| REPORT: Investment
Oversight Committee
SYNPOSIS:
The Investment Oversight Committee met Friday, November 18, 2005 and
discussed various issues detailed in the Committee report. The next
Investment Oversight Committee meeting is scheduled for Friday, February
17, 2006 at 12:00 noon in Conference Room CC8.
RECOMMENDED ACTIONS:
Receive and file this report.
Michael Antonovich, Chair
Investment Oversight Committee
Attendance:
Present were Committee members Michael
Antonovich (via teleconference), Gary Burton, David E. Ertel, 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 2005, the AQMD’s weighted average yield on total
investments of $294,845,423, from all sources, was 3.29%. The allocation by
investment type was 83.6% in the Los Angeles County Pooled Surplus
Investment Fund (PSI); 13.4% in the State of California Local Agency
Investment Fund (LAIF); and 3.0% in Federal Agency securities. This report
was reviewed and accepted by the Committee members present. The Committee
voted to recommend approval.
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 $187.0 million.
Financial Market Update:
Terry McGuire briefed the Committee on the current interest rate market. In
summary, Mr. McGuire stated that the economy continues on a path of moderate
to strong growth with jobless claims lower than expected at 303K last week.
Productivity remains strong, increasing 4.1% for the third quarter, and
Personal Income increased 1.7%. New Housing Starts declined last month
raising concerns over a slowdown in the housing sector. As expected, the
Federal Reserve has continued to increase the Federal Funds Rate at a
measured pace for the past twelve meetings by 25 basis points to the current
level of 4.0%. Another 25 basis points increase is expected at the next
meeting in December. The yield curve can not really flatten much further
without going negative; the entire curve may start to shift upward if
current fiscal and monetary policies continue. Iraq, terrorism threats, the
effects of the hurricane season and high oil prices remain the major
uncertainties facing the economy.
Calendar Year 2006 Committee Meeting Dates:
For CY 2006, quarterly Investment Oversight Committee meeting dates are
Friday, February 17, Friday, May 19, and Friday, November 17. The August
quarterly meeting has been cancelled in conjunction with the cancellation of
all AQMD Board and Committee meetings during the month of August 2006.
Other Business:
None
Public Comment:
None
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