Agenda

Back to Calendar Return

Consent-General Government # 13.

Board of Supervisors

Financial Services

Meeting Date:	02/06/2018
Brief Title: Treasurer's Investment Report for Quarter Ended December 31, 2017
From:	Howard Newens, Chief Financial Officer, Department of Financial
Staff Contact:	Edward Burnham, Accounting Manager, Department of Financial Services, x8212
Supervisorial District Impact:

Subject

Receive and file the County Treasurer's Investment Report for the quarter ended December 31, 2017. (No general fund impact) (Newens)

Recommended Action

Receive and file the Yolo County Treasurer's Report on Investments for the quarter ended December 31, 2017.

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 $501.5 million as of December 31, 2017. The portfolio consisted of 4.4% ($22.3 million) in cash at bank; 43.4% ($217.7 million) in short term investments in government investment pools such as the Local Agency Investment Fund (LAIF) and the California Asset Management Program (CAMP); 52.1% ($261.5 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 investments in the Nonpooled investment holdings are shown in Att. C. Nonpooled Holdings.

In PFM's quarterly investment review for the 4th quarter of calendar year 2017 (Att. B. PFM Investment Performance Report), it is noted that shorter-term Treasury yields (5 years and under) increased in the fourth quarter, largely on the run-up to the December FOMC rate hike. Long-term Treasury yields (10 years and longer) moved in the opposite direction, with the yield on a 30-year Treasury actually declining 12 basis points. This resulted in a much flatter yield curve. In the cash and money market segment, yields on Treasury maturities less than one year increased 30 to 45 basis points in lockstep with the Fed’s expected rate hike trajectory.

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. December 31, 2017, this unaudited balance was $40.1 million; increased $8.3 million from the prior quarter due to property tax collections and 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

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	01/30/2018 12:40 PM
County Counsel	Hope Welton	01/30/2018 12:41 PM
Form Started By: eburnham		Started On: 01/23/2018 09:13 AM
Final Approval Date: 01/30/2018