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HomeMy WebLinkAbout01-25-16 Board of FinanceBOARD OF FINANCE Committee Members Present: Absent Committee Members: JANUARY 25, 2016 3:30 P.M. Dr. Varner, Tim Scott, Karen White, Gavin Ferlic, Jo Broden, John Voorde, Regina Williams Preston (arrived at 3:36 p.m.), Oliver Davis (arrived at 3:45 p.m.) Randy Kelly Others Present: Kareemah Fowler, Kathleen Cekanski — Farrand, Adriana Rodriguez, Alkeyna Aldridge, Joe Molnar, John Murphy, Paul W. Gifford, Rahman Johnson Agenda: Annual Board of Finance Meeting where the South Bend Common Council convenes as a local Board of Finance to Elect its officers Dr. Varner, past secretary of the Board of Finance, called the meeting to session. Dr. Varner announced at this time motions could be made for nomination of the Chairperson for the Board of Finance. Council Member Gavin Ferlic nominated Council President Tim Scott as Chairperson for the Board of Finance. Council Member Karen White seconded the motion which carried by a voice vote of six (6) ayes. Tim Scott, as Chairperson, announced at this time nominations could be taken for the Board of Finance secretary. Council Member Gavin Ferlic nominated Dr. David Varner as Secretary of the Board of Finance. President Tim Scott seconded the motion which carried by a voice vote of six (6) ayes. John Murphy, City Controller with offices on the 12`h Floor of the County -City Building, presented the Annual Investment Report. Mr. Murphy stated they had emailed the report to the Council and it is available to the public online but he also brought hard copies to the meeting. Mr. Murphy introduced the investment advisors team of Paul Gifford, James Welch, and Erik Clapsaddle. He also announced the city investment officers are himself, Jennifer Hockenhull, and Rahman Johnson. Mr. Murphy went over the structure of the report and how it will be presented. Mr. Murphy asked for a motion to reaffirm the city investment officers for 2016 which was so moved by Council Member Gavin Ferlic and seconded by Dr. Varner. The motion carried by a voice vote of six (6) ayes. Mr. Murphy announced the total authorized investment amount was $175 million which was a large portion of the city's reserves but not all the money as some is in the checking account as well. Paul Gifford, 100 N. Michigan St, as the Chief Investment Officer gave a detailed overlook of the investments the city has with 1St Source Bank. He went over the investment policy which is bound by state statute in what the money can be invested in and is a very conservative investment strategy limiting the risk as much as possible. Mr. Gifford reported that the total invested is approximately $175 million and the estimated annual income is around $1.5 million dollars. A detailed breakdown is available in the Investment Report. Mr. Gifford informed the Board that on a monthly basis that interest income and other trading income is wired to the City. Mr. Gifford explained the various banks and accounts that the fixed income is housed in are approved by the state and also by 1 St Source Bank's own auditing process to insure against any possible bank closure holding the city's money. He also stated that with the Federal Reserve raising the interest rate his team is moving the money into more accounts where the return rate is rising above I% as it used to be around half a percent. Mr. Gifford explained that as interest rates change over the yield curve he will buy and sell securities on behalf of the city. So far in the four years of doing that every time it has been for profit and has yet to sell one for a loss. Last year it added around forty thousand dollars of income to the portfolio but going forward as the Federal Reserve raises rates that will happen less and less. Rahman Johnson, Office on the 12"' Floor of the County -City Building, then informed the Council about the stale check policy where after two years a check issued by the city is no longer valid, but if the person comes forward we reissue those checks and then they can cash them as it is their money. Mr. Johnson also reported they do make an effort to locate the person or business to see why they have not cashed their checks. Council Member Jo Broden asked if these are posted anywhere. Mr. Johnson responded no but the report itself does get posted on the website. Mr. Murphy went over the rest of the report which focuses on where each individual fund is and how much money is in each fund. He also stated every fund ended the year with a positive balance. Mr. Murphy also made note that each fund is given a portion of the interest earned by a proportional basis. Mr. Murphy explained the Cash Reserve Targets for the various funds, these are numbers that the city does not want these funds to go under at any time for assurance purposes that we will be covered in any instance. For example the General Fund target is 30% percent of annual expenditures which is better than most cities. Council Member Gavin Ferlic made a motion to remove the first stale check subject to contact with that person. The motion was seconded by Council Member Karen White which carried by a voice vote of eight (8) ayes. Council President Tim Scott made a motion to accept the stale check payroll report as amended. Council Member Karen White seconded the motion which carried by a voice vote of eight (8) ayes. Council Member Gavin Ferlic made a motion to accept the accounts payable stale check report. Council Member Jo Broden seconded the motion which carried by a voice vote of eight (8) ayes. Council Member Gavin Ferlic made a motion to reaffirm the 1St Source Bank Investment Officers. The motion was seconded by John Voorde which was carried by a voice vote of eight (8) ayes. Council Attorney Kathleen Cekanski- Farrand stated there needs to be a motion approving the entire report. So moved by Council Member John Voorde and seconded by Council Member Gavin Ferlic which was carried by a voice vote of eight (8) ayes. There being no further business before the Board of Finance, President Tim Scott adjourned the meeting at 3:55 p.m. espectfu y e , Tim Scott, Chairperson 0 4 - C, - le L"t �� 6 /< f i � k - - � 0 7F,(- C 01 �p U Tli B� p �d W PEACE s -. a 186 City of South Bend Board of Finance Annual Investment Report For the Year Ended December 3 2015 Report Date: January 25, 2016 Report Distribution: Mayor Chief of Staff City Clerk South Bend Common Council Members Common Council Attorney Department Heads Fiscal Officers State Board of Accounts (local office) Submitted By: Department of Administration & Finance