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Home My WebLink About4.06 TreasurersInvestRepor CITY CLERK File # I1 11 01-1 101 AGENDA STATEMENT CITY COUNCIL MEETING DATE: February 3, 2004 SUBJECT: City Treasurer's Investment Report for 2nd Quarter 2003-2004 Report Prepared by Carole A. Perry, Administrative Services Director and Fred W. Marsh, Finance Manager ATTACHMENTS: Quarterly Investment Report (December 31, 2003) Section I - Primary Investment Portfolio Section II - Listing of Supplemental Monies Under City Possession and/or Control RECOMMENDATION: ~Receive Report DESCRIPTION: The attached Investment Report details the City's investments as of December 31, 2003, 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 2003- 2004 are discussed in the staff report below. INVESTMENT ACTIVITY DURING THE QUARTER During the second quarter four investments 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 DURING THE SECOND QUARTER FY 2003-2004 Type Value at Maturity Maturity Date Current Yield Call Date FNMA $1,000,000 11/14/2003 4.730% N/A FH LB $5,000,000 9/18/2006 3.240% 12/18/03 FH LMC $3,000,000 9/19/2007 3.970% 12/18/03 FHLB $1,000,000 9/18/2008 4.410% 12/18/03 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 used to purchase two new securities during the period, as summarized in the table below: INVESTMENTS PURCHASED DURING THE SECOND QUARTER FY 2003-2004 Type Value at Maturity Maturity Date Current Yield Call Date FNMA $3,520,000 12/29/2006 2.980% 7/2/04 FHLB $2,180,000 12/3/2008 4.010% 6/29/04 FHLB* $,4,480,000t 11012007 3.00%1 61312004I COPIES TO: ~ Document in quarterly investment report worksheets ITEM NO. The highlighted $4,480,000 investment listed on Page One is included to provide a more insightful overview. Since this investment vehicle did not settle until early January, it is not part of the formal report, as of December 31, 2003; but, it does provide Council with more timely investment data, 'reflecting the fact that of the $10,000,000 matured/called during the quarter, all has been reinvested for the City. In the most recent quarter the' average maturity for the Federal Security portion of the portfolio is estimated at 3.3 years. 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 fimds in more liquid investments, which are deemed sufficient to meet cash flow needs. DETAILED LISTING OF PRIMARY PORTFOLIO Government and Agency Securities represent 43% of the Primary Portfolio. A detailed listing of each security is provided in Section 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, 2003. 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 20.03-2004 Fiscal Year the City has received to date $29,805 in dividends from this investment, resulting in an annualized yield of 3.738%. 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 December 31, 2003 by source. Comparison information is also shown for the previous quarter. Note that approximately 35% of the investment balance represents 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 Current Quarter Prior Quarter 12/31/2003 % of 9/30/2003 % of Balance Total Balance Total General Fund $49,429,633 52.5% $49,265,074 52% Restricted - Special Revenue Funds $3,844,672 4.1% $3,535,553 4% (I.e. Gas Tax, Special Taxes) Restricted - Assessment District Funds $680,385 0.7% $382,796 (i.e. Landscape Maint & Debt Service) Restricted - Impact Fees $32,654,665 34.7% $33,670,375 36% Internal Service / Replacement Funds $7,533,327 8.0% $7,246,977 8% TOTAL $94,142,682 . 100.0% $94,100,775 100% CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT The total amount shown as invested in the Primary Investment portfolio is $41,907 more than the amount shown at September 30, 2003. Overall, the combined rate for the total portfolio decreased from 2.472% at September 30, 2003 to 2.276% at December 31, 2003. The decrease was attributable to the maturing and calling of several federal securities noted above and decrease in the Local Agency Investment Fund (LAIF) rate noted below. The quarterly average for the City's LAIF investmeiat was 1.56% as of December 31, 2003, which was lower than the 1.64% rate recorded for the quarter ending September 30, 2003. 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 inyestments are in compliance with the City's investment policy and all applicable laws and regulations. CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 2nd QUARTER FY 2003-2004 SECTION 1 PRIMARY INVESTMENT PORTFOLIO CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS ~ tS)_,~L0 INCLUDING RATE OF RETURN December 31, 2003 COUPON BOOK AND MATURITY VALUE AT INTEREST CURRENT MARKET INVESTMENT 1ST CALL DATE DATE MATURITY RATE YIELD VALUE FEDERAL SECURITIES FHLB 12/15/2004 1 3,000,000 3.875% 3.780% 3,072,180 FHLB 8/26/04 8/26/2005 2 2,000,000 2.325% 2.310% 2,014,660 FHLB 9/30/03 6/30/2006 3 5,000,000 2.250% 2.260% 4,985,950 FNMA 7/2/04 12/29/2006 3 3,520,000 3.000% 2.980% 3,543,091 FHLMC 1/3/2007 4 500,000 6.525% ~.870% 555,470 FFCB 1/23/2007 4 421,000 4.600% 4.360% 443,759 FHLB 2/15/2007 4 4,000,000 4.875% 4.590% 4,248,760 FHLB 3/26/04 3/26/2007 4 5,000,000 3.465% 3.450% 5,025,000 FHLMC 9/10/04 9/10/2007 4 5,000,000 3.650% 3.590% 5,079,250 FHLB 12/24/03 6/24/2008 5 9,000,000 3.100% 3.140% 8,873,460 FHLB 9/30/03 6/30/2008 5 1,000,000 3.200% 3.230% 989,690 FHLB 6/29/04 12/3/2008 5 2,180,000 4.440% 4.010% 2,176,599 TOTAL FEDERAL SECURITIES $40,621,000 3.356% $41,007,869 MUTUAL FUNDS Nations Bank Government Reserves $6,583,000 0.890% $6,583,000 Capital Fund Union Bank U.S. Govt Securities $4,896,410 0.560% $4,896,410 Morgan Stanley Dean Witter U.S. Govt Securities See Note 1 3.738% (2) $1,655,479 TOTAL MUTUAL FUNDS 1.114% $13,134,889 POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAIF) $39,999,924 1.560% $39,999,924 TOTAL INVESTED PORTFOLIO 2.276% $94,142,682 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. (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) $53,134,813 57% Maturing in 1 year or less $3,072,180 3% Maturing in 1-2 years $2,014,660 2% Maturing in 2-3 years $8,529,041 9% Maturing in 3-4 years $15,352,239 ' 16% Maturing in 4-5 years $12,039,749 13% Total Portfolio $94,142,682 100% ,23,2oo4 :37^M ITEM I CITY OF DUBLIN SUMMARY OF INVESTMENT PORTFOLIO COMPARISON BY INVESTMENT TYPE December 31, 2003 BOOK AND AVERAGE MARKET % OF MATURITY TYPE OF INSTRUMENT VALUE PORTFOLIO YEARS Federal Home Loan Bank (FHLB) 31,386,299 33.3% 3.3 Federal Farm Credit Bureau (FFCB) 443,759 0.4% 3.1 Federal National Mortgage Assn (FNMA) 3,543,091 3.8% 3.0 Federal Home Loan Mortgage Corporation (FHLMC) 5,634,720 5.9% 3.6 SUB -TOTAL GOVT/AGENCY 41,007,869 (3) 43.4% 3.3 Mutual Funds Morgan Stanley Dean Witter U.S. Govt Securities 1,655,479 (2) 1.7% N/A Union Bank U.S. Govt Securities 4,896,410 5.2% N/A Nations Bank Government Reserves Capital Fund 6,583,000 7.0% N/A LAIF 39,999,924 42.7% N/A GRAND TOTAL $94,142,682 100.0% NOTES: (1) The City intends to hold the investments until maturity or until market values equal or exceed their face value. (2) As a mutual Fund shares can typically'be liquidated at anytime. The weighted average maturity stated in this ch~ by Dean Witter based upon all investment instruments owned by the U.S. Government Securities Mutual Fund. ITEM 2 CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 2nd QUARTER FY 2003-2004 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, 2003 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 fimds are not subject to a specified maturity and the par value would be equivalent to the amount stated. Miscellaneous Cash Balance Non-Categorized - Cash 12/31/2003 Cash Registers/Petty Cash - City $700.00 Petty Cash - Shannon Center $200.00 Subtotal $900.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS Balance 12/31/2003 BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With $780 California Government Code NATIONS BANK U.S. Treasury Reserves Adviser $4,719,286 Account (Sweep Account connected to Bank of America Deposits listed above) Cai Fed- Regular Savings Account: FDIC Insured $3,588 Grand Total Amount Cash Balances: $4,723,654