ITEM 4. 3
Quarterly Treasurer Report
December 2023
This report presents a detailed discussion of the City' sfund balances and investment portfolio as of December 31, 2023. It includes all investments managed by the City on its own behalf as well as the City' s Trustees. The report provides information on cash flows, broken down by both investment manager ( City or Trustee) and by percentage allocation within the portfolio.
As of December 31, 2023, the investment portfolio was in compliance with all state laws and the City' sInvestment Policy.
Current Portfolio Summary
As directed by the Investment Policy adopted by City Council, City staff strives to attain three primary goals with the City' s investments as follows ( in order of priority):
1. Safety — Preservation of the principal of invested funds
2. Liquidity — Ability to liquidate one or more of the City' s investments if unexpected expenditures arise
3. Return — Attainment of a market rate of return
The majority of the portfolio is invested in the Local Agency Investment Fund ( LAIF), which is administered by the California State Treasurer' soffice. LAIF provides the City with an investment vehicle with yields that are slightly greater than U. S. Treasuries ( T -bills) with a 2 -year maturity or less. LAIF is a high quality investment in terms of safety, liquidity, and yield. Additionally, LAIF is an " On Demand" account; meaning funds may be withdrawn upon with 1 day notice, representing maximum liquidity.
In addition to LAIF, the City holds investments in Money Market Mutual Funds, Nonnegotiable Certificates of Deposit, and State and Local Government Securities ( SLGS). These investments are prudent investment choices and are included in the City' s Investment Policy as allowable investments.
Each investment mentioned above has a specific maturity date. However, much of the portfolio is On Demand.
The short weighted average maturity provides the City with a great deal of liquidity during this period of heightened economic uncertainty and period of moderate investment yields. This liquidity places the City in a position to invest in longer term maturity investments once interest rates begin to stabilize toward their historical norms; overall macroeconomic indicators signal solid and consistent growth in future years.
The following table ( Table: 1) provides a summary of the City' scash and investments, by holding party, based on recorded value as of December 31, 2023 compared with the prior quarter:
1) Small variances are due to the summation and rounding of multiple figures to the nearest whole dollar Please see the following pages ( Tables: 2 through 5) for a more detailed analysis of transactional additions and reductions due to cash flow needs, debt service payments, and maturities/ rollovers of certain investments.
Revenues arrived during the quarter, per City staff expectations, are as follows: utility payments, property tax, franchise fees, sales tax ( including Measure C), developer billing fees, grant reimbursements, building permit fees, plan check fees, and Transient Occupancy Tax (TOT).
Significant payables paid out during the quarter include:
Nonrecurring Expenditure Debt Service Payments, Capital Improvement Projects — General Government, Parks, Streets, Water, and Wastewater
II. Recurring Expenditures
a. Contractual — Park & Street Landscaping, and Wastewater Treatment Services b. Intergovernmental payments — South San Joaquin Irrigation District ( Surface Water Contract), Lathrop Manteca Fire District, City of Manteca ( Wastewater Contract) Quarterly Economic Update
According to the latest projections from PFM Asset Management; The fourth quarter was characterized by economic resilience but expectations for a modest slowdown, cooling inflation that remains above the target set by the Federal Reserve ( Fed), the labor market coming into better balance, and consumers that continue to support U. S. economic growth through spending. The Fed kept the overnight target rate at its current range of
5. 25% to 5.0% at its December 13 meeting and indicated that the historic 2022-3 hiking cycle had likely come to an end. The Fed also messaged a more dovish policy stance for 2024 as its updated " dot plot" showed three 25 basis points ( bps) rate cuts for the year, which was more than previously projected. Yields fell significantly as a result, and Q4 was defined by a strong rally in both equities and bonds. The U. S. labor market remained strong, providing a continuing tailwind for the economy, although that strength has begun to moderate. In Q4, the U. S. economy added 494, 000 new jobs compared to 663, 000 from Q3, which represented the lowest quarterly increase since Q4 of 2019. Labor force participation dipped at year- end, while the unemployment rate of 3.7% was a few tenths of a percent off the generational low reached early in 2023. While still low from a historic perspective, this remains in line with the Fed' s
projections for the headline unemployment rate to trend slightly higher over the next 12 months.
I certify that all of the investments reported herein are in accordance with the " City of Lathrop Investment Policy" adopted on November 13, 2023, with the Government Code, and other contractual agreements. I further certify the investments reported herein provide for the ability of the City to meet cash flow needs for the next six months.
St Tn J. Salvatore
City Manager
Cari Jam
Director of ' inance
TABLE:
2 CITY
OF
LATHROP of
Summary
All
Investments
As
of
December
31,
2023
City
Held
Investments
Recorded
Value
Curr
Yieldnt
Percent
of
Portfoli o
Local
Agency
Investment
Fund
Wells
Fargo
Money
Market
Mutual
Funds
California
Asset Management
Program
74, 871, 002 3, 052 837 36, 033,41
3. 929% 5 .
120%
5.50%
38. 71 %1 .
58%
18 .
63%
Total
Investments
Held
by
the
City (
1)
113, 956 880
4.73%
58 .
92 %
Trustee
Held
Investments
Recorded
Value
Current
Yield
Percent
of
Portfolio
US
Bank UMB UnioBank n
Bank
S1County
Pooled
Funds
PFM
Asset Management
PNC
Bank
3, 463, 781 204, 675 1,
165, 888
74, 143, 566 490, 952
4 .
430%
4.30% 0 .
000% 0 .
260% 3 .
400 % 0 .
090%
1.79% 0 .
62 %
0 .
00%
0.9% 38 .
33%
0. 25%
Total
Investments
Held
by
Trustees (
2)
79, 468 81
3. 434 %
41. 08 %
Total
City &
Trustee
Held
Investments &
CashRecorded
Value
Current
Yield
Percent
of
P
ortfoli o
Investments
Held
by
the
City
and
Trustees
Cash
inChecking
Accounts -
Recorded
Value
193, 425, 741 101, 897 653
4 .
046%
100. 00%
Total
Cash
and
Investments
295, 3234
One
month
benchmark U. for
S. Treasuries:
Three
month
benchmark U. Sfor
Treasuries:
Notes: 1)
See
Table:
4 for
detailed
investments
held
by
the
City.
2)
See
Table:
5 for
detailed
investments
held
by
Trustees. 5.
40%
5. 35%
TABLE:
3 CITY
OF
LATHROP
Investments
Cash
Flow
Analysis
As
of
December
31,
2023
Investments
Held
by
the
City
Prior
Month
Recorded
Value
Purchased Buy)
Redeemed Sell)
Local
Agency
Investment
Fund (
1)
Wells
Fargo
Money
Market
Mutual
Funds (
2)
California
Asset Management
Program ToInv
tal
estments
Held
by
the
City
74, 871 002 3, 039, 997 10, 943, 354 88,54 33
12, 840
25, 089 67 25, 102, 527
Investments
Held
by
Trustees
Prior
Month
Rec
orded Value
Purchased Buy)
Redeemed Sell)
PNC
Bank
SJCounty
Pooled
Funds
UMB
Bank
US
Bank (
3)
PFM
Asset Management
Total
Investments
Held
by
Trustees
489, 121 98, 085
1, 200, 437 3, 178 855 72,33 500 77, 699, 98 $
1, 952 69, 106 4, 238 284, 926
5,72, 39 5, 932, 60 $
313) 4, 162, 738) 4, 163,
Total
Cash
inChecking
Accounts
Held
by
the
City (
2)
128, 806 412
8, 077, 724
484) 34, 986,
Total
Cash
and
Investments
Held
by
the
City
and
Trustees
295, 360, 73
39, 112, 853 $ (
39, 150 222)
Notes: 1)
LAIF
interest
income
is
paid
quarterly (
Mar/ Jun Sept/ Dec)
and
received
in
the
following
month (
Apr/ Jul Oct/ Jan).
2)
Property
Tax,
Sales
Tax,
Building
permit
rev
enue,
TOT,
Developer
payments,
and
Utility
payments;
nonrecurring
expenses
month:
General
government,
Parks,
Streets,
Wastewater,
and
Water
CIPs;
also,
recurring
expenses:
Park &
street
landscape
water
treatment
services;
lastly, intergovernmental
payments
and
transfers:
SSJID
SCSWSP
0 &
M
expenses .
3)
Interest
earnings
from
BlackRock
Liquidity
Funds
T -
Funds
30 Day
Yield
4. 430%,
debt
service
payments .
TABLE: 4
CITY
OF
LATHROP
Investments
Held
by
City -
Detail
As
of
December
31,
2023
Agency (
Broker)
Yield
Investment
Coupon
to
Purchase
Maturity
Description
Rate
Maturity
Date
Date (
No
Local
Agency
Investment
Fund
Money
Market
Fund
City
Acct
No .
98- 39 437
N/ A
3 .
929%
Varies
On
Demand
74,
74,
FargoWells
Mutual
Funds
Money
Market
Mutual
Fund
City
Acct
No .
12641627
N/ A
5 .
120%
Varies
On
Demand
3,
3,
Califorina
Asset Management
Program Liquidity
Account
No .
6084- 001
N/ A
5 .
550%
Varies
On
Demand
36,36,
TOTAL
INVESTMENTS
HELD
BY
CITY $
113,
TABLE:
5 CITY
OF
LATHROP
Investments Held
by
Truste
e -
Detail
As
of
December
31,
2023
Investment Description
Acct
Number
CUSIP
Current
P
urchase
Maturity
Yield
Date
Investments
Held
by
US
Bank
03- 1
Series
2015 -
Mossdale
Village
Assessme
Districtnt
Mossdale
Village
Assessment
Dist.
No.
03- 1
Series
2015 -
Redempti
Fund on
Mossdale
Village
Assessment
Dist.
No.
03- 1
Series
2005/1 -
Reserve
Fund LTHFIN
RP
REVENU
AUTH
E
BONDS
2023
SERIES
A
Money
Market -
Revenue
Account
M
oney
Market -
CFD
Reserve
Account Money
Market -
ReAD
Acco
Reserve
unt La
2003-A
throp
CFD
Money
MarketInterest
Account
Money
Market -
Reserve
Account
LAIF -
Interest CDPH / Account
CDWR -
Loa
SRF
n
Agreement
Account
Agreement
Account -
Reserve
Fund
2015
Crossroads
Series
B
2015
Crossroads
Series
B - Cro
2015
ssroads
Series
B -
2015
Crossroads
Series
B -
2015
Crossroads
Series
B -
2015
Crossroads
Series
B -
LOIB
RDP
LOIB
Reserve
Cost
of
Issuance Improvements COI
Custodian
Agreement
Investments
Held
by
PNC
Bank
by
A
ccount
2012
Loa
Water
Refun dinn (
g
of
2000
Water
COPs)
Certificate
of
Deposit -
Reserve
Fund
6712138601 6712138602 278276000 278276004 278276006 6711720001 6711712200 6711720002 6711908800 6711908801 6712138801 6712138803 6712138804 6712138805 6712198801
4.30 %
10/8 05
On
Demand $
4 .
430%
10/8 05
On
Demand $
4 .
430 % 4.30% 4 .430 % 4 .
430% 4 .
430% 3.929%
7/ 1 23 7/ 1 23 7/ 1 23 12/ 03 12/ 03 03/ 19
On
Demand
On
Demand
On
Demand
On
Demand
On
Demand
On
Demand
4.30%
12/ 20
On
Demand $
4 .
430%
12/ 20
On
Demand $
430%. 4.30% 4.30% 4 .
430% 4 .430 %
09/1 15 09/1 15 09/1 15 09/1 15 09/1 15
On
Demand
On
Demand
On
Demand
On
Demand
On
Demand
Total
In
vestments
Held
by
Trustee -
US
Bank $
0.90%
5/ 22/ 19 $
Total
Investments
Held
by
Trustee -
Pacific
Premier
Bank $
TABLE:
5 CITY
OF
LATHROP
Held
by
Investm ents Trustee -
Detailof
As
December
31,
2023
Investment
Current
Purchase
Maturity
Description
Acct
Number
CUSIP
Yield
Date
Investments
Held
by
UMB
Bank
by
Account
2018- 1
Lathro
Central
CFD p
Improvement
Area
1 -
Admin
Expense
Reserve
Fund
Other Improvement
Areas -
Admin
Expense
Reserve
Fund
Improvement
Area
1-
Principal
Account
Improvement
Area
1- Redemption
Account
Improvement
Area
1-
Acco
Interest
unt
Improvement
Area
1-
Admin
Expense
Account
Improvement
Area
Reserv
1-
e
Fund
Improvement
Area
1-
Surplus
Fund
Improvement
Area
2 -
Principal
Account Improvement
Area
2 -
Redemption
Account
Improvement
Area
2 -
Interest
Account
Improvement
Area
2 - ExpeAdmin
nse
Account
Improvement
Area
2 -
Reserve
Fund
Improvement
Area
2 -
Surplus
Fund
Improvement
Area
3 -
Principal
Account
Improvement
Area
3 -
Redemption
Account
Improvement
Area
3 -
Interest
Account
Improvement
Area
3 -
Admin
Expense
Account Improvement
Area
3 -
Reserve
Fund
Improvement
Area
3 -
Surplus
Fund
Improvement
Area
4 -
Acco
Principal
unt
Improvement
Area
4 -
Redemption
Account
Improvement
Area
4 -
Acco
Interest
unt
Improvement
Area
4 -
Admin
Expense
Account
Improvement
Area
4 -
Reserve
Fund
Improvement
Area
4 -
Surplus
Fund
Improvement
Area
5 -
Principal
Account
Improvement
Area
5 -
Redemption
Account
Improvement
Area
5-
Interest
Account
Improvement
Area
5 -
Admin
Expense
Account
149232. 1 149232 .
2 149232. 3 149232. 4 149232. 5 149232. 6 149232 .
7 149232 .
8 149265. 1 149265 .
2 149265 .
3 149265. 4 149265. 5 149265. 6 149267 .
1 149267 .
2 149267 .
3 149267. 5 149267. 6 149267. 7 149268 .
1 149268 .
2 149268. 3
149268.4
149268. 5 149268. 6 149269. 1
149269.
2 149269.
3 149269.
4 4.30%
02/1 19
On
Demand
4 .
430 %
02/1 19
On
Demand
4 .
430%
02/1 19
On
Demand
4 .
430 %
02/1 19
On
Demand
4.30%
02/1 19
On
Demand
4.30%
02/1 19
On
Demand
430 %.
02/1 19
On
Demand
430%.
02/1 19
On
Demand
430 %.
02/1 19
On
Demand
4.30%
02/1 19
On
Demand
4.30%
02/1 19
On
Demand
4.30%
02/1 19
On
Demand
4.30 %
02/1 19
On
Demand
430%.
02/1 19
On
Demand
4 .
430 %
02/1 19
On
Demand
4.30%
02/1 19
On
Demand
4.30%
02/1 19
On
Demand
4.30%
02/1 19
On
Demand
430%.
02/1 19
On
Demand
4.30 %
02/1 19
On
Demand
430%.
02/1 19
On
Demand
4 .
430%
02/1 19
On
Demand
4.30 %
02/1 19
On
Demand
430%.
02/1 19
On
Demand
430 %.
02/1 19
On
Demand
4.30%
02/1 19
On
Demand
4 .
430%
02/1 19
On
Demand
4.30%
02/1 19
On
Demand
4.30 %
02/1/ 19
On
Demand
4 .
430%
02/1 19
On
Demand
TABLE:
5 LATHROP
CITY
OF
Investments
Held
by
Trustee -
Detailof
As
December
31,
2023
InvestmentDescription Improvement
Area
5 -
Reserve
Fund
Improvement
Area
5 -
Surplus
Fund
2018-
Central
Lathrop
CFD
Special
Tax
Fund
Surplus
Fund
Investments
Held
San
by
Joaquin
County
by
Account Sanitary
Sewer
Assessment
District
81 Pooled
Funds -
Redemption
Account Investments
Held
by
PFM
Asset Management
Acco
by
unt
PFM
Man agemenAsset
t
Money
M
arket
Fund
USTreasury
Bond /
Note
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
US
No
Treasury
tes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
US
No
Treasury
tes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
Acct
Number
Current
Purchase
Maturity
CUSIP
Yield
Date
149269. 5
4 .
430%
01/ 192
On
Demand $
149269. 6 149261. 1 149261. 2
4.30 %
01/ 192
On
Demand $
430 %.
01/ 1902
On
Demand $
430%.
01/ 192
On
Demand $
T
otal
Investments
Held
by
Trustee -
UMB
Bank $
SJ
CO
FUND #
57961
0 .
260%
10/ 87
On
Demand $
T
otal
Investments
Held
by
Trustee -
San
Joaquin
Cou
20260109
PFM
Funds -
Govt
Select
AAAm $
91282CCX7
375% 0.
09/ 15 21
09/ 15 24 $
91282CCX7
0.375%
09/ 15 21
09/ 15 24 $
91282CDB4
0. 625 %
15/ 210
10/5 24 $
912828YM6
1. 500%
31/ 190
10/ 31 24 $
91282CDH1
0.750%
15/ 21
11/5 24 $
91282CDH1
750% 0.
11/5 2
15/ 24 $ 11/
912828YV6
500% 1.
11/ 309
30/ 24 $ 11/
91282CFX4
4 .
500%
11/ 30 22
11/ 30 24 $
91282CDN8
1 .
000%
15/ 2112/
12/5 24 $
91282CDN8
1 .
000%
12/5 21
12/5 24 $
91282CDS7
1 .
125 %
01/ 15 22
01/ 15 24 $
91282CDS7
125% 1.
01/ 15 22
15/ 24 $ 01/
91282CDZ1
1 .
500%
02/ 15 2
02/ 15 2 $
91282CED9
750% 1.
03/ 15 22
15/ 2 $ 03/
91282CED9
1 .
750%
03/ 15 22
15/ 2 $ 03/
91282CGU9
3.875%
31/ 230
03/ 31 25 $
9128284M9
2 .
875 %
30/ 1804
04/ 30 25 $
91282CEQ0
2.750%
15/ 220
05/ 1 2 $
91282CEQ0
750% 2.
05/ 1 22
15/ 2 $ 05/
91282CEQ0
2. 750%
15/ 220
05/ 1/ 2 $
91282CEY3
3. 000%
07/ 15 22
07/ 15 2 $
91282CEY3
3. 000%
07/ 15 22
15/ 2 $ 07/
91282CEY3
3. 000%
07/ 15 22
07/ 15 2 $
91282CFE6
3. 125%
15/ 2208
15/ 2 $ 08/
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
US
No
Treasury
tes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
US
No
Treasury
tes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
USTreasury
Notes
TABLE:
5 CITY
OF
LATHROP
Investments
Held
by
Trustee -
Detail
As
of
December
31,
2023
Investment
Current
Purchase
Maturity
Description Acct
Number
CUSIP
Yield
Date
91282CFE6
125% 3.
08/ 15 22
08/ 15 2
91282CFK2
3 .
500%
09/ 15 22
09/ 15 2
91282CFK2
3 .
500%
09/ 15 22
09/ 15 2
91282CFP1
4 .
250 %
10/5 22
10/5 2
91282CFP1
250 % 4.
10/5 22
10/5 2
91282CFW6
4 .
500%
11/5 22
11/5 2
91282CFW6
4 .
500 %
11/5 22
11/5 2
91282CGA3
4 .
000 %
12/5 2
12/5/ 2
91282CGA3
4 .
000%
12/5 2
12/5 2
91282CGE5
875% 3.
01/ 15 23
01/ 15 26
91282CGE5
875% 3.
01/ 15 23
15/ 2601
91282CGE5
3 .
875%
01/ 15 23
15/ 2601
91282CGL9
000% 4.
02/ 15 23
02/ 15 26
91282CGL9
000% 4.
02/ 15 23
02/ 15 26
91282CGL9
000% 4.
02/ 15 23
02/ 15 26
9128286F2
2. 500 %
02/ 28 19
02/ 286
91282CGV7
750% 3.
15/ 2304
04/ 15 26
91282CHB0
3. 625 %
15/ 230
05/ 1 26
91282CHH7
125% 4.
06/ 15 23
06/ 15 2
91282CH
M6
500% 4.
07/ 15 23
07/ 15 26
91282CHU8
4 .
375%
08/ 15 23
15/ 2608
91282CHU8
375% 4.
08/ 15 23
15/ 2608
91282CHY0
625% 4.
09/ 15 23
09/ 15 26
91282CJC6
4 .
625%
15/ 230
10/5 26
91282CJK8
4. 625 %
15/ 231
11/5 26
91282CJK8
4 .
625%
11/5 23
11/5 26
USTreasury
Subtotal:
TABLE:
5 CITY
OF
LATHROP
Investments
Held
by
Trustee -
Detail
As
of
December
31,
2023
DeInvestment scription
Acct
Number
Current
Purchase
Maturity
CUSIP
Yield
Date
natio
Supra -
nal
Agency
Bond /
Note
Int'
BK
Recon
And
Dev
Note
Inter -
American
DevelCorporate BK
Notes Supra -
National
Agency
Subtotal
Federal
Agency
NoBond/
te
Federal
Home
Loan
Banks
Notes
Federal
Home
Loan
Banks
Notes (
Callable)
Federal
Home
Loan
Banks
Notes
Federal
Home
Loan
Banks
Notes
Fannie
Mac
Notes (
Callable)
Federal
Lo
Home
an
Banks
Notes (
Callable) Ho
Federal
me
Loan
Banks
Notes (
Callable)
Federal
Home
Loan
Banks
Notes (
Callable)
FFCB
Bonds
Fannie
M
ae
Notes (
Callable)
Federal
Agency
Subtotal:
Interest Total
Accrued
Interest
4581X0DZ8
500% 0.
09/ 231
23/409
45950KDF4
375 % 4.
12/ 06 23
15/ 2701
4581X0EM6
375% 4.
12/ 23
02/1 27
3130ASME6
000% 3.
07/8 22
08/ 247
3130AMVD1
420% 0.
17/ 2106
09/ 17 24
3130AV7L0
000% 5.
03/ 2
28/502
3130AWER7
4 .
625%
0/ 9 23
06/ 25
3134GXM35
3 .
600 %
08/5 22
08/1 25
3130AN3T5
1 .
000%
23/10
03/ 26
3130ALGJ7
000% 1.
23/10
23/60
3130ANCD0
110%.
07/ 30 21
27/60
3133EPSW6
4 .
500%
08/ 14 23
08/ 14 26
3135G06L2
0. 875%
12/8 20
12/8 26
Total
Investm
ents
Held
by
Trustee -
PFM
Asset
Total
Investments
Held
by
Trustees $