EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: January 17, 2023
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 November 2022 Recommendation
Accept and file the Cash Treasury Report for the month of November 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 receipts, transfers, and disbursements on a monthly basis.
Analysis
The Monthly Cash Treasury Report (“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 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 November 30, 2022, are as follows:
Account
Beginning
Balance Receipts Disbursements
Quarterly
Interest
Allocation
Inter-Account
Transfers Ending Balance
Wells Fargo Bank 2,345,793.47 1,901,732.47 (2,806,802.30) - - 1,440,723.64 LAIF 10,066,147.49 - - - - 10,066,147.49
San Mateo County Pool 101,714,052.47 436,417.49 - - - 102,150,469.96 Total 114,125,993.43 2,338,149.96 (2,806,802.30) - - 113,657,341.09 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 decreased by approximately $0.9M compared to the balance as of October 31, 2022.
November receipts, a total of approximately $1.9M, primarily consist of Local Jurisdiction Tax distribution for 3rd Quarter 2022 ($0.6M), Four Seasons TOT (0.5M), Veolia ($0.2M), and other various receipts.
November disbursements total $2.8M, primarily consist of Payroll costs ($1.1M), Recology 1st Quarter 2022 (0.7M), 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
Nov-22 Oct-22 Nov-21
6-month Treasury Bill 4.54 4.45 0.10
2-year Treasury Note 4.38 4.51 0.52
5-Year Treasury Note 3.82 4.27 1.14
LAIF (Local Agency Investment Fund) average monthly effective yields were 2.007% in November which increased by 0.235% from October 2022. San Mateo County monthly gross earnings for November were 1.790% compared to 1.600% in October 2022. The County Pool earnings estimates for FY 22-23 are at 1.85%.
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
None. This report is informational.
1 Daily US Treasury Yield Curve. Treasury.gov