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01-21-2020 - AGENDA ITEM 02 INVESTMENT REPORT FOR THE MONTH ENDED NOVEMBER 30, 201911/16/2020 Print Staff Report AGENDA ITEM NO. 2 DATE: January 21, 2020 TO: Mayor and City Council FROM: David Carmany City Manager AGENDA STAFF REPORT City of West Covina I Office of the City Manager SUBJECT: INVESTMENT REPORT FOR THE MONTH ENDED NOVEMBER 30, 2019. RECOMMENDATION: It is recommended that the City Council receive and file the Investment Report for the month ended November 30, 2019. BACKGROUND: California Government Code Section 53646 requires that cities report detailed information on all securities, investments, and monies of the City and to report the market value of the investments held. California Government Code Section 53601 and the City's Investment Policy define the types of investments allowed. The City's Investment Policy was last revised and adopted by the City Council on July 2, 2019. The City's Investment Policy has set primary goals of the portfolio management of safety, liquidity and yield. Bond reserves are held and invested by a Trustee. The investment of these funds is governed by an investment policy approved by the City Council as a part of the governing documents for each specific bond issue. DISCUSSION: The Investment Report (Attachment No. 1) presents the City's and the Successor Agency's cash and investments for the month ended November 30, 2019. This report is in compliance with California Government Code Section 53646 regarding the reporting of detailed information on all securities, investments, and monies of the City, as well as, reporting of the market value of the investments held. All the investments contained within the portfolio are in full compliance with Government Code Section 53601 and the City's Investment Policy as to the types of investments allowed. The City's Investment Policy was last revised and adopted by City Council on July 2, 2019. As stated in the attached report, there are sufficient funds to meet the budgeted expenditures over the next six months. The City's Investment Policy has set primary goals of the portfolio management of safety, liquidity and yield. The City's surplus funds are deposited with the Los Angeles County Investment Pool (LACIP), the Local Agency Investment Fund (LAIF) and Chandler Asset Management (Attachment No. 2). At November 30, 2019, the investment portfolio had a market value of $53,799,179. Bond reserves are held and invested by a Trustee. The investment of these funds is governed by an investment https://destinyhosted.com/print_ag_memo.cfm?seq=629&rev_num=0&mode=Extemal&reloaded=true&id=93762 1/2 City of West Covina Short Term Transaction Ledger OR Account #10479 As of November 30, 2019 Transaction Type ACQUISITIONS Settlement Date CUSIP Quantity Security Description Price Acq/Disp Yield Amount Interest Pur/sold Total Amount Gain/Loss Purchase 11/01/2019 31846V203 600.84 First American Govt Obligation Fund 1.000 1.44% 600.84 0.00 600.84 0.00 Class Y Purchase 11/06/2019 31846V203 2,187.50 First American Govt Obligation Fund 1.000 1.44% 2,187.50 0.00 2,187.50 0.00 Class Y Purchase 11/15/2019 31846V203 5,418.51 First American Govt Obligation Fund 1.000 1.44% 5,418.51 0.00 5,418.51 0.00 Class Y Purchase 11/15/2019 31846V203 2,462.00 First American Govt Obligation Fund 1.000 1.44% 2,462.00 0.00 2,462.00 0.00 Class Y Purchase 11/15/2019 31846V203 141.00 First American Govt Obligation Fund 1.000 1.44% 141.00 0.00 141.00 0.00 Class Y Purchase 11/15/2019 31846V203 5,249.92 First American Govt Obligation Fund 1.000 1.44% 5,249.92 0.00 5,249.92 0.00 Class Y Purchase 11/15/2019 31846V203 12,342.46 First American Govt Obligation Fund 1.000 1.44% 12,342.46 0.00 12,342.46 0.00 Class Y Purchase 11/18/2019 31846V203 11,803.97 First American Govt Obligation Fund 1.000 1.44% 11,803.97 0.00 11,803.97 0.00 Class Y Purchase 11/25/2019 31846V203 442.90 First American Govt Obligation Fund 1.000 1.44% 442.90 0.00 442.90 0.00 Class Y Purchase 11/30/2019 31846V203 5,203.13 First American Govt Obligation Fund 1.000 1.26% 5,203.13 0.00 5,203.13 0.00 Class Y Subtotal 45,852.23 45,852.23 0.00 45,852.23 0.00 TOTAL ACQUISITIONS 45,852.23 45,852.23 0.00 45,852.23 0.00 DISPOSITIONS a& Paydown 11/15/2019 43811BAC8 5,341.23 Honda Auto Receivables Trust 2017-2 100.000 5,341.23 77.28 5,418.51 0.00 A3 1.68% Due 8/16/2021 Paydown 11/15/2019 47788BAD6 2,430.61 John Deere Owner Trust 2017-B A3 100.000 2,430.61 31.39 2,462.00 0.00 1.82% Due 10/15/2021 Paydown 11/15/2019 47788CAB8 140.72 John Deere Owner Trust 2018-A A2 100.000 140.72 0.28 141.00 0.00 2.42% Due 10/15/2020 Chandler Asset Management - CONFIDENTIAL Paee 6 Execution Time: 1213/201911:10:50 AM City of West Covina Short Term Transaction Ledger Account #10479 As of November 30, 2019 OR Transaction Settlement CUSIP Quantity Security Description Price Acq/Disp Interest Type Date Yield Amount Pur/sold Total Amount Gain/Loss DISPOSITIONS Paydown 11/15/2019 47788CAC6 5,139.09 John Deere Owner Trust 2018-A A3 100.000 5,139.09 110.83 5,249.92 0.00 2.66% Due 4/18/2022 Paydown 11/15/2019 89238BAB8 12,318.84 Toyota Auto Receivables Trust 2018-A 100.000 12,318.84 23.62 12,342.46 0.00 A2A 2.1% Due 10/15/2020 Paydown 11/18/2019 43814WAB1 11,357.09 Honda Auto Receivables Trust 2019-1 100.000 11,357.09 446.88 11,803.97 0.00 A2 2.75% Due 9/20/2021 Paydown 11/25/2019 3137BFDQ1 69.02 FHLMC K717 A2 100.000 69.02 373.88 442.90 0.00 2.991% Due 9/25/2021 Subtotal 36,796.60 36,796.60 1,064.16 37,860.76 0.00 Security 11/06/2019 31846V203 418.11 First American Govt Obligation Fund 1.000 418.11 0.00 418.11 0.00 Withdrawal Class Y Security 11/25/2019 31846V203 43.21 First American Govt Obligation Fund 1.000 43.21 0.00 43.21 0.00 Withdrawal Class Y Subtotal 461.32 461.32 0.00 461.32 0.00 TOTAL DISPOSITIONS 37,257.92 37,257.92 1,064.16 38,322.08 0.00 OTHER TRANSACTIONS Interest 11/06/2019 3135GOK69 350,000.00 FNMA Note 0.000 2,187.50 0.00 2,187.50 0.00 1.25% Due 5/6/2021 Interest 11/30/2019 3135GOF73 350,000.00 FNMA Note 0.000 2,625.00 0.00 2,625.00 0.00 1.5% Due 11/30/2020 Interest 11/30/2019 912828VF4 375,000.00 US Treasury Note 0.000 2,578.13 0.00 2,578.13 0.00 1.375% Due 5/31/2020 Subtotal 1,075,000.00 7,390.63 0.00 7,390.63 0.00 Chandler Asset Management - CONFIDENTIAL Page 7 Execution Time: 1213/201911:10:50 AM City of West Covina Short Term Transaction Ledger Account #10479 As of November 30, 2019 OR OTHER TRANSACTIONS ML Dividend 11/01/2019 31846V203 3,998.41 First American Govt Obligation Fund 0.000 600.84 0.00 600.84 0.00 Class Y Subtotal 3,998.41 600.84 0.00 600.84 0.00 TOTAL OTHER TRANSACTIONS 1,078,998.41 7,991.47 0.00 7,991.47 0.00 Chandler Asset Management - CONFIDENTIAL Page 8 Execution Time: 1213/201911:10:50 AM 11/16/2020 Print Staff Report policy approved by the City Council as a part of the governing documents for each specific bond issue. At November 30, 2019, the bond reserves had a market value of $6,838,352. Prepared by: Robbeyn Bird, CPA, Interim Finance Director Additional David Carmany, City Manager Approval: Attachments Attachment No. 1 - Investment Report November 30, 2019 Attachment No. 2 - Chandler Report - November 2019 CITY Achieve Fiscal Sustainability and Financial Stability COUNCIL GOALS & OBJECTIVES: https://destinyhosted.com/print_ag_memo.cfm?seq=629&rev_num=0&mode=Extemal&reloaded=true&id=93762 2/2 ATTACHMENT NO. 1 City of West Covina Investment Report For the Month Ended November 30, 2019 Interest/ Yield to Maturity %of Description Book Value Market Value Maturity Date Portfolio Cash and Cash Equivalents Wells Fargo Checking Account $ 8,081,480 $ 8,081,480 0.00% n/a 13.33% Pacific Western Bank Checking - HPP (CDBG) 3,592 3,592 0.00% n/a 0.01 % Pacific Western Bank Checking - HPP (LMIHF) 30,687 30,687 0.00% n/a 0.05% Los Angeles County Investment Pool (LACIP) 18,610,167 18,610,167 1.98% n/a 30.69% Los Angeles County Investment Pool (LACIP) - CFD 887,882 887,882 1.98% n/a 1.46% Local Agency Investment Fund (LAIF) 19,749,332 19,749,332 2.10% n/a 32.57% Wells Fargo Checking Account -CFD 1,243,492 1,243,492 0.00% n/a 2.05% Investments - Chandler Asset Management Asset -Backed Securities 297,397 298,696 1.93% See attached 0.49 % Federal Agencies 2,454,313 2,445,473 1.66% See attached 4.03% Collateralized Mortgage Obligation 151,320 151,885 2.24 % See attached 0.25% Money Market Funds 49,389 49,389 1.26% See attached 0.08% US Treasury 2,252,972 2,247,104 1.69% See attached 3.71% Total Cash and Investments $ 53,812,023 $ 53,799,179 Bond Reserves Lease Revenue Bonds, 2006 Series A & 2006 Sedes B (Taxable) First American Treasury Obligations Fund Class D $ 1,071,000 $ 1,071,000 1.39% n/a 1.77% First American Treasury Obligations Fund Class D 585,372 585,372 1.39% n/a 0.97% 1996 Special Tax Refunding Bonds - Successor Agency First American Treasury Obligations Fund Class D 5,002,869 5,002,869 7.01 % 9/12022 8.25% First American Treasury Obligations Fund Class D 179,111 179,111 1.39% n/a 0.30% Total Bond Reserves $ 6,838,352 $ 6,838,352 Total Investment Portfolio $ 60,650,375 $ 60,637,531 100.00% Blended Yleld of Cash and Investments • 2.00% Benchmarks: LAIF 2.10% LACIP1.98% 6mo U.S. Treasury 1.63% 2yr U.S. Treasury 1.61% Sp' U.S. Treasury 1.62 % • To ensure timely submission of the Investment Report, the prior month's LACIP percentage yield is used I hereby certify that the investments are in compliance with the investment policy adopted by the City Council. The investment portfolio provides sufficient funds to meet the budgeted expenditures over the next six months. This report meets the requirements of Government Code Section 53646. PREPARED BY: RE ED BY: AA r. Robbeyn�terirn Finance Director Colleen B. Rozatti - City Tr suWr APPROVED BY David Cam any - Cily Manager ATTACHMENT NO.2 C11% City of West Covina Short Term - Account #10479 MONTHLY ACCOUNT STATEMENT NOVEMBER 1, 2019 THROUGH NOVEMBER 30, 2019 Chandler Team: For questions about your account, please call (800) 317-4747, or contact operations@chandlerasset.com Custodian US Bank Christopher Isles (503)464-3685 CHANDLER ASSET MANAGEMENT chandlerasset.com Information contained herein is confidential. We urge you to compare this statement to the one you receive from your qualified custodian. Please see Important Disclosures. City of West Covina Short Term Account #10479 PORTFOLIO CHARACTERISTICS Average Modified Duration 0.57 Average Coupon 1.55% Average Purchase YTM 1.21% Average Market YTM 1.70% Average S&P/Moody Rating AA+/Aaa Average Final Maturity 0.67 yrs Average Life 0.58 yrs SECTOR ALLOCATION Agency 47.1% us 1—— 43.3% ABS, 5.7% cmo' 2.9% Money Mkt Fdl Q,9% PERFORMANCE REVIEW Portfolio Summary As of November 30, 2019 ACCOUNT SUMMARY TOP ISSUERS Beg. Values End Values Government of United States as of 10/31/19 as of 11/30/19 Federal National Mortgage Assoc Market Value 5,185,200 5,192,547 Federal Home Loan Mortgage Corp Accrued Interest 22,112 20279 Total Market Value 5,207,312 5,212,826 Federal Home Loan Bank Income Earned 6,145 5,847 Honda ABS Cont/WD -461 John Deere ABS Par 5,188,535 5,197,130 First American Govt Oblig Fund Book Value 5,198,172 5,205,392 Toyota ABS Cost Value 5,253,412 5,262,090 Total MATURITY DISTRIBUTION 0-.25 .25-.5 .5-1 1-2 2-3 3-4 4-5 5+ Maturity (Yrs) CREDIT QUALITY (S&P) AA (90.4%) OR 43.3% 33.6% 9.7 % 6.7 % 4.5 % 1.2% 0.9% 0.0 % 100.0% (4.1%) 5.5%) Annualized TOTAL RATE OF RETURN 1M _qF 3M YTD 1YR 2YRS 3YRS 5YRS 10YRS 7/31/2016 City of West Covina Short Term 0.11% 0.56% 3.21% 3.92% 2.48% 1.97% N/A N/A 1.63% ICE BAML 1-3 Yr US Treasury/Agency Index -0.03% 0.19% 3.33% 4.14% 2.47% 1.79% N/A N/A 1.46% Chandler Asset Management -CONFIDENTIAL Page 1 Execution Time: 1213/201911:10:50 AM Category Treasury Issues Federal Agencies Municipal Securities Supranationals Medium Term Notes Collateralized Certificates of Deposit Negotiable Certificates of Deposit Banker's Acceptances Commercial Paper Asset -Backed Securities/ Mortgage - Backed Securities Money Market Mutual Funds Prohibited Securities Repurchase Agreements Local Agency Investment Fund (LAIF) Los Angeles County Investment Pool Max per Security Type Max per Issuer Maximum Maturity Statement of Compliance As of November 30, 2019 City of West Covina CA Assets managed by Chandler Asset Management are in full compliance with state law and the District's investment policy. Standard Comment No limitations Complies No limitations Complies "A" or higher by a NRSRO; 30% maximum; 5% max per issuer Complies "AA" rated or higher by a NRSRO; 30% max; 10% max per issuer; Unsubordinated obligations issued by: IBRD, IFC, IADB Complies "A" rated or higher by a NRSRO; 30% maximum; 5% max per issuer; Issued by corporations organized and operating within Complies the U.S. 25% maximum Complies "A" rated or better by a NR5RC; 30% maximum Complies 40% maximum; 30% max per one commercial bank; 180 days max maturity Complies A-10-1 rating or higher by both 5&P and Moody's; 25% maximum; 5% per issuer; 270 days max maturity; Eligible paper is limited to corporations organized and operating within the U.S. with total assets of at least $500 million Complies "AA" or better by a NR5RC; "A" rated issuer rating or higher by a NRSRO; 20% maximum Complies "AAA" rated or highest rating by a NRSRO; 20% maximum; 10% per fund Complies Inverse floaters; Ranges notes, Interest -only strips from mortgaged backed securities; Zero interest accrual securities; Complies Reverse Repurchase Agreements 20% maximum; 100 days max maturity; collateralized 102%of market value; Not used by investment adviser Complies Maximum program; Not used by investment adviser Complies Maximum program; Not used by investment adviser Complies No more than 40%of the City's total portfolio shall be invested in a single security type or with a single financial institution Complies No more than 5% in any single issuer except US Gov, Agencies, Supranationals, Money Market Funds, LAIF, or LGIP Complies 5 years Complies City of West Covina Short Term Reconciliation Summary Account #10479 As of November 30, 2019 BEGINNING BOOK VALUE Acquisition +Security Purchases $0.00 + Money Market Fund Purchases $45,852.23 + Money Market Contributions $0.00 +Security Contributions $0.00 + Security Transfers $0.00 Total Acquisitions Dispositions Security Sales - Money Market Fund Sales - MMF Withdrawals - Security Withdrawals - Security Transfers - Other Dispositions - Maturites Calls - Principal Paydowns Total Dispositions Amortization/Accretion +/- Net Accretion $0.00 $0.00 $461.32 $0.00 $0.00 $0.00 $0.00 $0.00 $36,796.60 ($1,375.07) $5,198,172.26 BEGINNING BALANCE Acquisition Contributions Security Sale Proceeds Accrued Interest Received Interest Received Dividend Received $45,852.23 Principal on Maturities Interest on Maturities Calls/Redemption (Principal) Interest from Calls/Redemption Principal Paydown Total Acquisitions $8,454. $36, $3,998.41 Dispositions Withdrawals $461.32 Security Purchase $0.00 Accrued Interest Paid $0.00 Total Dispositions $461.32 $37,257.92 ENDING BOOK VALUE ($1,375.07) Gain/Loss on Dispositions +/- Realized Gain/Loss $0.00 $0.00 ENDING BOOK VALUE $5,205,391.50 $49,389.32 Chandler Asset Management - CONFIDENTIAL Page 3 Execution Time: 1213/201911:10:50 AM City of West Covina Short Term Holdings Report Account #10479 As of November 30, 2019 ABS Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTIVI Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity DurationCUSIP 89238BAB8 Toyota Auto Receivables Trust 2018-A 1,178.02 01/23/2018 1,177.90 100.00 1,178.07 0.02% Aaa/AAA 0.88 A2A 2.12% 1,177.98 2.40% 1.10 0.09 NR 0.03 2.1% Due 10/15/2020 43811BAC8 Honda Auto Receivables Trust 2017-2 49,859.09 04/27/2018 49,083.94 99.89 49,806.69 0.96% Aaa / AAA 1.71 A3 2.62% 49,457.35 1.93% 37.23 349.34 NR 0.44 1.68% Due 8/16/2021 43814WAB1 Honda Auto Receivables Trust 2019-1 183,642.91 02/19/2019 183,631.08 100.43 184,436.56 3.54% NR/AAA 1.81 A2 2.77% 183,634.58 1.89% 182.37 801.98 AAA 0.49 2.75% Due 9/20/2021 47788BAD6 John Deere Owner Trust 2017-B A3 18,268.53 07/11/2017 18,267.20 99.91 18,251.99 0.35% Aaa / NR 1.88 1.82%Due 10/15/2021 1.83% 18,267.94 2.08% 14.78 (15.95) AAA 0.36 47788CAC6 John Deere Owner Trust 2018-A A3 44,860.91 02/21/2018 44,857.69 100.36 45,022.26 0.86% Aaa / NR 2.38 2.66% Due 4/18/2022 2.68% 44,859.06 2.04% 53.04 163.20 AAA 0.56 297,017.81 298,695.57 5.74% Aaa / AAA 1.88 Total ABS 297,809.46 2.67% 297,396.91 1.93% 288.52 1,298.66 AAA 0.48 AM ■ 3137EAEE5 FHLMC Note 350,000.00 01/12/2017 349,622.00 99.98 349,931.05 6.75% Aaa /AA+ 0.13 1.5% Due 1/17/2020 1.54% 349,983.78 1.64% 1,954.17 (52.73) AAA 0.13 3135GOA78 FNMA Note 350,000.00 10/14/2016 355,204.50 100.00 349,995.45 6.75% Aaa /AA+ 0.14 1.625% Due 1/21/2020 1.16% 350,222.86 1.62% 2,053.82 (227.41) AAA 0.14 3135GOD75 FNMA Note 700,000.00 07/29/2016 712,474.00 99.90 699,325.20 13.50% Aaa /AA+ 0.56 1.5% Due 6/22/2020 1.03% 701,787.00 1.67% 4,637.50 (2,461.80) AAA 0.55 3135GOF73 FNMA Note 350,000.00 07/29/2016 355,939.50 99.82 349,373.15 6.70% Aaa /AA+ 1.00 1.5% Due 11/30/2020 1.10% 351,367.77 1.68% 14.58 (1,994.62) AAA 0.99 313OA7CV5 FHLB Note 350,000.00 07/29/2016 353,846.50 99.65 348,767.30 6.72% Aaa / AA- 1.22 1.375% Due 2/18/2021 1.13% 351,028.04 1.67% 1,376.91 (2,260.74) AAA 1.20 3135GOK69 FNMA Note 350,000.00 07/22/2016 349,744.50 99.45 348,081.30 6.68% Aaa /AA+ 1.43 1.25%Due 5/6/2021 1.27% 349,923.57 1.64% 303.82 (1,842.27) AAA 1.41 2,476,831.00 2,445,473.45 47.11% Aaa / AA+ 0.72 Total Agency 2,450,000.00 1.18% 2,454,313.02 1.66% 10,340.80 (8,839.57) AAA 0.71 Chandler Asset Management - CONFIDENTIAL Page 4 Execution Time: 1213/201911:10:50 AM City of West Covina Short Term Holdings Report Account #10479 As of November 30, 2019 CLISIP Security Description CIVIC, Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 3137BFDQ1 FHLMC K717 A2 149,930.98 01/04/2018 152,765.62 101.30 151,884.88 2.92% NR/NR 1.82 2.991% Due 9/25/2021 2.37% 151,320.06 2.24% 373.70 564.82 AAA 1.57 152,765.62 151,884.88 2.92% NR/NR 1.82 Total CMO 149,930.98 2.37% 151,320.06 2.24% 373.70 564.82 AAA 1.57 MONEY MARKET FUND FI 31846V203 First American Govt Obligation Fund 49,389.32 Various 49,389.32 1.00 49,389.32 0.95% Aaa / AAA 0.00 Class Y 1.26% 49,389.32 1.26% 0.00 0.00 AAA 0.00 49,389.32 49,389.32 0.95% Aaa/AAA 0.00 Total Money Market Fund FI 49,389.32 1.26% 49,389.32 1.26% 0.00 0.00 AAA 0.00 US TREASURY 91282SG95 US Treasury Note 750,000.00 07/25/2016 766,848.22 99.99 749,925.00 14.48% Aaa /AA+ 0.08 1.625% Due 12/31/2019 0.96% 750,403.38 1.73% 5,100.20 (478.38) AAA 0.08 912828UL2 US Treasury Note 375,000.00 08/05/2016 380,992.47 99.95 374,815.50 7.22% Aaa /AA+ 0.17 1.375% Due 1/31/2020 0.91% 375,287.60 1.66% 1,723.42 (472.10) AAA 0.17 91282SUVO US Treasury Note 375,000.00 08/05/2016 377,799.11 99.82 374,326.13 7.19% Aaa /AA+ 0.33 1.125%Due 3/31/2020 0.92% 375,254.46 1.66% 714.65 (928.33) AAA 0.33 912828VF4 US Treasury Note 375,000.00 08/05/2016 380,391.88 99.85 374,443.50 7.18% Aaa /AA+ 0.50 1.375% Due 5/31/2020 0.99% 375,704.97 1.67% 14.09 (1,261.47) AAA 0.50 912828N89 US Treasury Note 375,000.00 08/11/2016 380,054.97 99.63 373,593.75 7.20% Aaa /AA+ 1.17 1.375% Due 1/31/2021 1.07% 376,321.78 1.70% 1,723.42 (2,728.03) AAA 1.15 2,286,086.65 2,247,103.88 43.29% Aaa / AA+ 0.39 Total US Treasury 2,250,000.00 0.97% 2,252,972.19 1.69% 9,275.78 (5,868.31) AAA 0.38 5,262,090.40 5,192,547.10 100.00% Aaa / AA+ 0.67 TOTAL PORTFOLIO 5,197,129.76 1.21% 5,205,391.50 1.70% 20,278.80 (12,844.40) AAA 0.57 TOTAL MARKET VALUE PLUS ACCRUED 5,212,825.90 Chandler Asset Management - CONFIDENTIAL Page 5 Execution Time: 1213/201911:10:50 AM