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Home My WebLink AboutStaff Report 1306City of Palo Alto (lD # 1306) City Council Informational Report Report Type: Department Information Date: 1/18/2011 Title: City of Palo Alto's Investment Activity Report Subject: City of Palo Alto's Investment Activity Report for the Second Quarter, Fiscal Year 2011 From: City Manager Lead Department: Administrative Services 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 $351.5 million; in comparison, last quarter it was $339.5 million. The growth in the portfolio of $12.0 million since the last quarter primarily results from the timing of cash flows. For example, initial property tax receipts and one quarter of the City Sales tax receipts ("triple flip") and in-lieu vehicle license fee tax payments by the State are received in the second quarter. The portfolio consists of $22.5 million in liquid accounts and $329.0 million In U. S. government treasury investments, agency securities, and certificates of deposit. The $329.0 million includes $90.3 million in investments maturing in less than two years, comprising 27.4 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 103.9 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 buying and selling securities. It is important to note, January 18, 2011 (lD # 1306) Page 1 of 3 1- 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 3.42 years compared to 3.42 years last quarter. Investments Made During the Second Quarter During the second quarter, $17.8 million of government agency securities with an average yield of 3.9% percent matured. During the same period, government securities totaling $32.9 million with an average yield of 2.0% percent were purchased. As higher yielding maturing investments are re-invested at lower interest rates, the portfolio's yield is expected to further decline in coming quarters. The City's short-term money market and pool account decreased by $3.0 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 $222.7 million and expenditures will be $212.5 million over the next six months, indicating an overall growth in the portfolio of $10.2 million. As of December 31, 2010, the City had $22.5 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 $24.0 million will mature between January 1, 2011 and June 30, 2011. 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 major 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 $2.9 million. As of December 31,2010, the yield to maturity ofthe City's portfolio was 3.32 percent. This compares to a yield of 3.46 percent in the first quarter. The portfolio yield is expected to decrease in future quarters as staff continues to re-invest higher-yielding maturing securities at lower interest rates. The City's portfolio yield of 3.32 percent compares to LAiF's average yield for the quarter of 0.49 percent and an average yield on the two-year and five-year Treasury bonds during the second quarter of approximately 0.47 percent and 1.48 percent, respectively. January 18, 2011 (ID # 1306) Page 2 of 3 Yield Trends In the last eight quarters, the Federal Open Market Committee (FOMe) maintained the historical low federal funds and discount rate at 0.25 and 0.75 percent, respectively. The FOMC outlook is that the slow pace of the economic recovery requires maintenance of low interest rates to stimulate economic activity. Businesses remain reluctant to hire, household spending remains cautious, and the housing market continues to be weak. The FOMC is expected to , . maintain lower rates for an extended period to create jobs and "jumpstart" the economy. Based on current interest rates and FOMC monetary policy, the City's portfolio's yield is expected to continue to decline. 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, 2010. FISCAL IMPACT This is an information report. ENVIRONMENTAL REVIEW This information report is not a project under the California Environmental Quality Act; therefore, an environmental review is not required. ATTACHMENTS: • Attachment A: Consolidated Report of Cash and investments (PDF) • Attachment B: investment Portfolio, as of December 31,2010 (PDF) • Attachment C: investment Policy Compliance (PDF) Prepared By: Department Head: City Manager Approval: January 18, 2011 (ID # 1306) Tarun Narayan, Senior Financial Analyst Lalo Perliz, Director of Administrative Services "~ta(#:'- Page 3 of3 Consolidated Report Cily of Palo Alto Cash and Investments Second Quarter, Fiscal Year 2010-11 (Unaudited) City Investment Portfolio (see Attachment lJ) Otber Funds Held by tbe City Cash with Wells Fargo Bank (indudes general and imprcst accounts) Investment with CAMP (University Ave. Parklng Garages) Petty/Working Cash Total· Other Funds Held By Cily Funds Under Management "{Third P.r!v Trustees' (Ocbt Service Proceeds) us nank Trust Services .... )998 OolfCourse Certificates of Participation Debt Service Lease Payment Funds 2002 Civic Center (Tax Exempt) Certificates QfParticipaHon Reserve Fund $ Book Value 155,536,095 556,973 591,990 12,258 1,161,221 46,079 348,146 2002 Downtown Parking Imp\-'!;. (Taxable) Certificates ofPartlcipalioll Reserve Fund 239,688 Escrow Account for Partial Defeasance of Bonds 2002 Utility Revenue Bonds Debt Selvice Fund 2009 Water Revenue Bonds (Bnild Amerjea Bonds) Project, Debt Service, Reserve, Cost oflssuance Funds 2010 General Obligation (LibIHry) Bonds Cost of Issuance Fund Califumja Asset Management Program (CAMP) U. 1998 Golf Course CertifIcates of Participation Reserve Fund 200f University Ave, Parking Bonds Reserve Fund 2002 UniverSity Ave. Parking Bonds Reserve and Admin. Funds 2002 Utility Revenue Bonds Reserve Funds 2010 General Obligation (Library) Bond Project Fund Total Under Trustee Management GRAND TOTAL 740,156 75,406 30,080,363 . 39,547 688,296 630,959 3,221,797 1,864,679 49,650,226 87,627,342 $ 444,324,658 • These funds ate subject to the requirements ofthc underlying debt indenture. Attachment A Market V.lu. $ 369,549,731 556,973 591,990 12,258 1,161,221 46,079 348,146 239,688 740,156 75,406 30,080,363 39,547 688,296 630,959 3,223,797 1,864,679 49,650,226 87,627,342 $ 458,338,300 ** U.S. Blink 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 acceptanee, certifieate of deposit, eommereial papcr, federal agency securities, and repmcllasc agreements" CUSIP Investment # Certificates of Deposit -Bank 9244804549 674 Managed Pool Accounts SYS1Sil SYS159 158 159 Federal Agency Issues -Coupon 307692AA1 307692AA1 307692AA1 30769PAAO 307692AA1 31315PLR8 31315PMD8 3131$PES4 31315PEY1 31315PGE3 31315PATll 31315PNM7 31331W91 31331V4E3 31331VWS1 31331S3H4 31331XBSO 31331XCYS 31331VT'Y2 31331XGX4 31331XNE8 3133TXPB2 Run Date: 01/05a011 l3:35 628 630 631 645 696 820 82' 838 839 840 866 923 653 655 657 658 659 660 662 666 676 677 Issuer Certificate of Deposit Fkrerlty Investments Local Agency Investment Fund Federal Agricultural Mortgage Federal Agricultural Mortgage Federal Agricultural Mortgage Federal Agricultural Mortgage Fedeta! Ag!lCUttural Mortgage Federal Agneultural Mortgage Federal Agricultural Mortgage Federal Agricultural MortQage F"ederal Agricultural Mortgage F"ederal Agricultural Mortgage Federal Agricultural Mortgage Federal Agricultural Mortgage FeQe1'a! Farm Credit Bank Federal Farm Credit Bank Federal Farm Cl'il!dit Bank F"ederal Farm Credit Sank Federal Farm Credit Sank Federal Farm Credit Bank Federal farm Credit Bank Federal Farm Credit Bank Federal Farm CrlKlit Bank Fedeta:! Farm Credit Sank ATTACHMENT B City of Palo Alto Fund ALL -Portfolio Listings Investments by Fund December 31, 2010 Current Purchase Date Book: Value Par Value Market Value Raw 11/24/2006 Subtotal and Av~rnge 07101J20tO 0710112010 Subtotal and Average 05f1212006 0511812000 05/1Si2006 07/20/2006 0510312007 08/1112009 0811012009 12fJ0!2009 12f30!2009 01/1912010 05/1712010 12/2612010 0912612006 1at1212006 10/1612006 10/16/2006 10125/2006 1110612006 11/16/2006 1211112006 0210112007 0210712007 ____ ':.:66",:.:8"80,,.94:..: 166,880,94 166,880,94 166,880.94 166,880.94 166,880.94 2,261,050,00 20,227,018.72 22,488,068.72 3,999,255.93 1,999,636.55 3,999,200.67 1,999,617.99 2,000,000.00 2,000,000.00 2,000,000,00 2.000,000.00 1,500.000.00 2.000,000.00 1,000,000.00 1,500,000.00 2,017,164.92 4,005,966.42 2,040,593.67 1,483,526,72 3,000,000,00 2,000,000.00 2,009,564.21 2,000,000.00 2,000,000.00 2.000,000,00 2.261,050,00 2,261,050,00 20,227,018.72 20,265,750,43 22,488,068,72 4,000,000,00 2.000.000.00 4,000,000.00 2,000,000.00 2,000,000.00 2,{JDO,ooo.OO 2,000,000.00 2.000,000,00 1,500,000,00 2,000,000,00 1.000,000.00 1,500,000.00 2,000.000.00 4,000.000,00 2,039.000,00 1,500,000 00 3,000,000.00 2,000,000.00 2,000,000,00 2.000,000.00 2,000,000,00 2,000,000.00 22,526,WO.43 4,005.200.00 2,002,600.00 4,005.200,00 2,053,900.00 2,002,600,00 2,107.780.00 2.052,060,00 2,078,230,00 1,570,095.00 2,172,720.00 1,099,960,00 1,507,650,00 2,221,320,00 4,534,320.00 2,295,832.44 1,662.360,00 3,332,070.00 2,269,740.00 2,192.720.00 2,116,240:00 2,007,300.00 2,182,680.00 4,020 0,020 0.460 4J375 4.875 4.875 5,500 4,.875 3.250 2.100 2,820 4.500 4.125 3.750 3.150 5.280 5,180 5.200 4.750 5.050 5,050 5.200 4.625 5.050 5.150 YTM 360 4,069 4_070 0,019 0.453 0,410 5.389 5.375 5,385 5,465 4,606 3,205 2.071 2.781 4.438 4.068 3,698 3.100 4.827 5.059 5.100 5.104 4.979 4.930 4.877 4,56~ 4,980 5.079 city of Palo Alto Administration SVC$, Dept. 250 Haml~on Ave" 4th Flom Palo Alto, CA 94301 (650)329-2362 YTM Maturity Days To 365 Date Matul'ity 4,126 0912412011 ~126 0,020 0.460 0.416 266 266 5,4$4 01/1412011 13 5A5O 01/14/2011 13 5.460 01/1412011 13 5.541 07115/2011 195 4.872 0111412011 13 3.250 00111/2014 1,318 2.,00 08/1012012 2.1320 12/3012014 4.500 12J~0/2019 4.125 01/1912017 3]50 05/17/2017 3.150 12'2812017 4.894 0Si16/2013 5.130 09/1512014 5.171 0411712014 5.175 02/1812014 5.048 1112512013 5.050 05/061:2015 4.945 03/2012013 4.625 0611112012 5,050 02101/2011 5,150 02/0712013 587 1,459 3.285 :2,:210 2,328 2.553 956 1,3$3 1,202 1.144 1,059 1.586 60' 527 31 768 Portfolio CPA AP FI (PRF _FO 7.1.1 ReportVer.7.3.1 I ... '" CUSIP Inwstment# Federal Agency I~ues -Coupon 31331XSR4 31331XVH2 31331XWU2 31331XA:36 31331XS27 31331XC26 31331XD74 31331XC26 31331XK35 31331XU75 31331X2JO 31331X2US 31331X3H3 31331X5Y4 31331YCJ7 31331YER7 31331YHQa 31331VCQ7 31331$KH5 31331YSV3 31331GLM9 31331GPN3 31331GLT4 31331GlBO 31331GU31 31331 GZ44 31331GSoe 31331JFZ1 31331JKH5 31331JK'N2 313313082 31331YELO Rvl'\ Oate. 01105/2011 -13:35 690 692 693 701 702 703 705 707 709 715 717 71. 7:20 721 722 724 725 742 744 747 779 Callable 785 788 823 825 826 83S 850 8$6 Callable ass CaJlabfe 870 872 Issuer Federal Farm Credit sank Federal Farm Credrt Bank Federal Farm Credit aa"k Federal Farm Credit Bank Federal Farm Credtt Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Sank Federal Farm Credrt Sank Federal Farm Credit Sank Federal Farm Credit Bank Federal Farm Cl'E!dit Ban\< Fedefal Farm Credit Sank Federal Farm Credit Bank Federal Farm Credit 8ank Federal Farm Credit Bank Fedefal Farm Credit Sartk Federal Farm Credit Bank Fedet'al Farm Cffldit Sank Federal Farm CredJ\: Sank Federal Farm Credit Bank Federal Fann Credit Sank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Cred~t Sank Federal Farm Cre<flt Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank FedeJ9.1 Farm Credit Bank Federal Farm Credit Bank Federal Farm Credit Bank Fund ALL -Portfolio Listings Investments by Fund December 31,2010 Purchase Oate 0:312712007 04/1212007 0412512007 05r.:'512007 0510512007 0610512007 0611212007 0610812007 07/05/2007 0812012007 0010412007 09/0612007 09/17/2007 10/03/2007 10/30/2001 11/21/2007 12/1212007 0113012008 0113012008 02/1112008 01/27/2009 03l04I2009 03/04/2009 08/21/2009 0912412009 10/15/2009 12/0912009 0310812010 0411212010 04/1912010 06102f2010 nsJ0412010 Book Value 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 2,980,144.22 2,000.000.00 3,008,983.96 2.000,000.00 , ,500,000,00 1,500,000.00 1,500,000.00 2,000,000,00 2:,000,000.00 2,000,000.00 2,005,438,91 1,022,101.11 1,500,000.00 2,000,000,00 1,500,000.00 '1,000,000.00 2,000,000.00 2.000,000.00 2,000,000.00 2,000.000.00 2.000,000.00 1,500,000.00 1,500,000,00 1,000,000.00 2,204,198.62 ParVah.l~ 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 3,000,000.00 2,000,000.00 1,500,000.0'0 1,500,000,00 1,500,000.00 2,000,000.00 2,000,000,00 2,000,000.00 2,000,0000,00 .1,000,000.00 1,500,000.00 2,000,000.00 1,500,000,00 1,000,000.00 2,000,000.00 2,000,000.00 2,000.000.00 2,000,000.00 2,000,000.00 1,500,000,00 1,5000,000.00 1,000,000.00 2,000,000.00 Cummt Market Value Rate 2,227.360,00 2,111,520.00 2,028,460.00 2.038,120.00 3,a76,985.00 2,251,240.00 2,243,180,00 3,391,860:00 2,050,120.00 3,383,820.00 2,143,8400,00 1,544,250.00 1,682,160,00 1,691,865,00 2,260.280,00 2,069.180.00 2,218,200.00 2,246,260.00 1,112,140.00 1,629,675,00 2,066.020.00 1,558,740,00 1,071,930.00 2,107.720.00 2,040,900.00 2,032,780.00 2,009,060,00 2,096,920,00 1,515,360.00 1,545,150.00 1,014,780.00 2,238,480.00 4.875 4.875 4.800 5.050 5,200 5.250 5.330 5.250 5.250 5,300 4.930 4,75D 5.000 5.000 4.900 4.350 4.625 4.800 4,500 3,850 4.000 2,600 3,750 3,000 1,800 1.550 0,1)75 3.375 4,000 3.740 3.000 5,000 YTM 360 4.807 4,800 4734 4.980 5.130 5.178 5.257 5.409 5.178 5.128 4.862 4.684 4.931 4.931 4.832 4.290 4.561 3,945 3,820 3.797 3,944 2,5$4 3.698 2.959 1.775 1.528 0,863 3.328 3.945 3.688 2.958 3,027 Page 2 YTM Ma1urtty Days To 365 Date Maturity 4,874 03114/2014 4.875 04/1212012 4.800 0412512011 5.050 0512512011' 5.201 0810512013 5.250 06/0512014 5.330 12/1812013 5.484 0610512014 5.2500 07/05/2011 5,199 08!13J2014 4.930 0910412012 4.750 09/06/2011 5.000 09/1712014 5.000 10/0312014 4.900 10130120017 4.350 1'1/21/2011 4.624 12115/20017 4,000 10119/20015 3,873 0112212015 3.850 0211112015 3.999 01/25/2019 2,600 03}0412013 3,749 0112912016 3.000 09/2212014 1,$00 09124/2012 1.550 10115J2012 D.875 1210912011 3.375 0310812017 4.000 04112!2018 f 3.140 04/1912017 3.000 06/02/2017 3.070 11/15J2016 1.168 467 114 144 947 1,251 1,082 1,251 185 1,320 612 248 1,355 1,371 2,494 324 2.540 1,752 1,482 1,50:2 2,946 793 1,854 1,360 632 653 342 2,258 2,658 2,300 2,344 2,145 Portfolio CPA AP FI (PRF _A)7, 1.1 Rej»!!Ver 7.3,' CUSlP Inwstment# Federal Agency 1ssues ~ Coupon 31331JZX4 31331JZA4 31331JN90 31331JP80 31331JU92 31331JX32 31331J5F6 3133MDBT9 3133XFJYS 3133XG3W2 3133XF5T9 3133X9ZZ6 31339Y7K2 3133XHBL5 3133XIiXW7 3133XHW51 3133XJUT3 3133XGJ96 3133XGJ9. 3133XLOGS 3133XLDG5 313SXP4Q4 3133XPBA1 3133XPBA1 3133XPTJ3 3133X$P93 3133XTCS3 3133XTF04 3133XTP26 3133XTQH2 3133XTYD2 3133XUCX9 RunOt'l1e: 011OSI2011 13:35 696 Cal1able 898 Callable 903 9Q4 Callable 909 CaJlable 910 91. 595 642 644 648 649 652 654 653 667 685 699 706 710 713 729 Callable 730 741 751 callable 777 789 793 612 Callable 817 818 819 Issuer Federal Farm Cre<!Jt Bank Federal Farm Credit Bank Federal Farm Credit Bank Federal Fann Credit Bank Federal Farm Credit Bank Federal Farm CredIt Bank Federal Farm Credit Bank. Federal Home Loan Bank Federal Horne Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan ~nk. federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Barik Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Fed€l"al Home Loan Bank Federal Home Loan Bank Federal Home Loan Sank Federal Home Loan Bank Federal Home Loon Bank Federal Home Loan Bank Federal HOO'1e Loon Bank Fedeml Home Loan Sank Federal Home Loan Bank Federal Home Loan Sank Fed€l"a! Home Loan Sank Federal Home Loan Bank Fund ALL -Portfolio Listings Investments by Fund December 31,2010 Purc.'1ase [laW 09/.1012010. 0.812412010. o.9/29f2010 10/05120.10. 1012$120.10. 10128/20.10 12116120.10. 0.71111200.5 o.7107J2006 0.71111200.6 09112120.06 0.9/12/2:0.06 0.912&2006 10.112120.06 11127/20.0.6 12114/20.06 0.2123/20.0.7 0.5116/2007 06108120.0.7 06128120.0.7 OSf2a!2oo7 0.112412000 D1!2SJ20a8 o.1{30/2oo6 02l2131<008 0.1/16120.0.9 0.3/16/:2009 0410.1/2009 05!20J20a9 0.512212009 0.611612009 07120/2009 Book¥alue 1,500.,0.0.0..0.0. 1,50.0.,000.0.0. 1,000,000,00 1,500.0.00,00 2.0.00,000.,00 2,000.,000,00 2,0.00,000.00. 2,003,4n,62 1,997,60.2.56 2,000,751.61 1,999,130,55 1,989,26L97 2,003;452.49 1,937.009,97 2,000,00.0..0.0 2,000.,0.0.0.00 2,000..0.00.0.0 2,010.,842,69 995,573.:20 2,500,0.0.0..00. 3,0.17,559.14 1,000.,000.00 2,000,000.0.0 2,953.772.80. 1,500,000..0.0 3,046,66726 2,000,000.00 $,000,000,00 1,500,00.0..00 1.500,000.00 2,000,000.00 2,000,000..00 Par Value 1,500,000.00 , ,500,000,00 1,000.,000.00 1,500,00.0.00 2,000,0.0.0..0.0. 2,000.,000..0.0. 2,000,000.0.0 2,000,000.00 2,000,0.0000 2,000,000.,00 2,0.00,000.00 2,0.00,000.00 2,000,000.00. 2,000,000,0.0 2,000,000,00 2,0.00.,000,00 2,00.0,000.00 2,000.000.00 1,000,00.0.00 2,500,000.0.0. 3,000.000.00. 1,000,000,00 2.000,000.00 3,0.00,000.00 1,5C0,o.OO.00 3,0.0.0,000.00 2.0Qo.,000.DO 3,000,000.00. 1,500,000.0.0. 1,500.,0.00.00 2,0.00,000.00 2,0.00,000.00 Current Market Value Rate j ,500,045.00 1,468.500.00 949,040.,0.0 1,440.625,00 1.949]60,00 1,910,480.00 1,999,120.00 2,012.740.00 2,042,120.00 2,050,240.0.0 2,061,300,00 2,082,120,00 2,197,040.00 2,235.660,00. 2,213,620..00 2,213,180.00 2,107,120.00 2,223,260,0.0. 1,111,1340.00 2,634,650,00 3,401,580.00 1,002,310.00 2,136,480.00 3.:204,720,0.0 1,566.610.00 3,164,850.00 2,108,960,00 S,154,29O.00 1,501,0.20,0.0 1,526,970.00 2,170,440.00. 2,041,200.00 0.620 2.520 2.675 3.240 2500 1.700 3.625 5.875 5.250 5,600 5.000 4.500 5.000 4.875 4,875 4.875 5,000 5.250 5,250 5.375 5.375 4.500 3,500 3.500 4.500 3,125 3.000 2,900 4.060 1.800 4,000 1.875 YTM 360 0.611 2.485 2,835 3.195- 2.466 1,676 3,575 4,201 5AS3 5.435 5,0.02 5.040 4,850 5.020 4.608 4,806 4.929 4.943 5,369 5,300 5.099 4438 SA51 3.869 4.421 2.794 2"958 2,650 4.0.24 1.ns 3.945 2.210 Page 3 YTM Maturity Days To 365 Date Maturity 0.620. 09/1012012 2.520. 11J24J2017 2,875 0$/2912020 3,240. 1010;512020 2,500 01126/2018 1.700 10.128/2016 3,625 1211612020 4.260 02115/2011 5.560 06/1012011 5.511 06/2812011 5.072 09/09/2011 5.110 01/06/2012 4.918 0711612013 5.089 0611312014 4.875 11/:17/2013 4.873 1211312013 4,'997 03109/20.12 5.011 09113/2013 5.444 09f13120'i3 5.374 0611312014 5.170 06113/2014 4.500 01/2412018 3.499 03/13!2015 3.923 03113/2015 4,482 OmaJ2018 2,833 12/13/2013 2.999 03/1312014 2.900 04/011:2014 4.0.80 0512012019 1.800 0.512212012 4.000. 06/16f2015 2,240 0.7/2312012 616 2,519 3,559 3,565 2.582 ,2,127 3,637 45 160 178 251 370 927 1,259 1,061 1,077 433 986 988 1,259 1,259 2,SllO 1.532 1,532 2.615 1 ,on 1,167 1.186 3,061 507 1,627 569 PortfOlio CPA AP FI(PRF]f}7.1.1 ReportVer, 7.3.1 CUSIP Investment # Federal Agency Issues -Coupon 3133XUMS9 3133XUMR1 313SXOTL5 3'33XVRJ2 313SMJQFO 3133XW4W8 3133XWRQ4 3133XWX53 3133XWX95 3133XXH59 3133XVV\N47 3133XXXKS 3133XEUG2 3133XHVS8 3133XYlN3 3133XYVXO 3133XYVs5 3133X\'NU1 3133XUMR1 3133XWNB1 3133XBDM4 3133705P9 313370ST1 3133706K9 313370RP5 313370TB4 313371702 313371FB7 313371FTS 313371PV2 313371PU4 313371VFO Run Oa'!e' 0110512011-13:35 .22 827 830 832 833 837 843 Cal!abfe 845 847 852 Callable 854 857 Callable 859 660 as7 Callable .75 876 Callable 878 879 M3 865 SSG 887 868 Callable 899 Callable 900 90' 907 90S CaUable 911 912 913 Issuer 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. F'eoeral Home Loan Sank Federal Home loan Sank Federa{ Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Fedetai Home Loan Sank Federa[ Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal H01"nE1 loan Bank Federal Home loan Bank Fedaai Home Loan Bank Federal Home loan Sank Federal Home Loan Sank Federal Home loan Bank Federal Home Loan Bank Federal Home loan Bank Federal Home loan Bank Federal Homeloat'! Bank Federal Home Loan Sa'nl( Federal Home Loan Bank Federal Home loan Sank Federal Home loan Bank Fund ALL -Portfolio Listings Investments by Fund De.cember 31, 2010 Purchase Date 08/1212009 1012tl2009 1012112009 1111912009 11J19f200S! 12/11/2009 02/10/2010 0210312010 0211912010 0311712010 03119/2010 04/~a{2010 04/26/2010 04f2612010 06f08f2010 0612912010 061291'201 0 0612312010 0612312010 061'2912010 o6I29J2010 07/1612010 0710812010 0712:1/2010 09/1312010 0813012010 09I271201{} 1012212010 1012712010 1'1109/2010 11(0912010 11119{2010 Book Value 3,OOO,00{Loo 1,021.308.59 3,249:,$4$.87 3,020,073.37 1,328,82:8,52 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 1,500,000.00 2,116:,466,.20 1,500,000,00 1,612:,74376 1,620,124,56 1,500,000.00 2:,000,000.00 1,173,553.72 3,075,264,39 1,565,967.30 1,546,992,90 2.210,935.62 1,500,000,00 1,500,000.00 1,SOO,000.00 1,000,000.00 2.000,000XIO 1.000,000.00 2,000,000,00 1,500,000.00 1.500,000.00 1,500,000.00 2,000,000.00 Par Value 3,000,000.00 1,000,000.00 3,000,000.00 3.000,000.00 1,200,000.00 2,000,000,00 2,000,000.00 2,000.000,00 2,000,000.00 1,500,000.00 2,115,000.00 1,500,000.00 1,500,000,00 1,500,00000 1.500,000.00 2.000,000.00 1,173.553.72 S,ooo,ooo.OO 1,500,000.00 1,500,000.00 2,000,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,000,000.00 2,000,000.00 1,000,000.00 2,000,000.00 1,500,000,00 1.500,000.00 1,500,000.00 2,000,000.00 Current Mart«at Value "Rate 3.225,990.00 1,062.880.00 3,354,030.00 3,119,460.00 1,376,112,00 2,027,160,00 2,008,640.00 2,OtS,SBO,00 2,076,200.00 1,508,640.00 2,131.898.65 1,556,5~O.00 1,678,215.00 , ,697,790.00 1,512,285.00 2,017,$20.00 1,173,624.13 3,139,260.00 1,594,320.00 1,555,380.00 2,237.0s0.00 1.504,410.00 1,508,550,00 1,482,465.00 969,760.00 1,993.660.00 992,700.00 1.930,980.09- 1,439,985.00 1,421,100.00 1,471,980.00 1,933,660.00 4.500 3.250 5.000 3,500 5,500 1,500 4.370 . 1.100 2,750 3.625 1.125 4.375 4.875 5.000 3.550 1.125 2670 2.750 3.250 2.875 4.750 0.700 1.080 3.600 2..820 0.850 1.000 1.350 1.850 1.625 MOO 1,625 YlM 360 4.437 2.594 3.101 3.325 3,304 1.479 4.310 1.085 2.711 3575 1.051 4.315 3.227 3.430 3,501 '1'.109 2.633 2,052 1.975 2,099 2.022 0.690 1.065 3.550 2.781 0.838 0.988 1,.331 1.824 1.602 0.493 1,602 Page 4 YT14 Maturity Days To. 31$5 Cate Maturity 4.499 09/f'Sf2019 2.631 09112/2014 3,145 1212112015 3,372 12109/2016 3.350 08/15/2016 1.500 12/11/2012 4.370 02/10/2020 1.100 04/0312012 2.749 0311312015 3.62$ 0311712017 1 "065 Q3f09120 12 4,375 Q4/16/2020. 3.272 03/1112016 3.476 1210912016 3.550 OSto8!2017 1,125 10/2912012 2.670 0612912015 2.081 1211212014 2003 09/1212014 2,128 0611212015 2.051 02/1312015 0]00 0411612012 1.080 04I0S12013 3,600 07121/2020 2.820 03l13{2019 0.850 07/2912013 1.000 02!27f2014 1.350 oeJ2812015 1.850 04127/2016 1.624 12109/2016 0.499 1211312013 1.625 12/1112015 3,177 1,350 1,815 2.1~9 2,053 710 3.327 458 1,532 2,267 433 3,393 1,896 2,169 2,350 667 1,64<) 1,441 1,3$0 1,623 1,504 471 828 3,489 2,993 940 1.153 1.700 1,943 2,169 1,077 1,805 PortfOlio CPA AP FI(PRF~FI)7.1.1 Report Ver, 1.3.1 CUSII' Investment # Federal Agency Issues ~ Coupon 313371WB8 313371PV2 3i3371NW2 3133XSZ50 3133XTF03 3133XTHE9 3128X1KG1 3128X1KG1 3134A4UM4 3128X6N85 3128XSE73 3128X33E1 3134G1GY4 3134G1GZ1 3134G1KP8 3128X2RA5 3134G1LN2 3134A4VGS 3134G1VSO 3134G1H72 3134G1P40 31364fBV2 313e4KSSO 3136F8M77 313566U8S 31398APNe 3136F9ESS 31398ANT5 3136FHGA7 31398AXBs 3136fHPX7 31359MXX6 Run Oat,,· 0110512011 -13:3$ 91' 920 921 781 782 794 679 682 714 734 Callabfe S08 Callabie 828 873 Caltable 874 Galiab+e 882 Callable 884 8S9 Catlabie 890 905 Callable 918 Callable 917 Callable 678 683 731 Callable 743 761 Callable 763 Ca!labte 77;;' 790 Callable 798 CaHabie 805 Callable 829 Issuer Federal Home loan Sank Feder31 Home loan Banl( Federa! Home Loan Bank 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 Mort9age 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. Home Loan f¥tortgage Corp. FetL Home loan Mortgage Corp. Fed. Home Loan Mortgage Corp, Federal National Mortgage Asso Federal NatiOnal Mortgage Asso Federal National Mortgage Asso Federal National Mortgage: Asso Federal National Mortgage Asso FederaJ National Mortgage Asso F~I NationaL Mortgage Asso Federal National MOrtgage Asso Federal National Mortgage Asso Federal National Mortgage AssO Federal National Mortgage Asso Fund All -Portfolio listings Investments by Fund December 31, 2010 Pun:hase Date 11/24/2010 12/15/2010 12/15/2010 0210612009 03127/2009 04/13/2009 0210712007 02115/2007 08120/2007 01/3112008 0511912009 101:21/:2009 0613012010 07/07/2010 07114{2010 06/2912010 0712012010 07/0712010 10121/2010: 12123!2010 12!2812010 0210712007 02/15/2007 02!0712OOS 01/301'2008 0410812008 04/0212008 01116/2009 0312312000 0510512009 05)1412009 1012112009 BookVaiue 2,000,000.00 1,421,135.19 1,440,831.85 2,000,000,00 2,000,000,00 2,000,000.00 1.466,43911 1,956,828.29 1,969,026.27 1,500,000.00 1,500,000,00 2,173,025J34 1,500,000.00 1,500,000,00 1,500,OOOJJO 4,539,680.97 1,500,000.00 4,473,660.08 1,500,000.00 1,350,000.00 1,500,000.00 2,042,769~23 1.430,168.65 2,000,000.00 3,793,949.47 1,000,000.00 1,000,000.00 3,117,413.97 1,000,000.00 1,500,000.00 1,500,000.00 2,171,320.77 Par Value 2,000,000.00 1,500,000.00 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 1,500,000.00 1.5~,OOO.00 2.000,000.00 1,500,000.00 1,500,000.00 1,500,000.00 4,000,000,00 1,500,000,00 4,000,000.00 1,500,000.00 1,350,000.00 1,500,000.00 2,000,000.00 1,500,000.00 2,000,000.00 3,000,000.00 1,000,000.00 1,000,000,00 3,000,000.00 1,000,000.00 1.500,000.00 1,500,000.00 2,000,000.00 Current Marte( Value Rata 1,981,700.00 1,421.100.00 1,432.860.00 2.036,360.00 2,099,740.00 2,044,560.00 1,611,270,00 2,148,360.00 2,198,560.00 1,645,590,00 1,510',065,00 2,244,140,00 1,510,560,00 1,500,255.00 1,500.930.00 4,567,120.00 1,501,335.00 4,480,880.00 1,490,145.00 1,330,2$3,00 1.500,585.00 2,192,200.00 1,536,090.00 2,006,540.00 4,123,710.00 1.070,870.00 1,070,530.00 3,221,040.00 1,007,690.00 1,511.655.00 1,518,195.00 2,248,580,00 1.150 1,625 1.375 2.100 2.850 2,000 4.000 4.000 4,500 4.300 2.170 5,050 3.000 2.750 3,000 5,300 2.375 4.750 1,125 2.000 0.900 6,470 2.000 4.125 10.350 4.000 4.000 4.280 3.250 2.800 2.125 5.000 YTM 3l;O 1,134 2.550 2,191: 2.071 2,810 1,972 5.010 4.970 5.033 4,2:41 2,140 2.713 2.958 2.712 2.958 2.327 2.342 2,135 1.109 1.972 0.887 4.967 4,956 4.088 3.987 3.945 3.945 2298 3.206 2.761 2.095 2.736 PageS YTM Maturity Days: 1'0 365 Date Maturity 1.150 07/2412014 2,585 12/0912016 2.221 12111/2015 2.100 0210612012 2850 03f.27f2014 2.000 07/1:312012 5.080 0611212013 5.040 0611212013 5.103 .01/1512014 4.300 01/3112015 2.170 1111912012 2.751 0112€J2015 3,000 0613012016 2,750 07/(J712015 3.000 07/1412016 2.360 12101/2015 2.375 0712012015 2.165 1111712015 1.125 101:21/2013 2.000 1212312015 0.900 12/2812012 5.036 09125/2012 5.025 08117/2012 4.125 02/0712018 4.043 12/10/2015 4.000 0410812013 4.000 0410212013 2,330 0212512013 3,250 12123/2014 2.800 0$10512014 2,125 0511412014 2.774 03/0212015 1,300 2,169 1,805 401 1,181 559 893 893 1,110 1,491 688 1.486 2,007 1,_ 2,021 1.795 1.661 1,781 1,024 1,817 727 633 594 2.594 1.804 82$ 822 785 1,452 1.220 1,229 1,521 Portfolio CPA AP FI (PRf]1) 7. t 1 Repon Ver: 7,3,1 CUSIP Investment # Federal Agency Issues -Coupon 3136FJXY2 836 313S9MZCQ 3136FMW"34 3136F'MVS4 3136FM2G8 3136FM6X7 3136FPEQ6 3136FPNW3 3't36FPQK6 3136F'PPSa 3136FPRSO eao$91DT6 8B0591CiNO aso591CWO 88oS91Dl3 es0591DY5 8S0591EA6 880591DT6 891 692 Callable 993 Callable 894 Callable 895 Callable 897 Calfable 902 Callable 906 Callable 915Callatne 919 Callatrte 643 656 861 684 716 861 863 Treasury Securities -Coupon 91282SHK'9 769 912828MQO 912S28Ml1 912828Ml1 RunOate: 01f051'2011. 13:35 855 862 871 Fund ALL -Portfolio Listings Investments by Fund December 31,2010 Current Isstrer Purchase Dall; Book Value Par Value Ma:rket Value Rate Federal NatiOn~ MOrtgage Asso Federal National Mortgage Asso Federal NatiOnal Mortgage Asso Federal National Mortgage Asso Federal NatiOnal Mortgage Asso Federal National Mortgage Asso Federal National Mortgage Asso Federal National Mortgage Asso Federal National Mortgage ft.sso Federal National Mortgage A$$O Fedefal National Mortgage A$$O Tennessee Valley Aillhority Tennessee valley Authority Tennessee Valley Authority Tennessee Valley Authority Te!'1~ssee valley Authority Tennessee Valley Authority Tennessee vaHey Authority U.S. Treasury U.S, TreasUl'y U.S. TreasUl'y U,S. Treasury 1212312009 0710712010 0712612010 01/'2.712010 07/2812010 0812512010 09/091:2010 10/2012010 10/2112010 1212912010 12t.2612010 07107/2006 10116!2006 j 1116/2006 02f15t2.007 0Si2012007 0412612010 1)51041:2010 SubtDtal and Average 0S/06/2008 0311912010 04I26!2010 06104/2010 Subtotal and Awrage Total Investments and Average 1,500,000.00 2,202,320.21 .. ,500,000.00 1,500,000.00 2,000,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 2,029,052.42 1,524.380,17 3.062,284,61 1,539,633.67 2,9{)6,529.25 2.210,n1,24 2.155,586,04 324,865,932.86 2,009,003,45 1,998,232.09 2,001,852.61 2,006.124.02 8,015,212.17 355~536.094.S9. 320,877,553.12 1,513,635.00 2,201.480.00 1,500.705.00 1,508,325.00 2,002.560.00 1,491.930.00 1,469,325,00 1,452,615.00 1,460,280.00 1,493,070,00 1,495,110.00 2,170,740.00 1,667.985.00 3,335,970.00 1,631,250.00 3,293,340.00 2,304.860.00 2.170,740.00 3,38,710,375.42 2,000,000.00 2,107,960.00 2,000,000.00 2,011,640.00 2,000,000,0'0 2,013,040.00 2,000,000.00 2,013,040.00 8,000,000,00 8,145,680.00 351,532,503.38 369,549,736.79 4,200 4,375 1.400 2.000 2,000 1,750 1.8:50 2.000 1.750 2.280 2.2$0 6,790 6.000 6.000 1,140 4.375 5}500 6.790 3.375 OJ375 1.000 1.000 'I'TM 360 4.142 2.100 1.380 Ul72 1}J72 1,726 1,624 1.972 1,728 2,248 2.219 5,476 5.054 4.825 4.692 5.163 3.$02 1.114 3.521 PageS YTM Maturity Days To 365 Date Maturity 4.200 1212312019 3.278 2,129 10/15/2015 1.400 07126/2013 2.000 01127/2015 2.000 1012S12015 1.750 0812512015 U350 0910912015 2.000 0412012016 1,750 10/2112015 2,280 12129/2015 2.250 12f28/2015 5,553 05/2:3/2012 5,125 0:3/1512013 4.892 0311512013 4.960 0512:312012 5,23$ 06/15r2015 3.652 07118/2017 1.130 OS/2312012 3.570 1,748 937 '2.487 1,761 1,697 1,712 1,938 1,754 1,823 1.822 51lS 804 804 508 1.628 2.390 51lS 1,355 3.078 3.12:0 1113012012 699 42. 364 364 0.9sa 0,902 0212912012 0,893 0:905 1213112011 0.660 0.690 12131/2011 1,399 1.419 3.277 3.322 462 1,249 Portfolio CPA lIP Fl{PRF]lj7.1.1 "ReportVer.7.3.1 ] 2 .. 3 r--l-... 4 i I- 5 Investment Policy Compliance As of December 31,2010 Investment Policy Requirements GenerAl Investment Guidelines: a) The max. stated final maturity of individual securities in the portfolio should be 10 yeats. b) A max, of 30 percent of the pa~ value oftbe portfolio shall be invested in securities with maturities beyond 5 years. eJ The City shall maintain a minimum of one month's cash needs in short term invesfments, 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 i: $50 mUlion ~ Fidelity Investments eJ Sh?uid 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 matutity. Attachment C Compliance Check Full Compliance 23,0% Full Compliance $90.3 million $20,2 million $23 million 103.9% d) Commitments to purehase securities newly introduced on the market shall be made no mOre than three (3) , working days before pricing. 1) Whenever possible, the Cit)' will obtnin three or more quotations on the purchase or sale of comparable securitics (excludes new issues, LAIF. City of Palo Alto bond~ money mruket accounts, and mutual funds). -.... _----. .. _----.... U.S. Government Securities: a) There is no limit on purchase of the..1ie securities. b) Securities wiJl not cxoocd 10 years ma(llfity. .... _---_ .... U.S, Government Agency Securities: oj Thfire is no limit on purchase of these securities except for: Callable and MUlti-step.up securities provided that: • The potential caU dates arc known at the time of purehase~ -the interest rates at which they "step-up" are known at the time of purchasc; and • the entire face value of the security is redeemed at the call date. • No more than 20 percent oflhe par v.lue of portfolio, b) Securities will not exeeed 10 years maturity. Bonds of the Stllte of California Munieipal Agencies a) Having at lime ofinves~ment a minimum Double A (AAIAA2) rating as provided hy a nationally recognized rating service (e.g., Moody's and/or Standard and Poor's). b) May not exceed 10 pcreent of the par value oflhe portfolio. Certificates of Deposit: M, not xc ed 20 frent of the ar v I ofU,e aj y e e pe p a ue p ortfolio' b) No more than 10 percent of the par value of the portfolio in collateralized CDs in finy institution. c) Purchase collateralized deposits only from federally insured large banks that are rated by a nl1tionally recognized rating agency (e.g, Moody's; Standard & Poor's, etc.), 0) For non·rated banks. deposit should be limited to amounts federally insured (FDIC) e) ,Rollovers arc not permitted without specific instruction from authorized staff. full Compliance Full Compliance FilII Compliance ' 1"'11 Compliance Full Compliance Full Compliance ! Full Compliance I 18,2% ..-~- None Held i .. ~ ... -- Full Compliance 0047% 6 Banker's Acceptance Notes: a) No more than 30 percent of the par value of tile portfolio, h) Not to excecd 180 days maturity. c) No more than $5 minion with anyone institution. ~~--.... ------.... ------... ---I-------... ----- 7 : r---: 8 - 9 i 10 11 .. _.,. 12 13 , i : 14 I Attachment C Investment Policy Complian~e As of December 31,2010 Investment POlicy Requirements Commercial Paper: a) No more than 15 percent oflhe par value of the portfofio. b) Having highest letter or numerieal rating from a nationally recognized rattug service, c) Not to exceed 270 days marurily. d) No more than $3 million or JO percent of the outstanding oommcrcial paper of anyone institution, whichever is lesser, -.-~~.. . ... -~-.-~--..... ~--...• Short~ Ter-m Repurchase Agreement (REPO): a) Not to exceed 1 year. b) Market value of see uri ties that underlay a repurchase agreement shall be valued at 102 percent or greater of tile funds borrowed against Ibose sceuritics. .-... ... _----.. --.---~~---------.. ----------.. ---~~.---. ---.---.. -----~-.. -----. .. _- Money Market De-posH Accounts a) Liquid bank aceounts whjeh seek to maintain a TIet asset value of $1,00, Mutunl Funds: a) No more than 20 percent of the par value of the portfolio. b) No more than W percent of the par value with anyone institution. NegoUable Certificat .. orDeposit (NCD), a) No more than 10 percent of the par value of the portf~1io, b} No more than $5 million in anyone institution. ... ~---.. ~---.. ~~~--~~~~ ... _-_ . Medium .. Term Corporate Notes: a) No more than 10 percent ofthe par value of the portfolio. b) Not to exeeed 5 years maturity, oj Securities eligible for investment shall have it minimum ruting of AA from a nationally recognized rating service. d) No more than $5 miUioll orthe par value may be invested in securities of any single issuer, other th8l1 the US. Oovernment~ its agencies and instrumentality. 0) If securities owned by thc City are downgraded by either rating agencies to a level below AA it shall be the Ciry's policy to review (he eredit situation Dnd make a determination as to whether to sell or retain sueh 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 heJd in the name of the City, with theexecption of: ~ Certifiea.tes of Depositj Mutual Fundsj and LAIP I Compliance Check None Held None Held ~-.. -... i Full CampHanee None Held i None Held ~--.. - None Held -------_ .. _ .. __ . Full Compliance None Held I i Full Compliance I ,