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January 14, lii3
T.[ KOKORABL[ CITI COUNCIL
Palo Alto t California
IHYESIftENT ACTIVITY REpoRT FOR DECEMBER 1992
Members of the Counc11~
This is ari informational report and "0 Council action is necessary_
INTEREST INCO!E
Interest income on an accrual basis for the month of December was S862,062 and
f{lr the first six months (If 1992-93 totaled 55.2 million, 45 percent Cif the
inn~al target of $9.65 million. On a cash basis, receipts totalied $940,183 for
December. and 55.1 million year to date. The effective annual rate of return on
accrual baSis is 6.75 percent for the current fiscal year.
CURRENT PORTFOLIO
The par yal~e of the City's portfolio is $159 m111ion, which consist$ of S121
million, or 76 percent, maturing within two years. Most of the investn1t:'nts, SI14
mil1;D~, ~r 72 percent, are in United States Government Securities. The current
mar~et v~1ue of the portfo1io is 100.9 percent of Lost. The ave~a~~ life of the
portfolio is 1.9 yea~s~
Tn December, staff invested $5 million in short-term Certiflcates of Deposit, at
an av~rage return of 3.70 percent and S3 ml11ion in medium-term U. S. Treasury
Notes, at a return of 5.04 percent.
Most of the movements in the financial markets are attributed to 5peculation and
published economic fDrecasts, which are projections of where the I!conomy is going
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based on a combination of cUrr"ent financial information and tne conf'fdence people
ha.ve in the ec~noll1.)1. The fonowing gl'apn refie:cls th~ co~sumer c0;'1fitienc2 le'lltl
frOtD January 1990 to December 1992. The consumer (onf; dence 1 evll!i is an
indication of how pe~ple in the U. S. feel about the economy_ The i8.6 1e~e' in
December Is the highest meaSiJre in over a Yfa.r a.nd a ha.lf. Historically. the
higher the level, the mOt"e consumers spel1d. So, an increasing nlimber ind;cates
that peoplt beHeve th.e naticI!1a.l eC'lf'\Omic re.covery lIIn 1 last and wil' most 1 i K<ely
be willing to make rew purchases, thus helping the economy grow.
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COMPLIAHCE WITH IKVESTMENT POLICY
As of DEcember 31, 1992, the investment plJrtfolio was in compl';il.nce with all
element$ of the City's investment polity. In Ja-nuary 1993, prDjectiofis indicated
receipts would b~ S16.J million; expenditures would be $13.5 million and $23.2
minion in investments )IIould mature. On th~ basis of the above projection, there
are suffititnt funds to meet PaTo Alto's expendit~re requirements for the month
of January. Eased upon the cash flow projections prepared by Treasury staff for
fiscal year 1992-93, there are ~~fficient funds from tne revenues and maturing
investments to meet all expenditure requirements for the remai noer of the fi seal
year.
~.u.foul-4..!s u bm ; tt ed,
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'£Ii) L YKARRISON
Finance Director
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JUNE FLEM I NG
City Manager
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: Page I of 6
REPORT OF IHVESTHENTS
;.' DEC~BER 31, 1992
Par Amount 11/31/92 1992-93 1l/30/91
(lrl I ~nl i~msl (~l I.!rStl.. I%l IV NATURITY
WHhln I :ncnth S 13,10 14,60 >H 13,51
" 1-3 months 10,50 1/,90 10,51
3-6 !IIOnths 13,00 8,le 10.e3
6,9 "",nths le.02 II. 34 10.21
9-12 months 12,50 7,86 e,28
1-2 years 33,00 20,76 ~
Within 2. years 1/0,22 75,63 > S50 ?7,12
2 -S years 37.50 13.59 21.98
5-10 years ,00 ,00 .00
10-10 years .52 ,33 ,34
20-30 year, -...l1 ~ -&
Over 2 years 3e -13 24.37 22.78
TOTAL 158,95 100,0% 100% 100,0%
IJ TYPE OF I!!nSnmJI
local Agency [nve5tment Fund 15,00 9,44 9.56
Hutual Fund ,20 ,13 < 15,;, .n Certificates of Deposit:
Collat'!ral;zed 21.00 13,21 12,10
B~nkers Acceptances 6,00 3.77 < 30% 3.31 Conmerc1al Paper 3,00 !. 89 < j5% 1. 91 City of Palo Alto Sonds ,02 ,01 ,01 U,S, Treasury 51.50 32,40 30.90
U,S, Agen<y &n ~ _ 41.57
TOTAL 158.95 100.0% 100% 100,0%
Market ~al"e/Cost S161, 1(159,7 100.9% > 95% 100.9%
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Page 2 of 6
REPORT OF INVESTMENTS
DECEHBER 31, 1992
Purr.h.se A..:.cru .. l
Interest Maturfty Pal" Market Unrpal ized Price Bash
~!ffi&.E Bat~ ~-kw ffitm G~Jo !L2U) Balance Earnino,
INVESTMENTS
~Q,a1 Age~~~ ID~I~tDO~D~ Ig,§~~l
LAIf 4.65 01-01-93 15,000,00 15,000,000 15,000,000 60,001()
,/ ~lJEynd IO,!3%) i, " ..
Fidelity Investments l,97 01-01-93 lOO,OOO 100,000 100,000 241
Frank-j in Investments 3. II 01-01-93 l22....QQQ W..QQ!! lQQ....Q2Q ......ill [ ~,>
200,000 200,000
~er~ffi~.t.~ Q! ~e~Qsft !1~,ZI~1
200,000 509
Sumitomo Bank (Co11.tera) 4.30 01-06-93 Z,OOC,OO~ 2,000,000 2,000,000 7,406
Fidelity Federal (Coll.tera1) 4.00 01-JI-93 2,000,000 2,000,000 l,OOO,OOO 6,889
Fidelity Feder.1 (COllateral) 4.00 01-20·93 2,000,000 2,000,000 2,000,000 6,889
Sumitomo Bank (Collateral) 3.90 02-25-93 2,000,000 2,000,000 2,000.000 6,500
Fidelity Feder.l (Coll.tera1) 4.50 03-03-93 3,000,000 3,000,000 3,000,000 11,625
Sumitomo Bank (Collateral) 4.05 04-07·93 2,000,000 2,000,000 2,000,000 6,975
Sumitomo Bank (Coll.teral) 3.40 04-26-93 3,000,000 3,000,000 3,000.000 567
Fidelity Federal (Coll.ter.l) 4.45 05-19-93 2,000,000 2,000,000 2,000,000 7,664' j
Fidelity Federal (Coll.tera) 3.BO 07-30-93 ~ ,QQQ .gQQ ..J....Q2Q,QQQ ~Q!l9--.QQQ ~Lm
21,000,000 21,000,000
&gmmer~1.1 Pa~ •• la) 11.§9%j
21,000,000 64,332
General Electric 3.35 02-19-93 2,000,000 1,966,872 1,966,872 5,769
Genera1 Electric 3.60 03-01-93 l,QQQ.QQQ 989,~QQ .....ill....!l2Q Ll2Q
3,000,000 2,956,672 2,956,672 8,869
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REPORT Of INVESTMENTS
Page 3 of 6
DECEMBER 31, 1992
Purchase Accrual
Inter@st Maturity Par Market Unrealized Pr1te Bas1s
m1ill -'k~ Dill 'iilMll W.\IL Ga1n (loss) 2illlt<:L .Eirnin9i
Bankers Acceptance Cal (3~
Sumi tome Bank 3.73 03-01-93 3,COO,OOO 2,968,600 2,968,606 9,63 fo Sanwa Bank 3.12 03-22-93 3,QQQ,QOO Z,9S7,360 ~~ 8,06
I " i 6,000,000 5,925,966 5,925,966 17 ,696 ;,; . ,
~~ID.J"DrOV_"t Bonds (,01%1
Series P 10.95 07-02-93 20,000 20,000 20,000 183
~r •• surY (32,40%1
Treasury Notes 8.75 01-15-93 2,000,000 2,010,000 2,010,000 9,636
Treolsury 8.25 02-15-93 4,500,000 4,509,375 4,509,375 30,938
Treasury Notes B,13 06-30-93 3,000,000 3,015,938 3,015.938 20,313
Treasury Notes 8,00 08-15-93 7,000,000 6,988,125 6,988,125 46,667
Treasury Notes 8,25 09-30-93 4.000,000 4,035,938 4,035,938 27 ,50~ ) Treasury Notes 7.75 11-15-93 8,000,000 8,OBl,563 8,081,563 51,66 '
Tr{!asury Notes 7.63 12-31-93 21000.00~ 2,016,875 2,016,875 12,708
Treasury Notes 7.00 05-15-94 6,000,000 6,229,000 157,125 6,071,875 35,000
Treasury Notes 6,00 11-15-94 5,000,000 5,136,000 64,437 5,051, 56'j 25,000
Treasury Notes 5,50 02-15-95 7,000,000 7,120,000 ~l 7,138,828 32,083
Treasury Notes 5,13 11-15-95 _Ml!2..JlQQ MQ6,Q<N ...hQf}[.,~ _...1..lli
51,500,000 52,148,814 222,1ll 51,226,643 297,740
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Page 4 of 6
REPORT OF INVESTMENTS
DECEMBER 31, lS92
Purchase Accrual
Interest Maturjty Par Market UnreaH,.d Price Basis
~ J.ill> Dite 'lilM Wla. ~~jD (LQUl kl.J!!~ Earn1nQs
U.S. AGENCY 139.1~
ftu-lA 7.95 02-10-93 2,000,000 2,000,000 2,000.000 13.250
SlMA 10.50 04-22-93 1,000,000 1,000.000 1,000,000 a,75~
fNHA 10.75 05·10-93 :,000,000 930,937 930,937 B,95
I I FHlB 10.75 05-25-93 1,000,000 998,125 998,125 8,958
I I FHl8 7.75 07-26-93 1,000,000 998,750 998,750 6,458 •
. , / FHlB 7.45 OB·25-93 1,000,000 2,OGO,OOO 2,000,000 lZ,417
FHLS 7.95 09-27-93 1,000,000 991,875 991,875 6,625
FHLB 12.15 12-27-93 2,500,000 2,437,500 2,437,500 25,313
FHLB 7.55 01-25-94 2,000,000 2,073,000 69,815 2,003,125 12,583
rHLB 1.50 06-2)-94 5,000,000 5,202,000 114,812 5,087,188 31,250
FNMA 7.45 07-1I·94 3,000,000 3,127,000 90,203 :,036.797 18,625
FHL8 6.70 08-25-94 8,000,000 8,250,000 11,750 8,246,250 44,667
FHLB 6.58 09-26-94 4,000,000 4, i33,OOO 28,312 4,104,688 21,933
FHLS 5.94 OZ-V-95 6,000,000 6,131,000 IlZ,87S 6,018, ns 29,700
FHlB US 03-27-95 8,000,000 8,260,000 195,000 8,065,000 43,000
FHl8 6.04 04-25-95 6,000,000 6,143,000 143,625 05,999,375 30,200
FHLB (b) 7.95 12-26-95 3,00Q,000 3,091,000 91,000 3,000,000 19,875
FHHA (e) 7.70 02-12-96 2,000,000 2,068,000 70,500 1, 997,500 12,633
FNMA 7.60 01-10·97 2,000,000 2,120,000 111,187 2,002,813 12,661~ )
fLB 7.35 01-20-97 500,000 523,000 23,000 500,000 3,063
fHLMC (P&l) 10.00 02-01·09 321,289 352,000 47,117 304,883 2,f.77
FHLMC (P&l S.m,-An,,\J.l1y) 12.45 09-15-09 203,000 237,000 15,375 221,625 2,106
GNMA (P&l) 9.00 11-15-16 708,89.1 755.Q2ll 15,m 739.7U --.5..lli
62,233,093 63,830,187 1,145,908 62,684,279 381,224
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SQliRtE
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FHLB
Sumitomo B.n~ (Collateral)
R£PORT Of IMVESiMEMTS
OEt£IIBEIt 31. 1992
Interest Maturity
Rat!; Pate
Pa,.
Wlllt
9,05 12-26-92
4.30 12-29-92
Mark.t
~
Unr.allzed
G.l" !loul
Purch ...
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Pag" S of 6
Accrual
8as~')
EUllings
21,IIlO'
10,392 .
TOTAL INV(STHfNTS(lOO%) SISB,951,Q93 $161,081,639 $1,368,079 $159,713,560 S802,062
(pal) ~rlncipal and Interest payments monthly. Investments with matu.·itt~s ~f less than on@ year are valued at CQst.
Purchases since last report are shown in bold typt.
(a) Percent figure repre,ents the discount rat •.
(n) fHlS has a callabl. option, beginning on 12-21-93.
(e) fNMA has a callable option. beginning on 02-12-94.
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IMTERE$l INCOME (ACCRUAL BASIS)
OEC""8ER 31. li92
To Cate
Work 1991-91 Tc Date
Unit (C.ash Basis) l..2Jl31
Interest Income S
Effective Annual
5. ~O9,736 5.H4.143
Rate of Return
On InvestJllllents " 8.00 6.75
Interest Rates as of December 31, 1992
Prime Rate:
3-~nth Tr~asury 8il1:
3-montn Bankers ~ccepta"ce:
3-mvnth C~rtia1 Paper:
3-month Certificates of OePOS1t:
2-ye~r Treasury Note:
2-1ear ~ge"cy:
Source: Wall Str.et Journal 1/4/93
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€.oC%
J.WI.
3.13%
3.4~"
3.35';
4 .67%
4.11%
Increase
(O«eo.,,)
19n-91_
(135.493)
(1.25)
F.ge 6 of 6
,; Of
Target
lA.!:!ID To Pate
9,646.000 53.63
6.0 111.50