HomeMy WebLinkAboutItem 4.03 CT InvestRpt1997-98 (2)
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CITY CLERK
File # D[3][Z][Q]-[3]lQJ
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: (April 21, 1998)
City Treasurer's Investment Report For 3rd Quarter 97/98.
~eport Prepared by: Paul S. Rankin, Assistant City Manager
Quarterly Investment Report (March 31, 1998)
Section I - Primary Investment Portfolio
~ Section II - Listing of Supplemental Monies Under City
^ I Possession and/or Control
'~ Receive Report
DESCRIPTION: The attached Investment Report details the City's investments as of March 31,
1998, 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.
SUBJECT: -
EXHIBITS ATTACHED:
RECOMMENDATION:
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 third quarter of Fiscal Year 1997/98
are discussed in the staff report below.
INVESTMENT ACTIVITY IN TIDRD QUARTER FISCAL YEAR 1997/98
During the Third Quarter one security in the amount of $500,000 matured and two securities in the
amount of $1,000,000 each were removed from the portfolio due to an early bond call by the issuer. In
addition, one Certificate of Deposit in the amount of $100,000 matured during the Quarter. The following
Table provides details on activity related to these investments:
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INVESTMENTS WHICH WERE CALLED OR MATURED JANUARY - MARCH 1998
ORIGINAL CALL INTEREST
TYPE AMOUNT MATURITY DATE RATE
Matured Federal Securities
FHLMC $500,000 2/26/98 N/A 5.100%
Called Federal Securities
FHLMC $1,000,000 12/24/98 1/21/98 6.000%
FHLB $1,000,000 2/12/99 2/12/98 6.125%
Matured Certificates of Deposit
W orId Savings $100,000 1/29/98 N/A 6.010%
As noted above FHLMC and FHLB exercised their rights to "call" the securities prior to the stated
maturity dates. The City received the full principal amount, as well as accrued interest through the date of
the calls. However, this results in the need to reinvest the funds at current market rates.
The proceeds from these investments, along with other available funds, were used to purchase two new
securities during the period, as summarized in the table below:
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COPIES TO:
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ITEM NO.
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INVESTMENTS PURCHASED THIRD QUARTER FISCAL YEAR 1997/98
CALL INTEREST
TYPE AMOUNT MATURITY DATE RATE
Federal Securities
FHLB $1,500,000 1/29/01 1/29/99 5.63%
FHLB $1,000,000 3/12/01 3/12/99 5.75%
The first investment listed above was purchased at a discount of $3,525, while the second investment
listed was purchased at face value. Both of these securities purchased during the quarter had call options,
which means that they can be called by the issuer prior to the stated maturity dates. If the security is
called prior to the stated maturity date, the City receives the full face amount plus any accrued interest.
The federal securities listed above are 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 1.36 years. The average maturity for the third quarter increased to approximately 1.47
years as a result of the new investments made during the quarter.
DETAILED LISTING OF PRIMARY PORTFOLIO
Government and Agency Securities represent the second 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 March 31, 1998. 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 z::~presents approximately 4.9% of the. City'stotal 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 nine months of the Fiscal Year the City received nearly
$74,537 in dividends from this investment, resulting in an annualized yield of approximately 5.846%.
The market value of this investment fluctuates on a daily basis.
CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT
The total amount shown as invested in the Primary Investment Portfolio is nearly $2,059,166 more than
the amount shown at December 31, 1997. The amount invested in Federal Securities and Certificates of
Deposit decreased by approximately $105,834, while the City's investment in the Local Agency
Investment Fund (LAIF) increased by $2,165,000. The increase reflects the receipt of sales tax revenues,
impact fee deposits and other de~elopment related revenue during the quarter.
Overall, the combined rate for the total portfolio decreased slightly from 5.718% at December 31, 1997 to
5.696% at March 31, 1998. The decrease resulted from a slightly lower overall yield on the City's
investments in LAIF and Federal Securities. The quarterly average for the City's LAIF investment was
5.715% as of March 31, 1998, which was slightly lower than the 5.721% rate recorded for the quarter
ending December 31, 1997. LAIF is a liquid investment, and the current LAIF rate remains very.
favorable compared to rates offered on investments which have less flexibility.
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It should be noted that Staff has encountered declines in interest rates during the last quarter. Although
this may impact interest earnings, the primary objective in placing public investments must remain the
security of the investment. Staff believes that the current portfolio is responsive to the objectives as stated
in the City's Investment Policy.
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.
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CITY OF DUBLIN
QUARTERLY INVESTMENT REPORT
SECTION I
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PRIMARY INVESTMENT
PORTFOLIO
CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS
INCLUDING RATE OF RETURN
FOR THE QUARTER ENDED MARCH 31, 1998
COUPON
MA TURITY VALUE AT INTEREST BOOK
INVESTMENT DATE MATURITY RATE YIELD VALUE
FEDERAL SECURITIES
FNMA (Callable 5/13/96) 5/13/98 500,000.00 5.250% 5.482% 499,937.50
FHLMC (Callable 9/9/94) 9/9/98 500,000.00 4.950% 5.020% 499,835.94
FNMA (Callable 10/15/96) 10/1 5/98 1,000,000.00 4.875% 4.889% 999,906.25
U.S. Treasury Note 10/31/98 1,000,000.00 4.750% 5.101% 997,703.13
FHLB (Callable 11/3/94) 11/3/98 1,000,000.00 5.110% 5.110% 1,000,000.00
FNMA (Callable 12110/96) 12/10/98 1,000,000.00 5.310% 5.311% 999,929.68
SLMA (Callable 12118/97) 12/18/98 500,000.00 5.800% 5.800% 500,000.00
FFCB (Callable 12118/96) 12/18/98 500,000.00 5.850% 5.850% 500,000.00
FNMA (Callable 12130/96) 12/30/98 500,000.00 5.890% 5.890% 500,000.00
FHLB (Callable 1/12195) 1/11/99 2,000,000.00 5.460% 5.460% 2,000,000.00
FNMA (Callable 2/12196) 2/12199 400,000.00 5.550% 5.564% 399,950.00
FNMA (No Call Date) 4/11/99 1,000,000.00 6.430% 6.460% 999,720.00
FNMA (No Call Date) 11/8/00 1,000,000.00 6.220% 6.220% 1,000,000.00
FHLB (No Call Date) 10120/00 1,000,000.00 6.250% 6.250% 1,000,000.00
FHLB (No Call Date) 10120/00 1,000,000.00 6.240% 6.240% 1,000,000.00
FHLB (Callable 1/29/99) 1/29/01 1,500,000.00 5.630% 5.710% 1,496,768.75
Fffi.B (Callable 3/12/99) 3/12/01 1,000,000.00 5.750% 5.750% 1,000,000.00
FHLB (Callable 6/29/99) 6/29/01 500,000.00 6.250% 6.250% 500,000.00
TOTAL FEDERAL SECURITIES $15,900,000.00 5.672% $15,893,751.25
CERTIFICA TES OF DEPOSIT - FDIC INSURED
Fremont Investment & Loan 7/30/98 99,000.00 5.560% 5.560% 99,000.00
Standard Pacific Savings 7/30/98 99,000.00 5.200% 5.200% 99,000.00
First Republic Trust & Loan 9/1 4/98 95,000.00 5.250% 5.250% 95,000.00
People's Bank of California 9/14/98 98,000.00 5.250% 5.250% 98,000.00
Home Savings of America 10/28/98 =_ 99,000.00 5.600% 5.600% 99,000.00
Glendale Federal Bank 12/9/98 99,000.00 5.600% 5.600% 99,000.00
Sanwa Bank 12/9/99 99,000.00 5.600% 5.600% 99,000.00
TOTAL CERTIFICATES OF DEPOSIT $688,000.00 5.439% $688,000.00
MUTUAL FUND
Dean Witter U.S. Government Securities
See Note 1
5.846% (2) $1,699,995.50
POOLED PUBLIC AGENCY INVESTMENTS
State of CA.- Local Agency Investment Fund (LAIF) $15,890,000.00
5.715% (3) $15,890,000.00
TOTAL INVESTED PORTFOLIO
5.696% $34,171,746.75
NOTES:
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MARKET
VALUE (<)
499,295.00
498,045.00
994,370.00
994,690.00
996,560.00
997,190.00
500,545.00
500,000.00
499,685.00
1,995,320.00
399,000.00
1,007,970.00
1,004,060.00
1,000,780.00
1,000,620.00
1,496,768.75
1,000,000.00
501,170.00
$15,886,0.
99,000.00
99,000.00
95,000.00
98,000.00
99,000.00
99,000.00
99,000.00
$688,000.00
$1,632,162.39
$15,890,000.00
$34,096,231.14
(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 I, 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 investmee
(3) Interest Rate shown is the quarterly average as of March 31, 1998.
(4) Market Value shown is as of February 28, 1998.
EXHIBIT 1
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City of Dublin
Summary Comparison of Investment Portfolio by Type
For the Quarter Ended March 31, 1998
LAIF
46%
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Federal Securities
47%
Dean Witter
Fund
5%
~mlicates of Deposit
2%
MARKET %OF MATURITY
TYPE OF INSTRUMENT FACE VALUE BOOK VALUE VALUE PORTFOLIO YEARS
U.S. Treasury Notes $1,000,000.00 $997,703.13 $994,690.00 6.3% 0.59
. Student Loan Marketing Assn (SLMA) 500,000.00 500,000.00 500,545.00 3.1% 0.72
Federal Farm Credit Bureau (PFCB) 500,000.00 500,000.00 500,000.00 3.1% 0.72
Federal Home Loan Bank (PHLB) 8,000,000.00 7,996,768.75 7,991,218.75 50.3% 2.01
Fed Home Loan Mortgage Corp (PHLMe) 500,000.00 499,835.94 498,045.00 3.1% 0.44
Federal National Mortgage Assn (FNMA) 5,400,000.00 5,399,443.43 5,401.570.00 34.0% 1.05
SUB -TOTAL GOVT/AGENCY 15,900,000.00 15,893,751.25 15,886,068.75 (I) 46.5% 1.47
Certificates of Deposit ~ FDIC Insured 688,000.00 688,000.00 688,000.00 2.0% 0.65
Mutual Funds - Dean Witter U.S. Govt
Securities (.) 1,699,995.50 1,699,995.50 1,632,162.39 (%) 5.0% 5.0 (3)
LAIF 15,890,000.00 15,890,000.00 15,890,000.00 46.5% N/A
GRAND TOTAL $34,177 ,995.50 $34,171,746.75 $34,096,231.14 100.0%
NOTES:
(1) The City intends to hold the investments until maturity or until market values equal or exceed the current book value (Amortized Cost).
Market Value shown is as of February 28,1998.
. (2) Market value is based upon the shares invested at share price as of March 31, 1998. 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 31,1997.
This figure represents the duration factor for the Fund and it was reduced from the figure reported for 1997.
(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
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CITY OF DUBLIN
QUARTERLY INVESTMENT REPORT
SECTION II
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LISTING OF SUPPLEMENTAL
MONIES -UNDER CITY -
POSSESSION AND/OR
CONTROL
· OPERATING FUNDS
· SPECIAL FUNDS HELD BY TRUSTEES .
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City of Dublin Resort of
Operating Funds On Hand
As of March 31, 1998
In accordance with the California Government Code, the City 1'reasurer 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 TIllS 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 3/31/98
Non-Catee:orized - Cash
Petty Cash - City
Petty Cash - Recreation
Cash Register - (4 Locations)
Subtotal
$200.00
$200.00
$250.00
$650.00
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OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS
Balance 3/31/98
Annualized Rate of Interest
BANK OF AMERICA-
Collateralized Public Money
Deposits In Accordance With
California Government Code
$329,083.78
See Note 1
First Nationwide Bank-
Regular Savings Account:
FDIC Insured
$ 1,307.87
2.00%
Grand Total Amount
Cash Balances:
$330.391.65
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.
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