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HomeMy WebLinkAboutItem 4.07 InvestRpt4thQtr2001-2 CITY CLERK File #320-30 AGENDA STATEMENT CITY COUNCIL MEETING DATE: August 6, 2002 SUBJECT: City Treasurer's Investment Report For 4th Quarter 2001/2002 Report Prepared by Carole A. Perry, Administrative Services Director and Fred Marsh, Finance Manager ATTACHMENTS: Quarterly Investment Report (June 30, 2002) Section I - Primary Investment Portfolio Section II - Listing of Supplemental Monies Under City Possession and/or Control RECOMMENDATION: ~r~Receive Report DESCRIPTION: The attached Investment Report details the City's investments as of June 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 fourth quarter of Fiscal Year 2001/2002 are discussed in the staff report below. INVESTMENT ACTIVITY IN FOURTH QUARTER FISCAL YEAR 2001/2002 During the Fourth 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 FOURTH QUARTER FISCAL YEAR 2001/2002 TYPE AMOUNT MATURITY YIELD Matured Federal Securities FHLB $2,000,000 05/01/2002 6.750% Called Federal Securities FHLB $3,000,000 12/21/2004 4.290% FHLB $2,000,000 12/27/2005 6.525% 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 available funds, were used to purchase new securities during the period, as summarized in the table on the following page: COPIES TO: G:\InvestmentsLlune 2002XAgenda staff report~.doc ITEM NO. ~ INVESTMENTS PURCHASED FOURTH QUARTER FISCAL YEAR 2001/2002 CALL TYPE AMOUNT MATURITY YIELD DATE FEDERAL SECURITIES FNMA $1,000,000 12/20/2004 3.800% 6/27/03 FHLB $6,500,000 12/27/2004 3.815% 6/27/03 In the most recent quarter the average maturity for the Federal Security portion of the portfolio decreased to 2.8 years, due to the purchase of the shorter term securities noted above and the calling of the securities listed on the previous page. 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 June 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 Stat?. ley Dean Witter US Government Securities Mutual Fund Investment represents 2% of the City's total portfolio. During the 2001-2002 Fiscal Year the City has received to date $88,062 in dividends from this investment, resulting in an annualized yield of 5.523%. The market value of this investment fluctuates on a daily basis and as of June 30, 2002 was $37,665 greater than the recorded 6/30/2001 book value. 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 June 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 3/31/2002 % of Balance Total Balance Total General Fund $43,616,325 45% $37,777,522 42% Restricted - Special Revenue Funds $2,135,445 2% $1,611,319 2% . (I.e. Gas Tax, Special Taxes) Restricted ~ Assessment District Funds $666,013 1% $544,122 1% (i.e. Landscape Maint & Debt Service) Restricted - Impact Fees $42,373,826 45% $42,476,022 48% Internal Service /Replacement Funds $6,230,889 7% $5,981,281 7% TOTAL $95,022,498 100% $88,390,266 100% CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT Thc total amount shown as invested in the Primary Investment Portfolio is $6,632,232 more than the amount shown at March 31, 2002, primarily due to receipts of property and sales taxes during the quarter. Overall, the combined rate for thc total portfolio decreased from 4.124% at March 31, 2002 to 3.749% at June 30, 2002. The decrease was attributable to the calling of thc federal securities noted above, a decrease in thc rate of return on the City's LAIF investments operated by thc State Treasurer, as well as a decline in thc rate of return on money market funds during the quarter. The quarterly average for the City's LAIF investment was 2.75% as of June 30, 2002, which was lower than the 2.97% rate recorded for the quarter ending March 31, 2002. LAIF is a liquid investment, and the current LAIF rate remains favorable compar6d 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 4th QUARTER FY 2001-2002 SECTION 1 PRIMARY INVE S TMENT PORTFOLIO CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN June 30, 2002 COUPON MATURITY VALUE AT INTEREST BOOK MARKET INVESTMENT IST CALL DATE DATE MATURITY RATE YIELD VALUE VALUE FEDERAL SECURITIES FFILB 8/15/2002 1 2,000,000 6.000% 6.200% 2,041,560 2,010,000 FHLB 11/6/2002 1 1,000,000 5.940% 6.780% 1,020,940 1,013,750 FHLB 2/14/2003 1 1,000,000 7.000% 7.01 0O/O 1,038,440 1,030,310 FHLB 9/2/2003 2 1,000,000 5.627% 6.910% 1,016,250 1,035,000 FNMA 11/14/2003 2 1,000,000 4.750% 6.920% 999,530 1,030,940 FHLB 7/8/02 10/8/2004 3 3,900,000 4.300% 4.300% 3,900,000 3,901,209 FHLB 10/15/2004 3 3,000,000 4.125% 4.125% 3,000,000 3,001,890 FHLB 12/15/2004 3 3,000,000 3.875% 4.240% 2,971,740 3,035,640 FNMA 6/27/03 12/20/2004 3 1,000,000 3.800% 3.800% 1,000,000 1,011,250 FHLB 6/27/03 12/27/2004 3 6,500,000 3.815% 3.815% 6,500,000 6,552,845 FHLB 7/11/02 1/11/2005 3 3,000,000 5.100% 5.100% 3,000,000 3,001,890 FHLB 7/18/03 7/18/2005 4 3,000,000 5.220% 5.220% 3,000,000 3,090,000 FHLB 1/17/03 1/17/2006 4 5,000,000 5.420% 5.420% 5,000,000 5,089,050 FFCB 12/20/02 12/20/2006 5 5,000,000 5.340% 5.420% 5,000,000 5,070,300 FHLMC 1/3/2007 5 500,000 6.525% 5.200% 527,730 545,155 FFCB 1/23/2007 5 421,000 4.600% 5.200% 410,273 425,210 FHLB 2/15/2007 5 4,000,000 4.875% 5.140% 3,954,320 4,083,760 TOTAL FEDERAL SECURITIES $44,321,000 4.986% $44,380,783 $44,928,199 CERTIFICATES OF DEPOSIT - FDIC INSURED United California Bank 12/9/2002 1 99,000 6.000% 6.000% 99,000 99,000 TOTAL CERTIFICATES OF DEPOSIT $99,000 6.000% $99,000 $99,000 MUTUAL FUNDS Nations Bank Government Reserves $7,188,000 1.690% $ 7, t 88,000 $7,188,000 Capital Fund Union Bank U.S. Govt Securities $1,460,515 1.420% $1,460,515 $1,460,515 Morgan Stanley Dean Witter U.S. Govt Securities See Note 1 5.523% (2) $1,594,497 $1,632,162 TOTAL MUTUAL FUNDS 2.248% $10,243,012 $10,280,677 POOLED PUBLIC AGENCY INVESTMENTS State of CA.- Local Agency Investment Fund (LAIF) $39,714,622 2.750% $39,714,622 $39,714,622 TOTAL INVESTED PORTFOLIO 3.749% $94,437,417 $95,022,498 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 book value reflects the market value on June 30, 2001, as required by current governmental accounting roles. (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) $49,995,299 52% Maturing in 1 year or less $4,153,060 4% Maturing in 1-2 years $2,065,940 2% Maturing in 2-3 years $20,504,724 22% Maturing in 3-4 years $8,179,050 9% Maturing in 4-5 years $10,124,425 11% Total Portfolio $95,022,498 100% ITEM 1 CITY OF DUBLIN SUMMARY OF INVESTMENT PORTFOLIO COMPARISON BY INVESTMENT TYPE June 30, 2002 MARKET % OF MATURITY TYPE OF INSTRUMENT FACE VALUE BOOK VALUE VALUE PORTFOLIO YEARS Federal Home Loan Bank (FHLB) 37,400,000 37,443,250 37,856,594 39.6% 2.6 Federal Farm Credit Bureau (FFCB) 5,421,000 5,410,273 5,495,510 5.7% 4.5 Federal National Mortgage Assn (FNMA) 1,000,000 999,530 1,030,940 1.1% 1.4 Federal Home Loan Mortgage Corporation (FHLMC) 500,000 527,730 545,155 0.5% 4.5 SUB -TOTAL GOVT/AGENCY 44,321,000 44,380,783 44,928,199 0) 47.0% 2.8 Certificates of Deposit- FDIC Insured 99,000 99,000 99,000 0.1% 0.4 Mutual Funds Morgan Stanley Dean Witter U.S. Govt Securities 1,594,497 1,594,497 1,632,162 (2) 1.7% 5.0 (3) Union Bank U.S. Govt Securities 1,460,515 1,460,515 1,460,515 1.5% N/A Nations Bank Government Reserves Capital Fund 7,188,000 7,188,000 7,188,000 7.6% N/A LAIF 39,714,622 39,714,622 39,714,622 42.1% N/A GRAND TOTAL $94,377,634 $94,437,417 $95,022,498 100.0% NOTES: (1) The City intends to hold the investments until maturity or until market values equal or exceed their face value. (2) Book Value is shown as the value recorded in the General Ledger based on the market value at 6/30/2001. (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. CITY OF DUBLIN QUARTERLY INVESTMENT REPORT 4th QUARTER FY 2001-2002 SECTION 11 LISTING 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 June 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 6/30/2002 Petty Cash - City $400.00 Petty Cash - Shannon Center $200.00 Cash Register - (5 Locations) $700.00 Subtotal $1,300.00 OPERATING CASH BALANCES - FINANCIAL INSTITUTIONS Balance 6/30/2002 Annualized Rate of Interest BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With $437,338 .5% California Government Code NATIONS BANK U.S. Treasury Reserves Adviser $1,278,499 1.4245% Account (Sweep Account connected to Bank of America Deposits listed above) Cai Fed- Regular Savings Account: FDIC Insured $576 .75% Grand Total Amount Cash Balances: $1,716,413.0~0 SPECIAL FUNDS HELD BY TRUSTEES CITY OF DUBLIN DETAILED LISTING OF INVESTMENTS INCLUDING RATE OF RETURN FOR THE QUARTER ENDING JUNE 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 1.42% $170,522 $170,522 NOTES: (1) A Mutual Fund does not have a stated maturity date and shares can be sold at any time.