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Home My WebLink AboutFIN City Quarterly Investment Report____________________________________________________________________________________ FOR CITY CLERK ONLY File No.: 8-18 x 8-9 Council Meeting: 2/5/2018 Disposition: Accepted Report Agenda Item No: 4.g Meeting Date: February 5, 2018 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Finance Department Prepared by: Mark Moses Finance Director City Manager Approval: ______________ SUBJECT: QUARTERLY INVESTMENT REPORT RECOMMENDATION: ACCEPT INVESTMENT REPORT FOR THE QUARTER ENDING DECEMBER 31, 2017, AS PRESENTED BACKGROUND: Pursuant to the State of California Government Code Section 53601, and the City’s investment policy, last approved by the City Council on August 7, 2017, staff provides the governing body a quarterly report on the City's investment activities and liquidity. Included in the report are the cost of each investment, the interest rates (yield), maturity dates, and market value. Separate reports are prepared for the City and the Successor Agency to San Rafael Redevelopment Agency. The City invests a portion of its pooled funds in the Local Agency Investment Fund (LAIF), a State-run investment pool. Beginning in March 2014, the City incorporated an investment strategy that added purchases of securities outside of LAIF with the assistance of its investment advisor, Insight Investment. ANALYSIS: As of December 31, 2017, the primary LAIF account had a balance of $24,197,412. The other LAIF account holding housing funds for future administrative expenses contained $145,792. Portfolio returns on LAIF deposits were 1.18% for the quarter. The remaining investment assets included the $1,455,700 balance of Pt. San Pedro Assessment District bonds, and $23,078,810 in government agency securities and corporate bonds (including T-Note, Walt Disney Company, Apple Inc., Toyota Motor Credit Corp., Pepsico Inc., and FNMA). The overall portfolio return for the quarter ended December 31, 2017 was 1.36%. The City’s Westamerica account had a balance of $9,802,364 at quarter end. Exhibit A is composed of three parts: (1) Quarterly Investment Portfolio Report; (2) Historical Activity By Quarter summarizing the City’s investments; and (3) the three monthly investment reports from Insight Investment for the quarter. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 FISCAL IMPACT: No financial impact occurs by adopting the report. The City continues to meet the priority principles of investing - safety, 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 fiscal agents for the payment of bond principal and interest. RECOMMENDATION: The City Council should accept the report as presented in order to satisfy State Investment Code requirements and City policy. Attachments: Quarterly Investment Portfolio Report Historical Activity by Quarter Report Insight Investment Statements October through December 2017 SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3 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. MARK MOSES FINANCE DIRECTOR %Return LAIF 24,197,412$99.4%1.18% LAIF - RDA 145,792$0.6%1.18% Total Internally Managed 24,343,203$49.8% Weighted Average Yield 1.18% Days Effective Average Duration - Internal 1 Weighted Average Maturity - Internal 1 %Return Cash 95,875$0.4%0.00% Treasury Securities 4,465,904$18.2%1.33% Instrumentality Securities 14,476,033$59.0%1.28% Corporate Notes 4,040,998$16.5%1.34% Municipal 1,455,700$5.9%5.25% Total Externally Managed 24,534,510$50.2% Weighted Average Yield 1.53% Years Effective Average Duration - External 2.00 Weighted Average Maturity - External 2.31 Total Portfolio Assets %Return LAIF 24,343,203$49.8%1.18% Cash 95,875$0.2%0.00% Treasury Securities 4,465,904$9.1%1.33% Instrumentality Securities 14,476,033$29.6%1.28% Corporate Notes 4,040,998$8.3%1.34% Municipal 1,455,700$3.0%5.25% Total Portfolio Assets 48,877,714$ Weighted Average Yield 1.36% Years Effective Average Duration - Total 1.01 Weighted Average Maturity - Total 1.16 Based on Market Values December 31, 2017 City of Rafael Quarterly Investment Portfolio Report Externally Managed Assets Internally Managed Assets LAIF, 99.4% LAIF -RDA, 0.6% Cash , 0.4%Treasury Securities, 18.2% Instrumentality Securities, 59.0% Corporate Notes, 16.5% LAIF 50% Cash 0% Treasury Securities 9% Instrumentality Securities 30% Corporate Notes 8%Municipal 3% Exhibit A Internally Managed Assets %Return %Return %Return %Return %Return LAIF 24,197,411$99.4%1.18%26,120,827$99.4%1.08%34,063,133$99.6%0.91%24,021,598$99.4%0.78%15,987,701$99.1%0.72% LAIF - Housing 145,792$0.6%1.18%145,398$0.6%1.08%145,064$0.4%0.91%144,787$0.6%0.78%144,541$0.9%0.72% Total Internally Managed 24,343,203$49.8%26,266,225$51.7%34,208,197$58.2%24,166,385$49.6%16,132,242$39.7% Weighted Average Yield 1.18%1.08%0.91%0.78%0.72% Days Days Days Days Days Effective Average Duration - Internal 1 1 1 1 1 Weighted Average Maturity - Internal 1 1 1 1 1 Externally Managed Assets %Return %Return %Return %Return %Return Cash 95,875$0.4%0.00%132,133$0.5%0.00%34,392$0.1%0.00%152,566$0.6%0.00%67,092$0.3%0.00% Commercial Paper -$0.0%0.00%-$0.0%0.00%-$0.0%0.00%-$0.0%0.00%-$0.0%0.00% Treasury Securities 4,465,904$18.2%1.33%4,390,921$17.9%1.21%4,146,098$16.9%1.08%3,498,184$14.2%0.93%2,997,481$12.2%0.85% Instrumentality Securities 14,476,033$59.0%1.28%14,554,167$59.2%1.17%14,829,261$60.3%1.02%14,823,678$60.4%0.96%15,326,190$62.6%0.96% Corporate Notes 4,040,998$16.5%1.34%4,053,171$16.5%1.34%4,058,635$16.5%1.27%4,559,554$18.6%1.26%4,557,757$18.6%1.18% Municipal/Assessment District 1,455,700$5.9%5.25%1,455,700$5.9%5.25%1,520,800$6.2%5.25%1,520,800$6.2%5.25%1,520,800$6.2%5.25% Total Externally Managed 24,534,510$50.2%24,586,091$48.3%24,589,185$41.8%24,554,781$50.4%24,469,318$60.3% Weighted Average Yield 1.53%1.44%1.33%1.27%1.25% Years Years Years Years Years Effective Average Duration - External 2.00 1.98 1.68 1.76 1.91 Weighted Average Maturity - External 2.31 2.37 2.03 2.07 2.25 Total Portfolio Assets %Return %Return %Return %Return %Return LAIF 24,343,203$49.8%1.18%26,266,225$51.7%1.08%34,208,197$58.2%0.91%24,166,385$49.6%0.78%16,132,242$39.7%0.72% Cash 95,875$0.2%0.00%132,133$0.3%0.00%34,392$0.1%0.00%152,566$0.3%0.00%67,092$0.2%0.00% Treasury Securities 4,465,904$9.1%1.33%4,390,921$8.6%1.21%4,146,098$7.1%1.08%3,498,184$7.2%0.93%2,997,481$0.0%0.00% Instrumentality Securities 14,476,033$29.6%1.28%14,554,167$28.6%1.17%14,829,261$25.2%1.02%14,823,678$30.4%0.96%15,326,190$37.7%0.85% Corporate Notes 4,040,998$8.3%1.34%4,053,171$8.0%1.34%4,058,635$6.9%1.27%4,559,554$9.4%1.26%4,557,757$11.2%0.96% Municipal/Assessment District 1,455,700$3.0%5.25%1,455,700$2.9%5.25%1,520,800$2.6%5.25%1,520,800$3.1%5.25%1,520,800$3.7%1.18% 48,877,713$50,852,316$58,797,383$48,721,166$40,601,560$100.0%5.25% Total Portfolio Assets Weighted Average Yield 1.36%1.25%1.09%1.03%1.04% Years Years Years Years Years Effective Average Duration - Total 1.01 0.96 0.70 0.89 1.15 Weighted Average Maturity - Total 1.16 1.15 0.85 1.04 1.36 Performance Recap -The weighted average quarterly portfolio yield increase from 1.25% to 1.36% during the past quarter. The yield has increased over the past year, from 1.04% in the quarter ended December 31, 2016 to 1.36% in the most recent quarter. -This trend is reflective of the general increase in interest rates that occurred througout the year. -The effective average duration has dropped, from 1.36 to 1.16 years as the City shortens its investments in preparation for drawing on funds accumulated for the San Rafael Essential Facilities Project. -The total portfolio assets decreased by approximately $2 million during the quarter. This is due to the spending down of funds while we await property tax receipts in late December. Funds received at the end of December remained in the City's checking account at quarter-end. December 31, 2017 City of San Rafael Historical Activity-By Quarter September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 W:\Accounting and Budgeting\Finance\Bank Reconciliations\Statements\17-18\December 2017\Quarterly Report combined 12-31-17.xlsx STAFF REPORT APPROVAL ROUTING SLIP Staff Report Author: Mark Moses Date of Meeting: 02/05/2018 Department: Finance Department Topic: City-Quarterly Investment Report 12-31-17 Subject: City-Quarterly Investment Report 12-31-17 Type: (check all that apply) ☒ Consent Calendar ☐ Public Hearing ☐ Discussion Item ☐ Resolution ☐ Ordinance ☐ Professional Services Agreement ☐ Informational Report *If PSA, City Attorney approval is required prior to start of staff report approval process Was agenda item publicly noticed? ☐ Yes ☐No Date noticed: ☐Mailed ☐Site posted ☐Marin IJ Due Date Responsibility Description Completed Date Initial / Comment DEPARTMENT REVIEW FRIDAY noon Director Director approves staff report is ready for ACM, City Attorney & Finance review. Click here to enter a date. ☐ CONTENT REVIEW MONDAY morning Assistant City Manager City Attorney Finance ACM, City Attorney & Finance will review items, make edits using track changes and ask questions using comments. Items will be returned to the author by end of day Wednesday. Click here to enter a date. Click here to enter a date. Click here to enter a date. ☐ ☐ ☐ DEPARTMENT REVISIONS WEDNESDAY noon Author Author revises the report based on comments receives and produces a final version (all track changes and comments removed) by Friday at noon. Click here to enter a date. ☐ ACM, CITY ATTORNEY, FINANCE FINAL APPROVAL MONDAY morning Assistant City Manager City Attorney ACM, City Attorney & Finance will check to see their comments were adequately addressed and sign-off for the City Click here to enter a date. Click here to enter a date. ☐ ☐ Finance Manager to conduct the final review. Click here to enter a date. ☐ TUES noon City Manager Final review and approval Click here to enter a date. ☐