HomeMy WebLinkAboutAudit Committee-Agenda Packets-07/21/2020City of Colleyville Page 1
City of Colleyville
Audit Committee
Agenda
City Hall
100 Main Street
Colleyville, Texas 76034
817.503.1000
www.colleyville.com
Tuesday, July 21, 2020
5:00 p.m.
City Manager’s Conference Room
Third Floor – City Hall
1.CALL TO ORDER
2. APPROVAL OF MINUTES
February 4, 2020
3.REGULAR AGENDA ITEMS
3a Discuss the Fiscal Year September 30, 2020, audit which will be
conducted by the City's audit firm Weaver and Tidwell
3b Presentation of the Quarterly Investment Report for the quarter ended
June 30, 2020
4.ADJOURNMENT
I hereby certify this agenda was posted on City Hall bulletin boards Friday, July
17, 2020, by 5:00 p.m.
Christine Loven, TRMC
City Secretary
A quorum of the Colleyville City Council and/or any other Colleyville Board,
Commission, or Committee may be in attendance at this meeting.
Any matter on this agenda may, at the discretion of the governing body, be
opened for public comment and discussion.
If you plan to attend this public meeting and have a disability that requires special
accommodations, please advise Executive Secretary at least 48 hours in advance
at 817.503.1111, and reasonable accommodations will be made to assist you.
City of Colleyville Page 1
City of Colleyville
Audit Committee
Minutes
City Hall
100 Main Street
Colleyville, Texas 76034
817.503.1000
www.colleyville.com
Tuesday, February 4, 2020
5:00 p.m.
City Manager’s Conference Room
Third Floor – City Hall
1.CALL TO ORDER
City Secretary Christine Loven called the Audit Committee to order on February 4,
2020 at 5:00 p.m.
ROLL CALL: Committee members present George Dodson, Kathy Wheat, Bobby
Lindamood
ABSENT: Committee member Susan Mathisen
Also Present: Finance Director Kyle Lester, Accounting Manager Karen Hines,
Assistant City Manager Mark Wood, and City Secretary Christine Loven
2.APPROVAL OF MINUTES
August 20, 2019
November 19, 2019
Committee member Dodson motioned to approve the minutes, Committee
member Wheat seconded, the minutes were unanimously approved.
3.REGULAR AGENDA ITEMS
3a Discuss preliminary draft of FY19 Comprehensive Annual Financial Report
Jennifer Ripka and Kristen Derryberry of Weaver and Tidwell, reviewed the FY19
Comprehensive Annual Financial Report (CAFR) stating the City received an
unmodified report, which is the highest available rating. They additionally noted
the audit revealed no material weaknesses and there were no non-compliance
issues. Ms. Ripka and Ms. Derryberry thanked staff for their cooperation and
assistance and asked the committee members if there were questions.
There was a brief discussion of future leases entering into the debt ratio.
4. REPORTS
Presentation of the Quarterly Investment Report for the quarter ended
December 30, 2019
City of Colleyville Page 2
Audit Committee Minutes February 4, 2020
Finance Director Kyle Lester reviewed the investment report, noting there was an
increase in cash revenue of $2.5 million over the last quarter. There was a general
review and discussion of the City’s accounts, yields, and the market.
4.ADJOURNMENT
The meeting was adjourned at 5:20 p.m.
MINUTES APPROVED THIS 21ST DAY OF JULY, 2020.
Minutes taken and prepared by:
Christine Loven, TRMC
City Secretary
City of Colleyville Page 1
City of Colleyville
Audit Committee
Agenda Briefing
City Hall
100 Main Street
Colleyville, Texas 76034
www.colleyville.com
Agenda Number 3a Agenda Date 7/21/2020 Number 3a
Type Regular Agenda Items
Department City Manager
Title
Discuss the Fiscal Year September 30, 2020, audit which will be conducted by the
City's audit firm Weaver and Tidwell
Explanation
Discuss the Fiscal Year September 30, 2020 audit which will be conducted by the
City's audit firm Weaver and Tidwell
Attachments
City of Colleyville Page 1
City of Colleyville
Audit Committee
Agenda Briefing
City Hall
100 Main Street
Colleyville, Texas 76034
www.colleyville.com
Agenda Number 3b Agenda Date 8/20/2019 Number
Type Presentation
Department Finance
Title
Presentation of the Quarterly Investment Report for the quarter ended June 30,
2019
Explanation
Investment Summary for period ending June 30, 2019:
Cash & Cash Equivalents (Local Government Investment Pools) were
$79,744,334. The total funds held by the City of Colleyville equaled $94,642,175
and were allocated as follows:
Current as
of 6/30/2019
Last Quarter as of
3/31/2019
Cash $7,640,201.64 $5,209,518.86
Sweep 15,175,903.36 15,478,377.10
Commercial Paper Investment Pool 2,450,039.40 2,434,595.00
Government Only Investment Pool 54,478,189.52 54,152,102.00
Government Issuances 11,582,619.46 12,582,619.46
CDARS 2,571,221.46 2,571,221.46
Certificates of Deposit 744,000.00 744,000.00
Total Cash & Investments $94,642,175 $93,172,434
Benchmark 2.13%
Investments As of 6/30/2019
Sweep 2.28%
LOGIC Commercial Paper Investment Pool Average Quarterly Yield 2.54%
TexSTAR Government Only Investment Pool Average Quarterly Yield 2.40%
TexPOOL Government Only Investment Pool Average Quarterly Yield 2.41%
CLASS Government Only Investment Pool Average Quarterly Yield 2.42%
Total Government Only Investment Pool Average Quarterly Yield 2.41%
Average Weighted Yield: Agency 1.59%
City of Colleyville Page 2
Audit Committee Agenda Briefing 3b
Average Weighted Yield: CDARS 1.44%
Average Weighted Yield: CD'S 2.53%
Interest earnings for the quarter were $501,257 compared to 431,840 last
quarter, an increase of 16%. The increase is due to the 24% increase in funds
invested in Government only investment pools and switching to a higher yielding
sweep account.
These percentages are within the guidelines of the City investment policy.
Attachments
1.Quarterly Investment Report
6/30/2020
City of Colleyville, TX
Quarterly Investment Report
Quarterly Investment Report City of Colleyville, TX 6/30/2020
2
Weighted
3/31/2020 6/30/2020 Change Maturity
Cash 5,211,219$ 24,748,493$ 19,537,274$ Liquid
Sweep Account 17,418,867$ -$ (17,418,867)$ Liquid
LOGIC (CP Permiss.)2,486,676$ 2,490,550$ 3,874$ Liquid
Other Gov't Pools 51,915,733$ 50,952,898$ (962,835)$ Liquid
Subtotal 77,032,495$ 78,191,941$ 1,159,446$
CD's 9,427,799$ 9,179,799$ (248,000)$ 298 days
CDARS 1,575,617$ 1,575,617$ -$ 79 days
Agencies 5,015,084$ 2,515,325$ (2,499,759)$ 58 days
Subtotal 16,018,499$ 13,270,741$ (2,747,759)$ 227 days
Total Resources 93,050,994$ 91,462,681$ (1,588,313)$
Criteria
Met?
Policy Max 3/31/2020 6/30/2020
U.S. Treasuries 100%0%0%
U.S. Agencies 75%5%3%
CD's 75%10%10%
Local Gov't Pools 75%58%58%
CDARs 75%2%2%
Tri-Pty Repurchase 75%0%0%
Cash/Sweep N/A 24%27%
Where is Colleyville's cash?
Diversity Snapshot vs. Policy Requirements
0%0%10%SEC Registered, No-
Load Mutual Funds
Cash/
Equivalents
Bonds/CDs/Ag
encies
Investments on the move…
Since our last investment report,the City has had two agency securities and one CD mature,totaling
$2.748 million in investments.Additionally,June marked the end of the City's banking relationship with
Wells Fargo,as all cash was transferred over to Frost Bank as of June 30.For this entire quarter,staff
has had to keep Colleyville's cash in both Wells Fargo and Frost Bank as we transitioned depository
banks.This fact as well as very low interest rates necessitated keeping the aforementioned maturities in
cash instead of reinvesting them.With the bank transition now complete,staff will evaluate
reinvestment opportunities throughout this next quarter.Staff initially intended to invest in a sweep
account at Frost,but the participation fees outweighed the current low rate.However,staff will revisit
that decision in the future.
Quarterly Investment Report City of Colleyville, TX 6/30/2020
3
Benchmark =13-Week TreasuryHow do our returns compare?
Before the recent downturn Colleyville's investment returns had been climbing steadily since 2016,
primary due to to more active investment practices.Although we are in a down-cycle in terms of
returns,we've still been able to stay ahead of our 13-week treasury benchmark.Most importantly,
Colleyville's funds are safe.While staff will continue to seek a solid yield on the portfolio,the highest
value is placed on maintaining a low risk in order to ensure the safety and liquidity of the funds
entrusted to us.
The City's total consolidated return is 0.65%as of June 30,2020.While low,this does compare
favorably with the 13-week treasury note benchmark put in place by Colleyville's investment policy,
although our consolidated return has decreased substantially in recent months.The biggest reason for
this is the COVID-19 pandemic,which prompted a a rate cut at the Federal Reserve affecting our pool
and sweep account rates.Additionally,stock market volatility urged investors to flock to the fixed
income markets, which further decreased returns.
0.14%
0.65%
0.17%0.36%
1.63%1.80%
2.50%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
13-Wk T Consolidated
Return
Sweep Pools CD's CDARS Agencies
6/30/2020
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
3/1/2019 6/1/2019 9/1/2019 12/1/2019 3/1/2020 6/1/2020
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Historical Return
Return Rate Interest Earned
Quarterly Investment Report City of Colleyville, TX 6/30/2020
4
3/31/2020 7/1/2019
Thru Thru
6/30/2020 6/30/2020
What have we earned the past three months? For the past year?
As the graph above shows,the City has moved its investments away from agency securities and more
toward local government pools.Money stored in these pools tends to earn a decent return compared to
market while also having the benefit of being considered "liquid",as the City can withdraw its funds
within 24 hours in most cases.However,the past two years has also brought a resurgence of higher
certificate of deposit returns.While not heavily invested in CD's from a percentage standpoint,staff has
begun to seek out these instruments as diversity and liquidity needs have allowed.Similarly,with
agency debt dropping as a percentage of our portfolio,it may be advantageous to seek out those
instruments as well from a diversity standpoint.
Compared to the average quarterly return for the past 12 months,the most recent quarter is showing a
substantial decrease in both the rate of return and actual dollars earned.As noted,fixed-income rates
have come down considerably as investors have flocked to the fixed income market amidst the global
pandemic.Additionally,the transition to a new depository bank meant that staff was pre-empted from
reinvestment opportunities for this quarter.However,it may be that rates remain at this level or lower
through the next quarter.Regardless,staff will always monitor the market and manage Colleyville's
portfolio with emphasis on diversity and cash-flow needs.
$103,792; 0.65%$310,176; 1.49%
Current Total Quarterly Average
How has our portfolio changed over time?
35%47%
24%27%
34%
30%
60%58%
1%
10%
6%
3%
3%
2%
25%19%12%3%
2017 2018 2019 2020
PORTFOLIO COMPOSITION
Bank Pools CD's CDARS Agencies
Quarterly Investment Report City of Colleyville, TX 6/30/2020
5
For any questions or comments on this report, please contact Also included:
Kyle Lester, CGFO Maturities/Purchases
City of Colleyville, TX Investment Listing
Finance Director 817-503-1014 Mark-to-Market
klester@colleyville.com
Signed:
What influences our rate of return?
This investment report is in compliance with the Public Funds Investment Act as well as the City of
Colleyville's investment policy and procedures.
Per State law,Colleyville is only permitted to invest in certain fixed income securities,whos
performance ties closely with the Federal Funds rate.As the chart above shows,the rates of our 13-
week treasury benchmark as well as our pools tend to move in lock-step with the Federal Reserve's
rate actions.This rate was cut five times in the past year and now remains at close to 0.How long it
will remain there depends on the duration of our decreased economic activity,although we can
likely expect very low rates for an extended period.
-
0.50
1.00
1.50
2.00
2.50
3.00
Influence of Federal Funds Rate on Fixed Income Market
13-Wk Coupon Fed Funds Rate Avg Pools
Quarterly Investment Report City of Colleyville, TX 6/30/2020
6
What has matured this calendar year?
FFCB NOTE(3133EJCN7)1,000,000$ 2/14/2018 2/14/2020 2.07%20,700$
FHLB NOTE(3130ADN32)1,000,000$ 3/7/2018 2/11/2020 2.13%21,273$
FFCB NOTE(3133EJHL6)1,000,000$ 4/9/2018 3/27/2020 2.30%22,984$
CD - BANK OF HOPE (06268 248,000$ 9/14/2018 3/16/2020 2.55%6,324$
CD - CITIBANK (17312QH51 248,000$ 3/29/2018 3/30/2020 2.50%6,200$
CD - GOLDMAN (38148PC54 248,000$ 4/11/2018 4/13/2020 2.55%12,700$
FHLB NOTE (313383HU8)500,000$ 8/16/2019 6/12/2020 1.75%7,216$
FAMCA NOTE (3130A94N8)2,000,000$ 12/4/2019 5/25/2020 1.71%59,030$
Total Matured 6,244,000$ 2.03%156,426$
What have we purchased this calendar year?
Brokered CD (FDIC #26876)250,000$ 2/28/2020 3/10/2021 1.40%3,500$
Brokered CD (FDIC #34742)249,000$ 2/28/2020 3/21/2022 1.40%3,486$
Brokered CD (FDIC #628)248,000$ 2/11/2020 1/31/2022 1.75%4,340$
Brokered CD (FDIC #27389)249,000$ 2/11/2020 2/22/2022 1.70%4,233$
Brokered CD (FDIC #110)249,000$ 2/14/2020 5/14/2021 1.65%4,109$
Brokered CD (FDIC #58665)249,000$ 2/28/2020 9/7/2021 1.55%3,860$
Brokered CD (FDIC #57803)247,000$ 2/12/2020 1/31/2022 1.70%4,199$
Brokered CD (FDIC #58577)246,000$ 2/6/2020 2/12/2021 1.60%3,936$
Brokered CD (FDIC #18503)246,000$ 2/6/2020 2/12/2021 1.60%3,936$
Brokered CD (FDIC #35546)249,000$ 2/28/2020 3/28/2022 1.55%3,860$
Brokered CD (FDIC #58978)248,000$ 3/6/2020 3/28/2022 1.05%2,604$
Brokered CD (FDIC #33555)248,000$ 3/6/2020 3/21/2022 0.98%2,418$
Brokered CD (FDIC #57565)249,000$ 3/6/2020 3/11/2022 1.00%2,490$
Brokered CD (NCUA #68712)249,000$ 3/10/2020 9/20/2021 1.00%2,490$
Brokered CD (FDIC #19581)250,000$ 3/6/2020 3/21/2022 0.90%2,250$
STATE OF TEXAS NOTE (88 2,515,325$ 3/23/2020 8/27/2020 1.71%42,896$
Total Purchased 6,241,325$ 1.52%94,606$
Weighted Average Maturity 436 days
APPENDIX
Maturity
Date
Yield to
Maturity
Total
Return
Purchase
Date
Maturity
DatePar Amount
Yield to
Maturity
Total
ReturnInvestment
Investment Par Amount
Purchase
Date
Quarterly Investment Report City of Colleyville, TX 6/30/2020
7
Full Investment Listing
Brokered CD (FDIC #26876)250,000$ 2/28/2020 3/10/2021 1.40%3,500$
Brokered CD (FDIC #34742)249,000$ 2/28/2020 3/21/2022 1.40%3,486$
Brokered CD (FDIC #628)248,000$ 2/11/2020 1/31/2022 1.75%4,340$
Brokered CD (FDIC #27389)249,000$ 2/11/2020 2/22/2022 1.70%4,233$
Brokered CD (FDIC #110)249,000$ 2/14/2020 5/14/2021 1.65%4,109$
Brokered CD (FDIC #58665)249,000$ 2/28/2020 9/7/2021 1.55%3,860$
Brokered CD (FDIC #57803)247,000$ 2/12/2020 1/31/2022 1.70%4,199$
Brokered CD (FDIC #58577)246,000$ 2/6/2020 2/12/2021 1.60%3,936$
Brokered CD (FDIC #18503)246,000$ 2/6/2020 2/12/2021 1.60%3,936$
Brokered CD (FDIC #35546)249,000$ 2/28/2020 3/28/2022 1.55%3,860$
Brokered CD (FDIC #58978)248,000$ 3/6/2020 3/28/2022 1.05%2,604$
Brokered CD (FDIC #33555)248,000$ 3/6/2020 3/21/2022 0.98%2,418$
Brokered CD (FDIC #57565)249,000$ 3/6/2020 3/11/2022 1.00%2,490$
Brokered CD (NCUA #68712)249,000$ 3/10/2020 9/20/2021 1.00%2,490$
Brokered CD (FDIC #19581)250,000$ 3/6/2020 3/21/2022 0.90%2,250$
STATE OF TEXAS NOTE (882 2,515,325$ 3/23/2020 8/27/2020 1.71%42,896$
Brokered CD: FDIC 16022 249,675$ 9/18/2019 9/11/2020 1.75%4,297$
CDARS (Worthington Bank)1,575,617$ 9/18/2019 9/17/2020 1.80%28,361$
Brokered CD: FDIC 16571 247,000$ 9/19/2019 10/20/2020 1.80%4,836$
Brokered CD: FDIC 35141 247,000$ 9/19/2019 10/27/2020 1.85%5,058$
Brokered CD: FDIC 32992 245,000$ 9/19/2019 9/25/2020 1.80%4,495$
Brokered CD: FDIC 34221 245,000$ 9/19/2019 9/25/2020 1.80%4,495$
Brokered CD: FDIC 34775 245,000$ 9/19/2019 9/25/2020 1.85%4,619$
Brokered CD: FDIC 2270 247,000$ 9/19/2019 12/24/2020 1.80%5,628$
Brokered CD: FDIC 58647 245,000$ 10/4/2019 10/9/2020 1.75%4,288$
Brokered CD: FDIC 27237 245,000$ 10/4/2019 10/9/2020 1.75%4,288$
Brokered CD: FDIC 12855 245,000$ 10/4/2019 10/9/2020 1.75%4,288$
Brokered CD: FDIC 58658 249,000$ 10/4/2019 10/9/2020 1.75%4,358$
Brokered CD: FDIC 3511 249,000$ 10/4/2019 4/19/2021 1.90%4,731$
Brokered CD: FDIC 57777 245,000$ 10/4/2019 10/16/2020 1.75%4,288$
Brokered CD: FDIC 58243 250,000$ 10/4/2019 1/19/2021 1.70%4,250$
Spirit of Texas Bank CD 1,000,000$ 10/24/2019 4/24/2021 1.85%18,500$
Spirit of Texas Bank CD 1,000,000$ 12/5/2019 12/5/2020 1.79%17,900$
13,270,617$ 1.67%223,282$
Weighted Average Maturity 227 days
Total ReturnInvestmentPar Amount
Purchase
Date
Maturity
Date
Yield to
Maturity
APPENDIX
Quarterly Investment Report City of Colleyville, TX 6/30/2020
8
Mark-to-Market
3/31/2020 6/30/2020
Market Value Market Value
Brokered CD (FDIC #26876)250,000$ 250,430$ 252,224$ 2,224$
Brokered CD (FDIC #34742)249,000$ 249,256$ 254,147$ 5,147$
Brokered CD (FDIC #628)248,000$ 248,598$ 248,325$ 325$
Brokered CD (FDIC #27389)249,000$ 250,676$ 255,150$ 6,150$
Brokered CD (FDIC #110)249,000$ 250,076$ 252,262$ 3,262$
Brokered CD (FDIC #58665)249,000$ 249,906$ 253,069$ 4,069$
Brokered CD (FDIC #57803)247,000$ 248,635$ 252,896$ 5,896$
Brokered CD (FDIC #58577)246,000$ 246,910$ 248,278$ 2,278$
Brokered CD (FDIC #18503)246,000$ 246,910$ 248,278$ 2,278$
Brokered CD (FDIC #35546)249,000$ 249,984$ 254,852$ 5,852$
Brokered CD (FDIC #58978)248,000$ 246,539$ 251,680$ 3,680$
Brokered CD (FDIC #33555)248,124$ 246,326$ 251,435$ 3,311$
Brokered CD (FDIC #57565)249,000$ 247,352$ 252,384$ 3,384$
Brokered CD (NCUA #68712)249,000$ 247,922$ 251,515$ 2,515$
Brokered CD (FDIC #19581)250,000$ 247,822$ 253,016$ 3,016$
STATE OF TEXAS NOTE (882 2,515,325$ 2,528,200$ 2,530,065$ 14,740$
Brokered CD: FDIC 16022 249,675$ 250,792$ 250,831$ 1,156$
CDARS (Worthington Bank)1,575,617$ 1,575,617$ 1,575,617$ -$
Brokered CD: FDIC 16571 247,000$ 248,023$ 248,287$ 1,287$
Brokered CD: FDIC 35141 247,000$ 248,124$ 248,408$ 1,408$
Brokered CD: FDIC 32992 245,000$ 245,894$ 245,992$ 992$
Brokered CD: FDIC 34221 245,000$ 245,894$ 245,992$ 992$
Brokered CD: FDIC 34775 245,000$ 245,953$ 246,022$ 1,022$
Brokered CD: FDIC 2270 247,000$ 248,282$ 249,033$ 2,033$
Brokered CD: FDIC 58647 245,000$ 245,889$ 246,117$ 1,117$
Brokered CD: FDIC 27237 245,000$ 245,889$ 246,117$ 1,117$
Brokered CD: FDIC 12855 245,000$ 245,889$ 246,117$ 1,117$
Brokered CD: FDIC 58658 249,000$ 249,904$ 250,113$ 1,113$
Brokered CD: FDIC 3511 249,000$ 250,678$ 252,516$ 3,516$
Brokered CD: FDIC 57777 245,000$ 245,916$ 246,193$ 1,193$
Brokered CD: FDIC 58243 250,000$ 251,125$ 252,173$ 2,173$
Spirit of Texas Bank CD 1,000,000$ 1,005,996$ 1,010,846$ 10,846$
Spirit of Texas Bank CD 1,000,000$ 1,005,996$ 1,010,846$ 10,846$
13,270,741$ 13,311,405$ 13,380,794$ 110,053$
APPENDIX
Investment Purchase Price
Unrealized
Gain/(Loss) since
Purchase
Quarterly Investment Report City of Colleyville, TX 6/30/2020
9
Note about mark-to-market:This analysis takes a snapshot look at each of the securities Colleyville
holds and values them based on what the market would pay for them today.An unrealized gain in
market value would indicate the security's value has gone up since the last mark-to-market,and an
unrealized loss would indicate the value has gone down.However,the City of Colleyville's strategy is
to buy securities and hold them to maturity to receive the agreed-upon interest payments (known as
"buy and hold").Therefore,any change in market value will not be realized by the City.The primary
purpose of this analysis,as required by the Public Funds Investment Act,is to demonstrate the current
market value of the City's portfolio should we need to liquidate it in the case of an emergency.This
scenario is extremely unlikely,given the prudence Colleyville's leaders have shown in their financial
decisions. It is important to remember this when looking at our quarterly mark-to-market analysis.
APPENDIX