The City of Manteca has money.
In fact it has enough to have $213,019,789 invested as of Sept. 30
And based on its investment portfolio, it is safe and performing better than the benchmark standard using the 1 to 3 years U.S. Treasury Index.
On Tuesday, a representative of PFM updated the City Council on Manteca’s investment portfolio stressing that it is safe, sound, has a high degree of liquidity, and is consistently performing above the bench mark.
The presentation by PFM Managing Director Monique Spyke preceded a council briefing on accounting irregularities dating back to 2009 based on annual audit reports that have surfaced in the past six months after interim Finance Director Stephanie Beauchaine was retained by Manteca.
The money represents bond proceeds, growth-related fees that have been accumulating such as $31.5 million plus for government facilities fees, various restricted funds such as those restricted for streets, and various reserves among other funds.
It also reflects the fact Manteca gets a lot of its operating revenue for services supported by the general fund in several lump sums throughout the year. Property tax receipts, as an example, account for almost a third of the city general fund budget. The taxes are distributed to the city twice a year by San Joaquin County. The city was projected to receive $17.8 million in property taxes in the fiscal year that ended June 30.
The $47 million general fund — based on information presented to build last year’s budget and used to put a provisional budget in place for the current fiscal year — has $30.2 million in various reserve accounts. The general fund reserve numbers made public in July of 2019 included $13 million for fiscal stability, $2.1 million for pension stabilization, $3 million for economic development, $1 million for public facilities oversizing, $1.3 million for capital facilities, $1.3 million for technology, and $8.9 million for unassigned reserves.
State law restricts how a lot of money the city collects can be used. Many of those safeguards were put in place at the ballot box by voters in statewide elections over the past four decades. The city, for example, can’t use its $13.5 million plus and counting in government facilities growth fees for hiring police or repairing streets. It must go toward building government facilities as outlined in the nexus study used to legally justify the fees charged.
The city can, however, borrow money legally from a number of funds. It did it last year to cover a $1.7 million shortfall in the fire facilities growth fees needed to build the $4.7 million fire station at Woodward Avenue and Atherton Drive.
The City Council opted to go ahead with the project without generating any general fund debt. The $1.7 million was borrowed from the city’s development fee account where the bonus bucks that were collected for sewer allocation certainty are held. The money is being repaid to the development agreement fee account with interest as growth fees are collected.
Spyke’s presentation on the city’s portfolio noted in the past year it had a 3.79 percent return as opposed to the performance benchmark of 3.58 percent. The city’s annualized return in the past 5 years, in the past 10 years, and since the inception of the PFM investment portfolio on Manteca’s behalf has returned 0.30 percent to 0.36 percent more than the benchmark 1 to 3 years U.S. Treasury Index performance benchmark.
The city’s investment objectives include high quality investments as well as diversification by sector, issuer and maturity for safety. Another goal is to ensure liquidity remains a high portion of the portfolio. The third objective is having as strong as possible returns on investments taking safety and liquidity into consideration.
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