December 17, 2024
Finance Department
DATE: December 17, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Jerry Gurule, Accounting Manager
Antonio Banuelos, Accounting Manager
Subject:
Investment and Cash Balance Report, Monthly Overtime
Reports, and Documentary Transfer Tax Report for the
Month of October 2024
FINANCIAL IMPACT: There is no fiscal impact due to this agenda item.
PREVIOUS COUNCIL
ACTION:
None.
STATEMENT OF THE
ISSUE:
City staff is requesting that the City Council receive the City’s Investment and Cash Balance Report, Monthly
Overtime Reports, and Documentary Transfer Tax
Report for the month of October 2024.
RECOMMENDED ACTION:
RECEIVE the City’s Investment and Cash Balance
Report, Monthly Overtime Reports, and Documentary
Transfer Tax Report for the month of October 2024 –
Finance Department (Andrea Miller 510-620-6740).
AGENDA
REPORT
December 17, 2024
DISCUSSION:
Investment and Cash Balance Report
It is the policy of the City of Richmond (City) to invest public funds in a manner which prioritizes safety and liquidity over yield while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of public funds. In accordance with California Government Code Section 53 646 and the City’s Investment Policy, the Director of Finance shall report monthly on the City's pooled and Bond funds to the City Manager and City Council and shall report quarterly on other investments.
The Investment and Cash Balance Report is a monthly report of the City’s pooled cash balance which include General Fund, Special Revenue, Debt Service, Capital Projects, Enterprise, Internal service, Trust & Agency, Redevelopment/Successor Agency, and any other Funds investment activities under the direction of the City.
The Portfolio Management Report represents the monthly bank balances, along with market balances of permitted investments according to the City’s Investment Policy.
Investment in the Local Agency Investment Fund (LAIF), CalTrust, money market, agency bonds, certificates of deposits, and corporate notes are all allowable by California Government Code Section 536 01 and permitted according to the City of Richmond’s Investment Policy updated October 17, 2023.
This investment report was prepared after the April 30, 2024 special City Council meeting to add additional restrictions to the City of Richmond’s Investment Policy and reflects the portfolio as of October 31, 2024. Based on the policy direction received during the special City Council meeting, Council directed staff to review and modify the City of Richmond’s Investment Policy to add additional restrictions eliminating the investment of City funds in industries that facilitate violence, war, oppression, and apartheid. Staff has been directed to present Investment Policy modifications and recommendations for socially responsible investments to Council for consideration which will occur at the December 3, 2024 City Council meeting.
At the September 2024 Federal Open Market Committee (FOMC) meeting, the Federal Reserve (Fed) lowered interest rates by 50 basis points, easing monetary policy for the first time in four years. This lowers the interest rate target to a range of 4.75% - 5% on investments. In November 2024, as a follow-up to September’s big half-percentage point reduction, the F OMC lowered its benchmark overnight borrowing rate by a quarter percentage point, or 25 basis points, to a target range of 4.50% -4.75%. The City has started to see a slight decrease in our rate of return due to these recent rate cuts.
The City is allowed to pre-fund future Pension and OPEB costs in accordance with the City’s Pension and Other Post-Employment Benefits (OPEB) policies. These funds are invested according to the polic ies funding objectives and funding guidelines. The City maintains a Section 115 C ombination Trust for City -OPEB & Pension administered by Public Agency Retirement Services (PARS) and a California Employers’ Retiree Benefit December 17, 2024
Trust (CERBT) administered by California Public Employees’ Retiremen t System (CalPERS) for RPOA -OPEB. Each Trust is comprised of a diversified portfolio of investments consistent with the Trust’s objectives and liquidity requirements.
Overtime Reports
The overtime reports for the month of October 2024 provides a summary o f budget-to- actual overtime usage by department for miscellaneous and sworn staff. Year-over-year and month-over-month totals are included for sworn staff.
Documentary Transfer Tax
At the June 24th City Council Budget Hearing, City Council requested monthly updates of the Transfer Tax received by the City of Richmond from the County for the sale of properties in Richmond. As this is the City’s most volatile revenue stream, the amounts received month-to-month can vary from the low $300 thousand to the highs of $3 million – a few large sales can widely swing the revenues.
In November, the City received data from the County for the October Transfer Tax which will total $4,394,236.
DOCUMENTS ATTACHED:
Attachment 1 – Investment and Cash Balance Report for October 2024.
Attachment 2 – Overtime Report for October 2024.
Attachment 3 – Overtime Public Safety Report for October 2024.
Attachment 4 – Documentary Transfer Tax Report for October 2024.