CC 2015-02-24_08b Statement of Investment DepositsMEMORANDUM
TO: CITY COUNCIL
FROM:
BY:
SUBJECT:
DEBBIE MALIC~AT, DIRECTOR OF ADMINISTRATIVE SERVICES Jjir--
RYAN CORNELL, ACCOUNTING SUPERVISOR~
CONSIDERATION OF STATEMENT OF INVESTMENT DEPOSITS
DATE: FEBRUARY 24, 2015
RECOMMENDATION:
It is recommended the City Council receive and file the attached report listing of investment
deposits of the City of Arroyo Grande, as of January 31, 2015, as required by Government Code
Section 53646(b).
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is no funding impact to the City related to these reports. However, the City does receive
interest revenue based o'n the interest rate of the investments.
No or minimal future staff time is projected.
BACKGROUND:
This report represents the City's investments as of January 31, 2015. It includes all investments
managed by the City, the investment institution, investment type, book value, maturity date, and
rate of intere~t.
Over the past year, the City has had a dramatic change in its portfolio. In December of 2013,
the City had approximately 57% of its entire portfolio invested in the State's Local Agency
Investment Fund (LAIF), 28% in agency bonds, and 15% invested in certificates of deposit. Due
to the low interest rates provided in LAIF (currently 0.26%), on January 15, 2015, the City
purchased two agency bonds in the amount of $5 million. As a result, 61 % of the City's entire
portfolio is now invested in agency bonds, 28% in LAIF, and 11 % in certificates of deposit
Regardless, as of January 31, 2015, the investment portfolio was in compliance with all State
laws and the City's investment policy ..
ANALYSIS OF ISSUES:
The Director of Administrative Services has historically submitted to the City Council a monthly
report, providing the following information:
1. Type of investment.
2. Financial institution (bank, savings and loan, broker, etc).
3. Date of maturity.
Item 8.b. - Page 1
CITY COUNCIL
CONSIDERATION OF INVESTMENT DEPOSITS
FEBRUARY 24, 2015
PAGE2
4. Principal amount.
5. Rate of interest.
6. Current market value for all securities having a maturity of more than 12 months.
7. Relationship of the monthly report to the annual statement of investment policy.
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
Recommended Alternative -Approve staff's recommendation to receive and file the
attached report listing the investment deposits.
Do not approve staff's recommendation
Provide direction to staff
ADVANTAGES:
Safety of principal is the foremost objective of the City. Investments are undertaken in a
manner that seeks to ensure the preservation of capital in the overall portfolio.
DISADVANTAGES:
Some level of risk is present in any investment transaction. Losses could be incurred due to
market price changes, technical cash flow complications such as the need to withdraw a non-
negotiable Time Certificate of Deposit early, or even the default of an issuer. To minimize such
risks, diversifications of the investment portfolio by institution and by investment instruments are
being used as much as is practical and prudent.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, February 19, 2015. The Agenda and
report were posted on the City's website on Friday, February 20, 2015. No public comments
were received.
Attachments:
1. Portfolio Summary: January 31, 2015
Item 8.b. - Page 2
CITY OF
Investments
Local Agency Investment Fund
Certificates of Deposit
Redding Bank of Commerce
Mission Community Bank
Rabobank
Heritage Oaks Bank
Cathay Bank
Silvergate Bank
BMW Bank
Total Certificates of Deposit
Agency Bonds
FICO Strip Prin
Federal Home Loan Mtg Corp
Federal National Mortgage Assn
Federal National Mortgage Assn
Federal Farm Credit Bank
Federal National Mortgage Assn
Total Agency Bonds
$
Book Value
5,991,063.83
250,000.00
1,000,000.00
255,706.16
100,493.30
248,000.00
249,000.00
245,000.00
2,348,199.46
2,496,606. 72
1,499,007.00
2,423,035.90
1,965,062.00
1,995,290.00
2,497,680.00
12,876,681.62
TOTAL INVESTMENTS $ 21,215,944.91 :::::::::==============
* Effective Interest Rate
CITY OF ARROYO GRANDE
Portfolio Management
Portfolio Summary
January 31, 2015
Interest
Interest Rate Rate PY Date of Purchase
0.262% 0.244%
1.410% March 22, 2012
1.040% July 1, 2012
0.990% September 28, 2012
0.500% November 21, 2014
0.750% August 30, 2013
0.900% November 14, 2012
2.000% August 30, 2013
0.840% * January 15, 2015
1.300% September 17, 2014
1.060% September 17, 2014
1.250% February 14, 2014
1.690% April 14, 2014
1.550% January 15, 2015
Term
36 mos
36 mos
36mos
13 mos
30 mos
54mos
60 mos
360 mos
42 mos
66 mos
60 mos
60 mos
84mos
ATTACHMENT 1
City of Arroyo Grande
300 E. Branch St.
Arroyo Grande, CA 93420
Phone: (805) 473-5400
Maturity Date
March 22, 2015
June 30, 2015
September 28, 2015
December 21, 2015
February 29, 2016
May 15, 2017
August 30, 2018
November 30, 2017
January 30, 2018
April 30, 2018
January 30, 2019
March 27, 2019
October 4, 2019
% of Portfolio
28.238%
1.178%
4.713%
1.205%
0.474%
1.169%
1.174%
1.155%
11.068%
11.768%
7.065%
11.421%
9.262%
9.405%
11.773%
60.693%
100.000%
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