06. Treasurer's ReportADMINISTRATIVE SERVICES DEPARTMENT
CUPERTINO
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 950143255
(408) 777-3220 • FAX (408) 777-3109
SUMMARY
Agenda Item No. __~Q____
SUBJECT AND ISSUE
Meeting Date: May 20, 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 (LAiF} 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 temporarily 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 $1.5 million due to sales tax and
sheriff contract payments.
Investments are in full compliance with City investment policy and/or State law, and are
tiered to provide sufficient cash flows to pay City obligations over the next six months.
GENERAL FL7ND REVENUES AND EXPENDITURES
Year-to-date revenues through March 31, 2008 are up 6% over a comparable period from
last yeaz. Growth in sales taxes, hotel taxes, and interest eainings are offset by declines in
development-related fees and taxes. Based on expected trends, revenues are projected to
be about 1 % above last year's results.
6-1
Treasurer's Investment and Budget Report
May 20, 2008
Page 2 of 2
The current expenditure budget calls fora 20% increase over last year's actual results,
partially reflecting the recreation enterprises move into the General Fund this year.
However, operating expenditures through March are up only l3% over last year and if that
trend continues, budget savings should be incurred by.the end of the year.
RECOMMENDATION
Accept the Treaswer's Investment and Budget Report for March 2008.
Submitted by:
avid Woo
Deputy Treasurer
Reviewed by:
~.
Carol A. Atwood
City Treasurer
Attachments:
1. Investment Portfolio
Approved for submission;
David W. Knapp
City Manager
2. Rate of Return Comparison and Investments by Type
3. Compliance with Investment Policy
4. General Fund Budget Report
5. Revenue and Expense Trend Charts
s-z
City of Cupertino
Investment Port, folio
March 31, 2008
o Ma '
SECURITIES MATURED/CALLED
03/17/04 03/17/08 American Trust Fed Savings Bank 3.00% 3.00% 99,000 99,000 99,000 4
03/19/04 03/19/08 Planters First Cordele: GA 3.05°h 3.05% 9$,000 96,000 ~ 96,000 _ 0
03/24/04 03/24/08 Badger State Bank 3.00% 3.00% 99,000 99,000 99,000 0
03/24/04 03/24/08 Wilmot State Bank 3.00% 3.00% 99,0 99,000 99,000 ^0
0326/04 0326/08 Private Bank & Trust 3.20% 3.20% 99,000 99,000 94,000 ___. 0
03/30/06 0328/08 First Georgia Banking Company 5.05% 5.05% 99,000 99,000 99,000 0
SECUR7T~S PURCHASED
03/]0/08 03/31/09 US TreasurylJote 4.50% 1.44% 1,030,289 1,000,000 1,032,031 1,742
03/12/08 04/30/09 US TrcasuryNoie 4.50% 1.51% 1,031,903 1,000,000 _
1,033,438 1,535
- CITY PORTFOLIO
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 _
534,845 T 5'34,845 _
0
552,203 552,203 552,20 _
3
0
~~
~~ ~ .` _
03/31/08 LAIF -State Pool 3.78% 3.78%~ _14,386,247 14,386,207 14,386,207 0
CERTIFICATES OF DEPOSIT ~
~_
-~~
~ .~~
J
04/07/04 04/07/08 Cole Taylor Bank, step coupon 3.01% 3.01% 97,000 97,000 97,033 I 33
_0326/04 0926/08 South Coast Community Bank 320% 320% 98,000 98,000 98,136 136
1123/07 1120108 Arizona Bank & Trust 4.8B°1. 4.88% _
10,108 I0,108 ~
Y 10,108 ~ 0
1123/07 ] 1%20/08 Banktrust 4.88% 4.$8% ~ 94,000 94,000 Y94,000 ~ V v0
1123/07 1120/08 Cardinal State Bank 4.88% 4.B8% 94,000 94,000 94,000 0
1123/07 l ]20/08 Colonial Bank NA . 4.88% 4.88% 94,000 94,000 _
94,000 ___
~~
0
i 123/07 1120/05 Covenant Bank 4.88°'0 4.88% 94,000 94,000 94,000 _ __
0
1123/07 1120/08 Four Oaks Bank 8c Trust Co 4.88% 4.86% 94,000 94,000 __
94,000 _ _ ___
~ 0
1123/07 ' 1120/08 3ohnson Bank _ 4.88% 4.88% _
~_ 94,000 _
94,0(10 _ 94,000 _ _ D
1123/07 l 1/20/08 Midwest Bank of Western Illinois 4.88% 4.88% 94,000 94,000 9_4,000 j ~ 0
1123/07 1120/08 Solutions Bank 4.88% 4,88% 48,892 48,892 ~ _ 48,89? I 0
i 123/07 11/20/08 The Brand Banking Co 4.88% 4,88% 94,000 94,000 94,000 _
0
1123/07 1120/08 Vision Bank 4.B8% 4.8B% 44,000 94,000 _
94
0 _
0
1123/07
1123/08
Pinnacle Bank
4.88%I
4.88%1 _
45,000
95,000 ,
~ 95,000~ _ _ _
_
0
03/17/04 03/17/09 Peoples State Bank 3.40% 3.40% 99,000 99,000 99,188 ~ ~_- _
i 88
0324/04
~_ 0324/09 Washita State Sank 3.35% 3.35°./0 _
99,000 99,000 99,151 I 151
12/30/05 12/30/09 Meridian Bank 4.80% 4.80% 99,000 99,000 _
~ ] 00,778 1,77
`
8
1228/05 12/28/10 NaYI Bank ofNew York City 4.90% 4.90%I 47,000
v 97,000 _
99,154 __
_
____ 2,154
~ 1,589,000 ~ 1,589,000 ]
,593,4
4
0 4,440
MONEY MARKET FUNDS ~
--f f
-- - ---
--I
--~_~~_. _
_
.
_
_
._ _.._.- ..
-- • -~ ~
------ ------
03/31/08 Wells Fargo Government __ 2.76°'0 2.76%i ~ 3,680,496 3,680,496 ___ 3,680,4 ~ _~ 0
~-
03/31/08 Wells Fargo 100% Treasury 1.Z2% 1.22%~ 7,000,000 7,006,000 7,000,000 ~
0
-----~ --
i ~---------------- -- _ rt
I ---
10,680,496
10,680,496 - - --~-- -----
~ 10,680,496 ~ 0
6-3
City of Cupertino
Investment Portfolio
March 31, 2008
o Maturi
AGENCY NOTES
]]21/05 0623/08 FFCB 5.79% 4.65% . 1,002,441 1,000,OOD [,007,570 S,I29
01/30/08 09/12/08 FFCB 4.50% 2.70% 1,007,965 1,D00,000 1,009,380 1,415
0128/08 10/01/08 FFCB discount note 2.68% 2.77% 486,302 1,000,000 989,800 3,498
IZ/30b3 12/30/08 FHLMC callable, step coupon 4.75% 3,90% 1,000,000 1,000,000 1,D18,010 18,Oi0
02/05/08 02/05/09 FFCB callable 3.00% 3.00% 1,000,000 1,000,000 1,000,630 630
OI/1468 04/14/09 FFCB'callable . 4.22% 4.22% 1,000,000 1,000,000 1,000,000 0
0122/08 08/03/09 FFCB 5.25% 2.55% 1,035,224 1,000,000 1,039,380 4,151
1121/05 07/12/10 FHLMC 4.13°~ 4.73% 987,697 1,000,000 1,038,]30 50,433
11/19/07 11/19/10 FFCB callable 4.65°h 4.63% 1,000,000 1,000,000 1,013,750 13,750
_ 12/15/05 12/15/]0 FHLMC callable _ 5.04% 5.04% 1,000,000 1,000,000 1,017,870 17,8
70
Ol/17/08 I 01/17/12 FFCB callable _
4.65% _
4,65% _
_ 1,000,000 ____ 1,000,000 i~ 1,001,250 __ _
_
~ 1,250
_ ~_ ,~_ 11,019,634 11,000,000 11,135,770 116,136
----- -
US TREASURY SECURITIES --
12/20l07 04/30/08 US Treasury Note 4.88% 3.01% ~ 1,002,491 1,000,000 1,002,660 ~ 1,169
12/10/07 OS/15/08 US Treasury Note 2.63% 3.17% 999,328 ],000,000 1,001,640 2,312
12/07/07 05/25/08 US Treasury Note 2.63% 3.25% 999,253 1,006,000 1,001,640 2,387
0229/08 06/12/08 US `Creasury Bill 1.76% L.SQ% 1,992,862 2,000,OOD 1,995,180 2,318
0128/08
06/30/08
US Treasury Note
5.13%
2.25%
1,007,109
1,000,000
],009,220 ___
_
___ 2,11'
_ 1Z/1Ulu7 ~ U"1~.i1/US U5'IreasuryNote 5,00% 3.27% 2,011,242 2,D00,000 2,023,600 12,35ts
12b7/07 08/08/151568 US Treasury Note ~ 4.13% 3.35% 1,002,803 1,000,000 1,009,690 _
v 6,887
12/10/07 08/31/08 US Treasury Note 4.88. 3.34% 2,012,449 2,000,000 ~ 2,028,120 { 5,671
12/07/07 09/30/08 US Treasury Note 4.63% 3.27% I,006,525 1,000,000 ],0I5,860~ _
__ 4,335
12/]0/07 09/30/08 US Treasury Note 4.63% 3.29% I,006,494 ~ 1,000,000 1,015,860 9,366
12/07/07 10/31/08 US Treasury Note ~ 4,88% 3,27% I,009,045 1,000,000 1,020,080 11,035
12/106? 10/31/08 US Treasury Note 4.88% 3.25% 1,004,231 1,000,000 1,020,080 10,849
(26767 lk/1568 US Treasury Note 4.38% 3.31% 1,006,449 1,000,000 1,017,890 11,441
12/]0/07 11/iS68 US Treasury Note 4.38% 3.27% 1,006,7(6 1,000,000 1,017,890 11,174
12_/10/07 12/3168 US Treasury Note 4.75% 3. L 8% 2,022,872 2,000,000 2,047,660 24,788
1220/07
T ~ 01/31!09 US Treasury Note 4.88% 3.06% .1,014,766 1,000,000 1,027,270 12,504
02/t968 02/15/04 US Treasury Note 3.00% 1.77% 1,010,669 1,OD0,000 ],012,420 1,751
03/IOb8
_- 03/3169
~ _. _ US Treasury Note 4.50% 1.44% 1,030,289 1,000,000 1,029,380 (909)
03/12/08
i 04/3069
US Treasury Note
4.50%
].5]%
1,031,903
1,000,000 _
I,031,480 __
_
(423)
_ 23,181,496 23,000,000 23,327,620 146,124
~
Tota[ Mans ed Portfol(o 61 409 037 61 207 06 61 675 736 266 699
Average Yield 3.10%
Average Length to Maturi ( in years} 0.48 ~~ _
CASH
03!3168 TRUST PORTFOLIO TER TRU
Wells Institutional Money Mkt Acct 2.51 %~
2.51%
47,387 ~
'
47,387 ~
47,387 i
~ 0
Total Trust Portfolio 47 387 47,387 47 7 0
_.~~-~.
Bond Reserve Acct
Bond Payment Acct
Total 8oud Reserve Portfoli SONA RESERVE PORTFOLIO
Ambac Assurance Security Bond
Wells Treasury Plus Money Mkt !_
- ~-
~I
`
0.0_9%
~~ _.
-*
I
0.09% --
----
_ 1
~ ` 1,201+
1 OI -~-
_ _ I
(,201
l 01 -- -~- -
__ ]
~
1,201
1 201 ~-- --
~~
~._~.~.
0
0
Investments by Type
Managed Portfolio
~~
2396
US Treasuries
38%
;, -
Cash
R'~s+!Yiy+?'~:P
dtl ~
.
~;
.
~
' r
a
~~>,. r;;:
~'~'
~`
Money
^ Market
17°/.
Agency Notes CD's
t S"/o 3°/.
5.9
Rate of Return Comparison
5.00°
4.5096
~-~LAIF
-^~- Cupertino
4.00%
3.50°k
3.0096
~~ ~~ ~~ 1~1 ~~ g~~~ ~~~ ~~~1 ~~~ ~~~ ~ ~~
ey
SJ~~
tt~
5rg~'`°
6-5
COMPLIANCE WITH INVESTMENT POLICY
City of Cupertino
_ ..._.
- -_ . .
,.
'
.
. _.. - - -.
March 31, 2008 _
• _ ... -- .. - .._
Category
- _..
...I - - ~-
i
Standard - - - - --. ..
~ Comment
T
I N
it
li
ssues _
reasury ~~
o
m ~Com lies
US Agencies
..._ .......... _... _. __
~No hmrt
.
.- --- ._ ......... . . .
. ...1__-- -- ___... _ -
'Com lies
1 ~
Medium Term Corporate Bonds ,
.
... . .. ..
i 30% with A rating ~ ..
---
Complies
LAIF ~$40 million Complies
Money Market Funds X20°10 ~ _ Complies
-- --
Maximum Maturities ~Up to 5 years Complies
Per Issuer Max ~ 10% (except for Treasuries and US Agencies) ;Complies
Bankers Acceptances ' 180 days & 40% :Complies
~-
Commercial Paper _ ;270 days_ & 2.5% _ ;Complies
Negotiable Certificates of Deposit !30%
.. . _ .. _. Complies
Repurchase Agreements ,, .. -;365 days.. - .. _ .. .. ____. _ . _ ._.. ._ .. ;Complies
Reverse Repurchase agreements _ ;Prohibited Complies
s-s
Ci of Cu ertino
General Fund Sud et Re ort
March 31, 2008
Bud et Actual
2006/07 2007/08 3/31/2007 3/31/2008 Anal sis of Trends
Taxes:
Sales Tax 1 1575 000 14 190 000 8,015 475 9 921,549 Stron electronic c ui .sector & ma'or new rovider
Pro a Tax 6,290 000 6,710 000 3,954 370 4,296,028
Transient Occu anc 2,363,000 2,660 000 1,632 192 1,797,875 Local business demand
UtiIi Tax 2 392,000 3 240,000 1 873,015 2 l0I 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 Mone & Pro e 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
Pines & Forfeitures 680 000 800 000 412,400 422,537
Other Revenue 140,000 116,200 146 570 b2,607
Sale of Pro e 1 600 000
Tota3 Revenue U 6%; forecasted to end u 1% over rior ear.
O eratiu Ex enditures:
Administrative 1 362,195 1,499 098 949,331 993,382
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 1 278 848 802 327 837 763
Administrative Service 4,978 400 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 ear
Communit Develo ment 3 885,441 3 897,479 2 384 389 2,490,109 Plannin and economic develo ment
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 1459,974 880,164 374,994 672,660 Resource Recove • CIE' close-outs• Sr Ctr ente rise
Transfers Out -7 026 296 -17 424 750 -11 125 249 -13 512 750 New CIP
Net Gain/ Loss
Charges for Services Projected vs. Actual
~, 2,000
~ r
w ~
0 1,000
a
a
--•-Projected, per budget
-f-Actual
~, r
~ r
~~r
r
8107 9107 10107 11!07
12/07 1108 after
budget
change
Month
General Fund Expenditures Projected vs. Actua!
~ 30,000 -
a
c
a 25,000 -
0
m ~ zo,ooo -
0
o ~ 15,000 -
t
c~
}
10, 000 -
5,000
0-
2/08 3108
r '~
- r ~
~~
~ r
~ -^~-Projected, per budget
r
-~-f--Actual
8107 9lO7 10/07 11 /07
12/07 1/08 after 2/08 3108
budget
change
Month
s-s
Safes Tax Projections vs. Actuat
~, $12,oao
$10,000
m 0
L
~
$8,000
w
0
$6,000
} $4,000
$2,000
$o
h $s,0oo
o $4,000
s
~ ~
o $3,000
0
F
$2,000
$1,OOo
$o
---~--Projected, per budget
f~Actual
8107 9107 - 10/07 11107 12/07 1/08 after 2108
budget
change
Month
Property Tax Projections vs. Actual
3ro8
--~-Projected, per budget
~~Actual
8/07 ~ 9107 10/07 11107
Month
12107 1108 after 2108 3108
budge#
change
6-9
Transient Occupancy Tax Projected vs, Actual
,~ 2,000
1,600
1,200
O
m $00
}
400
0~
3,000
b
C
i0
w ~ 2,000
R
0
0
m
~ 1,000
0
---~-Projected, per budget
-~--Actual
r ~
~ ~
8107 9/07 10/07 11!07 12/07 1/08 after 2/08 3/08
budget
change
Morrth
Licenses Sz Permits Projected vs. Actual
r ~
r '~
-•^Projected, per budget f
~-Actual
8/07 9/07 10/07 11/07 12/07 1/08 after _ 2108 3/08
budget
change
Month
6-10