CITY COUNCIL STAFF REPORT
September 3, 2024 {{section.number}}c
FILING OF THE TREASURER’S REPORTS ON INVESTMENTS FOR THE CITY AND THE
SUCCESSOR AGENCY TO THE COMMUNITY DEVELOPMENT AGENCY FOR THE CITY OF CORONADO FOR THE QUARTER ENDING JUNE 30, 2024
RECOMMENDATION:
Examine the quarterly Reports on Investments and order them filed.
BACKGROUND:
In compliance with the City’s Investment Policy, staff prepares an investment report and presents this to the City Council for review following the close of each quarter. The report presents investments for both the City and the Successor Agency portfolios. Combined, the book value of these two portfolios totals approximately $266.1 million in cash and investments as of June 30, 2024.
ANALYSIS:
This report covers the period April 1, 2024, through June 30, 2024. Attached is a summary that identifies all investments. This report highlights year-to-date investment earnings relative to the annual budget.
City cash, investments and the percentage of total are as follows:
Book Value
% of Total
Investments
Investments:
Local Agency Investment Fund $ 45,023,988 19.10%
San Diego County Treasurer's Pooled Investment Fund 23,267,396 9.87% CAMP 70,000,000 29.70%
US Bank Loan Repayment Fund* 16,798,959 7.13%
CalPrivate Business Money Market 9,379 0.00%
Certificates of Deposit with San Diego Private Bank 250,000 0.11% Certificates of Deposit with San Diego Private Bank 20,237,161 8.58% US Money Market 1,944 0.00%
US Treasury Bills 40,145,803 17.03%
OPEB and Pension Trust Investment Portfolio with PARS** 15,883,000 6.74% Sub-Total Investments 231,617,630 98.26%
City investment earnings for the period April 1, 2024 through June 30, 2024, were $2,476,540, or
52.1% of the fiscal year budget projection of $4,753,720, with returns averaging 3.52% annually. The following schedule shows a comparison between the book value, market value, and year to date earnings of investments for the current period, April through June 2024, and the same period of last Fiscal Year.
Successor Agency cash, investments and the percentages of the total are as follows:
Earnings for the Community Development/Successor Agency for the period April 1, 2024 through June 30, 2024 were $153,587. Attached are investment summaries for the City and Successor Agency and monthly reports for June 30, 2024, with market values for all investments.
Market Update and Investment Allocation Changes
• The federal fund rate has remained at 5.25% to 5.5% since July 2023. The Federal Reserve seems to be transitioning to a more balanced consideration of maximum employment and price stability. Federal Reserve Chair Jerome Powell hinted that a rate cut may be on the table at the September meeting.
• July 2024 Consumer Price Index (CPI) of 2.9% is the lowest year-over-year change since March 2021 and continued to make gradual progress towards the Fed’s 2% target. Federal Reserve Chair Powell noted that recent readings have added to the Fed’s confidence that inflation is moving sustainably toward 2%.
• With the recent update of broad economic cooling and the potential start of the Fed’s rate cut cycle, bond, and fixed-income market yields are trending downwards accordingly. The City’s investment allocation continues to focus on higher-yielding short—to mid-term products with maturity periods of 12 months or less.
Demand Deposit Accounts:
US Bank Operating Account 3,608,258 1.53%
US Bank HRA Account 91,175 0.04%
US Bank FSA Account 60,041 0.03%
CalPrivate Bank Money Market Account 350,000 0.15%
Sub-Total Demand Deposit Accounts 4,109,474 1.74%
Total All Investments $ 235,727,104
* Resctricted for public use capital improvements
** Restricted for Other Post Employment Benefits (OPEB) and Pension stablization PARS Market Value as of June 30, 2024 totaled $20,840,267 Book value of Market value of FYTD Investment
As of : Investments Investments Earnings
Apr - Jun FY 2022-23 $ 205,036,174 $ 206,106,160 $ 3,737,636 1.82% Apr - Jun FY 2023-24 231,617,630 236,195,084 8,147,308 3.52% Average Investment
AnnualReturn
Book Value
% of Total
Investments
Local Agency Investment Fund $ 30,046,617 98.92%
Cash in Bank at Union Bank 327,943 1.08%
Total Cash and Investments $ 30,374,561 100.00%
Quarter-Ending Changes for June 30, 2024:
• Rebalanced the Local Agency Investment Fund and San Diego County Treasurers’ Pooled Investment Fund to $45.0 million and $23.3 million, respectively. As of June 2024, the funds are yielding 4.55% and 3.80%, respectively.
• US Treasury Bills: Reinvested $10.1 million of fully matured 13-week US Treasury Bills to 23- week US Treasury Bill, yielding 5.22%.
• $40.0 million was transferred to the California Asset Management Program (CAMP) account, yielding 5.43% as of June 2024.
• Consolidated and renewed two (2) $5.0 million 6-month Certificate of Deposit Account Registry Services (CDARS), into $10.2 million 12-month CDARS, yielding 5.3%. • All investment allocation changes comply with the City’s investment policy and sufficient liquidity is maintained for operating needs.
FISCAL IMPACT:
The City receives funds from many sources, which it invests according to the City of Coronado Investment Policy. All investments are made with the primary objectives of safety, liquidity, and yield, in that order. The funds of the Successor Agency to the Community Development Agency are also invested according to the City of Coronado Investment Policy.
ALTERNATIVE:
None.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not Applicable.
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
1. Treasurer’s Report on Investments as of June 30, 2024 Submitted By: Administrative Services Department / John Kim