?Custom Portfolio of Individual Securities

?Fee Based Management ?Custom Portfolio of Individual Securities

?Fee Based Management ?Custom Portfolio of Individual Securities ?Fee Based Management ?Often Full Discretion within Investment Guidelines

?Custom Portfolio of Individual Securities ?Fee Based Management ?Custom Portfolio of Individual Securities ?Fee Based Management ?Fiduciary Relationship

Investment Guidelines Status Updates Municipality Portfolio Manager Portfolio Reporting, Performance & Compliance Investment Guidelines Status Updates Portfolio Reporting, Performance & Compliance

Municipality Portfolio Manager Broker/Dealer TRADES Investment Guidelines Status Updates Portfolio Reporting, Performance & Compliance Investment Guidelines Status Updates Portfolio Reporting, Performance & Compliance

Regulators Municipality Portfolio Manager Broker/Dealer TRADES Investment Guidelines Status Updates Portfolio Reporting, Performance & Compliance Investment Guidelines Status Updates Portfolio Reporting, Performance & Compliance

?Leverage Existing Resources

?Perfectly Aligned Incentives ?Leverage Existing Resources

?Professional Portfolio Management ?Leverage Existing Resources ?Perfectly Aligned Incentives ?Leverage Existing Resources ?Perfectly Aligned Incentives

?Legal Liability ?Leverage Existing Resources ?Perfectly Aligned Incentives ?Professional Portfolio Management ?Leverage Existing Resources ?Perfectly Aligned Incentives ?Professional Portfolio Management

?Disclosed Fees

?Relinquish Daily Involvement ?Disclosed Fees

?Market Risk on Unexpected Withdrawals versus LAIF ?Disclosed Fees ?Relinquish Daily Involvement ?Disclosed Fees ?Relinquish Daily Involvement

Data as of December 31, 2003

LAIF Data as of December 31, 2003 LAIF Data as of December 31, 2003

Individual SecuritiesLAIF Data as of December 31, 2003 Individual SecuritiesLAIF Data as of December 31, 2003

US Agencies as of December 31, 2003 Total Return Analysis - 2 Year Horizon

US Agencies as of December 31, 2003 Total Return Analysis - 2 Year Horizon

US Agencies as of December 31, 2003 Total Return Analysis - 2 Year Horizon

US Agencies as of December 31, 2003 Total Return Analysis - 2 Year Horizon

Four Key Capabilities Four Key Capabilities Internal Management External Management HIGH LOW Internal Management External Management HIGH LOW

Internal Management External Management HIGH LOW Internal Management External Management HIGH LOW Four Key Capabilities

Investment Expertise Internal Management External Management HIGH LOW Internal Management External Management HIGH LOW

Investment Expertise Staffing Investment Expertise Staffing Four Key Capabilities Internal Management External Management HIGH LOW Internal Management External Management HIGH LOW

Investment Expertise Staffing Systems Investment Expertise Staffing Systems Four Key Capabilities Internal Management External Management HIGH LOW Internal Management External Management HIGH LOW

Investment Expertise Staffing Systems Audit/Compliance Investment Expertise Staffing Systems Audit/Compliance Four Key Capabilities Internal Management External Management HIGH LOW Internal Management External Management HIGH LOW

?Funds not expected to be used in 1 year may achieve higher returns by investing in individual securities instead of LAIF.

?Positive returns can be achieved in bonds in rising interest rate environments.

?External investment management can add the four Key Capabilities that your organization may need for successful fixed income investing. ?Funds not expected to be used in 1 year may achieve higher returns by investing in individual securities instead of LAIF.

?External investment management can add the four Key Capabilities that your organization may need for successful fixed income investing. ?External investment management puts an “expert” on your team. ?External investment management can add the four Key Capabilities that your organization may need for successful fixed income investing. ?External investment management puts an “expert” on your team. ?Funds not expected to be used in 1 year may achieve higher returns by investing in individual securities instead of LAIF. ?Positive returns can be achieved in bonds in rising interest rate environments.