BOARD MEETING DATE: June 4, 2010
AGENDA NO. 25

PROPOSAL:

Investment Oversight Committee

SYNOPSIS:

The Investment Oversight Committee met Friday, May 21, 2010 and discussed various issues detailed in the Committee report. The next Investment Oversight Committee meeting is scheduled for Friday, November 19, 2010 at 12:00 noon in the Executive Conference Room.

RECOMMENDED ACTIONS:

Receive and file this report. 
 

Barry R. Wallerstein, D.Env.
Executive Officer

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

Investment Committee Action Items:

Quarterly Report of Investments: Reviewed the quarterly investment report to the Governing Board. For the month of March 2010, the AQMD’s weighted average yield on total investments of $504,065,064, from all sources, was 1.24%. The allocation by investment type was 92.1% in the Los Angeles County Pooled Surplus Investment Fund (PSI) and 7.9% 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 (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 $196.5 million. SPI investments are well below the limit. 

Financial Market Update: James Martling provided the Committee with the comments on current economic and investment market conditions. In summary, Mr. Martling commented that economic news was mixed. Worries continue to exist about the European Union, the strength of the global economic recovery, and continued high unemployment rates in the US. Build America Bonds have been successfully issued by state and local governments throughout the country and have been successfully marketed in Europe as well. The value of US Treasuries has risen and yields have declined as investors seek safe investments. These lower rates ultimately keep mortgage interest rates from rising and serve to benefit construction activity. Investment returns derived from Treasuries and other fixed income/debt investments will continue to remain low in the foreseeable future. 

Other Business: None 

Public Comment: None