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HomeMy WebLinkAboutCompliance Analysis and Investment Reports - September 2010 - Joint ConsiderationCITY OF PALM DESERT FINANCE DEPARTMENT INTEROFFICE MEMORANDUM TO: RACHELLE KLASSEN, CITY CLERK FROM: NIAMH ORTEGA, RECORDING SECRETAO� DATE: JANUARY 31, 2011 SUBJECT: COMPLIANCE ANALYSIS AND INVESTMENT REPORTS Please find attached the Compliance Analysis and Investment Reports which were presented and approved at the recent meetings of the Audit, Investment and Finance Committee for the months of September, October and November 2010. 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) CITY COUNCIL ACTION APPROVED_ DENTED RECEIVED 1_f OTI-IER. MEETING DATE AYES: F1 NOES:-hlcnt-' ABSENT: N o()e.,- ---- ABSTAIN: _(_1,Me- VERIFIED BY:_ 0)�'/ra Original on File with City Clerk 5 Office �eGC1ve-"Fi� B Y R D A (Lf5-"C-"� Original 011 fi!e with, Ck.y Clej�Y.`s GARNANCE\NIAMH ORTEGA\INVESTMENT COMMITTEE\MEMOS\RKLASSENINVREPORT.WPD City of Palm Desert 'City arlid Redevelopment Agenqy Portfolios CO PL.10 ANALYSIS'AN© INV 'i l NT REPORT September 30, 201 Paul S. Gibson, C.C.M.T., Treasurer Thomas W. Jeffrey, J.D., M.B.A., Deputy City Treasurer Treasurer's Commentary Nonfarm Employment fell sharply by 95,000 jobs in September, which was widely interpreted as evidence that the recovery is faltering. Accordingly, the Federal Open Market Committee (FOMC) is expected to announce at its November 2 meeting that "Quantitative Easing 2" (QE2) will begin, with the Fed again buying U.S. Treasuries. The underlying intent of QE2 is probably to devalue the U.S. Dollar, thereby creating inflation, which will cause consumer spending and U.S. exports to surge. According to the Wall Street Journal, a number of FOMC officials, including Ben Bernanke, believe that "positive" inflation is the best way to trigger a recovery since consumers will have an incentive to spend their savings rather than let the value of them deteriorate in bank accounts. At present, at least 13 other countries are attempting to lower the value of their currencies in order to promote exports. The fear is that this may provoke 1930s-style "beggar thy neighbor" trade wars. The Congressional Budget Office reported that this year's federal deficit will be the second largest in U.S. history. The Federal Reserve is now the second largest owner of U.S. Treasuries, having overtaken Japan in early October. Trillions of dollars of Federal debt will come due within the next decade. According to Weiss Research, if Federal debt monetarization continues unabated, then the U.S. Government will ultimately be faced with three choices: (1) adopt an austerity program with severe Federal spending cuts and crushing taxes, which would depress economic activity; (2) default on the national debt; or (3) continue to promote inflation (which would amount to a de facto default on the national debt since the U.S. would be repaying its creditors with devalued dollars). pis tia4o-yv, c.C.Ar. r. City Treasurer PORTFOLIO STATISTICS Dollars in Thousands SEP-10 AUG-10 JUL-10 JUN-10 MAY-10 APR-10 CITY Month -End Book Value*** $ 195,728 $ 206,273 $ 197,878 $ 201,932 $ 201,783 $ 198,943 Month -End Market Value*** $ 196,176 $ 206,833 $ 198,453 $ 202,476 $ 202,374 $ 199,620 Paper Gain (Loss) $ 448 $ 560 $ 575 $ 544 $ 591 $ 677 Prior Year Book Variance $ (36,665) $ (22,125) $ (28,582) $ (27,016) $ (22,506) $ (19,020) Interest Earnings 155 166 173 227 207 233 Yield -To -Maturity 0.96% 0.93% 1.12% 1.16% 1.28% 1.45% Weighted Maturity (Days) 311 295 351 363 415 461 Effective Duration 0.15 0.17 0.21 0.23 0.23 0.28 RDA Month -End Book Value *** $ 257,899 $ 276,345 $ 298,512 $ 302,563 $ 299,721 $ 285,335 Month -End Market Value *** $ 258,372 $ 276,806 $ 299,018 $ 303,003 $ 299,998 $ 285,685 Paper Gain (Loss) $ 473 $ 461 $ 506 $ 440 $ 277 $ 350 Prior Year Book Variance $ (8,043) $ 471 $ 14,305 $ 15,272 $ 6,001 $ 32,808 Interest Earnings 166 193 195 200 171 175 Yield -To -Maturity 0.59% 0.79% 0.76% 0.78% 0.69% 0.74% Weighted Maturity (Days) 296 367 339 344 226 237 Effective Duration 0.47 0.51 0.49 0.51 0.31 0.34 *** Omits SLGSs. City of Palm Desert -- Portfolio Characteristics September 30, 2010 Dollars in Thousands Aceing Interval Market Value < 1 M $ 88,166 < 2M 1,915 < 3M 3,034 < 6M 8,132 < 1 YR 14,256 < 2YR 12,138 < 3YR 15,032 < 4YR _ < 5YR _ > 5YR _ Total: $ 142,673 Ratings Market Value AAA $ 106,262 AA 17,166 A 6,948 Unrated *' 62,314 Total: $ 192,690 Sector Market Value MMF $ 30,654 Agencies 42,274 MTNs 24,114 CAMP 33,334 RDA Loan 22,655 LAIF 39,659 Total: $ 192,690 Month City Yield LAIF Yield Variance Oct09 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 Feb 1.41 0.58 0.83 Mar 1.43 0.55 0.88 Apr 1.41 0.59 0.83 May 1.25 0.56 0.69 Jun 1.16 0.53 0.63 Jul 1.12 0.53 0.59 Aug 0.93 0.51 0.41 Sep 0.96 0.50 0.46 General Fund Ageing 100 80 0 60 40 0 IL 20 0 Credit Quality ��sset,itl�llocation Performance 2.1 1.4 e m } 0.7 0.0 Oct091ovDedan1FebMarAprMayJun Jul AugSep 1 62 1 2 6 10 9 11 j 1 M 2M 3M 6M 1 YR 2YR 3YR 4YR 5YR 5YR AAA 55% Unrated 32% AA A 9% 4% MTNs 13% CAMP Agencies 17% 21% RDA Loan M M Fe 12% 16% LAIF 21% Standard and Poors *" LAIF, and City Loan to RDA Page 2 City of Palm Desert Portfolio Holdings September 30, 2010 Market I Ratings Par Value Issuer Coupon I Maturity Cost YTM I Price I Value I Moodv's IS&P Medium -Term Notes $ 3,795,000 BANK OF AMERICA 5.38 8/15/11 $ 3,835,531 4.05 104.03 $ 3,947,901 A2 A $ 3,000,000 BANK OF AMERICA 4.25 10/1/10 $ 3,000,000 3.20 100.00 $ 3,000,000 A2 A $ 2,035,000 GENERAL ELECTRIC 4.88 10/21/10 $ 2,034,249 5.63 100.20 $ 2,038,983 Aa2 AA+ $ 1,891,000 GENERAL ELECTRIC 6.88 11/15/10 $ 1,893,474 5.65 100.72 $ 1,904,608 Aa2 AA+ $ 2,000,000 GENERAL ELECTRIC 6.13 2/22/11 $ 2,003,119 5.67 102.25 $ 2,044,944 Aa2 AA+ $ 3,965,000 GENERAL ELECTRIC 4.88 10/21/10 $ 3,968,443 3.23 100.20 $ 3,972,760 Aa2 AA+ $ 3,000,000 TOYOTA 4.35 12/15/10 $ 3,024,033 7.00 100.78 $ 3,023,349 Aal AA $ 4,000,000 WELLS FARGO BANK 6.38 8/1/11 $ 4,036,649 5.13 104.54 $ 4,181,612 Al AA $ 23,686,000 Subtotal $ 23,795,498 3.93 $ 24,114,155 Agencies -- Coupon $ 3,000,000 FED FARM CREDIT BANK 3.50 10/3/11 $ 3,075,481 0.97 103.16 $ 3,094,688 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 1.63 7/27/11 $ 3,019,441 1.18 101.06 $ 3,031,875 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 0.44 10/7/10 $ 3,000,060 0.32 100.00 $ 3,000,000 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 1.63 3/16/11 $ 3,015,532 0.41 100.66 $ 3,019,688 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 1.10 8/28/12 $ 2,999,436 1.11 101.06 $ 3,031,875 Aaa AAA $ 3,000,000 FED HOME LOAN MTG CORP 1.63 4/26/11 $ 3,016,726 0,60 100.75 $ 3,022,500 Aaa AAA $ 3,000,000 FED HOME LOAN MTG CORP 4.13 2/24/11 $ 3,042,795 0.52 101.53 $ 3,045,938 Aaa AAA $ 3,000,000 FED NATIONAL MTG ASSOC 1.75 12/28/12 $ 2,996,587 1.91 100.28 $ 3,008,438 Aaa AAA $ 24,000,000 Subtotal $ 24,166,058 0.88 $ 24,255,000 Agencies -- Callable $ 3,000,000 FED HOME LOAN BANK 1.00 10/28/11 $ 3,000,000 1.00 100.06 $ 3,001,875 Aaa AAA $ 2,980,000 FED HOME LOAN BANK 1.88 11/19/12 $ 2,984,884 1.61 100.19 $ 2,985,588 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 1.85 12/21/12 $ 3,000,709 1.82 100.25 $ 3,007,500 Aaa AAA $ 3,000,000 FED HOME LOAN MTG CORP 1.25 1/26/12 $ 3,000,000 1.25 100.23 $ 3,007,011 Aaa AAA $ 6,000,000 FED NAT MTG ASSOC 1.75 12/28/12 $ 5,993,453 1.90 100.28 $ 6,016,875 Aaa AAA $ 17,980,000 Subtotal $ 17,979,046 1.58 $ 18,018,849 Local Agency Investment Fund $ 39,658,990 L.A.I.F. 0.00 10/1110 $ 39,658,990 0.50 100.00 $ 39,658,990 U U $ 39,658,990 Subtotal $ 39,658,990 0.50 $ 39,658,990 Local Agency Investment Fund $ 33,326,147 C.A.M.P. 0.00 10/1/10 $ 33,326,147 0.27 100.00 $ 33,326,147 U AAA $ 7,742 C.A.M.P. (DESERT WILLOW) 0.00 10/1/10 $ 7,742 0.27 100.00 $ 7,742 U AAA $ 33,333,888 Subtotal $ 33,333,888 0.27 $ 33,333,888 Money Market Fund $ 30,654,557 WF ADVANTAGE GOVT MMF 0.00 10/1110 $ 30,654,557 0.05 100.00 $ 30,654,557 Aaa AAA $ 30,654,557 Subtotal $ 30,654,557 0.05 $ 30,654,557 "U" = Unrated Page 3 City of Palm Desert Portfolio Holdings September 30, 2010 Market Ratings Par Value Issuer Coupon I Maturity Cost YTM I Price Value Moody's I S&P City Loan to RDA $ 22,655,000 CITY OF PALM DESERT 0.00 10/1/40 $ 22,655,000 0.50 100.00 $ 22,655,000 U U S 22.655.000 Subtotal $ 22,655,000 0.50 $ 22,655,000 Total Investments $ 191,968,435 $ 192,243,038 0.96 $ 192,690,439 Cash $ 3,146,022 CITY MAIN CHKG 0.00 10/1/10 $ 3,146,022 0.00 100.00 $ 3,146,022 U U $ 287,395 DESERT WILLOW CHKG 0.00 10/1/10 $ 287,395 0.00 100.00 $ 287,395 U U $ 52,037 RECREATIONAL FAC CHKG 0.00 10/1110 $ 52,037 0.00 100.00 $ 52,037 U U $ 3,485,454 Subtotal $ 3,485,454 $ 3,485,454 Total Investments and Cash $ 195,453,889 $ 195,728,492 $ 196,175,893 % of Portfolio Corporate Issuers (Market Value BANK OF AMERICA 3.54% GENERAL ELECTRIC 5.08% TOYOTA 1.54% WELLS FARGO BANK 2.13% "U" = Unrated Page 4 City of Palm Desert Portfolio Holdings September 30, 2010 Market Ratings Par Value Issuer Coupon I Maturityl Cost YTM I Price I Value Moody's I S&P % of Portfolio Issuers FED FARM CREDIT BANK 1.58% FED HOME LOAN BANK 10.74% FED HOME LOAN MTG CORP 4.63% FED NATIONAL MTG ASSOC 4.60% "U" = Unrated Page 5 Palm Desert Redevelopment Agency -- Portfolio Characteristics September 30, 2010 Dollars in Thousands Aneina Interval Market Value < 1 M $ 34,989 < 2M 3,002 < 3M _ < 6M 13,044 < 1YR 3,112 < 2YR 34,134 < 3YR 15,046 < 4YR _ < 5YR _ > 5YR 3,151 Total: $ 106,478 ualit Market Value AAA $ 132,469 AA 83,113 A 10,004 Unrated *" 31,656 Total: $ 257,242 Portfolio Ageing w/o SLGSs 100 -.__._.._..__._.__..__......___....__...__.._.__._.__.__._..__._..._..__ 80 2 60 0 40 33 32 j a 20 12 14 i 3 p 3 0 0 3 o I < < < < < < < < < > I 2M 3M 6M 1YR 2YR 3YR 4YR 5YR 5YR Credit Quality AAA AA 52% 32% Unrated '* 12% A 4% Sector Market Value Asset Allocation Agencies MMF $ 70,951 21 % MTNs Agencies 55,277 5% CAMP MTNs 13,050 1% 3,090 LA LAW LAW31,656 28% 12%MMF EIP 3,151 EIP LAIF/Bond Proceeds 80,067 LAIF/Bond 1% Total: $ 257,242 Proceeds 32% Month RDA Yield LAW Yield Variance Performance Oct09 0.96 0.65 0.32 Nov 1.21 0.61 0.59 Dec 1.21 0.57 0.64 Jan10 0.72 0.56 0.16 Feb 0.69 0.58 0.12 Mar 0.70 0.55 0.15 Apr 0.74 0.59 0.15 May 0.69 0.56 0.13 Jun 0.78 0.53 0.25 Jul 0.76 0.53 0.23 Aug 0.79 0.51 0.28 Sep 0.59 0.50 0.09 1.4 0.7 d 0.0 Oct09Jov Dedan10=eb Mar Apr May Jun Jul Aug Sep 0 LAW Yield 0 RDA Yield * Standard and Poors ** LAIF Page 6 Palm Desert Redevelopment Agency Portfolio Holdings September 30, 2010 Market Ratings Par Value Issuer Coupon Maturity Cost YTM I Price I Value Moody's I S&P Medium -Term Notes $ 3,000,000 ABBOTT LABS 3.75 3/15/11 $ 3,042,827 0.60 101.53 $ 3,046,029 Al AA $ 3,450,000 BEAR STEARNS (JPM) 6.95 8/10/12 $ 3,769,218 1.83 110.54 $ 3,813,792 Aa3 A+ $ 3,000,000 JP MORGAN CHASE 3.13 12/1/11 $ 3,077,389 0.69 103.09 $ 3,092,688 Aa3 A+ $ 3,000,000 JP MORGAN CHASE 5.60 6/1/11 $ 3,094,224 0.85 103.27 $ 3,097,950 Aa3 A+ $ 12,450,000 Subtotal $ 12,983,659 1.04 $ 13,050,459 Agencies -- Coupon $ 2,000,000 FED HOME LOAN BANK 4.88 3/11 /11 $ 1,994,869 5.49 102.06 $ 2,041,250 Aaa AAA $ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,994,801 5.50 102.06 $ 2,041,250 Aaa AAA $ 2,890,000 FED HOME LOAN BANK 2.88 3111/11 $ 2,920,454 0.49 101.16 $ 2,923,416 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 0.50 11/29/10 $ 3,001,008 0.36 100.03 $ 3,000,938 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 1.13 12/9/11 $ 3,006,869 0.96 100.88 $ 3,026,250 Aaa AAA $ 2,000,000 FED HOME LOAN BANK 1.10 8/28/12 $ 1,999,624 1.11 101.06 $ 2,021,250 Aaa AAA $ 2,500,000 FED HOME LOAN BANK 1.10 8/28/12 $ 2,499,530 1.11 101.06 $ 2,526,563 Aaa AAA $ 2,500,000 FED HOME LOAN BANK 1.10 8/28/12 $ 2,499,537 1.11 101.06 $ 2,526,563 Aaa AAA $ 2,500,000 FED HOME LOAN BANK 1.38 10/29/12 $ 2,508,928 1.20 101.69 $ 2,542,188 Aaa AAA $ 4,900,000 FED HOME LOAN BANK 1.75 12/14/12 $ 4,942,828 1.40 102.38 $ 5,016,375 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 1.10 8/28/12 $ 2,999,445 1.11 101.06 $ 3,031,875 Aaa AAA $ 2,940,000 FED NATIONAL MTG ASSOC 1.75 3/23/11 $ 2,957,569 0.43 100.72 $ 2,961,131 Aaa AAA $ 9,000,000 FED NATIONAL MTG ASSOC 1.00 11/23/11 $ 9,006,099 1.00 100.75 $ 9,067,500 Aaa AAA $ 2,500,000 FED NATIONAL MTG ASSOC 1.13 7/30/12 $ 2,502,344 1.08 101.09 $ 2,527,344 Aaa AAA $ 44,730,000 Subtotal $ 44,833,906 1.36 $ 45,253,891 Agencies -- Callable $ 2,500,000 FED FARM CREDIT BANK 1.90 11/16/12 $ 2,510,842 0.78 100.16 $ 2,503,906 Aaa AAA $ 2,500,000 FED FARM CREDIT BANK 1.90 11/16/12 $ 2,510,842 0.78 100.16 $ 2,503,906 Aaa AAA $ 2,500,000 FED HOME LOAN MTG CORP 1.20 6/15/12 $ 2,502,558 1.08 100.51 $ 2,512,755 Aaa AAA $ 2,500,000 FED NATIONAL MTG ASSOC 1.88 10/29/12 $ 2,512,755 0.41 100.09 $ 2,502,344 Aaa AAA $ 10,000,000 Subtotal $ 10,036,997 0.76 $ 10,022,911 Local Government Investment Pool $ 31,633,624 L.A.I.F. 0.00 10/1 /10 $ 31,633,624 0.50 100.00 $ 31,633,624 U U $ 22,120 L.A.I.F. (HOUSING) 0.00 10/1/10 $ 22,120 0.50 100.00 $ 22,120 U U $ 31,655,745 Subtotal $ 31,655,745 0.50 $ 31,655,745 "U" = Unrated Page 7 Palm Desert Redevelopment Agency Portfolio Holdings September 30, 2010 Market Ratings Par Value Issuer Coupon I Maturity Cost YTM I Price I Value MoodVs I S&P Local Government Investment Pool $ 17,201,590 L.A.I.F. / WELLS FARGO 0.00 10/1/10 $ 17,201,590 0.50 100.00 $ 17,201,590 U AA $ 4,811,088 L.A.I.F. / WELLS FARGO 0.00 10/1/10 $ 4,811,088 0.50 100.00 $ 4,811,088 U AA $ 24,673,793 L.A.I.F. / WELLS FARGO 0.00 10/1/10 $ 24,673,793 0.50 100.00 $ 24,673,793 U AA $ 1,692,270 L.A.I.F. / WELLS FARGO 0.00 10/1/10 $ 1,692,270 0.50 100.00 $ 1,692,270 U AA $ 15,154,481 L.A.I.F. / WELLS FARGO 0.00 10/1/10 $ 15,154,481 0.50 100.00 $ 15,154,481 U AA $ 16,534,174 L.A.I.F. / WELLS FARGO 0.00 10/1/10 $ 16,534,174 0.50 100.00 $ 16,534,174 U AA $ 80,067,397 Subtotal $ 80,067,397 0.50 $ 80,067,397 Local Government Investment Pool $ 1,475,523 C.A.M.P. 0.00 10/1/10 $ 1,475,523 0.27 100.00 $ 1,475,523 U AAA $ 1,614,211 C.A.M.P. (HOUSING) 0.00 10/1/10 $ 1,614,211 0.27 100.00 $ 1,614,211 U AAA $ 3,089,734 Subtotal $ 3,089,734 0.27 $ 3,089,734 Money Market Fund $ 70,951,234 WF ADVANTAGE GOVT MMF 0.00 10/1/10 $ 70,951,234 0.05 100.00 $ 70,951,234 Aaa AAA $ 70,951,234 Subtotal $ 70,951,234 0.05 $ 70,951,234 Municipal Bonds $ 3,151,000 CITY OF PALM DESERT 0.00 912/29 $ 3,151,000 3.00 100.00 $ 3,151,000 U AA $ 3,151,000 Subtotal $ 3,151,000 3.00 $ 3,151,000 Total Investments $ 256,095,109 $ 256,769,671 0.59 $ 257,242,370 Cash $ 719,648 HOUSING AUTH CHKG 0.00 10/1/10 $ 719,648 0.00 100.00 $ 719,648 U U $ 410,004 HOUSING AUTH TRUST 0.00 10/1/10 $ 410,004 0.00 100.00 $ 410,004 U U $ 1,129,652 Subtotal $ 1,129,652 $ 1,129,652 Total Investments and Cash $ 257,224,761 $ 257,899,323 $ 258,372,023 "U" = Unrated Page 8 Palm Desert Redevelopment Agency Portfolio Holdings September 30, 2010 Market IRatings Par Value Issuer Coupon I Maturity Cost YTM I Pr1c-eA e I MoodVs I S&P % of Portfolio Corporate Issuers (Market Value) ABBOTT LABS 1.18% BEAR STEARNS (JPM) 1.48% JP MORGAN CHASE 2.40% "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 September 30, 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 October 26, 2010, PaidlS, riavon,, C. C. m. T. * City Treasurer SUMMARY OF AUTHORIZED INVESTMENTS California Government Code I 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 0.0% 1.2% 53632(c Savings Accounts No Limit No Limit No Limit No Limit 0.0% 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 Not Authorized 53601 a Federal Agencies 5 Years No Limit 5 Years 30% 6% 21.9% 21.4% 53601 Bankers's Acceptances 180 Days 40% 180 Days 400% A-1 & P-1 53601 Commercial Paper 270 Days 25% A-1+ or P-1 270 Days 25% A-1+ or P-1 0.0% 0.0% 53601 h Negotiable CDs 5 Years 30% 5 Years 30% AA- or Aa3 - _ 53601 i Re os 1 Year No Limit 30 Days 20% AAA & Aaa 53601(i) Reverse Repos 92 Days 20% Not Authorized 53601 ' Medium -Term Notes 5 Years 30% A 5 Years 30% A 12.4% 5.2% 53601 k Mutual Funds 90 Da s 20% AAA & Aaa 90 Da s 20% (2) AAA &Aaa 16.0% 27.6% 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 Da s 20% (2) or AUvlovl I I7.3% 1.2% 53601(n) Mortgage -Backed 5 Years 20% A (Issuer) & Not Authorized Securities AA Securit yA 16429.1 b LAW No Limit No Limit 20.6% 43.5% (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. 88.2% 100.0% 3 Maximum limit for mutual funds and local government investment pools, excluding bond proceeds. Certified California Municipal Treasurer Page 10