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HomeMy WebLinkAboutInvestment Report - Oct 2013 �� � ���-�-� CITY OF PALM DESERT � � FINANCE DEPARTMENT INTEROFFICE MEMORANDUM TO: RACHELLE D. KLASSEN, CITY CLERK FROM: NIAMH ORTEGA, RECORDING SECRETARY��� DATE: DECEMBER 3, 2013 SUBJECT: COMPLIANCE ANALYSIS AND INVESTMENT REPORTS Attached are the Compliance Analysis and Investment Report which was presented and approved at the recent meeting of the Audit, Investment and Finance Committee for the month of October 2013. Please include the report on the upcoming agenda for review and acceptance by City Council. Also included are the approved minutes of the October 2013 meeting for acceptance by the City Council, and the attendance report in progress for 2013. Please feel free to contact me at Ext. 382 if you have any questions. Thank you. nmo Attachment (as noted) CITY COUNCILACTION APPROVF,D n1�,1�1I['D RECEIVEU `�' �i�P OTH ER , � MEETINC DATE ��J����C/3 �� " 't��C�Q � �i ��' _ ��'�r1-�13A�5-�� AYES:J��s�T��/lik���iPr;�l. Gtll��7q�'1�,.�,,-- NOES: N�%�IP- OI�T I � - I� -�� p�SENT: N on� VlE„RI�'�L� ��'��( f AC� T3STAIN: /v or,l� �"" VE,RIFIED [3Y: . �K-�r� ��������°������'���� ���`i'����'���� ���1�� Original on File with City Clcrk's OfFce 1 � • ' ' CITY PORTFC1Li0 CONCENTRATiON LIMITS October 2013 °/a of Investments Book Value Portfolio CALIFORNIA ASSET MANAGEMENT PROGRAM $ 5,095,038.85 2.51% CITY LOAN TO RDA 22,654,999.95 11.1$% WF/L.A.I.F. BOND PROCEEDS 25,008,762.29 12.34% FEDERAL AGENCY--COUPON - 0.00% LOCAL AGENCY INVESTMENT FUND 43,314,565.71 21.37% WELLS FARGO CORPORATE TRUST 7,000,408.71 3.45% CORPORATE MEDIUM-TERM NOTES - 0.00% RIVERSIDE COUNTY TREASURER 94,890,615.29 46.83% TOTAL BEFORE CASH $ 197,964,390.80 97.69% PLUS: CASH $ 4,680,853.49 2.31% GRAND TOTAL $ 202,645,244.29 (1) 100.00% FOOTNOTE: (1) In the Citv of Palm Desert Comprehensive Annual Financial Report("CAFR"), both the City of Palm Desert ("City")and the City's external auditor define total investments as demand deposits, investments in various instruments, and investments held in local government investment pools. The concentration percentages shown above were calculated based on that definition. o a �` H Q � r�i U U - ^ t � � a > «. l9 O i � 'y-' y O a � � � a � > v� a V > o � m � o rn � o � d c� �� N N N O C7 � O � C �W O O O O O O � O p � � � N D M O- C a 7 E � � � .- � •- r- �,N N �- H f0 7 m � . 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Z r � � 01 Z O> � 7 � w A d N W > � j � � N Q Q Q Q Q C Q C V Q A O A N O U � J � H a a # (q (1 c a� E y CO c� j O O C � N 0 n co 0 N m W f7 O O � d N O � a „ � � LL N O Q N N � � � � g � � � _ � N 0 a ° a r 7o- � V N L LLI �M O O N a a �••• O O r o o � E a .�,�p •- •- a U N� �� N T � O O � N'�' �� y � a�o v � 0 j � N � Y � � � O � � n m � M � N a 7 � � O � N � CMp N �O h N � W M � � N V � _ � � N � O d v � d � o �. , o � � � o � � N N � � � � = C ` r�+ M a �w rO1i � ,Q^ � � G� N � V Z � � C � � � � O O O y M f`7 C� 2A a �O NN �� � o0 � a o 0 �� o a�o, : � o a'm � � � � � � z Y U c~ W � 2 � U F- d d > > c d � Q Q eo y � � � �i N Z Z m � � � C � � � > C Q A t N A # (,� �+ C 1� N Q E � � F N � h N � N N O r M O � � Z � f0 a U � N � 7 = i� i�l5 � c� U v}i v}i � � City of Palm Desert Xradw(er tfneoitmen1 tAo/x1 ECONOMIC COMMENTARY The Federal Open Market Committee (FOMC) met on October 30, and left short- term interest rates unchanged. The FOMC noted that while economic activity continued to expand at a moderate pace, the unemployment rate remained elevated. The next and final FOMC meeting for 2013 will be on December 17-18. No changes are expected, due to the downside risks that the ongoing fiscal problems in Washington pose. The recent 16-day partial government shutdown may have cost the economy as much as $24 billion. Janet Yellen, vice chair of the Federal Reserve, has been nominated to succeed Ben Bernanke when his term expires in January 2014. Yellen is expected to continue the current FOMC policy of monetary expansion, if not increase it. The U.S. economy grew at an annualized rate of 2.8% in the third quarter, as businesses cut investments, and consumers moderated their spending. Much of the growth came from a one-time buildup of business inventory. Without this buildup, the growth rate would have been only 2.0%. A recent decline in the national unemployment rate was due to a drop in labor force participation. Morgan Stanley economists are predicting the weakest holiday -shopping season in five years. At the Wall Street Journal's CEO Council meeting, President Obama said that the U.S. should "scrap" the federal debt ceiling in order to avoid political battles. 91ai S giketa, " City Treasurer * Certified California Municipal Treasurer PORTFOLIO STATISTICS 2013 Oetei4ex Capital Markets Team City Treasurer Paul S. Gibson, C.C.M.T. Deputy City Treasurer Thomas W. Jeffrey, J.D., M.B.A. Investment Objectives The treasurer shall invest all public monies in a manner that ensures safety of principal; sufficient liquidity to finance the City's expenditures; and the highest yield possible after the previous two objectives have been met. STATISTICS OCT-13 SEP-13 AUG-13 JUL-13 JUN-13 MAY-13 Thousands of Dollars Month -End Book Value Month -End Market Value Paper Gain (Loss) Prior Year Book Variance Interest Earnings Yield -To -Maturity Weighted Maturity (Days) Effective Duration $ 202,645 $ 204,899 $ 220,313 $ 220,370 $ 218,688 $ 209,809 $ 202,645 $ 204,899 $ 220,319 $ 220,373 $ 218,697 $ 209,821 $ - $ - $ 6 $ 3 $ 9 $ 12 $ 7,589 $ 5,909 $ 13,559 $ 14,565 $ 1,885 $ (8,277) $ 53 $ 51 $ 59 $ 59 $ 57 $ 53 0.31 % 0.30% 0.31 % 0.32% 0.32% 0.32% 1 1 12 26 26 29 0.00 0.00 0.00 0.00 0.01 0.01 All data as of October 31, 2013 Dollars in Thousands Maturities Market Value < 1 M $ 175,309 < 2M < 3M < 6M < 1Y < 2Y < 3Y < 4Y < 5Y Total: $ 175,309 Ratings Market Value AAA or Aaa $ 106,986 AA orAa A Unrated 90,978 Total: $ 197,964 Assets Market Value County Pool 94,891 LAIF 43,314 WF/LAIF Bond Proceeds 25,009 City Loan to RDA 22,655 MTN CAMP 5,095 WF/Bond Proceeds 7,000 Agencies Total: $ 197,964 Month Nov13 Dec Jan13 Feb Mar Apr May Jun Jul Aug Sep Oct PORTFOLIO CHARACTERISTICS October 2013 City Yield LAIF Yield Variance 0.37 0.32 0.04 0.34 0.33 0.01 0.35 0.30 0.05 0.34 0.29 0.05 0.34 0.29 0.06 0.33 0.26 0.06 0.32 0.25 0.08 0.32 0.24 0.08 0.32 0.27 0.05 0.31 0.27 0.04 0.30 0.26 0.04 0.31 0.27 0.04 Maturities Distribution I 100 100 80 - e 0 60 1 40 a 20 0 Credit Quality I Asset Allocation I 0 0 0 0 0 0 0 0 <1M <2M <3M <6M <1Y <2Y <3Y <4Y <5Y AA or Aa 0% Unrated 46% County Pool 48% MTN 0% AAA or Aaa 51% A 0% LAIF 22% WF/LAIF Bond Agencies Proceeds 0% 13% WF/Bond CAMP Proceeds 3% 3% City Loan to RDA 11% i Performance N 0.40 0.30 - 0.20 - b 0.10 j 0.00 - I' Nov13DecJan13Feb Mar Apr May Jun Jul Aug Sep Oct OLAIF Yield OCityYield 7 CITY OF PALM DESERT TREASURER'S OFFICE PAGE 2 OF 3 STATEMENT OF COMPLIANCE October 2013 The investment of the City of Palm Desert securities portfolio is governed by California Government Code Section 53601 and by the Palm Desert Statement of Investment Policy. The City investment policy is more conservative than State law. The Palm Desert Audit, Finance, and Investment Committee, and the Palm Desert City Council review the City investment policy annually. For the month ended October 31, 2013, the City investment portfolio was in compliance with all applicable state and local laws and regulations. The City Treasurer's Office continued to pursue conservative and prudent investment strategies, based upon the stated objectiveE of safety, liquidity, and yield. Barring unforeseen events, the City Treasury should have sufficient cash to finance City expenditures for the next six months. In addition, portions of the City investment portfolio could be liquidated in order to meet any significant, unexpected cash requirements. Interactive Data Services provided the market value prices for securities in the City investment portfolio. All balances are bank balances. Respectfully submitted, .r S. cikatz, City Treasurer CA Govt Code 53601(a) 53633 53601(b) 53601(c) 53601(d) 53601(e) 53601(f) 53601(g) 53601(h) 53601(i ) 53601(1) 53601(j) 53601(k) 53601(1) 53601(m) 53601(k) 53601(n) 16429.1(b) SUMMARY OF AUTHORIZED INVESTMENTS California Government Code Maximum Investment Category Maturity Palm Desert Bonds Demand Deposits U.S. Treasuries CA State Debt CA Local Agency Debt Federal Agencies Bankers's Acceptances Commercial Paper Negotiable CDs Repos Reverse Repos Medium -Term Notes Money Market Funds Trust Indenture Debt Secured Bank Deposits Local Government Investment Pools Mortgage -Backed Securities L.A.I.F. 5 Years No Limit 5 Years 5 Years 5 Years 5 Years 180 Days 270 Days 5 Years 1 Year 92 Days 5 Years 90 Days 5 Years 90 Days 5 Years No Limit Maximum Minimum Limit Quality No Limit No Limit No Limit No Limit No Limit No Limit 40% 25% 30% No Limit 20% 30% 20% No Limit No Limit 20% $50MM/Acct A-1/P-1 A AAA & Aaa AAA & Aaa or Advisor A (Issuer) & AA (Security) Maximum Maturity No Limit 5 Years 5 Years 180 Days 270 Days 5 Years 30 Days City Investment Policy Maximum Minimum % of City Limit Quality Portfolio No Limit No Limit Not Authorized Not Authorized No Limit 40% A-1 or P-1 25% A-1 or P-1 30% AA- or Aa3 20% Not Authorized 5 Years 90 Days 30% 20% A AAA & Aaa 3.5% Not Authorized Not Authorized 90 Days 50% (1) AAA & Aaa or Advisor 50.5% Not Authorized No Limit I $50MM/Acct I Footnotes: (1) Maximum concentration limit for local agency investment pools, excluding bond proceeds. (2) Total does not include the City Loan to RDA, and cash. (2)1 34.5% 88.6% CITY OF PALM DESERT TREASURER'S OFFICE PAGE 3 OF 3