HomeMy WebLinkAbout0427.092•
THE HONORABLE CITY COUNCIL
Pale Alto, California
IHYES~ENT ACTIVIIY REpoRT fOR AV6U~
Members of th~ Council!
T~is is an infJrmational report and no Council actiDn is necessary.
IhTEREST INC0!4E
Interest income on an accrual basis for the ~nth of August was S859,975 and for
the first two mont,s of 1992-93 tot,'e~ 51.7 million, IB percent of the annu.l
target of 59.65 million. On a cash basis, receipts tohlled $1,338,178 for
August, and 52.1 million y~ar to date.
CURRENT PORTFOLIO
The-par value of tne City's portfolio is approximateTy $153 million. which
consists of Sl08 million. or 71 percent, maturing within two years. Most of the
investltlents~ $116 million, Dr 76 percent, are in United States Government
Securities. The current market value of the portfolio is 102.0 percent of cost.
IhTEREST RATES ANO INV£STMOOS
rn August, staff invested $4 million in a U. S. Treasury Note, at a return of
4.53 percent and $5 mill icn in COlTInercial ?aper~ at i return of approximately 3.3
percent.
Interest rates have continued to decl ine due to the continuing recession. rn the
past tnree years~ tne fedenl Reser .... e has cut interest rates two dOle!'1 times in
its erfo.,.t to revive the economy. For Example, the federal funds rate is
currently 3 percent. down from 9.75 percent tnree years ago. According to the
Wall Street Journal, "By most measures, the recession that began in the summer
of 1990 seems to have ended in the spring of 1991. But since then, the reco .... ery
has been so weak that, to many. it seems lite a continuation of the recession+
To furtner ,llustrate the weak recovery, the follOWing graph reflects the growth
during tfle first 15 months after the start of a rec.overy. The recovery that
began in JlJly 1980 lasted only 12 months and thereforE is not ;no:1:.;Jed. The
figures for the latest recovery are through July 1992.
CHR:427:92
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so<,;~c~· W<,;1i Strf'et J"ur"'l'
~ ConSUme" Sp~"'d'n.. ~ Po)',.JrI Employment ~ Inti"'!ii';o' Produc(",
C~flIANCE WITH INVES~<HT POLICY
As of AUgU5t 31 t ]992, the investment portfol io was in camp' hl1ce with all
elements of the City's inves.tment pol icy. In September 1992~ prQjections
indicate rfr:eipts will be $16.0 million; expenjif-ures will be 517.2 million and
516.2 million in investments wilT mature. On the basis of the ibove projection,
there are sufficient funds to meet Pa10 Altars expendtture re~uirements for the
month of Septernbet'. Based upon the cash flow project; ans prepared by Treasury
staff for fiscal year 1992-93, there are sufficient funds from the revenues and
n:aturing investments to meet all expenditure requirements for the r€main<ler of
the fiscal year.
Respettfully submitted,
'~H~
kAlO PEREZ
Financial Analyst
CMR:417:92
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,( vifLL kLy ~A:RRISON
Finance Director
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Page I of 6
REPORT OF IHVESTMtHTS
AII6UST 31, 1~92
Par Amount 08/31/91 1992-93 07/31/92
On I Hill iom:) l%l Ta:cget {%l
U I!AT\Ji!ID
Within I ""nth $ 16.20 10.59 > $6 15.81
1-3 moeth. 4.00 2.61 .65
3-6 months 23.50 15.36 10_~6
6-9 months 10_00 6.53 8.17
9-12 ""nths 13.02 S.51 5.24
1-2 years !UQ 1L.l1. JL11.
Witl1in 2 years 108.12 70.72 > $50 68.10
2-5 years 43_50 28.43 31.04
5-10 years .00 .00 .00
10-20 years .59 .38 .39
20-30 yeaTS ---1l ~ --..!Z
Over 2 years 44.80 29.18 31. 90
TOTAL 153.02 100.0% 100% 100.01;
IY np,E OF INVESII!EHT
local Agency Invest-.nt Fund 15.00 9.S0 9.80
Mutual Fund _20 .13 ( 15% .J;
Certificates of Oeposit:
Collat.raHzed 16.00 10.46 10.46
Bankers Acceptanc~s .00 .00 < 301; 3.27
(OITIIercial Paper 6.00 3.92 < 15% .65
City of Palo ~.lto Bon·js .02 .01 .01
U.S. ;re.asury 50.50 33.00 32.35
U.S. Agency ft.]Q ll..M ...!U1
TOTAL 153.02 100.01; 1001; 100.01;
Market Valu./Cost $157.0/153.8 102.0% > 95% 102.1"
CMR:427:92
REPORT OF INVESTNENTS
Page 2 of 6
AUGUST ~I, 1992
Purchase Accru,l
Interest Maturity Par Market Unrealized Prlee Basis
~ B"'t~ D~te ~ INVESTMENTS ~ Giln (Lm) eiho~~ fi.I:n1Jlg ~
~A •• ncy ~ment Fund (9,80%1
lAIF 4,96 09-01-92 15,000,00 15,000,000 15,OOO,OOU 63,00.
~~d (0.13%1
Fidelity Invest~ents 3,18 09-01-92 100,000 100,000 100,000 27Z
Franklin Invest~ents 3,20 09-01-92 12h®.Q lQO...QQQ l~ l...W.
200,000 200,000 200 ,000 1,475
~r1i!l~otes gt O'~Q~jt (IQ,4~~1
Sumitomo B.nk (Collateral) 4,30 12·29-92 3,000,000 3,000,000 3,000,000 11,108
Sumitomo Bank (Coll.terol) 4,30 01-06-93 2,000,000 2,000,000 2,000,000 ] ,406
Fldelity Federal (Collateral) 4.00 01-11·93 2,000,000 2,000,000 2,000,000 6,889
Fidelity Federal (Collateral) 4.00 01-20-93 2,000,000 2,000,000 2,000,000 6,889 0 Fidelity Feder.l (Collater.l) 4.50 03-03·93 3,000,000 3,000,000 3,000,000 ]; ,625 .
Sumltomo B.nk (Collater.l) 4.05 04-07-93 2,000,000 2,000,000 2,000,000 6,975
Fidelity Federal (Collateral) 4.45 05-19-93 _ 2,000,000 2,OOO.OQO 2,QOO,OQO -Lill.
16,000,000 16,000,000 16,000,000 58,556
CMR:427:92
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Page 3 of 6
REPORT OF IHVES~EHTS
AUGUST 31. 1992
Purchue Accruilil
Interest Maturity Par Market Unrealized Price Sasis
M!llli: Rate Oat. ~M. 'lllIlL Gain (Lossl aalone. Ul:il.lIm.
t~@[~i'l ~'R.[ !~l !~.9Z~1
General El~ctric 4.25 09-25-92 1,000,000 978,986 978,986 3,660.
Coca~Cola 3.20 11-24-92 2.000.000 1.966.872 1.966.872 1.333
General Electric 3,35 02-19-93 MQQ.OOQ z.m.QQg Ul..Lm l.ll1.
6.000.000 5.921.858 5,921,858 6,110
~.lo Alto Im.rovement Bond. !.QlZ1
S~Ties P 10.95 07-02-93 20,COO 20,000 20,000 103
!W..._~~.l!rL~l
Treasury Notes 6.38 ll-15-92 2,000,000 2,009,375 2,009,375 13,958
'Trea'iury Notes 8.75 01-15-93 2,000,000 2,010,000 2,010,000 14,583
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 3,015,938 3,015,938 20, 313(Ii.)
lreiisury Notes 8.00 08-15-93 7,000,000 6,988,125 6,988,125 46,661
Treas.ury Notes 8.2S 09-30-93 4,000,000 4,195,000 159,062 4,035,938 21,500
Treasury Notes 7.75 1\-15-93 8,000,000 8,316,000 296,431 8,081. ~63 51,667
Treasury Notes 7.63 12-31-93 2,000,000 2,100,000 B1,125 2,016,875 12,708
Treasury Note'!> 7.00 05-15-94 6,000,000 6,294,000 222,125 6,071 ,375 35,000 .
Treasury Notes 6.00 11-15·94 5,000,000 5,181,000 129,437 5,051,563 25,000
1r •• sury Notes (b) 5.50 02·15-95 7.0oo.g00 7.m,oeo _M.ill .1.138,828 ..ll.W [~l'if:' ,>:',
50,500,000 51,853,813 924,358 50,929,455 293,911
CMR:427:92
REPORT OF INVESTMENTS
Page 4 of 6
AUGUST 3 I, 1992
Purchase Accrual
Interest Maturity Par Market Unrealized Prjce B .. 15
.sQI.Iill flat. Date WJiu lLlJtlt.. Galn !loss) Balinee illn1n1l1
Y,S, aGEHCl (~Z.68~1
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 2,000,000 2,000,000 1l,25!e SLMA 10.50 04-22-93 1,000,000 1,000,000 ) ,000,000 8,750 FNMA 10.75 05-)0-93 1,000,000 930,937 930,9:;:' 8,958 fHL8 10.75 05-25-93 1,000,000 998,125 998,125 8,958 fHLB 7.75 07-26·93 1,000,000 998,750 998,750 6,458 fHLB 7.45 08'25-93 2,000,000 2,000,000 2,000,000 12,417 fHLB 7.95 09-27·93 1,000,000 1,045,000 53,125 991,875 6,625 fHLB 12.15 12·27·93 2,500,000 2,767,000 )29,500 2,431,500 25,313 FHLB 7.55 0).25-94 2,000,000 2,099,000 95,815 2,003,125 12,583 FHLB 7.50 06-27'94 5,000,000 5,2Bl,OOO 193,812 5,087,188 31,250 , FNMA 7.45 07-11-94 3,000,000 3,170,000 133,203 3,036,797 18,625
I FHI.B 6.70 08·25-94 8,000,000 8,370,000 123,750 8,246,2;0 44,667
I FHLB 6.58 09-26·94 4,000,000 4,175,000 70,312 4,104,688 21,933
I FHlB 5.94 02·7.7-95 6,000,000 6,197,000 178,875 6,018,125 29,70D FHLB 6.45 03-27-95 8,000,000 8,348,000 283,000 8,065,000 43,000 FHLB 6.04 04-25-95 6,000,000 6,218,000 218,625 5,999,315 30,200
I FHLB (c) 7.95 12·26-95 3,000,000 3,140,000 140,000 3,000,000 19,815 0 FNMA (d) 7.10 02-12-96 2,000,000 2,102,000 104,500 1, 997,500 12,833 fNMA 7.60 01·10-97 2,000,000 2,154,000 151,187 2,002,813 12,667 I FlB 1.35 01-20·97 500.000 533,000 33,000 500,000 3,063
I FHlMC (P&I) 10.00 02-01-09 365,357 400,000 51,049 348,951 2,995 FHLMC (P&I Semi-Annually) 12.45 09-15-09 227 ,DOD 265,000 19,375 245,625 2,355 1\':{~lJ\~m' •.•. ;', ~{ ...
!
GNMA (P&I ) 9.00 11-15·16 712,515 762,QOO 18,566 743,434 ~ ... m·
65,304,872 67,968,812 2,197,754 6S,77J,058 404,438 ~6j.j'~_!(.;~::;~"'.,"'1· . " :"
CMR: 427:92
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Matured and Sold Inyestments
Treasury Notes
FHlB
Sanwa. Bank
REPORT OF INVESTMENTS
AUGUST 31, 1992
Intare,t Haturlty
__ Rate Date
8.25
8.60
3.89
08-15-92
08-25-92
08-28-92
Par
y~
Harket
.w.u.t-
Unreall~ad
Gain (loss)
PurchlSE!
Price
Balance
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Page 5 of 6
Accrl,lll
Basis
.E.mlins.\.
10,313.
5,972
IS ,011
TOTAL INV(STMENTS( 100%) $153,024,872 $156,964,483 $3,122,112 $153,842,371 $858,975
(P&I) Prlncipal and Interest payments monthly. Investments with mat"riti.s of l.ss th.n one y.ar are valued .t cost.
Purchases sinc~ last report are shown in bold type.
(a) Percent figure represents the discount rate.
(b) us T-Not. maturing 2/15/92 refler.ts a 54 million new purchase.
(c) FHlB has a calhble option, beglnnll1g on 12-27-93. ,,'
(d) FNMA has a collabl. option, beginning on 02-12-94. l.~
CMR: 427:92
INTE~EST INCOHE (ACCRUAl BASIS)
AUGUST 11, 1992
TO Date
Wor~ 1991-92
Unit (Cash Basis)
Interest Income
[ffectlYe Annual $ 2,517,335
Rate of Return
On Inyestments % 7.93
Interest Rates as of Augu$t 31, 1992
Prime Rate:
3-~nth Treas~ry Bill:
3-month Bankers Acceptance:
3-mcntn Coomerc1al Paper:
3·month Certificates of Deposit:
2·year Treasury Note:
2-year Agency:
Source: W.ll Street Journal 9/1/92
CltR:427 :92
To Date
1991-93
1,726,160
6.84
6,O~
3.17%
3.25"
3.37:>
2.97%
4.12%
4,1~
Increase
(lJi!crease)
1992-93
(791,175)
(1.09)
Pag. 6 of 6
% Of
Target
Target
To pate
9,648,000 17.89
b.O 1I4.00