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Home My WebLink About4.5 Treasurer's Report 19� 82 STAFF REPORT CITY CLERK CITY COUNCIL File #320-30 O`�LIFOU�� DATE: November 18, 2014 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager SUBJECT: City Treasurer's Informational Report of Investments for the Quarter Ending September 30, 2014 Prepared by Colleen Tribby, Director of Administrative Services EXECUTIVE SUMMARY: The City of Dublin's Investment Policy calls for a semi-annual report of investments. This report is for the quarter ending September 30, 2014, and includes a monthly transaction ledger. The City's investment portfolio for this period totaled $158,150,754 (book value) with an average book yield of 0.56%. All investment transactions continue to comply with the City's Investment Policy and the California Government Code. As required by the Policy, the City Treasurer (Administrative Services Director) affirms that the City is able to meet its expenditure requirements for the next six months. FINANCIAL IMPACT: Investments are made in accordance with the City Investment Policy and State Law. Interest earned is apportioned between the Funds (i.e. General Fund, Gas Tax Fund, etc.) based upon the proportionate share of the total cash balance. The current yield is slightly higher than last quarter, and overall interest income in FY 2014-15 may come in marginally higher than budgeted. Staff will address any budget change needed during the mid-year financial review presented to the City Council. RECOMMENDATION: Staff recommends that the City Council receive the report. J C � Submitted By Reviewed By Administrative Services Director Assistant City Manager DESCRIPTION: This report marks the first full year since the City began a contract with Chandler Asset Management (Chandler) for ongoing investment management services. The total investment portfolio of $158,150,754 (book value) is comprised of $108,891,062 managed by Chandler, and $49,259,692 invested by the City in local government pools. The average book yield of the Page 1 of 4 ITEM NO. 4.5 Chandler portfolio and the local pools was 0.77% and 0.24%, respectively. The portfolio includes both discretionary and restricted funds and the balance will fluctuate throughout the year due to normal cash flow. Economic Update Highlights The following are some highlights from the Economic Update included in the attached Investment Report prepared by Chandler (Attachment 1): • The economy remains on a slow growth trajectory, fueled by slightly higher job growth than anticipated in September 2014. The unemployment rate declined to 5.9% from 6.1% in August. • The manufacturing sector continues to show strength, and consumer spending remains healthy. However, the housing sector has shown the most volatility and continues to lag behind other sectors of the economy. • The Federal Open Market Committee (FOMC) left interest rates unchanged in September, and suggested a modest uptick to the overall view of the economy. They also noted that inflation is running below target, signaling their ongoing capacity to keep rates low. City of Dublin Portfolio Since the City's engagement of Chandler to manage funds invested outside of the local pools, and the revision of the City's investment policy to allow for new investment opportunities, the City's portfolio has maintained a healthy balance of investment types. As illustrated in Chart 1 below, the City has maintained Commercial Paper and Corporate investments, while shifting away from Asset-Backed Securities and Agency holdings to increased US Treasuries. The LAIF/CAMP balance remained stable over the quarter. Chart 1: Investments by Type, July 1 -- September 30, 2014 INVESTMENTS BY TYPE September 30,2014 US Treasury, 17.7235 LAIF/CAMP, 31.17% S Corporates, Money Market, 9.16% 0.283c Commercial Paper, Agency,37.92% 4.07% ABS,4.02% Page 2 of 4 The market value of the City's portfolio has decreased $35,206 since June 2014 (see Table 1), as there were no significant in-flows or out-flows of funds over the quarter. Since the same quarter one year ago, the portfolio increased $18.3 million, due primarily to increases in large revenue categories, including Property Tax, Sales Tax, and Building Permits, through FY 2013- 14. Table 1: Portfolio Values and Yield to Maturity Sept30 June 30 Sept 30,2014 2013 2014 Market Market Par Book %of %of Total Book Market Holdings Value Value Value Value Market Value Subtotal Portfolio Yield Yield Managed by City LAIF 49,814,360 49,232,909 48,458,874 48,458,874 48,458,874 98.4% 31% 0.24% 0.24% CAMP 26,139,933 502 800,818 800,818 800,818 1.6% 1% 0.05% 0.05% Agency 63,904,900 Money Market 3,541 SUBTOTAL 139,862,734 49,233,411 49,259,692 49,259,692 49,259,692 100.0% 31% 0.24% 0.24% Managed by Chandler ABS 7,031,761 6,350,051 6,350,722 6,347,738 5.8% 4% 0.61% 0.64% Agency 56,028,424 53,075,000 53,101,212 52,933,223 48.7% 34% 0.80% 0.69% Commercial Paper 6,296,045 6,430,000 6,425,138 6,425,138 5.9% 4% 0.23% 0.23% Money Market 353,413 445,543 445,543 445,543 0.4% 0% 0.00% 0.00% US Corporates 14,687,597 14,475,000 14,599,627 14,597,508 13.4% 9% 1.20% 1.17% US Treasury 24,367,384 28,000,000 27,968,821 27,959,923 25.7% 18% 0.68% 0.63% SUBTOTAL 108,764,625 108,775,593 108,891,062 108,709,073 99.9% 69% 0.77% 0.71% Accrued Interest 225,486 219,551 108,990,111 108,928,624 TOTAL PORTFOLIO 139,862,734 158,223,522 158,035,285 158,150,754 158,188,316 100.0 0.56% Change from June 30,2014 (35,206) Change from Sept 30,2013 18,325,582 Overall market yield-to-maturity (YTM) has increased from 0.44% to 0.56% since last quarter (see Table 2 below). For detailed monthly transactions, see Attachment 2. Table 2: Quarterly Holdings (Par Value) by Type, and YTM, 5 Quarters Holdings(Par Value) 9/30/13 12/31/13 3/31/14 pr 6/30/14 9/30/14 YTM LAIF/CAMP 75,954,293 52,141,245 39,388,468 49,233,411 49,259,692 0.24% ABS 3,700,000 5,420,000 7,025,526 6,350,051 0.64% Agency 64,000,000 56,000,000 56,000,000 56,000,000 53,075,000 0.69% Commercial Paper 5,900,000 5,905,000 6,300,000 6,430,000 0.23% Money Market 3,541 4,547,383 3,008,529 353,413 445,543 0.00% US Corporates 9,475,000 13,475,000 14,475,000 14,475,000 1.17% US Treasury 18,500,000 24,500,000 24350000 28,000,000 0.63% TOTAL 139,957,834 150,263,628 147,696,997 157,737,351 158,035,285 YIELD TO MATURITY 0.50% 0.46% 0.50% 0.44% 0.56% Funds Managed by the City The City participates in two local agency investment pools managed by government finance professionals and treasurers: the Local Agency Investment Fund (LAIF) and the California Asset Management Program (CAMP). The City has typically carried close to the Page 3 of 4 $50 million maximum allowable in LAIF with any excesses resulting from the timing of large payments deposited into CAMP as a temporary holding place. LAIF rates have stabilized over the last three quarters, but remain at historic lows: Table 3: Quarterly LAIF Yields, Recent Six Years March June Sept Dec 2009 1.91 1.51 0.90 0.60 2010 0.56 0.56 0.51 0.46 2011 0.51 0.48 0.38 0.38 2012 0.38 0.36 0.35 0.32 2013 0.28 0.24 0.26 0.26 2014 0.23 0.22 0.24 NOTICING REQUIREMENTS/PUBLIC OUTREACH: None. ATTACHMENTS: 1. City of Dublin Investment Report for Quarter Ending September 30, 2014 2. Monthly Investment Transaction Reports, July through September 2014 Page 4 of 4 Investment Report City of Dublin Period Ending September 30, 2014 6225 Lusk Blvd San Diego,CA 92121 1 Phone :00 Table of Contents SECTION 1 Economic Update SECTION 2 Account Profile SECTION 3 Consolidated Information SECTION 4 Portfolio Holdings SECTION 1 Economic Update Economic Update • The economy remains on a slow growth trajectory, fueled by job growth. In the third quarter, payrolls rose by 224,000 per month on average, following average growth of 267,000 per month during the second quarter. The September employment report was better than expected (as payrolls rose by 248,000 versus expectations of 215,000), and August and July payrolls were revised higher by a combined 69,000. The unemployment rate declined to 5.9% in September from 6.1% in August, but wage growth and the labor participation rate continued to be weak. The manufacturing sector continues to show strength, with the ISM manufacturing index remaining well above 50.0 in September at 58.6. Consumer spending also remains healthy, and ongoing job growth should support this trend. The housing sector, on the other hand, has shown the most volatility and continues to lag behind other sectors of the economy. • In September, the FOMC left policy rates unchanged and continued to reduce asset purchases, as expected. Overall, the Fed's statement language suggested a modest uptick to their overall view of the economy, but the message remained dovish. The Fed noted inflation is running below target, signaling their ongoing capacity to keep interest rates low. More recently, the stronger than expected September employment report gives hawkish Fed members a compelling argument for raising interest rates earlier than market participants may be expecting. However, we believe the majority of FOMC voting members are generally dovish and will be reluctant to raise rates before the economy is on a sustainable growth trajectory. At this point, we continue to believe the Fed isn't likely to start raising rates until the second half of 2015. However, the Fed may make some changes to its next policy statement, such as removing the "considerable period" language. The Fed remains on course to complete the unwinding of quantitative easing this month and the next Federal Open Market Committee meeting is scheduled for October 28-29. • During the past three months, the yield curve has flattened even as the Fed has been tapering its purchases of long-term Treasury bonds. Market participants have reacted to mixed domestic and global economic data, as well as geopolitical tensions. These concerns have kept downward pressure on longer yields. Q11 Employment Non-farm Payroll (000's) Unemployment Rate 350 8.0 300 7.5 250 7.0 ^y 200 CD O 150 6.5% 100 - 6.0 50 5.5 0 Source:U.S.Department of Labor The September employment report was stronger than expected as nonfarm payrolls rose by 248,000, following gains of 180,000 and 243,000 in August and July, respectively. The consensus forecast for September was 215,000. The net revisions for August and July were +69,000. For the third quarter, payrolls rose 224,000 per month, on average, compared to average growth of 267,000 per month during the second quarter. Private payrolls rose by 236,000 in September while government jobs rose by 12,000. The unemployment rate declined to 5.9%from 6.1%, but the participation rate also ticked down to 62.7% from 62.8%. Wage growth was flat in September, missing expectations for a 0.2%gain. GKI Consumer Retail Sales Y O-Y % Change Consumer Credit 6.0% 30 5.0% 25 N 4.0% O 20 m 3.0% Z 15 t6 20% = 10 VV O D 1.0% 5 00% 0 8�j 70 72 2i� 4�j 6i� d�j 70 72 2i� 4�j 6i� 8�j 8�� 70 72 2i7 Y�7 s�7 ��7 ��i �2i 2i7 Y�7 s�7 ��7 Source:U.S.Department of Commerce Source:Federal Reserve In August, Retail Sales rose 5.0% on a year-over-year basis versus a gain of 4.2% in July. On a month-over- month basis, Retail Sales were up 0.6% in July, which was in line with expectations. Overall, Retail Sales appear healthy but not robust. Consumer Credit rose by$13.5 billion in August versus a gain of$21.6 billion in July.The gain continued to be fueled by nonrevolving credit(student and auto loans)which rose$13.7 billion in August,while revolving credit(credit cards)declined by$0.2 billion. GKI Broad Measures Starts -Single Family Housing Leading Economic Indicators 800 1.2 700 1.0 600 0.8 500 0.6 fh CD 400 0.4% 0 300 0.2 200 0.0 100 -0.2% 0 0.4% 8�7 7p 72 2i7 4i7 6i7 8i7 7p 72 2i7 4i7 Ei7 8i7 8i7 7p 72 2i7 4j7 6�7 e�7 7pi 72i 2i7 4j7 6�7 8�7 Source:US Department of Commerce Source:The Conference Board Recent housing data has been volatile. Single-family housing starts declined 2.4% in August to 643,000 following an 11.1%gain in July. Multifamily starts declined 31.7% in August after increasing 44.9%in July. The index of Leading Economic Indicators (LEI) rose 0.2%in August following a 1.1%gain in July. Overall, the LEI index continues to point to modest economic growth. URI Manufacturing Institute of Supply Management Capacity Utilization Purchasing Manager Index 60.0 79.5% 79.0% 57.5 Expandin 78.5% 55.0 78.0 52.5 77.5 50.0 77.0% Contracting 76.5 47.5 76.0 45.0 75.5% Source:Institute for Supply Management Source:Federal Reserve During September, the ISM Manufacturing Index decreased to 56.6 from 59.0 in August. The decline was disappointing, but the index continues to signal ongoing growth in the manufacturing sector. A reading above 50.0 is viewed as expansionary in the manufacturing sector, while a reading below 50.0 suggests contraction. Capacity Utilization, which is production divided by capacity, declined in August to 78.8%from 79.1%in July.The Capacity Utilization rate remains belowthe long-run average of 80.1%(1972-2013). Inflation CPI Y-O-Y % Change Core CPI Y-O-Y % Change 2.5% 2.5% 2.0% 2.0% 100, — 1.5% 1.5% —V V V 1.0% 1.0 0.5% 0.5% 8iJ Jp J2 2iJ 4iJ 6'iJ 8iJ Jp J2 2iJ viJ 6'iJ 8iJ 8iJ 7pi 72i 2i7 4j7 6�7 8�7 Jpi J2i 2i7 4j7 6�7 ��7 Source:US Department of Labor In August, overall CPI inflation was 1.7%on a year-over-year basis down from 2.0% in July. The year-over-year Core CPI(CPI less food and energy)declined to 1.7%in August from 1.9%in July. G D P GDP Qtrly % Change 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% hL -1.0% -2.0% -3.0% 7 S-7 9-7 72 "-7 6-7 9-7 72 `0-7 6-7 9-7 72p '2-7 S-7 7� 7 7 7 �3 3 �' 7� 4 4 Source: U.S.Department of Commerce Real annualized GDP growth for the second quarter of 2014 was 4.6%, according to the final revision, up from the prior estimate of 4.2%. Second quarter growth was in line with the consensus forecast. An upward revision in nonresidential investment spending was the primary factor for the change. First quarter GDP declined 2.1%, largely due to unfavorable weather. Interest Rates Yield on the Two-Year Note September 2012 through September 2014 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% SQA ti�� `ado Cdr tai ✓4j� SPA � o mar may 79 SSA 72 72 7� 7� )� u' '7� 7� 74 74 )4 l '74 Source:Bloomberg The yield on the two-year Treasury note increased by about 8 basis points in September, following a modest decline in August. Economic data was fairly strong in September. The unwinding of quantitative easing bythe Federal Reserve along with the anticipation of a potential fed funds rate hike next year have also put upward pressure on rates, but this has been somewhat offset by geopolitical tensions and sluggish economic growth in Europe. �Jjjj Yield Curves June 30, 2014 and September 30, 2014 6/30/14 -9/30/14 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 70 ao 0 o yr yr Source:Bloomberg During the past three months,the yield curve has flattened even as the Fed has been tapering its purchases of long-term Treasury bonds. Market participants have reacted to mixed domestic and global economic data as well as geopolitical tensions.These concerns have kept downward pressure on longer yields. SECTION 2 . Account Profile � µ Objectives Investment Objectives The investment objectives of the City of Dublin are first, to provide safety of principal; second, to provide adequate liquidity to meet all requirements which might be reasonably anticipated; third, to attain a market average rate of return on its investments throughout economic cycles; and fourth, to be diversified to avoid incurring unreasonable and avoidable risks regarding specific security types or individual financial institutions. Chandler Asset Management Performance Objectives The performance objective of the City of Dublin is to earn a return that equals or exceeds the return on of the Bank of America Merrill Lynch 1-3 Year Treasury and Agency Index. Strategy In order to achieve this objective, the portfolio invests in high-quality money market instruments, including US Treasury securities, US agency securities and A or higher rated Corporate medium term notes. Cillil compliance GR City of Dublin September 30,2014 COMPLIANCE POLICY Assets managed by ChandlerAsset Management are in full compliance with State lawand with the City's investment policy. Category Standard Comment Treasury Issues No limitations Complies Agency Issues 35%max per issuer;25%max callables Complies Municipal Issues "A"rated;5%max per issuer Complies Medium Term Notes "A"rated;30%max;5%max per issuer Complies Banker's Acceptances "A-1"rated;40%max;5%max per issuer; Complies 180 days max maturity Commercial Paper "A-1"rated;25%max;5%max per issuer; Complies 270 days max maturity Negotiable Certificates of Deposit "A"P'A-1"rated issuer;30%max;5%max Complies per issuer Corporate Debt(All) 20%max per issuer Complies Time Deposits 10%max;Collateralized/FDIC Insured; Complies 1 ear max turity Asset-Backed and Mortgage- "AX rated;20%max; 5%max per issue Complies Backed Securities ABS/MBS Money Market Mutual Funds "AAA"rated or SEC registered adviser; Complies 10%max;5%max per fund LAIF $50 million limit Complies CAMP Not used by adviser Complies Client Directed Concentration Limits MTNs: 15%max;ABS/MBS: 10%max; Complies Municipals:25%max Maximum Maturity 5 years Complies �f, 1 Account Profile Portfolio Characteristics City of Dublin 09/30/2014 06/30/2014 Benchmark* Portfolio Portfolio Average Maturity(yrs) 1.88 1.89 1.86 Modified Duration 1.84 1.76 1.73 Average Purchase Yield n/a 0.78% 0.74% Average Market Yield 0.56% 0.71 % 0.54% Average Quality** AAA AA+/Aa1 AA+/Aa1 Total Market Value 108,928,624 108,990,111 1-3 Yr Treasu ryAgency Benchmark is a blended rating of S&P,Moody's,and Fitch.Portfolio is S&P and Moody's respectively. Ow Sector Distribution City of Dublin September 30, 2014 June 30,2014 Commercial Commercial --Paper Paper 5.9% 5.8 Money Money Market Market Agency_„ Fund Agency Fund 48.7% ` Fl 51.5% Fl 0.4% 0.3 us us Corporate Corporate 13.5% 13.6 us u5 AS 5.8%o `Treasury 6.5 B o Treasury 257% 22.4 ,_Sj,, I Issuers City of Dublin Issuer Report Account#10198 As of 9130/2014 Investment Issue Name i Portfolio Government of United States US Treasury 25.70% Federal Farm Credit Bank Agency 16.45% Federal Home Loan Mortgage Corp Agency 13.74% Federal Home Loan Bank Agency 11.96% Federal National Mortgage Association Agency 6.55% Bank of Tokyo-Mit UFJ Commercial Paper 2,00% Toyota Motor Corp Commercial Paper 1.97% PNC Financial Services Group Commercial Paper 1.92% John Deere ABS ABS 1.72% Toyota ABS ABS L69% Honda ABS ABS 1.50% General Electric Co US Corporate 1.41% JP Morgan Chase&Cc US Corporate 1.20% Dupont,Ei De Nemours US Corporate 1.17% Wells Fargo Corp US Corporate 1.16% HSBC USA Corp US Corporate 1.15% Deere&Company US Corporate 0.94% Occidental Petroleum Corporation US Corporate 0.93% Bank of New York US Corporate 0.93% Berkshire Hathaway US Corporate 0.92% ChevronTexaco Corp US Corporate 0.92% JP Morgan ABS ABS 0.92% Ebay US Corporate 0.92% Oracle Corp US Corporate 0.92% Apple Inc US Corporate 0,90% First American Govt Oblig Fund Money Market Fund FI 0.41% Total 100.00% r; Quality Distribution City of Dublin September 30,2014 vs. June 30,2014 100.0% 90.0%- so.0% 70.0 60.0%— 59.0% 40-0%— 30-0%— 20-0%— 10.0%— 0.0% AAA AA A s A NR 9/30/14 6/30/14 AAA AA A <A NR 9/30/14 6.5% 82.5% 9.3% 0.0% 1.7% 6/30/14 8.1 % 81.9% 9.4% 0.0% 0.7% Source:S&P Ratings ®„ Duration Distribution City of Dublin September 30,2014 vs. June 30, 2014 L.0 f 0-0.25 0.25-0.50 0.50-1 1-2 2-3 3-4 4-5 - M 9130114 6+30114 0-0.25 0.25-0.50 0.50-1 1 -2 2-3 3-4 4-5 5+ 9/30/14 10.8% 6.5% 13.3% 27.8% 24.8% 11.4% 5.5% 0.0% 6/30/14 5.8% 12.6% 14.7% 30.7% 23.9% 12.3% 0.0% 0.0% ®„ Investment Performance City of Dublin Period Ending September 30,2014 Total Rate of Return Since Inception October 31,2013 4.50°e 0.40 0.30 0.20 0.10'X- 0.00%— Since Inception Cit�h Crhlir 1-3 Yr T rem uryAgencyr Latest 3 months Since Inception City of Dublin -0.06% 0.47% 1-3 Yr TreasuryAgency 0.04% 0.41 % 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. M �f, 1 Account Profile Portfolio Characteristics City of Dublin Reporting Account 09/30/2014 06/30/2014 Portfolio Portfolio Average Maturity(yrs) 0.00 0.00 Modified Duration 0.00 0.00 Average Purchase Yield 0.24% 0.22% Average Market Yield 0.24% 0.22% Average Quality NR/NR NR/NR Total Market Value 49,290,810 53,260,640 Sector Distribution City of Dublin Reporting Account September 30, 2014 June 30,2014 LAIF_-- LAIF 98.4% 93.4% Y F Local Local Gov Gov —Investment Investment Pool Pool 1.6% 6.6% ,_Sj,, I Issuers C'" City of Dublin Reporting Account Issuer Report Account#10219 As of 9/3012014 Issue Name Investment Local Agency Investment Fund LAIF 98.38% CAMP Local Gov Investment Pool 1.62% Total 100.00% SECTION 3 Consolidated Information �f, 1 Account Profile Portfolio Characteristics City of Dublin Consolidated 09/30/2014 06/30/2014 Portfolio Portfolio Average Maturity(yrs) 1.30 1.25 Modified Duration 1.21 1.16 Average Purchase Yield 0.61 % 0.57% Average Market Yield 0.56% 0.44% Average Quality AA+/Aa1 AA+/Aa1 Total Market Value 158,219,434 162,250,751 j„ Sector Distribution City of Dublin Consolidated September 30, 2014 June 30,2014 Commercial LAIF Commercial LAIF Paper 30.6% Paper_,_ 30.7% 4.1% 3.9 Local Local Gov Gov Investment Investment Pool A090 Pool 0.5% 2.2% Money Money Market Market Fund Fund Fl Fl 0.3% 0.2% Agency Agency us 33.5% 34.6 Co US Corporate Corporate 9.3% 9.1% ABS I us ABS I US 4.0% ——J Treasury 4.3%__ J Treasury 17.7% 15.0% SECTION 4 Portfolio Holdings s CACity of Dublin Holdings Report Account#10198 As of 9/30/14 Purchase .. CUSIP Security Description Par Value/Units Book Yield Book Va ue Mkt YTM Accrued Int. Gain/Loss Fitch Duration ABS 47787RAC4 John Deere Owner Trust 2012-B A3 596,006.90 11/18/2013 596,263.00 100.03 596,170.80 0.55% Aaa/NR 1.79 0.53%Due 7/15/2016 0.50% 596,179.84 0.46% 140.39 (9.04) AAA 0.41 89231 NAC7 Toyota Auto Receivable 2012-B A3 920,376.51 Various 920,680.89 100.04 920,717.05 0.85% Aaa/AAA 1.79 0.46%Due 7/15/2016 0.39% 920,552.09 0.37% 188.17 164.96 NR 0.43 43813CAC4 Honda Auto Receivables 2012-4 A3 748,667.30 12/13/2013 749,369.17 100.09 749,337.36 0.69% Aaa/AAA 1.88 0.52%Due 8/18/2016 0.29% 749,068.97 0.33% 140.58 268.39 NR 0.47 161571FL3 Chase CHAIT Pool#2012-A5 1,000,000.00 10/22/2013 1,000,429.69 100.10 1,001,017.00 0.92% NR/AAA 2.88 0.59%Due 8/15/2017 0.58% 1,000,324.28 0.47% 262.22 692.72 AAA 0.85 89231MAC9 Toyota Auto Receivables Owner 2014-A 920,000.00 03/11/2014 919,829.98 99.88 918,896.92 0.84% Aaa/AAA 3.21 0.67%Due 12/15/2017 0.68% 919,862.18 0.75% 273.96 (965.26) NR 1.58 43814GAC4 Honda Auto Receivables 2014-2 A3 890,000.00 05/13/2014 889,893.02 99.82 888,358.84 0.82% Aaa/AAA 3.47 0.77%Due 3/19/2018 0.72% 889,906.04 0.88% 247.47 (1,547.20) NR 1.77 47787VAC5 John Deere Owner Trust 2014-AA3 1,275,000.00 04/02/2014 1,274,795.75 99.86 1,273,240.50 1.17% Aaa/NR 3.55 0.92%Due 4/16/2018 0.93% 1,274,828.19 1.00% 521.33 (1,587.69) AAA 1.76 6,351,261.50 6,347,738.47 5.83% Aaa 1 AAA 2.77 Total ABS 6,350,050.71 0.61% 6,350,721.59 0.64% 1,774.12 (2,983.12) Aaa 1.12 AGENCY 313374GKO FHLB Note 3,000,000.00 06/30/2011 3,000,000.00 100.06 3,001,692.00 2.77% Aaa/AA+ 0.06 1.03%Due 10/23/2014 1.03% 3,000,000.00 0.15% 13,561.67 1,692.00 AAA 0.06 3133743W8 FHLB Note 4,000,000.00 06/10/2011 4,009,280.00 100.08 4,003,316.00 3.69% Aaa/AA+ 0.08 1.15%Due 10/30/2014 1.08% 4,000,217.38 0.15% 19,294.44 3,098.62 AAA 0.08 3135GOKM4 FNMA Note 3,000,000.00 05/03/2012 3,000,000.00 100.23 3,006,882.00 2.77% Aaa/AA+ 0.65 0.5%Due 5/27/2015 0.50% 3,000,000.00 0.15% 5,166.67 6,882.00 AAA 0.66 3136FPHZ3 FNMA Callable Note 1 X 12/28/10 3,000,000.00 01/20/2011 2,997,270.00 101.77 3,053,160.00 2.80% Aaa/AA+ 0.99 2%Due 9/28/2015 2.02% 2,999,422.75 0.22% 500.00 53,737.25 AAA 0.99 3133725D2 FHLB Note 2,000,000.00 12/21/2010 1,995,740.00 102.19 2,043,798.00 1.89% Aaa/AA+ 1.22 2.125%Due 12/21/2015 2.17% 1,998,959.50 0.33% 11,805.56 44,838.50 AAA 1.21 3133ECFV1 FFCB Note 4,000,000.00 03/07/2013 4,005,720.00 99.80 3,992,072.00 3.67% Aaa/AA+ 1.33 0.43%Due 1/29/2016 0.38% 4,002,622.12 0.58% 2,962.22 (10,550.12) AAA 1.32 3137EADQ9 FHLMC Note 8,000,000.00 Various 8,014,480.00 100.06 8,004,424.00 7.36% Aaa/AA+ 1.62 0.5%Due 5/13/2016 0.44% 8,007,667.09 0.47% 15,333.34 (3,243.09) AAA 1.61 3133ECEF7 FFCB Note 5,000,000.00 04/23/2013 5,013,085.00 99.64 4,981,820.00 4.58% Aaa/AA+ 2.36 0.64%Due 2/6/2017 0.57% 5,008,115.53 0.80% 4,888.89 (26,295.53) AAA 2.32 3133ECG99 FFCB Note 4,000,000.00 03/07/2013 4,007,800.00 99.31 3,972,360.00 3.65% Aaa/AA+ 2.40 0.66%Due 2/22/2017 0.61% 4,004,713.40 0.95% 2,860.00 (32,353.40) AAA 2.37 3137EADT3 FHLMC Note 3,000,000.00 02/27/2014 3,013,410.00 99.96 2,998,803.00 2.76% Aaa/AA+ 2.40 0.875%Due 2/22/2017 0.72% 3,010,764.91 0.89% 2,843.75 (11,961.91) AAA 2.36 3133ECMM3 FFCB Note 5,000,000.00 04/25/2013 4,996,050.00 98.93 4,946,350.00 4.55% Aaa/AA+ 2.57 0.6%Due 4/25/2017 0.62% 4,997,466.70 1.02% 13,000.00 (51,116.70) AAA 2.53 Chandler Asset Management-CONFIDENTIAL Execution Time 10/14/201412:59:21 PM 28 CACity of Dublin Holdings Report Account#10198 As of 9/30/14 Purchase .. CUSIP Security Description Par Value/Units Book Yield Book Va ue Mkt YTM Accrued Int. Gain/Loss Fitch Duration AGENCY 3135GOZLO FNMA Note 1,075,000.00 08/21/2014 1,071,162.25 99.58 1,070,469.95 0.98% Aaa/AA+ 2.99 1%Due 9/27/2017 1.12% 1,071,288.02 1.14% 119.44 (818.07) AAA 2.94 3134G3Y53 FHLMC Callable Note 1X 11/28/14 4,000,000.00 11/28/2012 4,000,000.00 98.39 3,935,680.00 3.62% Aaa/AA+ 3.16 0.85%Due 11/28/2017 0.85% 4,000,000.00 1.37% 11,616.67 (64,320.00) AAA 3.10 313381 B20 FHLB Note 4,000,000.00 12/13/2012 3,999,960.00 98.06 3,922,396.00 3.61% Aaa/AA+ 3.19 0.75%Due 12/8/2017 0.75% 3,999,974.43 1.37% 9,416.67 (77,578.43) AAA 3.13 53,123,957.25 52,933,222.95 48.70% Aaa 1 AA+ 1.81 Total Agency 53,075,000.00 0.80% 53,101,211.83 0.69% 113,369.32 (167,988.88) Aaa 1.78 COMMERCIAL PAPER 06538CKM2 Bank of Tokyo Mitsubishi NY Discount 2,180,000.00 06/16/2014 2,178,397.70 99.99 2,179,745.67 2.00% P-1/A-1 0.06 CP 0.21% 2,179,745.67 0.21% 0.00 0.00 F-1 0.06 0.21%Due 10/21/2014 89233HLJ1 Toyota Motor Credit DiscountCP 2,150,000.00 05/13/2014 2,147,742.50 99.97 2,149,426.67 1.97% P-1/A-1+ 0.13 0.2%Due 11/18/2014 0.20% 2,149,426.67 0.20% 0.00 0.00 F-1 0.13 69349KT59 PNC Bank Discount CP 2,100,000.00 09/08/2014 2,095,606.34 99.81 2,095,965.67 1.92% P-1/A-1 0.68 0.28%Due 6/5/2015 0.28% 2,095,965.67 0.28% 0.00 0.00 F-1 0.68 6,421,746.54 6,425,138.01 5.90% P-1 1 A-1 0.29 Total Commercial Paper 6,430,000.00 0.23% 6,425,138.01 0.23% 0.00 0.00 F-1 0.29 MONEY MARKET FUND Fl 31846V203 First American Govt Obligation Fund 445,542.57 Various 445,542.57 1.00 445,542.57 0.41% Aaa/AAA 0.00 0.00% 445,542.57 0.00% 0.00 0.00 NR 0.00 445,542.57 445,542.57 0.41% Aaa 1 AAA 0.00 Total Money Market Fund Fl 445,542.57 NIA 445,542.57 0.00% 0.00 0.00 NR 0.00 US CORPORATE 40428HPG1 HSBC USA Inc Note 750,000.00 10/28/2013 767,700.00 100.75 755,647.50 0.70% A2/A+ 0.37 2.375%Due 2/13/2015 0.53% 755,084.04 0.33% 2,375.00 563.46 AA- 0.37 94974BEUO Wells Fargo Corp Note 1,225,000.00 10/30/2013 1,278,189.50 101.77 1,246,682.50 1.16% A2/A+ 0.54 3.625%Due 4/15/2015 0.61% 1,244,782.05 0.35% 20,476.22 1,900.45 AA- 0.53 36962G4T8 General Electric Capital Corp Note 750,000.00 10/23/2013 771,907.50 101.76 763,200.75 0.71% Al/AA+ 1.11 2.25%Due 11/9/2015 0.80% 761,928.07 0.65% 6,656.25 1,272.68 NR 1.09 263534CD9 El Dupont Nemour Note 1,250,000.00 11/08/2013 1,282,325.00 101.73 1,271,576.25 1.17% A2/A 1.29 1.95%Due 1/15/2016 0.75% 1,269,223.58 0.61% 5,145.83 2,352.67 A 1.27 46625HJA9 JP Morgan Chase Note 1,250,000.00 11/07/2013 1,315,425.00 103.50 1,293,693.75 1.20% A3/A 1.76 3.15%Due 7/5/2016 1.13% 1,293,594.07 1.14% 9,406.25 99.68 A+ 1.71 36962G6Z2 General Electric Capital Corp Note 750,000.00 11/08/2013 759,817.50 101.21 759,108.00 0.70% Al/AA+ 1.78 1.5%Due 7/12/2016 1.00% 756,571.96 0.81% 2,468.75 2,536.04 NR 1.75 Chandler Asset Management-CONFIDENTIAL Execution Time 10/14/201412:59:21 PM 29 CACity of Dublin Holdings Report Account#10198 As of 9/30/14 Purchase .. CUSIP Security Description Par Value/Units Book Yield Book Va ue Mkt YTM Accrued Int. Gain/Loss Fitch Duration US CORPORATE 24422ERF8 John Deere Capital Corp Note 1,000,000.00 04/21/2014 1,025,640.00 102.02 1,020,197.00 0.94% A2/A 1.96 1.85%Due 9/15/2016 0.77% 1,020,951.54 0.81% 822.22 (754.54) NR 1.92 674599CB9 Occidental Petroleum Note 1,000,000.00 11/07/2013 1,017,920.00 101.27 1,012,702.00 0.93% Al/A 2.38 1.75%Due 2/15/2017 1.19% 1,013,071.06 1.21% 2,236.11 (369.06) A 2.32 278642AG8 Ebay Inc Note 1,000,000.00 Various 998,572.00 99.58 995,817.00 0.92% A2/A 2.79 1.35%Due 7/15/2017 1.39% 998,865.65 1.50% 2,850.00 (3,048.65) A- 2.72 68389XAN5 Oracle Corp Note 1,000,000.00 Various 991,607.11 99.28 992,789.00 0.92% Al/A+ 3.04 1.2%Due 10/15/2017 1.42% 993,546.35 1.44% 5,533.34 (757.35) A+ 2.96 40428HPH9 HSBC USA Inc Note 500,000.00 11/25/2013 498,705.00 99.64 498,200.50 0.46% A2/A+ 3.30 1.625%Due 1/16/2018 1.69% 498,968.97 1.74% 1,692.71 (768.47) AA- 3.18 037833AJ9 Apple Inc Note 1,000,000.00 02/19/2014 979,800.00 97.53 975,322.00 0.90% Aal/AA+ 3.59 1%Due 5/3/2018 1.50% 982,693.26 1.71% 4,111.11 (7,371.26) NR 3.49 166764AEO Chevron Corp.Callable Note Cont 1,000,000.00 03/26/2014 1,000,430.00 100.04 1,000,351.00 0.92% Aal/AA 3.73 5/24/2018 1.71% 1,000,378.82 1.71% 4,629.06 (27.82) NR 3.51 1.718%Due 6/24/2018 06406HCL1 Bank of New York Note 1,000,000.00 02/05/2014 1,006,820.00 100.86 1,008,584.00 0.93% Al/A+ 3.84 2.1%Due 8/1/2018 1.94% 1,005,846.91 1.87% 3,500.00 2,737.09 AA- 3.66 084664BY6 Berkshire Hathaway Note 1,000,000.00 12/12/2013 1,004,960.00 100.36 1,003,637.00 0.92% Aa2/AA 3.88 2%Due 8/15/2018 1.89% 1,004,120.71 1.90% 2,555.56 (483.71) A+ 3.70 14,699,818.61 14,597,508.25 13.47% Al/A+ 2.32 Total US Corporate 14,475,000.00 1.20% 14,599,627.04 1.17% 74,458.41 (2,118.79) A+ 2.24 US TREASURY 912828SE1 US Treasury Note 2,000,000.00 10/29/2013 2,001,256.70 100.08 2,001,562.00 1.84% Aaa/AA+ 0.38 0.25%Due 2/15/2015 0.20% 2,000,363.99 0.04% 638.59 1,198.01 AAA 0.37 912828UT5 US Treasury Note 2,000,000.00 11/08/2013 2,001,178.58 100.10 2,001,954.00 1.84% Aaa/AA+ 0.50 0.25%Due 3/31/2015 0.21% 2,000,423.26 0.05% 13.74 1,530.74 AAA 0.50 912828SU5 US Treasury Note 2,000,000.00 10/29/2013 2,000,397.33 100.12 2,002,344.00 1.84% Aaa/AA+ 0.62 0.25%Due 5/15/2015 0.24% 2,000,159.78 0.06% 1,888.59 2,184.22 AAA 0.62 912828VHO US Treasury Note 2,000,000.00 11/08/2013 2,003,912.95 100.23 2,004,610.00 1.84% Aaa/AA+ 0.75 0.375%Due 6/30/2015 0.25% 2,001,788.78 0.07% 1,895.38 2,821.22 AAA 0.75 912828TX8 US Treasury Note 3,000,000.00 02/19/2014 3,006,455.37 100.20 3,006,093.00 2.76% Aaa/AA+ 1.13 0.375%Due 11/15/2015 0.25% 3,004,181.20 0.19% 4,249.32 1,911.80 AAA 1.12 912828UG3 US Treasury Note 2,000,000.00 10/29/2013 2,000,162.94 100.14 2,002,890.00 1.84% Aaa/AA+ 1.29 0.375%Due 1/15/2016 0.37% 2,000,095.10 0.26% 1,589.67 2,794.90 AAA 1.29 912828US7 US Treasury Note 2,000,000.00 12/27/2013 1,996,256.70 100.05 2,000,938.00 1.84% Aaa/AA+ 1.46 0.375%Due 3/15/2016 0.46% 1,997,533.88 0.34% 331.49 3,404.12 AAA 1.45 912828C81 US Treasury Note 1,000,000.00 04/30/2014 999,104.91 99.96 999,609.00 0.92% Aaa/AA+ 1.58 0.375%Due 4/30/2016 0.42% 999,293.48 0.40% 1,569.29 315.52 AAA 1.58 Chandler Asset Management-CONFIDENTIAL Execution Time 10/14/201412:59:21 PM 30 CACity of Dublin Holdings Report Account#10198 As of 9/30/14 Purchase .. CUSIP Security Description Par Value/Units Book Yield Book Va ue Mkt YTM Accrued Int. Gain/Loss Fitch Duration US TREASURY J 912828A59 US Treasury Note 2,000,000.00 12/27/2013 1,990,709.83 99.79 1,995,782.00 1.84% Aaa/AA+ 2.21 0.625%Due 12/15/2016 0.78% 1,993,073.19 0.72% 3,688.52 2,708.81 AAA 2.18 9128281374 US Treasury Note 3,000,000.00 02/20/2014 2,991,806.94 99.57 2,987,109.00 2.74% Aaa/AA+ 2.38 0.625%Due 2/15/2017 0.72% 2,993,475.62 0.81% 2,394.70 (6,366.62) AAA 2.35 912828SSO US Treasury Note 1,000,000.00 04/30/2014 999,808.04 99.90 998,984.00 0.92% Aaa/AA+ 2.58 0.875%Due 4/30/2017 0.88% 999,835.01 0.91% 3,661.68 (851.01) AAA 2.54 912828C24 US Treasury Note 3,000,000.00 08/18/2014 3,000,595.98 99.29 2,978,673.00 2.74% Aaa/AA+ 4.42 1.5%Due 2/28/2019 1.50% 3,000,580.49 1.67% 3,853.59 (21,907.49) AAA 4.25 912828D80 US Treasury Note 3,000,000.00 Various 2,977,822.56 99.31 2,979,375.00 2.74% Aaa/AA+ 4.92 1.625%Due 8/31/2019 1.78% 2,978,017.50 1.77% 4,174.72 1,357.50 AAA 4.70 27,969,468.83 27,959,923.00 25.70% Aaa 1 AA+ 2.04 Total US Treasury 28,000,000.00 0.68% 27,968,821.28 0.63% 29,949.28 (8,898.28) Aaa 1.99 109,011,795.30 108,709,073.25 100.00% Aa1 1 AA+ 1.89 TOTAL PORTFOLIO 108,775,593.28 0.78% 108,891,062.32 0.71% 219,551.13 (181,989.07) Aaa 1.76 TOTAL MARKET VALUE PLUS ACCRUED 108,928,624.38 Chandler Asset Management-CONFIDENTIAL Execution Time 10/14/201412:59:21 PM 31 CACity of Dublin Reporting Account Holdings Report Account#10219 As of 9/30/14 Purchase .. CUSIP Security Description Par Value/Units Book Yield Book Va ue Mkt YTM Accrued Int. Gain/Loss Fitch Duration LAIF 90LAIF$00 Local Agency Investment Fund State 48,458,873.87 Various 48,458,873.87 1.00 48,458,873.87 98.38% NR/NR 0.00 Pool 0.24% 48,458,873.87 0.24% 31,118.30 0.00 NR 0.00 48,458,873.87 48,458,873.87 98.38% NR I NR 0.00 Total LAIF 48,458,873.87 0.24% 48,458,873.87 0.24% 31,118.30 0.00 NR 0.00 LOCAL GOV INVESTMENT POOL- 90CAMP$00 Public Financial Management CAMP 800,817.73 Various 800,817.73 1.00 800,817.73 1.62% NR/NR 0.00 0.05% 800,817.73 0.05% 0.00 0.00 NR 0.00 800,817.73 800,817.73 1.62% NR I NR 0.00 Total Local Gov Investment Pool 800,817.73 0.05% 800,817.73 0.05% 0.00 0.00 NR 0.00 49,259,691.60 49,259,691.60 100.00% NR I NR 0.00 TOTAL PORTFOLIO 49,259,691.60 0.24% 49,259,691.60 0.24% 31,118.30 0.00 NR 0.00 TOTAL MARKET VALUE PLUS ACCRUED 49,290,809.90 Chandler Asset Management-CONFIDENTIAL Execution Time 10/17/2014 1:57:24 PM 32