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Home My WebLink About2003-02-04; City Council; 17057; Report on City Investments as of December 31, 2002CITY OF CARLSBAD -AGENDA BILL AB# 17 05 7 TITLE: 2-4-03 REPORT ON CITY INVESTMENTS MTG. AS OF DECEMBER 31.2002 DEPT. TRS CITY MGR:W 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 December 31,2002 is summarized below. Pooled Investment Portfolio (Cash and Securities) Current Month Prior Month Par Value 401,816,425 Cost of Investments 389,012,033 399,782,684 399,695,726 41 3,063,596 Market Value (2) 391,047,587 402,239,581 Amortized Cost (1) 390,584,975 (I) 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 12/31/02. 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 2.605.31 5 Debt Service 25,803,600 Special Revenue 82,951,325 1 Capital Projects 148,128,Oll Enterprise (1,120,891) Reconciling Adjustments 1 1,355,416 Agency Funds 14,478,215 Internal Service 1 18,038,590 Total Treasurer’s Investment Portfolio at Amortized Cost 402,239,581 Fund equity balances are restricted for various purposes as listed above. See Exhibit 7 for a more detailed breakdown. PAGE TWO OF AGENDA BILL NO. 17,057 Pooled Investment Interest Income Current Current Month Prior Month FYTD Income Month FYTD Cash Income Fiscal Year-to-Date * 642,324 8,565,494 9,207,818 *The cash income received is adjusted for any accrued interest purchased. Average Life Duration Average Yield (Years) Modified October 2002 1.754 4.32% 1.93 December 2002 1.719 4.36% 1.90 November 2002 1.824 4.60% 2.03 ~~ 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 City’s Investment Policy also requires that no more than 5% of the City’s portfolio be placed with any single issuer with the exception of U.S. Treasury/Federal agency securities and authorized pools. Exhibit 9 shows Citigroup exceeding this limitation as a result of the acquisition or the merging of companies. This situation will self correct as the Citigroup issues mature. The pooled investment portfolio has the ability to meet the City’s cash flow demands for the next six (6) months. In summary, the City’s investments of bond proceeds held separately as of the quarter ended December 31,2002 is as follows: Page 3 of 3 of AB #17,057 I Investment Portfolio for Bond Proceeds Current Quarter Prior Quarter Par Value 7,753,580 7,738,987 cost 7,753,580 7,738,987 All investments of bond proceeds have been made in accordance with the City’s Investment Policy and the trust indenture for each issue. EXHIBITS FOR POOLED INVESTMENTS: 1. 2. 3. 4. 5. 6. 7. 8. 9. Investment Portfolio Breakdown By Amortized Cost, Market Value, Cash Income, and Average Yield Investment Portfolio Breakdown Of Maturities Yield Comparison Graph Cumulative Cash Income Graph Second Quarter Transactions Detailed Investment Report Fund Equity in Pooled Investments Corporate Note and Commercial Paper Ratings Percentage Weightings By Corporate Note Issuer EXHIBIT FOR INVESTMENTS OF BOND PROCEEDS HELD SEPARATELY: IO. Detailed Investment Report - Quarterly Report 3 EXHIBIT 1 s z a t 0 0 0 0 0 0 n 0 8 0 0 9 0 0 0 0 0 3 0 8 0 8 0 0 0 0 0 a 0 0 8 0 8 0 0 0 0 0 fY I- EXHIBIT 2 N 0 0 N rcr e. rl P4 W m s 8 0 0 0 e s 8 0 0 0 a 4 s 8 0 0 0 3 3 ui 0 F: .s 9 e, nn -N ww 5 0 m c 0 '1 U 3-1 f c 1 C a EXHIBIT 3 0 E 0 r) c) ccs 0 I 0 F4 b * * EXHIBIT 4 EXHIBIT 5 """"7 & zzz 000 5 2 222 LLLLLLLL aaaa & s 0 EXHIBIT 6 m 5 z ~utLuuuuuuuuuuuu klaaaaaaaaaaaaaa a m uj nj i 0 N 0 N n K a f I- z E! 0000000 EXHIBIT 7 Fund Equity in Pooled Investments AS OF DECEMBER 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 82,951,325 25,803,600 2,605,315 11,764,781 6,576,943 31,228,112 7,524,775 7,680,471 7,476,164 62,831,635 11,638,904 1,406,227 148,128,011 51,908,699 59,406,405 4,211,933 2,511,554 1 18,038,590 14,478,215 0 11,355,416 0 403,360,472 (1,120,891) 402,239,581 (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 1/07/03. /3 EXHIBIT 8 CITY OF CARLSBAD INVESTMENT PORTFOLIO AS OF DECEMBER 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 EASTERNENERGY GENERAL ELECTRIC JERSEY CENT P&L NORTHERN ILL GAS OHIO BELL TEL PACIFIC BELL . PITNEY BOWES INC SBC COMMUNICATIONS SOUTHERN NEW ENGLAND TEL SOUTHWESTERN BELL SECURITY CAPITAL - GE AA2 AA1 AA1 AA1 AAA AAA AAA AA1 AA2 AA3 AA3 AA3 AAA AA3 AA3 AA+ AA- AA- AA- AAA AAA AAA AA AA- AA- AA AA- AAA AA- AA- Commercial Paper Investments Meeting the Current Investment Policy: (Ratings must be AIlPl 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 * Moodv‘s - S&P ABN AMRO BANK AI A+ CAMPBELL SOUP CO A3 A CREDIT SUISSE AA3 A+ DEAN WITTER DISCV AA3 A+ MERRILL LYNCH AA3 A+ MORGAN STANLEY DEAN WITTER AA3 A+ WACHOVIA CORP A43 A Latest Maturity Date Purchased 0513 I I05 AA3lAA- 1 010 1 I03 AA3IAA- 0411 5/07 AA3lAA- 1 1101 IO5 AA3IAA- 0911 5/04 AA3lAA- 0411 5/06 AA3lAA- 0711 5/05 AA3lAA- Carrying Value 4,160,501 1,974,289 4,255,805 2,971,409 6,206,811 15,717,905 4,014,303 Market Value 4,496,029 2,044,080 4,281,920 3,273,390 6,562,400 17,099,416 4,379,480 The Civs 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 portfolio until maturity unless events indicate they should be sold. EXHIBIT 9 CITY OF CARLSBAD INVESTMENT PORTFOLIO AS OF DECEMBER 31,2002 PERCENTAGE WEIGHTINGS BY CORPORATE NOTE ISSUER ABN AMRO BANK ALLSTATE FINANCIAL CAMPBELL SOUP CO ClTlGROUP ASSOCIATES CORP COMM CREDIT CREDIT SUISSE EASTERN ENERGY GENERAL ELECTRIC CAP SECURITY CAPITAL JERSEY CENT P&L MERRILL LYNCH MORGAN STANLEY DEAN WITTER DEAN WITTER DISCV NORTHERN ILL GAS PITNEY BOWES INC SBC COMMUNICATIONS OHIO BELL TEL PACIFIC BELL SOUTHERN NEW ENGLAND TEL SOUTHWESTERN BELL WACHOVIA CORP Total Portfolio Investment Cost 4,228,884.98 8,020,253.19 1,868,682.02 8,372,495.00 8,421,298.13 7,474,695.94 4,270,881 .I 2 2,199,911.90 15,445,257.01 3,380,298.92 2,974,560.00 6,145,447.87 15,789,131.03 2,950,553.97 715,349.40 1,919,298.74 4,058,275.56 1,947,308.26 7,593,579.83 1 ,I 13,832.90 2,097,205.18 4,023,404.94 Percent of Portfolio* 1.05% 2.00% 0.47% 6.04% I .06% 0.55% 3.84% 0.74% 1.53% 4.66% 0.1 8% 0.48% 4.18% 1 .OO% $401,816,424.68 * No more than 5% may be invested with a single issuer. 55 zz EXHIBIT 10