Agenda Report
Fullerton City Council
MEETING DATE: NOVEMBER 19, 2024
TO: CITY COUNCIL / CITY MANAGER
SUBMITTED BY: ELLIS CHANG, DIRECTOR OF ADMINISTRATIVE SERVICES PREPARED BY: TONI SMART, DEPUTY DIRECTOR OF ADMINISTRATIVE SERVICES SUBJECT: TREASURER’S REPORT FOR QUARTER ENDED SEPTEMBER 30, 2024 AND 115 OPEB AND PENSION TRUSTS INVESTMENT STRATEGIES UPDATE
SUMMARY
Treasurer’s Report for quarter ended September 30, 2024, first quarter of Fiscal Year 2024-25 and 115 OPEB and Pension Trusts investment strategies update.
PROPOSED MOTION
Receive and file.
ALTERNATIVE OPTIONS
Approve the Proposed Motion
Other options brought by City Council.
STAFF RECOMMENDATION
Staff recommends the Proposed Motion.
CITY MANAGER REMARKS
None.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Fiscal and Organizational Stability.
FISCAL IMPACT
Staff will use the information provided in this report to ensure continued oversight.
BACKGROUND AND DISCUSSION
The City’s operating portfolio ended the quarter with investments totaling $179.5 million including the following:
$65.68 million State Local Agency Investment Fund and a Local Government Investment Pool $97.73 million U.S. Treasury Notes
$0.79 million Federal Agency issues
$12.32 million corporate notes
$1.22 million money market funds
$1.77 million municipal bonds
$0.004 million cash.
The market yield equaled 4.100% on September 30, 2024 and the accrued interest income for the quarter totaled $1,976,365.16.
Cash balances attributable to various city funds comprise the temporarily idle cash invested in these portfolios. The invested cash is restricted to support each funds’ purpose and not transferable between funds and not discretionary. The City collectively invests and draws upon these funds to support working capital as needed. The City bases its investment practices and policies on state law, prudent money management and the Statement of Investment Policy with the following primary goals:
protect the principal monies entrusted to this office
assure compliance with all federal, state and local laws governing public fund investments under City Treasurer control achieve a reasonable rate of return within the parameters of prudent risk management while minimizing the potential for capital losses arising from market changes or issuer default.
The City Treasurer controls all investable funds including, but not limited to, the General Fund, special revenue funds, debt service funds, capital project funds, enterprise funds and trust and successor agency funds in the Annual Comprehensive Financial Report. The City consolidates cash and reserve balances from all funds to maximize investment earnings and increase efficiencies for investment pricing, safekeeping and administration, except cash in certain restricted and special funds. The City allocates investment income to various funds based on respective participation and in accordance with generally accepted accounting principles. 115 OPEB and Pension Trust Investment Strategy Change
The City invested one-time initial OPEB ($50,000) and Pension ($487,000) 115 Trust contributions in the Public Agency Retirement Services (PARS) Capital Appreciation – Strategic Blend investment strategy. The September 20, 2024 balance in the OPEB 115 Trust totals $85,207 and the Pension 115 Trust balance totaled $673,671. The City Treasurer changed the investment strategy from Capital Appreciation – Strategic Blend to Balanced – Strategic Blend to reduce some equity risk. Attachment 2 outlines the different investment strategies offered by PARS. The change went into effect at the beginning of November 2024.
Attachments:
Attachment 1 – Quarterly Investment Report for Quarter Ended September 30, 2024 Attachment 2 – PARS OPEB and Pension Trust Program
cc: City Manager Eric J. Levitt
Treasurer’s Report Quarter Ended September 30, 2024
November 19, 2024 - Page 2