BOARD MEETING DATE: March 7, 2003
AGENDA NO. 25

Investment Oversight Committee

SYNOPSIS: 

The Investment Oversight Committee met Friday, February 21, 2003 and discussed various issues detailed in the Committee report. The next Investment Oversight Committee meeting is scheduled for Friday, May 16, 2003 at 12:00 noon in Conference Room CC8.

RECOMMENDED ACTION:

Receive and file this report.

Michael D. Antonovich, Chair
Investment Oversight Committee

Attendance: Present were Committee members Michael Antonovich, Gary Burton, William S. Craycraft, and David E. Ertel. Absent were Committee members Fred Aguiar and Paul Sundeen.

Investment Committee Action Items:

Quarterly Report of Investments: Reviewed the quarterly investment report to the Governing Board. For the month of December 2002, the AQMD’s weighted average yield on total investments of $270,761,240, from all sources, was 2.25%. The allocation by investment type was 85.9% in the Los Angeles County Pooled Surplus Investment Fund (PSI); 11.3% in the State of California Local Agency Investment Fund (LAIF); and 2.8% in Federal Agency securities. The Committee discussed AQMD’s recent efforts to further diversify its investments through an increase in its LAIF investment and the purchase of Federal Agency securities. The Committee approved the quarterly report.

Approval of Annual Investment Policy and Delegation of Authority to Appointed Treasurer to Invest AQMD Funds: The Committee reviewed the Annual Investment Policy, which is unchanged from the current year, and discussed the renewal of its delegation of authority to its treasurer. In addition, staff proposed that the volunteer members of the Committee receive compensation ($100 per diem) and travel reimbursement for attendance at quarterly Committee meetings. This recommendation is in-line with Board policy on Board Advisory Group compensation. The AQMD Annual Investment Policy, the reauthorization of the Los Angeles County Treasurer to invest and reinvest AQMD funds and meeting compensation for voluntary members was recommended for approval at the March 7, 2003 meeting of the Governing Board.

Investment Committee Discussion Items:

Financial Market Update: Terry McGuire (Sperry Capital) briefed the Committee on the current interest rate market. In summary, Mr. McGuire stated that little has changed since his last briefing in November. Leading indicators for January were revised to reflect 0.1% decline. The U.S. trade deficit widened to $44.24 billion in December, which was $5.7 billion higher than expected by economist. The January Producer Price Index (PPI) rose 1.6% after declines in December. Jobless claims for the week ending 2/15 rose by 21,000 to 402,000, which was larger than expected. The January US Consumer Price Index (CPI) advanced 0.3% from a 0.1% increase in December. This was slightly less than the 0.4% increase expected by economists.

Calendar Year 2003 Committee Meeting Dates: For the remainder of CY 2003 the Committee has scheduled Friday, May 16, Friday, August 15 and Friday, November 21 for the quarterly Investment Oversight meetings.

Other Business: None

Public Comment: None

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