The Monthly Report of Cash and Investments is in accordance with Government Code Sections (GCS) 41004 and 53607 and contains information on the cash and investment activities for the month of July 2020. Cash for day-to-day activities is deposited in the demand and interest-bearing checking accounts. The Local Agency Investment Fund (LAIF) is used for short term investment and functions like a savings account. The City’s managed investment portfolio is for longer-term investments which are managed through Chandler Asset Management. Together, the short and long-term investment accounts represent the City’s investment portfolio.
Government Code Section 41004 requires a monthly report of cash receipts, disbursements and cash balances by fund be filed with the City Council. This information is now included as part of this monthly report. It is noted, that for the months following the end of each fiscal year, the cash balances by fund are subject to change due to year-end closing and final audit. Additionally, it is noted that certain funds may show deficit cash balances. Typically, this occurs in funds that receive grants and/or budgeted transfers from other funds. From time to time, funds with grant reimbursements may have short-term negative balances until those grant funds are received. Some examples include the Community Development Block Grant (CDBG) Fund (Fund 240) and the Capital Improvement Project (CIP) Fund (Fund 510). Also, budgeted transfers from one fund to another are typically made evenly on a monthly basis over the fiscal year which may result in negative cash balances from time to time due to the timing of other revenues and expenditures. For example, the budgeted transfer from the General Fund to the Paramedic Tax Fund in support of paramedic services is made evenly over twelve months; however, the majority of the Paramedic Tax is received between November – April. This results in the Paramedic Tax Fund being negative from time to time under the current procedures. Over the next few months, staff will be evaluating the timing of certain transfers and make changes in our process as needed.
Attachment A includes a Cash and Investment Information Summary and Monthly Account Statements prepared by Chandler Asset Management for invested funds. The book value is the cost plus or minus amortization/accretion. As of July 31, 2020, the total market value of the managed investment portfolio, including accrued interest, was $89,875,746.11 as compared to $89,641,300.74 at June 30, 2020. The weighted average investment yield for July 2020 was 1.92%, which was slightly lower than the prior month. The City’s Local Agency Investment Fund (LAIF) had a total market value, including accrued interest of $9,983,454.92 at July 31, 2020. This brings the total value of the City’s investment portfolio as of July 31, 2020 to $99,859,201.03 as compared to $114,596,976.35 at June 30, 2020.
Restricted cash and investments are held in the post-employment benefits trust account administered by PARS (PARS account) and managed by HighMark Capital and the City’s various bond reserve accounts which are managed by Chandler Asset Management. Attachment A includes a monthly statement from US Bank for the PARS account as well as a portfolio report from Chandler Asset Management for each bond reserve account that is invested. As of July 31, 2020, the market value of the PARS account, including short-term cash and accrued interest was $9,035,668.42 as compared to $8,744,442.59 from the prior month. All other restricted cash investments (bond reserve accounts), including short-term cash and accrued interest, was $1,183,183.02 in comparison to $3,315,055.10 from the prior month.
All City investments are GASB rated No. 1, where the custodian (The Bank of New York Mellon Trust Company, N.A.) acts as an agent of the City, and is not a counter party to the investment transaction, and all securities are held in the name of the City of Brea. The custodial account at Bank of New York and account records with Chandler Asset Management have been reconciled to par value for the month. The City of Brea has sufficient cash flow to meet its expected expenditures for the next six months. |
| During the month of July, the total value of the City's investment portfolio decreased by $14,737,775.32. This is primarily due to pre-payment of the annual Unfunded Accrued Liability (UAL) to CalPERS as well as the annual payment to Cal Domestic Water Company for the purchase of over entitlement water for the prior fiscal year. The City's PARS account increased by $291,225.83 due to market rate adjustments. The City's bond reserve accounts decreased by $2,131,872.08 due to debt service payments for the 2014 and 2019 Water Revenue Bonds that were due due on July 1, 2020. |