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HomeMy WebLinkAboutItem 4.3 Treasurer's Report 10-31-1991 eft, CITY OF DUBLIN AGENDA STATEMENT MEETING DATE: November 12,1991 SUBJECT :City Treasurer's Investment Report as of October 31 , 1991 EXHIBITS ATTACHED:City Treasurer's Investment Report prepared by Phillip S. Molina. RECOMMENDATION td Accept the Treasurer's Investment Report. Attached is the Investment detail list as of October 31, 1991. The report shows that the City's investment portfolio totals $15, 176,000. This is a decrease of $89,311.26 in amounts invested when compared to the City's investments of last month. During the month of October, twenty investment instruments matured totalling $2,283,000. Due to the poor terms provided for reinvesting in similar instruments, it was determined that a temporary shifting of this cash into LAIF would provide higher interest rates, instant liquidity, and safety. The amount added to LAIF totalled $2,200,000, and the difference between the amount maturing and the amount reinvested was used to satisfy the cash requirements of the City during that same time period. The act of changing the make up of the portfolio poised the City to be ready for a turn around of the terms on quality instruments and also provided for the highest interest rates available for the maturity requirements. When investments mature a market survey is prepared to show the rates available from various institutions for various future maturity dates. [The market survey includes information on the institutions surveyed, which is used to help define the quality of the institution being considered. This information comes from statements that financial institutions are required to submit quarterly to the Federal Reserve Board and The Federal Home Loan Bank Board. ] During the process of contacting various financial institutions in October, it became evident that a growing number of institutions were simply not selling their investment instruments to government funds. The market surveys produced reinvestment rates ranging from 5.25% for a one year maturity to 7.05% for a five year instrument purchased in October. When compared to the 6.86% (the average LAIF interest rates in October) LAIF interest rate offered for instruments with instant liquidity during ': the month, it was determined that a temporary shift of investment instruments was prudent. Last month the Treasurer increased the diversity of the portfolio by purchasing more Federal Agency notes and debentures. Currently the City has purchased $1,490,000 of Federal agency notes and debentures with maturity periods of 5 years, which is the maximum maturity allowed by law, at rates approaching 8%. These instruments represent almost 10% of the portfolio. Higher interest rates on Federal Agency instruments can be achieved if the Council approved an investment maturity exceeding 5 years on Federal Agency instruments. Note that the rate of interest on investments in the Local Agency Investment Fund (LAIF) is calculated on a monthly rolling average. The rate identified for that investment was effective for the moving quarter average ending October 31, 1991. The Fund pays interest once a quarter. It is managed by the State Treasurer's Office. The advantage in using this investment mechanism is that there is no minimum investment period, and the interest earned is determined by the length of time the deposit remains in the fund during any given quarter period. The maturity schedule of the City's investments will permit the City to meet its expenditure requirement for the following month. O. ♦ CITY CLERK FILE 1,3 ITFOH31 City of Dublin City Treasurer's Investment Report October 31 , 1991 interest Institution Type of Amount rate of maturity Investment invested investment date State Treasurer LAIF $12,690,000.00 * 6.715 0 0 0 1 71011 . 13 American Internatnl Bc-d $100,000.00 6.250 11 20 91 2 520.83 Standard Pacific c-d $99,000.00 6.350 11 25 91 3 523.88 Sequoia Nation Bank c-d $100,000.00 6.500 12 24 91 4 541 .67 Guardian S&L c-d $99,000.00 7.750 1 29 92 5 639.38 Plaza S&LA c-d $99,000.00 6.500 2 18 92 6 536.25 Countrywide T&L fdic c-d $100,000.00 7.300 2 28 92 7 608.33 First Fed Bank c-d $99,000.00 6.850 3 19 92 8 565.13 Bank of Calif FNMAY(4) $500,000.00 8.000 4 10 96 9 3333.33 Bank of Calif.FNMAY Debent. (4) $500,000.00 8.000 4 10 96 10 3333.33 City Natn'l BK FNMAY Debent. (4) $300,000.00 8.000 4 10 96 11 2000.00 Bank of Ca(FHLB Debentures) $490,000.00 7.700 8 26 96 12 3144. 17 CURRENT AMT INVESTED $15,176,000.00 PRIOR PERIOD INVESTED $15,265,311 .26 86757.42 increase(decrease) ($89,311 .26) weighted average yield next month 6.860% footnotes 1 .and 3. United States Treasury Securities are fully guaranteed by the U.S. Government. 2. The Federal Home Loan bank consolidated bonds are lawful investments for all fiduciary, trust, and public funds including those under the control of the U.S. Government. 4. FNMAY stands for the Federal National Mortgage Association. Obligations issued by FNMAY debentures are lawful investments and may be accepted as securities for fiduciaries, trusts, and public funds." 5. * = current transactions, but does not show terminated accounts.