Looks like Peoria is picking up in 2020 where 2019 left off: Growth, growth and more growth.
And the city has money in the bank - big time.
According to agenda information for the first Peoria City Council meeting of the year, scheduled for Tuesday, Jan. 7, the city’s investment portfolio as of Sept. 30 was just over $359 million.
For the quarter from July 1 through Sept. 30, investment income on that portfolio was $1.9 million.
The 2.12% average yield was actually better than the 1.17% return by the S&P 500 in the third quarter of 2019.
Like other cities that know how to stay out of trouble, Peoria plays it quite conservative with taxpayer money. More than half of the investments are with the U.S. Treasury. Peoria has about 10% of its investment money in Fannie Mae and Freddie Mac, the federal housing programs.
However, the portfolio gets a bit interesting. Corporate notes (maturing from a few months to a maximum of three years) account for 17% of the Peoria portfolio.
The city has more than $11 million invested in Toyota and $7 million in Mitsubishi. In the Hmmm Department, Peoria is not invested in Chevrolet or Ford.
Peoria has a $5 million bite out of Apple and $4.5 million in Walmart.
An eyebrow-raiser is $1.5 million in the Bank of Montreal.
Double eyebrow-raiser: Peoria has $500,000 in the Bank of Nova Scotia.
Don’t expect Peoria’s portfolio to ride the rollercoaster of Wall Street’s fourth quarter.
As the agenda introduction notes, the most important factor is safety: “Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the portfolio.”
The second-most important factor is the ability for the city to turn investments to cash, if needed: “The investment portfolio will remain sufficiently liquid to enable the city to meet all operating requirements which might be reasonably anticipated.”
Yield, or return on investment, is the third and last listed priority.
“The city of Peoria invests all available funds of the city, taking into consideration anticipated cash flow requirements and the safety and risk of investments. Investments are made in accordance with the city’s investment policy and Arizona Revised Statutes Title 35-321 through 35-329.”
Another financial document on the agenda summarized Peoria’s fiscal year that ended June 30.
“In recent years, Peoria’s population growth has been extremely strong as Maricopa County leads the nation in population growth,” the report stated. “People are moving to Arizona not just for the weather but also for the high quality of life and this trend is expected to continue.
“The West Valley has the region’s newest freeway (Loop 303) and developments, such as Vistancia, a top-selling master-planned community in north Peoria are bringing higher-end homes, golf courses and shopping amenities to attract homebuyers. Peoria also has a large amount of undeveloped land in the north to accommodate future growth.”
Some 6,000 new home permits have been issued in Peoria since 2015, with just a slight dip last year, according to the report:
“After 3 consecutive years of more than 1,500 new residential permit issues, the city issued 1,230 new residential building permits in fiscal year 2019.”
And business is booming, around town.
“In Peoria, sales tax revenues grew by 3.8% this year and are expected to continue growing in fiscal year 2019-20, with strong performance in retail (especially auto sales), restaurants and bars, and contracting categories.”
While financial in nature, the report stresses that the city’s leaders are committed to maintaining (and increasing) quality of life for residents, boasting that “In September 2018, Peoria was ranked the No. 1 place to live in Arizona by Money Magazine.”
Indeed, the fiscal year paper noted that the city has invested in projects like Paloma Community Park, 85 acres of baseball and soccer fields, a fishing lake, dog park, etc., began construction in April and is scheduled to be completed this summer.