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Home My WebLink About4.11 InvestRpt 3rdQtr01-02CZTY CLERK File #320-30 AGENDA STATEMENT CTTY COUNCTL MEETZNG DATE: (April 1.6, 2002) SUBJECT: City Treasurer's Investment Report For 3rd Quarter 2001/2002 Report Prepared by Carole A. Perry, Administrative Services Director and Fred Marsh, Finance Manager ATTACHMENTS: -RECOMMENDATION: Quarterly Investment Report (March 31, 2002) Section I - Section II - ~Receive Report Primary Investment Portfolio Listing of Supplemental Monies Under City Possession and/or Control DESCRIPTION: The attached Investment Report details the City's investments as of March 31, 2002, 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 third quarter of Fiscal Year 2001/2002 are discussed in the staff report below. INVESTMENT ACTIVITY IN THIRD QUARTER FISCAL YEAR 2001/2002 During the Third 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 THIRD QUARTER FISCAL YEAR 2001/2002 TYPE AMOUNT MATURITY YIELD Matured Federal Securities FHLB $2,000,000 2/1/02 6.711% Called Federal Securities FHLB $3,000,000 2/28/2005 5.000% FHLB $3,000,000 8/15/2005 5.300% 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: COPIES TO: G:XInvestments~Iarch 2002Vtgenda staff report3.doc ITEM NO. INVESTMENTS PURCHASED THIRD QUARTER FISCAL YEAR 2001/2002 CALL TYPE AMOUNT MATURITY YIELD DATE FEDERAL SECURITIES FHLB $3,900,000 10/8/2004 4.300% 7/8/02 FHLB $3,000,000 12/15/2004 4.240% N/A FHLMC $500,000 1/3/2007 5.200% N/A FFCB $421,000 1/23/2007 5.200% N/A FHLB $4,000,000 2/15/2007 5.140% N/A 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 that 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 50% 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 March 31, 2002. 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 $64,717 in dividends from this investment, resulting in an annualized yield of 5.378%. The market value of this investment fluctuates on a daily basis and as of March 31, 2002 was equal to 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 below shows the total investment balance as of March 31, 2002 by source. Comparison information is also shown for the previous quarter. Note that 48% 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 3/31/2002 % of Balance Total $37,777,522 42% $1,611,319 2% $544,122 1% $42,476,022 48% $5,981,281 '7% $88,390,266 100% Prior 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% CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT The total amount shown as invested in the Primary Investment Portfolio is $1,700,742 less than the amount shown at December 31, 2001, primarily due to payments made to contractors for construction of the City's new library. Overall, the combined rate for the total portfolio decreased from 4.155% at December 31, 2001 to 4.124% at March 31, 2002. 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 2.97% as of March 31, 2002, which was lower than the 3.52% rate recorded for the quarter ending December 31, 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 3rd QUARTER FY 2001-2002 SECTION 1 PRIMARY INVESTMENT PORTFOLIO CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN March 31, 2002 INVESTMENT 1ST CALL DATE COUPON MATURITY VALUE AT INTEREST DATE MATURITY RATE YIELD BOOK VALUE MARKET VALUE FEDERAL SECURITIES FHLB FHLB FHLB FHLB FHLB FNMA FHLB 7/8/02 FHLB FHLB FHLB 6/21/02 FHLB 7/11/02 FHLB 7/18/03 FHLB FHLB 1/17/03 FFCB 12/20/02 FHLMC FFCB FHLB TOTAL FEDERAL SECURITIES 5/1/2002 1 2,000,000 6.750% 6.920% 8/15/2002 1 2,000,000 6.000% 6.200% 11/6/2002 1 1,000,000 5.940% 6.780% 2/14/2003 1 1,000,000 7.000% 7.010% 9/2/2003 2 1,000,000 5.627% 6.910% 11/14/2003 2 1,000,000 4.750% 6.920% 10/8/2004 3 3,900,000 4.300% 4.300% 10/15/2004 3 3,000,000 4.125% 4.125% 12/15/2004 3 3,000,000 3.875% 4.240% 12/21/2004 3 3,000,000 4.290% 4.290% 1/11/2005 3 3,000,000 5.100% 5.100% 7/18/2005 4 3,000,000 5.220% 5.220% 12/27/2005 4 2,000,000 6.525% 6.525% 1/17/2006 4 5,000,000 5.420% 5.420% 12/20/2006 5 5,000,000 5.340°/0 5.420% 1/3/2007 5 500,000 6.525% 5.200% 1/23/2007 5 421,000 4.600% 5.200°/0 2/15/2007 5 4,000,000 4.875% 5.140% CERTIFICATES OF DEPOSIT - FDIC INSURED United California Bank 12/9/2002 TOTAL CERTIFICATES OF DEPOSIT MUTUAL FUNDS Nations Bank Government Reserves Capital Fund Union Bank U.S. Govt Securities Morgan Stanley Dean Witter U.S. Govt Securities TOTAL MUTUAL FUNDS POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAW) TOTAL INVESTED PORTFOLIO $43,821,000 5.298% 1 99,000 6.000% 6.000% 2,045,000 2,041,560 1,020,940 1,038,440 1,016,250 999,530 3,900,000 3,000,000 2,971,740 3,000,000 3,000,000 3,000,000 2,034,380 5,000,000 5,000,0O0 527,730 410,273 3,954,320 $43,960,163 99,000 2,007,180 2,025,000 1,020,940 1,036,090 1,028,750 1,017,500 3,893,916 2,982,180 2,963,430 2,985,000 3,021,570 3,031,890 2,021,880 5,046,9OO 4,981,250 526,875 407,776 3,919,360 $43,917,487 99,000 $99,000 6.000% $99,000 $99,000 $1,909,000 $1,909,000 $1,439,011 $1,439,011 (2) $1,594,497 $1,594,497 1,909,000 1.760% 1,439,011 1.610% See Note I 5.378% 2.884% $4,942,508 $4,942,508 2.970o/0 $39,431,271 $39,431,271 4.124% $88,432,942 $88,390~66 $39,431,271 NOTES: (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. Maturity Schedule Summary of Portfolio (Assuming None of Securites are called prior to Maturity) Money Market Funds/LAIF (1 day liquidity) Maturing in 1 year or less Maturing in I-2 years Maturing in 2-3 years Maturing in 3-4 years Maturing in 4-5 years TotalPo~folio $44,373,779 51% $6,188,210 7% $2,046,250 2% $15,846,096 18% $10,100,670 11% $9,835,261 11% $88,390,266 100% ITEM 1 CITY OF DUBLIN SUMMARY OF INVESTMENT PORTFOLIO COMPARISON BY INVESTMENT TYPE March 31, 2002 TYPE OF INSTRUMENT Federal Home Loan Bank (FHLB) Federal Farm Credit Bureau (FFCB) Federal National Mortgage Assn (FNMA) Federal Home Loan Mortgage Corporation (FHLMC) 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 36,900,000 37,022,630 36,984,086 41.8% 5,421,000 5,410,273 5,389,026 6.1% 1,000,000 999,530 1,017,500 1.1% 500,000 527,730 526,875 0.6% 43,821,000 43,960,163 43,917,487 O) 49.6% MATURITY YEARS 2.8 4.7 1.6 4.8 3.0 99,000 99,000 99,000 0.1% 0.7 1,594,497 1,594,497 1,594,497 a) 1.8% 1,439,011 1,439,011 1,439,011 1.6% 1,909,000 1,909,000 1,909,000 2.2% LAIF 39,431,271 39,431,271 39,431,271 44.7% GRAND TOTAL $88,293,779 $88,432,942 $88,390,266 100.0% 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 DUBL1N QUARTERLY INVESTMENT REPORT 3rd 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 March 31, 2002 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 3/31/2002 $400.00 $2OO.OO $4,600.00 $5,200.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With California Government Code Balance 3/31/2002 $78,383 Annualized Rate of Interest .5% NATIONS BANK U.S. Treasury Reserves Adviser Account (Sweep Account connected to Bank of America Deposits listed above) $1,074,089 1.6107% Cai Fed- Regular Savings Account: FDIC Insured $573 .76% Grand Total Amount Cash Balances: $1,153,045.00 SPECIAL FUNDS HELD BY TRUSTEES CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN FOR THE QUARTER ENDING MARCH 31, 2002 MUTUAL FUNDS Dublin Blvd Assessment District First American Govt Obligation Fund COUPON MATURITY VALUE AT INTEREST DATE MATURITY RATE YIELD BOOK VALUE See Note 1 1.50% $169,710 $169,710 NOTES: (1) A Mutual Fund does not have a stated maturity date and shares can be sold at any time.