BOARD MEETING DATE: December 3, 2010
AGENDA NO. 27

REPORT:

 Investment Oversight Committee

SYNOPSIS:

The Investment Oversight Committee met Friday, November 19, 2010 and discussed various issues detailed in the Committee report.  The next Investment Oversight Committee meeting is scheduled for Friday, February 18, 2011 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 was Committee Member David E. Ertel. Committee Members Michael Antonovich, Michael A. Cacciotti, and Joseph Lyou attended by teleconference. Absent were Committee Members Bill Campbell, Gary Burton and Paul Sundeen.

Investment Committee Action Items:

Quarterly Report of Investments: Reviewed the quarterly investment report to the Governing Board. For the month of September 2010, the AQMD’s weighted average yield on total investments of $508,179,936, from all sources, was 1.32%. The allocation by investment type was 92.17% in the Los Angeles County Pooled Surplus Investment Fund (PSI) and 7.83% in the State of California Local Agency Investment Fund (LAIF). The Committee approved the quarterly report.

Investment Committee Discussion Items:

Cash Flow Forecast: Michael O’Kelly 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 $224.9 million. 

Financial Market Update: Martha Vujovich provided the Committee with comments on current economic and investment market conditions. In summary, Ms. Vujovich commented on the State and local government bond markets, describing an oversupply of municipal bonds, with some local governments postponing bond issues until 2011. Questions remain as to whether the Federal government will extend the Build America Bond program after it ends in December 2010. Small gains are being seen in the unemployment rates.

Calendar Year 2011 Committee Meeting Dates: For CY 2011, quarterly Investment Oversight Committee meeting dates are Friday, February 18, Friday, May 20, and Friday, November 18. The August quarterly meeting has been cancelled in conjunction with
the cancellation of all AQMD Board and Committee meetings during the month of August 2011.  

Other Business:

Committee members expressed interest in a presentation of District retirement rates, pension obligations, and employee retirement eligibility statistics and asked if the Investment Oversight Committee was the appropriate forum for this information to be presented. In addition, a request was made of staff to present projections on investment earnings for the future. 

Public Comment: None