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HomeMy WebLinkAboutInvstmnt Rprt - March 2008 �...,,�,.� City of Palm Desert � � � City and Redevelopment Agency Portfolios � � COMPLIANCE ANAIYSIS AND INl/ESTMENT REPORT '' March 2008 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)will meet next on April 30. Federal Funds Futures have assigned a 75% probability to a 25-basis point cut to the Federal Funds Rate, leaving it at 2%. Although the FOMC and the federal housing agencies have provided additional liquidity to reduce the odds of another"run"on a primary securities dealer, it is not enough to remove the balance sheet constraints on financial institutions as they continue to hold a portfolio of declining assets, and to incur losses in housing-related transactions. The International Monetary Fund has forecast that the U.S. economy will grow 0.5% in 2008, and at 0.6% in 2009. U.S. inflation is expected to be 2.6% in 2008, based upon global competition for food, energy, and other raw materials. The U.S. unemployment rate is currently 5.1%. Merill Lynch believes that U.S. housing prices will deflate by another 20-25% over the next two years. California housing prices continue to fall at a rate of$3,000 per week. The next"bubble"to burst will probably be commodities -- by midsummer. The price of crude oil, copper, and other commodities are unsustainably high due to speculation. ,There is heavy buying on the short-end of the yield curve, further depressing bond yields. The City has moved all of its bond proceeds into its highest yielding money market fund in order to enhance profitability. ��s �'��ao� c.c.�t.r Treasurer PORTFOLIO STATISTICS Dollars in Thousands MAR-08 FEB-08 JAN-08 DEC-07 NOV-07 OCT-07 CITY Month-End Book Value""" $ 226,638 $ 226,921 $ 231,415 $ 235,098 $ 238,867 $ 243,827 Month-End Market Value""" $ 229,015 $ 229,529 $ 234,066 $ 236,340 $ 240,346 $ 244,504 Paper Gain(Loss) $ 2,377 $ 2,608 $ 2,651 $ 1,242 $ 1,479 $ 677 Prior Year Book Variance $ 15,646 $ 8,430 $ (5,952) $ 76,048 $ 79,077 $ 86,424 Interest Earnings $ 749 $ 739 $ 865 $ 932 $ 961 $ 965 Yield-To-Maturity 4.05% 4.31°/a 4.72°/a 4.88% 4.93% 5.05% Weighted Maturity(Days) 509 462 473 462 455 445 Effective Duration 0.81 0.70 0.72 0.74 0.77 0.79 RDA Month-End Book Value""" $ 275,598 $ 276,463 $ 285,919 $ 248,963 $ 250,163 $ 250,737 Month-End Market Value"** $ 277,364 $ 278,326 $ 287,781 $ 252,033 $ 251,232 $ 251,297 Paper Gain(Loss) $ 1,766 $ 1,863 $ 1,862 $ 3,070 $ 1,069 $ 560 Prior Year Book Variance $ (27,934) $ (31,632) $ 48,552 $ 137,895 $ 135,026 $ 134,517 Interest Earnings $ 881 $ 749 $ 1,027 $ 992 $ 966 $ 1,174 Yield-To-Maturity 3.36% 3.79% 4.45% 4.71% 4.70% 4.87% Weighted Maturity(Days) 291 249 247 285 283 282 Effective Duration 0.41 0.31 0.31 0.37 0.40 0.41 "*" Omits SLGSs. City of Palm Desert-- Portfolio Characteristics March 31, 2008 Dollars in Thousands AQeinq Interval Market Value < 1 M $ 38,448 General Fund Ageing <2M - <3M - 100 <6M 13,101 ^ $� < 1YR 16,154 e <2YR 42,410 0 60 <3YR 33,450 � 40 25 28 <4YR 8,265 ° 22 <5YR - a 20 O O 9 11 5 0 0 >5YR - � Total: $ 151,828 <1 M <2M <3M <6M <1YR<2YR<3YR<4YR<5YR>5YR Ratinqs` Market Value Credit Quality AAA $ 134,359 A AAA AA 47,798 4% 71% A 7,221 Unrated** 32,799 Total: $ 222,177 � 25% Sector Market Value Asset Allocation MMF $ 51,582 Agencies 45,260 Agencies MTNs MTNs 67,435 21% 30% CAM P 25,101 RDA Loan 32,785 LAIF 14 23 o CAMP CP - 11% Total: $ 222,177 RDA Loan 15% Month Citv Yield LAIF Yield Variance Performance Apr07 5.13 5.22 -0.10 May 5.11 5.25 -0.13 5.5 Jun 5.11 5.25 -0.14 Jul 5.11 5.26 -0.15 Aug 5.09 5.25 -0.17 ^ 5.0 0 Sep 5.01 5.23 -0.22 � Oct 5.05 5.14 -0.09 } 4.5 Nov 4.93 4.96 -0.03 Dec 4.87 4.80 0.07 4.0 Jan 4.72 4.62 0.10 Apr07 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar08 Feb 4.31 4.16 0.15 Mar08 4.05 3.78 0.27 ■ �°,�f �r��_{ � ■; �� ;�r ,.�:� '' Standard and Poors "" LAIF, and City Loan to RDA Page 2 City of Palm Desert Portfolio Holdings March 31, 2008 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P Medium-Term Notes $ 2,920,000 BANK OF AMERICA 5.88 2/15/09 $2,940,449 5.01 102.11 $2,981,708 Aa2 AA- $ 3,795,000 BANK OF AMERICA 5.38 8/15/11 $3,951,702 4.05 104.31 $3,958,417 Aa2 AA- $ 3,000,000 BANK OF AMERICA 4.25 10/1/10 $3,074,942 3.20 0.00 $3,074,942 Aa2 AA- $ 15,270,000 CITIGROUP 4.13 2/22/10 $15,058,976 4.91 99.04 $15,123,759 Aa1 AA $ 2,035,000 C�TIGROUP 4.13 2/22/10 $2,006,877 4.91 99.04 $2,015,511 Aa1 AA $ 1,000,000 CITIGROUP 4.63 8/3/10 $987,859 5.19 99.94 $999,394 Aa1 AA $ 4,000,000 CITIGROUP 4.63 8/3/10 $3,951,436 5.19 99.94 $3,997,576 Aa1 AA $ 2,000,000 GENERAL ELECTRIC 3.60 10/15/08 $1,986,118 4.99 100.04 $2,000,872 Aaa AAA $ 2,035,000 GENERAL ELECTRIC 4.88 10/21/10 $2,000,437 5.63 103.93 $2,114,890 Aaa AAA $ 1,891,000 GENERAL ELECTRIC 6.88 11/15/10 $1,944,085 5.65 108.60 $2,053,590 Aaa AAA $ 2,000,000 GENERAL ELECTRIC 6.13 2/22/11 $2,023,026 5.67 106.29 $2,125,854 Aaa AAA $ 3,965,000 GENERAL ELECTRIC 4.88 10/21/10 $4,123,392 3.23 103.93 $4,120,658 Aaa AAA $ 3,080,000 WACHOVIA 3.63 2/17/09 $3,044,800 5.02 99.69 $3,070,409 Aa3 A+ $ 2,000,000 WACHOVIA 3.50 8/15/08 $1,988,110 5.18 99.88 $1,997,556 Aa3 A+ $ 2,000,000 WACHOVIA 7.80 8/18/10 $2,121,480 5.02 107.64 $2,152,878 Aa3 A+ $ 2,000,000 WAL-MART 6.88 8/10/09 $2,047,992 4.93 105.56 $2,111,218 Aa2 AA $ 3,000,000 WAL-MART 6.88 8/10/09 $3,157,447 2.90 105.56 $3,166,827 Aa2 AA $ 4,000,000 WELLS FARGO BANK 6.38 8/1/11 $4,146,595 5.13 106.44 $4,257,432 Aa1 AA- $ 2,000,000 WEL�S FARGO BANK 4.63 8/9/10 $1,980,153 5.09 102.68 $2,053,698 Aa1 AA- $ 2,025,000 WELLS FARGO BANK 3.13 4/1/09 $1,990,253 4.92 98.95 $2,003,697 Aa1 AA- $ 2,020,000 WELLS FARGO BANK 4.20 1/15/10 $1,994,074 4.96 101.67 $2,053,716 Aa1 AA- $ 66,036,000 Subtotal $ 66,520,203 4.71 $ 67,434,601 Federal Agencies--Coupon $ 3,000,000 FED FARM CREDIT BANK 4.78 5/3/10 $ 3,009,758 4.61 105.03 $ 3,150,938 Aaa AAA $ 3,000,000 FED FARM CREDIT BANK 4.78 5/3/10 $ 3,009,758 4.61 105.03 $ 3,150,938 Aaa AAA $ 2,015,000 FED FARM CREDIT BANK 3.38 7/15/08 $ 2,007,643 4.68 100.28 $ 2,020,667 Aaa AAA $ 2,000,000 FED FARM CREDIT BANK 3.63 10/24/08 $ 1,964,911 6.90 100.72 $ 2,014,375 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 4.38 9/11/09 $ 2,980,467 5.59 103.00 $ 3,090,000 Aaa AAA $ 1,980,000 FED HOME LOAN BANK 4.75 12/12/08 $ 1,978,272 4.87 101.69 $ 2,013,413 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 4.63 9/12/08 $ 2,996,959 5.40 101.00 $ 3,030,000 Aaa AAA $ 2,000,000 FED HOME LOAN BANK 3.50 11/3/09 $ 1,927,459 5.96 101.91 $ 2,038,125 Aaa AAA $ 2,033,000 FED HOME LOAN MTG CORP 4.25 7/15/09 $ 2,018,206 4.87 102.50 $ 2,083,825 Aaa AAA $ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15/09 $ 2,021,645 4.87 102.88 $ 2,107,909 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 4.13 11/18/09 $ 1,977,703 4.88 102.95 $ 2,059,078 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 4.90 11/3/08 $ 1,998,251 5.06 101.53 $ 2,030,572 Aaa AAA $ 2,062,000 FED HOME LOAN MTG CORP 4.13 7/12/10 $ 2,003,141 5.47 103.81 $ 2,140,614 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 5.00 7/23/08 $ 1,998,732 5.20 100.79 $ 2,015,856 Aaa AAA $ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15/09 $ 2,000,064 5.50 102.88 $ 2,107,909 Aaa AAA $ 2,000,000 FED NATIONAL MTG ASSOC 4.63 10/28/09 $ 1,992,671 4.88 103.63 $ 2,072,500 Aaa AAA $ 2,000,000 FED NATIONAL MTG ASSOC 4.25 8/15/10 $ 1,946,275 5.47 104.19 $ 2,083,750 Aaa AAA $ 2,000,000 FED NATIONAL MTG ASSOC 3.88 11/17/08 $ 1,970,330 6.35 100.94 $ 2,018,750 Aaa AAA "U"= Unrated Page 3 City of Palm Desert Portfolio Holdings March 31, 2008 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P Federal Agencies--Coupon (continued) $ 40,188,000 Subtotal $ 39,802,245 5.26 $ 41,229,217 Federal Agencies--Callable $ 2,000,000 FED HOME LOAN BANK 4.20 7/18/08 $ 1,996,238 4.88 100.53 $ 2,010,625 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 5.05 8/22/08 $ 1,999,902 5.06 101.02 $ 2,020,384 Aaa AAA $ 4,000,000 Subtotal $ 3,996,140 4.97 $ 4,031,009 Local Government Investment Pool $ 13,812 L.A.I.F. 0.00 4/1/08 $ 13,812 3.78 100.00 $ 13,812 U U $ 13,812 Subtotal $ 13,812 3.78 $ 13,812 Local Government Investment Pool $ 23,279,292 C.A.M.P. 0.00 4/1/08 $ 23,279,292 3.29 100.00 $ 23,279,292 U AAA $ 1,822,076 C.A.M.P. (DESERT WILLOW) 0.00 4/1/08 $ 1,822,076 3.29 100.00 $ 1,822,076 U AAA $ 25,101,369 Subtotal $ 25,101,369 3.29 $ 25,101,369 Money Market Fund $ 49,754,393 WF ADVANTAGE GOVT 0.00 4/1/08 $ 49,754,393 2.75 100.00 $ 49,754,393 Aaa AAA $ 49,754,393 Subtotal $ 49,754,393 2.75 $ 49,754,393 Money Market Fund $ 1,172,218 WF HERITAGE SELECT 0.00 4/1/08 $ 1,172,218 3.31 100.00 $ 1,172,218 Aaa AAA $ 1,172,218 Subtotal $ 1,172,218 3.31 $ 1,172,218 Money Market Fund $ 655,262 WF TREASURY PLUS 0.00 4/1/08 $ 655,262 1.63 100.00 $ 655,262 Aaa AAA $ 655,262 Subtotal $ 655,262 1.63 $ 655,262 City Loan to RDA $ 32,785,480 CITY OF PALM DESERT 0.00 4/1/38 $ 32,785,480 3.78 100.00 $ 32,785,480 U U $ 32,785,480 Subtotal $ 32,785,480 3.78 $ 32,785,480 Total Investments $ 219,706,534 $ 219,801,122 4.05 $ 222,177,361 Cash $ 4,958,395 CITY MAIN CHKG 0.00 4/1/08 $ 4,958,395 0.00 100.00 $ 4,958,395 U U $ 1,117,069 DESERT WILLOW CHKG 0.00 4/1/08 $ 1,117,069 0.00 100.00 $ 1,117,069 U U $ 553,981 MONTEREY 170 CHKG 0.00 4/1/08 $ 553,981 0.00 100.00 $ 553,981 U U $ 207,862 RECREATIONAL FAC CHKG 0.00 4/1/08 $ 207,862 0.00 100.00 $ 207,862 U U "U"= Unrated Page 4 City of Palm Desert Portfolio Holdings March 31, 2008 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's SB�P Cash(continued) $ - FALCON CREST HOA CHKG 0.00 4/1/08 $ - 0.00 100.00 $ - U U $ - ART, FOOD&WINE CHKG 0.00 4/1/08 $ - 0.00 100.00 $ - U U $ 6,837,307 Subtotal $ 6,837,307 $ 6,837,307 Total Investments and Cash $ 226,543,840 $ 226,638,429 $ 229,014,668 %of Portfolio Corporate Issuers (Market Value) BANK OF AMERICA 4.37% CITIGROUP 9.67% GENERAL ELECTRIC 5.42% WACHOVIA 3.15% WAL-MART 2.30°/a WELLS FARGO BANK 4.53% %of Portfolio Agency Issuers (Market Value) FED FARM CREDIT BANK 4.51% FED HOME LOAN BANK 5.32% FED HOME LOAN MTG CORP 7.23% FED NATIONAL MTG ASSOC 2.70% "U"= Unrated Page 5 . Palm Desert Redevelopment Agency-- Portfolio Characteristics March 31, 2008 Dollars in Thousands Aqeinq Interval Market Value < 1 M $ 17,039 Portfolio Ageing w/o SLGSs <2M - <3M - 100 <6M 14,053 90 80 < 1YR 16,298 0 70 <2YR 31,886 0 60 ' S0 33 <3YR 18,823 0 30 17 17 19 <4YR a 20 14 <5YR _ 10 0 0 0 0 0 0 >5YR - <1 M <2M <3M <6M <1 YR<2YR<3YR<4YR<5YR>5YR Total: $ 98,099 Qualitv` Market Value Credit Quality AAA $ 230,241 � AA 26,170 84% A 12,177 Unrated" Unrated"* 5,439 2% q Total: $ 274,027 4% � 10% Sector Market Value Asset Allocation MMF $ 169,740 Agencies 41,498 MMF LAI F 5,439 62% MTNs 38,172 Agencies CAM P 19,178 15% CP - CAMP �,qIF Treasuries - �% MTNs 2a�o Total: $ 274,027 14% Month RDA Yield LAIF Yield Variance Performance Apr07 5.09 5.22 -0.13 May 5.10 5.25 -0.15 5.5 Jun 5.11 5.25 -0.14 Jul 5.10 5.26 -0.16 5.0 Aug 5.07 5.25 -0.19 0 Sep 5.02 5.23 -0.21 �a 4.5 d Oct 4.87 5.14 -�•27 } 4.0 Nov 4.70 4.96 -0.26 Dec 4.70 4.80 -0.10 3.5 Jan 4.45 4.62 -0.17 Apr07 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar08 Feb 3.78 4.16 -0.38 Mar08 3.36 3.78 -0.42 sLAIF Yield ■RDA Yield " Standard and Poors "` LAIF Page 6 Palm Desert Redevelopment Agency Portfolio Holdings March 31, 2008 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 $ 4,083,600 5.13 101.68 $ 4,067,052 Aa1 AA- $ 4,070,000 JP MORGAN CHASE 3.50 3/15/09 $ 3,939,979 5.12 99.67 $ 4,056,748 Aa3 A+ $ 3,055,000 JP MORGAN CHASE 3.50 3/15/09 $ 2,957,404 5.12 99.67 $ 3,045,053 Aa3 A+ $ 3,000,000 JP MORGAN CHASE 6.00 1/15/09 $ 3,077,274 3.00 101.68 $ 3,050,505 Aa3 A+ $ 2,000,000 FIRST UNION NAT BANK 5.80 12/1/08 $ 2,041,272 5.00 101.22 $ 2,024,456 Aa3 A+ $ 3,000,000 WAL-MART 6.88 8/10/09 $ 3,117,360 4.76 105.56 $ 3,166,827 Aa2 AA $ 3,000,000 WAL-MART 4.13 7/1/10 $ 3,081,270 2.91 102.79 $ 3,083,802 Aa2 AA $ 2,000,000 WELLS FARGO BANK 4.00 8/15/08 $ 1,955,100 4.96 100.01 $ 2,000,136 Aa1 AA- $ 13,625,000 WELLS FARGO BANK 4.20 1/15/10 $ 13,918,820 3.00 101.67 $ 13,852,415 Aa1 AA- $ 37,750,000 Subtotal $ 38,172,079 3.96 $ 38,346,993 Federal Agencies--Coupon $ 2,000,000 FED FARM CREDIT BANK 6.45 10/7/09 $ 2,104,000 4.88 106.27 $ 2,125,430 Aaa AAA - $ 2,000,000 FED FARM CREDIT BANK 4.75 8/3/09 $ 1,992,360 4.87 103.38 $ 2,067,500 Aaa AAA $ 4,900,000 FED FARM CREDIT BANK 4.90 9/22/10 $ 4,936,173 4.65 105.84 $ 5,186,344 Aaa AAA $ 3,970,000 FED HOME LOAN BANK 4.25 9/12/08 $ 3,911,272 4.79 100.81 $ 4,002,256 Aaa AAA ` $ 3,970,000 FED HOME LOAN BANK 4.25 9/12/08 $ 3,911,272 4.79 100.81 $ 4,002,256 Aaa AAA $ 4,500,000 FED HOME LOAN BANK 4.38 9/11/09 $ 4,427,145 5.59 103.00 $ 4,635,000 Aaa AAA $ 4,000,000 FED HOME LOAN BANK 4.63 9/12/08 $ 3,976,480 4.84 101.00 $ 4,040,000 Aaa AAA $ 2,005,000 FED HOME LOAN BANK 3.88 7/24/09 $ 1,940,940 4.89 102.03 $ 2,045,727 Aaa AAA $ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,946,000 5.49 106.03 $ 2,120,625 Aaa AAA $ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,945,280 5.50 106.03 $ 2,120,625 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 2,098,460 5.54 110.38 $ 2,207,500 Aaa AAA $ 3,734,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 3,918,161 5.54 110.38 $ 4,121,403 Aaa AAA $ 4,155,000 FED NATIONAL MTG ASSOC 6.63 9/15/09 $ 4,390,094 4.89 106.22 $ 4,413,389 Aaa AAA $ 41,234,000 Subtotal $ 41,234,000 5.06 $ 41,234,000 Local Government Investment Pool $ 9,656 L.A.I.F. 0.00 4/1/08 $ 9,656 3.78 100.00 $ 9,656 U U $ 21,145 L.A.I.F. (HOUSING) 0.00 4/1/08 $ 21,145 3.78 100.00 $ 21,145 U U $ 5,408,155 L.A.I.F. BOND PROCEEDS 0.00 4/1/08 $ 5,408,155 3.78 100.00 $ 5,408,155 U U $ 5,438,956 Subtotal $ 5,438,956 3.78 $ 5,438,956 Local Government Investment Pool $ 16,124,317 C.A.M.P. 0.00 4/1/08 $ 16,124,317 3.29 100.00 $ 16,124,317 U AAA $ 3,053,282 C.A.M.P. (HOUSING) 0.00 4/1/08 $ 3,053,282 3.29 100.00 $ 3,053,282 U AAA $ 19,177,599 Subtotal $ 19,177,599 3.29 $ 19,177,599 Money Market Fund $ 40,865,911 WF ADVANTAGE GOVT 0.00 4/1/08 $ 40,865,911 2.75 100.00 $ 40,865,911 Aaa AAA $ 40,865,911 Subtotal $ 40,865,911 2.75 $ 40,865,911 "U"= Unrated Page 7 Palm Desert Redevelopment Agency Portfolio Holdings March 31, 2008 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S 8�P Money Market Fund $ 92,155,821 WF HERITAGE SELECT 0.00 4/1/08 $ 92,155,821 3.31 100.00 $ 92,155,821 Aaa AAA $ 92,155,821 Subtotal $ 92,155,821 3.31 $ 92,155,821 Money Market Fund $ 36,718,572 WF TREASURY PLUS 0.00 4/1/08 $ 36,718,572 1.63 100.00 $ 36,718,572 Aaa AAA $ 36,718,572 Subtotal $ 36,718,572 1.63 $ 36,718,572 Total Investments $ 273,340,859 $ 273,762,938 3.36 $ 273,937,852 Cash $ 1,189,767 HOUSING AUTH CHKG 0.00 4/1/08 $ 1,189,767 0.00 100.00 $ 1,189,767 U U ' $ 381,922 HOUSING AUTH TRUST 0.00 4/1/08 $ 381,922 0.00 100.00 $ 381,922 U U $ 1,571,690 Subtotal $ 1,571,690 $ 1,571,690 Total Cash and Investments $ 274,912,549 $ 275,334,628 $ 275,509,542 %of Portfolio Corporate Issuers (Market Value) CITIGROUP 1.48% JP MORGAN CHASE 3.68% FIRST UNION NAT BANK 0.73% WAL-MART 2.27% WELLS FARGO BANK 5.75% "U"= Unrated Page 8 Palm Desert Redevelopment Agency Portfolio Holdings March 31, 2008 Market Ratings Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P %of Portfolio Agency Issuers (Market Value) FED FARM CREDIT BANK 3.40% FED HOME LOAN BANK 8.34°/a FED HOME LOAN MTG CORP 2.30% FED NATIONAL MTG ASSOC 1.60% "U"= Unrated Page 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 Palm Desert City Council review the Statement of Investment Policy annually. For the month ended March 31, 2008,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 April 22,2008, �accLS. C�'u� C.C.�1.T: � 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% 0.0% 53601(c) CA State Debt 5 Years No Limit Not Authorized 53601(d) CA Local Agency Debt 5 Years No Limit NotAuthorized 53601(e) Federal A encies 5 Years No Limit 5 Years 30% 6% 19.9% 15.1% 53601(t� Bankers's Acceptances 180 Days 40% 180 Days 40% A-1 &P-1 - - 53601( ) 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% NotAuthorized 53601(j) Medium-Term Notes 5 Years 30% A 5 Years 30% A 30.3% 13.9% 53601(k) Mutual Funds 90 Days 20% AAA&Aaa 90 Days 20% (2) AAA 8�Aaa 23.5% 61.9% 53601(I) Trust Indenture Debt NotAuthorized 53601(m) Secured Bank Deposits 5 Years No Limit NotAuthorized 53601(k) Local Government AAA&Aaa AAA 8�Aaa Investment Pools 90 Days 20% or Advisor 90 Days 20% (2) or Advisor 11.4% 7.0% 53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& NotAuthorized Securities AA(Security LAIF No Limit No Limit 0.0% 2.0% (1) The City loan to RDA,which is not a bond, has been approved by the Palm Desert City Council. 85.1% 100.0% (2) Maximum limit for mutual funds and local government investment pools, excluding bond proceeds. ' Certified California Municipa/Treasurer Page 10