The balance of unrestricted funds as of August 31, 2013 was $10,235,884 which includes a $2.5M cash reserve. Restricted funds include the Preservation and Improvement Fund (“PIF”) and the Capital Reserve Fund. As of August 31, 2013, PIF had a balance of $12,980,176 plus $510,000 collected in August that was transferred into the PIF account the first part of September 2013. The Capital Reserve Fund had a balance of $1,000,044 as of August month end.
The corporation has operated within its budget for the 2013 fiscal year.
Investment Report 2nd Quarter 2013:
At the end of the second quarter, the Franklin Templeton unrestricted money market fund had an ending balance of $7,713,843.98 and the restricted Franklin Templeton money market fund had an ending balance of $8,667,152.31.
RCSC’s Investment Policy (Board Policy 33) is stringent in its requirements with the priority of investment objectives to be placed in this order: 1) safety, 2) liquidity, and 3) yield.
As of June 30, 2013, RCSC had invested in four fixed income funds: Franklin Adjustable U.S. Government Securities Fund Class A, Franklin Limited Maturity U.S. Government Securities Fund Class A, Franklin Low Duration Total Return Fund Class A, and Franklin U.S. Government Securities Series Class A.
At the end of the second quarter in unrestricted funds, RCSC had invested $2,500,000 into the aforementioned four fixed income funds with an ending value of $2,476,605.21 as of June 30, 2013, showing a .94% decrease in value of $23,394.79.
At the end of the second quarter in restricted funds, RCSC had invested $5,000,000 into the aforementioned four fixed income funds with an ending value of $4,948,997.01 as of June 30, 2013, showing a 1.02% decrease in value of $51,002.99.
The fixed income fund producing the largest decrease in value was the Franklin U.S. Government Securities Series Class A which has an average duration of 5.3 years, longer than the other funds. Our broker has stated that RCSC investments are positioned for a rising rate environment expectation, and relative to the overall bond market, the mix of RCSC investments is doing what it was designed to do. He continues to monitor the bond markets and our account closely. At this time, Board Policy 33 provides for very limited choices in investments which may need to be considered.