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HomeMy WebLinkAboutItem 4.04 4thQtrInvsmtRept02-03CTTY CLERK AGENDA STATEMENT CZTY COUNCIL MEETING DATE: August 19, 2003 SUBJECT: City Treasurer's Investment Report For 4th Quarter 2002/2003 Report Prepared by Carole A. Perry, Administrative Services Director and Fred W. Marsh, Finance Manager ATTACHMENTS: Quarterly Investment Report (June 30, 2003) Section I - Primary Investment Portfolio Section II - Listing of Supplemental Monies Under City N~ ~~Rece Possession and/or Control RECOMMENDATIO ive Report DESCRIPTION: The attached InVestment Report details the City's investmentS as of June 30, 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 fourth quarter of Fiscal Year 2002/2003 are discussed in the staff report below. INVESTMENT ACTIVITY IN FOURTH QUARTER FISCAL YEAR 2002/2003 During the Fourth Quarter six investments were called due to the decline in interest rates that occurred during the quarter. They are summarized in the table below: INVESTMENTS MATURED OR CALLED FOURTH QUARTER FISCAL YEAR 2002/2003 TYPE AMOUNT MATURITY YIELD Called Federal Securities FNMA $1,000,000 12/20/2004 3.800% FHLB $6,500,000 12/27/2004 3.815% FFCB $6,000,000 12/27/2004 2.350% FNMA $4,000,000 2/28/2006 2.875% FHLB $4,000,000 12/6/2006 3.320% FNMA $6,000,000 3/6/2008 4.000% The City received the full face amount of the investments that were called plus any accrued interest. Of the total listed above, approximately $12.5 million of these instruments were called between June 27th and June 30th, 2003. The proceeds from these investments were temporarily placed in the Nations and Union Bank Government Securities money market accounts and will be invested in U.S. Government Securities during the first quarter of Fiscal Year 2003-2004. COPIES TO: G:\Investments\March 2003XAgenda staff report~.doc ITEM NO. The remaining proceeds from called investments listed above, along with other available funds, were used to purchase three new securities during the period, as summarized in the table below: INVESTMENTS PURCHASED FOURTH QUARTER FISCAL YEAR 2002/2003 CALL TYPE AMOUNT MATURITY YIELD DATE FEDERAL SECURITIES FHLB $5,000,000 6/30/2006 2.250% 9/30/03 FHLB $9,000,000 6/24/2008 3.100% 12/24/03 FHLB $1,000,000 6/30/2008 3.200% 9/30/03 In the most recent quarter the average maturity for the Federal Security portion of the portfolio increased to 3.4 years, due to the purchase of the longer term securities listed 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 investrflents, which are deemed sufficient to meet cash flow needs. DETAILED LISTING OF PRIMARY PORTFOLIO Government and Agency Securities represent 32% 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 June 30, 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 received $65,344 in dividends fi.om this investment, resulting in an annualized yield of 4.098%. 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 June 30, 2003 by source. Comparison information is also shown for the previous quarter. Note that 35% 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 General Fund Restricted - Special Revenue Funds (I.e. Gas Tax, Special Taxes) Restricted - Assessment District Funds (i.e. Landscape Maint & Debt Service) Restricted - Impact Fees Internal Service / Replacement Funds TOTAL Current Quarter 6/30/2003 % of Balance Total $46,136,452 52% $3,097,043 ,4% $662,426 1% $30,250,010 35% $6,967,190 8% $87,113,121 100% Prior Quarter 3/31/2003 % of Balance Total $49,318,805 54% $4,883,271 5% $563,519 1% $30,683,220 33% $6,745,523 7% $92,194,338 100% CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT The total amount shown as invested in the Primary Investment Portfolio is $5,081,217 less than the amount shown at March 31, 2003, primarily due to payments made for public safety services and various capital projects during the quarter. Overall, the combined rate for the total portfolio decreased from 2.866% at March 31, 2003 to 2.194% at June 30, 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 1.77% as of June 30, 2003, which was lower than the 1.98% rate recorded for the quarter ending March 31, 2003. LAIF is a liquid investment, and the current LAIF 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 4th QUARTER FY 2002-2003 SECTION 1 PRIMARY INVESTMENT PORTFOLIO CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN June 30, 2003 INVESTMENT 1ST CALL DATE COUPON BOOK AND MATURITY VALUE AT INTEREST CURRENT MARKET DATE MATURITY RATE YIELD VALUE FEDERAL SECURITIES FHLB FNMA FHLB FHLB 7/18/03 FHLB 9/30/03 FHLMC FFCB FHLB FHLB 12/24/03 FHLB 9/30/03 TOTAL FEDERAL SECURITIES 9/2/2003 1 1,000,000 5.627% 5.580% 1,007,810 11/14/2003 1 1,000,000 4.750% 4.690% 1,013,750 12/15/2004 2 3,000,000 3.875% 3.730% 3,114,390 7/18/2005 3 3,000,000 5.220% 5.210% 3,006,570 6/30/2006 3 5,000,000 2.250% 2.240% 5,014,050 1/3/2007 4 500,000 6.525% 5.670% 575,470 1/23/2007 4 421,000 4.600% 4.240% 456,916 2/15/2007 4 4,000,000 4.875% 4.450% 4,380,000 6/24/2008 5 9,000,000 3.100% 3.080% 9,064,710 6/30/2008 5 1,000,000 3.200% 3.180% 1,005,000 $27,921,000 3.639% $28,638,666 MUTUAL FUNDS Nations Bank Government Reserves Capital Fund Union Bank U.S. Govt Securities Morgan Stanley Dean Witter U.S. Govt Securities TOTAL MUTUAL FUNDS $17,000 1.080% $17,000 $16,962,517 0.630% $16,962,517 See Note 1 4.098% (2) $1,694,938 0.928% $18,674,455 POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAIF) $39,800,000 1.770% $39,800,000 TOTAL INVESTED PORTFOLIO 2.194% $87,113,121 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) Maturing in 1 year or less Maturing in 1-2 years Maturing in 2-3 years Maturing in 34 years Maturing in 4-5 years Total Portfolio $58,474,455 67% $2,021,560 2% $3,114,390 4% $8,020,620 9% $5,412,386 6% $10,069,710 12% $87,113,121 100% 8/7,2003 12:14PM ITEM 1 CITY OF DUBLIN SUMMARY OF INVESTMENT PORTFOLIO COMPARISON BY INVESTMENT TYPE June 30, 2003 TYPE OF INSTRUMENT Federal Home Loan Bank (FHLB) Federal Farm Credit Bureau (FFCB) Federal National Mortgage Assn (FNMA) Federal Home Loan Mortgage Corporation (FHLMC) SUB -TOTAL GOVT/AGENCY Mutual Funds Morgan Stanley Dean Witter U.S. Govt Securities Union Bank U.S. Govt Securities Nations Bank Government Reserves Capital Fund BOOK AND MARKET % OF MATURITY FACE VALUE VALUE PORTFOLIO YEARS 26,000,000 26,592,530 30.1% 3.5 421,000 456,916 0.5% 3.6 1,000,000 1,013,750 1.2% 0.4 500,000 575,470 0.6% 3.5 27,921,000 28,638,666 O) 32.4% 3.4 1,594,497 1,694,938 16,962,517 16,962,517 1.8% N/A 19.7% N/A 17,000 17,000 0.0% N/A LAIF 39,800,000 39,800,000 46.1% GRAND TOTAL $86,295,0,14 $87,113,121 100.0% NOTES: N/A (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. 8/5/20035:10PM ITEM 2 CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 4th QUARTER FY 2002-2003 SECTION 11 LIST1NG 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 June 30, 2003 In accordance with the California Govemment 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-Categorized - Cash Cash Registers/Petty Cash - City Petty Cash - Shannon Center Subtotal Balance 6/30/2003 $975.00 $200.00 $1,175.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With California Government Code Balance 6/30/2003 $2,476,260 Annualized Rate of Interest .5% NATIONS BANK U.S. Treasury Reserves Adviser Account (Sweep Account connected to Bank of America Deposits listed above) $2,900,563 .8145% Cai Fed- Regular Savings Account: FDIC Insured $586 .5% Grand Total Amount Cash Balances: $5,377,409 SPECIAL FUNDS HELD BY TRUSTEES CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN FOR THE QUARTER ENDING JUNE 30, 2003 · MUTUAL FUNDS Dublin Blvd Assessment District First American Govt Obligation Fund COUPON MATURITY VALUE AT INTEREST DATE MATURITY RATE YIELD BOOK VALUE MARKET VALUE See Note 1 0.57% $172,312 $172,312 NOTES: (1) A Mutual Fund does not have a stated maturity date and shares can be sold at any time.