EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: October 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Patrick Heisinger, Interim City Manager
BY: Tomohito Oku, Finance Director
Bo-Kyoung Kim, Financial Services Manager
SUBJECT: Monthly Cash Treasury Report for August 2022
Recommendation
Accept and file the Cash Treasury Report for the month of August 2022.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 3: Increase Organizational Effectiveness and Efficiency Priority No. 5: Improve Communication and Enhance Community Engagement Background
Pursuant to Section 53646 of the Government Code of the State of California, the City Treasurer may submit a quarterly report to the City Council regarding the funds and investments of the City. Further, City Investment Policy Section XVIII requires monthly reporting of investment transactions, as specified. Because the City participates in State and County investments pools and does not independently broker or engage outside investment advisors to transact investments; the monthly reporting provides a snapshot of overall cash receipting, transfers, and disbursements on a monthly basis.
Analysis
This report covers cash and investments of the City in the three cash and investment accounts: Wells Fargo Bank, San Mateo County Pool, and the California State Local Agency Investment Fund. The monthly report does not include petty cash, or the California State Community Infrastructure Program (SCIP) bond proceeds held by a trustee in the name of the City. For investment purposes, City cash is pooled, except for bond proceeds held by a trustee. The City does not have, nor is it legally required to have, separate bank accounts for each individual fund. However, all cash is segregated in the City’s accounting records.
Monthly cash transactions for the monthly period ending August 31, 2022, are as follows:
Account
Beginning
Balance Receipts Disbursements
Quarterly
Interest
Allocation
Inter-Account
Transfers Ending Balance
Wells Fargo Bank 1,311,296.07 2,797,978.93 (3,575,240.12) - 3,000,000.00 3,534,034.88 LAIF 10,032,012.24 - - - - 10,032,012.24
San Mateo County Pool 102,878,752.91 3,123,638.14 (50.00) - (3,000,000.00) 103,002,341.05 Total 114,222,061.22 5,921,617.07 (3,575,290.12) - - 116,568,388.17 The Wells Fargo cash balance reflects the book value balance (i.e., total outstanding checks not cashed are deducted from the account balance). The month-to-date cash and investment balance increased by approximately $2.2M compared to the balance as of July 31, 2022.
August receipts, a total of approximately $2.8M, primarily consist of Congressional Community Project Award ($0.6M), Sales tax ($0.4M), TOT ($0.3M), Veolia ($0.2M), and other various receipts.
August disbursements total $3.6M, primarily consist of payroll costs ($1.1M), Plan JPA General member contribution ($0.8M), Redwood City IT support ($0.4M), and other recurring operating expenditures.
The table below reflects recent treasury yield comparisons up to five-year notes since that is the maximum maturity the City may invest:1
Aug-22 Jul-22 Aug-21
6-month Treasury Bill 3.25 2.81 0.06
2-year Treasury Note 3.45 2.89 0.20
5-Year Treasury Note 3.30 2.70 0.77
LAIF average monthly effective yields were 1.276% in August which increased by 0.186% from July 2022. San Mateo County monthly gross earnings for August were 1.344% compared to
1.358% in July 2022. The County Pool earnings estimates for FY 22-23 are at 1.1625%.
Staff believes the City has investment liquidity and anticipated revenues to meet the City’s anticipated expenditure requirements for the ensuing six months.
Fiscal Impact
This report is informational.
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo Co. Library located at 2415 University.
Environmental
1 Daily US Treasury Yield Curve. Treasury.gov
The action being considered by the City Council is exempt from the California Environmental Quality Act (CEQA) because it is not a “project” pursuant to 15378(b)(4) because it is a fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant impact on the environment.
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.
Awarding this contract is not a project under The California Environmental Quality Act (Section 21000, et. seq. of the California Public Resources Code, hereafter CEQA) because the action has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.