FINANCE DEPARTMENT
DATE: July 16, 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
JUNE 30, 2024
Attached for your information is the quarterly report of investments as of June 30, 2024.
The total cash and investment portfolio book value (cost) held by the City as of June 30, 2024 was $18,898,657 and total cash and investments held by trustees was $745,227.
The cash and investments held by the City include the following components:
Managed Investment Portfolio ($7,750,548), State of CA Local Agency Investment Fund ($6,218), California Asset Management Program (CAMP) Pooled Investment Fund ($8,724,821), Cash/Time Deposits ($2,346,220), and accrued interest on investments ($70,849). (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 4th Quarter Investment Report
June 30, 2024
During the quarter, one Certificate of Deposit matured in the amount of $150,000.
No new investments were purchased.
Two-year Treasuries yielding 4.59% at the beginning of the quarter ended higher at the end of the quarter at 4.71%, which was an increase of 12 basis points for the quarter.
As of June 30, 2024, the Weighted Yield to Maturity on the Managed Investment Portfolio was 4.55%.
At the end of this quarter, the Weighted Average Maturity of the Managed Investment Portfolio was 1.58 years.
The Federal Open Market Committee (FOMC) meets approximately every six weeks and determines the level of the Federal Funds Rate. At the June 12th meeting, the FOMC voted to maintain the Federal Funds Rate target range at its current level of 5.25-5.50%.
Summary from the June 12th meeting:
“Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. In recent months, there has been modest further progress toward the Committee's 2 percent inflation objective.
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 have moved toward better balance over the past year. 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 5-1/4 to 5-1/2 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. The Committee is strongly committed to returning inflation to its 2 percent objective.
Council Information
FY 2023-24 4th Quarter Investment Report
June 30, 2024
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.
Par Value (1) Market Value (2) Book Value (3)
Cash & Investments Held by District
Investment Portfolio
Managed Investments
U.S. Bank Custodial Cash Account $ 34,625 $ 34,625 $ 34,625 0.18% U.S. Treasury Bill/ Note 1,438,000 1,423,443 1,433,225 7.61% Federal Agency Bond 3,150,000 3,095,412 3,087,699 16.40% Certificate of Deposit 3,195,000 3,186,775 3,195,000 16.97% Managed Investments Subtotal $ 7,817,625 $ 7,740,254 $ 7,750,548 41.17% Pooled Investments
State of CA Local Agency Investment Fund $ 6,218 $ 6,218 $ 6,218 0.03% CAMP 8,724,821 8,724,821 8,724,821 46.34%
Pooled Investments Subtotal $ 8,731,039 $ 8,731,039 $ 8,731,039 46.37% Investment Portfolio Subtotal $ 16,548,664 $ 16,471,294 $ 16,481,588 87.54% Cash/Time Deposits $ 2,346,220 $ 2,346,220 $ 2,346,220 12.46% Funds Available for Investment $ 18,894,884 $ 18,817,514 $ 18,827,808 100.00% Accrued Interest $ 70,849 $ 70,849 $ 70,849
Total Cash & Investments Held by the City $ 18,965,733 $ 18,888,363 $ 18,898,657 Cash & Investments Held by Trustee
Investment Agreements $ - $ - $ -
Cash with Fiscal Agents 301,247 301,247 301,247
Restricted Cash 443,980 443,980 443,980
U.S. Government
Total Cash & Investments Held by Trustee $ 745,227 $ 745,227 $ 745,227 Total Portfolio 19,710,961 $ 19,633,590 $ 19,643,884 $
Notes:
1. Par value is the principal amount of the investment on maturity.
2. Market values contained herein are received from sources we believe are reliable; however, we do not guarantee their accuracy.
3. Book value is par value of the security plus or minus any premium or discount on the security.
City of Cotati
Summary of Cash and Investments for the Quarter Ended June 30, 2024 Portfolio Assets % of Portfolio
*Note: Cash/time deposits not included in WYTM
Excludes Pooled Investments and U.S. Bank Custodial Cash Account Under 1 Year
Maturity Jun 2024 Mar 2024 Change 1 - 2 Years
3-Month 5.48% 5.46% 0.02% 2 - 3 Years
1-Year 5.09% 5.03% 0.06% 3 - 4 Years
2-Year 4.71% 4.59% 0.12% 4 - 5 Years
3-Year 4.52% 4.40% 0.12% Total
5-Year 4.33% 4.21% 0.12%
10-Year 4.36% 4.20% 0.16%
Apr
May
Jun 2024 Jun 2023 Jun 2022 Jun 2021 Jun
4.71% 4.87% 2.92% 0.25% Total for Quarter
Note: Interest Earnings figures do not include capital gains or losses $ 219,806 102,475 $ 117,331 $
$ 68,822 68,822 $
$ 74,607 92,216 $ (17,609) $
2-Year U.S. Treasury Yield - Historical Data 10,259 $ 76,377 $ 66,118 $ $ 0% -
$ 100% 7,783,000
Interest Earnings FY2023 FY2024 Change
$ 23% 1,784,000
$ 23% 1,783,000
$ 13% 1,048,000
U.S. Treasury Yields - Quarterly Comparison $ 41% 3,168,000 Book Value (COST) 16,481,588 $
Market Value 16,471,294 $
Weighted Average Maturity (in years) 1.58
Weighted Yield to Maturity* 4.55%
Portfolio Maturity PAR Maturing % Maturing
City of Cotati
Investment Report for the Quarter Ended June 30, 2024
Investment Portfolio Summary and Key Statistics
Portfolio Key Statistics
PAR Value 16,548,664 $
46.37%
16.94%
16.45%
12.47%
7.56%
0.18% 0.03% CAMP 46.37%
CERTIFICATE OF DEPOSIT 16.94%
FEDERAL AGENCY BOND 16.45%
CASH/TIME DEPOSITS 12.47%
U.S. TREASURY BILL/NOTE 7.56%
INVESTMENT CASH ACCOUNT 0.18%
LOCAL AGENCY INVESTMENT FUND 0.03%
0%
10%
20%
30%
40%
50%
Under 1
Year
1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years
41%
23% 23%
13%
0%
Portfolio Maturity Distribution