HomeMy WebLinkAboutFin Investment Report 2011.12WrY OF�
Agenda Item No: 3 f. _
Meeting Date: January 17, 2012
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: FINANCE
Prepared by: Van Bach City Manager Approval:
Accounting Supervisor ho -
SUBJECT: INVESTMENT REPORT FOR DECEMBER 2011
RECOMMENDATION: ACCEPT INVESTMENT REPORT FOR THE MONTH ENDING
DECEMBER 31, 2011, AS PRESENTED
BACKGROUND:
Pursuant to the State of California Government Code Section 53601, staff is required to provide the
governing body a report regarding 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 instrument, 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 December report contains information regarding the Cutwater managed operating funds, excluding
our West America checking account, which had a balance of $3,770,263 at month end. The Cutwater
reports provide a fair amount of detail. I am highlighting 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 December 137t and once again kept the fed funds target rate at a range of zero to 0.25
percent.
FOR CITY CLERK ONLY
File No.: 19 -19
Council Meeting:
Disposition:
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
❖ Page 6 — Recap of Securities Held — This page summarizes all of our operating funds. The
chart shows a majority of our investments are in U.S. instrumentalities. Most of the City's liquid
funds are held in the State of California LAIF pool, which is used as a daily account for
withdrawals and deposits. Unrealized gains or losses are recorded only at fiscal year end for
accounting purposes.
❖ Page 7 - Reflects Maturity Distribution - All our operating cash funds are held to mature in less
than one year (December 2012). One hundred percent of the total invested cash matures
within 90 days (again, the LAIF pool accounting for most of these dollars).
❖ Individual security information is presented on the "Securities Held" (pages 8). 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.
❖ Purchases (page 10), sales (page 11) and transactions (/.)a-qe 12) are presented on separate
pages. This includes LAIF deposits and withdrawals for operating funds. Transaction for
December included a U.S. Instrumentality maturity -FHLB maturity. LAIF activity reflects the
need to move cash around as large receipts are deposited (monthly sales tax payments) and
expenses are incurred (weekly vendor payments and semi-monthly payroll).
Our LAIF balance for December ended with a balance of $29,872,933. Portfolio returns on LAIF
dollars should be about 0.40 percent for December 2011. The percentage of investments held one
year or less is one hundred percent at month end.
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 this 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.
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\Finance- WorkFilekCouncil Material\Staff Reports\2011kCity\cityinvrpt122011.doc
SAN RAFAEL CITY COUNCIL AGENDA REPORT / 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.
JANET PENDOLEY
INTERIM FINANCE DIRECTOR
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9RRA / SRCC AGENDA ITEM NO.
DATE OF
MEETING: -1/17/12
FROM: Janet Pendoley
DEPARTMENT: Finance Department
DATE: January 12, 2012
TITLE OF DOCUMENT: Investment Report for December 2011
Depafthr(ent Head (signature)
(LOWER HALF OF FORM FOR APPROVALS ONLY)
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City Attorney (signature)
