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HomeMy WebLinkAbout4.04 CTInvestRpt96-97 I . . .. CITY CLERK File # D~[2.][Q)-~k2J ~ AGENDA STATEMENT CITY COUNCIL MEETING DATE: (July 15,1997) SUBJECT: t.\n ,City Treasurer's Investment Report For 4th Quarter 96/97 ~<l)"'" Report Prepared by: Paul S. Rankin, Assistant City Manager Quarterly Investment Report (June 30, 1997) Section I ~ Primary Investment Portfolio Section II ~ Listing of Supplemental Monies Under City '1 r../ Possession and/or Control ~ ~,. Receive Report \ EXHIBITS ATTACHED: RECOMMENDATION: DESCRIPTION: The attached Investment Report details the City's investments as of June 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 fourth quarter of Fiscal Year 1996/97 are discussed in the staffreport below. INVESTMENT ACTIVITY IN FOURTH QUARTER FISCAL YEAR 1996/97 During the Fourth Quarter one security in the amount of $1,205,000 matured. The following Table provides details on Matured Investments: INVESTMENTS WHICH MATURED APRIL - JUNE 1997 TYPE Matured Federal Securities FNMA AMOUNT ORIGINAL MATURITY INTEREST RATE $1,205,000 6/1 0/97 7.660% The interest rate shown represents the amortized yield earned on this investment as it was purchased in 1992 at a premium. The proceeds from this matured investment, along with other available monies, were used to purchase two securities totaling $2,000,000, as discuSsed below: INVESTMENTS PURCHASED FOURTH QUARTER FISCAL YEAR 1996/97 CALL INTEREST TYPE AMOUNT MATURITY DATE RATE Federal Securities: FNMA 1,000,000 4/11/1999 None 6.430% '. FHLB 1,000,000 6/23/2000 9f23/97 6.700% ------------------------------------------------------------------- COPIES TO: ITEMNo.~.4 The FNMA security was purchased at a $560 discount and has no call option. 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. The first option for an early call on the FHLB security is in the next quarter on the September 1997 interest payment. Thereafter, the FHLB security can only be called on the quarterly interest payment 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 1.23 years. The purchases in the fourth quarter extend the average maturity to approximately 1.55 years. DET A IT ,ED LISTING OF PRIMARY PORTFOLIO Government and Agency Securities represent the largest portion of the PrimaIy Portfolio. A detailed listing of each security is provided along with a snmmary 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 May 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 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. In Fiscal Year 1996/97 the City has elected to receive its dividend shares on a monthly basis. During the fiscal year the City received . approximately $99,990 in dividends from this investment, resulting in an annual yield of approximately 5.882%. CHANGES IN THE TOTAL PORTFOLIO YIELD FROM THE PREVIOUS REPORT The total amount shown as invested in the Primary Investment Portfolio is approximately $3,233,670 more than the amount shown at March 31, 1997. The amount invested in Federal Securities increased by $808,670, while the City's investment in the Local Agency Investment Fund (LAIF) increased by $2,425,000. The receipt of the second installment of property taxes/as well as impact fees and building permit fees collected from new housing developments in Eastern Dublin, contributed significantly to this increase. In addition, Staff made a one day transfer of $900,000 from operating funds to LAIF in order to minimi7.e the charges imposed by the bank for the 4th quarter on its checking account. These monies were transferred back into the checking account on July 1st and used to pay the City's wammt requests issued on June 30, 1997. The total ann11al earnings on th~ portfolio will be presented as part of the Annual Audit Report, once all year end accruals have been made. Overall, the combined rate for the total portfolio decreased slightly from 5.697% at March 31, 1997 to 5.691% at June 30, 1997. The change was related primarily to the maturity of $1,205,000 of federal securities, with a yield of 7.66%, which were replaced with two new federal securities with lower yields. The quarterly average for the City's investment in the State's Local Agency Investment Fund (LAIF) was 5.637% as of June 29, 1997, which was slightly higher than the 5.580% rate recorded for the quarter ending March 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. . The City Treasmer 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. . . . 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 ENDED JUNE 30,1997 . MATURITY VALUE AT DATE MATURITY COUPON INTEREST RATE YIELD BOOK VALUE MARKET VALUE INVESTMENT FEDERAL SECURITIES FHLMC (Callable 2/26/97) 2/26/98 $500,000.00 5.100% 5.1 00% $500,000.00 $497,420.00 FNMA (Callable 5/13/96) 5/13/98 500,000.00 5.250% 5.482% 499,625.00 496,875.00 FHLMC (Callable 9/9/94) 9/9/98 500,000.00 4.950"10 5.020% 499,726.54 492,420.00 FNMA (Callable 10/15/96) 10/15/98 1,000,000.00 4.875% 4.889% 999,901.07 982,030.00 U.S. Treasury Note 10/31/98 1,000,000.00 4.750% 5.101% 997,703.14 982,660.00 FHLB (Callable 11/3/94) 11/3/98 1,000.000.00 5.110% 5.110% 1,000,000.00 986,410.00 FNMA (Callable 12/10/96) 12/10/98 1,000,000.00 5.310% 5.311% 999,914.07 986,720.00 SLMA (Callable 12/18/97) 12/18/98 500,000.00 5.800% 5.800% 500,000.00 497,185.00 FFCB (Callable 12/18/96) 12/18/98 500,000.00 5.850% 5.850% 500,000.00 497,110.00 FHLMC(Callable 12/24/97) 12/24/98 1,000,000.00 6.000% 6.000% 1,000,000.00 996,880.00 FHLB (Callable 6/29/96) 12/29/98 500,000.00 5.950"10 5.950% 500,000.00 497,735.00 FNMA (Callable 12130/96) 12130/98 500,000.00 5.890% 5.890% 500,000.00 497,185.00 FHLB (Callable 1/12/95) 1/12199 2,000,000.00 5.460% 5.460% 2,000,000.00 1,976,880.00 FNMA (Callable 2/12/96) 2/12/99 400,000.00 5.550% 5.564% 399,945.85 395,500.00 FID...B (Callable 2/12/98) 2/12199 1,000,000.00 6.125% 6.125% 1,000,000.00 997,030.00 FFCB (Callable 9/19/97) 3/19/99 1,000,000.00 6.570% 6.570% 1,000,000.00 1,000,000.00 FHLB (Callable 3/26/97) 3/26/99 500,000.00 6.250% 6.250% 500,000.00 498,205.00 FNMA (No Call Date) 4/11/99 1,000,000.00 6.430% 6.460% 999,510.00 1,001,720.00 FHLB (Callable 9/23/97) 6/23/00 1,000,000.00 6.700% 6.700% 1,000,000.00 1.000.000. TOTAL FEDERAL SECURITIES $15,400,000.00 5.720"10 $15,396,325.67 $15,279,965. 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 1217/97 99,000.00 5.600"10 5.600"10 99,000.00 99,000.00 World Savings 1/29/98 1 00,000.00 6.010"10 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 5.4 77% $689,000.00 $689,000.00 MUTUAL FUND Dean Winer U.S. Government Securities See Note 1 5.882% (2) $1,699,995.50 $1,599,877.86 POOLED PUBLIC AGENCY INVESTMENTS State of CA.. Local Agency Investment Fund (LAIF) $11,400,000.00 5.637% (3) $11,400,000.00 $11,400,000.00 TOTAL INVESTED PORTFOLIO 5.691 % $29.185,321.17 $28.968.842.86 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 stralCgy 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 investment (3) Interest Rate shown is the quarterly average as of June 29, 1997. ).. EXHIBIT 1 City of Dublin Summary Comparison of Investment Portfolio by Type For the Quarter Ended June 30, 1997 . LAIF 39% Dean Witter Mutual Fund 6% Certificates of Deposit 2% TYPE OF INSTRUMENT FACE VALUE BOOK VALUE 51,000,000.00 5997,703.14 500,000.00 500,000.00 1,500,000.00 1,500,000.00 6,000,000.00 6,000,000.00 U.S. Treasury Notes . Student Loan Marketing Assn (SLMA) Federal Fann Credit Bureau (FFCB) Federal Home Loan Bank (FlD..B) Fed Home Loan Mortgage Corp (FHLMC) 2,000,000.00 1,999,726.54 Federal Securities 53% MARKET VALUE 5982,660.00 497,185.00 1,497,110.00 5,956.260.00 1,986,720.00 Federal National Mortgage Assn (FNMA) SUB -TOTAL GOVT/AGENCY 4,400,000.00 15,400,000.00 4,398,895.99 4,360,030.00 15,396,325.67 -. : ~5,279,965.00 (1) Certificates of Deposit - FDIC Insured 689,000.00 689,000.00 Mutual Funds ~ Dean Witter U.S. Govt Securities (.) 1,699,995.50 1,699,995.50 LAIF 11,400,000.00 11,400,000.00 689,000.00 1,599,877.86 (2) 11,400,000.00 GRAND TOTAL $29,188,995.50 $29,185,321.17 $28,968,842.86 NOTES: %OF MATURITY PORTFOLIO YEARS 6.5% 1.34 3.2% 1.47 9.7% 1.63 39.0% 2.32 13.0"10 1.21 28.6% 52.8% 1.44 1.55 2.4% 0.83 5.8% 5.5 (3) 39.1% N/A 100.0"/.. (1) The City intends to hold the investments until maturity or until market values equal or exceed the cwrent book value (Amortized Cost). (2) Market value is based upon the shares invested at share price as of June 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 1995. (4) 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. . EXHIBIT 2 . 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 . : 'I . City of Dublin Report of Operating Funds On Hand As of June 30,1997 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 'ffiAT TIllS AMOUNT MAY REFLECT FUNDS REQUIRED TO COVER PAYMENTS ALREADY ISSUED AND CHECKS WHICH HA VB NOT CLEARED AS OF TIffi 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 06130/97 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 6130/97 Annualized Rate of Interest BANK OF AMERICA- Collateralized Public Money Deposits In Accordance With California Government Code $193,835.60 See Note 1 First Nationwide Bank- Regular Savings Account: FDIC Insured $ 1,079.60 2.01% Grand Total Amount Cash Balances: $194.915.20 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. .5 b tI:l (;oil (;oil p.. tI:l :::J I:( p.. >- := Q ..:l (;oil :: tI:l Q Z; :::J (;;, ..:l < - U (;oil Q., tI:l tI:l p.. 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