05. Treasurer's 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.
SUBJECT AND LSSUE
Meeting Date: June 17, 2008
Accept the Treasurer's Investment and Budget Report for May 2008, including a status
report on General Fund Revenue and Expenditures.
BACKGROUND
INVESTMENTS
The market value of the City's portfolio totaled $65.8 million at May 31, 2008, with a cost
of $65.7 million, with a $0.1 million unrealized paper gain difference. The gain results
from the economy's low interest rates, which drives up the market value of fixed interest
securities in the portfolio. With interest rates continuing to decline, the portfolio's yield fell
to 2.94% in May, compared to 2.99% the previous month and 4.86% a year ago. The Local
Agency Investment Fund (LAIF) yielded 3.07% for May, down from 3.40% for the
previous month and 5.25% a year ago.
Three million dollars in Federal Agencies and U.S. Treasuries were called or matured. The
City's cash balance increased two million dollars due to sales taxes. The maturing and
called securities and the new cash were re-invested into agency notes issued by the Federal
Home Loan Bank and Federal Farm Credit Bank.
Investments are in full compliance with City investment policy and/or State Iaw, and are
tiered to provide sufficient cash flows to pay City obligations over the next six months.
GENERAL FUND REVENUES AND EXPENDITURES
Year-to-date revenues through May 31, 2008 are up 1% over a comparable period from last
year. Growth in sales taxes, hotel taxes, property taxes, utility user taxes, and interest
earnings are offset by declines in development-related fees and taxes. However, revenues
are trending to end up the fiscal year at 1 % below last year's results because of the
worsening economy and because of last year's one-time property sales. Overall revenues
are anticipated to end up $700,000 below budget, but possible expenditure budget savings
of $1.9 million may leave the General Fund with a net $1.2 million surplus for 2007-08. A
surplus of $1 million for 2007-OS is projected in the new five-year budget that is up for
adoption by the City Council.
5-1
Treasurer's Investment and Budget Report
June 17, 2008
Page 2 of 2
RECOMMENDATION
Accept the Treasurer's Investment and Budget Report for May 2008.
Submitted by: Approved for submission:
_~-
L.•
David Woo David W. Knapp
Deputy Treasurer City Manager
Reviewed by:
Carol A. Atwood
City Treasurer
Attachments:
l . Investment Portfolio
2. Rate of Return Comparison and Investments by Type
3. Compliance with Investment Policy
4. General Fund Budget Report
5. Revenue and Expense Trend Charts
5-2
City of Cupertino
Investment Portfolio
May 31, 2008
nnua
. ~.._ o Mat`uri YIEL6 ~S `"~° -~- ~ACT7E S
- _~ _`
_ SECURITIES MATURED/CALLEb V----------- ----------
_02/OS/08 02!05/09 FFC_B_cailable --~ 3.00% __3.00% _3_00% 1,000,000 1,000,000 1,000,000 0
_ -12/10/07
- 05/15!08 US Treasury Note ___ 2.63% 3.17% 3.17% 1,000,000 -
1,000,000 1,000,000 0
12/07/07 _05/15/08 US Treasury Note 2.63% 3.25% 3.23% 1,000,000 _
_
1,000,000 1,000,000 0
---~- _-~
SECURITIES PURCHASED -- - --- ~-
OS/07/O8 06/ll/10 FHLB 3.00% 2.98% 2.98% 1,000,407 1,000,000 1,000,420 13
05/19/08 11/19/10 FHLB callable ~ 3.15% 3.15% 3.15% 1,000,000 -1,000,000 _
1,005,310 _ ___
V
^
5,310
05/20/08 05/20/10 FFCB callable 3.34% 3.34% 3.34% 1,000,000 1,000,000 1,000,000 _
_
~ 0
05/27/08 08/27/10 FHLB callable 3,30% 3.30% 3.30% 1,000,000 _
1,000,000 1,000,400 p
05/28/08 02/28/11 FHLB callable 3,40% 3.40% 3.40% 1,000,000 1,000,000 1,000,000 0
05/28/08 02/26/!0 FHLB callable _ 3.00% 3.00% 3.00% 1,000,000 1,000,000 1,000,000 0
CITY PORTFOLIO
_......_, T ~"~
CASH
_ - ..__ _ ---
_A _T- --~ 05/31/0$ Wells Fargo -Workers Comp Checkin g _ 24,593 24,593 ^ ~ 24,593 0
05/31/08 Wells Fargo -Regular Checking
_ _ 537,304 537,304 53
7,304 0
_ ~ -
561,897 561,897 _
_
~ 561,897 u_
0
LA_IF
T ____
~ _ - ._.____.__._____ _- _ ---
05/3I/O8 LA1F -State Pool 3.07% 3.07% 3.07% 17,039,962 17,039,9b2 17,039,962 0
-~-
CERTIFICATES OF DEPOSIT
__03/26/04 _ 09/26/08 South Coast Community Bank_
- 3.20% 3.20% 3.20% 98,000 98,000 98,071 71
_ 11/23/07 _ 11/23/08 Pinnacle Bank & others
_-__ 4.8_8% 4.88% 4.88% 1,000,000 1,000,000 1,000,000 0
03/17/04 03/17/09 Peoples State Bank 3.40% 3.40% 3.40% 99,000 99,000 9
8,690 (310)
03/24/04 03/24/09 Washita State Bank 3.35% 3.35% 3.35% 99,000 99,000 _
_
_
98,651 __ _
- y (349)
12/30/05 12/30/09 Meridian Bank 4.80% 4.80% 4.80% _ __
99,000 99,000 ____
99,229 229
12/28/05 _ 12/28/10 Nat'l Bank of New York City 4.90% 4.90% 4.90% 97,000 _
97,000 96,125 (875)
1,492,000 1,492,000 J ~1,490,76b (1,234)
MONEY MARK$T_F_UNDS
- _
05/31/08 We11s Fargo Government 2.09% 2.09% 2.09% 12,335,819 12,335,819 12
,335,819 ~-0
08/31/08 We1lsFargo100%Treasury 1.17% 1.17% 1.17% __
100,000 100,000 _
_
100,000 _ _ _
- 4
12,435,819 _
12,435,8] 9 ____
12,435,819 0
AGENCY NOTES
~ _ ~ ~~
11/21/05
_ 06/23/08 FFCB
- 5,79% 4.65% 4.62% 1,000,668 1,000,000 1,001,950 1,282
___01/30!08 09/12/OS
`- FFCB
___ 4.50% 2.70% 2.73% -
1,005,021 1,000,000 _
1,005,630 609
01/28/08 10/01/08 FFCB discount note 2.68% 2.77% 2.73% _
990,843 1,000,000 __
~ 992,500 1,657
12/30/43 12/30/08 FHLMC callable, step coupon
~ 4.75% 3.90% 4.75% _
_
1,004,000 1,040,000 _
V 1,012,510 12,510
01/22/08 08/03/09 FFCB_ 5.25% 2.55% 2.56% __
],034,843 __
1,000,400 1,027,810 (3,033)
08/28/08 02/26/14 FHLB callable _ 3.00% _3.00% 3.00% 1,060,000 __
» 1,400,000 997,500 __
(2,500)
08/20/08 05/20/IO FFCB callable _ _ 3.34% _3_.34% 3.34% 1,040,000 _
- 1,000,000 1,000,940 940
05/07/08 Q6/t1/l0 FHLB -- - 3.00% 2.98% 2.98% 1,040,407 1,000,000 996,250 _
(4,157)
11/21/05 __07!12/10 FHLMC 4.13% 4.73% 4.78% 988,598 1,000,000 018,130
1, _
29,532
_-05/27/08 08/27/1 O
- FHLB callable - 3.30% 3.30% 3.30% 1,0
00,000 1,000,000 _
__
999,690 _ _
~ (310}
Y I l/19/07 l l/I9/t0 FFCB callable 4.63% 4,63% 4.63% _ _
_
1,000,000 1,000,000 -
~ 1,009,(160 9,064
05/19/08 I I/19/10 FHLB callable _ 3.1_5% 3.15% 3.15% _
1,040,0
00 1,00
0,000 _
993,750 _
(6,250)
12/15/05 12/15/10 FHLMC callable 5.04% 5.04% 5.04% _
_
1,040,000 __
_
1,000,000 1,012,180 12,180
' 05/28/08 02/28/11 FHLB callable _ 3.44% 3.40% 3.40% 1,000,000 1,000,000 994,380 (5,620}
14,016,380 14,000,000 14,062,280 45,900
5-3
City of Cupertino
Investment Portfolio
May 31, 2008
nnua L
S ------ --RA-~`E o Maturit Y -- ---VALUE---.._ _.___.YA~CT11; - -
US TREASURY SECURTfIES
T
02/29/08 06/12/08 ~
US Treasury Bill 1.76% _1.80% 1.77% 1,998,827 __2,000,000
___ 1,998,980 153
_
01/28/OS _
~ 06/30/08 __
_
U5 Treasury Note ____ _
S.i3% 2.25% 2.29% 1,002,344 _ _-_ _1,000,000 1,002,660 ~ 316
12/10/07 07/31/08 U5 Treasury Note _
5.00% 3.27% 3.31% 2,005,621 2,000,00_0 2,009,840 4,219
12/07/07 08/15/08 US Treasury Note 4.13% 3.35% 3.37% 1,001,555 1,000,000 1,004,380 2,825
]2/10/07 08/31/08 US Treasury Note 4,88% 3.34% 3.37% 2,007,486 2,000,000 _2,014,060 ___ - _6,574
12/07/07 09/30/08 _
US Treasury Note 4.63% _ 3.27% 3.3 ]% 1,004,350 1,000,000 1,008,670 4,320__
12/10/07 __
~09/30/OS US Treasury Note _4.63% _3.29% 3.31% 1,004,329 _- 1,0_00,000 1,008,670 _ 4,341
_
12/07/07 _
10/3 ]/0$ ~
US Treasury Note 4.88% 3.27% 331% 1,006,4_67 1,000,040 1,011,800 5,333
_
12/10/07 10/31/08 US Treasury Note 4.88% 3.25% 3.28% 1,006,600
_r._...____ 1,000,000 1,011,500 5,200
12/07/07 11/15/OS US Treasury Note 4.38% 3.31% 3.33% 1,004,731 1,000,040 1,010,630 5,899
12/10/07 11/15/08 US Treasury Note 4.38% 3.27% 3.29% 1,004,927 _____ 1,000,000 - T 1,010,630 5,703
-.______...------
12/10/07 12/31/08 US Treasury Note 4.75% 3.18% 3.20% 2,017,799 2,000,000 2,031,400 13,601
12/20/07 01/31/09 _
US Treasury Note 4.88% 3.06% 3.08% 1,011,822 _
_1,000,000
~
` 1,018,28p 6,458
02/14/08 02/15/09 US Treasury Note _
3.00% 1.77% 1.78% 1,008,641 _1,000,000 _ - 1,006,250 (2,391}
03/]0/08 03/31/09 US Treasury Note 4.50% 1.44% 1.47% 1,025,227 _
1,000,000 _ 1,019,220 _ _ (6,007)
03/12/08 04/30/09 US Treasury Note 4.50% 1.51% 1.54% 1,026,976 1,004,000 1,021,4]0 (5,566)
20,137,701 20,000,000 20,188,680 50,479
Total Mana ed Portfolio
_--_--- 65 683 759 65 529 678 65 779 404 9S 645
Average Yield 2.94% _ ~_ _______
_
Average Length to Maturity ___.T
(in years)
~_ 0.48 _ __ ____
_ --- _-
----
-_-' -.
CASH - __.-
05/31/08 TRUST PORTFOLIO (KESTER TRUST)
_
Wells Institutional Money Mkt Acct 2.23%
2.23% - .,..____
_
47,597 __ _
_ _ _
__--~ 47,597 -_- ___-_
47,597 _
____
- _ - 0
Total Trust Portfolio 47,597 47,597 97 597 0
BOND RESERVE PORTFOLIO
~ y
Bond Reserve Acct mbac Assurance Security Bond
A 1 __ 1 l
_
Bond Payment Acct ~ _
Wells Treasury Plus Money Mkt 1.49% _1.49%
_ 1,203 1,203 1,203 0
_
Total Bond Reserve Portfolio 1 203 1 203 1 203 0
5-4
Rate of Return Comparison
5.50%
5.00°~6
4.50°~
4.90%
3.50%
3.00%
2.50°~,
X01 1~0~ ~°~ 0,\°'1 ,~p~o1 ~^~o'l ^~~o~ r~\o~ ~~ ,y~oo k~o ~o~
e~
o~
ay
~e
o
r`t`e
5
~-•LAIF
--f-Cupertino
5-5
COMPLIANCE WITI3 INV
City of Cupertino ESTMENT POLICY
May 31, 2008
Category _ ___ Standard f Comment
Treasury Issues No limit Complies
US Agencies No limit _ f Complies_
erm
Corporate Bonds _
Medium T 30% with A rating _ Complies
_
_
LAIF $40 million Complies
-
_ . _ ..-- y - ------------ _ _
Mone 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
Negotiable Certificates of Deposit 270 days & 25%
30%
_ -- Complies.
Complies
. .
Repurchase Agreements 365 days Complies
Reverse Repurchase agreements ;Prohibited Complies
5-6
City of Cu ertino
General Fund Budget Report
May 31, 2008
Bud et Actual
2006/07 2007/08 5/31/2007 ~ 5/31/2008 Anal sis of Trends
Taxes:
Sales Tax 11,575,000 14,190,000 10,392,832 .12,251,994 Strong business-to-business; flat in other areas
Pro erty Tax 6,290,000 6,710,000 5,665,432 6,172,884 Values holding u better than in other regions
Transient Occu ancy 2,363,000 2,660,000 2,013,366 2,193,496 Revenue owth slowin down
Utility Tax 2,392,000 3,240,000 2,466,452 2,602,0;8
Franchise Fees 2,500,000 2,580,000 2,231,426 2,220,267
Other Taxes 2,308,000 1,400,000 2,002,020 1,276,150 AMC & Whole Foods construction tax last year
Licenses and Permits 3,050,000 3,030,000 f 2,934,705 2,406,938 Building permits down
Use of Mone & Pro a 1,380,000 2,100,000 1,599,867 1,786,954 Strong cash position but rates declining
Inter overnmental 4,706,114 4,505,071 4,552,174 4,487,320 ~ ~ SB 90 claims down; Last yr's VLF included corrections
Char es for Services 1,482,000 1,150,000' 1,428,921 1,228,632 `•Development down; Senior Center now in Gen Fd
Fines & Forfeitures 680,000 800,004 570,345 547,236; ;Last year had $i70k in one-time retroactive fines
Other Revenue 140,000 116,200 149,794] 66,047] ~
Sale of Pro erty ~ 1,600,000 ~ 788,476, Two arceIs eventuall sold last year for $1.6 million
Total Revenue 66 14 4 ~ 6 i U 1 %; ma end u $700k below bud et.
I
O eratin Ex enditures: f
Administrative 1,362,195 1,499,095 1,142,516 1,220,425
Law Enforcement 7,177,378 7,871,526 6,637,178 7,021,487 FuII year of addt'1 de uties
Community Service 917,644 1,275,848 1,002,056 1,043,189
Administrative Service 4,978,400 4,535,811 3,324,104 3,428,946
Recreation Service 2,428,298 3,908,359 2,056,414 3,353,303 BBF and Senior Center in General Fund this ear
Community Development 3,885,441 3,722,479 2,967,401 3,072,358
Public Works 9,845,280 11,143,739 8,246 841 8,968,774 Park, building maintenance
Total Ex enditures 0 6 7 8 Up 11 %; may end u $1.9M below budget
Transfers In 1,459,974 1,300,164 458,326 1,230,996 Resource Recovery; CIP savin s
Transfers Out l -7,026,296 -17,434,750' -12,951,083, -16,130,750 New CIP
Net Gain/ oss 0 - - 7 ~ 8
H $14;000
y $12,000
~, ~ $1 o,oao
w
o $8,000
0
$6,000
} $4,000
$2,000
$o
~, $7,000
a
$6, 000
a
~ $5,000
r
o $4,oao
a
L $3,000
ro
r $2,000
$1,000
$a
Sates Tax Projections vs. Actual
--~--Projected, per budget
~^~~Actual
8107 9107 10/07 11 /07 12107 1 /08 2108 3108 4108 ~ 5/08
after
budget
change
Month
Property Tax Projec#ions vs. Actual
5-8
8107 9107 10/07 11107 12107 1/08 2108 3/08 4/OS 5/u~s
after
budget
change
Month
Transient Occupancy Tax Projected vs. Actual
~, 2,4ao
w
2,000
1,600
d
..
0 1,200
m
800
400
0
~, 3,000
,R o
m ~ 2,000
0
0
r
} 1,000
0
-~-Projected, per budge# ~,
--~--Actual
~ r
i
8/07 ~ 9/07 10/07 11 /07 12/07 1 !08 2/08 3/08
Month
Licenses ~ Permits Projected vs. Actual
4108 5108
~ ~
~~, "'~
~~ ~--Projected, per budget
~ ~-Actual
8107 9107 10107 11 /07 12/07 1 /08 after 2/08 3108 4108 5/08
budget
change
Month
5-9
Charges for Services Projected vs. Actual
N 2,000
a
~„ o
:: L
0 1,000
d
0
--•~ Projected, per budget
-E--Actual
~~ .-.
r '' X
8/07 9/07 10/07 11 /07 12107 1 /08 after 2/08 3108 4/08 5/08
- budget
change
Month
General Fund Expenditures Projected vs. Actual
~, 35,000 -
30,000
0
L
''
2s,ooa
0 20,000
a
~'
a
15,000
m
r
10,000
5,000
0
~~
~ ---~-Projected, per budget
-~-Actual
8107 9107 10/07 11107 12/07 1108
Month
2108 3108 4108 4108
5-10