The fourth quarter Treasurer's Report will be presented at Tuesday's Turlock Irrigation District Board of Directors meeting, reviewing the district's investment activity and transactions throughout the end of 2013.
According to Treasurer and Chief Financial Officer Joe Malaski, who will present the portfolio prepared by Public financial Management, Inc., the district has sufficient liquidity to meet budgeted expenditures for the next six months.
The investment strategy for the fourth quarter, as highlighted within the portfolio, was based on PFM's view that interest rates would trend gradually higher in anticipation of the Federal Reserve tapering its bond purchases. Key components including maintaining a defensive duration posture to protect portfolio value, emphasizing high-quality credit instruments as they offer value over Treasury and Federal Agency securities, and monitoring yield spreads and relative value between sectors.
Composed of a variety of security types, including U.S. Treasury and Federal Agency Obligations, negotiable certificates of deposit, corporate and municipal obligations, commercial paper, CAMP, and money market funds, the portfolio value totaled just over $117 million. According to PFM, the return of the district's portfolio exceed the return of the benchmark again this past quarter, as it has since its inception.
In 2014, PFM expects the yields of corporates to provide greater income return than treasuries and agencies, as they continue to seek to maximize the district's portfolio value through careful management.
Economic growth is reported at remaining moderate, although third quarter GDP surprised the market as the 4.1 percent annualized growth rate far exceeded the market expectation of 2 percent, according to the Bureau of Economic Analysis. Labor market conditions have shown continual signs of improving, as the economy added 2.2 million new jobs in 2013. According to the Bureau of Labor Statistics, the economy added only 74,000 new jobs in December, falling short of the market's expectation of 197,000. Regardless, the unemployment rate dropped to 6.7 percent by the end of 2013 - 1.2 percent lower than the end of 2012.
More highlights from the Investment Portfolio will be presented during Tuesday morning's meeting, where the Board of Directors are also expected to:
• Receive reports on electrical services, power, and water;
• Cancel the regular TID Board meeting of Feb. 4;
• Approve payment of warrants against TID for the period of Jan.29 through Feb. 4;
• Hold a meeting for the Walnut Energy Center Authority;
• Declare the district's official intent to use proceeds of taxable or tax-exempt indebtedness to reimburse itself for future project expenditures;
• Receive a financial services administration report.
The TID Board of Directors meeting will begin at 9 a.m. on Tuesday at the TID Main Office Building, located at 333 E. Canal Drive.