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05. Treasurer's ReportADMINISTRATIVE SERVICES DEPARTMENT CUPERTINO CITY HALL 10300 TORRE AVENUE • CUPERTINO, CA 95014-3255 (408} 777-3220 • ~AX (408) 777-3109 SUMMARY Agenda Item No. ~ SUBJECT AND ISSUE Accept the Treasurer's Investment Report for July 2008 BACKGROUND INVESTMEN TS Meeting Date: September 2, 2008 The market value and cost of the City's portfolio totaled $63.1 million at July 31, 2008. The portfolio's yieid feli to 2.65% in July, compared to 2.86% the previous month and 4,92% a year ago. The Loca1 Agency Investment Fund (LAIF} yielded 2.79% for Juiy, down from 2.89% for the previous month and 5.26% a year ago. A$2 million Treasury note matured with $5 million in new Treasuries, Federal Farm Credit and Federal Home Loan Bank securities purchased. The City decreased its LAIF balance as a precaution if the State restricts withdrawals due to cash flow problems resulting from their budget stalemate. Eight million dollars was shifted from the government-sponsored enterprise money market fund to the Treasury-based money fund because of the growing financial difficulties of Fannie Mae and Freddie Mac. All of these moves lowered credit and liquidity risk at the expense of the portfolio's yield, as permitted by the City's investment policy. The City's cash balance rose $1.2 million due to grant funding for the Mary Avenue Bicycle Foothridge. Investments are in fizll 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. 5-1 Treasurer's Investment Report September 2, 2U08 Page 2 of 2 RECOMMENDATION Accept the Treasurer's Inveshnent Report for J~ly 2008. Submitted by: ~ Approved for submission: David VJoo David W. Knapp DepuTy Treasurer City Manager Reviewed by: ~~ ~E'~~ ~~~~.~~~ ; `` ~ Carol A. Atwood City Treasurer Attaehments: 1. Investment Portfolio 2. Rate of Return Compazison and Investments by Type 3. Compl~ance with Investrnent Policy 5-2 City of Cupertino Investment Portfolio July 31, 2008 ~R~'I'`t'1~ ^~7~'I'E~-~ To Maturit} ~~ p $- SECURITIES MATURED 12/10/07 67/31/08 US Treasury Note 5.00% 3.27°/a 2,006,000 2,000,000 2,000,000 0 SECURITIES PURCHAS~D ~' _ -- - ___ _ 07/17/68 OS/1S/09 USTreasutyNote ~3.88% ~.06% 1,014;156 1,000,090 1,013,360 {796) 07/24/08 OS/l5/09 USTreaSUryNote 3.88% 2.30% 1,412,203 ~1,000,000 i 1,013,360 f,157 07l28/08 07/28/10 ~~ F'FCB callable 330% 3.30°/a I,OOQ,000 1,OQ0,000 1,OOD,000 0 07/30/08 10l23/08 FHLBdiscountnote ~ 2.40% 2.41% ~ 1,988,799 ~ 2,000,000 1,989,000 201 07/30/O8 t2/19/08 FHLB discount note ~ 2.50% 2.52% 990,209 1,000,000 ~~~990,30Q 91 CITY PORTFOLIO ~~~ CASH --__`-- ~, 07/31/08 Wells Fargo - Workers Comp Checking 16,759 16,759 16,759 0 __07/31/08 Wells Fargo - Regular Checking Y~ _ 925,730 : 925,730 925,730 0 -- _~.-._ _-__~_____ 942,489 V 942,489 ~ 942,489 0 LAIF -- - _- - . ~ - - ____ 07/31/08 LAIF - S[2te Pool 2.79% 2.79% 12,771,440 12,771,440 12,771,440 ~~ 0 CERTIFICATES OF DEPOSIT ^ ~^ ~ 0326/04 Q9/2b/08 South Coast Community Bank 3.20% 320% W 98,006 ^ 98,000 ' 98,039 39 11/23/07 I1/20/08 Ariwna Bank & Trust 4.88% 4.88% 10,108 10,108 10,108 0 ll/23l07 11/20/08 Bank[rust 4.88% 4.88% 94,000 94,Q00 94,000 0 11/23/07 i l/20/08 ~ Cardinal State Ban& 4.88% 4.88% 94,000 94,000 94,000 0 11/23/07 11/20/08 ColonialBankNA 4.88% 4.88% 94,000 94,000 94,000 0 l 1/23/07 11/20/08 Covenant Bank 4.88% 4.88% 94,000 94,000 94,000 0 11/23/07 i ll20/O8 Four paks Bank & Trust Co 4.88% 4.88% 94,000 94,000 94,060 0 ll/23/07 1120/Ok Johnson Bank 4.88% 4.88% 94,000 94,000 94,OU0 0 I 1/23/07 11/20/OS Midwest Bank of Westem Illinois 4.88% 4.88% 94,000 94,000 94,060 ~ 0 i l/23/07 ] i/20/08 3oluHons Bank 4.88% 4.88% 48,892 48,892 48,892 ~w~ 0 i l/23/07 11/20/08 The Brand Banking Co ~ 4.88% T 4.88% 94,000 94,000 94,000 0 11/23/07 11/20/08 Vision Bank 4.88% 4.889~0 94,006 94,006 94,000 ~~ 0 11/23/07 11/23/08 Pinnacle Bank 4.88% 4.88% 95,000 95,006 95,000 ^ 0 03li~/04 Q3/17/09 Peoples State Bank 3.40% 3.40% 99,000 99,OOQ 98,888 (112} 03/24/(kl ~ Q3/24/Q9 Washita State Bank 3.35% 3.35% 99,q00 49,000 98,859 (141} ]2/30/OS 12/30/(?9 Meridian Bank 4.80% ~ 4.80% 99,000 49,000 u]00,564 1,564 12/28/OS 1228/10 Nat'1 Bank of New York City 4.90% 4.90% 97_000 97,000 W~ 96,Sb6 (434) ~^ 1,492,000 1,492,OOQ 1,492,91b 916 MONEY MARKEI' FUNDS 0?/31/08 Wells Fargo Govemment 2,07% 2.07% 4 4,600,751 ~ 4,600,751 4,600,75 t~ 0 07/31/08 WeILs Fazgo 100%Treasury 1.28% 1.28% 8,100,400 8,100,000 8,100,000 0 12,~6Q,751 12,700,751 12,700,751 0 5-3 City of Cupertino Investment Portfolio July 31, 2008 ______-~~~RIPTIbT~ ._._ o Maturit CZFS'I~~--" ---~ VA~,C7H~~ ~DE- ~i~]i~7~7T1L6$~ AGENCY NOTES O1/3U/O8 09/12/08 FFCB 4.50% 2.70°/a 1,002,076 1,000,000 1,001,880 (196) O1/28/O8 !0/01/OS FFCB discount no[e 2.68% 2.77% 995,384 1,000,000 996,000 616 07i30/08 t0/23/08 FHLB discount note 2.40% 2.41°/a 1,988,799 2,000,000 1,989,OOU 241 66/2b/O8 06/26/09 FHI..B caliable 3.13% ~ 3.13% ~ 1,pOQ,000 1,000,000 1,001,56Q 1,560 O1/22/48 OS/03/09 FFCB 5.25% ~ 2.55% 1,026,458 vy 1,000,000 1,022,810 (3,648} 07/34/O8 12/14/O8 PHLB discount note 2.50% 2.52% 990,209 1,OQ0,000 990,300 91 06/30/O8 12/30/09 Ft3I,B callable 3.25% 3.25% 1,OOQ,000 1,000,000 1,002,190 2,190 OS/28/O8 02/26/10 FHLB callable 3.OQ°/a 3.00°/a 1,000,000 1,000,000 998,130 (1,870} ~ O6/25/08 OS/O7/10 CCCB 4.75% 3.38°/u 1,023,243 1,000,000 1,028,440 5,197 OS/20/08 OS/2Q/10 PFCB callable 3.34% 3.34% 1,000,000 1,000,000 1,0~0,630 630 ~ 65l07/OS O6/11l10 FHLB ~ 3.00% 2.98%u 1,006,373 1,00Q,000 997,810 (2,563) 66/18/O8 Ob/18/l~ FHLB callabte 3.35% 3.35% 1,000,040 1,400,000 997,810 (2,190) 07/28/O8 07/28/l0 FFCB callable 3.30% 330% 1,000,000 ~ 1,000,000 1,6D0,000 ~~ 0 OS/27/08 08/27/10 FHLB cailable ~ 3.30% 3.30% 1,0OO,OUO 1,OU0,000 999,380 (620) 11/19/07 11/19/]0 FFCB catlable 4.G3% G.b3% 1,Q00,000 1,000,000 l,(}05,630 5,630 OS/19/08 il/19/10 FI3I.B callable 3.15°/a 3.15% 1,Q00,000 1,000,000 995,000 (5~000) QS/28/08 02/28/11 rT-ILB callable 3.40°/a 3.40°/a 1,40Q000 1,000,000 996,880 (3,126) ~ ~ t8,026,543 18,000,U(10 18,023,450 (3,093) US TREASURY SECURTI'~5 ____ ~__ ___ __ 12/07l07 08/15/OS US Treasury Nate 4.13% 3.35% 1,000,307 1,00{1,000 1,001,020 713 12/10/07 08/31/48 US Treasury Note 4.88% 3.34% 2,062,522 2,000,000 2,OOR,840 2,318 12/07/07 09/30/48 US Treasury Note 4.63% 3.27% 1,OQ2,175 1,000,006 1,004,610 2,435 12/10/07 09/30/O8 US Treasury Note 4.63% 3.29% 1,002,165 1,000,400 1,004,610 2,445 12/07/07 lU/31/O8 US Treasury Note 4.88% 3.27% I,OQ3,889 1,000,000 1,007,890 4,001 12/] 0/07 lU/31/O8 US Treasury Note 4.88% 3.25% 1,003,969 1,600,000 1,007,890 3,921 12/07/07 11/15/Q8 USTreasuryNote 4.38% 3.31% 1,U03,U13 1,000,000 1,007,420 4,467 12/]0/07 11/15/O8 US TreasuryNote 438% 3.27% ~ 1,003,138 1,000,000 ' ~ 1,007,420 4,282 12/]0/07 12/31/48 USTreasuryNote 4.75% 3.18% 2,012,725 2,000,000 2,02A,220 11,445 12/20/07 Ql/31/49 USTtessuryt~Iote A.88% 3.06% 1,008,879 1,000,000 1,015,080 6,201 02/19/OS 02/15/49 US TreasuryNote 3.00% 1.77% I,OQ6,614 1,000,000 1,005,470 (1,144) 03/10/08 03/31/09 USTreasuryNote 4.50% 1.44% 1,020,165 1,000,000 1,015,550 (4,615) 03/12J08 04/30/0~: USTreasuryldote 4.50% 1.51% 1,022,049 1,000,000 1,017,110 (4,939) 07/17/08 OS/15/09 USTreasuryNote 3.88% 2.06% 1,014,156 1,000,000 1,013,3G0 (79~ ~ 07/24J08 OS/15/09 US Treasury Note 3.88% 2.30% 1,012,203 1,000,000 1,013,3b0 1,157 17,11'1,968 17,000,000 17,149,850 31,882 Totat Managcd Portfolio 63 O51 191 62 406 680 63 080 896 29 705 Average Yield 2.65% Avera e Len td to Maturi (in cars) 0.51 5-4 City of Cupertino Investment Portfolio July 31, 20~8 o Maturi -~- - -p TRUST PORTFOLIO (I~SI'ER TRUST) --- - CASH --- ---- - - 07/31/08 Wells institutional Money Mki Acct 2.17% 2.17% 47,772 47,772 47,772 ~ 0 ~ Total Trust Portfolio 47,772 47,7'12 47,772 0 BOND R~SCRVE PORTFOLIO ~ + ~ Bond Reserve Acct Ambac Assurance Security Bond 1 1 i Bond Payment Acct Wells Treasury Plus Money Mkt 1.38% 1,38% 937 937 937 0 Totai Bond Reserve Portfolio 937 937 937 0 5-5 R.ate of Return~Comparison 5.50% 5.00% 4.50% 4.00% 3.50°k 3.Q0% 2.50°/a ~01 ~\a1 ^0~1 ^~\01 ~~01 ~\~ ~o~ ~o$ ~~ ~~ ~~ ~\a~ t LAIF -r-cupeAino 5-6 COMPLIA,NCE WITH INV ESTMENT POLICY City of Cupertino ~ July 31, 2008 ~ ~ ~ , Cate or Standard Comment Treasury Issues No Iimit Compiies US Agencies No limit Complies Medium Term Corporate Bands 30% with A rating ~ Complies LAIF $40 million Complies Money Market Funds 20% Complies Maximum Maturi#ies 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 ofDeposi# 30% ~ Complies Repurchase Agreements 365 days Complies Reverse Repurchase agreements Prohibited Complies 5-7