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08. Treasurer's ReportADMINISTRATIVE SERVICES DEPARTMENT I~ ~ CITY HALL '10300 TORRE AVENUE - CUPERTINO, CA 950'14-3255 C O P E RT I N O <4os) 777-3220 • FAX (408) 777-3109 SUNIlVIA.RY Agenda Item No. _-~ Meeting Date: December 2, 2008 SUBJECT AND ISSUE Accept the Treasurer's Investment Report for October 2008. BACKGROiTND This portfolio reflects the outcome of the massive re-positioning into U.S. Treasuries discussed in the investment report to the Council on October 21, 2008. Treasuries rose from 27% of investments to 59%, while the. Local Agency Investment Fund (LAIF) portion dropped from 31 % to 1 %, with $3 million in maturing federal agency notes also re- invested into Treasuries. As expected with such a shift into safety, the portfolio's yield decreased significantly, dropping to 1.79% at October 31, 2008 compared to 2.77% the previous month, and 4.85% a year ago. The portfolio's market value equaled its cost of $58.3 million, with no month-to-month change: in unrealized gain or loss, as investors' demand for Treasuries kept their prices high. L.~IF's yield was 2.71% for October, down from 2.77% the previous month and 5.14% a ;year ago. The portfolio's return is 0.92% below the LAIF benchmark. The city's cash balance decreased $1.3 million from the previous month due to Mary Avenue Bicycle Footbridge, Stevens Creek Corridor Park, and street project outlays. Investments are in full compliance with city investment policy and/or state law, and are tiered to provide sufficient cash flows to pay city obligations over the next six months. RECOMMENDATION Accept the Treasurer's Investment Report for October 2008. Submitted by: Approved for submission: David Woo David W. Kna p Deputy Treasurer Cit}~ Manager Reviewed by: ~~ ~ Carol A. Atwood City Treasurer e-~ Treasurer's Investment and Budget Report December 2, 2008 Page 2 of 2 Attachments= 1. Investment Portfolio 2. Rate of Return Comparison and- Investments by Type 3. Compliance with Investment Policy 8-2 city of Cupertino Investment Portfolio October 3,1, 2008 _ o Maturi L1JE-- SECURI'T'IES MATURED T , 07/17/08 1 O/16/OH SpiritBank, Bristow OK 4.88% 4.88 % 98,032 98,032 98,032 O 0728/08 10/OI/OH FFCB discount note 2.68% 2.77% 1,00Q000 1,000,000 1,000,000 - O 07/30/06 1023/08 FHLB discount note 2.40% 2.41 % 2,000,000 2,000,000 2,000,000 O 12/07/07 10/31/08 - US Treasury Note 4.88% 327% 1,000,000 ___ _ _ 1,000,000 1,000,000 ___ O 12/70/07 --' 10/31/0 8 -- ry US Treasu Note 4.88% 325% 1,000,000 ---_.._.__.__..._._.....- 1,000,000 1,000,000 ------'--- O _ . ___ SECURITIES PURCFIASED ~-----~~---~-_- _ -__-_-~-__~~--_-_~--- - 10/IS/08 12/11/08 US Treasury Biit O.OS% O.OS% ~ 1,999,8$6 2,000,000 1,999,500 (386) 10/17/08 /2/IS/OS _ US Treasury Bii( 025% 0.25% 2,999,000 3,000,000 2,998,380 (620) ' 70/15/08 1226/08 US Treasury Bill 0.20% 0.20% 999, 659 1,000,000 999,580 (]09) 10/17/08 01/02/09 US Treasury Bill 0.30% 0.30% _ 1,998,950_ ___ 2,000,000 1,998,580 (370) 10/15/08 ~ 01/08/09 T reasury Bill US O.IO% 0.10% 999,808 1,000,000 999,320 (488) ]O/15/O8 _ 01/15/09 _ _ US Treasury Bill 0.25% 0.25% 999,472 ______ 1,000,000 999,260 _______ (212) _____ 1_0/17/0$_ OI/15/09 US T_rea_sury Bill ~ 0.30% 0.30% 1,998,733 _2_,_0_00,000 1,998,52 0 (213) _ 10/15/08 0122/09 Treasury Bi11 US 0.15% 0.15^/0 999,654 1,000_,_000 _ __ _999,34 0 ____ (314) 10/15/08 02/05/09 US Treasury Bill 0.30% 0.30% 999,192 1,000,000 _ _ 998,SSD (642) 10/IS/OS 02/19/09 __ US Treasury Bill 0.45 % 0.45% - 998,613 1,000,000 __ _ __ ^ 998,480 _ (133) IO/15/OS 0226/09 US Treasury Bill _ 0.45% __ 0.46% _ 998,525 1,OOQ,000 ____ 998,460 _ (65) 10/15/08 _03/05/09 US Treasury Bill - 0.60% 0.61 % __ 997,917 1,000,000 995,090 173 10/IS/OS 03/]2/09 US Treasury Bill 0.60% 0.61% 997,800 _ 1,000,000 997,860 - 60 10/15/OS 03/19/09 US Treasury Bill 0.60% 0.61% 997,683 __1,000,000 997,430 (253) 1020/08 0429/09 US Treasury Cash Management Bill 1.20% 1.22°/ - - 1,491,000 1,500,000 1,493,250 2,250 1023/0_8 __ 1120/08 ~ First National Bank of Olathe, Olathe KS 4.88 % 4.88 % __ 99,000 99,000 _99,000 O 1023/08 1 120/08 USA Bank, $ort Chester NY 4.88% 4.88% 297 297 297 0 CITY PORTFOLIO _____.___.-___ _ __._ _..-_- CASH - . 1D/3l/OH Wells Fargo -Workers Comp Checking ___ - 18,329 18,329 18,329 0 ]0!31/08 Wells Fargo-R_egula_r Checking ~ 757,122 _____ 757,122 757,122 ~ O - 10/31/08 Wells Fargo -Investment Sweep 0.10% 0.10% 524,572 __ 524,572 524,572 O 1,300,023 - 1,300,023 1,300,023 O L_AIF_ __ _ - _ _ _ 10/31/08 LAIF - State Pool ~ 2.71% 2.71% ____ 565,709 568,109 565,109 ~ O CERTIFICATES OP DEPOSIT 112 3/07 1120/08 Arizona Bank 8c Trust, Chandler AZ 4.88 % 4.88 % 10,108 10,108 - L0,108 O _ _ __ 1123/07 1120/08 Ban_ktmst, Santa Rosa Beach FL 4.58% 4.88% 94,000 __ 94,000 94,000 O _ 1 12_3/07 1 120/OS Yadkin Valley Bank 8c Trost Co, Elkin 4.88 % 4.88% 94,000 94,000 94,000 O 1 123/07 1120/08 Colonial Bank NA, Montgomery AL 4.88% 4.88% 94,000 94,000 94,000 O 1123/07 1 !20/08 Covenant Bank, Clarksdale MS 4.88% 4.88 % 94,000 94,000 94,000 - 0 1 123/07 1 120/08 Four Oaks Bank 8c Trost, Four Oaks NC 4.88% 4.88% 94,000 94,000 94,000 O _ 1 123/07 - 1 120/08 Iohnson Bank, Racine WI 4.88% 4.88% __9_4,000 94,000 94,000 _ _ O ~ 11 23/07 1120/08 Midwest Bank Western Li., Monmouth II 4.88% 4.88% 94,000 94,000 94,000 O __ _ 1123/D7 1120/08 Solutions Bank, Medicine Lodge ICS 4,88% 4.88% 48,892 48,892 48,892 O 1123/07 1120/08 Brand Banking Co, Lawrenceville GA 4,88% 4.88% ~ 94,000 94,000 94,000 O 1123/07 1120/08 Vision Bank, Panama City FL 4.88% 4.88% 94,000 94,0 94,000 O_ __ _ 1023/08 __ 1120/08 First National Bank of Olathe, Olathe KS 4.88% 4.88% 99,000 99,000 99,000 O 1023/08 1 120/08 USA Bank, Port Chester NY 4.88% 4. 88% 297 297 __ _ 297 O 03/17/04 03/17/09 Peoples State Bank 3.40% _ 3.40% _ __ ____ 99,000 99,000 98,895 (105) 0324/04 0324/09 Washita State Ba_n k, Bums Flat OK 3.35% 3.35% 99,000 _99,000 98,874 (126) 12/30/05 _1_2/30/09 Meridian Bank NA, Wickenburg AZ __ 4_._80% __4.80% 99,0 00 _ __ 99,000 99,5_27 ____ 527 1228/05 _.._.--- 1228/1 O Neff Bank of New York City, NY ---- _ _ 4.90% 4.90% __ _ 97,000 97,000 ~----- 95,115 (1,885) ---- - _ 3 - --_.~~ ~ -~1 ,395,297 ~~~ ~ ],398,297 1,396,708 --~ (1,589) City of Cupertino Investment Portfolio October 3I, 2008 - - - Tom- ~S'I'E- o Ma ~ ~L~E V]~UI~ ICS MONEY MARKET FUNDS - 10/31/08 _ Wells Fargo 100%Treasury 0.67% 0.67% 4,341,032 4,341,032 4,341,032 0 4,341,032 4,341,032 4,341,032 O AGENCY N07"F_.S 07/30/08 12/19/08 Fl-I1.B discount note 2.50% 2.52% 996,598 1,000,000 999,500 2,902 _ 06 26/ 08 06!26/09 FI-ILB callable 3.13% 3.13% 1,000,000 I,OOQO00 1,000,940 940 ______ _ _ ~0122/O8 08/03/09 FFCB 525% 2.55% 1,019,843 1,000,000 1,017,810 (2,033) 0923/08 0923/09 FFCB 2.70% .2.57% 1,001,120 1,000,000 997,500 (3,620) 06/30/08 12/30/09 FHLB Callable 3.25°~ 325% 1,OOQ000 1,000,000 1,000,310 310 _ 0528/08 0226/10 _ FHLB callable 3.00% 3.00% 1,000,000 _______7,0_00,_000 997,!90 (2,810) 0625/08 05/07/10 ____ FFCB 4.75% 3.38% 1,019,927 1,000,000 1,021,560 1,633 0520/08 0520/10 FFCB callable - ~ 394% 3.34% 1,000,000 1,000,000 1,000,000 O 05/07!08 06/11/10 FI-ILB 3.00% 2.98% 1,000,323 _1,0_00,000 996,560 (3,763) 06/18/08 06/18/10 _______ FI-1LB callable 3.35% 3.35% 1,000,000 1,000,000 997,500 (2,500) 0728/08 0728/10 ________ FFCB callable - 3.30% 3.30% 1,000,000 1,000,000 1,000,000 _____ _ _O_ 08/18/08 08/18/10 FFCB callable 3.57% 3.57% 1,000,000 1,000,000 1,002,500 2,500 0527/08 0827/10 FHL.B callable 3.30% 3.30% 1,00_0,000 1,000,000 I,OOQO0O O 11/19/07 11/19/10 FFCB callable 4.63% 4.63% 1,000,000 I,0OQO00 1,OOQ940 940 05/19/08 11/19/10 FHLB Callable 3.15% 3.15% 1,000,000 __ 1,000,000 997,500 (2,500) 0528/08 0228/11 FHLB callable - 3.40% 3.40% 1,OOQ00O 1,000,000 1,000,310 310 16,037,811 16,000,000 ]6,030,120 (7,691) ___ ___ __ US TREASURY SECURlT1ES 12/07/07 I1/15/OS US Treasury Note 4.38% 3.3 t% - 1,000,422 ___ 1,000,000 1,001,170 748 12/10/07 I1/15/OH US Treasury Note 4.38% 3.27% ],000,440 1,000,000 1,001,170 730 10/15/08 12/11/08 US Treasury BiII O.OS% O.OS% 1,999,886 2,000,000 ____ 1,999,500 ________ (386) 70/17/08 12/18/08 US "treasury Bill _0.25% 0:25% 2,999,000 3,000,000 _ _ 2,998,380 ~ ______ _ (620) ]0/15/08 1226/08 US Treasury Bill 0.20% 0.20% 999,689 I,O0O,O00 ___ 999,580 _ ____ (109)_ 12/10/07 12/31/08 US Treasury Note_ 4.75° /u 3.18% 2,005,073 2,000,000_ __ _ 2,012,820 7,747 10/17/08 07/02/09 _________ US Treasury Bill _____ _ 0.30% __ 0.30% 1,998,950 2,000,000 _ !,998,580 ~ (370) 1O/IS/O8 01/08/09 ____ US Treasury Bill _ __ 0.70% __ 0.10% __ 999,808 1,000,000 999,320_ (488) /1 10 5/OH __ 01/1 5/09 US Treasury $ill 025% 025% __9_9_9,472 1,000,000 999,260 (212) _____ _ _ _ 10/17/08 ______ _ O1/IS/09 US Treasury Bill 0.30% 0.30% 1,998,733 _____- 2,000,000 1,998,520 (213) -_.. ....___..-_._._..__.._ 10 /15 /O S ._._.____.__._....._ 1 22/09 0 S Treasury Bill U o 0.15% 0.15% 999,654 1,000,000 999,340 (314) _ _____ _ _ 1220/07 _ __ _ ~ 07/31/09 _ US Treasury Note ~ 4.88% 3.06% 1,004,439 1,000,000 1,010,080 __5,641 _ __ 10/15/08 _ 2/05/09 0 US Treasury Bill 0.30% 0.30% 999,192 1,000,000 998,550 (642) ___ 02/19/08 _ ___ 02/15/09 US Treasury Note 3.00% 1.77% 1,003,556 1,000,000 1,006,170 2__,614 I O/15/08 02/19/09 Treasury Bill U S 0.45 % 0.45% _ 998,613 1,000,000 998,480 __ `__ (133) ____ _ 10/15/08 02/26/09 _ _ US Treasury Bill 0.45% 0.46% 998,525 1,000,000 998,460 (65) ]0/15/08 03/05/09 US Treasury Bili 0.60% 0.61% 997,917 1,000,000 998,090 _ 173 _____ ]O/15/O8 __ 03/12/09 US Treasury Bill 0.60% O.G1% _997,800 1,000,000 997,860 _______ 60 10/15/08 03/19/09 US Treasury Bill 0.60% 0.61% 997,683 ~ L,000,000 997,430 (253) 03/10/08 03/31/09 US Treasury Notc _ 4.50% 1.44% 1 ,012,530 __ 1,000,000 1,014,450 1,920 1020/08 0429/09 Cash Management Bill US Treasu ry 1.20% _722% _ 1,491,000 1,500,000 1,493,250 2,250 03/12/08 __ 04/30/09 _ _ US Treasury Note 4.50% 1.51% 1,014,619 1,000,000 1,076,720 2,307 ___ 07/17/05 OS/LS/09 US Treasury Note 3.88% 2.06% 1,009,634 1,000,000 1,014,220 4,586 0724/08 05/15/09 US Treasury Note 3.88% 2.30% 1,008,305 1,000,000 1,014,220 5,915 _ 0827/08 06/30/09 US Treasury Note __ _ 4.88% 2.09% 2,036,458 __ 2,000,000 2,047,340 10,881 _ __ 0828/08 07/31/09 US Treasury Note ~ 4.63% 2.13 % 2,036,707 2,000,000 2,047,660 1 Q953 34,608,706 34,500,000 34,660,620 52,514 ___ __-___-.-_ - - 4 Total Mana ed Portfolio 58 253 78 58 107 461 58 296 612 43 34 City of Cupertino Investment Portfolio October 3I, 2008 o Malvri YI~IJ(7E ~~A Average Vield __ 1.79% Average Ltngth to Maturity (iv years) 0.59 TRUST PORTF07.70 (KESTER TRUS'T') CASH 10/3 f /OS Wells Institutional Money Mkt Acct 1.73 % 1.73% 45,031 48,03 1 48,031 O Total Trust Portfolio 48 031 48,031 48 031 O BOND RESERVE PORTFOLIO Bond Reservc Acct Ambaa Assurance Security Bond 1 1 1 Bond Payment Acct Wells Treasury Plus Money Mk[ 0.20% 0.20% 940 ____ 940 940 O Total Bond Reserve Portfolio 940 940 940 O 8-5 Rate of Return Comparison 5.50%- 5.00% 4.50% 4.00% 3.50% 3.OD% 2.50% 2.OD% 1.50% -~- WF ~-CUPe~dnn ~.'~ ~ '~°~ Rim ~,~' m~ '~~ ~ ~' ~ ,~o'~ s-s COMPLIANCE WITH INVESTMEN T POLICY _ - City of Cupertino October 31, 2008 -- .. --- _ Category ~ Standard Comment .Treasury Issues ~No limit Complies US Agencies No limit ;Complies Medium Term Corporate Bonds 130% with A rating ;Complies _._ -- -- LAIF x$40 million Complies Money Market Funds 20% Complies _ Maximum Maturities iUp to 5 years Complies Per Issuer Max 1 O% (except for Treasuries and US Agencies) Complies Bankers Acceptances 180 days &c ~40% ,Complies Commercial Paper 270 days 8c ?5% _ Complies Negotiable Certificates of Deposit 30% Complies R_epurchase Agreements _ 365 days _ Complies Reverse Repurchase agreements Prohibited Complies a-~