Recommendation to Accept the Treasury Report for the Quarter Ending December 31, 2014. [City Council] (Finance 2410)
Or be recommendation to accept the Treasury report for the quarter ending December 31st, 2014. But evening, Madam Mayor and members of the city council. So. Oops. Oh, we've got to change. Change the scene over here. I'm going to talk with you about the quarterly investment report. All right. Faster than I could have done it. So as you will recall and we talked about last time, the government code requires that if the city council so directs that we are required to report to you on a quarterly basis and we must state that it complies with our investment policy and that there is cash coverage for the next six months. Those are the requirements in state law. Our investment policy was last updated in February of 2014. So it's coming back to you soon. It stresses safety, liquidity and yield. It provides limitations on the type credit, credit, quality and duration of investments as outlined in state law. And the policy itself is located on the Finance Department website. In case anyone is interested in reading all of the fine details included in that policy. All of these limitations are intended to preclude the misuse of public investments in risky investments over a long period of time. And the city's statement of investment policy is very typical and is in conformance with the State Treasurers Association. Last month we were asked the question about limiting losses. And Kevin Kennedy, our elected city treasurer, is going to speak to that issue when we address the update to the investment policy. The report contents are determined by state law as well. In the staff report. A short summary is of the portfolio is displayed. The investment types are listed from the most liquid to the least liquid. Market value is provided by the investment advisors and reflects the market on the final day of the quarter being reported. It is compared to the cost or book value for review purposes only. Every negative number indicates that the market value is less than the book value. The average duration is the average age of the investment. To measure the performance of the portfolio, the two year U.S. Treasury bill rate is used as the comparison. In this case, the portfolio performed at about 2.28%, better than the two year Treasury bill rate. And the exhibit contains the detailed investments by INSTRUMENT, and the advisory firms report on the credit quality and the return for their individual portions of the portfolio. Most of the portfolio is in restricted in its uses. The majority of this is debt service funds or other special revenue funds. Those funds are not totally restricted, are in the general fund and in the internal service service funds. Cash is managed on a daily basis with the goal of making certain that six months of need payroll accounts payable, debt service will be met. Historically, Alameda has had two investment advisory firms. The 1 to 3 year portfolio is managed by public financial management. And the 3 to 5 year portfolio was managed by Chandler Asset Management. Both firms must, must comply with the investment policy, and the policy also prohibits investment in companies which receive more than 51% of the gross revenues from cigarets alcohol or other gambling products. And again, elected city treasurer Kevin Kennedy will speak to the issue of socially responsible investing when we address the investment policy. This is a summary of the investment portfolio as of December 30th. Investments with bond trustees. Are those funds required to be held by the trustee by bond covenants? A duration less than 3030 days indicates that they are very liquid and the local agency investment fund is managed by the State Treasurer's office. The maximum that we are allowed to invest is $50 million. Between these funds and cash on deposit. The six month cash needs are met. The certificates of deposit are safe instruments for holding small amounts required to be maintained for a variety of purposes. The remainder are instrument instruments managed by PFM and CAM two investment advisory firms. The quick thumbnail gives the reader a quick view of the elements of the portfolio how the book and market value compare and the duration and average yield. Last quarter, the average will yield was 0.35% and the total total portfolio was about 157 million. This this increase in cash is due to the closing of the 2014 refunding bonds sold on December 23rd, 2014. And that concludes my report. Thank you. Counsel, do you have any questions? I have a comment. I have a comment. I just wanted to share that the second page of the Treasury report provides that Kevin Kennedy, our city treasurer, has reviewed the City Values Treasury report for this quarter ending December 31st, 2014, and found that it complies with the investment policy established by his office. We have a motion. M.A. I'd like to move approval of the staff recommendation to accept the Treasurer report for the quarter ending December 31st, 2014. A second. All those in favor. I oppose none. Motion carries unanimously. Thank you very much. And our next item is for C. Recommendation to accept the second quarter financial report for the period ending December 31st, 2014.