Originally Aired: January 12, 2021 | Slides

The initial session of this six-part fundamental investment webinar series addresses important investment-related terms, responsibilities, and objectives. This session will provide an introduction to terms and concepts used in the management of public funds and provide context as to why these terms are important to the public official. It will frame the roles and responsibilities of public sector officials and the private sector advisors or broker-dealers hired to assist the public agency, in addition to covering liability and ethical considerations they encounter. After completing this course, a successful learner will be able to:

• Define Public Investment Program Objectives: Safety, Liquidity, Yield
• Explain Fiduciary and the Prudent Person Rule
• Describe Roles and Responsibilities of Legislative Body, Investment Official, Oversight Committee/Advisory Committee, Investment Advisor, and a Broker/dealer
• Discuss Liability and Ethical Issues Faced by Public Investment Officials
• Recognize Investment Terms and Concepts Related to Components of a Debt Instrument, the Purchase and Sale of Investments, and the Time Value of Money

Rick Phillips, CCM
President & Chief Investment Officer
FHN Financial Main Street

Originally Aired: January 14, 2021 | Slides | Agency Profile Slides

This session addresses two fundamental components of public fund investments: permissible investments and a public agency investment policy. The Government Code prescribes the authorized investments for California public agencies. Using the government code as a minimum standard, a public agency develops an investment policy that best reflects the agency’s needs and priorities. An agency’s investment policy can be more restrictive than the government code. This session will address permissible investments and discuss the process of developing an investment policy, setting realistic investment goals, maintaining an agency’s investment objectives, measuring performance against investment objectives, and determining risk tolerance. After completing this course, a successful learner will be able to:

• Identify Permissible Investments Established in California Government Code
• Recognize Applicable CA Government Code Sections and Resources for Public Funds Investing
• Explain the Importance and Components of an Investment Policy

Note: This program included legislative updates incorporated when the program aired in 2021. Please review CDIAC’s LAIG for the most recent legislative updates.

Deborah Higgins
President
Higgins Capital Management

John Johnson
Chief Deputy Treasurer
County of San Bernardino

Don Patterson
Director of Finance &
Administrative Services
Las Virgenes Municipal
Water District

Originally Aired: January 19, 2021 | Slides | Agency Profile Slides

This session will introduce many issues considered relevant to constructing a public fund portfolio and provide a framework for building either a book yield or a total return portfolio. After completing this course, a successful learner will be able to:

• Discuss Key Challenges Linking Investment Policy to Portfolio Construction
• Describe how the Prudent Person Rule, Benchmark, and Performance Measurement apply to Portfolio Construction
• Differentiate Book Yield from Total Return

Note: This program included legislative updates incorporated when the program aired in 2021. Please review CDIAC’s LAIG for the most recent legislative updates.

Ben Finkelstein, CFA
Managing Director
Cantor Fitzgerald

Dan Matusiewicz
Former Finance Director and Treasurer
City of Newport Beach

Originally Aired: January 21, 2021 | Slides | Benchmarking Activity Excel File | LAIF Historical Data WEBB Query

This session focuses on benchmarking as a means to monitor and manage performance addressing the purpose and use of benchmarks, the benefits of benchmarking, the development of benchmarks, and the evaluation of investments against theses benchmark. After completing this course, a successful learner will be able to:

• Define Risk, Return, and Benchmark, As They Apply to Public Funds Investing
• Explain How Benchmarks Tie-in to Public Investment Program Objectives
• Consider Reliability of Economic Forecasts
• Differentiate Total Return and Yield

Originally Aired: January 27, 2022 | Slides

The case study will give participants the chance to build and manage a portfolio. Participants will consider the investment policy and portfolio objectives when selecting investments from a list of various securities and to account for the potential rise in rates. Each group will work through the analysis of the securities and portfolio and then present their investment decisions based on credit, price, yield, and convexity. After completing this session, a successful learner will be able to:

• Formulate Building and Rebalancing a Public Fund Investment Portfolio
• Select Investments While Considering Investment Policy and Permissible Investments
• Propose to Their Agency Ideas for Portfolio Analysis

Carlos Oblites
Senior Vice President and Portfolio Strategist
Chandler Asset Management

Neil Murthy
Relationship Manager
Chandler Asset Management

Originally Aired: January 28, 2021 | Accounting Slides | Reporting Slides | Agency Profile Slides

This session will introduce public funds investing accounting concepts such as mark-to-market, cost value, book value, and Governmental Accounting Standards Board (GASB) standards 31, 40, and 72. Also included will be the disclosure of investment policies and ways to create an open and transparent dialog with constituents and community members. After completing this course, a successful learner will be able to:

• Differentiate the Two Main Accounting Standards in the US
• Compare Accounting Valuation Methods
• Describe Requirements Under GASB 31, 40, and 72
• Identify Statutory Investment Reporting Requirements
• Define Required Content of the Quarterly Investment Report

Angelica (Angel) Hernandez
Deputy Executive Director
CDIAC

Karen Jones
Managing Director
PFM Asset Management

Jenny Leisz
Finance Director
South Coast Water District

Dan Matusiewicz
Treasurer
City of Newport Beach

Originally Aired: January 26, 2022 | Slides

At the core of public fund investment management is structuring the portfolio to meet an agency’s cash flow needs, this session will discuss why cash managers may shorten or lengthen maturities in the investment portfolio to meet the portfolio liquidity objectives. After completing this session, a successful learner will be able to:

• Define Different Types of Duration
• Identify How Other Municipalities Analyze Their Cash Flows
• Analyze Short-term Fixed Income Market Liquidity Options for Cash Flow
• Identify Resources for Trade Information, Such as Bloomberg and FINRA

Don Collins, Vice President of Capital Markets, Wedbush Securities
Hubie White, III, CFA, CTP, Chief Investment Officer, City and County of San Francisco

Originally Aired: February 1, 2022 | Slides

This session will provide the detailed analytical basis for understanding the types of risk public agencies face when investing public funds and discuss how an investment policy manages those risks. After completing this session, a successful learner will be able to:

• Differentiate Types Fixed Income Investment Risks Including: Inflation Risk, Interest Rate Risk, Liquidity Risk, Reinvestment Risk, and Credit Risk
• Interpret Strategies to Mitigate Fixed Income Investment Risks
• Illustrate Ideas on How to Integrate Risk Mitigation Strategies Into an Investment Policy

Jason Klinghoffer, CFA, Director, Debt Capital Markets, Mischler Financial Group
Bret Black, Principal Treasury Investment Officer, County of Kern

Originally Aired: February 8, 2022 | Slides

An Investment Policy is an essential component of a public agency’s investment management. This session will go beyond the prerequisite webinar, California Government Code, Legal Investments, and Investment Policy, and discuss how agencies work through the decision-making process to modify or add language to their policy. For example, speakers will discuss considerations regarding incorporating Environmental, Social, and Governance (ESG) language in their investment policy. After completing this session, a successful learner will be able to:

• Analyze Essential Components of an Investment Policy
• Use Resources to Develop, Maintain, and Certify an Investment Policy
• Examine How Other Agencies Integrate New or Complex Topics Into Their Policy
• Examine Sample Investment Policies

Moderator: Bill Blackwill, Managing Director, Stifel, Nicolaus & Co
Tara Dunn, Technical Assistance Manager, CDIAC
John Johnson, Chief Deputy Treasurer, County of San Bernardino
Michael Solorza, Director of Finance, City of Montebello

Originally Aired: February 10, 2022 | Slides

This session will give a brief overview of CDIAC’s Local Agency Investment Guidelines (LAIG) discuss recent LAIG changes. This year’s current topic is sophisticated approaches to investment management, such as structured agreements and other innovative--yet often complex--strategies that may require internal deliberation and legal counsel. The discussion may include the use of California Government Code in a more sophisticated manner, such as leveraging opportunities afforded by the updated accredited investor and qualified institutional buyer (QIB) rules, as well as the use of technology to manage investment operations and an exploration of grey areas in Government Code that pose challenges to local agencies. After completing this session, a successful learner will be able to:

• Access the LAIG
• Examine Recent Legislative Updates
• Formulate the Impacts of Recent Legislative Updates to Managing a Local Investment Portfolio
• Recognize Sophisticated Approaches to Investment Management

Angelica Hernandez, Deputy Executive Director, CDIAC
Monique Spyke, Managing Director, PFMAM

Originally Aired: February 22, 2022 | Slides

This session will explore the due diligence that should be performed prior to an investment purchase, such as the proper fit and allocation of a properly diversified public portfolio. This session will also consider advanced security selection, such as callable vs. bullet structures. The presenter will compare spreads using the Option Adjusted Spread (OAS) and yield spread analysis, and discuss the application of step-ups and floaters. After completing this session, a successful learner will be able to:

• Evaluate Strategies to Complete Due Diligence Prior to Purchase
• Devise How to Research How Pooled Investments Fit Into a Properly Diversified Portfolio
• Evaluate Callable vs. Bullet Structures
• Compare Spreads Using OAS and Yield Spread Analysis

Rick Phillips, President and Chief Investment Officer, FHN Financial Main Street Advisors

Originally Aired: February 24, 2022 | No Slides

Those involved in public fund investing likely won’t use an economic forecast to time the purchase or sale of investments, yet, they have a need to understand economic events as, at a minimum, their board or oversight committee might ask or want a presentation on these topics. Further, economic events can have drastic impacts on an agency’s liquidity and cash flow needs. This session will discuss fundamental economic concepts and offer a practical application of how this information can be translated for use by a public fund investment official. The Federal Open Market Committee will be discussed, in addition to its dual mandate to manage the world’s largest economy while using monetary policy to promote growth or cool an overheating economy. After completing this session, a successful learner will be able to:

• Evaluate Basic Economic Forecast Concepts
• Formulate How to Use Economic Forecast Information as a Public Investment Official
• Examine How Other Municipalities Provide Market Commentary to Their Board
• Manage Safety, Liquidity, Yield Message to Board Through Economic Cycles

Kevin P. Webb, CFA, Managing Director, Robert W. Baird & Co.