HomeMy WebLinkAboutInvestment Reports December 2009 and January 2010CITY OF PALM DESERT
FINANCE DEPARTMENT
INTEROFFICE MEMORANDUM
TO: RACHELLE KLASSEN, CITY CLERK
FROM: NIAMH ORTEGA, RECORDING SECRETARY\ \\
DATE: FEBRUARY 24, 2010
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 December 2009 and January 2010. Please include the report on the
upcoming agenda for review and acceptance by City Council.
Also included are the minutes of the December and January 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 COUNCIL ACTION
APPROVED DFNIFD
RECEIVED CFi le, OTIER
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Original on file with City Clerk's Office ABSTAIN• N Al e- �-
VERIFIED BY: �K 1r-
Original on File with City Clerk's Office
G:\FINANCE\NIAMH ORTEGA\INVESTMENT COMMITTEE\MEMOS\RKLASSENINVREPORT.WPD
City of Palm Desert
City and Redevelopment Agency Portfolios
COMPLIANCE ANALYSIS AND INVESTMENT REPORT
December 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) will meet next on January 26-27. No change in interest rates is expected.
The FOMC plans to end its "quantitative easing program" by the end of March 2010. This program was designed to keep
mortgage rates low, and to finance the U.S. Government fiscal deficit. The Fed bought mortgage securities from the banks,
and the banks, in turn, either bought U.S. Government debt or placed the cash back at the Fed. This program was used to
buy 80% of $1.5 trillion in new U.S. Government debt. Foreign investors bought the remaining 20%.
In 2010, the U.S. Treasury will need to finance $2 trillion in short-term debt, plus an estimated $1.5 trillion in additional
deficit spending. This amounts to nearly 30% of U.S. Gross Domestic Product. The Fed will again have to "print money" to
purchase most of this debt. Foreign investors may become increasingly hesitant to buy Treasuries unless they are
compensated for increased risk of sovereign default. The Russian and Indian central banks, for example, have reportedly
stopped buying U.S. Treasury bills, and have started buying large amounts of gold.
As the Federal stimulus recedes, asset values that have benefited from it may recede as well. A double -dip recession may
be possible in early 2011 if large tax increases are introduced in the second half of 2010. Small businesses, which are the
main engines of hiring, would be hit particularly hard by any tax increases.
Pau4S. Qi c. c. k r
City Treasurer
Dollars in Thousands
PORTFOLIO STATISTICS
DEC-09 NOV-09 OCT-09 SEP-09 AUG-09 JUL-09
CITY
Month -End Book Value*** $ 202,229 $ 201,381 $ 239,207 $ 232,393 $ 228,398 $ 226,460
Month -End Market Value*** $ 203,250 $ 202,521 $ 240,435 $ 233,526 $ 229,602 $ 227,587
Paper Gain (Loss) $ 1,021 $ 1,140 $ 1,228 $ 1,133 $ 1,204 $ 1,127
Prior Year Book Variance $ 3,176 $ (12,226) $ 21,577 $ 21,716 $ 7,960 $ 3,786
Interest Earnings $ 314 $ 315 $ 326 $ 322 $ 332 $ 356
Yield -To -Maturity 1.82% 1.93% 1.69% 1.74% 1.79% 1.90%
Weighted Maturity (Days) 230 255 246 253 282 297
Effective Duration 0.15 0.17 0.17 0.18 0.20 0.22
RDA
Month -End Book Value *** $ 256,271 $ 261,734 $ 226,007 $ 265,942 $ 275,874 $ 284,220
Month -End Market Value *** $ 256,897 $ 262,477 $ 226,811 $ 266,805 $ 276,824 $ 285,231
Paper Gain (Loss) $ 626 $ 743 $ 804 $ 863 $ 950 $ 1,011
Prior Year Book Variance $ 4,419 $ 17,060 $ (19,093) $ 8,557 $ (8,260) $ (4,767)
Interest Earnings $ 262 $ 257 $ 186 $ 227 $ 277 $ 308
Yield -To -Maturity 1.21 % 1.21% 0.96% 0.95% 1.19% 1.31%
Weighted Maturity (Days) 188 185 214 192 226 236
Effective Duration 0.16 0.17 0.21 0.19 0.20 0.20
*** Omits SLGSs.
City of Palm Desert -- Portfolio Characteristics
December 31, 2009
Dollars in Thousands
Ageing Interval Market Value
< 1M $ 111,581
< 2M -
< 3M -
< 6M 6,114
< 1YR 19,614
< 2YR 10,407
< 3YR -
< 4YR
< 5YR
> 5YR
Total: $ 147,716
General Fund Ageing 1
7
0
100
80
60
40
20
0
76
0 0 4 - 0 0 0 0
13 7
<1M <2M <3M <6M < < < < < >
1YR 2YR 3YR 4YR 5YR 5YR
Ratings * Market Value
AAA $ 66,777
AA 20,732
A 7,061
Unrated ** 107,928
Total: $ 202,498
Sector Market Value
MMF $ 32,607
Agencies 10,244
MTNs 27,793
CAMP 3,536
RDA Loan 22,655
GMRA 100,143
LAIF 5,520
CP
Total: $ 202,498
Month City Yield LAIF Yield Variance
Jan09 2.55 2.05 0.51
Feb 2.36 1.87 0.50
Mar 2.17 1.82 0.35
Apr 2.09 1.61 0.49
May 2.04 1.53 0.51
Jun 2.03 1.38 0.65
Jul 1.90 1.04 0.86
Aug 1.79 0.93 0.87
Sep 1.74 0.76 0.98
Oct 1.69 0.65 1.05
Nov 1.93 0.61 1.32
Dec 1.82 0.57 1.26
Credit Quality
AAAAA
33% 10%
A
4%
Unrated **
53°
Asset Allocation
RDA Loan
11%
MMF
16%
MTNs
14%
LAI F
3%
GMRA
49%
Performance 1
7
rd
Jan09Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
* Standard and Poors
** LAIF, and City Loan to RDA
Page 2
City of Palm Desert
Portfolio Holdings
December 31, 2009
Market
Ratings
Par Value
Medium -Term Notes
$ 3,795,000
$ 3,000,000
$ 2,035,000
$ 1,891,000
$ 2,000,000
$ 3,965,000
$ 2,000,000
$ 4,000,000
$ 2,000,000
$ 2,020,000
I $ 26,706,000
Issuer
BANK OF AMERICA
BANK OF AMERICA
GENERAL ELECTRIC
GENERAL ELECTRIC
GENERAL ELECTRIC
GENERAL ELECTRIC
WACHOVIA
WELLS FARGO BANK
WELLS FARGO BANK
WELLS FARGO BANK
Coupon' Maturity I Cost I YTM
5.38
4.25
4.88
6.88
6.13
4.88
7.80
6.38
4.63
4.20
8/15/11
10/1/10
10/21/10
11/15/10
2/22/11
10/21/10
8/18/10
8/1/11
8/9/10
1/15/10
$ 3,870,382
$ 3,022,483
$ 2,024,105
$ 1,908,658
$ 2,009,091
$ 4,014,928
$ 2,032,177
$ 4,069,633
$ 1,994,898
$ 2,019,436
4.05
3.20
5.63
5.65
5.67
3.23
5.02
5.13
5.09
4.96
Price I Value
104.98 $
102.56 $
103.41 $
105.41 $
105.67 $
103.41 $
104.35 $
106.53 $
102.56 $
100.09 $
3,983,896
3,076,677
2,104,485
1,993,375
2,113,396
4,100, 385
2,086,944
4,261,316
2,051,170
2,021,759
Moody's ' S&P
A2
A2
Aa2
Aa2
Aa2
Aa2
Al
Al
Al
Al
A
A
AA+
AA+
AA+
AA+
AA
AA
AA
AA
Subtotal
Agencies -- Coupon
$ 3,000,000 FED FARM CREDIT BANK
$ 3,000,000 FED FARM CREDIT BANK
$ 2,062,000 FED HOME LOAN MTG CORP
$ 2,000,000 FED NAT MTG ASSOC
I $ 10,062,000 Subtotal
Local Agency Investment Fraud
$ 5,519,992 L.A.I.F.
$ 5,519,992
4.78
4.78
4.13
4.25
$ 26,965,791 4.57
5/3/10 $
5/3/10 $
7/12/10 $
8/15/10 $
$ 27,793,404
3,001,583 4.61 101.53 $
3,001,583 4.61 101.53 $
2,061,211 5.47 102.00 $
1,985,908 5.47 102.44 $
$ 10,050,286 4.96
3,045,938
3,045,938
2,103,240
2,048,750
$ 10,243,865
0.00 1/1/10 $ 5,519,992 0.57 100.00 $ 5,519,992
Aaa
Aaa
Aaa
Aaa
AAA
AAA
AAA
AAA
Subtotal
$ 5,519,992 0.57
$ 5,519,992
Local Agency Investment Fraud
$ 3,528,502 C.A.M.P.
$ 7,326 C.A.M.P. (DESERT WILLOW)
$ 3,535,828
Subtotal
0.00 1/1/10 $
0.00 1/1/10 $
3,528,502 0.25 100.00 $ 3,528,502
7,326 0.25 100.00 $ 7,326
$ 3,535,828 0.25
$ 3,535,828
U AAA
U AAA
Money Market Fund
$ 32,606,825 WF ADVANTAGE GOVT MMF 0.00 1/1/10 $ 32,606,825 0.01 100.00 $ 32,606,825
$ 32,606,825
Subtotal
$ 32,606,825 0.01
$ 32,606,825
Aaa
AAA
Government Managed Rate Account
$ 100,143,009 UNION BANK
I $ 100,143,009 Subtotal
0.00 1/1/10 $ 100,143,009 1.77 100.00 $ 100,143,009
$ 100,143,009 1.77
$ 100,143,009
Loan to RDA
$ 22,655,000 CITY OF PALM DESERT 0.00 1/1/39 $ 22,655,000 0.57 100.00 $ 22,655,000
I $ 22,655,000 Subtotal
$ 22,655,000 0.57
$ 22,655,000
1
"U" = Unrated
Page 3
City of Palm Desert
Portfolio Holdings
December 31, 2009
Market
Ratings
IPar Value I Issuer I Coupon' Maturity I Cost I YTM
Total Investments
$ 201,228,654
$ 201,476,730 1.82
Price I Value
$ 202,497,922
Cash
$ 510,866 CITY MAIN CHKG 0.00 1/1/10 $ 510,866 0.00 100.00 $
$ 139,266 DESERT WILLOW CHKG 0.00 1/1/10 $ 139,266 0.00 100.00 $
$ 101,874 RECREATIONAL FAC CHKG 0.00 1/1/10 $ 101,874 0.00 100.00 $
$ 752,006 Subtotal
510,866
139,266
101,874
$ 752,006 $ 752,006
Moody's ' S&P
U
U
U
U
U
U
Total Investments and Cash
$ 201,980,660
$ 202,228,736
Corporate Issuers
% of Portfolio
(Market Value)
BANK OF AMERICA 3.47%
GENERAL ELECTRIC 5.07%
WACHOVIA 1.03%
WELLS FARGO BANK 4.10%
Agency Issuers
FED FARM CREDIT BANK
FED HOME LOAN MTG CORP
FED NAT MTG ASSOC
% of Portfolio
(Market Value)
3.00%
1.03%
1.01 %
$ 203,249,928
"U" = Unrated Page 4
Dollars in Thousands
Ageing Interval
<1M
< 2M
< 3M
< 6M
< 1YR
< 2YR
< 3YR
< 4YR
< 5YR
> 5YR
Total:
Palm Desert Redevelopment Agency -- Portfolio Characteristics
December 31, 2009
Market Value
$ 88,725
14,173
4,224
2,015
$ 109,137
Portfolio Ageing w/o SLGSs
0
a
100
80
60
40
20
0
81
13
0 0 0 4 0 0 0 2
<1M <2M <3M <6M < < < < < >
1YR 2YR 3YR 4YR 5YR 5YR
Quality * Market Value
AAA $ 74,643
AA 105,759
A -
Unrated ** 75,074
Total: $ 255,476
Sector Market Value
MMF $ 57,871
Agencies 14,634
MTNs 16,625
CAMP 2,209
LAIF 5,204
EIP 2,015
LAIF/Bond Proceeds 87,048
GMRA 69,870
Total: $ 255,476
Month RDA Yield LAIF Yield Variance
Jan09 1.26 2.05 -0.79
Feb 1.29 1.87 -0.58
Mar 1.07 1.82 -0.75
Apr 1.05 1.61 -0.56
May 1.06 1.53 -0.47
Jun 1.30 1.38 -0.08
Jul 1.31 1.04 0.27
Aug 1.19 0.93 0.26
Sep 0.95 0.76 0.19
Oct 0.96 0.65 0.32
Nov 1.21 0.61 0.59
Dec 1.21 0.57 0.64
Credit Quality
AAA
29%
A
0%
Unrated **
29%
AA
42%
Asset Allocation 1
Agencies
6%
MMF
23%
MTNs LAIF
6% 2% CAMP
1 /o
EIP
1%
GMRA
27%
LAIF/Bond
Proceeds
34%
/Performance
2.1
1.4
0.7
0.0
JanO9Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
LAIF Yield
®RDA Yield
* Standard and Poors
** LAIF
Page 5
Palm Desert Redevelopment Agency
Portfolio Holdings
December 31, 2009
Market
Ratings
IPar Value I Issuer I Coupon I Maturity I Cost I YTM
Medium -Term Notes
$ 3,000,000
$ 13,625,000 WELLS FARGO BANK 4.20 1/15/10 $ 13,631,130 3.00 100.09 $ 13,636,867
Price I Value
WAL-MART
$ 16,625,000 Subtotal
Agencies -- Coupons
$ 4,900,000 FED FARM CREDIT BANK
$ 2,000,000 FED HOME LOAN BANK
$ 2,000,000 FED HOME LOAN BANK
$ 2,000,000 FED HOME LOAN MTG CORP
$ 3,734,000 FED HOME LOAN MTG CORP
I $ 14,634,000 Subtotal
1
Local Government Investment Pool
$ 5,182,126 L.A.I.F.
$ 22,026 L.A.I.F. (HOUSING) 0.00
4.13 7/1/10 $ 3,017,477 2.91 101.97 $ 3,058,989
4.90
4.88
4.88
6.88
6.88
$ 5,204,151
Subtotal
0.00
Local Government Investment Pool
$ 17,602,468 L.A.I.F. / WELLS FARGO
$ 4,790,535 L.A.I.F. / WELLS FARGO
$ 25,175,995 L.A.I.F. / WELLS FARGO
$ 10,531,455 L.A.I.F. / WELLS FARGO
$ 12,484,433 L.A.I.F. / WELLS FARGO
$ 16,463,540 L.A.I.F. / WELLS FARGO
0.00
0.00
0.00
0.00
0.00
0.00
$ 87,048,426 Subtotal
Local Government Investment Pool
$ 98,243 C.A.M.P.
$ 2,110,749 C.A.M.P. (HOUSING)
0.00
0.00
$ 16,648,608 2.98 $ 16,695,856
4,908,506 4.65 103.09 $
1,986,211 5.49 104.91 $
1,986,028 5.50 104.91 $
2,016,584 5.54 104.53 $
3,765,019 5.54 104.53 $
5,051,594
2,098,125
2,098,125
2,090,625
3,903,197
Moody's ' S&P
Aa2
Al
Aaa
Aaa
Aaa
Aaa
Aaa
AA
AA
AAA
AAA
AAA
AAA
AAA
$ 14,662,348 5.23 $ 15,241,666
5,182,126 0.57 100.00 $ 5,182,126 U U
22,026 0.57 100.00 $ 22,026
$ 5,204,151 0.57 $ 5,204,151
17,602,468
4,790,535
25,175,995
10,531,455
12,484,433
16,463,540
0.57
0.57
0.57
0.57
0.57
0.57
100.00 $
100.00 $
100.00 $
100.00 $
100.00 $
100.00 $
17,602,468
4,790,535
25,175,995
10,531,455
12,484,433
16,463,540
$ 87,048,426 0.57 $ 87,048,426
$ 2,208,992
Subtotal
U
U
U
U
U
U
AA
AA
AA
AA
AA
AA
98,243 0.25 100.00 $ 98,243
2,110,749 0.25 100.00 $ 2,110,749
$ 2,208,992 0.25 $ 2,208,992
U AAA
U AAA
AAA
U U
Money Market Fund
$ 57,870,815 WF ADVANTAGE GOVT MMF
I $ 57,870,815 Subtotal
Government Managed Rate Account
$ 69,870,018 UNION BANK
I $ 69,870,018 Subtotal
0.00 1/1/10 $ 57,870,815 0.01 100.00 $ 57,870,815
$ 57,870,815 0.01
$ 57,870,815
0.00 1/1/10 $ 69,870,018 1.77 100.00 $ 69,870,018
$ 69,870,018 1.77 $ 69,870,018
Aaa
"U" = Unrated
Page 6
Palm Desert Redevelopment Agency
Portfolio Holdings
December 31, 2009
Market
Ratings
Par Value
Issuer I Coupon I Maturity I Cost I YTM
Municipal Bonds
$ 2,015,000 ENERGY INDEP PROGRAM
3.00
9/2/29 $
Price I Value
2,015,000 3.00 100.00 $ 2,015,000
Moody's ! S&P
AA
$ 2,015,000
Subtotal
$ 2,015,000 3.00 $ 2,015,000
Total Investments
$ 255,476,402
Cash
$ 322,218
$ 419,962
$ 255,528,357 1.21 $ 256,154,924
HOUSING AUTH CHKG 0.00 1/1/10 $
HOUSING AUTH TRUST
0.00
1/1/10 $
322,218 0.00 100.00 $ 322,218 U U
419,962 0.00 100.00 $
419,962
$ 742,180 Subtotal
$ 742,180
$ 742,180
. Total Investments and Cash
$ 256,218,582
$ 256,270,537
Corporate Issuers
% of Portfolio
(Market Value)
WAL-MART 1.19%
WELLS FARGO BANK 5.31%
Agency Issuers
FED FARM CREDIT BANK
FED HOME LOAN BANK
FED HOME LOAN MTG CORP
% of Portfolio
(Market Value)
1.97%
1.63%
2.33%
$ 256,897,104
"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 the Statement of Investment Policy annually.
For the month ended December 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, 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.
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 January 26, 2010,
PaabS. 6i1,101,4 C. C. Al. r
City Treasurer
SUMMARY OF AUTHORIZED INVESTMENTS
CA Govt
Code
California Government Code I
City Investment Policy
Investment Category
Maximum Maximum Quality Maximum Maximum Quality
Maturity Limit S&P/Mdys Maturity Limit S&P/Mdys
% of City
Portfolio
% of RDA
Portfolio
53601(a)
Palm Desert Bonds
5 Years
No Limit
0.0%
0.8%
53632(c)
Savings Accounts
No Limit
No Limit
No Limit
No Limit
49.7%
27.3%
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 Agencies
5 Years
No Limit
5 Years
30%
6%
5.0%
5.7%
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
13.4%
6.5%
53601(k)
Mutual Funds
90 Days
20%
AAA & Aaa
90 Days
20% (2)
AAA & Aaa
16.2%
22.7%
53601(I)
Trust Indenture Debt
Not Authorized
53601(m)
Secured Bank Deposits
5 Years
No Limit
Not Authorized
53601(k)
Local Government
Investment Pools
90 Days
20%
AAA & Aaa
or Advisor
90 Days
20% (2)
AAA & Aaa
or Advisor
1.8%
0.9%
53601(n)
Mortgage -Backed
Securities
5 Years
20%
A (Issuer) &
AA (Security)
Not Authorized
16429.1(b)
LAIF
No Limit
No Limit
2.7%
36.1%
(1) The City
(2) The City
(3) Maximum
loan to RDA, which is not a bond, has been approved by the Palm Desert City Council.
Energy Independence Program has been approved by the Palm Desert City Council.
limit for mutual funds and local government investment pools, excluding bond proceeds.
88.7%
100.0%
Certified California Municipal Treasurer
Page 8
City of Palm Desert
City and Redevelopment Agency Portfolios
COMPLIANCE ANALYSIS AND INVESTMENT REPORT
January 2010
Paul S. Gibson, C.C.M.T., Treasurer
Thomas W. Jeffrey, J.D., M.B.A., Deputy City Treasurer
Treasurer's Commentary
The U.S. Government has launched a series of initiatives designed to tighten monetary policy gradually, and to increase
investment in securities markets. While the FOMC left the Federal Funds Rate unchanged at its January 27 meeting, it
subsequently raised the Discount Rate (lending rate to member banks) in an effort to wean banks off government credit.
Separately, the SEC voted to restructure money market funds by shortening portfolio maturities; increasing the amount of
daily cash equivalents held; and empowering governing boards to suspend redemptions during emergencies.
U.S. Gross Domestic Product (GDP) grew by 5.7% in 4Q09. Approximately 3.4% (60%) of this was due to inventory
rebuilding, and another 2.0% (35%) was due to consumer spending. Consumer spending fell by 0.8% from 3Q09 due
largely to the end of "cash for clunkers." Some economists believe that a 5.7% growth rate may not be sustainable once
inventory rebuilding slows, and the government stimulus fades.
The global economic recovery may be hampered by events unfolding in China and in Europe. Some economists believe that
a credit bubble may be building in China due to a long period of easy credit. In Europe, a number of EU members have high
levels of sovereign debt relative to GDP, with Greece thought to be at the greatest risk of sovereign default. Germany and
France however, cannot avoid a Greek default since their banks hold large amounts of Greek debt. Although a EU/IMF
bailout is likely, the national austerity measures that follow may slow the European economic recovery.
Pas 6'4 on, C C,t r
City Treasurer
Dollars in Thousands
PORTFOLIO STATISTICS
JAN-10 DEC-09 NOV-09 OCT-09 SEP-09 AUG-09
CITY
Month -End Book Value*** $ 218,094 $ 202,229 $ 201,381 $ 239,207 $ 232,393 $ 228,398
Month -End Market Value*** $ 219,068 $ 203,250 $ 202,521 $ 240,435 $ 233,526 $ 229,602
Paper Gain (Loss) $ 974 $ 1,021 $ 1,140 $ 1,228 $ 1,133 $ 1,204
Prior Year Book Variance $ 5,356 $ 3,176 $ (12,226) $ 21,577 $ 21,716 $ 7,960
Interest Earnings $ 221 $ 314 $ 315 $ 326 $ 322 $ 332
Yield -To -Maturity 1.31% 1.82% 1.93% 1.69% 1.74% 1.79%
Weighted Maturity (Days) 419 230 255 246 253 282
Effective Duration 0.35 0.15 0.17 0.17 0.18 0.20
RDA
Month -End Book Value *** $ 287,243 $ 256,271 $ 261,734 $ 226,007 $ 265,942 $ 275,874
Month -End Market Value *** $ 287,788 $ 256,897 $ 262,477 $ 226,811 $ 266,805 $ 276,824
Paper Gain (Loss) $ 545 $ 626 $ 743 $ 804 $ 863 $ 950
Prior Year Book Variance $ 5,970 $ 4,419 $ 17,060 $ (19,093) $ 8,557 $ (8,260)
Interest Earnings $ 183 $ 262 $ 257 $ 186 $ 227 $ 277
Yield -To -Maturity 0.72% 1.21% 1.21% 0.96% 0.95% 1.19%
Weighted Maturity (Days) 236 188 185 214 192 226
Effective Duration 0.38 0.16 0.17 0.21 0.19 0.20
Omits SLGSs.
Dollars in Thousands
Ageing Interval
<1M
< 2M
< 3M
< 6M
< 1YR
< 2YR
< 3YR
< 4YR
< 5YR
> 5YR
Total:
City of Palm Desert -- Portfolio Characteristics
January 31, 2010
Market Value
$ 63,846
3,000
8,170
23,509
31,738
32,929
$ 163,192
Ratings *
AAA
AA
A
Unrated **
Total:
Market Value
$ 125,985
21,769
7,073
62,200
$ 217,027
Sector Market Value
MMF $ 32,593
Agencies 70,503
MTNs 28,844
CAMP 22,887
RDA Loan 22,655
LAIF 39,545
Total: $ 217,027
Month City Yield LAIF Yield Variance
Feb09 2.36 1.87 0.50
Mar 2.17 1.82 0.35
Apr 2.09 1.61 0.49
May 2.04 1.53 0.51
Jun 2.03 1.38 0.65
Jul 1.90 1.04 0.86
Aug 1.79 0.93 0.87
Sep 1.74 0.76 0.98
Oct 1.69 0.65 1.05
Nov 1.93 0.61 1.32
Dec 1.82 0.57 1.26
Jan10 1.31 0.56 0.76
<1M <2M <3M <6M < < < < < >
1YR 2YR 3YR 4YR 5YR 5YR
Credit Quality
AAA
58%
Unrated **
29%
AA
A 10%
3%
Asset Allocation
Agencies
33%
LAIF
18%
MTNs
13%
RDA Loan
10%
Feb09Ma Ap May Jun Jul Aug Sep Oct Nov DecJanlo
2
* Standard and Poors
** LAIF, and City Loan to RDA
Page 2
City of Palm Desert
Portfolio Holdings
January 31, 2010
Market
Ratings
Par Value 1
Medium -Term Notes
$ 3,795,000
$ 3,000,000
$ 2,035,000
$ 1,891,000
$ 2,000,000
$ 3,965,000
$ 3,000,000
$ 2,000,000
$ 4,000,000
$ 2,000,000
Issuer
BANK OF AMERICA
BANK OF AMERICA
GENERAL ELECTRIC
GENERAL ELECTRIC
GENERAL ELECTRIC
GENERAL ELECTRIC
TOYOTA
WACHOVIA
WELLS FARGO BANK
WELLS FARGO BANK
Coupon] Maturity I Cost I YTM
5.38
4.25
4.88
6.88
6.13
4.88
4.35
7.80
6.38
4.63
8/15/11
10/1/10
10/21/10
11/15/10
2/22/11
10/21/10
12/15/10
8/18/10
8/1/11
8/9/10
$ 3,866,510
$ 3,019,984
$ 2,025,232
$ 1,906,971
$ 2,008,427
$ 4,009,763
$ 3,101,979
$ 2,027,925
$ 4,065,968
$ 1,995,600
4.05
3.20
5.63
5.65
5.67
3.23
0.44
5.02
5.13
5.09
Price I Value
105.57
102.26
103.08
105.05
105.64
103.08
103.43
103.81
106.54
102.22
Moody's I S&P
$ 4,006,526 A2 A
$ 3,067,791 A2 A
$ 2,097,647 Aa2 AA+
$ 1,986,528 Aa2 AA+
$ 2,112,820 Aa2 AA+
$ 4,087,063 Aa2 AA+
$ 3,102,912 Aa1 AA
$ 2,076,198 Al AA
$ 4,261,780 Al AA
$ 2,044,468 Al AA
$ 27,686,000
Subtotal
$ 28,028,359 4.08 $ 28,843,732
Agencies -- Coupon
$
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
2,062,000
3,000,000
3,000,000
2,000,000
3,000,000
FED FARM CREDIT BANK
FED FARM CREDIT BANK
FED FARM CREDIT BANK
FED HOME LOAN BANK
FED HOME LOAN BANK
FED HOME LOAN BANK
FED HOME LOAN MTG CORP
FED HOME LOAN MTG CORP
FED HOME LOAN MTG CORP
FED NAT MTG ASSOC
FED NAT MTG ASSOC
4.78 5/3/10 $
4.78 5/3/10 $
3.50 10/3/11 $
1.63 7/27/11 $
0.44 10/7/10 $
1.63 3/16/11 $
4.13 7/12/10 $
1.63 4/26/11 $
4.13 2/24/11 $
4.25 8/15/10 $
1.75 12/28/12 $
3,001,194
3,001,194
3,125,524
3,035,204
3,002,442
3,038,125
2,063,362
3,036,309
3,114,618
1,987,796
2,995,572
4.61
4.61
0.97
1.18
0.32
0.41
5.47
0.60
0.52
5.47
1.91
101.19
101.19
104.28
101.25
100.03
101.22
101.78
101.31
103.72
102.28
99.97
$ 3,035,625 Aaa AAA
$ 3,035,625 Aaa AAA
$ 3,128,438 Aaa AAA
$ 3,037,500 Aaa AAA
$ 3,000,938 Aaa AAA
$ 3,036,563 Aaa AAA
$ 2,098,729 Aaa AAA
$ 3,039,375 Aaa AAA
$ 3,111,563 Aaa AAA
$ 2,045,625 Aaa AAA
$ 2,999,063 Aaa AAA
$ 31,062,000
Subtotal
$ 31,401,339 2.16 $ 31,569,042
Agencies -- Callable
3,000,000
3,000,000
15,000,000
2,980,000
3,000,000
3,000,000
6,000,000
FED HOME LOAN BANK
FED HOME LOAN BANK
FED HOME LOAN BANK
FED HOME LOAN BANK
FED HOME LOAN BANK
FED HOME LOAN MTG CORP
FED NAT MTG ASSOC
1.00 10/28/11 $
1.38 6/11/12 $
1.38 6/28/12 $
1.88 11/19/12 $
1.85 12/21/12 $
1.25 1/26/12 $
1.75 12/28/12 $
3,000,000
2,994,118
14,970,577
2,986,411
3,000,922
3,000,000
5,991,506
1.00
2.01
1.82
1.61
1.82
1.25
1.90
100.03
99.84
99.81
99.72
99.78
100.10
99.97
$ 3,000,938
$ 2,995,313
$ 14,971,875
$ 2,971,619
$ 2,993,438
$ 3,002,958
$ 5,998,125
Aaa
Aaa
Aaa
Aaa
Aaa
Aaa
Aaa
AAA
AAA
AAA
AAA
AAA
AAA
AAA
$ 35,980,000
Subtotal
$ 35,943,533 1.71 $ 35,934,264
Agencies -- Discount
$ 3,000,000 FED HOME LOAN BANK
0.00 4/13/10 $
2,999,440 0.07 99.99 $ 2,999,700
Aaa
AAA
$ 3,000,000
Subtotal
$ 2,999,440 0.07 $ 2,999,700
"U" = Unrated
Page 3
City of Palm Desert
Portfolio Holdings
January 31, 2010
Market
Ratings
IPar Value I Issuer I Coupon I Maturity I Cost I YTM
Local Agency Investment Fund
$ 39,545,341 L.A.I.F.
0.00
2/1/10 $
Price I Value
39,545,341 0.56 100.00 $ 39,545,341
Moody's ' S&P
$ 39,545,341
Subtotal
$ 39,545,341 0.56 $ 39,545,341
Local Agency Investment Fund
$ 22,879,202 C.A.M.P. 0.00
$ 7,327 C.A.M.P. (DESERT WILLOW) 0.00
2/1/10 $
2/1/10 $
22,879,202 0.22 100.00 $ 22,879,202 U AAA
7,327 0.22 100.00 $ 7,327
AAA
$ 22,886,530
Subtotal
$ 22,886,530 0.22 $ 22,886,530
Money Market Fund
$ 32,593,087 WF ADVANTAGE GOVT MMF 0.00
2/1/10 $
32,593,087 0.00 100.00 $ 32,593,087
Aaa
AAA
$ 32,593,087
Subtotal
$ 32,593,087 0.00 $ 32,593,087
Loan to RDA
$ 22,655,000
CITY OF PALM DESERT
0.00
2/1/40 $
22,655,000 0.56 100.00 $ 22,655,000
$ 22,655,000
Subtotal
$ 22,655,000 0.56 100.00 $ 22,655,000
Total Investments
$ 215,407,957
Cash
$ 1,421,222
$ 499,751
$ 120,022
CITY MAIN CHKG
DESERT WILLOW CHKG
RECREATIONAL FAC CHKG
0.00
0.00
0.00
$ 216,052,628 1.31 $ 217,026,696
2/1/10 $
2/1/10 $
2/1/10 $
1,421,222 0.00 100.00 $
499,751 0.00 100.00 $
120,022 0.00 100.00 $
1,421,222
499,751
120,022
U
U
U
U
U
U
$ 2,040,995 Subtotal $ 2,040,995 $ 2,040,995
Total Investments and Cash
$ 217,448,952
$ 218,093,623
$ 219,067,691
"U" = Unrated
Page 4
City of Palm Desert
Portfolio Holdings
January 31, 2010
Market
Ratings
IPar Value I Issuer I Coupon I Maturity I Cost I YTM
Corporate Issuers
% of Portfolio
(Markert Value)
BANK OF AMERICA 3.23%
GENERAL ELECTRIC 4.69%
TOYOTA 1.42%
WACHOVIA 0.95%
WELLS FARGO BANK 2.88%
Agency Issuers
FED FARM CREDIT BANK
FED HOME LOAN BANK
FED HOME LOAN MTG CORP
FED NAT MTG ASSOC
% of Portfolio
(Market Value)
4.20%
17.81
5.14%
5.04%
Price I Value
Moody's I S&P
"U" = Unrated Page 5
Palm Desert Redevelopment Agency -- Portfolio Characteristics
January 31, 2010
Dollars in Thousands
Ageinc Interval Market Value
< 1 M $ 79,990
< 2M
< 3M -
< 6M 3,051
< 1YR 14,017
< 2YR 31,573
< 3YR 3,850
< 4YR
< 5YR
> 5YR 3,151
Total: $ 135,632
Quality * Market Value
AAA $ 138,310
AA 98,901
A 10,155
Unrated ** 39,731
Total: $ 287,097
Sector Market Value
MMF $ 59,731
Agencies 36,187
MTNs 16,303
CAMP 42,392
LAIF 39,731
EIP 3,151
LAIF/Bond Proceeds 89,602
Total: $ 287,097
Month RDA Yield LAIF Yield Variance
Feb09 1.29 1.87 -0.58
Mar 1.07 1.82 -0.75
Apr 1.05 1.61 -0.56
May 1.06 1.53 -0.47
Jun 1.30 1.38 -0.08
Jul 1.31 1.04 0.27
Aug 1.19 0.93 0.26
Sep 0.95 0.76 0.19
Oct 0.96 0.65 0.32
Nov 1.21 0.61 0.59
Dec 1.21 0.57 0.64
Jan 0.72 0.56 0.16
<1M<2M<3M<6M < < < < < >
1YR 2YR 3YR 4YR 5YR 5YR
Asset Allocation
MTNs
Agencies 6% CAMP
12% - 15%
MMF
21%
LAIF/Bond
Proceeds
31%
LAIF
14%
EIP
1%
Performance I
F
-73
eb09Mar Ap May Jun Jul Aug Sep Oct Nov Dec Jan
LAIF Yield
0RDA Yield
* Standard and Poors
** LAIF Page 6
IPar Value
Palm Desert Redevelopment Agency
Portfolio Holdings
January 31, 2010
Market
Ratings
Medium -Term Notes
3,000,000
3,450,000
3,000,000
3,000,000
3,000,000
Issuer 'Coupon' Maturity 1 Cost 1 YTM
ABBOTT LABS
BEAR STEARNS (JPM)
JP MORGAN CHASE
JP MORGAN CHASE
WAL-MART
3.75
6.95
3.13
5.60
4.13
3/15/11
8/10/12
12/1/11
6/1/11
7/1/10
$ 3,105,502
$ 3,883,735
$ 3,121,612
$ 3,188,448
$ 3,014,565
0.60
1.83
0.69
0.85
2.91
Price Value
103.25 $
111.60 $
104.15 $
106.10 $
101.70 $
3,097,593
3,850,307
3,121,612
3,182,982
3,050,982
Moody's ' S&P
Al
Aa3
Aa3
Aa3
Aa2
AA
A+
A+
A+
AA
$ 15,450,000 Subtotal
$ 16,313,862 1.39 $ 16,303,476
Agencies -- Coupon
$ 4,900,000
$ 2,000,000
$ 2,000,000
$ 2,890,000
$ 3,000,000
$ 3,000,000
$ 2,000,000
$ 3,734,000
$ 2,940,000
$ 9,000,000
FED FARM CREDIT BANK
FED HOME LOAN BANK
FED HOME LOAN BANK
FED HOME LOAN BANK
FED HOME LOAN BANK
FED HOME LOAN BANK
FED HOME LOAN MTG CORP
FED HOME LOAN MTG CORP
FED NATIONAL MTG ASSOC
FED NATIONAL MTG ASSOC
4.90
4.88
4.88
2.88
0.50
1.13
6.88
6.88
1.75
1.00
9/22/10
3/11/11
3/11/11
3/11/11
11/29/10
12/9/11
9/15/10
9/15/10
3/23/11
11/23/11
$ 4,907,528
$ 1,987,173
$ 1,987,002
$ 2,966,136
$ 3,005,177
$ 3,010,721
$ 2,014,625
$ 3,761,355
$ 2,982,085
$ 9,009,652
4.65
5.49
5.50
0.49
0.36
0.96
5.54
5.54
0.43
1.00
102.91
104.81
104.81
102.56
100.06
100.25
104.16
104.16
101.41
100.28
$ 5,042,406
$ 2,096,250
$ 2,096,250
$ 2,964,056
$ 3,001,875
$ 3,007,500
$ 2,083,125
$ 3,889,194
$ 2,981,344
$ 9,025,313
Aaa AAA
Aaa AAA
Aaa AAA
Aaa AAA
Aaa AAA
Aaa AAA
Aaa AAA
Aaa AAA
Aaa AAA
Aaa AAA
$ 35,464,000 Subtotal
$ 35,631,455 2.59 $ 36,187,313
Local Government Investment Pool
$ 39,708,598 L.A.I.F.
$ 22,059 L.A.I.F. (HOUSING)
0.00 2/1/10 $ 39,708,598 0.56 100.00 $ 39,708,598 U U
0.00 2/1/10 $ 22,059 0.56 100.00 $ 22,059
$ 39,730,658 Subtotal
$ 39,730,658 0.56 $ 39,730,658
Local Government Investment Pool
17,629,313
4,797,836
25,214,364
10,358,920
15,112,739
16,488,631
L.A.I.F. / WELLS FARGO
L.A.I.F. / WELLS FARGO
L.A.I.F. / WELLS FARGO
L.A.I.F. / WELLS FARGO
L.A.I.F. / WELLS FARGO
L.A.I.F. / WELLS FARGO
0.00
0.00
0.00
0.00
0.00
0.00
2/1/10
2/1/10
2/1/10
2/1/10
2/1/10
2/1/10
$ 17,629,313
$ 4,797,836
$ 25,214,364
$ 10,358,920
$ 15,112,739
$ 16,488,631
0.56
0.56
0.56
0.56
0.56
0.56
100.00 $
100.00 $
100.00 $
100.00 $
100.00 $
100.00 $
17,629,313
4,797,836
25,214,364
10,358,920
15,112, 739
16,488,631
U AA
U AA
U AA
U AA
U AA
U AA
$ 89,601,804
Subtotal $ 89,601,804 0.56
$ 89,601,804
Local Government Investment Pool
$ 40,281,191 C.A.M.P.
$ 2,111,137 C.A.M.P. (HOUSING)
0.00 2/1/10 $ 40,281,191 0.22 100.00 $ 40,281,191 U
0.00 2/1/10 $ 2,111,137 0.22 100.00 $ 2,111,137
AAA
AAA
$ 42,392,328 Subtotal
$ 42,392,328 0.22 $ 42,392,328
"U" = Unrated
Page 7
Palm Desert Redevelopment Agency
Portfolio Holdings
January 31, 2010
Market
Ratings
Par Value
Issuer 'Coupon' Maturity I Cost 1 YTM
Price I Value
Moody's ' S&P
Money Market Fund
$ 59,730,952 WF ADVANTAGE GOVT MMF 0.00
2/1/10 $ 59,730,952 0.00 100.00 $ 59,730,952
Aaa
AAA
$ 59,730,952
Subtotal
$ 59,730,952 0.00 $ 59,730,952
Municipal Bonds
$ 3,151,000 CITY OF PALM DESERT
3.00 9/2/29 $ 3,151, 000 3.00 100.00 $ 3,151,000
AA
$ 3,151,000
Subtotal
$ 3,151,000 3.00 $ 3,151,000
Total Investments
$ 285,520,741
Cash
$ 286,110
$ 404,387
$ 286,552,058 0.72 $ 287,097,530
HOUSING AUTH CHKG 0.00 2/1/10 $
HOUSING AUTH TRUST
0.00
2/1/10 $
286,110 0.00 100.00 $ 286,110 U U
404,387 0.00 100.00 $
404,387
$ 690,497 Subtotal
$ 690,497
$ 690,497
Total Investments and Cash
$ 286,211,239
$ 287,242,556
Corporate Issuers
ABBOTT LABS
BEAR STEARNS (JPM)
JP MORGAN CHASE
WAL-MART
% of Portfolio
(Market Value)
1.08%
1.34%
2.19%
1.06%
$ 287,788,028
"U" = Unrated Page 8
Palm Desert Redevelopment Agency
Portfolio Holdings
January 31, 2010
Market
Ratings
Par Value
Issuer 1 Coupon' Maturity 1 Cost 1 YTM
Agency Issuers
FED FARM CREDIT BANK
FED HOME LOAN BANK
FED HOME LOAN MTG CORP
FED NATIONAL MTG ASSOC
% of Portfolio
(Market Value)
1.75%
4.57%
2.08%
4.17%
Price Value
Moody's 1 S&P
"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 January 31, 2010, 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.
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 February 23, 2010,
Pis Qz;b1011.4 CCA'f r.
City Treasurer
CA Govt
Code Investment Category
SUMMARY OF AUTHORIZED INVESTMENTS
ICalifornia Government Code
I City Investment Policy
Maximum Maximum Quality Maximum Maximum Quality % of City % of RDA
Maturity Limit S&P/Mdys Maturity Limit S&P/Mdys Portfolio Portfolio
53601(a)
Palm Desert Bonds
5 Years
No Limit
0.0%
1.1%
53632(c)
Savings Accounts
No Limit
No Limit
No Limit
No Limit
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 Agencies
5 Years
No Limit
5 Years
30%
6%
32.6%
12.4%
53601(f)
Bankers'sAcceptances
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
13.0%
5.7%
53601(k)
Mutual Funds
90 Days
20%
AAA & Aaa
90 Days
20% (2)
AAA & Aaa
15.1%
20.8%
53601(1)
Trust Indenture Debt
Not Authorized
53601(m)
Secured Bank Deposits
5 Years
No Limit
Not Authorized
53601(k)
Local Government
Investment Pools
90 Days
20%
AAA & Aaa
or Advisor
90 Days
20% (2)
AAA & Aaa
or Advisor
10.6%
14.8%
53601(n)
Mortgage -Backed
Securities
5 Years
20%
A (Issuer) &
AA (Security)
Not Authorized
16429.1(b)
LAIF
No Limit
No Limit
18.3%
45.1%
(1) The City loan to RDA, which is not a bond, has been approved by the Palm Desert City Council.
(2) The City Energy Independence Program has been approved by the Palm Desert City Council.
(3) Maximum limit for mutual funds and local government investment pools, excluding bond proceeds.
89.5%
100.0%
* Certified California Municipal Treasurer
Page 10