05 Treasurer's Report 12/05
City Hall
10300 Torre Avenue
Cupertino, CA 95014-3255
Telephone: (408) 777-3220
FAX: (408) 777-3366
CITY OF
CUPErQ1NO
DEPARTMENT OF ADMINISTRATIVE SERVICES
SUMMARY
Agenda Item No. C;
Meeting Date: February 7, 2006
SUBJECT
Accept the Treasurer's Investment Report for December 2005.
BACKGROUND
Investments
Attached is the Treasurer's Investment Report for the period ended December 31,2005.
The report includes all funds in control of the City.
The market value ofthe City's portfolio totaled $40.2 million at December 31, 2005, with
a maturity or face value of $40.6 million. The market value of the portfolio is lower than
their maturity value because as short-term interest rates have risen, older securities in the
portfolio with low fixed interest rates are valued at a lower price in the market. This
difference between market and maturity value is an unrealized paper loss at this specific
date. At maturity however, market and maturity value is the same and the City intends to
hold these investments until maturity and redeem their full value.
The Local Agency Investment Fund (LAIF) yielded 3.81% in December compared to
3.64% in the previous month and 2.1% a year ago. The City's portfolio as a whole
yielded 3.56% in December up from 3.29% the previous month. LAIF and City yields
continue to rise following the movement of short-term interest rates. The spread between
the City's rate ofretum and its LAIF benchmark is starting to narrow. Investment activity
for the month consisted of the callback of one Federal agency security for $1 million and
the subsequent purchase of three agency securities totalling $2.9 million, yielding 4.7 to 5
percent with maturities of two to five years. The portfolio also added two FDIC-insured
bank certificates of deposit for about $200,000, yielding 4.8 and 4.9 percent.
The City's cash and investment holdings increased $464,000 during December with
property tax receipts coming in from the County.
)-(
Pn'nted on Recycled Paper
The investments of the City of Cupertino are in full compliance with our City investment
policy and/or State law, and are tiered to provide the City with sufficient cash flows to
pay its obligations over the next six months.
Revenue and expenditure trends normally discussed in this report will be presented
separately in a mid-year budget report this month.
RECOMMENDATION:
Accept the Treasurer's Investment Report for December 2005.
Submitted by:
Approved for submission:
.Cl----
.' /-~~
~ V;--' --...
David Woo
Deputy Treasurer
'-R. AO U CA... Got U(}
-La. David W. Knapp
CJ'· City Manager
S-~2.
City of Cupertino
December 31, 2005
ACTIVITY DATE COUPON ADJUSTED MATURITY MARKET UNREALIZED
IIY DESCRIPTION , RATE cOST VALUE VALUE PROFIT/LOSS
SECURITIES CALLED
12/05103 12/05/07 ItiNMA canaDIe, step coupon 2.63% 1,000,000 1,000,000
.
SECURITIES PURCHASED
12113105 12128/07 'FCB 4.75% 1,000,956 1,000,000
12128/05 12128/09 F~HLB callable 5.04% 915,000 915.000
12130105 12130/09 Meridian Bank 4.80% 99,000 99,000
----r2ï15105 12/15/10 FHLMC callable ., 5.04% 1,000.000 1,000,000
-12128/05 12128/10 Nat') Bank of New York City ,. 4.90% 97,000 -. 97,000
.
,. -- ,.
-- . CÜRRENT PORTFOLIO .. _u__
CASH' .
.. 12/31105 Wells Fargo - Workers Comp Chedcing 29;403 29,403 29,403' ' 0
--- l2i31/05 Wells Fargo - Regular Checking 750,000 750,000 750,000 0
.., 12/31105 Wells Fargo - Money Market Checkin 2.89% 223,31, 223,325 223,325 0
- . 1,002,728 1,002,728 1,002,728 . 0
-. --
LAIF .
-.. 'TI731/05 LAIF --State Pool Ht'" 0,0'" ,UUU o,o"',uuu ~ U
NEGOTIABLE CERTIFICATES OF DEPOSIT .
03124/04 09/24/07 Signature Bank Nat'l Assn 2.70% '99,000 99,000 95,303 (3,697)
03/17/04 03/17/08 American Trust Fed Savings Bank 3.00% 99,000 99,000 94,844 (4,156)
03/19/04 03/19/08 Plantersfirst Cordell GA 3.05% - 98,000 98,000 94,011 (3,989)
03124/04 03/24/08 Badger State Bank . 3.00% 99,000 99,000 94,806 (4,194)
--OJ/24/04 03/24/08 Wilmot State Bank. 3.00% 99,000 99,000 94,806 (4,194)
03126/04 03126/08 Privatebank & Trust 3.20% 99,000 99,000 95,209 (3,791)
04/0'1104 04/07108 Cole Taylor Bank ,step 2.25% --,- 97,000 97,000 94,549 (2,451)
03/26/04 09/26/08 Southcoast Communtiy Bank 3.20% 98,000 98,000 93,378 (4,622)
03/17/04 03/17/09 Peoples State Bank 3.4Ô% 99,000 99,000 93,983 (5,017)
~-03/24/04 03124/09 Washita State Bank. 3.35% 99,000 99,OÕO 93,804 (5,i96)
12/30/05 12/30/09 Meridian Bank 4.80% , 99,000 99,000 97,577 (1,423)
12/28/05 12128/10 Nat'l Bank of New York City 4.90% 97,000 97,000 95,323 (1,677)
--
1,182,000 1,182,000 1,137,593 (44,407)
--
MONEY MARKET FUNDS
12/31105 Wells Fargo Government 4.08% 3,754,726 3,754,726 3,754,726
'3,'754,726 3,754,726 3,754,726 0
--,
AGENCY NOTES -
08124/04 02/24/06 FHLB callable -... 2.75% 1,200,000 1,200,000 l,Ï96,628 (3,372)
-01121103 07/21/06 FHLB callable -- 2.20% 500,000 500,000 493,440 (6,560)
08/07/03 --"08107/06 FHLB callable, step coupon "-.-.- 2.33% 500,000 500,000 4'94,530 (5,470)
-08/11/03 08/11106 FHLB callable n 2.50% 2,400,000 2,400,000 2,369,256' (30,744)
03/081M 12126106 FHLMC callable ....- 2.30% 794,786 800,OW 780,976 (13,810)
07/09193 04/15107 FHLMC siries 1231 . 7:-Oí'f% 54,030 51,952 51,870 - . (2'J6Oj
04/30/04 04/30/01 FHLMC caHable - 3.3Ú~·- 499,989 500,000 490,605 (9,384)
12/22/03 06121í07 FNMA jjo% 1,000,000 1,000,000 979,380 (20,620)
04/18/05 10118107 FHLB adjustable mte '3"'-57% 1,500,000 1,,00,000 1,498,395 (1,605)
-ö4ïI4104 12ï03/07 FNMA callable -- 2.50% 993,080- 1,000,000 959,060 (34,020)
----r2ïf3/05 12/28/07 FFCB ,. 4.75% 1,000,956 1,000,000 1,000,630 (326)
----04ï23/04 01/23/08 FHLB éiillable 3.15% 1,491,632 1,500,000 1,454,070 (31',562)
5"'-3
City of Cupertino
December 31, 2005
ACTIVITY DATE cOUPuN ADJUSTED MATURITY MAKl'-t1 UNREALIZED
, DESCRIPTION RATE cu.T VALUE VALUE PROFIT/LOSS
02125/04 02/25108 FHLMC 3.13% 1,000,000 1,000,000 967,400 (32,6ðO)
-(1121/05 06123108 FFCB 5.79% 1,026,298 1,000,000 1,024,680 (1,618)
01112/04 08/06/08 FHLB callable, step coupon 3.50% 998,933 1,000,000 983,130 (15,803)
04/29104 10129/08 FHLB callable, step coupon 3.25% 300,000 300,000 292,500 (7,,00)
12/15103 12115/08 FHLMC callable, step coupon 4.00% 1,000,000 1,000,000 987,800 (12,200)
1--' 12/30/0J 12/30/08 FHLMC callable, step coupon 4.75% 1,000,000 1,000,000 1,001,100 1,100
f--03ï23ïö4 01/30/09 FNMA callable , 2.50% 500,000 500,000 499,220 (780)
03/16/04 03/16/09 FNMA callable - 4.01% <;600,000 1,600,000 -- 1,563,008 (36,992)
1--. 03/30/04 ----03ï3öïö9 FHLB callable, štep coupõn 3.50% 600,000 600,000 593,814 (6,186)
'----o4ßOlõ4 -04/30/09 FHLB éal1able, step coupOn 3.13% 1,000,000 1,000,000' 992,810' (7,190)
12128/05 12128/09 FHLB callable 5.04% . 915,000' ' 915,000 915,OÖÖ 0
-¡mo/õ5 -'04/07/10 FFCB callable .. 3.70% 949,947 1,000';000 957,810 '7,863'
-- 11121105 -07112/10 FHLMC -- 4.13% 975,571 1,000,000 975,000 15m
12/15105 12115/10 FHLMt callabte--- 5.04% 1,000,000 1,000,000 1,002,100 2,föü
-, .--'--
- 24,800,222 24,866,952 24,524,212 (276,010)
-- -- -
US GOVERNMENT SECUl<ITIES
03/31105 08/3l7õ6 TIs Treasury Note 2.38% 982,812 1,000,000 986,720 3,908
- 982,812 1,000,000 986,720 3,908
_.
lotaI Manage i PortfolÍo ,. 4",549,488 -40,633,406
, , ,
Average Y¡eIdf 3.56%,
Average Length to Maturity (in years) 1,53
TRUST & AGENCY PORTFOLIO
CERTIFICATES OF DEPOSIT,
07/27/01 I 12/31/05 ¡Cupertino Nat1(KesterTrust) 2.93% 42,911 42,911 42,911 0
I
Total Trust & Agency Portfolio 42,911 42,911 ",>" °
BOND RESERVE PORTFOLIO
Bond Reserve Acet #078791 Wells Fargo Treasury Plus Money Mk 3.40% 11,166 11,166 11,166 0
Bond Reserve Acct #078793 Ambac Assurance Security Bond I 1 I
~ñd Payment Acct #078794 Wells Fargo Treasury Plus Money Mk 3.40% 1,131,369 1,131,369 1,131,369 0
Total Bond Reserve Portfoli 1,142,535 1,142,535 1,".,0>' °
::;~ y
4.50%
4.00%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
12/04
Investments by Type
Managed Portfolio
US Treasunes
2%
Rate of Return Comparison
Cash
3%
Money
Market
9%
1/05
4/05
7/05
9/05
5105
6/05
6/05
2105
3105
10/05 11/05 12/05
I:::~J
')~)
COMPLIANCE WITH INVESTMENT POLICY
----
City of Cupertino
December 31, 2005
. .
--
Category Standard Comment
Treasury Issues No limit Complies
,
US Agencies (eg FHLMC) No limit Complies
,. -,
Medium Tenn Corporate Bonds/Notes 30% with A rating Complies
-,
LAIF $40 million Complies
Money Market Funds 20% Complies
-,-
Maximum Maturities 25% up to 15 years Complies
" Remainder up to 5 years Complies
--
Per Issuer Max 10% (except LAlF) Complies
Bankers Acceptances 180 days & 40% Complies
Commercial Paper 270 days & 25% Complies
Negotiable Certificates of Deposit 30% Complies
Repurchase Agreements 365 days Complies
Reverse Repurchase agreements Prohibited Complies
s---b