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Home My WebLink AboutAGENDA REPORT 2004 0407 CC REG ITEM 09ATO: FROM: DATE: MOORPARK CITY COUNCIL AGENDA REPORT Honorable City Council ITEM 9A. - - -,_ A� i1 Cynthia L. Borchard, Administrative Services March 30, 2004 (meeting of April 7, 2004) Director �& SUBJECT: Consider Investing in the Ventura County Investment Pool BACKGROUND /DISCUSSION At the March 17, 2004, Council information on the Ventura County investment option for the deposit of proposed for diversification and as LAIF (Local Agency Investment Fund) v maximum investment amount. meeting, staff presented Investment Pool as an City funds. The Pool was an option in addition to here we have exceeded the Council questioned the Government Code Section 53684 that requires a 30 -day notice for withdrawals from the County Pool. It was explained that although that provision exists to discourage market - timers, in practice requests for withdrawals before 9 a.m. are processed the next day. Council also inquired why no other cities currently participate in the Pool. A survey (attached) of other Ventura County cities indicates the majority were unaware of the pool as it has not been marketed to them and that they may look into participating in the future. Also, as previously noted the Pool receives continuous oversight by daily monitoring by Standard and Poor's. The Pool receives four (4) quarterly cash counts (audits); annual internal and external audits; and review by the County Treasury Oversight Committee. Additionally, three (3) signatures are required for each transaction and monthly reports are provided to the Board of Supervisors for their review. I have attached a Standard & Poor's credit rating report on the Pool for your information. STAFF RECOMMENDATION: Adopt Resolution No. 2004- authorizing investment in the Ventura County Investment Pool. ATTACHMENT: Standard & Poor's Credit Rating Report Survey of Ventura County Cities Resolution No. 2004 - K Credit duality Ratings Definitions AAAf ' The fund's • portfolio holdings provide extremely strong protection against losses from credit defaults, ' AAf The fund's portfolio holdings provide very strong protection against losses from credit defaults. Af The fund's portfolio holdings provide strong protection against losses from credit defaults. BBBf The fund's portfolio holdings provide adequate protection against losses from credit defaults. 8Sf The fund's portfolio holdings provide uncertain protection against losses from credit defaults: Sf The fund's Portfolio holdings exhibit vulnerability to losses from credit defaults. CCCf The fund's portfolio holdings make it extremely vulnerable to losses from credit defaults. Plus ( +) or Minus (-) The ratings from 'AAf to 'CCCP may be modified to show relative standing within the major rating • cat ties BOND FUND PROFILE Ventura County Treasury Portfolio About the Fund Fund Rating AAAfI S1+ Fund Type Government Investment Pool Chief Investment Officer Robert A_ Hansen Treasurer Lawrence L. Matheney Date Rating Assigned June eggs Custodian Wells Fargo Bank Fund Highlights -Pool provides safety of principal, liquidity and a competitive rate of return *investments are comprised of highly creditworthy liquid securities Management The Ventura County Treasury Portfolio is an investment pool managed by the Treasurer -Tax Collector of Ventura County, California for local public governments, agencies, and school districts within Ventura County. The Chief Investment Officer, Robert A. Hansen, under the general direction of the Treasurer-Tax Collector, Lawrence L. Matheney, actively manages the pool in accordance with the California Government Code and its internal investment guidelines to meet cash flow needs and to ensure the safety and liquidity of all investments. The pool maintains a highly Creditworthy, low risk portfolio with an average maturity less than 320 days. Wells Fargo Bank serves as custodian for the pool's investments. October 31, 2003 Annualized and cumulative returns do not reflect they sate charges and other miscellaneous expenses. " Citi US Gov tad 1 -3y Portfolio Assets The pool's investment strategy is to maintain a highly creditworthy, laddered portfolio that is sufficiently liquid to meet participants cash flow needs. The portfolio is typically comprised of U.S. Treasury and U.S. Agency securities and high quality short -term instruments resulting in a relatively short weighted average. The pool's liquidity is further enhanced by its high precentage (40% to 50% or more) of holdings in securities that mature in 90 days or less. The pool's S1+ volatility rating results from its low market risk profile and indicates that the pool has extremely low sensitivity to changing market conditons and a level of risk equal to or less than a portfolio of U.S. government securities maturing between one and three years. Standard & Poces Analyst: Gary Arne - (1) 2.12- 438 -5034 www.standardandpoors.com F7easa see page 2 for required research analyst certification disrfosure. 0 °' 3 E0/ti0'd 99LE bS9 S08 J,NnSUEINI 09 uNniNEIA 9t7:80 OOOE —TT—NNW Credit Quality Credit quality ratings, identified 'The AAAf credit quality rating reflects the by the Y subscript; are extremely high creditworthiness of the pool's assigned to blind funds and portfolio holdings, eligible investments and other ac%'valy managed funds that variable net asset counterparties. The Treasurer -Tax Collector s. These values. These ratings are invests exclusive) in or with highest quality y g q Y current assessments of the- securities and counterparties. Investments overall oredit quality of a fund's are comprised of securities rated in the two portfolio. The ratings reflect the level of protection 91� highest short-term or long -term categories_ tosses from credit defaults and The 'AAAf rating ndicates that portfolio g p :are based on an analysis of the holdings and counterparties provides credit quafity of the portfolio : extremely strong protection against losses kwestments and the likelihood from credit defaults. of counterparty defaults_ October 31, 2003 Annualized and cumulative returns do not reflect they sate charges and other miscellaneous expenses. " Citi US Gov tad 1 -3y Portfolio Assets The pool's investment strategy is to maintain a highly creditworthy, laddered portfolio that is sufficiently liquid to meet participants cash flow needs. The portfolio is typically comprised of U.S. Treasury and U.S. Agency securities and high quality short -term instruments resulting in a relatively short weighted average. The pool's liquidity is further enhanced by its high precentage (40% to 50% or more) of holdings in securities that mature in 90 days or less. The pool's S1+ volatility rating results from its low market risk profile and indicates that the pool has extremely low sensitivity to changing market conditons and a level of risk equal to or less than a portfolio of U.S. government securities maturing between one and three years. Standard & Poces Analyst: Gary Arne - (1) 2.12- 438 -5034 www.standardandpoors.com F7easa see page 2 for required research analyst certification disrfosure. 0 °' 3 E0/ti0'd 99LE bS9 S08 J,NnSUEINI 09 uNniNEIA 9t7:80 OOOE —TT—NNW Ventura County Treasury Portfolio AAAf/ S1+ Data Bank es of October 31, 2003 TicKer Symbol .............. ............................... 6807Z Sales Charge.............. ............................... NIA hIAV......... .............................. .. ......... .._...... 12b-1 Pee ......................................... NIA Net Assets (mil lions) ... ..........r.................... $1,093.00 Total Expense Ratio _.. ....... ............... N/A lncepRion Date ................. ........................... I N/A Volatility. Ratings Definitions S1. Low sensitivity to changing market conditions. Within this category of (S-1) certain funds may be designated with a plus sign ( +). This indicates the fund's extremely tow sensitivity to changing market conditions. 82 Low to moderate sensitivity to changing market conditions. S3 Moderate sensitivity to changing market conditions. S4 Moderate to high sensitivity to changing market' conditions. 35 High sensitivity to changing market conditions. S6 -Highest sensitivity •to changing market conditions. Volatility ratings evaluate the fund's sensitivity to interest rate movements, credit risk, investment diversification or concentration, liquidity, leverage, . Portfolio Composition as of October 31, 2003 CP _ 21.5% AGCY. Agency, CP - commercial Paper AGCY ".5% Portfolio Cret1it Quality as of Dctobet 31, 2063' AAA 6&IM A-1. At1��YS? 19,8% a ascemsed by Standard & Parrs Top Ten Holdings as of October 31, 2003 SeCUrliy % 31.65 18.44 9.70 8.24 5.19 FNMA FHLB FFCt3 FHLMC AIG Funding Portfolio Maturity Distribution as of October 31, 2003 100 80 da 0 40 20 0 c a M GE American Express Wells Fargo Citicorp SLMA Security Years �d 5.1s 6.22 5.22 3.85 4.48 AN of die vlewy expressed in this research report accurab* reflect our 40mmtt 00% vlaws regarding any and all of the subject securities or Issuers. No prat of the rammittee's compensation was, is or will be, Ch+h -my or indirectly, related to the specific mcomnter104tleapF or views expressed in this research report. Published by Stand" & Peer's Raangs Services, a division of The McGraw -Hie CotnpeNes, Mr. Emmutive offices: 1221 Avenue of the Airwricas, New York, NY, 10120. Editorial offices: 55 Water Street, New York NY 10041. Copyright 1988 by The MoGyaw-HWI CompatNes, Inc, Reproduction in whole or in part prohibited except try permission: All rights reserved. Officers of The McGraw -Hill Wrip8nies, Inc,, Joseph L. Dionne. Chairman and Chief Executive officer; Harold W. McCraw. Ill. President find chid operating Orlicer, Kennalh M. Vitior, Senior Vice President and General Counset Frank Penrdase, Smnior vtart Pnxridemt Treasury Operations. Infumratiwl has been obtained ay Standard 8 Prior's from sources believed to be reliable. HpWeVer. bei:muse of the possibility of human or mechanical error by our sources, Standard & Pope's or others, &Wndard r. Poor's does not guarantee the accuracy, adequacy, or ewmpicteness of any information and is not responsible for any erpro or omission or for the results obtainctl from the use o<such iMa4,tariun. As With all its rating services, talandard & Prior's receives compefteadon for rating muttrai funds and performing risk analyews. Standard & Pvoes rating fees generally vary from $2,500 tp 5100,000, Viihne stamdard a Paces reserves the right to disseminate ratings and risk anaiysus, it recerves no payment far doing sit, except for subscriptio% to Its publications. ;dart nI & Prior's ratings and risk analyses are nut raexrhnnlendadpna to purchase., sea, or hdhd a security, inasmuch as they do not comment as to sulhttihrty far a particular investor. The ratings and I'lsK analyses are based on Current inforlllatlon funilshe0 to Standard & Prior's by the fund or obtained by Standard & Floors tram other sources it considers reliable. Standard & Prior's does not Belk in an audit in Connsction with any rOngs or risk analyses and may, mn «cesioh, rely on unaudited 1lnandah kr(Grmatkin. The ratings and risk profile oatedories hhay be changed, suspended, or withdrawn as a resWt of Changes Iii, or lmavaitability of, such information, or based on ogler Clinwstanecg. EO /Eo l d 99L2 VS9 S08 ANnSUE]Ni 09 t NniN3ft 9t7:80 VOOE -Z T -NNW Camarillo Fillmore C Port Hueneme Paula Simi Valley Oaks 3/31/2004 VENTURA COUNTY CITIES INVESTMENTS 0 million ILAIF 07 million ILAIF and U.S. Government Agencies ?25 million LAIF ($80m), CD's ($12m), US Agencies ($31 m), US Treasury Notes ($60m) Commercial Paper ($4m), US Agency Discount Notes ($9m), balance in Money Market and various bond /trustee accounts 33 million LAIF, Government Securities, Notes, etc. Has not considered; no need to Not familiar with Pool or details of the program to consider any change at this time. Have not considered County Pool; have four accounts with LAIF so no need to look into other liquid investment options. Were not aware that the County Pool accepted City funds. LAIF and Money Market Account (AIM) more than satisfy our requirements for overnight investments. Were not aware of the County Po May possibly consider investment in the future. 000015 RESOLUTION NO. 2004- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, AUTHORIZING INVESTMENT OF EXCESS CITY FUNDS IN THE VENTURA COUNTY INVESTMENT POOL WHEREAS, the Investment Policy of the City of Moorpark states that excess City funds may be invested in accordance with the principals of sound treasury management and the provisions of California Government Code § 53600 et seq.; and WHEREAS, the Investment Policy of the City of Moorpark further states that the City Treasurer may invest in County Pooled Investment Funds in accordance with the laws and regulations governing those Funds and State law; and WHEREAS, the Ventura County Treasurer -Tax Collector has established an investment pool for local agencies, regulated by Government Code Section 53684, and adopted by the Ventura County Board of Supervisors on July 21, 1987. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City Council does hereby authorize the deposit and withdrawal of City funds in the County Treasury in accordance with the provisions of Government Code Section 53684 and ; SECTION 2. The following City officers or their successors in office shall be authorized to order the deposit or withdrawal of monies by either mail or facsimile in the County Treasury: Steven A. Kueny, City Manager Cynthia L. Borchard, City Treasurer Johnny Ea, Budget and Finance Manager PASSED AND ADOPTED this 7th day of April, 2004. ATTEST: Deborah S. Traffenstedt, City Clerk Patrick Hunter, Mayor 0f fu