09 - 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: September 25 , 2014 Subject: Investment Report for the Month of August 2014 Summary Attached is the Investment Report for the month of August 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 August 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 August 31 , 2014 . The District’s investments are in compliance with the Statement of Investment Policy adopted by the Board at the June 26 , 201 4 regular meeting, as well as the California Government Code. The market values in this report were provided by our third party custodian, Pershing, LLC, except for the Local Agency Investment Fund (LAIF). The market value of LAIF was provided by the Stat e 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. 09
Board of Directors September 25 , 2014 Page 2 of 3 The weighted average stated rate of return (current yield) for the District’s investment portfolio as of August 31 , 2014 , was 0.834 %. The yield to mat urity of the portfolio was 0.834 %. The District’s weighted average interest rate was 59 basis points (0.5 90 %) above the daily effectiv e yield of LAIF, which was 0.2 44 % as of August 31 , 2014 . The weighted average number of days to maturity for the District’s total portfolio was 808 days (2.21 years). The average duration of the underlying securities in LAIF as of August 31 , 2014 was 2 56 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 matur e within one year. The percentage of the portfolio maturing in less than one year as of August 31 , 2014 was 41.45 %. As of August 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. 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 o f 0.900% for the year ending June 30 , 201 5 . Through August 31 , 2014 , the portfolio has earned a weighted average interest rate of 0.794 %.
Board of Directors September 25 , 2014 Page 3 of 3 Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the September 25 , 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 . Alternative Actions 1. Refer the matter back to staff Attachments Treasurer’s Report of Pooled Cash and Investments as of August 31 , 2014
`DepositsOutstanding Bank Balance In Transits Checks Book Balance Active Accounts: Bank of America 254,605.05 $ - 467,695.83 (213,090.78)$ Total Active Accounts254,605.05 - 467,695.83 (213,090.78) Market Value Increase Decrease Cost Investments: Local Agency Investment Fund6,852,080.03 $ - - 6,852,080.03 $ Money Market/Sweep Account22,657.22 - - 22,657.22 Negotiable Certificates of Deposit324,554.50 - 229.50 324,325.00 Federal Agency Securities11,931,545.00 - (68,455.00) 12,000,000.00 Total Investments19,130,836.75 - (68,225.50) 19,199,062.25 Total Pooled Cash & Investments19,385,441.80 $ -$ 399,470.33 $ 18,985,971.47 $ 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 August 31, 2014 Costa Mesa Sanitary District Pooled Cash and Investments by Fund August 31, 2014 Solid Waste Fund: Operating Reserve 803,000.00 $ Unreserved: Designated for working capital 1,494,000.00 Undesignated 2,782,699.76 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 (1,275,196.46) Sewer Construction Fund 100,000.00 Facilities Revolving Fund 347,389.80 Asset Replacement Fund 511,301.03 Asset Management Fund 6,955,000.72 Total Pooled Cash & Investments 18,985,971.47 $ Treasurer Date Marcus D. Davis 9/17/14 1
Total investments outstanding as of July 31, 2014 19,982,812.25 $ Additions:Gain on sale of investment - Investment purchases 625,000.00 Deductions:Investments called - Net increase (decrease) in Sweep Account (608,750.00) Net increase (decrease) in LAIF (800,000.00) Total investments outstanding as of August 31, 2014 19,199,062.25 $ 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 August 31, 2014 2
Interest CUSIP PurchaseMaturityCouponInvestmentEarned at Number Investment Date Date Rate Cost 08/31/14 n/aLocal Agency Investment Fundn/an/a0.244%6,852,08 0.03 $ n/a**n/aPershing-Sweep Acctn/an/a0.000%22,657.22 n/a 3134G3ZR4Federal Home Loan Mortgage08/07/1208/07/17 1.000%1,000,000.00 666.67 3136G0L58Federal National Mortgage Assn10/18/1210/1 8/171.000%1,000,000.00 3,694.44 3135G0RQ8Federal National Mortgage Assn11/15/1211/1 5/171.000%1,000,000.00 2,944.44 313381LC7Federal Home Loan Mortgage12/28/1212/28/17 0.950%1,000,000.00 1,662.50 3133823B7Federal Home Loan Mortgage02/22/1302/22/18 1.150%1,000,000.00 287.50 3133826D0Federal Home Loan Mortgage02/28/1302/28/18 1.100%1,000,000.00 91.67 313382HR7Federal Home Loan Mortgage03/27/1303/27/18 1.130%1,000,000.00 4,833.89 3136G1L31Federal National Mortgage Assn05/15/1305/1 5/170.700%1,000,000.00 2,061.11 3133ECQW7Federal Farm Credit Bank06/04/1306/04/181.250%1,000,000.00 3,020.83 3134G47G7Federal Home Loan Mortgage06/26/1306/26/18 1.400%1,000,000.00 2,527.78 3134G54H5Federal Home Loan Mortgage05/28/1411/28/17 1.350%1,000,000.00 3,487.50 87165FAC8Synchrony Bank Retail CTF Dep06/06/1406/06 /192.000%99,500.00 471.23 06740KGY7Barclays Bank Retail CTF Dep07/02/1407/05/160.650%99,825.00 106.85 3133EDR20Federal Farm Credit Bank07/24/1407/24/191.900%500,000.00 976.39 3130A2PNOFederal Home Loan Mortgage08/06/1408/06/19 2.000%500,000.00 694.44 20033AGD2Comenity Capital Bank CTF Dep08/25/1402/25 /160.750%125,000.00 15.41 Totals 19,199,062.25 $ 27,542.65 $ **Represents the LAIF daily rate at 8/31/14 Comments COSTA MESA SANITARY DISTRICT Investment and Investment Earnings August 31, 2014 3
Current %of Market Value 08/31/14 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 38.98%Unlimited FNMA 15.62%Unlimited FFCB 7.77%Unlimited Other *0.00%Unlimited Banker's Acceptances0.00%25% (1)Certificates of Deposit0.00%25%Negotiable Certificates of Deposits1.70%25% (1)Commercial Paper0.00%25% (1)Medium Term Corporate Notes0.00%20% (1)LAIF (Local Agency Investment Fund)35.82%40,000,000 Shares of Benefical Interest0.00%20%Money Market/Mutual Funds (Sweep Acct)0.12%10% per fund (2)Total 100.00%% of portfolio maturing under one year 41.45%no les s than 20%% of portfolio maturing over one year58.55%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 August 31, 2014 Description 4
PurchaseMaturityCouponInvestment% ofMarket% of Description Broker/Dealer Date Date Rate Cost Portfolio Value Portfolio Comments State Treasurer's PoolLAIFn/aContinuous0.244%**6,85 2,080.03 $ 6,852,080.03 $ Pool Total State Treasurer's Pool 6,852,080.03 35.69%6,852,080.03 35.82%Money Market Mutual FundPershingn/aContinuous0.000%22,657.22 22,657.22 Sweep Total Money Market Mutual Fund 22,657.22 0.12%22,657.22 0.12%Federal Home Loan MortgageE.J. De La Rosa08/07/1208 /07/171.000%1,000,000.00 994,540.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa12/28/1212 /28/170.950%1,000,000.00 989,960.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa02/22/1302 /22/181.150%1,000,000.00 995,270.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa02/28/1302 /28/181.100%1,000,000.00 992,750.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa03/27/1303 /27/181.130%1,000,000.00 986,830.00 FHLMC Federal Home Loan MortgageE.J. De La Rosa06/26/1306 /26/181.400%1,000,000.00 995,200.00 FHLMC Federal Home Loan MortgageUnion Banc05/28/1411/28/1 71.350%1,000,000.00 1,002,030.00 FHLMC Federal Home Loan MortgageMulti=Bank Securities08/0 6/1408/06/192.000%500,000.00 499,720.00 FHLMC Total Federal Home Loan Mortgage 7,500,000.00 39.06%7,456,300.00 38.98%Federal National Mortgage AssociationE.J. De La Ros a10/18/1210/18/171.000%1,000,000.00 996,420.00 FNMA Federal National Mortgage AssociationE.J. De La Ros a11/15/1211/15/171.000%1,000,000.00 999,850.00 FNMA Federal National Mortgage AssociationUnion Banc05/1 5/1305/15/170.700%1,000,000.00 992,260.00 FNMA Total Federal National Mortgage Association 3,000,000.00 15.63%2,988,530.00 15.62%Federal Farm Credit BankE.J. De La Rosa06/04/1306/0 4/181.250%1,000,000.00 986,440.00 FFCB Federal Farm Credit BankMult-Bank Securities07/24/1 407/24/191.900%500,000.00 500,275.00 FFCB Total Federal National Mortgage Association 1,500,000.00 7.81%1,486,715.00 7.77%Synchrony Bank Retail Certificate of DepositMulti-B ank Securities06/06/1406/06/192.000%99,500.00 99,790.00 Negotiable CD Barclays Bank Retail Certificate of DepositMulti-Ba nk Securities07/02/1407/05/160.650%99,825.00 99,817.00 Negotiable CD Comenity Capital BankMulti-Bank Securities08/25/140 2/25/160.750%125,000.00 124,947.50 Negotiable CD Total Negotiable Certificates of Deposit 324,325.00 1.69%324,554.50 1.70%Total Investments 19,199,062.25 $ 100.00%19,130,836.75 $ 100.00%**Represents the LAIF daily rate at 8/31/14 COSTA MESA SANITARY DISTRICT Schedule of Investments by Instrument Type August 31, 2014 5
InvestmentPurchaseMaturityDays toCouponYield toInve stment Broker/Dealer Type Date Date Maturity Rate Maturity Cost Local Agency Investment FundPool 10.244%**0.244%6,852,080.03 $ PershingSweep 10.000%0.000%22,657.22 E.J. De La RosaFHLMC08/07/1208/07/171,0721.000%1.00 0%1,000,000.00 E.J. De La RosaFNMA10/18/1210/18/171,1441.000%1.000 %1,000,000.00 E.J. De La RosaFNMA11/15/1211/15/171,1721.000%1.000 %1,000,000.00 E.J. De La RosaFHLMC12/28/1212/28/171,2150.950%0.95 0%1,000,000.00 E.J. De La RosaFHLMC02/22/1302/22/181,2711.150%1.15 0%1,000,000.00 E.J. De La RosaFHLMC02/28/1302/28/181,2771.100%1.10 0%1,000,000.00 E.J. De La RosaFHLMC03/27/1303/27/181,3041.130%1.13 0%1,000,000.00 UnionBancFNMA05/15/1305/15/179880.700%0.700%1,000,0 00.00 E.J. De La RosaFFCB06/04/1306/04/181,3731.250%1.250 %1,000,000.00 E.J. De La RosaFHLMC06/26/1306/26/181,3951.400%1.40 0%1,000,000.00 UnionBancFHLMC05/28/1411/28/171,1851.350%1.350%1,00 0,000.00 Multi-Bank SecuritiesNegotiable CD06/06/1406/06/191 ,7402.000%2.106%99,500.00 Multi-Bank SecuritiesNegotiable CD07/02/1407/05/166 740.650%0.650%99,825.00 Multi-Bank SecuritiesFFCB07/24/1407/29/191,7931.900 %1.900%500,000.00 Multi-Bank SecuritiesFHLMC08/06/1408/06/191,8012.00 0%2.000%500,000.00 Multi-Bank SecuritiesNegotiable CD08/25/1402/25/165 430.750%0.750%125,000.00 Total Investment Portfolio 19,199,062.25 $ Total Portfolio Weighted Avg Interest Rate0.834%Weighted Avg Yield to Maturity0.834%Weighted Avg Days to Maturity808 Days2.21 Years **Represents the LAIF daily rate at 8/31/14 COSTA MESA SANITARY DISTRICT Investment Portfolio August 31, 2014 6
Net PurchaseMaturityIntuitionInvestment CouponInvestme ntMarketAccruedGain/(Loss)Date Date Broker/Dealer Type Par Rate Cost Value Interest If Sold n/aContinuousLAIFPool6,852,080.03 $ 0.244%**6,852,080.03 6,852,080.03 - - n/aContinuousPershingSweep22,657.22 0.000%22,657.22 22,657.22 - - 08/07/1208/07/17E.J. De La RosaFHLMC1,000,000.00 1.000%1,000,000.00 994,540.00 666.67 (5,460.00) 10/18/1210/18/17E.J. De La RosaFNMA1,000,000.00 1.000%1,000,000.00 996,420.00 3,694.44 (3,580.00) 11/15/1211/15/17E.J. De La RosaFNMA1,000,000.00 1.000%1,000,000.00 999,850.00 2,944.44 (150.00) 12/28/1212/28/17E.J. De La RosaFHLMC1,000,000.00 0.950%1,000,000.00 989,960.00 1,662.50 (10,040.00) 02/22/1302/22/18E.J. De La RosaFHLMC1,000,000.00 1.150%1,000,000.00 995,270.00 287.50 (4,730.00) 02/28/1302/28/18E.J. De La RosaFHLMC1,000,000.00 1.100%1,000,000.00 992,750.00 91.67 (7,250.00) 03/27/1303/27/18E.J. De La RosaFHLMC1,000,000.00 1.130%1,000,000.00 986,830.00 4,833.89 (13,170.00) 05/15/1305/15/17UnionBancFNMA1,000,000.00 0.700%1,000,000.00 992,260.00 2,061.11 (7,740.00) 06/04/1306/04/18E.J. De La RosaFFCB1,000,000.00 1.250%1,000,000.00 986,440.00 3,020.83 (13,560.00) 06/26/1306/26/18E.J. De La RosaFHLMC1,000,000.00 1.400%1,000,000.00 995,200.00 2,527.78 (4,800.00) 05/28/1411/28/17UnionBancFHLMC1,000,000.00 1.350%1,000,000.00 1,002,030.00 3,487.50 2,030.00 06/06/1406/06/19Multi-Bank SecuritiesNegotiable CD1 00,000.00 2.000%99,500.00 99,790.00 471.23 290.00 07/02/1407/05/16Multi-Bank SecuritiesNegotiable CD1 00,000.00 0.650%99,825.00 99,817.00 106.85 (8.00) 07/24/1407/24/19Multi-Bank SecuritiesFFCB500,000.00 1.900%500,000.00 500,275.00 976.39 275.00 08/06/1408/06/19Multi-Bank SecuritiesFHLMC500,000.0 0 2.000%500,000.00 499,720.00 694.44 (280.00) 08/25/1402/25/16Multi-Bank SecuritiesNegotiable CD1 25,000.00 0.750%125,000.00 124,947.50 15.41 (52.50) Total Investments 19,199,737.25 $ 19,199,062.25 19,130,836.75 27,542.65 (68,225.50) **Represents the LAIF daily rate at 8/31/14 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 August 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 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 99,500.00 None Negotiable CD07/02/1407/05/160.650%100,000.00 99,825.00 None FFCB07/24/1407/24/191.900%500,000.00 500,000.00 Callable 7/24/15 w/5 days notice, anytime thereafter FHLMC08/06/1408/06/192.000%500,000.00 500,000.00 Callable 11/6/14 w/5 days notice, anytime thereafter Negotiable CD08/25/1402/25/160.750%125,000.00 125,000.00 None Totals 12,325,000.00 $ 12,324,325.00 $ COSTA MESA SANITARY DISTRICT Call Schedule August 31, 2014 Call Features 8
Cost 50,136.76 In Thousands 1 - 180 Days8,283 $ 181 - 365 Days- 1 - 2 Years100 ##########6,562.50 2 - 3 Years 1,000 COSTA MESA SANITARY DISTRICT MATURITIES DISTRIBUTION August 31, 2014 30%40%50%60%70%41.45%50.05%6,562.50 2 - 3 Years 1,000 ##########3 - 4 Years10,000 4 - 5 Years599 TOTAL 19,982 $ 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%0.50%5.00%3.00% 9
Costa Mesa Sanitary District Portfolio Interest Rate Information as of August 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