How Yorba Linda's city and water district governments invest revenue they receive

All of the various taxes and fees residents pay to keep Yorba Linda's city government and independent water district functioning aren't just sitting in checking accounts waiting to be paid out in salaries and other expenses incurred in providing services.

The elected officials who lead these public agencies allow the managers they hire to oversee operations to put portions of the revenue received into short-, medium- and long-term invest-ments to earn returns on the cash held in reserve.

But unlike many private investor accounts, the types of accounts utilized by the city and water district are risk-adverse, as required by state regulations and policies adopted by City Council members and water board directors.

Instead of individual stocks, mutual funds, real estate trusts and a variety of other speculative investment vehicles, the local governmental ledgers are packed with a conservative blend of money market accounts, certificates of deposit, government bonds and securities, corporate notes and similar components.

Yorba Linda's city government has nearly $69 million and the Yorba Linda Water District close to $38 million in cash and investment holdings, according to the most recent reports available.

Yields on the city's investments range from 0.42 percent for cash and money market accounts to 2.88 percent for a U.S. government agency collateralized mortgage investment. The bulk of the city's portfolio, close to $45 million, is managed by a private investment company.

The Philadelphia-based Public Financial Management firm, with an office in Los Angeles, has the city in nine types of medium-term investments that yield an average 2.29 percent. Yields on the individual investment types range from 1.64 percent to 2.88 percent.

Other city investment vehicles, both short-term, include the California Asset Management Program ($13.2 million invested at a 2.36 percent yield) and the Local Agency Investment Fund ($6.8 million invested at a 2.21 percent yield).

A Bank of the West account (with a recent $3 million total) funds city operations, while a Bank of America account (nearly $400,000 recently) funds Black Gold golf course operations. A US Bank account recently totaled about $500,000 for “investment safekeeping.”

The bulk of the Yorba Linda Water District's portfolio, a bit over $31.5 million, is managed by CalTRUST and the Local Agency Investment Fund. Short- and long-term investments in the former earn 2.54 and 2.73 percent yields, respectively, and the latter has a 2.29 percent yield.

The district keeps $3.7 million in money market accounts, mostly with US Bank, and about $2 million in certificates of deposit in nine banks that earn an average 1.74 percent yield with ma-turities ranging from May of this year to March of 2022.

A checking account at Wells Fargo Bank recently totaled some $664,000. Overall yield for all of the district's investments is 2.42 percent.