HomeMy WebLinkAbout11-Consideration of Authorizing Investment in the Placer County Treasurer's Investment PoolMau
TRUC EE D 11 NE
Public Utility District
ACTION
To: Board of Directors
From: Robert Mescher
Date: May 01, 2013
Subject: Consideration of Authorizing Investment in the Placer County
Treasurer's Investment Pool
1. WHY THIS MATTER IS BEFORE THE BOARD
District Code requires the Treasurer to consult with the Board of Directors when
recommending any of the 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 may penalize the District when other investment yield rates
recover as they have in recent months. Below is LAIF's historical yield from 2006 to
2013:
2006
4.7%
2007
5.2%
2008
3.2%
2009
1.2%
2010
0.5%
2011
0.4%
2012
0.4%
2013
0.3%
3. NEW INFORMATION
The Placer County Treasurer manages the Placer County Treasurer's Investment Pool
(PCTIP). The District is able to participate in the PCTIP because its service areas
include a portion of Placer County. The average yield of the PCTIP for the past eight
months is 1.5%, which is more than 100 basis points higher than LAIF. The allocation
of the PCTIP investments are:
70% US treasury and federal agency coupons; certificates of deposits; and
high -rated commercial paper
20% Commercial notes
10% Local agency bonds
Attachment 1 is the PCTIP portfolio report as of February 28, 2013.
Attachment 2 is the proposed resolution to authorize the Treasurer to invest in the
PCTIP.
Attachment 3 is the PCTIP deposit and withdrawal authorization form.
4. FISCAL IMPACT
The District currently invests about $20,000,000 in LAIF. If the District reallocates a
portion of that investment into PCTIP, it would earn about $1,000 more per month per
$1,000,000 invested.
5. RECOMMENDATION
A) Adopt the resolution authorizing the investment in the Placer County Treasurer's
Investment Pool. (Attachment 2)
B) Direct the President to sign the Authorization for Deposit and Withdrawal of
Voluntary Invest Funds from the Placer County Treasurer's Investment Pool form
(Attachment 3) which will authorize the General Manager, Treasurer, and Assistant
Treasurer to deposit and withdraw funds for the District.
Robert Mescher
Administrative Services Manager
Michael D. Holley
General Manager