06. Treasurer's reportADMINISTRATIVE SERVICES DEPARTMENT
C3TY HALL
'~~ I '10300 TORRE AVENUE • CUPERTINO, CA 9504-3255
C lJ P E RT 1 N O `I (408) 777-3220 • FAX (408) 777-3'109
Agenda Item No_
SUBJECT AND ISSUE
SUMMARY
Meeting Date: Januazy 12, 2009
Accept the Treasurer's Investment Report for November 2008_
BACKGROUND
The mazket value of the City's portfolio totaled $53.8 million, with a book value of $53.6
million at November 30, 2008_ The $O.2 million unrealized gain reflects the higher pricing
placed on investments bought in previous months at interest rates higher than those
currently available_ However, the portfolio's November yield of 1.54% was down
considerably from 1.79% the previous month, and 4.71% a year ago_ The Local Agency
Investment Fund (CALF) yielded 2.57% for I~lovember, down from 2.71 % the previous
month and 4.96% a year ago.
The declining interest rate environment and goal of increasing safety effected portfolio
changes and investment returns. $3 million in federal agency bonds were called and were
re-invested in Treasury bonds at lower rates. Driven by investors' flight to safety and low
inflation, yields on short-term Treasuries have dropped from around 4% at September 18,
2007 to between 0.14% and 2.84% at October 30, 2008 (see enclosed US Treasury Yield
Curve Comparison)_
Maturing Treasuries, certificates of deposit, and money market funds were used to cover
the $4.5 million decline in cash from last month due to the SterlingBarnhart pazk
acquisition, the Mary Avenue Footbridge construction, the Stevens Creek Corridor Pazk
project, and street re-pavement work. Investments are in full compliance with city
investment policy and state law and are tiered to provide sufficient cash flows to pay city
obligations over the next six months.
The December 17, 2008 action of the state to freeze funding of state infrastructure projects
effects grant reimbursements for the Corridor Park_ Expected reimbursements of $800,000
to the city's General Fund for its up-front spending on the project will be delayed until the
state solves its budget deficit, can issue bonds again, and ease its cash crunch_ City cash
reserves will cover this in the meantime.
Staff will present a report on the General Fund budget at the 3anuary 20, 2008 council
meeting.
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Treasurer's Investment Report
January 12, 2009
Page 2 of 2
RECOMMENDATION
Accept the Treasurer's Investment Report for November 2008.
Submitted by
~ _.
David Woo
Deputy Treasurer
Approved for submission:
i~~~/
David W. Knapp
City Manager
Reviewed by:
Caro A_ Atwood ~
City Treasurer
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City of Cupertino
Investment Portfolio
November 30, 2008
A 1ViI'Y DATE f' YIE JUSTED TURITY ~ MARKET ALIZED
'1T-s o Maturit OST VALUE - A fI' LOS
SACI_IRTI'iR-G MATURED
12/07/07 11/15/OS US Treasury Note 4.38% 3.31 % 1,000,000 1,000,000 1,000,000 O
12/10/07 11/IS/OS US Treasury Note 4.38% 327% 1,000,000 1,000,000 1,000,000 O
I ]23/07 1120/08 Arizona Bank 8c Trust, Chandler AZ 4.88% 4.88% 10,108 10,108 10,108 O
1123)07 1120/08 Bar•Ivirnat, Santa Rosa Beach FL 4.88% 4.88% 94,000 94,000 94,000 O
1123/07 L 120/08 Yadkin VaLLey Bank 8~ Trust Co, Elkin 4.88% 4.88% 94,000 94,000 94,000 O
1123/07 1120/08 Colonial Bank NA, Mont ornery AL 4.88% 4.88% 94,000 94,000 94,000 O
7 123/07 1120/08 Covenant Bank, Clarksdale MS 4.88 % 4.88 % 94,000 94,000 94,000 O
1 123/07 1120/08 Four Oaks Bank 8c Trust, Four Oaks NC 4.88% 4.88% 94,000 94,000 94,000 O
1123/07 1120/08 Johnson Bank, Racine WI 4.88 % 4.88% 94,000 94,000 94,000 O
i 123/07 1120/08 Midwest Bank Western IIL, Monmouth 4.88 % 4.88 % 94,000 94,000 94,000 O
1123/07 1 I20/OS Solutions Bank, Medicine Lod a ICS 4.88% 4.88 % 48,892 48,892 48,892 O
1123/07 1120/08 Brand Bankin Co, Iawrencevi]]e GA 4.88 % 4.88% 94,000 94,000 94,000 O
123/07 1120/08 Vision Banlc, Panama Ciry FL 4.88 % 4.88 % 94,000 94,000 94,000 O
1023/08 I 120/08 Fitst National Bank of Olathe, Olathe KS 4.88 % 4.88 % 99,000 99,000 99,000 O
1023/08 1120/08 USA Bank, Port ChesterNY 4.88% 4.88 % 297 297 297 O
SECURITIES CALLED
11/19!07 11/19/10 FFCB callable 4,63% 4.63% 1,000,000 1,000,000 1,000,000 O
0528/08 0226/10 FHLB callable 3.00% 3.00% 7,000,000 7,000,000 1,000,000 O
0520/08 0520/10 FFCB callable 3.34% 3.34% 7,000,000 1,000,000 1,000,000 O
SECIJAITIE.S PURCHASED
1126/08 08/31/09 US Treasury Note 4.00 % 0.73% 2,048,665 2,000,000 2,045,620 3,045
1126/08 09/30/09 US Treasury Note 4.00% 0.69% ],027,451 7,000,000 1,025,470 1,981
CITY PORTFOL[O
CASH
11/30/08 Wells Far o -Workers Com Checkin i7 193 17 193 I7 193 O
11/30/08 Wells Fa o - R lar Checkin 447 195 447 195 - 447 195 O
464 88 464 88 - 464 88 O
LAIF
11/30/08 LAIF -State Pool 2.57% 2.57% 568 109 568 109 568 109 O
CERTIFICATFS OF DEPOSI'T '
03/17/04 03/17/09 Peo les State Bank 3.40% 3.40% 99 000 99 000 99,268 268
0324/04 0324/09 Washita State Bank Bums Flat OK 3.35 % 335% 99 000 99 000 99,273 273
12/30/05 12/30/09 Meridian Bank NA, Wickenbur AZ 4.80% 4.80% 99 000 99 000 100,296 1,296
1228/05 1228/10 Naf1 Bank of New York Ci , NY 4.90 % 4.90% 97 000 97 000 95,902 1 098
394 000 394 000 394 739 739
MONEY MARKET' FUNDS
11/30/08 Wells F o 700% Treasu 0.34% 0.34% 3,454 317 3 454 317 3 454 317 O
3 454 317 3 454 17 3 454 317 O
AGENCY NOTES
07!30/08 12/19/08 FHLB discount note 2.50% 2.52% 998,681 1,000,000 999,900 1,219
0626/08 0626/09 FHLB callable 3.73% 3.13% 1,000,000 1,000,000 1,001,560 1,560
0122/08 08/03/09 FFCB 5.25 % 2.55 % .1,017,686 1,000,000 1,025,310 7,624
0923/08 0923/09 FFCB 2.70% 2.57% 1,001,017 1,OOQ,000 1,007,810 6,793
06/30/08 12/30/09 - ^aallable 3.25% 3.25% 1,000,000 1,OOQ000 1,001,560 1,560
0625/08 05/07/70 FFC:B 4.75% 3.38% 1,018,846 1,000,000 1,038,750 19,904
05/07/08 06/1 I/]O FIIZB 3.00% 2.98% 1,000,306 1,000,000 1,075,330 15,004
06/18/08 06/18/10 I'IILB callable 3.35% 3.35% 1,000,000 1,000,000 1,000,940 940
0728/08 0728/10 FFCB callable 3.30% 3.30% 1,000,000 1,000,000 1,009,380 9,380
08/18/08 O8/18/TO FFCB callable 3.57% 3_57% 1,000,000 1,000,000 1,004,380 4,380
0527/08 0827/10 FHLB capable 330% 3.30% 1,000,000 1,00Q000 1,007,500 7,500
05/19/08 11/19/10 IT-II.B callable 3.15% 3.15% 7,000,000 1,000,000 1,005,630 5,630
0528/08 0228/] 1 FHLB callable 3:40% 3.40% 2,000,000 1,000,000 1,007,500 7,500
13 036 537 13 000 000 13 125 30 88 993
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City of Cupertino
Investment Portfolio
November 30, 2008
ATE COUPON Y TUlil MARKE'T' L
RATE o Maturit VALUE S
US TRFr1SURY SECURtI'IFS
10/15/08 12!71/08 US Treasu Bill - OAS% O.OS% 1,999,969 2,000,000 1,999,980 I1
10/17/08 12/18/08 US Treasury Bill 0.25% 0.25 % 2,999,625 3,000,000 2,999,940 315
10/15/08 12/26/08 US Treasury Bill 0.20 % 020% 999,856 1,000,000 999,980 124
12/10/07 12/31/08 US Treasury Note 4.75 % 3.18% 2,002,578 2,000,000 2,007,500 4,922
70/27/08 01/02/09 US Treasury Bill 0.30% 030% 1,999,450 2,000,000 ],999,940 - 490
10/15/08 01/08/09 US Treasury Bill 0.20 % 0.10% 999,892 1,000,000 999,970 78
10/15/O8 01/15/09 US Treasury Bill 0.25 % 025% 999,681 2,000,000 999,960 279
]0/17/08 01/15/09 US Treasury Bill 030% 030% 1,999,233 2,000,000 1,999,920 687
10/75/08 07/22/09 US Treasury Bill 015% 0.15% 999,779 1,000,000 999,950 171
72/20/07 07/31/09 US Treasury Note 4.88% 3.06% 1,002,992 I,000,000 1,007,660 4,668
] O/] 5/08 02/05/09 US Trrasu Bill 030 % 0.30% 999,442 1,000,000 999,950 508
02/19/08 02/15/09 US Treasu Note 3.00% 1.77% 1,002,559 1,000,000 ],005,860 3,301
10/15/OS 02/19/09 US Trras Bill 0.45% 0.45% 998,988 1,000,000 999,900 913
10/I 8/08 02/26/09 US Treasury B911 0.45% 0.46% 998,900 1,000,000 999,890 990
10/15/08 03/05/09 US Trras Bill 0.60% 0.61% 998,417 1,000,000 999,740 1,323
10/75/08 03/72/09 US Tress BiII 0.60% 0.61% 998,300 I,OOQ,000 999,730 1,430
10/15/08 03/79/09 US Treasury Bill - 0.60% 0.61% 998,183 1,000,000 999,740 1,557
03/10/08 03/31/09 US Tress No[e 4.50% 1.44% 1,0]0,041 1,000,000 1,014,140 4,099
10/20/08 0429/09 US Treasu Cash Management Bill - 1.20% 1-.22% 1,492,500 1,500,000 7,497,510 5,010
03/]2/08 04/30/09 US Treasu Note 4.50% 7.57% 1,012,196 1,000,000 1,016,480 - 4,284
07/17/08 05/15/09 US Treasury Noie 3.88% 2.06% 1,008,159 1,000,000 1,014,920 6,761
07/24/08 05/75/09 US Treasury Note 3.88% 2.30% 1,007,034 2,000,000 1,014,920 7,886
08/27/08 06/30/09 US Treasury Note 4.88% 2.09% 2,031,938 2,000,000 2,047,960 16,022
08/28/08 07!31/09 US Treasury Note 4.63% 2.13 % 2,032,673 2,000,000 2,050,780 18,107
1126/08 08/31/09 US Treasury Note 4.00% 0.73% 2,048,665 2,000,000 2,045,620 3,04
1126/08 09/30/09 US Treasury Note 4.00% 0.69% 2,027,451 1,000,000 1,025,470 1,98.
35 668 00 35 00 000 35 747 4Y0 78 10
Total Mans ed Portfolio
Avers a Yield 1.54%
Avers a Len th to Maturl in ears 0.52
TRUST PORTFOLIO STER TRU
CASH
11/30/08 Wells Institutional Mon 1VIkt Acct 132% 1.32% 48 100 48,100 48 100 O
Total Trust Portfolio 48 100 48 100 48 100 O
BOND RESERVE PORTFOLIO
Bow Reserve Acct Ambac Assurance Securit Bond 7 1 1
Bond Pa ent Acct Wells Treasu Plus Mon Mkt 0.10% 010% 940 940 940 O
Total Bond Reserve Portfolio 94
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Rate of Return Comparison
s.oo%
4.50%
4.00%
3.50%
3.OD%
2.50%
2.00%
x.50%
~-inF
-~Cupatlrw
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US Treasury Yield Curve Comparison
• U3 Treasury Yields '
9/'18/2007 vs 10/30/2008
5.00
~
-
4.s0 . -- -
3.9~ '. 4. H-- d:V - -
-
.a.ao
3.60
-
. - -
Y1e18-8C .
_
- - ..
2.60 - - _ - _
.B
'
.-
- - ~ - - ~ - - _ _
~
2.00
~ .
i 60 - .
_ 1.59
~.oo
0.60
0.41
s o0 _ -
~ hw 3 flfl0 8 rno - ~ yr 2 yr 3 yf 6 yf
]nvestrnent Horizon
--9= 9/18/2007 '--5- ~O/30/2008 • -
6-6
COMPLIANCE WITH INVESTMENT POLICY
City of Cupertino
November 30, 2008
Category _ Standard Comment
Treasury Issues No hm~t Complies
US Agencies No limit Complies
Medium Term Corporate Bonds ;
LAIF
Money Market Funds _
30% with A rating
$40 million
20% . Complies
Complies
Complies
Maximum Maturities
-- --- ---- Up to 5 years ,
- Complies
Per Issuer Max u
1 O /o (except for Treasuries and US Agencies) --
Complies
Bankers Acceptances 180 days 8z X10% Complies
Commercial Paper 270 days 8c :?S% Complies
Negotiable Certificates of Deposit 30% Complies
Repurchase Agreements _ X
Reverse Repurchase agreements ; 365 days
Prohibited Complies
Complies
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