BOARD MEETING DATE: June 1, 2007
AGENDA NO. 30

REPORT:

Investment Oversight Committee

SYNOPSIS:

The Investment Oversight Committee met Friday, May 18, 2007 and discussed various issues detailed in the Committee report. The next Investment Oversight Committee meeting is scheduled for Friday, November 16, 2007 at 12:00 noon in the Executive Office Conference Room.

RECOMMENDED ACTION:

Receive and file this report.

Michael Antonovich, Chair
Investment Oversight Committee

Attendance: Present were Committee members Michael Antonovich (via conference call), Gary Burton, David E. Ertel and Paul Sundeen.

Investment Committee Action Items:

Quarterly Report of Investments: Reviewed the quarterly investment report to the Governing Board. For the month of March 2007, the AQMD’s weighted average yield on total investments of $325,679,233, from all sources, was 5.26%. The allocation by investment type was 84.80% in the Los Angeles County Pooled Surplus Investment Fund (PSI); 12.13% in the State of California Local Agency Investment Fund (LAIF); and 3.07% in Negotiable Certificates of Deposit and Commercial Paper. The Committee approved the quarterly report.

Investment Committee Discussion Items:

Cash Flow Forecast: Rick Pearce reported on the cash flows for the current year and projected for the next three years. AQMD Investment Policy limits its Special Purpose investments to 75% of the minimum amount of funds available for investment during the Cash Flow Horizon. That limit, which includes all funds (General, MSRC, Clean Fuels), is approximately $182.6 million.

Financial Market Update: Rick Pearce provided the Committee with comments provided by Mr. Martling on current economic and investment market conditions. In summary, Mr. Martling’s comments stated that all indicators suggest that the economy should continue to grow at a subdued pace and achieve a “soft landing”. The ongoing correction in the housing market continues to generate coverage in the press despite its relatively small role in the economy. Industrial and consumer spending has been strong. The labor market is still relatively tight. Inflation is still the key to Fed policy and most market observers expect the Fed to lower the discount rate by year-end.

Other Business: None

Public Comment: None