ITEM NO: __7c_Supp___________ 
DATE OF 
MEETING: February 25, 2014 
Annual Treasury And Investment
Portfolio Update for 2013 
Commission Briefing 
Presented by Craig Kerr 
Diane Campbell
February 25, 2014

Treasury Management Update 


2

Treasury Functions 
Compliance with Statute 
Cash Management 
Manage Banking Activities 
Execute Payments (ACH Credits, Wire Transfers as well as
Fund Check Issuance) 
Using appropriate approvals requiring a two
step process 
Coordinates Processes and Controls with
AFR and ICT 
3

Current Treasury Initiatives 
New banking contract 
Internal Intern 
Succession planning and enhanced training 
Remote capability testing 
Implement SEC regulations 

4

Treasury Staff 
"Deep Bench" for continuity and succession (Every
banking day has one treasury staff and one back-up staff) 
Craig Kerr, Treasury Manager, CTP 
Diane Campbell, Financial Analyst III, CTP 
Scott Bertram, Supervisor, Financial Analysis, CPA 
Hanh Nguyen, Manager Aviation Finance &
Budget- provides Airport redundancy 
Angie Rose, Accountant II, CPA-Internal Intern,
AFR cross training 
5

Investment Portfolio Update 


6

Background 
Commission Resolution Approved Port Investment
Policy 
2.0 Target Duration Plus Or Minus 50 Basis Points 
Do Not Forecast Rates; Balance RETURN And RISK
Over Cycles 
This Strategy Outperforms The Market When Rates Are
Falling And Underperforms When Rates Are Rising 
Benchmark  Bank of America Merrill Lynch
Treasury/Agency 3 Year Index 
7

Investment Policy Highlights 
Emphasis on preservation of principal 
Priority of Policy Objectives 
1) Safety 
2) Liquidity 
3) Yield 
Policy covers all capital and operating
funds: excludes funds held separately in
trust e.g. deferred compensation and
pension funds 
8

Investment Policy Highlights 
Establishes prudence, ethics, conflict of
interest and disclosure requirements for
investment officials 
Authorizes delegation of day-to-day
investment program duties and
responsibilities 
Provides for safekeeping and custody of Port
securities 
9

Investment Policy Highlights 
Establishes criteria for eligible depositories
and broker/dealers 
Sets out allowed investment instruments;
subject to State law 
Establishes Portfolio diversification
parameters 
Establishes maturity restrictions 

10

Investment Policy Highlights 
Sets portfolio performance standards 
Allows for independent review of the
Investment program 
State Auditor 
External Auditors 
Internal Auditor 
Establishes Reporting Standards 
Policy reviewed periodically and amended
as appropriate to follow best practices 
11

Portfolio Composition 
12/31/2013 










12

Interest Rate Trends 
For 2013, Short And Medium Term Rates Rose Gradually
into the Third Quarter Fell Slightly and Rose Again in
the Fourth Quarter. 
The Federal Reserve Left Short Term Rates at 2010
Levels For 2011, 2012 and 2013 - 0.25% 
Staff Monitors Market Conditions; but, Does Not Time
the Market. 
Short and Medium Term Rates Are Expected to Rise
Slowly in 2014. 

13

2013 Rates 



14

Treasury Yield Curve 



15

2013 Yield Comparison 
Benchmark      Port's Pool 
Q1-2013        0.26%          0.79% 
Q2-2013        0.39%          0.60% 
Q3-2013        0.35%          0.60% 
Q4-2013        0.41%          0.76% 
ANNUAL     0.35%        0.69% 

16

PORTFOLIO EARNINGS 2009 2013 




17

Yield History 
Year           Benchmark      Port's Pool 
2002 - 2006    3.13%           3.69% 
2007 - 2011    1.73%           3.08% 
2012         0.31%          1.02% 
2013         0.35%          0.69% 


Twelve Years  2.24%             2.97% 
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YIELD HISTORY 
Benchmark Yield        Port's Yield

5.2%
5.00%
4.78%
4.45%
4.2%
4.08%            4.07%            4.33%   4.04%
3.72%
3.57%
3.2%
2.76%
2.64%
2.50%            2.50%
2.2%                                                                           2.17%
2.01%
1.58%                                                              1.67%
1.2%                                                                   1.12%                    1.02%
0.72%                   0.69%
0.48%
0.31%
0.35%
0.2%
2002    2003    2004    2005    2006    2007    2008    2009    2010    2011    2012    2013


19

Port's Investment Portfolio Size
Fluctuates 
Port's Investment Portfolio 12/31/2013
Was $953 Million 
Over The Past 5 Years, The Size Has
Ranged From $639 Million to $976 Million 
Size Fluctuations Are Mostly Tied To
Capital Spending: 
Capital Project Spending Reduces The
Portfolio Size 
Bond Issues To Fund Projects Increase The
Portfolio 
20

Investment Pool Participating Funds 


Examples 
Minimum Operating Fund Balance: General & Airport Development = 9 months O&M
expense 
Operating Funds Available for Capital: General, Airport, Tax Levy funds programmed to
be spent over the next few years. 
Bond Funds: Capital projects 
Reserves & Security: Bond reserves, customer lease security 
Special Use (primarily for capital projects): Passenger & Customer Facility Charges,
Transportation & Infrastructure 
21