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06-06-2019 IOC Agenda Packet
City of San Luis Obispo, Agenda, Planning Commission Agenda INVESTMENT OVERSIGHT COMMITTEE Thursday, June 6, 2019 1:30 p.m. REGULAR MEETING Council Hearing Room 990 Palm Street San Luis Obispo, CA OATH OF OFFICE Oath of Office Committee Members Daniel Humphrey and Debbie Malicoat 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: Monique S. Spyke, Managing Director for PFM Asset Management LLC 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 November 15, 2018. BUSINESS ITEMS 2.Presentation of the Quarterly Investment Report on Portfolio Performance Recommendation: Review and confirm investment policy compliance. Investment Oversight Committee Agenda for June 6, 2019 Page 2 3. Changes to Investment Policies Recommendation: Review and approve proposed changes. COMMENT AND DISCUSSION 4. Staff Updates and agenda forecast ADJOURNMENT The next Regular Meeting of the Investment Oversight Committee is scheduled for Thursday, August 15 , 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) 781-7144 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, November 15, 2018 Regular Meeting of the Investment Oversight Committee CALL TO ORDER A Regular meeting of the Investment Oversight Committee was called to order on Thursday, November 15, 2018, at 1:30 p.m. in the Council Hearing Room at 990 Palm Street, San Luis Obispo, California, by Chair Brigitte Elke. ROLL CALL Present: Committee Members Alex Ferreira, Heidi Harmon, Derek Johnson, Rico Pardo, Shay Stewart (Public Member), and Chair Brigitte Elke Absent: None. Others Present: Izac Chyou, Senior Managing Consultant 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 August 16, 2018: ACTION: UPON MOTION BY COMMITTEE MEMBER JOHNSON, SECONDED BY COMMITTEE MEMBER FERREIRA, CARRIED 6-0-0, to approve the minutes of August 16, 2018 minutes, as presented. BUSINESS ITEMS 2.Presentation of the Quarterly Investment Report on Portfolio Performance a.Review and confirm investment policy compliance City of San Luis Obispo, Title, Subtitle Minutes - Investment Oversight Committee Minutes of Thursday, November 15 2018 Page 2 Izac Chyou provided a PowerPoint presentation and responded to Committee inquiries. Public Comment None. --End of Public Comment-- ACTION: UPON MOTION BY COMMITTEE MEMBER JOHNSON, SECONDED BY COMMITTEE MEMBER PARDO, CARRIED 6-0-0, 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: UPON MOTION BY COMMITTEE MEMBER STEWART, SECONDED BY COMMITTEE MEMBER JOHNSON, CARRIED 6-0-0, recommendation. COMMENT AND DISCUSSION Finance Director Elke provided an agenda forecast. Agreement to research CAMP. ADJOURNMENT The meeting was adjourned at 2:42 pm. The next Regular Meeting of the Investment Oversight Committee is scheduled for Thursday, February 14 , 2018, 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 March 31, 2019 June 6, 2019 This report presents the City’s investment portfolio for the quarter ending March 31, 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. 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 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. Investment Portfolio Benefits all Funds The City’s cash and investment portfolio represents money from all City funds, including the General Fund, enterprise funds, 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. In the General Fund, approximately $10 million is purposely held in reserve to meet the City’s reserve policy of 20% of operating expenditures. 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 March 31, 2019 compared with the prior quarter: December 31, 2018 March 31, 2019 Percent of Total Cash and investments held by the City 41,673,965 53,022,106 40.10% Cash and investments managed by PFM 77,229,567 78,240,568 59.18% Cash and investments held by trustees 941,780 951,661 0.72% TOTAL 119,845,312 132,214,335 100% There are a number of factors which result in changes in cash and investment balances from month to month and quarter to quarter. Often they are the result of the receipt of revenues or a large disbursement. Some major City revenues are received on a periodic rather than a monthly basis. Property Tax, for example, is received in December, January, April and May of each year. Other revenues, such as Transient Occupancy Tax, are received monthly but vary considerably because they are seasonal. On the disbursement side, payments for bonded indebtedness or large capital projects can reduce the portfolio substantially in the quarter that they occur. Significant fluctuations of this type will be discussed in the following section of this report. 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 will impact the total value of the portfolio as reported. At March 31, 2019, the market value of the portfolio was $50,659 less than the cost basis. The portfolio’s yield on a market basis as of March 31, 2019 was 2.41%, and the yield on a cost basis was 2.18%. (These amounts do not reflect the returns on the assets held by the bond trustee.) As of March 31, 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 generally 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. Report Contents and Distribution. This report includes the following four schedules on the City’s portfolio as of March 31, 2019; summary of investments held or managed by the City, trustees or PFM; summary of investment portfolio liquidity; investment details; and detail of holdings for each investment. These schedules have not yet been reviewed by the City’s independent auditor. If you have any questions concerning this report, or require additional information, contact Brigitte Elke, Director of Finance at (805) 781-7125. DISTRIBUTION LIST City Council Heidi Harmon, Mayor Andy Pease, Vice Mayor Aaron Gomez, Council Member Andy Pease, Council Member Carlyn Christianson, Council Member Erica Stewart, Council Member Investment Oversight Committee Heidi Harmon, Mayor Derek Johnson, City Manager Brigitte Elke, Director of Finance Debbie Malicoat, Accounting Manager Daniel Humphrey, Public Member PFM Asset Management Monique Skype, Portfolio Manager CITY OF SAN LUIS OBISPO SUMMARY OF INVESTMENTS As of March 31, 2019 Percent of Current Market Portfolio Yield Value Local Agency Investment Funds 44% 2.44% 23,154,000.45 Certificate of Deposit 2% 2.25% 1,000,000.00 Money Market Account 2% 0.25% 1,019,879.63 Checking Account 53% 0.57% 27,848,226.43 Treasury Issues 0% 0.00% 0.00 Total Investments Held by the City 100% 1.41% $53,022,106.51 Percent of Current Portfolio Yield Value Federal Agency Issues 25% 1.79% 19,941,695.89 Commercial Paper 3% 2.71% 2,494,255.50 Money Market Fund 0% 0.00% 148,625.54 US Corporate Notes 16% 2.18% 12,825,898.23 Negotiable CD 12% 2.56% 9,503,508.62 Asset-Backed Security 1% 2.90% 830,827.55 Treasury Issues 42% 2.26% 32,495,756.39 Total Investments Managed by Public Financial Management 100% 2.15% $78,240,567.72 Percent of Current Market Trustee Portfolio Yield Value First American Treasury Funds 0.00% 0.00% 0.00 Other Money Market Accounts 49.23% 0.30% 468,499.65 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 50.77% Varies 483,161.15 Total Investments Held by Trustees 100% $951,660.80 Total of all Investments--Market Value $132,214,335.03 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 CITY OF SAN LUIS OBISPO SUMMARY OF INVESTMENT PORTFOLIO LIQUIDITY As of March 31, 2019 Managed Managed Percent of Market by City by PFM Portfolio Value On Demand 52,022,106.51 148,625.54 40% 52,170,732.05 Within Six Months 1,000,000.00 9,300,750.31 8% 10,300,750.31 Six Months to One Year 7,332,833.37 6% 7,332,833.37 Within One to Five Years 61,458,358.50 47% 61,458,358.50 Over Five Years 0% 0.00 TOTAL 53,022,106.51 $78,240,567.72 100% $131,262,674.23 Percent of Market Portfolio Value On Demand 49% 468,499.65 Within Six Months 0% 0.00 Six Months to One Year 0% 0.00 Within One to Five Years 0% 0.00 Over Five Years 51% 483,161.15 TOTAL 100% $951,660.80 Total of all Investments--Market Value $132,214,335.03 CITY OF SAN LUIS OBISPO INVESTMENT DETAIL As of March 31, 2019 Agency Investment Coupon Current Purchase Maturity Market (Broker) Description Rate Yield Date Date Value Local Agency Money Market Fund On Investment Fund City NA 2.44% Varies Demand 23,083,984.89 Local Agency Money Market Fund On Investment Fund CIB NA 2.44% Varies Demand 70,015.56 On JP Morgan Chase Checking Account NA 0.57% Varies Demand 27,848,226.43 Collateralized Pacific Premiere Bank Certificate of Deposit NA 2.25% 12/20/2005 12/20/2019 1,000,000.00 On Pacific Permiere Bank Money Market Account NA 0.25% 1/24/2012 Demand 1,019,879.63 TOTAL $53,022,106.51 INVESTMENTS HELD BY THE CITY AND THOSE MANAGED BY PUBLIC FINANCIAL MANAGEMENT (PFM INVESTMENTS HELD BY TRUSTEES FOR BOND DEBT SERVICE OBLIGATIONS TOTAL CASH AND INVESTMENTS INVESTMENTS HELD AND MANAGED BY THE CITY CITY OF SAN LUIS OBISPO INVESTMENT DETAIL As of March 31, 2019 Agency Investment Coupon Current Purchase Maturity Market (Broker) Description Rate Yield Date Date Value 2012 Water Revenue Refunding Bonds (Refunded 2002 Water Revenue Bonds) U. S. Bank U.S Bank Money Corporate Trust Services Market Account N/A 0.30% Varies on demand $10,096.61 U. S. Bank United States Corporate Trust Services Treasury Note 7.13% 6.04% Varies 2/15/23 $259,549.40 U. S. Bank United States Corporate Trust Services Treasury Note 2.00% 2.01% Varies 11/15/21 $223,611.75 2012 Revenue Refunding Bonds (Refunded 2001 Revenue Refunding Bonds) U. S. Bank U.S Bank Money Corporate Trust Services Market Account N/A 0.30% Varies on demand $511.73 U. S. Bank U.S Bank Money Corporate Trust Services Market Account N/A 0.30% Varies on demand $405,600.00 2018 Water Revenue Refunding Bonds (Refunded 2006 Water Revenue Bonds) U. S. Bank U.S Bank Money Corporate Trust Services Market Account N/A 0.30% Varies on demand $84.46 U. S. Bank U.S Bank Money Corporate Trust Services Market Account N/A 0.30% Varies on demand $34,498.35 2018 Lease Revenue Refunding Bonds (Refunded 2005 Ref Lease Rev, 2006 Lease Rev, & 2009 Lease Rev Bonds) U. S. Bank U.S Bank Money Corporate Trust Services Market Account N/A 0.30% Varies on demand $4,428.13 U. S. Bank U.S. Bank Money Corporate Trust Services Market Account N/A 0.30% Varies on demand $13,280.37 TOTAL $951,660.80 CITY OF SAN LUIS OBISPO INVESTMENT DETAIL As of March 31, 2019 The City of San Luis Obispo maintains certain performance objectives for the investments that are managed by Public Financial Management. The overall performance objective for the portfolio is to earn a total rate of return over the market cycle that equals or exceeds the market index. In order to achieve this objective the portfolio invests in high-quality money market instruments, US Treasury securities, Agency securities, and high-grade corporate securities, with a maximum maturity of five years. To monitor the achievement of this objective, the City uses a “Benchmark” to compare to. The benchmark which is used is based on the BofA Merrill Lynch Index of 0-5 year Treasury securities. Below is a summary of the monthly results as compared to the benchmark. While the City strives to achieve this performance objective every month, the goal is assumed to be met on an annual basis. The City of San Luis Obispo is currently just under the benchmark goals in most categories. We feel that through market trends and current investing adjustments, our performance will meet or exceed the benchmarks by the end of the fiscal year. Benchmark Comparison for the Quarter Ended 3/31/2019 Benchmark 3/31/2019 Portfolio 12/31/2018 Portfolio Average Maturity (yrs)2.26 2.21 1.99 Modified Duration 2.09 2.1 1.91 Average Purchase Yield N/A 2.18% 2.06% Average Market Yield 2.48% 2.41% 2.68% Average Quality AAA AA/Aa1 AA/Aa1 Total Market Value -$ 78,449,909$ 76,632,466$ The following pages provide a summary of the portfolio under management by Public Financial Management (PFM) as well as a detailed holding report for the month. MANAGED BY PUBLIC FINANCIAL MANAGEMENT INVESTMENTS HELD BY TRUSTEES FOR BOND DEBT SERVICE OBLIGATIONS © PFM 1 City of San Luis Obispo Investment Report For the Quarter Ended March 31, 2019 PFM Asset Management LLC www.pfm.com 50 California Street Suite 2300 San Francisco, CA 94111 415-982-5544 Izac Chyou, Senior Managing Consultant chyoui@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 1 © PFM I. Market Update © PFM U.S. Economic Growth Slows in Fourth Quarter Source: Bureau of Economic Analysis, as of April 2019. 4th quarter contributions are based on the final GDP growth estimate. 2.2% 4.2%3.4% 2.2% -4% -2% 0% 2% 4% 6% 8% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q U.S. GDP Contributors and Detractors Personal Consumption Fixed Investment Private Inventories Net Exports Gov't Expenditures 2014 2015 2016 2017 2018 3 © PFM 4.2%Are We Nearing a Recession? Source: Bloomberg as of 3/31/2019. 400 600 800 1,000 1,200 1,400 1,600 Housing Starts (000s, saar) 30 35 40 45 50 55 60 65 ISM Manufacturing 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Inflation Indicators Core PCE (YoY) Core CPI (YoY)0 100 200 300 400 500 600 700 1-5 Yr. A-AAA Corporate Index (OAS) -400 -200 0 200 400 600 Yield Curve (bps) 3mo-10yr 100k 200k 300k 400k 500k 600k 700k Initial Jobless Claims 4 © PFM Consumer Expectations of Future Economic Conditions Weakens Source: Bloomberg and Conference Board, as of 3/31/2019. -100 -75 -50 -25 0 25 50 75 100 Mar '71 Mar '75 Mar '79 Mar '83 Mar '87 Mar '91 Mar '95 Mar '99 Mar '03 Mar '07 Mar '11 Mar '15 Mar '19 Expectations - Present Situation Consumers optimistic about the future Consumers less optimistic about the future 5 © PFM Treasury Yields Fall Further Post Fed Meeting Investors’ appetite for riskier equity assets, coupled with the Fed’s recent move to a more “patient” stance regarding further rate hikes, drove Treasury yields further downward during the first quarter. The 2-year Treasury decreased by 23 basis points from December 31, 2018 to end the quarter at 2.26% Source: Bloomberg as of 3/31/2019. 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% Mar '18 Jun '18 Sep '18 Dec '18 Mar '19Yield2-Year U.S. Treasury 2.27% 2.53% 2.82% 2.49% 2.26% 6 © PFM Fed Shifted to a More Patient Stance in March GDP and unemployment forecasts were downgraded. Growth of household spending and fixed business investment have slowed. In light of global economic and financial developments and easing inflation expectations, the Committee forecasts the Fed Funds Rate to remain at current levels through 2019, after signaling two more rate hikes this past December. The Committee will assess realized and expected economic conditions. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. Source: FOMC Statement March 20, 2019 Implication: Likely no further rate hikes in 2019; the Fed may cut rates by year end. 7 © PFM Are We Done With Rate Hikes? Source: Bloomberg, as of 3/28/2019. -0.50% -0.25% 0.00% 0.25% 0.50% 0.75% Mar '18 May '18 Jul '18 Sep '18 Nov '18 Jan '19 Mar '19 2019 Rate Moves Priced into the Futures Market -0.30% 1 3 2 Hikes 1 2 Cuts 8 © PFM U.S. Treasury Yields Have Fallen; Inversion Deepens Source: Bloomberg as of 3/29/2019. 1Q2019 3/29/19 4Q2018 12/31/18 1Q2018 3/31/18 3-month 2.38%2.35%1.70% 6-month 2.42%2.48%1.91% 1-year 2.39%2.60%2.08% 2-year 2.26%2.49%2.27% 3-year 2.20%2.46%2.38% 5-year 2.23%2.51%2.56% 10-year 2.41%2.68%2.74% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50%3M6M1Y2Y3Y5Y10YYieldMaturity March 29, 2019 December 31, 2018 March 31, 2018 9 © PFM II. Portfolio Review © PFM Portfolio Characteristics -Internal For the Quarter Ended March 31, 2019 Portfolio Review 3/31/2019 12/31/2018 Average Maturity (yrs)0.02 0.01 Effective Duration1 0.02 0.01 Average Market Yield 1.41%1.52% Total Market Value 53,022,107 41,673,965 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% 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). 11 © PFM Sector Distribution-Internal For the Quarter Ended March 31, 2019 Portfolio Review *Issuer is Pacific Premier Bank. Percentages based on market values excluding accrued interest. LAIF Money Market Rate Account Negotiable CDs*Cash 3/31/2019 43.7%1.9%1.9%52.5% 12/31/2018 55.0%2.4%2.4%40.2% 0% 10% 20% 30% 40% 50% 60% 12 © PFM Aggregate Sector Allocation and Compliance Security Type Market Value % of Portfolio % Change vs 12/31/18 Permitted by Policy In Compliance U.S. Treasury $32,575,580 24.8%+0.9%100% Federal Agency $20,071,214 15.3%-3.4%100% Negotiable CDs $9,503,509 7.2%-1.1%30% Corporate Notes $12,825,898 9.8%-1.1%30% Commercial Paper $2,494,256 1.9%-1.0%25% Asset-Backed Securities $830,828 0.6%+0.6%15% Securities Sub-Total $78,301,284 59.6%-5.2% Money Market Fund $148,626 0.1%-0.1%20% Accrued Interest $375,665 $78,825,574 $23,154,000 17.6%-1.7%$65 Million $27,848,226 21.2%+7.1%100% $1,019,880 0.8%-0.1%20% Securities Total LAIF JP Morgan Checking* Pacific Premiere MMF Pacific Premiere Bank CD $1,000,000 0.8%-0.1%25% Total Investments $131,847,680 100.0% 13*JP Morgan checking account balance is 100% cash. © 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 Toyota Motor Credit Corp Automobiles Manufacturing Ally Auto Receivables Trust Automobiles Manufacturing Nissan Auto Receivables Automobiles Manufacturing Bank of Montreal Chicago Banks Bank of Nova Scotia Banks Nordea Bank AB NY Banks Skandinav Enskilda Banken NY Banks Swedbank NY Banks Westpac Banking Corp NY Banks Credit Agricole Banks MUFG Bank Banks Wells Fargo & Company Banks Apple Inc Communications Equipment Proctor & Gamble Consumer Products Unilever Consumer Products Issuer Sector (BICS) General Electric Electrical Equipment Manufacturing Walt Disney Company Entertainment Content UBS AG Stamford CT Financial Services BNY Mellon Financial Services Hershey Company Food & Beverage FHLB Government Agencies FNMA Government Agencies FHLMC Government Agencies John Deere Machinery Manufacturing Wal-Mart Stores Mass Merchants Berkshire Hathaway Property & Casualty Insurance Burlington North Railroad Home Depot Retail -Consumer Discretionary IBM Software & Services Microsoft Corp Software & Services U.S. Treasury Sovereigns 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 March 31, 2019 Portfolio Review 15 © PFM First Quarter 2019 Recap Continuing the trend from the fourth quarter of 2018,interest rates moved lower during the first quarter of 2019, as the Fed stated it has no plans for further rate action in 2019.However,in a strong reversal from the prior quarter,equity markets rebounded, credit spreads tightened and volatility decreased. U.S. Treasury yields with maturities beyond one year fell 20-30 basis points (0.20% to 0.30%). In the last week of the quarter, the 3-month to 10-year part of the yield curve inverted temporarily, renewing concerns about a possible recession. Our portfolio strategy included the following elements: •Our strategy over the past several months was to actively reduce exposure to credit sectors (and increase allocations to safer U.S. Treasuries), which helped to reduce relative underperformance versus the benchmark as U.S. Treasuries outperformed credit sectors for the quarter.Because of the maturity of the current business cycle, slower growth prospects,and a Fed now on hold for further rate hikes, we removed our defensive bias with regard to portfolio duration (duration positioning short of the benchmark),a strategy that had been in place for much of 2017-18 while rates were rising.We are now targeting a duration that is in line with the benchmark. •Sector allocation strategy continued to favor broad diversification,generally including the widest range of permitted investments.While the fourth quarter flight to safer assets resulted in Treasuries being the best performing sector, the first quarter’s rebound generated strong excess returns for the portfolio as most fixed income sectors outperformed similar duration Treasuries. •With agency spreads near historic lows, we continued to favor Treasuries in the government space.We found some value in agencies, primarily with new issues that offered wider than average yield spreads. •After corporate yield spreads increased to their widest levels in over two years in the fourth quarter,we sought opportunities to add exposure in the sector as spreads moved tighter throughout the first quarter. •We found asset-backed securities (ABS)to be an attractive and alternative outlet to other credit instruments,as ABS typically experiences less volatility than corporates during periods of stress. For the Quarter Ended March 31, 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 March 31, 2019 Portfolio Review +0.17% +0.31%+0.19%+0.15%Difference: 3 Months 1 Year 3 Years Since Inception City of San Luis Obispo 1.27%3.26%1.28%1.17% 0-5 Yr. Treasury Index 1.10%2.96%1.09%1.02% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 17 © PFM Earnings for the City of San Luis Obispo’s Operating Funds. Portfolio Earnings For the Quarter Ended March 31, 2019 Portfolio Review Market Value Basis Accrual (Amortized Cost) Basis Beginning Value (12/31/2018)$76,942,992 $77,597,570 Net Purchases/Sales $548,743 $548,743 Change in Value $600,207 ($3,712) Ending Value (3/31/2019)$78,091,942 $78,142,601 Interest Earned $382,877 $382,877 Portfolio Earnings $983,084 $379,164 18 © PFM 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 each 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 March 31, 2019 Portfolio Review 3/31/2019 Portfolio Benchmark2 Average Maturity (yrs)2.21 2.26 Effective Duration1 2.10 2.09 Average Purchase Yield 2.18%N/A Average Market Yield 2.41%2.33% Average Quality AA/Aa1 AA Total Market Value3 78,449,909 19 © PFM Sector distribution based on market value and excludes accrued interest. Sector Distribution —PFM Managed For the Quarter Ended March 31, 2019 Portfolio Review U.S. Treasury Federal Agency Negotiable CDs Commercial Paper Corporate Notes Asset- Backed Money Market Fund 3/31/2019 41.5%25.6%12.1%3.2%16.3%1.1%0.2% 12/31/2018 36.8%28.7%12.9%4.5%16.7%0.0%0.4% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 20 © PFM Credit Industry Exposure —PFM Managed For the Quarter Ended March 31, 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 further quarter 2018. Issuer Industry*% Ally Auto Receivables Trust Automobiles Manufacturing 0.1% American Honda Finance Automobiles Manufacturing 2.3% Apple Inc Communications Equipment 4.1% Bank of Montreal Chicago Banks 5.3% Bank of Nova Scotia Banks 5.9% Berkshire Hathaway Property & Casualty Insurance 0.9% BNY Mellon Financial Services 7.1% Burlington North Railroad 2.0% Credit Agricole Banks 5.8% General Electric Electrical Equipment Manufacturing 5.2% Hershey Company Food & Beverage 1.2% Home Depot Retail -Consumer Discretionary 3.0% IBM Software & Services 2.9% John Deere Machinery Manufacturing 0.7% Microsoft Corp Software & Services 3.9% MUFG Bank Banks 3.9% Nissan Auto Receivables Automobiles Manufacturing 2.0% Nordea Bank AB NY Banks 4.5% Proctor & Gamble Consumer Products 1.2% Skandinav Enskilda Banken NY Banks 5.8% Swedbank NY Banks 5.9% Toyota Motor Credit Corp Automobiles Manufacturing 4.5% UBS AG Stamford CT Financial Services 4.5% Unilever Consumer Products 0.4% Wal-Mart Stores Mass Merchants 5.8% Walt Disney Company Entertainment Content 2.0% Wells Fargo & Company Banks 3.8% Westpac Banking Corp NY Banks 5.2% Total 100.0% Automobiles Manufacturing, 8.96% Communications Equipment, 4.09% Banks, 46.08% Property & Casualty Insurance, 0.93% Financial Services, 11.58% Railroad, 1.97% Electrical Equipment Manufacturing, 5.20% Food & Beverage, 1.22% Retail -Consumer Discretionary, 3.04% Software & Services, 6.78% Machinery Manufacturing, 0.70% Consumer Products, 1.64%Mass Merchants, 5.80% Entertainment Content, 2.02% Industry Exposure 21 © PFM Ratings by Standard & Poor’s. Credit Quality —PFM Managed For the Quarter Ended March 31, 2019 Portfolio Review AAA AA A A-1 3/31/2019 1.8%76.1%11.5%8.2% 12/31/2018 1.7%76.3%13.1%7.3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 22 © PFM Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although they 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 March 31, 2019 Portfolio Review 0-1 Year 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years Portfolio 21.7%25.7%21.8%18.6%12.2% Benchmark*23.3%25.1%21.6%15.2%14.8% 0% 5% 10% 15% 20% 25% 30% 23 © PFM Issuer Distribution —PFM Managed For the Quarter Ended March 31, 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 U.S. Treasury 41.6%AA+Aaa FNMA Federal Agency 17.1%AA+Aaa FHLMC Federal Agency 5.9%AA+Aaa FHLB Federal Agency 2.7%AA+Aaa BNY Mellon Corporate Note 2.3%A A1 Swedbank NY Negotiable CD 1.9%AA-Aa2 Bank of Nova Scotia Negotiable CD 1.9%A+Aa2 Credit Agricole Commercial Paper 1.9%A-1 P-1 Skandinav Enskilda Banken NY Negotiable CD 1.9%A-1 P-1 Wal-Mart Stores Corporate Note 1.9%AA Aa2 Bank of Montreal Chicago Negotiable CD 1.7%A+Aa2 Westpac Banking Corp NY Negotiable CD 1.7%AA-Aa3 General Electric Corporate Note 1.7%BBB+Baa1 Toyota Motor Credit Corp Corporate Note 1.5%AA-Aa3 UBS AG Stamford CT Negotiable CD 1.5%A-1 P-1 Nordea Bank AB NY Negotiable CD 1.5%A-1+P-1 Apple Inc Corporate Note 1.3%AA+Aa1 MUFG Bank Commercial Paper 1.3%A-1 P-1 Microsoft Corp Corporate Note 1.3%AAA Aaa Wells Fargo & Company Corporate Note 1.2%A-A2 Home Depot Corporate Note 1.0%A A2 IBM Corporate Note 0.9%A A1 American Honda Finance Corporate Note 0.8%A A2 Walt Disney Company Corporate Note 0.7%A A2 Burlington North Corporate Note 0.6%A+A3 Nissan Auto Receivables Asset-Backed 0.6%NR Aaa Proctor & Gamble Corporate Note 0.4%AA-Aa3 Hershey Company Corporate Note 0.4%A A1 Berkshire Hathaway Corporate Note 0.3%AA Aa2 John Deere Corporate Note 0.2%A A2 Unilever Corporate Note 0.1%A+A1 Ally Auto Receivables Trust Asset-Backed <0.1%NR Aaa Total/Average 100.0% 24 © PFM Current Outlook and Strategy For the Quarter Ended March 31, 2019 Portfolio Review With the Fed on hold and the market’s current outlook for lower future interest rates, we will maintain a neutral duration posture in the portfolio relative to the benchmark. As a result of the outlook for slower economic growth, we continue to recommend maintaining diversification among investment grade sectors with a tilt toward higher grade corporate bonds given their income-producing potential. Our outlook for each of the major investment-grade fixed-income sectors are as follows: •As federal agency spreads remain very tight,we expect agency purchases to be minimal, seeking better value in either Treasuries or other sectors. Given the inverted-to-flat yield curve, we will also evaluate callable agencies for their incremental yield. •In the corporate sector,yield spreads have narrowed, settling in around longer-term,post-recession historical averages. Although the Treasury yield curve is flat,the corporate spread curve remains positively sloped, offering value for extending maturities.But,given international growth concerns, we remain diligent in our issuer and security selection process. •Allocations to AAA-rated ABS will be maintained.The sector offers an attractive incremental income compared to similar duration government securities and continues to offer a defensive outlet relative to other credit instruments. •Short-term,high quality credit in the form of negotiable certificates of deposit and commercial paper offer good income potential, especially in light of the partially inverted Treasury yield curve. 25 © PFM III. Appendix © PFM A. Consolidated Portfolio Information © PFM Portfolio Characteristics -Consolidated For the Quarter Ended March 31, 2019 Portfolio Review 1.Effective duration used in place of modified duration. Effective duration is the approximate percentage change in price for each 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). 3/31/2019 12/31/2018 Average Maturity (yrs)1.33 1.30 Effective Duration1 1.26 1.24 Average Purchase Yield 1.87%1.88% Average Market Yield 2.01%2.28% Average Quality AA/Aa1 AA/Aa1 Total Market Value 131,472,016 118,903,532 28 © PFM Sector Distribution -Consolidated For the Quarter Ended March 31, 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 3/31/2019 24.8%15.3%1.9%9.8%8.0%0.6%0.1%0.8%17.6%21.2% 12/31/2018 23.9%18.6%2.9%10.9%9.2%0.0%0.2%0.9%19.3%14.1% 0% 5% 10% 15% 20% 25% 30% 29 © PFM Maturity Distribution -Consolidated For the Quarter Ended March 31, 2019 Portfolio Review Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although they 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 3/31/2019 41.8%5.2%6.3%15.3%13.0%11.1%7.3% 12/31/2018 36.2%5.7%9.8%19.9%10.4%15.1%2.9% 0% 10% 20% 30% 40% 50% 30 © PFM Issuer Distribution -Consolidated For the Quarter Ended March 31, 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 U.S. Treasury 24.8%Aaa Aaa Cash Cash 21.2%NR NR LAIF LAIF 17.6%NR NR FNMA Federal Agency 10.2%AA+Aaa FHLMC Federal Agency 3.5%AA+Aaa FHLB Federal Agency 1.6%AA+Aaa BNY Mellon Corporate Note 1.4%A A1 Swedbank NY Negotiable CD 1.2%AA-Aa2 Bank of Nova Scotia Negotiable CD 1.1%A+Aa2 Credit Agricole Commercial Paper 1.1%A-1 P-1 Skandinav Enskilda Banken NY Negotiable CD 1.1%A-1 P-1 Wal-Mart Stores Corporate Note 1.1%AA Aa2 Bank of Montreal Chicago Negotiable CD 1.0%A+Aa2 Westpac Banking Corp NY Negotiable CD 1.0%AA-Aa3 General Electric Corporate Note 1.0%BBB+Baa1 Toyota Motor Credit Corp Corporate Note 0.9%AA-Aa3 UBS AG Stamford CT Negotiable CD 0.9%A-1 P-1 Nordea Bank AB NY Negotiable CD 0.9%A-1+P-1 Apple Inc Corporate Note 0.8%AA+Aa1 Pacific Premier Bank Money Market Rate Account 0.8%NR NR Pacific Premier Bank Money Market RA 0.8%NR NR MUFG Bank Commercial Paper 0.8%A-1 P-1 Microsoft Corp Corporate Note 0.8%AAA Aaa Wells Fargo & Company Corporate Note 0.7%A-A2 Home Depot Corporate Note 0.6%A A2 IBM Corporate Note 0.6%A A1 American Honda Finance Corporate Note 0.5%A A2 Walt Disney Company Corporate Note 0.4%A A2 Burlington North Corporate Note 0.4%A+A3 Nissan Auto Receivables Asset-Backed 0.4%NR Aaa Proctor & Gamble Corporate Note 0.2%AA-Aa3 Hershey Company Corporate Note 0.2%A A1 Berkshire Hathaway Corporate Note 0.2%AA Aa2 John Deere Corporate Note 0.1%A A2 Dreyfus Prime Cash Management Fund Money Market Fund 0.1%NR NR Unilever Corporate Note 0.1%A+A1 Ally Auto Receivables Trust Asset-Backed 0.0%NR Aaa Nissan Auto Receivables Asset-Backed 0.0%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 March 31, 2019 Portfolio Review 33 © PFM C. Portfolio Holdings CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 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 1,201.66 572,502.31 574,358.342.83US 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 3,233.15 560,767.93 553,852.881.25US 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 2,765.11 598,721.44 592,945.201.56US 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 1,844.96 688,220.97 678,123.291.27US 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 7,678.73 1,300,029.89 1,309,894.392.84US TREASURY NOTES DTD 10/31/2015 1.375% 10/31/2020 912828L99 1,330,000.00 AA+ Aaa 10/3/2016 10/5/2016 751,394.53 1,260.87 736,631.28 720,865.331.15US 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 1,751.24 376,544.99 372,800.901.81US TREASURY NOTES DTD 05/31/2016 1.375% 05/31/2021 912828R77 380,000.00 AA+ Aaa 11/22/2016 11/23/2016 699,556.25 2,554.56 692,401.90 684,652.021.78US TREASURY NOTES DTD 07/31/2014 2.250% 07/31/2021 912828WY2 685,000.00 AA+ Aaa 12/1/2016 12/5/2016 1,580,537.11 2,739.13 1,577,893.92 1,565,094.831.92US TREASURY NOTES DTD 09/02/2014 2.000% 08/31/2021 912828D72 1,575,000.00 AA+ Aaa 4/3/2017 4/5/2017 1,152,111.52 9,615.47 1,149,092.65 1,137,665.131.86US 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 11,756.91 1,383,470.13 1,391,031.602.48US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 912828F96 1,400,000.00 AA+ Aaa 1/3/2017 1/5/2017 1,002,226.56 8,397.79 1,001,224.31 993,594.001.95US TREASURY NOTES DTD 10/31/2014 2.000% 10/31/2021 912828F96 1,000,000.00 AA+ Aaa 11/1/2017 11/3/2017 745,107.42 4,399.04 746,759.94 740,302.501.92US 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 4,801.45 1,543,974.15 1,529,369.241.90US TREASURY NOTES DTD 01/31/2017 1.875% 01/31/2022 912828V72 1,545,000.00 AA+ Aaa 3/15/2017 3/17/2017 358,270.31 555.43 360,958.20 359,952.782.14US TREASURY NOTES DTD 03/02/2015 1.750% 02/28/2022 912828J43 365,000.00 PFM Asset Management LLC 35 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 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 8/1/2018 8/3/2018 1,798,968.75 95.29 1,809,562.68 1,841,254.922.82US 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 61.48 1,192,127.58 1,187,906.402.10US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 912828W89 1,200,000.00 AA+ Aaa 9/4/2018 9/6/2018 2,023,508.79 106.81 2,032,926.37 2,063,987.372.75US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 912828W89 2,085,000.00 AA+ Aaa 1/3/2018 1/4/2018 1,284,105.47 66.60 1,288,616.10 1,286,898.602.18US TREASURY NOTES DTD 03/31/2017 1.875% 03/31/2022 912828W89 1,300,000.00 AA+ Aaa 8/30/2017 9/1/2017 2,126,003.91 6,961.33 2,117,893.64 2,084,250.001.74US TREASURY NOTES DTD 07/31/2015 2.000% 07/31/2022 912828XQ8 2,100,000.00 AA+ Aaa 11/1/2017 11/3/2017 790,093.36 2,470.65 791,508.79 785,776.412.01US TREASURY NOTES DTD 07/31/2017 1.875% 07/31/2022 9128282P4 795,000.00 AA+ Aaa 6/4/2018 6/6/2018 1,189,382.81 59.29 1,198,553.19 1,219,753.282.76US TREASURY NOTES DTD 09/30/2015 1.750% 09/30/2022 912828L57 1,240,000.00 AA+ Aaa 10/3/2017 10/6/2017 495,742.19 23.91 496,970.13 491,836.001.93US TREASURY NOTES DTD 09/30/2015 1.750% 09/30/2022 912828L57 500,000.00 AA+ Aaa 5/2/2018 5/4/2018 1,773,785.55 15,409.94 1,785,581.05 1,820,305.322.80US 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 1,031,242.19 1,421.74 1,040,130.89 1,060,025.002.74US TREASURY NOTES DTD 02/29/2016 1.500% 02/28/2023 912828P79 1,090,000.00 AA+ Aaa 2/8/2019 2/12/2019 809,057.81 34.43 810,005.90 816,309.482.44US 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 1,771.41 813,426.43 820,132.252.44US TREASURY NOTES DTD 08/01/2016 1.250% 07/31/2023 912828S92 855,000.00 AA+ Aaa 3/6/2019 3/8/2019 1,545,479.30 15,923.41 1,545,282.99 1,563,409.082.52US TREASURY NOTES DTD 11/15/2013 2.750% 11/15/2023 912828WE6 1,530,000.00 AA+ Aaa 1/7/2019 1/9/2019 2,145,908.98 15,562.12 2,147,623.52 2,173,135.452.52US TREASURY NOTES DTD 11/30/2016 2.125% 11/30/2023 912828U57 2,185,000.00 AA+ Aaa 1/30/2019 1/31/2019 75,222.66 494.91 75,215.90 76,274.402.56US TREASURY N/B DTD 12/31/2018 2.625% 12/31/2023 9128285U0 75,000.00 PFM Asset Management LLC 36 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 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 2.26 32,495,756.39 32,434,619.17 125,018.82 32,815,000.00 32,386,150.01Security Type Sub-Total Federal Agency Bond / Note AA+ Aaa 7/19/2016 7/20/2016 274,334.50 481.25 274,932.59 273,689.350.96FHLMC REFERENCE NOTE DTD 07/20/2016 0.875% 07/19/2019 3137EAEB1 275,000.00 AA+ Aaa 9/15/2014 9/15/2014 1,019,077.50 2,187.50 1,047,799.44 1,045,779.001.88FREDDIE MAC GLOBAL NOTES DTD 07/30/2012 1.250% 08/01/2019 3137EADK2 1,050,000.00 AA+ Aaa 7/29/2016 8/2/2016 2,346,052.00 3,369.97 2,349,552.51 2,337,573.200.93FNMA BENCHMARK NOTE DTD 08/02/2016 0.875% 08/02/2019 3135G0N33 2,350,000.00 AA+ Aaa 7/18/2017 7/19/2017 354,478.15 623.72 354,905.00 353,624.731.45FREDDIE MAC NOTES DTD 07/19/2017 1.375% 08/15/2019 3137EAEH8 355,000.00 AA+ Aaa 2/4/2015 2/9/2015 264,505.80 240.14 260,451.24 259,165.401.36FNMA 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 4,350.69 698,606.20 695,751.001.65FREDDIE 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 7,246.25 1,394,932.19 1,386,275.671.38FHLB 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 1,216.88 884,825.83 877,644.771.52FNMA 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 7,163.94 1,163,581.76 1,152,342.281.49FHLMC 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 3,723.54 1,463,003.72 1,448,085.111.60FNMA NOTES DTD 08/01/2017 1.500% 07/30/2020 3135G0T60 1,465,000.00 AA+ Aaa 7/2/2018 7/5/2018 991,780.00 2,968.75 994,057.56 1,000,967.002.70FREDDIE MAC NOTES DTD 02/16/2018 2.375% 02/16/2021 3137EAEL9 1,000,000.00 AA+ Aaa 5/18/2016 5/19/2016 518,850.80 695.14 519,533.53 510,824.081.42FNMA 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 8,750.00 749,233.42 752,780.252.55FANNIE MAE NOTES DTD 04/13/2018 2.500% 04/13/2021 3135G0U27 750,000.00 AA+ Aaa 9/1/2016 9/2/2016 993,880.00 1,527.78 997,014.10 975,544.001.38FNMA NOTES DTD 08/19/2016 1.250% 08/17/2021 3135G0N82 1,000,000.00 PFM Asset Management LLC 37 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 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 8/17/2016 8/19/2016 1,040,767.75 1,596.53 1,042,950.17 1,019,443.481.33FNMA NOTES DTD 08/19/2016 1.250% 08/17/2021 3135G0N82 1,045,000.00 AA+ Aaa 8/17/2016 8/19/2016 323,888.18 496.53 324,461.59 317,051.801.32FNMA NOTES DTD 08/19/2016 1.250% 08/17/2021 3135G0N82 325,000.00 AA+ Aaa 6/27/2017 6/29/2017 2,249,281.65 10,678.33 2,243,871.59 2,217,663.111.85FANNIE 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 3,237.50 554,629.03 560,023.312.65FANNIE 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 2,382.26 1,563,098.92 1,606,742.712.98FANNIE 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 5,932.50 576,204.29 585,470.482.71FEDERAL 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 1,619.44 438,408.58 444,131.602.58FANNIE MAE NOTES DTD 02/08/2019 2.500% 02/05/2024 3135G0V34 440,000.00 AA+ Aaa 2/14/2019 2/15/2019 119,575.20 383.33 119,585.43 121,123.562.58FHLB BONDS DTD 02/15/2019 2.500% 02/13/2024 3130AFW94 120,000.00 1.79 19,941,695.89 20,015,638.69 70,871.97 20,020,000.00 19,968,182.03Security Type Sub-Total Corporate Note AA- Aa3 2/10/2017 2/15/2017 644,940.80 2,757.78 640,616.53 639,098.241.80TOYOTA MOTOR CREDIT CORP NOTES DTD 07/18/2014 2.125% 07/18/2019 89236TBP9 640,000.00 AA Aa2 8/8/2016 8/15/2016 239,767.20 398.67 239,970.63 238,874.401.33BERKSHIRE 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 11,750.00 508,002.79 505,324.001.48BURLINGTON 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 2,518.06 1,002,134.95 995,239.001.58MICROSOFT CORP (CALLABLE) NOTE DTD 02/12/2015 1.850% 02/12/2020 594918AY0 1,000,000.00 PFM Asset Management LLC 38 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 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 BBB+ Baa1 9/25/2017 9/27/2017 1,422,486.00 29,461.25 1,352,075.31 1,334,037.901.83GENERAL 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 104,665.05 766.50 104,875.63 104,121.151.91UNILEVER CAPITAL CORP BONDS DTD 05/05/2017 1.800% 05/05/2020 904764AV9 105,000.00 A A2 6/19/2017 6/22/2017 179,890.20 965.25 179,954.41 178,598.701.97JOHN 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 3,050.67 969,800.33 959,892.481.81BNY 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 2,668.44 319,741.16 317,842.241.95THE 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 7,299.64 875,188.89 861,085.881.70BONY 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 7,873.13 983,538.93 971,842.952.02WELLS 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 8,391.67 1,498,799.30 1,487,034.001.95WAL-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 3,058.90 434,768.40 438,933.273.08TOYOTA MOTOR CREDIT CORP CORP NOTES DTD 01/08/2019 3.050% 01/08/2021 89236TFQ3 435,000.00 A A1 5/3/2018 5/10/2018 309,786.10 3,630.44 309,846.65 313,091.943.12HERSHEY COMPANY CORP NOTES DTD 05/10/2018 3.100% 05/15/2021 427866BA5 310,000.00 A A2 2/21/2019 2/25/2019 387,588.00 415.56 388,063.07 390,654.002.98AMERICAN 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 3,333.33 750,916.27 743,486.252.45IBM 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 3,791.67 1,035,537.09 1,048,715.853.01APPLE INC CORP NOTES DTD 02/09/2017 2.500% 02/09/2022 037833CM0 1,050,000.00 PFM Asset Management LLC 39 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 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 A2 4/3/2018 4/5/2018 508,599.00 4,112.50 511,901.49 519,199.803.07WALT DISNEY COMPANY/THE CORP NOTES DTD 11/30/2012 2.350% 12/01/2022 25468PCW4 525,000.00 A A2 4/3/2018 4/5/2018 760,275.00 10,462.50 763,017.66 778,826.183.11HOME DEPOT INC CORP NOTES DTD 04/05/2013 2.700% 04/01/2023 437076AZ5 775,000.00 2.18 12,825,898.23 12,868,749.49 106,705.96 12,830,000.00 13,039,656.70Security Type Sub-Total Commercial Paper A-1 P-1 10/9/2018 10/9/2018 1,480,768.75 0.00 1,499,256.26 1,499,002.502.58CREDIT AGRICOLE CIB NY COMM PAPER DTD 10/09/2018 0.000% 04/08/2019 22533UR88 1,500,000.00 A-1 P-1 12/3/2018 12/3/2018 985,382.22 0.00 994,836.11 995,253.002.90MUFG BANK LTD/NY COMM PAPER DTD 10/23/2018 0.000% 06/05/2019 62479MT52 1,000,000.00 2.71 2,494,255.50 2,494,092.37 0.00 2,500,000.00 2,466,150.97Security Type Sub-Total Certificate of Deposit A-1 P-1 4/5/2017 4/6/2017 165,000.00 1,558.24 165,000.00 164,975.751.91BANK OF NOVA SCOTIA HOUSTON CD DTD 04/06/2017 1.910% 04/05/2019 06417GUE6 165,000.00 A-1 P-1 8/3/2017 8/4/2017 1,499,415.00 4,446.67 1,499,901.17 1,496,056.501.85SKANDINAVISKA ENSKILDA BANKEN NY CD DTD 08/04/2017 1.840% 08/02/2019 83050FXT3 1,500,000.00 A-1+ P-1 2/20/2018 2/22/2018 1,145,000.00 3,546.96 1,145,000.00 1,147,538.472.72NORDEA BANK AB NY CD DTD 02/22/2018 2.720% 02/20/2020 65590ASN7 1,145,000.00 A-1 P-1 3/2/2018 3/6/2018 1,145,000.00 2,582.61 1,145,000.00 1,148,688.052.93UBS AG STAMFORD CT LT CD DTD 03/06/2018 2.900% 03/02/2020 90275DHG8 1,145,000.00 A+ Aa2 6/5/2018 6/7/2018 1,329,494.60 13,199.51 1,329,697.00 1,339,310.003.10BANK OF NOVA SCOTIA HOUSTON CD DTD 06/07/2018 3.080% 06/05/2020 06417GU22 1,330,000.00 AA- Aa3 8/3/2017 8/7/2017 1,345,000.00 4,135.88 1,345,000.00 1,337,455.902.05WESTPAC BANKING CORP NY CD DTD 08/07/2017 2.050% 08/03/2020 96121T4A3 1,345,000.00 PFM Asset Management LLC 40 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 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+ Aa2 8/1/2018 8/3/2018 1,350,000.00 28,829.63 1,350,000.00 1,356,412.503.23BANK OF MONTREAL CHICAGO CERT DEPOS DTD 08/03/2018 3.190% 08/03/2020 06370REU9 1,350,000.00 AA- Aa2 11/16/2017 11/17/2017 1,525,000.00 13,077.72 1,525,000.00 1,513,071.452.30SWEDBANK (NEW YORK) CERT DEPOS DTD 11/17/2017 2.270% 11/16/2020 87019U6D6 1,525,000.00 2.56 9,503,508.62 9,504,598.17 71,377.22 9,505,000.00 9,503,909.60Security Type Sub-Total Asset-Backed Security AAA NR 2/19/2019 2/27/2019 209,994.37 214.61 209,994.59 211,293.562.83HAROT 2019-1 A3 DTD 02/27/2019 2.830% 03/20/2023 43814WAC9 210,000.00 AAA Aaa 2/5/2019 2/13/2019 79,985.42 103.47 79,985.88 80,569.182.92TAOT 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 34,995.90 35,265.963.13ALLYA 2019-1 A3 DTD 02/13/2019 2.910% 09/15/2023 02004WAC5 35,000.00 NR Aaa 2/5/2019 2/13/2019 499,924.25 644.44 499,926.50 503,698.852.91NAROT 2019-A A3 DTD 02/13/2019 2.900% 10/15/2023 65479KAD2 500,000.00 2.90 830,827.55 824,902.87 1,007.79 825,000.00 824,899.81Security Type Sub-Total 78,188,949.12 78,495,000.00 374,981.76 78,142,600.76 78,091,942.18 2.18 Managed Account Sub Total $374,981.76 $78,142,600.76 $78,091,942.18 Securities Sub-Total Accrued Interest $374,981.76 Total Investments $78,466,923.94 2.18%$78,495,000.00 $78,188,949.12 Bolded items are forward settling trades. PFM Asset Management LLC 41 © PFM D. Quarterly Transactions CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 2019 Portfolio Activity Quarterly Portfolio Transactions Trade Date Settle Date Maturity DatePar ($) CUSIP Security Description Transact Amt ($) Yield at Market Realized G/L (BV)Coupon BUY 1/3/19 1/8/19 435,000 89236TFQ3 TOYOTA MOTOR CREDIT CORP CORP NOTES 1/8/21 434,739.00 3.08%3.05% 1/7/19 1/9/19 2,185,000 912828U57 US TREASURY NOTES 11/30/23 2,151,011.32 2.52%2.12% 1/7/19 1/9/19 1,050,000 037833CM0 APPLE INC CORP NOTES 2/9/22 1,045,355.50 3.01%2.50% 1/9/19 1/11/19 555,000 3135G0U92 FANNIE MAE NOTES 1/11/22 554,600.40 2.65%2.62% 1/30/19 1/31/19 635,000 9128285U0 US TREASURY N/B 12/31/23 638,312.59 2.56%2.62% 1/30/19 1/31/19 560,000 3130A0F70 FEDERAL HOME LOAN BANKS NOTES 12/8/23 579,526.50 2.71%3.37% 2/5/19 2/13/19 35,000 02004WAC5 ALLYA 2019-1 A3 9/15/23 34,995.77 3.13%2.91% 2/5/19 2/13/19 80,000 89239AAD5 TAOT 2019-A A3 7/15/23 79,985.42 2.92%2.91% 2/5/19 2/13/19 500,000 65479KAD2 NAROT 2019-A A3 10/15/23 499,924.25 2.91%2.90% 2/7/19 2/8/19 440,000 3135G0V34 FANNIE MAE NOTES 2/5/24 438,363.20 2.58%2.50% 2/8/19 2/12/19 855,000 912828S92 US TREASURY NOTES 7/31/23 812,570.88 2.44%1.25% 2/8/19 2/12/19 840,000 912828Q29 US TREASURY NOTES 3/31/23 813,730.89 2.44%1.50% 2/14/19 2/15/19 120,000 3130AFW94 FHLB BONDS 2/13/24 119,575.20 2.58%2.50% 2/19/19 2/27/19 210,000 43814WAC9 HAROT 2019-1 A3 3/20/23 209,994.37 2.83%2.83% 2/21/19 2/25/19 400,000 02665WBG5 AMERICAN HONDA FINANCE CORP NOTES 9/9/21 390,723.56 2.98%1.70% 3/6/19 3/8/19 1,530,000 912828WE6 US TREASURY NOTES 11/15/23 1,558,613.21 2.52%2.75% 10,430,000 10,362,022.06Total BUY INTEREST 1/3/19 1/3/19 0 MONEY0002 MONEY MARKET FUND 475.69 1/5/19 1/5/19 2,235,000 3135G0S38 FANNIE MAE NOTES 1/5/22 22,350.00 2.00% 1/18/19 1/18/19 640,000 89236TBP9 TOYOTA MOTOR CREDIT CORP NOTES 7/18/19 6,800.00 2.12% 1/19/19 1/19/19 1,275,000 3137EAEB1 FHLMC REFERENCE NOTE 7/19/19 5,578.13 0.87% 1/27/19 1/27/19 750,000 459200JQ5 IBM CORP BONDS 1/27/22 9,375.00 2.50% PFM Asset Management LLC 43 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 2019 Portfolio Activity Trade Date Settle Date Maturity DatePar ($) CUSIP Security Description Transact Amt ($) Yield at Market Realized G/L (BV)Coupon 1/30/19 1/30/19 1,465,000 3135G0T60 FNMA NOTES 7/30/20 10,987.50 1.50% 1/31/19 1/31/19 580,000 912828H52 US TREASURY NOTES 1/31/20 3,625.00 1.25% 1/31/19 1/31/19 795,000 9128282P4 US TREASURY NOTES 7/31/22 7,453.13 1.87% 1/31/19 1/31/19 685,000 912828WY2 US TREASURY NOTES 7/31/21 7,706.25 2.25% 1/31/19 1/31/19 2,100,000 912828XQ8 US TREASURY NOTES 7/31/22 21,000.00 2.00% 1/31/19 1/31/19 685,000 912828XM7 US TREASURY NOTES 7/31/20 5,565.63 1.62% 1/31/19 1/31/19 1,545,000 912828V72 US TREASURY NOTES 1/31/22 14,484.38 1.87% 2/1/19 2/1/19 1,050,000 3137EADK2 FREDDIE MAC GLOBAL NOTES 8/1/19 6,562.50 1.25% 2/2/19 2/2/19 2,350,000 3135G0N33 FNMA BENCHMARK NOTE 8/2/19 10,281.25 0.87% 2/4/19 2/4/19 0 MONEY0002 MONEY MARKET FUND 222.19 2/4/19 2/4/19 1,500,000 83050FXT3 SKANDINAVISKA ENSKILDA BANKEN NY CD 8/2/19 14,260.00 1.84% 2/7/19 2/7/19 500,000 06427KRC3 BANK OF MONTREAL CHICAGO CERT DEPOS 2/7/19 4,700.00 1.88% 2/7/19 2/7/19 1,345,000 96121T4A3 WESTPAC BANKING CORP NY CD 8/3/20 13,786.25 2.05% 2/9/19 2/9/19 1,050,000 037833CM0 APPLE INC CORP NOTES 2/9/22 13,125.00 2.50% 2/12/19 2/12/19 1,000,000 594918AY0 MICROSOFT CORP (CALLABLE) NOTE 2/12/20 9,250.00 1.85% 2/15/19 2/15/19 240,000 084664CK5 BERKSHIRE HATHAWAY INC CORPORATE NOTES 8/15/19 1,560.00 1.30% 2/15/19 2/15/19 355,000 3137EAEH8 FREDDIE MAC NOTES 8/15/19 2,440.63 1.37% 2/16/19 2/16/19 1,000,000 3137EAEL9 FREDDIE MAC NOTES 2/16/21 11,875.00 2.37% 2/17/19 2/17/19 325,000 3135G0N82 FNMA NOTES 8/17/21 2,031.25 1.25% 2/17/19 2/17/19 1,045,000 3135G0N82 FNMA NOTES 8/17/21 6,531.25 1.25% 2/17/19 2/17/19 1,000,000 3135G0N82 FNMA NOTES 8/17/21 6,250.00 1.25% 2/17/19 2/17/19 960,000 06406HDD8 BNY MELLON CORP NOTE (CALLABLE)8/17/20 12,480.00 2.60% 2/20/19 2/20/19 1,145,000 65590ASN7 NORDEA BANK AB NY CD 2/20/20 15,572.00 2.72% 2/22/19 2/22/19 390,000 02665WBA8 AMERICAN HONDA FINANCE CORP NOTES 2/22/19 3,315.00 1.70% 2/26/19 2/26/19 520,000 3135G0J20 FNMA NOTES 2/26/21 3,575.00 1.37% 2/28/19 2/28/19 725,000 912828B90 US TREASURY NOTES 2/28/21 7,250.00 2.00% 2/28/19 2/28/19 885,000 3135G0T29 FNMA NOTES 2/28/20 6,637.50 1.50% 2/28/19 2/28/19 1,090,000 912828P79 US TREASURY NOTES 2/28/23 8,175.00 1.50% 2/28/19 2/28/19 365,000 912828J43 US TREASURY NOTES 2/28/22 3,193.75 1.75% 2/28/19 2/28/19 1,575,000 912828D72 US TREASURY NOTES 8/31/21 15,750.00 2.00% PFM Asset Management LLC 44 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 2019 Portfolio Activity Trade Date Settle Date Maturity DatePar ($) CUSIP Security Description Transact Amt ($) Yield at Market Realized G/L (BV)Coupon 3/4/19 3/4/19 1,145,000 90275DHG8 UBS AG STAMFORD CT LT CD 3/2/20 16,694.74 2.90% 3/4/19 3/4/19 0 MONEY0002 MONEY MARKET FUND 665.41 3/9/19 3/9/19 400,000 02665WBG5 AMERICAN HONDA FINANCE CORP NOTES 9/9/21 3,400.00 1.70% 3/12/19 3/12/19 1,570,000 3135G0U43 FANNIE MAE NOTES 9/12/23 22,317.99 2.87% 3/12/19 3/12/19 260,000 3135G0ZG1 FNMA NOTES 9/12/19 2,275.00 1.75% 3/15/19 3/15/19 35,000 02004WAC5 ALLYA 2019-1 A3 9/15/23 90.53 2.91% 3/15/19 3/15/19 500,000 65479KAD2 NAROT 2019-A A3 10/15/23 1,288.89 2.90% 3/15/19 3/15/19 80,000 89239AAD5 TAOT 2019-A A3 7/15/23 206.93 2.91% 3/18/19 3/18/19 210,000 43814WAC9 HAROT 2019-1 A3 3/20/23 346.68 2.83% 3/31/19 3/31/19 2,085,000 912828W89 US TREASURY NOTES 3/31/22 19,546.88 1.87% 3/31/19 3/31/19 1,200,000 912828W89 US TREASURY NOTES 3/31/22 11,250.00 1.87% 3/31/19 3/31/19 840,000 912828Q29 US TREASURY NOTES 3/31/23 6,300.00 1.50% 3/31/19 3/31/19 1,240,000 912828L57 US TREASURY NOTES 9/30/22 10,850.00 1.75% 3/31/19 3/31/19 500,000 912828L57 US TREASURY NOTES 9/30/22 4,375.00 1.75% 3/31/19 3/31/19 1,300,000 912828W89 US TREASURY NOTES 3/31/22 12,187.50 1.87% 3/31/19 3/31/19 1,860,000 912828W89 US TREASURY NOTES 3/31/22 17,437.50 1.87% 46,395,000 423,457.33Total INTEREST MATURITY 2/7/19 2/7/19 500,000 06427KRC3 BANK OF MONTREAL CHICAGO CERT DEPOS 2/7/19 500,000.00 0.00 1.88% 2/22/19 2/22/19 390,000 02665WBA8 AMERICAN HONDA FINANCE CORP NOTES 2/22/19 390,000.00 0.00 1.70% 890,000 890,000.00 0.00Total MATURITY SELL 1/3/19 1/8/19 435,000 89236TBP9 TOYOTA MOTOR CREDIT CORP NOTES 7/18/19 437,551.15 2.93% (2,557.71)2.12% 1/7/19 1/9/19 1,000,000 46640QNH0 JP MORGAN SECURITIES LLC COMM PAPER 1/17/19 999,440.00 2.52%(15.56)0.00% PFM Asset Management LLC 45 CITY OF SAN LUIS OBISPO OPERATING FUNDS For the Quarter Ended March 31, 2019 Portfolio Activity Trade Date Settle Date Maturity DatePar ($) CUSIP Security Description Transact Amt ($) Yield at Market Realized G/L (BV)Coupon 1/7/19 1/9/19 1,050,000 037833CK4 APPLE INC BONDS 2/7/20 1,048,353.83 2.81% (9,880.78)1.90% 1/7/19 1/9/19 70,000 3137EADZ9 FREDDIE MAC NOTES 4/15/19 69,929.65 2.49% (254.53)1.12% 1/7/19 1/9/19 810,000 3137EADZ9 FREDDIE MAC NOTES 4/15/19 809,185.95 2.49% (2,916.53)1.12% 1/9/19 1/11/19 565,000 912828K58 US TREASURY NOTES 4/30/20 557,518.41 2.63% (9,958.70)1.37% 1/30/19 1/31/19 455,000 3130ABF92 FEDERAL HOME LOAN BANK AGENCY NOTES 5/28/19 454,438.64 2.48% (1,517.80)1.37% 1/30/19 1/31/19 735,000 3130ABF92 FEDERAL HOME LOAN BANK AGENCY NOTES 5/28/19 734,093.20 2.48% (2,620.61)1.37% 2/5/19 2/7/19 115,000 3137EADG1 FREDDIE MAC NOTES 5/30/19 115,125.00 2.44% (354.70)1.75% 2/5/19 2/7/19 500,000 3137EADG1 FREDDIE MAC NOTES 5/30/19 500,558.47 2.43% (1,527.16)1.75% 2/7/19 2/8/19 440,000 9128285U0 US TREASURY N/B 12/31/23 444,252.15 2.48% 1,706.85 2.62% 2/8/19 2/12/19 95,000 912828WL0 US TREASURY NOTES 5/31/19 95,029.93 2.42% (382.30)1.50% 2/8/19 2/12/19 550,000 912828TC4 US TREASURY NOTES 6/30/19 547,709.95 2.41% 371.45 1.00% 2/8/19 2/12/19 385,000 3137EADG1 FREDDIE MAC NOTES 5/30/19 385,608.30 2.39% (1,075.64)1.75% 2/14/19 2/15/19 120,000 9128285U0 US TREASURY N/B 12/31/23 121,234.66 2.47% 480.83 2.62% 2/19/19 2/21/19 210,000 912828TC4 US TREASURY NOTES 6/30/19 209,218.85 2.46% 100.30 1.00% 3/6/19 3/8/19 195,000 084664CG4 BERKSHIRE HATHAWAY INC NOTES 3/15/19 196,559.89 2.55%(32.17)1.70% 3/6/19 3/8/19 190,000 912828TC4 US TREASURY NOTES 6/30/19 189,475.88 2.47% 70.19 1.00% 3/6/19 3/8/19 1,000,000 3137EAEB1 FHLMC REFERENCE NOTE 7/19/19 995,330.97 2.50% (5,562.67)0.87% 8,920,000 8,910,614.88 -35,927.24Total SELL PFM Asset Management LLC 46 © 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 be called prior to maturity. •MBS maturities are represented by expected average life. 47 © 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 premium 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 time 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 contribution 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 to 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 measurement 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. 48 © 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 occurs 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 remaining 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, maturity 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, maturity value and the time period remaining until maturity, stated as a percentage, on an annualized basis. 49 © PFM Thank You 50