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HomeMy WebLinkAbout0496.093September 16, 1993 THE HONORABLE CITY COUNCIL Palo Alto, Ca'rifoMia INVESTMENT ACTIVITY REPORT FOR AUGUST Ig93 ~mbers of the Council; This is a~ informational report and no Council aetlan is necessary. IIrTEREST INCOI4E Interest income on an atcrual basis for the month of August was $860,109 and for the first two months of 1993-94 totaled $1.7 million, or 18 percent of tn_ ann".l target of $9.7 .,illion. On a cash basis, receipts totalled $1,304,518 forA"9ust and $2.0 million year to date. The effective ,annual rate of return on an accrual basis is 5.87 percent for the fiscal year. CI!!!RENT PORIfQI.H The par value of the City's portfolio is S182 million, which consists of S149 million, or 52 percent? maturing within two y-ears . .Most of the jnvestments, $138 million, or 76 percent, are in United Stat~s Government securities. The current market value of the portfolio is 101.0 percent of cost. The average life of the pGrtfolio is 1.3 years. INTEREST RATtS AND INVESTMENTS In August, staff invested $7 million in i two-year Tennessee Valley Authority (TVA) note at a return of 4.14 percent; $6 milliDn in cOlllJlercial paper with a maturity of approximately four months and a return of 3 .21 per~ent to 3.35 percent; and S6 million in Certificates of Deposit for approximately five months at a return of 3.2 percent. Although th~se rates appear ~ery low, rates hav~ continued to decline even further since t~e investm!nts mentioned. CHR:496:93 • I , -/ ~>,( .. -J" .:~': ~i:.. ·c· _ .C.',.,.:.'"".,-, o -'-', The followlng gr,ph for two-ye.r Treasury Notes sho.s th.t durlng the month of August, ratu again declined below the 4-~ercent level. fn fact, a two-year Treasury Note closed the month of August at 3,61 percent (and dropped below 3_7 percent by September 3). A three-month Treasury Note was down to 3 percent by the close of the month (and be'o. 2.~5 percent by September 3). 2 YEAR US TREASURY NOTE 1993 Yields ---------------- 5,OTI--- I 4.5 ~ 40~ __ ___ 35~ 3oL~--~-r_-~- ~J '; i I Jan '93 Feb Mar Apr May Jun Jul Aug COMPLIAHkE WITH INVESTMENT POLICY As of August 31, 1993, the investment :portfolio "'as in complfance, with al1 elements of tnt City's investment policy. [n September 1993, projections indicate receipts will be $18.2 million, expenditures will be SlS.5 milli~n, and $23.12 111;1 lion in investmf!nts win mature. On the basis Gf the above projection? there are sufficient funds to meet Palo Alto's expenditur! req~iremefits for the month of September. Based upon the cash fl~w projections prepared by Treasury staff for fiscal year 1993-94, there are 5uffitient funds from tne revenues and maturing investments to meet all expenditure requirements for the remainder of the flscal year. ! Res eet 11y SUbnlltted~ L~~~n E~EZAnalyst ~dk~~:~. '~ CMR:496:93 • . -., , .,.' ~-').'. ;.~ • -,'->,"' , '. ,>; ... ~ - .... ·/~·[~i.~>~·< <' . 0 . ---., " • Page I of 6 REPORl Of IHVESTM~NTS ~UGIJST ll, 1993 Par Amount. B/lI/93 1993-94 7/31/93 (I" ~ Mll1j2D'! I~l llrSll-I%l IY !!ATUlIITY Within 1 month $ 23.12 12.68 > S6 IS.4) 1-3 months ILO~ 6.03 II .00 3-6 months 16.50 10.15 8.27 6-9 months 29.00 15.~7 1l.12 9-12 "onths 15.00 8J8 1-99 1-2 YEars iLJ!Q ~ ..lJ1.,M Vith~n 2 yeilis 148.62 8L54 > S50 80.79 2-5 years 32.S0 17.83 18_54 5-JO years _00 .00 .00 10-20 yea .. .46 .25 .21 20-30 ye.rs ~ ~ ~ Ovel'" 2 years 33.66 18.46 19.21 TOTAL 182.28 100.01', 1001', 100.01', IY rm OF I~£$TME!!I Local Agency lnvestment Fund 15.00 8.23 8.56 Mutual Fund .JO .05 < 15l:. .06 Certificate. of Deposit: C.ll&teralize<l 11.00 9.33 6.28 S.,kers Acceptances 6.00 1.29 < 301', 3_42 C.....,·-ci.l Paper 6_00 ).29 < I;~ 1. 71 City of Palo Alto Bond. .02 .01 .01 U.S. Treasury 64.00 35.1l 40.50 U_S. Agency lW.§ 40.69 ~ TOTAL 182.28 100.0% 1001', 100.01', U8S.2/1S1.4 101.9% > 95% 100.9% tMR:496:93 REPORT OF INVESTMENTS Page 2 of 6 AUGUST 31, nil Purchase Atcrual Intere.t Maturity Par Market Unreall zod Pri(:e Buts ~ ~L Dilts: ~ 't'.i~ ~illn !L~~) Balance Earnlnos lID'lillIf!!I~ Local Agency Investment Fund (8,Z)%) 0 LAlf 4.47 09-01-93 15,000,000 15,000,000 15,000,000 52,000 ~~tu'l Fy~~ !Q,Q~~I Fidelity Investments 2.76 09-0J.93 100,000 100,000 100,000 234 ,.rtif;".t •• of OeDosit (9,33%) t~t;{l1C;f~~i};~t"~?· ".','{: .. ; . '~l2'''(_7t·\li:~-:~;}:;~:f{~~ )':-.~-;, ~.::_ ,\':i -; Sumltomo Bank (Collatoral) 3,20 02-18-94 3,000,000 3.000,000 3,000.000 1.333 Sacramento Bank (Colloterol) 3.20 02-22-94 3,000,000 3,000,000 3,000,000 8,267 r"Ci";!I':"'" .. Sacra.ento Bank (Collateral) 3.20 03-10-94 3.000,000 l,OOO.OOO 3,000.000 4.000 ,\.t;;.~.,~ ,.,' , , .' Sumitom9 Sonk (Colloteral) 3.40 03-28-94 2,000,000 2,000,000 2,000,000 5,856 ;~~f~~--'):"<"< ,;'" \ I,.'" (.~ Sacramento Sank (Collaterol) 3.30 04-08-94 3,000.000 3,000,000 3,000,000 8,525 Sumita®o Sank (Coll.terol) 3.30 04-26-94 3,QOO,00Q ..1...QQQ.QQQ ..l.Q2l).JlQQ illiC~l 17,000,000 17,000,000 17,000,000 36,506 Comm.r~l'l PI2ft (a} (3,Z2~) (a) Associates of America 3.18 IZ-01-93 3,000,000 Z,968,200 Z,968,200 7,420 General Electric 3,29 01-31-94 3,000,000 2,950,650 2,95O,6~ ~ 6,000,000 5,918,850 5,918,850 14,823 1Q~0tlJ:~'i:\ .... . .. ;" "'J·K~Yt~),,~·f,~~.;': ".: ..•. ) '," ! CMR:496:93 Page 3 of 6 REPORT OF INVESTMENTS AUGUST 31, 1993 Purchase Accrual Interest Haturlty Par Market Unreal1zed Price B .. 1s ~ R.te Oa~. Y.il.B hlIIL. Giln (Lossl Bahne. Earnln". lInk!ri ~~'IRtIDQI (3.Z~l (aJ SUl1l1tomo Bank 3.10 09-30-93 3,000,000 2,901,506 2,961,508 8,006 0 Sanwa Bank 3.08 10-29-93 M2Q.Q22 Z.2~MZQ z...ill...lli VJ!l1 6,000,000 5,916,078 5,916,078 15,965 ~.12 ~li2 ImRr2Y~n! ~~~ (,Ql~l Series P (*J 10.95 07-02-93 20,000 20,000 20,000 0 U,~, Ir.I~~r~ (~~.I!~) ,-I Treas;~ry Not~s 8.25 09-)0-93 4,000,000 4,035,938 4,035,938 27,500 '" ' ' Trf>iSury Not~s 7.75 I1-15-93 6,000,000 8,061,563 8,061,563 51,667 I '" Treasury Notes 7.63 12-31-93 2,000,000 2,016,675 2,016,675 12,708 t ' Treasury Notes 5.38 04-30-94 12,000,000 12,252,071 12,252,071 53,750 'I ."- Treasury Notes 7.00 05-15-94 6,000,000 6,071,875 6,071,875 35,000 I '. " ... Tr~a~ury Not@s 6.00 IH5-94 5,000,000 5,142,000 90,437 5,051,563 25,000 • ): ' " , Treasury Notes 5.50 02·15·95 7,000,000 7,182,000 43,172 7,136,626 32,063 I Treasury Notes 5.13 11-15·95 14,000,000 14,350,000 244,842 14,105,156 59,792 I "_,r'" .. Treasury Notes 4,63 02·15·96 6.000.090 -LQn.!ru! ..ll..ill. 6,99§.496 .lLill r, . 64,000,000 65,216,322 456,Oi5 64,760,277 320,625 »,'f-,: _,')}\r~:,: \. , ,,-, .wi 'lV",.,." "1 I _~"',", " 'if;I"",'" ) _<'~';\ ~);'~:' i '\:'" CHR:496:93 . ,I ,~~ '~':_\ ,--~ " . ': Page 4 of 6 REPORT OF INVESTMENTS AUGUST 31, 1993 Purchase Accrual Interest Maturity Par Market Unrealized Price 8asis ~ JJk. ~~tf hl..iIf YillLL ~~jD [Laul ~L Earninas U,S, ~G~~cr '~Q,6~1 FHlB 7,95 09·27·93 1,000,000 991,875 991,B15 6,625 FHlB IUS 12·21·93 2,500,000 2,437,500 2,437,500 25,313 4~ FHl8 7.55 01 .. 25·94 2,000,000 2,003,125 2,003,125 12,583 FHlB 1.50 06·27·94 5,000,000 5,087,Iee 5,087,188 31,250 F~MA 7.45 07·11·94 3,000,000 3,036,797 3,036,797 18,625 FHlB 6,70 08·25·94 8,000,000 8,246,250 8,246,250 44,667 "vB~IlJ':J\1i~;I'i7A'.'~·-'-.~'\_·.' ,~ .. ~.' , FHlB 6.58 09·26·94 4,000,000 4,123,000 18,312 4,104,688 21,933 FHlB 5.94 02-2] .95 6,000,000 6,188,000 169,875 6,018,125 29,700 FHlB 6.45 03-27·95 8,000,000 8,323,000 258,000 8,065,000 43,000 FHLB 6,04 04·25-95 6,000,000 6,206,000 206,625 5,999,375 30,200 ,. , .... ", ' .,'" FNMA 3.84 05-02·95 2,000,000 1,999,000 7,150 ],991,250 6,400 '.l', ",,' " \ ," '", ,~;.: , ,~ '., .. ',,--\ FHLB 3.79 05·26·95 3,000,000 2,996,000 12,406 2,983,594 9,475 , FNMA 4.32 06·06·95 3,000,000 3,022,000 8,407 3,013,593 10,BOO "",' TVA 4,13 OB-15·9S 7,000,000 l,020,OeO 22,187 6,997,813 12,031 FHLB (b) 7.95 12-26·95 3,000,000 3,038,000 38,000 3,000,000 19,875 F~HA (e) 7.10 02·12-96 2,000,000 2,038,000 40,500 ], 997 ,500 12,833 FNMA 1,60 01-10·97 2,000,000 2,183,000 180,187 2,002,813 12,667 FLB 7.35 01·20·97 500,000 540,000 40,000 500,000 3,063 FNMA 6.05 01·12·98 5,000,000 5,231,000 233,345 4,997,655 25,208 (' " FHLMC (P&I) 10,00 02-01·09 251,113 2B4,OOO 43,293 2.40,707 2,143 . I FHLHC (P&I Somi·Annually) 12.45 09-15·09 203,000 238.000 16,315 221,625 2,106 GNMA (P&I) 9,00 11·15-16 lQQ,281 I~MQQ ZI.IQQ m.211Q _i.lli 74,161,094 75.9B4,735 1,316,362 74,668,373 385,754 ~. -~ :.0:" '~i, I:" " .' '~' >, CHR:496:93 .,'. . -', ~ Matured and Sgld Investments General Electric Treasury Notes fHlB REPORT OF IIIVESTIIENTS AU6UST 31. 1993 Interest Maturity RiM pate 3.B 8.00 7.45 Plr ffiII.l 08-02-93 08-15-93 08-25-93 Markot ~ U~r •• lized Gain (loss) Pu,.chas~ Price Sa] iDee ~ Page 5 of 6 Accrual Bash [.rnlngs 5220 23,333 10,347 TOTAL INYESTHEHTS(IOO%) $182.281,094 SI8S,ISS,gaS SI,172,407 $183,383,578 S860,109 (PAl) Principal and Interest payments monthly. Investments with maturities of less than one year are valued ~t cost. Purchas.s since last repart are shawn In bold type. (_) Figure .. epresents the discount rate. (b) FHlB has a callable aptlon, beginning on 12-27-93. (c) FNHA has a callable option, beginning on 02-12-94. () (0) Serlo. P Bond principal payment Is delayed due to bank technical error; funds should b. received by end of September 1993 . CHR:496:93 \. I,", -, \' '. " .. . , .. • INTEREST INCDME (ACCRUAL BASIS) IlUGUST 31. 1993 Work 10 O.te Unit ill..1.:..U Interast lr.tOllle $ 1,7Z6,16~ Effective Annu.l Rate of Return On Investments " 6.B4 lnt~rest Ratg$ is of August 31. 1993 PrilllE! R.te: 3-... nth 1re.,ury Bill: 3-~nth Bankers Accepta~ce: 3-month Commercial raper: 3-... nth Certiflcat •• of Deposil: 2-yeor Treasury Nate: 2-ye .. Agency: Source: Wall Street Journal 9/01/93 Ci'II!:496:93 To O.te 1993-94 1,736,21a S.B7 6.00% 3.Ql:4 3.08% l.17% 2. 71" 3.81):; 3.a7~ lntrease (Decrease) 1993-94 10,050 (0.97) , Page 6 of 6 " Of Toryet Target 12....!l!ll 9,700,000 11.90 5.5 106.73