HomeMy WebLinkAbout2023 Board of Finance Investments ReportTABLE OF CONTENTS
Investment Officers, Advisors, Authorized Investments .............................................................3
Investment Review Meetings .............................................................................................................4
Investment Report (12/31/23) ................................................................................................5 – 20
Year-End Cash Report (12/31/23 – preliminary) .............................................................. 21 – 23
Cash Management & Investment Policies ........................................................................... 24 – 32
INVESTMENT OFFICERS
City Controller:
Director of Treasury:
Kyle J. Willis
Jaime Kelley
INVESTMENT ADVISORS (1ST SOURCE BANK)
Paul W. Gifford, Jr., CFA
Senior Vice President & Chief Investment Officer
Erik Clapsaddle, CFA, CFP ®
Vice President & Sr. Fixed Income Portfolio Manager
Delia Salazar Nicholls
Trust Officer
AUTHORIZED INVESTMENT AMOUNT
Portfolio of $200 million in investments with 1st Source Bank
3
INVESTMENT REVIEW MEETINGS
QUARTER DATE TIME
1ST Quarter 10:00 A.M.
2ND Quarter 10:00 A.M.
3RD Quarter 10:00 A.M.
4TH Quarter
04/17/2024
07/17/2024
10/16/2024
01/18/2025 10:00 A.M.
Investment Review Meetings will be held virtually via Microsoft Teams until further notice.
4
INVESTMENT REPORT (12/31/2023)
5
City of South Bend Corporate Agency
Investment Presentation for
Account 619062011
Prepared by Erik D Clapsaddle, CFA, CFP
ExperienceThe 1st Source Bank Wealth Advisory Services team includes57 professionals and 37 support specialists, with over 1,700 years of combined industry experience and an average of 19 years of experience per team member.8 MBA degrees11 JD degrees5 employees with the designation of CFA®(Chartered Financial Analyst®)2 CPAs (Certified Public Accountant)7 CFP®(CERTIFIEDFINANCIALPLANNER®) designations1 CSOP (Certified Securities Operations Professionals)2 CISPs (Certified IRA Services Professionals)7 CTFAs (Certified Trust and Fiduciary Advisor)Our Wealth Advisory Services team of professionals is here to serve our clients.Page 1 of 12
Market Commentary
As of 12/31/2023
Economic Activity
GDP in the third quarter of 2023 increased by
4.9%, which was the largest increase since 2014
excluding the pandemic and was now the fifth
consecutive quarter of growth despite economists
relentlessly calling for a 2023 recession during the
latter part of 2022. Personal consumption in the
second quarter increased by a notable 3.1% over
the previous quarter—though a disappointing result
relative to the initial forecast of 4%. GDP was
surprisingly led higher from gross private domestic
investment, an increase in nonfarm inventories, and
government consumption.
Labor markets have continued to show changes
throughout the fourth quarter that would favor the
Fed moving to an official approach of nearer-term
rate cuts. The most recent reading of job openings
fell to their lowest level since March 2021 though
they still exceed the number of unemployed people
in the U.S. by 2.3 million but well down from the
peak of 6 million in August 2022. The labor force
participation rate increased to 62.8% in November,
which moved back to its highest-level since February
2020, as 532K re-entered the labor force looking for
employment. Despite labor markets loosening a
little, wage growth continues to be strong at a
3.4% 3-month average annualized rate.
The Fed's favorite inflation gauge, the Core Personal
Consumption Expenditure ("PCE Core") increased by
3.2% year-over-year at its last reading and was
reached its lowest level since March 2021. The
even more encouraging sign was the 0.06% MoM
increase and PCE Core has now averaged a 1.86%
6-month annualized result.
Interest Rates
The Federal Open Market Committee (the "FOMC")
has not raised the Federal Funds Target Rate (the
"Rate") since July 26 and it continues to be
5.25-5.50%. The FOMC continues to focus on
reducing inflation, which has significantly subsided
and to a lesser extent they continue to address
their concerns with the tight labor markets. There
was a notable reverse course in interest rate
forecasts/expectations during the fourth quarter as
the FOMC now believes their target rate will end
2024 at 4.5-4.625%% but was forecasted to end
2024 at a 5-5.25% range at their third quarter
meeting. The yield on the ten-year U.S. Treasury
note hit a long-term high in the fourth quarter of
5.02% and since the moment has retreated to
being well under of 4%.
Credit continues to be the outperforming asset class
for the year within traditional fixed income even has
interest rates have swiftly declined in the fourth
quarter. Through the end of December, the
Bloomberg Corporate Investment Grade Index was
up over 5%, but the Bloomberg Treasury index was
up less than 4%. The best performer within
traditional fixed income for the year has been high
yield corporate bonds as the Bloomberg High Yield
Index has returned around 13% in 2023.
Stock Market
Equity markets finished the year strong with the
NASDAQ (technology) up 43.4% and the S&P 500
up 24.2% not far from its intraday high of 4,818
reached in January 2022. Bloomberg data shows
roughly 71% of stocks have underperformed the
S&P 500 this year with most of the gains coming
from a few large cap growth companies. These
stocks known as the "Magnificent Seven;" Amazon,
Microsoft, Apple, Tesla, Nvidia, Alphabet, and Meta
(Facebook) have collectively risen 73% in 2023 and
represent roughly 30% of the S&P 500 market
value. Small cap companies measured by the Russell
2000 underperformed their large cap counterparts
for the year but did outperform in the fourth
quarter by 4.8%. International equities trailed U.S.
equities by 9.4% for the year as Germany, the
largest economy in Europe, officially entered a
recession.
S&P 500 earnings are expected to grow 1% in
2023 after 4% earnings growth in 2022. For 2024
S&P 500 analysts are forecasting earnings growth to
rebound strongly to 12%. We view this earnings
growth as optimistic in an environment where
current GDP forecasts are for the economy to grow
in the range of 1.0-2.0%. Operating margins are
below record highs seen in 2022 but have remained
stable at a lower level as companies remain
aggressive on trimming expenses. We believe
revenue growth will be more problematic in 2024
and the moderating inflation which limits the ability
of companies to pass along higher costs.
Recent market performance in December has been
supported by Federal Reserve chairman Powell and
his pivot to a dovish stance. A decline in yields led
to outperformance in interest rate sensitive areas of
the market: small cap, real estate, and financials.
Other members of the Federal Reserve pushed back
on the notion of a policy shift and reiterated its
premature to think about interest rate cuts.
Markets are currently forecasting an 85% chance of
an interest rate cut in March and five additional rate
cuts for the remainder of the year.
We believe a more favorable risk reward ratio is
available outside the largest technology companies
and in mid cap and smaller cap companies. For
equity markets to continue their strong
performance in 2024 we will need to see recent
improvements in mid cap and small cap stocks
extend into next year.
January 16, 2024
Page 2 of 12
Interest Rates & Inflation Data as of: January 12, 2023Page 3 of 12
Labor & Economic GrowthData as of: January 12, 2024•Third quarter GDP grew by 4.9% in the U.S., which was thelargest increase since 2014 excluding the pandemic, and was nowthe fifth consecutive quarter of strong growth despite economistsrelentlessly calling for a recession•Personal Consumption increased 3.1% over the previous quarter, asforecasted, and was the largest contributor to GDP as it accounted for43% of the total. Gross private domestic investment also contributed1.74% points to GDP.•A change in nonfarm inventories was another large contributor toGDP in the third quarter as it contributed 1.24 percentage points andgovernment consumption (mostly state & local and national defense)contributed 0.99 points.•Private investment into residential real estate during the third quarterwas positive for the first time since 1Q2021 after nine quarters ofnegative contribution to GDP. The only notable detractor within GDPwere imports of goods which detracted -0.64% points from GDP.Source: Bureau of Labor StatisticsPage 4 of 12
Account Summary as of 1/16/2024
City of South Bend Corporate Agency
Account Statistics
Total Market Value $198,835,734.77
Total Unrealized Gain/Loss -$746,330.22
Estimated Annual Income $5,989,870.09
Estimated Portfolio Yield 3.01%
YTD Long Term Gain/Loss $0.00
YTD Short Term Gain/Loss $0.00
Policy Account Income
Minor Account Type AGENCY
Investment Officer PAUL GIFFORD
Administrative Officer DELIA SALAZAR NICHOLLS
Asset Allocation
% TotalMarket ValueAsset Category
10.0 19,834,448.92Cash
90.0 179,001,285.85Fixed Income
100.0%$198,835,734.77Total
Top 5 Holdings (Cash Excluded)
Asset Units Price Tax Cost Market Value YieldEst. IncomeGain/Loss % Total
U.S. Treasury Notes 2.875%
5/31/25
3.46 2.92 201,250.00-60,472.13 6,882,023.99 6,942,496.12 97.97 7,000,000
Wells Fargo Bank CD 4.800%
5/02/25
3.26 4.81 312,000.00-13,282.26 6,486,717.74 6,500,000.00 99.65 6,500,000
U.S. Treasury Notes 2.250%
1/31/24
3.04 2.23 135,000.00 31,287.85 6,053,216.74 6,021,928.89 99.87 6,000,000
U.S. Treasury Notes 2.125%
3/31/24
3.02 2.13 127,500.00 11,544.83 5,996,977.87 5,985,433.04 99.34 6,000,000
U.S. Treasury Notes 2.375%
8/15/24
3.00 2.39 142,500.00 7,740.27 5,967,511.47 5,959,771.20 98.48 6,000,000
$31,409,629.25 $31,386,447.81 -$23,181.44 $918,250.00 2.93%Total 15.79%
Market values include accruals.
January 16, 2024 Account 619062011
Page 5 of 12
Holdings Detail as of 1/16/2024
City of South Bend Corporate Agency
Asset CUSIP Quantity Tax Cost YieldEst. IncomeGain/LossMarket Value
Cash
Taxable Money Market Funds
Federated Hermes Govt Obl 608919718 3,117,822 3,117,821.85 3,129,578.92 11,757.07 167,402.09 5.35%
U.S. Treasury Bills
U.S. Treasury Bills 4/25/24 912797HG5 7,000,000 6,836,813.19 6,899,270.00 62,456.81 0.00 0.00%
U.S. Treasury Bills 5/09/24 912797HQ3 5,000,000 4,909,243.51 4,918,550.00 9,306.49 0.00 0.00%
U.S. Treasury Bills 6/27/24 912796Y45 5,000,000 4,876,219.44 4,887,050.00 10,830.56 0.00 0.00%
$19,740,097.99 $19,834,448.92 $94,350.93 $167,402.09 0.84%Total Cash
Fixed Income
Time Deposits
Ally Bank CD 4.700% 12/23/24 02007GH55 250,000 250,000.00 249,668.22 -331.78 11,750.00 4.71%
American Expr Bk CD 3.300% 7/01/24 02589AD41 250,000 250,000.00 248,341.54 -1,658.46 8,250.00 3.32%
Bank of America CD 5.300% 11/24/25 06051V5E2 892,000 892,000.00 905,344.93 13,344.93 47,276.00 5.22%
Bank of America CD 5.400% 5/22/25 06051V5G7 1,254,000 1,254,000.00 1,268,926.55 14,926.55 67,716.00 5.34%
Bank of America CD 5.450% 5/01/25 06051V4M5 5,000,000 5,000,000.00 5,076,500.00 76,500.00 272,500.00 5.37%
Bmo Bank CD 5.050% 12/16/24 05610LEJ9 2,000,000 2,000,000.00 2,006,241.37 6,241.37 101,000.00 5.03%
Bmo Bank CD 5.200% 11/24/25 05610LDU5 1,000,000 1,000,000.00 1,013,048.22 13,048.22 52,000.00 5.13%
Bmo Harris Bank CD 0.500% 3/28/25 05600XAY6 1,000,000 1,000,000.00 946,559.18 -53,440.82 5,000.00 0.53%
Bmo Harris Bank CD 0.700% 4/28/25 05600XCV0 3,000,000 3,000,000.00 2,841,080.14 -158,919.86 21,000.00 0.74%
Bmo Harris Bank CD 4.900% 5/28/24 05600XPB0 1,000,000 1,000,000.00 1,009,016.99 9,016.99 49,000.00 4.86%
Bmo Harris Bank CD 5.000% 7/14/25 05600XTB6 2,500,000 2,500,000.00 2,561,146.23 61,146.23 125,000.00 4.88%
Bmo Harris Bk CD 0.500% 2/27/25 05600XAV2 1,000,000 1,000,000.00 950,293.84 -49,706.16 5,000.00 0.53%
Bmo Harris Bk CD 4.850% 5/27/25 05600XQK9 2,000,000 2,000,000.00 2,007,767.67 7,767.67 97,000.00 4.83%
Bmo Harris Bk CD 4.900% 6/23/25 05600XRW2 2,000,000 2,000,000.00 2,002,455.34 2,455.34 98,000.00 4.89%
BMW Bank CD 5.150% 5/18/26 05580A4M3 250,000 250,000.00 253,603.12 3,603.12 12,875.00 5.08%
Capital One Bank CD 3.300% 7/01/24 14042THC4 250,000 250,000.00 248,341.54 -1,658.46 8,250.00 3.32%
Capital One CD 3.300% 7/01/24 14042RSH5 250,000 250,000.00 248,341.54 -1,658.46 8,250.00 3.32%
City Natl Bank CD 4.900% 11/24/25 178180GS8 199,000 199,000.00 200,428.14 1,428.14 9,751.00 4.87%
City Natl Bk-bev CD 4.350% 1/26/26 178180GW9 250,000 250,000.00 252,709.66 2,709.66 10,875.00 4.30%
January 16, 2024 Account 619062011Page 6 of 12
Holdings Detail as of 1/16/2024
City of South Bend Corporate Agency
Asset CUSIP Quantity Tax Cost YieldEst. IncomeGain/LossMarket Value
Fixed Income
Time Deposits (continued)
Comerica Bank CD 5.250% 9/30/24 200339FB0 250,000 249,937.50 253,958.18 4,020.68 13,125.00 5.17%
First Fed Svg Bk CD 5.250% 10/14/25 32021YEF6 260,000 260,000.00 261,457.99 1,457.99 13,650.00 5.22%
First Internet CD 4.450% 6/16/25 32056GDS6 150,000 150,000.00 148,791.00 -1,209.00 6,675.00 4.49%
Flagstar Bank CD 0.400% 9/30/24 33847E4E4 1,000,000 1,000,000.00 968,510.68 -31,489.32 4,000.00 0.41%
Flagstar Bank CD 0.500% 7/31/24 33847E3X3 1,000,000 1,000,000.00 977,843.97 -22,156.03 5,000.00 0.51%
Flagstar Bank NA CD 4.800% 6/30/25 33847GBT8 2,000,000 2,000,000.00 1,997,828.22 -2,171.78 96,000.00 4.81%
Goldman Sachs Bk CD 3.350% 7/08/24 38150VDH9 250,000 250,000.00 248,130.62 -1,869.38 8,375.00 3.38%
Manuf & Traders CD 4.900% 12/09/24 564759RJ9 250,000 250,000.00 250,699.28 699.28 12,250.00 4.89%
Morgan Stanle Bk CD 4.850% 3/30/27 61768ERB1 250,000 250,000.00 253,955.51 3,955.51 12,125.00 4.77%
Morgan Stanley Bk CD 4.850% 3/30/27 61690U3M0 250,000 250,000.00 253,955.51 3,955.51 12,125.00 4.77%
Oceanfirst Bank CD 3.250% 7/01/24 67523TBE2 250,000 250,000.00 248,278.90 -1,721.10 8,125.00 3.27%
Popular Bank CD 4.300% 12/11/25 73317ABH4 250,000 250,000.00 248,258.56 -1,741.44 10,750.00 4.33%
Sallie Mae Bk CD 4.900% 12/08/25 795451CL5 250,000 250,000.00 251,316.78 1,316.78 12,250.00 4.87%
Southern Bank CD 4.650% 12/09/24 843383CG3 250,000 250,000.00 249,009.90 -990.10 11,625.00 4.67%
Southern Sts Bank CD 0.500% 6/12/24 843879DC8 250,000 250,000.00 245,323.42 -4,676.58 1,250.00 0.51%
Tristate Cap Bank CD 5.000% 3/30/26 89677DJE7 250,000 250,000.00 254,315.89 4,315.89 12,500.00 4.92%
UBS Bank USA CD 4.350% 1/20/26 90355GAM8 250,000 250,000.00 248,339.86 -1,660.14 10,875.00 4.38%
United Fid Bank CD 5.000% 7/14/25 910286GQ0 2,500,000 2,500,000.00 2,509,798.97 9,798.97 125,000.00 4.98%
United Fidelit Bk CD 4.600% 12/29/26 910286GL1 2,000,000 2,000,000.00 1,989,740.82 -10,259.18 92,000.00 4.62%
United Fidelit Bk CD 4.900% 3/30/27 910286GA5 500,000 500,000.00 502,729.73 2,729.73 24,500.00 4.87%
US Bank CD 5.500% 12/03/24 90355UBG9 2,000,000 2,000,000.00 2,014,353.42 14,353.42 110,000.00 5.46%
US Bk Natl Assn CD 5.400% 12/13/24 90355UBM6 2,000,000 2,000,000.00 2,010,560.82 10,560.82 108,000.00 5.37%
Wells Fargo Bank CD 2.950% 3/27/24 949763YW0 1,000,000 1,000,000.00 996,793.97 -3,206.03 29,500.00 2.96%
Wells Fargo Bank CD 4.400% 1/27/25 9497635M4 1,000,000 1,000,000.00 994,740.41 -5,259.59 44,000.00 4.42%
Wells Fargo Bank CD 4.750% 12/16/24 9497634M5 1,750,000 1,750,000.00 1,750,392.19 392.19 83,125.00 4.75%
Wells Fargo Bank CD 4.800% 5/02/25 949764BP8 6,500,000 6,500,000.00 6,486,717.74 -13,282.26 312,000.00 4.81%
Wells Fargo Bank CD 4.800% 5/28/24 9497633V6 5,000,000 5,000,000.00 5,004,720.55 4,720.55 240,000.00 4.80%
January 16, 2024 Account 619062011Page 7 of 12
Holdings Detail as of 1/16/2024
City of South Bend Corporate Agency
Asset CUSIP Quantity Tax Cost YieldEst. IncomeGain/LossMarket Value
Fixed Income
Time Deposits (continued)
Wells Fargo Bank CD 4.900% 5/23/25 949764CT9 625,000 625,000.00 625,461.99 461.99 30,625.00 4.90%
Wells Fargo Bank CD 5.200% 1/06/25 949764CW2 500,000 500,000.00 500,774.86 774.86 26,000.00 5.19%
Wells Fargo Bank CD 5.200% 1/21/25 949764DM3 3,000,000 3,000,000.00 3,012,582.33 12,582.33 156,000.00 5.18%
Wells Fargo Bank CD 5.300% 11/14/25 949764HQ0 2,000,000 2,000,000.00 2,022,492.33 22,492.33 106,000.00 5.24%
Wells Fargo Bank CD 5.400% 10/14/25 949764GM0 600,000 600,000.00 604,881.53 4,881.53 32,400.00 5.36%
US Treasury
U.S. Treasury Notes 2.125% 3/31/24 912828W71 6,000,000 5,985,433.04 5,996,977.87 11,544.83 127,500.00 2.13%
U.S. Treasury Notes 2.125% 7/31/24 9128282N9 5,000,000 4,971,786.71 4,969,827.99 -1,958.72 106,250.00 2.14%
U.S. Treasury Notes 2.250% 1/31/24 912828V80 6,000,000 6,021,928.89 6,053,216.74 31,287.85 135,000.00 2.23%
U.S. Treasury Notes 2.375% 8/15/24 912828D56 6,000,000 5,959,771.20 5,967,511.47 7,740.27 142,500.00 2.39%
U.S. Treasury Notes 2.750% 2/15/24 912828B66 5,000,000 5,019,883.74 5,045,619.84 25,736.10 137,500.00 2.73%
U.S. Treasury Notes 2.875% 5/31/25 9128284R8 7,000,000 6,942,496.12 6,882,023.99 -60,472.13 201,250.00 2.92%
U.S. Treasury Notes 4.250% 10/15/25 91282CFP1 5,000,000 4,926,637.25 5,052,654.10 126,016.85 212,500.00 4.21%
U.S. Treasury Notes 4.375% 10/31/24 91282CFQ9 5,000,000 4,969,842.43 5,027,071.15 57,228.72 218,750.00 4.35%
U.S. Treasury Notes 4.500% 11/15/25 91282CFW6 2,000,000 1,977,539.05 2,024,907.91 47,368.86 90,000.00 4.44%
U.S. Treasury Notes 4.500% 11/30/24 91282CFX4 5,000,000 4,965,474.35 5,014,349.18 48,874.83 225,000.00 4.49%
Government Agency
FFCB 0.330% 6/03/24 3133EME40 3,000,000 3,000,000.00 2,941,640.00 -58,360.00 9,900.00 0.34%
FFCB 0.340% 4/22/24 3133EMXB3 5,000,000 4,999,250.00 4,934,875.00 -64,375.00 17,000.00 0.34%
FFCB 0.420% 9/09/24 3133EL6E9 2,000,000 2,000,000.00 1,943,413.33 -56,586.67 8,400.00 0.43%
FFCB 0.600% 6/16/25 3133EMH47 2,000,000 2,000,000.00 1,893,640.00 -106,360.00 12,000.00 0.63%
FFCB 0.900% 6/15/26 3133EMH21 1,000,000 1,000,000.00 924,120.00 -75,880.00 9,000.00 0.97%
FFCB 1.670% 3/08/24 3133ENQX1 3,000,000 3,000,000.00 2,999,935.83 -64.17 50,100.00 1.67%
FFCB 2.190% 3/21/25 3133ENSK7 1,000,000 1,000,000.00 978,113.33 -21,886.67 21,900.00 2.24%
FFCB 5.070% 1/17/25 3133EN5Y2 750,000 750,499.89 766,497.50 15,997.61 38,025.00 4.96%
FHLB 0.370% 3/13/24 3130ANSW1 3,000,000 3,000,000.00 2,978,410.00 -21,590.00 11,100.00 0.37%
FHLB 1.000% 11/15/24 3130APRF4 500,000 489,174.89 484,570.56 -4,604.33 5,000.00 1.03%
FHLB 1.000% 8/12/26 3130ANET3 5,000,000 5,000,000.00 4,626,272.22 -373,727.78 50,000.00 1.08%
January 16, 2024 Account 619062011Page 8 of 12
Holdings Detail as of 1/16/2024
City of South Bend Corporate Agency
Asset CUSIP Quantity Tax Cost YieldEst. IncomeGain/LossMarket Value
Fixed Income
Government Agency (continued)
FHLB 1.610% 9/04/24 3130AQV26 3,000,000 2,969,083.28 2,953,347.50 -15,735.78 48,300.00 1.64%
FHLB 2.000% 3/28/24 3130ARE31 900,000 900,000.00 899,202.00 -798.00 18,000.00 2.00%
FHLB 3.000% 5/17/24 3130ARV65 2,000,000 2,000,000.00 1,991,273.33 -8,726.67 60,000.00 3.01%
FHLB 4.500% 12/12/25 3130ATUC9 1,750,000 1,764,578.66 1,766,563.75 1,985.09 78,750.00 4.46%
FHLB 5.000% 12/12/24 3130ATXG7 1,500,000 1,500,000.00 1,501,568.33 1,568.33 75,000.00 4.99%
FHLB 5.000% 7/01/25 3130AYDF0 5,000,000 5,000,000.00 5,009,255.56 9,255.56 250,000.00 4.99%
FHLB 6.000% 7/27/26 3130AWML1 2,000,000 2,000,000.00 2,056,453.33 56,453.33 120,000.00 5.84%
FHLMC MTN 0.450% 9/11/24 3134GWN44 5,000,000 5,000,000.00 4,858,875.00 -141,125.00 22,500.00 0.46%
FHLMC MTN 1.850% 3/22/24 3134GXMM3 3,000,000 3,000,000.00 2,996,802.50 -3,197.50 55,500.00 1.85%
FHLMC MTN 2.850% 6/21/24 3134GXWD2 5,000,000 4,999,150.00 4,954,758.33 -44,391.67 142,500.00 2.88%
FHLMC MTN 5.000% 4/24/26 3134GYQC9 3,000,000 3,000,000.00 3,018,546.67 18,546.67 150,000.00 4.97%
FHLMC MTN 5.200% 10/25/24 3134GYDF6 1,000,000 1,000,000.00 1,009,046.67 9,046.67 52,000.00 5.15%
FHLMC MTN 6.000% 5/28/27 3134H1JN4 2,000,000 2,000,000.00 2,014,460.00 14,460.00 120,000.00 5.96%
FNMA 0.420% 11/18/24 3135G06E8 2,000,000 1,999,500.00 1,931,703.33 -67,796.67 8,400.00 0.43%
FNMA 0.625% 12/30/25 3135GABA8 2,000,000 2,000,000.00 1,857,251.39 -142,748.61 12,500.00 0.67%
$179,841,967.00 $179,001,285.85 $-840,681.15 $5,822,468.00 3.25%Total Fixed Income
Total Portfolio $199,582,064.99 $198,835,734.77 $-746,330.22 $5,989,870.09 3.01%
* Market values include accruals.
January 16, 2024 Account 619062011Page 9 of 12
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
Jan 2024
Feb 2024
Mar 2024
Apr 2024
May 2024
Jun 2024
Jul 2024
Aug 2024
Sep 2024
Oct 2024
Nov 2024
Dec 2024
All Others
Maturity Ladder as of 1/16/2024
City of South Bend Corporate Agency
Par Value of Maturing Assets Over Time
Par Value of Maturing Assets Per Period
Jan 2024 Feb 2024 Mar 2024 Apr 2024 May 2024 Jun 2024
0 0 0 0 0 0All Others
0 0 1,000,000 0 6,000,000 250,000Time Deposits
6,000,000 5,000,000 6,000,000 0 0 0US Treasury
0 0 9,900,000 5,000,000 2,000,000 8,000,000Government Agency
6,000,000 5,000,000 16,900,000 5,000,000 8,000,000 8,250,000
Jul 2024 Aug 2024 Sep 2024 Oct 2024 Nov 2024 Dec 2024
0 0 0 0 0 0All Others
2,250,000 0 1,250,000 0 0 8,500,000Time Deposits
5,000,000 6,000,000 0 5,000,000 5,000,000 0US Treasury
0 0 10,000,000 1,000,000 2,500,000 1,500,000Government Agency
7,250,000 6,000,000 11,250,000 6,000,000 7,500,000 10,000,000
January 16, 2024 Account 619062011Page 10 of 12
Performance Summary as of 12/31/2023
City of South Bend Corporate Agency
Return Details
3 Month 1 Year 3 Year
Since
Inception5 Year
Total Managed 1.82% 4.88% 0.77% 1.35% 1.02%
Benchmark - Merrill 1-3 Yr Treasury 2.49% 4.26%-0.04% 1.30% 0.96%
January 16, 2024 Account 619062011
Page 11 of 12
Economic UpdatesOur 1st Source email newsletter is focused on market insights for your investments. Stay connected with regular communications from our local investment team.Page 12 of 12
Investment & Administrative Officers
Paul W. Gifford, Jr., CFA, Senior Vice President and Chief Investment Officer
Paul leads the investment’s strategy for our clients. He has 35 years of investment management experience.
Prior to joining 1st Source in April 2000, he worked for Bremer Trust, N.A. in St. Cloud, Minnesota. He has
worked in sales, portfolio management, and product development in investments since 1989. Paul serves the
community with organizations such as the CFA Institute, Christ the King Lutheran Church, and the South
Bend Medical Foundation. Paul received his B.S. in Finance (magna cum laude) from the University of
Minnesota in Mankato, Minnesota.
office: (574) 235-2751
mobile: (574) 274-2246
Giffordp@1stsource.com
Erik Clapsaddle, CFA, CFP® Vice President and Senior Fixed Income Portfolio Manager
Erik joined 1st Source in 2015 after working with Comerica in Detroit as a Senior Fixed Income Analyst &
Strategist for seven years, and prior as a Closely-Held Investment Analyst for two years. He worked as a
manager of fixed income analytics and worked closely with the capital markets and investment banking
businesses. His work has focused on credit analytics, valuation, interest rate strategies, and macro-strategy.
Erik has developed and implemented tailored portfolio asset allocation strategies, which were focused on
fixed income, for a wide array of clients with a large range of financial instruments.
He earned a B.S. in Marketing with Minors in Finance and Music Industry from York College of
Pennsylvania.office: (574) 235-2754
mobile: (248) 808-4281
Clapsaddlee@1stsource.com
Investment & Administrative Officers
Delia Salazar, Trust Officer
Delia joined the 1st Source family in 2022 first working in our Personal Trust Tax group where she gained
valuable insight into trusts and estates. With her past experience working alongside attorneys in a legal
setting, Personal Trust Administration appealed to her, and she joined that team serving clients more
directly.
Delia earned her B.S. in Communication at the University of Indianapolis in 2004, a B.S. in Psychology from
The University of Michigan-Flint in 2012 and attended law school. This unique combination of education,
paired with years of customer service experience allows Delia to truly understand and provide clients with the
utmost care. As a Plymouth native, Delia is looking forward to developing relationships with clients and
reconnecting with the northern Indiana community. Delia is currently working toward her Certified Trust and
Financial Advisor (CTFA) certification.
office: (574) 235-2465
NichollsD@1stsource.com
12/31/2023 CASH REPORT
14
City of South Bend
Report of Changes in Cash Balance
January 1, 2023 through December 31, 2023
Plus/ (Minus)Ending Variance
1/1 Beginning 2023 YTD 2023 YTD Accrual Surplus Cash Balance Cash Reserve Above/(Below)
Cash Balance Revenue Expenditures Adjustments (Deficit)12/31/2023 Requirement Reserve Req.
City Controlled Funds
101 General Fund $91,411,451.81 $108,019,869.13 $106,532,567.14 ($638,197.45)$849,104.54 $92,260,556.35 53,266,283.57 $38,994,272.78
Special Revenue Funds
102 Rainy Day 11,026,118.28 277,122.49 -27,843.20 304,965.69 11,331,083.97 3,195,977.01 8,135,106.96
201 Parks & Recreation 6,223,908.52 22,279,583.06 20,047,243.54 70,068.84 2,302,408.36 8,526,316.88 5,011,810.89 3,514,506.00
202 Motor Vehicle Highway 5,878,351.56 8,320,956.59 10,538,217.82 21,515.12 (2,195,746.11)3,682,605.45 2,634,554.46 1,048,051.00
209 Studebaker-Oliver Revitalizing Grants 657,860.04 16,072.79 25,657.63 1,661.23 (7,923.61)649,936.43 - -
210 Economic Development State Grants (75,902.58)76,650.00 144,348.00 -(67,698.00)(143,600.58)- -
211 Dept of Community Investment Operating 23,295.91 3,869,868.04 4,404,643.56 (3,441.40)(538,216.92)(514,921.01)- -
212 Dept of Community Investment Grants (155,884.81)4,278,048.04 4,310,456.71 (143,029.03)(175,437.70)(331,322.51)- -
216 Police State Seizures 199,089.77 56,481.96 -502.76 56,984.72 256,074.49 - -
217 Gift, Donation, Bequest 894,756.97 1,918,328.83 147,483.41 17,277.76 1,788,123.18 2,682,880.15 - -
219 Unsafe Building 822,291.35 89,607.63 17,500.00 1,776.44 73,884.07 896,175.42 - -
220 Law Enforcement Continuing Education 717,743.19 977,312.23 709,475.59 (3,773.06)264,063.58 981,806.77 177,368.90 804,437.87
221 Rental Units Regulation 123,526.05 155,372.99 65,374.87 (4,274.71)85,723.41 209,249.46 - -
227 Loss Recovery 1,052,928.88 1,111,893.47 -1,056.80 1,112,950.27 2,165,879.15 - -
230 Code Enforcement 497,494.64 3,277,009.28 3,865,481.20 (39,145.15)(627,617.07)(130,122.43)- -
249 Local Income Tax - Public Safety 2,786,001.24 12,845,263.17 9,498,558.16 7,038.61 3,353,743.62 6,139,744.86 - -
251 Local Road & Street 2,380,084.91 2,316,428.21 3,372,744.63 60,585.83 (995,730.59)1,384,354.32 843,186.16 541,168.16
257 LOIT Special Distribution 248,242.70 3,125.12 189,096.47 4,941.33 (181,030.02)67,212.68 - -
258 Human Rights Federal Grants 315,523.02 35,100.49 196,769.65 490.67 (161,178.49)154,344.53 - -
263 American Rescue Plan 10,879,459.73 141,055.79 945,226.76 29,364.90 (774,806.07)10,104,653.66 - -
264 COVID-19 Response (52,920.76)343,547.19 383,404.75 (11,728.61)(51,586.17)(104,506.93)- -
265 Local Road & Bridge Grant 2,477,053.84 1,049,040.11 3,105,995.99 6,255.07 (2,050,700.81)426,353.03 - -
266 MVH Restricted 1,971,069.13 3,309,903.42 4,412,010.46 (24,447.95)(1,126,554.99)844,514.14 - -
289 Haz-Mat 31,205.77 3,159.30 -(2,296.20)863.10 32,068.87 - -
291 Indiana River Rescue 389,572.24 160,497.65 91,078.42 1,083.73 70,502.96 460,075.20 22,769.61 437,305.60
295 COPS MORE Grant 20,812.53 63.93 --63.93 20,876.46 - -
299 Police Federal Drug Enforcement 118,593.17 158,311.56 75,609.00 (1,789.84)80,912.72 199,505.89 18,902.25 180,603.64
404 Local Income Tax - Certified Shares 16,451,802.78 (19,603.13)14,394,532.14 (2,842.95)(14,416,978.22)2,034,824.56 - -
408 Local Income Tax - Economic Development 23,374,857.37 18,315,157.17 14,505,009.27 233,118.63 4,043,266.53 27,418,123.90 7,252,504.64 20,165,619.27
410 Urban Development Action Grant 397,517.44 8,576.80 338,253.20 1,003.81 (328,672.59)68,844.85 - -
655 Project ReLeaf 353,065.11 471,926.41 337,286.80 (14.95)134,624.66 487,689.77 84,321.70 403,368.07
725 Morris / Palais Box Office 1,622,910.78 --(2,152,194.17)(2,152,194.17)(529,283.39)(529,283.39) -
730 City Cemetery 30,539.67 767.56 -77.12 844.68 31,384.35 - -
731 Bowman Cemetery 480,425.06 12,074.66 -1,213.17 13,287.83 493,712.89 400,000.00 93,712.89
754 Industrial Revolving Fund 4,731,022.27 1,077,615.38 84,933.50 (2,735,105.50)(1,742,423.62)2,988,598.65 - 2,988,598.65
Total Special Revenue Funds $96,892,415.77 $86,936,318.19 $96,206,391.53 ($4,637,208.50)($13,907,281.84)$82,985,133.93 $19,112,112.21 $38,312,478.09
Debt Service Funds
312 2017 Parks Bond Debt Service 196,572.04 1,135,938.73 1,179,165.00 -(43,226.27)153,345.77 - 153,345.77
350 2018 Fire Station #9 Debt Service --342,856.27 -(342,856.27)(342,856.27)342,856.27 (685,712.54)
672 Century Center Energy Conservation Debt Service 176,962.17 263,591.43 407,917.46 319.43 (144,006.60)32,955.57 - 32,955.57
752 South Bend Redevelopment Authority 258,752.91 3,064,900.47 3,793,967.76 -(729,067.29)(470,314.38)(470,314.38) -
755 South Bend Building Corporation 211,907.61 2,221,241.06 2,200,767.50 -20,473.56 232,381.17 232,381.17 -
756 2015 Smart Streets Bond Debt Service Reserve 1,746,446.49 1,714,084.25 1,709,318.76 -4,765.49 1,751,211.98 1,751,211.98 -
757 2015 Parks Bond Debt Service 590,147.84 312,237.43 375,581.26 -(63,343.83)526,804.01 526,804.01 -
760 2017 Eddy Street Commons Bond Debt Service 3,668,799.09 1,930,047.33 1,929,875.00 -172.33 3,668,971.42 2,500,000.00 1,168,971.42
Total Debt Service Funds $6,849,588.15 $10,642,040.70 $11,939,449.01 $319.43 ($1,297,088.88)$5,552,499.27 $4,882,939.05 $669,560.22
Capital Funds
287 Fire Department Capital 3,856,779.11 2,057,341.07 5,442,036.97 5,340.10 (3,379,355.80)477,423.31 - -
401 Coveleski Stadium Capital 4,226.09 31,684.50 33,159.40 10.67 (1,464.23)2,761.86 - -
406 Cumulative Capital Development 288,975.57 629,162.05 628,673.87 219.05 707.23 289,682.80 - -
407 Cumulative Capital Improvement 359,020.22 101,335.65 250,996.40 1,007.70 (148,653.05)210,367.17 - -
412 Major Moves Construction 1,572,299.94 778,798.03 759,055.54 3,969.14 23,711.63 1,596,011.57 - -
413 Professional Sports Convention Development Area 1,466,302.12 2,069,138.79 3,568,457.34 284,411.13 (1,214,907.42)251,394.70 - -
416 Morris Performing Arts Center Capital 1,368,109.91 329.14 1,440,953.97 (145,531.36)(1,586,156.19)(218,046.28)- -
450 Palais Royale Historic Preservation 108,786.08 18,550.25 -274.70 18,824.95 127,611.03 - -
451 2018 Fire Station #9 Bond Capital 319,451.59 8,028.89 -806.68 8,835.57 328,287.16 - -
453 Zoo Bond Capital 4,467,832.71 121.25 4,467,954.50 -(4,467,833.25)(0.54)- -
455 2021 Infrastructure Bond Capital 2,302,010.16 43,760.09 1,236,390.49 (191,505.04)(1,384,135.44)917,874.72 - -
471 2017 Parks Bond Capital 2,587,911.37 38,042.75 780,322.24 (480,053.29)(1,222,332.78)1,365,578.59 - -
759 2017 Eddy Street Commons Bond Capital 25,764.24 1.20 --1.20 25,765.44 - -
Total Capital Funds $18,727,469.11 $5,776,293.66 $18,608,000.72 ($521,050.52)($13,352,757.58)$5,374,711.53 --
Plus/ (Minus)Ending Variance
1/1 Beginning 2023 YTD 2023 YTD Accrual Surplus Cash Balance Cash Reserve Above/(Below)
Enterprise Funds Cash Balance Revenue Expenditures Adjustments (Deficit)12/31/2023 Requirement Reserve Req.
600 Consolidated Building 2,112,163.65 2,148,665.91 2,175,719.60 5,492.51 (21,561.18)2,090,602.47 543,929.90 1,546,672.57
601 Parking Garages 864,960.88 932,779.69 1,253,861.76 16,108.74 (304,973.33)559,987.55 313,465.44 246,522.11
602 Morris Performing Arts Center Operations 435,479.03 882,667.56 1,390,779.90 461,240.25 (46,872.09)388,606.94 139,077.99 249,528.95
610 Solid Waste Operations 294,832.02 8,224,054.64 7,503,159.22 (138,452.85)582,442.57 877,274.59 750,315.92 126,958.67
611 Solid Waste Capital 1,582,026.77 901,599.27 900,883.76 -715.51 1,582,742.28 - -
620 Water Works Operations 4,758,782.95 22,183,456.79 18,861,893.93 (146,946.22)3,174,616.64 7,933,399.59 943,094.70 6,990,304.89
622 Water Works Capital 11,059,854.29 96,489.30 4,237,906.91 (293,707.83)(4,435,125.44)6,624,728.85 - -
624 Water Works Customer Deposit 1,315,511.44 32,979.43 -(4,117.39)28,862.04 1,344,373.48 1,344,373.48 -
625 Water Works Sinking (Debt Service)2,273,787.36 2,790,130.46 1,401,674.98 (10,636.70)1,377,818.78 3,651,606.14 - 3,651,606.14
626 Water Works Bond Reserve 1,432,109.47 36,636.60 -3,530.19 40,166.79 1,472,276.26 1,472,276.26 -
629 Water Works Operations & Maintenance Reserve 2,946,775.39 74,062.14 -7,441.21 81,503.35 3,028,278.74 3,144,277.72 (115,998.98)
640 Sewer Repair Insurance 1,951,962.78 757,025.93 917,061.67 13,601.11 (146,434.63)1,805,528.15 229,265.42 1,576,262.73
641 Sewage Works Operations 13,821,062.52 43,361,031.20 36,921,307.89 (273,582.97)6,166,140.34 19,987,202.86 1,846,065.39 18,141,137.47
642 Sewage Works Capital 15,204,814.68 691,587.84 3,265,885.44 51,093.00 (2,523,204.60)12,681,610.08 - 12,681,610.08
643 Sewage Works Operations & Maintenance Reserve 5,586,493.45 140,406.90 -14,107.04 154,513.94 5,741,007.39 6,154,782.03 (413,774.64)
649 Sewage Sinking (Debt Service)3,631,819.04 9,864,622.08 6,100,100.82 4,508.24 3,769,029.50 7,400,848.54 - 7,400,848.54
653 Sewage Debt Service Reserve 3,773,871.30 94,849.76 -9,529.79 104,379.55 3,878,250.85 3,878,250.85 -
654 Sewage Works Customer Deposit 1,185,441.52 31,772.81 -138,190.01 169,962.82 1,355,404.34 1,355,404.34 -
667 Storm Sewer 1,285,692.83 1,390,709.73 676,423.20 155,347.76 869,634.29 2,155,327.12 - 2,155,327.12
670 Century Center 945,928.24 4,232,734.60 4,576,738.32 (639,799.09)(983,802.81)(37,874.57)1,144,184.58 (1,182,059.15)
671 Century Center Capital 986,966.11 523,877.91 415,616.64 2,492.13 110,753.40 1,097,719.51 800,000.00 297,719.51
Total Enterprise Funds $77,450,335.72 $99,392,140.55 $90,599,014.04 ($624,561.07)$8,168,565.44 $85,618,901.16 $24,058,764.01 $53,352,666.02
Internal Service Funds
222 Central Services 305,778.14 9,132,417.20 10,085,905.09 17,792.07 (935,695.82)(629,917.68)1,008,590.51 (1,638,508.19)
226 Liability Insurance 5,760,772.80 3,925,455.34 3,021,317.47 (499,514.67)404,623.20 6,165,396.00 1,510,658.74 4,654,737.27
278 Take Home Vehicle Police 750,477.36 79,031.71 1,040.27 1,895.13 79,886.57 830,363.93 750,000.00 80,363.93
279 IT / Innovation / 311 Call Center 4,698,328.43 9,409,653.33 9,426,437.59 (28,271.72)(45,055.98)4,653,272.45 - -
711 Self-Funded Employee Benefits 10,708,563.15 18,154,703.98 19,237,372.90 (35,585.11)(1,118,254.03)9,590,309.12 4,809,343.23 4,780,965.90
713 Unemployment Compensation 77,878.33 10,255.24 77,692.96 35,171.65 (32,266.07)45,612.26 19,423.24 26,189.02
714 Parental Leave 410,517.25 296,420.95 83,395.63 1,036.74 214,062.06 624,579.31 6,671.65 617,907.66
Total Internal Service Funds $22,712,315.46 $41,007,937.75 $41,933,161.91 ($507,475.91)($1,432,700.07)$21,279,615.39 $8,104,687.36 $8,521,655.58
Fiduciary Funds
701 Fire Pension 360,077.71 4,070,522.56 4,043,751.20 907.65 27,679.01 387,756.72 404,375.12 (16,618.40)
702 Police Pension 616,514.83 5,995,004.21 6,115,326.23 1,554.54 (118,767.48)497,747.35 611,532.62 (113,785.27)
709 Payroll Clearing ---(14,841.85)(14,841.85)(14,841.85)- -
718 State Tax Withholding Fund 351,228.03 --(28,480.58)(28,480.58)322,747.45 322,747.45 -
726 Police Distributions Payable 1,048,916.01 --(64,950.49)(64,950.49)983,965.52 983,965.52 -
Total Fiduciary Funds $2,376,736.58 $10,065,526.77 $10,159,077.43 ($105,810.73)($199,361.39)$2,177,375.19 $2,322,620.71 ($130,403.67)
Total City Controlled Funds $316,420,312.60 $361,840,126.75 $375,977,661.78 ($7,033,984.75)($21,171,519.78)$ 295,248,792.82 $ 111,747,406.92 $ 139,720,229.01
Redevelopment Commission Controlled Funds
Tax Increment Financing Funds
324 TIF - River West Development Area 35,127,336.20 21,292,504.62 21,959,245.39 301,145.22 (365,595.55)34,761,740.65 - -
422 TIF - West Washington 1,443,740.14 529,432.29 99,745.33 3,248.44 432,935.40 1,876,675.54 - -
429 TIF - River East Development Area (NE Dev)11,899,914.41 6,530,161.07 3,603,824.37 (13,080.76)2,913,255.94 14,813,170.35 - -
430 TIF - Southside Development Area #1 15,162,731.64 4,005,992.98 6,447,976.57 30,001.79 (2,411,981.80)12,750,749.84 - -
435 TIF - Douglas Road 357,934.03 243,948.89 -615.70 244,564.59 602,498.62 - -
436 TIF - River East Residential Area (NE Res)6,838,774.53 7,363,125.89 5,236,835.02 37,464.20 2,163,755.07 9,002,529.60 - -
Total Tax Increment Financing Funds $70,830,430.95 $39,965,165.74 $37,347,626.68 $359,394.59 $2,976,933.65 $73,807,364.60 --
Redevelopment Funds
433 Redevelopment General 3,754,261.07 1,830,992.60 2,170,908.58 10,979.97 (328,936.01)3,425,325.06 542,727.15 2,882,597.92
439 Certified Technology Park 11,263.77 283.09 -28.45 311.54 11,575.31 - 11,575.31
452 2018 TIF Park Bond Capital 2,302,851.06 57,792.44 7,480.00 5,814.55 56,126.99 2,358,978.05 - 2,358,978.05
454 Airport Urban Enterprise Zone 414,758.14 10,424.24 -1,047.35 11,471.59 426,229.73 - 426,229.73
Total Redevelopment Funds $6,483,134.04 $1,899,492.37 $2,178,388.58 $17,870.32 ($261,025.89)$6,222,108.15 $542,727.15 $5,679,381.01
Debt Service Funds
315 Airport 2003 Debt Reserve 1,047,152.50 26,318.38 -2,644.27 28,962.65 1,076,115.15 1,076,115.15 -
328 SBCDA 2003 Debt Reserve 1,750,679.96 44,000.34 -4,420.82 48,421.16 1,799,101.12 1,799,101.12 -
351 2018 TIF Park Bond Debt Service Reserve 1,046,766.16 26,308.67 -2,643.30 28,951.97 1,075,718.13 1,075,718.13 -
352 2019 South Shore Double Tracking Debt Service 14,695.68 1,035,503.20 1,030,125.00 -5,378.20 20,073.88 - 20,073.88
353 2020 TIF Library Bond Debt Service Reserve 326,944.35 15.00 8.24 -6.76 326,951.11 326,951.11 -
Total Debt Service Funds $4,186,238.65 $1,132,145.59 $1,030,133.24 $9,708.39 $111,720.74 $4,297,959.39 $4,277,885.51 $20,073.88
Total Redevelopment Commission Funds $81,499,803.64 $42,996,803.70 $40,556,148.50 $386,973.30 $2,827,628.50 $84,327,432.14 $4,820,612.66 $5,699,454.89
Grand Total $397,920,116.24 $404,836,930.45 $416,533,810.28 ($6,647,011.45)($18,343,891.28)$379,576,224.96 $116,568,019.57 $145,419,683.90
CASH MANAGEMENT &
INVESTMENT POLICIES
24
ADMINISTRATION & FINANCE POLICIES
City of South Bend Cash Management and Investments Policy
Section 1. Authority
The City Controller (the “Controller”) of the City of South Bend, Indiana (the “City”) adopts this statement
of policy (this “Policy”) pursuant to the Controller’s authority as the head of the Administration and
Finance Department (the “Department”) under South Bend Municipal Code Section 2-21(b).
Section 2. Background and Purposes
The purpose of this Policy and the accompanying supplements is to set forth policies and procedures related
to the City’s management of cash and investments. The City is permitted to invest funds in accordance with
Indiana Code 5-13-9.
Maintaining adequate access to liquid assets (cash and investments) is of paramount importance to the City.
The City’s liquidity is a major component of its overall fiscal health. The ability to access adequate cash
reserves when needed is important for maintaining service levels during periods of lowered tax revenue or
for ensuring that non-discretionary expenses (such as debt service) are adequately funded. Additionally,
maintaining strong cash reserves is one of the foundations of the City’s General Obligation Bond Rating,
which is currently one of the highest in the state.
In addition to the importance of maintaining strong liquidity, it is important that the City strive to increase
its investment and interest income, within the confines of Indiana law and prudent financial management.
Indiana law strictly limits the types of investments that the City is permitted to hold, which constrains
income opportunity but also reduces risk of investment loss. This Policy will define the City’s investment
philosophy and procedures designed to ensure compliance with all applicable laws and regulations.
The City recognizes that cash management procedures (including receipt, deposit, and reconciliation) carry
inherent risk that must be mitigated with appropriate internal control procedures. This Policy will outline
these internal controls that must be followed to protect employees and ensure that the City remains a good
steward of taxpayer dollars.
The City’s financial system is Microsoft Dynamics 365 for Finance and Operations (“DFO”). DFO serves
as the sole record of cash balances, cash receipts, and cash payments in the City. Any cash receipts that are
initially recorded in a separate system must also be recorded in DFO. See the City of South Bend Revenue
Recognition Policy for more information.
Section 3. Roles and Responsibilities
Controller
The Controller is responsible for the overall cash management and investment strategy for the City. It is the
Controller’s responsibility to define acceptable cash reserve requirements and enforce corrective actions (as
prescribed in this Policy) when cash reserve requirements are not met. Additionally, it is the Controller’s
responsibility to oversee the City’s investments, including hiring and providing oversight to outside
investment management consultants. Finally, the Controller is responsible for designing cash management
procedures (including cash receipt and reconciliation) that mitigate inherent risks of cash handling through
strong internal control. In fulfilling the Controller’s responsibilities under this Policy, the Controller is
assisted by the Deputy City Controller and may delegate all appropriate authority to the Deputy City
Controller to achieve the purposes of this Policy.
25
Director of Treasury
Under the direction of the Controller, the City’s Director of Treasury is responsible for the day-to-day
management of the City’s cash and investment portfolio. This includes performing all bank reconciliations
and resolving discrepancies, as well as serving as the point of contact for City employees, bank
representatives, or investment management professionals on matters of cash handling, cash management, or
investment management. The Director of Treasury is also responsible for ensuring that correct cash
handling procedures are followed.
Directors of Department Finance
Directors of Department Finance are responsible for ensuring that cash receipts are correctly entered into
DFO as they are received by various members of their assigned departments. Additionally, Directors of
Department Finance work with the Director of Treasury to ensure that proper cash handling procedures are
followed in each department and to identify cash receipts that are received by the Director of Treasury
(especially those received via wire transfer or automated clearing house (ACH)).
Section 4. Establishment of Procedures
Except as otherwise provided, it is the Controller’s responsibility to establish, direct, modify, and otherwise
maintain, from time to time as the Controller may determine in the Controller’s discretion, the procedures
for carrying out the administrative and financial activities associated with the subject matter of this
Policy. Due to the fundamental importance of maintaining strong cash reserves and the inherent risks
associated with handling cash reserves, the Controller has established, both within and without DFO,
certain rules and procedures for all divisions of the City to protect the City’s financial position and safeguard
the City’s assets, including appropriate internal control measures in accordance with the City of South Bend
Internal Control Policy and its supplemental materials. Those rules and procedures are included as
supplements to this Policy and may be amended, supplemented, or eliminated from time to time as the
Controller may deem appropriate, without the need for further approval of the Mayor or amendment to this
Policy.
Section 5. Effective Date and Approval
This Policy is effective on May 1, 2021, and supersedes all prior policies addressing the same subject matter.
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ADMINISTRATION & FINANCE POLICIES
Supplement 202 – Investments
The City shall invest excess cash in various investment vehicles as allowed by Indiana law. The City shall
make all investments, in both Deposit and Investment Accounts, in accordance with the terms and
limitations of Indiana Code 5-13-9. The current authorization for the City to engage in these investment
activities comes from Ordinance No. 10993-23. The City's practice is to obtain authorization via an
ordinance on an annual basis, so as to maintain the maximum investment flexibility under Indiana Code
5-13-9.
Board of Finance
The local Board of Finance (as defined in Indiana Code 5-13-7) will review the investment policy and will
receive an investment report on an annual basis coincident with the Annual Meeting of the Board of
Finance, held after the 1st Monday in January and before January 31st.
Valuation of Investments
Currently, the total amount invested is $200 million. On a monthly basis, the City’s investment custodian
(currently 1st Source) transfers any gain in market value over $200 million or direct dividends paid from
investments into the City’s depository bank account. This investment income is allocated using the
procedures described in Supplement 203.
The City will not track the current fair market value of investments on a monthly basis in DFO. Rather, the
City's books will be adjusted for FMV of investments on an annual basis only.
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ADMINISTRATION & FINANCE POLICIES
Supplement 208 - Cash Reserve Requirements
The City of South Bend has established the following cash reserve guidelines to ensure adequate liquidity.
Cash reserves are defined as cash balances on hand less outstanding encumbrances. “Annual expenditures”
in each fund do not include capital expenditures.
Fund Fund Name Cash Reserve Policy
101 General Fund 50% of annual expenditures
102 Rainy Day 3% of prior year operational expenditures in Civil City
funds, excluding interfund transfers
201 Parks & Recreation 25% of annual expenditures
202 Motor Vehicle Highway 25% of annual expenditures
209 Studebaker/Oliver Reverting Grants No reserve requirement - Grant fund - spend down to zero
210 Department of Community Investment
State Grants No reserve requirement - Grant fund - spend down to zero
211 Department of Community Investment
Operating No reserve requirement
212 Department of Community
Investment Grants No reserve requirement - Grant fund - spend down to zero
216 Police State Seizures 25% of annual expenditures
217 Gift, Donation, Bequest No reserve requirement
219 Unsafe Building No reserve requirement
220 Law Enforcement Continuing
Education 25% of annual expenditures
221 Rental Units Regulation No reserve requirement
222 Central Services No reserve requirement
226 Liability Insurance 50% of annual expenditures
227 Loss Recovery No reserve requirement
230 Code Enforcement No reserve requirement
249 Local Income Tax - Public Safety No reserve requirement
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Fund Fund Name Cash Reserve Policy
251 Local Road & Street 25% of annual expenditures
257 LOIT 2016 Special Distribution No reserve requirement
258 Human Rights Federal Grants No reserve requirement - Grant fund - spend down to zero
263 American Rescue Plan No reserve requirement - Grant fund - spend down to zero
264 COVID-19 Response No reserve requirement
265 Local Road & Bridge Matching Grant No reserve requirement - Grant fund - spend down to zero
266 MVH Restricted No reserve requirement
278 Police Take Home Vehicle $750,000 minimum
279 IT / Innovation / 311 Call Center No reserve requirement
287 Fire Department Capital No reserve requirement - Capital fund - spend down to zero
289 Haz-Mat 25% of annual expenditures
291 Indiana River Rescue 25% of annual expenditures
299 Police Federal Drug Enforcement 25% of annual expenditures
312 2017 Parks Bond Debt Service No reserve requirement
315 Airport 2003 Debt Reserve 100% of debt service reserve per bond covenants
324 TIF - River West Development Area No reserve requirement
328 SBCDA 2003 Debt Reserve 100% debt service reserve per bond covenants
350 2018 Fire Station #9 Bond Debt
Service No reserve requirement
351 2018 TIF Parks Bond Debt Service 100% debt service reserve per bond covenants
352 2019 South Shore Double Tracking
Debt Service No reserve requirement
353 2020 TIF Library Bond Debt Service
Reserve 100% debt service reserve per bond covenants
401 Coveleski Stadium Capital No reserve requirement - Capital fund - spend down to zero
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Fund Fund Name Cash Reserve Policy
404 Local Income Tax - Certified Shares 50% of annual expenditures
406 Cumulative Capital Development No reserve requirement - Capital fund - spend down to zero
407 Cumulative Capital Improvement No reserve requirement - Capital fund - spend down to zero
408 Local Income Tax - Economic
Development 50% of annual expenditures
410 Urban Development Action Grant
(UDAG) No reserve requirement - Grant fund - spend down to zero
412 Major Moves Construction No reserve requirement - Capital fund - spend down to zero
413 Professional Sports Convention
Development Area (PSCDA) No reserve requirement - Capital fund - spend down to zero
416 Morris Performing Arts Center Capital No reserve requirement - Capital fund - spend down to zero
422 TIF - West Washington No reserve requirement
429 TIF - River East Development Area
(NE Dev) No reserve requirement
430 TIF - Southside Development Area #1 No reserve requirement
433 Redevelopment General 25% of annual expenditures
435 TIF - Douglas Road No reserve requirement
436 TIF - River East Residential (NE Res) No reserve requirement
439 Certified Technology Park No reserve requirement
450 Palais Royale Historic Preservation No reserve requirement
451 2018 Fire Station #9 Bond Capital No reserve requirement - Bond capital fund - spend down
to zero
452 2018 TIF Parks Bond Capital No reserve requirement - Bond capital fund - spend down
to zero
453 Zoo Bond Capital No reserve requirement - Bond capital fund - spend down
to zero
454 Airport Urban Enterprise Zone No reserve requirement
455 2021 Infrastructure Bond Capital No reserve requirement - Bond capital fund - spend down
to zero
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Fund Fund Name Cash Reserve Policy
471 2017 Parks Bond Capital No reserve requirement - Bond capital fund - spend down
to zero
600 Consolidated Building Department 25% of annual expenditures
601 Parking Garages 25% of annual expenditures
602 Morris Performing Arts Center
Operations 10% of annual expenditures
610 Solid Waste Operations 10% of annual expenditures
611 Solid Waste Capital No reserve requirement - Capital fund - spend down to zero
620 Water Works Operations 5% of annual expenditures
622 Water Works Capital No reserve requirement - Capital fund - spend down to zero
624 Water Works Customer Deposit 100% cash reserves for customer deposits
625 Water Works Sinking (Debt Service) No reserve requirement
626 Water Works Bond Reserve 100% cash reserves per bond covenants
629 Water Works Operations &
Maintenance Reserve
16.67% of annual operating expenses in fund 620, net of
transfers
640 Sewer Repair Insurance 25% of annual expenditures
641 Sewage Works Operations 5% of annual expenditures
642 Sewage Works Capital No reserve requirement - Capital fund - spend down to zero
643 Sewage Works Operations &
Maintenance Reserve
16.67% of annual operating expenses in fund 641, net of
transfers
649 Sewage Works Sinking (Debt Service) No reserve requirement
653 Sewage Works Debt Service Reserve 100% cash reserves per bond covenants
654 Sewage Works Customer Deposit 100% cash reserves for customer deposits
655 Project ReLeaf (Leaf Pickup and
Removal) 25% of annual expenditures
667 Storm Sewer No reserve requirement - Capital fund - spend down to zero
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Fund Fund Name Cash Reserve Policy
670 Century Center Operations 25% of annual expenditures
671 Century Center Capital $800,000 minimum
672 Century Center Energy Conservation
Bond No reserve requirement
701 Firefighters Pension 10% of annual expenditures
702 Police Pension 10% of annual expenditures
709 Payroll Clearing No reserve requirement – clearing fund
711 Self-Funded Employee Benefits 25% of annual expenditures
713 Unemployment Compensation 25% of annual expenditures
714 Parental Leave 8% of annual expenditures – 1 month of expenditures
718 State Tax Withholding Fund 100% cash reserves
725 Morris / Palais Box Office 100% cash reserves
726 Police Distributions Payable 100% cash reserves
730 City Cemetery 25% of annual expenditures
731 Bowman Cemetery $400,000 minimum
750 Equipment/Vehicle Leasing No reserve requirement - Capital lease fund - spend down
to zero
752 South Bend Redevelopment Authority 100% cash reserves per bond covenants
754 Industrial Revolving Fund No City reserve requirement; there are program
requirements
755 South Bend Building Corporation 100% cash reserves per bond covenants
756 2015 Smart Streets Bond Debt Service 100% cash reserves per bond covenants
757 2015 Parks Bond Debt Service 100% cash reserves per bond covenants
759 2017 Eddy Street Commons Bond
Capital
No reserve requirement - Bond capital fund - spend down
to zero
760 2017 Eddy Street Commons
Bond Debt Service $2,500,000 minimum per bond covenant
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