TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: Geovanny Calvopina, Financial Analyst
SUBJECT: Monthly Investment Transaction Report for February 2024
title
end
RECOMMENDATION
recommendation
Receive and file the Monthly Investment Transaction Report for February 2024.
body
PRIOR ACTION/VOTE
No prior action.
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
BACKGROUND
This report is filed with the City Council in compliance with Government Code Section 53607, which states that a monthly report of transactions related to the purchase, sale, or exchange of securities is made monthly to the legislative body. The City of Murrieta (City) has both long-term and short-term investments. The City’s managed investment portfolio is for longer-term investments, managed by Chandler Asset Management. The Local Agency Investment Fund (LAIF), managed by the California State Treasurer, is used for short-term investments and functions more like a savings account to facilitate cash flow.
This report includes funds under management with Chandler Asset Management, funds deposited with LAIF, and earnings from the Wells Fargo Cash Sweep Program. Bond funds held by the City’s Trustee are not included in this report but are on file and available upon request.
Chandler Asset Management recently updated its client portal, which is now being hosted by Clearwater Analytics. As a result of this change, there will be a one-time adjusting entry to true up the book value from the January statement due to the different amortization methods between Chandler's previous system and Clearwater Analytics. The difference between the ending book value in January and the beginning book value in February is an increase of $322,011.72. Additionally, the report methodology is changing from a settlement-based to a trade-based report. This will better align with our US Bank custodial statement and show all transactions that have been made regardless of settlement status. The new report also shows payables and receivables for income earned but not yet paid or trades placed that have not yet been settled.
The transactions in the long-term investment portfolio for February 2024 include dispositions of $9,301,223.66 in cash, payables, receivables, maturities, and sales, which also includes a withdrawal for bank fees of $373. Subsequently, these proceeds, together with the dispositions and monthly interest earnings, were reinvested in security and money market fund purchases totaling $9,628,344.90.
The California State Treasurer allocates and reinvests LAIF interest earnings every quarter. The statement reflecting the quarterly interest earnings is available one month after the end of the quarter. The account received the last interest-earning deposit in January 2024 for the previous quarter. There are no LAIF transactions to report for the month of February.
As of February 29, 2024, the City’s Total Ending Book Value (or what the City actually paid for the investments) for both investment accounts (long and short-term accounts) is $146,760,521.00. Both accounts combined had an overall increase of $394,220.57 or 0.27%, which includes any deposits, dispositions, applicable interest earning, and less any realized gain/loss or monthly fees charged to the account.
The City is also earning monthly dividends in the General Checking account. The Wells Fargo “Cash Sweep Program” allows the City to earn a return on uninvested cash balances in our General Checking Account by automatically "sweeping" cash balances into a Sweep investment vehicle until such balances are otherwise needed to satisfy obligations arising in the account.
The total earnings from the Cash Sweep Program for the month of February were $453,296.41.
Included, as Attachments 1 and 2, are the investment portfolio account and LAIF regular monthly statements, which outline all transactions associated with the respective accounts. Additionally, Attachment 3 is a summary of daily transactions associated with the Wells Fargo Cash Sweep Program.
This report also includes a statement of compliance with state law and the City’s investment policy for the various investment categories.
FISCAL IMPACT
There is no fiscal impact associated with the recommended action. Interest earnings projections are included in the Fiscal Year 2023/24 Operating Budget.
ATTACHMENTS
1. Chandler Asset Management Monthly Account Statement for February 2024
2. Local Agency Investment Fund (LAIF) February 2024
3. Wells Fargo Cash Sweep Program February 2024 Statement