AGENDA MARCH 9, 2011 5:00 PM 1. Meeting called to order 2. A ...

Tohopekaliga Water Authority Investment Report – Quarter Ended December 31, 2010Agency and U.S. Treasury benchmarks as a result of the higher incomegenerated by corporate securities.Duration Adjusted Returns of Merrill Lynch 1-3 Year IndicesQuarterly and 12-Month Total Return as of December 31, 20105%4%3%2%1%0%-1%Improving credit and stable spreads led us generally to increase corporateholdings to take advantage of the incremental yield offered on highlyratedissuers. We will remain cautious with regard to issuer concentrationdue to continued expectations of high volatility and uncertaintysurrounding the pace of economic recovery, which may impact creditspreads.Economic Outlook2.35% 2.36%-0.15% -0.09% 0.11%3.96%U.S. Treasury Federal Agency AA/AAA CorporateCurrent QuarterPast 12 MonthsSource data: Bank of America Merrill Lynch; BloombergDuration-adjusted return incorporates an adjustment to the market value return(but not the income return) of each benchmark to account for their varieddurations, making it easier for investors to assess the relative risk and return ofbenchmarks of different lengths.Economic data indicated some signs of improvement in the fourthquarter. GDP appeared to accelerate towards the end of the year.The housing sector remained weak and continues to be a drag on theeconomy. Housing starts remained at depressed levels throughout thequarter and new home sales remain well below 15-year historicalaverages. The Case-Shiller Home-Price Index continued to show fallinghome prices, and building permits remained disappointing throughout thequarter.While the unemployment rate remains elevated, there have been somepositive developments in the labor market. December’s initial joblessclaims number of 388,000 was the lowest level since July 2008, whileboth the 3- and 6-month moving averages for initial jobless claims appearto show a downward trend from mid-2010 plateaus as illustrated in theaccompanying chart. Continuing jobless claims also demonstrate a similardownward trend.Initial Jobless Claims, ThousandsCurrent vs. 3-Month Moving Average vs. 6-Month Moving AverageJanuary 1, 2009 to December 31, 2010700600500400300200100-Jan 09 Apr 09 Jul 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 106-month Moving Average 3-month Moving Average Current ReadingSource data: BloombergHowever, the consumer remains strained as personal income and personalspending showed only marginal improvements in the fourth quarter. Forthe year, over 1.5 million Americans filed for personal bankruptcy, whichrepresents a 9% increase from 2009.Economists generally expect that the passing of the Tax Relief,Unemployment Insurance Reauthorization, and Job Creation Act of 2010PFM Asset Management LLC Section A - 3