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[1. CALL SESSION TO ORDER]
MEMBER SUTON.COUNCIL, UH, MAYOR PROTE GORDON.
AND COUNCIL MEMBER COLAR HERE.
[3.1. Discuss Investment Report for the quarter ended 12/31/22 and discuss City Investment Strategy. (LaMar Kemp, Christina Bishop, Anne LaMere).]
DISCUSS INVESTMENT REPORT FOR THE QUARTER ENDED 12 31 22 AND DISCUSS CITY INVESTMENT STRATEGY.UM, GOOD EVENING, MAYOR AND COUNSEL.
UH, FOR THOSE OF YOU WHO DON'T KNOW ME, I'M CHRISTINA BISHOP, I'M THE CITY CONTROLLER.
THIS IS ANN LAIR, THE INTERIM FINANCE DIRECTOR, AND LAMAR KEN, THE SENIOR ACCOUNTANT.
UH, THE THREE OF US ARE THE CITY'S INVESTMENT OFFICERS AS APPOINTED BY THE CITY'S ADOPTED INVESTMENT POLICY.
SO THE PURPOSE OF TONIGHT'S WORKSHOP IS TO GO OVER THE FORMAT OF THE NEW INVESTMENT REPORT, WHICH WE HAVE RECENTLY TAKEN ON TO, UH, MAKING IN-HOUSE, GOING OVER THE PROPOSED INVESTMENT STRATEGY WE'VE PUT TOGETHER AND FIELDING ANY QUESTIONS OR CONCERNS YOU MAY HAVE.
UM, WITHOUT FURTHER ADO, WE WILL GET INTO THE INVESTMENT REPORT.
SO THE FIRST PART OF THE REPORT TOUCHES ON THE, UH, ECONOMY AROUND THE WORLD AND IN THE UNITED STATES.
UM, SUPPLY CHAIN ISSUES RIGHT NOW ARE NEXT SLIDE AND YOU GET A CHANCE, KATE.
UM, SUPPLY CHAIN ISSUES ARE AFFECTING THE ECONOMY AROUND THE WORLD, PARTICULARLY RAW MATERIALS, IT SUPPLIES AND VEHICLES.
UH, GLOBALLY, INDIA AND AFRICA ARE TWO OF THE FASTEST GROWING ECONOMIES AND REPRESENT VERY GOOD INVESTMENT OPPORTUNITY, BUT THE UNITED STATES IS STILL THE FAVORED ENVIRONMENT.
WHEN WE LOOK AT THE UNITED STATES ECONOMY, WE LOOK AT FOUR KEY ECONOMIC INDICATORS, THOSE BEING GDP, C P I, UNEMPLOYMENT, AND THE YIELD CURVE.
THE FIRST THREE INDICATORS I MENTIONED, I'LL SHOW SIGNS OF A STRONG ECONOMY, BUT I'M GONNA TURN IT OVER TO ANNE, WHO'S GOING TO TALK ABOUT THE YIELD CURVE IN A LITTLE BIT OF DETAIL.
IF YOU COULD, UH, ADVANCE THE SLIDE THERE FOR ME ONE MORE TIME PLEASE.
SO THIS REPORT WAS ACTUALLY PREPARED IN, UM, FEBRUARY, AND WE HAVE MOVED A LITTLE BIT FORWARD FROM THAT POINT IN TIME SINCE MARCH OF 22.
THE, UH, FEDERAL RESERVE COMMITTEE HAS INCREASED INTEREST RATES NINE TIMES, THE MOST RECENT TIME BEING YESTERDAY.
SO, UH, WHEN WE PUT THIS REPORT TOGETHER, YOU WILL SEE ON THE YIELD CURVE HERE THAT IT WAS STARTING TO INVERSE.
AND AN INVERSE YIELD CURVE IS REPRESENTATIVE OF AN ECONOMY THAT'S GOING INTO RECESSION.
THE YIELD YIELD CURVE IS NOW DEFINITELY INVERSE.
SO I PRINTED OFF, UM, A HANDOUT THAT SHOWS YOU THE YIELD CURVE AS OF TODAY, AND ALSO THE RATES AS OF TODAY, WHICH HAVE CHANGED SLIGHTLY FROM WHAT YOU SEE IN YOUR REPORT FROM FEBRUARY.
SO CURRENTLY WE HAVE AN INVESTMENT STRATEGY WHERE WE ARE INVESTING IN, UM, LOCAL FUNDS, THE LOCAL GOVERNMENTAL FUNDS LIKE TECH POOL AND TECHSTAR.
AND WE'RE EARNING ABOUT 4.7% ON OUR PHONES, WHERE IF WE MOVE TO A STRATEGY WHERE WE HAD OUR OWN BROKERAGE ACCOUNT, WE COULD INVEST IN ITEMS LIKE T-BILLS.
T-BILLS ARE FINANCIAL INSTRUMENTS THAT ARE BACKED BY THE FULL FAITH IN GOVERNMENT OF THE UNITED STATES GOVERNMENT AND THEY'RE LOW RISK.
IT'S A HIGH SECURITY INSTRUMENT AND IT MEETS THE, UH, GOALS THAT ARE SET FORTH IN THE CITY'S INVESTMENT POLICY.
UH, SO WITH THAT, I'LL TURN IT OVER TO LAMAR, UH, WHO WILL TALK ABOUT OUR CURRENT, UM, UH, CASH PORTFOLIO AND, UH, WHAT WE'RE DOING CURRENTLY WITH CASH.
SO, KATE, IF YOU COULD ADVANCE ONE SLIDE PLEASE.
UH, CURRENTLY WE, WE HAVE WHAT, 163 MILLION GIVE OR TAKE.
AND, UH, THE, AND ALL OUR DIFFERENT INSTITUTIONS, MOST OF IT IS SITTING IN THE LOCAL POOLS, BUT, UH, WE'RE LOOKING TO MOVE MOST OF THAT INTO T-BILLS.
AND WE HAVE A TBI ANALYSIS AT THE BOTTOM WHERE IF WE MOVED, UH, A, A GOOD CHUNK OF WHAT WE HAVE
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SITTING IN THE POOLS INTO T-BILLS, WE WOULD MAKE AN ADDITIONAL, UH, 99, UH, LESS THAN A HUNDRED THOUSAND DOLLARS IN INTEREST IN MONTH, WHICH ANNUALIZE WOULD BE, UH, 1.2 MILLION, UH, AND EXTRA IN THE CITY'S CULTURES.OUR BUDGET, WE CURRENTLY, OUR OPERATING NEEDS ARE ROUGHLY ABOUT $8 MILLION, UH, A MONTH.
AND WE CURRENTLY HAVE THAT IN, UH, WELLS FARGO, WHICH WOULD BE ENOUGH TO CO COVER MONTHLY OPERATIONS.
AND WITH THAT, I'LL TURN IT OVER TO CHRISTINA COLLATERAL.
SO, UH, RIGHT NOW ALL OF THE CITY FUNDS ARE FULLY COLLATERALIZED.
UM, EVERYTHING THAT'S IN AN INVESTMENT POOL IS FULLY COLLATERALIZED AT THE FUND LEVEL BY THE ENTITIES THAT RUN THEM.
AND THE OTHER ACCOUNTS ARE COLLATERALIZED BY A MIX OF F D I C INSURANCE AND PLEDGE COLLATERAL.
AND AS YOU CAN SEE, WE DO NOT BANK WITH ANY OF THE INSTITUTIONS THAT JUST WENT UNDER.
SO, AND THEN, BUT I'M GONNA TURN IT OVER TO, AND NOW WHO'S GONNA NOW TALK ABOUT THE PROPOSED INVESTMENT STRATEGY.
MAY I ASK A QUICK QUESTION? YES.
SINCE YOU'VE BROUGHT THAT UP MM-HMM.
SO AS YOU, AS YOU SEE, WE, UM, WE ONLY BUDGETED A HUNDRED THOUSAND DOLLARS PER INTEREST THIS YEAR.
BUT AT THE POINT THAT THE BUDGET WAS PREPARED, UH, THE CITY HAD 50 TO 70 MILLION IN CASH.
THEY WERE HOLDING MORE IN OPERATING FUNDS.
OUR OPERATING ACCOUNT EARNED ZERO INTEREST.
INTEREST RATES WERE VERY LOW AT THE BEGINNING OF THE BUDGET SEASON, UH, BACK IN MARCH OF 22 BEFORE THE FIRST RATE HIKE, UH, WE WERE EARNING ALMOST NOTHING, VERY CLOSE TO ZERO, EVEN ON THE TECH POOL AND THE TECHSTAR INVESTMENTS.
UH, SO WHAT WE'RE RECOMMENDING IS THAT, UH, WE MOVE TO A DIFFERENT STRATEGY INSTEAD OF INVESTING IN THESE POOLS THAT AS A CITY WE GO AHEAD AND OPEN A BROKERAGE ACCOUNT.
AND IN THE INVESTMENT POLICY, WHICH IS INCLUDED IN YOUR PACKAGE ON THE LAST, UH, PAGE, I THINK IT IS, IT DOES HAVE THE APPROVED, UM, INVESTMENT, UH, BROKER DEALERS.
UM, AS PART OF THE POLICY, HILLTOP SECURITIES IS ONE OF THESE, UH, COMPANIES THAT IS CURRENTLY APPROVED AS PART OF OUR POLICY.
WE'RE RECOMMENDING, UM, TO OPEN AN IN, UH, A BROKERAGE ACCOUNT THAT WILL ALLOW US TO PURCHASE OUR OWN INSTRUMENTS.
CURRENTLY WE'RE RECOMMENDING THAT WE PURCHASE T-BILLS ONCE WE HAVE THE BROKERAGE ACCOUNT ESTABLISHED.
IT COULD BE THAT COUNCIL WOULD WANT TO INVEST IN SOME OTHER ITEMS. CURRENTLY THERE'S SOME CDS THAT ARE US, UH, BACK CDS THAT ARE, UM, ARE RUNNING ABOUT 5.8%.
BUT I THINK, YOU KNOW, YOU GOTTA START SLOW BEFORE YOU RUN.
SO WE DON'T HAVE THE STRUCTURE BUILT CURRENTLY TO, TO WHERE WE CAN EVEN BUY ANY KIND OF A SECURITY FOR OURSELF BECAUSE WE DON'T HAVE A BROKER TO ACCOUNT.
SO WHAT WE'RE ASKING COUNCIL TO APPROVE IS TO ALLOW US TO OPEN A BROKERAGE ACCOUNT TO PURCHASE, UM, SIX THREE MONTH AND SIX MONTHS CDS AND HOLD, UH, THREE UH, 30 MILLION IN THE POOL.
STILL 10 MILLION IN TECH POOL, 10 MILLION IN TECHSTAR, 10 MILLION IN TECH CLASS.
THAT 30 MILLION WILL ALLOW US FLEXIBILITY SO THAT IF A LARGE CONSTRUCTION PAYMENT COMES DUE, WE CAN DRAW THAT DOWN OUT OF TECH POOL THE NEXT DAY.
SO WE'RE, WE DON'T WANNA PUT EVERYTHING INTO T-BILLS AND TIE IT UP FOR THREE OR SIX MONTHS.
EVENTUALLY WE'D LIKE TO GET TO A LADDERED STRATEGY WHERE WE HAVE T-BILLS OR INSTRUMENTS MATURING EVERY SINGLE MONTH.
IT'LL TAKE A WHILE TO BUILD THAT LADDER STRATEGY TO WHERE YOU HAVE SECURITIES AT DIFFERENT MATURITY DATES.
BUT WE'RE RECOMMENDING INITIALLY, UM, I THINK, UH, THE FOUR MONTH, IF YOU LOOK AT THE RATE SHEET THAT I HANDED OUT, AS OF TODAY, A SIX MONTH T BILL IS AT, PUT MY GLASSES ON HERE, 4.95% AND A FOUR MONTH IS AT 4.91%.
THAT'S NOT THAT MUCH DIFFERENCE.
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WOULD RECOMMEND THAT WE PUT, UM, AGAIN, I NEED TO LOOK BACK AT THE RECOMMENDATION HERE, BUT I GUESS IT DOESN'T MAKE SENSE AT THIS TIME WHEN THEY'RE, WHEN THE YIELD TERMS INVERTED TO DO A LADDER STRUCTURE BECAUSE WE DID, YOU'D ACTUALLY BE PUTTING MONEY IN AT LOWER, LOWER THAN WHAT WE COULD ACTUALLY GET OUT OF THE POOLS LOWER A LONGER TIME.SO UNTIL THAT COMES BACK AROUND AGAIN.
UH, WHAT WE'RE RECOMMENDING IS 112 MILLION IN SIX MONTH TBIS AND UH, 5,000,003 IN, UH, AT THIS POINT WE SAID THREE MONTH T-BILLS.
BUT LOOKING AT THE RATES AS OF TODAY, I THINK THE FOUR MONTH T-BILLS GONNA BE A BETTER DEAL IN FEBRUARY WHEN WE WERE LOOKING AT THE RATES, THE THREE MONTH TBI WAS BETTER THAN THE FOUR MONTH.
AT WHAT POINT DO WE HAVE AN ISSUE WITH THE UH, UH, I FORGET WHAT IT'S CALLED, WHERE WE'VE ARBITRAGE YEAH.
CUZ YOU CAN'T DO THAT TO SOME EXTENT, RIGHT? SO IF WE HAVE ALL THIS MONEY WE DID A YEAR AGO, THE, WHAT WAS IT, 32 MILLION OR WHATEVER MM-HMM.
SO WHAT ARBITRAGE IS, IS IF THE FUNDS ARE NOT OBLIGATED WITHIN THREE YEARS, OBLIGATED MEANS WE HAVE TO ACTUALLY HAVE A CONTRACT IN PLACE WITH A CONSTRUCTION FIRM TO GO BUILD A ROAD OR TO GO CONSTRUCT SOMETHING.
SO IF WE HAVE A PURCHASE ORDER OR A CONSTRUCTION CONTRACT IN PLACE, THAT'S AN OBLIGATION.
CURRENTLY JUST HAVING IT IN THE BUDGET WHERE WE'RE DOING DESIGN WORK AND WE HAVEN'T REALLY OBLIGATED THE MONEY, UM, THEN IF WE HAD HIT THAT THREE YEAR MARK, THEN WE WOULD BE IN AN ARBITRAGE POSITION.
AND WHAT ARBITRAGE MEANS IS THAT YOU'RE EARNING A HIGHER INTEREST RATE THAN WHAT YOU'RE PAYING TO YOUR BOND HOLDERS.
AND WE, THERE IS AN ARBITRAGE CALCULATION THAT WE RUN EVERY YEAR THROUGH A THIRD PARTY.
AND SO FAR THAT ARBITRAGE CALCULATION HAS SHOWN THAT UM, WE'RE PAYING A HIGHER INTEREST RATE THAN WHAT WE'RE RECEIVING.
SO THERE'S NO PAYMENTS CURRENTLY DUE TO ANY BOND HOLDER, BUT ARBITRAGE IS SOMETHING THAT WE NEED TO BE CONCERNED ABOUT.
OF THE 160 MILLION IN CASH, 84 MILLION IS RELATED TO BONDS.
IS THAT, IS THAT WE WOULD HAVE TO WORRY ABOUT IF WE DON'T OBLIGATE IT WITHIN THREE YEARS FROM THE ISSUANCE OF WHAT HAPPENS IF WE DO, IF WE DO MAKE MORE MONEY THAN WON'T PAYLOAD, THEN YOU WOULD OWE MONEY BACK TO, AND I BELIEVE IT'S THE BOND HOLDER OR THE STATE OR I'VE NEVER BEEN IN AN ARBITRAGE POSITION.
SO THERE'S, IT'S JUST YOU HAVE TO PAY BUCK THE DIFFERENCE TO THEM AS AN EXTRA YIELD TO THEMSELVES TO THE BOND HOLDER.
IS THAT CORRECT? TELLING ME, I MEAN IF YOU MAKE AN EXTRA 2 MILLION YOU GOTTA TRY AND GIVE SOMEBODY RIGHT? BUT IT DIDN'T COST THE TAXPAYERS OR ANYTHING.
AND BASICALLY THAT MEANT WE STILL MAINTAINED A ZERO INTEREST ON THAT HOLDING OF THAT MONEY READY TO GO ON OUR PROJECT.
WHAT I WAS ARGUING FOR BACK IN OCTOBER, THAT FIRST PARAGRAPH SEEMS INTERESTING TO ME THAT WE'RE REALLY, THAT WE WERE THAT FAR OFF OR WE JUST WE'RE NOT CONTEMPLATING INVESTING AT ALL.
YOU KNOW, I WASN'T HERE SO I DON'T KNOW WHAT THE THOUGHT PROCESS WAS.
SO CURRENTLY I'M RUNNING A CALCULATION ON 160 MILLION OF BONDS AT ABOUT A 5% INTEREST RATE.
BUT AT THAT POINT IN TIME THERE WAS ABOUT 50 MILLION IN THE BANK AND I THINK THERE WAS 20 MILLION IN OPERATING FUNDS.
SO THERE WAS ONLY 30 MILLION THAT WAS INVESTED, SO SIGNIFICANTLY LESS AMOUNT.
AND IN MARCH OF 22 THE INTEREST RATE WAS LIKE 0.05% OR SOMETHING.
SO THE INTEREST RATE WAS SIGNIFICANTLY LOWER.
ALSO, UM, I'VE NOTICED THIS IN EDC BECAUSE I WANNA SAY MONTHLY, RIGHT CHRISTINA, WE GET 40,000 A MONTH IN INTEREST NOW.
I MEAN USED TO BE LIKE, YOU KNOW, YOU JUST GOT A COUPLE HUNDRED THOUSAND A MONTH JUST IN SALES TAX AND NOW YOU'RE GETTING 40,000 JUST IN INTEREST.
SO THAT CONCLUDES OUR PRESENTATION SUBJECT TO ANY QUESTIONS AND THEN YOU HAVE TIME FOR DISCUSSION AMONG YOURSELVES.
I MEAN THIS SOUNDS LIKE A GOOD STRATEGY TO ME.
UM, I THINK THE RATES HAVE CHANGED MORE DRAMATICALLY, YOU KNOW, OVER THE PAST YEAR THAN THEY HAVE FOR A LONG TIME BEFORE THAT.
AND SO IT'S SOMETHING WHERE I THINK AS WE GET THE QUARTER OF THE REPORTS, WE ALSO NEED TO KEEP REANALYZING EVERY QUARTER.
ARE WE STILL ON THE RIGHT PATH AND, AND HOW DO WE WANT TO ADJUST AS, AS INTEREST RATES CHANGE, AS THE MARKET CHANGES AND ALL THAT.
SO AS LONG AS WE DO THAT AND WE'RE STAYING, I'M COMFORTABLE STAYING IN T-BILLS STARTING TO BRANCH OUT BEYOND THAT, THEN YOU START TO QUESTION WHAT'S THE GUARANTEE, WHAT
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PROTECTIONS DO WE HAVE AND ALL THE REST AND WHAT IS THE RISK, RIGHT? BUT IT SOUNDS LIKE BASICALLY WHAT WE HAVE NOW IS WE'RE GOING TO TECH SCHOOL, THEY'RE BUYING T BILLS AND THEN THEY'RE POCKETING THE DIFFERENCE.SO WE KNOW WHOEVER POCKETS THAT AND WE'RE NOT GETTING IT AND WE CAN GO GET IT.
SO WELL AND THEY ALSO CHARGE A FEE YEAH.
SO YOU, YOU RECEIVE A LOWER INTEREST RATE THAN WHAT YOU WOULD IF YOU DID IT YOURSELF.
SO IT'S, IT'S SAFE, IT'S BACKED BY THE GOVERNMENT SO RIGHT.
IT'S NOT, WE HAVE BIGGER GAMBLING THE MONEY, IT'S, IT'S, IT'S WHAT WE SHOULD BE DOING.
SO, AND WE'LL LEVEL LITTLE LIQUIDITY DOES THIS STILL PROVIDE US, BECAUSE LIKE WE HAD TO COME UP WITH $6 MILLION THIS YEAR THAT WE DID NOT PLAN ON AND YOU KNOW THAT IT'S A BIG ONE.
HOPEFULLY WE DON'T, THAT HAPPENED.
WE JUST TALKING ABOUT 8 MILLION I THINK IN, IN 30 DAY OR FOUR MONTH.
SO WE JUST HAVE TO STRETCH OUT SOME SURPRISE ISSUE.
SO IN TERMS OF LIQUIDITY, WE'RE RECOMMENDING IN WELLS FARGO, WHICH IS THE OPERATING ACCOUNT, WE HAD 14 MILLION HERE, BUT THIS INCLUDED THE 6 MILLION PAYMENT THAT YOU'RE TALKING ABOUT.
PLUS 8 MILLION FOR NORMAL OPERATIONS.
AND THEN YOU'LL NOTICE THIS 30 MILLION HERE, THAT'S ALL, THAT'S THE TECH SCHOOL TECHSTAR AND TECH CLASS.
AND SO YOU CAN DRAW DOWN THOSE NEXT DAY.
WE'RE JUST GONNA LEAVE THAT 30 MILLION IN THOSE GETTING A LITTLE BIT LOWER RATES.
SO YOU HAVE, YOU HAVE INSTANT LIQUIDITY.
INSTANT LIQUIDITY ON 38 MILLION.
AND I WAS SAYING YOU REALLY NEVER WANT TO DO THIS, BUT THERE IS A MARKET FOR SELLING THOSE TWO BILLS EARLY.
IF YOU REALLY HAD TO GET THAT MONEY FOR SOME CRAZY DISASTER, I MEAN WE'D LOSE MONEY ON THAT.
THAT WOULD NOT BE A GOOD IDEA FOR THE CITY.
BUT THAT WOULD NOT BE A GOOD IDEA.
IT'S NOT, IT'S NOT INSTANTLY, IT'S NOT INSTANTLY ACCESSIBLE.
BUT IF YOU HAD SOME CRAZY, CRAZY EMERGENCY WHERE FOR, YOU KNOW, AND I CAN'T EVEN IMAGINE WHAT IT WOULD BE THAT WOULD NEED THAT MUCH MONEY.
AND MOST OF IT YOU HAVE ENOUGH IN POOL TO KEEP GOING AND THAT IS WATER WASTE WATER OR ROAD BOND, WHICH YOU COULDN'T TAKE DOWN FOR OTHER PROJECTS ANYWAYS.
IT'S NOT REALLY LIKE THAT MONEY CAN BE JUST USED FOR SOME OTHER EMERGENCY SOMEWHERE ELSE.
THAT'S HOW WE GOT IN TROUBLE WITH THE AGING BEGIN WITH.
AND WE'RE NOT PUTTING IN LONG TERM, WE'RE JUST LOGGING IT UP FOR MONTHS AND WITH CONSTRUCTION RATES WE'LL KNOW WHEN THOSE PROJECTS ARE GOING FOR FUNDING AND THEN WE'LL LET THEM DRAW DOWN AND THEN WE WON'T PUT THAT NEXT, THAT BIG TRANCHE THE NEXT TIME.
MAYBE INSTEAD OF BUYING YEAH, A HUNDRED MILLION YOU BUY 80 MILLION WORTH THE SIX MONTHS.
CAUSE WE NOW KNOW WE'RE ABOUT TO HAVE A 20 MILLION CONTRACT TO GO HAVE WHOEVER PAY WHATEVER ROAD.
WHAT I WOULD RATHER DO IS GO AHEAD AND LADDER RIGHT NOW EVERY MONTH FOR SIX MONTHS.
BUT WHAT A LADDER MEANS IS YOU BUY ONE MONTH, A TWO MONTH, A THREE MONTH, FOUR MONTH, SOMETHING TO REPLACE THE FIVE MONTH CAUSE THERE'S NO SUCH THING
AND THEN, AND THEN A SIX MONTH AND THEN A SIX MONTH.
AND THEN NEXT MONTH WHEN THAT ONE MONTH EXPIRES YOU BUY A SIX MONTH AND THEN AS THE TWO MONTH EXPIRES YOU BUY A SIX MONTH AND BEFORE LONG YOU JUST HAVE A ROLLING ONE SIXTH OF YOUR INVESTMENT PORTFOLIO IS COMING DUE EVERY SINGLE MONTH AND YOU'RE BUYING ANOTHER SIX MONTH TBI WITH IT.
IT ARBITRAGES ALSO TO THE, OUR BENEFIT IF THE INTEREST RATES RISE AGAIN IN THE NEXT SIX MONTHS.
AND WHO HERE THINKS THAT INTEREST RATES ARE DONE RISING.
SO, SO IF THE INTEREST RATES GO UP, IT ALLOWS US TO BE ABLE TO TAKE ADVANTAGE OF THAT.
BUT NUMBER TWO TO THE LIQUIDITY ISSUE IS THAT YOU DON'T HAVE 112 MILLION LOCKED UP FOR SIX MONTHS.
AT THE END OF THE DAY, WE'RE, WE'RE NOT, WE'RE NOT AN INVESTMENT BANK.
YOU KNOW, WE'RE SUPPOSED TO BE SPENDING THIS MONEY AND THE LONGER THAT WE HOLD THE MONEY, THE LESS PURCHASING POWER IT HAS BECAUSE I GUARANTEE YOU THAT THE UH, INFLATION RATE IS MUCH HIGHER THAN WHAT WE'RE GONNA BE ABLE TO.
I'M NOT, I'M NOT, I'M NOT DISPUTING THAT I JUST WOULD NOT DO A ONE MONTH.
AND THE REASON WHY IS YOUR TAX POOL ACCOUNT ALREADY EARNS HIGHER THAN THAT.
THE POINT IS THAT THE DISCIPLINE IS TO GET IT SET UP.
SO FOR TWO OR THREE MONTHS YEAH YOU'RE, YOU'D BE EARNING A LITTLE BIT LESS BUT YOU GET THE DISCIPLINE SET UP TO WHERE YOU'RE DOING IT NOW.
BECAUSE IF YOU DON'T, IF YOU WAIT AND YOU SAY I JUST BUY THREE MONTHS, WELL THEN YOU NEED TO BUY THREE FOR SOMETHING TO REPLACE FIVE.
I GUESS THAT'S A FOUR AT THAT POINT IN TIME, BUT WHATEVER.
UM, A SIX AND THEN NEXT MONTH I NEED TO ONLY PUT A SIX THEN EACH OF THOSE AND NEXT MONTH I NEED TO GO BUY ANOTHER SIX MONTH AND JUST LEAVE IT AT MY TEXT POOL.
BUT THE POINT IS, IS NOT TO ONLY BUY THREE MONTH AND SIX MONTHS.
YOU GO AHEAD AND START SETTING IT UP.
IF YOU DON'T, IF YOU DON'T WANT TO DO ONE MONTH, TWO MONTH NO, I WAS SAYING DO 2, 3, 4, 6.
I'M JUST SAYING I WOULDN'T DO ONE CUZ IT'S ALREADY LOWER THAN OUR TEXT POOL ACCOUNT, WHICH IS INSTANTANEOUS.
SO, SO YOU WOULD DO 2, 3, 4, 6 NEXT YEAR, I MEAN NEXT MONTH.
SO SORRY, NEXT MONTH YOU WOULD BUY ANOTHER SIX AND YOU WOULD BUY A FOUR TO REPLACE THE FIVE SLOT.
AND THEN YOU WOULD HAVE BASICALLY YOUR, YOUR MM-HMM
I JUST SAY, BUT I DON'T WANT TO DO IS 112 MILLION IN SIX MONTHS.
YOU KNOW, I WANT TO GO AHEAD AND GET THE DISCIPLINE SET UP BECAUSE HERE'S WHY THAT THAT 120 MILLION OR, OR HOWEVER MUCH IT IS TOTAL NEEDS
[00:20:01]
TO BE GETTING DRAWN DOWN OVER TIME BECAUSE WE NEED TO BE DOING THINGS WITHOUT MONEY RATHER THAN, YOU KNOW, JUST HOLDING IT AND INVESTING IT.SO IT MAY BE THAT NEXT TIME YOU HAVE A 18 MILLION T BILL COME DUE AND YOU'RE GONNA BE LIKE, AH, BUT WE'RE, WE'RE GONNA GO BUILD THAT ROAD SO WE'RE NOT GONNA REINVEST 18 MILLION, WE'RE REINVEST 1 MILLION MM-HMM
SO THIS BEING NICE AND PRETTY IS ONLY GONNA BE HERE AT THE BEGINNING AND THEN AFTER THAT IT'S NOT GONNA BE NICE AND PRETTY ANYMORE.
ONCE WE START ACTUALLY NEEDING TO SPEND THE MONEY TO DO STUFF IS USUAL.
I GOT A DIFFERENT TAKE GO FOR IT.
UM, I DON'T KNOW WHY WE DO ANY KIND OF LADDERING AND UNTIL AT LEAST WE SEE WHAT DOES THIS, WHAT DOES THIS DISCIPLINE COST US? BECAUSE IF YOU'RE TALKING ABOUT INSTEAD OF PUTTING MONEY 10 MILLION OR 20 MILLION AT A 4.95 RETURN, YOU CAN PUT A 4.56, WHAT IS 53 BASIS POINTS YOU'RE NOT GETTING, WHAT DOES THAT COST? AND IF YOU TELL ME OVER 20 MILLION, IT'S $150,000 I'D SAY FOR 150 GRAND FIGURE A DIFFERENT WAY TO GET THE DISCIPLINE OUT BECAUSE IT'S JUST COSTING MONEY.
AND SO TO ME YOU WOULD DO FOUR AND SIX MONTHS AND THEN YOU WOULDN'T SET A POLICY IN JUST A CERTAIN WAY BECAUSE FOR ALL WE KNOW, THREE MONTHS MAY ALL OF A SUDDEN SPIKE WHEN IT COMES TIME AND THEN I'D HATE FOR SOMEONE TO BUY A FOUR MONTH THAT PAYS LESS BECAUSE THAT'S WHAT WE PUT IN THE RULES INSTEAD, YOU BUY THE THREE MONTH AND THEN HOPEFULLY THIS CHANGES AND THEN IT'LL COME BACK AND GO, WE'D LIKE TO PUT 5 MILLION IN A ONE YEAR BECAUSE NOW THE ONE YEAR PAYS MORE AND WE SAY, WELL WE DON'T WANNA GO ABOVE ONE YEAR OR WHATEVER.
BUT I'D LIKE TO LOOK BE MORE FLEXIBLE AND LOOKING AT IT AND ACTUALLY SEE WHAT DO THESE, WHAT ARE THE RETURNS ON ALL THESE TRA CALL 'EM TRANCHES YOU'RE GONNA DO AND WHAT THEY'RE ALL GONNA BE BECAUSE YEAH, LIKE THEY, BETWEEN ONE MONTH AND SIX MONTH IS, YOU KNOW, WHAT IS THAT 79 BASIS POINTS? YEAH, WELL BUT THAT'S OVER A 12 YEAR MONTH PERIOD.
WE'RE TALKING A ONE MONTH ROTATION.
SO YOU'RE TALKING NOT THAT MUCH CUZ YOU HAVE TO BUY THAT BY 12 AND THEN DO THAT IS YOUR BASIS POINT DIFFERENCE BETWEEN THE TWO? POTENTIALLY, I WOULDN'T SAY OVER 12 BECAUSE IF YOU MONTH THIS NUMBER IS A 12 MONTH RATE NUMBER, THEY'RE NOT PAYING 4% MONTHLY.
BUT IF YOU THROW IT IN A ONE MONTH, THEN YOU CAN'T THROW IT IN THE SIX MONTH AND IN A MONTH THE SIX MONTH MAY CHANGE.
AND THE WAY, I MEAN THIS HAS ALREADY DROPPED, SOME OF THESE HAVE ALREADY DROPPED, YOU KNOW, UH, 30 BASIS POINTS OR SOMETHING TO THIS WHOLE DEAL JUST IN THE PAST MONTH IN 21 DAYS.
SO ALL THAT THINGS COULD CHANGE TO WHERE YOU JUST GOTTA BE CAREFUL BECAUSE LIKE I, I'M NOT SAYING WE SHOULD GO 30 YEAR, BUT SOMETHING'S GONNA CHANGE ON THE, IT HURTS BECAUSE UH, LIKE ANNE SAID, THIS IS LIKE NOT NORMAL, IT'S NOT NORMAL.
10 INVEST MONEY IN THREE MONTHS, YOU GET A BETTER RETURN IN 30 YEARS, YOU'RE SUPPOSED TO GET A BETTER RETURN 30 YEARS CUZ YOU CAN'T TOUCH IT FOR A LONG TIME.
SO, SO LET LET ME JUST BE COMPLETELY CLEAR IN, IN THE WAY THAT THE REALITY OF THIS IS ALL YOU'RE TRYING TO DO IS BEAT THE TAX POLLS BECAUSE IF YOU, IF YOU'RE NOT TRYING TO BEAT THE TAX POLLS, YOU MIGHT AS WELL JUST LEAVE IT IN THE TAX POLL.
CAUSE THEY'RE, THEY HAVE, THEY HAVE VERY WELL PAID INVESTMENT MANAGERS WHO ARE MANAGING THAT PORTFOLIO.
SO ALL YOU'RE TRYING TO DO IS GET THAT.
IS TO GET THAT SPREAD AND THAT'S WHAT YOU'RE AFTER.
BECAUSE TO YOUR POINT, AND YOU'RE RIGHT, YEAH.
IF YOU PUT EVERYTHING IN A YEAR, YOU'RE GONNA, YOU KNOW, YOU MIGHT MAKE MORE THAN THE SIX MONTH IF YOU PUT EVERYTHING IN UH, CORPORATE TAX NOTES, YOU'LL MAKE MORE THAN THE T-BILLS SO YOU CAN MAKE MORE MONEY.
BUT THAT'S NOT REALLY WHAT WE'RE IN THE BUSINESS TO DO.
WE'RE TRYING TO EITHER, EITHER HAVE A SIMPLE STRATEGY THAT WE CAN FOLLOW THAT WILL BEAT THE, THAT WILL EFFECTIVELY CAPTURE THE, THE COST THAT WE'RE PAYING FOR THE TAX PULL TO MANAGE MO ALL, ALL OF OUR MONEY AND BY DOING SOME OF IT OURSELVES.
AND THAT'S WHY EVEN THOUGH IT MAY NOT BE THE MOST EFFICIENT AND MAKE THE MOST MONEY TO HAVE A LADDER POSITION THAT JUST ROLLS.
UM, AND THEN YOU DRAW DOWN THE, THE DOLLARS AS YOU NEED IT TO.
IT, IT CERTAINLY IS EFFECTIVELY THE SAME THING.
IT'S JUST YOU'RE NOT HAVING TO PAY FOR THE MANAGEMENT OF THE TEXT POLL.
CAUSE THAT'S WHAT TEXT POLL'S DOING.
THEY'RE DOING EXACTLY THE SAME THING.
THEY SAID THEY HAVE A TEAM OF THOUSANDS OF ACCOUNTS
BUT THESE RATES ARE AFTER FEES, RIGHT? NO, NO, NO.
THOSE ARE THE, THE TAX POOL RATES ARE AFTER FEESS ARE AFTER FEES.
THE TEXT POLL, BUT IT SAYS 4.59 ON TEXT CLASS THAT'S AFTER ALL FEES.
SO I AGREE WITH YOU, I WOULD NOT INVEST ANYTHING LESS THAN LIKE IF WE WERE MAKING A DECISION RIGHT TODAY AND WE HIT THE BUTTON, I WOULDN'T DO ANYTHING LESS THAN 4.59 CUZ THIS IS INSTANT.
AND IF YOU, IF YOU DO ANYTHING LESS THAN THAT.
SO I WOULDN'T DO ANY ONE MONTH.
I WOULDN'T DO ANY TWO MONTH BECAUSE WHY WOULD YOU MAKE LESS WHEN YOU CANNOT? BECAUSE, BECAUSE WE'RE NOT GONNA PUT ALL OF IT IN TEXAS CLASS.
YOU WANT IT DIVERSIFIED BETWEEN THE TEXTBOOK TEXT R AND THOSE ARE AT 4.2.
SO AT TWO MONTH IS STILL 4.5 AND WHAT THEY'RE ACTUALLY EARNING.
DOES THAT NEED TO BE DIVERSIFIED? WHAT WHAT'S THE DIFFERENCE? LESS RISK.
IT'S ALSO FELT ALL ABOUT DIVERSIFY RISK.
SO IF ONE GOES DOWN OR TAKES A DIVE, YOU HAVE TO, YOU CAN NEVER GET RID OF ALL RISK THAT YOU CAN GET RID OF.
[00:25:01]
YOU CAN DIVERSIFIED ASK WHAT IS IN THE TEXT PULL TEXT STAR AND TEXT CLASS.LIKE IT'S ONE UNDER THE STOCK MARKET.
NO NONE OF 'EM ARE IN THE STOCK MARKET.
IT'S MAINLY T-BILLS IS WHAT THEY'RE BUYING INSTRUMENTS THAT ARE BACKED BY THE FULL FAITH OF THE US GOVERNMENT AND BECAUSE THEY'RE ALL TAKING MUNICIPAL DOLLARS.
SO THEY'RE LIMITED ON HOW THEY CAN INVEST THOSE DOLLARS.
SO, AND I THINK TO YOUR POINT, THERE IS A COST OF OVER COMPLICATING THINGS IF WE TRY TO, TO ADD MORE COMPLICATION ON OUR OWN STAFF TO TRY TO FIGURE OUT, YOU KNOW, HOW TO, HOW TO MAXIMIZE EVERY SINGLE PENNY.
I THINK THERE'S A COST TO THE, THE TIME AND THE EFFORT THAT THEY'RE SPENDING IN THERE VERSUS WHAT IT'S WORTH TO JUST GET ON THAT ROLLING UM, SCHEDULE.
I MEAN CUZ IT, CUZ IF WE MAY LOSE A LITTLE BIT FOR THE FIRST COUPLE OF TIMES BECAUSE YOU'RE DOING A ONE MONTH AND A TWO MONTH, BUT EVENTUALLY IT'LL ALL BE SIX MONTH.
WELL EVENTUALLY IT'LL ALL BE SIX MONTH.
BUT IT'S, IT'S VERY NICE AND PRETTY AT THE BEGINNING BECAUSE WE HAVE A BIG CHUNK OF MONEY THAT WE'RE GONNA DIVIDE UP AND GO INVEST BUT IT'S NOT GONNA STAY THAT WAY.
AND IT'LL BE, IT WON'T BE LONG BEFORE YOU HAVE 20 MILLION INVESTED THIS MONTH FOR THE NEXT SIX MONTHS MAYBE.
OR YOU'RE HOLDING BACK SOME OF THAT IN THE TEXT POLL CUZ YOU'RE LIKE EH, I DON'T REALLY NEED TO PUT ALL 20 MILLION IN THAT CUZ NEXT MONTH I NEED, YOU KNOW, EIGHT OF THAT 20 MILLION SO I'M GONNA PUT EIGHT OF IT ASIDE AND LET IT SIT IN TEXT POLL AND IT WON'T BE LONG BEFORE ALL OF THOSE NUMBERS ARE ALL WONKY.
BUT EVERY SIX MONTHS WE HAVE YEAH.
THE THE BENEFIT OF DOING THAT IS THAT YOU CAN POTENTIALLY BEAT WHAT TECH POOL'S DOING FOR YOU BECAUSE YOU'RE NOT HAVING TO PAY THE OVERHEAD FOR, FOR THE FUND MANAGEMENT.
YOU KNOW, I WAS A BROKER, I SOLD THIS STUFF SO I KNOW I GOT PAID SO YOU WILL PAY BROKERAGE FEES, BUT THE BROKERAGE FEES ARE GENERALLY NOT AS HIGH AS A MANAGED FUND IS JUST BECAUSE THEY HAVE STAFF AND BUILDINGS AND ALL THE THINGS ALL THE OVERHEAD.
SO THEY'RE PROBABLY ACTUALLY EARNING 30 TO 50 BASIS POINTS MORE THAN WHAT THEY'RE PAYING US.
YOU KNOW, BUT THEY HAVE, YOU KNOW, SEVERAL BILLIONS OF DOLLARS INVESTED.
SO, YOU KNOW, HALF A BASIS POINT ON A SEVERAL BILLION DOLLARS IS NOT A SMALL NUMBER AND THEY'RE ABLE TO, TO DO, SO IF YOU CAN GET UP OVER THE, THE TAX POOL RETURN BY BASICALLY MANAGING THIS, THEN YOU'RE, YOU'RE EFFECTIVELY CAPTURING WHAT YOU'RE PAYING THEM TO DO ALL THE WORK.
WHAT'S 20 MILLION'S, 20 MILLION INTEREST? IT'S 79 FAR AS WHAT IS THAT A YEAR? CAUSE THAT'S REALLY WHAT IT COMES DOWN TO, RIGHT? HOW MUCH IS THAT? CAUSE IF IT'S 15,000 IT'S NOT WORTH SCREWING WITH BUT IF IT'S THAT'S 15,800 OVER A 12 MONTH PERIOD, YOU'D ONLY GET HALF OF THAT.
SO THAT'S NOT, THAT'S NOT THAT BIG OF A THING.
THAT'S WHY I SAID IF YOU SAW IT ON PAPER YOU SAY DATA.
TO ME WHEN YOU MAKE BUSINESS DECISIONS YOU HAVE IT KINDA LIKE THIS.
YOU HAVE THINGS AND YOU YEAH, WELL THAT'S WHY WE'RE WORK SHOPPING.
SO KIND OF GET AN IDEA OF WHAT, WHAT Y'ALL THINK YOU WANT SEE WHEN WE LEAVE HERE ALL OF A SUDDEN LIKE OKAY WE'RE GONNA GO DO SOMETHING.
AND SO THAT'S WHY I WAS LIKE THE ONE MONTH I'M NOT OKAY WITH CUZ IT'S UNDER THE TEXTBOOK ACCOUNT.
SO ANY OR ALL THREE OF 'EM ARE ARE HIGHER IN ONE MONTH.
THE REASON EDCS GOT IT BECAUSE WE'RE TALKING LIKE FOUR, FOUR AND A HALF OR SOMETHING.
YOU'RE GETTING THE FULL RETURN OFF JUST THE 0.79.
WELL IF WE DO IT RIGHT, WE'LL SPEND ALL THE MONEY.
WE WON'T HAVE A HUNDRED CAUSE LIKE APPARENTLY WE DON'T HAVE, WE CAN'T ANYBODY BID ON PROJECTS OR SOMETHING CAUSE WE DON'T HAVE MONEY BUT WE HAVE 163 MILLION IN CASH.
SO WHOEVER'S TELLING US THAT WE CAN'T GET A PROJECT BID OR DESIGN UNLESS WE HAVE MONEY IN THE BANK, I, I THINK IT'S PRETTY CLEAR WE HAVE 163 MILLION SO WE NEED TO STOP.
I DON'T KNOW OF ANY PROJECTS THAT WE'RE NOT ABLE TO DO BECAUSE OF LACK OF FUNDS.
WE PRETTY MUCH HAVE EVERYTHING UNDERWAY.
WE JUST, SOMEONE HAS TOLD US THAT WE CAN'T EVEN GET A BID FROM A COMPANY UNLESS WE HAVE THE MONEY READY TO GO.
AND SO I'M HERE TO SAY I THINK 163 MILLION OFF PRETTY MUCH COVER ANY, ANY KIND OF BID PROJECT WE'RE THROWING OUT ANYTIME SOON.
NOT ALL OF THAT IS UNENCUMBERED, BUT YEAH, I I KNOW WHAT YOU'RE SAYING.
I THINK THAT COMMENT WAS MADE BEFORE WE TOOK DOWN 37 MILLION THOUGHTS TOO.
THIS WAS 126 MILLION WE HAD BEFORE WE TOOK THE 37.
YEAH WE, WE'VE DONE IT AND A LOT OF THAT.
BUT A LOT OF THAT IS WATER WASTEWATER IMPROVEMENTS.
I'M JUST, I'M JUST SAYING WELL WE ADDED AT SOME POINT WE EVERYTHING SPLIT OUT SO WE KNOW YEAH IT WAS 75.
SO BEFORE, BEFORE THE COUNCIL VOTED TO ISSUE THE BONDS IN THE FALL OF 22 THERE WAS ABOUT 50 TO 55 BILLION IN
[00:30:01]
THE BANK SO TO SPEAK, IN THE BANK OF, OF CASH ASSETS OF WHICH MOST OF THOSE WERE ENCUMBERED FOR OTHER PROJECTS.SO YOU'VE, YOU'VE ADDED TO AND THEN OF COURSE WE'VE HAD BETTER THAN EXPECTED SALES TAX AND SOME OF THE OTHER THINGS THAT HAVE HELPED WITH THE, YOU KNOW, WHERE THE FUNDS EXPECTED INTEREST.
SO WE'RE ADDING THE NEXT BUDGET MEMO'S GONNA ADD APPROXIMATELY 6.1 MILLION IN INCOME TO THE INTEREST LINE.
I'LL BE HAPPY THIS SOUNDS A LITTLE HIGH BUT YEAH THAT'S WHAT IS SIX MAY DOESN'T HAVE TO BE 60.
WE CAN BUMP IT TO FIVE IF WE'RE AT A HUNDRED THOUSAND.
IT SEEMS TO ME LIKE IF WE'RE GONNA, I MEAN THAT'S 1.2 MILLION A YEAR, NOT 5 MILLION A YEAR.
A HUNDRED THOUSAND A MONTH, HUNDRED THOUSAND TIMES 12, 1.2 MILLION.
NO, BUT I THOUGHT ESTIMATE FOR, UNLESS THE NEXT FISCAL YEAR ESTIMATE FOR 2023 FISCAL YEAR IS 6.2 MILLION INTEREST 1.1 RECEIVED IN QUARTER ONE, 1.6 AND QUARTER TWO THREE.
WHAT'S, WHAT'S THAT TALKING ABOUT? THAT'S SIX POINT.
BUT THAT WASN'T IN THE BUDGET THOUGH.
AND TO HAVE TO ANSWER WHAT HER PROJECTIONS ARE ABOUT IN THE 22 BUDGET THERE WAS A HUNDRED THOUSAND BUDGETED FOR INTEREST INCOME ACROSS ALL FUNDS.
FOR ENTIRE FOR THE ENTIRE YEAR.
AND SO WE'RE CURRENTLY ESTIMATING THAT WE WILL BRING IN, IF WE CHANGE OUR INVESTMENT STRATEGY ABOUT 6 MILLION.
SO THAT I WANT TO PUMP THE BRAKES ON BECAUSE UNTIL I HAVE A CASH FLOW ANALYSIS, I CAN'T GUARANTEE THAT WE'RE GONNA HAVE THAT MUCH MONEY INVESTED IN THE BANK MAKING ANY AMOUNT OF RATE RETURN BECAUSE HE MAY NOT STAY THE 12 MONTHS CUZ HE IS GONNA HAVE TO TRANSFER, MAY NOT HAVE $120 MILLION.
YOU, WE MIGHT LET YOU KNOW WE MIGHT HAVE 50 MILLION AFTER WE DO 70 MILLION WORTH OF PROJECTS.
AGAIN 50 MILLION IS NOT GONNA EARN SIX MONTHS SOMETHING A YEAR.
SO SHE'S TALKING ABOUT ALL OF NEXT YEAR, 2023 FISCAL YEAR.
THE BUDGET FOR INTEREST INCOME ACROSS ALL FUNDS WAS BUDGETED AT A HUNDRED THOUSAND DOLLARS.
THAT'S YEAR ENDING SEPTEMBER 30TH, 2023.
SO BETWEEN OCTOBER AND DECEMBER MM-HMM
I MISUNDERSTOOD WHAT SO WHAT I WAS SAYING IS WE MAY DO A MID-YEAR BUDGET AMENDMENT TO ADD 2.5 MILLION OR WHATEVER THE NUMBER IS AS OF APRIL 1ST BECAUSE WE'LL BE HALFWAY THROUGH THE FISCAL YEAR THAT'S NOT BUDGETED AND WE'LL ADD IT BACK TO OUR ROLE WHICH WILL HOPEFULLY GO TO OUR UNENCUMBERED GENERAL FUND BALANCE OR GET REINVESTED IN THE STRATEGY.
WELL I WOULD IMAGINE A LOT OF THAT HAS TO GO TO THE UTILITY FUND.
ALL I'M SAYING IS IT WON'T ALL GO GENERAL FUND SO I DON'T, I DON'T WE ANTICIPATED BUDGET AMENDMENT.
NOW THAT WE HAVE NEW INFORMATION, YOU'LL HAVE ALL THE, WE SHOULD ADJUST OUR BUDGET ACCORDINGLY IN THE UTILITY FUND.
WE THINK WE'RE NOW GONNA EARN 3.8 MILLION.
SO THE INTEREST HAS TO GO TO THE FROM THE FUNDED FROM CORRECT.
WE ANTICIPATED THAT YOU MIGHT HAVE THIS QUESTION.
WELL AND AND ACTUALLY IT WAS JAMES THAT ANTICIPATED YOU MIGHT HAVE THIS QUESTION SO WE ACTUALLY DIAGRAMMED IT OUT FOR HIM AND MAKE COPIES FREE.
I'M NOT PROPOS, I'M PROPOSING ADDING THE INCOME.
I'M NOT PROPOSING TO SPENDING THE I UNDERSTAND, I UNDERSTAND.
I'M JUST SAYING THAT WAY AT THE END OF THE YEAR.
THAT'S NOT THE ONLY THING THAT'S UP.
SO THE SALES TAX NUMBERS ARE ALSO UP.
CAUSE WHAT I DON'T LIKE IS AT THE END OF THE YEAR, BOBBY TAXES DOWN.
WHAT I'M SAYING IS, I DON'T WANNA SAY AT THE END OF THE YEAR AND ALL OF A SUDDEN WE GO, THERE WAS A, A COUNCIL IN MULLAND SOUTH CAROLINA YEARS AGO THAT INSTITUTED $30 A YEAR TRASH SERVICE CAUSE THEY THOUGHT THEY WERE GONNA BE SHORT ON REVENUE END OF THE YEAR A MILLION SOMETHING UP AND EVERYBODY GOT REPLACED.
AND I'M JUST SAYING IF WE'RE GONNA DO BUDGET AMENDMENTS, IF WE'RE ACCURATE THAT WAY WE DON'T COME AT THE END OF THE YEAR AND GO I WAS SURPRISED WE MADE 10 MILLION EXTRA PEOPLE ARE GONNA BE REALLY UPSET IF WE DIDN'T DO THINGS.
BUT IF WE, YOU KNOW, CARRY MALONE.
NOW MY ONE QUESTION IS ON THIS MM-HMM
CAUSE I ALMOST FEEL LIKE YOU SHOULD SUBTRACT THE INTEREST YOU EARN OFF OF THE INTEREST PAYMENT YOU'RE PAYING.
WE'RE NOT NETTING OUT AND WE'RE NOT DOING THAT.
I'M NOT SAYING YOU CAN'T FOR FOR NARRATIVE PURPOSES.
NO, THIS MATH ISN'T NA ISN'T ISN'T OH I GET THAT.
BUT I'M SAYING WE SHOULD HAVE I PART PART OF IT, I'D LIKE TO HAVE THAT NARRATIVE CONVERSATION BECAUSE THERE'S BEEN A LOT OF CONFUSION IN THE PUBLIC OF HOW MUCH MONEY WE WASTED BECAUSE WE TOOK A BOND AT A CERTAIN TIME AND I WANT TO SHOW OUT THAT WE'RE BASICALLY NETTING OUT AT ZERO.
AND THEN WE HAVE THREE YEARS TO ENCUMBER THOSE FUNDS BECAUSE WHAT I WAS TRYING TO EXPLAIN IN OCTOBER, UM, AND IT'S EXACTLY HOW IT PLAYING OUT WHAT I SAID.
BUT IN OCTOBER, KEEP IN MIND YOU'RE USING INFORMATION IN MARCH WITH RATES TODAY THAT WE JUST HEARD THE RATES TODAY ARE LESS THAN THEY WERE IN OCTOBER.
AND SO YOU'RE SAYING OH YEAH I KNEW ALL THIS WAS GONNA HAPPEN AND I WANT THE PUBLIC TO KNOW BUT
[00:35:01]
IN OCTOBER WE DIDN'T KNOW RATES WERE GONNA KEEP GOING UP THE WAY THEY WERE.AND SO I BELIEVE WHEN THE FED SAID THEY WERE GONNA RAISE IT A ONE WELL I'M JUST SAYING YOU CAN'T USE TODAY'S INFORMATION TO GO BACK AND SAY WELL SEE HOW I WAS.
CUZ I KNEW ALL THIS STUFF WAS GONNA COME.
I THINK YOU JUST HAVE, WE'VE ALREADY BUDGETED THE INTEREST EXPENSE AND YOU COME IN AND THE INTEREST.
I'M NOT SAYING TO SAY THAT WAS RIGHT.
WHAT I'M SAYING IS YOU CAN COME IN AND SAY THE NARRATIVE THAT SAYS BECAUSE WE HAVEN'T DONE THIS ROAD PROJECT, WE'VE WASTED MONEY THAT WE'RE LOSING MONEY FOR THE CITY IS NOT A TRUE STATEMENT TODAY BASED ON WHAT'S GOING ON IN THE MARKET.
WE ARE CURRENTLY AT A ZERO COST DOLLAR FOR THOSE FUNDS.
SO I MEAN WE WEREN'T ANTICIPATING WASN'T, IT WAS OKAY, I DIDN'T ANTICIPATE RATES GOING UP QUITE LIKE THIS.
IT WAS FORECASTED FROM THE FED AND DO YOU TRUST HIM OR NOT? YOU KNOW, BUT, AND THE REASON IT DROPPED DOWN THIS MONTH IS BECAUSE OF WHAT HAPPENED.
BUT WHAT HAPPENED DIDN'T, BUT WHAT HAPPENED IN THE THE RACE IN MARCH IS BECAUSE WHAT HAPPENED WITH THE, LIKE THE BANK AND THE THE SILICON VALLEY BANK ITSELF, WE OBVIOUSLY SHOW TOO MUCH MONEY BEING MADE IN INTEREST.
SOMEONE'S GONNA BE UPSET WHEN WE'D SAY WE NEED MONEY FROM 'EM BECAUSE THEY'RE GONNA SAY WE'LL TAKE ANOTHER ONE OF YOUR ACCOUNTS YOU MADE.
SO THERE'S A LOT OF THINGS YOU GOTTA PAY.
I GET PAY ATTENTION TO TO MAKE SURE WE HAVE MONEY EARMARKED, BUDGETED REALLY WELL THIS NEXT YEAR SO THAT WE'RE NOT SHOWING HUGE GAINS.
CUZ THEN PEOPLE ARE GONNA SAY WELL THEN WHY ARE YOU, WELL YOU CAN'T GET A GAIN BECAUSE WE ALREADY SHOWED THE, BECAUSE OF THE, WE HAVE TO THEN PAY BACK THE BOND IF WE HAVE ZERO NET COST ON DEBT, PEOPLE MAY ASK WHY DO YOU WANNA SELL MORE DEBT IF YOU'RE NOT USING THE DEBT YOU HAVE AND YOU'RE, YOU'RE GOING TO.
THAT'S I'VE ALREADY BUDGETED STUFF.
YOU KNOW HOW MANY THINGS TONIGHT WE'RE PLANNING ON ON A CONTENT AGENDA ITEM WE LAUNCH OFF IN DESIGN MAYOR PRO TIM AND I HAVE BUDGETED THE SAME THREE ROAD INTERSECTIONS FOR FOUR YEARS IN A ROW.
I JUST WE'RE GETTING READY TO BUDGET SOME OF THEM FOR THE FIFTH YEAR SO THAT'D BE YEAH AND WE'RE GONNA MAKE SURE THAT IT HAPPENS TO CAUTION CAN CHART, WE'VE GOT CITY ENGINEER WE THE ARGUMENTS THAT HAVE WHAT HAD HAPPENED IN THE PAST IF NOT WHERE WE ARE TODAY.
I AGREE THAT YOU LOOK BACK AT THAT AND SAY OKAY NOW WHERE HAVE WE PIVOTED AND HOW WE CHANGED THINGS AND WE'VE DONE THOSE THINGS NOW WE JUST NEED TO SEE THE FRUIT OF THAT.
BUT IT DOES TAKE SOME TIME BECAUSE WE STILL HAVE A RIGHT OF WAY ACQUISITION WE GOTTA DEAL WITH AND SOME STUFF THAT WAS NOT BEFORE I GOT ON COUNCIL WE HAD THAT PROBLEM.
SO ANYWAYS, ANY OTHER QUESTIONS ON LET US TAKE OUT BONDS PER, THAT'S THE OTHER PROBLEM WE HAD IS RIGHT.
SO YOU'RE CLAIMING WHAT THE GAME CHART SAYS.
IT REALLY MATTERS WHAT THE ATTORNEY GENERAL SAYS.
IF HE SAYS NO, YOUR GANT CHART CAN SAY WHATEVER IT WANTS TO SAY AND YEAH BUT THAT'S WHY NOTHING GOT DONE FOR THREE YEARS CUZ THE FOR ATTORNEY GENERAL WASN'T RIGHT APPARENT.
SO IT'S NOT NECESSARILY THIS COUNCIL MEMBER OR THAT COUNCIL MEMBER.
IT WAS JUST NO, THAT'S WHAT I'M SAYING.
IT'S JUST AS AUDIT WE GOTTA START BEING ON THE SAME PAGE ON WHY RON DIDN'T GET DONE FOR TWO YEARS BUT IN THAT TIME NO ONE SAID WE COULDN'T LIKE, YOU KNOW, GET THE PAPERWORK READY FOR RIGHT OF AWAY OR WE CUTTING THE ENGINEERED SOMETHING.
SO THERE'S A LOT OF THINGS WE COULD HAVE DONE.
OBVIOUSLY WE, LIKE YOU SAID, WE'VE CHANGED A LOT OF THINGS BUT I JUST WOULDN'T SAY IT GANT CHART NECESSARILY FIXES IT CUZ WE'RE STILL GONNA HAVE TO MAKE SURE, I'M NOT SAYING I DON'T DOUBT THAT WE'RE CLOSER TO HAVING THEM DONE THAN WE EVER WERE BEFORE.
BUT EVERY YEAR AS I, AS I WATCHED SOME OF THESE AND PARTICIPATED IN SOME OF THEM EVERY YEAR SOME THINGS WERE FIXED AND EVERY YEAR IT WAS, THIS IS THE YEAR IT'S GONNA HAPPEN AND IT HASN'T HAPPENED YET.
SO UNTIL IT HAPPENS, BELIEVE A LOT OF PEOPLE HAVE A LOT OF DOUBT.
THE ROAD THING, IT'S GONNA BE A BIG PICTURE FOR THE CITY.
I I AM LOOKING FORWARD TO THE COMPLAINT SHIFTING TO WHEN IS THIS CONSTRUCTION GOING FORWARD?
AND THEN YOU WOULD NEED TO TELL US WHAT THE STRATEGY IS IN TERMS OF FOUR MONTH OR SIX MONTH OR HOW MUCH OR THE, THE 1, 2, 3, 4, 5, 6 GIVE TABULAR FORMATS WHAT THE, WITH THE PROJECTED RETURNS ON THE DIFFERENT STRATEGIES AND THEN THEY CAN JUST PICK STRATEGY A, B OR C.
DO WE REALLY NEED THAT THOUGH? I MEAN CAN WE JUST SAY EACH WEEK WE'RE GONNA HOLD AS MUCH MONEY AS YOU CAN MAKE BUT WE'RE GONNA HOLD JAMES LIKE BASICALLY WE JUST WANNA SEE QUARTERLY UPDATES AND LOOK AT ITEM AND GO, JAMES WHAT DO YOU GUYS, WHAT THE HELL ARE YOU DOING? THEN WE CAN HOLD YOU ACCOUNTABLE.
CUZ IF YOU GET US INTO PICKING WE WANT A 46 BUYERS FAIR, BUT YES, AUTHORIZE ME.
UNLESS YOU GUYS HAVE AN ISSUE WITH LIKE NO I'D RATHER JUST BEAT UP BY I WOULD LIKE TO SAY, I WOULD LIKE TO SAY LET SOMEONE AT THE TBIS RIGHT NOW I'M NOT COMFORTABLE OPENING UP A WIDE RANGE OF INVESTMENT OPTIONS.
I WANT TO HEAR MORE OF A CASE FOR A REASON WHY.
WE'VE GOT A CASE FOR TBIS THAT'S SO I'D LIKE TO JUST KEEP
[00:40:01]
IT ON THAT FOR NOW.LET'S SEE HOW THAT GOES FOR YEARS AND, AND AND MY PERSONAL, UM, RISK TOLERANCE IS EXTREMELY LOW WHEN IT COMES TO PUBLIC DOLLARS.
Y'ALL KNOW I WAS A LICENSE BROKER SO, UM, SO I DON'T, I WOULD NEVER PERSONALLY SIGN OFF WITHOUT COUNSEL PUSHING IT TO DO SOMETHING OTHER THAN T-BILLS JUST BECAUSE I DON'T THINK IT'S THE RIGHT THING TO DO IT WITH.
SO I BELIEVE YOU BUT I'D STILL RATHER HAVE IT JUST BE IN THE POLICY.
I DON'T DISAGREE WITH YOU, I'M SAYING OKAY WITH YOU PUTTING IT IN THERE.
RESOLUTION WE JUST GET LIKE THE WAY THIS TEXT PULL THING IS WE JUST GET STARTED GETTING PART OF OUR QUARTERLY UM, THING WHERE WE CAN LEAST SEE LIKE THE CHANGE.
I GUESS WHAT I WAS SAYING IS I DON'T WANT THE FLEXIBILITY TO DO SOMETHING.
BUT I WOULD SAY FOR BUDGETING I WANNA BE VERY CONSERVATIVE WHEN WE LOOK AT THE NEXT YEAR'S BUDGET OF INTEREST THAT IT'S GONNA BE EARNED.
CAUSE JUST AS QUICKLY AS IT WENT UP, WE CAN SEE IT GO BACK IF WE GET A MASSIVE RECESSION.
THE FED, I THINK ONE OF THE REASONS THEY'VE RAISED IT SO MUCH IS SO THEY'LL HAVE A A FLOOR TO GO DOWN TO IF THEY NEED TO.
AND SO WE NEED TO BE COGNIZANT OF THAT AS WELL.
SO GENERALLY SPEAKING, WHAT YOU DON'T WANT TO DO IS YOU DON'T WANT TO BUDGET RECURRING EXPENSES AGAINST INTEREST INCOME.
SO IF THE INTEREST RATE START TO SLIDE AND GO BACK DOWN AND THEN YOUR, YOUR, YOU KNOW, SIX MONTH T-BILLS START TO GO BACK DOWN AND READY TO RETURN TOO.
IT'S NOT, IT'S NOT ANYTHING REALLY BECAUSE IF YOU'RE EITHER GONNA USE THE MONEY TO OFFSET YOUR PAYMENTS OR YOU'RE GONNA USE THE MONEY FOR ONE, ONE TIME PURCHASES OR SOMETHING LIKE THAT.
SO THAT WAY IT DOESN'T MATTER IF, IF THE DOLLAR AMOUNTS ARE FLUCTUATING BECAUSE I'M TELLING YOU ONCE WE START DOING PROJECTS, THE DOLLAR AMOUNTS ARE GONNA FLUCTUATE DRAMATICALLY.
SO YEAH, WHAT I SEE IN THAT IS WE, WE, WE HAVE A, A YEAR SET UP OF PROJECTS WE'RE GONNA DO WHERE RIGHT NOW WE JUST APPROVE THEM MM-HMM
BUT THEN YOU GO AND YOU GO, WELL WHEN WE GET TO JUNE OF THE YEAR, WE'RE ACTUALLY PAID.
WE'RE NOT GOING TO BECAUSE INVESTMENT COMES DOWN, WE'RE ACTUALLY NOT GOING TO DO THIS EXTRA SIDEWALK EDITION WE'RE GONNA DO.
I MEAN THAT'S HOW YOU WOULD RUN LIKE A BUSINESS MOST TIMES.
AND THEN IF IT GOES GREAT, YOU JUST, WE VOTE TO MOVE UP A PROJECT.
WE CAN CUT OUT EARLIER WE CAN, YEAH.
WHEN WE'RE DONE THREE YOU WHEN WE'RE DONE.