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HomeMy WebLinkAboutItem 4.06 CT InvestRpt 1996-97 (2) f~' CITY CLERK File # DL3J~[QJ-!aJ[QJ :,. AGENDA STATEMENT CITY COUNCIL MEETING DATE: (January 21,1997) SUBJECT: _ Il/ City Treasurer's Investment Report For 2nd Quarter 96/97 f/JJ1. - Report Prepared by: Paul S. Rankin, Assistant City Manager EXHIBITS ATTACHED: Quarterly Investment Report (December 31, 1996) Section 1- Primary Investment Portfolio _ Section II- Listing of Supplemental Monies Under City /I 1 ~ Possession and/or Control RECOMMENDATION:' V/v Receive Report D ESCRIPTI 0 N: The attached Investment Report details the City's investments as of December 31, 1996, in accordance with the Local Agency Investment Guidelines established by the State Treasurer. Section I of the Report focuses on the principle 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 second quarter of Fiscal Year 1996/97 are discussed in the staff report below. '. INVESTMENT ACTIVITY IN SECOND QUARTER FISCAL YEAR 1996/97 During the second quarter of the 1996-97 fiscal year,' two investments matured. Certificates of Deposits (CDs) at Home Savings of America and Sanwa Bank of California (both in the amount of $99,000 with coupon rates of 5.45%) matured on 12/6/96 and 12/9/96 respectively. Both CDs were reinvested at the same institutions for the same amount, as detailed on the table below. In addition, a Federal Home Loan Bank (FHLB) security for $1,000,000 with a coupon rate of 6.625% was called on December 17, 1996. The security had a maturity date of December 17, 1998 and was callable one time on December 17, 1996. The proceeds from this security, along with additional funds received during the period, were used to purchase two securities totaling $1,500,000, as summarized on the table below: INVESTMENTS PURCHASED SECOND QUARTER FISCAL YEAR 1996/97 ". '. ".' CALL INTEREST TYPE AMOUNT MATURITY DATE RATE Certificates of Deposit: Home Savings of America $99,000 10/1/97 N/A 5.450% Sanwa Bank of California $99,000 12/7/97 N/A 5.600% Federal Securities: Student Loan Market Association (SLMA) $500,000 12/18/98 12/18/97 5.800% Federal Home Loan Mortgage Corp (FHLMC) $1,000,000 12/24/98 12/24/97 6.000% COPIES TO: ITEM NO. 4.6 . The two securities were purchased at face value and are callable, which means that they can be called by . the issuer prior to the stated maturity date. Both of the federal securities listed above are allowed under the City's current investment policy. The first option for an early call on the two securities is in December of 1997. Thereafter, the FHLMC security can be called with 12 days notice and the SLMA can e.. be called with 5 days notice. If either security is called prior to the stated maturity date, the City receives .... the full face amount plus any accrued interest. Both investments mature prior to the Civic Center COP early call date of February 1, 1999. DETAILED LISTING OF PRIMARY PORTFOLIO Government and Agency Securities represent the largest portion of the Primary Portfolio. A detailed listing of each security is provided along with a summary by type of investment. The market value of Federal Securities can" fluctuate daily and values have been provided as reported by Union Bank of California for December 31, 1996. 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 and it is not anticipated that these funds will need to be called upon prior to their stated maturity dates. The Dean Witter Mutual Fund Investment represents approximately 6.3% of the City's total portfolio. The book value reported is based upon the original cost of shares. In Fiscal Year 1996/97 the City has elected to receive its dividend shares on a monthly basis. During the first and second quarters the City received approximately $51,114 in dividends from this investment. CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT The total amount shown as invested in the Primary Investment Portfolio is approximately $ 3,145,508 more than the amount shown at September 30, 1996. Approximately 84% of this change relates to an .. increase in the balance retained in the Local Agency Investment Fund (LAIF).. This reflects the receipt of property tax revenues in the month of December. Overall, the combined rate for the total portfolio decreased slightly from 5.748% at September 30, 1996 to 5.699% at December 31, 1996. The change was related primarily to an decreased yield in the rate paid by the Local Agency Investment Fund (LAIF) and the redemption of the FHLB security, which had a yield of 6.625%. The replacement investments had a yield which was lower than this amount. The LAIF quarterly average was 5.595% as of December 31, 1996, which is lower than the 5.670% rate recorded for the quarter ending September 30, 1996. LAIF is a liquid investment, and the current LAIF rate remains very favorable compared to rates offered on investments which have less flexibility. The City Treasurer believes that the schedule of investments including the dates of maturity, contain adequate cash flow liquidity to meet anticipated expenditures over the next six months. e '..~'. ." - . . . .'. . . . .' .". - t~..... t..- } . . .. . CITY OF DUBLIN QUARTERLY INVESTMENT REPORT SECTION I PRIMARY INVESTMENT PORTFOLIO CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN . FOR THE QUARTER ENDING DECEMBER 31,1996 COUPON MATURITY VALUE AT INTEREST BOOK MARKET INVESTMEl\'T DATE MATURITY RATE YIELD VALUE VALUE U.S. Treasury Note 2/15/97 $500,000.00 4.750% 5.724% $496,092.37 $499,220.00 FFCB (Callable 3/3/95) 3/3/97 $328,571.43 5.120% 5.420% $329,238.18 $328,469.57 FNMA 6/10/97 $1,205,000.00 9.200% 7.660% $1,209,750.00 $1,224,207.70 FHLMC (Callable 2/26/97) 2/26/98 $500,000.00 5.100% 5.100% $500,000.00 $495,940.00 FNMA (Callable 1111196) 5/1198 $500,000.00 6.030% 6.030% $500,000.00 $500,090.00 FNMA (Callable 5/13/96) 5/13/98 $500,000.00 5.250% 5.482% $497,875.00 $495,155.00 FHLMC (Callable 9/9/94) 9/9/98 $500,000.00 4.950% 5.020% $499,152.33 $491,405.00 FNMA (Callable 10/15/96) 10/15/98 $1,000,000.00 4.875% 4.889% $999,682.32 $981,880.00 U.S. Treasury Note 10/31198 $1,000,000.00 4.750% 5.101% $992,343.76 $980,625.00 FHLB (Callable 11/3/94) 1113/98 $1,000,000.00 5.110% 5.110% $1,000,000.00 $985,810.00 FNMA (Callable 12/10/96) 12/10/98 $1,000,000.00 5.3 10% 5.311% $999,749.99 $988,130.00 SLMA (Callable 12118/97) 12/18/98 $500,000.00 5.800% 5.800% $500,000.00 $498,075.00 FFCB (Callable 12118/96) 12/18/98 $500,000.00 5.850% 5.850% $500,000.00 $498,620.00 FHLMC(Callable 12/24/97) 12/24/98 $1,000,000.00 6.000% 6.000% $1,000,000.00 $1,000,000.00 FHLB (Callable 6/29/96) 12129/98 $500,000.00 5.950% 5.950% $500,000.00 $498,750.00 FNMA (Callable 12/30/96) 12/30/98 $500,000.00 5.890% 5.890% $500,000.00 $498,830.00 FHLB (Callable 1112/95) 1112199 $2,000,000.00 5.460% 5.460% $2,000,000.00 $1,980,180.00 FNMA (Callable 2112/96) 2/12199 $400,000.00 5.550% 5.564% $399,858.35 $395,624.00 FFCB (Callable 9/19/97) 3/19/99 $1,000,000.00 6.570% 6.570% $1,000,000.00 $1,006,670.00. . FHLB (Callable 3/26/97) 3/26/99 $500,000.00 6.250% 6.250% $500,000.00 $500,315.00 $14,933,571.43 5.739% $14,923,742.30 $14,847,996.27.... . . .. .. CERTIFICATES OF DEPOSIT - FDIC INSURED Home Savings of America 10/1197 $99,000.00 5.450% 5.450% $99,000.00 $99,000.00 Sanwa Bank of California 1217/97 $99,000.00 5.600% 5.600% $99,000.00 $99,000.00 World Savings 1/29/98 $100,000.00 6.010% 6.010% $100,000.00 $100,000.00 Fremont Investment & Loan 7/30/98 $99,000.00 5.560% 5.560% $99,000.00 $99,000.00 Standard Pacific Savings 7/30/98 $99,000.00 5.200% 5.200% $99,000.00 $99,000.00 First Republic Trust & Loan 9/14/98 $95,000.00 5.250% 5.250% $95,000.00 $95,000.00 Southern California FS&L 9/14/98 $98,000.00 5.250% 5.250% $98,000.00 $98,000.00 $689,000.00 5.477% $689,000.00 $689,000.00 MUTUAL FUND Dean Witter U.S. Government Securities See Note 1 6.013% (4) $1,699,995.50 (2) $1,599,877.86 (3) POOLED PUBLIC AGENCY INVESTMENTS State of Calif.- Local Agency Investment Fund (LAlF) 9,500,000.00 5.595% (5) $9,500,000.00 $9,500,000.00 TOTAL INVESTED PORTFOLIO 5.699% $26,812,737.80 $26,636,874.13 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. The current City investment strategy assumes that approximately $1 million will be held through July 1, 1999 and $699,995 through October 1,1999 to avoid any deferred sales charge. (2) Book Value is shown as the cost at the time the original shares were purchased. (3) Market value is based upon the shares invested at the share price as of December 31, 1996. If the original shares were liquidated a deferred sales charge would apply. (4) Interest Rate shown is based on dividends receieved this fiscal year to dare. Annualized and then divided by original investment. (5) Interest Rate shown is the quarterly average as of December 31, 1996. ::. EXHIBIT _1. . CITY OF DUBLIN FOR THE QUARTER ENDED: DECEMBER 31, 1996 SUMMARY COMPARISON OF INVESTMENT PORTFOLIO BY TYPE AVERAGE MARKET %OF MATURITY TYPE OF INSTRUMENT FACE VALUE BOOK VALUE VALUE PORTFOLIO YEARS U.S. Treasury Notes 1,500,000.00 1,488,436.13 1,479,845.00 10.044% 1.26 Student Loan Marketing Assn(SLMA) 500,000.00 500,000.00 498,075.00 3.348% 1.96 Federal Farm Credit Bureau (FFCB) 1,828,571.43 1,829,238.18 1,833,759.57 12.245% 1.78 Federal Horne Loan Bank(FHLB) 4,000,000.00 4,000,000.00 3,965,055.00 26.785% 2.01 Fed Horne Loan Mortgage Corp(FHLMC) 2,000,000.00 1,999,152.33 1,987,345.00 13.393% 1.70 Federal National Mortgage Assn(FNMA) 5,105,000,00 5,106,915.66 5,083,916.70 34.185% 1.36 SUB -TOTAL GOVT/AGENCY 14,933,571.43 14,923,742.30 14,847,996.27 (1) 55.675% 1.45 Certificates of Deposit - FDIC Insured 689,000.00 689,000.00 689,000.00 2.569% 1.33 ttl Mutual Funds- Dean Witter U.S. Govt Securities (4) 1,699,995.50 1,699,995.50 1,599,877.86 (2) 6.338% 7.1 (3) LAIF 9,500,000.00 9,500,000.00 9,500,000.00 35.418% N/A IGRAND TOTAL I 26,822,566.93 26,812,737.80 26,636,874.13 100.000% NOTES: (1) The City intends to hold the investments until maturity or until market values equal or exceed the current Book Value (Amortized Cost). (2) Market value is based upon the shares invested at share price as of December 31, 1996. lfthe shares were liquidated a deferred sales charge would apply. (3) 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 as of December 31,1995. . . (4) The current City investment strategy assumes that approximately $1 million will be held through July 1, 1999 and $699,995 through October 1, 1999 to avoid any deferred sales charge. EXHIBIT 2 12 iT' . . CITY OF DUBLIN QUARTERLY INVESTMENT REPORT SECTION II . LISTING OF SUPPLEMENTAL MONIES UNDER CITY POSSESSION AND/OR - CONTROL · OPERATING FUNDS · SPECIAL FUNDS HELD BY TRUSTEESt .. · EMPLOYEE DEFERRED COMPENSATION PLAN l./ . ..' . _. . ". : ~ '. .' ... . '. _ - .... . ': . k . . . . City of Dublin Report of Operating Funds On Hand As of December 31, 1996 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 12/31/96 Non-Categorized - Cash Petty Cash - City Petty Cash - Recreation Cash Register - (4 Locations) Subtotal $200.00 $200.00 $200.00 $600.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS Balance 12/31/96 Annualized Rate of Interest BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With California Government Code $ 79,498.51 See Note 1 First Nationwide Bank- Regular Savings Account: FDIC Insured $ 2,059.88 2.01% Grand Total Amount Cash Balances: $ 82.158.39 Note 1: The City operating account is a corporate checking account, which includes monthly interest earnings which are at a variable rate. The interest earnings are credited against account charges and fees required to maintain the accounts. All interest earnings in excess of account charges are paid to the City on a monthly basis. ()' SPECIAL FUNDS HELD BY TRUSTEES CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN FOR THE QUARTER ENDING DECEMBER 31, 1996 MATURITY VALUE AT DATE MATURITY COUPON INTEREST RATE CIVIC CENTER COP U.S. Treasury Bill U.S. Treasury Note U.S. Treasury Note Sub- Total U.S. Treasury Investments BOOK MARKET YIELD VALUE VALUE 5.00% $40,974.52 $42,948.83 5.06% $40,000.00 $39,337.60 5.45% $1,636,665.90 1 $ I ,620,054.90 5.336% $1,717,640.42 $1,702,341.33 1/9/97 12/31/98 1/15/99 $43,000.00 $40,000.00 $ I ,605,000.00 $1,688,000.00 5.125% 6.375% MUTUAL FUNDS Dublin Blvd Assessment District First American Govt Obligation Fund See Note 2 5.40% $133,107.61 $133,107.61 DEMAND DEPOSIT BANK ACCOUNT WELLS FARGO Civic Center COP (See Note 3) Master Mkt Interest Account/Variable Rate NONE Not Applicable 3.20% $2,980.62 $2,980.62 Note I: Amortization of premium paid is recorded each June 30th. Note 2: A Mutual Fund does not have a stated maturity date and shares can be sold at any time. Note 3: This represents minor cash amounts held by the Trustee in an interest bearing bank account. , , :':',':.' ',',^ ..... .' ',. . ','. >' .':: ,',' ',' '. . ~, " ' . i.:~' l:.",,~_ I",~-< (~~ t:.1' EMPLOYEE DEFERRED COMPENSATION PLAN The City has an agreement with the International City Management Retirement Corporation (ICMA-RC) to manage a voluntary deferred compensation plan in accordance with Internal Revenue Code Section 457. Participants are not taxed on the deferred portion of their compensation until it is distributed to them. All funds currently in plan are the result of Employee voluntary .tributions and/or transfers from prior .emPloyers. . . . . ., !~MA-RC pools the assets of the Plan With those of other participants. The selectIOn of type of mvestment and mstructlOns are made by individual employees participating. The City has no liability for any losses incurred by the Plan and does not participate in any gains. The assets in the Plan are legally the sole property of the City until they are distributed, and would be subject to the Trust Agreement adopted by the City. The participants rights to these assets prior to distribution are equal to those of general creditors of the City. The likelihood of any claim by general creditors is believed to be remote. The total balance for all Deferred Compensation Funds as of September 30, 1996 was $570,041.31. This was the last period for which a statement is available. B~tween October 1, 1996 and December 31,1996 there were additional contributions made in the amount of$24,187.93. Investment earnings during this period were not available prior to the date of preparation of this report. The breakdown of the amount invested by investment type, as of 9/30/96 is shown below. -, n, ,.. Quarterly Financial Report for A 457 Deferred Compensation Plan 07/01/96 through 09/30/96 Page 1 of 2 ~ t(:M^ Ilr:IIJU~":N'1 elMU"l""llON Congress recently passed favorable legisl:ltion :>.!fecting your 457 retirement plan. For more details please see the November RC NOles. LOU ANN THE I RA CITY OF DUBLIN CA POBOX 23~0 100 CIVIC PLAZA DUBLI N CA 9~568-2658 ~~&~~~~~~~~~~~~ . P.la.ti'SlI!!1'N.!!'Y..lnformatl Fund Balance on 07101196 ContnbuUons Earnings Fund Balance on 0913Q.096 Fund Balance on 07101196 S3.942-62 $170,02a.70 ContribuUons 201.95 12.868.96 Earnings 178.67 6.631.16 Fund Balance on 09130/96 $4,323..24 S189,52a.82 Percentage Invested 1% 1% 33% 5% 3% . 17% ~H~:COJ1.~...~~~~~~e Fund Balance on 07101/96 $41,020.28 $6,433.59 $2,566.68 $128,379.97 $20079.40 $3,779.11 ContribuUons 3.526.48 280.00 142.80 12.241.45 0.00 201.95 Earnings 738.53 102.03 28.54 2.047.51 41.37 133.86 Fund Balance on 09130196 $45,285.29 $6,815.62 $2,738.02 $142,66a.93 $20120.77 $4,114.92 Percentage Invested 8% 10k Less than 1 % 25% Less than 1 % 1 -Yo ~~;cosi~~~~d!I~~~~ Fund Balance on 07101196 $3,823.04 $3,589.88 $3,653..13 $3,736.31 $3,74a.B4 ContribuUons 201.88 201.95 201.95 201.88 201.86 Earnings 121.65 60.69 139.49 112.69 107.88 Fund Balance on 09130/96 $4,146.57 $3,852-52 $3,994.57 S4,050.88 $4,058.60 Percentage Invested 1 ~~ Less than 1 % 10k 1 ~~ 1 ~~ N04e: Aroounrs shown net of applicable fees and expenses.. ElJlnings ircJude dividends. Retest and reaJizrId and unrealized gains and losses. Aggressive Oppor. 232.6030 $16.95 244.9426 $17.65 International 380.8021 11.55 615.0702 11.60 Growth Slock 11,208.2198 15.17 12,079.5951 15.69 .. Broad Markel 1.659.3011 15.16 1.799.0369 15.56 Equity Income 604.3427 14.68 1.151.6069 15.05 Asset Allocalion 6.838.8982 13.77 7.104.0572 14.06 Core Bond 3.601.4293 11.39 3.910.6473 11.58 US Treasury 578.0408 11.13 603.1521 11.30 Cash Management 231.2322 11.10 244.0297 11.22 M.S. Momlm Growlh 350.5666 10.78 370.3802 11.11 M.S. Aggr Growth 272.8796 14.01 287.9561 14.40 M.S. Cap! Apprec 350.5738 10.24 370.7915 10.39 P~43e nottf.y RC oj any ljNestJoIU regarding your plan wtlbtn 120 ")Is oj tb~ ending dale on tbts $tAumeat Gt 1-800-32o.i272.