11. Treasurer's Budget ReportADMINISTRATIVE SERVICES DEPARTMENT
CUPERTINO
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
(408) 777-3220 • FAX (408} 777-3109
SUMMARY
Agenda Item No. 1
SUBJECT AND ISSUE
Meeting Date: May 6, 2008
Accept the Treasurer's Investment and Budget Report for March 2008, including a status
report on General Fund Revenue and Expenditures.
BACKGROUND
INVESTMENTS
The market value of the City's portfolio totaled $61.7 million at March 31, 2008, with a
cost of $61.4 million. The difference, an unrealized paper gain of $267,000, remained
steady from last month. The gain results from the economy's lower interest rates, which
drives up the market value of fixed interest securities in the portfolio. The decline in
interest rates and the increase of US Treasuries in the portfolio, however, sent the
portfolio's yield down to 3.10% in March, compared to 3.49% the previous month and
4.79% a year ago. The Local Agency Investment Fund (LATE) yielded 3.78% for March,
down from 4.16% for the previous month and 5.21 % a year ago.
March was a month of extreme turmoil in the credit markets, culminating with the Federal
Reserve's and JP Morgan Chase's bailout of Bear Stearns. Staff increased Treasury
weighting in the City's portfolio, by purchasing $2 million in Treasury notes and by
shifting $7 million tempoxarily from the Government Securities money market fund to a
fund invested in Treasuries in order to reduce credit risk. $593,000 in certificates of deposit
matured. The City's cash & investment balance decreased $1.5 million due to sales tax and
sheriff contract payments.
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.
GENERAL FUND REVENUES AND EXPENDITURES
Year-to-date revenues through March 31, 2008 are up 6% over a comparable period from
last year. Growth in sales taxes, hotel taxes, and interest earnings are offset by declines in
development-related fees and taxes. Based on expected trends, revenues are projected to
be about 1 % above last year's results.
~~-~
Treasurer's Tnvest~nent and Budget Report
May 6, 2008
Page 2 of 2
The current expenditure budget calls fora 20% increase over last year's actual results,
partially reflecting the recreation enterprises move into the General Fund this year.
However, operating expenditures through March are up only 13% over last year and if that
trend continues, budget savings should be incurred by the end of the year.
RECOMMENDATION
Accept the Treasurer's Investment and Budget Report for March 2008.
Submitted by:
David Woo
Deputy Treasurer
Reviewed by:
~~~~i~ ~ ~~G~
Carol A. Atwood
City Treasurer
Approved for submission:
David W. Knapp
City Manager
Attachments:
1. Investment Portfolio
2. Rate of Return Comparison and Investments by Type
3. Compliance with Investment Policy
4. General Fund Budget Report
5. Revenue and Expense Trend Charts
11-2
City of Cupertino
Investment Portfolio
March 31, 2008
o Mana, ~
SECURITIES MATURED/CALLED
__ 03/17/04 03!17/08 American Trust Fed Savings Bank _ 3.00% 3.00% 99,000 99,000 99,000 0
03/!9/04 03/19/08 Planters First Cordele GA 3.05% 3.05% ___ _
-- 98,040 98,000 _
98,000 0
03/24/04 03/24/08 Badger State Bank 3.00% 3,00% ~ 99,000 99,000 49,000 _____
~0
03/24/04 03/24!08 Wilmot State Bank 3.00% 3.00% 99,000 99,000 __
99,000 D
03/26/04 03/26/08 Private Bank & Trust 3.20% _
3.20% Y 99,006 99,000 99,000 -- T
0
03/30/06 038B/08 First Georgia Banking Company 5.05% 5.05% 99,000 99,000 99,000 _
___
0
SECURITIES PURCHASED ~____
03/10/08 03/31/09 US Treasury Note
~ 4,50% 1.44% 1,030,289 1,000,000 1,032,031 1,742
03/12/08 04/30/D9 US Treasury Note 4.50% ].519'0 1,031,903 1,000,000 __
1,033,438 1,535
_ CITY PORTFOLIQ
CASH `._.._ _ - •--~--- ------
_ _ 03/31/08 Wells Fargo -Workers Comp Checking 17,308 17,308 - 17,308 -
0
__
_
--
03/31/08
Wells Fargo -Regular Checking __
- _ _
__
534,895
TS52,203
----
534,895
552,203
--
534,895
552,203 _ ___ _
_
- 0
0
LAIF -- ~ --
~~_ 03/31/08 LAiF -State Pool _ --3.78% 3.78% ~ --14,38b,207 14,386,207 14,386,20_7 ~----_ •- ~- -0
CERTIFICATES OF DEPOSIT
~
----
04l07/04
03/26/04
11/23/07
11/23/07 04/07/08
_09/26/08
1180/08
11/20/08 Cole Taylor Bank, step coupon
South Coast Community Bank
Arizona Bank & Trust ~T
Banktrust
~ 3.01%
3.20'/0
~ ^4.88%
4.88% 3.O1%
3.20%
4.88%
4.88% 97,000
_..
_ 98,000
10,108
94,000 97,000
_ 98,000
10,108
94,0
00 __ 47,033 I
_~
_ 98,13b
_ 10,108
94,000 37
___
____ _136_
_ -0
0
-
~
1183/07 11/20/08 _
_
Cardinal State Bank _ 4.88% 4.B8% 94,000 _
_
_ 94,000
~ _
_ __ 9_4,000...{
V ~ _ _
_
r-_ ~ ~____0
-
1183/07
I 183/07 1180/OB
1180/0_8
~ Colonial Bank NA.
Covenant Bank __ ___ _ 4.88%
4.88% 4.88%
4.88% ___ _94,000
- ! 44,000 94,000
_____ 94,000 94,000 I
^
94,000 0
0
11_83/07 1180/D8
^ ~ ~
Four Oaks Bank & Trust Co 4.88% _
4.88% 94,000 94,000 _
94,000 _ __ ___
0
1183/07 '
~ 1180/08
_ _
Johnson Bank 4.88% 4.86% __
_ _ 94,000
- _ _ 94,000 -_ 94,000
~T _____ __0
I I8
3/07 ~ 11/20%08 Midwest Bank of Western Illinois 4.88% 4.88% 94,000 94,000 94,000 { 0
_
_
- 1183/07
1183/07
_ 11/20/08
1180/08
Solutions Bank ---__ -
The Brand Banking Co - --
4.88%
4.58% _
-4.88°_/0
4.88%
-- ---- 48,892
94,000 _
48,892 I
94,000 --~
_ 48,892 '
94,000 ---
_ 0
0
1183/07 ~
_ __
- 1180/08 Vision Hank ~_
- 4.88% 1 4.88%
_
94,000
94,000 _--_ ---~
_ 94,000 ~
-i ---~~.~
0
_
.._._.--
-- - --. __
__ 1183/07 1183/OB Pinnacle Bank 4.B8% 4.88%I 95,000 45,000
~.
- 95,000
_._. .
.
0
L__.____
03/17!04
03
84/04 __03/17/09
0384/09 Peoples State Bank ____ ~
Washita State Bank - _ 3.40%
3.35% _ 3.40%
°
3.35 /° 99,000
- _
99,000 99,000
99,000 49,188 I
-~
49,151 I 188
-~-~ ~-~~-~~T
15i
__
_
12/30/05 12/30/09 _
Meridian Bank 4.80% 4.80%~ _ __
99,000 99,000 ____
- 100,778 _
1,778
1288/OS
1288/10
- _
Nati Bank of New York City
~
490%
4,90%
47,000
97,000 - -
99,154 r-- - -
2,154
--
- -
1,589,000 _
1,589,000
.
.1,593,440 -
- -
~--.._ _.-
r 4,440
MONEY MAR KET FUNDS ~ ! I
_ _ _
Y W - -
--__~
03/31/08
03/31/08
.- -_ -----____.~.~..~-
Wells FargoGovemment
Wells Fargo 100% Treasury
r----- -- ---
2.760
].22%
- j _
2.76%'
1.22%
j _
I
_ __3,680,496
~ _- 7,000,000
]O,b80,49b ---__~_.
_ 3,680,496
7,000,000
10,b80,496 ._..-_..~- - - ~
____ 3,b80,496 ;
7,000,000 ~
10,680,496 -•----- -~----
___ 0
_ _ __ 0_
r - 0
11-3
City of Cupertino
Investment Portfolio
March 31, 2008
o Matun
AGENCY NOT ES
1121!05 0623/08 FFCB 5.74% 4.65% ~ 1,002,441 _ 1,000,000 1,007,570 5,129
01/30/08 09/12/08 FFCB 4.50% 2.70% 1,007,965 1,000,000 1,009,360 1,415
0128/08 10/01/O8 FFCB discount note 2.68% 2.77% 986,302 1,000,000 989,800 3,498
12!30/03 12/30/08 FHLMC callable, step coupon 4.75% 3.90% 1,000,000 1,000,000 1,018,010 18,010
OZ/OS/08 02/05/09 FFCB callable 3,00% 3.00% 1,000,000 1,000,000 1,000,63D 630
01/14/08 04/14/09 FFCB'callable . 4.22% 4.22% 1,000,000 1,000,000 1,000,000 0
0122/08 08/43/09 FFCB 5.25% 2.55% 1,035,229 1,000,000 1,039,380 _ 4,151
1121/OS 07/12/10 FHLMC 4.13% 4.73% 987,697 1,000,000 1,038,130 50,433
11/19/07 11/14/10 FFCBcallabie 4.65% 4.63% 1,000,000 1,000,000 _ 1,013,750 13,750
12/15/05 12/15/10 FHLMC callable 5.04% 5.04% _
1,000,000 1,000,004 1,017,870 ~ _
_ 17,870
01/17/08 I 01/17/12 FFCB callable 4.65% 4.65°h 1,000,000 1,000,000 1,001,250 ~ 1,250
__.v__- _ _ _^~~- _ 11,019,634 11,000,000 11,135,770_ l 1b,136
US TREASURY SECURLTIES _ _ __
0/07
122 04/30/08 _
US Treasury Note _ 4.88% 3.01% _ 1,001,491 I,~0,000 1,002,660 1,169
_
12/10/07 _
_ OS/15/08 US Treasury Note 2.63% 3.17% 999,328 1,(100,400 _ 1,001,640 2,312
_
12/07/07 OS/15/08 US Treasury Note 2.b3% 3.25% 999,253 1,000,000 1,001,640
~ 2,387
02/29/08 06/12/08 US `Crcasury Bill 1.76% 1.80% 1,992,862 2,000,000 1,995,180 2,318
~ _____.
_
0128/08 06/30/08 US Treasury Note 5.13% 2.25% 1,007,109 1,000,000 1,009,220 2,111
~
12/10/47 1 07/31/08 U5 Treasury Note 5.00% 3.27% 2,011,242
_
12/07 07 _
DS/15!08 US Treasury Note 4.13% 3.35% 1,002,803
17110/07 08/31/08 US Treasury Note 4.88% 3.34% _ 2,012,449
12/07/07 09/30/08 US Treasury Note 4.63% 3.27% 1,006,525
12/10/07 09/30/08 US Treasury Note 4,63% 3.29% 1,D06,494
_
12/07/07 10/31/08 US Treasury Note 4.88% 3.27% 1,009,045
_
_
12/10/07 !0/31/08 US Treasury Note 4.88% 3.25% 1,009,231
12/07/07 I l/15/08 US Treasury Note 4.38% 3.31% 1,006,449
12/10/07 11/15/
08 US Treasury Note 4.38% 3.27% 1,006,716
__
12/10/07 _
12/31/08 US Treasury
Note 4.75% 3.18% _ 2,022,872
1_22_0/0 7 01/31/09 _
US Treasury Note 4.88% 3.06% .1,014,766
02/19!08 02!15/09 US Treasury Note 3.00% 1.77% 1,010,669
_
- 03/10/08 0
3/31/09 U5 Treasury Note 4.50% 1.44% 1,030,289
03/12/08 _
_
04/30/09 US Treasury Note 4.50'/0 1.51% 1,031,903
-J- -. -- -_ - ~
23,181,496
Dotal Maoa ed Portfolio I 61.409,037
\vtrage Yield _ 3.10% -~-
t,verage Length to Matnri (in ears _ ~ 0.48 _~~
_~__ TRUST PORTFOLIO (KESTER TR~U~~~~----
~ASH _ ~- j '- --~~_~_
__ 03/31/08 Wells Institutional Money Mkt Acct 2.51% 2.51"/0 47,387
- --1 -- ~ -
fotal Trust Portfolio 47 87
~~ ~~~ R(1ND RRCF.RVF P(1RTt:nl.ifl I i
2,000,000 2,023,600 12,358
1,040,000 1,009,690 6,887
2,000,000 2,028,120
---- - 15,671
-~ ~~ -~
1,004,000 1,015,860 I 9,335
1,000,000 1,015,860
~~ 9,366
1,000,000 1,020,080 11,035
~~
1,000,000 1,020,080 10,849
1,000,000 1,017,890 11,441
1,000,000 1,017,890 11,174
2,000,000 2,047,660 24,788
1,000,000 1,027,270 _12,504
1,000, 000 1, 012,420 1, 75 I
A
1,000,000 1,029,380 (909)
1,000,000 1,031,480 _ (423)
0
,3.000.000 23,327.62 146.124
_ 47,387 ~ 47~367_~ `- 0
47 87 47 87 0
- ---•-•------r-_ -----
--._~~.-- --•-- -•-----I--___...... _-.I
y
Bond Reserve Acct
Bond Payment Acct Ambac Assurance Security Bond _
We11s Treasury Plus Money Mkt _ _
~
0.09% ,
0.09% __ 1
1,201 _ _ [
1,201 I
1,201 _ _
F _ 0
Total Bood Reserve Portfoli 1 Ol , 1 20] 1 01 0
Investmeats by Type
Managed Portfolio
LAIF
239'.
US Treasuries '
38%
i
Cash
' - 1%
:_~ - -
3'
ry
f~
Y 4=
,
Money
`3t`~ Market
17%
CDYs
Agency Notes
3 h
18%
5.5U%
Rate of Return Comparison
5.00%
4.50°~
4.00%
3.50°k
3.00°k i r
a~°~ ~°~
01 O~ 01
~
~d' ~~
~~
CS
J
~
0~
0
~
~
r`
y
~-LAIF
~-Cupertino
~~ ~~~
11-5
COMPLIANCE WITH INVESTMENT POLICY
---.... _- - _. _... .
.
.. ------------ --....----
_.._.......__.
...__
City of Cupertino
~ T
,,,
.-~ -~-------
..
`
-..
.
_-
, ._
.. ..
- _-- -- -.
'1VTarch 31, 20Q8 . ._ ... .. .. .. ....__.. -... ~.. ....... ..._ ...
~
-.. .
..-._...--
T
'
•
~ .
Category ~
! Standard Comment
Treasury Issues ~No limit ;Complies
.- --- ------.. _..---..-----
US Agencies - ...._. _....... _..... _. -----
-._...
~No limit - ....
.
Complies
Medium Term Corporate Bonds_ a30% with Arating - - _ _ Complies
LAIF ~ $40 million Complies
Money Market Funds 20% - - - Complies
Maximum Maturities 'Up to 5 years Complies
Per Issuer Max _ ~ IO% (except for Treasuries and US Agencies) _ i
'Complies
Bankers Acceptances :180 days & 40% ~ ~ - _ . ~ Complies
Commercial Paper X270 days & 25% ;Complies
Negotiable Certificates of Deposit ' 30%
. - . _. ~ Complies
~ -
Repurchase Agreements ; 365 days ; Com lies
Reverse Repurchase agreements ;Prohibited 'Complies
~~ -s
Ci of Cu ertino
General Fund Bud et Re ort
March 31, 200$
Bud et Actual
2006/07 2007/08 3/31/2007 3/31/2008 Anal sis of Trends
Taxes'
Sales Tax 11,575,000 14,190,000 8,015 475 9 921 549 Stron electronic a ui .sector & ma'or new rovider
Pro a Tax 6,290,000 b,710,000 3,954 370 4,29b,028
Transient Occu anc 2,363 000 2 660,000 1,632,192 1,797 875 Local business demand
Utili Tax 2,392,000 3,240,000 1,873,015 2101,870
Franchise Fees 2,500,000 2,580,000 1,074,334 1,050,102
Other Taxes 2,308,000 1,400,000 1 779 450 1,091 090 AMC & Whole Foods construction tax last ear
Licenses and Permits 3 050 000 3,030,000 2,319,039 2,016,135 Buildin ermits down
Use of Mon & Pro a 1,380,000 2,100 000 1,133,490 1,494,237 Stron cash osition
Inter overnmental 4 706 114 4,505 071 2,628,379 2,470 197 SB 90 claims down; Last s VLF included corrections
Charges for Services 1,482,000 1,150,000 1,151,184 865,482 Residential development down
Fines & Forfeitures 680,000 800 000 412,400 422,537
Other Revenue 140,000 116,200 146,570 62,607
Sale of Pro 1 600 000
Total Revenue 4 2 U 6%; forecasted to end u 1% over rior eaz.
eratin Ex enditures:
Administrative 1,362,195 1,499,095 949 331 993,382
Law Enforcement 7 177,378 7,871 526 5,354,893 5,765,805 Full ear of addt'1 de uties
Communi Service 917,644 1,275,848 802 327 837 763
Administrative Service 4 97$,400 4 545 811 2,845,502 2,895,470
Recreation Service 2,428,298 3,908 359 1,298,789 2,686,783 BBF and Senior Center Ente rises this eaz
Communi Develo meat 3,885,441 3,897,479 2,384 389 2,490 109 Plannin and economic develo went
Public Works 9 845 280 11,143,739 6 726,439 7 409,498 Park, buildin maintenance
Total Ex enditures U 13%; forecasted to end u below bud et
Transfers In 1,459,974 880,164 374,994 672,660 Resource Recove ; CIP close-outs; Sr Ctr ente rise
Transfers Out -7 026 296 -17 424 750 -i 1 125,249 -13 512,750 New CIP
Net Gain/ ss
Charges for Services Projected vs. Actual
~, 2,000
C
A
N
7
~ L
1,000
m
}
a
-~--,Projected, per budget
--t- Actual
r ~ r
i ~
r„ _. r
r
8107 9107 10/07 11/07 12107 1108 after 2/08 3loti
budget
change
Month
General Fund Expenditures Projected vs. Actual
y 30,000
.a
25,000
0
s
~ ~ 20,000
fo ~ 15,000
L
} 1o,aoo
5,000
0
~~
~ r
~ i
.~ '~
r --~-Projected, per budget
r
--~--Actual
8107 9107 10/07 11107
Month
12107 1 /08 after
budget
change
2/08 3/08
11-8
Sates Tax Projections vs. Actual
~, $12,aoo
-~
A
7
/~
$10,000
O
~
$8,000
m
$6,000
~ $4,000
$2,000
$0
~, $5,000
c
ro
o $4,aoo
~F
$3,000
0
$2, 000
$1,000
$0
--~lProjected, per budget
~~Actual -
8107 9/07 10/07 11107 12107 1108 after 2108 3108
budget
change -
Month
Property Tax Projections vs. Actual
-~--Projected, per budget
~~Actual
8107 9/07 10107 11 /07
Month
12107 1108 after 2108 3108
budget -
change - -~
11-9
Transient Occupancy Tax Projected vs. Actual
~, 2,000
1,600
a
1,200 -
0
m 800 -
r
400 -
0~
--~-Projected, per budget ~ ~ ~.
-~---Actual ~
i
8/07 9107 10/07 11 /07 12/07 1 /08 after 2/08 3/08
budget
change
Month
Licenses ~ Permits Projected vs. Actual
~, 3,000
b
N
7
~ ~ 2, 000
0
v
m
~, 1,000
0
''
~~ ~~
r ~ r ~
-~-Projected, per budget
~---Actuaf
8/07 9/07 10/07 11/07 12/07 1/08 after 2J08 3/08
budget
change
Month
11 - 10