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Home My WebLink About2008 08 13 Document Distributed During Discussion of Informational 101Date: August 13, 2008 The attached document was distributed during the discussion of Informational Agenda Item "101" during the August 13, 2008 City Commission Workshop. Master Lease Program Investments Fin~nia~ T~~~~~ia.L i.t~r~ ~r~r~r~n Florida League of Cities, Inc. Department of Financial Services °~ ~' ~ ~~ ,r. ,;W, . ~, ~ y ~~` ~. ~ e ; ~'~ Bond Program _~- - a _ ri~~~~~ `,~~~~r-°t~Yti~~, ~n~:. FloYida Munici al Investynent TYUSt De~artme:n$ of Finanual Seevoces - FMIvT ~ ~ • The Florida Municipal Investment Trust (FMIvT) was created in 1997 to allow local governments to pool surplus and pension funds and invest in a variety of portfolios, utilizing economies of scale. • Separate independent legal entity. • Administered by the Florida League of Cities through contract • Authorized Investment under Section 218.415 Florida Statutes • Governed by a Board of Trustees from Elected Officials from Participants _~- - a _ 1'1~orida I,~.a~u~_ ~fi'itic~, Ln~. ~'"~ acparknsent of FFnanual Ser+Faces ~ FMIvT Board of Trustees • Julio Robaina (Chair) - MayoY, City of Hialeah • John Marks (Vice Chair) - MayoY, City of Tallahassee • Larry Schultz - MayoY, City of Rockledge • Bill Arrowsmith - Vice MayoY, City of Apopka • Beverley Billiris - MayoY, City of TaYpon SpYings • Robert Margolis - Vice MayoY, Village of Wellington • Susan Starkey - CouncilwoYnan, Town of Davie I .~ ~~;~. _~- - a _ 1'1~orida I,~.a~u~_ ~fi'itic~, Ln~. ~'"~ acparknsent of FFnanual Ser+Faces ~ Investment Advisory Committee The Investment Advisory Committee meets regularly with the Administrator to assist and consult on issues regarding services offered by the Department. The success of these programs is greatly attributable to the expertise and knowledge of these individuals. _~- - a _ 1'1~orida I,~.a~u~_ ~fi'itic~, Ln~. ~'"~ acparknsent of FFnanual Ser+Faces ~ Advisory Committee Members • G. Michael ~~Mickey" Miller (Chairman) - Chief Financial O~ceY, City of Jacksonville • Robert ~~Bob" B. Inzer - CleYk of the CZYCUit CouYt, Leon County • Joseph LoBello - DiYectoY of Finance, Town of Juno Beach • Francine Ramaglia - DiYectoY o AdYninistYation ~ Financial SeYVices, Village o Wellington • Margaret Simmons - Financial SeYVices AdYninistYatoY, City of CleaYwateY • Jane Struder - Finance DiYectoY, Town of PalYn Beach • Mervyn C. Timberlake, Jr. - DiYectoY of Financial SeYVices, City of Boca Raton • William F. Underwood, II - City ManageY, City of Belle Glade • Bonnie Wise - DiYectoY of Revenue and Finance, City of TaYnpa _~- - a _ 1'1~orida I,~.a~u~_~fi'itic~, Ln~. acparknsent of FFnanual Ser+Faces Professional Team • Investment management - Atlanta Capital Management - Alliance Bernstein - Columbia Management - Hotchkis & Wiley - INTECH/Janus - Oaktree Capital Management • Investment consultant - Asset Consulting Group • Rating agency - Fitch - Standard and Poor's • Compliance monitoring - Asset Consulting Group • Auditor - Shorstein &Shorstein • Full support staff - Florida League of Cities Pv~oviding PYOfessional Management and Extensive OveYSight _~- - a _ 1'1~orida I,~.a~u~_ ~fi'itic~, Ln~. ~'"~ acparknsent of FFnanual Ser+Faces ~ FMIvT Membership Benefits •Can accommodate investments of all sizes •Authorized Investment per FL Statutes •Frequent Liquidity •High Quality Investment Options •Professional Investment Management •Extensive Oversight •Low Fees •Instant Diversification •Saves staff time •Utilize FMIvT portfolios for a laddered approach •Personalized service from Florida League of Cities 1'1~orid~ I.t~ufe~~•o1'Ci#ic~, Tnc, aepartinent of Firtan€ia1 Sersri~es FMIvT Members City of Apopka Town of Lady Labe City of Auburndale City of Lake City City of Boca Raton City of Lakeland City of Boynton Beach City of Lauderdale Lakes City of Bradenton Leon County BoCC City of Brooksville City of Lighthouse Point Town of Davie City of \Tew Port Richey City of Daytona Beach City of DeFuniak Springs City of North Miami Beach Delta Farms Water Control District City of Oldsmar City of Flagler Beach Town of Palm Beach Florida Municipal Insurance Trust Fund City of Palmetto Florida Municipal Loan Council Town of Pembroke Park Florida Municipal Pension Trust Fund City of Pembroke Pines Florida Municipal OPFB Trust City of Pinellas Park Town of Fort Myers Beach City of Pompano Beach City of Fort Pierce Town of Ponce Inlet City of Greenacres City of Sanibel City of Gulf Breeze City of Sarasota City of Hialeah City of Seminole Housing Finance Authority of Lee County City of St. Cloud City of Indian Harbour Beach City of Stuart City of Indian Shores City of Tallahassee City of Inverness City of Tarpon Springs City of Jacksonville City of Temple Terrace City of Jacksonville Beach The Villages Town of Juno Beach Village of Wellington _~- - a _ 1'1~orida I,~.a~u~_ ~fi'itic~, Ln~. ~'"~ acparknsent of FFnanual Ser+Faces ~ Diverse Investment Options Cash & Reserve Fund Portfolio Options - High .Quality GoveYnment Fund - 1-3 YeaY High .Quality Bond Fund - InteYmediate High .Quality Bond Fund Pension/ OPEB Assets Portfolio Options - BYOad Mavket High .Quality Bond Fund - Expanded High Yield Bond Fund - DiveYSified Small Cap Equity Povtfolio - High .Quality GYOwth PoYtfolio - LaYge Cap DiveYSi~ed Value PoYtfolio - Russell 1000 Enhanced Index - InteYnational Blend PoYtfolio _~- - a _ 1'1~orida I,~.a~u~_~fi'itic~, Ln~. acparknsent of FFnanual Ser+Faces Risk and Diversification FMIvT provides diversification as required by Florida Statutes Chapter 218.415: (8) RISK AND DIVERSIFICATION.--The investment policy shall provide for appropriate diversification of the investment portfolio. Investments held should be diversified to the extent practicable to control the risk of loss resulting from overconcentration of assets in a specific maturity, issuer, instrument, dealer, or bank through which financial instruments are bought and sold. Diversification strategies within the established guidelines shall be reviewed and revised periodically, as deemed necessary by the appropriate management staff. 1'1~orid~ I.t~ufe~~•o1'Ci#ic~, Tnc, aepartinent of Firtan€ia1 Sersri~es For All Investors , ,,,,, , , ,,,,, , ,, :,,, ,~ DIVERSIFICATION Produces Higher Returns With Little Downside Risk Over Time _~- - a _ 1'1~orida I,~.a~u~_ ~fi'itic~, Ln~. ~'"~ acparknsent of FFnanual Ser+Faces ~ Two Ways To Ladder A Portfolio 1) Some investors buy bonds to mature exactly when they plan to spend it. HAKDEST FOR MOST INVESTORS 2) Most investors just want their investments to be diversified. They want a portion to be very liquid and a portion to earn higher returns. Maturities do not exactly match future spending BEST FOR MOST INVESTORS 1'1~orid~ I.t~ufe~~•o1'Ci#ic~, Tnc, aepartinent of Firtan€ia1 Sersri~es Advantages of Using FMIvT Funds To Create a Laddered Portfolio Increase Diversification In Multiple Ways •Across The Yield Curve •Across Multiple High Quality Bond Sectors Can Accommodate Investments of All Sizes Substantial Fund Oversight •All Funds AAA Rated by Fitch and S&P •Independent Investment Consultant, Investment Advisory Committee, Board of Trustees, Auditor and FLC Staff _~- - a _ 1'1~orida I,~.a~u~_ ~fi'itic~, Ln~. ~'"~ acparknsent of FFnanual Ser+Faces ~ High puality Government Fund • S&P Credit Rating: AAA • Liquidity: Twice Monthly • Avg. Wtd. Maturity: 0.36 • Duration: 0.26 • Benchmark: 90 Day US T-Bills • Expense Ratio: 18 basis points (.18%) • Assets: $118.7 million • Min. Contribution: $50,000 • Columbia Management (as of Jtuie 30, 2008) ~C~~~`,AU~t)~c~tlt~~l asl~ Tr~~~u~ies ,~1~ ~ fl ~Cl ~~.4'0 asset ~uali~t ~r~~~~~~ G~.~4`'~ _~- - a _ - -~~ 1'1~orida I,~.a~u~_~fi'itic~, Ln~. acpark~ent of Fnanual See+Faces _ 1-3 YrHigh Quality Bond Fund ~!~t~-1',~-]]t]~~c~~10i11 • Fitch Credit Rating: AAA • Liquidity: Twice Monthly • Avg. Wtd. Maturity: 1.53 • Duration: 1.44 • Benchmark: Merrill-Lynch 1-3 Year Government Index • Expense Ratio: 23 basis points (.23%) • Assets: $363.1 million • Min. Contribution: $50,000 • Atlanta Capital Management (as of June 30, 2008) ~s~n Tre~s~rrie~ s.~~~ ~rpor~,t~ ~.o~~ ~.~~~ ~# c~~uality s.~~~ ~q ~,.~~aa _~ry -} 83.8n,a _~- - a _ 1'1~orida I,~.a~u~_~fi'itic~, Ln~ acparknsent of FFnanual Ser+Faces ~, Intermediate High puality Bond Fund ~!~t~-1',~-]]t]~~c~~10i11 • Fitch Credit Rating: AAA • Liquidity: Monthly • Avg. Wtd. Maturity: 4.62 • Duration: 3.89 • Benchmark: Lehman Intermediate Government/ Credit (Ex Baa) + ABS + MBS • Expense Ratio: 23 basis points (.23%) • Assets: $221.9 million • Min. Contribution: $50,000 • Atlanta Capital Management (as of June 30, 2008) A~~gyye~r~{y~~Ne~~ G~.J~.9 .~~ s~~t Backed ~.~~~~ c~~r-~ ('~ =[}F r~~# c~~uality ~.~ ~~ ~q ~,.~~aa _~ry -} ------ 83.8n,a Tr~~,s~r~~s .~~~ _~- - a _ - -~~ 1'1~orida I,~.a~u~_~fi'itic~, Ln~. acpark~ent of Fnanual See+Faces _ Broad Market High puality Bond Fund ect~r,A~llc~~cat~o~n • Fitch Credit Rating: AA • Liquidity: Monthly • Avg. Wtd. Maturity: 5.46 • Duration: 4.48 • Benchmark: Lehman Brothers A+ Aggregate Index • Expense Ratio: 33 basis points (.33%) ~~~ ~~r,~~~~ .~~~ 1.°~ ~r~a~r~tes .~ ~~ ~.~~ Tr~~s~r ~.~i ~.~°, • Assets: $130.8 million ~~ ~~~~, • Min. Contribution: $50,000 • Atlanta Capital Management ~~, ~~~ ~ a.~J4 ~...__ (as of June 30, 2008) •4 '~~G a ~~ ~t X5.5 °~o '~ Florida Municipal Investment Trust Florida Municipallnvestment Trust Summary ofPerformance Returns Periods Ending June 30, 2008 Market Valves Sept. 30, (000)'s Month Qtr. FYTD 1 Year 3 Years 5 Years 7 Years 10 Years Fixed Income Portfolios FMI~ T High Qnalit~- Goy ernment Fluid i $118,709 O.I9 ° a 0.58 ° 0 2.93 % 4.34 % 4.68 % 3.49 °/, N/A N/A Enhanced Cash Annualized 2.28 % 2.32 % 3.90 % 4.34 90 Day Treasury Bill 0.18 % 0.32 % 2.27 % 3.64 % 4.27 % 3.18 % 2.86 % 3.63 FMI~ T High Qnalit~- l-.i Year Bond Farad $363,050 0.39 ° o (0.00)'% 4.39 '% 6.74 % 4.86 °/~ 3.64 % 4.17 '% 4.80 '% Merrilll-3 Yr Governmentlndex 0.30 % (0.72)% 4.50 % 7.18 % 4.73 % 3.33 % 4.03 % 4.73 FMI~ T hixerYnediate High Qaalit~- Bond Fetid $221,910 0.33 % (1.02)" .. 5.08 °/, 8.43 % 4.83 °/~ 4.09 % 5.24 ".. 5.67 °/, Lehman High QualitylntermedrateAggreg-ate 2 (0.12)% (1.02)% 4.45 % 7.41 % 4.42 % 3.87 % 5.19 % 5.62 FMI~ T Broad M.u~ket High Qaalih- Bond Fluid $130,790 0.39 '%, (1.2I)'% 5.60 `%~ 9.13 '% 4.85 ° 0 4.35 °/, 5.45 '% 5.69 `%~ Lehman BrothersA+Aggreg-ate (0.04)% (1.12)% 4.44 % 7.52 % 4.22 % 3.88 % 5.40 % 5.68 FNIIcT E~paaded High Y"field Bond Faced; N/A N/A N/A N/A N/A N/A N/A N/A Lehman Brothers High Yield 2% Constrained Index (2.47)% 1.94 % (2.15)% (1.76)% 4.48 % 6.84 % 7.55 % 5.01 Equity Portfolios FMI~ T High QaaGt~- Gro~c-th Portfolio $22,716 (6.45)% 0.7I ° o (6.48)° o (L56)'% 7.36 `%~ 8.45 % 2.53 ° 0 3.38 ° o RusseU1000 Growth (7.20)% 1.26 % (9.75)% (5.96)% 5.92 % 7.33 % 1.08 % 0.96 FMI~TDi~ersified Vahie Portfolio $16,997 (15.30)'% (10.19)'% (27.23)'% (32.68)'% N/A N/A N/A N/A RusseU1000 Yalue (9.57)% (5.32)% (18.59)% (18.79)% 3.51 % 8.91 % 4.72 % 4.91 FMI~ T Rassell Iooo Enhanced Inael Portfolio 3 $56,869 (8.44)°,!~ (1.94)% (13.35)~~ o (11.08)/ 5.36 % 8.57 °/~ 2.97 % N/A RusseU1000 (8.31)% (1.90)% (14.08)% (12.38)% 4.80 % 8.22 % 3.01 % 3.38 FMI~ T Dim ersifled Small Cap Egait~- Portfolio $35,754 (8.OI)°/, (2.02)% (9.00)`% (5.74)`% 7.30 °/, 11.43 %~ 9.I5 °/~ N/A RusseU2000 (7.70)% 0.58 % (13.52)% (16.19)% 3.79 % 10.29 % 5.63 % 5.52 FMI~ T hiter7iational Blend Portfolio $31,470 (7.OI)° 0 0.6I % (IL68)"/0 (8.69)° 0 14.70 ° o N/A N/A N/A MSCI SAFE (8.16) % (1.93) % (12.11) % (10.15) % 13.34 % 17.16 % 9.46 % 6.22 I Porfolio Guidelines updated as ofDecember2007. Name changed June 2008. a Index Returns presented represent the Lehman Brothers Intermediate Government/Credit (Ex Baa)-I-ABS-I-MBS. a Portfolio renamed and manager changed in August2007. a June data notavailable as offulyl8, 2008. Prepared bj~: Asset Consulting Group ~ Florida Munic'r~~l Inueskrrlent Trust Florida Municipallnvestment Trust Summary of Performance Returns - Net ofAll Fees and Expenses Periods Ending June 30, 2008 Market Valves Sept. 30, (000)'s Month Qtr. FYTD 1 Year 3 Years 5 Years 7 Years 10 Years Fixed Income Portfolios FMI~ T High (ZnaGt~- Goy eiYiment Fluid i $118,709 0.18 ° 0 0.54 ° 0 2.84 % 4.24 '% 4.59 " 0 3.40 % N/A N/A Enhanced Cash Annualized 2.16 % 2.16 % 3.79 % 4.24 90 Day Treasury Bill 0.18 % 0.32 % 2.27 % 3.64 % 4.27 % 3.18 % 2.86 % 3.63 FMI~ T High Qnalit~-1-3 Year Bond Fluid $363,050 0.38 % (0.04)" 0 4.25 °/, 6.52 % 4.64 '%, 3.41 % 3.94 " ~~ 4.58 °/, Merrilll-3 Yr Governmentlndex 0.30 % (0.72)% 4.50 % 7.18 % 4.73 % 3.33 % 4.03 % 4.73 FMI~ T Inteti7nediate High Qnalit~-Bond Fetid $221,910 0.32 '%, (1.07)° 0 4.92 % 8.19 '% 4.59 "/~ 3.86 °/, 5.00 ° 0 5.43 Lehman High QualitylntermedrateAggreg-ate 2 (0.12)% (1.02)% 4.45 % 7.41 % 4.42 % 3.87 % 5.19 % 5.62 FMI~ T Broad Market High Qnalit~- Bond Fetid $130,790 0.37 ° u (1.29)% 5.34 '% 8.80 `% 4.52 ° 0 4.02 % 5.09 %~ 5.33 '% Lehman BrothersA+Aggreg-ate (0.04)% (1.12)% 4.44 % 7.52 % 4.22 % 3.88 % 5.40 % 5.68 FMIvT Expanded High field Bond Fetid ~ N/A N/A N/A N/A N/A N/A N/A N/A Lehman Brothers High Yield 2% Constrained Index (2.47)% 1.94 % (2.15)% (1.76)% 4.48 % 6.84 % 7.55 % 5.01 Equity Portfolios FMI~ T High Qnalit~- GroR-th Portfolio $22,716 (6.46)'%, 0.58 '' o (6.93)° o (2.20)'% 6.66 ° 0 7.77 '%~ 1.87 '% 2.76 °/, RusseU1000 Growth (7.20)% 1.26 % (9.75)% (5.96)% 5.92 % 7.33 % 1.08 % 0.96 FMI~ T Dig°ersifled Vahce Portfolio $16,997 (15.34)% (10.38)"/0 (27.74)'% (33.32)° o N/A N/A N/A N/A RusseU1000 Yalue (9.57)% (5.32)% (18.59)% (18.79)% 3.51 % 8.91 % 4.72 % 4.91 FMIcT Russell 1000 Enhanced hider Portfolio ' $56,869 (8.44)"/, (1.97)% (13.47)`% (11.30)`% 5.13 °/, 8.32 °/, 2.76 % N/A RusseU1000 (8.31)% (1.90)% (14.08)% (12.38)% 4.80 % 8.22 % 3.01 % 3.38 FMI~ T Dim ersifled Small Cap Egnit~-Portfolio $35,754 (8.04)°/~ (2.16)°/u (9.42)'% (6.33)° 0 6.62 ~%, 10.73 % 8.41 °/u N/A RusseU2000 (7.70)% 0.58 % (13.52)% (16.19)% 3.79 % 10.29 % 5.63 % 5.52 FMI~ T Inteti7iational Blend Portfolio $31,470 (7.08)°/~ 0.38 % (12.33)° o (9.59)'% 13.59 % N/A N/A N/A MSCI SAFE (8.16) % (1.93) % (12.11) % (10.15) % 13.34 % 17.16 % 9.46 % 6.22 I Porfolio Guidelines updated as ofDecember2007. Name changed June 2008. a Index Returns presented represent the Lehman Brothers Intermediate Government/Credit (Ex Baa)-I-ABS-I-MBS. a Portfolio renamed and manager changed in August2007. a June data notavailable as offulyl8, 2008. Prepared bj~: Asset Consulting Group 1'1~orid~ I.t~ufe~~•o1'Ci#ic~, Tnc, aepartinent of Firtan€ia1 Sersri~es For more information... Dustin Heintz Investment Services Manager Florida League of Cities, Inc. (850)701-3614 dheintz na,flcities .com Paul Shamoun Retirement Services Manager Florida League of Cities, Inc. (850)701-3648 ptshamoun(a~,flcities. com Or visit our website at www. fmivt. com