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  Agenda Item   25.    
City Council Meeting
Meeting Date: 03/21/2017  
FROM: City Manager

Subject:
Treasurer's Report for the City of Brea for Period Ending February 28, 2017
RECOMMENDATION
Receive and file.
BACKGROUND/DISCUSSION
The Treasurer’s Report contains information on the investment activities for the month of February 2017. Cash for day-to-day activities is deposited in the demand and interest-bearing checking accounts. The Local Agency Investment Fund (LAIF) is used for short term investment and functions like a savings account.  The City’s managed investment portfolio is for longer-term investments which are managed through Chandler Asset Management. Together, the short and long-term investment accounts represent the City’s investment portfolio.  Attachment A includes a Portfolio Summary, Holdings Report, Book Value Report and Compliance with Investment Policy Statement prepared by Chandler Asset Management for the invested funds.  The book value is the cost, plus or minus amortization/accretion.   

As of February 28, 2017, the total market value of the managed investment portfolio, including accrued interest, was  $63,820,580.16 as compared to $63,694,336.32 at January 31, 2017.  The weighted average investment yield for February 2017 was 1.52%, which was slightly higher from the prior month of 1.51%.  The City’s Local Agency Investment Fund (LAIF) had a total market value, including accrued interest of $7,707,637.90 at February 28, 2017.  This brings the total value of the City’s investment portfolio as of February 28, 2017 to $71,528,218.06, as compared to $69,398,535.45 at January 31, 2017.   

Restricted cash and investments are held in the post-employment benefits trust account administered by PARS and managed by High Mark Capital and the City’s various bond reserve accounts which are managed by Chandler Asset Management.  Attachment A includes a monthly statement from US Bank for the PARS account as well as a portfolio report from Chandler Asset Management for each bond reserve account that is invested.  As of February 28, 2017, the market value of these funds, including short-term cash and accrued interest were $6,609,514.55 and $6,813,973.51, respectively. Furthermore, the City of Brea holds 2,106.5 shares of water common stock with Cal Domestic totaling $6,692,116.02 and 687.85 shares of Class A preferred stock with Pellissier Co-Tenancy, totaling $8,444,403.67.  

All City investments are GASB rated No. 1, where the custodian (The Bank of New York Mellon Trust Company, N.A.) acts as an agent of the City, and is not a counter party to the investment transaction, and all securities are held in the name of the City of Brea.  The custodial account at Bank of New York and account records with Chandler Asset Management have been reconciled to par value for the month.  The City of Brea has sufficient cash flow to meet its expected expenditures for the next six months.
FISCAL IMPACT/SUMMARY
During the month of February, the total value of the City’s investment portfolio increased by $2,129,682.61. The increase was primarily due to receipt of a commercial property loan payoff from Olen Pointe Apartments.   The total value of the City’s restricted cash and investment accounts increased by $225,460.00 primarily due to investment activity.
RESPECTFULLY SUBMITTED:
William Gallardo, City Manager
Prepared by:  Ana Conrique, Senior Accountant
Concurrence:  Cindy Russell, Administrative Services Director
Attachments
Attachment A

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