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04 Budget Report ::\1 i'~-:J ::::=J City Hall 10300 Torre Avenue Cupertino, CA 95014-3255 Telephone: (408) 777-3220 FAX: (408) 777-3366 I F CUPEIQ1NO DEPARTMENT OF ADMINISTRATIVE SERVICES SUMMARY Agenda Item No. ----1-- Meeting Date: March 7, 2006 SUBJECT AND ISSUE Accept the Treasurer's Investment and Budget Report for January 2006. BACKGROUND Attached is the Treasurer's Investment and Budget report for the period ended January 31, 2006. The report includes all funds in control of the City. Investments The market value of the City's portfolio totaled $44.4 million at January 31, 2006, with a maturity or face value of $44.8 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 3.96% in January, an improvement ITom 3.81 % in the previous month and 2.26% a year ago. The City's portfolio as a whole yielded 3.65% in January up ITom 3.56% the previous month and 2.55% a year ago. Short-tenn interest rates continue to rise reflecting the Federal Reserve's hikes in interest rates, however economic indicators forecast a potential pause in these increases. Long- term interest rates remain relatively steady. The City's cash and investment holdings increased $4 million during January as the City received an installment of property taxes. 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. Printed on Recycled Paper 4- \ Revenue/Expenditure Trends Permit revenues and charges for services related to development activity continue to surpass last year. The third quarter sales tax results for July 2005 to September 2005 just arrived and restaurant sales were up, with general retail declining and business-to- business flattening out compared to a year ago. However business-to-business is anticipated to rise in the fourth quarter. Property taxes and TOT continue to exceed last year's pace. Community development expenses are higher, mostly funded by the increase in building and development revenues. Public works has incurred higher expenses as they continue to tackle the maintenance backlog. Community service and programming costs have risen as more meetings are televised. The 2005/06 budget amounts included in the enclosed General Fund Budget Report incorporate the mid-year budget adjustments approved by the City Council last week. RECOMMENDATION Accept the Treasurer's Investment and Budget report for January 2006. Submitted by: Æ--~ David R. Woo Deputy Treasurer Lj - d-- City of Cupertino January 31, 2006 ACTIVITY DATE COUPON ADJUSTED MATURITY MARKEr UNREALIZED ...nw"" . KJ\W \-VOl Vf\LV" Vf\LV" SECURITIES CALLEb 03/23/04 0[/30/09- r NMf\ callaDle 2.50% 500,000 500.000 500.000 0 SECURITIES PURCHAoED ---- ._---~- 0[/27/06 07/27/07 ros J:5anK 4.60% 97,000 97.000 97,000 0 CURRENT PORTFOLIO CASH .._.._'"._--~- 01/31/Ò6 Wells Fargo - Workers Camp Checking 15.500 15,500 15,500 0 0[/3[/06 Wells Fargo - Regular Checking 1,165,406 1,165.406 1,165,406 0 0113[/06 Wells Fargo - Money Market Checking 3.05% 62.504 62,504 62,504 0 _.~ .. 1,243,410 1,243,410 1,243,410 0 .--." LAIF ~.- Lf\lr - otate rool ---].9'6% 1-11;9,m;nS- ~-IT,'J4B;I:¡; --n;943;12, .---"-. ---1/ CERTIFICATES OF DEPOSIT .-.-- -..- _'_-0- 01/27/06 07/27/07 Lehman Bros Bank 4.60% 97,000 97.000 96,522 (478) 03/24/04 09/24/07 Signature Bank Nat'l Assn 2.70% 99,000 99,000 95.477 (3.523) ~ò37ï7)04 03/17/08 American Trust Fed Savings Bank 3~ÚlföJ; -. ---99;000 -~ij9;¡¡òO -----95~õTS- (3.985) 03/19/04 --03/19/08 PJantersfirst Cordell GA 3.05% 98,000 98,000 94.180 (3.820) 03/24/04 03/24/08 Badger State Bank - -_._-_.~ -- .- ------ 99,000 99.000 94,979 "___n_ -(4,õ2I) 3.00% 03/24/04 03/24/08 Wilmot State Bank -- 3.00% 99,000 99.000 94,979 (4,021) 03/26/04 03/26/08 Privatebank & Trust 3.20% 99.000 99.000 95.370 (3,630) 04/07/04 04/07/08 Cole Taylor Bank ,step 2.25% 97,000 97,000 .-- 94,752 (2,248) 03/26/04 09/26/08 Southcoast Comrriuntiy Bank 3.20% 98,000 98,000 -. 93,610 (4.390) ·-Ò3/17/04 03/17/09 Peoples State Bank 3.40% 99,000 99,OOÒ f----<i4-;2S0 ..~.-- (4.720) 03/24/04 03/24/09 Washita State Bank 3.35% 99,000 99,000 94.108 (4.892) 12/30/05 12/30/09 Meridian Bank 4.80% 99,000 99.000 97,968 (1,032) 12/28/05 12/28/10 Nat'l Bank of New York City 4.90% 97,000 97,000 95.976 (1.024) .-.-- 1,279,000 1,279,000 1,237,216 (41,784) --.-.-.- - MONEY MARKET FUNDS 01/31/06 Wells Fargo Government 4.25% 4,937,354 4,937.354 4,937.354 ._-~ --_.~_._- --·-4-;937,354 4,937,354 4,937,354 0 -- ..---- --..----- ---~-_.- ------..- AGENCY NÓTES 08/24/04 02/24/06 FHLB callable 2.75% 1.200,000 1,200,000 ·-U98.500- -----~---- (f;500) 07/21/03 07/21/06 FHLB callable 2.20% 500.000 500,000 494,220 (5.780) 08/07/03 08/07/06 FHLB callable, step coupon 2.33% 500,000 500,000 495.000 (5,000) 08/Il/03 08/11/06 FHLB callable 2.50% 2.400.000 2,400,000 2.372,256 (27.744) 1---Ò3)08/Ö4 12/26/06 FHLMC callable 2.30% -793;235 _.-.. 800,000 782,264 (12,971) 07/09/93 04/15/07 FHLMC series 1231 - .--. _.._-_._~--~-- -- 6.59% 49.139 47,249 47,161 (1.978) 04/30/04 04/30/07 FHLMC caÏlable 3.30% 499,990 500.000 490,715 (9,275) 12/22/03 06/22/07 FNMA 3.30% 1,000.000 1.000,000 979,690- .~~.__. - (2D,3TO) 04/18/05 10/18/07 FHLB adjustable rate 4.05% 1.500.000 1,500,000 -1;497,330 .-- . -.- -(2;61õ) 04/14/04 12/03/07 FNMA- callable 2.50% 993,386 1,000,000 960,000 (33,386) 12113/05 12/28/07 FFCB --~- _.__".n_ 4.75% 1,000,916 1,000,000 999,380 (1.536) 04/23/04 01/23/08 FHLB callable .--. -- --. 3.15% 1,491,976 1,500,000 1.454,535 (37,441) 02/25/04 02/25/08 FHLMC __.._._______n. 3.13% 1,000.000 1.000,000 967,770 (32,230) Il/2I/05 -- 06/23/08 FFCB 5.79% 1,025.397 ·-1,000,000 1,022.770 (2,627) ---¡jITf2fO;¡ 08/06/08 FHLB callable, step coupon 3.50% 998.968 1.000,000 983.130 (rs,rn) 1-') City of Cupertino January 31, 2006 ACTIVITY DA'" cuUPON ADJu>JED MATURITY MARKET UNREALIZED """u"',, , RAIb CUH '~LUC VALUb 04/29/04 10/29/08 FHLB callable, step coupon 3.25% 300,000 300,000 292,500 (7;500) 12/15/03 12115/08 FHLMC canable, step coupon 4.00% 1,000.000 1,000,000 987,490 (l2,S!Oj - 12130/03 12/30/08 FHLMC callable, step coupon 4.75% 1,000.000 1,000,000 999,380 (620) 03/16/04 03/16109 FNMA callable 4.01% 1,600.000 1,600,000 1,561,504 (38.496) -03/30/04 03/30/09 FHLB callable, step coupon 3.50% 600.000 600,000 593.628 (6J72j 04/30/04 04!30/09 FHLB callable, step coupon 3.13% 1.000,000 1,000,000 994,060 (5,940) --12/28/05 12/28/09 FHLB callable 5.04% 915,000· 915,000 912.996 (2.004) -- 11/30/05 04/07/10 FFCB callable -- - 3.70% 950;943 1,000,000 956.250 5.307 11121/05 07/12/10 FHLMC - 4.13% 976.029 1,000.000 972.190 (3,839) 12/15/05 12/15/10 FHLMC callable "--.-- 5.04% 1.000,000 1,000,000 999,230 (770) - 24,296,97g .- 24,362,249 24,013,949 (283,029) ~- -~. -- US GOVERNMENT SECURIT1EŠ 03/31/05 08/31/06 US Treasury Note - 2.38% 982,812 1,000,000 . 987,460 4,648 . 982,812 - 1,000,000 987,460 4,648 f--- m. --- tTorãl Manage 1 Portfolio 44,"'1,619 ....,JIU,...1ð 44,361,,,, p''"''''.'- Average Yield¡ -- - 3.65% Average Length to Maturitÿ (in years) - 1.31 -- - TRUSt & AGENCY PORTFOLIO - ..-- - CERTIFICATES OF DEPOSIT: --- 07/27/01 O1l311061Cupertino Nat1(KesterTrust) 2.93% 42,911 42,911 42,911 0 --- I Total Trust & Agency Portfolio ",,9Il ",,9Il 4T,' )} 0 - -- BOND RESERVE PORTFOLIO -..- Bond Reserve Acct #078791 Wells Fargo Treasury Plus Money Mkt 3.45% 11,166 11,166 11,166 0 Bond Reserve Acét #078793 Ambac Assurance Security Bond I - 1 1 Bond Payment Acct #078794 Wêlls Fargo Treasury Plus Money Mkt 3.45% T2,760 12,760 12,760 0 Total Bond Reserve Portfoli Z3,926 23,926 Z3,926 0 - - -. --- -- .- --- -- -- -- - - - ---- 4 - '1 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 1/05 2105 Agency Notes 54% Investments by Type Managed Portfolio US Treasuries 2% C.'" 3% Rate of Return Comparison 3IOS 5/05 7/05 9/05 10/05 11105 12/05 1106 4/05 6/OS 8105 I:::~rtinol L!-5 COMPLIANCE WITH INVESTMENT POLICY - ._-_.-.---._'---.---'~'-----'._- City of Cupertino January 3!, 2006 Category Standard Comment _.- - - -- m Treasury Issues No limit Complies ..-.- -- US Agencies (eg FHLMC) No limit Complies Medium Tenn Corporate Bonds/Notes 30% with A rating Complies _...._-~ .-- _.__.~-,,---_._._-~.._--~- LAIF $40 million Complies .--- -- Money Market Funds 20% Complies Maximum Maturities Up to 5 years Complies -- -------- - Per Issuer Max 10% (except LAIF) Complies _'-0_' Bankers Acceptances 180 days & 40% Complies Commercial Paper 270 days & 25% Complies Negotiable Certificates of Deposit 30% Complies Repurchase Agreements 365 days Complies --_.~--- Reverse Repurchase agreements Prohibited Complies 4-(,0 ð. ~ ê E .:. .:. ." .§ .§ ~ '" .5 ~ ~ ~ <B <B 1;; " j " '" ~ ~ ~ ~ ;j 'C ~ " ~ . .5 " " " "3 " ~ .5 » g. > ". 5 ø ø .5 " ø ... 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"- ø ,§ ..<: Õ ~ ,...¡ u ..: u 0.. ~ ~ .., ... ;J ~ u ¡¡: '" 0 ... ... 4-7 Revenue Comparison 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2 3 4 6 7 10 11 12 9 Expenditure Comparison 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2 3 4 5 6 7 1 Sales Tax 2 Property Tax 3 Transcient Occupancy 4 Utility Tax 5 FranchîseFecs 6 Other Taxes 7 Ucenses & Permits 8 Use of Money & Prop",>, 9 Intergovernmental 10 Charges for Scrvices 11 Fines & Forfcitures 12 Other Revenue 13 Sale of Property 13 1 Administrative 2 Law Enforcement 3 Community Service 4 Administrative Service 5 Recreation Service 6 Community Development 7 Public Works 1~t Sales Tax Fiscal Year-To-Date 2005-06 ~ $7,000 ! $6,000 . ~ $5,000 . · I $4.000 $3.000 > $2.000 $1.000 $0 7/05 8/05 --+ Projected ____Actual 9105 10/05 11/05 12/05 1/06 Month Property Tax Fiscal Voar-Ta-Dale 2005-06 $3,000 $2,500 · $2,000 -. Projected ! _____Actual q $1.500 · ~ · ~ $1.000 $500 - $0 9/05 10/05 11/05 12/05 1/06 Mnnth Transient Occupancy Tax Fiscal Year~To-Date 2005006 ~ $1.200 j $1,000 $800 . . î $600 $400 $200 $0 7105 .K" .... .... ...."" --+ Projected ___Actual 8105 9/05 10/05 11/05 12/05 1/06 Month 4- q i $4.000 i · $3,000 . ~ $2.000 , : > $1,000 $0 Planning, Building & Engineering Fees Fiscal Year-fo-Date 2005-06 ...... Projected ~Actuaf .... -- -...... ......- 7/05 8/05 9/05 - ....- - - --.... -........ ........- 10/05 11105 12/05 1106 Month General Fund Expenditures Fiscal Year-to-Date 2005-06 · $20,000 " c · ! 0 ~ $15,000 >- ~ S . ~ $10.000 'i: ~ $5,000 $0 7/05 8/05 9/05 ....., 10/05 11/05 Month - .... ..... ..." 12/05 1/06 4~IÒ