MDTA Finance and Administration Committee Meeting Materials

FINANCE AND ADMINISTRATION COMMITTEE T HURSDAY , A UGUST 1 4 , 20 2 5

MARYLAND TRANSPORTATION AUTHORITY

2310 BROENING HWY BALTIMORE, MD 21224

Cynthia D. Penny-Ardinger Jeffrey S. Rosen Samuel D. Snead, MCP, MA John F. von Paris

MEMORANDUM

John von Paris, Chair Dontae Carroll Cynthia D. Penny-Ardinger Jeffrey Rosen

TO:

Chantelle Green, Director of Finance

FROM:

Finance and Administration Committee Meeting

SUBJECT:

August 8, 2025

DATE:

Enclosed are your materials for the Finance and Administration Committee Meeting on Thursday, August 14, 2025. The meeting will begin at 9:00 a.m. and will be conducted via Microsoft Teams. In accordance with the Open Meetings Act, the meeting information will be published on the MDTA’s website to allow members of the public to observe the meeting. As a reminder, the meeting will be livestreamed. Open the Microsoft Teams app on your MDTA issued iPad • Once in the app, go to the Microsoft Teams calendar • The Finance Committee meeting will appear on the calendar for the appropriate date • Click the button that says “Join” • Make sure you have your Video On and your Sound on Mute unless speaking • Your video will remain on the duration of the meeting. Below please find the directions to log into the meeting: •

If I can provide additional assistance, please email or call me at the following:

Chantelle Green Director of Finance

Office: 410-537-5751 Cell: 443-915-7739 Email: cgreen2@mdta.maryland.gov

2310 Broening Highway • Baltimore, MD 21224 • mdta@mdta.maryland.gov • 410.537.1000 • 711 (MD Relay) • mdta.maryland.gov • ezpassmd.com

cc :

Bruce Gartner, Executive Director Percy Dangerfield, Chief Administrative Officer Deborah Sharpless, Chief Financial Officer

ATTACHMENTS Informational Items:

• •

Rate Covenant Financial Report

FINANCE AND ADMINISTRATION COMMITTEE MEETING AGENDA AUGUST 14, 2025 – 9:00 a.m. This meeting will be livestreamed on the Finance and Administration Committee Meeting Archive | MDTA (maryland.gov)

NOTE: This is an Open Meeting being conducted via livestreaming. The public is welcomed to watch the meeting at the link listed above. If you wish to comment on an agenda item please email your name, affiliation, and agenda item to cgreen2@mdta.state.md.us no later than noon on Wednesday, August 13, 2025. You MUST pre-register in order to comment. Once you have pre-registered you will receive an email with all pertinent information.

AGENDA

OPEN SESSION Call to Order 1. Approval – July 10, 2025 - Open Meeting Minutes

Chairman von Paris

5 min.

2. Approval – Contract No. KB-3023-0000R – Maintenance

Abey Tamrat

5 min.

and Repair of Curtis Creek Drawbridges

3. Approval –

Investment Committee Report – Quarterly update Clayton Viehweg 20 min. on the investment of MDTA’s funds

Kevin Cullity Allen Garman

4. Approval -

Investment Policy – Annual Review of the MDTA’s Investment policy which establishes guidelines for the safeguarding and management of the MDTA’s cash and investments

Clayton Viehweg Kevin Cullity

5 min.

5. Update -

Key Bridge Authorizations, Expenditures, and

Bruce Gartner

5 min.

Reimbursements

Vote to Adjourn

Subject to change; revisions to be published

8/14/25

ITEM 1

FINANCE AND ADMINISTRATION COMMITTEE MONTHLY MEETING THURSDAY, JULY 10, 2025 OPEN MEETING VIA CONFERENCE CALL OPEN SESSION

MEMBERS ATTENDING:

Cynthia Penny-Ardinger Dontae Carroll Jeffrey Rosen John von Paris Cathe Anderson Percy Dangerfield Jeffrey Davis David Goldsborough Chantelle Green Bruce Gartner Natalie Henson Kendra Joseph Christopher Karolenko Kimberly Millender Kenneth Montgomery Mary O’Keeffe Deborah Sharpless Tim Sheets Donna Singfield

STAFF ATTENDING:

Thomas Smith Agnes Vadasz

At 9:00 a.m., Member John von Paris, Chair of the Finance and Administration Committee, called the Finance and Administration Committee Meeting to order.

APPROVAL – OPEN MEETING MINUTES FROM JUNE 12, 2025 MEETING Member John von Paris called for the approval of the meeting minutes from the open meeting held on June 12, 2025. Member Jeffrey Rosen made the motion, and Member Cynthia Penny- Ardinger seconded the motion, which was unanimously approved.

OPEN SESSION JULY 10, 2025 PAGE TWO OF FOUR

APPROVAL – CONTRACT NO. SV-00211398 – TACTICAL MEDICAL DIRECTOR SERVICES Corporal Christopher Karolenko requested a recommendation of approval from the Finance and Administration Committee to present Contract No. SV-00211398, Tactical Medical Director Services, to the full Maryland Transportation Authority (MDTA) Board at its next scheduled meeting. Corporal Karolenko advised that this is a sole source contract to retain the services of Johns Hopkins University, Department of Emergency Medicine, Division of Special Operations, to provide 24/7 Tactical Physician Services, emergency medical consultation, and specialized Tactical Medicine training for the MDTA Police (MDTAP). The provider is responsible for furnishing all personnel, consultation access, training materials, and program oversight necessary to support MDTAP’s Tactical Medical Program. The contract is for three (3) years with one (1) 2-year renewal option. The bid amount was $429,992.50. Member von Paris called for a motion to recommend approval of this item to the full MDTA Board at its next scheduled meeting. Member Carroll made the motion, and Member Penny- Ardinger seconded the motion, which was unanimously approved. APPROVAL – CONTRACT NO. J01B5600034 – MDTA POLICE TOUGHBOOKS AND TABLETS Mr. David Goldsborough requested a recommendation of approval from the Finance and Administration Committee to present Contract No. J01B5600034, MDTA Police Toughbooks and Tablets, to the full MDTA Board at its next scheduled meeting. Mr. Goldsborough advised that the MDTA Department of Information Technology is seeking to enter into a fixed price contract for the one-time purchase of laptops, tablets, docking stations and warranties for use by the MDTAP. This is a small business reserve designated purchase order request for proposal that was solicited to authorized master contractors certified as small businesses under the Office of State Procurement’s Desktop, Laptop and Tablet 2015 Master Contract, BPO #060B5400007. The total amount for this contract is $485,355.30. Member von Paris called for a motion to recommend approval of this item to the full MDTA Board at its next scheduled meeting. Member Rosen made the motion, and Member Carroll seconded the motion, which was unanimously approved.

OPEN SESSION JULY 10, 2025 PAGE THREE OF FOUR

APPROVAL – CONTRACT NO. MT-0211460 – JANITORIAL SERVICES AT BALTIMORE HARBOR TUNNEL (BHT) AND FORT MCHENRY TUNNEL (FMT) FACILITIES Ms. Cathe Anderson requested a recommendation of approval from the Finance and Administration Committee to present Contract No. MT-0211460, Janitorial Services at BHT and FMT Facilities, to the full MDTA Board at its next scheduled meeting. This is a community services contract that provides comprehensive janitorial services including supervision, supplies, labor and equipment at the Point Breeze facility by the National Center on Institutions and Alternatives. The Pricing and Selection Committee approved the rates for these services on June 26, 2025. Janitorial supplies are included in the contract total and the contract specifies that supplies be purchased from Blind Industries of Maryland, also a community services provider. The contract is for three (3) years with one (1) 2-year renewal option. The bid amount was $1,294,500.65. Member von Paris called for a motion to recommend approval of this item to the full MDTA Board at its next scheduled meeting. Member Penny-Ardinger made the motion, and Member Rosen seconded the motion, which was unanimously approved. APPROVAL – CONTRACT NO. MT-00211510 – ON-CALL PLUMBING AND MAINTENANCE FOR THE CENTRAL REGION Ms. Cathe Anderson requested a recommendation of approval from the Finance and Administration Committee to present Contract No. MT-00211510, On-Call Plumbing and Maintenance for the Central Region, to the full MDTA Board at its next scheduled meeting. This contract is to provide on-call plumbing maintenance services for the MDTA’s Central Region. The lowest responsible and responsive bidder was Patapsco Mechanical LLC. The contract is for three (3) years with one (1) 2-year renewal option. The bid amount was $695,190. Member von Paris called for a motion to recommend approval of this item to the full MDTA Board at its next scheduled meeting. Member Rosen made the motion, and Member Penny- Ardinger seconded the motion, which was unanimously approved. APPROVAL – CONTRACT NO. MT-00211428 – ON-CALL PLUMBING AND MAINTENANCE FOR THE NORTHERN REGION Ms. Cathe Anderson requested a recommendation of approval from the Finance and Administration Committee to present Contract No. MT-00211428, On-Call Plumbing and Maintenance for the Northern Region, to the full MDTA Board at its next scheduled meeting.

OPEN SESSION JULY 10, 2025 PAGE FOUR OF FOUR

This contract is to provide on-call plumbing maintenance services for the MDTA’s Northern Region. The lowest responsible and responsive bidder was Patapsco Mechanical LLC. The contract is for three (3) years with one (1) 2-year renewal option. The bid amount was $695,190. Member von Paris called for a motion to recommend approval of this item to the full MDTA Board at its next scheduled meeting. Member Carroll made the motion, and Member Penny- Ardinger seconded the motion, which was unanimously approved.

There being no further business, the meeting of the Finance Committee adjourned at 9:24 a.m., following a motion by Member Penny-Ardinger, and seconded by Member Carroll.

_________________________________________________ John von Paris, Chairman

ITEM 2

MEMORANDUM

TO:

Finance and Administration Committee

FROM:

Abey Tamrat, Project Manager

KB-3023-0000R - Maintenance and Repair of Curtis Creek Drawbridges

SUBJECT:

DATE:

August 14, 2025

PURPOSE OF MEMORANDUM To seek recommended approval from the Finance and Administration Committee to present Contract No. KB-3023-0000R, Maintenance and Repair of Curtis Creek Drawbridges, to the full MDTA Board at its next scheduled meeting. SUMMARY The scope of work includes providing labor, equipment, materials, and access necessary to perform maintenance and repair of both Curtis Creek Draw Bridges. Maintenance work includes providing general housekeeping, mechanical and electrical maintenance of both draw bridges. As part of the maintenance efforts, if contractors find defects requiring repairs, it will be addressed under this contract. The lowest responsible and responsive Bidder was Florida Drawbridges, Inc. RECOMMENDATION To obtain recommended approval by the Finance and Administration Committee to present Contract No. KB-3023-0000R, Maintenance and Repair of Curtis Creek Drawbridges, to the full MDTA Board at its next scheduled meeting. ATTACHMENT • Finance & Administration Committee Project Summary

2310 Broening Highway • Baltimore, MD 21224 • mdta@mdta.maryland.gov • 410.537.1000 • 711 (MD Relay) • mdta.maryland.gov • DriveEzMD.com

FINANCE & ADMINISTRATION COMMITTEE PROJECT SUMMARY KB-3023-0000R - MAINTENANCE AND REPAIR OF CURTIS CREEK DRAWBRIDGES

PIN NUMBER

N/A

CONTRACT NUMBER CONTRACT TITLE

KB 3023R 316

Repair and Maintenance for the Curtis Creek Drawbridge

PROJECT SUMMARY

The purpose of this contract is to provide labor, equipment, materials, and access necessary to perform maintenance and repair of both Curtis Creek Draw Bridges. Maintenance work includes providing general housekeeping, mechanical and electrical maintenance of both draw bridges. As part of the maintenance efforts, if contractors find defects requiring repairs, it will be addressed under this contract.

MBE PARTICIPATION

ADVERTISED GOAL (%)

PROPOSED GOAL (%)

SCHEDULE

MBE PARTICIPATION - OVERALL

ADVERTISEMENT DATE ANTICIPATED NTP DATE

OVERALL MBE

3/25/2025 1/1/2026

21.00% 21.00%

AFRICAN AMERICAN ASIAN AMERICAN HISPANIC AMERICAN

8.00% 0.00% 0.00%

DURATION/TERM

1,095 calendar days

WOMEN

11.00% 13.00%

ENGINEER'S ESTIMATE

$3,969,650.00

VSBE

1.00%

BID RESULTS

BID AMOUNT(S) CURRENT VENDOR

% Variance to EE

Florida Drawbridges, Inc. (FDI)

$ $ $

3,027,500.00 3,299,150.00 3,920,336.00

No Yes No

-24% -17%

BID PROTEST

YES

Cianbro Corporation

Covington Machine & Welding, Inc.:

-1%



ITEM 3

MEMORANDUM

TO:

Finance and Administration Committee Clayton Viehweg, Investment Administrator Kevin Cullity, Director Treasury & Debt Allen W. Garman, Deputy Director Finance

FROM:

SUBJECT:

Quarterly Investment Report

DATE:

August 14, 2025

PURPOSE OF MEMORANDUM Complete required quarterly review of investment report for the three-month period ended June 30, 2025. Request recommendation of the Finance and Administration Committee to present to the full Board for approval for the continuation of investment strategy and associated benchmarks. SUMMARY On a quarterly basis, MDTA’s Investment Committee reports to the Finance and Administration Committee on investment related activities. The Investment Committee will review market conditions, policy compliance, portfolio strategies, and total return performance. The Committee will also discuss certain market drivers that may influence portfolio performance in coming months, including the economy, fiscal policy, and Federal Reserve monetary policy. Key Points  Diversified investment portfolio remains in compliance with the Investment Policy and Trust Agreement.  Matched Funded accounts are benefitting from higher prevailing rates for short-term instruments.  Total Return (Duration Targeted) Investment Strategies o Long-term reserve account strategies should remain consistent despite periods of short-term return volatility associated with rising interest rate environments. o Multi-year returns for longer term reserves align with the financial forecast and approximate the starting rolling yields.

2310 Broening Highway • Baltimore, MD 21224 • mdta@mdta.maryland.gov • 410.537.1000 • 711 (MD Relay) • mdta.maryland.gov • DriveEzMD.com

Investment Report Page Two

RECOMMENDATION The Investment Committee requests the Finance and Administration Committee’s concurrence and recommendation to move to the full board for continuation of investment strategy and benchmarks. ATTACHMENT Performance Report Finance Committee 6 30 25

Investment Portfolio Management & Performance Period Ended – June 30, 2025 Meeting Date – August 14, 2025

Agenda & Key Points

Agenda

 Market Update  Portfolio Composition & Compliance  Strategy  Total Return Performance  Strategy & Benchmark Approval

Key Points  Diversified investment portfolio remains in compliance with the Investment Policy & Trust Agreement.  Matched Funded accounts are benefitting from higher prevailing rates for short-term instruments.  Total Return (Duration Targeted) Investment Strategies  Long-term reserve account strategies should remain consistent despite periods of short-term return volatility associated with rising interest rate environments.  Multi-year average returns for long term reserves align with financial forecast and approximate the starting rolling yields.

Market Update – Economy, Federal Reserve & Bond Market  Federal Reserve’s preferred measure of inflation, Core PCE, continues to show inflation moderation.  The Fed noted at its July 30 meeting that “economic uncertainty remains elevated” and “labor market conditions remain solid while unemployment is low”. Payroll data released just two days later surprised to the downside and earlier period data was revised lower.

Core Personal Consumption Expenditures Index – measures the prices paid by consumers for goods & services without the volatility caused by movements in food & energy prices to reveal underlying inflation trends.

Core PCE Index (yoy %)

Market Update – Economy, Federal Reserve & Bond Market  Economy: Modest growth in spending & production, slowing but elevated inflation, employment strength

Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 2.00% 2.00% 2.50% 2.70% 3.00% 2.90% 3.20% 3.20% 2.79% 2.70% 2.86% 2.66% 2.63% 2.98% 3.04% 3.66% 4.10% 4.20% 4.10% 4.10% 4.10% 3.90% 3.80% 3.80%

Real GDP (YOY)

Core PCE Inflation (YOY)

Unemployment

U.S. Treasury Yields

2018

2019

2020

2021

2022

2023

2024

2025

Years

Year

2 YR

5 YR

10 YR

 Federal Reserve: The Fed remains vigilant to downside risks, with keen attention to the uncertainty surrounding tariffs & geopolitical risks.  The Fed has held rates steady since December 2024 after cutting 3 times in the last half of 2024 by a total of 100 basis points.  While the Fed continues to reduce positions in Treasuries, Agency & Agency MBS, it has slowed its monthly balance sheet reductions to $5 billion of Treasuries & $35 billion of Agency & Agency MBS.

Portfolio Composition & Compliance – Security Composition  High quality and diversified portfolio o Security type allocations based on: o Cash Flow Needs o Relative Value Opportunities - higher yield for similar maturities and credit risk o Large allocation to MLGIP given compelling rates at the short end of the yield curve. o Minimizing credit risks associated with ratings downgrades and/or defaults Market Value as of 6/30/2025

Treasury $172,954,997 16%

Cash $29,676,346 3%

Agency $66,494,628 6%

MLGIP, $471,414,692 44%

Supranational $50,913,167 5%

Municipal $133,402,332 13%

Money Market Mutual Fund $140,749,295 13%

PORTFOLIO VALUE

6 Portfolio Composition & Compliance – Maturity Distribution (All Accounts)

Maturity Distribution

6/30/2025

Market Value ($M)

Maturity

Matched

Total

$0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0

Distribution Funding

Return

0 - 1 Yr 1 - 2 Yrs 2 - 3 Yrs 3 - 4 Yrs 4 - 5 Yrs

$659.8

$29.6 $57.4 $95.7 $80.4 $39.4 $103.3 $405.8

5 + Yrs

0 - 1 Yr

1 - 2 Yrs 2 - 3 Yrs 3 - 4 Yrs 4 - 5 Yrs

5 + Yrs

Total

$659.8

Matched Funding Total Return

 Match Funded accounts necessitate maturities heavily weighted within 1 year. o Driven by cash flow schedules for debt service, operating expenses, and capital spending. • Debt service: $104.4M

• Operating: $29.9M • Capital: $525.5M

7 Portfolio Composition & Compliance – Maturity Distribution (Reserves)

Maturity Distribution - General / M&O

6/30/2025

Maturity Market Distribution Value ($M) 0 - 1 Yr $29.6 1 - 2 Yrs $57.4 2 - 3 Yrs $103.3 3 - 4 Yrs $95.7 4 - 5 Yrs $80.4 5 + Yrs $39.4 Total $405.8

$120.0

$100.0

$80.0

$60.0

$40.0

$20.0

$0.0

0 - 1 Yr

1 - 2 Yrs

2 - 3 Yrs

3 - 4 Yrs

4 - 5 Yrs

5 + Yrs

 Total Return reserve accounts align durations with benchmark indices. o Dispersion of maturities reduces yield curve concentration risk & benchmark tracking error.

o General Account: Staggered maturities, 1-month to 5-years. o M&O Account: Staggered maturities, 1-month to 15-years.

Portfolio Composition & Compliance – Compliance Report  Portfolio complied with all legal & policy limitations throughout the reporting period of 3/31/25 through 6/30/25

o Investment holdings above minimum credit ratings. o Investment concentrations below required limits. o Conformed to maturity limitations. Maturity Limits Longest Maturity

Policy Limit (# of years)

Compliance

(# of years)

With Investment Policy

Account Types Bond Service Accounts Unrestricted (General) * Unrestricted (M&O)

0.2 4.9

1 5

Yes Yes Yes

13.9

* Investment Policy permits maturities to 15 years, longer if approved by CFO. Maturity Limits measured on Settlement Date basis.

Compliance

Market

Investment Policy Limit

With Investment

Credit Ratings

S&P

Moody's

Market Value ($)

% of Total

Policy

Cash

29,676,346

2.8%

Money Market Mutual Funds - Goldman Sachs Financial Square Gov't FGTXX

AAAm AAAm AAAm

Aaa-mf

65,575,654 471,414,692 75,173,640

6.2% 50% 44.2% 50% 7.1% 50%

Yes Yes Yes

- MLGIP

- Dreyfus Gov't Cash DGCXX

Aaa-mf

Sub-Total Money Market Mutual Funds

612,163,986

57.4% 100%

Yes

U.S.Treasuries **

172,954,997

16.2% 100%

Yes

AA+

Aa1

Federal Agencies ** - Fannie Mae

AA+ AA+ AA+ AA+

Aaa Aaa Aaa Aaa

11,840,280 45,784,471 8,176,888

1.1% 50% 4.3% 50% 0.8% 50% 0.1% 50%

Yes Yes Yes Yes

- Federal Farm Credit Bank - Federal Home Loan Bank

- Freddie Mac

692,988

Sub-Total Federal Agencies

66,494,628

6.2% 100%

Yes

** Includes defeased municipals with government securities escrows.

Portfolio Composition & Compliance – Compliance Report (continued) Compliance Market Investment With Investment S&P Moody's Market Value ($) % of Total Policy Limit Policy Municipal Debt - Austin, TX Comm Coll AA+ Aa1 852,660 0.1% 5% Yes - Bergen County, NJ NR Aaa 2,669,195 0.3% 5% Yes - Boston, City of AAA Aaa 1,534,450 0.1% 5% Yes - Collin County, TX AAA Aaa 941,380 0.1% 5% Yes - Contra Costa Comm, CA AA+ Aa1 2,015,300 0.2% 5% Yes - Emeryville, CA AAA NR 8,972,570 0.8% 5% Yes - Hawaii, State of AA+ Aa2 8,029,922 0.8% 5% Yes - Los Angeles CMNTY CLG DIST, CA AA+ Aaa 7,513,360 0.7% 5% Yes - Marin County, CA NR Aaa 1,671,908 0.2% 5% Yes - Martinsville Independent School AAA NR 1,022,210 0.1% 5% Yes - Massachusetts, Commonwealth of AA+ Aa1 6,269,040 0.6% 5% Yes - Minnesota, State of AAA Aaa 9,743,573 0.9% 5% Yes - Multnomah County, OR NR Aaa 19,605,794 1.8% 5% Yes - New York, State of AA+ Aa1 9,175,296 0.9% 5% Yes - New York City AA Aa2 7,125,594 0.7% 5% Yes - Ohlone Comm College AA+ Aa1 978,892 0.1% 5% Yes - Oregon Local Govts NR Aa2 1,439,312 0.1% 5% Yes - Oregon School Board AA Aa2 8,344,820 0.8% 5% Yes - Oregon, State of AA+ Aa1 9,887,352 0.9% 5% Yes - Palm Beach County, FL AAA Aaa 2,628,740 0.2% 5% Yes - Phoenix AA+ Aa1 10,122,750 0.9% 5% Yes - Santa Clara County AAA NR 730,430 0.1% 5% Yes - Solano County Community AA Aa2 966,218 0.1% 5% Yes - Texas, State of AAA NR 1,012,260 0.1% 5% Yes - Travis County Health, Texas NR Aa2 2,172,639 0.2% 5% Yes - Tulsa ISD, OK NR Aa2 4,919,502 0.5% 5% Yes - Westchester County, NY AA+ Aa1 808,310 0.1% 5% Yes - Wisconsin, State of AA+ Aa1 2,248,855 0.2% 5% Yes Credit Ratings

Sub-Total Municipal

133,402,332

12.5% 20%

Yes

Supranationals - African Development Bank - Asian Development Bank

AAA AAA AAA AAA

Aaa Aaa Aaa Aaa

9,679,400 4,195,553 14,968,250 22,069,964

0.9% 10% 0.4% 10% 1.4% 10% 2.1% 10%

Yes Yes Yes Yes

- International Bank for Reconstruction & Development

- Inter-American Development Bank

Sub-Total Supranationals

50,913,167

4.8% 30%

Yes

Commercial Paper - Exxon Mobil

A-1+ A-1+

P-1 P-1

- -

0.0% 5% 0.0% 5%

Yes Yes

- Toyota Motor Credit

Sub-Total Commercial Paper

0.0% 20%

Yes

Grand Total

1,065,605,456

100.0%

After reviewing the investment activity for the month ended June 30, 2025, we have not identified any instances of material non-compliance with the Investment Policy.

Dealer Trade Allocation

Trade Allocation - Trailing 12 Month Period Ended 6/30/2025

Broker Name Piper Jaffray FHN Financial

# Trades % Trades $ Purchase % Purchase $ Sale

% Sale

$ Total

% Total

12 11 11

18% $ 17% $ 17% $ 12% $ 11% $ 6% $ 6% $ 5% $ 5% $ 2% $ 2% $

67,556,136 20,747,217 64,490,428 41,949,099 79,017,626 36,945,674 3,224,401 49,500,847 6,768,322 20,852,353 7,311,539

17% $

8,742,610

9% $ 36% $ 18% $ 0% $ 0% $ 9% $ 15% $ 13% $ 0% $ 0% $ 0% $

76,298,746 56,547,443 82,670,027 41,949,099 79,017,626 45,942,487 17,972,404 62,946,893 6,768,322 20,852,353 7,311,539

15% 11% 17% 16% 9% 4% 1% 4% 1% 0% 13% 8%

5%$ 35,800,226 16%$ 18,179,599

Janney Montgomery Toyota Motor Credit [D]

8 7 4 4 3 3 1 1 0

11% 20%

$ $

- -

Jefferies & Co BNY Mellon

9% $

8,996,813

Wells Fargo Securities Cantor Fitzgerald Academy Securities

1%$ 14,748,003 12%$ 13,446,045

2% 5% 2% 0%

$ $ $ $

- - - -

ExxonMobil [D} Stifel Nicolaus

Bank of America Securities

Total

100%$ 398,363,642

100%$ 99,913,296

100%$ 498,276,938

100%

*** Broker/Dealers are reviewed annually for competitiveness by the Investment Committee. Dealer suspensions and additions may result from trailing twelve-month performance.

Portfolio Composition & Compliance – MF and TR Proportions o Matched Funding accounts for Construction, Operations, and Debt Service comprise the majority of the MDTA portfolio. o Short-term investments matched to projected spending. o Total Return reserves represent long-term core funds, with long investment horizons.

Market Value as of 6/30/2025

Total Return $405,815,970 38%

Matched Funding $659,789,486 62%

Strategy – Previous & Current Quarter

 General and M&O Reserve remain in compliance with board approved strategy, approximating 100% of respective benchmark index durations.

Strategy for Prior Quarter

Strategy for Current Quarter

Benchmarks

Duration % Target

Benchmarks

Duration % Target

Purpose

N/A

Capital / Operating / Debt Long Term Reserves (1) General

Matched Funding

N/A

Matched Funding

N/A

102% 102%

98%

50% ML 1-3 YR & 50% ML 3-5 YR ~3 Yrs U.S. Treasury Strips 1-13 YR ~7 Yrs

100%

M&O Reserve

(1) - Unrestricted cash in the combined General & M&O Reserve that exceeds the $400 million target is transferred to the Capital account to fund capital expenditures.

 Matched Funding Accounts: Policy and Trust Agreement Directives/Limitations o Capital (Pay-Go & Bond Proceeds), Operating & Debt Service Accounts – Investment maturities precede or coincide with expected spending. Returns: Investment returns are a function of prevailing interest rates for short-term investments such as Money Market Mutual Funds, MLGIP, Agency/Supranational Discount Notes, and Commercial Paper.

 Total Return Accounts: Board Approved Benchmarks o M&O Reserve – Staggered maturities, 0-15 years o General Account – Staggered maturities, 0-5-years

Returns: Longer duration indices benefit from higher average annual returns over multiyear periods and experience greater return volatility associated with mark-to-market relative to shorter-term duration indices.

Strategy – Relative Value

Relative Value & Benchmark Implications

The securities contained in the current benchmark indices consist of U.S. Treasury and Government Agency debentures. MDTA’s allocation to other spread sectors such as Supranational, Municipal, and Commercial should help performance longer term, but may cause short-term tracking error relative to the indices. Supranational  Supranational bonds were added to the Investment Policy in December 2016, with a sector limitation of 30% and a single issuer limitation of 10%.  At times, Triple-A rated Supranational bonds, such as the World Bank, offer relative value versus comparable maturity agency debentures. Target spreads are approximately 10-15 basis points over comparable maturity agencies. Municipal  Municipal bonds are limited by policy to 20% of the portfolio, with a single issuer limitation of 5%.  Triple-A taxable bonds are sought with spreads near 20 basis points relative to comparable maturity agencies.  Municipals defeased with treasury securities are not subject to the policy limitation, as they are considered government securities. Target spreads are approximately 15 basis points over comparable maturity agencies. Commercial Paper  CP is limited by policy to 20% of the portfolio, with a single issuer limitation of 5%.  Three-month Tier-1 rated CP offered a 15 bp premium to agencies at the end of the quarter.

Strategy – Duration Targeting and Relative Value

 Question was raised during the last quarterly board meeting held May 29 on management’s interest rate outlook. Several statements within the quarterly presentation materials are relevant to this question. 1. Duration Targeted reserves maintain consistent structures and management does not attempt to time market rate changes. 2. The longer duration strategies employed in certain reserves generate higher return volatility with expected higher average annual returns over multiyear periods. 3. Chosen strategies and benchmark indices represent a reasonable and prudent compromise between long-term, multiyear return/income focus and tolerance for return volatility. Consistent Duration Targeted Approach – Exploits Term Structure of Interest Rates  Management recognizes that markets and rates are unpredictable, but a consistent duration targeted approach exploits the positive yield curve slope to improve multiyear average annual returns. Duration Neutral Relative Value Swaps  Swaps of similar duration and credit risk securities for higher yielding securities are a means to improve investment returns without making rate bets or altering the interest rate volatility profile of the portfolio.

Strategy – Relative Value Yield or Spread Differential

• Yield differential of double- and triple-A-rated municipals versus treasuries highlights relative value added through security selection.

US Treasuryvs Muni(AAA&AA) Yields as of July 2025

6.000%

5.500%

5.000%

4.500%

4.000%

3.500%

3.000%

1 year

3 year

20 year

2 year

5 year

7 year

10 year

UST

AAA AA

0.000% 0.100% 0.200% 0.300% 0.400% 0.500% 0.600% 0.700%

1 year

2 year

3 year

5 year

7 year

10 year

20 year

AAA- UST AA- UST

Strategy – Duration Targeting

Duration Neutral Relative Value Swaps  Swaps of similar duration and credit risk securities for higher yielding securities are a means to improve investment returns without making rate bets or altering the interest rate volatility profile of the portfolio.  Highlight May 29 swap of a Treasury for a Defeased Muni backed by an escrow containing Treasuries.  Same credit risk.  No material change in portfolio duration.  Yield pickup of 26 basis points.  Municipal bonds are typically bought with spreads of 20 basis points over comparable duration agency/treasury securities.  Portfolio contains approximately $150 million of municipal bonds bought for relative value. Description Face Amount Yield Duration Spread

Sale

UST 4.125% 10/31/2027

$2,300,000

3.949%

2.27

Purchase

CAS 4.600% 4/1/2028 ** $2,200,000

4.162%

2.62

0.26%

UST 3.875% 3/15/2028

N/A

3.899%

2.60

Bogey

**Legal final maturity is 4/1/2038; defeased to 4/1/2028.

Total Return Performance – Matched Funding & Total Return

Total Return as of Period Ended 6/30/2025

Ending

Trailing Period

1 Month 3 Months

6 Months 12 Months

Market Value

Combined Accounts Weighted Average

0.58% 1.20% 2.68% 5.48% 1,040,434,186 $

MATCHED FUNDING Capital

0.35% 1.03% 2.06% 4.73% 0.36% 1.08% 2.12% 4.75% 0.93% 1.45% 3.61% 6.35% 0.84% 1.37% 3.67% 6.12%

$ $

527,013,070 104,620,308

Bond Service

TOTAL RETURN

Reserves General / M&O

408,800,808

Composite Agency / STRIPS Index

 Shorter Term Matched Funded accounts for Capital/Construction & Bond Service continue to benefit from higher short- term interest rates.  Longer Duration Reserves – interest rate volatility results in market value changes that drive total returns higher or lower than prevailing market yields.  Falling interest rates drove mark- to-market price increases.  Note: Table provides weighted returns for the combined M&O / General accounts & the respective indices. Graph shows individual portfolio total returns.

Trailing Period Total Returns

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00%

1 Month

3 Months

6 Months

12 Months

General

Agency Index M&O STRIPS Index

The Investment Committee requests the Finance and Administration Committee’s Concurrence and Recommendation to move to the full Board for approval of the continuation of investment strategy/benchmarks.

ITEM 4

Wes Moore, Governor Aruna Miller, Lt. Governor Samantha J. Biddle, Chair Board Members: Dontae Carroll Maricela Cordova William H. Cox, Jr. Mario J. Gangemi, P.E.

Cynthia D. Penny-Ardinger Jeffrey S. Rosen Samuel D. Snead, MCP MA John F. von Paris

Bruce Gartner, Executive Director

MEMORANDUM

TO:

Finance & Administration Committee

FROM:

Clayton D. Viehweg, Investment Administrator Kevin Cullity, Director of Treasury & Debt Allen W. Garman, Deputy Director Treasury

SUBJECT:

Investment Policy – Annual Review and Proposed Changes

DATE:

August 14, 2025

PURPOSE OF MEMORANDUM Complete required annual review of the Investment Policy and request recommendation of the Finance & Administration Committee to present to the full Board for approval of the proposed changes. SUMMARY Following a recent review by the Investment Committee modest changes to the Investment Policy are currently recommended. The proposed changes are aimed at removing outdated references and aligning the MDTA Investment Policy to that of the State Treasurer’s Office. The proposed changes include: 1. Delete securities issuers listed under Federal Agency Obligations Section V. Allowable Investments. None are active issuers in the market, do not have sufficient liquidity, or even no longer exist. 2. Delete Banker’s Acceptances in Section V. Allowable Investments. This sector of the market has experienced significant declines in outstanding since the peak in the 1980s. References to Banker’s Acceptances have also been deleted under Section VIII. Diversification. 3. Replace the language in Section V. Allowable Investments limiting purchase of securities of specifically listed Supranational issuers to language consistent with what is included in the Investment Policy of the State of Maryland. Reference to a broader set of Supranational issuers is prudent in the face of their high credit ratings and additional diversification benefits. 4. Delete reference to the Operating Reserve Account under Section VI. Maturity Restrictions. This is an Account that no longer exists as it has been consolidated with the General Account.

2310 Broening Highway • Baltimore, MD 21224 • mdta@mdta.maryland.gov • 410.537.1000 • 711 (MD Relay) • mdta.maryland.gov • ezpassmd.com

Investment Policy – Annual Review and Proposed Changes Page Two

The key sections of the policy are noted in the table below.

Key Elements

Section

Security Type Limitations

5 6 8

Maturity Limitations

Diversification Issuer/Sector Reporting Requirements Policy Violations & Downgrades

RECOMMENDATION Management requests the Finance and Administration Committee’s concurrence and recommendation to move to the full board for approval of the revised Investment Policy. ATTACHMENT Investment Policy 2025 – DRAFT

Policy No.: MDTA 7010

Original Date: August 16, 2005 Revised: August 29, 2024

Effective Date: August 16, 2005

Approved by: ________________________________________

Date: ______________

Approval Signature

Approved by: ________________________________________

Date: ______________

Form and Legal Sufficiency Review, Office of Attorney General

Investment Management

Purpose The purpose of this Policy is to establish guidelines for the safeguarding and efficient management of the Maryland Transportation Authority’s (MDTA) cash and investments. This policy applies to all accounts, including those established under the Trust Agreement. Reference(s)  Title 4 of the Transportation Article, Annotated Code of Maryland (as amended)   Title 6 of the State Finance and Procurement Article, Annotated Code of Maryland (as amended)   Second Amended and Restated Trust Agreement between the Maryland Transportation Authority and the Bank of New York Mellon (dated as of September 1, 2007, as amended), Section 5.02 Investment of Monies, and applicable provisions of any governing trust agreements (Trust Agreements).   Governmental Accounting Standards Board (GASB)   Internal Revenue Code of 1986, Arbitrage Rebate Regulations (as amended)   Uniform Commercial Code   MDTA Board Resolution 2011-02 (Authorized Staff) 

Scope: This Policy is applicable to MDTA Finance Staff.

Responsible Party: The Chief Financial Officer (CFO) and Finance Division staff, including the Director of Treasury and Debt, are charged with ensuring compliance and conducting periodic reviews and revisions to this policy.

Investment Management I. Prudence

a. Policy Statement 1. All investment balances shall be invested with prudence considering the probable safety of the capital as well as the probable income derived.

Page 1 of 10

Policy No..: MDTA 7010 Effective: August 16, 2005

i. Investments and investment practices shall be in compliance with applicable provisions of the Annotated Code of Maryland and to the extent applicable to the MDTA, guidelines established by the State Treasurer and the GASB. Section 6-222 of the State Finance and Procurement Article of the Annotated Code of Maryland does not govern the investment of the MDTA’s revenues. This State law applies to political subdivisions, municipal corporations and other specified governmental entities, but not to agencies or units of the government of the State of Maryland. Section 4- 311 of the Transportation Article of the Annotated Code of Maryland gives the MDTA statutory authority to enter into a Trust Agreement and to pledge its revenues. Permitted investments are primarily driven by the definition of Investment Obligations contained in the Second Amended and Restated Trust Agreement dated as of September 7, 2007, with some additional consideration of any other obligations that constitute legal investments for State agencies such as the MDTA. ii. The CFO or the Director of Treasury and Debt Management shall report to the Finance Committee any material deviations from this policy. iii. The CFO or the Director of Treasury and Debt Management shall immediately report to the Finance Committee any security holding credit rating downgrade initiated by at least two Nationally Recognized Statistical Ratings Organization (NRSRO) or one NRSRO for securities with only one credit rating.

II. Ethics

a. Policy Statements 2. Employees involved in the investment process shall refrain from personal business activity that may create conflicts of interest. Furthermore, employees: i. Are prohibited from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the MDTA. ii. Must provide annual financial disclosures in accordance with the requirement of the State Ethics Commission, and as otherwise required by law. III. Delegation of Authority a. Policy Statement 3. The MDTA’s power to manage investment of public MDTA funds is subject to any applicable State and federal law, including Title 4 of the Transportation Article of the Annotated Code of Maryland and Title 6 of the State Finance and Procurement Article of the Annotated Code of Maryland, the MDTA’s Master Trust Agreement, Article V, Section 5.02 and applicable provisions of any other MDTA Trust Agreements. i. Responsibility for the operation of the investment program has been delegated by resolution to the CFO and certain Directors of the Finance Division, who shall establish and maintain written administrative procedures and internal controls for the operation of the investment program, consistent with this Investment Policy. Such procedures shall include: 1. Explicit designation of the person(s) responsible for investment transactions.

Page 2 of 10

Policy No..: MDTA 7010 Effective: August 16, 2005

a. No person may engage in an investment transaction except as provided under the terms of this policy and procedures established by the CFO. 2. To the extent not covered by this policy, procedures shall include reference to: a. Safekeeping

b. Repurchase Agreements c. Wire Transfer Agreements d. Collateral Depository Agreements e. Banking Service Agreements f. Competitive Bidding Procedures g. Cash Flow Requirements

IV. Finance Committee a. Policy Statement 4. The MDTA’s Finance Committee will serve in an advisory capacity to the CFO in its periodic review of the MDTA’s Investment Policy, investment strategy, practices and portfolio performance. The Finance Committee is responsible for: i. Reviewing and updating the Investment Policy at least annually. ii. Monitoring the investment transactions to assure that adequate controls are in place. iii. Assuring that the MDTA is in compliance with the Investment Policy. iv. Meeting periodically to deliberate economic outlook, portfolio diversification and maturity structure, cash flow forecasts, potential risks and the interest rate outlook. V. Allowable Investments a. Policy Statement 5. Permitted investments include the following instruments: i. U.S. Treasury Obligations - Securities issued or backed by the full faith and credit of the United States Treasury. ii. Federal Agency Obligation - Securities issued by or backed by the full faith and credit of any United States Government agency or government sponsored enterprise with credit ratings in the highest category assigned to that obligor, but in no event less than the double-A category. Includes, but is not limited to:

1. Fannie Mae 2. Freddie Mac

3. Federal Home Loan Bank 4. Federal Farm Credit Bank 5. Federal Intermediate Credit Banks 6. Federal Land Banks 7. Federal Bank of Cooperatives 8. Export-Import Bank of the United States 9. Federal Financing Bank

10. Federal Housing Administration 11. Farmers Home Administration

iii. Repurchase Agreements - The MDTA may purchase U.S. Treasury Obligations or Federal Agency Obligations under a repurchase agreement provided that the following conditions are met:

Page 3 of 10

Policy No..: MDTA 7010 Effective: August 16, 2005

1. The term to maturity of repurchase agreements invested from accounts created by Trust Agreements shall be limited as follows: a. Bond Service Subaccount - 1 year. b. Reserve Subaccount - 1 year. c. Capital Account (bond proceeds) - the expected period of spend out, or five years, whichever is less. d. All Other Funds - 90 days. 2. The contract is fully secured by deliverable U.S. Treasury or Federal Agency obligations as described in 5i and 5ii above (without limit to maturity), having a market value at all times of a least one hundred two percent (102%) of the amount of the contract. 3. A master repurchase agreement or specific written, repurchase agreement governs the transaction. 4. The securities are held by an independent third-party custodian, acting solely as agent for the MDTA and free of any lien, provided such third party is not the seller under the repurchase agreement. 5. A perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq. in such securities as created for the benefit the MDTA. 6. For repurchase agreements with terms to maturity of greater than one (1) day, the MDTA will value the collateral securities weekly and require under collateralization to be corrected within one (1) business day. a. If a collateral deficiency is not corrected within this time fame, the collateral securities will be liquidated. 7. The counterparty must meet the following criteria: a. Be a primary government securities dealer that reports daily to the Federal Reserve Bank of New York, or a bank, savings and loan association or diversified securities broker- dealer having $5 billion in assets or $500 million in capital and subject to regulation of capital standards by any state or federal regulatory agency. b. Have a minimum long-term credit rating of a least single – A and a short-term rating of not less than Tier-1. c. Have been in operation for a least five (5) years. iv. Collateralized Certificates of Deposit - The MDTA may purchase Certificates of Deposit issued by, and time deposits in, any bank or savings and loan association organized under the laws of the State, any other state of the United States or of the United States, including the Trustee; provided that such bank or savings and loan association has combined capital, surplus and undivided profits of a least $100 million; and provided further that such Certificates of Deposit or time deposits are: 1. Insured by the Federal Deposit Insurance Corporation. 2. To the extend not so insured, collateralized by U.S. Treasury Obligations or Federal Agency Obligations, having a market value of a least one hundred two percent (102%) of the amount of contract.

a. Securities must be held by the Trustee or an independent third party acting solely as custodian on behalf of the

Page 4 of 10

Policy No..: MDTA 7010 Effective: August 16, 2005

MDTA, free and clear of any lien. b. Maturity for certificates of deposit shall be limited to a maximum maturity of one year.

v. Banker’s Acceptances - The MDTA may purchase Acceptances issued by a domestic bank or a federally charted domestic office of a foreign bank, which are eligible for purchase by the Federal Reserve System, if the following conditions are met: 1. The maturity is no greater than two hundred-seventy (270) days. 2. The short-term paper of the issuing bank is rated no lower than Tier- 1 by any two (2) NRSROs. 3. The issuing bank has combined net capital of a least $100 million as indicated in the most recent quarterly financial statement. 4. The amount invested in any single bank will not exceed five percent (5%) of the total funds available for investment (based on book value on the date of acquisition). vi.v. Commercial Paper - Unsecured short-term debt of U.S. corporations may be purchased if the following conditions are met: 1. Maximum maturity of two hundred seventy (270) days. 2. Maximum allocation to commercial paper is twenty percent (20%) of the total funds available for investment (based on book value on the data of acquisition). 3. Maximum allocation to a single issuer is five percent (5%) of the total funds available for investment (based on book value on the date of acquisition). 4. The issuing corporation, or its guarantor, has a net worth of at least $50 million. 5. At time of purchase, the issuing corporation, or its guarantor, has short-term debt ratings of not less than Tier-1 from any two (2) NRSROs and long-term debt ratings of not less than single-A. vii.vi. Municipal Securities - The MDTA may purchase obligations of state or local government municipal bond issuers meeting one (1) of the following two (2) conditions: 1. Full faith and credit obligations of state or local government municipal bond issuers that are rated at the time of purchase in at least the second highest rating category by at least one (1) NRSRO. 2. Legally defeased municipal obligations that are secured by an escrow containing either U.S. Government Agency Securities or U.S. Government Securities viii.vii. Money Market Mutual Funds - The MDTA may purchase shares in open ended investment funds provided such funds are: 1. Registered under the Investment Company Act of 1940. 2. Operated in accordance with SEC Rule 2A-7. Rated in the highest category by at least one (1) NRSRO. ix.viii. Maryland Local Government Investment Pool - The MDTA may invest in the Pool with prior permission of the State Treasurer’s Office as outlined in Article 95, Section 22G of the Annotated Code of Maryland. x.ix. Supranationals – Rated in the highest category by at least one (1) NRSRO and denominated in U.S. dollars, include but not currently limited to: 1. World Bank – International Bank for Reconstruction and

Page 5 of 10

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