BOARD MEETING DATE: December 4, 2009
AGENDA NO. 28

REPORT:

Investment Oversight Committee

SYNOPSIS:

The Investment Oversight Committee met Friday, November 20, 2009 and discussed various issues detailed in the Committee report. The next Investment Oversight Committee meeting is scheduled for Friday, February 19, 2010 at 12:00 noon in the Executive Office Conference Room.

RECOMMENDED ACTIONS:

Receive and file this report. 
 

Michael Antonovich, Chair
Investment Oversight Committee

Attendance: Present at AQMD were Committee members Dr. Joseph Lyou, Gary Burton, David E. Ertel, and Paul Sundeen. Michael Antonovich, Michael A. Cacciotti, and Bill Campbell attended by teleconference.

Investment Committee Action Items:

Quarterly Report of Investments: Reviewed the quarterly investment report to the Governing Board. For the month of September 2009, the AQMD’s weighted average yield on total investments of $408,929,443, from all sources, was 1.61%. The allocation by investment type was 90.34% in the Los Angeles County Pooled Surplus Investment Fund (PSI) and 9.66% in the State of California Local Agency Investment Fund (LAIF). The Committee approved the quarterly report.

Investment Committee Discussion Items:

Cash Flow Forecast: Rick Pearce reported on the cash flows for the current year and projected for the next three years. AQMD Investment Policy limits its Special Purpose investments to 75% of the minimum amount of funds available for investment during the Cash Flow Horizon. That limit, which includes all funds (General, MSRC, Clean Fuels), is approximately $193.1 million. Currently, SPIs are below the limit. 

Financial Market Update: Jim Martling provided the Committee with comments on current economic and investment market conditions. In summary, Mr. Martling commented that the recession has been deeper and longer in duration than expected a year ago. Unemployment in California has reached 12.5%. Commercial real estate is in crisis with major write-down occurring. Short-term treasuries are experiencing suppression in yields, with 3-month treasuries returning 0.01% and 2-year treasuries yielding 0.72%. The recovery is going to be longer than expected, 18-24 months.

Calendar Year 2010 Committee Meeting Dates: For CY 2010, quarterly Investment Oversight Committee meeting dates are Friday, February 19, Friday, May 21, and Friday, November 19. The August quarterly meeting has been cancelled in conjunction with
the cancellation of all AQMD Board and Committee meetings during the month of August 2010.  

Other Business: None 

Public Comment: None