Debt and Investment Management
900 E. Broad Street, Suite 1003
Richmond, VA 23219
Debt and Investment Management Division
Debt Information
Credit Agency Ratings
The City remains focused on being a welcoming, inclusive, diverse, innovative, and equitable City that ensures a high quality of life for all, moving toward the goal of becoming "One City" with a Triple-A (AAA) bond rating. The City has maintained strong credit ratings in recent years:
Existing Debt
General Obligation Bonds
As of June 30th, 2024, the City has $928.9 million of long-term General Obligation (“GO”) Bonds outstanding spread among 20 different bond series ranging in date from 2010B to 2024B. These GO bonds carry the full faith and credit of the City of Richmond and are repaid from several different Funds within the City. Each Series of GO bonds have been issued for 15-25 year repayment periods to finance various capital projects.
Line of Credit Bond Anticipation Notes
At the end of fiscal year 2024, the City had two Line of Credit (LOC) Bond Anticipation Notes outstanding. The 2023A LOC was established to provide funding for ongoing Richmond Public Schools projects, City Capital Improvement Plan (CIP) projects, and Stormwater Utility projects. As of June 30th, 2024, the 2023A LOC has $65.8 million in debt outstanding. Additionally, the City established the 2023A LOC to finance the planning and designing phases of future City capital projects. As of June 30th, 2024, the outstanding principal balance was $5.0 million. The City anticipates refinancing this debt into a long-term general obligation bond in the near future.
Public Utility Revenue Bonds
The City has issued 13 series of Public Utility Revenue Bonds to finance ongoing capital projects of its Gas, Water and Wastewater Utility Enterprise Funds. As of June 30th, 2024, the outstanding balance of these Public Utility Revenue Bonds is $814.9 million.
Independent Municipal Advisor Exemption
By publicly posting the following written disclosure, the City of Richmond, Virginia intends that market participants receive and use it for purposes of the independent registered municipal advisor exemption to the SEC Municipal Advisor Rule.
The City of Richmond, Virginia has retained an independent registered municipal advisor. The City of Richmond, Virginia is represented by and will rely on its municipal advisor, Davenport & Company LLC, to provide advice on proposals from financial services firms concerning the issuance of municipal securities and municipal financial products (including investments of bond proceeds and escrow investments (if applicable).
Proposals may be addressed to:
City of Richmond
Attn: Department of Procurement Services
900 E. Broad St.
Richmond, VA 23219
If the proposal received will be seriously considered by the City of Richmond, Virginia, the City will share the document with its municipal advisor. Please note that aside from regulatory-mandated correspondence between an underwriter and municipal advisor, the underwriter should not share or discuss proposals with the municipal advisor unless they already have been provided to the City of Richmond, Virginia.
Additional Information
The City of Richmond posts information regarding debt issuance, official statements, disclosures, and more to our MSRB Electronic Municipal Market Access (EMMA) Page.
To learn more about the fiscal health of the City of Richmond, please visit our Reports Page where you can find Audited Comprehensive Annual Financial Reports, Unaudited Monthly Reports, and more.
If you would like to know more about Richmond's future financial plans, please see the Department of Budget and Strategic Planning's Annual Budget Documents Page where you can find Approved Budgets as well as 5-Year Capital Improvement Plans.
Cash & Investment Information
The following sections of this webpage contain information about the City’s cash and investment management guidelines, as well as certain policies and procedures. The Department of Finance’s Debt & Investment Management Division transacts, accounts, monitors, and reports all the City’s cash, cash equivalents and investments, as well as ensures compliance regarding the City’s Policies. The Debt & Investment Management Division manages daily cash and investments for operations, as well as forecasts, and trades investments as needed to fund City projects.
The Debt & Investment Division maintains this reference as a guideline of the functions and compliance measures adhered to by the Division related to cash and investment management, in an attempt to provide an understanding and overview of operating investment management, municipal investing, and the rules and regulations that dictate the actions of the City of Richmond.
Cash and Investment Overview
Cash management is required to ensure that both the daily operating needs of the City, and the long-term debt service financing payments are met. The City’s Investment Management program covered in this document governs only the City’s operating investment portfolio and holdings and does not relate to the Richmond Retirement System’s retirement investment holdings and portfolio.
The City’s adopted Investment Policy, which outlines the permitted types of investments, and investment exposure ranges governs the investment holdings. The City utilizes investments to earn interest on excess cash, based on the seasonality and the timing of constituent tax revenue collections, and utility payments, to fund programs and support City efforts and initiatives.
The Debt and Investment Division is responsible for the City’s operating portfolio and executes all operating investment and operating cash management functions, in coordination with other departments and component units to increase interest earnings to help fund City initiatives.
The Division manages operating investment vehicles that are allowable per the City’s Investment Policy, with a goal of maximizing investment earnings, and preserving capital, within levels of prudence established by Virginia statute (Code of Virginia Title 2.2, Chapter 45. Investment of Public Funds Act) and best practice guidelines of the Government Finance Officers Association.
Operations include:
- Adherence to federal and state investment requirements and reporting
- Daily cash management
- Short- and long-term cash forecasting
- Development and management of relationships with banking service providers, money managers, brokers, and consultants, as appropriate
- Investment of funds as efficiently and effectively through analysis focused on preservation of capital
- Development and execution of internal controls to prevent collusion and fraud
- Custodial safekeeping and financial reporting
- Development and maintenance of Policies and Standard Operating Procedures to ensure clear delegation of authority and duties to staff
Treasury Structure
The Debt & Investment Division is responsible for the oversight of the City’s daily operating cash balance, which funds the daily operating needs of the City’s various departments and ensures the proper flow of funds to various component units. The City’s operating cash is centralized. The City utilizes Local Government Investment Pool (LGIP) account(s) in additional to separately managed portfolios in an effort to maximize earned interest, and to diversify the City’s portfolio.
The LGIP fund is a State of Virginia managed short-term liquidity fund that offer public entities of the Commonwealth of Virginia the opportunity to invest in ‘AAA’ rated, professionally managed, diversified portfolios which adhere to the Code of Virginia regarding allowable investments.
Based on the seasonality of operating cash flows, such as real estate taxes and utility revenue collections, funds from the LGIP account can be used to cover the City’s operating cash needs, or excess cash is transferred into vehicles with higher interest income earning potential.
The City also maintains relationships with other banking institutions for smaller amounts of non-operating cash. This non-operating cash includes small endowment or CDs established throughout history by various constituents and is restricted and non-operating in nature.
Separately managed accounts are short to intermediate duration investments that are managed by the City with assets held in custodial account(s).
Investment decisions are made by the Debt & Investment Division, a third-party consultant is not used for portfolio management.
Budget Preparation
The Debt & Investment Division coordinates with the City’s Budget Department to provide an annual estimate of interest income earnings available to fund City initiatives. The budgeted figure is adjusted and updated as needed, or at least quarterly to ensure accuracy of the City’s budget, and for proper short- and long-term planning.
Other Post-Employment Benefits & Investment Committee
The City of Richmond’s Other Post-Employment Benefits (OPEB) & Investment Committee holds quarterly meetings to review portfolio financial performance, review market expectations, discuss and update budgeted and forecasted investment figures, and discuss any additional operational and investment topics, as needed.
Committee members are responsible for the oversight, development, supervision, and compliance of the approved Investment Policy.
Individuals holding the following positions within the City serve as OPEB & Investment Committee Members:
- DCAO for Finance and Administration
- Director of Finance
- Deputy Department Director, Department of Public Utilities
- Chief Debt & Investment Officer
- Director of Budget and Strategic Planning
- City Economist
Committee members rely on both internal and external parties for recommendations to investment strategies, policy changes, knowledge of economic conditions and trends, and financial reporting, to make appropriate and informed decisions on behalf of the City’s investments.
The following table illustrates the roles and responsibilities of the Committee and various Departments:
| Summary Responsibilities | OPEB & Investment Committee | Department of Budget and Strategic Planning | Department of Finance | Debt & Investment Division |
|---|---|---|---|---|
| Supervision | Reviews and approves strategies and policy changes | Recommends investment strategy and policy updates | ||
| Strategy | Reviews and approves strategic policies | Designs strategic policies | ||
| Forecasting | Utilizes knowledge of current, existing, proposed, and potential City plans to assist Departments in recommendations and assumption developments |
Maintains budget to actual reporting to support necessary decisions Collaborates to provide forecasting using investment performance estimates provides by the Debt & Investment Division |
Prepares cash forecasting information related to investment performance and expected inflows/outflows related to earnings and debt payments | Advises and informs Committee relative to economic conditions and trends |
| Reporting | Reviews reporting, inquires about changes, trends, deviations from expectations | Prepares reporting | Prepares reporting | Prepares reporting |
| Compliance | Ensures compliance with approved Investment Policy | Ensure recommended strategies meet budgetary City needs | Ensure compliance for ACFR reports | Ensures compliance with approved Investment Policy |
Policies & Procedures
Cash Management and Investment Policy
The City’s approved and adopted Cash Management and Investment Policy is maintained by the OPEB & Investment Committee and establishes the guidelines and requirements that the Debt & Investment Division must adhere to, related to cash management and operating investments. It can be found, for internal City of Richmond employees, at the following link: FIN 06 001 Policy: Cash Management and Investment and is available to the public by request.
Authorization Policy
The Debt and Investment Division aims to keep consistent authority across banking institutions, broker/dealers, and custodial banks to maintain reliable and consistent internal control, separation of duties, and to comply with Ord. No. 2020-238.
The following positions within the City of Richmond are authorized on behalf of the City, to open bank and investment accounts, and direct operating investment decisions:
- Director of Finance
- Deputy Director of Finance
- Chief Debt & Investment Officer
Reporting Requirements
Monthly investment statements are collected and circulated, and the required transactional information is recorded into the ledger by the General Accounting Division, with coordination from the Debt & Investment Division as needed. The monthly balances are reconciled as part of the normal monthly close process. The balances reflected in the ledger are updated and reconciled on a monthly basis to ensure accuracy and timeliness in financial reporting for all departments with general ledger access across the City.
At minimum, the Daily Cash Report is circulated by the Debt & Investment Division to the following roles at least bi-weekly, if not more frequently:
- Director of Finance
- Deputy Director of Finance
- Chief Debt & Investment Officer
Total investment holdings, by asset category (e.g. cash, cash equivalents, and fixed income investments) are reviewed by the OPEB & Investment Committee during each quarterly meeting, if not more frequently. The reports are updated with the most up-to-date information available dependent on the timing of the quarterly meeting.
The Debt & Investment Division reviews the Intraday Position report daily, for operating needs, and cash forecasting reports are updated at least quarterly, if not more frequently, to ensure short- and long-term operating cash needs are met.
The Debt & Investment Division is responsible for ensuring sufficient operating cash on a daily basis, while maximizing the dollars invested to maximize earning potential.
Relationships & Strategy
Custodial Bank & Broker Dealer Transaction Process & Responsibilities
The Debt and Investment Division is responsible for establishing and maintaining relationships related to portfolio management with various external vendors. The overall relationship and structure of the operating portfolio is summarized below:
- City of Richmond
- Responsible for investment strategy, competitive bidding, and trade coordination
- Communicates approved purchases & sales to custodian
- Negotiates purchases & sales between brokers/dealers
- Custodial Bank
- Holds and settles investments for safekeeping
- Provides financial reporting
- Brokers/Dealers
- Provides secure trade settlement services
- Executes City approved trades
The Debt & Investment Division makes all operating investment decisions internally and does not use a third-party consultant for investment management or advisory services. The Division is responsible for the overall investment strategy, compliance with the approved Cash Management and Investment Policy, competitive bidding between broker/dealers for investment purchases and sales, approving investment purchases and sales, and communicating approved trades to the custodian, at which point the custodian provides final coordination with the broker dealer for trade execution, confirms execution of confirmed/approved trades, safekeeping of assets, and financial reporting back to the City.
Investment Management Strategy Overview
The Debt & Investment Division is responsible for the short- and long-term operating cash needs of the City. The following table outlines the segmentation, maturity, timing, and strategy considerations related to the management of the City’s operating funds to ensure short term liquidity needs are met and that excess cash is invested to maximize potential interest income and earnings to fund City initiatives and programs.
| Immediate Liquidity | Liquidity Reserves | Core Reserves |
|---|---|---|
|
|
|
Annual Comprehensive Financial Report (ACFR)
The Debt & Investment Division coordinates with the General Accounting Division within the Finance Department to complete the City’s annual ACFR, which is the required financial report that is compiled by the internal staff and audited by an external accounting firm, annually. The Debt & Investment Division is responsible for preparing, compiling, and reviewing all operating cash, cash equivalent, and operating investments related statements, schedules, and footnotes included in the ACFR.
The Debt & Investment Division is responsible for the following footnotes:
- Cash & Cash Equivalents and Investments
- Custodial Credit Risk (deposits)
- Interest Rate Risk
- Investment Maturities & Investment Duration
- Concentration of Credit Risk
- Credit Quality
- Fair Value Measurement and Application
