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  Consent-General Government   #   20.    
Board of Supervisors Financial Services  
Meeting Date: 07/24/2018  
Brief Title:    Treasurer's Investment Report for Quarter Ended June 30, 2018
From: Howard Newens, Chief Financial Officer, Department of Financial Services
Staff Contact: Edward Burnham, Accounting Manager, Department of Financial Services, x8212

Subject
Receive and file the County Treasurer's Investment Report for the quarter ended June 30, 2018. (No general fund impact) (Newens)
Recommended Action
Receive and file the Yolo County Treasurer's Report on Investments for the quarter ended June 30, 2018.
Strategic Plan Goal(s)
Operational Excellence
Reason for Recommended Action/Background
INVESTMENT PORTFOLIO

The county treasury investment portfolio is summarized in Att. A. Investment Summary and includes the Treasurer's Investment Pool and the investment accounts managed by the Treasury that are not pooled together for investment returns. The pooled portfolio includes county funds, deposits from special districts and school districts totaling approximately $429 million as of June 30, 2018. The portfolio consisted of 5.5% ($23.6 million) in cash at bank; 35.9% ($154 million) in short term investments in government investment pools such as the Local Agency Investment Find (LAIF) and the California Asset Management Program (CAMP); 58.5% ($251 million) in an investment pool that is actively managed by a professional investment advisor, PFM Asset Management, LLP (PFM). These investments consist mostly of fixed income securities as authorized by government code, such as U.S. Treasuries; securities issued by federal agencies such as FNMA (Fannie Mae), FHLMC (Freddie Mac) and Federal Home Loan Bank; corporate notes; commercial papers; and certificates of deposit. The detail of investments in the Pooled Portfolio is shown in Att. B. PFM Performance Report and the Nonpooled investment holdings are shown in Att. C. Nonpooled Holdings. In their quarterly investment review for the 2nd quarter of calendar year 2018, PFM noted continued economic growth, inflation near the Fed’s target of 2%, strong labor market conditions and the Fed appears poised to raise rates further. As a result of the expectation for one or two additional hikes in 2018 and three to four more in 2019, their view remains that interest rates will increase gradually over the near-term. PFM prefers to maintain a defensive duration posture to mitigate a portion of interest rate risk relative to the benchmark.

CASH BALANCES

The chart (Att. D. Cash Balances) depicts the cash balances of the three major operation funds of the County, and their combined balance. June 30, 2018, this unaudited balance was $37.3 million; increased $4.7 million from the prior quarter due to normal operating revenues and expenditures.

CERTIFICATION
 
The Yolo County investment pool is in compliance with the Yolo County Investment Policy. Our analysis indicates that the investment holdings in the Yolo County Investment Pool are of proper amount and duration to meet the estimated cash flow requirements of the County and all pool participants for the next six months, barring substantial cash payment deferrals from the State government or other unforeseen cash needs.

Collaborations (including Board advisory groups and external partner agencies)
Other agencies having deposits in the pool include: school districts, special districts and cities. A copy of the report is posted and available on the Department of Financial Services' website. The Board of Supervisors Investment Committee reviews the investment activity and strategy monthly; the Financial Oversight Committee reviews investment performance quarterly. All reports from the County's investment advisor PFM Asset Management LLC are available in the County Treasurer's office.
Competitive Bid Process
N/A

Fiscal Information
No Fiscal Impact
Fiscal Impact of this Expenditure
Total cost of recommended action
Amount budgeted for expenditure
Additional expenditure authority needed $0
On-going commitment (annual cost)
Source of Funds for this Expenditure
General Fund $0
Attachments
Att. A. Investment Summary
Att. B. PFM Performance Report
Att. C. Nonpooled Holdings
Att. D. Cash Balances

Form Review
Inbox Reviewed By Date
Financial Services Tom Haynes 07/18/2018 11:43 AM
County Counsel Hope Welton 07/18/2018 12:31 PM
Form Started By: Edward Burnham Started On: 07/10/2018 02:16 PM
Final Approval Date: 07/18/2018
Level double AA conformance,
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