07. Treasurer Report
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City Hall
10300 Torre Avenue
Cupertino. CA 95014-3255
Telephone: (408) 777-3220
FAX: (408) 777-3366
CUPEIQ1NO
DEPARTMENT OF ADMINISTRATIVE SERVICES
SUMMARY
Agenda Item No. ì
Meeting Date: January 3, 2006
SUBJECT
Accept the Treasurer's Investment and Budget Report for November 2005.
BACKGROUND
Investments
Attached is the Treasurer's Investment and Budget Report for the period ended November
30, 2005. The report includes all funds in control ofthe City.
The market value of the City's portfolio totaled $39.7 million at November 30, 2005,
with a maturity or face value of $40.2 million. The market value of the portfolio is lower
than their maturity value because as interest rates have risen, older securities in the
portfolio with low fixed interest rates are valued at a lower price in the market. This
difference between market and maturity value is an unrealized paper loss at this specific
date. At maturity however, market and maturity value is the same and the City intends to
hold these investments until maturity and redeem their full value.
The Local Agency Investment Fund (LAIF) yielded 3.64% in November compared to
3.46% in the previous month and 2% a year ago. The City's portfolio as a whole yielded
3.29% in November up from 3.14% the previous month and 2.46% a year ago. As interest
rates have risen, the yield on a variable-rate investment such as LAIF has climbed above
the fixed rates of certain individual securities in the portfolio. Amid preliminary signals
of a leveling off of interest rate increases by the Fed, staff began to lock into some of the
higher yields available by investing $3 million into three Federal agency securities during
November yielding 4.7% to 5%. Two of the securities are of 5-year duration and one will
mature in 3 years. The investments also increased diversification. A government agency
money market fund used by the City as an investment sweep vehicle has recently
provided yields more attractive than LAIF. By increasing the average balance in that fund,
the City was able to move into a higher interest rate bracket offered by that fund.
The City's cash and investment holdings increased $1.2 million during November, helped
by the sale of the Oak Valley properties.
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Printed on Recycled Paper
The investments of the City of Cupertino are in full compliance with our City investment
policy and/or State law, and are tiered to provide the City with sufficient cash flows to
pay its obligations over the next six months.
Revenue and Expenditnre Trends
Planning, building and engineering revenues are still exceeding the pace from last year
and are exceeding budget expectations of this year. Sales taxes and transient occupancy
taxes are still showing improvement from last year. Higher revenues from one energy
provider is driving an increase in utility user taxes.
Expenditures rose significantly because of repair and maintenance jobs that were
budgeted for parks, sports fields, and street lighting. There were also the election costs
and the costs of handling the increased permit activity. Overall expenditures are now on
par with budgeted expectations for the year.
RECOMMENDATION:
Accept the Treasurer's Investment and Budget Report for November 2005.
Submitted by:
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.......
David Woo
Deputy Treasurer
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City of Cupertino
November 30, 2005
ACTIVITY DATE
PURCHASE MATURITY
--- ------ -OESCRWTföN
-----
___ COUPON _ADJlJS!ED
RATE cOST --
MATURITY
.--.".
V AWE
MARKET UNREALIZEB
V AWE PROfITIWSS
---- ·SECÜRITIESCALLED ~--------- ---,-------t-- --, -----
=--...- --- -- __L_~~~~~~~-:r-----~-E-i:::~---
::: - -. - - --- -----šECURmEsÞüRÖ-Í...ffED - _ _ i __ ___ --- - - ~ j
11/21/05 06123/08 ffCB _n _ _____ ___~, _1.027.198 _ 1.000.000___ 1,025,4,0 __ .<1.738)
::--ii/30ro-S . --04/07/10 ffCB callable _____ __.2 70~ ___ 948,9~1 _ 1.000.000 955,630_ _ ~~
_ 11/21105 07/1211()_ fHLMC__________ _ _ 413'10 _ 975.112.___1,1100.001J.. 973.130 (1.983)
---- - ----- - - - - --- ---- -- -
CAsH- - --~....:. CURR~NT POIUfOLlO__ ~ ._ t~ ----=~ ¡-----I-~=--
~. - --- j=:~}~;~~ :;¡ ~:::: ~::k= c~mp ~¡;kmgj - -=~T-:~:~~¡}a__27'~:~' 27,~:~j -~___-1
__ __ : 11/30/05 Wells Fargo - ~egular Checking , . 1__ 86~~'___.s66.941 __866.9.±!. _ __ 0
_ __1_ 11/30/05 Wells Fargo - Money i\o1arket Checkmgl 2.82%..l___' 216,184 21~,-~~4_. .__ __~~~~ ____..- 0
-----r------- -- I' - . -- - 1,110,849 .1,1I0,849_.!>1I0,849___ 0
LÃIf----±1~3~/0~ ~~_ Statep-"o~ _ _ _~ ~ - - -~~64J;'02~~~_ 1~02~402 _13,027,:_2_-----0-
NE~i~~L~1'f!~t~7~~~r~;:;~t1 ASSI1_=---t_i7Ö'h__~9,00~-- -=9~~Ö¡jt-95.288 [_ __ (3:712)
0..3/1!~~4_~__ 03/17/08 America!:!_~tJ:'ed saVi~~__.Bank _.-j.--.--.-~.OO~ .______.-?~,9~~-.L-..-?-9,O~~-.--... ~~~_?~i_..-(~-~~. ~?)
=:~!;i*~~ ~g~i~~!F~:ri;;~GA ·.:--d~t~~~=-ij;F--=ii~~~ .=:::::: _·.~H~~
_.lJ3/26/04 03126/08 Pnvatebank & Trust ---rJ20%- _. 99.0~~t-__ 9.2.,000 _ 95,335._ _Q.6~1
04/07/04 04/07/08 Cole Taylor Bank ,step 2.25% 97,000 97,000 94,477 (2,523)
03/26/04 0~/26/08 Southcoast Co~untiy Bank ---- 3 20% 9.8..000_::~ 98,000 --. 9~,.5..-._. .:_.7..4 -~=--(4Æ26).
03/17/04 03117/09 Peoples State Bank 3.40% 99.000 99,000 94.283 , (4.717)
___03/2410<1 _ ..IJ3/24/09 Wash'ta State Bank _ - ~5% _n 99.600 1-- 99.000 . _94.0981-- (4.902)
}_ '__ 986,000 -I- 986,000, __.!45,892 . (40,108)
MONEY.i\o1-':::; f~NDS .... =-=--==--:-- -- -n:.~-1= _:.-~-===---' _n-==--¡_: .-
-------1.-- __ }'!/}Q!QU~e!!s F~g.o G()~~~~~_~~~~L._ _j.____~~~~~----I-~0~~,~~~+_-.!E88,2~~~ 1..9~8,249 _______
__~ t. . --+---- ...~==_. ¡=-=='=8,~4~. ___..10"88,249 -=~1~88,2~~ == n 0
~G~~;!~~~OTE~~~~;~: ::t: ~::::::: - ---~:-t-=~;~~ ~~Õ:Õ~Õ ~= I,~~~:~:-- !~~;:~~~ - n~~~~~~
__ - __ _I~ ___n _"._ u.._.___ -------.,-
08/07/03 08/07/06 fHLB callable, step coupon 1 233% 500,00.0. 500.000 493,75.0 (6..2 .50.)..
---¡¡¡¡¡11I03 08/11/06 fHLB callabl'- - --- -- 2 500/; 2.400.000 2.406:000 2.365.512'·- --(34,488)
--03/08/04 12/26/06 fHLMC callable -- 230% 794'}3ij;¡- 800.000 780;328 (14.009)
- 07/09/93 04/15/07 fHLMC woth pnnc'pal paydown -- 667% 5<i,Ö21 -- 56.751 56,662 (2J59)
e- ~~~;~r ---r~~*~t1C callable_ .:::.--=---"----j==--~~~~1-1,~~~:~~~ . ... I.~~~:~~~· :~~::~~ =-(~H~~;
I- -Õ:;:f¡õ~~+~~-fõ~ ~~~~~:~I~'--rate ==-=i--- ;~~~~_l,~~~:%~~, H~~·· I':~e:~¡~-- (i~~~{~]
1-- ~~;~~;~~ ;=~~~~;~~ :rBAc~~:~:fee. step-c~upOn_ .. r ";~~~t=-: :~~~:~~%F -l~~~~fi -¡:~~~::!Õ 1~(38~~}~]
02/25104~ 02125/08 FHLMC ____m__ - . '-im.:--i,ooo.ÓOO t-'--1.000:006 t966,640":-¡33j¡;0)
'::-¡lj21/05 06/23/08 FFCB--~=__--==--=---=-___ -T--:5:79o/,;! _1.0.27,198 -Töoo.oob:I.025,460.·· -~
n__ Ol(_~(~~ __ 08/06/08_ ~~.[.B callable, s!:p~~upo~ ____1-_ 3.5~~[=__ 99~~~!.._ ___I!Q~~.~O_OOn'. _ .___~~~ ____(~? ,~.~~~
04/29/04 10/29/08 FHLB callable, step coupon F 3.25%1 300,000 300,000 292,032 (7,968)
12/15/03 12/15/08 fHLMC callable, ,'"'I,-COUpOO-----j.50o/,;T 1,000.000 -I,bbo.oba -- 987~240 n'__ 02.760)
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City of Cupertino
November 30, 2005
ACTIVITY DATE
PURCHASE MATURITY
~-
COUPON ADJUSTED
RATE COST
MATURITY
.u
VALUE
MARKEr UNRE~I-~
VALUE PROFITIWSS
DESCRIPTION
-T27jo¡õj+~ 12/30108 FHLMC èaíïable. step coupon .... 2.75%ll.OOO,Oò6i 1,000.000 998,870 ¡ JI.~O)
. ~~~~;~: H;!~;~: E~B~C:;¡i~~l~ step co~p~-~ ~= = ~~m,-·I·i~~:N= I~i~~~~~{ l,m:~~~-(fii
04/30104"_ 04/30109 FHLB callab~step Coupo" .--,__._LI}~t=-~:OOO,O~'ti-.=l.OOO,OOO ._9~ (9.060)
11130105 i 04107/10 !'FC!! c~IIab1e.__ L .. .3:70%J 948,951J..__1,lJOO,OOO ;.95~,630r___ 6.679
~~~¡Z°T O~I~I~ ~<:- ~_~=~=- ! 4~3:rl_ =97S,113[ -I'~~'~~1= ...273,130 ! (1,983)
~~~"In----t-_=___ ~I _u_ 3.2,88'7,569: 22,~6,7~1. -2:'58~697f~(~O~
USGOVERNMENTSECtj~ITIES .- - - - -+t ----- --.------
__-0~/3110S ___o.8iji~s Treasury N:te__ ___ ---- -- .- 238o/1=-_::~::l~_i - - ::i~i:~~ -== ::~¥o~ !~~;:
Total ~a..na..~!~ ~~~tfoliõ---~-=------=-----_ _ _-=-=~~ _ ___ I I 40.082.8_~1___ 4~,169.25] I 39.~~~_---º±~~2)
Average Yiel~_ _ _ ____ _ I 3'29~1Yo t---- _I - -t----
Average~enrh-.!O_~(inyearS) ____ 1.37 __ ~_____ r _ _~_____
::rn'<At;,,:J:= &^"",;",'¡w,,,,, -:-, = á-:- h- ~ r = :-
_()7/27~~~l!!1"Pert:: Na~(Kester Trust) _ ___~~% f-_42.603___42,603 42,603. u_.o.
Total Trust & Agency Portfolio i 42,603 42,603 42,603 0
-----1------------ -- ------1---- I
--------+---- - ----- -- - -~ -----t---------tn-
inn. , ~ BONDRESERVEPORTFOLi<>.L_- ---·1
~~~~,~~.Acct#078791 Wells FargOTreasury-Pl~~~_Oney_~ 3.21% ----li,l~~ ___.~_
Bond Reserve Acct #07879 Ambac Assurance Security Bond +-- I
.!3~~d Reserve Acct #07879~ Wells FargõTëëâS~ry.~_I1:'s Money Mkt ~___ ~21% -- 2,õiõ ---
Total Bond Reserve Portfolio i: 13,210
11,140
I
2,070
13,210
.+-----+ .
i_ni·
I
11,140
I
2,070
13,210
----
..----
--
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- --_._-~
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4.00%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
Investments by Type
Managed Portfolio
US Treasury Notes
2%
I Rate of Return Comparison I
6/04 7/04 8/04 9/04 10/04 11/04 12/04 1105 2/05 3/05 4105 5/05 6/05 7/05 8/05 9/05 10/05 11/05
I::~ertinol
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COMPLIANCE WITH INVESTMENT POLICY
City of Cupertino
November 30, 2005
Category
Treasury Issues
US Agencies (eg FHLMC)
Medium Teffil Corporate Bonds/Notes
LAIF
Money Market Funds
Maximum Maturities
"
Per Issuer Max
Bankers Acceptances
Commercial Paper
Negotiable Certificates of Deposit
Repurchase Agreements
Reverse Repurchase agreements
Standard
No limit
No limit
30% with A rating
$40 million
20%
25% up to 15 years
Remainder up to 5 years
10% (except LAIF)
180 days & 40%
270 days & 25%
30%
365 days
Prohibited
· Complies
Complies
Complies
Complies
· Complies
· Complies
Complies
Complies
Complies
Complies
Complies
Complies
Complies
Comment
l-lø
_----1._._
±~--
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------
-
._n___~___
Actual
11I30/2004 11I30/2005
City of Çuper~o 1
General Fund Budget Report I --t-
November 30,-2005 ~___ ____L
Budget
T 2004/05 2005/06
Analysis of Trends
Taxes: i I
~- r t ---,
Sales Tax ___ I 8,400,1JQQ¡ 9,150.0001 3,157,IB 3,598,155
Property Tax 3,748,000: _...±,157,000 687.903 780,719 _
Transient Occupancy -1560,000[ 1,730,000 564,804 699,530!Jp 14o/~.to 36% on individual hotels. __
Utility Tax 2,740,000 --.J,675,OQO 721.273 866,969 Large increase from one energy provider,
Franchise Fees 2,312,000: 2,300,000 390,064 407,184 ___._.._
Other Taxes 1,435,000 I 1,550,000 533,761 588,632 Business licenses and housing mitigation up
Licenses and Permits 1,600.0001 2,800,000 1,023,779 1,751,741 I Healthy building activity and new cost recovery fee structure
Use of Money & Property l,ls6,~ 1,075,000 206,906 L 238.211 ~inc1udes effect of market value-OfiIWestments
Intergovernmental 2,820.6871 3,152,000 834,792' 278,254! No booking fees this year; late 2003/04 VLF recorded in 2004/05
-~._~ -'-----+- --!..------.-.. -.--------.---
Charges for Services , 490.000 1,285,000 ¡ 424,835: 947,878 ¡Healthy building activity and new cost recovery fee structure
...L__~__~
Fines & Forfeitures ! 600.000 650,000 154,021: 164,845_____________
Other Revenue I 162,001 ....-.-116.2001 J_.___.......J.!~648 66.460~_
Sale ofproperty 1,500,000 1,500,0001 1 2,422,849 .:Qak Valleyp~cel sal~s___.____.___.___
---.!otalRevenue I 285545871 3~]1020g+_ 87109671 12811427r_~'
Qperating Expenditures:+---~L- ____~. _'_________l...____~-----u---- __u_____u__ --- --
Administrative 1,365,026 1.345,2351 411,167' 483,270: I
_ __..__ ...__...___ _..__ . . __,______..__un_._._.___.________
Law Enforcement 6,853,724. ...__7,179,878 r- __ 2,600,886 2,792,854 1
Communi.!}'.Service_ 718,355 839,445 298,841 360,017' I ______.___.__________
Administrative Service _:l,191,024__~¡¡33,6§.3__ 1,639,304 2,012,402j 1___
Recreation Service 2,261,219' 2,433,909 800,582 950,4581
Commíílìiiÿ-Development I 2,823,86~ 3,795,086 I 921,806 1,409,938, To service the increased permit activity, --..
Public Works I 9,367,4241 9,797,933 2,955,455 3,821,3901 Undertaking of maintenance and repairs deferred from last year.
Total Expeñditures·----.,- 275806371 '10 '125 149 I 9628041 11 8303291 - -..-.-.--.~---- -
-- _.____ I' -- I . I ________________~__ _
Operating Transfers In 2,737,3651 1,600,000 ¡ 1.140.565 666,6691
Operating Transfers Out --4,864,000 ----5,168,000 ì -2,026,665 -2,203,3331
____~=-- ______1 ¡ . I ------- ~------ ---
Net Loss -I 152 685L_ -I 752 ~ -] 803 ~_ -555 56fit- Without sale of property, actual net loss would be $2,978,415 at 11130/05 ---i
I ,
---
---j
---j
-----l
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Sales Tax Fiscal Year- To-Date 2005-06
· $4,000
"
c
·
·
,
o
~
.... $3,000
-
$0
-
-.......
--
w
·
·
Q
b
'Z
·
·
~
$2,000
$1,000
--+-Projecfed
-*-Actual
7/05
8/05
9/05
10/05
11/05
Month
Property Tax Fiscal Year-To-Date 2005-06
$0
--+-Projected
_Actual
· $800
"
c
·
·
,
o
~
w
..
·
Q
b
'Z
·
·
>-
$400
9/05
10/05
11/05
Month
Transient Occupancy Tax Fiscal Year-To-Date 2005-06
· $800
"
c
·
·
,
0
~
....
$600
w
·
·
Q $400
b
....
.:.
·
·
>-
$200
. -
~
$0
7/05 8105
-
-
-
-+
-.
.-
--+-Projected
____Actual
9/05
10/05
11/05
Month
7-/
· $3,000
~
c
·
·
,
0
~
>-
$2,000
~
·
~
0
ò
>-
<
·
·
,..
$1,000
$0
. $15,000
'C
~
~
.
~
o
.<:
...
..
.
1;
c
"
'7
Ii
.
>
$10,000
$5,000
Planning, Building & Engineering Fees Fiscal Year-Ta-Date 2005-06
--... Projected
_____ Actual
....
--
-
....-
--
--
-....
7/05
8/05
9/05
Month
--
-
--
--
10/05
11/05
General Fund Expenditures Fiscal Year-ta-Date 2005-06
--
$0
9/05
Month
7/05
8/05
,..
_-Budget
____ Actµal
10/05
11/05
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