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Home My WebLink AboutItem 4.03 InvestRpt1stQtr02-03 CI'TY CLERK File #320-20 AGENDA STATEMENT CTTY COUNCTL MEETTNG DATE: November S, 2002 SUBJECT: City Treasurer's Investment Report For 1st Quarter 2002/2003 Report Prepared by Carole A. Perry, Administrative Services Director and Fred Marsh, Finance Manager ATTACHMENTS: Quarterly Investment Report (September 30, 2002) Section I - Primary Investment Portfolio Section II - Listing of Supplemental Monies Under City Possession and/or Control RECOMMENDATIO~,~,, Receive Report DESCRIPTION: The attached Investment Report details the City's investments as of September 30, 2002, 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 2002/2003 are discussed in the staff report below. INVESTMENT ACTIVITY IN FIRST QUARTER FISCAL YEAR 2002/2003 During the First Quarter four securities matured or were called due to the decline in interest rates that occurred during the quarter, as summarized in the table below: INVESTMENTS MATURED OR CALLED FIRST QUARTER FISCAL YEAR 2002/2003 TYPE AMOUNT MATURITY YIELD Matured Federal Securities FHLB $2,000,000 08/15/2002 6.200% Called Federal Securities FHLB $3,900,000 10/8/2004 4.300% FHLB $3,000,000 10/15/2004 4.125% FHLB $3,000,000 1/11/2005 5.100% The City received the full face amount of the investments that were called plus any accrued interest. The proceeds from these investments, along with other available funds, were temporarily placed in the Nations and Union Bank Government Securities money market accounts. The proceeds from these investments, along with other avai'lable funds, were used to purchase new securities during the period, as summarized in the table on the following page: COPIES TO: /j/~/o'~ /~~ G:\Investments~Sept 2002L~genda staff report3.doc ITEM NO. C~ INVESTMENTS PURCHASED FIRST QUARTER FISCAL YEAR 2002/2003 CALL TYPE AMOUNT MATURITY YIELD DATE FEDERAL SECURITIES FHLB $3,000,000 11/22/2004 3.200% 11/22/02 FHLB $3,000,000 2/14/2005 3.250% 2/14/03 FHLB $3,000,000 8/14/2006 4.000% 2/14/03 In the most recent quarter the average maturity for the Federal Security portion of the portfolio increased to 2.9 years, due to the purchase of the longer term securities noted 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 investments, which are deemed sufficient to meet cash flow needs. DETAILED LISTING OF PRIMARY PORTFOLIO Government and Agency Securities represent 47% 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 September 30, 2002. 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 has received to date $19,094 in dividends from this investment, resulting in an annualized yield of 4.790%. 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 September 30, 2002 by source. Comparison information is also shown for the previous quarter. Note that 45% 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 Current Quarter Prior Quarter 6/30/2002 % of 6/30/2002 % of Balance Total Balance Total General Fund $41,842,705 47% $43,616,325 45% Restricted - Special Revenue Funds $1,269,608 1% $2,135,445 2% (I.e. Gas Tax, Special Taxes) Restricted - Assessment District Funds $389,483 0% $666,013 1% (i.e. Landscape Maint & Debt Service) Restricted - Impact Fees $41,206,331 45% $42,373,826 45% Internal Service /Replacement Funds $6,390,370 7% $6,230,889 7% TOTAL $91,098,497 100% $95,022,498 100% CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT The total amount shown as invested in the Primary Investment Portfolio is $5,271,993 less than the amount shown at June 30, 2002, primarily due to payments made to the County for Public Safety services that were accrued at June 30, 2002, as is the City's standard practice, as well as for the construction of the new library and Tassajara Road / 1-580 Interchange during the quarter. Overall, the combined rate for the total portfolio decreased from 3.749% at June 30, 2002 to 3.546% at September 30, 2002. The decrease was attributable to the calling of the federal securities noted above, a decrease in the rate of return on the City's LA/F 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 LAW investment was 2.63% as of September 30, 2002, which was lower than the 2.75% rate recorded for the quarter ending June 30, 2002. LAW is a liquid investment, and the current LAW 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 1 st QUARTER FY 2002-2003 SECTION 1 PRIMARY INVE S TMENT PORTFOLIO CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN September 30, 2002 COUPON BOOK AND MATURITY VALUE AT INTEREST MARKET INVESTMENT 1ST CALL DATE DATE MATURITY RATE YIELD VALUE FEDERAL SECURITIES FHLB 11/6/2002 1 1,000,000 5.940% 6.780% 1,004,060 FHLB 2/14/2003 1 1,000,000 7.000% 7.010% 1,019,690 FHLB 9/2/2003 1 1,000,000 5.627% 6.910% 1,037,190 FNMA 11/14/2003 2 1,000,000 4.750% 6.920% 1,034,690 FHLB 11/22/02 11/22/2004 3 3,000,000 3.200% 3.200% 3,005,640 FHLB 12/15/2004 3 3,000,000 3.875% 4.240% 3,114,390 FNMA 6/27/03 12/20/2004 3 1,000,000 3.800% 3.800% 1,014,060 FHLB 6/27/03 12/27/2004 3 6,500,000 3.815% 3.815% 6,587,360 FHLB 2/14/03 2/14/2005 3 3,000,000 3.250% 3.250% 3,012,180 FHLB 7/18/03 7/18/2005 3 3,000,000 5.220% 5.220% 3,078,750 FHLB 1/17/03 1/17/2006 4 5,000,000 5.420% 5.420% 5,046,900 FHLB 2/14/03 8/14/2006 4 3,000,000 4.000% 4.000% 3,022,500 FFCB 12/20/02 12/20/2006 5 5,000,000 5.340% 5.420% 5,037,500 FHLMC 1/3/2007 5 500,000 6.525% 5.200% 571,095 FFCB 1/23/2007 5 421,000 4.600% 5.200% 447,839 FHLB 2/15/2007 5 4,000,000 4.875% 5.140% 4,296,240 TOTAL FEDERAL SECURITIES $41,421,000 4.720% $42,330,084 CERTIFICATES OF DEPOSIT - FDIC INSURED United California Bank 12/9/2002 I 99,000 6.000% 6.000% 99,000 TOTAL CERTIFICATES OF DEPOSIT $99,000 6.000% $99,000 MUTUAL FUNDS Nations Bank Government Reserves $3,703,000 1.630% $3,703,000 Capital Fund Union Bank U.S. Govt Securities $3,283,372 1.370% $3,283,372 Morgan Stanley Dean Witter U.S. Govt Securities See Note 1 4.790% (2) $1,696,731 TOTAL MUTUAL FUNDS 2.118% $8,683,103 POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAIF) $39,986,310 2.630% $39,986,310 TOTAL INVESTED PORTFOLIO 3.546% $91,098,497 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) $48,669,413 54% Maturing in 1 year or less $3,159,940 3% Maturing in 1-2 years $1,034,690 1% Maturing in 2-3 years $19,812,380 22% Maturing in 3-4 years $8,069,400 9% Maturing in 4-5 years $10,352,674 11% Total portfolio $91,098,497 100% ,o,,8,2oo28:37^M ITEM 1 CITY OF DUBLIN SUMMARY OF INVESTMENT PORTFOLIO COMPARISON BY INVESTMENT TYPE September 30, 2002 BOOK AND MARKET o/o OF MATURITY TYPE OF INSTRUMENT FACE VALUE VALUE PORTFOLIO YEARS Federal Home Loan Bank (FHLB) 34,500,000 35,238,960 38.3% 2.7 Federal Farm Credit Bureau (FFCB) 5,421,000 5,485,339 6.0% 4.2 Federal National Mortgage Assn (FNMA) 1,000,000 1,034,690 1.1% 1.1 Federal Home Loan Mortgage Corporation (FHLMC) 500,000 571,095 0.6% 4.3 SUB-TOTAL GOVT/AGENCY 41,421,000 42,330,084 (1) 46.0% 2.9 Certificates of Deposit - FDIC Insured 99,000 99,000 0.1% 0.2 Mutual Funds Morgan Stanley Dean Witter U.S. Govt Securities 1,594,497 1,696,731 (21 1.8o/o 5.0 (3) Union Bank U.S. Govt Securities 3,283,372 3,283,372 3.6% N/A Nations Bank Government Reserves Capital Fund 3,703,000 3,703,000 4.1% N/A LAIF 39,986,310 39,986,310 44.4% N/A GRAND TOTAL $90,087,179 $91,098,497 100.0% NOTES: (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. ,0,,8,2oo2 8:o7 AM I T E M 2 CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 1st 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 September 30, 2002 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 Non-Categorized - Cash 9/30/2002 Cash Regisers/Petty Cash - $650.00 City Petty Cash - Shannon Center $200.00 Subtotal $850.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS Balance 9/30/2002 Annualized Rate of Interest BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With $151,074 .5% California Government Code NATIONS BANK U.S. Treasury Reserves Adviser $701,264 1.3834% Account (Sweep Account connected to Bank of America Deposits listed above) Cai Fed- Regular Savings Account: FDIC Insured $3,576 .75% Grand Total Amount Cash Balances: $855,914.00 SPECIAL FUNDS HELD BY TRUSTEES CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN FOR THE QUARTER ENDING SEPTEMBER 30, 2002 COUPON MATURITY VALUE AT INTEREST BOOK MARKET DATE MATURITY RATE YIELD VALUE VALUE MUTUAL FUNDS Dublin Blvd Assessment District First American Govt Obligation Fund See Note 1 1.32% $171,108 $171,108 NOTES: (1) A Mutual Fund does not have a stated maturity date and shares can be sold at any time.