CITY COUNCIL STAFF REPORT
April 1, 2025 {{section.number}}{{item.number}}
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 DECEMBER 31, 2024
RECOMMENDATION:
Examine the quarterly Reports on Investments and direct them to be 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 $237.8 million in cash and investments as of December 31, 2024.
ANALYSIS:
This report covers the period October 1, 2024, through December 31, 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 $ 53,826,335 23.50%
San Diego County Treasurer's Pooled Investment Fund 7,779,885 3.40% CAMP 90,767,308 39.63%
US Bank Loan Repayment Fund* 17,067,793 7.45%
CalPrivate Business Money Market 142,451 0.06%
Certificates of Deposit with San Diego Private Bank 250,000 0.11% Certificates of Deposit with San Diego Private Bank 41,194,130 17.98% US Money Market 17,680 0.01%
US Treasury Bills - 0.00%
OPEB and Pension Trust Investment Portfolio with PARS** 15,883,000 6.93% Sub-Total Investments 226,928,583 99.07%
City investment earnings for the period October 1, 2024 through December 31, 2024, were $2,403,389, or 37.16% of the fiscal year budget projection of $6,467,808, with returns averaging
4.37% annually. The following schedule shows a comparison between the book value, market value, and year to date earnings of investments for the current period, July through September 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 October 1, 2024, through December 31, 2024, were $101,757. Attached are investment summaries for the City and Successor Agency and monthly reports for December 31, 2024, with market values for all investments.
Market Update
❖ At its March meeting, the Federal Open Market Committee (FOMC) kept the federal funds rate target range at 4.25%–4.5%, where it has remained since December 2024. ❖ The Consumer Price Index (CPI) declined slightly year-over-year to 2.8% in February, down from 3.0% in January 2025.
❖ Tariffs and Trade:
o Tariffs on Mexico and Canada took effect in early March with a one-month exemption for autos and any items covered under the United States-Mexico-Canada Trade Agreement (“USMCA”).
o An additional 10% tariff was levied on China, and a 25% tariff on steel and aluminum was set to take effect on March 12.
Demand Deposit Accounts:
US Bank Operating Account 1,626,492 0.71%
US Bank HRA Account 26,204 0.01%
US Bank FSA Account 95,232 0.04%
CalPrivate Bank Money Market Account 377,615 0.16%
Sub-Total Demand Deposit Accounts 2,125,543 0.93%
Total All Investments $ 229,054,126
* Resctricted for public use capital improvements
** Restricted for Other Post Employment Benefits (OPEB) and Pension stablization PARS Market Value as of December 31, 2024 totaled $21,676,300 Book value of Market value of FYTD Investment
As of : Investments Investments Earnings
Oct - Dec FY 2023-24 $ 216,680,998 $ 219,787,729 $ 3,539,676 3.27% Oct - Dec FY 2024-25 226,928,583 236,388,230 4,957,408 4.37% Average Investment
AnnualReturn
Book Value
% of Total
Investments
Local Agency Investment Fund $ 8,734,787 99.99%
Cash in Bank at Union Bank 781 0.01%
Total Cash and Investments $ 8,735,568 100.00%
o The market is also focusing on the potential for reciprocal tariffs to be announced in early April, which may be met by retaliatory tariffs.
❖ These tariffs are expected to increase prices for affected products, impacting both businesses and consumers. The resulting inflationary pressure may limit the Federal Reserve’s ability to reduce interest rates in the near term.
Allocation Changes for Quarter-Ending Changes for September 30, 2024:
❖ The City continued to rebalance the Local Agency Investment Fund (LAIF) and San Diego County Treasurers’ Pooled Investment Fund (SDCTPIF) to $53.8M and $7.8M, respectively.
As of December 2024, the funds are yielding 4.71% and 3.61%, respectively. ❖ US Treasury Bills: Approximately $10.4M of 26-week US Treasury Bills matured in November.
After evaluating available reinvestment rates, the matured funds were transferred out of the account. A 52-week Certificate of Deposit Account Registry Services (CDARS) was purchased with the proceeds, yielding 4.3%.
❖ CDARS: Approximately $10.5M of 52-week CDARS matured in December and was repurchased for the same term, yielding 4.2%.
❖ While the City maintains exposure to longer-term investments through its allocations with LAIF and SDCTPIF, staff plan to explore other investment products with longer terms to further diversify investment durations.
❖ 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:
The City Council may decline to receive the report and provide further direction to staff.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not Applicable.
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
1. Treasurer’s Report on Investments as of December 31, 2024 Submitted By: Administrative Services Department / John Kim