Title
Receive and accept the Treasurer’s Report of Investments for the quarter ending December 31, 2024.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Receive and accept the Treasurer’s Report of Investments for the quarter ending December 31, 2024.
SUMMARY:
Government Code Section 53646 (b) (1) states the Treasurer may submit a quarterly report of investments. The following discussion of economic and market conditions along with attached exhibits support investment activity during the October - December period.
DISCUSSION:
The U.S. economy is on track for a soft landing, with inflation and labor markets performing as expected, even though progress has been slower recently. Economic growth is still strong, mainly due to a resilient consumer, but changes in fiscal policy could affect future growth and inflation. The Federal Reserve continued to cut interest rates, lowering them by 50 basis points to 4.25% - 4.50% during the quarter. The Federal Reserve December forecast suggests 50 basis points of cuts in 2025, which is an overall more gradual pace of easing rates than previously projected as inflation continues to be a challenge.
On December 31, 2024, the County of Monterey investment portfolio contained an amortized book value of $3,251,449,949 spread among 289 separate securities and funds. The par value of those funds was $3,284,468,019 with a market value of $3,248,901,782 or 100% of amortized book value. The portfolio’s effective rate of return for the period was 4.30%. The portfolio generated an estimated quarterly earnings of $33,074,476, which will be distributed proportionally to all agencies participating in the investment pool. The investment portfolio had a weighted average maturity of 485 days. The County Treasury continues to achieve safety, liquidity, and yield goals by balancing shorter-term debt and longer-term debt given investment opportunities in the current market environment.
The investment portfolio follows all applicable provisions of state law and the adopted Investment Policy. Market value pricings were obtained through resources such as Bloomberg LLP, US Bank, and live-bid pricing of corporate securities.
OTHER AGENCY INVOLVEMENT:
A copy of this report will be distributed to all agencies participating in the investment pool. The Treasury Quarterly Reports are also posted on the County Treasurer’s website. A monthly report of investment transactions is provided to the Board of Supervisors as required by Government Code 53607.
FINANCING:
The investment portfolio contains sufficient liquidity to meet all projected expenditures over the next six months. Investment earnings in the General Fund appear to be trending at a rate that will exceed the FY 2025-26 budgeted total.
BOARD OF SUPERVISORS STRATEGIC INITIATIVES:
This recommendation supports the Administration initiative by providing transparency and accountability in the management of County funds in the Treasurer’s investment portfolio.
__Economic Development
X Administration
__Health & Human Services
__Infrastructure
__Public Safety
Prepared by: Lupe Reyes, Chief Deputy Treasurer-Tax Collector, x5415
Reviewed by: Jake Stroud, Assistant Treasurer-Tax Collector, x5828
Approved by: Mary A. Zeeb, Treasurer-Tax Collector, x5015
Attachments:
Exhibit A - Investment Portfolio Review 12.31.2024
Exhibit B - Portfolio Management Report 12.31.2024
cc:
Auditor-Controller - Internal Audit Section
All depositors
County Administrative Office
County Counsel