HomeMy WebLinkAbout13 Utah Public Treasurers Investment Fund Agenda Item # 13
ACTION
To: Board of Directors
From: Robert Mescher
Date: September 10, 2014
Subject: Consideration of Participating in the Utah Public Treasurers'
Investment Fund
1. WHY THIS MATTER IS BEFORE THE BOARD
District Code requires the Treasurer to consult with the Board of Directors when
recommending any new investments. Each investment must be authorized by the
Board of Directors.
2. HISTORY
The Districted adopted an investment policy in 2006 which allowed for investments in
instruments permitted by the California Government Code and the investments
permitted by the trust agreements on District financing, including investments in
California's pooled Local Government Investment Fund (LAIF). This pooled found has
historically provided acceptable yield on investment, while maintaining an acceptable
level of investment safety and liquidity. LAIF is a conservative and stable fund. The
return on investment is slow to change. This benefits the District when other
investment yield rates suddenly fall as they did in 2008. However, this has penalized
the District as other investment yield rates recover as they have in the past year.
Below is LAIF's historical yield from 2006 to 2014:
2006 4.7%
2007 5.2%
2008 3.2%
2009 1.2%
2010 0.5%
2011 0.4%
2012 0.4%
2013 0.3%
2014 0.2%
In 2013, the Board authorized investment in Placer County Treasurer's Investment
Pool (PCTIP) which has yielded 1.3% in the past year. The District is able to
participate in the PCTIP because its service areas include a portion of Placer County.
The Placer County Treasurer manages the PCTIP.
3. NEW INFORMATION
The District is a member of Utah Associated Municipal Power Systems (UAMPS) and
is eligible to participate in the Utah Public Treasurers' Investment Fund (UPTIF) by
transferring funds to UAMPS to invest in the PTIF for the benefit of the District.
The UPTIF invests primarily in investment-grade corporate notes, top tier commercial
paper, money market mutual funds and U.S. government agency obligations. The
UPTIF invests only in securities authorized by the Utah Money Management Act which
is consistent with District Code and California Government Code.
Although the UPTIF's primary investment objective is safety of principal, it is not FDIC-
insured and may lose value.
UPTIF's historical yield for the past four years were about twice that of LAIF's yields for
the same periods:
2011 0.7%\par
2012 0.7%\par
2013 0.5%\par
2014 0.5%\par
The UAMPS' treasurer has indicated that UAMPS is willing to invest the District's
funds and funds could be deposited and withdrawn once per month.
4. FISCAL IMPACT
The District currently invests $15 million in LAIF and $10 million in PCTIP.
For every million dollars invested in Utah's UPTIF instead of California's LAIF, the
District would yield $3,000 more per year without risking safety of investment or losing
the liquidity of cash.
5. RECOMMENDATION
Authorize the District Treasurer to transfer up to $10,000,000 to Utah Associated
Municipal Power Systems for the purpose of investing the funds into Utah's Public
Treasurers' Investment Fund for the benefit of the District.
Robert Mescher Michael D. Holley
Administrative Services Manager General Manager