REPORT:
Investment Oversight Committee
SYNPOSIS:
The Investment Oversight Committee met Friday, February 17, 2006 and
discussed various issues detailed in the Committee report. The next
Investment Oversight Committee meeting is scheduled for Friday, May 18,
2006 at 12:00 noon in Conference Room CC8.
RECOMMENDED ACTIONS:
Receive and file this report.
Gary Burton,
Investment Oversight Committee
Attendance: Present were Committee members Gary Burton and Paul
Sundeen. Absent were Committee members Michael Antonovich and David E. Ertel.
Investment Committee Action Items:
Quarterly Report of Investments: Reviewed the quarterly
investment report to the Governing Board. For the month of December 2005,
the AQMD’s weighted average yield on total investments of $305,586,724, from
all sources, was 3.83%. The allocation by investment type was 80.76% in the
Los Angeles County Pooled Surplus Investment Fund (PSI); 13.02% in the State
of California Local Agency Investment Fund (LAIF); and 6.22% in Federal
Agency securities and Negotiable Certificates of Deposit. This report was
accepted by the Committee Members present. Owing to the lack of a quorum, a
Committee recommendation was not made.
Approval of Annual Investment Policy and Delegation of Authority to
Appointed Treasurer to Invest AQMD Funds: The Committee reviewed the
Annual Investment Policy, which included a recommend change regarding
investment agreements for fully flexible repurchase agreements, and
discussed the renewal of its delegation of authority to its treasurer. Due
to the lack of a quorum, a Committee recommendation regarding the AQMD
Annual Investment Policy and the reauthorization of the Los Angeles County
Treasurer to invest and reinvest AQMD funds was not made.
Investment Committee Discussion Items:
Financial Market Update: Terry McGuire briefed the
Committee on the current interest rate market. In summary, Mr. McGuire
stated that the economy appears to have traction both in new jobs and
manufacturing, while the consumer and retail sales are continuing to do
well. As expected, the Federal Reserve has continued to increase the Federal
Funds Rate for the 14th time in twenty months by 25 basis points to the
current level of 4.5%. Another 25 basis points increase is expected at the
next meeting in March, the first meeting chaired by the new Fed Chairman
Bernanke. The slight inversion of the yield curve is likely to continue, but
the entire curve is expected to shift upward if current fiscal and monetary
policies continue. Iraq, Iran, terrorism threats, high oil prices and
growing budget and trade deficits are the major uncertainties facing the
economy, while continued consumer spending and the housing “bubble” are the
real wild cards.
Other Business: None
Public Comment: None
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