HomeMy WebLinkAboutStaff Report 2468City of Palo Alto (ID # 2468)
City Council Staff Report
Report Type: Informational Report Meeting Date: 1/30/2012
January 30, 2012 Page 1 of 3
(ID # 2468)
Summary Title: Investment Activity Report
Title: City of Palo Alto Investment Activity Report for the Second Quarter, Fiscal
Year 2012
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 $390.4 million; in comparison, last quarter it was $389.2
million. The growth in the portfolio of $1.2 million since the last quarter results from timing of
cash flows. For example, property tax receipts for the new fiscal year are not received until the
second quarter.
The portfolio consists of $23.1 million in liquid accounts and $367.3 million in U. S. government
treasury investments, agency securities, and certificates of deposit. The $367.3 million includes
$94.1 million in investments maturing in less than two years, comprising 25.6 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.
The current market value of the portfolio is 104.5 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 buying and selling securities. It is important to note,
January 30, 2012 Page 2 of 3
(ID # 2468)
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 3.54 years compared to 3.51 years last quarter.
Investments Made During the Second Quarter
During the second quarter, $26.5 million of government agency securities with an average yield
of 2.4% percent matured. During the same period, government securities totaling $36.5 million
with an average yield of 1.9% percent were purchased. As higher yielding maturing investments
continue to be re-invested at lower interest rates and interest rates continue to remain at
historically low levels, the portfolio’s yield is expected to further decline. The City’s short-term
money market and pool account decreased by $8.8 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 $216.5 million and expenditures will be $204.8 million over the next six
months, indicating an overall growth in the portfolio of $11.7 million.
As of December 31, 2011, the City had $23.1 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 $24.6 million will mature between January 1, 2012 and June 30, 2012. 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, 2011, the yield to maturity of the City’s portfolio was 2.91 percent. This compares to a yield
of 2.91 percent in the first quarter. The portfolio yield is expected to slightly decrease in future
quarters as staff continues to re-invest higher-yielding maturing securities at lower interest
rates. The City’s portfolio yield of 2.91 percent compares to LAIF’s average yield for the quarter
of 0.39 percent and an average yield on the two-year and five-year Treasury bonds during the
second quarter of approximately 0.25 percent and 0.94 percent, respectively.
Yield Trends
In the last 3+years, the Federal Open Market Committee (FOMC) maintained the historical low
federal funds and discount rate at 0.25 and 0.75 percent, respectively. The FOMC has made a
January 30, 2012 Page 3 of 3
(ID # 2468)
slight improvement in their economic outlook with the continued expectation of keeping
federal rates at “exceptionally low levels” through mid calendar year 2013. Foreseeing
substantial challenges ahead, the low interest rates are intended to spur: economic growth,
household spending, and the housing and labor markets. Based on current interest rates and
FOMC monetary policy, the City’s portfolio’s yield is expected to continue to slightly 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, 2011.
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 Management (PDF)
·Attachment B: Investment Portfolio (PDF)
·Attachment C: Investment Policy Compliance (PDF)
Prepared By:Tarun Narayan, Senior Financial Analyst
Department Head:Lalo Perez, Director
City Manager Approval: ____________________________________
James Keene, City Manager
Book Value Market Value
City Investment Portfolio (see Attachment B)395,858,176$ 413,820,756$
Other Funds Held by the City
Cash with Wells Fargo Bank 480,751 480,751
(includes general and imprest accounts)
Petty/Working Cash 11,878 11,878
Total - Other Funds Held By City 492,629 492,629
Funds Under Management of Third Party Trustees *
US Bank Trust Services **
2002 Civic Center (Tax Exempt) Certificates of Participation
Reserve Fund 350,522 350,522
2002 Downtown Parking Impvt. (Taxable) Certificates of Participation
Reserve Fund 238,306 238,306
2009 Water Revenue Bonds (Build America Bonds)
Project, Debt Service, Reserve, Cost of Issuance Funds 28,178,414 28,178,414
2010 General Obligation (Library) Bonds
Cost of Issuance Fund 37,877 37,877
2011 Utility Revenue Bonds
Debt Service, Reserve, and Cost of Issuance Funds 1,489,879 1,489,879
California Asset Management Program (CAMP) ***
2001 University Ave. Parking Bonds
Reserve Fund 637,517 637,517
2002 University Ave. Parking Bonds
Reserve and Admin. Funds 3,748,509 3,748,509
2010 General Obligation (Library) Bond
Project Fund 30,787,683 30,787,683
Total Under Trustee Management 65,468,707 65,468,707
GRAND TOTAL 461,819,512$ 479,782,092$
* 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.
Second Quarter, Fiscal Year 2011-12
(Unaudited)
(Debt Service Proceeds)
Attachment A
Consolidated Report of Cash Management
City of Palo Alto Cash and Investments
City of Palo Alto City of Palo AltoAdministration Svcs. Dept.250 Hamilton Ave., 4th FloorPalo Alto, CA 94301(650)329-2362
December 31, 2011
Fund ALL - Portfolio Listings
Investments by Fund
Par Value Days ToMaturityMaturityDateCurrentRateMarket ValueCUSIPInvestment #Issuer
PurchaseDate Book Value YTM
360
YTM
365
Managed Pool Accounts
Fidelity Investments158 3,196,260.63SYS158 10.01007/01/2010 3,196,260.63 0.009 0.0103,196,260.63
Local Agency Investment Fund159 19,891,138.16SYS159 10.37007/01/2010 19,923,998.26 0.364 0.37019,891,138.16
Subtotal and Average 23,087,398.79 23,087,398.79 23,120,258.89 0.316 0.320 1
Federal Agency Issues - Coupon
Federal Agricultural Mortgage820 2,000,000.0031315PLR8 08/11/2014 9533.25008/11/2009 2,121,020.00 3.205 3.2502,000,000.00
Federal Agricultural Mortgage821 2,000,000.0031315PMD8 08/10/2012 2222.10008/10/2009 2,023,680.00 2.071 2.1002,000,000.00
Federal Agricultural Mortgage838 2,000,000.0031315PES4 12/30/2014 1,0942.82012/30/2009 2,113,080.00 2.781 2.8202,000,000.00
Federal Agricultural Mortgage839 1,500,000.0031315PEY1 12/30/2019 2,9204.50012/30/2009 1,720,785.00 4.438 4.5001,500,000.00
Federal Agricultural Mortgage840 2,000,000.0031315PGE3 01/19/2017 1,8454.12501/19/2010 2,225,840.00 4.068 4.1252,000,000.00
Federal Agricultural Mortgage866 1,000,000.0031315PAT6 05/17/2017 1,9633.75005/17/2010 1,085,050.00 3.698 3.7501,000,000.00
Federal Agricultural Mortgage923 1,500,000.0031315PNM7 12/28/2017 2,1883.15012/28/2010 1,623,390.00 3.106 3.1501,500,000.00
Federal Agricultural Mortgage935 1,500,000.0031315PQN2 02/03/2014 7641.34002/03/2011 1,527,360.00 1.321 1.3401,500,000.00
Federal Agricultural Mortgage936 1,500,000.0031315PRG6 01/31/2016 1,4912.44002/03/2011 1,589,520.00 2.406 2.4401,500,000.00
Federal Agricultural Mortgage942 1,500,000.0031315PTU3 03/09/2021 3,3554.16003/09/2011 1,667,610.00 4.103 4.1601,500,000.00
Federal Agricultural Mortgage943 Callable 2,000,000.0031315PTG4 03/09/2021 3,3554.41003/09/2011 2,012,260.00 4.349 4.4102,000,000.00
Federal Agricultural Mortgage951 1,500,000.0031315PUN7 04/29/2016 1,5802.41004/29/2011 1,583,190.00 2.376 2.4101,500,000.00
Federal Agricultural Mortgage975 1,000,000.0031315PA25 07/27/2016 1,6692.00007/27/2011 1,027,300.00 2.063 2.092996,022.17
Federal Farm Credit Bank1002 2,000,000.0031331KF96 10/14/2014 1,0170.70010/14/2011 2,003,100.00 0.690 0.7002,000,000.00
Federal Farm Credit Bank1006 2,000,000.0031331KK90 10/26/2016 1,7601.35010/26/2011 2,018,600.00 1.331 1.3502,000,000.00
Federal Farm Credit Bank653 2,000,000.0031331VY91 08/16/2013 5935.28009/26/2006 2,158,380.00 4.827 4.8942,010,625.90
Federal Farm Credit Bank655 4,000,000.0031331V4E3 09/15/2014 9885.18010/12/2006 4,486,880.00 5.059 5.1304,004,356.29
Federal Farm Credit Bank657 2,039,000.0031331VWS1 04/17/2014 8375.20010/16/2006 2,255,868.04 5.100 5.1712,040,109.92
Federal Farm Credit Bank658 1,500,000.0031331S3H4 02/18/2014 7794.75010/16/2006 1,635,525.00 5.104 5.1751,488,788.81
Federal Farm Credit Bank659 3,000,000.0031331XBS0 11/25/2013 6945.05010/25/2006 3,259,710.00 4.979 5.0483,000,000.00
Federal Farm Credit Bank660 2,000,000.0031331XCY6 05/06/2015 1,2215.05011/06/2006 2,281,580.00 4.980 5.0502,000,000.00
Federal Farm Credit Bank662 2,000,000.0031331VTY2 03/20/2013 4445.20011/16/2006 2,118,500.00 4.877 4.9452,005,254.93
Federal Farm Credit Bank666 2,000,000.0031331XGX4 06/11/2012 1624.62512/11/2006 2,038,960.00 4.561 4.6252,000,000.00
Federal Farm Credit Bank677 2,000,000.0031331XPB2 02/07/2013 4035.15002/07/2007 2,106,180.00 5.079 5.1502,000,000.00
Federal Farm Credit Bank690 2,000,000.0031331XSR4 03/14/2014 8034.87503/27/2007 2,191,360.00 4.807 4.8742,000,000.00
Federal Farm Credit Bank692 2,000,000.0031331XVH2 04/12/2012 1024.87504/12/2007 2,026,140.00 4.808 4.8752,000,000.00
Portfolio CPA
AP
Run Date: 01/17/2012 - 23:07 FI (PRF_FI) 7.1.1
Report Ver. 7.3.1
December 31, 2011
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 2
CUSIP Investment #Issuer
PurchaseDate Book Value YTM360 YTM365
Federal Agency Issues - Coupon
Federal Farm Credit Bank702 3,500,000.0031331XB27 08/05/2013 5825.20006/05/2007 3,767,785.00 5.130 5.2013,500,000.00
Federal Farm Credit Bank703 2,000,000.0031331XC26 06/05/2014 8865.25006/05/2007 2,225,380.00 5.178 5.2502,000,000.00
Federal Farm Credit Bank705 2,000,000.0031331XD74 12/18/2013 7175.33006/12/2007 2,191,100.00 5.257 5.3302,000,000.00
Federal Farm Credit Bank707 3,000,000.0031331XC26 06/05/2014 8865.25006/08/2007 3,338,070.00 5.409 5.4842,985,936.83
Federal Farm Credit Bank715 3,000,000.0031331XU75 08/13/2014 9555.30008/20/2007 3,345,930.00 5.128 5.1993,006,499.91
Federal Farm Credit Bank717 2,000,000.0031331X2J0 09/04/2012 2474.93009/04/2007 2,059,100.00 4.862 4.9302,000,000.00
Federal Farm Credit Bank720 1,500,000.0031331X3H3 09/17/2014 9905.00009/17/2007 1,669,230.00 4.931 5.0001,500,000.00
Federal Farm Credit Bank721 1,500,000.0031331X5Y4 10/03/2014 1,0065.00010/03/2007 1,678,110.00 4.931 5.0001,500,000.00
Federal Farm Credit Bank722 2,000,000.0031331YCJ7 10/30/2017 2,1294.90010/30/2007 2,388,120.00 4.832 4.9002,000,000.00
Federal Farm Credit Bank725 2,000,000.0031331YHQ6 12/15/2017 2,1754.62512/12/2007 2,360,760.00 4.561 4.6242,000,000.00
Federal Farm Credit Bank742 2,000,000.0031331VCQ7 10/19/2015 1,3874.80001/30/2008 2,282,520.00 3.945 4.0002,051,805.80
Federal Farm Credit Bank744 1,000,000.0031331SKH5 01/22/2015 1,1174.50001/30/2008 1,114,400.00 3.820 3.8731,016,655.25
Federal Farm Credit Bank747 1,500,000.0031331YSV3 02/11/2015 1,1373.85002/11/2008 1,644,000.00 3.797 3.8501,500,000.00
Federal Farm Credit Bank779 Callable 2,000,000.0031331GLM9 01/25/2019 2,5814.00001/27/2009 2,004,140.00 3.944 3.9992,000,000.00
Federal Farm Credit Bank785 1,500,000.0031331GPN3 03/04/2013 4282.60003/04/2009 1,540,275.00 2.564 2.6001,500,000.00
Federal Farm Credit Bank788 1,000,000.0031331GLT4 01/29/2016 1,4893.75003/04/2009 1,111,880.00 3.698 3.7491,000,000.00
Federal Farm Credit Bank823 2,000,000.0031331GL80 09/22/2014 9953.00008/21/2009 2,127,560.00 2.959 3.0002,000,000.00
Federal Farm Credit Bank825 2,000,000.0031331GU31 09/24/2012 2671.80009/24/2009 2,022,460.00 1.775 1.8002,000,000.00
Federal Farm Credit Bank826 2,000,000.0031331GZ44 10/15/2012 2881.55010/15/2009 2,020,340.00 1.528 1.5502,000,000.00
Federal Farm Credit Bank850 2,000,000.0031331JFZ1 03/08/2017 1,8933.37503/08/2010 2,212,640.00 3.328 3.3752,000,000.00
Federal Farm Credit Bank858 Callable 1,500,000.0031331JKW2 04/19/2017 1,9353.74004/19/2010 1,513,830.00 3.688 3.7401,500,000.00
Federal Farm Credit Bank870 1,000,000.0031331JQB2 06/02/2017 1,9793.00006/02/2010 1,085,300.00 2.958 3.0001,000,000.00
Federal Farm Credit Bank872 2,000,000.0031331YEL0 11/15/2016 1,7805.00006/04/2010 2,337,960.00 3.027 3.0702,169,424.97
Federal Farm Credit Bank903 1,000,000.0031331JN90 09/29/2020 3,1942.87509/29/2010 1,048,900.00 2.835 2.8751,000,000.00
Federal Farm Credit Bank910 2,000,000.0031331JX32 10/28/2016 1,7621.70010/28/2010 2,051,200.00 1.676 1.7002,000,000.00
Federal Farm Credit Bank918 2,000,000.0031331J5F6 12/16/2020 3,2723.62512/16/2010 2,207,120.00 3.575 3.6252,000,000.00
Federal Farm Credit Bank925 1,500,000.0031331JX32 10/28/2016 1,7621.70001/04/2011 1,538,400.00 2.576 2.6111,439,119.61
Federal Farm Credit Bank932 3,000,000.0031331J2M4 11/22/2016 1,7871.87501/14/2011 3,099,930.00 2.483 2.5182,912,735.27
Federal Farm Credit Bank937 2,000,000.0031331KBX7 02/10/2017 1,8672.87502/10/2011 2,162,180.00 2.835 2.8752,000,000.00
Federal Farm Credit Bank944 Callable 1,500,000.0031331KGG9 03/30/2017 1,9153.00003/30/2011 1,507,755.00 2.958 3.0001,500,000.00
Federal Farm Credit Bank949 Callable 1,500,000.0031331KJK7 04/27/2018 2,3083.40004/27/2011 1,512,165.00 3.353 3.4001,500,000.00
Federal Farm Credit Bank952 Callable 2,000,000.0031331KKP4 05/11/2018 2,3223.25005/11/2011 2,016,280.00 3.205 3.2502,000,000.00
Portfolio CPA
AP
Run Date: 01/17/2012 - 23:07 FI (PRF_FI) 7.1.1
Report Ver. 7.3.1
December 31, 2011
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 3
CUSIP Investment #Issuer
PurchaseDate Book Value YTM360 YTM365
Federal Agency Issues - Coupon
Federal Farm Credit Bank959 1,500,000.0031331KQD5 06/27/2017 2,0042.30006/27/2011 1,561,500.00 2.268 2.3001,500,000.00
Federal Farm Credit Bank976 Callable 1,500,000.0031331KVG2 11/18/2015 1,4171.37008/18/2011 1,500,045.00 1.347 1.3661,500,000.00
Federal Farm Credit Bank979 Callable 2,000,000.0031331KWG1 08/25/2017 2,0631.99008/25/2011 2,000,060.00 1.962 1.9902,000,000.00
Federal Farm Credit Bank981 Callable 2,000,000.0031331KXJ4 03/01/2017 1,8861.83009/01/2011 2,000,060.00 1.804 1.8302,000,000.00
Federal Home Loan Bank1004 Call 2,000,000.003133763J2 11/10/2016 1,7751.75011/10/2011 2,002,740.00 1.726 1.7502,000,000.00
Federal Home Loan Bank1010 Call 2,000,000.00313376P74 12/30/2021 3,6513.00012/30/2011 2,003,020.00 2.958 3.0002,000,000.00
Federal Home Loan Bank1011 Call 1,500,000.00313376PM1 12/28/2018 2,5532.20012/28/2011 1,501,890.00 2.169 2.2001,500,000.00
Federal Home Loan Bank1012 2,000,000.00313376BR5 12/14/2018 2,5391.75012/16/2011 2,005,500.00 1.725 1.7492,000,000.00
Federal Home Loan Bank649 2,000,000.003133X9ZZ6 01/06/2012 54.50009/12/2006 2,000,720.00 5.040 5.1101,999,852.90
Federal Home Loan Bank652 2,000,000.0031339Y7K2 07/16/2013 5625.00009/26/2006 2,138,880.00 4.850 4.9182,002,094.13
Federal Home Loan Bank654 2,000,000.003133XHBL5 06/13/2014 8944.87510/12/2006 2,209,280.00 5.020 5.0891,991,243.89
Federal Home Loan Bank663 2,000,000.003133XHXW7 11/27/2013 6964.87511/27/2006 2,168,280.00 4.808 4.8752,000,000.00
Federal Home Loan Bank667 2,000,000.003133XHW57 12/13/2013 7124.87512/14/2006 2,170,240.00 4.806 4.8732,000,000.00
Federal Home Loan Bank685 2,000,000.003133XJUT3 03/09/2012 685.00002/23/2007 2,017,880.00 4.929 4.9972,000,000.00
Federal Home Loan Bank699 2,000,000.003133XGJ96 09/13/2013 6215.25005/16/2007 2,162,660.00 4.943 5.0112,006,826.88
Federal Home Loan Bank706 1,000,000.003133XGJ96 09/13/2013 6215.25006/08/2007 1,081,330.00 5.369 5.444997,212.75
Federal Home Loan Bank710 2,500,000.003133XLDG5 06/13/2014 8945.37506/28/2007 2,790,625.00 5.300 5.3742,500,000.00
Federal Home Loan Bank713 3,000,000.003133XLDG5 06/13/2014 8945.37508/20/2007 3,348,750.00 5.099 5.1703,012,469.53
Federal Home Loan Bank730 2,000,000.003133XPBA1 03/13/2015 1,1673.50001/25/2008 2,176,180.00 3.451 3.4992,000,000.00
Federal Home Loan Bank741 3,000,000.003133XPBA1 03/13/2015 1,1673.50001/30/2008 3,264,270.00 3.869 3.9232,964,779.27
Federal Home Loan Bank751 Callable 1,500,000.003133XPTJ3 02/28/2018 2,2504.50002/28/2008 1,509,150.00 4.421 4.4821,500,000.00
Federal Home Loan Bank777 3,000,000.003133XSP93 12/13/2013 7123.12501/16/2009 3,143,700.00 2.794 2.8333,030,847.85
Federal Home Loan Bank789 2,000,000.003133XTCS3 03/13/2014 8023.00003/16/2009 2,109,060.00 2.958 2.9992,000,000.00
Federal Home Loan Bank793 3,000,000.003133XTFQ4 04/01/2014 8212.90004/01/2009 3,159,750.00 2.860 2.9003,000,000.00
Federal Home Loan Bank817 1,500,000.003133XTQH2 05/22/2012 1421.80005/22/2009 1,509,720.00 1.775 1.8001,500,000.00
Federal Home Loan Bank818 2,000,000.003133XTYD2 06/16/2015 1,2624.00006/16/2009 2,219,040.00 3.945 4.0002,000,000.00
Federal Home Loan Bank819 2,000,000.003133XUCX9 07/23/2012 2041.87507/20/2009 2,018,380.00 2.210 2.2402,000,000.00
Federal Home Loan Bank822 3,000,000.003133XUMS9 09/13/2019 2,8124.50008/12/2009 3,541,440.00 4.437 4.4993,000,000.00
Federal Home Loan Bank827 1,000,000.003133XUMR1 09/12/2014 9853.25010/21/2009 1,070,580.00 2.594 2.6311,015,545.19
Federal Home Loan Bank830 3,000,000.003133XDTL5 12/21/2015 1,4505.00010/21/2009 3,467,550.00 3.101 3.1453,199,437.76
Federal Home Loan Bank832 3,000,000.003133XVRJ2 12/09/2016 1,8043.50011/19/2009 3,315,210.00 3.325 3.3723,016,693.38
Federal Home Loan Bank833 1,200,000.003133MJQF0 08/15/2016 1,6885.50011/19/2009 1,432,512.00 3.304 3.3501,305,914.35
Portfolio CPA
AP
Run Date: 01/17/2012 - 23:07 FI (PRF_FI) 7.1.1
Report Ver. 7.3.1
December 31, 2011
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 4
CUSIP Investment #Issuer
PurchaseDate Book Value YTM360 YTM365
Federal Agency Issues - Coupon
Federal Home Loan Bank837 2,000,000.003133XW4W6 12/11/2012 3451.50012/11/2009 2,020,900.00 1.479 1.5002,000,000.00
Federal Home Loan Bank845 2,000,000.003133XWX53 04/03/2012 931.10002/03/2010 2,004,900.00 1.085 1.1002,000,000.00
Federal Home Loan Bank847 2,000,000.003133XWX95 03/13/2015 1,1672.75002/19/2010 2,128,880.00 2.711 2.7492,000,000.00
Federal Home Loan Bank854 2,115,000.003133XWW47 03/09/2012 681.12503/19/2010 2,118,891.60 1.051 1.0652,115,232.95
Federal Home Loan Bank857 Callable 1,500,000.003133XXXK8 04/16/2020 3,0284.37504/16/2010 1,514,760.00 4.315 4.3751,500,000.00
Federal Home Loan Bank859 1,500,000.003133XEUG2 03/11/2016 1,5314.87504/26/2010 1,740,180.00 3.227 3.2721,591,039.08
Federal Home Loan Bank860 1,500,000.003133XHVS8 12/09/2016 1,8045.00004/26/2010 1,771,875.00 3.430 3.4781,599,897.78
Federal Home Loan Bank875 2,000,000.003133XYVX0 10/29/2012 3021.12506/29/2010 2,014,360.00 1.109 1.1252,000,000.00
Federal Home Loan Bank878 3,000,000.003133XVNU1 12/12/2014 1,0762.75006/23/2010 3,181,260.00 2.052 2.0813,056,196.71
Federal Home Loan Bank879 1,500,000.003133XUMR1 09/12/2014 9853.25006/23/2010 1,605,870.00 1.975 2.0031,548,124.91
Federal Home Loan Bank883 1,500,000.003133XWNB1 06/12/2015 1,2582.87506/29/2010 1,606,725.00 2.099 2.1281,536,426.10
Federal Home Loan Bank885 2,000,000.003133XBDM4 02/13/2015 1,1394.75006/29/2010 2,249,840.00 2.022 2.0512,159,696.20
Federal Home Loan Bank886 1,500,000.003133705P9 04/16/2012 1060.70007/16/2010 1,502,490.00 0.690 0.7001,500,000.00
Federal Home Loan Bank887 1,500,000.003133705T1 04/08/2013 4631.08007/08/2010 1,514,385.00 1.065 1.0801,500,000.00
Federal Home Loan Bank900 2,000,000.00313370TB4 07/29/2013 5750.85008/30/2010 2,014,900.00 0.838 0.8502,000,000.00
Federal Home Loan Bank901 1,000,000.003133717D2 02/27/2014 7881.00009/27/2010 1,010,910.00 0.986 1.0001,000,000.00
Federal Home Loan Bank907 2,000,000.00313371FB7 08/28/2015 1,3351.35010/22/2010 2,037,360.00 1.331 1.3502,000,000.00
Federal Home Loan Bank911 1,500,000.00313371PV2 12/09/2016 1,8041.62511/09/2010 1,532,295.00 1.602 1.6241,500,000.00
Federal Home Loan Bank912 1,500,000.00313371PU4 12/13/2013 7120.50011/09/2010 1,498,785.00 0.589 0.5971,500,000.00
Federal Home Loan Bank913 2,000,000.00313371VF0 12/11/2015 1,4401.62511/19/2010 2,056,180.00 1.602 1.6242,000,000.00
Federal Home Loan Bank914 2,000,000.00313371WB8 07/24/2014 9351.15011/24/2010 2,028,880.00 1.134 1.1502,000,000.00
Federal Home Loan Bank920 1,500,000.00313371PV2 12/09/2016 1,8041.62512/15/2010 1,532,295.00 2.550 2.5851,434,414.58
Federal Home Loan Bank921 1,500,000.00313371NW2 12/11/2015 1,4401.37512/15/2010 1,526,490.00 2.191 2.2211,452,798.44
Federal Home Loan Bank924 1,500,000.003133MJQF0 08/15/2016 1,6885.50001/04/2011 1,790,640.00 2.516 2.5501,689,342.78
Federal Home Loan Bank926 1,500,000.00313371PV2 12/09/2016 1,8041.62501/04/2011 1,532,295.00 2.592 2.6291,431,516.44
Federal Home Loan Bank931 3,000,000.003133XFPR1 06/10/2016 1,6225.37501/14/2011 3,545,910.00 2.363 2.3963,370,177.54
Federal Home Loan Bank933 Callable 1,500,000.00313372H49 02/16/2016 1,5072.50002/16/2011 1,504,290.00 2.465 2.5001,500,000.00
Federal Home Loan Bank938 1,500,000.00313372Q56 02/26/2016 1,5172.65002/18/2011 1,603,170.00 2.613 2.6491,500,000.00
Federal Home Loan Bank940 2,000,000.003133X0PF0 08/15/2018 2,4185.37502/17/2011 2,464,940.00 3.423 3.4702,220,374.20
Federal Home Loan Bank941 Callable 1,500,000.00313372TS3 03/14/2018 2,2643.50003/14/2011 1,508,400.00 3.452 3.5001,500,000.00
Federal Home Loan Bank945 Callable 1,500,000.00313373CQ3 04/05/2018 2,2863.45004/05/2011 1,510,545.00 3.402 3.4501,500,000.00
Federal Home Loan Bank947 1,500,000.00313373GQ9 10/29/2014 1,0321.75004/29/2011 1,547,220.00 1.726 1.7501,500,000.00
Portfolio CPA
AP
Run Date: 01/17/2012 - 23:07 FI (PRF_FI) 7.1.1
Report Ver. 7.3.1
December 31, 2011
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 5
CUSIP Investment #Issuer
PurchaseDate Book Value YTM360 YTM365
Federal Agency Issues - Coupon
Federal Home Loan Bank948 Callable 2,000,000.00313373GV8 04/27/2018 2,3083.60004/27/2011 2,017,840.00 3.550 3.6002,000,000.00
Federal Home Loan Bank950 Callable 1,000,000.00313373NM0 05/09/2019 2,6853.65005/09/2011 1,009,330.00 3.600 3.6501,000,000.00
Federal Home Loan Bank953 Callable 1,000,000.00313373RZ7 05/18/2021 3,4253.95005/18/2011 1,010,230.00 3.895 3.9501,000,000.00
Federal Home Loan Bank966 Callable 1,500,000.00313374RS1 07/27/2016 1,6692.15007/27/2011 1,501,755.00 2.120 2.1501,500,000.00
Federal Home Loan Bank967 Callable 1,500,000.00313374PV6 07/19/2021 3,4873.87507/19/2011 1,513,560.00 3.821 3.8751,500,000.00
Federal Home Loan Bank978 Callable 2,000,000.00313375FS1 06/15/2015 1,2611.00009/15/2011 2,000,040.00 0.986 1.0002,000,000.00
Federal Home Loan Bank980 Callable 2,000,000.00313375J24 03/21/2016 1,5411.48009/21/2011 2,000,060.00 1.459 1.4802,000,000.00
Federal Home Loan Bank982 2,000,000.00313375KP1 03/15/2017 1,9001.50009/15/2011 2,026,540.00 1.479 1.5002,000,000.00
Federal Home Loan Bank985 2,000,000.00313375M87 10/14/2016 1,7481.27009/14/2011 2,012,840.00 1.252 1.2702,000,000.00
Federal Home Loan Bank986 Callable 2,000,000.00313375MB0 03/29/2017 1,9141.80009/29/2011 2,000,060.00 1.775 1.8002,000,000.00
Federal Home Loan Bank987 Callable 2,000,000.00313375PL5 10/04/2021 3,5643.00010/04/2011 2,000,120.00 2.958 3.0002,000,000.00
Federal Home Loan Bank989 Callable 2,000,000.00313375R66 10/06/2016 1,7401.50010/06/2011 2,000,220.00 1.479 1.5002,000,000.00
Federal Home Loan Bank990 2,000,000.00313370TW8 09/09/2016 1,7132.00009/13/2011 2,081,500.00 1.163 1.1802,074,456.21
Federal Home Loan Bank992 2,000,000.00313371ZX7 12/08/2017 2,1682.62509/13/2011 2,120,540.00 1.526 1.5472,121,423.48
Federal Home Loan Bank994 Callable 2,000,000.00313375R74 09/27/2021 3,5572.94009/27/2011 2,007,520.00 2.899 2.9402,000,000.00
Federal Home Loan Bank996 Callable 2,000,000.00313375RH2 01/12/2021 3,2992.95010/12/2011 2,001,100.00 2.909 2.9502,000,000.00
Federal Home Loan Bank - S & P781 2,000,000.003133XSZ50 02/06/2012 362.10002/06/2009 2,003,620.00 2.071 2.1002,000,000.00
Federal Home Loan Bank - S & P792 2,000,000.003133XTFD3 03/27/2014 8162.85003/27/2009 2,103,900.00 2.810 2.8502,000,000.00
Federal Home Loan Bank - S & P794 2,000,000.003133XTHE9 07/13/2012 1942.00004/13/2009 2,018,960.00 1.972 2.0002,000,000.00
Fed. Home Loan Mortgage Corp.1000 Call 3,000,000.003134G2V33 10/26/2016 1,7601.60010/26/2011 3,002,250.00 1.578 1.6003,000,000.00
Fed. Home Loan Mortgage Corp.1001 Call 2,000,000.003134G2X56 10/18/2016 1,7521.59010/18/2011 2,000,960.00 1.568 1.5902,000,000.00
Fed. Home Loan Mortgage Corp.1003 Call 2,000,000.003134G22U5 11/09/2016 1,7741.80011/09/2011 2,007,720.00 1.775 1.8002,000,000.00
Fed. Home Loan Mortgage Corp.1007 Call 2,000,000.003134G23Y6 11/15/2016 1,7801.57011/15/2011 2,013,540.00 1.548 1.5702,000,000.00
Fed. Home Loan Mortgage Corp.679 1,500,000.003128X1KG1 06/12/2013 5284.00002/07/2007 1,578,525.00 5.010 5.0801,480,152.98
Fed. Home Loan Mortgage Corp.682 2,000,000.003128X1KG1 06/12/2013 5284.00002/15/2007 2,104,700.00 4.970 5.0401,974,469.40
Fed. Home Loan Mortgage Corp.714 2,000,000.003134A4UM4 01/15/2014 7454.50008/20/2007 2,159,940.00 5.033 5.1031,979,218.72
Fed. Home Loan Mortgage Corp.734 Callable 1,500,000.003128X6N85 01/31/2015 1,1264.30001/31/2008 1,665,165.00 4.241 4.3001,500,000.00
Fed. Home Loan Mortgage Corp.828 2,000,000.003128X33E1 01/26/2015 1,1215.05010/21/2009 2,265,060.00 2.713 2.7512,130,507.54
Fed. Home Loan Mortgage Corp.884 4,000,000.003128X2RA5 12/01/2015 1,4305.30006/29/2010 4,655,960.00 2.327 2.3604,429,915.35
Fed. Home Loan Mortgage Corp.890 4,000,000.003134A4VG6 11/17/2015 1,4164.75007/07/2010 4,580,760.00 2.135 2.1654,376,558.34
Fed. Home Loan Mortgage Corp.927 1,500,000.003134A4ZT4 01/19/2016 1,4794.75001/04/2011 1,727,895.00 2.215 2.2451,643,052.69
Fed. Home Loan Mortgage Corp.964 Callable 2,000,000.003134G2RC8 10/26/2018 2,4903.00007/26/2011 2,002,860.00 2.959 3.0002,000,000.00
Portfolio CPA
AP
Run Date: 01/17/2012 - 23:07 FI (PRF_FI) 7.1.1
Report Ver. 7.3.1
December 31, 2011
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 6
CUSIP Investment #Issuer
PurchaseDate Book Value YTM360 YTM365
Federal Agency Issues - Coupon
Fed. Home Loan Mortgage Corp.965 Callable 1,500,000.003134G2QZ8 07/26/2021 3,4944.00007/26/2011 1,503,090.00 3.945 4.0001,500,000.00
Fed. Home Loan Mortgage Corp.970 Callable 1,500,000.003134G2TE2 07/28/2017 2,0352.35007/28/2011 1,521,630.00 2.317 2.3501,500,000.00
Fed. Home Loan Mortgage Corp.971 Callable 1,500,000.003134G2TH5 07/27/2016 1,6692.05007/27/2011 1,513,650.00 2.021 2.0501,500,000.00
Fed. Home Loan Mortgage Corp.984 Callable 2,000,000.003134G2F80 06/16/2015 1,2621.00009/16/2011 1,995,940.00 0.986 1.0002,000,000.00
Fed. Home Loan Mortgage Corp.993 2,000,000.003137EAAY5 08/23/2017 2,0615.50009/13/2011 2,444,600.00 1.415 1.4352,438,342.28
Fed. Home Loan Mortgage Corp.997 Callable 2,000,000.003134G2P63 10/13/2021 3,5733.00010/13/2011 2,001,300.00 2.958 3.0002,000,000.00
Fed. Home Loan Mortgage Corp.999 Callable 2,000,000.003134G2S94 10/18/2016 1,7521.45010/18/2011 2,000,280.00 1.430 1.4502,000,000.00
Federal National Mortgage Asso1005 Call 2,000,000.003136FTHU6 11/16/2016 1,7811.80011/16/2011 2,005,600.00 1.775 1.8002,000,000.00
Federal National Mortgage Asso1008 Call 2,000,000.003136FTKU2 11/23/2016 1,7881.75011/23/2011 2,006,820.00 1.726 1.7502,000,000.00
Federal National Mortgage Asso1009 Call 2,000,000.003136FTME6 11/16/2016 1,7811.55011/16/2011 1,997,260.00 1.528 1.5502,000,000.00
Federal National Mortgage Asso678 2,000,000.0031364FBV2 09/25/2012 2686.47002/07/2007 2,087,540.00 4.967 5.0362,018,094.67
Federal National Mortgage Asso683 1,500,000.0031364KSSO 08/17/2012 2292.00002/15/2007 1,515,210.00 4.956 5.0251,475,382.45
Federal National Mortgage Asso743 3,000,000.00313586UB3 12/10/2015 1,43910.35001/30/2008 4,070,490.00 3.987 4.0433,633,285.16
Federal National Mortgage Asso761 Callable 1,000,000.0031398APN6 04/08/2013 4634.00004/08/2008 1,046,840.00 3.945 4.0001,000,000.00
Federal National Mortgage Asso763 Callable 1,000,000.003136F9ES8 04/02/2013 4574.00004/02/2008 1,046,260.00 3.945 4.0001,000,000.00
Federal National Mortgage Asso776 3,000,000.0031398ANT5 02/25/2013 4214.25001/16/2009 3,136,620.00 2.298 2.3303,062,802.82
Federal National Mortgage Asso829 2,000,000.0031359MXX6 03/02/2015 1,1565.00010/21/2009 2,268,780.00 2.736 2.7742,130,231.18
Federal National Mortgage Asso891 2,000,000.0031359MZC0 10/15/2015 1,3834.37507/07/2010 2,259,980.00 2.100 2.1292,160,072.37
Federal National Mortgage Asso928 1,500,000.0031359MS61 07/15/2016 1,6575.37501/04/2011 1,785,750.00 2.422 2.4551,684,766.75
Federal National Mortgage Asso946 Callable 1,000,000.003136FRFU2 04/20/2015 1,2052.05004/20/2011 1,003,150.00 2.021 2.0501,000,000.00
Federal National Mortgage Asso961 Callable 1,000,000.003136FRWM1 07/13/2016 1,6552.00007/13/2011 1,008,180.00 1.972 2.0001,000,000.00
Federal National Mortgage Asso973 Callable 2,000,000.003136FRD59 07/25/2014 9361.12507/25/2011 2,000,640.00 1.109 1.1252,000,000.00
Federal National Mortgage Asso988 2,000,000.003135G0AL7 03/15/2016 1,5352.25009/13/2011 2,096,420.00 1.029 1.0442,098,830.04
Federal National Mortgage Asso991 2,000,000.0031359M4D2 02/13/2017 1,8705.00009/13/2011 2,361,900.00 1.272 1.2902,365,528.37
Federal National Mortgage Asso995 Callable 2,000,000.003136FR4R1 03/21/2019 2,6362.00009/21/2011 2,010,120.00 1.972 2.0002,000,000.00
Federal National Mortgage Asso998 Callable 2,000,000.003136FR3N1 09/20/2016 1,7241.35009/21/2011 2,003,420.00 1.331 1.3492,000,000.00
Tennessee Valley Authority643 2,000,000.00880591DT6 05/23/2012 1436.79007/07/2006 2,051,600.00 5.476 5.5532,008,218.02
Tennessee Valley Authority656 1,500,000.00880591CW0 03/15/2013 4396.00010/16/2006 1,602,960.00 5.054 5.1251,513,326.19
Tennessee Valley Authority661 3,000,000.00880591CW0 03/15/2013 4396.00011/16/2006 3,205,920.00 4.825 4.8923,034,044.73
Tennessee Valley Authority684 1,500,000.00880591DL3 05/23/2012 1437.14002/15/2007 1,539,015.00 4.892 4.9601,511,211.12
Tennessee Valley Authority716 3,000,000.00880591DY5 06/15/2015 1,2614.37508/20/2007 3,366,990.00 5.163 5.2352,927,507.72
Tennessee Valley Authority861 2,000,000.00880591EA6 07/18/2017 2,0255.50004/26/2010 2,434,600.00 3.602 3.6522,178,578.77
Portfolio CPA
AP
Run Date: 01/17/2012 - 23:07 FI (PRF_FI) 7.1.1
Report Ver. 7.3.1
December 31, 2011
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 7
CUSIP Investment #Issuer
PurchaseDate Book Value YTM360 YTM365
Federal Agency Issues - Coupon
Tennessee Valley Authority863 2,000,000.00880591DT6 05/23/2012 1436.79005/04/2010 2,051,600.00 1.114 1.1302,044,010.39
Tennessee Valley Authority954 2,000,000.00880591CU4 12/15/2017 2,1756.25005/23/2011 2,544,060.00 2.624 2.6612,389,841.29
Subtotal and Average 366,759,320.28 361,354,000.00 384,589,796.64 3.047 3.089 1,388
Treasury Securities - Coupon
U.S. Treasury769 2,000,000.00912828HK9 11/30/2012 3343.37508/06/2008 2,058,360.00 3.078 3.1202,004,302.08
U.S. Treasury855 2,000,000.00912828MQ0 02/29/2012 590.87503/19/2010 2,002,660.00 0.938 0.9521,999,753.99
U.S. Treasury939 2,000,000.00912828JW1 12/31/2013 7301.50002/17/2011 2,049,680.00 1.292 1.3102,007,401.00
Subtotal and Average 6,011,457.07 6,000,000.00 6,110,700.00 1.770 1.795 374
Total Investments and Average 395,858,176.14 390,441,398.79 413,820,755.53 2.868 2.908 1,291
Portfolio CPA
AP
Run Date: 01/17/2012 - 23:07 FI (PRF_FI) 7.1.1
Report Ver. 7.3.1
1 General Investment Guidelines:
a) The max. stated final maturity of individual securities in the portfolio should be 10 years.Full Compliance
b) A max. of 30 percent of the par value of the portfolio shall be invested in securities with maturities
beyond 5 years.20.9%
c) The City shall maintain a minimum of one month's cash needs in short term investments.Full Compliance
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$50 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.104.5%
d) Commitments to purchase securities newly introduced on the market shall be made no more than three (3)
working days before pricing.Full Compliance
f) 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).Full Compliance
2 U.S. Government Securities:Full Compliance
a) There is no limit on purchase of these securities.
b) Securities will not exceed 10 years maturity.
3 U.S. Government Agency Securities:Full Compliance
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;Full Compliance
- the interest rates at which they "step-up" are known at the time of purchase; and Full Compliance
- the entire face value of the security is redeemed at the call date.Full Compliance
- No more than 20 percent of the par value of portfolio.22.8%
b) Securities will not exceed 10 years maturity.
4 Bonds of the State of California Municipal Agencies None Held
a)Having at time of investment a minimum Double A (AA/AA2) rating as provided by a nationally
recognized rating service (e.g., Moody’s and/or Standard and Poor’s).
b)May not exceed 10 percent of the par value of the portfolio.
5 Certificates of Deposit:Full Compliance
a) May not exceed 20 percent of the par value of the portfolio;None Held
b) No more than 10 percent of the par value of the portfolio in collateralized CDs in any institution.
c) 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.
6 Banker's Acceptance Notes:None Held
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.
$94.1 million
$19.9 million
$3.2 million
Attachment C
Investment Policy Compliance
As of December 31, 2011
Investment Policy Requirements
Compliance
Check
Attachment C
Investment Policy Compliance
As of December 31, 2011
Investment Policy Requirements
Compliance
Check
7 Commercial Paper:None Held
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.
8 Short-Term Repurchase Agreement (REPO):None Held
a) Not to exceed 1 year.
b) Market value of securities that underlay a repurchase agreement shall be valued at 102 percent or
greater of the funds borrowed against those securities.
9 Money Market Deposit Accounts Full Compliance
a) Liquid bank accounts which seek to maintain a net asset value of $1.00.
10 Mutual Funds:None Held
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.
11 Negotiable Certificates of Deposit (NCD):None Held
a) No more than 10 percent of the par value of the portfolio.
b) No more than $5 million in any one institution.
12 Medium-Term Corporate Notes:None Held
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.
13 Prohibited Investments:
a) Reverse Repurchase Agreements
b) Derivatives as defined in Appendix B of the Investment Policy
14 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
Full Compliance
None Held
Full Compliance