07 - Investment Report Costa Mesa Sanitary District …an Independent Special District Protecting our community’s health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Memorandum To: Board of Directors Via: Scott Carroll, General Manager From: Marc Davis, Treasurer Date: April 24, 2014 Subject: Investment Report for the Month of March 2014 Summary Attached is the Investment Report for the month of March 2014. As required by the District’s Statement of Investment Policy, the Investment Report delineates all investment activity during the month. Staff Recommendation Approve the Investment Report for the month of March 2014. Analysis This report lists the types of securities held in the District’s portfolio, the institutions from which the securities were purchased, maturity dates and interest rates as of March 31, 2014 . The District’s investments are in compliance with the Statement of Investment Policy adopted by the Board at the June 27, 2013 regular meeting, as well as the California Government Code. The market values in this report were provided by our third party custodian, Bank of New York, except for the Local Agency Investment Fund (LAIF). The market value of LAIF was provided by the State Treasurer’s Office. It does not represent the value of the underlying securities within the pool, but rather the par or cost amount, which is the amount the District is entitled to withdraw. This reporting practice is consistent with industry standard practices for similar funds. ITEM NO. 07
Board of Directors April 24 , 2014 Page 2 of 3 The weighted average stated rate of return (current yield) for the District’s investment p ortfolio as of March 31 , 2014 , was 0.706 %. The yield to mat urity of the portfolio was 0.706 %. The District’s weighted average interest rate was 47 basis points (0.470 %) above the daily effectiv e yield of LAIF, which was 0.2 36 % as of March 31 , 2014 . The weighted average number of days to maturity for the District’s total portfolio was 831 days (2.28 years). The average duration of the underlying securities in LAIF as of March 31 , 2014 was 185 days. The District’s investment portfolio is in compli ance with its liquidity limitations, which requires that a minimum of 20.00% of the portfolio must mature within one year. The percentage of the portfolio maturing in less than one year as of March 31 , 2014 was 39.52 %. As of March 31 , 2014 , the District has adequate operating reserves necessary to meet its obligations for the next six months. Strategic Plan Element & Goal This item supports achieving Strategic Element No. 7.0, Finances, by ensuring the short and long -term fiscal health of the District . Legal Review Legal review is not required. Financial Review The portfolio was budgeted to earn an average rate of 0.900% for the year ending Ju ne 31 , 201 4 . Through March 31 , 2014 the portfolio has earned a weighted average interest rate of 0.787 %. Interest rates are starting to creep up, so s taff anticipates that the weighted average interest for the portfolio will also increase slightly throughout the remaining portion of the fiscal year , but most likely fall below budget estimates . Public No tice Process Copies of this report are on file and will be included with the entire agenda packet for the April 24 , 2014 Board of Directors regular meeting at District Headquarters (6 31 W. 19 th Street) and on the District’s website at www.cmsdca.gov .
Board of Directors April 24 , 2014 Page 3 of 3 Alternative Actions 1. Refer the matter back to staff Attachments Treasurer’s Report of Pooled Cash and Investments as of March 31 , 2014
`DepositsOutstanding Bank Balance In Transits Checks Book Balance Active Accounts: Bank of America 3,246,601.55 $ - 208,079.51 3,038,522.04 $ Total Active Accounts3,246,601.55 - 208,079.51 3,038,522.04 Market Value Increase Decrease Cost Investments: Local Agency Investment Fund4,240,159.14 $ - - 4,240,159.14 $ Money Market/Sweep Account2,294,253.55 - - 2,294,253.55 Federal Agency Securities9,845,906.25 - (154,093.75) 10,000,000.00 Total Investments16,380,318.94 - (154,093.75) 16,534,412.69 Total Pooled Cash & Investments19,626,920.49 $ -$ 53,985.76 $ 19,572,934.73 $ Market Adjustment C O S T A M E S A S A N I T A R Y D I S T R I C T Treasurer's Report of Pooled Cash and Investments March 31, 2014 Costa Mesa Sanitary District Pooled Cash and Investments by Fund March 31, 2014 Solid Waste Fund: Operating Reserve 801,000.00 $ Unreserved: Designated for working capital 1,494,000.00 Undesignated 3,143,655.62 Liquid Waste Fund: Operating Reserve 371,000.00 Reserved for Earthquakes/Emergencies 1,000,000.00 Reserved for Capital Outlay 3,442,476.62 Unreserved: Designated for working capital 2,467,300.00 Undesignated (968,517.28) Sewer Construction Fund 100,000.00 Facilities Revolving Fund 299,914.66 Asset Replacement Fund 508,362.16 Asset Management Fund 6,913,742.95 Total Pooled Cash & Investments 19,572,934.73 $ Treasurer Date Marcus D. Davis 4/16/14 1
Total investments outstanding as of February 28, 20 14 16,526,136.85 $ Additions:Gain on sale of investment - Investment purchases - Deductions:Investments called (1,200,000.00) Net increase (decrease) in Sweep Account 1,208,275.84 Net increase (decrease) in LAIF - Total investments outstanding as of March 31, 2014 16,534,412.69 $ C O S T A M E S A S A N I T A R Y D I S T R I C T Investment Activity Summary March 31, 2014 2
Interest CUSIP PurchaseMaturityCouponInvestmentEarned at Number Investment Date Date Rate Cost 03/31/14 n/aLocal Agency Investment Fundn/an/a0.236%4,240,15 9.14 $ n/a**n/aBank of New York-Sweep Acctn/an/a0.000%2,294,253 .55 n/a 3134G3ZR4Federal Home Loan Mortgage08/07/1208/07/17 1.000%1,000,000.00 1,500.00 3136G0L58Federal National Mortgage Assn10/18/1210/1 8/171.000%1,000,000.00 4,527.77 3135G0RQ8Federal National Mortgage Assn11/15/1211/1 5/171.000%1,000,000.00 3,777.77 313381LC7Federal Home Loan Mortgage12/28/1212/28/17 0.950%1,000,000.00 2,454.16 3133823B7Federal Home Loan Mortgage02/22/1302/22/18 1.150%1,000,000.00 1,245.83 3133826D0Federal Home Loan Mortgage02/28/1302/28/18 1.100%1,000,000.00 1,008.33 313382HR7Federal Home Loan Mortgage03/27/1303/27/18 1.130%1,000,000.00 125.55 3136G1L31Federal National Mortgage Assn05/15/1305/1 5/170.700%1,000,000.00 2,644.44 3133ECQW7Federal Farm Credit Bank06/04/1306/04/181.250%1,000,000.00 4,062.50 3134G47G7Federal Home Loan Mortgage06/26/1306/26/18 1.400%1,000,000.00 3,694.44 Totals 16,534,412.69 $ 25,040.79 $ **Represents the LAIF daily rate at 3/31/14 Comments COSTA MESA SANITARY DISTRICT Investment and Investment Earnings March 31, 2014 3
Current %of Market Value 03/31/14 Maximum %U.S. Treasury Bills0.00%Unlimited U.S. Treasury Notes0.00%Unlimited Federal Agency Issues:FICB 0.00%Unlimited FLB 0.00%Unlimited FHLB 0.00%Unlimited FHLMC 36.06%Unlimited FNMA 18.09%Unlimited FFCB 5.96%Unlimited Other *0.00%Unlimited Banker's Acceptances0.00%25% (1)Certificates of Deposit0.00%25%Negotiable Certificates of Deposits0.00%25% (1)Commercial Paper0.00%25% (1)Medium Term Corporate Notes0.00%20% (1)LAIF (Local Agency Investment Fund)25.89%40,000,000 Shares of Benefical Interest0.00%20%Money Market/Mutual Funds (Sweep Acct)14.01%10% per fund (2)Total 100.00%% of portfolio maturing under one year 39.52%no les s than 20%% of portfolio maturing over one year60.48%100.00%(1) Further limited to 10% in any single issuer (2) Also limited to 20% in total.*These securities are not considered for purchases: SBA, GNMA, TVA and SALLIEMAE COSTA MESA SANITARY DISTRICT Summary of Policy Limitations March 31, 2014 Description 4
PurchaseMaturityCouponInvestment% ofMarket% of Description Broker/Dealer Date Date Rate Cost Portfolio Value Portfolio Comments State Treasurer's PoolLAIFn/aContinuous0.236%**4,24 0,159.14 $ 4,240,159.14 $ POOL Total State Treasurer's Pool 4,240,159.14 25.64%4,240,159.14 25.89%Money Market Mutual FundBank of New Yorkn/aContinuo us0.000%2,294,253.55 2,294,253.55 SWEEP Total Money Market Mutual Fund 2,294,253.55 13.88%2,294,253.55 14.01%Federal Home Loan MortgageE.J. De La Rosa08/07/1208 /07/171.000%1,000,000.00 990,570.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa12/28/1212 /28/170.950%1,000,000.00 981,220.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa02/22/1302 /22/181.150%1,000,000.00 987,656.25 FHLMC Federal Home Loan MortgageE.J. De La Rosa02/28/1302 /28/181.100%1,000,000.00 984,430.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa03/27/1303 /27/181.130%1,000,000.00 977,350.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa06/26/1306 /26/181.400%1,000,000.00 985,200.00 FHLMC Total Federal Home Loan Mortgage 6,000,000.00 36.29%5,906,426.25 36.06%Federal National Mortgage AssociationE.J. De La Ros a10/18/1210/18/171.000%1,000,000.00 989,240.00 FNMA Federal National Mortgage AssociationE.J. De La Ros a11/15/1211/15/171.000%1,000,000.00 988,260.00 FNMA Federal National Mortgage AssociationUnion Banc05/1 5/1305/15/170.700%1,000,000.00 986,270.00 FNMA Total Federal National Mortgage Association 3,000,000.00 18.14%2,963,770.00 18.09%Federal Farm Credit BankE.J. De La Rosa06/04/1306/0 4/181.250%1,000,000.00 975,710.00 FFCB Total Federal National Mortgage Association 1,000,000.00 6.05%975,710.00 5.96%Total Investments 16,534,412.69 $ 100.00%16,380,318.94 $ 100.00%**Represents the LAIF daily rate at 3/31/14 COSTA MESA SANITARY DISTRICT Schedule of Investments by Instrument Type March 31, 2014 5
InvestmentPurchaseMaturityDays toCouponYield toInve stment Broker/Dealer Type Date Date Maturity Rate Maturity Cost Local Agency Investment FundPool 10.236%**0.236%4,240,159.14 $ Bank of New YorkSweep 10.000%0.000%2,294,253.55 E.J. De La RosaFHLMC08/07/1208/07/171,2251.000%1.00 0%1,000,000.00 E.J. De La RosaFNMA10/18/1210/18/171,2971.000%1.000 %1,000,000.00 E.J. De La RosaFNMA11/15/1211/15/171,3251.000%1.000 %1,000,000.00 E.J. De La RosaFHLMC12/28/1212/28/171,3680.950%0.95 0%1,000,000.00 E.J. De La RosaFHLMC02/22/1302/22/181,4241.150%1.15 0%1,000,000.00 E.J. De La RosaFHLMC02/28/1302/28/181,4301.100%1.10 0%1,000,000.00 E.J. De La RosaFHLMC03/27/1303/27/181,4571.130%1.13 0%1,000,000.00 UnionBancFNMA05/15/1305/15/171,1410.700%0.700%1,000 ,000.00 E.J. De La RosaFFCB06/04/1306/04/181,5261.250%1.250 %1,000,000.00 E.J. De La RosaFHLMC06/26/1306/26/181,5481.400%1.40 0%1,000,000.00 Total Investment Portfolio 16,534,412.69 $ Total Portfolio Weighted Avg Interest Rate0.706%Weighted Avg Yield to Maturity0.706%Weighted Avg Days to Maturity831 Days2.28 Years **Represents the LAIF daily rate at 3/31/14 COSTA MESA SANITARY DISTRICT Investment Portfolio March 31, 2014 6
Net PurchaseMaturityIntuitionInvestment CouponInvestme ntMarketAccruedGain/(Loss)Date Date Broker/Dealer Type Par Rate Cost Value Interest If Sold n/aContinuousLAIFPOOL4,240,159.14 $ 0.236%**4,240,159.14 4,240,159.14 - - n/aContinuousBank of New YorkSWEEP2,294,253.55 0.000%2,294,253.55 2,294,253.55 - - 08/07/1208/07/17E.J. De La RosaFHLMC1,000,000.00 1.000%1,000,000.00 990,570.00 1,500.00 (9,430.00) 10/18/1210/18/17E.J. De La RosaFNMA1,000,000.00 1.000%1,000,000.00 989,240.00 4,527.77 (10,760.00) 11/15/1211/15/17E.J. De La RosaFNMA1,000,000.00 1.000%1,000,000.00 988,260.00 3,777.77 (11,740.00) 12/28/1212/28/17E.J. De La RosaFHLMC1,000,000.00 0.950%1,000,000.00 981,220.00 2,454.16 (18,780.00) 02/22/1302/22/18E.J. De La RosaFHLMC1,000,000.00 1.150%1,000,000.00 987,656.25 1,245.83 (12,343.75) 02/28/1302/28/18E.J. De La RosaFHLMC1,000,000.00 1.100%1,000,000.00 984,430.00 1,008.33 (15,570.00) 03/27/1303/27/18E.J. De La RosaFHLMC1,000,000.00 1.130%1,000,000.00 977,350.00 125.55 (22,650.00) 05/15/1305/15/17UnionBancFNMA1,000,000.00 0.700%1,000,000.00 986,270.00 4,062.50 (13,730.00) 06/04/1306/04/18E.J. De La RosaFFCB1,000,000.00 1.250%1,000,000.00 975,710.00 4,062.50 (24,290.00) 06/26/1306/26/18E.J. De La RosaFHLMC1,000,000.00 1.400%1,000,000.00 985,200.00 3,694.44 (14,800.00) Total Investments 16,534,412.69 $ 16,534,412.69 16,380,318.94 26,458.85 (154,093.75) **Represents the LAIF daily rate at 3/31/14 C O S T A M E S A S A N I T A R Y D I S T R I C T For all Maturities with Market Values March 31, 2014 7
Type ofPurchaseMaturityCouponInvestment Investment Date Date Rate Par Value Cost FHLMC08/07/1208/07/171.000%1,000,000.00 1,000,000.00 Callable 8/7/14 w/5 days notice, thereafter 1 1,2,5,8 FNMA10/18/1210/18/171.000%1,000,000.00 1,000,000.00 Callable 5/15/13 w/10 days notice, thereafter 8,11,2,5 FNMA11/15/1211/15/171.000%1,000,000.00 1,000,000.00 Callable 5/15/13 w/10 days notice, thereafter 8,11,2,5 FHLMC12/28/1212/28/170.950%1,000,000.00 1,000,000.00 Callable 12/28/13 w/5 days notice, monthly th ereafter FHLMC02/22/1302/22/181.150%1,000,000.00 1,000,000.00 Callable 8/22/13, w/5 days notice, thereafter 8,11,2,5 FHLMC02/28/1302/28/181.100%1,000,000.00 1,000,000.00 Callable 2/28/14, w/5 days notice, annually t hereafter FHLMC03/27/1303/27/181.130%1,000,000.00 1,000,000.00 Callable 3/27/15, w/5 days notice, thereafter 3,6,9,12 FNMA05/15/1305/15/170.700%1,000,000.00 1,000,000.00 Callable 5/15/14 w/10 days notice, qtrly ther eafter FFCB06/04/1306/04/181.250%1,000,000.00 1,000,000.00 Callable 9/4/13 w/5 days notice, anytime ther eafter FHLMC06/26/1306/26/181.400%1,000,000.00 1,000,000.00 Callable 3/26/15 w/5 days notice, thereafter 3,6,9 ,12 Totals 10,000,000.00 $ 10,000,000.00 $ COSTA MESA SANITARY DISTRICT Call Schedule March 31, 2014 Call Features 8
Cost 50,136.76 In Thousands 1 - 180 Days6,534 $ 181 - 365 Days- 1 - 2 Years- ##########6,562.50 2 - 3 Years - COSTA MESA SANITARY DISTRICT MATURITIES DISTRIBUTION March 31, 2014 30%40%50%60%70%39.52%48.39%6,562.50 2 - 3 Years - ##########3 - 4 Years8,000 4 - 5 Years2,000 TOTAL 16,534 $ 0%10%20%30%1 -180 Days 181 -365 Days 1 -2 Years 2 -3 Years 3 -4 Years 4 -5 Years 000000 0.00%0.00%0.00%12.10% 9
Costa Mesa Sanitary District Portfolio Interest Rate Information as of March 31, 2014 0.20%0.40%0.60%0.80%1.00%1.20%1.40%1.60%1.80%2.00%3 month T-Bill 6 month T-Bill 2 year T-Note 3 year T-Note 5 year T-Note CMSD-monthly LAIF-monthly OC Pool-monthly 0.00%10