HomeMy WebLinkAboutCC/RDA - COMPLIANCE ANALYSIS & INVESTMENT REPORTS - OCTOBER 2005�( C
CITY OF PALM DESERT
FINANCE DEPARTMENT
INTEROFFICE MEMORANDUM
TO: RACHELLE KLASSEN, CITY CLERK
FROM: NIAMH ORTEGA, RECORDING SECRETARY
DATE: DECEMBER 8, 2005
SUBJECT: COMPLIANCE ANALYSIS AND INVESTMENT REPORTS
Please find attached the Compliance Analysis and Investment Reports for October
2005 which were presented and approved at the meeting of November 23, 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)
GAFinanceWiamh Ortega\Wpdocs\Investment Committee\Memos\rklasseninvreport012605.wpd
Treasurer's Commentary
The Federal Open Market Committee (FOMC) met on November 1, and raised the Federal Funds Rate by 25 basis points to
4.00% -- the 12th consecutive increase. The FOMC observed that elevated energy prices, and hurricane damage were
temporary disruptions that would be offset by continued economic strength, coupled with rebuilding in hurricane -damaged
areas. The FOMC indicated that "policy accomodations would continue to be removed at a measured pace" in order to control
the threat of price -wage inflation.
The FOMC is expected to raise the Federal Funds Rate to 4.25% on December 13; to 4.50% on January 31, 2006; and to
4.75% on March 28 (76% probability assigned by futures market). Deutsche Bank believes that the Federal Funds Rate could
rise to 5.00% if the economy runs out of spare capacity, and price -wage inflation starts, driven by higher energy prices. The
yield curve is expected to be flat, however, not inverted (this usually precedes a recession).
In the third quarter, U.S. Gross Domestic Product (GDP) grew at an annualized rate of 3.80% -- the eighth consecutive quarter
of growth. Inflation, excluding food and energy prices, was 2.00% in August and in September -- near the top of the FOMC's
comfort level. U.S. GDP is projected to grow at 3.50% in 2005, and at 3.00% in 2006. The U.S. Unemployment Rate is
projected to continue to remain at 5.00% in 2006. In short, the economy will continue to grow, but at a slower pace. Chairman
Greenspan will retire on February 1, 2006.
Pis Gam C.C..M 7-
Treasurer
PORTFOLIO STATISTICS
Dollars in Thousands
OCT-05
SEP-05
AUG-05
JULY-05
JUNE-05
MAY-05
CITY
Month -End Book Value***
$
148,655
$ 149,081
$ 153,545
$
151,176
$ 150,073
$
172,413
Month -End Market Value***
$
148,157
$ 148,892
$ 153,380
$
150,936
$ 149,868
$
172,196
Paper Gain (Loss)
$
(498)
$ (189)
$ (165)
$
(240)
$ (205)
$
(217)
Prior Year Book Variance
$
18,105
$ 16,961
$ 16,570
$
9,725
$ 7,656
$
46,510
Interest Earnings
$
444
$ 431
$ 444
$
437
$ 377
$
359
Yield -To -Maturity
3.67%
3.56%
3.43%
3.34%
3.29%
3.06%
Weighted Maturity (Days)
214
211
208
216
220
134
Effective Duration
0.33
0.35
0.36
0.40
0.43
0.21
RDA
Month -End Book Value ***
$
123,243
$ 126,018
$
139,481
$ 143,968
$
146,433
$
124,373
Month -End Market Value ***
$
122,833
$ 125,695
$
139,291
$ 143,916
$
146,296
$
124,233
Paper Gain (Loss)
$
(410)
$ (323)
$
(190)
$ (52)
$
(137)
$
(140)
Prior Year Book Variance
$
(25,906)
$ (33,342)
$
(21,638)
$ (31,342)
$
(38,476)
$
(52,270)
Interest Earnings
$
350
$ 374
$
374
$ 386
$
366
$
302
Yield -To -Maturity
3.54%
3.42%
3.32%
3.15%
3.09%
2.93%
Weighted Maturity (Days)
156
153
146
142
140
101
Effective Duration
0.25
0.27
0.27
0.28
0.30
0.21
*** Omits SLGSs.
City of Palm Desert -- Portfolio Characteristics
31 October 2005
Dollars in Thousands
Aoeina Interval
Market Value
< 1M
$ 65,183
< 2M
1,985
< 3M
1,011
< 6M
2,022
< 1YR
2,959
< 2YR
22,371
< 3YR
-
< 4YR
< 5YR
> 5YR
-
Total:
$ 95,531
Ratings *
Market Value
AAA
$ 85,602
Unrated "
40,000
AA
6,064
A-1
-
BB+
10,091
Total:
$ 141,757
Sector
Market Value
MMFs
$ 27,034
LAIF
40,000
RDA Loan
32,785
MTNs
18,120
Agencies
23,818
CID
Total:
$ 141,757
Month
Citv Yield
LAIF Yield
Nov04
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
May
3.06
2.86
Jun
3.29
2.97
Jul
3.37
3.08
Aug
3.43
3.18
Sep
3.56
3.32
Oct
3.67
3.46
- 1
General Fund Ageing
100
80 - 68
e 60 -
0
0 40 23
IL
20 n
2 1 2 3 I I 0
0 ^
< 1 M < 2M < 3M < 6M < 1 YR < 2YR < 3YR
Credit Quality AAA
61%
BB+
7%
AA
4% A-1
Unrated *' 0%
28%
(Asset AllocationN
Variance
Performances
0.08
0.06
3.8
0.28
0.29
0.25
0 3.1 -
..
0.21
d
0.21
>- 2.4 -
0.32
i
0.29 1.7
0.25 Nov04 Dec Jan05 Feb Mar Apr May Jun Jul Aug Sep Oct
0.24
0 21 ■LAIF Yield ■City Yield
* Standard and Poors
" LAIF, and City Loan to RDA Page 2 of 8
City of Palm Desert
Portfolio Holdings
31 October 2005
Market
Ratings
Par Value
Issuer
I Coupon] Maturity I
Cost
YTM I
Price
Value
I Moody's I S & P
Medium -Term Notes
$
3,000,000
BANK ONE
4.13
9/1/07
$ 3,025,158
3.64
99.04
$ 2,971,341
Aa3 A+
$
3,000,000
FORD MOTOR CREDIT CORP
7.20
6/15/07
$ 3,062,018
5.75
99.79
$ 2,993,787
Baa3 BB+
$
2,500,000
FORD MOTOR CREDIT CORP
7.20
6/15/07
$ 2,551,681
5.75
99.79
$ 2,494,822
Baa3 BB+
$
4,612,000
FORD MOTOR CREDIT CORP
7.20
6/15/07
$ 4,757,927
5.10
99.79
$ 4,602,448
Baa3 BB+
$
2,000,000
GENERAL ELECTRIC
3.13
11/9/06
$ 1,984,271
3.92
98.26
$ 1,965,212
Aaa AAA
$
3,000,000
GOLDMAN SACHS
7.20
3/1/07
$ 3,141,406
3.50
103.09
$ 3,092,595
Aa3 A+
$
18,112,000
Subtotal
$ 18,522,461
4.66
$ 18,120,205
Federal Agencies -- Discount
$
2,060,000
FED HOME LOAN BANK
0.00
3/20/06
$
2,000,681
3.59
98.39
$
2,026,834
Aaa
AAA
$
2,000,000
FED HOME LOAN MTG CORP
0.00
12/13/05
$
1,967,042
3.49
99.54
$
1,990,800
Aaa
AAA
$
1,023,000
FED NATIONAL MTG ASSOC
0.00
1/18/06
$
999,798
3.54
99.14
$
1,014,202
Aaa
AAA
$
1,630,000
FED NATIONAL MTG ASSOC
0.00
11 /15/05
$
1,607,855
3.44
99.85
$
1,627,555
Aaa
AAA
$
6,713,000
Subtotal
$
6,575,376
3.52
$
6,659,391
Federal Agencies -- Coupon
$
3,000,000
FED HOME LOAN BANK
3.70
8/15/07
$
2,995,274
3.79
98.41
$
2,952,188
Aaa
AAA
$
1,500,000
FED HOME LOAN BANK
2.10
10/13/06
$
1,476,687
3.79
97.75
$
1,466,250
Aaa
AAA
$
2,035,000
FED HOME LOAN MTG CORP
2.50
12/4/06
$
2,006,288
3.84
97.78
$
1,989,848
Aaa
AAA
$
2,009,000
FED HOME LOAN MTG CORP
1.88
2/15/06
$
1,998,788
3.67
99.31
$
1,995,188
Aaa
AAA
$
2,786,000
FED NATIONAL MTG ASSOC
7.13
3/15/07
$
2,917,100
3.55
103.31
$
2,878,286
Aaa
AAA
$
3,000,000
FED NATIONAL MTG ASSOC
3.00
8/15/07
$
2,968,474
3.63
97.22
$
2,916,563
Aaa
AAA
$
3,000,000
FED NATIONAL MTG ASSOC
2.75
8/11/06
$
2,975,865
3.81
98.69
$
2,960,625
Aaa
AAA
$
17,330,000
Subtotal
$
17,338,477
3.72
$
17,158,948
Local Government Investment Pools
$ 40,000,000
L.A.I.F.
0.00 11/1/05 $
40,000,000
3.46
100.00 $
40,000,000 U U
$ 18,270,128
C.A.M.P.
0.00 11/1/05 $
18,270,128
3.60
100.00 $
18,270,128 U AAA
$ 58,270,128
Subtotal
$
58,270,128
3.50
$
58,270,128
Money Market Funds
$ 8,762,798
AIM
0.00 11/1/05 $
8,762,798
3.46
100.00 $
8,762,798 Aaa AAA
$ 8,762,798
Subtotal
$
8,762,798
3.46
$
8,762,798
City Loan to RDA
$ 32,785,480
$ 32,785,480
Total Investments
$ 141,973,406
CITY OF PALM DESERT 0.00 11/1/35 $ 32,785,480 3.46 100.00 $ 32,785,480 U U
Subtotal $ 32,785,480 3.46 $ 32,785,480
"U" = Unrated
$ 142,254,719 3.67
$ 141,756,950
Page 3 of 8
City of Palm Desert
Portfolio Holdings
31 October 2005
Market
Par Value Issuer Coupon] Maturity I Cost YTM I Price I Value
Cash
$ 5,345,582 CITY MAIN CHKG 0.00 11/1/05 $ 5,345,582 0.00 100.00 $
$ 559,439 DESERT WILLOW CHKG 0.00 11/1/05 $ 559,439 0.00 100.00 $
$ 494,913 RECREATIONAL FAC CHKG 0.00 11/1/05 $ 494,913 0.00 100.00 $
$ 6,399,935 Subtotal $ 6,399,935 $
Total Investments and Cash
5,345,582
559,439
494,913
6,399,935
$ 148,373,341 $ 148,654,654 $ 148,156,885
Corporate Issuers
FORD MOTOR CREDIT CORPORATION
GOLDMAN SACHS
BANK ONE
GENERAL ELECTRIC CAPITAL CORPORATION
% of Portfolio
(Market Value)
6.81 %
2.08%
2.00%
1.32%
Ratings
I Moody's i S & P
N/A
N/A
N/A
N/A
N/A
N/A j
J
"U" = Unrated Page 4 of 8
Palm Desert Redevelopment Agency -- Portfolio Characteristics
31 October 2005
Dollars in Thousands
Aaeina Interval
Market Value
< 1 M
$ 49,083
< 2M
-
< 3M
-
< 6M
12,368
< 1YR
5,907
< 2YR
14,816
< 3YR
-
< 4YR
-
< 5YR
-
> 5YR
-
Total:
$ 82,174
Quality
Market Value
AAA
$ 53,517
U n rated "
61,157
A-1
-
BB+
6,488
Total:
$ 121,162
Sector
Market Value
LAIF
$ 61,157
MMFs
27,025
Agencies
20,660
CP
-
MTNs
12,320
Treasuries
Total:
$ 121,162
Month
RDA Yield
LAIF Yield
Nov04
1.84
2.00
Dec
2.00
2.20
Jan05
2.23
2.26
Feb
2.37
2.37
Mar
2.58
2.54
Apr
2.80
2.72
May
2.93
2.86
Jun
3.09
2.97
Jul
3.21
3.08
Aug
3.32
3.18
Sep
3.42
3.32
Oct
3.54
3.46
Portfolio Ageing w/o SLGSsM
100
90 -
80 -
0 70 - 60
c 60- -
0 50 -
E 40 -
a° 30 -
15 18
20 -
10- 0 0
n
n 0 0
0
< 1 M < 2M < 3M
< 6M < 1 YR < 2YR < 3YR < 4YR
(Credit Quality(
Asset Allocation
Variance Performance)
-0.17
-0.20 3.6
-0.03
0.00 3.1
0.04
0.08 2.6
0.07 }
2.1
0.13
0.13 1.6
0.14 Nov04 Dec Jan05 Feb Mar Apr May Jun Jul Aug Sep Oct
0.10
n nR ■ LAIF Yield OR DA Yield
Unrated "
AAA 51 %
44%
BA,- A-1
5% 0%
CID
0%
LAIF
51%
MMFs
22%
MTNs Agencies
10% 17%
Standard and Poors
" LAIF Page 5 of 8
PALM DESERT REDEVELOPMENT AGENCY
Portfolio Holdings
31 October 2005
Market
Par Value Issuer Coupon I Maturity Cost YTM I Price I Value
Medium -Term Notes
$ 3,000,000 FORD MOTOR CREDIT CORP 6.50
$ 3,525,000 FORD MOTOR CREDIT CORP 6.88
$ 2,896,000 GENERAL ELECTRIC 6.38
$ 2,896,000 GENERAL ELECTRIC 6.38
$ 12,317,000 Subtotal
Federal Agency -- Coupon
$
3,000,000
FED FARM CREDIT BANK
2.63
$
3,000,000
FED HOME LOAN BANK
3.38
$
3,005,000
FED HOME LOAN BANK
2.50
$
3,000,000
FED HOME LOAN MTG CORP
4.88
$
2,974,000
FED HOME LOAN MTG CORP
3.63
$
2,974,000
FED HOME LOAN MTG CORP
3.63
$
2,973,000
FED NATIONAL MTG ASSOC
3.63
1 $ 20,926,000 Subtotal
Local Government Investment Pools
$
40,320,759
L.A.I.F.
0.00
$
5,848,824
L.A.I.F. (HOUSING)
0.00
$
14,827,783
L.A.I.F. BOND PROCEEDS
0.00
$
160,090
L.A.I.F. BOND PROCEEDS
0.00
$
5,792,052
C.A.M.P.
0.00
1 $ 66,949,508 Subtotal
Money Market Funds
$ 21,231,698 AIM 0.00
$ 21,231,698 Subtotal
Total Investments
$ 121,424,206
1/25/07
$
3,057,363
4.85
98.81
$
2,964,399
2/1/06
$
3,550,077
3.94
99.95
$
3,523,188
3/15/06
$
2,925,988
3.52
100.70
$
2,916,197
3/15/06
$
2,925,988
3.52
100.70
$
2,916,197
$
12,459,416
3.97
$
12,319,980
9/17/07
$
2,956,428
3.43
96.47
$
2,894,063
9/14/07
$
2,994,845
3.82
97.78
$
2,933,438
3/15/06
$
2,994,898
3.42
99.34
$
2,985,280
3/15/07
$
3,058,788
3.38
100.38
$
3,011,250
9/15/06
$
2,974,766
3.60
99.22
$
2,950,766
9/15/06
$
2,974,908
3.60
99.22
$
2,950,766
3/15/07
$
2,975,855
3.95
98.72
$
2,934,908
$
20,930,489
3.60
$
20,660,469
11/1/05 $ 40,320,759 3.46 100.00 $ 40,320,759
11/1/05
$
5,848,824
3.46
100.00
$
5,848,824
11/1/05
$
14,827,783
3.46
100.00
$
14,827,783
11/1/05
$
160,090
3.46
100.00
$
160,090
11/1/05
$
5,792,052
3.60
100.00
$
5,792,052
$
66,949,508
3.47
$
66,949,508
Ratings
I Moody's I S & P
Baa3
Baa3
Aaa
Aaa
Aaa
Aaa
Aaa
Aaa
Aaa
Aaa
Aaa
U
U
U
U
U
BB+
BB+
AAA
AAA
AAA
AAA
AAA
AAA
AAA
AAA
AAA
U
U
U
U
AAA
11/1/05 $ 21,231,698 3.46 100.00 $ 21,231,698 Aaa AAA
$ 21,231,698 3.46 $ 21,231,698 1
$ 121,571,111 3.54 $ 121,161,656
Cash
$ 1,331,912 HOUSING AUTH CHKG 0.00 11/1/05 $ 1,331,912 0.00 100.00 $ 1,331,912 N/A N/A
$ 339,904 HOUSING AUTH TRUST 0.00 11/1/05 $ 339,904 0.00 100.00 $ 339,904 N/A N/A
$ 1,671,816 Subtotal $ 1,671,816 $ 1,671,816 1
Total Investments and Cash
$ 123,096,022
$ 123,242,927
$ 122,833,471
"U" = Unrated Page 6 of 8
PALM DESERT REDEVELOPMENT AGENCY
Portfolio Holdings
31 October 2005
Par Value I Issuer
Corporate Issuers
Coupon Maturity
FORD MOTOR CREDIT CORPORATION
GENERAL ELECTRIC CAPITAL CORPORATION
Market
Cost YTM I Price I Value
0/6 of Portfolio
(Market Value)
5.37%
4.76%
Ratings
I 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 October 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 23 November 2005,
Pa bS. Gd7s�, C. C.". 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.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%
16.8% 17.2%
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 Q)
Medium -Term Notes
5 Years "
30%
A
5 Years
30%
120%
A
I
13.0%
10.3%
53601(k)
Mutual Funds
90 Days
20%
AAA & Aaa
90 Days
(2)
AAA & Aaa1
6.2%
17.5%
53601(I)
Trust Indenture Debt
Not Authorized
53601(m)
Secured Bank Deposits
5 Years
No Limit
Not Authorized
53601(k)
Local
120%
I
I
Investment Pools
90 Days
20%
or Advisor
90 Days
(2)
or Adv sort
12.8%
4.8%
53601(n)
Mortgage -Backed
5 Years
20%
A (Issuer) &
Not Authorized
Securities
AA (Security)
LAIF
No Limit
No Limit
28.1%
50.3%
(1) The City loan to RDA, which is not a bond, has been approved by the Palm Desert City Council.
77.0%
100.0%
(2) Maximum limit for mutual funds and local government investment
pools, excluding bond proceeds.
Certified California Municipal Treasurer
Page 8 of 8