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Home My WebLink AboutItem 4.04 CT InvestRpt 06-30-1996 L~~~ ~";';<'", , ~' CITY CLERK File # ~~fi2J-(8lrol SUBJECT: AGENDA STATEMENT CITY COUNCIL MEETING DATE: (July 23,1996) City Treasurer's Investment Report ... , _ . '} For The Quarter Ended June 30, 1996 f) f.JJ-/ Report Prepared by: Ellen C. Whittam, Interim Finance Manaier ;.'.... . . EXHIBITS ATrACHED: 1. Detailed Listing of Investments s- ! 2. Summary of Investment Portfolio By Type RECOMMENDATION:~ Receive Report DESCRIPTION: The attached listing (Exhibit 1) details the City's investments as of June 30, 1996. The total amount shown as invested is approximately $1.9 million more than the amount shown at March 31, 1996. As discussed in the quarterly report that was submitted for the quarter ended March 31, 1996, the quarterly investment reports now include additional information not previously shown'in the monthly reports; -'Due to a change in State Law the City is required to identify the additional information. ~\ "'. '- V- REPORT~ORMAT The major piece of additional information shown on the detailed listing is a column for market value. Although the market value of Federal Securities can fluctuate daily, the City portfplioassumes that the :":.';;" investments will be held to maturity. The question of cummt market value only becomes an issue if the ". , City were required to liquidate an investment prior to the maturity date. The City bas staggered the ~ maturity dates.am1, i~, is >>:ot anticipated ~ these ~ds_,will need 10 be' called upon prior to their maturity date. ' '. Exhibit 2 provides a summary of the Investment Portfolio by the type of investment 'This schedule also includes 8, ~8verage maturity column.. -It. is ,important that the City. funds are ayailable in accordmlce::\viih nCedS.f~.Citj eJcpenditiJres. ~A~34%oftbe portfolio at June 30,' 1996 ,was mairihli~ect in the LoCal Ag~ct~vestm~t .Fund. . This, is a:(leXib1~ inv~ent account,nanaged by the' State Treasurer. The accounfis similar to' a money market fund which allows daily access as monies are needed to cover operating expenditures. The average maturity of the instruments included in the Government Security and Certificate of Deposit categories ranges from 1.57 to 1.96 years. For the Dean Witter Mutual Fund, Staff has identified the average maturity of the investments held by the mutual fund. A mutual fund does not have a stated date of maturity, and, as discussed in the footnotes, the City cmrently intends to hold this through 1999. The Dean Witter Investment represents approximately 6.907% of the City's total portfolio. As has been the practice in the past, the City withdrew the dividend shares earned dming the 1995-96 Fiscal Year prior to the end of June, 1996. The total amount withdrawn was approximately $101,000. <. ---~------------------------------------------~-------------------- COPIES TO: ITEM NO. Ad INVRSlMENT ACTIVITY IN FOURTH QUARTER FISCAL YEAR 1995/96 ~'~.~ During the fourth quarter of the 1995-96 fiscal year, one investment matured and one investment was called prior to maturity. A Federal Home Loan B~ (FHLB) Bond of 550~,OOO with a coupon ~e. o.~>,: 6.2% matured on May 20, 1996. The called secunty was 8 Federal National Mortgage AsSOCiation '.:' (FNMA) Bond of 5500,000 with a maturity date of June 17, 1997 and a coupon rate of 6.19%. The bond was called on June 17, 1996 at face value. During the fourth quarter the City purchased one security. The following Table summarizes the details of this investment: INVESTMENTS PURCHASED FOURTII QUARTER FISCAL YEAR 1995/96 <' TYPE Federal Home Loan Bank (FHLB) AMOUNT $ 1,000,000 MATURITY 12/17/98 CALLABLE INTEREST RATE 12/17/96 6.625% .< ~ This 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. If this security is called at the call date, the City receives the full face amount plus any accroed interest. . CHANGES IN TIIE TOTAL PORTFOJ.,IO YIELD FROM TIIE PREVIOUS REPORT I,' j Overall, the combined rate for the total portfolio decreased very slightly from 5.738% at March 31, 1996 to 5.7~2~ at Jun~ 30, 1996. Specific ~~es affecting the yield included: 1)The. ~rtion of the City~_, portfolio mvested m Federal/Agency Secunties decreased from 61.3% of the portfolio m March, 1996 to.:';,> 56.6% in June, 1996. 2)The City bad 8 larger portion of the toW portfolio invested in LAIF than in the . ," previous quarter. (March, 1996: LAIF represented 28.2% of,theportfolio vs. 33.7% of the portfolio at Jwe 30, -I996) 3) A decrease was reported in the yield calculated on the Dean Witter Mutual Fmui investment (March, 1996 yield calculated at 6.090% vs. 5.947% as of June 30,1996). 4) A small decrease in:the LAIF rate as discussed below. ,) ," t ~~.I#Fq~ly Bvera!e.was 5.52% 8s~i i.~?0,J~6,'-~'?his lC?~erthan the 5.62% rate recorded fO(tbe.quartCrending March 30, 1996. ,LAIF is a-liquid 'inveStment, ~:the, current LAIF rate rerf1a;nR very ~ecompared to rates offered on investments which have leSS fleXibility. ' - The schedule of investments including the dates of maturity is anticipated to allow the City to meet anticipated expenditures in the upcoming month. .:<, .r-,,;.J " ~, .... "'- CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS . INCLUDING RATE OF RETURN FOR THE QUARTER ENDING JUNE 30, 1996 COUPON MATURITY VALUE AT INTEREST BOOK MARKET INVESTMENT DATE MATURITY RATE YIELD VALUE VALUE F1ll..B 8/26/96 5490,000,00 7.700% 7.700% $490,000.00 5491,685.60 V.S, Treasury Note 2/15/97 5500,000,00 4.750"10 5,724% 5497,209.23 5497,030.00 FFCB (Callable 3/3/95) 3/3/97 5328,571.43 5.120% 5.420"10 5329,460.43 5327,030.43 FNMA 6/10/97 51,205,000.00 9.200% 7.660% 51,224,000.00 51,240,402.90 Flll.MC (Callable 2/26/97) 2/26/98 5500,000,00 5.100"10 5.100"10 5500,000.00 $490,940.00 FNMA (Callable 1111196) 5/1/98 5500,000.00 6,030% 6,030"/0 5500,000,00 5496,270.00 FNMA (Callable 5/13/96) 5/13198 5500,000.00 5,250% 5,482% $498,125,00 $489,530.00 F1ll..MC (Callable 9/9/94) 9/9/98 $500,000,00 4.950"/0 5,020"/0 $499,234.36 5484,530,00 FNMA (Callable 10115/96) 10115/98 51,000,000.00 4,875% 4,889% 5999,713.57 5966,560.00 V.S, Treasury Note 10/31/98 51,000,000.00 4,750% 5.101% 5993,109.38 5968,750.00 FHLB (Callable 11/3/94) 11/3198 51,000,000.00 5.110% 5.110% 51,000,000.00 5966,950,00 FNMA (Callable 12/10196) 12/10198 51,000,000.00 5.310"10 5.311% 5999,773.43 5975,630.00 FHLB (Callable 12/17/96) 12/17198 51,000,000,00 6.625% 6.625% 51,000,000.00 $1,000,310.00 FFCB (Callable 12/18/96) 12/18/98 5500,000,00 5.850"10 5.850"/0 $500,000,00 $490,560,00 FHLB (Callable 6f1.9/96) 12/29/98 5500,000.00 5.950"10 5,950"/0 5500,000.00 $493,280.00 FNMA (Callable 12130/96) 12130/98 5500,000.00 5.890% 5,890"/0 5500,000.00 5490,910.00 F1ll..B (Callable 1112/95) 1112/99 52,000,000.00 5.460% 5.460"/0 $2,000,000.00 51,941,160.00 FNMA (Callable 2112/96) 2112199 $400,000.00 5.550% 5.564% 5399,870.85 5390,752.00 FHLB (Callable 3f1.6197) 3/26199 5500,000.00 6.250"/0 6.250"/0 5500,000.00 $496,095.00 . 513,923,571.43 5.793% 513,930,496.25 513,698,375,93 CERTIFICATES OF DEPOSIT - FDIC INSURED Home Savings of America 1216/96 $99,000.00 5.450"10 5.450"10 599,000.00 599,000.00 Sanwa Bank ofCalifomia 1219196 599,000.00 5.450% 50450% 599,000.00 599,000.00 World Savings , 1f1.9198 $100,000.00 6.010"/0 6.010% 5100,000.00 5100,000.00 Fremont Investment & Loan 7/30/98 599,000.00 5.560% 5.560% 599,000.00 599,000.00 Snmdard Pacific Savings 7/30/98 $99,000.00 5.200% 5.200% 599,000.00 599,000.00 First Republic Trust & Loan 9114198 $95,000,00 5.250% 5.250% 595,000,00 595,000.00 Southern California FS&L 9114/98 $98,000.00 5.250% 5.250% 598,000.00 $98,000.00 $689,000.00 5A5S% 5689,000.00 $689,000.00 MUTUAL FUND Dean Witter U.S. Government Securities See Note 1 5.947% 51,699,995.50 (2) 51,567,593.32 (3) POOLED PUBLIC AGENCY INVESTMENTS State of Calif.- Local Agency Investment Fund (LAIF) 8,300,000.00 5.520% (4) 58,300,000.00 58,300,000.00 TOTAL INVESTED PORTFOLIO 5.702% 524,619,491.75 $24,254,969.25 . NOlES: (1) A Mutual Fund investment does not have a stated date ofmaIurity 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 51 million will be held through July 1, 1999 and 5699,995 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 original shares invested at the share price as of June 27, 1996, If the original shares were liquidated a deferred sales charge would apply. (4) Interest Rate shown is the quarterly average as of June 30, 1996, EXHIBIT 1 ~-..~ ,.. ."'!r....... CITY OF DUBLIN FOR THE QUARTER ENDED: JUNE 30, 1996 .;" . .., SUMMARY COMPARISON OF INVESTMENT PORTFOLIO BY TYPE AVERAGE MARKET %OF MATURITY TYPE OF INSTRUMENT FACE VALUE BOOK VALUE VALUE PORTFOLIO YEARS .S. Treasury Notes 1,500,000.00 1,490,318.61 1,465,780.00 6.094% 1.77 ederal Farm Credit Bureau (FFCB) 828,571.43 829,460.43 817,590.43 3.366% 1.76 ederal Home Loan Bank(FHLB) 5,490,000.00 5.490,000.00 5,389,480.60 22.306% 2.29 cd Home Loan Mortgage Corp(FHLMC) 1,000,000.00 999,234.36 975,470.00 4.063% 1.93 ederal National Mortgage Assn(FNMA) 5,105,000.00 5,121,482.85 5,050,054.90 20.741% 1.96 SUB -TOTAL GOVT/AGENCY 13,923,571.43 13,930,496.25 13,698,375.93 (I) 56.570% 1.96 689,000.00 689,000.00 689,000.00 2.799% 1.57 Mutual Funds. Dean Witter U.S. Govt nties 1,699,995.50 1,699,995.50 1,567,593.32 (2) 6.907% 8,300,000.00 8,300,000.00 8,300,000.00 33.723% N/A t;.' TOTAL 24,612,566.93 24,619,491.75 24,254,969.25 99.999% .' 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 original shares invested at share price as of June 27, 1996. If the original 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 Witter based upon all investment instruments owned by the U.S. Government Securities Mutual Fund as ofDeccmber 31, 1995. Dean Witter reports that the average duration of those investments is approximately 5.0 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. e: EXHIBIT 2