Receive and file the Yolo County Treasurer's Report on Investments for the quarter ended March 31, 2024. (No general fund impact) (Haynes/Xiong)

Receive and file the Yolo County Treasurer's Report on Investments for the quarter ended March 31, 2024.

The County Treasury investment portfolio is summarized in Attachment A (Investment Summary) and includes the Treasurer's Investment Pool and the investment accounts managed by the Treasury that are not pooled together for investment returns. The pooled portfolio includes county funds, deposits from special districts, and school districts totaling $955 million as of March 31, 2024.  

The portfolio consisted of 1.8% ($16.8 million) in cash at bank, 49% ($467.5 million) in short-term investments in government investment pools, such as the Local Agency Investment Fund (LAIF) and the California Asset Management Program (CAMP), and 49.3% ($470.3 million) in an investment pool that is actively managed by professional investment advisor PFM Asset Management, LLC (PFM). These investments consist mostly of fixed income securities as authorized by government code, such as: U.S. Treasuries; securities issued by federal agencies, such as Fannie Mae, Freddie Mac, and Federal Home Loan Bank; corporate notes; commercial papers; and certificates of deposit.

The details of investment in the pooled portfolio along with the investment performance are shown in Attachment B (PFM Performance Report) while the non-pooled holdings are shown in Attachment C (Non-pooled Holdings).  The non-pooled portfolio of $123.1 million consists of specific investments for various entities and programs. These include $38.1 million in government medium-term funds (LAIF and CAMP) for various districts and the 2017 Lease Revenue Bonds, $27.7 million in investments managed by PFM for various county programs (Landfill Closure, Cache Creek, etc.), $57.2 million in section 115 trusts held by PARS for County OPEB (Other Post-Employment Benefits) and pension funding, and $127 thousand in cash in money market accounts.

In their quarterly investment review for the 1st quarter of calendar year 2024, PFM continued to monitor the activities of the Federal Reserve (Fed), particularly paying close attention to possible rate cuts that were projected to begin in 2024. While at least three rate cuts are still projected for the current calendar year, the Fed kept the overnight target rate at its current range of 5.25% to 5.50% at their March 20, 2024 meeting, citing they need more confidence that inflation is moving toward its 2% target before the first rate cut. Inflation has remained relatively flat above 3%. PFM will continue to evaluate all opportunities as they seek to safely add value to the County’s portfolio while maintaining a strong sense of safety and risk management. The County’s portfolio is aligned with a 1–5 year benchmark strategy.

CASH BALANCES
Attachment D (Cash Balances) depicts the cash balances of the three major funds of the County and their combined balance. On March 31, 2024, this unaudited balance was $31 million. The General Fund encompasses multiple operating and revenue funds, including the General Fund, Health and Human Services Operation, Public Health, and Social Services. The cash deficit depicted on the graph in the General Fund is due to transfers between Health and Human Services’ operations and revenue funds that have not been completed.  It is anticipated that transfers will be processed in the coming month and should resolve the deficit.  Overall, the combined cash balance decreased by $47.1 million. The decrease is due primarily to General Fund transfers to other funds, IGT payment, and net operating revenues and expenditures.

Other agencies having deposits in the pool include: school districts, special districts and cities. A copy of the report is posted and available on the Department of Financial Services' website. The Financial Oversight Committee reviews investment performance quarterly. All reports from the County's investment advisor PFM Asset Management LLC are available in the County Treasurer's office.

Not applicable.