1996 11 13 IABAGENDA
INVESTMENT ADVISORY BOARD
Study Session Room
78-495 Calle Tampico- La Quinta, CA 92253
November 13, 1996 - 5:30 P.M.
1
]I
I CALL TO ORDER
a. Pledge of Allegiance
b. Roll Call
II 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 Minutes of Meeting on October 9, 1996 for the Investment
Advisory Board.
V BUSINESS SESSION
A. Transmittal of Treasury Report for September, 1996
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report - October 1996
B. Investment Liquidity and Anticipated Revenues
C. Pooled Money Investment Board Report - August 1996
D. Updated Investment Policies
E. Reporting to the City Council - Status Update
VII BOARD MEMBER ITEMS
Vill ADJOURNMENT
�.Di �C9
v
'y OF TNT
INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
November 13, 1996
Transmittal of Treasury Report
for September 30, 1996
BACKGROUND:
Business Session Item No. A
Attached please find the Treasury Report for September 30, 1996.
RECOMMENDATION:
Review Receive and File the Treasury Report of September 30, 1996.
/1 A 1
M -
n M. Falconer, Finance Director
4
3
0
o
E
7
E
E
°
N
N
0
a>
0
a)
0
z1
4)
0I
m
0
zI
0
z
o
z
0
z
1 0
z
0
�z
$
it
;zl
i
O U)I
c E U)
I� j
j co ^;
l0
a> H
C7
c
1
7
IA
c
j
-
a
N
c
« O N
�r N •-
° a>
NU W
m O O
!
N tl)
N
C
!
!
II
NC
m
!C
N
III !
V
Z
ICI
N
II
V
N
11
V
N
I II !
V
M
II
y
N !
II
V
(OD
II
U�
I�
me
h
?AN1
'A0/
N
c
a7
o
` Q,
123 _
S
c
°
�25_
c a.�
0.�
a
! �
I
Z O aO
�
N
7?
o
! !
Q
z
I
o!
!O
Go
to
to
0
O
C
o
O
O
a
co
0
0
o
O
Q
Z
L
m
ao
co
v
w
n
rn
m
O
o
O
O
op
8
O
! op
O
O
O
c0
!
It
! S
O
O
(n
e
O
O
e
IO
Of
�o
U)
IR
8
O
Cf
a0
N 7
X
to
I
a
Zto
o
o
o
Lf)Oul
0
0
o
Q
Z
�
ICI
�QL �
L
e��
i
Z
op
(9
a
CR
N
op
n
0pf�
000
h
NO
LerYQ
'
!
NIR
LL 7
Q a
Of
G
!
Ln
�p
I'Qp
O
p
'Q
�!
O
p�
8
G
0
N
�
g
O
oe
8
p
o
GGo
L�
�c0
I
LnIoOp
0
I�
oCe
Q
Z
-0 E
U-
=
o
LS
Q
!
a'
2i
N
IA
c
I�
Z m UTj
U��
C
C
� y
C
«.2
c
N
N
c
!�
°
m
�y
�� Q O
o m S
I
!
N
��
g'
c
CL
I`0
0 °
LL'$' mmv cv
I"
g
v >
�yo
1 j
.y+
y
pw��,
C S� O l0 N S J U. m
V
Oi y
a
C
Z
N E p�p O C 'O C
I+-
V C
O
N
c�iE�
i C
!�+
! y
.c
m OCo
yE- ICEm,, m c
4u), C O
CL
y
•E
c
E
jC
c
m
O
m
v
C8� �OJm €
C Z� c
>
c
EE.2
e
!
42
..
ayi
>
c
7
ic�
a1
0
U
o
a�
°
ly
E-8 mzx�li5x
E______
U
c
0
m
Z`U
m(
c
0
°
cm
g>
I
! y
~
E ao a a a
om.o
U
rn
E v►N
N
� o������
tnV LLLLLLLLLLLL
aF1
•_
CC c
H
a7
to
N
o
N
U
>
6
>—c
a
,�
�Ccm
uj Q
—
O
c
m
m
c C
4- 0
c
N
E
O C
c
ca t
t H
ca m U
U O
0 O O
M C
G c " O
ca o
J E a
o a?
CL H
U8�
tAN
CD CD
Ntr-SMjOM00M0�
m
N
oho
~
NtiA
Co
°r°
m
<O
cOti
NIOMNLQa;g
�O�M
0
O
-C'i0nwO'
V
0C1AA
�w
MLn �
�
f
ehO.
a
N
pI�OM
7
d
Q
CM CO f-
LO N N
Go
O
N0
CO IW N
CANS
lb
N
.O
(NCOetO
a
C6 cli
ao
�o
O
CA W)
N
�
m
c .
40
1
N
I
v�N
f
N
c
C
v Li
C ti N
c
m
ti EEo
CD
U- c- E C
etc c�0
Q
c InU
.00
u,
Orn� cs�
E-Oc
cap
tO
I°cdca 0`��
E
0LLB
'�
c
LL' U 0 0 N C O
a�Q
O
a.. o
tM
o
x mQ. >,�a
F" E N r G
o
�I
aZi�
N °�
o
C
co
N N cM C. ,
crnECEL ��O
0
V
'=
CL.0
UC7C7UJUU�
Lm
N M 0 �p O 7 v- - r 2
C�wP
c/i
m
M O O
U�J
to
LLD
O
N
O
F-
ao4) CDlcn
�ZU-
cv 0 4) o
Z U-
-'0
o a) O
ZLL
v c 4 c
Z LL
` O N O O
N ZLL
LL
ti
O
O O O O 40
Z 64
LL
c
CS
N
E 6.2 O O
Z ;f 613�
a�
0
a`>
E O N O O
> Z U. bR
Z
0 O 0
Z_LL O
O
EcoM'v'- O
N�p'��[p1NNCOin
O M o 0 M N M
CO t!)�OM
M OC)M
J C0M�O
3 0 C N co V7
co co� O CD ti
Q V- LO CO col~ CO
MOMCoW)M
iA ss
tl)�OpLOyLOC-4
M�MM Lo
M
v! � O
N
w
0
N
c
a� _
E
c
N
(D
A
m
c O cN0
�'u'
caa
�
2cn�o
CO V
�`''
�
a) I r, _ o0 orn
5
._
co
1
U')
•''� 0)
�'QQQQM
Z Z Z Z Tz
LL M
O
C��,000Q�Q
•'ZZZZ0)
W M
rn
MM
6.
� �
�ZCocZcnZ
aai�
ao 4
r`
O N
le -
.L
v
C_E
co
CO
0 0 0 CO
p 0 0 O
p�OO
O
ap
O
W
m O O
Q
a
0s a. a. N LL
.Um
mCD CD 0
m M
C
O
V (!) (/) cn
(n
LL
N
t
c
V
>cc
Q
t
C Q
N
E c0
_
�U
a
caoo
a
jllc ��aa
�`�>�
Cl o
�c
ad N
m �% -Op 0
J m CD
d
j rn-- 0 cv
I.�UU� �
>
C
�-'
CD
LL LL LL ,2
= � N
_
s
p
UcnUcn
,_ZU:5EE=i
—
I
C H
.
I(� J00000000
j
i
i
i
LO
CO
0
Li
co co co co co
rnrnrna�rn
al�aiaaia°ia°ia�i<
pZw
Z
MCOMOO
O V- N r- cM
Lo 0 OO OO ti t-
to
M
O
�OO�'
•Ci0d0•NNq-LO
EOtn
M
cn
O — �
C m O N
•>--- Z.,a
OOOOa% �
a. a. a_ N LL
~cc
O
mm S
0
N
co E
O
Cal
O
co
m E
� c
�� E
—w
C
°d Q to N
cUUW �a.LL
Md
c
d E
> a
O LL LL LL c6 Z ,?
— E :::i �L :,
0
r` O
M O CO co
CD LO CO CO
";i O Ch O
OOoNV)
C6 cli
co MI cn
1-1
i
N »I HIV
ri)o}I ;}I io ;> pm
ISO I O �M il'7
j l0 IN 7 w f7 7 OATA
LL co U.Q Q O Q QQ Q N Q Q
N 8 8 NN > > p
` �ZIy Op O �Z�7'1 jZ�OH EZHON
H�
C') ja s j
m M iV 'O i p
a M ^ INN Q Iy Q
O
N Icpn N co V NN, N p
;Z�� Ip ON I-Z1/►OO
N N N —
r
} O m } } N } Q
N
a a w a a o
wwp
01 n t0 N N��
N ^ n j N 7 N N Np N 7 N Y M
}y0o�� o m ;}fig
ON
III
'C
> O 0 co
o L N
0 =
7 w m
.2
O m
0 OIC6��
r
»
T
F
v
N
_ m
N
LL
N
T �
� N
a
O
w
w '0
a
N �
LL
mm
N G M
C �CCI
C 7
m
w
g
Q�
0 5
c
ccC
W N
W N
N
N
m
J
J
J
m m
I'
i
e. T
O N
a 2e I p
L a
a W)
N
I
[S.Z$000
Q� N
N
7
�Z y�OOO
O N OD
7 N <
e,>m���
N N co
'O
Q
N
HN@'f
N
7 N
�
O
I�NfI
e
�}
aD
p8
8
O�
O
O
U.
Gp
Q
06Go
in
j
= Z
h � N
N.2
v N N O C4
cm
V
co
10O
Y
�
N N ww
Q
M
l7
N
mZvNI�+fO
co
Orj)D
v
N
a
PI
I
N N
M
N
Qp M VN)
SO
m
O
N
CFO(y
N
to
Q
M
N
}^
QQ O O N O
8
O C,
M N N O Q
r-tea"C4
.� NN$
M
10
Ol
7
CITY OF LA QUINTA CITY CITY
BALANCE SHEET 09/30196 FIXED LONG TERM
CITY ASSETS DEBT
ASSETS:
POOLED CASH
1,892,666.95
INVESTMENT T-BILL
9,866,027.78
PREMIUM/DISCOUNT ON INVESTMENT
27,219.25
LQHP CASH
BOND REDEMPTION CASH
BOND RESERVE CASH
BOND PROJECT CASH
BOND ESCROW CASH
PETTY CASH
1,000.00
ICMA DEFERRED COMPENSATION
561,248.30
CASH 3 INVESTMENT TOTAL
12,348,162.28
ACCOUNTS RECEIVABLE
31,993.75
LQHP-ACCOUNTS RECEIVABLE
INTEREST RECEIVABLE
100,679.35
LOAN/NOTES RECEIVABLE
DUE FROM OTHER AGENCIES
DUE FROM OTHER GOVERNMENTS
DUE FROM OTHER FUNDS
DUE FROM RDA
6,048,957.20
INTEREST ADVANCE -DUE FROM RDA
756,119.70
NSF CHECKS RECEIVABLE
298.65
ACCRUED REVENUE
TRAVEL ADVANCES
837.50
EMPLOYEE ADVANCES
PREPAID EXPENSES
RECEIVABLE TOTAL
6,938,8W.15
WORKER COMPENSATION DEPOSIT
RENT DEPOSITS
RDA
6,846,599.09
8,376.63
297,12
396,356.12
13,196,902.60
10,249.43
20,458,780.99
64,800.23
4.523.57
95,445.00
551,038.04
250,014.50
965,821.34
RDA RDA FA
FIXED LONG TERM FINANCING LONG TERM
ASSETS DEBT AUTHORITY DEBT
437,006.05
706,712.11
1,143,718.16
GRAND
TOTAL
8
7.9%,
UTILITY DEPOSITS
75.00
75.
MISC. DEPOSITS
2,100.00
2,100.00
DEPOSITS TOTAL
2,175.00
2,175.00
GENERAL FIXED ASSETS
15,981,208.00
11,526,745.05
27,507,953.05
AMOUNT AVAILABLE TO RETIRE L/T DEBT
2,340,653.00
2,340,853.00
AMOUNT TO BE PROVIDED FOR L/T DEBT
_ _ _
298,816.00 91,539,027.86
8,200,000.00 100,037,843.86
TOTAL OTHER ASSETS
15,981,208.00
298,816.00 11,526,745.06 93,879,680.86
8,200,000.00 129,886,449.91
TOTAL ASSETS
19,289,223.43 15,981,208.00
298,816.00 21,424,602.33 11,526,745.05 93,879,680.86
1,143,718.16 8,200,000.00 171743,993.83
LIABILITY
ACCOUNTS PAYABLE
165,432.00,
350,760.03
DUE TO OTHER AGENCIES
51,074.18
DUE TO OTHER FUNDS
551,038.04
INTEREST ADVANCE -DUE TO CITY
ACCRUED EXPENSES
PAYROLL LIABILITIES
726.73
STRONG MOTION INSTRUMENTS
1,750.10
FRINGE TOED LIZARD FEES
95,995.40
SUSPENSE
1,132.47
DUE TO THE CITY OF LA QUINTA
PAYABLES TOTAL
316,110.88
901,798.07
ENGINEERING TRUST DEPOSITS
75,818.76
SO. COAST AIR QUALITY DEPOSITS
ARTS IN PUBLIC PLACES DEPOSITS
102,534.52
LQHP DEPOSITS
14,231.00
DEVELOPER DEPOSITS
170,634.71
MISC. DEPOSITS
1,063.00
AGENCY FUND DEPOSITS
780,904.35
ICMA-DEFERRED COMP DEPOSITS
_ 561,248.30 - --
- - -
TOTAL DEPOSITS
1,692,403.64
14,231.00
DEFERRED REVENUE
OTHER LUMLTTIES TOTAL
COMPENSATED ABSENCES PAYABLE 298,816.00
DUE TO THE CITY OF LA QUINTA
6,805,078.11
NOTE DUE TO MURPHY, DALES, LANE
DUE TO COUNTY OF RIVERSIDE
11,925,575.00
DUE TO C.V. UNIFIED SCHOOL DISTRICT
11,797,367.75
DUE TO DESERT SANDS SCHOOL DISTRIC'
1,276,660.00
BONDS PAYABLE
62,075,000.00 8,200,000.00
TOTAL LONG TERM DEBT
298,816.00 93,879,680.86 8,200,000.00
TOTAL LIABILITY 2,008,514.52 298,816.00 916,029.07 93,879,680.86 8,200,000.00
EQUITY -FUND BALANCE
TOTAL LIABILITY i EQUITY
516,192.03
51,074.18
551,038.04
726.73
1,750.10
95,995.40
1,132.47
1.217.908.95
75,818.76
102,534.52
14,231.00
170,834.71
' 1,063.00
780,904.35
561,2_48.30
1,706,634.64
298,816.00
6,805,078.11
11,925,575.00
11,797,367.75
1,276,660.00
70,275,000.00
102,378,496.86
105,303,040.45
17,280,708.91 15,981,206.00 20,508,573.26 11,526,745.05 1,143,718.16 66,440,953.38
19,289,223.43 15,981,208.00 298.818.00 21,424,802.33 _11. X 745.05 93.879.680.88 1,143,718.16 8,200,000.00 171,743,993.83
8
V
QUM&
of rt'►�
INVESTMENT ADVISORY BOARD
Meeting Date: November 13, 1996
TITLE:
Month End Cash Report - October 1996
BACKGROUND:
Correspondence and Written
Material Item A
This cash report is not a complete Treasury Report (exclude petty cash, deferred
compensation and fiscal agent balances, ) but would report in a timely fashion
selected cash balances.
RECOMMENDATION:
Information item only.
n M. Falconer, Finance Director
City of La Quinta
Month End Cash Report - See Footnote
October 31, 1996
Wells Fargo
Wells Fargo
Wells Fargo
City
RDA
Description
Checking
Housing
Money Market
LAIF
LAIF
Investments
Total
Beginning Balance - 10/30/96
31,727.97
18,595.16
195,279.76
4,355,717.04
4,560,866.79
9,898,254.34
19,060,441.06
Deposits
Daily Deposit
65,744.78
65,744.78
Interest on T-Note
162,500.00
162,500.00
Transfers
100,000.00
(100,000.00)
0.00
Disbursements
Payroll Support Checks
(68,963.44)
(68,963.44)
Payroll Checks - #14748 -14821
(24,304.42)
(24,304.42)
Payroll Direct Deposit
(49,215.21)
(49,215.21)
Accounts Payable Checks - #26876-27027
346,889.64
_
346,889.64
Ending Balance per books
357,644.74
18,595.16
323,524.54
4,355,717.04
4,560,866.79
9,898,254.34
18,799,313.13
Add Back - Accts Pay Chks
346,889.64
346,889.64
Adjusted Balance
(10,755.10)
18,595.16
323,524.54
4,355,717.04
4,560,866.79
9,898,254.34
19,146,202.77
_
Estimated Interest Accruals
May
June
12,512.00
12,512.00
July
22,816.100
22,816.00
August
22,816.00
22,816.00
September
22,080.00
22,080.00
October
21,073.00
21,411.00
22,816.00
65,300.00
Adjusted Balances after accruals
10 755.10
18 595.16
323 524.54
4 376 790.04
4 582 277.79
10 001 294.34
19 291 726.77
Investment Class 331,364.60 8,959,067.83 10,001,294.34 19,291,726.77
Percentages 1.7177% _ 46.4399% 51.84240A 100.00 0 I
The following report is a special purpose report which has been prepared at the request of the
Investment Advisory Board. This report was created because the Finance Department cannot prepare
the Treasurers report for the month end before the 2nd Wednesday of each month (e.g. June report for
the July meeting). As a result, the IAB does not receive the Treasurers Report until approximately 1 1/2
months after the date of the report (e.g. June report for the August meeting).
The report is prepared on a monthly basis from the Daily Cash Report. The purpose of this report is for
staff to project daily cash needs and invest excess cash. This report does not include all investments of
the City, RDA and Financing Authority.
Specifically excluded from this report are the Petty Cash , Deferred Compensation, and Fiscal Agent
accounts. These accounts are included in the Treasurers Report.
In addition, the percentage numbers in this report are for information only. These percentages should
not be used to compare the maximum allowable percentages allowed in the investment policy because
this report does not include all investments and is not prepared from the reconciled book balances.
.000
V
OF TNT
INVESTMENT ADVISORY BOARD
Meeting Date: November 13, 1996
TITLE:
Investment Liquidity and
Anticipated Revenues
BACKGROUND:
Correspondence and Written
Material Item B
The Government Code requires that the Treasurer make a finding that sufficient
investment liquidity and anticipated revenues are available to meet the pools
expenditure requirements for the next six months.
Staff is in the process of creating a report that will become part of the monthly
Treasurers Report to document this certification.
Staff welcomes input from Board Members, who have a format that can be
incorporated into the final report.
RECOMMENDATION:
For informational purposes only.
n M. Falconer, Finance Director
a� •C9
OZ
U
OF TNti
INVESTMENT ADVISORY BOARD
Meeting Date: November 13, 1996
TITLE:
Pooled Money Investment Board Report
BACKGROUND:
Correspondence and Written
Material Item C
Attached please find a copy of the August 1996 Pooled Money Investment Board
Report.
RECOMMENDATION:
Information item only.
n M. Falconer, Finance Director
MATT FONG
August 1996
August 1996
LOCAL AGENCY
INVESTMENT FUND
October 1996
Over the years the question
has been asked as to whether LAIF
funds are borrowable. California
Government Code 16929.3, states
that "moneys placed with the
treasurer for deposit in the Local
Agency Investment Fund by cities,
counties, special districts, nonprofit
corporations, or qualified quasi -
governmental agencies shall not be
subject to impoundment or seizure
by any state official or state agency."
Although LATE funds have
not been considered borrowable, the
question still persisted, can LAW
funds be borrowed?
In order to remove any doubts
regarding this issue, State Treasurer
Matt Fong sponsored legislation to
change LAIF's enabling legislation to
include the statement, "transfer or loan
pursuant to Sections 16310,16312, or
16313."
This change was approved and
is now part of LAlF's enabling legis-
lation.
Sections 16310,16312, and 16313
mentioned in the legislative changes refer
to AB 55 loans and GF loans. You will
notice these as specific catagories on the
Selected Investment Data report you
receive each month.
AB 55 Loans are named for
Assembly Bill 55. These loans are
made from the pool to state agencies
which have pre -approved authority
to issue bonds for specific projects.
The AB 55 loan program allows an
agency to borrow money for up-
front and progress expenses when
funding a specific project. Toward
the end of the project construction,
the already approved bond issue is
brought to market, the proceeds of
which are used to pay off principal
and interest due on the AB 55 loan.
This method eliminates the need
for an arbitrage tracking system,
had the bonds been sold "up front."
The maximum term for AB 55 loans
is 364 days, with many retired
earlier.
General Fund Loans are loans
made by the Pool to the General
Fund in anticipation of evening out
cash flow. The average life of these
loans is well below 30 days. Unlike
the on -going AB loan program,
General Fund loans are much more
infrequently requested.
The answer to this frequently asked question is very important and can make the
difference between successful and unsuccessful transfer of funds.
The State Treasurer's Office (LAIF) has banking relationships and accounts with
the following banks:
BANK OF AMERICA
SANWA BANK
UNION BANK OF CALIFORNIA
U.S. BAND
If you have an account with one of these banks, an interbranch transfer can take
place. If you do not have an account with one of these banks, you will need to arrange
for your bank to wire funds into LAIF's account at one of these banks. LAIF will have
the corresponding bank you use for deposits listed on the LAIF system and will use the
SAME bank to wire funds back to your account at your bank when making a with-
drawal. Most banks should have a corresponding relationship with one or more of these
banks. If you change your bank/s or account number/s, please let the LAIF know in
advance of transfers.
STATE OF CALIFORNIA
STATE TREASURER'S OFFICE
POOLED MONEY IlWESTMENT BOARD REPORT
AUGUST 1996
Table of Contents
STJNIII4ARY...........................................».................................................»...»...»..1
SELECTED INVESTMENT DATA....................................................................2
PORTFOLIO COMPOSITION...........................................................................3
INVESTMENT TRANSACTIONS......................................................................4
TIMEDEPOSITS................................................................................................16
DEMAND BANK DEPOSITS............................................................................18
POOLED MONEY INVESTMENT BOARD DESIGNATION .....................19
POOLED MONEY INVESTMENT ACCOUNT
SUMMARY OF INVESTMENT DATA
A COMPARISON OF AUGUST 1996 WITH AUGUST 1995
(Dollars in Thousands)
Average Daily Portfolio
$28,1569866
$2592610428
+ S298959438
Accrued Earnings
$1339116
$126,448
+ $6,668
Effective Yield
5.566
5.910
- .344
Average Life —Month End (m days)
259
300
- 42
Total Security Transactions
Amount
$15IM19484
$2493239070
- S894419M
Number
391
564
- 173
Total Time Deposit Transactions
Amount
$343400
$1941,695
+ 1489505
Number
26
21
+ 5
Average Workday Investment Activity
$7379486
$19065,990
- $3289504
Prescribed Demand Account Balances
For Services
$126,379
$142,310
- $15,931
For Uncollected Funds
$157,925
$1559891
+ $21,034
—1—
MATTFONG
STATE TREASURER
STATE OF CALIFORNIA
INVESTMENT DIVISION
SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OM=D)
Change in
August 31,1996 Percent From
Tyne of Security Amount Percent Previous Month
Governments
Bills
294019069
8.83
+
.85
Bonds
0
0
0
Notes
54939797
19.48
+
.72
Strips
309,526
1.14
-
.28
Total Governments
8,004,392
29.45
+
1.29
Federal Agency Coupons
19525,261
5.61
+
1.21
Certificates of Deposit
591651,017
19.00
+
.04
Bank Notes .
9609107
3.54
+
.07
Bankers Acceptances
2999198
1.10
-
.08
Repurchases
2009000
.73
+
.12
Federal Agency.Discount Notes
3749005
1.38
+
.71
Time Deposits
340P95
1.25
0
GNMA's
41,059
.02
0
Commercial Paper
618079890
25.05
+
3.17
FHLMC
33,888
.13
0
Corporate Bonds
29027,981
7.46
-
.07
Pooled Loans
19740,650
6.40
+
.59
GF Loans
1011,700
.37
-
7.06
Other
0.
0
0
Reversed Repurchases
-405ZOO
-1.49
-
.01
Total, All Types
$279,178,643
100
INVESTMENT ACTIVITY
Pooled Money
Other
Time Deposits
TOTALS
PMIA Monthly Average
Effective Yield
Year to Date Yield for
Last Day of Month
August 1996
July 1996
Number
Amount
Number
Amount
391
$ 1SA919484
444
$ 181,629,624
11
$ 2169075
7
$ 272609
26
$ 343.200
33
$ 341,190
429
$ 169440,759
484
$ 18,9981,423
5.566
5.587
5.576 5.587
-2-
Pooled Money Investment Account
Portfolio Composition
$27.18 Billion
Loans Reverses
Corporate
6.77% -1.49%
ua1 mWi a
Acceptances CD's/BN's
1.10% 22.54%
isuries
45%
Time Deposits
1.25%
lortgages 0.15%
icies
9%
8/31 /96
® Treasuries
® Time Deposits
■ Mortgages.
® Agencies
■ CD's/BN's
® Bankers Acceptances
■ Repo
• Commercial Paper
® Corporate Bonds
0 Reverses
-3-
EFFECTIVE,;
YIELD ;,
08/01/96 SALE c/
Treas
Notes
5.875%
07/31/97
5.630
$50,000
1
7,656.49
5.708
Treas
Notes
5.250%
12/31/97
5.630
17,492
1
2,665.18
5.708
FNMA
5.470%
11/14/96
5.400
40,600
2
12,060.00
5.475
FNMA
5.470%
11/14/96
5.400
40,600
2
12,060.00
5.475
FNMA
5.300%
03/11/98
5.400
20,000
2
5,880.00
5.475
REDEMPTION
CB
FMCC
8.875%
08/01/96
4.650
6,200
1036
872,680.14
4.650
CD
RB Canada
5.020%
08/01/96
5.010
20,000
162
450,919.84
5.079
CP
Salomon
08/01/96
5.700
50,000
1
7,916.50
5.779
CP
Conagra
08/01/96
5.380
50,000
2
14,944.44
5.456
CP
Conagra
08/01/96
5.380
50,000
2
14,944.44
5.456
MTN
GMAC
8.250%
08/01/96
6.830
15,000
744
2,118,900.00
6.830
PURCHASE
cl
Treas
Notes
6.375%
05/15/99
5.550
41,169
Treas
Notes
6.375%
05/15/99
5.550
50,000
Treas
Notes
6.375%
05/15/99
5.550
50,000
Treas
Notes
6.375%
05/15/99
5.550
50,000
PURCHASE
CP
GECC
12/30/96
5.450
50,000
CP
GECC
12/30/96
5.450
50,000
08/02196 SALE
Treas
Notes
6.000%
05/31/98
6.049
40,000
57
439,395.49
7.052
Treas
Notes
6.000%
05/31/98
6.049
50,000
63
608,518.44
7.070
Treas
Notes
6.000%
05/31/98
6.049
50,000
63
608,518.44
7.070
Treas
Strip Cpns
11/15/96
5.390
30,000
1261
4,638,300.00
5.390
Treas
Strip Cpns
11/05/96
5.390
50,000
1261
7,730,500.00
5.390
Treas
Strip Cpns
11 /15/97
5.902
10,000
1092
1,209,600.00
5.010
SALE c/
Treas
Notes
6.375%
05/15/99
5.550.
41,169
1
6,308.19
5.627
Treas
Notes
6.375%
05/15/99
5.550
50,000
1
7,661.16
5.627
Treas
Notes
6.375%
. 05/15/99
5.550
50,000
1
7,661.16
5.627
REDEMPTION
CD
RaboBank
5.340%
08/02/96
5.330
15,000
121
268,818.87
5.405
CP
Smith Barney
08/02/96
5.350
47,000
3
20,954.17
5.426
CP
Smith Barney
08/02/96
5.350
50,000
3
22,291.67
5.426
CP
Text Fin
-
08/02/96
5.540
16,112
43
106,616.68
5.654
—4—
08/02/96 PURCHASE
CD
Hong Kong
CD
Hong Kong
CD
Hong Kong
CP
GMAC
CP
GMAC
CP
GMAC
CP
GMAC
CP
Salomon
CP
FMCC
CP
FMCC
CP
Conagra
CP
Conagra
08/05/96 NO REDEMPTIONS
08/05/96 PURCHASE
CP
FMCC
08/06/96 REDEMPTION
BA
Fst Chic
BA
Deutsche Bk
CP
Amer Home
CP
Amer Home
CP
Unocal
PURCHASE
c/
Treas
Notes
Treas
Notes
FFCB
FNMA
FNMA
Treas
Strip Cpns
Treas
Notes
Treas
Notes
PURCHASE
BN
BN
CD
CD
CD
CD
CD
CD
FR
5.550% 01/29/97
5.550
15,000
5.550% 01/29/97
5.550
50,000
5.550% 01/29/97
5.550
50,000
09/03/96
5.320
50,000
09/03/96
5.320
50,000
09/03/96
5.320
50,000
09/03/96
5.320
50,000
09/03/96
5.360
50,000
12/02/96
5.360
50,000
12/02/96
5.360
50,000
12/02/96
5.470
50,000
12/02/96
5.470
50,000
01/02/97 5.340 50,000
08/06/96
5.260
16,500
88
212,153.33
5.402
08/06/96
5.220
6,030
109
95,317.58
5.377
08/06/96
5.290
10,000
70
102,861.11
5.419
08/06/96
5.290
50,000
70
514,305.56
5.419
08/06/96
5.490
15,000
92
210,450.00
5.645
7.125%
09/30/99
7.125%
09/30/99
5.320%
09/30/96
6.750%
04/22/97
6.750%
01 /19/01
11/15/96
5.250%
12/31 /97
5.125%
02/28/98
B/A
5.660%
06/30/97
B/A
5.660%
06/30/97
Hong Kong
5:650%
06/30/97
Hong Kong
5.650%
06/30/97
Midland
5.650%
06/30/97
Midland
5.650%
06/30/97
RB Canada
5.650%
06/30/97
Tokyo-Mits
5.760%
06/30/97
FFCB
5.930% -
07/01/97
FFCB
5.500%
08/01/97
5.230
5.230
5.240
5.240
5.240
5.240
5.240
5.240
5.660
5.660
5.650
5.650
5.650
5.650
5.640
5.760
5.699
5.500
46,972
50,000
9,720
10,000
28,000
22,000
17,045
16,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
100,000
50,000
20,000
—5-
08/06/96 PURCHASE
FR
FFCB
5.500%
08/01/97
5.500
50,000
FHLB
5.865%
06/10/97
5.754
14,160
FHLB
4.300%
06/30/97
5.850
10,000
FNMA
5.860%
07/03/97
5.695
20,410
Treas
Bills
06/26/97
5.260
50,000
Treas
Bills
06/26/97
5.260
50,000
Treas
Bills
06/26/97
5.265
50,000
Treas
Bills
06/26/97
5.265
50,000
BA
B/A
12/26/96
5.350
15,000
BA
Chase
12/27/96
5.330
18,100
BA
B/A
01/29/97
5.370
31,000
BN
B/A
5.650%
06/30/97
5.650
50,000
BN
B/A
5.650%
06/30/97
5.650
50,000
CD
Union Bk/Cal
5.620%
02/28/97
5.620
50,000
CD
Union Bk/Cal
5.620%
02/28/97
5.620
50,000
CD
Union Bk/Cal
5.620%
03/27/97
5.620
50,000
CD
Union Bk/Cal
5.620%
03/27/97
5.620
50,000
CD
Dresdner
5.650%
06/30/97
5.640
25,000
Disc Notes
FHLB
02/27/97
5.270
15,000
Disc Notes
FNMA
06/30/97
5.330
50,000
Disc Notes
FNMA
06/30/97
5.330
50,000
Disc Notes
FNMA
06/30/97
5.330
50,000
Disc Notes
FNMA .
06/30/97
5.330
50,000
Treas
Bills
06/26/97
5.270
50,000
Treas
Bills
06/26/97
5.270
50,000
Treas
Bills
06/26/97
5.270
50,000
Treas
Bills
06/26/97
5.270
50,000
CP
GMAC
01/29/97
5.390
50,000
CP
GMAC
01/29/97
5.390
50,000
CP
GMAC
01/29/97
5.390
50,000
CP
GMAC
01/29/97
5.390
50,000
CP
Heller
10/08/96
5.390
50,000
BA
B/A
12/03/96
5.320
6,000
CD
Union Bk/Cal
5.680%
06/30/97
5.680
50,000
CP
Union
01/29/97
5.410
50,000
Disc Note
FNMA
02/28/97
5.260
50,000
Disc Note
FNMA
02/28/97
5.260
25,000
Treas
Bills
06/26/97
5.275
50,000
Treas
Notes
5.625%
06/30/97
5.604
50,000
Treas
Notes
5.625%
06/30/97
5.604
50,000
Treas
Note
5.625%
06/30/97
5.604
50,000
Treas
Notes
5.625%
06/30/97
5.604
50,000
Disc Note
FNMA
06/30/97
5.320
50,000
CP
Bear
-
09/09/96
5.300
5,000
CP
Bear
09/09/96
5.300
50,000
CP
Bear
09/10/96
5.300
50,000
CP
Bear
09/10/96
5.300
50,000
CD
Nat W.Mstr
5.390%
09/30/96
5.330
50,000
CD
Nat W.Mstr
5.390%
09/30/96
5.330
50,000
CD
Nat W.Mstr
5.390%
09/30/96
5.330
26,000
I-M
08/06/96 PURCHASE
CP Chase 01/02/97 5.390
CD W Deutsche 5.370% 10/04/96 5.350
08/07/96 SALE c/
Treas
Notes
Treas
Notes
REDEMPTION
BN
NB Detroit
BN
NB Detroit
BN
Nations
Disc Notes
World
Disc Notes
World
Disc Notes
World
PURCHASE
BN
B/A
CP
Assoc
CP
Assoc .
CP
Assoc
CP
Assoc
CP
Conagra
CP
Bear
CP
Bear
CP
SRAC
CP
GECC
CP
GECC
08/08/96 SALE c/
FFCB
FNMA
FNMA
Treas
Strip Cpns
Treas
Notes
Treas
Notes
REDEMPTION
BA
Union
CD
Sanwa Cal
CP
Assoc
CP
Assoc
CP
Assoc
CP
Assoc
50,000
50,000
7.125%
09/30/99
5.230
46,972
1
7,037.11
5.302
7.125%
09/30/99
5.230
50,000
1
7,490.67
5.302
5.350%
08/07/96
5.420
.15,000
61
137,742.12
5.495
5.350%
08/07/96
5.420
50,000
61
459,140.39
5.495
5.420%
08/07/96
5.420
50,000
61
459,194.44
5.495
08/07/96
5.160
35,000
107
536,783.33
5.313
08/07/96
5.160
50,000
107
766,833.33
5.313
08/07/96
5.160
50,000
107
766,833.33
5.313
5.510%
02/28/97
5.510
50,000
08/08/96
5.140
50,000
08/08/96
5.140
50,000
08/08/96
5.140
50,000
08/08/96
5.140
50,000
08/30/96
5.420
30.000
09/30/96
5.300
50,000
10/01 /96
5.300
40,000
01/02/97
5.340
50,000
01/02/97
5.340
50,000
01/02/97
5.340
50,000
5.320%
09/03/96
5.240
9,720
2
2,797.58
5.312
6.750%
04/22/97
5.240
2,929
2
2,929.16
5.312
5.875%
01 /09/01
5.240
28,000
2
7,743.56
5.312
11/15/96
5.240
22,000
2
6,180.29
5.312
5.250%
12/31/97
5.240
17,045
2
4,849.91
5.312
5.125%
02/28/98
5.240
16,000
2
4,610.62
5.312
08/08/96
5.260
10,000
112
163,644.44
5.421
5.430% 08/08/96
5.430
100,000
49
739,083.33
5.505
08/08/96
5.140
50,000
1
7,138.89
5.212
08/08/96
5.140
50,000
1
7,138.89
5.212
08/08/96
5.140
• 50,000
1
7,138.89
5.212
08/08/96
5.140
50,000
1
7,138.89
5.212
—7—
08/08/96 PURCHASE
FNMA
FNMA
FNMA
FNMA
CP
GECC
CID
GECC
BA
Tokyo-Mits
BN
B/A
BN
B/A
CD
CIBC
CID
GECC
CP
GECC
CID
GECC
CID
GECC
CID
SRAC
CID
GMAC
CID
GMAC
CD
Midland
CD
Midland
PURCHASE c/
Treas
Note
Treas
Note
Treas
Note
PURCHASE
CID
Bear
CID
GECC
CID
GECC
BA
Chase
BA
Montreal
CD
Deutsche
CD
Deutsche
08/12/96 SALE c/
Treas
Note
Treas
Note
Treas
Note
REDEMPTION
CID
Heller
MTN
AT&T
5.860%
08/08/97
5.740
13,000
5.860%
08/08/97
5.740
50,000
5.860%
08/08/97
6.011
50,000
5.860%
08/08/97
6.011
50,000
01/29/97
5.390
50,000
01/29/97
5.390
50,000
09/30/96
5.360
28,000
5.520%
03/27/97
5.520
50,000
5.520%
03/27/97
5.520
10,000
5.340%
08/09/96
5.340
50,000
95
704,583.33
5.414
08/09/96
5.270
50,000
77
563,597.22
5.404
08/09/96
5.270
50,000
77
563,597.22
5.404
08/09/96
5.300
35,000
98
504,972.22
5.452
08/09/96
5.300
50,000
98
721,388.89
5.452
08/09/96
5.300
50,000
99
728,750.00
5.453
08/09/96
5.300
50,000
102
750,833.33
5.455
08/09/96
5.300
50,000
102
750,833.33
5.455
5.330%
08/09/96
5.330
50,000
113
836,513.89
5.404
5.330%
08/09/96
5.330
50,000
113
836,513.89
. 5.404
6.000% 05/31 /98 5.140 50,000
6.000% 05/31 /98 5.140 50,000
6.000% 05/31 /98 5.140 1,729
01/29/97
5.400
50,000
01 /10/97
5.370
50,000
01 /10/97
5.370
3,000
01 /28/97
5.320
18,900
01 /10/97
5.320
10,000
5.460% 01 /09/97
5.440
50,000
5.460% 01/09/97
5.440
50,000
6.000% 05/31 /98 5.140 50,000 3 21,049.16 5.211
6.000% 05/31 /98 5.140 50,000 3 21,049.16 5.211
6.000% 05/31 /98 5.140 1,729 3 727.88 5.211
08/12/96 5.420 25,000 31 116,680.56 5.521
4.930% 08/12/96 6.630 5,000 693 617,215.27 6.800
—8—
08/12196 PURCHASE
MTN GMAC
5.700% 12/22/97
6.079
15,450
CD W Deutsche
5.760% 01/15/97
5.480
25,000
CP Assoc
08/13/96
5.250
50,000
CP Heller
09/11/96
5.370
50,000
CP Union
01/04/97
5.380
35,000
CP GMAC
01/24/97
5.400
50,000
08/13/96 REDEMPTION
CD US Oregon
5.350% 08/13/96
5.350
50,000 54 401,250.00 5.424
CP Assoc
08/13/96
5.250
50,000 1 7,291.67 5.323
CP Heller
08/13/96
5.420
25,000 32 120,444.44 5.521
PURCHASE
CP GMAC
01/13/97
5.400
25,000
CP B/A
02/28/97
5.360
50,000
CP B/A
02/28/97
5.360
50,000
08/14/96 REDEMPTION
CD
CommerzBk
5.430%
08/14/96
5.370
40,000
55
328,491.07
5.449
CD
Nat W.Mstr
5.400%
08/14/96
5.400
10,000
56
84,000.00
5.475
CD
Montreal
5.330%
08/14/96
5.330
17,000
100
251,694.44
5.404
CD
Montreal
5.330%
08/14/96
5.330
50,000
100
740,277.78
5.404
CP
Unocal
08/14/96
5.450
18,550
96
269,593.33
5.607
PURCHASE
CD
Deutsche
5.480%
01 /13/97
5.460
50,000.
08/15/96 RRS
Treas
Note
5.250%
01/31/01
4.950
25,000
Treas
Note
5.250%
01/31/01
4.950
50,000
Treas
Note
5.250%
01/31/01
4.950
50,000
Treas
Note .
5.250%
01/31/01
4.950
50,000
REDEMPTION
CD
US Oregon
5.340%
08/15/96
5.340
25,000
30
111,250.00
5.414
CD
US Oregon
5.340%
08/15/96
5.340
50,000
30
222,500.00
5.414
CD
US Oregon
5.340%
08/15/96
5.340
50,000
30
222,500.00
5.414
CD
US Oregon
5.340%
08/15/96
5.340
50,000
30
222,500.00
5.414
CP
Unocal
08/15/96
5.430
20,000
90
271,500.00
5.581
08/15/96 RRP
Treas
Notes
5.250%
01/31/01
4.890
Treas
Notes
5.250%
01/31/01
4.890
Treas
Notes
5.250%
01/31/01
4.890
Treas
Notes
5.250%,
01/31/01
4.890
PURCHASE
gl
CD
US Wash
5.350%
11 /15/96
5.350
CD
US Wash
5.350%
11 /15/96
5.350
CD
US Oregon
5.350%
11 /15/96
5.350
CD
US Oregon
5.350%
11/15/96
5.350
PURCHASE
CID
Bear
01/29/97
5.400
CD
Deutsche
5.480%
01 /13/97
5.470
CD
Deutsche
5.480%
01 /13/97
5.470
CD
Deutsche
5.480%
01/13/97
5.470
CP
GECC
01/29/97
5.370
CID
GECC
01/29/97
5.370
CID
GECC
01/29/97
5.370
08/16/96 NO REDEMPTIONS
08/16/96 PURCHASE
CD RaboBank
CD RaboBank
CD Bkrs Trst
08/19/96 NO PURCHASES
08/20/96 NO REDEMPTIONS
08/20/96 PURCHASE cl
CD ABN Amro
Treas Notes
5.500% 01/29/97 5.480
5.500% 01/29/97 5.480
5.480% 01 /30/97 5.470
6.120% 07/14/97 5.200
5.500% 11 /15/98 5.140
08/21/96 SALE c/
CD ABN Amro 6.120% 07/14/97 5.200
Treas Notes 5.500% 11 /15/98 5.140
25,000 30
(98,818.75) -4.957
50,000 30
(197,637.50) -4.957
50,000 30
(197,637.50) -4.957
50,000 30
.(197,637.50) -4.957
25,000
50,000
50,000
50,000
50,000
6,000
50,000
50,000
25,000
50,000
50,000
25,000
50,000
35,000
26,000
25,452
26,000 1 3,611.11 5.272
25,452 1 3,569.44 5.211
—10—
08121196 REDEMPTION
CD
Soc Gen
5.350%
08/21/96
5.350
25,000
CD
Soc Gen
5.350%
08/21/96
5.350
50,000
CD
Nova Scotia
5.330%
08/21/96
5.330
100,000
CP
Salomon
08/21/96
5.500
50,000
CP
Assoc
08/21/96
5.380
50,000
CP
Assoc
08/21/96
5.380
50,000
PURCHASE
cl
Treas
Notes
6.250%
07/31/98
5.070
1,215
Treas
Notes
6.250%
07/31/98
5.070
50,000
Treas
Notes
6.250%
07/31/98
5.070
50,000
PURCHASE
CD
Soc Gen
5.200%
08/28/96
5.200
20,000
CP
Salomon
08/28/96
5.260
50,000
CP
FMCC
08/30/96
5.140
5,000
CP
FMCC
08/30/96
5.140
50,000
CP
FMCC
08/30/96
5.140
50,000
CP
FMCC
08/30/96
5.140
50,000
08/22/96 SALE C/
Treas
Notes
Treas
Notes
Treas
Notes
REDEMPTION
BA
B/A
PURCHASE
c/
CD
ABN Amro
PURCHASE
CD
Deutsche
CD
Deutsche
CP
Assoc
CP
Assoc
CP
Hertz
CP
FMCC
CP
FMCC
6.250% 07/31/98 5.070 1,215
6.250% 07/31/98 5.070 50,000
6.250% 07/31/98 5.070 50,000
08/22/96 5.270 20,000
6.120% 07/14/97 5.200 36,000
5.250% 09/03/96
5.250
50,000
5.250% 09/03/96
5.250
50,000
08/23/96
5.160
32,000
08/23/96
5.160
50,000
09/03/96
5.190
43,000
09/03/96
5.190
50,000
09/03/96
5.190
50,000
100
371,527.78
5.424
100
743,055.56
5.424
114
1,687,833.33
5.404
43
328,472.22
5.613
61
455,805.56
5.504
61
455,805.56
5.504
1 169.00 5.140
1 6,957.17 5.140
1 6,957.17 5.140
111 324,983.34 5.431
—11—
EFFECTIVE
.: YIELD
08/23/96 SALE c/
CD ABN Amro 6.120% 07/14/97 5.200 36,000 1 5,055.56 5.272
REDEMPTION
BA
Citibank
08/23/96
5.240
10,000
92
133,911.11
5.384
BA
B/A
08/23/96
5.270
5,000
109
79,781.94
5.429
CP
Assoc
08/23/96
5.160
32,000
1
4,586.67
5.232
CP
Assoc
08/23/96
5.160
50,000
1
7,166.67
5.232
PURCHASE
CD
Deutsche
5.250% 09/03/96
5.250
50,000
CD
Deutsche
5.250% 09/03/96
5.250
50,000
CP
Assoc
08/26/96
5.120
20,000
CP
Assoc
08/26/96
5.120
50,000
CP
Assoc
08/26/96
5.120
50,000
CP
SRAC
08/29/96
5.150
50,000
CP
AT&T
09/03/96
5.170
30,000
08/26/96 REDEMPTION
CP
Assoc
08/26/96
5.120
20,000 3 8,533.33 5.193
CP
Assoc
08/26/96
5.120
50,000 3 21,333.33 5.193
CP
Assoc
08/26/96
5.120
50,000 3 21,333.33 5.193
PURCHASE c/
Treas
Notes
6.375%
05/15/99
5.250
21,000
Treas
Notes
6.750%
06/30/99
5.250
28,973
Treas
Notes
7.500%
12/31/96
5.260
5,000
Treas
Notes
7.500%
12/31/96
5.260
50,000
Treas
Notes
8.875%
11/15/97
5.260
24,877
Treas
Bills
01 /09/97
5.260
33,356
Treas
Bills
02/13/97
5.260
18,050
FHLB
6.563%
12/29/00
5.270
25,000
FHLB
6.100%
02/01/01
5.270
45,000
FNMA
5.470%
11/14/96
5.270
50,000
FNMA
5.470%
11/14/96
5.270
50,000
FNMA
5.300%
03/11/98
5.270
33,710
-12—
08/26196 PURCHASE
CP
CP
CP
CP
CP
CP
CP
CP
08/27/96 SALE c!
Assoc
08/27/96
5.270
50,000
Assoc
08/27/96
5.270
50,000
Assoc
08/27/96
5.270
50,000
Assoc
08/27/97
5.270
50,000
Country
09/03/96
5.280
30,000
Country
09/03/96
5.280
50,000
Smith Barn
09/03/96
5.260
50,000
Smith Barn
09/03/96
5.260
50,000
Treas
Notes
Treas
Notes
Treas
Notes
Treas
Notes
Treas
Notes
Treas
Bills
Treas
Bills
REDEMPTION
CP
Assoc
CP
Assoc
CP
Assoc
CP
Assoc
PURCHASE c/
Treas
Notes
Treas
Notes
Treas
Notes
Treas
Notes
Treas
Notes
Treas
Notes
CP
Assoc
CP
Assoc
CP
Assoc
CP
Assoc
08/28/96 SALE c/
Treas
Treas
Treas
Treas
Treas
Treas
6.375%.
05/15/99
5.250
21,000
1
3,060.17
5.322
6.750%
06/30/99
5.250
28,973
1
4,231.50
5.322
7.500%
12/31 /96
5.260
5,000
1
729.09
5.333
7.500%
12/31 /96
5.260
50,000
1
7,292.11
5.333
8.875%
11/15/97
5.260
24,877
1
3,770.54
5.333
8.875%
11/15/97
5.260
33,356
1
4,681.98
5.333
02/13/97
5.260
18,050
1
2,520.71
5.333
08/27/96
5.270
50,000
1
7,319.44
.5.343
08/27/96
5.270
50,000
1
7,319.44
5.343
08/27/96
5.270
50,000
1
7,319.44
5.343
08/27/96
5.270
50,000
1
7,319.44
5.343
7.375%
11/15/97
5.220
50,000
7.375%
11/15/97
5.220
50,000
6.750%
05/31 /99
5.220
18,080
6.750%
05/31 /99
5.220
50,000
6.125%
05/31/97
5.230
50,000
6.125%
05/31/97
5.230
50,000
08/28/96
5.240
50,000
08/28/96
5.240
50,000
08/28/96
5.240
50,000
08/28/96
5.240
50,000
Notes
6.125%
05/31/97
5.230
50,000
1
7,246.02
5.302
Notes
6.125%
05/31/97
5.230
50,000
1
7,246.02
5.302
Notes
7.375%
11/15/97
5.220
50,000
1
7,362.37
5.292
Notes
7.375%
11/15/97
5.220
50,000
1
7,362.37
5.292
Notes
6.750%
05/31/99
5.220
18,080
1
2,635.37
5.292
Notes
6.750%
05/31 /99
5.220
50,000
1 -
7,289.87
5.292
—13
08/28/96 REDEMPTION
BA
UB Calif
08/28/96
5.330
15,000
72
159,900.00
5.462
CD
Soc Gen
5.200%
08/28/96
5.200
20,000
7
20,222.22
5.272
CD
Hong Kong
5.390%
08/28/96
5.390
50,000
90
673,750.00
5.464
CD
Hong Kong
5.390%
08/28/96
5.390
50,000
90
673,750.00
5.464
CD
CIBC
5.360%
08/28/96
5.350
50,000
134
995,730.79
5.424
CD
Cr Suisse
5.340%
08/28/96
5.320
150,000
134
.2,970,550.16
5.393
BN
NationsBk
5.330%
08/28/96
5.330
25,000
97
359,034.72
5.404
BN
NationsBk
5.330%
08/28/96
5.330
50,000
97
718,069.44
5.404
CD
Nova Scotia
5.320%
08/28/96
5.310
100,000
128
1,888,065.89
5.383
CD
Soc Gen
5.320%
08/28/96
5.320
50,000
149
1,100,944.44
5.393
CD
Soc Gen
5.320%
08/28/96
5.320
50,000
149
1,100,944.44
5.393
CD
Nova Scotia
5.330%
08/28/96
5.330
100,000
149
2,206,027.78
5.404
CD
Deutsche
5.320%
08/28/96
5.310
50,000
149
1,098,919.50
5.383
CD
Deutsche
5.320%
08/28/96
5.310
50,000
149
1,098,919.50
5.383
CD
Bk Cal
5.350%
08/28/96
5.350
50,000
167
1,240,902.78
5.424
CID
Assoc
08/28/96
5.240
50,000
1
7,277.78
5.313
CID
Assoc
08/28/96
5.240
50,000
1
7,277.78
5.313
CID
Assoc
08/28/96
5.240
50,000
1
7,277.78
5.313
CP
Assoc
08/28/96
5.240
50,000
1
7,277.78
5.313
CID
Salomon
08/28/96
5.260
50,000
7
51,138.89
5.338
CID
Amer Exp
08/28/96
5.340
25,000
44
163,166.67
5.449
CID
Amer Exp
08/28/96
5.340
50,000
44
326,333.33
5.449
CID
Amer Exp
08/28/96
5.340
50,000
44
326,333.33
5.449
CID
Amer Exp
08/28/96
5.340
50,000
44
326,333.33
5.449
CID
Amer Exp
08/28/96
5.340
50,000
44
326,333.33
5.449
CID
GMAC
08/28/96
5.484
50,000
124
914,500.00
5.484
CID
GMAC
08/28/96
5.320
50,000
149
1,100,944.44
5.515
CID
GMAC
08/28/96
5.320
50,000
149
1,100,944.44
5.515
CID
Morg Stan
08/28/96
5.260
44,500
153
994,797.50
5.455
CID
Morg Stan
08/28/96
5.260
50,000
153
1,117,750.00
5.455
PURCHASE
FR
SBA
5.875% 09/25/21
5.875
3,084
CID
Assoc
08/29/96
5.380
50,000
CID
Assoc
08/29/96
5.380
50,000
CID
Assoc
08/29/96
5.380
50,000
CID
GECC
08/29/96
5.380
50,000
CID
GECC
08/29/96
5.380
23,000
08/29/96 REDEMPTION
CID
GECC
08/29/96
5.380
50,000
1
7,472.22
5.455
CID
GECC
08/29/96
5.380
23,000
1
3,437.22
5.455
CID
SRAC
08/29/96
5.150
50,000
6
42,916.67
5.226
CID
Assoc
08/29/96
5.380
50,000
1
7,472.22
5.455
CID
Assoc
08/29/96
5.380
50,000
1
7,472.22
5.455
CID
Assoc
08/29/96
5.380
50,000
1
- 7,472.22
5.455
BA
B/A
08/29/96
5.260
32,000
91
425,475.55
5.404
—14—
08/29/96 PURCHASE cl
CD
ABN Amro
6.120%
07/14/97
5.300
PURCHASE
FR
SBA
5.875%
08/25/21
5.875
CI'
Assoc
08/30/96
5.300
CID
Assoc
08/30/96
5.300
08/30/96 SALE
Treas
Bills
04/03/97
5.300
Treas
Bills
04/03/97
5.300
Treas
Bills
05/29/97
5.415
Treas
Bills
05/29/97
5.415
SALE cl
CD
ABN Amro
6.120%
07/14/97
5.300
REDEMPTION
BA
U/B Calif
08/30/96
5.330
BA
UB Calif
08/30/96
5.270
BN
Fst Chicago
5.320%
08/30/96
5.320
BN
Fst Chicago
5.320%
08/30/96
5.320
CD
Bk Calif
5.350%
08/30/96
5.350
CID
Assoc
08/30/96
5.300
CID
Assoc
08/30/96
5.300
CID
FMCC
08/30/96
5.140
CID
Conagra
08/30/96
5.420
CID
FMCC
08/30/96
5.140
CID
FMCC
08/30/96,.
5.140
CID
FMCC
08/30/96
5.140
CID
Heller
08/30/96
5.370
.. ; EFFECTNE
_YIELD
31,000
4,846
15,000
50,000
50,000
134
964,513.89
5.537
50,000
135
955,968.75
5.446
50,000
91
674,312.52
5.720
50,000
91
674,312.52
5.720
31,000
1.00
4,416.67
5.373
14,300
74
156,672.39
5.463
19,000
119
330,985.28
5.437
50,000
123
908,833.33
5.393
50,000
123
908,833.33
5.393
50,000
165
1,226,041.67
5.424
15,000
1
2,208.33
5.374
50,000
1
7,361.11
5.374
5,000
9
6,425.00
5.218
30,000
23
103,883.33
5.514
50,000
9
64,250.00
5.218
50,000
9
64,250.00
5.218
50,000
9
64,250.00
5.218
50,000
36
268,500.00
5.473
—15-
a/ The abbreviations indicate the type of security purchased or sold;
i.e., (U.S.) Bills, 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) Medium Term Notes (MTN).
b/ Purchase or sale yield based on 360 day calculation for discount obligations
and Repurchase Agreements.
_c/ Repurchase Agreement.
d/ Par amount of securites 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.
—16—
TIME DEPOSIT
NAME DEPOSIT YIELD PAR AMOUNT MATURITY
ALHAMBRA
East West Federal Bank 7/15/96 5.310 2,000,000.00 10/16/96
BEVERLY HILLS
City National Bank
07/29/96
5.550
10,000,000.00
01/28/97
City National Bank
08/07/96
5.230
10,000,000.00
11/05/96
City National Bank
08/21/96
5.350
20,000,000.00
02/19/97
CHICO
North State National Bank
05/20/96
5.350
500,000.00
11/20/96
Tri Counties Bank-
07/31/96
5.390
10,000,000.00
10/30/96
North State National Bank
07/09/96
5.610
2,000,000.00
01/07/97
Tri Counties Bank
07/08/96
5.530
15,000,000.00
01/07/97
North State National Bank
08/22/96
5.350
500,000.00
02/20/97
FRESNO
United Security Bank
06/28/96
5.230
1,500,000.00
09/26/96
United Security Bank
07/26/96
5.310
3,000,000.00
10/24/96
INGLEWOOD
Imperial Bank
06/12/96
5.350
10,000,000.00
09/10/96
Imperial Bank
06/13/96
5.330
15,000,000.00
09/11/96
Imperial Bank
06/21/96
5.310
11,000,000.00
09/19/96
Imperial Bank
07/02/96
5.270
11,000,000.00
10/01/96
Imperial Bank
07/18/96
5.340
15,000,000.00
10/16/96
Imperial Bank
07/30/96
5.350
5,000,000.00
10/28/96
Imperial Bank
08/05/96
5.310
10,000,000.00
11/04/96
Imperial Bank
08/07/96
5.310
20,000,000.00
11/06/96
Imperial Bank
08/14/96
5.200
20,000,000.00
11/13/96
LA MIRADA
Southern California Bank
07/03/96
5.400
5,000,000.00
10/01/96
Southern California Bank
07/16/96
5.330
5,000,000.00
10/16/96
LOS ANGELES
Preferred Bank
06/21/96
5.270
5,000,000.00
09/19/96
Preferred Bank
07/15/96
5.270
1,000,000.00
10/15/96
Preferred Bank
07/16/96
5.270
2,000,000.00
10/15/96
Preferred Bank
08/27/96
5.210
2,000,000.00
11/26/96
—17—
TIME DEPOSIT
NAME DEPOSIT YIELD , PAR AMOUNT MATURITY
MANTECA
Delta National Bank
05/22/96
5.340
1,000,000.00
11/18/96
OAKDALE
Oak Valley Community Bank
03/29/96
5.230
500,000.00
09/25/96
PETALUMA
Bank of Petaluma
05/13/96
5.360
1,000,000.00
11/12/96
REDDING
North Vally Bank
03/25/96
5.220
3,000,000.00
09/23/96
SACRAMENTO
Sanwa Bank of California
07/31/96
5.550
5,000,000.00
01/28/97
Sanwa Bank of California
08/20/96
5.310
50,000,000.00
02/19/97
Sanwa Bank of California
08/26/96
5.350
10,000,000.00
02/25/97
SAN FRANCISCO
Trans Pacific National Bank
03/22/96
5.350
800,000.00
09/18/96
SAN LUIS OBISPO
First Bank of San Luis Obispo
05/29/96
-5:350
1,500,000.00
11/26/96
First Bank of San Luis Obispo
07/11/96
5.630
1,000,000.00
01/07/97
First Bank of San Luis Obispo
08/15/96
5.180
2,000,000.00
11/13/96
First Bank of San Luis Obispo
08/06/96
5.440
2,600,000.00
02/04/97
SAN RAFAEL
West America Bank
07/26/96
5.320
25,000,600.00
10/24/96
West America Bank
08/02/96
5.270
25,000,000.00
10/31/96
SANTA ANA
Grand National Bank
07/02/96
5.200
95,000.00
10/01/96
VACAVILLE
Continental Pacific Bank
06/05/96
5.450
1,000,000.00
12/03/96
TOTAL TIME DEPOSITS AS OF AUGUST 27,1996 340,995,000.00
—18—
DEMAND BANK DEPOSITS
(000 omitted)
DAILY BALANCES
PER BANKS
WARRANTS
OUTSTANDING
1.
2.
184311
391219,968
3.
270,085
39180,184
4.
2709085
391809184
5.
270,085
39180,184
6. -
5759806
299909628
7.
3611,974
2,8699690
8.
2739604
29770,564
9.
234,393
29770,508
10.
2483,597
29833;597
11.
248,597
298339597
12.
2483,597
29833,597
13.
158,554
2,735,875
14.
142,476
297099139
15.
165,588
21579,128
16.
1959948
29714,230
17.
108,883
2,6709692
18.
108,883
2,6705,692
19.
1089883
296709692
20.
3059009
23,601449
21.
476,886
295783,371
22•
254,847
296059,384
23.
2179592
296639614
24•
3969041
296939,336
25.
3969041
23,693,336
26.
3969041
256939336
27.
3729517
2,638,059
28.
3899275
215889785
29•
3079182
29,5579468
30.
13%369
29541457
31.
2719,046
3,0519829
2719046
3,056403
at
AVERAGE DOLLAR DAYS
_
$ 62 9,556
a/ The prescribed bank balance for August was $284,303,000.00. This consisted
of $126,378,000.00 in compensating balances for services,159,782,000.00
uncollected funds and a deduction of $198579000.00 for April delayed deposit
credit.
—19—
DESIGNATION BY POOLED MONEY INVESTMENT BOARD
OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS
No. 1566
In accordance with Sections 16480 through 16480.8 of the Govemment Code, the Pooled Money Investment Board, at its
meeting on August 21,1996, 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 $135,465,000
bank accounts as Compensating Balance for Services
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 h
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)*
and 16602)*
Total
(1)
08/19/96
08/23/96
$
452,400,000
$
28,546,405,000
$ 340,995,000
$
28,887,400,000
(2)
08/26/96
08/30/96
$
(1,898,800,000)
$
26,647,605,000
$ 340,995,000
$
26,988,600,000
(3)
09/02/96
09/06/96
$
586,300,000
$
27,233,905,000
' $ 340,995,000
$
27,574,900,000
(4)
09/09/96
09/13/96
$
628,600,000
$
27,862,505,000
$ 340,995,000
$
28,203,500,000
(5)
09/16/96
09/20/96
$
2,767,400,000
$
30,629,905,000
$ 340,995,000
$
30,970,900,000
(6)
09/23/96
09/27/96
$
(1,012,600,000)
$
29,617,305,000
$ 340,995,000
$
29,958,300,000
(7)
09/30/96
10/04/96
$
(1,120,900,000)
$
28,496,405,000
$ 340,995,000
$
28,837,400,000
(8)
10/07/96
10/11/96
$
192,700,000
$
28,689,105,000
$ 340,995,000
$
29,030,100,000
(9)
10/14/96
10/1866
$
583,400,000
$
29,272,505,000
$ 340,995,000
$
29,613,500,000
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 $135,465,000
POOLED MONEY INVESTMENT BOARD:
Chairperson
Member
Dated: August 21, 1996
*Government Code Member
—20—
v _ �
OF TNti
INVESTMENT ADVISORY BOARD
Meeting Date: November 13, 1996
TITLE:
Reporting to the City Council - Status Update
BACKGROUND:
Correspondence and Written
Material Item E
Attached please find the correspondence relating to the Investment Advisory Board
Functions.
RECOMMENDATION:
For informational purpose only.
hn M. Falcon r, Finance Director
4
MEMORANDUM
TO: John M. Falconer, Finance Director
FROM: Mark Weiss, Assistant City Manager �I
DATE: November 4, 1996
RE: Request from Investment Advisory Board regarding Board Functions
Thank you for your memorandum of October 18, 1996 regarding the request by the
Investment Advisory Board (IAB) for Council clarification of the form of "reporting"
to the City Council.
Please be advised that this matter was scheduled to be considered by the City
Council as part of the Handbook for Commission, Boards, and Committees on
November 5, 1996. Unfortunately, due to scheduling requirements, the Handbook
had to be rescheduled to the November 19, 1996 City Council meeting. The
request of the IAB will be addressed at that time.
If you, or any of the IAB members have any questions, please let me know.
l
MEMORANDUM
TO: Mark Weiss, Assistant City Manager
FROM: John M. Falconer, Finance Director ljw----�
DATE: October 18, 1996
RE: Request from Investment Advisory Board for Ordiliance 2.70.30 - Board Functions
Item C.
The Investment Advisory Board made the following motion at the last Investment Advisory
Board Meeting held on October 9, 1996.
MOTION It was moved by Board Members Lewis/Frame that the Board direct staff for
clarification to confirm the Boards understanding that it is the Boards interpretation that the
Boards correspondence to City Council are the Investment Advisory Board minutes from each
meeting. If this is not sufficient, the Board should be directed immediately in writing as to an
appropriate outline. Motion carried unanimously.
The entire draft minutes have been attached for your review which can be found in Business
Session Item C.
ca r.#o.r d, I am forwarding on their request to you. The next Investment Board Merdipg
.:� .,. 4 �tfit'�res next a ?eihda
Ist
the Board w +�= tom` ` g
pacliae.woul+� need -.a response by Nove'Wobm er 7, 1996.
If I can provide in additional information please let me know. Thank you.
44
OF TNT
INVESTMENT ADVISORY BOARD
Meeting Date: November 13, 1996
TITLE:
Updated Investment Policies
BACKGROUND:
Correspondence and Written
Material Item D
On November 5, 1996 the City Council took action to approve the City of La
Quinta Investment Policies.
The City Council unanimously approved a change in the LAIF percentage from 50%
to 40%. This change will be reflected on the November 30, 1996 Treasury Report.
RECOMMENDATION:
Please use the updated Investment Policies in the future.
John M. Falconer; Finance Director
City of La Uinta
1996-97 Fiscal- Year
Investment Policy
CITY OF LA QUINTA
Investment Policy
Table of Contents
Section
Topic
Page
Executive Summary
2
1
General Purpose
4
II
Investment Policy
4
III
Scope
4
IV
Objectives
5
► Safety
► Liquidity
► Yield
V
Prudence
6
VI
Delegation of Authority
6
VII
Conflict of Interest
7
VIII
Authorized Financial Dealers and Institutions
7
► Broker/Dealers
► Financial Institutions
IX
Authorized Investments and Diversification
9
X
Investment Pools
9
XI
Collateralization
9
XII
Safekeeping and Custody
10
XIII
Interest Earning Distribution Policy
10
XIV
Maximum Maturities
10
XV
Internal Controls
10
XVI
Benchmark
12
XVII
Reporting Standards
12
XVIII
Investment of Bond Proceeds
13
XIX
Investment Advisory Board - City of La Quinta
13
XX
Investment Policy Adoption
13
Appendices Authorized Investments and Diversification 15
Municipal Code Ordinance 2.70 - Investment Advisory Board 16
Municipal Code Ordinance 3.08 - Investment of Moneys and Funds 17
Listing of Approved Financial Institutions 19
Broker/Dealer Questionnaire and Certification 20
Investment Pool Questionnaire 24
Segregation of Major Investment Responsibilities 28
Glossary 29
1
City of La Quinta
Investment Policy
Executive Summary
The general purpose of this Investment Policy is to provide the rules and standards
users must follow in investing funds of the City of La Quinta.
It is the policy of the City of La Quinta to invest all public funds in a manner which
will provide a diversified portfolio with maximum security while meeting daily cash
flow demands and the highest investment return in conformity to all state and local
statutes. This Policy applies to all cash and investments of the City of La Quinta,
La Quinta Redevelopment Agency and the La Quinta Financing Authority, hereafter
referred in this document as the "City".
The primary objectives, in order of priority, of the City of La Quinta's, investment
activity shall be:
Safety of principal is the foremost objective of the investment program.
Investments of the City of La Quinta shall be undertaken in a manner that
seeks to ensure the preservation of capital in the overall portfolio
The investment portfolio shall remain sufficiently liquid to meet all operating
requirements that may be reasonably anticipated.
The investment portfolio shall be designed with the objective of attaining a
market rate of return or yield throughout budgetary and economic cycles,
taking into account the investment risk constraints and liquidity needs.
Investments shall be made with judgment and care - under circumstances then
prevailing - which persons of prudence discretion, and intelligence exercise in the
management of their own affairs, not for speculation, but for investment,
considering the probable safety of their capital as well as the probable income to be
derived.
Authority to manage the City of La Quinta's investment portfolio is derived from
the City Ordinance. Management responsibility for the investment program is
delegated to the City Treasurer, who shall establish and implement written
procedures for the operation of the City's investment program consistent with the
Investment Policy. The Treasurer shall establish and implement a system of internal
controls to maintain the safety of the portfolio. In addition, the internal control
system will also insure the timely preparation and accurate reporting of the portfolio
financial information. The adequacy of these controls will be reviewed and reported
on annually by an independent auditor.
2
Investment responsibilities carry added duties of insuring that investments are made
without improper influence or the appearance to a reasonable person of
questionable or improper influence.
The City of La Quinta maintains a listing of financial institutions which are approved
for investment purposes. All Broker/Dealers and financial institutions selected by
the Treasurer to provide investment services will be approved by the City Manager
subject to City Council approval.
The Treasurer will be permitted to invest only in City approved investments up to
the maximum allowable percentages and, where applicable, through the bid process
requirements. Authorized investment vehicles and related maximum portfolio
positions are listed in Appendix - Authorized Investments and Diversification. At
least two bids will be required of investments in government securities.
Collateralization will be required for Certificates of Deposit in excess of $100,000.
Collateral will always be held by an independent third party with whom the City of
La Quinta has a current custodial agreement. Evidence of ownership must be
supplied to the City and retained by the City Treasurer.
The City of La Quinta shall require that each individual investment have a maximum
maturity of two years unless specific approval is authorized by the City Council. In
addition, the City's investment in the State Local Agency Investment Fund (LAIF) is
allowable as long as the average maturity does not exceed two years, unless
specific approval 'is authorized by the City Council. The City's investment in Money
Market Mutual funds is allowable as long as the average maturity does not exceed
60 days.
The City of La Quinta will use the six month U.S. Treasury Bill as a benchmark
when measuring the performance of the investment portfolio.
The Investment Policies shall be adopted by resolution of the La Quinta City Council
on an annual basis, The Investment Policies will be adopted before the end of June
of each year.
This Executive Summary is an overall review of the City of La Quinta Investment
Policies. Reading this summary does not constitute a complete review which can
only, be accomplished by reviewing all the pages.
3
4 z4a
78-495 CALLE TAMPICO — LA QUINTA, CALIFORNIA 92253 - (619) 777-7000
FAX (619) 777-7107
City of La Quinta
Statement of Investment Policy
July 1, 1996 through June 30, 1997
Adopted by the City Council on June 18, 1996, amended November 5, 1996
I GENERAL PURPOSE
The general purpose of this document is to provide the rules and standards users
must follow in administering the City of La Quinta cash investments.
II INVESTMENT POLICY
It is the policy of the City of La Quinta to invest public funds in a manner which will
provide a diversified portfolio with safety of principal while meeting daily cash flow
demands with the highest investment return . In addition, the Investment Policy
will conform to all State and local statutes governing the investment of public
funds.
III SCOPE
This Investment Policy applies to all cash and investments of the City of La Quinta,
City of La Quinta Redevelopment Agency and the City of La Quinta Financing
Authority, hereafter referred in this document as the "City' . These funds are
reported in the City of La Quinta Comprehensive Annual financial Report (CAFR)
and include:
All funds within the following fund types:
► General
► Special Revenue
► Capital Project
► Debt Service
► Internal Service
► Trust and Agency
► Any new fund types and fund(s) that may be created.
4
MAILING ADDRESS - P.O. BOX 150A - LA QUINTA, CALIFORNIA 92253 ���
IV OBJECTIVES
The primary objective, in order of priority, of the City of La Quinta's investment
activity shall be:
1. Safety
Safety of principal is the foremost objective of the investment program.
Investments of the City of La Quinta shall be undertaken in a manner that
seeks to ensure the preservation of capital in the overall portfolio in
accordance with the permitted investments. The objective will be to mitigate
credit risk and interest rate risk.
A. Credit Risk
Credit Risk - is the risk of loss due to the failure of the security issuer
or backer. Credit risk may be mitigated by:
► Limiting investments to the safest types of securities;
► Pre -qualifying the financial institutions, and broker/dealers,
which the City of La Quinta will do business; and
► Diversifying the investment portfolio so that potential losses on
individual securities will be minimized.
B. Interest Rate Risk
Interest Rate risk is the risk that the market value of securities in the
portfolio will fall due to changes in general interest rates. Interest rate
risk may be mitigated by:
► Structuring the investment portfolio so that securities mature to
meet cash requirements for ongoing operations, thereby
avoiding the need to sell securities on the open market prior to
maturity; and
► By investing operating funds primarily in shorter -term securities.
2. Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating
requirements that may be reasonably anticipated. This is accomplished by
structuring the portfolio so that securities mature concurrent with cash needs
to meet anticipated demands. Furthermore since all possible cash demands
cannot be anticipated the portfolio should consist of securities with active
secondary or resale markets.
5
3. Yield
The investment portfolio shall be designed with the objective of attaining a
market rate of return throughout budgetary and economic cycles, taking into
account the investment risk constraints and liquidity needs. Return on
investment is of least importance compared to the safety and liquidity
objectives described above. The core of investments are limited to relatively
low risk securities in anticipation of earning a fair return relative to the risk
being assumed. Securities shall not be sold prior to maturity with the
following exceptions:
► A declining credit security could be sold early to minimize loss of
principal;
► Liquidity needs of the portfolio require that the security be sold.
V PRUDENCE
The City shall follow the Uniform Prudent Investor Act as adopted by the State of
California in Probate Code Sections 16045 through 16054..
Section 16053 sets forth the terms of a prudent person which are as follows:
Investments shall be made with judgment and care - under circumstances then
prevailing - which persons of prudence, discretion, and intelligence excerise in the
professional management of their own affairs, not for speculation, but for
investment, considering the probable safety of their capital as well as the probable
income to be derived.
VI DELEGATION OF AUTHORITY
Authority to manage the City of La Quinta's investment portfolio is derived from
the City Ordinance. Management responsibility for the investment program is
delegated to the City Treasurer, who shall establish written procedures for the
operation of the investment program consistent with the Investment Policy.
Procedures should include reference to safekeeping, wire transfer agreements,
banking service contracts, and collateral/depository agreements. Such procedures
shall include explicit delegation of authority to persons responsible for investment
transactions. No person may engage in an investment transaction except as
provided under the terms of this Investment Policy and the procedures established
by the City Treasurer. The City Treasurer shall be responsible for all transactions
undertaken and shall establish a system of controls to regulate the activities of
subordinate officials. The City Manager or Assistant City Manager shall approve in
writing all purchases and sales of investments prior to their execution by the City
Treasurer.
0
VII CONFLICT OF INTEREST
Investment responsibilities carry added duties of insuring that investments are made
without improper influence or the appearance of improper influence.
Therefore, the City Manager, Assistant City Manager, and the City Treasurer shall
adhere to the State of California Code of Economic Interest and to the. following:
► The City Manager, Assistant City Manager, and the City Treasurer shall not
personally or through a close relative maintain any accounts, interest, or
private dealings with any firm with which the City places investments, with
the exception of regular savings, checking and money market accounts, or
other similar transactions that are offered on a non-negotiable basis to the
general public. Such accounts shall be disclosed annually to the City Clerk in
conjunction with annual disclosure statements of economic interest.
► All persons authorized to place or approve investments shall report to the
City Clerk kinship relations with principal employees of firms with which the
City places investments.
VIII AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The City of La Quinta maintains a listing of financial institutions which are approved
for investment purposes. In addition a list will also be maintained of approved
broker/dealers selected by credit worthiness, who maintain an office in the State of
California.
1 . Broker/Dealers who desire to become bidders for investment transactions
must supply the City of La Quinta with the following:
► Current audited financial statements
► Proof of National Association of Security Dealers Certification
► Trading resolution
► Proof of California registration
► Resume of Financial broker
► Completion of the City of La Quinta Broker/Dealer questionnaire which
contains a certification of having read the City of La Quinta Investment
Policy
The City Treasurer shall evaluate the documentation submitted by the
broker/dealer and independently verify existing reports on file for any firm
and individual conducting investment related business.
7
The City Treasurer will also contact the following agencies during the
verification process:
► National Association of Security Dealer's Public Disclosure Report File -
1-800-289-9999
► State of .California Department of Corporations 1-916-445-3062
All Broker/Dealers selected by the City Treasurer to provide investment
services will be approved by the City Manager subject to City Council
approval. The City Attorney will perform a legal review of the trading
resolution/investment contract submitted by each Broker/Dealer.
Each securities dealer shall provide monthly and quarterly reports filed pursuant to
U.S. Treasury Department regulations. Each mutual fund shall provide a prospectus
and statement of additional information.
2. Financial Institutions will be required to meet the following criteria in order to
receive City funds for investment:
A. Insurance - Public Funds shall be deposited only in financial
institutions insured by the Federal Deposit Insurance Corporation
B. Collateral - The amount of City of La Quinta deposits or
investments not insured by agency of the federal government
shall be 1 10% collateralized by securities' or 150% mortgages'
market values of that amount of invested funds plus unpaid
interest earnings.
C. Size - The amount of City of La Quinta deposits or investments
must be collateralized or insured by an agency of the federal
government.
D. Disclosure - Each financial institution maintaining invested funds
in excess of $100,000 shall furnish corporate authorities a copy
of all statements of resources and liabilities which it is required
to furnish to the State banking or savings and loan
commissioners as required by the California Financial Code.
The City shall not invest in excess of $100,000 in banking
institutions which do not disclose to the city a current listing of
securities pledged for collateralization in public monies.
0
IX AUTHORIZED INVESTMENTS AND DIVERSIFICATION
The City Treasurer will be permitted to invest in the investments listed in the
Appendix entitled - Authorized Investments and Diversification.
X INVESTMENT POOLS
There are three (3) types of investment pools: 1) state -run pools, 2) pools that are
operated by a political subdivision where allowed by law and the political
subdivision is the trustee i.e. County Pool; and 3) pools that are operated for profit
by third parties.
The City of La Quinta has an investment with the State of California's Treasurers
Office Local Agency Investment Fund commonly referred to as LAIF. LAIF was
organized in 1977 through State Legislation Section 16429.1, 2 and 3. Each LAIF
account is restricted to a maximum investable limit of $20 million. In addition, LAIF
will provide quarterly market value information to the City of La Quinta.
On an annual basis the City Treasurer will submit the Investment Pool
Questionnaire to LAIF.
Also, prior to opening any new Investment Pool account, which would require City
Council approval, the City Treasurer will require the completion of the Investment
Pool Questionnaire.
The City does not have an investment with any other Investment Pool - County
Pools or Third Party Pools.
XI COLLATERALIZATION
Collateralization will be required for Certificates of Deposits. The type of collateral
is limited to City authorized investments.
1. Certificates of Deposits under $100.000.
The City Treasurer may waive collateral ization of a deposit that is federally
insured.
2. Certificates of Deposit over $100,000.
The amount not federally insured shall be 1 10% collateralized by securities
or 150% mortgages market value of that amount of invested funds plus
unpaid interest earnings.
Collateral will always be held by an independent third party with whom the City of
La Quinta has a current custodial agreement. Evidence of ownership must be
supplied to the City of La Quinta and retained by the City Treasurer.
9
XII SAFEKEEPING AND CUSTODY
All security transactions of the City of La Quinta shall be conducted on a delivery -
versus - payment (DVP) basis. Securities will be held by a third party custodian
designated by the City Treasurer and evidenced by safekeeping receipts. Deposits
and withdrawals of money market mutual funds and LAIF shall be made directly to
the entity and not to an investment advisor. Money market mutual funds and LAIF
shall also operate on a DVP basis to be considered for investment.
XIII INTEREST EARNING DISTRIBUTION POLICY
Interest earnings is generated from pooled investments and specific investments.
1. Pooled Investments - It is the general policy of the City to pool all available
operating cash of the City of La Quinta, La Quinta Redevelopment Agency
and La Quinta Financing Authority and allocate interest earnings, in the
following order, as follows:
A. Payment to the General Fund of an amount equal to the total annual
bank service charges as incurred by the general fund for all operating
funds as included in the annual operating budget.
B. Payment to the General Fund of a management fee equal to 5 % of the
annual pooled cash fund investment earnings.
C. Payment to each fund of an amount based on the average
computerized daily cash balance included in the common portfolio for
the earning period.
2. Specific Investments - Specific investments purchased by a fund shall incur
all earnings and expenses to that particular fund.
XIV MAXIMUM MATURITIES
The City of La Quinta shall require that each individual investment have a maximum
maturity of two years unless specific approval is authorized by the City Council. In
addition, the City's investment in the State Local Agency Investment Fund (LAIF) is
allowable as long as the average maturity does not exceed two years, unless
specific approval is authorized by the City Council. The City's investment in Money
Market Mutual funds is allowable as long as the average maturity does not exceed
60 days.
10
XV INTERNAL CONTROLS
The City Treasurer shall establish a system of internal controls to accomplish the
following objectives:
► Safeguard assets;
► The orderly and efficient conduct of its business, including adherence to
management policies;
► Prevention or detection of errors and fraud;
► The accuracy and completeness of accounting records; and-,
► Timely preparation of reliable financial information.
While no internal control system, however elaborate, can guarantee absolute
assurance that the City's assets are safeguarded, it is the intent of the City's
internal control to provide a reasonable assurance that management of the
investment function meets the City's objectives.
The internal controls shall address the following:
a. Control of collusion. Collusion is a situation where two or more employees
are working in. conjunction to defraud their employer.
b. Separation of transaction authority from accounting and record keeina. By
separating the person who authorizes or performs the transaction from the
people who record or otherwise account for the transaction, a separation of
duties is achieved.
C. Custodial safekeeping. Securities purchased from any bank or dealer
including appropriate collateral (as defined by State Law) shall be placed with
an independent third party for custodial safekeeping.
d. Avoidance of physical delivery securities. Book entry securities are much
easier to transfer and account for since actual delivery of a document never
takes place. Delivered securities must be properly safeguarded against loss
or destruction. The potential for fraud and loss increases with physically
delivered securities.
e. Clear deleaation of authority to subordinate staff members. Subordinate
staff members must have a clear understanding of their authority and
responsibilities to avoid improper actions. Clear delegation of authority also
preserves the internal control structure that is contingent on the various staff
positions and their respective responsibilities as outlined in the Segregation
of Major Investment Responsibilities appendices.
f. Written confirmation or telephone transactions for investments and wire
11
transfers. Due to the potential for error and improprieties arising from
telephone transactions, all telephone transactions should be supported by
written communications and approved by the appropriate person. Written
communications may be via fax if on letterhead and the safekeeping
institution has a list of authorized signatures. Fax correspondence must be
supported by evidence of verbal or written follow-up.
g. Development of a wire transfer agreement with the City's bank and third
party custodian. This agreement should outline the various controls, security
provisions, and delineate responsibilities of each party making and receiving
wire transfers.
In addition to the System of Internal Controls developed by the City, the Internal
Controls shall be reviewed annually by the independent auditor.
The independent auditors management letter comments pertaining to cash and
investments, if any, shall be directed, to the City Manager who will direct the City
Treasurer to provide a written response to the independent auditors letter. This
response will also be directed to the City's Investment Advisory Board for their
action.
XVI BENCHMARK
The investment portfolio shall be designed with the objective of obtaining a rate of
return throughout budgetary and economic cycles commensurate with the
investment risk constraints and the cash flow needs of the City. Return on
investment is of least importance compared to safety and liquidity objectives.
The City of La Quinta will use the six month U.S. Treasury Bill as a benchmark
when measuring the performance of the investment portfolio.
XVII REPORTING STANDARDS
SB564 section 3 requires a quarterly report to the Legislative Body of Investment
activities. The City of La Quinta has elected to report the investment activities to
the City Council on a monthly basis through the Treasurers Report.
The City Treasurer shall submit a monthly Treasurers Report to the City Council and
the Investment Advisory Board that includes all investments under the authority of
the Treasurer.
The Treasurers Report shall consist of a narrative of significant changes in cash
balances and the following:
12
► Changes in investments from the previous month;
► A certification statement from the City Treasurer;
► Purchases and sales of investments;
► Cost to market value comparisons of all investments by authorized
investment category, except for LAIF which will be provided quarterly;
► Comparison of actual holdings to Investment Policy maximums;
► Twenty four (24) months history of cash and investments for trend analysis;
► Balance Sheet.
XV111 INVESTMENT OF BOND PROCEEDS
The City's investment policy shall govern bond proceeds and bond reserve fund
investments. California Code Section 5922 (d) governs the investment of bond
proceeds and reserve funds in accordance with bond indenture provisions which
shall be structured in accordance with the City's investment policy.
Arbitrage Requirement
The US Tax Reform Act of 1986 requires the City to perform arbitrage calculations
as required and return excess earnings to the US Treasury from investments of
proceeds of bond issues sold after the effective date of this law. This arbitrage
calculations may be contracted with an outside source to provide the necessary
technical assistance to comply with this regulation. Investable funds subject to the
1986 Tax Reform Act will be kept segregated from other funds and records will be
kept in a fashion to facilitate the calculations. The City's investment position
relative to the new arbitrage restrictions is to continue pursuing the maximum yield
on applicable investments while ensuring the safety of capital and liquidity. It is the
City's position to continue maximization of yield and to rebate excess earnings, if
necessary.
XIX INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA
The Investment Advisory Board (IAB) consists of seven members of the community
that have been appointed by and report to the City Council. The IAB meets on a
monthly basis to 1) review account statements and verifications to ensure accurate
reporting as they relate to an investment activity, 2) monitor compliance with
existing Investment Policy and Procedures, and 3) review and make
recommendations concerning investment policy and procedures investment
contracts and investment consultants.
The appendices include City of La Quinta Ordinance 2.70 entitled Investment
Advisory Board Provisions.
13
XX INVESTMENT POLICY ADOPTION
On an annual basis, the Investment policies will be initially reviewed by the
Investment Advisory Board and the City Treasurer. The Investment Advisory Board
will forward the Investment policies, with any revisions, to the City Manager and
City Attorney for their review and comment. A joint meeting will be held with the
Investment Advisory Board, City Manager, City Attorney, and City Treasurer to
review the Investment policies and. comments, prior to submission to the City
Council for their consideration.
The Investment Policies shall be adopted by resolution of the City of La Quinta City
Council on an annual basis. The Investment Policies will be adopted before the end
of June of each year.
14
o
�Eln
0
V
0
U
0
a7 Q
m W
U
LL
LL
v
m
moo`
Q Q
m m
7
N
V
N
V
O
N
V
N
V
coN
I V I
V
co
V
LO
U w. N
O U
c
,
O
N
m
N
c
y
C
.�
0 -ppp
Q N yoO
QJ UN
l0 d
t
N a
Q1 N >
Cl.
N
O
Q C _
=
O
O)
lA
+='
O pl Q
C
m
V
O
O
.p
Z .0 C
O N
_O
Epp
O
O
.p
O_ to
° 7
GE?RN-
N
gLO
a
if
a
d co')j >
a
M
d N O
a
Z
CQ�pa
n
n
0
l�6
a
N
O
Lu
O
INI_1 >
c
a
..
c
m Lo
E
O @
N
as
U
U rn
a) S
8
v�
L
x
Q
45
7
W E
m
a
c
N
L
_
m i+
N -
Q
�
Z m
o0d
3
@
LLQ=�aUmN
U
Z
CD0
LQN
d)
m
Oc
o'•aQ
6
7SQR
E
a rnN mLL A)
CD
ampc
c3
Z
m rnQ Z ��-L- m
t�
Q_
N
4cCYO
LL
y0
:2 OmgO
m
a
a
Q
E
w
4
r'
m
o
tll
O � $ Q
O — M � 'v
N
ao
a+ 0
E
aci
Pc3
Q
=
r'M,Z c 0 — E 44)
2
E �
E
U
3
C O Z S J ll C S
E
C
Y O
Q
C
lU6
Q
14
N
d
E
o,E � m m �Tg T
E
Q
y
rn
lQ N
E 16
C
Q
N
S
0 m 0 0 0 Q Q Q Q
�U-U-U-LL�Q
U
E
Q
T N
o
aE.
►-
to
m
U
>
oL
�g
> E
a`
m
i
_
N
N
aN
M
(h
co
It
In
lD
a
m
Z
W
W
Z
W
N
rr
O
H
Q
2
M
a
Q
w
O
N
O O
a Y
E
Q
l6
7
a
y
N
E r
OlL
a+
c
f6
Q
E
�
a
U')
n
la
y
Z m
m N
o
01
af
¢ rn
tC
Q
°
N
E +'
052
c ME
�
Y
m�
a d
E
m
E
c
Q
N
v T
0
O
U
��
41
"pp
NU
O
U
O
m
� '�
$ P+
IA
xU
c @
Uc1
8 d
E
0
lug
E
N U
Qa
a)Y
O
CU
L
7
V
N V
2
Q
m
Q
Q
�01
N
U)
U
2
C
M
U N
)FL
V
lab
a
N
ly0 C
Z` c IQ
Z
p�p
o 0
.,Q
mY
@
£
Y,Q0
d
m
Q
mdZB
IYI1 .0
- a)N
c
mo
c
�. Q
+-Nw
f6 Ol 0
Qm
O
�
N +��
o
N
EW
O
Nm
I/lY
C
Qa+
Q ++
@ C
7
Q
U Q
N�
E>
a 0,QC
U
0O
E�
N a
Q- Q Q
O U
m ya
U O
Y
O -M
a0
"
C
N
.G Q
m3
C
Q
2i C
ELL
N
'rn
N
0
V V) V
a .-
F 'O
a LL
o a
N
7 d`j-
N
N
.0
cQ
2>
v
c
p
N N
a
a p_
T Ill Q
T
O Q
C
Y
a m
R
U -8
Q
N
Q
O
al'a
O
c
m N
Q�
E
O
c m
O
AIL-
Q
O
QE
mac.
U
yH
UpN
IL
N
C7
IV
In
f0
m
15
.0-0
om N
foci
$10v
N C
L w �
i3 w O N
G00
1 V) JE 0 C
EQ$.QUo
c _O
a
o � . o
.o��E'
r 0rf E c
O_N cum >
)
o ,
aL+ a L N
c C N y f+
EO.
42 - "
E'G° o
g C to O Z
EL 8 m
l4 N f0
N
50
8M2�
E>�
Q
L c z - 4:
Q 0 C 'M
vl92�'
t4) E
F-c.tQ,E
Chapter 2.70
INVESTMENT ADVISORY BOARD PROVISIONS
Sections:
2.70.010 General Rules Regarding Appointment and Terms.
2.70.020 Board meetings and compensation.
2.70.030 Board functions.
2.70.010 General rules regarding appointment and terms.
Except as set out below, see Chapter 2.06 for General Provisions.
The Investment Advisory Board (the "board") is a standing board composed of seven (7)
members from the public that are appointed by city council. La Quinta residency is preferred,
but not a requirement for board members. Recruitment for members may be advertised outside
of the city".
'Background in the investment field and/or related experience is preferred. Background
information will be required and potential candidates must agree to a background check and
verification.
On an annual basis, in conjunction with the Political Reform Act disclosure statutes, or at any
time if a change in circumstances warrants, each board member will provide the City Council
with a disclosure statement which identifies any matters on the board. Such matters may
include, but are not limited to, changes in employment, changes in residence, or changes in
clients.
The Board members will serve for two year staggered terms beginning on July 1 of every
other year, commencing July 1, 1993. Initially, two members will be appointed for two year
terms and three members will be appointed for one year terms. These initial appointments will
start their yearly calculations from July 1, 1993.
2.70.020 Board meetings and compensation.
Board members will be reimbursed for meeting and related expenses at an amount of fifty
dollars ($50) per meeting.
Initially, the Board should meet once a month, but this schedule may be extended to
quarterly meetings upon the concurrence of the Board and the City Council. The specific
meeting dates will be determined by the Board members and meetings may be called for on an
as needed basis.
2.70.030 Board functions.
The Board will annually elect a Chairperson and Vice -chairperson at the first meeting held
after each June 30.
The following are functions of the Board that are to be addressed at each meeting: (1) review
account statements and verifications to ensure accurate reporting as they relate to an
investment activity; (ii) monitor compliance with existing Investment policy and procedures; and
(iii) review and make recommendations concerning investment policy and procedures,
investment contracts, and investment consultants.
The Board will report to City council after each meeting either in person or through
correspondence at a regular City Council meeting.
16
Chapter 3.08
INVESTMENT OF MONEYS AND FUNDS
Sections:
3.08.010 Investment of city moneys and deposit of securities.
3.08.020 Authorized investments.
3.08.030 Sales of securities.
3.08.040 City bonds.
3.08.050 Reports.
3.08.060 Deposits of securities.
3.08.070 Trust fund administration.
3.08.010 Investment of city moneys and deposit of securities.
Pursuant to, and in accordance with, and to the extent allowed by, Sections 53607
and 53608 of the Government Code, the authority to invest and -reinvest moneys of
the city, to sell or exchange securities, and to deposit them and provide for their
safekeeping, is delegated to the city treasurer. (Ord. 2 § 1 (part), 1982)
3.08.020 Authorized investments.
Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is
authorized to purchase, at their original sale or after they have been issued, securities
which are permissible investments under any provision of state law relating to the
investing of general city funds, including but not limited to Sections 53601 and 53635
of the Government Code, as said sections now read or may hereafter be amended,
from moneys in his custody which are not required for the immediate necessities of
the city and as he may deem wise and expedient, and to sell or exchange for other
eligible securities and reinvest the proceeds of the securities so purchased. (Ord. 2 §
1 (part), 1982)
3.08.030 Sales of Securities.
From time to time the city treasurer shall sell the securities in which city moneys
have been invested pursuant to this chapter, so that the proceeds may, as appropriate,
be applied to the purchase for which the original purchase money may have been
designated or placed in the city treasury. (Ord. 2 § I (part),
3.08.040 City bonds.
Bonds issued by the city and purchased pursuant to this chapter may be canceled
either in satisfaction of sinking fund obligations or otherwise if proper and appropriate;
provided, however, that the bonds may be held uncancelled and while so held may be
resold. (Ord. 2 § 1 (part), 1982)
17
3.08.050 Reports.
The city treasurer shall make a monthly report to the city council of all investments
made pursuant to the authority delegated in this chapter. (Ord. 2 § 1 (part), 1982)
3.08.060 Deposits of securities.
Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is
authorized to deposit for safekeeping, the securities in which city moneys have been
invested pursuant to this chapter, in any institution or depository authorized by the
terms of any state law, including but not limited to Section 53608 of the Government
Code as it now reads or may hereafter be amended. In accordance with said section,
the city treasurer shall take from the institution or depository a receipt for the
securities so deposited and shall not be responsible for the securities delivered to and
receipted for by the institution or depository until they are withdrawn therefrom by the
city treasurer. (Ord. 2 § 1 (part), 1982
3.08.070 Trust fund administration.
Any departmental trust fund established by the city council pursuant to Section
36523 of the Government Code shall be administered by the city treasurer in
accordance with Section 36523 and 26524 of the Government code and any other
applicable provisions of law. (Ord. 2 § 1 (part), 1982)
it:3
LISTING OF APPROVED FINANCIAL INSTITUTIONS
1. Banking Services -
Wells Fargo Bank
2. Custodian Services -
Wells Fargo Bank Institutional Trust
3. Deferred Compensation -
International City/County Management
Association
Retirement Corporation
4. Broker/Dealer Services
- Merrill Lynch, Indian Wells, CA
Dean Witter, Newport Beach, CA
Smith Barney, Newport Beach, CA
5. Government Pool
- State of California Local Agency Investment
Fund
City of La Quinta Account
La Quinta Redevelopment Agency
6. Bond Trustees
- 1991 City Hall Revenue Bonds - First Trust
1991 RDA Project Area 1 - First Trust
1992 RDA Project Area 2 - Wells Fargo Bank
1994 RDA Project Area 1 - First Trust
1995 RDA Project Area 1 & 2 - Wells Fargo
Bank
No Changes to this listing may be made without City Council approval.
19
BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION
1 . Name of Firm:
2. Address:
3.
21
Telephone: ( )
Broker's Representative to the City (attach resume):
Name:
Title:
Telephone: ( )
5. Manager/Partner-in-charge (attach resume):
Name:
Title:
Telephone:
6. List all personnel who will be trading with or quoting securities to City
employees (attach resume)
Name:
Title:
Telephone: ( ) ( )
7. Which of the above personnel have read the City's investment policy?
8. Which instruments are offered regularly by your local office? (Must equal
100%)
% U.S. Treasuries
% BA's
% Commercial Paper
% C D's
% Mutual Funds
% Agencies (specify):
% Repos
% Reverse Repos
% CMO's
% Derivatives
• Stocks/Equities
• Other (specify):
9. References -- Please identify your most directly comparable public sector
clients in our geographical area.
Entity Entity
Contact Contact
Telephone ( ) Telephone ( )
Client Since Client Since
10. Have any of your clients ever sustained a loss on a securities transaction
arising from a misunderstanding or misrepresentation of the risk
characteristics of the instrument? If so, explain.
1 1 . Has your firm or your local office ever been subject to a regulatory or state/
federal agency investigation for alleged improper, fraudulent, disreputable or
unfair activities related to the sale of securities? Have any of your employees
been so investigated? If so,
explain.
12. Has a client ever claimed in writing that ygu were responsible for an
investment loss? Yes No If yes, please provide
action taken
Has a client ever claimed in writing that your firm was responsible for an
investment loss? Yes No If yes, please provide
action taken
Do you have any current, or pending complaints that are unreported to the
NASD?
Yes No If yes, please provide action taken
21
Does your firm have any current, or pending complaints that are unreported
to the NASD? Yes No If yes, please provide action
taken
13. Explain your clearing and safekeeping procedures, custody and delivery
process.
Who audits these fiduciary responsibilities?
Latest Audit Report Date
14. How many and what percentage of your transactions failed.
Last month? % $
Last year? % $
15. Describe the method your firm would use to establish capital trading limits
for the City of La Quinta.
16.
Is your firm a member in the S.I.P.C. insurance program. Yes
If yes, explain primary and excess coverage and carriers.
M
17. What portfolio information, if any, do you require from your clients?
18. What reports and transaction confirmations or any other research
publications will the City receive?
19. Does your firm offer investment training to your clients? Yes No
22
20. Does your firm have professional liability insurance. Yes No
If yes, please provide the insurance carrier, limits and expiration date.
21. Please list your NASD Registration Number
22.
Do you have any relatives who work at the City of La Quinta?
Yes No If yes, Name and Department
23. Do you maintain an office in California. Yes No
24. Do you maintain an office in La Quinta or Riverside County? Yes No
25. Please enclose the following:
• Latest audited financial statements.
• Samples of reports, transaction confirmations and any other
research/publications the City will receive.
• Samples of research reports and/or publications that your firm regularly
provides to clients.
• Complete schedule of fees and charges for various transactions.
CERTIFICATION
I hereby certify that I have personally read the Statement of Investment Policy of
the City of La Quinta, and have implemented reasonable procedures and a system
of controls designed to preclude imprudent investment activities arising out of
transactions conducted between our firm and the City of La Quinta. All sales
personnel will be routinely informed of the City's investment objectives, horizons,
outlooks, strategies and risk constraints whenever we are so advised by the City.
We pledge to exercise due diligence in informing the City of La Quinta of all
foreseeable risks associated with financial transactions conducted with our firm.
By signing this document the City of La Quinta is authorized to conduct any and all
background checks.
Under penalties of perjury, the responses to this questionnaire are true and accurate
to the best of my knowledge.
Broker Representative
Date
Title
Sales Manager and/or Managing Partner*
Date Title
23
INVESTMENT POOL QUESTIONNAIRE
Note: This Investment Pool Questionnaire was developed by the Government Finance
Officers Association (GFOA).
Prior to entering a pool, the following questions and issues should be considered.
SECURITIES
Government pools may invest in a broader range of securities than your entity invests
in. It is important that you are aware of, and are comfortable with, the securities the
pool buys.
1. Does the pool provide a written statement of investment policy and objectives?
2. Does the statement contain:
a. A description of eligible investment instruments?
b. The credit standards for investments?
c. The allowable maturity range of investments?
d. The maximum allowable dollar weighted average portfolio maturity?
e. The limits of portfolio concentration permitted for each type of security?
f. The policy on reverse repurchase agreements, options, short sales and futures?
3. Are changes in the policies communicated to the pool participants?
4. Does the pool contain only the types of securities that are permitted by your
investment policy?
INTEREST
Interest is not reported in a standard format, so it is important that you know how
interest is quoted, calculated and distributed so that you can make comparisons with
other investment alternatives.
Interest Calculations
1. Does the pool disclose the following about yield calculations:
a. The methodology used to calculate interest? (Simple maturity, yield to maturity,
etc.)
b. The frequency of interest payments?
c. How interest is paid? (Credited to principal at the end of the month, each
quarter; mailed?)
d. How are gains/losses reported? Factored monthly or only when realized?
24
REPORTING
1 . Is the yield reported to participants of the pool monthly? (If not, how often?)
2. Are expenses of the pool deducted before quoting the yield?
3. Is the yield generally in line with the market yields for securities in which you
usually invest?
4. How often does the pool report, and does that report include the market value of
securities?
SECURITY
The following questions are designed to help you safeguard your funds from loss of
principal and loss" of market value.
1. Does the pool disclose safekeeping practices?
2. Is the pool subject to audit by an independent auditor?
3. Is a copy of the audit report available to participants?
4. Who makes the portfolio decisions?
5. How does the manager monitor the credit risk of the securities in the pool?
6. Is the pool monitored by someone on the board of a separate neutral party external
to the investment function to ensure compliance with written, policies?
7. Does the pool have specific policies with regards to the various investment
vehicles?
a. What are the different investment alternatives?
b. What are the policies for each type of investment?
8. Does the pool mark the portfolio to its market value?
9. Does the pool disclose the following about how portfolio securities are valued:
a. The frequency with which the portfolio securities are valued?
b. The method used to value the portfolio (cost, current value, or some other
method)?
25
OPERA TONS
The answers to these questions will help you determine whether this pool meets your
operational requirements:
1. Does the pool limit eligible participants?
2. What entities are permitted to invest in the pool?
3. Does the pool allow multiple accounts and sub -accounts?
4. Is there a minimum or maximum account size?
5. Does the pool limit the number of transactions each month? What is the number
of transactions permitted each month?
6. Is there a limit on transaction amounts for withdrawals and deposits?
a. What is the minimum and maximum withdrawal amount permitted?
b. What is the minimum and maximum deposit amount permitted?
7. How much notice is required for withdrawals/deposits?
8. What is the cutoff time for deposits and withdrawals?
9. Can withdrawals be denied?
10. Are the funds 100% withdrawable at anytime?
11. What are the procedures for making deposits and withdrawals?
a. What is the paperwork required, if any?
b. What is the wiring process?
12. Can an account remain open with a zero balance?
13. Are confirmations sent following each transaction?
STA TEMENTS
It is important for you and the agency's trustee (when applicable), to receive
statements monthly so the pool's records of your activity and holding are reconciled
by you and your trustee.
26
1 . Are statements for each account sent to participants?
a. What are the fees?
b. How often are they passed?
c. How are they paid?
d. Are there additional fees for wiring funds (what is the fee)?
2. Are expenses deducted before quoting the yield?
QUESTIONS TO CONSIDER FOR BOND PROCEEDS
It is important to know (1) whether the pool accepts bond proceeds and (2) whether
the pool qualifies with the U.S. Department of the Treasury as an acceptable.
commingled fund for arbitrage purposes.
1 . Does the pool accept bond proceeds subject to arbitrage rebate?
2. Does the pool provide accounting and investment records suitable for proceeds of
bond issuance subject to arbitrage rebate?
3. Will the yield calculation reported by the pool be acceptable to the IRS or will it
have to be recalculated?
4. Will the pool accept transaction instructions from a trustee?
5. Are you allowed to have separate accounts for each bond issue so that you do not
commingle the interest earnings of funds subject to rebate with funds not subject
to regulations?
27
SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES
Function Responsibilities
Develop formal Investment Policy City Treasurer
Recommend modifications to Investment Policy Investment Advisory Board
Review formal Investment Policy and recommend City Manager and
City Council action City Attorney
Adopt formal Investment Policy City Council
Review Financial Institutions & Select Investments City Treasurer
Approve investments City Manager or
Assistant City Manager
Execute investment transactions City Treasurer
Confirm wires, if applicable City Manager or Accounting
Supervisor
Record investment transactions in City's
accounting records Accounting Supervisor
Investment verification - match broker confirmation
to City investment records Account Technician
Reconcile investment records
- to accounting records and bank statements
- to Treasurers Report
of investments Account Technician
Security of investments at City. Vault
Security of investments Outside City Third Party Custodian
Review internal control procedures External Auditor
GLOSSARY
The purpose of this glossary is to provide the reader of the City of La Quinta
investment policies with a better understanding of financial terms used in municipal
investing.
AGENCIES: Federal agency securities
ASKED: The price at which securities are
offered.
BANKERS' ACCEPTANCE (BA): Short-term
credit arrangements to enable businesses to
obtain funds to finance commercial
transactions. They are time drafts drawn on
a bank by an exporter or importer to obtain
funds to pay for specific merchandise. By its
acceptance, the bank becomes primarily
liable for the payment of the drafts at its
maturity. An acceptance is a high-grade
negotiable instrument. Acceptances are
purchased in various denominations for 30,
60 or 90 days, but no longer than 270 days.
The interest is calculated on a 360-day
discount basis similar to treasury bills. Local
agencies may not invest more than 40% of
their surplus money in bankers acceptances.
BID: The price offered by a buyer of
securities. (When you are selling securities,
you ask for a bid.) See Offer.
BROKER: A broker brings buyers and sellers
together for a commission.
CERTIFICATE OF DEPOSIT (CD): Time
deposits of a bank or savings and loan. They
are purchased in various denominations with
maturities ranging from 30 to 360 days. The
interest is calculated on a 360-day, actual -
day month basis and is payable monthly.
COLLATERAL: Securities, evidence of
deposit or other property which a borrower
pledges to secure repayment of a loan. Also
refers to securities pledged by a bank to
secure deposits of public monies.
COMMERCIAL PAPER: S h o r t- t e r m
unsecured promissory notes issued by a
corporation to raise working capital. These
negotiable instruments are purchased at a
discount to par value or at par value with
interest bearing. Commercial paper is issued
by corporations such as General Motors
Acceptance Corporation, IBM, Bank America,
etc.
COMPREHENSIVE ANNUAL FINANCIAL
REPORT (CAFR): The official annual report
for the City of La Quinta. It includes five
combined statements for each individual fund
and account group prepared in conformity
with GAAP. It also includes supporting
schedules necessary to demonstrate
compliance with finance -related legal and
contractual provisions, extensive introductory
material, and a detailed Statistical Section.
COUPON: (a) The annual rate of interest that
a bond's issuer promises to pay the
bondholder on the bond's face value. (b) A
certificate attached to a bond evidencing
interest due on a payment date.
DEALER: A dealer, as opposed to a broker,
acts as a principal in all transactions, buying
and selling for his own account.
��1
DEBENTURE: A bond secured only by the
general credit of the issuer.
DELIVERY VERSUS PAYMENT: There are
two methods of delivery of securities:
delivery versus payment and delivery versus
receipt. Delivery versus payment is delivery
of securities with an exchange of money for
the securities. Delivery versus receipt is
delivery of securities with an exchange of a
signed receipt for the securities.
DERIVATIVES: (1) Financial instruments
whose return profile is linked to, or derived
from, the movement of one or more
underlying index or security, and may include
a leveraging factor, or (2) financial contracts
based upon notional amounts whose value is
derived from an underlying index or security
(interest rates, foreign exchange rates,
equities or commodities).
DISCOUNT: The difference between the cost
price of a security and its maturity when
quoted at lower than face value. A security
selling below original offering price shortly
after sale also is considered to be at a
discount
DIVERSIFICATION: Dividing investment
funds among a variety of securities offering
independent returns.
FEDERAL CREDIT AGENCIES: Agencies of
the Federal government set up to supply
credit to various classes of institutions and
individuals, e.g., S&L's, small business firms,
students, farmers, farm cooperatives, and
exporters. The following is a listing:
1. FNMAs (Federal National Mortgage
Association) - Used to assist the home
mortgage market by purchasing
mortgages insured by the Federal Housing
Administration and the Farmers Home
Administration, as well as those guaranteed
by the Veterans Administration. They are
issued in various maturities and in minimum
denominations of $10,000. Principal and
Interest is paid monthly.
2. FHLBs (Federal Home Loan Bank Notes
and Bonds) - Issued by the Federal Home
Loan Bank System to help finance the
housing industry. The noteq and bonds
provide liquidity and home mortgage
credit to savings and loan associations,
mutual savings banks, cooperative banks,
insurance companies, and mortgage -
lending institutions. They are issued
irregularly for various maturities. The
minimum denomination is $ 5,000. The
notes are issued with maturities of less
than one year and interest is paid at
maturity. The bonds are issued with
various maturities and carry semi-annual
coupons. Interest is calculated on a 360-
day, 30-day month basis.
3. FLBs (Federal Land Bank Bonds) - Long-
term mortgage credit provided to farmers
by Federal Land Banks. These bonds are
issued at irregular times for various
maturities ranging from a few months to
ten years. The minimum denomination is
$1,000. They carry semi-annual
coupons. Interest is calculated on a 360-
day, 30 day month basis.
4. FFCBs (Federal Farm Credit Bank) - Debt
instruments used to finance the short and
intermediate term needs of farmers and
the national agricultural industry. They
are issued monthly with three- and six-
month maturities. The FFCB issues larger
issues (one to ten year) on a periodic
basis. These issues are highly liquid.
30
5. FICBs (Federal Intermediate Credit bank
Debentures) - Loans to lending institutions
used to finance the short-term and
intermediate needs of farmers, such as
seasonal production. They are usually
issued monthly in minimum
denominations of $3,000 with a nine -
month maturity. Interest is payable at
maturity and is calculated on a 360-day,
30-day month basis.
6. FHLMCs (Federal Home Loan Mortgage
Corporation) - a government sponsored
entity established in 1970 to provide a
secondary market for conventional home
mortgages. Mortgages are purchased
solely from the Federal Home Loan Bank
System member lending institutions
whose deposits are insured by agencies
of the United States Government. They
are issued for various maturities and in
minimum denominations of $10,000.
Principal and Interest is paid monthly.
Other federal agency issues are Small
Business Administration notes (SBAs),
Government National Mortgage
Association notes (GNMAs), Tennessee
Valley Authority notes (TVAs), and
Student Loan Association notes (SALLIE-
MAEs).
FEDERAL DEPOSIT INSURANCE
CORPORATION (FDIC): A federal agency that
insures bank deposits, currently up to
$100,000 per deposit.
FEDERAL FUNDS RATE: The rate of interest
at which Fed funds are traded. This rate is
currently pegged by the Federal Reserve
through open -market operations.
FEDERAL HOME LOAN BANKS (FHLB):
Government sponsored wholesale banks
(currently 12 regional banks) which lend
funds and provide correspondent banking
services to member commercial banks, thrift
institutions, credit unions and insurance
companies. The mission of the FHLBs is to
liquefy the housing related assets of its
members who must purchase stock in their
district Bank.
FEDERAL OPEN MARKET COMMITTEE
(FOMC): Consists of seven members of the
Federal Reserve Board and five of the twelve
Federal Reserve Bank Presidents. The
President of the New York Federal Reserve
Bank is a permanent member, while the other
Presidents serve on a rotating basis. The
Committee periodically meets to set Federal
Reserve guidelines regarding purchases and
sales of Government Securities in the, open
market as a means of influencing the volume
of bank credit and money.
FEDERAL RESERVE SYSTEM: the central
bank of the United States created by
Congress and consisting of a seven member
Board of Governors in Washington, D.C., 12
regional banks and about 5,700 commercial
banks that are members of the system.
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA or Ginnie Mae):
Securities influencing the volume of bank
credit guaranteed by GNMA and issued by
mortgage bankers, commercial banks,
savings and loan associations, and other
institutions. Security holder is protected by
full faith and credit of the U.S. Government.
Ginnie Mae securities are backed by the FHA,
VA or FMHM mortgages. The term
"passthroughs" is often used to describe
Ginnie Maes.
31
LAIF (Local Agency Investment Fund) - A
special fund in the State Treasury which local
agencies may use to deposit funds for
investment. There is no minimum
investment period and the minimum
transaction is $5,000, in multiples of $1,000
above that, with a maximum balance of
$20,000,000 for any agency. The City is
restricted to a maximum of ten transactions
per month. It offers high liquidity because
deposits can be converted to cash in 24
hours and no interest is lost. All interest is
distributed to those agencies participating on
a proportionate share basis determined by
the amounts deposited and the length of time
they are deposited. Interest is paid quarterly.
The State retains an amount for reasonable
costs of making the investments, not to
exceed one -quarter of one percent of the
earnings.
LIQUIDITY: A liquid asset is one that can be
converted easily and rapidly into cash
without a substantial loss of value. In the
money market, a security is said to be liquid
if the spread between bid and asked prices is
narrow and reasonable size can be done at
those quotes.
LOCAL GOVERNMENT INVESTMENT POOL
(LGIP): The aggregate of all funds from
political subdivisions that are placed in the
custody of the State Treasurer for
investment and reinvestment.
MARKET VALUE: The price at which a
security is trading and could presumably be
purchased or sold.
MASTER REPURCHASE AGREEMENT: A
written contract covering all future
transactions between the parties to
repurchase --reverse repurchase agreements
that establishes each party's rights in the
transactions. A master agreement will often
specify, among other things, the right of the
buyer -lender to liquidate the underlying
securities in the vent of default by the seller -
borrower.
MATURITY: The date upon which the
principal or stated value of an investment
becomes due and payable
MONEY MARKET: The market in which
short-term debt instruments (bills,
commercial paper, banders' acceptances,
etc.) are issued and traded.
OFFER: The price asked by a seller of
securities. (When you are buying securities,
you ask for an offer.) See Asked and Bid.
OPEN MARKET OPERATIONS: Purchases and
sales of government and certain other
securities in the open market by the New
York Federal Reserve Bank as directed by the
FOMC in order to influence the volume of
money and credit in the economy. Purchases
inject reserves into the bank system and
stimulate growth of money and credit; sales
have the opposite effect. Open market
operations are the Federal Reserve's most
important and most flexible monetary policy
tool.
PORTFOLIO: Collection of all cash and
securities under the direction of the City
Treasurer, including Bond Proceeds.
PRIMARY DEALER: A group of government
securities dealers who submit daily reports of
market activity an depositions and monthly
financial statements to the Federal Reserve
Bank of New York and are subject to its
informal oversight. Primary dealers include
Securities and Exchange Commission (SEC) -
registered securities broker -dealers, banks
and a few unregulated firms.
32
RATE OF RETURN: The yield obtainable on a
security based on its purchase price or its
current market price. This may be the
amortized yield to maturity on a bond the
current income return.
REPURCHASE AGREEMENT (RP OR REPO):
A repurchase agreement is a short-term
investment transaction. Banks buy
temporarily idle funds from a customer by
selling U.S. Government or other securities
with a contractual agreement to repurchase
the same securities on a future date.
Repurchase agreements are typically for one
to ten days in maturity. The customer
receives interest from the bank. The interest
rate reflects both the prevailing demand for
Federal funds and the maturity of the repo.
Some banks will execute repurchase
agreements for a minimum of $100,000 to
$ 500,000, but most banks have a minimum
of $1,000,000.
REVERSE REPURCHASE AGREEMENTS - A
reverse repurchase agreement is the opposite
of a repurchase agreement. The City loans a
security to a bank in exchange for cash. The
City agrees to pay off the loan with interest
on a future date.
SAFEKEEPING: A service to customers
rendered by banks for a fee whereby
securities and valuables of all types and
descriptions are held in the bank's vaults for
protection.
SECONDARY MARKET: A market made for
the purchase and sale of outstanding issues
following the initial distribution.
SECURITIES & EXCHANGE COMMISSION:
Agency created by Congress to protect
investors in securities transactions by
administering securities legislation.
SEC RULE 15C3-1: See Uniform Net Capital
Rule.
STRUCTURED NOTES: Notes issued by
Government Sponsored Enterprises (FHLB,
FNMAS, SLMA, etc.) And Corporations
which have imbedded options (e.g., call
features, step-up coupons, floating. rate
coupons, derivative -based returns) into their
debt structure, Their market performance is
impacted by the fluctuation of interest rates,
the volatility of the imbedded options and
shifts in the Shape of the yield curve.
SURPLUS FUNDS: Section 53601 of the
California Government Code defines surplus
funds as any money not required for
immediate necessities of the local agency.
The City has defined immediate neccesities
to be payment due within one week.
TREASURY BILLS: Issued weekly with
maturity dates up to one year. They are
issued and traded on a discount basis with
interest figured on a 360-day basis, actual
number of days. They are issued in amounts
of $10,000 and up, in multiples of $5,000.
They are a highly liquid security.
TREASURY BONDS: Long-term coupon -
bearing U.S. Treasury securities issued as
direct obligations of the U.S. Government
and having initial maturities of more than 10
years.
33
TREASURY NOTES: Medium -term coupon -
bearing U.S. Treasury securities issued as
direct obligations of the U.S. Government
and having initial maturities from two to 10
years.
UNIFORM NET CAPITAL RULE: Securities
and Exchange Commission requirement that
member firms as well as nonmember broker -
dealers in securities maintain a maximum
ratio of indebtedness to liquid capital of 15
to 1; also called net capital rule and net
capital ratio.
Indebtedness covers all money owed to a
firm, including margin loans and
commitments to purchase securities, one
reason new public issues are spread among
members of underwriting syndicates. Liquid
capital includes cash and assets easily
converted into cash.
UNIFORM PRUDENT INVESTOR ACT: The
State of California has adopted this Act. The
Act contains the following sections: duty of
care, diversification, review of assets, costs,
compliance determinations, delegation of
investments, terms of prudent investor rule,
and application.
YIELD: The rate of annual income return on
an investment, expressed as a percentage.
(a) INCOME YIELD is obtained by dividing the
current dollar income by the current market
price for the security. (b) NET YIELD or
YIELD TO MATURITY is the current income
yield minus any premium above par of plus
any discount from par in purchase price, with
the adjustment spread over the period from
the date of purchase to the date of maturity
of the bond.
34