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07-07-2020 - AGENDA ITEM 02 CONSIDERATION OF INVESTMENT REPORT FOR THE MONTH ENDED APRIL 30, 2020AGENDA ITEM NO. 2 AGENDA STAFF REPORT City of West Covina I Office of the City Manager DATE: July 7, 2020 TO: Mayor and City Council FROM: David Carmany City Manager SUBJECT: CONSIDERATION OF INVESTMENT REPORT FOR THE MONTH ENDED APRIL 30, 2020 RECOMMENDATION: It is recommended that the City Council receive and file the Investment Report for the month ended April 30, 2020. 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 April 30, 2020. 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 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 April 30, 2020, the investment portfolio had a market value of $77,674,736 and the bond reserves had a market value of $6,659,060. Prepared by: Robbeyn Bird, Finance Director Additional David Carmany, City Manager https://destinyhosted.com/print_ag_memo.Gfm?seq=839&rev_num=0&mode=Extemal&reloaded=true&id=93782 1/2 City of West Covina Short Term Transaction Ledger Account #10479 As of April30, 2020 OR Transaction Settlement CUSIP Quantity Security Description Price Acq/Disp Interest Type Date Yield Amount Pur/sold Total Amount Gain/Loss DISPOSITIONS Paydown 04/15/2020 43811BAC8 4,229.55 Honda Auto Receivables Trust 2017-2 100.000 4,229.55 43.04 4,272.59 0.00 A3 1.68% Due 8/16/2021 Paydown 04/15/2020 47788BAD6 2,012.52 John Deere Owner Trust 2017-B A3 100.000 2,012.52 14.46 2,026.98 0.00 1.82% Due 10/15/2021 Paydown 04/15/2020 47788CAC6 2,914.54 John Deere Owner Trust 2018-A A3 100.000 2,914.54 68.80 2,983.34 0.00 2.66% Due 4/18/2022 Paydown 04/20/2020 43814WAB1 15,458.15 Honda Auto Receivables Trust 2019-1 100.000 15,458.15 277.84 15,735.99 0.00 A2 2.75% Due 9/20/2021 Paydown 04/27/2020 3137BFDQ1 205.48 FHLMC K717 A2 100.000 205.48 371.57 577.05 0.00 2.991% Due 9/25/2021 Subtotal 24,820.24 24,820.24 775.71 25,595.95 0.00 Security 04/03/2020 31846V203 248.10 First American Govt Obligation Fund 1.000 248.10 0.00 248.10 0.00 Withdrawal Class Y Security 04/22/2020 31846V203 2,980,000.00 First American Govt Obligation Fund 1.000 2,980,000.00 0.00 2,980,000.00 0.00 Withdrawal Class Y Security 04/27/2020 31846V203 41.67 First American Govt Obligation Fund 1.000 41.67 0.00 41.67 0.00 Withdrawal Class Y Subtotal 2,980,289.77 2,980,289.77 0.00 2,980,289.77 0.00 TOTAL DISPOSITIONS 5,505,110.01 5,520,284.15 12,409.72 5,532,693.87 12,135.51 OTHER TRANSACTIONS Dividend 04/01/2020 31846V203 445,522.74 First American Govt Obligation Fund 0.000 24.22 0.00 24.22 0.00 Class Y Subtotal 445,522.74 24.22 0.00 24.22 0.00 TOTAL OTHER TRANSACTIONS 445,522.74 24.22 0.00 24.22 0.00 Chandler Asset Management- CONFIDENTIAL Page 6 Execution Time: 5/2/202012:23:35 PM 11/24/2020 Approval: Print Staff Report Attachments Attachment No. 1 - Investment Report April 2020 Attachment No. 2 - Chandler Report April 2020 CITY Achieve Fiscal Sustainability and Financial Stability COUNCIL Enhance the City Image and Effectiveness GOALS & OBJECTIVES: https://destinyhosted.com/print_ag_memo.Gfm?seq=839&rev_num=0&mode=6demal&reloaded=true&id=93782 2/2 ATTACHMENT NO. 1 City of West Covina Investment Report For the Month Ended April 30, 2020 Interest Yield to Maturity % of Description Book Value Market Value Maturity Date Portfolio Cash and Cash Equivalents Wells Fargo Checking Account $ 4,157,625 $ 4,157,625 0.00% n/a 4.93% Pacific Western Bank Checking - HPP (CDBG) 3,642 3,642 0.00% We 0.00% Pacific Western Bank Checking-HPP(LMIHF) 2,092 2,092 0.00% n1a 0.00% Los Angeles County Investment Pool (LACIP) 11,282,377 11,282,377 1.40% n/a 13.38% Los Angeles County Investment Pool (LACIP) - CFD 1,895,859 1,895,859 1.40% n/a 2.25% Local Agency Investment Fund (LAIF) 55,776,254 55,776,254 1.65 % n/a 66.14% Wells Fargo Checking Account- Successor Agency 3,354,185 3,354,185 0.00% n/a 3.98% Wells Fargo Checking Account -CFD 863,378 863,378 0.00% n/a 1.02% Investments - Chandler Asset Management Asset -Backed Securities 167,771 168,763 0.99% See attached 0.20% Federal Agencies - - 0.00% See attached 0.00% Collateralized Mortgage Obligation 149,935 152,900 1.60 % See attached 0.18% Money Market Funds 17,661 17,661 0.01% See attached 0.02% US Treasury 0.00% See attached 0.00% Total Cash and Investments $ 77,670,779 $ 77,674,736 Bond Reserves Lease Revenue Bonds, 2006 Series A & 2006 Series B (Taxable) FirstAmerican Treasury Obligations Fund Class D $ 1,071,000 $ 1,071,000 1.39% n/a 1.27% First American Treasury Obligations Fund Class D 585,372 585,372 1.39% n/a 0.69% 1996 Special Tax Refunding Bonds - Sumessor Agency FirstAmerican Treasury Obligations Fund Class D 5,002,688 5,002,688 7.01 % 9/l/2022 5.93% FirstAmerican Treasury Obligations Fund Class D 1.39% n/a 0.00% Total Bond Reserves $ 6,659,060 $ 6,659,060 Total Investment Portfolio $ 84,329,839 $ 84,333,796 100.00% Blended Yield of Cash and investments • 1.60% Benchmarks: LAIF 1.65% LACIP 1.40% 6ma U.S. Treasury 0.11 % 2yr U.S. Treasury 0.20 % Syr U.S. Treasury 0.36% I hereby certify that the investments are in compliance vWth the investment policy adopted by the City Council. PREPARED BY: REVIEWED BY: Robbeyn Bird - F ance Director Colleen B. Rozatti - City Treasurer APPROVED BY: David Carmany -C' Manager ATTACHMENT NO.2 C11% City of West Covina Short Term - Account #10479 MONTHLY ACCOUNT STATEMENT APRIL 1, 2020 THROUGH APRIL 30, 2020 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 Portfolio Summary OR Account #10479 As of April30, 2020 PORTFOLIO CHARACTERISTICS ACCOUNT SUMMARY TOP ISSUERS Average Modified Duration 0.69 Beg. Values End Values Federal Home Loan Mortgage Corp 45.1% as of 3/31/20 as of 4/30/20 Honda ABS 39.2% Average Coupon 2.60% Market Value 3,305,364 339,325 Average Purchase YTM 2.40% Accrued Interest 10145 , 535 John Deere ABS First American Govt Oblig Fund 10.6% 5.2% Total Market Value 3,315,509 339,860 Average Market YTM 1.22% Income Earned 3,622 2,344 Total 100.0% Average S&P/Moody Rating AAA/Aaa Cont/WD -2,980,290 Average Final Maturity 1.37 yrs Par 3,287,152 334,470 Book Value 3,291,567 335,367 Average Life 0.71 yrs Cost Value 3,321,933 336,863 SECTOR ALLOCATION MATURITY DISTRIBUTION CREDIT QUALITY (S&P) 49.7% cmo 45.1% Mo v k, ra 5.2% PERFORMANCE REVIEW 0-.25 .25-.5 .5-1 1-2 2-3 3-4 4-5 5. Maturity (Yrs) (44.3%) Annualized TOTAL RATE OF RETURN 1M 911111111, 3M YTD 1YR 2YRS 3YRS 5YR5 10YRS 7/31/2016 City of West Covina Short Term 0.42% 1.26% 1.41% 3.58% 3.32% 2.30% N/A N/A 1.88% ICE BAML 1-3 Yr US Treasury/Agency Index 0.05% 2.28% 2.83% 5.23% 4.15% 2.67% N/A N/A 2.11% Chandler Asset Management- CONFIDENTIAL Page 1 Execution Time: 5/2/202012:23:35 PM 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 *Account is terminating and liquidat Statement of Compliance As of April 30, 2020 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 ig all positions as they mature City of West Covina Short Term Reconciliation Summary Account #10479 As of Apri130, 2020 OR BOOK VALUE RECONCILIATION BEGINNING BOOK VALUE $3,291,567.12 Acquisition +Security Purchases $0.00 + Money Market Fund Purchases $2,552,428.32 + Money Market Contributions $0.00 +Security Contributions $0.00 + Security Transfers $0.00 Total Acquisitions $2,552,428.32 Dispositions - Security Sales $2,515,174.14 - Money Market Fund Sales $0.00 - MMF Withdrawals $2,980,289.77 - Security Withdrawals $0.00 - Security Transfers $0.00 - Other Dispositions $0.00 - Maturites $0.00 Calls $0.00 Principal Paydowns $24,820.24 Total Dispositions $5,520,284.15 Amortization/Accretion +/- Net Accretion ($479.62) ($479.62) Gain/Loss on Dispositions +/- Realized Gain/Loss $12,135.51 $12,135.51 ENDING BOOK VALUE $335,367.18 BEGINNING BALANCE $445,522.74 Acquisition Contributions $0.00 Security Sale Proceeds $2,515,174.14 Accrued Interest Received $11,634.01 Interest Received $775.71 Dividend Received $24.22 Principal on Maturities $0.00 Interest on Maturities $0.00 Calls/Redemption (Principal) $0.00 Interest from Calls/Redemption $0.00 Principal Paydown $24,820.24 Total Acquisitions $2,552,428.32 Dispositions Withdrawals $2,980,289.77 Security Purchase $0.00 Accrued Interest Paid $0.00 Total Dispositions $2,980,289.77 ENDING BOOK VALUE 1 $17,661.29 Chandler Asset Management - CONFIDENTIAL Page 3 Execution Time: 5/2/202012:23:35 PM City of West Covina Short Term Holdings Report Q11 Account #10479 As of Apri130, 2020 Security Description ABS Par Value/Units Purchase Date Book Yield Cost Value Book Value 0 Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity DurationCUSIP 43811BACS Honda Auto Receivables Trust 2017-2 26,511.76 04/27/2018 26,099.59 100.26 26,581.17 7.83% Aaa/AAA 1.30 A3 2.62% 26,350.18 0.72% 19.80 230.99 NR 0.27 1.68% Due 8/16/2021 43814WAB1 Honda Auto Receivables Trust 2019-1 105,782.63 02/19/2019 105,775.82 100.54 106,356.58 31.33% NR/AAA 1.39 A2 2.77% 105,778.94 1.00% 105.05 577.64 AAA 0.31 2.75% Due 9/20/2021 47788BAD6 John Deere Owner Trust 2017-B A3 7,521.83 07/11/2017 7,521.29 100.16 7,533.87 2.22% Aaa / NR 1.46 1.82%Due 10/15/2021 1.83% 7,521.64 1.04% 6.08 12.23 AAA 0.20 47788CAC6 John Deere Owner Trust 2018-A A3 28,121.08 02/21/2018 28,119.07 100.61 28,291.63 8.33% Aaa / NR 1.97 2.66%Due 4/18/2022 2.68% 28,120.13 1.22% 33.25 171.50 AAA 0.42 167,515.77 168,763.25 49.71% Aaa / AAA 1.48 Total ABS 167,937.30 2.69% 167,770.89 0.99% 164.18 992.36 AAA 0.32 CMO - 3137BFDQ1 FHLMC K717 A2 148,871.47 01/04/2018 151,686.08 102.71 152,900.21 45.10% NR/NR 1.41 2.991% Due 9/25/2021 2.37% 149,935.00 1.60% 371.06 2,965.21 AAA 1.19 151,686.08 152,900.21 45.10% NR/NR 1.41 Total CMO 148,871.47 2.37% 149,935.00 1.60% 371.06 2,965.21 AAA 1.19 MONEY MARKET FUND FI 31846V203 First American Govt Obligation Fund 17,661.29 Various 17,661.29 1.00 17,661.29 5.20% Aaa / AAA 0.00 Class 0.01% 17,661.29 0.01% 0.00 0.00 AAA 0.00 17,661.29 17,661.29 5.20% Aaa / AAA 0.00 Total Money Market Fund FI 17,661.29 0.01% 17,661.29 0.01% 0.00 0.00 AAA 0.00 336,863.14 339,324.75 100.00% Aaa / AAA 1.37 TOTAL PORTFOLIO 334,470.06 2.40% 335,367.18 1.22% 535.24 3,957.57 AAA 0.69 TOTAL MARKET VALUE PLUS ACCRUED 339,859.99 Chandler Asset Management - CONFIDENTIAL Page 4 Execution Time: 5/2/202012:23:35 PM City of West Covina Short Term Transaction Ledger OR Account #10479 As of April30, 2020 Transaction Type ACQUISITIONS Settlement Date CUSIP Quantity Security Description Price Acq/Disp Yield Amount Interest Pur/sold Total Amount Gain/Loss Purchase 04/01/2020 31846V203 24.22 First American Govt Obligation Fund 1.000 0.12% 24.22 0.00 24.22 0.00 Class Y Purchase 04/15/2020 31846V203 4,272.59 First American Govt Obligation Fund 1.000 0.12% 4,272.59 0.00 4,272.59 0.00 Class Y Purchase 04/15/2020 31846V203 2,026.98 First American Govt Obligation Fund 1.000 0.12% 2,026.98 0.00 2,026.98 0.00 Class Y Purchase 04/15/2020 31846V203 2,983.34 First American Govt Obligation Fund 1.000 0.12% 2,983.34 0.00 2,983.34 0.00 Class Y Purchase 04/20/2020 31846V203 15,735.99 First American Govt Obligation Fund 1.000 0.12% 15,735.99 0.00 15,735.99 0.00 Class Y Purchase 04/22/2020 31846V203 2,526,808.15 First American Govt Obligation Fund 1.000 0.12% 2,526,808.15 0.00 2,526,808.15 0.00 Class Y Purchase 04/27/2020 31846V203 577.05 First American Govt Obligation Fund 1.000 0.12% 577.05 0.00 577.05 0.00 Class Y Subtotal 2,552,428.32 2,552,428.32 0.00 2,552,428.32 0.00 TOTAL ACQUISITIONS 2,552,428.32 2,552,428.32 0.00 2,552,428.32 0.00 DISPOSITIONS 0 M Sale 04/22/2020 313OA7CV5 350,000.00 FHLB Note 100.903 0.27% 353,160.50 855.56 354,016.06 2,462.82 1.375% Due 2/18/2021 Sale 04/22/2020 3135GOD75 700,000.00 FNMA Note 100.216 0.20% 701,512.00 3,500.00 705,012.00 977.66 1.5% Due 6/22/2020 Sale 04/22/2020 3135GOF73 350,000.00 FNMA Note 100.778 0.21% 352,723.00 2,070.83 354,793.83 1,891.10 1.5% Due 11/30/2020 Sale 04/22/2020 3135GOK69 350,000.00 FNMA Note 100.992 0.29% 353,472.00 2,017.36 355,489.36 3,527.49 1.25% Due 5/6/2021 Sale 04/22/2020 912828N89 375,000.00 US Treasury Note 101.004 0.08% 378,764.65 1,161.57 379,926.22 2,885.52 1.375% Due 1/31/2021 Sale 04/22/2020 912828VF4 375,000.00 US Treasury Note 100.145 0.02% 375,541.99 2,028.69 377,570.68 390.92 1.375% Due 5/31/2020 Subtotal 2,500,000.00 2,515,174.14 11,634.01 2,526,808.15 12,135.51 Chandler Asset Management- CONFIDENTIAL Page 5 Execution Time: 5/2/202012:23:35 PM