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HomeMy Public PortalAbout2022-08-16-LSAThis Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603-0220, ext. 200. Procedures for Addressing the Council IN ORDER TO EXPEDITE CITY COUNCIL BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE COUNCIL SUBMIT YOUR COMMENTS IN ADVANCE TO CITYCLERK@LYNWOOD.CA.US OR FILL OUT A FORM PROVIDED AT THE PODIUM, AND TO TURN IT IN TO THE CITY CLERK PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL. AGE N D A City of Lynwood as Succe ssor Age ncy to the Lynwood Re de v e lopme nt Agency TO BE HE L D ON August 16, 2022 CO U N C I L C H A MB ERS - 11350 BULLI S RD. LY NWOOD, CA 90262 or We b confe rence via ZOO M - To participate v ia Zoom or by telephone : 1-669-900-9128 or 1-253-215-8782 Mee ting I D: 835 2029 8238 Duly Poste d on 8/12/2022 By MQ 6:00 PM 1.C ALL TO OR D ER 2.C E R T IF IC ATION OF AGE N D A P OS T IN G B Y S E C R E TARY 3.R OL L C AL L OF ME MB E R S J orge C asanova, Mayor J ose L uis S olache, Mayor P ro Tem Oscar F lores, C ouncil Member Mari sela S antana, C ouncil Member Ri ta S oto, C ouncil Member P U B L IC OR AL C OMMU N IC AT ION S (Regarding Agenda Items Only) N ON-AGE N D A P U B LIC OR AL C OMMU N IC AT ION S THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE LYNWOOD SUCCESSOR AGENCY ON ITEMS WITHIN THE JURISDICTION OF THE LYNWOOD SUCCESSOR AGENCY AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION OF THE ISSUE BY LYNWOOD SUCCESSOR AGENCY, BUT LYNWOOD SUCCESSOR AGENCY MAY REFER THE Lynwood Successor Agency - Page 1 of 31 MATTER TO STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54954.2 (a).) C ON SEN T C AL E N D AR ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION. 4.T R E AS U R E R'S MON T H LY IN V E S T ME N T R E P OR T Comments: The purpose of this item is to have the Honorable Mayor and the Lynwood C ity C ouncil, as S uccessor to Lynwood Redevelopment B oard revi ew the Treasurer ’s Monthly Investment Report as requi red by S tate S tatutes. (C T) Recommendation: The followi ng is the Investment Report for the month ending J uly 31, 2022. This report is provi ded to ensure the C i ty C ouncil is i nformed of the D epartment’s investment acti vities. The report satisfies the recommended reporting requi rements of the C ity of Lynwood, which addresses the C ity C ouncil’s request for monthly financial information. It is recommended that the C ity C ouncil for the C ity of Lynwood receive and file the attac hed Monthly Investment R eport. AD J OU R N ME N T C ITY O F LYN W OO D A S S UC C E S S O R A GE NC Y TO THE LYNW OO D R E D E V E L O P M E NT A G E NC Y M E E TINGS W IL L B E P O S TE D A S NE E D E D . THE NE X T M E E TING W IL L B E HE L D IN THE C OUNC IL C HA M B E RS O F C ITY H A L L A NNE X , 11350 B UL L IS RO A D , C ITY OF LYNW O OD , C A L IF ORNIA . Lynwood Successor Agency - Page 2 of 31 A genda I tem # 4. AGENDA STAF F REPORT D AT E: A ugust 16, 2022 TO: Honorable Mayor and Members of Lynwood C ity C ouncil, as S uccessor to Lynwood Redevelopment B oard AP P R OV E D B Y: E rnie Hernandez, C ity Manager P R E PAR E D B Y: Gabriela C amacho, C ity Treasurer S heila Harding, D eputy C ity Treasurer S U B J E C T: TRE A S URE R'S M O N TH LY INV E S TME NT RE P ORT Recommendation: The following is the Investment Report for the month endi ng J uly 31, 2022. Thi s report is provi ded to ensure the C ity C ouncil is i nformed of the D epartment’s investment activi ti es. The report satisfies the recommended reporting requirements of the C i ty of Lynwood, which addresses the C ity C ouncil’s request for monthly fi nancial information. It is recom mended that the C ity C ouncil for the C ity of Lynwood rec eive and file the attached Monthly Investment R eport. Background: Government C ode S ection 53607, last amended 1996, with reference to the reporting of investment transacti ons states that the Treasurer shall make a monthly report of those transacti on to the legislative body. Government C ode S ection 53646 (b) (1), last amended 2004, with reference to discussion related to establishment of an Investment P olicy and i nvestment reporting states that “the Treasurer may render a quarterly report”. To determi ne the applicable code inasmuch as reference to Government C ode S ection 53607 or non-compli ance thereof has never been included i n past audit findings. While Government C ode S ection 53646 (b) (1) which is the most current version related to Investment Reporting utilizes the word “may” indicating the reporting mechanism is optional, to err on the side of caution, and in order to ensure that we are in compliance with all Government C odes, a new procedure of submitting monthly reports to the C ouncil/A gency agenda was implemented. A ttached for C ouncil/A gency revi ew is the C ity’s/A gency’s Monthly Treasurer ’s Report. S ubsequent reports will be provided on a monthly basis at the second meeting of each month. Discussion and Analysis: Lynwood Successor Agency - Page 3 of 31 The investment transactions were executed i n accordance with the C ity's Investment P olicy and the C ali forni a S tate Government C ode S ection 5346(b)(3) that requires the general fund is able to meet its expenditure requirements for the next six months. Fiscal Impact: The action recommended in this report will not have a fiscal impact on the C ity. Coordinated With: F HN F inanci al Main S treet A dvisors currently monitors the C ity’s i nvestment activities. AT TAC H ME N T S: Description AC TIV IT Y & P E R F OR MAN C E S U MMARY - JU LY 2022 F H N E C ON OMIC U PD ATE - J U LY 2022 E C ON OMIC & MON ETARY P OL IC Y - J U LY 2022 Lynwood Successor Agency - Page 4 of 31 ACTIVITY & PERFORMANCE SUMMARY JULY 2022 1 The following is the City’s cash flow and the monthly investment report. The monthly report includes a summary of the City’s investment portfolio, a monthly review of the investment market as prepared by the investment managers and detailed information on monthly transactions, cash flows and investments by issuer. FHN Investment Advisors manage the portion of investments not invested by LAIF (State Local Agency Investment Fund). The tables below provide key statistics regarding the City’s cash flow and investment portfolio as of July 31, 2022. Type Balances Held Cash - US Bank $ 32,615,052.64 Cash - JPMorgan Chase Bank $ 7,717,688.79 Local Agency Investment Fund $ 9,563,138.29 FHN Investment Advisors/BNY $ 21,153,534 .75 TOTAL $ 49,895,879.72 FHN ACCOUNT SUMMARY July 2022 June 2022 Market Value $30,716,673 $25,569,356 Book Value $31,306,790 $26,223,310 Variance -$590,117 -$694,864 Par Value $31,267,560 $26,223,310 Net Asset Value $98.12 $97.35 Book Yield 1.42% 1.20% Market Yield 2.18% 2.32% Years to Maturity 1.37 1.55 Effective Duration 1.27 1.44 FHN INVESTMENT COMPLIANCE % % Company Book Value of Portfolio of Total US Treasuries 6,501,174.89 20.77% 100% US Federal Agencies 3,821,956.14 12.21% 100% Supranational Obligations 0.00 0% 30% LAIF 9,563,138.29 30.55% 75% Commercial Paper 0.00 0.00 25% Money Market Funds 5,188,421.30 16.57% 20% Negotiable Certificates of Deposit 4,215,221.83 13.46% 30% Corporate Obligations 2,016,877.55 6.44% 30% State and Local Governments 0.00 0% 100% Lynwood Successor Agency - Page 5 of 31 ACTIVITY & PERFORMANCE SUMMARY JULY 2022 2 All of the City’s rated investments were rated “A” or higher by at least two rating agencies on June 30, 2022. The City’s investments comply with its current investment policy, which emphasizes the safety, liquidity, and return of its investments, allowing the city to meet its expenditures for the next six months. FHN INCOME EARNED SUMMARY June Month End Fiscal Year to Date Interest Interest Received/Purchased. 44,249.20 44,249.20 Plus Accrued Interest at End of Period 54,619.36 54,619.36 Less Accrued Interest at Beginning of Period -74,680.06 -74,680.06 Interest Earned During Period 24,188.50 24,188.50 Total Adjustments for Amortization/Accretion -1,678.82 -1,678.82 Total Capital Gains or Losses 0.00 0.00 Total Earnings During Period 22,509.68 22,509.68 PURCHASES & MATURITIES PURCHASE(S) SETTLEMENT DATE NAME TRANSACTION TYPE ISSUER PAR VALUE MARKET VALUE RATING 7/7/22 Capital One Bank NA Purchase Cert of Deposit 248,000.00 256,515.32 NR 7/7/22 Ally Bank Purchase Cert of Deposit 248,000.00 253,202.90 NR Discover Bank Purchase Cert of Deposit 248,000.00 255,933.73 NR REDEMPTION(S) MATURITY DATE NAME TRANSACTION TYPE ISSUER REDEMPTION COUPON RATE INTEREST 6/13/2022 Royal Bank of Canada, NY Mature Comm Paper 350,000.00 0.000% 0.00 Lynwood Successor Agency - Page 6 of 31 Monthly Economic and Market Update July 2022 Lynwood Successor Agency - Page 7 of 31 Economic and Market Update *Estimates for the current quarter/month, some data are lagged Sources: FHN Main Street and Bloomberg 7/31/2022 Item 7/31/2022 6/30/2022 Change U.S. Payrolls Monthly Change 528,000 398,000 130,000 Unemployment Rate 3.5%3.6%(0.1%) Labor Force Participation 62.1%62.2%(0.1%) Effective Fed Funds Rate 2.32%1.58%0.74% 2 Year T-Note 2.89%2.96%(0.07%) 3 Month T-Bill 2.36%1.67%0.70% 3 Year T-Note 2.81%3.01%(0.20%) 5 Year T-Note 2.68%3.04%(0.36%) 10 Year T-Note 2.65%3.02%(0.37%) U.S. Fed Debt Avg Yield*1.70%1.61%0.09% 30 Year Mortgage Rate 5.28%5.83%(0.55%) 1-5 Yr Agency Spread 0.05%0.03%0.02% 1-5 Yr A-AAA Corporate Spread 0.66%0.80%(0.14%) Dow Jones 32,845 30,775 6.7% S&P 500 4,130 3,785 9.1% Consumer Price Index YOY*8.8%9.1%(0.3%) U.S. Avg Regular Unleaded $4.21 $4.84 ($0.63) Retail Sales YOY*9.7%8.4%1.3% Case-Shiller Home Prices YOY*20.5%21.1%(0.7%) Consumer Confidence 98.7 103.2 (4.5) Gold (per ounce)$1,765.94 $1,807.27 ($41.33) Dollar Index 105.90 104.69 1.22 2Lynwood Successor Agency - Page 8 of 31 Economic and Market Update * Real Rate (Inflation Adjusted) Source: Bureau of Economic Analysis Estimate: Bloomberg's Survey of Economists As of: 7/31/2022 7/31/2022 2. 9 -1. 4 5. 2 4. 7 1. 8 3. 3 2. 3 1. 3 0. 6 2. 4 1. 2 2. 4 2. 0 1. 9 2. 3 2. 9 3. 8 3. 1 3. 4 1. 9 0. 9 2. 4 3. 2 2. 8 1. 9 -5. 1 -31 . 2 33 . 8 4. 5 6. 3 6. 7 2. 3 6. 9 -1. 6 -0. 9 1. 7 1. 4 1. 1 1. 1 -45 -35 -25 -15 -5 5 15 25 35 45 Q4 2 0 1 3 Q1 2 0 1 4 Q2 2 0 1 4 Q3 2 0 1 4 Q4 2 0 1 4 Q1 2 0 1 5 Q2 2 0 1 5 Q3 2 0 1 5 Q4 2 0 1 5 Q1 2 0 1 6 Q2 2 0 1 6 Q3 2 0 1 6 Q4 2 0 1 6 Q1 2 0 1 7 Q2 2 0 1 7 Q3 2 0 1 7 Q4 2 0 1 7 Q1 2 0 1 8 Q2 2 0 1 8 Q3 2 0 1 8 Q4 2 0 1 8 Q1 2 0 1 9 Q2 2 0 1 9 Q3 2 0 1 9 Q4 2 0 1 9 Q1 2 0 2 0 Q2 2 0 2 0 Q3 2 0 2 0 Q4 2 0 2 0 Q1 2 0 2 1 Q2 2 0 2 1 Q3 2 0 2 1 Q4 2 0 2 1 Q1 2 0 2 2 Q2 2 0 2 2 Q3 2 0 2 2 Q4 2 0 2 2 Q1 2 0 2 3 Q2 2 0 2 3 Pe r c e n t U.S. GDP (Quarter over Quarter Annualized)* Estimates 3Lynwood Successor Agency - Page 9 of 31 Economic and Market Update Source: Bureau of Labor Statistics 12 Month Average Job Change 508,455 7/31/2022 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 Ja n - 1 8 Ap r - 1 8 Ju l - 1 8 Oc t - 1 8 Ja n - 1 9 Ap r - 1 9 Ju l - 1 9 Oc t - 1 9 Ja n - 2 0 Ap r - 2 0 Ju l - 2 0 Oc t - 2 0 Ja n - 2 1 Ap r - 2 1 Ju l - 2 1 Oc t - 2 1 Ja n - 2 2 Ap r - 2 2 Mi l l i o n s U.S. Monthly Non-Farm Payrolls Change -25.0 -20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 Ja n - 1 8 Ap r - 1 8 Ju l - 1 8 Oc t - 1 8 Ja n - 1 9 Ap r - 1 9 Ju l - 1 9 Oc t - 1 9 Ja n - 2 0 Ap r - 2 0 Ju l - 2 0 Oc t - 2 0 Ja n - 2 1 Ap r - 2 1 Ju l - 2 1 Oc t - 2 1 Ja n - 2 2 Ap r - 2 2 Mi l l i o n s U.S. Monthly Non-Farm Payrolls YOY Change 4Lynwood Successor Agency - Page 10 of 31 Economic and Market Update Source: Bureau of Labor Statistics 7/31/2022 0 5 10 15 20 25 30 Ja n - 1 8 Ma r - 1 8 Ma y - 1 8 Ju l - 1 8 Se p - 1 8 No v - 1 8 Ja n - 1 9 Ma r - 1 9 Ma y - 1 9 Ju l - 1 9 Se p - 1 9 No v - 1 9 Ja n - 2 0 Ma r - 2 0 Ma y - 2 0 Ju l - 2 0 Se p - 2 0 No v - 2 0 Ja n - 2 1 Ma r - 2 1 Ma y - 2 1 Ju l - 2 1 Se p - 2 1 No v - 2 1 Ja n - 2 2 Ma r - 2 2 Ma y - 2 2 Pe r c e n t Unemployment Rates U.S.A Nevada California Idaho Washington Hawaii Oregon Utah 5Lynwood Successor Agency - Page 11 of 31 Economic and Market Update Source: Bureau of Labor Statistics 7/31/2022 128 130 132 134 136 138 140 142 144 146 148 150 152 154 Ju l - 1 2 Fe b - 1 3 Se p - 1 3 Ap r - 1 4 No v - 1 4 Ju n - 1 5 Ja n - 1 6 Au g - 1 6 Ma r - 1 7 Oc t - 1 7 Ma y - 1 8 De c - 1 8 Ju l - 1 9 Fe b - 2 0 Se p - 2 0 Ap r - 2 1 No v - 2 1 Ju n - 2 2 Mi l l i o n s U.S. Number of Employed Full-Time and Part-Time 60.0 60.5 61.0 61.5 62.0 62.5 63.0 63.5 64.0 Ju l - 1 2 Fe b - 1 3 Se p - 1 3 Ap r - 1 4 No v - 1 4 Ju n - 1 5 Ja n - 1 6 Au g - 1 6 Ma r - 1 7 Oc t - 1 7 Ma y - 1 8 De c - 1 8 Ju l - 1 9 Fe b - 2 0 Se p - 2 0 Ap r - 2 1 No v - 2 1 Ju n - 2 2 Pe r c e n t U.S. Labor Force Participation Rate 6Lynwood Successor Agency - Page 12 of 31 Economic and Market Update Source: Department of Labor and Bloomberg 7/31/2022 Weekly Initial Jobless Claims is the actual number of people who have filed for Unemployment benefits for the first time. The following five eligibility criteria must be met in order to file for unemployment benefits: 1. Meet the requirements of time worked during a 1 year period (full time or not). 2. Become unemployed through no fault of your own (cannot be fired). 3. Must be able to work; no physical or mental holdbacks. 4. Must be available for work. 5. Must be actively seeking work. 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 19 9 5 19 9 6 19 9 7 19 9 8 19 9 9 20 0 0 20 0 1 20 0 2 20 0 3 20 0 4 20 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 20 1 3 20 1 4 20 1 5 20 1 6 20 1 7 20 1 8 20 1 9 20 2 0 20 2 1 Mi l l i o n s Weekly Initial Jobless Claims (4 Week Moving Average) 7Lynwood Successor Agency - Page 13 of 31 Economic and Market Update *Real: Inflation Adjusted Source: U.S. Census Bureau Source: Conference Board 7/31/2022 -30 -20 -10 0 10 20 30 40 50 60 Ja n - 1 8 Ap r - 1 8 Ju l - 1 8 Oc t - 1 8 Ja n - 1 9 Ap r - 1 9 Ju l - 1 9 Oc t - 1 9 Ja n - 2 0 Ap r - 2 0 Ju l - 2 0 Oc t - 2 0 Ja n - 2 1 Ap r - 2 1 Ju l - 2 1 Oc t - 2 1 Ja n - 2 2 Ap r - 2 2 Pe r c e n t U.S. Real* Retail Sales YOY % Change 40 50 60 70 80 90 100 110 120 130 140 Ja n - 1 2 Ju l - 1 2 Ja n - 1 3 Ju l - 1 3 Ja n - 1 4 Ju l - 1 4 Ja n - 1 5 Ju l - 1 5 Ja n - 1 6 Ju l - 1 6 Ja n - 1 7 Ju l - 1 7 Ja n - 1 8 Ju l - 1 8 Ja n - 1 9 Ju l - 1 9 Ja n - 2 0 Ju l - 2 0 Ja n - 2 1 Ju l - 2 1 Ja n - 2 2 Ju l - 2 2 In d e x V a l u e U.S. Consumer Confidence 8Lynwood Successor Agency - Page 14 of 31 Economic and Market Update CPIX: Consumer Price Index, excluding food and energy PCEC: Personal Consumption Expenditure Core Source: Bureau of Labor Statistics and Bureau of Economic Analysis 7/31/2022 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Ja n - 1 8 Ap r - 1 8 Ju l - 1 8 Oc t - 1 8 Ja n - 1 9 Ap r - 1 9 Ju l - 1 9 Oc t - 1 9 Ja n - 2 0 Ap r - 2 0 Ju l - 2 0 Oc t - 2 0 Ja n - 2 1 Ap r - 2 1 Ju l - 2 1 Oc t - 2 1 Ja n - 2 2 Ap r - 2 2 Pe r c e n t CPI and CPIX YOY % Change CPI CPIX 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Ja n - 1 8 Ap r - 1 8 Ju l - 1 8 Oc t - 1 8 Ja n - 1 9 Ap r - 1 9 Ju l - 1 9 Oc t - 1 9 Ja n - 2 0 Ap r - 2 0 Ju l - 2 0 Oc t - 2 0 Ja n - 2 1 Ap r - 2 1 Ju l - 2 1 Oc t - 2 1 Ja n - 2 2 Ap r - 2 2 Pe r c e n t PCE and PCEC YOY % Change PCE PCEC 9Lynwood Successor Agency - Page 15 of 31 Economic and Market Update Sources: New (U.S. Census Bureau),Existing (National Assoc. of Realtors) Source: Case-Shiller Seasonally Adjusted Annual Rate 7/31/2022 0 2 4 6 8 10 12 14 16 18 20 22 24 Fe b - 1 4 Ju l - 1 4 De c - 1 4 Ma y - 1 5 Oc t - 1 5 Ma r - 1 6 Au g - 1 6 Ja n - 1 7 Ju n - 1 7 No v - 1 7 Ap r - 1 8 Se p - 1 8 Fe b - 1 9 Ju l - 1 9 De c - 1 9 Ma y - 2 0 Oc t - 2 0 Ma r - 2 1 Au g - 2 1 Ja n - 2 2 YO Y P e r c e n t Case-Shiller 20 City U.S. Home Price Index YOY % Increase 200 300 400 500 600 700 800 900 1,000 1,100 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 Ja n - 1 4 Ju l - 1 4 Ja n - 1 5 Ju l - 1 5 Ja n - 1 6 Ju l - 1 6 Ja n - 1 7 Ju l - 1 7 Ja n - 1 8 Ju l - 1 8 Ja n - 1 9 Ju l - 1 9 Ja n - 2 0 Ju l - 2 0 Ja n - 2 1 Ju l - 2 1 Ja n - 2 2 Ne w -Th o u s a n d s Ex i s t i n g -Mi l l i o n s U.S. New and Existing Home Sales Existing-Left New-Right 10Lynwood Successor Agency - Page 16 of 31 Economic and Market Update Source: U.S. Treasury 7/31/2022 $12 $13 $14 $15 $16 $17 $18 $19 $20 $21 $22 $23 $24 $25 $26 $27 $28 $29 $30 $31 $32 Ju l - 1 2 Ja n - 1 3 Ju l - 1 3 Ja n - 1 4 Ju l - 1 4 Ja n - 1 5 Ju l - 1 5 Ja n - 1 6 Ju l - 1 6 Ja n - 1 7 Ju l - 1 7 Ja n - 1 8 Ju l - 1 8 Ja n - 1 9 Ju l - 1 9 Ja n - 2 0 Ju l - 2 0 Ja n - 2 1 Ju l - 2 1 Ja n - 2 2 Tr i l l i o n s U.S. Federal Debt Outstanding 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7 Ju l - 1 2 Ja n - 1 3 Ju l - 1 3 Ja n - 1 4 Ju l - 1 4 Ja n - 1 5 Ju l - 1 5 Ja n - 1 6 Ju l - 1 6 Ja n - 1 7 Ju l - 1 7 Ja n - 1 8 Ju l - 1 8 Ja n - 1 9 Ju l - 1 9 Ja n - 2 0 Ju l - 2 0 Ja n - 2 1 Ju l - 2 1 Ja n - 2 2 Pe r c e n t U.S. Treasury Interest Bearing Debt Avg Rate 11Lynwood Successor Agency - Page 17 of 31 Economic and Market Update Fed Funds Anticipated Rate from the June 15, 2022 FOMC Meeting Source: Bloomberg 7/31/2022 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Ju l - 2 0 2 2 Au g - 2 0 2 2 Se p - 2 0 2 2 Oc t - 2 0 2 2 No v - 2 0 2 2 De c - 2 0 2 2 Ja n - 2 0 2 3 Fe b - 2 0 2 3 Ma r - 2 0 2 3 Ap r - 2 0 2 3 Ma y - 2 0 2 3 Ju n - 2 0 2 3 Ju l - 2 0 2 3 Au g - 2 0 2 3 Se p - 2 0 2 3 Oc t - 2 0 2 3 No v - 2 0 2 3 De c - 2 0 2 3 Ja n - 2 0 2 4 Fe b - 2 0 2 4 Ma r - 2 0 2 4 Ap r - 2 0 2 4 Ma y - 2 0 2 4 Ju n - 2 0 2 4 Ju l - 2 0 2 4 Au g - 2 0 2 4 Se p - 2 0 2 4 Oc t - 2 0 2 4 No v - 2 0 2 4 De c - 2 0 2 4 Ja n - 2 0 2 5 Fe b - 2 0 2 5 Ma r - 2 0 2 5 Ap r - 2 0 2 5 Ma y - 2 0 2 5 Ju n - 2 0 2 5 Pe r c e n t Fed Funds FuturesFed's Anticipated Rates Fed Funds Futures 12Lynwood Successor Agency - Page 18 of 31 Economic and Market Update Source: Bloomberg Figures may not total due to rounding 3M Maturity -0.072.962.892Y 0.162.782.941Y 0.382.492.866M 0.701.672.36 2.65 3.02 -0.37 Change6/30/227/29/22 7/31/2022 3Y 2.81 3.01 -0.20 30Y 3.01 3.19 -0.17 5Y 2.68 3.04 -0.36 10Y 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 3M 6M 1Y 2Y 3Yr 5Y 10Y 30Y Pe r c e n t U.S. Treasury Yield Curve Change 7/29/22 6/30/22 -60 -40 -20 0 20 40 60 80 3M 6M 1Y 2Y 3Y r 5Y 10 Y 30 Y Ba s i s P o i n t s Basis Point Change 13Lynwood Successor Agency - Page 19 of 31 Economic and Market Update Source: Bloomberg 7/31/2022 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 Ju n - 1 7 Se p - 1 7 De c - 1 7 Ma r - 1 8 Ju n - 1 8 Se p - 1 8 De c - 1 8 Ma r - 1 9 Ju n - 1 9 Se p - 1 9 De c - 1 9 Ma r - 2 0 Ju n - 2 0 Se p - 2 0 De c - 2 0 Ma r - 2 1 Ju n - 2 1 Se p - 2 1 De c - 2 1 Ma r - 2 2 Ju n - 2 2 Pe r c e n t U.S. Treasury Yields: 3M and 1Y 1Y 3M 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 3.25 Ju n - 1 7 Se p - 1 7 De c - 1 7 Ma r - 1 8 Ju n - 1 8 Se p - 1 8 De c - 1 8 Ma r - 1 9 Ju n - 1 9 Se p - 1 9 De c - 1 9 Ma r - 2 0 Ju n - 2 0 Se p - 2 0 De c - 2 0 Ma r - 2 1 Ju n - 2 1 Se p - 2 1 De c - 2 1 Ma r - 2 2 Ju n - 2 2 Pe r c e n t U.S. Treasury Yields: 2Y and 5Y 5Y 2Y 14Lynwood Successor Agency - Page 20 of 31 Economic and Market Update Source: Bloomberg 7/31/2022 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Ja n - 5 4 Ja n - 5 6 Ja n - 5 8 Ja n - 6 0 Ja n - 6 2 Ja n - 6 4 Ja n - 6 6 Ja n - 6 8 Ja n - 7 0 Ja n - 7 2 Ja n - 7 4 Ja n - 7 6 Ja n - 7 8 Ja n - 8 0 Ja n - 8 2 Ja n - 8 4 Ja n - 8 6 Ja n - 8 8 Ja n - 9 0 Ja n - 9 2 Ja n - 9 4 Ja n - 9 6 Ja n - 9 8 Ja n - 0 0 Ja n - 0 2 Ja n - 0 4 Ja n - 0 6 Ja n - 0 8 Ja n - 1 0 Ja n - 1 2 Ja n - 1 4 Ja n - 1 6 Ja n - 1 8 Ja n - 2 0 Ja n - 2 2 Pe r c e n t U.S. Treasury Yields 2Yr and 5Yr -Fed Funds Target Rate 5Yr 2Yr Fed Funds 15Lynwood Successor Agency - Page 21 of 31 Economic and Market Update Source: Bloomberg 7/31/2022 Global Treasury Rates 2 Year Yields 5 Year Yields 10 Year Yields -0.09% -0.05% 0.18% 0.26% 0.46% 0.53% 1.36% 1.70% 2.43% 2.88% 2.96% -4.0%-2.0%0.0%2.0%4.0% Japan Switzlnd France Germany Portugal Spain Italy England Australia USA Canada -0.03% 0.09% 0.52% 0.89% 1.03% 1.05% 1.58% 2.22% 2.61% 2.68% 2.78% -2.0%0.0%2.0%4.0% Japan Switzlnd Germany France Portugal Spain England Italy Canada USA Australia 0.18% 0.40% 0.81% 1.38% 1.84% 1.86% 1.91% 2.61% 2.65% 3.01% 3.06% 0.0%1.0%2.0%3.0%4.0% Japan Switzlnd Germany France Portugal England Spain Canada USA Italy Australia 16Lynwood Successor Agency - Page 22 of 31 Economic and Market Update ICE BofAML Index (option adjusted spread vs. Treasury)ICE BofAML Index (option adjusted spread vs. Treasury) 1-5Yr Non-Callable Agency (GVPB)Corporate A-AAA Excluding Yankee (CVAC) Source: ICE BofAML Indices 7/31/2022 Current Spread is 5 Current Spread is 66 -20 0 20 40 60 80 100 120 140 160 180 200 Ju n - 0 8 Ju n - 0 9 Ju n - 1 0 Ju n - 1 1 Ju n - 1 2 Ju n - 1 3 Ju n - 1 4 Ju n - 1 5 Ju n - 1 6 Ju n - 1 7 Ju n - 1 8 Ju n - 1 9 Ju n - 2 0 Ju n - 2 1 Ju n - 2 2 Ba s i s P o i n t s Spread: 1-5Yr Agency vs Treasury 0 50 100 150 200 250 300 350 400 450 500 550 600 650 Ju n - 0 8 Ju n - 0 9 Ju n - 1 0 Ju n - 1 1 Ju n - 1 2 Ju n - 1 3 Ju n - 1 4 Ju n - 1 5 Ju n - 1 6 Ju n - 1 7 Ju n - 1 8 Ju n - 1 9 Ju n - 2 0 Ju n - 2 1 Ju n - 2 2 Ba s i s P o i n t s Spread: 1-5Yr A-AAA Corporate vs Treasury 17Lynwood Successor Agency - Page 23 of 31 Economic and Market Update *ICE BofAML Index (option adjusted spread vs. Treasury)*ICE BofAML Index (option adjusted spread vs. Treasury) AAA Rated ABS (R0A1)CMO Agency 0-3Yr PAC (CM1P) Source: ICE BofAML Indices 7/31/2022 Current Spread is 98 Current Spread is 47 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 Ju n - 0 8 Ju n - 0 9 Ju n - 1 0 Ju n - 1 1 Ju n - 1 2 Ju n - 1 3 Ju n - 1 4 Ju n - 1 5 Ju n - 1 6 Ju n - 1 7 Ju n - 1 8 Ju n - 1 9 Ju n - 2 0 Ju n - 2 1 Ju n - 2 2 Ba s i s P o i n t s Spread: AAA Asset Backed vs Treasury -150 -100 -50 0 50 100 150 200 250 300 Ju n - 0 8 Ju n - 0 9 Ju n - 1 0 Ju n - 1 1 Ju n - 1 2 Ju n - 1 3 Ju n - 1 4 Ju n - 1 5 Ju n - 1 6 Ju n - 1 7 Ju n - 1 8 Ju n - 1 9 Ju n - 2 0 Ju n - 2 1 Ju n - 2 2 Ba s i s P o i n t s Spread: 0-3Yr Agency CMO vs Treasury 18Lynwood Successor Agency - Page 24 of 31 Economic and Market Update Source: Bloomberg 7/31/2022 -2.9 -2.5 -0.8 0.1 0.4 1.2 1.6 2.4 2.5 3.0 4.1 4.3 5.2 6.6 6.8 6.8 8.6 9.2 9.9 10.1 10.9 12.6 (4) (2) 0 2 4 6 8 10 12 14 Pe r c e n t Selected Sector Monthly Total Returns 19Lynwood Successor Agency - Page 25 of 31 Economic and Market Update Source: Bloomberg 7/31/2022 -20.1 -19.8 -19.7 -16.7 -13.8 -13.0 -9.6 -9.0 -8.1 -6.4 -5.7 -5.0 -4.7 -4.3 -4.2 -3.8 -3.3 -3.2 -0.2 14.2 30.1 54.1 (30) (20) (10) 0 10 20 30 40 50 60 Pe r c e n t Selected Sector Year-Over-Year Total Returns 20Lynwood Successor Agency - Page 26 of 31 Economic and Market Update Source: Bloomberg, FHN Main Street 7/31/2022 2.50 2.60 2.70 2.80 2.90 3.00 3.10 3.20 6/ 3 0 / 2 2 7/ 1 / 2 2 7/ 2 / 2 2 7/ 3 / 2 2 7/ 4 / 2 2 7/ 5 / 2 2 7/ 6 / 2 2 7/ 7 / 2 2 7/ 8 / 2 2 7/ 9 / 2 2 7/ 1 0 / 2 2 7/ 1 1 / 2 2 7/ 1 2 / 2 2 7/ 1 3 / 2 2 7/ 1 4 / 2 2 7/ 1 5 / 2 2 7/ 1 6 / 2 2 7/ 1 7 / 2 2 7/ 1 8 / 2 2 7/ 1 9 / 2 2 7/ 2 0 / 2 2 7/ 2 1 / 2 2 7/ 2 2 / 2 2 7/ 2 3 / 2 2 7/ 2 4 / 2 2 7/ 2 5 / 2 2 7/ 2 6 / 2 2 7/ 2 7 / 2 2 7/ 2 8 / 2 2 7/ 2 9 / 2 2 7/ 3 0 / 2 2 7/ 3 1 / 2 2 Pe r c e n t 5 Year Treasury Note Yield Fed Hikes Rates 0.75% Q2 GDP -0.9% Second Consecutive Quarterly Decline June CPI +1.3% Strong Jobs Report, Will Likely Keep Fed Aggressive Against InflationFOMC Minutes Show More Restrictive Rates May Be Needed Philly Fed Index Drops to -12.3 21Lynwood Successor Agency - Page 27 of 31 Economic and Market Update NI USS Source: Bloomberg, FHN Main Street 7/31/2022 30,000 30,500 31,000 31,500 32,000 32,500 33,000 6/ 3 0 / 2 2 7/ 1 / 2 2 7/ 2 / 2 2 7/ 3 / 2 2 7/ 4 / 2 2 7/ 5 / 2 2 7/ 6 / 2 2 7/ 7 / 2 2 7/ 8 / 2 2 7/ 9 / 2 2 7/ 1 0 / 2 2 7/ 1 1 / 2 2 7/ 1 2 / 2 2 7/ 1 3 / 2 2 7/ 1 4 / 2 2 7/ 1 5 / 2 2 7/ 1 6 / 2 2 7/ 1 7 / 2 2 7/ 1 8 / 2 2 7/ 1 9 / 2 2 7/ 2 0 / 2 2 7/ 2 1 / 2 2 7/ 2 2 / 2 2 7/ 2 3 / 2 2 7/ 2 4 / 2 2 7/ 2 5 / 2 2 7/ 2 6 / 2 2 7/ 2 7 / 2 2 7/ 2 8 / 2 2 7/ 2 9 / 2 2 7/ 3 0 / 2 2 7/ 3 1 / 2 2 Dow Jones Industrial Average Big Tech Firms Plan To Slow Hiring Fed Hikes Rates 0.75%June Retail Sales Beat Expectations Fed Chair Powell Doesn't See Recession As Likely US And Chinese Officials Discuss Rolling Back Tariffs Nord Stream Pipeline To Restart Gas Flow From Russia To Europe Bullard And Waller Downplay Recession Fears 22Lynwood Successor Agency - Page 28 of 31 KEY POINTS  Nonfarm payrolls rose 528,000 for the month and the unemployment rate was 3.5%, easily topping the Dow Jones estimates of 258,000 and 3.6%, respectively.  Wage growth also surged, as average hourly earnings jumped 0.5% for the month and 5.2% from a year ago, higher than estimates.  Traders are now pricing in a higher likelihood of a 0.75 percentage point hike for the next Federal Reserve meeting in September. Hiring in July was far better than expected, defying multiple other signs that the economic recovery is losing steam, the Bureau of Labor Statistics reported Friday. Nonfarm payrolls rose 528,000 for the month and the unemployment rate was 3.5%, easily topping the Dow Jones estimates of 258,000 and 3.6%, respectively. The unemployment rate is now back to its pre-pandemic level and tied for the lowest since 1969, though the rate for Blacks rose 0.2 percentage point to 6%. Wage growth also surged higher, as average hourly earnings jumped 0.5% for the month and 5.2% from the same time a year ago. Those numbers add fuel to an inflation picture that already has consumer prices rising at their fastest rate since the early 1980s. The Dow Jones estimate was for a 0.3% monthly gain and 4.9% annual increase. More broadly, though, the report showed the labor market remains strong despite other signs of economic weakness. “There’s no way to take the other side of this. There’s not a lot of, ‘Yeah, but,’ other than it’s not positive from a market or Fed perspective,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “For the economy, this is good news.” Markets initially reacted negatively to the report as traders anticipated a strong counter move from a Federal Reserve looking to cool the economy and in particular a heated labor market. However, the Dow Jones Industrial Average ended the day positive, rising about 74 points following a day of choppy trading. Leisure and hospitality led the way in job gains with 96,000, though the industry is still 1.2 million workers shy of its pre-pandemic level. Professional and business services was next with 89,000. Health care added 70,000 and government payrolls grew 57,000. Goods-producing industries also posted solid gains, with construction up 32,000 and manufacturing adding 30,000. Retail jobs increased by 22,000, despite repeated warnings from executives at Walmart, Target and elsewhere that consumer demand is shifting. Lynwood Successor Agency - Page 29 of 31 A more encompassing view of unemployment that includes those holding part-time jobs for economic reasons as well as discouraged workers not looking for jobs was unchanged at 6.7%. Despite downbeat expectations, the July gains were the best since February and well ahead of the 388,000 average job rise over the past four months. The BLS release noted that total nonfarm payroll employment has increased by 22 million since the April 2020 low when most of the U.S. economy shut down to deal with the Covid pandemic. Previous months’ totals were revised slightly, with May raised by 2,000 to 386,000 and June up 26,000 to 398,000. “The report throws cold water on a significant cooling in labor demand, but it’s a good sign for the broader U.S. economy and worker,” Bank of America economist Michael Gapen said in a client note. The BLS noted that private sector payrolls are now higher than the February 2020 level, just before the pandemic declaration, though government jobs are still lagging. The unemployment rate ticked down, the result both of strong job creation and a labor force participation rate that declined 0.1 percentage point to 62.1%, its lowest level of the year. Economists have figured job creation to begin to slow as the Federal Reserve raises interest rates to cool inflation running at its highest level in more than 40 years. The strong jobs number coupled with the higher-than-expected wage numbers led to a shift in expectations for September’s expected rate increase. Traders are now pricing in a higher likelihood of a 0.75 percentage point hike for the next meeting, which would be the third straight increase of that magnitude. “One the one hand, it gives the Fed more confidence that it can tighten monetary policy without leading to a widespread rise in unemployment,” said Daniel Zhao, lead economist for job review site Glassdoor. “But it also shows that the labor market isn’t cooling, or at least wasn’t cooling as fast as anticipated. ... At the very least, even though it’s a surprise, I think the Fed is still on track to continue tightening monetary policy.” The Fed has raised benchmark interest rates four times this year for a total of 2.25 percentage points. That has brought the federal funds rate to its highest level since December 2018. The economy, meanwhile, has been cooling significantly. Gross domestic product, the measure of all goods and services produced, has fallen for the first two quarters of 2022, meeting a common definition of a recession. White House and Fed officials as well as most Wall Street economists say the economy likely is not in an official recession, but the slowdown has been clear. “The recession debate at this point is more academic than anything else,” said Sonders, the Schwab strategist. “You can’t deny that growth has weakened. That’s the only point in bringing up two quarters of negative growth in GDP.” Lynwood Successor Agency - Page 30 of 31 The Fed rate hikes are aimed at slowing the economy, and in turn a labor market in which job openings still outnumber available workers by a nearly 2-to-1 margin. Bank of America said this week that its proprietary measures of labor market momentum show an employment picture that is still strong but slowing, due in large part to central bank policy tightening. The biggest reason for the retrenchment has been inflation that has been much stronger and more persistent than most policymakers had anticipated. Prices jumped 9.1% in June from a year ago, the fastest rate since November 1981. Correction: Prices jumped 9.1% in June from a year ago. An earlier version misstated the month. Lynwood Successor Agency - Page 31 of 31