FROM: Robert Thompson, General Manager
Originator: Wally Ritchie, Director of Finance
SUBJECT:
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CONSOLIDATED FINANCIAL REPORT FOR THE THIRD QUARTER ENDED MARCH 31, 2024
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GENERAL MANAGER'S RECOMMENDATION
recommendation
RECOMMENDATION: Recommend to the Board of Directors to:
Receive and file the Orange County Sanitation District Third Quarter Financial Report for the period ended March 31, 2024.
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BACKGROUND
Included in this consolidated report are the following quarterly financial reports for the period ended March 31, 2024:
• Third Quarter Budget Review
The Budget Review Summary provides the Directors, staff, and general public with a comprehensive overview of the financial results of the Orange County Sanitation District (OC San) through the third quarter ended March 31, 2024.
• Third Quarter Treasurer’s Report
This section reports on financial portfolio performance with respect to OC San’s funds. A performance summary table can be found in the Additional Information section of this agenda report. The report also contains information on the U.S. and global economic outlook from OC San’s investment manager, Insight Investment. Additionally, the Section 115 Trust performance report is included. The Section 115 trust is administered by Public Agency Retirement Services, managed by PFM Asset Management, and was established to prefund pension obligations.
• Third Quarter Certificates of Participation (COP) Report
The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history.
RELEVANT STANDARDS
• Quarterly financial reporting
ADDITIONAL INFORMATION
The third quarter treasurer’s report contained within the Consolidated Financial Report for the third quarter ended March 31, 2024 is being submitted in accordance with OC San’s investment policy that requires the report be submitted to the governing body following the end of each quarter and includes the following information:
• Performance results in comparison with the ICE BAML 3-month treasury bill index for the liquid operating portfolio; and the ICE BAML Corp./Govt. 1-5 Year Bond index for the long-term portfolio as identified in the investment policy; and the time-weighted total rate of return for the portfolio for the prior three months, six months, nine months, twelve months and since inception compared to the Benchmark returns for the same periods:
Portfolio Performance Summary
As of March 31, 2024
|
|
Liquid Operating Monies (%) |
Long-Term Operating Monies (%) |
|
|
Total Rate of Return |
Benchmark |
Total Rate of Return |
Benchmark |
|
3 Months |
1.34 |
1.37 |
0.27 |
0.20 |
|
6 Months |
1.38 |
1.39 |
1.72 |
1.77 |
|
9 Months |
1.36 |
1.39 |
1.25 |
1.28 |
|
12 Months |
5.36 |
5.52 |
3.42 |
3.26 |
|
Annualized Since Inception |
2.50 |
2.25 |
3.72 |
3.58 |
• A listing of individual securities held at the end of each reporting period (see the detailed listings of each security contained within the report).
• Cost and market values of the portfolios:
Liquid Operating Long-Term
Cost $140.0 M $758.9 M
Market Value $141.1 M $735.0 M
• Modified duration of the portfolio compared to the Benchmark:
Liquid Operating Long-Term
OC San Policy < 0.50 < 5.00
Benchmark 0.16 2.60
Portfolio 0.18 2.48
• Dollar change in value of the portfolio for a one percent (1%) change in interest rates:
Liquid Operating - $254,068
Long- Term - $18,154,138
• None of the portfolios are currently invested in reverse repurchase agreements.
• The percent of the Liquid Operating Monies portfolio maturing within 90 days: 86.9%
• Average portfolio credit quality:
Liquid Operating - AA
Long-Term - AA
• Percent of portfolio with credit ratings below “A” by any rating agency and a description of such securities:
Liquid Operating - Percent of portfolio - 0.0%
Long-Term - Percent of portfolio - 0.75%
|
|
Cost |
Maturity Date |
Moody |
S&P |
Fitch |
|
Virginia Electric Power Corp Callable Note |
$5,736,523.40 |
5/15/2027 |
A2 |
BBB+ |
A |
• All investments are in compliance with the investment policy and the California Government Code, except for the following Lehman Brother holdings that OC San is pursuing collection through the bankruptcy court:
Lehman Brothers Note-Defaulted $600,000 par value purchased 9/19/2008
Lehman Brothers Note-Defaulted $2,000,000 par value purchased 9/18/2008
• Sufficient funds are available for OC San to meet its operating expenditure requirements for the next six months.
ATTACHMENT
The following attachment(s) may be viewed on-line at the OC San website (www.ocsan.gov) with the complete agenda package:
• Third Quarter Financial Report for period ended March 31, 2024