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Home My WebLink About4.06 Investment Report 3rd Qtr CITY CLERK File'# D~[2J~-~~ AGENDA STATEMENT CITY COUNCIL MEETING DATE: May 1, 2007 SUBJECT: City Treasurer's Investment Report for 3rd Quarter 2006-2007 ..-A Report Prepared by Paul S. Rankin, Administrative Services Dir. ~lJ1 '-"" ATTACHMENTS: Quarterly Investment Report (March 31, 2007) Section I - Primary Investment Portfolio /1 i rI Section II - Listing of Supplemental Monies Under City \ti. \:;!1{\{)J~. Possession and/or Control RECOMMENDATIO~ Receive Report DESCRIPTION: The attached Investment Report details the City's investments as of March 31, 2007, 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 third quarter of Fiscal Year 2006-2007 are discussed in the staff report below. INVESTMENT ACTIVITY DURING THE QUARTER During the third quarter six securities totaling $15.676 million matured and a $1 million security was called for redemption prior to the maturity date. This resulted in a total of $16,676,000 in funds being available for reinvestment as summarized in the tables below: T e FHLB FHLMC FHLMC FFCB FHLB FHLB Total Maturi $4,480,000 $500,000 $4,275,000 $421,000 $4,000,000 $2,000,000 $15,676,000 1/2/2007 1/3/2007 1/22/2007 1/23/2007 2/15/2007 2/28/2007 on 3.000% 6.525% 4.750% 4.600% 4.875% 5.000% INVESTMENTS CALLED DURING THE THIRD COPIES TO: ITEM NO.!t. b Document in quarterly investment report worksheets Ib.3 6 Staff purchased seven new securities during the period, as noted below: FNMA $2,000,000 01/29/2009 5.250% FHLMC $1,000,000 2/23/2009 5.050% FFCB $2,000,000 11/20/2009 4.850% FHLB $3,000,000 01/06/2010 5.000% Current to maturit * FHLB $2,000,000 08/06/2010 5.180% FHLB $3,000,000 09110/2010 5.125% FFCB $2,000,000 02/01/2011 5.050% Total $15,000,000 5.25% 4.94% 4.89% 4.77% N/A N/A N/A N/A 5.18% 5.08% 5.04% 02/06/2009 N/A N/A The securities purchased included only one investment which is callable. The call provision on the security purchased is limited to one-time only in 2009. As shown in the table above the effective yield may vary from the coupon rate. The difference factors in whether the purchase price included either a discount or premium paid. 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. Staff is working with PFM Investment Consultants to complete their evaluation of the City portfolio. The project was delayed due to Stafftumover, however the final report is expected to be presented by June 30, 2007. Staff will be monitoring cash flow needs with major Capital projects starting the construction phase (Dublin Blvd / Dougherty Road; Shannon Center Replacement; and other CIP Projects). 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 1.8 years. This is an increase from the 1.6 average maturity reported as of December 31, 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 62.55% 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 third 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 close to 50% of the portfolio. The total portfolio has increased from one year ago by approximately $15 million, the total amount shown as invested in the Primary Investment Portfolio is approximately $3.1 million less than the amount shown at December 31, 2006. Page 2 of3 PORTFOLIO COMPOSITION BY SOURCE OF FUNDS & QUARTERLY YIELD (Third Qtr 2006/07 Compared To Third Qtr 2005/06) J an - Mar 2007 J an - Mar 2006 3/31/2007 %of 3/31/2006 %of Balance Total Balance Total General Fund $56,073,948 48.4% $49,167,329 48.7% Restricted - Special Revenue $4,445,004 3.8% $3,385,761 3.4% (i.e. Gas Tax) Restricted Assessment Dist $612,340 0.5% $599,039 0.6% Restricted - Impact Fees; $43,384,801 37.4% $37,977,122 37.6% Housing In Lieu Fees Internal Service / $11,393,788 9.8% $9,802,263 9.7% Replacement Funds Total Invested $115,909,881 $100,931,514 Calculated Quarterly I I I I Return 4.55% 3.83% CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT Overall, the combined rate for the total portfolio increased from 4.46% at December 31,2006 to 4.55% at March 31, 2007. The general economic climate has supported increasing interest rates. However, rates for new investments are relatively flat among different maturities. The third 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 5.18% as of March 31, 2007, which was slightly higher than the 5.11 % rate recorded for the quarter ending December 31, 2006. One year ago the LAIF rate was at 4.04% 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. Page 3 of3 1~6' CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 3rd QUARTER FY 2006-2007 SECTION I PRIMARY INVESTMENT PORTFOLIO 5-1-07 t./.0 A1~rnenr CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS :<1; 5 INCLUDING RATE OF RETURN March 31, 2007 COUPON DATE VALUE AT INTEREST CURRENT BOOK MARKET INVESTMENT 1ST CALL DATE MATURITY MATURITY RATE YIELD VALUE VALUE FEDERAL SECURITIES FHLB 10/27/04 4/27/2007 1 3,000,000 3.150% 3.15% 3,954,320 2,995,320 FNMA 8/11/04 5/11/2007 1 3,000,000 3.250% 3.26% 3,000,000 2,993,430 FHLB 8/18/04 5/18/2007 1 2,000,000 3.000% 3.01% 3,954,320 1,994,380 FHLB 2/11/05 2/11/2008 1 2,500,000 3.420% 3.47% 2,500,000 2,464,850 FHLMC 4/27/05 4/28/2008 2 5,000,000 3.500% 3.56% 5,000,000 4,921,650 FHLB 12/24/03 6/24/2008 2 9,000,000 3.100% 3.17% 9,000,000 8,800,290 FFCB 6/26/2008 2 2,000,000 4.950% 4.95% 410,273 1,998,760 FHLB 9/30/03 6/30/2008 2 1,000,000 3.200% 3.27% 1,000,000 978,750 FHLMC 10/7/04 10/7/2008 2 5,000,000 3.300% 3.38% 5,000,000 4,884,300 FHLB 6/29/04 12/3/2008 2 2,180,000 4.000% 4.06% 2,180,000 2,147,300 FNMA 1/29/2008 1/29/2009 2 2,000,000 5.250% 5.25% 2,000,000 1,998,760 FNMA 4/7/07 4/7/2009 3 5,000,000 3.550% 3.64% 5,000,000 4,871,900 FHLMC 2/23/2009 2 1,000,000 5.050% 5.04% 1,000,000 1,002,920 FHLB 6/15/07 6/15/2009 3 2,000,000 5.375% 5.38% 2,000,000 2,000,000 FHLB 4/19/05 10/19/2009 3 5,000,000 4.250% 4.32% 5,000,000 4,918,750 FHLB 11 /9/07 11/9/2009 3 3,000,000 5.350% 5.36% 3,000,000 2,995,320 FFCB 11/20/2009 3 2,000,000 4.850% 4.85% 2,000,000 1,998,760 FHLMC 1/29/2010 3 3,000,000 5.000% 4.98% 3,000,000 3,014,190 FHLB 2/6/2009 8/6/2010 4 2,000,000 5.180% 5.17% 2,000,000 2,004,380 FHLB 9/1 0/201 0 4 3,000,000 5.125% 5.08% 3,000,000 3,029,070 FFCB 2/1/2011 4 2,000,000 5.050% 5.01% 2,000,000 2,014,380 FNMA 4/26/07 4/26/2011 5 2,000,000 5.670% 5.67% 2,000,000 2,000,620 FHLB 4/26/07 11/9/2011 5 3,000,000 5.250% 5.22% 3,000,000 3,015,000 FARMER MAC 12/14/07 12/14/2011 5 2,000,000 5.400% 5.42% 2,000,000 1,992,280 TOTAL FEDERAL SECURITIES $71,680,000 4.18% $72,998,913 $71,035,360 MUTUAL FUNDS Union Bank U.S. Govt Securities $98,781 5.29% $98,781 $98,781 Bank of America Columbia Funds Government Reserves $8,712,187 5.10% $8,712,187 $8,712,187 TOTAL MUTUAL FUNDS $8,810,968 5.10% $8,810,968 $8,810,968 POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAIF) $34,100,000 5.18% $34,100,000 $34,100,000 TOTAL INVESTED PORTFOLIO $114,590,968 4.55% $115,909,881 $113,946,328 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 $42,910,968 $10,500,000 $27,180,000 $20,000,000 $7,000,000 $7,000,000 38% 9% 24% 17% 6% 6% Total Portfolio $114,590,968 100% 4/19/20074:20 PM ITEM 1 31J6 CITY OF DUBLIN SUMMARY OF INVESTMENT PORTFOLIO COMPARISON BY INVESTMENT TYPE March 31, 2007 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 $37,343,410 32.88% 1.5 6,011,900 5.24% 0.4 11,864,710 10.47% 1.6 13,823,060 12.22% 0.9 1,992,280 1.75% 4.7 71,035,360 (1) 62.55% 2.0 Federal Agricultural Mortgage Corporation (FARMER MAC) SUB -TOTAL GOVT/AGENCY Mutual Funds Union Bank U.S. Govt Securities 98,781 0.09% N/A Bank of America Columbia Government Reserves Capital Fund 8,712,187 7.60% N/A LAIF 34,100,000 29.76% N/A GRAND TOTAL $113,946,328 100.0% NOTES: (1) The City intends to hold the investments until maturity or until market values equal or exceed their face value. 4/19/20074:20 PM ITEM 2 tfoo b CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 3rd 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 March 31, 2007 / 5~~ 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 3/31/2007 $16,400.00 $16,400.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS Bank Balance General Lede:er 3/31/2007 Balance 3/31/2007 BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With $174,970 $ 36,304 California Government Code NATIONS BANK U.S. Treasury Reserves Adviser $491,085 $ 491,085 Account (Sweep Account connected to Bank of America Deposits listed above) Citibank- Regular Savings Account: FDIC Insured $617 $617 Grand Total Amount Cash Balances: $666.672 $ 528.006