AGENDA REPORT 2012NOV 15 PM3H3. ////i// TO: DEANNA J. SANTANA " CITY ADMINISTRATOR. FROM: Katano Kasaine

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1 2012NOV 15 PM3H3 AGENDA REPORT CITY OF OAKLAND TO: DEANNA J. SANTANA " CITY ADMINISTRATOR FROM: Katano Kasaine SUBJECT: Cash Management Report for DATE: October 31, 2012 The Quarter Ended September 30, 2012 City Administrator Approval 7 Date ////i// COUNCIL DISTRICT: Citv-Wide RECOMMENDATION Staff recommends that the committee accept this informational report. OUTCOME This is an informational report with no direct fiscal impact or outcome. BACKGROUND/LEGISLATIVE HISTORY The City and Successor Agency's'Portfolio composition includes safety, creditworthiness, liquidity, and diversity. As of September 30, 2012, the portfolios are in compliance with the Investment Policy of the City for Fiscal Year The portfolios' credit quality remains high and well within Investment Policy parameters. Liquidity remains sufficient to meet projected cash flow needs for the next six months. Provided in the attached report are each portfolio's current market value and yield as of September 30, 2012, as well as comparisons to other market benchmarks. This report confirms that no leverage (use of debt to supplement investments) was utilized nor were derivatives (such as interest rate swaps, futures, or options) held during the reporting period. Also included are reviews of key economic factors which may affect the portfolio's potential investment results. ANALYSIS Cash Position The City's Portfolio balances decreased from $ million on June 30, 2012 to $ million as of September 30, This decrease.was mainly due to debt service payments of approximately $66.64 million and other operational payments, offset by receipt of property tax revenues.

2 Deanna J. Santana, City Administrator Subject: Cash Management Report Date: October 31, 2012 Page 2 The Successor Agency's portfolio decreased from a balance of $ million as of June 30, 2012 to $46.56 million as of September 30, Contributing to the portfolio decrease was the payment of $21.51 million to the County of Alameda, as was required by California Health and Safety Code (HSC) (b)(2)(a), a residual amount that was still owed to the taxing entities, also debt service payments of approximately $31 million, and other project expenditures. Yield Comparison The effective rate of return on total assets in the Operating Fund Portfolio for the month ending September 30, 2012 was 0.32%. The effective rate of return ontotal assets in the Successor Agency's Fund Portfolio for the month ending September 30, 2012 was 0.67%. The Successor and City Portfolio outperformed their benchmark, the 1-year government agencies yield of 0.21%) and the Successor Portfolio outperformed the yield on the Local Agency Investment Fund (LAIF) of 0.35%, however, the City Portfolio slightly underperformed LAIF's yield. The performance comparison to LAIF must be considered in light of LAIF's historical tendency to lag market changes in both rising and falling interest rate environments. Moreover, the City does not actively sell securities in the portfolio to take advantage of cyclical swings in the market, which could result in the loss of principal. The primary investment objective of the City for the portfolio is to maximize safety, liquidity, and return in that respective order. PUBLIC OUTREACH/INTEREST Not applicable. COORDINATION The Budget Office and City Attorney's Office have been consulted in preparation of this report. COST SUMMARY/IMPLICATIONS.Since this is an informational report, there are no budget implications associated with the report. SUSTAINABLE OPPORTUNITIES Economic : The Cash Management Report summarizes the characteristics of the investment portfolios for the quarter. The portfolios' credit quality remains high and well within the parameters of the City's Investment Policy. Liquidity for both portfolios remains sufficient to meet the City's projected needs. Environmental: To the extent that new investment opportunities are foimd in companies involved in environmentally positive activities, the City will invest in these companies (i.e. Commercial Paper, Medium Term Notes, etc.) if permitted by the City Investment Policy. Item: Finance and Management Committee November 27, 2012

3 Deanna J. Santana, Cit> Administrator Subject: Cash Management Report Date: October 3 K 2012 Page 3 Social Equity: The City's policy is to invest, when possible, in companies that promote the use and production of renewable energy resources and any other types of socially responsible investments. Optimization of the portfolios, while observing those key areas, will not only produce interest earnings to the General Fund, but these monies may be available for services to disadvantaged areas, or enhanced recreational or social venues. Furthermore, the Treasury Division makes every effort to identify and purchase additional qualifying investments from renewable energy and other socially responsible companies. For questions regarding this report, please contact me at (510) Respectfully submitted. Katano Kasaine, Treasurer Treasury Division Reviewed by: David Jones, Principal Financial Analyst Treasury Division Prepared by: Madhukar (Max) Kumar, Treasury Analyst III Treasury Division Attachments (1) Cash Management Report for the Quarter Ended September 30, 2012 Item: Finance and Management Committee November 27, 2012

4 City of Oakland, California And the City of Oakland-Successor of the City of Oakland, California Cash Management Report for The Quarter Ended September 30, 2012 City Administrator's Office Treasury Division KATANO KASAINE Treasurer Investment Staff David Jones, Principal Financial Analyst Max Kumar, Treasury Analyst III Bemadette de Leon, Treasury Analyst Hi

5 CITY OF OAKLAND CASH MANAGEMENT REPORT FOR THE QUARTER ENDED SEPTEMBER 30, 2012 TABLE OF CONTENTS Cash Management Report I. Economic Review II. City of Oakland Portfolio Review Portfolio Composition Preservation of Capital/Safety Liquidity Diversity Derivatives Yield Benchmark Comparison Valuation and Leverage III. City of Oakland Successor Portfolio Portfolio Review Portfolio Composition Preservation of Capital/Safety Liquidity Diversity Derivatives Yield Valuation and Leverage 12 14

6 CITY OF OAKLAND AND CITY OF OAKLAND SUCCESSOR CASH MANAGEMENT REPORT FOR THE QUARTER ENDED SEPTEMBER 30,2012 PREPARED BY THE CITY ADMINISTRATOR'S OFFICE TREASURY DIVISION OCTOBER 31,2012

7 CITY OF OAKLAND AND OAKLAND SUCCESSOR CASH MANAGEMENT REPORT FOR THE QUARTER ENDED SEPTEMBER 30, ECONOMIC REVIEW MARKET OVERVIEW According to the U.S Department of Commerce, Real Gross Domestic Product- the output of goods and services produced by labor increased at an annual rate of 2.0% in the third quarter of 2012, which was up from the 1.3% growth during the second quarter. The U.S. Department of Commerce highlighted that increases in consumer spending, a rebound in goveriiment outlays and gains in residential construction contributed to the growth. The U.S. Labor Department reported the economy added 114,000 jobs in September and the unemployment rate decreased from 8.2% in June to 7.8%o in September, the largest drop in According to the Labor Department, a jump in part-time employment accounted for most of the gain, employment increased in healthcare, transportation and warehousing sectors. The Commerce Department reported that consumer spending, which accounts for about 70 percent of U.S economic activity, grew at a 2 percent rate in third quarter, after eight straight quarters of declines, government spending finally contributed to economic growth. Similarly, the Census Bureau reported that U.S. retail sales for September totaled $412.9 billion, an increase of 1.1 percent compared with August and up 5.4 percent yearly. U.S. Retail sales increases over three consecutive months have helped the economic recovery. Record low mortgage rates are increasing demand for housing, as housing sector is showing signs of improvement. The Commerce Department reported that Americans bought new homes in September at the fastest pace in two years, Sales climbed 5.7 percent to a 389,000 homes at a annual pace, the most since April Similarly, housing starts in the U.S. surged 15 percent in September, the highest levels in four years at a 872,000 annual rate. According to RealtyTrac, home foreclosure activity in California fell to a new five year low in the third quarter, as rising home prices eased pressure on homeowners and lenders. There were 49,026 default notices on residential properties from July through September, down 31.2 percent from last quarter and down 63.8 percent from the first quarter of INTEREST RATES Inflation and unemployment continue to be the primary concern of the Federal Open Market Committee "FOMC". To support a stronger economic recovery, the Committee agreed to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The FOMC left the federal funds target rate unchanged at its August and September policy meetings, stating that the rate would remain in the exceptionally low range of 0 percent to 0.25 percent at least through late The FOMC also kept the rate it charges on direct loans to banks (i.e. the discount rate) steady at 0.75 percent.

8 11. CITY OF OAKLAND PORTFOLIO REVIEW The City's Portfolio balances decreased from $ million on June 30, 2012 to $ million by September 30, This decrease was mainly due to debt service payments of approximately $66.64 million and other operational payments, offset by receipt of property tax revenues. PORTFOLIO COMPOSITION The Portfolio continues to comply with all provisions of the City's adopted Investment Policy for Fiscal Year , including compliance with applicable local ordinances and resolutions such as Nuclear Free Zone, Linked Banking, and Tobacco Divestiture. The following discussion addresses the City's investment portfolio characteristics in terms of the Investment Policy's four objectives: safety, liquidity, diversity and return. Portfolio detail for each month of the current quarter is attached to this report. Preservation of Capital/Safetv. In the chart below, the City's holdings are depicted by credit rating category as of September 30, Approximately 82.28% of Operating Fund investments were rated in the AAA/Aaa category while 10.97% primary unrated holdings represent the Fund's investments in the Local Agency Investment Fund ("LAIF"). The Al/Pl/Fl category contained 6.19%. On August 6, 2011, the government agencies were downgraded by Standard and Poor's Rating Agency to AA+ from AAA. Moody's Investors' Service and Fitch Ratings continue to maintain AAA rating for government agencies. The City's Investment Policy for FY does not have a rating criteria level for government agencies. City of Oakland Operating Fund Portfolio Credit Quality (As of 9/3 0/12) A1/P1/F1 6.19% Not Rated 10.97% MIG1/SP1/F1 0.56% AAA/Aaa 82.28%

9 Liquiditv. Liquidity continues to be a primary objective when making investment decisions for the Operating Pool portfolio. With ongoing capital projects at the Port and within the City, and to ensure that sufficient liquidity is available to meet day-to-day expenditures, the City maintains a sufficient "cushion" in money market funds to meet unanticipated project expenditures. Debt service payable from the City's Operating Pool for the Port and the City for the six months following September 30, 2012, is approximately $112 million. Consequently, staff will continue to invest in short-term instruments and money markets as investment tools to maintain adequate shortterm liquidity. Investments maturing over the next six months are as follows: Days Amount(s) Percent 0-30 $ 212,727, % $ 118,000, % Total $ 330,727, % Investments maturing within 180 days include $49.62 million in LAIF and $83.11 million in money market funds, both of which are considered to have a one-day maturity due to the ability to withdraw funds daily. Five Year Historical Portfolio Balance: Listed below is the balance for the operating fund portfolio for each of the last 5 years. Year Amount Percent Increase/Decrease From Prior Year September 2012 $ 452,194, % September 2011 $ 359,391, % September 2010 $ 288,401, % September 2009 $219,209,000 (6.50%) September 2008 $ 237,250,000 -

10 The following graph depicts the Operating Fund Portfolio by dollars invested and the percentage in each maturity range as of September 30, City of Oakland Operating Fund Portfolio Maturity (As of 9/30/12) 140,000, % 120,000, ,000, ,000, ,000, ,000, ,000, Years 3+Years Days to Maturity

11 fjiversity. To reduce the risks of investing, the portfolio is diversified among a variety of financial instruments, as depicted by the following chart. In addition to limiting the types of investments permissible in any one category as outlined in the Investment Policy, no more than 5% of the total cash portfolio may be invested in any one issue. This single-issue provision does not apply to money market funds or to LAIF, as they each are backed by a large portfolio of highly diversified assets. City of Oakland Operating Fund Portfolio Diversity (As of 9/30/12) Commerical Paper 2.21% State of Calif. laif 10.97% Negotiable CDs Cal State RANs 0.56% Money Market Funds 18.38% US Govt. Agencies 63.90% Derivatives. The Operating Fund Portfolio contained no derivative instruments (interest rate swaps, futures, or options) during this reporting period. Yield. Total interest earned for the quarter ended September 30, 2012 was approximately $352,603. The effective rate of return on total assets in the Operating Fund Portfolio for month-end September 30, 2012 was 0.32% as compared to 0.36% for June 30, It continues to be the City's practice to hold investments to maturity rather than to sell at a loss and adjust to the market's yield curve. The primary investment objective of the City for the portfolio is to maximize safety, liquidity, and return in that respective order.

12 Comparative yields for the quarter are shown below. City of Oakland Operating Fund Comparative Annualized Yields (As of 9/3 0/12) As of Month-end 1-Year Govt. Agency LAIF' Operating Fund July % 0.36% 0.28% August % 0.38% 0.30% September % 0.35% 0.32% ^Effective monthly average return. Benchmark Comparison: The effective rate of return on total assets in the Operating Fund Portfolio for the month ending September 30, 2012 was 0.32%. The City's Operating Fund Portfolio out-performed the 1-year government agency which yielded a rate of 0.21% as of September 30, The City's Operating Fund Portfolio slightly underperformed the Local Agency Investment Fund ("LAIF"), which ended the month at 0.35%. As of September , the City's Portfolio Fund's average days-to-maturity (ADM) was 324 days versus LAIF's average days-to-maturity (ADM) was 268 days. The performance comparison to LAIF must be considered in light of LAIF's historical tendency to lag market changes in both rising and falling interest rate environments. The City does not actively sell securities in the portfolio to take advantage of cyclical swings in the market, which could result in the loss of principal. The primary investment objective of the City for the portfolio is to maximize safety, liquidity, and yield in that respective order. The summary below provides total portfolio income recognized for the last quarter as compared to the prior quarter and the same quarter one year ago. Total Portfolio Quarter-End Total interest Earnings Realized gains (losses) from sales Total income recognized TOTAL PORTFOUO INCOME RECOGNIZED Accrual Basis September lune September ,603 $ S $ $ Fiscal Yenr-to-Date Total Interest Earnings Realized gains (losses) from sales Total income recognized 352,603 $ 352,603 $ $ 1,919,839 $ 507, ,330

13 Valuation and Leverage. Based on information received from Interactive Data Corporation, the market value of the Operating Fund was $ million, which was above book value by $632,156. There was no leverage in the portfolio during the reported period and liquidity was maintained at sufficient levels. The following table illustrates the net unrealized gains or losses on the portfolio when comparing the portfolio's market value to both its original cost and amortized cost. UNREALIZED GAEVS & LOSSES Cash Basis Accrual Basis Market Value $ 452,826,414 Market Value $ 452,826,414 Original Cost (452,183,032) Original Cost (452,194,259) Net Unrealized Gain (Loss) $ 643,382 Net Unrealized Gain (Loss) $ 632,156 The City's investment strategy, per the Investment Policy, is generally to hold securities to maturity. The net unrealized gains noted above are "paper gains" where there is an inverse relationship between the changes in market interest rates to the value of investment securities. (Remainder of this Page Intentionally Left Blank)

14 The graph below reflects the reconciliation of investment portfolio balances compared to the City's total cash and investments reflected in the City's Financial System (Oracle). Cash and Investment Balances by Fund Type As of September 30, 2012 $487,360,024 Caf?i!a)ft-qectFunds, $35,710,561, 6,5% Iniefnal Service Funds, (531,592,924), 5.7% General Fund Group, $169,437,343, 30.8% ft)rtof Oakland Funds $229,263,495,41.6% Pension Annuity, $2,747,609, 0.5% Trust Funds, $9,783,246,1.. Special Revenue Funds, $19,372,779,3.5% Debt Service Funds, $15,335,461, Enlerprise Funds, $33,523,687, 2,8% 6.1% Total Investments Portfolio* Cash in Bank Total Cash and Investments** OMB^S & PFRS Funds, $3,778,766, 0,7% $452,194, $487,360,024 * Includes unamortized premiums, discounts, and interest earned but not yet received. **Per City's Financial Syslem(Oracle) The net negative funds of $31.6 million are in the Internal Service Funds. HI. CITY OF OAKLAND SUCCESSOR PORTFOLIO PORTFOLIO REVIEW The Successor's portfolio decreased from a balance of $ million as of June 30, 2012 to $46.56 million as of September 30, Contributing to the portfolio decrease was the payment of $21.51 million to the County of Alameda, as was required by HSC (b)(2)(a), an residual amount that was still owed to the taxing entities, also debt service payments of approximately $31 million and other project expenditures.

15 PORTFOLIO COMPOSITION The Portfolio continues to comply with all provisions of the City's investment Policy for Fiscal Year , including compliance with applicable local ordinances and resolutions such as Nuclear Free Zone, Linked Banking, and Tobacco Divestiture. In addition, the City will invest, when possible, in companies that promote the use and production of renewable energy resources and any other type of socially responsible investments. The following discussion addresses the Successor investment portfolio characteristics in terms of the Investment Policy's four objectives of safety, liquidity, diversity and return. Portfolio detail for each of the months in the current quarter is attached to this report. Preservation of Capital/Safety. The Successor's holdings by credit rating category are depicted in the chart below. Approximately 93.46% of Operating Fund investments were rated in the AAA/Aaa. The MIGI/SP-l/Fl category contained 6.54% of the total Operating Fund. On August 6, 2011, the government agencies were downgraded by Standard and Poor's Rating Agency to AA+ from AAA. Moody's Investors' Service and Fitch Ratings continue to maintain AAA for government agencies. The City's Investment Policy for FY does not have a rating criteria level for government agencies. Oakland Successor Portfolio Credit Quality (As of 9/30/12) M(G1/SP-1/F1 6.54% AAA/Aaa 93.46% Liquidity. Liquidity within the Successor's Portfolio remains sufficient to meet only debt service needs of the Successor for the next six months and beyond. The debt service payment for the next six months for the Successor is approximately $22 million. The estimated cash flow for Successor Portfolio is summarized below:

16 Successor Portfolio Estimated Cash Flow October 2012-June 2013* Beg: Available Balance $ 31,000,000 ROPS Receipt 26,027,239 Debt Service (20,738,068) Other expenses (10,289,171) Bal:June30,2013 S 26,000,000 *Successor Pool Only Five Year Historical Portfolio Balance: Listed below is the balance for the operating fund portfolio for each of the last 5 years. Year Amount Percent Increase/Decrease From Prior Year September 2012 $ 46,557,909 (71.07%) September 2011 $ 160,942,468 (4.12%) September 2010 $ 167,864,000 (17.32%) September 2009 $203,033, % September 2008 $ 177,790,000 - (Remainder of this Page Intentionally Left Blank) 10

17 The following chart depicts the Successor's Portfolio by percentage and dollars invested in each maturity range. Oakland Successor Agency Portfolio Maturity (As of 9/30/12) 20,000,000 40,86% 18,000, % 16,13% 12.90% 6.45% to 3 Years Days to Maturity

18 Diversity. To reduce the risks of investing, the portfolio is diversified among a variety of instruments, as depicted by the following chart. In addition to limiting the types of investment in any one category, as outlined in the Investment Policy, no more than 5% of the total cash portfolio may be invested in any one issue. Oakland Successor Agency Portfolio Diversity (As of 9/30/12) Money Market Funds 15.04% CA State RANs 6.54% US Govt. Agencies 78.42% Derivatives. The Agency Portfolio contained no derivative instruments during this reporting period. Yield. Total interest earned for the quarter ended September 30, 2012, was approximately $88,558. The effective rate of return on total assets in the Successor's Portfolio was 0.67% for month ending September 30, The Successor's Portfolio outperformed the 1-year government agency which yielded a rate of 0.21% as of September 30, The Successor's Portfolio outperformed the Local Agency Investment Fund ("LAIF"), which ended the month at 0.35%o. The performance comparison to LAIF must be considered in light of LAIF's historical tendency to lag market changes in both rising and falling interest rate environments. As of September , Successor's Portfolio Fund's average days-to-maturity (ADM) was 182 days versus LAIF's average days-to-maturity (ADM) was 268 days. 12

19 Comparative yields for the quarter are shown below. Oakland Successor Agency Comparative Annualized Yields (As of 9/30/12) As of Month-end 1-Year Govt. Agency LAIF" Successor July % 0.36% 0.42% August % 0.38% 0.45% September % 0.35% 0.67% 'Effective monthly average return The summary below provides total portfolio income recognized for the last quarter as compared to the prior quarter and the same quarter one year ago. Total Portfolio Quarter-End Total Interest Earnings Realized gains (losses) from sales Total income recognized Fiscal Year-to-Date Total Interest Earnings Realized gains (losses) from sates Total income recognized TOTAL PORTFOLiO INCOME RECOGNIZED Accrual Basis Se^e'm b'er3'o'. ~o"2 Tun'eloTioiT $ $ i,558 $ $ 120,583 $ 639,812 $ September ?.558 $ $

20 Valuation and Leverage. Based on information received from Interactive Data Corporation, the market value of the Successor portfolio for the quarter ended September 30, 2012 was $46.83 million, which was above book value by $269,677. There was no leverage in the portfolio during the reporting period and liquidity was maintained at sufficient levels. The following table illustrates the net unrealized gains or losses on the portfolio when comparing the portfolio's market value to both its original cost and amortized cost. UNREALIZED GAINS & LOSSES Cash Basis Accrual Basis Market Value Original Cost Net Unrealized Gain (Loss) 46,827,586 (46,799,268) 28,318 Market Value Original Cost Net Unrealized Gain (Loss) 46,827,586 (46,557,909) 269,677 Portfolio Earnings Comparison 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.1 0% Jul-12 Aug-12 Sep-12 1-Year Government Agency LAIF Successor Portfolio ElCitv Portfolio 14

21 SymPro City Successor Agency Pool Portfolio Management Portfolio Summary September 30, 2012 City of Oakland Par Market Book %of Days to YTM YTM Investments Value Value Value Portfolio Term Maturity 360 Equiv, 365 Equiv. Federal Agency Issues - Coupon 18,500, ,780, ,521, , Federal Agency Issues - Discount 18,000, ,999,616,00 17,991, Money Market 7,000, ,000, ,000, CA State RANs 3,000, ,047, ,044, , Investments 46,500, ,827, ,557, % Total Earnings September 30 Month Ending Fiscal Year To Date Current Year 26, , Average Daily Balance Effective Rate of Return 48,795, % 72,613, % Katano Kasaine, Treasury Manager Reporting period 09/01/ /30/2012 Run Date: 10/22/ Portfolio SR PM (PRF_PM1)730 Report Ver a

22 City Successor Agency Pool Portfolio Management Portfolio Details - Investments September 30, 2012 Page1 CUSIP Average Investment # Issuer Balance Purchase Date Par Value Market Value Book Value Stated Rate S&P YTM Days to 365 Maturity Maturity Date Federal Agency Issues - Coupon 31398AXJ FEDERAL NATIONAL MORTGAGE 05/15/2009 4,500, ,662, ,497, AAA /15/ MQV FEDERAL NATIONAL MORTGAGE 05/28/2009 3,000, ,053, ,028, AAA /21/ A2S FEDERAL NATIONAL MORTGAGE 08/06/2010 5,000, ,037, ,997, AAA /23/ A5W FEDERAL NATIONAL MORTGAGE 11/01/2010 3,000, ,019, ,999, AAA /18/ G0BR FEDERAL NATIONAL MORTGAGE 06/17/2011 3,000, ,007, ,997, AAA /09/2013 Subtotal and Average 18,524, ,500, ,780, ,521, Federal Agency Issues - Discount L Freddie Mac Discount 06/21/2012 3,000, ,999, ,998, AA /25/ N Freddie Mac Discount 06/25/2012 3,000, ,999, ,998,537, AA /07/ R Freddie Mac Discount 06/25/2012 3,000, ,999, ,998, ,140 AA /28/ L Freddie Mac Discount 06/26/2012 3,000, ,999, ,998, AA /22/ M Freddie Mac Discount 06/26/2012 3,000,000,00 2,999, ,998, AA /29/ K Fannie Mae Discount 06/25/2012 3,000, ,999, ,998, AA 0, /15/2012 Subtotal and Average 22,690, ,000, ,999, ,991, Money Market SYS Invesco 3,500, ,500, ,500, AAA SYS JP MORGAN INST PRIME MMF 3,500, ,500, ,500, AAA Subtotal and Average 4,533, ,000, ,000, ,000, Local Agency Investment Funds SYS LOCAL AGENCY INVESTMENTS , Subtotal and Average CA State RANs 13063BB STATE OF CALIFORNIA 08/23/2012 3,000, ,047, ,044, /20/2013 Subtotal and Average 3,046, ,000, ,047, ,044, Total and Average 48,795, ,500, ,827, ,557, Run Date: 10/22/ :55 Portfolio SR PM (PRF_PM2) 7,3 0 Repon Ver a

23 SymPro Successor Aging Report Aging Report By Maturity Date As of October 1, 2012 City of Oakland Maturity Par Value Percent of Portfolio Current Book Value Current Market Value Aging Interval: 0 days ( 10/01/ /01/2012 ) 3 Maturities 0 Payments 7,000, % 7,000, ,000, Aging Interval: 1-30 days ( 10/02/ /31/2012 ) 4 Maturities 0 Payments 12,000, % 11,995, ,999, Aging Interval: days (11/01/ /30/2012 ) 2 Maturities 0 Payments 6,000, % 5,996, ,999, Aging Interval: days (12/31/ /30/2013 ) 1 Maturities 0 Payments 3,000, % 3,028, ,053, Aging Interval: days (03/31/ /26/2013 ) 3 Maturities 0 Payments 11,000, % 11,039, ,092,711,00 Aging Interval: days (09/27/ /16/2015 ) 2 Maturities 0 Payments 7,500, % 7,497, ,682, Aging Interval: 1081 days and after ( 09/17/ ) 0 Maturities 0 Payments % O.OO 0.00 Total for 15 Investments 0 Payments ,557, ,827, Data Updated: SET_AGE: 10/22/ :58 Run Date: 10/22/ :58 Portfolio SR AG (PRF_AG) Report Ver a

24 City Successor Agency Pool Portfolio Management Portfolio Summary August 31, 2012 City of Oakland Par Market Book %of Days to YTM YTM Investments Value Value Value Portfolio Term Maturity 360 Equiv. 365 Equiv. Federal Agency Issues - Coupon 18,500, ,802, ,527, , Federal Agency Issues - Discount 27,000, ,997, ,989, Money Market 1,000, ,000, ,000,000, ,135 CA State RANs 3,000, ,050, ,049, , Investments 49,500, ,850, ,566, % Total Earnings August 31 Month Ending Fiscal Year To Date Current Year Average Daily Balance Effective Rate of Return 30, ,789, % 61, ,137, % Katano Kasaine, Treasury Manager Reporting period 08/01/ /31/2012 Run Date, 10/22/ :54 Portfolio SR PM(PRF_PM1) 7.3,0 Report Ver a

25 City Successor Agency Pool Portfolio Management Portfolio Details - Investments August 31, 2012 Page 1 Average Purchase Stated YTM Days to Maturity CUSIP Investment # Issuer Balance Date Par Value Market Value Book Value Rate S&P 365 Maturity Date Federal Agency Issues - Coupon 31398AXJ FEDERAL NATIONAL MORTGAGE 05/15/2009 4,500, ,670, ,497, AAA 2, /15/ MQV FEDERAL NATIONAL MORTGAGE 05/28/2009 3,000,000,00 3,063, ,035, AAA /21/ A2S FEDERAL NATIONAL MORTGAGE 08/06/ , ,040, ,997, AAA /23/ A5W FEDERAL NATIONAL MORTGAGE 11/01/2010 3,000, ,021, ,999, ,750 AAA /18/ G0BR FEDERAL NATIONAL MORTGAGE 06/17/2011 3,000,000,00 3,008, ,997, AAA 0, /09/2013 Federal Agency Issues - Discount Subtotal and Average 18,529, ,500, ,802, ,527, L Freddie Mac Discount 06/21/2012 3,000, ,999, ,998, AA /25/ H Freddie Mac Discount 06/21/2012 3,000, , ,999, AA /26/ E Freddie Mac Discount 06/21/2012 3,000, ,999, ,999, AA /05/ N Freddie Mac Discount 06/25/2012 3,000, ,999, ,998, fia /07/ R Freddie Mac Discount 06/25/2012 3,000, ,999, ,998, AA /28/ L Freddie Mac Discount 06/26/2012 3,000, ,999,640, , AA /22/ M Freddie Mac Discount 06/26/2012 3,000, ,999, ,998, AA /29/ G Federal Home Loan Bank Discoun 06/21/2012 3,000, ,999, ,999, AA /19/ K Fannie Mae Discount 06/25/2012 3,000, , ,998, AA /15/2012 Money Market Subtotal and Average 38,696, ,000, ,997, ,989, SYS Invesco 500, , , AAA SYS JP MORGAN INST PRIME MMF 500, , , ,110 AAA Local Agency Investment Funds Subtotal and Average 17,870, ,000, ,000, ,000, SYS LOCAL AGENCY INVESTMENTS Negotiable CD's Subtotal and Average Subtotal and Average 2,806, CA State RANs 13063BB STATE OF CALIFORNIA 08/23/2012 3,000, ,050, ,049, /20/2013 Subtotal and Average 885, ,000, , , Run Dale: 10/22/ :54 Portfolio SR PM (PRF_PM2) Report Ver a

26 City Successor Agency Pool Portfolio Management page 2 Portfolio Details - Investments August 31, 2012 Average Purchase Stated YTM Days to CUSIP Investments Issuer Balance Date Par Value Market Value Book Value Rate S&P 365 Maturity Total and Average 78,789, ,500, ,850, ,566, Portfolio SR Run Dale. 10/22/ :54 (PRF_PM2) 7.3.0

27 SymPro Successor Aging Report Aging Report By Maturity Date As of September 1,2012 City of Oakland Maturity Par Value Percent of Portfolio Current Book Value Current Market Value Aging Interval: Odays (09/01/ /01/2012 ) 3 Maturities 0 Payments 1,000, % 1,000, ,000, Aging Interval: 1-30 days (09/02/ /01/2012 ) 3 Maturities 0 Payments 9,000, % 8,997, ,999, Aging Interval: days ( 10/02/ /30/2012 ) 6 Maturities 0 Payments 18,000, % 17,991, ,997, Aging Interval: days ( 12/01/ /28/2013 ) 1 Maturities 0 Payments 3,000, % 3,035, ,063, Aging Interval: days (03/01/ /27/2013 ) 2 Maturities 0 Payments 6,000, % 6,047, ,058, Aging Interval: days ( 08/28/ /17/2015 ) 3 Maturities 0 Payments 12,500, % 12,494, , Aging Interval: 1081 days and after (08/18/2015 ) 0 Maturities 0 Payments % Total for 18 Investments 0 Payments ,566, ,850, Data Updated; SET_AGE: 10/22/ :57 Run Date: 10/22/ :57 Portfolio SR AG (PRF_AG) 7,2,0 Report Ver a

28 SymPro City Successor Agency Pool Portfolio Management Portfolio Summary July 31, 2012 City of Oakland Par Market Book %of Days to YTM YTM Investments Value Value Value Portfolio Term Maturity 360 Equiv. 365 Equiv. Federal Agency Issues Coupon 18,500,000,00 18,824, ,532, ,73 1, Federal Agency Issues - Discount 45,000, ,994, ,985, Money Market 15, ,000,000,00 15,000, ,135 Negotiable CD's 3.000, , Investments 81,500, ,818, ,518, % Total Earnings July 31 Month Ending Fiscal Year To Date Current Year Average Daily Balance Effective Rate of Return 31,600,65 89,486, % 31, ,486, % Katano Kasaine, Treasury Manager Reporting period 07/01/ /31/2012 Run Dale: 10/22/ :42 Portfolio SR PM1PRF_PM1)7.3 0 Report Ver a

29 City Successor Agency Pool Portfolio Management Portfolio Details - Investments July 31, 2012 Page 1 CUSIP Average Investment # Issuer Balance Purchase Date Par Value Market Value Book Value stated Rate S&P YTM Days to 365 Maturity Maturity Date Federal Agency Issues - Coupon 31398AXJ FEDERAL NATIONAL MORTGAGE 05/15/2009 4,500, ,677, ,497, AAA /15/ MOV FEDERAL NATIONAL MORTGAGE 05/28/2009 S,OQO,OOO.QQ 3,074, ,041, f21/ A2S FEDERAL NATIONAL MORTGAGE 08/06/2010 5,000, ,042, ,996, AAA /23/ A5W FEDERAL NATIONAL MORTGAGE 11/01/2010 3,000, ,021, ,999, AAA /18/ G0BR FEDERAL NATIONAL MORTGAGE 06/17/2011 3,000,000,00 3,008, ,997, AAA /09/2013 Subtotal and Average 18,535, ,500, ,824, ,532, Federal Agency Issues - Discount D Freddie Mac Discount 12/16/2011 3,000, ,998, AA /24/ L Freddie Mac Discount 06/21/2012 3,000, , ,998, AA /25/ H Freddie Mac Discount 06/21/2012 3,000, ,999, ,999,110, AA /26/ E Freddie Mac Discount 06/21/2012 3,000,000,00 2,999, ,999, AA /05/ N Freddie Mac Discount 06/25/2012 3,000, ,999,103,00 2, AA /07/ R Freddie Mac Discount 06/25/2012 3,000, ,998, , AA /28/ L Freddie Mac Discount 06/26/ , ,820, AA /22/ M Freddie Mac Discount 06/26/2012 3,000, , ,998, AA /29/ C Federal Home Loan Bank Discoun 06/21/2012 3,000,000,00 2,999, ,999,535, AA /22/ B Federal Home Loan Bank Discoun 06/21/2012 3,000, ,999,970,00 2,999, AA /13/ G Federal Home Loan Bank Discoun 06/21/2012 3,000, ,999, ,999, AA 0, /19/ C Federal Home Loan Bank Discoun 06/25/2012 3,000, ,999, ,999, AA 0, /22/ D Federal Home Loan Bank Discoun 06/25/2012 3,000, ,999, ,999,557, AA /23/2012 3I33S4D Federal Home Loan Sank Discoun 06/26/2012 3,000, ,00 2,999,565, AA /23/ eK Fannie Mae Discount 06/25/2012 3,000,000,00 2,999, , AA /15/2012 SuMotal and Average 56,951, ,000, ,994, ,985, Money Market SYS Invesco 5,500, ,500, ,500, AAA SYS JP MORGAN INST PRIME MMF 9,500, ,500, ,500,000, AAA Subtotal and Average 11,000, ,000, ,000, ,000, Local Agency Investment Funds SYS LOCAL AGENCY INVESTMENTS Subtotal and Average Run Date: 10/22/ :42 Portfolio SR PM (PRF_PM2) 7,3-0 Repon Ver a

30 City Successor Agency Pool Portfolio Management Portfolio Details - Investments July 31, 2012 Page 2 CUSIP Investment # Issuer Negotiable CD's SYS _ UNION BANK OF CALIF Subtotal and Average Average Balance Purchase Date Par Value Market Value Stated Book Value Rate S&P YTM Days to Maturity 365 Maturity Date 12/16/2011 3,000,000,00 3,000, ,000,000, A /30/2012 3,000, ,000, ,000, ,000, Total and Average 89,486, ,500, ,818, ,518, Run Dale: 10/22/ Portfolio SR PM (PRF_PM2) 7.3,0

31 SymPro Successor Aging Report Aging Report By Maturity Date As of August 1, 2012 City of Oakland Maturity Par Value Percent of Portfolio Current Book Value Current Maritet Value Aging Interval; 0 days (08/01/ /01/2012 ) 3 Maturities 0 Payments 15,000, % 15,000, ,000, Aging Interval: 1-30 days (08/02/ /31/2012 ) 7 Maturities 0 Payments 21,000, ,77% 20,996, ,999, Aging Interval: days ( 09/01/ /30/2012 ) 7 Maturities 0 Payments 21,000, % 20,992, ,996, Aging Interval: days (10/31/ /28/2013 ) 2 Maturities 0 Payments 6, % 5,996, ,998,014,00 Aging Interval: days (01/29/ /27/2013 ) 1 Maturities 0 Payments 3,000, % 3,041, ,074, Aging Interval: days (07/28/ /17/2015 ) 4 Maturities 0 Payments 15,500, % 15,491, ,749, Aging Interval: 1081 days and after ( 07/18/ ) 0 Maturities 0 Payments % ' Total for 24 Invesbnents 0 Payments ,518, ,818, Data Updated: SET_AGE; 10/22/ :57 Run Dale: 10/22/ :57 Portfolio SR AG (PRF_AG) Report Ver a

32 SymPro City of Oakland Operating Fund Portfolio Management Portfolio Summary September 30, 2012 City of Oakland Investments Par Market Book %of Days to YTM YTM Value Value Value Portfolio Term Maturity 360 Equiv. 365 Equiv. Federal Agency Issues - Coupon 99,360, ,812, ,312, , Federal Agency Issues - Discount 189,795, ,749, ,631,729,25 41, Money Market , , ,110, Local Agency Investment Funds 49,617, , ,617, Negotiable CD's 18,000, ,004, ,000,000, Commercial Paper - Discount 10,000, ,991, ,984, Cal State RANs 2,500, ,539, ,537,084, , Investments 452,382, ,826, ,194, % Cash and Accrued Interest Accrued Interest at Purchase 2, , Subtotal 2, ,535.8d Total Cash and Investments 452,382, , ,196, S Total Earnings September 30 Month Ending Fiscal Year To Date Current Year 118, , Average Daily Balance 454,164, ,181, Effective Rate of Return 0.32% 0.30% Katano Kasaine, Treasury Manager Reporting period 09/01/ /30/2012 Data Updated: SET_PORT: 10/19/ :24 Run Date: 10/19/ Portfolio POOL PM(PRF_PM1) 7.3,0 Report Ver, 7.3.3a

33 City of Oakland Operating Fund Portfolio Management Portfolio Details - Investments September 30, 2012 Page 1 Average Purchase Stated YTM Days to Maturity CUSIP Investment # Issuer Balance Date Par Value MarVet Value Book Value Rate S&P 360 Maturity Date Federal Agency Issues - Coupon 31331K3D FEDERAL FARM CREDIT BANK 12/19/2011 3, ,00 3,000,000, AA /19/ K4D FEDERAL FARM CREDIT BANK 12/27/2011 3,000, ,001,767,00 3,000, AA /27/ EAJW FEDERAL FARM CREDIT BANK 04/02/ , ,867,370,22 2,860, AA *02/ EAMJ FEDERAL FARM CREDIT BANK 04/23/2012 3,000, ,000, ,000,000, AA /23/ EA FEDERAL FARM CREDfT BANK 05/07/2012 3,000, ,000, ,000, AA 0, /07/ EAND FEDERAL FARM CREDIT BANK 06/01/2012 3, ,000, ,999,147, AA 0,767 1,218 02/01/ EAWR FEDERAL FARM CREDIT BANK 07/09/ ,000,00 5,015, ,999,075, AA 0,549 1,011 07/09/ EAK FEDERAL FARM CREDIT BANK 08/20/2012 3,000, ,003, ,000,000, AAA ,053 09/20/ EAS FEDERAL FARM CREDIT BANK 09/04/2012 3,000, ,000, ,000, AA ,159 12/04/ EAV FEDERAL FARM CREDIT BANK 09/17/2012 3, , ,000, AA ,081 09/17/ EA2K FEDERAL FARM CREDIT BANK 09/28/2012 3,000, , ,000, AA 0,444 1,092 09/28/ RK FEDERAL HOME LOAN BANK 02/17/2011 3,000,000,00 3,012, ,999, AAA 1, /27/ C FEDERAL HOME LOAN BANK - 10/14/ , ,005, , AAA n/27/ HQ FEDERAL HOME LOAN BANK 12/16/2011 3,000, ,000, ,000, AA /10/ WT FEDERAL HOME LOAN BANK 06/27/2012 3, ,267,00 3,000, AA /25/ XG FEDERAL HOME LOAN BANK 06/28/2012 3,000, , ,00 3,000, AA /30/ XM FEDERAL HOME LOAN BANK 06/28/2012 3,000,000,00 3,000,000,00 2,999, AA /02/ AZ FEDERAL HOME LOAN BANK 06/28/ , ,000, ,999, AA /15/ GE FEDERAL HOME LOAN BANK 08/27/ , ,001, ,000, AA /27/ BY Federal Home Loan Discount 06/28/2012 3,000, ,998, AA /30/ EACY FEDERAL HOME LOAN MTG CORP 10/06/2011 3, ,027, ,999, AA /25/ G3J FEDERAL HOME LOAN MTG CORP 09/10/2012 3,000,000, , ,000, ,495 AA /10/ F9CB FEDERAL NATIONAL MORTGAGE 03/11/2008 3,000, ,051, ,000, AAA /11/ AXJ FEDERAL NATIONAL MORTGAGE 05/15/ , ,662, ,497, AAA /15/ A2S FEDERAL NATIONAL MORTGAGE 08/06/2010 3,000, ,548,00 2, AAA /23/ G0BR FEDERAL NATIONAL MORTGAGE 06/17/2011 3,000, ,007,431, , AAA /09/ G0BY FEDERAL NATIONAL MORTGAGE 07/18/2011 3, ,033,276,00 2,996, AAA /26/ A4T FEDERAL NATIONAL MORTGAGE 12/15/2011 2,000, ,000,548,00 2,000, AAA /30/ G0LN FEDERAL NATIONAL MORTGAGE 05/21/2012 5,000, ,014, ,985, AA ,004 07/02/ G0HC FEDERAL NATIONAL MORTGAGE 05/24/ , , , AA ,696 05/24/2017 3J57&ADF3 5J91S FREDDIE MAC 03/26/2012 3,000, , ,gS4,T AA 1,350 1,689 05/17/2017 Subtotal and Average 94,911, ,360, ,812, ,312, Data Updated: SET_PORT: 10/19/ :24 Run Date: 10/19/ :24 PortfofiD POOL PM {PRF_PM2) 7.3,0 Report Ver a

34 City of Oakland Operating Fund Portfolio Management Portfolio Details - Investments September 30, 2012 Page 2 Average Purchase Stated YTM Days to Maturity CUSIP Investment # Issuer Balance Date Par Value Market Value Book Value Rate S&P 360 Maturity Date Federal Agency Issues - Discount M Federal Home Loan Discount 12/14(2011 3,000, , ,997,860,00 o.oso AAA 0.0S /30/ M Federal Home Loan Discount 12/16/2011 3,000, ,999, ,998, ,060 AAA /30/ Federal Home loan Discouni 02/27/2012 5,000, , ,00 4,995, AA /04/ a4MB Federal Home Loan Discount 03/27/2012 3,000, ,999, ,997, AA /01/ a4M Federal Home Loan Discount 03/27/2012 3,000, ,999, ,997,870,00 0,120 AA /26/ M Federal Home Loan Discouni 03/28/2012 5,000, , ,995,912,50 0,135 AA /01/ R Federal Home Loan Discount 04/04/2012 3,000, ,999, ,997,165,00 0,140 AA /03/ Federal Home Loan Discount 04/04/ ,000,00 2, ,997, ,140 AA /05/ S Federal Home Loan Discount 04/05/2012 3,000, ,999, ,997,095,00 0,140 AA /10/ B4M Federal Home Loan Discount 04/25/2012 3,000,000,00 2,999, ,996, ,120 AAA /30/ S Federal Home Loan Discouni 04/25/2012 5, ,999, ,995,644,44 0,140 AA /05/ M Federal Home Loan Discount 04/26/2012 5, , ,996, AAA /30/ M Federal Home Loan Discount 04/26/2012 3,000, ,999, ,997,952,50 0,130 AA /01/ R Federal Home Loan Discount 04/26/2012 3,000, , , ,130 AA /27/ a4N Federal Home Loan Discount 04/26/2012 3,000, ,999, ,997, /06/ L Federal Home Loan Discount 04/26/2012 3,000, ,999, ,998,200, AA /23/ P Federal Home Loan Discount 04/26/2012 3,000, , , ,130 AA /13/ P Federal Home Loan Discount 04/26/2012 3,000, ,999, ,997, ,130 AA 0, /15/ M Federal Home Loan Discount 04/27/2012 3,000, , , AA /26/ a4M Federal Home Loan Discount 04/27/2012 3, ,00 2, , AA /26/ ^ Federal Home Loan Discount 04/27/2012 3,000, , , AA (31/ M Federal Home Loan Discount 04/27/2012 3,000, ,999, ,998, AAA /30/ P Federal Home Loan Discouni 04/27/2012 3,000, ,999, ,997, AA /13/ R Federal Home Loan Discount 05/31/ , ,999, ,998, AA /03/ GD Federal Home Loan Discount 06/29/2012 3,000, , ' 2,995, AA /28/ EV Federal Home Loan Discount 06/29/2012 3, ,00 2,998, ,996, AA /26/ GE Federal Home Loan Discount 09/26/2012 3,000, ,997, ,997, ,130 /\A /29/ GD Federal Home Loan Discount 09/26/2012 3,000,000,00 2,997, ,997, AA /28/ FC Federal Home Loan Discount 09/26/2012 3,000,000,00 2,997, ,997, ,140 AA /03/ GE Federal Home Loan Discount 09/27/2012 3, ,997, , ,130 AA /29/ K FREDDIE DISCOUNT 03/27/2012 3, ,00 2,999, ,997, AAA /10/ K FREDDIE DISCOUNT 03/27/2012 3,000, ,999, , ,00 0,130 AA /11/ K FREDDIE DISCOUNT 03/27/2012 3,000, ,999, ,997, ,130 AA /12/ K FREDDIE DISCOUNT 03/27/2012 5,000, , ,996, ,140 AA /11/ P FREDDIE DISCOUNT 04/04/2012 3,000,000,00 2, ,997, ,140 AAA /14/2012 Data Updated: SET_PORT: 10/19/ :24 Run Date 10/19/ Portfolio POOL PM (PRF_PM2) 7,3 0