Issue link: http://townofcary.uberflip.com/i/673033
ADMINISTRATION Treasury Management Investment rates remain low. Due to conservative interest income budgeting, interest earnings for FY 2016 are projected to exceed budget by almost $1,000,000 town wide across the General Fund, Utility Fund and Capital Reserve Funds. The Town's total interest income should exceed $3.7 million for the fiscal year compared to $2.7 budgeted interest income, but still remains a small source of revenue for the Town compared to better years when interest income was $10 million or more. The Town successfully closed the refinancing portion of the Series 2009A GO Bonds in February. Final savings on the refinancing were about $980,000 with the savings split 53% General Fund and 47% Utility Fund. When the Town locked in the rate with First Bank on January 5, 2016, the Town projected savings of about $1.2 million. With this refinancing, the Town invests the new bond proceeds in a trust account that earns interest until the old bonds can be called. The new interest income offsets the interest expense on the new bonds. While the interest expense rate on the new bonds was locked in on January 5, the investments to generate interest earnings on the bond proceeds could not be locked in until after the Town received approval for refinancing from the Local Government Commission on February 2, 2016. Due to volatility in the investment market between January and February, the yield potential trust investments dropped 1.3% to 1% which reduced the net interest expense savings from the refinancing. Regardless of this reduction in savings, staff moved forward with the refinancing because the new bond structure has maximum flexibility without any prepayment penalties. We continually monitor opportunities to refinance so if market conditions change in our favor, the Town can refinance again. Refinancing Investments Taxes Wake County has adopted a plan to conduct property revaluations every four years rather than every eight years. The change in the revaluation schedule was proposed to improve taxpayer equity, understanding and predictability. Cary staff has received very few comments and questions about the January 1, 2016 revaluation. Operations As called for annually by Town policy for the protection of sensitive information, the Security of Information policy and related standard procedure have been reviewed. Staff training on sensitive information was incorporated in the activities and training held during Sunshine Week. Bond ratings Each of the three rating agencies, Moody's, Fitch and Standard and Poor's initiated reviews of the Town's credit. While all three reports have not been finalized, the Town's top bond ratings are expected to be confirmed. Manager Approved Contracts Under the authority granted by Council to approve contracts and in accordance with reporting requirements of our contracting policy, the Town Manager signed 37 contracts during the first quarter of 2016.