Agenda

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Consent-General Government # 17.

Board of Supervisors

Financial Services

Meeting Date:	05/21/2019
Brief Title: 3rd Quarter Treasurer's Report on Investments
From:	Chad Rinde, Chief Financial Officer, Department of Financial Services
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 March 31, 2019. (No general fund impact) (Rinde)

Recommended Action

Receive and file the Yolo County Treasurer's Report on Investments for the quarter ended March 31, 2019.

Strategic Plan Goal(s)

Operational Excellence

Reason for Recommended Action/Background

INVESTMENT PORTFOLIO

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 $503.1 million as of March 31, 2019. The portfolio consisted of 6.8% ($34.4 million) in cash at bank, 44.5% ($224 million) in short term investments in government investment pools such as the Local Agency Investment Find (LAIF) and the California Asset Management Program (CAMP), and 48.6% ($244.7 million) in an investment pool that is actively managed by 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 Fannie Mae, 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 Attachment B (PFM Performance Report). The non-pooled portfolio of $74.6 million consist of specific investments for various entities and programs. These include $27.8 million in government medium-term funds (LAIF and CAMP) for various districts, $31.3 million in investments managed by PFM for various county programs (Landfill Closure, Lease Revenue Bonds, etc.), $15.4 million in section 115 trusts held by the company PARS for County OPEB (Other Post Employment Benefits) and pension purposes, and $74.6 K in cash in bank. The Non-pooled investment holdings are shown in Attachment C (Non-pooled Holdings).

In their quarterly investment review for the 1st quarter of calendar year 2019, PFM recommends maintaining diversification among investment grade sectors with a tilt toward higher grade corporate bonds given their income-producing potential. The Federal Reserve has put on hold interest rate hikes and the market’s current outlook projects the potential for lower future interest rates, PFM will maintain a neutral duration posture in the portfolio relative to the benchmark.

CASH BALANCES

Attachment D (Cash Balances) depicts the cash balances of the three major operation funds of the County, and their combined balance. On March 31, 2019, this unaudited balance was $34.6 million, which decreased by $10.6 million from the prior quarter due to normal operating revenues and expenditures.

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 Service's 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	bporter	05/16/2019 11:08 AM
County Counsel	Hope Welton	05/16/2019 11:09 AM
Form Started By: eburnham		Started On: 04/19/2019 10:24 AM
Final Approval Date: 05/16/2019