07. Treasurer's ReportADMINISTRAT[VE SERVICES DEPARTMENT
-CITY HALL
10300 TORRE AVENUE - CUPERTINO, CA 950143255
C 1J P E RT 1 IV O (408) 777-3220 • FAX (408) 777-3109
Agenda Item No. ~'
SUMMARY
Meeting Date: April 7, 2009
SUB.TECT AND ISSUE
Accept the Treasurer's Investment and Bud€;et Report for February 2009, including a
report on General Fund Revenues and Expenditures.
BACKGROUND
Investments
The market value of the City's portfolio totaled $56.2 million, with a book value of $56.1
million at February 28, 2009. The $O.1 million unrealized gain reflects the higher pricing
placed on federal agency notes bought in previous months at interest rates higher than those
currently available. The portfolio's February yield of 1.07% was down from L 14% in the
previous month due and 3.49% a year ago due to lower rates in the Local Agency
Investment Fund (LAIF) and money market accounts, from the maturity and call of higher
yielding Treasury and agency notes, and from the addition of Treasuries to the portfolio.
The LAIF benchmazk was at 1.87% for February, down from 2.05% the previous month
and 4.16% a year ago.
'The City's portfolio decreased $3.7 million from the previous month due to capital
expenditures and lower sales tax receipts. Five million in Treasuries matured and a $1
million Federal Farm Credit was called, with $3 million in Treasuries and a $1 million
Freddie Mac note purchased. The latter was r<:-introduced to the portfolio because of the
federal government's implicit support of thc; agency through its conservatorship and
buyback of outstanding debt. Notwithstanding, its credit worthiness will be monitored.
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_
General Fund Revenues and Expenditures
Fiscal year-to-date revenues are down 2% from. last year as the recession impacts transient
occupancy taxes, sales taxes, property transfer taxes, energy utility user taxes, building
permits and interest earnings. Property taxes, engineering fees, recreation revenues, and
fine revenues, however, are withstanding the economic downturn_ Looking forward though,
assessed value and property transfer tax trends portend a property tax slowdown in 2009-
10. Year-end revenues are now forecasted to be $600,000 below current budget and 2%
below last yeaz's results as transient occupancy, property transfer and energy utility user
taxes have declined sharply in recent months and construction activity continues its slump.
~-1
Treasurer's Investment and Budget Report
April 7, 2009
Page 2 of 2
Year-to-date expenditures are up only 1 % from last year. With a budgeted 6% increase for
General Fund programs, some year-end budget savings cazi be expected to help offset the
revenue weakness.
RECOMMENDATION
Accept the Treasurer's Investment and Budget Report for February 2009, including a
report on General Fund Revenues and Expenditures.
Prepared by: David Woo, Deputy Treasurer
Submitted by:
Carol A. Atwood
City Treasurer
Appr~ove~d fJor submission:
d~~ ~L_
David W. Knapp
City Manager
7-2
City of Cupertino
Investment Portfolio
February 28, 2009
-
oMaturi _ COST"--- ~ALUIE -- ..._._^VT~UE
____ SECURITIES MATURED
1220/07 01/3 [/09 US Treasury Note 4.88% 3.06% 1,000,000 1,000,000 1,000,000 O
10/15/08 02/05/09 US-Treasury Bill 0.30% 0.30% 1,000,000 1,000,000 1,000,000 O
02/19/08 02/15/09 US Treasury Note 3.00% 1.77% 1,000,000 1,000,000 5,000,000 O
30/15/08 02/19/0_9 US Treasury Bill 0.45% 0.45% 1,000,000 1,OOQ000 1,000,000 O
10/75/08 02/26/09 US Treasury Bill 0,45% 0.46% i,00Q000 _
1,000,000 1,000,000 O
_ _ SECURTCIES CALLED
08/18/08 08/18/10 FFCB callable 3.57% 3.57% 1,000,000 1,000,000 I,000,000~ O
SECURITIES PURCHASED
02/11/09 02/11/11 FHLMC callable step up 1.38% 1.76% 1,000,000 1,OOQ000 999,590 (4i0)
02/17/09 _ 07/09/09 US Treasury Bill 0.32% 0.32% 1,997,671 2,000,000 1,997,540 (131)
02/25/09 06/11/09 US Treasury Bill 0.24% 0.24% 999,313 1,000,000 999,190 (123)
- CITY PORTFOLIO
.
_ -~ ~ ~~ ~ ~~
CASH -__.. ._
_
02/28/09 Wells Fargo -Workers Comp Checking 15,468 15,465 15,468 O
02!28/09 Wells Fargo -Regular Checking 701,263 701,263 701,263 O
____ 716,731 716,731 716,737 O
LAIF _ _ _
02/28/09 LAIF -State Pool 1.87% 1 .87% 585,215 585,278 585,218 O
CERTIFICATES OP DEPOSIT
03/17/04 03/17/09 Peoples State Bank 3.40% 3.40% 99,000 99,000 99, l 1 O 110
03/24/04 0324/09 Washita State Bank, Burns Flat OK 3.35% 3.35% 99,000 99,000 99,158 158
12/30/05 12/30/09 Meridian Bank NA, Wickenburg AZ 4.80% 4.80% 99,000 99,0
00 1
0
0
,451 1,451
12/28/05 12/28/70 Nat'l Bank of New York Ci
- ty, NY
4.90%
4.90%
97,000 _
97,000 ___
.
__
_
_
97,285
285
394,000 394,000 396,004 2,004
MONEY MARKET FUNDS
02/28/09
Wells Fargo Government
0.40%
0.40%
3 421,428
3 421,428 __
3,421,428 --_.
O
02/28/09 Wells Fargo 100%Treasury O.OI% O.OI% 7 927,612 7 927,612 7,927,672 O
11 349,040
I1 349,040
]7,349,040 _
_
O
AGENCY NOTES -~-~~-~~---- -~-~~~- -
01/30/09 _ 06/22/09
J FHLB_ dis_c__ount note .41%
0 0.41% 02
9
98,7 1,000,000 999,000 298
0L22/08 08/03/09 FFCB ___ _
5.25% 2.55% _
_
1,011,216 1,000,000 1,019,380 ~ 8,16
4
___ 09/23/08
0923!09
FFCB
2.7
0%
2.57%
1,000,709
1,000,000
1,010,330 _
_
_
9,601
0625/08 __05/07/10 FFCB______ _
4.75% 3.38% _
1_,015,603 ],000,000 7,040,000 24,397
05/07/08 _06/11/10 FHLB _ _
3.00% 2.98% _
1,000,257 1,000,000 _
1,016,880 16,623
0728/08 0728/10 FFCB callable ____
3.30% 3.30% 1,000,000 1,000,000 1,008,750 8,750
_
0527/08 0827/10 FHLB callable 3.30% 3.30% 1,OOQ000 1,000,000 1,005,310 5,310
_ _
01/30/09 09/10/10 FHLB 5.13%• 1.33% 1,057,298 1,000,000 1,053,130 _
(4,168)
05/19/08 11/19/10 FHLB Callable 3.15% 3.15%~ 1,OOQ000 1,00Q000 1,004,380 4,380
02/1 7/09 02/17/11 Fl-iLMC callable step up 7.38% L76% 1,000,000 I,OOQ000 999,590 (410)
0528/08 0228/11 -_
FHLB callable 3.40% 3.40% 1,000,000 1,OOQ000 7,005,630 5,630
11-,083,784 11,000,000 11,162,360 78,576
7-3
City of Cupertino
Investment Portfolio
February 28, 2009
-- -o I~laturi ~ALU1T- ~Ir6Frrnzss-s-
US TREASURY SECURITIES _
IO/15/08 03/05/09 US Treasury Bill 0.60% 0.61_% 999,917 1,000,000 999,990 73
10/15/08 _
03/]2/09 US Treasury Bill 0.60% 0.61%
_ __ 999,800 1,000,000 999,970 170
10/15/08 03/19/09 _
----
US Treasury Bill 0.60% 0.61% 999,683 1,000,000 999,930 247
03/10/08 03/31/09 US Treasury Note _4.50% 1.44% 1,002,572 _ _ 1,000,000 1,003,360 _ 788
____
10/20/08 _
04/29/09 US Treasury Cash Management Bill ___
1.2_0% 1.22% 1,497,000 _ 1,50Q000 1,499,550 _
__ _2,550
03/12/08 ___
30/09
0
4/ US Treasury Note 4.50% 1.51% 1,004,927 1,000,000 1,006,840 1,913
7/17/08
0 _
_
_
/04
05/15 US Treasury Note 3.88% 2.06% 1,003,736 1,000,000 1,007,230 3,494
__ _
_
0724108 _
05/15/09 US Treasury Note 3.88% 2.30% _ _ 1,003,220 1,000,000 !,007,230 4,010
02/25/09 06/11/09 US Treasury Bill 0.24% 0.24% 999,3]3 _ 1,000,000. 999,190 (123)
08/27/08 06/30/09 US Treasury Note 4.8_8% 2.09 % 2,018,379 2,000,000 2,030,080 __ 1 1,701
02/17/09 07/09/09 US Treasury Bill 0.32% 0.32°/ 1,997,671 2,000,000 1,997,540 (131)
_
08/28/08 _ __ __
07/31/09 US Treasury Note 4.63% 2.13% 2,02Q,572 2,OOQ000 2,034,600 14,028
1 1/26/08 08/37/09 US Treasury No[e 4.00% 0.73% 2,032,680 2,000,000 2,033,760 1,080
12/18/08 09/75/09 US Treasury Note 3.38% 029% 1,016,752
'--....._.....`------- 1,000,000
---- 7,015,000
---"----'---'--- (1,752)
-----
71l26/08 --
09/30/09 ----
US Treasury Note _ 4.00% 0.69% 1,019,324 1,000,000 1,019,690 366
12/18/08 10/IS/09 US Treasury Note _ _ _____33_8% 0.30% 1,079,258 _ 1,000,000 1,017,030 ____(2,228)
12/15/08 10/31/09 US Treasury Note 3.63% 0.40% 1,021,533 1,000,000 1,019,490 __(2,043)
12/18/08 ___
11/30/09 US Treasury Note 3.13
% _ 0.32% 2,042,102 .2,000,000 2,035,860- {6=24_2)
12/19/08 12/15/09 US Treasury Note _
3.50% _ 0.24%
` 1,025,857 1,1100,000 1,021,640 __(4,217)
O (/12/09 7Z/15109 US Treasury Note 3.50% 0.36% 1,024,875 1,000,000 1,021,640 (3,235)
~_ 01/12/09 f O1/15/10 SUS Treasury Note j 3.63% U30% _ z,u~a,33a z,vuo,vuu z,uvy,buu la,or
__n_ 'i. -, in~i u, n , rc T.s ~...., wo.,P 6 SO% O 44 % 2. 1 16341 2 000.000 2.107.580 t8.76 ~
01/12/09 03/31/]0 US Treasury Note 1.75% 036% 2,030_169 __2,000,000 ____2_020,080 _ (10,089)
3],954,075 31,500,000 37,946,960 (7,055)
Total Maoa ed Portfolio
-~~'_' ~ 56 082 789 55 44 989 56 156 13 73 524
Average Yield -~-_-~-~ 1.07 % _ __
Average Leogt4 to Maturity (in years) __ _ __ _ 0.54
TRUST PORTFOL[O (KESTER TRUST) _ _ _ _ ___ _ _____ ______._______ ______
CASH
02/28/09 Wells Institutional Money Mkt Acct 0.46% 0.46% 48,234 48,234 48,234 _ O
Total Trust Portfolio 48 234 45,234 48 234 O
~
BOND RESERVE PORTFOL[O ___ ______.__ _.
_
Bond Reserve Acct Ambac Assurance Security Bond 1 _-_._ t ___ __ 1 ___
_____
Bond Payment Acct Wells Treasury Plus Money Mkt __ _ _ 0.00% 0.00%0 0 O O 0
Total Bond Reserve Portfolio 0 O O O
7-4
Rate of Return Comparison
4.00%
3.50%
3.00%
2.50%
2_~%
7.50%
1.00%
a.so%
o.oo%
~ WF
y-C~partlno
7-5
COMPLIANCE WITH INVESTMENT POLICY
__._
_- -
City of Cupertino
B'ebruary 28, 2009
Medium Term Corporate Bonds 30% with A rating Complies
LAIF $40 million Complies
__
Money Market Funds
20%
Complies
Maximum Maturities __
- __ __ _._ _ _
Per Issuer Max Up to 5 years
---o----
10/0 (except for Treasuries and US Agencies) Complies
Complies
Bankers Acceptances 180 days 8c 40% Complies
Commercial Paper 270 days 8c 25% Complies
-
_. _ _.._
Negotiable Certificates of Deposit 30%
_ Complies
- -
- --
Repurchase Agreements
--..-. 365 days
_ -- - . _ - Complies-
Reverse Repurchase agreements Prohibited Complies
~-s
City of Cupertino
General Fund Budget Report
February 28, 2009
Bu et Actual
2007/08 2008109 212812008 2128!2009 Anal sis of Trends
Taxes:
Sales Tax 14,190,000 13,390,000 8,558,937 8,611,188 True-u sladvances hi er, but real #'s down
Pro erty Tax 6,710,000 7,010,000 . 3,798,726 4,217,853 Growth this ear; not as strong next yr
Transient Occ anc 2,660,000 2,660,000 1,619,233 1,474,716 17.32% down in last 3 months
Utili Tax 3,240,000 3,300,000 1,833,060 1,144,540 Energyus edown
Franchise Fees 2,580,000 2,630,000 999,703 980,326
Other Taxes 1,400,000 1,500,000 978,342 714,828 Pro erty transfer tax down 40%
Licenses and Permits 3,030,000 2,980,000 1,787,578 1,687,429 Conshuction downturn
Use of Mon & Pro 2,100,000 1,267,000 1,195,469 755,367 Lower rates; hol ~ more Treasuries
Intergovenymental 4,509,871 4,563,892 2,449,026 2,416,867
Charges for Services 1,151,685 1,468,000 781,412 973,602 Encroachment ermits, Senior Ctr tri s u
Fines & Forfeihrres 800,000 820,000 348,761 405,359
OtherRevenue 116,200 100,000 53,739 32752
Total Revenue Down 2% thm Feb; down 1 % by year end
eratin Ex enditures:
Administrative 1,499,095 1,483,395 898,571 832,400 Ci Attorne vacanc
Law Enforcement 7,982,421 8,380,671 5,129,376 5,509,036 Per contract
Public & Environ Affairs 1,215,848 1,512,796 729,440 915,923 City Channel ui r l; survey, administration
Administrative Service 4,540,61 ] 4,254,006 2,629,362 2,499,887 Elections, insurance, city clerk, code lower
Recreation Service 3,910,044 4,397,466 2,294,369 2,245,419
Communi Develo went 3,722,479 4,157,724 2,176,258 2,034,119 Contract lancheckin down
Public Works 11032,844 11,652,062 6,566 860 6 654,794
Total E enditures U 1 %; e ect bud et savin s b year-end
Transfers In 1,300,164 270,000 736,664 46,640 Resource Recove , CIP savin s last year
Transfers Out -18,334 750 -7110,000 -15,432 000 -4,733 280 Corridor Park last eaz
Net Gainl Loss
V
V
Sales Tax Projections vs_ Actual
x$12,000
v
0$1 O, 000
t
f-
~,,~ $8,000
d
is
F $6,000
R
~ $4,000
$2,000
$O
$5,000
-o
.a
w
L $4,000
..,
$3,000
0
0
r
$2,000
r
Property Tax Projections vs. Actual
-~ -Projected, per current budget
~-Actual
$1, 000
$O
10/08
1 1 /08 12/08
Month
1109
2/09
7-8
10/08 11 /08 12/08 1 /09 2/09
Month
Transient Occupancy Tax Projected vs. Actual
y 2,000
A
N
O
~ 1,600
d
1,200
0
0
800 ,~
400
O
10/08
~„ 1,000
A
0
~ ~
m
0
500
O
J -~ -Projected, per current budget
~-Actual
11 /08
12/08
Month
1 /09
Use of Money 8~ Property Projected vs. Actual
2/09
- ~
~~
-• -Projected, per current budget
~-Actual
10/08
1 1 /08
12/08
Month
1 /09
2/09
7-9
Licenses ~ Permits Projected vs_ Actuai
,~ 3,000
-o
A
0
L
d ~ 2, 000
A
D
O
F
N
> 1,000
O
~, 1,500
-a
W
0
"' ~ 1,000
m
A
0
~°-
> 500
O
-~ -Projected, per current budget
f-Actual
10/08
11 /08
Charges for Services Projected vs. Actual
12/08
Month
1 /09
2/09
t ~ ~
~~ ~ ~~ -~ -Projected, per current budget
-~- Actual
10/08
11 /08
12/x8
Month
1 /09
2/09
7-10
General Fund Expenditures Projected vs. Actual
h 25, 000
c
s 20,000
t-
15,000
v
0
H
10,000
5,000
O
~~ ~
~ ~~
..r- =
~ -Projected, per current budget
-~-Actual
10/08 1 1 /08 12/08 1 /09
Month
2/09
7-11