HomeMy WebLinkAboutQ3 2017TOWN OF NANTUCKET
Quarterly Financial ReportQuarterly Financial Report
Third Fiscal Quarter Ended
March 31 2017March 31, 2017
Table of Contents
Financial Highlights..........1
General Fund Revenues..........2
Results for most recent quarter..........3
Results for year-to-date period..........4
Gl Fd E 5General Fund Expenses..........5
Results for most recent quarter..........6
Results for year-to-date period..........7
Capital Investments..........8
Financing Activity..........9
Investment Report..........10
Outlook: Muni Watch 11Outlook: Muni Watch..........11
Financial Highlights
The Town of Nantucket ended its third quarter of fiscal year 2017 in a favorable position. Economic activity on the
island remains strong with tourism real estate and building industries leading the way The growth period seen overisland remains strong with tourism, real estate and building industries leading the way. The growth period seen over
the last few years has translated into higher collections of local receipts, such as local rooms and meals taxes, and
has also resulted in increased demands for municipal services across the board.
The flagship project for FY2017 has been the construction of the new Nantucket Intermediate School (NIS), which is
expected to be completed by the end of this fiscal year. The new facility will help the Town accommodate the
steadily growing student population at Nantucket Public Schools.
General Fund Revenues
Third quarter General Fund (1)revenues were $24.5M, representing a $1.7M increase (+7%) over the third quarter
last year. Real estate and personal property taxes collected were the main drivers behind the quarter‐over‐quarter
increase. Fee & Rentals as well as a few other revenue categories were affected by timing differences in collections.
FY2017 year‐to‐date, the Town collected $67.5M, equivalent to a $1.8M increase (+3%) compared to the same
period last year. Year‐to‐date results show the Town has met or exceeded its annual budget goals for Excise Taxes,
Fees & Rentals, as well as Fines & Forfeits categories and is on its way to reaching all targets by the end of the fiscal
year In FY2016 the Town received a $836 305 refund for emergency repairs to the Town pier related to Stormyear. In FY2016, the Town received a $836,305 refund for emergency repairs to the Town pier related to Storm
Juno. Excluding this one‐time revenue, the Town is ahead by $2.7M (+4%) for FY2017 as compared to the same nine
months last year.
General Fund Expenses
General Fund expenses ended the quarter at $17.5M, equivalent to a $1.2M increase (+7%) over the third quarter
of FY2016. School spending was behind nearly half the increase while Debt Service and Group Insurance, comprised
mostly of health insurance coverage for employees, made up another good portion. Project management and
maintenance initiatives have also had an expected impact on expenditures over the quarter. Year‐to‐date, General
Fund expenses totaled $60.6M, representing an increase of $2.7M (+5%) over the same nine months last year. The
rise in year‐over‐year expenses was due to higher health insurance and pension costs as well as continued financial
support to the operations of two enterprise funds: Our Island Home and Solid Waste.
Third Quarter General Fund Revenues Third Quarter General Fund Expenditures (2)
5‐Yr History
(in millions of dollars)
5‐Yr History
(in millions of dollars)
$1 7M
$1.8M $2 7M
$1.6M $1.8M
$2.2M
$2.4M
$2.4M
$0.1M
$2.0M $2.3M $2.4M
$3.2M
$3.0M
$0.0M $0.3M $0.9M
$0.8M
$0.7M
$4.1M $5.1M $5.2M
$7.0M $7.3M
$0.9M
$1.2M $1.1M
$1.7M $
$2.3M
$1.6M $2.7M
Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17
$17.2M $16.6M $17.0M $18.9M $20.8M
Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17
(1) General Fund: general government, safety & protection, marine department, maintenance, human services, culture & recreation,
and contractual obligations.
(2) Excludes school spending which was $6.5M in Q3/FY17 (see next page).
Salaries & Benefits Operational Expenses
Debt Service Transfers & Other
Real Estate & Property Taxes Local Receipts State Aid & Other
1
General Fund Revenues
Where does the money come from?
General Fund Revenues (1)
For Fiscal Quarter Ended March 31, 2017
15%
2%6%Motor Vehicle Excise Tax
Local Rooms Tax
Local Meals & Other Excise
46%
3%7%
11%
10%
Fees & Rentals
License & Permits
State Local Aid
Fines & Forfeits
Other
Third Quarter Rooms Tax
(in thousands of dollars)
Third Quarter Motor Vehicle Excise Tax
(in millions of dollars)
$130K
$1 7M
$1.7M
$81K
$95K $104K
$1.1M
$1.3M $1.4M
$1.7M $1.7M
Third Quarter Meals Tax
(in thousands of dollars)
Third Quarter Building Permits
(in thousands of dollars)
(2)
$0K
Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17 Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17
$
$67K
$79K $86K
$94K
$212K
$163K
$262K
$322K
$277K
(1) Excludes real estate and personal property tax revenue, which equals approx. 81% of total revenues collected in Q3/FY17.
(2) Prior to FY2014, the Town of Nantucket collected Room Excise Tax semi‐annually instead of quarterly.
(2)
$0K
Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17 Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17
2
General Fund Revenues
Results for most recent quarter
Three Months Ended March 31, QTR/QTR FY2017
FY2017 Actuals FY2016 Actuals % Change $ Change Budget
Real Estate Taxes 20,416,947$ 18,562,691$ 10% 1,854,256$ 72,568,546$
Personal Property Taxes 384,814 333,207 15% 51,607 1,632,421
Excise Taxes
Motor Vehicle Excise Tax 1,716,555 1,666,241 3% 50,315 2,150,000
Local Rooms Tax 130,318 104,055 25% 26,263 2,566,000
LlMlT 93 845 86 059 9%7786 900 000Local Meals Tax 93,845 86,059 9%7,786 900,000
Other ‐ Includes Penalties & Interest 167,061 154,328 8% 12,733 640,470
Subtotal ‐ Excise Taxes 2,107,779 2,010,683 5% 97,096 6,256,470
Charges for Services 8,499 7,021 21% 1,478 44,600
Fees & Rentals
Planning Board Filing Fees 17,678 13,225 34% 4,454 84,500
Plumbing & Wiring Inspection Fees 101,000 135,463 (25%) (34,463) 226,000
HDC Filing Fees 81,971 48,357 70% 33,614 202,500
Concession Rental Fees ‐ 2,000 (100%) (2,000) ‐
Marine Mooring Rentals & Docking Fees 25,157 43,033 (42%) (17,876) 180,300
Other 184,316 220,024 (16%) (35,708) 433,735
Subtotal ‐ Fees & Rentals 410,123 462,102 (11%) (51,979) 1,127,035
License & Permits
Building Permits 277,431 321,602 (14%) (44,171) 1,010,000
Li Li 50 600 62 500 (19%)(11900)230 300Liquor Licenses 50,600 62,500 (19%)(11,900) 230,300
Other 39,075 52,368 (25%) (13,293) 216,750
Subtotal ‐ License & Permits 367,106 436,469 (16%) (69,363) 1,457,050
State Local Aid
School Aid 511,179 745,236 (31%) (234,057) 2,980,944
Other 37,035 56,627 (35%) (19,592) 197,543
Subtotal ‐ State Local Aid 548,214 801,863 (32%) (253,649) 3,178,487
Fines & Forfeits
Parking Fines 69,396 23,531 195% 45,865 230,000
Other 3,850 3,275 18% 575 14,800
Subtotal ‐ Fines & Forfeits 73,246 26,806 173% 46,440 244,800
Investment Income 30,788 32,481 (5%) (1,692) 110,500
Other Departmental Revenue
Town Gas Sales 14,832 10,005 48%4,827 69,500Town Gas Sales 14,832 10,005 48%4,827 69,500
Off Duty Police and Fire Personnel 7,975 7,206 11% 769 60,000
Other 12,392 181,889 (93%) (169,497) 53,290
Subtotal ‐ Other Dept'l Revenue 35,199 199,100 (82%) (163,902) 182,790
Miscellaneous ‐ ‐ na ‐ 49,245
Transfer & Other Sources
Debt Premium ‐ ‐ na ‐ ‐
Indirect Costs 154 825 na 154 825Indirect Costs 154,825 ‐ na 154,825 ‐
Special Revenue Fund Transfer ‐ ‐ na ‐ ‐
Enterprise Fund Transfer ‐ ‐ na ‐ ‐
Other ‐ ‐ na ‐ ‐
Subtotal ‐ Transfer & Other Sources 154,825 ‐ na 154,825 ‐
Total General Fund Revenue 24,537,540$ 22,872,422$ 7% 1,665,118$ 86,851,944$
3
General Fund Revenues
Results for year-to-date period
Nine Months Ended March 31,YTD/YTD FY2017,/FY2017
FY2017 Actuals FY2016 Actuals % Change $ Change Budget
Real Estate Taxes 53,882,070$ 51,218,558$ 5% 2,663,512$ 72,568,546$
Personal Property Taxes 1,092,823 1,068,148 2% 24,675 1,632,421
Excise Taxes
Motor Vehicle Excise Tax 2,238,668 2,100,209 7% 138,459 2,150,000
Local Rooms Tax 3,391,879 3,315,484 2% 76,396 2,566,000
Local Meals Tax 985,997 927,322 6% 58,675 900,000
Other ‐ Includes Penalties & Interest 451,643 507,310 (11%) (55,667) 640,470
Subtotal ‐ Excise Taxes 7,068,187 6,850,324 3% 217,863 6,256,470
Charges for Services 30,822 29,798 3% 1,025 44,600
Fees & Rentals
Planning Board Filing Fees 83,935 62,268 35% 21,667 84,500
Plumbing & Wiring Inspection Fees 262,408 282,339 (7%)(19,931) 226,000 g g p ,,()(, ),
HDC Filing Fees 212,719 140,471 51% 72,248 202,500
Concession Rental Fees 129,923 206,075 (37%) (76,153) ‐
Marine Mooring Rentals & Docking Fees 155,862 262,627 (41%) (106,765) 180,300
Other 323,916 420,762 (23%) (96,846) 433,735
Subtotal ‐ Fees & Rentals 1,168,763 1,374,542 (15%) (205,780) 1,127,035
License & Permits
Building Permits 891,361 887,764 0% 3,597 1,010,000
()()Liquor Licenses 111,400 141,550 (21%)(30,150) 230,300
Other 124,821 159,663 (22%) (34,841) 216,750
Subtotal ‐ License & Permits 1,127,582 1,188,977 (5%) (61,395) 1,457,050
State Local Aid
School Aid 2,044,716 1,987,296 3% 57,420 2,980,944
Other 148,936 153,802 (3%) (4,867) 197,543
Subtotal ‐ State Local Aid 2,193,652 2,141,098 2% 52,554 3,178,487
Fines & Forfeits
Parking Fines 239,677 199,477 195% 45,865 230,000
Other 14,125 11,675 18% 575 14,800
Subtotal ‐ Fines & Forfeits 253,802 211,152 20% 42,649 244,800
Investment Income 65,142 110,845 (41%) (45,703) 110,500
Other Departmental Revenue
Town Gas Sales 31 841 43 507 (27%)(11 667)69 500Town Gas Sales 31,841 43,507 (27%)(11,667) 69,500
Off Duty Police and Fire Personnel 34,780 20,514 70% 14,266 60,000
Other 41,564 1,052,792 (96%) (1,011,228) 53,290
Subtotal ‐ Other Dept'l Revenue 108,184 1,116,813 (90%) (1,008,628) 182,790
Miscellaneous ‐ 11,388 na ‐ 49,245
Transfer & Other Sources
Debt Premium ‐ 35,307 (100%) (35,307) ‐
Idi tCt 464 475 464 475Indirect Costs 464,475 ‐ na 464,475 ‐
Special Revenue Fund Transfer ‐ ‐ na ‐ ‐
Enterprise Fund Transfer ‐ 266,150 (100%) (266,150) ‐
Other ‐ ‐ na ‐ ‐
Subtotal ‐ Transfer & Other Sources 464,475 301,457 54% 163,018 ‐
Total General Fund Revenue 67,455,502$ 65,623,101$ 3% 1,832,401$ 86,851,944$
4
General Fund Expenses
Where does the money go?
General Fund ExpensesGeneral Fund Expenses
For Fiscal Quarter Ended March 31, 2017
37%
10%
6%2%
Education
Group & General Insurance
Safety &Protection37%
19%
13%
11%
Safety & Protection
General Gov't
Debt Service
Maintenance
Third Quarter Operational Expenses (1)
(in millions of dollars)
Third Quarter Salary Expenses (2)
(in millions of dollars)
All Others
$0.9M
$1.2M $1.1M
$1.7M $1.8M
$2.9M $3.0M $3.1M
$4.1M $4.2M
Third Quarter Health & Other Group Insurance
(in millions of dollars)
Third Quarter Debt Service (P&I)
(in millions of dollars)
Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17 Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17
$1.6M
$1.9M $2.1M
$2.9M $3.1M
$2.3M
$1.6M
$2.7M
$1.6M
$1.8M
(1) Excludes Debt Service, Transfers and State Assessments, which are subject to timing differences
(2)Excludes Health Insurance & Other Group Insurance, Pension Costs and Contractual Obligations.
Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17 Q3/FY13 Q3/FY14 Q3/FY15 Q3/FY16 Q3/FY17
5
General Fund Expenses
Results for most recent quarter
Three Months Ended March 31, QTR/QTR FY2017
FY2017 FY2016 % Change $ Change Budget (1)
General Government
Finance Committee 9,629$ 2,042$ 372% 7,587$ 18,680$
Finance & Operations 540,403 479,899 13% 60,503 2,370,839
Human Resources 65,080 58,124 12% 6,956 272,139
Information Systems / GIS 182,793 292,908 (38%) (110,115) 955,059
Legal / Town Counsel 114,917 97,662 18% 17,255 468,602
Moderator ‐ ‐ na ‐ 1,680
Planning & Land Use Services 468,357 438,674 7% 29,683 1,829,459
Town Administration 346,019 266,857 30% 79,162 1,604,876
Natural Resources 148,498 157,913 (6%) (9,415) 654,052
Town Clerk 87,345 88,429 (1%) (1,084) 343,360
Subtotal 1,963,042$ 1,882,510$ 4%80,532$ 8,518,746$
Safety & Protection
Emergency Management ‐$ 1,163$ (100%)(1,163) 7,075 mergency Management $,63$( 00%)(,63)7,075
Fire Department 665,617 665,714 (0%) (97) 2,992,011
Police & Animal Control 1,597,188 1,419,169 13% 178,019 6,070,403
Street Lighting 23,833 29,309 (19%) (5,476) 165,000
Subtotal 2,286,637$ 2,115,354$ 8%171,283$ 9,234,489$
Marine & Coastal Resources
Marine Department 54,381$ 56,876$ (4%) (2,495) 820,581
Subtotal 54,381$ 56,876$ (4%)(2,495)$ 820,581$
Maintenance
Gas / Town Vehicles 70,624$ 47,973$ 47% 22,651 446,033
Mosquito Control ‐ ‐ na ‐ 105,063
Public Buildings 226,600 184,475 23% 42,125 1,198,038
Public Works 600,153 563,539 6% 36,615 2,958,805
Snow & Ice Removal 211,971 183,171 16% 28,800 151,590
Subtotal 1,109,348$ 979,158$ 13%130,191$ 4,859,528$
Human ServicesHuman Services
Human Services 75,333$ 70,728$ 7% 4,605 436,967
Subtotal 75,333$ 70,728$ 7%4,605$ 436,967$
Culture & Recreation
Atheneum 175,541$ 346,720$ (49%) (171,178) 702,165
Town Clock 141 103 36% 38 4,777
Visitor Services 117,635 99,757 18% 17,878 472,440
Subtotal 293,317$ 446,580$ (34%)(153,263)$ 1,179,382$
Other Expenditures
Debt Service Principal 1,341,800$ 1,091,800$ 23% 250,000 5,566,241
Debt Service Interest 486,360 469,928 3% 16,432 1,513,824
Group Insurance 3,107,561 2,908,936 7% 198,625 12,052,110
General Insurance 206,685 197,817 4% 8,868 1,860,263
Retirement Assessment ‐ ‐ na ‐ 3,921,257
Cherry Sheet Assessments 68,026 99,146 (31%) (31,120) 427,300
Contractual Obligations ‐ ‐ na ‐ 386,611
(1) Budget includes prior year encumbrances, enterprise fund transfers and trust fund transfers.
(2) Includes annual transfer to Community School.
g ,
Intergovernmental ‐ ‐ na ‐ 8,000,985
Education (2) 6,492,156 5,992,471 8% 499,685 27,348,866
Subtotal 11,702,589$ 10,760,099$ 9%942,490$ 61,077,457$
Total General Fund Expenses 17,484,647$ 16,311,304$ 7% 1,173,343$ 86,127,148$
6
General Fund Expenses
Results for year-to-date period
Nine Months Ended March 31, YTD/YTD FY2017
FY2017 FY2016 % Change $ Change Budget (1)
General Government
Finance Committee 15,710$ 8,175$ 92% 7,535$ 18,680$
Finance & Operations 1,392,438 1,467,416 (5%) (74,978) 2,370,839
Human Resources 167,616 152,215 10% 15,400 272,139
Information Systems / GIS 650,396 578,697 12% 71,699 955,059
Legal / Town Counsel 282,634 255,447 11% 27,187 468,602
Moderator 178 ‐ na 178 1,680
Planning & Land Use Services 1,247,567 1,149,315 9% 98,251 1,829,459
Town Administration 1,028,473 782,686 31% 245,786 1,604,876
Natural Resources 395,590 384,255 3% 11,334 654,052
Town Clerk 260,868 217,333 20% 43,534 343,360
Subtotal 5,441,468$ 4,995,540$ 9%445,927$ 8,518,746$
Safety & Protection
Emergency Management 1,367 1,859 (26%)(491) 7,075 mergency Management ,367 ,859 (6%)(49 )7,075
Fire Department 1,946,600 1,947,945 (0%) (1,344) 2,992,011
Police & Animal Control 4,079,645 4,066,146 0% 13,499 6,070,403
Street Lighting 59,131 70,575 (16%) (11,444) 165,000
Subtotal 6,086,744$ 6,086,525$ 0%219$ 9,234,489$
Marine & Coastal Resources
Marine Department 551,478 545,430 1% 6,048 820,581
Subtotal 551,478$ 545,430$ 1%6,048$ 820,581$
Maintenance
Gas / Town Vehicles 170,518 150,778 13% 19,740 446,033
Mosquito Control 65,386 73,764 (11%) (8,378) 105,063
Public Buildings 561,084 535,820 5% 25,264 1,198,038
Public Works 1,870,688 1,928,516 (3%) (57,828) 2,958,805
Snow & Ice Removal 245,147 231,363 6% 13,784 151,590
Subtotal 2,912,822$ 2,920,240$ (0%)(7,418)$ 4,859,528$
Human ServicesHuman Services
Human Services 202,157 200,194 1% 1,963 436,967
Subtotal 202,157$ 200,194$ 1%1,963$ 436,967$
Culture & Recreation
Atheneum 526,624 693,439 (24%) (166,815) 702,165
Town Clock 1,625 317 412% 1,307 4,777
Visitor Services 328,145 328,495 (0%) (350) 472,440
Subtotal 856,394$ 1,022,251$ (16%)(165,858)$ 1,179,382$
Other Expenditures
Debt Service Principal 5,641,916 5,273,997 7% 367,919 5,566,241
Debt Service Interest 1,405,515 1,286,789 9% 118,727 1,513,824
Group Insurance 7,925,583 7,186,058 10% 739,525 12,052,110
General Insurance 1,290,188 1,223,733 5% 66,455 1,860,263
Retirement Assessment 3,922,150 3,567,128 10% 355,022 3,921,257
Cherry Sheet Assessments 271,483 48,080 465% 223,403 427,300
Contractual Obligations ‐ ‐ na ‐ 386,611
(1)Budget includes prior year encumbrances, transfers to enterprise funds and transfers to trust funds.
(2) Includes annual transfer to Community School.
g ,
Intergovernmental 7,692,785 7,105,000 8% 587,785 8,000,985
Education (2) 16,416,016 16,421,349 (0%) (5,333) 27,348,866
Subtotal 44,565,636$ 42,112,134$ 6%2,453,502$ 61,077,457$
Total General Fund Expenses 60,616,698$ 57,882,314$ 5% 2,734,384$ 86,127,148$
7
Capital Investments
Maintaining and improving the infrastructure
FY2017 Top 10 Capital Projects
Year‐To‐Date Expenditures
1. New Intermediate School Construction $27,665,961
2. Boulevarde / Lovers Ln Reconstruction $1,716,051
3. Easy Street Bulkhead Reconstruction $1,099,539
4. Brant Point Propagation Facility Construction $819,165
5. Other Road Repairs (Island‐Wide)$552,532
6. Other School Improvements $170,841
7. Other Pier Repairs $51,600
8. Other Building Improvements $29,647
9. Public Works Garage Design & Renovation $19,775
10. Parking Improvements (2 FG, 4 FG)$10,533
New intermediate school is expected to be complete by the end of the fiscal year
Total $32,135,644
Reconstruction of the Easy Street bulk head has been completed
8
Financing Activity
How much do we owe?
The General Fund’s total outstanding debt was $106.0M as of the end of the third fiscal quarter
This total includes $79.9M in principal and $26.1M in interest obligations related to the principal
Approximately 57% of General Fund debt is scheduled to be amortized over the next 10 years
Principal and interest payments due in FY2017: $6.9M
Principal and interest payments due through the end of FY2021 (approx. 5 years): $33.7M
The Town monitors borrowings and other performance measures against Financial Policies adopted in
FY2017 to ensure continued stability and prudence
The Town’s Credit Rating
External credit ratings have a direct influence on the Town’s ability to:
Minimize borrowing costs
Successfully borrow funds to complete the improvement and construction of long‐term assets and
the Town’s infrastructure
In October 2016, Moody’s affirmed the Town’s rating of Aa2
During the same period, Standard & Poor’s initiated coverage on the Town of Nantucket’s general obligation
debt in a report establishing a AA rating
Both ratings represent the second highest rating on the agencies’ municipal credit rating scale
The Town is expecting a visit from Moody’s in May 2017 as it prepares to raise long‐term debt to pay for
projects such as the new intermediate school, airport projects, and other capital projects currently underway
Type of Bond Issued Moody’s Rating Standard & Poor’s Rating
General Obligation Aa2 AA
9
Outlook
The Muni Watch
Periods based on fiscal calendar (1)Trend (2)
Local Receipts Last Qtr Qtr/Qtr LTM Yr/Yr 3 Mo LTM DetailsLocal Receipts Last Qtr Qtr/Qtr LTM Yr/Yr 3‐Mo LTM Details
Building Permits $277,431 (14%) $1.2M 8%
Rooms Tax $130,318 25% $3.5M 3%
Meals Tax $93,845 9% $1.1M 7%‐ Yellow if trend is between +5% and ‐10%
Motor Excise Tax $1,746,555 5% $2.7M 2%‐ Red if trend is below ‐10%
Local Indicators
For Local Receipts categories:
‐ Green if trend is 5% or above
Real Estate ‐ Sales ($M) $182M (9%) $994M 11%
Real Estate ‐ Transactions 99 (13%) 511 0%
SSA Freight Revenue ($M) $5.4M 8% $27M 4%
SSA Nantucket Passengers 132,833 9% 660,544 2%
GA Airport Landings 601 8% 13,917 11%
between 0% and ‐3%, Red if trend is < 3%
Airport: Private aircraft activity.
SSA categories: ‐ Green if trend ≥ 0%, Yellow if
Green if trend ≥ 5%, Yellow if 0% to 5%, Red if < 0%
Real Estate categories: ‐ Green if trend ≥ 0%, Yellow if
between 0% and ‐10%, Red if trend is < 10%
Nat'l Leading Indicators Current 3‐Mo 12‐Mo 3‐Mo LTM
LIBOR T‐Bill Yield Spread 0.39% 0.52% 0.36%
Sr Loan Officer Survey 1.4% 1.5% (7%)
S&P 500 Performance 2,363 2,239 2,059
WeeklyInitial Claims 247 250 257 000 265 000
‐ Difference between 3mth LIBOR & 3 mth treasury bill
(< 0.5% signals stability).
‐ Fed Reserve: % of loan officers seeing loan standards
tightening for med/large firms (< 10% is positive).
‐ S&P 500 index as proxy of performance of risky
equity assets. Level > 1950 is positive.
‐ 4‐wk average of unemployment insurance initial
Quarterly Building Permits
(in thousands of dollars)
Quarterly Real Estate Sales
(in millions of dollars)
Quarterly Real Estate Sales 4 QTR Moving AverageQuarterly Building Permits 4 QTR Moving Average
Weekly Initial Claims 247,250 257,000 265,000 claims, < 300,000 is positive.$175M$211M$274M$343M$163M$156M$251M$289M$200M$209M$317M$287M$182M$163K$297K$272K$238K$262K$242K$310K$257K$322K$332K$274K$340K$277KQuarterly Motor Excise Tax
(in millions of dollars)
Quarterly Meals Tax
(in thousands of dollars)
Quarterly Rooms Tax
(in millions of dollars)
$1.34M $1.38M
$1.66M $1.75M
$1.30M
$1.56M
$1.56M
$1.65M
$1.55M
$1.71M
$382K $383K
$424K $418K$432K
$460K
$0.57M
$0.29M
$0.14M
$0.70M
$0.27M
$0.17M
$0.57M
$0.39M
$0.14M $0.08M
$0.08M $0.09M $0.08M$0.10M
$0.11M
$0.13M $67K $75K $79K $64K $86K $71K
$94K
(1) Local receipt and local indicator data comparisons are based on the Town’s fiscal year (ex: Q1 = 7/1‐9/30).(2)LTM refers to “last twelve months”.
10
Investment Report
How safe is our money?
The following is a report prepared by the Town’s investment manager, Morgan Stanley:
Trust Funds
Account balance: $9,109,348
Asset Allocation: 10% Equity, 89% Fixed Income, 1% Cash
Feb 2017 – made initial 10% allocation to Equities. While maintaining a liquid, conservative allocation, we believe
having a small equity exposure will help overall returns while providing dividend income and a hedge against risinghaving a small equity exposure will help overall returns, while providing dividend income and a hedge against rising
interest rates.
Equities are comprised of the 21 companies on the MA Legal List of Investments.
Fixed income investments are comprised of investment grade Corporate bonds, US Gov’t Agency bonds, and CDs.
The annual projected income on the portfolio is $262,026 (approximately 2.9% yield)
OPEB Fund
Account balance: $1,383,516
Asset Allocation: 51% Equity, 48% Fixed Income, 1% Cash
Feb 2017 –Given the long‐term nature of OPEB funds and the favorable equity environment, we increased the
equity allocation from 40% to 50%.
Fixed Income investments are comprised of investment grade corporates and CDs.
Fiscal Year to date return (7/1/2016 ‐3/31/17) of the OPEB fund was 3.15%, and 4.39% since inception (5/6/2014)
Equity Portfolio Overview
Nantucket’s equity portfolio is comprised of the 21 stocks listed on the Massachusetts List of Legal InvestmentsNantucket s equity portfolio is comprised of the 21 stocks listed on the Massachusetts List of Legal Investments.
The Legal List portfolio of stocks returned 8.4% over the 1st quarter, versus a return of 6.1% for the S&P 500.
Overall equity markets have performed well YTD, following improving US and global economic data, positive
corporate earnings, and market enthusiasm surrounding various political agenda items.
Fixed Income Market
As of 3/31, the 10 Year Treasury rate was 2.40%, down slightly from the year‐end rate of 2.45%.
During Q1 however, bond prices remained volatile and the 10‐Year ranged from 2.31% to 2.62%.
The Federal Reserve raised interest rates in January, again by 0.25%, to a target range of .50% to 0.75%
Bond investors continue to debate the extent and pace of Federal interest rate hikes in 2017.
Strategy Outlook
We expect the equity markets will continue to move higher throughout 2017, driven by improving economic data
and positive corporate earnings.
Throughout the year, we expect periods of higher volatility due to US political uncertainty, equity valuation
concern and broader geopolitical risksconcern, and broader geopolitical risks.
We anticipate the Federal Reserve will continue to slowly raise interest rates, possibly two additional times in 2017.
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