Agenda Item
City Council
Item #: 3.20. 2/8/2022 File #: 22-0049
TO: Honorable Mayor and Members of the City Council
THRU: Thomas R. Hatch, Interim City Manager
FROM: Richard A. Rohm, City Treasurer
Will Kolbow, Assistant City Manager/Administrative Services Director
1. SUBJECT
Monthly Treasurer’s Reports for October, November, and December 2021.
2. SUMMARY
Presentation of three monthly Treasurer’sReports to the City Council, after the end of the quarter covered by the reports.
3. RECOMMENDED ACTION
Receive and file.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 2: Be a fiscally healthy community
d: Effectively manage and develop City assets.
6. DISCUSSION AND BACKGROUND
The City’scurrent Statement of Investment Policy has been adopted by the City Council of the City of Orange as Resolution 11340 and is in accordance with the California Government Code Sections 53600 et seq. Per the Investment Policy, three monthly investment reports are to be submitted to the City Council within 45 days following the end of the quarter.
As required by the City’s present Investment Policy, the City Treasurer’s report delineates all investments made by the City Treasurer for the City, its special funds, and the Successor Agency funds, by investment type and by broker.
The monthly Compliance Report certifying compliance of all investments with both the Government Code and the City’s Investment Policy is included.
The Investment Portfolio Statement accurately reflects all investments held by the City and its agents as of the end of the month. This investment data is also presented in other summary and graphic form. A reconciliation between total cash and investments and total cash per the General Ledger is also included.
All of the three monthly Treasurer’s Reports have been reviewed by the Investment Advisory City of Orange Printed on 2/3/2022Page 1 of 3
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Item #: 3.20. 2/8/2022 File #: 22-0049
Committee (IAC).
Summary of changes in Treasurer’s cash and investments:
Operating Cash & Investments (1)
Balance @ 9/30/2021 $130,860,325
Monthly Activity:
Cash Received 66,912,481
Cash Disbursed (60,024,134)
Balance @ 12/30/2021 $137,748,672
(1)Includes operating cash and investments (valued at cost). Does not include deposits with administrator, imprest cash, fiscal agent cash and investments, and deferred compensation.
Significant Monthly Cash Transactions:
October November December
Cash Receipts:
Sales Tax Revenue 4,501,886$ 4,883,108 4,513,112
Property Taxes 75,240 5,385,158 13,833,275
Cash Disbursements:
OC Water District Purchased Water 1,629,352 1,412,416 1,311,775 RC Construction Fire HQ 954,421 967,277 972,956 PERS Employee Benefits 641,281 638,448 1,305,842 Southern Counties Oil Co. Agreement 1,114,608
South Coast Fire Equipment Fire Engine/Truck 905,065 1,689,951 Southern California Edison Electricity* 635,393 740,509 RJ Noble Pavement Maint. 484,548
Southwest Pump & Drill Well 28 658,119
Excess Cash Receipts 18,888,133
Excess Cash Disbursements 8,042,001 4,129,510
LAIF Balance Beginning 30,200,000 38,800,000 35,000,000 Ending 38,800,000 35,000,000 48,200,000
*Electricity costs represent catch-up of previous incorrect billings.
Credit rating on investments
The HSBC medium term note in the portfolio has been downgraded by Standard and Poor’s(S&P) from “A”to “A-“,which is one level below the minimum “A”rating permitted in the investment policy. It should be noted S&P is the only credit rating agency that issued the downgrade. The other two major national rating companies of Moody’s and Fitch have maintained the same bond credit rating.
If a security is downgraded one notch below the quality required in the investment policy, it is considered acceptable to retain such downgraded security in the portfolio. If a security is rated two grades below the required minimum rating, it will trigger an automatic sale of such downgraded City of Orange Printed on 2/3/2022Page 2 of 3
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Item #: 3.20. 2/8/2022 File #: 22-0049
grades below the required minimum rating, it will trigger an automatic sale of such downgraded security. Staff will continue to monitor the downgraded HSBC investment.
Investment Advisory Committee (IAC)
The next IAC meeting is scheduled for February 23, 2022 while the next quarterly Committee meeting is to be scheduled for May 2022.
7. ATTACHMENTS
· Investment Report for October 2021
· Investment Report for November 2021
· Investment Report for December 2021
City of Orange Printed on 2/3/2022Page 3 of 3
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