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Home My WebLink About2009 02 23 Other - Discussed During Regular 601- PFM Group - Updated Cash Flow Analysis ' The PFM Group PUNIC Financial Management, Inc. PFM Asset Management LLC PFM Advisors Presentation to the 1 I ncixrpora9Ld ' Of 1 Updated Cash Flow Analysis As of Fiscal Year Ended September 30, 2008 prepared on February 19, 2009 1 ' PFM Asset Management LLC 300 South Orange Avenue Suite 1170 I Orlando, Florida 32801 Phone: (407) 648 -2208 Fax: (407) 648 -1323 1 I Lincoln Plaza 407 648 -2208 Suite 1170 407- 648 -1323 fax I 300 S. Orange Avenue www.pfm.com Orlando, FL 32801 -3470 The PFM Group I Public Financial Management. inc. PFM Asset Management LLC PFM Advisors February 19, 2009 I Michelle Greco Finance Director City of Winter Springs 1126 East SR 434 I Winter Springs, FL 32708 I RE: Cash Flow Analysis I Dear Ms. Greco: I I have enclosed the Updated Cash Flow analysis for the City of Winter Springs, for your review. The purpose of the analysis is to identify an allocation between funds required for short -term cash needs and funds that could be invested longer -term to potentially generate higher rates of return. I The important element of the cash flow analysis is the determination of the "core" cash balance, which serves as one of the building blocks of the City's investment program. The "core" balance represents the minimum balance of funds the City has maintained during the defined historical period. Fundamentally, I the Cash Flow analysis attempts to calculate an approximate amount of "core" funds, which may be invested more strategically than funds that are needed on a short-term basis, such as operational funds. This balance often represents funds that could be invested more aggressively to potentially enhance the City's rate of return. It is important to note the Cash Flow analysis is based on historical data and therefore is only 1 I estimated. I This analysis is based on monthly cash balances by fund as provided by the City's finance staff. The I funds are considered appropriate for possible longer -term investment strategies. The Cash Flow analysis indicates that the estimated core balance for all funds is $12,811,316, which may be invested in securities that have longer maturities, possibly earning a higher return. I The cash flow model assumes a 20 percent cushion on the portfolio leaving a core portfolio (the blue shaded area of the cash flows) carried over the years. This cushion results in the model calculating a 20 percent decrease in the core value, to provide a more conservative estimate of the core balance. I The Short -Term and Core Portfolios are calculated as follows: I Short - Term Portfolio If a positive net cash flow is anticipated, the short -term portfolio equals the cushion percentage. 1) If a positive net cash flow is anticipated, the short -term portfolio equals the cushion percentage. 2) If a negative net cash flow is anticipated, the short -term portfolio equals the projected I negative net cash flow plus the cushion percentage. I I I �� -- Michelle Greco Finance February 192009 Page 2 Core Portfolio ' The core is computed in two steps, as follows: Step 1: Subtract the short -term portfolio allocation from the total portfolio balance. This is the "monthly ' core." Step 2: Compute the minimum monthly core for the next 12 months. This is the actual core. The core is ' always a rolling 12 -month average of the minimum monthly core. The Historical and Projected Analysis of the Core Portfolio below presents the historical cash flow balances and adds two years of projected cash flows for each particular fund on to the cash flow analysis. ' Total -All Funds Analysis of Core Portfolio 25 000 000 20,000,000 10,000,000 5,000,000 I ® Historical Short-term Portfolio ■ Historical Core 0 Projected Short-term Portfolio 0 Projected Core ' The Cash Flow analysis model provides three options for calculating future growth; growth based on all historical data, growth based on historical data for a specific period of time, and a self - imposed growth ' rate. The attached Cash Flow analysis assumes a zero growth rate. For forecasting purposes we can include an appropriate growth rate for incorporation into the Cash Flow analysis. Please give me a call with any questions and I look forward to meeting with you to discuss the ' analysis in further detail. Sincerely, PFM Asset Management LLC ' Steven Alexander, CTP, CGFO Managing Director ' C: Mel Hamilton, Senior Managing Consultant PFM Asset Management LLC 1 ' City of Winter Springs, Florida TABLE OF CONTENTS Cash Flow Analysis Page Total - All Funds 1 ' GENERAL FUND - 001 3 WATER AND SEWER FUND - 401 5 DEVELOPMENT SERVICES FUND - 420 7 STORMWATER FUND - 430 9 Funds Removed from the Cash Flow Analysis ' POLICE EDUCATION FUND - 102 BOND SINKING FUND RESERVE (BONY) - 401 - SPECIAL LAW ENFORCEMENT FUND - 103 151800 ' TRANSPORTATION IMPROVEMENT - 104 BOND SINKING FUND RESERVE - 2000 SERIES PARKS DONATION FUND - 1051 (SBA POOL A) - 401 - 151801 SOLID WASTE & RECYCLING 107 BOND SINKING FUND RESERVE 2000 SERIES SPEC LAW ENFORCEMENT - FEDERAL - 108 (SBA - POOL B) - 401 - 151802 ' EMERGENCY & DISASTER RELIEF SV - 109 ARBOR FUND - 110 BOND SINKING FUND 2000 SERIES ( "THE RESERVE ") - 401 - 151803 HOA PROJECTS- LIGHTS AND SIGNS - 112 ' STORM RESERVE SPECIAL REVENUE - 114 ROAD IMPROVEMENTS - 115 VETERANS MEMORIAL - 116 TRANSPORTATION IMPACT FUND - 140 ' PUBLIC BUILDING IMPACT FEE FND - 145 POLICE IMPACT FEE FUND - 150 PARKS IMPACT FEE FUND - 155 ' FIRE IMPACT FEE FUND - 160 MEDICAL TRANSPORT SERVICES - 170 PUBLIC & COMM SERVICE TAX FUND - 172 ' ELECTRIC FRANCHISE FEE FUND - 174 FIRE ASSESSMENT FUND - 175 TLBD DEBT SERVICE FUND - 182 TLBD MAINTENANCE FUND - 184 I TLBD PH II -MAINT -185 OAK FOREST MAINTENANCE - 191 OAK FOREST DEBT SERVICE - 192 ' 2003 DEBT SERVICE FUND - 206 TLBD DEBT SERVICE PHASE 2 - 213 1999 DEBT SERVICE FUND - 215 CW GO DEBT SERVICE FUND - 225 ' 2004 LOC DEBT SERVICE FUND - 230 1999 CONSTRUCTION FUND - 305 REVOLVING REHABILITATION FUND - 306 TLBD IMPROVEMENT FUND - 308 OAK FOREST CAPITAL FUND - 309 PW /UTILITY FACILITY CAP PROJ - 311 PUB FACILITY EXP CAP PROJ - 312 I TLBD PH2 IMPROV FUND - 313 HMGP PROJECT FUND - 314 TROTWOOD IMPROVEMENT FUND - 315 SENIOR CENTER EXPANSION - 316 I Cash Flow Analysis Inputs (Inputs in Blue maybe changed) I Municipality: City of Winter Springs, Florida Account Name: Total - All Funds Number of Separate Accounts (max 50): 5 Start Date (must be month -end): 10/31/2005 I End Date (must be month -end): 9/30/2008 Frequency (Always set at "1 "): 1 First Projection Date (must be month -end date): 10/31/2008 I Last Projection Date (must be month -end date): 10/31/2010 Projection Period (In Months) 24 Quality of Cash Flow Model Excellent Cash Flow Reliability - 10 I If you would like to project growth, enter "yes" and select a growth option Project Growth? (Yes or No) no l Growth Rate (Enter 1, 2, or 3): 1 Option 1= Historical Period Growth (annual rate): a 1.4% Average Monthly Change. 21,577 Option 2= Growth rate during a specific period: (6.4 %) I Average Monthly Change: (92,985) Month End - Begin Date 9/30/2007 M onth End - End Date 9/30/2008 Option 3 =Your Choice (Annual Growth Rate) 10.0% Average Monthly Change: / i, ' �� " 157,276 S hort-Term Portfolio Cushion: 20.0% Compensating Balance Requirement: 0.00 I Core Date: 9/30/2008 Core Balance: 12,811,316 I Short -Term Portfolio Analysis Inputs Maximum Maturity Range of Short-term Portfolio: 12 Months I As of (month -end date): September -08 I Maximum Weighted Average Maturity - Short Term Portfolio 45 Maximum Weighted Average Maturity - Short Term Portfolio 45 Combined Portfolio Weighted Average Maturity Requirement (Y/N) N If Yes (fill in the following) I Combined Portfolio Target Weighted Average Maturity (in days): 365 Core Target Average Maturity (in days): 730 r„ a. ,, ,,., ,W ,a n. ,,. ,M Short-Term Portfolio (in days): (1,095) , e e--- e ,, , dz i 4M41:ur ;NaA I Short-Term Allocation: 3,202,829 Core Allocation: 12,811,316 Total Portfolio: 16,014,144 I I I I PFM Asset Management LLC Page 1 I 1 1 25,000,000 Total -All Funds Historical Analysis of Core Portfolio ' 20,000,000 15,000,000 1 10,000,000 5,000,000 4 4 $ 4 4 4 4 4 ' S Historical Short-term Portfolio ■Historical Core Total - All Funds Analysis of Core Portfolio ' 25,000,000 - 20,000,000 - 15,000,000 10,000,000 5,000,000 LL = LL N L @Historical Short-term Portfolio •Historical Core O Projected Short-term Portfolio •Projected Core Note: Projected cash flows are based on the statistical trends of historic data. Actual cash flow patterns may vary. Target Maturity Distribution of Short Portfolio as of September - 08 $3,500,000 -- $3,000,000 - ' $2,500,000 $2,000,000 ' $1,500,000 $1,000,000 I $500,000 $0 Oct -08 Nov -08 Dec-08 Jan -09 Feb-09 Mar -09 Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep-09 @Target Maturity Distribution • Liquidity Requirements PFM Asset Management LLC Page 2 I Cash Flow Analysis Inputs (Inputs in Blue may be changed) I Municipality: City of Winter Springs, Florida Account Name: GENERAL FUND - 001 Number of Separate Accounts (max 50): 5 Start Date (must be month -end): 10/31/2005 I End Date (must be month -end): 9/30/2008 Frequency (Always set at "1 "): 1 First Projection Date (must be month -end date): 10/31/2008 I Last Projection Date (must be month -end date): 10/31/2010 Projection Period (In Months) 24 Quality of Cash Flow Model Excellent Cash Flow Reliability - 10 I If you would like to project growth, enter "yes" and select a growth option Project Growth? (Yes or No) no l Growth Rate (Enter 1, 2, or 3): 1 Option 1= Historical Period Growth (annual rate): Average Monthly Change: 17,077 Option 2= Growth rate during a specific period: 7.7% Average Monthly Change: 58,236 Month End - Begin Date 9/30/2007 Month End - End Date 9/30/2008 Option 3 =Your Choice (Annual Growth Rate) 10.0% Average Monthly Change: �, 82,033 S hort -Term Portfolio Cushion: 20.0% Compensating Balance Requirement: 0.00 I Core Date: 9/30/2008 Core Balance: 5,714,639 Short -Term Portfolio Analysis Inputs I Maximum Maturity Range of Short-term Portfolio: 12 Months As of (month -end date): September -08 I Maximum Weighted Average Maturity - Short Term Portfolio 45 Maximum Weighted Average Maturity - Short Term Portfolio 45 I Combined Portfolio Weighted Average Maturity Requirement (Y/N) N If Yes (fill in the following) I Combined Portfolio Target Weighted Average Maturity (in days): 365 Core Target Average Maturity (in days): 730 „ Short -Term Portfolio (in days): (404) I Short-Term Allocation: 2,713,334 Core Allocation: 5,714,639 Total Portfolio: 8,427,973 I I I 1 PFM Asset Management LLC Page 3 ' 16,000,000 GENERAL FUND - 001 Historical Analysis of Core Portfolio 14,000,000 ' 12,000,000 10,000,000 8,000,000 ' 6,000,000 4,000,000 ' 2,000,000 8 g 8 4 4 4 8 4 4 ' • Historical Short-term Portfolio •Historical Core GENERAL FUND - 001 Analysis of Core Portfolio ' 16,000,000 - 14,000,000 - 12,000,000 - 19,009,000 - 8,000,000 - 6,000,000 4,000,000 2,000,000 4 , y ; 4 �J LL 2, O 2, m 4 7? t� o yX ' 8 ILL 4 8 LL 4 O IL 8 li -9 8 ■Historical Short-term Portfolio •Historical Core •Projected Short-term Portfolio •Projected Core Note: Projected cash !lows are based on the statistical trends of historic data. Actual cash flow patterns may vary. Target Maturity Distribution of Short Portfolio as of September - 08 ' $3,000,000 --- $2,500,000 $2,000,000 $1,500,000 $1,000,000 1 . $500,000 $0 Oct -08 Nov -08 Dec-08 Jan -09 Feb -09 Mar -09 Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep-09 •Target Maturity Distribution •Liquidity Requirements PFM Asset Management LLC Page 4 1 I Cash Flow Analysis Inputs (Inputs in Blue may be changed) I Municipality: Account Name: City of Winter Springs, Florida W WATER AND SEWER FUND - 401 Number of Separate Accounts (max 50): 5 Start Date (must be month -end): 10/31/2005 I End Date (must be month -end): 9/30/2008 Frequency (Always set at "1 "): 1 First Projection Date (must be month -end date): 10/31/2008 I Last Projection Date (must be month -end date): 10/31/2010 Projection Period (In Months) 24 Quality of Cash Flow Model Excellent Cash Flow Reliability - 10 I If you would like to project growth, enter "yes" and select a growth option Project Growth? (Yes or No) no I Growth Rate (Enter 1, 2, or 3): 1 Option 1= Historical Period Growth (annual rate): (0,4%) Average Monthly Change: (2,527) Option 2= Growth rate during a specific period: (16.4 %) I Average Monthly Change: (89,233) Month End - Begin Date 9/30/2007 M onth End - End Date 9/30/2008 Option 3 =Your Choice (Annual Growth Rate) 10,0% Average Monthly Change: ,, � „,„, , ,. 59,260 S hort -Term Portfolio Cushion: 20.0% Compensating Balance Requirement: 0.00 I Core Date: 9/30/2008 Core Balance: 4,734,438 I Short -Term Portfolio Analysis Inputs Maximum Maturity Range of Short-term Portfolio: 12 Months As of (month -end date): September -08 ' Maximum Weighted Average Maturity - Short Term Portfolio 45 Maximum Weighted Average Maturity - Short Term Portfolio 45 I Combined Portfolio Weighted Average Maturity Requirement (YIN) N If Yes (fill in the following) I Combined Portfolio Target Weighted Average Maturity (in days): 365 Core Target Average Maturity (in days): 730 Short-Term Portfolio (in days): (l 048) I Short-Term Allocation: 1,222,628 Core Allocation: 4,734,438 Total Portfolio: 5,957,066 I I I I PFM Asset Management LLC Page 5 I I WATER AND SEWER FUND - 401 Historical Analysis of Core Portfolio 10,000,000 9,000,000 ' 8,000,000 7,000,000 5,000,000 ' 4,000,000 3,000,000 2,000,000 ' 1,000,000 4 4 4 4 4 4 4 4 ' • Historical Short-term Portfolio • Historical Core WATER AND SEWER FUND - 401 Analysis of Core Portfolio 10,000,000 9,000,000 8,000,000 7,000,000 ` 6,000,000 4 " ` n 5,000,000 4,000,000 3,000,000 r 1,000,000 2 4 g 4 4 g 4 4 2 q 4 o 0 °Historical Short-term Portfolio •Historical Core °Projected Short-term Portfolio °Projected Core ' Note: Projected cash flows are based on the statistical trends of historic data. Actual cash flow patterns may vary. Target Maturity Distribution of Short - Term Portfolio as of September - 08 ' $1,400,000 $1,200,000 - I $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 r---1 Oct -08 Nov -08 Dec-08 Jan -09 Feb -09 Mar -09 Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep -09 •Target Maturity Distribution • Liquidity Requirements PFM Asset Management LLC Page 6 I I Cash Flow Analysis Inputs (Inputs in Blue may be changed) Municipality: City of Winter Springs, Florida Account Name: DEVELOPMENT SERVICES FUND - 420 Number of Separate Accounts (max 50): 5 Start Date (must be month -end): 10/31/2005 I End Date (must be month -end): 9/30/2008 Frequency (Always set at "1"): 1 First Projection Date (must be month -end date): 10/31/2008 I Last Projection Date (must be month -end date): 10/31/2010 Projection Period (In Months) 24 Quality of Cash Flow Model Inadequate Cash Flow Model - 1 I If you would like to project growth, enter "yes" and select a growth option Project Growth? (Yes or No) no I Growth Rate (Enter 1, 2, or 3): I (7 Option 1= Historical Period Growth (annual rate): (7.8%) Average Monthly Change: (8,309) Option 2= Growth rate during a specific period: (73.3 %) I Average Monthly Change: (61,394) Month End - Begin Date 9/30/2007 M onth End - End Date 9/30/2008 Option 3 =Your Choice (Annual Growth Rate) 10.0% I , Monthly Change: ,, u:,,,, M 8,859 - z , „ �. S hort -Term Portfolio Cushion: 20.0% Compensating Balance Requirement: 0.00 I Core Date: 9/30/2008 Core Balance: 566,799 I o Maximum Maturity Range of Short-term Short -Term PortfolioPrtfolio Analysis Inputs : 12 Months As of (month -end date): September -08 I Maximum Weighted Average Maturity - Short Term Portfolio 45 Maximum Weighted Average Maturity - Short Term Portfolio 45 I Combined Portfolio Weighted Average Maturity Requirement (Y/N) N If Yes (fill in the following) I Combined Portfolio Target Weighted Average Maturity (in days): 365 Core Target Average Maturity (in days): 730 v Short -Term Portfolio (in days): (1,095) „ „ I Short-Term Allocation: 141,700 Core Allocation: 566,799 Total Portfolio: 708,498 I ! I I I PFM Asset Management LLC Page 7 I I I I DEVELOPMENT SERVICES FUND - 420 Historical Analysis of Core Portfolio 2,500,000 I 2,000,000 1,500,000 ,,.. v a a I 1,000,000 500,000 4 4 4 4 9 4 4 1 I • Historical Short-term Portfolio a Historical Core DEVELOPMENT SERVICES FUND - 420 Analysis of Core Portfolio I 2,500,000 2,000,000 I 1,500,000 I 1,000,000 500,000 1�� 4 / 4 4 a 4 g a g $ 2 4 4 y -7 ■Historical Short-term Portfolio ■ Historical Core 0 Projected Short-teem Portfolio i Projected Core Note: Projected cash flows are based on the statistical trends of historic data. Actual cash flow patterns may vary. Target Maturity Distribution of Short Portfolio as of September - 08 I $160,000 _ ___ $140,000 I $120,000 $100,000 $80,000 I $60,000 - $40,000 I $20,000 $0 Oct -08 Nov -08 Dec -08 Jan -09 Feb -09 Mar -09 Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep -09 I •Target Maturity Distribution ■Liquidity Requirements I PFM Asset Management LLC Page 8 I Cash Flow Analysis Inputs (Inputs in Blue may be changed) I Municipality: City of Winter Springs, Florida Account Name: STORMWATER FUND - 430 Number of Separate Accounts (max 50): 5 Start Date (must be month -end): 10/31/2005 I End Date (must be month -end): 9/30/2008 Frequency (Always set at "1 "): 1 First Projection Date (must be month -end date): 10/31/2008 I Last Projection Date (must be month -end date): 10/31/2010 Projection Period (In Months) 24 Quality of Cash Flow Model Average Cash Flow Reliability - 5 I If you would like to project growth, enter "yes" and select a growth option Project Growth? (Yes or No) no I Growth Rate (Enter 1, 2, or 3): 1 Option 1= Historical Period Growth (annual rate): 26.6% Average Monthly Change: 15,336 Option 2= Growth rate during a specific period: (0.9 %) I Average Monthly Change: (594) Month End - Begin Date 9/30/2007 M onth End - End Date 9/30/2008 Option 3 =Your Choice (Annual Growth Rate) 10.0% I Average Monthly Change: S hort -Term Portfolio Cushion: 20.0% Compensating Balance Requirement: 0.00 I Core Date: 9/30/2008 Core Balance: 690,435 Short -Term Portfolio Analysis Inputs I Maximum Maturity Range of Short-term Portfolio: 12 Months As of (month -end date): September -08 I Maximum Weighted Average Maturity - Short Term Portfolio 45 Maximum Weighted Average Maturity - Short Term Portfolio 45 I Combined Portfolio Weighted Average Maturity Requirement (Y/N) N If Yes (fill in the following) I Combined Portfolio Target Weighted Average Maturity (in days): 365 Core Target Average Maturity (in days): 730 Short-Term Portfolio (in days): (730) I Short-Term Allocation: 230,172 Core Allocation: 690,435 Total Portfolio: 920,607 I I I PFM Asset Management LLC Page 9 I I 1 l- - I STORM WATER FUND - 430 Historical Analysis of Core Portfolio 1,200,000 1,000,000 I 800,000 600,000 I 400,000 200,000 I 4 4 1 4 4 ° 4 4 4 R 4 I 0 Historical Short-term Portfolio • Historical Core STORM WATER FUND -430 Analysis of Core Portfolio I 1,200,000 1,000,000 A. I 800,000 600,000 �� "' a : -W' ° V\V �' .<9'‘..:.;`k,,`,.‘`,.,„�. �. 400,000 � , '- \ \ V v , * V \V � A \ I 200,000 A \ \ \\ \ \ \ \� 4\ \ \�` \ 4 1 1 4 4 : 4 4 l' 4 4 I O LL 4 O LL 4 8 e 4 O a 4 O e 4 O 0 Historical Short-term Portfolio ■Historical Core 0 Projected Short-term Portfolio Cl Projected Core I Note: Projected cash flows are based on the statistical trends of historic data. Actual cash flow patterns may vary . Target Maturity Distribution of Short Portfolio as of September - 08 I $200,000 - — $180,000 $160,000 $140,000 $120,000 $100,000 I $80,000 $60,000 $40,000 I $20,000 .., $0 aa , MIIN . gl . ■ . Oct -08 Nov -08 Dec -08 Jan -09 Feb-09 Mar -09 Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep-09 I ®Target Maturity Distribution ■Liquidity Requirements I PFM Asset Management LLC Page 10 I