STAFF REPORT
City of Lancaster
CC 4
8/27/2024
TN
Date:August 27, 2024
To: Mayor Parris and City Council Members
From:George Harris, Senior Director/Treasurer – Admin Services Subject:Monthly Reports of Investments – June & July 2024.
Recommendation:
Accept and approve the June and July 2024 Monthly Report of Investments as submitted.
G.C. Section 84308: No
Fiscal Impact:
None.
Background:
Each month, the Finance Department prepares a report listing the investments for all separate entities under the city's jurisdiction, as identified in the City’s Comprehensive Annual Financial Report.
Portfolio Recap
July 2024 June 2024 May 2024
Total Portfolio 3.52% 3.07% 3.57%
Cal Class 5.42% 5.39% 5.39%
Cal Class-Enhanced 5.43% 5.39% 5.39%
Local Agency Investment Fund 4.30% 4.30% 4.30%
Total Pooled Portfolio Balance:
$117,176,150 $144,538,515 $124,046,316
The portfolio balance increased from May to June by $20,492,199, or 16.52%. Significant Revenues for June include $2,055,872 Sales & Use Tax, $1,682,126 in Measure LC Sales Tax, $12,071,326 in TDA reimbursements and $39,488 in Property Taxes. Expenses include $41,099,437 for Operating & Miscellaneous, $3,623,477 for Payroll & Benefits. 1 7
4 8
The portfolio balance decreased from June to July by $27,362,365 or 18.93%. Significant Revenues for June include $2,148,168 in Sales & Use Tax, $1,872,525 in Measure LC Sales Tax, and $267,993 in Property Taxes. Expenses include $5,804,844 for Operating & Miscellaneous, $10,664,745 for Debt Services, and $3,093,046 for Payroll & Benefits.
The City’s temporary idle cash, those funds not immediately needed to pay current bills and not governed by bond indentures or bond resolutions, is invested by the City’s adopted Investment Policy. The City Council reviewed this policy regularly, with the latest policy adopted on February 13, 2018, by Resolution No. 18-06.
The City's cash management system is designed to accurately monitor and forecast expenditures and revenues, thus enabling the City to invest funds to the fullest extent possible within the guidelines of this Investment Policy. The City attempts to achieve the highest yield obtainable through a diversified portfolio only after meeting the criteria established for safety and liquidity in that order. The principal investment objectives of the City are:
1. Preservation of capital and protection of investment principal;
2. Maintenance of sufficient liquidity to meet anticipated cash flows;
3. Attainment of a market rate of return;
4. Diversification to avoid incurring unreasonable market risks and;
5. Compliance with the City’s Municipal Code and with all applicable City resolutions, California statutes, and Federal regulations.
The City’s portfolio is a short-term and intermediate-term fixed-income portfolio. The maximum maturity of any investment is 5 years, with consideration of anticipated cash flow requirements and known future liabilities. The City contracts with an investment advisory service (Insight Investment) to assist in the effort to maximize the returns of the City portfolio. The City’s investments include publicly traded Treasury notes, Treasury Bills, Federal Agency Investments, Time Deposits, Local Agency Investment Fund (LAIF), and California Cooperative Liquid Assets Securities System (Cal Class) under the auspices of the State Treasurer for investment.
Funds invested in LAIF and Cal Class are available within 24 hours, and other investments are available upon maturity at full face value. These investments enable the City to meet its expenditure requirements for the next six months, as required by state law.
The City’s investment procedures are governed by Sections 53600 et. seq. of the California Government Code. Additional requirements have been placed on the City’s authorized investments by the Investment Policy (a copy is available in the Finance Department or from the (City Clerk), and all investments listed on the attached report adhere to these requirements.
Attachment:
A. June 2024 Report of Investments
B. July 2024 Report of Investments