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Apr; 1 23, 1992
TKE HONORABLE CiTY COUNCIL
Pale Alta, Caiifcrnia
IHVESTn£HI ACTIVITY REPORT FOR MARCH 1992
Members of the Council:
This is an informaticnai report and no Council action is ne:':essary.
INTEREST I!!COl!E
Interest in
tne first nj
target of $9
and $8.2 mill
on an accrual basis for the month of March was S856,771 and for
·t~s of 1991-92 totalled S7.7 million, 78 percent ~f the annual
lion. On, cash baSis, receipts totalled 5650,917 for March
ear to date.
Stiff has prepared a graph that s~ows the balance ~istory of t~e portfoliQ since
]987, in a cash basis format. The graph shows a steady growth, mainly dl.ie to the
buildup of uti lit,}' reserves to cover the Cal a""eras Project debt service which
begins this fi(:~l year.
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CMR:126:92
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[NiESEU BATts
1n March, staff invested 54 million in Certificat!s of Deposit and a C~mmercial
Paper Note. at averag~ rites of just over 4.25 percent. Staff also invest~1 $4
millir;n in a tnree-y.e3r U~ S. Agency Nate , at a return of S.30 percent. Interest
rates increased $1 ig1',tly during "'arch~ Staff investe.j both il'7 the short-term and
long-term ranges to take Gdvantage of the 1ncreas!.
tURRfNI PORTfOllQ
TMe par ya1u~ of the Cjty~s portfolio is approximately Sl4Z IfIt1l1on, wh1ch
consists of $97 mill'on, or 69 percent. matlJ:"ing within two years. Most of the
in'llestments, SlOe mill ion, or 75 percent, tre in united States Government
~ecurities. The current market value af the portfoliO is 101.4 p~rcent of cost.
J4PANESE SUBSIDIARIES INVESTMENTS
Recently. there haYe beet' several articles regarding Japan's eC\Jnomic prohlems:
Tnere ;s some concern in the finanCial markets with regdro to tMe nealth of some
of the Japoiinese finanelil institutions. SlJme of the Japanese banks have had t.o
increase t~eir capital to cover bad loans and other ratios. The: Clty has a
limited exposure to Japanese instr1Jments ($1:1.15 million). Staff has been
mMitoring those Japanese banks with which th'9' City Mas investments and feel s
Hat tne Japanese subsidiaries currently being used arf! in soul'ld fl;",anclal
status. Staff will continue to monitor tne Japanese banks closely.
COIIPLlAHCE WIT!! INV£STMEIIT POLICY
As of March 31, 1992, the investment portfolio was in cnmpliance with al1
elements of the City's 1nvestl'lEnt policy. In April 1992, projections indicated
receipts ~ould be $16.7 million; e~rend;tures would be $14.9 million; and 124.2
milHon in in'¥estments would matur~. On the basis of the above projection. U~ere
were sufficient funds to meet Palo Alto's expenditure reqUirements for the mcntM
of April. Based upon the cash flow prOjections prepared by Treasury staff for
fiscal year 19~1-92. there are suffiCient Funds from revenues and mi:lturing
investments to meet all expenditure reqUirements for the remainder of the fiscal
year.
--C~ C __ i) ~ __ .. _ ... .e=r'
EMILI HARRISON
Finance Director
CHR:226:92
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Page I of 6
REPORT OF iNVESTMENTS
MARCH 31. 1992
Par Amount 01(l1/92 1991·92 02/29(92
(In S Mill i.Qlll !~} Target _.00-
~y IlATURII'l
With in 1 monU, S 24.20 17 .08 > H 16.37
1-3 months 14. i 5 9.90 llAO
3-6 months 7.00 4.94 9,17
6·9 months S.OO 5,56 1.41
9-12 months 8,50 6.00 8.ll
I~2 years 35.54 25.08 25.08
Within 2 years 97.39 68.74 > S35 71. 54
2-5 years 42.50 30.00 27.11
5-10 years .40 .28 .28
ID-Za years .63 .44 .45
20-30 years .~ ~ . ..d2
Over 2 years 44.29 31.26 28,46
TOTAL HI.68 ICC.O% 100% ICO.O%
IY TYPE Of IHVilllIDlI
local Agency In'Jestment fund 15.00 10.59 IC.59
Mutual fund .2C .14 .14
C~rtificates of Deposit:
Call aterallzed 9.00 6.35 4.23
Bankers Acceptances 8.15 5.75 5.75
(.Ol!ITIercial Paper 1.00 .71
City of Palo Alto Bonds .C4 ,03 • OJ
U.S. Treasury 53.50 37.75 41. 99
U.S. Agency 54.79 ~ .37.27
TOT.~L 141. 68 100.0% 100% 100.0%
~arket Value/Cost $144. 2ja'.2 lel.4% > 95% 101.6%
CMR:225:92
I
~ INV[STMENTS
REPORT OF IHYEST"ENTS
MARCH 31, 1992
Interest Maturity
R.te -..l!i1L..
Par
~
Market
~
Unrealized
WJUL!!.u)
u,:_ ~_:!"~:,~~.-'_-._~';r •. ~",>, hf!+,Pitfi.5j1\, t j
PUrChol$e
Price
a.ililli.
Page 2 of 6
Acc,.\~a 1
0., is
Earnings j.
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Page J of 6
REPORT OF IHVESTltENTS
MARCH 31, 1992
Purchase A~crual
Interest Maturity Par Market Unrealiled Price Basis
~ BMe DAte ~ klYJL G.ln {LUll Bi]!!IJ~~ .lmtllm
Co!!l!ltrelal Pa.!!er (Q,7I%1 'r ~,
General Electric 4.25 09-25-92 1,000,000 978,986 978,986 a
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Palo Alto ImDrQyement~s <,93%) ,
SE!l"ies P 10.95 07-02-93 38,000 38,000 38,000 3~1 I ,
U.S. Tr •• surLl~LJ6~)
,
I Treasury Notes 8,38 06-30-92 7,000,000 7,014,453 7,014,453 48,854
Treasury Notes 8.25 08·15·92 3,000,000 2,977,031 2,977,031 20,625
Treasury Notes 8.38 11·15'92 2,000,000 2,009,375 2,009,375 13,958
Treasury Notes 8.75 01·15-93 2,000,000 2,010,000 2,0)0,000 )4,583
Treasury Notes 8.25 02-15-93 4,500,000 4,509,375 4,509,375 30,938
Treasury Notes 8,13 06-30-93 3,000,000 3,114,000 98,062 3,015,938 20,313
lreasury Notes B.OO 08·1~·93 7,OeO,Ooo 7,267,000 278,875 6,988,125 46,667
Treasury Note .. 8.25 09-30-93 4,000,000 4,176,000 140,062 4,035,936 27,500 '. \
Treasury Notes 7.75 11-15·93 3,000,000 8,298,000 216,437 8,OBI,563 51,667
TrE!ilsury Notes 7.63 12-31·93 2,000,000 2,074,000 57,125 2,0]6,875 12,70B
Treasury Notes 7.00 OS·15·~4 6,000,000 6,158,000 86,125 6,071,875 ,5,000
Trea!.ury Notes 6.00 !l-IS-94 ..l...~ i..lli..!!l!l' ~m ~,Q~1. ~§;! lS..QQQ
53,500,000 54,621,234 839,123 53,782,111 347,813
CMR:226:92
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REPORT OF INVESTMENTS
Page 4 of 6
MARCH 31, 1992
Purchase ACCI"OiJ 1 I ;:, Interest M.turity p" Market Unrealized Price Bash ' .
NV.!lU Bal~ Il~t!: YiliI.g 'lillIlL ~ (Lm) l!llinl;.L Earnings l' ,
, ,")
U,S. AGE"C~~
FNHA 8,45 05-II-n 2,000,000 2,000,000 2,000,000 14,~83 , FNHA 8.45 01-10-92 2,000,000 2,000,000 2,000,000 14,08~O fHlB 8,60 08-25-92 1,000,000 1,000,000 1,000,000 7,16 ..
FHl8 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 2,000,000 2,000,000 13,250
i SlMA 10.50 04·n,93 1,000,000 1,059,000 59,000 1,000,000 8,750
I fNMA 10,75 05-10-93 1,000,000 1,064,000 133,063 930,937 8,958
i fHlB 10.75 05-25·93 1,000,000 1,063,UOO 64.H.'S 998,125 ~,958
FHl8 7.75 07·26·93 1,000,000 1,034,000 35.250 998,750 6,458
FHlB 7.45 08·25-93 2,000,UOO 2,058,000 58,00.) 2,000,000 12,4!7
1 fHlB 7,95 u9-27-93 1,000,000 1,037,000 45,125 991,875 6,625 , FHLB 12.15 IZ-27 -93 2,500,000 Z,770,000 332,50C Z,437,500 25,313
" f FHl8 7.SS 01·Z5-94 2,000,000 2,066,000 67.,815 2,003,125 12,583
FHtB 1.50 06·27-94 5,000,000 5,118,000 90,812 5,081,188 31,2~O
FNMA 7.45 07·11-94 3,000,000 3,102,000 65,203 3,036,791 18,625
FHl8 6,70 08-Z5-94 8,000,000 8,118,000 (128,250) 8,246,250 44,667 ,
,I FHlB 6.58 09·26·94 4,000,000 4,043,000 (61,688) 4,104,68R 21,933 'I FHlB 6,45 03-Zl-95 4,000,000 4,029,000 14,000 4,O15~OOO 0 I, FHlB (a) 7.95 12-Z6·95 3,000,000 3,128,000 128,000 3,000,000 19,87~O \ FNMA (b) 7.70 02-12-96 2,000,000 2,053,000 55,500 1,997,500 12,833 ,;~
FNMA 7.60 01-10-97 l,OOO,OOO 2,044,000 41,187 2,O02,8!) 12,667
flB 7,3~ 01-20-97 500,000 506,000 6,000 500,000 3,063
FNMA (oj 1.40 10·01·97 400,000 405,000 43,125 361,875 2,467
FHLHC (P&I) 10.00 02-01-09 407,304 437,000 46,1Q2 390,898 3,400
FHLMC (P&I Somi-Annually) )2.45 09-15-09 227,000 265,000 19,375 245,625 2,355
GNMA (P&l) 9.00 11-15--16 l~Q,Oll _.1~lkQ2,Q _.ill§) 12Q,926 ....2.....l22
{ 54,794,381 56,264,000 1,109,058 55,154,942 340,105 1;'
CMR:l26:92
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Matured and Sold InvesjJ[~
Treasury Hot.s (d)
FHlB
Treasury Notes
lOlAl IHV[ST~ENTS
REPORT OF INVEST"ENT5
"ARCH 31, 1992
Int~rest Maturity Par
WYJ1 Rate Date,
8.50
B.B5
B.SO
02-29-92
03-25-92
03-31·n ___ _
Market.
.'lillL
Unreal1zed
'ill1Lll.!llil
(100%) S141,682,381 $144,160,985 SI,946,IBI
Purchase
Prite
WiIllQ.
$14~,212,B04
Page 5 of 6
Accrua 1
Bash
~
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12,292
J(h,'!.3J
$856,771
(P&l)
(a)
(b)
(c)
(d)
Principal and Interest payments monthly. Investments with maturities of -less than one year u(' valued o1.t cost. P~rchases since last report are shown in bold type.
FHlB has. callable optl.n, beginning on 12-27-93.
FNMA has a callahlE option. beginn1ng on 01-12.94.
FNMA has a call abl e opt ion ever)' lflterest payment due date (Apr .• Oct.).
Treasury Note matured On a weekend. funds received on 03-02-92.
CMR;226:92
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INTtREST INC~E (ACCRUAL BASIS)
HARCH 31, 19n
To Oat.
Work 1990-91
Unit (Cas" Sasis)
Interest Income $ 7,442,306
Effec.tiovE Jl.nr\'Jal
Rate of Return
01\ Investments % 8.65
Interest Rates is of March 31. 1992
Prime Rate:
3-month Treasury Bill:
3-month Bankers Acceptance:
3-~nth Certificates of Deposit:
2-yeir Treasury Holt:
Z -yen "90nty:
CMR:216:92
'.
To Oat.
1991-92
7,690,701
7.7S
6.50\
4.08%
4.07l1
3.14l1
5.50%
Increas.e
(Oecrea,e)
1991-92
(248,396)
(.81)
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Pag. 6 of 6
,. Of
Target
Target T. O.te
9,800,000 78.48
8.20 94.88
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