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08-15-2019 IOC Agenda Packet
City of San Luis Obispo, Agenda, Planning Commission Agenda INVESTMENT OVERSIGHT COMMITTEE Thursday, August 15, 2019 1:30 p.m. REGULAR MEETING Council Hearing Room 990 Palm Street San Luis Obispo, CA CALL TO ORDER: Chair Brigitte Elke ROLL CALL : Committee Members Heidi Harmon, Daniel Humphrey (Public Member) Derek Johnson, Debbie Malicoat, and Chair Brigitte Elke OTHERS PRESENT: Natalie Harnett, Staff, Monique S. Spkye, Managing Director for PFM Asset Management LLC, and Serenity Whorley, Recording Secretary PUBLIC COMMENT: At this time, people may address the Committee about items not on the agenda. Persons wishing to speak should come forward and state their name and address. Comments are limited to three minutes per person. Items raised at this time are generally referred to staff and, if action by the Committee is necessary, may be scheduled for a future meeting. CONSIDERATION OF MINUTES 1. Minutes of the Investment Oversight Committee of June 6, 2019 BUSINESS ITEMS 2. Presentation of the Quarterly Investment Report on Portfolio Performance Recommendation: Review and confirm investment policy compliance. Investment Oversight Committee Agenda for August 15,2019 Page 2 COMMENT AND DISCUSSION 3. Staff Updates and agenda forecast ADJOURNMENT The next Regular Meeting of the Investment Oversight Committee is scheduled for Thursday, November 14 , 201 9, at 1:30 p.m., in the Council Hearing Room, 990 Palm Street, San Luis Obispo, California. The City of San Luis Obispo wishes to make all of its public meet ings accessible to the public. Upon request, this agenda will be made available in appropriate alternative formats to persons with disabilities. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the Finance Department at (805) 781-7125 at least 48 hours before the meeting, if possible. Telecommunications Device for the Deaf (805) 781-7107. Meeting audio recordings can be found at the following web address: http://opengov.slocity.org/WebLink/1/fol/61037/Row1.aspx Minutes - Draft Investment Oversight Committee Thursday, June 6, 2019 Regular Meeting of the Investment Oversight Committee CALL TO ORDER A regular meeting of the Investment Oversight Committee was called to order on Thursday, June 6, 2019, at 1:30 p.m. in the Council Hearing Room at 990 Palm Street, San Luis Obispo, California, by Chair Brigitte Elke. ROLL CALL Oath of Office: Oath of Office taken by Committee Members Daniel Humphrey and Debbie Malicoat Present: Committee Members Daniel Humphrey (Public Member), Derek Johnson, Debbie Malicoat, and Chair Brigitte Elke Absent: Committee Member Heidi Harmon. Others Present: Monique S. Spyke, Managing Director for PFM Asset Management LLC and Serenity Whorley, Recording Secretary PUBLIC COMMENT ITEMS NOT ON THE AGENDA NONE --End of Public Comment-- APPROVAL OF MINUTES 1. Review of Minutes of the Investment Oversight Committee Meeting of November 15, 2018: ACTION: UPON MOTION BY COMMITTEE MEMBER MALICOAT, SECONDED BY COMMITTEE MEMBER JOHNSON, CARRIED 4-0-0, to approve the November 15, 2018 minutes, as presented. PUBLIC COMMENT NONE --End of Public Comment-- City of San Luis Obispo, Title, Subtitle Minutes - Investment Oversight Committee Minutes of Thursday, June, 06, 2019 Page 2 BUSINESS ITEMS 2. Presentation of the Quarterly Investment Report on Portfolio Performance a. Review and confirm investment policy compliance Monique S. Spyke, Managing Director for PFM Asset Management LLC, provided a PowerPoint presentation and responded to Committee inquiries. ACTION: UPON MOTION BY COMMITTEE MEMBER JOHNSON, SECONDED BY COMMITTEE MEMBER HUMPHREY, CARRIED 4-0-0, recommendation. 3. Changes to Investment Policies a. Review and approve proposed changes Finance Director Elke (or whomever presents the report) provided a PowerPoint presentation and responded to Committee inquiries. Public Comment NONE --End of Public Comment-- ACTION: Postponed toallow staff time update Cash Flow analysis and produce market information. COMMENT AND DISCUSSION Finance Director Elke provided an agenda forecast. Update cashflow analysis. ADJOURNMENT The meeting was adjourned at 2:20 pm. The next Regular Meeting of the Investment Oversight Committee is scheduled for Thursday, August 15 , 2019, at 1:30 p.m., in the Council Hearing Room, 990 Palm Street, San Luis Obispo, California. APPROVED BY INVESTMENT OVERSIGHT COMMITTEE: XX/XX/XXXX Quarterly Investment Report As of June 30, 2019 August 9, 2019 This report presents the City’s investment portfolio for the quarter ending June 30, 2019 It has been prepared to comply with regulations contained in California Government Code Section 53646. The report includes all investments managed by the City on its own behalf as well as for other third-party agencies on a fiduciary basis such as the Whale Rock Commission. It also includes all City-related investments held by trustees for bond debt service obligations. As required, the report provides information on the investment type, issuer, maturity date, cost, and current market value for each security. Market Themes Capital Markets – interest rates plummet The Fed will “act… to sustain the expansion” U.S. economic growth expected to slow from faster-than-expected first quarter Economic Data and Considerations ➢ Inflation continues to large the Fed’s 2% target at 1.6% ➢ Durable goods orders slump as business investment slowed ➢ Small business optimism is waning (NFIB) ➢ Recent trade conflicts are taking a toll on manufacturing sector ➢ Consumer confidence still high ➢ Unemployment rate near 49-year low ➢ Corporate spreads still tight on historical basis ➢ S&P Price change at a new all-time high Quarterly Investment Report Current Cash and Investment Summary The following is a summary of the City’s cash and investments based on market value as of June 30, 2019 compared with the prior quarter: Investment Entity March 31, 2019 June 30, 2019 % of Total City held cash & investments $ 29,868,106 $ 29,015,340 22% LAIF held investments $ 23,154,000 $ 23,299,241 17% PFM held investments $ 78,301,284 $ 79,607,131 60% Trustee held investments $ 951,661 $ 967,488 1% Total $ 132,275,051 $ 132,889,200 There are a number of factors which result in changes in cash and investment balances from month to month and quarter to quarter dependent on the receipt of revenues or a large disbursement. •Some major City revenues are received on a periodic rather than a monthly basis. Property Tax is received in December, January, April and May of each year. Transient Occupancy Tax is received monthly but varies considerably due to seasonality. •Payments for bonded indebtedness or large capital projects can reduce the portfolio substantially in the quarter in which they occur. •The City pays its CalPERS obligation in a lump sum at the beginning of the fiscal year to achieve interest savings. Securities in the City’s portfolio are priced by IDC, an independent pricing service at the end of every month. In some cases, the City may have investments with a current market value that is greater or less than the recorded value. These changes in market value are due to fluctuations in the marketplace having no effect on yield, as the City does not intend to sell securities prior to maturity. Nevertheless, these market changes can impact the total value of the portfolio 6/30/2019 3/31/2019 Average Maturity (yrs) 0.01 0.02 Effective Duration1 0.01 0.02 Average Market Yield 1.42% 1.41% Total Rate of Return 3 months 1 year 3 years Since inception City of SLO 1.58% 4.52% 1.61% 1.68% 0-5 Yr. Treasury Index 1.60% 4.39% 1.34% 1.51% Variance -0.02% +0.13% +0.27% +0.17% 1 Effective duration is the approximate percentage change in price for each 1% change in interest rates. Quarterly Investment Report As of June 30, 2019, the investment portfolio was in compliance with all State laws, the City's Statement of Investment Policy and the City’s Investment Management Plan. Summary of Activity for the Quarter and Future Liquidity Cash receipts and disbursements are consistent with past trends for the quarter. The cash management program contains enough liquidity to meet at least the next three months of expected expenditures by the City as well as by related parties, such as the Whale Rock Commission. If you have any questions concerning this report, or require additional information, contact Brigitte Elke, Finance Director at (805) 781-7510. Supplemental Information Investment Portfolio Benefits all Funds The City’s cash and investment portfolio represents money from all City funds, including the General Fund, enterprise funds (Water, Sewer, Parking, Transit), special revenue funds (Tourism, Downtown Assessments) capital projects funds, and other funds which are restricted to specific purposes. In general, monies held by the City are either allocated by the City Council for spending or are purposefully retained in reserve. For example, the money in the Capital Outlay Fund has been identified to provide particular capital projects for the community and there is a plan for spending down the cash balance as the projects progress. Balances held in reserve per the City’s financial policies equates to 20% of operating budget. For fiscal year 2019-20, they are as follows: Fund FY 2019-20 General Fund $ 10,230,000 Water Fund $ 4,572,000 Sewer Fund $ 2,844,000 Parking Fund $ 539,000 Transit Fund $ 820,000 Tourism Fund $ 100,000 Investment Objectives The investment objectives of the City of San Luis Obispo are first, to provide safety of principal to ensure the preservation of capital in the overall portfolio; second, to provide sufficient liquidity to meet all operating requirements; and third, to earn a commensurate rate of return consistent with the constraints imposed by the safety and liquidity objectives. The City follows the practice of pooling cash and investments for all funds under its direct control. Funds held by outside fiscal agents under provisions of bond indentures are maintained separately. Interest earned on pooled cash and investments is allocated quarterly to the various Quarterly Investment Report funds based on the respective fund’s average quarterly cash balance. Interest earned from cash and investments with fiscal agents is credited directly to the related accounts. It is common for governments to pool the cash and investments of various funds to improve investment performance. By pooling funds, the city is able to benefit from economies of scale, diversification, liquidity, and ease of administration. The City uses the services of an investment advisor, PFM Asset Management, to manage a portion of the City’s portfolio. The City’s strategy is to retain approximately 25% of the portfolio to manage its day-to-day cash flow needs, while PFM’s focus is on longer-term investment management. In addition, the City has retained direct control of several investments that had been acquired before the City began to use investment advisors. All investments are held by the City in a safe keeping account with Bank of New York Mellon, except for investments held by trustees related to bond financings, which are held by either US Bank or Bank of New York Mellon. DISTRIBUTION LIST City Council Heidi Harmon, Mayor Andy Pease, Vice Mayor Aaron Gomez, Council Member Erica A. Stewart, Council Member Carlyn Christianson, Council Member Investment Oversight Committee Heidi Harmon, Mayor Daniel Humphrey, Public Member Derek Johnson, City Manager Brigitte Elke, Interim Director of Finance Debbie Malicoat, Accounting Manager/Controller Natalie Harnett, Principal Financial Analyst - Budget Independent Auditor Badawi & Associates PFM Asset Management Monique Skype, Portfolio Manager CITY OF SAN LUIS OBISPO SUMMARY OF INVESTMENTS As of June 30, 2019 Percent of Current Market Portfolio Yield Value Local Agency Investment Funds 45%2.43%23,299,241.42 Certificate of Deposit 2%2.25%1,000,000.00 Money Market Account 2%0.25%1,020,391.00 Checking Account 52%0.57%26,994,949.02 Treasury Issues 0%0.00%0.00 Total Investments Held by the City 100%1.42%$52,314,581.44 Percent of Current Portfolio Yield Value Federal Agency Issues 24%1.79%19,469,374.00 Commercial Paper 2%2.71%1,483,937.00 Money Market Fund 0%0.00%148,625.54 US Corporate Notes 19%2.18%14,829,220.00 Negotiable CD 10%2.56%7,863,350.00 Asset-Backed Security 3%2.90%2,537,880.00 Treasury Issues 42%2.26%33,274,745.00 Total Investments Managed by Public Financial Management 100%2.09%$79,607,131.54 Percent of Current Market Trustee Portfolio Yield Value First American Treasury Funds 0.00%0.00%0.00 Other Money Market Accounts 48.17%0.30%466,016.43 Certificate of Deposit 0.00%0.00%0.00 Guaranteed Investment Contracts 0.00%see below 0.00 Federal Agency Issues 0.00%0.00%0.00 Treasury Issues 51.83%Varies 501,471.53 Total Investments Held by Trustees 100%$967,487.96 Total of all Investments--Market Value $132,889,200.94 INVESTMENTS HELD AND MANAGED BY THE CITY INVESTMENTS OF THE CITY MANAGED BY PUBLIC FINANCIAL MANAGEMENT INVESTMENTS OF THE CITY HELD BY TRUSTEES FOR BOND DEBT SERVICE OBLIGATIONS TOTAL CASH AND INVESTMENTS © PFM 1 City of San Luis Obispo Investment Report For the Quarter Ended June 30, 2019 PFM Asset Management LLC www.pfm.com 50 California Street Suite 2300 San Francisco, CA 94111 415-982-5544 Monique Spyke, Managing Director spykem@pfm.com © PFM Table of Contents I.Market Update II.Portfolio Review III.Appendix A.Consolidated Portfolio Information B.Investment Policy Snapshot C.Portfolio Holdings D.Quarterly Transactions © PFM I. Market Update © PFM Current Market Themes Capital markets –interest rates plummet U.S. economic growth expected to slow from faster-than-expected first quarter The Fed will “act… to sustain the expansion” 1 © PFM Some Economic Data Shows Signs of Weakening Source: Bloomberg, as of 6/30/2019. 1.0% 1.5% 2.0% 2.5% May '16 Nov '16 May '17 Nov '17 May '18 Nov '18 May '19 Inflation (Core PCE YoY) inflation continues to lag the Fed’s 2% target -0.8% -0.4% 0.0% 0.4% 0.8% 1.2% 1.6% May '16 Nov '16 May '17 Nov '17 May '18 Nov '18 May '19 Durable Goods Orders orders slump as business investment slowed 90 95 100 105 110 May '16 Nov '16 May '17 Nov '17 May '18 Nov '18 May '19 NFIB Small Business Optimism Small business optimism is waning 40 45 50 55 60 65 May '16 Nov '16 May '17 Nov '17 May '18 Nov '18 May '19 ISM Manufacturing recent trade conflicts taking toll on manufacturing sector 2 © PFM However, Many Broad Metrics are Still Strong 6.1% 5.3% 4.9% 4.3%4.0% 3.7%3% 4% 5% 6% 7% Jun '14 Jun '15 Jun '16 Jun '17 Jun '18 Jun '19 Unemployment Rate 60 80 100 120 140 160 Jun '14 Jun '15 Jun '16 Jun '17 Jun '18 Jun '19 Consumer Confidence still near all-time high near 49-year low 0 100 200 300 400 500 600 700 Jun '00 Jun '03 Jun '06 Jun '09 Jun '12 Jun '15 Jun '18 Corporate Spreads 1-5 Year A-AAA (OAS) still tight on historical basis Source: Bloomberg, as of 6/30/2019. 2,300 2,400 2,500 2,600 2,700 2,800 2,900 3,000 Jun '18 Aug '18 Oct '18 Dec '18 Feb '19 Apr '19 Jun '19 S&P Price Change new all-time high 3 © PFM Fed’s Pivot on Monetary Policy Has Market Expecting Multiple Rate Cuts Source: Federal Reserve. 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Dec '17 Dec '18 Dec '19 Dec '20 Dec '21 December ’18 Fed Funds Futures March ’19 Fed Funds Futures June ’19 Fed Funds Futures Fed Funds Target Rate (mid-point) Fed Chair Jerome Powell has identified downside risks which may derail economic growth and warrant a change in monetary policy: •slowing momentum in major foreign economies •government policy issues such as trade, the debt ceiling, and Brexit •weak inflation 4 © PFM Yield Curve Inversion Reflects Less Certain Economic Outlook -0.28% -0.65% -0.76%-0.79%-0.79% -0.71% -0.49% 3-Month 2-Year 5-Year 30-Year YTD Change in Treasury Yields 2.09% 1.71% 2.01% 1.25% 1.50% 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% 3.25% 3 M 1 Y 2 Y 3 Y 4 Y 5 Y 10 Y 30 YYield Maturity U.S. Treasury Yield Curve June 30, 2018 December 31, 2018 June 30, 2019 Source: Bloomberg, as of 6/30/2019. 5 © PFM ABS and MBS Sectors Offer Better Value than Other Agencies -0.05% 0.00% 0.05% 0.10% 0.15% 0.20% 1 2 3 4 5 Years to Maturity Yield Spreads on Federal Agencies and Supranationals Supra Avg. 06/24/19 Agency 06/24/19 agencies offer little incremental yield; supranational spreads tight amid low supply 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% Jun '17 Jun '18 Jun '19 Asset-Backed Securities Yield Spreads AAA Auto ABS AAA Credit Card ABS Source: Bloomberg, MarketAxess, and PFM. Spreads on ABS and MBS are option-adjusted spreads; spreads on agencies and supranationals are relative to comparable maturity Treasuries. Data as of 6/30/19. ICE BofAML 1-5 year Indices. MBS and ABS indices are 0-5 year, based on weighted average life. spreads widened in Q2, making selective ABS issues attractive 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% Jun '17 Jun '18 Jun '19 Mortgage-Backed Securities Yield Spreads Agency MBS AAA CMBS Index 6 © PFM Corporate Yield Spreads Recover from Recent Bouts of Spread Widening 0 100 200 300 400 500 600 700 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018Basis PointsYield Spreads on 1-5 Year A-AAA Corporate Notes Post-Recession Avg = 86 bps Pre-Recession Avg = 79 bps Source: Bloomberg, ICE BofAML Indices. OAS is option adjusted spread. As of 6/28/2019. 40 60 80 100 Jun '17 Dec '17 Jun '18 Dec '18 Jun '19(basis points)7 © PFM Short-Term Credit: Yield Curve Inversion Spills into Money Market Space Source (left): Bloomberg as of 6/30/2019. Source (right): PFM Trading Desk, as of 7/11/2019. 6-mo CP yield spread based on A1/P1 rated CP index. 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Yield Spread on 6-month Commercial Paper over T-Bill 1.80% 2.00% 2.20% 2.40% 2.60% 2.80% 3.00% 1 2 3 4 5 6 7 8 9 10 11 12 Maturity in Months Money Market Yield Curves CD/CP Average Agencies Treasuries CD/CP (12/31/18) -97 bps 8 © PFM Most Sectors Contribute to Performance During Quarter; Longer Securities Perform Better as Rates Fall Source: ICE BofAML 1-5 year Indices. MBS and ABS indices are 0-5 year, based on weighted average life. As of 6/30/2019. 1.82% 1.44% 1.87%2.01%2.00%1.81%2.06%2.30% 1.86%U.S. TreasuryAgencyAgency MBSSupranationalsABS (AAA)Corp AAACorp AACorp ACorp BBB2019 Q2 1-5 Index Returns by Sector 0.76% 1.44% 2.42% 3.20% 3.92% 4.19% 5.95%0-1 Yr.1-3 Yr.3-5 Yr.5-7 Yr.7-10 Yr.10-15 Yr.15+ Yr.2019 Q2 Treasury Returns 9 © PFM II. Portfolio Review © PFM Portfolio Characteristics -Internal For the Quarter Ended June 30, 2019 Portfolio Review 6/30/2019 3/31/2019 Average Maturity (yrs)0.01 0.02 Effective Duration1 0.01 0.02 Average Market Yield 1.42%1.41% Total Market Value 52,314,581 53,022,107 Securities and funds in the internal portfolio are not rated. 1.Effective duration used in place of modified duration. Effective duration is the approximate percentage change in price for each 1% cha nge in interest rates. Modified duration is a similar risk measure but it ignores how changes in rates will impact cash flows on bonds with embedded options such as callable notes , MBS, or ABS. Effective duration takes into account the impact that changing interest rates has on cash flows (i.e., if interest rates fall and a callable bond is more likely to be called prior to its final maturity, the effective duration will decrease). 11 © PFM Sector Distribution-Internal For the Quarter Ended June 30, 2019 Portfolio Review * Issuer is Pacific Premier Bank. Percentages based on market values excluding accrued interest. LAIF Money Market Rate Account Negotiable CDs*Cash 6/30/2019 44.5%2.0%1.9%51.6% 3/31/2019 43.7%1.9%1.9%52.5% 0% 10% 20% 30% 40% 50% 60% 12 © PFM Aggregate Sector Allocation and Compliance Security Type Market Value % of Portfolio % Change vs. 3/31/19 Permitted by Policy In Compliance U.S. Treasury $33,274,745 25.2%+0.4%100% Federal Agency $19,469,374 14.8%-0.5%100% Negotiable CDs $7,863,350 6.0%-1.2%30% Corporate Notes $14,829,220 11.2%+1.4%30% Commercial Paper $1,483,937 1.1%-0.8%25% Asset-Backed Securities $2,537,880 1.9%+1.3%15% Securities Sub-Total $79,458,506 60.3% Money Market Fund $83,131 0.1%-20% Accrued Interest $446,235 Securities Total $79,987,872 LAIF $23,299,241 17.7%+0.1%$65 Million JP Morgan Checking*$26,994,949 20.5%-0.7%100% Pacific Premiere MMF $1,020,391 0.8%-20% Pacific Premiere Bank CD $1,000,000 0.8%-25% Total Investments $132,302,453 100.0% For the Quarter Ended June 30, 2019 Portfolio Review * JP Morgan Checking account is 100% cash. 13 © PFM Socially Responsible Investment Policy The City’s Investment Policy restricts issuers from the portfolio who generate revenue from tobacco, electronic cigarette, or tobacco-related products, or who support the direct production or drilling of fossil fuels. The City’s portfolio is in compliance with the SRI restrictions. Below are the Bloomberg Industry Classifications (“BICS”) for all of the portfolio’s holdings. Source: Bloomberg. BICs is an industry classification system developed and utilized by Bloomberg that classifies securities based on business, economic function, and other characteristics. Issuer Sector (BICS) American Honda Finance Automobiles Manufacturing Hyundai Auto Receivables Trust Automobiles Manufacturing Nissan Auto Receivables Automobiles Manufacturing Toyota Motor Credit Corp Automobiles Manufacturing Bank of Montreal Chicago Banks Bank of Nova Scotia Banks Credit Agricole Banks Nordea Bank AB NY Banks Swedbank NY Banks Wells Fargo & Company Banks Westpac Banking Corp NY Banks Apple Inc Communications Equipment Proctor & Gamble Consumer Products Unilever Consumer Products General Electric Electrical Equipment Manufacturing Walt Disney Company Entertainment Content BNY Mellon Financial Services Issuer Sector (BICS) CarMax Auto Owner Trust Financial Services UBS AG Stamford CT Financial Services Hershey Company Food & Beverage FHLB Government Agencies FHLMC Government Agencies FNMA Government Agencies John Deere Machinery Manufacturing Wal-Mart Stores Mass Merchants Pfizer Inc Pharmaceuticals Berkshire Hathaway Property & Casualty Insurance Burlington North Railroad Amazon.com Inc Retail -Consumer Discretionary Home Depot Retail -Consumer Discretionary IBM Software & Services Microsoft Corp Software & Services U.S. Treasury Sovereigns Ally Auto Receivables Trust Specialty Finance Capital One Prime Auto Receivables Trust Specialty Finance For the Quarter Ended June 30, 2019 Portfolio Review 14 © PFM Objectives Investment Objectives The investment objectives of the City of San Luis Obispo are first, to provide safety of principal to ensure the preservation of capital in the overall portfolio; second, to provide sufficient liquidity to meet all operating requirements; and third, to earn a commensurate rate of return consistent with the constraints imposed by the safety and liquidity objectives. Performance Objectives The performance objective for the portfolio is to earn a total rate of return over a market cycle that equals or exceeds the market index, the ICE Bank of America Merrill Lynch Index of 0-5 Year Treasury securities. Strategy In order to achieve this objective, the portfolio invests in high -quality money market instruments, U.S. Treasury securities, Federal Agency securities, and high -grade corporate securities, with a maximum maturity of five years. For the Quarter Ended June 30, 2019 Portfolio Review 15 © PFM First Quarter 2019 Recap Our strategy throughout the quarter included the following elements: •Broad diversification, generally including the widest range of permitted investments, which reduces the overall risk in the portfolio and provides the opportunity for better returns over the long term. •We maintained a portfolio duration in line with the benchmark. Maintaining a neutral duration —despite the inverted yield curve—drove strong market-value returns across most fixed-income sectors as market prices on fixed-income securities tend to rise as yields fall. •We continued to reduce federal agency allocations as their yields did not offer much value compared to treasury alternatives, which has been driven mainly by a lack of new supply. Non-callable agencies generated small out-performance due to their modestly higher yields, but callable agencies underperformed as lower rates increased the likelihood of a call before maturity. •Corporate yield spreads remain tight by historical standards but widened briefly amid trade tensions. Corporates generated excess returns for the second consecutive quarter. We focused allocations on high quality issuers with relatively less exposure to international trade risks. We also had a slight preference for industrials over financials in the quarter. •Asset-backed securities (ABS) spreads declined to 10-year lows throughout the first half of the quarter, providing incremental returns relative to Treasuries. By June, ABS spreads began to widen slightly but still remained low by historical standards. •Short-term commercial paper and negotiable bank CD yield spreads narrowed in the second quarter, reducing their overall attractiveness. By quarter -end, the money market yield curve was also inverted. For the Quarter Ended June 30, 2019 Portfolio Review 16 © PFM •Performance is for the City of San Luis Obispo’s Operating Funds. •Performance on trade-date basis, gross (i.e., before fees), in accordance with the CFA Institute’s Global Investment Performance Standards (GIPS). •Performance for periods one year and greater are presented on an annualized basis. •ICE Bank of America Merrill Lynch Indices provided by Bloomberg Financial Markets. •Inception date is December 31, 2014. Total Rate of Return For the Quarter Ended June 30, 2019 Portfolio Review -0.02%+0.13%+0.27%+0.17%Difference: 3 Months 1 Year 3 Years Since Inception City of San Luis Obispo 1.58%4.52%1.61%1.68% 0-5 Yr. Treasury Index 1.60%4.39%1.34%1.51% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 17 © PFM Earnings for the City of San Luis Obispo’s Operating Funds. Portfolio Earnings For the Quarter Ended June 30, 2019 Portfolio Review Market Value Basis Accrual (Amortized Cost) Basis Beginning Value (3/31/2019)$78,091,942 $78,142,601 Net Purchases/Sales $397,884 $397,884 Change in Value $838,798 $17,659 Ending Value (6/30/2019)$79,328,625 $78,558,144 Interest Earned $402,948 $402,948 Portfolio Earnings $1,241,746 $420,607 18 © PFM Characteristics for the City of San Luis Obispo’s Operating Funds. 1.The City of San Luis Obispo’s current benchmark is the ICE Bank of America Merrill Lynch (BAML) 0-5 Year U.S. Treasury Index. 2.Effective duration used in place of modified duration. Effective duration is the approximate percentage change in price for e ach 1% change in interest rates. Modified duration is a similar risk measure but it ignores how changes in rates will impact cash flows on bonds with embedded options such as callable notes, MBS, or ABS. Effective duration takes into account the impact that changing interest rates has on cash flows (i.e., if interest rates fall and a callable bond is more likely to be called prior to its final maturity, the effective duration will decrease). 3.Total Market Value includes cash and accrued interest. Portfolio Characteristics —PFM Managed For the Quarter Ended June 30, 2019 Portfolio Review 6/30/2019 Portfolio Benchmark1 Average Maturity (yrs)2.21 2.19 Effective Duration2 2.06 2.10 Average Purchase Yield 2.21%N/A Average Market Yield 1.97%1.83% Average Quality AA/Aa1 AA Total Market Value3 79,541,637 19 © PFM Sector distribution based on market value and excludes accrued interest. Sector Distribution —PFM Managed For the Quarter Ended June 30, 2019 Portfolio Review U.S. Treasury Federal Agency Negotiable CDs Commercial Paper Corporate Notes Asset- Backed Money Market Fund 6/30/2019 41.8%24.5%9.9%1.9%18.6%3.2%0.2% 3/31/2019 41.5%25.6%12.1%3.2%16.3%1.1%0.2% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 20 © PFM Credit Industry Exposure —PFM Managed For the Quarter Ended June 30, 2019 Portfolio Review *Issuer’s industry as defined by Bloomberg. Detail may not add to total due to rounding. **General Electric corporate notes were downgraded to BBB+ by S&P, Moody’s and Fitch during the fourth quarter 2018. Issuer Industry*% American Honda Finance Automobiles Manufacturing 3.8% Hyundai Auto Receivables Trust Automobiles Manufacturing 1.3% Nissan Auto Receivables Automobiles Manufacturing 3.6% Toyota Motor Credit Corp Automobiles Manufacturing 4.4% Bank of Montreal Chicago Banks 5.1% Bank of Nova Scotia Banks 5.0% Credit Agricole Banks 5.6% Nordea Bank AB NY Banks 4.3% Swedbank NY Banks 5.7% Wells Fargo & Company Banks 3.7% Westpac Banking Corp NY Banks 5.0% Apple Inc Communications Equipment 4.0% Proctor & Gamble Consumer Products 1.2% Unilever Consumer Products 0.4% General Electric Electrical Equipment Manufacturing 5.0% Walt Disney Company Entertainment Content 2.0% BNY Mellon Financial Services 6.9% CarMax Auto Owner Trust Financial Services 1.0% UBS AG Stamford CT Financial Services 4.3% Hershey Company Food & Beverage 1.2% John Deere Machinery Manufacturing 0.7% Wal-Mart Stores Mass Merchants 5.6% Pfizer Inc Pharmaceuticals 4.2% Berkshire Hathaway Property & Casualty Insurance 0.9% Burlington North Railroad 1.9% Amazon.com Inc Retail -Consumer Discretionary 2.9% Home Depot Retail -Consumer Discretionary 3.0% IBM Software & Services 2.8% Microsoft Corp Software & Services 3.7% Ally Auto Receivables Trust Specialty Finance 0.1% Capital One Prime Auto Receivables Trust Specialty Finance 0.8% Total 100.0% Automobiles Manufacturing; 13.02% Communications Equipment; 3.98% Banks; 34.34% Property & Casualty Insurance; 0.90%Financial Services; 12.21%Railroad; 1.88% Electrical Equipment Manufacturing; 4.98% Food & Beverage; 1.18% Retail -Consumer Discretionary; 5.89% Software & Services; 6.56% Machinery Manufacturing; 0.67% Consumer Products; 1.59% Mass Merchants; 5.60% Entertainment Content; 1.98% Specialty Finance; 0.97% Pharmaceuticals; 4.25% Industry Exposure 21 © PFM Ratings by Standard & Poor’s. Credit Quality —PFM Managed For the Quarter Ended June 30, 2019 Portfolio Review AAA AA A BBB A-1 NR 6/30/2019 2.9%77.5%9.7%1.7%6.4%1.8% 3/31/2019 1.8%76.1%11.5%1.7%8.2%0.7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 22 © PFM 1. Portfolio consists of the City of San Luis Obispo’s Operating Funds and Reserve Account. Cash is included in the 0-1 Year bucket. Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although t hey may be called prior to maturity. *Benchmark is composed of the ICE BAML 0-5 Year U.S. Treasury Index. Data from Bloomberg. Maturity Distribution —PFM Managed Portfolio vs. Benchmark For the Quarter Ended June 30, 2019 Portfolio Review 0-1 Year 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years Portfolio 23.9%21.3%25.9%13.6%15.2% Benchmark*21.9%25.8%21.4%15.3%15.7% 0% 5% 10% 15% 20% 25% 30% 1 23 © PFM Issuer Distribution —PFM Managed For the Quarter Ended June 30, 2019 Portfolio Review Ratings by Standard & Poor’s and Moody’s. *Financial securities rated “A” by S&P are rated “AA” by Fitch and /or Egan-Jones Rating Company. **General Electric corporate notes were downgraded to BBB+ by S&P, Moody’s and Fitch during the further quarter 2018. Issuer Name Investment Type % of Portfolio S&P Moody's U.S. Treasury Government 41.90%AA+Aaa FNMA Federal Agency 16.70%AA+Aaa FHLMC Federal Agency 5.20%AA+Aaa FHLB Federal Agency 2.70%AA+Aaa BNY Mellon Corporate Note 2.30%A A1 Swedbank NY Negotiable CD 1.90%AA-Aa2 Wal-Mart Stores Corporate Note 1.90%AA Aa2 Credit Agricole Commercial Paper 1.90%A-1 P-1 Bank of Montreal Chicago Negotiable CD 1.70%A-1 P-1 Westpac Banking Corp NY Negotiable CD 1.70%A-1+P-1 Bank of Nova Scotia Negotiable CD 1.70%A-1 P-1 General Electric Corporate Note 1.70%BBB+Baa1 Toyota Motor Credit Corp Asset-Backed 1.50%AA-Aa3 UBS AG Stamford CT Negotiable CD 1.40%A-1 P-1 Nordea Bank AB NY Negotiable CD 1.40%A-1+P-1 Pfizer Inc Corporate Note 1.40%AA A1 Apple Inc Corporate Note 1.30%AA+Aa1 American Honda Finance Corporate Note 1.30%A A2 Microsoft Corp Corporate Note 1.30%AAA Aaa Wells Fargo & Company Corporate Note 1.20%A-A2 Nissan Auto Receivables Asset-Backed 1.20%NR Aaa Home Depot Corporate Note 1.00%A A2 Amazon.com Inc Corporate Note 1.00%AA-A3 IBM Corporate Note 1.00%A A2 Walt Disney Company Corporate Note 0.70%A A2 Burlington North Corporate Note 0.60%A+A3 Hyundai Auto Receivables Trust Asset-Backed 0.40%AAA NR Proctor & Gamble Corporate Note 0.40%AA-Aa3 Hershey Company Corporate Note 0.40%A A1 CarMax Auto Owner Trust Asset-Backed 0.40%AAA NR Berkshire Hathaway Corporate Note 0.30%AA Aa2 Capital One Prime Auto Receivables Trust Asset-Backed 0.30%AAA Aaa John Deere Corporate Note 0.20%A A2 Unilever Corporate Note 0.10%A+A1 Ally Auto Receivables Trust Asset-Backed <0.1%NR Aaa Total 100% 24 © PFM Current Outlook and Strategy For the Quarter Ended June 30, 2019 Portfolio Review While we expect U.S. and global economic growth to moderate in the second half of the year amid elevated risks to the economy, we do not believe a recession is imminent. Our outlook for each of the major investment -grade fixed-income sectors are as follows: •Federal agency spreads are very tight and we expect them to remain so. Although callable agency spreads are wider than they have been in a while, the sharp downward move in rates has reduced the likelihood of outperformance . •As a result of the Fed’s more accommodative stance and our positive view of the corporate sector, we will maintain corporate allocations and seek to modestly extend the duration of our allocations, while remaining diligent in our issuer and security selection process. •ABS spreads have recently widened back to levels that offer attractive incremental income compared to government and credit alternatives. We will seek to maintain allocations. •Historically tight spreads have also reduced the range of high-quality, short-term credit issues that offer adequate incremental income to warrant purchase. Careful maturity selection around Fed meeting expectations will be an important consideration going forward, particularly with both the Treasury and credit yield curves inverted. 25 © PFM III. Appendix © PFM A. Consolidated Portfolio Information © PFM Portfolio Characteristics -Consolidated For the Quarter Ended June 30, 2019 Portfolio Review 1.Effective duration used in place of modified duration. Effective duration is the approximate percentage change in price for e ach 1% change in interest rates. Modified duration is a similar risk measure but it ignores how changes in rates will impact cash flows on bonds with embedded options such as callab le notes, MBS, or ABS. Effective duration takes into account the impact that changing interest rates has on cash flows (i.e., if interest rates fall and a callable bond is more likely to be called prior to its final maturity, the effective duration will decrease). 6/30/2019 3/31/2019 Average Maturity (yrs)1.34 1.33 Effective Duration1 1.24 1.26 Average Purchase Yield 1.90%1.87% Average Market Yield 1.75%2.01% Average Quality AA/Aa1 AA/Aa1 Total Market Value 131,856,218 131,472,016 28 © PFM Sector Distribution -Consolidated For the Quarter Ended June 30, 2019 Portfolio Review Sector distribution based on market value and excludes accrued interest. U.S. Treasury Federal Agency Comm. Paper Corporate Notes Negotiable CDs Asset- Backed Money Market Fund Money Market Rate Account LAIF Cash 6/30/2019 25.2%14.8%1.1%11.2%6.7%1.9%0.1%0.8%17.7%20.5% 3/31/2019 24.8%15.3%1.9%9.8%8.0%0.6%0.1%0.8%17.6%21.2% 0% 5% 10% 15% 20% 25% 30% 29 © PFM Maturity Distribution -Consolidated For the Quarter Ended June 30, 2019 Portfolio Review Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although t hey may be called prior to maturity. Overnight - 3 Months 3 - 6 Months 6 Months - 1 Year 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years 6/30/2019 42.6%3.8%7.6%12.9%15.7%8.2%9.2% 3/31/2019 41.8%5.2%6.3%15.3%13.0%11.1%7.3% 0% 10% 20% 30% 40% 50% 30 © PFM Issuer Distribution -Consolidated For the Quarter Ended June 30, 2019 Portfolio Review Ratings by Standard & Poor’s and Moody’s. *General Electric corporate notes were downgraded to BBB+ by S&P, Moody’s, and Fitch during the fourth quarter 2018. Issuer Name Investment Type % of Portfolio S&P Moody's U.S. Treasury Government 25.20%AA+Aaa Cash Cash 20.50%NR NR LAIF LAIF 17.70%NR NR FNMA Federal Agency 10.00%AA+Aaa FHLMC Federal Agency 3.10%AA+Aaa FHLB Federal Agency 1.60%AA+Aaa BNY Mellon Corporate Note 1.40%A A1 Swedbank NY Negotiable CD 1.20%AA-Aa2 Wal-Mart Stores Corporate Note 1.10%AA Aa2 Credit Agricole Commercial Paper 1.10%A-1 P-1 Bank Of Montreal Chicago Negotiable CD 1.00%A-1 P-1 Westpac Banking Corp NY Negotiable CD 1.00%A-1+P-1 Bank of Nova Scotia Negotiable CD 1.00%A-1 P-1 General Electric Corporate Note 1.00%BBB+Baa1 Toyota Motor Credit Corp Asset-Backed 0.90%AA-Aa3 UBS AG Stamford CT Negotiable CD 0.90%A-1 P-1 Nordea Bank AB NY Negotiable CD 0.90%A-1+P-1 Pfizer Inc. Corporate Note 0.90%AA-A1 Apple Inc Corporate Note 0.80%AA+Aa1 American Honda Finance Corporate Note 0.80%A A2 Pacific Premier Bank Money Market Rate Account 0.80%NR NR Pacific Premier Bank Negotiable CD 0.80%NR NR Microsoft Corp Corporate Note 0.80%AAA Aaa Wells Fargo & Company Corporate Note 0.70%A-A2 Nissan Auto Receivables Asset-Backed 0.70%NR Aaa Home Depot Corporate Note 0.60%A A2 Amazon.com, Inc.Corporate Note 0.60%AA-A3 IBM Corporate Note 0.60%A A2 Walt Disney Company Corporate Note 0.40%A A2 Burlington North Corporate Note 0.40%A+A3 Hyundai Auto Receivables Trust Asset-Backed 0.30%AAA NR Proctor & Gamble Corporate Note 0.20%AA-Aa3 Hershey Company Corporate Note 0.20%A A1 CarMax Asset-Backed 0.20%AAA NR Berkshire Hathaway Corporate Note 0.20%AA Aa2 Copart, Inc.Asset-Backed 0.20%AAA Aaa John Deere Corporate Note 0.10%A A2 Unilever Corporate Note 0.10%A+A1 Ally Auto Receivables Trust Asset-Backed <0.1%NR Aaa Total 100.0% 31 © PFM B. Investment Policy Snapshot © PFM Category Standard In Compliance Treasury Obligations 5 year maximum maturity Yes Government Sponsored Enterprise (GSE) Securities 5 year maximum maturity Yes Corporate Notes 5 year maximum maturity At least an “A” rating, its equivalent or better by one or more NRSROs 30% maximum,5% per issuer Yes Asset Backed Security 5 year maximum maturity At least a “AAA” or better 15% Maximum, 2.5% per issuer Yes Local Government Investment Pool (LAIF)Up to maximum permitted by State Law Yes Negotiable Certificates of Deposit 5 year maximum maturity At least an “A” rating, its equivalent or better by one or more NRSROs 30% maximum,5% per issuer Yes Commercial Paper 270 day maximum maturity At least one “A-1” rating 40% maximum,10% per issuer Yes Collateralized Bank Deposits 25% maximum, 5% per issuer Yes Money Market Mutual Funds Highest rating category by 2 NRSROs 20% maximum,10% per issuer Yes Maximum maturity 10 years; 10% maximum of portfolio in Treasury and GSE obligations with maturity >5 years Yes Duration limit Duration of portfolio equal duration of benchmark plus or minus 10%Yes Social responsibility No investments in companies involved in tobacco, electronic cigarettes, or the direct production or drilling of fossil fuels Yes Applies to aggregate portfolio. Source: City of San Luis Obispo Investment Management Plan, 2018. Investment Policy Snapshot The portfolio complies with California Government Code and the City of San Luis Obispo’s Investment Policy in regards to credit quality, maturity, sector, and issuer limits. For the Quarter Ended June 30, 2019 Portfolio Review 33 © PFM C. Portfolio Holdings CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Holdings Managed Account Detail of Securities Held Original Cost Settle Date Trade Date Moody's Rating S&P Rating Accrued Interest Amortized Cost Market Value YTM at Cost Security Type/Description CUSIP ParDated Date/Coupon/Maturity U.S. Treasury Bond / Note AA+Aaa 11/9/2018 11/13/2018 569,125.00 3,024.17 574,742.54 577,145.242.83US TREASURY NOTES DTD 02/02/2015 1.250% 01/31/2020 912828H52 580,000.00 AA+ Aaa 2/1/2016 2/3/2016 562,953.13 1,297.28 560,591.96 557,047.121.25US TREASURY NOTES DTD 04/30/2015 1.375% 04/30/2020 912828K58 560,000.00 AA+ Aaa 12/2/2015 12/4/2015 595,195.31 698.77 598,993.33 596,531.401.56US TREASURY NOTES DTD 05/31/2013 1.375% 05/31/2020 912828VF4 600,000.00 AA+ Aaa 3/29/2016 3/30/2016 695,275.00 4,643.15 687,618.43 682,725.801.27US TREASURY NOTES DTD 07/31/2015 1.625% 07/31/2020 912828XM7 685,000.00 AA+ Aaa 10/1/2018 10/1/2018 1,290,775.39 3,081.05 1,304,664.03 1,321,376.282.84US TREASURY NOTES DTD 10/31/2015 1.375% 10/31/2020 912828L99 1,330,000.00 AA+ Aaa 4/2/2019 4/4/2019 524,220.70 4,437.85 524,323.95 528,568.432.33US TREASURY N/B NOTES DTD 02/15/2018 2.250% 02/15/2021 9128283X6 525,000.00 AA+ Aaa 10/3/2016 10/5/2016 751,394.53 4,846.47 735,141.29 727,180.801.15US TREASURY NOTES DTD 02/28/2014 2.000% 02/28/2021 912828B90 725,000.00 AA+ Aaa 7/6/2017 7/7/2017 373,869.53 442.55 376,936.23 377,150.001.81US TREASURY NOTES DTD 05/31/2016 1.375% 05/31/2021 912828R77 380,000.00 AA+ Aaa 11/22/2016 11/23/2016 357,437.50 3,284.88 353,382.37 353,472.701.78US TREASURY NOTES DTD 07/31/2014 2.250% 07/31/2021 912828WY2 350,000.00 AA+ Aaa 12/1/2016 12/5/2016 501,757.81 3,342.39 500,826.42 502,656.001.92US TREASURY NOTES DTD 09/02/2014 2.000% 08/31/2021 912828D72 500,000.00 AA+ Aaa 1/3/2017 1/5/2017 1,002,226.56 3,369.57 1,001,108.88 1,006,055.001.95US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 912828F96 1,000,000.00 AA+ Aaa 4/3/2017 4/5/2017 1,152,111.52 3,858.15 1,148,706.41 1,151,932.981.86US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 912828F96 1,145,000.00 AA+ Aaa 3/1/2018 3/5/2018 1,376,867.19 4,717.39 1,385,019.44 1,408,477.002.48US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 912828F96 1,400,000.00 AA+ Aaa 11/1/2017 11/3/2017 745,107.42 1,111.68 747,056.24 750,234.001.92US TREASURY NOTES DTD 11/30/2016 1.750% 11/30/2021 912828U65 750,000.00 AA+ Aaa 7/6/2017 7/11/2017 1,543,370.51 12,083.65 1,544,062.88 1,550,432.221.90US TREASURY NOTES DTD 01/31/2017 1.875% 01/31/2022 912828V72 1,545,000.00 PFM Asset Management LLC 35 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Holdings Managed Account Detail of Securities Held Original Cost Settle Date Trade Date Moody's Rating S&P Rating Accrued Interest Amortized Cost Market Value YTM at Cost Security Type/Description CUSIP ParDated Date/Coupon/Maturity U.S. Treasury Bond / Note AA+Aaa 3/15/2017 3/17/2017 358,270.31 2,134.95 361,291.95 365,228.132.14US TREASURY NOTES DTD 03/02/2015 1.750% 02/28/2022 912828J43 365,000.00 AA+ Aaa 9/4/2018 9/6/2018 2,023,508.79 9,826.84 2,037,099.88 2,094,203.192.75US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 912828W89 2,085,000.00 AA+ Aaa 8/1/2018 8/3/2018 1,798,968.75 8,766.39 1,813,601.18 1,868,210.042.82US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 912828W89 1,860,000.00 AA+ Aaa 12/1/2017 12/5/2017 1,188,796.88 5,655.74 1,192,763.66 1,205,296.802.10US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 912828W89 1,200,000.00 AA+ Aaa 1/3/2018 1/4/2018 1,284,105.47 6,127.05 1,289,535.01 1,305,738.202.18US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 912828W89 1,300,000.00 AA+ Aaa 11/1/2017 11/3/2017 790,093.36 6,217.80 791,763.79 798,571.142.01US TREASURY NOTES DTD 07/31/2017 1.875% 07/31/2022 9128282P4 795,000.00 AA+ Aaa 8/30/2017 9/1/2017 2,126,003.91 17,519.34 2,116,580.97 2,117,390.101.74US TREASURY NOTES DTD 07/31/2015 2.000% 07/31/2022 912828XQ8 2,100,000.00 AA+ Aaa 10/3/2017 10/6/2017 495,742.19 2,199.45 497,179.37 500,351.501.93US TREASURY NOTES DTD 09/30/2015 1.750% 09/30/2022 912828L57 500,000.00 AA+ Aaa 6/4/2018 6/6/2018 1,189,382.81 5,454.64 1,201,379.98 1,240,871.722.76US TREASURY NOTES DTD 09/30/2015 1.750% 09/30/2022 912828L57 1,240,000.00 AA+ Aaa 5/2/2018 5/4/2018 1,773,785.55 6,183.15 1,788,860.63 1,851,056.252.80US TREASURY N/B NOTES DTD 10/31/2017 2.000% 10/31/2022 9128283C2 1,835,000.00 AA+ Aaa 7/2/2018 7/5/2018 402,089.84 2,130.77 406,725.43 421,596.602.74US TREASURY NOTES DTD 02/29/2016 1.500% 02/28/2023 912828P79 425,000.00 AA+ Aaa 2/8/2019 2/12/2019 809,057.81 3,167.21 811,793.20 833,011.202.44US TREASURY NOTES DTD 03/31/2016 1.500% 03/31/2023 912828Q29 840,000.00 AA+ Aaa 2/8/2019 2/12/2019 812,216.60 4,458.05 815,720.05 838,567.762.44US TREASURY NOTES DTD 08/01/2016 1.250% 07/31/2023 912828S92 855,000.00 AA+ Aaa 5/1/2019 5/3/2019 785,111.13 5,528.48 784,411.60 800,291.752.25UNITED STATES TREASURY NOTES DTD 10/01/2018 2.875% 09/30/2023 9128285D8 765,000.00 AA+ Aaa 3/6/2019 3/8/2019 1,545,479.30 5,373.71 1,544,520.43 1,594,307.432.52US TREASURY NOTES DTD 11/15/2013 2.750% 11/15/2023 912828WE6 1,530,000.00 PFM Asset Management LLC 36 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Holdings Managed Account Detail of Securities Held Original Cost Settle Date Trade Date Moody's Rating S&P Rating Accrued Interest Amortized Cost Market Value YTM at Cost Security Type/Description CUSIP ParDated Date/Coupon/Maturity U.S. Treasury Bond / Note AA+Aaa 1/7/2019 1/9/2019 2,145,908.98 3,932.70 2,149,524.45 2,219,909.752.52US TREASURY NOTES DTD 11/30/2016 2.125% 11/30/2023 912828U57 2,185,000.00 AA+ Aaa 1/30/2019 1/31/2019 75,222.66 5.35 75,205.64 77,824.202.56US TREASURY N/B DTD 12/31/2018 2.625% 12/31/2023 9128285U0 75,000.00 AA+ Aaa 6/3/2019 6/5/2019 1,044,712.50 3,504.35 1,044,648.69 1,051,333.921.90US TREASURY N/B NOTES DTD 05/01/2017 2.000% 04/30/2024 912828X70 1,040,000.00 2.26 33,274,744.65 32,765,780.31 152,424.97 33,070,000.00 32,690,143.94Security Type Sub-Total Federal Agency Bond / Note AA+ Aaa 7/19/2016 7/20/2016 274,334.50 1,082.81 274,988.77 274,777.530.96FHLMC REFERENCE NOTE DTD 07/20/2016 0.875% 07/19/2019 3137EAEB1 275,000.00 AA+ Aaa 9/15/2014 9/15/2014 533,802.50 2,864.58 549,711.83 549,539.101.88FREDDIE MAC GLOBAL NOTES DTD 07/30/2012 1.250% 08/01/2019 3137EADK2 550,000.00 AA+ Aaa 7/29/2016 8/2/2016 2,346,052.00 8,510.59 2,349,885.37 2,347,151.800.93FNMA BENCHMARK NOTE DTD 08/02/2016 0.875% 08/02/2019 3135G0N33 2,350,000.00 AA+ Aaa 7/18/2017 7/19/2017 354,478.15 1,844.03 354,968.81 354,621.571.45FREDDIE MAC NOTES DTD 07/19/2017 1.375% 08/15/2019 3137EAEH8 355,000.00 AA+ Aaa 2/4/2015 2/9/2015 264,505.80 1,377.64 260,198.99 259,732.201.36FNMA NOTES DTD 07/28/2014 1.750% 09/12/2019 3135G0ZG1 260,000.00 AA+ Aaa 12/28/2015 12/30/2015 689,857.00 2,163.19 699,299.22 698,302.501.65FREDDIE MAC GLOBAL NOTES DTD 10/02/2012 1.250% 10/02/2019 3137EADM8 700,000.00 AA+ Aaa 11/16/2016 11/17/2016 1,394,679.15 2,450.94 1,394,959.38 1,391,177.701.38FHLB NOTES DTD 11/17/2016 1.375% 11/15/2019 3130AA3R7 1,395,000.00 AA+ Aaa 2/24/2017 2/28/2017 884,433.60 4,535.63 884,873.57 881,598.951.52FNMA NOTES DTD 02/28/2017 1.500% 02/28/2020 3135G0T29 885,000.00 AA+ Aaa 4/19/2017 4/20/2017 1,161,015.70 3,159.25 1,163,916.96 1,159,084.131.49FHLMC AGENCY NOTES DTD 04/20/2017 1.375% 04/20/2020 3137EAEF2 1,165,000.00 AA+ Aaa 7/28/2017 8/1/2017 1,460,561.05 9,217.29 1,463,375.43 1,457,686.721.60FNMA NOTES DTD 08/01/2017 1.500% 07/30/2020 3135G0T60 1,465,000.00 PFM Asset Management LLC 37 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Holdings Managed Account Detail of Securities Held Original Cost Settle Date Trade Date Moody's Rating S&P Rating Accrued Interest Amortized Cost Market Value YTM at Cost Security Type/Description CUSIP ParDated Date/Coupon/Maturity Federal Agency Bond / Note AA+Aaa 7/2/2018 7/5/2018 991,780.00 8,906.25 994,832.97 1,008,659.002.70FREDDIE MAC NOTES DTD 02/16/2018 2.375% 02/16/2021 3137EAEL9 1,000,000.00 AA+ Aaa 5/18/2016 5/19/2016 518,850.80 2,482.64 519,594.14 516,001.201.42FNMA NOTES DTD 02/05/2016 1.375% 02/26/2021 3135G0J20 520,000.00 AA+ Aaa 4/12/2018 4/13/2018 748,882.50 4,062.50 749,325.77 758,748.752.55FANNIE MAE NOTES DTD 04/13/2018 2.500% 04/13/2021 3135G0U27 750,000.00 AA+ Aaa 8/17/2016 8/19/2016 323,888.18 1,512.15 324,517.42 321,310.601.32FNMA NOTES DTD 08/19/2016 1.250% 08/17/2021 3135G0N82 325,000.00 AA+ Aaa 8/17/2016 8/19/2016 756,922.00 3,536.11 758,663.78 751,372.481.33FNMA NOTES DTD 08/19/2016 1.250% 08/17/2021 3135G0N82 760,000.00 AA+ Aaa 9/1/2016 9/2/2016 993,880.00 4,652.78 997,323.52 988,648.001.38FNMA NOTES DTD 08/19/2016 1.250% 08/17/2021 3135G0N82 1,000,000.00 AA+ Aaa 6/27/2017 6/29/2017 2,249,281.65 21,853.33 2,243,088.26 2,246,724.811.85FANNIE MAE NOTES DTD 01/09/2017 2.000% 01/05/2022 3135G0S38 2,235,000.00 AA+ Aaa 1/9/2019 1/11/2019 554,600.40 6,879.69 554,661.25 566,525.692.65FANNIE MAE NOTES DTD 01/11/2019 2.625% 01/11/2022 3135G0U92 555,000.00 AA+ Aaa 11/29/2018 11/30/2018 1,562,573.90 13,666.63 1,563,464.04 1,635,144.012.98FANNIE MAE NOTES DTD 09/14/2018 2.875% 09/12/2023 3135G0U43 1,570,000.00 AA+ Aaa 1/30/2019 1/31/2019 576,744.00 1,207.50 575,401.61 595,767.762.71FEDERAL HOME LOAN BANKS NOTES DTD 12/09/2013 3.375% 12/08/2023 3130A0F70 560,000.00 AA+ Aaa 2/7/2019 2/8/2019 438,363.20 4,369.44 438,485.65 453,221.562.58FANNIE MAE NOTES DTD 02/08/2019 2.500% 02/05/2024 3135G0V34 440,000.00 AA+ Aaa 2/14/2019 2/15/2019 119,575.20 1,133.33 119,605.44 123,696.722.58FHLB BONDS DTD 02/15/2019 2.500% 02/13/2024 3130AFW94 120,000.00 1.79 19,339,492.78 19,235,142.18 111,468.30 19,235,000.00 19,199,061.28Security Type Sub-Total Corporate Note AA- Aa3 2/10/2017 2/15/2017 644,940.80 6,157.78 640,097.95 639,934.081.80TOYOTA MOTOR CREDIT CORP NOTES DTD 07/18/2014 2.125% 07/18/2019 89236TBP9 640,000.00 PFM Asset Management LLC 38 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Holdings Managed Account Detail of Securities Held Original Cost Settle Date Trade Date Moody's Rating S&P Rating Accrued Interest Amortized Cost Market Value YTM at Cost Security Type/Description CUSIP ParDated Date/Coupon/Maturity Corporate Note AA Aa2 8/8/2016 8/15/2016 239,767.20 1,178.67 239,990.36 239,717.281.33BERKSHIRE HATHAWAY INC CORPORATE NOTES DTD 08/15/2016 1.300% 08/15/2019 084664CK5 240,000.00 A+ A3 6/3/2016 6/8/2016 551,950.00 5,875.00 504,001.40 502,549.501.48BURLINGTON NRTH CORP NOTE DTD 09/24/2009 4.700% 10/01/2019 12189TBC7 500,000.00 AAA Aaa 4/8/2015 4/13/2015 1,012,570.00 7,143.06 1,001,452.89 998,041.001.58MICROSOFT CORP (CALLABLE) NOTE DTD 02/12/2015 1.850% 02/12/2020 594918AY0 1,000,000.00 BBB+ Baa1 9/25/2017 9/27/2017 1,422,486.00 11,423.75 1,340,229.76 1,329,978.001.83GENERAL ELECTRIC CO CORPORATE NOTE DTD 04/27/2007 5.550% 05/04/2020 36962G2T0 1,300,000.00 A+ A1 5/2/2017 5/5/2017 104,665.05 294.00 104,903.84 104,604.891.91UNILEVER CAPITAL CORP BONDS DTD 05/05/2017 1.800% 05/05/2020 904764AV9 105,000.00 A A2 6/19/2017 6/22/2017 179,890.20 87.75 179,963.61 179,538.121.97JOHN DEERE CAPITAL CORP NOTES DTD 06/22/2017 1.950% 06/22/2020 24422ETS8 180,000.00 A A1 6/3/2016 6/8/2016 990,316.80 9,290.67 967,926.02 964,970.881.81BNY MELLON CORP NOTE (CALLABLE) DTD 08/17/2015 2.600% 08/17/2020 06406HDD8 960,000.00 AA- Aa3 10/23/2017 10/25/2017 319,510.40 1,148.44 319,782.14 319,845.441.95THE PROCTER & GAMBLE CO CORP NOTES DTD 10/25/2017 1.900% 10/23/2020 742718FA2 320,000.00 A A1 8/15/2016 8/18/2016 891,564.15 2,001.51 873,588.02 868,441.841.70BONY MELLON CORP NOTE (CALLABLE) DTD 11/27/2015 2.450% 11/27/2020 06406HDF3 865,000.00 A- A2 6/3/2016 6/8/2016 997,191.00 1,657.50 982,289.98 977,732.932.02WELLS FARGO & COMPANY NOTES DTD 12/07/2015 2.550% 12/07/2020 94974BGR5 975,000.00 AA Aa2 10/11/2017 10/20/2017 1,497,825.00 1,266.67 1,498,972.62 1,497,306.001.95WAL-MART STORES INC CORP NOTE DTD 10/20/2017 1.900% 12/15/2020 931142EA7 1,500,000.00 AA- Aa3 1/3/2019 1/8/2019 434,739.00 6,375.77 434,800.28 440,980.823.08TOYOTA MOTOR CREDIT CORP CORP NOTES DTD 01/08/2019 3.050% 01/08/2021 89236TFQ3 435,000.00 PFM Asset Management LLC 39 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Holdings Managed Account Detail of Securities Held Original Cost Settle Date Trade Date Moody's Rating S&P Rating Accrued Interest Amortized Cost Market Value YTM at Cost Security Type/Description CUSIP ParDated Date/Coupon/Maturity Corporate Note A A1 5/3/2018 5/10/2018 309,786.10 1,227.94 309,864.20 315,309.063.12HERSHEY COMPANY CORP NOTES DTD 05/10/2018 3.100% 05/15/2021 427866BA5 310,000.00 A A2 2/21/2019 2/25/2019 387,588.00 2,115.56 389,249.90 395,402.402.98AMERICAN HONDA FINANCE CORP NOTES DTD 09/09/2016 1.700% 09/09/2021 02665WBG5 400,000.00 A A1 2/1/2017 2/3/2017 751,575.00 8,020.83 750,837.71 754,930.502.45IBM CORP BONDS DTD 01/27/2017 2.500% 01/27/2022 459200JQ5 750,000.00 AA+ Aa1 1/7/2019 1/9/2019 1,034,418.00 10,354.17 1,036,754.25 1,062,617.853.01APPLE INC CORP NOTES DTD 02/09/2017 2.500% 02/09/2022 037833CM0 1,050,000.00 A A2 4/3/2018 4/5/2018 508,599.00 1,028.13 512,747.90 528,657.683.07WALT DISNEY COMPANY/THE CORP NOTES DTD 11/30/2012 2.350% 12/01/2022 25468PCW4 525,000.00 AA- A3 5/21/2019 5/23/2019 767,079.50 6,665.00 767,298.55 782,519.052.69AMAZON.COM INC BONDS DTD 06/06/2018 2.400% 02/22/2023 023135AW6 775,000.00 A A2 4/3/2018 4/5/2018 760,275.00 5,231.25 763,726.69 792,116.653.11HOME DEPOT INC CORP NOTES DTD 04/05/2013 2.700% 04/01/2023 437076AZ5 775,000.00 AA A1 4/2/2019 4/4/2019 1,113,453.00 9,915.28 1,112,841.70 1,134,026.302.68PFIZER INC CORP NOTES DTD 03/11/2019 2.950% 03/15/2024 717081ES8 1,100,000.00 2.25 14,829,220.27 14,731,319.77 98,458.73 14,705,000.00 14,920,189.20Security Type Sub-Total Commercial Paper A-1 P-1 4/8/2019 4/9/2019 1,472,812.50 0.00 1,481,458.34 1,483,936.502.55CREDIT AGRICOLE CIB NY COMM PAPER DTD 04/08/2019 0.000% 12/26/2019 22533UZS5 1,500,000.00 2.55 1,483,936.50 1,481,458.34 0.00 1,500,000.00 1,472,812.50Security Type Sub-Total Certificate of Deposit A-1+ P-1 2/20/2018 2/22/2018 1,145,000.00 11,332.96 1,145,000.00 1,149,113.992.72NORDEA BANK AB NY CD DTD 02/22/2018 2.720% 02/20/2020 65590ASN7 1,145,000.00 PFM Asset Management LLC 40 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Holdings Managed Account Detail of Securities Held Original Cost Settle Date Trade Date Moody's Rating S&P Rating Accrued Interest Amortized Cost Market Value YTM at Cost Security Type/Description CUSIP ParDated Date/Coupon/Maturity Certificate of Deposit A-1 P-1 3/2/2018 3/6/2018 1,145,000.00 10,976.10 1,145,000.00 1,150,066.632.93UBS AG STAMFORD CT LT CD DTD 03/06/2018 2.900% 03/02/2020 90275DHG8 1,145,000.00 A-1 P-1 6/5/2018 6/7/2018 1,329,494.60 2,958.51 1,329,760.35 1,341,156.043.10BANK OF NOVA SCOTIA HOUSTON CD DTD 06/07/2018 3.080% 06/05/2020 06417GU22 1,330,000.00 A+ Aa2 8/1/2018 8/3/2018 1,350,000.00 39,715.50 1,350,000.00 1,359,387.903.23BANK OF MONTREAL CHICAGO CERT DEPOS DTD 08/03/2018 3.190% 08/03/2020 06370REU9 1,350,000.00 AA- Aa3 8/3/2017 8/7/2017 1,345,000.00 11,029.00 1,345,000.00 1,343,121.042.05WESTPAC BANKING CORP NY CD DTD 08/07/2017 2.050% 08/03/2020 96121T4A3 1,345,000.00 AA- Aa2 11/16/2017 11/17/2017 1,525,000.00 4,423.35 1,525,000.00 1,520,504.302.30SWEDBANK (NEW YORK) CERT DEPOS DTD 11/17/2017 2.270% 11/16/2020 87019U6D6 1,525,000.00 2.71 7,863,349.90 7,839,760.35 80,435.42 7,840,000.00 7,839,494.60Security Type Sub-Total Asset-Backed Security AAA NR 2/19/2019 2/27/2019 209,994.37 214.61 209,994.92 213,019.612.83HAROT 2019-1 A3 DTD 02/27/2019 2.830% 03/20/2023 43814WAC9 210,000.00 AAA NR 4/3/2019 4/10/2019 334,955.91 396.04 334,958.43 338,531.742.67HYUNDAI AUTO RECEIVABLES TRUST DTD 04/10/2019 2.660% 06/15/2023 44932NAD2 335,000.00 NR Aaa 5/21/2019 5/29/2019 409,984.71 287.00 409,985.13 414,598.932.52HAROT 2019-2 A3 DTD 05/29/2019 2.520% 06/21/2023 43815MAC0 410,000.00 AAA Aaa 2/5/2019 2/13/2019 79,985.42 103.47 79,986.67 81,195.532.92TAOT 2019-A A3 DTD 02/13/2019 2.910% 07/15/2023 89239AAD5 80,000.00 NR Aaa 2/5/2019 2/13/2019 34,995.77 45.27 34,996.12 35,646.453.13ALLYA 2019-1 A3 DTD 02/13/2019 2.910% 09/15/2023 02004WAC5 35,000.00 NR Aaa 2/5/2019 2/13/2019 499,924.25 644.44 499,930.39 508,868.752.91NAROT 2019-A A3 DTD 02/13/2019 2.900% 10/15/2023 65479KAD2 500,000.00 NR Aaa 5/21/2019 5/28/2019 439,900.52 488.89 439,901.98 444,848.762.51NAROT 2019-B A3 DTD 05/28/2019 2.500% 11/15/2023 65479HAC1 440,000.00 PFM Asset Management LLC 41 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Holdings Managed Account Detail of Securities Held Original Cost Settle Date Trade Date Moody's Rating S&P Rating Accrued Interest Amortized Cost Market Value YTM at Cost Security Type/Description CUSIP ParDated Date/Coupon/Maturity Asset-Backed Security AAA Aaa 5/21/2019 5/30/2019 219,955.43 245.42 219,955.99 222,492.402.52COPAR 2019-1 A3 DTD 05/30/2019 2.510% 11/15/2023 14042WAC4 220,000.00 AAA NR 4/9/2019 4/17/2019 274,971.90 327.56 274,973.04 278,678.292.90CARMX 2019-2 A3 DTD 04/17/2019 2.680% 03/15/2024 14316LAC7 275,000.00 2.71 2,537,880.46 2,504,682.67 2,752.70 2,505,000.00 2,504,668.28Security Type Sub-Total 78,626,369.80 78,855,000.00 445,540.12 78,558,143.62 79,328,624.56 2.21 Managed Account Sub Total $445,540.12 $78,558,143.62 $79,328,624.56 Securities Sub-Total Accrued Interest $445,540.12 Total Investments $79,774,164.68 2.21%$78,855,000.00 $78,626,369.80 Bolded items are forward settling trades. PFM Asset Management LLC 42 CITY OF SAN LUIS OBISPO RESERVE ACCOUNT For the Quarter Ended June 30, 2019 Account Activity Managed Account Detail of Securities Held Original Cost Settle Date Trade Date Moody's Rating S&P Rating Accrued Interest Amortized Cost Market Value YTM at Cost Security Type/Description CUSIP ParDated Date/Coupon/Maturity Federal Agency Bond / Note AA+ Aaa 11/25/2014 11/25/2014 78,388.80 416.67 79,970.32 79,932.961.70FREDDIE MAC GLOBAL NOTES DTD 07/30/2012 1.250% 08/01/2019 3137EADK2 80,000.00 AA+ Aaa 11/25/2014 11/25/2014 50,034.65 264.93 50,001.50 49,948.501.73FNMA NOTES DTD 07/28/2014 1.750% 09/12/2019 3135G0ZG1 50,000.00 1.71 129,881.46 129,971.82 681.60 130,000.00 128,423.45Security Type Sub-Total 128,423.45 130,000.00 681.60 129,971.82 129,881.46 1.71 Managed Account Sub Total $681.60 $129,971.82 $129,881.46 Securities Sub-Total Accrued Interest $681.60 Total Investments $130,563.06 1.71%$130,000.00 $128,423.45 Bolded items are forward settling trades. PFM Asset Management LLC 43 © PFM D. Quarterly Transactions CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Activity Quarterly Portfolio Transactions Trade Date Settle Date Maturity DatePar ($) CUSIP Security Description Transact Amt ($) Yield at Market Realized G/L (BV)Coupon BUY 4/2/19 4/4/19 1,100,000 717081ES8 PFIZER INC CORP NOTES 3/15/24 1,115,526.19 2.68%2.95% 4/2/19 4/4/19 525,000 9128283X6 US TREASURY N/B NOTES 2/15/21 525,787.00 2.33%2.25% 4/3/19 4/10/19 335,000 44932NAD2 HYUNDAI AUTO RECEIVABLES TRUST 6/15/23 334,955.91 2.67%2.66% 4/8/19 4/9/19 1,500,000 22533UZS5 CREDIT AGRICOLE CIB NY COMM PAPER 12/26/19 1,472,812.50 2.55%0.00% 4/9/19 4/17/19 275,000 14316LAC7 CARMX 2019-2 A3 3/15/24 274,971.90 2.90%2.68% 5/1/19 5/3/19 765,000 9128285D8 UNITED STATES TREASURY NOTES 9/30/23 787,094.17 2.25%2.87% 5/21/19 5/28/19 440,000 65479HAC1 NAROT 2019-B A3 11/15/23 439,900.52 2.51%2.50% 5/21/19 5/29/19 410,000 43815MAC0 HAROT 2019-2 A3 6/21/23 409,984.71 2.52%2.52% 5/21/19 5/30/19 220,000 14042WAC4 COPAR 2019-1 A3 11/15/23 219,955.43 2.52%2.51% 5/21/19 5/23/19 775,000 023135AW6 AMAZON.COM INC BONDS 2/22/23 771,781.17 2.69%2.40% 6/3/19 6/5/19 1,040,000 912828X70 US TREASURY N/B NOTES 4/30/24 1,046,747.28 1.90%2.00% 7,385,000 7,399,516.78Total BUY INTEREST 4/1/19 4/1/19 500,000 12189TBC7 BURLINGTON NRTH CORP NOTE 10/1/19 11,750.00 4.70% 4/1/19 4/1/19 775,000 437076AZ5 HOME DEPOT INC CORP NOTES 4/1/23 10,462.50 2.70% 4/2/19 4/2/19 0 MONEY0002 MONEY MARKET FUND 181.90 4/2/19 4/2/19 700,000 3137EADM8 FREDDIE MAC GLOBAL NOTES 10/2/19 4,375.00 1.25% 4/5/19 4/5/19 165,000 06417GUE6 BANK OF NOVA SCOTIA HOUSTON CD 4/5/19 1,593.26 1.91% 4/13/19 4/13/19 750,000 3135G0U27 FANNIE MAE NOTES 4/13/21 9,375.00 2.50% 4/15/19 4/15/19 35,000 02004WAC5 ALLYA 2019-1 A3 9/15/23 84.88 2.91% 4/15/19 4/15/19 500,000 65479KAD2 NAROT 2019-A A3 10/15/23 1,208.33 2.90% 4/15/19 4/15/19 80,000 89239AAD5 TAOT 2019-A A3 7/15/23 194.00 2.91% 4/18/19 4/18/19 210,000 43814WAC9 HAROT 2019-1 A3 3/20/23 495.25 2.83% PFM Asset Management LLC 45 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Activity Trade Date Settle Date Maturity DatePar ($) CUSIP Security Description Transact Amt ($) Yield at Market Realized G/L (BV)Coupon 4/20/19 4/20/19 1,165,000 3137EAEF2 FHLMC AGENCY NOTES 4/20/20 8,009.38 1.37% 4/23/19 4/23/19 320,000 742718FA2 THE PROCTER & GAMBLE CO CORP NOTES 10/23/20 3,040.00 1.90% 4/30/19 4/30/19 1,835,000 9128283C2 US TREASURY N/B NOTES 10/31/22 18,350.00 2.00% 4/30/19 4/30/19 1,330,000 912828L99 US TREASURY NOTES 10/31/20 9,143.75 1.37% 4/30/19 4/30/19 1,145,000 912828F96 US TREASURY NOTES 10/31/21 11,450.00 2.00% 4/30/19 4/30/19 1,400,000 912828F96 US TREASURY NOTES 10/31/21 14,000.00 2.00% 4/30/19 4/30/19 560,000 912828K58 US TREASURY NOTES 4/30/20 3,850.00 1.37% 4/30/19 4/30/19 1,000,000 912828F96 US TREASURY NOTES 10/31/21 10,000.00 2.00% 5/2/19 5/2/19 0 MONEY0002 MONEY MARKET FUND 659.59 5/4/19 5/4/19 1,300,000 36962G2T0 GENERAL ELECTRIC CO CORPORATE NOTE 5/4/20 36,075.00 5.55% 5/5/19 5/5/19 105,000 904764AV9 UNILEVER CAPITAL CORP BONDS 5/5/20 945.00 1.80% 5/15/19 5/15/19 80,000 89239AAD5 TAOT 2019-A A3 7/15/23 194.00 2.91% 5/15/19 5/15/19 310,000 427866BA5 HERSHEY COMPANY CORP NOTES 5/15/21 4,805.00 3.10% 5/15/19 5/15/19 35,000 02004WAC5 ALLYA 2019-1 A3 9/15/23 84.88 2.91% 5/15/19 5/15/19 500,000 65479KAD2 NAROT 2019-A A3 10/15/23 1,208.33 2.90% 5/15/19 5/15/19 335,000 44932NAD2 HYUNDAI AUTO RECEIVABLES TRUST 6/15/23 866.35 2.66% 5/15/19 5/15/19 275,000 14316LAC7 CARMX 2019-2 A3 3/15/24 573.22 2.68% 5/15/19 5/15/19 1,530,000 912828WE6 US TREASURY NOTES 11/15/23 21,037.50 2.75% 5/15/19 5/15/19 1,395,000 3130AA3R7 FHLB NOTES 11/15/19 9,590.63 1.37% 5/16/19 5/16/19 1,525,000 87019U6D6 SWEDBANK (NEW YORK) CERT DEPOS 11/16/20 17,404.91 2.27% 5/18/19 5/18/19 210,000 43814WAC9 HAROT 2019-1 A3 3/20/23 495.25 2.83% 5/27/19 5/27/19 865,000 06406HDF3 BONY MELLON CORP NOTE (CALLABLE)11/27/20 10,596.25 2.45% 5/31/19 5/31/19 600,000 912828VF4 US TREASURY NOTES 5/31/20 4,125.00 1.37% 5/31/19 5/31/19 2,185,000 912828U57 US TREASURY NOTES 11/30/23 23,215.63 2.12% 5/31/19 5/31/19 750,000 912828U65 US TREASURY NOTES 11/30/21 6,562.50 1.75% 5/31/19 5/31/19 380,000 912828R77 US TREASURY NOTES 5/31/21 2,612.50 1.37% 6/1/19 6/1/19 525,000 25468PCW4 WALT DISNEY COMPANY/THE CORP NOTES 12/1/22 6,168.75 2.35% 6/4/19 6/4/19 0 MONEY0002 MONEY MARKET FUND 212.17 6/5/19 6/5/19 1,330,000 06417GU22 BANK OF NOVA SCOTIA HOUSTON CD 6/5/20 20,482.00 3.08% 6/7/19 6/7/19 975,000 94974BGR5 WELLS FARGO & COMPANY NOTES 12/7/20 12,431.25 2.55% PFM Asset Management LLC 46 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Activity Trade Date Settle Date Maturity DatePar ($)CUSIP Security Description Transact Amt ($) Yield at Market Realized G/L (BV)Coupon 6/8/19 6/8/19 560,000 3130A0F70 FEDERAL HOME LOAN BANKS NOTES 12/8/23 9,450.00 3.37% 6/15/19 6/15/19 500,000 65479KAD2 NAROT 2019-A A3 10/15/23 1,208.33 2.90% 6/15/19 6/15/19 80,000 89239AAD5 TAOT 2019-A A3 7/15/23 194.00 2.91% 6/15/19 6/15/19 275,000 14316LAC7 CARMX 2019-2 A3 3/15/24 614.17 2.68% 6/15/19 6/15/19 335,000 44932NAD2 HYUNDAI AUTO RECEIVABLES TRUST 6/15/23 742.58 2.66% 6/15/19 6/15/19 35,000 02004WAC5 ALLYA 2019-1 A3 9/15/23 84.88 2.91% 6/15/19 6/15/19 1,500,000 931142EA7 WAL-MART STORES INC CORP NOTE 12/15/20 14,250.00 1.90% 6/15/19 6/15/19 220,000 14042WAC4 COPAR 2019-1 A3 11/15/23 230.08 2.51% 6/15/19 6/15/19 440,000 65479HAC1 NAROT 2019-B A3 11/15/23 519.44 2.50% 6/18/19 6/18/19 210,000 43814WAC9 HAROT 2019-1 A3 3/20/23 495.25 2.83% 6/21/19 6/21/19 410,000 43815MAC0 HAROT 2019-2 A3 6/21/23 631.40 2.52% 6/22/19 6/22/19 180,000 24422ETS8 JOHN DEERE CAPITAL CORP NOTES 6/22/20 1,755.00 1.95% 6/30/19 6/30/19 75,000 9128285U0 US TREASURY N/B 12/31/23 984.38 2.62% 32,500,000 329,068.47Total INTEREST MATURITY 4/5/19 4/5/19 165,000 06417GUE6 BANK OF NOVA SCOTIA HOUSTON CD 4/5/19 165,000.00 0.00 1.91% 4/8/19 4/8/19 1,500,000 22533UR88 CREDIT AGRICOLE CIB NY COMM PAPER 4/8/19 1,500,000.00 0.00 0.00% 6/5/19 6/5/19 1,000,000 62479MT52 MUFG BANK LTD/NY COMM PAPER 6/5/19 1,000,000.00 0.00 0.00% 2,665,000 2,665,000.00 0.00Total MATURITY SELL 4/2/19 4/4/19 1,500,000 83050FXT3 SKANDINAVISKA ENSKILDA BANKEN NY CD 8/2/19 1,500,793.13 2.60% (3,787.11)1.84% 4/3/19 4/8/19 335,000 912828WY2 US TREASURY NOTES 7/31/21 335,871.62 2.32% (4,113.93)2.25% 4/9/19 4/11/19 285,000 3135G0N82 FNMA NOTES 8/17/21 278,272.58 2.37% (6,709.20)1.25% 5/1/19 5/3/19 500,000 3137EADK2 FREDDIE MAC GLOBAL NOTES 8/1/19 500,097.22 2.48% (731.55)1.25% PFM Asset Management LLC 47 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended June 30, 2019 Portfolio Activity Trade Date Settle Date Maturity DatePar ($) CUSIP Security Description Transact Amt ($) Yield at Market Realized G/L (BV)Coupon 5/21/19 5/23/19 665,000 912828P79 US TREASURY NOTES 2/28/23 650,262.25 2.21% 12,364.13 1.50% 5/21/19 5/28/19 1,075,000 912828D72 US TREASURY NOTES 8/31/21 1,074,656.76 2.23% (7,393.89)2.00% 4,360,000 4,339,953.56 -10,371.55Total SELL PFM Asset Management LLC 48 CITY OF SAN LUIS OBISPO RESERVE ACCOUNT For the Quarter Ended June 30, 2019 Portfolio Activity Quarterly Portfolio Transactions Trade Date Settle Date Maturity DatePar ($)CUSIP Security Description Transact Amt ($) Yield at Market Realized G/L (BV)Coupon INTEREST 5/31/19 5/31/19 80,000 912828SX9 US TREASURY NOTES 5/31/19 450.00 1.12% 80,000 450.00Total INTEREST MATURITY 5/31/19 5/31/19 80,000 912828SX9 US TREASURY NOTES 5/31/19 80,000.00 0.00 1.12% 80,000 80,000.00 0.00Total MATURITY PFM Asset Management LLC 49 © PFM Important Disclosures This material is based on information obtained from sources generally believed to be reliable and available to the public, however PFM Asset Management LLC cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. All statements as to what will or may happen under certain circumstances are based on assumptions, some but not all of which are noted in the presentation. Assumptions may or may not be proven correct as actual events occur, and results may depend on events outside of your or our control. Changes in assumptions may have a material effect on results. Past performance does not necessarily reflect and is not a guaranty of future results. The information contained in this presentation is not an offer to purchase or sell any securities. •Market values which include accrued interest, are derived from closing bid prices as of the last business day of the month as supplied by Interactive Data, Bloomberg or Telerate. Where prices are not available from generally recognized sources the securities are priced using a yield based matrix system to arrive at an estimated market value. •In accordance with generally accepted accounting principles, information is presented on a trade date basis; forward settling purchases are included in the monthly balances and forward settling sales are excluded. •Performance is presented in accordance with the CFA Institute’s Global Investment Performance Standards (GIPS). Unless otherwise noted, performance is shown gross of fees. Quarterly returns are presented on an unannualized basis. Returns for periods greater than one year are presented on an annualized basis. Past performance is not indicative of future returns. •Bank of America/Merrill Lynch Indices provided by Bloomberg Financial Markets. •Money market fund/cash balances are included in performance and duration computations. •Standard & Poor’s is the source of the credit ratings. Distribution of credit rating is exclusive of money market fund/LGIP holdings. •Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although they may b e called prior to maturity. •MBS maturities are represented by expected average life. 50 © PFM Glossary •ACCRUED INTEREST: Interest that is due on a bond or other fixed income security since the last interest payment was made. •AGENCIES: Federal agency securities and/or Government-sponsored enterprises. •AMORTIZED COST: The original cost of the principal of the security is adjusted for the amount of the periodic reduction of any discount or pr emium from the purchase date until the date of the report. Discount or premium with respect to short term securities (those with less than one year to maturity at t ime of issuance) is amortized on a straight line basis. Such discount or premium with respect to longer term securities is amortized using the constant yield basis. •BANKERS’ ACCEPTANCE: A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the insurer. •COMMERCIAL PAPER: An unsecured obligation issued by a corporation or bank to finance its short-term credit needs, such as accounts receivable and inventory. •CONTRIBUTION TO DURATION: Represents each sector or maturity range’s relative contribution to the overall duration of the portfolio measured as a percentage weighting. Since duration is a key measure of interest rate sensitivity, the contribution to duration measures the relative amount or contribu tion of that sector or maturity range to the total rate sensitivity of the portfolio. •DURATION TO WORST: A measure of the sensitivity of a security’s price to a change in interest rates, stated in years, computed from cash flows t o the maturity date or to the put date, whichever results in the highest yield to the investor. •EFFECTIVE DURATION: A measure of the sensitivity of a security’s price to a change in interest rates, stated in years. •EFFECTIVE YIELD: The total yield an investor receives in relation to the nominal yield or coupon of a bond. Effective yield takes into account the power of compounding on investment returns, while nominal yield does not. •FDIC: Federal Deposit Insurance Corporation. A federal agency that insures bank deposits to a specified amount . •INTEREST RATE: Interest per year divided by principal amount, expressed as a percentage. •MARKET VALUE: The value that would be received or paid for an investment in an orderly transaction between market participants at the measu rement date. •MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. •NEGOTIABLE CERTIFICATES OF DEPOSIT: A CD with a very large denomination, usually $1 million or more that can be traded in secondary markets. •PAR VALUE: The nominal dollar face amount of a security. 51 © PFM Glossary •PASS THROUGH SECURITY: A security representing pooled debt obligations that passes income from debtors to its shareholders. The most common type is the mortgage-backed security. •REPURCHASE AGREEMENTS: A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. •SETTLE DATE: The date on which the transaction is settled and monies/securities are exchanged. If the settle date of the transaction occur s on a non- business day (i.e. coupon payments and maturity proceeds), the funds are exchanged on the next business day. •TRADE DATE: The date on which the transaction occurred however the final consummation of the security transaction and payment has not yet taken place. •UNSETTLED TRADE: A trade which has been executed however the final consummation of the security transaction and payment has not yet taken place. •U.S. TREASURY: The department of the U.S. government that issues Treasury securities. •YIELD: The rate of return based on the current market value, the annual interest receipts, maturity value and the time period remain ing until maturity, stated as a percentage, on an annualized basis. •YTM AT COST: The yield to maturity at cost is the expected rate of return, based on the original cost, the annual interest receipts, matur ity value and the time period from purchase date to maturity, stated as a percentage, on an annualized basis. •YTM AT MARKET: The yield to maturity at market is the rate of return, based on the current market value, the annual interest receipts, matur ity value and the time period remaining until maturity, stated as a percentage, on an annualized basis. 52 © PFM Thank You