05. Treasurer's budget reportADMINISTRATIVE SERVICES DEPARTMENT
CUPERTINO
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 950143255
(408) 777-3220 • FAX (408) 777-3109
SUlVIlVIARY
Agenda Item No.
SUBJECT AND ISSUE
Meeting Date: February 4, 2008
Accept the Treasurer's Investment and Budget Report for December 2007, including a
status report on General Fund Revenue and Expenditures.
BACKGROUND
INVESTMENTS
The market value and cost of the City's portfolio totaled $56.7 million at December 31,
2007. The portfolio yielded 4.13% in December, down sharply from 4.68% the previous
month and 4.64% a year ago. The Local Agency Investment Fund {LATE) yielded 4.80%
for November, down from 4.96% for the previous month and down from 5.13% a year ago.
The economy and Fed rate actions have driven down interest rates. .
As described in previous monthly reports, because. of the questions surrounding certain
mortgage-related investments in other state pools, the City in December re-positioned a
major portion of the. LAIF portfolio into Treasuries and Wells Fargo's money market fund.
As a result, LAIF has dropped from 64% of investment holdings to 26%; Treasuries have
climbed from zero to 30%; and the money market fund rose from b% ~to 19% of the
portfolio. In addition, two Federal agency notes totaling $2 million matured and the Federal
Home Loan Bank called their $915,0.00 5.04% note. As mentioned before, the re-allocation
lowered the portfolio yield significantly from the LAIF benchmark, but followed the City's
investment policy of putting safety and liquidity as the top two priorities. The City's cash
& investment balance remained unchanged from last month.
Investments are in fitly 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.
GENERAL FUND REVENUES AND EXPENDITURES
Sales taxes surged in December, with $1.8 million received compared to $1.2 million a
year ago while property taxes, hotel taxes, utility user taxes, and interest earnings continued
to exceed last year's trends. Development-related fees and permits continue to suffer, but
revenues this month from the large Villa Serra project helped improved the picture.
Revenues for the first half of the fiscal year are now 6% over last year's pace, a positive
swing from the picture a month ago, when revenues were 2% below last year. Qngoing
5-1
Treasurer's Investment and Budget Report
February 4, 2008
Page 2 of 2
revenues by the end of the year are budgeted to be flat compared to last year. With the
recent downbeat economic news, it may be difficult for tax revenues to continue this strong
showing. Most expenditures are either in line with budget expectations or forecasted to end
up below budget. Recreation department services are up with the addition of Blackberry
Farm and Senior Center enterprises this year. A detailed forecast of year-end revenues and
expenditures will be brought to Council in an upcoming mid-year budget review.
RECOMMENDATION
Accept the Treasurer's Investment and Budget Report for December 2007.
Submitted by:
David Woo
Deputy Treasurer
Attachments:
1. Investment Portfolio
Appro ed for submission:
David W. Knapp
City Manager
2. Rate of Return Comparison and Investments by Type
3. Compliance with Investment Policy
4. General Fund Budget Report
5-2
City of Cupertino
December 31, 2007
`"^'~`~R o Matun
SECURITIES MATURED/CAL[.ED
04/14ro4 12/03ro7 FNMA callable 2.50% 3.15% 1,000,000 1,000,000 1,000,000 _ 0
12/13/05 1228ro7 FFCB 4.75% 4.70% 1,000,000 1,000,000 1,000,000 0
12/28/05 1228/09 FHLB callable 5.04% 5.04% 915,000 915,000 915,000 0
SECURTTIES PURCHASED
1220/07 04/30/08 US Treasury Note 4.88% 3.01% 1,006,016 1,000,000 1,004,840 (1,176)
12/10/07 OS/ISroB US Treasury Note 2.63% 3.17% 997,970_ 1,000,000 997,420 (550)
12/07/07 05/15/08 US Treasury Note 2.63% 3.25% 997,742 1,000,000 997,420 (322)
12/101(17 07/31/08 US Treasury Note 5.00% 3.27% 2,019,627 2,000,000 2,017,500 (2,127)
12107/07 08/15/08 US Treasury Note 4.13% 3.35% 1,044,665 1,000,000 1,004,220 (445)
12/10/07 08/31/08 US Treasury Note 4.88% 3.34% 2,019,854 2,000,000 _
2,017,500 (2,354)
12/07/07 04/30/08 US Treasury Note 4.63% 3.27% 1,009,769 1,000,000 1,008,750 (1,019}
12/10/07 04/30/08 US Treasury Note 4.63% 3.29% 1,009,723 1,000,000 1,008,750 (973)
12107/07 l0/31/08 US Treasury Note 4.88% 3.27%
_ 1,012,892 1,000,000 1,012, l 10 (782)
12!10/07 10/31/08 US Treasury Note 4.88% 3.25% _ 1,013,157_
-.. 1,000,000 1,012,110 (1,047)
12/07/07 11/15/08 US Treasury Note 4.38% 3.31% 1,009,012 1,000,000 1,007,890 (1,122)
12/10/07 I1/15/08 US Treasury Note 4.38% 3.27% 1,009,384 1,000,000 1,007,890 (1,494)
12/10/07 12/31/08 US Treasury Note __
4.75% 3.18% 2,030,441 2,000,000 2,026,120 (2,321)
1220107 01131/04 US Treasury Notc 4.88% 3.06°~ 1,019,157 1,000,000 1,017,730 (1,427)
CITY PORTFOLIO V
CASH
i2/31ro7 Wells Fargo -Workers Comp Checking 19,781 19,781 19,781 0
12!31/07 Wells Fargo -Regular Checking 467,6I9 467,619 467,619 0
_ 487,400 487,400 487,400 0
LA1F _
12/31 ro7 LAIF -State Pool 4.80% 4.80% 14,508,707 14,508,707 14,508,707 0
CERTIFICATES OF DEPOSIT
02/03/06 02/04/08 PrimeSouth Bank 4.65% 4.65% 97,000 97,000 96,902 (98}
02/10/06 02/11/08 F]oridaCommunityBank 4.75°k 4.75% _ _ 99,000
~ 99,000 98,889 (111)
03/17/{14 03/17/08 American Trust Fed Savings Bank 3.00% 3.00% 99,400 99,040 98,469 (531)
03/19/04 03/19/08 Planters First Cordele GA 3.05% 3.05% ___ 98,000 98,000 97,469 {531)
03/24/04 0324108 Badger State Bank 3.00% 3.00% 99,000 99,000 98,421 {579)
0324/04 0324108 WiLnotSteteBank 3.00% 3.00% 99,000 99,000 98,421 (579)
0326/44 0326/08 Private Bank 8c Trust 3.20% 3.20% 99,000 99,000 98,444 __ (556)
03/30/06 0328/08 First Georgia Banking Company 5.05% 5.05% 99,000 99,000 98,894 (106)
04/07/04 04/07/08 Cole.Taylor Bank, step coupon 3.01% 3.01% 97,000 97,000 96,891 (109)
0326104 0926/08 South Coast Community Bank 3.20% _3.20%
~ 98,000 98,000 _
96,678 {1,322)
1123/07 1 i20ro8 Arizona Bank & Trust 4.88% 4.88% 10,108 10,108 10,108 0
1123/07 1120/48 Banktrvst 4.88% 4.88% 94,000 94,000 94,000 0
1123107 1120ro8 Cardinal Slate Bank 4.88% 4.88% 94,000 94,000 94,000 _ 0
1123/07 ] ]2oro6 Colonial Bank NA 4.88% 4.88% 94,000 94,000 94,000 0
_
1123107 1120/08 Covenant Bank 4.88% 4.88% 94,000 94,000 94,000 4
1123/07 l 120/08 Four Oaks Bank & Trust Co 4.88% 4.88% 44,000 94,000 94,000 0
' 1123/07 1120/08 Johnson Bank 4.88% 4.88% 94,000 94,000 94,000 0
1123/07 1120/08 Midwesl Bank of Western 111inois 4.88% 4.88% 94,400 94,000 _ 94,000 __ 0
~
1123/07 [120!08 Solutions Bank 4.88% 4.88% 48,892 48,892 48,892 0
1123/07 1120/08 The Brand Banking Co 4.88°h 4.88% 94,000 94,000 94,000 0
~
I (23/07 __
1120108 Vision Bank 4.88% .4.88% 94,000 94,(100 94,000 0
1123/07 1123/08 Pinnacle Bank 4.88°h 4.88% 95,400 95,000 95,000 0
03/17/04 03/17/09 Peoples Statc Bank 3.40% 3.40% 99,000 99,000 97,311 (1,689)
0324/04 03/24/09 Washita State Back 3.35% 3.35% 99,000 99,000 97,241 { 1,759)
12/30/05 12/30/09 Meridian Bank 4.80°k 4,80% 99,000 99,000 99,096 96
1228/05 1228/10 Nat'I Bank of New York City 4.90% 4.90% 97,000 97,000 96,887 (113)
2,378,000 2,378,000 2,370,013 7,98
City of Cupertino
December 3l, 2007
12/31/07 Wells Fargo Government 4.48% 4.48% 11,043,(39 11,043,139 11,043,139
11,043,139 11,043,139 11,043,139 0
AGENCY NOTES
04/23/(14 01/23/08 FIi1.B callable 3.15% 3.44% 1,499,744 1,500,000 1,498,590 (1,154)
02/25/04 02/25/08 FHLMC 3.13% 3.13% 1,000,000 1,000,000 997,810 (2,190)
11/21/05 0623/08 FFCB 5.79% 4.65% 1,005,085 1,000,000 1,006,170 1,085
0429/04 1029/08 FHLB callable, step coupon 4.Q0% 3.64% 300,000 300,000 299,907 (93)
12/30/03 12/30/08 FHI.MC callable, step coupon 4.75% 3.90% 1,000,000 1,000,000 1,007,040 7,040
03/16/04 03/16{09 INMA callable 4.01% 4.01% 1,600,000 1,600,000 1,599,008 (992)
1 1/30/05 04/07/10 FFCB callable 3.70% 5.02% 973,399 1,000,000 995,940 22,541
1121/05 _ 07/12/10 FH1,MC 4.13% _4.73% 986,353 1,000,000 1,012,190 25,837
11/19/07 11/19/10 FFCB callable 4.65% 4,63% _ 1,000,000 1,000,000 1,004,690 4,690
12/15/05 12/15/16 FHLMC callable _ 5.04% 5:04% 1,000,000 1,Q00,000 1,009,230 9,230
0421/06 04/07/11 FNMA callable 5.75% 5.81% 748,667 750,000 753,518 4,851
11,113,248 11,150,000 11,184,093 70,845
US TREASURY SECURITIES
(2120107
04/30/08
US Treasury Note _
4.88%
3.01%
1;006,016
TT
1,000,000 _
1,004,840
(1,176}
12/10/07 OS/15/08 US Treasury Note 2.63% 3.17% 997,970 ~ 1,000,000 997,420 (550)
12/07/07 OS/15/08 US Treasury Note 2.63% 3.25% 997,742 1,000,000 997,420 (322)
12/10/07 07/31/08 US Treasury Notc 5.00% 3.27% 2,019,627 2,000,000 2,017,500 (2,127)
12/07/07 08/15/08 US Treasury Note 4.13% 3.35% 1,004,665 1,000,000 1,004,220 (44511
12/10/07 08/31/08 US Treasury Note 4.88% 3.34% 2,019,854 2,000,000 2,017,500 (2,35
12/07/07 09/30/08 US Treasury Note ~ 4.63% 3.27% 1,009,7fi9 1,000,000 1,008,750 (1,019)
12/10/07 09/30/08 US Treasury Note 4.63°r6 3.29% 1,009,723 1,000,000 1,008,750 (973)
12/07/07 10/31/08 US Treasury Note 4.88% _ 3.27% _1,012,892 1,000,000 1,0]2,110 (782)
12/10/07 10/31/08 US Treasury Note 4.88% 3.25% 1,013,157 ~ 1,000,000 I,012,110 (1,047)
12/07/07 11/15/08 US Treasnry Note .4.38% 3.31% 1,009,012 .1,000,000. 1,007,890 {1,122)
12/10/07 11/15/08 US Treasury Nate 4.38% 3.27% 1,009,384 1,000,000 1,007,890 (1,494)
12/10/07 12/31/08 US TreasuryNotc 4.75% 3.18% 2,030,441 2,000,000 2,028,120 (2,321)
1220/07 OL/31/09 US Treasury Note 4.88% 3.06% 1,019,157 ~ 1,000,000' 1,417,730 (1,427)
17,159,408 17,000,000 17,142,250 (17,158)
Total Mana ed Portfolio 56 689 902 56 567 46 56 735 b 45 700
Average Yield 4.13'/°
Average Length to Maturity ( in years) 0.55
TRUST PORTFOLIO (KESTER TRUST)
CASH
12/31/07 Wells Institutional Money Mkt Acct 4.23% 4.23% 46,920 46,920 46,920 0
Total Trust Portfolio 46 20 46 920 46 920 0
BOND RESERVE PORTFOLIO
Bond Reserve Acct Ambac Assurance Security Bond 1 1 ~ 1
Bond Payment Acct Wells Troasury PIus Money Mkt 3,06% 3.06°~ 1,089,531 1,089,531 1,089,531 0
Total Boad Reserve Portfolio 1089 31 1 089 31 1 089 531 '
5-4
Investments by Type •
Managed Portfolio
US Treasuries 26%
30Ye
Cash
1X
. Money
Agency Motes Market
20% l9%
CD's
4°~
5.50%
5.0091
4.5096
Rate of Return Comparison
'-~-LA1F
-f-Cupertino
4.00%
3.50%
3.00°k
••_• ~,.,, ~~~ wvi 51ui 6lQ7 7/07 8/07 9107 10!07 91107 12/07
5-5
COMPLIANCE WITH INVE_ S_ TMENT POLICY
City of Cupertino
December 31, 2007
Category _ __ Standard Comment
Treasury Issues No limit Complies
US Agencies No limit Complies
Medium Term Corporate Bonds 30% with A rating Complies
LAIF
---- -........._.._ _._. _..__ ..--~---._..
..... $40 million
----~----. _ ..................._.._... _
._-
_. Complies
__.
Money Market Funds o
20 /o Complies
Maximum Maturities Up to 5 years Complies
Per Issuer Max 1 10% {except for Treasuries and US Agencies) ~ Complies
Bankers Acceptances ' 180 days & 40% Complies
Commercial Paper 270 days & 25% Complies
Negotiable Certificates of Deposit 30% Complies
Repurchase Agreements 3b5 days Complies
Reverse Repurchase agreements Prohibited Complies
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