01-25-16 Board of Finance - Laserfiche WebLink

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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Building, then informed the Council about the stale check policy where after two years a check issued by the city is no longer valid, but if the person comes forward we reissue those checks and then they can cash them as it is their money.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.