CITY OF CLOVIS REPORT TO THE CITY COUNCIL

Transcription

1 AGENDA ITEM NO: CC-D-1 City Manager: ~ CITY OF CLOVIS REPORT TO THE CITY COUNCIL TO: FROM: DATE: Mayor and City Council Finance Department March 17, 2014 SUBJECT: Receive and File - Investment Report for the Month of January 2014 Exhibits: (A) Distribution of Investments (8) Monthly Investment Transactions (C) Certificates of Deposit (D) Graph of January 31, 2014 Treasury Rates Attached is the Investment Report for the month of January Shown in Exhibit A is the distribution of investments which lists all the individual securities owned by the City with the book and market values. Book value is the actual price paid for the investment. Market value is the amount that the investment is worth if sold in the open market. The market value (which fluctuates daily) that is used in the report is as of the last working day of the month. Exhibit B reflects the monthly investment transactions for the month of January Exhibit C lists the certificates of deposit. Exhibit D is a graph of Treasury rates on January 31, The investment of the City's funds is performed in accordance with the adopted Investment Policy. Funds are invested with the following objectives in mind: 1. Assets are invested in a manner consistent with the safeguards and diversity that a prudent investor would adhere to. 2. The portfolio is invested in a manner consistent with the primary emphasis on preservation of the principal, while attaining a high rate of return consistent with this guideline. Trading of securities for the sole purpose of realizing trading profits is prohibited. 3. Sufficient liquidity is maintained to provide a source for anticipated financial obligations as they become due.

2 Mayor and City Council March 17, 2014 Investment Report for January 2014 Page 2 of 3 4. Investments may be made, consistent with the Investment Policy Guidelines, in fixed income securities maturing in three years or less and can be extended to five years with the City Manager's approval. The Finance Department invests the City's assets with an expectation of achieving a total rate of return at a level that exceeds the annualized rate of return on short-term government guaranteed or insured obligations (90 day Treasury bills) and to assure that the principal is preserved with minimal risk of depreciation or loss. In periods of rising interest rates the City of Clovis portfolio return may be less than that of the annualized 90 day Treasury bill. In periods of decreasing interest rates, the City of Clovis portfolio return may be greater than the annualized 90 day Treasury bill. The current 90 day Treasury bill rate (annualized) is 0.05%. The rate of return for the City of Clovis portfolio is 0.42%. The goal for the City of Clovis investment return is 120% of the 90 day Treasury bill rate. The current rate of return is 831 % of the Treasury bill rate. In accordance with the Investment Policy the investment period on each investment does not exceed three years and can be extended to five years with the City Manager's approval. As of January 2014 the average investment life of the City's investment portfolio is 0.85 years. Current Investment Environment and Philosophy During the month of January 2014 the Federal Reserve did not adjust the federal funds rate and it remained at %. On January 31, 2014 the Treasury yield curve was flat for three month treasuries through six month treasuries. As the holding period extended out beyond six months higher yields are realized. Certificates of Deposit (CD's) The city purchases both negotiable and non-negotiable Certificates of Deposit (CD's). Although negotiable CD's can be traded, it is the City's policy to buy and hold all CD's. Negotiable CD's are held by U.S. Bank, a third party custodian. The non-negotiable CD is held in the city's safe. Purchases and Maturities $3 million of government securities were purchased. No government securities matured or were called. No certificates of deposit were purchased. No certificates of deposit matured. Market Environment During January the federal funds rate was maintained at 0% -.25%.

3 Mayor and City Council March 17, 2014 Investment Report for January 2014 Page 3 of 3 On January 31 the yield curve was flat for shorter term treasuries (through six months) and higher beyond six month treasuries. See Exhibit C, Graph of Treasury Rates on January 31, Prepared by: Bill Casarez, Deputy Finance Director Submitted by: Jamie Hughson, Finance Director ~..._ ~ ~

4 CITY OF CLOVIS DISTRIBUTION OF INVESTMENTS Exhibit A AS OF JANUARY 31, 2014 GOV'T SECURITIES DAYS TO STATED MATURITY NET BOOK MARKET YIELD TO INTEREST INVEST MATURITY FROM COST VALUE VALUE* MATURITY RATE DATE DATE 1/31/2014 FNMA 3,000,000 3,000,000 3,002, % 0.500% 03/28/13 03/ FNMA 3,000,000 3,000,000 2,996, % 0.500% 04/29/13 04/29/ FNMA 2,992,962 2,992,962 2,996, % 0.500% FNMA 2,997,636 2,997,636 3,000, % 0.570% /20/ FFCB 3,000,000 3,000,000 3,006, % 0.940% 07/15/13 07/15/ FHLMC 5,000,000 5,000,000 5,011, % 0.800% 08/15/13 08/15/ FNMA 3,000,000 3,000,000 3,001, % 1.050% 08/26/13 08/26/ FNMA 3,000,000 3,000,000 3,003, % 1.125% 09/27/13 09/27/ FHLB 3,000,000 3,000,000 3,004, % 1.000% 01/23/14 01/23/ SECURITIES TOTAL $ 28,990,598 $ 28,990,598 $ 29,024,330 LAIF $ 49,740,507 $ 49,740,507 MONEY MARKET $ 9,675,808 $ 9,675,808 PREMIUM-IOC $ 3,000,330 $ 3,000,330 TOTAL CD'S $ 3,645,000 $ 3,646,532 TOTAL INVESTMENTS $ 95,052,243 $ 95,087,507 * Market values for securities obtained from BNY Western Trust Company H:\TREASREP\ \011 4 Inv DISTPG1 3110!2014 4:08 PM Exhibit A

5 . Exhibit B CITY OF CLOVIS MONTHLY INVESTMENT TRANSACTIONS FOR THE MONTH OF JANUARY 2014 Activity Maturity Institution Description Actlvlty Amount Market Value Rate Date Date Union Bank Premium IOC Transfer out 2,000,899 01/27/14 Union Bank Premium IOC Interest-net /31/14 Rabobank Money Market Interest-net 2,166 01/31/14 FHLB Govt Security Purchase 3,000,000 3,000, % 01/23/14 01/23/17 LAIF Interest 32,029 01/15/14 PORTFOLIO DATA Current Month (01/1~1 Book Market CD'S $ 3,645,000 $ 3,646,532 Gov't Securities 28,990,598 29,024,330 LAIF 49,740,507 49,740,507 Money Market 9,675,808 9,675,808 Premium IOC 31000,330 3,000,330 TOTAL $ 95,052,243 $ 95,087,507 One Month Previous ( Three Months P[evlous 110/131 Book Market Book Market CD'S $ 3,645,000 $ 3,640,883 CD'S $ 3,645,000 $ 3,636,586 Gov't Securities 25,990,598 25,993,130 Gov't Securities 25,990,598 26,023,680 LAIF 49,708,478 49,708,478 LAIF 49,708,478 49,708,478 Money Market 9,673,642 9,673,642 Money Market 9,669,390 9,669,390 Premium IOC 5, ,000,899 Premium IOC 6,000,667 6,000,667 TOTAL $ 94,018,617 $ 94,017,032 TOTAL $ 95,014,133 $ 95,038,801 Six Months Previous 127/13) One Year Previous (Oj/13) Book Market Book Market CD'S $ 2,915,000 s 2,907,318 CD'S $ 1,200,000 $ 1,200,828 Gov't Securities 17,990, ,962, Gov't Securities 18,000,000 18,030,949 LAIF 49,676,345 49,676,345 LAIF 49,611,653 49,611,653 Money Market 9,662,994 9,662,994 Money Market 9,649,704 9,649,704 Premium IOC ,427 15, Premium IOC 3,000,509 3,000,509 TOTAL $ 95,246,364 $ 95,211,067 TOTAL $ 81,461,866 s 81,493,643 *Adjusted Quarterly for Premium/Discount Amortization H!ITREASREP171MIC\01141nv _, 3/IMOl4 :oepm Exhibit B

6 CITY OF CLOVIS CERTIFICATES OF DEPOSIT ExhibitC AS OF JANUARY 31, 2014 MARKET INTEREST INVEST MATURITY MATURITY FROM Negotiable CDs COST PRICE RATE DATE DATE 01/31/14 BMW BK NORTH AMER SALT LAKE UTAH $ 240,000 $ 240, % 11/16/12 05/18/ GE CAP BK INK RETAIL CTF 240, , % 11/09/12 11/09/ GOLDMAN SACHS BK USA 240, , % 11/14/12 11/16/ SALLIE MAE BK MURRAY UTAH 240, , % 11/14/12 11/16/ FIRST FARMERS BK & TRUST CO 245, , % 02/22/13 02/22/ ASHEVILLE SAVINGS BANK 245, , % 02/28/13 02/29/ PINNACLE BK OF SOUTH CAROLINA 245, , % 02/28/13 02/29/ DISCOVER BK GREENWOOD DEL CTF 245, , % 05/08/13 05/08/ AMX CENTURION BK CTF DEP 245, , % 05/09/13 05/09/ MEDALLION BK 245, , % 06/28/13 06/28/ ALLYBANK (GMATBK) 245, , % 07/17/13 07/18/ GE CAPITAL RETAIL BANK 245, , % 10/11/13 10/11/ COMENITY CAPITAL BK SALT LAKE CIT 245, , % 10/15/13 10/17/ CIT BANK 240, , % 10/30/13 10/31/ Negotiable CD TOT AL $ 3,405,000 $ 3,406,532 Non - Negotiable CDs UNITED SECURITY BANK 240, , % 12/18/12 12/18/ Non - Negotiable CD TOTAL $ 240,000 $ 240,000 CD TOTAL $ 3,645,000 $ 3,646,532 H~TREASREPl71~14\0110w DISTPG2 3/IOl2il14 4:09 PM Exhibit C

7 Exhibit 0 FINANCE DEPARTMENT JANUARY 31, 2014 TREASURY RATES Treasury Rates as of January 31, month Treasury bill 6 month Treasury bill 2 Yr Treasury note 3 Yr Treasury note 5 Yr Treasury note 1 O Yr Treasury note TREASURY RATES ON JANUARY 31, 2014 ti> w 3 ~ 2.5 I- ti> w 2 0:: w 1.5 I- z month 6 month 2 Yr 3 Yr 5 Yr Treasury Treasury Treasury Treasury Treasury bill bill note note note 10 Yr Treasury note TREASURIES As indicated in the above graph, both 3 month and 6 month treasuries are flat. Longer term treasuries are yielding a higher interest rate than shorter term treasuries. Exhibit D