Minutes - Investment - 2011-04-28i
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COSTA MESA SANITARY DISTRICT
MINUTES OF INVESTMENT OVERSIGHT COMMITTEE MEETING
April 28, 2011
CALL TO ORDER The meeting was called to order at 5:00 p.m. by Treasurer Marc Davis
ROLL CALL Committee Members Present:
President Bob Ooten (rotating committee member)
Director Jim Ferryman (rotating committee member)
Director Mike Scheafer
Mr. Scott Carroll, General Manager
Staff Members Present:
Mr. Marc Davis, Treasurer
Ms. Sherry Kallab, Administrative Manager
Public Present: None
NEW BUSINESS Review of Investment Report
Mr. Davis reported that the District's portfolio was earning approximately
1.185% as of March 31, 2011. Staff budgeted 1.25% for the year so we are
below target from a budget standpoint. The District's cash balance is up
some so total interest revenue is expected to be close to budget even though
the interest rate is down.
One investment was purchased, a Fannie Mae, the first of April, a 3'/2 year
security at 1.8% interest, callable beginning September this year. Mr. Davis
explained the one year graph included in the report tracks the performance of
the portfolio in relation to certain benchmarks. The.district dipped a little bit
below the 3 year T -note this month in interest rates.
Mr. Davis referred to the new graph requested by President Ooten detailing
the last five years of cash flow and what drives the changes in the cash
balances. Analysis of the changes in cash balance will be included in next
month's Treasury report. Mr. Davis noted twice a year in the December
quarter and June quarter there are spikes in the cash balance. The spikes
indicate the months the District receives most of its revenue from the annual
charge. The dry.period for revenue starts in the June time frame and runs
through November. Mr. Davis noted the portfolio has to be positioned such
that liquid resources are available to cover outflows during that period of
time.
Mr. Davis is forecasting the interest rate for next fiscal year at 1 %. LAIF is
currently only paying 0.5 %. Almost half of the portfolio is currently in LAIF.
Mr. Davis plans to take some of those funds and invest them in a longer term
MINUTES OF INVESTMENT OVERSIGHT COMMITTEE MEETING April 28, 2011
Page 2
securities. A security was purchased yesterday that settles on May 11, 2011.
It was a Federal Home Loan Bank with a 2% interest rate, and is a 4'/2 year
security with call protection of 1 year. The 2% rate is guaranteed until it is
eligible to be recalled. The Investment Policy will be discussed at the next
investment oversight meeting. The policy is up for Board approval at the June
meeting.
PUBLIC COMMENTS There were no items discussed under public comments..
ADJOURNMENT The meeting adjourned at 5:18 p.m.
Approved by:
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C&nmittee Member:
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