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Home My WebLink AboutCompliance Analysis Investment Reports - March and April 2005xC CITY OF PALM DESERT FINANCE DEPARTMENT INTEROFFICE MEMORANDUM TO: RACHELLE KLASSEN, CITY CLERK FROM: NIAMH ORTEGA, RECORDING SECRETARY\\" DATE: MAY 25, 2005 SUBJECT: COMPLIANCE ANALYSIS AND INVESTMENT REPORTS a =; c.� c.> cn C, n� r � JfVjn N � m N rn. n� rn Please find attached the Compliance Analysis and Investment Reports for March and April 2005 which were presented and approved at the meeting of May 25, 2005. Please include on the upcoming agenda for review and acceptance by City Council. Please feel free to contact me at Ext. 382 if you have any questions. Thank you. nmo Attachment (as noted) G.Ttnancefta" Ortega\W pdocsUnveslment Cornmttee1N$erriosVklasseninvreporl0 t 2605.wpd `�r<tyf Parm desert _ "City and �tedevefopmnt Agency Porifoi%s cep ... iAN ` E A+N�►t'��t � 4i�l�' t�v � �.:, , lUi C S' `� S AT •: .: Y. s. - �.��. •t`.:•�. �•iac�`_ :J+'-�zrr '- Ya'^.'-s..:�«-.`i^-••,�•. •_ -�,• .• ,*t+--�r?w�.•_e,..4:.; 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 March 22nd, and raised the Federal Funds Rate from 2.50% to 2.75%. The Committee adopted a more hawkish stance on inflation, and began to distance itself from "measured" rate increases. Although the FOMC's press release referenced language from earlier meetings that "... long-term inflation expectations were well contained," it qualified that with "... pressures on inflation have increased in recent months, and pricing power is more evident." The FOMC stated that short-term interest rate increases would continue at a pace that would likely be measured. The next FOMC meeting will be on May 3rd. A fundamental change has occurred in the corporate debt market. Unsecured corporate debt has become scarce due to the convergence of three events: an all-time high of corporate cash holdings; a shift towards issuing secured corporate debt; and aggressive buying by hedge funds. Since corporations are hoarding cash, there is little need for them to issue debt. If they do issue debt, then it is increasingly secured debt (asset -backed securities) since it represents the lowest cost of capital for them. Meanwhile, hedge funds are aggressively buying the remaining unsecured corporate debt in order to maximize profit for their clients. This explains why the City has had difficulty finding any unsecured corporate debt to buy over the last year. The City will accordingly shift to buying Agency securities and asset -backed securities. If there is an opportunity to buy high -quality, investment -grade, unsecured corporate debt, then the City will take it. Pis c.C.M r. Treasurer PORTFOLIO STATISTICS Dollars in Thousands MAR-05 FEB-05 JAN-05 DEC-04 NOV-04 OCT-04 CITY Month -End Book Value— $ 146,856 $ 142,687 $ 140,218 $ 124,724 $ 128,602 $ 130,550 Month -End Market Value— $ 146,787 $ 142,852 $ 140,446 $ 124,992 $ 128,877 $ 130,866 Paper Gain (Loss) $ (69) $ 165 $ 228 $ 268 $ 275 $ 316 Prior Year Book Variance $ 20,165 $ 17,749 $ 12,381 $ (8,112) $ (3,536) $ (3,592) Interest Earnings $ 325 $ 283 $ 243 $ 222 $ 214 $ 200 Yield -To -Maturity 2.79% 2.66% 2.54% 2.26% 2.08% 1.96% Weighted Maturity (Days) 170 172 178 121 119 124 Effective Duration 0.28 0.30 0.32 0.14 0.15 0.17 RDA Month -End Book Value "' $ 158,324 $ 159,105 $ 160,560 $ 147,802 $ 148,730 $ 149,149 Month -End Market Value "' $ 158,129 $ 159,134 $ 160,623 $ 147,862 $ 148,761 $ 149,180 Paper Gain (Loss) $ (195) $ 29 $ 63 $ 60 $ 31 $ 31 Prior Year Book Variance $ (5,191) $ (5,466) $ (2,570) $ 6,079 $ 4,546 $ 4,929 Interest Earnings $ 375 $ 285 $ 268 $ 239 $ 221 $ 216 Yield -To -Maturity 2.58% 2.37% 2.23% 2.00% 1.84% 1.73% Weighted Maturity (Days) 80 136 127 65 65 65 Effective Duration 0.18 0.20 0.20 0.05 0.07 0.09 "` Omits SLGSs. City of Palm Desert -- Portfolio Characteristics 31 March 2005 Dollars in Thousands Acieina Interval Market Value < 1 M $ 55,637 < 2M 3,038 < 3M 8,037 < 6M 15,997 < 1YR - < 2YR 3,183 < 3YR 8,744 < 4YR - < 5YR > 5YR - Total: $ 94,636 Ratings ` Market Value AAA $ 28,130 Unrated " 72,785 AA 6,160 A 2,415 A-1 13,991 BBB- 11,929 Total: $ 135,410 Sector Market Value Money Market Funds $ 19,056 LAIF 40,000 RDA Loan 32,785 MTNs 20,503 Federal Agency 9,075 Commercial Paper 13,991 Total: $ 135,410 Month Citv Yield LAIF Yield Apr04 1.54 1.45 May 1.53 1.43 Jun 1.58 1.47 Jul 1.68 1.60 Aug 1.74 1.67 Sep 1.84 1.77 Oct 1.96 1.89 Nov 2.08 2.00 Dec 2.26 2.20 Jan05 2.54 2.26 Feb 2.66 2.37 Mar 2.79 2.54 General Fund Ageing 100 80 - 59 0 60 0 1i 40 - 0 o. 17 20 g 17 9 0 r 3-� n I 1 ° n < 1 M < 2M < 3M < 6M < 1 YR < 2YR < 3YR �- ------ - - - AAA (Credit Quality 21% BBB_ Unrated " 9% 53% A-1 ° AA 2 /° 5% i Asset Allocation LAIF ,ram RDA Loan 30%aa 24% MTNs Money Market 15% Funds 14% Commercial Federal Paper Agency 10% 7% Variance Performance 0:09 0.11 3.0 0.11 0.07 2.6 0.06 0.07 0 2.2 0.07 } 1.8 0.08 0.06 1.4 0.28 Apr04 May Jun Jul Aug Sep Oct Nov Dec Jan05 Feb Mar 0.29 0.25 ELAIF Y eld ■C ly Yield) ` Moody's Credit Ratings " LAW, and City Loan to RDA Page 2 of 8 City of Palm Desert Portfolio Holdings 28 February 2005 Market Par Value Issuer lCouponj Maturity I Cost I YTM I Price J Value Medium -Term Notes $ 2,406,000 ABBOTT LABS 6.80 $ 3,000,000 BANK ONE 4.13 $ 3,000,000 FORD MOTOR CREDIT 7.20 $ 2,500,000 FORD MOTOR CREDIT 7.20 $ 1,610,000 FORD MOTOR CREDIT 6.75 $ 4,612,000 FORD MOTOR CREDIT 7.20 $ 3,000,000 GOLDMAN SACHS 7.20 $ 20,128,000 Subtotal Commercial Paper -- Discount $ 3,000,000 GENERAL ELECTRIC 2.56 $ 3,000,000 GENERAL ELECTRIC 2.63 $ 3,000,000 GENERAL ELECTRIC 2.71 $ 5,050,000 GENERAL ELECTRIC 2.73 J $ 14,050,000 Subtotal Federal Agencies -- Discount $ 1,015,000 FED NATIONAL MTG ASSOC 1.92 $ 3,045,000 FED NATIONAL MTG ASSOC 1.79 $ 5,047,000 FED NATIONAL MTG ASSOC 2.71 1 $ 9,107,000 Subtotal LGIP $ 40,000,000 L.A.I.F. 0.00 $ 40,000,000 Subtotal LGIP $ 9,438,878 C.A.M.P. 0.00 J $ 9,438,878 Subtotal Pooled Funds -- AIM $ 9,616,598 PRIME PORTFOLIO 0.00 J $ 9,616,598 Subtotal City Loan to RDA $ 32,785,480 CITY OF PALM DESERT 0.00 $ 32,785,480 Subtotal Total Investments $ 135,125,956 5/15/05 $ 2,419,669 2.08 100.37 $ 2,414,825 9/1/07 $ 3,033,162 3.64 100.12 $ 3,003,483 6/15/07 $ 3,084,319 5.75 101.99 $ 3,059,676 6/15/07 $ 2,570,265 5.75 101.99 $ 2,549,730 5/15/05 $ 1,617,660 2.80 100.30 $ 1,614,788 6/15/07 $ 4,810,401 5.10 101.99 $ 4,703,742 3/1107 $ 3,203,271 3.50 105.22 $ 3,156,648 $ 20,738,747 4.29 $ 20,502,892 5/13/05 $ 2,976,107 2.62 99.67 $ 2,990,074 6/15/05 $ 2,968,221 2.70 99.90 $ 2,997,000 7/15105 $ 2,960,479 2.78 99.64 $ 2,989,220 6/22/05 $ 4,999,067 2.80 99.31 $ 5,015,071 $ 13,903,873 2.73 $ 13,991,365 5/2/05 $ 997,021 2.00 99.76 $ 1,012,564 4/1/05 $ 2,999,427 1.86 100.00 $ 3,045,000 6/15/05 $ 4,999,129 2.77 99.41 $ 5,017,223 $ 8,995,577 2.38 $ 9,074,787 4/1/05 $ 40,000,000 2.54 100.00 $ 40,000,000 $ 40,000,000 2.54 $ 40,000,000 4/1/05 $ 9,438,878 2.43 100.00 $ 9,438,878 $ 9,438,878 2.43 $ 9,438,878 4/1/05 $ 9,616,598 2.29 100.00 $ 9,616,598 $ 9,616,598 2.29 $ 9,616,598 4/1/35 $ 32,785,480 2.54 100.00 $ 32,785,480 $ 32,785,480 2.54 $ 32,785,480 $ 135,479,154 2.79 $ 135,410,000 Ratings ' Moody's I S & P Al Aa3 A3 A3 A3 A3 Aa3 P-1 P-1 P-1 P-1 AA A+ BBB - BBB - BBB - BBB - A+ Aaa AAA Aaa AAA Aaa AAA U U U AAA Aaa AAA U U 'U' = Unrated Page 3 of 8 Par Value Issuer Cash $ 10,003,995 CITY MAIN CHKG $ 802,817 DESERT WILLOW CHKG $ 570,476 RECREATIONAL FAC CHK $ 11,377,287 Subtotal Total Cash and Investments $ 146,503,243 Corporate Issuers City of Palm Desert Portfolio Holdings 28 February 2005 Market Ratings lCouponi Maturity I Cost I YTM I Price I Value Moody'sI S & P 0.00 4/1/05 $ 10,003,995 0.00 100.00 $ 10,003,995 N/A N/A 0.00 4/1/05 $ 802,817 0.00 100.00 $ 802,817 N/A N/A 0.00 4/1/05 $ 570,476 0.00 100.00 $ 570,476 N/A N/A $ 11,377,287 $ 11,377,287 GENERAL ELECTRIC CAPITAL CORPORATION FORD MOTOR CREDIT CORPORATION GOLDMAN SACHS BANK ONE ABBOTT LABS $ 146,856,441 % of Portfolio (Market Value) 9.53% 8.13% 2.17% 2.06% 1.65% $ 146,787,287 "U" = Unrated Page 4 of 8 Dollars in Thousands AQeinq Interval < 1 M < 2M < 3M < 6M < 1YR < 2YR < 3Y R < 4YR < 5YR > 5YR Total: Quality AAA Unrated " A-1 BBB - Total: Sector LAIF Money Market Funds Federal Agency Commercial Paper Corporate Bonds U.S. Treasury Total: Month Apr04 May Jun Jul Aug Sep Oct Nov Dec Jan05 Feb Mar RDA Yield 1.22 1.17 1.37 1.53 1.51 1.61 1.73 1.84 2.00 2.23 2.37 2.58 Palm Desert Redevelopment Agency -- Portfolio Characteristics 31 March 2005 Market Value $ 70,038 2,957 3,608 6,155 5,879 $ 88,637 Market Value $ 85,512 60,704 2,964 6,603 $ 155,783 Market Value $ 60,704 76,609 8,903 2,964 6,603 $ 155,783 LAIF Yield 1.45 1.43 1.47 1.60 1.67 1.77 1.89 2.00 2.20 2.26 2.37 2.54 Portfolio Ageing w/o SLGSs� 100 90 - 79 80 - -- 70 c 60 0 50 - 40 CO 30 20 10 0 0 3 4 7 7 0 0 --- % i--, < 1 M < 2M < 3M < 6M < 1 YR < 2YR < 3YR < 4YR Credit Cualityj AAA 55% Unrated " - Asset Allocation Variance Performances -0.23 -0.26 ` -V. IV 2.6 -0.08 -0.16 0 2.2 -0.17 d 1.8 -0.16 > -0.17 1.4 -0.20 1.0 -0.03 A0r04 May Jun Jul Aug Sep Oct Nov Dec Jan05 Feb Mar 0.00 0.04 ®LAIF Yield ■RDA Yield 39% BBB- 4% A-1 2% LAIF Money Market 39% Funds Corporate 49% Bonds 4% Commercial Federal Paper Agency 2% 6% ' Moody's Credit Ratings LAIF Page 5 of 8 Palm Desert Redevelopment Agency Portfolio Holdings 31 March 2005 Market Ratings Par Value Issuer lCouponj Maturity I Cost I YTM I Price I Value , Moody'sI S & P Medium -Term Notes $ 3,000,000 FORD MOTOR CREDIT 6.50 1/25/07 $ 3,084,494 4.85 101.01 $ 3,030,429 A3 $ 3,525,000 FORD MOTOR CREDIT 6.88 2/1/06 $ 3,608,591 3.94 101.36 $ 3,572,933 A3 $ 6,525,000 Subtotal $ 6,693,085 4.36 $ 6,603,362 Commercial Paper - Discount $ 3,000,000 GENERAL ELECTRIC 2.77 8/15105 $ 2,952,448 2.87 98.82 $ 2,964,494 P-1 $ 3,000,000 Subtotal $ 2,952,448 2.87 $ 2,964,494 Federal Agency - Coupon $ 3,000,000 FED FARM CREDIT BANK 2.63 9/17/07 $ 2,942,893 3.43 96.63 $ 2,898,750 Aaa $ 3,000,000 FED HOME LOAN BANK 3.38 9/14/07 $ 2,993,237 3.82 98.44 $ 2,953,125 Aaa $ 3,000,000 FED HOME LOAN MTG 4.88 3/15/07 $ 3,083,779 3.38 101.69 $ 3,050,625 Aaa Is 9,000,000 Subtotal $ 9,019,909 3.54 $ 8,902,500 LGIP $ 40,000,000 L.A.I.F. (RDA) 0.00 411105 $ 40,000,000 2.54 100.00 $ 40,000,000 U $ 5,727,930 L.A.I.F. (HOUSING) 0.00 4/1105 $ 5,727,930 2.54 100.00 $ 5,727,930 U $ 5,092,135 L.A.I.F. BOND PROCEEDS 0.00 4/1/05 $ 5,092,135 2.54 100.00 $ 5,092,135 U $ 9,883,828 L.A.I.F. BOND PROCEEDS 0.00 4/1/05 $ 9,883,828 2.54 100.00 $ 9,883,828 U $ 60,703,893 Subtotal $ 60,703,893 2.54 $ 60,703,893 LGIP $ 17,537,245 C.A.M.P. 0.00 4/1/05 $ 17,537,245 2.43 100.00 $ 17,537,245 U $ 17,537,245 Subtotal $ 17,537,245 2.43 $ 17,537,245 Pooled Funds - AIM $ 59,072,068 PRIME PORTFOLIO 0.00 411105 $ 59,072,068 2.29 100.00 $ 59,072,068 Aaa. $ 59,072,068 Subtotal $ 59,072,068 2.29 $ 59,072,068 Total Investments $ 155,838,206 $ 155,978,648 2.58 $ 155,783,562 Cash $ 2,017,977 HOUSING AUTH CHKG 0.00 4/1/05 $ 2,017,977 0.00 100.00 $ 2,017,977 N/A $ 327,549 HOUSING AUTH TRUST 0.00 4/1/05 $ 327,549 0.00 100.00 $ 327,549 N/A $ 2,345,525 Subtotal $ 2,345,525 $ 2,345,525 Total Investments and Cash 158,183,731 158,324,173 158,129,087 BBB- BBB- AAA AAA AAA 7 U U U U AAA I AAA I N/A N/A "U" = Unrated Page 6 of 8 Par Value I Issuer Corporate Issuers Palm Desert Redevelopment Agency Portfolio Holdings 31 March 2005 lCouponj Maturity FORD MOTOR CREDIT CORPORATION GENERAL ELECTRIC CAPITAL CORPORATION Cost % of Portfolio (Market Value) 4.18% 1.87% Market YTM I Price I Value Ratings Moody's I S & P 'U' = Unrated Page 7 of 8 STATEMENT OF COMPLIANCE The investment portfolios of the City of Palm Desert ("City") and the Palm Desert Redevelopment Agency ('RDA") are governed by federal, state, and local law. The City Treasurer's "Statement of Investment Policy" is more restrictive than the California Government Code. The Palm Desert Investment Committee and the Palm Desert City Council review the Statement of Investment Policy annually. For the month ended 31 March 2005, the City and the RDA investment portfolios were in compliance with all applicable federal, state, and local laws and regulations. The City Treasury continued to pursue conservative and prudent investment strategies, based upon the stated objectives of safety, liquidity, and yield (in order of priority). Barring unforeseen events, the City Treasury should have sufficient cash to finance the operations of the City of Palm Desert and the Palm Desert Redevelopment Agency over the next six months. In addition, portions of either the City or the RDA portfolio could be liquidated in order to meet any significant, unexpected cash requirements. Bloomberg L.P. and Interactive Data Corporation provided the data and the analytical tools that were used to calculate the market value of all securities in the City and the RDA investment portfolios. State and Local Government Series securities are held in escrow accounts and are therefore not included in this report as assets. All balances are bank balances. Respectfully submitted on 27 April 2005, Pis Gam C C. At. r. * City Treasurer SUMMARY OF AUTHORIZED INVESTMENTS I 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 NotAuthorized 1) 53601(b) U.S. Treasuries 5 Years No Limit 5 Years, No -Limit I I 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 Se) Federal jigencies , 5 Years No Limit 5 Years 30% 6% 6.6 5.8% 53601M BankersAcceptances 180. Days - 40% 180 Days 40% A-1 & P-1 - - 53601(g) Commefcial'Paper 270 Days 25% A-1+ or P-1 270 Days 25% A-1+ or'P-1 10.3% 1.9% 53601(h) Negotiable CDs _ 5 Years 30% 5 Years 30%. _ AA- or Aa3 - - 53601(i) Repos 1 Year No Limit 30 Days 20%. AAA- 53601(i) Reverse Repos 92 Days 20% Not Authorized 536010) Medium -Term Notes- 5 Years 30% A 5 Years 30%- A 15.3% 4.3% 53601(k) Mutual Funds : _ 90 Days 20% AAA & Aaa' 90 Days 20% 1 AAA & Aaal 7.1%'. I 37.9% 53601(I) Trust Indenture Debt NotAuthorized 53601(m) Secured Bank Deposits 5 Years No Limit Not Authorized 53601(k) Local Government ' AAA & Aaa AAA & Aaal ` Investment Pools 90 Days 201% _ or Advisor , 90 Days I 20% (2) I or Advisor 1 7.0% I 11.2% _ 53601(n) Mortgage -Backed 5 Years 20% A (Issuer) & Not Authorized Securities AA (Security) LACE_=Z5: No Limii, No Limit. 29.5% 38.9%` (1) The City loan to RDA, which is not a bond, has been approved by the Palm Desert City Council. I 75.8% I 100.0% (2) Maximum limit for mutual funds and local government investment pools, excluding bond proceeds Certified California Municipal Treasurer Page 8 of 8 d �`� ;Cr' Palmdes'eri r; �'1 Cityand ec evemoro py Qf .., , ..a ; d DANCEANi L SIDS i N> fNV SYh Paul S. Gibson, C.C.M.T., Treasurer Thomas W. Jeffrey, J.D., M.B.A., Deputy City Treasurer Treasurer's Commentary On May 3rd, the Federal Open Market Committee (FOMC) raised the Federal Funds Rate by 25 basis points to 3.00% -- the eighth consecutive increase since June 2004. While acknowledging that long-term inflation remained well -contained, the FOMC cited near -term pressures on inflation, such as an improving labor market, and increased pricing power. The next FOMC meeting will be on 30 June 2005. The current market expectation is that there will be another 25 basis -point increase in the Federal Funds Rate, and that it will be at 4.00% by year-end. The 2 - 10 year segment of the Treasury Yield Curve flattened another 15 basis points in April, due to continued low inflation expectations, and strong demand for longer Treasury maturities. The latter is one of the reasons that the U.S. Treasury is discussing the reissuance of 30-year Treasury bonds. A more subtle dynamic may be inflating demand, however. The "Baby Boomers", who fueled the Great Bull Market of the 1990s, will be retiring during the 2005 - 2025 period. According to Merrill Lynch, their portfolios are overweighted in stock. In order to provide income during retirement, they will be compelled to sell stock, and buy bonds. This will raise bond prices and depress bond yields, since the two move inversely. The book value of the RDA Portfolio declined by $33 million in April due primarily to a $23 million refunding of Project Area No. 1, Series 1995. The rest of the difference was principally $9 million of debt service. Dollars in Thousands CITY Month -End Book Value"' Month -End Market Value"' Paper Gain (Loss) Prior Year Book Variance Interest Earnings Yield -To -Maturity Weighted Maturity (Days) Effective Duration RDA Month -End Book Value Month -End Market Value Paper Gain (Loss) Prior Year Book Variance Interest Earnings Yield -To -Maturity Weighted Maturity (Days) Effective Duration pis Gait, C. c. /u/ 7- Treasurer PORTFOLIO STATISTICS APR-05 MAR-05 FEB-05 JAN-05 DEC-04 NOV-04 $ 146,327 $ 146,856 $ 142,687 $ 140,218 $ 124,724 $ 128,602 $ 146,072 $ 146,787 $ 142,852 $ 140,446 $ 124,992 $ 128,877 $ (255) $ (69) $ 165 $ 228 $ 268 $ 275 $ (2,529) $ 20,165 $ 17,749 $ 12,381 $ (8,112) $ (3,536) $ 321 $ 325 $ 283 $ 243 $ 222 $ 214 2.94% 2.79% 2.66% 2.54% 2.26% 2.08% 166 170 172 178 121 119 0.25 0.28 0.30 0.32 0.14 0.15 $ 125,236 $ 158,324 $ 159,105 $ 160,560 $ 147,802 $ 148,730 $ 125,054 $ 158,129 $ 159,134 $ 160,623 $ 147,862 $ 148,761 $ (182) $ (195) $ 29 $ 63 $ 60 $ 31 $ (33,088) $ (5,191) $ (5,466) $ (2,570) $ 6,079 $ 4,546 $ 283 $ 375 $ 285 $ 268 $ 239 $ 221 2.80% 2.58% 2.37% 2.23% 2.00% 1.84% 101 80 136 127 65 65 0.22 0.18 0.20 0.20 0.05 0.07 "" Omits SLGSs. City of Palm Desert -- Portfolio Characteristics 30 April 2005 Dollars in Thousands Acteina Interval Market Value < 1 M $ 67,467 < 2M 13,041 < 3M 2,989 < 6M - < 1YR - < 2YR 3,156 < 3YR 8,509 < 4YR - < 5YR > 5YR - Total: $ 95,162 Ratings Market Value AAA $ 25,165 Unrated " 72,785 AA 2,408 A 6,169 A-1 14,010 BB+ 11,714 Total: $ 132,251 Sector Market Value Money Market Funds $ 19,121 LAIF 40,000 RDA Loan 32,785 MTNs 20,291 Federal Agency 6,044 Commercial Paper 14,010 Total: $ 132,251 Month Citv Yield LAIF Yield May04 1.53 1.43 Jun 1.58 1.47 Jul 1.68 1.60 Aug 1.74 1.67 Sep 1.84 1.77 Oct 1.96 1.89 Nov 2.08 2.00 Dec 2.26 2.20 Jan05 2.54 2.26 Feb 2.66 2.37 Mar 2.79 2.54 Apr 2.94 2.72 ' Standard and Poors LAIF, and City Loan to RDA rGeneral Fund Ageing 1, 100 80 71 ° c 60 0 t- 40 a° 20 14 ^ I I 9 3 0 0 3 n < 1 M < 2M < 3M < 6M < 1 YR < 2YR < 3YR I�ICredit Cualityl AAA \1 19% (Asset Allocation BB+ Unrated " 9% 54% A-1 11% A 5% AA 2% LAIF tRDA Loan 30% ,> 25% 3 Money Market MTNs Funds _ 15% 14% Commercial Federal Paper Agency 11% 5% Variance I Performance) 0.11 0.11 3.0 0.07 0.06 2.6 0.07 _. 0.07 :2 2.2 m 0.08 } 1.8 0.06 0.28 1.4 oil- 0.29 May04 Jun Jul Aug Sep Oct Nov Dec Jan05 Feb Mar Apr 0.25 0.21 ISLAIF Yield ■Cy Yieid - i Page 2 of 8 Par Value I Issuer Medium -Term Notes City of Palm Desert Portfolio Holdings 30 April 2005 l Coupon I Maturity I $ 2,406,000 ABBOTT LABS 6.80 $ 3,000,000 BANK ONE 4.13 $ 3,000,000 FORD MOTOR CREDIT CORP 7.20 $ 2,500,000 FORD MOTOR CREDIT CORP 7.20 $ 1,610,000 FORD MOTOR CREDIT CORP 6.75 $ 4,612,000 FORD MOTOR CREDIT CORP 7.20 $ 3,000,000 GOLDMAN SACHS 7.20 $ 20,128,000 Subtotal Commercial Paper -- Discount $ 3,000,000 GENERAL ELECTRIC 2.56 $ 3,000,000 GENERAL ELECTRIC 2.63 $ 3,000,000 GENERAL ELECTRIC 2.71 $ 5,050,000 GENERAL ELECTRIC 2.73 ' $ 14,050,000 Subtotal Federal Agencies -- Discount $ 1,015,000 FED NATIONAL MTG ASSOC 1.92 $ 5,047,000 FED NATIONAL MTG ASSOC 2.71 $ 6,062,000 Subtotal LGIP $ 40,000,000 L.A.I.F. 0.00 $ 40,000,000 Subtotal LGIP $ 9,459,056 C.A.M.P. 0.00 J $ 9,459,056 Subtotal LGIP $ 9,661,993 AIM PRIME PORTFOLIO 0.00 1 $ 9,661,993 Subtotal City Loan to RDA $ 32,785,480 CITY OF PALM DESERT 0.00 $ 32,785,480 Subtotal Total Investments $ 132,146,529 Market Ratings Cost I YTM I Price I Value IMoody'sl S&P 5/15/05 $ 2,410,349 2.08 100.10 $ 2,408,312 Al AA 9/1/07 $ 3,032,019 3.64 100.43 $ 3,012,921 Aa3 A+ 6/15/07 $ 3,081,133 5.75 99.91 $ 2,997,345 Baa2 BB+ 6/15/07 $ 2,567,611 5.75 99.91 $ 2,497,787 Baa2 BB+ 5/15/05 $ 1,612,437 2.80 100.07 $ 1,611,076 Baa2 BB+ 6/15/07 $ 4,802,904 5.10 99.91 $ 4,607,918 Baa2 BB+ 3/1/07 $ 3,194,433 3.50 105.20 $ 3,155,850 Aa3 A+ $ 20,700,886 4.29 $ 20,291,210 5/13/05 $ 2,976,107 2.62 99.89 $ 2,996,739 P-1 A-1+ 6/15/05 $ 2,968,221 2.70 99.89 $ 2,996,750 P-1 A-1+ 7/15/05 $ 2,960,479 2.78 99.64 $ 2,989,238 P-1 A-1+ 6/22/05 $ 4,999,067 2.80 99.55 $ 5,027,324 P-1 A-1+ $ 13,903,873 2.73 $ 14,010,051 5/2/05 $ 997,021 2.00 100.00 $ 1,015,000 Aaa AAA 6/15/05 $ 4,999,129 2.77 99.65 $ 5,029,335 Aaa AAA $ 5,996,150 2.65 $ 6,044,335 5/1/05 $ 40,000,000 2.72 100.00 $ 40,000,000 U U $ 40,000,000 2.72 $ 40,000,000 5/1/05 $ 9,459,056 2.60 100.00 $ 9,459,056 U AAA $ 9,459,056 2.60 $ 9,459,056 5/1/05 $ 9,661,993 2.46 100.00 $ 9,661,993 Aaa $ 9,661,993 2.46 $ 9,661,993 5/1/05 $ 32,785,480 2.72 100.00 $ 32,785,480 U $ 32,785,480 2.72 $ 32,785,480 $ 132,507,438 2.94 $ 132,252,124 AAA I U "NR" = Not Rated Page 3 of 8 Par Value Issuer Cash $ 12,000,762 CITY MAIN CHKG $ 1,205,530 DESERT WILLOW CHKG $ 613,267 RECREATIONAL FAC CHKG $ 13,819,559 Subtotal Total Cash and Investments $ 145,966,088 Corporate Issuers City of Palm Desert Portfolio Holdings 30 April 2005 Market Ratings l Couponj Maturity I Cost I YTM I Price I Value Moody'sl S&P 0.00 5/1/05 $ 12,000,762 0.00 100.00 $ 12,000,762 N/A N/A 0.00 5/1/05 $ 1,205,530 0.00 100.00 $ 1,205,530 N/A N/A 0.00 5/1/05 $ 613,267 0.00 100.00 $ 613,267 N/A N/A $ 13,819,559 $ 13,819,559 GENERAL ELECTRIC CAPITAL CORPORATION FORD MOTOR CREDIT CORPORATION GOLDMAN SACHS BANK ONE ABBOTT LABS $ 146,326,998 % of Portfolio (Market Value) 9.59% 8.02% 2.16% 2.06% 1.65% $ 146,071,684 "NR" = Not Rated Page 4 of 8 Dollars in Thousands Aaeina Interval < 1 M < 2M < 3M < 6M < 1YR < 2YR < 3YR < 4YR < 5YR > 5YR Total: uali AAA Unrated " A-1 BB+ Total: Sector LAI F Money Market Funds Federal Agency Commercial Paper Corporate Bonds U.S. Treasury Total: Month May04 Jun Jul Aug Sep Oct Nov Dec Jan05 Feb Mar Apr RDA Yield 1.17 1.37 1.53 1.51 1.61 1.73 1.84 2.00 2.23 2.37 2.58 2.80 Palm Desert Redevelopment Agency -- Portfolio Characteristics 30 April 2005 Market Value $ 63,515 2,964 3,566 6,054 5,878 $ 81,977 Market Value $ 52,535 60,704 2,972 6,565 $ 122,776 Market Value $ 60,704 43,602 8,933 2,972 6,565 $ 122,776 LAW Yield 1.43 1.47 1.60 1.67 1.77 1.89 2.00 2.20 2.26 2.37 2.54 2.72 Portfolio Ageing w/o SLGSs1 100 90 7 80 7 0 70 p 60 - c 50 - 40 - ac 30 20 10 0 0 ^ r I -I I� 0 o < 1 M < 2M < 3M < 6M < 1 YR < 2YR < 3YR < 4YR I Credit QualRyl AAA Unrated " 43% 50% BB+ l 5% A-1 2% Asset Allocation I Variance ( Performance -0.26 it LAW i 50% Money Market Corporate Funds Bonds 36% 5% Commercial Federal Paper Agency 2% 7% -0.10 3.0 -0.08 -0.1 6 2.5 -0.17 -0.1 6 o 2.0 d -0.17 >' 1.5 - -0.20 -0.03 1.0 0.00 May04Jun Jul Aug Sep Oct Nov DecJan05Feb Mar Apr 0.04' 0.08 l I0LAIFYield ■RDA Yield \ i ' Standard and Poors LAIF Page 5 of 8 Palm Desert Redevelopment Agency Portfolio Holdings 30 April 2005 Market Ratings Par Value Issuer Coupon Maturity Cost YTM, Price Value , Moody's I SAP Medium -Term Note $ 3,000,000 FORD MOTOR CREDIT CORP 6.50 1/25/07 $ 3,080,618 4.85 99.99 $ 2,999,700 Baa2 BB+ $ 3,525,000 FORD MOTOR CREDIT CORP 6.88 2/1/06 $ 3,600,232 3.94 101.15 $ 3,565,594 Baa2 BB+ $ 6,525,000 Subtotal $ 6,680,850 4.364 $ 6,565,294 Commercial Paper -- Discount $ 3,000,000 GENERAL ELECTRIC 2.77 8/15/05 $ 2,952,448 2.87 99.06 $ 2,971,823 P-1 A-1+ $ 3,000,000 Subtotal $ 2,952,448 2.87 $ 2,971,823 Federal Agency -- Coupon $ 3,000,000 FED FARM CREDIT BANK 2.63 9/17/07 $ 2,944,827 3.43 97.06 $ 2,911,875 Aaa AAA $ 3,000,000 FED HOME LOAN BANK 3.38 9/14/07 $ 2,993,466 3.82 98.88 $ 2,966,250 Aaa AAA $ 3,000,000 FED HOME LOAN MTG 4.88 3/15/07 $ 3,080,209 3.38 101.81 $ 3,054,375 Aaa AAA is 9,000,000 Subtotal $ 9,018,502 3.54 $ 8,932,500 LGIP $ 40,000,000 L.A.I.F. 0.00 5/1105 $ 40,000,000 2.72 100.00 $ 40,000,000 U U $ 5,727,930 L.A.I.F. (HOUSING) 0.00 5/1/05 $ 5,727,930 2.72 100.00 $ 5,727,930 U U $ 5,092,135 L.A.I.F. BOND PROCEEDS 0.00 5/1/05 $ 5,092,135 2.72 100.00 $ 5,092,135 U U $ 9,883,828 L.A.I.F. BOND PROCEEDS 0.00 5/1/05 $ 9,883,828 2.72 100.00 $ 9,883,828 U U $ 60,703,893 Subtotal $ 60,703,893 2.72 $ 60,703,893 LGIP $ 17,574,736 C.A.M.P. 0.00 511/05 $ 17,574,736 2.60 100.00 $ 17,574,736 U AAA $ 17,574,736 Subtotal $ 17,574,736 2.60 $ 17,574,736 LGIP $ 26,027,522 AIM PRIME PORTFOLIO 0.00 511105 $ 26,027,522 2.46 100.00 $ 26,027,522 Aaa AAA $ 26,027,522 Subtotal $ 26,027,522 2.46 $ 26,027,522 Total Investments $ 122,831,151 $ 122,957,951 2.80 $ 122,775,768 Cash $ 1,950,602 HOUSING AUTH CHKG 0.00 5/1/05 $ 1,950,602 0.00 100.00 $ 1,950,602 N/A N/A $ 327,549 HOUSING AUTH TRUST 0.00 5/1/05 $ 327,549 0.00 100.00 $ 327,549 N/A N/A $ 2,278,150 Subtotal $ 2,278,150 $ 2,278,150 Total Cash and Investments $ 125,109,301 $ 125,236,101 $ 125,053,918 'U' = Unrated Page 6 of 8 IPar Value Issuer Corporate Issuers Palm Desert Redevelopment Agency Portfolio Holdings 30 April 2005 Coupon I Maturity FORD MOTOR CREDIT CORPORATION GENERAL ELECTRIC CAPITAL CORPORATION Market Cost YTM I Price I Value % of Portfolio (Market Value) 5.25% 2.38% Ratings Moody's I S&P "U" = Unrated Page 7 of 8 STATEMENT OF COMPLIANCE The investment portfolios of the City of Palm Desert ("City`) and the Palm Desert Redevelopment Agency ("RDA') are governed by federal, state, and local law. The City Treasurer's "Statement of Investment Policy' is more restrictive than the California Government Code. The Palm Desert Investment Committee and the Palm Desert City Council review the Statement of Investment Policy annually. For the month ended 30 April 2005, the City and the RDA investment portfolios were in compliance with all applicable federal, state, and local laws and regulations. The City Treasury continued to pursue conservative and prudent investment strategies, based upon the stated objectives of safety, liquidity, and yield (in order of priority). Barring unforeseen events, the City Treasury should have sufficient cash to finance the operations of the City of Palm Desert and the Palm Desert Redevelopment Agency over the next six months. In addition, portions of either the City or the RDA portfolio could be liquidated in order to meet any significant, unexpected cash requirements. Bloomberg L.P. and Interactive Data Corporation provided the data and the analytical tools that were used to calculate the market value of all securities in the City and the RDA investment portfolios. State and Local Government Series securities are held in escrow accounts and are therefore not included in this report as assets. All balances are bank balances. Respectfully submitted on 25 May 2005, ,aa zs.. 67a)ion C. C. R 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 Not Authorized (1, 53601(b) U.8. Treasuries 5 Years- No Limit. 5 YearCI No Limit I 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) Fe0e6l Agencies 5 Years No Limit 5 Years 30% 6% 53601�1) 13606rs's Acceptances 180bays 407%' 180 Days 40% A-1 & P-1 53601Sg) Commercial Paper 270 Days 25%� A-1+ or P-1 270 pays 25%_ ll1+ or P-1 53601(h) Negotiable Mi'_. 5 Years 306/6'. 5 Years 30%. AA- or A63 5360 m Repos 1 Year No -Limit _ '30 Days 20%. AAAA Aaa 53601(i) Reverse Repos 92 Days 20% Not Authorized 53601(f) Medium Term Notes 5 Years 30% A' 5 Years 30% A.,_•� 53601(k) Mutual Funds 90 Days 20% AAA &Aaa 90 Days 26%'(2) 1AAA&A aa 53601(1) Trust Indenture Debt Not Authorized 53601(m) Secured Bank Deposits 5 Years No Limit Not Authorized 53601(k) Local GoverriMenf AAA* & Aaa AAA 8 Aaa Investment Pools ._ 90 Days 20% or Advisor 90 Days 120% (2} I or Advisor I 53601(n) Mortgage -Backed 5 Years 20% A (Issuer) & Not Authorized Securities AA (Security;_ . LAIF'., I _ No Limit - I No Limit (1) The City loan to RDA, which is not a bond, has been approved by the Palm Desert City Council. (2) Maximum limit for mutual funds and local government investment pools, excluding bond proceeds. 4.5%_- 7.39/6, 10.5% 2.4% 15.6% 5.4% 7.3% 21.2% 7.10% ' 14.3% 30.2% 49.4% 75.3% 1 100.0% Certified California Municipal Treasurer Page 8 of 8