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Home My WebLink AboutInvstmnt Rprt - April 2007 � ` �7,..� City of Palm Desert r,._�� City and Redevelopment Agency Portfolios � �� COMPLIANCE ANALYSIS AND INVESTMENT REPORT _ April 2007 � Paul S. Gibson, C.C.M.T., Treasurer Thomas W. Jeffrey, J.D., M.B.A., Deputy City Treasurer Treasurer's Commentary The Federal Open Market Committee(FOMC) met on May 9th, and left the Federal Funds Rate unchanged at 5.25%. The FOMC's statement noted that while economic growth slowed in the first part of 2007, core inflation remained somewhat elevated. The FOMC will meet next on June 27-28. There is a significant gap between market expectations and the FOMC's apparent policy of being on hold. The market continues to expect rate cuts in the second half of 2007, while the FOMC is unlikely to do them unless there is further economic weakness or a marked decline in core inflation. Even economic growth of 2-2.5 percent for the remainder of 2007 may not spur an easing of short-term interest rates. If the economy strengthens without a reduction in inflation, then the FOMC may consider further tightening measures. The Bernanke Fed is very different from the Greenspan Fed. The slowdown in economic growth is being driven by continued weakness in housing, slowing job growth, rising gasoline rices, and decreased business spending. Productivity growth is also slowing. For businesses, this means raising labor costs, which, in turn, forces them either to raise prices or cut profit margins. This weakens the FOMC's containment strategy for inflation. A Goldman Sachs economist recently predicted an era of"soft growth", with "sub-prime shock" in 2008, and bankruptcies in 2009. ,��,�zs �� c.c.,y r Treasurer PORTFOLIO STATISTICS Dollars in Thousands APR-07 MAR-07 FEB-07 JAN-07 DEC-06 NOV-06 CITY Month-End Book Value""* $ 248,864 $ 210,992 $ 217,861 $ 237,367 $ 159,050 $ 159,790 Month-End Market Value"*" $ 248,991 $ 211,087 $ 218,014 $ 237,168 $ 158,939 $ 159,912 PaperGain(Loss) $ 127 $ 95 $ 153 $ (199) $ (111) $ 122 Prior Year Book Variance $ 98,111 $ 61,048 $ 70,854 $ 89,718 $ 15,863 $ 12,880 Interest Earnings $ 952 $ 891 $ 859 $ 853 $ 650 $ 635 Yield-To-Maturity 5.13% 5.13% 5.08% 5.06°/a 5.03% 5.01% Weighted Maturity(Days) 376 428 444 402 495 514 Effective Duration 0.56 0.66 0.69 0.57 0.75 0.80 RDA Month-End Book Value"*" $ 279,009 $ 303,532 $ 308,095 $ 237,367 $ 111,068 $ 115,137 Month-End Market Value'*"' $ 279,204 $ 303,707 $ 308,331 $ 237,252 $ 111,060 $ 115,388 Paper Gain(Loss) $ 195 $ 175 $ 236 $ (115) $ (8) $ 251 Prior Year Book Variance $ 136,331 $ 154,073 $ 154,443 $ 85,588 $ (14,327) $ (6,074) Interest Earnings $ 1,203 $ 1,333 $ 1,186 $ 1,013 $ 465 $ 466 Yield-To-Maturity 5.09% 5.11% 5.07% 5.05% 4.95% 4.95% Weighted Maturity(Days) 293 269 278 302 668 644 Effective Duration 0.49 0.47 0.56 0.49 1.10 1.11 � **"` Omits SLGSs. . City of Palm Desert-- Portfolio Characteristics 30 April 2007 Dollars in Thousands Aqeinq Interval Market Value � � < 1M $ 50,866 �General Fund Ageing <2M 5,501 �3M _ 100 __ <6M 8,943 ^, 80 < 1YR 9,950 ' <2YR 20,817 0 60 �0 39 <3YR 17,014 0 40 <4YR 12,060 a 20 4 O 7 8 �6 �3 9 3 O <5YR 4,187 0 >5YR - <1 M <2M <3M <6M < < < < < > Total: $ 129,338 1YR 2YR 3YR 4YR 5YR 5YR / - - -_ � - -- � Credit Quality Ratinps* Market Value II � qqq $ 167,684 B g� qq 11,209 , I A 14,896 I� 5% ' g 10,114 A 7% Unrated"" 33,629 i qq Total: $ 237,532 �i 5% � -_. ' / - - A encies MTNs , Sector Market Value I IAsset Allocation \ MMF $ 69,004 g 16% 19% Agencies 38,844 I MTNs 44,278 � �;��; LG I P 51,777 I °� RDA Loan 32,785 29 o LGIP LAIF 844 22% I CP - Total: $ 237,532 RDA Loan 14% % Month Citv Yield LAIF Yield Variance � IPerformance - - . \ May06 4.62 4.56 0.05 Jun 4.72 4.70 0.02 5.4 Jul 4.86 4.85 0.01 � Aug 4.92 4.95 -0.02 Sep 4.96 5.02 -0.07 I ' �� Oct 4.99 5.10 -0.11 , '� 4.9 d Nov 5.01 5.13 -0.12 } Dec 5.03 5.13 -0.09 � Jan07 5.06 5.16 -0.10 4.4 Feb 5.08 5.18 -0.11 May06Jun Jul Aug Sep Oct Nov DecJan07 Feb Mar Apr Mar 5.13 5.21 -0.08 - - - y - J Apr 5.13 5.22 -0.10 ��-f��l=Yi�€d iCi't �ic,lc+ , � - - ` " Standard and Poors ** LAIF,and City Loan to RDA Page 2 of 9 City of Palm Desert Portfolio Holdings 30 April 2007 Market Rati ngs Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P Medium-Term Notes $ 3,023,000 AMERICAN HONDA FINANCE 4.25 3/11/08 $ 3,002,354 5.08 99.08 $ 2,995,068 A1 A+ $ 3,000,000 BANK ONE 4.13 9/1/07 $ 3,004,574 3.64 99.55 $ 2,986,632 Aa3 A+ $ 2,920,000 BANK OF AMERICA 5.88 2/15/09 $ 2,961,941 5.01 101.40 $ 2,961,023 Aa2 AA- $ 3,000,000 FORD MOTOR CREDIT CORP 7.20 6/15/07 $ 3,004,673 5.75 100.02 $ 3,000,681 B1 B $ 2,500,000 FORD MOTOR CREDIT CORP 7.20 6/15/07 $ 2,503,894 5.75 100.02 $ 2,500,568 61 B $ 4,612,000 FORD MOTOR CREDIT CORP 7.20 6/15/07 $ 4,622,994 5.10 100.02 $ 4,613,047 B1 B $ 2,000,000 GENERAL ELECTRIC 3.60 10/15/08 $ 1,962,504 4.99 97.90 $ 1,957,998 Aaa AAA $ 2,035,000 GENERAL ELECTRIC 4.88 10/21/10 $ 1,988,040 5.63 99.57 $ 2,026,231 Aaa AAA $ 1,891,000 GENERAL ELECTRIC 6.88 11/15/10 $ 1,962,642 5.65 105.96 $ 2,003,696 Aaa AAA $ 2,000,000 GENERAL ELECTRIC 6.13 2/22/11 $ 2,030,325 5.67 103.57 $ 2,071,316 Aaa AAA $ 2,000,000 IBM 3.80 2/1/08 $ 1,979,607 5.13 98.94 $ 1,978,830 A1 A+ - $ 2,000,000 JP MORGAN CHASE 3.70 1/15/08 $ 1,978,810 5.25 98.94 $ 1,978,786 Aa3 A+ $ 3,080,000 WACHOVIA 3.63 2/17/09 $ 3,008,040 5.02 97.49 $ 3,002,840 Aa3 A+ $ 2,000,000 WACHOVIA 3.50 8/15/08 $ 1,958,830 5.18 97.68 $ 1,953,680 Aa3 A+ - $ 2,000,000 WAL-MART 6.88 8/10/09 $ 2,080,379 4.93 103.88 $ 2,077,622 Aa2 AA $ 4,000,000 WELLS FARGO BANK 6.38 8/1/11 $ 4,186,909 5.13 104.79 $ 4,191,456 Aa1 AA- $ 2,000,000 WELLS FARGO BANK 4.63 8/9/10 $ 1,972,429 5.09 98.94 $ 1,978,754 Aa1 AA- $ 44,061,000 Subtotal $ 44,208,946 5.15 $ 44,278,228 Federal Agencies--Coupon $ 3,000,000 FED HOME LOAN BANK 3.70 8/15/07 $ 2,999,237 3.79 99.56 $ 2,986,875 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 4.38 9/11/09 $ 2,968,071 5.59 99.00 $ 2,970,000 Aaa AAA $ 1,980,000 FED HOME LOAN BANK 4.75 12/12/08 $ 1,976,001 4.87 99.75 $ 1,975,050 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 4.63 9/12/08 $ 2,990,727 5.40 99.56 $ 2,986,875 Aaa AAA $ 2,049,000 FED HOME LOAN BANK 4.00 12/15/09 $ 2,006,943 4.87 98.00 $ 2,008,020 Aaa AAA $ 3,030,000 FED HOME LOAN BANK 4.00 3/10/08 $ 3,004,779 5.02 99.06 $ 3,001,594 Aaa AAA $ 2,033,000 FED HOME LOAN MTG CORP 4.25 7/15/09 $ 2,007,684 4.87 98.78 $ 2,008,223 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 4.13 11/18/09 $ 1,965,167 4.88 98.36 $ 1,967,112 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 4.90 11/3/08 $ 1,995,529 5.06 99.89 $ 1,997,772 Aaa AAA $ 2,062,000 FED HOME LOAN MTG CORP 4.13 7/12/10 $ 1,979,483 5.47 98.03 $ 2,021,404 Aaa AAA $ 3,000,000 FED NATIONAL MTG ASSOC 3.00 8/15/07 $ 2,994,909 3.63 99.38 $ 2,981,250 Aaa AAA $ 2,000,000 FED NATIONAL MTG ASSOC 4.63 10/28/09 $ 1,988,406 4.88 99.56 $ 1,991,250 Aaa AAA $ 2,000,000 FED NATIONAL MTG ASSOC 4.25 8/15/10 $ 1,925,515 5.47 98.38 $ 1,967,500 Aaa AAA $ 31,154,000 Subtotal $ 30,802,450 4.87 $ 30,862,925 Federal Agencies--Callable $ 2,000,000 FED HOME LOAN BANK 4.20 7/18/08 $ 1,984,635 4.88 99.06 $ 1,981,250 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 5.05 8/22/08 $ 1,999,673 5.06 100.06 $ 2,001,210 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 5.30 8/13/09 $ 2,000,000 5.30 99.94 $ 1,998,786 Aaa AAA $ 2,000,000 FED NATIONAL MTG ASSOC 5.38 2/1/10 $ 2,000,000 5.37 100.00 $ 2,000,000 Aaa AAA $ 8,000,000 Subtotal. $ 7,984,308 5.15 $ 7,981,246 "U"= Unrated Page 3 of 9 City of Palm Desert Portfolio Holdings 30 April 2007 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P Local Government Investment Pool $ 843,608 L.A.I.F. 0.00 5/1/07 $ 843,608 5.22 100.00 $ 843,608 U U $ 843,608 Subtotal $ 843,608 5.22 $ 843,608 Local Government Investment Pool $ 50,119,284 C.A.M.P. 0.00 5/1/07 $ 50,119,284 5.21 100.00 $ 50,119,284 U AAA $ 1,657,452 C.A.M.P.(HOUSING) 0.00 5/1/07 $ 1,657,452 5.21 100.00 $ 1,657,452 U AAA $ 51,776,735 Subtotal $ 51,776,735 5.21 $ 51,776,735 Money Market Fund $ 69,004,171 WF ADVANTAGE GOVT MMF 0.00 5/1/07 $ 69,004,171 5.12 100.00 $ 69,004,171 Aaa AAA $ 69,004,171 Subtotal $ 69,004,171 5.12 $ 69,004,171 City Loan to RDA $ 32,785,480 CITY OF PALM DESERT 0.00 5/1/37 $ 32,785,480 5.22 100.00 $ 32,785,480 U U $ 32,785,480 Subtotal $ 32,785,480 5.22 $ 32,785,480 Total Investments $ 237,624,995 $ 237,405,699 5.13 $ 237,532,394 Cash $ 9,285,704 CITY MAIN CHKG 0.00 5/1/07 $ 9,285,704 0.00 100.00 $ 9,285,704 U U $ 1,370,062 DESERT WILLOW CHKG 0.00 5/1/07 $ 1,370,062 0.00 100.00 $ 1,370,062 U U $ 627,747 MONTEREY 170 CHKG 0.00 5/1/07 $ 627,747 0.00 100.00 $ 627,747 U U $ 175,193 RECREATIONAL FAC CHKG 0.00 5/1/07 $ 175,193 0.00 100.00 $ 175,193 U U $ 11,458,707 Subtotal $ 11,458,707 $ 11,458,707 Total Investments and Cash $ 249,083,702 $ 248,864,407 $ 248,991,101 "U"= Unrated Page 4 of 9 City of Palm Desert Portfolio Holdings 30 April 2007 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P %of Portfolio Corporate Issuers (Market Value) AMERICAN HONDA FINANCE 1.20% - BANK ONE 1.20% BANK OF AMERICA 1.19% FORD MOTOR CREDIT CORP 4.06% ' GENERAL ELECTRIC 3.24% IBM 0.79% JP MORGAN CHASE 0.79% WACHOVIA 1.99% WAL-MART 0.83% WELLS FARGO BANK 2.48% "U"= Unrated Page 5 of 9 Palm Desert Redevelopment Agency-- Portfolio Characteristics 30 April 2007 _..................................................................................................................................................................... Aqeinq Interval Market Value f 'portfolio Ageing w/o SLGSs� < 1 M $ 10,714 j � <2M ' � <3M _ ' �00 ._...� 90 <6M 5,940 j o 80 < 1YR 14,936 ` � 70 0 60 <2YR 32,759 , '0 50 35 <3YR 18,751 40 � 0 30 16 20 <4YR 10,112 a 20 �� g 11 <5YR _ 10 0 0 0 0 0 > 5YR - { <1 M <2M <3M <6M < < < < < > Total: $ 93,212 � 1YR 2YR 3YR 4YR 5YR 5YR Qualit * Market Value i�ICredit 4ua►ity I qqq $ 246,678 � qq 9,013 89% � A 8,949 Unrated" ' Unrated*' 13,511 5% AA q Total: $ 278,151 I 3%3% �V � . _ __ _ /- _ _ Sector Market Value �Asset Allocation �', MMF $ 181,438 I Agencies 64,573 MMF 66% LAI F 13,511 MTNs 17,962 LGIP 667 CP - I� MTNs Agencies � Treasuries - 6°/a LAIF 23% Total: $ 278,151 I 5% ' �� _ _ __ _ � _ Month RDA Yield LAIF Yield Variance �Performance May06 4.60 4.56 0.04 i Jun 4.69 4.70 -0.01 5.4 Jul 4.82 4.85 -0.03 Aug 4.85 4.95 -0.10 � 0 5.0 Sep 4.94 5.02 -0.09 �, Oct 4.95 5.10 -0.15 d , Nov 4.95 5.13 -0.18 r 4.6 Dec 4.95 5.13 -0.18 Jan07 5.05 5.16 -0.11 4.2 Feb 5.06 5.18 -0.12 May06Jun Jul Aug Sep Oct Nov DecJan07 Feb Mar Apr Mar 5.11 5.21 -0.11 -- - -- Apr 5.09 5.22 -0.13 I� - ��LAIF Yield ■RDA Yield-I / • '` Standard and Poors ** LAIF Page 6 of 9 Palm Desert Redevelopment Agency Portfolio Holdings 30 April 2007 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P Medium-Term Notes $ 4,000,000 CITIGROUP 6.20 3/15/09 $ 4,074,829 5.13 102.01 $ 4,080,316 Aa1 AA- $ 4,070,000 JP MORGAN CHASE 3.50 3/15/09 $ 3,954,235 5.12 97.21 $ 3,956,325 Aa3 A+ $ 3,055,000 JP MORGAN CHASE 3.50 3/15/09 $ 2,968,105 5.12 97.21 $ 2,969,674 Aa3 A+ $ 2,000,000 FIRST UNION NAT BANK 5.80 12/1/08 $ 2,023,269 5.00 101.15 $ 2,022,904 Aa3 A+ $ 2,000,000 WELLS FARGO BANK 4.00 8/15/08 $ 1,976,979 4.96 98.32 $ 1,966,346 Aa1 AA- $ 3,000,000 WELLS FARGO BANK 4.13 3/10/08 $ 2,973,815 5.18 98.89 $ 2,966,574 Aa1 AA- $ 18,125,000 Subtotal $ 17,971,232 5.10 $ 17,962,139 Federal Agency--Coupon $ 3,000,000 FED FARM CREDIT BANK 2.63 9/17/07 $ 2,991,234 3.43 99.06 $ 2,971,875 Aaa AAA $ 2,000,000 FED FARM CREDIT BANK 6.45 10/7/09 $ 2,069,071 4.88 103.69 $ 2,073,756 Aaa AAA • $ 2,000,000 FED FARM CREDIT BANK 3.63 10/24/08 $ 1,965,356 4.89 98.13 $ 1,962,500 Aaa AAA $ 2,000,000 FED FARM CREDIT BANK 4.75 8/3/09 $ 1,995,057 4.87 99.94 $ 1,998,750 Aaa AAA $ 3,000,000 FED FARM CREDIT BANK 3.38 9/14/07 $ 2,998,981 3.82 99.34 $ 2,980,313 Aaa AAA � $ 3,970,000 FED FARM CREDIT BANK 4.25 9/12/08 $ 3,939,127 4.79 99.06 $ 3,932,781 Aaa AAA $ 3,970,000 FED FARM CREDIT BANK 4.25 9/12/08 $ 3,939,127 4.79 99.06 $ 3,932,781 Aaa AAA $ 4,500,000 FED FARM CREDIT BANK 4.38 9/11/09 $ 4,452,106 5.59 99.00 $ 4,455,000 Aaa AAA $ 2,000,000 FED FARM CREDIT BANK 3.50 11/3/09 $ 1,937,403 4.88 96.88 $ 1,937,500 Aaa AAA $ 4,000,000 FED FARM CREDIT BANK 4.63 9/12/08 $ 3,987,636 4.84 99.56 $ 3,982,500 Aaa AAA $ 2,005,000 FED FARM CREDIT BANK 3.88 7/24/09 $ 1,963,716 4.89 97.91 $ 1,963,020 Aaa AAA $ 2,000,000 FED FARM CREDIT BANK 4.88 3/11/11 $ 1,955,428 5.49 100.28 $ 2,005,625 Aaa AAA $ 2,000,000 FED FARM CREDIT BANK 4.88 3/11/11 $ 1,954,833 5.50 100.28 $ 2,005,625 Aaa AAA $ 1,990,000 FED FARM CREDIT BANK 4.00 3/10/08 $ 1,970,912 5.16 99.06 $ 1,971,344 Aaa AAA $ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15/09 $ 2,006,798 4.87 98.00 $ 2,008,020 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 5.00 7/23/08 $ 1,998,439 5.07 99.97 $ 1,999,366 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 2,079,264 5.54 106.44 $ 2,128,750 Aaa AAA $ 3,734,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 3,882,257 5.54 106.44 $ 3,974,376 Aaa AAA $ 4,155,000 FED NATIONAL MTG ASSOC 6.63 9/15/09 $ 4,309,796 4.89 104.00 $ 4,321,200 Aaa AAA $ 2,000,000 FED NATIONAL MTG ASSOC 3.88 11/17/08 $ 1,971,504 4.87 98.38 $ 1,967,500 Aaa AAA $ 54,373,000 Subtotal $ 54,368,044 4.92 $ 54,572,583 Federal Agency--Callable $ 5,000,000 FED HOME LOAN BANK 5.25 2/15/08 $ 5,000,000 5.25 100.00 $ 5,000,000 Aaa AAA $ 5,000,000 FED HOME LOAN BANK 5.25 2/1/08 $ 5,000,000 5.25 100.00 $ 5,000,000 Aaa AAA $ 10,000,000 Subtotal $ 10,000,000 5.25 $ 10,000,000 Local Government Investment Pool $ 1,043,493 L.A.I.F. 0.00 5/1/07 $ 1,043,493 5.22 100.00 $ 1,043,493 U U $ 4,621,074 L.A.I.F.(HOUSING) 0.00 5/1/07 $ 4,621,074 5.22 100.00 $ 4,621,074 U U $ 7,846,924 L.A.I.F. BOND PROCEEDS 0.00 5/1/07 $ 7,846,924 5.22 100.00 $ 7,846,924 U U $ 13,511,491 Subtotal $ 13,511,491 5.22 $ 13,511,491 . "U"= Unrated Page 7 of 9 Palm Desert Redevelopment Agency Portfolio Holdings 30 April 2007 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P Local Government Investment Pool $ 666,827 C.A.M.P. 0.00 5/1/07 $ 666,827 5.21 100.00 $ 666,827 U AAA $ 666,827 Subtotal $ 666,827 5.21 $ 666,827 Money Market Fund $ 181,438,244 WF ADVANTAGE GOVT MMF 0.00 5/1/07 $ 181,438,244 5.12 100.00 $ 181,438,244 Aaa AAA $ 181,438,244 Subtotal $ 181,438,244 5.12 $ 181,438,244 Total Investments $ 278,114,563 $ 277,955,839 5.09 $ 278,151,285 'Cash $ 726,563 HOUSING AUTH CHKG 0.00 5/1/07 $ 726,563 0.00 100.00 $ 726,563 U U $ 326,609 HOUSING AUTH TRUST 0.00 5/1/07 $ 326,609 0.00 100.00 $ 326,609 U U $ 1,053,172 Subtotal $ 1,053,172 $ 1,053,172 Total Investments and Cash $ 279,167,735 $ 279,009,011 $ 279,204,457 %of Portfolio Corporate Issuers (Market Value) CITIGROUP 1.46% JP MORGAN CHASE 2•4$% FIRST UNION NAT BANK 0.72% WELLS FARGO BANK 1•77% • "U"= Unrated Page 8 of 9 . STATEMENT OF COMPLIANCE The investment portfolios of the City of Palm Desert("City")and the Palm Desert Redevelopment Agency("RDA")are governed by federal, state, and local law. The City Treasurer's"Statement of Investment Policy"is more restrictive than the California Government Code. The Palm Desert Audit, Investment, and Finance Committee and the Paim Desert City Council review the Statement of Investment Policy annually. For the month ended 30 April 2007,the City and the RDA investment portfolios were in compliance with all applicable federal, state, and local laws and regulations. The City Treasury continued to pursue conservative and prudent investment strategies, based upon the stated objectives of safety, liquidity,and yield(in order of priority). Barring unforeseen events,the City Treasury should have sufficient cash to finance the operations of the City of Palm Desert and the Palm Desert Redevelopment Agency over the next six months. In addition, portions of either the City or the RDA portfolio could be liquidated in order to meet any significant, unexpected cash requirements. Bloomberg L.P.and Interactive Data Corporation provided the data and the analytical tools that were used to calculate the market value of all securities in the City and the RDA investment portfolios. State and Local Government Series securities are held in escrow accounts,and are therefore not included in this report as assets. All balances are bank balances. Respectfully submitted on 22 May 2007, ��s �� c.c.M r. � � City Treasurer SUMMARY OF AUTHORIZED INVESTMENTS California Government Code City Investment Policy CA Govt Maximum Maximum Quality Maximum Maximum Quality %of City %of RDA Code Investment Category Maturity Limit S&P/Mdys Maturity Limit S&P/Mdys Portfolio Portfolio 53601(a) Palm Desert Bonds 5 Years No Limit NotAuthorized(1) 53601(b) U.S.Treasuries 5 Years No Limit 5 Years No Limit 0.0% Q.0% 53601(c) CA State Debt 5 Years No Limit Not Authorized 53601(d) CA Local Agency Debt 5 Years No Limit Not Authorized 53601(e) Federal Agencies 5 Years No Limit 5 Years 30% 6% 16.3% 23.2% 53601(f) Bankers's Acceptances 180 Days 40% 180 Days 40% A-1 &P-1 - - 53601(g) Commercial Paper 270 Days 25% A-1+or P-1 270 Days 25% A-1+or P-1 0.0% 0.0% 53601(h) Negotiable CDs 5 Years 30% 5 Years 30% AA-or Aa3 - - 53601(i) Repos 1 Year No Limit 30 Days 20% AAA&Aaa - - 53601(i) Reverse Repos 92 Days 20% Not Authorized 53601(j) Medium-Term Notes 5 Years 30% A 5 Years 30% A 18.6°/a 6.5% 53601(k) Mutual Funds 90 Days 20°/a AAA&Aaa 90 Days 20% (2) AAA&Aaa 29.1% 65.3% 53601(I) Trust Indenture Debt NotAuthorized 53601(m) Secured Bank Deposits 5 Years No Limit Not Authorized 53601(k) Local Government AAA&Aaa AAA&Aaa Investment Pools 90 Days 20% or Advisor 90 Days 20% (2) or Advisor 21.8% 0.2% 53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& Not Authorized Securities AA(Security LAIF No Limit No Limit 0.4% 4.9% (1) The City loan to RDA,which is not a bond, has been approved by the Palm Desert City Council. 86.2°/o 100.0% (2) Maximum limit for mutual funds and local government investment pools, excluding bond proceeds. " Certified California Municipal Treasurer Page 9 of 9 .