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TH E HONORA6l E CITY CO UNC I l
Palo A1to, California
INVESTMOO ~CTlYIH REPORT FOR. MARCH 1993
Members of tile Council:
This is an informational report and no Council dcti::m is necessary.
1!lI.illST INC~E
Int~rest income on an accrual basis for t~e month of ~arcn was 5855,504 and for
the first r.in~ months of }932-93 tota1ed $7.7 miilion, 75 perc~nt of tne revised
annual target of 510.4 million. On a cash basis, receipts tota11ed $904,547 fOi
March, and S7.'9 million year to date. The effective annual rate of return on an
accrual basis is 5.59 percent for the current fiscal year.
CURRENI PORTFOLIO
The par valu.e of the City's portfolio is $170.2 million, which consists of S130.S
million, or 77 percent, maturing within two years. Most of the ~nvestments.
5139.2 million, or 82 percent, are in Ufiited State3 Government Securiti-es. The
current market \la1uE: of the portfOlio is 10i.3 p~rcent of cost. The average life
of the portfolio is 1.S years.
INT£REST RATES AND INVESTMENTS
In March, staff invested 59.5 million in medium-term U. S. Treasury Notes, at a
return .of approximately 3.48 percent and 53.0 million ir. Commerclal Paper at 3.17 percent.
The drop in intere!:t rates during the last several years has resulted in a steady
decline on the return on tne City's portfolio --from 8.6 percent in 1990-91 and
7.9 percent in 1991-92 --to the current 6.6 percent le~el. Short-term rates
have dropped the most, as shown by the steep drop on the fidel it}' In\lestmi3nts
Mutua1 Fund earnings rate to the current 3 p€r-cent l€vel ()ee g:--aph on next p.ge) .
Staff has prepared for a potential reversa1 of rates by shortening the average
life of the portfolio to 1.5 years, from 2.9 years as of September 1988.
CMR:245:93
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If :!.hort-term rates were to increase rapidly, staff would be ab1e to shift funds
to mutual funds. In the meant'frr:e, only S100,OOO is currer1tly in the Fidelity
Fund ~xcept for short placements such as t~~ $900,000 invested March 31~ 1993 and
~ithdrawn April I, 1993.
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COHPUANCE WITH INVESTMENT poun
As of !-larch 31, 1993., the inv~st~ent portfolio was ~n compilance with a1,l
elements of the City's investment policy. In April 1993, proj~ctions indicated
receipts will be $15.6 million; expenditures will be 513.7 million and S22.0
million in investments will mature. On the basis of the above projection, there
are sufficient funds to meet Pab Alto's expenditure requirements for tnt! month
of April. Based upon the cash flew projections prepared by Treasury staff for
fiscal year 1992·93, there are sufficient flind. ft"om the revenues and maturing
in~estments to meet all e~p~nditure r~Quirements for the remainder of the fiscal
year.
CHR:Z45:93
,--i;!lT"_', Ci
tMIlY HARP.ISON -
Finance Director
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Pdge 1 cf 5
REPORT OF INVESTMENTS
HAReN 31. 1991 ,
Par Amount 3/31/93 1992-93 2/28/93
,
~ (in $ Millions) JU_ l..u:.ill..... _..i!L ~X MATURITY ,
~ \., thin I mont'" $ 22.00 12. 92 > S6 15.04
1-3 ""nU s 9.00 5.29 7.19 3-6 months 21.02 12.35 9.60 6-9 months 12.50 7.34 7.79 9-12 menths 2.00 1.17 3.90 1-2 years 64,_0.Q 37.60 27 .B7
Within 2 years nO.52 76.67 > S50 7i.39
2-5 years 18.50 U.6! 27 _87 5-10 years .00 .00 .00 10-20 years .51 .30 .11 20-30 years ~2Q _ell ~
O'"er 2 years 39.71 23.31 28.liO
TOTAL 170.23 100.0% 1 ~Ol:, 100.0%
~E OF INVESTMENT
local Agency lnvestment rund 15.00 8.8l 8.99 Mutual fund 1.00 .59 < IS'" .06 Certificates of Dep~sit:
Col1atera1 i zed !2.0a 7.05 8.99 Bankers Acceptances 0,00 .00 ( 30% 3.60 Conlra, rc: ; i 1 Paper 3.00 I. 76 < j 5% .60 City cf Palo Alto Bonds .01 .01 .01 U.S. Treisury 74.00 4J.47 38.~6 U.S. Agency ~5 .21 38.11 ~
iOTAl 170.23 100.0% 100% 100.0%
Market \Sal ue/C.ost SI73.7/171.4 101.3% > 95% 101.4%
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Page 2 of 6
REPORT OF INVEST"ENTS
IlARCH 31, 1993
Purchase Accrual
Interp-st Maturity Par Market Unrealized Price BetS 1 So
~ ~I&-Qa~E! !ill!g ~<Ililt Gi 1n (LQn) l!ill!!l&. lli~
JlIYE5TMENT5
~~LMency lnvest .... "t Fund~J!L"il
lAII 4,65 04-01-93 15,000,00 15,000,000 15,000,000 57,000
!!~LfJiI1L{()~nl ."
Fidelity Investments 3.03 04-01-93 1.000,000 1,000,000 1,000,000 2BB
<
Cort I fl <otes_ of t!ru>~!La_,ll.~~l
Sumitomo Bank (Collateral) 4.05 04-07-93 2,000,000 2,000,000 2,000,000 6,975
SumHomo Bank (Coll ateral) 3.40 04-26-93 l,OOO,OOO 3,000,000 3,000,000 B,7B3
Sumitomo Bank (Collateral) 3.35 05-06-93 2,000,000 2,000,000 2,000,000 5,769
Fidelity feder.l (Collateral) 4.45 05-19-93 7.,000,000 2,000,000 i.,OOO~OOO 7,664
fidelity Federal (Collateral) l.BO 07-30-93 ~Q...QQ2 ..1..Q.oJWlQQ -l..MQ.Illl9 ~U
12,000,000 12,000,000 12,000,000 39,008
tQllIft~rcl.1 P.P~.LtL.7~
General Electric 3,13 08-02-93 3,000,000 2,960,614 2,960,614 261
i
CMR:24S;93
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REPORT Of INYESTMENTS
"ARCH 31, 1993
Interest Maturity Par Market lQI1lli Ba:t~ J@!.L. .\'iill ~!I.-
, ., ,I
Palo Alto Improvemont ~~~
S~ries P 10,95 07-02-93 20,000 20,000
y"'S. Trelliry (43,4I'!1
Treasury Notes B.13 06·30-93 3,000,000 3.015,938 Tr~asury Notes 8.00 08-15-93 7,000,000 6,988,125 Treasury Notes 8,25 09-30·93 4,000,000 4,035,938 Treil')ury Notes. 7.75 11·15-93 8,000,000 8,081,563 Treasury Notes 7,63 12-31·93 2,000,000 2,016,875 Treasury Notes· 5,38 04-30-94 12,000,000 12,2 44,000 TreaslJry Not",s 7,00 05-15-94 6,000,000 6,231,000 Treasury Not~s 6,00 11·15·94 5,000,000 5,173,000 Treasury Notes 5,50 02-15-95 7,000,000 7,203,000 Traasury Notes 5,13 11-15-95 14,000,000 14,298,000 Treasury Notes 4,63 02-15-96 ~!lru1 1i,049,QOO
74,000,000 75,336,439
CHR;245:93
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Purchase-
Ullrealized Price
~tD~l.>l a.il;w.L
lO,OOO
3,015,938
6,988,125
4,015,938
8,081,563
2,016,875
(8,071) 12,252,071
159,125 6,071,875
121,437 5,051,563
64,112 7,138,828
192,842 14,105,158
..1ZM1 6,006,406
572,099 74,764,340
Pige 3 of 6
Accrual
Basis
f..~
IS3
20,3D
46,667
27,500
51,667
12,708
24,636
35,000
25,000
32,083
59,192
...ll...ill
358,491
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U,S. AGENC~8.31%1
SlMA
fNHA
FHlS
FHlS
FHlB
FHlB
FHL8
FHlS
FHlB
FNHA
FHLB
FHl.6
FHIB
FHlS
FHlS
FHlS (b)
FNMA Ie)
FNHA
HS
fNMA
FHlMC (P&l)
fHIMC (P&l Seml-Antlually)
GNMA (P& I)
CMR:245:93
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Page 4 of 6 ''l~:.,.,
,,;.~~~< i:' "'.', t" .. ,· REPORT OF INVESTMENTS t-~" "/''-'-'10'(' '/'~"~'-'~':~"':7'-',"",'. '"~""'" " "'" .. ), MARCil 31, 1993 'If.;-f'~,\!,':, '--:\.:,~!." ; :~'~"'·:'i. Purcflas@ Accrual Interest Maturity Par Markf!t Unreal il:ed Price Bi\sis -~1L ___ Jl.i..tL y~ W.!tlL jiajD IL2S1l ~fL f&!!inll
I ,,':,: ...
10.50 04-12-93 1,000,000 1,000,000 1,000,000 8,750 10.75 05·10-93 1,000,000 930,937 930,937 8,958 i 10.75 05-25-93 1,000,000 998,125 998,125 8,958 7.75 07-26-93 1,000,000 99B,750 990,750 6,458 I 7.45 08-25·93 2,000,000 2,000,000 2,000,000 12,417 I, 7.95 09·27-93 1,000,000 991,875 991,875 6,625 I 12.15 12-17-93 2,500,000 2,437,500 Z,437,!iOO 25,313 7.55 01·25-94 2,000,000 2,003,115 2,003,125 12,583 7.50 06-17·94 5,000,000 5,223,000 135,812 5,087,ISB 31,250 7.45 07-11-94 3,000,000 3,121,000 84,203 3,036,797 18,625 I 6_70 08-25-94 8,000,000 8,323,000 76,750 8,246,250 44.667 6.58 09-26·94 4,000,000 4,155,000 50,311 4,104,688 l!,933 ! 5.94 02-17·95 6,000,000 6,212,000 193,875 6,013,125 29,700 ,
• 6.45 03-27-95 8.000,000 8,363,000 298,000 8,065,000 43,000 ! 6.04 04-~5-95 6,000,000 6,133,000 233,62~ 5,999,375 30,100 7.95 12-26,95 3,000,000 3, I 13,000 113,000 3,000,000 19,875 7.70 02· 12-96 2,000,000 2,076,000 78,500 1,997,500 12,833 7.60 01-10-97 2,000,000 2,IBI,OOO !l8,187 2,002,813 11,667 7.35 01-20-97 500,000 541,000 41,000 500,000 3,063 6.05 01-12--98 5,000,000 5,148,000 150,345 4,997,655 25,208 10.00 02-01·09 303,907 335,000 47,499 287,501 2,533 12.45 09-15-09 103,000 237,000 15,n5 l2I,625 2,J06 9.00 11-15-16 --'~~ _....l'§'Q...Q2Q _.l.:wl.a _7_;!§.&Gl _--2---122
65,212,850 67,381,312 1.719,621 65,661,691 393.017
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SumHomo Bank
Ge~eral Electric
Fidelity Fed. (Collaterd1)
Sanwa Bdnk
REPORT OF INYEST"E~TS
ItARCIi 31, 1993
Interest Matl.,n°1ty
--B~te D'tfc_
7.73
3,60
4.50
3.JZ
03-01-93
03-01-93
03-03'9~
03'22-93
Pili"
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Market
WJIL.
Unreal ized
MilLIJ&ul
"urchllSe
Price
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Page 5 of 6
Accrual
Basts
Ea.rninqs
311
100
1 , 1 ZS
5,710
TOTAL INVESTHENTS(100%) $170,232,850 1173,698,365 11,191,710 1171,406,645 1855,504
(a) Figure represpnts the di~cQunt rate,
(b) fHlB has a cdllable option, be-:ginning on ]2.27~93,
(c.) fNMA has a callabl~ opt.ion. bl!gifln\n~ on 0?'~12~94.
(*) Of the HZ ml11ion In U.S. Treasury Notes mattJting on 04-30-94, only $9,5 million were purchased io. March; the.
r enl 31ning \2.5 million ... ere purthased in February 1993.
CMR;145;93
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Ih~EREST INCOME (ACCRUAL BASIS)
MARCH 31. 1993
Work. To D,te
!!nll 1991·91
Interest lncome $ 7,690,701
Effect; lie !Hlnual
Rate of Return
On investments • 7.78 •
Interest Rates as of March 30. ]993
Prime Rate:
3-month Treasury Bil':
3~month Bankers Acceptance:
3-mont~ Commercial Paper:
3-month Certificates of Deposit:
2 .. year Treasury Note:
2-ye.r Agency:
Source: Wall Street Journ.l 3/31/93
CMR:245:93
To Date
H91·93
7,748,911
E .59
6.00%
1.ge%
3.09%
3.19%
3.10%
3.96%
4.00%
InCt'ease
(Decr'2ase)
J 992·93
58,110
( 1.!9)
",
PageSofS
% Of
Target
IJ,)"get io Date
10,400,000 74.51
6.5 101. 38