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HomeMy WebLinkAboutFinance Committee - November 14, 2019CITY OF NEWPORT BEACH FINANCE COMMITTEE AGENDA - Final 100 Civic Center Drive - Crystal Cove Conference Room, Bay 2D Thursday, November 14, 2019 - 3:00 PM Finance Committee Members: Will O'Neill, Chair / Mayor Pro Tem Diane Dixon, Mayor Joy Brenner, Council Member William Collopy, Committee Member John Reed, Committee Member Joe Stapleton, Committee Member Larry Tucker, Committee Member Staff Members: Grace K. Leung, City Manager Dan Matusiewicz, Finance Director / Treasurer Steve Montano, Deputy Director, Finance Marlene Burns, Administrative Specialist to the Finance Director The Finance Committee meeting is subject to the Ralph M. Brown Act. Among other things, the Brown Act requires that the Finance Committee agenda be posted at least seventy-two (72) hours in advance of each regular meeting and that the public be allowed to comment on agenda items before the Committee and items not on the agenda but are within the subject matter jurisdiction of the Finance Committee. The Chair may limit public comments to a reasonable amount of time, generally three (3) minutes per person. The City of Newport Beach’s goal is to comply with the Americans with Disabilities Act (ADA) in all respects. If, as an attendee or a participant at this meeting, you will need special assistance beyond what is normally provided, we will attempt to accommodate you in every reasonable manner. Please contact Dan Matusiewicz, Finance Director, at least forty-eight (48) hours prior to the meeting to inform us of your particular needs and to determine if accommodation is feasible at (949) 644-3123 or dmatusiewicz@newportbeachca.gov. NOTICE REGARDING PRESENTATIONS REQUIRING USE OF CITY EQUIPMENT Any presentation requiring the use of the City of Newport Beach’s equipment must be submitted to the Finance Department 24 hours prior to the scheduled meeting. I.CALL MEETING TO ORDER II.ROLL CALL III.PUBLIC COMMENTS Public comments are invited on agenda and non-agenda items generally considered to be within the subject matter jurisdiction of the Finance Committee. Speakers must limit comments to three (3) minutes. Before speaking, we invite, but do not require, you to state your name for the record. The Finance Committee has the discretion to extend or shorten the speakers’ time limit on agenda or non-agenda items, provided the time limit adjustment is applied equally to all speakers. As a courtesy, please turn cell phones off or set them in the silent mode. IV.CONSENT CALENDAR MINUTES OF OCTOBER 10, 2019A. Recommended Action: Approve and file. DRAFT MINUTES 101019 November 14, 2019 Page 2 Finance Committee Meeting V.CURRENT BUSINESS PRELIMINARY PENSION FUNDING RECOMMENDATION - FISCAL YEAR 2020-21 A. Summary: Staff will update the committee with the latest information regarding pension actuarial valuations and CalPERS capital market assumptions. Recommended Action: Receive and file. STAFF REPORT ATTACHMENT A ATTACHMENT A-1 ATTACHMENT A-2 ATTACHMENT B ATTACHMENT C ATTACHMENT D INVESTMENT POLICY REVIEWB. Summary: Staff and/or one or more investment advisors will discuss the City’s investment policy’s conformance to the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends. Recommended Action: Receive and file. STAFF REPORT ATTACHMENT A INVESTMENT PERFORMANCE REVIEWC. Summary: Staff and/or one or more investment advisors will describe the performance of the City's investment portfolio. Recommended Action: Receive and file. STAFF REPORT ATTACHMENT A ATTACHMENT B November 14, 2019 Page 3 Finance Committee Meeting REVIEW AND DISCUSS FINANCE COMMITTEE WORKPLAND. Summary: Staff and Finance Committee will review the proposed work plan and adjust as necessary. Recommended Action: Receive and file. ATTACHMENT A VI.FINANCE COMMITTEE ANNOUNCEMENTS ON MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON-DISCUSSION ITEM) VII.ADJOURNMENT Finance Committee Meeting Minutes October 10, 2019 Page 1 of 9 CITY OF NEWPORT BEACH FINANCE COMMITTEE OCTOBER 10, 2019 MEETING MINUTES I. CALL MEETING TO ORDER The meeting was called to order at 3:00 p.m. in the Crystal Cove Conference Room, Bay 2D, 100 Civic Center Drive, Newport Beach, California 92660. II. ROLL CALL PRESENT: Mayor Pro Tem/Chair Will O’Neill, Mayor Diane Dixon, Council Member Joy Brenner, Committee Member William Collopy, Committee Member John Reed, Committee Member Joe Stapleton, and Committee Member Larry Tucker ABSENT: None STAFF PRESENT: City Manager Grace K. Leung, Finance Director/Treasurer Dan Matusiewicz, Deputy Director/Finance Steve Montano, Accounting Manager/Finance Rukshana Virany, Community Development Director Seimone Jurjis, Real Property Administrator Lauren Whitlinger, Revenue Auditor Antonio Velasco, Fire Chief Jeff Boyles, Fire Battalion Chief Brian McDonough, Budget Analyst Amy Mayfield, Administrative Manager Angela Crespi, and Administrative Specialist to the Finance Director Marlene Burns OTHER ENTITIES: None MEMBERS OF THE PUBLIC: Allen Cashion and Jim Mosher III. PUBLIC COMMENTS Chair O’Neill announced the open public comment period and Consent Calendar item would be considered at the same time. IV. CONSENT CALENDAR A. MINUTES OF JUNE 27, 2019 Recommended Action: Approve and file. Chair O’Neill opened public comments. Noting there were no other members of the public who elected to speak, Chair O’Neill closed public comments. MOTION: Chair O’Neill moved, and Committee Member Collopy seconded, to approve the minutes. The motion carried 7 ayes – 0 noes. V. CURRENT BUSINESS A. USE OF CITY PROPERTY AT LESS THAN FAIR MARKET VALUE Summary: Finance Committee Meeting Minutes October 10, 2019 Page 2 of 9 At the March 14, 2019, Finance Committee meeting, Council Member Brenner requested a report regarding the value of the properties rented for charitable purposes and expressed a desire to see a Finance Policy on how often the City should conduct a market analysis of the leased properties. Chair O’Neill recommended an item be placed on a future agenda to discuss a potential F-Policy update and requested a discussion with Community Development Department staff. Recommended Action: Review the list of properties and agreements with less than open fair market value rent, and provide input to staff. Community Development Director Seimone Jurjis reported that the City manages 365 different properties, of which third parties use 22 and pay less than open, fair market value rent. The real property portfolio is administered according to City Council Policy F-7, Income Property, which requires third parties using City-owned real property to be charged fair market value (“FMV”) rent. He reported that in order for a property to be charged less than FMV, a City Council waiver is required, and all 22 properties have received such waiver for unique reasons through an agreement with the City. Lastly, he advised while there were not many official appraisal reports available for the 22 properties, an estimate was derived for each property. Mayor Diane Dixon stated that it is essential for the governance of the properties for the FMV to be reviewed regularly. In response to Mayor Dixon’s inquiry, Real Property Administrator Lauren Whitlinger advised that there is no current review process for these properties. Mayor Dixon expressed the need for regular audits or reviews of the subject properties to establish their equity and the economic impact of receiving less than FMV. Chair O’Neill stated that prime real estate in Newport Beach is receiving less than FMV. In response to Committee Member Tucker’s inquiry, Community Development Director Jurjis reported the properties operate smoothly, other than occasional disputes. In response to Committee Member Tucker’s inquiry, Real Property Administrator Lauren Whitlinger clarified that the Fletcher Jones property, 3300 Jamboree Road, has use of Bayview Way under an encroachment agreement, which is a separate agreement. She stated that the land is owned by the City, as it was conveyed to the City via a deed by the Transportation Corridor Agency (TCA). Committee Member Tucker inquired as to any restrictions. Real Property Administrator Whitlinger responded that there are. It was noted that at one point it was Freeway Reservation land as it was once considered that the California State Route 73 could be expanded and have an off-ramp. Chair O’Neill opened public comments. Jim Mosher expressed concern regarding the appraisal for the Newport Beach Boys and Girls Club Facility and stated that the appraisal should have included the land, rather than the building. He also stated the land was appraised at a very low-value due to its PR (Parks and Recreation) zoning. He also stated the land could be extremely valuable to the City if it was re- zoned. Chair O’Neill closed public comments. There was no further action taken on this item. B. TOT, CHARTER TAX AND OTHER AUDITS UPDATE Summary: Staff will update the Committee on the TOT, charter tax and other audits performed to date. Recommended Action: Receive and file. Finance Committee Meeting Minutes October 10, 2019 Page 3 of 9 Finance Director/Treasurer Dan Matusiewicz introduced the item. Revenue Auditor Antonio Velasco reported that he was tasked with overseeing the Transient Occupancy Tax (TOT) and the Charter Passenger Tax audits. He advised the City has contracted with three (3) audit firms: Hinderliter, de Llamas & Associates; Davis Farr, LLP; and Gruber and Associates, to conduct several tax compliance audits of hotels and charter boats. He reported that many hotels have been audited in the past. Moving forward, the audits will be completed on two (2) or three (3) year cycles based on audit findings. He reported audit cycles could evolve depending on a change of ownership or a franchise brand change. He also reported short-term lodging agent’s audit cycles would be determined based on any major violations of the City’s code. Revenue Auditor Velasco reported short-term lodging owners/operators have not undergone an audit. He informed the Committee that one (1) owner/operator would be selected per month for an audit to ensure compliance. Revenue Auditor Velasco reported that the Charter companies would be on a two (2) to three (3) year cycle depending on the findings. He stated that a few companies are out of compliance. Staff is currently working with the Harbor Department to bring those companies into compliance. After the initial audits are complete, it is anticipated that additional audits will ensue on a continuous basis with audits of different hotel and charter companies each year. In response to Chair O’Neill, Finance Director/Treasurer Matusiewicz expects that the TOT and Charter Passenger Tax audits to be completed soon. Chair O’Neill requested a report of the offenders and an accounting of the loss. Finance Director/Treasurer Matusiewicz stated that the City Attorney had opined the results would be exempt from disclosure under the California Public Records Act. Chair O’Neill suggested the public record should include any deficiencies in record-keeping. Finance Director/Treasurer Matusiewicz stated that the City Attorney had opined fines and penalties are exempt from disclosure under the California Public Records Act. Deputy Director/Finance Steve Montano stated the above-referenced records could become publicly available through an offending-firm’s appeal of audit findings. City Manager Grace Leung expressed concern with revealing too much company detail by making the details public. While Committee Member Collopy understands the need to protect a company’s competitive edge, he would like additional clarification on why making the data a public record is of concern. Committee Member Collopy expressed concern that the City’s Charter Passenger Tax is only $1.00 compared to other cities whose tax is $8.00. He also expressed concern that the City’s TOT tax is only 10 percent compared to other cities, suc h as Santa Monica, whose TOT tax is 14 percent. Mayor Dixon expressed her appreciation in receiving the audit information, but would like to know the next steps for the City. Finance Director/Treasurer Matusiewicz advised once the audits are finalized, the City would assess and collect penalties, and attempt to hold each non- compliant firm accountable. In response to Mayor Dixon’s inquiry, Revenue Auditor Antonio Velasco advised there is a 10 percent penalty for the first late month, and accrues 1.5 percent interest for each late month thereafter. He also advised that the firms are made aware they have been audited. Finance Committee Meeting Minutes October 10, 2019 Page 4 of 9 In response to Committee Member Tucker’s inquiry, Revenue Auditor Antonio Velasco advised if the penalty is over a certain percentage, both on Charter Passenger Tax and TOT audits, the firm will need to reimburse the City for the audit fee. Chair O’Neill requested staff notify the Finance Committee of audit completion and the City Attorney’s opinion on audit public records. He requested if the information needs to be provided in the aggregate, and then staff should include the number of firms that fall below the standard, the amounts recovered, the number of fines, and the size of the discrepancy. He stated this information is very important to the Title 17 Municipal Code work currently underway. He stated an example of a firm losing its Marine Activity Permit as part of an unfavorable audit. Mayor Dixon expressed concern over some of the hotel and short-term lodging audit findings. Finance Director/Treasurer Matusiewicz advised that the major hotel audits were much cleaner. Revenue Auditor Velasco clarified that it may be due to a change in ownership or simple recordkeeping errors that affect the results. In response to Mayor Dixon’s inquiry, Finance Director/Treasurer Matusiewicz stated the audits will be concluding in November and a series of recommendations will be developed. Revenue Auditor Velasco added that because of the audits, firms now have a direct City connection to address any tax compliance issues. In response to Committee Member Collopy’s inquiry, Finance Director/Treasurer Matusiewicz advised the audit process is more robust due to the direction of City Manager Leung. City Manager Leung explained that there are several nuances to tax reporting and it is easy for hotels to make errors due to changes in ownership or accounting staff. She stated that regular auditing could help educate them. In response to Mayor Dixon’s inquiry, City Manager Leung advised there would be recommendations based on the findings and staff will work with the City Attorney to determine what level of information can be disseminated. In response to Committee Member Stapleton’s inquiry, Finance Director/Treasurer Matusiewicz stated the that Charter Passenger Tax revenue is approximately $2 million, but noted that he did not have the numbers available at today’s meeting. Chair O’Neill opened public comments. Jim Mosher noted that the staff report indicates two (2) Charter companies are operating without reporting their Charter Passenger Tax. There are also multiple instances of non-reporting Charter companies. Chair O’Neill reads the report in the same fashion and stated that it is important to keep the findings in context. Chair O’Neill closed public comments. Chair O’Neill noted that it is important to continue to work with the City Attorney’s Office to develop a process to build the proper tax reporting requirements and, if a discrepancy is made, perhaps suspend the firm's Marine Activity Permit. In addition, he indicated that it needs to be addressed with the current Title 17 work. There was no further action taken on this item. C. PENSION BASICS PRIMER Summary: The Committee will acknowledge Committee Member Tucker's pension basics primer to orient new members of the Finance Committee. Finance Committee Meeting Minutes October 10, 2019 Page 5 of 9 Recommended Action: Receive and file. Chair O’Neill introduced the item and noted it was placed on the agenda to recognize the work of Committee Member Tucker. He noted the primer is a summary of the Pension basics for any new Finance Committee member and would like to see it incorporated with the City’s Primer. Committee Member Tucker requested that any revisions or comments to the Primer be forwarded to him for review. He also noted that it is a work in progress. Chair O’Neill opened public comments. Noting there were no other members of the public who elected to speak, Chair O’Neill closed public comments. In response to Mayor Dixon’s inquiry, Chair O’Neill advised agenda items regarding a Section 115 trust will not be placed before the Finance Committee anytime soon. Chair O’Neill opened public comments. Jim Mosher noted there is a new valuation available from CalPERS on the City website and stated the unfunded liability was higher than it was in the last valuation. This is despite the City’s efforts to pay it down. He noted normal costs were higher than the valuations and requested clarification. Committee Member Tucker responded to Mr. Mosher and advised the primer was simply a starting point. In response to Mayor Dixon’s inquiry, Chair O’Neill advised the document will need to have the numbers updated, and will serve as a good start for a new member of the Finance Committee. Committee Member John Reed advised as a new member of the Finance Committee, he found the document very helpful and provided feedback to Committee Member Tucker. City Manager Leung noted it should be staff’s responsibility to provide the orientation to any new Finance Committee member and they should be responsible for updating the document. Chair O’Neill closed public comments. There was no further action taken on this item. Having found the historical information, Deputy Director/Finance Steve Montano advised that the annual Charter Passenger Tax Revenue is approximately $300,000, as referenced in the discussion of Item 5B. D. ECONOMIC CONTRIBUTION OF NEWPORT BEACH TO THE ORANGE COUNTY ECONOMY Summary: Beacon Economics identifies the role that the City of Newport Beach plays in Orange County’s economy. Recommended action: Receive and file. Chair O’Neill introduced the item and noted that he agendized the item for public review. Mayor Dixon advised the Economic Impact Report was completed due to the recent engagement with the Board of Supervisors regarding the John Wayne Airport. She advised Finance Committee Meeting Minutes October 10, 2019 Page 6 of 9 that the City of Newport Beach contributes tremendously to the funding of the County discretionary account that benefits Orange County; she continued, that this economic activity should be recognized. Chair O’Neill opened public comment. Jim Mosher referenced Page 8 of the Economic Impact Report and noted that the chart was referencing “average wage by industry” in Newport Beach, and he indicated some omissions. Finally, he requested clarification regarding whether or not service workers, who service the City, were included in the report. Deputy Director/Finance Steve Montano stated he would seek clarification on the item. Chair O’Neill closed public comment. There was no further action taken on this item. E. BUDGET AMENDMENTS FOR QUARTER ENDING JUNE 30, 2019 AND SEPTEMBER 30, 2019 Summary: Staff will report on budget amendments for the prior quarters. Recommended Action: Receive and file. Chair O’Neill opened public comment. Noting there were no members of the public who elected to speak, Chair O’Neill closed public comments. There was no further action taken on this item. F. DISCUSS WHICH COUNCIL POLICIES THE FINANCE COMMITTEE MAY BE INTERESTED IN REVIEWING DURING FY 2019-20 Summary: Staff and Finance Committee should discuss which financial policies may warrant a review and update at subsequent Finance Committee meetings. Examples include a compulsory review of investment policy (F-1), changes to the Reserve Policy (F-2) that may be necessitated by the newly proposed by the Water rate structure or other policies that Finance Committee members may be interested in. Recommended Action: Direct staff to bring recommended updates to financial policies if necessary. Chair O’Neill introduced the item. Committee Member Collopy requested a review of Reserve Policy (F-2). Finance Director/Treasurer Matusiewicz reported the Investment Policy (F-1) would need to be reviewed by the Finance Committee and then reviewed by City Council only if changes are made. Mayor Dixon requested a review of the Vehicle Policy In response to Committee Member Collopy’s inquiry, Finance Director/Treasurer Matusiewicz reported that the General Fund Reserve amount is set by City Council policy. Chair O’Neill clarified that the policy needs to be waived a few times because of the increased pension payments. In response to Committee Member Brenner’s inquiry, Chair O’Neill clarified additional reporting for the F-7 policy is a function of the Finance Committee but would like it to stay “as-is” for now. Chair O’Neill opened public comment. Finance Committee Meeting Minutes October 10, 2019 Page 7 of 9 Jim Mosher requested the Finance Committee review the (F-8) Travel Policy, specifically the disclosure of travel reimbursement for elected staff, required by state law. He stated it would be useful for the Finance Committee to review the City’s Administrative Policies such as the bidding process. Lastly, he reported it would be useful for the Finance Committee to review the Finance Department’s website to ensure the information is being disseminated properly to the public. Chair O’Neil closed public comment. There was no further action taken on this item. G. INTERNAL AUDIT PROGRAM Summary: In the spirit of continuous improvement, the City of Newport Beach Finance Department recently selected the audit firm Moss Adams LLP (Moss Adams) to assess internal control risks, conduct performance audits and management consulting services where appropriate. Recommended Action: Receive and file. Finance Director/Treasurer Matusiewicz thanked City Manager Leung for providing additional resources for an internal auditing program. He advised the Finance Department recently selected the audit firm Moss Adams LLP (Moss Adams) to commence the development of a robust internal audit program. This process will start with an audit of the enterprise risk and internal controls. Committee Member Tucker expressed support for developing an internal auditing program. Referring to a previous case of fraud at the City of Newport Beach, Finance Director/Treasurer Matusiewicz described the loss exposure to the City was based on the purchase of non-existent right-of-ways was due to poor internal auditing controls over 10 years. The former employee was incarcerated and forfeited their City pension as a result. He noted that the City was able to recuperate 1.7 million in restitution from the former employee. Committee Member Tucker expressed his support for robust internal control reviews. Chair O’Neill opened public comments. Jim Mosher expressed his support for the internal audit program and requested clarification on which line item of the budget would provide funding for this new program. Finance Director/Treasurer Matusiewicz responded that funding was appropriated from the previous year’s budget from within Finance Administration, Professional Technical Services. Chair O’Neil closed the public comments. There was no further action taken on this item. H. REVIEW AND DISCUSS 2019-20 FINANCE COMMITTEE WORKPLAN Summary: Staff and Finance Committee should review the proposed work plan and adjust as necessary. Recommended Action: Review and Comment. Chair O’Neill introduced the item. He stated that two (2) important functions of the Finance Committee are to provide advice to City Council regarding the budget and budget monitoring policies. Finance Committee Meeting Minutes October 10, 2019 Page 8 of 9 Committee Member Collopy noted that the Finance Committee spends many hours on the subjects of Unfunded Pension Liability and Budget. He suggested that the City Council to attend a meeting to see the work of the Finance Committee. Chair O’Neill clarified that City Council can attend but they may not speak due to limitations established by the Brown Act. Mayor Dixon expressed her support of having City Council members attend the Finance Committee meetings and suggested the March, April and May meetings would be appropriate. Committee Member Collopy suggested a deep-dive be completed on a few departmental budgets. Chair O’Neill suggested a review of the Public Works budget. Committee Member Collopy would like to see a deep-dive review of the Fire Department budget. Mayor Dixon noted a review of Public Safety functions needed to be conducted annually due to their larger impact on the City’s budget. She also suggested the review of all specialty funds. Chair O’Neill clarified that the Police and Public Works Departments will receive the deep-dive review. In response to Council Member Brenner’s inquiry, Finance Director/Treasurer Matusiewicz advised that the Beacon Economics Report be scheduled for January 14, 2020. Chair O’Neill requested to see more Newport Beach related numbers instead of national numbers. In response to Council Member Brenner’s inquiry, Chair O’Neill advised that the City is paying Beacon Economics for estimates of revenue assumptions and they provide an oral report of the findings to City Council. In response to Finance Director/Treasurer Matusiewicz’s inquiry, Chair O’Neill suggested he work with City Council to address some of the questions that came from the Aviation Report. In response to Committee Member Stapleton’s inquiry, Finance Director/Treasurer Matusiewicz advised that Jayson Schmitt of Chandler Asset Management would be at the next meeting to discuss economic conditions. City Manager Leung noted that half of the General Fund is based on property taxes. Property taxes tend to be more stable. In response to Mayor Dixon’s inquiry, Finance Director/Treasurer Matusiewicz advised that countywide sales tax allocations may be changed by pending legislation. Committee Member Tucker suggested that the Finance Committee review possible “reduction in cost” scenarios in the event of a recession. Finance Director/Treasurer Matusiewicz stated that the City follows best practices from the Government Finance Officers Association (GFOA). GFOA supports multiple escape plans. Deputy Director/Finance Steve Montano clarified that items such as Memorandum of Understanding (MOUs) cannot change but other items could be immediately changed. In response to Mayor Dixon’s inquiry, City Manager Leung advised the Independent Contractor Law (AB 5) may have a significant impact on the City’s employment prospects, but requires further analysis. Chair O’Neill opened public comment. Noting that there were no members of the public who elected to speak, Chair O’Neill closed public comments. Chair O’Neill opened public comments on non-agenda items. Jim Mosher suggested the entire City align on the same water rate billing cycle. He suggested establishing a method for calculating the total gallons of water used divided by the number of users. Then the City can bill the users for the fixed amount needed for the infrastructure. He stated this would encourage water conservation. Chair O’Neill closed public comments on non-agenda items. Finance Committee Meeting Minutes October 10, 2019 Page 9 of 9 VI. FINANCE COMMITTEE ANNOUNCEMENTS ON MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON-DISCUSSION ITEM) Council Member Tucker requested an item be placed on a future agenda to review Development Agreement Fees requirements and how they affect the City. Mayor Dixon noted that California Governor Gavin Newsom signed SB 330, the Housing Crisis Act of 2019, into law, which prohibits the City from assessing impact fees on any of the new housing covered under the bill. Committee Member Collopy requested that Visit Newport should be reviewed. VII. ADJOURNMENT The Finance Committee adjourned at 4:34 p.m. to the next regular meeting of the Finance Committee. Filed with these minutes are copies of all materials distributed at the meeting. The agenda for the Regular Meeting was posted on October 4, 2019, at 5:00 p.m., in the binder and on the City Hall Electronic Board located in the entrance of the Council Chambers at 100 Civic Center Drive. Attest: ___________________________________ _____________________ Will O’Neill, Chair Date Finance Committee November 14, 2019, Finance Committee Agenda Comments These comments on an item on the Newport Beach Finance Committee agenda are submitted by: Jim Mosher ( jimmosher@yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229) Item IV.A. MINUTES OF OCTOBER 10, 2019 I respectfully request changes to the draft minutes passages shown in italics as suggested in strikeout underline format. Page 4, Item IV.A, paragraph 1: “Chair O’Neill opened public comments. Noting there were no other members of the public who elected to speak, Chair O’Neill closed public comments.” Page 4, paragraph 10: “Jim Mosher noted that while the staff report indicates two (2) Charter companies are operating without reporting their Charter Passenger Tax, it also says there . There are also multiple other instances of nonreporting non-reporting Charter companies. Chair O’Neill reads the report in the same fashion and stated that it is important to keep the findings in context.” [Note: the staff report passage I was reading says “It was discovered that two additional charter companies have been operating without reporting Charter Tax. In addition, with the help of the Harbor Department, multiple discoveries of non-reporting Charter companies are being made.” And I may be inarticulate, but I’m sure I said a simple “two” and not “two (2).” I don’t speak in numbers followed by parenthesis. Nor do I write that way.] Page 7, first paragraph: “Jim Mosher requested the Finance Committee review the (F-8) Travel Policy, specifically the disclosure of travel reimbursement for elected staff officials, required by state law.” Page 8, paragraph 2 from the end: “Jim Mosher suggested the entire City align on the same water rate billing cycle. He suggested establishing a method for calculating the total gallons of water used divided by the number of users. Then the City can bill the users each user for the fixed amount needed for the infrastructure based on their fraction of the total gallons used in that cycle. He stated this would encourage water conservation.” [Note: I have since been told that this suggestion to transform the collection of the water supply fixed costs into a commodity charge at a per gallon rate not known until the time of billing is likely inconsistent with most interpretations of Proposition 218. However, it does encourage conservation better than what we have now, since a user’s bill goes to zero if they use zero. And it minimizes financial risk more effectively than what we have now, by ensuring the full fixed costs predicted at the time of the Prop. 218 notice will be fully collected in each billing cycle regardless of the system’s overall use, and the fixed costs will be paid by those who are using.] CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5A November 14, 2019 TO: HONORABLE CHAIR AND MEMBERS OF THE COMMITTEE FROM: Finance Department Dan Matusiewicz, Finance Director 949-644-3123 or danm@newportbeachca.gov SUBJECT: PRELIMINARY PENSION FUNDING RECOMMENDATION – FISCAL YEAR 2020-21 SUMMARY: Each year, staff analyzes the most recent California Public Employees’ Retirement System (CalPERS) pension actuarial valuations and evaluates opportunities to more efficiently amortize the City’s unfunded accrued liability (UAL) compared to the default minimum contribution schedules proposed by CalPERS. Staff has evaluated the merits of pursuing the default payment option, three additional direct payment options to CalPERS. Staff recommends a prefunding option that assumes five years of $5 million of additional discretionary payments above the current $35 million self-imposed threshold, followed by $2 million additional for the remaining 15-year term. This provides a $77 million buffer against future investment losses. See the proposed payment option comparisons in Attachments A-1 and A-2 RECOMMENDED ACTION: Provide feedback regarding staff recommendations. DISCUSSION: PENSION PLAN HEALTH STATUS The City’s pension obligations are and will continue to be one of the City’s largest financial concerns for decades to come so it is important that it receives appropriate and regular attention. With its current participants and benefit levels, the City’s accrued pension liability (AL) now exceeds $1 billion dollars and has been growing at an annual rate of 6.6% for the last eleven years. Meanwhile, General Fund revenue has only grown 3.4% annually for the same eleven-year period (2007-2018). The City’s AL now represents 467% of annual General Fund revenues as compared to the County wide average of Preliminary Pension Funding Recommendation – Fiscal Year 2020-21 November 14, 2019 Page 2 about 515% as of June 30, 2018. This gap will likely continue to widen over the next two decades. As these growing leverage ratios continue to expand, investment losses can have devastating impacts on local agency budgets. The City’s current Unfunded Accrued Pension Liability (UAL) grew by $13.5 million or 4.2% to $333 million as of June 30, 2018. This number is significant but is largely what staff expected and is already factored into the current budget and long-range pension funding plan. Plan assets and liabilities are displayed in the table below. 3 YEAR UAL TREND Staff estimated the liability would grow to $325 million due to a .25% reduction in the discount rate which is now at 7%. The $8 million difference between estimated UAL and actual UAL at June 30, 2018 is due to other changes in actuarial methods and demographic experience that staff had not anticipated. Some good news is that as the UAL is rolled forward from June 30, 2018 to June 30, 2020 for the development of the minimum required contribution for FY 2020-21, the City’s UAL drops back down to $318 million reflecting the additional discretionary payments (ADP) paid during FY 2018-19. Prior to the end of the current fiscal year, we anticipate the UAL will continue to drift downward to $311 million to reflect ADPs being paid in FY 2019-20 that are not included in the 2018 actuarial valuation yet. In relation to the other CalPERS agencies in Orange County: • The City’s 2018 UAL of $333 million grew by the lowest rate in the County (4%) as compared to the County average of 10%. • The City is only one of two local agencies in the County where the funded status actually increased from 2017 to 2018. This means that the City’s assets grew at a faster rate than the accrued pension liability. • The City is only one of four cities in the County whose UAL is projected to decrease through 2020. • The City developed the most efficient payment plan in the County. Where most agencies’ interest payments represent 46% of total planned payments, the City’s interest payments are down to 38% of total scheduled payments. The Comparison of Pension Progress Table is included as Attachment A. The City’s funded status is still improving, despite the scheduled .25% reduction in the discount rate. The overall plan funded status of 67% is still relatively low but is forecasted to improve dramatically over the next decade barring adverse investment results or further changes in actuarial assumptions. The City Council has been proactive and aggressive 2016 2018 Total Total Total Dollars Percent Accrued Liability (AL)887,481,877 939,503,861 1,006,978,316 67,474,455 7.2% Less: Market Value of Assets (MVA)566,016,065 619,834,899 673,843,069 54,008,170 8.7% Unfunded Accrued Liability (UAL) 321,465,812 319,668,962 333,135,247 13,466,285 4.2% Funded Status 63.8%66.0%66.9% Change2017 Preliminary Pension Funding Recommendation – Fiscal Year 2020-21 November 14, 2019 Page 3 in addressing the ongoing pension crisis. By proactively managing the repayment of the unfunded pension liability and influencing CalPERS policies, the City is well positioned to weather the pension challenges known today. The most recent actuarial report presents the results of the June 30, 2018, CalPERS valuation of both the Miscellaneous and the Public Safety Plans for the City of Newport Beach and sets the required contribution amounts and rates for FY 2019-20. After adding in ADPs and deducting negotiated employee contributions, FY 2020-21 pension costs are estimated as follows: The current strategy is to make level dollar payments of $35 million a year towards the $311 projected UAL until it is paid off in fourteen years. WHAT SHOULD WE EXPECT IN THE 2019 ACTUARIAL VALUATION? In the 2019 actuarial valuation we should expect continued improvement in the funded status and nothing dramatically adverse that might necessitate a change in our strategy or required payment. The Public Employers Retirement Fund (PERF) earned 6.7%, an experience loss of .3% or $2.2 million for the City. However, the price inflation assumption of 2.5% is higher than the actual inflation rate of 1.65% - a favorable liability experience gain of .85%. While we are reluctant to estimate a value of this gain, it is likely the two experiences will offset each other barring other unfavorable changes in demographic experiences. Staff does not recommend a strategy adjustment as a result of FY 2018-19 experience at this time. CAPITAL MARKET ASSUMPTIONS DO NOT BODE WELL IN THE NEAR-TERM While economist are not predicting a recession in the next year, favorable investment results do not appear likely in the near term. At this year’s Economic Forum, UCI’s Preliminary Pension Funding Recommendation – Fiscal Year 2020-21 November 14, 2019 Page 4 Associate Professor of Finance, Dr. Christopher Schwarz summed up his remarks this way: • Expect slower [GDP] growth in 2020 and beyond (1.5% is the new normal) • The Federal Reserve will be the economy’s friend (implying lower interest rates) • Asset prices are high = correlated low returns going forward Consistent with his remarks and as illustrated in the chart below, only one asset class (Private Equity) is predicted to exceed the target investment return of 7%. With CalPERS’ target asset allocation of 50% to Global Equity, 28% to Fixed Income, 13% to Real Assets, 8% to Private Equity and 1% to Liquidity, it is hard to imagine a path forward that would produce an investment return that meets the 7% target return. Expected CalPERS Investment Return by Asset Class Persistent returns below 7% will require the City to consider additional capital infusions if the City is to meet its goal of paying down the UAL in 14 years. PREPARING FOR VOLATILE MARKETS AND SLOW GROWTH Since nearly 60% of the pension benefits are provided by investment results, City pension plans are extremely sensitive to investment earnings. With over $700 million in plan assets, a 1% investment experience loss equates to approximately $7 million loss for the City. Due to these low capital market assumptions (CMA’s) and CalPERS’ current asset allocation, 68% of all investment results can vary 11.51% from the mean expected return of 7% in any one year resulting in an experience loss of approximately $83 million. In a more extreme year, one can expect 95% of investment results to vary as much as 23% (a $165 million loss) for the City’s pension plans. Preliminary Pension Funding Recommendation – Fiscal Year 2020-21 November 14, 2019 Page 5 While expected year-to-year volatility can be rather frightening, good and bad years are expected to even out over time. CalPERS Chief Investment Officer, Dr. Ben Meng encourages employers to “Stay calm and carry on.” While this is sound advice, I believe it is also prudent to take measured steps to prepare for lower than expected returns and insulate the City’s budget where possible. The chart below illustrates the PERF portfolio’s expected risk reward assumptions over the near and long-term. Good and bad years are averaged out for a net positive return of 5.86% in the near/intermediate term and improve to 7.23% over a 30-year horizon. However, 5.86% is still well short of the expected return of 7%. While CalPERS is a long- term investor with a very long investment horizon, 5-10 years is a long time with respect to municipal budgeting. With the prospect of adding to the 2008 losses, that most local agencies are still struggling to pay off, it is likely that pension costs will continue to have adverse effects on local agency budgets for decades to come. CalPERS Expected Risk and Return Estimates Source: Wilshire Consulting While the chart above suggests an expected return of 5.86% for ten years, market projections beyond 5 years may likely rely on more art than science. However, the City should consider the impact that a low market growth investment environment would have on the City budget. With the assistance of a CalPERS actuary, staff stress-tested our plans illustrating the impact of various geometric returns including 4%, 5%, 6.1%, 7% and 8% for a ten-year period of time and then assumed 7% for 5 years thereafter. We used 6.1% as our baseline projection because it was the last official CalPERS projection that resulted from their 2017 Capital Market study. Preliminary Pension Funding Recommendation – Fiscal Year 2020-21 November 14, 2019 Page 6 The good news is that in all scenarios, the funded status of the plans improved even when investment returns below the 7% target are assumed. The bad news is that after 15 years, the UAL accumulates to sizable balances that are likely unacceptable to the community. The chart below illustrates the trajectory of the plan funded status at the 10 and 15 year milestones. The reason the funding status is improving relatively sharply even in the low investment return scenarios is that the 2013 Fresh Start base starts to rapidly pull down principal as this base matures off our UAL amortization schedule. The next question is how should the City best insulate itself from expected investment returns below the target rate of 7% or whether it should take no action at all and pay-as-you-go as losses occur. Because of the high cost of waiting due to interest accruing at 7%, staff recommends the City start prefunding expected losses based on the answer to four variables: 1. What rate of average shortfall should the City prepare for (e.g., 1, 2 or 3%)? 2. How long will the shortfall persist (e.g., 1-10 years)? 3. Over what period of time would the City like to prefund expected losses (10, 15 or 20 Years)? 4. How much is the City willing to contribute above the current contribution level? To help facilitate a response to these questions, staff prepared a table included as Attachment B that provides decision makers some guidance as to the scale of the loss Projected UAL Balance in 2033 Preliminary Pension Funding Recommendation – Fiscal Year 2020-21 November 14, 2019 Page 7 and the annual prefunding amounts that would be necessary if the City chooses to get ahead of expected losses. The excerpt of Attachment B below helps decision makers understand the magnitude of persistent investment shortfalls and amounts needed to prefund potential shortfalls over various time horizons. As an example, if the PERF on average falls short of their target by 1% for five years, the cumulative loss with interest accruing at 7% amounts to $46 million. This anticipated loss can be prefunded by 10 annual payments of $3.5 million assuming the PERF earns 6%. Similarly if the 1% average shortfall persists for 10 years, the cumulative loss plus interest accumulates to $126 million at 7%. This loss can be prefunded by 10 annual payments of $9.6 million and so forth. FUNDING OPTIONS Staff further prepared amortization schedules with and without the optional prefunding of expected investment losses. Amortization schedules without prefunding expected investment losses can be found in Attachment C. Standard Funding Options (SFO) SFO 1 - Assumes the default repayment schedule with no further ADPs. SFO 2 - Assumes ADPs that bring the UAL payment up to but not exceed $35 million. SFO 3 - Assumes the City will be amenable to a one-time contribution of $5 million over the $35 million threshold in FY 2020-21. As a source of proceeds, staff proposes using 50% of FY 2018-19 annual surplus as was contemplated by Council Policy F-5, General Fund Surplus Utilization. Anticipatory Prefunding Options to Mitigate Persistent Investment Shortfalls “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” Wayne Gretzky Staff also prepared three additional amortization schedules assuming some level of prefunding of future expected investment experience losses. While the anticipated losses Preliminary Pension Funding Recommendation – Fiscal Year 2020-21 November 14, 2019 Page 8 are not built into the UAL balance Anticipatory prefunding can help the City in two ways. It could act as buffer against adverse investment results especially if they are persistent. It could also act as a baby step toward realigning our budget toward further reductions to the assumed discount rate which I believe to be inevitable. Based on my discussions with CalPERS leadership over the years, I know it is their strong preference to lower the discount rate which paves the way to reduce volatility risk in the investment portfolio. Their dilemma is that many local agencies are still struggling to pay off the 2008 investment losses. These losses are still escalating pension costs for many local agency budgets through 2025 that have not taken aggressive actions as this Council has. Below you will find three options that could help the City insulate itself against persistent investment earnings shortfalls, a catastrophic investment loss or that baby step toward lower discount rates expected in the future. APO 1 - Assumes discretionary prefunding of an additional $2 million per year above the $35 million threshold. This would provide for five years of 1% investment shortfalls repaid over 15 years or until the UAL is paid off. This option provide a $46 million buffer against future losses. APO 2 - Assumes five years of $5 million of additional discretionary payments above the $35 million threshold, followed by $2 million additional for the remaining term. This provides a $77 million buffer against future investment losses. APO 3 - Option 3 is the most aggressive and assumes $5 million of additional discretionary payments above the $35 million threshold until the UAL is paid off (over the next 15 years). This provides for a $116 million buffer against future persistent or catastrophic investment losses. Preliminary Pension Funding Recommendation – Fiscal Year 2020-21 November 14, 2019 Page 9 Below is a sample illustration how prefunding dollars could accumulate and compound over time: Preliminary Pension Funding Recommendation – Fiscal Year 2020-21 November 14, 2019 Page 10 STAFF RECOMMENDATION: Due to the leverage risk associated with the accrued liability dwarfing annual General Fund revenues by nearly 500% and the dismal CMA outlook in the near term, staff recommends Prefunding Option 2. Staff proposes to monitor the results of the next CMA study due to start in June of 2020 and revaluate progress and options each year. The City has routinely produced significant annual surpluses. However, if resources are not available, the City is not obligated in any way to continue prefunding but staff would also recommend the Council consider drawing down the contingency reserve as necessary to continue to the prefunding effort. If investment shortfalls do evolve as forecasted the City will be better prepared for future pension cost increases. If investment shortfalls do not come to pass, the pension plan will simply become better funded sooner rather than later and save millions in interest in the process. If the discount rate is lowered in the future, which is a distinct possibility, the City will be better prepared to absorb those costs. The downside is that further pension contributions could further constrain the City’s ability to undertake community projects or programs. Prepared and Submitted by: /s/ Dan Matusiewicz Dan Matusiewicz Finance Director Attachments: Attachment A: Comparison of Pension Funding Progress Table Attachment A-1: Standard Funding Options Summary Attachment A-2: Anticipatory Prefunding Options Summary Attachment B: Investment Loss Prefunding Table Attachment C: 2020-21 Standard Funding Options 1-3 Attachment D: Anticipatory Prefunding Options 1-3 ATTACHMENT A COMPARISON OF PENSION FUNDING PROGRESS TABLE Agency UAL FS AL MVA UAL FS UAL Total Pmts Interest as % of Total Pmts Pmt Efficiency AL GF Rev Total Increase % Change City of Anaheim Total 741,068,980 70.8%2,715,845,662 1,898,638,863 817,206,799 69.9%833,036,314 1,542,601,086 46%185%5.8%2.9%76,137,819 10% City of Brea Total 121,252,581 68.5%415,311,268 278,113,460 137,197,808 67.0%140,810,148 271,703,204 48%193%6.4%1.6%15,945,227 13% City of Buena Park Total 39,221,940 71.1%145,043,589 101,163,530 43,880,059 69.7%44,659,783 81,487,121 45%182%5.6%1.4%4,658,119 12% City of Costa Mesa Total 212,923,672 62.1%598,694,764 368,109,393 230,585,371 61.5%234,013,094 449,689,723 48%192%6.4%1.6%17,661,699 8% City of Cypress* Total 18,663,147 76.1%83,901,710 62,275,214 21,626,496 74.2%22,166,992 41,210,977 46%186%6.2%0.0%2,963,349 16% City of Fullerton Total 234,893,103 69.1%804,066,374 547,784,717 256,281,657 68.1%263,656,687 511,514,778 48%194%5.3%2.7%21,388,554 9% City of Garden Grove Total 268,412,094 66.9%872,909,063 573,678,566 299,230,497 65.7%305,876,304 589,968,753 48%193%6.3%3.2%30,818,403 11% City of Huntington Beach Total 403,394,647 68.2%1,350,128,586 913,955,432 436,173,154 67.7%443,118,659 834,903,132 47%188%6.1%0.7%32,778,507 8% City of Irvine Total 154,634,662 76.1%713,566,211 546,278,834 167,287,377 76.6%150,127,167 261,916,655 43%174%9.5%0.3%12,652,715 8% City of La Habra Total 26,498,700 75.9%118,389,059 88,810,023 29,579,036 75.0%30,486,598 56,219,402 46%184%6.8%2.0%3,080,336 12% City of Laguna Beach Total 27,243,435 75.3%119,568,104 89,685,511 29,882,593 75.0%29,748,805 52,202,974 43%175%8.4%3.3%2,639,158 10% City of Mission Viejo Total 19,596,811 76.3%90,898,921 68,702,880 22,196,041 75.6%22,444,284 38,486,689 42%171%10.8%0.8%2,599,230 13% City of Newport Beach Total 319,668,962 66.0%1,006,978,316 673,843,069 333,135,247 66.9%318,291,681 514,736,400 38%162%6.6%3.4%13,466,285 4% City of Orange Total 256,020,262 69.9%908,632,171 628,054,657 280,577,514 69.1%287,538,115 550,128,578 48%191%5.9%1.8%24,557,252 10% City of Santa Ana Total 613,781,439 68.6%2,079,148,456 1,398,052,116 681,096,340 67.2%695,805,669 1,316,070,957 47%189%5.6%1.2%67,314,901 11% City of Tustin Total 26,806,151 76.2%121,641,805 91,823,298 29,818,507 75.5%29,293,129 53,812,744 46%184%7.8%22.8%3,012,356 11% City of Westminster Total 39,342,203 69.2%136,149,175 92,765,036 43,384,139 68.1%44,136,236 81,752,230 46%185%6.2%3.1%4,041,936 10% City of Yorba Linda Total 21,183,584 69.7%75,618,252 52,390,304 23,227,948 69.3%23,369,131 44,171,593 47%189%6.9%1.5%2,044,364 10% Irvine Ranch Water District Total 62,900,429 75.8%283,187,278 211,486,895 71,700,383 74.7%72,558,982 123,033,441 41%170%8.9%6.3%8,799,954 14% Santa Margarita Water District Total 29,770,735 68.5%103,849,532 70,159,847 33,689,685 67.6%34,337,181 63,789,095 46%186%9.8%4.3%3,918,950 13% Grand Total 3,637,277,537 69.4%12,743,528,296 8,755,771,645 3,987,756,651 68.7%4,025,474,959 7,479,399,532 46%186%6.3%2.6%350,479,114 10% Change in UAL 2017 to 20182020 Rollforward Annualized growth 2007 -2018 2017 Valuation 2018 Valuation ATTACHMENT A COMPARISON OF PENSION FUNDING PROGRESS TABLE ATTACHMENT A-1 STANDARD FUNDING OPTIONS SUMMARY SFO 1 SFO 2 SFO 3 Year Val Year Pmt Yr Default Current $5 Mill One-tIme Surplus 1 2018 2021 29,190,322$ 35,000,000$ 40,000,000$ 2 2019 2022 29,993,056$ 35,000,000$ 35,000,000$ 3 2020 2023 30,817,865$ 35,000,000$ 35,000,000$ 4 2021 2024 31,665,356$ 35,000,000$ 35,000,000$ 5 2022 2025 32,536,153$ 35,000,000$ 35,000,000$ 6 2023 2026 33,430,898$ 35,000,000$ 35,000,000$ 7 2024 2027 34,350,247$ 35,000,000$ 35,000,000$ 8 2025 2028 35,294,879$ 35,000,000$ 35,000,000$ 9 2026 2029 36,265,488$ 35,000,000$ 35,000,000$ 10 2027 2030 37,262,789$ 35,000,000$ 35,000,000$ 11 2028 2031 38,287,516$ 35,000,000$ 35,000,000$ 12 2029 2032 39,340,423$ 35,000,000$ 35,000,000$ 13 2030 2033 40,422,284$ 35,000,000$ 35,000,000$ 14 2031 2034 41,533,897$ 20,194,897$ 8,145,672$ 15 2032 2035 1,493,823$ -$ -$ 16 2033 2036 1,534,903$ -$ -$ 17 2034 2037 1,577,113$ -$ -$ 18 2035 2038 1,620,484$ -$ -$ 19 2036 2039 1,665,047$ -$ -$ 20 2037 2040 1,710,836$ -$ -$ Totals 499,993,381$ 475,194,897$ 468,145,672$ Savings over default 24,798,485$ 31,847,710$ NPV@3%408,169,030$ 397,141,882$ 393,936,946$ Efficiency 161%153%151% Interest % of Total 38%35%34% STANDARD FUNDING OPTIONS (SFO) ATTACHMENT A-1 STANDARD FUNDING OPTIONS SUMMARY ATTACHMENT A-2 ANTICIPATORY PREFUNDING OPTIONS SUMMARY APO 1 APO 2 APO 3 Year Val Year Pmt Yr $2 Mill Extra/Yr $5 Mill for 5 Yrs, $2 Mill Extra Thereafter $5 Mill Extra/Yr Ongoing 1 2018 2021 37,000,000$ 40,000,000$ 40,000,000$ 2 2019 2022 37,000,000$ 40,000,000$ 40,000,000$ 3 2020 2023 37,000,000$ 40,000,000$ 40,000,000$ 4 2021 2024 37,000,000$ 40,000,000$ 40,000,000$ 5 2022 2025 37,000,000$ 40,000,000$ 40,000,000$ 6 2023 2026 37,000,000$ 37,000,000$ 40,000,000$ 7 2024 2027 37,000,000$ 37,000,000$ 40,000,000$ 8 2025 2028 37,000,000$ 37,000,000$ 40,000,000$ 9 2026 2029 37,000,000$ 37,000,000$ 40,000,000$ 10 2027 2030 37,000,000$ 37,000,000$ 40,000,000$ 11 2028 2031 37,000,000$ 37,000,000$ 40,000,000$ 12 2029 2032 37,000,000$ 8,280,924$ 314,676$ 13 2030 2033 7,954,194$ 8,508,650$ 323,330$ 14 2031 2034 8,172,934$ 8,742,638$ 332,221$ 15 2032 2035 16 2033 2036 17 2034 2037 18 2035 2038 19 2036 2039 20 2037 2040 Totals 460,127,127$ 447,532,212$ 440,970,228$ NPV@3%390,491,374$ 384,672,223$ 381,888,446$ ANTICIPATORY PREFUNDING OPTIONS (APO) ATTACHMENT A-2 ANTICIPATORY PREFUNDING OPTIONS SUMMARY ATTACHMENT B INVESTMENT LOSS PREFUNDING TABLE Expected Shortfall Ultra Aggressive Aggressive Less Aggressive Min Yrs Projected Plan Assets 1.0% Cumulative Shortfall + Interest 5 10 15 20 1 718,990,555 7,189,906 7,189,906 1,275,463 545,483 308,898 195,454 2 762,129,988 7,621,300 15,314,499 2,716,737 1,161,880 657,953 416,318 3 807,857,787 8,078,578 24,465,092 4,340,019 1,856,117 1,051,088 665,073 4 856,329,254 8,563,293 34,740,941 6,162,918 2,635,724 1,492,567 944,417 5 907,709,010 9,077,090 46,249,896 8,204,565 3,508,885 1,987,023 1,257,283 6 962,171,550 9,621,716 59,109,105 10,485,742 4,484,487 2,539,491 1,606,855 7 1,019,901,843 10,199,018 73,445,761 13,029,014 5,572,180 3,155,433 1,996,590 8 1,081,095,954 10,810,960 89,397,923 15,858,870 6,782,438 3,840,782 2,430,243 9 1,145,961,711 11,459,617 107,115,395 19,001,886 8,126,626 4,601,973 2,911,885 10 1,214,719,414 12,147,194 126,760,667 22,486,886 9,617,073 5,445,989 3,445,933 Expected Shortfall Ultra Aggressive Aggressive Less Aggressive Min Yrs Projected Plan Assets 2.0% Cumulative Shortfall + Interest 5 10 15 20 1 718,990,555 14,379,811 14,379,811 2,602,383 1,143,261 666,393 434,883 2 762,129,988 15,242,600 30,628,998 5,543,077 2,435,145 1,419,418 926,300 3 807,857,787 16,157,156 48,930,183 8,855,130 3,890,173 2,267,537 1,479,775 4 856,329,254 17,126,585 69,481,881 12,574,469 5,524,127 3,219,949 2,101,312 5 907,709,010 18,154,180 92,499,793 16,740,131 7,354,157 4,286,652 2,797,433 6 962,171,550 19,243,431 118,218,210 21,394,517 9,398,888 5,478,502 3,575,225 7 1,019,901,843 20,398,037 146,891,521 26,583,663 11,678,548 6,807,289 4,442,380 8 1,081,095,954 21,621,919 178,795,847 32,357,542 14,215,088 8,285,809 5,407,249 9 1,145,961,711 22,919,234 214,230,790 38,770,374 17,032,328 9,927,945 6,478,893 10 1,214,719,414 24,294,388 253,521,334 45,880,972 20,156,106 11,748,759 7,667,141 Expected Shortfall Ultra Aggressive Aggressive Less Aggressive Min Yrs Projected Plan Assets 3.0% Cumulative Shortfall + Interest 5 10 15 20 1 718,990,555 21,569,717 21,569,717 3,982,355 1,796,562 1,077,215 724,349 2 762,129,988 22,863,900 45,943,496 8,482,415 3,826,677 2,294,469 1,542,863 3 807,857,787 24,235,734 73,395,275 13,550,758 6,113,162 3,665,441 2,464,742 4 856,329,254 25,689,878 104,222,822 19,242,359 8,680,817 5,205,002 3,499,985 5 907,709,010 27,231,270 138,749,689 25,616,955 11,556,593 6,929,312 4,659,457 6 962,171,550 28,865,147 177,327,314 32,739,430 14,769,759 8,855,921 5,954,962 7 1,019,901,843 30,597,055 220,337,282 40,680,236 18,352,100 11,003,886 7,399,312 8 1,081,095,954 32,432,879 268,193,770 49,515,842 22,338,112 13,393,892 9,006,416 9 1,145,961,711 34,378,851 321,346,185 59,329,219 26,765,227 16,048,382 10,791,367 10 1,214,719,414 36,441,582 380,282,000 70,210,368 31,674,047 18,991,702 12,770,535 CM A O u t l o o k T e r m Repayment Term CM A O u t l o o k T e r m Repayment Term CM A O u t l o o k T e r m Repayment Term ATTACHMENT B INVESTMENT LOSS PREFUNDING TABLE ATTACHMENT C 2020-21 STANDARD FUNDING OPTIONS 1-3 14 20 Yr Val Yr Pmt Yr Balance Required Pmt.ADP Balance Payment ADP Balance Min Payment -$ -$ -$ 21,419,930$ -$ 8,803,997$ 1 2018 2021 296,871,751$ 28,168,551$ 13,812,400$ 1,021,771$ 310,684,151$ 29,190,322$ 2 2019 2022 288,514,998$ 28,943,186$ 13,722,340$ 1,049,870$ 302,237,337$ 29,993,056$ 3 2020 2023 278,771,983$ 29,739,124$ 13,596,910$ 1,078,741$ 292,368,893$ 30,817,865$ 4 2021 2024 267,523,633$ 30,556,950$ 13,432,835$ 1,108,407$ 280,956,468$ 31,665,356$ 5 2022 2025 254,641,933$ 31,397,266$ 13,226,589$ 1,138,888$ 267,868,522$ 32,536,153$ 6 2023 2026 239,989,284$ 32,260,691$ 12,974,375$ 1,170,207$ 252,963,659$ 33,430,898$ 7 2024 2027 223,417,816$ 33,147,860$ 12,672,110$ 1,202,388$ 236,089,926$ 34,350,247$ 8 2025 2028 204,768,651$ 34,059,426$ 12,315,398$ 1,235,453$ 217,084,049$ 35,294,879$ 9 2026 2029 183,871,112$ 34,996,060$ 11,899,513$ 1,269,428$ 195,770,625$ 36,265,488$ 10 2027 2030 160,541,884$ 35,958,452$ 11,419,372$ 1,304,338$ 171,961,256$ 37,262,789$ 11 2028 2031 134,584,105$ 36,947,309$ 10,869,510$ 1,340,207$ 145,453,615$ 38,287,516$ 12 2029 2032 105,786,398$ 37,963,360$ 10,244,055$ 1,377,063$ 116,030,454$ 39,340,423$ 13 2030 2033 73,921,841$ 39,007,352$ 9,536,694$ 1,414,932$ 83,458,536$ 40,422,284$ 14 2031 2034 38,746,851$ 40,080,055$ 8,740,646$ 1,453,843$ 47,487,497$ 41,533,897$ 15 2032 2035 7,848,625$ 1,493,823$ 7,848,625$ 1,493,823$ 16 2033 2036 6,852,806$ 1,534,903$ 6,852,806$ 1,534,903$ 17 2034 2037 5,744,786$ 1,577,113$ 5,744,786$ 1,577,113$ 18 2035 2038 4,515,542$ 1,620,484$ 4,515,542$ 1,620,484$ 19 2036 2039 3,155,388$ 1,665,047$ 3,155,388$ 1,665,047$ 20 2037 2040 1,653,928$ 1,710,836$ 1,653,928$ 1,710,836$ 21 2038 2041 -$ -$ 22 2039 2042 -$ -$ 23 2040 2043 -$ -$ 24 2041 2044 -$ -$ 25 2042 2045 -$ -$ 26 2043 2046 -$ -$ 27 2044 2047 -$ -$ 28 2045 2048 -$ -$ 29 2046 2049 -$ -$ 30 2047 2050 -$ -$ 31 2048 2050 Total Payments 473,225,640$ -$ 26,767,742$ 8,803,997$ 499,993,381$ Net Savings Amortization Efficiency (AE) Ratio 161% 2020-21 Standard Funding Option 1 - "Default" Default Option Total Original 2013 Fresh Start Partial Fresh Start - All Other Bases Level % of Pay no Ramp Up/Down Level % of Pay no Ramp Up/Down ATTACHMENT C (SFO 1) 14 20 Yr Val Yr Pmt Yr Balance Required Pmt.ADP Balance Payment ADP Balance Payment -$ -$ 2017 2020 -$ 21,419,930$ -$ 8,803,997$ 1 2018 2021 296,871,751$ 28,168,551$ 13,812,400$ 1,021,771$ 5,809,678$ 310,684,151$ 35,000,000$ 2 2019 2022 288,514,998$ 28,943,186$ 7,712,762$ 590,089$ 5,466,725$ 296,227,760$ 35,000,000$ 3 2020 2023 278,771,983$ 29,739,124$ 3,205,054$ 1,987,438$ 157,678$ 1,898,144$ 280,759,422$ 35,000,000$ 4 2021 2024 264,208,299$ 30,178,267$ 4,821,733$ -$ -$ -$ 264,208,299$ 35,000,000$ 5 2022 2025 246,498,599$ 30,393,195$ 4,606,805$ -$ -$ -$ 246,498,599$ 35,000,000$ 6 2023 2026 227,549,219$ 30,588,428$ 4,411,572$ -$ -$ -$ 227,549,219$ 35,000,000$ 7 2024 2027 207,273,383$ 30,752,556$ 4,247,444$ -$ -$ -$ 207,273,383$ 35,000,000$ 8 2025 2028 185,578,239$ 30,867,460$ 4,132,540$ -$ -$ -$ 185,578,239$ 35,000,000$ 9 2026 2029 162,364,434$ 30,902,709$ 4,097,291$ -$ -$ -$ 162,364,434$ 35,000,000$ 10 2027 2030 137,525,663$ 30,803,238$ 4,196,762$ -$ -$ -$ 137,525,663$ 35,000,000$ 11 2028 2031 110,948,177$ 30,458,549$ 4,541,451$ -$ -$ -$ 110,948,177$ 35,000,000$ 12 2029 2032 82,510,268$ 29,610,300$ 5,389,700$ -$ -$ -$ 82,510,268$ 35,000,000$ 13 2030 2033 52,081,706$ 27,482,668$ 7,517,332$ -$ -$ -$ 52,081,706$ 35,000,000$ 14 2031 2034 19,523,143$ 20,194,897$ -$ -$ -$ -$ 19,523,143$ 20,194,897$ 15 2032 2035 16 2033 2036 17 2034 2037 18 2035 2038 19 2036 2039 20 2037 2040 21 2038 2041 22 2039 2042 23 2040 2043 24 2041 2044 25 2042 2045 26 2043 2046 27 2044 2047 28 2045 2048 29 2046 2049 30 2047 2050 31 2048 2050 Total Payments 409,083,130$ 51,167,682$ 1,769,537$ 21,978,545$ 475,194,897$ Net Savings Amortization Efficiency (AE) Ratio 153% 2020-21 Standard Fund Option 2 - Current Strategy Option 2 Original 2013 Fresh Start Partial Fresh Start - All Other Bases Level % of Pay Without ADP Level % of Pay With ADP ATTACHMENT C (SFO 2) 14 20 Yr Val Yr Pmt Yr Balance Required Pmt.ADP Balance Payment ADP Balance Payment -$ -$ 2017 2020 -$ 21,419,930$ -$ 8,803,997$ 1 2018 2021 296,871,751$ 28,168,551$ 13,812,400$ 1,021,771$ 10,809,678$ 310,684,151$ 40,000,000$ 2 2019 2022 288,514,998$ 28,943,186$ 3,428,671$ 2,540,722$ 194,386$ 2,433,757$ 291,055,720$ 35,000,000$ 3 2020 2023 275,225,338$ 29,360,771$ 5,639,229$ -$ -$ -$ 275,225,338$ 35,000,000$ 4 2021 2024 258,286,831$ 29,501,908$ 5,498,092$ -$ -$ -$ 258,286,831$ 35,000,000$ 5 2022 2025 240,162,627$ 29,611,972$ 5,388,028$ -$ -$ -$ 240,162,627$ 35,000,000$ 6 2023 2026 220,769,730$ 29,677,091$ 5,322,909$ -$ -$ -$ 220,769,730$ 35,000,000$ 7 2024 2027 200,019,329$ 29,676,293$ 5,323,707$ -$ -$ -$ 200,019,329$ 35,000,000$ 8 2025 2028 177,816,401$ 29,576,424$ 5,423,576$ -$ -$ -$ 177,816,401$ 35,000,000$ 9 2026 2029 154,059,267$ 29,321,992$ 5,678,008$ -$ -$ -$ 154,059,267$ 35,000,000$ 10 2027 2030 128,639,135$ 28,812,818$ 6,187,182$ -$ -$ -$ 128,639,135$ 35,000,000$ 11 2028 2031 101,439,592$ 27,848,162$ 7,151,838$ -$ -$ -$ 101,439,592$ 35,000,000$ 12 2029 2032 72,336,082$ 25,959,110$ 9,040,890$ -$ -$ -$ 72,336,082$ 35,000,000$ 13 2030 2033 41,195,327$ 21,738,103$ 13,261,897$ -$ -$ -$ 41,195,327$ 35,000,000$ 14 2031 2034 7,874,718$ 8,145,672$ -$ -$ -$ -$ 7,874,718$ 8,145,672$ 15 2032 2035 16 2033 2036 17 2034 2037 18 2035 2038 19 2036 2039 20 2037 2040 21 2038 2041 22 2039 2042 23 2040 2043 24 2041 2044 25 2042 2045 26 2043 2046 27 2044 2047 28 2045 2048 29 2046 2049 30 2047 2050 31 2048 2050 Total Payments 376,342,055$ 77,344,025$ 1,216,157$ 22,047,432$ 468,145,672$ Net Savings Amortization Efficiency (AE) Ratio 151% Option 2 Original 2013 Fresh Start Partial Fresh Start - All Other Bases Level % of Pay Without ADP Level % of Pay With ADP 2020-21 Standard Fund Option 3 - $5M One-Time Payment ATTACHMENT C (SFO 3) ATTACHMENT D ANTICIPATORY PREFUNDING OPTIONS 1-3 14 20 Yr Val Yr Pmt Yr Balance Required Pmt.ADP Balance Payment ADP Balance Payment -$ -$ 2017 2020 -$ 21,419,930$ -$ 8,803,997$ 1 2018 2021 296,871,751$ 28,168,551$ 13,812,400$ 1,021,771$ 7,809,678$ 310,684,151$ 37,000,000$ 2 2019 2022 288,514,998$ 28,943,186$ 2,218,671$ 5,643,946$ 431,807$ 5,406,336$ 294,158,944$ 37,000,000$ 3 2020 2023 276,476,972$ 29,494,294$ 7,505,706$ -$ -$ -$ 276,476,972$ 37,000,000$ 4 2021 2024 257,557,263$ 29,418,576$ 7,581,424$ -$ -$ -$ 257,557,263$ 37,000,000$ 5 2022 2025 237,313,173$ 29,260,635$ 7,739,365$ -$ -$ -$ 237,313,173$ 37,000,000$ 6 2023 2026 215,651,998$ 28,989,138$ 8,010,862$ -$ -$ -$ 215,651,998$ 37,000,000$ 7 2024 2027 192,474,540$ 28,556,895$ 8,443,105$ -$ -$ -$ 192,474,540$ 37,000,000$ 8 2025 2028 167,674,660$ 27,889,536$ 9,110,464$ -$ -$ -$ 167,674,660$ 37,000,000$ 9 2026 2029 141,138,789$ 26,862,847$ 10,137,153$ -$ -$ -$ 141,138,789$ 37,000,000$ 10 2027 2030 112,745,407$ 25,252,913$ 11,747,087$ -$ -$ -$ 112,745,407$ 37,000,000$ 11 2028 2031 82,364,488$ 22,611,483$ 14,388,517$ -$ -$ -$ 82,364,488$ 37,000,000$ 12 2029 2032 49,856,904$ 17,892,051$ 19,107,949$ -$ -$ -$ 49,856,904$ 37,000,000$ 13 2030 2033 15,073,790$ 7,954,194$ -$ -$ -$ -$ 15,073,790$ 7,954,194$ 14 2031 2034 7,901,073$ 8,172,934$ -$ -$ -$ -$ 7,901,073$ 8,172,934$ 15 2032 2035 16 2033 2036 17 2034 2037 18 2035 2038 19 2036 2039 20 2037 2040 21 2038 2041 22 2039 2042 23 2040 2043 24 2041 2044 25 2042 2045 26 2043 2046 27 2044 2047 28 2045 2048 29 2046 2049 30 2047 2050 31 2048 2050 Total Payments 339,467,232$ 105,990,304$ 1,453,578$ 22,020,011$ 460,127,127$ Net Savings Amortization Efficiency (AE) Ratio 148% Option 2 Original 2013 Fresh Start Partial Fresh Start - All Other Bases Level % of Pay Without ADP Level % of Pay With ADP Anticipatory Prefunding Option 1 - $2 Million extra per year ATTACHMENT D (APO 1) 14 20 Yr Val Yr Pmt Yr Balance Required Pmt.ADP Balance Payment ADP Balance Payment -$ -$ 2017 2020 -$ 21,419,930$ -$ 8,803,997$ 1 2018 2021 296,871,751$ 28,168,551$ 13,812,400$ 1,021,771$ 10,809,678$ 310,684,151$ 40,000,000$ 2 2019 2022 288,514,998$ 28,943,186$ 8,428,671$ 2,540,722$ 194,386$ 2,433,757$ 291,055,720$ 40,000,000$ 3 2020 2023 270,053,298$ 28,809,023$ 11,190,977$ -$ -$ -$ 270,053,298$ 40,000,000$ 4 2021 2024 247,580,707$ 28,279,039$ 11,720,961$ -$ -$ -$ 247,580,707$ 40,000,000$ 5 2022 2025 223,535,035$ 27,561,796$ 12,438,204$ -$ -$ -$ 223,535,035$ 40,000,000$ 6 2023 2026 197,806,166$ 26,590,202$ 10,409,798$ -$ -$ -$ 197,806,166$ 37,000,000$ 7 2024 2027 173,379,500$ 25,723,818$ 11,276,182$ -$ -$ -$ 173,379,500$ 37,000,000$ 8 2025 2028 147,242,967$ 24,491,107$ 12,508,893$ -$ -$ -$ 147,242,967$ 37,000,000$ 9 2026 2029 119,276,877$ 22,701,884$ 14,298,116$ -$ -$ -$ 119,276,877$ 37,000,000$ 10 2027 2030 89,353,161$ 20,013,477$ 16,986,523$ -$ -$ -$ 89,353,161$ 37,000,000$ 11 2028 2031 57,334,785$ 15,740,091$ 21,259,909$ -$ -$ -$ 57,334,785$ 37,000,000$ 12 2029 2032 23,075,122$ 8,280,924$ -$ -$ -$ -$ 23,075,122$ 8,280,924$ 13 2030 2033 16,124,526$ 8,508,650$ -$ -$ -$ -$ 16,124,526$ 8,508,650$ 14 2031 2034 8,451,827$ 8,742,638$ -$ -$ -$ -$ 8,451,827$ 8,742,638$ 15 2032 2035 16 2033 2036 17 2034 2037 18 2035 2038 19 2036 2039 20 2037 2040 21 2038 2041 22 2039 2042 23 2040 2043 24 2041 2044 25 2042 2045 26 2043 2046 27 2044 2047 28 2045 2048 29 2046 2049 30 2047 2050 31 2048 2050 Total Payments 302,554,386$ 130,518,234$ 1,216,157$ 22,047,432$ 447,532,212$ Net Savings Amortization Efficiency (AE) Ratio 144% Option 2 Original 2013 Fresh Start Partial Fresh Start - All Other Bases Level % of Pay Without ADP Level % of Pay With ADP Anticipatory Prefunding Option 2 - $5M for 5 Years, $ 2 million Extra Thereafter ATTACHMENT D (APO 2) 14 20 Yr Val Yr Pmt Yr Balance Required Pmt.ADP Balance Payment ADP Balance Payment -$ -$ 2017 2020 -$ 21,419,930$ -$ 8,803,997$ 1 2018 2021 296,871,751$ 28,168,551$ 13,812,400$ 1,021,771$ 10,809,678$ 310,684,151$ 40,000,000$ 2 2019 2022 288,514,998$ 28,943,186$ 8,428,671$ 2,540,722$ 194,386$ 2,433,757$ 291,055,720$ 40,000,000$ 3 2020 2023 270,053,298$ 28,809,023$ 11,190,977$ -$ -$ -$ 270,053,298$ 40,000,000$ 4 2021 2024 247,580,707$ 28,279,039$ 11,720,961$ -$ -$ -$ 247,580,707$ 40,000,000$ 5 2022 2025 223,535,035$ 27,561,796$ 12,438,204$ -$ -$ -$ 223,535,035$ 40,000,000$ 6 2023 2026 197,806,166$ 26,590,202$ 13,409,798$ -$ -$ -$ 197,806,166$ 40,000,000$ 7 2024 2027 170,276,276$ 25,263,402$ 14,736,598$ -$ -$ -$ 170,276,276$ 40,000,000$ 8 2025 2028 140,819,293$ 23,422,649$ 16,577,351$ -$ -$ -$ 140,819,293$ 40,000,000$ 9 2026 2029 109,300,322$ 20,803,054$ 19,196,946$ -$ -$ -$ 109,300,322$ 40,000,000$ 10 2027 2030 75,575,023$ 16,927,426$ 23,072,574$ -$ -$ -$ 75,575,023$ 40,000,000$ 11 2028 2031 39,488,953$ 10,840,883$ 29,159,117$ -$ -$ -$ 39,488,953$ 40,000,000$ 12 2029 2032 876,858$ 314,676$ -$ -$ -$ -$ 876,858$ 314,676$ 13 2030 2033 612,734$ 323,330$ -$ -$ -$ -$ 612,734$ 323,330$ 14 2031 2034 321,171$ 332,221$ -$ -$ -$ -$ 321,171$ 332,221$ 15 2032 2035 16 2033 2036 17 2034 2037 18 2035 2038 19 2036 2039 20 2037 2040 21 2038 2041 22 2039 2042 23 2040 2043 24 2041 2044 25 2042 2045 26 2043 2046 27 2044 2047 28 2045 2048 29 2046 2049 30 2047 2050 31 2048 2050 Total Payments 266,579,437$ 159,931,198$ 1,216,157$ 22,047,432$ 440,970,228$ Net Savings Amortization Efficiency (AE) Ratio 142% Anticipatory Prefunding Option 3 - $5M Extra Per Year Ongoing Option 2 Original 2013 Fresh Start Partial Fresh Start - All Other Bases Level % of Pay Without ADP Level % of Pay With ADP ATTACHMENT D (APO 3) 1 Prelim. Pension Funding Recommendations June 30, 2018 Actuarial Valuation Setting FY 2021-22 Contribution Rates 33 Plan Balance & Funded Status ` 2016 2017 2018 Dollars Percent Discount Rate Phase-In 7.375%7.25%7.00% Accrued Liability (AL) 887,481,877 939,503,861 1,006,978,316 67,474,455 7.18% Less: Market Value of Assets (MVA) 566,016,065 619,834,899 673,876,069 54,041,170 8.72% Unfunded Accrued Liability (UAL) 321,465,812 319,668,962 333,102,247 13,433,285 4.20% Funded Ratio 63.8%66.0%66.9% Fiscal Year Change 44 Orange County Comparison –Non Pooled Plans Agency UAL FS UAL FS UAL Total Pmts Interest as % of Total Pmts Pmt Efficiency AL GF Rev Total Increase % Change AL to Rev Ratio City of Anaheim Total 741,068,980 70.8%817,206,799 69.9%833,036,314 1,542,601,086 46%185%5.8%2.9%76,137,819 10%655% City of Brea Total 121,252,581 68.5%137,197,808 67.0%140,810,148 271,703,204 48%193%6.4%1.6%15,945,227 13%772% City of Buena Park Total 39,221,940 71.1%43,880,059 69.7%44,659,783 81,487,121 45%182%5.6%1.4%4,658,119 12%227% City of Costa Mesa Total 212,923,672 62.1%230,585,371 61.5%234,013,094 449,689,723 48%192%6.4%1.6%17,661,699 8%452% City of Cypress* Total 18,663,147 76.1%21,626,496 74.2%22,166,992 41,210,977 46%186%6.2%0.0%2,963,349 16%264% City of Fullerton Total 234,893,103 69.1%256,281,657 68.1%263,656,687 511,514,778 48%194%5.3%2.7%21,388,554 9%861% City of Garden Grove Total 268,412,094 66.9%299,230,497 65.7%305,876,304 589,968,753 48%193%6.3%3.2%30,818,403 11%792% City of Huntington Beach Total 403,394,647 68.2%436,173,154 67.7%443,118,659 834,903,132 47%188%6.1%0.7%32,778,507 8%597% City of Irvine Total 154,634,662 76.1%167,287,377 76.6%150,127,167 261,916,655 43%174%9.5%0.3%12,652,715 8%357% City of La Habra Total 26,498,700 75.9%29,579,036 75.0%30,486,598 56,219,402 46%184%6.8%2.0%3,080,336 12%267% City of Laguna Beach Total 27,243,435 75.3%29,882,593 75.0%29,748,805 52,202,974 43%175%8.4%3.3%2,639,158 10%186% City of Mission Viejo Total 19,596,811 76.3%22,196,041 75.6%22,444,284 38,486,689 42%171%10.8%0.8%2,599,230 13%157% City of Newport Beach Total 319,668,962 66.0%333,135,247 66.9%318,291,681 514,736,400 38%162%6.6%3.4%13,466,285 4%467% City of Orange Total 256,020,262 69.9%280,577,514 69.1%287,538,115 550,128,578 48%191%5.9%1.8%24,557,252 10%813% City of Santa Ana Total 613,781,439 68.6%681,096,340 67.2%695,805,669 1,316,070,957 47%189%5.6%1.2%67,314,901 11%786% City of Tustin Total 26,806,151 76.2%29,818,507 75.5%29,293,129 53,812,744 46%184%7.8%22.8%3,012,356 11%205% City of Westminster Total 39,342,203 69.2%43,384,139 68.1%44,136,236 81,752,230 46%185%6.2%3.1%4,041,936 10%221% City of Yorba Linda Total 21,183,584 69.7%23,227,948 69.3%23,369,131 44,171,593 47%189%6.9%1.5%2,044,364 10%205% Irvine Ranch Water District Total 62,900,429 75.8%71,700,383 74.7%72,558,982 123,033,441 41%170%8.9%6.3%8,799,954 14%180% Santa Margarita Water District Total 29,770,735 68.5%33,689,685 67.6%34,337,181 63,789,095 46%186%9.8%4.3%3,918,950 13%139% Grand Total 3,637,277,537 69.4%3,987,756,651 68.7%4,025,474,959 7,479,399,532 46%186%6.3%2.6%350,479,114 10%515% Change in UAL 2017 to 20182020 Rollforward Annualized growth 2007 -2018 2017 Valuation 2018 Valuation 55 Plan Maturity Measures Ratio of Retiree Accrued Liability to Total Accrued Liability*MISC SAFETY TOTAL 1. Retiree Accrued Liability 240,086,226 419,250,009 659,336,235 2. Total Accrued Liability 425,538,434 581,439,882 1,006,978,316 3. Ratio of Retiree AL to Total AL [(1) / (2)]56%72%65% * A mature plan will have a ratio above 60-65% Support Ratio MISC SAFETY TOTAL 1. Number of Actives 505 262 767 2. Number of Retirees 664 437 1101 3. Support Ratio [(1) / (2)]76%60%70% * A mature plan will often have a ratio near or below one. The average support ratio for CalPERS public agency plans is 1.25. June 30, 2018 June 30, 2018 66 Pension Tiers Over Time 70% 7% 23% 0 100 200 300 400 500 600 700 800 900 FY13 FY14 FY15 FY16 FY 17 FY 18 Ac t i v e E m p l o y e e s Fiscal Year Classic Tier 2 PEPRA 77 Pension Unfunded Liability (In Millions) Based on Past Losses $310 $295 $280 $263 $245 $226 $206 $184 $161 $136 $109 $81 $50 $17 $35 $35 $35 $35 $35 $35 $35 $35 $35 $35 $35 $35 $35 $18 $0 $50 $100 $150 $200 $250 $300 $350 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Balance Payment 88 Pensions Costs are Sensitive to Investment Earnings 99 Questions 1010 Hasn’t the Market Already Recovered? 1111 12 IS THERE A PATH TO 7% ? 50% 28% 13% 8%1%Target Asset Allocation Global Equity Fixed Income Real Assets Private Equity Liquidity Expected Return* Return Contribution Global Equity 50%7.00%3.50% Fixed Income 28%3.50%0.98% Real Assets 13%5.50%0.72% Private Equity 8%8.50%0.68% Liquidity 1%2.00%0.02% 100%5.90% Allocation * Estimated 1313 Discount Rate Sensitivity -1% Change As of June 30, 2018 Accrued Liability Unfunded Accrued Funded Status Normal Cost 7.0% (current discount rate)$1,006,978,316 $333,135,248 66.9%17,907,540 6.0%$1,141,265,517 $467,422,449 59.0%22,751,726 Difference $134,287,201 $134,287,201 4,844,186 Amortization of UAL $14,029,744 Normal Cost $4,844,186 Potential Increase in Plan Costs $18,873,930 per year 1414 Anticipatory Investment Shortfall Worksheet Expected Shortfall Aggressive Less Aggressive Min Yrs Projected Plan Assets 1.0% Cumulative Shortfall + Interest 10 15 20 1 718,990,555 7,189,906 7,189,906 545,483 308,898 195,454 2 762,129,988 7,621,300 15,314,499 1,161,880 657,953 416,318 3 807,857,787 8,078,578 24,465,092 1,856,117 1,051,088 665,073 4 856,329,254 8,563,293 34,740,941 2,635,724 1,492,567 944,417 5 907,709,010 9,077,090 46,249,896 3,508,885 1,987,023 1,257,283 6 962,171,550 9,621,716 59,109,105 4,484,487 2,539,491 1,606,855 7 1,019,901,843 10,199,018 73,445,761 5,572,180 3,155,433 1,996,590 8 1,081,095,954 10,810,960 89,397,923 6,782,438 3,840,782 2,430,243 9 1,145,961,711 11,459,617 107,115,395 8,126,626 4,601,973 2,911,885 10 1,214,719,414 12,147,194 126,760,667 9,617,073 5,445,989 3,445,933 CM A O u t l o o k T e r m Repayment Term 1515 Funded Status Projection through 2028 Assumed Investment Return: 66.9%67.7% ; $ 476.29 M 73.4% ; $ 392.53 M 65.8% 69.2%67.5% 63.8%66.0% 80.3% ; $ 291.42 M 86.4% ; $ 201.12 M 93.8% ; $ 92.15 M 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 85.0% 90.0% 95.0% 2012 2014 2016 2018 2020 2022 2024 2026 2028 Fu n d e d S t a t u s Year 4.0%5.0%6.1%7.0%8.0%UAL 1616 Funded Status Projection through 2033 Assumed Investment Returns through 2028 and 7% thereafter: 67.7% 83.2% ; $ 304.56 M 66.9% 73.4% 87.4% ; $ 228.2 M 65.8% 69.2%67.5% 63.8% 66.0% 80.3% 92.6% ; $ 135.19 M 86.4% 97.2% ; $ 51.43 M93.8% 102.5% ; $ (44.65) M 60.0% 70.0% 80.0% 90.0% 100.0% 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 Fu n d e d S t a t u s Year 4.0%5.0%6.1%7.0%8.0% Funded Status UAL 1717 Standard Funding Options (SFO) SFO 1 SFO 2 SFO 3 Year Val Year Pmt Yr Default Current $5 Mill One- tIme Surplus 1 2018 2021 29,190,322$ 35,000,000$ 40,000,000$ 2 2019 2022 29,993,056$ 35,000,000$ 35,000,000$ 3 2020 2023 30,817,865$ 35,000,000$ 35,000,000$ 4 2021 2024 31,665,356$ 35,000,000$ 35,000,000$ 5 2022 2025 32,536,153$ 35,000,000$ 35,000,000$ 6 2023 2026 33,430,898$ 35,000,000$ 35,000,000$ 7 2024 2027 34,350,247$ 35,000,000$ 35,000,000$ 8 2025 2028 35,294,879$ 35,000,000$ 35,000,000$ 9 2026 2029 36,265,488$ 35,000,000$ 35,000,000$ 10 2027 2030 37,262,789$ 35,000,000$ 35,000,000$ 11 2028 2031 38,287,516$ 35,000,000$ 35,000,000$ 12 2029 2032 39,340,423$ 35,000,000$ 35,000,000$ 13 2030 2033 40,422,284$ 35,000,000$ 35,000,000$ 14 2031 2034 41,533,897$ 20,194,897$ 8,145,672$ 15 2032 2035 1,493,823$ -$ -$ 16 2033 2036 1,534,903$ -$ -$ 17 2034 2037 1,577,113$ -$ -$ 18 2035 2038 1,620,484$ -$ -$ 19 2036 2039 1,665,047$ -$ -$ 20 2037 2040 1,710,836$ -$ -$ Totals 499,993,381$ 475,194,897$ 468,145,672$ Savings over default 24,798,485$ 31,847,710$ 1818 Current Funding Strategy 2019-20 2020-21 2019-20 2020-21 Dollars Percent Misc 16.9%17.7%7,712,921 7,747,118 34,197 0.4% Safety 28.1%29.2%9,694,973 10,160,422 465,449 4.8% 17,407,894 17,907,540 499,646 2.9% 2019-20 2020-21 Dollars Percent 26,196,003 29,753,088 3,557,085 13.6% 8,803,997 5,246,912 (3,557,085) -40.4% 35,000,000 35,000,000 - 0.0% 2019-20 2020-21 Dollars Percent 52,407,894 52,907,540 499,646 1.0% 10,632,010 11,258,628 626,618 5.9% 41,775,884$ 41,648,912$ (126,972)$ -0.3% Total Expected Pension Cost Change Total Expected PERS Contribution Less: Expected Employee Contributions Net Employer Cost "Projected" Minimum Unfunded Liability Contribution Additional Discretionary Payment (ADP) Total Planned UAL Payment Total Normal Expected Cost Amortization of UAL Change Normal Cost Rate Expected Normal Cost Change 1919 Anticipatory Prefunding Options (APO) APO 1 APO 2 APO 3 Yr. Val Year Pmt Yr.$2 Mill Extra/Yr $5 Mill for 5 Yrs, $2 Mill Extra Thereafter $5 Mill Extra/Yr Ongoing 1 2018 2021 37,000,000$ 40,000,000$ 40,000,000$ 2 2019 2022 37,000,000$ 40,000,000$ 40,000,000$ 3 2020 2023 37,000,000$ 40,000,000$ 40,000,000$ 4 2021 2024 37,000,000$ 40,000,000$ 40,000,000$ 5 2022 2025 37,000,000$ 40,000,000$ 40,000,000$ 6 2023 2026 37,000,000$ 37,000,000$ 40,000,000$ 7 2024 2027 37,000,000$ 37,000,000$ 40,000,000$ 8 2025 2028 37,000,000$ 37,000,000$ 40,000,000$ 9 2026 2029 37,000,000$ 37,000,000$ 40,000,000$ 10 2027 2030 37,000,000$ 37,000,000$ 40,000,000$ 11 2028 2031 37,000,000$ 37,000,000$ 40,000,000$ 12 2029 2032 37,000,000$ 8,280,924$ 314,676$ 13 2030 2033 7,954,194$ 8,508,650$ 323,330$ 14 2031 2034 8,172,934$ 8,742,638$ 332,221$ Totals 460,127,127$ 447,532,212$ 440,970,228$ ANTICIPATORY PREFUNDING OPTIONS (APO) Yr.APO 1 APO 2 APO 3 1 2,000,000 5,000,000 5,000,000 2 2,000,000 5,000,000 5,000,000 3 2,000,000 5,000,000 5,000,000 4 2,000,000 5,000,000 5,000,000 5 2,000,000 5,000,000 5,000,000 6 2,000,000 2,000,000 5,000,000 7 2,000,000 2,000,000 5,000,000 8 2,000,000 2,000,000 5,000,000 9 2,000,000 2,000,000 5,000,000 10 2,000,000 2,000,000 5,000,000 11 2,000,000 2,000,000 5,000,000 12 2,000,000 2,000,000 5,000,000 13 2,000,000 2,000,000 5,000,000 14 2,000,000 2,000,000 5,000,000 15 2,000,000 2,000,000 5,000,000 Total 30,000,000 45,000,000 75,000,000 FV@6%(46,551,940) (76,837,465) (116,379,849) Additional Investment Loss Risk Mitigation Pmts. 2020 Preliminary FY 2020-21 Funding Recommendation 2019-20 2020-21 2019-20 2020-21 Dollars Percent Misc 16.9%17.7%7,712,921 7,747,118 34,197 0.4% Safety 28.1%29.2%9,694,973 10,160,422 465,449 4.8% 17,407,894 17,907,540 499,646 2.9% 2019-20 2020-21 Dollars Percent 26,196,003 29,753,088 3,557,085 13.6% 8,803,997 10,246,912 1,442,915 16.4% 35,000,000 40,000,000 5,000,000 14.3% 2019-20 2020-21 Dollars Percent 52,407,894 57,907,540 5,499,646 10.5% 10,632,010 11,258,628 626,618 5.9% 41,775,884$ 46,648,912$ 4,873,028$ 11.7% Total Expected Pension Cost Change Total Expected PERS Contribution Less: Expected Employee Contributions Net Employer Cost "Projected" Minimum Unfunded Liability Contribution Additional Discretionary Payment (ADP) Total Planned UAL Payment Total Normal Expected Cost Amortization of UAL Change Normal Cost Rate Expected Normal Cost Change 2121 Questions 1 CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5B November 14, 2019 TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE FROM: Finance Department Dan Matusiewicz, Finance Director 949-644-3123 or danm@newportbeachca.gov SUBJECT: INVESTMENT POLICY AND REVIEW SUMMARY: Consistent with Section K-2 of Council Policy F-1, Statement of Investment Policy (the Policy), the Finance Department has completed an annual review of the Policy to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends. The investment of City funds is governed by California Code (Sections 53600-53610) that prescribe the investment vehicles in which local agencies are permitted to invest available funds. Staff, working with the City’s investment advisor, Chandler Asset Management (Chandler), has completed a comprehensive review of the Policy including compliance with relevant sections of the Government Code, as well as, incorporating best investment practices. Staff is proposing a series of modifications to the Investment Policy as recommended by the City’s investment advisor, Chandler Asset Management (Chandler), and supported by the City’s Finance Director/Treasurer. RECOMMENDED ACTION: a) Review and comment on staff’s proposed changes to Council Investment Policy F-1; b) Direct staff to bring amended policy to Council for approval; and c) Review and comment on staff’s proposed investment strategies. DISCUSSION: California Government Code Section 53600.5 mandates that the City Treasurer shall follow three objectives when investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds. The primary objective of the City Treasurer shall be to Annual Investment Policy Review and Update November 14, 2019 Page 2 safeguard the principal of the funds under his or her control. The secondary objective shall be to meet the liquidity needs of the City. The third objective shall be to achieve a return on the funds under his or her control. Guided by the Policy and constrained by California Government Code, the City’s core investment objectives are to provide safety of the invested principal by maintaining a well-diversified, high-quality portfolio of liquid assets while earning a market rate of return commensurate with the City’s conservative risk profile. The investment of City funds is governed by California Code (Sections 53600-53610) that prescribe the investment vehicles in which local agencies are permitted to invest available funds. Staff, working with its investment advisor, Chandler Asset Management, has completed a comprehensive review of the City’s Investment Policy including compliance with relevant sections of the Government Code, as well as, incorporating best investment practices. The most significant recommended changes to the Investment Policy include: Credit Rating (Section G, page 7) – Added clarifying language specifying that credit quality minimums are applicable as of the time of purchase. Mortgage-Backed Securities (MBS), Collateralized Mortgage Obligations (CMO) and Asset-Backed Securities (ABS) (Section G.1.d, page 8) – Added language to the Authorized Investments Section of the investment policy clarifying that credit quality and portfolio percentage limitations for MBS, CMOs, and ABS only apply to securities that are issued by issuers other than the U.S. Treasury or U.S. Agencies as defined in Sections a, b and c of the “Investments Specifically Permitted” Section of the investment policy. (Page 8) Removed the issuer rating minimum of “A” category or higher by at least one NRSRO to be consistent with AB 1770, legislation that was signed by Governor Brown eliminating this ambiguous requirement in CGC effective 1/1/19. The minimum “AA” category rating by a NRSRO at the security level still applies per CGC. Diversification (Section H.1, page 14) – Added language stating that investments are limited to 5% per issuer “unless otherwise specified in this investment policy” to minimize the risk of contradictory limitations. Credit Quality (Section H.3, page 14) – Recommend removing the restriction on purchasing securities rated A1 and/or A+ that are on negative watch to be more consistent with CGC Section 53601(k). Addition of a glossary section – Recommend including a glossary of investment terms. (Page 17-21) for greater clarity. Annual Investment Policy Review and Update November 14, 2019 Page 3 See the redline Statement of Investment Policy for recommended changes, included as Attachment A. With Finance Committee concurrence, Finance staff will bring the suggested revisions to Council for formal approval. These changes are in furtherance of the City’s investment objectives of safety, liquidity and return. RECOMMENDATION: Receive and file. Prepared by: Submitted by: /s/Steve Montano /s/Dan Matusiewicz Steve Montano Dan Matusiewicz Deputy Finance Director Finance Director Attachment: A. Council Policy F-1, Statement of Investment Policy ATTACHMENT A COUNCIL POLICY F-1, STATEMENT OF INVESTMENT POLICY F-1 STATEMENT OF INVESTMENT POLICY PURPOSE: The City Council has adopted this Investment Policy (the Policy) in order to establish the scope of the investment policy, investment objectives, standards of care, authorized investments, investment parameters, reporting, investment policy compliance and adoption, and the safekeeping and custody of assets. This Policy is organized in the following sections: A. Scope of Investment Policy 1. Pooling of Funds 2. Funds Included in the Policy 3. Funds Excluded from the Policy B. Investment Objectives 1. Safety 2. Liquidity 3. Yield C. Standards of Care 1. Prudence 2. Ethics and Conflicts of Interest 3. Delegation of Authority 4. Internal Controls D. Banking Services E. Broker/Dealers F. Safekeeping and Custody of Assets G. Authorized Investments 1. Investments Specifically Permitted 2. Investments Specifically Not Permitted 3. Exceptions to Prohibited and Restricted Investments H. Investment Parameters 1. Diversification 2. Maximum Maturities 3. Credit Quality 4. Competitive Transactions I. Portfolio Performance J. Reporting K. Investment Policy Compliance and Adoption 1. Compliance 2. Adoption 1 2 F-1 A. SCOPE OF INVESTMENT POLICY 1. Pooling of Funds All cash shall be pooled for investment purposes. The investment income derived from the pooled investment shall be allocated to the contributing funds, net of all banking and investing expenses, based upon the proportion of the respective average balances relative to the total pooled balance. Investment income shall be distributed to the individual funds not less than annually. 2. Funds Included in the Policy The provisions of this Policy shall apply to all financial assets of the City as accounted for in the City’s Comprehensive Annual Financial Report, including; a) General Fund b) Special Revenue Funds c) Capital Project Funds d) Enterprise Funds e) Internal Service Funds f) Trust and Agency Funds g) Permanent Endowment Funds h) Any new fund created unless specifically exempted If the City invests funds on behalf of another agency and, if that agency does not have its own investment policy, this Policy shall govern the agency’s investments. 3. Funds Excluded from this Policy Bond Proceeds – Investment of bond proceeds will be made in accordance with applicable bond indentures. B. INVESTMENT OBJECTIVES The City’s funds shall be invested in accordance with all applicable City policies and codes, State statutes, and Federal regulations, and in a manner designed to accomplish the following objectives, which are listed in priority order: 1. Safety Preservation of principal is the foremost objective of the investment program. Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective shall be to mitigate credit risk and interest rate risk. To attain this objective, the City shall diversify its investments by investing funds among 3 F-1 several financial institutions and a variety of securities offering independent returns. a) Credit Risk The City shall minimize credit risk, the risk of loss due to the failure of the security issuer or backer, by:  Limiting investments in securities that have higher credit risks, pre-qualifying the financial institutions, broker/dealers, intermediaries, and advisors with which the City will do business  Diversifying the investment portfolio so as to minimize the impact any one industry/investment class can have on the portfolio b) Interest Rate Risk To minimize the negative impact of material changes in the market value of securities in the portfolio, the City shall:  Structure the investment portfolio so that securities mature concurrent with cash needs to meet anticipated demands, thereby avoiding the need to sell securities on the open market prior to maturity  Invest in securities of varying maturities 2. Liquidity The City’s investment portfolio shall remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated without requiring a sale of securities. Since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets. A portion of the portfolio also may be placed in money market mutual funds or LAIF which offer same-day liquidity for short-term funds. 3. Yield The City’s investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the City’s investment risk constraints and the liquidity characteristics of the portfolio. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments is limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed. 4 F-1 C. STANDARDS OF CARE 1. Prudence The standard of prudence to be used for managing the City's investment program is California Government Code Section 53600.3, the prudent investor standard, which states that “when investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.” The City's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City recognizes that no investment is totally without risk and that the investment activities of the City are a matter of public record. Accordingly, the City recognizes that occasional measured losses may occur in a diversified portfolio and shall be considered within the context of the overall portfolio's return, provided that adequate diversification has been implemented and that the sale of a security is in the best long-term interest of the City. The Finance Director and authorized investment personnel acting in accordance with established procedures and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided that deviations from expectations are reported in a timely fashion to the City Council and appropriate action is taken to control adverse developments. 2. Ethics and Conflicts of Interest Elected officials and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the City’s investment program or could impair or create the appearance of an impairment of their ability to make impartial investment decisions. Employees and investment officials shall subordinate their personal investment transactions to those of the City. In addition, City Council members, the City Manager, and the Finance Director shall file a Statement of Economic Interests each year as required by California Government Code Section 87203 and regulations of the Fair Political Practices Commission. 5 F-1 3. Delegation of Authority Authority to manage the City’s investment program is derived from the Charter of the City of Newport Beach section 605 (j). The Finance Director shall assume the title of and act as City Treasurer and with the approval of the City Manager appoint deputies annually as necessary to act under the provisions of any law requiring or permitting action by the City Treasurer. The Finance Director may then delegate the authority to conduct investment transactions and to manage the operation of the investment portfolio to other specifically authorized staff members. No person may engage in an investment transaction except as expressly provided under the terms of this Policy. The City may engage the support services of outside investment advisors with respect to its investment program, so long as it can be demonstrated that these services produce a net financial advantage or necessary financial protection of the City's financial resources. Such companies must be registered under the Investment Advisors Act of 1940, be well-established and exceptionally reputable. Members of the staff of such companies who will have primary responsibility for managing the City’s investments must have a working familiarity with the special requirements and constraints of investing municipal funds in general and this City's funds in particular. These firms must insure that the portion of the portfolio under their management complies with various concentration and other constraints specified herein, and contractually agree to conform to all provisions of governing law and the collateralization and other requirements of this Policy. Selection and retention of broker/dealers by investment advisors shall be at their sole discretion and dependent upon selection and retention criteria as stated in the Uniform Application for Investment Advisor Registration and related Amendments (SEC Form ADV 2A). 4. Internal Controls The Finance Director is responsible for establishing and maintaining a system of internal controls. The internal controls shall be designed to prevent losses of public funds arising from fraud, employee error, and misrepresentation by third parties, unanticipated changes in financial markets, or imprudent action by City employees and officers. The internal structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management. 6 F-1 D. BANKING SERVICES Banking services for the City shall be provided by FDIC insured banks approved to provide depository and other banking services. To be eligible, a bank shall qualify as a depository of public funds in the State of California as defined in California Government Code Section 53630.5 and shall secure deposits in excess of FDIC insurance coverage in accordance with California Government Code Section 53652. E. BROKER/DEALERS In the event that an investment advisor is not used to purchase securities, the City will select broker/dealers on the basis of their expertise in public cash management and their ability to provide service to the City’s account. Each approved broker/dealer must possess an authorizing certificate from the California Commissioner of Corporations as required by Section 25210 of the California Corporations Code. To be eligible, a firm must meet at least one of the following criteria: 1. Be recognized as Primary Dealers by the Federal Reserve Bank of New York or have a primary dealer within their holding company structure, or 2. Report voluntarily to the Federal Reserve Bank of New York, or 3. Qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (Uniform Net Capital Rule). F. SAFEKEEPING AND CUSTODY OF ASSETS The Finance Director shall select one or more banks to provide safekeeping and custodial services for the City. A Safekeeping Agreement approved by the City shall be executed with each custodian bank prior to utilizing that bank's safekeeping services. Custodian banks will be selected on the basis of their ability to provide services for the City's account and the competitive pricing of their safekeeping related services. The purchase and sale of securities and repurchase agreement transactions shall be settled on a delivery versus payment basis. All securities shall be perfected in the name of the City. Sufficient evidence to title shall be consistent with modern investment, banking and commercial practices. All investment securities, except non-negotiable Certificates of Deposit, Money Market Funds and local government investment pools, purchased by the City will 7 F-1 be delivered by book entry and will be held in third-party safekeeping by a City approved custodian bank, its correspondent bank or its Depository Trust Company (DTC) participant account. All Fed wireable book entry securities owned by the City shall be held in the Federal Reserve system in a customer account for the custodian bank which will name the City as “customer.” All DTC eligible securities shall be held in the custodian bank’s DTC participant account and the custodian bank shall provide evidence that the securities are held for the City as “customer.” G.AUTHORIZED INVESTMENTS All investments and deposits of the City shall be made in accordance with California Government Code Sections 16429.1, 53600-53609 and 53630-53686. Any revisions or extensions of these code sections will be assumed to be part of this Policy immediately upon being enacted. The City has further restricted the eligible types of securities and transactions. The foregoing list of authorized securities and transactions shall be strictly interpreted. Any deviation from this list must be pre- approved by resolution of the City Council. In the event an apparent discrepancyis found between this Policy and the Government Code, the more restrictive parameter(s) will take precedence. Where this section specifies a percentage limitation or minimum credit rating fora particular security type, that percentage or credit rating minimum is applicable only at the date of purchase. 1.Investments Specifically Permitted a) United States Treasury bills, notes, or bonds with a final maturity not exceeding five years from the date of trade settlement. There is no limitation as to the percentage of the City’s portfolio that may beinvested in this category. b) Federal Instrumentality (government-sponsored enterprise) debentures, discount notes, callable and step-up securities, with a final maturity not exceeding five years from the date of trade settlement. There is no limitation as to the percentage of the portfolio that can be invested in this category. c) Federal Agency Obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest and which have a final maturity not exceeding five years from the Commented: Added language specifying that credit quality minimums are applicable as of the time of purchase. 8 F-1 date of trade settlement. There is no limitation as to the percentage of the portfolio that can be invested in this category. d) Mortgage-backed Securities, Collateralized Mortgage Obligation (CMO) and Asset-backed Securities from issuers not defined sections a, b and c of the Investments Specifically Permitted section of this investment policy are limited to mortgage-backed pass- through securities issued by a US government agency, or consumer receivable pass-through certificates or bonds with a final maturity not exceeding five years from the date of trade settlement. Securities eligible for investment under this subdivision shall be issued by an issuer whose debt is rated in at least the “A” category or the equivalent by a Nationally Recognized Statistical Rating Organization (NRSRO). The security itself shall be rated at least “AAA” or the equivalent by an NRSRO. No more than five percent (5%) of the City’s total portfolio shall be invested in any one issuer of mortgage-backed and asset-backed securities listed above, and the aggregate investment in mortgage-backed and asset-backed securities shall not exceed twenty percent (20%) of the City’s total portfolio. e) Medium-Term Notes issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within theUnited States, with a final maturity not exceeding five years from the date of trade settlement, and rated in at least the “A” category or the equivalent by an NRSRO. No more than five percent (5%) of the City’s total portfolio shall be invested in any one issuer of medium- term notes, and the aggregate investment in medium-term notes shall not exceed thirty percent (30%) of the City’s total portfolio. f) Municipal Bonds: including bonds issued by the City of Newport Beach, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the City or by a department, board, agency, or authority of the City. State of California registered warrants or treasury notes or bonds, including bonds payable solely out of the revenues from a revenue- producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state. Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the Commented: Added language clarifying that credit quality and portfolio percentage limitations only apply to securities that are issued by issuers other than the U.S. Treasury or U.S. Agencies. Commented: Removed the issuer rating requirement from the Authorized Investments to be consistent with AB 1770, legislation that became effective 1/1/19. 9 F-1 revenues from a revenue producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California. Bonds, notes, warrants, or other evidences of indebtedness of a local agency within California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. In addition, these securities must be rated in at least the “A” category or the equivalent by a NRSRO with maturities not exceeding five years from the date of trade settlement. No more than five percent (5%) of the City’s total portfolio shall be invested in any one municipal issuer. In addition, the aggregate investment in municipal bonds may not exceed thirty percent (30%) of the portfolio. g) Non-negotiable Certificates of Deposit and savings deposits with a maturity not exceeding two years from the date of trade settlement, in FDIC insured state or nationally chartered banks or savings banksthat qualify as a depository of public funds in the State of California as defined in California Government Code Section 53630.5. Deposits exceeding the FDIC insured amount shall be secured pursuant to California Government Code Section 53652. No one issuer shallexceed more than five percent (5%) of the portfolio, and investment in negotiable and nonnegotiable certificates of deposit shall be limited to thirty percent (30%) of the portfolio combined. h) Negotiable Certificates of Deposit only with a nationally or state- chartered bank, a savings association or a federal association (as defined by Section 5102 of the Financial Code), a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank whose senior long-term debt is rated in at least the “A” category, or the equivalent, or short-term debt is rated at least “A-1” or the equivalent by an NRSRO and having assets in excess of $10 billion, so as to ensure security and a large, well- established secondary market. Ease of subsequent marketability should befurther ascertained prior to initial investment by examining currently quoted bids by primary dealers and the acceptability of the issuer by these dealers. No one issuer shall exceed more than five percent (5%) of the portfolio, and maturity shall not exceed two years. Investment in negotiable and non- negotiable certificates of deposit shall be limited to thirty percent (30%) of the portfolio combined. 10 F-1 i) Prime Commercial Paper with a maturity not exceeding 270 days from the date of trade settlement that is rated “A-1”, or the equivalent, by an NRSRO. The entity that issues the commercial paper shall meet all of the following conditions in either sub- paragraph i. or sub-paragraph ii. below: i. The entity shall (1) be organized and operating in the United States as a general corporation, (2) have total assets in excess of $500,000,000 and (3) have debt other than commercial paper, if any, that is rated in at least the “A” category or theequivalent by an NRSRO. ii. The entity shall (1) be organized within the United States as a special purpose corporation, trust, or limited liability company, (2) have program wide credit enhancements, including, but not limited to, over collateralization, letters of credit or surety bond and (3) have commercial paper that is rated at least “A-1” or the equivalent, by an NRSRO. iii. No more than five percent (5%) of the City’s total portfolio shall be invested in the commercial paper of any one issuer, and the aggregate investment in commercial paper shall not exceed twenty-five percent (25%) of the City’s total portfolio. j) Eligible Banker’s Acceptances with a maturity not exceeding 180 days from the date of trade settlement, drawn on and accepted by a commercial bank whose senior long-term debt is rated in at least the “A” category or the equivalent by an NRSRO at the time of purchase. Banker’s Acceptances shall be rated at least “A-1”, or the equivalent at the time of purchase by an NRSRO. If the bank has senior debt outstanding, it must be rated in at least the “A” category or theequivalent by an NRSRO. The aggregate investment in banker’s acceptances shall not exceed forty percent (40%) of the City’s total portfolio, and no more than five percent (5%) of the City’s total portfolio shall be invested in banker’s acceptances of any one bank. k) Repurchase Agreements and Reverse Repurchase Agreements with a final termination date not exceeding 30 days collateralized by U.S. Treasury obligations or Federal Instrumentality securities listed in items 1 and 2 above with the maturity of the collateral not exceeding ten years. For the purpose of this section, the term collateral shall mean purchased securities under the terms of the City’s approved 11 F-1 Master Repurchase Agreement. The purchased securities shall have a minimum market value including accrued interest of one hundred and two percent (102%) of the dollar value of the funds borrowed. Collateral shall be held in the City's custodian bank, as safekeeping agent, and the market value of the collateral securities shall be marked-to-the-market daily. Repurchase Agreements and Reverse Repurchase Agreements shall be entered into only with broker/dealers and who are recognized as Primary Dealers with the Federal Reserve Bank of New York, or with firms that have a Primary Dealer within their holding company structure. Primary Dealers approved as Repurchase Agreement counterparties shall have a short-term credit rating of at least “A-1” or the equivalent and a long-term credit rating of at least “A” or the equivalent. Repurchase agreement counterparties shall execute a City approved Master Repurchase Agreement with the City. The Finance Director shall maintain a copy of the City's approved Master Repurchase Agreement and a list of the broker/dealers who have executed same. In addition, the City must own assets for more than 30 days before they can be used as collateral for a reverse repurchase agreement. No more than ten percent (10%) of the portfolio can be involved in reverse repurchase agreements. l) State of California’s Local Agency Investment Fund (LAIF), pursuant to California Government Code Section 16429.1. m) County Investment Funds: Los Angeles County provides a service similar to LAIF for municipal and other government entities outside of Los Angeles County, including the City. Investment in this pool is intended to be used as a temporary repository for short-term funds used for liquidity purposes. The Finance Director shall maintain on file appropriate information concerning the county pool’s current investment policies, practices, and performance, as well as its requirements for participation, including, but not limited to, limitations on deposits or withdrawals and the composition of theportfolio. At no time shall more than five percent (5%) of the City’s total investment portfolio be placed in this pool. n) Mutual Funds and Money Market Mutual Funds registered under the Investment Company Act of 1940, provided that: 12 F-1 i. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria: 1) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs;or 2) Have retained an investment adviser registered or exempt from registration with the Securities and ExchangeCommission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million. 3) No more than 10% of the total portfolio may be invested in shares of any one mutual fund. ii. MONEY MARKET MUTUAL FUNDS registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria: 1) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or 2) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million. 3) No more than 20% of the total portfolio may be invested in Money Market Mutual Funds. iii. No more than 20% of the total portfolio may be invested in these securities. 13 F-1 o) Supranationals which are United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), or Inter-American Development Bank (IADB), with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments under this paragraphshall be rated in the "AA" category, its equivalent, or better by at least one NRSRO. No more than ten percent (10%) of the City’s total portfolio shall beinvested in any one issuer of supranational obligations. Purchases of supranational obligations shall not exceed twenty percent (20%) of the investment portfolio of the City. 2.Investments Specifically Not Permitted Any security type or structure not specifically approved by this policy is hereby prohibited. Security types, which are thereby prohibited include, but are not limited to: “exotic” derivative structures such as range notes, dual index notes, inverse floating rate notes, leveraged or de-leveraged floating rate notes, interest only strips that are derived from a pool ofmortgages and any security that could result in zero interest accrual if held to maturity, or any other complex variable or structured note with an unusually high degree of volatility risk. The City shall not invest funds with the Orange County Pool. 3.Exceptions to Prohibited and Restricted InvestmentsThe City shall not be required to sell securities prohibited or restricted inthis policy, or any future policies, or prohibited or restricted by new State regulations, if purchased prior to their prohibition and/or restriction. Insofar as these securities provided no notable credit risk to the City, holding of these securities until maturity is approved. At maturity or liquidation, such monies shall be reinvested as provided by this policy. 14 F-1 H.INVESTMENT PARAMETERS1.Diversification The City shall diversify its investments to avoid incurring unreasonable risks inherent in over-investing in specific instruments, individual financial institutions or maturities. As such, no more than five percent (5%) of the City’s portfolio may be invested in the instruments of any one issuer, except governmental issuers, supranationals, investment pools, mutual funds andmoney market funds, or unless otherwise specified in this investment policy. This restriction does not apply to any type of Federal Instrumentality or Federal Agency Security listed in Sections G1 b and G1 c above. Nevertheless, the asset allocation in the investment portfolio should beflexible depending upon the outlook for the economy, the securities markets and the City’s anticipated cash flow needs. 2.Maximum Maturities To the extent possible, investments shall be matched with anticipated cash flow requirements and known future liabilities. The City will not invest in securities maturing more than five years from the date of trade settlement, unless the City Council has by resolution granted authority to make suchan investment at least three months prior to the date of investment. 3.Credit Quality The City shall not purchase any security rated “A1” and / or “A+” or below if that security has been placed on “credit watch” for a possible downgrade by an NRSRO. Each investment manager will monitor the credit quality of the securities in their respective portfolio. In the event a security held by the City is the subject of a rating downgrade which brings it below accepted minimums specified herein, or the security is placed on negative credit watch, where downgrade could result in a rate drop below acceptable levels, the investment advisor who purchased the security will immediately notify the Finance Director. The City shall not be required to immediately sell such securities. The course of action to be followed will then be decided on a case by case basis, considering such factors as the reason for the rate drop, prognosis for recovery or further drop, and market price of the security. The City Council will be advised of the situation and intended course of action. 4.Competitive Transactions Investment advisors shall make best effort to price investment transactionson a competitive basis with broker/dealers selected consistent with their practices disclosed in form ADV 2A filed with the SEC. Where possible, at Commented: Included language to reduce the risk of contradictory language in the policy. Commented: Recommend removing the requirement restricting the purchase of securities on negative credit watch if they are rated A1 and/or A + or below to be more consistent with California Government Code Section 53601(k). 15 F-1 least three broker/dealers shall be contacted for each transaction and their bid or offering prices shall be recorded. If there is no other readily available competitive offering, the investment advisor shall make their best efforts to document quotations for comparable or alternative securities. If qualitative characteristics of a transaction, including, but not limited to, complexity of the transaction, or sector expertise of the broker, prevent a competitive selection process, investment advisors shall use brokerage selection practices as described above. I.PORTFOLIO PERFORMANCEThe investment portfolio shall be designed to attain a market rate of return throughout budgetary and economic cycles, taking into account prevailing market conditions, risk constraints for eligible securities, and cash flow requirements. The performance of the City’s investments shall be compared to the total return of a benchmark that most closely corresponds to the portfolio’s duration, universe of allowable securities, risk profile, and other relevant characteristics. When comparing the performance of the City’s portfolio, its rate of return will be computed consistent with Global Investment Performance Standards (GIPS). J.REPORTINGMonthly, the Finance Director shall produce a treasury report of the investment portfolio balances, transactions, risk characteristics, earnings, and performance results of the City’s investment portfolio available to City Council and the public on the City’s Website. The report shall include the following information: 1.Investment type, issuer, date of maturity, par value and dollar amount invested in all securities, and investments and monies held by the City; 2.A description of the funds, investments and programs;3.A market value as of the date of the report (or the most recent valuation as to assets not valued monthly) and the source of the valuation; 4.A statement of compliance with this Policy or an explanation for non- compliance K.INVESTMENT POLICY COMPLIANCE AND ADOPTION 1.ComplianceAny deviation from the policy shall be reported to Finance Committee assoon as practical, but no later than the next scheduled Finance Committee meeting. Upon recommendation of the Finance Committee, the Finance Director shall review deviations from policy with the City Council. 2.AdoptionThe Finance Director shall review the Investment Policy with the Finance Committee at least annually to ensure its consistency with the overall 16 F-1 objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends. The Finance Director shall review the Investment Policy with City Council at a public meeting if there are changes recommended to the Investment Policy. This Policy was endorsed and adopted by the City Council of the City of Newport Beach on September 8, 2015. It replaces any previous investment policy or investment procedures of the City. Adopted – April 6, 1959 Amended – November 9, 1970 Amended – February 11, 1974 Amended – February 9, 1981 Amended – October 27, 1986 Rewritten – October 22, 1990 Amended – January 28, 1991 Amended – January 24, 1994 Amended – January 9, 1995 Amended – April 22, 1996 Corrected – January 27, 1997 Amended – February 24, 1997 Amended – May 26, 1998 Reaffirmed – March 22, 1999 Reaffirmed – March 14, 2000 Amended & Reaffirmed – May 8, 2001 Amended & Reaffirmed – April 23, 2002 Amended & Reaffirmed – April 8, 2003 Amended & Reaffirmed – April 13, 2004 Amended & Reaffirmed – September 13, 2005 Amended – August 11, 2009 Amended & Reaffirmed – August 10, 2010 Amended & Reaffirmed – September 28, 2010 Reaffirmed – June 28, 2011 Amended & Reaffirmed – October 9, 2012 Amended – August 13, 2013 Amended – September 8, 2015 Amended – March 28, 2017 17 F-1 Glossary of Investment Terms AGENCIES. Shorthand market terminology for any obligation issued by a government- sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are: FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds. FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market. FHLB issues discount notes and bonds. FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “FreddieMac” issues discount notes, bonds and mortgage pass-through securities. FNMA. Like FHLB and FreddieMac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “FannieMae,” issues discount notes, bonds and mortgage pass- through securities. GNMA. The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government. PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government. TVA. The Tennessee Valley Authority provides flood control and power and promotes development in portions of the Tennessee, Ohio, and Mississippi River valleys. TVA currently issues discount notes and bonds. ASKED. The price at which a seller offers to sell a security. ASSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit. AVERAGE LIFE. In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected. BANKER’S ACCEPTANCE. A money market instrument created to facilitate international trade transactions. It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor. BENCHMARK. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy. BID. The price at which a buyer offers to buy a security. BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from his own position. CALLABLE. A callable security gives the issuer the option to call it from the investor prior to its maturity. The main cause of a call is a decline in interest rates. If interest rates decline since an issuer issues securities, it will likely call its current securities and reissue them at a lower rate of interest. Callable securities have reinvestment risk as 18 F-1 the investor may receive its principal back when interest rates are lower than when the investment was initially made. CERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate. Large denomination CDs may be marketable. CERTIFICATE OF DEPOSIT ACCOUNT REGISTRY SYSTEM (CDARS). A private placement service that allows local agencies to purchase more than $250,000 in CDs from a single financial institution (must be a participating institution of CDARS) while still maintaining FDIC insurance coverage. CDARS is currently the only entity providing this service. CDARS facilitates the trading of deposits between the California institution and other participating institutions in amounts that are less than $250,000 each, so that FDIC coverage is maintained. COLLATERAL. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies. COLLATERALIZED MORTGAGE OBLIGATIONS (CMO). Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities. COMMERCIAL PAPER. The short-term unsecured debt of corporations. COST YIELD. The annual income from an investment divided by the purchase cost. Because it does not give effect to premiums and discounts which may have been included in the purchase cost, it is an incomplete measure of return. COUPON. The rate of return at which interest is paid on a bond. CREDIT RISK. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer. CURRENT YIELD. The annual income from an investment divided by the current market value. Since the mathematical calculation relies on the current market value rather than the investor’s cost, current yield is unrelated to the actual return the investor will earn if the security is held to maturity. DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for his own position. DEBENTURE. A bond secured only by the general credit of the issuer. DELIVERY VS. PAYMENT (DVP). A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent. DERIVATIVE. Any security that has principal and/or interest payments which are subject to uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any security which represents a component of another security which has been separated from other components (“Stripped” coupons and principal). A derivative is also defined as a financial instrument the value of which is totally or partially derived from the value of another instrument, interest rate, or index. DISCOUNT. The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short-term securities, such as T-bills and banker’s acceptances, are known as discount securities. They sell at a discount from par, and return the par value to the investor at maturity without additional interest. Other 19 F-1 securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality. DIVERSIFICATION. Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk. DURATION. The weighted average time to maturity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a bond to changes in interest rates. (See modified duration). FEDERAL FUNDS RATE. The rate of interest charged by banks for short-term loans to other banks. The Federal Reserve Bank through open-market operations establishes it. FEDERAL OPEN MARKET COMMITTEE. A committee of the Federal Reserve Board that establishes monetary policy and executes it through temporary and permanent changes to the supply of bank reserves. LEVERAGE. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing. LIQUIDITY. The speed and ease with which an asset can be converted to cash. LOCAL AGENCY INVESTMENT FUND (LAIF). A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State Treasurer’s Office. LOCAL GOVERNMENT INVESTMENT POOL. Investment pools that range from the State Treasurer’s Office Local Agency Investment Fund (LAIF) to county pools, to Joint Powers Authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market mutual funds. MAKE WHOLE CALL. A type of call provision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or "made whole." MARGIN. The difference between the market value of a security and the loan a broker makes using that security as collateral. MARKET RISK. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates. MARKET VALUE. The price at which a security can be traded. MARKING TO MARKET. The process of posting current market values for securities in a portfolio. MATURITY. The final date upon which the principal of a security becomes due and payable. MEDIUM TERM NOTES. Unsecured, investment-grade senior debt securities of major corporations which are sold in relatively small amounts on either a continuous or an intermittent basis. MTNs are highly flexible debt instruments that can be structured to respond to market opportunities or to investor preferences. MODIFIED DURATION. The percent change in price for a 100 basis point change in yields. Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk. MONEY MARKET. The market in which short-term debt instruments (T-bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded. 20 F-1 MORTGAGE PASS-THROUGH SECURITIES. A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security. MUNICIPAL SECURITIES. Securities issued by state and local agencies to finance capital and operating expenses. MUTUAL FUND. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio. NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO). A credit rating agency that the Securities and Exchange Commission in the United States uses for regulatory purposes. Credit rating agencies provide assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody's. NEGOTIABLE CD. A short-term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or state-licensed branch of a foreign bank. Negotiable CDs are traded in a secondary market. PREMIUM. The difference between the par value of a bond and the cost of the bond, when the cost is above par. PREPAYMENT SPEED. A measure of how quickly principal is repaid to investors in mortgage securities. PREPAYMENT WINDOW. The time period over which principal repayments will be received on mortgage securities at a specified prepayment speed. PRIMARY DEALER. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U.S. Government securities market. PRUDENT PERSON (PRUDENT INVESTOR) RULE. A standard of responsibility which applies to fiduciaries. In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.” REALIZED YIELD. The change in value of the portfolio due to interest received and interest earned and realized gains and losses. It does not give effect to changes in market value on securities, which have not been sold from the portfolio. REGIONAL DEALER. A financial intermediary that buys and sells securities for the benefit of its customers without maintaining substantial inventories of securities and that is not a primary dealer. REPURCHASE AGREEMENT. Short-term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, 21 F-1 the same transaction is a reverse repurchase agreement. SAFEKEEPING. A service to bank customers whereby securities are held by the bank in the customer’s name. STRUCTURED NOTE. A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate. Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements. SUPRANATIONAL. A Supranational is a multi-national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries. TOTAL RATE OF RETURN. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio. U.S. TREASURY OBLIGATIONS. Securities issued by the U.S. Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk, and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds. TREASURY BILLS. All securities issued with initial maturities of one year or less are issued as discounted instruments, and are called Treasury bills. The Treasury currently issues three- and six-month T-bills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows. TREASURY NOTES. All securities issued with initial maturities of two to ten years are called Treasury notes, and pay interest semi-annually. TREASURY BONDS. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually. VOLATILITY. The rate at which security prices change with changes in general economic conditions or the general level of interest rates. YIELD TO MATURITY. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost. CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5C November 14, 2019 TO: HONORABLE CHAIR AND MEMBERS OF THE COMMITTEE FROM: Finance Department Dan Matusiewicz, Finance Director 949-644-3123 or danm@newportbeachca.gov SUBJECT: INVESTMENT PERFORMANCE REVIEW EXECUTIVE SUMMARY This memorandum provides an overview of the structure and the performance of the City’s investment portfolio. As guided by the City’s investment policy objectives, the City strives to maintain a portfolio emphasizing safety and liquidity while earning a market rate of return commensurate with the City’s risk tolerance and investment restrictions imposed by the California Government Code. The City has complied with all the limiting parameters of both the California Government Code and the City’s Investment Policy Statement while earning a rate of return comparable to the City’s established benchmarks, the Intercontinental Exchange Bank of America Merrill Lynch (ICE BAML) 1-3 Year US Treasuries Index and the ICE BAML 1-3 Year US Corporate / Government Rated AAA-A Index. DISCUSSION Investment Portfolio Overview The City’s strategy continues to focus on identifying value from high quality, marketable securities among the full range of investment options, ensuring the portfolio continues to be well diversified. As of June 30, 2019, the City’s entire investment portfolio totaled over $290 million. These investments are pooled assets of the City Newport Beach, which includes the general fund, special revenue funds, internal service funds, enterprise funds (i.e., water and wastewater), as well as various other funds. Investment Performance Review November 14, 2019 Page 2 Liquidity Portfolios The City uses a number of accounts and carve-out portfolios to accomplish its investment objectives. For liquidity, the City uses a combination of demand deposit accounts (DDA), the Local Agency Investment Fund (LAIF), and a targeted-maturities portfolio to provide sufficient liquidity to meet its day-to-day cash flows. Municipal deposits in DDAs are 110 percent collateralized by bank assets, and the City receives a compensating balance credit that can only be used to offset banking fees but does not produce income beyond bank fees. The average compensating balance credit for fiscal year ended June 30, 2019, amounted to approximately 0.6%, while LAIF produced an income return of approximately 2.4% during the fiscal year. Because of the current disparity in earnings potential between our DDA accounts and LAIF, only the bare minimums are maintained in the DDA accounts. Funds that are needed to meet specific cash flows needs but can be invested at a rate higher than LAIF are accounted for in our targeted-maturities portfolio. As of June 30, 2019, this targeted-maturities portfolio held about $35 million in securities and provided an income return for the fiscal year of approximately 2.5%. Yield-to-maturity at cost, a forward-looking measure, was about 2.7%. Short-Term Portfolio The City’s core investment portfolio of almost $217 million is actively managed in accordance with the California Government Code and the City’s investment policy. The investments are held by a custody bank and are registered in the City’s name. The City accounts for and monitors the portfolio independently of the investment advisors, by a direct feed from the custody bank and the use of third party analytical software. The City’s core portfolio finished the twelve months ending June 30, 2019, with an income return of 2.0%. Performance Benchmarking The City’s investment policy statement identifies the City investment objectives. The objectives are to preserve principal and liquidity while earning a market rate of return commensurate with the City’s investment risk tolerance, liquidity needs, and significant constraints imposed by the California Government Code 53601 as to the type and quantity of securities that may be purchased by local agencies. “Total return” is the accepted industry standard measure for comparing portfolio performance to established benchmarks. Total return benchmarks provide valuable information to those charged with governance of the investment portfolio by: • Communicating a transparent risk profile and related investment strategy; • Managing expectations of risk and return; and • Providing relative variances that can be used to identify decisions made regarding portfolio durations, sector weighting, credit quality and maturity structure. Investment Performance Review November 14, 2019 Page 3 The City uses total return to measure performance and risk against its benchmarks. Total return is made up of both income return and unrealized gains and losses due to changing interest rate environments. The market value of bonds moves inversely to the direction of interest rates. As interest rates decrease, the market value of bonds held in the portfolio increases because they are paying a higher interest rate than comparable bonds in the market. As illustrated in the chart below, the City’s income return was about 2.0%. As interest rates trended downward, price return turned positive lifting the total return up to about 4.1% even though the unrealized gains were not realized. The core portfolio currently follows an ultra-short-term bond strategy. This portfolio aims to find value and maximize yield within the high quality fixed income market within the duration range of the City’s strategic benchmarks. The City uses the ICE BAML 1-3 Year US Treasuries Index as one benchmark. The City also uses a second benchmark, the ICE BAML 1-3 Year U.S. Corporate / Government Rated AAA-A Index, which is more reflective of the portfolio’s risk and return characteristics. The use of two benchmarks provides a means to evaluate the added value that high quality corporate bonds bring to the portfolio. 0.090% 0.422% 0.395%0.481% 0.784% 1.484% 1.905% 2.085% 2.713% 2.916% 3.596% 4.141% 0.148%0.300% 0.456% 0.618% 0.777% 0.946% 1.121% 1.293% 1.471% 1.649% 1.831% 2.014% -0.058% 0.122% -0.060%-0.137% 0.007% 0.538% 0.784%0.792% 1.243%1.267% 1.765% 2.127% -0.50% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% July August September October November December January February March April May June Total Return Income Return Price Return Investment Performance Review November 14, 2019 Page 4 As demonstrated in the table below, the City’s investment portfolio was positioned shorter in duration than its benchmarks and outperformed the ICE BAML 1-3 Year US Treasuries Index by 17.9 basis points (bps). During the fiscal year, a shorter duration likely provided better income returns as Treasury yields on shorter durations exceeded those of longer durations during the fiscal year. Total return on the portfolio for FY 2017-18 and FY 2018-19 went from 0.5% to 4.1%. Most of this change is attributable to the portfolio’s price return increasing from (1.1%) to 2.1%. Seemingly dramatic, this price appreciation is expected given the corresponding interest rate environments. Illustrating the interest rate environments, below is a chart of two-year Treasuries yields. Fiscal Year 2017-18 witnessed a steady increase in interest rates. Because bond prices move inversely to interest rates, a negative price return is expected for FY 2017-18. Conversely, FY 2018-19 experienced decreasing interest rates and a corresponding positive price return. Contributing to the interest rate environment Investment Performance Review November 14, 2019 Page 5 change between the two fiscal years were concerns about foreign countries and their impact on the United States of America. Nominal Yields on Two Year Treasuries from July 2017 through June 2019 (Source: U.S. Department of the Treasury) Fiscal Year 2017-18 saw growth in foreign and domestic economies, and interest rates. During the fiscal year, the Federal Reserve raised the federal funds target rate range three times, December 2017, March 2018, and June 2018. Jerome Powell, chair of the Federal Reserve, in a June 2018 press conference noted, “Fiscal policy is boosting the economy, ongoing job gains are raising incomes and confidence, foreign economies continue to expand, and overall financial conditions remain accommodative.” Subsequently, uncertainties and concerns about foreign economies came to the forefront, leading to the Federal Reserve deciding to reduce the federal funds target rate range on July 2019. Chair Powell noted during a July 2019 press conference that the rate reduction was “intended to insure against downside risks from weak global growth and trade policy uncertainty, to help offset the effects these factors are currently having on the economy, and to promote a faster return of inflation to our symmetric 2 percent objective.” If a decreasing interest rate environment persists, the City’s portfolio will earn less interest income but more unrealized gains. PORTFOLIO CHARACTERISTICS LOOKING FORWARD While total return is an excellent benchmarking measure it does not always provide intuitive information regarding what the portfolio is earning on a cash basis since the total return measure assumes all unrealized gains and losses are ultimately realized at a particular date. This difference is especially magnified in a changing interest rate environment and when the duration of the portfolio is longer than the benchmark. Investment Performance Review November 14, 2019 Page 6 As of June 30, 2019, the City’s net unrealized gains on the short-term investment portfolio were approximately $2.1 million. Overall, this is neutral news. The City will be earning lower bond yields as maturing investments and earnings are reinvested. The short-term portfolio’s yield to maturity (YTM) at market value at June 30, 2019, ticked down to about 2.0% from 2.6% from a year earlier. The upside is the City will have more latitude in its cash flow forecasting. Liquidating securities prior to their maturity date may result in realized gains that would otherwise have been unrealized by holding a security to maturity. That is not to say that the City automatically sells securities when unrealized gains arise. The City deploys an active investment strategy. Before investments are sold, various factors are considered, such as the difference in yield between the market and the City’s portfolio. This is the primary difference between an active versus a passive investment strategy, which simply follows the attributes of a given benchmark. Currently, the City’s strategies have served the City well in the current economic environment. Prepared by: Submitted by: /s/Jeremiah Lim /s/Dan Matusiewicz Jeremiah Lim Dan Matusiewicz Accountant Finance Director Attachments: A. Financial Markets Overview B. Treasury Report – Month Ended June 30, 2019 ATTACHMENT A FINANCIAL MARKETS OVERVIEW Financial Markets Overview Fiscal year 2018-19 saw the trajectory of interest rates change. July 2018 began with two-year Treasuries yielding 2.57%. Gradually increasing rates saw yields on two-year Treasuries reach 2.98% early in November 2018. Two-year Treasuries yields then reversed course, ending the fiscal year at 1.75%, about a 40% decline from November 2018’s high. Declines continued after the fiscal year’s end, with two-year Treasuries yielding 1.63% at the end of September 2019. Nominal Yields on Two Year Treasuries (Source: U.S. Department of the Treasury) Eventually, the federal funds rate range followed a similar trend. July 2018 began with a federal funds rate range of 1.75% - 2.00%. September and December 2018 each had a 0.25% increase to the federal funds rate range, bringing the range to 2.25% - 2.50%, where it stayed for the rest of fiscal year 2018-19. Subsequently, decreases of 0.25% were implemented in both August and September 2019, resulting in a federal funds rate range of 1.75% - 2.00% at the end of September 2019. Press conference comments during September 2019 by Jerome Powell, chair of the Federal Reserve, explained the reasons for September’s rate reduction. Chair Powell noted, “weakness in global growth and trade policy uncertainty have weighed on the economy and pose ongoing risks. These factors, in conjunction with muted inflation pressures, have led us to shift our views about appropriate monetary policy over time toward a lower path for the federal funds rate…” America’s job market, in contrast to the rest of the world, has a positive outlook, according to Chair Powell, who during the same press conference said, “The job market remains strong. The unemployment rate has been near half-century lows for a year and a half, and job gains have remained solid in recent months. The pace of job gains has eased this year, but we had expected some slowing after last year’s strong pace. Participation in the labor force by people in their prime working years has been increasing… We expect the job market to remain strong. The median of participants’ projections for the unemployment rate remains below 4 percent over the next several years.” Information from the Bureau of Economic Analysis and the Bureau of Labor Statistics both illustrate a strong American job market. The Bureau of Economic Analysis (BEA) released new estimates of gross domestic product (GDP) toward the end of September 2019. BEA’s “third” estimate is that in the second calendar quarter real GDP grew at 2.0 percent annualized. Growth in the second quarter came from consumer and government spending. Two percent reflects slower growth compared to the first calendar quarter, for which BEA estimated real GDP grew at 3.1 percent annualized. Percent Change of Real GDP from Preceding Calendar Quarter (Source: U.S. Bureau of Economic Analysis) (Seasonally adjusted annualized rates) The Bureau of Labor Statistics (BLS) released September 2019’s employment data in October. The unemployment rate decreased to 3.5 percent in September. Total non- farm payroll employment increased by 136,000 in September. Employment increases were noted in health care, services, government, and transportation. Accompanying September’s job gains was a 2.9 percent increase in hourly pay over the previous 12 months. BLS also revised the increases in total non-farm payroll employment for both July and August. July’s increase was changed from 159,000 to 166,000. August’s increase was updated from 130,000 to 168,000. Seasonally Adjusted Unemployment Rate (Source: U.S. Bureau of Labor Statistics) Seasonally Adjusted Monthly Change of Non-Farm Payroll (Source: U.S. Bureau of Labor Statistics) ATTACHMENT B TREASURY REPORT – MONTH ENDED JUNE 30, 2019 CI T Y O F Ne w p o r t B e a c h Am o r t i z e d U n r e a l i z e d M a r k e t A c c r ue d M a r k e t V a l u e % Y T M @ Y T M @ Op e r a t i n g P o r t f o l i o s Co s t G a i n s / ( L o s s ) V a l u e I n t e r e s t P l u s A c c r u e d T o t a l C o s t M a r k e t N o t e s Li q u i d i t y P o r t f o l i o De m a n d D e p o s i t A c c o u n t s 1 2 , 7 8 0 , 7 4 3 $ - $ 1 2 , 7 8 0 , 7 4 3 $ - $ 1 2 , 7 8 0 , 7 4 3 $ 4 . 5 3 % 0 . 5 9 % 0 . 5 9 % ( 1 ) Lo c a l A g e n c y I n v e s t m e n t F u n d 1 6 , 3 5 0 , 0 7 0 - 1 6 , 3 5 0 , 0 7 0 - 1 6 , 3 5 0 , 0 7 0 5 . 7 9 % 2 . 5 7 % 2 . 4 4 % ( 2 ) Ta r g e t e d - M a t u r i t i e s P o r t f o l i o 3 5 , 3 0 8 , 6 4 7 2 6 , 8 3 1 3 5 , 3 3 5 , 4 7 7 1 8 9 , 0 1 3 3 5 , 5 2 4 , 4 9 1 1 2 . 5 8 % 2 . 7 1 % 2 . 2 5 % Sh o r t - T e r m P o r t f o l i o Ca s h E q u i v a l e n t s 8 3 , 1 8 9 - 8 3 , 1 8 9 - 8 3 , 1 8 9 0 . 0 3 % 0 . 6 4 % 0 . 6 4 % Ma r k e t a b l e S e c u r i t i e s 2 1 4 , 6 0 1 , 6 2 3 2 , 1 0 0 , 0 5 8 2 1 6 , 7 0 1 , 6 8 0 9 8 8 , 4 2 4 2 1 7 , 6 9 0 , 1 0 4 7 7 . 0 8 % 2 . 1 6 % 2 . 0 1 % TO T A L O P E R A T I N G F U N D S 2 7 9 , 1 2 4 , 2 7 2 $ 2 , 1 2 6 , 8 8 9 $ 2 8 1 , 2 5 1 , 1 6 0 $ 1 , 1 7 7 , 4 3 7 $ 2 8 2 , 4 2 8 , 5 9 7 $ 1 0 0 . 0 0 % Bo n d F u n d P o r t f o l i o s 20 1 0 C i v i c C e n t e r C O P s 6 , 9 7 7 , 0 6 5 $ - $ 6 , 9 7 7 , 0 6 5 $ - $ 6 , 9 7 7 , 0 6 5 $ 7 7 . 3 0 % 1 . 9 7 % 1 . 9 7 % As s e s s m e n t D i s t r i c t s 2 , 0 4 8 , 4 4 5 2 0 7 2 , 0 4 8 , 6 5 2 4 6 3 2 , 0 4 9 , 1 1 5 2 2 . 7 0 % 1 . 8 4 % 1 . 8 0 % TO T A L B O N D F U N D S W I T H F I S C A L A G E N T 9 , 0 2 5 , 5 1 0 $ 2 0 7 $ 9 , 0 2 5 , 7 1 7 $ 4 6 3 $ 9 , 0 2 6 , 1 8 0 $ 1 0 0 . 0 0 % TO T A L C A S H & I N V E S T M E N T S 2 8 8 , 1 4 9 , 7 8 2 $ 2 , 1 2 7 , 0 9 5 $ 2 9 0 , 2 7 6 , 8 7 8 $ 1 , 1 7 7 , 9 0 0 $ 2 9 1 , 4 5 4 , 7 7 7 $ No t e s : (1 )        Yi e l d  of f s e t s  ba n k  fe e s (2 )        LA I F ' s  yi e l d  is  av a i l a b l e  qu a r t e r l y Po r t f o l i o s Ju n e 3 0 , 2 0 1 9 Fo r t h e M o n t h E n d e d TR E A S U R E R ' S R E P O R T 4% 6% 13 % < 1% 77 % Co m p o s i t i o n  of  Op e r a t i n g  Po r t f o l i o Ju n e  30 ,  20 1 9 De m a n d  De p o s i t Ac c o u n t s Lo c a l  Ag e n c y  In v e s t m e n t Fu n d Ta r g e t e d ‐Ma t u r i t i e s Po r t f o l i o Ca s h  Eq u i v a l e n t s Ma r k e t a b l e  Se c u r i t i e s 4% 11 % 11 % <1 % 74 % Co m p o s i t i o n  of  Op e r a t i n g  Portfolio Ju n e  30 ,  20 1 8 Demand  Deposit  Accounts Local  Agency  Investment Fund Targeted ‐Maturities Portfolio Cash  Equivalents Marketable  Securities CI T Y O F Ne w p o r t B e a c h Se c u r i t y T y p e P a r V a l u e O r i g i n a l C o s t Am o r t i z e d Co s t Un r e a l i z e d Ga i n / ( L o s s ) M a r k e t V a l u e Ac c r u e d In t e r e s t Ma r k e t V a l u e Pl u s A c c r u e d % of PortfolioYTM @ CostYTM @ Market Ca s h E q u i v a l e n t s - 8 3 , 1 8 9 8 3 , 1 8 9 - 8 3 , 1 8 9 - 8 3 , 1 8 9 0 . 0 4 % 0 . 6 4 % 0 . 6 4 % Ma r k e t a b l e S e c u r i t i e s Ag e n c y 9 7 , 6 0 5 , 0 0 0 9 7 , 5 8 0 , 3 5 2 9 7 , 7 0 8 , 7 6 0 1 , 0 4 0 , 8 2 6 9 8 , 7 4 9 , 5 8 6 4 0 4 , 3 8 1 9 9 , 1 5 3 , 9 6 8 4 5 . 5 5 % 2 . 0 1 % 1 . 9 6 % Co r p o r a t e N o t e s 5 1 , 3 6 0 , 0 0 0 5 1 , 3 2 4 , 9 7 6 5 1 , 2 7 4 , 3 2 6 6 6 5 , 8 4 1 5 1 , 9 4 0 , 1 6 7 3 4 1 , 5 2 7 5 2 , 2 8 1 , 6 9 4 2 3 . 9 6 % 2 . 5 9 % 2 . 1 9 % U. S . G o v e r n m e n t 4 2 , 2 4 5 , 0 0 0 4 1 , 5 4 3 , 4 9 0 4 1 , 7 8 3 , 7 7 2 3 6 2 , 7 9 8 4 2 , 1 4 6 , 5 7 1 1 3 4 , 7 5 0 4 2 , 2 8 1 , 3 2 1 1 9 . 4 4 % 1 . 9 7 % 1 . 8 2 % As s e t - B a c k e d S e c u r i t i e s 1 1 , 7 4 4 , 7 9 8 1 1 , 7 3 9 , 7 0 6 1 1 , 7 4 3 , 2 1 6 2 7 , 4 4 4 1 1 , 7 7 0 , 6 6 1 1 1 , 0 9 0 1 1 , 7 8 1 , 7 5 1 5 . 4 3 % 2 . 4 0 % 2 . 2 6 % Su p r a n a t i o n a l 8 , 0 0 0 , 0 0 0 8 , 0 0 6 , 3 6 3 8 , 0 0 1 , 5 7 7 ( 3 6 1 ) 8 , 0 0 1 , 2 1 5 4 2 , 3 3 7 8 , 0 4 3 , 5 5 2 3 . 6 9 % 1 . 8 9 % 1 . 9 8 % Ce r t i f i c a t e s o f D e p o s i t 4 , 0 9 0 , 0 0 0 4 , 0 8 9 , 3 2 7 4 , 0 8 9 , 9 7 0 3 , 5 1 0 4 , 0 9 3 , 4 8 0 5 4 , 3 3 8 4 , 1 4 7 , 8 1 8 1 . 8 9 % 2 . 3 6 % 2 . 3 6 % To t a l M a r k e t a b l e S e c u r i t i e s 21 5 , 0 4 4 , 7 9 8 2 1 4 , 2 8 4 , 2 1 5 2 1 4 , 6 0 1 , 6 2 3 2 , 1 0 0 , 0 5 8 2 1 6 , 7 0 1 , 6 8 0 9 8 8 , 4 2 4 2 1 7 , 6 9 0 , 1 0 4 99.96% 2 . 1 6 % 2 . 0 1 % GR A N D T O T A L ( M I P ) 2 1 5 , 0 4 4 , 7 9 8 2 1 4 , 3 6 7 , 4 0 4 2 1 4 , 6 8 4 , 8 1 2 2 , 1 0 0 , 0 5 8 2 1 6 , 7 8 4 , 8 7 0 9 8 8 , 4 2 4 2 1 7 , 7 7 3 , 2 9 3 1 0 0 . 0 0 % 2 . 1 6 % 2 . 0 1 % *P e r i o d s  gr e a t e r  th a n  on e  ye a r  ar e  an n u a l i z e d Sh o r t - T e r m P o r t f o l i o b y S e c u r i t y T y p e fo r t h e M o n t h E n d e d Ju n e 3 0 , 2 0 1 9 Pr i o r  Mo n t h C u r r e n t  Mo n t h Cu r r e n t  Fi s c a l  Ye a r to  Da t e Pr i o r  Fi s c a l  Ye a r T r a i l i n g  Year T r a i l i n g  3  Years* In c o m e  Re t u r n 0. 1 7 7 % 0 . 1 7 7 % 2 . 0 1 4 % 1 . 5 2 9 % 2 . 0 1 4 % 1 . 5 6 9 % Pr i c e  Re t u r n 0. 4 8 4 % 0 . 3 4 9 % 2 . 1 2 7 % ‐1. 0 6 9 % 2 . 1 2 7 % 0 . 0 6 7 % To t a l  Re t u r n  = In c o m e  Re t u r n  + Pr i c e  Re t u r n 0. 6 6 1 % 0 . 5 2 6 % 4 . 1 4 1 % 0 . 4 6 0 % 4 . 1 4 1 % 1 . 6 3 4 % 1 ‐3  yr  Tr e a s u r y  In d e x  To t a l  Re t u r n 0. 7 1 0 % 0 . 5 1 9 % 3 . 9 6 2 % 0 . 0 7 9 % 3 . 9 6 2 % 1 . 2 9 4 % 1 ‐3  yr  Go v . / C o r p  In d e x  To t a l  Re t u r n 0. 6 9 0 % 0 . 5 4 7 % 4 . 1 5 8 % 0 . 2 0 4 % 4 . 1 5 8 % 1 . 4 8 6 % ‐2. 0 0 0 % ‐1. 0 0 0 % 0. 0 0 0 % 1. 0 0 0 % 2. 0 0 0 % 3. 0 0 0 % 4. 0 0 0 % 5. 0 0 0 % R a t e   o f   R e t u r n Pe r f o r m a n c e  Hi s t o r y Cu m u l a t i v e R e t u r n s f r o m t h e B e g i n n i n g o f t h e T r a i l i n g Y e a r Pe r i o d B e g i n Pe r i o d E n d To t a l R e t u r n In c o m e R e t u r n Price Return 07 / 0 1 / 2 0 1 8 07 / 3 1 / 2 0 1 8 0.0 9 0 % 0. 1 4 8 % -0.058% 07 / 0 1 / 2 0 1 8 08 / 3 1 / 2 0 1 8 0.4 2 2 % 0. 3 0 0 % 0.122% 07 / 0 1 / 2 0 1 8 09 / 3 0 / 2 0 1 8 0.3 9 5 % 0. 4 5 6 % -0.060% 07 / 0 1 / 2 0 1 8 10 / 3 1 / 2 0 1 8 0.4 8 1 % 0. 6 1 8 % -0.137% 07 / 0 1 / 2 0 1 8 11 / 3 0 / 2 0 1 8 0.7 8 4 % 0. 7 7 7 % 0.007% 07 / 0 1 / 2 0 1 8 12 / 3 1 / 2 0 1 8 1.4 8 4 % 0. 9 4 6 % 0.538% 07 / 0 1 / 2 0 1 8 01 / 3 1 / 2 0 1 9 1.9 0 5 % 1. 1 2 1 % 0.784% 07 / 0 1 / 2 0 1 8 02 / 2 8 / 2 0 1 9 2.0 8 5 % 1. 2 9 3 % 0.792% 07 / 0 1 / 2 0 1 8 03 / 3 1 / 2 0 1 9 2.7 1 3 % 1. 4 7 1 % 1.243% 07 / 0 1 / 2 0 1 8 04 / 3 0 / 2 0 1 9 2.9 1 6 % 1. 6 4 9 % 1.267% 07 / 0 1 / 2 0 1 8 05 / 3 1 / 2 0 1 9 3.5 9 6 % 1. 8 3 1 % 1.765% 07 / 0 1 / 2 0 1 8 06 / 3 0 / 2 0 1 9 4.1 4 1 % 2. 0 1 4 % 2.127% 07 / 0 1 / 2 0 1 8 -- - -- - -- - --- Cu m u l a t i v e R e t u r n s f r o m t h e B e g i n n i n g o f t h e T r a i l i n g Y e a r Sh o r t - T e r m P o r t f o l i o ' s C u m u l a t i v e R e t u r n s D u r i n g T r a i l i n g Y e a r 07 / 0 1 / 2 0 1 8 - 0 6 / 3 0 / 2 0 1 9 In d e x : I C E B o f A M L U . S . T r e a s u r i e s 1 - 3 Y r s . In d e x C o m p a r i s o n S u m m a r y In d e x C o m p a r i s o n D u r a t i o n In d e x C o m p a r i s o n C r e d i t R a t i n g In d e x C o m p a r i s o n M a r k e t S e c t o r Co m p a r i s o n o f S h o r t - T e r m P o r t f o l i o w i t h 1 - 3 Y e a r U . S . Tr e a s u r i e s I n d e x 06 / 0 1 / 2 0 1 9 - 0 6 / 3 0 / 2 0 1 9 CI T Y O F Ne w p o r t B e a c h BO N D M A R K E T O V E R V I E W Fo r  th e  Mo n t h  En d e d   Ju n e 3 0 , 2 0 1 9   DI S C L A I M E R :    Th i s  re p o r t  is  pr o v i d e d  fo r  in f o r m a t i o n a l  pu r p o s e s  on l y  an d  sh o u l d  no t  be  co n s t r u e d  as  sp e c i f i c  in v e s t m e n t  or  le g a l  ad v i c e .  Th e  in f o r m a t i o n  co n t a i n e d  herein  was  obtained  from  sources   be l i e v e d  to  be  re l i a b l e  as  of  th e  da t e  of  pu b l i c a t i o n ,  bu t  ma y  be c o m e  ou t d a t e d  or  su p e r s e d e d  at  an y  ti m e  wi t h o u t  no t i c e .  Th i s  re p o r t  ma y  co n t a i n  fo r e c a s t s  an d  forward ‐looking  statements  which  are   in h e r e n t l y  li m i t e d  an d  sh o u l d  no t  be  re l i e d  up o n  as  an  in d i c a t o r  of  fu t u r e  re s u l t s .  Pa s t  pe r f o r m a n c e  is  no t  in d i c a t i v e  of  fu t u r e  re s u l t s .       Th e  Fe d e r a l  Op e n  Ma r k e t  Co m m i t t e e  (F O M C )  le f t  th e  ta r g e t  fe d e r a l  fu n d s  ra t e  ra n g e  at  2. 2 5 %  ‐   2. 5 0 % .    Pr e s i d e n t  Tr u m p  an n o u n c e d  th a t  th e  US  wi l l  no t  im p o s e  ad d i t i o n a l  ta r i f f s  on  Ch i n a  wh i l e  th e  tw o  co u n t r i e s  co n t i n u e  to  negotiate  trade  relations.   Pr e s i d e n t  Tr u m p  al s o  sa i d  th a t  Ch i n a  ag r e e d  to  re s u m e  pu r c h a s e s  of  Am e r i c a n  ag r i c u l t u r a l  pr o d u c t s  an d  ot h e r  go o d s .    U. S .  no n f a r m  pa y r o l l s  ro s e  by  22 4 , 0 0 0  in  Ju n e .    On  a  ye a r ‐ov e r ‐ye a r  ba s i s ,  wa g e s  we r e  up  3. 1 %  in  Ju n e .   Su m m a r y Ris k M e t r i c Va l u e Ca s h 59 , 5 1 0 . 0 8 MM F u n d 23 , 6 7 9 . 3 6 Fix e d I n c o m e 21 7 , 6 9 0 , 1 0 3 . 8 3 Du r a t i o n 1. 7 6 4 Co n v e x i t y 0. 0 5 3 WA L 1. 8 3 9 Ye a r s t o F i n a l M a t u r i t y 1. 9 3 1 Ye a r s t o E f f e c t i v e M a t u r i t y 1. 8 3 7 Yie l d 2. 0 1 2 Bo o k Y i e l d 2. 1 6 2 Av g C r e d i t R a t i n g AA / A a 2 / A A Cr e d i t R a t i n g Se c u r i t y T y p e Du r a t i o n Ma r k e t S e c t o r Is s u e r C o n c e n t r a t i o n Ri s k S u m m a r y o f S h o r t - T e r m P o r t f o l i o 06 / 0 1 / 2 0 1 9 - 0 6 / 3 0 / 2 0 1 9 CI T Y O F Ne w p o r t B e a c h St a t u s P o l i c y N a m e R u l e s C o m p l i a n t R u l e s V i o l a t i n g Rules Co m p l i a n t St a t e m e n t o f I n v e s t m e n t P o l i c y 2 9 2 9 0 St a t u s R u l e B a s i s R u l e R e q u i r e m e n t s R u l e L i m i t A ctual Co m p l i a n t Co n c e n t r a t i o n B a n k e r s A c c e p t a n c e C o n c e n t r a t i o n 4 0 . 0 0 % 0 . 0 0 % Co m p l i a n t Co n c e n t r a t i o n B a n k e r s A c c e p t a n c e s R a t e d B e l o w ( L T ) A / A 2 ( S T ) A - 1 / P - 1 0 . 0 0 % 0 . 0 0 % Co m p l i a n t Co n c e n t r a t i o n C D 3 0 . 0 0 % 6 . 0 4 % Co m p l i a n t Co n c e n t r a t i o n C o m m e r c i a l P a p e r 2 5 . 0 0 % 5 . 3 4 % Co m p l i a n t Co n c e n t r a t i o n C o r p R a t e d B e l o w A - / A 3 0 . 0 0 % 0 . 0 0 % Co m p l i a n t Co n c e n t r a t i o n C P a n d C D s R a t e d B e l o w A / A 2 o r A 1 / P 1 0 . 0 0 % 0 . 0 0 % Co m p l i a n t Co n c e n t r a t i o n I s s u e r C o n c en t r a t i o n E x c e p t f o r A g en c y , R e p o , F D I C 5 . 0 0 % 2 . 4 4 % Co m p l i a n t Co n c e n t r a t i o n M a x C o n c e n t r a t i o n o f C o r p s ( % ) 3 0 . 0 0 % 2 2 . 9 3 % Co m p l i a n t Co n c e n t r a t i o n M a x C o n c e n t r a t i o n o f F u n d s A s s e t s 1 0 . 0 0 % 0 . 0 0 % Co m p l i a n t Co n c e n t r a t i o n M a x C o n c e n t r a t i o n o f M B S a n d A B S 2 0 . 0 0 % 4 . 6 5 % Co m p l i a n t Co n c e n t r a t i o n M a x C o n c e n t r a t i o n o f M M F 2 0 . 0 0 % 0 . 0 3 % Co m p l i a n t Co n c e n t r a t i o n M a x C o n c e n t r a t i o n o f M u n i s ( % ) 3 0 . 0 0 % 0 . 0 0 % Co m p l i a n t Co n c e n t r a t i o n M a x C o n c e n t r a t i o n o f S u p r a n a t i o n a l s 2 0 . 0 0 % 3 . 1 8 % Co m p l i a n t Co n c e n t r a t i o n M a x I s s u e r C o n c e n t r a t io n o f C o r p o r a t e B o n d s ( % ) 5 . 0 0 % 1 . 5 1 % Co m p l i a n t Co n c e n t r a t i o n M a x I s s u e r C o n c e n t r a t i o n o f S u p r a n a t i o n a l s 1 0 . 0 0 % 1 . 2 5 % Co m p l i a n t Co n c e n t r a t i o n M i n i m u m C r e d i t R a t i n g f o r M B S o f A A A 0. 0 0 % 0 . 0 0 % Co m p l i a n t C o n c e n t r a t i o n M i n i m u m I s s u e r S i z e f o r C D ' s - I n B i l l i o n s 1 0 Unavailable (1) Co m p l i a n t C o n c e n t r a t i o n M i n i m u m I s s u er S i z e f o r C P ' s - I n M i l l i o n s 5 0 0 Unavailable (1) Co m p l i a n t Co n c e n t r a t i o n M i n i m u m R a t i n g f o r S u p r a n a t i o n a l S e c u r i t i e s A A 0. 0 0 % 0 . 0 0 % Co m p l i a n t Co n c e n t r a t i o n M u n i s R a t e d B e l o w A / A 2 0 . 0 0 % 0 . 0 0 % Co m p l i a n t Co n c e n t r a t i o n R e p o s 1 0 . 0 0 % 0 . 0 0 % Co m p l i a n t Co n c e n t r a t i o n S u p r a n a t i o n a l i s i n U S D 0 . 0 0 % 0 . 0 0 % Co m p l i a n t Ma t u r i t y M a x E f f e c t i v e M a t u r i t y f o r R e p o s ( i n Y e a r s ) 0 . 0 8 0 . 0 0 0 Co m p l i a n t Ma t u r i t y M a x F i n a l M a t u r i t y ( f ro m S e t t l e ) f o r M u n i s 5 . 0 0 0 . 0 0 0 Co m p l i a n t Ma t u r i t y M a x F i n a l M a t u r i t y f o r C P ( i n Y e a r s ) 0 . 7 4 0 . 7 1 3 Co m p l i a n t Ma t u r i t y M a x F i n a l M a t u r i t y F r o m S e t t l e D a t e ( i n Y e a r s ) 5 . 0 0 4 . 9 6 4 Co m p l i a n t Ma t u r i t y M a x F i n a l M a t u r i t y F r o m Se t t l e f o r C o r p E x c l C D 5 . 0 0 4 . 8 5 8 Co m p l i a n t Ma t u r i t y M a x M a t u r i t y C D 2 . 0 0 2 . 0 0 0 Co m p l i a n t Ma t u r i t y M a x M a t u r i t y o f B a n k e r s A c c e p t a n c e s 0 . 4 9 0 . 0 0 0 I v e r i f y t h a t t h i s i n v e s t m e n t p o r t f o l i o i s i n c o n f o r m i t y w i t h C a l i f o r n i a l a w s a n d t h e C i t y ' s I n v e s t m e n t P o l i c y . /S / D a n M a t u s i e w i c z Da n M a t u s i e w i c z Fi n a n c e D i r e c t o r (1 )  Th e  ci t y ' s  fi n a n c i a l  ad v i s o r s  ha v e  ve r i f i e d  co m p l i a n c e  ba s e d  on  th e  da t a  av a i l a b l e  to  th e m .    Th a t  da t a  ma y  be  fo r  a  month(s) prior  to  this  treasury  report. Sh o r t - T e r m & T a r g e t e d - M a t u r i t ie s P o r t f o l i o s C o m p l i a n c e S t a t u s fo r t h e M o n t h E n d e d Ju n e 3 0 , 2 0 1 9 CI T Y O F Ne w p o r t B e a c h Bo o k V a l u e 3 6 , 5 1 4 , 3 8 8 . 8 5 3 5 , 3 0 8 , 6 4 6 . 6 9 Ac c r u e d B a l a n c e 1 5 2 , 2 5 5 . 3 8 1 8 9 , 0 1 3 . 1 9 Bo o k V a l u e + A c c r u e d 3 6 , 6 6 6 , 6 4 4 . 2 3 3 5 , 4 9 7 , 6 5 9 . 8 9 Ne t U n r e a l i z e d G a i n / L o s s 2 1 , 3 5 2 . 0 0 2 6 , 8 3 0 . 7 5 Ma r k e t V a l u e + A c c r u e d 3 6 , 6 8 7 , 9 9 6 . 2 3 3 5 , 5 2 4 , 4 9 0 . 6 4 Be g i n D a t e 0 6 / 0 1 / 2 0 1 9 En d D a t e 0 6 / 3 0 / 2 0 1 9 Ne t A m o r t i z a t i o n / A c c r e t i o n I n c o m e 4 4 , 1 9 1 . 9 7 In t e r e s t I n c o m e 3 6 , 8 2 3 . 6 8 Di v i d e n d I n c o m e 0 . 0 0 Fo r e i g n T a x W i t h h e l d E x p e n s e 0 . 0 0 Mi s c I n c o m e 0 . 0 0 Al l o w a n c e E x p e n s e 0 . 0 0 In c o m e S u b t ot a l 3 6 , 8 2 3 . 6 8 Ne t R e a l i z e d G a i n / L o s s 0 . 0 0 Ne t H o l d i n g G a i n / L o s s 5 , 4 7 8 . 7 5 Im p a i r m e n t L o s s 0 . 0 0 Ne t G a i n / L o s s 5 , 4 7 8 . 7 5 Ex p e n s e 0 . 0 0 Ne t I n c o m e 8 6 , 4 9 4 . 4 1 Tr a n s f e r s I n / O u t ( 1 , 2 5 0 , 0 0 0 . 0 0 ) Ch a n g e i n U n r e a l i z e d G a i n / L o s s 0 . 0 0 05 / 3 1 / 2 0 1 9 0 6 / 3 0 / 2 0 1 9 Ta r g e t e d - M a t u r i t i e s P o r t f o l i o F i n a n c i a l s fo r t h e M o n t h E n d e d Ju n e 3 0 , 2 0 1 9 Ba l a n c e S h e e t In c o m e S t a t e m e n t CE Re c e i v a b l e ST Su m m a r y Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value CE CN B - C h a n d l e r U l t r a S h o r t - T e r m 38 1 4 1 W 3 1 5 GO L D M A N : F S T R S O A D M 40 , 4 8 9 . 8 2 40 , 4 8 9 . 8 2 US D MM F U N D CE -- - -- - -- - -- - 0.0 0 40,489.82 0.0040,489.82 CE CN B - C h a n d l e r U l t r a S h o r t - Te r m 38 1 4 1 W 3 1 5 GO L D M A N : F S T R S O A D M 40 , 4 8 9 . 8 2 40 , 4 8 9 . 8 2 US D MM F U N D CE -- - -- - -- - -- - 0. 0 0 40,489.82 0.0040,489.82 Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value Re c e i v a b l e CN B - C h a n d l e r U l t r a S h o r t - T e r m CC Y U S D Re c e i v a b l e 65 . 8 3 65 . 8 3 US D CA S H RC V -- - -- - -- - -- - 0.0 0 65.83 0.0065.83 Re c e i v a b l e CN B - C h a n d l e r U l t r a S h o r t - Te r m CC Y U S D Re c e i v a b l e 65 . 8 3 65 . 8 3 US D CA S H RC V -- - -- - -- - -- - 0. 0 0 65.83 0.0065.83 Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 06 0 5 1 G F N 4 BA N K O F A M E R I C A C O R P 3, 0 0 0 , 0 0 0 . 0 0 3, 0 0 0 , 0 0 0 . 0 0 US D CO R P ST 05 / 0 2 / 2 0 1 9 05 / 0 3 / 2 0 1 9 04 / 2 1 / 2 0 2 0 04 / 2 1 / 2 0 2 0 13 , 1 2 5 . 0 0 2,990,989.62 8,500.382,999,490.00 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 06 3 7 0 R S B 6 Ba n k o f M o n t r e a l , C h i c a g o B r a n c h 4, 0 0 0 , 0 0 0 . 0 0 4, 0 0 0 , 0 0 0 . 0 0 US D CD ST 12 / 1 9 / 2 0 1 8 12 / 1 9 / 2 0 1 8 10 / 0 1 / 2 0 1 9 10 / 0 1 / 2 0 1 9 62 , 5 1 1 . 1 1 4,000,000.00 5,664.404,005,664.40 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 21 6 8 7 B W 6 4 Co ö p e r a t i e v e R a b o b a n k U . A . , N e w Y o r k B r a n c h 5, 0 0 0 , 0 0 0 . 0 0 5, 0 0 0 , 0 0 0 . 0 0 US D CP ST 12 / 1 9 / 2 0 1 8 12 / 2 0 / 2 0 1 8 09 / 0 6 / 2 0 1 9 09 / 0 6 / 2 0 1 9 0.0 0 4,973,851.39 3,593.064,977,444.45 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 40 4 2 8 H P N 6 HS B C U S A I N C ( N E W ) 52 5 , 0 0 0 . 0 0 52 5 , 0 0 0 . 0 0 US D CO R P ST 05 / 2 2 / 2 0 1 9 05 / 2 4 / 2 0 1 9 11 / 1 3 / 2 0 1 9 11 / 1 3 / 2 0 1 9 1, 6 6 2 . 5 0 524,356.80 501.45524,858.25 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 46 6 2 5 H K A 7 JP M O R G A N C H A S E & C O 2, 2 5 0 , 0 0 0 . 0 0 2, 2 5 0 , 0 0 0 . 0 0 US D CO R P ST 05 / 1 6 / 2 0 1 9 05 / 2 0 / 2 0 1 9 01 / 2 3 / 2 0 2 0 01 / 2 3 / 2 0 2 0 22 , 2 1 8 . 7 5 2,245,082.44 4,220.062,249,302.50 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 62 4 7 9 M U 1 9 MU F G B a n k L t d . ( N e w Y o r k B r a n c h ) 3, 0 0 0 , 0 0 0 . 0 0 3, 0 0 0 , 0 0 0 . 0 0 US D CP ST 03 / 0 5 / 2 0 1 9 03 / 0 5 / 2 0 1 9 07 / 0 1 / 2 0 1 9 07 / 0 1 / 2 0 1 9 0.0 0 3,000,000.00 -592.502,999,407.50 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 62 4 7 9 M U N 1 MU F G B a n k L t d . ( N e w Y o r k B r a n c h ) 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CP ST 03 / 2 1 / 2 0 1 9 03 / 2 1 / 2 0 1 9 07 / 2 2 / 2 0 1 9 07 / 2 2 / 2 0 1 9 0.0 0 998,495.00 -75.00998,420.00 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 62 4 7 9 M W G 4 MU F G B a n k L t d . ( N e w Y o r k B r a n c h ) 45 0 , 0 0 0 . 0 0 45 0 , 0 0 0 . 0 0 US D CP ST 05 / 2 2 / 2 0 1 9 05 / 2 3 / 2 0 1 9 09 / 1 6 / 2 0 1 9 09 / 1 6 / 2 0 1 9 0.0 0 447,584.13 115.88447,700.00 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 78 0 1 2 U L W 3 Ro y a l B a n k o f C a n a d a N e w Y o r k B r a n c h 5, 0 0 0 , 0 0 0 . 0 0 5, 0 0 0 , 0 0 0 . 0 0 US D CD ST 01 / 2 9 / 2 0 1 9 01 / 2 9 / 2 0 1 9 08 / 0 1 / 2 0 1 9 08 / 0 1 / 2 0 1 9 57 , 1 6 2 . 5 0 5,000,000.00 1,178.755,001,178.75 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 89 1 1 4 M Q Z 3 To r o n t o - D o m i n i o n B a n k , N e w Y o r k B r a n c h 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D CD ST 12 / 1 9 / 2 0 1 8 12 / 1 9 / 2 0 1 8 09 / 1 9 / 2 0 1 9 09 / 1 9 / 2 0 1 9 32 , 3 3 3 . 3 3 2,000,000.00 2,796.882,002,796.88 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 89 2 3 3 H U 1 0 To y o t a M o t o r C r e d i t C o r p o r a t i o n 3, 0 0 0 , 0 0 0 . 0 0 3, 0 0 0 , 0 0 0 . 0 0 US D CP ST 12 / 1 9 / 2 0 1 8 12 / 1 9 / 2 0 1 8 07 / 0 1 / 2 0 1 9 07 / 0 1 / 2 0 1 9 0.0 0 3,000,000.00 -570.002,999,430.00 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 89 2 3 3 H W Q 3 To y o t a M o t o r C r e d i t C o r p o r a t i o n 1, 1 0 0 , 0 0 0 . 0 0 1, 1 0 0 , 0 0 0 . 0 0 US D CP ST 03 / 2 8 / 2 0 1 9 03 / 2 8 / 2 0 1 9 09 / 2 4 / 2 0 1 9 09 / 2 4 / 2 0 1 9 0.0 0 1,093,480.97 598.091,094,079.06 ST CN B - C h a n d l e r U l t r a S h o r t - T e r m 91 2 7 9 6 Q R 3 UN I T E D S T A T E S T R E A S U R Y 5, 0 0 0 , 0 0 0 . 0 0 5, 0 0 0 , 0 0 0 . 0 0 US D T- B I L L ST 01 / 2 9 / 2 0 1 9 01 / 3 0 / 2 0 1 9 07 / 1 8 / 2 0 1 9 07 / 1 8 / 2 0 1 9 0.0 0 4,994,250.69 899.314,995,150.00 ST CN B - C h a n d l e r U l t r a S h o r t - Te r m -- - -- - 35 , 3 2 5 , 0 0 0 . 0 0 35 , 3 2 5 , 0 0 0 . 0 0 US D -- - ST -- - -- - -- - -- - 18 9 , 0 1 3 . 1 9 35,268,091.04 26,830.7535,294,921.79 Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value -- -CN B - C h a n d l e r U l t r a S h o r t - Te r m -- - -- - 35 , 3 6 5 , 5 5 5 . 6 5 35 , 3 6 5 , 5 5 5 . 6 5 US D -- - -- - -- - -- - -- - -- - 18 9 , 0 1 3 . 1 9 35,308,646.69 26,830.7535,335,477.44 GA A P G L B a l a n c e S h e e t b y L o t ( T a r g e t e d - M a t u r i t i e s P o r t f o l i o ) As o f 0 6 / 3 0 / 2 0 1 9 * D o e s n o t L o c k D o w n . * S h o w i n g t r a n s a c t i o n s w i t h T r a d e D a t e w i t h i n s e l e c t e d d a t e r a n g e . * W e i g h t e d b y : A b s o l u t e V a l u e o f P r i n c i p a l . * M M F t r a n s a c t i o n s a r e c o l l a p s e d . * T h e T r a n s a c t i o n D e t a i l / T r a d i n g A c t i v i t y r e p o r t s p r o v i d e o u r m o s t u p - t o - d a t e t r a n s a c t i o n a l d e t a i l s . A s s u c h , t h e s e r e p o r t s a r e s u b j e c t t o c h a n g e e v e n a f t e r t h e o t h e r r e p o r t s o n t h e w e b s i t e h a v e b e e n l o c k e d d o w n . W h i l e t h e s e r e p o r t s c a n b e u s e f u l t o o l s i n u n d e r s t a n d i n g r e c e n t a c t i v i t y , du e t o t h e i r d y n a m i c n a t u r e w e d o n o t r e c o m m e n d u s i n g t h e m f o r b o o k i n g j o u r n a l e n t r i e s o r r e c o n c i l i a t i o n . Ac c o u n t Id e n t i f i e r D e s c r i p t i o n Cu r r e n t U n i t s C u r r e n c y T r a n s a c t i o n T y p e T r a d e D a t e S e t t l e D a t e F i n a l Ma t u r i t y Pr i c e Principal A c c r u e d I n t e r e s t Amount CN B - C h a n d l e r U l t r a Sh o r t - T e r m 38 1 4 1 W 3 1 5 G O L D M A N : F S T R S O A D M 35 7 . 4 0 U S D B u y 06 / 0 4 / 2 0 1 9 0 6 / 0 4 / 2 0 1 9 0 6 / 3 0 / 2 0 1 9 1 . 0 0 0 357.40 0.00 -357.40 CN B - C h a n d l e r U l t r a Sh o r t - T e r m 46 6 4 0 Q T K 7 J . P . M o r g a n S e c u r i t i e s L L C -1 , 2 5 0 , 0 0 0 . 0 0 U S D M a t u r i t y 06 / 1 9 / 2 0 1 9 0 6 / 1 9 / 2 0 1 9 0 6 / 1 9 / 2 0 1 9 1 0 0 . 0 0 0 - 1 , 2 5 0 , 0 0 0 . 0 0 0.00 1,250,000.00 CN B - C h a n d l e r U l t r a Sh o r t - T e r m -- - -- - -1 , 2 4 9 , 6 4 2 . 6 0 U S D - - - -- - -- - 06 / 1 9 / 2 0 1 9 -- - - 1 , 2 4 9 , 6 4 2 . 6 0 0.00 1,249,642.60 GA A P T r a d i n g A c t i v i t y ( T a r g e t e d - M a t u r i t i e s P o r t f o l i o ) 06 / 0 1 / 2 0 1 9 - 0 6 / 3 0 / 2 0 1 9 CI T Y O F Ne w p o r t B e a c h Bo o k V a l u e 2 1 4 , 1 2 8 , 2 8 4 . 7 4 2 1 4 , 6 8 4 , 8 1 2 . 0 0 Ac c r u e d B a l a n c e 1 , 1 6 1 , 4 2 6 . 6 7 9 8 8 , 4 2 3 . 5 0 Bo o k V a l u e + A c c r u e d 2 1 5 , 2 8 9 , 7 1 1 . 4 1 2 1 5 , 6 7 3 , 2 3 5 . 5 0 Ne t U n r e a l i z e d G a i n / L o s s 1 , 3 4 3 , 6 0 0 . 2 1 2 , 1 0 0 , 0 5 7 . 7 6 Ma r k e t V a l u e + A c c r u e d 2 1 6 , 6 3 3 , 3 1 1 . 6 2 2 1 7 , 7 7 3 , 2 9 3 . 2 7 Be g i n D a t e 0 6 / 0 1 / 2 0 1 9 En d D a t e 0 6 / 3 0 / 2 0 1 9 Ne t A m o r t i z a t i o n / A c c r e t i o n I n c o m e 1 8 , 7 2 6 . 6 5 In t e r e s t I n c o m e 3 6 4 , 7 9 7 . 4 5 Di v i d e n d I n c o m e 0 . 0 0 Fo r e i g n T a x W i t h h e l d E x p e n s e 0 . 0 0 Mi s c I n c o m e 0 . 0 0 Al l o w a n c e E x p e n s e 0 . 0 0 In c o m e S u b t ot a l 3 6 4 , 7 9 7 . 4 5 Ne t R e a l i z e d G a i n / L o s s ( 0 . 0 1 ) Ne t H o l d i n g G a i n / L o s s 7 5 6 , 4 5 7 . 5 5 Im p a i r m e n t L o s s 0 . 0 0 Ne t G a i n / L o s s 7 5 6 , 4 5 7 . 5 4 Ex p e n s e 0 . 0 0 Ne t I n c o m e 1 , 1 3 9 , 9 8 1 . 6 5 Tr a n s f e r s I n / O u t 0 . 0 0 Ch a n g e i n U n r e a l i z e d G a i n / L o s s 0 . 0 0 In c o m e S t a t e m e n t Sh o r t - T e r m P o r t f o l i o F i n a n c i a l s fo r t h e M o n t h E n d e d Ju n e 3 0 , 2 0 1 9 Ba l a n c e S h e e t 05 / 3 1 / 2 0 1 9 0 6 / 3 0 / 2 0 1 9 CE MSGe n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value CE CN B - C h a n d l e r 60 9 3 4 N 1 0 4 FE D E R A T E D G O V T O B L I N S T 23 , 5 4 7 . 0 3 23 , 5 4 7 . 0 3 US D MM F U N D CE 06 / 2 1 / 2 0 1 9 06 / 2 1 / 2 0 1 9 -- - -- - 0.0 0 23,547.03 0.0023,547.03 CE CN B - P F M 60 9 3 4 N 1 0 4 FE D E R A T E D G O V T O B L I N S T 13 2 . 3 3 13 2 . 3 3 US D MM F U N D CE -- - -- - -- - -- - 0.0 0 132.33 0.00132.33 CE CN B - C h a n d l e r CC Y U S D Re c e i v a b l e 59 , 5 0 9 . 8 4 59 , 5 0 9 . 8 4 US D CA S H RC V -- - -- - -- - -- - 0.0 0 59,509.84 0.0059,509.84 CE CN B - P F M CC Y U S D Re c e i v a b l e 0. 2 4 0. 2 4 US D CA S H RC V -- - -- - -- - -- - 0.0 0 0.24 0.000.24 CE -- - -- - -- - 83 , 1 8 9 . 4 4 83 , 1 8 9 . 4 4 US D -- - -- - -- - -- - -- - -- - 0. 0 0 83,189.44 0.0083,189.44 Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value MS CN B - C h a n d l e r 02 0 0 7 H A C 5 AL L Y A 1 7 2 A 3 70 0 , 0 0 0 . 0 0 36 3 , 8 4 7 . 2 0 US D AB S LT 03 / 2 1 / 2 0 1 7 03 / 2 9 / 2 0 1 7 08 / 1 5 / 2 0 2 0 08 / 1 6 / 2 0 2 1 28 7 . 8 4 363,806.09 -697.98363,108.11 MS CN B - C h a n d l e r 02 0 0 7 P A C 7 AL L Y A 1 7 1 A 3 29 0 , 0 0 0 . 0 0 12 6 , 3 2 1 . 2 0 US D AB S LT 01 / 2 4 / 2 0 1 7 01 / 3 1 / 2 0 1 7 06 / 1 5 / 2 0 2 0 06 / 1 5 / 2 0 2 1 95 . 4 4 126,319.09 -295.43126,023.66 MS CN B - C h a n d l e r 02 0 0 7 Y A C 8 AL L Y A 1 7 5 A 3 67 5 , 0 0 0 . 0 0 63 7 , 9 6 2 . 4 9 US D AB S LT 11 / 1 4 / 2 0 1 7 11 / 2 2 / 2 0 1 7 02 / 1 5 / 2 0 2 1 03 / 1 5 / 2 0 2 2 56 4 . 2 4 637,946.04 -922.82637,023.22 MS CN B - C h a n d l e r 02 5 8 M 0 E E 5 AM E R I C A N E X P R E S S C R E D I T C O R P 49 5 , 0 0 0 . 0 0 49 5 , 0 0 0 . 0 0 US D CO R P ST 02 / 2 8 / 2 0 1 7 03 / 0 3 / 2 0 1 7 03 / 0 3 / 2 0 2 0 03 / 0 3 / 2 0 2 0 3, 5 6 9 . 5 0 494,883.86 -403.61494,480.25 MS CN B - C h a n d l e r 02 6 6 5 W B F 7 AM E R I C A N H O N D A F I N A N C E C O R P 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 06 / 2 8 / 2 0 1 8 06 / 2 9 / 2 0 1 8 07 / 1 2 / 2 0 2 1 07 / 1 2 / 2 0 2 1 15 , 4 9 1 . 6 7 1,941,711.57 36,668.431,978,380.00 MS CN B - C h a n d l e r 02 6 6 5 W C P 4 AM E R I C A N H O N D A F I N A N C E C O R P 50 0 , 0 0 0 . 0 0 50 0 , 0 0 0 . 0 0 US D CO R P LT 10 / 0 3 / 2 0 1 8 10 / 1 0 / 2 0 1 8 12 / 1 0 / 2 0 2 1 12 / 1 0 / 2 0 2 1 98 4 . 3 8 499,800.45 13,089.55512,890.00 MS CN B - C h a n d l e r 03 7 8 3 3 A K 6 AP P L E I N C 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 04 / 1 1 / 2 0 1 9 04 / 1 5 / 2 0 1 9 05 / 0 3 / 2 0 2 3 05 / 0 3 / 2 0 2 3 3, 8 6 6 . 6 7 989,094.85 20,805.151,009,900.00 MS CN B - C h a n d l e r 03 7 8 3 3 C K 4 AP P L E I N C 1, 4 0 0 , 0 0 0 . 0 0 1, 4 0 0 , 0 0 0 . 0 0 US D CO R P ST 02 / 0 3 / 2 0 1 7 02 / 0 9 / 2 0 1 7 02 / 0 7 / 2 0 2 0 02 / 0 7 / 2 0 2 0 10 , 6 4 0 . 0 0 1,399,862.89 -2,816.891,397,046.00 MS CN B - C h a n d l e r 05 5 3 1 F A Z 6 BB & T C O R P 45 0 , 0 0 0 . 0 0 45 0 , 0 0 0 . 0 0 US D CO R P LT 10 / 2 3 / 2 0 1 7 10 / 2 6 / 2 0 1 7 02 / 0 1 / 2 0 2 1 02 / 0 1 / 2 0 2 1 4, 0 3 1 . 2 5 449,895.31 -687.31449,208.00 MS CN B - C h a n d l e r 06 4 0 6 F A A 1 BA N K O F N E W Y O R K M E L L O N C O R P 1, 5 0 0 , 0 0 0 . 0 0 1, 5 0 0 , 0 0 0 . 0 0 US D CO R P LT 09 / 0 5 / 2 0 1 7 09 / 0 7 / 2 0 1 7 03 / 1 5 / 2 0 2 1 04 / 1 5 / 2 0 2 1 7, 9 1 6 . 6 7 1,512,809.17 -4,559.171,508,250.00 MS CN B - C h a n d l e r 06 4 0 6 F A D 5 BA N K O F N E W Y O R K M E L L O N C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 03 / 2 7 / 2 0 1 9 03 / 2 9 / 2 0 1 9 08 / 1 6 / 2 0 2 3 08 / 1 6 / 2 0 2 3 8, 2 5 0 . 0 0 977,540.27 17,249.73994,790.00 MS CN B - C h a n d l e r 06 4 0 6 H C W 7 BA N K O F N E W Y O R K M E L L O N C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P ST 03 / 0 3 / 2 0 1 6 03 / 0 8 / 2 0 1 6 08 / 1 1 / 2 0 1 9 09 / 1 1 / 2 0 1 9 7, 0 2 7 . 7 8 1,000,333.21 -303.211,000,030.00 MS CN B - C h a n d l e r 06 4 0 6 H C W 7 BA N K O F N E W Y O R K M E L L O N C O R P 30 0 , 0 0 0 . 0 0 30 0 , 0 0 0 . 0 0 US D CO R P ST 12 / 0 6 / 2 0 1 6 12 / 0 9 / 2 0 1 6 08 / 1 1 / 2 0 1 9 09 / 1 1 / 2 0 1 9 2, 1 0 8 . 3 3 300,141.25 -132.25300,009.00 MS CN B - C h a n d l e r 06 5 3 9 R G M 3 MU F G B a n k L t d . ( N e w Y o r k B r a n c h ) 86 5 , 0 0 0 . 0 0 86 5 , 0 0 0 . 0 0 US D CD ST 09 / 2 5 / 2 0 1 7 09 / 2 7 / 2 0 1 7 09 / 2 5 / 2 0 1 9 09 / 2 5 / 2 0 1 9 13 , 7 7 7 . 2 9 865,000.00 -703.67864,296.33 MS CN B - C h a n d l e r 08 4 6 6 4 C K 5 BE R K S H I R E H A T H A W A Y F I N A N C E C O R P 85 0 , 0 0 0 . 0 0 85 0 , 0 0 0 . 0 0 US D CO R P ST 08 / 2 2 / 2 0 1 6 08 / 2 5 / 2 0 1 6 08 / 1 5 / 2 0 1 9 08 / 1 5 / 2 0 1 9 4, 1 7 4 . 4 4 850,093.49 -1,096.49848,997.00 MS CN B - C h a n d l e r 08 4 6 6 4 C K 5 BE R K S H I R E H A T H A W A Y F I N A N C E C O R P 36 5 , 0 0 0 . 0 0 36 5 , 0 0 0 . 0 0 US D CO R P ST 08 / 0 8 / 2 0 1 6 08 / 1 5 / 2 0 1 6 08 / 1 5 / 2 0 1 9 08 / 1 5 / 2 0 1 9 1, 7 9 2 . 5 6 364,985.22 -415.92364,569.30 MS CN B - C h a n d l e r 08 4 6 7 0 B R 8 BE R K S H I R E H A T H A W A Y F I N A N C E C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 12 / 2 0 / 2 0 1 8 12 / 2 4 / 2 0 1 8 03 / 1 5 / 2 0 2 3 03 / 1 5 / 2 0 2 3 8, 0 9 7 . 2 2 977,716.41 38,443.591,016,160.00 MS CN B - C h a n d l e r 09 2 4 7 X A E 1 BL A C K R O C K I N C 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P ST 12 / 0 6 / 2 0 1 6 12 / 0 9 / 2 0 1 6 12 / 1 0 / 2 0 1 9 12 / 1 0 / 2 0 1 9 2, 9 1 6 . 6 7 1,013,582.76 -1,632.761,011,950.00 MS CN B - C h a n d l e r 09 2 4 7 X A H 4 BL A C K R O C K I N C 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 04 / 2 7 / 2 0 1 8 04 / 3 0 / 2 0 1 8 05 / 2 4 / 2 0 2 1 05 / 2 4 / 2 0 2 1 4, 3 6 8 . 0 6 1,022,389.70 17,520.301,039,910.00 MS CN B - C h a n d l e r 14 9 1 3 Q 2 A 6 CA T E R P I L L A R F I N A N C I A L S E R V I C E S C O R P 64 5 , 0 0 0 . 0 0 64 5 , 0 0 0 . 0 0 US D CO R P LT 09 / 0 5 / 2 0 1 7 09 / 0 7 / 2 0 1 7 09 / 0 4 / 2 0 2 0 09 / 0 4 / 2 0 2 0 3, 8 7 8 . 0 6 644,786.26 -2,056.66642,729.60 MS CN B - C h a n d l e r 17 2 7 5 R B G 6 CI S C O S Y S T E M S I N C 80 0 , 0 0 0 . 0 0 80 0 , 0 0 0 . 0 0 US D CO R P ST 09 / 2 0 / 2 0 1 6 09 / 2 3 / 2 0 1 6 09 / 2 0 / 2 0 1 9 09 / 2 0 / 2 0 1 9 3, 1 4 2 . 2 2 800,062.88 -1,782.88798,280.00 MS CN B - C h a n d l e r 17 2 7 5 R B G 6 CI S C O S Y S T E M S I N C 42 5 , 0 0 0 . 0 0 42 5 , 0 0 0 . 0 0 US D CO R P ST 09 / 1 3 / 2 0 1 6 09 / 2 0 / 2 0 1 6 09 / 2 0 / 2 0 1 9 09 / 2 0 / 2 0 1 9 1, 6 6 9 . 3 1 424,965.12 -878.87424,086.25 GA A P G L B a l a n c e S h e e t b y L o t ( S h o r t - T e r m P o r t f o l i o ) As o f 0 6 / 3 0 / 2 0 1 9 Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value MS CN B - C h a n d l e r 22 1 6 0 K A J 4 CO S T C O W H O L E S A L E C O R P 1, 2 0 0 , 0 0 0 . 0 0 1, 2 0 0 , 0 0 0 . 0 0 US D CO R P LT 07 / 2 6 / 2 0 1 7 07 / 3 1 / 2 0 1 7 04 / 1 8 / 2 0 2 1 05 / 1 8 / 2 0 2 1 3, 0 8 1 . 6 7 1,201,948.05 -736.051,201,212.00 MS CN B - C h a n d l e r 24 4 2 2 E T F 6 JO H N D E E R E C A P I T A L C O R P 50 0 , 0 0 0 . 0 0 50 0 , 0 0 0 . 0 0 US D CO R P LT 03 / 2 0 / 2 0 1 8 03 / 2 2 / 2 0 1 8 01 / 0 8 / 2 0 2 1 01 / 0 8 / 2 0 2 1 6, 1 2 7 . 0 8 497,196.08 5,768.92502,965.00 MS CN B - C h a n d l e r 24 4 2 2 E U A 5 JO H N D E E R E C A P I T A L C O R P 1, 5 0 0 , 0 0 0 . 0 0 1, 5 0 0 , 0 0 0 . 0 0 US D CO R P LT 07 / 2 4 / 2 0 1 8 07 / 2 6 / 2 0 1 8 01 / 0 6 / 2 0 2 3 01 / 0 6 / 2 0 2 3 19 , 6 8 7 . 5 0 1,466,515.52 61,789.481,528,305.00 MS CN B - C h a n d l e r 31 3 0 A 0 F 7 0 FE D E R A L H O M E L O A N B A N K S 4, 0 0 0 , 0 0 0 . 0 0 4, 0 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 12 / 2 1 / 2 0 1 8 12 / 2 4 / 2 0 1 8 12 / 0 8 / 2 0 2 3 12 / 0 8 / 2 0 2 3 8, 6 2 5 . 0 0 4,089,017.84 166,462.164,255,480.00 MS CN B - C h a n d l e r 31 3 0 A 3 K M 5 FE D E R A L H O M E L O A N B A N K S 1, 7 5 0 , 0 0 0 . 0 0 1, 7 5 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 08 / 2 7 / 2 0 1 8 08 / 2 8 / 2 0 1 8 12 / 0 9 / 2 0 2 2 12 / 0 9 / 2 0 2 2 2, 6 7 3 . 6 1 1,732,961.63 59,458.371,792,420.00 MS CN B - C h a n d l e r 31 3 0 A 3 U Q 5 FE D E R A L H O M E L O A N B A N K S 4, 0 0 0 , 0 0 0 . 0 0 4, 0 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 01 / 1 7 / 2 0 1 8 01 / 1 8 / 2 0 1 8 12 / 1 1 / 2 0 2 0 12 / 1 1 / 2 0 2 0 4, 1 6 6 . 6 7 3,981,694.60 16,825.403,998,520.00 MS CN B - C h a n d l e r 31 3 0 A A 3 R 7 FE D E R A L H O M E L O A N B A N K S 1, 9 0 0 , 0 0 0 . 0 0 1, 9 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 11 / 2 9 / 2 0 1 6 11 / 3 0 / 2 0 1 6 11 / 1 5 / 2 0 1 9 11 / 1 5 / 2 0 1 9 3, 3 3 8 . 1 9 1,899,503.90 -4,709.901,894,794.00 MS CN B - C h a n d l e r 31 3 0 A A 3 R 7 FE D E R A L H O M E L O A N B A N K S 2, 7 9 5 , 0 0 0 . 0 0 2, 7 9 5 , 0 0 0 . 0 0 US D AG C Y B O N D ST 12 / 1 5 / 2 0 1 6 12 / 1 6 / 2 0 1 6 11 / 1 5 / 2 0 1 9 11 / 1 5 / 2 0 1 9 4, 9 1 0 . 6 6 2,792,081.15 -4,739.452,787,341.70 MS CN B - C h a n d l e r 31 3 0 A D R G 9 FE D E R A L H O M E L O A N B A N K S 4, 8 0 0 , 0 0 0 . 0 0 4, 8 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 01 / 1 8 / 2 0 1 9 01 / 2 2 / 2 0 1 9 03 / 1 0 / 2 0 2 3 03 / 1 0 / 2 0 2 3 40 , 7 0 0 . 0 0 4,800,596.74 139,467.264,940,064.00 MS CN B - C h a n d l e r 31 3 0 A E B M 1 FE D E R A L H O M E L O A N B A N K S 1, 7 5 0 , 0 0 0 . 0 0 1, 7 5 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 06 / 1 3 / 2 0 1 8 06 / 1 5 / 2 0 1 8 06 / 1 0 / 2 0 2 2 06 / 1 0 / 2 0 2 2 2, 8 0 7 . 2 9 1,745,483.54 50,663.961,796,147.50 MS CN B - C h a n d l e r 31 3 0 A E B M 1 FE D E R A L H O M E L O A N B A N K S 1, 2 5 0 , 0 0 0 . 0 0 1, 2 5 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 07 / 2 4 / 2 0 1 8 07 / 2 5 / 2 0 1 8 06 / 1 0 / 2 0 2 2 06 / 1 0 / 2 0 2 2 2, 0 0 5 . 2 1 1,245,300.25 37,662.251,282,962.50 MS CN B - C h a n d l e r 31 3 0 A F 5 B 9 FE D E R A L H O M E L O A N B A N K S 65 0 , 0 0 0 . 0 0 65 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 10 / 2 2 / 2 0 1 8 10 / 2 3 / 2 0 1 8 10 / 1 2 / 2 0 2 1 10 / 1 2 / 2 0 2 1 4, 2 7 9 . 1 7 649,261.88 18,054.12667,316.00 MS CN B - C h a n d l e r 31 3 0 A F E 7 8 FE D E R A L H O M E L O A N B A N K S 2, 5 0 0 , 0 0 0 . 0 0 2, 5 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 12 / 2 0 / 2 0 1 8 12 / 2 1 / 2 0 1 8 12 / 0 9 / 2 0 2 2 12 / 0 9 / 2 0 2 2 4, 5 8 3 . 3 3 2,519,041.11 80,208.892,599,250.00 MS CN B - C h a n d l e r 31 3 3 7 8 C R 0 FE D E R A L H O M E L O A N B A N K S 1, 3 0 0 , 0 0 0 . 0 0 1, 3 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 09 / 1 5 / 2 0 1 7 09 / 1 9 / 2 0 1 7 03 / 1 1 / 2 0 2 2 03 / 1 1 / 2 0 2 2 8, 9 3 7 . 5 0 1,314,844.56 1,184.441,316,029.00 MS CN B - C h a n d l e r 31 3 3 8 1 C 9 4 FE D E R A L H O M E L O A N B A N K S 1, 3 0 0 , 0 0 0 . 0 0 1, 3 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 07 / 1 8 / 2 0 1 6 07 / 1 9 / 2 0 1 6 12 / 1 3 / 2 0 1 9 12 / 1 3 / 2 0 1 9 81 2 . 5 0 1,301,059.50 -6,493.501,294,566.00 MS CN B - C h a n d l e r 31 3 3 8 3 4 G 3 FE D E R A L H O M E L O A N B A N K S 1, 9 0 0 , 0 0 0 . 0 0 1, 9 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 05 / 2 0 / 2 0 1 9 05 / 2 1 / 2 0 1 9 06 / 0 9 / 2 0 2 3 06 / 0 9 / 2 0 2 3 2, 4 6 7 . 3 6 1,889,702.87 33,173.131,922,876.00 MS CN B - C h a n d l e r 31 3 3 8 3 4 G 3 FE D E R A L H O M E L O A N B A N K S 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 06 / 1 0 / 2 0 1 9 06 / 1 1 / 2 0 1 9 06 / 0 9 / 2 0 2 3 06 / 0 9 / 2 0 2 3 2, 5 9 7 . 2 2 2,009,611.48 14,468.522,024,080.00 MS CN B - C h a n d l e r 31 3 3 8 3 H U 8 FE D E R A L H O M E L O A N B A N K S 75 0 , 0 0 0 . 0 0 75 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 05 / 2 3 / 2 0 1 7 05 / 2 4 / 2 0 1 7 06 / 1 2 / 2 0 2 0 06 / 1 2 / 2 0 2 0 69 2 . 7 1 751,150.06 -3,040.06748,110.00 MS CN B - C h a n d l e r 31 3 3 8 3 W D 9 FE D E R A L H O M E L O A N B A N K S 3, 7 5 0 , 0 0 0 . 0 0 3, 7 5 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 09 / 2 5 / 2 0 1 8 09 / 2 6 / 2 0 1 8 09 / 0 9 / 2 0 2 2 09 / 0 9 / 2 0 2 2 36 , 4 5 8 . 3 3 3,762,881.74 137,230.763,900,112.50 MS CN B - C h a n d l e r 31 3 3 8 3 Y J 4 FE D E R A L H O M E L O A N B A N K S 1, 6 0 0 , 0 0 0 . 0 0 1, 6 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 04 / 0 5 / 2 0 1 9 04 / 0 8 / 2 0 1 9 09 / 0 8 / 2 0 2 3 09 / 0 8 / 2 0 2 3 16 , 9 5 0 . 0 0 1,663,603.29 38,028.711,701,632.00 MS CN B - C h a n d l e r 31 3 3 8 3 Z U 8 FE D E R A L H O M E L O A N B A N K S 2, 4 0 0 , 0 0 0 . 0 0 2, 4 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 11 / 2 8 / 2 0 1 8 11 / 2 9 / 2 0 1 8 09 / 1 0 / 2 0 2 1 09 / 1 0 / 2 0 2 1 22 , 2 0 0 . 0 0 2,402,436.92 56,963.082,459,400.00 MS CN B - C h a n d l e r 31 3 3 E F W 5 2 FE D E R A L F A R M C R E D I T B A N K S F U N D I N G C O R P 1, 7 0 0 , 0 0 0 . 0 0 1, 7 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 04 / 2 6 / 2 0 1 6 04 / 2 8 / 2 0 1 6 07 / 0 1 / 2 0 1 9 07 / 0 1 / 2 0 1 9 9, 7 7 5 . 0 0 1,700,000.00 0.001,700,000.00 MS CN B - C h a n d l e r 31 3 3 E J 3 B 3 FE D E R A L F A R M C R E D I T B A N K S F U N D I N G C O R P 4, 0 0 0 , 0 0 0 . 0 0 4, 0 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 12 / 2 6 / 2 0 1 8 12 / 2 7 / 2 0 1 8 12 / 1 7 / 2 0 2 1 12 / 1 7 / 2 0 2 1 4, 3 5 5 . 5 6 4,009,288.23 80,791.774,090,080.00 MS CN B - C h a n d l e r 31 3 3 E J T 7 4 FE D E R A L F A R M C R E D I T B A N K S F U N D I N G C O R P 4, 0 0 0 , 0 0 0 . 0 0 4, 0 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 12 / 1 1 / 2 0 1 8 12 / 1 2 / 2 0 1 8 11 / 1 5 / 2 0 2 1 11 / 1 5 / 2 0 2 1 15 , 5 8 8 . 8 9 4,016,355.38 98,724.624,115,080.00 MS CN B - C h a n d l e r 31 3 3 E K H N 9 FE D E R A L F A R M C R E D I T B A N K S F U N D I N G C O R P 2, 5 0 0 , 0 0 0 . 0 0 2, 5 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 05 / 0 2 / 2 0 1 9 05 / 0 3 / 2 0 1 9 10 / 1 8 / 2 0 2 2 10 / 1 8 / 2 0 2 2 11 , 8 1 1 . 8 1 2,496,565.70 41,959.302,538,525.00 MS CN B - C h a n d l e r 31 3 3 E K S N 7 FE D E R A L F A R M C R E D I T B A N K S F U N D I N G C O R P 4, 0 0 0 , 0 0 0 . 0 0 4, 0 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 06 / 2 1 / 2 0 1 9 06 / 2 6 / 2 0 1 9 06 / 2 6 / 2 0 2 3 06 / 2 6 / 2 0 2 3 98 3 . 3 3 3,981,461.45 6,058.553,987,520.00 MS CN B - C h a n d l e r 31 3 5 G 0 N 3 3 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 67 5 , 0 0 0 . 0 0 67 5 , 0 0 0 . 0 0 US D AG C Y B O N D ST 07 / 2 9 / 2 0 1 6 08 / 0 2 / 2 0 1 6 08 / 0 2 / 2 0 1 9 08 / 0 2 / 2 0 1 9 2, 4 4 4 . 5 3 674,966.20 -782.95674,183.25 MS CN B - C h a n d l e r 31 3 5 G 0 N 3 3 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 1, 6 6 0 , 0 0 0 . 0 0 1, 6 6 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 07 / 2 9 / 2 0 1 6 08 / 0 2 / 2 0 1 6 08 / 0 2 / 2 0 1 9 08 / 0 2 / 2 0 1 9 6, 0 1 1 . 7 4 1,659,917.00 -1,925.601,657,991.40 MS CN B - C h a n d l e r 31 3 5 G 0 P 4 9 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 3, 0 0 0 , 0 0 0 . 0 0 3, 0 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 09 / 0 1 / 2 0 1 6 09 / 0 2 / 2 0 1 6 08 / 2 8 / 2 0 1 9 08 / 2 8 / 2 0 1 9 10 , 2 5 0 . 0 0 2,999,573.46 -5,273.462,994,300.00 MS CN B - C h a n d l e r 31 3 5 G 0 R 3 9 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 2, 2 3 5 , 0 0 0 . 0 0 2, 2 3 5 , 0 0 0 . 0 0 US D AG C Y B O N D ST 06 / 2 7 / 2 0 1 7 06 / 2 9 / 2 0 1 7 10 / 2 4 / 2 0 1 9 10 / 2 4 / 2 0 1 9 4, 1 5 9 . 5 8 2,231,768.92 -5,016.072,226,752.85 MS CN B - C h a n d l e r 31 3 5 G 0 R 3 9 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 74 5 , 0 0 0 . 0 0 74 5 , 0 0 0 . 0 0 US D AG C Y B O N D ST 12 / 1 5 / 2 0 1 6 12 / 1 6 / 2 0 1 6 10 / 2 4 / 2 0 1 9 10 / 2 4 / 2 0 1 9 1, 3 8 6 . 5 3 743,504.80 -1,253.85742,250.95 GA A P G L B a l a n c e S h e e t b y L o t ( S h o r t - T e r m P o r t f o l i o ) As o f 0 6 / 3 0 / 2 0 1 9 Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value MS CN B - C h a n d l e r 31 3 5 G 0 R 3 9 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 1, 7 0 5 , 0 0 0 . 0 0 1, 7 0 5 , 0 0 0 . 0 0 US D AG C Y B O N D ST 01 / 0 5 / 2 0 1 7 01 / 1 0 / 2 0 1 7 10 / 2 4 / 2 0 1 9 10 / 2 4 / 2 0 1 9 3, 1 7 3 . 1 9 1,702,649.12 -3,940.571,698,708.55 MS CN B - C h a n d l e r 31 3 5 G 0 S 3 8 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 1, 6 0 0 , 0 0 0 . 0 0 1, 6 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 09 / 2 7 / 2 0 1 7 09 / 2 8 / 2 0 1 7 01 / 0 5 / 2 0 2 2 01 / 0 5 / 2 0 2 2 15 , 6 4 4 . 4 4 1,603,780.43 4,619.571,608,400.00 MS CN B - C h a n d l e r 31 3 5 G 0 T 2 9 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 16 0 , 0 0 0 . 0 0 16 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 02 / 2 4 / 2 0 1 7 02 / 2 8 / 2 0 1 7 02 / 2 8 / 2 0 2 0 02 / 2 8 / 2 0 2 0 82 0 . 0 0 159,977.42 -591.82159,385.60 MS CN B - C h a n d l e r 31 3 5 G 0 T 2 9 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 03 / 0 2 / 2 0 1 7 03 / 0 3 / 2 0 1 7 02 / 2 8 / 2 0 2 0 02 / 2 8 / 2 0 2 0 10 , 2 5 0 . 0 0 1,997,391.88 -5,071.881,992,320.00 MS CN B - C h a n d l e r 31 3 5 G 0 T 2 9 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 1, 9 5 0 , 0 0 0 . 0 0 1, 9 5 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 08 / 3 0 / 2 0 1 7 08 / 3 1 / 2 0 1 7 02 / 2 8 / 2 0 2 0 02 / 2 8 / 2 0 2 0 9, 9 9 3 . 7 5 1,950,485.42 -7,973.421,942,512.00 MS CN B - C h a n d l e r 31 3 5 G 0 T 6 0 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 70 0 , 0 0 0 . 0 0 70 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 08 / 0 2 / 2 0 1 7 08 / 0 3 / 2 0 1 7 07 / 3 0 / 2 0 2 0 07 / 3 0 / 2 0 2 0 4, 4 0 4 . 1 7 699,447.99 -2,940.99696,507.00 MS CN B - C h a n d l e r 31 3 5 G 0 T 6 0 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 2, 0 9 5 , 0 0 0 . 0 0 2, 0 9 5 , 0 0 0 . 0 0 US D AG C Y B O N D LT 08 / 3 0 / 2 0 1 7 08 / 3 1 / 2 0 1 7 07 / 3 0 / 2 0 2 0 07 / 3 0 / 2 0 2 0 13 , 1 8 1 . 0 4 2,094,899.67 -10,353.722,084,545.95 MS CN B - C h a n d l e r 31 3 5 G 0 T 9 4 FE D E R A L N A T I O N A L M O R T G A G E A S S O C I A T I O N 1, 6 0 0 , 0 0 0 . 0 0 1, 6 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D LT 10 / 0 4 / 2 0 1 8 10 / 0 5 / 2 0 1 8 01 / 1 9 / 2 0 2 3 01 / 1 9 / 2 0 2 3 17 , 1 0 0 . 0 0 1,561,535.21 69,920.791,631,456.00 MS CN B - C h a n d l e r 31 3 7 E A D K 2 FR E D D I E M A C 1, 6 0 0 , 0 0 0 . 0 0 1, 6 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 04 / 2 8 / 2 0 1 5 04 / 2 9 / 2 0 1 5 08 / 0 1 / 2 0 1 9 08 / 0 1 / 2 0 1 9 8, 3 3 3 . 3 3 1,599,869.77 -1,213.771,598,656.00 MS CN B - C h a n d l e r 31 3 7 E A D K 2 FR E D D I E M A C 10 0 , 0 0 0 . 0 0 10 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 06 / 1 8 / 2 0 1 5 06 / 1 9 / 2 0 1 5 08 / 0 1 / 2 0 1 9 08 / 0 1 / 2 0 1 9 52 0 . 8 3 99,973.21 -57.2199,916.00 MS CN B - C h a n d l e r 31 3 7 E A D M 8 FR E D D I E M A C 1, 7 0 0 , 0 0 0 . 0 0 1, 7 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 02 / 2 2 / 2 0 1 6 02 / 2 3 / 2 0 1 6 10 / 0 2 / 2 0 1 9 10 / 0 2 / 2 0 1 9 5, 2 5 3 . 4 7 1,700,217.46 -4,331.461,695,886.00 MS CN B - C h a n d l e r 31 3 7 E A E B 1 FE D E R A L H O M E L O A N M O R T G A G E C O R P 4, 6 0 0 , 0 0 0 . 0 0 4, 6 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 10 / 0 3 / 2 0 1 6 10 / 0 5 / 2 0 1 6 07 / 1 9 / 2 0 1 9 07 / 1 9 / 2 0 1 9 18 , 1 1 2 . 5 0 4,599,730.17 -3,456.174,596,274.00 MS CN B - C h a n d l e r 31 3 7 E A E B 1 FE D E R A L H O M E L O A N M O R T G A G E C O R P 95 0 , 0 0 0 . 0 0 95 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 07 / 1 9 / 2 0 1 6 07 / 2 0 / 2 0 1 6 07 / 1 9 / 2 0 1 9 07 / 1 9 / 2 0 1 9 3, 7 4 0 . 6 3 949,961.47 -730.97949,230.50 MS CN B - C h a n d l e r 31 3 7 E A E E 5 FR E D D I E M A C 1, 7 4 0 , 0 0 0 . 0 0 1, 7 4 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 01 / 1 2 / 2 0 1 7 01 / 1 7 / 2 0 1 7 01 / 1 7 / 2 0 2 0 01 / 1 7 / 2 0 2 0 11 , 8 9 0 . 0 0 1,739,652.77 -5,812.371,733,840.40 MS CN B - C h a n d l e r 31 3 7 E A E E 5 FR E D D I E M A C 3, 6 5 0 , 0 0 0 . 0 0 3, 6 5 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 04 / 0 3 / 2 0 1 7 04 / 0 5 / 2 0 1 7 01 / 1 7 / 2 0 2 0 01 / 1 7 / 2 0 2 0 24 , 9 4 1 . 6 7 3,649,632.92 -12,553.923,637,079.00 MS CN B - C h a n d l e r 31 3 7 E A E F 2 FR E D D I E M A C 2, 2 1 5 , 0 0 0 . 0 0 2, 2 1 5 , 0 0 0 . 0 0 US D AG C Y B O N D ST 06 / 2 7 / 2 0 1 7 06 / 2 9 / 2 0 1 7 04 / 2 0 / 2 0 2 0 04 / 2 0 / 2 0 2 0 6, 0 0 6 . 6 5 2,211,640.17 -7,892.372,203,747.80 MS CN B - C h a n d l e r 31 3 7 E A E F 2 FR E D D I E M A C 3, 0 0 0 , 0 0 0 . 0 0 3, 0 0 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 07 / 0 6 / 2 0 1 7 07 / 1 1 / 2 0 1 7 04 / 2 0 / 2 0 2 0 04 / 2 0 / 2 0 2 0 8, 1 3 5 . 4 2 2,994,399.07 -9,639.072,984,760.00 MS CN B - C h a n d l e r 31 3 7 E A E H 8 FE D E R A L H O M E L O A N M O R T G A G E C O R P 1, 3 3 0 , 0 0 0 . 0 0 1, 3 3 0 , 0 0 0 . 0 0 US D AG C Y B O N D ST 07 / 1 8 / 2 0 1 7 07 / 1 9 / 2 0 1 7 08 / 1 5 / 2 0 1 9 08 / 1 5 / 2 0 1 9 6, 9 0 8 . 6 1 1,329,882.08 -1,305.181,328,576.90 MS CN B - C h a n d l e r 36 9 5 5 0 B E 7 GE N E R A L D Y N A M I C S C O R P 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 06 / 0 7 / 2 0 1 8 06 / 1 1 / 2 0 1 8 05 / 1 1 / 2 0 2 1 05 / 1 1 / 2 0 2 1 8, 3 3 3 . 3 3 1,995,158.25 37,221.752,032,380.00 MS CN B - C h a n d l e r 43 7 0 7 6 B Q 4 HO M E D E P O T I N C 1, 0 9 0 , 0 0 0 . 0 0 1, 0 9 0 , 0 0 0 . 0 0 US D CO R P ST 05 / 2 4 / 2 0 1 7 06 / 0 5 / 2 0 1 7 06 / 0 5 / 2 0 2 0 06 / 0 5 / 2 0 2 0 1, 4 1 7 . 0 0 1,089,800.61 -3,582.911,086,217.70 MS CN B - C h a n d l e r 43 7 0 7 6 B Q 4 HO M E D E P O T I N C 41 0 , 0 0 0 . 0 0 41 0 , 0 0 0 . 0 0 US D CO R P ST 05 / 2 4 / 2 0 1 7 06 / 0 5 / 2 0 1 7 06 / 0 5 / 2 0 2 0 06 / 0 5 / 2 0 2 0 53 3 . 0 0 409,925.14 -1,347.84408,577.30 MS CN B - C h a n d l e r 43 8 1 1 B A C 8 HA R O T 1 7 2 A 3 87 5 , 0 0 0 . 0 0 62 0 , 4 8 4 . 8 2 US D AB S LT 06 / 2 0 / 2 0 1 7 06 / 2 7 / 2 0 1 7 01 / 1 5 / 2 0 2 1 08 / 1 6 / 2 0 2 1 46 3 . 3 0 620,469.98 -1,763.28618,706.70 MS CN B - C h a n d l e r 43 8 1 3 F A C 7 HA R O T 1 7 4 A 3 48 5 , 0 0 0 . 0 0 43 4 , 2 5 4 . 5 9 US D AB S LT 11 / 2 2 / 2 0 1 7 11 / 2 9 / 2 0 1 7 03 / 2 1 / 2 0 2 1 11 / 2 2 / 2 0 2 1 24 7 . 2 8 434,233.98 -552.13433,681.85 MS CN B - C h a n d l e r 43 8 1 4 T A C 6 HA R O T 1 7 1 A 3 40 0 , 0 0 0 . 0 0 20 3 , 6 8 5 . 0 2 US D AB S LT 03 / 2 1 / 2 0 1 7 03 / 2 8 / 2 0 1 7 10 / 2 1 / 2 0 2 0 07 / 2 1 / 2 0 2 1 97 . 3 2 203,682.24 -599.42203,082.83 MS CN B - C h a n d l e r 43 8 1 4 U A G 4 HA R O T 1 8 2 A 3 75 0 , 0 0 0 . 0 0 75 0 , 0 0 0 . 0 0 US D AB S LT 05 / 2 2 / 2 0 1 8 05 / 3 0 / 2 0 1 8 09 / 1 5 / 2 0 2 1 05 / 1 8 / 2 0 2 2 81 5 . 2 1 749,994.42 9,342.70759,337.13 MS CN B - C h a n d l e r 43 8 1 4 W A B 1 HA R O T 1 9 1 A 2 1, 8 7 0 , 0 0 0 . 0 0 1, 8 7 0 , 0 0 0 . 0 0 US D AB S LT 02 / 1 9 / 2 0 1 9 02 / 2 7 / 2 0 1 9 11 / 1 8 / 2 0 2 0 09 / 2 0 / 2 0 2 1 1, 8 5 7 . 0 1 1,869,912.82 6,833.771,876,746.59 MS CN B - C h a n d l e r 43 8 1 5 H A C 1 HA R O T 1 8 3 A 3 67 0 , 0 0 0 . 0 0 67 0 , 0 0 0 . 0 0 US D AB S LT 08 / 2 1 / 2 0 1 8 08 / 2 8 / 2 0 1 8 12 / 2 1 / 2 0 2 1 08 / 2 2 / 2 0 2 2 54 9 . 0 3 669,940.56 8,437.39678,377.95 MS CN B - C h a n d l e r 43 8 5 1 6 B Q 8 HO N E Y W E L L I N T E R N A T I O N A L I N C 24 5 , 0 0 0 . 0 0 24 5 , 0 0 0 . 0 0 US D CO R P ST 10 / 2 3 / 2 0 1 7 10 / 3 0 / 2 0 1 7 10 / 3 0 / 2 0 1 9 10 / 3 0 / 2 0 1 9 74 7 . 2 5 244,968.26 -399.46244,568.80 MS CN B - C h a n d l e r 44 9 3 0 U A D 8 HA R T 1 6 A A 3 25 0 , 0 0 0 . 0 0 14 , 3 4 9 . 6 7 US D AB S LT 03 / 2 2 / 2 0 1 6 03 / 3 0 / 2 0 1 6 08 / 1 5 / 2 0 1 9 09 / 1 5 / 2 0 2 0 9.9 5 14,349.57 -5.9214,343.65 MS CN B - C h a n d l e r 44 9 3 1 P A D 8 HA R T 1 7 A A 3 38 0 , 0 0 0 . 0 0 25 4 , 3 1 3 . 8 6 US D AB S LT 03 / 2 2 / 2 0 1 7 03 / 2 9 / 2 0 1 7 09 / 1 5 / 2 0 2 0 08 / 1 6 / 2 0 2 1 19 8 . 9 3 254,309.12 -612.73253,696.38 MS CN B - C h a n d l e r 44 9 3 2 G A D 7 HA R T 1 7 B A 3 73 5 , 0 0 0 . 0 0 72 3 , 1 7 0 . 2 4 US D AB S LT 08 / 0 9 / 2 0 1 7 08 / 1 6 / 2 0 1 7 01 / 1 5 / 2 0 2 1 01 / 1 8 / 2 0 2 2 56 8 . 8 9 723,133.95 -1,966.53721,167.42 GA A P G L B a l a n c e S h e e t b y L o t ( S h o r t - T e r m P o r t f o l i o ) As o f 0 6 / 3 0 / 2 0 1 9 Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value MS CN B - C h a n d l e r 44 9 3 2 H A G 8 IB M C R E D I T L L C 70 0 , 0 0 0 . 0 0 70 0 , 0 0 0 . 0 0 US D CO R P LT 02 / 2 2 / 2 0 1 8 02 / 2 6 / 2 0 1 8 02 / 0 5 / 2 0 2 1 02 / 0 5 / 2 0 2 1 7, 5 2 3 . 0 6 698,242.74 5,628.26703,871.00 MS CN B - C h a n d l e r 45 8 1 X 0 C D 8 IN T E R - A M E R I C A N D E V E L O P M E N T B A N K 1, 7 0 0 , 0 0 0 . 0 0 1, 7 0 0 , 0 0 0 . 0 0 US D SU P R A N A T I O N A L LT 10 / 0 2 / 2 0 1 7 10 / 1 0 / 2 0 1 7 11 / 0 9 / 2 0 2 0 11 / 0 9 / 2 0 2 0 5, 2 1 8 . 0 6 1,707,050.99 -2,834.991,704,216.00 MS CN B - C h a n d l e r 45 8 1 X 0 C X 4 IN T E R - A M E R I C A N D E V E L O P M E N T B A N K 1, 4 5 5 , 0 0 0 . 0 0 1, 4 5 5 , 0 0 0 . 0 0 US D SU P R A N A T I O N A L ST 04 / 0 5 / 2 0 1 7 04 / 1 2 / 2 0 1 7 05 / 1 2 / 2 0 2 0 05 / 1 2 / 2 0 2 0 3, 2 1 8 . 1 8 1,454,018.54 -4,605.741,449,412.80 MS CN B - C h a n d l e r 45 9 0 5 8 D W 0 IN T E R N A T I O N A L B A N K F O R R E C O N S T R U C T I O N AN D D E V E L O P M 86 5 , 0 0 0 . 0 0 86 5 , 0 0 0 . 0 0 US D SU P R A N A T I O N A L ST 09 / 2 7 / 2 0 1 7 09 / 2 9 / 2 0 1 7 10 / 0 7 / 2 0 1 9 10 / 0 7 / 2 0 1 9 3, 7 8 6 . 3 9 865,626.68 -1,240.83864,385.85 MS CN B - C h a n d l e r 45 9 0 5 U P 3 2 IN T E R N A T I O N A L B A N K F O R R E C O N S T R U C T I O N AN D D E V E L O P M 1, 7 3 0 , 0 0 0 . 0 0 1, 7 3 0 , 0 0 0 . 0 0 US D SU P R A N A T I O N A L LT 09 / 1 2 / 2 0 1 7 09 / 1 9 / 2 0 1 7 09 / 1 2 / 2 0 2 0 09 / 1 2 / 2 0 2 0 8, 1 7 6 . 6 0 1,728,312.74 -7,014.641,721,298.10 MS CN B - C h a n d l e r 45 9 2 0 0 J N 2 IN T E R N A T I O N A L B U S I N E S S M A C H I N E S C O R P 1, 6 3 5 , 0 0 0 . 0 0 1, 6 3 5 , 0 0 0 . 0 0 US D CO R P ST 02 / 0 1 / 2 0 1 7 02 / 0 3 / 2 0 1 7 01 / 2 7 / 2 0 2 0 01 / 2 7 / 2 0 2 0 13 , 2 8 8 . 9 2 1,634,873.42 -3,143.421,631,730.00 MS CN B - C h a n d l e r 45 9 5 0 K C M 0 IN T E R N A T I O N A L F I N A N C E C O R P 1, 2 5 0 , 0 0 0 . 0 0 1, 2 5 0 , 0 0 0 . 0 0 US D SU P R A N A T I O N A L LT 01 / 1 8 / 2 0 1 8 01 / 2 5 / 2 0 1 8 01 / 2 5 / 2 0 2 1 01 / 2 5 / 2 0 2 1 12 , 1 8 7 . 5 0 1,248,049.55 8,562.951,256,612.50 MS CN B - C h a n d l e r 45 9 5 0 K C M 0 IN T E R N A T I O N A L F I N A N C E C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D SU P R A N A T I O N A L LT 01 / 2 4 / 2 0 1 8 01 / 2 6 / 2 0 1 8 01 / 2 5 / 2 0 2 1 01 / 2 5 / 2 0 2 1 9, 7 5 0 . 0 0 998,518.17 6,771.831,005,290.00 MS CN B - C h a n d l e r 46 6 2 5 H R T 9 JP M O R G A N C H A S E & C O 1, 5 0 0 , 0 0 0 . 0 0 1, 5 0 0 , 0 0 0 . 0 0 US D CO R P LT 09 / 0 7 / 2 0 1 8 09 / 1 1 / 2 0 1 8 06 / 0 7 / 2 0 2 1 06 / 0 7 / 2 0 2 1 2, 4 0 0 . 0 0 1,476,650.05 27,399.951,504,050.00 MS CN B - C h a n d l e r 47 7 8 8 B A D 6 JD O T 1 7 B A 3 25 0 , 0 0 0 . 0 0 20 2 , 6 3 1 . 1 0 US D AB S LT 07 / 1 1 / 2 0 1 7 07 / 1 8 / 2 0 1 7 11 / 1 5 / 2 0 2 0 10 / 1 5 / 2 0 2 1 16 3 . 9 1 202,627.33 -517.22202,110.11 MS CN B - C h a n d l e r 47 7 8 8 C A B 8 JD O T 2 0 1 8 A 2 1, 1 5 0 , 0 0 0 . 0 0 38 1 , 1 1 7 . 6 1 US D AB S LT 02 / 2 1 / 2 0 1 8 02 / 2 8 / 2 0 1 8 11 / 1 5 / 2 0 1 9 10 / 1 5 / 2 0 2 0 40 9 . 9 1 381,114.82 -27.70381,087.12 MS CN B - C h a n d l e r 47 7 8 9 J A B 2 JD O T 2 0 1 9 A 2 1, 3 8 0 , 0 0 0 . 0 0 1, 3 8 0 , 0 0 0 . 0 0 US D AB S LT 03 / 0 5 / 2 0 1 9 03 / 1 3 / 2 0 1 9 11 / 1 5 / 2 0 2 0 12 / 1 5 / 2 0 2 1 1, 7 4 8 . 0 0 1,379,953.73 8,168.951,388,122.68 MS CN B - C h a n d l e r 59 4 9 1 8 B N 3 MIC R O S O F T C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P ST 08 / 0 1 / 2 0 1 6 08 / 0 8 / 2 0 1 6 08 / 0 8 / 2 0 1 9 08 / 0 8 / 2 0 1 9 4, 3 6 9 . 4 4 999,963.45 -1,153.45998,810.00 MS CN B - C h a n d l e r 65 4 7 8 G A B 6 NA R O T 1 7 B A 2 A 1, 1 0 0 , 0 0 0 . 0 0 4,2 6 0 . 8 4 US D AB S ST 08 / 1 6 / 2 0 1 7 08 / 2 3 / 2 0 1 7 07 / 1 5 / 2 0 1 9 05 / 1 5 / 2 0 2 0 2.9 5 4,260.84 -1.704,259.13 MS CN B - C h a n d l e r 65 4 7 8 V A D 9 NA R O T 1 6 B A 3 18 5 , 0 0 0 . 0 0 46 , 1 6 1 . 3 7 US D AB S LT 04 / 1 8 / 2 0 1 6 04 / 2 7 / 2 0 1 6 01 / 1 5 / 2 0 2 0 01 / 1 5 / 2 0 2 1 27 . 0 8 46,160.65 -124.6046,036.04 MS CN B - C h a n d l e r 65 4 7 8 V A D 9 NA R O T 1 6 B A 3 2, 0 0 0 , 0 0 0 . 0 0 49 9 , 0 4 1 . 7 9 US D AB S LT 02 / 1 2 / 2 0 1 8 02 / 1 4 / 2 0 1 8 01 / 1 5 / 2 0 2 0 01 / 1 5 / 2 0 2 1 29 2 . 7 7 497,905.14 -218.20497,686.94 MS CN B - C h a n d l e r 68 3 8 9 X A X 3 OR A C L E C O R P 25 0 , 0 0 0 . 0 0 25 0 , 0 0 0 . 0 0 US D CO R P ST 12 / 0 6 / 2 0 1 6 12 / 0 9 / 2 0 1 6 10 / 0 8 / 2 0 1 9 10 / 0 8 / 2 0 1 9 1, 2 9 6 . 8 8 250,298.12 -280.62250,017.50 MS CN B - C h a n d l e r 68 3 8 9 X B B 0 OR A C L E C O R P 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 06 / 0 7 / 2 0 1 8 06 / 1 1 / 2 0 1 8 05 / 1 5 / 2 0 2 2 05 / 1 5 / 2 0 2 2 6, 3 8 8 . 8 9 1,963,442.05 57,977.952,021,420.00 MS CN B - C h a n d l e r 69 3 5 3 R E Y 0 PN C B A N K N A 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 11 / 1 7 / 2 0 1 7 11 / 2 1 / 2 0 1 7 11 / 0 9 / 2 0 2 1 12 / 0 9 / 2 0 2 1 1, 5 5 8 . 3 3 1,003,356.19 4,953.811,008,310.00 MS CN B - C h a n d l e r 69 3 5 3 R F B 9 PN C B A N K N A 75 0 , 0 0 0 . 0 0 75 0 , 0 0 0 . 0 0 US D CO R P LT 12 / 2 7 / 2 0 1 7 12 / 2 9 / 2 0 1 7 01 / 1 7 / 2 0 2 2 02 / 1 7 / 2 0 2 2 7, 3 2 8 . 1 3 751,130.45 5,289.55756,420.00 MS CN B - C h a n d l e r 69 3 5 3 R F B 9 PN C B A N K N A 48 5 , 0 0 0 . 0 0 48 5 , 0 0 0 . 0 0 US D CO R P LT 07 / 1 9 / 2 0 1 8 07 / 2 3 / 2 0 1 8 02 / 1 7 / 2 0 2 2 02 / 1 7 / 2 0 2 2 4, 7 3 8 . 8 5 476,387.11 12,764.49489,151.60 MS CN B - C h a n d l e r 69 3 5 3 R F B 9 PN C B A N K N A 50 0 , 0 0 0 . 0 0 50 0 , 0 0 0 . 0 0 US D CO R P LT 07 / 1 9 / 2 0 1 8 07 / 2 3 / 2 0 1 8 02 / 1 7 / 2 0 2 2 02 / 1 7 / 2 0 2 2 4, 8 8 5 . 4 2 491,390.97 12,889.03504,280.00 MS CN B - C h a n d l e r 69 3 7 1 R N 9 3 PA C C A R F I N A N C I A L C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 02 / 2 6 / 2 0 1 8 02 / 2 8 / 2 0 1 8 03 / 0 1 / 2 0 2 1 03 / 0 1 / 2 0 2 1 9, 3 3 3 . 3 3 1,001,164.20 8,015.801,009,180.00 MS CN B - C h a n d l e r 69 3 7 1 R P 4 2 PA C C A R F I N A N C I A L C O R P 2, 1 0 5 , 0 0 0 . 0 0 2, 1 0 5 , 0 0 0 . 0 0 US D CO R P LT 08 / 0 6 / 2 0 1 8 08 / 0 9 / 2 0 1 8 08 / 0 9 / 2 0 2 1 08 / 0 9 / 2 0 2 1 26 , 1 5 4 . 6 3 2,104,535.30 38,649.402,143,184.70 MS CN B - C h a n d l e r 74 0 0 5 P B A 1 PR A X A I R I N C P X Y U S U S 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 05 / 1 5 / 2 0 1 8 05 / 1 7 / 2 0 1 8 02 / 1 5 / 2 0 2 2 02 / 1 5 / 2 0 2 2 18 , 5 1 1 . 1 1 1,959,436.81 57,083.192,016,520.00 MS CN B - C h a n d l e r 80 8 5 1 3 A W 5 CH A R L E S S C H W A B C O R P 88 5 , 0 0 0 . 0 0 88 5 , 0 0 0 . 0 0 US D CO R P LT 05 / 1 7 / 2 0 1 8 05 / 2 2 / 2 0 1 8 05 / 2 1 / 2 0 2 1 05 / 2 1 / 2 0 2 1 3, 1 9 5 . 8 3 884,982.57 17,151.03902,133.60 MS CN B - C h a n d l e r 80 8 5 1 3 A W 5 CH A R L E S S C H W A B C O R P 1, 5 0 0 , 0 0 0 . 0 0 1, 5 0 0 , 0 0 0 . 0 0 US D CO R P LT 05 / 2 9 / 2 0 1 8 05 / 3 1 / 2 0 1 8 04 / 2 1 / 2 0 2 1 05 / 2 1 / 2 0 2 1 5, 4 1 6 . 6 7 1,506,716.45 22,323.551,529,040.00 MS CN B - C h a n d l e r 83 0 5 0 F X T 3 Sk a n d i n a v i s k a E n s k i l d a B a n k e n A B ( p u b l . ) 1, 7 2 5 , 0 0 0 . 0 0 1, 7 2 5 , 0 0 0 . 0 0 US D CD ST 08 / 0 3 / 2 0 1 7 08 / 0 4 / 2 0 1 7 08 / 0 2 / 2 0 1 9 08 / 0 2 / 2 0 1 9 13 , 1 3 6 . 8 3 1,724,970.43 -999.371,723,971.05 MS CN B - C h a n d l e r 85 7 4 7 7 A S 2 ST A T E S T R E E T C O R P 60 0 , 0 0 0 . 0 0 60 0 , 0 0 0 . 0 0 US D CO R P LT 10 / 0 4 / 2 0 1 6 10 / 0 7 / 2 0 1 6 08 / 1 8 / 2 0 2 0 08 / 1 8 / 2 0 2 0 5, 6 5 2 . 5 0 606,202.02 -3,538.02602,664.00 MS CN B - C h a n d l e r 85 7 4 7 7 A S 2 ST A T E S T R E E T C O R P 40 0 , 0 0 0 . 0 0 40 0 , 0 0 0 . 0 0 US D CO R P LT 05 / 2 2 / 2 0 1 7 05 / 2 5 / 2 0 1 7 08 / 1 8 / 2 0 2 0 08 / 1 8 / 2 0 2 0 3, 7 6 8 . 3 3 402,902.93 -1,126.93401,776.00 GA A P G L B a l a n c e S h e e t b y L o t ( S h o r t - T e r m P o r t f o l i o ) As o f 0 6 / 3 0 / 2 0 1 9 Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value MS CN B - C h a n d l e r 85 7 4 7 7 A S 2 ST A T E S T R E E T C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 02 / 1 2 / 2 0 1 8 02 / 1 4 / 2 0 1 8 08 / 1 8 / 2 0 2 0 08 / 1 8 / 2 0 2 0 9, 4 2 0 . 8 3 999,945.77 4,494.231,004,440.00 MS CN B - C h a n d l e r 89 1 1 4 M N Q 6 To r o n t o - D o m i n i o n B a n k , N e w Y o r k B r a n c h 1, 5 0 0 , 0 0 0 . 0 0 1, 5 0 0 , 0 0 0 . 0 0 US D CD ST 11 / 2 9 / 2 0 1 8 11 / 3 0 / 2 0 1 8 12 / 0 2 / 2 0 1 9 12 / 0 2 / 2 0 1 9 27 , 4 2 3 . 7 5 1,500,000.00 5,212.801,505,212.80 MS CN B - C h a n d l e r 89 2 3 6 T E L 5 TO Y O T A M O T O R C R E D I T C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 09 / 0 7 / 2 0 1 8 09 / 1 1 / 2 0 1 8 01 / 1 1 / 2 0 2 3 01 / 1 1 / 2 0 2 3 12 , 7 5 0 . 0 0 979,164.04 36,895.961,016,060.00 MS CN B - C h a n d l e r 89 2 3 6 T F S 9 TO Y O T A M O T O R C R E D I T C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 06 / 1 4 / 2 0 1 9 06 / 1 8 / 2 0 1 9 01 / 0 8 / 2 0 2 4 01 / 0 8 / 2 0 2 4 16 , 0 9 8 . 6 1 1,040,192.37 5,597.631,045,790.00 MS CN B - C h a n d l e r 89 2 3 7 W A D 9 TA O T 1 6 C A 3 25 0 , 0 0 0 . 0 0 36 , 1 6 2 . 0 3 US D AB S LT 08 / 0 1 / 2 0 1 6 08 / 1 0 / 2 0 1 6 10 / 1 5 / 2 0 1 9 08 / 1 7 / 2 0 2 0 18 . 3 2 36,161.96 -62.8236,099.14 MS CN B - C h a n d l e r 89 2 3 8 B A B 8 TA O T 1 8 A A 2 A 2, 1 8 0 , 0 0 0 . 0 0 72 7 , 0 2 2 . 4 2 US D AB S LT 01 / 2 3 / 2 0 1 8 01 / 3 1 / 2 0 1 8 11 / 1 5 / 2 0 1 9 10 / 1 5 / 2 0 2 0 67 8 . 5 5 727,011.42 -505.99726,505.43 MS CN B - C h a n d l e r 89 2 3 8 K A D 4 TA O T 1 7 D A 3 54 0 , 0 0 0 . 0 0 54 0 , 0 0 0 . 0 0 US D AB S LT 11 / 0 7 / 2 0 1 7 11 / 1 5 / 2 0 1 7 04 / 1 5 / 2 0 2 1 01 / 1 8 / 2 0 2 2 46 3 . 2 0 539,982.02 -1,195.99538,786.03 MS CN B - C h a n d l e r 89 2 3 8 M A D 0 TA O T 1 7 A A 3 22 0 , 0 0 0 . 0 0 11 0 , 0 1 1 . 6 6 US D AB S LT 03 / 0 7 / 2 0 1 7 03 / 1 5 / 2 0 1 7 04 / 1 5 / 2 0 2 0 02 / 1 6 / 2 0 2 1 84 . 5 9 110,009.77 -256.13109,753.63 MS CN B - C h a n d l e r 89 2 3 9 A A B 9 TA O T 1 9 A A 2 A 1, 1 5 0 , 0 0 0 . 0 0 1, 1 5 0 , 0 0 0 . 0 0 US D AB S LT 02 / 0 5 / 2 0 1 9 02 / 1 3 / 2 0 1 9 11 / 1 5 / 2 0 2 0 10 / 1 5 / 2 0 2 1 1, 4 4 6 . 4 4 1,149,930.69 4,988.211,154,918.90 MS CN B - C h a n d l e r 90 3 3 1 H M L 4 US B A N K N A 25 0 , 0 0 0 . 0 0 25 0 , 0 0 0 . 0 0 US D CO R P ST 12 / 0 6 / 2 0 1 6 12 / 0 9 / 2 0 1 6 09 / 2 8 / 2 0 1 9 10 / 2 8 / 2 0 1 9 92 9 . 6 9 250,156.86 -299.36249,857.50 MS CN B - C h a n d l e r 90 4 7 6 4 A V 9 UN I L E V E R C A P I T A L C O R P 12 5 , 0 0 0 . 0 0 12 5 , 0 0 0 . 0 0 US D CO R P ST 05 / 0 2 / 2 0 1 7 05 / 0 5 / 2 0 1 7 05 / 0 5 / 2 0 2 0 05 / 0 5 / 2 0 2 0 35 0 . 0 0 124,885.66 -355.66124,530.00 MS CN B - C h a n d l e r 91 1 5 9 H H P 8 U. S . B A N C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 01 / 2 4 / 2 0 1 8 01 / 2 6 / 2 0 1 8 01 / 2 4 / 2 0 2 2 01 / 2 4 / 2 0 2 2 11 , 4 4 7 . 9 2 997,567.61 13,122.391,010,690.00 MS CN B - C h a n d l e r 91 1 5 9 H H V 5 U. S . B A N C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 03 / 2 8 / 2 0 1 9 03 / 2 9 / 2 0 1 9 01 / 0 5 / 2 0 2 4 02 / 0 5 / 2 0 2 4 13 , 7 8 1 . 2 5 1,024,150.54 22,229.461,046,380.00 MS CN B - C h a n d l e r 91 1 5 9 H H V 5 U. S . B A N C O R P 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 06 / 1 4 / 2 0 1 9 06 / 1 8 / 2 0 1 9 01 / 0 5 / 2 0 2 4 02 / 0 5 / 2 0 2 4 13 , 7 8 1 . 2 5 1,039,016.02 7,363.981,046,380.00 MS CN B - C h a n d l e r 91 2 8 2 8 F 9 6 UN I T E D S T A T E S T R E A S U R Y 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D US G O V LT 02 / 0 2 / 2 0 1 8 02 / 0 5 / 2 0 1 8 10 / 3 1 / 2 0 2 1 10 / 3 1 / 2 0 2 1 6, 7 3 9 . 1 3 1,979,226.17 32,893.832,012,120.00 MS CN B - C h a n d l e r 91 2 8 2 8 H 5 2 UN I T E D S T A T E S T R E A S U R Y 50 0 , 0 0 0 . 0 0 50 0 , 0 0 0 . 0 0 US D US G O V ST 09 / 3 0 / 2 0 1 6 10 / 0 3 / 2 0 1 6 01 / 3 1 / 2 0 2 0 01 / 3 1 / 2 0 2 0 2, 6 0 7 . 0 4 500,874.11 -3,334.11497,540.00 MS CN B - C h a n d l e r 91 2 8 2 8 H 5 2 UN I T E D S T A T E S T R E A S U R Y 1, 4 0 0 , 0 0 0 . 0 0 1, 4 0 0 , 0 0 0 . 0 0 US D US G O V ST 11 / 0 8 / 2 0 1 6 11 / 0 9 / 2 0 1 6 01 / 3 1 / 2 0 2 0 01 / 3 1 / 2 0 2 0 7, 2 9 9 . 7 2 1,401,344.73 -8,232.731,393,112.00 MS CN B - C h a n d l e r 91 2 8 2 8 H 8 6 UN I T E D S T A T E S T R E A S U R Y 1, 8 0 0 , 0 0 0 . 0 0 1, 8 0 0 , 0 0 0 . 0 0 US D US G O V LT 08 / 1 5 / 2 0 1 7 08 / 1 6 / 2 0 1 7 01 / 3 1 / 2 0 2 2 01 / 3 1 / 2 0 2 2 11 , 2 6 2 . 4 3 1,787,954.21 1,929.791,789,884.00 MS CN B - C h a n d l e r 91 2 8 2 8 J 5 0 UN I T E D S T A T E S T R E A S U R Y 1, 2 0 0 , 0 0 0 . 0 0 1, 2 0 0 , 0 0 0 . 0 0 US D US G O V ST 02 / 1 2 / 2 0 1 6 02 / 1 6 / 2 0 1 6 02 / 2 9 / 2 0 2 0 02 / 2 9 / 2 0 2 0 5, 5 1 4 . 9 5 1,202,510.69 -7,850.691,194,660.00 MS CN B - C h a n d l e r 91 2 8 2 8 L 2 4 UN I T E D S T A T E S T R E A S U R Y 2, 8 0 0 , 0 0 0 . 0 0 2, 8 0 0 , 0 0 0 . 0 0 US D US G O V LT 09 / 1 8 / 2 0 1 8 09 / 2 0 / 2 0 1 8 08 / 3 1 / 2 0 2 2 08 / 3 1 / 2 0 2 2 17 , 5 4 7 . 5 5 2,712,257.44 100,314.562,812,572.00 MS CN B - C h a n d l e r 91 2 8 2 8 L 6 5 UN I T E D S T A T E S T R E A S U R Y 2, 2 5 0 , 0 0 0 . 0 0 2, 2 5 0 , 0 0 0 . 0 0 US D US G O V LT 12 / 2 8 / 2 0 1 6 12 / 2 9 / 2 0 1 6 09 / 3 0 / 2 0 2 0 09 / 3 0 / 2 0 2 0 7, 7 7 6 . 6 4 2,239,163.05 -3,585.552,235,577.50 MS CN B - C h a n d l e r 91 2 8 2 8 L 6 5 UN I T E D S T A T E S T R E A S U R Y 27 5 , 0 0 0 . 0 0 27 5 , 0 0 0 . 0 0 US D US G O V LT 03 / 1 5 / 2 0 1 7 03 / 1 7 / 2 0 1 7 09 / 3 0 / 2 0 2 0 09 / 3 0 / 2 0 2 0 95 0 . 4 8 273,349.06 -111.81273,237.25 MS CN B - C h a n d l e r 91 2 8 2 8 L 9 9 UN I T E D S T A T E S T R E A S U R Y 3, 0 0 0 , 0 0 0 . 0 0 3, 0 0 0 , 0 0 0 . 0 0 US D US G O V LT 11 / 0 1 / 2 0 1 7 11 / 0 3 / 2 0 1 7 10 / 3 1 / 2 0 2 0 10 / 3 1 / 2 0 2 0 6, 9 4 9 . 7 3 2,984,879.00 -4,319.002,980,560.00 MS CN B - C h a n d l e r 91 2 8 2 8 R 6 9 UN I T E D S T A T E S T R E A S U R Y 2, 4 0 0 , 0 0 0 . 0 0 2, 4 0 0 , 0 0 0 . 0 0 US D US G O V LT 04 / 1 1 / 2 0 1 9 04 / 1 5 / 2 0 1 9 05 / 3 1 / 2 0 2 3 05 / 3 1 / 2 0 2 3 3, 3 0 3 . 2 8 2,339,392.88 51,151.122,390,544.00 MS CN B - C h a n d l e r 91 2 8 2 8 S 2 7 UN I T E D S T A T E S T R E A S U R Y 60 0 , 0 0 0 . 0 0 60 0 , 0 0 0 . 0 0 US D US G O V LT 06 / 2 8 / 2 0 1 7 06 / 2 9 / 2 0 1 7 06 / 3 0 / 2 0 2 1 06 / 3 0 / 2 0 2 1 18 . 3 4 593,437.03 -799.03592,638.00 MS CN B - C h a n d l e r 91 2 8 2 8 S 2 7 UN I T E D S T A T E S T R E A S U R Y 3, 4 0 0 , 0 0 0 . 0 0 3, 4 0 0 , 0 0 0 . 0 0 US D US G O V LT 01 / 1 7 / 2 0 1 8 01 / 1 8 / 2 0 1 8 06 / 3 0 / 2 0 2 1 06 / 3 0 / 2 0 2 1 10 3 . 9 4 3,327,437.84 30,844.163,358,282.00 MS CN B - C h a n d l e r 91 2 8 2 8 T 3 4 UN I T E D S T A T E S T R E A S U R Y 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D US G O V LT 07 / 2 5 / 2 0 1 7 07 / 2 6 / 2 0 1 7 09 / 3 0 / 2 0 2 1 09 / 3 0 / 2 0 2 1 2, 8 2 7 . 8 7 985,733.01 1,066.99986,800.00 MS CN B - C h a n d l e r 91 2 8 2 8 T H 3 UN I T E D S T A T E S T R E A S U R Y 1, 7 2 5 , 0 0 0 . 0 0 1, 7 2 5 , 0 0 0 . 0 0 US D US G O V ST 09 / 2 9 / 2 0 1 5 09 / 3 0 / 2 0 1 5 07 / 3 1 / 2 0 1 9 07 / 3 1 / 2 0 1 9 6, 2 9 6 . 0 1 1,724,557.62 -1,524.121,723,033.50 MS CN B - C h a n d l e r 91 2 8 2 8 U 6 5 UN I T E D S T A T E S T R E A S U R Y 1, 7 5 0 , 0 0 0 . 0 0 1, 7 5 0 , 0 0 0 . 0 0 US D US G O V LT 10 / 1 9 / 2 0 1 7 10 / 2 0 / 2 0 1 7 11 / 3 0 / 2 0 2 1 11 / 3 0 / 2 0 2 1 2, 5 9 3 . 9 2 1,744,501.57 6,040.931,750,542.50 MS CN B - C h a n d l e r 91 2 8 2 8 U B 4 UN I T E D S T A T E S T R E A S U R Y 1, 7 5 0 , 0 0 0 . 0 0 1, 7 5 0 , 0 0 0 . 0 0 US D US G O V ST 10 / 2 9 / 2 0 1 5 10 / 3 0 / 2 0 1 5 11 / 3 0 / 2 0 1 9 11 / 3 0 / 2 0 1 9 1, 4 8 2 . 2 4 1,747,351.99 -5,489.491,741,862.50 MS CN B - C h a n d l e r 91 2 8 2 8 U F 5 UN I T E D S T A T E S T R E A S U R Y 55 0 , 0 0 0 . 0 0 55 0 , 0 0 0 . 0 0 US D US G O V ST 02 / 2 2 / 2 0 1 6 02 / 2 3 / 2 0 1 6 12 / 3 1 / 2 0 1 9 12 / 3 1 / 2 0 1 9 16 . 8 1 550,045.68 -2,707.68547,338.00 GA A P G L B a l a n c e S h e e t b y L o t ( S h o r t - T e r m P o r t f o l i o ) As o f 0 6 / 3 0 / 2 0 1 9 Su m m a r y * G r o u p e d b y : G e n e r a l L e d g e r G r o u p i n g . * G r o u p s S o r t e d b y : G e n e r a l L e d g e r G r o u p i n g . Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value MS CN B - C h a n d l e r 91 2 8 2 8 U V 0 UN I T E D S T A T E S T R E A S U R Y 1, 2 0 0 , 0 0 0 . 0 0 1, 2 0 0 , 0 0 0 . 0 0 US D US G O V ST 10 / 1 1 / 2 0 1 6 10 / 1 4 / 2 0 1 6 03 / 3 1 / 2 0 2 0 03 / 3 1 / 2 0 2 0 3, 3 9 3 . 4 4 1,199,949.74 -7,821.741,192,128.00 MS CN B - C h a n d l e r 91 2 8 2 8 V 7 2 UN I T E D S T A T E S T R E A S U R Y 1, 8 0 0 , 0 0 0 . 0 0 1, 8 0 0 , 0 0 0 . 0 0 US D US G O V LT 12 / 1 5 / 2 0 1 7 12 / 1 8 / 2 0 1 7 01 / 3 1 / 2 0 2 2 01 / 3 1 / 2 0 2 2 14 , 0 7 8 . 0 4 1,789,261.25 17,074.751,806,336.00 MS CN B - C h a n d l e r 91 2 8 2 8 W 5 5 UN I T E D S T A T E S T R E A S U R Y 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D US G O V LT 10 / 2 0 / 2 0 1 7 10 / 2 3 / 2 0 1 7 02 / 2 8 / 2 0 2 2 02 / 2 8 / 2 0 2 2 6, 2 6 6 . 9 8 997,915.63 5,794.371,003,710.00 MS CN B - C h a n d l e r 91 2 8 2 8 W 5 5 UN I T E D S T A T E S T R E A S U R Y 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D US G O V LT 12 / 1 1 / 2 0 1 7 12 / 1 2 / 2 0 1 7 02 / 2 8 / 2 0 2 2 02 / 2 8 / 2 0 2 2 12 , 5 3 3 . 9 7 1,988,974.41 18,445.592,007,420.00 MS CN B - C h a n d l e r 91 2 8 2 8 W 8 9 UN I T E D S T A T E S T R E A S U R Y 3, 0 0 0 , 0 0 0 . 0 0 3, 0 0 0 , 0 0 0 . 0 0 US D US G O V LT 12 / 2 6 / 2 0 1 7 12 / 2 8 / 2 0 1 7 03 / 3 1 / 2 0 2 2 03 / 3 1 / 2 0 2 2 14 , 1 3 9 . 3 4 2,973,873.53 39,356.473,013,230.00 MS CN B - C h a n d l e r 91 2 8 2 8 X U 9 UN I T E D S T A T E S T R E A S U R Y 1, 3 4 5 , 0 0 0 . 0 0 1, 3 4 5 , 0 0 0 . 0 0 US D US G O V ST 07 / 0 6 / 2 0 1 7 07 / 1 1 / 2 0 1 7 06 / 1 5 / 2 0 2 0 06 / 1 5 / 2 0 2 0 88 1 . 9 7 1,343,852.89 -4,784.341,339,068.55 MS CN B - C h a n d l e r 91 2 8 2 8 X W 5 UN I T E D S T A T E S T R E A S U R Y 1, 5 0 0 , 0 0 0 . 0 0 1, 5 0 0 , 0 0 0 . 0 0 US D US G O V LT 04 / 2 4 / 2 0 1 8 04 / 2 5 / 2 0 1 8 06 / 3 0 / 2 0 2 2 06 / 3 0 / 2 0 2 2 71 . 3 3 1,456,149.81 45,725.191,501,875.00 MS CN B - C h a n d l e r 91 2 8 2 8 X W 5 UN I T E D S T A T E S T R E A S U R Y 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D US G O V LT 09 / 0 7 / 2 0 1 8 09 / 1 0 / 2 0 1 8 06 / 3 0 / 2 0 2 2 06 / 3 0 / 2 0 2 2 95 . 1 1 1,939,779.09 62,720.912,002,500.00 MS CN B - C h a n d l e r 92 8 2 6 C A B 8 VI S A I N C 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 12 / 2 8 / 2 0 1 6 01 / 0 3 / 2 0 1 7 12 / 1 4 / 2 0 2 0 12 / 1 4 / 2 0 2 0 1, 0 3 8 . 8 9 999,275.47 2,294.531,001,570.00 MS CN B - C h a n d l e r 92 8 2 6 C A C 6 VI S A I N C 1, 0 0 0 , 0 0 0 . 0 0 1, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 12 / 2 0 / 2 0 1 8 12 / 2 4 / 2 0 1 8 12 / 1 4 / 2 0 2 2 12 / 1 4 / 2 0 2 2 1, 3 2 2 . 2 2 984,446.27 39,513.731,023,960.00 MS CN B - C h a n d l e r 93 1 1 4 2 E K 5 WA L M A R T I N C 2, 0 0 0 , 0 0 0 . 0 0 2, 0 0 0 , 0 0 0 . 0 0 US D CO R P LT 04 / 2 9 / 2 0 1 9 04 / 3 0 / 2 0 1 9 05 / 2 6 / 2 0 2 3 06 / 2 6 / 2 0 2 3 94 4 . 4 4 2,053,684.38 48,375.622,102,060.00 MS CN B - C h a n d l e r -- - -- - 22 1 , 7 8 5 , 0 0 0 . 0 0 21 5 , 0 4 4 , 7 9 7 . 9 0 US D -- - -- - -- - -- - -- - -- - 98 8 , 4 2 3 . 5 0 214,601,622.56 2,100,057.76216,701,680.32 Ge n e r a l L e d g e r G r o u p i n g , Ac c o u n t Id e n t i f i e r , De s c r i p t i o n Or i g i n a l U n i t s , Fa c t o r i z e d U n i t s Cu r r e n c y , Se c u r i t y T y p e BS C l a s s , Tr a d e D a t e Se t t l e D a t e , Am o r t T a r g e t Da t e Ma t u r i t y D a t e , Ac c r u e d I n t e r e s t Book Value,Net Unrealized Gain/LossMarket Value -- - -- - -- - -- - 22 1 , 8 6 8 , 1 8 9 . 4 4 21 5 , 1 2 7 , 9 8 7 . 3 4 US D -- - -- - -- - -- - -- - -- - 98 8 , 4 2 3 . 5 0 214,684,812.00 2,100,057.76216,784,869.76 GA A P G L B a l a n c e S h e e t b y L o t ( S h o r t - T e r m P o r t f o l i o ) As o f 0 6 / 3 0 / 2 0 1 9 * D o e s n o t L o c k D o w n . * S h o w i n g t r a n s a c t i o n s w i t h T r a d e D a t e w i t h i n s e l e c t e d d a t e r a n g e . * W e i g h t e d b y : A b s o l u t e V a l u e o f P r i n c i p a l . * M M F t r a n s a c t i o n s a r e c o l l a p s e d . * T h e T r a n s a c t i o n D e t a i l / T r a d i n g A c t i v i t y r e p o r t s p r o v i d e o u r m o s t u p - t o - d a t e t r a n s a c t i o n a l d e t a i l s . A s s u c h , t h e s e r e p o r t s a r e s u b j e c t t o c h a n g e e v e n a f t e r t h e o t h e r r e p o r t s o n t h e w e b s i t e h a v e b e e n l o c k e d d o w n . W h i l e t h e s e r e p o r t s c a n b e u s e f u l t o o l s i n u n d e r s t a n d i n g r e c e n t a c t i v i t y , du e t o t h e i r d y n a m i c n a t u r e w e d o n o t r e c o m m e n d u s i n g t h e m f o r b o o k i n g j o u r n a l e n t r i e s o r r e c o n c i l i a t i o n . Ac c o u n t Id e n t i f i e r D e s c r i p t i o n Cu r r e n t U n i t s C u r r e n c y T r a n s a c t i o n T y p e T r a d e D a t e S e t t l e D a t e F i n a l Ma t u r i t y Pr i c e Principal A c c r u e d I n t e r e s t Amount CN B - C h a n d l e r 02 0 0 7 H A C 5 A L L Y A 1 7 2 A 3 -3 7 , 4 8 4 . 8 1 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 8 / 1 6 / 2 0 2 1 -- - -37,484.81 0.00 37,484.81 CN B - C h a n d l e r 02 0 0 7 P A C 7 A L L Y A 1 7 1 A 3 -1 4 , 9 6 9 . 7 1 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 2 1 -- - -14,969.71 0.00 14,969.71 CN B - C h a n d l e r 02 0 0 7 Y A C 8 A L L Y A 1 7 5 A 3 -3 7 , 0 3 7 . 5 1 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 3 / 1 5 / 2 0 2 2 -- - -37,037.51 0.00 37,037.51 CN B - C h a n d l e r 31 3 0 A 8 D B 6 F E D E R A L H O M E L O A N B A N K S -3 , 1 3 0 , 0 0 0 . 0 0 U S D M a t u r i t y 06 / 2 1 / 2 0 1 9 0 6 / 2 1 / 2 0 1 9 0 6 / 2 1 / 2 0 1 9 1 0 0 . 0 0 0 - 3 , 1 3 0 , 0 0 0 . 0 0 0.00 3,130,000.00 CN B - C h a n d l e r 31 3 3 7 9 E E 5 F E D E R A L H O M E L O A N B A N K S -1 , 7 5 0 , 0 0 0 . 0 0 U S D M a t u r i t y 06 / 1 4 / 2 0 1 9 0 6 / 1 4 / 2 0 1 9 0 6 / 1 4 / 2 0 1 9 1 0 0 . 0 0 0 - 1 , 7 5 0 , 0 0 0 . 0 0 0.00 1,750,000.00 CN B - C h a n d l e r 31 3 3 8 3 4 G 3 F E D E R A L H O M E L O A N B A N K S 2,0 0 0 , 0 0 0 . 0 0 U S D B u y 06 / 1 0 / 2 0 1 9 0 6 / 1 1 / 2 0 1 9 0 6 / 0 9 / 2 0 2 3 1 0 0 . 4 8 7 2,0 0 9 , 7 4 0 . 0 0 236.11 - 2 , 0 0 9 , 9 7 6 . 1 1 CN B - C h a n d l e r 31 3 3 E K S N 7 F E D E R A L F A R M C R E D I T B A N K S FU N D I N G C O R P 4,0 0 0 , 0 0 0 . 0 0 U S D B u y 06 / 2 1 / 2 0 1 9 0 6 / 2 6 / 2 0 1 9 0 6 / 2 6 / 2 0 2 3 9 9 . 5 3 5 3,9 8 1 , 4 0 0 . 0 0 0.00 - 3 , 9 8 1 , 4 0 0 . 0 0 CN B - C h a n d l e r 43 8 1 1 B A C 8 H A R O T 1 7 2 A 3 -5 0 , 7 9 4 . 4 6 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 8 / 1 6 / 2 0 2 1 -- - -50,794.46 0.00 50,794.46 CN B - C h a n d l e r 43 8 1 3 F A C 7 H A R O T 1 7 4 A 3 -3 0 , 8 1 4 . 7 6 U S D P r i n c i p a l P a y d o w n 0 6 / 2 1 / 2 0 1 9 0 6 / 2 1 / 2 0 1 9 1 1 / 2 2 / 2 0 2 1 -- - -30,814.76 0.00 30,814.76 CN B - C h a n d l e r 43 8 1 4 T A C 6 H A R O T 1 7 1 A 3 -1 9 , 0 6 6 . 8 6 U S D P r i n c i p a l P a y d o w n 0 6 / 2 1 / 2 0 1 9 0 6 / 2 1 / 2 0 1 9 0 7 / 2 1 / 2 0 2 1 -- - -19,066.86 0.00 19,066.86 CN B - C h a n d l e r 44 9 3 0 U A D 8 H A R T 1 6 A A 3 -1 2 , 9 1 8 . 3 0 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 9 / 1 5 / 2 0 2 0 -- - -12,918.30 0.00 12,918.30 CN B - C h a n d l e r 44 9 3 1 P A D 8 H A R T 1 7 A A 3 -2 3 , 2 4 8 . 2 5 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 8 / 1 6 / 2 0 2 1 -- - -23,248.25 0.00 23,248.25 CN B - C h a n d l e r 44 9 3 2 G A D 7 H A R T 1 7 B A 3 -1 1 , 8 2 9 . 7 6 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 1 / 1 8 / 2 0 2 2 -- - -11,829.76 0.00 11,829.76 CN B - C h a n d l e r 47 7 8 8 B A D 6 J D O T 1 7 B A 3 -1 6 , 5 1 9 . 3 5 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 1 0 / 1 5 / 2 0 2 1 -- - -16,519.35 0.00 16,519.35 CN B - C h a n d l e r 47 7 8 8 C A B 8 J D O T 2 0 1 8 A 2 -8 7 , 9 4 5 . 2 2 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 1 0 / 1 5 / 2 0 2 0 -- - -87,945.22 0.00 87,945.22 CN B - C h a n d l e r 60 9 3 4 N 1 0 4 F E D E R A T E D G O V T O B L I N S T 5,9 9 2 , 8 7 9 . 8 3 U S D B u y -- - -- - 06 / 3 0 / 2 0 1 9 1 . 0 0 0 5,9 9 2 , 8 7 9 . 8 3 0.00 - 5 , 9 9 2 , 8 7 9 . 8 3 CN B - C h a n d l e r 60 9 3 4 N 1 0 4 F E D E R A T E D G O V T O B L I N S T -8 , 0 2 7 , 1 1 7 . 5 0 U S D S e l l -- - -- - 06 / 3 0 / 2 0 1 9 1 . 0 0 0 - 8 , 0 2 7 , 1 1 7 . 5 0 0.00 8,027,117.50 CN B - P F M 60 9 3 4 N 1 0 4 F E D E R A T E D G O V T O B L I N S T 0. 2 7 U S D B u y 06 / 0 4 / 2 0 1 9 0 6 / 0 4 / 2 0 1 9 0 6 / 3 0 / 2 0 1 9 1 . 0 0 0 0.27 0.00 -0.27 CN B - C h a n d l e r 65 4 7 8 G A B 6 N A R O T 1 7 B A 2 A -6 0 , 8 9 5 . 4 0 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 5 / 1 5 / 2 0 2 0 -- - -60,895.40 0.00 60,895.40 CN B - C h a n d l e r 65 4 7 8 V A D 9 N A R O T 1 6 B A 3 -9 4 , 0 2 8 . 0 0 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 1 / 1 5 / 2 0 2 1 -- - -94,028.00 0.00 94,028.00 CN B - C h a n d l e r 89 2 3 6 T F S 9 T O Y O T A M O T O R C R E D I T C O R P 1,0 0 0 , 0 0 0 . 0 0 U S D B u y 06 / 1 4 / 2 0 1 9 0 6 / 1 8 / 2 0 1 9 0 1 / 0 8 / 2 0 2 4 1 0 4 . 0 4 9 1,0 4 0 , 4 9 0 . 0 0 14,888.89 - 1 , 0 5 5 , 3 7 8 . 8 9 CN B - C h a n d l e r 89 2 3 7 W A D 9 T A O T 1 6 C A 3 -1 0 , 3 7 0 . 5 0 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 8 / 1 7 / 2 0 2 0 -- - -10,370.50 0.00 10,370.50 CN B - C h a n d l e r 89 2 3 8 B A B 8 T A O T 1 8 A A 2 A -1 5 5 , 6 8 1 . 4 1 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 1 0 / 1 5 / 2 0 2 0 -- - -1 5 5 , 6 8 1 . 4 1 0.00 155,681.41 CN B - C h a n d l e r 89 2 3 8 M A D 0 T A O T 1 7 A A 3 -1 4 , 0 4 3 . 1 3 U S D P r i n c i p a l P a y d o w n 0 6 / 1 5 / 2 0 1 9 0 6 / 1 5 / 2 0 1 9 0 2 / 1 6 / 2 0 2 1 -- - -14,043.13 0.00 14,043.13 CN B - C h a n d l e r 91 1 5 9 H H V 5 U . S . B A N C O R P 1,0 0 0 , 0 0 0 . 0 0 U S D B u y 06 / 1 4 / 2 0 1 9 0 6 / 1 8 / 2 0 1 9 0 2 / 0 5 / 2 0 2 4 1 0 3 . 9 3 0 1,0 3 9 , 3 0 0 . 0 0 12,562.50 - 1 , 0 5 1 , 8 6 2 . 5 0 -- - -- - -- - 40 8 , 1 1 5 . 1 6 U S D - - - -- - -- - 09 / 2 5 / 2 0 2 0 -- - 479,045.17 27,687.50 -506,732.67 GA A P T r a d i n g A c t i v i t y ( S h o r t - T e r m P o r t f o l i o ) 06 / 0 1 / 2 0 1 9 - 0 6 / 3 0 / 2 0 1 9 CI T Y O F Ne w p o r t B e a c h GL O S S A R Y O F T E R M S     Ac c r u e d  In t e r e s t  ‐  Th e  in t e r e s t  th a t  ha s  ac c u m u l a t e d  on  a  bo n d  si n c e  th e  la s t  in t e r e s t  pa y m e n t  up  to ,  bu t  no t  in c l u d i n g ,  th e  se t t l e m e n t  da t e .  Accrued  interest  occurs  as  a  result  of  the   di f f e r e n c e  in  ti m i n g  of  ca s h  fl o w s  an d  th e  me a s u r e m e n t  of  th e s e  ca s h  fl o w s .    Am o r t i z e d  Co s t  ‐  Th e  am o u n t  at  wh i c h  an  in v e s t m e n t  is  ac q u i r e d ,  ad j u s t e d  fo r  ac c r e t i o n ,  am o r t i z a t i o n ,  an d  co l l e c t i o n  of  ca s h .    Bo o k  Yi e l d  ‐Th e  me a s u r e  of  a  bo n d ’ s  re c u r r i n g  re a l i z e d  in v e s t m e n t  in c o m e  th a t  co m b i n e s  bo t h  th e  bo n d ’ s  co u p o n  re t u r n  pl u s  it  am o r t i z a t i o n .    Av e r a g e  Cr e d i t  Ra t i n g  ‐  Th e  av e r a g e  cr e d i t  wo r t h i n e s s  of  a  po r t f o l i o ,  we i g h t e d  in  pr o p o r t i o n  to  th e  do l l a r  am o u n t  th a t  is  in v e s t e d  in  th e  po r t f o l i o .    Co n v e x i t y  ‐  Th e  re l a t i o n s h i p  be t w e e n  bo n d  pr i c e s  an d  bo n d  yi e l d s  th a t  de m o n s t r a t e s  ho w  th e  du r a t i o n  of  a  bo n d  ch a n g e s  as  th e  in t e r e s t  ra t e  changes.   Cr e d i t  Ra t i n g  ‐  An  as s e s s m e n t  of  th e  cr e d i t  wo r t h i n e s s  of  an  en t i t y  wi t h  re s p e c t  to  a  pa r t i c u l a r  fi n a n c i a l  ob l i g a t i o n .  Th e  cr e d i t  ra t i n g  is  in v e r s e l y  related  to  the  possibility  of  debt   de f a u l t .    Du r a t i o n  ‐  A  me a s u r e  of  th e  ex p o s u r e  to  in t e r e s t  ra t e  ri s k  an d  se n s i t i v i t y  to  pr i c e  fl u c t u a t i o n  of  fi x e d ‐in c o m e  in v e s t m e n t s .  Du r a t i o n  is  ex p r e s s e d  as  a  number  of  years.   In c o m e  Re t u r n  ‐  Th e  pe r c e n t a g e  of  th e  to t a l  re t u r n  ge n e r a t e d  by  th e  in c o m e  fr o m  in t e r e s t  or  di v i d e n d s .    Or i g i n a l  Co s t  ‐  Th e  or i g i n a l  co s t  of  an  as s e t  ta k e s  in t o  co n s i d e r a t i o n  al l  of  th e  co s t s  th a t  ca n  be  at t r i b u t e d  to  it s  pu r c h a s e  an d  to  pu t t i n g  th e  as s e t  to  use.   Pa r  Va l u e  ‐  Th e  fa c e  va l u e  of  a  bo n d .  Pa r  va l u e  is  im p o r t a n t  fo r  a  bo n d  or  fi x e d ‐in c o m e  in s t r u m e n t  be c a u s e  it  de t e r m i n e s  it s  ma t u r i t y  va l u e  as  well  as  the  dollar  value  of  coupon   pa y m e n t s .    Pr i c e  Re t u r n  ‐  Th e  pe r c e n t a g e  of  th e  to t a l  re t u r n  ge n e r a t e d  by  ca p i t a l  ap p r e c i a t i o n  du e  to  ch a n g e s  in  th e  ma r k e t  pr i c e  of  an  as s e t .    Sh o r t ‐Te r m  Po r t f o l i o  ‐   Th e  ci t y ’ s  in v e s t m e n t  po r t f o l i o  wh o s e  se c u r i t i e s ’  av e r a g e  ma t u r i t y  is  be t w e e n  1  an d  5  ye a r s .    Ta r g e t e d ‐Ma t u r i t i e s  Po r t f o l i o  ‐   Th e  ci t y ’ s  in v e s t m e n t  po r t f o l i o  wh o s e  se c u r i t i e s ’  av e r a g e  ma t u r i t y  is  be t w e e n  0  an d  3  ye a r s .    To t a l  Re t u r n  ‐  Th e  ac t u a l  ra t e  of  re t u r n  of  an  in v e s t m e n t  ov e r  a  gi v e n  ev a l u a t i o n  pe r i o d .  To t a l  re t u r n  is  th e  co m b i n a t i o n  of  in c o m e  an d  pr i c e  re t u r n .    Un r e a l i z e d  Ga i n s / ( L o s s )  ‐  A  pr o f i t a b l e / ( l o s i n g )  po s i t i o n  th a t  ha s  ye t  to  be  ca s h e d  in .  Th e  ac t u a l  ga i n / ( l o s s )  is  no t  re a l i z e d  un t i l  th e  po s i t i o n  is  cl o s e d .  A  position  with  an  unrealized   ga i n  ma y  ev e n t u a l l y  tu r n  in t o  a  po s i t i o n  wi t h  an  un r e a l i z e d  lo s s ,  as  th e  ma r k e t  fl u c t u a t e s  an d  vi c e  ve r s a .    We i g h t e d  Av e r a g e  Li f e  (W A L )  ‐  Th e  av e r a g e  nu m b e r  of  ye a r s  fo r  wh i c h  ea c h  do l l a r  of  un p a i d  pr i n c i p a l  on  an  in v e s t m e n t  re m a i n s  ou t s t a n d i n g ,  weighted  by  the  size  of  each   pr i n c i p a l  pa y o u t .    Yi e l d  ‐  Th e  in c o m e  re t u r n  on  an  in v e s t m e n t .  Th i s  re f e r s  to  th e  in t e r e s t  or  di v i d e n d s  re c e i v e d  fr o m  a  se c u r i t y  an d  is  ex p r e s s e d  as  a  pe r c e n t a g e  based  on  the  investment's  cost  and  its   cu r r e n t  ma r k e t  va l u e .    Yi e l d  to  Ma t u r i t y  at  Co s t  (Y T M  @  Co s t )  ‐  Th e  in t e r n a l  ra t e  of  re t u r n  of  a  se c u r i t y  gi v e n  th e  am o r t i z e d  pr i c e  as  of  th e  re p o r t  da t e  an d  fu t u r e  ex p e c t e d  cash  flows.   Yi e l d  to  Ma t u r i t y  at  Ma r k e t  (Y T M   @  Ma r k e t )  ‐  Th e  in t e r n a l  ra t e  of  re t u r n  of  a  se c u r i t y  gi v e n  th e  ma r k e t  pr i c e  as  of  th e  re p o r t  da t e  an d  fu t u r e  expected  cash  flows.   Ye a r s  to  Ef f e c t i v e  Ma t u r i t y  – Th e  av e r a g e  ti m e  it  ta k e s  fo r  se c u r i t i e s  in  a  po r t f o l i o  to  ma t u r e ,  ta k i n g  in t o  ac c o u n t  th e  po s s i b i l i t y  th a t  an y  of  th e  bonds  might  be  called  back  to  the   is s u e r .    Ye a r s  to  Fi n a l  Ma t u r i t y  ‐  Th e  av e r a g e  ti m e  it  ta k e s  fo r  se c u r i t i e s  in  a  po r t f o l i o  to  ma t u r e ,  we i g h t e d  in  pr o p o r t i o n  to  th e  do l l a r  am o u n t  th a t  is  in v e s t e d  in  the  portfolio.  Weighted   av e r a g e  ma t u r i t y  me a s u r e s  th e  se n s i t i v i t y  of  fi x e d ‐in c o m e  po r t f o l i o s  to  in t e r e s t  ra t e  ch a n g e s .   11/8/19 Sc h e d u l e d D a t e A g e n d a T i t l e A g e n d a D e s c r i p t i o n Th u r s d a y , N o v e m b e r 1 4 , 2 0 1 9 Pr e l i m i n a r y P e n s i on F u n d i n g R e c o m m e n d a t i on - F i s c a l Y e a r 2 0 2 0 - 2 1 S t a f f w il l up d a t e t h e c o m m i t t e e w i t h t h e latest information reg arding pension ac t u a r i a l v a l u a t i o n s a n d C a l P E R S c a p i t a l m a r k e t a s s u m p t i o n s . In v e s t m e n t P o l i c y R e v i e w S t af f a n d / o r o n e o r m o r e i n v e s t m e n t a d v i s ors will discuss the City’s investment po l i c y ’ s c o n f o r m a n c e t o t h e o v e r a l l o b j e c t i v e s o f p r e s e r v a t i o n o f p r i n c i p a l , li q u i d i t y a n d r e t u r n , a n d i t s r e l e v a n c e t o c u r r e n t l a w a n d f i n a n c i a l a n d ec o n o m i c t r e n d s . In v e s t m e n t P e r f o r m a n c e R e v i e w S t a f f a n d / o r o n e o r m o r e in v e s t m e n t a d v i s ors will descr ibe the performance of th e C i t y ' s i n v e s t m e n t p o r t f o l i o . Re v i e w a n d D i s c u s s F i n a n c e C o m m i t t e e W o r k P l a n S t a f f a n d F i n a n c e C o m m i t t e e s h o u l d r e v i e w t h e p r o p o s e d w o r k p l a n a n d a d j u s t as n e c e s s a r y . Th u r s d a y , D e c e m b e r 1 2 , 2 0 1 9 Re v i e w o f O P E B A c t u a r i a l V a l u a t i o n Ac t u a r y w i l l p r o v i d e a r e v i e w o f t h e City's latest reti ree insurance OPEB ob l i g a t i o n . Re s e r v e S t a t u s U p d a t e St a f f w i l l p r ov i d e a n u p d a t e o f r e s e r v e s b a l a n c e s relative to target balances an d d i s c u s s a d j u s t m e n t s a s p e s s a r y . Tu e s d a y , J a n u a r y 1 4 , 2 0 2 0 Co u n c i l S t u d y S e s s i o n - E c o n o m i c U p d a t e b y B e a c o n E c o n o m i c s D r . C h r i s T h o r n b e r g t o p r o v i d e C o u n c i l a b r i e f r e g i o n a l e c o n o m i c u p d ate. Fi n a n c e C o m m i t t e e A t t e n d a n c e O p t i o n a l Th u r s d a y , J a n u a r y 1 6 , 2 0 2 0 OP E B A c t u a r i a l V a l u a t i o n R e v i e w O P E B A c t u a r i a l V a l u a t i o n Re s e r v e S t a t u s U p d a t e S t a ff w i l l p r o v i de a n u p d a t e o f r e s e r v e s b a l a n c e s r e l a t i v e t o t a r g e t b a l a n c e s an d d i s c u s s a d j u s t m e n t s a s p e s s a r y . Re v i e w p r o p o s e d c h a n g e s t o C o u n c i l R e s e r v e P o l i c y ( F - 2 ) a n d o t h e r s a s ne c e s s a r y . St a f f w i l l p r ov i d e r e c o m m e n d e d a d j u s t m e n t s t o Council Reserve Policy (F-2) TO T , C h a r t e r T a x a n d O t h e r A u d i t s Up d a t e S t a f f w il l up d a t e t h e c o m m i t t e e o n t h e T O T , charter tax and other audit fi n d i n g s p e r f o r m e d t o d a t e . Bu d g e t A m e n d m e n t s f o r Q u a r t e r E n d i n g D e c e m b e r 3 1 , 2 0 1 9 . Sa t u r d a y , J a n u a r y 2 5 , 2 0 2 0 Sp e c i a l C o u n c i l M e e t i n g - C o u n c i l P l a n n i n g S e s s i o n (T e n t a t i v e ) St a f f w i l l p r es e n t s t a t u s a n d f u n d i n g o f major programs planned for the ca l e n d a r y e a r . Fi n a n c e C o m m i t t e e A t t e n d a n c e O p t i o n a l Th u r s d a y , F e b r u a r y 1 3 , 2 0 2 0 Re v i e w o f P u b l i c W o r k s D ep a r t m e n t B u d g e t P ub l i c W o r k s w i l l p r es e n t t h e c o n t o u r s o f i t s F Y 1 9 - 2 0 b u d g e t t o i n f o r m t h e Co m m i t t e e ' s u n d e r s t a n d i n g o f i t s o p e r a t i o n i n a d v a n c e o f t h e F Y 2 0 - 2 1 b u d g e t pr e p a r a t i o n . Fa c i l i t i e s F i n a n c i a l P l an ( F F P ) a n d H a r b o r & B e a c h e s M a s t e r P l a n U p d a t e s S t a ff w i l l p r e s en t a d r a f t o f F a c il i t i e s a n d H a rbors/Be aches Financial Plans re v i e w i n g t h e t i m i n g , m e a n s o f f i n a n c i n g , a n d f i s c a l i m p a c t s a s s o c i a t e d w i t h fu n d i n g C o u n c i l p r i o r i t i z e d c a p i t a l p r o j e c t s . Re v i e w a l l o c a t i on o f T O T R e v e n u e t o V i s i t N e w p o r t B ea c h T h e c o m m i t t e e w il l r e v i e w t h e h i s t o r i c a l r e venue allo cation of TOT reven ue to Vi s i t N e w p o r t B e a c h Fe e S t u d y U p d a t e S t a f f wi l l p r e s en t t h e M a s t e r F e e S c h e d u l e to the Finance Committee and su b s e q u e n t l y w il l p r e s en t t o t h e Ci t y C o u n c i l . Lo n g R a n g e F i s c a l F o r e c a s t S t a f f w il l p r o v i de a n u p d a t e t o t h e l a t e s t v e r s i o n o f t h e L R F F . Ja n u a r y Fe b r u a r y Ma r c h Ci t y o f N e w p o r t B e a c h F i n a n c e C o m m i t t e e W o r k P l a n 2 0 1 9 - 2 0 De c e m b e r ( T e n t a t i v e l y C a n c e l l e d ) No v e m b e r I: \ U s e r s \ F I N \ S h a r e d \ A d m i n \ F i n a n c e  Co m m i t t e e \ W O R K P L A N \ 2 0 1 9 \ 2 0 1 9  FC  Wo r k p l a n . x l s x 1 11/8/19 Sc h e d u l e d D a t e A g e n d a T i t l e A g e n d a D e s c r i p t i o n Ci t y o f N e w p o r t B e a c h F i n a n c e C o m m i t t e e W o r k P l a n 2 0 1 9 - 2 0 Tu e s d a y , M a r c h 1 0 , 2 0 2 0 Co u n c i l S t u d y S e s s i o n - C a p i t a l I m p r o v e m e n t P l a n E a r l y L o o k Fi n a n c e C o m m i t t e e A t t e n d a n c e O p t i o n a l Th u r s d a y , M a r c h 1 2 , 2 0 2 0 Fi n a n c i a l S t a t e m e n t A u d i t R e s u l t s & R e l a t e d C o m m u n i c a t i o n Re v i e w o f P o l i c e D ep a r t m e n t B u d g e t T h e Po l i c e D ep a r t m e n t w il l p r e s en t t h e c o n t o u r s o f i t s F Y 1 9 - 2 0 b u d g e t t o in f o r m t h e C o m m i t t e e ' s u n d e r s t a n d i n g o f i t s o p e r a t i o n i n a d v a n c e o f t h e F Y 2 0 - 21 b u d g e t p r e p a r a t i o n . De v e l o p m e n t A g r e e m e n t F e e s R e v i e w d e v e l o p m e n t a g r e e m e n t f e e s a n d h o w t h e y a r e u s e d t o f u n d C i t y pr o g r a m s . Re v i e w o f P o l i c y F - 9 , C i t y V eh i c l e / E q u i p m e n t Re p l a c e m e n t G u i d e l i ne s C o m m i t t e e w il l r e v i e w an d c o m m e n t a n d c u r r ent policy provis ions. Dis c u s s R e v e n u e A s s u m p t i o n s S t af f w i l l p r o v i de o f a n o v e r v i e w o f r e v e n u e a s s u m p t i o n s f o r t h e F Y 2 0 2 0 - 2 1 Pr o p o s e d B u d g e t . Th u r s d a y , A p r i l 1 6 , 2 0 2 0 Pr o p o s e d F Y 2 0 2 0 - 2 1 B u d g e t O v e r v i e w S t a ff w i l l p r o v i de a n o v e r v i e w o f t h e P r o p o s e d F Y 2 0 2 0 - 2 1 O p e r a t i n g B u d g e t . Bu d g e t A m e n d m e n t s f o r Q u a r t e r E n d i n g M a rc h 3 1 , 2 0 2 0 S t a f f w il l r e p o r t on t h e b u d g e t a m e n d m e n t s f o r t h e p r i o r q u a r t e r . Th u r s d a y , A p r i l 3 0 , 2 0 2 0 Pr o p o s e d F Y 2 0 2 0 - 2 1 B u d g e t O v e r v i e w ( T e n t a t i v e - I f N e e d e d ) T e n t a t i v e m e e t i n g ( i f n e e d e d ) t o a n s w e r f o l l o w - u p q u e s t i o n s c o n c e r n i ng the FY 20 2 0 - 2 1 b u d g e t . Tu e s d a y , M a y 1 2 , 2 0 2 0 Jo i n t C o u n c i l / F i n a n c e C o m m i t t e e S t u d y S e s s i o n - 1 s t C o u n c i l R e v i e w o f Pr o p o s e d B u d g e t Re v i e w P r o p o s e d B u d g e t . Th u r s d a y , M a y 1 4 , 2 0 2 0 In t e r n a l A u d i t P r o g r a m U p d a t e Fi n a n c e C o m m i t t e e t o d e v e l o p w r i t t e n c o m m e n t o n C i t y M a n a g e r ' s P r o p o s e d Bu d g e t . Pu r s u a n t t o B u d g e t P o l i c y F - 3 . Tu e s d a y , M a y 2 6 , 2 0 2 0 Co u n c i l S t u d y S e s s i o n - 2 n d C o u n c i l R e v i e w o f P r o p o s e d B u d g e t i f n e c e s s a r y R e v i e w P r o p o s e d B u d g e t Fi n a n c e C o m m i t t e e A t t e n d a n c e O p t i o n a l Th u r s d a y , M a y 2 8 , 2 0 2 0 Re s e r v e d i f N e c e s s a r y Tu e s d a y , J u n e 0 9 , 2 0 2 0 Ci t y C o u n c i l B u d g e t A d o p t i o n Fi n a n c e C o m m i t t e e A t t e n d a n c e O p t i o n a l Th u r s d a y , J u n e 1 1 , 2 0 2 0 In t e r n a l A u d i t P r o g r a m U p d a t e A u d i t o r s t o p r o v i d e a n o v e r v i e w o f e n t e r p r i s e r i s k a s s e s s m e n t s a n d d i s c u s s ne x t s t e p s Th u r s d a y , J u n e 2 5 , 2 0 2 0 Re s e r v e d i f N e c e s s a r y Ju n e Ap r i l Ma y I: \ U s e r s \ F I N \ S h a r e d \ A d m i n \ F i n a n c e  Co m m i t t e e \ W O R K P L A N \ 2 0 1 9 \ 2 0 1 9  FC  Wo r k p l a n . x l s x 2