|California Government Code Section 53607 and Cypress Municipal Code Section 2-18(f) requires the submission of a monthly investment report to the City Council. As of September 30, 2020, the City had $155.5 million (current market value) in cash and investments and the interest return (yield) on the public funds investments was 0.66%. As required by government code, all investments are in conformity with the City's investment policy and sufficient cash flows are available to meet the next six months of estimated expenditures.
The attached Summary of Cash and Investments presents the investments held by the City of Cypress as of September 30, 2020. The Investment Reports consists of the following five summaries:
As mentioned previously, the City had $155.5 million (current market value) in cash and investments at September 30, 2020. The investments consisted of Investment Pools of $151.2 million, and the City's bank accounts held $4.3 million.
- Summary of Cash and Investments - Provides the total portfolio of the City.
- Changes in Cash and Investments - Provides a two-month cash flow analysis by fund type. These separate fund types allow for restricted monies to be segregated and tracked separately. The total ending amount agrees to the current market value shown in the Summary of Cash and Investments.
- Investments at Market Value by Maturity Date - Provides a list of investments by maturity date, and an indication of the liquidity (ability to turn into cash) of the investments. The California Government Code restricts the type of investments eligible for public funds. The City’s Investment Policy further defines permitted investments. These restrictions in investment types and the terms of allowable investments result in limited yields on City investments.
- Interfund Investments - Shows the amount of loans between City funds. The only loan outstanding is from the Infrastructure Reserve Fund to the Cypress Recreation and Park District General Fund for an amount not to exceed $900,000 as reimbursement for costs incurred in the preliminary design of the Cypress Sports Park.
- Summary of Cash and Investments Held by Fiscal Agent and In Trust - Shows the investments held by fiscal agents for the benefit of bondholders of City-issued debt as well as investments held in trust by the Public Agency Retirement Services (PARS) for offsetting unfunded pension liabilities. The amounts held by fiscal agents are restricted to making future debt service payments and the pension trust amounts can only be used for future retirement obligations. The legal restrictions on the allowable investment types are less restrictive than those in the City's portfolio, which provides the potential for higher yields to be earned on these investments held by fiscal agents and in trust.
The majority of the investment portfolio is with the State Investment Pool (Local Agency Investment Fund or LAIF) in which the State’s investment experts provide a diversified investment pool for local agencies to invest. By using the combined size of the participating cities and agencies, the State Pool can provide better yield, liquidity and investment knowledge than otherwise would be available to a single entity. The City has also invested in CalTRUST, which is a joint powers authority (JPA) investment pool option for public agencies. Expanding the pooled investment options provides flexibility and liquidity until market yields increase.
The amount of cash in the City’s checking accounts fluctuates based on the maturity of investments, daily cash receipts, and when vendors and employees are paid. The daily balances maintained in the checking accounts provide credits which offset monthly bank charges. In addition to the Federal Depository Insurance Corporation (FDIC) which insures the first $250,000, excess checking deposits are secured by banks, government, or mortgage securities valued between 110% and 150% of the deposits.