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Home My WebLink About4.03 CityTreasRpt 3rd Qtr CITY CLERK File # [--~ ~1 6~ -~-][~--~ AGEN DA STATEMENT CITY COUNCIL MEETING DATE: May 6, 2003 SUBJECT: City Treasurer's Investment Report For 3rd Quarter 2002/2003 Report Prepared by Carole A. Perry, Administrative Services Director and Fred Marsh, Finance Manager ATTACHMENTS: Quarterly Investment Report (March 31, 2003) Section I - Primary Investment Portfolio Section II - Listing of Supplemental Monies Under City Possession and/or Control RECOMMENDATION:~ /~Receive Report DESCRIPTION: The attached Investment Report details the City's investments as of March 31, 2003, 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. 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 2002/2003 are discussed in the staff report below. INVESTMENT ACTIVITY IN THIRD QUARTER FISCAL YEAR 2002/2003 During the Third Quarter four investments matured or were called due to the decline in interest rates that occurred during the quarter, as summarized in the table below: INVESTMENTS MATURED OR CALLED THIRD QUARTER FISCAL YEAR 2002/2003 TYPE AMOUNT MATURITY YIELD Matured Federal Securities FHLB $1,000,000 2/14/2003 7.000% Called Federal Securities FHLB $3,000,000 2/14/2005 3.250% FHLB $5,000,000 1/17/2006 5.420% FHLB $3,000,000 8/14/2006 4.000% The City received the full face amount of the investments that were called plus any accrued interest. The proceeds from these investments, along with other available funds, were temporarily placed in the Nations and Union Bank Government Securities money market accounts. The proceeds from these investments, along with other available funds, were used to purchase three new securities during the period, as summarized in the table below: COPIES TO: G:\Investments~dVIarch 2003XAgenda staff report3.doc ITEMNO. 4~ ~ INVESTMENTS PURCHASED THIRD QUARTER FISCAL YEAR 2002/2003 CALL TYPE AMOUNT MATURITY YIELD DATE FEDERAL SECURITIES FNMA $4,000,000 2/28/2006 2.875 % 5/28/03 FHLB $4,000,000 12/6/2006 3.320% 6/6/03 FNMA $6,000,000 3/6/2008 4.000% 3/6/2008 In the most recent quarter the average maturity for the Federal Security portion of the portfolio increased to 2.8 years, due to the purchase of the longer term securities noted above. It is important to note that this relates solely to the portion of the portfolio that has investments with a stated term. The City maintains adequate funds in more liquid investments, which are deemed sufficient to meet cash flow needs. DETAILED LISTING OF PRIMARY PORTFOLIO Government and Agency Securities represent 44% of the Primary Portfolio. A detailed listing of each security is provided in Item 1. The market value of Federal Securities can fluctuate daily and values have been provided as reported by Union Bank of California as of March 31, 2003. 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 need to be called by the City prior to maturity. The Morgan Stanley Dean Witter US Government Securities Mutual Fund Investment represents 2% of the City's total portfolio. During the 2002-2003 Fiscal Year the City has received to date $50,157 in dividends from this investment, resulting in an annualized yield of 4.194%. Since October 1999, the mutual fund may be redeemed without sales charges. COMPOSITION OF PORTFOLIO - SOURCE OF FUNDS To provide an overview of the portfolio, the table below shows the total investment balance as of March 31, 2003 by source. Comparison information is also shown for the previous quarter. Note that 33% of the investment balance represented restricted Impact Fee Funds. It is important to keep in mind that this type of report is merely a snapshot on a particular day. Revenues as well as expenditures are not processed in equal monthly installments. PORTFOLIO COMPOSITION BY SOURCE OF FUNDS Current Quarter Prior Quarter 3/31/2003 % of 12/31/2002 % of Balance Total Balance Total General Fund $49,318,805 54% $41,386,178 46% Restricted - Special Revenue Funds $4,883,271 5% $3,891,054 4% (I.e. Gas Tax, Special Taxes) Restricted - Assessment District Funds $563,519 1% $629,857 1% (i.e. Landscape Maint & Debt Service) Restricted - Impact Fees $30,683,220 33% $37,622,792 42% Internal Service / Replacement Funds $6,745,523 7% $6,659,639 7% TOTAL $92,194,338 100% $90,189,520 100% CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT The total amount shown as invested in the Primary Investment Portfolio is $2,004,818 more than the amount shown at December 31, 2002, primarily due to sales tax advances received during the quarter. Overall, the combined rate for the total portfolio decreased fi.om 3.057% at December 31, 2002 to 2.866% at March 31, 2003. The decrease was attributable to the calling of the federal securities noted above, a decrease in the rate of return on the City's LAIF investments operated by the State Treasurer, as well as a decline in the rate of return on money market funds during the quarter. The quarterly average for the City's LAIF investment was 1.98% as of March 31, 2003, which was lower than the 2.31% rate recorded for the quarter ending December 31, 2002. LAIF is a liquid investment, and the current LAW rate remains favorable compared to rates offered on investments, which have less flexibility. 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. CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 3rd QUARTER FY 2002-2003 SECTION 1 PRIMARY INVE S TMENT PORTFOLIO CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN March 31, 2003 COUPON BOOK AND MATURITY VALUE AT INTEREST MARKET INVESTMENT 1ST CALL DATE DATE MATURITY RATE YIELD VALUE FEDERAL SECURITIES FHLB 9/2/2003 1 1,000,000 5.627% 6.910% 1,018,750 FNMA 11/14/2003 1 1,000,000 4.750% 6.920% 1,021,880 FHLB 12/15/2004 2 3,000,000 3.875% 4.240% 3,112,500 FNMA 6/27/03 12/20/2004 2 1,000,000 3.800% 3.800% 1,006,250 FHLB 6/27/03 12/27/2004 2 6,500,000 3.815% 3.815% 6,538,610 FFCB 6/27/03 12/27/2004 5 6,000,000 2.350% 2.350% 6,015,000 FHLB 7/18/03 7/18/2005 3 3,000,000 5.220% 5.220% 3,034,680 FNMA 5/28/03 2/28/2006 3 4,000,000 2.875% 2.875% 4,006,240 FHLB 6/6/03 12/6/2006 4 4,000,000 3.320% 5.220% 4,015,000 FHLMC 1/3/2007 4 500,000 6.525% 5.200% 570,940 FFCB 1/23/2007 4 421,000 4.600% 5.200% 450,735 FHLB 2/15/2007 4 4,000,000 4.875% 5.140% 4,322,520 FNMA 6/6/03 3/6/2008 5 6,000,000 4.000% 4.000% 6,033,780 TOTAL FEDERAL SECURITIES $40,421,000 4.123% $41,146,885 MUTUAL FUNDS Nations Bank Government Reserves $5,390,000 1.170% $5,390,000 Capital Fund Union Bank U.S. Govt Securities $4,035,981 0.790% $4,035,981 Morgan Stanley Dean Witter U.S. Govt Securities See Note 1 4.194% (2) $1,687,764 TOTAL MUTUAL FUNDS 1.468% $11,113,745 POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAIF) $39,933,708 1.980% $39,933,708 TOTAL INVESTED PORTFOLIO 2.866% $92,194,338 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. (2) Interest Rate shown is based on dividends received this fiscal year to date, which are annualized and then divided by the original investment. Maturity Schedule Summary of Portfolio (Assuming None of Securites are called prior to Maturity) Money Market Funds/LAIF (1 day liquidity) $51,047,453 55% Maturing in 1 year or less $2,040,630 2% Maturing in 1-2 years $10,657,360 12% Maturing in 2-3 years $7,040,920 8% Maturing in 3-4 years $9,359,195 10% Maturing in 4-5 years $12,048,780 13% Total Portfolio $92,194,338 100% ITEM 1 CITY OF DUBLIN SUMMARY OF INVESTMENT PORTFOLIO COMPARISON BY INVESTMENT TYPE March 31, 2003 BOOK AND MARKET % OF MATURITY TYPE OF INSTRUMENT FACE VALUE VALUE PORTFOLIO YEARS Federal Home Loan Bank (FHLB) 21,500,000 22,042,060 23.5% 2.5 Federal Farm Credit Bureau (FFCB) 6,421,000 6,465,735 7.0% 1.9 Federal National Mortgage Assn (FNMA) 12,000,000 12,068,150 13.1% 3.6 Federal Home Loan Mortgage Corporation (FHLMC) 500,000 570,940 0.5% 3.8 SUB -TOTAL GOVT/AGENCY 40,421,000 41,146,885 0) 44.2% 2.8 Mutual Funds Morgan Stanley Dean Witter U.S. Govt Securities 1,594,497 1,687,764 (z) 1.7O/o N/A Union Bank U.S. Govt Securities 4,035,981 4,035,981 4.4% N/A Nations Bank Government Reserves Capital Fund 5,390,000 5,390,000 5.9% N/A LAIF 39,933,708 39,933,708 43.8% N/A GRAND TOTAL $91~375,186 $92,194,338 100.0% NOTES: (1) The City intends to hold the investments until maturity or until market values equal or exceed their face value. (2) 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. ITEM 2 CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 3rd QUARTER FY 2002-2003 SECTION 11 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, 2003 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 Non-Categorized - Cash 3/31/2003 Cash Registers/Petty Cash - City $950.00 Petty Cash - Shannon Center $200.00 Subtotal $1,150.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS Balance 3/31/2003 Annualized Rate of Interest BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With $12,435 .5% California Government Code NATIONS BANK U.S. Treasury Reserves Adviser $3,575,362 .9358% Account (Sweep Account connected to Bank of America Deposits listed above) Cai Fed- Regular Savings Account: FDIC Insured $2,584 .75% Grand Total Amount Cash Balances: $3,590,381 SPECIAL FUNDS HELD BY TRUSTEES CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN FOR THE QUARTER ENDING MARCH 31, 2003 COUPON MATURITY VALUE AT INTEREST BOOK MARKET DATE MATURITY RATE YIELD VALUE VALUE MUTUAL FUNDS Dublin Blvd Assessment District First American Govt Obligation Fund See Note 1 0.82% $171,883 $171,883 NOTES: (1) A Mutual Fund does not have a stated maturity date and shares can be sold at any time.