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Approving Recommendation of Investment Strategy
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The Investment Oversight Committee of the Albuquerque Bernalillo County Water Utility Authority (the Water Authority) approved on August 10, 2018 along with Public Trust Advisors, the Water Authority’s Investment Advisor a new Investment Strategy that best meet the objectives of safety, liquidity and yield in managing the funds currently held by the Water Authority. The committee determined that there is opportunity to improve both safety and yield in the current marketplace.
The Investment Oversight Committee is made up of: Board Member (Councilor Trudy Jones), Executive Director, Chief Financial Officer, Chief Operating Officer, and a Director from RBC Capital Markets (Eric Harrigan). The Committee voted unanimously to implement the strategy recommended by Public Trust Advisors.
RECOMMENDATION:
The committee recommends that the Board approve the investment of a total of $100 million in US Treasury securities, invested in an even ladder and the portfolio of Treasury bills will mature in June of 2019. Then, as the securities mature, the funds that are not needed for current projects or operating needs will be reinvested at the end of the ladder to maintain the even flow of funds.
FISCAL IMPACT:
Continue to diversify funds on deposit and improve yield to meet the Authority’s investment objectives of safety, liquidity and then yield by:
• Maintaining $36 million / Six month Treasury Bill ladder.
• Adding a $64 million Treasury Bill ladder whose funds will be used to make a July 1, 2019 debt payment. This portfolio of bills will all mature in June of 2019.
• High levels of liquidity will be maintained in immediately available bank deposits.
The additional interest income from the $64 million should exceed $500,000 in FY19 and is targeted to help offset credit card fees.