EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: December 15, 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 October 2022
Recommendation
Accept and file the Cash Treasury Report for the month of October 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 October 31, 2022, are as follows:
Account
Beginning
Balance Receipts Disbursements
Quarterly
Interest
Allocation
Inter-Account
Transfers Ending Balance
Wells Fargo Bank 1,562,501.78 4,299,597.31 (3,516,305.62) - - 2,345,793.47 LAIF 10,032,012.24 34,135.25 - - - 10,066,147.49
San Mateo County Pool 101,048,097.88 665,954.59 - - 101,714,052.47 Total 112,642,611.90 4,999,687.15 (3,516,305.62) - - 114,125,993.43 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 $0.8M compared to the balance as of September 30, 2022.
October receipts, a total of approximately $4.3M, primarily consist of Bay Road Project Reimbursement from Dept. of Transportation ($3.0M), Tax distribution ($0.4M), Veolia ($0.3M), and other various receipts.
October disbursements total $3.5M, primarily consist of G. Bortolotto & Company for Annual street resurfacing ($1.8M), payroll costs ($1.1M), 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
Oct-22 Sep-22 Oct-21
6-month Treasury Bill 4.45 3.82 0.07
2-year Treasury Note 4.51 4.22 0.48
5-Year Treasury Note 4.27 4.06 1.18
LAIF average monthly effective yields were 1.772% in October which increased by 0.259% from September 2022. San Mateo County monthly gross earnings for October were 1.600% compared to 1.437% in September 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.
1 Daily US Treasury Yield Curve. Treasury.gov