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HomeMy WebLinkAboutItem 4.04 CTInvestRptQtr1 97-98 (2) CITY CLERK File # n[3l[2]fOl-[~llQJ . AGENDA STATEMENT CITY COUNCIL MEETING DATE: (October 21,1997) SUBJECT: ,.. ~ City Treasurer's Investment Report For 1st Quarter 97/98 p~Report Prepared by: Paul S. Rankin, Assistant City Manager Quarterly Investment Report (September 30, 1997). Section I - Primary Investment Portfolio / Section II - Listing of Supplemental Monies Under City Possessionandlor Control ~ Receive Report EXlUBITS ATTACHED: RECOMMENDATION: DESCRIPTION: The attached Investment Report details the City's investments as of September 30, 1997, 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 first quarter of Fiscal Year 1997/98 are discussed in the staffreport below. INVESTMENT ACTIVITY IN FIRST QUARTER FISC~L YEAR 1997/98 . During the First Quarter two securities in the amount of $1,500,000 were removed from the portfolio due to an early bond call. The following Table provides details on this Called Investment: INVESTMENTS WHICH WERE CALLED JULY - SEPTEMBER 1997 ORIGINAL CALL TYPE AMOUNT MATURITY DATE Called Federal Securities FHLB $500,000 Original Maturity Eligible to Be 3/26/99 Called After i (Called 9/26/97) 3/26/97 i FHLB $1,000,000 Original Maturity 9/23/97 6/23/00 (Called 9/23/97) INTEREST RATE 6.250% 6.700% As noted above FHLB e~ercised their right to "call" both sec~ties prior to the stated maturity date. The City received the full principal amount, as well as accrued interest through the date of the call. However, this results in the need to reinvest the funds at current market rates. The proceeds from these investments were temporarily transferred into the State's Local Agency . Investment Fund (LAlF), and depending upon market conditions may be used in the next quarter to purchase another Federal Security. One federal security totaling $1,000,000, was purchased during the period, as summarized in the table below: -----------------------------------------~------------------------- g:\invsmnts\sept97\aIDdstmt.dOC: COPIES TO: ITEMNO.~ .. INVESTMENTS PURCHASED FIRST QUARTER FISCAL YEAR 1997/98 TYPE Federal Securities FHLB AMOUNT MATURITY CALL DATE INTEREST RATE $1,000,000 7/3/2000 10/3/97 6.500% The FHLB security was purchased at face value and is callable, which means that it can be called by the issuer prior to the stated maturity date. This security was called on 10/3/97 and will show as investment sales transaction in the second quarter of Fiscal Year 1997/98. The City received the full face amount of the security plus all of the accrued interest on that date. The federal security listed above is allowed under the City's current investment policy. The purchases extend the City portfolio in order to ladder the schedule of maturities. In the previous quarterly report the average maturity of all Government and Agency Securities was approximately 1.55 years. The average maturity for the first quarter dropped to approximately 1.30 years as the City's existing investments became closer to reaching their maturity dates. 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 as of August 31, 1997. 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 by the City prior to their stated maturity dates. The Dean Witter Mutual Fund Investment represents approximately 5.8% of the City's total portfolio. The book value reported is based upon the original cost of shares. The City is receiving its dividend shares on a monthly basis. During the first three months of the Fiscal Year the City received nearly $25,031 in dividends from this investment, resulting in an annual yield of approximately 5.890%. CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT The total amount shown as invested in the Primary Investment Portfolio is nearly $48,765 less than the amount shown at June 30, 1997. The amount invested in Federal Securities decreased by $498,765, while the City's investment in the Local Agency Investment Fund (LAlF) increased by $450,000. Overall, the combined rate for the total portfolio increased slightly from 5.691% at June 30, 1997 to 5.697% at September 30, 1997. The higher yield on the City's LAlF investment was slightly offset by a reduction in the overall rate for federal securities, resulting from the bond call noted above. The quarterly average for the City's LAIF investment was 5.692% as of September 30, 1997, which was slightly higher than the 5.637% rate recorded for the quarter ending June 30, 1997. LAIF is a liquid investment, and the current LAlF 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. The investments and the schedule of investments are in compliance with the City's investment policy and all applicable laws and regulations. . -:J.- . . . J CITY OF DUBLIN QUARTERLY INVESTMENT REPORT SECTION I PRIMARY INVESTMENT PORTFOLIO :J.. CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN . FOR THE QUARTER ENDED SEPTEMBER 30, 1997 COUPON MATURITY VALUE AT INTEREST BOOK MARKET INVESTMENT DATE MATURITY RATE YIELD VALUE VALUE FEDERALSECUEaTffiS FHLMC (Callable 2/26/97) 2/26/98 $500,000.00 5.100% 5.100% $500,000.00 $498,905.00 FNMA (Callable 5/13/96) 5/13/98 500,000.00 5.250% 5.482% 499,875.00 497,655.00 FHLMC (Callable 9/9/94) 9/9/98 500,000.00 4.950% 5.020% 499,808.57 495,000.00 FNMA (Callable 10/15/96) 10/15/98 1,000,000.00 4.875% 4.889% 999,932.32 987,810.00 U.S. Treasury Note 10/31/98 1,000,000.00 4.750% 5.101% 998,468.77 987,660.00 FHLB (Callable 11/3/94) 11/3/98 1,000,000.00 5.110% 5.110% 1,000,000.00 991,720.00 FNMA (Callable 12/10/96) 12/10/98 1,000,000.00 5.310% 5.311 % 999,937.51 991,410.00 SLMA (Callable 12/18/97) 12/18/98 500,000.00 5.800% 5.800% 500,000.00 498,985.00 FFCB (Callable 12/18/96) 12/18/98 500,000.00 5.850% 5.850% 500,000.00 498,985.00 FHLMC(Callable 12/24/97) 12/24/98 1,000,000.00 6.000% 6.000% 1,000,000.00 998,440.00 FHLB (Callable 6/29/96) 12/29/98 500,000.00 5.950% 5.950% 500,000.00 499,455.00 FNMA (Callable 12/30/96) 12130/98 500,000.00 5.890% 5.890% 500,000.00 498,905.00 FHLB (Callable 1/12/95) 1/11/99 2,000,000.00 5.460% 5.460% 2,000,000.00 1,987,180.00 FNMA (Callable 2/12/96) 2/12/99 400,000.00 5.550% 5.564% 399,958.35 397,252.00 FHLB (Callable 2/12/98) 2/12/99 1,000,000.00 6.125% 6.125% 1,000,000.00 1,000,160.00 FFCB (Callable 9/19/97) 3/19/99 1,000,000.00 6.570% 6.570% 1,000,000.00 1,000,780.00 FNMA (No Call Date) 4/11/99 1,000,000.00 6.430% 6.460% 999,580.00 1,005,160.00 FHLB (Callable 10/3/97) 7/3/00 1,000,000.00 6.500% 6.500% 1,000,000.00 1,000,31 TOTAL FEDERAL SECURITIES $14,900,000.00 5.688% $14,897,560.52 $14,835,7' CERTIFICATES OF DEPOSIT - FDIC INSURED Home Savings of America 10/1/97 $99,000.00 5.450% 5.450% $99,000.00 $99,000.00 Sanwa Bank of California 12/7/97 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 Trost & 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 TOTAL CERTIFICATES OF DEPOSIT $689,000.00 5.477% $689,000.00 $689,000.00 MUTUAL FUND Dean Witter U.S. Government Securities See Note 1 5.890% (2) $1,699,995.50 $1,621,400.88 POOLED PUBLIC AGENCY INVESTMENTS State ofCA.- Local Agency Investment Fund (LAIF) $11,850,000.00 5.692% (3) $11,850,000.00 $11.850.000.00 TOTAL INVESTED PORTFOLIO 5.697% $29,136,556.02 $28,996,172.88 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 ofa 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) Interest Rate shown is based on dividends received this fiscal year to date, which are annualized and then divided by the original investme (3) Interest Rate shown is the quarterly average as of September 30, 1997. EXHIBIT 1 3 I I City of Dublin Summary Comparison of Investment Portfolio by Type For the Quarter Ended September 30, 1997 . LAIF 41% Federal Securities 51% Dean Witte'r Mutual Fund 6% Certificates of Deposit 2% MARKET %OF MATURITY TYPE OF INSTRUMENT FACE VALUE BOOK VALUE VALUE PORTFOLIO YEARS U.S. Treasury Notes $1,000,000.00 $998,468.77 $987,660.00 6.7% 1.08 . Student Loan Marketing Assn (SLMA) 500,000.00 500,000.00 498,985.00 3.4% 1.22 Federal Farm Credit Bureau (FFCB) 1,500,000.00 1,500,000.00 1,499,765.00 10.1% 1.38 Federal Home Loan Bank (FHLB) 5,500,000.00 5,500,000.00 5,478,825.00 36.9% 1.53 Fed Home Loan Mortgage Corp (FHLMC) 2,000,000.00 1,999,808.57 1,992,345.00 13.4% 0.95 Federal National Mortgage Assn (FNMA) 4,400,000.00 4,399.283.18 4,378,192.00 29.5% 1.19 SUB -TOTAL GOVT/AGENCY 14,900,000.00 14,897,560.52 14,835,772.00 (I) 51.1 % 1.30 Certificates of Deposit - FDIC Insured 689,000.00 689,000.00 689,000.00 2.4% 0.58 Mutual Funds. Dean Witter U.S. Govt Securities (4) 1,699,995.50 1,699,995.50 1,621,400.88 (1) 5.8% 5.4 (3) LAIF 11,850,000.00 11,850,000.00 11,850,000.00 40.7% N/A GRAJI,"D TOTAL $29,138,995.50 $29,136,556.02 $28,996,172.88 100.0% 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 September 30,1997. If the shares were liquidated a deferred sales charge would apply. Book Value is shown as the cost at the time the original shares were purchased. (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 31,1996. This figure represents the duration factor for the Fund and it was reduced from the figure reported for 1996. (4) The current City investment strategy assumes that approximately $1 million will be held through July 1, 1999 and $699,995 through October I, 1999 to avoid any deferred sales charge. EXHIBIT 2 'i CITY OF DUBLIN QUARTERLY INVESTMENT REPORT SECTION II LISTING OF SUPPLEMENTAL MONIES UNDER CITY POSSESSION AND/OR CONTROL · OPERATING FUNDS . SPECIAL FUNDS HELD BY TRUSTEES , , . . . . . . . ,. 5 City of Dublin Report of Operating Funds On Hand As of September 30, 1997 In accordance with the California Govermnent 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 09/30/97 Non-Categorized - Cash Petty Cash - City Petty Cash - Recreation Cash Register - ( 4 Locations) Subtotal $200.00 $200.00 $250.00 $650.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS Balance 8/30/97 Annualized Rate of Interest BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With California Government Code $57,634.04 See Note 1 First Nationwide Bank- Regular Savings Account: FDIC Insured $ 386.52 2.00% Grand Total Amount Cash Balances: $58.020.56 Note 1: The City operating account is a corporate checking account, which includes monthly interest earnings which are at a variable rate. 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