Eastern Municipal Water District
California

Treasurer Report
3500
Received and Filed
Mar 20, 2019 9:00 AM

Treasurer's Report for December 2018

Information

Department:FinanceSponsors:
Category:Treasurer's ReportMeeting Workflows:Board Admin Committee Workflow

Background

Attached is the Portfolio recap for December 2018. Some of the highlights are:

 

1.              The overall portfolio average interest rate was 2.16 percent in December 2018, an increase of 0.05 percent from November 2018.

2.              The market value of the portfolio, including District holdings and debt proceeds, for December 2018 was $526.9 million versus a book value of $528.9 million.  November 2018 market value was at $525.6 million versus a book value of $528.5 million.

 

As shown in the comparison below, the interest rates for three-year treasury bills ended the month of December 2018 at 2.63 percent, or six basis points higher than the rate in November 2018.  The yield curve continued to flatten, meaning that the yield on short term maturities is nearly the same as those of medium-term maturities.  This is due to the markets concern for continued interest rate increases by the Fed in 2019.  In 2018, the Fed increased rates four times and are likely to increase rates two more times in 2019.  The Districts investment strategy remained conservative for December 2018, with 48 percent of the Portfolio invested in securities, which mature within 60 days to ensure liquidity and protect principal.  The Districts investment strategy during Fiscal Year 2018-19 emphasizes greater diversification and relatively short duration risk with purchases of Federal Agencies (target of 32 percent of portfolio), highly rated corporate notes (target of 13 percent of portfolio) and municipal bonds (target of 17 percent of portfolio).  Investment targets are one to two-year maturities to reduce the impact of interest rate escalation while providing reasonable returns to meet the Districts objectives.

 

December 2018

November 2018

LAIF =

2.29%

LAIF =

2.21%

3 year Treasury =

2.46%

3 year Treasury =

2.83%

3-yr Treasury (Rolling 12-mo Avg.) =

2.63%

3-yr Treasury (Rolling 12-mo Avg.) =

2.57%

5 year Treasury =

2.51%

5 year Treasury =

2.84%

 

District Average Portfolio =

 

2.16%

 

District Average Portfolio =

 

2.09%

District Portfolio Days to Maturity =

216   

District Portfolio Days to Maturity =

212 

 

Financial/Strat Plan/Enviro

FINANCIAL IMPACT:

 

None

 

STRATEGIC PLANNING GOAL/OBJECTIVE:

 

Financial Stability: Enhance and maintain the District’s strong financial position and credit quality by identifying and implementing specific opportunities to improve underlying financial metrics.

 

ENVIRONMENTAL IMPACT:

 

None

Recommendation

Receive and file

Meeting History

Mar 7, 2019 4:00 PM  Board Administrative Committee Regular Meeting
draft Draft
RESULT:DISCUSSED AT COMMITTEE
Mar 20, 2019 9:00 AM  Board of Directors Regular Meeting
draft Draft
RESULT:RECEIVED AND FILED