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Home My WebLink AboutInvestment Report - March 2008CITY OF PALM DESERT FINANCE DEPARTMENT 3i f (,-� E��€R ,`S� OFFICE e ? 4PRI 25 V:CA " II. 30, INTEROFFICE MEMORANDUM TO: RACHELLE KLASSEN, CITY CLERK FROM: NIAMH ORTEGA, RECORDING SECRETARY" DATE: APRIL 23, 2008 SUBJECT: COMPLIANCE ANALYSIS AND INVESTMENT REPORTS Please find attached the Compliance Analysis and Investment Reports for were presented and approved at the April meeting of the Audit, Investment and Finance Committee. 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. ra-Wel Attachment (as noted) CITY COUNCIL ACTION: APPROVED DENIED ]RECEIVED f F i p� 1 OTHER MEETING DATE AYES:usu) VI'advF Kdbl, NOES: NNC ABSENT: k. Z,Ae, ABSTAIN: VERIFIED BY: rC Original on File withJCity Clerk's Office RP 4 BY RDA ON -`�-C, VERIFIED BY ' I did Original on file with City Clerk's Office G\Financeftamh Ortega\Investment Committee\Memos\rklassenmvreport.wpd City of Palm Desert .--- ----•. City and Redevelopment Agency Portfolios COMPLIANCE ANALYSIS AND INVESTMENT REPORT March 2008 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 April 30. Federal Funds Futures have assigned a 75% probability to a 25-basis point cut to the Federal Funds Rate, leaving it at 2%. Although the FOMC and the federal housing agencies have provided additional liquidity to reduce the odds of another "run" on a primary securities dealer, it is not enough to remove the balance sheet constraints on financial institutions as they continue to hold a portfolio of declining assets, and to incur losses in housing -related transactions. The International Monetary Fund has forecast that the U.S. economy will grow 0.5% in 2008, and at 0.6% in 2009. U.S. inflation is expected to be 2.6% in 2008, based upon global competition for food, energy, and other raw materials. The U.S. unemployment rate is currently 5.1 %. Merill Lynch believes that U.S. housing prices will deflate by another 20-25% over the next two years. California housing prices continue to fall at a rate of $3,000 per week. The next "bubble" to burst will probably be commodities -- by midsummer. The price of crude oil, copper, and other commodities are unsustainably high due to speculation. There is heavy buying on the short -end of the yield curve, further depressing bond yields. The City has moved all of its bond proceeds into its highest yielding money market fund in order to enhance profitability. Pis 4jdj & i v, c.C../t f. r Treasurer PORTFOLIO STATISTICS Dollars in Thousands MAR-08 FEB-08 JAN-08 DEC-07 NOV-07 OCT-07 CITY Month -End Book Value"** $ 226,638 $ 226,921 $ 231,415 $ 235,098 $ 238,867 $ 243,827 Month -End Market Value*** $ 229,015 $ 229,529 $ 234,066 $ 236,340 $ 240,346 $ 244,504 Paper Gain (Loss) $ 2,377 $ 2,608 $ 2,651 $ 1,242 $ 1,479 $ 677 Prior Year Book Variance $ 15,646 $ 8,430 $ (5,952) $ 76,048 $ 79,077 $ 86,424 Interest Earnings $ 749 $ 739 $ 865 $ 932 $ 961 $ 965 Yield -To -Maturity 4.05% 4.31 % 4.72% 4.88% 4.93% 5.05% Weighted Maturity (Days) 509 462 473 462 455 445 Effective Duration 0.81 0.70 0.72 0.74 0.77 0.79 RDA Month -End Book Value *** $ 275,598 $ 276,463 $ 285,919 $ 248,963 $ 250,163 $ 250,737 Month -End Market Value *** $ 277,364 $ 278,326 $ 287,781 $ 252,033 $ 251,232 $ 251,297 Paper Gain (Loss) $ 1,766 $ 1,863 $ 1,862 $ 3,070 $ 1,069 $ 560 Prior Year Book Variance $ (27,934) $ (31,632) $ 48,552 $ 137,895 $ 135,026 $ 134,517 Interest Earnings $ 881 $ 749 $ 1,027 $ 992 $ 966 $ 1,174 Yield -To -Maturity 3.36% 3.79% 4.45% 4.71 % 4.70% 4.87% Weighted Maturity (Days) 291 249 247 285 283 282 Effective Duration 0.41 0.31 0.31 0.37 0.40 0.41 *** Omits SLGSs. City of Palm Desert -- Portfolio Characteristics March 31, 2008 Dollars in Thousands Ageing Interval Market Value < 1 M $ 38,448 < 2M - < 3M - < 6M 13,101 < 1YR 16,154 < 2YR 42,410 < 3YR 33,450 < 4YR 8,265 < 5YR - > 5YR - Total: $ 151,828 N General Fund Ageing' 100 80 0 c 60 t 40 25 28 0 22 a 20 �j 0 0 5 0 0 I I I-1 n I I 0 < 1 M < 2M < 3M < 6M < 1 YR < 2YR < 3YR < 4YR < 5YR > 5YR i Ratings * Market Value Credit Quality' AAA $ 134,359 A AAA AA 47,798 4% 71 % A 7,221 Unrated ** 32,799 Total: $ 222,177 25% Sector MMF Agencies MTNs CAMP RDA Loan LAIF CID Total: Month Apr07 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar08 Citv Yield 5.13 5.11 5.11 5.11 5.09 5.01 5.05 4.93 4.87 4.72 4.31 4.05 Market Value $ 51,582 45,260 67,435 25,101 32,785 14 $ 222,177 LAIF Yield 5.22 5.25 5.25 5.26 5.25 5.23 5.14 4.96 4.80 4.62 4.16 3.78 i Asset Allocation Agencies MTNs 30% MMF CAMP 23% 11% RDA Loan 15% i Variance Performance -0.10 -0.13 5.5 -0.14 -0.15 -0.17 5.0 0 -0.22 -0.09 4.5 -0.03 0.07 4.0 0.10 Apr07 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar08 0.15 0.27 ®: a * Standard and Poors ** LAIF, and City Loan to RDA Page 2 IPar Value Medium -Term Notes $ 2,920,000 $ 3,795,000 $ 3,000,000 $ 15,270,000 $ 2,035,000 $ 1,000,000 $ 4,000,000 $ 2,000,000 $ 2,035,000 $ 1,891,000 $ 2,000,000 $ 3,965,000 $ 3,080,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 3,000,000 $ 4,000,000 $ 2,000,000 $ 2,025,000 $ 2,020,000 $ 66,036,000 City of Palm Desert Portfolio Holdings March 31, 2008 Market Issuer Coupon Maturity Cost YTM I Price Value BANK OF AMERICA 5.88 2/15/09 $2,940,449 5.01 102.11 $2,981,708 BANK OF AMERICA 5.38 8/15/11 $3,951,702 4.05 104.31 $3,958,417 BANK OF AMERICA 4.25 10/1/10 $3,074,942 3.20 0.00 $3,074,942 CITIGROUP 4.13 2/22/10 $15,058,976 4.91 99.04 $15,123,759 CITIGROUP 4.13 2/22/10 $2,006,877 4.91 99.04 $2,015,511 CITIGROUP 4.63 8/3/10 $987,859 5.19 99.94 $999,394 CITIGROUP 4.63 8/3/10 $3,951,436 5.19 99.94 $3,997,576 GENERAL ELECTRIC 3.60 10/15/08 $1,986,118 4.99 100.04 $2,000,872 GENERAL ELECTRIC 4.88 10/21/10 $2,000,437 5.63 103.93 $2,114,890 GENERAL ELECTRIC 6.88 11/15/10 $1,944,085 5.65 108.60 $2,053,590 GENERAL ELECTRIC 6.13 2/22/11 $2,023,026 5.67 106.29 $2,125,854 GENERAL ELECTRIC 4.88 10/21/10 $4,123,392 3.23 103.93 $4,120,658 WACHOVIA 3.63 2/17/09 $3,044,800 5.02 99.69 $3,070,409 WACHOVIA 3.50 8/15/08 $1,988,110 5.18 99.88 $1,997,556 WACHOVIA 7.80 8/18/10 $2,121,480 5.02 107.64 $2,152,878 WAL-MART 6.88 8/10/09 $2,047,992 4.93 105.56 $2,111,218 WAL-MART 6.88 8/10/09 $3,157,447 2.90 105.56 $3,166,827 WELLS FARGO BANK 6.38 8/1/11 $4,146,595 5.13 106.44 $4,257,432 WELLS FARGO BANK 4.63 8/9/10 $1,980,153 5.09 102.68 $2,053,698 WELLS FARGO BANK 3.13 4/1/09 $1,990,253 4.92 98.95 $2,003,697 WELLS FARGO BANK 4.20 1/15/10 $1,994,074 4.96 101.67 $2,053,716 Subtotal $ 66,520,203 4.71 $ 67,434,601 Federal Agencies -- Coupon $ 3,000,000 FED FARM CREDIT BANK $ 3,000,000 FED FARM CREDIT BANK $ 2,015,000 FED FARM CREDIT BANK $ 2,000,000 FED FARM CREDIT BANK $ 3,000,000 FED HOME LOAN BANK $ 1,980,000 FED HOME LOAN BANK $ 3,000,000 FED HOME LOAN BANK $ 2,000,000 FED HOME LOAN BANK $ 2,033,000 FED HOME LOAN MTG CORP $ 2,049,000 FED HOME LOAN MTG CORP $ 2,000,000 FED HOME LOAN MTG CORP $ 2,000,000 FED HOME LOAN MTG CORP $ 2,062,000 FED HOME LOAN MTG CORP $ 2,000,000 FED HOME LOAN MTG CORP $ 2,049,000 FED HOME LOAN MTG CORP $ 2,000,000 FED NATIONAL MTG ASSOC $ 2,000,000 FED NATIONAL MTG ASSOC $ 2,000,000 FED NATIONAL MTG ASSOC Ratings Moody's I S&P Aa2 Aa2 Aa2 Aa1 Aa1 Aa1 Aa 1 Aaa Aaa Aaa Aaa Aaa Aa3 Aa3 Aa3 Aa2 Aa2 Aa1 Aa1 Aa1 Aa1 AA- AA- AA - AA AA AA AA AAA AAA AAA AAA AAA A+ A+ A+ AA AA AA- AA- AA- AA- 4.78 5/3/10 $ 3,009,758 4.61 105.03 $ 3,150,938 Aaa AAA 4.78 5/3/10 $ 3,009,758 4.61 105.03 $ 3,150,938 Aaa AAA 3.38 7/15/08 $ 2,007,643 4.68 100.28 $ 2,020,667 Aaa AAA 3.63 10/24/08 $ 1,964,911 6.90 100.72 $ 2,014,375 Aaa AAA 4.38 9/11/09 $ 2,980,467 5.59 103.00 $ 3,090,000 Aaa AAA 4.75 12/12/08 $ 1,978,272 4.87 101.69 $ 2,013,413 Aaa AAA 4.63 9/12/08 $ 2,996,959 5.40 101.00 $ 3,030,000 Aaa AAA 3.50 11/3/09 $ 1,927,459 5.96 101.91 $ 2,038,125 Aaa AAA 4.25 7/15/09 $ 2,018,206 4.87 102.50 $ 2,083,825 Aaa AAA 4.00 12/15/09 $ 2,021,645 4.87 102.88 $ 2,107,909 Aaa AAA 4.13 11/18/09 $ 1,977,703 4.88 102.95 $ 2,059,078 Aaa AAA 4.90 11/3/08 $ 1,998,251 5.06 101.53 $ 2,030,572 Aaa AAA 4.13 7/12/10 $ 2,003,141 5.47 103.81 $ 2,140,614 Aaa AAA 5.00 7/23/08 $ 1,998,732 5.20 100.79 $ 2,015,856 Aaa AAA 4.00 12/15/09 $ 2,000,064 5.50 102.88 $ 2,107,909 Aaa AAA 4.63 10/28/09 $ 1,992,671 4.88 103.63 $ 2,072,500 Aaa AAA 4.25 8/15/10 $ 1,946,275 5.47 104.19 $ 2,083,750 Aaa AAA 3.88 11/17/08 $ 1,970,330 6.35 100.94 $ 2,018,750 Aaa AAA "U" = Unrated Page 3 City of Palm Desert Portfolio Holdings March 31, 2008 Market Par Value Issuer Coupon Maturity Cost YTM I Price Value Federal Agencies -- Coupon (continued) $ 40,188,000 Subtotal $ 39,802,245 5.26 $ 41,229,217 Ratings Moody's I S&P Federal Agencies -- Callable $ 2,000,000 FED HOME LOAN BANK 4.20 7/18/08 $ 1,996,238 4.88 100.53 $ 2,010,625 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 5.05 8/22/08 $ 1,999,902 5.06 101.02 $ 2,020,384 Aaa AAA $ 4,000,000 Subtotal $ 3,996,140 4.97 $ 4,031,009 Local Government Investment Pool $ 13,812 L.A.I.F. 0.00 4/1/08 $ 13,812 3.78 100.00 $ 13,812 U U $ 13,812 Subtotal $ 13,812 3.78 $ 13,812 Local Government Investment Pool $ 23,279,292 C.A.M.P. 0.00 4/1/08 $ 23,279,292 3.29 100.00 $ 23,279,292 U AAA $ 1,822,076 C.A.M.P. (DESERT WILLOW) 0.00 4/1/08 $ 1,822,076 3.29 100.00 $ 1,822,076 U AAA $ 25,101,369 Subtotal $ 25,101,369 3.29 $ 25,101,369 Money Market Fund $ 49,754,393 WF ADVANTAGE GOUT 0.00 4/1/08 $ 49,754,393 2.75 100.00 $ 49,754,393 Aaa AAA $ 49,754,393 Subtotal $ 49,754,393 2.75 $ 49,754,393 Money Market Fund $ 1,172,218 WF HERITAGE SELECT 0.00 4/1/08 $ 1,172,218 3.31 100.00 $ 1,172,218 Aaa AAA $ 1,172,218 Subtotal $ 1,172,218 3.31 $ 1,172,218 Money Market Fund $ 655,262 WF TREASURY PLUS 0.00 4/1/08 $ 655,262 1.63 100.00 $ 655,262 Aaa AAA $ 655,262 Subtotal $ 655,262 1.63 $ 655,262 City Loan to RDA $ 32,785,480 CITY OF PALM DESERT 0.00 4/1/38 $ 32,785,480 3.78 100.00 $ 32,785,480 U U $ 32,785,480 Subtotal $ 32,785,480 3.78 $ 32,785,480 Total Investments $ 219,706,534 $ 219,801,122 4.05 $ 222,177,361 Cash $ 4,958,395 CITY MAIN CHKG 0.00 4/1/08 $ 4,958,395 0.00 100.00 $ 4,958,395 U U $ 1,117,069 DESERT WILLOW CHKG 0.00 4/1/08 $ 1,117,069 0.00 100.00 $ 1,117,069 U U $ 553,981 MONTEREY 170 CHKG 0.00 4/1/08 $ 553,981 0.00 100.00 $ 553,981 U U $ 207,862 RECREATIONAL FAC CHKG 0.00 4/1/08 $ 207,862 0.00 100.00 $ 207,862 U U "U" = Unrated Page 4 City of Palm Desert Portfolio Holdings March 31, 2008 IPar Value I Issuer I Coupon I Maturity I Cash (continued) $ - FALCON CREST HOA CHKG 0.00 $ - ART, FOOD & WINE CHKG 0.00 $ 6,837,307 Subtotal Total Investments and Cash $ 226,543,840 Corporate Issuers BANK OF AMERICA CITIGROUP GENERAL ELECTRIC WACHOVIA WAL-MART WELLS FARGO BANK Agency Issuers FED FARM CREDIT BANK FED HOME LOAN BANK FED HOME LOAN MTG CORP FED NATIONAL MTG ASSOC Market Cost YTM I Price I Value 0.00 100.00 $ - 0.00 100.00 $ - 6,837,307 $ 6,837,307 $ 226,638,429 % of Portfolio (Market Value) 4.37% 9.67% 5.42 % 3.15% 2.30% 4.53% % of Portfolio (Market Value) 4.51 % 5.32% 7.23% 2.70% $ 229,014,668 Ratings Moody's I S&P U U U U "U" = Unrated Page 5 Palm Desert Redevelopment Agency -- Portfolio Characteristics March 31, 2008 Dollars in Thousands Aaeina Interval Market Value < 1 M $ 17,039 < 2M - < 3M < 6M 14,053 < 1YR 16,298 < 2YR 31,886 < 3YR 18,823 < 4YR < 5YR - > 5YR - Total: $ 98,099 Quality * Market Value AAA $ 230,241 AA 26,170 A 12,177 Unrated 5,439 Total: $ 274,027 Sector Market Value MMF $ 169,740 Agencies 41,498 LAIF 5,439 MTNs 38,172 CAMP 19,178 CP - Treasuries - Total: $ 274,027 Month Apr07 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar08 Portfolio Ageing w/o SLGSs 100 90 ^, 80 70 c 60 0 50 40 33 oo 30 17 14 17 19 20 10 - n 0 0 n n n 0 0 0 0 < 1 M < 2M < 3M < 6M < 1 YR < 2YR < 3YR < 4YR < 5YR > 5YR Credit Quality AAA 84% Unrated *' 2% A 4% AA 10% Asset Allocation MMF 62% CAL,, LAIF 7% MTNs 2% 14% Agencies 15% RDA Yield LAIF Yield Variance Performance 5.09 5.22 -0.13 5.10 5.25 -0.15 5.5 5.11 5.25 -0.14 5.10 5.26 -0.16 5.0 5.07 5.25 -0.19 0 5.02 5.23 -0.21 4.5 4.87 5.14 -0.27 m 4.70 4.96 -0.26 4.0 4.70 4.80 -0.10 3.5 4.45 4.62 -0.17 Apr07 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar08 3.78 4.16 -0.38 3.36 3.78 -0.42 ■LAIF Yield ■RDA Yield N Standard and Poors "" LAIF Page 6 Par Value I Issuer Medium -Term Notes Palm Desert Redevelopment Agency Portfolio Holdings March 31, 2008 Market Ratings CouponI Maturity Cost YTM I Price I Value I Moody'sI S & P $ 4,000,000 CITIGROUP 6.20 3/15/09 $ 4,083,600 5.13 101.68 $ 4,067,052 Aa1 AA- $ 4,070,000 JP MORGAN CHASE 3.50 3/15/09 $ 3,939,979 5.12 99.67 $ 4,056,748 Aa3 A+ $ 3,055,000 JP MORGAN CHASE 3.50 3/15/09 $ 2,957,404 5.12 99.67 $ 3,045,053 Aa3 A+ $ 3,000,000 JP MORGAN CHASE 6.00 1/15/09 $ 3,077,274 3.00 101.68 $ 3,050,505 Aa3 A+ $ 2,000,000 FIRST UNION NAT BANK 5.80 12/1/08 $ 2,041,272 5.00 101.22 $ 2,024,456 Aa3 A+ $ 3,000,000 WAL-MART 6.88 8/10/09 $ 3,117,360 4.76 105.56 $ 3,166,827 Aa2 AA $ 3,000,000 WAL-MART 4.13 7/1/10 $ 3,081,270 2.91 102.79 $ 3,083,802 Aa2 AA $ 2,000,000 WELLS FARGO BANK 4.00 8/15/08 $ 1,955,100 4.96 100.01 $ 2,000,136 Aa1 AA- $ 13,625,000 WELLS FARGO BANK 4.20 1/15/10 $ 13,918,820 3.00 101.67 $ 13,852,415 Aa1 AA- $ 37,750,000 Subtotal $ 38,172,079 3.96 $ 38,346,993 Federal Agencies -- Coupon $ 2,000,000 FED FARM CREDIT BANK 6.45 10/7/09 $ 2,104,000 4.88 106.27 $ 2,125,430 Aaa AAA $ 2,000,000 FED FARM CREDIT BANK 4.75 8/3/09 $ 1,992,360 4.87 103.38 $ 2,067,500 Aaa AAA $ 4,900,000 FED FARM CREDIT BANK 4.90 9/22/10 $ 4,936,173 4.65 105.84 $ 5,186,344 Aaa AAA $ 3,970,000 FED HOME LOAN BANK 4.25 9/12/08 $ 3,911,272 4.79 100.81 $ 4,002,256 Aaa AAA $ 3,970,000 FED HOME LOAN BANK 4.25 9/12/08 $ 3,911,272 4.79 100.81 $ 4,002,256 Aaa AAA $ 4,500,000 FED HOME LOAN BANK 4.38 9/11/09 $ 4,427,145 5.59 103.00 $ 4,635,000 Aaa AAA $ 4,000,000 FED HOME LOAN BANK 4.63 9/12/08 $ 3,976,480 4.84 101.00 $ 4,040,000 Aaa AAA $ 2,005,000 FED HOME LOAN BANK 3.88 7/24/09 $ 1,940,940 4.89 102.03 $ 2,045,727 Aaa AAA $ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,946,000 5.49 106.03 $ 2,120,625 Aaa AAA $ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,945,280 5.50 106.03 $ 2,120,625 Aaa AAA $ 2,000,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 2,098,460 5.54 110.38 $ 2,207,500 Aaa AAA $ 3,734,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 3,918,161 5.54 110.38 $ 4,121,403 Aaa AAA $ 4,155,000 FED NATIONAL MTG ASSOC 6.63 9/15/09 $ 4,390,094 4.89 106.22 $ 4,413,389 Aaa AAA $ 41,234,000 Subtotal $ 41,234,000 5.06 $ 41,234,000 Local Government Investment Pool $ 9,656 L.A.I.F. 0.00 4/1/08 $ 9,656 3.78 100.00 $ 9,656 U U $ 21,145 L.A.I.F. (HOUSING) 0.00 4/1/08 $ 21,145 3.78 100.00 $ 21,145 U U $ 5,408,155 L.A.I.F. BOND PROCEEDS 0.00 4/1/08 $ 5,408,155 3.78 100.00 $ 5,408,155 U U $ 5,438,956 Subtotal $ 5,438,956 3.78 $ 5,438,956 Local Government Investment Pool $ 16,124,317 C.A.M.P. 0.00 4/1/08 $ 16,124,317 3.29 100.00 $ 16,124,317 U AAA $ 3,053,282 C.A.M.P. (HOUSING) 0.00 4/1/08 $ 3,053,282 3.29 100.00 $ 3,053,282 U AAA $ 19,177,599 Subtotal $ 19,177,599 3.29 $ 19,177,599 Money Market Fund $ 40,865,911 WF ADVANTAGE GOUT 0.00 4/1/08 $ 40,865,911 2.75 100.00 $ 40,865,911 Aaa AAA $ 40,865,911 Subtotal $ 40,865,911 2.75 $ 40,865,911 "U" = Unrated Page 7 Palm Desert Redevelopment Agency Portfolio Holdings March 31, 2008 Par Value I Issuer Money Market Fund $ 92,155,821 WF HERITAGE SELECT $ 92,155,821 Subtotal Money Market Fund $ 36,718,572 WF TREASURY PLUS $ 36,718,572 Subtotal Total Investments $ 273,340,859 Cash $ 1,189,767 HOUSING AUTH CHKG $ 381,922 HOUSING AUTH TRUST $ 1,571,690 Subtotal Total Cash and Investments $ 274,912,549 Market Ratings Coupon] Maturity) Cost YTM I Price Value ' Moody'sI S & P 0.00 4/1/08 $ 92,155,821 3.31 100.00 $ 92,155,821 Aaa AAA $ 92,155,821 3.31 $ 92,155,821 0.00 4/1/08 $ 36,718,572 1.63 100.00 $ 36,718,572 Aaa AAA $ 36,718,572 1.63 $ 36,718,572 $ 273,762,938 3.36 $ 273,937,852 0.00 4/1/08 $ 1,189,767 0.00 100.00 $ 1,189,767 U U 0.00 4/1/08 $ 381,922 0.00 100.00 $ 381,922 U U $ 1,571,690 $ 1,571,690 Corporate Issuers CITIGROUP JP MORGAN CHASE FIRST UNION NAT BANK WAL-MART WELLS FARGO BANK $ 275,334,628 % of Portfolio (Market Value) 1.48% 3.68% 0.73% 2.27% 5.75% $ 275,509,542 "U" = Unrated Page 8 IPar Value Palm Desert Redevelopment Agency Portfolio Holdings March 31, 2008 Issuer Agency Issuers ICouponj Maturity) FED FARM CREDIT BANK FED HOME LOAN BANK FED HOME LOAN MTG CORP FED NATIONAL MTG ASSOC Market Cost YTM I Price I Value % of Portfolio (Market Value) 3.40% 8.34% 2.30% 1.60% Ratings ' Moody's l 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 March 31, 2008, 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 April 22, 2008, Pis 67dV�, c.C..At. r City Treasurer SUMMARY OF AUTHORIZED INVESTMENTS ICalifornia 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 I No Limit 1 1 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% 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 53601(h) Negotiable CDs 5 Years 30% 5 Years 30% AA- or Aa3 536010) 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% A 1 53601(k) Mutual Funds 90 Days 20% AAA & Aaa 90 Days 20% (2) AAA & Aaa 53601(I) Trust Indenture Debt Not Authorized 53601(m) Secured Bank Deposits 5 Years No Limit Not Authorized 53601(k) Local Government AAA & Aaa I I AAA & Aaa l Investment Pools 90 Days 20% or Advisor 90 Days 20% (2) or Advisor 53601(n) Mortgage -Backed 5 Years 20% A (Issuer) & Not Authorized Securities AA (Security LAW No Limit I No Limit j (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. 0.0% 1 0.0% 19.9% 15.1% 0.0% 0.0% 30.3% 13.9% I 23.5%' 61.9% 11.40/c 1 7.0% 0.0% 1 2.0% 85.1% 100.0% * Certified California Municipal Treasurer Page 10