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: Mayor and City Council Finance Department DATE: December 16, 2013 SUBJECT: Receive and File - Investment Report for the Month of October 2013 Exhibits: (A) Distribution of Investments (B) Monthly Investment Transactions (C) Certificates of Deposit (D) Graph of October 31, Rates Attached is the Investment Report for the month of October 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 October Exhibit C lists the certificates of deposit. Exhibit D is a graph of rates on October 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 December 16, 2013 Investment Report for October 2013 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 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 bill. In periods of decreasing interest rates, the City of Clovis portfolio return may be greater than the annualized 90 day bill. The current 90 day bill rate (annualized) is.05%. The rate of return for the City of Clovis portfolio is.41 %. The goal for the City of Clovis investment return is 120% of the 90 day bill rate. The current rate of return is 820% of the 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 October 2013 the average investment life of the City's investment portfolio is.82 years. Current Investment Environment and Philosophy During the month of October 2013 the Federal Reserve did not adjust the federal funds rate and it remained at %. On October 31, 2013 the 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 No government securities were purchased. No government securities matured. $730,000 of certificates of deposit were purchased No certificates of deposit matured. Market Environment During October the federal funds rate was maintained at 0% -.25%.

3 Mayor and City Council December 16, 2013 Investment Report for October 2013 Page 3 of 3 On October 31 the yield curve was flat for shorter term treasuries (three to six months) and started rising beyond two year treasuries. See Exhibit D, Graph of Rates on October 31, Prepared by: Bill ~asarez, Dep~ty Finan~e Director.. \ f L Submitted by: Jamie Hughson, Finance Directo/r(:J=fJ /! (.

4 CITY OF CLOVIS DISTRIBUTION OF INVESTMENTS Exhibit A AS OF OCTOBER 31, 2013 GOV'T SECURITIES DAYS TO STATED MATURITY NET BOOK MARKET YIELD TO INTEREST INVEST MATURITY FROM COST VALUE VALUE* MATURITY RATE DATE DATE 10/31 /2013 FNMA 3,000,000 3,000,000 3,000, % 0.500% 03/28/13 03/28/ FNMA 3,000,000 3,000,000 2,993, % 0.500% 04/29/1 3 04/29/ FNMA 2,992,962 2,992,962 2,993, % 0.500% 06/06/13 06/06/ FNMA 2,997,636 2,997,636 2,997, % 0.570% 06/20/13 06/20/ FFCB 3,000,000 3,000,000 3,009, % 0.940% 07/15/13 07/15/ FHLMC 5,000,000 5,000,000 5,014, % 0.800% 08/15/13 08/15/ FNMA 3,000,000 3,000,000 3,006, % 1.050% 08/26/13 08/26/ FNMA 3,000,000 3,000,000 3,008, % 1.125% 09/27/13 09/27/ SECURITIES TOTAL $ 25,990,598 $ 25,990,598 $ 26,023,680 LAIF $ 49,708,478 $ 49,708,478 MONEY MARKET $ 9,669,390 $ 9,669,390 PREMIUM-IOC $ 6,000,667 $ 6,000,667 TOTAL CD'S $ 3,645,000 $ 3,636,586 TOTAL INVESTMENTS $ 95,014,1 33 $ 95,038,801 * Market values for securities obtained from BNY Western Trust Company H:ITREASREP\ inv DI STPG1 12/6/2013 2:04 PM Exhibit A

5 ,..- Exhibit B CITY OF CLOVIS MONTHLY INVESTMENT TRANSACTIONS FOR THE MONTH OF OCTOBER 2013 Activity Maturity Institution Description Activity Amount Market Value Rate Date Date Union Bank Premium IOC Transfer Out 1,002,066 10/08/1 3 G E Capital Retail Bank CD Purchase 245, % 10/11/13 10/1 1/16 Comenity Capital Bank CD Purchase 245, % 10/15/13 10/17/16 LAIF LAIF Interest-net 32, /15/13 Union Bank Premium IOC Transfer Out 1,000,000 10/16/13 Union Bank Premium IOC Transfer Out 500,000 10/18/13 CIT Bank CD Purchase 240, % 10/30/1 3 10/31/16 Union Bank Premium IOC Transfer Out 500,000 10/30/13 Union Bank Premium IOC Interest-net /31/13 Rabobank Money Market Interest-net 2,162 10/31/13 PORTFOLIO DATA Current Month {10/13} Book Market CD'S $ 3, 645,000 $ 3,636,586 Gov'! Securities* 25,990,598 26,023,680 LAIF 49,708,478 49,708,478 Money Market 9,669,390 9,669,390 Premium IOC 6,000,667 6,000,667 TOTAL $ 95,014,133 $ 95,038,801 One Month Previous {09/13} Three Months Previous {07/13} Book Market Book Market CD'S $ 2,915,000 $ 2,907,322 CD'S $ 2,915,000 $ 2,907,318 Gov't Securities* 25,990,598 25,977,180 Gov'! Securities* 17,990,598 17,962,983 LAIF 49,676,345 49,676,345 LAIF 49,676,345 49,676,345 Money Market 9,667,228 9,667,228 Money Market 9,662,994 9,662,994 Premium IOC 9,002,066 9,002,066 Premium IOC 15,001,427 15,001,427 TOTAL $ 97,251,237 $ 97,230,141 TOTAL $ 95,246,364 $ 95,211,067 Six Months Previous {04/13} One Year Previous {10/12} Book Market Book Market CD'S $ 1,935,000 $ 1,937,981 Gov't Securities* 21,000, ,023, Gov't Securities $ 21,000,000 $ 21,038,640 LAIF 49,646,200 49,646,200 LAIF 49,571,439 49,571,439 Money Market 9,656,683 9,656,683 Money Market 9,640,750 9,640,750 Premium IOC 7,000,563 7,000,563 Premium IOC 7,500,728 7,500,728 TOTAL $ 89,238,446 $ 89,264,925 TOTAL $ 87,712,917 $ 87,751,557 *Adjusted Quarterly for Premium/Discount Amortization H:\TREASREP\ \101 3 Inv page 1 12/ :04 PM Exhibit B

6 CITY OF CLOVIS CERTIFICATES OF DEPOSIT Exhibit C AS OF OCTOBER 31, 2013 MARKET INTEREST INVEST MATURITY MATURITY FROM Negotiable CDs COST PRICE RATE DATE DATE 10/31113 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 $ 3,396,586 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 $ 3,636,586 H:ITREASREP\ ;nv DISTPG :04 PM Exhibit C

7 CITY OF CLOVIS FINANCE DEPARTMENT OCTOBER 31, 2013 TREASURY RA TES Exhibit D Rates as of October 31, month bill 6 month bill 2 Yr 3 Yr 5 Yr 10 Yr TREASURY RATES ON OCTOBER 31, en w 2.5 I- 2 ~ I- 1.5 en w 0:: 1 w I- 0.5 z 0 3 month bill 6 month bill 2 Yr 3 Yr 5 Yr 10Yr TREASURIES The above graph is flat for 0-6 month issues. Longer term issues are yielding a higher interest rate than shorter term issues. We will continue to invest in shorter term callables (3 years or less maturity) government securities until the market stabilizes and we are able to purchase higher yielding fixed rate securities. Exhibit D