16 - 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: July 24 , 2014 Subject: Investment Report for the Month of June 2014 Summary Attached is the Investment Report for the month of June 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 June 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 June 30 , 2014 . The District’s investments are in compliance with the Statement of Investment Policy adopted by the Board at the Ju ne 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 c ost amount, which is the amount the District is entitled to withdraw. This reporting practice is consistent with industry standard practices for similar funds. The weighted average stated rate of return (current yield) for the District’s investment portfo lio as of June 30 , 2014 , was 0.7 77 %. The yield to mat urity of the portfolio was 0.7 78 %. The District’s weighted average interest rate was 55 basis points (0.549 %) above the daily effectiv e yield of LAIF, which was 0.2 28 % as of June 30 , 2014 . The weighted average number of days to maturity for the District’s total portfolio was 7 70 days (2.11
Board of Directors July 24 , 2014 Page 2 of 2 years). The average duration of the underlying securities in LAIF as of June 30 , 2014 was 2 3 2 days. The District’s investment portfolio is in compliance 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 June 30 , 2014 w as 41.81 %. As of June 30 , 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. Environmental Review The approval of the monthly Investment Report is not a disturbance of the environment similar to grading or construction and is not a project under CEQA or t he District’s CEQA Guidelines. Financial Review The portfolio was budgeted to earn an average rate of 0.900% for the year ending Ju ne 31 , 201 4 . Through June 30 , 2014 the portfolio has earned a weighted average interest rate of 0.777 %. Given the low interest rates throughout the year, investment earnings will fall short of budget estimates once the final year -end adjustments are made . Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the July 24 , 2014 Board of Directors regular mee ting at District Headquarters and on the District’s website at www.cmsdca.gov . Alternative Actions 1. Refer the matter back to staff Attachments Attachment A: Investment Report
`DepositsOutstanding Bank Balance In Transits Checks Book Balance Active Accounts: Bank of America 234,851.43 $ - 793,575.11 (558,723.68)$ Total Active Accounts234,851.43 - 793,575.11 (558,723.68) Market Value Increase Decrease Cost Investments: Local Agency Investment Fund8,467,569.31 $ - - 8,467,569.31 $ Money Market/Sweep Account226,246.47 - - 226,246.47 Negotiable Certificates of Deposit99,440.00 - (98.36) 99,538.36 Federal Agency Securities11,930,500.00 - (69,500.00) 12,000,000.00 Total Investments20,723,755.78 - (69,598.36) 20,793,354.14 Total Pooled Cash & Investments20,958,607.21 $ -$ 723,976.75 $ 20,234,630.46 $ 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 June 30, 2014 Costa Mesa Sanitary District Pooled Cash and Investments by Fund June 30, 2014 Solid Waste Fund: Operating Reserve 803,000.00 $ Unreserved: Designated for working capital 1,494,000.00 Undesignated 3,463,272.41 Liquid Waste Fund: Operating Reserve 358,000.00 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 (648,128.09) Sewer Construction Fund 100,000.00 Facilities Revolving Fund 332,604.41 Asset Replacement Fund 508,362.16 Asset Management Fund 6,913,742.95 Total Pooled Cash & Investments 20,234,630.46 $ Treasurer Date Marcus D. Davis 7/17/14 1
Total investments outstanding as of May 31, 2014 21,400,347.75 $ Additions:Gain on sale of investment - Investment purchases 99,538.36 Deductions:Investments called - Net increase (decrease) in Sweep Account (81,531.97) Net increase (decrease) in LAIF (625,000.00) Total investments outstanding as of June 30, 2014 20,793,354.14 $ 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 Investment Activity Summary June 30, 2014 2
Interest CUSIP PurchaseMaturityCouponInvestmentEarned at Number Investment Date Date Rate Cost 06/30/14 n/aLocal Agency Investment Fundn/an/a0.228%8,467,56 9.31 $ n/a**n/aBank of New York-Sweep Acctn/an/a0.010%226,246.4 7 n/a 3134G3ZR4Federal Home Loan Mortgage08/07/1208/07/17 1.000%1,000,000.00 3,972.22 3136G0L58Federal National Mortgage Assn10/18/1210/1 8/171.000%1,000,000.00 2,000.00 3135G0RQ8Federal National Mortgage Assn11/15/1211/1 5/171.000%1,000,000.00 1,250.00 313381LC7Federal Home Loan Mortgage12/28/1212/28/17 0.950%1,000,000.00 52.78 3133823B7Federal Home Loan Mortgage02/22/1302/22/18 1.150%1,000,000.00 4,088.89 3133826D0Federal Home Loan Mortgage02/28/1302/28/18 1.100%1,000,000.00 3,727.78 313382HR7Federal Home Loan Mortgage03/27/1303/27/18 1.130%1,000,000.00 2,919.17 3136G1L31Federal National Mortgage Assn05/15/1305/1 5/170.700%1,000,000.00 875.00 3133ECQW7Federal Farm Credit Bank06/04/1306/04/181.250%1,000,000.00 902.78 3134G47G7Federal Home Loan Mortgage06/26/1306/26/18 1.400%1,000,000.00 155.56 3130A1FS2Federal Home Loan Mortgage04/17/1404/17/19 2.000%1,000,000.00 4,055.56 3134G54H5Federal Home Loan Mortgage05/28/1411/28/17 1.350%1,000,000.00 1,200.00 87165FAC8Synchrony Bank Retail CTF Dep06/06/1406/06 /192.000%99,538.36 131.51 Totals 20,793,354.14 $ 25,331.25 $ **Represents the LAIF daily rate at 6/30/14.Comments COSTA MESA SANITARY DISTRICT Investment and Investment Earnings June 30, 2014 3
Current %of Market Value 06/30/14 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 38.37%Unlimited FNMA 14.41%Unlimited FFCB 4.79%Unlimited Other *0.00%Unlimited Banker's Acceptances0.00%25% (1)Certificates of Deposit0.00%25%Negotiable Certificates of Deposits 0.48%25% (1)COSTA MESA SANITARY DISTRICT Summary of Policy Limitations June 30, 2014 Description Negotiable Certificates of Deposits 0.48%25% (1)Commercial Paper0.00%25% (1)Medium Term Corporate Notes0.00%20% (1)LAIF (Local Agency Investment Fund)40.86%40,000,000 Shares of Benefical Interest0.00%20%Money Market/Mutual Funds (Sweep Acct)1.09%10% per fund (2)Total 100.00%% of portfolio maturing under one year 41.81%no les s than 20%% of portfolio maturing over one year58.19%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 4
PurchaseMaturityCouponInvestment% ofMarket% of Description Broker/Dealer Date Date Rate Cost Portfolio Value Portfolio Comments State Treasurer's PoolLAIFn/aContinuous0.228%**8,46 7,569.31 $ 8,467,569.31 $ Pool Total State Treasurer's Pool 8,467,569.31 40.72%8,467,569.31 40.86%Money Market Mutual FundBank of New Yorkn/aContinuo us0.010%226,246.47 226,246.47 Sweep Total Money Market Mutual Fund 226,246.47 1.09%226,246.47 1.09%Federal Home Loan MortgageE.J. De La Rosa08/07/1208 /07/171.000%1,000,000.00 994,780.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa12/28/1212 /28/170.950%1,000,000.00 989,180.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa02/22/1302 /22/181.150%1,000,000.00 994,730.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa02/28/1302 /28/181.100%1,000,000.00 992,080.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa03/27/1303 /27/181.130%1,000,000.00 985,610.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa06/26/1306 /26/181.400%1,000,000.00 993,850.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa04/17/1404 /17/192.000%1,000,000.00 1,000,330.00 FHLMC Federal Home Loan MortgageUnion Banc05/28/1411/28/1 71.350%1,000,000.00 1,001,860.00 FHLMC Total Federal Home Loan Mortgage 8,000,000.00 38.47%7,952,420.00 38.37%Federal National Mortgage AssociationE.J. De La Ros a10/18/1210/18/171.000%1,000,000.00 993,400.00 FNMA Federal National Mortgage AssociationE.J. De La Ros a11/15/1211/15/171.000%1,000,000.00 1,000,290.00 FNMA Federal National Mortgage AssociationUnion Banc05/1 5/1305/15/170.700%1,000,000.00 992,030.00 FNMA Total Federal National Mortgage Association 3,000,000.00 14.43%2,985,720.00 14.41%Federal Farm Credit BankE.J. De La Rosa06/04/1306/0 4/181.250%1,000,000.00 992,360.00 FFCB Total Federal National Mortgage Association 1,000,000.00 4.81%992,360.00 4.79%Synchrony Bank Retail Certificate of DepositMulti-B ank Securities06/06/1406/06/192.000%99,538.36 99,440.00 Negotiable CD Total Negotiable Certificates of Deposit 99,538.36 0.48%99,440.00 0.48%Total Investments 20,793,354.14 $ 100.00%20,723,755.78 $ 100.00%**Represents the LAIF daily rate at 6/30/14.COSTA MESA SANITARY DISTRICT Schedule of Investments by Instrument Type June 30, 2014 5
InvestmentPurchaseMaturityDays toCouponYield toInve stment Broker/Dealer Type Date Date Maturity Rate Maturity Cost Local Agency Investment FundPool 10.228%**0.228%8,467,569.31 $ Bank of New YorkSweep 10.010%0.010%226,246.47 E.J. De La RosaFHLMC08/07/1208/07/171,1341.000%1.00 0%1,000,000.00 E.J. De La RosaFNMA10/18/1210/18/171,2061.000%1.000 %1,000,000.00 E.J. De La RosaFNMA11/15/1211/15/171,2341.000%1.000 %1,000,000.00 E.J. De La RosaFHLMC12/28/1212/28/171,2770.950%0.95 0%1,000,000.00 E.J. De La RosaFHLMC02/22/1302/22/181,3331.150%1.15 0%1,000,000.00 E.J. De La RosaFHLMC02/28/1302/28/181,3391.100%1.10 0%1,000,000.00 E.J. De La RosaFHLMC03/27/1303/27/181,3661.130%1.13 0%1,000,000.00 UnionBancFNMA05/15/1305/15/171,0500.700%0.700%1,000 ,000.00 E.J. De La RosaFFCB06/04/1306/04/181,4351.250%1.250 %1,000,000.00 E.J. De La RosaFHLMC06/26/1306/26/181,4571.400%1.40 0%1,000,000.00 E.J. De La RosaFHLMC04/17/1404/17/191,7522.000%2.00 0%1,000,000.00 UnionBancFHLMC05/28/1411/28/171,2471.350%1.350%1,00 0,000.00 Multi-Bank SecuritiesNegotiable CD06/06/1406/06/191 ,8022.000%2.106%99,538.36 Total Investment Portfolio 20,793,354.14 $ Total Portfolio Weighted Avg Interest Rate0.777%Weighted Avg Yield to Maturity0.778%Weighted Avg Days to Maturity770 Days2.11 Years **Represents the LAIF daily rate at 6/30/14.COSTA MESA SANITARY DISTRICT Investment Portfolio June 30, 2014 6
Net PurchaseMaturityIntuitionInvestment CouponInvestme ntMarketAccruedGain/(Loss)Date Date Broker/Dealer Type Par Rate Cost Value Interest If Sold n/aContinuousLAIFPool8,467,569.31 $ 0.228%**8,467,569.31 8,467,569.31 - - n/aContinuousBank of New YorkSweep226,246.47 0.010%226,246.47 226,246.47 - - 08/07/1208/07/17E.J. De La RosaFHLMC1,000,000.00 1.000%1,000,000.00 994,780.00 3,972.22 (5,220.00) 10/18/1210/18/17E.J. De La RosaFNMA1,000,000.00 1.000%1,000,000.00 993,400.00 2,000.00 (6,600.00) 11/15/1211/15/17E.J. De La RosaFNMA1,000,000.00 1.000%1,000,000.00 1,000,290.00 1,250.00 290.00 12/28/1212/28/17E.J. De La RosaFHLMC1,000,000.00 0.950%1,000,000.00 989,180.00 52.78 (10,820.00) 02/22/1302/22/18E.J. De La RosaFHLMC1,000,000.00 1.150%1,000,000.00 994,730.00 4,088.89 (5,270.00) 02/28/1302/28/18E.J. De La RosaFHLMC1,000,000.00 1.100%1,000,000.00 992,080.00 3,727.78 (7,920.00) 03/27/1303/27/18E.J. De La RosaFHLMC1,000,000.00 1.130%1,000,000.00 985,610.00 2,919.17 (14,390.00) 05/15/1305/15/17UnionBancFNMA1,000,000.00 0.700%1,000,000.00 992,030.00 875.00 (7,970.00) 06/04/1306/04/18E.J. De La RosaFFCB1,000,000.00 1.250%1,000,000.00 992,360.00 902.78 (7,640.00) 06/26/1306/26/18E.J. De La RosaFHLMC1,000,000.00 1.400%1,000,000.00 993,850.00 155.56 (6,150.00) 04/17/1404/17/19E.J. De La RosaFHLMC1,000,000.00 2.000%1,000,000.00 1,000,330.00 4,055.56 330.00 05/28/1411/28/17UnionBancFHLMC1,000,000.00 1.350%1,000,000.00 1,001,860.00 1,200.00 1,860.00 06/06/1406/06/19Multi-Bank SecuritiesNegotiable CD1 00,000.00 2.000%99,538.36 99,440.00 131.51 (98.36) Total Investments 20,793,815.78 $ 20,793,354.14 20,723,755.78 25,331.25 (69,598.36) **Represents the LAIF daily rate at 6/30/14.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 June 30, 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 FHLMC04/17/1404/17/192.000%1,000,000.00 1,000,000.00 Callable 7/17/14w/5 days notice, anytime ther eafter 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 FHLMC05/28/1411/28/171.350%1,000,000.00 1,000,000.00 Callable 8/28/14 w/5 days notice, anytime the reafter Negotiable CD06/06/1406/06/192.000%100,000.00 99,538.36 None Totals 12,100,000.00 $ 12,099,538.36 $ COSTA MESA SANITARY DISTRICT Call Schedule June 30, 2014 Call Features 8
Cost 50,136.76 In Thousands 1 - 180 Days8,693 $ 181 - 365 Days- 1 - 2 Years- ##########6,562.50 2 - 3 Years 1,000 COSTA MESA SANITARY DISTRICT MATURITIES DISTRIBUTION June 30, 2014 30%40%50%60%70%41.81%48.09%6,562.50 2 - 3 Years 1,000 ##########3 - 4 Years10,000 4 - 5 Years1,100 TOTAL 20,793 $ 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%4.81%5.29% 9
Costa Mesa Sanitary District Portfolio Interest Rate Information as of June 30, 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