City of Gonzales
CITY MANAGER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: March 7, 2022
FROM: Rene Mendez, City Manager
SUBJECT: Review and Accept the FY 2021-2022 First Two Quarters Interest Earnings Treasurer Report
RECOMMENDATION
It is recommended that your Council and Agency Board review and accept the Interest Earnings Treasurer Report for the First Two Quarters of Fiscal Year 2021-2022, ending December 31, 2021.
BACKGROUND
Pursuant to the City’s Investment Policy, the Treasurer is required to provide interest earning reports.
REVIEW AND ANALYSIS
Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: The Treasurer Report, while somewhat of a ministerial action, is a significant financial item presented to your Council and Agency Board for review. It supports the Vision, because it provides a quarterly look at the investment and cash position of the City, in order to provide the necessary information to your Council, Agency Board, and the public to keep track of the resources necessary to carry out the Vision.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____No ____ NA
AGENDA
ITEM
7 Explain: Interest earnings augment resources needed to provide the services necessary to enhance the quality of life.
City services will be delivered in a cost-effective, respectful, and friendly manner to ensure the safety and wellbeing of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. ___ Yes ___No X NA Explain: The Treasurer Report strives to be straightforward and provides the information in an easy-to-understand manner.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: The Annual Report is very straightforward in that all the City funds are kept in the State’s Local Agency Investment Fund (LAIF), and with our local branch of Mechanics Bank.
Both sources are very secure and while the City could possible earn more if the portfolio were diversified, the conservative investment approach used has provided good security for the City’s resources. In order to maximize return, staff has been very careful in withdrawing funds, and has maintained the highest possible balances in both accounts.
ALTERNATIVES
Alternatives include not providing the Treasurer Report, which is not recommended, and/or changing the format of the Report.
BUDGET IMPACT
FY 2021-2022- First Two Quarters Recap (Attachment 1)
City Funds: Attachment 1 provides the interest allocation for the first two quarters of the 2021-2022 Fiscal Year. To date (ending December 31, 2021), City funds have earned a combined LAIF and nonLAIF interest of $9,939.25 of which the Business Loan Grants Fund was the largest at 28% ($2,740); followed by the Community Development Fund at 20.12% ($1,999); and the Sewer Impact Fund at
11.24% ($1,117).
The reason the Business Loan Grant and Community Development Funds are the highest is that they both have a fixed and consistent interest revenue stream, unlike the funds we have with a bank and/or the Local Agency Investment Fund (LAIF) which are subject to the low interest environment.
Successor Agency Funds: The Successor Agency funds to date are a combined $46.09 in interest earnings, with the majority in the City Successor Agency.
All funds combined earned $9,985.34 the First Two Quarters of the 2021-2022 Fiscal Year.
These earnings are consistent with the fact that the overall interest environment continues to be very low.
CONCLUSION
It is recommended that your Council and Agency Board review and accept the Interest Earnings Treasurer Report for the First Two Quarters of Fiscal Year 2021-2022, ending December 31, 2021.
Attachments:
1. Interest Report