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From YouTube: Finance Standing Subcommittee Meeting | January 4, 2022
Description
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A
Thank
you
all
right.
Well,
it
is
one
o'clock,
so
let's
go
ahead
and
call
the
meeting
to
order.
This
is
a
special
meeting
of
the
city
council
finance,
standing
subcommittee,
which
is
composed
of
mayor
pro
tem,
garner
and
myself.
The
mayor
pro
tem
is
unable
to
join
us
today
due
to
illness.
A
We
will
proceed
with
the
meeting.
I
will
make
note
that
this
meeting
is
being
recorded
pursuant
to
assembly
bill
361.
This
meeting
will
be
conducted
by
teleconference
and
there
will
be
no
in-person
public
access
at
the
meeting
location
to
join
this
meeting.
Please
use
the
link
that
has
been
provided
by
the
city
clerk
and
is
out.
Public
comments
can
also
be
submitted
to
the
city
clerk
at
city,
clerk
at
palm
springs,
ca.gov.
A
First,
item
on
the
agenda
is
public
comment
notices,
given
that,
pursuant
to
the
brown
act,
public
comment
is
limited
only
to
those
items
that
appear
on
the
notice
and
the
agenda
of
the
special
meeting.
Do
we
have
any
public
comment.
B
A
B
B
Thank
you
for
the
time
to
speak
and
I
hope
you
have
a
chance
to
review
the
comments
that
we
submitted.
A
Mr
floyd,
thank
you
and
well.
We
don't
usually
comment
back.
I
will
tell
you
that
we
did
receive
it.
I
have
had
an
opportunity
to
read
your
comments.
This
is
a
presentation
and
discussion
committee
meeting.
There
will
be
no
action
that
will
be
taken
during
the
course
of
this
meeting
beyond
hearing
the
report
and
an
opportunity
for
myself
and
any
member
of
staff
to
ask
questions
of
the
presenters.
So
with
that,
are
there
any
other
public
comments
that
we
have
today.
A
Okay,
then
we
will
move
on
public
comment
will
be
closed
and
we
will
move
on
to
item
number
two,
which
is
a
presentation
by
chandler
asset
management,
of
the
quarterly
review
of
our
city
investments.
Nancy.
Would
you
like
to
start
with
this.
C
B
C
Perfect,
so
I'm
going
to
share
my
screen
right
now
and
just
want
to
confirm
that
everyone
is
able
to
see
this
and
see
my
screen
perfect.
So,
as
I
mentioned
in
talking
with
nancy
first,
what
I'd
like
to
do
is
just
give
a
little
bit
of
brief
economic
commentary
and
then
as
well,
go
through
the
city's
account
as
well
as
provide
a
summary
of
the
portfolio
holdings
as
well.
C
C
One
of
the
things
that
we
were
looking
at
back
then,
is
to
continue
to
get
a
little
bit
more
clarity
on
returning
to
the
level
of
economic
activity.
We
saw
pre-pandemic
now
as
we
look
at
the
market
right
now,
and
we
move
into
the
beginning
of
2022
we're
continuing
to
see
market
volatility,
especially
with
the
increase
of
the
omicron
variant,
and
how
the
impacts
that
we
could
see
from
that
relative
to
some
supply
chain
disruptions.
C
With
regards
to
the
continued
pricing
pressures
that
we've
seen
as
well,
however,
overall,
what
we
continue
to
look
at
from
an
economic
perspective
is
that
growth
is
continually
going
to
be
it's
moderate
a
little
bit,
but
will
continue
to
be
above
trend,
so,
in
a
sense,
we're
moving
continuing
in
a
positive
direction
for
economic
growth,
economic
activity.
There
is
still
some
of
that
uncertainty,
especially
related
to
the
pricing
pressures.
We
believe
we
are
at
peak
pricing
pressures
right
now
and
we'll
start
to
see
those
alleviate
a
little
bit.
C
But
what's
interesting
in
this
environment,
you
know
so
goes
the
virus
so
goes
the
economy
and,
as
we
look
to
see,
the
impacts
from
the
omicron
variant
could
definitely
impact
the
overall
economic
picture.
But
what's
interesting
is
that
the
impact
of
economic
activity
seems
to
lessen
with
each
new
wave
of
a
virus
that
comes
through
now.
One
of
the
things
that
we
have
seen,
that's
definitely
going
to
be.
A
theme
of
22
is
the
fed
and
the
fed
open
market
committee,
as
they
have
increased
their
tapering
and
now
there's
an
expectation.
C
C
Now
one
area
that
continues
to
be
strong
moving
in
that
positive
direction
is
the
employment
picture,
we'll
actually
be
getting
an
appointment
number
this
week
this
friday,
for
the
month
of
december
november,
numbers
came
in
a
little
bit
under
expectations,
where
payrolls
only
increased
by
210
000
comparably
to
consensus
of
around
550
000.
But
as
we
look
at
the
overall
picture
itself,
the
unemployment
rate
is
about
4.2.
C
Now
this
friday
we're
expecting
around
422
000
of
new
jobs
from
the
non-pro
form
payrolls,
but
what's
interesting
right
now,
it
seems
to
be
this
conversation
around
what
I'm
going
to
term
the
great
resignation,
because
what
we
saw
in
the
month
of
october
is
actually
sorry
in
the
month
of
november.
Four
and.
B
C
Million
people
quit
their
jobs
in
november.
Okay,
but
what's
interesting,
though,
is
they
didn't
leave
the
labor
force?
They
didn't
leave
the
workforce
in
a
sense.
What
they
did
is
they
migrated
to
new
jobs.
Now
we
still
have
about
10.6
million
job
openings.
In
november
we
still
have
a
participation
rate
relative
to
the
overall
population,
that's
below
pre-pandemic
levels,
but
due
to
the
environment
that
we're
in
we're
seeing
individuals
quit
their
jobs,
a
large
part
of
that
six
percent
of
those
in
hospital
were
in
hospitality.
C
So
it's
a
large
area
we're
seeing
again
this
interesting
dynamic
that
exists
in
the
labor
force
right
now,
but
it
is
still
we're
still
seeing
some
positive
numbers
relative.
The
overall
employment
numbers.
What's
interesting,
though,
as
well,
is
the
impact
that's
driving
those
individuals
to
quit
and
go
over
to
new
jobs
in
a
sense
that
great
resignation
is
coming
from
a
strong
wage
growth.
So
what
we've
seen
is
that
wage
growth
has
increased
or
the
average
hourly
earnings
has
increased
by
about
4.8
percent.
C
Now
that
definitely
has
driven
some
of
the
impacts
relative
to
inflation.
So
one
of
the
biggest
themes
that
we
saw
in
the
fourth
quarter
of
2021
was
pricing
pressures.
As
you
can
see,
the
cpi
that
chart
in
the
upper
left
hand
corner
increased
by
6.8
percent
in
november,
going
up
from
6.2
percent
in
october,
definitely
driven
by
gains
in
energy,
food,
cars
vehicles
and
rent.
I
know
everyone
can
actually
see
this.
I
find
it
interesting
right
now.
C
Those
have
been
driven,
especially
from
the
pricing
pressures
that
we
saw
related
to
some
of
those
supply
chain
disruptions,
as
well,
even
pce,
which
is
the
metric
that
the
fed
follows
increased
in
the
month
of
you
know,
november,
where
we
saw
pce
up
5.7
and
core
was
up
4.7,
definitely
above
the
fed's
target
of
2.
Now,
due.
B
C
These
upward
pressures
we've
saw
from
inflation.
The
fed
has
reacted
where
the
fed
has
increased
the
tapering
of
their
asset
purchases
and
I'll
talk
a
little
bit
more
about
this,
but
also
have
given
them
the
platform
that,
if
we
do
see
persistent
pricing
pressures
continue
into
2022,
the
fed
could
be
able
to
take
action
with
regards
to
rate
rises.
So
that's
one
of
the
things
we're
looking
at
right
now.
C
We
believe
we've
actually
met
or
are
at
peak
pricing
pressures
and
we'll
start
to
see
some
of
those
alleviate
as
we
move
into
the
late
spring
and
summer
of
2022.
But
again
it's
something
to
monitor
and
it's
something
to
continue
to
look
at.
If
those
pricing
pressures
persist,
what
activity
we
could
definitely
see
from
the
fed
one
of
the
drivers
from
those
pricing
pressures
has
been.
The
consumer
has
been
you
and
me
going
out
purchasing
goods
going
out
to
restaurants
as
such.
Now.
C
What
we
did
see,
though,
is
that
the
numbers
for
retail
sales
came
in
a
little
bit
less
than
expected
in
november
comparatively
october,
even
though
they
were
still
up
over
18
on
a
year-over-year
basis.
What
this
is
indicative
of
is
the
fact
that
it
looks
like
the
consumer
got
out
ahead
of
these
pricing
pressures
and
went
and
started
their
holiday
shopping
season
earlier
this
year.
So
we
saw
a
lot
of
that
holiday
activity
in
october.
C
I
know
personally,
I
started
doing
my
holiday
shopping
in
october,
not
wanting
to
wait
till
november
or
even
december,
which
is
what
I
usually
consistently
did
historically.
But
what
we've
seen
again
is
these
trends
that
we
see
from
the
consumer
coming
out
of
the
reopenings
we
saw
about
nine
months
ago.
Individuals
started
moving
towards
purchasing
services
versus
goods.
Now,
as
we
came
into
the
fall,
we
did
see
a
little
bit
of
a
detraction
from
the
purchasing
of
services,
and
even
now
there
is
news
of
uptick
due
to
the
virus.
C
We
have
seen
some
restaurant
numbers
relative
to
restaurant
cancellations
have
started
to
increase
airline
flight
trips
being
cancelled,
so
just
impacting
the
virus
could
definitely
impact
the
consumer.
Why
we
look
at
the
consumer
itself
is
because
70
of
our
gdp
comes
from.
Consumption
comes
from
you
and
I
going
out
purchasing
goods
and
services
for
the
overall
economy,
but.
C
C
Exists
in
the
overall
market
itself,
it's
still
helping
push
growth
as
we
move
into
the
first
half
of
2022.
Now
economic
activity,
as
you
can
see
here,
with
the
lei
and
the
chicago
fed
national
activity
index.
Both
of
these
numbers
are
suggesting
that
we
are
still
in
moderate
trend
growth
projections,
but
that
the
first
half
numbers
definitely
could
be
impacted
by
the
resurgence
of
the
virus,
as
well
as
the
impacts
from
some
of
those
supply
chains.
C
It's
just
that
we
could
see
increased
risk
posed
to
the
research
of
the
virus
and
those
ongoing
headwinds
related
to
the
supply
chain
disruptions.
One
area,
though,
of
high
economic
or
leading
economic
indicators
that
continues
to
be
a
strength
and
a
bulwark
throughout
the
entire
2020
during
the
entire
pandemic,
has
actually
been
housing.
C
Now
we
did
see,
housing
starts
decrease
a
little
bit
as
we
came
to
the
beginning
of
the
fall,
and
I
would
attribute
those
to
the
supply
chain
disruptions,
as
well
as
some
challenges
relative
to
material
costs.
But
those
have
now
come
back.
As
you
can
see,
housing
starts
jumped
in
november
up
11.8
percent.
What
I
find
interesting,
though,
is
that
conversation
around
home
prices,
home
prices
were
up,
as
you
can
see
here,
19
for
the
in
september.
C
For
the
month
of
october,
they
were
up
18.4,
and
a
lot
of
that
has
contributed
that
conversation
we're
all
familiar
with
the
lack
of
supply
supply
supply.
The
tight
supply
is
definitely
constraining
prices
I
actually
went
and
took
a
look
at
the
average
home
listing
in
palm
springs.
Right
now,
in
the
month
of
december,
was
actually
at
895
000
and
that's
up
from
the
month
of
november
about
735
000.
C
So
what
we've
seen
is
a
large
increase,
especially
in
pricing
pressures,
even
in
your
neighborhoods
as
well
has
continued
to
attribute
to
those
increases,
especially
the
lack
of
supply
and
increased
demand
that
still
exists
still
in
this
low
interest
rate
environment.
But
one
of
the
good
signs
is
is
as
the
challenges
we're
starting
to
see.
We
saw
the
ism
manufacturing
numbers
today,
some
of
the
challenges
that
some
of
the
sectors
started
to
experience
from
some
of
the
supply
chain.
C
Disruptions
are
starting
to
alleviate
themselves
and
you
can
see
that
by
that
housing
starts
number
that
increase
in
the
month
of
november.
Now,
as
we
look
at
manufacturing
that
just
indicated
the
ism
numbers
came
in
today
for
manufacturing.
What
we
did
see
is
that
ism
number
declined.
As
noted
in
this
production
of
this
report.
We
saw
the
ism
for
november
at
61.1
for
the
month
of
december,
that
declined
to
58.7,
so
it
declined
a
little
bit.
But
what's
interesting
is
we
actually
look
at
the
data?
The
data
was
actually
positive.
C
The
first
column,
first
line
in
the
columns
in
the
upper
left
hand
corner
with
the
impact
that
we
saw
from
the
delta
variant,
constraining
growth
in
the
third
quarter,
definitely
from
the
personal
consumption
expenditures,
but
as
we
kind
of
came
out
of
that
and
moved
into
the
rest
of
the
year,
the
definite
output
that
we
saw
in
those
positive
numbers
that
I
even
referenced
already
from
the
consumer
in
the
fourth
quarter,
bringing
our
gdp
up
strong
and
historic
for
2021..
C
C
C
So
what
the
fed
has
been
doing
and
you'll
notice
here
by
this
chart
in
the
upper
left
hand
corner
the
fed
has
actually
been
making
purchases
of
120
billion
a
month
of
treasuries
and
agency-backed
securities
in
response
to
the
pandemic,
to
be
able
to
help
support
the
economy.
This
is
consistent
with
the
programs
that
they
had
set
up
in
place
coming
out
of
the
2008
2009
great
recession,
and
you
can
see
the
fed's
balance
sheet
increased,
almost
touching
9
trillion,
as
at
the
end
of
december.
C
In
november,
they
announced
the
beginning
of
the
tapering
or
the
lowering
of
those
asset
purchases
by
15
billion
a
month.
Well,
the
fed
then
came
out
in
december
and
said
due
to
the
unexpected,
consistent
pricing
pressures
that
we're
seeing
the
fed
has,
in
a
sense,
expediated
the
tapering
of
their
asset
purchases,
where
they're
now
purchasing
or
lowering
those
purchases
by
30
billion
a
month
with
the
expectation
now
that
they're
going
to
complete
the
tapering
of
their
asset
purchases
by
the
spring,
possibly
by
by
march
or
april,
instead
of
waiting
to
the
mid-summer
to
do
so.
C
Now,
the
first
one
kind
of
more
expecting
in
early
summer
is
when
we
could
see
that.
But
the
good
thing
is
is
that
the
fed
is
actually
going
to
be
data
dependent.
The
expectations
for
rate
hikes
are
definitely
as
a
backdrop
to
continued
strong
economic
growth
and
the
fed
is
definitely
going
to
give
themselves
an
opportunity
to
pivot.
C
If
all
of
a
sudden
we
see
pricing
pressures
alleviate
quicker
than
expected,
or
vice
versa,
if
the
pricing
pressures
are
a
little
bit
more
persistent
than
expected,
so
the
good
thing
with
the
fed
is
one
of
the
key
points
that
they
want
to
consistently
make
for.
The
market
is
providing
forward
guidance.
C
We
move
into
that
continued
positive
direction
from
a
labor
perspective,
as
well
as
a
continued
growth
perspective
and
alleviation
of
some
of
those
pricing
pressures,
but
it
is
definitely
an
expectation
and
belief.
We
are
coming
off
of
this
zero
boundary
rate
in
scenario
that
we've
been
in
for
the
past
couple
years
this
year,
and
so
that's
one
of
the
things
we'll
definitely
look
at
and
finally
bond
yields.
C
So,
with
the
roller
coaster
we
went
through
in
2021,
you
can
see
that
definitely
represented
by
movements
in
interest
rates
in
that
chart
in
the
upper
left-hand
corner.
The
10-year
treasury
note
indicated
the
solid
green,
the
five-year
note
in
the
dotted
gray
and
in
dotted
magenta
lines
by
the
two-year
note
earlier.
In
the
year
we
saw
interest
rates
increase
and
then
due
to
the
delta
variant
they
flattened
off
until
later.
In
the
year
we
did
see
again
interest
rates
start
to
increase,
in
a
sense,
the
steepening
of
the
yield
curve.
C
C
We
have
seen
from
the
overall
market
itself
and
you'll
notice
the
difference
between
where
the
yield
curve
is
first
off,
that
solid
green
line
is
november
of
21,
comparatively
that
dotted
magenta
line
where
we
saw
a
year
ago,
but
also
the
steepening
of
the
curve
that
we've
seen
from
august
of
21
into
november
of
21..
We
have
seen
rates
steepen
and
we
do
expect
that
there's
still
an
opportunity
for
rates
to
continue
to
steepen
as
we
move
into
the
first
half
of
2022..
C
One
thing
to
keep
in
mind
with
this
is
the
fact
that
bonds
and
the
bonds
that
the
city
holds
have
their
value
has
an
inverse
relationship
to
the
movement
of
interest
rates.
So
when
interest
rates
go
up,
the
value
of
bonds
go
down
when
interest
rates
go
down
the
value
of
bonds
go
up
two
things
with
that
one.
A
Chris,
this
is
very
good
information.
I
would
ask
that
a
copy
of
your
slides
be
made
available
to
all
of
us
in
as
well
as
posted
to
our
website,
so
that
they're
available
to
the
public.
B
A
I'll
do
for
any
questions
I
have
until
after
the
next
presentation.
C
The
chandler
asset
meant
the
the
performance
objective
is
based
off
of
a
benchmark,
a
market
index
of
a
one
to
five
year,
us
treasury
agency
index
and
the
strategies
make
sure
we
achieve
these
objectives,
making
sure
we're
investing
high
quality,
fixed
income
securities
consistent
with
the
investment
policy,
as
well
as
focusing
on
the
social
responsible
investment,
as
well
as
with
california
government
code.
This
page,
I
believe
in
the
next
page,
are
actually
two
of
the
most
important
pages
of
the
entire
presentation.
C
And
now,
let's
look
at
the
characteristics
of
the
city's
portfolio,
so,
first
off
I'm
going
to
focus
on
that
center
column,
where
it
shows
the
city's
portfolio
as
of
november
30th,
we
can
see
the
average
maturity
is
1.37
years.
Our
modified
duration
is
1.31,
the
purchase
yield
is
0.47
percent.
The
market
yield
is
0.40,
average
credit
quality,
double
a
plus
and
a
total
market
value
of
146.6
million.
C
A
couple
of
key
points:
you'll
notice,
the
increase
in
market
value
from
831
to
11
30.,
that's
due
to
deposits
that
were
made
in
working
with
staff
from
liquidity
accounts
into
the
city's
core
portfolio
during
that
time
period,
and
I
would
also
like
to
point
out
due
to
that
fact.
We
did
get
a
large
deposit
that
came
in
on
11
30..
So
that's
why
we'll
and
I'll
show
you
in
the
next
slide,
where
the
money
market
value
increased,
but
that
also
affected
some
of
the
other
numbers
we
see
here.
C
If
we
went
out
and
purchased
all
the
securities
on
11
30
that
the
city
had
currently
has
in
their
portfolio
the
yield
we
would
get
would
be
0.40,
but
instead
we've
got
a
purchase
yield
of
0.47,
which
is
higher
than
the
market
yield
secondary
and
third.
C
The
last
thing
I
want
to
mention
is
that
we
are
continually
building
out
the
portfolio
bringing
it
to
that
duration
of
the
benchmark,
so
you'll
notice
the
direct,
the
benchmark
duration,
which
is
that
one
to
five
year
ice
bammel
us
treasury
agency
index
is
around
two
and
a
half
years.
The
portfolio
is
around
1.31
years,
as
we
continue
to
work
with
staff
and
bringing
the
portfolio
with
additional
deposits,
as
well
as
managing
the
portfolio.
C
With
our
recommendations
to
staff,
we
will
continue
bringing
the
portfolio
in
a
very
methodical,
deliberate
way
to
the
portfolio
duration,
not
just
rushing
all
at
once
to
bring
that
portfolio
at
that
time
period,
and
I
think
the
portfolio
has
benefited
from
that,
especially
in
a
rising
rate
environment.
Now
the
sector
distribution
as
you'll
notice.
Here,
I'm
going
to
focus
on
that
chart
on
the
left-hand
side
that
doughnut
here
you
can
see
the
u.s
treasury
allocation
is
just
under
43
percent.
C
Market
fund
and
those
funds
have
already
been
deployed
in
the
month
of
december,
but
this
report,
as
is
as
of
november
30th,
and
so
that
has
come,
that
back
down
to
one
percent
supernational
at
3.4,
as
well
as
the
asset-backed
securities
just
under
one
percent,
negotiable
cds,
one
and
a
half
percent
here-
are
all
the
issuers
for
the
city's
portfolio.
C
As
you
can
see
here,
the
majority
of
the
city's
positions
is
in
u.s
government
debt
or
within
debt,
with
the
implied
backing
of
the
united
states
government
and
with
the
majority
a
very
well
diversified
portfolio
with
our
goal
is
to
make
sure
we
keep
all
of
those
corporate
allocations
below
two
and
a
half
percent.
It's
a
very
well
diversified
portfolio
and
at
this
time
we
do
not
have
any
concerns
about
any
of
the
positions
in
the
portfolio,
but
are
there.
A
I
would
like
to
go
back
one
slide
chris,
if
we
could
all
right
the
sector
distribution
that
we
have
right
now.
This
is
the
actual
distribution,
or
is
this
the
target
distribution
that
we
have.
C
A
Right
and
how
does
that
compare
to
targets.
C
I
would
say
this
is
in
line
with
the
general
overall
targets.
I
think
in
this
it's
interesting
in
this
environment,
especially
in
the
environment,
that
we
saw
in
november
30th
the
adjustments
relative
to
based
off
of
spreads
and
the
spread
environment.
Okay
about
what
would
be
more
appropriate.
C
We
saw
a
very
very
we
still
see
a
very,
very
tight
spread
level,
but
as
we're
building
out
the
portfolio,
what
we
would
want
to
do
is
make
sure
we
are
allocating
towards
sectors
that
we
believe
are
going
to
provide
those
appropriate
spread
levels.
In
addition
to
making
sure
we're
meeting
the
mandates
set
forth
by
social
responsible
investing
for
the
city's
portfolio,
I
would
expect
that
in
other
I
would
say
more
mature
portfolios.
C
You
possibly
would
see
a
corporate
allocation
closer
to
20
to
25
and
maybe
an
asset
back
allocation
that
might
be
closer
to
three
to
four
percent,
as
well
as
a
supernatural
allocation
that
would
be
a
little
bit
higher
than
that
as
well.
C
So,
therefore
that
allocation
agencies
decreased-
and
I
could
I
would
expect
that
until
we
actually
start
to
see
some
issuance
from
fannie
and
freddie
and
some
other
agencies
that
that
allocation
continue
to
dwindle
and
the
treasury
allocation
might
continue
to
stay
as
stable,
where
it's
at
right.
Now,
all
right.
A
Talk
to
me
a
little
bit
more
about
the
agency
allocation.
What
is
in
that
part
of
the
portfolio
and
how
those
percentages
of
30.9
percent
would
compare
to
best
practices,
among
other
municipalities
that
you
are
working
with.
C
So
I'm
going
to
jump
ahead
a
little
bit,
so
we
can
actually
talk
specifically
about
those.
So
if
we
look
right
here
for
the
agency
bonds,
okay,
which
you
can
see
here-
are
those
are
federal
home
loan
banks
agency
debt
from
fannie
and
freddie
that
have
the
implied
backing
of
the
united
states
government,
so
they're
very
highly
rated,
as
you
can
see
here,
with
triple
a
ratings
or
high
ratings
by
s,
p,
moody's
and
or
fitch.
C
C
I
would
expect
that
agency
allocation
to
continue
to
dwindle
as
we
move
into
2022
unless
we
actually
see
some
issuance
that
comes
forth
from
the
federal
home
loan
from
the
federal
home
loan
association,
as
well
as
the
other
associations
fannie
freddie
as
such
now
relative,
it's
it's
challenging
sometimes
to
compare
to
other
public
agencies.
I
would
think
that
that's
in
line
that
30
to
40
percent,
I
think,
is
in
line
with
with
some
other
cities,
especially
of
your
size.
C
What
I
would
say,
though,
it's
interesting,
because
when
we
look
at
the
portfolio
duration
is
the
most
important
key
and
then
sector
allocation
is
the
second
area
and
what
we
do
on
a
monthly
basis
is
reallocate
to
look
at
what
different
sectors
could
be
most
appropriate,
based
off
of
spread
levels
and
risk
tolerance.
Levels
in
2020
towards
the
end
of
2020
agency
bonds
were
very
attractive
because
they
were
providing
a
spread
of
about
plus
six
to
plus
eight
above
treasuries,
okay
and
then
all
of
a
sudden
that
stopped
okay.
C
And
so
that's
why
that
agency
allocation
has
continued
to
dwindle,
and
I
would
not
expect
that
to
increase
significantly
unless
we
see
new
issuance,
because
there's
no
reason
to
pay
those
high
prices
for
those
bonds
for
the
city.
If
you're
not
getting
that
interest
rate
compensation
enough.
A
I
follow
that
and
I
agree
the
corporate
allocation
of
11.1
percent
did
I
hear
you
say
that
you've
seen
that
in
other
municipalities
as
high
as
25
percent.
C
C
Generally,
we
have
seen
20
to
25
percent
as
a
allocation
or
a
sleeve
in
a
city's
portfolio
again
due
to
the
spread
levels
that
existed
now,
corporate
bonds,
we've
seen
spread
levels
in
the
corporate
allocation
be
very
tight
over
the
past
year,
especially
the
amount
of
issuance.
C
Now
we
are
expecting,
especially
as
we've
turned
over
the
calendar
year
to
start
to
see
some
new
issuance
that
will
come
through
for
corporate
allocations,
however,
that
corporate
allocation
of
20
to
25
percent
are
for
cities
that
do
not
have
some
of
the
same
focus
that
the
city
of
palm
springs
has
with
regards
to
making
sure
we're
investing
in
social
responsible,
investing,
and
so
due
to
that
fact,
you
know
I
don't
think
we'll
possibly
get
to
that
level
of
20
or
25
percent
for
a
corporate
allocation.
C
Unless
we
continue
to
see
attractive
opportunities
in
the
market,
we
bring
them
to
staff,
but
that's
I
I
would
say
that's
where
we're
at
is
most
cities.
I
would
say
that
we
work
with
20-25.
C
Oh
no,
these
are
all
bonds.
There
is
no
yeah
per
california
government
code,
53601
per
the
city's
investment
policy.
We
are
only
allowed
to
purchase
high
quality
fixed
income
securities,
so
especially
the
corporate
corporate
bonds
or
the
corporate
allocation
is
simply
corporate
debt
and
there
are
no
equities
in
any
of
the
city's
portfolio.
All
right.
C
Thank
you.
Those
are
great
questions,
thank
you
and
then
moving
forward.
As
we
talked
about
the
issuers
and
now,
as
we
can
see
here,
the
quality
distribution.
This
is
based
off
of
s
p,
so
you
can
see
here
that
70,
just
under
75
of
the
portfolio
is
double
a
rated
by
s
p.
We
do
see
a
couple
positions
that
are
non-rated,
that's
most
likely
the
negotiable
cds
in
the
asset-backed
security
that
is
not
rated
by
s
p,
but
is
rated
by
moody's
and
or
finch.
So,
therefore,
it
is
compliance
with
the
city's
investment
policy.
C
If
this
rating
source
was
actually
based
off
of
moody's
under
fitch,
you
would
see
the
majority
of
this
being
triple
a
the
reason
why
it's
a
majority,
seventy
five
percent
double
a
is
because
smp
still
has
the
united
states
government
at
double
a
rated,
and
here
you
can
see
the
duration
distribution
in
a
sense,
the
term
structure
the
portfolio
now
a
large
majority
of
that,
especially
in
that
zero
to
zero
point.
Two
five
percent
range
is
due
to
that
recent
deposit.
C
We
did
see
at
the
end
of
november,
but
we
can
also
see
the
diversification
comparatively
to
the
one
to
five-year
benchmark,
as
we
do
look
to
make
sure
we're
maintaining
that
liquidity.
B
C
B
C
That's
one
areas
where
actually
look
to
add
some
opportunities
for
the
city
and
the
city's
portfolio
and
around
that
three
to
four
year
range
and
that
four
to
five
year
range
as
well,
very
good
and,
as
you
can
see,
here's
the
comparison
between
the
durations
of
where
we
were
back
in
august
to
november
and
as
I
mentioned
before,
you
can
see
that
increase
in
that
three
to
four
year
range
and
highlighting
around
that
four
to
five
year
range
as
well,
and
now
the
investment
performance.
C
So,
as
you
can
see,
for
the
last
three
months,
the
city's
portfolio
had
a
return
of
minus
zero
point:
three
percent
comparatively
the
benchmark
at
minus
zero
point,
six,
nine
percent,
and
then
since
inception,
which
is
three
thirty
one.
Twenty
one,
the
portfolio
is
down
this
minus
0.2
compared
to
the
benchmark
at
minus
0.3
percent.
Now,
first
off
this
is
a
total
return.
So
what
this
is
representative
of
representative
of
is
the
depreciation
of
the
value
of
the
bonds
that
the
city
holds
as
we've
seen,
interest
rates
increase.
C
However,
at
the
same
time,
though,
the
city
is
still
maintaining
and
receiving
income
for
the
bonds
that
the
city
holds
and,
as
we
do,
reinvestments
making
sure
we're
increasing
that
income
over
time.
So,
as
we
move
into
a
year,
we're
hoping
to
start
to
see
these
numbers
start
to
move
over
time.
C
Mia,
that's
a
great
point
so
right
now,
the
yield
for
the
city's
portfolio
is
47
basis
points
and
as
we
look
at
and
I
can
actually
jump
to
the
showing
what
the
yield
right
now
is
for
the
reporting
port.
That
was
actually
the
next
slide.
So
you
can
see
here
for
the
other
positions
that
the
city
maintains
in
lake
as
well
as
in
cal
trust.
The
yield
on
that
is
47
basis
points,
so
our
portfolio
having
yield
of
30
basis
points
greater
than
those
liquidity
components.
Leaf.
C
Right
now
is
providing
a
yield
of
about
21
basis
points
so
again,
some
of
the
challenges
that
exist,
especially
in
this
low
rate
environment
for
some
of
those
vehicles-
and
you
can
see
here-
here's
the
allocation
between
leif,
as
well
as
with
the
local
government
investment
pool,
you'll
notice,
a
big
change
between
these
two.
C
We
actually
worked
with
staff
and
made
a
recommendation
that,
due
to
the
environment
that
we're
in
right
now
with
the
fact
that
life
was
earning
a
yield
substantially
higher
than
what
the
cal
trust
portfolio
was,
we
made
a
recommendation
to
actually
move
more
assets
into
life
than
keeping
it
in
caltrus.
C
C
So
leaf
right
now
is
returning
21
basis
points.
Cal
trust
is
13
basis
points
mayor,
militant.
The
other
reason
for
that
is
leaf
does
provide
dollar
for
dollar
liquidity
for
the
city.
Cal
trust,
however,
provides
a
floating
nav,
and
so
one
of
our
recommendations
was
that,
due
to
a
rising
interest
rate
environment,
it
would
behoove
the
city
to
actually
take
advantage
of
that
dollar-for-dollar
withdrawal
component.
That
leaf
has.
C
Whereas,
if
you
left
money
in
the
cal
trusts
component,
you
actually
could
possibly
receive
a
little
bit
less
than
it's
total
in
there
because
of
that
floating
nav.
It's
not
dollar
for
dollar,
and
that's
why
that
was
another
component
to
our
recommendation.
Fair
enough.
Okay
and,
as
you
can
see
here,
is
the
allocations
between
the
two
and
then
finally
consolidated
information.
C
All
right-
and
here
again
is
the
consolidated
breakdown
between
the
two,
the
donut
you'll
notice.
Again,
the
big
differences
and
changes
between
the
amount-
that's
in
the
local
government
pool
cal
trust
compared
to
relief
as
they
increased
during
that
time
period,
as
well
as
the
difference
in
the
money
market
fund,
but
again
23
in
treasury
16,
just
under
70
percent
agencies,
six
percent
corporates
and
one
point:
eight
percent
in
super
nationals.
A
And
that
amount
that
is
in
corporate
again
its
corporate
bonds?
How
are
we
making
decisions
as
to
where
to
make
investments?
What's
what's
the
criteria
that
goes
into
determining
what
bonds
you're
bringing
into
the
portfolio.
C
So,
first
off
that
criteria
is
following
a
initial
screening
and
approval
list
that
we
have
worked
with
with
staff.
So
we
had
already
back
in
april,
going
through
a
due
diligence
process
and
making
recommendations
to
provide
a
list
of
corporate
bonds
that
actually
fall
inside
the
guidance
of
social
responsible.
Investing.
C
If
and
when,
due
to
working
with
staff,
we
will
make
our
recommendations
to
allocate
assets
that
come
into
the
portfolio.
We
look
again
to
make
sure
we're
maintaining
safety
and
liquidity
as
those
components.
We
then
secondarily
look
at
the
sectors,
which
would
be
the
most
appropriate
sectors,
whether
it's
treasuries
agencies,
supernaturals
corporates,
as
we
discussed.
If
we
then
believe
corporate
allocations
is
going
to
benefit,
we
then
go
through
that
that
list,
and
we
do
have
issuers
that
meet
that
retire.
That
requirement
and
are
on
the
list
to
our
recommendations.
We
provide
that
recommendation
to
staff.
A
So
are
these
specific
investments,
I've
decided
to
invest
in
abc
core
corporate
bonds
or
are
you
operating
off
of
and
I'm
gonna
have
to
use
an
equity
term?
Some
type
of.
C
I'm
I
didn't
catch
that
last
term.
I
apologize.
C
So,
as
you
can
see
here,
what
we
have
here
is
the
holdings
report,
so
you'll
notice
here
that
here
are
all
the
corporate
bonds
that
the
city
owns.
As
you
can
see,
the
number
one
bond
here
is
apple
and
again
this
is
showing
you
have
an
apple
bond
of
two
million
dollars.
You
see
an
investment
in
microsoft.
C
I
would
notice
charles
schwab,
amazon
as
well
as
you
can
see
here
all
the
other
positions
so
they're.
Actually,
individual
corporate
bonds
into
entities
such
as
john
deere
as
such.
A
And
all
of
these
fall
within
what
is
defined
as
socially
responsible.
So
could
you
give
us
a
definition
of
what
socially
responsible
means?
What
that
includes?
What
that
excludes.
C
Sure
so,
first
off
I'll
just
review
the
process
that
we
went
through
first
off
with
staff
to
put
this
list
together,
staff
had
come
to
us
and
said:
look.
We
are
looking
to
be
able
to
provide
a
investment
policy
and
investment
program
that
focuses
on
social
responsible,
investing
now
social
responsible,
investing
and
environmental
social
governance
are
the
two
vernaculars
that
are
used
to
be
able
to.
You
know,
be
able
to
invest
from
that
social
responsible
process.
C
What
we
did
is
we
cross
reference,
all
four
of
those
funds
to
look
at
what
companies
or
corporations
are
listed
on
all
four
funds.
Okay,
once
we
have
put
that
list
together,
we
provided
it
to
staff
to
review
to
make
sure
if
this
they
were
comfortable
with
all
of
the
positions
that
were
part
of
that
list
and
as
I'm
looking
at
there's
about
a
list
of
about
30
bonds
that
that
are
part
or
30
corporations.
I
apologize
that
meet
that
requirements.
Now
the
requirements
set
forth
about
why
they
were
part
of
these.
C
Each
individual
fund
is
different
and
pertaining
to
each
individual
fund
from
a
social
guidance
and
governance
perspective.
When
we
look
at
social
guidance,
environmental,
social
governance,
it's
there
promoting
those
specific
goals
relative
to
environmental,
social
governance
and
social
responsible
investing
when
we
look
at
it
from
a
sri
component
that
is
restricting
specific
investments.
So
I
know
specifically,
we
had
initially
talked
about
making
sure
that
we
are
not
investing
in
any
alcohol
tobacco
funds
or
any
manufacture
of
alcohol
tobacco,
as
well
as
any
entities
that
distribute
firearms
such
as
walmart
example.
C
B
I
think
it's
important
to
note
too
that
as
an
overlay,
this
language
is
included
in
the
city's
investment
policy,
as
well
as
a
management
directive
that
nancy
and
her
staff
signed
off
on
and
then
each
each
transaction
is
subject
to
approval.
So
before
chris
and
jason
go
in
and
transact
on
the
city's
behalf,
we
share
our
recommendations
with
nancy
and
then
she
provides
us
with
final
approval
to
go
ahead
and
purchase
bonds
into
the
city's
portfolio.
So
there
are
several
layers
of
protection.
A
I
really
appreciate
you
walking
through
some
of
the
process
here,
because
these
are
terms
that
get
used
very
commonly,
but
I
think
are
very
frequently
misunderstood
in
terms
of
what
they
mean
in
terms
of
actual
practice.
The
socially
responsible
investment
program
that
the
city
of
palm
springs
has.
Would
you
describe
that
as
consistent
with
a
large
number
of
your
municipal
clients,
or
are
we
a
outlier
in
our
approach
to
investing.
C
So
I
think
I'm
going
to
answer
that
in
two
folds.
First,
I
believe
you
are
an
outlier
relative
to
the
management
of
the
city's
funds,
incorporating
that
other
layer
of
risk
management
that
other
layer
of
focusing
on
social
responsible.
Investing
with
regards
to
those
clients
that
we
work
with
that
incorporate
social
responsible
investing.
C
I
think
the
processee
is
in
line
and
is
consistent
with
best
practices
that
we've
seen
from
other
public
agencies
that
have
decided
to
adopt
the
social
responsible,
investing
as
a
part
of
their
investment
program.
So,
and
I
would
actually
commend
the
city
for
the
process
that's
been
established,
and
not
only
for,
I
think,
what's
also
important,
is
the
review
of
it
on
an
annual
basis.
C
C
And
I
do
not
have
any
other
questions
or
I'm
sorry.
I
don't
have
anything
else
for
my
presentation
unless
there
are
any
other
questions
regarding
the
holdings
for
the
city's
portfolio
or
any
of
the
transactions
that
occurred
over
the
past
three
months.
A
Nancy
justin:
do
you
have
any
additional
questions
or
comments
that
you
would
like
to
make?
I
do.
B
A
Well,
I
want
to
thank
you
on
behalf
of
the
city
and
the
city
council,
for
an
excellent
presentation.
I
look
forward
to
having
the
slides
available
and
we
we
will
look
forward
to
the
very
next
meeting
that
we
have
an
opportunity
to
hear
from
you
and
if
there
is
no
other
business
before
the
committee,
the
meeting
is
adjourned
and
thank
you
and
everybody.
Please
stay
safe.