Eastern Municipal Water District
California

Treasurer Report
3739
Received and Filed
Dec 11, 2019 9:00 AM

Treasurer's Report for October 2019

Information

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

Background

Attached is the Portfolio recap for October 2019.  Some of the highlights are:

 

1.      The overall portfolio average interest rate was 2.03 percent in October 2019, a decrease of 0.08 percent from September 2019.

2.      The market value of the portfolio, including District holdings and debt proceeds, for October 2019 was $503.7 million versus a book value of $502.3 million.  September 2019 market value was $497.7 million versus a book value of $496.6 million.


As shown in the comparison below, the interest rates for three-year treasury bills ended the month of October 2019 at 2.14 percent, or eleven basis point lower than the rate in September 2019.  The U.S. Treasury bond yield curve is no longer inverted but has started to flatten, meaning that the yield on short term maturities is similar to those of medium-term maturities.  The Federal Reserve lowered interest rates by 0.25 percent in July 2019 for the first time since 2008. They have since lowered rates by another 0.25 percent each in September and October for a total of three interest rate reductions for 2019.  To safely navigate this turbulent and dynamic investment market, the Districts investment strategy is focused on conservative, short-term securities, with 42 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 2019-20 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 volatility while providing reasonable returns to meet the Districts objectives.

 

October 2019

September 2019

LAIF =

2.19%

LAIF =

2.28%

3 year Treasury =

1.52%

3 year Treasury =

1.56%

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

2.14%

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

2.25%

5 year Treasury =

1.51%

5 year Treasury =

1.55%

 

District Average Portfolio =

 

2.05%

 

District Average Portfolio =

 

2.11%

District Portfolio Days to Maturity =

269   

District Portfolio Days to Maturity =

227 

 

The entire Treasurers report will be available upon request at the December 11, 2019 Board meeting.

Financial/Strat Plan/Enviro

FINANCIAL IMPACT:

 

None

 

STRATEGIC PLANNING GOAL/OBJECTIVE:

 

Financial Stability: Enhance and maintain EMWD’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

Dec 9, 2019 7:30 AM  Board Administrative Committee Regular Meeting
draft Draft
RESULT:REVIEWED AT COMMITTEE
Dec 11, 2019 9:00 AM  Board of Directors Regular Meeting
draft Draft
RESULT:RECEIVED AND FILED