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Home My WebLink AboutItem 4.04 CT InvestRpt 12-31-1995 (2) .. .. CITY CLERK File # D[3][2][Q]-[3][Q] .-,- AGENDA STATEMENT CITY COUNCIL MEETING DATE: (January 9,1996) SUBJECT: City Treasurer's Investment Report: December 31,1995 Report Prepared by: Paul S. Rankin, Assistant City Manager EXHIBITS ATTACHED: ~ J Listing of Investments as of December 31,1995 RECOMMENDATION: ~\V Receive Report DESCRIPTION: The attached listing details the City's investments as of December 31, 1995. The total amount shown as invested is approximately $ 3.799 million more than the amount shown at the end of the previous month. Several factors have contributed to this increase. First, in the month of December the City receives its first major advance of property tax revenues and fees collected by Alameda County. Also, approximately $ 516,000 of payments were processed at the end of the month, however, the release of the payments did not occur until after the New Year's holiday. INVESTMENT ACTIVITY IN DECEMBER Investment activity increased significantly in December due to the economic changes affecting the market interest rates for Federal Agency Securities. Due to a decline in interest rates, the Federal Agencies were calling several securities. The following securities held by the City of Dublin were called in the month of December: . SECURITIES CALLED IN DECEMBER 1995 Security Face Amount Original Maturity Date First Callable Date Called Interest Rate FHLB $500,000 12/20/96 12/20/95 12/20/95 7.900% FHLMC $500,000 6/16/97 12/16/95 12/15/95 6.440% FHLMC $500,000 6/20/97 .. 12/20/95 12/27/95 6.190% In addition the City had a one year $ 99,000 Certificate of Deposit (CD) at Home Savings & Loan, which matured on December 8, 1995. The account previously earned an annual interest rate of 7.05%. The changing interest rate environment made it impossible to achieve the previous interest rate yields on replacement Federal Securities. This effort was also limited by the desire to maintain all maturities prior to February 1, 1999. In the case of Federal Agency Securities the new issues often contained only three month or six months of call protection. The Agencies were protecting against further interest rate reductions by the Federal Reserve in the near term. The City did place new investments during the month of December to replace both the called investments as well as the . matured CD. In addition, an additional one year $99,000 CD was placed at Sanwa Bank. The " ,: following Table summarizes the Investments completed in December: ------------------------------------------------------------------- COPIES TO: ITEM NO. AA G\agenda \agend psr.dot INVESTMENT TRANSACTIONS COMPLETED DECEMBER 1995 . .. TYPE AMOUNT MATURITY CALLABLE INTEREST RATE FDIC Insured CD $ 99,000 12/6/96 N/A 5.53% Home Savings & Loan FDIC Insured CD $ 99,000 12/9/96 N/A 5.53% Sanwa Bank Federal Farm Credit Bank $ 500,000 12/18/98 12/18/96 5.85% (FFCB) Federal Home Loan Bank $ 500,000 12/29/98 6/29/96 5.95% (FHLB) Federal National Mortgage Assn $ 500,000 12/30/98 12/30/96 5.89% (FNMA) . All of the Federal Securities purchased have a stated maturity of three years. All three securities were bought at face value and they were original issues. Two of the securities have a full twelve months of call protection (FFCB Note and FNMA Note). The FHLB note only has 6 months of call protection. When these securities are called the City receives the full face amount plus any accrued interest. Provided that the Federal Securities are not called, the maturity date will correspond well with the proposed goal to payoff outstanding Civic Center Certificates of Participation in February of 1999. This is the first date that the outstanding COP's can be called without a premium. The Certificates of Deposit are fully insured and were both invested for a term of one year. The Home Savings CD was negotiated as a renewal of a maturing CD. The Sanwa investment . represents a new investment. .' ',: CHANGES IN THE TOTAL PORTFOLIO EARNINGS Overall, the combined rate for the total portfolio decreased from 5.862% in November to 5.776% in the month of December. The change was primarily attributable to the lower interest rate received on those investments obtained to replace the securities which either matured or were called. Specific changes included: I)The portion of the City portfolio invested in Federal/Agency Securities decreased from 5.819% in November to 5.711 % in December. 2)The City had a larger portion of the total portfolio invested in LAIF than in the previous month.(November: LAIF Represented 24.5% of the Portfolio vs. LAIF Represented 36.0% of the Portfolio at December 31, 1995) 3)A small decrease was reported in the yield calculated on the Dean Witter Mutual Fund investment (November at 6.458% vs. December at 6.432%). 4) A small decrease in the LAIF rate as discussed below. The LAIF quarterly average was 5.77% as of December 27, 1995, which is slightly less than the 5.79% rate recorded in the month of November. For reporting purposes this report includes the Quarterly Rate, since this is how the interest is calculated and paid. In general, interest rates have stabilized and most projections suggest that there will be a decline in the LAIF rate in the upcoming months. As a liquid investment the current LAIF rate remains very favorable compared to rates offered on investments which have less flexibility. The schedule of investments including the dates of maturity is anticipated to allow the City to meet, anticipated expenditures in the upcoming month. .' _ .. .' e:- e City of Dublin City Treasurer's Listing oflnvestmenls as of December 31, 1995 111is listing excludes Dublin Boulevard Extension Assessment District and COP reserve fund balances which arc held by third party Trustees and invested in accordance with the financing legal documents, TYPE OF INVESTMENT POOLED INVESTMENTS 36.0% orTolal Portfolio I2a.t.t MATURITY Ya.I.J.Lc... State of California LA IF MUTUAL FUND Dean Winer Reynolds V.S, Govt Securities $8,700,000.00 7.0% of Total Portfolio (2) (2) CERTIFICATES OF DEPOSIT 2.8% of Total Portfolio Home Savings of America Sanwa Bank California World Savings Fremont Invesnnent & Loan Standard Pacific Savings First Republic T & L Southern California FS & L 12106/96 12/09/96 1/29/98 7/30/98 7/30/98 9/l4/98 9/14/98 $99,000,00 S99,OOO.00 SIOO,OOO.OO $99,000,00 $99,000.00 S95,OOO.00 S98 000 00 $689,000,00 GOVERNMENT/AGENCY SECURITIES (5) 54.2% of Total Portfolio Bank of California(Safekeeping) FHLB FHLB U S Treasury Note FFCB (Callable 3/03/95) FNMA FNMA(Callable 6/17/96) FNMA (Callable I IIOI/96) FNMA (Callable 5/13/96) FHLMC(Callable 9/09/94) FNMA (Callable 10/15/96) V S Tre/lSury Note FHLB (Callable I II03/94) FNMA (Callable 12/10/96) FFCB (Callable 12118/96) FHLB (Callable 6/29/96) FNMA (Callable 12130/96) FHLB (Callable III2/95) FNMA (Callable 2/12/96) 5/20/96 8/26/96 2115/97 3/03/97 6/10/97 6/17/97 5/01/98 5/13/98 9/09/98 10/15/98 10/3 II98 1 II03/98 12/10/98 12/18/98 12129/98 12130/98 III 2199 2/12199 R& INVESTMENT .G.Il.S1 fu.ld $8,700,000.00 (1) 5,770% $1,699,995,50 (3) 6.432% (4) 5.450 5.450 6.010 5.560 5.200 5,250 5.250 $99,000.00 $99,000.00 $100,000,00 $99,000,00 S99,OOO.00 $95,000.00 S98 000 00 $689,000,00 5.530% 5.530% 6,010% 5.560% 5,200% 5.250% ~ 5.478% $500,000.00 6.200 $500,000.00 6,200% $490,000.00 7.700 $490,000.00 7.700% S500,OOO.00 4.750 S492,741.79 5,724% $500,000,00 5.120 $497,743.00 5.420% $1,205,000.00 9,200 $ 1,243,000.00 7.066% $500,000.00 6.190 $500,000.00 6.190% $500,000,00 6,030 $500,000,00 6,030% $500,000.00 5.250 $497,125,00 5.482% $500,000.00 4.950 $498,906,24 5.020% $1,000,000.00 4.875 $999,588.57 4,889% $1,000,000,00 4.750 $990,046.88 5.101% SI,OOO,OOO.OO 5.110 SI,OOO,OOO.OO 5.110% $1,000,000.00 5.310 $999,679,67 5.311% S500,OOO.00 5.850 $500,000.00 5.850% S500,OOO.00 5.950 $500,000.00 5.950% S500,000.00 5.890 $500,000.00 5,890% $2,000,000,00 5.460 $2,000,000.00 5.460% $400 000 00 5.550 $399.820,85 .liQlli $13,095,000.00 $13,108,652.00 5.711% $24 197.647.50 5 776% TOTAL INVESTMENTS - PER BOOKS ~ (I) Inte"'st rale shown is quarterly average lIS of December 27, 1995, (2) As a mutual fund ;nvesunenl this invesunent can be liquidaled al any given time, however the asset value will nuetuotc based upon the eurrenl market rale, The invesunent strategy assumes thot.pproximately $t million will be held through July t, 1999, and $699,995 through October 1,1999, withoula deferred sales charge. Current markel value is stated in 113 below, (3) Market value as of December 29, 1995, based upon original ,hares invested plus liseal year to date dividends is $1,704,714. The morkel value would also be ./Teeted by deferred .ales charges if the Invesunent were liquidated prior to the dales staled in nole (2), , (4) The yield On a mutual fund nueluates with the share price of shares eurrenlly held. The yield presented is an annualized amount based upon O,e previous twelve months of dividends at the share price as of December 29, 1995, divided hy the original cosL (5) Federal Home Loan Bank (FHLB), Federal Farm C",dit Bureau (FFCB), Federal Nalional Mortgage Associ.tion (FNMA), and Federal Home Loan Mortgage Corp (FHLMC) an: lawful investments for local governmental agencies,