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01 Staff Report - Treasurer's Report April, May, June 2008,~pW N OF COUNCIL AGENDA REPORT ~as•~a~p5 DATE: July 24, 2008 MEETING DATE: 08104/08 ITEM NO. TO: MAYOR AND TOWN COUNCIL FROM: LINDA SPEICHER, TOWN TREASURER SUBJECT: TREASURER'S REPORT FOR APRIL, MAY, AND JUNE 2008 RECOMMENDATION: Accept reports as attached. DISCUSSION: Attached for your review and acceptance are the Treasurer's reports for the months of April, May and June 2008. Prime has remained steady since the end of April at 5.0%. Other rates have not been as steady, as the financial markets continue to react to economic news on a day to day basis. Overall, the Town saw its average yield on its portfolio drop from 4.1% at the end of March to 3.65% as of the end of June. This is mostly due to higher yielding investments maturing and being replaced with investments at current market yields. We have continued to monitor the investments in Fannie Mae and Freddie Mac agency notes, due to the recent worries in the financial markets. Congress has worked on a housing bill this week and is expected to send it to the President early next week. The bill includes sections intended to help Fannie and Freddie with their access to necessary funds, as well as looking at more oversight of both agencies. MBIA, the Town's advisors, as well as most financial analysts, continue to believe the investments in the two agency's senior debt are of the highest quality and should be held. As of June 30 investments in these agency's notes was less than 9% of the Town's overall portfolio, and approximately 16% of the investments held at Union Bank and managed by MBIA. It is impossible to tell how much of the funds held by LAIF for the Town are invested in these two agencies, however LAIF continues to invest in them, as well as all other US Government agencies and Treasuries. As investments mature over the next few months they will be reinvested either in other agencies (non Freddie or Fannie) or treasuries. PREPARED BY Linda L. Speicher, Town Treasurer Reviewed by: PA/L-,-,1-own anager Assistant Town Manager Clerk WFinance Community Development Distribution: "Town Council; Town Manager; Finance Director ,'Town Attorney ised: 7/25/08 4:57 pm Reformatted: 5130102 ENVIRONMENTAL ASSESSMENT: Is not a project defined under CEQA, and no further action is required. FISCAL IMPACT: None Attachments: Treasurer's report dated July 24, 2008. Letter from MBIA dated 7121108. ImIlbia ASSET MANAGEMENT" July 21, 2008 Ms. Linda Speicher, Town Treasurer Town of Los Gatos P.O. Box 949 Los Gatos, CA 95031-0949 Dear Ms. Speicher: a AR CCUAS ED SMANAGEMENT T% 1700 Broadway, Suite 2050 Denver, Colorado 80290 888-637-2662 303-860-1100 www.mbia.com It has been nearly a year now that the markets have been mired by housing weakness, mortgage delinquencies, and reduced liquidity. Asset-backed commercial paper and defaults in money market funds roiled the markets last summer. Attention moved from relatively unknown financial names to some of the largest brokerage firms in the country. Most recently, the government sponsored enterprises have come under focused market scrutiny, particularly Fannie Mae and Freddie Mac. Fannie Mae, or FNMA, is the Federal National Mortgage Association and Freddie Mac, or FHLMC, is the Federal Home Loan Mortgage Corporation. Both are government sponsored enterprises, or GSEs. These institutions were created by the U.S. government to help meet the national commitment to home ownership by ensuring a reliable supply of mortgage funding throughout the country. The senior debt of Fannie Mae and Freddie Mac carries the triple-A rating by Moody's and Standard and Poor's because of the implied guarantee that the U.S. government would support these institutions, if necessary. The market is now questioning the certainty of this implied guarantee as investors are concerned that mounting mortgage losses maybe too large for the institutions to absorb. To assure confidence in the instruments issued by Fannie Mae and Freddie Mac, the Federal Reserve has granted these issuers immediate access to the discount window. This would provide an important source of liquidity for Fannie Mae and Freddie Mac, if necessary. Also, the U.S. Treasury is seeking approval to meaningfully increase the lines of credit the issuers have with the government. The Treasury has also requested the authority to purchase the debt and equity of Fannie Mae and Freddie Mac. Congress has been considering the organization of the GSE issuers for years, and any ultimate change to these firms' structure or relationship with the government remains to be determined. What has been illustrated, however, is the government's current and on-going commitment to the organizations. Fannie Mae and Freddie Mac own or guarantee 80 percent of all mortgages issued so far in 2008. Keeping these institutions functioning is imperative as long as home ownership is a priority of public policy. MBIA Asset Management recognizes the increased headline risk associated with these firms; clearly the fundamentals do not favor housing related financials at this time. However, given the dominant role of these firms with respect to public policy and the housing market, they will remain critical to a stronger economy in the future. The recent support of the U.S. Treasury and the Federal Reserve illustrates the government's commitment to these institutions. MBIA Asset Management recommends that our clients continue to purchase and hold the senior debt of these issuers as part of a diversified portfolio designed to achieve the objectives of safety, liquidity and yield. If you any questions about this information, please do not hesitate to contact us. Sincere' f y Donovan, CFA Vice President Ann Arbor Austin Denver New York Orlando San Diego Washington, D.C. Meeting date: August 4, 2008 Item No: Town of Los Gatos Treasurer's Report for the month ended April 30, 2008 Submitted July 24, 2008 by Linda L. Speicher Distribution: Town Clerk Town Manager Town Council Town of Los Gatos Summary Investment Information April 30, 2008 Weighted Average Portfolio Yield: 3.95% Weighted Average Maturity (days) This Month Last Month One year ago Portfolio Balance $76,520,381 $72,901,812 $10,970,263 Benchmarks/ References: Town's Average Yield 3,95% 4,10% 4.681/1o LAIF Yield for month 3.40% 3.78% 5.2217/o 3 mo. Treasury 1.34% 1.22% 4.92% 6 mo. Treasury 1.72% 1.58% 5.02% 2 yr. Treasury 2.23% 1.76% 4.61% 5 yr. Treasury (most recent) 3.16% 2.60% 4.58% Prime rate 5.00% 5.25% 8.25% Most recent auctions of Freddie Mae or Fannie Mae Reference Notes: 3 yr. Freddie Mac (04111108)) 2.80% 2 yr. Fannie Mae (04111108) 2.46% Portfolio Maturity Profile 3 - 5 years 177b 2 - 3 years 16% 501 0 - 1 year 51% - z years 16% Compliance: The Town's investments are in compliance with the Town's investment policy dated November 1, 2006 and also in compliance with the requirements of Section 53601 of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months. Page 1 Town of Los Gatos Portfolio Allocation & Treasurer's Fund Balances April 30, 2008 Fund Balances - Beginning of Month/Period Receipts Disbursements Fund Balances - End of Month/Period Portfolio Allocation: Union MM US Govt Agencies Local Agency Investment Fund Subtotal - Investments Reconciled Demand Deposit Balances Total Treasurer's Fund Month YTD $72,901,811.89 $73,499,683.31 5,982,814.53 35,826,191.71 (2,364,245.50) X32 805,494.10} $76,520,380.92 $76,520,380.92 $327,011,83 41,318,494.65 29.846,498.91 71,492,00539 5,028,375.53 $76,520,380.92 Local Agency hrveslroent Fund 41.7% US Govt Agencies 57.8% Treasurer's Fund Balances $78,000,000 $76,000,000 $74,000,000 $72,000,000 - smoo0,000 = - = $66,000,000 = - - $66,000,000 =M $64,000,000 _ $62,000,000 :ir=k= ~ - - 0 0 ~ T Q ro 0 0 0 0 0 0 0 0 D ti ..~d V N a 0 z u 0 0 a page 2 Portfolio Investment Allocation Union MM 0.5% Non-Treasury Funds Downtown Parking District 12120102 Certificates of Participation Reserve Fund (Lot Ceti. of Participation Lease Payment Fund (Lo Cert. of Participation 2002 Series A Const. Fun Cert. of Participation 2002 Series A Reserve F1 Ceti. Of Parlicipalion 2002 Series A Interest Fa Ceti. OF Participation 2002 Series A COI Fun Fund 0.00 Town of Los Gatos Non-Treasury Restricted Fund Balances April 30, 2008 Previous Balance Deposits $263,791.01 4) 255,890.97 t 4) 141,487.61 d 285,969.90 nd 790,828.36 (105,163.19) nd 78.36 105,163.19 Ending Interest Withdrawals Balance $1,010.83 $264,801.84 Note i 280.36 256,171.33 Note 2 117.56 141,605.17 Note3 2,990.70 0.04 288,960.56 Note 4 810.78 224.95 696,251.00 Note4 0.04 105,241.59 Nore4 0.00 0.00 0.00 Note 4 Total Restricted Funds: $1,738,046.21 $0.00 $5,210.27 $224.99 $1,743,031.49 These accounts are not part of the Treasurers fund balances reported elsewhere in this report, as they are for separate and distinct entities, Nofe 1: This account include redemption accounts Set up for the repayment of interest and principal on outstanding bond coupons for Parking Assessment District W, as well as Reserve Funds set up as required by the original Bond resolution. Mule 2: The reserve fiord was a requirement of the original cetificates of participation agreement when I.ot 4 was built. It helps to guarantee payment of the lease payments should the'rown not make payment. Nute 3: The lease payment fund receives the lease payments from the Town monthly for die lease of L_o14. It holds the funds until payments an the certificates of participation are due semi-annually. Notc 4: The three Funds for the Certificates of Participation 2002 Series A consist of construction funds which will be expended over the next few years, reserve funds which will guarantee the payment of lease payments, and a third fund for the disbursement of lease payments and initial delivery costs. Page 3 Town of Los Gatos Statement of Interest Earned April 30, 2008 Interest received from Investments Add: Interest accrued at end of period (see page 5) Less: Interest accrued at beginning of period Interest earned on investments Current Fiscal Month Year to Date $360,019.14 $2,704,376.14 528,269.36 528,269.36 (661,744.33) (638,512.99) $226,544.17 $2,594,132.51 Interest by Month July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 297,956,35 285,325.36 261,616.22 271,223.77 234, 832.62 252, 61 1.44 281,416.49 236,513.04 256,193.05 226,544.17 2,594,132.51 Page 4 Town of Los Gatos Inactive Deposits by Institution Market to Cost Position Report April 30, 2008 Deposit Amortized Maturity Days Days to Days Yield to Interest Interest Interest Institution Security Date Cost Date Elapsed Maturity Invested Maturity Earned Received Accnred USTreasury Note 06/15106 1,990,312.50 05131/08 685 31 716 5.135% 191,804.78 142,254.10 49,550.68 USTreasury Note 07/19106 738,281.25 02/15/09 651 291 942 5.15717a 67,905.84 53,142.27 14,763.57 FHLB Coupon Note 05/12106 1,498,035.00 03113/09 719 317 1036 5.298% t56,339.94 144,593.75 11,746.19 USTreasury Note 05/15106 1,992,343.75 05115109 716 380 1096 5.01401o 195,960.60 146,250.00 49,710.60 FHLB Coupon Note 06/15106 1,493,400.00 06112/09 685 408 1093 5.226% 146,468.17 117,468.75 28,999.42 FT- CB Coupon Note 07/19106 723,562.50 07/17109 651 443 1094 5.409% 69,791.23 46,234.37 23,556.86 FFCB Coupon Note 04/02108 2,010,820.00 08104109 28 461 489 2.2860/a 3,526.26 3,526.26 USTreasury Note 03125108 1,024,062.50 09/15109 36 503 539 1.709% 1,726.15 1,726.15 USTreasury Note 11/17/06 748,066.41 11!15/09 530 564 1094 4.734% 51,422.29 34,495.86 16,926.43 ML Corp Note 04110/07 976,150.00 02/08110 386 649 1035 5.165% 53,318.92 35,180.56 18,138.36 USTreasury Note 10119106 976,406.25 04115110 559 715 1274 4.744% 70,940.49 59,560.44 11,380.05 FHLB Coupon Note 09122/06 1,507 665.00 06111110 617 772 1389 4.957% 126,332.79 96,375.00 29,957.79 FHLB Coupon Note 01/12/07 1,487,205.00 08110110 474 832 1306 4.960% 95,793.93 75,983.33 19,810.60 USTreasury Note 05131107 737,226.56 10/15110 335 898 1233 4.801% 32,485.13 27,868,85 4,616.28 FFCB Coupon Note i2/07/07 2,032,140.00 11101110 145 915 1060 3,715% 29,990.77 29,990.77 FHLMC Coupon Note 04124108 1,008,560.00 12124/10 6 968 974 4.007% 664.32 664.32 FFCB Coupon Note 01118/07 756,922-50 01/18/1) 468 993 1461 3.175% 30,814.00 30,814.00 FFCB Coupon Nate 11128107 2,062,000.00 02118/11 154 1024 1178 3.8401/. 33,407.79 21,666.67 11,741.12 FNMA Discount Note 09129106 1,516,485.00 04/15/11 579 1080 1659 4.874% 117,249.05 118,729.17 (1,480.12) FHLMC Coupon Note 12128t06 1,522,350.00 07/20/11 489 1176 1665 5,375% 109,624,84 91,520.83 18,104.01 USTreasury Note 10119106 990,078.13 09130111 559 1248 1807 4.721% 71,585.06 65,151.10 6,433.96 FFCB Coupon Note 12112107 2,025,090-00 1112tH ] 140 1300 1440 4,000% 31,069.72 31,069,72 FFCB Coupon Note 02122107 986,090,00 112108/11 433 1317 1750 4.959% 58,009.79 36,743.06 21,266.73 FHLB Coupon Note MIDW07 1,509,255.00 03/09/12 357 1409 1766 4.743% 70,015.00 62,500.00 7,515.00 FHLB Coupon Note 11129107 2,038,360.00 08/15112 153 1568 1721 4.170% 35,629.97 19,527,78 16,102.19 GF Corporate Note 01116108 1,542,165.00 10/19/12 105 1633 1738 4.587°k 20,349.61 20,343.75 5.86 FNMA Coupon Note 02121108 1,260,300.00 01/02113 69 1708 1777 4.562% 10,868.90 10,868.90 FHLB Coupon Note 06126103 661,764.30 05113/08 1770 13 1783 2.507% 80,452.23 150,938.61 (70,486.39) FHLMC MTN Coupon Note 06130/03 228,298.00 06/13108 1766 44 1810 2.894% 31,966.75 28,163.82 3,802.93 FHLMC Coupon Note 06124103 50D,000.00 06/18108 1772 49 1821 2.750% 66,753.42 61,875.00 4,878.42 FNMA Coupon Note 09/30/04 198,597,00 08/15/08 1308 107 1415 3.442% 24,496.18 21,937.50 2,558.68 FNMA Coupon Note 11/16/04 194,216.00 09/15/08 1261 138 1399 3.866% 26,607.76 24,979.17 1,628.59 FNMA Coupon Note 01/19/05 248,157.50 09/15108 1197 138 1335 3.974% 32,341.23 29,583.33 2,757.90 FNMA Coupon Nate 11/16104 199,552.00 11/17108 1261 201 1462 3.930% 27,135.22 23,271.53 3,863.69 FHLMC Coupon Note 07/07105 296,403.00 01112109 1028 257 1285 4.313% 36,004.96 29,869.79 6,135.17 FNMA Coupon Note 01121105 242,400.00 03116109 1195 320 1515 3.9307h 31,188.91 24,631.08 6,557.83 FI-ILMC Coupon Note 06/17/05 300,198,00 07130109 1048 456 1504 4.359% 37,571.89 34,380.21 3,191.68 FHLMC Coupon Note 08/01/05 298,332.00 07/30109 1003 456 1459 4.527% 37,t12,35 32,776,04 4,336.31 FHLMC Coupon Note 06114105 298,683.00 09/01109 1051 489 1540 4.237% 36,440.04 33,584.37 2,855.67 FIILMC Coupon Note 01/21/05 149,686.50 09/01109 1195 489 1684 4.1809a 20,484.91 19,250.00 1,234.91 FHLMC Coupon Note 06114105 299,331.00 01/25!10 1051 635 1686 4.431% 38,191.20 34,307.29 3,883.91 Subtotal 41,273,930.65 Union MM 327,011.83 30 30 1.96% 526.80 526.80 Purchased Int erest 44,564.00 LAIF NIA 03131108 29,846.498.91 06/30/08 30 61 91 3.407a 83,037.55 83,037.55 $71,492,005.39 501 3.951/. $2,493,406.74 $1965,137,38 $528,269.36 Maturity Profile Amount Percent 0-1 year $37,219,091.29 52.06% 1-2 years $11,291,041.91 15.79% 2-3 years $11,108,204.06 15.54% 3-5 years $11,873,668.13 16.61% $71,492,005.39 100.00% Market to Cost Position Report Amortized Market Unrealized * Sonrce; Treasury and Agency Obligations - Union Bank or California institution Cost Value* Gain (Loss) LAIF balances per Local Agency Invesunent Fund monthly statement. Union Bank Assets $41,273,930.65 $42,214,402.80 940,472.15 Union mm 327,011,83 327,011.83 0.00 Purchased Interest 44,564.00 44,564.00 0.00 LAD= 29,846,498.91 29,846,498.91 0.00 'T'otals: $71,492,005.39 $72,432,477.54 $940,472.15 page 5 Meeting date: August 4, 2008 Item No: Town of Los Gatos Treasurer's Report for the month ended May 31, 2008 Submitted July 24, 2008 by Linda L. Speicher Distribution: Town Clerk Town Managcr Town Council Town of Los Gatos Summary Investment Information May 31, 2008 Weighted Average Portfolio Yield: 3.81% Weighted Average Maturity (days) 471 This Month Last Month One year ago Portfolio Balance $76,698,570 $76,520,381 $72,676,515 Benchmarks/ References; Town's Average Yield 3.81% LAIF Yield for month 3.07% 3 mo. Treasury 1. 91% 6 mo. Treasury 1.97% 2 yr. Treasury 2.64% 5 yr, Treasury (most recent) 3.52% Prime rate 5,00% Most recent auctions of Freddie Mac or Fannie Mae Reference Notes: 3 yr. Fannie Mae (05119108) 3.39% 2 yr, rreddie Mac (05123108) 2.88% 3 -5 years 17% 2 - 3 years l6%a L I - 2 years 13% 3.95% 4.83% 3.40% 5.25% 1,34% 4.92% 1,72% 5.01% 2.23% 4.89% 3.16% 4.82% 5.00% 8.25% Portfolio Maturity Profile 0 - 1 year 54%a Compliance: The "town's investments are in compliance with the Town's investment policy dated May 1, 2008 and also in compliance with the requirements of Section 53601 of the California State Code. Based on the information available, the "town has sufficient funds to meet the cash demands for the next six months, Page 1 Town of Los Gatos Portfolio Allocation & Treasurer's Fund Balances May 31, 2005 Fund Balances - Beginning of Month/Period Receipts Disbursements Fund Balances End of Month/Period Portfolio Allocation: Union MM Treasuries, Agencies, & Corp. Notes Local Agency Investment Fund Subtotal - Investments Reconciled Demand Deposit Balances Total Treasurer's Fund Month YTD $76,520,380.92 $73,499,683.31 3,938,438.11 39,764, 629.82 (3,760,248.66) (36,565,742.76) $76,698,570.37 $76,698,570.37 $1,071,70141 40,644,485,90 29.846,498.91 71,562,688.22 5,135,882.15 $76,698,570.37 Local Agency Investment Fund 41.7% Treasury, Agencies, & Corp Notes 57.8% Treasurer's Fund Balances $78,000,000 $76,000,000 $74,000,000 $72,000,000 $70,000,000 $68,000,000 $66,000,000 - $64,000,000 $62,000,000 a 0 0 0 0 0 0 0 0 0 0 bi) ? N U O V) 7., C] 4L 0 0 0. is Q ~ page 2 Portfolio Investment Allocation Union MM 1.5% Town of Los Gatos Non-Treasury Restricted Fund Balances May 31, 2008 Previous Balance Deposits Non-Treasury Funds Downtown Parking District 12120102 Certificates of Participation Reserve Fund (Lot 4) Cert. of Participation Lease Payment Fund (Lot 4) Cert, of Participation 2002 Series A Const. Fund Cert. of Participation 2002 Series A Reserve Fund Cert. Of Participation 2002 Series A Interest Fund Cert. Of Participation 2002 Series A COI Fund Total Restricted Funds Ending Interest Withdrawals Balance $264,801.84 $991.97 $265,783.81 Note 1 256,171.33 332.36 256,503.69 Note2 141,605, i7 40,318.68 183.72 182,107.57 Note3 288,960.56 0.61 0.04 288,961.13 Note 4 686,251.00 918.39 237.38 686,932.01 Note 4 105,241.59 10.89 3.18 105,249.30 Note 4 0.00 0.00 0.00 0.00 Note 4 $1,743,031.49 $40,316.68 $2,427.94 $240.60 $1,785,537.51 These accounts are not part of the Treasurer's fund balances reported elsewhere in this report, as they are for separate and distinct entities. Note 1: This account include redemption accounts set up for the repayment of interest and principal on outstanding bond coupons for Parking Assessment District '3', as well as Reserve Funds set up as required by the original Bond resolution. Note 2: The reserve fund was a requirement of the original certificates of participation agreement when 1,01 4 was built. It helps to guarantee payment of the lease payments should the Town not make payment. Note 3: The lease payment fund receives the lease payments from the Town monthly for the lease of Lot 4. It holds the funds until payments on the certificates of participation are due semi-annually. Note 4: The three funds for the Certificates of Participation 2002 Series A consist of constntclion funds which will be expended over the next few years, reserve finds which will guarantee the payment of lease payments, and a third fund for the disbursement of lease payments and initial delivery costs. Page 3 Town of Los Gatos Statement of Interest Earned May 31, 2008 Current Fiscal Month Year to Date Interest received from Investments $71,204.18 $2,775,580.32 Add: Interest accrued at end of period (see page 5) 685,311.35 685,311.35 Less; Interest accrued at beginning of period (528,269.36) (638,512.99) Interest earned on investments $228,246.17 $2,822,378.68 Interest by Month July 2007 August2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 May 2008 287,856.35 285,325.36 261,616.22 271,223.77 234,832,62 252, 611.44 281,416.49 236,513.04 256,193.05 226,544.17 228,246.17 2,822,378.68 Page 4 Town of Los Gatos Inactive Deposits by Institution Market to Cost Position Report May 31, 2008 Deposit Amortized Maturity Days Days to Days Yield to Interest Interest Interest Institution Security Date Cost Date Elapsed Maturity Invested Maturity Earned Received Accrued USTreasary Note 06/15106 1,990,312.50 05131/08 716 0 716 5.135% 200,485.00 142,254.10 58,230.90 USTreasary Note 07/19106 738,281.25 02115109 682 260 942 5.1571/a 71,139.45 53,142.27 17,997.18 FHLB Coupon Note 05112/06 1,498,035.00 03/13109 750 286 1036 5.299% 163,080.60 144,593.75 18,486.85 USTreasary Note 05115/06 1,992,343.75 05/15/09 747 349 1096 5.014% 204,444.93 195,000.00 9,444.93 FHLB Coupon Note 06/15106 1,493,400.00 06112109 716 377 1093 5.226% 153,096.66 117,468.75 35,627.91 FFCB Coupon Note 07/19/06 723,562,50 07/17109 682 412 1094 5.4081/. 73,114.62 46,234.37 26,880.25 FFCB Coupon Note 04/02/08 2,010,820.00 08/04109 59 430 489 2,286% 7,430.34 7,430.34 USTreasary Note 03/25/08 1,024,062.50 09/15/09 67 472 539 1.709% 3,212.55 3,212.55 USTreasary Note 11/17/06 748,066.41 11115109 561 533 1094 4.734% 54,430.01 51,839.61 2,590.40 ML Corp Corporate Note 04/10107 976,150.00 02108/10 417 618 1035 5.165% 57,601.01 35,160.56 22,420.45 USTreasury Note 10119106 976,406.25 04115110 590 684 1274 4.744% 74,874.58 59,560.44 15,314.14 FHLB Coupon Note 08122/06 1,507,665.00 06111/10 648 741 1389 4.957% 132,68034 96,375.00 36,305.14 FHLB Coupon Note 01112107 1,487,205.00 08110/10 505 801 1306 4.960% 102,058.93 75,983.33 26,075.60 USTreasary Note 05131107 737,226.56 10115110 366 867 1233 4.801% 35,491,22 27,868.85 7,622.37 FFCB Coupon Note 12107107 2,032,140.00 11/08/10 176 891 1067 3.715% 36,402.59 36,072.22 330.37 FHLMC Coupon Note 04124/08 1,008,560.00 12124/10 37 937 974 4.007% 4,096.66 4,096.66 FFCB Coupon Note 01/18/07 756,922.50 01/18/11 499 962 1461 1175% 32,855.10 32,855.10 FFCB Coupon Note 11128/07 2,062,000,00 02/18111 185 993 1178 3.8401Y. 40,132,73 21,666.67 18,466.06 FNMA Discount Note 09129/06 1,516,485.00 04/15/11 610 1049 1659 4,8741/. 123,526.64 118,729.17 4,797.47 FHLMC Coupon Note 12128106 1,522,350.00 07/20/11 520 1145 1665 5.375% l 16,574.47 91,520.83 25,053.64 USTreaso y Note 10/19/06 990,078.13 09/30111 590 1217 1807 4.721% 75,554.90 65,151.10 10,403.80 FFCB Coupon Nato 12112107 2,025,080.00 11/21/11 171 1269 1440 4.000% 37,949.44 38,183.33 (233.89) FFCB Coupon Note 02/22/07 986,080.00 12/08/11 464 1286 1750 4.959% 62,162.92 36,743.06 25,419.86 FHLB Coupon Note 05/09107 1,509,255.00 03/09112 388 1378 1766 4.7431Y. 76,094.74 62,500.00 13,594.74 FHLB Coupon Note 11/29/07 2,038,360.00 08/15112 184 1537 1721 4.170% 42,849.12 19,527.78 23,321.34 GE Corporate Note 01116/08 1,542,165.00 10/19112 136 1602 1738 4.587% 26,357.59 20,343,75 6,013.84 FNMA Coupon Note 02/21108 1,260,300.00 01/02113 100 1677 1777 4.562% 15,752.02 15,752,02 FHLMC MTN Coupon Note 06130103 228,298.00 06113/08 1797 13 1810 2.894% 32,527.89 28,163.82 4,364,07 FHLMC Coupon Note 06124103 500,000.00 06118108 1803 18 1821 2.750% 67,921.23 61,875.00 6,04623 FNMA Coupon Note 09130104 198,597.00 08115/08 1339 76 1415 3.44217b 25,076.75 21,937.50 3,139.25 FNMA Coupon Note 11116/04 199,216.00 09115108 1292 107 1399 3.866% 27,261.87 24,979.17 2,282.70 FNMA Coupon Note 01119105 248,157.50 09115108 1228 107 1335 3.974% 33,178.81 29,583.33 3,595.48 FNMA Coupon Note 11116104 199,552.00 11117/08 1292 170 1462 1936% 27,802.31 27,146.53 655.78 FHLMC Coupon Note 0710710,5 296,403.00 01112/09 1059 226 1285 4.313% 37,090.71 29,869.79 7,220.92 FNMA Coupon Note 01121105 242,400.00 03116/09 1226 289 1515 1930% 31,998.00 24,631.08 7,366.92 FHLMC Coupon Note 06117105 300,198.00 07130109 1079 425 1504 4.359% 38,683.28 34,380.21 4,303.07 FHLMC Coupon Note 08/01/05 298,332.00 07/30109 1034 425 1459 4.527% 38,259.39 32,776.04 5,483.35 FIILMC Coupon Note 06/14/05 298,683.00 09/01109 1082 458 1540 4.237% 37,514.86 33,584.37 3,930.49 FHLMC Coupon Note 01121105 149,686.50 09101109 1226 458 1684 4.180% 21,016.31 19,250.00 1,766.31 FHI.MC Coupon Note 0611405 299,331.00 01/25110 1082 604 1686 4.431% 39,317.68 34,307.29 5,010.39 Subtotal 40,612,166.35 [boon MM 1,011,703.41 30 30 1.96% 1,726.47 1,726.47 Purchased Interest 32,319.55 LAEF NIA 03/31/08 29,846,498.91 06130108 6l 30 91 3.07%n 160,909.93 160,909.93 $71,562,688.22 471 3.81% $2,643,734.42 $1,958,423,07 $685,311.35 Maturity Profile Amount Percent 0-l year $39,282,117.87 54,89% 1-2 years $9,298,698.16 12.99% 2-3 years $11,108,204.06 15.52% 3-5 years $11.873.668.13 16.59% $71,562,688.22 300.00% iWarket to Cost Position Report Amortized Market Um ealized # Source: Treasury and Agency Obligations - Union Ban k of California Institution Cost Value* Gain (Lass) LAIF bala nces per local Agency Inves tment Fund mont hly statement. Union Rank Assets $40,612,166.35 $41,288,811.00 676,644.65 Union MM 1,071,703,41 1,071,703.41 0.00 Purchased Interest 32,319.55 32,319.55 0.00 LAB= 29,846,498.91 29,846,498.91 0.00 Totals: $71,562,688.22 $72,239,332.87 $676,644.65 page 5 Meeting date: August 4, 2048 Item No: Town of Los Gatos Treasurer's Report for the month ended June 30, 2008 Submitted July 24, 2008 by Linda L. Speicher Distribution: 'l'awn Clerk Town Manager Town Council Town of Los Gatos Summary Investment Information June 30, 2008 Weighted Average Portfolio Yield: 3.65% Weighted Average Maturity (days) This Month Last Month One year ago Portfolio Balance $76,714,634 $76,698,570 $73,499,683 Benchmarks/ References: Town's Average Yield 3.65% 3.81% 4.83% LA1F Yield for month 2.89% 3.07% 5.25% 3 mo. Treasury 1.94% 1.91% 4,82% 6 mo. Treasury 2.19% 1.97% 5.01%a 2 yr. Treasury 2.92% 2.64% 4.91% 5 yr. Treasury (most recent) 3.44% 3.52% 4.94% Prime rate 5.00% 5.00% 8.25% Most recent auctions of Freddie Mac or Fannie Mae Reference Notes: 3 yr. Freddie Mac (06113108) 3.881/1o 2 yr. Fannie Mae (07111108) 3.27% 497 Compliance: The Town's investments are in compliance with the Town's investment policy dated May 1, 2008 and also in compliance with the requirements of Section 53601 of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months. Page 1 Town of Los Gatos Portfolio Allocation & Treasurer's Fund Balances June 30, 2008 Fund Balances - Beginning of Month/Period Receipts Disbursements Fund Balances - End of Month/Period Portfolio Allocation: Union MM US Govt Agencies Local Agency Investment Fund Subtotal - Investments Reconciled Demand Deposit Balances Total Treasurer's Fund Local Agency Investmenl Fund 42.8% Month YTD $76,698,570.37 $73,499,683.31 2,709,758.06 42,474,387.88 (2,693,694.40) (39,259,437,16 $76,714,634.03 $76,714,634.03 $168,435.82 41,731,905.97 31.346.498.91 73,246,840.70 3,467,793.33 $76,714,634.03 Treasury, Agencies, & Corp. Notes 57.8 Treasurer's Fund Balances .H ! 0,000, V UU $76,000,000 $74,000,000 $72,00.000 $70,000,000 $68,000,000 $66,000,000 $64,000,000 ` ~ may- ~ ~ _z NOR s $6z,ooo,ooo r ~ r r h 1~ 00 00 00 0 0 0 C. W 0 0 0 0 0 0 0 0 0 a V o z Q w page 2 Portfolio Investment Allocation Union MM 0.2% Town of Los Gatos Non-Treasury Restricted Fund Balances June 30, 2008 Previous Ending Balance Deposits Interest Withdrawals Balance Non-Treasury Funds: Downtown Parking District 12120102 $265,783.81 $1,018.47 $266,802.28 Note I CCLIMMICS of Participation Reserve Fund (Lot 4) 256,503.69 329.78 256,833,47 Note2 Carl. of Participation Lease Payment Fund (Lot 4) 182,107.57 210.29 182,317.86 Note 3 Cet7. of Participation 2002 Series A Const. Fund 288,961.13 0.61 26,043.44 262,918.30 Note 4 Cert. of Participation 2002 Series A Reserve Fund 686,932,01 792.52 215.79 687,506.74 Note 4 Cert. Of Participation 2002 Series A Interest Fund 105,249.30 121.39 3295 105,337.74 Note 4 Cert. Of Participation 2002 Series A COI Fund 0.00 0.00 0.00 0.00 Note 4 Tolal Restricted Funds: $1,785,537.51 $0.00 $2,473.06 $26,292.18 $1,761,718.39 These accounts are not part of the Treasurers fund balances reported elsewhere in this report, as they are for separate and distinct eutitics. Note 1: This account include redemption accounts set up for the repayment of interest and principal oil outstanding bond coupons for Parking Assessment District'3', as well as Reserve Funds set up as required by the original Bond resolution. Note 2: The reserve fond was a requirement of the original certificates of participation agreement when Lot 4 was built. It helps to guarantee payment of the lease payments should the Town not make payment. Note 3: The lease payment fund receives the lease payments from the Town monthly for the lease of Lot 4. It holds the funds until payments on the eertif€cates of participation are due semi-annually, Note 4: The three funds for the Certificates of Participation 2002 Series A consist of construction funds which will he expended over the next few years, reserve funds which will guarantee the payment of lease payments, and a third fund for the disbursement of lease payments and initial delivery costs. Page 3 Town of Los Gatos Statement of Interest Earned June 30, 2008 Current Fiscal Month Year to Date Interest received from Investments $184,467.75 $2,960,048.07 Add: Interest accrued at end of period (see page 5) 715,999.95 715,999.95 Less: Interest accrued at beginning of period (685,311.35) (638,512.99) Interest earned on investments $215,156.35 $3,037,535.03 Interest by Month July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 May 2008 June 2008 287,856.35 285,325.36 261,616.22 271,223.77 234,832,62 252,611.44 281,416.49 236, 513.04 256,193.05 226,544.17 228,246.17 215,156.35 3,037,535.03 Page 4 Town of Los Gatos Inactive Deposits by Institution Market to Cost Position Report June 30, 24108 Deposit Amortized Maturity Days Days to hays Yield to Interest Interest Interest Institution Security Date Cost Dale Elapsed Maturity Invested Maturity Earned Received Acenied USTreasury Note 07119106 738,281.25 02115/09 712 230 942 5.1571/o 74,268.75 53,142.27 21,126.48 FHLB Coupon Note 05/12/06 1,498,035.00 03/13/09 780 256 1036 5.299% 169,603.83 144,593.75 25,010.08 USTreastuy Note 05115106 1,992,343.75 05115/09 777 3L9 1096 5.014% 212,655.57 195,000.00 17,655.57 FHLB Coupon Note 06/15106 1,493,400.00 06/12/09 746 347 1093 5.226% 159,511,32 156,843.75 2,667.57 FFCB Coupon Note 07/19106 723,562.50 07/17/09 712 382 1094 5.408% 76,330.81 46,234.37 30,096.44 USTreasury Note 06102/08 1,537,617.20 07131109 28 396 424 2.4265/o 2,861,57 2,861.57 FFCB Coupon Note 04102/08 2,010,820.00 08104/09 89 400 489 2.286% 11,208.48 11,208.48 USTreasury Note 03125/08 1,024,062.50 09115/09 97 442 539 1.709% 4,651.01 4,651.01 USTreasury Note 11117/06 748,066.41 11115109 591 503 1094 4.734% 57,340.70 51,839.61 5,501.09 USTreasury Note 06/02/08 1,514,941.41 12131109 28 549 577 2.602% 3,023.91 3,750.00 (726.09) ML Corp Corporate Note 04/10/07 976,150.00 02108/10 447 588 1035 5.165% 61,744.96 35,180.56 26,564.40 USTreasury Note 06/24108 739,921.88 02/28/10 6 608 614 2.819% 342.88 342.88 USTreasury Note 10/19106 976,406.25 04115/10 620 654 1274 4.744% 78,681.76 59,560.44 19,121.32 FHLB Coupon Note 08122/06 1,507,665.00 06111/10 678 711 1389 4.957% 138,822.74 135,750.00 3,072.74 FHLB Coupon Note 01/12107 1,487,205.00 08110/10 535 771 1306 4.960% 108,121.84 75,983.33 32,138.51 USTreasury Note 05131107 737,226.56 10115/10 396 837 1233 4.80111o 38,400.33 27,868.85 10,531.48 FFCB Coupon Note 12/07107 2,032,140.00 11/08/10 206 861 1067 3.715% 42,607.57 36,D72.22 6,535.35 FHLMC Coupon Note 04124/08 1,008,560.00 12/24/10 67 907 974 4.007% 7,418.28 7,129.17 289.11 FFCB Coupon Note 01118/07 756,92150 01118/11 529 932 1461 3.175% 34,830.36 34,830.36 FFCB Coupon Note I It28107 2,062,000.00 02/18/11 215 963 1178 3.840010 46,640.75 21,666.67 24,974.08 FNMA Discount Note 09129106 1,516,485.00 04/15/11 640 1019 1659 4.874% 129,601.72 118,729.17 10,872.55 FHLMC Coupon Note 12128106 1,522,350.00 07/20/11 550 1115 1665 5.375% 123,299,92 91,520.83 31,779.09 USTreasury Note 10119106 990,078.13 09/30/11 620 1187 1807 4.721% 79,396.67 65,151.10 14,245.57 FFCB Coupon Note 12112/07 2,025,080.00 11/21/11 201 1239 1440 4.0006/- 44,607.24 38,183.33 6,423.91 Fl-CB Coupon Note 02/22107 986,080.00 12108111 494 1256 1750 4.95917. 66,182.07 59,868.06 6,314.01 FHLB Coupon Note 05/09107 1,509,255.00 03109112 418 1348 1766 4.743% 81,978.35 62,500.00 19,47835 FIILB Coupon Note 11/29/07 2,038,360.00 08115112 214 1507 1721 4.1701/. 49,835.39 19,527.78 30,307.61 GL Corporate Note 01/16108 1,542,165.00 10/19112 166 1572 1738 4.587% 32,171.76 20,343.75 11,828.01 FNMA Coupon Note 02121108 1,260,300.00 01/02/13 130 1647 1777 4.5621/o 20,477.63 20,477.63 FNMA Coupon Note 09130104 195,597,00 08/15/08 1369 46 1415 1442% 25,638.59 21,937.50 3,701.09 FNMA Coupon Note 11116/04 199,216.00 09115108 1322 77 1399 3.866% 27,894.89 24,979.17 2,915.72 FNMA Coupon Note 01119105 248,157.50 09/15/08 1258 77 1335 3.9747o 33,989.36 29,583.33 4.406.03 FNMA couponNote 11116104 199,552.00 1ill7108 1322 140 1462 3.936% 28,447.87 27,146.53 1,301.34 FHLMC Coupon Note 07/07/05 296,403.00 01/12109 1089 196 1285 4.313% 38,141.44 29,869.79 8,271.65 FNMA Coupon Note 01/21/05 242,400.00 0311609 1256 259 1515 3.930% 32,780.98 24,631.08 8,149.90 FH1,MC Coupon Note 06/17105 300,198.00 07130109 1109 395 1504 4.359% 39,758.81 34,380.21 5,378.60 FIILMC Coupon Note 08/01105 298,332.00 07130/09 1064 395 1459 4.527% 39,369.43 32,776.04 6,593.39 FHLMC Coupon Nate 06/14105 298,683.00 09101109 1 112 428 1540 4.2379o 38,555.02 33,584.37 4,970.65 FLILMC Coupon Nate 01/21105 €49,686.50 09101109 1256 428 1684 4.1807. 21,530.58 19,250.00 2,280.58 FHLMC Coupon Note 06114105 299,331.00 01125/10 1112 574 1686 4.431% 40,407.82 34,307.29 6,100.53 Subtotal 41,686,036.34 Union MM 168,435.82 30 30 1.94% 268.57 268.57 Purchased Int erest 45,869.63 LAIF NIA 06/30108 31,346,498.9) 09/30/08 0 92 92 2.89% 231,482.77 231,482.77 $73,246,840.70 497 3.65% $2,554,884.27 $1,838,884.32 $715,999.95 Maturity Profile Amount Percent 0-1 year $38,667,189.86 52.79% 1-2 years $13,105,443.65 17.89% 2-3 years $9,600,539.06 13.11% 3-5 years $11,873,668.13 16.21% $73,246,940.70 100 00% Market to Cost Position Report Amortized Market Unrealized * Source: 't'reasury and Agency Obligat ions - Union Ban k of California Institution Cost value* Gain (Loss) LAIF bala nces per Loeal Agency Inves tment Fund mont hly statement. Union Bank Assets $41,686,036.34 $42,297,489.50 611,453.16 Union MM 168,435;82 168,435.82 0.00 Purchased tnt erest 45,869,63 45,869.63 0.00 LAIF 31,346,498.91 31,346,498.91 0.00 Totals: $73,246,840.70 $73,858,293.86 $611,453,16 page 5