HomeMy WebLinkAboutInvestment Reports Sept, Oct, & Nov 2009CITY OF PALM DESERT
FINANCE DEPARTMENT
INTEROFFICE MEMORANDUM
TO: RACHELLE KLASSEN, CITY CLERK
FROM: NIAMH ORTEGA, RECORDING SECRETARII'�
DATE: DECEMBER 28, 2009
SUBJECT: COMPLIANCE ANALYSIS AND INVESTMENT REPORTS
Please find attached the Compliance Analysis and Investment Reports for were presented
and approved at the recent meetings of the Audit, Investment and Finance Committee for
the months of September, October and November 2009. Please include the report on the
upcoming agenda for review and acceptance by City Council.
Also included are the minutes of the September, October and November 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)
A Pia^� rile BY RDA (`-5-0�
ON 1-14-,D-Olc)
VERIFIED BY rc'h
J
Original on file with City Clerk's Office
CITY COUNCIL ACTION
APPROVED DENIED
RECEIVED t Fi Ie OIll ER
MEETING DATE / /`/ �C'/o y
AYES•41) mile fjusr; 1 1./p-Ye9el,,1 /f
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ABSENT: AI Una
ABSTAIN: AI n✓lC
VERIFIED BY: knYG)s
Original on File with City Cleric's Office
Jo-
G:\FINANCE\NIAMH ORTEGA\INVESTMENT COMMITTEE\MEMOS\RKLASSENINVREPORT.WPD
STATEMENT OF COMPLIANCE
The investment portfolios of the City of Palm Desert("City")and the Palm Deserl Redevelopment Agency("RDA")are
governed by federal, state, and local law. The City Treasurer's"Statement of Investment Policy"is more reshictive than the
California Government Code. The Palm Desert Audit, Imestment, and Finance Committee and the Palm Desert City
Councii review the Statement of Imestment Policy annually.
For the month ended Seplember 3Q 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 sufficienl cash to f nance the operations of the City of Palm Desert
and the Palm Deserl 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 signifcant, unexpected cash requirements.
Interactive Data Corporation provided the data that was used to calculate the market value of all sewrities in the Ciry 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 October 27, 2009,
,�auLs Gcl�aonf c.c.M.r. *
City Treasurer
SUMMARY OF AUTHORIZED INVESTMENTS
California Govemment Code City Investment Policy
CA Govt Maximum Maximum Quality Maximum Maximum �uality %of City %of RDA
Code Investment Category Maturity Limit S8P/Mdys Maturity Limit S&P/Mdys Portfofio Portfolio
53607(a) Palm Desert Bonds 5 Years No Limit 0.0% 0.8%
53632(c) Savings Accounts No Limit No Limit No Limit No Limit 29.0% 0.0%
53601(b) U.S.Treasuries 5 Years No Limit 5 Years No limit 0.0°/ 0.0%
53601(c) GA State Debt 5 Years No Limit Not Authorized
53601(d) CA Local Agency Debt 5 Years No Limil Not Authorized
53601(e) Federal Agencies 5 Years No Limit 5 Years 30% 6% 8.8% 6.3%
53601(f) Bankers's Acceptances 180 Days 40% 180 Days 40% A-1 & P-1 - -
53601(g) CommercialPaper 270Days 25°/ A-1+orP-1 270Days 25% A-1+orP-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) ReverseRepos 92Days 20% NotAuthorized
53601Q) Medium-Term Notes S Years 30% A S Years 30°/ A 11.8% 6.3%
53601(k) Mutual Funds 90 Days 20% AAA 8 Aaa 90 Days 20% (2) AAA&Aaa 13.40� p�go�a
53601(I) Trust Indenture Debt Not Authorized
53601(m) Sewred Bank Deposits 5 Years No Limit Not Authorized
53601(k) Local Government AAA 8 Aaa AAA&Aaa
Investment Pools 90 Days 20% or Advisor 90 Days 20°/(2) or Advisor 11.2°/ 9.1°/
53601(n) Mortgage-Backed 5 Years 20°/ A(Issuer)& NotAuthorized
Securities AA(Security
16429.1(b) IAIF No Limit No Limit 15.9°/a 49.6%
(1) The City loan to RDA,which is not a bond, has 6een approved by the Palm Desert City Council. 90.1°/ 100.0°/
(2) The City Energy Independence Program has been approved by the Palm Desert City Council.
(3) Maximum limit for mutual funds and local overnment investment pools, excluding bond proceeds.
' Certi(ied Califomia Municipal Treasurer Page 9
��� City of Palm Desert ��
� � City and Redevelopment Agency Portfolios � �
� COMPL�ANCE ANALYSIS AND INVESTMENT REPORT
� September 2009 �
�� -
Paul S. Gibson, C.C.M.T., Treasurer
Thomas W. Jeffrey, J.D., M.B.A., Deputy City Treasurer
The Federal Open Market Committee (FOMC) met on September 23, and left short-term interest rates unchanged. The
FOMC commented that it expected inflation to be subdued for some time. This is borne out by the long end of Ihe yield
curve which has flattened due to lower inflationary expectations. The next FOMC meeting will be on November 3-4.
The fragility of the U.S. "economic recovery"was underscored by the September job loss report which was much worse
than expected. ARhough the U.S. Govemment reported that national unemployment had jumped to 9.8%, the Los Ange/es
Times calculated that if unemployment and underemployment were added together, then the actual rete would be 17%.
A prominent economist recently noted that a "recession" is typically characterized by inventory cycles where 80% of the
decline in GDP is due to de-stocking in the manufacturing sector. A "depression", in contrast, is characterized by balance
sheet compression and deleveraging in the form of debt elimination, asset liquidation, and rising savings rates.
Federal regulators expect the cost of U.S. bank failures to be about$100 billion over the next four years. The Federal
Deposit Insurance Corporation (FDIC) is currently in the red, and is expected to remain there through 2012. The next wave
of bank losses will probably come from commercial real estate. 800 banks have more than half of their loan portfolio in
commercial real estate. Many of these banks have insufficient reserves set aside for losses on these loans. Most of the
"toxic" loans are interest-only loans.
vartiLS Ci�baorr, c.c.M.r.
City Treasurer
PORTFOLIO STATISTICS
Dollarsin Thousands
SEP-09 . AUG-09 JUL-09 JUN-09 May-09 Apr-09
CITY
Month-End Book Value'"` $ 232,393 $ 228,398 $ 226,460 $ 228,948 $ 224,289 $ 217,963
Month-End Market Value"' $ 233,526 $ 229,602 $ 227,587 $ 230,005 $ 225,317 $ 218,619
PaperGain (Loss) $ 1,733 $ 1,204 $ 1,127 $ 1,057 $ 1,028 $ 656
PriorYearBookVariance $ 21,716 $ 7,960 $ 3,786 $ (2,231) $ (457) $ (4,768)
Interest Earnings $ 322 $ 332 $ 356 $ 366 $ 360 $ 360
Yield-To-Maturity 1.74% 1 J9% 1.90% 2.03% 2.04% 2.09%
Weighted Maturity(Days) 253 282 297 306 319 329
Effective Duration 0.18 020 022 024 0.27 029
RDA
Month-End Book Value"` $ 265,942 $ 275,874 $ 284,220 $ 287,291 $ 293,720 $ 252,527
Month-End Market Value"` $ 266,805 $ 276,824 $ 285,231 $ 288,384 $ 294,940 $ 253,785
PaperGain(Loss) $ 863 $ 950 $ 1,011 $ 1,093 $ 1,220 $ 1,258
PriorYear600kVariance $ 8,557 $ (8,260) $ (4,767) $ 1,931 $ (5,751) $ (9,242)
Interest Earnings $ 227 $ 277 $ 308 $ 307 $ 234 $ 219
Yield-To-Maturity 0.95°/ 1.19% 1.31% 1.30°/ 1.06% 1.05%
Weighted Maturity(Days) 192 226 236 243 187 217
Effective Duration 0.19 0.20 020 0.22 0.13 0.76
'"` Omits SLGSs.
City of Palm Desert-- Portfolio Characteristics
September 30, 2009
Dollarsin Thousands
Aqeing Interval Market Value �
< 1 M $ 133,337 Generel Fund Ageing� Y I
<2M 4,027 i
<3M 4,142 100 -
<6M 2,040 ^ 80 74
< 7YR 14,552 e
<2YR z��s�g o 60 i
o i
< 3YR - � 4a
< 4YR - a° �2 �
<5YR - 20 Z Z � 8 0 0 0 0
0
> 5YR -
TOtal: $ 779,676 ' iM <2M <3M <6M <iVR<2YR<3YR<4VR<5VR>5YR
Ratin s` MarketValue i� CreditQuality � AA
AAA $ 76,717 33% 9%
AA 20,790 A
3%
A 6,993
Unrated" 125,331 Unrated*'
Total: $ 229,831 55%
� Asset Allocation
Sector Market Value � CAMP RDA Loan
iNMF $ 30,644 23� 10%
Agencies 20,495 MTNs
MTNs 27,763 �Z�
CAMP 25,578 qgencies GMRA
RDA Loan 22,655 9% 29%
GMRA 66,238
LAIF 36,438 MMF
13% LAIF
CP ' ' 16%
Total: $ 229,831
Month Citv Yield LAIF Yield Variance I� Performance
Oct08 327 271 0.56
Nov 3.04 2.57 0.47 3.6 - �
Dec 2.87 2.35 0.52
Jan09 2.55 2.05 0.51 2.7
Feb 2.36 1.87 0.50
Mar 2.17 1.82 0.35 d 1�8
Apr 2.09 1.61 0.49 Y p g
May 2.04 1.53 0.51
Jun 2.03 1.38 0.65 o.a
Jul 1.90 1.04 0.86 Oct08Nov DecJan09Feb Mar Apr May Jun Jul Aug Sep
Aug 1]9 0.93 0.87 _..
Sep 174 076 0.96 ', ■�... . . . . o . ' �
' Standard and Poors
"` LAIF, and City Loan to RDA Page 2
City of Palm Desert
Portfolio Holdings
September 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 8I15/11 $ 3,881,999 4.05 10425 $ 3,956,451 A2 A
$ 3,000,000 BANK OF AMERICA 425 10/1/10 $ 3A29,977 3.20 101.27 $ 3,036,318 A2 A
$ 2,035,000 GENERAL ELECTRIC 4.88 10/21/10 $ 2,020,724 5.63 103.12 $ 2,098,461 Aa2 AA+
$ 1,891,000 GENERAL ELECTRIC 6.88 11/15/10 $ 1,913,719 5.65 105.56 $ 1,996,221 Aa2 AA+
$ 2,000,000 GENERAL ELECTRIC 6.13 2122111 $ 2,011,082 5.67 105.52 $ 2,110,300 Aa2 AA+
$ 3,965,000 GENERAL ELECTRIC 4.88 10/21I10 $ 4,030,423 323 103.12 $ 4,088,649 Aa2 AA+
$ 2,000,000 WACHOVIA 7.80 8/18I10 $ 2,044,935 5.02 105.43 $ 2,108,672 A1 AA
$ 4,000,000 WELLS FARGO BANK 6.38 S/1111 $ 4,080,627 5.13 107.16 $ 4,286,560 A1 AA
$ 2,OOQ000 WELLS FARGO BANK 4.63 8I9I10 $ 1,992,791 5.09 10329 $ 2,065,768 A1 AA
$ 2,020,000 WELLS FARGO BANK 420 1/15/10 $ 2,015,813 4.96 10079 $ 2,035,938 A1 AA
$ 26,706,000 Subtotal $ 27,022,090 4.57 $ 27,783,337
Agencies--Coupon
$ 3,000,000 FED FARM CREDIT BANK 478 5l3/10 $ 3,002,751 4.61 10263 $ 3,078,750 Aaa AAA
$ 3,000,000 FED FARM CREDIT BANK 478 Sl3/10 $ 3,002,751 4.61 102.63 $ 3,078,750 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 3.50 11/3/09 $ 1,995,942 5.96 10028 $ 2,005,626 Aaa AAA
$ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15I09 $ 2,045,703 4.87 10075 $ 2,064,368 Aaa AAA
$ 2,000,000 FED HOME LOAN MTG CORP 4.13 11/18/09 $ 1,998,215 4.88 100.49 $ 2,009,786 Aaa AAA
$ 2,062,000 FED HOME LOAN MTG CORP 4.13 7/12/10 $ 2,054,759 5.47 102.91 $ 2,121,928 Aaa AAA
$ 2,049,000 FED HOME LOAN MTG CORP 4.00 12I75/09 $ 2,043,102 5.50 10075 $ 2,064,368 Aaa AAA
$ 2,000,000 FED NATIONAL MTG ASSOC 4.63 10I28/09 $ 1,999,651 4.88 100.31 $ 2,006,250 Aaa AAA
$ 2,000,000 FED NATIONAL MTG ASSOC 425 8/75/10 $ 1,980,246 5.47 103.25 $ 2,065,000 Aaa AAA
$ 20,160,000 Subtotal $ 20,123,120 5.09 $ 20,494,825
Local Agency Investment Pool
$ 36,437,587 L.A.LF. 0.00 10/1I09 $ 36,437,587 076 100.00 $ 36,437,587 U U
$ 36,437,587 Subtotal $ 36,437,587 0.76 $ 36,437,587
Local Agency Investment Pool
$ 25,520,700 C.A.M.P. 0.00 1011/09 $ 25,520,700 0.38 100.00 $ 25,520,700 U AAA
$ 57,312 C.A.M.P. (DESERT WILLOW) 0.00 1011/09 $ 57,312 0.38 100.00 $ 57,312 U AAA
$ 25,578,012 Subtotal $ 25,578,012 0.38 $ 25,578,012
Money Market Fund
$ 30,643,781 WF ADVANTAGE GOVT 0.00 10/1I09 $ 30,643,781 0.00 100.00 $ 30,643,781 Aaa AAA
$ 30,643,781 Subtotal $ 30,643,781 0.00 E 30,643,781
Government Managed Rate Account
$ 66,238,363 UNION BANK 0.00 1011/09 $ 66,238,363 1.77 100.00 $ 66,238,363 U U
$ 66,238,363 Subtotal $ 66,238,363 1.77 8 66,238,363
"U"=Unrated Page 3
City of Palm Desert
Portfolio Holdings
September 30, 2009
Market Ratings
�
Par Value Issuer Coupon Maturity Cost YTM Price Value � Moody's�58P�
City Loanto RDA
$ 22,655,000 CITY OF PALM DESERT 0.00 10/1/39 $ 22,655,000 0.76 100.00 $ 22,655,000 U U
$ 22,655,000 Subtotal $ 22,655,000 076 $ 22,655,000
Total Imestments
5 228,418,743 $ 228,697,953 1.74 $ 229,830,905
Cash
$ 3,222,090 GTY MAIN CHECKWG 0.00 1011/09 $ 3,222,090 0.00 100.00 $ 3,222,090 U U
$ 389,196 DESERT WILLOW CHKG 0.00 1011/09 $ 389,196 0.00 100.00 $ 389,196 U U
$ 83,540 RECREATIONAL FAC CHKG 0.00 70/1/09 $ 83,540 0.00 100.00 $ 83,540 U U
$ 3,694,826 Subtotal $ 3,694,826 $ 3,694,826
Total Investments and Cash
$ 232,113,569 $ 232,392,779 $ 233,525,731
%of Portfolio
Corporete Issuers (Market Value)
BANK OF AMERICA 2.99%
GENERAL ELECTRIC 4.41%
WACHOVIA 0.90%
WELLS FARGO BANK 3.59%
"U"= Unrated Page 4
City of Palm Desert
Portfolio Holdings
September 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's 58P
%of Portfolio
Agency Issuers (Market Value)
FED FARM CREDIT BANK 2.64%
FED HOME LOAN BANK 0.86%
FED HOME LOAN MTG CORP 3.54%
FED NATIONAL MTG ASSOC 1.74%
"U"= Unrated Page 5
Palm Desert Redevelopment Agency-- Portfolio Characteristics
September30, 2009
Dollarsin Thousands
Aqeinq Interval Market Value
Portfolio Ageing wlo SLGSs
< iM $ 64,907
<2M -
<3M - 100
<6M 13,760 90 65
< tYR 14,373 °
0 60
<2YR 4,246 'o
<3YR - � 40
<4YR - a 20 14 14
< SYR . 0 0 4 0 0 0 2
0
> SYR 2,015 <�M <2M <3M <6M <1YR<2VR<3YR<4YR<5YR>5YR
Total: $ 99,241
Qualitv' Market Value �� I Credit Quality 6
AAA $ 117,768 �A
AA 76,809 qq�
q _ Unrated"
Unrated '" 131,580 A 50%
Total: $ 266,157 0�
� � AssetAlbcation q encies MTNs
Sector MarketValue � 9 6� CAMP
- MMF $ 74J20 6� 9�
Agencies 17,427
MTNs 16,809 LAIF
CAMP 24,207 MMF 15�
LAIF 39,115 28� EIP
EIP 2,015 ��
LAIF/Bond Proceeds 92,464
Treasuries - LAIF/Bond
Proceeds
Total: $ 266,157 35%
Month RDA Yield LAIF Yield Variance i ��Pertormance
Oct08 1.60 2.71 -1.11 ��
Nov 1.51 2.57 -1.06
Dec 1.40 2.35 -0.95 � 32
Jan09 126 2.05 -0.79 ,.., 2.4
Feb 129 1.87 -0.58 '=
Mar 1.07 1.82 -075 a 1�6
Apr 1.05 1.61 -0.56 } 0.8
May 1.06 1.53 -0.47
Jun 1.30 1.38 -0.08 OA .
Jul 1.31 1.04 027 OctO6Nov DecJan09Feb Mar Apr May Jun Jul Aug Sep
Aug 1.19 0.93 026
■LAIFYieltl aRDAvleld
Sep 0.95 076 0.19 �-
` Standard and Poors
'* LAIF Page 6
Palm Desert Redevelopment Agency
Portfolio Holdings
September 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S8P
Medium-Term Notes
$ 3,000,000 WAL-MART 4.13 7/1I10 $ 3,026,216 2.91 102.55 $ 3,076,461 Aa2 AA
$ 13,625,000 WELLS FARGO BANK 420 1/15I10 $ 13,67Q540 3.00 10079 $ 13,732,501 A1 AA
$ 16,625,000 Subtotal $ 16,696,756 2.98 $ 16,808,962
Federal Agencies--Coupon
$ 2,000,000 FED FARM CREDIT BANK 6A5 10/7/09 $ 2,000,473 4.88 100.10 $ 2,002,046 Aaa AAA
$ 4,900,000 FED FARM CREDIT BANK 4.90 9/22I10 $ 4,911,438 4.65 10422 $ 5,106,721 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,983,325 5.49 105.97 $ 2,119,376 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 4.88 3/11111 $ 1,983,103 5.50 105.97 $ 2,119,376 Aaa AAA
$ 2,000,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 2,022,460 5.54 106.03 $ 2,120,626 Aaa AAA
$ 3,734,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 3,776,070 5.54 106.03 $ 3,959,209 Aaa AAA
$ 76,634,000 Subtotal S 16,676,811 5.19 $ 17,427,354
Local Agency Investment Pool
$ 39,093,270 LA.LF. 0.00 1011/09 $ 39,093,210 076 100.00 $ 39,093,210 U U
$ 21,976 L.A.LF.(HOUSING) 0.00 1011/09 $ 21,976 076 700.00 $ 21,976 U U
$ 39,115,186 Subtotal $ 39,115,186 0.76 $ 39,115,186
Local Agency Investment Pool
$ 20,123,091 LA.LF./WELLS FARGO 0.00 10/1/09 $ 20,123,091 076 100.00 $ 20,123,091 U AA
$ 4,779,722 LA.LF./WELLS FARGO 0.00 10/1/09 $ 4,779,722 076 100.00 $ 4,779,722 U AA
$ 25,562,603 L.A.I.F./WELLS FARGO 0.00 10/1I09 $ 25,562,603 076 100.00 $ 25,562,603 U AA
$ 10,510,000 LA.I.F. I WELLS FARGO 0.00 10/1I09 $ 10,510,000 076 100.00 $ 10,510,000 U AA
$ 15,059,000 LA.LF. I WELLS FARGO 0.00 10/1I09 $ 15,059,000 0.76 100.00 $ 15,059,000 U AA
$ 16,430,000 L.A.I.F./WELLS FARGO 0.00 10/1I09 $ 16,430,000 076 100.00 $ 16,430,000 U AA
5 92,464,417 Subtotal $ 92,464,417 076 $ 92,464,417
Local Agency Investment Pool
$ 22,097,205 C.A.M.P. 0.00 10/1I09 $ 22,097,205 0.38 100.00 $ 22,097,205 U AAA
$ 2,109,295 C.A.M.P. (HOUSING) 0.00 10/1/09 $ 2,109,295 0.38 100.00 $ 2,109,295 U AAA
$ 24,206,500 Subtotal S 24,206,500 0.38 $ 24,206,500
Money MarketFund
$ 74,119,667 WF ADVANTAGE GOVT 0.00 1011/09 $ 74,119,667 0.00 100.00 $ 74,119,667 Aaa AAA
$ 74,119,667 Subtotal E 74,119,667 0.00 $ 74,119,667
Municipal Bonds
$ 2,075,000 ENERGY INDEP PROGRAM 3.00 9/2/29 $ 2,015,000 3.00 100.00 $ 2,015,000 U AA
$ 2,015,000 Subtotal S 2,015,000 3.00 $ 2,015,000
"U"= Unrated Page 7
Palm Desert Redevelopment Agency
Portfolio Holdings
September 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S8P
Total Investments
$ 265,179,770 $ 265,294,336 0.95 $ 268,157,086
Cash
$ 249,222 HOUSING AUTH CHKG 0.00 1011/09 $ 249,222 0.00 100.00 $ 249,222 U U
$ 398,719 HOUSING AUTH TRUST 0.00 10/1/09 $ 398,719 0.00 100.00 $ 398,719 U U
$ 647,941 Subtotal $ 647,941 0.00 $ 647,941
Total Investments and Cash
$ 265,827,711 $ 265,942,278 $ 266,805,021
%of Portfolio
Corporate Issuers (Market Value)
WAL-MART 1.15%
WELLSFARGO BANK 5.15%
%of Portfolio
Agency Issuers (Market Value)
FED FARM CREDIT BANK 2.66%
FED HOME IOAN BANK 1.59%
FED HOME LOAN MTG CORP 228%
"U"= Unrated Page 8
�� City of Palm Desert ��
� � City and Redevelopment Agency Portfolios � �1
�� COMPLIANCE ANALYSIS AND INVESTMENT REPORT � I
October 2009 �
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 November 4, and left short-term interest rates unchanged. While the
FOMC noted that economic activity had improved, it stated that conditions would probably warrant keeping the Federal
Funds Rate at a low level for an extended period of time. The next FOMC meeting will be on December 16.
After four quarters of contraction, U.S. Gross Domestic Product (GDP)grew by 3.5% in 3Q2009, driven largely by federal
spending. It is questionable whether this growth will be sustainable, however, once the federal stimulus ends. About 1.6%
of GDP growth, for example, came from auto sales that were accelerated by "cash for clunkers". Hiring plans and hours
worked remained depressed as businesses weighed the risks of health care reform, cap and trade legislation, and less
friendly business conditions.
In the near term (next 2 years), there will be deflationary pressure on pricing. This is currently symbolized by high
unemployment levels; an average work week that has fallen to 33 hours; and a manufacturing capacity utilization rate of
67%.
If the U.S. continues to follow the Japanese path of large government deficits, increased taxes, increased personal savings,
and limited bank credit, then economic stagnation may continue for a long time, especially in California.
PauLs ��7� c,c M.r.
City Treasurer
PORTFOLIO STATISTICS
Dollars in Thousands
OCT-09 SEP-09 AUG-09 JUL-09 JUN-09 May-09
cirr
Month-End Book Value"' $ 239,207 $ 232,393 $ 228,398 $ 226,460 $ 228,948 $ 224,289
Month-End Market Value"' $ 240,435 $ 233,526 $ 229,602 $ 227,587 $ 230,005 $ 225,377
PaperGain(Loss) $ 1,228 $ 1,133 $ 1,204 $ 1,127 $ 1.057 $ 1p26
PriorVearBookVariance $ 21,577 $ 21,716 $ 7,960 $ 3,786 $ (2,231) $ (457)
Interest Earnings $ 326 $ 322 $ 332 $ 356 $ 366 $ 360
Yield-To-Maturiry 1.69% 1.74% 1.79% 1.90% 2.03% 2.04%
Weighted Maturity(Days) 246 253 282 297 306 319
Effective Duration 0.17 0.18 020 022 0.24 0.27
RDA
Month-End Book Value"` $ 226,007 $ 265,942 $ 275,874 $ 284,220 $ 287,291 $ 293,720
Month-End Market Value"'" $ 226,811 $ 266,805 $ 276,824 $ 285,231 $ 288,384 $ 294,940
Paper Gain(Loss) $ 804 $ 863 $ 950 $ 1,017 $ 1,093 $ 1,220
PriorYearBookVariance $ (19,093) $ 8,557 $ (8,260) $ (4,767) $ 1,931 $ (5,751)
Interest Earnings $ 186 $ 227 $ 277 $ 308 $ 307 $ 234
Yield-To-Maturity 0.96% 0.95% 1.79% 1.31% 7.30% 1.06°/a
Weighted Maturity(Days) 214 192 226 236 243 187
ERective Duration 021 0.19 020 0.20 0.22 0.13
"' Omits SLGSs.
City of Palm Desert-- Portfolio Characteristics
October 31, 2009
Oollars in Thousands
Aqeinp laterval Market Vatue � �
< 1 M $ 145,180 General Fund Ageing �
<pM 4,176
<3M 2,033 i00 --- -_ _.
77
<6M - 80
< 1YR 23,797 e
<2YR 12.423 0 6�
<3YR - � 40
<4YR - a° 13
20 2 1 0 � o 0 0 0
< 5YR - p
>5YR -
Total: $
187,543 ��M <2M <3M <6M <1YR<2YR<3VR<4YR<5YR>5YR�
\
Ratins�s` Market Value �� Credit Quality qqq 9
qqq $ 71,597 32%
A
qq 20,838 3%
A 7.098
Unrated " 125,506 Unrated'"
56%
Total: $ 225,039
Sector Market Value � �Asset Allocation CAMP RDA Loan
MMF $ 29,633 23% 10%
Agencies 18,430 MTNs
MTNs 27,936 �2�
CAMP 23,534 Agencies GMR4
RDA Loan 22,655 8� 30%
GMRA 66,331
LAIF 36,520 MMF
CP - 13% LAIF
i6%
Total: $ 225,039
Month Citv Yield LAIF Yield Variance i���Performance �
Nov08 3.04 2.57 0.47
Dec 287 2.35 0.52 3.6 _..---I
Jan09 2.55 2.05 0.51
Feb 2.36 1.87 0.50 2.7
Mar 2.17 1.82 0.35 ^
Apr 2.09 1.61 0.49 d 1�8 �
May 204 1.53 0.51 � � 0.9
Jun 2.03 1.36 0.65
Jul 1.90 1.04 0.86 0.�
Aug 179 0.93 0.87 NovOeDecJan09Feb Mar Apr May Jun Jul Aug Sep Oct
Sep 174 0.76 0.98 .
Oct 1.69 0.65 1.05 � o' . . .... ■:.`..'"�"�
' Standard and Poors
"' LAIF, and City Loan to RDA Page 2
�
City of Palm Desert
Portfolio Holdings
October 31, 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 8/15111 $ 3,878,127 4.05 105.77 $ 4,014,116 A2 A
$ 3,000,000 BANK OF AMERICA 425 1011/10 $ 3,027,479 320 102.80 $ 3,083,916 A2 A
$ 2,035,000 GENERAL ELECTRIC 4.88 10121/10 $ 2,021,851 5.63 103.93 $ 2,115,035 Aa2 AA+
$ 1,891,000 GENERAL ELECTRIC 6.88 11/15I10 $ 7,912.032 5.65 106.04 $ 2,005,256 Aa2 AA+
$ 2,000,000 GENERAL ELECTRIC 6.13 2/22111 $ 2,010,418 5.67 105.84 $ 2,116,786 Aa2 AA+
$ 3,965,000 GENERAL ELECTRIC 4.88 10/21/10 $ 4,025,256 323 103.93 $ 4,120,939 Aa2 AA+
$ 2,000,000 WACHOVIA 7.80 8/78/10 $ 2,040,662 5.02 104.99 $ 2,099,758 A1 AA
$ 4,000,000 WELLS FARGO BANK 6.38 8/1/11 $ 4,076,963 5.13 107.18 $ 4,287,128 A1 AA
$ 2,000,000 WELLS FARGO BANK 4.63 8/9/10 $ 1,993,493 5.09 103.03 $ 2,060,576 A1 AA
$ 2,020,000 WELLS FARGO BANK 420 1/15I10 $ 2,017,021 4.96 100.63 $ 2,032,629 A1 AA
$ 26,706,000 Subtotal $ 27,003,324 4.57 $ 27,936,139
Agencies--Coupon
$ 3,000,000 FED FARM CREDIT BANK 4.78 5/3I10 $ 3,002,362 4.61 102.25 $ 3,067,500 Aaa AAA
$ 3,000,000 FED FARM CREDIT BANK 478 5/3/10 $ 3,002,362 4.61 10225 $ 3,067,500 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 3.50 11/3/09 $ 1,999,746 5.96 100.00 $ 2,000,000 Aaa AAA
$ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15I09 $ 2,047,040 4.87 100.44 $ 2,057,964 Aaa AAA
$ 2,OOQ000 FED HOME LOAN MTG CORP 4.13 11/18/09 $ 1,999.354 4.88 700.17 $ 2.003,358 Aaa AAA
$ 2,062,000 FED HOME LOAN MTG CORP 4.13 7/12/10 $ 2,056,910 5.47 102.63 $ 2,116,128 Aaa AAA
$ 2,049,000 FED HOME LOAN MTG CORP 4.00 12115/09 $ 2,045,493 5.50 100.44 $ 2,057,964 Aaa AAA
$ 2,000,000 FED NATIONAL MTG ASSOC 4.25 8(15I10 $ 1,982,134 5.47 103.00 $ 2,060,000 Aaa AAA
S 18,160,000 Subtotal S 18,135,401 S.N S 18,430,414
Local Agency Investment Fund
$ 36,519,992 L.A.LF. 0.00 11/1I09 $ 36,519,992 0.65 100.00 $ 36,519,992 U U
$ 36,519,992 Subtotal $ 36,519,992 0.65 $ 36,519,992
Local Agency Investment Fund
$ 23,526,812 C.A.M.P. 0.00 11/1I09 $ 23,526,812 0.30 100.00 $ 23,526,812 U AAA
$ 7,323 C.A.M.P. (DESERT WILLOW) 0.00 11/1/09 $ 7,323 0.30 100.00 $ 7,323 U AAA
S 23,534,135 Subtotal $ 23,534,135 0.30 $ 23,534,135
Money Market Fund
$ 29,632,425 WF ADVANTAGE GOVT MMF 0.00 1119/09 $ 29,632,425 0.01 100.00 $ 29,632,425 Aaa AAA
$ 29,632,425 Subtotal $ 29,632,425 0.01 $ 29,632,425
Government Managed Rate Account
$ 66,330,722 UNION BANK 0.00 11/1/09 $ 66,330,722 1.77 100.00 $ 66,330,722 U U
$ 66,330,722 Subtotal $ 66,330,722 1.77 $ 66,330,722
"U"= Unrated Page 3
City of Palm Desert
Portfolio Holdings
October 31, 2009
Market Ratings
o v i Issuer Coupon Maturity Cost YTM � Price � Value �Moody's� 5&P�
� _ __ __
City Loan to RDA
$ 22,655,000 CITY OF PALM DESERT 0.00 11/1/39 $ 22,655,000 0.65 100.00 $ 22,655,000 U U
$ 22,655,000 5ubtotal $ 22,655,000 0.65 $ 22,655,000
Total Investments
$ 223,539,274 $ 223,810,998 1.69 S 225,038,827
Cash
$ 14,697,912 CITY MAIN CHKG 0.00 11/1/09 $ 14,897,912 0.00 100.00 $ 14,897,972 U U
$ 370,255 DESERT WILLOW CHKG 0.00 11/1I09 $ 370,255 0.00 100.00 $ 370,255 U U
$ 128,140 RECREATIONAL FAC CHKG 0.00 1111/09 $ 128,140 0.00 100.00 $ 128,140 U U
$ 15,396,307 Subtotal $ 15,396,307 $ 15,396,307
S 238,934,581 $ 239,207,305 $ 240,435,134
%of Portfolio
Agency Issuers (Market Value)
BANK OF AMERICA 2.95�
GENERAL ELECTRIC 4.3��
WACHOVIA ��8��
WELLS FARGO BANK 3.49%
°/of Portfolio
Agency Issuers (Market Value)
FED FARM CREDIT BANK 2.55%
FED HOME LOAN BANK 0.83%
FED HOME LOAN MTG CORP 3.43%
FED NATIONAL MTG ASSOC 0.86%
"U"= Unrated Page 4
Palm Desert Redevelopment Agency-- Portfolio Characteristics
October 31, 2009
Dollars in Thousands
Aqeinq Interval Market Value
< 1 M � 39 P79 I Portfoiio Ageing w/o SLGSs`
<2M -
< 3M 13,710 100 �
<6M - 80 -
< 1YR 14,219 0 60 53
<2YR 4,228 'o
< 3YR - 0 40 19
19
<4YR - a 20
< SYR _ 0 0 6 0 � 0 3
0
> 5YR 2,015 <�M <2M <3M <6M <iVR<2YR<3YR<4YR<5YR>5YR
Total: $ 73,451
Qualitv' Market Value
/Credit Quality qq
7/
AAA 5 80,456
AA 16,783 AAA �
A _ 36% Unretetl"
Unrated"' 128,894 57�
A
Total: $ 226,133 0%
Sector Market Value � � Asset Allocation �
Agencies MTNsCAMP
MMF $ 60,660 �� 7%
Agencies 15,373 � �
MTNs 16,783 �nIF
17%
CAMP 2,208 MMF EIP
LAIF 39,204 27� 1%
EIP 2,015
LAIF/Bond Proceeds 89,690
LAIF/Bond
Treasuries - Pmceeds
Total: $ 226,133 40%
Manth RDA Yield LAIF Yield Variance � � Performance
Nov08 1.51 2.57 -1.06
Dec 1.40 2.35 -0.95
Jan09 126 2.05 -0.79 3'2
Feb 129 1.87 -0.58 2.4
Mar 1.07 1.82 -0.75 '=
Apr 1.05 1.61 -0.56 u �.s �
May 1.06 1.53 -0.47 � 0.8
Jun 1.30 1.38 -0.08
Jul 131 1.04 027 0.0
Aug 1.19 0.93 026 Nov08DecJan09Feb Mar Apr May Jun Jul Aug Sep Ocl
Sep 0.95 076 0.19 ' ■�niFv�em ■Ronneb
Oct 0.96 0.65 0.32 � -- �
` Standard and Poors
" LAIF Page 5
Palm Desert Redevelopment Agency
Portfolio Holdings
October 31, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S8P
Medium-Term Notes
$ 3,000,000 WAL-MART 4.13 7/1/10 $ 3,023,303 2.91 102.42 $ 3,072,729 Aa2 AA
$ 13,625,000 WELLS FARGO BANK 420 1/15/10 $ 13,657,403 3.00 100.63 $ 13,710,184 A1 AA
$ 16,625,000 Subtotal $ 16,680,707 2.98 $ 16,782,913
Federal Agencies•-Coupon
$ 4,900,000 FED FARM CREDIT BANK 4.90 9/22/10 $ 4,910,461 4.65 103.94 $ 5,092,938 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,984,287 5.49 105.69 $ 2,113,750 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 4.88 3/17/11 $ 1,984,078 5.50 105.69 $ 2,113,750 Aaa AAA
$ 2,000,000 FED HOME LOAN MTG CORP 6.88 9/15I10 $ 2p20,502 5.54 105.56 $ 2,171,250 Aaa AAA
$ 3,734,000 FED HOME LOAN MTG CORP 6.88 9/15I10 $ 3,772,347 5.54 105.56 $ 3,941,704 Aaa AAA
$ 14,634,000 Subtotal $ 14,671,674 5.23 $ 15,373,391
Local Government Investment Pool
$ 39,182,126 L.A.I.F. 0.00 11/1/09 $ 39,182,126 0.65 100.00 $ 39,182,126 U U
$ 22,026 L.A.I.F. (HOUSING) 0.00 11/1/09 $ 22,026 0.65 100.00 $ 22,026 U U
S 39,204,151 Subtotal S 39,204,157 0.65 $ 39,204,151
Local Government Investment Pool
$ 17,638,468 L.A.LF./WELLS FARGO 0.00 11/1/09 $ 17,638,468 0.65 100.00 $ 17,638,468 U AA
$ 4,790,535 L.A.I.F./WELLS FARGO 0.00 11/1/09 $ 4,790,535 0.65 100.00 $ 4,790,535 U AA
$ 25,175,995 L.A.I.F./WELLS FARGO 0.00 7111/09 $ 25,175,995 0.65 100.00 $ 25,175,995 U AA
$ 10,531,455 LA.I.F./WELLS FARGO 0.00 1111/09 $ 10,531,455 0.65 100.00 $ 10,531,455 U AA
$ 15,089,741 L.A.I.F.I WELLS FARGO 0.00 1111/09 $ 15,089,741 0.65 100.00 $ 75,089,741 U AA
$ 16,463,540 L.A.LF./WELLS FARGO 0.00 11/1/09 $ 16,463,540 0.65 100.00 $ 16,463,540 U AA
$ 89,689,734 Subtotal $ 89,689,734 0.65 $ 89,689,734
Local Government Investment Pool
$ 98,200 C.A.M.P. 0.00 1111/09 $ 98,200 0.30 100.00 $ 98,200 U AAA
$ 2,109,824 C.A.M.P.(HOUSMG) 0.00 1111/09 $ 2,109,824 0.30 100.00 $ 2,109,824 U AAA
S 2,208,024 Subtotal 5 2,208,024 0.30 $ 2,208,024
Money MarketFund
$ 60,859,876 WF ADVANTAGE GOVT MMF 0.00 1111/09 $ 60,859,876 0.01 100.00 $ 60,859,876 Aaa AAA
$ 60,859,876 Subtotal 5 60,859,876 0.01 $ 60,859,876
Municipal Bonds
$ 2,015,000 ENERGY INDEP PROGRAM 3.00 9l2/29 $ 2,015,000 3.00 100.00 $ 2,015,000 U AA
$ 2,015,000 Subtotal $ 2,015,000 3.00 $ 2,015,000
"U"= Unrated Page 6
Palm Desert Redevelopment Agency
Portfolio Holdings
October 31, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P
Total Investments
$ 225,235,786 $ 225,329,767 0.96 $ 226,133,089
Cash
$ 407,729 HOUSING AUTH TRUST 0.00 17/1/09 $ 407,729 0.00 100.00 $ 407,729 U U
$ 270,419 HOUSING AUTH CHKG 0.00 11/1/09 $ 27Q419 0.00 100.00 $ 27Q419 U U
E 678,148 Subtotal $ 678,148 $ 678,148
Totallnvestments and Cash
$ 225,913,934 $ 226,007,315 $ 226,811,238
%of PoMolio
Corporate Issuers (Market Value)
WAL-MART 1.35%
WELLS FARGO BANK 6.04%
°/of PoMolio
Agency Issuere (Market Value)
FED FARM CREDIT BANK 2.25%
FED HOME LOAN BANK 1.86°/
FED HOME LOAN MTG CORP 2.67%
"U"= Unrated Page 7
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 ihe Statement of Investment Policy annually.
For the month ended October 31, 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,lhe City Treasury should have suffcient cash to fnance 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 signifcant, unezpected cash requirements.
Interactive Data Corporation provided the data that was 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.
RespecBully Submitted on November 24, 2009,
v�s ��t�aori, c.c tii r. *
City Treasurer
SUMMARY OF AUTHORIZED INVESTMENTS
California Government Code City Investment Policy
CAGovt Maximum Maximum Quality Maximum Maximum Quality % ofCity %ofRDA
Code Investment Category Maturity Limit S&P/Mdys Maturity Limit 5&P/Mdys Portfolio Portfolio
53601(a) Palm Desert Bonds 5 Years No Limit 0.0°/ 0.9%
53632(c) Savings Accounts No Limit No Limit No Limit No Limit 29.6% 0.0%
53607(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 NotAuthorized
53601(d) CA Local Agency Debt 5 Years No Limit Not Authorized
53601(e) FederalAgencies SYears NOLimit 5Years 30% 6% 8.1% 6.5%
53607(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) NegotiableCDs 5Years 30% SYears 30% AA-orAa3 - -
53601(i) Repos 1 Year No Limit 30 Days 20% AAA&Aaa - -
53601(i) ReverseRepos 92Days 20% NotAuthorized
53601Q) Medium-TermNotes 5Years 30% A 5Years 30% A 12.1% 7.4%
53601(k) Mutual Funds 90 Days 20% AAA&Aaa 90 Days 20% (2) AAA&Aaa 132% 27.0%
53601(I) Trust Indenture Debt Not Authorized
53601(m) Secured Bank Deposits 5 Years No Limit Not Authorized
53601(k) Local Govemment AAA&Aaa AAA 8 Aaa
Investment Pools 90 Da s 20% or Advisor 90 Da s 20% (2) or Advisor 10.5% 1.0%
53601(n) Mortgage-Backed 5 Years 20% A Qssuer)& NotAutho�ized
Securities AA(Security
16429.1(b) LAIF No Limit No Limit 16.3% 572%
(1) The City loan to RDA, which is not a bond, has been approved by the Palm Desert City Council. 89.9°/ 100.0%
(2) The City Energy Independence Program has been approved by the Palm Desert City Council.
(3) Maximum limit for mutual funds and local govemment investment pools,excluding bond proceeds.
' Certi/ied California Municipal Treasurer Page 8
��� City of Palm Desert ���
� � City and Redevelopment Agency Portfolios ����
j COMPLIANCE ANALYSIS AND INVESTMENT REPORT
��,, / November 2009 ,�T
-�-!
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 on December 16 to review monetary policy. The FOMC is expected
to reaffirm lhat "... rates will remain at exceptionally low levels for an extended period". The FOMC, however, is beginning to
implemenl its "exit strategy" by removing some of the temporary liquidity measures that it put in place at the height of the
fnancial crisis. This anti-inflation strategy is designed to reduce the money supply gradually.
Deflation remains the key issue for now. The October 2009 Consumer Price Index decreased by 0.2% on a year-over-year
basis. Inflation is not expected to pose a problem in 2010.
The current U.S. economic situation might best be described as a "slatistical recovery". Wall Street is recovering, but Main
Street is noL While the banks are reporting profits, and paying off their TARP loans from the U.S. Government, they are
making only a small volume of loans to consumers and businesses. Businesses are not hiring; high levels of unemployment
continue; and consumers are increasing their savings rate. Consumers are also paying off an unprecedented amount of
credit card debt. Ageing baby boomers, who drove the last two asset bubbles, are deleveraging as they recognize that they
�cannot recoup their losses from last year's market crash. The 55+ age group is also the fastest-growing employment
segment. Accordingly, consumer spending, which typically drives an economic recovery, is relatively frail.
��s ��l�aon, c.c M r.
City Treasurer
PORTFOLIO STATISTICS
Dollars in Thousands
NOV-09 OCT-09 SEP-09 AUG•09 JUL-09 JUN-09
CITY
Month-End Book Value"' $ 201,381 $ 239,207 $ 232,393 $ 228,398 $ 226,460 $ 228,948
Month-End Market Value"' $ 202,521 $ 240,435 $ 233,526 $ 229,602 $ 227,587 $ 23Q005
PaperGain(Loss) $ 1,140 $ 1,228 $ 1,133 $ 1,204 $ 1,127 $ 1,057
PriorYearBookVariance $ (12,226) $ 21,577 $ 21,716 $ 7,960 $ 3,786 $ (2,231)
Interest Earnings $ 315 $ 326 $ 322 $ 332 $ 356 $ 366
Yield-To-Maturity 7.93% 1.69% 1.74% 179% 1.90% 2.03%
Weighted Maturity(Days) 255 246 253 282 297 306
Effective Duration 0.17 0.17 0.78 020 0.22 024
RDA
Month-End Book Value"'" $ 261,734 $ 226,007 $ 265,942 $ 275,874 $ 284,220 $ 287,291
Month-End Market Value"' $ 262,477 $ 226,811 $ 266,805 $ 276,824 $ 285,231 $ 288,364
PaperGain(Loss) $ 743 $ 804 $ 863 $ 950 $ 1,011 $ 1,093
Prior Year Book Variance $ 17,060 $ (19,093) $ 8,557 $ (8,260) $ (4,767) $ 1,931
Interest Earnings $ 257 $ 166 $ 227 $ 277 $ 308 $ 307
Yield-To-Maturity 121% 0.96% 0.95% 1.19% 1.31°/ 1.30%
Weighted Maturiry(Days) 185 214 192 226 236 243
Effective Duration 0.17 021 0.19 020 020 022
"' Omits SLGSs.
City of Palm Desert-- Portfolio Characteristics
- November 30, 2009
Dollars in Thousands
Aqeinq Interval Market Value � - - ` -1
< 1 M � ���,pgg ,General Fund Ageing�
<2M 2,033
<3M - 100 _._ ._. .._ _
<6M 6,135 80 74
< 1YR 19.662 e
<2YR 10,418 0 60
<3YR - � 40
<4YR - a 13
<5YR -
20 1 0 4 � 0 0 0 0
0
> 5YR - i
Total: $ 149,337 < 1M <2M <3M <6M < < a < < > ;
1VR 2YR 3YR 4YR SVR 5YR `
Ratinqs' MarketValue � �Credit�uality qA
AAA $ 47.639 Z� 10% A
AA 20,796 4%
A 7,087 Unrated*"
Unrated"' 124,969 gp�
Total: $ 200,491
Sector Market Value � I Asset Allocation � MTNs
MMF $ 29,720 RDALoan �q/
11%
Agencies 14.384 MMF
MTNs 27,883 �5�
CAMP 3,535 GMR4
RDALoan 22,655 Agencies 48�
GMRA 96,794 ��
LAIF 5,520
�AMP
�P - p3% LAIF
Total: $ 20Q491 3%
Month Citv Yield LAIF Yield Variance � �Performance
Dec08 2.87 2.35 0.52
Jan09 255 2.05 0.51 3D
Feb 2.36 1.87 0.50
Mar 2.77 1.82 0.35 2.0
Apr 2.09 1.61 0.49 ^
May 2.04 1.53 0.51 d
Jun 2.03 1.38 0.65 Y ���
Jul 1.90 1.04 0.86
Aug 1.79 0.93 0.87 0.0
Sep 174 0.76 0.98 Dec08an09Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Oct 1.69 0.65 1.05 _ . .
Nov 1.93 0.61 1.32 0 _ � _____
` Standard and Poors
" LAIF,and City Loan to RDA Page 2
CITY OF PALM DESERT
Portfolio Holdings
November 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S8P
Medium-Term Notes �
$ 3,795,000 BANK OF AMERICA 5.38 8I15/11 $ 3,874,254 4.05 105.58 $ 4,006,571 A2 A
$ 3,OOQ000 BANK OF AMERICA 4.25 10/1/10 $ 3,024,981 320 102.69 $ 3,080,592 A2 A
$ 2,035,000 GENERAL ELECTRIC 4.88 10/21I10 $ 2,022,978 5.63 103.64 $ 2,109,700 Aa2 AA+
$ 1,891,000 GENERAL ELECTRIC 6.88 11I15I10 $ 1,910,345 5.65 10579 $ 2,000,428 Aa2 AA+
$ 2,000,000 GENERAL ELECTRIC 6.13 2/22/11 $ 2,009,755 5.67 105.82 $ 2,116,474 Aa2 AA+
$ 3,965,000 GENERAL ELECTRIC 4.88 10121/10 $ 4,020,093 323 103.64 $ 4,109,378 Aa2 AA+
$ 2,000,000 WACHOVIA 7.80 81i6/10 $ 2,036,430 5.02 104.61 $ 2,092,158 A1 AA
$ 4,000,000 WELLS FARGO BANK 6.38 Sl1/11 $ 4,073,298 5.13 107.10 $ 4,284,132 A1 AA
$ 2,000,000 WELLS FARGO BANK 4.63 8l9/10 $ 1,994,196 5.09 102.83 $ 2,056,544 A1 AA
$ 2,02Q000 WELLS FARGO BANK 420 1I75/10 $ 2,018,229 4.96 100.39 $ 2,027,878 A1 AA
$ 26,706,000 Subtotal $ 26,984,557 4.57 $ 27,883,256
Agencies--Coupon
$ 3,000,000 FED FARM CREDIT BANK 478 5l3/10 $ 3,001,972 4.61 101.91 $ 3,057,188 Aaa AAA
$ 3,000,000 FED FARM CREDIT BANK 4.78 Sl3/10 $ 3,001,972 4.61 701.91 $ 3,057,188 Aaa AAA
$ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15/09 $ 2,048,376 4.87 100.76 $ 2,052,202 Aaa AAA
$ 2,062,000 FED HOME LOAN MTG CORP 4.13 7/12/10 $ 2,059,061 5.47 102.34 $ 2,110,328 Aaa AAA
$ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15/09 $ 2,047,864 5.50 100.16 $ 2,052,202 Aaa AAA
$ 2,000,000 FED NATIONAL MTG ASSOC 425 8/15/10 $ 1,984p21 5.47 10275 $ 2,055,000 Aaa AAA
$ 14,160,000 Subtotal $ 14,143,287 5.02 $ 74,384,106
Local Agency Investment Fund
$ 5,519,992 LA.I.F. 0.00 12/1/09 $ 5,519,992 0.61 100.00 $ 5,519,992 U U
$ 5,519,992 Subtotal $ 5,579,992 0.61 $ 5,519,992
LocalAgencylnvestmentFund
$ 3,527,742 C.A.M.P. 0.00 12/1/09 $ 3,527,�42 0.27 100.00 $ 3,527,742 U AAA
$ 7,324 C.A.M.P.(DESERT WILLOW) 0.00 12/1/09 $ 7,324 0.27 100.00 $ 7,324 U AAA
$ 3,535,067 Subtotal $ 3,535,067 0.27 $ 3,535,067
Money Market Fund
$ 29,719,572 WF ADVANTAGE GOVT MMF 0.00 12/1/09 $ 29,719,572 0.00 700.00 $ 29,719,572 Aaa AAA
$ 29,719,572 Subtotal $ 29,719,572 0.00 $ 29,779,572
Government Managed Rate Account
$ 96,794,022 UNION BANK 0.00 12/7/09 $ 96,794,022 1.77 100.00 $ 96,794,022 U U
$ 96,794,022 Subtotal $ 96,794,022 1.77 $ 96,794,022
Ci[y Loan to RDA
$ 22,655,000 CITY OF PALM DESERT 0.00 12/1/39 $ 22,655,000 0.61 100.00 $ 22,655,000 U U
$ 22,655,000 Subtotal E 22,655,000 0.61 $ 22,655,000
"U"= Unraled Page 3
CITY OF PALM DESERT
Portfolio Holdings
November 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM P�ice Value Moody's 5&P
Total Investments
$ 199,089,653 $ 199,351,497 1.93 $ 200,491,015
Cash
$ 1,265,996 CITY MAIN CHKG 0.00 72/1I09 $ 1,265,996 0.00 100.00 $ 1,265,996 U U
$ 658,470 DESERT WILLOW CHKG 0.00 12/1I09 $ 658,470 0.00 100.00 $ 658,470 U U
$ 105,292 RECREATIONAL FAC CHKG 0.00 12/1I09 $ 105,292 0.00 100.00 $ 105,292 U U
$ 2,029,758 Subtotal S 2,029,758 $ 2,029,756
7otal Investments and Cash
$ 201,719,411 $ 201,381,255 $ 202,520,773
%of Portfolio
Corporate Issuers (Market Value)
BANK OF AMERICA 3.50%
GENERAL ELECTRIC 5.70%
WACHOVIA 1.03%
WELLS FARGO BANK 4.73°/
%of Portfolio
Agency Issuers (Market Value)
FED FARM CREDIT BANK 3.02%
FED HOME LOAN MTG CORP 3.07%
FED NATIONAL MTG ASSOC 7.01°/
"U"=Unrated Page 4
Palm Desert Redevelopment Agency --Portfolio Charecteristics
* November 30, 2009
Dollars in Thousands
Aqeinq Interval Market Value I portfolio Ageing wlo SLGSs�
< 1 M $ 74,950
�pM 13.710
< 3M -
ioa --- - _---
<6M - 80 69
< tYR 14.219 °
0 60
< 2YR 4,228 'o
<3YR - 40
0 13
<4YR - a Z� 13 0 0 4 0 0 0 2
<SYR - p
>SYR 2.��5 <1M <2M <3M <6M < < < < < '
Total: 8 109,122 tYR 2YR 3VR 4VR 5YR 5YR
��Credit Quality M
Quality• MarketValue 7%
qqq � 79,403
qq 16,746 qqq Unrated""
q - 30% 63%
Unrated" 165,624
7otal: 8 26����3 A
0%
� ��Asset Allocation� LAIF
Sector Market Value MTNs 2�
MMF $ 6Q850 6% CAMP
Agencies �/ EIP
Agencies 15,329 6% ��
MTNs 16,746
CAMP 2,2�9 MMF LAIF/Bond
LAIF 5,204 � pg� Proceeds
34%
EIP 2,015
LAIFIBond Proceeds 89.654
GMRA 69,766 GMRA
Total: $ 261,773 27�
Month RDA Yield LAIF Yield Variance � Performance
Dec08 1.40 2.35 -0.95
Jan09 126 2.05 -079 2J - —�--
Feb 129 1.87 -0.58
Mar 1.07 1.82 -075 � g
Apr 1.05 1.61 -0.56 °=
a
May 1.06 1.53 -0.47 ; 0 9
Jun 1.30 1.38 -0.08
Jul 1.31 1.04 0.27
Aug 1.19 0.93 026 OA .
SBp 0.95 076 0.79 Dec08an09Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Oct 0.96 0.65 0.32 auiFrem .aonr�em �
Nov 121 0.61 0.59 , - —
' Standard and Poors
" LAIF Page 5
�
Palm Desert Redevelopment Agency
Portfolio Holdings
November 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S8P
Medium-Term Notes
$ 3,000,000 WAL-MART 4.13 7/1/10 $ 3,02Q390 2.91 10225 $ 3,067,428 Aa2 AA
$ 13,625,000 WELLS FARGO BANK 420 1l15/10 $ 13,644,267 3.00 100.39 $ 13,678,138 A1 AA
$ 16,625,000 Subtotal $ 16,664,657 2.98 $ 16,745,566
Federal Agencies--Coupon
$ 4,900,000 FED FARM CREDIT BANK 4.90 9/22I10 $ 4,909,483 4.65 703.63 $ 5,077,625 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 4.88 3/11111 $ 1,985,249 5.49 105.59 $ 2,711,875 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,985,053 5.50 105.59 $ 2,711,875 Aaa AAA
$ 2,000,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 2,018,543 5.54 105.13 $ 2,102,500 Aaa AAA
$ 3,734,000 FED HOME LOAN MTG CORP 6.88 9I15/70 $ 3,768,683 5.54 105.13 $ 3,925,368 Aaa AAA
$ 14,634,000 Subtotal $ 14,667,011 5.23 $ 15,329,243
Local Government Inveslment Pool
$ 5,182,126 LA.I.F. 0.00 12/1/09 $ 5,182,126 0.61 700.00 $ 5,182,726 U U
$ 22,026 LA.I.F.(HOUSING) 0.00 1211/09 $ 22,026 0.61 700.00 $ 22,026 U U
$ 5,204,151 Subtotal $ 5,204,151 0.67 E 5,204,151
Local Government Investment Pool
$ 17,602,238 L.A.I.F./WELLS FARGO 0.00 12/1I09 $ 17,602,238 0.61 100.00 $ 17,602,238 U AA
$ 4,790,552 L.A.I.F.l WELLS FARGO 0.00 121i/09 $ 4,790,552 0.61 100.00 $ 4,790,552 U AA
$ 25,175,995 LA.I.F./WELLS FARGO 0.00 1217/09 $ 25,775,995 0.61 100.00 $ 25,175,995 U AA
$ 10,531,455 L.A.I.F./WELLS FARGO 0.00 1211/09 $ 10,531,455 0.61 100.00 $ 10,531,455 U AA
$ 15,089J43 L.A.I.F./WELLS FARGO 0.00 1211/09 $ 15,089,743 0.61 100.00 $ 75,089,743 U AA
$ 16,463,541 L.A.I.F./WELLS FARGO 0.00 12/1/09 $ 16,463,541 0.61 100.00 $ 16,463,541 U AA
$ 89,653,524 Subtotal $ 89,653,524 0.61 $ 89,653,524
Local Government Investment Pool
$ 98,222 C.A.M.P. 0.00 1211/09 $ 98.222 027 100.00 $ 98,222 U AAA
$ 2,11Q295 C.A.M.P. (HOUSING) 0.00 12/1/09 $ 2,110,295 027 100.00 $ 2,110,295 U AAA
$ 2,208,516 Subtotal 5 2,208,516 0.27 $ 2,208,516
Money Market Fund
$ 60,849,555 WF ADVANTAGE GOVT MMF 0.00 12I1I09 $ 60,849,555 0.00 100.00 $ 60,849,555 Aaa AAA
$ 60,849,555 Subtotal $ 60,849,555 0.00 $ 60,849,555
Government Managed Rate Account
$ 69,766,485 UNION BANK 0.00 12/1I09 $ 69J66,485 1.77 700.00 $ 69,766,485 U U
$ 69,766,485 Subtotal $ 69,766,485 1.77 $ 69,766,485
"U"= Unrated . Page 6
a
• Palm Desert Redevelopment Agency
Portfolio Holdings
November 30, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P
Municipal Bonds
$ 2,015,000 ENERGY INDEP PROGRAM 3.00 9l2/29 $ 2,015,000 3.00 100.00 $ 2,015,000 U AA
$ 2,015,000 Subtotal $ 2,015,000 3.00 $ 2,015,000
Investments
$ 260,956,231 $ 261,028,900 1.93 $ 261,772,039
Cash
$ 287,097 HOUSING AUTH CHKG 0.00 12/1/09 $ 287,097 0.00 100.00 $ 287,097 U U
$ 418,146 HOUSING AUTH TRUST 0.00 12/1/09 $ 478,146 0.00 100.00 $ 418,146 U U
$ 705,243 Subtotal $ 705,243 $ 705,243
Total Investments and Cash
$ 261,681,475 $ 261,734,143 $ 262,477,283
%of Portfolio
Corporete Issuers (Market Value)
WAL-MART 1.17%
WELLS FARGO BANK 5.21%
%of Portfolio
Agency Issuers (Market Value)
FED FARM CREDIT BANK 1.93°/
FED HOME LOAN BANK 1.61°/
FED HOME LOAN MTG CORP 2.30%
"U"= Unrated Page 7
1 '
4
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 reshictive than the
Califomia 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 November 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 pmdent 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 f nance the operations of the City of Palm Desert
and the Palm Desert Redevelopment Agency over the next six months. In addition, portions of either Ihe City or the RDA
portfolio could be liquidated in order to meet any signifwnt, unexpected cash requirements.
Interactive Data Corporation provided the data that was 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 December 22, 2009,
PcucLS. !'iGbam'+s C C M. T. *
City Treasurer
SUMMARY OF AUTHORIZED INVESTMENTS
�
Califomia Government Code City Investment Policy
CA Govt Maximum Maximum Quality Maximum Maximum Quality °/ of City °/of RDA
Code Investment Category Maturity Limit S8P/Mdys Maturity Limit S&P/Mdys Portfolio Portfolio
53607(a) Palm Desert Bonds 5 Years No Limit 0.0% 0.8%
53632(c) Savings Accounts No Limit No Limit No Limit No Limit 48.6% 26.7%
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 Not Authorized
53601(e) Federal A encies 5 Years No Limit 5 Years 30°/ 6% 7.1% 5.6%
53601(f) Bankers's Acceptances 180 Days 40% 180 Days 40% A-1 &P-7 -
53607(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) ReverseRepos 92Days 20% NotAuthorized
53601(j) Medium-Term Notes 5 Years 30% A 5 Years 30% A 13.5% 6.4%
�53607(k) MuWal Funds 90 Days 20% AAA&Aaa 90 Days 20% (2) AAA&Aaa 74.9% 23.3%
53601(I) Trust Indenture Debt Not Authorized
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%(2J or Advisor 1.8% 0.9%
53601(n) Mortgage-Backed SYears 20°/ AQssuer)& NotAuthorized
Sewrities AA(Sewrity
16429.1(b) LAIF No Limit No Limit 2.8°/ 36.3%
(1) The City loan to RDA,which is not a bond, has been approved by the Palm Desert City Council. 88.6% 100.0°/
_ (2) The Cily Energy Independence Program has been approved by the Palm Desert City Council.
(3) Mazimum limit for mutual funds and local government investment pools, excludin bond proceeds.
. " Certified CaliPornia Municipal Treasurer Page 8