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HomeMy WebLinkAbout06 QUARTERLY INVESTMENT REPORT FOR THE CITY OF TUSTIN AND THE SUCCESSOR AGENCY FOR THE TUSTIN COMMUNAGENDA REPORT Agenda Item Reviewed: City Manager Finance Director --@- MEETING DATE: FEBRUARY 21, 2023 TO: MATTHEW S. WEST, CITY MANAGER FROM: JENNIFER KING, FINANCE DIRECTOR/CITY TREASURER SUBJECT: QUARTERLY INVESTMENT REPORT FOR THE CITY OF TUSTIN AND THE SUCCESSOR AGENCY FOR THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY FOR THE QUARTER ENDING DECEMBER 31, 2022 SUMMARY: Government Code Section 53646 requires that the Treasurer make an Investment Report to the City Council at least quarterly showing balances by authorized investment and certifying its compliance with the adopted Investment Policy. RECOMMENDATION: Receive and file. CORRELATION TO THE STRATEGIC PLAN: Correlates with the City's Strategic Plan Goal C: Financial Strength, Item 3. This investment report provides evidence of the City's commitment to ensure that investments are in compliance with the adopted investment policy. DISCUSSION: In compliance with Government Code Section 53646, the attached Investment Report for the City of Tustin and the Successor Agency for the Tustin Community Redevelopment Agency for the quarter ending December 31, 2022 is rendered. The City's total cash and investments amounted to approximately $203 million as of December 31, 2022. The weighted average portfolio yield for the investment portfolio was 2.86%, which is 100 basis points higher than the weighted average portfolio yield for the prior quarter. The primary reason for the increase in the weighted average portfolio yield is due to continuing upward movement in shorter-term Treasury yields. Since September 30, 2022, the Federal Open Market Committee (FOMC) raised the federal funds rate twice, 0.75% in November and 0.50% in December in an effort to continue to counter inflation, although at a less aggressive pace. FOMC also indicated that "ongoing increases" in the federal funds rate are likely appropriate going forward. As a result, the 2- year Treasury yield increased to 4.43% by December 2022, compared to a yield of 4.28% in September 2022. The 5-year Treasury yield decreased to 4.01 % by December 2022, compared to a yield of 4.09% in September 2022. 6DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 DocuSign Envelope ID: 1B87510C-C529-4EB5-AF38-D1EA8A6BCDFDDocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 CHANDLER ASSET MANAGEMENT, INC. | 800.317.4747 | www.chandlerasset.com INVESTMENT REPORT Period Ending December 31, 2022 City of Tustin DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 SECTION 1 Economic Update SECTION 2 Account Profile SECTION 3 Portfolio Holdings SECTION 4 Transactions Table of Contents As of December 31, 2022 1 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 SECTION |Section 1 |Economic Update 2 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Economic Update    Market volatility has intensified as global central banks pursue monetary policies to combat persistently high inflation. Although the pace of job growth is moderating,the strength of the labor market has sustained economic growth.Inflation metrics are trending downward but remain significantly higher than the Fed’s target.While evidence of slowereconomic conditions has begun to mount,we expect the Federal Reserve to continue to raise rates to battle inflation, albeit at a less aggressive pace.Over the near-term,we expect financial market volatility to remain intensified with persistent inflation, geopolitical risk, and the Fed's hawkish monetary policy. As expected at the December 14th meeting,the Federal Open Market Committee (FOMC)raised the fed funds target rate by 50 basis points to a range of 4.25 –4.50%,in a downshift from four consecutive 75 basis point hikes.The decision was unanimous,and there was no change to the November statement.The sentiment was hawkish, indicating that “ongoing increases”in the fed funds rate are likely appropriate and citing continued labor market imbalances.FOMC members forecasted a higher fed funds rate,slower GDP growth,higher inflation,and higher unemployment in 2023 than in the September projections.We believe the FOMC will continue to implement tighter monetary policy at a slower pace and hold rates at restrictive levels for some time until inflationary pressures subside and remain in the Fed’s target range. In December,yields rose,and the curve became less inverted.The 2-year Treasury yield increased 12 basis points to 4.43%, the 5-year Treasury yield rose 27 basis points to 4.01%,and the 10-year Treasury yieldclimbed 27 basis points to 3.88%.The inversion between the 2-year Treasury yield and 10-year Treasury yield narrowed to -55 basis points at December month- end versus -71 basis points at November month-end.The spread was a positive 78 basis points one yearago.The inversion between 3-month and 10-year treasuries narrowed to -50 basis points in December from -74 basis points in November.The year 2022 saw a dramatic shift in the Federal Reserve’s policy from highly accommodative to aggressive tightening, resulting in significantly higher rates and an inverted yield curve.The shape of the yield curve indicates that the probability of recession is increasing. 3 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Source: US Department of Labor Source: US Department of Labor Employment The U.S. economy added 223,000 jobs in December, slightly higher than market expectations of 203,000, but a decline from November’s revised increase of 256,000.Trends in employment remain healthy,with the three-month moving average payrolls at 247,000 and the six-month moving average at 307,000.Jobs in the goods producing sector were surprisingly strong,and leisure and hospitality employment growth remained solid.The unemployment rate dipped to 3.5%,returning to its pre-pandemic level.The labor participation rate increased only slightly to 62.3%in December from 62.1%in November,indicating the supply of labor remains challenging for employers.The U-6 underemployment rate,which includes those who are marginally attached to the labor force and employed part time for economic reasons declined to 6.5%from the prior month at 6.7%.Average hourly earnings rose 4.6%year-over-year in December,down from a revised 4.8% increase in November.Overall,the December employment report demonstrates a strong demand for laborand supports the case for the Fed to continue raising the federal funds rate, but perhaps at a slower pace. -200 -100 0 100 200 300 400 500 600 700 800 M O M C h a n g e I n ( 0 0 0 ' s ) Nonfarm Payroll (000's) Non-farm Payroll (000's) 3 month average (000's) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Unemployment Rate Underemployment Rate (U6) Unemployment Rate (U3) Ra t e ( % ) 4 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Source: US Department of Labor Source: US Department of Commerce Inflation The Consumer Price Index (CPI)increased less than expected in November,up 7.1%year-over-year versus consensus expectations for 7.3%, and down from 7.7%in October.The Core CPI,which excludes volatile food and energy components,rose 6.0%year-over-year,down from a 6.3%increase in October.The pace of price gains for used cars and energy decelerated; however, shelter and food prices remain stubbornly high.The Personal Consumption Expenditures (PCE)index rose 5.5%year-over-year in November,versus an upwardly revised 6.1%year-over- year gain in October.Core PCE increased 4.7%year-over-year in November versus a 5.0%year-over-year gain in October.Although inflation may have peaked,levels remain well above the Fed’s target of around 2%,which is likely to keep the Federal Reserve on the path of tightening monetary policy, albeit at a less aggressive pace. 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Personal Consumption Expenditures (PCE) PCE Price Deflator YOY % Change PCE Core Deflator YOY % Change YO Y ( % ) C h a n g e 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Consumer Price Index (CPI) CPI YOY % Change Core CPI YOY % Change Y O Y ( % ) C h a n g e 5 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Advance Retail Sales declined more than expected in November at -0.6%month-over-month and +6.5%year-over-year,possibly suggesting some loss of momentum in consumerdemand forgoods amid high inflation and shifting preferences toward services.Additionally,Amazon’s Prime Day may have pulled some holiday spending activity forward into October from November.The Conference Board’s Consumer Confidence Index jumped more than expected to 108.3 in December from an upwardly revised 101.4 in November. Views of current conditions and the future outlook for the economy both improved as inflation expectations declined. Source: US Department of Commerce Source: The Conference Board 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Retail Sales YOY % Change Y O Y ( % ) C h a n g e 80 90 100 110 120 130 140 In d e x L e v e l Consumer Confidence Consumer 6 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Source: The Conference Board Source: Federal Reserve Bank of Chicago Economic Activity The Conference Board’s Leading Economic Index (LEI)remained in negative territory for the ninth consecutive month at a worse than expected -1.0%in November,following a downwardly revised -0.9%in October.The LEI was down 4.5%year-over-over in November versus down 2.9% in October.The Conference Board cited a "lack of economic growth momentum in the near term."The Chicago Fed National Activity Index (CFNAI)decreased to -0.05 in October from +0.17 in September indicating below trend growth over the month.On a 3-month moving average basis, the CFNAI moved down to +0.09 in October from an upwardly revised +0.19 in September. -0.50 -0.25 0.00 0.25 0.50 0.75 1.00 Chicago Fed National Activity Index (CFNAI) 3 M o n t h A v e r a g e -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% Leading Economic Indicators (LEI) M O M ( % ) C h a n g e 7 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Source: US Department of Commerce Source: S&P Housing 0 200 400 600 800 1000 1200 1400 1600 1800 2000 M O M C h a n g e ( I n T h o u s a n d s o f U n i t s ) Housing Starts Multi Family Housing Starts Single Family Housing Starts 0.0% 3.0% 6.0% 9.0% 12.0% 15.0% 18.0% 21.0% 24.0% S&P/Case -Shiller 20 City Composite Home Price Index YO Y ( % ) C h a n g e Total housing starts declined 0.5%in November to 1,427,000 units after an upward revision to 1,434,000 units in October.Single-family home starts fell 4.1%,whereas multi-family starts rose 4.9%month-over-month.On a year-over-year basis,total housing starts decreased 16.4% reflecting a shift from single-family units to more affordable multi-family units as homebuyers struggle with a combination of elevated prices and higher mortgage rates.The 30-year mortgage rate has edged up to 6.4%according to Freddie Mac but remains below recent highs which topped 7%.According to the Case-Shiller 20-City Home Price Index,the year-over-year increase continued its declining rate of gain to +8.6%in October from +10.4%in September,clearly displaying the impact of higher mortgage rates which have reduced demand for homebuying as affordability has declined. 8 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Source: Institute for Supply Management Source: Federal Reserve Manufacturing The Institute for Suppl y Management (ISM)manufacturing index declined to 48.4 in December from 49.0 in November.This is the second consecutive month of readings below 50.0,which isindicative of contraction in the manufacturing sector.The declining trend reflects sluggish demand amid economic uncertainty and easing price pressures in the goods sector.Industrial production was down 0.2%in November after an unrevised decline of 0.1%in October.The decrease was led by weakness in the manufacturing and mining indices.This equates to a 2.5% increase from the prioryear.Capacity utilization fell to 79.7%in November from 79.9%in October and continues to run slightly above the 1972- 2021 average of 79.6%. 40 42 44 46 48 50 52 54 56 58 60 62 64 66 Institute of Supply Management Purchasing Manager Index EXPANDING CONTRACTING -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% Industrial Production YO Y ( % ) C h a n g e 9 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Source: US Department of Commerce Source: US Department of Commerce 12/21 3/22 6/22 9/22 2.1% 0.9% 1.4% 1.5% 5.1% 1.0% -2.8% -1.8% -0.2% -3.1% 1.2% 2.9% 0.0% -0.4% -0.2% 0.2% -0.2% 0.0% -0.1% 0.4% 7.0% -1.6% -0.6% 3.2% Net Exports and Imports Total Gross Private Domestic Investment Personal Consumption Expenditures Components of GDP Federal Government Expenditures State and Local (Consumption and Gross Investment)-35.0%-30.0%-25.0%-20.0%-15.0%-10.0%-5.0%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0% Gross Domestic Product (GDP) GDP QOQ % Change GDP YOY % Change Gross Domestic Product (GDP) According to the third estimate,GDP increased at an annualized rate of 3.2%in the third quarter,revised up from 2.9%.The upward revision reflects stronger personal consumption expenditures which rose 2.3%in the third quarter,up from 1.7%in the previous estimate,primarily due to continued strength in services spending. Business investment, state and local government spending,and net exports also contributed to the upward revision. The consensus estimate calls for 1.1% growth in the fourth quarter and 1.9% growth for the full year 2022. 10 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Federal Reserve Source: Federal Reserve Source: Bloomberg As expected at the December 14th meeting,the Federal Open Market Committee (FOMC)raised the fed funds target rate by 50 basis points to a range of 4.25 –4.50%,in a downshift from four consecutive 75 basis point hikes.The decision was unanimous,and there was no change to the November statement.The sentiment was hawkish, indicating that “ongoing increases”in the fed funds rate are likely appropriate and citing continued labor market imbalances.The Summary of EconomicProjections indicated a peak median forecast of 5.1%in 2023 and no rate cuts until 2024;however,the market consensus diverged,implying rate cuts in the second half of 2023.FOMC members forecasted a higher fed funds rate,slower GDP growth,higher inflation,and higher unemployment in 2023 than in the September projections.We believe the FOMC will continue to implement tighter monetary policy at a slower pace and hold rates at restrictive levels for some time until inflationary pressures subside and remain in the Fed’s target range. 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% Effective Federal Funds Rate Yi e l d ( % ) 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 Federal Reserve Balance Sheet Assets In $ m i l l i o n s 11 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Source: Bloomberg Source: Bloomberg 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% US Treasury Note Yields 2-Year 5-Year 10-Year Y i e l d ( % ) 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% US Treasury Yield Curve Dec-22 Sep-22 Dec-21 Y i e l d ( % ) Bond Yields At the end of December,the 2-year Treasury yield was 370 basis points higher,and the 10-Year Treasury yield was about 237 basis points higher,year-over-year.The inversion between the 2-year Treasury yield and 10-year Treasury yield narrowed to -55 basis points at December month-end versus -71 basis points at November month-end.The average historical spread (since 2003)is about +130 basis points.The inversion between 3-month and 10-year treasuries narrowed to -50 basis points in December from -74 basis points in November.The shape of the yield curve indicates that the probability of recession is increasing. 12 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Section 2|SECTION |Section 2 |Account Profile 13 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Objectives Chandler Asset Management Performance Objective The performance objective for the accounts is to achieve a rate of return over a market cycle that equals or exceeds the return on a market index of similar duration and sector allocation. Investment Objectives The investment objectives of the City of Tustin are first,to provide safety of principal to ensure the preservation of capital in the overall portfolio;second,to provide adequate liquidity to meet all requirements which might be reasonably anticipated;and third,to earn a commensurate rate of return. Strategy In order to achieve these objectives,the portfolio invests in high quality fixed income securities consistent with the investment policy and California Government Code. As of December 31, 2022 14 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Compliance As of December 31, 2022 Category Standard Comment U.S. Treasuries No limitations; U.S. government obligations issued by the U.S. Treasury and backed by the full faith and credit of the Federal government Complies Federal Agencies 50% max per issuer; Federal agencies or U.S. government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or U.S. government-sponsored enterprises Complies Supranational Obligations "AA" rated or better by a NRSRO; 5% max; 5% max per issuer; USD denominated senior unsecured unsubordinated obligations; Issued or unconditionally guaranteed by one of the three supranational banking groups: IBRD, IFC, and IADB; Supranational securities will not be purchased until further notice from staff at the City of Tustin. Complies Municipal Securities (CA, Local Agency) 30% max; 5% max per issuer; Bonds issued by the local agency (City of Tustin bonds); State of California and any local agency within the State of California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a local agency, or by a department, board, agency, or authority of the local agency Complies Municipal Securities (CA, Other States) 30% max; 5% max per issuer; Bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state, or by a department, board, agency, or authority of any of the other 49 states, in addition to California Complies Corporate Medium Term Notes "A" rating or better by a NRSRO; 30% max; 5% max per issuer; 10% max of any single issuer (combined issuer limitation of a local agency's investments in commercial paper and medium-term notes); Obligations of a domestic corporation or depository institution; If the credit rating of a security is downgraded below the minimum rating level for a new investment of that security, the Treasurer shall evaluate the downgrade on a case-by-case basis to determine if the security should be held or sold. Complies Mortgage Pass-Through Securities "AA" rated or better by a NRSRO; 20% max; 10% max per issuer Complies Negotiable Certificates of Deposit (NCD) Any amount above FDIC insured limit must be issued by institutions with "A-1" short-term debt rating or higher by a NRSRO; or "A" long-term rating category or higher by a NRSRO; 30% max; 5% max per issuer; Certificates of deposit issued by a nationally or state-chartered bank, or a federal association, a state or Federal credit union, or by a federally- licensed or state-licensed branch of a foreign bank. Complies Certificate of Deposit Placement Service (CDARS)30% max; FDIC insured; The City may utilize these at the discretion of the Treasurer Complies Collateralized Bank Deposits/ Time or Certificates of Deposit 30% max per issuer; All active (checking/savings accounts) and inactive (time or certificates of deposit) above FDIC insured limits must be collateralized pursuant to Government Code Complies Bankers' Acceptances "A" rating or better by Moody's or equivalent rating by a NRSRO; 30% max; 5% max per issuer; 180 days maturity; Short- term debt instruments issued by a company that is guaranteed by a commercial bank Complies City of Tustin Consolidated This portfolio is a consolidation of assets managed by Chandler Asset Management and assets managed internally by Client. Chandler relies on Client to provide accurate information for reporting assets and producing this compliance statement. 15 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Compliance As of December 31, 2022 Category Standard Comment Commercial Paper A-1/P-1 rating or equivalent by a NRSRO, plus A long term rating by a NRSRO; 30% max, 5% max per issuer; 10% max of any single issuer (combined issuer limitation of a local agency's investments in commercial paper and medium-term notes); 10% max outstanding from a single issuer; 270 days max maturity; '"Prime" quality commercial paper with the highest rating by a NRSRO; The entity that issues the commercial paper shall meet all conditions in either (A) or (B): (A) 1. Organized and operating in the U.S. as a general corporation; 2. Has total assets >$500 million; 3. Has debt other than commercial paper, if any, that is "A" rating category or higher by a NRSRO; (B) 1. Organized within the U.S. as a special purpose corporation, trust, or LLC; 2. Has program wide credit enhancements including, but not limited to, overcollateralization, letters of credit or surety bond; and 3. "A-1" rated or higher by a NRSRO Complies Money Market Mutual Funds AAA or highest ranking of two of the three highest ranking NRSRO; Retained an investment adviser registered with SEC with > 5 years experience investing assets of at least $500 million; Must invest solely in investments, which the City itself could legally purchase; 20% max; 10% max per Money Market Mutual Fund Complies Local Agency Investment Fund (LAIF)Max amount limited to the amount as specified by LAIF; Principal amount withdrawal of $10 million or > needs 24-hour notice, and less than $10 million may be withdrawn the same day; Not used by investment adviser Complies Local Government Investment Pool (LGIP)/ Orange County Investment Pool (OCIP) Investment in OCIP is allowable according to guidelines in Government Code; Max amount permitted by County Treasurer; Not used by investment adviser Complies Joint Powers Authority (JPA) Investment Pools 50% max per issuer; Shares of beneficial interest issued by a joint powers' authority organized pursuant to Section 6509.7 that invests in securities and obligations authorized in subdivisions (a) to (q), inclusive per policy Complies Repurchase Agreements 30% max; 5% max per issuer; 1 year max maturity; 102% Collateralized; Not used by investment adviser Complies Prohibited Inverse floaters, range notes, mortgage derived interest-only strips; zero interest accrual if held to maturity; Purchasing or selling securities on margin, credit, or for other than full cash payment, and shall not be pledged as collateral; Reverse Repurchase Agreements; Supranational securities will not be purchased until further notice from staff at the City of Tustin. Complies Weighted Average Maturity 36 months max Complies Maximum Maturity 5 years, unless authorized by City Council Complies City of Tustin Consolidated This portfolio is a consolidation of assets managed by Chandler Asset Management and assets managed internally by Client. Chandler relies on Client to provide accurate information for reporting assets and producing this compliance statement. The City of Tustin maintains adequate liquidity to cover at least six months of expected disbursements. 16 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Portfolio Characteristics City of Tustin Consolidated Account 12/31/22 09/30/22 Benchmark*Portfolio Portfolio Average Maturity (yrs)2.61 0.66 0.74 Average Modified Duration 2.48 0.61 0.71 Average Purchase Yield n/a 2.86%1.80% Average Market Yield 4.35%3.65%2.79% Average Quality**AAA AA+/Aa2 AA+/Aa1 Total Market Value 203,244,523 193,343,478 *ICE BofA 1-5 Yr US Treasury & Agency Index **Benchmark is a blended rating of S&P, Moody’s, and Fitch. Portfolio is S&P and Moody’s respectively. As of December 31, 2022 17 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 City of Tustin Consolidated Account Sector Distribution December 31, 2022 Agency 4.5% Cash 3.7% CMO 0.5% Corporate 14.2% LAIF 32.8% Local Gov Investment Pool 31.8% Money Market Fund 0.1% Negotiable CD 0.9% US Treasury 11.4% September 30, 2022 Agency 4.7%Cash 3.8% CMO 0.5% Corporate 14.9% LAIF 35.8% Local Gov Investment Pool 8.7% Money Market Fund 3.1% Negotiable CD 2.9% US Treasury 22.4% Commercial Paper 3.1% Municipal Bonds 0.1% $9,138,069.32 $7,544,324.69 $978,521.60 $28,950,120.79 $9,112,789.26 $7,330,712.64 $982,410.50 $28,708,664.97 $66,763,462.36 $64,685,943.61 $152,180.50 $1,899,130.71 $23,132,769.78 $69,172,664.05 $16,836,652.43 $6,055,830.76 $5,557,306.60 $43,346,130.78 $5,987,202.23 $253,113.75 As of December 31, 2022 18 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Portfolio Allocation City of Tustin Consolidated Account As of December 31, 2022 0.1% 3.1% 3.1% 0.5% 2.9% 3.8% 4.7% 22.4% 14.9% 8.7% 35.8% 0.0% 0.0% 0.1% 0.5% 0.9% 3.7% 4.5% 11.4% 14.2% 31.8% 32.9% Municipal Bonds Commercial Paper Money Market Fund CMO Negotiable CD Cash Agency US Treasury Corporate Local Gov Investment Pool LAIF 12/31/22 09/30/22 19 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Issue Name Investment Type % Portfolio Local Agency Investment Fund LAIF 32.85% CAMP Local Gov Investment Pool 31.83% Government of United States US Treasury 11.38% Bank Cash Account Cash 3.71% Federal Home Loan Bank Agency 3.11% JP Morgan Chase & Co Corporate 0.92% Federal National Mortgage Association Agency 0.90% US Bancorp Corporate 0.64% Toyota Motor Corp Corporate 0.49% Federal Farm Credit Bank Agency 0.49% Morgan Stanley Corporate 0.48% Federal Home Loan Mortgage Corp CMO 0.48% Qualcomm Inc Corporate 0.48% Duke Energy Field Services Corporate 0.48% Mass Mutual Insurance Corporate 0.48% Paccar Financial Corporate 0.48% Home Depot Corporate 0.47% Chubb Corporation Corporate 0.47% Target Corp Corporate 0.47% National Rural Utilities Corporate 0.47% Deere & Company Corporate 0.46% Salesforce.com Inc Corporate 0.46% New York Life Global Funding Corporate 0.46% State Street Bank Corporate 0.46% Bank of Montreal Chicago Corporate 0.46% Bank of America Corp Corporate 0.46% Bank of New York Corporate 0.46% Metlife Inc Corporate 0.46% Pfizer Inc.Corporate 0.45% Caterpillar Inc Corporate 0.44% United Health Group Inc Corporate 0.44% Toronto Dominion Holdings Corporate 0.44% Charles Schwab Corp/The Corporate 0.44% Amazon.com Inc Corporate 0.44% Royal Bank of Canada Corporate 0.44% Wal-Mart Stores Corporate 0.39% Northwestern Mutual Glbl Corporate 0.34% MasterCard Inc Corporate 0.23% Issuers City of Tustin Consolidated Account –Account #10795 As of December 31, 2022 20 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Issue Name Investment Type % Portfolio Colgate-Palmolive Co.Corporate 0.17% UBS Corp Negotiable CD 0.12% Sallie Mae Bank Negotiable CD 0.12% Delaware State Police FCU Negotiable CD 0.12% Capital One Negotiable CD 0.12% Ally Bank Negotiable CD 0.12% Synchrony Financial Negotiable CD 0.12% Discover Financial Services Negotiable CD 0.12% Goldman Sachs Inc.Negotiable CD 0.11% First American Govt Oblig Fund Money Market Fund 0.07% TOTAL 100.00% Issuers City of Tustin Consolidated Account –Account #10795 As of December 31, 2022 21 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 City of Tustin Consolidated Account Maturity Distribution As of December 31, 2022 22 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 AAA AA A <A NR 12/31/22 31.9%18.6%11.5%0.0%38.0% 09/30/22 15.2%31.1%12.0%0.0%41.7% Source: S&P Ratings December 31, 2022 vs. September 30, 2022 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% AAA AA A <A NR December 31, 2022 September 30, 2022 Quality Distribution City of Tustin Consolidated Account As of December 31, 2022 23 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 0 - 0.25 0.25 - 0.50 0.50 - 1 1 - 2 2 - 3 3 - 4 4 - 5 5+ December 31, 2022 September 30, 2022 December 31, 2022 vs. September 30, 2022 0 -0.25 0.25 -0.50 0.50 - 1 1 - 2 2 - 3 3 - 4 4 - 5 5+ 12/31/22 69.6%0.9%4.0%10.1%10.2%4.5%0.9%0.0% 09/30/22 67.9%1.1%2.7%8.6%12.5%7.0%0.0%0.0% City of Tustin Consolidated Account Duration Distribution As of December 31, 2022 24 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Total Rate of Return Annualized Since Inception November 30, 2020 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 market value; it includes interest earnings, realized and unrealized gains and losses in the portfolio. Realized rate of return: A measure of a portfolio’s return over time. It is the internal rate which equates the beginning book value of the portfolio with the ending book value; it includes interest earnings, realized gains and losses in the portfolio. Investment Performance City of Tustin Consolidated Account -6.00% -5.00% -4.00% -3.00% -2.00% -1.00% 0.00% 12 months 2 years 3 years 5 years 10 years Since Inception City of Tustin Consolidated Account ICE BofA 1-5 Yr US Treasury & Agency Index ICE BofA 1-3 Yr US Treasury & Agency Index Annualized TOTAL RATE OF RETURN 3 months 12 months 2 years 3 years 5 years 10 years Since Inception City of Tustin Consolidated Account 0.22%-1.00%-0.42%N/A N/A N/A -0.38% ICE BofA 1-5 Yr US Treasury & Agency Index 0.94%-5.25%-3.19%N/A N/A N/A -3.03% ICE BofA 1-3 Yr US Treasury & Agency Index 0.73%-3.65%-2.11% N/A N/A N/A -2.01% REALIZED RATE OF RETURN 3 months 12 months 2 years 3 years 5 years 10 years Since Inception City of Tustin Consolidated Account 0.55%1.38%1.08%N/A N/A N/A 1.08% As of December 31, 2022 25 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 SECTION |Section 4 |Portfolio Holdings 26 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Holdings Report City of Tustin Consolidated Account -Account #10795 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration Agency 3130ATBL0 FHLB Note 3.625% Due 12/08/2023 2,250,000.00 09/08/2022 3.70% 2,248,110.00 2,248,583.54 98.70 5.06% 2,220,722.71 5,210.94 1.10% (27,860.83) Aaa / AA+ NR 0.94 0.90 3130ARHG9 FHLB Note 2.125% Due 02/28/2024 1,250,000.00 03/24/2022 2.19% 1,248,575.00 1,249,145.00 96.71 5.08% 1,208,865.89 9,075.52 0.60% (40,279.11) Aaa / AA+ NR 1.16 1.12 3133ENL40 FFCB Note 3.500% Due 09/13/2024 1,000,000.00 09/08/2022 3.63% 997,520.00 997,893.19 98.20 4.61% 982,020.62 10,500.00 0.49% (15,872.57) Aaa / AA+ AAA 1.70 1.61 3133XVDG3 FHLB Note 4.375% Due 09/13/2024 1,000,000.00 09/26/2022 4.48% 998,060.00 998,319.75 99.59 4.62% 995,907.67 13,125.00 0.50% (2,412.08) Aaa / AA+ NR 1.70 1.60 3130APQ81 FHLB Callable Note Mnthly 12/8/2021 1.000% Due 11/08/2024 1,000,000.00 08/01/2022 3.11% 954,220.00 962,613.92 93.50 4.71% 934,960.31 1,472.22 0.46% (27,653.61) Aaa / AA+ NR 1.86 1.80 3130AQF40 FHLB Note 1.000% Due 12/20/2024 1,000,000.00 08/01/2022 2.95% 955,420.00 963,199.75 93.42 4.53% 934,211.29 305.56 0.46% (28,988.46) Aaa / AA+ AAA 1.97 1.91 3135G04Z3 FNMA Note 0.500% Due 06/17/2025 2,000,000.00 04/12/2021 0.71% 1,982,980.00 1,989,984.30 91.07 4.37% 1,821,302.70 388.89 0.90% (168,681.60) Aaa / AA+ AAA 2.46 2.40 TOTAL Agency 9,500,000.00 2.80% 9,384,885.00 9,409,739.45 4.74% 9,097,991.19 40,078.13 4.50% (311,748.26) Aaa / AA+ AAA 1.64 1.58 Cash 90BOFA$00 Cash BOA Cash Acct 371,559.09 Various 0.25% 371,559.09 371,559.09 1.00 0.25% 371,559.09 0.00 0.18% 0.00 NR / NR NR 0.00 0.00 CBGMMF$03 Citizens Bank Citizens Bank Cash Account 6,082,173.74 Various 0.00% 6,082,173.74 6,082,173.74 1.00 0.00% 6,082,173.74 0.00 2.99% 0.00 NR / NR NR 0.00 0.00 CBGMMF$04 Citizens Bank Citizens Bank Cash Account 1,090,591.86 12/31/2022 0.00% 1,090,591.86 1,090,591.86 1.00 0.00% 1,090,591.86 0.00 0.54% 0.00 NR / NR NR 0.00 0.00 TOTAL Cash 7,544,324.69 0.01% 7,544,324.69 7,544,324.69 0.01% 7,544,324.69 0.00 3.71% 0.00 NR / NR NR 0.00 0.00 CMO 3137BDCW4 FHLMC K039 A2 3.303% Due 07/25/2024 1,000,000.00 04/19/2022 2.75% 1,007,968.75 1,005,435.05 97.58 5.00% 975,769.10 2,752.50 0.48% (29,665.95) NR / NR AAA 1.57 1.33 TOTAL CMO 1,000,000.00 2.75% 1,007,968.75 1,005,435.05 5.00% 975,769.10 2,752.50 0.48% (29,665.95) NR / NR AAA 1.57 1.33 As of December 31, 2022 27 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Holdings Report City of Tustin Consolidated Account -Account #10795 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration Corporate 89236TFN0 Toyota Motor Credit Corp Note 3.450% Due 09/20/2023 1,000,000.00 02/28/2019 3.00% 1,019,000.00 1,002,989.79 98.87 5.06% 988,740.00 9,679.17 0.49% (14,249.79) A1 / A+ A+ 0.72 0.69 79466LAG9 Salesforce.com Inc Callable Note Cont 7/15/2022 0.625% Due 07/15/2024 1,000,000.00 04/25/2022 2.88% 951,860.00 966,658.59 93.84 4.83% 938,408.96 2,881.94 0.46% (28,249.63) A2 / A+ NR 1.54 1.49 59217GEP0 Metlife Note 0.700% Due 09/27/2024 1,000,000.00 01/18/2022 1.49% 979,170.00 986,516.77 92.47 5.29% 924,673.01 1,827.78 0.46% (61,843.76) Aa3 / AA- AA- 1.74 1.68 24422EVY2 John Deere Capital Corp Note 1.250% Due 01/10/2025 1,000,000.00 02/04/2022 1.78% 985,080.00 989,652.48 93.62 4.59% 936,158.89 5,937.50 0.46% (53,493.59) A2 / A A 2.03 1.95 57629WCG3 Mass Mutual Global funding Note 2.950% Due 01/11/2025 1,000,000.00 03/23/2022 2.79% 1,004,360.00 1,003,158.12 96.17 4.96% 961,733.33 13,930.56 0.48% (41,424.79) Aa3 / AA+ AA+ 2.03 1.91 64952WEK5 New York Life Global Note 1.450% Due 01/14/2025 1,000,000.00 01/18/2022 1.56% 996,780.00 997,802.13 93.22 4.99% 932,198.50 6,726.39 0.46% (65,603.63) Aaa / AA+ AAA 2.04 1.95 63743HFC1 National Rural Utilities Note 1.875% Due 02/07/2025 1,000,000.00 03/23/2022 2.87% 972,740.00 980,061.26 93.84 5.00% 938,368.80 7,500.00 0.47% (41,692.46) A2 / A- A 2.11 2.00 57636QAN4 MasterCard Inc Callable Note 1x 02/03/2025 2.000% Due 03/03/2025 500,000.00 11/01/2021 1.06% 515,365.00 510,007.47 94.52 4.68% 472,607.74 3,277.78 0.23% (37,399.73) Aa3 / A+ NR 2.17 2.07 69371RR73 Paccar Financial Corp Note 2.850% Due 04/07/2025 1,000,000.00 03/31/2022 2.86% 999,740.00 999,803.81 95.96 4.75% 959,582.88 6,650.00 0.48% (40,220.93) A1 / A+ NR 2.27 2.14 87612EBL9 Target Corp Callable Note Cont 4/15/25 2.250% Due 04/15/2025 1,000,000.00 02/04/2022 1.91% 1,010,340.00 1,007,430.21 94.88 4.63% 948,849.87 4,750.00 0.47% (58,580.34) A2 / A A 2.29 2.18 437076CM2 Home Depot Callable Note Cont 3/15/2025 2.700% Due 04/15/2025 1,000,000.00 03/28/2022 2.85% 995,620.00 996,711.06 95.87 4.62% 958,655.69 5,700.00 0.47% (38,055.37) A2 / A A 2.29 2.17 61747YEQ4 Morgan Stanley Callable Note S/A 4/17/2024 3.620% Due 04/17/2025 1,000,000.00 06/01/2022 4.24% 1,000,910.00 1,000,726.09 97.61 5.34% 976,141.97 7,441.11 0.48% (24,584.12) A1 / A- A+ 2.30 2.14 06406RAN7 Bank of NY Mellon Corp Callable Note Cont 3/24/2025 1.600% Due 04/24/2025 1,000,000.00 02/04/2022 1.95% 989,120.00 992,158.22 92.98 4.84% 929,805.10 2,977.78 0.46% (62,353.12) A1 / A AA- 2.32 2.22 06367WB85 Bank of Montreal Note 1.850% Due 05/01/2025 1,000,000.00 08/17/2021 0.90% 1,034,530.00 1,021,750.58 93.33 4.91% 933,327.67 3,083.33 0.46% (88,422.91) A2 / A- AA- 2.33 2.23 91159HHZ6 US Bancorp Callable Note Cont 4/11/2025 1.450% Due 05/12/2025 1,400,000.00 12/23/2021 1.30% 1,406,818.00 1,404,774.26 92.79 4.71% 1,299,002.66 2,763.06 0.64% (105,771.60) A2 / A+ A+ 2.36 2.27 747525AF0 Qualcomm Inc Callable Note Cont 2/20/2025 3.450% Due 05/20/2025 1,000,000.00 03/23/2022 2.82% 1,018,960.00 1,014,318.75 97.42 4.60% 974,156.67 3,929.17 0.48% (40,162.08) A2 / A NR 2.39 2.25 717081EX7 Pfizer Inc. Callable Note Cont 4/28/2025 0.800% Due 05/28/2025 1,000,000.00 03/23/2022 2.62% 945,010.00 958,378.26 91.42 4.60% 914,224.67 733.33 0.45% (44,153.59) A1 / A+ A 2.41 2.33 As of December 31, 2022 28 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Holdings Report City of Tustin Consolidated Account -Account #10795 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 66815L2J7 Northwestern Mutual Glbl Note 4.000% Due 07/01/2025 700,000.00 06/30/2022 3.81% 703,738.00 703,121.85 98.11 4.81% 686,775.38 14,000.00 0.34% (16,346.47) Aaa / AA+ AAA 2.50 2.30 26442UAA2 Duke Energy Progress LLC Callable Note Cont 5/15/25 3.250% Due 08/15/2025 1,000,000.00 04/25/2022 3.24% 1,000,280.00 1,000,222.19 96.43 4.71% 964,335.71 12,277.78 0.48% (35,886.48) Aa3 / A NR 2.62 2.44 194162AM5 Colgate Palmolive Co. Note 3.100% Due 08/15/2025 345,000.00 08/01/2022 3.13% 344,682.60 344,724.36 96.96 4.34% 334,500.04 4,218.58 0.17% (10,224.32) Aa3 / AA- NR 2.62 2.45 89114QCK2 Toronto Dominion Bank Note 0.750% Due 09/11/2025 1,000,000.00 08/17/2021 0.93% 993,000.00 995,358.49 89.34 5.03% 893,401.04 2,291.67 0.44% (101,957.45) A1 / A AA- 2.70 2.60 14913R2H9 Caterpillar Financial Service Note 0.800% Due 11/13/2025 1,000,000.00 04/21/2021 0.98% 991,780.00 994,831.03 89.78 4.65% 897,809.75 1,066.67 0.44% (97,021.28) A2 / A A 2.87 2.77 857477BR3 State Street Bank Callable Note Cont 2/6/2025 1.746% Due 02/06/2026 1,000,000.00 Various 3.43% 978,258.70 982,594.66 93.13 5.24% 931,262.91 7,032.50 0.46% (51,331.75) A1 / A AA- 3.10 2.00 06051GHY8 Bank of America Corp Callable Note Cont 2/13/2025 2.015% Due 02/13/2026 1,000,000.00 04/20/2021 2.04% 1,030,470.00 1,019,741.37 92.76 5.63% 927,586.20 7,724.17 0.46% (92,155.17) A2 / A- AA- 3.12 2.92 46647PBK1 JP Morgan Chase & Co Callable Note Cont 4/22/2025 2.083% Due 04/22/2026 2,000,000.00 Various 2.12% 2,072,110.00 2,050,521.59 92.78 5.44% 1,855,658.04 7,984.84 0.92% (194,863.55) A1 / A- AA- 3.31 2.20 00440EAV9 Chubb INA Holdings Inc Callable Note Cont 2/3/2026 3.350% Due 05/03/2026 1,000,000.00 07/23/2021 1.13% 1,102,780.00 1,071,904.68 95.76 4.73% 957,593.41 5,397.22 0.47% (114,311.27) A3 / A A 3.34 3.09 023135BX3 Amazon.com Inc Callable Note Cont 4/12/2026 1.000% Due 05/12/2026 1,000,000.00 05/12/2021 1.10% 995,200.00 996,771.05 88.68 4.68% 886,772.02 1,361.11 0.44% (109,999.03) A1 / AA AA- 3.36 3.23 808513BR5 Charles Schwab Corp Callable Note Cont 4/13/2026 1.150% Due 05/13/2026 1,000,000.00 07/23/2021 0.98% 1,007,990.00 1,005,603.50 88.96 4.73% 889,627.03 1,533.33 0.44% (115,976.47) A2 / A A 3.37 3.23 91324PEC2 United Health Group Inc Callable Note Cont 4/15/2026 1.150% Due 05/15/2026 1,000,000.00 07/28/2021 1.00% 1,007,110.00 1,004,997.31 89.43 4.57% 894,331.93 1,469.44 0.44% (110,665.38) A3 / A+ A 3.37 3.23 78016EZT7 Royal Bank of Canada Note 1.150% Due 07/14/2026 1,000,000.00 07/28/2021 1.17% 999,090.00 999,351.44 88.16 4.83% 881,629.99 5,334.72 0.44% (117,721.45) A1 / A AA- 3.54 3.37 As of December 31, 2022 29 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Holdings Report City of Tustin Consolidated Account -Account #10795 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 931142ER0 Wal-Mart Stores Callable Note Cont 08/17/2026 1.050% Due 09/17/2026 900,000.00 09/22/2021 1.00% 902,277.00 901,696.17 88.67 4.39% 797,990.00 2,730.00 0.39% (103,706.17) Aa2 / AA AA 3.72 3.55 TOTAL Corporate 30,845,000.00 2.06% 30,954,169.30 30,904,337.54 4.88% 28,785,909.86 164,210.93 14.24% (2,118,427.68) A1 / A+ AA- 2.56 2.34 LAIF 90LAIF$00 Local Agency Investment Fund State Pool 66,430,545.87 Various 2.23% 66,430,545.87 66,430,545.87 1.00 2.23% 66,430,545.87 332,916.49 32.85% 0.00 NR / NR NR 0.00 0.00 TOTAL LAIF 66,430,545.87 2.23% 66,430,545.87 66,430,545.87 2.23% 66,430,545.87 332,916.49 32.85% 0.00 NR / NR NR 0.00 0.00 Local Gov Investment Pool 90CAMP$00 California Asset Mgmt Program CAMP 64,685,943.61 Various 4.50% 64,685,943.61 64,685,943.61 1.00 4.50% 64,685,943.61 0.00 31.83% 0.00 NR / AAA NR 0.00 0.00 TOTAL Local Gov Investment Pool 64,685,943.61 4.50% 64,685,943.61 64,685,943.61 4.50% 64,685,943.61 0.00 31.83% 0.00 NR / AAA NR 0.00 0.00 Money Market Fund 31846V203 First American Govt Obligation Fund Class Y 4,158.85 Various 3.79% 4,158.85 4,158.85 1.00 3.79% 4,158.85 0.00 0.00% 0.00 Aaa / AAA AAA 0.00 0.00 31846V203 First American Govt Obligation Fund Class Y 148,021.65 Various 3.79% 148,021.65 148,021.65 1.00 3.79% 148,021.65 0.00 0.07% 0.00 Aaa / AAA AAA 0.00 0.00 TOTAL Money Market Fund 152,180.50 3.79% 152,180.50 152,180.50 3.79% 152,180.50 0.00 0.07% 0.00 Aaa / AAA AAA 0.00 0.00 Negotiable CD 795450M93 Sallie Mae Bank Negotiable CD 3.000% Due 04/18/2023 245,000.00 04/18/2018 3.00% 245,000.00 245,000.00 99.65 4.16% 244,149.36 1,510.27 0.12% (850.64) NR / NR NR 0.30 0.29 90348JCW8 UBS Bank USA Negotiable CD 3.250% Due 06/13/2023 248,000.00 06/13/2018 3.25% 248,000.00 248,000.00 99.55 4.26% 246,891.94 419.56 0.12% (1,108.06) NR / NR NR 0.45 0.44 246399AB5 Delaware State Police FCU Negotiable CD 3.000% Due 03/29/2024 246,000.00 03/29/2019 3.00% 246,000.00 246,000.00 98.05 4.63% 241,191.93 1,900.60 0.12% (4,808.07) NR / NR NR 1.24 1.20 14042TJB4 Capital One Bank USA NA Negotiable CD 3.450% Due 08/04/2025 240,000.00 08/01/2022 3.50% 239,640.00 239,689.55 97.24 4.59% 233,386.08 3,425.42 0.12% (6,303.47) NR / NR NR 2.59 2.41 As of December 31, 2022 30 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Holdings Report City of Tustin Consolidated Account -Account #10795 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 02007GXF5 Ally Bank Negotiable CD 3.400% Due 08/04/2025 240,000.00 08/02/2022 3.51% 239,280.00 239,378.54 97.12 4.59% 233,094.96 3,353.42 0.12% (6,283.58) NR / NR NR 2.59 2.42 87165EXE2 Synchrony Bank Negotiable CD 3.400% Due 08/05/2025 240,000.00 08/01/2022 3.45% 239,640.00 239,688.94 97.12 4.59% 233,088.24 3,331.07 0.12% (6,600.70) NR / NR NR 2.60 2.42 254673P26 Discover Bank Negotiable CD 3.400% Due 08/08/2025 240,000.00 08/01/2022 3.51% 239,280.00 239,375.91 97.11 4.59% 233,068.08 3,264.00 0.12% (6,307.83) NR / NR NR 2.61 2.43 38149MYS6 Goldman Sachs Bank USA Negotiable CD 1.050% Due 08/25/2026 245,000.00 08/17/2021 1.15% 243,775.00 244,106.41 88.22 4.59% 216,146.60 909.18 0.11% (27,959.81) NR / NR NR 3.65 3.50 TOTAL Negotiable CD 1,944,000.00 3.04% 1,940,615.00 1,941,239.35 4.49% 1,881,017.19 18,113.52 0.93% (60,222.16) NR / NR NR 1.97 1.85 US Treasury 91282CBG5 US Treasury Note 0.125% Due 01/31/2023 1,000,000.00 03/23/2022 1.41% 989,101.56 998,955.42 99.70 3.71% 996,986.00 523.10 0.49% (1,969.42) Aaa / AA+ AAA 0.08 0.08 91282CBN0 US Treasury Note 0.125% Due 02/28/2023 1,250,000.00 03/23/2022 1.48% 1,234,375.00 1,247,342.38 99.33 4.24% 1,241,661.25 530.90 0.61% (5,681.13) Aaa / AA+ AAA 0.16 0.16 912828R69 US Treasury Note 1.625% Due 05/31/2023 1,250,000.00 03/23/2022 1.70% 1,248,828.13 1,249,594.04 98.82 4.51% 1,235,302.50 1,785.71 0.61% (14,291.54) Aaa / AA+ AAA 0.41 0.41 912828S92 US Treasury Note 1.250% Due 07/31/2023 1,250,000.00 03/23/2022 1.87% 1,239,697.27 1,245,599.44 98.03 4.70% 1,225,390.00 6,538.72 0.61% (20,209.44) Aaa / AA+ AAA 0.58 0.57 9128282D1 US Treasury Note 1.375% Due 08/31/2023 1,300,000.00 05/18/2022 2.40% 1,283,191.41 1,291,326.91 97.76 4.84% 1,270,902.10 6,073.55 0.63% (20,424.81) Aaa / AA+ AAA 0.67 0.64 912828T91 US Treasury Note 1.625% Due 10/31/2023 1,200,000.00 04/25/2022 2.34% 1,187,296.88 1,193,039.70 97.52 4.70% 1,170,234.00 3,339.78 0.58% (22,805.70) Aaa / AA+ AAA 0.83 0.81 912828U57 US Treasury Note 2.125% Due 11/30/2023 1,250,000.00 03/23/2022 2.06% 1,251,416.02 1,250,765.48 97.66 4.76% 1,220,801.25 2,335.16 0.60% (29,964.23) Aaa / AA+ AAA 0.92 0.89 912828V80 US Treasury Note 2.250% Due 01/31/2024 1,250,000.00 03/23/2022 2.12% 1,252,832.03 1,251,649.93 97.38 4.75% 1,217,285.00 11,769.70 0.60% (34,364.93) Aaa / AA+ AAA 1.08 1.04 912828X70 US Treasury Note 2.000% Due 04/30/2024 1,250,000.00 03/23/2022 2.19% 1,245,019.53 1,246,854.78 96.52 4.73% 1,206,445.00 4,281.77 0.60% (40,409.78) Aaa / AA+ AAA 1.33 1.29 912828WJ5 US Treasury Note 2.500% Due 05/15/2024 1,000,000.00 04/25/2022 2.57% 998,593.75 999,062.50 97.10 4.71% 970,977.00 3,245.86 0.48% (28,085.50) Aaa / AA+ AAA 1.37 1.32 91282CCL3 US Treasury Note 0.375% Due 07/15/2024 1,250,000.00 03/23/2022 2.24% 1,197,802.73 1,215,304.90 93.71 4.65% 1,171,435.00 2,165.42 0.58% (43,869.90) Aaa / AA+ AAA 1.54 1.50 9128282U3 US Treasury Note 1.875% Due 08/31/2024 1,250,000.00 03/23/2022 2.28% 1,238,085.94 1,241,870.09 95.70 4.59% 1,196,240.00 7,963.57 0.59% (45,630.09) Aaa / AA+ AAA 1.67 1.60 As of December 31, 2022 31 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Holdings Report City of Tustin Consolidated Account -Account #10795 CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost Value Book Value Mkt Price Mkt YTM Market Value Accrued Int. % of Port. Gain/Loss Moody/S&P Fitch Maturity Duration 912828YM6 US Treasury Note 1.500% Due 10/31/2024 1,250,000.00 03/23/2022 2.30% 1,224,902.34 1,232,363.09 94.80 4.49% 1,184,961.25 3,211.33 0.58% (47,401.84) Aaa / AA+ AAA 1.84 1.77 912828YV6 US Treasury Note 1.500% Due 11/30/2024 1,250,000.00 03/23/2022 2.32% 1,223,486.33 1,231,127.23 94.68 4.43% 1,183,496.25 1,648.35 0.58% (47,630.98) Aaa / AA+ AAA 1.92 1.85 912828YY0 US Treasury Note 1.750% Due 12/31/2024 1,300,000.00 05/18/2022 2.88% 1,263,335.94 1,272,032.64 94.98 4.40% 1,234,695.80 62.85 0.61% (37,336.84) Aaa / AA+ AAA 2.00 1.93 91282CBH3 US Treasury Note 0.375% Due 01/31/2026 2,000,000.00 04/27/2021 0.83% 1,957,500.00 1,972,481.31 89.06 4.19% 1,781,172.00 3,138.59 0.88% (191,309.31) Aaa / AA+ AAA 3.09 3.00 91282CBT7 US Treasury Note 0.750% Due 03/31/2026 2,000,000.00 04/27/2021 0.86% 1,989,531.25 1,993,100.41 89.73 4.16% 1,794,688.00 3,832.42 0.88% (198,412.41) Aaa / AA+ AAA 3.25 3.14 91282CFM8 US Treasury Note 4.125% Due 09/30/2027 1,740,000.00 11/09/2022 4.32% 1,724,978.91 1,725,416.50 100.54 4.00% 1,749,312.48 18,338.12 0.87% 23,895.98 Aaa / AA+ AAA 4.75 4.23 TOTAL US Treasury 24,040,000.00 2.09% 23,749,975.02 23,857,886.75 4.46% 23,051,984.88 80,784.90 11.38% (805,901.87) Aaa / AA+ AAA 1.70 1.61 TOTAL PORTFOLIO 206,141,994.67 2.86% 205,850,607.74 205,931,632.81 3.65% 202,605,666.89 638,856.47 100.00% (3,325,965.92) Aa2 / AA+ AA+ 0.66 0.61 TOTAL MARKET VALUE PLUS ACCRUALS 203,244,523.36 As of December 31, 2022 32 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 SECTION |Section 5 |Transactions 33 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Transaction Ledger City of Tustin Consolidated Account -Account #10795 Transaction Type Settlement Date CUSIP Quantity Security Description Price Acq/Disp Yield Amount Interest Pur/Sold Total Amount Gain/Loss ACQUISITIONS Purchase 10/15/2022 90LAIF$00 259,825.10 Local Agency Investment Fund State Pool 1.000 1.60%259,825.10 0.00 259,825.10 0.00 Purchase 10/31/2022 90CAMP$00 57,616.61 California Asset Mgmt Program CAMP 1.000 3.21%57,616.61 0.00 57,616.61 0.00 Purchase 11/10/2022 91282CFM8 1,740,000.00 US Treasury Note 4.125% Due: 09/30/2027 99.137 4.32%1,724,978.91 8,084.55 1,733,063.46 0.00 Purchase 11/30/2022 90CAMP$00 95,869.79 California Asset Mgmt Program CAMP 1.000 4.04%95,869.79 0.00 95,869.79 0.00 Purchase 12/31/2022 90CAMP$00 195,854.78 California Asset Mgmt Program CAMP 1.000 4.50%195,854.78 0.00 195,854.78 0.00 Subtotal 2,349,166.28 2,334,145.19 8,084.55 2,342,229.74 0.00 Security Contribution 10/31/2022 90CAMP$00 7,000,000.00 California Asset Mgmt Program CAMP 1.000 7,000,000.00 0.00 7,000,000.00 0.00 Security Contribution 11/10/2022 90LAIF$00 2,500,000.00 Local Agency Investment Fund State Pool 1.000 2,500,000.00 0.00 2,500,000.00 0.00 Security Contribution 11/30/2022 90CAMP$00 10,249,950.00 California Asset Mgmt Program CAMP 1.000 10,249,950.00 0.00 10,249,950.00 0.00 Security Contribution 12/31/2022 90CAMP$00 30,250,000.00 California Asset Mgmt Program CAMP 1.000 30,250,000.00 0.00 30,250,000.00 0.00 Subtotal 49,999,950.00 49,999,950.00 0.00 49,999,950.00 0.00 TOTAL ACQUISITIONS 52,349,116.28 52,334,095.19 8,084.55 52,342,179.74 0.00 DISPOSITIONS Maturity 10/06/2022 89114WU86 2,400,000.00 Toronto Dominion Yankee CD 1.45% Due: 10/06/2022 100.000 2,400,000.00 17,690.00 2,417,690.00 0.00 September 30, 2022 through December 31, 2022 As of December 31, 2022 34 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Transaction Ledger City of Tustin Consolidated Account -Account #10795 Transaction Type Settlement Date CUSIP Quantity Security Description Price Acq/Disp Yield Amount Interest Pur/Sold Total Amount Gain/Loss Maturity 10/13/2022 01859BAA3 248,000.00 Alliance Credit Union MO Negotiable CD 2.25% Due: 10/13/2022 100.000 248,000.00 0.00 248,000.00 0.00 Maturity 10/31/2022 9128283C2 6,000,000.00 US Treasury Note 2% Due: 10/31/2022 100.000 6,000,000.00 0.00 6,000,000.00 0.00 Maturity 11/01/2022 13077DFD9 250,000.00 California State University TE-REV 3.054% Due: 11/01/2022 100.000 250,000.00 0.00 250,000.00 0.00 Maturity 11/03/2022 01748DAY2 248,000.00 Allegiance Bank Negotiable CD 2.2% Due: 11/03/2022 100.000 248,000.00 0.00 248,000.00 0.00 Maturity 11/07/2022 78015DL73 4,000,000.00 Royal Bank of Canada NY Discount CP 1.57% Due: 11/07/2022 99.058 4,000,000.00 0.00 4,000,000.00 0.00 Maturity 11/08/2022 319141JF5 248,000.00 First Bank of Highland Negotiable CD 2.2% Due: 11/08/2022 100.000 248,000.00 0.00 248,000.00 0.00 Maturity 11/08/2022 62384RAC0 248,000.00 MOUNTAIN AMERICA FD CRED Negotiable CD 2.3% Due: 11/08/2022 100.000 248,000.00 0.00 248,000.00 0.00 Maturity 11/08/2022 82669VBY6 248,000.00 Signature Bank Chicago IL Negotiable CD 2.15% Due: 11/08/2022 100.000 248,000.00 0.00 248,000.00 0.00 Maturity 11/15/2022 912828TY6 5,000,000.00 US Treasury Note 1.625% Due: 11/15/2022 100.000 5,000,000.00 0.00 5,000,000.00 0.00 Maturity 11/30/2022 91282CAX9 5,000,000.00 US Treasury Note 0.125% Due: 11/30/2022 100.000 5,000,000.00 0.00 5,000,000.00 0.00 Maturity 12/06/2022 46640QM65 2,000,000.00 JP Morgan Discount CP 1.73% Due: 12/06/2022 98.827 2,000,000.00 0.00 2,000,000.00 0.00 Maturity 12/15/2022 912828YW4 6,000,000.00 US Treasury Note 1.625% Due: 12/15/2022 100.000 6,000,000.00 0.00 6,000,000.00 0.00 Subtotal 31,890,000.00 31,890,000.00 17,690.00 31,907,690.00 0.00 Security Withdrawal 10/20/2022 90LAIF$00 1,250,000.00 Local Agency Investment Fund State Pool 1.000 1,250,000.00 0.00 1,250,000.00 0.00 Security Withdrawal 11/02/2022 90LAIF$00 6,000.00 Local Agency Investment Fund State Pool 1.000 6,000.00 0.00 6,000.00 0.00 September 30, 2022 through December 31, 2022 As of December 31, 2022 35 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Transaction Ledger City of Tustin Consolidated Account -Account #10795 Transaction Type Settlement Date CUSIP Quantity Security Description Price Acq/Disp Yield Amount Interest Pur/Sold Total Amount Gain/Loss Security Withdrawal 11/03/2022 90LAIF$00 4,000,000.00 Local Agency Investment Fund State Pool 1.000 4,000,000.00 0.00 4,000,000.00 0.00 Subtotal 5,256,000.00 5,256,000.00 0.00 5,256,000.00 0.00 TOTAL DISPOSITIONS 37,146,000.00 37,146,000.00 17,690.00 37,163,690.00 0.00 September 30, 2022 through December 31, 2022 As of December 31, 2022 36 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Important Disclosures 2022 Chandler Asset Management,Inc, An Independent Registered Investment Adviser. Information contained herein is confidential.Prices are provided by ICE Data Services Inc (“IDS”),an independent pricing source.In the event IDS does not provide a price or if the price provided is not reflective of fair market value, Chandler will obtain pricing from an alternative approved third party pricing source in accordance with our written valuation policy and procedures.Our valuation procedures are also disclosed in Item 5 of our Form ADV Part 2A. Performance results are presented gross-of-advisory fees and represent the client’s Total Return.The deduction of advisory fees lowers performance results.These results include the reinvestment of dividends and other earnings.Past performance may not be indicative of future results.Therefore,clients should not assume that future performance of any specific investment or investment strategy will be profitable or equal to past performance levels.All investment strategies have the potential for profit or loss.Economic factors,market conditions or changes in investment strategies, contributions or withdrawals may materially alter the performance and results of your portfolio. Index returns assume reinvestment of all distributions.Historical performance results for investment indexes generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee,the incurrence of which would have the effect of decreasing historical performance results.It is not possible to invest directly in an index. Source ICE Data Indices,LLC ("ICE"),used with permission. 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This report is provided for informational purposes only and should not be construed as a specific investment or legal advice.The information contained herein was obtained from sources believed to be reliable as of the date of publication,but may become outdated or superseded at any time without notice.Any opinions or views expressed are based on current market conditions and are subject to change.This report may contain forecasts and forward-looking statements which are inherently limited and should not be relied upon as indicator of future results.Past performance is not indicative of future results.This report is not intended to constitute an offer,solicitation,recommendation or advice regarding any securities or investment strategy and should not be regarded by recipients as a substitute for the exercise of their own judgment. Fixed income investments are subject to interest, credit and market risk.Interest rate risk:the value of fixed income investments will decline as interest rates rise.Credit risk:the possibility that the borrower may not be able to repay interest and principal.Low rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk.Market risk:the bond market in general could decline due to economic conditions,especially during periods of rising interest rates. Ratings information have been provided by Moody’s,S&P and Fitch through data feeds we believe to be reliable as of the date of this statement, however we cannot guarantee its accuracy. Security level ratings for U.S.Agency issued mortgage-backed securities (“MBS”)reflect the issuer rating because the securities themselves are not rated.The issuing U.S.Agency guarantees the full and timely payment of both principal and interest and carries a AA+/Aaa/AAA by S&P,Moody’s and Fitch respectively. As of December 31, 2022 37 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 Benchmark Disclosures ICE BofA 1-5 Yr US Treasury & Agency Index The ICE BofA 1-5 Year US Treasury &Agency Index tracks the performance of US dollar denominated US Treasury and nonsubordinated US agency debt issued in the US domestic market.Qualifying securities must have an investment grade rating (based on an average of Moody’s,S&P and Fitch).Qualifying securities must have at least one year remaining term to final maturity and less than five years remaining term to final maturity,at least 18 months to maturity at time of issuance,a fixed coupon schedule,and a minimum amount outstanding of $1 billion for sovereigns and $250 million for agencies. ICE BofA 1-3 Yr US Treasury & Agency Index The ICE BofA 1-3 Year US Treasury &Agency Index tracks the performance of US dollar denominated US Treasury and nonsubordinated US agency debt issued in the US domestic market.Qualifying securities must have an investment grade rating (based on an average of Moody’s,S&P and Fitch).Qualifying securities must have at least one year remaining term to final maturity and less than three years remaining term to final maturity,at least 18 months to maturity at time of issuance,a fixed coupon schedule,and a minimum amount outstanding of $1 billion for sovereigns and $250 million for agencies. As of December 31, 2022 38 DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2 CI T Y  OF  TU S T I N Mo n t h l y  In v e s t m e n t  Re p o r t De c e m b e r  31 ,  20 2 2 [1 ] [2 ] [ 3 ] [ 4 ] [ 5 ] De s c r i p t i o n  / Li m i t s F a c e  Am o u n t  Sh a r e s Y T M @ C o s t C r e d i t  Ra t i n g C o s t  Va l u e  + Accrued   In t e r e s t Market  Value 20 1 6  Su c c e s s o r  Ag e n c y  Ta x  Al l o c a t i o n  Bo n d s ,  Re f u n d i n g 3 5 5 . 0 1 N / A 3 5 5 . 0 1 3 5 5 . 0 1 20 1 6  Wa t e r  Re v e n u e  Bo n d s ,  Re f u n d i n g 5 5 5 . 6 2 N / A 5 5 5 . 6 2 5 5 5 . 6 2 20 1 2  Wa t e r  Re v e n u e  Bo n d s  ‐   Re f u n d i n g 3 1 . 0 4 N / A 3 1 . 0 4 3 1 . 0 4 20 2 0  Wa t e r  Re v e n u e  Bo n d s 4 5 1 . 4 1 N / A 4 5 1 . 4 1 4 5 1 . 4 1 CF D  04 ‐1 6 0 2 , 9 9 2 . 5 0 N / A 6 0 2 , 9 9 2 . 5 0 6 0 2 , 9 9 2 . 5 0 CF D  06 ‐1 4 , 1 2 3 , 8 2 0 . 4 0 N / A 4 , 1 2 3 , 8 2 0 . 4 0 4 , 1 2 3 , 8 2 0 . 4 0 CF D  07 ‐1 1 , 1 5 1 , 1 9 7 . 7 1 N / A 1 , 1 5 1 , 1 9 7 . 7 1 1 , 1 5 1 , 1 9 7 . 7 1 CF D  14 ‐1 3 , 3 4 0 , 3 3 9 . 2 5 N / A 3 , 3 4 0 , 3 3 9 . 2 5 3 , 3 4 0 , 3 3 9 . 2 5 9, 2 1 9 , 7 4 2 . 9 4 9 , 2 1 9 , 7 4 2 . 9 4 9 , 2 1 9 , 7 4 2 . 9 4 Re s t r i c t e d  De p o s i t s  wi t h  Fi s c a l  Ag e n t s  TO T A L 9 , 2 1 9 , 7 4 2 . 9 4                                    9,219,742.94               Re s t r i c t e d  De p o s i t s  wi t h  Fi s c a l  Ag e n t s Do c u S i g n E n v e l o p e I D : F A B 2 2 7 F B - 4 4 B 1 - 4 2 3 E - A 8 9 1 - 5 F 9 9 3 A 4 7 E 6 D 2 CITY OF TUSTIN PARS Post-Employment Benefits Trust 12/1/2022 to 12/31/2022 Matthew West City Manager City of Tustin 300 Centennial Way Tustin, CA 92780 Account Summary Source 12/1/2022 Contributions Earnings Expenses Distributions Transfers 12/31/2022 OPEB 1001 $2,801,864.41 $0.00 -$76,121.31 $1,217.08 $0.00 $0.00 $2,724,526.02 PENSION 1002 $8,526,959.11 $0.00 -$231,551.12 $3,703.37 $0.00 $0.00 $8,291,704.62 Totals $11,328,823.52 $0.00 -$307,672.43 $4,920.45 $0.00 $0.00 $11,016,230.64 Investment Selection Source OPEB PENSION Investment Objective Source OPEB PENSION Investment Return Source 1-Month 3-Months 1-Year 3-Years 5-Years 10-Years OPEB -2.72%4.85%-14.26%1.75%--6/26/2018 PENSION -2.72%4.85%-14.25%1.75%--6/26/2018 Information as provided by US Bank, Trustee for PARS; Not FDIC Insured; No Bank Guarantee; May Lose Value Headquarters - 4350 Von Karman Ave., Suite 100, Newport Beach, CA 92660 800.540.6369 Fax 949.250.1250 www.pars.org Balance as of Individual account based on Moderate Index PLUS. The dual goals of the Moderate Strategy are growth of principal and income. It is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital appreciation is equally important. The portfolio will be allocated between equity and fixed income investments. City of Tustin - Pension Plan's Inception Date Account balances are inclusive of Trust Administration, Trustee and Investment Management fees Annualized Return Investment Return: Annualized rate of return is the return on an investment over a period other than one year multiplied or divided to give a comparable one-year return. Past performance does not guarantee future results. Performance returns may not reflect the deduction of applicable fees, which could reduce returns. Information is deemed reliable but may be subject to change. Individual account based on Moderate Index PLUS. The dual goals of the Moderate Strategy are growth of principal and income. It is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital appreciation is equally important. The portfolio will be allocated between equity and fixed income investments. Account Report for the Period Balance as of City of Tustin - OPEB DocuSign Envelope ID: FAB227FB-44B1-423E-A891-5F993A47E6D2