Budget ReportADMINISTRATIVE SERVICES DEPARTMENT
CUPERTINO
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
(408) 777-3220 • FAX (408} 777-3109
SUMMARY
Agenda Item No. 7
SUBJECT AND ISSUE
Meeting Date: January 15, 2008
Accept the Treasurer's Investment and Budget Report for November 2007, including a
status report on General Fund Revenue and Expenditures.
BACKGROUND
INVESTMENTS
The market value and cost of the City's portfolio totaled $56.7 million at November 30,
2007. The portfolio yielded 4.68% in November down from 4.82% the previous month but
still up from 4.54% a year ago. The Local Agency Investment Fund (LAIF) yielded 4.96%
for November, down from 5.14% for the previous month and down from 5.13% a year ago.
During the month, a $1 million Federal Home Loan Bank note was called at 5%, and re-
invested in a $1 million Federal Farm Credit note at 4.65%. Certificates of deposit totaling
$1 million were purchased at 4.88%. The City's cash & investment balance increased by
$250,000 due to property tax receipts.
As mentioned in last month's report, because of the questions surrounding asset-backed
commercial paper holdings and structured investment vehicles in other state investment
pools, the City in December significantly reduced its LAIF exposure from the $36 million
shown in the November portfolio to $14.5 million, investing the difference in short-term
Treasuries and the government securities money-market fund. The move lowered the
portfolio yield significantly starting in December, but followed the City's investment
policy of putting safety and liquidity as the top two priorities. So far, none of LAIF's asset-
backed commercial paper holdings have suffered the ratings downgrades plaguing certain
other pools, and LAIF has stated that they are not invested in the structured investment
vehicles or collateralized debt obligations that have caused troubles in those pools.
Investments are in full compliance with City investment policy and/or State law, and are
tiered to provide sufficient cash flows to pay City obligations over the next six months.
GENERAL FUND REVENUES AND EXPENDITURES
Sales taxes from the major new information technology solutions provider brought into
Cupertino about a year ago plus continued strong sales from our leading tax provider
Treasurer's Investment and Budget Report
January 15, 2008
Page 2 of 2
resulted in sales taxes 28% above last year's pace. Hotel taxes, property taxes, utility taxes,
franchise fees and interest earnings are also exceeding prior year's numbers. However, all
revenues related to development such as building permits, planning fees, engineering
reviews, and construction taxes are down a combined 39% from last year, reflecting
nationwide trends and a turnaround from the recent residential and commercial building
surge that had benefited the City's coffers the past three years. Overall General Fund
revenues are down 2% after completing five months of the year.
Overall General Fund expenditures are up
with the budget increase, which includes
General Fund this year. However, actual
dictated by the budget.
11 % over a year ago through November, inline
the recreation enterprises that moved to the
spending is below current year projections as
RECOMMENDATION
Please accept the Treasurer's Investment and Budget Report for November 2007
Submitted by:
c
~~.
David Woo
Finance Director
Approved for submission:
David W. Knapp
City Manager
Reviewed by:
Carol A. Atwood
Director of Administrative Services
Attachments:
1. Investment Portfolio
2. Rate of Return Comparison and Investments by Type
3. Compliance with Investment Policy
4. General Fund Budget Report
5. Projected vs. Actual Charts
City of Cupertino
November 30, 2007
ACTIVITY DATE COUPON ADJUSTED MATURITY MARKET UNREALIZED
PURCHASE MATURITY DESCRIPTION RATE COST VALUE VALUE PROFIT/LOSS
SECURITIES MATURED/CALLED
01/(2/04 08/06/08 FHLB callable, step coupon 5.00% 1,000,000 1,000,000 1,000,000 0
SECURITIES PURCHASED
11/19/07 11/]9/10 FFCB callable 4.65% 1,000,000 1,000,000 1,000,000 0
11/23/07 11/20/08 Pim~acle Baiilc & others 4.88% 1,000,000 1,000,000 1,000,000 0
CITY PORTFOLIO
CASH
11/30/07 Wells Far o -Workers Comp Checking 21,018 21,018 21,018 0
11 /30/07 Wells Fargo - Re ular Checking 482,082 482,082 482,082 0
503,100 503,100 503,100 0
LAIF
11/30/07 LAIF -State Pool 4.96% 36,108,707 36,108,707 36,108,707 0
CERTIFICATES OF DEPOSIT
02/03/06 02/04/08 PrimeSouth Bank 4.65% 97,000 97,000
~ 96,822 (178)
02/(0/06 02/11/08 Florida Community Bank 4.75% 99,000 99,000 98,817 (183)
03/17/04
03/19/04 03/17/08
03/19/08 American Trust Fed Savings Bank
Planters First Cordele GA 3.00%
3.05% 99,000
98,000 99,000
98,000 98,288
97,294 (712)
(706)
03/24/04 03/24/08 Badger State Bank 3.00% 99,000 99,000 98,243 (757)
03/24/04
03/26/04 03/24/08
03/26/08 Wilmot State Bank
Private Bank & Trust 3.00%
3.20% 99,000
99,000 99,000
99,000 98,243
98,279 (757)
(721)
03/30/06 03/28/08 First Georgia Banking Company 5.05% 99,000 99,000 98,89] (109)
04/07/04
03/26/04 04/07/08
09/26/08 Cole Taylor Bank, step coupon
South Coast Community Bank 3.01 %
3.20% 97,000
98,000 97,000
98,000 96,877
96,792 (123)
(1,208)
11/23/07 11/20/08 Arizona Bank & Trust 4.88% 10,108 10,108 10,108 0
Il/23/07 11/20/08 Banktrust 4.88% 94,000 94,000 94,000 0
11/23/07 11/20/08 Cardinal State Baiilc 4.88% 94,000 94,000 94,000 0
11/23/07 11/20/08 Colonial Bank NA 4.88% 94,000 94,000 94,000 0
11/23/07 11/20/08 Covenant Bank 4.88% 94,000 94,000 94,000 0
11/23/07 11/2U/08 Four Oaks Bank & Trust Co 4.88% 94,000 94,000 94,000 0
11/23/07 11/20/08 Johnson Bank 4.88% 94,000 94,000 94,000 0
1(/23/07 11/20/08 Midwest Bank of Western Illinois 4.88% 94,000 94,000 94,000 0
11/23/07 11/20/08 Solutions Bank 4.88% 48,892 48,892 48,892 0
11/23/07 1(/20/08 The Brand Banking Co 4.88% 94,000 94,000 94,000 0
11/23/07 11/20/08 Vision Bank 4.88% 94,000 94,000 94,000 0
11/23/07 11/23/08 Pinnacle Bank 4.88% 95,000 95,000 95,000 0
03/17/04
03/24/04
(2/30/08 03/17/09
03/24/09
12/30/09 Peoples State Bank
Washita State Bank
Meridian Bank 3.40%
3.35%
4.80% 99,000
99,000
99,000 99,000
99,000
99,000 97,512
97,442
99,339 (1,488)
(1,558)
339
12/28/05 12/28/10 Nat'l Bank of New York Cit 4.90% 97,000 97,000 97,711 711
2,378,000 2,378,000 2,370,550 (7,450)
MONEY MARKET FUNDS
11/30/07 Wells Fargo Government 4.44% 3,577,597 3,577,597 3,577,597
3 577 597 3 577 597 3,577 597 0
City of Cupertino
November 30, 2007
ACTIVITY DA'L'E COUPON ADJUSTED MATURITY MARKET UNREALIZED
PUR HASE MATURITY DESCRIPTION RATE COST VALUE VALUE PROFIT/LOSS
AGENCY NOTES
04/14/04 12/03/07 FNMA callable 2.50% 999,970 1,000,000 1,000,000 30
12/13/05 12/28/07 FFCB 4.75% 1,000,037 1,000,000 1,000,310 273
04/23/04 01/23/08 FHLB callable 3.15% 1,499,400 1,500,000 1,497,195 (2,205)
02/25/04 02/25/08 FHLMC 3.13% 1,000,000 1,000,000 997,130 (2,870)
11/21/05 06/23/08 FFCB 5.79% 1,005,986 1,000,000 1,006,990 1,004
04/29/04 10/29/08 FHLB callable, step coupon 4.00% 300,000 300,000 299,814 (186)
12/30/03 12/30/08 FHLMC callable, step coupon 4.75% 1,000,000 1,000,000 1,007,510 7,510
03/16/04 03/16/09 FNMA callable 4.01% 1,600,000 1,600,000 1,598,496 (1,504)
12/28/05 12/28/09 FHLB callable 5.04% 915,000 915,000 915,576 576
11/30/05 04/07/10 FFCB callable 3.70% 972,403 1,000,000 994,690 22,287
11/21/05 07/12/10 FHLMC 4.13% 985,895 1,000,000 1,010,000 24,105
11/19/07 11/19/10 FFCB callable 4.65% 1,000,000 1,000,000 1,004,690 4,690
12/15/05 l2/15/]0 FHLMC callable 5.04% 1,000,000 1,000,000 1,009,730 9,730
04/21/06 04/07/11 FNMA callable 5.75% 748,632 750,000 751,410 2,778
14,027,323 14,065,000 14,093 541 66,218
Total Managed Portfolio 6 594 727 56 632 404 6 6 4 5 8 68
Average Yield 4.68%
Average Length to Maturity (in years) 0.39
TRUST PORTFOLIO (KESTER TRUST)
CASH
11/30/07 Wells L~stitutional Money Mkt Acct 4.49% 46,558 46,558 46,558 0
Total Trust Portfolio 46 558 46 558 46 558 0
BOND RESERVE PORTFOLIO
Bond Reserve Acct Ambac Assurance Security Bond 1 1 I
Bond Payment Acct Wells Treasury Plus Money Mkt 3.59% 4,559 4,559 4,559 0
Total Bond Reserve Portfolio 4 559 4 559 4 559 0
Rate of Return Comparison
5.40%
5.30%
5.20%
5.10%
5.00%
4.90%
4.80%
4.70%
4.60%
4.50%
4.40%
4.30%
tLAIF
-Cupertino
12/06 1 /07 2/07 3107 4/07 5/07 6/07 7/07 8/07 9N / ~ wu i i i iu ~
COMPLIANCE WITH INVESTMENT POLICY
City of Cupertino
November 30, 2007
Category Standard Comment
Treasury Issues No limit Complies
US Agencies No limit Complies
Medium Term Corporate Bonds 30% with A rating Complies
LAIF $40 million Complies
Money Market Funds 20% Complies
Maximum Maturities Up to 5 years Complies
Per Issuer Max 10% (except for Treasuries and US Agencies) Complies
Bankers Acceptances 180 days & 40% Complies
Commercial Paper 270 days & 25% Complies
Negotiable Certificates of Deposit 30% Complies
Repurchase Agreements 365 days
-- Complies
- - -
IZc~~cr~c IZ~~hurchau° t~~~recnicii(s
i'r~~ltihilccl .-
~
~~~Cotnplies
~ o
~ U
~
^. ~
N O
U
3 ~'
~ v
° ~
°
C
«t
b
O °
T
^0
a
~a
«° U
a
'~..
y
C s, U ~ G ,,., N ~ t. V
~
.
y y C
°
U ~
fn "O
C b4
C U
C V
~ C
W U
G ~
.D ~
N
Q
O
O
O
a
~
N
_
O
bVA N
C
b00
O
y
°
"
O ~ O
w b ~
p
.'
~
o
A,
v
f1
>
b
~
b
p
N
U
'L7
p
3
a
° .b ~
N
~ ,
3
3 i
ro
°
3 U
y o ~ °~, ~
~ a
~
~ ~ ,k
3 ~ ~ ~ ~ .~ ~
A ~ ~ V N ~ O P
Op b0 ~ ~ ~ v
~ c
d . ° ~ U
3
W o ~ a ° W ai o b o o D W o n. Q a
i
~ F-~ ~l d W v~ ~ FL' Q U U U W W U ~ RS Z
N O ~ W W W r ~D ~ 00 00 r r ~O M CO o0 r --~ ~O Q`. O O N
r ~ O r V1 V'1 00 V' D, N ~--~ N •--~ ~ 00 Vl V1 ~ r o0 --~ ~!1 O O C
O N oo O O O~ M V M O O~ M D` ~ N ~ -- ~n V ~O oo ~--~ v1 O O
O vi V O M V r ~O ~O oo D` O a, ~ M M ~ vi O N ~n vi N O 'V
N 00 00 ~ M 00 O M ~--~ O~ ^' r 'a' N M M ~O ~--~ Q` Q\ r O ^' N OG
C 7 O ~ M ~n O oo M vi r ~n N 7 ~O ~ N O r v~ vi O~
M
rl M O M 7 N ~O l~
_
e3 '~'~
V N ~ M M N N o0 N D1 M ~--~ N r M O ~ r -~ ~ O O ~-+ O
Q ~ V'
O N O
--' r ~D
O 00
0 00 O r
r N V N
D V
D\ O
~ V
W N
o0 r
~O M
Vl M
~ N
M M
r M
M 00
Vl <r
O
O °~ ~ N o M M D` M `
O a`. M O oo O a r O ~n r r D` V N r ~n O ~O M oo v~ o0 7 r
N N N M vl r N ~/1 M •--~ 00 00 ~O W ~D -- D` ~ W ~O ~ ~-- O o0
~ r 0 0 0 M N ~ ~D ~n ~O D` v'i U M ~° r N r '7 N ~ N
M
ti N •--~ O N M -- M ~
0 0 0 0 0 0 0 0 v-~ 0 0 0 ~n ~n vi oo •--~ O~ O~ oo v'i O O C
"O
~ 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 ~O
a` O
O O
O O
N ~
-- O~
O Vl
V V
oo ~O
v'1 V'1
M ~
O M
~n ~
O~ O
O O
O '.T
l~
V
'6 O O
r O
•--~ O
~n O
O O
oo O
r N
r M
oo O
'V' ~O
~O O
O~ ~°
~--~ oo
V V
~--~ v'~
~O ~n
r O~
N oo
-- N
oo oo
- M
O O
M oo
V M
t~
G
v r
O oo N v-, .~ vi r ,-~ 'V r o ~° .-• ~O vi oo N ~n O~. oo .... N ~o oc
~. C N ~ N N N ~--~ M ~--' V N O -. r ~--~ ~ M M ^' ~ Vl r
Q N V M
V
b
'O
7
0
0
0
0
0
0
0
0 ~ O O O O 7 ~n oo V'
' O o0 O ~O ~ ~D ~O
~Q
L
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O
O ,__,
,__, O
O O
O O
O O
O --
-- O~
~ r
M d
~ O
<f' a`
N V
V oo
N M
~O r
a` a`.
N ~
u r ~ N O 0 0 ~D N r r o0 0o vl ~n
' 7 ~ ~ ~
~" ~ r O~ ~O O~ O O ~ oo O
r o0
~ 00
~ ~
--- O
~ ~D
V ~°
M r
•--~ ~--
D1 r
D, N
7 oo
a0 d
00 a`
V'l ~
V N
O O
M
~
it
o Q O
O Vl
•--~ N
~O M
N M
N ~/l
N M
N O
M M
-- ~ -- ~--~ O ~--~ r V N M °~. O -- r V
~
~
N ~ M
Y
~ C~
C ~
~
Y
D y U G
O
A N ~ ti y V ~ O ~ N
~
o. ~ ~ R ~ aoi ~, a' ~ °
' ci ~ a a~i a~i °' .> ~ ~ '- v' Q ~ ~ ~
V ~ ~ O ~ ~ o `o ~ o ~ W Y w , ~ p ° °x' ~ O m
~ x ti ~ ~ ,o ~ ~
o ~ ~ ~ ~,
°' °
o ~
~ ~
~ v
~ ~ ~
~ w
° o
°
° ~ ~3 x o ~
o ~~
. .
E W
3 ~
E ~
~ ~
v ~
E .~
1 i
o w
~ w
~
z
~, C ~ °
~ ~ a F- ~ u .c
O ti . ~ ° ~ .
~'- Q ~ U Q c~ U ,
a
U CJ Z [-- . ..a O ~ C.i w O cn O .- F- [-
Sales Tax Projections vs. Actual
~, $4,000
y
7
O
L
/A
w
f0
r°- $2,000
d
r
$0
__ ~ ~~
~ - '- --~ -~-Projected, per current budget
~FActual
8/07 9/07 10/07 11 /07
Month
Transient Occupancy Tax Projected vs. Actual
~, 1,200
0
t
F-
800
cA
a~
0
0
m
d
r
--•-Projected, per current budget ~
(Actual ~ ~
s
400
0
i ~
8/07 9/07 10/07 11 /07
Month
Charges for Services Projected vs. Actual
N 1, 000
R
N
7
O
t
d
0
0
0
8/07
9/07
Month
10/07
11 /07
Licenses & Permits Projected vs. Actual
2,000
o --•-Projected, per current budget
~ ---~--Actual
d
0 1,000 ~
r
i
~ , ~
r
0
8/07 9/07
~•
. ~
-~-Projected, per current budget ~ ~ ~
--F-Actual ~ i
i
i
_ ,
~ ~
r
~ ~
. ~
. ~ ~ -a
Month
10/07
11 /07
Property Tax Projections vs. Actual
~, $1,500
N
7
O
t
F-
$1,000
r
0
0
L
~ $500
$0
--~-Projected, per current budget / /
~--•-Actual ~
g/07 g/07 10/07 11 /07
Month
General Fund Expenditures Projected vs. Actual
y 15,000
N
7
O
L
H
to 10,000
d
r
ca
O
F-
L
i 5,000
0
Month
8107 9/07 10/07 11 /07