06. Treasurer's ReportADMINISTRATIVE SERVICES DEPARTMENT
CUPERTIN4
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
(408) 777-3220 • FAX (408) 777-3109
SUMMARY
Agenda Item No. ~ "
SUBJECT AND ISSUE
Meeting Date: June 2, 2008
Accept the Treasurer's Investment and Budget Report for April 2008, including a status
report on General Fund Revenue and Expenditures.
BACKGROUND
INVESTMENTS
The market value of the City's portfolio totaled $63.7 million at April 30, 2008, with a cost
of $63.5 million, with a $0.2 million unrealized paper gain difference. The gain results
from the economy's lower interest rates, which drives up the market value of fixed interest
securities in the portfolio. With interest rates declining, the portfolio's yield fell to 2.99%
in April, compared to 3.10% the previous month and 4.79% a year ago. The Local Agency
Investment Fund (LATE} yielded 3.40% for April, down from 3.78% for the previous
month and 5.22% a year ago.
$3.1 million in Federal Agencies, Treasuries and certificates of deposits were called or
matured. $7 million was shifted from a US Treasury money market fund back into the
Government Securities money fund as credit markets showed more stabilization. The
City's cash & investment balance increased $2 million due to property tax, sales tax, and
franchise fees collected.
Investments are in full compliance with City investment policy and/or State law, and are
tiered to provide sufficient cash flows to pay City obligafiions over the next six months.
GENERAL FUND REVENUES AND EXPENDITURES
Year-to-date revenues through April 30, 2008 are up 3% over a comparable period from
last year. Growth in sales taxes, hotel taxes, property taxes, utility user taxes, and interest
earnings are offset by declines in development-related fees and taxes. However, because of
the worsening economy, sales tax and license/permit revenues are turning out less than
budgeted offset somewhat by stronger property tax and charge for services revenues. With
two months to go in the fiscal year, overall revenues are trending to end up $300,000 below
budget. Budget savings in expenditures may offset this shortfall.
s-~
Treasurer's Investment and Budget Report
June 2, 2008
Page 2 of 2
The current expenditure budget calls fora 19% increase over last year's actual results,
partially reflecting the recreation enterprises move into the General Fund this year.
However, operating expenditures through April are up only 12% 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 April 2008.
Submitted by:
David Woo
Deputy Treasurer
Reviewed by:
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
s-z
City of Cupertino
Investment Portfolio
April30, 2008
o Matun 1:,Y7
SECURITIES MATURED/CALLED -
Ol/14/08 04/14/09 FPCB callable
T 4.22% 4.22% 1,000,000 ^ 1,000,000 1,000,004 0
_ 01/17/08 01/17/12 FFCB callable 4.65% 4.65% _ _
y 1,000,000 1,000,000 _
11,000,000 0
04/07/04 04/07/08 Cole Taylor Bank, step coupon _
3.01% 3,01% 97,000 97,000 ~97,000 __
0
12/20/07 04/30/08 US Treasury Note 4.88% 3.01% 1,000,000 1,000,000 1,000,000 0
SECURTTIES PURCHASED - __._..._.._.__~
CITY PORTFOLIO y
CASH
04/30/08 Wells Fargo -Workers Comp Checking 16,513 1
6,513 ~ 16,513 ~ 0
- ___. 04/30/08 Wells Fargo - Regular Checking 778,774 _
_
_
~ 778,774 778,774 0
04/30/08 Wells Fargo -Investment Sweep 0.63% 0.63% 887,440 887,440 887,440 0
1,682,727 1,682,727 _
~ 1,682,727 0
LAIF __ -~
04/30/08 LAIF -State Pool 3.40% 3.40% IG,739 962 16,739,962 16,739,962 y _ ~0
CERTIFICATES OF DEPOSIT ~ -° --- --- --- ----~-_._... _...
-
03/26/04 0926/08 South Coast Community Bank_ 3.20% 3.20% 98,000 _ 98,000 97,999 (1)
11_23/07
____ 1120/08 Arizona Bank & Trust 4.88% _ 4.88% _
_ 10,108 10,108 _
mm _
10,108 `~
0
(123/07 1120/08 Banktrust 4.88% 4.88% 94,000 94,000 94,000 0
1123/07 1120/08 Cardinal State Bank ____ 4.88% 4.88% 9
4,00
0 __
~ 94,000 _
94,000 ~ 0
1123/07 1120/08 Colonial Bank NA 4.88% 4.88% _
_
94,000 94,000 ^44,000 _
0
1123/07
1120/08
Covenant Bank
4.88%
4.88
% __ _
94,000
94,000
94,000 _
0
1123/07 1120/08 Four Oaks Bank 8c Trust Co 4.88% _
4.88% 94,0
00 94,000 ____
94,000 _ _
V 0
1123/07 1120/08 Johnson Bank 4.88% 4.88% _
9
4,000 ____
94,000 _ ___ _
94,000 __ ___
0
1123/07 1120/OS Midwest Bank of Western Biinois 4.88% 4.88% _
94,000 94,000 94,000 0
1123/07 1120/08 Solutions Bank 4.88% 4.88% 48,892 48,892 48,892 _
0
1123/07 1120/O8 The Brand Banking Co 4.88% 4.88% T 94,000 94,Ot10 94,000 0
1123/07 1120/08 Vision Bank 4.88% 4.88% 94,000 ___. 94,000 _ _
-- 9
4,000 _ _
~
0
1123/07 1123/08
~ Pinnacle Bank 4,88% M 4.88% 95,000 95,400 _
95,000 ___
~ 0
03/17/04 03/1_7/09 _
Peoples Slate Bank ____ 3.40% 3.40% _
99,000 99,000 98,548 {402}
0324/04 0324/09 Washita State Bank 3.35% 3.35% 99,000 99,000 _
_ 98,555 ~ (445)
12/30/05 12/30/09 Meridian Bank 4.80% 4.80% __
~ 99,000 99,000 99,716 71G
1228/05 1228/IO Nat'l Bank of New York City 4.90% 4.90% 47,000 97,000 96,937 _
(63)
~~
1,492,000 1,492,000 1,491,805 (195)
MONEY MARKET FUNDS _
04/30/08 Wells Fargo Government 2.23% 2.22% 12,317,140 12,317,140 12,317,140 0
04/30/08 We11s Fargo 100%Treasury 1.04% 1.04% __
100,000 100,000 100,000 ___
0
12,417,140 12,417,140 12,417,140 0
6-3
City of Cupertino
Investment Portfolio
April 30, 2008
o Matunt ~~5~7'" -~~"A1J`C7~-
~ ~
AGENCY NOTES ____
11/21/OS 06/23/08 FFCB 5.79% 4.65% 1,001,869_ 1,0_00,000 1,004,850 3,281
_
01/30/08 _
_ 04/12/08 _
FFCB 4.50% 2.70% 1,006,5]7 1,000,000 __1,007,50_0 983_
____.
01/28/08 10/01/08 FFCB discount note 2.b8% ~ 2,77% 988,53b 1,000,000 991,400 2,864
12/30/03 12/30/08 FHLMC callable, step coupon 4.75% 3.90% 1,000,000 _ 1,000=000 1,014,020 14,020
02/05/08 02/05/09 FFCB callable ~ 3.00% 3.00% 1,000,p00
~. 1,000,000 1,000,000 0
01/22/08 08/03/09 FFCB 5,25% 2.55% 1,033,072 1,000,000 1,030,000 _ _ (3,072)
11/21/05 07/12/]0 __
FHLMC 4,13% 4.73% 988,140 _ 1,00_0,000_ _ 1,027,190
~J 39,050
l l/i9/07 ll/i9/10 FFCB callable ~ 4,63% 4.63% 1,000,000
~ ^ 1,004,000 1,012,810 12,610
12/15/OS 12/15/10 FHLMC callable ~_ 5.04% 5.04% 1,000,000 1,000,000 1,OL6,7S0 16,750
W ~
9,017,834 9,000,000 9,104,520 Sb,686
~ - ~-__
US TREASURY SECURITIES ~~~- ___ ^^_
12/10/07 OS/15/08 US TreasuryNoto 2,63% 3.17% 99_9,776 _ 1,000,000_ _ 1,000,390 6t4
_
_
12/07/07 _
05/15/08 US Treasury Note 2.63% 3.25% _ 999,751 1,000,000 1,000,390 _ 634_
02/29/08 06/12/0
8 ~~
US Treasury Bill 1.76% _ 1.80% I,995,796 _ 2,000,000 1,997,040 1,244
01/28/08 _
06/30/08 US Treasury Notc _
5.13% 2.25% 1,004,7_66 1,000,000
~ 1,006,330 1,564
12/10/07 ~. 07/31/08 US Treasury Note 5.00% 3.27% 2,008,478 2,000,000 2,017,340
____.. 8,862
_
12/07/07 08/15/08 US Treasury Note 4.13% 335% 1,002,189 1,000,000 1,007,500 _ 5,311 _
12/10/07 08/31/08 US Treasury Note 4.88% 3.34% 2,010,008 2,000,040 2,021,560 11,552
12/07/07 09/30/08 US Treasury Note 4.63% 3.27% 1,005,455 1,000,0(}0 1,Utz,SSU Y,tz~
12/10/07 09/30/08 US Treasury Note 4.63% 3.29% 1,005,430 _ 1,000,000 1,012,580 7,15E
12/07/07 10/31/08 US Treasury Note 4.88% 3.27% 1,007,777 1,000,000 _ 1,015,780 8,00_3
~
12/10/07 10/31/08 US Treasury Note 4.88% 3.25% _ 1,007,937 1,000,000 1,015,780 7,843
12/07/07 11/15/0$ US Treasury Note 4.38% 3.31% 1,005,604 1,000,000 1,014,300 8,696
12/10/07 1(/15/08 _
US Treasury Note 4.38% 3.27% 1,005,836 ~ 1,0_00,000
_ 1,014,300 8,464
12/10/07 12/31/08 US Treasury Note _
4.75% 3.18% 2,020,377 2,000,000 2,040,000
_ _ 19,623
12/20/07 01/31/09 US Treasury Note 4.88% 3.06%
M 1;013,318 1,000,000 1,023,130 4,812
02/19/08 02/18/09 US Treasury Note ~~~ 3.00% 1.7Z% 1,009,672 1,000,000_ 1,009,450 (222)
03/10/08 03/31/09 US Treasury Note 4,50% 1.44% _ 1,027,799 1,000,000 1,023,b70 (4,129)
03/12/08 _
04!30/09 US Treasury Note 4.50% 1.51% 1,029,480 1,000,000 1,025,550 (3,930)
~•~- .
22,159,448 22,000,000 22,257,670 98,222 _
Total Maoa ed Portfolio G3 509 1]1 63 3l 829 63 693 29 184 713
Average Yield 2.99% _ _._
Avcragc Lcn th to Maturity (in years) 0.35
TRUST PORTFOLIO (KESTER TRUST) _ ~ .__~
CASH
04/30/08 Wells Institutional Money Mkk Acct 2.29% 2.29% ~~47,502 47,502 47,502 0
Total Trust Portfolio 47 02 47 502 47 02 0
BOND RESERVE PORTFOLIO
_ ' ~~~_~_
Bond Reserve Acct Ambac Assurance Security Bond '1 l 1
_____ _ _` ____
Bond Payment Acct Wails Treasury Plus Money Mkt 1.21% 1.21% 1,202 1,202 1,202
Total Bond Reserve Portfolio l 202 1 202 1 02 0
6-4
Rate of Return Comparison
5.50%
5.00%
4.50%
4.00%
3.50%
3.00°/a
2.50% ; ~ - , ~
~'1 ~1 1~1 ~'1
-~LAfF
~-• Cupertino
~~
m5,
~~c`
6-5
COMPLIANCE WITH INVESTMENT POLICY j
City of Cupertino
__- ---._ . _.._..__ -._._... -- ----- ... __ - - -- --_ ._ j
April 30, X008
.. .. .
--... ---- Category..._...-...---------------- ----- Standard ------ Comment
Treasury Issues No limit Complies
US Agencies No limit _ Complies
_
Medium Term Corporate Bonds _ _ __
30% with Arating Complies
LAIF -
X40 million Complies
Money Market Funds 20% 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
Negotiable Certificates of Deposit 270 days .& 25% __ __ _ _ _ _
30% iComplies
iComplies
Repurchase Agreements 365 days Complies
Reverse Repurchase agreements Prohibited iComplies
s-s
City of Cu ertino
General Fund Budget Re ort
A ri130, 2008 ,
Bud et
Actual f
2006/07 2007/08 4/30/2007 4/30/2008 Anal sis of Trends
Taxes: f
Sales Tax 11,575,000 14,190,000 8,034,848 9,462,379 Song electronic equi .sector & major new rovider
Pro erty Tax 6,290,000 6,710,000 5,616,076 6,124,370
'Transient Occu anc 2,363,000 2,660,000 1,875,299 , 2,041,104
Utili Tax 2,392,000 3,240,000 2,105,385; 2,349,018
Franchise Fees 2,500,000 2,580,000 2,171,234 2,143,278
Other Taxes 2,308,000 1,400,000 1,879,394 1,195,115 ~ AMC & Whole Foods construction tax last year
Licenses and Permits 3,050,000 3,030,000 2,608,211 2,179,245 1 Buildin ermits down
Use of Money & Pro a 1,380,000 2,100,000 1,352,955 1,660,441 Strop cash sition
Inter ovenunental 4,706,114 4,505,071 2,668,653 2,494,764 SB 90 claims down; Last 's VLF included corrections
Charges for Services 1,482,000 1,150,000 1,265,997 1,056,829 Development down; Senior Center now in Gen Fd
Fines & Forfeitures ~ 680,000 800,000 495,400 488,091
Other Revenue 140,004 116,200 197,666 64,180
Sale of Pro erty 1,600,000
Total Revenue 4 42 1 0 7 1~.258.8I4 f Up 3%; forecasted to end up $300k below bud et.
O eratin Ex enditures: ~
Administrative 1,362,195 1,499,095 ~ 1,046,276 1,090,719
Law Enforcement 7,177,378 7,871,526 5,998,758 6,405,297 Full ear of addt'1 de uties
Communi Service 917,644 1,275,848 907,885 927,643
Administrative Service ~ 4,978,400 4,535,811 3,116,968 3,140,687
Recreation Service 2,428,298 3,908,359 1,424,943 2,902,766 BBF and Senior Center in General Fund this ear
Communi Develo ment 3,885,441 3,722,479 2,587,793 2,735,928
Public Works 9,845,280 11,143,739 7,399,224 8,072,019 Park, buildin maintenance
Total Ex enditures 0 2 1 47 7 0 U 12%; will end u below budget
Transfers In ~ 1,459,974 880,164 416,660 741,828 Resource Recovery; C1P fundin chap es
Transfers Out -7,026,296 -17,434,750 -12,038,166 -14,826 ?50 New CIP
Net Gain/ Loss 4 f - _ 1 7 j
Sates Tax Projections vs. Actual
m $12,000
$10,000
0
L
~ ~ $8,000
r
b
0
$6,000
} $4,000
$2,000
$0
•---~-Projected, per budget
~~Actual
8/07 9107 10/07 11/07 12/07 1108 after 2108
budge#
change
Month
3108 4108 with
rebates
Property Tax Projections vs. Actual
H $7,000
~a
$s,ooo
a
0
,~ ~ $5, 000
n $4,000
0
$3,000
d
~- $2,000
$1,oao
$o
--~-Projected, per budget
~~~Actual
8107 9/07 10107 11107
12/07 1/08 after
budget
change
Month
2108 3/os 4108
6-8
Transient occupancy Tax Projected vs. Actual
2,400
ty
2,000
1,600
A
m
0 1, 200
m
800
400
0
---~-Projected, per budget
-f-Actual / /
/
!~ .r-
8107 9/07 10107 11 /07 12/07 1 /08 2108 3108 4108
Month
Licenses & Permits Projected vs. Actual
„ 3, 000
m
+n
~ 2,000
R
0
a
} 1, 000
~~
--•--Projected, per budget
--~--Actual
a
8107 9107 10/07 11107 12107 1108 after 2/08
budget
change
Month
3/08 4108
6-9
Charges for Services Projected vs. Actual
~, 2,000
N ~
~ ~
0 1,000
m
}
0
---~-Projected, per budget
-~--Actuaf
~ ~~
r '' ~
8107 9/07 10/07 11107 12/07 1108 after 2/08
budget
change
Month
General Fund Expenditures Projected vs. Actual
w 30,000
-v
a
25,000
0
r
~
2o
ooa
.~
,
0
15,000
~a
1o,ooa
5,000
0~
3/Uii 4/Utf
~~ ~
--~-Projected, per budget
-~-Actual .
8107 9107 10/07 11107 12107 1/08 after 2108 3108 4/08
budget
change
Month
6-10