INFORMATION 08-01-2011Au ust 2011
g
Meeting Calendar
1 2 3 4 5 6
5:30 PM HRA Night to Unite
6:30 PM City
Council
7 8 9 10 11 12 13
5:30 PM EDA 3:30 PM 6:30 PM Park
6:30 PM City
Council Utilities
Commission & Rec
Commission
Worksession
7:00 PM
School Board 6:30 PM
Planning
Commission
14 15 16 17 18 19 20
6:30 PM City 8:30 AM 6:00 PM HPC
Council Energy City
Commission
21 22 23 24 25 26 27
7:00 PM 6:30 PM
School Board Planning
Commission
Wrkshp
28 29 30 31
Ju12t111 Sep 2011
S M T W T F S S M T W T F S
1 2 1 2 3
3 4 5 6 7 8 9 4 5 6 7 8 9 10
10 11 12 13 14 15 16 11 12 13 14 15 16 17
17 18 19 20 21 22 23 18 19 20 21 22 23 24
24 25 26 27 28 29 30 25 26 27 28 29 30
31
INFORMATION
MEMORANDUM
TO: Mayor and Council Members
FROM: Tim Simon, Finance Director
DATE: August 1, 201 I
SUBJECT: Quarterly Investment Report (April-June, 201 I)
INTRODUCTION:
The purpose of this report is to update the City Council on the status of the various
investments that the City maintains. This report is as of June 30, 2011.
BACKGROUND:
The City Council adopted the original investment policy on Apri128, 1998 with subsequent
modifications on February 5, 2007. The policy generally follows the Government Finance
Officers Association (GFOA) model and does comply with State Statutes.
The investment goals for the City of Elk River are passive in nature due to the allowable
investments permitted under State Statutes. The City has four objectives for investing in
order of importance. They are safety of principal, liquidity, return on investment, and
maintaining the public trust. This means we are focused on not losing on the original
investment, having sufficient funds on hand to meet ongoing operating cash needs, getting a
market rate of return, and not purchasing speculative investments.
State Statutes limit the City's ability to invest in many risky types of investments. The City
does not purchase stocks or mutual funds. The City is generally limited to federal and state
government obligations or agencies backed by them. The City can invest in short-term
commercial paper (highly rated), Certificates of Deposit or money market accounts (with
collateralization if in excess of FDIC insurance amounts), and the rated debt of local
governments.
The City intends to hold investments until maturity, which means we will get the rate of
return for which we invest our funds. Our goal is not to extend our maturities beyond five
years unless we are matching cash flow to a specific debt service payment.
INFORMATION
The City makes sure we are sufficiently liquid by continually updating our forecast on the
anticipated cash flow needs over the next five year time horizon. We also build in a reserve
balance incase of unexpected expenditures, these funds are maintained in money market
accounts. We anticipate the fact that we will have two large tax settlements each year, along
with the regularly scheduled debt service payments that occur each year.
Over the past couple of years the search for quality has been the goal, thus we have avoided
commercial paper for close to two years due to concerns over the credit quality issues that
have existed. In addition, for high quality commercial paper the yield is several basis points
below ashort-term CD. The yield curve has remained relatively flat in the 30 day to year
range, but the longer side has also decreased from March 31, 2011. This may also indicate
that investors still prefer liquidity and will take a lower yield for short-term and secure
investments.
The City has to weigh the opportunity cost to invest in longer term investments or ride the
yield curve and reinvest at shorter maturity intervals. Most recent purchases have been
agencies with callable provisions as interest rates step-up, these are somewhat predictable of
when they will be called and are aligned with our cash flow model. Investing in shorter-term
investments has presented far fewer options since the decline in the commercial paper
market. Treasury yields are still around historical lows. Three month notes are yielding
0.03% and the ten year notes are 3.18%. See graphical illustration below:
http: / /www.ustreas.gov/offices/domestic-finance/debt-management/interest-
rate
/ ield_histotical.shtml
Treasury Yield Curve
3
5.00%
4.00%
3.00% -*-03/31/2011
2.00%
1.00% -~-06/30/2011
0.00%
lmo. 3mo. 6mo. lyr. 2yr. Syr. Syr. Tyr. 10yr. 30yr.
Cities generally use a short horizon benchmark such as the two year Treasury Bill (6/30 -
.45% down from .80% at 3/31) or some similax measure. C-ur current portfolio yield is
roughly 1.28% which is several basis points over the treasury yield benchmark. This is
calculated by taking the yield times the current value for each investment and dividing the
resulting amount by the total portfolio value. As investments purchased in earlier years
mature we will be able to replace them and lock into some longer term interest rates, but
they may have to be reinvested at lower interest rates as market conditions change. It is very
typical to lag the market as interest rates change. This will lead to more predictability in our
interest earnings.
C-ur primary reserve account is our 4M Fund which is a money market account that various
cities pool their funds into. It currently yields .02% with daily withdrawal privileges. We are
currently maintaining a higher liquidity position as 70% of the 1S` half tax settlement was
received at the end of June and several investments will mature in the upcoming months. We
INFORMATION
have reinvested at higher rates and will be ready when the Federal Reserve adjusts interest
rates. The City strives to maintain a strong diversification portfolio so liquidity and exposure
risk are reduced.
The following is the summary of sector distribution, agency distribution, and interest rate
distribution as of 6/30/11.
Sector Distribution
®CD
^ AGY
oMM
Agency Distribution
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
FFCB FHLB FNMA FHLMC
est Rate Distri ution
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
0.00-1.99 2.00-2.99 3.00-3.99
1NF4RMATItiN
MEMORANDUM
1~
TO: Honorable Mayor and Members of the City Council
FROM: Justin Femrite, P.E., City Engineer
DATE: 8-1-11
SUBJECT: Construction to begin on the 2011 Street Improvement Project
Construction on the 2011 Street Improvement project is scheduled to begin during the week of
August 1, 2011. The contracts have been signed and approved. At the preliminary construction
meeting, that was held on July 27, 2011 Redstone Construction delivered a schedule that showed
starting work in Project Area 2 (the Industrial Park area) by Wednesday August 3. Work in Project
Area 1 is scheduled to begin around Wednesday, August 10, 2011.
Attached is a copy of the first project newsletter that has been sent to all of the property owners. We
have also communicated with the property owners they can follow weekly construction updates on
the city website. Cody Holms, the inspector on this project, will knock on doors to answer any
additional questions of the residents as the project begins. Cody is scheduled to be on site at all
times during the construction. Cody will also be working with the Postmaster to determine a location
for temporary mailboxes that are to be used during construction.
We have discussed, with Redstone Construction, the need to provide continuous access especially in
the Industrial park during the work. All efforts will be made to minimize the impact of the
construction activity.
Any questions or concerns that you may receive can be forwarded to me or Cody, the project
inspector. My direct phone number is 763-635-1051 and Cody's cell phone is 612-756-3440.
N:\Depaztments\Public Works\Engineering\$IMPROVEMENT PROJECTS\2011 Improvement Projects\2011 Street
Improvements\Corres\8-1-1 ] Memo to CC on Stazt of Construction.doc
July 25, 2011
~,
~~~~
13065 Orono Parkway
(763) 635-1000
Construction includes:
• Project Area 1- Street
and utility reconstruction
(overlay only on 15r
Street)
• Project Area 2 -
Bituminous street
improvements with curb
and gutter construction
Construction schedule
• Start Project Area 2
Week of August 1 sr
• Start: Project Area 1
Week of August 8r`'
• Finish: Early October
Contractor:
• Redstone Construction
Co.
~'
1
If you have any
questions during the
project, please call
either of the following
project contacts:
Project Inspector:
Cody Holms, P.E.
Phone: 612-756-3440
PROJECT INTRODUCTION
The City of Elk River has approved a contract with Redstone Construction to make
improvements to a number of residential and industrial streets. The improvements
will be completed in two separate project areas as shown on the attached project
location map.
PROJECT INFORMATION
The proposed improvement in Project Location 1 is generally described as a full
reconstruction of the streets with concrete curb and gutter and a bituminous surface.
The sanitary sewer and watermain will be replaced where the existing conditions do
not meet existing standards for size and condition. Storm sewer and catch basins
will be added to improve drainage. Street lighting will be replaced and added to in
accordance with Elk River Municipal Utilities standards.
The construction time frame is expected to last for 2 months.
Vehicle access will be maintained to all homes as much as possible during the work.
There will be isolated times that access to your home will be limited to foot traffic.
Construction in Project Area 2 (Industrial Park) will consist of bituminous street
reclamation, curb and gutter construction, bituminous overlay, and storm sewer catch
basin construction. Estimated construction will be approximately 4 weeks.
PROJECT AREA 1 INFORMATION
In advance of our planned construction, various private utility companies will be
onsite relocating some of their line to allow for our planned construction. At the start
of construction the bituminous streets will be milled. The streets will be closed to all
thru traffic. Access will be maintained for residents to the extent feasible. Normal
working hours expected on this project are from 7:00 a.m. to 7:00 p.m., Monday
through Friday and possibly Saturdays.
We will be working with the postal carrier to determine a common location for
placement of temporary mailboxes. You will be notified of this location when it is
determined. The Contractor will work with the garbage collection service providers to
facilitate garbage collection through the duration of the project. Please place your
containers curbside on your normally scheduled days.
In the areas where sanitary sewer, watermain and storm sewer improvements are
being installed, there will be excavations down to depths of 8 feet. During this utility
work, a temporary water system will be installed to serve properties along 2"d Street
between Railroad Avenue and Evans Avenue, and along Evans Avenue from 2"d
Street to Railroad Avenue.
Once the new utilities are installed, the grade of the streets can be re-established and
the contractor will be moving into the curb and gutter installations. After the concrete
curb and gutter has had sufficient time to cure, driveways will be placed. Landscaping
will then follow with the installation of sod to reestablish the boulevards.
With the exception of 1St Street, the final lift (layer) of bituminous will be placed by
city Engineer: June 2012. This gives the initial bituminous a season to settle and cure. As with any
Justin F e m r i t e , P . E . construction work, the schedule and completion of the project will be somewhat
Phone 763-635-1051 dependent on the weather.
2011 Street Improvements
Project Netivslet
PROJECT AREA 2 INFORMATION
At the start of construction, the east portion of the project will be milled. The streets will be signed as closed to all thru
traffic but access to your property will be maintained. Normal working hours expected on this project are from 7:00 a.m.
to 7:00 p.m., Monday through Friday and possibly Saturdays.
The construction involves the placement of a new storm sewer system to serve the new surface improvements. Once the
new storm sewer is installed, the grade of the streets can be re-established and the contractor will be moving into the
curb and gutter installations. After the concrete curb and gutter has had sufficient time to cure, driveways will be placed.
Following the completion of the concrete work, the bituminous pavement will be completed. Landscaping will then follow
with the installation of sod to reestablish the disturbed boulevards. Construction is expected to be completed by early
October. We will work with the businesses to minimize and coordinate access disruptions during the construction.
PRIVATE IRRIGATION SYSTEMS. INGROUND DOG FENCING
The construction work involves much excavation within the road right of way. If you have an irrigation or buried dog
fencing system in place, please locate the lines and sprinkler heads along the road. Contact the Project Inspector and let
him know when and where they are located. If your system appears to be in the way of construction, the inspector will
notify you and ask that you remove the heads and shut down the zone in your system that is affected.
SAFETY ,wP
We urge you to use caution around the work site. Your assistance in reminding area children to stay ~;`"~
clear of construction equipment is helpful in maintaining a safe environment. Your patience and ~ v`.,' ~.,
cooperation during,.this construction will be appreciated. Please let your children know the survey ~ ~ r, rj ~~r~' +,~
stakes represent valuable information and should not be disturbed.>Help us work efficiently, If v/e need ~ ~ i'' ~; i'
to re-stake because the survey stakes are removed, it just takes that much longer to complete our , , ; ~ ~ ~ ~ ,~
work: If you observe any acts of vandalism or safety hazards after hours, we urge you to contact the ~ ~ i ij ~ ' ~,
Police Department or any of the contacts listed on thisnewsletter. ~~ ~- ~+ i
PROJECT MAP
Thank you for your corporation
during this construction
project. If you have any
questions or concerns during
the project, please call any of
the contacts listed on the front
side of this newsletter. Cody,
the project inspector, will be
on site at all times during
construction. He will be your
fastest link to solve any
problems you are experiencing
during construction.
__ _ ._
BQL-T~vON ~„K (CITY ~F E~ '.`~. ..'A
...~...~._.~..~~.~.°~1~~~ ~~ ~ ~ r
~~
INFORMATION
TO: Mayor and City Council
FROM: Jessica Miller, Executive Secretary/Deputy City Clerk
DATE: August I, 201 I
SUBJECT: Board/Commission Attendance Records
Attached for your information are the attendance reports for January -June 2011 for all nine of the
City's advisory boards and commissions. The reports are completed by the board and commission
staff liaisons and per the Advisory Board and Commission Policy, are forwarded on to the Council
biannually for the Council's review of the attendance of members of city commissions.
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