is imposed by the government itself, is termed unrestricted fund balance.
It is essential that governments maintain adequate levels of fund balance to mitigate current and future risks (e.g.,
revenue shortfalls and unanticipated expenditures) and to ensure stable tax rates. Fund balance levels are a crucial
consideration, too, in long -term financial planning.
In most cases, discussions of fund balance will properly focus on a government's general fund. Nonetheless,
financial resources available in other funds should also be considered in assessing the adequacy of unrestricted
fund balance (i.e., the total of the amounts reported as committed, assigned, and unassigned fund balance) in the
general fund.
Credit rating agencies monitor levels of fund balance and unrestricted fund balance in a government's general
fund to evaluate a government's continued creditworthiness. Likewise, laws and regulations often govern
appropriate levels of fund balance and unrestricted fund balance for state and local governments.
Those interested primarily in a government's creditworthiness or economic condition (e.g., rating agencies) are
likely to favor increased levels of fund balance. Opposing pressures often come from unions, taxpayers and
citizens' groups, which may view high levels of fund balance as "excessive."
The Government Finance Officers Association (GFOA) recommends that
un u,c mvei of unrestrictea runa natance that should be maintained in t� general -fund 3
be set by the appropriate policy body and should provide both a tempora ramewor and
1 For the sake of clarity, this recommended practice uses the terms GAAP fund balance and budgetary fund balance to
distinguish these two different uses of the same term.
2 These categories are set forth in Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance
Reporting and Governmental Fund Type Definitions, which must be implemented for financial statements for periods ended
June 30, 2011 and later.
3 Sometimes restricted fund balance includes resources available to finance items that typically would require the use of
unrestricted fund balance (e.g., a contingency reserve). In that case, such amounts should be included as part of unrestricted
fund balance for purposes of analysis.
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specific plans for increasing or decreasing the level of unrestricted fund balance, if it is inconsistent with that
The adequacy of unrestricted fund balance in the general fund should be assessed based upon a government's own
specific circumstances. Nevertheless, GFOA recommends, at a minimum, that general- purpose governments,
regardless of size, maintain unrestricted fund balance in their general un of no less t an two moriths ofregular
general fund operating revenues or regular general fund operating expendiiUi7eV_ Fie choice of revenues or
expenditures as a basis of comparison may be dictated by what is more predictable in a goverrunent's particular
circumstances. Furthermore, a government's particular situation often may require a level of unrestricted fund
und
balance in the general fund significantly in excess of this recommended minimum level. In any case, such
measures should be applied within the context of long -term forecasting, thereby avoiding the risk of placing too
much emphasis upon the level of unrestricted fund balance in the general fund at any one time.
In establishing a policy governing the level of unrestricted fund balance in the general fund, a govermnent should
consider a variety of actors, including: -- - -'
• The predictability of its revenues and the volatility of its expenditures (i.e., higher levels of unrestricted
fund balance may be needed if significant revenue sources are subject to unpredictable fluctuations or if
operating expenditures are highly volatile);
• its perceived exposure to significant one -time outlays (e.g., disasters, immediate capital needs, state
budget cuts);
• The potential drain upon general fund resources from other funds as well as the availability of resources
in other un_s i.e., deficits in other funds may require that a higher level of unrestricted fund balance be
maintained in the general fund, just as, the availability of resources in other funds may reduce the amount
of unrestricted fund balance needed in the general fund);'
• Liquidity (i.e., a disparity between when financial resources actually become available to make payments
an a average maturity o related may require that a tg re- TeveT_oTresouces e mintained);
- -- I .�
• Commitments and assignments (i.e., governments may wish to maintain higher levels of unrestricted fund
alance to compensate for any portion of unrestricted fund balance already committed or assigned by the
government for a specific purpose).
Furthermore, governments may deem it appropriate to exclude from consideration resources that have been
committed or assigned to some other purpose and focus on unassigned fund balance rather than on unrestricted
fund balance.
Naturally, any policy addressing desirable levels of unrestricted fund balance in the general fund should be in
conformity with all applicable legal and regulatory constraints. In this case in particular, it is essential that
differences between GAAP fund balance and budgetary fund balance be fully appreciated by all interested parties.
Approved by the GFOA's Executive Board, October, 2009.
" See Recommended Practice 4.1 of the National Advisory Council on State and Local Budgeting governments on the need to
"maintain a prudent level of financial resources to protect against reducing service levels or raising taxes and fees because of
temporary revenue shortfalls or unpredicted one -time expenditures" (Recommended Practice 4.1).
5 In practice, a level of unrestricted fund balance significantly lower than the recommended minimum may be appropriate for
states and America's largest governments (e.g., cities, counties, and school districts) because they often are in a better
position to predict contingencies (for the same reason that an insurance company can more readily predict the number of
accidents for a pool of 500,000 drivers than for a pool of fifty), and because their revenues and expenditures often are more
diversified and thus potentially less subject to volatility.
6 In either case, unusual items that would distort trends (e.g., one -time revenues and expenditures) should be excluded,
whereas recurring transfers should be included. Once the decision has been made to compare unrestricted fund balance to
either revenues or expenditures, that decision should be followed consistently from period to period.
' However, except as discussed in footnote 4, not to a level below the recommended minimum.
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