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Home My WebLink AboutStaff Report 329-09TO: FROM: DATE: REPORT TYPE: SUBJECT: BACKGROUND HONORABLE CITY COUNCIL CITY MANAGER JULY 27, 2009 INFORMATIONAL DEPARTMENT: ADMINISTRATIVE SERVICES CMR: 329:09 City of Palo Alto's Investment Activity Report for the Fourth Quarter, Fiscal Yeal' 2009 The purpose of this report is to inform Council of the City's investment portfolio status as oftheend of the fourth quarter of Fiscal Year 2009. The City's investment policy requires that staff repmi quarterly to Council on the City'S portfolio composition compared to Council-adopted policy, pOlifolio performance, and other key investment and cash flow information. DISCUSSION Investment Portfolio as of June 30. 2009 The City's investment portfolio is detailed in Attaclunent B. It is grouped by investment type and includes the investment issuer, date ofmatnrity, cnrrent market value, the book and face (par) value, and the weighted average maturity of each type of investment and of the entire portfolio. The par value of the City's portfolio is $327.2 million; in comparison, last quarter it was $325.5 million. The growth in the portfolio of $1.7 million results"from the timing of cash flows and the City'S continued effort to constrain expenditures. One qualier of City Sales tax receipts ("tliple flip") and in-lieu vehicle license fee tax payments are received in January and May 2009 instead of on a monthly basis. The May receipts are reflected in this report. The portfolio consists of$16.5 million in liquid accounts and $31 0.7 million in U. S. govc1'l1ment treasury and agency securities and certificates of deposit. The $310.7 million includes $110.5 million in invcstments maturing in less than two years, comprising 35.6 percent of the City'S investment in notes and securities. The investment policy requires that at least $50 million be maintained in securities maturing in less than two years. CMR: 329:09 Page 1 of4 The current market value of the pOltfolio is 104 percent of the book value. The market value of seeurities fluctuates, depending on how interest rates perform, when interest rates decrease, the value of the securities increase. The concern with regarding market value has to do with the possibility of losing principal, as a result of having to sell a security before its stated maturity. It is important to note that the City's practice is to hold investments until they mature so changes in market price do not affect the City's investment principal. The market valuation is provided by Union Bank of California, which is the City's safekeeping agent. The average life to maturity of the investment pOltfolio is 3.45 years compared to 3.55 years last qUalter and 3.47 years in the last quarter offiseal year 2008. Investments Made During the Fourth Quarter During the fourth quarter, $32.1 million of government agency securities with an average yield of 4.6% percent matured. During the same period, government seeurities totaling $39.0 million with an average yield of3.1 % percent were purchased. Continuing low interest rates will push the pOltfolio's yield dOWllwm'd in coming qUalters. The City's short-term money market and pool account decreased by $5.2 million compared to the third qUal·ter. Investment staff continually monitors the City's shOlt- term cash flow needs and adjusts liquid funds to meet those needs. Availability of Fum Is for the Next Six Months Normally, the flow of revenues from the City's utility billings and General Fund sources is sufficient to provide funds for ongoing expenditures in those respective funds. Projections indicate receipts will be $196.2 million and expenditures will be $193.8 million over the next six months, indicating an overall growth in the portfolio of $2.4 million. As of June 30, 2009, the City had $16.5 million deposited in the Local Agency Investment Fund (LAIF) and a money market account that could be withdrawn on a daily basis. In addition, investments totaling $28.3 million will mature between July 1,2009 and December 31, 2009. On the basis of the above projections, staffis confident that the City will have more than sufficient funds or liquidity to meet expenditure requirements for the next six months. Compliance with City Investment Policy During the fourth quarter of 2009, staff complied with all aspects of the investment policy. Attachment C lists the restrictions in the City's investment policy compared with the pOltfolio's actual performance. Investment Yields Interest income on an accrual basis for the fourth quarter was $3.5 million. This total is 14.6 percent lower that what the City received in the fourth qualter of last fiscal year. This is primarily as a consequence of declining interest rates since last year. As of June 30, 2009, the yield to maturity of the City'S portfolio was 4.21 percent. This compares to a yield of 4.36 percent in the third quruter and 4.42 percent in fOUlth quarter of 2008. TIle City's pOltfolio yield is expected to decrease in future quru·ters as staffre-invests maturing securities at lower interest rates. The City'S pOltfolio yicld of 4.21 percent compares to LAIF's average yield for thequal1er ofl.49 percent and an average yield on the two-year and five-year TreaslU'y bonds dw·jng the fourth quarter of approximately 1.0 percent and 2.22 percent, respectively. CMR: 329:09 Page 2 of4 Yield Trends In the last two quarters, the Federal Open Market Committee (FOMC) maintained the historica!ly low federal funds and discount rate at 0,25 and 0,50 percent, respectively, The lower rates are designed to support financial markets, business investment, consumer spending, and credit availability, The FOMC continues to believe that inflationary pressures are contained for the moment and that lower rates are necessaIY for an extended period to stimulate the economy, Given CUlTent interest rates, the City's portfolio's yield is expected to decline further in coming quarters, FU!l@ Held by the City or Managed Under Contract Attachment A is a eonsolidated rep0l1 of all City investment funds, including those not held directly in the investment p0l1folio, These include cash in the City's regular bank account with Wells Fargo, The bond proceeds, reserves, and debt service payments being held by the City'S fiscal agcnts are subject to the requirements of the underlying debt indenture, The trustees for the bond funds are u.s. Bank and California Asset Management Program (CAMP). Bond funds with U,S. Bank are invested in federal agency and money market mutual foods that consist exclusively of U.S. Treasury securities. Bond funds in CAMP are invested in banker's acceptance notes, certificates of deposit, commercial paper, federal agency securities, and repurchase agreements. The most recent data on funds held by the fiscal agent is as of June 30, 2009. FISCAL IMPACT This is an information report with no ftscal impact resultin&: ENVIRONMENTAL REVIEW There is no environmental review required for this rep0l1, ATTACHMENTS ATTACHMENT A: Consolidated Report of Cash and Investments ATTACHMENT B: Investment Portfolio, as of June 30, 2009 Arf ACHMENT C: Investment Policy Compliance CMR: 329:09 Puge 3 of 4 PREPARED BY: DEPARTMENT HEAD APPROVAL: CITY MANAGER APPROVAL: CMR: 329:09 I~ ~ TARUNNARAYAN Senior Financial Analyst LALO PEREZ Director, Administrative Services DOO JAMES KEENE City Manager Page4of4 Consolidated Report City of Palo Alto Cash and Investment~ Fourth Quarter, Fiscal Year 2008-09 (Unaudited) Book Value City Investment Portfolio (see Attachment B) $ 328,815,426 Other Funds Held by the City Cash with Wells Fargo Bank 4,441,317 (includes general and imprest accounts) Investment with CAMP (University Ave, Parking Garages) 591,253 Petty/Working Cash 12,328 Totai -Other Funds Held By City 5,044,898 Funds Under Management of Third Party Trustees * (Debt Service Proceeds) US Bank Trust Services •• 1995 Utility Revenue Bonds Debt Service Fund 14 1998 Golf Course Certificates of Participation Debt Service Lease Payment Funds 140 2002 Civic Center Certificates oj' Participation Lease Payment and Reserve Funds 350,181 2002 Downtown Parking Impvt. Certificates of Participation Reserve and Lease Payment Funds 238,068 Escrow Account for Partial Defeasance of Bonds 839,099 2002 Utility Revenue Bonds Reserve and Debt Service Funds 131,285 California Asset Management Program (CAMP]'" 1998 Golf Course Certificates of Participation Reserve Fund 776,277 2001 University Ave, Parking Bonds Reserve Funds 647,710 2002 University Ave, Parking Bonds Reserve and Admin, Funds 3,300,749 2002 Utility Revenue Bonds Reserve Funds 1,971,727 Total Under Tmstee Management GRAND TOTAL $ 342,115,574 • These funds are subject to the requirements of the underlying debt indenture, Attachment A Market Value $ 341,912,022 4,441,317 591,253 12,328 5,044,898 14 140 350,181 238,068 839,099 131,285 776,277 647,710 3,300,749 1,971,727 8,255,250 $ 355,212,170 •• U ,S, Bank investments are in money market mutual funds that exclusively invest in U.S. Treasury securities . ••• CAMP investments are in money market mutual fund which invest in hankers acceptance, certificate of deposit, commercial paper, federal agency securities, and repurchase agreements, CUSI? . Investment # Certificates of Deposit -Bank 9244804275 9244804531 9244604549 £72 673 674 Managed Poo1 Accounts SVS158 SVS1S9 158 159 Federal Agency Issues ~ Coupon 30769P.AAO $45 31$15PLG2 S131$PLG2 30769ZAA1 307692AAl 307692AA1 307692AA1 31331TKF7 31331SG56 31331S.2Q5 3'l331VY9'l 31331V4E3 31331V'NS1 31331S3H4 31331VTY2 31331XSQS 31331XSoe 31331XSR4 31331XW1J2 31331XASo Run Oate' Oi'/1€V2009 .17:42 565 568 628 630 631 696 592 593 597 653 655 651 658 562 666 667 690 £93 101 Issuer CertifICate of Deposit Certrficate of Deposit Certificate of Deposit Fidelity Investments local Agency Investment Furnj Federal Agriculture Mortgage C Federal Ag-riculture Mortgage C Federal Agriculture Mortgage C Federal Agriculture Mortgage C Federal Agriculture Mortgage C Federal Agriculture Mortgage C Federal Agriculture Mortgage C Federal Farm Cfedit BanI< Federal Farm Cte<iit Bank; Federa[ Farm Credit Bank Federal Farm Credit Bank FedEral Farm Credit Bank Federal Farm Credit Bank Fed~l Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank ATTACHMENT B City of Palo Alto Fund ALL· Portfolio Listings Investments by Fund June 30, 2009 Current Purchase Da1e Book Value Par Value Market Value Rate 11/2412006 11/24/2006 1112412006 Subtotal and Average 07!01f200a 07/01f2{)Oa Sub~~_~~ Average 07/2012006 0712612004 0712912004 05/1212006 0511612006 0511SnOOe C5/0312007 0611412005 0612112005 08/1012005 09/26/2006 10/1212001$ 10116/2006 10116/2006 11/16/2006 03/15/2007 0311512007 0312712007 04/2512007 0512512007 181,306.50 1$1,300,50 181,306,50 173,730.87 173.730.87 173,730.87 ____ -"56=,8:.:8,,0.co.:94 166.880.94 16$,880.94 521,918.31 521,918.31 521,918.31 lZS,S30A8 128,530,46 128,530.46 16,377,824,26 16,377,$24.26 16,427,177.38 16,506,354.72 16,506,354.72 16.555,707.84 1.998,554.67 3,999,694.18 1,999,778,36 3,9£8,34$.53 1,SS4.539.49 3,968,550.10 2,000,000.00 1,499,53620 2,000,000.00 , ,500,000.00 2,026,973,44 4.008,381.61 2,041,31928 1,475,633.58 2,016,028. 13 1.500,000,00 1,500,000.00 2,000,000.00 2,000,000.00 2,OOO,OO{LOO 2,000,000.00 4,000,000,00 2.000,000 00 4,000,000.00 2.000,000.00 4,000,000.00 2,000,000.00 1,500,000,00 2,000,00000 1,500,000.00 2,000,000.00 4,000,000.00 2,039,000.00 1,500,000.00 2,000,000.00 1.500,000.00 1,500.000.00 2.000.000.00 2,000,000.00 2,000,000,00 2,133,$40.00 4,005,840.00 2,OO2.S20.OO 4,198,000.00 2,099,000.00 4,19$,000.00 2,099.000.00 1,567.500.00 2,070,620.00 1,506,570.00 2,216,260.00 4,413,760.00 2,255,643.75 1,630,320.00 2,205,620,00 1,54$.465.00 1,545.465,00 2,184,380.00 2,130,000.00 2,142,500.00 3.920 4,0~W 4,020 1,9:S0 1.260 5.500 4.000 4.000 4.87$ 4.815 4.875 4.875 4.180 4.200 4.375 5.280 5,180 5,200 4,750 5.200 4.750 4.750 4,875 HOO 5.050 YTM 360 3.963 3.970 4.069 4.000 1.824 1.242 1.247 5.465 4.161 4.200 . 5.389 5.375 5.385 4.606 4,147 4.142 4.315 4.S27 5.059 5.100 5.104 4,877 4J,$4 4,684 4,$07 4.734 4.000 City of Palo Alto Administration svcs. Dept. 250 Hamitton Ave" 4th Floor Palo Alto. CA 94301 (650)329-2362 YTM Maturity Days To 365 Oate Matunty 4.019 09/24/2009 4.025 09124/2010 4.12:6 D$J2412011 4.055 1.850 1.260 1.265 85 4SO 815 439 744 14 14 582 562 562 562 492 5.541 07/1512011 4.219 0711512009 4.319' 0.7/1512009 5.464 o.1J14J2011 5.450 0.111412011 5,460. 0.1/14/2011 4.872 01/1412011 4.205 11/05/2010 4.200 06/2112010 4.375 08/10/2009 4.894 08116120.13 5.130 09115120.14 5.171 0411712014 5.175 02/1812014 .:t945 03/20/2013 4.750 03(15120.10 4]50 03J15f.:010 4.874 03114120.14 4.800 04/2512011 5.050 0.512512011 '" I 40 1.507 1,902 1,751 1,69J 1,358 257 257 1,717 663 693 Portfolio CPA AP F!(PRF]!) 7.1,1 RepcrtVer.7.,3.0 gj >'l '" CUSIP Investment # Federal Agency Issues -Coupon 31331XU75 715 31331GKC2 773 Callable 31331GLT4 788 31331GTT6 31331GUF4 31331GUN7 31331GUP2 31331GVK2 31331GUN7 31331VH82 31331VK47 31331V4M5 31331XBSO 31331XCY6 31331XGCO 31331XGX4 31331XJQ6 31331XMQ2 31331XNE8 31331XPB2 31331XVH2 31331XZK1 31331XZJ4 31331XB27 31331XC26 31331XD74 31331XC26 31331XH39 31331XK35 31331XL42 31331X2JO 31331X2U5 Rr.m Oate: 07/1612009 -17:42 796 Callable 797 Callable 799 Callable 800 Callable 804 Callable 809 Callable 637 640 650 659 660 665 666 668 675 676 677 692 697 698 702 703 705 707 708 709 711 717 719 Issuer Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit ~ S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit ~ S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit· S & P Federal Farm Credit ~ S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit ~ S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Fund ALL -Portfolio Listings Investments by Fund June 30, 2009 Purchase Date 08/20/2007 01/13/2009 03/04/2009 04/2212009 04/26/2009 05/05/2009 05/07/2009 05/06/2009 05106/2009 06/2212006 06/28/2006 09121/2006 10/25/2006 11/06/2006 1210712006 12111/2006 12/27/2006 01126/2007 0210112007 02/07/2007 04/1212007 05/2212007 05/24/2007 06/05/2007 06/05/2007 06/12/2007 06/08/2007 06/28/2007 07105/2007 07/16/2007 09/04/2007 09/06/2007 Book Value 3,012.710.02 1,500,000.00 1,000,000.00 1,000,000.00 1,500,000.00 1,500,000.00 1,000,000.00 1,500,000.00 1,000,000,00 1,000,000.00 2,000,000.00 2,000,000.00 3,000,000.00 2,000,000.00 1,500,000.00 2,000,000.00 1,500,000.00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 3,500,000.00 2,000,000.00 2,000,000.00 2,971,455.30 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 1,500,000.00 Par Value 3,000,000.00 1,500,000.00 1,000,000.00 1,000,000.00 1,500,000.00 1,500,000.00 1,000,000.00 1,500,000.00 1,000,000.00 1,000,000.00 2,000,000.00 2,000,000.00 3,000,000.00 2,000,000.00 1,500,000.00 2,000,000.00 1,500,000.00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 3,500,000.00 2,000,000.00 2,000,000.00 3,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 1,500,000,00 Current Market Value Rate 3,296,250.00 1,499,535.00 1,009,690.00 968.750.00 1,492,965.00 1,492,500.00 966,250.00 1,498,590.00 995,000.00 1,011,560.00 2,105,000.00 2,021,260.00 3,294,390.00 2,178.760.00 1,559,070.00 2,151,880.00 1,522,035.00 2,060,620.00 2,126,880.00 2,200,000.00 2,165,000.00 2,101,880.00 2,013,760.00 3,867,500.00 2,216,260.00 2,223,120.00 3,324,390.00 2,093,120.00 2,155,000.00 2,096,880.00 2,176,880.00 1,606,410.00 5.300 4.000 3.750 4.000 3.000 3.600 4.125 2.450 3.600 5.375 5.500 5.000 5.050 5.050 4.750 4.625 4.820 5.000 5.050 5.150 4.875 4.900 4.900 5.200 5.250 5.330 5.250 5.250 5.250 5.250 4.930 4.750 YTM 360 5.128 3.945 3.698 3.945 2.958 3.550 4.068 2.416 3.550 5.304 5.426 4.931 4.979 4.960 4.684 4.561 4.756 4.933 4.980 5.079 4.808 4.834 4.836 5.130 5.178 5.257 5.409 5.178 5.178 5.178 4.862 4.684 Page 2 YTM Maturity Days To 365 Date Maturity 5.199 08/13/2014 1,869 4.000 01/1312016 2,387 3.749 01/29/2016 2,403 4.000 04/2212019 3.000 04/28/2014 3.600 05/05/2015 4.125 05/07/2018 2.450 05/06/2013 3.599 05/05/2015 5.377 09/22f2009 5.501 07/28/2010 5.000 09/21/2009 5.048 11/25/2013 5.050 05/06/2015 4.750 06107/2010 4.625 06/1112012 4.822 10/27f2009 5.002 05/26/2010 5.050 0210112011 5.150 02107/2013 4.875 04/1212012 4.902 09/2212010 4.903 08/24/2009 5.201 08/0512013 5.250 06/05/2014 5.330 12f18/2013 5.484 06/05/2014 5.250 06/2812010 5.250 07105/2011 5.250 07/16/2010 4.930 09/04/2012 4.750 0910612011 3,582 1,762 2,134 3,232 1,405 2,134 83 392 82 1,608 2,135 341 1,076 118 329 580 1,317 1,016 448 54 1,496 1,800 1,631 1,800 362 734 380 1,161 797 Portfolio CPA AP F!{PRFJI)7.1.1 Report Ver. 7.3.0 CUSlp Investment # Federal Agency Issues -Coupon 31331X3H3 720 31331X5Y4 31331YER7 31331YHQ6 31331YSV3 31331Y2U3 31331GLM9 31331GPG8 31331GPN3 31331YCJ7 31331VCQ7 31331SKH5 3133MABK4 3133MQSR6 3133MCLA1 3133MATQ2 3133MYVZ4 3133MRCM2 3133MWBM2 3133MATQ2 3133X06Q7 31339XMX9 3133MRCM2 3133X2BX2 3133X2BX2 3133XAUY1 3133XAUY1 3133MDBT9 3133XBTH8 3133XFJY3 3133XG3W2 3133XF5T9 Run Oate: 0711612009 -17'42 721 724 725 747 766 Callable 779 Callable 784 Callable 785 722 742 744 533 552 562 567 569 570 572 573 574 582 584 585 586 589 590 595 596 642 644 648 Issuer Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit -S & P Federal Farm Credit· S & P Federal Farm Credit -S & P Federal Farm Credit Bank· Moo Fed. Farm Credit Bank Fed. Farm Credit Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Fund ALL -Portfolio Listings Investments by Fund June 30, 2009 Purchase Date 09/17/2007 10/03/2007 11/21/2007 12/12/2007 02/11/2008 07/08/2008 01/27/2009 03/04/2009 03/04/2009 10/30/2007 01/30/2008 01/30/2008 0210912004 04/20/2004 06/18/2004 07/29/2004 08/25/2004 10/05/2004 10105/2004 10108/2004 10/08/2004 01/20/2005 01/27/2005 01/27/2005 03/01/2005 05/20/2005 05/27/2005 07/11/2005 07/11/2005 07107/2006 07/11/2006 09/12/2006 Book Value 1,500,000.00 1,500,000.00 2,000,000.00 2,000,000.00 1,500,000.00 2,000,000.00 2,000,000.00 2,000,000,00 1,500,000.00 2,000,000.00 2,085,888.56 1,030,269.90 1,210,998.64 2,001,392.13 1,533,500.78 1,523,803.83 1,988,653.56 1,006,380.89 1,499,081.36 2,036,552,30 1,500,002.86 1,989,410.51 1,509,342.62 2,002,318.58 1,997,085,,06 1,998,112.61 1,998,341.52 2,046,157.46 1,500,579,35 1,989,460.30 2,003,044.67 1,997,237.40 Par Value 1,500,000.00 1,500,000.00 2,000,000.00 2,000,000.00 1,500,000,00 2,000,000.00 2,000,000.00 2,000,000.00 1,500,000.00 2,000,000.00 2,000,000.00 1,000,000.00 1,200,000.00 2,000,000.00 1,500.000.00 1,500,000.00 2,000,000.00 1,000,000.00 1,500,000.00 2,000,000.00 1,500,000.00 2,000,000.00 1,500,000,00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 1,500,000.00 2,000,000.00 2,000,000,00 2,000,000.00 Current Market Value Rate 1,630,785,00 1,641,570.00 2,130,000.00 2,053,120.00 1,547,340,00 2,080,620.00 1,891,880.00 1,981,260.00 1.516,875.00 2,102,500.00 2,145,000.00 1,065,630.00 1,227,372,00 2,010,000.00 1,618,125.00 1,563,750.00 2,050,000.00 1,045,940.00 1,531,875.00 2,085,000.00 1,558,590.00 2,072,500.00 1,568,910,00 2,091,880.00 2,091,880.00 2,043,760.00 2,043,760.00 2,153,120.00 1,552,965.00 2,145,000.00 2,161,880.00 2.138,120.00 5.000 5.000 4.350 4.625 3.850 4.625 4.000 4.500 2.600 4.900 4.800 4.500 6.500 4.500 6,625 7.375 3.375 4.750 3.875 7.375 4.125 3.660 4.750 4.250 4.250 4.000 4.000 5.875 4.250 5.250 5.600 5.000 YTM 360 4.931 4,931 4.290 4.561 3.797 4.561 3.945 4.438 2.564 4.832 3.945 3.820 3.649 3.796 4.654 4.370 4.056 4.044 3.931 3.978 4.067 4.083 4.063 4.096 4.310 4.112 4.092 4.201 4.144 5.483 5.435 5.002 Page 3 YTM Maturity Days To 365 Date Maturity 5.000 09/17/2014 1,904 5.000 10/03/2014 4.350 11/21/2011 4,624 12115/2017 3.850 02/11/2015 4.625 07/08/2013 4.000 01/25/2019 4,500 03/04/2019 2.600 03/04/2013 4.900 10/30/2017 4.000 1011912015 3.873 01/2212015 3.700 11/13/2009 3.849 08/14/2009 4.718 11/15/2010 4.431 0211212010 4.113 05/14/2010 4.100 08/13/2010 3.986 02/1212010 4.033 02112/2010 4.123 08/13/2010 4.140 09/30/2010 4.120 08/13/2010 4.153 1111512010 4.370 11/1512010 4.170 0211212010 4.149 0211212010 4.260 02/1512011 4.202 06/1112010 5.560 06/10/2011 5.511 06/28/2011 5.072 09/09/2011 1,920 873 3,089 2,051 1,468 3,495 3,533 1,342 3,043 2,301 2,031 135 44 502 226 317 408 226 226 408 456 408 502 502 226 226 594 345 709 727 800 Portfolio CPA AP FI(PRFJI)7,1,1 Report Ver, 7.3.0 CUSIP Investment # Federal Agency Issues· Coupon 3133X9ZZ6 $1339Y7K2 3133XHBL5 3133XHW57 3133XJUT3 3133XGJge 3133XGJge S13SXLDG5 3133XLDG5 3133XP6Al 3133XP6A1 3133XSP93 3133XSWJ3 3133XTCS3 3133XTFQ4 3133XTNL6 3133XTQH2 3133XTY02 3133M9CL4 3133M1CY3 3133XHXW7 3133XP3Y$ 3133XP.Q4 3133XPFK5 3133XPFRO 313X(PLVS 313X(PT J3 3133XSNC8 31S3XSTR9 3133XSl50 3133XSZ3$ 3133XT7G5 Run Oate: 07/16J2009 -17:42 649 6S2 6S. 667 685 699 706 710 713 7$0 741 777 778 CaUable 789 793 815 Callable 817 818 46£ 532 663 726 Ca!lable 729 Callable 736 Callable 737 Callab!e 749 Callable 751 Callable 770 Callable 774 Callable 781 783 Callable 787 Callable Issuer Federa~ Home LCian Bank. Federal Home Loan Bani< Federal Home Loan Bank Federal Home Loan Sank Federal Home Loan Sank Federal Home loan Bank Federal Home loan Bank Federa: Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan BanI( Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Feaeral Home Loan Batik -Moody Federal Home Loan Bank -Moody Federal Home Loan Bank -S 8. P Federal Home Loan Bank: -S 8. P Federal Home Loan Bank S & p Federal Home Loan Bank ~ S 8. P Federal Home Loan Sank -S 8. P Federal Home Loan Sank -S &0 P Federal Home Loan Sar>k ~ S &, P Federal Home Loan Bank S 8. P Federal. Home Loan Bank· S 8. P Federal Home Loan Sank -S $, P Federal Home Loan Sank· S $, P Federal Home Loan BanK· S 8. P Fund ALL· Portfolio Listings Investments by Fund June 30, 2009 PUfd\ase Date 09/1212006 09/26/2006 10/1212006 12/1412006 0212312007 0511612007 0610812007 0612812007 0812012007 0112512008 0113012008 0111612009 02113J2009 03/16/2009 04101/2009 05120/2009 OS/2212009 06/1612009 0410s/2oo3 0210912004 11/2712006 01/2212008 01124/2008 02/1212008 02122/2008 0212212008 02128/2008 12/1612008 0112812009 0210612009 02f27/2009 03f2512009 BookYalue 1,973,375.57 2,005,490.02 1,982,309.08 2,000,000.00 2.000,000.00 2.01$,866.40 993,113.8$ 2,500,000,00 $,025,193.54 2,000,000.00 2,937,263.08 3,070,396.38 2,000,000.00 2,000,000.00 3,000,000.00 1,000,000.00 1,500,000.00 2,000,000.00 700,712.03 1,754,2DS.09 2,000,000,00 2,000,000.00 1,000,000.00 1,500,000.00 , 1,500,000.00 2,000,000.00 1,500,000,00 1,000,000.00 1,500,000.00 2,000,000,00 2,000,QOO.OO 1,500,000.00 Par Value 2,000,000.00 2,000,000,00 2,000,000,00 2,000,000,00 2;000,000.00 2,000,000.00 1,000.000.00 2,500,000,00 3,000,000,00 2,000,000,00 3,000,000,00 3,000,000,00 2,000,000,00 2,000,000,00 3,000,000.00 1,000,000.00 1,500,000.00 2,000,000,00 700,000.00 1,750,000.00 2,000,000,00 2,000,000.00 1,000,000,00 1,500,000.00 1,500,000.00 2,000,000,00 1,500,000,00 1,000,000.00 1,500,000,00 2,000,000,00 2,000,000,00 1,500,000.00 Current Market Value Rate 2,140,620.00 2,174,380.00 2,173,120.00 2,173,760,00 2.170,620,00 2,201,260,00 1:.100,630.00 2,773,450,00 3,328,140,00 2,035,620.00 3,053,430.00 3,005,640.00 1,944,380.00 2,010,620.00 3,000,000.00 993,130.00 1.497,195.00 2,085,000.00 701,750.00 1,760,395.00 2,175,OOO,Q0 2,033,760,00 1,009,060.00 1,522,965.00 1,506,570.00 2,008,760.00 1,517,340.00 1,033,130,00 1,502,820,00 2,020,620.00 1,965,620.00 1,500,4$5,00 4.500 5.000 4.875 4.875 5.000 5,250 5,250 5,375 5,375 3.500 3.500 3125 4.250 3.000 2,900 4.250 1.800 4.000 7,030 60400 4,875 4,200 HOD 4,250 4,800 4,800 4500 USO 4,100 2.100 4.500 MOO TIM 360 5.040 4.850 5.020 4.806 4.929 .943 5.369 5.300 5.099 3.451 3.869 2.794 4.191 2.958 2.860 4.191 1]75 3.945 3,780 3.599 4,808 4.142 4.438 4.191 4.734 4.734- 4.421 4,191 4.043 2.071 4,438 3.846 Page 4 TIM Matllrity Days To 365 Date Maturity 5.110 01/06/2012 4.918 07/1612013 5.089 05/1312014 4.873 1211312013 4.997 0310912012 5.011 0911312013 5.444 09/1312013 5.374 06/1312014 5.170 06r.3f2014 ;') 499 0:3113/2015 3,923 0311312015 2.833 12f13/2013 4.250 02./1312019 2.999 03/13/2014 2.900 04/01/2014 4.250 05t.2012019 1.800 05122f20 12 4.000 061H3120:5 3.833 07/1412009 3.649 08i0612009 4.875 1112712013 4.200 01/22/2015: 4.500 01/24/2018 4.250 02112/2015 4.800 0212212018 4.800 02/2212018 4,482 02l28/20 1 S 4.250 1211612013 4,100 01/2812016 2.100 0210012012 4.500 02127/2019 3.900 0912512015 919 1.476 1,808 1,626 982 1,535 1,535 1,808 1,808 2,081 2,081 1.626 3,514 1,716 1,735 3,610 1,056 2.176 13 36 1,610 2,031 3,129 2,052 3,158 3,158 3,164 1,629 2.402 950 3,528 2,277 Portfolio CPA AP 7,3.0 CUSIP InWSf;ment# Federal Agency Issues -Coupon 3133XTFD3 3133XTHE9 3133XTKX3 3133XTMGs 3133XTN44 3133XTP26 3133XTPF7 3134A3M78 3134A35H5 3128XOSKO 3128XOSKO 3128X3M34 31334A33La 3134A4VB7 3128X1KG1 3128X1KG1 3134A4UM4 3128XSMY5 3128XSWF5 3128X8E81 3128X8E73 3128XSNS5 3128X7ED2 3128X8C83 31359ME.Y5 31359MEY5 31359MFG3 31359MEY5 31359MFS7 31359MFS7 3136F3TQ9 31359MEY5 RlJII'l Dale: 07f1612009 ~ 1'1';42 792 794 801 CaHable 602' CaHable 810 Callable 812 Callable 813 Callable 534 563 571 575 579 587 594 679 582 71. 786 Cal1abie 795 callable aos Callable 80S Cailable 734 Callable 757 Callable 803 Callable 544 549 554 559 575 583 591 625 issuer Federal Home Loan Bank· S 8. P Federal Home loan Bank -S & p Federal Home Loan Bank· S &. p Federal Home Loan Bank· $ &: P Federal Horne Loan Bank· $ &: P Federal Horne Loan Bank· S &: P Federal Home Loan Bank ~ S & P Fed, Home Loan Mortgage Corp. Fed, Home Loan Mortgage Corp. Fed. Home Loan Mortgage Corp. Fed. Home Loan Mortgage Corp. Fed. Home Loan Mortgage Corp. Fed. Home Loan Mortgage Corp Fed. Home Loan Mortgage Corp Fed. Home Loan Mortgage Corp, Fed. Home Loan Mortgage Corp. Fed. Home Loan Mortgage Corp. Fed. HOO"Ie Loan Mortgage Corp, Fed. Home Loan Mortgage Corp, Fed. Home Loan Mortgage Corp. Fee, Home Loan Mortgage Corp. Fed. Home 1,.n Mtg. S&P & Fitch Fed. Home Ln. Mtg. Corp-S&P Fed. Home Ln. Mtg. Corp..s&p Federal National Mortgage Asso Federe! Nationa! Mortgage Asso Federai National Mortgage A$so Federal National Mortgage Asso Fe6eral National Mortgage Asso Federal National Mortgage Asso Federal National Mortgage Asso Federal National Ivtortgage Asso Fund ALL -Portfolio Listings Investments by Fund June 30, 2009 Purchase Dale 03J2712009 04/13f2009 05f13f2009 05/21/2009 05/1,12009 OS/20/2009 06/01/2009 02/0912004 06[18/2004 1010512004 11/0912:004 11/19/2004 03/1012005 07/1112005 0210712007 02/15f2007 08/2012007 0310312009 0412112009 OS/2612009 05/1912009 01/3112008 0410112008 0512612009 03/30/2004 04105/2004 04/2012004 0510612004 11/09/2004 0112012005 0611412005 0411712006 Book Value 2,000,000.00 2.000,000.00 1,500,000,00 1,500,000.00 1,000,000.00 1.500,000.00 1,500,000.00 1,508,313.44 1,534,216.18 2,002.835.43 1,502,590.05 1,000,000.00 2,033,125.54 1,499,304.76 1,445,868.30 1,930,.366.63 1,953,737,60 1,000,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 2,012,230.15 2,010,971,20 1,523,472,72 1,004,406.06 2,052,661.35 1,025.979.52 1,993.264.25 2,005,009.12 Par Value 2,000,000.00 2,000,000.00 1,500,000,00 1,500,000,00 1.000,000.00 1.500,000,00 1,500,000,00 1.500.000.00 1.500,000.00 2,000,000.00 1,500,000.00 1,000.000.00 2,000,000.00 1,5()0,000.00 1.500,000.00 2,000,000.00 2,000,000.00 1,000,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1.500,000.00 1,500,000.00 2,000,000.00 2.000,000,00 1,500,000.00 1,000,000.00 2,000,000.00 1,000,000.00 2,000,000.00 2,000,000.00 Current Market Value Rate 1,995,620.00 2,001.880.00 1,446,570.00 1,498,125.00 974,060.00 1,478,445.00 1,485,465.00 1.519,695.00 1.605,465.00 2,062.020.00 1,54$,515.00 1.047,$41.100 2,092,500.00 1.558,590.00 1.567,965.00 2,090,620.00 2,150,000.00 993,740,00 1,483.860.00 1,487,700.00 1,496,835.00 1,585,020,00 1,525,905.00 1.467,175.00 2,025,620.00 2.025,620.00 1,556,250.00 1,012,810.00 2,126,880.00 1,003,440.00 2,056,880.00 2,025,620.00 2.850 2.000 4.125 2.050 4.300 4.080 3.750 6.625 6.875 4250 4.250 4.400 7,000 4.125 4,000 4,000 4.500 3.250 3.000 3.200 2.170 4.300 3.500 3.150 6.625 6.625 7.250 6.625 7.125 7.125 3.750 6.625 YTM 360 2.810 '1972 4,068 2.021 4.241 4.024 3.698 3.571 4.606 4.004 3.904 4.339 4.301 4.117 5.010 4.970 5.033 3.205 2.958 3.156 2.140 4.241 3.452 3,106 3.299 3.606 3,917 4.149 3.964 4.012 4.108 5,187 PageS YTM Maturity Days To 365 Date Maturity 2.850 0312712014 2.000 07/13/2012 4.125 05/13/2019 2.050 05/21/2012 4.300 05113/201. 4.0S0 05120/2019 3.750 06/01/2016 3.620 09/15/2009 4.670 09f15!2010 40$0 0510512010 4.020 05105/2010 4.400 11/1912010 4.SS0 03/1512010 4.174 07/12/2010 50eO 06/1212013 5,040 061".212013 5,103 0111512014 3,250 03/03/2014 3.000 04/2112014 3.200 05/2612014 2,170 11/1912012 4,300 01/31/2015 3.500 04(01/2013 3.150 0512812014 3.345 09/1512009 3.657 09115/2009 3972 01115/2010 4.207 09/1512009 4.019 00/1512010 4.067 06115/2010 4,165 0$127/2010 5.259 09115/:2009 1,730 1,108 3,603 1,055 3,603 3,610 2,527 76 441 308 308 500 257 376 1,442 1,442 1,659 1,706 1,755 1,792 1,237 2,040 1,370 ',792 76 76 158 76 345 349 330 75 Portfolio CPA AP FI (PRF _FI) 7, U Report Vcr. 7,3,0 Fund ALL -Portfolio Listings Investments by Fund June 30,2009 Purchase CUSIP Investment # Issuer Date Book Value Par Value Federal Agency Issues -Coupon 31364FBV2 678 Federal National Mortgage Asso 02107/2007 2,079,781.07 2,000,000.00 31364KSSQ 683 Federal National Mortgage Asso 02115/2007 1,377,347.95 1,500,000.00 3136F8RRa 712 Callable Federal National Mortgage Asso 08/28/2007 1,000,000.00 1,000,000.00 31398ANT5 776 Federal National Mortgage Asso 01/16/2009 3,199,330.69 3,000,000.00 313_6FHGA7 790 Callable Federal National Mortgage Asso 03/23/2009 1,000,000,00 1,000,000.00 31398AXB3 798 Callable Federal National Mortgage Asso 05/05/2009 1,500,000.00 1,500,000.00 3136FHPX7 805 Callable Federal National Mortgage Asso 05/14/2009 1,500,000.00 1,500,000,00 3136FHRE7 807 Callable Federal National Mortgage Asso 05/20/2009 1,500,000.00 1,500,000.00 3136FHTB1 811 Callable Federal National Mortgage Asso 05/28/2009 1,500,000.00 1,500,000.00 3136F8M77 731 Callable Fed. Nat. Mortg. Assoc.-S&P 02107/2008 2,000,000.00 2,000,000,00 31398APN6 761 Callable Fed. Nat. Mortg, Assoc.-S&P 04/08/2008 1,000,000.00 1,000,000.00 3136F9ES8 763 Callable Fed. Nat. Mortg. Assoc.-S&P 04/0212008 1,000,000.00 1,000,000.00 3136FHVC6 814 Callable Fed. Nat. Mortg. Assoc.-S&P 05/2812009 1,000,000,00 1,000,000.00 3136FHXF7 816 Callable Fed. Nat. Mortg. Assoc.-S&P 06/10/2009 2,000,000.00 2,000,000.00 313586UB3 743 Fed. National Mortgage Assoc. 01/30/2008 4,034,945.94 3,000,000.00 880591DT6 643 Tennessee Valley Authority 07/0712006 2,060,304.03 2,000,000.00 880591CWO 656 Tennessee Valley Authority 10/16/2006 1,540,961.14 1,500,000.00 880591CWO 661 Tennessee Valley AuthOrity 11/16/2006 3,104,644.42 3,000,000.00 880591Dl3 684 Tennessee Valley AuthOrity 02/15/2007 1,582,267,49 1,500,000.00 880591DY5 716 Tennessee Valley Authority 08/20/2007 2,875,061.54 3,000,000.00 Subtotal and Average 309,771,100.40 308,189,000.00 Treasury Securities -Coupon 912828HK9 769 U.S. Treasury 08f06/2008 2,016,074,83 2,000,000.00 Subtotal and Average 2,016,074.83 2,000,000.00 Total Investments and Average 328,815,448.26 327,217,273.03 Run Date: 07/16/2009 -17:42 Current Market Value Rate 2,263,860.00 6.470 1,496,250.00 2.000 1,008,130.00 6.000 3,191,250.00 4.250 1,005,940.00 3.250 1,469,535.00 2.800 1,477,965.00 2.125 1,492,965.00 2.250 1,475,625.00 4.500 1,995,000.00 4.125 1,055,310.00 4.000 1,055,310.00 4.000 976,560.00 4.100 1,990,000.00 2.000 4,215,930.00 10.350 2,257,680.00 6.790 1,675,440.00 6.000 3,350,880.00 6.000 1,702,890.00 7.140 3,172,980.00 4.375 322,728,775.75 2,105,620.00 3.375 2,105,620.00 341,912,021.90 YTM YTM 360 365 4.967 5.036 4.956 5.025 5.895 5.977 2.298 2.330 3.249 3,294 2.761 2.800 2,095 2.125 2.219 2.250 4.438 4.500 4,068 4.125 3.945 4.000 3.945 4.000 4.043 4.100 1.972 2.000 3.987 4.043 5.476 5.553 5.054 5.125 4,825 4.892 4.892 4.960 5.163 5.235 ------ 4.318 4.377 3.078 3.120 ------ 3.078 3.121 4.155 4.213 Page 6 Maturity Days To Date Maturity 09/25/2012 1,182 08/17/2012 1,143 08/28/2017 2,980 02125/2013 1,335 1212312014 2,001 0510512014 1,769 05/14/2014 1,778 11/20/2012 1,238 0512812019 3,618 02107/2018 3,143 04/08/2013 1,377 04/0212013 1,371 05/28/2019 3,618 12/10/2012 1,258 12/10/2015 2,353 05/23/2012 1,057 03115/2013 1,353 03115/2013 1,353 OS/23/2012 1,057 06/15/2015 2,175 1,327 11/30/2012 1,248 1,248 1,258 Portfolio CPA AP FI (PRF JI) 7.1.1 Report Ver. 7.3 0 2 3 4 5 6 Attachment C Investment Policy Compliance As of June 30, 2009 -------,-- General Investment Guidelines: a) The max. stated final m.aturity of individual securities in the portfolio should be 10 years. b) A max. 0[30 percent of the pRr value of the portfolio shall be invested in securities with matmitjes beyond 5 years. c) The City shaH maintain a minimum of one mOllth's cash needs in Sh011 term investments. eI) At least $50 million shall be maintained in securities maturing in less than 2 years. Plus two managed pool accounts which provide instant liquidity: -Local Agency Investment Fund (LAW) -maximum investment limit is $40 mUllon -Fidelity Investments e) Should market value of the pOI'tfolio fall below 95 percent of the book value) report this fact within a reasonable timc to thc City Council and evaluate if there arc risk of holding securities to maturity. d) Commitments to purchase secul'ities newly introduced on the markct shall be made no more than three (3) working days before pricing. f) Whenever possible) the City will obtain three 01' more quolations on the purchase or sale of comparable securities (excludes new issues, LAIr, City of Palo Alto bonds, money market aecounts. and mutual funds). U.S. Government Securities: I Full Compliance 23.1% Full Compliance $110.5 million $16.4 million $0.1 million; , 104.0% Full Compliance Full Compliance Full Compliance a) Thcre is no limit 011 purehase ofthese securities. h) Securities will not exceed to years maturity. ,--------------------------- -. ...... -.. -.. ----.--··---------1-------- U.S. Government Agency Securities: a) Thcrc is no limit Oll purchase of these securities except for: Callable and Multlwstep--up securities provided that: -The potential call datcs arc known at the time of purchase; ~ the intcrcst rates at whieh they "step-up" are known at the time of purchase; and -the entire face value of the securilY is redeemed at the call date. -No more than 20 percent of the par value of portfolio, b) Securitics will not exceed 10 years maturity. Certificates of Deposit: a) May not exceed 20 percent of the par value of the portfolio; b) No more than 10 percellt of the par value of the portfolio in collateralized CDs in any institution. c) Purchase eollateralizcd deposits only from federally insurcd large banks that arc ratcd by a nationally recognized rating agency (e.g, Moody's, Standard & Poor1s, etc.), d) For non-rated banks, deposit should be limited to amounts federally insured (FDIC) c) Rol1ovcrs arc not permitted without specific instruction from authol'i7.ed City staff. Banker's Acceptance Notes: a) No more than 30 percent of thc par value of the porLfolio. b) Not to cxcccd 180 days maturity. c) No more than $5 million with anyone institution. Commerdal Paper: a) No mort! than 15 percent of the par valuc of the portfolio, b) I-laving highcslleltcr or numcricA~ rating from A natiooAlIy I'ccognized rating servicc. c) Not to eXl:ced 270 days maturity. d) No more than $3 million or to perccnt of the outstanding commercial paper of anyone institution> whichcver is lesser. Pull Compliance Full Compliance Full COinpliallce Full Compliance 20.0% Full Compliance 0.2% None Held None Held ....... L .. _________ _ 7 8 9 Investment Policy Compliance As of June 30, 2009 Shod-Term Repurchase Agreement (REPO): a) Not to exceed 1 year. b) Market value of see uri ties that underlay a repmehase agreement shall be valued at 102 pereent or greater of the funds borrowed against those securities. MOlley Market Deposit Accounts a) Liquid bank aecounts whieh seek to maintain a net asset value 0[$1.00. Mutual Funds: a) No more than 20 percent of the par value of the portfolio. b) No more than 10 pereellt of the par value with anyone instilution. 10: Negotiable Certificates of Deposit (NeD): II a) No more than 10 percent of the par value of the portfolio. b) No more than $5 million in anyone instilution. Medium-Term Corporate Notes: a) No morc than 10 pcrecnt of the par value of the portfolio. b) Not to exeeed 5 years malurity. e) Seeurities eligible for investment shall have a minimum rating of AA from a nationally recognized rating service. d) No more lhan $5 million of the par value may be invested in securities of any single issuer, olher than the U.S. Government, its ageneies and instrumentalily. e) Ifseel1l'ities owned by the City arc downgraded by either rating agencies to a level below AA it shall be the City's policy to review the credit situation and make a determination as to whether to sell or retain sueh securities. 12 Prohibited Investments: a) Reverse Repurchase Agreements b) Derivalives as defined in Appendix B of the Investmenl Policy 13. All seeurities shall be delivered to the City'S safekeeping custodian, and held in the name of the City, with the exception of: -Certificates of Deposit, Mutual Funds, and LAIF Attachment C None Held Full Compliance None Held ____________________ J None Held None Held Full Compliance None Held Full Compliance lItM""""~PM