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2010 11 10 IABP.O. Box 1504 La QA, CnL)roenln 92247-1504 7 8 - 4 9 5 CAl.l.r: FAMHCo (760) 777-7000 LA QUIN IA, CALIFORNIA 92253 FAX (760) 777-7101 AGENDA INVESTMENT ADVISORY BOARD Caucus Room 78-495 Calle Tampico- La Quinta, CA 92253 November 10, 2010 — 4:00 P.M. CALL TO ORDER a. Pledge of Allegiance b. Roll Call 11 PUBLIC COMMENT - (This is the time set aside for public comment on any matter not scheduled on the agenda.) III CONFIRMATION OF AGENDA IV CONSENT CALENDAR Approval of Minutes of Meeting on October 13, 2010 for the Investment Advisory Board. V BUSINESS SESSION A. Transmittal of Treasury Report for September 2010 VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report — October 2010 B. Pooled Money Investment Board Reports —August 2010 and LAIF Conference Materials VII BOARD MEMBER ITEMS Vlll ADJOURNMENT PUBLIC NOTICES The La Quinta Caucus Session Room is handicapped accessible. If special equipment is needed for the hearing impaired, please call the Finance Department at 777-71 50, twenty-four (24) hours in advance of the meeting and accommodations will be made. Any writings or documents provided to a majority of the Investment Advisory Board regarding any item on this agenda will be made available for public inspection at the City Clerk counter at City Hall located at 78-495 Calle Tampico, La Quinta, CA 92253, during normal business hours. INVESTMENT ADVISORY BOARD MEETING October 13, 2010 I. CALL TO ORDER A regular meeting of the Investment Advisory Board was called to order at 4:00 p.m. by Chairman Park followed by the Pledge of Allegiance. PRESENT: Board Members Mortenson, Blum, Park, Spirtos and Rassi ABSENT: None STAFF PRESENT: John Falconer, Finance Director and Vianka Orrantia, Senior Secretary II. PUBLIC COMMENT — None III. CONFIRMATION OF AGENDA - Confirmed IV. CONSENT CALENDAR A. Approval of Minutes of Meeting on September 8, 2010 for the Investment Advisory Board MOTION — It was moved by Board Members Blum/Spirtos to approve the minutes of September 8, 2010. Motion carried unanimously. V. BUSINESS SESSION A. Transmittal of Treasury Report for August 2010 Mr. Falconer presented and reviewed the staff report for the month of August, advising the Board that the portfolio ended the month at $163 million with a decrease from the previous month by $17 million. The primary reason for the decrease in the portfolio was due to the following payments: pass through payments to other governments totaling $14 million, Sheriff Contract expenses totaling $1.3 million, the Col. Mitchell Paige field lighting totaling approximately $364,000, the Cove Fire Station totaling $245,000 and the Laguna de la Paz Sound wall at $171,000. In response to Board Member Blum, Mr. Falconer advised that as a result of the City widening Washington Street, the Laguna de la Paz Sound wall was originally approved by the County of Riverside as a county paid project. Further discussion ensued amongst the Board regarding the Laguna de la Paz sound wall, in addition to discussion of the Col. Paige field lighting. In response to Board Member Spirtos, Mr. Falconer clarified the $1,830 bank fees. Mr. Falconer advised that the only investment activity for the month of August was a roll over of one CD. Mr. Falconer further advised that the current yields are at .50% with a slight deincrease from the previous year's yields at .61 %. The City's rates will increase slightly due to maturing investments. Mr. Falconer stated that he feels that 2011 will remain consistent with 2010 and there is talk of price deflation of the market. In response to Board Member Blum, Mr. Falconer clarified Project Areas 1 & 2 of the Redevelopment Agency. In response to Board Member Blum, Mr. Falconer clarified Assembly Bill 939 (AB 939). In response to Board Member Blum, Mr. Falconer clarified the "Special Funds" revenue on page 8 of the report. In response to Board Member Spirtos, Mr. Falconer advised that upon the City Council's approval, the Board will be receiving a copy of the City's Comprehensive Annual Financial Report (CAFR), which will include a breakdown of the "Special Funds." In response to Board Member Mortenson, Mr. Falconer advised that due to the fact that the policy states that the maximum maturity can only be extended from three to five years, anything beyond is not permissible. MOTION — It was moved Board Members Rassi/Blum to review, receive, and file the Treasurers Report for August 2010. Motion carried unanimously. 2 VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report — September 2010 Mr. Falconer summarized page 2 of the Month End Cash Report. Mr. Falconer advised that at the request of Board Member Spirtos, the cash flow sheet on page 13 was amended to reflect the accruals from the previous month. Noted and Filed B. Pooled Money Investment Board Reports — July 2010 Noted and Filed C. Joint City Council/IAB Meeting Chairman Park advised the Board of the scheduled joint meeting with the City Council on November 9, 2010. In addition, Chairman Park advised of the upcoming ethics training available either through upcoming scheduled dates or via the internet. In response to Board Member Spirtos, Mr. Falconer advised that the agenda for the joint meeting with the City Council are the upcoming Investment Advisory Board work plan items, and if the Board has any other suggested items, those items can be brought forth for discussion at the meeting. Noted and Filed VII BOARD MEMBER ITEMS — None VIII ADJOURNMENT It was moved by Board Members Blum/Spirtos to adjourn the Investment Advisory Board meeting at 4:40 p.m. Motion carried unanimously. Sub"i ,bq. Vianka Orrantia Senior Secretary 3 INVESTMENT ADVISORY BOARD Business Session: A Meeting Date: November 10, 2010 ITEM TITLE - Transmittal of Treasury Report for September 30, 2010 BACKGROUND: Attached please find the Treasury Report for September 30, 2010. RECOMMENDATION: Review, Receive and File the Treasury Report for September 30, 2010. John M. Falconer, Finance Director MEMORANDUM TO: La Quinta City Council FROM. John M. Falconer, Finance Director/Tfeasuref SUBJECT: Treasurer's Report for September 30, 2010 DATE: October 29, 2010 Attached is the Treasurer's Report for the month ending September 30, 2010. 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 Be innin Purchased Notes Sold/Matured Other Endino Change LAIF Certificates of Deposit US Treasuries US GOO Sponsored Enterprises Commercial Paper Corporate Notes Mutual Funds $ 37.314,613 969,000 97,956,528 15,155,163 581,790 $ 10,750,000 10.000,000 (2) (2) (2) (2) 1 $ (1,150.000) (10.000,000) (1) (9,989.599) 0 0 (11,785) 6 $ 46,914,612 969.000 87.966,929 0 0 15.143,378 581,796 9.599,999 0 (9,989,599) 0 0 (11,785) 6 Subtotal $ 151,977,094 $ 20,750,000 $ 11,150,000 $ 10,001,379 $ 151,575,715 1 $ 401,379 Cash $ 11,536,399 1 8 3 $ 11,776,859 $ 240,460 11,776,859 Total $ 163,513,493 $ 20,750,000 $ 22,926,859 $ 10,001,379 $ 151,335,255 1 $ (12.178, 238) 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. John M. Falconer Date Finance Director/Treasurer 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 Treasurer's Commentary For the Month of September 2010 Cash Balances — The portfolio size decreased by $12.18 million to end the month at $151.34 million. The major reason for the decrease was the semi annual debt service payment of $11.22 million and Capital Improvement Project payments of $1.29 million, notable payments were for the Adams Street Bridge ($374,000); Cove Fire Station ($287,000); and, the Laguna de la Paz Sound wall ($154,000). Investment Activity — The investment activity resulted in an average maturity decrease of 1 day from the prior month to end the month of September at 107 days. The Treasurer follows a buy and hold investment policy and purchased one (1) U.S. Treasury Bill of $10 million to replace a $10 million U.S. Treasury Bill that matured. The sweep account earned $13 in interest income for the month of September and the bank fees for the month were $ 1,961 which resulted in a net decrease of $1,948 in real savings. Portfolio Performance — The overall portfolio performance had a five (5) basis point increase from the prior month and ended at .51 % for the month, with the pooled cash investments yield increased by six (6) basis points to yield .55%. The portfolio yield should continue to stay at these levels for the near future. At this time last year, the portfolio was yielding .53% which reflects the current interest rate environment. Looking Ahead The Treasurer is still concentrating on safety first and foremost. In the short term, the Treasurer will be maintaining LAIF balances at the maximum allowable percentage because its rate declines slower in a declining rate environment. The Treasurer will not be investing in non-TLGP corporate notes, non-TLGP commercial paper or Fannie Mae or. Freddie Mac Government Sponsored Enterprises (GSE) due to the current economic conditions affecting the financial markets. 3 E E E L N O d d d d d d C d V O z O z O z O z O z O 2 0 0 Z x W ` 0 a N m o a d 0 f = d J J J a d N m N N a m o U o mw 0� U LL LL d t� n N N U E J m m w m o w >. >, a 0 �i M m M i 0 0 c d � `i c c N N d = c C N 3 0 0 0 0 0 U 10 a L d m j 0 i W n o e___-_ E E E d n p n 2 p O O E N a N O O O O O O N 00 OO N C N d0 O c E �.E `N�wwNf9� nj c 0 o o op 0 N N U 0_ W E V V O O O O O O O O O O O O O O O O O O O O O e o N `v O O O O O e io n d O o o O v `� m � ooyNrn O Q � o rn lia Q � N 0 o 0 0 0 0 0 0 000 Oo0 � o 0 0 0 0 0 e �m a s n o 0 000o N o o LL J V t0 O O O N 10 N O O O O c� as 0000 o0000 000 000 0 00 mE �000 c e 0000a '" o0 O 00 o 0 0 IL x � o o n o0 000 0 00 � d m m N Q N N N E E d El RG- /H� ~ ` ,,,l;®.,, R4a G a:a 88 :)!)mEm a>E9 ;|!!!:{{:!, f!0 zziz !c c ! )) I\ Q G !Z \( \) 5 ,< / (!{ /////QQQQQ / - z9dwoewG �©d/%2QQ2t /) {{;;;;;;;;;;;;=l;>!i! \!.................../§ / //////----- ,; j !.!_:�§§!, < _ fggly {/C/9yd9pp; m T D � m m rn >�o 0 000 w 0 0 0 N N N O (D R Qt\ N O Q7 O O O O O O O O O O O O O a000 0 O O N N N a � n h o 0 m 0 0 vaa N m w D (n N N D t O v � m a L N � a c E E m C E � o 105 v — = L « T D 75 0 0 0 0 0 w 0 0 0 0 N N N N g � O M O t O M O Q7 Ol T O O O O O O O O O O a o 0 0 0 0 N CONv�- v � O a a O O O N N wawa O f w v v D N A A o m v D A i w 0 � � N i N O y h y E « � N E K U U LL c w > Em = Il. IL IL =z�553 7 a� mom Allflyumi! n$ en m_ n u- 8' e' Fg F g 8 LL c : E E ga�qu gpg F a e„8 6 �Ea>g �6rc�Ecav_ eET^v3zmg na a? E��a cm9 �o�_ I. o UVOaSo¢mSVw_n �m HI fill M -m �BP:m �m ilk 01 a i Enmm� m$" il Emm.m E= rmn o� m ouniP am a gilo�m- l _c m�m m as _ m8 m E�� _ m�nommo Yr&m i Fm m- _ppvl F Fm ._ ., vadm $.m - m$mMMSW 2 mm v$ OM 2rrvnmmmoa ann �smm gm.xmm gom.nmm„ „ FBI ON ----m p ygamu'immnna n�m E$ yawsm m_ E�nSwm e0 MIN mamN m8 � n�.mi�n� n$n�w� E '-amm _�_gqb mm m_a.m Eem- m &$mmNv mm paE w.-g Na `$`n m$nN e� GodSnurvom E ewm Elm Emr$m11 om :°.ry 6 $.mm mm°'w n8w 5n m.m e^emm _N�ryomm$ _ _ . . „ s M ."nam ^o^ $^gin m$$$mm P e e e w = Z84 8 RI- R„n 8 EgLL 8 E dHIMv Ain.; 9 City of La Condo Comparative Rates of Interest September 30, 2010 Oily of La Ou nta Vear Month Annualized Poolen Cash EamI Fiscal A 11 Average Matunt da s Three Man81 Treasu Six Month BiIISINote One Year Two YearNon-Financial Three Month LAIF Ra FY 0610] July 2006 493% 500%% 95 506% August 2006 494% 501%% 48 506%485% 485% Sept 2006 498% 501%% 53 495% Oct 2006 500% 5.02%% 6] 500% Nov2006 504% 503%% 62 496%510% Dec 2006 508% 5.04%% 80 4.94% 510% Jan 20W 5.18% 5.12%% 64 494% 5.13% Feb 2007 5. 19% 5,13%% 45 498%5.16% Mar200] 521% 503%% 6] 495% 5,16% Apr200] 5,20% 5,14%% 42 488%B21% May 200] 5.20% 505 %, % 32 a84% 521% June 2007 5.19% 4.88% 5.10% 85 4.1l81% 522% FY On08 Ju1y2007 5.21% 4.90% 5. 12% 129 4.81% 480% 5.25% August 200] 5.17% 485% 5.08% 109 4.59% 526% Sep12007 5.16 % 486% 5.06% 129 400% 5.2% Oct 2007 5.11% 485% 502% 116 395% 5.23% Nov 2007 5.03% 4.83 % 4.96% 99 3.34% 523 'Dec 2007 495% 3,43% 4.45% 123 3.39% 4% .96 Jan 2008 4.58% 333% 4.22% 96 231% 496% Feb 2008 4.12% 3.24% 3.85% 66 2.0]% 62 4.% Mar 2008 4.07% 2,83% 36]°% ]4 1.50% 462% Apr2008 345% 3.27% 341%% 82 1 ]0% 3. ]8°, May 2008 3.14 % 32]% 3.17% 63 1,92% 340% June 2008 3.09% 1,94% 2 86% 80 214 % 3.0]% FY 08/09 July 2008 2.99% 193°0 2])% 62 1.]0% 188% 229% 275% 218% 2 89 % 279% August2006 3.16% 1.92% 2.88% 51 1.69% 1.89% 2.14% 238% 2.08% 278% Sept 2008 2.81% 1.92% 2.64% 37 1.42% 1]9% 1.96% 2.00% 213% 277% Oct 2008 266% 2.61% 261% 29 0.90% 140% 172% 1.50% 207% 271 % Nov2008 2.38% 2.36% 2,36% 64 0,15% 0,49% 104% 1.25% 145°% 2,57% Dec 2008 160% 0.18% 142% 116 005% 025% 0.59% 0,88% 097% 2.35% Jan 2009 1.36% 0.18% 123% 62 0.15% 035% 043% 088% 0.31% 205% Feb 2009 1.23% 0,18% 1.11% 75 030% 050% 061% 088% 0,48% 1.87% Mar2009 126% 0,18% 1.13% 69 0,20% 0.42% 0.70% 0.88% 037% 1.82% Apr2009 094% 0.18% 0.85% 54 0.31% 033% 059% 088% 028% 161% May 2009 092% 0.18% 084% 80 0.16% 030% 053% 088% 0.23% 153% June 2009 085% 0.29% 0so°% 111 020% 0.35% 0.55°% 1.13% 026% 138°% FY 09/10 July 2009 0.69 % 0.30°% 0.65% 111 0,19% 0,28% 0,47% 1.00% 028% 104 % August 2009 064% 0.30% 0.61% 92 a16% 0.26% 046% 100% 024% 0,93% Sep12009 056% 031% 0.53% 112 0. 12% 0.19% 041% 1.00% 0. 19% 0.75% Oc12009 052% 0,31% 0,50% 90 008% 0.19% 038% 1.00% 0.19% 0.65% Nov 2009 056% 0.31% 0.53% 152 004% 0.14% 0,32% 075% 0.15 % 061% Dec 2009 0.56% 0.15% 0.51% 239 0,11 % 0.20% 0.16% 100% 0.16°% 057% Jan 2010 046% 0.15% 043°% 179 0.06% 0.14% 0.34% 088% 0.13% 056% Feb 2010 054% 0.16% 048% 162 0.13% 0.19% 032% 0.88% 0.15% 0.56% Me, 2010 0.50% 0.16°% 047% 172 0.15% 0.24% 038% 100% 0.20% 0.55% Apr2010 052% 0. 16% 0.48% 162 0.15% 024% 049% 100% 023% 0.59°% Mll 0.52% 0. 16% 0.48% 116 0.17% 0.22% 0.37% 095% 0.28% 056% June 2010 0.55% 0. 15% 0.51% 134 0.16% 0.22°% 032% 063% 032% 0.53% FY 10I11 July 2010 0.50% 0.15% 047% 119 0.16% 0.20% 030% 0.63% 0.28% 053% Augus12010 0.49% 0. 15% 0.46% 108 015% 019% 0.26% 038% 0.25% 051% 10 _O O N r C G � Y ) j $" = C w O mo w p C U = m « o = U N 0 0 0 0 L N O a� a 0 ■ l 0 0 0 0 O O o 0 OD to N V N O O O O d a N IN IC E 'E N N w Q d Q O C O N W a N D N C I < C Q m _ N C N E m O � I T c rn J �I' Leo H LL N of CO c Z E N m � w a O � N C c o I F 14Q E N m O c t N N a of a ml N � ZI c o LE w F d £ N C O jp O � x fl. Q i1jn Q I 1 11 INVESTMENT ADVISORY BOARD Correspondence & Written Material Item A Adjourned Meeting Date: November 10, 2010 TITLE: Month End Cash Report — October 2010 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. ohn M. Falconer, Finance Director O m m N m Q N m O m O O N O 1� p P Ol Q 10 P m 00 h h Q r N r n M M m_ m w m M i(1 N VI W (O (O P yWj N N t 0 12 0 o O w i Eo 0 o mmom MHO W vnNnm°W' O O O 1 O N N N W M W W r M O> N W W W M N q N Q U O O p M N W M (W] 10 N v N O O O N N W W Q m 0 r M N U `ow W W m W m N W m m 0 W o 0 W 0 W 0 co ai o vi ci o o a LL N O N N m m O W W W W m N M W (O W m m m m 16 16 16 p po n w N m N m N f m N O Y 20 N LL O O 00 O O O N C O O O O O O O 3m N N N _ pN N 10 N p N 3 INO W (O !O W M N N N N pQj W 6 W W O W N O N h W M N N N 3 ^ w m m wwm m�W,j vmi, v a LL m yj O O N m P O O N Nf� m N O O N O r O h m m _ 0 rn m o � m � w O O M O �✓J ` � _cm me a m« 2 m QN'm; � � N 3 . o m L° c c D U m r N m m •• E `m E E Z m « T r o d Fi 3 O LL_ c a E 2 a y 2 5 m O> N O] N 9 ry 9 D T m n U C a J N O W �p N N p N J V ❑m �f7gU�>Oarw ¢ ¢ w¢m -,z��LL�a�-,m o 6 ko, N hU %a Bill Lockyer, State Treasurer Inside the State Treasurer's Office PMIA Performance Report verageaturityn da s) rj 10/14/2010 0.48 0.49 184 10/15/2010 0.48 0.49 184 10/16/2010 0.48 0.49 184 10/17/2010 0.48 0.49 184 10/18/20101 0.48 0.491 183 10/19/2010 0.48 0.49 182 10/20/2010 0.48 0.49 182 10/21/2010 0.48 0.49 178 10/22/2010 0.47 0.49 183 10/23/2010 0.47 0.49 183 10/24/2010 0.47 0.49 183 10/25/2010 0.47 0.49 182 10/26/2010 0.48 0.49 181 10/27/2010 0.481 0.491 185 10/28/2010 1 0.461 0.481 184 LAIF Performance Report Quarter end 09/30/2010 Apportionment Rate: Earnings Ratio: Fair Value Factor: Daily: Quarter To Date: Average Life: 0.51 % .00001404107774697 1.001914850 0.47% 0.51 % 185 PMIA Average Monthly Effective Yields SEP 2010 0.500% AUG 2010 0.513% JUL 2010 0.531% Pooled Money Investment Account Portfolio Composition $67.6 Billion 09/30/10 Loans 15.08% Corporate Bon 0.00% Commercial Paper 9.73% Time Deposits 6.26% CDs/Bt 10.94° Agencies Mortgages 10.53% 0.89% Treasuries 46.57% 3 FRB: H.15--Selected Interest Rates, Web-Unty uany upaate--Uctooer /y, /viv rage r vi. Federal Reserve Statistical Release H.15 Selected Interest Rates (Daily) Skip w C("",It Release Date: October 29, 2010 Weekly release dates I Historical data I Data Download Program (DDP)_I About I AnnOmlCeInCluS Daily update Other formats: Screen reader I ASCII The weekly release is posted on Monday. Daily updates of the weekly release are posted Tuesday through Friday on this site. If Monday is a holiday, the weekly release will be posted on Tuesday 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 October 29, 2010 2010 2010 2010 2010 Instruments Oct Oct Oct Oct 25 26 27 28 Federal funds (effective) 1 2 3 0.19 0.19 0.19 0.19 Commercial Paper 3 4 5 6 Nonfinancial 1-month 0.23 0.19 0.20 0.20 2-month 0.21 0.21 0.20 0.21 3-month 0.20 0.20 n.a. n.a. Financial 1-month 0.19 0.22 0.20 0.20 2-month 0.23 0.22 0.22 0.23 3-month 0.26 0.22 0.24 0.25 CDs (secondary market) 3 7 1-month 0.23 0.23 0.23 0.23 3-month 0.27 0.27 0.27 0.27 6-month 0.35 0.35 0.35 0.35 Eurodollar deposits (London) 3 8 1-month 0.33 0.33 0.33 0.33 3-month 0.40 0.40 0.40 0.40 6-month 0.60 0.60 0.60 0.60 Bank prime loan 2 3 9 3.25 3.25 3.25 3.25 Discount window primary credit 2 10 0.75 0.75 0.75 0.75 U.S. government securities Treasury bills (secondary market) 3 4 4-week 0.13 0.14 0.14 0.14 3-month 0.14 0.14 0.14 0.13 6-month 0.18 0.18 0.18 0.18 1-year 0.22 0.22 0.22 0.22 Treasury constant maturities - Nominal 11 1-month 0.13 0.14 0.14 0.14 3-month 0.14 0.14 0.14 0.13 6-month 0.18 0.18 0.18 0.18 1-year 0.23 0.23 0.23 0.23 2-year 0.37 0.40 0.40 0.37 3-year 0.55 0.59 0.64 0.56 5-year 1.20 1.27 1.34 1.23 7-yeas 1.89 1.98 2.06 1.97 10-year 2.59 2.67 2.75 2.69 20-year 3.56 3.66 3.72 3.70 30-year 3.91 4.00 4.06 4.05 Inflation indexed 12 5-year -0.42 -0.36 -0.25 -0.29 7-year -0.07 0.00 0.11 0.06 10-year 0.45 0.52 0.62 0.57 http://www.federalreserve.gov/Releases/H15/update/ 11/1/2010 4 FRB: H.15--Selected Interest Rates, Web-unly wally upaate--UCL0Vl7i G7, LV 1 V 20-year 30-year Inflation -indexed long-term average 13 Interest rate swaps 14 1-year 2-year 3-year 4-year 5-year 7-year 10-year 30-year Corporate bonds Moody's seasoned Aaa 15 Has State & local bonds 16 Conventional mortgages 17 n.a. Not available. ------------------------------------------- Footnotes 1.27 1.34 1.40 1.37 1.35 1.42 1.48 1.45 1.10 1.16 1.21 1.17 0.37 0.39 0.39 0.38 0.52 0.55 0.57 0.54 0.74 0.80 0.83 0.79 1.04 1.12 1.18 1.14 1.38 1.48 1.55 1.51 1.99 2.10 2.17 2.15 2.58 2.69 2.77 2.76 3.50 3.59 3.66 3.68 4.69 4.78 4.80 4.81 5.72 5.80 5.84 5.85 3.96 4.23 1. The daily effective federal funds rate is a weighted average of rates on brokered trades. 2. weekly figures are averages of 7 calendar days ending on Wednesday of the current week; monthly 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 settled by The Depository Trust Company. The trades represent sales of commercial paper by dealers or direct issuers to investors (that is, the offer side). The 1-, 2-, and 3-month rates are equivalent to the 30-, 60-, and 90-day dates reported on the Board's Commercial Paper Web page (www.federalreserve.gov/releases/cp/). 6. Financial paper that is insured by the FDIC's Temporary Liquidity Guarantee Program is not excluded from relevant indexes, nor is any financial or nonfinancial commercial paper that may be directly or indirectly affected by one or more of the Federal Reserve's liquidity facilities. Thus the rates published after September 19, 2008, likely reflect the direct or indirect effects of the new temporary programs and, accordingly, likely are not comparable for some purposes to rates published prior to that period. 7. An average of dealer bid rates on nationally traded certificates of deposit. G. Source: Bloomberg and CTRB ICAP Fixed Income & Money Market Products. 9. Rate posted by a majority of top 25 (by assets in domestic offices) insured U.S.-chartered commercial banks. Prime is one of several base rates used by banks to price short-term business loans. 10. The rate charged for discounts made and advances extended under the Federal Reserve's primary credit discount window program, which became effective January 9, 2003. This rate replaces that for adjustment credit, which was discontinued after January 8, 2003. For further information, see www.federalreserve.gov/bcarddocs/press/bcreg/2002/200210312/default.htm. The rate reported is that for the Federal Reserve Bank of New York. Historical series for the rate on adjustment credit as well as the rate on primary credit are available at www.federalreserve.gov/releases/hl5/data.htm. 11. Yields on actively traded non -inflation -indexed issues adjusted to constant maturities. The 30-year Treasury constant maturity series was discontinued on February 18, 2002, and reintroduced on February 9, 2006. From February 18, 2002, to February 9, 2006, the U.S. Treasury published a factor for adjusting the daily nominal 20-year constant maturity in order to estimate a 30-year nominal rate. The historical adjustment factor can be found at www.treas.gov/offices/domestic-finance/debt-management/interest-rate/itcompositeindex_historical.shtml. Source: U.S. Treasury. 12. Yields on Treasury inflation protected securities (TIPS) adjusted to constant maturities. Source: U.S. Treasury. Additional information on both nominal and inflation -indexed yields may be found at www.treas.gov/offices/domestic-finance/debt-management/interest-rate/. http://www.federalreserve.gov/Releases/Hl 5/update/ 11/1/2010 5 FRB: H.15--Selected Interest Rates, Web -Only Daily update--umoer /y, /viv asp 13. Based on the unweighted average bid yields for all TIPS with remaining terms to maturity of more than 10 years. 14. International Swaps and Derivatives Association (ISDA?) mid -market par swap rates. Rates are for a Fixed Rate Payer in return for receiving three month LIBOR, and are based on rates collected at 11:00 a.m. Eastern time by Garban Intercapital plc and published on Reuters Page ISDAFIX?l. ISDAFIX is a registered service mark of ISDA. Source: Reuters Limited. 15. Moody's Aaa rates through December 6, 2001, are averages of Aaa utility and Aaa industrial bond rates. As of December 7, 2001, these rates are averages of Aaa industrial bonds only. 16. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Thursday quotations. 17, Contract interest rates on commitments for fixed-rate first mortgages. Source: Primary Mortgage Market Survey? data provided by Freddie Mac. Note: Weekly and monthly figures on this release, as well as annual figures available on the Board's historical H.15 web site (see below), are averages of business days unless otherwise noted. -------------------------------------------------------------------------------------------- Current and historical H.15 data are available on the Federal Reserve Board's web site (www.federalreserve.gov/). For information about individual copies or subscriptions, contact Publications Services at the Federal Reserve Board (phone 202-452-3299, fax 202-728-5886). Description of the Treasury Nominal and Inflation -Indexed Constant Maturity Series Yields on Treasury nominal securities at "constant maturity" are interpolated by the O.S. Treasury from the daily yield curve for non -inflation -indexed Treasury securities. This curve, which relates the yield on a security to its time to maturity, is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market. These market yields are calculated from composites of quotations obtained by the Federal Reserve Bank of New York. The constant maturity yield values are read from the yield curve at fixed maturities, currently 1, 3, and 6 months and 1, 2, 3, 5, 7, 10, 20, and 30 years. This method provides a yield for a 10-year maturity, for example, even if no outstanding security has exactly 10 years remaining to maturity. Similarly, yields on inflation -indexed securities at "constant maturity" are interpolated from the daily yield curve for Treasury inflation protected securities in the over-the-counter market. The inflation -indexed constant maturity yields are read from this yield curve at fixed maturities, currently 5, 7, 10, and 20 years. Weekly release dates I Historical data I Data Download Program (DDP). I About I Announcements Daily update Other formats: Screen leader I ASCU Statistical releases Hone I Economic rewateh,aad_data Accessibdm I Contact Us Last update: October 29, 2010 http://www.federalreser,ve-gov/Releases/H15/update/ 11/1/2010 6 FRB: Commercial Paper Rates and uutstanatngs E, .. Federal Reserve Release Release I About I Announcements I Clutstandings I Volume statistics I Year-end I Maturity Uistribution I Data Download Program (DDP) Data as of October 29, 2010 Commercial Paper Rates and Outstanding Derived from data supplied by The Depository Trust & Clearing Corporation Posted November 1, 2010 Discount rates 7Termnonfinancial AA AZ/P2 nonfinancial AA financial AA asset -backed 1-9 0.20 0.34 0.19 0.29 7-day 0.19 0.32 0.19 0.29 15-day 0.22 0.37 0.19 0.33 30-day 0.20 0.38 0.20 0.28 60-day 0.20 0.37 0.22 0.28 90-day 0.25 0.33 0.26 0.32 Yield curve Fi lCei oasts — — — AA nonfinioci;d ••.•••••••• A21P2 nonfunwicial —�.— AA Financial in ;.1 -,, 1 7 15 30 Days to Maturity MU M M 7 http://www.federalreserve.gov/Releases/CP/ 1 11 1/2010 FRB: Commercial raper xares anu UutstauutttV,a Discount rate spread Thirty -day A21P2 less AA nonfinancial commercial paper (daily) — spread --- spmtd, 5•dny moving ave Basis points 800 700 600 500 400 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Discount rate history Thirty -day commercial paper (daily) Percent — AA nti nt3n ndad AJP2 nonfinancial Ca -- AA iinanaont s 2001 2002 2003 2004 2005 2006 2007 2008 2009 2U1U Outstandings Weekly (Wednesday), seasonally adjusted 7 6 5 4 3 2 1 0 http://www.federalreserve.gov/Releases/CP/ I1/1/2010 8 l ": Commercial raper Kates arm Uutstanatngs Billions of dollars Billions of dollars T- — Nontin Gnuul (right stile) i -- — Financial 1l4ti 5c de) i .. .aIV l 240 l; 200 I '+ i h iKl A 160 ty� t� tY�e i It,k 120 80 2001 2003 2005 2007 2009 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 I Data Download Program_(DDP) Home I Statistical releases Accessibili ContactUs Last update: November 1, 2010 http://www.federalreserve.gov/Releases/CP/ 11/1/2010 9 Recent Bill Auction Results rap'o 1 Ul 1 TreesuryDirect I one . d1Y.IrII Anot 0scneots, UaI,&RemIt, , Lalesl. Aatt'l Data I Faw II e[IAl-OK -I Rrlu Os Recent Bill Auction Results $e<U rlty ISSY¢ MBIIInty DI$[OV.I In ve St TinC Prlce CVSIP TNT Dit¢ Date Rate 46 Rafe M Per §100 4-WEEK 10-28-2IO It 26210 0. 130 O.112 99989528 912795W90 56 DAY 10-284010 12-23 2010 0.150 0.1.52 99.97666E 912795X48 13-WEEK 10-28-20ID 01-272011. 0.130 0.13E 99962139 912795X92 26 WEEK 1048 ]0ID 04-284011. 0.110 0.173 99.914056 9127952N0 4 WEEK 30-214010 11-18 2010 0. 35 0.13E 99.989500 912795UJS 56-DAY 10�21-2010 12-16-2010 0.150 0.152 99.92666E 91'2795UK5 13-WCGK 10-21 2010 01-20-2011 0.335 0.137 99.SG5075 91279SX89 26 WEEK 10-21 2010 N 21-2011 0.120 Il .113 99.914056 9127952412 52-WEEK 30-21- 2010 1020-2011 0.225 0.229 99J22500 912]'352K6 4-WEEK 10-14-2010 11 12 2010 0.140 0.142 99.98872E 912795VI72 56-DAY 10-19-2010 12-09-ID10 0, 150 0.152 99.91666E 91279SX30 1 13-WEEK SO-14-2010 01 13-2011 0, 125 0.12E 99.96840) 912195UXE 26.WEEK 10-14-2010 04-14-2011 0.165 0IE7 99.916583 91219521.4 9-WEEK 10-01-2010 It 04-2010 0.135 0.1.3E 99,989503 912795W56 56-DAY 10-0) 2010 12-W 2010 0.145 0.14E 99.911444 912E95W98 13-WEEK 10-02-2010 O1-06-2011 0.130 0,132 99.967139 912195X/t 26-WEEK 10-012010 04-0E-2011 0.185 0.188 lit 906472 912115YD0 4-WEEK 09-30-2010 30-28-2019 0.080 0.081 99.993118 9127954949 5E-OAY 09-304010 11-26-2010 OA30 0. 132 9997941E 12E95W80 13-WFFR 09-30-2010 12-30-2010 0.155 0.19 99.960819 11.229SX55 26-WFEK 0o-30-20ID 03-31-2011 0.190 0. 193 91 903944 912195239 4-VdFFK 09-23-0010 10-21-2010 OA15 O.ID "ASIO56 912195UH] 56-DAY 09-23-2010 i1- Is- 2010 0,145 0.14E 99,9E1444 91279SU18 13-WEEK 09-23-2010 12-23-2010 GA60 OA62 99.959556 91279SX40 26-WEEK 09-23-2010 03-24-2011 0. 195 0,190 99.90141E 912E952H3 52-WEEK 09-23-3010 09-22-2011 0.265 0.269 99 ]32056 9121952FE 4-WEEK 09-154010 10-14-2010 0.300 0.10E 99.992222 912195W31 9-CAY 09-16-2010 11-12-2010 0.145 0.14E 99.9EE042 912E95WE2 13 WEEK 09-16-20E0 12-16-2010 0. 140 0.142 99.964611 911)95UK5 26 WEEK 09-16-2010 03-17-2011 0.190 0.t93 99.9039,14 9111952,35 4-WEEK 09-09-2010 10-01-2010 0.090 0.091 99.993000 9 2MW23 56-DAY 09-09-2010 11-04-2010 0.120 0.122 99.9B1333 912/95WS6 l3-WEEK 09-09-2010 12-09-2010 0.135 0.137 99,965875 91219SX30 26 WEEK 09 09-2010 03-10-2011 0.180 0.133 99.909000 912195V99 4-WEEK 09-02-2010 09-30-2010 0.160 0,162 99.987556 912195VC2 56-DAY 09 02-2010 10-28-2010 0.125 O.II1 99,980556 912E95W49 13-WEEK 09 02-2010 12-02-2010 0.145 0.14E 99.96334E 912E95W98 26 WEEK 09 02-2010 03-03-2011 0.190 0.193 99.903944 912E952D2 2LDAY 09 26 2010 09-16 2010 0,1E0 0.112 99 990083 912E95V84 4WEEK 08 26-2010 09 23 2010 0. 155 0.15E 99.937944 912795LI90 Effe<hve With the 11/2/98 auction, all hills are authored using the Single -priced method, €reedc------.ftlymlatnnACt I Lax 9 ,U:cr e IPr_�a�y. D,L 111 n,rres 1<e ue 3elmsa C1,1601n, I ALrossiUII, I Qa1=-Qrlailb it S. FI,Emlert rf lhl T11,1try, RIA"Ll a O' P Gi c Oepp 10 http://www.treasw-ydirect.gov/RI/OFBills 11/1/2010 Recent Note, Bond, and 11Y5 Auction Kesults ragc 3 V1 I TreasuryDirect H lr . IOsuWHo If I IA, plm an 11s D111 A Vl.ft L IU t Alrtclll Dli, . Recely 1011, eo,d and TIPS Auction Resulrf Recent Note, Bond, and TIPS Auction Results security Term Type TeNre Maturity IN, ... ft Im"I Prlce 00 CDSIP Dote Dale Rote cN % per$1 2-YEAR NOTE 11-01-2013 10-31-7012 0.325 0.400 99.950315 91202➢PD5 SYEAR NOTE 11-01-Htl 10-3]-20t5 1350 1.33U 99.614432 91202BPEr 2-YEAR NOTE 11A 12030 10-31 -20t7 t8I5 1.910 99.INIE26 912828PFI 4-YEAR 6-MONTH THIS 10 29 2010 04-15-20 t5 0.500 -0.550 105.509607 41.28281113 3-YEAR NOTE 30-15-2010 10-15 2013 0.500 0, 569 99.795046 91292BPBO 9'YEAR 10-MONTH NOTE 10. 5-2U10 08-15 2020 2625 2.475 101.298742 912828NT3 29-YEAR 10 MONTH BOND 10-15-2010 08-15 2040 3.875 3852 100.397647 912810QK7 2-YEAR NOTE 09 30 2010 09 30 2012 0375 U.441 99 8GB724 912828N%4 I 5-YEAR NOTE 09 30-2010 09 30 2015 121U 1. 260 99'95,69. 112828N29 2-YEAR NOTE 09 30 2010 09-30-201I 1B25 1890 99.902081 91282➢PA2 3-YEAR NOiF U9-15-20]0 U9-15-2013 11150 U.I90 11 NEIN42 912828NY2 9-YEAR ]0-MONTH T1 U9-35-2010 U7-15-2➢211 1250 1019 IU'2A0918➢ 912626NMS 9-YEAR 11-MONTH NOTE U9-15-2010 U8-15 2020 2.N25 2.620 99.607195 91282SN13 29 YEAR 11-MONTH BOND 09-15-2010 08-15-204U 3.815 3.820 50019]U530 912810QK7 2 YEAR NOTE 08-31-2010 Ofi-31-2012 0.3I5 0 498 99. 155524 912828PM7 5-YEAR NOTE 08-31 2010 08-31-2015 1.250 1.324 99.102797 912028NV8 7 YEAR NOTE 08-31-2010 08-31-2012 1.875 1.989 99.258493 912029Nw6 29 YEAR 6'MONTH TIPS 08-31-2010 02-15-Moil 2.125 1768 1.09.U86149 912810QF8 3 YEAR NOTE 0➢-16-2010 08-15-2013 0 750 0.844 99 ]22358 112828N110 10-YEAR NOTE 08-16 2010 08-1.5-2020 2,625 273D 99.086655 912829NT3 30-YEAR BOND 08-16-2010 08-15-2040 3.875 3.954 98.619,29 912810QK1 2-YEAR NOTE 08-02-2010 07-31-2012 0.625 0.665 92920863 913828NQ9 5YEAR NOTE 08-02-2010 01-31.-2015 1 750 1.296 99,7811 ➢6 912828NP1 2-YEAR NOTE 08 02-2010 01-31-2012 2.375 2.394 99.878150 912628NN7 3YEAR NOTE 07 Q5-2010 01-15-2013 1.000 1.055 99.838004 912826NN6 9 YEAR 10-MONTH NOTE 02-15-2010 05-15-2020 3.500 3.119 103,199671 912825NDB ID YEAR TIPS 07-15-2010 01-15-2020 1250 1.295 99i29194 91282"118 29 YEAR 30-MONTH BOND 07 15-2010 05-15-2040 4.375 4880 105.053ro" 912810QI14 2-YEAR NOTE 06-30-2010 06-30-2012 0.525 0.238 99.726070 912910NS5 5-YEAR NOTE 06-30-2010 06-30-2015 1.015 1.995 99.431646 912828NIO 1-YEAR NOTE 06-30-2010 06-30-2012 2, 500 2.575 99.522396 e2826NK2 3-YIAR NOTE 06-15-2010 06-15-2013 1125 1320 99.720987 912828Nll9 9-YAP 11 MONTH NOTE U6-15-2010 05-15-2020 3.500 3342 102.169092 912828NDB 29 -YEAR 11-BON TH BOND 06-15-2010 05-15-2040 4.375 4.182 103.270808 912910QH4 2. YEAR NOTE 06-01-2D10 65-31 -2012 0750 0J69 99 962406 912626NE6 5-YEAR NOTE 06-01-2010 05-31-2015 2.125 2.130 99.976355 912828NE3 I YEAR NOTE 06 01-2010 05-31-2017 2 150 2 815 99'589691 912800NO1 3YEAR NOTE 05-17-2010 05-15-2013 1, 375 1A 14 99,885991 91282811L0 10-YEAR NOTE 05-11-2010 05-15-2020 3.500 3.540 99.598723 912828ND8 30-YFAR BOND 05-11-2010 05-15-2040 4.375 n 490 98.114367 912810QH4 Denotes Tin bond; all other TIPS without asterisks are notes I reedoi, of Inconrcqjun Act I LNw & Gu,ftrce I Prlydey & Lepal r r cl I 1ol tol.111 T H,v A 1 pe 1 t I A ceSSL IY I Data Quality --- -- U.., 11 r erll of the T ry. HU P1P. 1111 F hl<'Gn FT 11 http://www.treasurydirect.gov/RI/OFNtebnd 11/1/2010 City of La Crime Cash Flow Budget to Actual September 30, 2010 Cash Basis Budget Actual Accrual/ Adjusted Total Variance Account 09110 09/10 Adjustment 09/10 Over Under Notes Property Tax/ Tax Increment - - Transient Occupancy Tax 133,056 164,518 164,518 31,462 Sales Tax 296,176 385,798 385,798 89,622 Sales Tax higher than budgeted SllverRock Golf 109.343 148,945 148,945 39,602 Library 456 (456) Riverside Cc Transportation Commission _ Other revenues 1,315,804 1,147,031 1.147031 168,773 Did not receive S921, in Gas Tax revenue Revenues 1,854,835 1,846,292 1,846,292 (8,543) Expenditures Salaries B Fringe Benefits 876,595 790.564 790,564 (86,031) Other expenditures 2162,021 998,593 998,593 1, 163,428 Did not pay September Police invoice 3,038,616 1,789.157 1,789,157 1, 249,459 Subtotal 237,522 211,573 211,573 (25,949) Redevelopment Agency Debt Service (Principal/Interest/Pass Through) 11,252,697 11,252 700 11,252,700 3 Subtotal 11,490,219 11,464,273 11,464,273 25946 1,2391939 1,239,939 1,239,939 Capital Projects Total Expentlitures 15,768,774 14,493,369 14,493,369 1,2]5,605 Net Revenues/Expentlitures (13,913,939) 12,647,0]7) (12,U7,077)1 (1,283,948 NOTE 1: Expenditures are budgeted at 8.34 % per month Difference between actual and budget (Underspent) DEPARTMENT Overspent Notes GENERAL GOVERNMENT (103,706) CITY CLERK (12.017) COMMUNITY SERVICES (32.878) FINANCE 5.657 BUILDING 8 SAFETY (73,494) PUBLIC SAFETY (169.844) PLANNING (14,892) PUBLIC WORKS: 43,364 444,538 SUBTOTAL -GENERAL FUND Library Gas Tax Federal Assistance JAG Grant Slesf (Cops) Revenue Indian Gaming Lighting 8 Landscaping - RCTC Development Agreement AB 939 (244) Quimby - 'Jnfrastructure - Preposition 1 B - South Coast Air Quality (4,079) .Transportation Parks 8 Recreation Civic Center Library Development Community Center - IStreetFacllity i., Park Facility - Fire Protection - Ads In Public Places (13,593) Interest Allocation Equipment Replacement (38,539) Information Technology (32,279) Park Maintenance Facility (37,563) SilverRock Golf (47, 562) SllverRock Reserve LQ Public Safety Officer (167) Housing Authority 488 Finance Authority (1,066) Capital Improvement - Total 619.142 12 INVESTMENT ADVISORY BOARD Correspondence & Written Material Item B Adjourned Meeting Date: November 10, 2010 TITLE: Pooled Money Investment Board Report for August 2010 and LAIF Conference Material BACKGROUND: The Pooled Money Investment Board Report for August 2010 is included in the agenda packet. Also enclosed are the LAIF Conference materials that were distributed at the October conference attended by Board Members Blum and Mortenson and the Treasurer. RECOMMENDATION: Receive & File �M John M. Falconer, Finance Director POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF AUGUST 2010 WITH AUGUST 2009 (DOLLARS IN THOUSANDS) AUGUST 201011 AUGUST 2009 CHANGE Average Daily Portfolio $ 66,415,410 $ 62,966,584 $ +3,448,826 Accrued Earnings $ 28,970 $ 49,488 $ -20,518 Effective Yield 0.513 % 0.925 % -0.412 % Average Life -Month End (In Days) 194 203 -9 Total Security Transactions Amount $ 17,743,081 $ 28,886,787 $ -11,143,706 Number 364 586 -222 Total Time Deposit Transactions Amount $ 1,832,500 $ 2,608,000 $ -775,500 Number 84 102 -18 Average Workday Investment Activity $ 889,799 $ 1,499,752 $ -609,953 Prescribed Demand Account Balances For Services $ 1,375,427 $ 1,105,575 $ +269,852 NOW Account Average Balance $ - $ - $ 0 1 BILL LOCKYER TREASURER STATE OF CALIFORNIA INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED) August 31, 2010 DIFFERENCE IN PERCENT OF PERCENT OF PORTFOLIO FROM TYPE OF SECURITY AMOUNT PORTFOLIO PRIOR MONTH Government Bills $ 24,963,909 36.72 -0.78 Bonds 0 0.00 Notes 6,650,737 9.78 +0.07 Strips 0 0.00 Total Government $ 31,614,646 46.50 -0.71 Federal Agency Debentures $ 1,089,821 1.60 -0.01 Certificates of Deposit 6,995,018 10.29 +0.53 Bank Notes 200,000 0.29 0 Bankers' Acceptances 0 0.00 0 Repurchases 0 0.00 0 Federal Agency Discount Notes 6,045,527 8.89 -0.95 Time Deposits 4,198,150 6.17 +0.04 GNMAs 67 0.00 0 Commercial Paper 5,500,650 8.09 +1.06 FHLMC/Remics 620,234 0.91 -0.02 Corporate Bonds 100,054 0.16 -0.02 AS 55 Loans 351,540 0.52 +0.01 GF Loans 10,977,200 16.14 +0.07 NOW Accounts 0 0.00 0 Other 300,000 0.44 0 Reversed Repurchases 0 0.00 0 Total (All Types) $ 67,992,907 100.00 INVESTMENT ACTIVITY AUGUST 2010 JULY 2010 NUMBER AMOUNT NUMBER AMOUNT Pooled Money 364 $ 17,743,081 438 $ 21,401,909 Other 18 2,584,001 11 $ 2,202,466 Time Deposits 84 1,832,600 163 $ 4,049,300 Totals 466 $ 22,159,582 612 $ 27,653,675 PMIA Monthly Average Effective Yield 0.513 0.531 Year to Date Yield Last Day of Month 0.522 0.531 r^. Pooled Money Investment Account Portfolio Composition $68.0 Billion 08/31 /10 Loans Corporate Bon( 0.16% Commercial Paper 8.09% Time Deposits 6.17% CDs/1 10.5 Agencies Mortgages 10.93% 0.91% Treasuries 46.50% BOARD MEMBER ITEMS THE GLOBAL ECONOMIC OUTLOOK: Weak Cyclical Recovery Hindered by Structural Impediments Presented to the Local Agency Investment Fund (LAIF) Conference October 21, 2010 v i * {j';j) Maria Third Avenue, i Ramirez, Wr j� /f��Q 1�/j['j� 676 Third Avenue, ll'^floor 1V11 �� New York, NY 10017 Maria A Ramirez President & CEO The Global Economy in 2010/2011 • Sub -Par Growth • Emerging economies outperform developed • Tighter fiscal / loose monetary policy mix in developed economies • Tighter monetary policy stance leads to appreciating emerging market currencies • China attempts to shift growth profile • Domestic demand to replace exports and investment • Modest yuan appreciation to dampen inflation • Commodity prices key off China growth • U.S. grows, but at a disappointing pace as past excess is corrected and policy stimulus fades • Core inflation benign as over -capacity limits pricing power • Weak job growth Wdtl R.Knlaem1—.1nc. The Global Economy in 2010/2011 Eurozone growth suppressed by weak domestic demand and fiscal adjustment • Germany leads — southern Europe and Ireland stagnate • Inflation below target — ECB keeps policy rate steady but exits special facilities • Japanese growth dependent on external demand and business investment • Deflationary pressures remain stubborn • Weak political leadership inhibits policymaking ability • More sensitive to JPY— increased intervention risk • Markets favor fiscal restraint -positive fundamentals • Risk adverse investors desire ample liquidity • Bank lending remains weak — bond yields relatively low • USD trades in 1.25-1.45 range versus the Euro and 80-95 range versus the Yen Marla Fiorinl Ramie; Inc. Tepid Recovery Underway, Limited By Ongoing Correction of Earlier Excesses 10.0 9.0 8.0 7.0 6.0 • 8.0 g 4.0 3.0 b rr m 2.0 -.III III S 1.0 0.0 ass .1.0 .2.0 a.0 Ofvroaone 4.0 = oJaPan = mLaiin America S,g - OW.'H pan As is -- O Worts 4t.0 Source:MRt 2009 2010 rest 2011 Rat Real GDP Growth, Annual Average Basis Marla Flannl Ramirez, Inc. 4 Maria iionni Ramirez. Inc. 6 Mena ROAM Ramirez, Inc. THE UNITED STATES Economic data continue to fluctuate, with markets and pundits tending to be whipsawed as they react to gyrations which mostly amount to statistical noise within a sub -par overall trend. The big picture remains that the corrective process following burst credit and asset price bubbles promises to limit economic growth for an extended period of time, which in our view encompasses the remainder of this year and at least well into 2011. While a "double -dip" is not our central forecast, with the economy growing close to stall speed, there certainly are elevated risks of a renewed slump. IGe FW.1 Paminz, Inc. Pace of labor market recovery will be key for consumer spending & overall GDP. M d. F.ft Ramie; Inc. Labor Market Carnage Unprecedented in Post -War Era --- �— �_ PercentJob Losses in Post WWll Recessions i —19e9 .1953 —low —19" —1969 —192e 1990 —19L1 .1990 —2001 —2009 ! $ o.m - �yE 3A% b E -2L91 I� SdA% 15 a le <az I �xpF -5A% 4.0% 6 -Y.0x 9 3 a s a s s a v v uvvvalsun unaouav uDuaaaaMDas aaNMNnN nmuau wu Mn � NwiberafMerRMANer0.dFmplolmem y Marla Fiorini Ramina, Inc. Rezeulon USUALLY, AS GOES THE LABOR MARKET, SO GOES CONSUMER SPENDING RM an1Y an°ptl^^ wv lam lag renaslen� wMn uM GUNMa eM wY eft peWl ma nwp) a tW , IJ ^ 'o % i Y v R 300 1 ,t 1. P r ! :o .Y ioo 1 t t 1 u 1 a i 1 c � t i i I ° o � s-soo ti .xo r. wa ° � '18 l9 00 91 93 B] 4 05 86 0'! 86 i9 90 91 9a 93 90 YS 96 9l 9i 99 00 01 03 0] 03 OS 06 01 OB O9 10 11 Jn O NONFOAMPAM(%LGW1(£lE%CLCBJSU51.3MOMOMIGA�GllHS7 __ RFOL LGy41M339$JGNC5931W1H®YIY%CH IRHSI 10 Mana Florin) Raminz, Inc. lu CONSUMER CONFIDENCE S SENTIMENT SINKING AS LABOR MARKET LANGUISHES u 105 I 1 c U 0 ;I/ 1 F JP� , ( ! Ilp 'f 90 111 I1^1 1 II 0 l II u � IF I 9p L B A 70 p P e , 50 1 rl I 41 30 xp lP t9 00 PI el U W e, P6 8] 80 89 90 91 93 9) Ye 9, 96 9] 90 99 Op pl O3 p3 W OS p4 0] pB 09 10 11 — UN48t91Y6 MCIKNJCQ5UM3t 58111M3JFPDEY(UW —QAh88JLE B'SMm CONS1M33 LOFhlpDVGENpIX1i06J Marla Fionnl Rimini, Inc. 11 An increasing body of evidence is pointing to moderating growth in sectors that were central to driving the early stages of the recovery Maria Flonni Ramirez, Inc. 12 SIGNALING WEAKNESS IN ORDERS FOR CAPITAL GOODS ISM NEW ORDERS INDEX e 30 " x meiaaa. a..m..tll.e 1 s.pe�m�rl mMeEWwu JI �o L 1\ 66 EO 1\ D 1 II � 1 1 62 M 1 I j11 1 M A I I� 1 1 1 1 1 1 1 1 1 .1 1 1 II \ 1 1 O S0 1 D 1 1 dl I 1 Y 35 1 H H d0 Ir l0 E6 '18 0 06 Ot OB 09 '/9 eU nI R BJ e< 65 ab„ � iH ON.n 0.11a01N U 111E Ppi ft, GpIYI EyWp, m — �K NONCGPITOLGOCQS OPIIHtSFJ(CLLDINGNIGRfFf�fiN0�1M®YIVX p1. LVA N3N Oi0BL4 PJOIX EEI ENMNGl4G. RI9®F4%NINtD6 MDIRMs1 IJ Marti Fiorini Ramiru,lnc. PROFIT MARGINS PROBABLY HAVE SEEN MOST OF THEIR GAINS — OUTPUTGROVITTIHASSLONED,ANDCOST.CUTTING WILL BE TOUGHER TO ACHIEVE a x Ipnarb aatlmlo M DC'1E 6 pe'H berm ec ei nmm pmnb as a l wen loo as p 80 R T j0 60 50 u 80 E � L T 0 50 4 0 40 3 P 3 M 8 00 M H l6 ]0 80 6 J !6 88 90 9 Y6 9 03 OY Ofi 0 10 10 SE 54 56 Stl 60 63 EI 66 69 lE Nl6i-TAIL ECOMO6IN: RR6TISA4X 6NATICWLINCIXAE 14 Marla Fiarini Ramirea. Inc. TAX CREDIT EXPIRED, SO DID DEMAND FOR HOMER F ev 1 A A I30 T 600 ; I •I I30 4 5 ]s 1 11 I \\ 115 p S.sO I F Jss v I ,A ii j II { u9 0 1 5.00 1 I•Ir' 1 I 105 f: F 5, W I L L 1.50 I I I I 95 1! I I I 90 /\�iy\ e 040 F I i • ,III IS ` I 1 s Tzs Ir ]J 3W3 3Wl $OOd x005 3006 300] x006 3009 x010 ]0 —EDSIPIG SINGE FAy HOME Sl MNS OF LFd15 y,A p,,I ^•^• P3�IDING EbSiPJG HgIffSYSP�pEX FUS®FON/IYA 1M (RHO Maria Flonnl llamlln, Inc. IS WATCH MORTGAGE APPLICATIONS FOR SIGNS OF LIFE IN HOME SALES SO FAR NOT MUCH Ba0 !6 sO 11 69 S/ JJO \I 63i 61 I 1 f00 n ISO R v ss6 T 300 I' 1. SI C 6 4.84 I( 250 6 1. RS, 61 0.1 L � ` 1 L 1 a.az z.n t v ]B 79 80 AI 83 9) 8d BS 86 9] B8 89 90 YI 93 9] 9d 95 96 9] 98 9Y 00 01 Oi O3 00 OS 06 Ol 06 O9 10 II 50 — NEWOND EnSI1NG9NtlE FAMILY HCME54lF5, MLV56 UNIi5 $NR, (t{� -- MCRTG6CCfOPgICAipNS F(R HCME RAtCHA�INDIX N9IED FORv+ARp2MQ (RH51 Matla Flodnl Ramirez, Inc. 16 ISM EXPORT ORDERS INDIDE MINTS TO SLOWER EXPORT GROWTH x i 1 so 1 11 I \ \ 1 ` 56 µ o X \ \ \ 5 I 1 1 ig U f N 1 1 l a 1 1 G 44 u P 41 x '%'nyn.a�ummaSlM1 11 lg 1 p s.pmw. m.o laD 51 \ 5 qoH wyn iMo. SJ 10 qg YY 00 W OS 010 II ISMEXPORT ORDERS INDEX PUSHED GORWIIND THREE DONTNa — RFSLMEMCIRii $MWlil®NY%011llL`71 �� 15M pDbRT WDHL4PIDE1(9A MOJPIGlSGP15H®FORNOAD3MIRH51 1] Mana Fionni RMiM, Inc. NIGHER IMPORTS PROVIDE xc le la Ix I o AN OFFSET TO INVENTORY EXPANSION WHEN GDP IS CALCULATED 0 loo 6 T 4 T F 3 0 i 'fie 10 !li T 5 H 5 L 00 IES 50 .I15 — RFftMHEQ1MDIIEIMPORTS an MTnMcalc.mxcN(Iml � RFLLIfYSSffGITLHM%£,SFINIRISi 19 Mali! Flolinl RSmiMZ. Inc. Ongoing correction of past excesses will provide a countervailing force to cyclical recovery, limiting growth to a decidedly sub -par trend. Nvh F19dn1 Ramlm; 10c. 19 U.S. CREDIT HMRKET DEBT AS%OP GDP: EVEN AFTER STRIPPING OUT J FINIINC IAL SECTOR AND FEDERAL GOVERNMENT, THE OVERHANG IS HUGE 3w 3) 350 35V 314 � 334 0 ]35 31U � t U 3W T 35V x 3352. ISU p r 1)5 ae� 1 110 I50 _.1 tl. IW F T fi SJ 56 Si 60 63 fit 6 6A )0 ]3 ]J ]6 )8 60 A3 9J B6 6 J 96 9A 00 03 OJ oA l0 W semen FMr.I pr.n. w� MY T&mnh Q2 m10 TOIOL CR®ILMMI�TD�l.KX cF GJ pq — WM1¢-srIC NOMF1NaNCInLDB3r/3% 6m (Fa q __ DCME411c NO�FAkNOfIO®TFXCLLANGF�Ut/�OJlIA4X CF (J1P(RIS7 Nalia R.M.1 Ramirez, Inc. 20 SURGE IN CONSUMER SNARE OF GDP FINANCED DT DROP IN THE SAVING RATE WHICH WAS SPURRED BY EASY CREDIT AND ASSET PRICE INFLATION{ ALL THIS IS REVERSING NOW. 1 n ixo i� • o uo IOFl i ��Iy1 �� I)� 2n 69 I 90 �1 1� 68 1 ;. so S l I' I r `• e ao I r' a •.. eo e •41M 00 1. I ' o BO 82 B< 86 B8 90 92 9J 96 98 00 02 O4 Ofi 08 10 I3 60 fit M 66 68 70 72 lJ 16 le EAVING RATE M SAVING 11E % FEMONAL INCOME -- NIFA MFINITION) — PaiS'lNrL gNwGRATE 1lHs) __ CONM1MHiR$�DF1GfGA%CFG�FIRIAI 21 Marla fiariniftemila2.lnc. Abundant Spare Capacity Indicates Continued Benign Core Inflation • We continue to believe that core inflation will remain subdued in the near term owing to the effects of a very wide output gap. • In 2011, we look for a modest acceleration in core inflation (core CPI up a g41g4 1.3% after+0.9% this year and +1.7% in 2009). • The heavily -weighted "homeowners equivalent rent" category is likely to bottom out before too long and then accelerate gradually in 2011, which should put very modest upward pressure on the overall core rate. 20f0A3 ?2010 Q,4` 201A Q1 ` .... "2011Q2M712010.5 .v. 94!93'1, CPI +1.8% +1.1% +1.5% +1.5% +0.9% +1.6E/ qlq annualized Core CPI +1.3/o o +1.3% +1.1% +1.3% +0.9% +1.3% qlq annualized 22 Metla Fiodni RM1mz.1nc. Treasury Supply Will Be Relentless •A huge budget deficit along with a large amount of maturing notes and bonds will create an ongoing enormous need for Treasury financing in coming quarters. -Treasury financing needs totaled $2.05 trillion in fiscal year 2009. This represented a $1.42 trillion budget deficit and $632 billion in maturing notes and bonds. -In fiscal 2010 (which ended on September 30, 2010), financing needs are estimated to have been $2.00 trillion, representing a deficit of $1.29 trillion and maturing notes and bonds of $713 billion. -In fiscal 2011, financing needs are forecast to be $2.28 trillion, representing a deficit of $1.42 trillion and maturing notes and bonds of $861 billion. -By way of comparison, the Treasury's financing needs in fiscal 2008 were $1.11 trillion ($455 billion deficit, $662 billion maturing debt), up from $753 billion in fiscal 2007 ($162 billion deficit, $591 billion maturing debt). Mena Fiodni Ramim, Inc. D Forecast Summary 20f0Gp 010 E 420�1,1, _2610:03 �,Real GDP +1.6+% +2.2% +1.6 %q/q annualized Final Demand +25% +1.8% M+1.5%+1.5% +1.5% +1.7%q/q annualized Consumer Sp. +2.0% +1.9% +2.0% +1.6% qlq annualized Capital Spending +9.2% +2.9% +1.4% +1.4% +9.2% +2.5% qiq annualized CPI +1.8% +1.1% +1.5% +1.5% +0.9% +1.6% q/q annualized Care CPl +1.3% +1.3% +1.1% +1.3% +0.9% +1.3% qlq annualized Housing Starts 580 550 570 590 590 590 (000's, saar) Ann Avg Ann Avg Light Vehicle Sales 11.6 11 7 11.8 11,9 11.4 12.0 (mins, Saar) Ann Avg Ann Avg Unemployment 96% 97% 98% 9.8% 9.7% 9.8% Rate Ann Avg Ann Avg 25 MiN FI.MiaiTln, I... Summary: The Global Economy in 2010/2011 • Global growth remains sluggish and uneven. • U.S. grows, but at a disappointing pace as debt overhang weighs heavily and policy stimulus fades • Emerging economies outperform developed markets. Asia remains strong performer. • China's policy focus shifts toward domestic demand. Modest yuan appreciation. • Eurozone growth suppressed by weak domestic demand and fiscal adjustment. • Japanese growth slows - weak political leadership inhibits policymaking ability. • Dollar trades in (wide) range vs EUR, gains vs JPY, weaker against Asian and Latin American currencies. Core inflation benign as over -capacity limits pricing power. Mena Flannl Reninz, In.. THE STATE & LOCAL FISCAL OUTLOOK ----------------------------------------------------------------- Much of the material in this section has been provided by The Rockefeller Institute of Government in Albany, New York. We are especially grateful for the assistance of Lucy Dadayan, Senior Policy Analyst. States & Localities Still Facing Hard Times State fiscal troubles are far from over. In a "normal' economic recovery tax revenue can take 3-5 years to attain prior peak. In slow -growth economic recovery, fiscal recovery will take longer still. States tend to take easiest actions first, harder actions later. 1980-1982 and 1990 recessions saw 3 consecutive years of tax increases, including increases as recovery was well underway. Localities feel recession with a lag, as states cut aid. Also, declines in real estate values affect assessed valuation and property tax receipts with a lag. Gimmicks will continue to be attractive. 37 governors and 46 legislatures are up for election in 2010. This suggests that 2010-11 "solutions" may be low quality, with tougher decisions postponed to 2011-12. U State Tax Revenue Driven By Overall GDP Percent Change in Real State Government Taxes and Real GDP vs. Year Ago ..,ali mnar Nnvinn Averaaee 18% — _Reel PDP 15%� _ _ .�Realabte taxmwnue V% E% 1P% } eau,n.: V.5.6mue 0u,eeu l0wlerry lex rz aol=(bml:0ma 91 . ]^N�nm:e(]IGaac.a.bn Po,um NO enaeeC. xam. (pnaemay=Nneeu.•=+vee w.Bwim,. a2) w10 (Chart courtesy of The Rockefeller Institute) yy Local Tax Revenue Has Held Up Better Year-Over-Vear Change In Real State Taxes and Local Taxes p�Ob,�q+p Off'" O �'e',p* (P 0' M1".h�M1'C Sae, V6L• ue Bur.au....... u.l eM Bo,. al..r.—P,uly.b(GBP p, ..) . (Chart courtesy of The Rockefeller Institute) 30 Performance of Major Tax Revenues Year -Over -Year Real Change in Major State -Local Taxes 12% Percent Change M Four-0uaner Average 10% 1111- ia- —Se- x y�%openY i+x 0% a% 3% 0% z% d% —_ d% 10% +z% -1a% ae% ti �pgM1VTo1" M1'�T M1" W ti M1' M1pOM1�ro^�8 ti M1 TM1d'L OT' ��'C 1" T •L O°�� 9. Gmua BwaaalbT revwue) aM Oxe.uol a.'Om11C Pr¢Mah IGOPprpe M.al. bre sa.1114parlx ay.r.psal percent cNra.In re.11er revenue;(n!p aEuatmrRe for ft..6..Ia,o. (Chart courtesy of The Rockefeller Institute) 31 Income & Sales Tax Receipt Growth Threatened Percent Change in Megan State Cei.rdeM Economic Incew (Data rhrGph August ZO10) 35% ao% ' 25% 20% 1.5% ,a% es% 00% 46% 10% -15% 2a% -25% . PAY PAY Y P' al l@aa re BeMo,IfibGeyNe. NMe:q [erileMrye Y,wlM ireEenebb. (Chart courtesy of The Rockefeller Institute) 32 With the recession said to have ended in mid-2009, it is tempting to assume that state and local fiscal woes are on the cusp of disappearing. Unfortunately, this is unlikely to be the case. While income tax receipts will improve (assuming the economy continues to grow), other sources of revenue will not be so quick to recover. Meanwhile, spending cuts have not kept pace with revenue declines, leaving substantial gaps that are likely to prompt a need for further spending reductions. MFR — Who We Are GLOBAL ECONOMIC CONSULTING Maria Fiorini Ramirez, Inc ("MFR") was founded in 1992 to provide independent economic consulting and market analysis to financial institutions and corporations around the world. MFR is widely known for its accurate appraisals of U.S. and international economic conditions, central bank policy, political trends, and the effects of these influences on global financial markets. Our forecasts have been repeatedly cited by national publications for their consistent accuracy. MFR's clients have access to our staff of experienced economists and strategists, and we encourage such interaction. Our research is distributed on a daily basis via e-mail, on Bloomberg, and through our website (w"W mftoom)_ BROKER/DEALER MFR Securities, Inc., established in 1994, provides a broad range of securities trading and investment banking services to institutional clients. With offices in New York City, California and Florida, we are well positioned to offer our customers global coverage combined with local expertise. MFR trades a full range of taxable and non-taxable fixed income securities in all sectors of the yield curve. We advise municipalities and public agencies on financing and investment strategies, participate in underwritings, selling groups, and private placements, and are a member of FI_NRA, SIPC, and MSRB_ MFR Securities, Inc offers our clients the global economic research of Maria Fiorini Ramirez, Inc, which combined with an intense commitment to customer service, makes us a true "value added" RrokerlDealer. 34 marla Fiorini namimz. 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Local governments bear any additional interest and debt -issuance costs LAO Key Revenue -Related Solutions ■ LAO's Revenue Forecast: $1.4 billion higher than Governor ■ Suspend businesses' use of net operating losses: $1.2 billion ■ Sale of state buildings: $0.9 billion M 0 Pension Changes ■ For new employees, reduces pension formulas (generally to those in place before 1999) • CHID/firefighters: 3% at 55 • Correctional officers: 2.6% at 55 • Miscellaneous: 2% at 60 ■ For many current employees, requires increased employee contributions of 2-5% of salary LAO Budget Reserve Proposal ■ For the 2012 ballot ■ Similar provisions to Proposition 1A (2009), but without a link to tax extension or education funding ■ Extra dollars into the rainy -day fund when revenues exceed a 20-year trend ■ Pulling dollars out made more difficult R State's Cash Situation Continues to Rely on Deferrals ■ Deferrals of payments put in place for schools, universities, cities, and counties ■ Treasurer's efforts to secure cash -flow borrowing in November will determine cash situation for rest of year "O 2011-12 Will Be Another Difficult Budget Year ■ Multibillion budget shortfall expected again in 2011-12 ■ Loss of temporary tax revenues and federal stimulus funds ■ Many solutions already used or blocked by the courts IA0 3 November Ballot Could Affect State Budget ■ Proposition 19 (Marijuana) • Possibility of tax revenues ■ Proposition 21 (parks) • General Fund relief of $200 million annually (plus increased funding for parks) ■ Proposition 22 (local governments) • Higher annual General Fund costs of $1 billion More November Measures That Would Affect State Budget ■ Proposition 24 (business taxes) • Higher General Fund tax revenues, growing to $1.3 billion annually ■ Proposition 26 (fees/taxes) • Higher annual General Fund costs of $1 billion b Projected Debt -Service Ratio 9 6Uneaitl but PUNor¢M t 5 — I 4 y M-W 90.91 95.% 00-01 0&00 Mll L.pgeias,J y LL BOA 0 LOCAL AGENCY INVESTMENT FUND CONFERENCE PARTICIPATION LIST OCTOBER 21, 2010 Alba, Rose San Gabriel Valley Mosquito & Vector Control District Office Manager Alvarez, Crystal State Treasurer's Office Associate Governmental Program Analyst Anzai, Kathy E. City of Gardena Deputy Treasurer Armstrong, Misti State Treasurer's Office Program Manager Bair, Connie El Dorado Hills Fire Department Chief Financial Officer Baker, Karl Coachella Valley Mosquito & Vector Control District Trustee Barnes, C. Linda Butte County Treasurer -Tax Collector Becker, Lori JPMorgan Chase Bank, N.A. SVP - Government Banking Beede, Craig Truckee Donner Public Utility District Accounting Supervisor Behl, Puneet Bay Cities Joint Powers Insurance Authority Accounting Manager Blum, Frank City of La Quinta IAB Member Bottini, Colleen Butte County Supervisor - Banking and Cash Mgmt. Bouldt, Cynthia Wells Fargo Bank AVID, Senior Relationship Associate Bray, Mark Fresno County Investment Officer Broughton, Paul Sacramento Municipal Utility District Senior Financial Analyst Brown, Christopher Wells Fargo Bank Industry Specialist Campbell, Daniel Bank of the West Vice President Candido, Guy U.S. Bank VP - Region Manager Carr, Michael Association of California Water Agencies Controller Chapman, Mary Truckee Donner Public Utility District Administrative Services Manager Charter, Dan Colusa County Treasurer -Tax Collector Cheng, Min -Lee West Valley Mosquito & Vector Control District District Manager Chang, Evalina Vector Control Joint Powers Agency Senior Accountant Cheng, Lin -Lin City of Foster City Assistant Finance Director Chu, Donna U.S. Bank VP - Relationship Manager Coleman, Thomas L. Orchard Dale Water District General Manager Connolly, Ned Chandler Asset Management Senior Vice President - Client Service Corral, Mia Chandler Asset Management Vice President - Client Service Corrales, Alberto South Montebello Irrigation District Compliance Officer Cortes, Rich Union Sanitary District Business Services Manager Cox, Robert Coachella Valley Mosquito & Vector Control District Trustee Curtis -Brown, Colette Central Contra Costa Sanitary District Finance Administrator Davis, Larry Sacramento Metropolitan Fire District Chief Administrative Officer De Alba, Rene State Treasurer's Office Staff Services Analyst Defenbaugh, Lyle Wells Capital Management Director of Client Services DeRieux, Kevin San Diego Housing Commission Accounting Supervisor Dermond, Don Modesto Irrigation District Assistant Treasurer Dienst, Tricy City of San Diego Assistant Investment Officer Diller, Deborah Local Agency Workers' Comp Excess JPA Accounting Manager Eastman, Becky City of Belvedere Finance Officer Edwards, Nova California Debt & Investment Advisory Commission Research Program Specialist Falconer, John M. City of La Quinta Finance Director Fayaz, Hesam Keenan & Associates Account Manager - SETECH Fischer, Richard Flory, Dan Foye,Joe Fujioka, Kenn Garrison, Thad Guerra, Michelle Gumpert, Dan Ha-Ly, Chi Henderson, Debbie Holland, Anita Holton, Nancy Holtz, Ben Hoover, Paula Howald, Tim Hughes, Paul Hughey, Breanne Johnson, Ralph Johnson, Maurice Johnson, Sr., Johnny E. Kech, Peggy Kelleher, Marlene Kidd, Troy King, Jamie Koo, Doris Lemke, Robert Less, Mike Leung, Frank Lockett, Margrit Lopez, Julia A. Lukman, Aria Madera, Ruth Manni, Karma Mason, Edith McElroy, Carol McKinney, Brooke McNary, Tamara Means-Reynoso, Erin Mescher, Robert Meyer, Jeffrey Mijares, Claudia Moak, Peggy Montiel, Theresa Morales, Jr., James Moretti, Patricia Mortenson, Kurt Ng, Lily K. Niederhofer, Suzy Norfolk, Lynette Nugent, Thomas Nunley, Cecile State Treasurer's Office Antelope Valley- East Kem Water Agency San Diego Housing Commission San Gabriel Valley Mosquito & Vector Control District Citibank Wells Fargo Bank Association of California Water Agencies Fair Oaks Water District South Tahoe Public Utility District Bay Cities Joint Powers Insurance Authority North Marin Water District California Avocado Commission Inland Empire Utilities Agency CPS Human Resources South Tahoe Public Utility District Local Agency Workers' Comp Excess JPA Castro Valley Sanitary District Sacramento Metropolitan Fire District Sativa Los Angeles County Water District North Bay Schools Insurance Authority Vista Irrigation District U.S. Bank Central Contra Costa Sanitary District City of San Mateo U.S. Bank City of Fairfield Regional Monitoring Program CA Debt & Investment Advisory Commission Housing Authority of the City of Los Angeles California Avocado Commission Henry Miller Reclamation District #2131 State Treasurer's Office West Valley Mosquito & Vector Control District Alpine County City of Moreno Valley CA Health Facilities Financing Authority Citibank Truckee Donner Public Utility District Calaveras County Water District City of Compton Butte County CA Health Facilities Financing Authority East Valley Water District Mariposa County City of La Quinta Bank of the West City of Mountain View Calaveras County Wells Fargo Bank Pittsburg Unified School District Associate Governmental Program Analyst General Manager Accounting Supervisor Office Manager Director Relationship Support Manager Accountant Senior Financial Analyst Accounting Manager Senior Accountant Senior Accountant Treasurer Financial Analyst Chief Financial Officer Chief Financial Officer Staff Accountant Board Member Captain/VP Local 522 Board President Accounting Manager Finance Manager VP - Relationship Manager Accountant Treasurer/Budget Manager Vice President Principal Accountant Accountant Staff Services Analyst Senior Accountant Finance & Accounting Manager Accountant Associate Governmental Program Analyst Admin. Secretary Treasurer -Tax Collector Treasury Operations Manager Office Technician Account Manager Finance & Accounting Manager Finance Director Deputy Treasurer Assistant Treasurer Executive Assistant Board Member Asst. Treasurer -Tax Collector/County Clerk IAB Member Vice President Asst. Finance & Admin. Services Director Treasurer -Tax Collector Vice President Finance Director Nunn, Dennis Reclamation District #830 Trustee O'Callaghan, Brigid U.S. Bank VP - Relationship Manager Ooms-Graziano, Elizabeth Castaic Lake Water Agency Senior Financial Analyst Parisi, Laura City of Laguna Beach City Treasurer Parker, Joseph Placer County Water Agency Director of Financial Services Paro, Jamie Central San Joaquin Valley Risk Management Authority Accounting Manager Paterna, Linda Mariposa County Deputy Treasurer Penney, Monica Placer County Water Agency Deputy Director- Finance Pfeiffer, John San Diego Housing Commission Chief Financial Officer Phillips, Tricia Truckee Donner Public Utility District Senior Accountant Pochy, Greg Sacramento Municipal Utility District Senior Financial Analyst Pryor, Valerie Castaic Lake Water Agency Administrative Services Manager Richard , Ronald S. Orchard Dale Water District Finance Manager Robinson, Kristin Kern County Water Agency Administrative Services Coordinator Sarmiento, Jessica Inland Empire Utilities Agency Financial Analyst Sasser, Glonann San Ramon Valley Fire Protection District Finance Supervisor Schieffer, Cathy Aztec Shops, Ltd. Controller Scott, Leticia B. Housing Authority of the City of Los Angeles Finance Manager Sinclair, Brian South Montebello Irrigation District General Manager Spencer, Kyle City of Milpitas Accounting Technician Spillane, Jack JPMorgan Chase Bank, N.A. Senior Vice President Spowart, Sonja California School Boards Association Controller Sullivan, Barbara Calaveras County Asst, Treasurer -Tax Collector Sutton, Dianna Association of California Water Agencies JPIA Accounting Manager Todd, Jr., Tom San Gorgonio Pass Water Agency Finance Manager Torgeson, Steve U.S. Bank Vice President Truong, Donna Pack Library Partnership Chief Financial Officer Tsukiyama, J. Ingrid City of Compton Chief Deputy Treasurer VanMeter, Barbara Aztec Shops, Ltd. Financial Services Director Vestal, Chris Sacramento Metropolitan Fire District FF/Special Projects West, Steve San Gabriel Valley Mosquito & Vector Control District District Manager Wong, Christine The State Bar of California Finance Manager Wong, Steve South Feather Water and Power Agency Finance Division Manager Yakimow, Curtis Town of Yucca Valley Director of Administrative Services Zacks, Joyce City of Huntington Beach Deputy City Treasurer Zidich, Tony City of Daly City City Treasurer 2010 LOCAL AGENCY INVESTMENT FUND ANNUAL CONFERENCE Agenda Thursday, October 21, 2010 Sacramento Convention Center 8:30 a.m. Registration (Activity Building, 2nd Floor) Conference participants check in and pick up conference materials. A continental breakfast will be served. 9:00 a.m. Welcome and Introductions (Room 202) Pledge of Allegiance — Local Investment Advisory Board Members Pam Milliron, LAIFAdministrator State Treasurer's Office, Investment Division 9:15 a.m. Rebounding or Stalling in the. Economic Recovery (Room 202) A global review and outlook for the economy, the challenges that investors face in a low growth and low interest rates environment — repercussions on returns and outlook for 2011. Maria Fiorini Ramirez, President and Chief Executive Officer MFR Securities, Inc. 10:30 a.m. Break 10:45 a.m. An Overview of LAIF Operations and PMIA Goals and Objectives (Room 202) The State Treasurer's investment managers will provide an overview of performance along with the goals and objectives of the Pooled Money Investment Account (PMIA). We will discuss why the portfolio is where it is today and looking forward what strategy the investment team will use to maintain yield while putting safety first. Pam Milliron, LAIFAdministrator State Treasurer's Office, Investment Division Daniel Dowell, Director State Treasurer's Office, Investment Division 12:00 p.m. Lunch (Room 204) The lunch period will provide an opportunity to network with other attendees and speakers, and to learn more about the State Treasurer's Office functions and programs. Luncheon speaker — Bill Lockyer, California State Treasurer 1:30 p.m. Conducting Monetary Policy at the Zero Bound (Room 202) The Federal Reserve Bank of New York's Senior Vice President of the Macroeconomic and Monetary Studies will give us an inside look at the Fed's monetary policy and its effect on California and the nation. He will also share his views on current economic conditions with emphasis on the housing and real estate finance sectors. Richard W. Peach, Senior Vice President Federal Reserve Bank of New York 2:45 p.m. Break 3:00 p.m. An Update on the State Budget and its Impact on Local Agencies (Room 202) California is dealing with a record deficit; this session will provide an overview of this year's state budget and the financial status of the State. What is the impact of the State budget on local agencies and how does the State plan to rise from its fiscal difficulties? Marianne O'Malley Legislative Analyst's Office 4:15 p.m. Conference Adjournment and Evaluation SPEAKER BIOGRAPHIES Maria Fiorini Ramirez President and Chief Executive Officer MFR Securities, Inc. (212) 416-5000 matia@mfr.com Maria Fiorini Ramirez is President & Chief Executive Officer of Maria Fiorini Ramirez, Inc., (MFR) an independent global economic and financial consulting firm formed in August 1992. Her firm is highly regarded for its consistently accurate, unbiased analysis of economic trends and other issues that affect markets and investment decisions. Maria is a frequent speaker at U.S. and international forums and is a regular guest on various media outlets. Before starting her own firm, Maria's career in the financial services industry included positions at American Express International Banking Corporation, Merrill Lynch, and Drexel Burnham Lambert MFR Securities, Inc., is MFR's Broker -Dealer subsidiary, operating as an institutional brokerage firm specializing in taxable and municipal securities, with offices in New York, Miami and San Francisco. Maria has utilized her economic and financial expertise to great advantage as a Director of a diverse group of corporations and not -for -profit organizations. CURRENT CORPORATE DIRECTORSHIPS January 2007: Appointed Director of Mona Vie, Salt Lake City, Utah, and its MORE foundation in Brazil. February 2006: Appointed Director of Security Mutual Life, Binghamton, New York. April 2005: Appointed Director ofAMF Funds (fixed income mutual fund complex), Chicago, Illinois. February 2004: Appointed Director of Schroder Hedge Funds, Bermuda. Also on Board of Credit Renaissance Funds (a group of fund investing in distressed markets, partially owned by Schroders). February 1996: Appointed to Investment Policy and Product Review Committees of Edward Jones & Co., St Louis, Missouri. NOT -FOR -PROFIT DIRECTORSHIPS, SELECTED AWARDS & MEMBERSHIPS March 2010: Appointed a Trustee of The Brooklyn Hospital Center, Brooklyn, NY. April 2006: Appointed a Director of Independence Foundation, Brooklyn, NY (now Brooklyn Foundation). May 2002: Appointed Trustee of Pace University. Member of the Business Advisory Board of Pace University Lubin School of Business since 1997, and honored as a distinguished alumni in 2001. March 2009: Honoree of Cerebral Palsy International Gala in NYC. 2004: Received Metro International Fulbright Award for Contributing to International Understanding and Ellis Island Medal of Honor. Founding member of 100 Women in Hedge Funds, member of the New York Hedge Fund Roundtable, member of the Economic Club of NY, President of the Money Marketeers Club of NY in 1994. Pam Milliron Treasury Program Manager and LAIF Administrator California State Treasurer's Office (916) 653-3001 pmilliron@treasurer.ca.gov Pam Milliron has over 24 years of experience with the State Treasurer's Office where she has worked for seven State Treasurers in many program areas from cash management to financial services and investments. She has worked in the Investment Division for 4 1/2 years and was selected to be the LAIF Administrator effective March 1, 2007. Ms. Milliron is responsible for the day-to-day LAIF operations as she manages over 2,700 LAIF accounts totaling $22 billion. Ms. Milliron is also an authorized trader for the PMIA portfolio and supervisor of the Investment Operations. Prior to being the LAIF Administrator, Ms. Milliron managed the State's $8 billion Time Deposit Program with over 100 participating California financial institutions. Prior to coming to the State Treasurer's Investment Division, she worked for 18 years in the State Treasurer's Cash Management Division. There she managed the day to day operations of over $2 trillion a year moving in and out of the state's 7 depository banks. She devised long and short range cash forecasts, developed and managed electronic funds transfer programs and implemented state wide policies and procedures for the Central Treasury System. Daniel S. Dowell Director of Investments California State Treasurer's Office (916) 653-3147 ddoweii@treasurer.ca.gov Daniel Dowell is the Director of Investments in the Office of State Treasurer Bill Lockyer. Mr. Dowell has held this position since being appointed by Treasurer Phil Angelides in July of 2004. Mr. Dowell is responsible for the planning, organizing, and direction of the investment portfolio, negotiating the purchase or sale of various securities, managing the Local Agency Investment Fund, and implementing the investment policies and portfolio strategies of the Treasurer and the Pooled Money Investment Board. In addition, he sits as Deputy Treasurer on various State boards and commissions. While working under eight different treasurers, Mr. Dowell developed the Treasurer's Policies, Goals, and Objectives; successfully concluded a class-action lawsuit against Salomon Brothers; was the architect of Treasurer Kathleen Brown's Cal -Vest Program, worked as a member of the national task force for GASB 31, implementing Guidelines and several amendments to the original draft; worked with Treasurer Matt Fong to achieve a Holocaust Settlement with Swiss Banks; and participated in Treasurer Angelides' Double Bottom Line Workforce to invest in underserved areas of this state. Mr. Dowell continues to promote Treasurer Lockyer's efforts to keep LAIF participants informed in a timely and transparent manner, and to safeguard the trust account status of all LAIF deposits. Mr. Dowell has dedicated more than 36 years of service to the State Treasurer's Office. His experience includes work in the Trust, Accounting, and Investment Divisions. While in these divisions he directed various functions including those of daily investment planning, debt service reconciliation, and securities clearance, Mr. Dowell holds a BA Degree in English Literature from California State University, Sacramento. Richard W. Peach Senior Vice President Federal Reserve Bank of New York (212) 720-5654 richard.peach@_ny.frb.org Richard W. Peach is a senior vice president in the Macroeconomic and Monetary Studies Function at the Federal Reserve Bank of New York. His primary responsibility is to coordinate the bank's forecast for the U.S. economy and the federal budget He provides regular briefings to the Bank's president, Board of Directors, and senior staff, and frequently represents the Bank before outside groups. In addition, Mr. Peach follows with particular emphasis the housing and real estate finance sectors. He is a regular contributor to Bank publications such as the Economic Policy Review and the Current Issues series. Mr. Peach joined the Bank in June 1992 as a senior economist assigned to the Business Conditions Function. In May 1994, he was appointed an officer of the bank and in December 1996 Mr. Peach was promoted to assistant vice president In June 1998 he was promoted to vice president and in January of 2008 he was promoted to senior vice president. Prior to joining the Bank, he was staff vice president and deputy chief economist of the Mortgage Bankers Association of America (MBAR). In that position he co-authored the MBA's monthly Economic Commentary, conducted surveys and studies of the mortgage banking industry, and prepared analyses of the impact of changes in public policy on the housing and real estate finance industries. Mr. Peach played a key role in the development of MBA's Weekly Survey of Mortgage Loan Applications a closely watched indicator of conditions in housing and mortgage markets. Prior to joining the MBA in 1986, he was staff vice president for Forecasting and Policy Analysis of the National Association of Realtors (NAB). In that position he prepared NAR's monthly Outlook for the Economy and Real Estate and conducted studies of the impact of changes in tax law on commercial and owner -occupied real estate. He also served as an economist with the Bureau of Economic Analysis of the U.S. Department of Commerce and was an instructor of economics at the University of Maryland. Mr. Peach graduated summa cum laude and with Honors in Economics from the Pennsylvania State University in 1973. He was awarded a University of Maryland Fellowship for Graduate Study and earned a Master of Arts degree in 1979 and a Doctorate in economics in 1983 from that institution. He and his wife Beverly have three daughters and reside in Fanwood, New Jersey. Marianne O'Malley Director of the General Government Legislative Analyst's Office (916) 445-4656 marianne.omalley@,LAO.ca.gov Marianne O'Malley is the Director of the General Government section of the Legislative Analyst Office (LAO). Ms. O'Malley has broad responsibilities for supervising matters related to state employee compensation, infrastructure spending, and state -local relations and finance. Since joining the LAO in 1985, Ms. O'Malley has testified and lectured extensively on the subjects of local government finance, property taxation, the initiative process, and state infrastructure investment She is the principal author of a series of LAO reports examining modern California local finance, as well as a major proposal to change the way the state funds school construction. Ms. O'Malley earned a Master's Degree in Public Policy from Harvard's John F. Kennedy School in 1985. Her master's thesis on the topic of "Cruising for parking' in central cities was awarded first prize by the American Planning Association.