HomeMy WebLinkAbout2002-12-03; City Council; 16988; Report on City Investments as of 10/31/024B# 16,988 TITLE:
REPORT ON CITY INVESTMENTS
AS OF ATG. 12-3-02
CITY OF CARLSBAD - AGENDA BILL I DEPT. /,/y
- October 31,2002 IEPT. TRS CITY MGR:~
RECOMMENDED ACTION:
Accept and file report.
ITEM EXPLANATION:
The City’s Investment Policy requires the City Treasurer to report to the City Council on a
monthly basis the status of the City’s pooled investment portfolio. A quarterly report is
also required for the investments of bond proceeds held separately. The City’s pooled
investment portfolio as of the month ended October 31,2002 is summarized below.
I Pooled Investment Portfolio (Cash and Securities)
Current Month Prior Month
Par Value
Cost of Investments
388,042,301 388,597,190
400,480,026 400,361,816 Market Value (2)
389,502,954 390,182,339 Amortized Cost (1)
389,278,148 389,910,100
(1) The cost of investments adjusted for amortized premiums and discounts.
(2) The amount at which the investments could be sold. Source of market values is Union
Bank of California’s custodial report as of 10/31/02.
The equity portion of the various funds at the amortized value of the total portfolio is
summarized below:
Fund Equity in Pooled Investments
Cash Balance by Fund:
General
147,281,308 Capital Projects
1,833,036 Debt Service
25,564,447 Special Revenue
74,627,037
(1,195,761) Reconciling Adjustments
10,304,215 Agency Funds
13,993,864 Internal Service
117,774,192 Enterprise
Total Treasurer’s Investment Portfolio at Amortized Cost 390.1 82.339
Fund equity balances are restricted for various purposes as listed above. See Exhibit 7
for a more detailed breakdown.
PAGE TWO OF AGENDA BILL ~0.16~988
Pooled Investment Interest Income
Current Current Month Prior
Month FYTD Income Month FYTD
Cash Income Fiscal
Year-to-Date * 2,132,636 4,892,290 7,024,926
*The cash income received is adjusted for any accrued interest purchased.
Pooled Investment PerformancelMeasurement
Average Life
(Years) Modified Duration Average Yield
August 2002 1.897 4.77% 1.12
September 2002
1.824 4.60% 1.09 October 2002
1.830 4.69% 1.12
All pooled investments have been made in accordance with the City’s Investment Policy adopted
January 2, 1985 and last revised January 8, 2002. All investments were initially made in
accordance with the City’s Investment Policy. Events subsequent to the purchase might have
resulted in some investments not being in compliance with the current policy. These events are
typically a change in the City’s Investment Policy, a change in the credit rating subsequent to a
purchase, or a temporary reduction in total portfolio assets. See Exhibit 8 for details.
The City’s Investment Policy requires that modified duration not exceed 1.8. New computer
software has been adopted that calculates modified duration in a different way, causing modified
duration to be higher that previously calculated. It is the opinion of the City Treasurer that the
modified duration now reported is a better indication of the portfolio’s maximum exposure to interest
rate changes. A change to the maximum modified duration allowed in the City’s Investment Policy
will be recommended in the next annual review, scheduled in January 2003. This will not reflect any
divergence from other requirements of the Investment Policy
The pooled investment portfolio has the ability to meet the City’s cash flow demands for the next six
(6) months.
EXHIBITS FOR POOLED INVESTMENTS:
1. Investment Portfolio Breakdown By Amortized Cost, Market Value, Cash Income, and Average Yield
2. Investment Portfolio Breakdown Of Maturities
3. Yield Comparison Graph
4. Cumulative Cash Income Graph
5. Second Quarter Transactions
6. Detailed Investment Report
7. Fund Equity in Pooled Investments
8. Corporate Note and Commercial Paper Ratings
9. Percentage Weightings By Corporate Note Issuer
EXHIBIT 1
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EXHIBIT 7
Fund Equity in Pooled Investments
AS OF OCTOBER 31,2002
Cash Balance by Fund:
General
Special Revenue
Debt Service
Capital Projects:
General Capital Construction
Traffic Impact Fees
Public Facilities Fees
Park Development
Transnet Taxes
Drainage Fees
Special Districts
Infrastructure Replacement
Other Capital Construction
Total
Enterprise:
Carlsbad Municipal Water District
Sewer Fund
Solid Waste
,Golf Course
Total
Internal Service
Redevelopment Funds (1)
Agency Funds
Misc. Special Funds
Total General Ledger Balance **
Reconciling Adjustments (2)
Total Treasurer's Investment Portfolio at Amortized Cost
74,627,037
25,564,447
1,833,036
1 1,952,064
6,467,851
31,527,843
7,454,579
7,717,372
7,557,092
60,495,142
11,601,096
2,508,269
147,281,308
52,456,351
58,563,909
4,174,873
2,579,059
11 7,774,192
13,993,864
0
10,304,215
0
391,378,100
(1,195,761)
390,182,339
(1) Redevelopment Fund Balances are interspersed throughout all funds.
(2) The Reconciling Adjustments consist of differences between the General Ledger which is prepared
on an accrual basis and the Treasurer's report which is prepared on the cash basis. Accrued Interest,
amortized premium or discounts and outstanding checks and deposits in transit are not included in the
Treasurer's summary. Differences between the time journal entries are posted and the time this
report is produced may also be a component of the adjustment.
** Figures based on best estimate at the time report run on 11/08/02.
EXHIBIT 8
CITY OF CARLSBAD INVESTMENT PORTFOLIO
AS OF OCTOBER 31,2002
CORPORATE NOTE AND COMMERCIAL PAPER RATINGS
Corporate Note Investments Meeting the Current Investment Policy:
(Ratings must be AA or better by both Moody’s and S&P)
Moodv‘s - S&P
ALLSTATE FINANCIAL
ASSOCIATES CORP
ClTlGROUP COMMERCIAL CREDIT CO CREDIT SUlS DEAN WlTER DISCV
GENERAL ELECTRIC
JERSEY CENT P&L
MERRILL LYNCH
MORGAN STANLEY DEAN WllTER
NORTHERN ILL GAS
OHIO BELL TEL
PACIFIC BELL
PITNEY BOWES INC
SBC COMMUNICATIONS
SOUTHERN NEW ENGLAND TEL
SOUTHWESTERN BELL
AA2
AA1
AA1
AA1
AA3 AA3
AAA
AAA
AA3
AA3
AA1
AA2
AA3
AA3
AA3
AA3
AA2
AA+
AA-
AA- AA-
AA- AA-
AAA
AAA
AA-
AA-
AA
AA-
AA-
AA
AA-
AA-
AA-
Commercial Paper Investments Meeting the Current Investment Policy:
(Ratings must be AllPl or better by both Moody’s and S&P)
(Ratings of other debt must be AA or better by Moody’s or S&P)
NONE
Investments with Subsequent Changes in Credit Rating *
Latest Carrying Market
Moody‘s - S&P Maturitv Date Purchased Value Value
CAMPBELL SOUP CO A3 A IOIOIIO~ AA~IAA- 1,968,575 2,049,800
HEWLET-PACKARD A3 A- 0cm105 AA~IAA- 7,187,801 7,4aa,m0
WACHOVIA CORP AI A 07/15/05 AA~IAA- 4,015,018 4,384,480
* The City’s Investment Policy allows the City Treasurer to determine the course of action that would correct exceptions
to the policy. All of these investments are paying interest at the required times. The principal of all investments are
considered secure. It is the intent of the City Treasurer to hold these assets in the porifolio until maturity unless events
indicate they should be sold.
EXHIBIT 9
CITY OF CARLSBAD INVESTMENT PORTFOLIO
AS OF OCTOBER 31,2002
PERCENTAGE WEIGHTINGS BY CORPORATE NOTE ISSUER
ABN AMRO BANK
ALLSTATE FINANCIAL
CAMPBELL SOUP CO
ClTlGROUP / ASSOCIATES CORP
COMM CREDIT
CREDIT SUlS
GENERAL ELECTRIC CAP
HEWLETT-PACKARD CO
JERSEYCENTP&L
MERRILL LYNCH
MORGAN STANLEY DEAN WITTER /
DEAN WITTER DISCV
NORTHERN ILL GAS
OHIO BELL TEL
PACIFIC BELL
PITNEY BOWES INC
SBC COMMUNICATIONS
SOUTHERN NEW ENGLAND TEL
SOUTHWESTERN BELL
WACHOVIA CORP
Total Portfolio
* No more than 5% may be invested with a single issue.
Investment Cost
4,228,884.98
8,020,253.19
1,868,682.02
16,793,793.13
7,474,695.94
7,380,021.78
7,948,535.60
7,301,835.93
2,974,560.00
8,235,653.27
18,739,685.00
71 5,349.40
1,947,308.26
7,593,579.83
1,919,298.74
4,058,275.56
1,113,832.90
2,097,205.18
4,023,404.94
Percent of Portfolio*
1.08%
2.06%
0.48%
4.31 %
1.92%
1.89%
2.04%
1.87%
0.76%
2.1 1%
4.81 %
0.1 8%
0.50%
1.95%
0.49%
1.04%
0.29%
0.54%
1.03%
$389,910,099.64
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