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Home My WebLink About4.10 Investment Report 1st Qtr 06-07 CITY CLERK File # D5Iz:J[Q-[3][Q AGENDA STATEMENT CITY COUNCIL MEETING DATE: October 17,2006 SUBJECT: City Treasurer's Investment Report for 1st Quarter 2006-2007 Report Prepared by Paul S. Rankin, Administrative Services Director and Fred Marsh, Finance Manager ATTACHMENTS: ~ RECOMMENDA TION:~ Receive Report DESCRIPTION: The attached Investment Report details the City's investments as of September 30, 2006, in accordance with the Local Agency Investment Guidelines established by the State Treasurer. Section I of the Report focuses on the primary 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 first quarter of Fiscal Year 2006-2007 are discussed in the staff report below. Quarterly Investment Report (September 30, 2006) Section I - Primary Investment Portfolio Section II - Listing of Supplemental Monies Under City Possession and/or Control INVESTMENT ACTIVITY DURING THE QUARTER During the first quarter, the Morgan Stanley Dean Witter U.S. Government Securities Mutual Fund was liquidated for a total of $1,594,296, at a gain of $8,892. The funds were reinvested in securities which have a stated maturity date. The Dean Witter Fund was a mutual fund which had a fluctuating share price. Although since 1994 it had provided a return of approximately 4.62%, its performance was only slightly better than LAIF for the same period, which provided a yield of 4.41 %. During the most recent year the Morgan Stanley investment underperformed LAIF. In addition, one investment matured during the quarter, as summarized in the table below INVESTMENTS MATURED DURING THE FIRST QUARTER Type Value at Maturity Maturity Date Current Yield FHLB $5,000,000 9/15/2006 3.625% Staff purchased four new securities during the period, as noted below: INVESTMENTS PURCHASED DURING THE FIRST QUARTER Type Value at Maturity Maturity Date Current Yield Call Date FHLB $1,000,000 8/16/2007 5.440% 11/16/06 FHLB $3,000,000 12/22/2008 5.630% 9/22/06 FHLB $2,000,000 6/15/2009 5.380% 6/15/07 FNMA $2,000,000 4/26/2011 5.660% 4/26/07 COPIES TO: ITEMNO.~ Document in quarterly investment report worksheets I tstJ .3 v In the most recent quarter the average maturity for the Federal Security portion of the portfolio is estimated at 1.3 years. This is a decrease from the 1.4 average maturity reported as of June 30, 2006. 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 76% of the Primary Portfolio. A detailed listing of each security is provided in Section I. 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. COMPOSITION OF PORTFOLIO - SOURCE OF FUNDS To provide an overview of the portfolio, the table below shows the total investment balance by source of funds, for the first quarter of Fiscal Year 2006-2007 and as compared to one year ago. The distribution between the types of funds remains relatively consistent with the General Fund representing approximately half of the portfolio. Although the total portfolio has increased from one year ago by approximately $7.2 million, the total amount shown as invested in the Primary Investment Portfolio is approximately $127,000 more than the amount shown at June 30, 2006. General Fund Restricted - Special $3,974,837 3.6% $5,179,190 5.0% Revenue (i.e. Gas Tax) Restricted Assessment $448,406 0.4% $647,873 0.6% Districts Restricted - Impact Fees; Housing In Lieu $41,173,763 37.5% $34,692,803 33.8% Fees Internal Service / $10,451,307 9.5% $8,816,061 8.6% Replacement Funds Total Invested $109,927,798 $102,760,899 Calculated Quarterly I 4.204% 3.361 % Return CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT Overall, the combined rate for the total portfolio increased from 4.061 % at June 30, 2006 to 4.204% at September 30, 2006. The general economic climate has supported increasing interest rates. The 1st quarter increase was attributable primarily to an increase in the rate of return on the City's investments in Federal Securities, LAIF, the Union Bank US Government Securities Money Market account and the Bank of America Columbia Funds Government Reserves Money Market Account. ~Ub3 The quarterly average for the City's LAIF investment was 4.93% as of September 30, 2006, which was higher than the 4.53% rate recorded for the quarter ending June 30,2006. One year ago the LAIF rate was at 3.19% 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. RECOMMENDATION: Staff recommends that Council receive this report. '3 "b .3 I o+~ CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 1st QUARTER FY 2006-2007 SECTION I PRIMARY INVESTMENT PORTFOLIO , I Lj-./o /0/17/0h CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS )0!-0 INCLUDING RATE OF RETURN September 30, 2006 COUPON MATURITY VALUE AT INTEREST CURRENT MARKET INVESTMENT 1ST CALL DATE DATE MATURITY RATE YIELD VALUE FEDERAL SECURITIES FHLB 10/19/05 10/19/2006 1 3,000,000 3.270% 3.290% 2,997,180 FHLB 4/20/05 10/20/2006 1 5,000,000 3.000% 3.020% 4,993,750 FHLB 6/14/05 12/14/2006 1 3,000,000 3.350% 3.380% 2,987,820 FNMA 7/2/04 12/29/2006 1 3,520,000 3.000% 3.040% 3,500,218 FHLB 6/3/04 1/2/2007 1 4,480,000 3.000% 3.040% 4,454,822 FHLMC 1/3/2007 1 500,000 6.525% 6.490% 501,405 FHLMC 3/28/06 1/22/2007 1 4,275,000 4.750% 4.770% 4,267,733 FFCB 1/23/2007 1 421,000 4.600% 4.620% 420,078 FHLB 2/15/2007 1 4,000,000 4.875% 4.890% 3,993,760 FHLB 2/28/2007 1 2,000,000 4.875% 5.020% 1,996,260 FHLB 10/27/04 4/27/2007 1 3,000,000 3.150% 3.210% 2,964,390 FNMA 8/11/04 5/11/2007 1 3,000,000 3.250% 3.310% 2,964,390 FHLB 8/18/04 5/18/2007 1 2,000,000 3.000% 3.070% 1,972,500 FHLB 11/16/06 8/16/2007 1 1,000,000 5.440% 5.440% 1,000,310 FHLB 12/28/06 9/28/2007 1 3,000,000 5.420% 5.430% 3,000,930 FHLB 2/11/05 2/11/2008 2 2,500,000 3.420% 3.530% 2,447,650 FHLMC 4/27/05 4/28/2008 2 5,000,000 3.500% 3.620% 4,888,050 FHLB 12/24/03 6/24/2008 2 9,000,000 3.100% 3.240% 8,718,750 FHLB 9/30/03 6/30/2008 2 1,000,000 3.200% 3.340% 970,000 FHLB 2/28/07 8/28/2008 2 1,000,000 5.500% 5.490% 1,000,940 FHLMC 10/7/04 10/7/2008 3 5,000,000 3.300% 3.460% 4,840,650 FHLB 6/29/04 12/3/2008 3 2,180,000 4.000% 4.130% 2,135,724 FHLB 9/22/06 12/22/2008 3 3,000,000 5.610% 5.630% 3,000,000 FNMA 7/7/04 4/7/2009 3 5,000,000 3.550% 3.730% 4,837,500 FHLB 6/15/07 6/15/2009 3 2,000,000 5.375% 5.380% 1,998,760 FHLB 4/19/05 10/19/2009 4 5,000,000 4.250% 4.410% 4,889,050 FNMA 4/26/07 4/26/2011 5 2,000,000 5.670% 5.660% 2,003,760 TOTAL FEDERAL SECURITIES $84,876,000 3.923% $83,746,380 MUTUAL FUNDS Union Bank U.S. Govt Securities $9,029,181 5.260% $9,029,181 Bank of America Columbia Funds Government Reserves $10,000,187 5.120% $10,000,187 TOTAL MUTUAL FUNDS 5.186% $19,029,368 POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAIF) $7,138,273 4.930% $7,152,050 TOTAL INVESTED PORTFOLIO 4.204% $109,927,798 Year to Date Change in Market Value on Investments $707,469 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 1-2 years Maturing in 2-3 years Maturing in 3-4 years Maturing in 4-5 years $26,181,418 25% $42,015,546 38% $18,025,390 16% $16,812,634 15% $4,889,050 4% $2,003,760 2% $109,927,798 100% Total Portfolio 10/3/20063:29 PM ITEM 1 /O/-I :./ ,~ CITY OF DUBLIN SUMMARY OF INVESTMENT PORTFOLIO COMPARISON BY INVESTMENT TYPE September 30, 2006 AVERAGE MARKET %OF MATURITY VALUE PORTFOLIO YEARS $55,522,596 50.6% 1.2 420,078 0.4% 0.3 13,305,868 12.2% 1.8 14,497,838 13.3% 1.3 83,746,380 (I) 76.4% 1.3 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 Mutual Funds Union Bank U.S. Govt Securities 9,029,181 8.1% N/A Bank of America Columbia Government Reserves Capital Fund 10,000,187 9.0% N/A LAIF 7,152,050 6.5% N/A GRAND TOTAL $109,927,798 100.0% NOTES: (1) The City intends to hold the investments until maturity or until market values equal or exceed their face value. 10/3/2006 3:01 PM ITEM 2 !.fofb CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 1st QUARTER FY 2006-2007 SECTION II 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 September 30, 2006 5o-fb 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-Cate2orized - Cash Cash Registers/Petty Cash - City Subtotal Balance 9/30/2006 $1,000.00 $1,000.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS Bank Balance 9/30/2006 General Led2er Balance 9/30/2006 BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With California Government Code $80,750 $100,989 NATIONS BANK U.S. Treasury Reserves Adviser Account (Sweep Account connected to Bank of America Deposits listed above) $508,942 $508,942 Citibank- Regular Savings Account: FDIC Insured $615 $615 Grand Total Amount Cash Balances: $590.307 $610.546 SPECIAL FUNDS HELD BY TRUSTEES CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN For the Quarter Ending September 30, 2006 MATURITY DATE YIELD BOOK VALUE MUTUAL FUNDS Dublin Blvd Assessment District First American Govt Obligation Fund See Note 1 4.70% $166,577 NOTES: (1) A Mutual Fund does not have a stated maturity date and shares can be sold at any time. MARKET VALUE $166,577 0()f6