BOARD MEETING DATE: June 5, 2009
AGENDA NO. 29

PROPOSAL:

Investment Oversight Committee

SYNOPSIS:

The Investment Oversight Committee met Friday, May 22, 2009 and discussed various issues detailed in the Committee report. The next Investment Oversight Committee meeting is scheduled for Friday, November 20, 2009 at 12:00 noon in the Executive Conference Room.

RECOMMENDED ACTION:

Receive and file this report.
 

Michael Antonovich, Chair
Investment Oversight Committee

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

Investment Committee Action Items:

Quarterly Report of Investments: Reviewed the quarterly investment report to the Governing Board. For the month of March 2009, the AQMD’s weighted average yield on total investments of $417,627,517, from all sources, was 1.85%. The allocation by investment type was 90.5% in the Los Angeles County Pooled Surplus Investment Fund (PSI) and 9.5% 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 (SPI) 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 $201.8 million. SPI investments are well 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 economic good news is that the recession is losing its bite. The “stress testing” of the banks was not the bad news many expected. Less than half of the banks needed capital. Credit spreads have tightened with investors increasingly turning to bonds not guaranteed by the US government. Financial debt has outperformed industrial debt in the last 6 weeks. Many economists and investors are seeing “green shoots” and are predicting real recovery for this fall.
 

Other Business: None
 

Public Comment: None