HomeMy WebLinkAbout0173.092-
M.rch 5, 1991
THE HONOAABLE CITY COUNCIL
PalQ Alto, California
IflVESTMENT ACTlYITY,..R,PORT fOR JA~UARY 1992
Membe~s of t~e Council:
This ;s an inf{lrmatlQr-al report and no Council action 'is necessary.
INT~R~ST INCOME
lnterest income on an accrOJal basis for the month of January was S865.069 and for
the first seven months of 1991-92 totalled $6.0 million, 61 percent of the annual
target of $9.8 minion. On a cash basls, receipts totalled $1,147,351 for
January and 56.6 million year to date.
Staff has changed the calculetion of interest income ~n the report from cash
ba.iis to accrua.l basis. This is to reflect earnings closer to the financial
reports. Having month-to-month accruals will avoid "a\llng djstorted earnings
~hen large interest payments ~re received e~rly in t~e fis~al year.
CURREbl PORTfOlIO
Tile par value of the City's portfoliO ;s approximately Sl4Q million, which
conSists of $99.0 million, or 7J percent, maturing wtthir. two years. Most of the
investments, Sl12.2 million, or 81 percent. are in United States Government
Securities. The cu~rent market value of the portfolio is 102.0 percent of cost.
In the montn of January, staff purc.hased a total of 522 minion of securities:
$5 million in two Bankers Acceptances yielding 4 percent, and $17 million in
United States Governme~t Securlties yielding from 5.3 to 5.5 percent.
CMR,173:S2
L
f
!
'-
1~IERESLMill
Staff has added a section on current inter~~t rates at the end of the report.
This information can be used to better understarld the current purchases as well
1I.S the o .... erall partfal ie. For example, 43 percent of the pertfo'10 is in United
States ireasliry Notes. w1th interest rates significantly abo.,s the current rate~.
T~is is why there is a $1.3 mil1jo~ unreal izpd gain on U.S. Treasuries a~d a
major factor in the 52.8 millilJ'1 unrealize-d ga:n on the ~'nole portfolio. As
shown on the fonowing chart, the dramatic {jrop in interest rat€s durir19 tne last
three years is sio-wly redUCing the overan yield on the (ity Portfolio.
CP.A, PQR"!-FOLIO/lJS TRU,sU=;''(
"[
:l
.....------------------...... -"~ .-~
.~
:t
J ,L,
COMPLLoINCE WITH INVESTMENT POLICY
'~
"" ,
C.",. 9',
As of Ja.nuary 31, 1992, t"e iilvestment portfolio was in c(lrr:p'ia~ce 'With all
elements of the City's investment polie.;.', In February 1992, projections
indicated recelpts 'Would be S18.3 millIon; expenditures would b~ S15.0 million;
ar.d $20.0 mlllion in lr'lVestments .,,'ould mature. On the basis of the abO\,le
projection, th€re were sufficient f~nds to meet Palo Alto's expenditure
requirements for tne month of february. BOised upon the cash flow projections
prepared by Tredsury staff for fiscal year 1991~92, there were sufficient fl.!nds
from revenues and maturing investments to meet all expe~djture requireme~ts for
the remainder of the fiscal year.
Respectfully submitted,
-l. ') ,.' 'X _t,_ r '·")1'
LALO PEREZ
Financial Analyst
C~~:17l:92
[M!L I HARRISON
Finance Director
~~\lH~, ~U~~~~~I~~. ,,('
ASslstant City Manager
r ..
..... )ri'".-,,,-.. .... _. ____ ~_. er
'\ --.. r--I
Pag' 1 of 5
REPORT OF IH~ESTMEHTS
JANUMY 31, 1992
Par Amount 0.1/31/92 1991·92 12/31/91
(In ~ ~il1io"sl ---'-"L. largoet -.-Jll-
BY MATURITY
Within I month S 19.95 14 .3 > S~ 22.4
1·3 months !3.DO 9.3 8.1
3-5 months 13. CO 9.3 9.8
6-9 months 4.0.0. 1.8 4.5
9·11 months 7.0.0. 5.0 3.8
1-2 years it·.O~ 30. ] -1L..§
lrIithin 2 years 98.99 70.8 > $35 ~O.l
2-5 years 38.50 17.5 15.8
5-10 years .BC .6 1.5
10-20 years .65 .5 .9
20.·30 years -..2Jl --.~ ~
Over 2 years 4D.ll 29.2 19.8
TOIAL 139.72 100..0% 10.0% 10.0.0%
BY TYPE Of INVESTMtl!!
l.,c.1 Agenc~ lnvoestm~nt fund 15.00 10.7 11.~
Mutual Fund .10. . I 1.7
Certificates of Oeposit:
Col1ateraliLed' 4.0.0. 2.9 7.9
Bankers Acceptances 7. 75 5.5 2. I
City of Pal, Alto Bonds .0.4 . I .1
~.S. Treasury 59.50 41.6 45.6
1l.S. Agency ~3.13 J.L! ...ll...!
TOTAL 139.72 10.0..0.% lOO'~ 10.0.0%
Market Value/Cost Sl43.1/14D.3 lDl.O% > 95% 10.2.7%
CMR:P3:92
i
--~ ........ ) 'WIllI:
SOURCE
TfW[STM(NTS
1nterest
__ .. Ba~
REPORT OF INVESTMENTS
JANUARV 31, 1992
MatlJl'i ty
J8ll
Par
WJle
Mitrket
~
, __ ._~_~ _____ c-l.. _________ _
lIn rea 1 i led
Ga i n (LQss)
Pt.J"'(".nas~
Pric-.e
~aJance
15,000,000
100,000
19JhQQQ
200,000
2,000,000
..L.~QQQ
4,000,000
2, 719 ,490
1,960,836
<---~~
7,554,124
38,000
Page 2 of 5
ACCfU1tl
Basis
illnings
75,OOc()
J,925
333
4,258
9,9Q3
~.l~l
18,084
0
ll,532
5,111
7.829
24,472
347
I .'\~~~}:'
I
•
I r :
"'
'~-----' j '"
REPORT OF INVESTMENTS
rag. 3 of 5
~' JANUARY 31, 1992
Purchase Accrual
lnterest Maturity Par Market Unreal ized Pl"ice Basis SOUm ~te Dat~ ~ Yill!L QilLlliill ll.iJlaNJL ,Earnjngs
~, froos"ry (42.5'1%)
\ .
lreasury Not@s B.50 02-29-92 2,000,000 2,002,813 2,007,813 14,167
Treasury Notes 6.50 03-31-92 4,000,000 3,9B6,906 3,988,906 2B,333
Trea~ury Notes B.3B 06-30-92 7,000,000 7,014,453 7,014,453 48,854(,)
Tr'easury Notes H.ZS 08-15-92 3,000,000 2,977,031 2,917,031 20,625
Treasury Notes B.3B 11-15-92 2,000,000 2,009,375 2,009,375 13,95B
Treasury Notes B.75 Ol~IS-,93 2,000,000 2.010,000 2,010,000 14,5B3
Tr~asury Notes B.25 02-15-93 4,500,000 4,669,000 159,625 4,509,375 30,938
Treasury Notes 8.13 06-30-93 3,000,000 3,134,000 118,062 3,015,938 20,313
Tr{)asury Notes 8,00 OB-15-93 1,000,000 7,317,000 328,B75 6,980,125 46,667
Treasury Notes 8.21 09-30-93 4,000,000 4,206,000 170,062 4,035,93B 21,500
Treasury Notes 7.75 11-15-93 B,OOO,OOO 8,35B,000 216,431 8,OBI,563 51,6<;7
Treasury Notes 7.63 12-31-93 2,000,000 2,090,000 73,125 2,016,875 12,708
Treasury Notes 7.00 05-15-94 6,OUO,OOO 6,212,000 140,125 6,011,875 35,000
Treasury Notes 6,00 11-15-94 ~Ql1Q 5.056,QQQ _...1...lli .2..Q~
59,500,000 61,04' 578
!W.. AGEN~.IO%l
1.270,748 59,773,830 365,313
FHlB 8.65 03-25-92 2,000,000 2,000,000 2,000,000 14,75i\ ) FNMA 8.45 05-11-92 2,000,000 Z,OOO,OOO 2,000,000 14,083 fNHA 8.45 01-10-92 2,000,000 2,000,000 2,000,000 14,083 FHLB B.60 08·25-n 1,000,000 1,000,000 1,000,000 7,167 FHLB 9.05 12-28-92 3,000,000 3,015,000 3,015,000 22,625 FNMA 7.95 02-10-93 2,000,000 ~.O64.000 64,000 2,000,000 13,250
SLMA 10.50 04-2Z-93 1,000,000 1,067,000 67,000 1,000,000 8,750 FNMA 10.15 05-10-93 1,000,000 1,013,000 142,063 930,937 8,95B j FHlB ]0.75 05-25 .. 93 1,000,000 1,074,000 75,875 99B,125 8,958 FHLB 7.75 01-26-93 1,000,000 1,042,000 43,250 998,750 6,458
FHlB 1.45 08-25-93 2,000,000 2,066,000 66,000 2,000,000 12:.417
I
CMR:113:92 ,
, .
. ~ ~r--.-... '-~ .. ~,.-.. ---~,-----,~-----'-(~"~T,
., ,_,.fl::'
-\~-:1_1,
"
-'~ .!l-1 -r _ .. &it ______ ~ .-. ... t.
"-"~~~" ,,-----,--~~---,-'"-----~ , ._. ----~--.
l~
-.,,-~.:,,~~, . , Page 4 of 5
REPO~T OF INVESTMENTS
JANlIAkY 31, )992
Purchase Accrua.l
Inter~st Matur; ty Par Market Unreal il~d Price Basis
SQURCE --Rili Dlli_ ~l\l£ .l:lli!L ~a;n (L2ru, fuili.iK<L [arninQs
~~ (Continued)
.' FHLB 7.95 09·27·93 1,000,000 1,040,000 ,18,125 991,B75 6,625
FHLB 12.15 12-27-93 2,500,000 2,BOO,OOO 362,500 2,437,500 25,313
FHLB 7.S5 01-25·94 2,000,000 2 ,ono ,DOD 76.875 2,003,125 12,583
fHIB 7.50 06·£7-94 5,000,000 5,225,000 137,Bl1 5,087,188 31.2~0
FN~A 7.45 07 -11-94 3,000,000 3.128,000 91,203 3,036,797 18.62!i
FHLB 6.70 OB-25·94 8,000,000 8.190,000 (56,250) 8,246,250 13,400
FHlB 6.58 09·26·94 4,000,000 4,091,000 (13 ,68B) 4,104,688 5,lI~O FHLB (a) 7.95 11·16·95 3,000.000 3,128,000 118,000 3,000,000 19,87 '
FNMA (b) 7.70 02·12-96 2,000,000 1.073,000 75,500 1,997,500 11.833
FNMA 7.60 01-10-97 2,000,000 2,076,000 73,187 2,001,813 12,667
FL8 7.35 01-10·97 500,000 514,000 14,000 500,000 3,063
fNMA (e) 7.40 10-01-97 400,000 415,000 53,125 361,B75 2,4G7
FVA (d) 7.35 04-01·9B 400,000 415,000 15.000 400,000 2.450
FHLMC (Pol) 10.00 02-01-09 420.B54 452,000 47.551 404.449 3.550
FHLMC (P&I Semi·Annually) 11.45 09-15·09 227 .000 263.000 17,375 145,625 2,355
GNMA (P&I) 0.00 11·15-16 _.l~ BIB,OQQ _.1...1l~ --.ill....lli ~5..N.Q
53.130,516 55,109,000 1,531,921 53.576,078 309,5',3
Ma.ture~1 iu!d Sold Investments
Sumitomo Bank (Collateral) 5.60 01-27·91 18,900
Sumitomo Bank (Collateral) 4.75 01·18·92 7.389
Treasury Notes 8.13 01·.11·92 40,625i, )
FNHA (0) 8.20 07-10·2002 1,139
TOTAL INVESTMENTS POOh) $139,718,516 $143,055.702 $2,B03.670 $140,252.032 $865,068
(Pt.I) Principal and Interest payments monthly. ]nvestnr~nts wHh maturities of le!;s than one year are valued at cost,
Purchases since last report are shown in bold type.
\ .,
(a) fHLB has a tallable option. beginning On 12·27·93.
(b) FNMA has a callable option, beginning on 01·12-94,
(c) FNMA has it callable option every interest payment due d~te (Apr., Oct,).
J
(d) TVA has a callable option ~yery intere$t payment due date (Apr., Oct.).
(e~ FNMA had its callable opt'ion exercised and paid off on 01-10-92.
CMR:J73:91 "".
•
, ,
."
~
INTEREST INCOME (~CCRU~L BASIS)
JANU~RY lI. 1992
To Oat~ __ 0 r I<. ] 990·9] To Dilte
Un\~ (~asis) 199Ul
Interest Income $ 5,032,007 5,955,308
Effective Annual
Rate of Return
On lnvestme:'1ts " 8,76 8,00
.l,nU!.rest Rates as of Jar1'JarY ~J~
Prime Rate:
3-manth Treasury Bill:
3-month Bankers ~cceptance:
3-month Certificates of Deposit:
Z-year Treasur1 ~cte:
l-year Agency:
CMR:173:91
5,5%
3.8%
3,9%
3.7%
5,4%
5.5%
Increase
(Decrease)
1991·92_
(56,699)
(,76)
•
Page 5 of 5
~ Of
Target
'Target To Oat.
9,800,000 60.87
B.20 97,55