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HomeMy WebLinkAboutFin Investment Report 2012.01CITY QF OM n. 1 Agenda Item No: 3 i. Meeting Date: March 5, 2012 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: FINANCE A Prepared by: Van Bach City Manager Approval, n14L4JX__&% Accounting Supervisor SUBJECT: INVESTMENT REPORT FOR JANUARY 2012 RECOMMENDATION: ACCEPT INVESTMENT REPORT FOR THE MONTH ENDING JANUARY 31, 2012, AS PRESENTED BACKGROUND: Pursuant to the State of California Government Code Section 53601, staff is required to provide the governing body a report on the City's investment activities. Each month the Finance Department prepares a report outlining the major investments for the preceding month. Included on the report are the cost of each investment, the interest rates (yield), maturity dates, and market value. Separate schedules are prepared for both the City and Redevelopment Agency. Beginning in January 2005, the City established a contract with MBIA to administer cash management services to a portion of our portfolio. In February 2010, MBIA restructured its fixed-income asset management subsidiary and changed their name to Cutwater Asset Management (Cutwater). Services provided by Cutwater include updating our investment policy annually, cash flow administration, and procurement of various instruments using Cutwater's market expertise (aligned with our needs). In addition, Cutwater prepares a comprehensive monthly investment report that meets not only required reporting information required by State law, but can be used as an asset management tool. The January report contains information regarding the Cutwater managed operating funds, excluding our West America checking account, which had a balance of $2,414,348 at month end. The Cutwater reports are very detailed. This report focuses on those pages that the community and Council might find most useful and informative. ANALYSIS: I will summarize elements of the key pages contained as an attachment with this report. ❖ Page 2 — Review of fixed income securities market — The Federal Open Market Committee met on January 25th and once again kept the fed funds target rate at a range of zero to 0.25 percent. FOR CITY CLERK ONLY File No.: Council Meeting: _-2 ,15, Disposition: ^� Page 8— Recap of Securities Held —Thka page summarizes all ofour operating funds. The chart shows a majority of our investments are in U.G. instrumentalities. Most of the City's liquid funds are held in the Stade of California LAW (Local Agency |nweoinnerd Fund) poo|, which is used aaadaily account for withdrawals and deposits. Unrealized gains orlosses are recorded only at fiscal year end for accounting purposes. ^� Page 7 - Reflects Maturity Distribution -A|| Vfour operating cash funds are held to mature in less than one year (January 2013). One hundred percent of the total invested cash matures within 8Odays (again.the LAW pool accounting for most ofthese do||ang). ^� Individual security information is presented on the "Securities Specific information is presented to show interest coupon rates, cost and fair values, earned income and projected net yields. Acquiring diversified instruments with varying maturity dates allows the market values to stay close to historical cost. d on separate pages. This includes LAW deposits and withdrawals for operating funds. LAW activity reflects the need to transfer cash as large receipts are deposited (monthly sales tax payments and January's 55% property tax receipt) and expenses are incurred (weekly vendor payments and Se[ni'OloDth|y payroll). For Jomuary, our LAIF account has a balance of $35,998,587. Portfolio returns on L/\F dollars should beabout D.38percent for January 2O12. The percentage ofinvestments held one year orless |sone hundred percent atmonth end. FISCAL IMPACT: Nofinancial impact occurs bvadopting the report. The City continues bomeet the priority principlesof investing - s_e''. liquidity and yield in respective order. The portfolio remains conservatively invested. Sufficient liquidity exists to meet daily operating and capital project requirements for the next six months. Operating funds, as defined for this report, exclude cash held with fiao@| agents for the payment ofbond principal and interest. OPTIONS/ACTION REQUIRED: The City Council should adopt the report as presented in order to satisfy current State Investment Code requirements and City policy. ATTACHMENTS WAManagement Services- WorkFile\Finence- WorkFi»e\Counci|MateriakStaff Reports\201 1 \City\cityinvrpt1 2201.doc SAN RAFAEL CITY COUNCIL AGENDA REPORT 1 Page: 3 TREASURER'S CERTIFICATION I CERTIFY THAT ALL INVESTMENTS MADE ARE IN CONFORMANCE WITH THE CITY'S APPROVED INVESTMENT POLICY AND STATE INVESTMENT REGULATIONS. THE CITY HAS SUFFICIENT LIQUIDITY TO MEET ALL OF THE OBLIGATIONS REQUIRED DURING THE NEXT SIX-MONTH PERIOD. — 211za"I 7�_ MARK MOSES INTERIM FINANCE DIRECTOR C3 C) C\l tct C\l T— C) N C— CU _0 0 (D CL O r - O4-a L- 0 CL N rrA cl >1 cz U 0 u 0) 0 , o to t 0� 0 cd 0 In > C) 0 u C-4 0 0 co r. cd zo mcd cu (D to C) cd 0 o 0 — r. a) u — 0 0 u A cl cl bQ 0 Q7-. -r. cn > 16 :3 U 'o 0 E "Cl (U (U 4° cd cd p 4. to U u 0 U co UCia) bA U bj) X 0 w 3(u p 0 Cj E , — 0. > 0 0 0 2 CIS a) 04 Q C) 0 x (U 0 0 4. 4. 4. X N (L) Cd O''D ^a 0 as -d Q. cn F• -::! (U oc -S4 0 0 0 0 C u 1� o := cn md -g (L) = cl O mm > CU 4. 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