The County Treasury investment portfolio is summarized in Attachment 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 $1.066 billion as of December 31, 2023.
The portfolio consisted of 1% ($9.5 million) in cash at bank, 43.1% ($585.8 million) in short-term investments in government investment pools, such as the Local Agency Investment Fund (LAIF) and the California Asset Management Program (CAMP), and 55.9% ($470.4 million) in an investment pool that is actively managed by professional investment advisor PFM Asset Management, LLC (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 Fannie Mae, Freddie Mac, and Federal Home Loan Bank; corporate notes; commercial papers; and certificates of deposit.
The details of investment in the pooled portfolio along with the investment performance are shown in Attachment B (PFM Performance Report) while the non-pooled holdings are shown in Attachment C (Non-pooled Holdings). The non-pooled portfolio of $115.8 million consists of specific investments for various entities and programs. These include $33.1 million in government medium-term funds (LAIF and CAMP) for various districts and the 2017 Lease Revenue Bonds, $29.1 million in investments managed by PFM for various county programs (Landfill Closure, Cache Creek, etc.), $53.4 million in section 115 trusts held by PARS for County OPEB (Other Post Employment Benefits) and pension funding, and $87.2 thousand in cash in money market accounts.
In their quarterly investment review for the 4th quarter of calendar year 2023, PFM continued to monitor the activities of the Federal Reserve. The Fed kept the overnight target rate at its current range of 5.25% to 5.50% at its December 13th meeting and indicated that the historic 2022-23 hiking cycle had likely come to an end. The Fed's updated "dot plot" projects three 25 basis points (0.75%) rate cuts for the year, which is more than previously projected. PFM will continue to evaluate all opportunities as they seek to safely add value to the County’s portfolio while maintaining a strong sense of safety and risk management. The County’s portfolio is aligned with a 1-5 year benchmark strategy.
CASH BALANCES
Attachment D (Cash Balances) depicts the cash balances of the three major operation funds of the County, and their combined balance. On December 31, 2023 this unaudited balance was $78 million, which increased by $12.3 million from the prior quarter caused in part by the collection of property taxes and driven by net operating revenues and expenditures.
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