FINANCE DEPARTMENT
DATE: April 19, 2024
TO: Honorable Mayor and City Council
VIA: Damien O’Bid, City Manager
FROM: Angela Courter, Administrator Services Director
SUBJECT: INVESTMENT REPORT FOR THE QUARTER ENDED
MARCH 31, 2024
Attached for your information is the quarterly report of investments as of March 31, 2024.
The total cash and investment portfolio book value (cost) held by the City as of March, 2024 was $17,184,600 and total cash and investments held by trustees was $1,195,326.
The cash and investments held by the City include the following components:
Managed Investment Portfolio ($8,777,589), State of CA Local Agency Investment Fund ($6,152), California Asset Management Program (CAMP) Pooled Investment Fund ($7,970,669), Cash/Time Deposits ($355,009), and accrued interest on investments ($75,180). (Earned interest is the interest earned on investments over a specific time period, accrued interest is the interest that an investment has earned, but hasn’t yet been received, and paid interest is the interest that has already been received as payment).
Cash and investments held by the City and the trustees continue to be invested in accordance with the Government Code and the Council Investment Policy as adopted on May 9, 2023.
Council Information
FY 2023-24 3rd Quarter Investment Report
March 31, 2024
During the quarter, one Treasury was purchased in the amount of $621,961.
During the quarter, six investments matured, totaling $1,422,000. The remaining funds were reinvested into CAMP.
Two-year Treasuries yielding 4.23% at the beginning of the quarter ended higher at the end of the quarter at 4.59%, which was an increase of 36 basis points for the quarter.
As of March 31, 2024, the Weighted Yield to Maturity on the Managed Investment Portfolio was 4.56%.
At the end of this quarter, the Weighted Average Maturity of the Managed Investment Portfolio was 1.79 years.
The Federal Open Market Committee (FOMC) meets approximately every six weeks and determines the level of the Federal Funds Rate. At the December 13th meeting, the FOMC voted to maintain the Federal Funds Rate target range at its current level of 5.25-5.50%. At the January 30th meeting, the FOMC voted once again to maintain the Federal Funds Rate target range at its current level of 5.25-5.50%.
Summary from the January 30th meeting:
“Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have moderated since early last year but remain strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5¼ to 5½ percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.
In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as Council Information
FY 2023-24 3rd Quarter Investment Report
March 31, 2024
described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
Finance staff hired Optimized Investment Partners in May 2023 to help improve the investment returns for the city and to ensure compliance with California Government Code by ensuring safety of principal and sufficient liquidity for operations. Ongoing portfolio management activity will continue to be performed in partnership with Optimized Investment Partners, the City Manager, and the Administrator Services Director.
Considering the projected timing of cash receipts and disbursements and the structure of the Pooled Investment Portfolio, the City will be able to comfortably meet overall cash flow needs over the next six months.
If you have any questions, please feel free to contact me at 707-665-4236. *Note: Cash/time deposits not included in WYTM
Excludes Pooled Investments and U.S. Bank Custodial Cash Account Under 1 Year
Maturity Mar 2024 Dec 2023 Change 1 - 2 Years
3-Month 5.46% 5.40% 0.06% 2 - 3 Years
1-Year 5.03% 4.79% 0.24% 3 - 4 Years
2-Year 4.59% 4.23% 0.36% 4 - 5 Years
3-Year 4.40% 4.01% 0.39% Total
5-Year 4.21% 3.84% 0.37%
10-Year 4.20% 3.88% 0.32%
Jan
Feb
Mar 2024 Mar 2023 Mar 2022 Mar 2021 Mar**
4.59% 4.06% 2.28% 0.16% Total for Quarter
Note: Interest Earnings figures do not include capital gains or losses **Prior year interest earnings were booked on a quarterly basis City of Cotati
Investment Report for the Quarter Ended March 31, 2024
Portfolio Summary and Key Statistics
Portfolio Key Statistics
PAR Value 16,821,487 $
U.S. Treasury Yields - Quarterly Comparison $ 29% 2,338,000 Book Value (COST) 16,754,410 $
Market Value 16,746,499 $
Weighted Average Maturity (in years) 1.79
Weighted Yield to Maturity 4.56%
Portfolio Maturity PAR Maturing % Maturing
$ 22% 1,780,000
$ 22% 1,784,000
$ 22% 1,783,000
$ 3% 248,000
$ 100% 7,933,000
Interest Earnings FY2023 FY2024 Change
$ 74,004 - $ $ 74,004
2-Year U.S. Treasury Yield - Historical Data $ 68,300 - $ $ 68,300 $ 70,875 86,266 $ $ (15,391)
$ 213,179 86,266 $ 126,913 $
19.60%
18.06%
8.29%
0.04%
46.61%
5.33% 2.08% CERTIFICATE OF DEPOSIT
FEDERAL AGENCY BOND/NOTE
U.S. TREASURY NOTE
LOCAL AGENCY INVESTMENT FUND
CAMP
CUSTODIAL MONEY MARKET FUND
CASH/TIME DEPOSITS
0%
5%
10%
15%
20%
25%
30%
Under 1
Year
1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years
29%
22% 22% 22%
3%
Portfolio Maturity Distribution
% of
Investment Type Par Value Market Value Book Value Portfolio Managed Investment Portfolio
U.S. Bank Custodial Cash Account 911,665.61 $ 911,665.61 $ 911,665.61 $ 4.96% U.S. Treasury Bond/Note 1,438,000.00 $ 1,418,200.98 $ 1,433,224.52 $ 7.80% Federal Agency Bond/Note $3,150,000 $3,088,346 $3,087,699 16.80% Certificate of Deposit $3,345,000 $3,351,465 $3,345,000 18.20% Managed Investment Portfolio Subtotal $8,844,666 $8,769,678 $8,777,589 47.76% Pooled Investments
State of CA Local Agency Investment Fund $6,152 $6,152 $6,152 0.03% CAMP $7,970,669 $7,970,669 $7,970,669 43.37%
Pooled Investments Subtotal $7,976,821 $7,976,821 $7,976,821 43.40% Cash/Time Deposits $355,009 $355,009 $355,009 1.93%
Accrued Interest $75,180 $75,180 $75,180
Total Cash & Investments Held by the City $17,251,676 $17,176,688 $17,184,600 93.50% Held by Bank Trustee/Fiduciary Funds (1)
Investment Agreements - $ - $ - $ 0.00%
Cash with Fiscal Agents 290,844.54 $ 290,844.54 $ 290,844.54 $ 1.58% Restricted Cash 904,481.35 $ 904,481.35 $ 904,481.35 $ 4.92% U.S. Government - $ - $ - $ 0.00%
Total Held by Bank Trustee/Fiduciary Funds $1,195,326 $1,195,326 $1,195,326 6.50% Total Portfolio $18,447,002 $18,372,014 $18,379,926 100.00% Notes:
1. Reflects bond proceeds and tax levy revenues held by trustee in accordance with bond covenants.
2. Par value is the principal amount of the investment on maturity.
3. Market values contained herein are received from sources we believe are reliable, however we do not guarantee their accuracy.
4. Book value is par value of the security plus or minus any premium or discount on the security.
Summary of Cash and Investments as of March 31, 2024
City of Cotati