The URL can be used to link to this page

2007 10 09 IABI TIIN I Hd `I AGENDA INVESTMENT ADVISORY BOARD Special Meeting Finance Conference Room 78-495 Calle Tampico- La Quinta, CA 92253 October 9, 2007 • 4:30 P.M. I CALL TO ORDER a. Pledge of Allegiance b. Roll Call II PUBLIC COMMENT- (Thia is the time set aside for public comment en any matter not achedulvd on the agenda.) III CONFIRMATION OF AGENDA IV CONSENT CALENDAR Approval of Minutes of Meeting on September 13, 2007 for the Investment Advisory Board. V BUSINESS SESSION A. Transmittal of Treasury Report for August, 2007 VI CORRESPONDENCE AND WRITTEN MATERIAL, A. Month End Cash Report - September 2007 B. Pocled Money Investment Board Report — July 2007 C. Discussion of City Council Meeting dated September 18, 2007 VII BOARD MEMBER ITEMS Vill ADJOURNMENT P.O. Box 1504 • L.% Qu)n"rA, CALIPORNIA 92247-1504 78-495 CALLF TAMPICO • L.t Quiz)A, CALIFORNIA 92253 (760) 777-7000 -FAX (760) 777-7101 INVESTMENT ADVISORY BOARD Business Session: A Meeting Date: October 9, 2007 IMIAMMIX Transmittal of Treasury Report for August 31, 2007 BACKGROUND: Attached please find the Treasury Report for August 31, 2007. RECOMMENDATION: Review, Receive and File the Treasury Report for August 31, 2007. Jonn M. Falconer, Finance Director MEMORANDUM TO' La Quinta City Council FROM: John M. Falconer, Finance Directorrireasurer SUBJECT Treasurer's Report for August 31, 2007 DATE. September 30, 2007 Attached is the Treasurer's Report for the month ending August 31, 2007. The report is submitted to the City Council each month after a reconciliation of accounts is accomplished by the Finance Department. The following table summarizes the changes in investment types for the month. Investment Beginning Purchased Notes Sold/Matured Other Ending Change Cash (3) $ (1,508,655) $ 13,028,043 (1) $ 11,519,388 $ 13,028,043 tAIF 48,453,085 900,000 (1,500,000) (1) 47,853,084 (600,001) US Treasuries (2) 65,005,617 (10,000,000) 257,301 55,262,918 (9,742,699) US Gov't Sponsored Enterprises (2) 59,359,765 110,849 59,470,614 110,849 Commercial Paper (2) 25,834,778 (6,000,ODO) 105,359 19,940,137 (5,894,641) Corporate Notes 2,946,978 3.719 2,950,697 3,719 Mutual Funds 5,743,508 1 24,419 5,767,927 24,419 Total $ 205,835,076 $ 13,928,043 $ 17,475,551 $ 477,227 $ 202,764,765 $ 3,070,311 I certify that this report accurately reflects all pooled investments and is in compliance with the California Government Code, and is in conformity with the City Investment Policy As Treasurer of the City of La Quinta, I hereby certify that sufficient investment liquidity and anticipated revenues are available to meet the pools expenditure requirements for the next six months. The City of La Quinta used the Bureau of the Public Debt, U.S. Bank Monthly Statement and the Bank of New York Monthly Custodian Report to determine the fair market value of investments at month end !° 1 / 7 YR M. Falconer Date ce Director/T masurerr Footnote (1) The amount reported represents the net increase (decrease) of deposits and withdrawals from the previous month. (2) The amount reported in the other column represents the amortization of premium/discount for the month on US Treasury, Commercial Paper and Agency investments (3) The cash account may reflect a negative balance. This negative balance will be offset with transfers from other investments before warrants are presented for payment by the payee at the bank. 2 _O yN 6 i N L C C p C O O C C O Z Z 2 Z Z Z Z Z Z N p o W N Q C LL �NC Y O V q V V 9 C w EEEEE o �❑ n�0mm 8 p pEp TN w _ 0 0 0 0 0 - pO N W A N c= wxiwww Q o� m I9 Vl a— - 'uf O N a v v E O �^ �0 00QQ e o 0.. PX o y ci N N O 00 N M O 8 yN (� Q �' 88N 88N N N a001 'N YI N N Z Ulm nC; p O g 5525�� o eWsO�izm o80 od S{OrjO0poNOO o0pN �P' 08o880 N '00p P 8 p��" aoQ'3 N NmN OgZ wf a a.8 888g LL y EH88 ^� 8ON 88ON $ $ a�'2W IOV N(OVNmEpO INNN bN N N N E`c E E c h m u U m'� am 9 � aLLao: S SS= N N m c cm'Z E E E w w w EBY� 3 Treasurer's Commentary For the Month of August Cash Balances - The portfolio size decreased by $3.1 million. The major reasons for the decrease were construction payments for the City Hall expansion and the Vista Dunes Courtyard Homes project. Investment Activity - August saw a slow down in investment activity for the previous two months. The average maturity in days of the portfolio decreased by 20 to 109. The third week in August brought a sudden decline in interest rates based upon the sub -prime housing market disclosures of Country Wide Financial. This resulted in a sudden market increase in the City's portfolio market value. No investment transactions were done during this period of time with the Treasurer maintaining a higher level of funds in the Wells Fargo Treasury Money Market account to payment the September $1 1 million debt service payment. As a result, the sweep account earned a higher than normal $ 18,425 and the bank fees for the month were $ 1,738 which resulted in a net increase of $ 16,687 in real savings. Portfolio Performance - The overall portfolio performance decreased by four basis points from the prior month and ended at 5.08% for the month, with the pooled cash investments yielding 5.17%. The overall portfolio yield (including bond proceeds) was forty nine (49) basis points over the benchmark, which has decreased by twenty one (21) basis points from July. With the average maturity of 120 days, the portfolio yield should remain at these levels. The Treasurer has more of a barbell maturity schedule with the longer term investments helping to keep yields higher as interest rates may be falling. At this time last year, the portfolio was yielding 4.97% and the benchmark. was at 4.97% for no difference so we have made progress in meeting our benchmark. In the short term, the Treasurer has been investing more in LAIF because its rate declines slower in a declining rate environment and in high quality Commercial Paper. The Treasurer has not been investing in Treasury securities because of their low yield, except for bond proceeds to ensure that the funds are available for capital projects, e.g. SilverRock and Vista Dunes Courtyard Homes and the CVHC project at 48`" and Adams. Future Thoughts The Treasurer will continue to invest in short term maturities to take advantage of the yield curve - Commercial Paper with 30 to 90 day maturities and Bond proceeds will be laddered in three- and six-month Treasury bills as they mature. Maturing GSE's will be rolled over to the highest yield on curve taking into consideration cash flow needs. 13 5'i w55YY5555Y5 m m 'tmmm m s.xxxx�r: �xx 'i m h « N U{ h b 1�pp mmN QQN ppN FEp��MYMf'1b�NN jQ\W13N �CCaJCC M88� on W ONmPmOOmNO m P� 6 � (.J�N�NNry�Q0C1O O8 yy��ryryoo jj��Q ypyp�� q �C�-:: mvo O N P O b O W p N C c o $m EEE �(VW�p C1�ggPNW E a � V xxx xx x IIII; O P NmP«NYIm YI CCP K n p� LL LL O LL LL LL LL m �LL LL LL w <�Sooe�s0000 =g=====____ �;ssyx5ss5ssm Uccc MMc? mom mm000 Vi F J zz 5555 xxx „66 g"e@� 'iii N CI p b « J Q sx 55 E A am9 M UP 333 g N aYn YY VV C' gg �& aQ�<a rciaa CK I$L O��N y ggyp�$LL F s� UwUQ E 9 � s S y3 NN yN ppaa Kg6^y'KK� 0m ��pp sa�.`Q6'K n�KKp QKS IY m �£�'�'�•ILLiaNg $�$Cgp�N�1lnNwwNu UIp m�F, ES ,W��I��S 1 --w ,�ryryIVNNC �-- ---------.-,------ . . . . . . . . . . G3� tYi � n w w o �3 ��3i33333333333333333 a� ... .......� m < N N p �j yy�� yyjj jj yy$$ K � P P P O V O< V PPP V p O O O O< P - - — - — — - - K g. g'� Yn �nF'Zfi � --n-------a g LL.w pp p pp won w6'S`yWynNQQ o_rna rnawYYaoj UUI� � 2�ac-d g f 6Vi vSwag�mm woi $'�wuiw�� mw wy w w w66aJJ i w Yi JJJww mJc j UlJ RJw jfNj vi Qo��oa:joQOQoyp4nIym I �55$¢'{{yy 11 �(_/ �< /\}/ �z z k�� / �t �$ \\\ r. 0000 \C \\\� IL ; ƒ bd\£ \ ) ) £\ƒƒ E)\\I) �fi§ �rm;A2 | e ( & ) ( ( / roo & @ w = a tm co / / 2 } ) 00 ' 2 ©■ ; a CD z (A\ cc \ §§ $ � E o �7ILA;z 9 zr) B - j kp ia §a, } 2|/R�skk■ 0N| !L -/ k,fREk/ LL kk\�� .f§§ -� `§ w |�®�� !t §�/2/�� ■ .�■2 2z0:5 ]� czo 0q\ )� ))J)§£ E 7 , a Ma ^$aa Q =mm$ ��mrm�n arcLLg5�=8 E�_ rGN��ww_a•9��N N No o'�_B � NS�^ u�d^ � o $RhmF,mo Y88ffi�Swm Y�nB»'Sr ��gm$� m»�RRB«" JRr»»m mm a8 FoBx Ste«-49 y^m»»y n gpaN$Nwn «»wpm ��moma.Sn� o$san F{^^ 8ay og® A nn N.a cn E^m«$8n br7� E$^«8»^ a�awgmg» 2^ E Eo�.nnmd u_R� _HIH E«nmm Bb7 C�^ Etimo'^•; "sNZ2" SS6 ndmn Z i i mg �Ba�r w € omnm 7d � nn -992X S8 N N 0$�n Om qg $ r am om� �mnw RAP". Q �lnno ry'nOi w 3'»n» nnFnmmm� n m0n�g�g.Qio «�nnm +SO� �m � � ,mn ��g�.y o �agnmdnm Qqggnm�^�m 8:6 i5�nm am o$mvim ..gym $$�.3g o' wtt w w _ w E _ w w gzw c zv N a' E ?�8u � ayi c ��a• ELL r a�u�gE'q EE�� c$ ELL �aISM 'oiv o u "e $oE� > .,'eE2c l + HNNEs nEENviEPS� L8 •+�NwEP�b Le�3ILL NN� 2e S tiUNJJM1UIF i-UNJJ6Uf 4- s^ JJ6 2.2 m CBydu Dutd ReaIWaLLJn WMUM a W Su,uua FuWs Coy, RtlownaaaR Apaney any Fhu., AIMwI ,u "31, m07 Balnw dAduM FUM m3,]81,T85 Lew PMYaN Fu.e (1,000) Lew BeNaW usF 116A51.0241 Ynee&un6a S 188 J12.T01 c.an a Yvwwwa Bank AaamM NM!-gVMYtl $Y Back SYrylw Yd yvMw Yd WNY FeBp-CmmM W CBeckkp f 11.R].Olb) S - f - WeYFago-8vnep W Sweep 1J,2N,101 PaByCwk-Dame. W WA t,000 WeY Fa -CemvN Yes CIIaW f 31295 S 31295 S 31 �$ Tdal-BaNAm]Islb S 11519383 f 31295 3 - S 31295 U STodaury I AmwYUC eurgw Surpw CUMO61an-A IwusR Vaka Vw m Yd TUM-US T UBGpemnrM BpanwtlEMelpia CWo]lan-qWSuaPuabuwR Awm VS S". Yd Suous YesBeNtMNax Yqk-Bpnmtl Y. FIVO]M Mac 2811B,W Zama. 0S ;909,9M BaNtMNax VaR-OemaM Y. Fawh. Mac 9,918,1]! 9,81811T 9.915.1" Bankq Ncx VaA-Gems. Vw FMIB 1,Wa,B23 1,898,SO l.m 823 Sackw NawwYOM-DamwO Y. FFCB 4W1.TW 4,9]1,]O9 4,9]t,]O9 Bwdt Ydk-pamwM Y. Fa0 Mao 4,3T,8Y 4,3]],656 4,3]],8 S ,,.& wYwk-Oamyq Y. FHIB ],9BSm6 T.M.W. 7.995.2W Banks Now Vak. aura. Y. FHLB 91990,33a 9,950,33a 9.8W.334 w BcfN Yak -Coma. Y. FFCB 9.88606 9,BSB,HB 9,BS3,4a8 BankMNexVak-pma. Y. FFCB 4,905,3m 4,W5,324 4,9SS.M4 B.kal New Ywk-Bare. Y. FWe Mac 2437140 2437140 Z437.IQ Tdal-US Cwscmed Sewwa 59,470814 5 00,814 59470614 Me6kun Tekm NW Book SwF. Su CWM.T*A mM S us Maus? Valw Tw Yd c' Bankol Naw Yak-bmatl Yd GewlM Elxbk Ca 295p 69] 28W 69] 295088] Taal-M.wm Term Pa 2 ,89T 2,9W69] 2.950,897 PMw Canm—'Papa Lugo]Yn-Avaihh bausR Busk Valw SuryNs Td M Surylw Y. BaNtNNax Yak -Deno. Yea IKsmaam lLeaw 4,905,02! 4,985,023 - A905,02] BaK.MNew Yak -Demo. Yes Me 11LyMI 4,985,Ob 4,985,038 A905,030 DeM.New Yak-0.ma. Yw Nwrcs WW 4,985,Ob A905030 4,905,030 Balk of Naw YOM-Gems. Yd Coca CCY 49&5030 4805030 4985030 Taal-Ptlme CammsmlPeI 19,940137 19,940,t37 199W 13] LwIA ,lnveMmml F. SUIPw bulMuc Name-A.Sa b ue T e Bock Y. A4 Yea WF-CYy-OemsE Yd 81ele Pod 39,m],582 39,3W,583 .983 IA,93t) 343,fi31 34, WF-ROA-Coma. Yd 6YIe Pad 85455 B,Sa5522 8N3,631 TNM-SIaM Paul 4T853,00022 47853084 4,963,931 42009,153 3urylu Na IE Blvpluc No .W FUMa .WVN% 3utµ® Tw 3 S tB,t]&032 S 1 1,M4 13.210.101 113,2N,1011 - 1,OLO 1,000 i t1,4d,083 f 4B6J 931 f 18452,024 BAH3fL 00188% burylw N0 S, ro W Aa FUMa AtluM%l burytlw Y. O W9G% OY. Soo. tie M Sukplus W ASFun. NA.1% SUryeln Ye 293299% 319198% SuMw No AE Stu. No ANF Atol% Lao Yw 14$.% 1583]% SsMw No Suw M Afl F. F.No Ptlual% .0. Yd - 9B]41% 10 ]025% bu'lYw No IG Surylw No gtlFwY Atival% burylue Yd - 238COM 2302LV% TdM at, amwaaaaa 1]11,2H,A3 130,214, 2 A.983931 1m,250A01 - 843194A 6].2260% TabI Clry Cash 61... N1 ]J].9m 130,246,8n 4,963.931 1m 616961 11,488,M1 4,9e3,01 16,a62A2A 69.pyTi 6].iA36% fb tlnw awft POMMdhan-Aaft i Nnw119M btaplue CUMWIBn-AwY Ivuel/T Valw Y. M Y. Yw m02RMU5 BaaLIP Yd USTnaury Blll 13.T95,654 13]95,65D 13.]95.6W =2RMU8 Bank -GIP Yd UBTwasuy 6111 1,994,945 1994,945 1,994,945 2c04 Fiwat h4h ty LIP Yd UfiTwaury BBl 5,819.250 5.9T9,mB 5,9]92w MFhww NMlmBy LIP Yw LL6 TmwryBIA 11814.187 11.014,18] 1181018] 2c0AFhanee PUm LIP Yd UST BIB 216]B 87e 216]80]0 216M878 TOW-U6 T.M 0,26Z918 55S191B PoIBdb-MMwl Fvga TneW-Avail Money Maad Mutual Fu Bwk Value Sopus Y. Adi Surplus Y. CMc CxIWUSSwk-pqW YES 10 Ma9wn m0 308 m CFBaCdWUSBaa-Deal YES 10Pme0wn 1994RMUfi BS4Zam SYc YES 1M Ame0rm 1895RMUSBmk-LIP YES 1d Am. 1995RMUSB -Spacial Fu. YES 1MAmw0wn Z004 FM NM-1895 UB Bonk-Eevox TES 1M&Wwn 1908RMU&Bmk-CIP YEB 1M NneMxn 1B9BRDAUSBank-MEW YES 1M M. JMMMAUfiOad.S6 Fl YES 1MAmsAen 199SRMUSWMt-CW YEB 1MNna6caaa 2001 RMU8 Barak -W Sw YES 1Mana6wn m RMUb Bank-CIP YES 1MMnnwn m RDA US Batik-Dat 1 TES 1MNwnwn dtl. 2RMU8 Swk-CIP YES 1MAm w 1,370. B 1,3m.088 1,370,068 m03T.WRDAUS Batik-DS YE8 1MNwnwn 2Wa*k3TuwMRDAU 6 B YEB 1M Amedcan X T.WRDAU SBw p YES tM Nnsbn 2004Fn AMk USB -CV YES 1M Amerkn 4,397,551 4,39I,551 4,39],551 mmN USSsnk -CDI YES lat w an SuNWI-MwaJFwl 5]8]92] 5]0]07 1 5,]S]92] BUplw No PE W N5% Bud SuMw W M Svplin W ABFuw MM% SapWa Y. 2 N48% 30958% Tdtl FYUI ApsMNwBnmb N,0]O,HS 810]O,NS 61,030845 m.OW]% ]2]A9% dsd Tool m2T64.T6.5 191J .BY! 4,903.w1 168 12.]41 11 4,9W,931 tB,aVAu 100 100.0p3p% Mj m o N nI ° m m � m o m M e ag p` N CO] m N e e ep \ e \ e a 0 O d N m N - \ ° j� \ N C ^ ^ e C °v0 O M W M i(] - \ \ e e ° - ° ° ° N N a °O] P m n W t0+1 Q N f0 V O 0 ^< C� n� n ONi � � M VI O � N N Q< ONi ° � mN°�rQh V e e e M iOO M �O°OM ° N d ee \^e ne U e e e e \\ ^°� ° N t°�1 n < e e e e N r e e ° N \ e ON N N N d LL^ O O d d d d LL N O LL fN0 M Cm'1 O N V IL N N n N ONi O N N W W h N d N N N N^ m ry �e !o oe ee°e ova°e°e° e° o o°ee ° m �� oN e e e N NNd N AO dd^W ON(V l4N^N ^ N �^ O' CMtpq N e e eM JO O W O N N° CJ °^� N�� e n N d l7 O O n ° NmM fON f0� �M NO 0fn0 Yn] d 0 �� ON OM N �M pp 000M NW < �- N N N d O y IZIM m M Q� M Z�< n N e^- N ZIIdO O m O OMi N IZ N O N N� N Z O n N OOi N e e e e 0 0 M N VI Ti W d N o m N m e e e e OOi N O O m m n O P O n^ n ^ M m P O N< O d N P O O N N N N N d M M M IW° _ la� N e e m e ° r e \\ a O g e g d N N N O N O °) Q N M M m M .P d y e em do j Zee \e ^N �NiON (OO N 7h r� OOO Os OO W C d nN O OOWd ]'I��ndM a nobnN�OOdW�� IN Q ONn�O��pa�p N Q N M N M N C1 n ,I P E E E E E E E E E E E E E E v71 m 5 c c S w SEE ^^ G E N V N y C y^ d y C y L` N U Q= U Q U Q a U a F U m E U m E m E a- Lr aLLarc a a�att quart aLL¢a O N O 0 T O N O m O O O'��- O O O m p O O m O O N m j O O O T O no ` W- W j 9 9 C p 2. V CI G W Z.O m O E E E E "� E E A E E E 2 c E'E m b E ms: E. 'c N d c E'E 2 OO C ry W W W F« W W W F W W W F« W W W F W W W d W W W L.. W W W O C0 v N N N N N`W O ,A CO2 d m_ CN �2 E s ' am`am`a`N a`m a`h aN`yC ad'3N aN``Ny QQ`a3 < w< O LL Q< <'<lo w a� n E ■ 7 O7 N d 1 7 Q c 1 w c d rn �w I m LL a' I ■ 2` p = � N c0 I c � • — 7 C N N co Ill N — .L. C I 7 0 x ■ � Q fA MN I c w I - 0 C 2 E I y N ■ to c w 2 L c N I m E • U y I p > c O c a ¢ I o 0 c c c I ti Q •` .� o I w W N M R I > > I Q Q V ��ft G) = L J d ■ ■ G 2 i w L N 0 0 0 0 0 0 0 0 0 0 0 V0 L O o 0 0 0 o 0 0 o 0 0 0 V M N O 0) co h fp y U� ll�t M N ui ui L6 L6 a V .4 V` � a 11 INVESTMENT ADVISORY BOARD Correspondence & Written Material Item A Meeting Date: October 9, 2007 TITLE: Month End Cash Report — September 2007 BACKGROUND: This cash report is not a complete Treasury Report (exclude petty cash, deferred compensation and fiscal agent balances), but would report in a timely fashion selected cash balances. RECOMMENDATION: Information item only. Jcl n M. Falconer, Finance Director F s LL ^ W h _�qq m CN'1 O CI m I� m W n O 0 N M Om W m Q m yNj N M m W N o m yo 0 0 o awn omrv^'� 0 0zjq c& Q o p O N O O O 10 N 0 ry yO fD N m m m W m m C6 m M m LL N N N O O O M O Q N N N �^ N N K J N pN O m � N N CD WD 0 m ro M m Q m N N N N N 00. N 009 O p N r+ LL N N LQ Oj U h r ^ m m M W m m y m 6 m m N m o M 0 o N m a m o �co 0 o c umM 0 M M M m M o po M m 3xm m m m m n! O ^ N p O N 3 v N N N 0 � ^ O uNl M O m O O N p m m O O p mV = e Q m o w W fV O N N f0 N N N O (p Vj w 0 m N 2 N O q O ON Y e a`n m O ^ 4 Q a W y m O 3 N p m m .c cow�U om c W w m m 3 m N E VE g >• c o x - E E E mor�auow a3 a w 'a wozci p0�a�m a C W a C C N - C g a a 0 g m IL N N F « N t N m y m c C N $ a w m q C f NN U E T 0 m Z n C o c � u m E a N E m « LD O 0 J O O m n 5 � am y yj m F H LN C C o 6 y O c `m N N W U t 5 >_• F m 3a o0 0� EQ ryt gW C M, C O O U oOi E a w m a c n« $11 N �0 m< A O C N U 13 �q nY y L w F n O d O 0 0 Qm m n O L d L > yV 6 2 17cl:cllL nut I-IUL:L1()Il 1CeSUJLS Page 1 of 1 TreasuryDirect, AuctionRecent Bill Security Issue Maturity Discount Investment Price Term Date Date Rate % Rate N. Per $100 CUSIP 28-DAY 09-27-2007 10-25-2007 3,270 3,333 99.745667 91279SA76 91-DAY 09-27-2007 12-27-2007 3,820 3.922 99.034389 91279SB83 182 DAY 09-27 2007 03-27-2008 4.000 4,151 97,977778 912795D57 28-DAY 09-20-2007 10-13-2007 3.930 4.008 99 694333 912795A68 91-DAY 09-20-2007 12-20-2007 4.050 4,160 98,976250 912795875 182-DAY 09-20 2007 03 20-2008 4.130 4.288 97.912056 912.795D40 4-DAY 09-13-2007 09-17-2007 4.620 4.699 99.948667 912795U85 28-DAY 09-13-2007 10-11-2007 4.000 4.079 99,688889 912795ASO 91-DAY 09-13-2007 12-13-2007 3,800 3.901 99.039444 912795667 182-DAY 09-13-2007 03-13-2008 4.020 4.172 97967667 91279SD32 28-DAY 09-06-2007 10-04-2007 4.280 4.366 99.667111 912795A43 91-DAY 09-06-2007 12-06-2007 4.350 4 472 98 900417 912795B59 182-DAY 09-06-2007 03-06-2008 4 380 4,554 97,785667 912795D24 17-DAY 08-31-2007 09-17-2007 4.500 4.585 99.787500 912795UB5 28-DAY 08-30-2007 09-27-2007 4.600 4.693 99 642222 912795A35 91 DAY 08-302007 11-29-2007 4.600 4.732 98.837222 912795B42 182-DAY 08-30-2007 02-28-2008 4,590 4,777 97.679500 912795C90 28-DAY 08-23-200/ 09-20-200/ 4.750 4,847 99 630556 912795A27 92-DAY 08 23-2007 11-23-2007 2.850 2.919 99.271667 912795834 182-DAY 08-23-2007 02-21-2008 1950 4,098 98.003056 912795C82 28-DAY 08-16-2007 09-13-2007 4,560 4.653 99.645333 912795ZZ7 91-DAY 08-16-2007 11-15-2007 4.630 4.763 98,829639 912795826 182-DAY 08-16-2007 02-14-2008 4,710 4.905 97.618833 912795C74 1-DAY 08-15-2007 08-16-2007 5.030 5.114 99,986028 912795ZV6 8-DAY 08-15-2007 08-23-2007 4.100 4172 99 908889 912795ZW4 28-DAY 08-09-2007 09-06-200/ 4.980 5,083 99.612667 912795ZYO 91-DAY 08-09-2007 11-08-2007 4,770 4,909 98,794250 912795A92 182-DAY 08-09-2007 02-07-2008 4.730 4,927 97.608722 912795C66 28-DAY 08-02-2007 08-30-2007 5.055 5.160 99.606833 9127957X2 91-DAY 08-02-2007 11-01-2007 4,825 4,966 98,780347 912795A84 182-DAY 08-02.2007 01-31-2008 4.800 5,001 97,573333 912795C58 28-DAY 07-26-2007 08-23-2007 4.940 5.042 99.615778 912795ZW4 91-DAY 07-26-2007 10-25-2007 4 885 5.029 98,765181 912795A76 182-DAY 07T 26-2007 01 24-2008 4,890 5.098 97 527833 912795C41 28-DAY 07-19-2007 08-16-2007 4 660 4.755 99.637556 912795ZV6 91-DAY 07-19-2007 10-18-2007 4,840 4.982 98.776556 912795A68 182-DAY 07-19-2007 01-17-2008 4.865 5.071 97540472 912795C33 28-DAY 07-12-2007 08-09-2007 4.650 4.745 99.638333 912795ZU8 91-DAY 07-12-2007 10 11-2007 4.815 4.956 98.782875 912795A50 182-DAY 07-12-2007 01-10-2008 4.850 5.055 97.548056 912795C25 Effective with the 11/2/98 auction, all bills are auctioned using the single -priced method. http://www.treasuydirect.gov/RI/0FBills 10/1/2007 3 Bill Lockyer, State Treasurer Inside the State Treasurer's Office Local Agency Investment Fund (LAIF) PMIA Performance Report Daily dJaW Quarter to Average Maturity 9/14/2007 5.23 5.25 215 9/15/2007 5.23 5.25 215 9/16/2007 5.23 5.25 215 9/17/2007 5.23 5.25 207 9/18/2007 5.23 5.25 207 9/19/2007 5.23 5.25 204 9/20/2007 5.23 5.25 203 9/21/2007 5.23 5.25 212 9/22/2007 5.23 5.25 212 9/23/2007 5.23 5.25 212 9/24/2007 5.22 5.25 203 9/25/2007 5!221 5.25 200 9/26/2007 1 5,211 5.25 213 9/27/2007 1 5.21 5.25 213 17- LAW Performance Report Quarter ending 6/30/2007 Apportionment Rate: 5.23% Earnings Ratio: .00014325574266716 Fair Value Factor: .999545022 PMIA Average Monthly Effective Yields Aug 2007 5.253% July 2007 5.255% May 2007 5.248% Pooled Money Investment Account Portfolio Composition $57.1 Billion 08/31/07 Reverses -0.17% Treasuries Mortgages Loans 3.42% 2.19% Corporate Bonc 0.66% Commercial Paper 16.31 % Time 15.53% 19.20% Agencies 25.90% n rtccs: t ommerctai raper states ana vutstanamgs Page 1 of 3 Federal Reserve Release • Release I About I Announcements I Outstandings I Volume statistics I Year-end I Maturity Distribution Data Download Program (DDP) Data as of September 28, 2007 Commercial Paper Rates and Outstanding Derived from data supplied by The Depository Trust Company Posted October 1, 2007 Discount rates Term nonfinanc►al nonfinancial financial asset -backed 1-day 4.90 5.54 4.95 5.57 7-day 4.89 5.56 4.75 5.44 15-day 4.79 5.44 4.90 5.53 30-day 4.72 5.33 4.75 5.28 60-day 4.76 5.32 4.79 5.25 90-day 4.72 n.a. 4.92 5,24 Trade data insufficient to su000rt calculation of the 90-dav A2/P2 nonfinancial rare for Rentemher 2 Yield curve Money market basis S, 2007 Percent --- AA nonfimmcial ........... A2112 nonfinancial —.— AA fiu.nrual ......... ...... ....... ............. -.._--- ____------- 1 7 15 30 Days to Maturity 60 6.0 5,8 5.6 5.4 5.2 5.0 4.8 4.6 http://www.federalreserve.gov/Releases/CP/ 10/1/2007 5 i nu. l VIIIIIIUIUIUI rupUl RaLCS anU VULStanaings Page 2 of 3 2001 2002 2003 2004 2005 2006 2007 Discount rate history Thirty -day commercial paper (daily) F--- AA nnutinancia! 2001 2002 2003 2004 2005 Outstandings Weekly (Wednesday), seasonally adjusted 2006 Percent 7 6 5 4 3 '0 2007 http://www.federalreserve.gov/Releases/CP/ 10/1/2007 6 11V . l VIIIIIIUIUI l raper maLes anu vutstanomgs Page 3 of 3 Billions of dollars 1190 1090 990 890 790 690 590 490 l I --- N��slin,mrtollrightacatcl 'lt .-�_•— Financial (tut, scale a �t l 't t 2001 2002 2003 2004 2005 F Billions of dollars 250 s" 210 I '1 130 2007 01 The daily commercial paper release will usually be available before 11:OOam EST. However, the Federal Reserve Board makes no guarantee regarding the timing of the daily commercial paper release. When the Federal Reserve Board is closed on a business day, rates for the previous business day will be available through the Federal Reserve Board's Data Download Program (DDP). This policy is subject to change at any time without notice. Release I About I Announcements I Outstandings I Volume statistics I Year-end I Maturity Distribution Data Download Program (DDP) Home I Statistical releases�� Accessibill Contact Us Last update: October 1, 2007 http://www.federalreserve.gov/Releases/CP/ 10/1/2007 VA rxts: H.1.)--Jelected interest Kates, Web -Only Daily Update --September 28, 2007 Page 1 of 4 Federal Deserve Statistical Release H.15 Selected Interest Rates (Daily) 4 Skip to Coninv Release Date: September 28, 2007 Weekly release dates I I listorical data I Data Download Program (DDP) I About I Announcements Daily update Other formats: Screen reader I ASCII j, 1 11ab F?owmiaad Program The weekly release is posted on Monday. Daily updates of the weekly release are p through Friday on this site. If Monday is a holiday, the weekly release will be p after the holiday and the daily update will not be posted on that Tuesday. FEDERAL RESERVE STATISTICAL RELEASE H.15 DAILY UPDATE: WEB RELEASE ONLY SELECTED INTEREST RATES For use at 4:15 p.m. Eastern Time Yields in percent per annum September 28, 2007 2007 2007 2007 2007 Instruments Sep Sep Sep Sep 24 25 26 27 Federal funds (effective) 1 2 3 4.74 4.82 4.88 4.93 Commercial Paper 3 4 5 Nonfinancial 1-month 4.78 4.79 4.73 4.82 2-month n.a. 4.73 4.84 4.78 3-month n.a. 4.80 4.78 4.72 Financial 1-month 4.79 4.75 4.82 4.89 2-month 4.85 4.81 4.88 4.81 3-month 5.04 4.71 5.03 5.12 CDs (secondary market) 3 6 1-month 5.12 5.12 5.12 5.14 3-month 5.18 5.18 5.19 5.22 6-month 5.12 5.13 5.10 5.14 Eurodollar deposits (London) 3 7 1-month 5.15 5.15 5.15 5.15 3-month 5.25 5.30 5.23 5.25 6-month 5.15 5.20 5.18 5.18 Bank prime loan 2 3 8 7.75 7.75 7.75 7.75 Discount window primary credit 2 9 5.25 5.25 5.25 5.25 U.S. government securities Treasury bills (secondary market) 3 4 4-week 3.22 3.28 3.18 3.22 3-month 3.76 3.70 3.64 3.62 6-month 3.96 3.91 3.91 3.92 Treasury constant maturities Nominal 10 1-month 3.35 3.34 3.25 3.30 3-month 3.84 3.79 3.73 3.71 6-month 4.11 4.06 4.06 4.07 1-year 4.09 4.04 4.03 4.03 2-year 4.05 4.00 3.97 3.95 8 http://www.federalreserve.gov/Releases/H15/update/ 10/ 1 /2007 rich: n.ir-.,3eiectea interest lcaws, web-vmy vally Upaate--Neptember 2S, 2UU"/ Page 2 of 4 3-year 5-year 7-year 10-year 20-year 30-year Inflation indexed 11 5-year 7-year 10-year 20-year Inflation -indexed long-term average Interest rate swaps 13 1-year 2-year 3-year 4-year 5-year 7-year 10-year 30-year Corporate bonds Moody's seasoned Aaa 14 Baa State & local bonds 15 Conventional mortgages 16 n.a. Not available. Footnotes 4.14 4.09 4.07 4.02 4.31 4.26 4.27 4.22 4.44 4.41 4.43 4.37 4.63 4.63 4.63 4.58 4.94 4.94 4.95 4.89 4.88 4.89 4.90 4.84 2.21 2.19 2.19 2.11 2.30 2.30 2.30 2.23 2.33 2.34 2.34 2.27 2.35 2.39 2.37 2.30 12 2.34 2.38 2.36 2.29 4.86 4.80 4.83 4.79 4.74 4.64 4.69 4.62 4.80 4.70 4.75 4.69 4.89 4.79 4.85 4.80 4.98 4.89 4.95 4.90 5.12 5.05 5.11 5.06 5.29 5.23 5.29 5.24 5.52 5.47 5.53 5.49 5.80 5.81 5.82 5.76 6.65 6.65 6.66 6.59 4.48 6.42 1. The daily effective federal funds rate is a weighted average of rates on broke 2. Weekly figures are averages of 7 calendar days ending on Wednesday of the curr figures include each calendar day in the month. 3. Annualized using a 360-day year or bank interest. 4. On a discount basis. 5. Interest rates interpolated from data on certain commercial paper trades settl Depository Trust Company. The trades represent sales of commercial paper by deale issuers to investors (that is, the offer side). The 1-, 2-, 'and 3-month rates are 30-, 60-, and 90-day dates reported on the Board's Commercial Paper Web page (www.federalreserve.gov/releases/cp/). 6. An average of dealer bid rates on nationally traded certificates of deposit. 7. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. 8. Rate posted by a majority of top 25 (by assets in domestic offices) insured U. commercial banks. Prime is one of several base rates used by banks to price short loans. 9. The rate charged for discounts made and advances extended under the Federal Re credit discount window program, which became effective January 9, 2003. This rate adjustment credit, which was discontinued after January 8, 2003. For further info www.federalreserve.gov/boarddocs/press/bcreg/2002/200210312/default.htm. The rate for the Federal Reserve Bank of New York. Historical series for the rate on adjus 9 http://www.federalreserve.gov/Releases/H 15/update/ 10/ 1 /2007 l AD. EnJ_1 0crocteu rniereSL 1c,=S, weD-Unry uauy update --September 28, 2UV / Page 3 of4 well as the rate on primary credit are available at www.federalreserve.gov/releas 10. Yields on actively traded non -inflation -indexed issues adjusted to constant m 30-year Treasury constant maturity series was discontinued on February 18, 2002, on February 9, 2006. From February 18, 2002, to February 9, 2006, the U.S. Treasu factor for adjusting the daily nominal 20-year constant maturity in order to esti nominal rate. The historical adjustment factor can be found at www.treas.gov/offices/domestic-finance/debt-management/interest-rate/ltcompositei Source: U.S. Treasury. 11. Yields on Treasury inflation protected securities (TIPS) adjusted to constant Source: U.S. Treasury. Additional information on both nominal and inflation -index found at www.treas.gov/of£ices/domestic-finance/debt-management/interest-rate/ind 12. Based on the unweighted average bid yields for ail TIPS with remaining terms more than 10 years. 13. International Swaps and Derivatives Association (ISDA(R)) mid -market par swap for a Fixed Rate Payer in return for receiving three month LIBOR, and are based o at 11:00 a.m. Eastern time by Garban Intercapital plc and published on Reuters Pa ISDAFIX is a registered service mark of ISDA. Source: Reuters Limited. 14. Moody's Aaa rates through December 6, 2001, are averages of Aaa utility and A rates. As of December 7, 2001, these rates are averages of Aaa industrial bonds o 15. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Th 16. Contract interest rates on commitments for fixed-rate first mortgages. Source Note: Weekly and monthly figures on this release, as well as annual figures avail Board's historical H.15 web site (see below), are averages of business days unles Current and historical H.15 data are available on the Federal Reserve Board's web (www.federalreserve.gov/). For information about individual copies or subscriptio Publications Services at the Federal Reserve Board (phone 202-452-3244, fax 202-7 electronic access to current and historical data, call STAT-USA at 1-800-782-8872 Description of the Treasury Nominal and Inflation -Indexed Constant Maturi Yields on Treasury nominal securities at "constant maturity" are interpolated by from the daily yield curve for non -inflation -indexed Treasury securities. This cu the yield on a security to its time to maturity, is based on the closing market b actively traded Treasury securities in the over-the-counter market. These market calculated from composites of quotations obtained by the Federal Reserve Bank of constant maturity yield values are read from the yield curve at fixed maturities, and 6 months and 1, 2, 3, 5, 7, 10, 20, and 30 years. This method provides a yiel maturity, for example, even if no outstanding security has exactly 10 years remai Similarly, yields on inflation -indexed securities at "constant maturity" are inte daily yield curve for Treasury inflation protected securities in the over-the-cou inflation -indexed constant maturity yields are read from this yield curve at fixe currently 5, 7, 10, and 20 years. Weekly release dates I Historical data I Data Download Program (DDP) I About I Announcements 10 http://www.federalreserve.gov/Releases/Hl5/update/ 10/1/2007 11�". u.l r-ocmcLcu IIRUIUbL AaLCS, vv VU-Vuly Ually Upuale--aupwIllOCr L8, LVV / rage 'i Vf 4 Daily update Other formats: Screen reader I ASCII Statistical releases Home I Economic research and data Accessibility I Contact Us Last update: September 28, 2007 http://www.federalreserve.gov/Releases/HI5/update/ 10/ 1 /2007 11 � g 8 v z m 3 S �n Ow mXi yy cbim m P N fi A N Ol m Mm q.6 O O N N ` N O O O N P m O N O W « O W N 0 m M W b W m N N ; A O« h f p_ M p b m O t h A r I b 0 m a N b O M m� O pm m A N I� M N O O A N N O J D 2 E o w A O« A IO M V b W O 1'1 A y �Mb mma N mOm N E Z S - ' O O b N W V N b It O M s m N W W m O m� W A m M mW m A 00. W OI C O m; f0 APp W W m m 0 C Y W O O Wm OMNn O�NA ma.i p�yAWyfV Nl70ih OU>V"N�- 0 m 0 V W A A Co Y O V C 0 L o O E a ma m r )) F Z E m r c r m Z W NW¢� r c c W d a m z V r V> 002 w N ` n y c m d C7 g� 2 n c d Y m N y W 0 U r ? 0 yg� E c ^' a r> W V' Y� or ZUm66 c �ii i; dg MLL 2'do°d� Em d 28J<wzw�mz3w=i°�a$z gaq�d `cd�3 cnW aWVizo�Z7arw�Fz p`J m t , m rc wc� O iy w O z Z iS E m m m£ mn o ar w j g d rc O i°- ¢ 0.rw 12 WMKOU Or Z ZWO oc7 c�ULLmwwaw3 w¢ mu 12 INVESTMENT ADVISORY BOARD Meeting Date: TITLE: October 9, 2007 Pooled Money Investment Board Report for July 2007 BACKGROUND: Correspondence & Written Material Item B The Pooled Money Investment Board Report for July 2007 is included in the agenda packet. RECOMMENDATION: Receive & File ohn M. Falconer, Finance Director POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF JULY 2007 WITH JULY 2006 (DOLLARS IN THOUSANDS) JULY 2007 -11 JULY 2006 CHANGE Average Daily Portfolio $ 60,681,221 59,653,163 $ +1,128,058 Accrued Earnings $ 270,085 $ 245,248 $ +24,837 Effective Yield 5.255 4.849 +0.406 Average Life -Month End (In Days) Gt-III Total Security Transactions Amount $ 34,169,222 $ Numbor 718 Total Time Deposit Transactions Amount $ 4,626,600 $ Number 172 Average Workday Investment Activity $ 1,847,420 $ Prescribed Demand Account Balances For Services $ 263,394 $ For Uncollected Funds $ 124,585 $ 1 164 +22 I 30,026,066 $ +4,143,156 622 +96 4,697,190 $ -70,590 174 -2 1,736,163 $ +111,257 274,402 $ -11,008 126,059 $ -1,474 BILL LOCKYER TREASURER STATE OF CALIFORNIA INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED) JULY 31, 2007 DIFFERENCE IN PERCENT OF PERCENT OF PORTFOLIO FROM TYPE OF SECURITY AMOUNT PORTFOLIO PRIOR MONTH Government Bills $ 3,129,457 5.11 +0.04 Bonds 0 0.00 0 Notes 0 0.00 0 Strips 0 0.00 0 Total Government $ 3,129,457 5.11 +0.04 Federal Agency Coupons $ 7,825,338 12.78 +0.39 Certificates of Deposit 13,084,418 21.36 -2.40 Bank Notes 1,200,000 1.96 -0.02 Bankers' Acceptances 0 0.00 0 Repurchases 0 0.00 0 Federal Agency Discount Notes 6,718,395 10.97 +2.26 Time Deposits 8,698,495 14.20 +0.89 GNMAs 206 0.00 0 Commercial Paper 11,303,512 18.46 -3.44 FHLMC/Remics 852,706 1.39 +0.07 Corporate Bonds 375,232 0.61 +0.02 AB 55 Loans 8,505,519 13.89 +2.92 GF Loans 0 0.00 0 Reversed Repurchases -447,900 -0.73 +0.73 Total (Ail Types) $ 61,245,378 100.00 INVESTMENT ACTIVITY JULY 2007 JUNE 2007 NUMBER AMOUNT NUMBER AMOUNT Pooled Money 718 $ 34,169,222 755 $ 36,623,083 Other 1 570 19 317,588 Time Deposits 172 4,626,600 143 2,746,500 Totals 891 $ 38,796,392 917 $ 38,687,171 PMIA Monthly Average Effective Yield 5.255 6.250 Year to Date Yield Last Day of Month 5.255 5.121 V, Pooled Money Investment Account Portfolio Composition $61.2 Billion Corporate B 0.61 % Commercial Paper 18.46% Tim( 14.1U"/o 07/31 /07 Reverses Treasuries 5.11% Loans 0.73% Mortgages 3 23.32% gencies ?3.75% BOARD MEMBER ITEMS I. Role of Investment Advisory Board A. Not to influence the decisions of the Council but to provide information, advise and market knowledge. B. To act as a sounding board. II. Review of Proceedings of City Council Meeting of September 18th. A. Comments by each Council Member 1. Councilman Osborne 2. Councilmember Henderson 3. Councilman Kirk 4. Councilman Sniff 5. Mayor Adolph B. Brief summary of risks involved 1. Embezzlement Risk (Weimar situation) 2. Issuer Risk (credit) 3. Market Risk (interest rate fluctuations) 4. Clarify certain comments: a) "when you buy and hold there is NO risk" b) Concept of "trading". Confusion with "day trading in the stock market". We are talking about "periodically adjusting prortfolio maturities given changing interest rate scenarios based on educated forecasts" III. Suggest a totally different approach for the IAB to pursue A. Why not let the City Treasurer be the one responsible, at his discretion, for the engagement of a PPMF as one more diversification tool? IAB MEETING HANDOUTS FOR MEETING DATED 10/09/07 To Members of the IAB Update of October 3, 2007 I had brief, informal conversations with council members Osborne and Kirk subsequent to the 9/18/07 meeting of CC at which the CC did not approve the proposed change in the ordinance hat would have put in place the mechanism and authority for the CC to engage a PPMF when and if the have agrees to such engagement. My initial reaction to the to decision was that omments made by certain CC members revealed a significant misunderstanding and lacked applicability. I reasoned that a better explanation by the treasurer and the IAB about how a PF�MF would operate, the PPMF's inability to access the invested funds and the debt securities purchased and sold, and a comparison of the risks and rewards in using a PPMF compared to the risks and rewards of investment of city funds by the city treasurer would alleviate most of the concerns expressed at the 9/18 meeting. I have changed my mind that explanation and clarification will modify the thinking of the CC for two reasons. First, the IAB may not agree with the comments made by certain CC members, but those views come from the heart and are based upon honest and deeply held beliefs. Their decision is subjective rather than objective making them unlikely to change their minds. Also, I suspect that the majority of CC members do understand the issues Second, staff does not favor engaging a PPMF and the CC is aware of this. The three CC members that opposed the ordinance strongly support the city treasurer. Until new CC members are seated or until staff favors engagement of a PPMF, I suggest that the IAB not pursue the matter unless requested to do so by the CC or the city treasurer. It may be a blessing in disguise that the ordinance change was not approved. A little research on the ordinances of other cities using PPMFs may lead to a shorter and cleaner version. Don Moulin IAB MEETING HANDOUTS FOR MEETING DATED 10/09/07 City Council Meeting — September 18, 2007 — Business Session Item 2 Observations on the Proposed Changes to Ordinance Section 3.08.010 of Don Moulin, Member of the IAB Designated to Represent the IAB at this Meeting As stated in the staff report, the City Attorney and City Manager attended the September 12, 2007 meeting of the IAB to allow the members of the IAB to read and comment on the proposed change to the ordinance providing the mechanism for the City Council to appoint a qualified, professional portfolio management firm to invest a portion of the City Funds. The IAB members were favorably impressed by the thoroughness of the work of the City Attorney and in agreement with the thrust of the draft proposed by the City Attorney. Because of the significant change in authority (and responsibility) from the City Treasurer to the City Council for funds transferred to and invested by an independent portfolio management firm, the IAB suggested and the City Attorney agreed to add a subsection (c) describing the review and reporting responsibilities of the City Treasurer. The City Attorney drafted subsection (c) after meeting and receiving comments from the IAB. Don Moulin agrees with the description of the City Treasurer's role in subsection (c). However, Don believes it would be sufficient to briefly state after the words "Portfolio Manager shall", in the second line, routinely report to City Council through the City Treasurer, who shall review the reports and underlying activities of the Portfolio Manager and custodian of the City's securities and include those reports and his comments thereon in the City Treasurer's monthly report to the City Council pursuant to Section 3.08.050. Other observations: Change heading to "Investment of City Funds" Make letter labels of subsection uniform, either all caps, A.. B. and C. or (a), (b) and (c). IAB MEETING HANDOUTS FOR MEETING DATED 10/09/07 From: Donbarm(a)aol.com To: vorrantia(dla-ouinta oro ; crisitina(c swdinvestments com ; DDukePP—yahoo.com ; rrassi(a.verizon.net; tednalheodoreross.com Cc: ifalconer(&Ia-auinta.oro Sent: Monday, September 24, 2007 10:37 PM Subject: Re: Joint Meeting with City Council/Boards & Commissions I spoke with John about this joint meeting I will be in Hawaii on October 23 so I will not be present. I had previously communicated with John and Cristina about the September 18 meeting of the CC that I attended at which the CC voted 3 to 2 against the ordinance change that permitted the CC to engage a PPMF. I suggested to John and Cristina that we distribute the minutes of the Sep 18 meeting with the agenda package for the next meeting and obtain an audio tape of the full discussion at that CC meeting to listen to at the Nov meeting of the IAB. The joint meeting on Oct 23 precedes our next meeting so, to bring the IAB up to date on the Sep 18 action, John will distribute a copy of the staff report, the CC minutes on the PPMF matter and a CD of the complete discussion at the CC meeting. Cristina, I suggest that those IAB members who plan to attend the Oct 23 joint meeting with the CC get together shortly before to agree on the IAB's response when the PPMF topic is raised. To clarify how a PPMF would manage a portion of the City's funds and how an independent custodian would handle the funds for investment, I recommend that the IAB ask the mayor and other members of the CC if they would be willing to attend a presentation by a representative of a qualified, prestigious PPMF and a representative of the BNY to describe how they operate and answer questions about risks, returns and fees. We are not trying to change their position but believe that many of the comments at the Sep 18 meeting of the CC indicate some misunderstanding of how a PPMF would operate. Don Cristina, I used the email address used b the City for this and it was invalid. I trust you will receive it now. Don IAB MEETING HANDOUTS FOR MEETING DATED 10109i07 ,Subj: Re: Joint Meeting with City Council/Boards & Commissions iDate: 09/25/07 2:21:49 PM Pacific Daylight Time jFrom: Donbarm To: ifalconer(Mla-auinta.oro, kienson(o)rutan.com, cdsitinana swdinvestments.com, rrassi coverizon. net John: The actions of the CC on Sep 18 re the ordinance change were to be discussed by the IAB at its next regularly scheduled meeting. Since the IAB agreed not to hold an Oct meeting, the topic is planned to be covered at the Nov meeting. The joint meeting is set for Oct 23, before the IAB discusses this ordinance rejection. I suggested that those IAB members attending the joint meeting on Oct 23 get together to discuss their reaction to the CC's deliberations so that, if the CC raises the PPMF matter, the spokesperson for IAB knows the thinking of the other IAB members. This discussion could take place where board and commission members gather to await the call to join the CC's meeting. Alternatively, the chair of the IAB could ask members to call or email her with their views. If this constitutes a meeting requiring an agenda and notice under the Brown Act, so be it. John, thanks for bringing the Brown Act to my attention in this situat IAB MEETING HANDOUTS FOR MEETING DATED 10/09/07 Report to the Members of the IAB of the September 18, 2007 action of the City Council on the proposal to amend the ordinance to allow the City Council to engage an independent, professional portfolio management firm (PM) to invest a portion of the city's funds. After much discussion, the council rejected the change to the ordinance on a 3 to 2 vote with Osborne and Kirk in favor and Sniff, Adolph and Henderson against. Those opposed to the change equated the engagement of "a PM with trading authority" as "risky", "gambling with the City's money", and allowing "15 million of the City's money to be taken to Brazil" by an unscrupulous money manager. Those in favor of the change expressed interest in trying a PM for a year, then reevaluate. The City Attorney described the legal authority as complex. and tricky. Osborne and Kirk challenged her assertions of complexity and trickiness and opined that the Treasurer versus Council responsibility issue must have been addressed by other cities in California. When asked if she reviewed such supporting city ordinances the City Attorney responded that she had not done that. Henderson asked whether approval of the ordinance meant that the Treasurer would issue the RFP. The Treasurer responded that if the ordinance passed he would seek direction from the council before acting. This important distinction appeared to be lost by the opponents to the ordinance change. The Council referred to the Weimer situation and noted that in that defalcation, there was a separate custodian of the securities. There was collusion of the perpetrators. Comments of the opponents are summarized as follows: - Not focusing (or not understanding) the distinction between engaging an individual and a large, established, impeccable firm as a PM, - The incorrect presumption that a buy and hold policy is without risk and trading is risky, - Anecdotes of personal experiences of losses by trading that are not relevant, -A PM would only be engaged that has an impeccable track record, - Being influenced by the Weimer experience, and - Though not stated overtly, uneasiness with assuming responsibility for the actions of a PM. On several occasions, the city treasurer has indicated that he does not favor the engagement of a PM. The city manager agrees with the treasurer. The mayor and council members probably know the staff s position. The city attorney is presumed to be impartial. However, her studious analysis and wording of her draft of the ordinance relieving the treasurer of responsibility for the acts of a PM and placing that responsibility on the city council probably caused misgivings by some council members. Don Moulin