The Monthly Report of Investments is prepared in accordance with Government Code Sections (GCS) 41004 and 53607 and contains information on the City's investment activities for the month of July. 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 long-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 an Investment Information Summary and Monthly Account Statement prepared by Chandler for invested funds. The book value is the cost of investments, plus or minus amortization/accretion. As of July 31, 2023, the total market value of the managed investment portfolio, including accrued interest, was $94,023,502.00 as compared to $93,688,033.91 at June 30, 2023. The weighted average investment yield for July 31, 2023 was 2.08%, which was slightly more than the prior month. The City’s Local Agency Investment Fund (LAIF) had a total market value, including accrued interest of $1,711,369.25 at July 31, 2023. This brings the total value of the City’s investment portfolio as of July 31, 2023 to $95,734,871.25 as compared to $113,565,749.57 at June 30, 2023.
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 July 31, 2023, the market value of the PARS account, including short-term cash and accrued interest was $10,636,100.91 compared to $10,359,484.38 from the prior month. All other restricted cash investments (bond reserve accounts), including short-term cash and accrued interest, was $662,236.80 in comparison to $2,875,221.05 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. All securities are held in the name of the City of Brea. 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 $17,830,878.32. The decrease was primarily due to a pre-payment of the annual Unfunded Accrued Liability (UAL) to CalPERS in the amount of $11,395,469 and the annual payment to Cal Domestic Water Company for the purchase of over entitlement water in the amount of $3,089,355.02. Other expenditures included payments to the California Insurance Pool Authority and Aon Risk Insurance Services for insurance coverage premiums. The City's PARS account increased by $276,616.53 due to market rate adjustments. The City's bond reserve accounts decreased by $2,212,984.25 due to debt service payments for the 2014 and 2019 Water Revenue Bonds as well as the 2020 Water Revenue Refunding Bonds. |