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HomeMy WebLinkAboutItem 4.04 CT InvestRpt 96-97 ,. .. CITY CLERK File # [i]@][Q]D-~[Q] " .> :-:'. AGENDA STATEMENT CITY COUNCIL MEETING DATE: (April 15, 1997) SUBJECT: City Treasurer's Investment Report For 3rd Quarter 96/97 ~ Report Prepared by: Paul S. Rankin, Assistant City Manager EXHIBITS ATTACHED: Quarterly Investment Report (March 31,1997) Section I - Primary Investment Portfolio Section II - Listing of Supplemental Monies Under City /7 . .V Possession and/or Control RECOMMENDATION: . ~-~ Receive Report DESCRIPTION: The attached Investment Report details the City's investments as of March 31, 1997, 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. Previous reports included balances in Employee Deferred Compensation accounts. The City Council recently approved changes to the Deferred Compensation Plan, which resulted in these assets being held in a Trust Fund, which is not subject to the City's Creditors. Therefore, under State Law inclusion of Deferred Compensation Funds is no longer necessary as part of the Investment Report. .\:.. 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 1996/97 are discussed in the staff report below. INVESTMENT ACTIVITY IN THIRD OUARTER FISCAL YEAR 1996/97 During the Third Quarter a total of three investments were deleted from the portfolio due to maturities and one early call. The following Table outlines Matured and Called Investments: INVESTMENTS WHICH MATURED OR WERE CALLED JANUARY w MARCH 1997 $500,000 $328,571 ORIGINAL CALL INTEREST MATURITY DATE RATE 2/15/97 5.450 % 3/3/97 5.120 % Original Maturity Eligible To Be 5/1/98 Called After 6.030% (Called 1/13/97) 11/1/96 . TYPE Matured Federal Securities U.S. Treasury Note Federal Farm Credit Bureau AMOUNT Called Federal Securities Federal National Mortgage Association (FNMA) $500,000 .:~.AS noted above FNMA exercised their right to "call" the security prior to the stated maturity date. The .:.:_ City received the full principal amount as well as accrued interest through the date of the call. However, this results in the need to reinvest the funds at current market rates. ------------------------------------------------------------------- COPIES TO: ITEMNO.~'f As noted in the preceding section a total of$1,328,571 became available for investment during the peFiod. One security, totaling $1,000,000, was purchased as discussed below: .' .. INVESTMENTS PURCHASED THIRD QUARTER FISCAL YEAR 1996/97 TYPE Federal Securities: Federal Home Loan Bank (FHLB) AMOUNT MATURITY CALL DATE INTEREST RATE .. $1,000,000 2/12/99 2/12/98 6.125% The security was purchased at face value and is callable, which means that it can be called by the issuer prior to the stated maturity date. The federal security listed above is allowed under the City's current investment policy. The first option for an early call on the security is in one year on the February 1998 interest payment. Thereafter, the FHLB security can only be called on the August 1998 interest payment date. If the security is called prior to the stated maturity date, the City receives the full face amount plus any accrued interest. DETAILED LISTING OF PRIMARY PORTFOLIO Government and Agency Securities represent the largest portion of the Primary Portfolio. A detailed listing of each security is provided along with a sununary by type of investment. The market value of Federal Securities can fluctuate daily and values have been provided as reported by Union Bank of California as of February 28, 1997. 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 and it is not anticipated that these funds will need to be called upon prior to their stated maturity dates. . The Dean Witter Mutual Fund Investment represents approximately 6.3% of the City's total portfolio. The book value reported is based upon the original cost of shares. In Fiscal Year 1996/97 the City has elected to receive its dividend shares on a montWy basis. During the first three quarters the City received approximately $74,610 in dividends from this investment. CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT The total amount shown as invested in the Primary Investment Portfolio is approximately $853,571 less than the amount shown at December 31, 1996. The amount invested in Federal Securities declined by $328,571, while the City's investment in the Local Agency Investment Fund (LAIF) decreased by $525,000. The payment of the 2nd quarter installment for police services contributed significantly to this decrease. Overall, the combined rate for the total portfolio decreased slightly from 5.699% at December 31, 1996 to 5.697% at March 31, 1997. The change was related primarily to a decrease in the reported rate paid by the Local Agency Investment Fund (LAIF). The LAIF quarterly average was 5.580% as of March 31, 1997, which is slightly lower than the 5.595% rate recorded for the quarter ending December 31, 1996. LAIF is a liquid investment, and the current LAIF rate remains very favorable compared to rates offered on investments which have less flexibility. The City Treasurer believes that the schedule of investments including the dates of maturity, contain adequate cash flow liquidity to meet anticipated expenditures over the next six months. . :. . . . I .. . CITY OF DUBLIN QUARTERLY INVESTMENT REPORT SECTION I PRIMARY INVESTMENT PORTFOLIO .. CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN FOR THE QUARTER ENDING MARCH 31,1997 . COUPON MATURITY VALUE AT INTEREST BOOK MARKET I NVESTMEl'\'T DATE MATURITY RATE YIELD VALUE VALUE FNMA 6/1 0/97 $1,205,000.00 9.200% 7.660% $1,195,500.00 $1,216,290.85 FHLMC (Callab]e 2/26/97) 2/26/98 $500,000.00 5.100% 5.100% $500,000.00 $496,170.00 FNMA (Callable 5/13/96) 5/13/98 $500,000.00 5.250% 5.482% $498,625.00 $496,095.00 FHLMC (Callable 9/9/94) 919198 $500,000.00 4.950% 5.020% $499,398.42 $485,860.00 FNMA (Callable 10/15/96) 10/] 5/98 $1,000,000.00 4.875% 4.889% $999,776.07 $979,690.00 U.S. Treasury Note ] 0/31/98 $1,000,000.00 4.750% 5.10]% $994,640.64 $980,000.00 FHLB (Callable 1113/94) I 113/98 $1,000,000.00 5.110% 5.110% $1,000,000.00 $984,690.00 FNMA (Callable 12/10/96) 12/1 0/98 $1,000,000.00 5.3 10% 5.311% $999,820.31 $985,000.00 SLMA (Callab]e 12/18/97) 12/18/98 $500,000.00 5.800% 5.800% $500,000.00 $497,850.00 FFCB (Callable 12/18/96) 12/18198 $500,000.00 5.850% 5.850% $500,000.00 $498,250.00 FHLMC(Callable ]2/24/97) 12/24/98 $1,000,000.00 6.000% 6.000% $1,000,000.00 $996,880.00 FHLB (Callable 6/29/96) 12/29/98 $500,000.00 5.950% 5.950% $500,000.00 $497,420.00 FNMA (Callable ]2/30/96) 12/30/98 $500,000.00 5.890% 5.890% $500,000.00 $498,600.00 FHLB (Callable 1112/95) 1112/99 $2,000,000.00 5.460% 5.460% $2,000,000.00 $1,975,000.00 FNMA (Callable 2/12/96) 2/12/99 $400,000.00 5550% 5.564% $399,895.85 $395,252.00 FHLB (Callable 2/12/98) 2/12/99 $1,000,000.00 6.125% 6.125% $1,000,000.00 $997,190.00 FFCB (Callable 9/19/97) 3/19199 $1,000,000.00 6570% 6570% $1,000,000.00 $1,000,780.00 FHLB (Callab]e 3/26/97) 3/26/99 $500,000.00 6.250% 6.250% $500,000.00 $497,890.00 $14,605,000.00 5.761% $14,587,656.29 $14,478,907.85 . CERTIFICATES OF DEPOSIT. FDIC INSURED Home Savings of America 10/1197 $99,000.00 5.450% 5.450% $99,000.00 $99,000.00 Sanwa Bank of California 12/7/97 $99,000.00 5.600% 5.600% $99,000.00 $99,000.00 World Savings 1129/98 $100,000.00 6.010% 6.010% $100,000.00 $100,000.00 Fremont Investment & Loan 7/30/98 $99,000.00 5.560% 5.560% $99,000.00 $99,000.00 Standard Pacific Savings 7/30/98 $99,000.00 5.200% 5.200% $99,000.00 $99,000.00 First Republic Trust & Loan 9/14/98 $95,000.00 5.250% 5.250% $95,000.00 $95,000.00 Southern California FS&L 9/J 4/98 $98,000.00 5.250% 5.250% $98,000.00 $98,000.00 $689,000.00 5.477% $689,000.00 $689,000.00 MUTUAL FUND Dean Witter U.S. Government Securities See Note 1 5.852% (4) $1,699,995.50 (2) $1,599,877.86 (3) POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAIF) 8,975,000.00 5.580% (5) $8,975,000.00 $8,975,000.00 TOTAL INVESTED PORTFOLIO 5.697% $25,951,651.79 525,742,785.71 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 current City investment strategy assumes that approximately $1 million will be held through July 1, 1999 and $699,995 through October 1,1999 to avoid any deferred sales charge. (2) Book Value is shown as the cost at the time the original shares were purchased. (3) Market value is based upon the shares invested at the share price as of February 28, 1997. Iftbe original shares were liquidated a deferred sales charge would apply. (4) Interest Rate shown is based on dividends received this fiscal year to date, which are annualized and then divided by the original investment. (5) Interest Rate shown is the quarterly average as of March 31, 1997. .. EXHIBIT 1 .... ' . CITY OF DUBLIN FOR THE QUARTER ENDED: MARCH 31,1997 SUMMARY COMPARISON OF INVESTMENT PORTFOLIO BY TYPE I AVERAGE MARKET %OF MATURITY TYPE OF INSTRUMENT FACE VALUE BOOK VALUE VALUE PORTFOLIO YEARS U.S. Treasury Notes 1,000,000.00 994,640.64 980,000.00 6.847% 1.59 Student Loan Marketing Assn (SLMA) 500,000.00 500,000.00 497,850.00 3.423% 1.72 Federal Farm Credit Bureau (FFCB) 1,500,000.00 1,500,000.00 1,499,030.00 10.270% 1.88 Federal Home Loan Bank (FHLB) 5,000,000.00 5,000,000.00 4,952,190.00 34.235% 2.35 Fed Home Loan Mortgage Corp (FHLMC) 2,000,000.00 1,999,398.42 1,978,910.00 13,694% 1.46 Federal National Mortgage Assn (FNMA) 4,605,000.00 4,593,617.23 4,570,927.85 31.530% 1.18 SUB -TOTAL GOVT/AGENCY 14,605,000.00 14.587.656.29 14.478,907.85 (1) 56,240% 1.23 ertificates of Deposit v FDIC Insured 689,000.00 689.000.00 689,000.00 2.653% 1.08 Mutual Funds - Dean Witter U.S. Govt (1)1 I Securities (.) 1,699,995.50 1.699.995.50 1.599,877.86 6.546% 7.1 (3) LAIF 8,975,000,00 8.975,000.00 8,975.000.00 I I 34.560% N/A 1 GRAND TOTAL ~ 25,968.995.50 I 25.951,651.791 I 25,742,785.71 I I 100.000% NOTES: (1) The City intends to hold the investments until maturity or until market values equal or exceed the current book value (Amortized Cost). (2) Market value is based upon the shares invested at share price as of February 28, 1997, If the shares were liquidated a deferred sales charge would apply. (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 Winer based upon all investment instruments owned by the U.S. Government Securities Mutual Fund as of December 31, 1995. (4) The current City investment strategy assumes that approximately $1 million will be held through July 1, 1999 . and $699,995 through October 1, 1999 to avoid any deferred sales charge. EXHIBIT 2 CITY OF DUBLIN QUARTERLY INVESTMENT REPORT SECTION II LISTING OF SUPPLEMENTAL MONIES UNDER CITY POSSESSION AND/OR CONTROL . OPERATING FUNDS . SPECIAL FUNDS HELD BY TRUSTEES t{ . .'..... :e :'.: :. .'.: :' , . .. -.' . . , . . '. ':: ., ..' '.. ; . . ',: .'. . e: . ~ ". City of Dublin Report of Operating Funds On Hand As of March 31,1997 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 Balance 03/31/97 Non-Categorized w Cash Petty Cash - City Petty Cash - Recreation Cash Register - (4 Locations) Subtotal $200.00 $200.00 $200.00 $600.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS Balance 3/31/97 Annualized Rate of Interest BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With California Government Code $50,044.05 See Note 1 First Nationwide Bank- Regular Savings Account: FDIC Insured $ 2,059.88 2.01% Grand Total Amount Cash Balances: $52.103.93 Note 1: The City operating account is a corporate checking account, which includes monthly interest earnings which are at a variable rate. The interest earnings are credited against account charges and fees required to maintain the accounts. 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