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1995 03 08 IAB
FILE COPY 4 4(V 78-495 CALLE TAMPICO - LA QUINTA, CALIFORNIA 92253 - (619) 777-7000 FAX (619) 777-7101 INVESTMENT ADVISORY BOARD AGENDA Study Session Room 78-495 Calle Tampico La Quinta, CA 92253 March 8, 1995 I CALL TO ORDER a. Pledge of Allegiance b. Roll Call H CONFIRMATION OF AGENDA III PUBLIC COMMENT (This is the time set aside for public comment on any matter not scheduled on the agenda.) IV CONSENT CALENDAR A. Approval of Investment Advisory Board Minutes of February 8, 1995. V BUSINESS SESSION A. Transmittal of Treasurers Report dated January 31, 1995. B. Investment Advisory Board meeting schedule. VI BOARD MEMBER COMMENTS VII INFORMATIONAL ITEMS A. Discussion of Allowable Investment from Bond Issues and Arbitrage Information. VII ADJOURNMENT MAILING ADDRESS - P.O. BOX 1504 - LA QUINTA, CALIFORNIA 92253 V0 La� •C � oz v � 'y OF TNti INVESTMENT ADVISORY BOARD MEETING: March 8, 1995 Business Item: A ITEM TITLE Transmittal of Treasurer's Report dated January 31, 1994. ISSUE AND DISCUSSION: The attached Treasurer's Report of January 31, 1995. Additional attachments in the form of correlating statements are included with the copy presented here. Review, receive and file. CITY OF LA QUINTA TREASURER'S REPORT JANUARY 31, 1995 ASSETS UNDER THE INVESTMENT DIRECTION TYPE OF INVESTMENT OF THE CITY TREASURER INSTITUTION MATURITY DATE INTEREST RATE AMOUNT RANK POOLED CASH CHECKING BANK OF AMERICA NIA N/A (1,956,907) 1 MONEY MARKET BANK OF AMERICA N/A 2.55 5,861,686 1 LAIFl98-33-434 STATE OF CALIF. DEMAND 5.612 4,171,542 N/A LAIF/65-33-017 STATE OF CALIF. DEMAND 5.612 3,614,857 N/A TOTAL POOLED CASH 11,691,178 CITY PETTY CASH N/A N/A N/A 1,000 1 MONEY MARKET BANK OF THE DESERT N/A 2.79 9,486 1 DEFERRED COMP ICMA DEMAND 7.6 AVG 233,530 2 TOTAL CITY 244,016 RDA RESTRICTED CASH BANK OF AMERICA RESTRICTED 3.41 ® 1,435,740 2 1ST INTERSTATE RESTRICTED 3.61 Qb 772,159 2 CONSTRUCTION 1ST INTERSTATE DEMAND 3.61 4,915,551 2 TOTAL RDA 7,123,450 DISTRIBUTION OF CASH AND INVESTMENTS CITY GENERALFUND GAS TAX FUND COMMUNITY PROJECT FUND CAPITAL PROJECT FUND QUIMBY FUND INFRASTRUCTURE FUND VILLAGE PARKING FUND ASSESSMENT DIST FUNDS TRUST AND AGENCY FUNDS RDA CAPITAL IMPROVEMENT FUNDS DEBT SERVICE FUNDS LOW/MOD FUNDS TOTAL 19,058,644 19,058,644 4,081,636 0 1,433,089 96,297 189,720 2,842,189 22,429 562,177 PA #1 PA #2 (2,338,534,00) 2,047,280.00 3,155,841.00 1,999,317.00 1,894,032.00 1,442,285.00 2,711,339.00 5,488,882.00 8,200,221 TOTAL 19,058,644 19,058,644 :I Fiscal Year 94/95 La Quints Redevelopment Agency RDA 94 series file: RDABND94/5 DEBT RESERVE REBATE ALTERNATIVE SERVICE FUND ACCOUNT PENALTY 117496800 117496801 117496802 117496803 07/01/94 BEGINNING BAL 239,290.93 " 0.00 0.00 JUL INTEREST 219.39 0.00 0.00 0.00 AUG INTEREST 777.34 0.00 0.00 0.00 SEPT INTEREST 816.02 0.00 0.00 0.00 OCT INTEREST 819.63 0.00 0.00 0.00 NOV INTEREST 864.58 0.00 0.00 0.00 DEC INTEREST 904.50 0.00 0.00 0.00 JAN INTEREST 996.69 0.00 0.00 0.00 FEB INTEREST 0.00 0.00 0.00 0.00 MAR INTEREST 0.00 0.00 0.00. 0.00 APR INTEREST 0.00 0.00 0.00 0.00 MAY INTEREST 0.00 0.00 0.00 0.00 JUN INTEREST 0.93 0.00 0.00 0.00 BALANCE 244,690.01 0.00 0.00 ' 0.00 " MBIA SURETY BOND $2,632040.00 INV VALUE totals 239,290.93 219.39 777.34 816.02 819.63 864.58 904.50 996.69 0.00 0.00 0.00 0.00 0.93 244,690.01 Fiscal Year 94/95 La Quinta Redevelopment Agency RDA PA#2 92 Series 07/01/94 BEGINNING BAL CITY OF L.Q. 7/11 JUL INTEREST AAGINTEREST SEPINTEREST OCT INTEREST TRNS TO CITY NOVINTEREST REC FROM CITY TRNS FROM SPCL FUND DECINTEREST DEBT SERV PYMT JAN INTEREST FEBINTEREST MARINTEREST APRINTEREST MAYINTEREST JUNINTEREST ESCROW SPECIAL FUND FUND 8116202-000 8116202-001 8116202-002 4,317,478.53 526,865.64 0.00 (19,360.13) 0.00 0.00 13,061.02 1,593.85 0.00 13,979.54 1,708.93 0.00 14,905.61 1,827.10 0.00 15,085.98 1,849.21 0.00 (32,134.61) 0.00 0.00 16,115.83 1,977.39 0.00 0.00 0.00 275,897.86 0.00 0.00 (275,897.86) 17,146.06 2,117.30 0.00 0.00 0.00 0.00 18,857.04 2,328.58 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BALANCE 4,375,1 file: RDABND94/5 SPECIAL INT FUND 8116202-003 279.91 0.00 20.36 0.97 1.04 1.05* 0.00 1.12 0.00 195,924.30 85.56 (196.228.75) 27.88 0.00 0.00 0.00 0.00 0.00 PRINCIPLE RESERVE FUND FUND totals 8116202-004 8116202-005 26.00 483,608.50 5,328,258.58 0.00 0.00 0.00 0.08 1,462.99 16,138.30 0.08 1,568.63 17,258.15 0.09 1,677.09 18,410.93 0.09 1,697.38 18,633.71 0.00 0.00 (32,134.61) 0.00 1,815.04 19,909.38 0.00 0.00 275,897.86 79,973.56 0.00 (0.00) 34.54 1,943.46 21,326.92 (80,000.00) 0.00 (276,228.75). 0.00 2,137.40 23,350.90 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 34.44 495,90.49 5,4111,461.244 Z�[D Z E� .fir-sEaZti AGE t t , N V-r O+ -Wy VAffi& Zit -��41s-9 2 LLD :A ■ LA QUINTA FINANCING AUTHORITY TREASURER'S REPORT JANUARY 31, 1995 TYPE OF INVESTMENT INSTITUTION MATURITY DATE INTEREST RATE AMOUNT CIVIC CENTER BOND PROCEEDS: CASH -CONSTRUCTION BANK OF AMERICA DEMAND 3.15 0 CASH -RESERVE BANK OF AMERICA DEMAND 3.33 712,902 CASH -REDEMPTION BANK OF AMERICA DEMAND 3.33 68,249 TOTAL 781,151 RANK 2 2 2 5 CITY OF LA QUINTA BANK RECONCILEMENT JANUARY 31, 1995 01/31/95 BANK STATEMENT BALANCES BANK OF AMERICA: STATE OF CALIF: LAIF LAW CHECKING M/M 98-33-434 65-33-017 TOTALS CHECKING 23,695.45 M/M 5,865,885.47 23,695.45 5,865,885.47 LAIF 98-33-434 4,249,970.85 4,249,970.85 LAW 65-33-017 3,663,657.37 3,663,657.37 01/31/95 TOTAL BANK STATEMENT BALANCES 23,695.45 5,865,885.47 4,249,970.85 3,663,657.37 13,803,209.14 LESS OUTSTANDING CHECKS: A/P (1,991,546.74) (1,991,546.74) P/R (7,898.65) (7,898.65) ADD OUTSTANDING DEPOSITS: 01 WI% 32,709.74 32,709.74 01 /31 /95 ADJUSTED BANK STATEMENT BALANCES (1,943,040.20) 5,865,885.47 4,249,970.85 3,663,657.37 11,836,473.49 01/31/95 G/L BALANCE POOLED CASH (1,956,906.13) 5,861,686.37 4,171,541.78 3,614,856.65 11,691,178.67 ADJ JE'S POSTED IN FEB 95 13,883.00 4,199.10 18,082.10 SRV CHGBK STMT .(17.07) (17.07) LAW JAN INTEREST POSTED IN FEB 95 78,429.07 48,800.72 127,229.79 010 /95 ADJUSTED G/L BAL - CASH & INVESTMENTS (1,943.040.M 5,865,885.47 4,249,970.85 3,663,657.37 11,836,473.49 GENERAL LEDGER - CL3050 ACCOUNT SUMMARY 4:33PM 03/03/95 CITY OF LA QUINTA AS OF 01/31/95 PAGE 1 ACCOUNT NUMBER DESCRIPTION PRIOR YTD CURRENT MONTH YEAR-TO-DATE AMOUNT DEBIT AMOUNT CREDIT AMOUNT AMOUNT Pooled Cash 101 000 101 000 Pooled Cash 3,721,600.40 1,477,775.53 -1,128,224.32 4,071,151.61 201 000 101 000 Pooled Cash 0.00 23,675.83 -23,675.83 0.00 205 000 101 000 Pooled Cash 1,433,089.33 0.00 0.00 1,433,089.33 210 000 101 000 Pooled Cash 4,456.64 0.00 0.00 4,456.64 215 000 101 000 Pooled Cash 0.00 427,305.32 -229,392.48 197,912.84 220 000 101 000 Pooled Cash 183,515.86 6,204.00 0.00 189,719.86 225 000 101 000 Pooled Cash 2,766,802.92 75,386.50 0.00 •2,842,189.42 230 000 101 000 Pooled Cash 22,428.62 0.00 0.00 22,428.62 235 000 101 000 Pooled Cash 27,977.07 0.00 0.00 27,977.07 240 000 101 000 Pooled Cash 0.00 0.00 0.00 0.00 245 000 101 000 Pooled Cash 936,187.27 1,131,403.68 -173,559.37 1,894,031.58 246 000 101 000 Pooled Cash 1,197,468.11 248,558.91 -3,742.51 1,442,284.51 301 000 101 000 Pooled Cash 552,097.74 2,359,055.08 -1,191,051.50 1,720,101.32 302 000 101 000 Pooled Cash 559,849.70 708,039.54 -40,731.97 1,227,157.27 310 000 101 000 Pooled Cash -1,000.00 0.00 0.00 -1,000.00 401 000 101 000 Pooled Cash 282,882.10 10,802.50 -197,387.89 96,296.71 405 000 101 000 Pooled Cash -2,314,143.30 0.00 -24,390.88 -2,338,534.18 406 000 101 000 Pooled Cash -2,858,398.70 0.00 -9,871.67 -2,868,270.37 407 000 101 000 Pooled Cash 364,263.87 0.00 0.00 364,263.87 408 000 101 000 Pooled Cash 0.00 0.00 0.00 0.00 701 000 101 000 Pooled Cash 215,155.76 1,105.09 0.00 216,260.85 710 000 101 000 Pooled Cash 194,082.77 48,179.04 -582.33 241,679.48 715 000 101 000 Pooled Cash 131,907.14 64,939.98 -1,065.42 195,781.70 720 000 101 000 Pooled Cash 100,802.77 68,167.38 -848.11 168,122.04 725 000 101 000 Pooled Cash 198,339.53 131,852.50 -1,500.88 328,691.15 730 000 101 000 Pooled Cash 124,163.07 92,075.98 -851.70 215,387.35 FINAL TOTAL 7,843,528.67 6,874,526.86 -3,026,876.86 11,691,178.67 fire .� Bericof America Your Bank of America P.O. Box 30746 Business Analyzed Los Angeles, CA 90030-0746 Checking Statement 0916 E 409-6 Statement Period: December 31, 1994 through January 31, 1995 Account Number: 09160-15464 CITY OF LA QUINTA P 0 BOX 1504 At Your Service LA QUINTA CA 92253 Call: 619-340-1867, 24 hours, 7 days a week Indio Main Office 81-800 Hwy 111 Indio, CA 92201 Customer since 1982 Bank of America- appreciates your business and we enjoy serving you. ❑ Summary of Your Business Analyzed Checking Account Beginning Balance on 12/31/94 $511,347.97 Number of branch/ATM deposits 22 Total Deposits and Other Credits + 969,951.37 Number of checks paid 408 Total Checks and Other Withdrawals - 1,457,597.89 Number of 24 Hour Customer Service Calls Self -Service 12 Account s - 6.00 Assisted 0 Ending Balance $23,695.45 ❑ Important Information About Your Account Your Business Analyzed Checking Analysis Statement provides details regarding monthly analysis charges. ❑ Branch/ATM Deposits Number Date Posted 01103 01 /04 01 /05 01 /06 01 /09 01/10 01/11 01 /12 01/13 01/13 01/17 01/18 \, Amount - $` 566.70 28,740.01 '201,621.82 54,837.10 ":-' 4,981.19 `",10,383.28 2,423.45 877.47 3,408.92 80;000.00 �.12,963.64 5,981.95 Number Date Posted 01/19 01/20 01 /23 01 /24 01/24 01 /25 01 /26 01 /27 01 /30 01 /31 Total of 22 Branch/ATM Deposits Amount ,.187,437.20 1, 5,503.17 � 5,272.63 �t 1,59b.UU .17,313.69 )1,132.00 -d 98,681.88 37,568.03 6,100.61 $969,802.34 ❑ Checks Paid * Gap in check sequence Date Paid Number Amount Date Paid Number Amount 01 /03 11105 $ 1,076.96 01 /03 11110 \,&757.76 01 /03 * 11107 `�V86.61 01 /05 * 11112 " 923.01 01 /04 11108 ti 219.64 01 /03 11113 j 897.96 01 /03 11109 ",j861.98 01 /03 11114 \ 939.79 Continued on next page 0029760.001.123 Page 1 of 6 8 t-It Sank of America P.O. Box 30746 Los Angeles, CA 90030-0746 0916 E 1-2 CITY OF LA QUINTA REC'EIVED P 0 BOX 1504 LA QUINTA CA 92253-1504 i-`INAII GE" DEPT ❑ Summary of Your Business Money Market Account Beginning Balance on 12/31/94 $114,213.25 Total Deposits and Other Credits + 6,027,473.12 Total Checks and Other Withdrawals - 280,000.00 Interest Paid + 4 199.10 Ending Balance $5,865,885.47 Your Bank of America Business Money Market Account Statement Statement Period: December 31, 1994 through January 31, 1995 Account Number: 09168-16233 At Your Service Call: 619-340-1867, 24 hours, 7 days a week Indio Main Office 81-800 Hwy 111 Indio, CA 92201 Customer since 1989 Bank of America appreciates your business and we enjoy serving you. Annual Percentage Yield earned this period 3.51 % Interest paid year-to-date $4,199.10 Number of branch/ATM deposits 2 Number of 24 Hour Customer Service Calls Self -Service 5 Assisted 0 ❑ Important Information About Your Account Total interest paid to your account in 1994: $14,576.26 ❑ Branch/ATM Deposits Number Date Posted Amount Number Date Posted Amount 01/06 200,000.00 Total of 2 Branch/ATM Deposits $1,027,473.12 01 /25 f827,473.12` Cl Account Activity Date Posted Description Reference Number Amount Other Deposits and Credits 01/25 Check Deposit Adjustment $5,000,000.00 Other Withdrawals 01 /13 Telephone/Telegraphic Transfers :Y $280,000.00 Interest Paid 01 /31 Interest Paid From 12/31 /94 Through 01 /31 /95 $4,199.10 Continued on next page 0015919.001.123 Page 1 of 2 to q STATE OF CAUFORNIA MATT FONG, Treasurer OFFICE OF THE TREASURER SACRAMENTO LOCAL AGIM jr,k'144USTXRXT FUND Fro 9429'00�: Date: 01/31/95 SACRAMMO,,r :CA �94209-0001 Page: 01 JANUARY 1996STATEMENT ACCOUNT NUMBER: -98733-434 CITY OF LA OUINTA ATTN: FINANCE DIRECTOR P.O. BOX 1504 -LA QUINTA CA 92253 -- EFFECTIVE TRANSACTION TRH- COW AUTH mmsAcTrox DATE DATE TYPE 90 CALLER AMOUNT --------- ---- ------ ------- BEGINNING BALANCE REG 01/13/95 01/12/95 DD 2101- SY4, $78,42907IF ENDING BALANCE REG ,BALANCE ---------- ~ $41171j541.78 $4,249,970.85 --------------- $4,249,970.85 NO BOND PROCEEDS --------------- G AL $4,249,970.85 SUMMARY' TRAM COUNT. TOTAL DEPOSIT ANT TOTAL WITHDRAWAL AXT - -------------------- REG 0 $78'$0.00429.07' B/P. o $0000 $0.00 -------------------- $0-.00 Ock' STATE OF CAUFORNIA MATT FONG, Treasurer OFFICE OF THE TREASURER SACRAMENTO M FECEIVED x LOCAL AGENCY 03STMENT. FUND � � B Z 7 19�5 P .0. PDX 9142809 Date 01/31/95 WRAM:ENTQ, ""CA "14209-0001 RNANCEDEPr page;o i_ ; +7ANUARx, �1995..S�AT��BNT ACCOUNT NUMBER: 65-33-017 LA OUINTA-REDEVELOPMENT AGENCY ATTN: FINANCE DIRECTOR P.O. BOX -1504 LA OUINTA CA 92253 +7ry EFFECTIVE '`TRANSACTION TRAM _:-:CONV AUTH TRANSACTION DATE DATE TYPE NO CALLER AMOUNT BALANCE --------- ----------- ---- ------ ---- -----------------------------r_— BEGINNING BALANCE - REG ��--' ^�~- $3, 614, 856.65 01/13/95 01/12/95 DD 208 SYS $48,800.72 $3,663,657.37 ,.---------ww_w-- END I NG BALANCE ' - REG.__ _ ___ _..._____ �-w -- _ $ 3 , 6 6 3 , -6 5 7.3 7 NO BOND PROCEEDS --------------- GRAND VOTAL 3 663 657.37 �assssa�=as:�ae��=� SUMMARY TRAN COUNT TOTAL DEPOSIT AMT TOTAL WITHDRAWAL ANT www_--.�wwww--w _wwwwr �!w,Yw--w-w .------_---w_-- REG 0 $48,800.72 $0.00 B/P o $4.00 $0.00 ---------- -------- ----------- ril...2 6 UUT ti I a N D I N C- C H E (.'. K S PAGE I 2/1.4/95 9 e 44 � 44 CHECK CHECK CHECK CHECK CUMULATIVE NUMBER TYPE DATE PAYEE- AMOUNT SUP —TOTAL 14453 REGULAR 1/19/93 1640 PENA# JOHN 55,00 55.00 14641 REGULAR 2/16/93 2670 LtESFR'r FAC 11-ItTF_S CORP 435*00 490.00 15744 REGtri_AR 6/30/93 821 HIGH TECH 'IRRIGATION INC 866,23 1356,23 16837 REGULAR 11/02./93 1174 LEUNE, DEAN 3.00 1359.23 17149 REGULAR 12/07/93 1640 PENAL JOHN 14.84 1374.07 17370 REGULAR 12/28/93 032 SMOLENSt UONNALDA 45*00 1419.07 18499 RFGLA_AR 5/10/94 4038 SULLIVAN/WORKMAN/DEE TRST 7788110 9207.17 19670 REGULAR 10/10/94 '6Y54 SMITH, DEEBBIE 100.00 9307.17 19866 REGULAR 10/31/94 1394 MULLENt STACEY 25.00 9332.17 19971 PREPATD 11/09/94 2-/46 !'f.'UFF t BRANUON OR CARLA 221.76 9553t93 20000 REGULAR 11/30/94 160 ARROW PRINTING COMPANY 695.25 10249.18 20050 REM.AR 11/30/94 1.619 MAY► ROBIN L 6.00 10255.18 20084 REGULAR 11/30/94 2353 WEBB FOODS• JOSEPH 115.00 10370,18 20092 [''REPAID 12/0]./94 1505 PROTECTION SERVICES IND 575*00 10745.18 20106 REGULAR 12/01/94 27 ATKINS, HONEY J 50.00 10795olS 20234 REGULAR 12/14/94 1432 NATIONAL RtE.CREAT I ON/PARK 15.00 10810 418 2.0290 REGULAR 12/28/94 it AEP 85.00 10895.18 20309 REt3ULAR 12/28/94 603 f:AIRMONT HOTEL SAN JOSE 189.75 11084*93 20315 REGULAR. 12/28/94 687 GOUTHIERs H 28.00 11112#93 20378 R UL LAR 12/30/94 1.394 MULLEN t STACEY 00 11137.93 20379 REGULAR 12/30/94 1452 NEWKIRKs ELWIN 00 E00 11187.93 20382 REGULAR 12/30/94 1643 PERKINS• RONALD A. 1193'7.93 TOTAL OF ALL OUTSTANDING CHECKS 11937#93 +E 11937#93 +F �I l 1�937,p3 > Z —�'cr� 0L7rs-r;pvtio1i Jk A/,O t, 49 r 44 /to .R3001-BANK RECONCILIATION OUTSTANDING CHECKS 10:50AM 02/14/95 :ITY OF LA QUINTA PAGE 3 '-ANK CHECK CHECK VENDOR VENDOR NAME CHECK ,CCT. NO. DATE NO. AMT. A 20598 01/31/95 SHAO10 SHADOW PALMS GARDENING 7233.86 A 20599 01/31/95 SMA010 SMART & FINAL 174.54 A 20600 01/31/95 SM0010 DONNALDA SMOLENS 60.00 A 20601 01/31/95 S00010 THE SOCO GROUP INC 67.60 A 20602 01/31/95 S00050 SO CALIF TELEPHONE CO INC 300.00 A 20603 01/31/95 SOL010 SOLANO PRESS BOOKS 43.95 A 20604 01/31/95 SOU010 SOUTHERN CALIF GAS CO 344.13 A 20605 01/31/95 SPHO10 SPHERE ASSOCIATES INC 10.00 A 20606 01/31/95 SPRO10 SPRINT 485.26 A 20607 01/31/95 STE010 STEVENSON, PORTO & PIERCE 3000.00 A 20608 01/31/95 STE020 STEVE'S OFFICE SUPPLY 449.33 A 20609 01/31/95 TAF010 THE TAFT GROUP 128.00 A 20610 01/31/95 TAY010 STEVE TAYLOR & SON 900.00 A 20611 01/31/95 TIG010 TIGER REPROGRAPHICS 2-47.44 A 20612 01/31/95 TKDO10 T.R.D. ASSOCIATES INC 66.25 A 20613 01/31/95 TOP010 TOPS'N BARRICADES INC 24.24 A 20614 01/31/95 TOT010 TOTALPLAN 8146.87 A 20615 01/31/95 TRIO10 TRI LAKE CONSULTANTS INC 6912.00 A 20616 01/31/95 TRU010 TRULY NOLEN INC 144.00 A 20617 01/31/95 UND010 UNDERGROUND SERVICE ALERT 85.00 A 20618 01/31/95 URB010 URBAN LAND INSTITUTE 120.00 A 20619 01/31/95 USP010 U S POSTMASTER 170.00 A 20620 01/31/95 VAL005 VALLEY ANIMAL CLINIC 20.00 A 20621 01/31/95 VER010 ROMANO VERLENGIA 289.21 A 20622 01/31/95 VIK010 VIKING OFFICE PRODUCTS 295.46 A 20623 01/31/95 VON010 VON'S COMPANIES INC 1190.49 A 20624 01/31/95 WAL010 WAL MART STORES INC 55.84 A 20625 01/31/95 WAS020 WASTE MGMNT OF THE DESERT 430994.94 A 20626 01/31/95 WEL010 WELCH'S UNIFOR RENTAL 76.78 A 20627 01/31/95 WES010 WEST PUBLISHING CORP 388.51 A 20628 01/31/95 XER010 XEROX CORPORATION 1315.94 1,mewg"$l 2 13 Ali BRK0 1-BANK RECONCILIATION OUTSTANDING CHECKS 10:50AM 02/14/95 CITY OF LA QUINTA PAGE 2 BANK CHECK CHECK VENDOR VENDOR NAME CHECK ACCT. NO. DATE NO. AMT. A 20546 01/31/95 GSA010 G & S AUTOMOTIVE 395.63 A 20547 01/31/95 GTE010 GTE CALIFORNIA 186.57 A 20548 01/31/95 HAR010 HARRIS & ASSOCIATES 3900.00 A 20549 01/31/95 HER010 JERRY HERMAN 51.89 A 20550 01/31/95 HIG010 HIGH TECH IRRIGATION INC 715.07 A 20551 01/31/95 HOA010 HUGH HOARD INC 100.00 A 20552 01/31/95 HOL010 HOLMAN INDUSTRIES 11.53 A 20553 01/31/95 IBM010 IBM CORPORATION UW3 233.23 A 20557 01/31/95 IMP010 IMPERIAL IRRIGATION DIST 9146.81 A 20558 01/31/95 IND020 INDIO PIPE & SUPPLY INC 1482.81 A 20559 01/31/95 JUB010 JUBILEE POOL & SPA CARE 95.00 A 20560 01/31/95 JUD010 JUDICIAL DATA SYSTEMS COR 119.00 A 20561 01/31/95 KIC010 KICAK & ASSOCIATES 10985.50 A 20562 01/31/95 LAC010 L A CELLULAR 575.25 A 20563 01/31/95 LAQ040 LA QUINTA CHAMBER COMMERC 2550.00 A 20564 01/31/95 LAQ060 LA QUINTA HIGH SCHOOL 100.00 A 20565 01/31/95 LAS010 LASER EDGE 383.80 A 20566 01/31/95 LEA010 LEAGUE OF CALIF CITIES 462.00 A 20567 01/31/95 LEA015 LEAGUE OF CALIF CITIES 210.00 A 20568 01/31/95 L00010 LOCK SHOP INC 101.77 A 20569 01/31/95 MAP010 MAPLE LEAF PLUMBING 206.70 A 20570 01/31/95 MAR010 MARTIN & CHAPMAN CO 42.71 A 20571 01/31/95 MCDO10 MC DOWELL AWARDS 60.62 A 20572 01/31/95 MCK010 MCKESSON WATER PRODUCTS 69.52 A 20573 01/31/95 MKC010 MK CAMERA AND PHOTO 49.69 A 20574 01/31/95 MUL010 STACEY MULLEN 200.00 A 20575 01/31/95 MUN010 MUNI FINANCIAL SERV INC 1550.00 A 20576 01/31/95 MUS010 MUSI-CAL 6794.27 A 20577 01/31/95 NAT020 NATL GUARDIAN SECURITY SV 67.50 A 20578 01/31/95 NAT025 NATIONAL NOTARY ASSOCIATI 41.79 A 20579 01/31/95 NOR010 NORRELL SERVICES INC 938.60 A 20580 01/31/95 OWE010 POPPY OWEN 428.33 A 20581 01/31/95 PCT010 PC TROUBLESHOOTER 443.35 A 20582 01/31/95 PEN010 JOHN PENA 129.01 A 20583 01/31/95 PIT010 P'ITNEY BOWES CREDIT CORP 592.63 A 20584 01/31/95 PLA020 THE PLANNING CENTER 698.75 A 20585 01/31/95 POS010 POSTAGE BY PHONE SYSTEM 2000.00 A 20586 01/31/95 PRI020 THE PRINTING PLACE 45.79 A 20587 01/31/95 PR0005 PROFESSIONAL SERVICE IND 110.00 A 20588 01/31/95 REL010 RELIABLE 116.26 A 20589 01/31/95 RES010 RESOURCE DIRECTOR 75.00 A 20590 01/31/95 RIL010 WILLIAM R RILEY 187.50 A 20591 01/31/95 RIV080 RIVERSIDE COUNTY HEALTH 888.30 A 20592 01/31/95 RIV100 RIVERSIDE COUNTY SHERIFFS 141194.98 A 20593 01/31/95 RIV150 RIV COUNTY TRANSPORTATION 40526.00 A 20594 01/31/95 RUB010 MICHAEL J RUBINO 1430.50 A .20595 01/31/95 SAGO10 SAGAMORE PUBLISHING INC 94.45 A 20596 01/31/95 SAN010 SANBORN/WEBB INC 250.00 A 20597 01/31/95 SAW010 STAN B SAWA 71.68 14 BR3C01-BANK RECONCILIATION OUTST DING CHECKS 10:50AM 02/14/95 `CITY OF LA QUINTA PAGE 1 BANK CHECK CHECK VENDOR VENDOR NAME CHECK ACCT. NO. DATE NO. AMT. A 20416 01/10/95 CAL030 CALIF PARK & REC SOCIETY 120.00 A 20421 01/10/95 DAY010 DAY -TIMER 27.15 A 20423 01/10/95 DESO40 DESERT JANITOR SERVICE 650.00 A 20426 01/10/95 ECO050 ECONOMICS INC 1124.00 A 20430 01/10/95 GRIO10 DAVID M GRIFFITH & ASSOC 1011.02 A 20462 01/10/95 S00O20 SO CALIF ASSN OF CODE 25.00 A 20483 01/18/95 &00003 TAMARA RADER 40.00 A 20484 01/18/95 AND010 ANDERSON TRAVEL SERVICE 84.00 A 20486 01/18/95 ELRO10 EL RANCHITO 100.00 A 20488 01/18/95 LAQ050 LA QUINTA CITY EMPLOYEES 47.50 A 20490 01/18/95 UNIO05 UNITED WAY OF THE DESERT 98.50 A 20496 01/19/95 PER005 P E R S 13621.44 A 20498 01/19/95 RIV040 RIV CNTY DISTRICT ATTORNY 361.50 A 20501 01/24/95 ACE010 ACE HARDWARE 112.08 A 20505 01/24/95 RIV010 CITY OF RIVERSIDE 32.00 A 20508 01/30/95 VIN010 VINTAGE LANDSCAPE MAINT 4813.08 A 20509 01/31/95 AlRO01 A-1 RENTS 226.89 A 20511 01/31/95 ACE010 ACE HARDWARE 533.33 A 20512 01/31/95 ALE010 ALEXANDER HAMILTON INSTIT 68.60 A 20513 01/31/95 AME010 AMERICAN PLANNING ASSOC 45.90 A 20514 01/31/95 ARRO10 ARROW PRINTING COMPANY 4749.41 A 20515 01/31/95 ASCO01 A & S COFFEE SERVICE 118.00 A 20516 01/31/95 ASS010 ASSOCIATES MEGA SUB-SYS 4732.00 A 20517 01/31/95 ATT010 A T & T 1082.12 A 20518 01/31/95 BAN060 BANK OF AMERICA CORPORATE 1191051.50 A 20519 01/31/95 CAL010 CAL WEST ENGINEERING 805.00 A 20520 01/31/95 CAL035 CAL PRESERVATION FOUNDATN 100.00 A 20521 01/31/95 CAL060 CALIF STREET MAINTENANCE 5351.12 A 20522 01/31/95 CHAO10 GEORGE H CHANEY COMPANY 30325.39 A 20523 01/31/95 COA030 COACHELLA VALLEY INSURANC 2358.00 A 20524 01/31/95 COA070 COACHELLA VALLEY OFFICE 219.34 A 20528 01/31/95 COA080 COACHELLA VALLEY WATER 5306.89 A 20529 01/31/95 COS010 DAVID M COSPER 59.52 A 20530 01/31/95 CVA010 C V A G 1580.82 A 20531 01/31/95 DECO10 DECRATREND PAINTS 378.20 A 20532 01/31/95 DEP020 DEPTOF TRANSPORTATION 1793.92 A 20533 01/31/95 DES010 DESERT BUSINESS MACHINES 225.00 A 20534 01/31/95 DES015 DESERT CASH REGISTER 173.22 A 20535 01/31/95 DESO40 DESERT JANITOR SERVICE 3963.08 A 20536 01/31/95 DOU010 DOUBLE PRINTS 1 HR PHOTO 37.14 A 20537 01/31/95 ECO050 ECONOMICS INC 468:23 A 20538 01/31/95 FAI010 FAIRMONT HOTEL 315.00 A 20539 01/31/95 FED010 FEDERAL EXPRESS CORP 365.25 A 20540 01/31/95 FIE020 FIESTA FORD INC 140.47 A 20541 01/31/95 FIR020 FIRST INTERSTATE BANK 4717.00 A 20542 01/31/95 FUN020 FUNKEY INDUSTRIES INC 135.33 A 20543 01/31/95 GAS010 GASCARD INC 1285.85 A 20544 01/31/95 GIL010 HELEN GILREATH 19.60 A 20545 01/31/95 GRA010 GRANITE CONSTRUCTION CO 531.24 15 UUTSTANDING CHECKS CHECK I)ATE. CHECK NO, EMPLOYEE AMOUN•r 12/02/94 11040 90 SPEER* STEVEN D. 1202,09 .12/02/94 'TOTAL 1202.09 * 1 CHECKS REPORT TOTAL 1202.09 1 CHECKS 13R3001-BANK RECONCILIATION OUTSTANDING -•CHECKS 12:02PM 02/14/95 CITY OF LA QUINTA PAGE 1 BANK CHECK CHECK EMPLOYEE EMPLOYEE NAME CHECK ACCT. NO. DATE so* AMT. P 11300 01/13/95 0000000147 COSPER, DAVID M 41.90 P 11318 01/27/95 0000000047 SHEPHERD, ELEANOR L 1063.82 P 11319 01/27/95 0000000058 HERMAN, JEROLD D 1771.27 P 11321 01/27/95 0000000066 GATES, WILLIAM L 1008.34 .P 11323 01/27/95 0000000060 CEBALLOS, MISAELA 137.62 P 11337 01/27/95 0000000102 SPIDELL, CRISTAL C 873.50 P 11342 01/27/95 0000000113 LI CALSI, PAMELA J 846.60' P 11363 01/27/95 0000000147 C0SPER,.DAVID M 16.82 P 11367 01/27/95 0000000153 MANLFY,. PHYLLIS J 928.38 P 11368 01/27/95 0000000154 BROWN, VXCTOR J 8.31 6/�q�ti/(� / (� Tii L (�C1TS %f`�3V�I W ��IS-�j�,•� (. ��4..�°�,� , 7C / ®i �� w MEMORANDUM TO: Investment Advisory Board Diana Brown Helen Gilreath Joseph Irwin Tom Lewis OPY Bruce Sales FROM: John Risley, Accounting Supervisor DATE: February 7, 1995 SUBJECT: Restrictions on Investments and Arbitrage Computation At the January 11th meeting the Investment Advisory Board requested information pertaining to the restrictions on investments and the arbitrage rebate computation. Attached you will find the following exhibits: Exhibit A: Restriction on Investments Financing Authority, 91 Series Civic Center Revenue Bonds Exhibit B: Trust Indenture which includes Restriction on Investments Project Area #2, Tax Allocation Bonds Exhibit C: Arbitrage Rebate Computation which includes allowable yield Project Area #1, Tax Allocation Bonds The funds that are available for investment are identified on the table below, 1. LAIF (City) 2. LAIF (Redevelopment Agency) 3. Restricted Cash (B of A) 4. Restricted Cash (FIB) 5. Construction (FIB) RESTRICTED ALLOWABLE AMOUNT YIELD INVESTMENT 4,171,542.00 N/A Per City Policy 3,614,857.00 N/A Per City Policy 707,247.00 6.71 Exhibit A 768,079.00 5.93 avg Exhibit B 4,874,954.00 5.93 avg Exhibit B The Arbitrage Rebate Computation for Project Area #2, Tax Allocation Bonds should be available the end of June 1995. CITY OF LA QUINTA TREASURER'S REPORT DECEMBER 31,1994 ASSETS UNDER THE INVESTMENT DIRECTION OF THE CITY TREASURER TYPE OF MATURITY INTEREST INVESTMENT INSTITUTUION DATE RATE AMOUNT RANK POOLED CASH CHECKING BANK OF AMERICA WA WA $ (57,083) 1 MONEY MARKET BANK OF AMERICA WA 2.55 114,213 1 LAIF/98.334U STATE OF CALIF. DEMAND 5.528 4,171,542 WA LAIFI'65-33.017 STATE OF CALIF. DEMAND 5.528 3,614,857 Z . WA 7,843,529 CITY PETTY CASH WA WA WA 1,000 1 MONEY MARKET BANK OF THE DESERT WA 2.79 9,464 1 DEFERRED COMP ICMA DEMAND 7.6 AVG INT 204,966 2 215,430 RDA RESTRICTED CASH BANK OF AMERICA RESTRICTED 3.00 242,787 2 1ST INTERSTATE RESTRICTED 3.30 768,079 2 CONSTRUCTION 1ST INTERSTATE DEMAND 3.30 4.874,954.5, 2 5,885,820 TOTAL $13,944,779 13.944,779 DISTRIBUTION OF CASH AND INVESTMENTS CITY GENERAL FUND 3,732.064 GAS TAX FUND 0 COMMUNITY PROJECT FUND 1,433,089 CAPITAL PROJECT FUND 282,882 QUIMBY FUND 183,516 INFRASTRUCTURE FUND 2.766.803 VILLAGE PARKING FUND 22,429 ASSESSMENT DIST FUNDS 364,264 TRUST AND AGENCY FUNDS 1.200,851 9,985,898 RDA PA 81• PA 82 CAPITAL IMPROVEMENT FUNDS ($2,314,143) $2,016,555 DEBT SERVICE FUNDS 794885 1327929 LOW/MOD FUNDS 936187 1197488 ($583,071) $4,541,952 3.958,881 13,944,779 13.944,779 LA QUINTA FINANCING AUTHORITY TREASURER'S REPORT DECEMBER 31,1994 ASSETS UNDER THE INVESTMENT DIRECTION OF THE FINANCING AUTHORITY TREASURER. TYPE OF MATURITY INTEREST INVESTMENT INSTITUTUION DATE RATE AMOUNT RANK CIVIC CENTER BOND PROCEEDS: CASH -CONSTRUCTION BANK OF AMERICA DEMAND 3.15 2,244 2 CASH -RESERVE BANK OF AMERICA DEMAND 3.15 707,247 2 CASH -REDEMPTION BANK OF AMERICA DEMAND 3.15 65,464 2 TOTAL 774,955 FIMITIAJ& figPi6Cf7t/ ?1550`65 CPa✓7F2 AEOOjE EX H 1E IT `A" to the extent said amount represents Rebatable Arbitrage and the balance to the Bond Fund for application in accordance with Section 3.02 hereof. The Trustee shall notify the City prior to each Base Rental Payment Date Section 3.15. Restrictions on Invest mentFunds or Accounts. Notwithstandingan otherrov of none in Y Trust Agreement, all money held bytheTrustee Pafterlthe othird this anniversaryof the on original delivery of the Bonds in any of the funds or accounts established pursuant to this Trust Agreement, other than money on deposit in the Bond Fund and the Reserve Fund, shall be invested solely in obligations issued by the United States Treasury, in obligations guaranteed by The Federal Housing Administration, The Veterans Administration, the Federal National Mortgage Association, The Federal Home Loan Mortgage Corporation, or The Government National Mortgage Association, or in such other investments as may be permitted under the Regulations, unless, in the opinion of Bond Counsel, another investment of such funds will not impair the exclusion from gross income for federal income tax purposes of the interest component with respect to any payment of Base Rental Payments or the exemption of such component from California personal income taxation. ARTICLE IV REDEMPTION Section 4.01. Redemption. The Bonds shall be subject to redemption prior to their stated maturity only as set forth below: (a) The Bonds maturing on or before October 1, 2000, are not subject to optional redemption prior to maturity. The Bonds maturing on or after October 1, 2001, are subject to optional redemption prior to maturity on or after October 1, 2000, at the option of the City, as a whole on any date or in part on any Interest Payment Date, from amounts deposited with the Trustee by the City and deposited by the Trustee in the Bond Fund in furtherance of the exercise of the City's option to purchase the Authority's right, title and interest in the Leased Premises in accordance with Section 15 of the Sublease and from any other funds available therefor, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be prepaid) plus accrued but unpaid interest to the redemption date: 11-26-91 6849u/2588/015 -31- $5,845,000 LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2 TAX ALLOCATION BONDS, ISSUE OF 1992 TAX CERTIFICATE The La Quinta Redevelopment Agency (the "Issuer") hereby makes the following representations of facts and expectations and covenants to comply with the requirements of this Tax Certificate in connection with the $5,845,000 La Quinta Redevelopment Project Area No. 2 Tax Allocation Bonds, Issue of 1992 (the "Obligations"). These representations and covenants are in furtherance of the covenants contained in Section 702 of the Indenture of Trust Securing $5,845,000 La Quinta Redevelopment Project Area No. 2 Tax Allocation Bonds, Issue of 1992, dated as of December 1, 1992 (the "Issuance Document"), entered into by the Issuer and First Interstate Bank of California, as Trustee, and in part are made pursuant to Section 1.103-13(a)(2) of the Treasury Regulations. Capitalized terms used herein which are not otherwise defined herein shall have the respective meanings set forth in the Issuance Document. I. General Matters. (a) Authority for Issuance. The undersigned and other officers and members of the Issuer are charged with the responsibility of authorizing and requesting the issuance of the Obligations. The Obligations are being issued pursuant to the Community Redevelopment Law (Part 1 of Division 24 _. (commencing with Section 33000) of the Health & Safety Code _o.f the State of California. (b) Sale of Obligations. The Obligations are being delivered to Westhoff Martin and Associates as underwriter (collectively, the "Underwriter") on the date hereof. (c) Purpose of Obligations. The Obligations are being sold and delivered for the purpose of (a) financing certain capital costs of the Issuer as described in Exhibit A attached hereto (the "Project"), (b) paying costs of issuance with respect to the Obligations -(the "Issuance Costs"), and (c) funding a reasonably required reserve with respect to the Obligations. (d) Mature of Issue. All the Obligations are being issued at the same time, have been sold pursuant to a common plan of financing and a common plan of marketing, and will be (or will have substantially the same claim to be) paid out of substantially the same source of funds. Accordingly, the Obligations are a single issue of obligations for certain federal income tax purposes relating to the exclusion from gross income of interest on the Obligations. No other governmental obligations which will be paid out of substantially the same source of funds (or which will have substantially the same claim to be paid out of substantially the same source of funds) are being issued at substantially the same time and sold pursuant to a common plan of financing or marketing. II. private Activity. Other than as described below, or absent an opinion of nationally recognized bond counsel that the exclusion from gross income of interest with respect to the Obligations will not be adversely affected for federal income tax purposes, the Issuer will not allow any of the proceeds of the Obligations, or any of the facilities financed with such obligations to be used in the trade or business of any nongovernmental persons (other than in their roles as members of the general public) and will not loan any of the proceeds of the Obligations, to any nongovernmental persons. Property financed by proceeds of the Obligations, however, may be utilized by private persons or entities engaged in a trade or business provided the Issuer (and any related party to. the Issuer) does not receive directly or indirectly any payments from such persons or entities (or related parties) other than generally applicable real property taxes. III. Arbitrage Certifications. The following states the expectations of the Issuer with r P s n P c- t- to- t hie ..mamca.uua b _.a n ..11....9_4,.. he_ p r o c eeds . of the Obligations and certain other monies or property: (a) Source and Use of Funds. The total proceeds to be derived by the Issuer from the sale of the Obligations, in the aggregate amount of $5,722,248.88 (representing $50845,000.00 face amount of the Obligations, plus accrued interest of $16,407.08 (the "Accrued Interest"), less original issue discount of $90,936.95, and less Underwriter's discount of $48,221.25) are expected to be needed and fully expended as follows: 12/15/92 3844Q/2338/015 -2- (i) $112,777.00 of such proceeds will be deposited in the Redevelopment Fund and, together with investment earnings thereon, will be expended to pay Issuance Costs within one year of the date hereof; (ii) $16,407.08 of such proceeds (representing the Accrued Interest) will be deposited in the Interest Account of the Special Fund, and together with investment earnings thereon, will be expended to pay Accrued Interest with respect to the Obligations; (iii) $389,440.00 of such proceeds will be deposited in the Reserve Account of the Special Fund and expended as necessary to pay principal and interest with respect to the Obligations; (iv) $3,843,624.80 of such proceeds will be deposited in the Redevelopment Fund and such amounts, together with the earnings thereon, will be utilized to pay Project costs; and (v) $1,360,000.00 of such proceeds will be deposited in the Redevelopment Escrow Fund to be transferred to the Redevelopment Fund as provided. in the Issuance Document. (b) Over -Issuance. The total proceeds to be received by the Issuer from the sale of the Obligations, together with anticipated investment earnings thereon, do not exceed the total amount necessary for the purposes described above. (c) Temporary Period. Within six months of the date hereof, the Issuer will have either entered into a binding obligation with respect to the Project or expended at least $100,000.00 on the Project. Work on the construction and acquisition of the Project will proceed with due diligence to the completion thereof, and all proceeds derived from the sale of the Obligations will be expended within three years of_ the date hereof, however if any money is in the Redevelopment Escrow Fund on December 1, 1995 said money shall be transferred to the Principal Account, the Interest Account or the Redemption Fund at the discretion of the Issuer. (d) Funds and Accounts. The Issuance Document creates and establishes the following funds and accounts with respect to - the Obligations: (i) the Special Fund, and within such fund, (A) the Principal Account, (B) the Interest Account, 12/15/92 3844Q/2338/015 -3- (C) the Reserve Account, and (D) the Surplus Account; (ii) the Redevelopment Escrow Fund; (iii) the Redevelopment Fund; (iv) the Redemption Fund; and (v) the Rebate Fund. (i) Bona Fide Debt Service Funds. The Principal Account, the Interest Account, and the Redemption Fund will be used primarily to achieve a proper matching of revenues (and certain other monies) and payments of principal and interest with respect to the Obligations within each Obligation year. Amounts deposited in the Principal Account, Interest Account and the Redemption Fund will be depleted at least once a year except for a reasonable carryover amount, if any, which, in the aggregate, will not exceed the greater•of (i) one year's earnings on such funds, or (ii) one -twelfth of the annual debt service with respect to the Obligations. (ii) Reasonably Required Reserve. Amounts held in the Reserve Account will not be greater than the least of (i) maximum annual debt service with respect to the Obligations, (ii) 125% of average annual debt service with respect to the Obligations, or (iii) 10% of the face amount of Obligations (less original issue discount) (the "Reserve Requirement"). The Underwriter has represented that the Reserve Requirement was reasonably required, was a vital factor in marketing the Obligations, facilitated the marketing of ttLe__Obligations at _an interest_ rate comparable_ to that of bonds and other obligations of a similar type and is not in excess of the amount considered necessary for such purpose. (iii) No Other Proggga. Other than the Principal Account, the Interest Account, the Reserve Account, and the Redemption Fund, there are no funds or accounts of the Issuer established pursuant to the Issuance Document or otherwise, that are reasonably expected to be used for the payment of principal and interest with respect to the Obligations or that are pledged as collateral for the Obligations and for which there is a reasonable assurance that amounts on deposit therein will be available for the payment of principal and interest with respect to the 12/15/92 3844Q/2338/015 -4- Obligations if the Issuer encounters financial difficulties. The Issuer does not expect to sell or otherwise dispose of the Project financed by the Obligations prior to the final maturity.date of the Obligations, except such minor parts or portions thereof as may be disposed of due to normal wear, obsolescence or depreciation in the ordinary course of business. (f) Rebate Liability Account. Amounts deposited in the Rebate Fund are to assist the Issuer with compliance of Section 148(f) of the Code. (g) Investment. The proceeds derived from the sale of the Obligations and the amounts on deposit in the aforementioned funds and accounts may be invested as follows: (i) Proceeds of the Obligations held in the Redevelopment Fund, the Redevelopment Escrow Fund, as Accrued Interest in the Interest Account, and in the Rebate Fund, may be invested at an unrestricted yield for a period of three years from the date hereof. (ii) Investment earnings on obligations acquired with the amounts described in Subparagraph (i) may be invested at an unrestricted yield for a period not to exceed the applicable period described in Subparagraph (i) or one year from the date of receipt, whichever period is longer. (iii) Amounts described in Subparagraphs (i) or (ii) above that may not be invested at an unrestricted yield pursuant to such Subparagraph shall be invested either at a yield not in excess of the yield on the Obligations plus 1/8 of one percentage point or in "tax-exempt obligations" as that term is defined in Section IV hereof ("Tar -Exempt Obligations"); provided that an amount equal to or less than $100,000.00 held in the Redevelopment Fund may be invested at an unre.stric.ted yield._ (iv) Amounts held in the Interest Account, Principal Account, and Redemption Fund (other than as described above) may be invested at an unrestricted yield for thirteen months from the date of deposit;,thereafter, such monies shall either be invested at a yield not in excess of the yield on the Obligations or in Tax -Exempt Obligations. (v) Amounts held in Rebate Fund (other than as without regard to yield. the Surplus Account and in the described above) may be invested 12/15/92 3844Q/2338/015 -5- (h) Yield. For purposes of this Section III of this Tax Certificate, yield is calculated as set forth in Section 148 of the Code, Section 1.148-9 of the Treasury Regulations, and Section 1.103-13(c) and (d) of the Treasury Regulations. Thus, yield generally means that discount rate which when used in computing the present value of all unconditionally payable payments representing principal, interest, and the cost of qualified guarantees paid and to be paid with respect to the Obligations produces an amount equal to the issue price of the Obligations. The issue price of the Obligations is $5,770,470.13 which is equal to the initial offering price of the Obligations to the public (excluding bond houses, brokers and similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount (at least 10 percent) of each maturity of the Obligations was or is reasonably expected to be sold, as represented by the Underwriter in Exhibit B. plus Accrued Interest. Yield with respect to the obligations allocable to proceeds of the Obligations, is that discount rate which when used in computing the present worth of the payments of principal and interest with respect to -the obligation produces an amount equal to the purchase price of the obligation. (i) No Blacklisting. The Commissioner of Internal Revenue has not published notice in the Internal Revenue Bulletin that the Issuer is disqualified and may not certify with respect to Section 1.103-13(a)(2) of the Treasury Regulations, nor has the Issuer been advised that such action is contemplated. (j) No Artifice or Device. The Obligations are not and will not be part of a transaction or series of transactions (i) that attempts to circumvent the provisions of Section 148 of the Code, or any successor thereto, and the regulations promulgated thereunder or under any predecessor thereto, enabling the Issuer or any related person to exploit the difference between tax-exempt and taxable interest rates to gain a- material financial -advantage,--- -and ( ii-) - tha-t increases -- the burden on the market for tax-exempt obligations in any manner, including, without limitation, by selling bonds that would not otherwise be sold, or selling more bonds, or issuing bonds sooner, or allowing bonds to remain outstanding longer, than IV. Rebate Compliance. (a) Covenants. The Issuer hereby covenants to comply with the rebate requirements of Section 148(f) of the Code. 12/15/92 3844Q/2338/015 -6- The Issuer acknowledges that the United States Department of the Treasury has issued certain regulations with respect to only certain requirements relating to compliance with Section 148(f) of the Code, and that the United States Department of the Treasury has not yet issued regulations with respect to certain other of these requirements. The Issuer covenants that it will determine precisely what is required with respect to Section 148(f) of the Code and will comply with any requirements applicable to the Obligations. The Issuer acknowledges that, to the extent that an exception to the rebate requirements of Section 148(f) of the Code is not available with respect to the Obligations, under Section 148(f) of the Code, the federal government must be paid the sum of (i) the excess of the amount earned on all "nonpurpose investments" with respect to the Obligations over the amount that would have been earned had such investments been invested at a rate equal to the yield with respect to the Obligations, plus (ii) any income attributable to the excess described in (i) (the "Rebate Requirement"). The Issuer acknowledges that currently, unless an exception to the Rebate Requirement is available, compliance with Section 148(f) of the Code generally involves a multi -step process: (1) ascertaining the funds (the "Gross Proceeds") and investments (the "Nonpurpose Investments") subject to the Rebate Requirement of Section 148(f) of the Code after applying, if applicable, a universal cap with respect to the Obligations (the "Universal Cap"), (2) creating an investment history cash flow report with respect to the investment of Gross Proceeds of the Obligations, (3) determining the yield with respect to the Obligations (the "Yield"), (4) future valuing receipts and payments in the cash flow report (including certain deemed receipts and payments) using the Yield as the discount factor, and (5) determining the amount of rebatable arbitrage with respect to the Obligations and paying the appropriate amount to the United States Treasury. See Treas. Reg. S§ 1.148-0 through 1.148-11, 1.148-12T, 1.148-13T, 1.149(d)-1, 1.150-0 and 1.150-1 for rules with respect to rebate compliance methodology. Be& Subparagraph (b)(i) below for a description of Nonpurpose Investments with respect to the Obligations,___.Stbp_ara.graph_ (bJ(ii)_ below for a _description of Gross Proceeds of the Obligations, Subparagraph (b)(iii) below for the description of a Universal Cap with respect to the -Obligations, Subparagraph (b)(iv) below for a description of Yield with respect to the Obligations for purposes of compliance with Section 148(f) of the Code, and Subparagraph (d) and (e) with respect to allocating Gross Proceeds, recordkeeping, and permitted investment of Gross Proceeds. 12/15/92 3844Q/2338/015 -7- The Issuer also acknowledges that additional or different requirements may be applicable to the Obligations if certain exceptions are satisfied. 5= Paragraph (c) herein. (b) Operative Terms. (i) Nonpurpose Investments. Subject to the limitation in Subparagraph (b)(iii) below, Nonpurpose Investments are generally securities, obligations, annuity contracts or any other investment -type property that are not acquired to carry out the governmental purpose of the Obligations that are allocated to Gross Proceeds. However, Nonpurpose Investments do not include: (A) United States Treasury - State and Local Government Series, Demand Deposit Securities; or (B) tax-exempt obligations. The term "tax-exempt obligations" for the purposes of this Tax Certificate includes only obligations the interest on which is excludable from gross income for federal income tax purposes that do not constitute "specified private activity bonds" for purposes of Section 57(a)(5)(C) of the Code. The term "tax-exempt obligations" does, however, include stock in a "qualified regulated investment company," which is a corporation that (A) is a regulated investment company within the meaning of Section 851(a) of the Code and meets the requirements of Section 852(a) of the Code for the taxable year; (B) has only one class of stock authorized and outstanding; (C) invests all of its assets in tax-exempt obligations (as defined above) to the extent practicable; and (D) has at least 98% of its gross income derived from interest on, or gain from the sale_ ox other disposition _of_, tax-exempt obligations or at least 98% of the weighted.average value of its assets is represented by investments in tax-exempt obligations. (ii), Gross Proceeds.,_ Subject to the limitation in Subparagraph (b)(iii) below, "Gross Proceeds" with respect to the Obligations means: (A) amounts actually or constructively received from the sale (or other disposition) of the Obligations; (B) amounts actually or constructively received from investing amounts described in (A); 12/15/92 3844Q/2338/015 -8- (C) amounts (other than proceeds derived from the sale of the Obligations) that are reasonably expected to be or are in fact used to pay debt service with respect to the Obligations; (D) amounts pledged as security for the payment of debt service with respect to the Obligations or otherwise serving as a reserve fund with respect to the Obligations; (E) "transferred proceeds" of the Obligations; and (F) any "after -arising replacement amounts" with respect to the Obligations, computed in accordance with Section 1.148-11(c) of the Treasury Regulations. (iii) Universal Cap. Except as provided below, in no event shall the value of Nonpurpose Investments allocated to Gross Proceeds of the Obligations exceed the Universal Cap of the Obligations computed in accordance with Section 1.148-4 of the Treasury Regulations. The Universal Cap of the Obligations is equal to the present value of the outstanding Obligations computed in accordance with Section 1.148-3 of the Treasury Regulations, or the principal amount of an Obligation if that obligation was issued with original issue discount or premium not in excess of one-fourth of one percent multiplied by the number of complete years to maturity of the Obligation. The value of.a Nonpurpose Investment on a date allocated to Gross Proceeds of the Obligations for this purpose is equal to the fair market value of such investment on such date (and with respect to fixed rate investments, present value computed in.accordance with Section 1.148-2(b)(2)(iii) of the Treasury Regulations). The Universal Cap value and the value of Nonpurpose_Inve_stments are to be computed as of the second anniversary date of the issue of the Obligations, as of the first day of each Obligation year thereafter, and if the Obligations are a refunding issue, as of each date that, without regard to the Universal Cap, proceeds of any refunded issue become "transferred proceeds" of the Obligations within the meaning of Section 1.148-11 of the Treasury Regulations (a "Cap Computation Date"). Amounts described in Subparagraph (c)(i) are not subject to the Universal Cap. Between Cap Computation Dates, Nonpurpose Investments cease to be allocated to the Obligations to the extent they are expended or otherwise cease to be allocated to the Obligations under Section 1.148-4(b)(1) or (2) of the Treasury Regulations. To the extent Nonpurpose Investments 12/15/92 3844Q/2338/015 -9- cease to be allocated -to the Obligations, other investments become so allocated up to the amount of the unused Universal Cap, computed in accordance with Section 1.148-4 of the Treasury Regulations. If on a Cap Computation Date Nonpurpose Investments have a value in excess of the Universal Cap, an amount of such investments necessary to eliminate that excess ceases to be allocated to the Obligations. Nonpurpose Investments cease to be allocated to the Obligations in the following order, within the meaning of Section 1.148-4 of the Treasury Regulations: �1) first, amounts held in a sinking fund, pledged fund, or reserve or replacement fund for the issue (other than proceeds derived from the sale of the Obligations), (2) second, transferred proceeds, and (3) third, proceeds derived from the sale of the Obligations and earnings thereon, all within the meaning of Section 1.148-4 of the Treasury Regulations. A failure to do a Universal Cap calculation on a Cap Computation Date will not result in noncompliance with Section 148(f) of the Code if, in the absence of that failure, the Obligations would have satisfied the Rebate Requirement. (iv) yield '. "Yield" with respect to the Obligations means that discount rate which when computing the present value of all the unconditionally payable payments of principal and interest to be paid with respect to.the Obligations and all payments for a qualified guarantee with respect to the Obligations (as described in Section 1.148-3 of the Treasury.Regulations), produces an amount equal to -- the is -sue- price of- the Obligati-ons, as set. forth in Treasury Regulation § 1.148-3. (c) Rebate Exception. (1)_ _..B Fide. Daeht S.enY; cP Winds ..._,_._..:Tbe ._Is uer will be relieved of the obligation to pay the Rebate Requirement with respect to amounts earned on funds in the Principal Account, Redemption Fund, and the Interest Account. ( i i ) Expenditure Exceptions. There are two expenditure exceptions from the Rebate Requirement - the "Two -Year Exception" and the "Six -Month Exception." The Issuer will be relieved of the obligation to pay the Rebate Requirement with respect to that portion of the proceeds of 12/15/92 3844Q/2338/015 -10- the Obligations described in Subclause (1)(A) below, if the requirements set forth in Subclause (1)(B) below are satisfied. The Issuer will be relieved of the obligation to pay the Rebate Requirement with respect to the proceeds of the.Obligations described in Subclause (2)(A) below if the requirements of Subclause (2)(B) below are satisfied. (1) Tao -Year Exception. (A) The portion of the "available construction proceeds" (as defined below) of the Obligations at least 75 percent of which are to be used for construction expenditures (including.reconstruction and rehabilitation) with respect to property that is to be owned by a governmental unit or an organization described in Section 501(c)(3) of the Code and exempt from federal income tax under Section 501(a) of the Code is described in this Subclause. The term "available construction proceeds" means an amount equal to the portion of the issue price (as defined in Section III of this Tat Certificate) of the Obligations described in this Subclause, increased by earnings thereon, and increased by the proportionate amount of earnings on the Reserve Account allocable to the portion of the issue described in this subclause earned prior to the earlier of the close of the two-year period described in Subclause (1)(B) or the date construction of the Project is substantially complete. Available construction proceeds do not include amounts to be used to pay Issuance Costs of the Obligations or proceeds derived from the sale of the Obligations in the Reserve Account (other than the earnings thereon described above). The Issuer should note that earnings on the portion of the Reserve Account described above earned other than during the period described in Subclause (1)(B) are subject to the Rebate Requirement. (B) This exception will be treated as being satisfied if at least 10% of the available construction proceeds of the Obligations are expended for the governmental purposes of the Obligations within the six-month period beginning on the date of issue of the Obligations, at least 45% of such amounts are expended for the governmental purposes of the Obligations within the one-year period beginning on the date of issue of the Obligations, at least 75% of such amounts are expended for the governmental purposes of the Obligations within the 18-month period beginning on the date of issue of the Obligations, and all of such amounts are expended for the governmental 12/15/92 3844Q/2338/015 -11- purposes.of the Obligations within the two-year period beginning on the date of issue of the Obligations. The requirement that 100% of the available construction proceeds of the Obligations be expended within two years may be reduced to not below 95% provided that the amount not.expended is held by the Issuer for a period not exceeding one year as a "reasonable retainage" as required or permitted by construction contracts with contractors. (2) Six -Month Exception. The Issuer will be relieved of the obligation to pay the Rebate Requirement with respect to the portion of the proceeds of the Obligations described in Subclause (A) below if the requirements described in Subclause (B) below are satisfied. (A) All Gross Proceeds of the Obligations (other than "transferred proceeds" of the Obligations, amounts held in the Reserve Account, and amounts described in Subparagraph (c)(i) of this Tax Certificate), are described in this Subclause. (B) This exception will be treated as having been satisfied if all Gross Proceeds of the Obligations subject to this exception are expended for the governmental purposes of the Obligations no later than the day that is six months after the date of issue of the Obligations. (iii) Expectations. The Issuer reasonably expects that at least seventy-five percent of the proceeds of the Obligations deposited in the Redevelopment Fund and the Redevelopment Escrow Fund, and earnings thereon, less monies expended on Issuance Costs, are expected to be used for Project construction expenditures. - - (iv) Elections. - (1) Seventy -Five Percent Test. Pursuant to Treasury Regulation § 1.148-6(e)(2)(i), the Issuer expressly elects to satisfy the requirements of S.ec_t.i.on of. the -Co -de based upon its reasonable expectations. (2) Spending Test. Pursuant to Treasury Regulation § 1.148-6(h)(3)(iii), the Issuer expressly does not elect to include in available construction proceeds the amount of earnings that the Issuer reasonably expects as of the date of issue for the entire two-year spending period, in lieu of including actual earnings and expected earnings as of the end of each spending period. 12/15/92 38440/2338/015 -12- (3) Penalty in Lieu of Rebate. Pursuant to Section 148(f)(4)(C)(vii) of the Code, the Issuer may elect, on the date hereof, to pay a penalty (the 01 1/2% Penalty"), with respect to each six-month period after the date the Obligations are issued, equal to 1.1/2 percent of the amount of available construction proceeds (as described above), which as of the close of the six-month period are not spent as required by Paragraph (c)(ii)(B). The 1 1/2% Penalty shall cease to apply: (A) if the available construction proceeds are expended, (B) if a special three percent penalty (the "3% Penalty") is paid in accordance with Section 148(f)(4)(C) of the Code, or (C) after the latest maturity date of any Obligation (including any refunding bond). All penalties are to be paid to the United States not later than 90 days after the period to which the penalty relates. The Issuer expressly does not elect to pay the penalty described in Section 148(f)(4)(C)(vii) of the Code in lieu of the Rebate Requirement described in Section 148(f)(2) of the Code, the 3% Penalty described in Section 148(f)(4)(C)(viii) of the Code, or to terminate the 1 1/2% Penalty pursuant to Section 148(f)(4)(C)(ix) of the Code. Additionally, the Issuer expressly does not elect to exclude earnings on any reasonably required reserve fund as available construction proceeds pursuant to Section 148(f)(4)(C)(vi)(IV) of the Code. (4) Bifurcation. The Issuer expressly does not elect to treat the issue of Obligations as separate bond issues for purposes of Section 148(f)(4) of the Code. (d) Recordkeepina and Allocation of Gross Proceeds. The Issuer shall maintain or cause to be maintained detailed records with respect to each security, obligation, annuity contract, or -any other investment -type --property allocated to -- Gross Proceeds, including: (i) purchase date, (ii) purchase price, (iii) information establishing fair market value on the date such investment is allocated to Gross Proceeds, (iv) any accrued interest paid, (v) face amount, (vi) coupon rate, (vii) periodicity of interest payments (viii) disposition price, (ix) any accrued interest received, and (x) disposition date. Such detailed recordkeeping is required to facilitate the calculation of the Rebate Requirement. The Issuer shall establish separate sub -accounts or take other accounting measures in order to account fully for all Gross Proceeds. The Issuer may use any reasonable, consistently applied accounting method to account for Gross Proceeds in accordance with Treasury Regulation § 1.148-4. An accounting method is 12/15/92 3844Q/2338/015 -13- consistently applied if such method accounts uniformly for (i) Gross Proceeds commingled with other monies in excess of $25,000.00 and such other comingled monies and (ii) Gross Proceeds for each fiscal year or interim fiscal period therein during which the issue is outstanding. Another accounting method may, however, be utilized for monies if it is for a bona fide purpose unrelated to federal income tax restrictions. For purposes of allocating Gross Proceeds to capital expenditures intended to be financed pursuant to this Tax Certificate after the date of issue of the applicable tax-exempt obligation, and paid to unrelated third parties ("Qualified Capital Expenditures"), the Issuer may use the following accounting methods: "specific tracing," "gross -proceeds -spent -first," "first -in, first -out," or a ratable allocation method. The Issuer covenants to consult with Bond Counsel with respect to the applicable method of allocation of Gross Proceeds to expenditures that are not Qualified Capital Expenditures. If Gross Proceeds are comingled with other monies (other than in an open-end regulated investment company) in an amount in excess of $25,000 (a "Comingled Fund"), the following additional requirements must be satisfied. First, all payments and receipts with respect to investments in the Comingled Fund must be allocated among the different monies ratably based upon either (i) average daily balances during a "Computation Period" (as defined below) or (ii) the average of the beginning and ending balances of the amounts in the Comingled Fund for a Computation Period that does not exceed one month. A Comingled Fund may use as its Computation Period any consistent time period within its fiscal year that does not exceed three months. Not less frequently than at the end of each Computation Period, the Comingled Fund must compute and allocate to different types of monies all payments, receipts, income, gain or losses realized, and expenditures. Second, except as provided below, the Comingled Fund must treat all of its investments as if sold at fair market value on the last day o€-- the- fiscal -year and -as of the -last -day of--each-Computation Period, and so allocate net gains or losses from such deemed sales (the "Mark -to -Market Requirement"). A Comingled Fund need not satisfy the Mark -to -Market Requirement if (i) the weighted average maturity of all investments held by the Comingled Fund .d.u.,ringa, _f iscal year _does not exceed one year and such investments consist exclusively of debt obligations, or (ii) the Comingled Fund serves as a common reserve fund or sinking fund for two or more issues. Common reserve funds or sinking funds for two or more issues, however, must be ratably allocated (not less frequently than once every five years and on each date a new issue is added) in accordance with (i) the outstanding principal amounts (present value, with respect to obligations with premium or original issue discount in an amount that is more than one-fourth of one percent multiplied 12/15/92 3844Q/2338/015 -14- by the number of complete years to maturity of the issue) of the issues as of the allocation date, (ii) the aggregate amount of debt service payable on the issues during the ensuing one-year period, or (iii) the present value of the issues as of the allocation date. (e) Prohibited Investments and Dispositions. The Issuer acknowledges that compliance with Section 148(f) of the Code may involve taking no action to artificially reduce the Rebate Requirement by the manner of investing Gross Proceeds. The Issuer covenants that absent an opinion of Bond Counsel that the exclusion from gross income of interest with respect to the Obligations will not be adversely affected, it will comply with the rules of this Subsection to assure compliance with Section 148(f) of the Code. (i) Except to the extent imputed receipts would not arise under Section 1.148-5 of the.Treasury Regulations, no Nonpurpose Investment may be acquired with Gross Proceeds for an amount in excess of the fair market value of such Nonpurpose Investment. No Nonpurpose Investment may be sold or otherwise disposed of for an amount less than the fair market value of the Nonpurpose Investment. (ii) The fair market value of any Nonpurpose Investment is the price which a willing buyer would pay to a willing seller to acquire the Nonpurpose Investment, with no amounts, to artificially reduce or increase the yield on the Nonpurpose Investment. The purchase or sales price of a Nonpurpose Investment is not adjusted (except as provided below) to take into account any administrative costs of the Nonpurpose Investment, and a,brokerage commission for an investment contract is included as a receipt with respect to the investment contract. Certain administrative costs may be taken into account in computing the Rebate Requirement with respect to investments in a regulated investment company and certain commingled funds. Sg&- Treas. Reg. § 1.148-4. The following provisions provide guidelines as to when the Nonpurpose Investment will be deemed to be acquired for its fair market value. Other methods may be used, however, to establish fair market v a_ l.u,e ._ _ (iii) Nonpurpose Investments that are investment contracts will be considered acquired and disposed of for an amount equal to the fair market value of such obligations if one of the following four Subsections is satisfied: 12/15/92 3844Q/2338/015 -15- (A) (1) a bona fide solicitation is made for the Nonpurpose Investment with specified material terms and at least three bids on the Nonpurpose Investment are received from different reasonably competitive providers of the Nonpurpose Investment other than those with a material financial interest in the Obligations (e.9., the underwriters); (2) the yield on the Nonpurpose Investment is at least equal to the yield offered under the highest bid received from a noninterested party (or the Issuer has significant bona fide non -tax reasons, such as creditworthiness of the bidder, for failure to purchase the highest yielding investment); (3) the yield on the Nonpurpose Investment is not less than the yield then currently available from the provider or reasonably comparable investments offered to other persons, if any, from a source of funds other than Gross Proceeds of tax-exempt obligations; (4) the price of the Nonpurpose Investment takes into account as a significant factor the Issuer's reasonably expected draw -down schedule, exclusive of float funds and reasonably required reserve funds; (5) the collateral security requirements for the Nonpurpose Investment are reasonable; and .(6)- the obligor of the Nonpurpose _ Inves_tment certi-fies the administrative costs that are reasonably expected to be paid to third parties in connection with the Nonpurpose Investment; or (B) the investment contract has a remaining term to maturity that is not in excess of six months; or (C) the investment contract is traded on an established securities market; or (D) the investment contract has a yield more than .25 percent below the yield with respect to the Obligations. 12/15/92 3844Q/2338/015 -16- (iv) Nonpurpose Investments that are certificates of deposit with a fixed interest rate, a fixed principal payment schedule, a fixed maturity, and a substantial penalty for early withdrawal, will be considered acquired for their fair market value if the following requirements are satisfied: (A) the yield on the certificate of deposit is not less than the yield on reasonably comparable direct obligations of the United States; and (B) either (1) or (2) below is satisfied. (1) the yield on the certificate of deposit is not less than the highest yield that is published or posted by the provider to be currently available from the provider on comparable certificates of deposit offered to the public; or (2) (X) the Issuer makes a bona fide solicitation for a specified certificate of deposit and receives at least three qualifying bids from providers that have no material financial interest in the Obligations, (Y) the Issuer purchases the highest yielding certificate of deposit for which a qualifying bid is made, and (Z) the yield on the certificate of deposit, is not less than the yield then currently available from the provider on comparable certificates of deposit offered to other persons from a source of funds other than Gross Proceeds of an issue of tax-exempt bonds. (v) Additionally, the fair market value of any - Nonpurpose Investment for which there is an established - market shall be determined as provided in this Subclause (v). Any market especially established to provide Nonpurpose Investments to an issuer of governmental obligations shall not be treated as an established market. (A) If a Nonpurpose Investment is acquired pursuant to an arm's length transaction without regard to any amount paid to reduce the yield on the Nonpurpose Investment, the fair market value of the Nonpurpose Investment shall be the amount paid for the Nonpurpose Investment (without an increase for transaction costs except as provided infra). 12/15/92 3844Q/2338/015 -17- (B) If a Nonpurpose Investment is sold or otherwise disposed of in an arm's length transaction without regard to any reduction in the disposition price to reduce the amount due under Section 148(f) of the Code, the fair market value of the Nonpurpose Investment shall be the amount realized from the sale or other disposition of the Nonpurpose Investment (without reduction for transaction costs except as provided infra). (C) If a United States Treasury obligation is acquired directly from or disposed of directly to the United States Treasury (as in the case of State and Local Government Series ("SLGS") obligations), such acquisition or disposition shall be treated as establishing a market for the obligation and as establishing the fair market value of the obligation. (D) Alternatively, the fair market value of any Nonpurpose Investment for which there is an established market may be set at the mean of the bid and offered prices on an established market where such Nonpurpose Investment is traded on the date a binding contract to acquire such Nonpurpose Investment is entered into, or, if there are no bid and offered prices on such date, on the first day preceding such date for which there are bid and offered prices. Such mean price may be determined by reference to any appropriate publication, such as, for example, "Composite Closing Quotations for United States Government Securities" published by the Federal Reserve Bank of New York. Where the price of any Nonpurpose Investment is quoted on an established market in terms of yield, the fair market value shall be the amount necessary to produce such yield. (E) The fair market value of Nonpurpose Investments may also be established by the borrowing practices of the issuer of such Nonpurpose Investments, as, for example, by determining the fair.,.. amarke.t_, value -based oan.. t.h,.e interest ordinarily paid by such issuer to persons other than governmental units with respect to Nonpurpose Investments of comparable maturities. The market price of a time or demand deposit shall be determined under the preceding sentence by taking into account the yield that would be paid by the obligor if the deposit were held as an interest bearing deposit for the expected period of the deposit. 12/15/92 3844Q/2338/015 -18- (F) The market price of a certificate of deposit issued by a commercial bank may be determined as provided in (iv) above, or may be set at the bona fide bid price quoted by a dealer who maintains an active secondary market in such certificate of deposit. (vi) Except to the extent the requirements of Paragraph (c) are met, any Nonpurpose Investment for which there is no established market shall be considered acquired for an amount in excess of the fair market value of the Nonpurpose Investment. V. Miscellaneous. (a) Federal Guarantee. The Issuer will not invest any of the proceeds of the Obligations in a manner which would result in the Obligations being considered "federally guaranteed" within the meaning of Section 149(b) of the Code, except as permitted therein will not cause interest with respect to the Obligations to be included in gross income for federal income tax purposes). (b) No Poolina. The Issuer does not expect to use and will not use the proceeds of the Obligations, to make or finance loans to two or more ultimate borrowers. • * s (a) Reliance. The expectations of the Issuer concerning certain uses.of Obligation proceeds and certain other moneys described herein and other matters are based in whole or in part upon -representations of other parties -as set forth in this Tax Certificate or the exhibits attached hereto. The Issuer is not aware of any facts or circumstances that would cause it to question the accuracy or reasonableness of any representations made in this Tax Certificate or exhibits attached hereto. (b) authority. The undersigned is an authorized representative of the Issuer, and is acting for and on behalf -- of the Issuer in executing this Tax Certificate. To the best of the knowledge and belief of the undersigned, there are no other facts, estimates or circumstances that would materially change the expectations as set forth herein, and said expectations are reasonable. 12/15/92 3844Q/2338/015 -19- (c) Amendment. Notwithstanding any provision of this Tax Certificate, the Issuer may amend this Tax Certificate and thereby alter any actions allowed or required by this Tax Certificate if such amendment is based on an opinion of bond Counsel that the exclusion from gross income of interest with respect to the Obligations and any refinanced obligations will not be adversely affected. Dated: December 16, 1992 La Quinta Redevelopment Agency By. . Treasure of the La Quinta Redevelopment Agency E=rr A CITY OF LA 4UINTA REDEVELOPMENT AGENCY • LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2 TAX ALLOCATION BONDS, ISSUE OF 1992 $5,845,000 FINANCING COMPONENTS The Agency Intends to use Proceeds for public improvements, facilities and appurtenances benefiting the Project Area including but not limited to some or all of the following: Project Description TDC Project: Storm channel improvements; regional well site; on and off site water system, sewer system; street and highway improvements; traffic signals; perimeter landscaping and undergrounding of power, telephone and cable system for utilities; site improvements — paving, curbs, lighting, landscaping. Avenue 52 Extension (Street Improvement) Washington Street/Whitewater Bridge Widening A^Iams Street Extension to Highway 111 JAvenue 47 .shington Street Improvement (Whitewater/Simon) Park Street Widening Jefferson Street Rehabilitation Waring Street Median Installation and Landscaping Widening Westward Ho/Adams Dry River Crossing Improvements Phase V Improvements (Sagebrush) Phase V Improvements (Westward Ho .Area) TOTAL Estimated Project Costs $ 3,750,000 s•98x 714 474 8773 12-15-92 01:53PM P002 #29 EXHIBIT B CERTIFICATE OF THE UNDERWRITER Westhoff -Martin and Associates (the "Underwriter") have acted as the Underwriter of the $5,845,000 La Quinta. Redevelopment Project Area No. 2 Tax Allocation Bonds, Issue of 1992 (the "Obligations"), and hereby certify and represent the following, based upon the information available to them: A. Issue Price. 1. As of the date the purchase agreement was entered into by the Issuer, and the Underwriter with respect to the Obligations (the "Sale Date"), the Underwriter reasonably expected to sell each maturity of the Obligations to the general public (excluding bond houses, brokers, or similar persons acting in the capacity of underwriters or wholesalers) in a bona fide public offering at the prices listed on Schedule A. 2. In our opinion, and based upon our estimate as of the date hereof, the issue prices of the Obligations set forth in Schedule A are within a reasonable range of, and should reflect, the fair market prices for such Obligations. 3. As of the date of execution of the attached Tax Certificate, all of the Obligations have actually been offered to the general public at the prices listed in Schedule A. 4. At least 10% of each maturity of the Obligations have been sold at the prices referred to in Schedule A. B. Reserve Account. - The funding of -the Reserve Account in $510,065.00 is reasonably required, was a marketing the Obligations, facilitated the Obligations at an interest rate comparable other obligations of a similar type and is amount _.ne.cess,axy...f oz_s.uzh_p.ux4aas.e_.._. 3844Q/2338/015 an -amount -equal to vital factor in marketing of the to that of bonds and not in excess of the All terms not defined herein have the meanings ascribed to those terms in the attached Tax Certificate. Dated: December 16, 1992 Westhoff -Martin and Associates By: 38440/2338/015 C-2 SCHEDULE A Price of Obligations Offered or Reasonably Expected To Be Offered To The General Public In A Bona Fide Public Offering Maturity Date Principal. Interest (December 1) Amount Rate Price 1993 $ 35,000 3.75% 100.000% 1994 80,000 4.50 100.000 1995 105,000 5.00 100.000 1996 120,000 5.40 99.645 1997 .125,000 5.65 99.570 1998 140,000 5.90 99.501 1999 140,000 6.10 99.438 2000 155,000 6.30 99.380 2001 160,000 6.50 99.327 2002 175,000 6.60 99.277 2003 180400 6.70 99.231 2004 200,000 6.80 99.190 2005 210,000 6.90 99.152 2017 4,0201000 7.00 98.000 3844Q/2338/015 LX 1`il MFS LA QUINTA FINANCING AUTHORITY ARBITRAGE REBATE COMPUTATION $89515,000.00 LOCAL AGENCY REVENUE BONDS SERIES 1991 (CITY HALL PROJECT) JUNE 1994 MUNI FINANCIAL SERVICES, INC. ORANGE COUNTY: CORPORATE OFFICE: NORTHERN REGION: 150 El Camino Real, Suite 120 28765 Single Oak Dr., 2nd Fl. 3727 Buchanan, Suite 202 Tustin, CA 92680 Temecula, CA 92590-3661 San Francisco, CA 94123-1779 Tel: (714) 665-2220 Tel: (909) 699-3990 Tel: (415) 441-3550 Fax: (714) 665-2230 Fax: (909) 699-3460 Fax: (415) 441-1401 x_ ....__.MFS Muni Financial Services. Inc. l' )RP )RATI OI fICL _'ti (ii tiillt;l�• C);I{: I)m1'. �ull�' _'l)1) I��'tllt_'Cllla, 1..� �)?i�Hl-,ih01 June 27, 1994 Ms. Geniene D. Croft Accounting Technician City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 RE: Arbitrage Rebate Computation Dear Ms. Croft: Enclosed are the Arbitrage Rebate Computations for the Local Agency Revenue Bonds, Series 1991 (City Hall Project) issued by the La Quinta Financing Authority. The issue has no rebate liability for the period beginning December 5, 1991 and ending December 1, 1993. The amount applies only to this computation period and does not represent the amount which may be due as of the first installment computation date of September 30, 1996. We will provide computations for the third bond year after September 30, 1994, as required by the Trust Indenture. In the meantime, if you have questions regarding these computations, or any other concerns, please call Karolyn Cline or me at (800) 755-MUNI. Very truly yours, MUNI FINANCIAL SERVICES, INC. A �a4 Gay Eichhoff, Director Arbitrage Rebate Services CC: Mary Bator Enclosure RALAQUINTAVI REV\ARBIT. DOC ('E.\IECUL- ORANGE COUNTI' SAN DIEGO SAN FRANCISCO LNS VEGAS SEAnIE fr. -7.MFS TABLE OF CONTENTS I. APPROACH.................................................................................................1 A. Bond Yield.........................................................................................1 B. Computation......................................................................................1 C. Installment Payments........................................................................1 D. Two -Year Expenditure Analysis........................................................ 2 E. Frequency of Computation................................................................ 2 II. SUMMARY OF COMPUTATIONS...............................................................3 A. Pertinent Dates.................................................................................. B. Yield.......................................................................... ..................... 3 C. Sources and Uses of Funds.............................................................. 4 D. Management of Funds.......................................................................4 E. Rebate Liability..................................................................................5 F. Yield Comparison.............................................................................. 5 G. Notes..............................................................................................5 III. OVERVIEW OF REGULATIONS.................................................................6 A. Background....................................................................................... 6 B. Rebate Requirement......................................................................... 7 C. Investment Yield Restriction..............................................................8 1. Exceptions to Yield Restriction ............................................... 8 2. Expiration of the Temporary Period ........................................ 9 D. Amendments..................................................................................... 9 E. Final Regulations..............................................................................11 IV. EXHIBITS Semi -Annual Debt Service Schedule...................................................... A BondYield Computation......................................................................... B Construction........................................................................................... C Reserve.................................................................................................. D Bond (Capitalized Interest)..................................................................... E I. APPROACH A. Bond Yield Computation of arbitrage rebate liability begins with the calculation of bond yield. Bond yield is the rate at which the sum of the present value of all bond payments (principal, interest, and qualified guarantee) is equal to the issue price of the bonds. For purposes of computing bond yield, the issue price is adjusted for accrued interest, original issue discounts or premiums, and credit enhancements. Muni Financial Services, Inc. (MFS) calculates the bond yield to verify the entry made on the "Information Return for Tax -Exempt Governmental Bond Issues," IRS form 8038-G, which the IRS uses to record tax-exempt issues. B. Computation After computing the bond yield, we then prepare a cash flow worksheet for each fund, tracking bond proceeds from date of receipt through the computation date. This cash flow must show the deposit of all net bond sale proceeds, any withdrawals or transfers, the cost of all investments of proceeds, and the earnings on those investments. The bond yield rate is then used to compute a future value from date of issue to date of computation for each deposit and withdrawal of proceeds throughout the computation period. The future value of all deposits are subtracted from the*future value of all withdrawals. This number, together with all investment earnings to date, equals the arbitrage rebate liability for the computation period. C. Installment Payments The issuer must pay rebate installments to the federal government every five years, and make a final rebate payment after the final maturity of the bonds. Rebate installments must equal ninety -percent (90%) of the total rebate liability due from date of issue through date of computation, and must be paid no later than 60 days after the installment computation date which is the last day of the fifth bond year. The issuer must pay one hundred -percent (100%) of the final rebate within 60 days of the final maturity of the bonds. Each rebate installment and final rebate will be rounded down to the nearest multiple of $100. In addition, the IRS provides for a $3,000 computation date credit on each installment computation date for issues with a term of more than one year. This credit will be applied at the end of each fifth bond year, when applicable. Currently, there is no provision for recovering over -payments. This provides additional incentive for rebate payments to be made no more often than every five years. IRS form 8038-T must be used when filing all rebate payments. MFS will provide copies and assist in completing this form. D. Two -Year Expenditure Analysis For those construction issues expecting to spend all gross proceeds within two years, an expenditure analysis will be performed at each six- month interval, to determine if the required expenditure of available construction proceeds (including interest earnings) has been met. Where the issuer has elected to pay a penalty, in lieu of rebate, rebate computations will not be required during this two-year period. Instead, a penalty of 1.5% will be applied against the amount by which the required expenditures fall short. The IRS provides for a $300 computation date credit for each penalty payment. E. Frequency of Computation The computations are based on regulations which are temporary and incomplete, therefore, rebate liability may have to be adjusted as future amendments and interpretations become available. Although rebate payments are required only once every five years, it is recommended that computations be performed annually to establish potential liability (or non -liability) in anticipation of the fifth year payments. Auditors may wish to include the liability in the financial statements; some bond documents may require the rebate amount to be set aside annually as well. 2 MFS II. SUMMARY OF COMPUTATIONS MFS was retained by the City of La Quinta to determine arbitrage rebate liability for the Local Agency Revenue Bonds, Series 1991 (City Hall Project) issued by the La Quinta Financing Authority. The computations have been based on the documents provided by the City of La Quinta and monthly statements of activity from Bank of America. MFS has not, however, audited these statements which were used to prepare the cash flow worksheets. Errors or discrepancies in the cash flow data may cause substantial fluctuations in the rebate computations. The computations are mathematically accurate and were performed in accordance with applicable laws and regulations as discussed in Section III of this Report. A. B. Pertinent Dates 1. The dated date of the Bonds is December 1, 1991. 2. The delivery date of the Bonds .bond year runs from December 5, on September 30, 1992. is December 5, 1991. The first 1991 through close of business 3. The computation period for this Report begins December 5, 1991 and runs through December 1, 1993. 4. The first installment computation date is September 30, 1996, the end of the fifth bond year. Ninety -percent (90%) of rebate liability is due on each installment computation date. Therefore, the first rebate installment (if any) will be required to be paid to the federal government no later than November 29, 1996. 5. The final computation date is October 1, 2018, the final maturity of the Bonds: unless the Bonds are fully paid prior to that date, in which case the final computation date is that date on which the Bonds are fully paid. One hundred -percent (100%) of rebate liability is due no later than 60 days after this date. Yield The bond yield is 6.71294670% (Exhibit B). Computations of yield are based on a year of 360 days comprised of twelve 30-day months with interest compounding semi-annually. 3 NIFS C. Sources and Uses of Funds 1. According to the Tax Certificate, proceeds of the Bonds were deposited into the following Funds\Accounts: Construction, Reserve, and Bond (Capitalized Interest). 2. Sale proceeds of the Bonds equal $8, 315, 926.21 computed as follows: Sources: Principal of Bonds $ 8,515,000.00 Accrued Interest 6,092.81 Original Issue Discount (43,603.15) Underwriter's Discount (61,563.45) MB IA Insurance (100, 000.00) Total $ 8,315,926.21 3. Sale proceeds of the Bonds were distributed into the following Funds\Accounts: Uses: Construction $ 6,598,510.56 1 Reserve 704, 717.50 ' Bond (Capitalized Interest) 1,012,698.15 j Total $ 8,315,926.21 4. The Bond Fund constitutes the bona fide debt service fund. These funds are generally excluded from the rebate requirement. Capitalized Interest deposited into the Bond Fund is subject to arbitrage rebate, therefore it has been included in the computations. D. Management of Funds Bank of America has been appointed Trustee. 4 _ E. Rebate Liability The total rebate liability computed is negative. This amount applies only to the computation period and does not represent the amount which may be computed as of the first installment computation date. The rebate liability computed for each Fund\Account is summarized below: Liability: Construction $ (185,280.82) Reserve (55,103.43) Bond (Capitalized Interest) (44,031.17) Total $ (284,415.42) F. Yield Comparison 10.00% �a•:•10 8.00% 7.00% " leld 6.71 % 6.00% 5.00% 4.00% 3.00% ' 2.00% 3.46% 3.OS'/� 3.28% 1.00% 0.00% Construction Reserve Bond (Capitalized Interest) Fund\Account G. Notes As required by the Trust Indenture, MFS will provide annual updates of rebate liability. 9 III. OVERVIEW OF REGULATIONS A. Background The Tax Reform Act of 1969 prohibited municipalities from issuing tax- exempt obligations unless earnings on the investment of bond proceeds were restricted to a yield, not to exceed the yield on the bonds. Since 1969, the Treasury Department has issued various sets of temporary and proposed regulations regarding arbitrage yield restriction requirements. Analysis of these restrictions continues, even today. Requirement of arbitrage rebate, too, is an evolutionary process. The following is a brief chronological history of the various acts and regulations posing restrictions on arbitrage earnings: • In 1980, the Mortgage Subsidy Bond Tax Act (the "Ullman Act") imposed arbitrage requirements for mortgage subsidy bonds. • The Tax Reform Act. of 1984 required issuers of Industrial Development Bonds (IDB) to rebate arbitrage profits to the federal government. The "-15AT Regulations," implementing the IDB rebate requirements, are contained in section 1.103-15AT of the Internal Revenue Code. • The Tax Reform Act of 1986 (TRA 86) extends the rebate requirement, in section 148 of the Code, to nearly all tax-exempt obligations. • Minor modifications to the arbitrage provisions of TRA 86 were made by the Technical and Miscellaneous Revenue Act of 1988 ('TAMRA"). • On May 12, 1989, the Treasury Department released the first set of temporary and proposed regulations. the Initial Regulations. • The regulations proved to be complex and the rebate exceptions were modified again by the Omnibus Budget Reconciliation Act of 1989 implementing three major changes to the rebate requirement. These changes are discussed in Section B below. C,I ;f'---MFS B.� Rebate Requirement _ Section 148(f) of the Internal Revenue Code of 1986 requires issuers of state and local tax-exempt bonds to rebate to the federal government all earnings from the investment of bond proceeds in excess of the bond yield. The rebate requirement applies to governmental bonds issued on or after September 1, 1986. There are, however, several exceptions to this requirement. Rebate liability may be waived if any of the following exceptions are true: 1 Under the small issuer exception rebate is not required if the issuer has general taxing powers and issues less than $5 million of tax exempt bonds per calendar year. 2. The bona fide debt service fund exception does not require rebate on earnings of a fund used primarily to achieve a proper matching of revenues and debt service within each bond year. In general, investment earnings on this fund are not subject to rebate if the amount does not exceed $100,000 in any given bond year. 3. Under the six month expenditure exception rebate is not required if bond proceeds are expended within six months from date of issuance. This exemption is rarely applicable, however, because the reserve fund cannot be expended within six months. Consequently, the Revenue Reconciliation Act of 1989 amends this rule, for bonds issued after December 19, 1989, such that rebate is not required if all bond proceeds, except for the reserve fund, are spent within six months, and the rebate requirement on the reserve fund is satisfied following the six month period. This exception has been extended to a two year expenditure exception for certain construction bonds issued after December 19, 1989. To qualify for the two year exception period, 75% of the net proceeds must be used for construction purposes on government -owned property. The expenditure of these proceeds must follow a prescribed time table, with all proceeds spent at the end of 24 months, except for a "reasonable retainage" of up to 5%, which must be spent within the following twelve months. Additionally, the rebate requirement on any "reasonably required reserve fund" must be satisfied following this two year period. 7 r MF�S 4. The penalty election exception does not require rebate on construction bonds if the issuer elects to pay a penalty in lieu of rebate, in case the two year spend -out schedule for the construction bonds is not met. The penalty amount is equal to 1.5% of the difference between actual expenditures and the prescribed spend -out schedule at each six month interval. This exception applies only to bonds issued after December 19, 1989. Interest earnings must be included in the spend -out schedule. The issuer may elect, however, to exclude interest earnings on a reasonably required reserve fund. In this case, earnings on the reserve fund are subject to the rebate requirement. This election must be made prior to delivery of the bonds. C. Investment Yield Restriction The Investment Yield Restriction limits the taxable yield on investment earnings. If investment earnings on bond proceeds exceed the bond yield, interest paid to bondholders could become taxable retroactive to the date of issue. There are three exceptions to Investment Yield Restriction: 1. Exceptions to Yield Restriction a. The temporary period exception allows the issuer to earn higher yields on investments for a period up to three years on construction or acquisition funds. b. The reserve fund exception allows higher yields on investment earnings for a "reasonably required reserve fund on a continual basis for the term of the issue. C. The minor portion exception allows higher yields on investment earnings if the amount does not exceed the lesser of 5% of the total bond proceeds or $100,000. The rebate requirement does not eliminate the need to restrict investment earnings on construction fund balances remaining at the end of the temporary period. 8 2. Expiration of the Temporary Period If construction fund balances of more than $100,000 or 5% of proceeds (whichever is less), remain at the end of three years, the earnings of these funds must be restricted to a yield less than the yield on the bonds. If yield restriction becomes necessary, there are several compliance alternatives available: a. Continue to invest the remaining funds so that the composite yield of all invested funds does not exceed the yield on the bond issue, at any point in time. b. Invest any remaining funds in State and Local Government Series (SLGS). These are non -marketable securities available to state and local governments for proceeds of tax- exempt bond issues subject to yield restriction. C. Invest all remaining proceeds in other "qualified" tax-exempt investments. With this option the funds may earn a yield on the tax-exempt investments that exceeds the yield on the bond issue. d. Request the Internal Revenue Service to extend the three year temporary period. This request is complex and should be pursued only with the assistance of bond counsel. There are advantages and disadvantages to each of the above options. Careful consideration must be taken for each individual case. D. Amendments Additional amendments to the rebate regulations were implemented on April 25, 1991. Highlights from these amendments follow: 1. Rebate Installments - Each installment payment will equal no more than 90% of the total rebate liability from date of issue to the installment computation date. 2. Status of Refunding Issue - a refunding issue may comply with the arbitrage rebate requirement even if the refunded issue did not comply. 9 3. Earnings on Final Payments - imputed interest earned between the final computation date and the final rebate payment need not be rebated to the federal government as long as the final rebate is paid within 60-days of the final computation date. 4. Computation Date Credit - As long as 75% of net sale proceeds has been spent, the regulations permit a single $3,000 credit for all bonds, every five years. 5. Compounding Intervals - An issuer may choose any compounding interval of not more than one year for purposes of computing yield. Compounding intervals used to compute the yield on an issue, however, m- be the same as the compounding interval used to compute the yield on an investment. 6. Bond Yield Recalculation - Several modifications have been made minimizing the need for recalculation of yield on fixed rate and yield -to -call bonds. 7. Expenditure of Bond Proceeds - Bond proceeds are treated as spent on the date a check is written if the check is reasonably expected to be delivered or mailed no later than three business days after that date. 8. Safe Harbor Rules - No investment earnings are imputed on certain uninvested amounts in an account for a period of not more than three consecutive business days, not to exceed twenty days for any bond year. Additionally, no investment earnings are imputed on uninvested amounts in an account during a bond year where the average uninvested balance is no more than $20,000. 9. Bond Year - An issuer may choose any ending date for a bond year as long as that date is within one year of the date of issue of the bonds. 10. Issue Price - Issuers are no longer permitted to reduce the bond yield by taking into account "concessions", or discounts for sales to institutional investors. 11. "Artifice or Device Rule" - The arbitrage "artifice or device" anti - abuse rules for yield restriction rules are now applicable to the rebate rules as well. 10 MFS 12. Restriction on Advance Refunding Escrows - Investment in certain tax-exempt securities are prohibited in advance refunding escrows. These recent amendments are the first in a series of amendments to be released. Future amendments are expected to include the following subjects: the two-year exception to rebate requirement, transferred proceeds rules for refunding issues, and general allocation and accounting rules for the purpose of arbitrage rebate, including commingled investments. We will keep you informed of all new rules and regulations affecting arbitrage rebate and yield restriction requirements. E. Final Regulations - The 1989 Temporary Regulations were adopted in their final form and effective generally for bonds issued after June 17, 1992. The 1992 Final Regulations however, expired on June 30, 1993, and the 1993 Revised Regulations became effective July 1, 1993. SEMI-ANNUAL DEBT SERVICE SCHEDULE LA QUINTA FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS SERIES 1991 (CITY HALL PROJECT) Dated Date 01-Dec-91 Delivery Date 05-Dec-91 First Maturity 01-Oct-94 Last Maturity 01-Oct-18 First Coupon 01-Apr-92 Accrued Interest Total Interest Total Principal Total Debt Service EXHIBIT A 6,092.81 10,039,270.42 $8, 515, 000.00 18, 554, 270.42 INTEREST :: T©TAL ANNUAL HATE PRINCIPAL RATE' INTEREST 01S 01S 01-Apr-92 $0.00 $182, 784.17 $182, 784.17 $0.00 01-Oct-92 0.00 274,176.25 274,176.25 456, 960.42 01-Apr-93 0.00 274,176.25 274,176.25 0.00 01-Oct-93 0.00 274,176.25 274,176.25 548, 352.50 01-Apr-94 0.00 274,176.25 274,176.25 0.00 01-Oct-94 155,000.00 5.00% 274,176.25 429,176.25 703,352.50 01-Apr-95 0.00 270,301.25 270,301.25 0.00 01-Oct-95 160,000.00 5.25% 270,301.25 430,301.25 700,602.50 01-Apr-96 0.00 266,101.25 266,101.25 0.00 01-Oct-96 170,000.00 5.45% ' 266,101.25 436,101.25 702,202.50 01-Apr-97 0.00 261,468.75 261,468.75 0.00 01-Oct-97 180,000.00 5.50% 261,468.75 441,468.75 702,937.50 01-Apr-98 0.00 256, 518.75 256, 518.75 0.00 01-Oct-98 190,000.00 5.70% 256,518.75 446,518.75 703,037.50 01-Apr-99 0.00 251,103.75 251,103.75 0.00 01-Oct-99 200,000.00 5.80% 251,103.75 451,103.75 702,207.50 01-Apr-00 0.00 245, 303.75 245, 303.75 0.00 01-Oct-00 210, 000.00 5.90% 245, 303.75 455, 303.75 700, 607.50 01-Apr-01 0.00 239,108.75 239,108.75 0.00 01-Oct-01 225,000.00 6.00% 239,108.75 464,108.75 703,217.50 01-Apr-02 0.00 232, 358.75 232, 358.75 0.00 01-Oct-02 240,000.00 6.10% 232,358.75 472,358.75 704,717.50 01-Apr-03 0.00 225,038.75 225,038.75 0.00 01-Oct-03 250,000.00 6.20% 225,038.75 475,038.75 700,077.50 01-Apr-04 0.00 217,288.75 217,288.75 0.00 01-Oct-04 265,000.00 6.65% 217,288.75 482,288.75 699,577.50 01-Apr-05 0.00 208,477.50 208,477.50 0.00 01-Oct-05 285,000.00 6.65% 208,477.50 493,477.50 701,955.00 01-Apr-06 0.00 199,001.25 199,001.25 0.00 01-Oct-06 305,000.00 6.65% 199,001.25 504,001.25 703,002.50 01-Apr-07 0.00 188,860.00 188.860.00 0.00 01-Oct-07 325,000.00 6.65% 188,860.00 513,860.00 702,720.00 01-A r-08 0.00 1 1 178,053.75 f 178.053.75 1 0.00 INTEREST TOTAL ANNUAL DATE PRINCIPAL RATE INTEREST D\S D1S 01-Oct-08 345,000.00 6.65% 178,053.75 523,053.75 701,107.50 01-Apr-09 0.00 166, 582.50 166, 582.50 0.00 01-Oct-09 370,000.00 6.65% - 166, 582.50 536, 582.50 703,165.00 01-Apr-10 0.00 154,280.00 154,280.00 0.00 01-Oct-10 395,000.00 6.65% 154,280.00 549,280.00 703,560.00 01-Apr-11 0.00 141,146.25 141,146.2.5 0.00 01-Oct-11 420,000.00 6.65% 141,.146.25 561,146.25 702,292.50 01-Apr-12 0.00 127,181.25 127,181.25 0.00 01-Oct-12 445,000.00 6.65% 127,181.25 572,181.25 699,362.50 01-Apr-13 0.00 112,385.00 112,385.00 0.00 01-Oct-13 475,000.00 6.65% 112,385.00 587,385.00 699,770.00 01-Apr-14 0.00 96,591.25 96,591.25 0.00 01-Oct-14 510,000.00 6.65% 96,591.25 606,591.25 703,182.50 01-Apr-15 0.00 79,633.75 79,633.75 0.00 01-Oct-15 540,000.00 6.65% 79,633.75 619,633.75 699,267.50 01-Apr-16 0.00 611678.75 61,678.75 0.00 01-Oct-16 580,000.00 6.65% 61,678.75 641,678.75 703,357.50 01-Apr-17 0.00 42,393.75 42,393.75 0.00 01-Oct-17 615, 000.00 6.65% 42, 393.75 657, 393.75 699, 787.50 01-Apr-18 0.00 21,945.00 21,945.00 0.00 01-Oct-18 660, 000. 00 1 6.65% 21, 945.00 1 681, 945.00 1 703,89 00 MFS BOND YIELD CALCULATION WORKSHEET EXHIBIT B LA QUINTA FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS • SERIES 1991 (CITY HALL PROJECT) Dated Date 01-Dec-91 Total Interest 10,039,270.42 Delivery Date 05-Dec-91 Total Principal $8,515,000.00 First Coupon 01-Apr-92 Total Debt Service 18,554,270.42 Last Maturity 01-Oct-18 Accrued Interest 6,092.81 Compound Freq Semi -Annual Original Issue Discount 43,603.15 Original Issue Premium 0.00 Credit Enhancement 100,000.00 Purchase Price $8,377,489.66 Bond Yield (30/360) 6.71294670% TOTAL PRESENT DATE PAYMENTS PRINCIPAL INTEREST DEBT SERVICE VALUE 01-Apr-92 INTEREST $0.00 $182,784.17 $182,784.17 $178,936.42 01-Oct-92 INTEREST 0.00 274,176.25 274,176.25 259,688.26 01-Apr-93 INTEREST 0.00 274,176.25 274,176.25 251,254.95 01-Oct-93 INTEREST 0.00 274,176.25 274,176.25 243,095.51 01-Apr-94 INTEREST 0.00 274,176.25 274,176.25 235,201.05 01-Oct-94 PRINC & INT 155,000.00 274,176.25 429,176.25 356,211.08 01-Apr-95 INTEREST 0.00 270,301.25 270,301.25 217,061.16 01-Oct-95 PRINC & INT 160,000.00 270,301.25 430,301.25 334,325.11 01-Apr-96 INTEREST 0.00 266,101.25 266,101.25 200,034.83 01-Oct-96 PRINC & INT 170,000.00 266,101.25 436,101.25 317,181.87 01-Apr-97 INTEREST 0.00 261,468.75 261,468.75 183,993.77 01-Oct-97 PRINC & INT 180,000.00 261,468.75 441,468.75 300,569.99 01-Apr-98 INTEREST 0.00 256,518.75 256,518.75 168,976.80 01-Oct-98 PRINC & INT 190,000.00 256,518.75 446,518.75 284,583.68 01-Apr-99 INTEREST 0.00 251,103.75 251,103.75 154,840.94 01-Oct-99 PRINC & INT 200, 000.00 251,103.75 451,103.75 269,135.73 01-Apr-00 INTEREST 0.00 245,303.75 245,303.75 141,599.41 01-Oct-00 PRINC & INT 210,000.00 245,303.75 455,303.75 254,285.03 01-Apr-01 INTEREST 0.00 239,108.75 239.103.75 129,204.41 01-Oct-01 PRINC & INT 225,000.00 239,108.75 464,108.75 242,640.87 01-Apr-02 INTEREST 0.00 232, 358.75 232, 358.75 117, 534.55 01-Oct-02 PRINC & INT 240,000.00 232,358.75 472,358.75 231,174.96 01-Apr-03 INTEREST 0.00 225,038.75 225,038.75 106,558.59 01-Oct-03 PRINC & INT 250,000.00 225,038.75 475,038.75 2.17,631.88 01-Apr-04 INTEREST 0.00 217,288.75 217,288.75 96,314.80 01-Oct-04 PRINC & INT 265,000.00 217,288.75 482,288.75 206,835.57 01-Apr-05 INTEREST 0.00 208,477.50 208,477.50 86,504.68 01-Oct-05 PRINC & INT 285,000.00 208,477.50 493,477,50 I 198,111.69 01-A r-06 INTEREST 0.00 199.001.25 199 001.25 77.296.68 TOTAL PRESENT DATE PAYMENTS PRINCIPAL INTEREST DEBT SERVICE VALUE 01-Oct-06 PRINC & INT 305,000.00 199,001.25 504,001.25 189,408.29 01-Apr-07 INTEREST 0.00 188,860.00 188,860.00 68,670.42 01-Oct-07 PRINC & INT 325, 000.00 188, 860.00 513, 860.00 180, 774.36 01-Apr-08 INTEREST 0.00 178,053.75 178,053.75 60,604.58 01-Oct-08 PRINC & INT 345,000.00 178,053.75 523,053.75 172,251.48 01-Apr-09 INTEREST 0.00 166,582.50 166,582.50 53,077.24 01-Oct-09 PRINC & INT 370, 000.00 166, 582.50 536, 582.50 165, 416.10 01-Apr-10 INTEREST 0.00 154,280.00 154,280.00 46,016.46 01-Oct-10 PRINC & INT 395,000.00 154,280.00 549,280.00 158,511.11 01-Apr-11 INTEREST 0.00 141,146.25 141,146.25 39,409.20 01-Oct-11 PRINC & INT 420,000.00 141,146.25 561,146.25 151,588.63 01-Apr-12 INTEREST 0.00 127,181.25 127,181.25 33,241.14 01-Oct-12 PRINC & INT 445,000.00 127,181.25 572,181.25 144,693.43 01-Apr-13 INTEREST 0.00 112,385.00 112,385.00 27,497.03 01-Oct-13 PRINC & INT 475,000.00 112,385.00 587,385.00 139,047.34 01-Apr-14 INTEREST 0.00 96,591.25 96,591.25 22,122.79 01-Oct-14 PRINC & INT 510,000.00 96,591.25 606,591.25 134,418.98 01-Apr-15 INTEREST 0.00 79,633.75 79,633.75 17,073.55 01-Oct-15 PRINC & INT 540,000.00 79,633.75 619,633.75 128,535.82 01-Apr-16 INTEREST 0.00 61,678.75 61,678.75 12,379.04 01-Oct-16 PRINC & INT 580,000.00 61,678.75 641,678.75 124,603.83 01-Apr-17 INTEREST 0.00 42,393.75 42,393.75 7,964.86 01-Oct-17 PRINC & INT 615,000.00 42,393.75 657,393.75 119,498.91 01-Apr-18 INTEREST 0.00 21,945.00 21,945.00 3,859.55 01-Oct-18 I PRINC & INT 1 660,000.00 1 21,945.00 1 681.945.00 1 116,041.24 �T}TMFS -T 1l't`L, I REBATABLE ARBITRAGE REPORT LA QUINTA FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS SERIES 1991 (CITY HALL PROJECT) Issue Date 05-Dec-91 Investment Yield Computation Date 01-Dec-93 Compound Frequency Semi -Annual Bond Yield (30/360) Fund 1 Account Construction EXHIBIT C 3.46490909% 6.71294670% FUTURE VALUE TRANSACTION TRANSACTION FUND TRANSACTIONS DATE TYPE AMOUNT BALANCE AT BOND YIELD % 05-Dec-91 PROCEEDS $6,598,510.56 $6,598,510.56 ($7,524,506.64) 05-Dec-91 EXPENSE (31,725.12) 6,566,785.44 36,177.24 06-Dec-91 EXPENSE (41,511.17) 6,525,274.27 47,327.92 03-Jan-92 INTEREST 20,242.69 6,545,516.96 04-Feb-92 INTEREST 21,912.44 6,567,429.40 03-Mar-92 INTEREST 19,850.46 6,587,279.86 04-Mar-92 EXPENSE (1,794,998.69) 4,792,281.17 2,013,757.00 02-Apr-92 INTEREST 16,157.89 4,808,439.06 04-May-92 INTEREST 14,542.13 4,822,981.19 11-May-92 EXPENSE (484,415.98) 4,338,565.21 536,814.93 02-Jun-92 INTEREST 13,659.50 4,352,224.71 02-Jul-92 INTEREST 12,597.06 4,364,821.77 04-Aug-92 INTEREST 11,726.73 4,376,548.50 18-Aug-92 EXPENSE (1,612,313.24) 2,764,235.26 1,755,210.16 02-Sep-92 INTEREST 9,613.69 2,773,848.95 02-Oct-92 INTEREST 6,553.01 2,780,401.96 03-Nov-92 INTEREST 6,576.48 2,786,978.44 02-Dec-92 INTEREST 6,303.24 2,793,281.68 12-Dec-92 EXPENSE (679,129.00) 2,114,152.68 724,021.48 05-Jan-93 INTEREST 5,769.83 2,119,922.51 02-Feb-93 INTEREST 4,924.19 2,124,846.70 02-Mar-93 INTEREST 4,380.69 2,129,227.39 25-Mar-93 EXPENSE (1,554,942.00) 574,285.39 1,626,705.84 02-Apr-93 INTEREST 4,219.57 578,504.96 04-May-93 INTEREST 1,263.35 579,768.31 02-Jun-93 INTEREST 1,281.87 581,050.18 21-Jun-93 EXPENSE (579,768.00) 1,282.18 597,033.70 02-Jul-93 INTEREST 872.22 2,154.40 03-Aug-93 INTEREST 4.49 2,158.89 02-Sep-93 INTEREST 4.79 2,153..68 --i-MFS FUTURE VALUE TRANSACTION TRANSACTION FUND TRANSACTIONS DATE TYPE AMOUNT BALANCE AT BOND YIELD % 04-Oct-93 INTEREST 4.60 2,168.28 02-Nov-93 INTEREST 4.68 2,172.96 0 1 - D e c - 107 3 INTEREST 4.59 2,177.55 01 -Dec-93 ENDING BALANCE (2,177.55)1 0.00 1 2,177.55 REBATABLE ARBITRAGE . .. . ... .... - ($185,280.82) TOTAL EARNINGS $182,470.19 MFS REBATABLE ARBITRAGE REPORT LA QUINTA FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS SERIES 1991 (CITY HALL PROJECT) Issue Date 05-Dec-91 Investment Yield Computation Date 01-Dec-93 Compound Frequency Semi -Annual Bond Yield (30/360) Fund 1 Account . Reserve EXHIBIT D 3-3a277%o 671294670% .: FIXTURE VALUE .....TRANSACTION TRANSACTION _. FUND TRANSACTIONS DATE TYPE AMOUNT BALANCE. AT BOND YIELD % 05-Dec-91 PROCEEDS $704,717.50 $704,717.50 ($803,613.40) 03-Jan-92 INTEREST 2,184.57 706,902.07 04-Feb-92 INTEREST 2,366.50 709,268.57 03-Mar-92 INTEREST 2,143.81 711,412.38 02-Apr-92 INTEREST 2,287.82 713,700.20 04-May-92 INTEREST 2,158.46 715,858.66 02-Jun-92 INTEREST 2,168.93 718,027.59 02-Jul-92 INTEREST 2,078.27 720,105.86 04-Aug-92 INTEREST 1,934.67 722,040.53 02-Sep-92 INTEREST 1,873.61 723,914.14 02-Oct-92 INTEREST 1,710.30 725,624.44 03-Nov-92 INTEREST 1,716.32 727,340.76 02-Dec-92 INTEREST 1,645.01 728,985.77 05-Jan-93 INTEREST 1,723.80 730,709.57 02-Feb-93 INTEREST 1,697.41 732,406.98 02-Mar-93 INTEREST 1,509.97 733,916.95 02-Apr-93 INTEREST 1,700.97 735,617.92 04-May-93 INTEREST 1,607.55 737,225.47 02-Jun-93 INTEREST 1,630.01 738,855.48 02-Jul-93 INTEREST 1,589.04 740,444.52 03-Aug-93 INTEREST 1,648.42 742,092.94 02-Sep-93 INTEREST 1,648.58 743,741.52 04-Oct-93 INTEREST 1,581.70 745,323.22 02-Nov-93 INTEREST 1,607.96 746,931.18 01-Dec-93 INTEREST 1,578.79 748,509.97 01-Dec-93 ENDING BALANCE (748,509.97)1 0.00 1 748,509.97 REBATABLE ARBITRAGE ($551103.43) TOTAL EARNINGS $43792.47 REBATABLE ARBITRAGE REPORT LA QUINTA FINANCING AUTHORITY LOCAL AGENCY REVENUE BONDS SERIES 1991 (CITY HALL PROJECT) Issue Date 05-Dec-91 Investment Yield Computation Date 01-Dec-93 Compound Frequency Semi -Annual Bond Yield (30/360) Fund 1 Account Bond (Capitalized Interest) EXHIBIT E 3.28755028% 6.71294670% womom FUTURE VALUE TRANSACTION TRANSACTION FUND TRANSACTIONS DATE TYPE AMOUNT' BALANCE AT BOND YIELD % 05-Dec-91 PROCEEDS $1,012,698.15 $1,012,698.15 ($1,154,814.24) 03-Jan-92 INTEREST 3,139.28 1,015,837.43 04-Feb-92 INTEREST 3,400.72 1,019,238.15 03-Mar-92 INTEREST 3,080.71 1,022,318.86 31-Mar-92 DEBT SERV (182,784.16) 839,534.70 204,047.29 02-Apr-92 INTEREST 3,287.65 842,822.35 04-May-92 INTEREST 2,548.84 845,371.19 02-Jun-92 INTEREST 2,561.33 847,932.52 02-Jul-92 INTEREST 2,454.27 850,386.79 04-Aug-92 INTEREST 2,284.69 852,671.48 02-Sep-92 INTEREST 2,212.58 854,884.06 02-Oct-92 INTEREST 2.019.73 856,903.79 01-Oct-92 DEBT SERV (274,176.25) 582,727.54 296,131.38 03-Nov-92 INTEREST 1,400.89 584,128.43 02-Dec-92 INTEREST 1,321.10 585,449.53 05-Jan-93 INTEREST 1,384.39 586,833.92 02-Feb-93 INTEREST 1,363.19 588,197.11 02-Mar-93 INTEREST 1,212.66 589,409.77 01-Apr-93 DEBT SERV (274,176.25) 315,233.52 286,514.59 02-Apr-93 INTEREST 1,366.05 316,599.57 04-May-93 INTEREST 712.79 317,312.36 02-Jun-93 INTEREST 701.57 318,013.93 02-Jul-93 INTEREST 683.94 318,697.87 03-Aug-93 INTEREST 709.50 319,407.37 02-Sep-93 INTEREST 709.57 320,116.94 01-Oct-93 + DEBT SERV (274,176.25) 45,940.69 277,210.11 04-Oct-93 INTEREST 680.79 46,621.48 02-Nov-93 INTEREST 159.36 46,780.84 01-Dec-93 INTEREST 98.87 46,879.71 01-Dec-93 I ENDING BALANCE (46,879.71) 0.00 46,879.71 REBATABLE ARBITRAGE ($44$031.17) TOTAL EARNINGS $39 494.47 SUMMARY OF IWVESTMENT DATA FOR THE POOLED MONEY INVESTMENT ACCOUNT A COMPARISON OF JANUARY 1995 WITH JANUARY 1994 (Dollars in JANUARY 1995 Thousands) JANUARY 1994 CHANGE AVERAGE DAILY PORTFOLIO TOTAL $26,552,151 $25,713,177 $+ 838,974 TOTAL EARNINGS ON ACCRUAL BASIS $ 126,567 $ 95,195 $+ 31,372 EFFECTIVE YIELD 5.612 4.359 + 1.253 AVERAGE LIFE OF PORTFOLIO ON THE LAST DAY OF THE MONTH (IN DAYS) 374 322 + 52 SECURITY TRANSACTIONS $251,751,939 $19,735,662 $+ 61016,277 TIME DEPOSITS $ 246,285 $ 27,380 $+ 218,905 AVERAGE WORIKDAY INVESTMENT ACTIVITY $ 11299,911 $ 988,152 $+ 311,759 NUMBER OF SECURITY TRANSACTIONS 550 491 + 59 NUMBER OF TIME DEPOSITS 13 22 - 9 AVERAGE PRESCRIBED DEMAND COMPENSATING BANK BALANCES. FOR SERVICES $ 161,218 $ 320,846 $- 159,628 AVERAGE PRESCRIBED DEMAND BANK BALANCES FOR UNCOLLECTED FUNDS $_ 457,771 $ 203,545 $+ 254,226 NY 1lY�Y�t 1 • x � ��� JANUARY ,1„ 995 BEQINNING BALANCE DEPOSITS WITHDRAWALS MONTH END BALANCE $81777,430,899.48 $1.1239,235,649.40 $18119,982,127.55 $8,896,684,421.33 *Local Agency Investment Fund Invested Through Pooled Money Investment Account MATT FONG treasurer of toe ,$torte of C�ilifamin February 17, 1995 Dear Local Agency Investment Fund Participants: RECEIVED FINANCE DEFT Governor Wilson asked me to lead a Task Force on Local and State Investment Practices. The Task Force has prepared preliminary recommendations and findings. Enclosed is a copy for your review. I look forward to working with you in the future. enclosure Sincerely, J Matt Fong State Treast 915 CAPITOL MALL • SACRAMENTO. CALIFORNIA 95814 • (916) 653-2995 MATT FONG Treasurer of t4P *tatz of C�clifurmn TASK FORCE �L LOCAL AND STATE INVESTMENT PRACTICES California State Treasurer Matt Fong, Chairman Preliminary Recommendations and Findings February 1, 1995 915 CAPITOL MALL SACRAMENTO. CALIFORNIA 95814 - (916) 653-2995 TASK FORCE ON LOCAL AND STATE INVESTMENT PRACTICES Preliminary Recommendations and Findings February 1, 1995 Introduction At the request of Governor Pete Wilson, California State Treasurer Matt Fong has assembled an eleven -member Task Force on Local and State Investment Practices. The Task Force is chaired by Treasurer Fong and includes an equal number of financial and investment experts from the public and private sectors. The members of the Task Force are identified in Appendix A. The Task Force was requested by Governor Wilson to report recommendations and findings for possible investment guidelines to be considered by the California Legislature as a result of the losses incurred by the Orange County investment pool. The Task Force has not only examined the Orange County situation, but has also examined the investment practices of other California counties, the State's Pooled Money Investment Account, many California cities and other California local agencies. The Task Force held hearings at which expert testimony was received on state and local investment practices and has reviewed pertinent facts and applicable law and deliberated investment and disclosure issues. California has 58 counties, 470 cities, 1,002 school districts, and more than 3,500 other local agencies. Each of these public entities has varying purposes and needs. These public entities invest surplus funds, bond proceeds, pension funds and other monies. Amounts that need to be invested can range from a few thousand dollars for a small single purpose local agency to billions of dollars for large entities. The Task Force's recommendations attempt to recognize these vast differences. The Task Force's primary objective is to ensure that investment practices at all levels of government in California are consistently dedicated to the preservation of the security of the invested taxpayer funds and the maintenance of adequate liquidity. Only after these two priorities are met should consideration be given to the yields on investments. The Task Force has reached a consensus on four preliminary recommendations to Governor Pete Wilson and the Legislature. These recommendations are preliminary and are based upon the Task Force's work to date. Treasurer Fong intends to widely circulate this preliminary report and asks that written comments be directed to his office: 915 Capitol Mall, Room 110, Sacramento, California 95814, fax (916) 653-3125. TASK FORCE ON LOCAL AND STATE INVESTMENT PRACTICES Preliminary Recommepdations February 1, 1995 Recommendation 1: Amend state law to require each local treasurer or chief Fiscal officer to provide annually a written statement of investment policy to the legislative body of the local agency for its consideration at a public meeting, and to submit a report no less frequently than quarterly to the legislative body and the chief executive officer containing a detailed description of the local agency's investment securities, including current market values. Require the State's cash management and investment pool to make such reports to the Pooled Money Investment Board. The quarterly reports would be required (i) to be submitted to the legislative body within 30 days of the quarter's end, (ii) to contain a statement with respect to compliance with the written annual statement of investment policy, and (iii) to be made available to taxpayers upon request for a nominal charge. Recommendation 2: Amend state law to restrict the use of leverage in local and state investment portfolios by limiting reverse repurchase agreements used to, buy securities to no more than 20% of a portfolio. Recommendation 3: Refrain from making other changes in state law concerning permitted state and local investments until after a review of the forthcoming State Auditor's report on Orange County and reports from federal and state law enforcement agencies. Recommendation 4: Ask statewide associations representing local agency financial managers and elected officials to work with the California Debt Advisory Commission to develop enhanced continuing education programs for state and local officials who have direct or supervisory responsibility for investments. -2- Ana1yS1 Recommendation 1 Amend state law to require each local treasurer or chief fiscal officer to provide annually a written statement of investment policy to the legislative body of the local agency for its consideration at a public meeting, and to submit a report no less frequently than quarterly to the legislative body and the chief executive off cer containing a detailed description of the local agency's investment securities, including current market values. Require the State's cash management and investment pool to make such reports to the Pooled Money Investment Board. The quarterly reports would be required (i) to be submitted to the legislative body within 30 days of the quarter's end, (ii) to contain a statement withrespect to compliance with the written annual statement of investment policy, and (iii) to be made available to taxpayers upon request for a nominal charge. Find* (a) Neither the State nor any local agency is required by state law to have a written statement of investment policy, let alone have it reviewed annually, or to file periodic reports more frequently than annually. For example, the Orange County Board of Supervisors received a report containing market values of the Orange County pool's investments only once a year. (b) Annual reporting is too infrequent in today's fast-moving financial markets. (c) Only regular reporting concerning market values of securities is likely to provide sufficiently timely information for adequate protection of invested taxpayer funds. (d) Market value information should be required for all investment securities, not just those with a remaining maturity of more than 12 months. Many risky investments can have short maturities. (e) At a minimum, quarterly reporting of market values should be required of all invested public funds, whether invested by the state, a local agency voluntary pool, or a local agency only investing its own funds. (f) More frequent reporting of market values may be preferable to quarterly reporting, but the Task Force is concerned that mandating reports more frequently than quarterly may be burdensome and costly. (g) Market valuation information for most securities should be able to be obtained inexpensively from custodial banks holding those securities. (h) By requiring that each local agency must have a written annual statement of investment policy, the State is not mandating specific -3- investment objectives, practices and procedures; the State is simply requiring that each local agency address those issues itself by adopting a written annual statement of investment policy. (i) Requiring a written annual statement of investment policy and quarterly reports containing market value information is a reasonable approach to creating balance and oversight to limit a single person's power and control over investment strategy. Discussion of Recommendation 1: If Orange County had been required to disclose promptly the declines in the market values of its securities, the county supervisors, investors in the Orange County pool and taxpayers would have learned months earlier than they did that the county's investment strategy was flawed and that losses were building up. No corrective action was taken until losses were publicly disclosed in December, 1994. The former Orange County Treasurer filed reports with the county supervisors just once a year. Taxpayers, investors and perhaps even county supervisors cannot be expected to understand and evaluate complex investment strategies, but everyone understands losses. Thus, losses should be disclosed and disclosed promptly. Legislation adopted ten years ago (after San Jose suffered big investment losses) required treasurers to report monthly to local officials about their investments. This law contained a "sunset clause" and expired in 1991. If this law had been in effect in 1994, the former Orange County Treasurer would have been required to publicly disclose the market losses that were building up as interest rates rose in 1994. Prompt public disclosure leads to corrective action in time to save taxpayers money. In making Recommendation 1, the Task Force recognizes that the local agency costs of state -mandated programs can be recovered from the State. Costs for the prior legislation, which required monthly reports, were approximately $5.5 million for the initial set-up year, and approximately $2.5 million per year thereafter. By mandating quarterly (rather than monthly) reports, and taking into account the ready availability of market valuation information for most securities from custodial banks without significant additional charges, costs should not significantly exceed costs under the prior legislation and seem warranted to provide reasonable oversight over the investment of taxpayer funds. The Task Force believes that the legislative body of each local agency needs to consider whether or not it needs a local agency oversight committee to evaluate the required written annual statement of investment policy and quarterly reports. In making that determination, the legislative body needs to determine whether or not it contains enough financial and investment expertise itself to be able to properly evaluate the written annual statement of investment policy and the quarterly reports. The Task Force recognizes that some legislative bodies do have the necessary expertise, while others do not. Further, the size of the local agency and the amount of funds invested by the local agency can vary widely from agency to agency. Thus, the Task Force believes that it is not appropriate to require a state -mandated oversight committee for each local agency. -4- The issue of whether to have an oversight committee appears best addressed by each local agency. The Task Force considered whether market valuation should be reported for all investment securities or only those investment securities with remaining maturities of more than 12 months. While securities with remaining maturities of less than 12 months have historically been viewed to entail less risk, particularly if held to maturity, the Task Force believes that the marketplace has developed complex derivatives, structured securities and other instruments which can have significant risks and still have maturities of less than 12 months. The Task Force requirement that the quarterly reports be submitted to the local agency legislative body within 30 days of the quarter's end is to ensure that the reporting occurs on a regular and timely basis. Requiring a statement of compliance with the agency's statement of investment policy forces each local agency to make a regular and ongoing determination that ongoing investment practices are or are not in conformity with the agency's written investment policy. A statement of nonconformity is obviously a wake- up call for the local agency. Making the reports available to taxpayers for a nominal charge will improve accountability of local agency officials to taxpayers, thereby providing additional oversight over investment practices of local agencies. This additional oversight should help prevent future occurrences similar to Orange County. -5- Recommendation 2: Amend state law to restrict the use of leverage in local and state investment portfolios by limiting reverse repurchase agreements used to buy securities to no more than 209o' of a portfolio. Fin in (a) Excessive leverage in the Orange County investment pool had been created by successive repeated use of reverse repurchase agreements. (b) Recommendation 2 places reasonable limitations on the use of reverse repurchase agreements without unduly restricting the flexibility necessary for liquidity and legitimate investment purposes. (c) Consideration should be given to amending state law to: (i) Prohibit securities purchased with the proceeds of a reverse repurchase from being used as collateral for another reverse repurchase while the original reverse repurchase is outstanding; (ii) Limit the maturity of each reverse repurchase agreement to the maturity of any securities purchased with the proceeds of the reverse repurchase (but in any event not more than one year permitted under current law); and (iii) Limit reverse repurchase agreements to unencumbered securities already held in the portfolio. Discussion of Recommendation 2: Current state law allows investments in reverse repurchase agreements if approved by the legislative body of the local agency. There are legitimate and useful reasons for using reverse repurchase agreements. Nonetheless, the Task Force members seem to agree that one of the overriding limitations in state law should be reasonable limitations on the use of reverse repurchase agreements. In a reverse repurchase agreement, the state or local agency sells an investment security to a dealer and agrees to buy it back at an agreed upon price; the transaction is similar to a loan. The cash proceeds of the reverse repurchase agreement are then used to purchase a second investment security. The Task Force's Recommendation 2 focuses on eliminating speculation resulting from excessive leverage. The 20% limitation permits the legitimate use of reverse repurchase agreements to seek a modest improvement in yield without subjecting the public to high -risk gambling. Q:M Recommendation 3: Refrain from making other changes in state law concerning permitted state and local investments until after a review of the forthcoming State Auditor's report on Orange County and reports from federal and state law enforcement agencies. Findings: (a) Federal, state and local investigations are underway in Orange County. (b) It seems prudent to learn what the investigators have to say before the Task Force recommends changes in state law other than improved disclosure and restrictions on leverage. Discussion of Recommendation In light of Orange County's bankruptcy and the magnitude of its losses, it is tempting to react prematurely with restrictive legislation without a full assessment of all of the circumstances surrounding • Orange County's bankruptcy and losses. Existing laws governing state and local investment instruments have been developed over many years with input from public and private sector experts. Federal, state and local officials have cautioned against confusing investment strategy with investment instruments and point out that Orange County's losses stemmed from a flawed investment trs ategy and lack of common sense. It would be inappropriate to penalize the State and all other local governments for Orange County's losses and that is exactly what we would do if we narrowed the list of permitted state and local investments. The marketplace is continually developing new financial and investment instruments, whether it be derivatives such as inverse floaters or other products. It should be up to local officials to develop prudent investment policies and make specific investments pursuant to those policies subject, of course, to the overriding limitations in state law. This Task Force believes that limiting particular investment instruments beyond Recommendation 2 would be a premature reaction to the Orange County situation at this time. Common sense cannot be legislated. MIC Recommendation 4: Ask statewide associations. representing local agency financial managers and elected officials to work with the California Debt Advisory Commission to develop enhanced continuing education programs for state and local officials. who have direct or supervisory responsibility for investments. Fin in (a) Enhanced continuing education programs are essential for keeping public officials responsible for investment decisions abreast with developments in the financial and investment markets. (b) The California Debt Advisory Commission can provide support to statewide associations in developing enhancements to ongoing continuing education programs. Discussion of Recommendation 4: There should be renewed efforts to reach a wide range of public officials with affordable and accessible continuing educations programs on investment practices. Organizations such as the California Association of County Treasurers and Tax Collectors, California Municipal Treasurers Association, California State Association of Counties, and League of California Cities can and should lead such efforts and the State can provide support through the California Debt Advisory Commission. Methods for encouraging attendance by public officials should be developed. The Task Force recognizes a link between the fourth and first recommendations -- tying continuing education to the ability to produce an appropriate written annual statement of investment policy. Through various local agency associations, guidance can be made available to all California local agencies with respect to model statements of investment policy. Each policy can, of course, be modified to the objectives and needs of each particular local agency. By having model investment policies available for review by local agencies, the Task Force hopes that guidelines and benchmarks can develop over time concerning numerous investment matters, including (without limitation) oversight committees, coverage margins, minimum liquidity ratios or requirements, frequency and methods of reporting changes in market value (monthly, quarterly, fiscal year to date, etc.), ability to meet future expenditures (whether measured quarterly or annually), average weighted maturities, sensitivity to interest rates, fund accounting, procedures for purchases and sales of securities, percentage of transactions with any one broker/dealer, acknowledgement by broker/dealers of their understanding of the agency's investment policy, and other matters as may be developed over time as new financial investment vehicles are brought to the marketplace. -8- TASK FORCE ON LOCAL AND STATE INVESTMENT PRACTICES Appendix A Chairman: Matt Fong California State Treasurer Sacramento, California Public Sector Members: Alfred P. Balderrama Monterey Park City Councilmember and Former Mayor Monterey Park, California Lambertus H. ("Bert") Becker Acting Chief Financial Officer Metropolitan Water District of Southern California Los Angeles, California John L. de Russy Finance Director/City Treasurer City of San Mateo San Mateo, California Russell S. Gould California Director of Finance Sacramento, California George W. Jeffries Chief Investment Officer Los Angeles County Treasurer's Office Los Angeles, California A-1 Private Sector Members: Douglas L. Charchenko Chairman California Public Securities Association San Francisco, California Thomas Kenny Senior Vice President Franklin/Templeton Group of Funds San Mateo, California Francis X. Lilly President Bear Stearns Fiduciary Services, Inc. Washington, D.C. Robert T. Slaymaker President BA Securities, Inc. San Francisco, California Norwin Wong Chief Financial Officer Portfolio Advisory Services, Inc. Los Angeles, California A-2 STATE OF CALIFORNIA STATE TREASURER'S OFFICE POOLED MONEY INVESTMENT BOARD REPORT DECEMBER 1994 Table of Contents SUMMARY........................................................................................................1 SELECTED INVESTMENT DATA.................................................................2 POOLED MONEY INVESTMENT BOARD DESIGNATION .......................3 DEMANDBANK DEPOSITS...........................................................................6 TIMEDEPOSITS..............................................................................................7 INVESTMENT TRANSACTIONS...................................................................9 SUMMARY OF INVESTMENT DATA FOR THE POOLED MONEY INVESTMENT ACCOUNT A COMPARISON OF DECEMBER 1994 WITH DECEMBER 1993 (Dollars in Thousands) December 1994 December 1993 AVERAGE DAILY PORTFOLIO TOTAL $25,861,120 TOTAL EARNINGS ON ACCRUAL BASIS $ 121,422 EFFECTIVE YIELD 5.528 AVERAGE LIFE OF PORTFOLIO ON THE LAST DAY OF THE MONTH (IN DAYS) 412 SECURITY TRANSACTIONS $24,635,023 TIME DEPOSITS $ 12,000 AVERAGE WORKDAY INVESTMENT ACTIVITY $ 11173,668 NUMBER OF SECURITY TRANSACTION 444 NUMBER OF TIME DEPOSITS 4 AVERAGE PRESCRIBED DEMAND COMPENSATING BANK BALANCES FOR SERVICES $ 166,902 AVERAGE PRESCRIBED DEMAND BANK BALANCES FOR UNCOLLECTED FUNDS $ 290,779 $25,154,826 $ 93,663 4.384 351 $17,902,640 $ 4,095 $ 778,554 421 4 $ 271,742 308,212 CHANGE + $ 706,294 + $ 27,759 + 1.144 + 61 + $ 61732,383 + $ 7,905 + $ 395,114 + 23 0 - $ 104,840 - $ 17,433 -1- KATHLEEN BROWN STATE TREASURER STATE OF CALIFORNIA INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED Tyne of Security December 31 Amount 1994 Change in Percent From Percent Previous Month Governments Bills Bonds 21728,799 10.32 Notes 0 0 - .81 Strips. 61656,458 25.18 0 1'1526,795 5.78 - .18 Total Governments 10,9120052 - .04 41.28 - 1.03 Federal Agency Coupons Certificates of Deposit 11215j,810 4.60 - Bankers Acceptances* 6,209.484 23.49 .04 - 3.08 Repurchases 797,907 3.02 - 1.31 250 000 Federal Agency Discount Notes 213,590 Time .94 + .94 Deposits .81 0 GNMA,Fs 269,190 1.02 Commercial Paper 11 295 .04 0 0 FHLMC 51816,978 22'.00 + 2.29 Other 47,234 .18 Corporate Bonds 0 0 0 0 Pooled Loans 11974,618 7.47 Reversed Repurchases 1,91 .72 .66 + 1,473 - ,597 - 5.57 .30 Total, All Types 26,4351052 - 2.59 100 INVESTMENT ACTIVITY Pooled Money Other Time Deposits TOTALS PMIA Monthly Average Effective Yield December 1994 November 1994 Number Amount Number Amount 444 $ 24,635,023 10 $ 142,275 4 $ 12, 000 4_ $ 24.789,298 5.528 276 $ 12,220,610 11 $ 351280 17 $ 177,000 324 $ 12,432,890 5.380 YTD Yield for Last Day of Month 5.177 -2- 5.108 DESIGNATION BY POOLED MONEY INVESTMENT BOARD OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS No. 1508 FAM-10 (Rev. 5-91) In accordance with Sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its meeting on December 14, 1994, has determined and designated the amount of money available for deposit and investment under said sections. In accordance with Sections 16480.1 and 16480.2 of the Government Code, it is the intent that the money available for deposit or investment be deposited in bank accounts and savings and loan associations or invested in securities in such a manner so as to realize the maximum return consistent with safe and prudent treasury management, and the Board does hereby designate the amount of money available for deposit in bank accounts, savings and Loan associ- ations, and for investment in securities and the type of such deposits and investments as follows: 1. In accordance with law, for deposit in demand bank accounts as Compensating Balance for Services $179,296,000 The active noninterest-bearing bank accounts designation constitutes a calendar -month average balance. For purposes of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall -below the above amount provided that the balances computed by dividing the sum of daily balances of that calendar month by the number of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection periods or in anticipation of large impending warrant' presentations to the Treasury, but the balances are to be maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management. 2. In accordance with law, for investment in securities authorized by Section 16430, Government Code, or in term interest - bearing deposits in banks and savings and loan associations as follows: Time Deposits in various Financial Institutions. In Securities (Sections 16503a Estimated From To Transactions (Section 16430)* & 16602)* Total ( 1 ) 12/12/94 12/16/94 S 1,245,800,000 $26,080,610,000 $265,190,000 $26,345,800,000 ( 2 ) 12/19/94 12/23/94 (253,900,000) 25,826,710,000 265,190,000 26,091,900,000 ( 3 ) 12/27/94 12/30/94 (70,700,000) 25,7568010,000 265,1901000 261021,2001000 ( 4 ) 01/03/95 01/06/95 661,8001,000 26,4178810,000 265,1901000 261683,000,000 ( 5 ) 01/09/95 01/13/95 (67,200,000) 26,350,610,000 265,190,000 26,615,800,000 ( 6 ) 01/17/95 01/20/95 1,143,900,000 27,494,510,000 265,190,000 27,759,700,000 ( 7 ) 01/23/95 01/27/95 (166,700,000) 27,3270810,000 265,190,000 27,593,000,000 ( 8 ) 01/30/95 02/03/95 996,800,000 28,324,610,000 265,190#000 28,589,800,000 ( 9 ) 02/06/95 02/10/95 80,100,000 28,404,710,000 265,1900000 284F669,900,000 ( 10 ) 02/14/95 02/17/95 121,800,000 284,52.61510,000 265,190,000 280791,7008000 From any of the amounts specifically designated above, not more than 30 percent in the aggregate may be invested in prime commercial paper under Section 16430(e), Government Code. Additional amounts available in treasury trust account and in the Treasury from time to time, in excess of the amounts and for the same types of investments as specifically designated above. Provided, that the availability of the amounts shown under paragraph 2 is subject to reduction in the amount by which the bank accounts under paragraph 1 would otherwise be reduced below the calendar month average balance of $179,296,000 POOLED MONEY INVESTMENT BOARD: k Chairperson Member Dated: December 14, 1994 <:%A" *Government Code Member, -3- DESIGNATION BY POOLED MONEY INVESTMENT BOARD OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS No. 1509 FAM-10 (Rev..5-91) ed nt In accordance with Sections 16480 through designated the famount the oofrmoney anment vailable for ldeposit yand vinvestmentard on December 28, 1994, has determined and designated it is under said sections. In accordance with Sections 164d in banklaccounts80.2 fandesavings and intent that money available for deposit or investment be deposited securities in such a manner so as to realize hof�mone�availablereturn oforsdepostent ittinsbank afe aaccounts,�tsavings rand loan associ- and the Board does hereby designate the amountY ations, and for investment in securities and the type of such deposits and investments as follows: 1. In accordance with law, for deposit in demand bank accounts as Compensating Balance for Services $179,296,000 e. The active noninterest-bear ing bank accounts designation excludeconstitutes from theadai�lyrbalancesvanygamountsccontained therein of computing the compensating balances, the Treasurer as a result of nondelivery of securities purchased ef�atecofhdefor sithe ThePooled balances invsucheaccountsnmay nfallabelow 1the for any deposits not credited by the bank as of t Poy the above amount provided that the balances computed bydividing thesunt. Theum of dailybbalancesomayhexceedethis aomountbduring heavy number of days in the calendar month reasonably approximates thatamo collection periods or in anticipation of large impending warrant presentaiionsato and the Treasury,udent but ryemanagnementare to be maintained in such a manner as to realize the maximum return 2. In accordance with law, for investment in securities authorized by Section 16430, Government Code, or in term interest - bearing deposits in banks and savings and loan associations as follows: In Securities From To Transactions (Section 16430)* ( 1 ) 12/ 12/30/94 S (70,700,000) S 25,755,010,000 ( 2 ) 01/03/95 01/06/95 661,800,000 26,416,810,000 ( 3 ) 01/09/95 01/13/95 (67,200,000) 26,349,610,000 ( 4 ) 01/17/95 01/20/95 1,143,900,000 27,493,510,000 ( 5 ) 01/23/95 01/27/95 (166,700,000) 27,326,810,000 ( 6 ) 01/30/95 02/03/95 996,800,000 28,323,610,000 ( 7 ) 02/06/95 02/10/95 80,1008000 28,403,710,000 ( 8 ) 02/14/95 02/17/95 121,800,000 28,525,510,000 Time Deposits in various Financial Institutions. (Sections 16503a Estimated & 16602)* Total S 2661190,000 $260021,200,000 266,190,000 26,683,000,000 2668190,000 26,615,800,000 266,190,000 27,759,700,000 26681901,000 27,593,000,000 266,190,000 28,589,800,000 266,190,000 28,669,900,000 266,190,000 28,791,700,000 From any of the amounts specifically designated abovenot C more than 30 percent in the aggregate may be invested in prime commercial paper under Section 16430(e), Government Additional amounts available in treasury trust account and in the Treasury from time to time, in excess of the amounts and for the same types of investments as specifically designated above. Provided, that the availability of the amounts shown under paragraph 2 is suheecalendaedmto ctiononth ain the amount by which the bank accounts under paragraph 1 would otherwise be reducedof $179,296,000 POOLED MONEY INVESTMENT BOARD: • ,, Chairoerso _ Member Dated: December 28, 1994 *Government Code Member —4— DESIGNATION BY POOLED MONEY INVESTMENT BOARD OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS No. 1510 FAM-10 (Rev. 5-91) In accordance with Sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board on December 29, 1994, has determined and designated the amount of money available for deposit and investment under said sections. In accordance with Sections 16480.1 and 16480.2 of the Government Code, it is the intent that the money available for deposit or investment be deposited in bank accounts and savings and loan associations or invested in securities in such a manner so as to realize the maximum return consistent with safe and prudent treasury management, and the Board does hereby designate the amount of money available for deposit in bank accounts, savings and loan associ- ations, and for investment in securities and the type of such deposits and investments as follows: 1. In accordance with law, for deposit in demand bank accounts as Compensating Balance for Services $179,296,000 The active noninterest-bearing bank accounts designation constitutes a calendar -month average balance. For purposes of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above amount provided that the balances computed by dividing the sun of daily balances of that calendar month by the number of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management. 2. In accordance with law, for investment in securities authorized by Section 16430, Government Code, or in term interest - bearing deposits in banks -and savings and loan associations as follows: Time Deposits in various Financial Institutions. In Securities (Sections 16503a Estimated From To Transactions (Section 16430)* & 16602)* Total ( 1 ) 12/ 12/30/94 's (70,700,000) $ 25,752,010,000 $ 269,190,000 $260021,200,000 ( 2 ) 01/03/95 01/06/95 6610800,000 26,413,810,000 2690190,000 26,683,000,000 ( 3 ) 01/09/95 01/13/95 (67,200,000) 26,346,610,000 269,190,000 268615,800,000 ( 4 ) 01/17/95 01/20/95 1,143,900,000 27,490,510,000 269,190,000 27,759,700,000 ( 5 ) 01/23/95 01/27/95 (166,700,000) 27,323,810,000 269,190,000 27,593,000,000 ( 6 ) 01/30/95 02/03/95 996,800,000 28,320,610,000 269,190,000 28,589,800,000 ( 7 ) 02/06/95 02/10/95 800100,000 28,400,710,000 269,190,000 28,669,900,000 ( 8 ) '02/14/95 02/17/95 121,800,000 28,522,510,000 269,190,000 28,791,700,000 From any of the.amounts specifically designated above, not more than 30 percent in the aggregate may be invested in prime commercial paper under Section 16430(e), Government Code. Additional amounts available in treasury trust account and in the Treasury from time to time, in excess of the amounts and for the same types of investments as specifically designated above. Provided, that the availability of the amounts shown under paragraph 2 is subject to reduction in the amount by which the bank accounts under paragraph 1 would otherwise be reduced below the calendar month average balance of S179,296,000 POOLED MONEY INVESTMENT BOARD: Chairperson Member Dated: December 29, 1994 *Government Code Member -5- DEMAND BANK DEPOSITS (000 omitted) DAILY BALANCES WARRANTS DECEMBER PER BANKS OUTSTANDINGS 1. 512,634 11454,286 2. 425,257 1•1357,620 3. 425,257 11357,620 4. 425,257 11357,620 5. 216,526 11066,780 6. 235,480 976,371 7. 378,17.5 925,714 8. 573,265 11140,129 9. 566,883 11200,658 10. 566,883 11200,658 11. 566,883 11200,658 12. 550,219 11024,300 13. 568,852 944,407 14. 560,374 903,156 15. 731,885 11328,507 16. 686,515 11175,892 17. 686,515 11175,892 18. 686,515 11175,892 19. 576,463 11005,230 20. 569,722 921,293 21. 392,795 824,279 22. 449,672 11003,287 23. 899,771 11077,191 24. 899,771 11077,191 25. 899,771 11077,191 26. 899,771 11077,191 27. 563,475 991,519 28. 620,707 977,457 29. 419,087 11112,449 30. 404,775 11438,364 31. 404,775 11442,588 a/ AVERAGE DOLLAR DAYS $ 560,127 a/ The prescribed bank balance for December 1994 was $457,681,000.00. This consisted of 166,902,000.00 in compensating balances for services, $295,991,000.00 uncollected funds and a deduction of $5,212,000.00 for September delayed deposit credit. TIME DEPOSITS BEVERLY HILLS Great Western Bank 150,000,000 CUPERTINO Cupertino National Bank ' 41000,000 FRESNO Regency Bank 500,000 United Security Bank 31000,000 INGLEWOOD Imperial Bank 15,000,000 LOS ANGELES Preferred Bank 51000,000 OAKDALE Oak Valley Community Bank 500,000 -7- TIME DEPOSITS PETALUMA Bank of Petaluma POMONA Pomona First Federal Savings & Loan Assoc REDDING North Valley Bank RED BLUFF Tehema County Bank SACRAMENTO Sacramento Savings Bank Sanwa Bank of California VACAVILLE Continental Pacific Bank YUBA CITY Feather River State Bank TOTAL TIME DEPOSITS AS OF DECEMBER 29, 1994 11000,000 21000,000 31000,000 95,000 34,000,000 50,000,000 11000,000 95,000 $269,190, 000 INVESTMENT TRANSACTIONS POOLED MONEY INVESTMENT ACCOUNT a/ —a/ TRANS. PAR DAYS AMOUNT TYPE DESCRIPTION YIELD 000 HELD EARNED YIELD 12-01-94 Redemption BA 12-01-94 4.875 $150,000 120 $2,437,500.00 5.024 Redemption CD 4.750% 12-01-94 4.750 75,000 121 1,197,395.83 4.815 Redemption CD 4.800% 12-01-94 4.760 85,000 122 1,371,327.36 4.826 Redemption CD 4.790% 12-01-94 4.920 50,000 126 861,403.00 4.992 Redemption CP 12-01-94 4.650 50,000 121 781,458.33 4.789 Redemption CP 12-01-94 4.650 50,000 121 781,458.33 4.789 Redemption CP 12-01-94 4.650 50,000 121 781,458.33 4.789 Redemption CP 12-01-94 4.650 50,000 121 781,458.33 4.789 Redemption CP 12-01-94 4.650 50,000 122 787,916.67 4.790 Redemption CP 12-0.1-94 4.650 50,000 122 787,916.67 4.790 Redemption CP 12-01-94 4.650 50,000 122 787,916.67 4.790 Redemption CP 12-01-94 4.650 50,000 122 787,916.67 4.790 12-02-94 RRS Bills 02-09-95 5.500 50,000 Redemption BA 12-02-94 4.870 24,400 102 336,679.33 5.006 Redemption CD 5.010% 12-02-94 5.000 50,000 35 243,057.67 5.069 Redemption CP 12-02-94 4.650 50,000 123 794,375.00 4.790 Redemption CP 12-02-94 4.650 50,000 123 794,375.00 4.790 Redemption CP 12-02-94 4.650 50,000 123 794,375.00 4.790 Redemption CP 12-02-94 4.650 50,000 123 794,375.00 4.790 Purchase g/ CD 6.140% 02-28-95 6.130 50,000 12•-07-94 Sale CD 5.100% 01-27-95 6.170 200,000 134 3,463,228.67 4.716 Redemption BA 12-07-94 5.000 40,600 77 434,194.43 5.124 Redemption BA 12-07-94 4.930 13,700 79 148,214.97 5.053 Redemption CP 12-07-94 4.950 40,000 91 500,500.00 5.082 Redemption CP 12-07-94 4.620 45,000 125 721,875.00 4.760 Purchase Bills 01-12-95 5.100 13,240 .5�/ Purchase g/ Bills 04-13-95 5.250 50,000 Purchase q/ Bills 05-11-95 5.250 4,000 Purchase Bills 05-11-95 5.100 35,000 .2/ Purchase c/ Bills 05-11-95 5.100 50,000 Purchase c/ Bills 05-11-95 5.250 50,000 Purchase g/ Notes 4.250% 07-31-95 5.100 4,005 12•-08-94 Sale CB FR 5.262% 10-07-96 5.174 20,000 429 1,015,097.23 4.318 Sale CB FR 5.142% 03-31-97 5.228 50,000 254 1,617,458.33 4.648 Redemption BA 12-08-94 4.870 25,550 112 387,110.89 5.013 Redemption BA 12-08-94 4.820 6,550 141 123,653.08 4.980 Sale q/ Bills 01-12-95 5.100 13,240 1 1,866.18 5.170 -9-. INVESTMENT TRANSACTIONS POOLED MONEY INVESTMENT ACCOUNT a/ a/ TRANS. PAR DAYS AMOUNT TYPE DESCRIPTION YIELD 000 HELD EARNED YIELD 12-08-94 Sale q/ Bills 04-13-95 5.250 $ 50,000 1 $ 6,998.54 5.322 Sale c/ Bills 05-11-95 5.250 4,000 1 556.62 5.322 Sale .2/ Bills 05-11-95 5.100 35,000 1 4,828.13 5.170 Sale �gj Bills 05-11-95 5.100 50,000 1 6,897.33 5.170 Sale c/ Bills 05-11-95 5.250 50,000 1 6,957.71 5.322 Sale S/ Notes 4.250% 07-31-95 5.100 4,005 1 567.29 5.170 Purchase CP 12-09-94 5.450 100,000 Purchase Notes 6.000% 12-31-97 5.420 50,000 Purchase Notes 6.000% 12-31-97 5.420 50,000 Purchase Notes 8.125% 02-15-98 5.430 34,650 Purchase Notes 7.875% 04-15-98 5.430 38,955 Purchase Notes 5.250% 07-31-98 5.430 38,340 Purchase c/ Notes 4.750% 10-31-98 5.430 38,805 Purchase gj Notes 5.875% 03-31-99 5.430. 45,345 Purchase .2/ Notes 9.125% 05-15-99 5.430 29,755 Purchase gj Notes 6.750% 05-31-99 5.430 42,655 Purchase q/ Notes 6.8757. 08-31-99 5.430 45,305 12-09-94 Sale CB FR 5.875% 10-15-96 5.810 25,000 401 1,232,465.27 4.487 Redempiton BA 12-09-94 5.140 15,000 57 122,075.00 5.254 Redempiton BA 12-09-94 4.930 26,000 84 299,086.67 5.056 Redempiton BA 12-09-94 4.800 27,000 142 511,200.00 4.960 Redempiton CP 12-09-94 5.450 100,000 1 15,138.89 5.52E Sale � Notes 6.000% 12-31-97 5.420 50,000 1 7,386.56 5.49`j Sale Notes 6.000% 12-31-97 5.420 50,000 1 7,386.56 5.495 Sale Notes 8.125% 02-15-98 5.430 34,650 1 5,304.05 5.506 Sale Notes 7.875% 04-15-98 5.430 38,955 1 5,842.53 5.506 Sale Notes 5.250% 07-31-98 5.430 38,340 1 5,322.15 5.506 Sale Notes 4.750% 10-31-98 5.430 38,805 1 5,187.16 5.506 Sale Notes 5.875% 03-31-99 5.430 45,345 1 6,310.11 5.506 Sale Notes 9.125% 05-15-99 5.430 29,755 1 4,639.63 5.506 Sale Notes 6.750% 05-31-99 5.430 42,655 1 6,065.76 5.506 Sale SL/ Notes 6.875% 08-31-99 5.430 45,305 1 6,578.60 5.506 Purchase CP 12-12-94 5.450 200,000 Purchase �q/ CD 5.670% 06-08-95 5.500 50,000 Purchase .2/ Notes 10.500% 08-15-95 5.450 44,265 Purchase q/ Notes 4.625% 02-29-96 5.450 47,810 Purchase � Notes 7.375% 05-15-96 5.450 49,090 Purchase �q/ Notes 6.250% 08-31-96 5.450 43,740 Purchase qj Notes 5.125% 06-30-98 5.450 48,580 Purchase gj Notes 6.375% 07-15-99 5.450 39,115 -10- INVESTMENT TRANSACTIONS POOLED MONEY INVESTMENT ACCOUNT a/ TRANS. PAR TYPE DESCRIPTION YIELD 0� 00) 12-12-94 Redemption CP 12-12-94 5.450 $200,000 Sale c/ CD 5.670% 06-08-95 5.500 50,000 Sale c/ Notes 10.500% 08-15-95 5.450 44,265 Sale q/ Notes 4.625% 02-29-96 5.450 47,810 Sale c/ Notes 7.375% 05-15-96 5.450 49,090 Sale Notes 6.250% 08-31-96 5.450 43,740 .2/ Sale c/ Notes 5.125% 06-30-98 5.450 48,580 Sale c/ Notes 6.375% 07-15-99 5.450 39,115 Purchase CP 12-13-94 5.550 50,000 Purchase CP 12-13-94 5.550 50,000 Purchase CP 12-13-94 5.550 50,000 Purchase CP 12-13-94 5.550 50,000 Purchase CP 12-21-94 5.520 20,000 Purchase CP 12-23-94 5.550 15,000 Purchase CP 12-23-94 5.550 50,000 Purchase q/ Bills 05-11-95 5.520 7,070 Purchase g Bills 05-11-95 5.520 50,000 Purchase q/ Bills 05-11-9.5 5.520 50,000 Purchase c/ Bills 05-11-95 5.520 50,000 Purchase q/ Notes 9.500% 11-15-95 5.520 49,590 Purchase S/ Notes 7.875% 02-15-96 5.520 49,470 Purchase c/ Notes 7.875% 01-15-98 5.520 49,305 12--13-94 Redemption CP 12-13-94 5.550 50,000 Redemption CP 12-13-94 5.550 50,000 Redemption CP 12-13-94 5.550 50,000 Redemption CP 12-13-94 5.550 50,000 Sale Bills 05-11-95 5.520 7,070 .2/ Sale c/ Bills 05-11-95 5.520 50,000 Sale Bills 05-11-95 5.520 50,000 Sale Bills 05-11-95 5.520 50,000 Sale Notes 9.500% 11-15-95 5.520 49,590 Sale c/ Notes 7.875% 02-15-96 5.520 49,470 Sale q/ Notes 7.875% 01-15-98 5.520 49,305 Purchase CP 12-14-94 5.480 805 Purchase CP 12-14-94 5.480 50,000 Purchase CP 12-14-94 5.500 40,000 Purchase CP 12-21-94 5.450 40,000 Purchase CP 12-21-94 5.450 50,000 Purchase CP 12-21-94 5.500 100,000 Purchase gj Bills 06-01-95 5.450 17,750 Purchase q/ Bills 06-01-95 5.450 50,000 Purchase c/ Notes 7.625% 04-30-96 5.450 36,000 Purchase c/ Notes 6.500% 04-30-99 5.460 50,000 DAYS AMOUNT HELD EARNED YIELD 3 $ 90,833.33 5.528 3 22,916.67 5.576 3 20,832.62 5.525 3 20,887.12 5.525 3 21,938.52 5.525 3 19,413.35 5.525 3 20,358.02 5.525 3 16,924.52 5.525 1 7,708.33 5.627 1 7,708.33 5.627 1 7,708.33 5.627 1 7,708.33 5.627 1 1,035.00 5.596 1 7,321.67 5.596 1 7,321.67 5.596 1 7,321.67 5.596 1 7,666.67 5.596 1 7,666.67 5.596 1 7,666.67 5.596 -11- INVESTMENT TRANSACTIONS POOLED MONEY INVESTMENT ACCOUNT v —a/ TRANS. PAR DAYS AMOUNT TYPE DESCRIPTION YIELD OS 00) HELD EARNED YIELD 12-13-94 Purchase Sj: Notes 6.500% 04-30-99 5.460 $ 50,000 12-14-94 Redemption CP 12-14-94 5.480 805 1 $ 122.54 5.557 Redemption CP 12-14-94 5.480 50,000 1 7,611.11 5.557 Redemption CP 12-14-94 5.500 40,000 1 6,111.11 5.577 Purchase CP 12-15-94 5.375 170,000 12-15-94 Redemption Bills 12-15-94 3.470 50,000 364 1,754,277.80 3.64E Redemption Bills 12-15-94 3.470 50,000 364 1,754,277.80 3.646 Redemption Bills 12-15-94 3.470 50,000 364 1,754,277.80 3.646 Redemption Bills 12-15-94 3.470 50,000 364 1,754,277.80 3.646 Redemption CB 7.000% 12-15-94 3.750 38,510 407 1,654,646.34 3.768 Redemption CP 12-15-94 5.375 170,000 1 25,381.94 5.450 RRP Bills 12-15-94 4.740 50,000 106 - 688,238.13 - 4.805 RRP Bills 12-15-94 4.740 50,000 106 - 688,238.13 - 4.805 RRP Bills 12-15-94 4.700 50,000 105 - 676,200.55 - 4.765 RRP Bills 12-15-94 4.700 50,000 105 - 676,200.55 - 4.765 RRP Notes 8.500% 08-15-95 5.150 50,000 52 - 383,102.78 - 5.221 Purchase CP 12-16-94 5.550 40,000 Purchase CP 12-16-94 5.550 100,000 Purchase CP 12-16-94 5.550 300,000 Purchase CP 12-21-94 5.500 10,000 Purchase CP 12-21-94 5.500 20,000 Purchase CP 12-21-94 5.500 50,000 Purchase q/ CD 5.870% 02-28-95 5.600 25,000 Purchase q/ CD 6.370% 03-08-95 5.600 25,000 Purchase g/ CD FR 4.362% 04-20-95 5.650 50,000 12-16-94 Redemption CP 12-16-94 5.550 40,000 1 6,166.67 5.627 Redemption CP 12-16-94 5.550 100,000 1 15,416.67 5.627 Redemption CP 12-16-94 5.550 300,000 1 46,250.00 5.627 Sale CD- 5.870% 02-28-95. 5.600 25,000 1 3,888.89 5.677 Sale CD 6.370% 03-08-95 5.600 25,000 1 3,888.89 5.677 Purchase CD 5.530% 12-28-94 5.530 100,000 Purchase CP 12-19-94 5.440 50,000 Purchase CP 12-19-94 5.440 50,000 Purchase CP 12-19-94 5.520 50,000 Purchase CP 12-19-94 5.520 50,000 Purchase CP 12-19-94 5.520 50,000 Purchase CP 12-19-94 5.430 125,000 -12- INVESTMENT TRANSACTIONS POOLED MONEY INVESTMENT ACCOUNT a/ TRANS. PAR TYPE DESCRIPTION YIELD 000 12-16-94 Purchase CP 12-21-94 5.500 $ 50,000 Purchase CP 12-28-94 5.620 25,000 Purchase CP 12-28-94 5.550 26,130 Purchase CP 12-28-94 5.550 50,000 Purchase CP 12-28-94 5.550 50,000 Purchase CP 12-28-94 5.620 50,000 Purchase c/ CD 5.590% 01-17-95 5.530 30,000 Purchase c/ CD 5.870% 02-28-95 5.530 20;000 Purchase � Notes 8.500% 07-15-97 5.400 49,650 Purchase q/ Notes 8.625% 08-15-97 5.420 48,525 Purchase 2/ Notes 7.875% 01-15-98 5.420 49,170 Purchase c/ Notes 1.875% 01-15-98 5.420 49,170 Purchase g/ Notes 8.125% 02-15-98 5.420 49,115 Purchase �gj Notes 8.250% 07-15-98 5.420 48,575 Purchase c/ Notes 8.875% 02-15-99 5.420 47,710 Purchase .5j: Notes 6.750% 06-30-99 5.400 50,000 12-19-94 Redemption CP 12-19-94 5.440 50,000 Redemption CP 12-19-94 5.440 50,000 Redemption CP 12-19-94 5.520 50,000 Redemption CP 12-19-94 5.520 50,000 Redemption CP 12-19-94 5.520 50,000 Redemption CP 12-19-94 5.430 125,000 Sale q/ CD 5.590% 01-17-95 5.530 30,000 Sale c/ CD 5.870% 02-28-95 5.530 20,000 Sale Notes 8.500% 07-15-97 5.400 49,650 Sale c/ Notes 8.625% 08-15-97 5.420 48,525 Sale c/ Notes 7.875% 01-15-98 5.420 49,170 Sale q/ Notes 7.875% 01-15-98 5.420 49,170 Sale c/ Notes 8.125% 02-15-98 5.420 49,115 Sale q/ Notes 8.250% 07-15-98 5.420 48,575 Sale Notes 8.875% 02-15-99 5.420 47,710 Sale Notes 6.750% 06-30-99 5.400 50,000 Purchase CP 12-20-94 5.500 25,000 Purchase CP 12-20-94 5.500 50,000 Purchase CP 12-20-94 5.500 50,000 Purchase CP 12-20-94 5.500 50,000 Purchase CP 12-20-94 5.430 200,000 Purchase CP 12-21-94 5.420 30,000 Purchase CP 12-21-94 5.420 50,000 Purchase CP 12-21-94 5.450 150,000 Purchase CP 12-23-94 5.470 50,000 Purchase CP 12-23-94 5.470 50,000 Purchase CP 12-23-94 5.450 100,000 DAYS AMOUNT HELD EARNED YIELD 3 $ 22,666.67 5.518 3 22,666.67 5.518 3 23,000.00 5.599. 3 23,000.00 5.599 3 23,000.00 5.599 3 56,562.50 5.507 3 13,825.00 5.606 3 9,216.67 5.606 3 23,096.25 5.475 3 22,583.33 5.495 3 22,583.33 5.495 3 22,583.33 5.495 3 22,583.33 5.495 3 22,583.33 5.495 3 22,583.33 5.495 3 21,903.75 5.475 -13- POOLED MONEY INVESTMENT ACCOUNT a/ TYPE 12-19-94 Purchase 2/ Bills Purchase q/ Bills Purchase .2/ CD Purchase g/ Notes Purchase c/ Notes Purchase q/ Notes Purchase Notes Purchase Notes Purchase q/ Notes Purchase c/ Notes Purchase q/ Notes 12-20-94 A/ DESCRIPTION . Redemption CP Redemption CP Redemption CP Redemption CP Redemption CP Sale CD Sale Notes Sale c/ Notes Sale c Notes Sale c/ Notes Sale Notes Sale Notes Sale c/ Notes Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase c/ Notes Purchase Notes Purchase Notes Purchase q/ Notes Purchase .2/ Notes Purchase q/ Notes 12-21-94 Redemption CB FR INVESTMENT TRANSACTIONS 12-22-94 12-22-94 6.560% 04-17-95 8.500% 04-15-97 8.500% 05-15-97 8.500% 05-15-97 5.625% 08-31-97 5.500% 09-30-97 5.500% 09-30-97 8.875% 11-15-97 4.750% 08-31-98 12-20-94 12-20-94 12-20-94 12-20-94 12-20-94 6.560% 04-17-95 8.500% 04-15-97 8.500% 05-15-97 8.500% 05-15-97 5.625% 08-31-97 5.500% 09-30-97 5.500% 09-30-9.7 8.875% 11-15-97 12-21-94 12-21-94 12-23-94 12-23-94 12-29-94 12-30-94 01-06-95 01-06-95 01-06-95 8.750% 10-15-97 7.875% 01-15-98 8.125% 02-15-98 9.250% 08-15-98 9.250% 08-15-98 8.875% 11-15-98 TRANS. YIELD 5.470 $ 5.470 5.550 5.400 5.400 5.400 5.400 5.400 5.400 5.400 5.470 5.500 5.500 5.500 5.500 5.430 5.550 5.400 5.400 5.400 5.400 5.400 5.400 5.400 5.400 5.400 5.520 5,520 5.500 5.500 6.100 6.100 6.100 5.350 5.350 5.350 5.350 5.350 5.350 4.537% 12-21-94 6.325 4/ PAR (000) 33,160 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 7,585 15,000 25,000 50,000 50,000 50,000 200,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 7,585 25,000 200,000 16,395 50,000 100,000 100,000 20,000 50,000 50,000 49,585 49,190 49,145 46,025 47,315 49,575 DAYS AMOUNT HELD EARNED YIELD 1 $ 3,819.44 5.577 1 7,638.89 5.577 1 7,638.89 5.577 1 7,638.89 5.577 1 30,166.67 5.506 1 7,708.33 5.627 1 7,588.50 5.475 1 7,536.75 5.475- 1 7,536.75 5.475 1 7,107.00 5.475 1 7,037.25 5.475 1 7,037.25 5.475 1 1,156.50 5.475 25,000 1,028 2,'966,648.09 4.275 -14- INVESTMENT TRANSACTIONS POOLED MONEY INVESTMENT ACCOUNT a/ —a/ TRANS. PAR DAYS AMOUNT TYPE DESCRIPTION YIELD 000 HELD EARNED YIELD 12-21-94 Redemption CD 4.940% 12-21-94 4.930 $100,000 118 $1,615,996.22 4.998 Redemption CD 5.060% 12-21-94 5.060 100,000 149 2,094,277.78 5.130 Redemption CP 12-21-94 5.400 25,000 1 3,750.00 5.475 Redemption -CP 32-21-94 5.400 200,000. 1 30,000.00 5.475 Redemption CP 12-21-94 5.420 30,000 2 9,033.33 5.496 Redemption CP 12-21-94 5.420 50,000 2 15,055.56 5.496 Redemption CP 12-21-94 5.450 150,000 2 45,416.67 5.527 Redemption CP 12-21-94 5.500 50,000 5 38,194.44 5.580 Redemption CP 12-21-94 5.500 10,000 6 9,166.67 5.581 Redemption CP 12-21-94 5.500 20,000 6 18,333.33 5.581 Redemption CP 12-21-94 5.500 50,000 6 45,833.33 5.581 Redemption CP 12-21-94 5.450 40,000 8 48,444.44 5.532 Redemption CP 12-21-94 5.450 50,000 8 60,555.56 5.532 Redemption CP 12-21-94 5.500 100,000 8 122,222.22 5.583 Redemption CP 12-21-94 5.520 20,000 9 27,600.00 5.604 Redemption CP 12-21-94 5.620 15,000 23 53,858.34 5.718 Redemption CP 12-21-94 4.970 40,000 93 513,566.67 5.104 Redemption CP 12-21-94 5.050 50,000 97 580,347.2.2 5.190 Sale c/ Notes 8.750% 10-15-97 5.350 49,585 1 7,519.72 5.424 Sale q/ Notes 7.875% 01-15-98 5.350 49,190 1 7,430.56 5.424 Sale Sj/ Notes 8.125% 02-15-98 5.350 49,145 1 7,430.56 5.424 Sale c/ Notes 9.250% 08-15-98 5.350 46,025, 1 7,227.70 5.424 Sale S�/ Notes 9.250% 08-15-98 5.350 47,315 1 7,430.56 5.424 Sale c/ Notes 9.875% 11-15-98 5.350 49,575 1 .7,544.24 5.424 Sale c/ Bills 12-22-94 5.470 33,160 2 9,873.35 5.545 Sale S�/ Bills 12-22-94 5.470 50,000 2 14,890.56 5.545 Sale c/ Notes 4.750% 08-31-98 5.470 15,000 2 4,105.54 5.545 Sale c/ CD FR 4.362% 04-20-95 5.650 50,000 6 47,083.33 5.728 Sale Bills 06-01-95 5.450 17,750 8 20,419.33 5.525 Sale Bills 06-01-95 5.450 50,000 8 57,527.78 5.525 Sale q/ Notes 7.625% 04-30-96 5.450 36,000 8 43,164.00 5.525 Sale Notes 6.500% 04-30-99 5.460 50,.000 8 57,936.67 5.535 .2/ Sale c/ Notes 6.500% 04-30-99 5.460 50,000 8 57,936.67 5.535 Purchase CP 12-22-94 5.610 50,000 Purchase CP 12-22-94 5.610 50,000 Purchase CP 12-22-94 5.570 200,000 Purchase CP 01-03-95 5.850 50,000 Purchase CP 01-03-95 5.850 50,000 Purchase CP 01-05-95 5.900 10,000 Purchase CP 01-05-95 5.900 50,000 Purchase CP 01-05-95 5.750 50,000 Purchase g/ Notes 5.125% 12-31-98 5.550 9,975 Purchase q/ Notes 5.125% 12-31-98 5.550 50,000 Purchase gj Notes 6.375% 07-15-99 5.550 50,000 Purchase. Notes 6.875% 07-31-99 5.550 50,000 Purchase gj Notes 6.875% 07-31-99 5.550 50,000 -15- INVESTMENT TRANSACTIONS POOLED MONEY INVESTMENT ACCOUNT a/ TRANS.. PAR TYPE DESCRIPTION YIELD 0( 00) 12-22-94 Redemption CP 12-22-94 5.610 $ 50,000 Redemption CP 12-22-94 5.610 50,000 Redemption CP 12-22-94 5.570 200,000 Sale / Notes 5.125% 12-31-98 5.550 9,975 Sale c/ Notes 5.125% 12-31-98 5.550 50,000 Sale q/ Notes 6.375% 07-15-99 5.550 50,000 Sale c/ Notes 6.875% 07-31-99 5.550 50,000 Sale q/ Notes 6.875% 07-31-99 5.550 50,000 RRP Notes 8.500% 08-15-95 5.250 25,000 RRP Bills 10-19-95 5.100 50,000 RRP Bills 10-19-95 5.100 50,000 Purchase CP 12-23-94 5.600 10,000 Purchase CP 12-23-94 5.520 24,000 Purchase CP 12-23-94 5.550 26,000 Purchase CP 12-23-94 5.550 50,000 Purchase CP 12-23-94 5.550 50,000 Purchase CP 12-23-94 5.600 50,000 Purchase CP 12-23-94 5.600 50,000 Purchase CP 12-23-94 5.600 50,000 Purchase CP 12-23-94 5.600 50,000 Purchase CP 12-23-94 5.550 200,000 12-23-94 Redemption CP 12-23-94 5.600 10,000 Redemption CP 12-23-94 5.520 24,000 Redemption CP 12-23-94 5.550 26,000 Redemption CP 12-23-94 5.550 50,000 Redemption CP 12-23-94 5.550 50,000 Redemption CP 12-23-94 5.600 50,000 Redemption CP 12-23-94 5.600 50,000 Redemption CP 12-23-94 5.600 50,000 Redemption CP 12-23-94 5.600 50,000 Redemption CP 12-23-94 5.550 200,000 Redemption CP 12-23-94 5.520 16,395 Redemption CP 12-23-94 5.520 50,000 Redemption CP 12-23-94 5.470 50,000 Redemption CP 12-23-94 5.470 50,000 Redemption CP 12-23-94 5.470 50,000 Redemption CP 12-23-94 5.550 15,000 Redemption CP 12-23-94 5.550 50,000 Purchase CP 12-27-94 5.720 50,000 Purchase CP 12-27-94 5.720 50,000 Purchase CP 12-27-94 5.720 50,000 Purchase CP 12-27-94 5.720 50,000 Purchase CP 12-27-94 5.700 62,000 DAYS AMOUNT HELD EARNED YIELD 1 $ 7,791.67 5.688 1 7,791.67 5.688 1 30,944.44 5.648 1 1,408.31 5.627 1 7,059.29 5.627 1 7,365.31 5.627 1 7,500.21 5.627 1 7,500.21 5.627 49 - 184,898.44 - 5.322 45 - 299,625.00 - 5.170 45 - 299,625.00 - 5.170 1 1,555.56 5.678 1 3,680.00 5.597 1 4,008.33 5.627 1 7,708.33 5.627 1 7,708.33 5.627 1 7,777.78' 5.678 1 7,777.78 5.678 1 7,777.78 5.678 1 7,777.78 5.678 1 30,833.33 5.627 3 7,541.70 5.599 3 23,000.00 5.599 4 30,388.90 5.549 4 30,388.90 5.549 4 30,388.90 5.549 11 25,437.50 5.636 11 84,791.67 5.636 -16- INVE§PjEN ,ANSACTIONS POOLED MONEY INVESTMENT ACCOUNT A/ a/ TRANS. PAR TYPE DESCRIPTION YIELD 000 12-23-94 Purchase CP 12-27-94 5.650 $300,000 Purchase CP 01-04-95 5.850 40,000 12-27-94 Redemption CP Redemption CP Redemption CP Redemption CP Redemption CP Redemption CP RRP Notes RRP Notes RRP Notes RRP Notes RRP Notes RRP Notes Purchase CD Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase CP Purchase c/ CD Purchase SL/ Bills Purchase � Bills Purchase q/ Bills Purchase Bills Purchase Bills Purchase c/ Bills 12-28-94 12-27-94 12-27-94 12-27-94 12-27-94 12-27-94 12-27-94 5.500% 02-15-95 7.750% 02-15-95 6.875% 10-31-96 6.875% 10-31-96 4.625% 02-29-96 4.6250% 02-29-96 6.250% 01-03-95 12-28-94 12-28-94 12-28-94 12-28-94 12-28-94 12-28-94 12-28-94 12-28-94 12-28-94 01-04-95 01-04-95 01-05-95 01-05-95 01-06-95 01-06-95 6.590% 05-23-95 06-01-95 06-01-95 06-01-95 06-01-95 06-01-95 06-01-95 5.720 5.720 5.720 5.720 5..700 5.650 5.100 5.100 5.200 5.200 5.280 5.280 6.250 5.750 5.650 5.650 5.650 5.650 5.650 5.650 5.650 5.700 6.000 6.000 6.000 6.000 6.100 6.100 5.750 5.900 5.900 5.900 5.900 5.900 5.900 Redemption CD 5.530% 12-28-94 5.530 Redemption CD 4.940% 12-28-94 4.930 Redemption CD 4.940% 12-28-94 4.930 50,000 50,000 50,000 50,000 62,000 300,000 50,000 50,000 50,000 50,000 50,000 50,000 100,000 25,500 50,000 50,000 50,000 50,000 50,000 50,000 50,000 200,000 50,000 50,000 50,000 50,000 25,000 50,000 50,000 . 12,175 50,000 50,000 50,000 50,000 50,000 100,000 30,000 100,000 DAYS AMOUNT HELD EARNED YIELD 4 $ 31,777.78 5.803 4 31,777.78 5.803 4 31,777.78 5.803 4 31,777.78 5.803 4 39,266.67 5.782 4 188,333.33 5.732.. 69 - 491,193.75 - 5.170 69 - 496,081.25 -. 5.170 55 - 395,236.11 - 5.272 55 - 395,236.11 - 5.272 47 - 338,204.17 - 5.353 47 - 338,204.17 - 5.353 12 184,333.33 5.606 128 525,885.04 4.998 128 1,752,950.14 4.998 -17- INVESTMENT TRANSACTIONS POOLED MONEY INVESTMENT ACCOUNT a/ a/ TRANS. PAR DAYS AMOUNT TYPE DESCRIPTION YIELD 000 HELD EARNED YIELD 12-29-94 Redemption CP 12-29-94 5.500 $ 50,000 1 $ 7,638.89 5.577 Redemption CP 12-29-94 5.500 100,000 1 15,277.78 5.577 Redemption CP 12-29-94 5.480. 150,000 1 22,833.33 5.556 Redemption CP 12-29-94 5.500 100,000 9 137,500.00 5.584 Purchase CP 12-30-94 5.400 25,000 Purchase CP 12-30-94 5.400 50,000 Purchase CP 12-30-94 5.400 50,000 Purchase CP 12-30-94 5.400 50,000 Purchase CP 12-30-94 5.400 50,000 Purchase CP 12-30-94 5.400 50,000 Purchase CP 12-30-94 5.400 200,000 Purchase CP 01-13-95 5.950 42,000 Purchase CP 01-13-95 5.950 50,000 Purchase 2/ CD FR 4.362% 04-20-95 5.450 50,000 12-30-94 Redemption CP 12-30-94 5.400 25,000 1 3,750.00 5.475 Redemption. CP 12-30-94 5.400 50,000 1 7,500.00 5.475 Redemption CP 12-30-94 5.400 50,000 1 7,500.00 5.475 Redemption CP 12-30-94 5.400 50,000 1 7,500.00 5.475 Redemption CP 12-30-94 5.400 50,000 1 7,500.00 5.475 Redemption CP 12-30-94 5.400 50,000 1 7,500.00 5.475 Redemption CP 12-30-94 5.400 200,000 1 30,000.00 5.475 Redemption CP 12-30-94 5.500 100,000 10 152,777.78 5.584 Sale g/ CD FR 4.362% 04-20-95 5.450 50,000 1 7,569.44 5.525 RRP Notes 8.500% 08-15-95 5.320 50,000 51 - 390,022.50 - 5.393 Purchase CP 01-03-95 5.800 50,000 Purchase CP 01-03-95 5.800 50,000 Purchase CP 01-03-95 5.800 50,000 Purchase CP 01-03-95 5.800 50,000 Purchase CP 01-03-95 5.850 100,000 Purchase CP 01-03-95 5.750 270,000 Purchase CP 01-13-95 5.850 28,000 Purchase CP 01-13-95 5.820 50,000 -19- a/ The abbreviations indicate the type of security purchased or sold; i.e., Bonds, Notes, Debentures, Discount Notes and Participation Certificates: Federal National Mortgage Association (FNMA), Farmers Home Administration Notes (FHA), Student Loan Marketing Association (SLMA), Small Business Association (SBA), Negotiable Certificates of Deposit (CD), Negotiable Certificates of Deposit Floating Rate (CD FR), Export -Import Notes (EXIM), Bankers Acceptances (BA), Commercial Paper (CP), Government National Mortgage Association (GNMA), Federal Home Loan Bank Notes (FHLB), Federal Land Bank Bonds (FLB), Federal Home Loan Mortgage Corporation Obligation (FHLMC PC) & (FHLMC GMC), Federal Farm Credit Bank Bonds (FFCB), Federal Farm Credit Discount Notes (FFC), Corporate Securities (CB), U.S. Ship Financing Bonds (TITLE XI'S), International Bank of Redevelopment (IBRD), Tennessee Valley Authority (TVA). b/ Purchase or sale yield based on 360 day calculation for discount obligations and Repurchase Agreements. c/ Repurchase Agreement. d/ Par amount of securities purchased, sold, or redeemed. e/ Securities were purchased and sold as of the same date. f/ Repurchase Agreement against Reverse Repurchase Agreement. g/ Outright purchase against Reverse Repurchase Agreement. h/ Security "SWAP" transactions. i/ Buy back agreement. RRS Reverse Repurchase Agreement. RRP Termination of Reverse Repurchase Agreement. -20-