CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
8/14/2023
1 SUBJECT:
Quarterly Treasurer’s Reports for the quarters ending March 31, 2023 and June 30, 2023.
RECOMMENDED ACTION:
Review and accept the Quarterly Treasurer’s Reports for the quarters ending March 31, 2023, and June 30, 2023.
STAFF CONTACT:
Yulia Carter, Assistant City Manager
(650) 738-7402
[email protected]
BACKGROUND/DISCUSSION:
The City Council adopted Administrative Policy 39 - Investment Policy to reflect current law and best practices in accordance with Government Code Section 53600 et seq. The policy provides guidelines for prudent investments and efficient cash management and requires the City to provide the governing body a report regarding the City’s investment activities on a quarterly basis to ensure “compliance” with the statement of investment policy.
The investment policies and practices of the City of Pacifica are strictly based on state law and prudent money management. The investment of funds for the City is directed to the goals of safety, liquidity, and yield while meeting the cash flow needs of the City through prudent investment of unexpended cash.
All funds are invested in accordance with the City’s Investment Policy and the authority governing investments set forth in the California Government Code, Sections 53601 through 53659. The investment policy for bond proceeds is contained in the relevant bond documents approved by the City Council at the time of the issuance of the debt.
As shown in the Treasurer’s Reports (Attachments 1-2), the City holds various investments in external investment pools and fiscal agent accounts and they are listed at par value, cost, as well as their fair value. Par value represents the original issue amount for securities or investments purchased. There were no securities or investments that are held by the City where they were purchased at a discount or premium so the par value is equal to the book value. The fair market value presented in the reports shows the current market value of the investment as of March 31, 2023 and June 30, 2023 accordingly. In accordance with GASB 31, the State provides a factor that can be multiplied by the City’s share of the LAIF pool to determine the market value each quarter. Other than LAIF, the fair market value of all other investments are equal to the book and par value.
Quarter 3 Treasurer’s Report (Attachment 1)
The City’s cash and investment portfolio, at fair market value, as of March 31, 2023, is $54,914,537, of which $35,392,392 is placed with the State Controller’s Local Agency Pacifica City Council 2
August 14, 2023
Investment Fund (LAIF), $8,689,113 is placed with US Bank, $359,300 is in the PARS Trust, $132,865 is placed in Bank of New York (BNY Mellon), $3,002,602 is in Roy Davies Trust, $7,334,821 in the Tri Counties Bank operating accounts, and $3,445 in Petty Cash held by various departments. Although operating checking accounts are not typical investment accounts, the City includes those balances as part of this report to show the total cash on hand for the quarter.
The City’s investment portfolio decreased by $2,891,143, from $57,805,680, this reporting quarter ending March 31, 2023, compared to the last quarter ending December 31, 2022. The decrease is primarily attributable to normal operating payments to vendors, payroll, and annual debt service payments net of normal revenue receipts in the last quarter of the year.
Quarter 4 Treasurer’s Report (Attachment 2)
The City’s cash and investment portfolio, at fair market value, as of June 30, 2023, is $57,341,523, of which $14,888,216 is placed with the State Controller’s Local Agency Investment Fund (LAIF), $8,371,766 is placed with US Bank, $748,900 is in the PARS Trust, $232,746 is placed in Bank of New York (BNY Mellon), $2,702,561 is in Roy Davies Trust, $17,892,131 in the Tri Counties Bank operating accounts, $12,500,000 in the new Tri Counties CDARS investment account, and $3,445 in Petty Cash held by various departments. Although operating checking accounts are not typical investment accounts, the City includes those balances as part of this report to show the total cash on hand for the quarter.
The City’s investment portfolio decreased by $464,157, from $57,805,680 last quarter ending March 31, 2023. The decrease is primarily attributable to normal outflow transactions net of normal revenue receipts in the last quarter of the year. The new Tri Counties DCARS was a significant change initiated by staff that will earn 4.25%, which exceeds the rate earned by LAIF and the bank operating accounts.
The Treasurer’s Report includes details of cash and investments which are held by institutions.
The report also summarizes the City’s cash position and distribution across funds for both quarters. Historical cash flow trends are compared to current cash flow requirements on an ongoing basis to ensure the City’s investment portfolio will remain sufficiently liquid to enable the City to meet all reasonable anticipated operating requirements. At the end of each reported quarter, the portfolio contained sufficient liquidity to meet the next six months of expected expenditures by the City.
ALTERNATIVE ACTION:
There is no reasonable alternative to this informational item, as not accepting the 3rd and 4th Quarter Treasurer’s Reports will not change the City’s cash position as of the end of each quarter.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
This item furthers the City’s efforts toward Enhance Organizational and Fiscal Stability.
FISCAL IMPACT:
There is no fiscal impact associated with this report, but Quarterly Treasurer’s Reports detail some of the fiscal activities that directly affect the City’s financial standing.
ORIGINATED BY:
City Manager's Office
Pacifica City Council 3
August 14, 2023
ATTACHMENT LIST:
Attachment 1 – Treasurer's Report 3-31-23 (PDF)
Attachment 2 – Treasurer's Report 6-30-23 (PDF)
Attachment 3 – City of Pacifica Glossary of Cash and Investment Terms (PDF)