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Home My WebLink About4.05 Investment Report 2nd Qtr 06-07 CITY CLERK File # D[2J[2J[Q]-[3][O AGENDA STATEMENT CITY COUNCIL MEETING DATE: February 6, 2007 SUBJECT: City Treasurer's Investment Report for 2nd Quarter 2006-2007 Report Prepared by Paul S. Rankin, Administrative Services ~ Director and Lisa Hisatomi, Administrative Analyst II ATTACHMENTS: RECOMMENDATION:~ (~-"') DESCRIPTION: The attached Investment Report details the City's investments as of December 31, 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 second quarter of Fiscal Year 2006-2007 are discussed in the staff report below. Quarterly Investment Report (December 31, 2006) Section I - Primary Investment Portfolio _ n/- Section II - Listing of Supplemental Monies Under City ( t^J'Y Possession and/or Control \ Receive Report INVESTMENT ACTIVITY DURING THE QUARTER During the second quarter four securities totaling $14.52 million matured and three securities totaling $7 million were called for redemption prior to their maturity date. This resulted a total of $21,520,000 in funds being available for reinvestment as summarized in the tables below: INVESTMENTS MATURED DURING THE SECOND Matu . $3,000,000 $5,000,000 $3,000,000 $3,520,000 $14,520,000 10/19/2006 10/20/2006 12/14/2006 12/29/2006 ate 3.27% 3.00% 3.35% 3.00% T e FHLB FHLB FHLB FNMA Total FHLB FHLB FHLB Total INVESTMENTS CALLED DURING THE SECOND QUARTER Value a urity - M ate $1,000,000 08/16/2007 $3,000,000 09/28/2007 $3,000,000 12/22/2008 $7,000,000 11 /16/2006 12/28/2006 12/22/2006 COPIES TO: ITEMNO.~ Document in quarterly investment report worksheets ....:::~> ,-". Staff purchased four new securities during the period, as noted below: INVESTMENTS PURCHASED DURING THE SECOND T FFCB FHLB FHLB FARMER MAC Total $2,000,000 $3,000,000 $3,000,000 $2,000,000 $10,000,000 te 06/26/2008 11/09/2009 11/09/2011 12/14/2011 4.95% 5.35% 5.25% 5.40% II~millJlllDisc 5.0955% 5.3500% 5.2500% 5.4000% N/A 11/09/2007 04/26/2007 12/14/2007 The securities purchased included a Federal Farm Credit Bank (FFCB) investment which is not callable. The other three purchases are callable as noted in the preceding Table. The FFCB investment was also purchased at a slight discount which results in an increased yield. The types of securities purchased were selected to add diversity to the City portfolio. All are AAA rated securities issued by agencies of the Federal government. In December Staff began initial work with PFM Investment Consultants to prepare an evaluation of the City portfolio. The Consultant is expected to issue their report in the next 90 days. Staff will be monitoring cash flow needs with major Capital projects to start in the next six months (Dublin Blvd / Dougherty Road; Shannon Center Replacement; other CIP Projects). With these plans underway, Staff did not reinvest all of the maturing securities in securities. The funds were placed in the Local Agency Investment Fund and other shorter term money market investments. The City maintains adequate funds in more liquid investments, which are deemed sufficient to meet cash flow needs. In the most recent quarter the average maturity for the Federal Security portion of the portfolio is estimated at 1.6 years. This is an increase from the 1.3 average maturity reported as of September 30, 2006. It is important to note that this relates solely to the portion of the portfolio that has investments with a stated term. It also assumes that the securities are not called before their stated maturity date. DETAILED LISTING OF PRIMARY PORTFOLIO Government and Agency Securities represent 62% of the Primary Portfolio. A detailed listing of each security is provided in Section 1. 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 needed for expenditures 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 second 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. The total portfolio has increased from one year ago by approximately $13.3 million, the total amount shown as invested in the Primary Investment Portfolio is approximately $7.1 million more than the amount shown at September 30,2006. ;) :;:., -' PORTFOLIO COMPOSITION BY SOURCE OF FUNDS & QUARTERLY YIELD (Second Qtr 2006/07 Compared To Second Qtr 2005/06) Current Year Prior Year Oct - Dec 2006 Oct - Dec 2005 112/31/2006 I % ot I 112/31/2005 I % ot I . Balance . Total. . Balance .. Total General Fund $58,534,037 50.0% $53,044,803 51.2% Restricted - Special $4,945,688 4.2% $3,095,774 3.0% Revenue (i.e. Gas Tax) Restricted Assessment $547,222 0.5% $342,128 0.3% Districts Restricted - Impact Fees; Housing In Lieu $41,983,790 35.9% $37,796,523 36.4% Fees Internal Service / $11,044,655 9.4% $9,448,553 9.1% Replacement Funds Total Invested $117,055,392 $103,727,781 Calculated Quarterly I I Return 4.46% 3.69% CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT Overall, the combined rate for the total portfolio increased from 4.20% at September 30, 2006 to 4.46% at December 31, 2006. The general economic climate has supported increasing interest rates. However, rates for new investments are relatively flat among different maturities. The second quarter increase was attributable primarily to an increase in the rate of return on the City's investments in LAIF, as well as increased rates for replacement of maturing investments. The quarterly average for the City's LAIF investment was 5.11 % as of December 31, 2006, which was higher than the 4.93% rate recorded for the quarter ending September 30, 2006. One year ago the LAIF rate was at 3.57% 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. ~r' -.,)'b I lO CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 2nd QUARTER FY 2006-2007 SECTION I PRIMARY INVESTMENT PORTFOLIO L\ IS: Z ---- (:;1 CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS :;) Ct) to INCLUDING RATE OF RETURN December 31, 2006 COUPON MATURITY VALUE AT INTEREST CURRENT MARKET INVESTMENT 1ST CALL DATE DATE MATURITY RATE YIELD VALUE . FEDERAL SECURITIES FHLB 6/3/04 1/2/2007 1 4,480,000 3.000% 3.00% 4,480,000 FHLMC 1/3/2007 1 500,000 6.525% 6.52% 500,000 FHLMC 3/28/06 1/22/2007 1 4,275,000 4.750% 4.75% 4,274,102 FFCB 1/23/2007 1 421,000 4.600% 4.60% 420,869 FHLB 2/15/2007 1 4,000,000 4.875% 4.88% 3,998,760 FHLB 2/28/2007 1 2,000,000 5.000% 5.00% 1,998,760 FHLB 10/27/04 4/27/2007 1 3,000,000 3.150% 3.17% 2,981,250 FNMA 8/11/04 5/11/2007 1 3,000,000 3.250% 3.27% 2,980,320 FHLB 8/18/04 5/18/2007 1 2,000,000 3.000% 3.02% 1,984,380 FHLB 2/11/05 2/11/2008 2 2,500,000 3.420% 3.49% 2,453,125 FHLMC 4/27/05 4/28/2008 2 5,000,000 3500% 3.57% 4,896,800 FHLB 12/24/03 6/24/2008 2 9,000,000 3. 1 00% 3.19% 8,746,920 FFCB 6/26/2008 2 2,000,000 4.950% 4.96% 1,996,260 FHLB 9/30/03 6/30/2008 2 1,000,000 3.200% 3.29% 973,130 FHLB 2/28/07 8/28/2008 2 1,000,000 5.500% 5.50% 1,000,000 FHLMC 10/7/04 10/7/2008 2 5,000,000 3.300% 3.40% 4,853,650 FHLB 6/29/04 12/3/2008 2 2,180,000 4.000% 4.08% 2,139,125 FNMA 4/7/07 4/7/2009 3 5,000,000 3550% 3.66% 4,845,300 FHLB 6/15/07 6/15/2009 3 2,000,000 5375% 5.38% 1,998,120 FHLB 4/19/05 10/19/2009 3 5,000,000 4.250% 434% 4,893,750 FHLB 11/9/07 11/9/2009 3 3,000,000 5350% 5.37% 2,991,570 FNMA 4/26/07 4/26/2011 5 2,000,000 5.670% 5.67% 2,001,260 FHLB 4/26/07 11/9/2011 5 3,000,000 5.250% 5.25% 2,998,140 FARMER MAC 12/14/07 12/14/20] 1 5 2,000,000 5.400% 5.44% 1,987,120 TOTAL FEDERAL SECURITIES $73,356,000 4.07% $72,392,711 MUTUAL FUNDS Union Bank U.S. Govt Securities $5,482,944 5.19% $5,482,944 Bank of America Columbia Funds Government Reserves $10,000,187 5.08% $10,000,187 TOTAL MUTUAL FUNDS $15,483,131 5.12% $15,483,131. POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAIF) $29,179,550 5.11% $29,179,550 TOTAL INVESTED PORTFOLIO $118,018,681 4.46% $117,055,392 Year to Date Change in Market Value on Investments $0 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 $44,662,681 $23,676,000 $27,680,000 $15,000,000 $0 $7,000,000 38% 20% 23% 13% 0% 6% Total Portfolio $118,018,681 100% 1/25/20078:19 AM ITEM 1 .3 LC CITY OF DUBLIN SUMMARY OF INVESTMENT PORTFOLIO COMPARISON BY INVESTMENT TYPE December 31, 2006 TYPE OF INSTRUMENT Federal Home Loan Bank (FHLB) Federal Farm Credit Bureau (FFCB) Federal National Mortgage Assn (FNMA) Federal Home Loan Mortgage Corp (FHLMC) AVERAGE MARKET %OF MATURITY VALUE PORTFOLIO YEARS $43,637,030 37.42% 1.5 2,417,129 2.05% 1.2 9,826,880 8.47% 2.1 14,524,552 12.52% 1.1 1,987,120 1.69% 5.0 72,392,711 (1) 62.16% 1.6 Federal Agricultural Mortgage Corporation (FARMER MAC) SUB -TOTAL GOVT/AGENCY Mutual Funds Union Bank U.S. Govt Securities 5,482,944 4.65% N/A Bank of America Columbia Government Reserves Capital Fund 10,000,187 8.47% N/A LAIF 29,179,550 24.72% N/A GRAND TOTAL $117,055,392 100.0% NOTES: (1) The City intends to hold the investments until maturity or until market values equal or exceed their face value. 1/24/2007 9:04 AM ITEM 2 4 tJ6 lC: CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 2nd 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 December 31, 2006 5' LfJ 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 RegistersIPetty Cash - City Subtotal Balance 12/31/2006 $1,000.00 $1,000.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS General Led2er Balance 12/31/2006 Bank Balance 12/31/2006 BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With California Government Code $115,794 $9,060,179 NATIONS BANK U.S. Treasury Reserves Adviser Account (Sweep Account connected to Bank of America Deposits listed above) $2,433,030 $2,433,030 Citibank- Regular Savings Account: FDIC Insured $616 $616 Grand Total Amount Cash Balances: $2.549.440 $11.493.825 SPECIAL FUNDS HELD BY TRUSTEES CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN For the Quarter Ending December 31, 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. lc Lv MARKET VALUE $166,577