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HomeMy WebLinkAbout2015-01-13; City Council; 21817; Report on City Investments as of November 30, 2014CAJRr CITY OF CARLSBAD - AGENDA BILL AB# 21,817 REPORT ON CITY INVESTMENTS DEPT. HEAD MTG. t 113115 AS OF NOVEMBER 30, 2014 CITY ATTY. DEPT. 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 November 30, 2014 is summarized below. Pooled Investment Portfolio (Cash and Securities) Current Month Prior Month Par Value 651,558,020 650,866,805 Cost of Investments 655,820,752 655,124,992 Amortized Cost (1) 652,823,503 652,217,735 Market Value (2) 1 654,410,556 653,089,473 (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 11130114. The equity portion of the various funds in the total portfolio is summarized in the graph below. Fund balances are restricted for various purposes. See Exhibit 8 for a more detailed breakdown. FUND EQ1 ITY IN POO1, E1) 1N%ESTNIENTS (Dollar Amounts in Millions) Special Revenue (;eneral $1 5 $ 46 Internal Service $39 Capital Projects Agency/Trust 514.5 $ 297 Enterprise 5175 'local Treasurer's Invest menI Port lblio at Amortized Cost November30, 2014 S653 million DEPARTMENT CONTACT: Nancy Sullivan (760) 602-2473 Nancy. Sullivan@carisbadca.gov FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC ❑ DENIED ❑ CONTINUED TO DATE UNKNOWN ❑ CONTINUED ❑ RETURNED TO STAFF ❑ WITHDRAWN ❑ OTHER - SEE MINUTES ❑ AMENDED 13 REPORT RECEIVED 0 PAGE 2 OF AB REPORT ON CITY INVESTMENTS AS OF NOVEMBER 30 2014 Pooled Investment Interest Income Current Prior Current Month Month FYT❑ Month FYTD Income Cash Income Fiscal Year -to -Date * 3,162,486 2,700,493 461,993 "The cash income received is adjusted for any accrued interest purchased. Pooled Investment Performance/Measurement Average Life (Years) Average Yield To Maturity Modified Duration September 2014 2.03 1.031 % 1.971 October 2014 2.06 1,053% 2.001 November 2014 2.02 1.056% 1.962 All pooled investments have been made in accordance with the city's Investment Policy adopted January 2, 1985 and last revised November 19, 2013. 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 9 for details. 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. Market Yield Curve 5. Cumulative Cash Income Graph 6. Second Quarter Transactions 7. Detailed Investment Report 8. Fund Equity in Pooled Investments 9. 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Q T Q 1- W¢ Q¢ D m❑ 2z} N❑ Q u j w w LL 1.i 9 F- m o m V` LL ?: m E LL Q w 00 0❑ b CL �c�V VcaUt�❑U❑❑UU❑❑❑V V❑❑UVV N N N m m M M m M m M M Mlqr IT'r r r r r z o(D o 0 0 o 0 0 0 o a o a a o Q o v a a w N N N N N N NI �V Nl �V N L`1 N N N N N N N N SV ry uj n v ID cD m c") a (n ao 0 v w 07 v-V 00 O m Q N N N N _o r N r I` w M m m o a r LU r a Z z Z z ❑ ❑ 0� a qw Q w o a D w z U Q ❑ z F- LLI Z m Z h CL z J m< v N 2 Z U ❑ u. LL o LULI o L- w u u❑ ¢¢aaca w r 3: a a ❑ 0----- w❑ m z a a < a V � ❑ J J ..r w ❑❑❑❑❑❑❑❑ J5 EXHIBIT 8 CITY OF CARLSBA❑ Fund Equity in Pooled Investments AS OF NOVEMBER 30, 2014 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 Storm Water Golf Course Total Internal Service Agency Funds Trust Funds Total General Ledger Balance ** Reconciling Adjustments (1) Total Treasurer's Investment Portfolio at Amortized Cost 52,481, 308 22,483,470 31,711,372 5,322,832 4,738,115 6,070,038 84,951,E 82 86,825,952 2,749,550 110,525,179 52,293,697 7,330.013 4,808,375 47,692 81,593,853 46,161, 868 0 297,334,319 175,004,956 38,830,172 14,587,040 133,136 653,645,344 (821,841) 652,823,503 (1) 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 12/08/14 iz EXHIBIT 9 CITY OF CARLSBAD INVESTMENT PORTFOLIO As of NOVEMBER 30, 2014 CORPORATE NOTE AND COMMERCIAL PAPER RATINGS Corporate Note Investments Meeting the Current Investment Policy: (Ratings must be AA or better by two of the three: Moody's S&P or Fitch) Moody's S&P Fitch CHEVRON AA1 AA NR COCA COLA AA3 AA A+ COLLATE-PALMOLIVE AA3 AA- AA - GENERAL ELECTRIC COMPANY AA3 AA+ NR GOOGLE INC AA2 AA NR HSBC BANK USA Al AA- AA - IBM CORP AA3 AA- A+ JOHNSON & JOHNSON AAA AAA AAA MASS MUTUAL GLOBAL AA2 AA+ AA+ MET LIFE GLOBAL AA3 AA- AA - NEW YORK LIFE AAA AA+ AAA PROCTER & GAMBLE AA3 AA- NR ROYAL BANK OF CANADA AA3 AA- AA SHELL INTERNATIONAL AA1 AA AA TOYOTA AA3 AA- A WAL-MART AA2 AA AA WESTPAC BANKING CORP AA2 AA- AA - Commercial Paper Investments Meeting the Current Investment Policy: (Ratings must be A1/P1 or better by two of the three: Moody's, S&P or Fitch) (Ratings of other debt must be AA or better by two of the three: Moody's, S&P or Fitch) NONE Investments with Subsequent Changes in Credit Rating Latest Carrying Market Moody's S&P Fitch Maturity Bate Value Value BARCLAYS BANK A2 A NR 12/15/2015 2,000,000 2,016,680 BERKSHIRE HATHAWAY A2 AA+ A+ 5/15/2018 20,930,722 21,125,736 GENERAL ELECTRIC Al AA+ NR 05/09/2016 15,411.688 15.619,712 MERCK Al AA A+ 06/30/2015 5,077,443 5,107,400 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. If is the intent of the City Treasurer to hold these assets in the portfolio until maturity unless events indicate they should be sold. EXHIBIT 10 CITY OF CARLSBAD INVESTMENT PORTFOLIO AS OF NOVEMBER 30, 2014 WEIGHTINGS FOR CORPORATE AND FEDERAL AGENCY ISSUERS PERCENTAGE WEIGHTINGS BY CORPORATE NOTE ISSUER Investment Cost Percent of Portfolio* BARCLAYS BANK 2,000,000,00 0.30% BERKSHIRE HATHAWAY 21,180,459.14 3.23% CHEVRON 7,007,483,80 1,07% COCA COLA CO 7,624,962.52 1.16% COLGATE-PALMOLIVE 1,485,185.00 0.23% GENERAL ELECTRIC CAP 15,438,378.05 2.35% GENERAL ELECTRIC COMPANY 8,032,665.00 1,22% GOOGLE 1,050,940.00 0,16% HSBC BANK USA 10,000,000.00 1.52% IBM CORP 8,581,305.00 1.31% JOHNSON & JOHNSON 2,104,120.00 0.32% MASS MUTUAL 1.024,175,57 0,16% MERCK & CO 5,498,750.00 0.84% MET LIFE GLOBAL FUND 14,090,335.81 2.15% NEW YORK LIFE 8,691,145.24 1.33% PROTER & GAMBLE 13,392,464.17 2.04% ROYAL BANK OF CANADA 2,038,220.00 0.31 % SHELL INTERNATIONAL FIN 5,384,350.00 0.82% TOYOTA 8,005,285.00 1.22% WAL-MART 12,984.244,55 1.98% WESTPAC BANKING CORP 5,000,000.00 0.76% PERCENTAGE WEIGHTINGS BY FEDERAL AGENCY ISSUER Investment Cost Percent of Portfolio" FAMCA 15,016,370.00 2.29% FEDERAL FARM CREDIT BANK 48,654,196.93 7,42% FEDERAL HOME LOAN BANK 122,870,760.55 18.74% FEDERAL HOME LOAN MORTGAGE CORP 58,897,648.50 8.98% FEDERAL NATIONAL MORTGAGE ASSOC 88,803,126.31 13.54% U.S.TREASURY 25,333,950.17 3.86% Total Portfolio $655,820.752.18 " No more than 5% may be invested with a single corporate issuer. "There are no percentage limits on federal agency issuers.