FROM: Robert Thompson, General Manager
Originator: Wally Ritchie, Director of Finance
SUBJECT:
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CONSOLIDATED FINANCIAL REPORT FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2023
end
GENERAL MANAGER'S RECOMMENDATION
recommendation
RECOMMENDATION:
Receive and file the Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2023.
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BACKGROUND
Included in this consolidated report are the following quarterly financial reports for the period ended September 30, 2023:
• First 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 first quarter ended September 30, 2023.
• First Quarter Treasurer’s Report
This section reports on financial portfolio performance with respect to OC San’s funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. 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, Chandler Asset Management. Additionally, the Section 115 Trust quarterly performance report is included. The Section 115 trust is administered by Public Agency Retirement Services (PARS), managed by HighMark Capital, and was established to prefund pension obligations.
• First 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 first quarter treasurer’s report contained within the Consolidated Financial Report for the first quarter ended September 30, 2023 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 September 30, 2023
|
|
Liquid Operating Monies (%) |
Long-Term Operating Monies (%) |
|
|
Total Rate of Return |
Benchmark |
Total Rate of Return |
Benchmark |
|
3 Months |
1.45 |
1.31 |
0.31 |
0.25 |
|
6 Months |
2.57 |
2.50 |
-0.11 |
-0.45 |
|
9 Months |
3.75 |
3.60 |
1.54 |
1.34 |
|
12 Months |
4.68 |
4.47 |
2.62 |
2.44 |
|
Annualized Since Inception 30 Nov 2014 |
1.34 |
1.26 |
1.06 |
0.94 |
• 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 $139.3 M $750.6 M
Market Value $141.3 M $714.0 M
• Modified duration of the portfolio compared to the Benchmark:
Liquid Operating Long-Term
OC San Policy < 0.50 < 5.00
Benchmark 0.16 2.49
Portfolio 0.22 2.42
• Dollar change in value of the portfolio for a one percent (1%) change in interest rates:
Liquid Operating - $316,650
Long- Term - $17,311,044
• None of the portfolios are currently invested in reverse repurchase agreements.
• The percent of the Liquid Operating Monies portfolio maturing within 90 days: 53.8%
• Average portfolio credit quality:
Liquid Operating - AAA/Aaa
Long- Term - AA/Aa1
• 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 - 0.8%
|
|
Cost |
Maturity Date |
Moody |
S&P |
Fitch |
|
AMRESCO Residential Securities 1999-1 A |
$77,642.50 |
6/25/2029 |
NR |
BB+ |
A |
|
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 the 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:
• First Quarter Financial Report for period ended September 30, 2023