HomeMy WebLinkAbout1988-09-27; City Council; N/A; Report on City Investments\B# rhlF0
ATG. q-27-S I IEPT. TRS
TITLE:
REPORT ON CITY INVESTMENTS I CITY MGR.=
RECOMMENDED ACTION:
No action is required.
ITEM EXPLANATION:
State law requires that the City Treasurer report to the City Council
on a monthly basis the status of the City's investment portfolio. This
report is presented to Council each month reporting on investments held
on the first day of the month.
In summary, the City's investment portfolio as of September 1, 19 8 , - is as follows:
CERTIFICATES OF DEPOSIT
FEDERAL GOV'T NOTES OR BONDS
FEDERAL AGENCY NOTES OR BONDS
CORPORATE NOTES
LOCAL AGENCY INVESTMENT FUNDS
1
2
3
4 Bankers Acceptances
Commercial Paper
OTHER INVESTMENTS
5
TOTAL PORTFOLIO
Principal
Amount
$23,447,000
1 , 635,892
13,894,563
4,913 , 641
12,032,000
3,768 , 481
963 , 37 1
422 , 437
Average
Interest
Rate
7.87
8.13
8.17
8.45
8.14
8.17
7.73
5.19
$ 61,077,385 8.04
Average
Term
331
1 , 058
1,870
1,272
-
137
177
These investments have been made in accordance with the City's investment
policy adopted January 2, 1985, and revised Mav 5, 1987
FISCAL IMPACT:
When held to maturity, the above investments will yield $
in interest revenue.
11,623,171
EXHIBITS :
Detail listing of investments as of September 1, 193.
Current Market Value = $1,645,475.
Current Market Value = $13,417,693, of which $275,408 represents
accrued interest to September 1, 1988.
Current Market Value = $4,826,857, of which $128,895 represents
accrued interest to September 1, 1988.
Current Market Value = $3,812,050.
Current Market Value = $977,400.
2
6Memo from the Treasurer September 21, 1988
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September 21, 1988
TO : CITY COUNCIL
FROM: CITY TREASURER
BANKRUPTCY OF BROKERAGE FIRM
The purpose of this memo is to apprise the City Council of the fact that one of
the brokerage firms with whom the City has dealt in the past, Fitzgerald, DeArman
and Roberts, is being liquidated by order of the Bankruptcy Court at the request
of the Securities Investor Protection Corporation, a non-prof it corporation which
protects customers of registered securities broker-dealers. A trustee was
appointed by the court on June 28, 1988, to liquidate the brokerage firm. The
City of Carlsbad was first notified of this bankruptcy on August 1, 1988, by
means of a letter from the bankruptcy trustee.
The City purchased two securities from this firm as follows:
Purchase Date
2/22/88
41 25/88
Security Maturity Date cost -
Security Pacific
Medium Term Notes 7/1/93 $499,720.47
Treasury Investment
Growth Receipt 71 15/91 $500,165.28
The above listed securities were held for the City by Fitzgerald, DeArman Sr
Roberts. We have made a claim for them to the trustee, along with $20,937.50 in
interest, payable to the City on August 1, 1988. The maximum Securities Investor
Protection Insurance is $500,000 per account. ThereEore, some risk of loss in
excess of that amount is possible.
Yaeger Securities, an investment firm in Encino, California, has informed us by
letter that, as agreed with the trustee and with the Securities Investor Protec-
tion Corporation, the firm will be receiving the City's account showing its
status at the time it is transferred by the Securities Investor Protection
Corporation. The status of the City's account will not be known until a state-
ment is received from Yeager Securities.
These securities will continue to be included in the City's portfolio with a note
to the effect that they are not under control of the City until such time as they
are returned to the City or until other information as to their status is
available.
The City Treasurer has recently instituted a new policy to provide for the
safekeeping of all securities by Security Pacific Bank. Unfortunately, the
bankruptcy of this security firm occurred prior to the transfer of the
securities for safekeeping by Security Pacific. The new safekeeping procedures
September 21, 1988
City Council
Bankruptcy of Brokerage Firm
will help prevent this sort of situation from occurring in the future. Every
effort is being made to learn the status of our account and I will inform the
Council of any new developments.
City Treasurer