21 - INVESTMENT REPORT JUNE 2012ITEM 21
COST .A 9KESA SAiVTART(DISTRICT
Memorandum
To: Board of Directors
Via: Scott Carroll, General Manager
i .
From: Marc Davis, Treasurer
Date: July 26, 2012
..... an Independent Specia[ District
Subject: Investment Report for the Month of June 2012
Summary
Attached is the Investment Report for the month of June 2012. 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 2012.
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,
2012. The District's investments are in compliance with the Statement of Investment
Policy adopted by the Board at the July 28, 2011 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.
Board of Directors
July 26, 2012
Page 2 of 3
The weighted average stated rate of return (current yield) for the District's investment
portfolio as of June 30, 2012, was 0.891%. The yield to maturity of the portfolio was
0.914 %. The District's weighted average interest rate was 54 basis points (0.541 %)
above the daily .effective yield of LAIF, which was 0.350% as of June 30, 2012. The
weighted average number of days to maturity for the District's total portfolio was 963
days (2.64 years). The average duration of the underlying securities in LAIF as of June
30, 2012, which is the most current information available, was 265 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, 2012 was
39.16 %.
As of June 30, 2012, 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 1.100% for the year ending June
29, 2012. Through June 30, 2012, the portfolio has earned a weighted average interest
rate of 1.076 %. Staff anticipates that although the average rate is less than the
targeted rate, the District will be close to budget with its estimated investment earnings.
Committee Recommendation.
Committee review is not. required.
2
Board of Directors
July 26, 2012
Paae3of3
Public Notice Process
Copies of this report are on file and will be included with the entire agenda packet for
the July 26, 2012 Board of Directors regular meeting at District Headquarters (628 W.
19th Street) and on the District's website at www.crosdca.gov.
Alternative Actions
1. Refer the matter back to staff
Attachments
Treasurer's Report of Pooled Cash and Investments as of June 30, 2012
3
COSTA MESA SANITARY DISTRICT
Treasurer's Report of Pooled Cash and Investments
June 30, 2012
Bank Balance
Active Accounts:
Bank of America $ 384,950.90
Total Active Accounts 384,950.90
Market Value
Investments:
Local Agency Investment Fund $ 6,004,250.96
Money Market/Sweep Account 1,077,550.03
Federal Agency Securities 11,029,560.00
Total Investments 18,111,360.99
Deposits
In Transits
Outstanding
Checks Book Balance
- 235,818.74 $ 149,132.16
- 235,818.74 149,132.16
Market Adjustment
Increase Decrease Cost
Total Pooled Cash & Investments $ 18,496,311.89 $ -
CMSD Solid Waste Activities
CMSD Liquid Waste Activities
Sewer Construction Fund
Facilities Revolving Fund
Asset Replacement Fund
Asset Management Fund
Total Pooled Cash & Investments
Marcus D. Davis
Treasurer
$ 6,004,250.96
- 1,077,550.03
31,110.00 10,998,450.00
31,110.00 18,080,250.99
$ 266,928.74. $ 18,229,383.15
Costa Mesa Sanitary District
Pooled Cash and Investments by Fund
June 30, 2012
1
6/17/12
Date
$ 5,724,847.28
6,095,238.81
100,000.00
6,569.15
343,928.74
5,958,799.17
$ 18,229,383.15
COSTA MESA SANITARY DISTRICT
Investment Activity Summary
June 30, 2012
Total investments outstanding as of May 31, 2012
Additions:
Gain on sale of investment
Investment purchases
Deductions:
Investment maturity /sale proceeds
Loss on sale of investment
Investments called
Net increase (decrease) in Sweep Account
Net increase (decrease) in LAIF
Total investments outstanding as of June 30, 2012
2
$ 19,100,230.18
1,000,000.00
,(999,979.19)
(1,020,000.00)
$ 18,080,250.99
COSTAWESA SANITARY DISTRICT
Investment and Investment Earnings
June 30, 2012
Totals
"Represents the LAIF daily rate at 6/30/12
3
$ 18,080,250.99 $ 33,227.45
Interest
CUSIP
Purchase
Maturity
Coupon
Investment
Earned at
Number
Investment
Date
Date
Rate
Cost
06/30/12 Comments
n/a
Local Agency Investment Fund
n/a
n/a
0.350 %'
$ 6,004,250.96
n/a '*
n/a
Bank of New York -Sweep Acct
n/a
n/a
0.000%
1,077,550.03
n/a
3134G2WS7
Federal Home Loan Mortgage
08/23/11
05/23/16
1.540%
- 999,700.00
1,625.55
3136FR71_1
Federal National Mortgage Assn
09/28/11
09/28/16
1.000%
1,000,000.00
2,583.33
3136FTEB1
Federal National Mortgage Assn
10/26/11
10/26/16
1.500%
1,000,000.00
2,708.33-.
31331KV56
Federal Farm Credit Bank
11/23/11
11/23/16
1.500%
1,000,000.00
1,583.33
31331K5G1
Federal Farm Credit Bank
01/04/12
01/04/16
1.120%
1,000,000.00
5,506.66
3134G3GJ3
Federal Home Loan Mortgage
01/17/12
01/17/17
1.375%
998,750.00
6,263.88
3134G3HL7
Federal Home Loan Mortgage
01/18/12
07/18/16
1.300%
1,000,000.00
5,886.11
313378C33
Federal Home Loan Bank
03/07/12
03/07/17
1.240%
1,000,000.00
3,926.66
3133EAPB8
Federal Farm Credit Bank
05/02/12
05/02/17
1.230%
1,000,000.00
2,015.83
3136GOGX3
Federal National Mortgage Assn
05/30/12
08/24/16
1.000%
1,000,000.00
1,027.77
3135GOMA8
Federal National Mortgage Assn
06/28/12
06/28/17
1.200%
1,000,000.00
100.00
Totals
"Represents the LAIF daily rate at 6/30/12
3
$ 18,080,250.99 $ 33,227.45
COSTA MESA SANITARY DISTRICT
Summary of Policy Limitations
June 30, 2012
(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
Current %
of Market Value
Description
06/30/12
Maximum %
U.S. Treasury Bills
0.00%
Unlimited
U.S. Treasury Notes
0.00%
Unlimited
Federal Agency Issues:.
FICB
0.00%
Unlimited
FLB
0.00%
Unlimited
FHLB
5.53%
Unlimited
FHLMC
16.64%
Unlimited
FNMA
22.14%
Unlimited
FFCB
16.60%
Unlimited
Other
0.00%
Unlimited
Banker's Acceptances
0.00%
25%(1)
Certificates of Deposit
0.00%
25%
Negotiable Certificates of Deposits
0.00%
25%(1)
Commercial Paper
0.00%
25%(1)
Medium Term Corporate Notes
0.00%
20%(1)
LAIF (Local Agency Investment Fund)
33.15%
40,000,000
Shares of Benefical Interest
0.00%
20%
Money Market/Mutual Funds (Sweep Acct)
5.95%
10% per fund (2)
Total
100.00%
% of portfolio maturing under one year
39.16%
no less than 20%
% of portfolio, maturing over one year
60.84%
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
COSTA.MESA SANITARY DISTRICT
Schedule of Investments by Instrument Type
June 30,2012
— Represents the LAIF daily rate at 6/30/12
5
Purchase
Maturity
Coupon
Investment
%of
Market
%of
Description
Broker /Dealer
Date
Date
Rate
Cost
Portfolio
Value
Portfolio
Comments
State'Treasurer's Pool
LAIF
n/a
Continuous
0.350% "'
$ 6,004,250.96
$ 6,004,250.96
POOL
Total State Treasurer's Pool
6,004,250.96
33.21%
6,004,250.96
33.15%
Money Market Mutual Fund
Bank of New York
n/a
Continuous
0.000%
1,077,550.03
1,077,550.03
SWEEP
Total Money Market Mutual Fund
1,077,550.03
5.96%
1,077,550.03
5.95%
Federal Home Loan Bank
E.J. De La Rosa
03/07/12
03/07/17
1.240%
1,000,000.00
1,001,330.00
FHLB
Total Federal Home Loan Bank
1,000,000.00
5.53%
1,001,330.00
5.53%
Federal Home Loan Mortgage
Union Banc
08/23/11
05/23/16
1.540%
999,700.00
1,004,480.00
FHLMC
Federal Home Loan Mortgage
Union Banc
01/17/12
01/17/17
1.375%
998,750.00.
1,004,540.00
FHLMC
Federal Home Loan Mortgage
Union Banc
01/18/12
07/18/16
1.300%
1,000,000.00
1,004,070.00
FHLMC
Total Federal Home Loan Mortgage
2,998,450.00
16.58%
3,013,090.00
16.64%
Federal National Mortgage Association
E.J. De La Rosa
09/28/11
09/28/16
1.000%
1,000,000.00
1,001,310.00
FNMA
Federal National Mortgage Association
E.J. De La Rosa
10/26/11
10/26/16
1.500%
1,000,000.00
1,003,600.00
FNMA
Federal National Mortgage Association
Union Banc
05/30/12
08/24/16
1.000%
1,000,000.00
1,002,150.00
FNMA
Federal National Mortgage Association
Union Banc
06/28/12
06/28/17
1.200%
1,000,000.00
1,001,950.00
FNMA
Total Federal National Mortgage Association
4,000,000.00
22.12%
4,009,010.00
22.14%
Federal Farm Credit Bank
E.J. De La Rosa
11/23/11
11/23/16
1.500%
1,000,000.00
1,000,960.00
FFCB
Federal Farm Credit Bank
Union Banc
01/04/12
01/04/16
1.120%
1,000,000.00
1,003,250.00
FFCB
Federal Farm Credit Bank
E.J. De La Rosa
05/02/12
05/02/17
1.230%
1,000,000.00
1,001,920.00
FFCB
Total Federal Farm Credit Bank
3,000,000.00
16.59%
3,006,130.00
16.60%
Total Investments
$ 18,080,250.99
100.00%
$ 18,111,360.99
100.00%
— Represents the LAIF daily rate at 6/30/12
5
Broker /Dealer
Local Agency Investment Fund
Bank of New York
UnionBanc
E.J. De La Rosa
E.J. De La Rosa
E.J. De La Rosa
UnionBanc
UnionBanc
UnionBanc
E.J. De La Rosa
E.J. De La Rosa
UnionBanc
UnionBanc
Total Investment Portfolio
Total Portfolio
Weighted Avg Interest Rate
Weighted Avg Yield to Maturity
Weighted Avg Days to Maturity
COSTA MESA SANITARY DISTRICT
Investment Portfolio
June 30, 2012
Investment
Purchase
Maturity
Days to
Coupon
Yield to
Investment
Type
Date
Date
Maturity
Rate
Maturity
Cost
Pool
1
0.350% **
0.350%
$ 6,004,250.96
Sweep
1
0.000%
0.000%
1,077,550.03
FHLM
08/23/11
05/23/16
1,423
1.540%
1.540%
999,700.00
FNMA
09/28/11
09/28/16
1,551
1.000%
1.390%
1,000,000.00
FNMA
10/26/11
10/26/16
1,579
1.500%
1.500%
1,000,000.00
FFCB
11/23/11
11/23/16
1,607
1.500%
1.500%
1,000,000.00
FFCB
01/04/12
01/04/16
1,283
1.120%
1.120%
1,000,000.00
FHLM
01/17/12
01/17/17
1,662
1.375%
1_.401%
998,750.00
FHLM
01/18/12
07/18/16
1,479
1.300%
1.300%
1,000,000.00
FHLB
03/07/12
03/07/17
1,711
1.240%
1.240%
1,000,000.00
FFCB
05/02/12
05/02/17
1,767
1.230%
1.230%
1,000,000.00
FNMA
05/30/12
08/24/16
1,516
1.000%
1.000%
1,000,000.00
FNMA
06/28/12
06/28/17
1,824
1.200%
1.200%
1,000,000.00
"Represents the LAIF daily rate at 6/30/12
0.891 %
0.914%
963 Days
E.
2.64 Years
$ 18,080,250.99
Purchase Maturity Intuition
Date Date Broker /Dealer
n/a
n/a
08/23/11
09/28/11
10/26/11
11/23/11
01/04/12
01/17/12
01/18/12
03/07/12
05/02/12
05/30/17
06/28/12
Continuous
LAIF
Continuous
Bank of New York
05/23/11
UnionBanc
09/28/16
E.J. De La Rosa
10/26/16
E.J. De La Rosa
11/23/16
E.J. De La Rosa
01/04/16
UnionBanc
01/17/17
UnionBanc
07/18/16
UnionBanc
03/07/17
E.J. De La Rosa
05/02/17
E.J. be La Rosa .
08/24/16
UnionBanc
06/28/17
1,000,000.00
Total Investments
"Represents the LAIF daily rate at 6/30/12
COSTA MESA SANITARY DISTRICT
For all Maturities with Market Values
June 30, 2012
Investment
Type
Par
POOL $
61004,250.96
SWEEP
1,077,550.03
FHLM
1,000,000.00
FNMA
1,000,000.00
FNMA
1,000,000.00
FFCB
1,000,000.00
FFCB
1,000,000.00
FHLM
1,000,000.00
FHLM
1,000,000.00
FHLB
1,000,000.00
FFCB
1,000,000.00
FNMA
1,000,000.00
FNMA
1,000,000.00
$ 18,081,800.99
7
Coupon
Investment
Rate
Cost
0.350% ''
6,004,250.96
0.000%
1,077,550.03
2.000%
999,700.00
1.000%
1,000,000.00
1.500%
1,000,000.00
1.500%
1,000,000.00
1.120%
1,000,000.00
1.375%
998,750.00
1.300%
1,000,000.00
1.240%
1,000,000.00
1.230%
1,000,000.00
1.000%
1,000,000.00
1.200%
1,000,000.00
18,080,250.99 18,111,360.99 33,227.45 31,110.00
Net
Market
Accrued
Gain /(Loss)
Value
Interest
If Sold
6,004,250.96
-
-
1,077,550.03
-
-
1,004,480.00
1,625.55
4,780.00
1,001,310.00
2,583.33
1,310.00 .
1,003,600.00
2,708.33
3,600.00
1.,000,960.00
1,583.33
960.00
1,003,250.00
5,506.66
3,250.00
1,004,540.00
6,263.88
5,790.00
1,004,070.00
5,886.11
4,070.00
1,001,330.00
3,926.66
1,330.00
1,001,920.00
2,015.83
1,920.00
1,002,150.00
1,027.77
2,150.00
1,001,950.00
100.00
1,950.00
18,080,250.99 18,111,360.99 33,227.45 31,110.00
COSTA MESA SANITARY DISTRICT
Call Schedule
June 30, 2012
Type of
Purchase
Maturity
Coupon
1,000,000.00
Investment
Date
Date
Rate
Par Value
FHLMC
08/23/11
05/23/11
1.540%
$ 1,000,000.00
FNMA
09/28/11
09/28/16
1.000%
1,000,000.00
FNMA
10/26/11
10/26/16
1.500%
1,000,000.00
FFCB
11/23/11
11/23/11
1.500%
1,000,000.00
FFCB
01/04/12
01/04/16
1.120%
1,000,000.00
FHLMC
01/17/12
01/17/17
1.375%
1,000,000.00
FHLMC
01/18/12
07/18/16
1.300%
1,000,000.00
FHLB
03/07/12
03/07/17
1.240%
'1,000,000.00
FFCB
05/02/12
05/02/17
1.230%
1,000,000.00
FNMA
05/30/12
08/24/16
1.000%
1,000,000.00
FNMA
06/28/12
06/28/17
1.200%
1,000,000.00
Totals
$ 11,000,000.00
Investment
Cost
Call Features
$ 999,700.00
Callable 11/23/12 w/5 days notice
1,000,000.00
Callable 9/28/12 w /10 days notice, thereafter 9,12,3,6
1,000,000.00
Callable 10/26/12 w /10 days notice.
1,000,000.00
Callable 11/23/12 w/5 days notice and anytime after
1,000,000.00
Callable 1/4/13 w/5 days notice and anytime after
998,750.00
Callable 1/17/13 w/5 days notice, thereafter 4,7,10,1
1,000,000.00
Callable 1/18/13 w/5 days notice, thereafter 4,7,10,1
1,000,000.00
Callable 3/7/13 w/5 days notice thereafter 3,6,9,12
1,000,000.00
Callable 5/2/13 w/5 days notice and anytime after
1,000,000.00
Callable 5/30/13 w /10 days notice,. thereafter 8,11,2,5
1,000,000.00
Callable 6/28/13 w /10 days notice, monthly thereafter
$ 10,998,450.00
1:1
I
COSTA MESA SANITARY DISTRICT
MATURITIES DISTRIBUTION
June 30, 2012
70%
--------------------------- - - - -
-- -----------------------
Cost
60%
-------------------------- - - ----
----------------- - - - - --
In Thousands
49.77%
--------------------------- - - ----
----------------- - - - - -- 1 - 180 Days
$ 7,081
50%
181 - 365 Days
-
--------- sg- r6• �5-------------------------------
- - - - -- --
40
1 - 2 Years
-
30%
-- -------------------- - - ----
--------- - - - - -- --
2 - 3 Years
-
-- -------------------- - - ---- ---------- - - - - -- - 3 - 4 Years
2,000
20%
11.06%
-- ------------------- - - - ---
4 - 5 Years
- - - - -- - - - --
8,999
10%
° o.00 °% °
o.00 /°
0.00% TOTAL
$ 18,080
0
0%
1 -180 181 -365 1-2
2 -3 3 -4 4 -5
Days Days Years
Years Years Years
I
1.80%
1.60%
1.40%
1.20%
1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
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Costa Mesa Sanitary District
Portfolio Interest Rate Information
as of June 30, 2012
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\,yo \�o \,yo \,yo \,yo \,yo \,yo \,yo \,yo \yo \,yo \T \,yo \,yo 60
10 b\T
10
—3 month T -Bill
^^^ --^6 month T -Bill
2 year T -Note
i3 year T -Note
—5 year T -Note
-m—CMSD- monthly
—LAIF- monthly
HOC Pool - monthly