HomeMy WebLinkAboutInvestment Report - April 2009 CITY OF PALM DESERT
���-�
� �
- FINANCE DEPARTMENT
INTEROFFICE MEMORANDUM
TO: RACHELLE KLASSEN, CITY CLERK
FROM: NIAMH ORTEGA, RECORDING SECRETARY�'�
DATE: July 23, 2009
SUBJECT: COMPLIANCE ANALYSIS AND INVESTMENT REPORTS
Please find attached the Compliance Analysis and Investment Reports forwere presented
and approved at the May and June meetings of the Audit, Investment and Finance
Committee for the months of April and May 2009. Please include the report on the
upcoming agenda for review and acceptance by City Council.
Also included are the minutes of the April and May meetings for acceptance by the City
Council.
Please feel free to contact me at Ext. 382 if you have any questions. Thank you.
nmo
Attachment (as noted) CITY COUNCILACTION
API'ROVED I3[�.�l�D
R(:CEIVED��� t)T�[F:it
� r � F� I� S`t �DA 1l�I�rT[iVG DATE ��-" 7- ,
'.�'i 4� � AYF,S: � F�'� i � .
��t�,__ � ' `Z 7_�'� -- NOE4:_11�c�/)r�
I AI3��;NT: U�1�-
V��t���-�:�!�' C�s__��t�=L►��...�___._.. AI3STAIN: �
t�riginai ori;il� ��itri �;itu �Pe4k's C7`fi�� VEltil�It?I) 13Y: L� r �
Oi•igina! on File with City Clerk's Uffice
G:\FINANCE\NIAMH ORTEGA\INVESTMENT COMMITTEE\MEMOS\RKLASSENINVREPORT.WPD
�� Cfty vf Palm!?ese�# ,,�,..�.,, � ;
City and:R�devetopme�nt Ager}r�y f�t�rtfc���
CUMP�.1�441�ICE ANALYSIS ANa IN1/E�'CIV��I�#'C'f��t�C�RT
Apri12049
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 June 24. No change in interest rates is expected.
Over the last 12 months, consumer prices have fallen at the fastest rate since 1955. The U.S. Government is attempting to
address this by"reflating"the economy with $1 trillion. There is a real risk that when the economy eventually rebounds, a
high level of inflation may appear. The U.S. Treasury Yield Curve is showing an unusually steep slope between 2-Year and
10-Year Treasuries, suggesting a sharp increase in interest rates due to future inflation. In the meantime, the U.S.
economy is struggling with falling home prices, weak consumer spending, soaring unemployment, and rising credit card
delinquencies. When a recovery does occur,job growth may be feeble since small businesses, which are the principal
engine of job creation, will be struggling with tight credit conditions and future taxes that the Obama Administration plans
to impose, starting in 2011.
The U.S. appears to be on the same economic path as Japan, which still has a depressed economy after 20 years. The
Japanese did seven stimulus bills, and financially propped up companies that were not competitive. In the case of Chrysler,
the U.S. Government ignored federal bankruptcy law, and proposed transferring majority ownership in Chrysler to unsecured
debtors (UAW)who would be paid 43 cents on the dollar, while pressuring secured creditors (bondholders)to accept 28
cents on the dollar. In the"new" Chrysler, there will be no private U.S. capital in the ownership structure.
��s �'�� c.c.�r
City Treasurer
PORTFOLIO STATISTICS
Dollars in Thousands
Apr-09 Mar-09 FEB-09 JAN-09 DEC-08 NOV-08
CITY
Month-End Book Value""` $ 217,963 $ 216,674 $ 219,469 $ 212,738 $ 199,053 $ 213,607
Month-End Market Value"*` $ 218,619 $ 216,589 $ 218,243 $ 213,002 $ 199,922 $ 213,168
Paper Gain(Loss) $ 656 $ (85) $ (1,226) $ 264 $ 869 $ (439)
Prior Year Book Variance $ (4,768) $ (15,800) $ (7,452) $ (18,677) $ (38,071) $ (27,138)
Interest Earnings $ 360 $ 460 $ 443 $ 430 $ 471 $ 529
Yield-To-Maturity 2.09% 2.43°/a 2.34% 2.55% 2.87°/a 3.04%
Weighted Maturity(Days) 329 324 419 454 490 463
Effective Duration 0.29 0.36 0.42 0.47 0.54 0.53
RDA
Month-End Book Value*"* $ 252,527 $ 268,377 $ 270,416 $ 281,273 $ 251,852 $ 244,674
Month-End Market Value**" $ 253,785 $ 269,503 $ 271,497 $ 282,566 $ 253,288 $ 245,564
Paper Gain(Loss) $ 1,258 $ 1,126 $ 1,081 $ 1,293 $ 1,436 $ 890
Prior Year Book Variance $ (9,242) $ (7,168) $ (9,283) $ (4,674) $ 877 $ (5,516)
Interest Earnings $ 219 $ 259 $ 283 $ 268 $ 287 $ 304
Yield-To-Maturity 1.05% 1.07% 1.29% 1.25% 1.40% 1.51%
Weighted Maturity(Days) 217 205 235 226 256 272
Effective Duration 0.16 0.17 0.18 0.19 0.24 0.26
� """` Omits SLGSs.
City of Palm Desert-- Portfolio Characteristics
� April 30, 2009
Dollars in Thousands
...... .................... _....... .................
Aqeinq Interval Market Value
< 1 M $ 99,234 General Fund Ageing
<2M -
<3M 2,055 100 -�----�--------- - --_--�
<6M 8,143 $� ,
< 1 YR 12,316 0 63
<2YR 27,200 0 60
<3YR 7,463 0 40 1�
<4YR ' a 20 � 5 $ 5 p 0 0
<5YR - �
>5YR - �
< 1M <2M <3M <6M < < < < < >
Total: $ 156,411 1YR 2YR 3YR 4YR 5YR 5YR
___.�
i
Ratinqs* Market Value �I Credit Quality qqq
AAA $ 93,818 45%
AA 25,432 , �
A 6,618 ' 12%
Unrated"" 83,039 ' Unrated*�
40% A
Total: $ 208,907 30�0
Sector Market Value ', Asset Allocation
MTNs CAMP
MMF $ 32,448 �5��a 23%
Agencies 25,851
MTNs 32,050
CAMP 35,519 �� Agencies '�r RDA Loan
� 12% `�� °
RDA Loan 22,655 ���� � 11/o
GMRA 30,215 MMF GMRA ,
LAIF 30,169 ', �so�o 14%
CP - ' LAIF
Total: $ 208,907 14%
Month Citv Yield LAIF Yield Variance PerFormance
May08 3.88 3.07 0.81
Jun 3.75 2.89 0.86 4.0 ---_------------
Jul 3.69 2.88 0.82 ', 3.5
Aug 3.65 2.78 0.87 '
Sep 3.70 2.77 0.93 � 3.0
Oct 3.27 2.71 0.56 d 2 5
Nov 3.04 2.57 0.47 ' }
Dec 2.87 2.35 0.52 ' 2A
Jan09 2.55 2.05 0.51 1.5
Feb 2.36 1.87 0.50 May08Jun Jul Aug Sep Oct Nov DecJan09 Feb Mar Apr
Mar 2.17 1.82 0.35
Apr 2.09 1.61 0.49 �' ���� s � ,_�. ■�:;,� ���.��
'` Standard and Poors
� "" LAIF, and City Loan to RDA Page 2
City of Palm Desert
Portfolio Holdings
April 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P
Medium-Term Notes
$ 3,795,000 BANK OF AMERICA 5.38 8/15/11 $ 3,901,361 4.05 97.60 $ 3,704,053 A2 A
$ 3,000,000 BANK OF AMERICA 4.25 10/1/10 $ 3,042,467 3.20 97.14 $ 2,914,212 A2 A
$ 2,035,000 GENERAL ELECTRIC 4.88 10/21/10 $ 2,015,089 5.63 101.69 $ 2,069,353 Aa2 AA+
$ 1,891,000 GENERAL ELECTRIC 6.88 11/15/10 $ 1,922,154 5.65 104.78 $ 1,981,471 Aa2 AA+
$ 2,000,000 GENERAL ELECTRIC 6.13 2/22/11 $ 2,014,400 5.67 103.79 $ 2,075,704 Aa2 AA+
$ 3,965,000 GENERAL ELECTRIC 4.88 10/21/10 $ 4,056,248 3.23 101.69 $ 4,031,933 Aa2 AA+
$ 2,000,000 WACHOVIA 7.80 8/18/10 $ 2,066,197 5.02 102.27 $ 2,045,314 A1 AA
$ 2,000,000 WAL-MART 6.88 8/10/09 $ 2,009,716 4.93 101.50 $ 2,029,968 Aa2 AA
$ 3,000,000 WAL-MART 6.88 8/10/09 $ 3,031,876 2.90 101.50 $ 3,044,952 Aa2 AA
$ 4,000,000 WELLS FARGO BANK 6.38 8/1/11 $ 4,098,952 5.13 102.23 $ 4,089,052 A1 AA
$ 2,000,000 WELLS FARGO BANK 4.63 8/9/10 $ 1,989,281 5.09 100.81 $ 2,016,276 A1 AA
$ 2,020,000 WELLS FARGO BANK 4.20 1/15/10 $ 2,009,774 4.96 101.36 $ 2,047,537 A1 AA
$ 31,706,000 Subtotal $ 32,157,514 4.43 $ 32,049,825
Federal Agencies--Coupon
$ 3,000,000 FED FARM CREDIT BANK 4.78 5/3/10 $ 3,004,697 4.61 103.88 $ 3,116,250 Aaa AAA
$ 3,000,000 FED FARM CREDIT BANK 4.78 5/3/10 $ 3,004,697 4.61 103.88 $ 3,116,250 Aaa AAA
$ 3,000,000 FED HOME LOAN BANK 4.38 9/11/09 $ 2,995,117 5.59 101.50 $ 3,045,000 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 3.50 11/3/09 $ 1,976,919 5.96 101.50 $ 2,030,000 Aaa AAA
$ 2,033,000 FED HOME LOAN MTG CORP 4.25 7/15/09 $ 2,030,641 4.87 100.84 $ 2,050,154 Aaa AAA
$ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15/09 $ 2,039,020 4.87 102.16 $ 2,093,183 Aaa AAA
$ 2,000,000 FED HOME LOAN MTG CORP 4.13 11/18/09 $ 1,992,517 4.88 101.95 $ 2,039,070 Aaa AAA
$ 2,062,000 FED HOME LOAN MTG CORP 4.13 7/12/10 $ 2,044,005 5.47 104.00 $ 2,144,480 Aaa AAA
$ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15/09 $ 2,031,147 5.50 102.16 $ 2,093,183 Aaa AAA
$ 2,000,000 FEDERAL NAT MTG ASSOC 4.63 10/28/09 $ 1,997,712 4.88 102.00 $ 2,040,000 Aaa AAA
$ 2,000,000 FEDERAL NAT MTG ASSOC 4.25 8/15/10 $ 1,970,810 5.47 104.16 $ 2,083,126 Aaa AAA
$ 25,193,000 Subtotal $ 25,087,283 5.13 $ 25,850,696
Local Agency Investment Pool
$ 30,168,974 L.A.I.F. 0.00 5/1/09 $ 30,168,974 1.61 100.00 $ 30,168,974 U U
$ 30,168,974 Subtotal $ 30,168,974 1.61 $ 30,168,974
Local Agency Investment Pool
$ 35,461,508 C.A.M.P. 0.00 5/1/09 $ 35,461,508 0.75 100.00 $ 35,461,508 U AAA
$ 57,197 C.A.M.P. (DESERT WILLOW) 0.00 5/1/09 $ 57,197 0.75 100.00 $ 57,197 U AAA
$ 35,518,705 Subtotal $ 35,518,705 0.75 $ 35,518,705
Money Market Fund
$ 32,449,172 WF TREASURY PLUS 0.00 5/1/09 $ 32,449,172 0.00 100.00 $ 32,449,172 Aaa AAA
$ 32,449,172 Subtotal $ 32,449,172 0.00 $ 32,449,172
"U"= Unrated Page 3
City of Palm Desert
Portfolio Holdings
April 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S8�P
Government Managed Rate Account
$ 30,214,684 UNION BANK 0.00 5/1/09 $ 30,214,684 1.77 100.00 $ 30,214,684 U U
$ 30,214,684 Subtotal $ 30,214,684 1.77 $ 30,214,684
City of Palm Desert •
$ 22,655,000 CITY OF PALM DESERT 0.00 5/1/39 $ 22,655,000 1.61 100.00 $ 22,655,000 U U
$ 22,655,000 Subtotal $ 22,655,000 1.61 $ 22,655,000
Total Investments
$ 207,905,534 $ 208,251,331 2.09 $ 208,907,055
Cash
$ 7,390,520 CITY MAIN CHKG 0.00 5/1/09 $ 7,390,520 0.00 100.00 $ 7,390,520 U U
$ 1,963,741 DESERT WILLOW CHKG 0.00 5/1/09 $ 1,963,741 0.00 100.00 $ 1,963,741 U U
$ 357,907 RECREATIONAL FAC CHKG 0.00 5/1/09 $ 357,907 0.00 100.00 $ 357,907 U U
$ 9,712,169 Subtotal $ 9,712,169 $ 9,712,169
Total Investments and Cash
$ 217,617,703 $ 217,963,500 $ 218,619,223
%of Portfolio
Corporate Issuer (Market Value)
BANK OF AMERICA 3.03%
GENERAL ELECTRIC 4.65%
WACHOVtA 0.94%
WAL-MART 2.32%
WELLS FARGO BANK 3.73%
"U"= Unrated Page 4
City of Palm Desert
Portfolio Holdings
April 30, 2009
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 2.85%
FED HOME LOAN BANK 2.32%
FED HOME LOAN MTG CORP 4.77%
FEDERAL NAT MTG ASSOC 1.89%
"U"= Unrated Page 5
Palm Desert Redevelopment Agency-- Portfolio Characteristics
� April 30, 2009
Dollars in Thousands
Aqeinq Interval Market Value portfolio Ageing w/o SLGSs
< 1 M $ 49,672
<2M -
<3M 2,026 100
<6M 15,980 � 80
< 1YR 13,629 0 70
<2YR 18,698 0 50 50
40
< 3YR - 0 30 16 14 19
<4YR - a 20
<5YR _ 10 � 2 0 0 0 0
0
>5YR ' <1 M <2M <3M <6M <1 YR<2YR<3YR<4YR<5YR>5YR
Total: $ 100,005
�
Quality* Market Value Credit Quality
AAA $ 221,116 A
AA 19,937 �% �
87%
A -
Unrated*" 11,755 Unrated"
5% AA
Total: $ 252,808 8%
� Sector Market Value Asset Allocation
MMF $ 150,550
Agencies 30,498 MMF
MTNs 19,937 59/o
CAMP 40,068 Agen�cies
12/o
LAIF 11,755 LAIF
CP - 5% CAMP MTNs
Treasuries - 16% $%
Total: $ 252,808
�
Month RDA Yield LAIF Yield Variance Performance
May08 3.14 3.07 0.06
Jun 3.09 2.89 0.20 3.5
Jul 3.08 2.79 0.29
Aug 3.05 2.78 0.27
; 2.6
Sep 3.18 2.77 0.41 �
Oct 1.60 2.71 -1.11 �
Nov 1.51 2.57 -1.06 r �•�
Dec 1.40 2.35 -0.95
Jan09 1.26 2.05 -0.79 p.g
Feb 1.29 1.87 -0.58 May08Jun Jul Aug Sep Oct Nov DecJan09Feb Mar Apr
Mar 1.07 1.82 -0.75
Apr 1.05 1.61 -0.56 ■LAIF Yield ■RDA Yield
* Standard and Poors
*` LAIF Page 6
Palm Desert Redevelopment Agency
Portfolio Holdings
April 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P
Medium-Term Notes
$ 3,000,000 WAL-MART 6.88 8/10/09 $ 3,016,457 4.76 101.50 $ 3,044,952 Aa2 AA
$ 3,000,000 WAL-MART 4.13 7/1/10 $ 3,040,781 2.91 102.73 $ 3,081,765 Aa2 AA
$ 13,625,000 WELLS FARGO BANK 4.20 1/15/10 $ 13,736,223 3.00 101.36 $ 13,810,736 A1 AA
$ 19,625,000 Subtotal $ 19,793,460 3.25 $ 19,937,453
Federal Agencies--Coupon
$ 2,000,000 FED FARM CREDIT BANK 6.45 10/7/09 $ 2,012,300 4.88 102.66 $ 2,053,226 Aaa AAA
$ 2,000,000 FED FARM CREDIT BANK 4.75 8/3/09 $ 1,999,440 4.87 101.16 $ 2,023,126 Aaa AAA
$ 4,900,000 FED FARM CREDIT BANK 4.90 9/22/10 $ 4,916,327 4.65 105.19 $ 5,154,188 Aaa AAA
$ 4,500,000 FED HOME LOAN BANK 4.38 9/11/09 $ 4,492,675 5.59 101.50 $ 4,567,500 Aaa AAA
$ 2,005,000 FED HOME LOAN BANK 3.88 7/24/09 $ 2,000,733 4.89 100.84 $ 2,021,918 Aaa AAA
. $ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,978,515 5.49 106.63 $ 2,132,500 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,978,229 5.50 106.63 $ 2,132,500 Aaa AAA
$ 2,000,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 2,032,254 5.54 107.44 $ 2,148,750 Aaa AAA
• $ 3,734,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 3,794,329 5.54 107.44 $ 4,011,716 Aaa AAA
$ 4,155,000 FED NATIONAL MTG ASSOC 6.63 9/15/09 $ 4,179,289 4.89 102.34 $ 4,252,385 Aaa AAA
$ 29,294,000 Subtotal $ 29,384,091 5.16 $ 30,497,809
Local Government Investment Pool
$ 11,732,687 L.A.I.F. 0.00 5/1/09 $ 11,732,687 1.61 100.00 $ 11,732,687 U U
$ 21,894 L.A.I.F. (HOUSING) 0.00 5/1/09 $ 21,894 1.61 100.00 $ 21,894 U U
$ 11,754,580 Subtotal $ 11,754,580 1.61 $ 11,754,580
Local Government Investment Pool
$ 37,962,908 C.A.M.P. 0.00 5/1/09 $ 37,962,908 0.75 100.00 $ 37,962,908 U AAA
$ 2,105,079 C.A.M.P. (HOUSING) 0.00 5/1/09 $ 2,105,079 0.75 100.00 $ 2,105,079 U AAA
$ 40,067,988 Subtotal $ 40,067,988 0.75 $ 40,067,988
Money Market Fund
$ 150,549,963 WF TREASURY PLUS 0.00 5/1/09 $ 150,549,963 0.00 100.00 $ 150,549,963 Aaa AAA
$ 150,549,963 Subtotal $ 150,549,963 0.00 $ 150,549,963
Total Investments
$ 251,291,531 $ 251,550,082 1.05 $ 252,807,793
Cash
$ 573,262 HOUSING AUTH CHKG 0.00 5/1/09 $ 573,262 0.00 100.00 $ 573,262 U U
$ 403,758 HOUSING AUTH TRUST 0.00 5/1/09 $ 403,758 0.00 100.00 $ 403,758 U U
$ 977,020 Subtotal $ 977,020 0.00 $ 977,020
• "U"= Unrated Page 7
Palm Desert Redevelopment Agency
Portfolio Holdings
April 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P
Total Investments and Cash
$ 252,268,551 $ 252,527,102 $ 253,784,813
%of Portfolio
Corporate Issuers (Market Value)
WAL-MART 2.41%
WELLS FARGO BANK 7.86%
%of Portfolio
Agency Issuers (Market Value)
FED FARM CREDIT BANK 3.64%
FED HOME LOAN BANK 428%
FED HOME LOAN MTG CORP 2.43%
FED NATIONAL MTG ASSOC 1.68%
- "U"= Unrated Page 8
- 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 April 30, 2009,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 May 26,2009,
��s G��ao� c.c.,y 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)
53632 c) Savings Accounts No Limit No Limit No Limit No Limit 14.5% 0.0%
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 Nof Authorized
53601(e) Federal Agencies 5 Years No Limit 5 Years 30% 6% 12.1% 11.7%
53601( Bankers's Acceptances 180 Days 40% 180 Days 40% A-1 &P-1 - -
53601( Commercial Paper 270 Da s 25% A-1+or P-1 270 Days 25% A-1+or P-1 0.0% 0.0%
53601(h) Ne otiable CDs 5 Years 30% 5 Years 30% AA-or Aa3 - -
53601(i) Repos 1 Year No Limit 30 Days 20% AAA 8�Aaa - -
53601(i) Reverse Repos 92 Days 20% Nof Authorized
53601 Q) Medium-Term Notes 5 Years 30% A 5 Years 30% A 15.4% 7.9%.
53601(k) Mutual Funds 90 Days 20% AAA&Aaa 90 Days 20% (2) AAA&Aaa 15.6% 59.9%
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 17.1% 15.9%
53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& Not Aufhorized
Securities AA(Security
16429.1(b) LAIF No Limit No Limit 14.5% 4.7%
(1) The City loan to RDA,which is not a bond, has been approved by the Palm Desert City Council. 89.1% 100.0%
� (2) Maximum limit for mutual funds and local government investment pools,excluding bond proceeds.
"` Certified California Municipa/Treasurer Page 9