HomeMy WebLinkAbout4.12 Investment Rpt 4th Qtr 2011-2012
STAFF REPORT CITY CLERK
File #320-30
CITY COUNCIL
DATE:August 21, 2012
TO:
Honorable Mayor and City Councilmembers
FROM:
Joni Pattillo, City Manager
SUBJECT:
City Treasurer's Investment Report for 4th Quarter FY 2011-2012
Prepared by Paul S. Rankin, Administrative Services Director
EXECUTIVE SUMMARY:
The City's investment portfolio totals $125,608,871.43 (par value). As of June 30, 2012, funds
were invested at an average yield of 1.024%. The portfolio includes both discretionary and
restricted funds and the balance will fluctuate throughout the year. The report presented
provides background on the City investment portfolio as well as the investment results as of
June 30, 2012.
FINANCIAL IMPACT:
Investments are made in accordance with the City Investment Policy and State Law. Interest
earned is apportioned between the Funds (i.e. General Fund, Gas Tax Fund, etc.) based upon
the proportionate share of the total cash balance. The current earning rate is slightly less than
the 1.1% projection which was developed with the mid-year budget adjustments. Actual
revenue will be determined after final accruals are made by fund and the completion of the
Comprehensive Annual Financial Report (CAFR).
RECOMMENDATION:
Staff recommends that the City Council receive the Quarterly Investment Report.
Submitted By Reviewed By
Administrative Services Director Assistant City Manager
DESCRIPTION:
The format of the quarterly report consists of the following components:
Section I – Portfolio Information
Portfolio Summary (Includes the Par Value; Market Value; and Yield)
Portfolio Details (Includes a listing of individual securities and investments)
Investments By Type (Includes a listing of Federal Securities including call
date if applicable)
ITEM NO. 4.12
Page 1 of 4
Section II – Investment Charts
Section III – Listing of Investment Transactions by Month
4th QUARTER RESULTS
As shown on the Portfolio Summary, the total investments were, as of June 30, 2012,
approximately $125.6 million. The “Yield to Maturity” was calculated at 1.024% and the
weighted average maturity of the portfolio was 413 days (1.13 years). The report also displays
the weighted average maturity based on the “Call Date”. If all securities were assumed to be
called the portfolio average maturity drops to 298 days (0.82 years).
The Market Value, as of June 30, 2012, was approximately $1.0 million more than the Par Value
(Par Value = $125,608,871 and Market Value = $126,633,171). The Par Value is the “face
value” or principal amount at maturity of the note or bond. The typical investment approach
used by the City is to hold investments until maturity. The City does not actively sell securities
prior to their maturity. In the current market, the premature liquidation of a security would result
in less interest income upon reinvestment, diluting any gain achieved from selling the
investment prior to its stated maturity. As part of the year-end accounting entries Staff will need
to book an unrealized gain based on the market value. This is a requirement imposed as part of
accounting standards for the audit.
The following Table displays the comparative results based on information in the Portfolio
Summary for the most recent five quarters. This allows for a comparison to the most recent
quarter as well as the same three month period one year ago.
Table 1: COMPARISON OF PORTFOLIO MEASURES
Most Recent Five Quarters
2010/11 2011/12 2011/12 2011/12 2011/12
Portfolio Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4
Measure (Apr - Jun (Jul-Sept (Oct-Dec (Jan-Mar (Apr - Jun
2011) 2011) 2011) 2012) 2012)
$101,656,026 $104,369,517 $112,918,989 $111,424,381 $125,608,871
Par Value
Average 650 days 605 days 467 days 423 days 413 days
(1.78 yrs) (1.66 yrs) (1.28 yrs) (1.16 yrs) (1.13 yrs)
Term
1.388 % 1.322 % 1.195 % 1.090 % 1.024 %
Yield To
Maturity/Call
As noted in Table 1, the total portfolio balance has increased from the amount reported one year
ago. It has also increased by approximately $14.1 million from the amount reported in the
previous quarter. The total portfolio fluctuate between each reporting period and fiscal years
based upon planned expenditures, fluctuations in revenue collected, and differences in timing of
both revenue and expenditures. Expenditures for Capital Projects are largely responsible for a
lower total portfolio value at June 2011. The timing of revenue collection and issuance of
payments also impacts the balance available to the portfolio. With recent building and
development activity there has been additional revenues collected including Impact Fees. The
balance is also impacted by the lag in the billing for Contract Police and Fire Services. It is
expected that the final accruals for Fiscal Year 2011/2012 will be processed in August.
Page 2 of 4
The average maturity of the investments held has remained relatively constant from the
previous quarter, but the term has decreased from one year ago. In the coming year, Staff will
evaluate the timing of cash flow required for Capital Improvement Projects and look for
opportunities to increase the overall average maturity.
INVESTMENT ACTIVITY DURING THE FOURTH QUARTER
This report discloses changes in individual securities due to Maturities, Called Securities, and
New Investments. The City did not have any investments that matured during the quarter
ending June 30, 2012.
A total of $ 4,000,000 in securities was called during the quarter. As shown below, one security
was called prior to the stated maturity dates.
TABLE 2: INVESTMENTS CALLED DURING THE FOURTH QUARTER
Original
Date Maturity Coupon
Type* Acquired Par Value Date Rate Call Date
FHLMC 6/28/2011 $4,000,000 12/29/2014 1.25% 6/29/2012
Three new investments, with a combined par value of $11,000,000, were purchased during the
fourth quarter.
TABLE 3: INVESTMENTS PURCHASED DURING THE FOURTH QUARTER
Effective Yield with
Date Value at Maturity Coupon Premium /
Type* Acquired Maturity Date Rate Discount Call Date
FHLMC 5/2/2012 $ 4,000,000 5/15/2017 1.25% N/A 5/15/2013
FNMA 5/2/2012 $ 3,000,000 5/27/2015 .50% N/A N/A
FNMA 6/28/2012 $ 4,000,000 12/4/2014 .55% 0.49 06/4/2013
Total $ 11,000,000
* FHLB = Federal Home Loan Bank; FFCB = Federal Farmers Credit Bank; FNMA = Federal
National Mortgage Association or “Fannie Mae”; FHLMC = Federal Home Loan Mortgage
Corporation or “Freddie Mac”
Two of the securities which were purchased have call provisions as shown in the Table above.
The effective yield is less than the stated coupon for one of the new securities purchased, as it
was purchased at a premium. For example, the first security shown in the Table above
indicates a “coupon rate” of .55% and an effective yield of .49%. The $4,000,000 face value
bonds were purchased for $4,005,560 and factoring this in results in a slight decrease in the
yield. Securities can sell for either a premium or discount depending on the market on the day
the security is purchased. The “premium” or “discount” is allocated over the life of the
investment in the City accounting records.
COMPOSITION OF PORTFOLIO
Section II of the Report contains charts which assist with reviewing the portfolio. The charts
focus on key factors to monitor including the investment maturities as well as the composition of
the portfolio. Although several of the comparisons remain consistent with the report from the
previous quarter, this was achieved at the same time that the total portfolio increased by
approximately $14.1 million. The following are key highlights of the portfolio:
Page 3 of 4
At June 30, 2012, 46.7% of the portfolio was immediately available in the Local Agency
Investment Fund (LAIF) and Money Market instruments; this is approximately the same
as the 46.1% reported as of March 31, 2012.
Federal Agency Securities represented 53.34% of the Portfolio, which is nearly the same
as the 53.85% reported as of March 31, 2012.
There was diversity in the issuers of the federal securities held in the portfolio. A total of
four different issuers were represented. (FNMA-25%; FHLB – 48%; FFCB-12% and
FHLMC-15%).
59.4% of the funds are invested for one year or less compared to 55.1% reported in this
category as of March 31, 2012.
MONTHLY TRANSACTIONS
Section III of the Report provides a list of transactions related to investments in the City portfolio
for each month of the fourth quarter (April, May, and June). This schedule provides compliance
with the Government Code requirement to disclose monthly transaction data. It is incorporated
as part of the quarterly investment report rather than individual monthly reports.
RECENT TRENDS COMPARED TO BUDGET
As part of the mid-year budget adjustments for Fiscal Year 2011/12, a revision was made to the
projected revenue earned from investments. In the adjusted Budget, it was assumed that LAIF
would generate a rate of approximately 0.40%. As noted below, the LAIF rate for the fourth
quarter was slightly less than this target estimate. The following table shows the relatively flat
trend in short-term rates at LAIF over the past five consecutive quarters.
TABLE 4: Local Agency Investment Fund (LAIF) Quarterly Rate
2010/11 2011/12 2011/12 2011/12 2011/12
Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4
(Apr - June (Jul-Sept (Oct-Dec (Jan-Mar (Mar- June
2011)) 2011) 2011) 2012) 2012)
0.51 % 0.48% 0.38% 0.37 % 0.36 %
LAIF RATE
The current trend in the market has been a continued climate of low interest rates. Most
projections do not anticipate a rapid change in interest rates and the low rates are expected for
at least the next fiscal year. Investments with longer maturity dates have not offered a
significant increase in the interest paid. Current securities with a five year maturity and full call
protection are earning less than 1%. Staff will continue to monitor the investment options and
manage the investments in accordance with the adopted City policy.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
1. Quarterly Investment Report for the Period Ending June 30, 2012
Page 4 of 4
CITY OF DUBLIN
QUARTERLY INVESTMENT REPORT
Fourth Quarter Fiscal Year 2011-2012
June 30, 2012
Report Prepared July 30, 2012
Report Presented To City Council August 21, 2012
Section I Portfolio Information
Portfolio Summary (Includes the Par Value; Market
Value; and Yield)
Portfolio Details (Includes a listing of individual
securities and investments)
Investments By Type (Listing of Federal Securities
including call date if applicable)
Section II Investment Charts
Section III Listing of Monthly Investment Transactions
ATTACHMENT 1
City of Dublin
Portfolio Management
Portfolio Details - Investments
June 30, 2012
Purchase Coupon Days To Days To YTM @ Maturity
CUSIPFile #IssuerPar ValueMarket ValueBook Value
DateRateMaturityCall/MatCostDate
Local Government Investment Pool
California Asset
Management
CAMPProgramN/A8,566,385.888,566,385.888,566,385.880.24110.24N/A
LAIFLAIFN/A50,042,407.8650,042,407.8650,042,407.860.36110.36N/A
Sub Total / Average58,608,793.7458,608,793.7458,608,793.740.34110.34
Money Market
Fidelity US
Government
UNIONPortfolioN/A77.6977.6977.690.01110.01N/A
Sub Total / Average77.6977.6977.690.01110.01
US Agency
31331KXD710107FFCB9/6/20114,000,000.004,001,280.004,000,000.000.49433680.499/6/2013
31331J6A610094FFCB12/23/20104,000,000.004,057,080.003,999,644.671.35415411.3061612/23/2013
313374GK010103FHLB6/30/20113,000,000.003,039,870.003,000,000.001.038458451.0300110/23/2014
3133XYUR410091FHLB6/30/20103,000,000.003,004,320.003,000,000.001.0561611.058/30/2012
3133743W810101FHLB6/10/20114,000,000.004,064,400.004,006,389.511.158528521.0801910/30/2014
3133XYVW210092FHLB6/25/20103,000,000.003,019,200.003,000,000.001.252402401.252/25/2013
3133XYF9110089FHLB5/10/20104,000,000.004,007,040.004,000,000.001.2558581.258/27/2012
313370JS810100FHLB3/22/20114,000,000.004,082,240.003,989,913.091.3758048041.493049/12/2014
3133XYK5310090FHLB5/21/20103,000,000.003,046,230.003,000,000.001.654174171.658/21/2013
3133725D210095FHLB12/21/20102,000,000.002,104,900.001,997,039.302.125126912692.1700912/21/2015
3133XRFL910077FHLB7/25/20083,000,000.003,113,340.002,999,958.934.253493494.250236/14/2013
3133XD6A410082FHLB9/26/20083,000,000.003,146,010.003,012,146.784.3754404404.000079/13/2013
3134G3HP810108FHLMC1/27/20123,000,000.003,021,480.003,000,000.001130657611/27/2016
3134G3UH110110FHLMC5/15/20124,000,000.004,006,440.004,000,000.001.2517803191.255/15/2017
3128X1EJ210084FHLMC10/14/20083,000,000.003,106,200.003,006,001.094.253263264.002075/22/2013
3135G0KM410109FNMA5/3/20123,000,000.002,997,810.003,000,000.000.5106110610.55/27/2015
3135G0LL510111FNMA6/29/20124,000,000.003,999,120.004,005,553.650.558873390.492412/4/2014
3136FRVK610105FNMA7/15/20113,000,000.003,031,440.003,000,000.001.511103801.57/15/2015
3136FRRR610102FNMA6/27/20114,000,000.004,051,640.004,000,000.002145836226/27/2016
3136FPHZ310099FNMA1/20/20113,000,000.003,124,260.002,998,111.002118511852.020199/28/2015
Sub Total / Average67,000,000.0068,024,300.0067,014,758.021.6467735011.62008
Total / Average125,608,871.43126,633,171.43125,623,629.451.0384132681.02394
City of Dublin
Investments by Type
June 30, 2012
Face Amount/ Cost Coupon Maturity Next Call Next Call
CUSIPInvestment #IssuerBook Value
SharesPriceRateDateDatePrice
US Agency
31331KXD710107FFCB4,000,000.001004,000,000.000.499/6/20139/6/201
31331J6A610094FFCB4,000,000.0099.9823,999,644.671.312/23/2013
FFCB Total8,000,000.00
313374GK010103FHLB3,000,000.001003,000,000.001.0310/23/2014
3133XYUR410091FHLB3,000,000.001003,000,000.001.058/30/2012
3133743W810101FHLB4,000,000.00100.2324,006,389.511.1510/30/2014
3133XYVW210092FHLB3,000,000.001003,000,000.001.252/25/2013
3133XYF9110089FHLB4,000,000.001004,000,000.001.258/27/2012
313370JS810100FHLB4,000,000.0099.6023,989,913.091.3759/12/2014
3133XYK5310090FHLB3,000,000.001003,000,000.001.658/21/2013
3133725D210095FHLB2,000,000.0099.7871,997,039.302.12512/21/2015
3133XRFL910077FHLB3,000,000.0099.9932,999,958.934.256/14/2013
3133XD6A410082FHLB3,000,000.00101.6713,012,146.784.3759/13/2013
FHLB Total32,000,000.00
3134G3HP8Inv #10108FHLMC3,000,000.001003,000,000.0011/27/20161/2
3134G3UH110110FHLMC4,000,000.001004,000,000.001.255/15/20175/15/
3128X1EJ210084FHLMC3,000,000.00101.033,006,001.094.255/22/2013
FHLMC Total10,000,000.00
3135G0KM410109FNMA3,000,000.001003,000,000.000.55/27/2015
3135G0LL510111FNMA4,000,000.00100.1394,005,553.650.5512/4/20146/
3136FRVK610105FNMA3,000,000.001003,000,000.001.57/15/20157/15/20
3136FRRR610102FNMA4,000,000.001004,000,000.0026/27/20166/27/2013
3136FPHZ310099FNMA3,000,000.0099.9092,998,111.0029/28/2015
FNMA Total17,000,000.00
Grand Total67,000,000.00
ISSUERS: FFCB = Federal Farm Credit Bank; FHLB = Federal Home Loan Bank;
FHLMC = Federal Home Loan Mortgage Corporation ("Freddie Mac"); FNMA = Federal National Mortgage Association ("Fannie Mae")
QUARTERLY INVESTMENT REPORT
Fourth Quarter Fiscal Year 2011-2012
June 30, 2012
Section II Investment Charts
QUARTERLY INVESTMENT REPORT
Fourth Quarter Fiscal Year 2011-2012
June 30, 2012
Section III
Listing of Monthly Investment Transactions
City of Dublin
Cash / Checking Activity Report
From 4/1/2012 To 4/30/2012
Transaction Interest
IssuerCommentDepositsWithdrawalsBalance
DateReceived
California Asset Management Program (CAMP)
63,529.57
California Asset Management Program LGIPInterest on account12.93 63,542.50
Subtotal and Ending Balance -- 12.93 63,542.50
Fidelity US Government Portfolio MM
7,242,114.00
Fidelity US Government Portfolio MMInterest on account4/2/201222 7,242,136.41
Fidelity US Government Portfolio MMInterest on Inv #101034/23/20 7,257,586.41
Fidelity US Government Portfolio MMInterest on Inv #101014/30/20 7,280,586.41
Subtotal and Ending Balance -- 38,472.41 7,280,586.41
LAIF
44,118,736.99
LAIFDeposit From B of A4/4/20122,260,000.00 46,378,736.99
LAIFDeposit From B of A4/18/20123,600,000.00 49,978,736.99
Subtotal and Ending Balance5,860,000.00 - - 49,978,736.99
Total5,860,000.00$ -$ 38,485.34$ 57,322,865.90$
City of Dublin
Cash / Checking Activity Report
From 5/1/2012 To 5/31/2012
Transaction Interest
IssuerCommentDepositsWithdrawalsBalance
DateReceived
California Asset Management Program (CAMP)
63,542.50
California Asset Management Program LGIPDeposit5/4/20124,500,000 4,563,542.50
California Asset Management Program LGIPDeposit5/18/20122,600,00 7,163,542.50
California Asset Management Program LGIPDeposit5/23/20121,400,00 8,563,542.50
California Asset Management Program LGIPInterest on account5/31/ 8,564,711.67
Subtotal and Ending Balance -8,500,000.00 1,169.17 8,564,711.67
Fidelity US Government Portfolio MM
7,280,586.41
Fidelity US Government Portfolio MMInterest on account5/1/201259 7,280,645.89
Fidelity US Government Portfolio MMAccrued interest inv #101095/ 7,280,062.56
Fidelity US Government Portfolio MMPurchase Inv #101095/3/2012(3 4,280,062.56
Fidelity US Government Portfolio MMPurchase Inv #101105/15/2012( 280,062.56
Fidelity US Government Portfolio MMInterest Inv #100905/21/20122 304,812.56
Fidelity US Government Portfolio MMInterest Inv #100845/22/20126 368,562.56
Fidelity US Government Portfolio MMInterest Inv #101095/29/20121 370,145.89
Subtotal and Ending Balance (7,000,583.33)- 90,142.81 370,145.89
LAIF
49,978,736.99
Subtotal and Ending Balance -- - 49,978,736.99
Total8,500,000.00$ (7,000,583.33)$ 91,311.98$ 58,913,594.55$
City of Dublin
Cash / Checking Activity Report
From 6/1/2012 To 6/30/2012
Transaction Interest
IssuerCommentDepositsWithdrawalsBalance
DateReceived
California Asset Management Program (CAMP) 8,564,711.67
California Asset Management Program LGIPInterest on account6/30/ 8,566,385.88
Subtotal and Ending Balance -- 1,674.21 8,566,385.88
Fidelity US Government Portfolio MM 370,145.89
Fidelity US Government Portfolio MMInterest on account6/1/201219 370,165.47
Fidelity US Government Portfolio MMInterest on Inv #100776/14/20 433,915.47
Fidelity US Government Portfolio MMInterest on Inv #100956/21/20 455,165.47
Fidelity US Government Portfolio MMInterest on Inv #100946/25/20 481,165.47
Fidelity US Government Portfolio MMInterest on Inv #101026/27/20 521,165.47
Fidelity US Government Portfolio MMInterest on account6/29/20122 546,165.47
Fidelity US Government Portfolio MMAccrued int inv #101116/29/20 544,637.69
Fidelity US Government Portfolio MMTransfer to LAIF6/29/2012(539 5,637.69
Fidelity US Government Portfolio MMCalled Inv #101066/29/20124,0 4,005,637.69
Fidelity US Government Portfolio MMPurchased Inv #101116/29/2012 77.69
Subtotal and Ending Balance4,000,000.00 (4,546,087.78) 176,019.58 77.69
LAIF 49,978,736.99
LAIFWithdrawal to B of A6/1/2012(4,578,736.99) 45,400,000.00
LAIFDeposit from B of A6/22/20121,400,000.00 46,800,000.00
LAIFDeposit from B of A6/29/2012539,000.00 47,339,000.00
LAIFDeposit 6/29/20122,661,000.00 50,000,000.00
LAIFInterest on account6/30/201242,407.86 50,042,407.86
Subtotal and Ending Balance4,600,000.00 (4,578,736.99) 42,407.86 50,042,407.86
Total8,600,000.00$ (9,124,824.77)$ 220,101.65$ 58,608,871.43$