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 August 2022. 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 investments and functions like a savings account. The City’s managed investment portfolio is for longer-term investments, which are managed through Chandler Asset Management (Chandler). Together, the short and long-term investment accounts represent the City’s investment portfolio.
Attachment A includes a Cash and Investment Information Summary and Monthly Account Statement prepared by Chandler for invested funds. The book value is the cost plus or minus amortization/accretion. As of August 31, 2022, the total market value of the managed investment portfolio, including accrued interest, was $95,108,275.80 as compared to $96,172,806.98 at July 31, 2022. The weighted average investment yield for August 31, 2022 was 1.52%, which was higher than the prior month. The City’s Local Agency Investment Fund (LAIF) had a total market value, including accrued interest of $6,935,069.60 at August 31, 2022. This brings the total value of the City’s investment portfolio as of August 31, 2022 to $103,107,876.58 as compared to $103,107,876.58 at July 31, 2022.
The City has restricted cash and investments held in the post-employment benefits trust account administered by PARS (PARS account), which is managed by HighMark Capital (HighMark) and the City's various bond reserve accounts which are managed by Chandler. Attachment A includes a monthly statement from US Bank for the PARS account as well as a portfolio report from Chandler for each bond reserve account that is invested. As of August 31, 2022, the market value of the PARS account, including short-term cash and accrued interest was $9,752,337.86 compared to $10,028,724.53 from the prior month. All other restricted cash investments (bond reserve accounts), including short-term cash and accrued interest, was $1,335,756.01 in comparison to $667,028.99 from the prior month.
Pursuant to the City's investment policy, with the exception of LAIF, direct time certificates of deposit and money market mutual funds, all City investments are held by third-party custodians. The Bank of New York Mellon Trust Company, N.A. (BNY) holds accounts managed by Chandler and US Bank holds the PARS account managed by HighMark, which acts as an agent of the City. These financial institutions are not a counterparty to the investment transaction and all securities are held in the name of the City of Brea. The custodial accounts have been reconciled to the par value of the applicable portfolio report 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 August, the total value of the City's investment portfolio decreased by $4,967,171.01. The decrease was primarily due to various operating expenditures incurred during the month, which included progress payments for CIP Projects, utility payments, a payment to Western Golf Properties, a payment for construction management, inspection and professional services, and funds transferred to our bond trustee in anticipation of debt service payments. The City's PARS account decreased by $276,386.67 due to market rate adjustments. The City's bond reserve accounts increased by $668,727.02 due to debt service payments sent to our bond trustee for the 2017 Brea Plaza Public Improvements CFD Bonds and the 2019 Olinda Ranch Public Improvements CFD Bonds. |