BOARD MEETING DATE: March 5, 2004
AGENDA NO. 25

Investment Oversight Committee

SYNOPSIS:

The Investment Oversight Committee met Friday, February 20, 2004 and discussed various issues detailed in the Committee report. The next Investment Oversight Committee meeting is scheduled for Friday, May 21, 2004 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, William S. Craycraft, David E. Ertel and Paul Sundeen. Absent was Committee member Gary Burton.

Investment Committee Action Items:

Quarterly Report of Investments: Reviewed the quarterly investment report to the Governing Board. For the month of December 2003, the AQMD’s weighted average yield on total investments of $235,578,991, from all sources, was 1.42%. The allocation by investment type was 74.8% in the Los Angeles County Pooled Surplus Investment Fund (PSI); 16.7% in the State of California Local Agency Investment Fund (LAIF); and 8.5% in 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. The AQMD Annual Investment Policy and the reauthorization of the Los Angeles County Treasurer to invest and reinvest AQMD funds was recommended for approval at the March 5, 2004 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 the economy is gaining strength as the result of productivity gains but at this point it appears to be jobless recovery. The yields on U.S. Treasury Bonds are down from last month and have remained relatively flat as compared to 12 months ago. Only the stock market over the past twelve months has shown strong gains. Ongoing trends point to inflation remaining low; trade deficits remaining at record levels; weak job creation; the strength of the dollar is declining; and a record budget deficit is forecast.

Calendar Year 2004 Committee Meeting Dates: For CY 2004 the Committee has scheduled Friday, February 20, Friday, May 21, Friday, August 20 and Friday, November 19 for the quarterly Investment Oversight meetings.

Other Business: None

Public Comment: None

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