Finance Committee Agenda and Packet 2012 04 16 (2)

Home Browse Search

City Council Finance Committee Meeting Minutes 03/19/12 Page 2 of 4 UPDATE FROM SCOTT PRICKETT, DAVIDSON FIXED INCOME MANAGEMENT, CITY INVESTMENT ADVISOR Mr. Prickett reviewed Davidson’s analysis of the current economic outlook emphasizing labor, housing and personal consumption (PCE) inflation. Mr. Prickett also indicated that Davidson expects the Fed will increase interest rates prior to their 2014 target. In reviewing Louisville’s position, Mr. Prickett stated that Louisville remains fairly liquid at this time stating the conservative position of both Davidson and the City’s Investment Policy and that while yield is important they are hesitant to lock in to any long term (5yr) investments. The goal is to reinvest money into the market in a diversified manner to retain the short-term and long-term goals of the City. Mr. Prickett summarized the City’s performance from 4/1/10 through 12/31/11 which had an average yield of 1.61% which is well above CSAFE, Colotrust Plus, and 2Yr Agency investments over the same period. Council member Sackett asked how the City of Louisville compares with its investments to other Colorado Front Range cities. Mr. Prickett stated that Louisville is average in its investments and investment performance but is financially in a very strong position. Council member Keany asked how our investments impacted the City’s ability to respond to long-term CIP projects or sudden opportunities for land purchases. Member Keany also asked if the City needs to draw on reserves to meet standard expenses. Mr. Prickett stated that safety and liquidity are key investment elements the City has stated. Finance Director Watson stated that generally tax revenues cover monthly expenses but that there are times when investments have to be shifted. Finance Director Watson stated that the investments are done manually as opposed to standing orders so it is relatively easy to convert funds to cash when necessary. City Manager Fleming stated that the new CIP Manager position will help significantly with anticipating project delays which will in turn assist with prudent investments. Council member Keany asked how Davidson receives compensation for its services to the City. Mr. Prickett stated that Davidson receives seven (7) basis points of the invested assets. Councilor Keany stated that perhaps the City should look more seriously at paying down debt with yields being so low. Finance Director Watson stated that the City Financial Advisor, Jim Manire, would be meeting with the Finance Committee at the April 16, 2012 meeting. 3