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Home My WebLink About4.13 InvestRpt2ndQtr01-02CITY CLERK File # 320-30 AGENDA STATEMENT CITY COUNCIL MEETING DATE: (February 5, 2002) SUBJECT: City Treasurer's Investment Report For 2nd Quarter 2001/2002 Report Prepared by Carole A. Perry, Administrative Services Director and Fred Marsh, Finance Manager ATTACHMENTS: RECOMMENDATION: Quarterly Investment Report (December 31, 2001) Section I - Primary Investment Portfolio Section II - Listing of Supplemental Monies Under City Possession and/or Control Receive Report DESCRIPTION: The attached Investment Report details the City's investments as of December 31, 2001, in accordance with the Local Agency Investment Guidelines established by the State Treasurer. Section I of the Report focuses on the principal investment portfolio. Section II details funds held by Trustees and miscellaneous operating accounts. The focus of the discussion in this report will be upon activity in the Primary Investment Portfolio. Changes in the investment portfolio and investment activity for the second quarter of Fiscal Year 2001/2002 are discussed in the staff report below. INVESTMENT ACTIVITY IN SECOND QUARTER FISCAL YEAR 2001/2002 During the Second Quarter four securities matured or were called due to the decline in interest rates that occurred during the quarter, as summarized in the table below: INVESTMENTS MATURED OR CALLED SECOND QUARTER FISCAL YEAR 2001/2002 TYPE AMOUNT MATURITY YIELD Matured Federal Securities FHLB $1,000,000 10/3/01 6.575 % FHLB $2,000,000 12/10/01 5.730% Called Federal Securities FHLB $1,000,000 1/13/04 6.010% FHLB $5,000,000 9/28/05 5.270% The City received the full face amount of the investments that were called plus any accrued interest. The proceeds from these investments, along with other available funds, were temporarily placed in the Nations and Union Bank Government Securities money market accounts. The proceeds from these investments, along with other available funds, were used to purchase new securities during the period, as summarized in the table on the following page: G:\Investments~Dec 2001~4,genda staff report3.doc COPIES TO: ITEM NO. INVESTMENTS PURCHASED SECOND QUARTER FISCAL YEAR 2001/2002 CALL TYPE AMOUNT MATURITY YIELD DATE FEDERAL SECURITIES FHLB $3,000,000 10/15/04 4.125% N/A FHLB $3,000,000 12/21/04 4.290% 6/21/02 FFCB $5,000,000 12/20/06 5.340% 12/20/02 In addition Staff placed an order in January 2002 to transfer $10 million of funds in the City's money market accounts to LAIF, which increased its investment limit to $40 million as of January 1, 2002. In the most recent quarter the average maturity for the Federal Security portion of the portfolio increased to 3.0 years, due to the purchase of the securities noted above. It is important to note that this relates solely to the portion of the portfolio which has investments with a stated term. The City maintains adequate funds in more liquid investments, which are deemed sufficient to meet cash flow needs. DETAILED LISTING OF PRIMARY PORTFOLIO Government and Agency Securities represent 45% of the Primary Portfolio. A detailed listing of each security is provided in Item 1. The market value of Federal Securities can fluctuate daily and values have been provided as reported by Union Bank of California as of December 31, 2001. The City portfolio assumes that the investments will be held to maturity and there is not an active attempt made to trade existing securities. The City has staggered the maturity dates within the portfolio and it is not anticipated that these funds will need to be called by the City prior to maturity. The Morgan Stanley Dean Witter US Government Securities Mutual Fund Investment represents 2% of the City's total portfolio. During the 2001-2002 Fiscal Year the City has received to date $43,717 in dividends from this investment, resulting in an annualized yield of 5.483%. The market value of this investment fluctuates on a daily basis and as of December 31, 2001 was $19,730 more than the recorded 6/30/2001 book value. Since October 1999, the mutual fund may be redeemed without sales charges. COMPOSITION OF PORTFOLIO - SOURCE OF FUNDS To provide an overview of the portfolio, the table shown on the following page shows the total investment balance as of December 31, 2001 by source. Comparison information 'is also shown for the previous quarter. Note that 46% of the investment balance represented restricted Impact Fee Funds. It is important to keep in mind that this type of report is merely a snapshot on a particular day. Revenues as well as expenditures are not processed in equal monthly installments. PORTFOLIO COMPOSITION BY SOURCE OF FUNDS General Fund Restricted - Special Revenue Funds (I.e. Gas Tax, Special Taxes) Restricted - Assessment District Funds (i.e. Landscape Maint & Debt Service) Restricted - Impact Fees Internal Service / Replacement Funds TOTAL Current Quarter 12/31/2001 % of Balance Total $39,936,419 44% $2,272,281 3% $500,972 1% $41,600,196 46% $5,781,140 6% $90,091,008 100% Prior Quarter 9/30/2001 % of Balance Total $37,740,435 49% $2,443,910 3% $409,845 1% $30,137,872 40% $5,529,268 7% $76,261,330 100% CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT The total amount shown as invested in the Primary Investment Portfolio is $13,829,678 more than the amount shown at September 30, 2001, primarily due to advances received from developers for construction of improvements to fi'eeway interchanges for new deVelopment projects. Overall, the combined rate for the total portfolio decreased from 5.065% at September 30, 2001 to 4.155% at December 31, 2001. The decrease was attributable to the calling of the federal securities noted above, a decrease in the rate of return on the City's LAIF investments operated by the State Treasurer, as well as a decline in the rate of return on money market funds during the quarter. The quarterly average for the City's LAIF investment was 3.52% as of December 31, 2001, which was lower than the 4.49% rate recorded for the quarter ending September 30, 2001. LAIF is a liquid investment, and the current LAIF rate remains favorable compared to rates offered on investments, which have less flexibility. The schedule of investments, including the dates of maturity, contains adequate cash flow liquidity to meet anticipated expenditures over the next six months. The investments and the schedule of investments are in compliance with the City's investment policy and all applicable laws and regulations CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 2nd QUARTER FY 2001-2002 SECTION 1 PRIMARY INVESTMENT PORTFOLIO ¢/.5 CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN December 31, 2001 INVESTMENT 1ST CALL DATE COUPON MATURITY VALUE AT INTEREST BOOK DATE MATURITY RATE YIELD VALUE FEDERAL SECURITIES FHLB FHLB FHLB FHLB FHLB FHLB FNMA FHLB FHLB 6/21/02 FHLB 7/11/02 FHLB 2/28/02 FHLB 7/18/03 FHLB 2/15/02 FHLB FHLB 1/17/03 FFCB 12/20/02 TOTAL FEDERAL SECURITIES 2/1/2002 2,000,000 6.750% 6.711% 2,032,500 5/1/2002 2,000,000 6.750% 6.920% 2,045,000 8/15/2002 2,000,000 6.000% 6.200% 2,041,560 11/6/2002 1,000,000 5.940% 6.780% 1,020,940 2/14/2003 1,000,000 7.000% 7.010% 1,038,440 9/2/2003 1,000,000 5.627% 6.910% 1,016,250 11/14/2003 1,000,000 4.750% 6.920% 999,530 10/15/2004 3,000,000 4.125% 4.125% 3,000,000 12/21/2004 3,000,000 4.290% 4.290% 3,000,000 1/11/2005 3,000,000 5.100% 5.100% 3,000,000 2/28/2005 3,000,000 5.000% 5.000% 3,000,000 7/18/2005 3,000,000 5.220% 5.220% 3,000,000 8/15/2005 3,000,000 5.300% 5.300% 3,000,000 12/27/2005 2,000,000 6.525% 6.525% 2,034,380 1/17/2006 5,000,000 5.420% 5.420% 5,000,000 12/20/2006 5,000,000 5.340% 5.420% 5,000,000 $40,000,000 5.541% $40,228,600 CERTIFICATES OF DEPOSIT - FDIC INSURED United California Bank 12/9/2002 TOTAL CERTIFICATES OF DEPOSIT 99,000 6.000% 6.000% 99,000 MUTUAL FUNDS Nations Bank Government Reserves Capital Fund Union Bank U.S. Govt Securities Morgan Stanley Dean Witter U.S. Govt Securities TOTAL MIJTUAL FUNDS 2,008,440 2,029,680 2,043,440 1,031,250 1,049,840 1,041,880 1,028,590 3,001,890 3,019,680 3,045,930 3,014,070 3,075,930 3,009,840 2,042,500 5,118,750 5,064,050. $40,625,760 POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAW) TOTAL INVESTED PORTFOLIO NOTES:' 99,000 $99,000 6.000% $99,000 $99,000 15,438,000 2.010% $15,438,000 2,314,367 1.750% $2,314,367 See Note 1 5.483% (2) $1,594,497 2.265% $19,346,864 $29,999,654 3.520% $29,999,654 4.155% $89,674,118 (1) A Mutual Fund investment does not have a stated date of maturity and shares may be sold at any time. The share price at the time of a sale may be either higher or lower than the original cost. The book value reflects the market value on June 30, 2001, as required by current governmental accounting roles. (2) Interest Rate shown is based on dividends received this fiscal year to date, which are annualized and then divided by the original investment. $15,438,000 $2,314,367 $1,614,227 $19,366,594 $29,999,654 $90,091,008 Maturity Schedule Summary of Portfolio (Assuming None of Securites are called prior to Maturity) Money Market Funds/LAW (1 day liquidity) Maturing in 1 year or less Maturing in 1-2 years Maturing in 2-3 years Maturing in 3-4 years Maturing in 4-5 years Total Portfolio $49,366,248 55% $7,211,810 8% $3,120,310 3% $6,021,570 7% $14,188,270 16% $10,182,800 11% $90,091,008 100% ITEM 1 CITY OF DUBLIN SUMMARY OF INVESTMENT PORTFOLIO COMPARISON BY INVESTMENT TYPE December 31, 2001 TYPE OF INSTRUMENT Federal Home Loan Bank (FHLB) Federal Farm Credit Bureau (FFCB) Federal National Mortgage Assn (FNMA) SUB -TOTAL GOVT/AGENCY Certificates of Deposit - FDiC Insured Mutual Funds Morgan Stanley Dean Witter U.S. Govt Securities Union Bank U.S. Govt, Securities Nations Bank Government Reserves Capital Fund MARKET % OF FACE VALUE BOOK VALUE VALUE PORTFOLIO 34,000,000 34,229,070 34,533,120 38.0% 5,000,000 5,000,000 5,064,050 5.6% 1,000,000 999,530 1,028,590 1.1% 40,000,000 40,228,600 40,625,760 0) 44.7% MATURITY YEARS 2.7 5.0 1.9 3.0 99,000 99,000 99,000 0.1% 0.9 1,594,497 1,594,497 1,614,227 a) 1.8% 2,314,367 2,314,367 2,314,367 2.6% 15,438,000 15,438,000 15,438,000 173% LAIF 29,999,654 29,999,654 29,999,654 33.5% GRAND TOTAL $89,445,518 $89,674,118 $90,091,008 100.0% NOTES: (1) The City intends to hold the investments until maturity or until market values equal or exceed their face value. (2) Book Value is shown as the value recorded in the General Ledger based on the market value at 6/30/2001. (3) As a mutual Fund shares can typically be liquidated at any time. The weighted average maturity stated in this chart was calculated by Dean Witter based upon all investment instruments owned by the U.S. Government Securities Mutual Fund. 5.0 O) N/A N/A N/A ITEM 2 CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 2nd QUARTER FY 2001-2002 SECTION 11 LISTING OF SUPPLEMENTAL MONIES UNDER CITY POSSESSION AND/OR CONTROL · OPERATING FUNDS · SPECIAL FUNDS HELD BY TRUSTEES City of Dublin Report of Operating Funds On Hand As of December 31, 2001 In accordance with the California Government Code, the City Treasurer must disclose on a quarterly basis all monies in its possession. Monies considered invested, and not immediately necessary for current operations, are presented in a separate listing as part of the quarterly rePort. In the case of Operating Funds in bank accounts, the amount presented relates to the balance reported by the Financial Institution. IT IS IMPORTANT TO NOTE THAT THIS AMOUNT MAY REFLECT FUNDS REQUIRED TO COVER PAYMENTS ALREADY ISSUED AND CHECKS WHICH HAVE NOT CLEARED AS OF THE LAST DAY OF THE QUARTER. Therefore, these balances will fluctuate throughout the year. These funds are not subject to a specified maturity and the par value would be equivalent to the amount stated. Miscellaneous Cash Non-Categorized - Cash Petty Cash - City Petty Cash - Shannon Center Cash Register - (5 Locations) Subtotal Balance 12/31/2001 $400.00 $200.00 $500.00 $1~100.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS BANK OF AMERICA- Collateralized Public Money DePosits In Accordance With California Government Code Balance 12/31/2001 $1,535 Annualized Rate of Interest .5% NATIONS BANK U.S. Treasury Reserves Adviser Account (Sweep Account connected to Bank of America Deposits listed above) $2,088,276 1.8108% Cai Fed- Regular Savings Account: FDIC Insured $573 .76% Grand Total Amount Cash Balances: $2,090,384 SPECIAL FUNDS HELD BY TRUSTEES CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN FOR THE QUARTER ENDING DECEMBER 31, 2001 MUTUAL FUNDS Dublin Blvd Assessment District First American Govt Obligation Fund COUPON MATURITY VALUE AT INTEREST DATE MATURITY RATE YIELD BOOK VALUE MARKET VALUE See Note 1 1.60% $169,241 $169,241 NOTES: (1) A Mutual Fund does not have a stated maturity date and shares can be sold at any time.