HomeMy WebLinkAbout2007-12-18; City Council; 19271; Annual Report of Investment Portfolio for 2007CITY OF CARLSBAD - AGENDA BILL 20
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AB# 19-271
MTG. 12/18/07
DEPT. Treasury
ANNUAL REPORT OF INVESTMENT
PORTFOLIO
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RECOMMENDED ACTION: Accept and file report.
ITEM EXPLANATION:
City Policy requires the City Treasurer to render an annual report of the City's investment
portfolio. This report is for the fiscal year ended June 30, 2007 (FY 06-07).
Assets in the investment portfolio totaled $557 million at the end of the fiscal year. 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
Special Revenue
Debt Service
Capital Projects
Enterprise
Internal Service
Agency Funds
Reconciling Adjustments
Total Treasurer's Investment Portfolio at Amortized Cost
75,867,066
37,944,378
2,381 ,749
246,655,698
146,179,515
22,441,194
26,300,748
(671,173)
557,099,175
Fund equity balances are restricted for various purposes as listed above. This represents an
increase of $40 million from the previous fiscal year. Cash and investments comprise an
estimated 36% of the total assets reported by the City and its agencies. It is estimated that the
investment portfolio will increase to $560 million by the end of FY07-08.
For the last month of the fiscal year, the portfolio had a return of 4.47%. For the entire fiscal
year, however, the portfolio averaged 4.37%. Cash interest income totaled $21.8 million in
FY06-07 of which approximately $2.7 million went to the General fund. For the next fiscal year
(FY07-08), it is expected that the average return for the portfolio will approximate 4.25%.
EXHIBITS:
1. City Treasurer's Annual Report of Investment Portfolio for the fiscal year ended
June 30, 2007.
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
D
D
Dn
D
CONTINUED TO DATE SPECIFIC
CONTINUED TO DATE UNKNOWN
RETURNED TO STAFF
OTHER - SEE MINUTES
Council received the report.
D
Dn
D
DEPARTMENT CONTACT: Nancy Sullivan 760-602-2473 nsull@ci.carlsbad.ca.us
CITY TREASURER'S
ANNUAL REPOR
INVESTMENTS
City Treasurer's
Annual Report of Investments
For Fiscal Year Ended June 30, 2007
TABLE OF CONTENTS
Page
Letter of Transmittal 1
Market Review FY 06-07 2
Portfolio Analysis 3
Preview FY 07-08 7
Appendices:
A: Risk Management and Disclosure 9
B: Portfolio Activities for Year Ended June 30, 2007 12
1635 Faraday Avenue, Carlsbad, CA 92008
Website: www. ci. carlsbad. ca. us
Prepared by the Treasury Department
City of Carlsbad
Office of the Treasurer
November 2007
Honorable Mayor, City Council,
And Citizens of the City of Carlsbad
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
City Treasurer Letter of Transmittal
2006-2007 Annual Report of Investments
I am pleased to present the Annual Report of Investments for the City of
Carlsbad for the fiscal year ended June 30, 2007 (FY 06-07). The report is
intended to provide reliable information as a basis for reviewing portfolio
performance and making management decisions. It also provides an archival
reference.
The City Treasurer is charged with the design of an effective cash management
and investment program for the City of Carlsbad and all of its agencies. Among
other activities, this includes arranging for banking services; forecasting all cash
receipts and expenditures; investing all inactive cash; managing investment risk
exposures; and reporting all investment activities.
This report summarizes and analyzes the activities of the investment portfolio for
FY 06-07. Total portfolio assets, investment portfolio relative to total city assets,
source of portfolio assets, asset allocations, yield achieved, unrealized gains and
losses, and cash revenues are presented. To give perspectives to these
measurements, a summary of movements in global and U.S. economic, as well
as market interest rates are provided for the fiscal year ended June 30, 2007.
Comparisons are also made with the preceding fiscal years. Finally, a statement
is offered regarding the prospects for the fiscal year 2007-2008 commencing July
1, 2007.
Harold (Mac) McShercy
Q'fy Treasurer /
1635 Faraday Avenue • Carlsbad, CA 92008-7314 • (76O) 602-2473 • FAX (760) 602-8556
www.ci.carlsbad.ca.us
CITY TREASURER
ANNUAL REPORT OF INVESTMENT PORTFOLIO
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
FY06-07 MARKET REVIEW
Federal Funds Target Rate
FY 06-07
5.50% -
5.00% -
4.50% -
4.00% -
3.50% -
3.00% -
X'
5.25% 5.25% 5.25%
X
Federal funds rate is a key
money market rate that
correlates with rates of other
short term credit
arrangements. It is the
interest rate that banks
charge each other for
overnight loans. In fiscal
year 06-07, the Federal
Reserve maintained the
federal funds rate at 5.25%.
Changes in short-
term market interest
rates are usually
affected by the
actions of the Federal
Reserve. Six-month,
two year, and five
year market rates
fluctuated moderately
over the course of the
fiscal year. Longer
term market rates
were flat and
relatively unaffected
by the lack of action
of the Federal
Reserve.
SHORT-TERM INTEREST RATES
U.S. Treasury Instruments
Fiscal Year 2006-2007
1 Percent I
5.00 ;^.J ~
.SO
.UU i
JUL AUG S
—•—Five Year— • -Two Year— *— 6 Month
A * A A * * A _
EP OCT NOV DEC JAN FEB MAR
JUL AUG SEP OCT NOV DEC JAN FEB MAR
4.90 4.69 4.58 4.56 4.44 4.69 4.80 4.52 4.53
4.95 4.78 4.68 4.69 4.61 4.81 4.92 4.64 4.57
5.14 5.10 5.00 5.11 5.08 5.08 5.14 5.11 5.06
"*<**• — »
APR MAY JUN
APR MAY JUN
4.51 4.85 4.89
4.59 4.91 4.84
4.99 4.95 4.97
The yield curve is a
graphic presentation of
the difference between
short-term and longer-
term interest rates of U.S.
Treasury instruments on a
given day. Financial
analysts use it to assess
the market's expectation
of recession or inflation.
The normal shape of the
yield curve has a
moderately upward slope,
with short-term rates
lower than longer-term
rates. If the upward slope
steepens, the financial
markets believe inflation may occur. An inverted yield curve is when short-term market
rates are greater than longer-term market rates. An inverted curve indicates that the
financial markets expect a slower economy, if not a recession. This relatively flat yield
curve indicates indecisiveness in the financial markets.
YIELD CURVE
7/01/06, 12/31/06, 6/30/07
| Market Rates |
4.5 -
3.5
3 Mth 2 Yr 5 Yr
3Mth 2Yr 5Yr 10 Yr
—•—07/01/2006 4.976 5.150 5.093 5.136
—A- 12/3 1/2006 5.006 4.808 4.692 4.702
- • - 06/30/2007 4.864 4.841 4.889 4.989
10 Yr
PORTFOLIO ANALYSIS
INVESTMENT PORTFOLIO
Dollar Amount of Assets (Fiscal Year End)
$600
FY04-05 FY05-06
Total assets in the
investment portfolio
stood at $557 million at
the end of the fiscal
year 06-07. This
increase includes but is
not limited to interest
earned, loan proceeds,
and revenues in excess
of expenses.
CASH & INVESTMENTS RELATIVE TO
TOTAL ASSETS OF CITY AND ITS AGENCIES*
FY02-03 FY03-04 FY04-05 FY05-06 FY06-07 FY07-08
I Cash/lnvestm ents QTotal Assets
:e: Comprehensive Annual Financial Report. Note: Total Assets of City and hi Agencies Is an estimated amount for FYS 07 - 08
The City publishes a
Comprehensive Annual
Financial Report (CAFR) at
the end of each fiscal year.
Among other information,
CAFR presents a balance
sheet showing the total
assets owned by the City and
all its agencies. At the end
of FY 06-07, cash and
investments managed by the
City Treasurer represent
36% of all assets reported by
the City and its agencies.
OF POOL ASSETS
(Dollar Amounts in IVIillions)
6/3O/O6
General
$67.8 Special & Other
$38.4
General
Agency "<SE I;
75-9
6/3O/O7
Special & Other
$ 39.6
229.6
apital a*
Agency & Inte;
$131._Enterprise
Total Investments - $515.9 Million
$ 146.2
Enterprise
Total Investments - $557.1 Million
The portfolio is an internal investment pool that uses the inactive cash from the various
funds of all City agencies, including the City, the Water District, and the Redevelopment
Agency. The top three sources of portfolio assets are the Capital Projects fund ($246.7
million, 44% of the total), followed by the Enterprise fund ($146.2 million, 26% of the
total), and the General fund ($75.9 million, 14% of the total). Together, these three
funds account for 84% of total portfolio assets.
Investments are made in financial instruments authorized by the City's Investment
Policy and the California State Government Code. With the exception of bank deposits
and deposits in the California State Local Agency Investment Fund (LAIF), all
investments are in fixed-income instruments with known maturity dates.
ASSET ALLOCATION
(Dollar Amounts in Millions)
UUF/CASH$26.1
FEDERAL
AGENCY
$438.2
6/30/06
CORPORATE
2.5
6/30/07
$44.9 FEDERAL
Total $516,852,810
\ /
\. S
^- - -^
Total $556,524,708
QLAIF/CASH •Corporate a Federal Agency
At the end of FY 06-07
(June 30, 2007), 82% of
portfolio assets were
invested in federal
agencies, 10% in
corporate notes, and 8%
in LAIF and cash. The
allocation of assets to
federal agencies
decreased, while the
allocation to cash and
LAIF increased from the
previous
Within
category
fiscal year.
the asset
of federal
agencies, investments in the Federal Home Loan Bank, the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage Association, and the Federal
Farm Credit Bank, constituted 39%, 35%, 24%, and 2% of the total, respectively.
Federal agencies are creations of the U. S. Congress and include agencies and
government-sponsored enterprises.
PORTFOLIO YIELDS
With 6 Month T-Bill Yields
. . -A
FY01-02 FY02-03 FY03-04 FY04-05 FY05-06 FY06-07
FY01-02 FY02-03
5.28 4.24
2.16 1.28
FY03-04 FY04-05 FY05-06 FY06-07
3.43 3.55 3.98 4.37
1.11 2.59 4.45 5.06
The average return of the
portfolio for FY 06-07
increased to 4.37% from
3.98% the year before. The
portfolio yield is heavily
influenced by changes in
short-term market interest
rates since approximately
21% of total investments
were required to mature
within one year. The
average interest rate for six-
month U.S. Treasury Bills
increased to 5.06% from
4.45% the previous year.
This graph shows the percent change in value of the portfolio over the last several
years. Investments gain and lose value subsequent to purchase because of changes in
market interest rates. When market interest rates decrease, investments made earlier
at higher rates will gain value. The reverse is true when market interest rates increase.
Accountants refer to these changes in value as unrealized gains and unrealized losses;
newspapers report them as paper gains and paper losses. The gain/loss is not
recognized until the investment is sold. Changes in value caused by changes in market
interest rates are normal and are expected.
Historical Unrealized Gains/Losses
as Percent of Amortized Cost
July 2002 - June 2007
4 AAO/.UUvo
3 RAO/ -.OUTo
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2 RAO/ -.5070
2AAO/ -.00/0
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o RAO/ .-£.OU /o
1 AAO/ -
/> /\/X ii i r^n Of>-* \f ^ ^s^. -•- Unreal GIL %
\ t\J\^\
* \\
\ '^\\/ V^
\ s*\ /-*\ s
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^**~~~^+-~ /'N*
-O.UUyo
Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul-
02 02 03 03 03 03 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07
With a buy and hold policy, an objective of the City's Investment Policy is to achieve an
average market rate of return over the economic cycle. The success in achieving this
objective can be approximated with having unrealized gains and losses that are
relatively equal over time. Tracking and measuring unrealized gains and losses could
also reveal any presence of high-risk investments in the portfolio. The changes in asset
values shown in the graph indicate that portfolio investments are within the acceptable
interest rate risk identified in the City's Investment Policy.
The total portfolio had less of an unrealized loss in FY 06-07 than in FY 05-06. This
small unrealized loss occurred as investments with high interest rates matured and
were reinvested in slightly lower market rates. It is likely that this gradual upward trend
will continue in FY 07-08 as investments with higher interest rates are called and
reinvested at today's lower market rates.
Cash income from portfolio
investments represents an
annuity stream of revenues from
the Treasury. This annuity
stream totaled $21.76 million, an
increase of approximately $3.9
million dollars from the previous
fiscal year. Of the total cash
interest revenues earned by the
portfolio in FY 06-07, over $2.7
million was credited to the
General fund. Cash income is a
function of assets in the
portfolio, the market interest
rates at the time of the
investments, and the interest
payment schedules of the issues.
ANNUITY STREAM FROM TREASURY
(Cash Interest Revenue)
For Fiscal Years Indicated
$24.00
FV03-04 FWt-05 FVOS-06 FW6-07
FY 07-08 PREVIEW
National and international economic forces are the primary influences on market
interest rates.
Global Economy
The global economy is experiencing its strongest sustained growth in 30 years. Global
growth remained above 5 percent in the first half of 2007. China's economy grew at
11.5% and, for the first time, was the largest contributor to global growth. India grew at
9% and Russia at 8%. These three countries accounted for one-half of last year's
global growth. The United States grew at about 2.25% in the first half of 2007, and is
expected to grow about 1.9% in 2008.
Global growth for 2008 has been revised down from 5.25% to 4.75%. Emerging market
economies will grow faster than industrialized economies.
Core inflation globally is about 2.25%, emerging nations about 2.5%, and the United
States is currently just below 2%. Rising food and oil prices are contributing to lower
economic growth and heightened inflation world wide. Food prices will continue to
increase due in part, to the increasing use of corn and other foods for bio-fuel.
U.S. Economy
It is anticipated that domestic economic growth will decline. A number of economists
are predicting negative growth (recession) in 2008. This will cause the Federal Reserve
to lower the federal funds rate. It is widely anticipated that the Federal Reserve will
decrease the fed funds rate 100 basis points by fiscal year ending June 30, 2008.
Inflation increases, significant decrease in corporate tax revenues and increased
borrowing by the U.S. may require the Federal Reserve to increase interest rates even
if the economy slows. Short-term market rates will decrease faster than long term rates
resulting in a lower, closer to normal, yield curve.
Approximately $123 million of investments with fixed maturity dates will mature in. FY
07-08. An additional $173 million may be called, and due to declining interest rates,
about $120 million will be called. Available proceeds from these investments will be
reinvested at market rates approximating the maturing investments and significantly
lower than the called investments. Yields on our LAIF investments will decrease
sharply as interest rates decline.
At the end of FY 06-07, LAIF investments had a yield of 5.24%, and all other
investments had a yield of 4.32%. A 4.0% yield approximates the historic average.
LAIF investment yield will likely decrease to 4.5% through December 2007 and then
decrease to 4.0% by the end of the FY 07-08. Yields by fiscal year end on investments
other than LAIF will decrease slightly due to the higher yielding investments being
called and reinvested at lower yields.
Throughout the fiscal year ending June 30, 2007 the yield of the total portfolio averaged
4.37%. During fiscal year ending June 30, 2008, the total portfolio is projected to have
an average yield of 4.25%.
Total assets in the investment portfolio stood at $557 million at the end of FY 06-07.
This is expected to increase slightly by the end of FY 07-08. Interest revenue earned
from portfolio investments in FY 07-08 should approximate $22 million. Property tax
revenues are projected to increase by 11%. Sales tax and transient occupancy tax
(TOT) revenues are expected to increase by 2% and 6% respectively.
8
APPENDICES TO ANNUAL REPORT OF INVESTMENT PORTFOLIO
APPENDIX A: RISK MANAGEMENT AND DISCLOSURE
All investments are exposed to risk of some type. The objective of risk management is
to identify the risks involved and establish acceptable levels of risks that are consistent
with the City's investment objectives. Risk management includes managing,
measuring, monitoring, and reporting the various risks to which portfolio investments
are exposed.
Portfolio investments are exposed to the following types of risks:
A. Credit risk.
a. Custodial credit risk.
a) Investments.
b) Deposits.
b. Default credit risk.
c. Concentration credit risk.
B. Interest rate risk.
C. Event Risk.
As of June 30, 2007, the portfolio had the following investments and cash in its internal
investment pool.
Investment Maturities
U. S. agencies July 2007 - April 2012
Corporate Notes July 2007 - Feb 2012
Certif. of Deposit July 2007 - March 2008
LAIF
Sweep accounts
Cash accounts
Total
Market Value
$454,216,500
54,496,553
504,092
35,965,629
7,545,418
873.513
$553.618.075
Market Value
Gain (Loss)
$(2,913,251)
(567,848)
(16,371)
$ (3.497.747)
Disclosures
Custodial Credit Risk (Investments). The City uses a third party custody and
safekeeping service for its investment securities. The Union Bank of California (UBC) is
under contract to provide these custodial services. Custodial credit risk is the risk that
the City will not be able to recover the value of its investments in the event of a UBC
failure. All City investments held in custody and safekeeping by UBC are held in the
name of the City and are segregated from securities owned by the bank. This is the
lowest level of custodial credit risk exposure.
Custodial Credit Risk (Deposits). The City maintains cash accounts at Wells Fargo
Bank (WFB) and UBC. At the conclusion of each business day, balances in these
accounts are "swept" into overnight investments. These overnight investments are
pooled and collateralized with either U. S. government securities or U. S. agency
securities. The California Code authorizes this type of investment. A small amount of
cash is not swept from the WFB checking accounts to cover checks that may be
presented for payment. Amounts up to $100,000 are FDIC insured.
Default Credit Risk. Default credit risk is the risk that the issuer of the security does
not pay either the interest or the principal when due. The debts of most U. S. agencies
are not backed by the full faith and credit of the federal government; however, because
the agencies are U. S. Government-sponsored, they carry AAA credit ratings. The
default credit risk of these investments is minimal.
California state code limits investments in medium-term corporate notes to the top three
credit ratings (AAA, AA, and A). It is the City's policy, however, to limit investments to
the top two credit ratings (AAA and AA). As of June 30, 2007, one investment equal to
approximately .5% of the investments in medium-term corporate notes had a credit
rating below the AA limit set by the City's Investment Policy. This investment was made
when the credit rating was either AAA or AA. California state code and the City's
Investment Policy allow the City Treasurer to determine the course of action to correct
exceptions to the Policy. It is the intent of the City Treasurer to hold this investment in
the portfolio until maturity unless events indicate it should be sold. The default credit
risk for corporate notes with a credit rating of single A is lower than U. S. federal
agencies or LAIF, but is considered by the City Treasurer to be within acceptable limits
for purposes of holding to maturity. A credit rating of single A is within State code
requirements.
The Local Agency Investment Fund (LAIF) is an investment pool managed by the
California State Treasurer. Its investments are short-term and follow the investment
requirements of the State. As of June 30, 2007, the average maturity of the LAIF
10
investments was 167 days. The State Treasurer does not contract for a credit rating to
be assessed for LAIF. California state code section 16429.3 specifically excludes LAIF
deposits from being transferred, loaned, impounded or seized by any state agency or
official. The default credit risk of LAIF is minimal.
Concentration Credit Risk. Concentration credit risk is the heightened risk of
potential loss when investments are concentrated in one issuer. The California state
code does not identify a specific percentage that indicates when concentration risk is
present for any one issuer. The state code does, however, require that total
investments in medium-term corporate notes of all issuers not exceed 30% of the
portfolio. As of June 30, 2007, approximately 10% of the City's total portfolio
investments were in medium-term corporate notes.
For concentration of investments in any one issuer, the City's Investment Policy
requires that no more than 5% of investments in corporate notes be in any one issuer.
There is no similar requirement in either the state code or the City's Investment Policy
for U. S. agencies. As of June 30, 2007, no investments in any one corporate issuer
exceeded 5% of total portfolio investments.
Interest Rate Risk. Interest rate risk is the risk that investments will lose market value
because of increases in market interest rates. A rise in market interest rates will cause
the market value of investments made earlier at lower interest rates to lose value. The
reverse will cause a gain in market value. As of June 30, 2007, the portfolio had a .6%
loss in market value.
The City's investment policy has adopted two means of limiting its exposure to market
value losses caused by rising market interest rates: (1) Limiting total portfolio
investments to a maximum modified duration of 2.2, and (2) requiring maturing
investments within one year be equal to an amount that is not less than 2/3 of the
current operating budget ($171,800,000). As of June 30, 2007, the modified duration of
the portfolio was 1.686, within the required maximum of 2.2. Investments maturing
within one year were $167,046,000, exceeding the required minimum of $115,000,000.
The City's exposure to interest rate risk is within acceptable limits.
Event Risk. Event risk is the chance that something unexpected will impede the ability
of an issuer of a security to meet its obligations. These types of risks are usually short
in duration, but can impair the city's ability to communicate with or use banking
services. Such an event could cause a delay in collecting securities which have
matured.
11
APPENDIX B: PORTFOLIO ACTIVITIES FOR FISCAL YEAR ENDED JUNE 30, 2007
The City's portfolio balance increased 7.7% from $516.9 million to $556.5 million in
fiscal year 2006-07. The increase of $39.6 million does little to show the volume of
cash that flows in and out of the portfolio in the course of one fiscal year. The following
table illustrates that the City Treasurer managed over two billion dollars of cash inflows
and cash outflows which prompted investment decisions during fiscal year 2006-07.
Cash Flows:
Bond Maturities $ 97,268,000
Bond Calls 16,000,000
Bond Sales
LAI F Withdrawals 152,121,000
Sweep Withdrawals 724,427,000
Interest Income 21,758,000
Bond Purchases 135,498,000
LAIF Investments 171,597,000
Sweep Investments 722,321,000
Cash Investments (net) (307.000)
Total $2.040.683.000
12
ANNUAL REPORT OFINVESTMENTSFiscal Year Ended 6/30/07(FY 06-07)CITY TREASURER’S
U.S.MARKET REVIEWFiscal Year Ended 6/30/07
Federal Funds Target RateFY 06-075.25%5.25%5.25%3.00%3.50%4.00%4.50%5.00%5.50%06/30/0612/13/0606/29/07
SHORT-TERM INTEREST RATESU.S. Treasury InstrumentsFiscal Year 2006 - 20073.003.504.004.505.005.50JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUNFive YearTwo Year6 MonthPercentJUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN4.90 4.69 4.58 4.56 4.44 4.69 4.80 4.52 4.53 4.51 4.85 4.894.95 4.78 4.68 4.69 4.61 4.81 4.92 4.64 4.57 4.59 4.91 4.845.14 5.10 5.00 5.11 5.08 5.08 5.14 5.11 5.06 4.99 4.95 4.97
YIELD CURVE7/01/06, 12/31/06, 6/30/07Market Rates11.522.533.544.555.563 Mth2 Yr5 Yr10 Yr07/01/200612/31/200606/30/20073 Mth 2 Yr 5 Yr 10 Yr4.976 5.150 5.093 5.136 5.006 4.808 4.692 4.7024.864 4.841 4.889 4.989
PORTFOLIO REVIEW
INVESTMENT PORTFOLIODollar Amount of Assets (Fiscal Year End)$430.8$472.6$512.0$556.5$516.9$100.0$150.0$200.0$250.0$300.0$350.0$400.0$450.0$500.0$550.0$600.0FY02-03FY03-04FY04-05FY05-06FY06-07Millions
CASH & INVESTMENTS RELATIVE TOTOTAL ASSETS OF CITY AND ITS AGENCIES*$428$468$511$503$557$560$0$200$400$600$800$1,000$1,200$1,400$1,600$1,800$2,000$2,200FY02-03 FY03-04 FY04-05 FY05-06 FY06-07 FY07-08Cash/InvestmentsTotal Assets$899$899$992$992$1,122$1,122$1,548$1,548$2,040$2,040Estimate*Source: Comprehensive Annual Financial Report. Note: Total Assets of City and Its Agencies is an estimated amount for FYS 07 - 08$ Millions$1,415
Major Capital Project ExpendituresFY 2006-2007•Encina Water Pollution Control5,446,000•Recycled Water Projects 2,857,000•StreetsCFD #3 Melrose/Palomar 5,296,000 Rancho Santa Fe Road 2,687,000Poinsettia Road 4,309,000Pavement Management 3,305,000 Traffic Signals and Other 6,130,000 •Parks Golf Course22,023,000Pine Avenue 1,057,000Other1,900,000•Storm, Sewer & Water Distrib5,875,000
SOURCE OF POOL ASSETS(Dollar Amounts in Millions)6/30/06$67.8$38.4$48.6$ 229.6GeneralSpecial & OtherCapital ProjectsEnterpriseAgency/InternalTotal Investments - $515.9 Million6/30/07$ 75.9$ 39.6$ 146.2$ 48.7$246.7Total Investments - $557.1 Million$131.5GeneralSpecial & OtherCapitalEnterpriseAgency & Internal GeneralSpecial & OtherCapitalEnterpriseAgency & Internal
ANNUITY STREAM FROM TREASURY(Cash Interest Revenue)For Fiscal Years Indicated $18.37$15.23$15.68$21.76$17.84$0.00$3.00$6.00$9.00$12.00$15.00$18.00$21.00FY02-03 FY03-04 FY04-05 FY05-06 FY06-07Millions
FY 07-08 PREDICTIONS• Short-term interest rates will decrease slightly• Yield curve will steepen slightly • Average yield of portfolio for FY will be in 4.25% range (from 4.37%)• Investment portfolio will increase to $560 million
To Access Monthly and Annual Investment Reports• Go to: www.ci.carlsbad.ca.us• Click on: City Hall• Click On: City Treasurer
QuestionsMac McSherryCity Treasurer