HomeMy WebLinkAboutStaff Report 125-10TO: HONORABLE CITY COUNCIL
FROM:
DATE:
CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
JANUARY 25, 2010 CMR: 125:10
REPORT TYPE: INFORMATIONAL
SUBJECT: City of Palo Alto's Investment Activity Report for the Second Quarter,
Fiscal Year 2010
BACKGROUND
The purpose of this report is to inform Council of the City's investment portfolio status as of the end
of the second quarter. The City's investment policy requires that staff report quarterly to Council on
the City's portfolio composition compared to Council -adopted policy, portfolio performance, and
other key investment and cash flow information.
DISCUSSION
The City's investment portfolio is detailed in Attachment B. It is grouped by investment type and
includes the investment issuer, date of maturity, current 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 $328.1 million; in comparison, last quarter it was $327.5
million. The mild growth in the portfolio of $0.6 million since the last quarter reflects the impact of
weak tax revenues (e.g. sales, transient occupancy tax). Another contributing factor is that one
quarter of City sales tax receipts ("triple flip") and in -lieu vehicle license fee tax payments are
received in January and May 2009 instead of on a monthly basis, The portfolio consists of $15.5
million in liquid accounts and $312.6 million in U. S. government treasury investments, agency
securities, and certificates of deposit. The $312.6 million includes $93.8 million in investments
maturing in less than two years, comprising 30.0 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,
The current market value of the portfolio is 103.5 percent of the book value. The market value of
securities fluctuates, depending on how interest rates perform, when interest rates decrease, the
market value of the securities in the City's portfolio will likely increase; likewise, when interest rates
increase, the market value of the securities will likely decrease. Understanding and showing market
values is not only a reporting requirement, but essential to knowing the principal risks in actively
CMR: 125:10 Page 1 of 4
buying and selling securities. It is important to note, however, that the City's practice is to buy and
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 portfolio is 3.56 years compared to
3.33 years last quarter.
Investments Made During the Second Quarter
During the second quarter, $11.7 million of government agency securities with an average yield of
4.0% percent matured. During the same period, government securities totaling $30.2 million with an
average yield of 3.0% percent were purchased. As higher yielding maturing investments are re-
invested at lower (dismal) interest rates, the portfolio's yield is expected to decline in coming
quarters. The City's short-term money market and pool account decreased by $17.9 million
compared to the first quarter. Investment staff continually monitors the City's short-term cash flow
needs and adjusts liquid funds to meet those needs.
Availability of Funds 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 $195.1 million and expenditures will be $191.4 million over the next six months, indicating
an overall growth in the portfolio of $3.7 million.
As of December 31, 2009, the City had $15.5 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 $35.0 million will mature between January 1, 2010 and June 30, 2010. On the
basis of the above projections, staff is 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 second quarter, staff complied with all aspects of the investment policy. Attachment C
lists the restrictions in the City's investment policy compared with the portfolio's actual
performance.
Investment Yields
Interest income on an accrual basis for the second quarter was $3.3 million. As of December 31,
2009, the yield to maturity of the City's portfolio was 4.04 percent. This compares to a yield of 3.96
percent in the first quarter. Even though the City's second quarter portfolio yield has slightly risen
from the first quarter, as staff continues to re -invest maturing securities at lower interest rates, the
portfolio yield is expected to gradually decrease in future quarters. The City's portfolio yield of4.04
percent compares to LAIF 's average yield for the quarter of 0.61 percent and an average yield on the
two-year and five-year Treasury bonds during the second quarter of approximately 0.87 percent and
2.30 percent, respectively.
Yield Trends
In the last four quarters, the Federal Open Market Committee (FOMC) maintained the historical low
federal funds and discount rate at 0.25 and 0.50 percent, respectively. The lower rates and additional
purchase of federal agency mortgage -backed securities and debt are designed to support financial
CMR: 125:10 Page 2 of 4
markets, business investment, consumer spending, and credit availability. Even though the FOMC
has improved its economic outlook, as evidenced by plans to end programs to add liquidity to the
financial system, the FOMC continues to believe that lower rates are necessary for an extended
period to stimulate the economy. Given current interest rates, the City's portfolio's yield is expected
to decline, in the near -term.
Funds Held by the City or Managed Under Contract
Attachment A is a consolidated report of all City investment funds, including those not held directly
in the investment portfolio. 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 agents 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 funds 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 December 31, 2009.
FISCAL IMPACT
This is an information report with no fiscal impact resulting.
ENVIRONMENTAL REVIEW
There is no environmental review required for this report.
ATTACHMENTS:
Attachment A: Consolidated Report of Cash and Investments
Attachment B: Investment Portfolio, as of December 31, 2009
Attachment C: Investment Policy Compliance
CMR: 125:10 Page 3 of 4
PREPARED BY:
DEPARTMENT HEAD APPROVAL:
CITY MANAGER APPROVAL:
TARUN NARAYAN
Senior Financia Analyst
LALO PE
Directo
.II E EENE
anager
trative Services
CMR: 125:10 Page 4 of 4
Attachment A
Consolidated Report
City of Palo Alto Cash and Investments
Second Quarter, Fiscal Year 2009-10
(Unaudited)
Book Value Market Value
City Investment Portfolio (see Attachment B)
Other Funds Held by the City
Cash with Wells Fargo Bank 921,957 921,957
(includes general and imprest accounts)
Investment with CAMP (University Ave. Parking Garages) 592,271 592,271
Petty/Working Cash 1,500 1,500
Total - Other Funds Held By City
Funds Under Management of Third Party Trustees *
(Debt Service Proceeds)
$ 330,273,160 $ 341,730,486
1,515,728 1,515,728
US Bank Trust Services **
1998 Golf Course Certificates of Participation
Debt Service Lease Payment Funds 45 45
2002 Civic Center Certificates of Participation
Reserve Fund 350,000 350,000
2002 Downtown Parking Impvt. Certificates of Participation
Reserve Fund 237,950 237,950
Escrow Account for Partial Defeasance of Bonds 820,882 820,882
2002 Utility Revenue Bonds
Debt Service Fund 124,679 124,679
2009 Water Revenue Bonds (Build America Bonds)
Project, Debt Service, Reserve, Cost of Issuance Funds 34,601,123 34,601,123
California Asset Management Program (CAMP) ***
1998 Golf Course Certificates of Participation
Reserve Fund 746,058 746,058
2001 University Ave. Parking Bonds
Reserve Funds 636,540 636,540
2002 University Ave. Parking Bonds
Reserve and Admin. Funds 3,278,873 3,278,873
2002 Utility Revenue Bonds
Reserve Funds 1,841,168 1,841,168
Total Under Trustee Management
GRAND TOTAL
42,637,318
$ 374,426,207
42,637,318
$ 385,883,533
* These funds are subject to the requirements of the underlying debt indenture.
** 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 bankers acceptance, certificate of deposit,
commercial paper, federal agency securities, and repurchase agreements.
Investment Repal Akad nee16m, AVa,hmeM p 1/211201D 11'.09M1
CUSIP
Inv estment # Issue r
ATTACHMENT B
City of Palo Alto
Fund ALL - Po rtfo lio Lis tings
Investments by Fund
December 31, 2009
Purchase
Date
Bo ok Value
Par Value
City of Palo Alto
Administration Svcs. Dept.
250 Hamilton Ave., 4th Floor
Palo Alto, CA 94301
(650)329-2362
Cu rrent YTM YT M Maturity Days To
Market Value Rate 360 365 Date Maturity
Certificate s of Depo sit - Bank
9244804531
9244804549
673 Certificate of Deposit
674 Certificate of Deposit
Managed Pool Accounts
SYS158 158
SYS159 159
Fidelity Investments
Local Agency Investment Fund
11/24/2006 173,730. 87 173,730.87 173,730.87 4.020 3.970
11/24/2006 166, 880.94 166, 680. 94 166, 880. 94 4.020 4.069
Subtotal an d Av erage
4.025 09/24/2010 266
4.126 09/24/2011 631
340,611.81 340,611.81 340,611. 81 4 .019 4.075
07/01/2008 10,802.21 10,802,21 10,802.21 0.010 0.009 0.010
07/01/2008 15,478,864.79 15,478,864.79 15,493,536.05 0.560 0 .552 0 .560
Subto tal and Average
15,489,667.00 15,489,667.00 15,504,338 .26 0.552 0.560
Federal Agency Issu es - Coupon
30769PAA0
307692AA 1
307692AA1
307692AA1
307692AA1
31315PLR8
31315PM08
31315PES4
31315PEY1
31331TKF7
31331SG56
31331VY91
31331V4E3
31331VWS1
31331S3H4
31331VTY2
31331X806
31331X806
31331XSR4
31331XWU2
31331XA36
Run Date: 01!2112010. 11:04
645 Federal Agriculture Mortgage C
628 Federal Agriculture M ortgage C
630 Federal Agriculture Mortgage C
631 Federal Agriculture M ortgage C
696 Federal Agriculture Mortgage C
820 Federal Agricultural Mortgage
821 Federal Agricultural Mortgage
838 Fe de ra l Agricultura l M ortgage
839 Federal Agricultural Mortgage
592 Federal Farm Credit Bank
593 Federal Farm Credit Bank
653 Federal Farm Credit Bank
655 Federal Fam1 Credit Bank
657 Federal Fami Credit Bank
658 Federal Farm Credit Bank
662 Federal Farm Credit Bank
686 Federal Farm Credit Bank
687 Federal Farm Credit Bank
690 Fe de ra l Farm Credit Bank
693 Federal Farm Credit Bank
701 Federal Farm Credit Bank
07/20/2006 1,998,909. 11 2,000,000.00 2,111,880.00 5 .500 5.465 5.541
05/12/2006 3,978,651.00 4,000,000.00 4,173,640.00 4.875 5.389 5.464
05/18/2006 1,989,571.84 2,000,000.00 2,086,820.00 4 .875 5.375 5 .450
05/18/2006 3,978,786.96 4,000,000.00 4,173,640 .00 4.875 5,385 5.460
05/03/2007 2,000,000.00 2,000,000.00 2,086,820.00 4.875 4.806 4.872
08/11/2009 2,000,000.00 2,000,000.00 2,039,260.00 3.250 3 .205 3 .250
08/10/2009 2,000,000. 00 2,000,000 .00 2,025,700.00 2 .100 2.071 2.100
12/30/2009 2,000,000.00 2,000,000.00 2,000,000.00 2.820 2 .781 2 .820
12/30/2009 1,500,000.00 1,500,000.00 1,580,040.00 4 .500 4.438 4.500
06/14/2005 1,499,708 .69 1,500,000.00 1 ,545,000.00 4 .180 4.147 4 .205
06/21/2005 2,000,000.00 2,000,000.00 2,036,880 .00 4.200 4 .142 4 .200
09/26/2006 2,023,703 .94 2,000,000 .00 2,209,380.00 5 .280 4.827 4.894
10/12/2006 4,007 ,576.54 4,000,000.00 4,403,760 .00 5.180 5.059 5 .130
10/16/2006 2,041,077 .41 2,039,000 .00 2,249,914.16 5.200 5.100 5 .171
10/16/2006 1,478,264.62 1,500,000.00 1,628 ,445.00 4 .750 5.104 5.175
11/16/2006 2,013,873.49 2,000,000.00 2,196,260 .00 5.200 4 .877 4.945
03/15/2007 1,500,000 .00 1,500,000.00 1,513,590.00 4 .750 4 .684 4.750
03/15/2007 1,500,000.00 1,500,000.00 1,513,590.00 4.750 4.684 4.750
03/27/2007 2,000,000 .00 2,000,000.00 2,181,260.00 4.875 4 .807 4 .574
04/25/2007 2,000,000 .00 2,000,000,00 2,103,120.00 4.800 4.734 4.800
05/25/2007 2,000,000.00 2,000,000.00 2,114,380,00 5,050 4.960 5.050
444
07/15/2011
01/14/2011
01/14/2011
01/14/2011
01/14/2011
08/11/2014
08/10/2012
12/30/2014
12/30/2019
11/05/2010
06/21/2010
08/16/2013
09/15/2014
04/1712014
02/18/2014
03/20/2013
03/15/2010
03/15/2010
03/14/2014
04/25/2011
05/2512011
1
560
378
378
378
378
1,683
952
1, 824
3,650 H
308 n
171 Z
t=1
1,323
1,718
1,567
1,509
1,174
73
73
1,533
479
509
Portfolio CPA
AP
F€ (PRF_Ft) 7.1.1
Report Ver. 7 .3 .1
Fund ALL - Portfolio Lis tings
Investmen ts by Fund
December 31, 2009
Page 2
Purchase Cu rrent VTM yTM Maturity Days To
CUSIP Inv estment # Issuer Date Bo ok Value Par Valu e M arket Valu e Rate 360 365 Date Maturity
Fe de ral Agency. Issues - Co upon
31331XU75 715 Federal Farm Credit Bank 08/20/2007 3,011,468. 00 3,000,000.00 3,289,680. 00 5.300 5.126 5.199 08/13/2014 1,685
31331GKC2 773 Callable Federal Farm Cre dit Bank 01/13/2009 1,500,000.00 1,500,000. 00 1,495,785.00 4,000 3.945 4.000 01/13/2016 2,203
31331 GLT4 788 Federal Farm Credit Bank 03/04/2009 1,000,000.00 1,000,000.00 1,015,000. 00 3.750 3 .698 3 .749 01/29/2016 2,219
31331GTT6 796 Callable Federal Farm Credit Bank 04/22/2009 1,000,040. 00 1,000,000.00 966,250.00 4 .000 3.945 4 .000 04/22/2019 3,398
31331GUP2 800 Callable Federal Farm Credit Bank 05/07/2009 1,000,000. 00 1,000,000.00 963,440.00 4.125 4.068 4.125 05/07/2018 3,048
31331GVK2 804 Callable Fe de ral Fa rm Credit Bank 05/06/2009 1,500,000.00 1,500,000. 00 1,504,215.00 2 .450 2.416 2.450 05/06/2013 1,221
31331GL80 823 Federal Farm Credit Bank 0812112009. 2,000,000.00 2,000,000, 00 2,006,260 .00 3.000 2.959 3.000 09/22/2014 1,725
31331GU31 825 Federal Farm Credit Bank 09/24/2009 2,000,000.00 2,000,000.00 2,001,880.00 1.800 1.775 1 .800 09/24/2012 997
31331GZ44 826 Federal Farm Credit Bank 10/15/2009 2,000,000. 00 2,000,000.00 1,986,880.00 1 .550 1 .528 1 .550 10/15/2012 1,018
31331G6D6 835 Federal Farm Credit Bank 12/09/2009 2,000,000.00 2,000,000. 00 1,985,000.00 0.875 0.863 0.875 12/09/2011 707
31331VK47 640 Fe de ral Farm Credit - S & P 06/28/2006 2,000,000.00 2,000,000.00 2,056,260 .00 5.500 5.426 5 .501 07/28/2010 208
31331XBS0 659 Federal Farm Credit - S & P 10/25/2006 3,000,000,00 3,000,000.00 3,287,820 .00 5 .050 4.979 5.048_ 11/25/2013 1,424
31331XCY6 660 Federal Farm Credit - S & P 11/06/2006' 2,000,000. 00 2,000,000.00 2,183,120.00 5.050 4.980 5.050 05/06/2015 1,951
31331XGC0 665 Federal Farm Credit - S & P 12/07/2006 1,500,000.00 1,500,000.00 1,529,070 .00 4.750 4.684 4.750 06/07/2010 157
31331XGX4 666 Federal Farm Credit - S & P 12/11/2006 2,000,000.00 2,000,000.00 2,142,500.00 4.625 4.581 4.625 06/11/2012 892 •
31331XM Q2 675 Federal Farm Credit - S & P 01/26/2007 2,000,000. 00 2,000,000 .00 2,038,120.00 5 .000 4 .933 5.002 05/26/2010 145
31331XNE8 676 Federal Farm Credit - 5 & P 02/01/2007 2,000,000.00 2,000,000.00 2,094,380 .00 5.050 4.980 5.050 02/01/2011 396
31331XPB2 677 Federal Farm Credit - S & P 02/07/2007 2,000,000.00 2,000,000 ,00 2,189,380.00 5.150 5 .079 5.150 02/07/2013 1,133
31331XVH2 692 Federal Farm Credit - S & P 04/12/2007 2,000,000.00 2,000,000 .00 2,150,620.00 4.875 4 .808 4.675 04/12/2012 832
31331XZK1 697 Federal Farm Credit - S & P 05/22/2007 2,000,000.00 2,000,000.00 2,061,880.00 4 .900 4.834 4 .902 09/22/2010 264
31331X627 702 Federal Farm Credit - 5 & P 06/05/2007 3,500,000 .00 3,500,000 .00 3,856,580 .00 5.200 5.130 5.201 08/05/2013 1,312
31331XC26 703 Federal Farm Credit- S& P 06/05/2007 2;000,000.00 2,000,000.00 2,210,000.00 5.250 5-178 5.250 06/05/2014 1,616
31331XD74 705 Federal Farm Credit- S & P 06/12/2007 2,000,000 .00 2,000,000 .00 2,216,260 .00 5 .330 5.257 5.330 12/18/2013 1,447
31331XC26 707 Federal Farm Credit - S & P 06/08/2007 2,974,351.61 3,000,000.00 3,315,000.00 5.250 5 .409 5.484 06/05/2014 1,616
31331XH39 708 Fede ral Farm Credit - S & P 06/28/2007 2,000,000 .00 2,000 ,000.00 2,048,120 .00 5.250 5.178 5.250 06/28/2010 178
31331XK35 709 Federal Farm Credit - S & P 07/05/2007 2,000,000.00 2,000,000.00 2,126,880 .00 5 .250 5.178 5.250 07/05/2011 550
31331XL42 711 Federal Farm Credit- S & P 07/16/2007 2,000,000 .00 2 ,000,000.00 2,051,260.00 5 .250 5 .178 5 .250 07/18/2010 196
31331X2J0 717 Federal Farm Credit - S & P 09/04/2007 2,000,000.00 2,000,000.00 2,165,620 .00 4.930 4.862 4.930 09/04/2012 977
31331X2U5 719 Fe deral Farm Credit - S & P 09/06/2007 1,500,000.00 1,500,000 .00 1,590,465.00 4.750 4.684 4 .750 09/06/2011 613
31331X3H3 720 Federal Farm . Credit - S & P 09/17/2007 1,500,000 .00 1,500,000 .00 1,629,375.00 5 .000 4.931 5.000 09/17/2014 1,720
31331X5Y4 721 Federal Farm Credit - S & P 10/03/2007 1,500,000.00 1,500,000.00 1,639,215 .00 5.000 4.931 5.000 10/03/2014 1,736
31331YER7 724 Federal Farm Credit - S & P 11/21/2007 2,000,000.00 2,000,000.00 2,115,620.00 4 .350 4.290 4.350 11/21/2011 689
Portfolio CPA
AP
Run Da ie : 01/21!2010 - 11:04
Fl (PRF_FI) 7.1.1
Report Ver. 7.3.1
CUSIP Investment # Issuer
Fu nd ALL - Portfolio Lis tin gs
Investments by Fund
December 31, 2009
Purchase
Date
Book Value
Par Valu e
Current
Page 3
YTM yTM Maturity Days To
M arket Valu e Rate 360 365 Dat e Maturity
Fe deral Agen cy Issues - Co upo n
31331Y805
31331YSV3
31331Y2U3
31331GLM 9
31331GPG8
31331GPN3
31331YCJ7
31331VCQ7
31331SKH5
3133MCLA1
3133M ATQ2
3133M YYZ4
3133M RCM2
3133M WBM2
3133MATQ2
3133X0607
31339XM X9
3133M RCM 2
3133X2BX2
3133X2BX2
3133XAUY1
3133XAUY1
3133MDBT9
3133XBTH8
3133XFJY3
3133XG3W2
3133XF5T9
3133X9ZZ6
31339Y7K2
3133XH8L5
3133XHW57
3133XJUT3
Run Date: 01!2112010 - 11:04
725
747
766 Callable
779 Callable
784 Callable
785
722
742
744
562
567
569
570
572
573
574
582
584
585
586
589
590
595
596
642
644
648
649
652
654
667
685
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. Fa rm Credit Bank
Fed. Farm Credit Bank
Fe de ra l Ho me Loan Bank
Federal Home Loan Bank
Federal Home Loan Bank
Federal Home Loan Bank
Federal Home Loan Bank
Fede ral Ho me Loa n Bank
Federal Home Loan Bank
Federal Ho me Loan Bank
Fe deral Ho me Loan Bank
Federal Home Loan Bank
Federal Home Loan Bank
Federal Home Loan Bank
Federai 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
12/12/2007 2,000,000.00 2,000,000.00 2,053,760.00 4.625 4.561 4 .624 12/15/2017 2,905
02/11/2008 1,500,000.00 1,500,000. 00 1,554,375. 00 3.850 3.797 3.850 02/11/2015 1,867
07/08/2008 2,000,000.00 2,000,000.00 2,045,620.00 4.625 4 .561 4 .625 07/08/2013 1,284
01/27/2009 2,000,000. 00 2,000,000.00 1,895,000.00 4.000 3.944 3 .999 01/25/2019 3 ,311
03/04/2009 2,000,000.00 2,000,000. 00 2,007,500. 00 4.500 4A38 4 .500 03/04/2019 3,349
03/04/2009 1,500,000. 00 1,500,000.00 1,527,195.00 2 .600 2.564 2.600 03/04/2013 1,158
10/30/2007 2,000,000.00 2,000,000. 00 2,100,620.00 4.900 4.832 4.900 10/30/2017 2,859
01/30/2008 2,079,072.01 2,000,000.00 2,150,620 .00 4.800 3.945 4 .000 10!19/2015 2,117
01/30/2008 1,027,546.97 1,000,000. 00 1,067,190,00 4-500 3,820 3 .873 01/22/2015 1,847
06/18/2004 1,521,294.02 1,500,000.00 1,577,820.00 6 .625 4.654 4 .718 11/15/2010 318
07/29/2004 1,504, 415. 10 1,500,000. 00 1,511,250 .00 7.375 4.370 4.431 02/12/2010 42
08/25/2004 1,995,178.67 2,000,000.00 2,023,120.00 3.375 4 .056 4.113 05/14/2010 133
10/05/2004 1,003,523.78 1,000,000.00 1,025,630 .00 4.750 4.044 4.100 08/13/2010 224
10/05/2004 1,499,829.57 1,500,000 .00 1,506,090.00 3.875 3 .931 3 .986 02/12/2010 42
10/08/2004 2,006,761.20 2,000,000,00 2,015,000.00 7 .375 3.978 4.033 02//212010 42
10/08/2004 1,500,001. 58 1,500 ,000.00 1,532,340 .00 4.125 4.067 4.123 08/13/2010 224
01/20/2005 1,993,655.74 2,000,000.00 2,045,000.00 3.660 4 .083 4 .140 09/30/2010 272
01/27/2005 1,505,159.36 1,500,000.00 1,538,445 .00 4,750 4.063 4.120 08113/2010. 224
01/27/2005 2,001,473.75 2,000,000.00 2,062,500.00 4.250 4 .096 4 .153 11/15/2010 318
03/01/2005 1,998,147.19 2,000,000.00 2,062,500.00 4 .250 4.310 4.370 11/15/2010 318
05/20/2005 1, 999,649.85 2,000,000.00 2,008,120 .00 4.000 4.112 4.170 02/12/2010 42
05/27/2005 1,999,692.32 2,000,000.00 2,008,120.00 4.000 4 .092 4 .149 02/12/2010 42
07/11/2005 2,031,930.84 2,000,000 .00 2,113,120 .00 5.875 4.201 4.260 02/15/2011 410
07/11/2005 1,500,272.63 1,500,000.00 1,526,715.00 4.250 4 .144 4 .202 06/11/2010 161
07/07/2006 1,992,174.39 2,000,000 .00 2,118,120.00 5.250 5.483 5.560 06/10/2011 525
07/11/2006 2,002,280.32 2,000,000.00 2,132,500.00 5,600 5,435 5.511 06/28/2011 543
09/12/2006 1,997 ,868 .45 2,000,000.00 2,119,380 .00 5.000 5.002 5.072 09/09/2011 616
09/12/2006 1,978,671.03 2,000,000,00 2,129,380.00 4.500 5 .040 5 .110 01/06/2012 735
09/26/2006 2,004,810.84 2,000,000 .00 2,185,000 .00 5.000 4.850 4.918 07/16/2013 1,292
10/12/2006 1,984,096.04 2,000,000 .00 2,190,620.00 4.875 5.020 5.089 06/13/2014 1,624
12/14/2006 2,000,000.00 2,000,000.00 2,188,760.00 4.875 4 .806 4.873 12/13/2013 1,442
02/23/2007 2,000,000 .00 2,000,000.00 2,155,620.00 5.000 4 .929 4.997 03/09/2012 798
Portfolio CPA
AP
F1(PRF_FJ) 7,1,1
Report Ver. 7.3 .1
Fund ALL - Po rtfo lio Lis tings
Inv estments by Fund
De cember 31, 2009
Page 4
Purchase Current YTM YTM Maturity Days To
CUSHP Inv estment # Issu er Date Book Value Par Value Market Valu e Rate 360 365 Dat e Maturity
Fede ral Age nc y issues - Co upon
3133XGJ96 699 Fede ral Home Loa n Ba nk 05/16/2007 2, 014,858.50 2,000,000.00 2,210,620.00 5. 250 4 .943 5.011 09/13/2013 1,351
3133XGJ96 706 Federal Home Loan Bank 06108/2007 993,933.64 1,000,000. 00 1,105,310.00 5.250 5.369 5.444 09/13/2013 1,351
3133XLDG5 710 Federal Home Loan Bank 06/28/2007 2,500,000.00 2,500,000.00 2,775,775.00 5.375 5 .300 5.374 06/13/2014 1,624
3133XLDG5 713 Federal Home Loan Bank 08/20/2007 3,022,648,74 3,000,000.00 3,330,930.00 5 .375 5.099 5.170 06/13/2014 1,624
3133XPBA1 730 Federal Home Loan Bank 01/25/2008 2,000,000.00 2,000,000.00 2,053,120.00 3 .500 3.451 3.499 03/13/2015 1,897
3133XPBA1 741 Federal Home Loan Bank 01/30/2008 2,942,766.32 3,000,000.00 3,079,680.00 3.500 3.869 3 .923 03/13/2015 1,897
3133XSP93 777 Federal Home Loan Bank 01/16/2009 3,062,486.67 3,000,000.00 3,080,640.00 3 .125 2.794 2.833 12/13/2013 1,442
3133XSWJ3 778 Callable Federal Home Loan Bank 02/13/2009 2,000,000.00 2,000,000. 00 1,940,620.00 4.250 4.191 4.250 02/13/2019 3,330
3133XTCS3 789 Federal Home Loan Bank 03/16/2009 2,000,000. 00 2,000,000.00 2,041,880.00 3 .000 2.958 2.999 03/13/2014 1,532
3133XTFQ4 793 Federal Home Loan Bank 04/01/2009 3,000,000.00 3,000,000.00 3,048,750.00 2.900 2 .850 2 .900 04/01/2014 1,551
3133XTNL6 815 Callable Federal Home Loan Bank 05(2012009 1,000,000.00 1,000,000.00 971,560.00 4.250 4.191 4.250 05/20/2019 3,426
3133XTQH2 817 Federal Home Loan Bank 05/22/2009 1,500,000. 00 1,500,000.00 1,509,840 .00 1.800 1 .775 1 .800 05/22/2012 872
3133XTYD2 818 Federal Home Loan Bank 06/16/2009 '2,000,000.00 2,000,000.00 2,092,500.00 4.000 3.945 4.000 06/16/2015 1,992
3133XUCX9 819 Federal Home Loan Bank 07/20/2009 2,000,000. 00 2,000,000.00 2,011,260.00 1.875 2 .210 2 .240 07/23/2012 934
3133XUMS9 822 Federal Home Loan Bank 08/12/2009 3,000,000. 00 3,000,000 .00 3,058,140.00 4.500 4.437 4.499 09/13/2019 3,542
3133XUMR1 827 Federal Home Loan Bank 10/21/2009 1,027,072. 00 1,000,000.00 1,015,630 .00 3.250 2.594 2.631 09/12/2014 1,715
3133XDTL5 830 Federal Home Loan Bank 10/21/2009 3,299,853.98 3,000,000 .00 3,234,390.00 5.000 3.101 3 .145 12/21/2015 2,180
3133XVU74 831 Callable Federal Ho me Lo an Bank 12/17/2009 3, 000,000.00 3,000,000.00 2,880,000.00 3 .000 2.958 3.000 12/17/2019 3,637
3133XVRJ2 832 Federal Home Loan Bank 11/19/2009 3,023,453.36 3,000,000 .00 2,983,140.00 3.500 3.325 3 .372 12/09/2016 2,534
3133MJQF0 833 Federal Home Loan Bank 11/19/2009 1,351,742.68 1,200,000.00 1,332,372 .00 5.500 3 .304 3.350 08/15/2016 2,418
3133XVZP9 834 Callable Federal Home Loan Bank 12/24/2009 2,000,000 .00 2,000,000.00 1,921,880.00 4.000 3.945 4 .000 12/24/2018 3,279
3133XW4W6 837 Federal Home Loan Bank 12/11/2009 2,000,000 .00 2,000,000.00 1,969,380 .00 1.500 1 .479 1.500 12/11/2012 1,075
3133XHXW7 663 Federa! Home Loan Bank - S & P 11/27/2006 2 ,000,000 .00 2,000,000,00 2,188,760.00 4 .875 4.808 4.875 11/27/2013 1,426
3133XP3Y8 726 Callable Federal Home Loan Bank - S & P 01/22/2008 2,000,000 .00 2,000,000 .00 2,003,760.00 4.200 4.142 4 .200 01/22/2015 1,847
3133XP4Q4 729 Callable Federal Home Loan Bank - S & P 01/24/2008 1 ,000,000.00 1,000,000.00 1,006,250 .00 4.500 4.438 4 .500 01/24/2018 2,945
3133XPFK5 736 Callable Federal Home Loan Bank - S & P 02/12/2008 1,500,000.00 1,500,000.00 1,506,090.00 4 .250 4.191 4.250 02/12/2015 1,868
3133XPFR0 737 Callable Federal Home Loan Bank - S & P 02122!2008 1,500,000,00 1,500,000 .00 1,496,250.00 4.800 4.734 4 .800 02/22/2018 2,974
3133XPLY8 749 Callable Federal Home Loan Bank - S & P 02/22/2008 2,000,000 .00 2,000,000 .00 1,995,000.00 4.800 4 .734 4.800 02/22/2018 2,974
3133XPTJ3 751 Callable Federal Home Loan Bank - S & P 02/28/2008 1 ,500,000.00 1,500,000.00 1,514,535.00 4.500 4.421 4 .482 02/28/2018 2,980
3133XSNC8 770 Callable Federal Home Loan Bank - S & P 12/1 6612008 1,000,000.00 1,000,000.00 1,031,250.00 4.250 4.191 4.250 12/16/2013 1,445
3133XSZ50 781 Fe dera l Ho me Loan Bank - S & P 02/06/2009 2,000,000,00 2,000,000.00 2,033,120.00 2.100 2.071 2.100 02/06/2012 766
3133XTFD3 792 Federal Home Lo an Bank - S & P 03/27/2009 2,000,000.00 2,000,000.00 2,028,760.00 2.850 2.810 2 .850 03/27/2014 1,546
Portf olio CPA
AP
Run D ate: 01/21/2010 - 11,:04 F! (PRF Fi) 7 .1 .1
Report V er. 7.3.1
CUSIP
Inv estment # Issuer
Fund ALL - Po rtfolio Listings
Investments by Fund
December 31, 2009
Purchase
Date
Book V alue
Par Value
Page 5
Current YTM YTM Maturity Days To
Market Value Rate 360 365 Date Maturity
Federal Agen cy Issues - Coupon
3133XTHE9 794
3133XTKX3 801 Callable
3133XTN44 810 Ca llable
3133XTP26 812 Callable
3133XTPF7 813 Callable
3134A35H5 563
3128X06K0 571
3128X06K0 576
3128X3M34 579
31334A 33L5 587
3134A4VB7 594
3128X1KG1 679
3128X1KG1 682
3134A4UM4 714
3128X8MY5 786 Callable
3128X8WF5 795 Callable
3128X8E73 808 Callable
3128X9FN5 824 Callable
3128X33E1 828
3128X6N85 734 Callable
3128X7ED2 757. Callable
3128X8C83 803 Callable
31359M FG3 554
31359MFS7 575
31359MFS7 583
3136F3TQ9 591
31364FBV2 678
31364KSS0 683
31398ANT5 776
3136FHGA 7 790 Callable
31398AXB3 798 Callable
3136FHPX7 805 Callable
Run Date: 01121/ 2010 - 11:04
Federal Home Loan Bank - S & P
Federal Home Loa n Bank - S 8, P
Federal Home Loan Bank - S & P
Federal Home 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.
Fe d. Home Loan Mortgage Corp.
Fed. Home Loan Mortgage Corp.
Fed. Home Loan Mortgage Corp,
Fed. Ho me Loan Mortgage Corp.
Fed. Home Loan Mortgage Corp.
Fe d. Home Loan Mortgage Corp.
Fed. Home Loan Mortgage Corp.
Fed. Ho me Loan Mortgage Corp.
Fed. Home Loan Mortgage Corp.
Fed. Home Loan Mortgage Corp.
Fed. Home Loan Mortgage Corp.
Fed. Home Ln Mtg. S&P & Fitch
Fed. Home Ln. Mtg. Corp -S&P
Fed. Home Ln. Mtg. Corp -S&P
Federal National Mortgage Asso
Federal National Mortgage Asso
Federal National Mortgage Asso
Federal National Mortgage A sso
Federal National Mortgage Asso
Federal National Mortgage Asso
Federal National Mortgage A sso
Federal National M ortgage ASSO
Federal National Mortgage A sso
Federal National Mortgage Asso
04/13/2009 2,000,000. 00 2,000,000.00 2,018,120. 00 2. 000 1.972 2.000 07/13/2012 924
05/13/2009 1,500,000.00 1,500,000. 00 1.442,820. 00 4.125 4.068 4.125 05/13/2019 3,419
05/13/2009 1,000,000.00 1,000,000.00 970,940:00 4.300 4.241 4.300 05/13/2019 3,419
05/20/2009 1,500,000.00 1,500,000. 00 1,459,535.00 4.080 4.024 4.080 05/20/2019 3,426
06/01/2009 1,500,000.00 1,500,000.00 1,485,000,00 3.750 3.698 3.750 06/01/2016 2,343
06/18/2004 1,520,025. 14 1,500,000. 00 1,567,965.00 6.875 4.606 4 .670 09/15/2010 257
10/05/2004 2,001,156.96 2,000,000.00 2,027,000.00 .4.250 4.004 4.060 05/05/2010 124
11/09/2004 1,501,056. 47 1,500,000.00 1,520,250.00 4 .250 3.964 4.020 05/05/2010 124
11/19/2004 1,000,000.00 1,000,000.00 1,032,340.00 4 .400 4.339 4.400 11/19/2010 322
03/10/2005 2,009,650.75 2,000,000.00 2,026,880 .00 7.000 4 .301 4.360 03/15)2010 73
. 07/1112005 1,499,642,07 1,500,000. 00 1,530,000.00 4.125 4.117 4.174 07/1212010 192
02/07/2007 1,452,725.23 1,500,000. 00 1,582,035.00 4 .000 5.010 5.080 06112/2013 1,258
02/15/2007 1,939,167. 18 2,000,000.00 2,109,380,00 4.000 4.970 5.040 06112/2013 1,258
08/20/2007 1,958,833,82 2,000,000.00 2,161,880.00 4 .500 5 .033 5.103 01/15/2014 1,475
03/03/2009 1,000,000. 00 1,000,000.00 1,002,440 .00 3.250 3.205 3.250 03/03/2014 1,522
04/21/2009 1,500,000.00 1,500,000 .00 1,499,280.00 3.000 2.958 3.000 04/21/2014 1,571
05/19/2009 1,500,000. 00 1,500,000 .00 1,505,670.00 2 .170 2 .140 2.170 11/19)2012 1,053
10/01/2009 2,000,000.00 2,000,000.00 1,976,160 .00 4.500 4.438 4.500 10/01)2019 3,560
10/21/2009 2,215,544. 13 2,000,000 .00 2,189,640.00 5.050 2.713 2.751 01/26/2015 1,851
01/3112008 1,500,000.00 1,500,000.00 1,588,245 .00 4.300 4.241 4.300 01/31/2015 1,856
04/01/2008 1,500,000.00 1,500,000 .00 1,511,385 .00 3 .500 3.452 3.500 04/01/2013 1,186
05/28/2009 1,500,000.00 1,500,000.00 1,497,540.00 3.150 3 .106 3 .150 05/28/2014 1,608
04/20/2004 1,501,693.91 1,500,000 .00 1,503,285.00 7.250 3.917 3.972 01/15/2010 14
11/09/2004 2,025,105 .99 2,000,000.00 2,062,500.00 7 .125 3 .964 4 .019 06/15/2010 165
01/20/2005 1,012,385 .58 1,000,000.00 1,031,250 .00 7 .125 4.012 4.067 06/15/2010 165
06/14/2005 1,996,983.38 2,000,000 .00 2,028,120.00 3.750 4 .108 4 .165 05/27/2010 146
02/07/2007 2,067,443.79 2,000,000 .00 2,240,080.00 6.470 4.967 5.036 09/25/2012 998
02!15/2007 1,396,954 .85 1,500,000.00 1,507,500.00 2 .000 4 .956 5 .025 08/17/2012 959
01/16/2009 3,172,025.12 3,000,000.00' 3,196,890.00 4.250 2 .298 2 .330 02/25/2013 1,151
03/23/2009 1,000,000 .00 1,000,000 .00 1,010,630.00 3 .250 3.206 3.250 12123/2014 1,817
05/05/2009 1,500,000,00 1,500,000.00 1,458,750 .00 2.800 2.761 2.800 05/05/2014 1,585
05/14/2009 1,500,000 .00 1,500,000 .00 1,497,195.00 2.125 2 .095 2 .125 05/14/2014 1,594
Portfolio CPA
AP
Ft (PRF_FI) 7 .1 ,1
Rep ort Ver. 7 .3.1
CUSIP Investmen t # Issuer
Fun d ALL - Portfolio Listings
Inves tmen ts by Fund
December. 31, 2009
Pu rchase
Date
Boo k Value
Current
Par Value Market Valu e Rate
YTM YTM
360 365
Page 6
Maturity Days To
Date Maturity
Federal Agenc y Issues - Coupon
3136FHRE7 807 Callable Federal National Mortgage Asso 05/2012009 1,500,000.00 1,500,000.00 1,503,750.00 2.250 2.219 2 .250 11/20/2012 1,054
3136FHTB1 811 Callable Federal Natio na l Mo rtgage Asso 05/28/2009 1,500,000.00 1,500,000.00 1,475,625.00 4.500 4.438 4.500 05/28/2019 3,434
31359MXX6 829 Federal National Mortgage Asso 10/21/2009 2,212,410. 36 2,000,000.00 2,198,120.00 5.000 2.736 2.774 03/02/2015 1,886
3136FJXY2 836 Federal National M ortgage A sso 12/23/2009 1,500,000.00 1,500,000,00 1,468,590. 00 4.200 4 .142 4.200 12/23/2019 3,643
3136F8M 77 731 Callable Fed. Nat. Mortg. Assoc. -S&P 02/07/2008 2,000,000.00 2,000,000.00 1,986,880.00 4.125 4.068 4 .125 02/07/2018 2,959
31398APN6 761 Callable Fed. Nat. Mortg. Assoc. -S&P 04/08/2008 1,000,000. 00 1,000,000.00 1,059,380.00 4.000 3.945 4.000 04!08/2013 1,193
3136F9ES8 763 Cal#abie Fed. Nat. M ortg, Assoc. -S&P 04/02/2008 1,000,000.00 1,000,000. 00 1,059,380.00 4 .000 3.945 4.000 04!0212013 1,187
3136FHVC6 814 Callable Fed. Nat. Mortg. A ssoc . -S&P 05!2812009 1,000,000. 00 1,000,000.00 968,13000 4.100 4 .043 4.100 05/28/2019 3,434
3136FHXF7 816 Callable Fed. Nat. Mortg. Assoc. -S&P 06/10/2009 2,000,000.00 2,000,000. 00 2,005,000.00 2.000 1.972 2.000 12/10/2012 1,074
313586U63 743 Fed. National M ortgage Assoc. 01/30/2008 3,954,813. 78 3,000,000.00 4,155,000.00 10.350 3.987 4.043 12/10/2015 2,169
880591 DT6 643 Tennessee Valley Authority 07107!2006 2,049,886.82 2,000,000. 00 2,240,620 .00 6.790 5.476 5.553 05/23/2012 873
880591CW0 656 Tennessee Valley Authority 10/16/2006 1,535,434.15 1,500,000.00 1,678,395 .00 6.000 5 .054 5 .125 03/15/2013 1,169
880591CW0 661 Tennessee Valley Autho rity 11/16/2006 3,090,524. 48 3,000,000.00 3,356,790.00 6.000 4.825 4.892 03/15/2013 1,169
880591DL3 684 Tennessee Valley Authority 02/15/2007 1,568,056.22 1,500,000.00 1,686,735 .00 7.140 4 .892 4.960 05/23/2012 873
880591DY5 716 Tennessee Valley Authority 08/20/2007 2,885,550.78 3,000,000.00 3,148,260,00 4,375 5.163 5.235 06/15/2015 1,991
Treasury Securitie s - Coupon
912828HK9 769
U S. Treasury
Subtotal and A verage
08!0612008
Subtotal and Av erage
312,429,176.71 310,239,000.00 323,784,916.16 4.159 4-217 1,365
2,013,704.82
2,000,000.00 2,100,620.00 3.375 3.078 3.120 11/30/2012 1,064
2,013,704.82 2,000,000.00 2,100,620.00 3.078 3.121 1,064
Total Investments and A verage
Run Date 01/21(2010 - 11:04
330,273,160.34 328,069,278.81 341,730,486 .23 3.983 4 .038 1,298
Portfolio CPA
AP
Fl (PRF_FI) 7.1 .1
Rep ort V er. 7 .3.1
Attachment C
Investment Policy Compliance
As of December 31, 2009
1
2
3
4
5
6
General Investment Guidelines:
a) The max. stated final maturity of individual securities in the portfolio should be 10 years.
b) A max. of 30 percent of the par value of the portfolio shall be invested in securities with maturities
beyond 5 years.
c) The City shall maintain a minimum of one month's cash needs in short term investments.
d) 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 (LAIF) - maximum investment limit is $40 million
- Fidelity Investments
e) Should market value of the portfolio fall below 95 percent of the book value, report this fact within a
reasonable time to the City Council and evaluate if there are risk of holding securities to maturity.
d) Commitments to purchase securities newly introduced on the market shall be made no more than three (3)
working days before pricing.
1) Whenever possible, the City will obtain three or more quotations on the purchase or sale of
comparable securities (excludes new issues, LAIF, City of Palo Alto bonds, money market
accounts, and mutual funds).
U.S. Government Securities:
a) There is no limit on purchase of these securities.
b) Securities will not exceed 10 years maturity.
U.S. Government Agency Securities:
a) There is no limit on purchase of these securities except for:
Callable and Multi -step-up securities provided that:
- The potential call dates are known at the time of purchase;
- the interest rates at which they "step-up" are known at the time of purchase; and
- the entire face value of the security is redeemed at the call date.
- No more than 20 percent of the par value of portfolio.
b) Securities will not exceed 10 years maturity.
Full Compliance
24.6%
Full Compliance
$93.8 million
$15.5 million
$0 million
103.5%
Full Compliance
Full Compliance
Full Compliance
Certificates of Deposit:
a) May not exceed 20 percent of the par value of the portfolio;
b) No more than 10 percent of the par value of the portfolio in collateralized CDs in any institution.
e) Purchase collateralized deposits only from federally insured large banks that are rated by
a nationally recognized rating agency (e.g. Moody's, Standard & Poor's, etc.).
d) For non -rated banks, deposit should be limited to amounts federally insured (FDIC)
e) Rollovers are not permitted without specific instruction from authorized City staff.
Banker's Acceptance Notes:
a) No more than 30 percent of the par value of the portfolio.
b) Not to exceed 180 days maturity.
c) No more than $5 million with any one institution.
Full Compliance
Full Compliance
Full Compliance
Full Compliance
18.1%
Full Compliance
0.I%
None Held
Commercial Paper:
a) No more than 15 percent of the par value of the portfolio.
b) Having highest letter or numerical rating from a nationally recognized rating service.
c) Not to exceed 270 days maturity.
d) No more than $3 million or 10 percent of the outstanding commercial paper of any one institution,
whichever is lesser.
None Held
N. esbmeni Report Nnsnmenls.ls Nlatmeel C
1111010 1021 N..1
Attachment C
Investment Policy Compliance
As of December 31, 2009
Short -Term Repurchase Agreement (REPO):.
a) Not to exceed 1 year.
b) Market value of securities that underlay a repurchase agreement shall he valued at 102 percent or
greater of the funds borrowed against those securities.
Money Market Deposit Accounts
a) Liquid bank accounts which seek to maintain a net asset value of $1.00.
Mutual Funds:
a) No more than 20 percent of the par value of the portfolio.
b) No more than 10 percent of the par value with any one institution.
Negotiable Certificates of Deposit (NCO):
a) No more than 10 percent of the par value of the portfolio.
b) No more than $5 million in any one institution.
None Held
Full Compliance
None Held
Medium -Term Corporate Notes:
a) No more than 10 percent of the par value of the portfolio.
b) Not to exceed 5 years maturity,
c) Securities eligible for investment shall have a minimum rating of AA from a nationally recognized
rating service.
d) No more than $5 million of the par value may be invested in securities of any single issuer, other
than the U.S. Government, its agencies and instrumentality.
e) If securities owned by the City are 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 such securities.
Prohibited Investments:
a) Reverse Repurchase Agreements
b) Derivatives as defined in Appendix B of the Investment Policy
All securities 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
None Held
None Held
Full Compliance
None Held
Full Compliance
N'ies..1. Reparl Atlxnmenls Nlschment C [He+d 112 mato 1624 MA