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<br />ATTY/AGR/2016.150/PFM-INVESTMENT ADVISORY SVC <br />REV: 06-22-16 JS <br />Page 14 of 16 <br />Credit Review Process <br />PFMAM employs an extensive issuer review process built upon its independent and in- <br />depth analysis of nongovernmental issuers. PFMAM’s Credit Committee is the <br />cornerstone of its issuer review process. The Committee is responsible for approving <br />new issuers, monitoring existing holdings, and maintaining PFMAM’s approved issuer <br />list. Issuers are added to PFMAM’s approved list only if they: <br /> <br />(1) Meet stringent credit requirements, <br />(2) Have stable or improving credit fundamentals, <br />(3) Are frequent issuers, and <br />(4) Offer yields which represent value in their respective sector and industry. <br /> <br />Daily Investment Procedures <br />The PFMAM portfolio management team will review the City’s portfolio on a daily basis. <br />The team will discuss market developments, product offerings, new issues, and the <br />potential impact of pending economic announcements will affect the portfolio. <br /> <br />The team will also review portfolio holdings, upcoming maturities, cash flows, and any <br />other specific directives. If a trade is identified, the trade process starts with a review of <br />market conditions and relative value relationships. In strict compliance with the City’s <br />Investment Policy, PFMAM will decide what sector and maturity to purchase—the one <br />with the best available combination of return and risk characteristics and which fulfills a <br />need within the portfolio. <br /> <br />Once executed, full details of all trades, including competitive bids and offers, will be <br />provided to the City’s staff on the same day as execution. The City will also have access <br />to all trading activity through PFMAM’s internet reporting site, Easy Online Network <br />(“EON”), the day after the trade and will receive a complete reconciled reporting of <br />transactions and holdings on a monthly basis. In addition, members of PFMAM‘s <br />engagement team will be available to answer any of the City’s questions as needed. <br /> <br />Reporting <br />PFMAM will use a sophisticated portfolio management, reporting, and investment <br />accounting system, CAMRA, (or its equivalent) to provide accurate and timely reports <br />on security transactions and portfolio positions and to track credit quality on issuers and <br />securities. Report include fair value, original and amortized cost, interest accruals, <br />purchases and sales of accrued interest, and more. CAMRA also provides the data <br />used for making decisions on investments. It interacts with Charles River, PFMAM’s <br />compliance software used to ensure adherence with investment policies and to <br />measure portfolio performance. <br />Report/Format Frequency <br />Daily Holdings (Internet only) <br /> <br />Daily Transactions (Internet only) <br /> <br />Daily Accounting Statement (Internet and by mail) <br />6.1.I. - Page 43