HomeMy WebLinkAbout19F - QRTLY RPT OF INVESTMENTSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
NOVEMBER 15, 2016
TITLE:
QUARTERLY REPORT OF INVESTMENTS
AS OF SEPTEMBER 30, 2016
(STRATEGIC PLAN NO. 4, 1D)
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
_'•:• 51
❑ As Recommended
❑ As Amended
❑ Ordinance on 14' Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
a14:84UIPi1-11:11V
Receive and file Quarterly Report of Investments as of September 30, 2016,
DISCUSSION
Since fiscal year 2013-14 the Finance Management Services Agency Treasury division
(Treasury Division) has evaluated the process in managing the City's Cash Flow and related
Investment Strategy. As a result of the evaluation, Treasury Division established an Investment
Committee (Committee) comprised of individuals from Finance Management, Budget and
Accounting. The Committee, which meets on a monthly basis, has implemented changes in the
investment strategy based on a review of market conditions; analysis of the portfolio; and the
Cash Flow needs of the City.
As a result of implementing recommendations from the Committee, the Treasury Division
management of the portfolio has resulted in an increase for both its Portfolio earnings and rate of
return. Below is a three year analysis on the Investment Portfolio earnings and the
corresponding portfolio rate of return (see below) for the period fiscal year 2013-14 through fiscal
year 2015-16.
19F-1
Quarterly Report of Investments
November 15, 2016
Page 2
The illustration depicts the City's Investment Portfolio earnings for fiscal year 2015-16 have
increased 133% or approximately $1.9 million since fiscal year 2013-14. The increase is largely
attributable to recommendations discussed at Committee meetings specifically a change in
investment strategy and implementation of process improvements.
The following graph represents three year comparison of annual effective rate of return.
In addition, the 124% increase in the rate of return from fiscal year 2013-14 to 2015-16 reflects
the Treasury Division prudent management of the portfolio by implementing an investment
strategy of balancing duration and interest rate risk without increasing loss of principal.
In 1995, the State of California enacted legislation revising the reporting requirements relative to
investment of funds by governmental agencies. Specifically AB 2853 and Government Code
Section 53646 makes it permissible and not mandatory that a quarterly report be submitted
within 30 days following the end of the quarter covered by the report. The legislation specifies
that this quarterly report contain the seven major elements listed below:
1. Type of investments,
2. Date of maturity,
3. Par and dollar amounts invested in each security,
4. Weighted average maturity of the investments,
5. Market value as of the date of the report,
6. Source of the market value information, and
7. Any funds, investments or programs, including loans,
under the management of contracted parties.
The attached Treasurer's Report (Exhibit 1) accurately reflects all pooled investments held on
behalf of the City as of September 30, 2016.
19F-2
Investment
PartfbLiao Rate of
Return
a.oao
E
o.Boo
o.asca
`s
0.60OV----
0.203,0%
_—______—___--_
_— __.. _.
0..0I09e.
FY 1.3-14
FY 14-15
FY 15-.:1.6..
In addition, the 124% increase in the rate of return from fiscal year 2013-14 to 2015-16 reflects
the Treasury Division prudent management of the portfolio by implementing an investment
strategy of balancing duration and interest rate risk without increasing loss of principal.
In 1995, the State of California enacted legislation revising the reporting requirements relative to
investment of funds by governmental agencies. Specifically AB 2853 and Government Code
Section 53646 makes it permissible and not mandatory that a quarterly report be submitted
within 30 days following the end of the quarter covered by the report. The legislation specifies
that this quarterly report contain the seven major elements listed below:
1. Type of investments,
2. Date of maturity,
3. Par and dollar amounts invested in each security,
4. Weighted average maturity of the investments,
5. Market value as of the date of the report,
6. Source of the market value information, and
7. Any funds, investments or programs, including loans,
under the management of contracted parties.
The attached Treasurer's Report (Exhibit 1) accurately reflects all pooled investments held on
behalf of the City as of September 30, 2016.
19F-2
Quarterly Report of Investments
November 15, 2016
Page 3
The following table represents percentage policy limits set by the City's Investment Policy and
State Law and respective types, amounts and percentages, as of September 30, 2016.
Type of Investment
in $
in %
COSA
Policy
Limits
State Law
Limits
Certificate of Deposit (CD)
$9,893,622.95
3.31%
30%
30%
Federal Farm Credit Bank (FFCB)
$59,492,550.00
19.90%
None
None
Federal Home Loan Bank (FHLB)
$59,188,033.00
19.80%
None
None
Federal Home Loan Mortgage Corp. (FHLMC)
$45,442,775.00
15.20%
None
None
Federal National Mortgage Association (FNMA)
$63,640,920.00
21.29%
None
None
Local Agency Investment Fund (LAIF)
$61,251,776.52
20.49%
None
None
Sub -Total
$298,909,677.47
100.00%
None
None
Cash
$22,845,998.72
Total
$321,755,676.19
Restricted Cash in $
Restricted Cash $15,419,309.24
Total $15,419,309.24
t Restricted cash is held by Trustee, Bank of New York Mellon and is segregated from cash used for daily
operations.
The following graph represents percentages within the respective investment types, as of
September 30, 2016.
City of Santa Ana
Investment Portfolio Asset Allocation
September 30, 2016
FNM
21.29
Lt.]
is.2b%
a Certitkate of Deposit (Co) ■ Federal Farm Credit Bank (FFCB)
a Federal Home Loan Bank (PHLS) n Federal Home loan Mortgage Corp. (FHLMC)
■ Federal National Mortgage Association (FNMA) ■ Local Agency Investment Fund (LAIF)
19F-3
Quarterly Report of Investments
November 15, 2016
Page 4
STRATEGIC PLAN ALIGNMENT
Approval of this item allows the City to meet Goal #4 - City Financial Stability, Objective #1
(Maintain a stable, efficient and transparent financial environment), Strategy D (Develop a fiscal
health analysis tool that informs a department of its financial position in order to assist in its
decision making process).
FISCAL IMPACT
There is no fiscal impact associated with this action.
Francisco Gutierrez
Executive Director
Finance and Management Services Agency
SV/rp
Exhibit: 1. Treasurer's Report
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