1998 05 13 IAB4 64P Qum&
78-495 CALLE TAMPICO - LA QUINTA, CALIFORNIA 92253 - (760) 777-7000
FAX (760) 777-7101
TDD (760) 777-1227
AGENDA
INVESTMENT ADVISORY BOARD
Study Session Room
78-495 Calle Tampico- La Quinta, CA 92253
May 13, 1998 - 5:30 P.M.
I CALL TO ORDER
a. Pledge of Allegiance
b. Roll Call
11 PUBLIC COMMENT -(This is the time sex aside for public comment on any matter not scheduled on the agenda.)
III CONFIRMATION OF AGENDA
IV CONSENT CALENDAR
A. Approval of Minutes of Meeting on April 8, 1998 for the Investment Advisory
Board.
V BUSINESS SESSION
A. Transmittal of Treasury Report for March, 1998
B. Fiscal Year 1998/99 Investment Policies
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report - April, 1998
B. Pooled Money Investment Board Reports - February 1998
VII BOARD MEMBER ITEMS
VIII ADJOURNMENT
MAILING ADDRESS — P.O. BOX 1504 — LA QUINTA, CALIFORNIA 92253 �10�
INVESTMENT ADVISORY BOARD May 13, 1998
BUSINESS SESSION A
ITEM TITLE:
Transmittal of Treasury Report
for March 31, 1998
BACKGROUND:
Attached please find the Treasury Report for March 31, 1998.
RECOMMENDATION:
Review, Receive and File the Treasury Report of March 31, 1998.
er, Finance Director
TO:
FROM:
SUBJECT:
DATE:
T6 CV
4ilf 4 Qgmr4
MEMORANDUM
La Quinta City Council
John Falconer, Finance Director/Treasurer
Treasurer's Report for March 31, 1998
May 4, 1998
Attached is the Treasurer's Report for the month ending March 31, 1998. This report is submitted to the
City Council each month after a reconciliation of accounts is accomplished by the Finance Department.
Cash and Investments:
Decrease of $1,899,769. due to the net effect of expenditures in excess of revenues.
State Pool:
Increase of $2,200,000. due to the net effect of transfers to and from the cash and
investment accounts.
U.S. Treasury Bills, Notes, Securities and Commercial Paper:
Increase of $15,103. due to the monthly adjustment in the amortized value
of the investments.
Mutual Funds:
Decrease of $1,442,174. due to the net effect of debt service payments and interest
earned.
Total decrease in cash balances $1,126,840.
I certify that this report accurately reflects all pooled investments and is in compliance with the California
Government Code; and is in conformity with the City Investment policy.
As Treasurer of the City of La Quinta, I hereby certify that sufficient investment liquidity and anticipated
revenues are available to meet the pools expenditure requirements for the next six months. The City of
La Quinta used the Bureau of the Public Debt, U.S. Bank Monthly Statement and Bank of New York
hkonthly Cj4todian Report to cjgtermine the fair market value of investments at month end.
John M. Falconer I
Fidance Director/Treasurer
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CITY OF LA QUINfA
CITY
CITY RDA
RDA FA
BALANCE SHEET 03/31/98
FIXED
LONG TERM FIXED
LONG TERM FINANCING LONG TERM
GRAND
CITY ASSETS
DEBT RDA ASSETS
DEBT AUTHORITY DEBT
TOTAL
ASSETS:
POOLED CASH
1,831,471.75
5,402,576.68
159.812.00
7,393,860.43
LORP INVESTMENT IN POOLED CASH
470,000.00
470.000.00
INVESTMENT T-BILLINOTES & OTHER
15,000,000.00
15.000.000.00
LORP CASH
22,813.44
22.813.44
BOND REDEMPTION CASH
2,28241
222,95274
225,235.15
BOND RESERVE CASH
531,714.10
531,714.10
BOND PROJECT CASH
10,254,504.71
598.486.96
10,852,991.67
BOND ESCROW CASH
2.676.19
2.676.19
PETTY CASH
1,000.00
1,000.00
CASH a INVESTMENT TOTAL
16.832.471.75
16,686,567.53
981.251.70
34,50Q290.96
INVESTMENT IN LAND HELD FOR RESALE
86,319.85
86,319.85
ACCOUNTS RECEIVABLE
56,753.77
81.257.68
138,011.45
PRBAUL40SCOUNT ON INVESTMENT
(61,117.59)
(206.00)
172.69 (61.150.90)
LQRP-ACCOUNTS RECEIVABLE
18,572-38
18.57238
INTEREST RECEIVABLE
2,383.33
2.383.33
LOANINOTES RECEIVABLE
2,560,500.03
2,560,500.03
DUE FROM OTHER AGENCIES
DUE FROM OTHER GOVERNMENTS
DUE FROM OTHER FUNDS
176,207.49
551,038.04
727.245.53
DUE FROM RDA
6,890,277.20
6,890,277.20
INTEREST ADVANCE -DUE FROM RDA
1,817,296.74
1,817,296.74
NSF CHECKS RECEIVABLE
4,195.71
4,195.71
ACCRUED REVENUE
43,874.22
43,874.22
TRAVEL ADVANCES
1,125.00
1,125.00
EMPLOYEE ADVANCES
PREPAID EXPENSES
RECEIVABLE TOTAL
8,887,121.65
3,255,036.35
172.69 12,142,330.69
WORKER COMPENSATION DEPOSIT
37,637.00
37,637.00
RENT DEPOSITS
UTILITY DEPOSITS
75.00
75.00
MISC. DEPOSITS
2,100.00
2,100.00
DEPOSITS TOTAL
39,81200
39.812.00
GENERAL FIXED ASSETS
693,426.00 14,947,094.00
11,438,745.05
27,079,265.05
ACCUMULATED DEPRECIATION
(99.621.96)
(99.621.96)
AMOUNT AVAILABLE TO RETIRE LIT DEBT
2.340.653.00
2,340,653.00
AMOUNT TO BE PROVIDED FOR LIT DEBT
350,653.00 91,307,396.02
8,790,000.00 100,448,049.02
TOTAL OTHER ASSETS
593,804.04 14,947,094.00
350,653.00 11,438,745.05 93,648,049.02
8,790,000.00 129,768,345.11
TOTAL ASSETS
26.353.209.44 14,947,094.00
350,653.00 20.027.923.73 11.438.745.05 93,648. 9.02
981,424.39 8,790,000.00 176,537,098.63
LIABILITY
ACCOUNTS PAYABLE
513,695.04
(46.172.89)
222.175.50
689,697.65
DUE TO OTHER AGENCIES
577.859.92
577,859.92
DUE TO OTHER FUNDS
551,038.04
176,207.49
727,245.53
INTEREST ADVANCE -DUE TO CITY
ACCRUED EXPENSES
PAYROLL LIABILITIES
31.094.97
31,094.97
STRONG MOTION INSTRUMENTS
3,345.91
3.345.91
FRINGE TOED LIZARD FEES
(2,984.24)
(2,984.24)
SUSPENSE
29,914.23
29,914.23
DUE TO THE CITY OF LA QUWTA
PAYA13LESTOTAL
1,152,925.83
504.865.15
398,382.99
2,056,173.97
ENGINEERING TRUST DEPOSITS
88.330.02
88.330.02
SO. COAST AIR QUALITY DEPOSITS
ARTS IN PUBLIC PLACES DEPOSITS
235,456.65
235,456.65
LORP DEPOSITS
13,761.00
13,761.00
DEVELOPER DEPOSITS
804,355.28
804.356.28
MISC. DEPOSITS
75.946.12
75,946.12
AGENCY FUND DEPOSITS
1,073,029.04
1,073,029.04
TOTAL DEPOSITS
2,277,117.11
13,761.00
2,290,878.11
DEFERRED REVENUE
OTHER LIABILITIES TOTAL
COMPENSATED ABSENCES PAYABLE
350.653.00
350.653.00
DUE TO THE CITY OF LA OUINTA
8,707,575.15
8,707,575.16
DUE TO COUNTY OF RIVERSIDE
12,320,655.87
12,320,655.87
DUE TO C.V. UNIFIED SCHOOL DIST.
11,270,808.00
11,270,W8.00
DUE TO DESERT SANDS SCHOOL DIST.
569.010.00
569,010.00
BONDS PAYABLE
60,780,000.W
8,790,000.00 6-9 570.000.W
TOTAL LONG TERM DEBT
350,653.00
93,648,049.02
8,790,000.00 102,788,702-02
TOTAL LIABILITY
3,430,042.94
350.653.00 518.626.15
93,648,049.02
398,382.99
8,790,000.00 107.135.764.10
EQUITY -FUND BALANCE
22,923,166.50 14,947,094.00
19,509,297.58 11,438,745.05
583,041.40
69,401,344.53
TOTAL LIABILITY & EQUITY 26,353,209.44 14,947,094.00 350.653.00 20,027,923.73 11,438,745.05 93.648.049.02 981,424.39 8,790,000.00 176,537,098.63
INVESTMENT ADVISORY BOARD Business Session No. B
Meeting Date: May 13, 1998
TITLE:
Fiscal Year 1998/99 Investment Policies
Pursuant to State Legislation the City investment policies must be approved on an
annual basis by the City Council. This approval is done in June of each year.
Attached with changes is the 1998/99 Draft Investment Policy.
Staff believes that maintaining the LAIF maximum percentage at 35% for Fiscal Year
1998/99 allows Staff the flexibility to maintain liquid cash reserves to meet City
obligations. Staff has made an effort to maintain the actual percentage at a lower
percentage for Fiscal Year 1997/98. Per the April LAIF interest staff report the
average percentage invested in LAIF was 17% with a high of 25% and a low of 12%.
RECOMMENDATION:
Commence review of the Investment policies for approval by City Council in June
1998.
Joh6 M. Falconer, Finance Director
CITY OF LA QUINTA
Investment Policy
Table of Contents
Section
Topic
Page
Executive Summary
2
I
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
Vill
Authorized Financial Dealers and Institutions
7
► . Broker/Dealers
No. Financial Institutions
IX
Authorized Investments and Diversification
8
X
Investment Pools
11
XI
Collateralization
12
XII
Safekeeping and Custody
12
XIII
Interest Earning Distribution Policy
12
XIV
Maximum Maturities
13
XV
Internal Controls
13
XVI
Benchmark
15
XVII
Reporting Standards
15
XVIII
Investment of Bond Proceeds
15
XIX
Investment Advisory Board - City of La Quinta
16
XX
Investment Policy Adoption
16
Appendices Authorized Investments and Diversification 17
Municipal Code Ordinance 2.70 - Investment Advisory Board 18
Municipal Code Ordinance 3.08 - Investment of Moneys and Funds 19
Listing of Approved Financial Institutions' 21
Broker/Dealer Questionnaire and Certification 22
Investment Pool Questionnaire 26
Segregation of Major Investment Responsibilities 30
Glossary 31
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
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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.
K
City of La Quinta
Statement of Investment Policy
July 1, 1998 through June 30, 1999
Adopted by the City Council on .
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.
LI IWO I AQ91
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.
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.
0
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.
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.
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 thasecurities mature concurrent with cash needs
t
in Ii=�d� 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;
No. Liquidity needs of the portfolio require that the security be sold.
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.
O 1 6111MMSIVII
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.
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.
The City Treasurer will be permitted to invest in the investments listed in the
Appendix entitled - Authorized Investments and Diversification.
As provided in Sections 16429.1, 53601, 53601.1, and 53649 of the
Government Code, the State of California limits the investment vehicles
available to local agencies as summarized in the following paragraphs.
Section 53601, as now amended, provides that unless Section 53601
specifies a limitation on an investment's maturity, no investments with
maturities exceeding five years shall be made. The City of La Quinta
Investment Policy has specified that no investment may exceed two years.
State Treasurer's Local Agency Investment Fund (LAIR - As authorized in
Government Code Section 16429.1 and by LAW procedures, local
government agencies are each authorized to invest a maximum of $20 million
per account in this investment program administered by the California State
Treasurer. The City of La Qu-inta has two accounts with LAIF. The City of
La Quinta has a limitation of 35% of the portfolio.
Government Agency Issues - As authorized in Government Code Sections
53601 (a) through (n) as they pertain to surplus funds, this category includes
a wide variety of government securities which include the following:
• Local government bonds or other indebtedness and State bonds or
other indebtedness. The City of La Quinta Investment Policy does not
allow investments in local and state indebtedness
• U.S. Treasury notes or other indebtedness secured by the full faith and
credit of the federal government. The City of La Quinta Investment
Policy limits investments in U.S. Treasury issues to 75%
• Other federal agency securities including but not limited to issued by
the Government National Mortgage Association, Federal National
Mortgage Association, and the Federal Home Loan Mortgage
Corporation. The City of La Quinta investment policy limits
investments in federal agency securities to 75% with no one federal
agency of one specific entity can exceed 25% of the portfolio.
Bankers' Acceptances - As authorized in Government Code Section 53601
(f), 40% may be invested in Bankers' Acceptances, although no more than
30% of the portfolio may be invested in Bankers' Acceptances with any one
commercial bank. Additionally, the maturity period cannot exceed 270 days;
however, Bankers' Acceptances are seldom marketed with maturities in
excess of 180 days. The City of La Quinta investment policy does not allow
investment in Bankers' Acceptances.
Commercial Paper - The City of La Quinta Investment Policy only allows
investments in commercial paper to 30%, the dollar weighted average
maturity does not exceed 31 days. As authorized in Government Code
E
Negotiable Certificates of Deposit - As authorized in Government Code
Section 53601(h), 30% maybe invested in negotiable certificates of deposit
issued by commercial banks and savings and loan associations. The City of
La Quinta investment policy does not allow investment in Negotiable
Certificates of Deposit.
Repurchase and Reverse Repurchase Agreements - As authorized in
Government Code Section 53601 W, these investment vehicles are
agreements between the local agency and seller for the purchase of
government securities to be resold at a specific date and for a specific
amount. Repurchase agreements are generally, used for short term
investments varying from one day to two weeks. There is no legal limitation
on the amount of the repurchase agreement. However, the maturity period
cannot exceed one year. The market value of securities underlying a
repurchase agreement shall a at least 102% of the funds invested and shall
be valued at least quarterly. The City of La Quinta Investment Policy does
not allow investment in Repurchase Agreements.
The term "reverse repurchase agreement" means the sale of securities by the
local agency pursuant to an agreement by which the local agency will
repurchase such securities on or before a specific date and for a specific
amount. As provided in Government Code Section 53635, reverse
repurchase agreements require the prior approval of the City Council. The
City of La Quinta Investment Policy does not allow investment in Reverse
Repurchase Agreements.
Corporate Notes and Diversified Management Companies - As authorized in
Government Code Section 53601 (j) and (k), local agencies may invest in
corporate notes for a maximum period of five years in an amount. not to
exceed 30% of the agency's portfolio. The notes must be issued by
corporations organized and operating in the United States or by depository
institutions licensed by the United States or any other state and operating in
the United States. Local agencies are also authorized in invest in shares of
beneficial interest issued by diversified management companies (mutual
funds) in an amount not to exceed 20% of the agency's portfolio. There are
a number of other qualifications and restrictions regarding allowable
investments in corporate notes and shares of beneficial interest issued by
mutual funds. The City of La Quinta investment policy does not allow
corporate notes and limits the percentage of mutual funds to 20%.
10
Mortgage -Backed Securities - As authorized in Government code Section
53601(n), local agencies may invest in mortgage -backed securities such as
mortgage pass -through securities and collateralized mortgage obligations for
a maximum period of five years in an amount not to exceed 20% of the
agency's portfolio. Securities eligible for investment shall have a "A" or
higher rating. The City of La Quinta investment policy does not allow
investment in Mortgage -Backed Securities.
Financial Futures and Financial Option Contracts - As authorized in
Government Code Section 53601.1, local agencies may invest in financial
futures or option contracts in any of the above investment categories subject
to the same overall portfolio limitations. The City of La Quinta Investment
Policy does not allow investments in financial futures and financial option
contracts.
Certificates of Deposit - As authorized in Government Code Section 53649,
Certificates of Deposit are fixed term investments which are required to be
collateralized from 105% to 150% depending on the specific security
pledged as collateral in accordance with Government Code Section 53652.
5ry notes secured by
ette, s of ei U-011t, Issued by tl te Federal I Iorne Loan Bank of S 11-1 Fran
There are no portfolio limits on the amount of maturity for this investment
vehicle. The City of La Quinta investment policy limits the percentage of
Certificates of Deposit to 60%.
Sweep Accounts - As authorized by the City Council, a U.S. Treasury Money
Market Sweep Account with a $50,000 target balance may be maintained in
conjunction with the checking account.
il4011111126191
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
11
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 collateralization of a deposit that is federally
insured.
12
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.
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 keeping. 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.
13
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
transfers. Due to the potential for error and improprieties arising from
telephone transactions, all telephone transactions shall 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.
19. 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.
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.
14
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:
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 LAW 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.
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.
' • .•- 0-• -i1-1
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.
15
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 proceduresinvestment
contracts and investment consultants.
The appendices include City of La Quinta Ordinance 2.70 entitled Investment
Advisory Board Provisions.
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.
16
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.
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)
19
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)
all
LISTING OF APPROVED FINANCIAL INSTITUTIONS
1. Banking Services - Wells Fargo Bank
2. Custodian Services - "OfAft i
We"s 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 - First Trust
1994 RDA Project Area 1 - First Trust
1995 RDA Project Area 1 & 2 - First Trust
Assessment Districts - First Trust
No Changes to this listing may be made without City Council approval.
21
BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION
1. Name of Firm:
2. Address:
3.
Ey
Telephone: ( ) l )
Broker's Representative to the City (attach resume):
Name:
Title:
Telephone: ( )
5. Manager/Partner-in-charge (attach resume):
Name:
Title:
Telephoner
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 % Repos
% BA's % Reverse Repos
% Commercial Paper % CMO's
% CD's % Derivatives
% Mutual Funds % Stocks/Equities
% Agencies (specify): % Other (specify):
22
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.
11. 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 yQu 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
23
Does your firmhave 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 No
If yes, explain primary and excess coverage and carriers.
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
20. Does your firm have professional liability insurance. Yes No
If yes, please provide the insurance carrier, limits and expiration date.
21.
22.
Please list your NASD Registration Number
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
25
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?
26
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)?
27
OPERA TIONS
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.
28
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?
29
SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES
FunctionResponsibilities
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
Manager
Record investment transactions in City's
accounting records Accounting Manager
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
30
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.
31
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.
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 Mortga._ae
Association) - Used to assist the home
mortgage market by purchasing
mortgages insured by the Federal Housing
32
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 notes 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.
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.
33
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.
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
34
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.
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.
35
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 $5,000.
They are a highly liquid security.
TREASURY BONDS: Long-term coupon -
bearing U.S. Treasury securities issued as
direct obligations of the U.S. Government
and having initial maturities of more than 10
years.
INVESTMENT ADVISORY BOARD May 13, 1998
CORRESPONDENCE & WRITTEN MATERIAL A
TITLE:
Month End Cash Report - April 1998
BACKGROUND:
This cash report is not a complete Treasury Report (exclude petty cash, deferred
compensation and fiscal agent balances, ) but would report in a timely fashion
selected cash balances.
RECOMMENDATION:
Information item only.
r, Finance Director
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INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
May 13, 1998
Pooled Money Investment Board Report
BACKGROUND:
Correspondence & Written
Material Item B
The Pooled Money Investment Board Report for February, 1998 is included in the
agenda packet.
RECOMMENDATION:
Receive & File
Jo$n M. Falconer, Finance Director
STATE OF CALIFORNIA
STATE TREASURER'S OFFICE
POOLED MONEY INVESTMENT BOARD REPORT
FEBRUARY 1998
Table of Contents
SUMMARY............................................................................................................1
SELECTED INVESTMENT DATA....................................................................2
PORTFOLIO COMPOSITION...........................................................................3
INVESTMENT TRANSACTIONS......................................................................4
TIME DEPOSITS................................................................................................21
DEMAND BANK DEPOSITS............................................................................25
POOLED MONEY INVESTMENT BOARD DESIGNATION .....................26
POOLED MONEY INVESTMENT ACCOUNT
SUMMARY OF INVESTMENT DATA
A COMPARISON OF FEBRUARY 1998 WITH FEBRUARY 1997
(Dollars in Thousands)
February 1998 February 1997 Change
Average Daily Portfolio
$31,140,429
$30,379,056
+ 761,373
Accrued Earnings
$136,647
$129,929
+ 6,718
Effective Yield
5.720
5.575
+ .145
Average Life --Month End in days)
207
260
- 53
Total Security Transactions
Amount
$28,614,910
$21,643,428
$6,971,482
Number
633
502
+ 131
Total Time Deposit Transactions
Amount
$806,200
$450,700
+ 355,500
Number
47
38
+ 9
Average Workday Investment Activity
$1,634,506
$1,227,451
+ $407,055
Prescribed Demand Account Balances
For Services
$230,513
$139,307
+ $91,206
For Uncollected Funds
$160,258
$194,631
- $34,373
01M
MATT FONG
STATE TREASURER
STATE OF CALIFORNIA
INVESTMENT DIVISION
SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED)
Change in
February 28,1998 Percent From
Tyne of Security Amount Percent Previous Month
Governments
Bills
Bonds
Notes
Strips
Total Governments
Federal Agency Coupons
Certificates of Deposit
Bank Notes
Bankers Acceptances
Repurchases
Federal Agency Discount Notes
Time Deposits
GNMA's
Commercial Paper
FHLMC
Corporate Bonds
Pooled Loans
GF Loans
Reversed Repurchases
Total, All Types
INVESTMENT ACTIVITY
Pooled Money
Other
Time Deposits
TOTALS
PMIA Monthly Average
Effective Yield
Year to Date Yield for
Last Day of Month
$2,563,542
8.54
+
.95
0
0
0
5,1341844
17.11
+
.68
73,184
.24
0
$79771,570
25.89
+
1.63
$292299272
7.43
+
.89
6,4631217
21.53
-
.42
19075,000
3.58
+
.72
329,101
1.10
+
.03
0
0
-
.33
1J05,132
3.68
+
.07
1,2229295
4.07
+
.36
21497
.01
0
792219958
24.06
-
2.68
24,309
.08
0
194751,312
4.91
-
.02
1,3469449
4.48
-
.07
0
0
0
-2453,700
-.82
+
.18
$3090209,412
100
February 1998
Number
Amount
633
$ 289614,910
6
85,245
47
806,200
686
$ 29,506,355
5.720
5.713
January1998
Number
Amount
416
$ 18,131,329
7
1229146
50
4799100
473
$ 1897329575
5.742
5.712
—2—
Commercial
Paper
24.06%
Banker
Acceptar
1.10°A
Pooled Money Investment Account
Portfolio Composition
$30 Billion
Corporate Loans Reverses
Bonds
4.48 /o -0.82 /o
CD's/BN's
25.11 %
asuries
5.89%
Time Deposits
4.07%
Mortgages
0.09%
;ncies
.11%
2/28/98
0 Treasuries
® Time Deposits
■ Mortgages
® Agencies
B CD's/BN's
® Bankers Acceptances
® Commercial Paper
® Corporate Bonds
Loans
® Reverses
-3-
02/02/98 REDEMPTION
CP
GECC
02/02/98
5.620
$50,000
3
23,416.67
5.700
CP
GECC
02/02/98
5.620
50,000
3
23,416.67
5.700
CP
GECC
02/02/98
5.620
50,000
3
23,416.67
5.700
CP
GECC
02/02/98
5.620
50,000
3
23,416.67
5.700
CP
GECC
02/02/98
5.620
50000
3
23,416.67
5.700
CP
GECC
02/02/98
5.620
50,000
3
23,416.67
5.700
CP
Transam
02/02/98
5.550
33,000
4
20,350.00
5.630
CP
GMAC
02/02/98
5.450
50,000
4
30,277.78
5.529
CP
GMAC
02/02/98
5.450
50,000
4
30,277.78
5.529
CP
GMAC
02/02/98
5.450
50,000
4
30,277.78
5.529
CP
GMAC
02/02/98
5.450
50,000
4
30,277.78
5.529
CP
GMAC
02/02/98
5.530
10,000
7
10,752.78
5.612
CP
GMAC
02/02/98
5.530
50,000
7 _,.
53,763.89
5.612
CP
Amer Exp
02/02/98
5.500
50,000
7
53,472.22
5.582
CP
Amer Exp
.02/02/98
5.500
50,000
7
53,472.22
5.582
CP
Amer Exp
02/02/98
5.500
50,000
7
53,472.22
5.582
CP
Morg Stan
02/02/98
5.470
50,000
10
75,972.22
5.554
CP
Morg Stan
02/02/98
5.470
50,000
10
75,972.22
5.554
CP
Conagra
02/02/98
5.540
46,931
11
79,443.75
5.626
CP
Morg Stan
02/02/98
5.470
17,000
11
28,413.61
5.555
CP
Morg Stan
02/02/98
5.470
50,000
11
83,569.45
5.555
CP
Lehman
02/02/98
5.500
40,000
12
73,333.33
5.586
CP
Lehman
02/02/98
5.500
50,000
12
91,666.67
5.586
CP
Lehman
02/02/98
5.500
50,000
12
91,666.67
5.586
CP
Amer Exp
02/02/98
5.460
50,000
12
91,000.00
5.545
CP
Amer Exp
02/02/98
5.460
50,000
12
91,000.00
5.545
CP
Amer Exp
02/02/98
5.460
50,000
12
91,000.00
5.545
SALE -/
Treas
Note
5.750%
12/31/98
5.540
49,770
5
37,802.81
5.616
Treas
Note
7.000%
04/15/99
5.540
50,000
5
39,141.64
5.616
PURCHASE
FFCB
5.300%
02/02/99
5.450
50,000
FFCB
5.300%
02/02/99
5.450
50,000
FFCB
5.300%
02/02/99
5.450
50,000
BN
Fst Chic
5.480%
05/08/98
5.480
50,000
CD
Montreal
5.510%
03/27/98
5.510
50,000
CD
Deutsche
5.500%
06/30/98
5.500
50,000
CD
Hong Kong
5.540%
06/30/98
5.530
50,000
CD
Hong Kong
5.540%
06/30/98
5.530
50,000
CD
Hong Kong
5.540%
06/30/98
5.530
50,000
CD
Hong Kong
5.540%
06/30/98
5.530
50,000
CP
GECC
02/03/98
5.700
50,000
CP
GECC
02/03/98
5.700
50,000
CP
GECC
02/03/98
5.700
50,000
CP
GECC
02/03/98
5.700
50,000
CP
GECC
02/03/98
5.700
50,000
—4—
02/02/98 REDEMPTION
CID
GECC
02/03/98
5.700
50,000
CID
Heller
02/10/98
5.750
50,000
CID
Salomon
03/02/98
5.500
50,000
CID
Salomon
03/02/98
5.500
50,000
CID
GMAC
03/02/98
5.490
50,000
CID
--GMAC
03/02/98
5.490
50,000
CID
Comnwealth
03/02/98
5.490
50.000
CID
Comnwealth
03/03/98
5.670
15,000
CID
GE
03/03/98
5.490
50,000
CID
GE
03/03/98
5.490
50,000
CID
Morg Stan
03/06/98
5.500
50,000
CID
GMAC
06/26/98
5.410
50,000
CID
GMAC
06/26/98
5.410
50,000
CID
Bkrs Trst
06/30/98
5.400
50,000
CID
Bkrs Trst
06/30/98
5.400
50,000
CID
Morg Stan
06/30/98
5.400
50,000
CID
Morg Stan
06/30/98
5.400
50,000
CID
Conagra
03/03/98
5.580
40,000
02/03/98 REDEMPTION
CID
GECC
02/03/98
5.700
50,000
1
7,916.67
5.780
CID
GECC
02/03/98
5.700
50,000
1
7,916.67
5.780
CID
GECC
02/03/98
5.700
50,000
1
7,916.67
5.780
CID
GECC
02/03/98
5.700
50,000
1
7,916.67
5.780
CID
GECC
02/03/98
5.700
50,000
1
7,916.67
5.780
CP
GECC
02/03/98
5.700
50,000
1
7,916.67
5.780
CID
FMCC
02/03/98
5.740
50,000
62
494,277.78
5.877
CP
FMCC
02/03/98
5.740
50,000
62
494,277.78
5.877
PURCHASE
CID
GECC
02/04/98
5.500
50,000
CID
GECC
02/04/98
5.500
50,000
CP
GECC
02/04/98
5.500
50,000
CID
GECC
02/04/98
5.500
50,000
CP
GECC
02/04/98
5.500
50,000
CID
FMCC
02/06/98
5.500
50,000
CID
FMCC
02/06/98
5.500
50,000
CID
Conagra
02/10/98
5.540
50,000
CID
GECC
02/06/98
5.460
50,000
CID
GECC
02/06/98
5.460
50,000
CP
GECC
02/06/98
5.460
50,000
—5—
02/04/98 REDEMPTION
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
Unocal
PURCHASE
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
GECC
PURCHASE .cI
Disc Note
FNMA
Disc Note
FNMA
FNMA
FNMA
02/05/98 SALE -c/
02/04/98
5.500
50,000
1
7,638.89
5.577
02/04/98
5.500
50,000
1
7,638.89
5.577
02/04/98
5.500
50,000
1
7,638.89
5.577
02/04/98
5.500
50,000
1
7,638.89
5.577
02/04/98
5.770
18,600
33
98,378.50
5.881
02/05/98
5.430
02/05/98
5.430
02/05/98
5.430
02/05/98
5.430
02/05/98
5.430
03/03/98
5.430
05/21 /98
5.430
6.810% 05/15/00
5.430
6.480% 04/26/01
5.430
CD
CIBC
5.780% 02/05/98
5.780
CD
Stan Chart
5.810% 02/05/98
5.800
REDEMPTION
CP
GECC
02/05/98
5.430
CP
GECC
02/05/98
5.430
CP
GECC
02/05/98
5.430
CP
GECC
02/05/98
5.430
CP
GECC
02/05/98
5.430
Treas
Bill
02/05/98
5.330
Treas
Bill
02/05/98
5.330
RRS
Treas
Bill
05/28/98
5.200
Treas
Bill
05/28/98
5.200
Treas
Bill
05/28/98
5.200
RRP
Treas
Bill
02/05/98
5.220
Treas
Bill
02/05/98
5.220
50,000
50,000
50,000
50,000
50,000
15,680
25,000
30,000
30,000
50,000
50,000
50,000
1
7,541.67
5.506
50,000
1
7,541.67
5.506
50,000
1
7,541.67
5.506
50,000
1
7,541.67
5.506
50,000
1
7,541.67
5.506
50,000
1
2,540,343.75
5.465
50,000
1
2,540,343.75
5.465
50,000
50,000
50,000
50,000 64
50,000 64
(459,742.80) -5.292
(459,742.80) -5.292
Wm
02/05/98 PURCHASE y/
CP
Morg Stan
03/06/98
5.480
50,000
CP
Morg Stan
03/06/98
5.480
50,000
CP
Morg Stan
03/06/98
5.480
50,000
PURCHASE
MTN
FMCC
8.000%
01 /15/99
5.570
6,300
MTN
GMAC
7.750%
01 /15/99
5.580
6,386
MTN
Chrysler
5.625%
01 /15/99
5.580
7,000
MTN
FMCC
5.625%
01 /15/99
5.570
11,150
CP
GECC
02/06/98
5.440
20,000
CP
GECC
02/06/98
5.440
50,000
CP
GECC
02/06/98
5.440
50,000
CP
GECC
02/06/98
5.440
50,000
CP
GECC
02/06/98
5.440
50,000
CP
GECC
02/06/98
5.440
50,000
CP
GECC
02/06/98
5.440
50,000
CP
Assoc
02/06/98
5.420
50,000
CP
Assoc
02/06/98
5.420
50,000
CP
Assoc
02/06/98
5.420
50,000
CP
Assoc -
02/06/98
5.420
50,000
CP
Assoc
02/06/98
5.420
50,000
02/06/98 REDEMPTION
CP
GECC
02/06/98
5.440
20,000
1
3,022.22
5.516
CP
GECC
02/06/98
5.440
50,000
1
7,555.56
5.516
CP
GECC
02/06/98
5.440
50,000
1
7,555.56
5.516
CP
GECC
02/06/98
5.440
50,000
1
7,555.56
5.516
CP
GECC
02/06/98
5.440
50,000
1
7,555.56
5.516
CP
GECC
02/06/98
5.440
50,000
1
7,555.56
5.516
CP
GECC
02/06/98
5.440
50,000
1
7,555.56
5.516
CP
Assoc
02/06/98
5.420
50,000
1
7,527.78
5.496
CP
Assoc
02/06/98
5.420
50,000
1
7,527.78
5.496
CP
Assoc
02/06/98
5.420
50,000
1
7,527.78
5.496
CP
Assoc
02/06/98
5.420
50,000
1
7,527.78
5.496
CP
GECC
02/06/98
5.460
50,000
3
22,750.00
5.538
CP
GECC
02/06/98
5.460
50,000
3
22,750.00
5.538
CP
GECC
02/06/98
5.460
50,000
3
22,750.00
5.538
CP
FMCC
02/06/98
5.500
50,000
3
22,916.67
5.578
CP
FMCC
02/06/98
5.500
50,000
3
22,916.67
5.578
CP
FMCC
02/06/98
5.500
50,000
3
22,916.67
5.578
CP
FMCC
02/06/98
5.550
50,000
3
22,916.67
5.578
CP
Textron
02/06/98
5.700
39,000
32
197,600.00
5.808
CP
Country
02/06/98
5.770
49,200
64
504,682.67
5.910
CP
SRAC
02/06/98
5.650
50,000
88
690,555.56
5.808
CP
SRAC
02/06/98
5.650
10,000
88
138,111.11
5.808
—7—
02/06/98 SALE s/
Disc Note FNMA
03/03/98
5.430
15,680
2
4,597.40
5.505
Disc Note FNMA
05/21/98
5.430
25,000
2
7,273.18
5.505
FNMA
6.810% 05/15/00
5.430
30,000
2
9,031.90
5.505
FNMA
6.480% 04/26/01
5.430
30,000
2
9,264.18
5.505
PURCHASE
CP
Country
02/09/98
5.400
22,020
CP
Country
02/09/98
5.400
50,000
CP
Country
02/09/98
5.400
50,000
CP
Assoc
02/09/98
5.400
50,000
CP
Assoc
02/09/98
5.400
50,000
CP
Assoc
02/09/98
5.400
50,000
CP
Assoc
02/09/98
5.400
50,000
CP
Morg Stan
02/09/98
5.400
50,000
CP
Morg Stan
02/09/98
5.400
50,000
CP
Morg Stan
02/09/98
5.400
50,000
CP
Morg Stan
02/09/98
5.400
50,000
CP
GECC
02/09/98
5.400
50,000
CP
GECC
02/09/98
5.400
50,000
CP
GECC
02/09/98
5.400
50,000
CP
GECC
02/09/98
5.400
50,000
CP
GECC
02/09/98
5.400
50,000
CP
GECC
02/09/98
5.400
50,000
CP
GECC
02/09/98
5.400
50,000
CP
GECC
02/09/98
5.400
50,000
CP
FMCC
02/10/98
5.390
15,000
MTN
FMCC (FR)
6.176% 03/21 /01
5.700
15,000
02/09/98 REDEMPTION
CD
Hypo
5.670% 02/09/98
5.660
50,000
94
738,963.46
5.738
CD
Hypo
5.670% 02/09/98
5.660
50,000
94
738,963.46
5.738
CP
Country
02/09/98
5.400
22,020
3
9,909.00
5.477
CP
Country
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
Country
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
Assoc
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
Assoc
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
Assoc
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
Assoc
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
Morg Stan
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
Morg Stan
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
Morg Stan
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
Morg Stan
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
GECC
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
GECC
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
GECC
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
GECC
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
GECC
02/09/98
5.400
50,000
3
22,500.00
5.477
IBM
02/09/98 REDEMPTION
CP
GECC
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
GECC
02/09/98
5.400
50,000
3
22,500.00
5.477
CP
Merril
02/09/98
5.560
32,000
11
54,364.44
5.646
CP
Country
02/09/98
5.540
36,348
11
61,529.09
5.626
CP
Amer Exp
02/09/98
5.570
50,000
38
293,972.22
5.680
CP
Amer Exp
02/09198
5.570
45,000
38
264,575.00
5.680
CP
GMAC
02/09/98
5.640
50,000
41
321,166.67
5.755
CP
G MAC
02/09/98
5.640
50,000
41
321,166.67
5.755
CP
Hertz
02/09/98
5.800
50,000
61
491,388.89
5.938
CP
Salomon
02/09/98
5.730
50,000
67
533,208.33
5.872
CP
Salomon
02/09/98
5.730
50,000
67
533,208.33
5.872
CP
Merrill
02/09/98
5.750
25,000
68
271,527.78
5.893
CP
Hertz
02/09/98
5.810
25,000
68
274,361.11
5.956
CP
Heller
02/09/98
6.000
50,000
88
733,333.33
6.173
CP
Heller
02/09/98
5.680
50,000
154
1,214,888.89
5.902
PURCHASE
CP
GECC
02/10/98
5.520
50,000
CP
GECC
02/10/98
5.520
50,000
CP
GECC
02/10/98
5.520
50,000
CP
GECC
02/10/98
5.520
50,000
CP
GECC
02/10/98
5.520
50,000
CP
GECC
02/10/98
5.520
50,000
CP
Heller
02/17/98
5.720
50,000
CP
Heller
02/17/98
5.720
50,000
CP
Salomon
02/11/98
5.500
50,000
CP
Salomon
02/13/98
5.500
50,000
CP
Salomon
02/13/98
5.500
50,000
CP
Salomon
02/13/98
5.500
50,000
CP
Hertz
02/13/98
5.500
50,000
CP
Hertz
02/13/98
5.500
25,000
CP
GECC
02/10/98
5.520
50,000
CP
GECC
02/10/98
5.520
40,000
CD
World
5.500%
02/17/98
5.520
50,000
CP
Merrill
-02/17/98
5.490
50,000
CP
Merrill
02/17/98
5.490
37,000
CD
World
5.500%
02/17/98
5.520
50,000
CD
World
5.500%
02/17/98
5.520
50,000
CD
World
5.500%
02/17/98
5.520
50,000
PURCHASE Q1
Treas
Note
5.875% 08/15/98
5.500
50,000
Treas
Note
7.875% 08/15/01
5.500
45,450
Disc
Note
07/22/98
5.530
50,000
Disc
Note
07/22/98
5.530
50,000
Disc
Note
07/22/98
5.530
50,000
Disc
Note
04/13/98
5.530
50,000
Disc
Note
07/31/98
5.530
33,480
.ME
02/09/98 PURCHASE -a/
Treas Note
Treas Note
Treas Note
02/10/98 SALE a/
6.000% 05/31/98 5.500 50,000
6.000% 05/31/98 5.500 48,913
6.750% 05/31/99 5.500 30,000
Treas
Note
6.000% 05/31/98
5.500
50,000
1
7,590.76
5.576
Treas
Note
6.000% 05/31/98
5.500
48,913
1
7,425.76
5.576
Treas
Note
6.750% 05/31 /99
5.500
30,000
1
4,628.25
5.576
Disc
Note
07/22/98
5.530
50,000
1
7,346.60
5.606
Disc
Note
07/22/98
5.530
50,000
1
7,346.60
5.606
Disc
Note
07/22/98
5.530
25,000
1
3,673.30
5.606
Disc
Note
04/13/98
5.530
50,000
1
7,449.99
5.606
Disc
Note
04/13/98
5.530
33,480
1
4,905.72
5.606
Treas
Note
08/15/98
5.500
50,000
1
7,709.01
5.576
Treas
Note
08/15/01
5.500
45,450
1
7,568.76
5.576
REDEMPTION
CP
JP Morgan
02/10/98
5.750
10,000
55
87,847.22
5.881
CP
JP Morgan
02/10/98
5.750
50,000
55
439,236.11
5.881
CP
GMAC
02/10/98
5.750
50,000
60
479,166.67
5.886
CP
Country
02/10/98
5.540
40,000
12
73,866.67
5.627
CP
Heller
02/10/98
5.750
50,000
8
63,888.89
5.837
CP
Conagra
02/10/98
5.540
50,000
7
53,861.11
5.623
CP
FMCC
02/10/98
5.390
15,000
4
8,983.33
5.468
CP
FMCC
02/10/98
5.390
50,000
4
29,944.44
5.468
CP
FMCC
02/10/98
5.390
50,000
4
29,944.44
5.468
CP
FMCC
02/10/98
5.390
50,000
4
29,944.44
5.468
CP
GECC
02/10/98
5.520
50,000
1
7,666.67
5.597
CP
GECC
02/10/98
5.520
50,000
1
7,666.67
5.597
CP
GECC
02/10/98
5.520
40,000
1
6,133.33
5.597
CP
GECC
02/10/98
5.520
50,000
1
7,666.67
5.597
CP
GECC
02/10/98
5.520
50,000
1
7,666.67
5.597
CP
GECC
02/10/98
5.520
50,000
1
7,666.67
5.597
CP
GECC
02/10/98
5.520
50,000
1
7,666.67
5.597
CP
GECC
02/10/98
5.520
50,000
1
7,666.67
5.597
CP
GECC
02/10/98
5.520
50,000
1
7,666.67
5.597
PURCHASE
CP
GECC
02/11/98
5.490
50,000
CP
GECC
02/11/98
5.490
50,000
CP
GECC
02/11/98
5.490
50,000
CP
GECC
02/11/98
5.490
50,000
CP
GECC
02/11/98
5.490
50,000
CP
GECC
02/11/98
5.490
50,000
CP
Heller
02/11/98
5.600
50,000
CP
Heller
02/11/98
5.600
20,000
—10—
02/10/98 PURCHASE
CP
Assoc
02/11/98
5.460
50,000
CP
Assoc
02/11/98
5.460
50,000
CP
GMAC
02/17/98
5.500
50,000
CP
GMAC
02/17/98
5.500
50,000
CP
GMAC
02/17/98
5.500
50,000
CP
Salomon
02/13/98
5.510
50,000
CP
Salomon
02/13/98
5.510
50,000
CP
Country
02/11/98
5.500
50,000
CP
Country
02/11/98
5.500
7,435
02/11/98 REDEMPTION
CP
Morg Stan
02/11/98
5.750
50,000
69
551,041.65
5.894
CP
Morg Stan
02/11/98
5.750
50,000
69
551,041.65
5.894
CP
Baxter
02/11/98
6.150
35,000
50
298,958.33
6.289
CD
Bayer Lnds
5.760% 02/11/98
5.740
45,000
61
437,689.69
5.819
CD
BN Paris
5.750% 02/11/98
5.730
50,000
61
485,474.63
5.809
CP
Salomon
02/11/98
5.500
50,000
2
15,277.78
5.578
CP
GECC
02/11/98
5.490
50,000
1
7,625.00
5.567
CP
GECC
02/11/98
5.490
50,000
1
7,625.00
5.567
CP
GECC
02/11/98
5.490
50,000
1
7,625.00
5.567
CP
GECC
02/11/98
5.490
50,000
1
7,625.00
5.567
CP
GECC
02/11/98
5.490
50,000
1
7,625.00
5.567
CP
GECC
02/11/98
5.490
50,000
1
7,625.00
5.567
CP
Country
02/11/98
5.500
50,000
1
7,638.89
5.577
CP
Country
02/11/98
5.500
7,435
1
1,135.90
5.577
CP
Heller
02/11/98
5.600
50,000
1
7,777.78
5.678
CP
Heller
02/11/98
5.600
20,000
1
3,111.11
5.678
CP
Assoc
02/11/98
5.460
50,000
1
7,583.33
5.536
CP
Assoc
02/11/98
5.460
50,000
1
7,583.33
5.536
PURCHASE
CP
SRAC
07/29/98
5.400
50,000
CP
GECC
07/14/98
5.390
50,000
CD
Deutsche
5.650% 07/06/98
5.510
30,060
CP
Heller
02/13/98
5.680
50,000
CP
Heller
02/13/98
5.680
20,000
CP
Assoc
02/13/98
5.580
50,000
CP
Assoc
02/13/98
5.580
50,000
CP
Assoc
02/13/98
5.580
50,000
CP
Assoc
02/13/98
5.580
50,000
BN
B/A
5.500% 07/01/98
5.500
50,000
BN
B/A
5.500% 07/01/98
5.500
50,000
—11—
02/13/98 SALE
Treas
Bill
06/25/98
5.090
50,000
231
1,751,521.00
5.849
Treas
Bill
06/25/98
5.090
50,000
231
1,751,521.00
5.849
Treas
Bill
06/25/98
5.090
50,000
231
1,751,521.00
5.849
Treas
Bill
06/25/98
5.090
50,000
231
1,751,521.00
5.849
REDEMPTION
CP
Assoc
02/13/98
5.580
50,000
2
15,500.00
5.659
CP
Assoc
02/13/98
5.580
50,000
2
15,500.00
5.659
CP
Assoc
02/13/98
5.580
50,000
2
15,500.00
5.659
CP
Assoc
02/13/98
5.580
50,000
2
15,500.00
5.659
CP
Salomon
02/13/98
5.500
50,000
4
30,555.56
5.579
CP
Salomon
02/13/98
5.500
50,000
4
30,555.56
5.579
CP
Salomon
02/13/98
5.500
50,000
4
30,555.56
5.579
CP
Salomon
02/13/98
5.510
50,000
3
22,958.33
5.589
CP
Salomon
02/13/98
5.510
50,000
3
22,958.33
5.589
CP
Heller
02/13/98
5.680
50,000
2
15,777.78
5.760
CP
Heller
02/13/98
5.680
20,000
2
6,311.11
5.760
CP
Hertz
02/13/98
5.500
50,000
4
30,555.56
5.579
CP
Hertz
02/13/98
5.500
25,000
4
15,277.78
5.579
PURCHASE
CP
Heller
02/27/98
5.720
50,000
CP
Heller
02/27/98
5.720
25,000
CP
Bear
04/01 /98
5.490
50,000
CP
Bear
04/01 /98
5.490
20,000
CP
GECC
03/04/98
5.500
50,000
CP
GECC
03/04/98
5.500
50,000
CP
GECC
03/04/98
5.500
50,000
CP
GECC
03/04/98
5.500
50,000.
CP
GE
03/10/98
5.500
50,000
CP
GE
03/10/98
5.500
50,000
CP
GE
03/10/98
5.500
50,000
CP
GE
03/10/98
5.500
50,000
CP
Lehman
07/01 /98
5.430
50,000
CP
Lehman
07/01 /98
5.430
50,000
CP
Lehman
07/01 /98
5.430
50,000
CP
GMAC
06/01/98
5.440
50,000
CP
GMAC
06/01/98
5.440
25,000
CP
Conagra
03/27/98
5.600
12,000
CP
Salomon
06/01/98
5.450
50,000
CP
Salomon
06/01/98
5.450
50,000
CP
Salomon
06/01/98
5.450
30,000
CD
World
5.490%
02/27/98
5.510
50,000
CD
World
5.490%
02/27/98
5.510
50,000
CD
World
5.490%
02/27/98
5.510
50,000
CD
World
5.490%
02/27/98
5.510
15,000
—12—
02/15/98 REDEMPTION
MTN Transam 8.375% 02/15/98 5.800 14,350 376 564,184.20 5.800
02/17/98 REDEMPTION
CP
GMAC
02/17/98
5.500
50,000
7
53,472.22
5.582
CP
GMAC
02/17/98
5.500
50,000
7
53,472.22
5.582
CP
GMAC
02/17/98
5.500
50,000
7
53,472.22
5.582
CP
GMAC
02/17/98
5.500
50,000
7
53,472.22
5.582
CD
World
5.500%
02/17/98
5.520
50,000
8
221.95
5.596
CD
World
5.500%
02/17/98
5.520
50,000
8
221.95
5.596
CD
World
5.500%
02/17/98
5.520
50,000
8
221.95
5.596
CD
World
5.500%
02/17/98
5.520
50,000
8
221.95
5.596
CP
Heller
02/17/98
5.720
50,000
8
63,555.56
5.806
CP
Heller
02/17/98
5.720
50,000
8
63,555.56
5.806
BA
Montreal
02/17/98
5.550
15,000
165
381,562.50
5.773
CP
Merrill
02/17/98
5.490
50,000
8
61,000.00
5.573
CP
Merrill
02/17/98
5.490
37,000
8
45,140.00
5.573
PURCHASE
CP
GMAC
02/18/98
5.850
50,000
CP
GMAC
02/18/98
5.850
50,000
CP
GMAC
02/18/98
5.850
50,000
CP
GMAC
02/18/98
5.850
50,000
CP
Morg Stan
02/18/98
5.850
50,000
CP
Baxter
02/18/98
5.870
19,500
CP
Baxter
02/18/98
5.870
50,000
CP
Conagra
02/18/98
5.890
24,343
CP
Heller
02/18/98
5.900
50,000
CP
Heller
02/18/98
5.900
50,000
Disc Note
FHLB
04/13/98
5.850
41,500
PURCHASE s/
Disc Note
FHLB
08/14/98
5.850
35,000
Disc Note
FHLB-
08/14/98
5.850
35,000
Disc Note
FNMA
06/12/98
5.850
45,000
Disc Note
FNMA
07/30/98
5.850
45,000
02/18/98 REDEMPTION
CD
Nova Scotia
5.780%
02/18/98
5.780
50,000
64
513,777.78
5.860
CD
Stand Chart
5.790%
02/18/98
5.780
50,000
64
513,786.82
5.860
CD
Stand Chart
5.790%
02/18/98
5.780
50,000
64
513,786.82
5.860
CD
BN Paris
5.790%
02/18/98
5.780
50,000
64
513,786.82
5.860
CD
BN Paris
5.790%
02/18/98
5.780
10,000
64
102,757.36
5.860
CD
CIBC
5.813%
02/18/98
5.813
25,000
71
286,613.19
5.893
CD
CIBC
5.813%
02/18/98
5.813
50,000
71
573,226.39
5.893
—13—
02/18/98 REDEMPTION
CP
GMAC
02/18/98
5.850
50,000
1
8,125.00
5.932
CP
GMAC
02/18/98
5.850
50,000
1
8,125.00
5.932
CP
GMAC
02/18/98
5.850
50,000
1
8,125.00
5.932
CP
GMAC
02/18/98
5.850
50,000
1
8,125.00
5.932
CP
Morg Stan
02/18/98
5.850
50,000
1
8,125.00
5.932
CP
Baxter
02/18/98
5.870
19,500
1
3,179.58
5.952
CP
Baxter
02/18/98
5.870
50,000
1
8,152.78
5.952
CP
Conagra
02/18/98
5.890
24,343
1
3,982.79
5.972
CP
Heller
02/18/98
5.900
50,000
1
8,194.40
5.982
CP
Heller
02/18/98
5.900
50,000
1
8,194.44
5.982
MTN (FR) ,
World
6.063%
02/18/98
5.425
11,000
748
1,304,548.53
5.778
SALE -c/
Disc Note
FHLB
04/13/98
5.850
41,500
1
6,548.91
5.931
Disc Note
FHLB
08/14/98
5.850
35,000
1
5,426.20
5.931
Disc Note
FNMA
06/12/98
5.850
45,000
1
7,039.34
5.931
Disc Note
FNMA
07/30/98
5.850
45,000
1
6,985.55
5.931
PURRCHASE
CD
Hypo
5.520%
05/20/98
5.510
50,000
CD
Hypo
5.520%
05/20/98
5.510
50,000
CD
Stand Chart
5.530%
05/27/98
5.520
50,000
CD
Stand Chart
5.530%
05/27/98
5.520
50,000
CP
GECC
02/19/98
5.600
10,000
CP
GECC
02/19/98
5.600
50,000
CP
Assoc
02/19/98
5.550
50,000
CP
Assoc
02/19/98
5.550
50,000
CP
Heller
03/02/98
5.720
50,000
CP
Heller
03/02/98
-5.720
50,000
CP
Salomon
03/11 /98
5.500
50,000
CP
Salomon
03/11/98
5.550
50,000
CP
Hertz
03/12/98
5.500
50,000
02/19/98 REDEMPTION
CP
GECC
02/19/98
5.600
10,000
1
1,555.56
5.678
CP
GECC
02/19/98
5.600
10,000
1
7,777.78
5.678
CP
Assoc
02/19/98
5.550
50,000
1
7,708.33
5.627
CP
Assoc
02/19/98
5.550
50,000
1
7,708.33
5.627
PURCHASE
FNMA
5.360%
02/19/99
5.460
25,000
FNMA
5.360%
02/19/99
5.455
50,000
BN
B/A
5.510%
04/28/98
5.510
50,000
BN
B/A
5.510%
04/28/98
5.510
50,000
CD
Hong Kong
5.530%
06/30/98
5.530
50,000
—14—
02/19/98 PURCHASE
CD Hong Kong 5.530% 06/30/98 5.530 50,000
CP Salomon 04/01/98 5.500 50,000
CP Salomon 04/01/98 5.500 50,000
02/20/98 NO REDEMPTIONS
PURCHASE
CD
Nova Scotia
5.500% 04/28/98
5.500
50,000
CD
Stand Chart
5.502% 04/28/98
5.510
50,000
CP
Textron
04/01/98
5.620
23,000
CP
Merrill Lynch
04/28/98
5.470
37,000
CP
Merrill Lynch
04/28/98
5.470
50,000
CP
Bear
04/28/98
5.470
50,000
CP
Bear
04/28/98
5.470
50,000
CP
Lehman
05/04/98
5.500
5,000
CP
Lehman
05/04/98
5.500
50,000
02/23/98 NO REDEMPTIONS
PURCHASE
Treas
Bill
02/04/99
5.040
50,000
Treas
Bill
02/04/99
5.040
50,000
Treas
Bill
02-04-99
5.040
50,000
Treas
Bill
02/04/99
5.040
50,000
Treas
Bill
02/04/99
5.040
50,000
Treas
Bill
02/04/99
5.040
50,000
CP
Textron
04/01/98
5.630
40,000
CD
BN Paris
5.520%
04/28/98
5.510
50,000
CD
CIBC
5.530%
05/20/98
5.520
35,000
CD
Bayer Lnds
5.505%
04/28/98
5.500
50,000
CD
Bayer Lnds
5.505%
04/28/98
5.500
25,000
CD
Wachovia
5.500%
04/28/98
5.500
50,000
CD
Wachovia
5.501 %
04/28/98
5.500
50,000
CD
Hypo
5.501 %
06/01 /98
5.500
50,000
02/24/98 NO REDEMPTIONS
PURCHASE
CP
GMAC
04/01/98
5.500
50,000
CP
GMAC
04/01/98
5.500
50,000
CD
Nat W.Mstr
5.530% 05/27/98
5.510
50,000
CD
Nat W.Mstr
5.530% 05/27/98
5.510
50,000
Treas
Bills
02/04/99
5.090
50,000
Treas
Bills
02/04/99
5.090
50,000
—15—
02/24/98 PURCHASE
Treas
Bills
02/04/99
5.090
50,000
Treas
Bills
02/04/99
5.090
50,000
CP
Lehman
04/01 /98
5.520
50,000
CP
Lehman
04/01/98
5.520
10,000
CD
ANZ
5.540% 07/29/98.
5.530
50,000
02/25/98 NO REDEMPTIONS
PURCHASE
Treas
Bill
02/04/99
5.155
50,000
Treas
Note
5.375%
01 /31 /00
5.580
25,000
Treas
Note
5.375%
01 /31 /00
5.580
25,000
Treas
Note
5.375%
01 /31 /00
5.580
50,000
CD
Union
5.530%
06/30/98
5.530
50,000
CP
GECC
02/26/98
5.690
50,000
CP
GECC
02/26/98
5.690
50,000
CP
GECC
02/26/98
5.690
50,000
CP
GECC
02/26/98
5.690
50,000
CP
Lehman
05/08/98
5.530
50,000
CP
Lehman
05/08/98
5.530
5,000
CD
BN Paris
5.550%
03/31/98
5.520
50,000
CD
Nat W.Mstr
5.530%
05/29/98
5.530
50,000
CD
Nat W.Mstr
5.530%
05/29/98
5.530
50,000
CD
Bayer Lnds
5.530%
03/25/98
5.520
50,000
CD
Bayer Lnds
5.530%
03/25/98
5.520
25,000
02/26/98 REDEMPTION
CP
GECC
02/26/98
5.690
50,000
1
7,902.78
5.769
CP
GECC
02/26/98
5.690
50,000
1
7,902.78
5.769
CP
GECC
02/26/98
5.690
50,000
1
7,902.78
5.769
CP
Merrill
02/26/98
5.680
13,000
105
215,366.67
5.855
CP
Merrill
02/26/98
5.680
50,000
105
828,333.33
5.855
CP
Heller
02/26/98
6.000
50,000
106
883,333.33
6.192
CP
Bear
02/26/98
5.700
50,000
100
791,666.67
5.872
CP
Bear
02/26/98
5.700
10,000
100
158,333.33
5.872
CP
Enron
02/26/98
5.800
50,000
105
845,833.33
5.981
CP
GECC
02/26/98
5.720
50,000
71
564,055.56
5.865
CP
GECC
02/26/98
5.720
50,000
71
564,055.56
5.865
CP
Lehman
02/26/98
5.800
50,000
70
563,888.89
5.947
CP
Lehman
02/26/98
5.800
50,000
70
563,888.89
5.947
MTN
Citicorp
8.750%
02/26/98
7.140
14,705
1253
3,703,021.27
7.140
CD
Cr Anstlt
5.570%
02/26/98
5.560
50,000
52
401,561.31
5.637
CD
Cr Anstit
5.570%
02/26/98
5.560
50,000
52
401,561.31
5.637
MTN
FMCC
6.250%
02/26/98
5.750
16,900
804
2,150,463.97
5.759
BN
NationsBk
5.780%
02/26/98
5.780
50,000
71
569,972.22
5.860
BN
NationsBk
.5.780%
02/26/98
5.780
50,000
71
569,972.22
5.860
—16—
02/26/98 PURCHASE
SBA (FR)
6.000% 02/25/23
6.000
5,188
CD
B/A
5.630% 02/26/99
5.670
50,000
CD
B/A
5.630% 02/26/99
5.670
50,000
CID
GECC
02/27/98
5.660
50,000
CID
GECC
02/27/98
5.660
50,000
CID
GECC
02/27/98
5.660
50,000
CID
GECC
02/27/98
5.660
50,000
CID
SRAC
07/08/98
5.440
50,000
CID
GMAC
07/29/98
5.440
50,000
CID
GMAC
07/29/98
5.440
50,000
CID
Country
02/27/98
5.670
30,000
CID
Country
02/27/98
5.670
50,000
CID
Country
02/27/98
5.670
50,000
CID
Country
02/27/98
5.670
50,000
CID
Merrill
07/08/98
5.450
50,000
CID
Merrill
07/08/98
5.450
13,000
CID
FMCC
05/27/98
5.480
50,000
CID
FMCC
05/27/98
5.480
45,000
CID
Enron
07/01 /98
5.570
30,000
BA
B/A
05/26/98
5.430
14,500
02/27/98 REDEMPTION
CD
CIBC
5.670%
02/27/98
5.660
50,000
171
1,344,312.18
5.738
CD
CIBC
5.670%
02/27/98
5.660
50,000
171
1,344,312.18
5.738
CD
Montreal
5.680%
02/27/98
5.680
45,000
112
795,200.00
5.758
CD
Stand Chart
5.590%
02/27/98
5.580
50,000
53
410,756.11
5.657
CD
Svenska
5.790%
02/27/98
5.780
50,000
87
698,876.44
5.864
CD
Svenska
5.790%
02/27/98
5.780
50,000
87
698,876.44
5.864
CD
World
5.490%
02/27/98
5.480
15,000
42
96,191.42
5.573
CD
Tokyo-Mits
5.700%
02/27/98
5.700
100,000
177
2,802,500.00
5.779
CD
World
5.490%
02/27/98
5.510
50,000
42
320,638.06
5.573
CD
World
5.490%
02/27/98
5.510
50,000
42
320,638.06
5.573
CD
World
5.490%
02/27/98
5.510
50,000
42
320,638.06
5.573
CD
Stand Chart
5.670%
02/27/98
5.660
50,000
115
904,056.14
5.738
CD
Stand Chart
5.670%
02/27/98
5.660
50,000
115
904,056.14
5.738
CD
Nova Scotia
5.750%
02/27/98
5.750
50,000
107
854,513.89
5.829
CD
Mellon
5.625%
02/27/98
5.625
50,000
115
898,437.50
5.703
CD
Mellon
5.625%
02/27/98
5.625
50,000
115
898,437.50
5.703
CD
Rabo
5.620%
02/27/98
5.610
50,000
171
1,332,436.65
5.687
CD
Rabo
5.620%
02/27/98
5.610
50,000
171
1,332,436.65
5.687
CD
Cr Agric
5.670%
02/27/98
5.670
50,000
175
1,378,125.00
5.748
CD
Cr Agric
5.670%
02/27/98
5.670
5,000
175
137,812.50
5.748
CD
WestDeut
5.680%
02/27/98
5.680
15,000
175
414,166.67
5.758
CD
WestDeut
5.680%
02/27/98
5.680
50,000
175
1,380,555.56
5.758
CD
Svenska
5.670%
02/27/98
5.665
100,000
175
2,753,884.58
5.743
CD
CIBC
5.671%
02/27/98
5.670
50,000
171
1,346,625.00
5.748
CD
Mellon
5.700%
02/27/98
5.700
50,000
177
1,401,250.00
5.779
CD
Soc Gen
5.710%
02/27/98
5.700
50,000
177
1,401,317.01
5.779
—17—
02/27/98 REDEMPTION
CD
Mellon
5.700%
02/27/98
5.700
50,000
177
1,401,250.00
5.779
CD
Bkrs Trst
5.670%
02/27/98
5.660
50,000
177
1,391,483.23
5.738
CD
Bkrs Trst
5.670%
02/27/98
5.660
50,000
177
1,391,483.23
5.738
CD
Bkrs Trst
5.670%
02/27/98
5.660
50,000
177
1,391,483.23
5.738
CD
Bkrs Trst
5.670%
02/27/98
5.660
50,000
177
1,391,483.23
5.738
CP
Heller
02/27/98
5.720
50,000
14
111,222.22
5.812
CP
Heller
02/27/98
5.720
25,000
14
55,611.11
5.812
CP
Bkrs Trst
02/27/98
5.550
50,000
141
1,086,875.00
5.752
CP
Bkrs Trst
02/27/98
5.550
50,000
141
1,086,875.00
5.752
CP
GMAC
02/27/98
5.710
35,000
106
588,447.22
5.888
CP
GMAC
02/27/98
5.710
50,000
106
840,638.89
5.888
CP
GMAC
02/27/98
5.710
50,000
106
840,638.89
5.888
CP
Enron
02/27/98
5.800
50,000
106
853,888.89
5.982
CP
Conagra
02/27/98
5.720
25,000
56
222,444.44
5.851
CP
Salomon
02/27/98
5.790
50,000
105
844,375.00
5.971
CP
Bear
02/28/98
5.710
50,000
100
793,055.56
5.882
CP
Bear
02/28/98
5.710
50,000
100
793,055.56
5.882
CP
Heller
02/27/98
6.000
25,000
107
445,833.33
6.168
CP
Merrill
02/27/98
5.560
50,000
171
1,320,500.00
5.790
CP
Merrill
02/27/98
5.560
50,000
171
1,320,500.00
5.790
CP
Merrill
02/27/98
5.560
50,000
171
1,320,500.00
5.790
CP
GECC
02/27/98
5.550
50,000
171
1,318,125.00
5.779
CP
GECC
02/27/98
5.550
50,000
171
1,318,125.00
5.779
CP
Merill
02/27/98
5.560
50,000
171
1,320,500.00
5.790
CP
SRAC
02/27/98
5.530
50,000
171
1,313,375.00
5.758
CP
GECC
02/27/98
5.550
50,000
171
1,318,125.00
5.779
CP
GECC
02/27/98
5.550
50,000
171
1,318,125.00
5.779
CP
GMAC
02/27/98
5.590
50,000
56
434,777.78
5.717
CP
GMAC
02/27/98
5.590
50,000
56
434,777.78
5.717
CP
GMAC
02/27/98
5.590
50,000
56
434,777.78
5.717
CP
GMAC
02/27/98
5.580
12,000
169
314,340.00
5.809
CP
GMAC
02/27/98
5.580
50,000
169
1,309,750.00
5.809
CP
GMAC
02/27/98
5.580
50,000
169
1,309,750.00
5.809
CP
FMCC
02/27/98
5.510
50,000
171
1,308,625.00
5.736
CP
FMCC
02/27/98
5.510
50,000
171
1,308,625.00
5.736
CP
FMCC
02/27/98
5.510
50,000
171
1,308,625.00
5.736
CP
FMCC
02/27/98
5.510
50,000
171
1,308,625.00
5.736
CP
FMCC
02/27/98
5.510
50,000
171
1,308,625.00
5.736
CP
FMCC
02/27/98
5.510
50,000
171
1,308,625.00
5.736
CP
GMAC
02/27/98
5.560
50,000
176
1,359,111.11
5.794
CP
GMAC
02/27/98
5.560
50,000
176
1,359,111.11
5.794
CP
GMAC
02/27/98
5.560
50,000
176
1,359,111.11
5.794
CP
GECC
02/27/98
5.550
50,000
176
1,356,666.67
5.784
CP
GECC
02/27/98
5.550
50,000
176
1,356,666.67
5.784
CP
GECC
02/27/98
5.550
30,000
176
814,000.00
5.784
CP
GMAC
02/27/98
5.560
50,000
176
1,359,111.11
5.794
CP
Country
02/27/98
5.670
50,000
1
7,875.00
5.749
CP
Country
02/27/98
5.670
50,000
1
7,875.00
5.749
CP
Country
02/27/98
5.670
50,000
1
7,875.00
5.749
CP
Country
02/27/98
5.670
30,000
1
4,725.00
5.749
—18—
02/27/98 REDEMPTION
CP
GECC
02/27/98
5.660
50,000
1
7,861.11
5.739
CP
GECC
02/27/98
5.660
50,000
1
7,861.11
5.739
CP
GECC
02/27/98
5.660
50,000
1
7,861.11
5.739
CP
GECC
02/27/98
5.660
50,000
1
7,861.11
5.739
CD
Cr Agric
5.750%
02/27/98
5.750
50,000
101
806,597.22
5.829
CD
Cr Agric
5.750%
02/27/98
5.750
50,000
101
806,597.22
5.829
PURCHASE
CP
FMCC
06/01/98
5.480
50,000
CP
FMCC
06/01/98
5.480
50,000
CP
FMCC
06/01/98
5.480
50,000
CP
SRAC
05/11/98
5.510
50,000
CP
Conagra
03/27/98
5.560
50,000
CP
Hertz
03/03/98
5.690
45,000
CP
Heller
03/27/98
5.800
50,000
CP
Heller
03/27/98
5.800
50,000
CP
GECC
03/02/98
5.680
50,000
CP
GECC
03/02/98
5.680
50,000
CP
GECC
03/02/98
5.680
50,000
CP
GECC
03/02/98
5.680
50,000
CP
Country
03/12/98
5.620
45,050
CP
Enron
05/13/98
5.590
30,000
CD
Montreal
5.550%
06/01/98
5.550
50,000
CD
Soc Gen
5.850%
03/03/98
5.660
18,000
CD
Nova Scotia
5.550%
06/01/98
5.550
50,000
CD
Bayer Lnds
5.570%
06/01/98
5.550
50,000
CD
Mellon
5.550%
06/01/98
5.550
50,000
CD
Mellon
5.550%
06/01/98
5.550
50,000
—19—
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 MIS), 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.
e/ 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.
9/ Outright purchase against Reverse Repurchase Agreement.
h/ Security "SWAP" transactions.
i/ Buy back agreement.
RRS Reverse Repurchase Agreement.
RRP Termination of Reverse Repurchase Agreement.
—20—
NAME
ALHAMB�
East West Bank
East West Bank
East West Bank
BEVERLY HILLS
City National Bank
City National Bank
City National Bank
City National Bank
CHICO
North State National Bank
North State National Bank
TO Counties Bank
TO Counties Bank
North State National Bank
FRESNO
Kings River State Bank
G ENDOLE
Glendale Federal Bank
Glendale Federal Bank
Glendale Federal Bank
INGLEWOOD
Imperial Bank
Imperial Bank
Imperial Bank
Imperial Bank
Imperial Bank
Imperial Bank
Imperial Bank
Imperial Bank
LOS ANGELES
Preferred Bank
Preferred Bank
Preferred Bank
General Bank
12/18/97
5.240
12,000,000.00
03/19/98
01 /12/98
5.140
15,000,000.00
04/17/98
02/10/98
5.200
35,000,000.00
05/12/98
12/18/97
5.230
20,000,000.00
03/19/98
11 /04/97
5.390
10,000,000.00
05/05/98
01 /27/98
5.270
10,000,000.00
07/29/98
02/18/98
5.270
20,000,000.00
02/18/99
09/11 /97
5.370
500,000.00
03/11 /98
10/06/97
5.290
2,000,000.00
04/07/98
01 /13/98
5.070
10,000,000.00
04/16/98
01 /21 /98
5.170
10,000,000.00
04/22/98
02/25/98
5.320
1,000,000.00
08/24/98
01 /15/98 5.190 1,000,000.00 07/15/98
12/29/97 5.360 3,000,000.00 03/31/98
01 /08/98 5.260 5,000,000.00 04/09/98
10/20/97 5.340 100,000,000.00 04/17/98
12/10/97
5.340
25,000,000.00
03/11 /98
12/18/97
5.260
11,000,000.00
03/19/98
12131 /97
5.430
36,000,000.00
03/31 /98
01 /15/98
5.270
25,000,000.00
04/21 /98
01 /29/98
5.290
5,000,000.00
05/06/98
02/03/98
5.290
10,000,000.00
05/06/98
02/05/98
5.290
20,000,000.00
05/08/98
02/11 /98
5.310
20,000,000.00
08/11 /98
12/16/97
5.220
5,000,000.00
03/17/98
12/18/97
5.220
4,000,000.00
03/19/98
09/22/97
5.310
9,000,000.00
03/24/98
12/04/97
5.300
10,000,000.00
03/30/98
—21—
LOS ANGELES
General Bank
12/19/97
5.250
15,000,000.00
03/31/98
Preferred Bank
12/31 /97
5.410
3,000,000.00
04/01 /98
Community Bank
12/19/97
5.430
10,000,000.00
06/17/98
Community Bank
12/23/97
5.510
5,000,000.00
06/22/98
Preferred Bank
02/18/98
5.210
4,000,000.00
05/19/98
Preferred Bank
02/24/98
5.250
2,000,000.00
05/26/98
General Bank
01/08/98
5.250
25,000,000.00
04/13/98
Preferrred Bank
01/05/98
5.190
3,000,000.00
07/15/98
Community Bank
01 /12/98
5.210
20,000,000.00
07/15/98
General Bank
12/01/97
5.480
28,000,000.00
11/06/98
Community Bank
02/09/98
5.270
15,000,000.00
08/11/98
MANTECA
Delta National Bank
01 /23/98
5.170
1,000,000.00
04/24/98
Delta National Bank
01 /22/98
5.240
2,000,000.00
07/22/98
POMONA
Pomona First Fed Bk & Trst
11/25/97
5.550
8,000,000.00
05/27/98
PETALUMA
Bank of Petaluma
02/11 /98
5.280
1,000,000.00
08/11 /98
SACRAMENTO
Union Bank of California
12/31/97
5.410
100,000,000.00
03/31/98
Sanwa Bank of California
11/05/97
5.390
7,000,000.00
05/06/98
River City Bank
01 /12/98
5.130
5,000,000.00
04/13/98
Sanwa Bank of California
01/27/98
5.270
5,000,000.00
07/29/98
Union Bank of California
02/04/98
5.250
100,000,000.00
05/06/98
Union Bank of California
02/17/98
5.220
50,000,000.00
05/18/98
River City Bank
02/19/98
5.260
5,000,000.00
07/20/98
Sanwa Bank of California
02/18/98
5.250
50,000,000.00
08/17/98
River City Bank
02/19/98
5.270
5,000,000.00
08/18/98
Sanwa Bank of California
02/25/98
5.350
10,000,000.00
08/24/98
SAN DIEGO
Bank of Commerce San Diego
12/18/97
5.230
14,000,000.00
03/19/98
San Diego First Bank
12/03/97
5.450
1,500,000.00
06/02/98
San Diego First Bank
12/22/97
5.450
1,500,000.00
06/23/98
—22—
SON FRANCISCO
TransPacific National Bank
TIME DEPOSIT
DEPOSIT DALE
09/16/97
YIELD PAR
5.650
AMOUNT (t1 MATURITY
800,000.00
DATE
03/17/98
Bank of Canton California
12/04/97
5.420
5, 000 000.00
06/04/98
Bank of Canton California
12/09/97
5.440
5,000,000.00
5,000,000.00
06/09/98
12/01/98
Bank of Canton California
12/01/97
12/15/97
5.500
5.450
5,000 ,000.00
12/15/98
Bank of Canton California
Bank of Canton California
01/21/98
5.230
5, 000 000.00
01 /21 /99
Bank of Canton California
02/04/98
5.260
5,000,000.00
08/04/98
Bank of Canton California
02/11/98
5.300
5,000,000.00
02/11/99
AN LEANDRO
Bay Bank of Commerce
01 /07/98
5.280
2,000,000.00
04/08/98
Bay Bank of Commerce
01 /12/98
5.130
2,000,000.00
04/10/98
SAN LUIS OBISPO
First Bank of San Luis Obispo
12/11/97
5.240
1,000,000.00
03/12/98
First Bank of San Luis Obispo
01/07/98
5.280
1,000,000.00
04/08/98
First Bank of San Luis Obispo
02/11 /98
5.200
2,000,000.00
05/13/98
First Bank of San Luis Obispo
02/24/98
5.270
2,500,000.00
05/27/98
First Bank of San Luis Obispo
02/04/98
5.280
3,600,000.00
08/04/98
SAN Qe�eFl
West America Bank
01/13/98
5.120
25,000,000.00
04/17/98
West America Bank
01 /22/98
5.170
25,000,000.00
04/24/98
West America Bank
01/29/98
5.260
25,000,000.00
04/30/98
SANTA ANA
Grand National Bank
12/09/97
5.410
1,500,000.00
03/10/98
Grand National Bank
12/10/97
5.310
1,500,000.00
03/11/98
Grand National Bank
12/31/97
5.480
95,000.00
06/30/98
STANISLAUS
North Valley Bank
09/22/97
5.300
3,000,000.00
03/24/98
TORRANCE
China Trust Bank (U.S.A.)
12/11 /97
5.270
10,000,000.00
03/11 /98
China Trust Bank (U.S.A.)
12/31/97
5.410
5,000,000.00
03/31/98
—23—
TUSTIN
Sunwest Bank
12/31 /97
5.400
500,000.00
03/31 /98
Sunwest Bank
01 /08/98
5.250
2,800,000.00
04/09/98
Sunwest Bank
01 /14/98
5.240
1,000,000.00
04/21 /98
VACAVILLE
Continental Pacific Bank
12/03/97
5.280
1,000,000.00
03/04/98
VICTORVILLE
Citizens Business Bank
09/11 /97
5.400
10,000,000.00
03/11 /98
Citizens Business Bank
12/10/97
5.590
10,000,000.00
06/09/98
Citizens Business Bank
01/09/98
5.370
10,000,000.00
07/09/98
Citizens Business Bank
01/22/98
5.230
5,000,000.00
08/06/98
Citizens Business Bank
02/11 /98
5.300
10,000,000.00
09/23/98
Citizens Business Bank
02/11/98
5.320
5,000,000.00
10/06/98
WALNUT CREEK
Bank of the West
01 /30/98
5.270
26,500,000.00
07/31 /98
Bank of the West
02/19/98
5.250
18,000,000.00
08/19/98
Bank of the West
02/18/98
5.250
19,000,000.00
08/19/98
Bank of the West
02/27/98
5.310
27,000,000.00
08/26/98
TOTAL TIME DEPOSITS AS OF FEBRUARY 27, 1998 $1,222,295,000.00
—24—
DEMAND BANK DEPOSITS
(000 omitted)
DAILY BALANCES
WARRANTS
FEBRUARY
PER BANKS
OUTSTANDING
1. -
$4339571
$197549423
2.
2999359
443,399
3.
3209381
3039678
4.
3989654
2109678
5.
3159193
3849047
6.
3119573
9659206
7.
3119573
9659206
8.
3119573
9659206
9.
1939038
7939069
10.
360,338
6669812
11.
3519756
2459171
12.
5149819
245,171
13.
519817
296829418
14.
519817
296829418
15.
519817
296829418
16.
519817
296899851
17.
3389015
369952
18.
3779659
1179295
19.
3539469
1229620
20.
2289726
3529139
21.
2289726
3529139
22.
2289726
3529126
23.
2419910
3879105
24.
3149497
3879105
25.
2685750
192769010
26.
3239602
4069,981
27.
2989703
14959886
28.
2989703
192999790
a/
AVERAGE DOLLAR DAYS $2799664
a/ The prescribed bank balance for February was $390,772.00. This consisted
of $230,513 in compensating balances for services, $170,652.00 uncollected
funds and a deduction of $10,393.00 for January delayed deposit credit.
-25-
DESIGNATION BY POOLED MONEY INVESTMENT BOARD
OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS
No. 1584
In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its
meeting on February 18, 1998, has determined and designated the amount of money available for deposit and investment
under said sections. In accordance with sections 16480.1 and 16480.2 of the Government Code, it is the intent that the
money available for deposit or investment be deposited in bank accounts and savings and loan associations or invested in
securities in such a manner so as to realize the maximum return consistent with safe and prudent treasury management,
and the Board does hereby designate the amount of money available for deposit in bank accounts, savings and loan associ-
ations, and for investment in securities and the type of such deposits and investments as follows:
1. In accordance with law, for deposit in demand
bank accounts as Compensating Balance for Services $196,070,000
The active noninterest-bearing bank accounts designation constitutes a calendar -month average balance. For purposes
of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein
as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for
any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above
amount provided that the balances computed by dividing the sum of daily balances of that calendar month by the number
of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy
collection periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be
maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management.
2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest -
bearing deposits in banks and savings and loan associations as follows:
( 1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
From
02/16/98
02/23/98
03/02/98
03/09/98
03/16/98
03/23/98
03/30/98
04/06/98
04/13/98
To
02/20/98 $
02/27/98 $
03/06/98 $
03/13/98 $
03/20/98 $
03/27/98 $
04/03/98 $
04/10/98 $
04/17/98 $
Transactions
(394,300,000)
(1,590,100,000)
(459,500,000)
(670,300,000)
1,105,800,000
(776,600,000)
(1,489,200,000)
221, 000, 000
2,141,900,000
Time Deposits in ..
various Financial
Institutions
In Securities
(sections 16503a
(section 16430)*
and 16602)*
$ 28,525,405,000
$
1,172,295,000
$ 26,935,305,000
$
1,172,295,000
$ 26,475,805,000
$
1,172,295,000
$ 25,805,505,000
$
1,172,295,000
$ 26,911,305,000
$
1,172,295,000
$ 26,134,705,000
$
1,172,295,000
$ 24,645,505,000
$
1,172,295,000
$ 24,866,505,000
$
1,172,295,000
$ 27,008,405,000
$
1,172,295,000
Estimated
Total
$ 29,697,700,000
$ 28,107,600,000
$ 27,648,100,000
$ 26,977,800,000
$ 28,083,600,000
$ 27,307,000,000
$ 25,817,800,000
$ 26,038,800,000
$ 28,180,700,000
From any of the amounts specifically designated above, not more than 30 percent in the aggregate may be invested in
prime commercial paper under section 16430(e), Government Code.
Additional amounts available in treasury trust account and in the Treasury from time to time, in excess of the
amounts and for the same types of investments as specifically designated above.
Provided, that the availability of the amounts shown under paragraph 2 is subject to reduction in the amount by
which the bank accounts under paragraph 1 would otherwise be reduced below the calendar month average balance
of $ 196,070,000.
MONEY INVESTMENT BOARD:
3�
Dated: February 18, 1998
*Government Code Member/,
-26-
1 1 LN N \i Y YL;
• • \, 1\y111111,1•''1\YALN��1L`�
The State Treasurer's Office (STO) has received several inquiries from local
governmental agencies regarding the Year 2000 (Y2K) computer issue. The Y2K issue is
the inability of some computer applications, built over the last 40 years, to process
dates and date related data beyond the year 2000.
The STO has taken a proactive role in preventing the year 2000 from hindering the
daily operations of the STO. The Information Services Division of the STO has prepared
a memorandum defining STO's goals and objectives in solving the Y2K issue. If you
would like a copy of the memorandum, please call LAIF at (916) 653-3001.
Local Agency Investment
Advisory Board Meeting
The Local Agency Investment
Advisory Board held its quarterly board
meeting on March 4, 1998 at the State
Treasurer's Office.
A synopsis of the meeting is
included with your March 1998 statement.
SAVE THE BATE
LAIF Annual Conference
Socranwito Convention center
sop! a IAPOW 18,1"8
SYNOPSIS OF MINUTES LOCAL AGENCY
ADVISORY BOARD
Meeting of March 4, 1998
The Advisory Board dealt with five specific issues at this meeting.
The first issue was a report on the review of the Implementation
Guide issued by the Governmental Accounting Standards Board.
Based on the guidelines in the draft of the Implementation Guide, the
State Treasurer's Office will be able to comply with Statement 31 and
provide LAIF participants with their fair value as of June 30, 1998.
The second issue was the announcement that the LAIF is in the data
conversion phase of the LAIF system rewrite. The LAIF staff is
currently entering agency bank information into data conversion
screens for the Oracle. LAIF will run parallel systems from April 27,
1998 to approximately June 30, 1998. The anticipated
implementation date of the new Oracle system is July 1998.
The third issue was a discussion of the 1998 LAIF Conference. The
Board agreed to hold the pre -conference on September 17, 1998
although construction will be in progress on the first floor of the
building. The Board will decide on a keynote .speaker for the LAIF
Conference at the next board meeting.
The fourth issue was the announcement that that some members of
the California Municipal Treasurer's Association (CMTA) will be
touring the State Treasurer's Office on April 21, 1998 in conjunction
with their annual conference.
The issue of the $20 million limit was raised by Board member
Patricia Elliott, a discussion followed.
INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
June 10, 1998
Local Agency Investment Fund (LAIF)
Answer Book
Correspondence & Written
Material Item C
Attached please find the LAIF Answer Book dated March 31, 1998.
Staff has performed an analysis of the significant changes in the Answer Books on the
following page. Replacement pages were table of contents, 2, 4, 5, 7, 8, 21, 22, 23,
24, 35, 36, 37, 38, 49, 50, 51, 52, 53, ad 54.
F-TIPOINUTIMU
After discussion, please provide staff with further direction.
n M. Falconer, Finance Director
LAIF - ANSWER BOOK
CHANGES
Table of Contents - Added Section XX and XXI
LAIF Enabling Legislation and PMIA Enabling Legislation
I. THE FUND
Page 2 third paragraph, second sentence was expanded to read: This Section
states that "money placed with .the State Treasurer for deposit in the LAIF shall
not be subject to either (a) transfer or loan pursuant to Sections 16310, 16312 or
16313 or (b) impoundment or seizure by any state official or state agency."
II. BOARD MEMBERS
None
III. LAIF PARTICIPATION
None
IV. SELECTED INVESTMENT DATA
Average life of portfolio as of March 31, 1998 - 197 days
V. MARKET VALUATION
None
VI. MATURITY SCHEDULE
None
VII. SOURCE OF FUNDS (PMIA)
None
VIII. MANAGEMENT GOALS AND OBJECTIVES
None
IX. MONTHLY EFFECTIVE YIELD
None
X. QUARTERLY APPORTIONMENT RATES
None
XI. ADMINISTRATIVE EARNINGS (COST)
None
XII. HOW TO CALCULATE QUARTERLY EARNINGS AND APPORTIONMENT
None
XIII. POOL QUESTIONNAIRE
Refer to separate Analysis - Item E under Correspondence and Written Material.
XIV. DISCLOSURE STATEMENT
The GAO definitions, as well as the State of California Treasurer's holdings in
each category was updated to April 1, 1998.
XV. IS THE POOL INSURED
None
XVI. AUDIT PROCESS FOR WITHDRAWALS FROM LAIF
None
XVII. PMIA CLAIM SCHEDULE AUDIT PROCESS FOR PURCHASES
None
XVIII. HOW TO PARTICIPATE IN LAIF
None
XIX. REPORTING DOCUMENTS
None
XX. LAIF ENABLING LEGISLATION
This is a new section listing the legislation that created the Local Agency
Investment Fund (LAIF)
XXI PMIA ENABLING LEGISLATION
This is a new section listing the legislation and permitted investments of Pooled
Money Investment Account (PMIA). As of 3/31/98 LAIF consisted of 37.58% of
the PMIA (see page 9).
TABLE OF CONTENTS
I. TI-IE FUND..............................................................................
1
n •i
IV.
V.
I►0
M. ADMINIS
................... 3
21
....... 23
24
XII. HOW TO CALCULATE QUARTERLY EARNINGS
AND APPORTIONMENT...................................................... 25
XIII. POOL QUESTIONNAIRE...................................................... 30
XIV. DISCLOSURE STATEMENT ................................................ 35
•• .41
. •:•ri':. : t.
49
52
THE FUND
THE LOCAL AGENCY INVESTMENT FUND
The Local Agency Investment Fund (LAIF), a voluntary program created by
statute, began in 1977 as an investment alternative for California's local governments
and special districts and continues today under Treasurer Matt Fong's Administration.
The enabling legislation for the LAIF is Section 16429.1,2,3 of the California Govern-
ment Code.
This program offers local agencies the opportunity to participate in a major portfo-
lio which invests hundreds of millions of dollars, using the investment expertise of the
Treasurer's Office investment staff at no additional cost to the taxpayer. This in-house
management team is comprised of civil servants who have individually worked for the
State Treasurer's Office for over 20 years.
The LAIF is part of the Pooled Money Investment Account (PMIA). The PMIA
began in 1953 and has oversight provided by the Pooled Money Investment Board
(PM1B) and an in-house Investment Committee. The P1VIIB members are the State Trea-
surer, Director of Finance, and State Controller.
The LAIF has oversight by the Local Agency Investment Advisory Board. The
Board consists of five members as designated by statute. The Chairman is the State
Treasurer or his designated representative. Two members qualified by training and
experience in the field of investment or finance, and two members who are Treasurers,
finance or fiscal officers or business managers employed by any County, City or local
district or municipal corporation of this state, are appointed by the State Treasurer. The
term of each appointment is two years or at the pleasure of the appointing authority.
All securities are purchased under the authority of Government Code Section
16430 and 16480.4. The State Treasurer's Office takes delivery of all securities pur-
chased on a delivery versus payment basis using a third party custodian. All investments
are purchased at market, and market valuation is conducted monthly.
11
Additionally, the PMIA has Policies, Goals and Objectives for the portfolio to
make certain that our goals of Safety, Liquidity and Yield are not jeopardized and that
prudent management prevails. These policies are formulated by investment staff and
reviewed by both the PMIB and the LAIF Board on an annual basis.
The State Treasurer's Office is audited by the Bureau of State Audits on an annual
basis. The resulting opinion is included in the subsequent Pooled Money monthly report
following its publication. The Bureau of State Audits also has a continuing audit
process throughout the year. All investment and LAIF claims are audited on a daily
basis by the State Controller's Office as well as an in-house audit process involving three
separate divisions.
It has been determined that the State of California cannot declare bankruptcy
under Federal regulations, thereby allowing the Government Code Section 16429.3 to
stand. This Section states that "money placed with the state treasurer for deposit in the
LAIF shall not be subject to either: (a) transfer or loan pursuant to Sections 16310,
16312, or 16313, or (b) impoundment or seizure by any state official or state agency."
The LAIF has grown from 293 participants and $468 million in 1977 to 2,558
participants and $11.2 billion in 1998.
State Treasurer's Office
Local Agency Investment Fund
P.O. Box 942809
Sacramento, CA 94209-0001
(916) 653-3001
http://www.treasurer.ca.gov
2
Revised March 31, 1998
BOARD MEMBERS
THE LOCAL AGENCY
ADVISORY BOARD
Chairman:
Current
Board Members:
State Treasurer
Matt Fong
Linda Barnett
City Treasurer
City of Torrance
THE POOLED MONEY
INVESTMENT BOARD
Chairman:
Members:
Patricia Elliott
Manager, Financial Resources
Eastern Municipal Water District
George Jeffries
President
GW Jeffries & Associates
Leslie Wells.
Vice President
Union Bank of California
Capital Markets Group
State Treasurer
Matt Fong
State Controller
Kathleen Connell
Director of Finance
Craig Brown
3
Local Agency Investment Fund
Participation as of 3/31/98
2,558 Agencies
143 TRUSTEES 127 BONDS 52 COUNTIES
6% 5% 2% 461 CITIES
4 Revised March 31, 1998
STATE OF CALIFORNIA
INVESTMENT DIVISION
SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED)
Change in
March 31,1998
Percent From
Tyne of Security
Amount Percent
Previous Month
Governments
Bills
$294209965 8.54
0
Bonds
0 0
0
Notes
59185,272 18.28
+ 1.17
Strips
73,184 .26
+ .02
Total Governments
$7,679,421 27.08
+ 1.19
Federal Agency Coupons
$29126,382 7.51
+ .08
Certificates of Deposit
5,6979899 20.09
- 1.44
Bank Notes
19025,000 3.61
+ .03
Bankers Acceptances
1879056 .66
- .44
"epurchases
0 0
0
federal Agency Discount Notes
1,196,606 4.22
+ .54
Time Deposits
19277,390 4.50
+ .43
GNMA's
29478 .01
0
Commercial Paper
696579786 23.48
- .58
FHLMC
24,002 .08
0
Corporate Bonds
195349187 5.41
+ .50
Pooled Loans
1,1859452 4.18
- .30
GF Loans
4359000 1.53
+ 1.53
Reversed Repurchases
-669,943 -2.36
+ 1.54
Total, All Types
$28,358,716 100
AVERAGE LIFE OF PORTFOLIO AS OF MARCH 31,1998 197 DAYS
5 Revised March 31, 1998
NOTES TO MONTHLY SELECTED INVESTMENT DATA
Reverse, Repurchase - The temporary sale of owned securities, with the simultaneous agreement to
repurchase the same securities at a predetermined cost and rate on a specified future date.
The Pooled Money Investment Account from time to time enters into Reverse Repurchase Agreements
with major pre -approved securities dealers. The intent is to earn incremental interest for pool partici-
pants. Because it is viewed as incremental, earnings derived from reverses are never projected or
anticipated..
All reverses are in compliance with Government Code Sec. 16480.4, and are further discussed in the
Treasurer's Statement of Investment Policies, Goals and Objectives.
AB 55 Loans - 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 - 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 55 loan
program, General Fund loans are much more infrequently requested.
Both AB 55 and General Fund Loans have the following characteristics:
1. Amount available for loans is determined by the State Controller and EXCLUDES certain trust
monies, such as LAIF balances;
2. LAIF participants do share in the interest income paid to the Pool on each loan balance;
3. The decision to approve these loans rests in the authority of the Pooled. Money Investment Board;
4. A predetermined maximum total loan balance is capped as a specific percentage of identified
borrowable resources as determined by the State Controller.
5. No surplus monies may be loaned if such a loan would inhibit carrying out the purpose for which
the monies were originally designated.
6. Since the granting of these loans is not an investment function, the loans (AB 55, GF) are not
included in records of daily investment activity.
7. Since interest is commingled with other investment revenue, both AB 55 and General Fund loans
are included in Selected Data Reports and portfolio accountability.
8. The total monies in AB 55 and General Fund loans are figured into the Portfolio book value when
reporting portfolio size and yield.
6
Pooled
State of California
Money Investment Account
Market Valuation
3/31 /9 8
Desch do -
r :b - . .w
�a 4 1ng�Cost Pius
ccrued Interest.Pucc
•........ w s . w . H, ...,p,,,.., ..... ...........,.:.ww..S1v... <:. r-....•.......
Esttmated�
a etl/alue
w...:..e.. e< w•.. o.L
cccued lnteres
United States Treasury:
Bills
$
2,420,964,781.00
$
2,464,604,902.75
NA
Strips
$
73,184,450.00
$
94,391,750.00
NA
Notes
$
5,185,272,399.31
$
5,187,804,590.00
$
61,580,066.11
Federal Agency:
Bonds
$
1,593,880,329.46
$
1,593,119,030.00
$
24,069,016.67
Floaters
$
170,000,000.00
$
169,982,500.00
$
1,231,870.00
MBS
$
139,691,213.65
$
140,1,11,750.69
$
824,216.11
GNMA
$
2,477,668.49
$
2,853,012.95
$
24,411.95
SBA
$
222,809,965.64
$
224,143,252.69
$
2,228,877.28
FHLMC PC
$
24,002,273.39
$
25,677,024.45
$
385,379.49
Discount Notes
$
1,196,606,353.02
$
1,220,259,747.78
NA
Bankers Acceptances
$
187,055,751.78
$
187,055,751.78
NA
Corporate:
Bonds
$
972,299,704.50
$
971,913,325.45
$
16,394,259.63
Floaters
$
561,887,374.49
$
562,417,597.50
$
2,832,615.45
CDs
$
5,697,899,056.71
$
5,695,075,704.72
$
70,227,184.69
Bank Notes
$
1,025,000,000.00
$
1,024,796,984.00
$
16,104,944.44
Repurchase Agreements
$
-
$
-
NA
Time Deposits
$
1,277,390,000.00
$
1,277,390,000.00
NA
AB 55 & G F Loans
$
.1,620,452,146.00
$
1,620,452,146.00
NA
Commercial Paper
$
6,657,785,847.58
$
6,664,904,125.38
NA
Reverse Repurchase
$
669,943,000.00
$
669,943,000.00
$
1,409,861.75
TOTAL
$
28,358,716,315.02
1 $
28,457,010,196.14
1 $
194,492,980.07
Estimated Market Value Including Accrued Interest $ 28,651,503,176.21
Repurchase Agreements, Time Deposits, AB 55 & General Fund loans, and
Reverse Repurchase agreements are carried at portfolio book value (carrying cost).
Certificates of Deposit (CDs), Bank Notes (BNs), and Commercial Paper (CPs) less
than 90 days are carried at portfolio book value (carrying cost). Interest accrued
from the date of purchase on CDs and BNs under 90 days is not included.
7 Revised March 31, 1998
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8 Revised March 31, 1998
Surous NbWY
4t&r/o
SOURCE OF FUNDS
Pooled Money Investment Account
as of 3/31/98
$28.359 Billion
Im:W cs
oull t GmerW Rmd
.W/O 17.M%
9 Revised March 31, 1998
N
Office of the State Treasurer
Approved by Treasurer Matt Fong
on
February 9, 1996
unt
10
STATE TREASURER'S OFFICE
STATEMENT OF PORTFOLIO MANAGEMENT GOALS,
OBJECTIVES AND POLICIES
POOLED MONEY INVESTMENT ACCOUNT-PMIA
All state money held by the State Treasurer -in Treasury trust accounts, and all
money in the State Treasury,...... is appropriated for. the .purpose of investment and
deposit as provided in article 4.5, Section 16480 et. al. of the Government Code.
GOAL I. PORTFOLIO SAFETY/DIVERSIFICATION
The pool will be managed to insure the safety of the portfolio by investing in high
quality securities and by maintaining a mix of securities that will provide reasonable
assurance that no single investment or class of investments will have a disproportionate
impact on the total portfolio.
OBJECTIVE: In addition to the safety provided by investing in high quality
securities, the safety of the portfolio is enhanced three ways by maintaining a prudent
mix (i.e., diversity) of investments: 1) Spreading investments over different investment
types minimizes the impact any one industry/investment class can have on the portfolio;
2) Spreading investments over multiple credits/issuers within an investment type
minimizes the credit exposure of the portfolio to any single firm/institution; and 3)
Spreading investments over various maturities minimizes the risk of portfolio
depreciation due to a rise in interest rates. An unforeseen liquidity need allows no
options if "all your eggs are in one basked. "
POLICY: The portfolio shall contain a sufficient number and diversity of
marketable securities so that a reasonable portion of the portfolio can be readily
converted to cash without causing a material change in the value of the portfolio.
Limitation and eligibility as to specific investments are to be determined by the Pooled
Money Investment Board in the case of Commercial Paper, the Treasurer's Office
Investment Committee in cases of new dealer authorization and approval of new
corporate investments, and the Treasury Investment Division in all other matters.
GOAL H. LIQUIDITY
The pool will be managed to ensure that normal cash needs, as well as scheduled
extraordinary cash needs can be met. Further, adequate liquidity shall be maintained to
ensure the unforeseen cash needs, whether ordinary or extraordinary.
February 9,1996
11
OBJECTIVE: The pool will maintain a "cash flow generated" portfolio balance
sufficient to cover specifically the one month prepared cash forecast, as well as generally
the six month prepared cash forecast. Further, sufficient marketable treasuries will be
maintained to cover unforeseen withdrawals or delayed deposits.
POLICY First priority is given to maintaining specific calendar liquidity, as
dictated by the most recent cash forecast. Second priority is the maintenance of Treasury
Bill positions adequate to meet unscheduled needs and domiciled in the San Francisco
Depository to facilitate mid -day cash needs. Final consideration would be given to
"other" investments deemed appropriate to portfolio maintenance, enhancement, or
restructuring.
GOAL M. RATE OF RETURN
Pooled investments and deposits shall be made in such a way as to realize the
maximum return consistent with safe and prudent treasury management.
OBJECTIVE: The rate of return will be maintained on a consistent level
representative of current market yield direction.
POLICY: -Sales gains/losses will not be incurred to the point of radically
altering the final quarterly apportionment rate. Significant sales gains will be offset for
restructuring purposes to maintain consistent current return, as well as maximizing future
portfolio performance. Significant sales losses shall be incurred only by consent of the
Treasurer, or when sufficient profits negate the alteration of the apportionment rate.
Range bonds and inverse yielding securities are examples of the types of investments
which are precluded by the above stated objective.
CONFORMANCE
All of the foregoing goals, objectives and policies shall be observed by the Chief of
Investments or his designee, monitored by the Treasurer's Investment Committee, and.
reviewed continually by the Treasurer or his/ her assistant.
February 9,1996
12
STATE TREASURER'S OFFICE
STATEMENT OF PORTFOLIO MANAGEMENT GUIDELINES
POOLED MONEY INVESTMENT ACCOUNT-PMIA
The State Treasurer's Investment Division has set forth a general declaration of
portfolio goals, objectives and policies. Following are various guidelines necessary to
the good faith observance of these policies.
I. GUIDELINES FOR MAINTAINING SAFETY/DIVERSIFICATION
There are few statutory limitations placed on individual categories of authorized
investments. However, this does not entitle the investment staff to "carte blanche"
participation in these security types. In the absence of direct statutory limitations, the
"Prudent man rule" shall be utilized by the investment staff. As market. conditions
change, altering credit risk, marketability, yield spreads, and securities availability,
application of this rule shall govern any investment decision. This application shall be
discussed as soon as time permits with the Chief of Investments. At the Chief of
Investments determination, the situation may be discussed with the full investment
committee or brought directly to the attention of the Treasury Management.
Following are various considerations/limitations as they pertain to specific
investment types:
A. U.S. Treasury Securities
1) Maximum maturity: Statutory: 30 years.
Policy: 5 years.
2) Maximum. par value, total portfolio: None.
3) Maximum par value per name: None.
4) Maximum par value per maturity: None.
5) Credit: Full faith and credit of the Federal Government.
Treasury Bills are maintained for liquidity, trading, and yield enhancement as the
underlying security in a Reverse Repurchase transaction. Treasury strips and full coupon
securities are purchased for average maturity preservation, liquidity, and trading.
February 9,1996
13
B. Federal Agency Securities
1) Maximum maturity: Statutory: 30 years.
Policy: 5 years.
2) Maximum par value, total portfolio: None.
3) Maximum par value per name: None.
4) Maximum par value per maturity: None.
5) Credit: Despite there being no statutory limitations concerning this
category, prudent investment practice necessitates constant credit analysis
of certain issuing agencies. Although there exists an implicit or explicit
government guarantee of the various agency issues, market perception
often limits the liquidity of these issues.
C. Bankers Acceptances-DomesticlF'oreign .
Y
1) Maximum maturity: Statutory: None.
Policy: 180 days.
(This maximum maturity is a criterion used to determine eligibility for purchase
by the Federal Reserve. Our authority is based on the eligibility as determined by
the Fed. However, since the Fed has discontinued its eligibility requirements and
purchases, this criterion is no longer applicable. Currently, a majority of
acceptances are created only for 180 days.)
2) Maximum par value, total portfolio: None.
3) Maximum par value per name: None.
4)
5)
Maximum par value per maturity: None.
Credit:
a) The history of the acceptance market is spotless on "Failures to
redeem " This is true even though the years of WW H.
b) Geopolitical location is of prime concern when considering
potential candidates. Internal, as well as border political and
economic stability of the host country are of prime concern.
c) Liquidity as far as both credit risk and marketability in the
secondary level are addressed.
14
February 9,1996
d) Although statutory authority does not limit eligibility according to
ranking or rating, previously listed general criteria eliminate lesser
credits.
D.- Certificates of Deposits
1) Maximum maturity: Statutory: None.
Policy: 5 years.
2) Maximum par value, total portfolio: None.
3) Maximum par value per name: None.
4) Maximum par value per maturity: None.
?) Credit:....... _ . _ _...... _ ..... _...... _ .. _ _ . .
a) Criteria concerning loan make-up, LDC exposure, geographic
location, market perceptions, and financial condition all serve to
eliminate lesser names.
E.
b) Liquidity as far as both credit risk and marketability in the
secondary level are addressed. There must be a market for the
name in which a least three major dealers will bid or offer at a
given moment.
Collateralized Time Deposits
1} Maximum maturity: Statutory: None.
Policy: 5 years.
2) Maximum par value, total portfolio: None.
3) Maximum par value per name: Statutory: Shall not exceed the
net worth of the
institution.
Policy: Same.
4) Maximum par value per maturity: None.
5) Credit: Institutions must be rated average or better, or above a "D ", by a
recognized rating service utilized by the State Treasurer's Office (STO)
Investment Division, and must pass a credit evaluation by the STO Staff
which may include such criteria as geographic location, market
15
February 9,1996
perception, loan diversity, management factors, overall fiscal soundness
and the Community Reinvestment Act Rating of the institution. If, while
holding a pool deposit, an institution is downgraded below acceptable
levels by the rating agencies, the following steps shall be taken:
a) Notify the Deposits Section to monitor collateral closely.
b) Review financials and update credit report.
c) Determine the appropriate plan of action which may include early
termination of the time deposit, or allow the time deposit to
mature.
6) Collateral must comply with Government Code, Chapter 4, Bank Deposit
Law Section 16500 (et seq.) and the Savings and Loan Association and
Credit Union Deposit Law G.C. Section 16600 (et seq.).
..:F::... ..Commercial Paper................. _ ...... _.........:..... _ _. _ .. _. _ _ ... _ _ .. ,.
1) Maximum maturity: Statutory: 180 days.
Policy: 180 days.
2) Maximum par value, total portfolio: Statutory:
30% of the current
portfolio.
Policy:
Same.
3) Maximum par value per name: Statutory:
10% of outstanding
Policy:
Same.
4) Maximum par value per maturity: None.
5) Credit:
a) Rated "Prime" quality as defined by a nationally recognized
organization which rates such securities.
b) Organized and operating within the United States.
c) Have total assets in excess of five hundred million dollars
($500,000,000).
d) Approved by the Pooled Money Investment Board.
February 9,1996
16
G. Corporate Bonds/Notes
1) Maximum maturity: Statutory: None.
Policy: 5 years.
2) Maximum par value, total portfolio: None.
3) Maximum par value per name: None.
4) Maximum par value per maturity: None.
5) Credit: Securities eligible for investment under this subdivision must be
issued by corporations (including banks) organized and operating within
the United States and shall be within the top three ratings of a nationally
recognized rating service.
H. Repurchases (RP) and Reverse Repurchase (RRP)
1) Maximum maturity: Statutory: None.
Policy: 1 year.
2) Maximum par value, total portfolio: Statutory: None.
Policy: RRP is limited to
10% of the current
portfolio.
3) Maximum par value per name: None.
4) Maximum par value per maturity: None.
5) Credit:
a) Nfust have on file, a signed Security Loan Agreement and/or
General Repurchase Agreement. (Repurchase Agreement may be
either STO General Agreement or PSA Standard Agreement.)
b) Reverses and reverse repurchases are only done with long
established and/or well capitalized broker -dealers.
The Reverse Repurchase Program is designed to augment the overall portfolio
yield in a safe and prudent manner. It is not viewed as a tool with which to effect
specific portfolio moves or plan major market strategy. The portfolio carries reversed
securities at negative book and the re -investment at positive book. As a result, the
reported size of the portfolio represents the true cash participation of its members. All
reverses are cash matched either to the maturity of the re -investment or an adequately
February 9,1996
17
positive cash flow date which is approximate to the maturity of the re -investment. For
example, if cash flow is positive on January 27 and negative on January 31, then the
reverse may mature on the 27th, and the re -investment may be taken to the 31 st. Cash
flow is evened out, and a positive spread is achieved. Only securities already held in the
portfolio and unencumbered may be reversed. No item purchased against reverse will be
used as a reversible security while the original reverse is outstanding (i.e., the STO does
��" "� ' `' "" "" not levefage�one�liability ��vitli another):' `The against ieverse �r6 invii ient will be "
limited to maturities under one year, effectively limiting the appropriate securities to
generic money market issues. Because of the role played by the Reverse Program in this
office, customized or structured products are not considered appropriate re -investment
candidates. All costs, earnings, and spreads are fixed at the beginning of each
transaction.
H. GUIDELINES FOR MAINTAINING LIQUIDITY
First priority will be the cash flow needs as reported on both the monthly and six
month cash forecasts. These forecasts will be updated daily using the current investment
input, as well as adjustment information provided by Cash Management personnel.
Sufficient Treasury securities will be maintained for unscheduled cash needs. It
has been determined that Treasury Bills having maximum maturity of 1 year will be used
for this purpose. Domiciled in San Francisco, these securities are available throughout a
great portion of the business day to meet most emergencies. Because of their
Government guarantee, as well as the short maturity, the exposure to market risk is
minimal.
Due to the make-up of the portfolio participants, an average maturity of six to
eighteen months will be maintained.
III GUIDELINES FOR MAINTAINING RATE OF RETURN
Always keep in mind the need to provide a consistent rate of return not only to
the quarterly participants of the pool, but the longer term depositors as well. It is often
the case that investments made with long term deposits create the base rate to the
portfolio. Since sales gains/losses impact the portfolio on a quarterly basis, large
gains/losses are to be avoided. Failure to offset either gains or losses proportionately
would result in a saw-toothed apportionment rate history. For this reason, extreme
positions or styles of trading are prohibited.
An informal weekly meeting, with the Chief of Investments, Assistant Chief, and
Investment Manager, will be held to discuss current investment philosophies and
upcoming economic releases. Decisions of value and direction are made to
accommodate the occurrence of all those events which might be considered reasonable
and probable.
Although securities trading is allowed for purposes of enhancing portfolio return,
specific limitations have been established to protect the portfolio rate of return:
February 9,1996
18
1) Prior to taking a position, apparent value and size will be discussed
between the Chief and Treasury Trader involved.
2) During a "when issued" (W.I.) period our long position shall never
exceed the amount we are willing to purchase.
- . .. r... ... .. r..wr... .u.rrr..-r......r. .... .. ... r.. Yr....� .< .. .. .r .. ....--r...� .. .-....r........ y. • ..-.w ... • ... .. �... .. . �... ... - .... .r ♦ ... .. ... ...
3) Short positions will not be taken at any time.
4) Trading positions are to be reported daily to the Chief of Investments.
February 9,1996
19
SUMMARY OF DIFFERENCES BETWEEN UPDATED AND PRIOR STO "GOALS,
OBJECTIVES AND POLICES" FOR THE INVESTMENT OF FUNDS IN THE
POOLED MONEY INVESTMENT ACCOUNT
�•s}._.".�.!.t7i_. '-'i. ✓y_a.:-..3y.'•� ::..�.
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Goals
Listed Rate of Return, fast; Liquidity,
Lists Safety/Diversification, fast;
second; & Diversification, third. All
Liquidity, second; & Rate of Return,
three goals were considered when
third.. This listing more accurately
making an investment and safety has
reflects our priorities.
always been our number one concern
Safety/Diversification
Diversification emphasized.
Safety emphasized. Diversification
just one source of safety.
Rate of Return
Must be consistent with current market
Same. Specific examples of the types
yield direction.
of investments precluded by this
provision (i.e., inverse yield securities
and range bonds) are now included.
Security Description Format Non -standardized Standardized
Bank Notes
Implicitly allowed as a special type of
Explicitly mentioned as a special type
corporate bonds/notes.
of corporate bonds/notes.
Reverse Repurchase
Provisions contained in an addendum.
Moved addendum on Reverse
Repurchases into the body of the policy
on Repurchase and Reverse
Repurchases. There was no change in
the substance of these provisions.
February- 9, 1996
20
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LOCAL AGENCY INVESTMENT FUND
ADMINISTRATIVE EARNINGS (COST)
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The law provides that reimbursements cannot exceed one-half
of 1 percent of the EARNINGS of the fund per quarter. Listed
above is the percentage of earnings (costs) per quarter.
24
Revised March 311 1998
HOW TO CALCULATE QUARTERLY
EARNINGS & APPORTIONMENT
Following are three examples of how the apportionment of quarterly earnings
is computed, based on 6/30/96 quarter -ending portfolio information.
The first example simply equates the information to a mathematical formula
used to compute the earning rate for the entire pool. The formula is a true
yield annualized calculation, which is also adjusted to reflect leap year, when
necessary.
The second example, using the information derived from the portfolio and
verified by calculation, breaks the numbers down to a LAIF percentage par-
ticipation. As of 6/30/96, the LAIF balance represented 38.56432654% of the
total pool.
The third example carries the breakdown further to reflect the individual par-
ticipation, earnings, and apportionment of a single account in the LAIF. The
process of determining the weighted deposits, as well as the final dollars cred-
ited, is outlined and adjusted to reflect any appropriate charges.
25
QUARTERLY EARNINGS & APPORTIONMENT P( OOL)
D = Number of days in the quarter
E = Interest income ± sales gain/loss
B = Average quarterly book total
R = Quarterly earnings rate
Quarterly earnings calculation
[E/D x *3651B = R
(*366 in a leapyear)
For example purposes, figures for quarter ending 6/30/96 will be used throughout
as follows:
D=91
E = 3835440,553.06 + 1705705.67 = 383,6115258.73
B = 271903115921062.85
R = 5.529310
or stated as a formula:
[383,611,258.73/91 x 366]/27,903,592,062.85 = 5.529310
* Actual Apportionment Rate is figured after charges have been subtracted.
The subtraction of charges results in the 5.518751% apportionment rate
reported 6/30/96 for LAIF.
26
QUARTERLY EARNINGS & APPORTIONMENT)
Dollar days of pool = Book value x # of days in the quarter
27,903,592,062.85 x 91 = 225392226,8772719.08
2,539,226,877,719.08 dollar days = 100% of pool
LAIF is 38.56432654% of the pool = 979,235,744,667.88 dollar days
D = 1 (Since the book value has been converted to 1 dollar day)
E = 38.56432654% x 383.6117258.73 = 147,937,098.46 (Less charges)
B = 979223537445667.88 (1 Dollar day)
R = 5.5 293 10 (Less charges)
or stated as a formula:
[E/D x 366]B = R
[ 147,93 7,098.46 x 366]/979,235,744,667.88 = 5.529310
(Less charges)
27
QUARTERLY EARNINGS & APPORTIONMENT
AGENCY: ABC Sanitation District
Beginning Balance:
04/01/96
325752000
04/09/96
3,198,000
04/28/96
426232000
05/02/96
510007000
06/02/96
429252000
06/19/96
52000,000
Ending Balance:
5,000,000
04/01 /96 - 04/09/96
04/09/96 - 04/28/96
04/28/96 - 05/02/96
05/02/96 - 06/02/96
06/02/96 - 06/19/96
06/19/96 - 06/30/96 inc.
D = 1
8 Days x 3,575,000 =
19 Days x 3,198,000 =
4 Days x 4,623,000 =
31 Days x 5,000,000 =
17 Days x 4,925,000 =
12 Days x 5,000,000 =
91 Days
(LAMPARTICIPANT)
289600,000
Dollar day
6027622000
Dollar day
18,4925000
Dollar day
15550002000
Dollar day
83,7252000
Dollar day
60,000,000
Dollar day
40625792000
Dollar day
E = .0004152003 x 14779372098.46 (% of LAIF x LAIF earnings) _
61,423.53 (Less charges)
B = 406, 5 79,000 (1 Dollar day)
R = 5.529310 (Less charges)
[61,423.53/1 x 366]/406,579,000 = 5.529310 (Less charges)
28
LAIF CHARGES
,Total charges for LAW for the quarter were 282,497.00.
ABC Sanitation District is .04152003% of LAIR
ABC Sanitation District = .0004152003 x 282,497.00 = $117.29
share of charges.
Apportionment will reflect this charge.
ABC Sanitation District computed earnings = 61,423.53
Less share of charges =-117.29
Apportioned earnings = 61, 3 06.24
Computed earning rate 5.529310
Less 117.29 charges
Actual earning rate 5.518751
29
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34
DISCLOSURE STATEMENT
PORTFOLIO HOLDINGS: DERIVATIVES
STRUCTURED NOTES, AND ASSET -BACKED SECURITIES
The Treasury Investment Division has received a number of inquiries
concerning our various portfolio holdings. Questions involving
structured notes, derivative products, and asset -backed securities are
the most notable. We have found that the lack of acceptable
definitions regarding these financial products has led to confusion
and disagreement with our reported positions.
In an effort to clarify the information provided in our monthly
statements, we would like to share with you our understanding of
these financial products, as defined by the U.S. General Accounting
Office (GAO) .
In a recent survey of sales practices for these financial products the
GAO provided definitions and examples .of what they considered 1)
plain vanilla OTC derivatives, 2) more complex OTC derivatives, 3)
structured notes, and 4) asset -backed securities. Following are the
GAO definitions, as well as the State of California Treasurer's
holdings in each category as of April 1, 1998:
35
Revised March 31, 1998
* 1. Plain Vanilla OTC Derivative Products
A derivative product is a financial instrument whose market value is derived
from a reference rate, index, or value of an underlying asset. OTC derivatives are
privately negotiated contracts and are not traded on organized exchanges.
U.S. $ 0 As of: 04/01 /98
*2. More Complex OTC Derivative Products
Other more complex OTC derivatives have at least one of the following
characteristics:
a. Their prices tend to be difficult to obtain because they are often
available from only a few dealers.
b. The payments required by the derivative contract are calculated on
the basis of more than one interest rate, currency, asset, or other factor.
C. The derivative contract has terms that are not determined until some
future date.
d. The contract involves a term that acts as a multiplier or increases the
leverage of the rate(s) used to compute payments.
e. The contract CAN entail potentially unlimited risk.
U.S. $ 0 As of: 04/01 /98
* The Pooled Money Investment Account Portfolio has not invested in,
nor will it invest in, Derivative Froducts as defined in General Accounting
definitions #1 & #Z. The GAO separation of derivatives, structured notes,
and asset -backed securities is consistent with GASB 94-1.
36
Revised March 31, 1998
3. Structured Notes
Structured notes are debt securities (other than asset -backed securities) whose cash -flow
characteristics (coupon rate, redemption amount, or stated maturity) depend upon one
or more indices and/or that have embedded forwards or options. They are issued by
corporations and by government -sponsored enterprises such as the Federal National
Mortgage Association and the Federal Home Loan Bank System.
U.S. $766.750 million As of: 04/01 /98
4. Asset -Backed Securities
Asset -backed securities, the bulk of which are mortgage -backed securities, entitle their
purchasers to receive a share of the cash flows from a pool of assets such as principal
and interest repayments from a pool of mortgages (such as CMOs) or credit card
receivables.
U.S. $ 388.980 million As of: 04 / 01 / 98
Securities Accou ntability
1) Vanilla Derivatives 0
2) Complex Derivatives 0
3) Structured Notes
a.
Callable Agency
b.
3 month LIBOR Agency Floater
C.
3 month LIBOR Corporate Floater
d.
2 year CMT Corporate Floater
e.
3 month T-Bill Agency Floater
f.
3 month T-Bill Corporate Floater
37
$ 35.000 million
$ 100.000 million
$ 535.500 million
$ 26.250 million
$ 70.000 million
$ 00.000 million
Revised March 31, 1998
4) Asset -Backed
'Hess Association Pools
a Small Business
b Agency CMOs
GN NAA Pools
C. FHI,�iC PC Pools
d.
1. As of: 04 / 01 / 98
$ ZZZ.815 million
$ 139.691 million
$ Z.47 2 million
$ Z4.002 million
277396i25Z7292.06
Total Portfo 1O folio: 4.22%
Financial Products as a Per
of poi
38 Revised March 31, 19�
Is The Poo] I- - ---- - -: n d
It is important to recognize that
gnithere are two applications of th
question,
1 sere is no
insurance aPplied to - •
Portfolio, or the individual securities se
istics of the P° Oli0 in general. How sectors of the
is considered P°Olio, credit ever, due to the charac
nsidered a less expensive risk is minimal. often • ter-
' e way ins
insuring a single A bond to b • Y of main Vance
than bu ring it to Ong credit quality, i.e.
• Ong the AAA bond outright.a AAA rating is less expensive
Egger mechanisms for Certain provision P nsive
improbable, one Policies to become a Provisions s regarding
meat earnings such provision is effective are Judged to be
' the re
g be exhausted before ' requirement that all inVest-
effective, in
coverage becomes
-- vw i, Selt-Insured.
the Board of Control.Any claim against the
Attorney Any Vaud assertion portfolio would go to
neral s ofce. s Would be heard b
printed by the Le y judgment awarded would Y the
desi gislature, ask mama uld be appro-
gnated depositories provide . gement controls at thir _
nation of blanket bonds insurance coverage d P�ty-
PARA inVestnh and all-risk policies. g Out a combl-
ents are domiciled at Since by custom all
these securities due to mud third -Party depositories
employees of these institutions acts or lack of fit s, losses on
tools cover loss institutions are insured• eh�' by officers or
es ranging up to $S00 ask management con_
incident. million depending °n the
39
r
AUDIT PROCESS
The State Treasurer's Office is audited by the Bureau of State Audits
on an annual basis. The resulting opinion is included in the subse-
quent Pooled Money monthly report following its publication. The
Bureau of State Audits also has a continuing audit process throughout
the year. All investment and LAIF claims are audited on a daily basis
by the State Controller's Office as well as an in-house audit process
involving three separate divisions.
40
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4?
How to Participate in the Local Agency
Investment Fund
Before any deposits will be accepted, the local governmental agency must file
with the State Treasurer a resolution and bank authorization form which will
contain the following:
1. Name, address, and telephone number of agency.
2. A statement that the agency agrees to deposit or withdraw money in the
Local Agency Investment Fund in the State Treasury in accordance with the
provisions of Section 16429.1 of the Government Code for the purpose of
investment as stated therein.
3. The names and titles of the officials authorized by this resolution to order
the deposit or withdrawal of money in the Local Agency Investment Fund.
4. Resolution number and date passed by the governing body.
5. Signature (s) of the person (s) authorized to sign resolutions.
6. Banking information signed by a person authorized on the resolution.
7. Seal of the agency if one is usually affixed to resolutions.
Deposits or withdrawals must be in multiples of one thousand dollars ($1,000);
minimum transaction size is five thousand dollars ($5,000) and a cap of $20
million per account. Bond proceeds also have a five thousand dollar ($ 5,000)
minimum with no cap. Ten transactions are allowed per month for each regular
account. Deposits and withdrawals count as separate transactions.
The LAIF provides each participating agency the following monthly reports:
• Agency Statement of Activity
• Valuation of Pooled Portfolio
• Selected Investment Data of Pooled Portfolio
• Report of Monthly Activity of Pooled Portfolio
A Maturity Schedule of the Pooled Portfolio will be provided quarterly.
43
Bond Proceeds
In addition to a regular account, a participating Agency may open a Bond
Proceed account. There is no maximum on the amount of bond proceeds that
may be deposited. Each bond issue is given a separate bond identification
number, and has its own 30 day maturity.
How to Open a Bond Proceed Account- After verification that an Agency has a
regular LAIF account established, an Agency may make application to deposit
bond proceeds by completing and submitting a bond proceed application with an
Official Statement for each bond issue to be deposited.
LIQUIDITY
Bond proceeds may be withdrawn every 30 calendar days from date of deposit.
If the maturity date falls on a holiday or weekend, the withdrawal date will move
to the next business day and each 30th calendar day thereafter.
Trustees - Trustees may open an account for a participating agency for the
purpose of depositing bond proceeds. These accounts are opened and
maintained by the trustee. To open a trustee account, an agency must first
establish a regular LAIF account, and must submit a Trustee Bond Proceed
Application signed by the agency, a bank signature card signed by the trustee,
and an Official Statement for each bond issue.
.44 _
Procedures for Deposits and
Withdrawals for LAIF
The authorized government official or trustee must notify, by telephone, the LAIF
at (916) 6 5 3 - 3001 and provide the following information:
♦ LAIF Pin Number
♦ LAIF Account Number
♦ Name of Agency
♦ Transfer Date
♦ Transfer Amount
♦ Deposits - Bank
* Withdrawals - Bank and Account Number
♦ Correspondent Bank When Applicable
♦ Transfers will be processed only through banks authorized by the agency in
writing and currently on file with the State Treasurer's Office.
♦ Telephone calls must be received by the LAIF by 9:30 a.m. to receive same day
credit for deposits or withdrawals. Telephone calls received after 9:30 a.m.
will be for the next business day's credit.
♦ The authorized government official or trustee will instruct their local bank to
transfer to and/or receive funds from one of the following banks:
Bank of America Union Bank of California
Sanwa Bank U.S. Bank
♦ To keep lines available for daily transfers, please make telephone calls which
pertain to rates only, account balances and/or general information after
10:00 a.m.
45
Checklist for Transfers
Office hours same day credit 7:30 a.m. - 9:30 a.m.
Daily batch processing 9:30 a.m. - 10:30 a.m.
Office hours next business day credit 10:30 a.m. - 4:00 p.m.
Transactions may be made up. to 10 days in advance.
A transfer must be made by an authorized person prior to the transfer of funds
by telephoning LAIF at (916) 6 5 3 - 3001.
What an authorized person will need to complete to a transfer:
LAIF Pin Number
LAIF Account Number
Name of Agency
Effective date of Deposit or Withdrawal
Amount of Deposit or Withdrawal
Originating Bank or Account Number
What an authorized person will need for their records:
Name of person at LAIF who took Deposit or Withdrawal
Date and time telephone Deposit or Withdrawal was done
Effective date of Deposit or Withdrawal
LAIF Confirmation Number
Name of person at originating or receiving bank you spoke with after LAIF
was telephoned
46
REPORTING DOCUMENTS
EACH MONTH YOU CAN EXPECT TO RECEIVE:
1) Your agency's statement of activity, which includes your beginning and ending balances and
all transactions and or adjustments which took place for the previous month.
2) A "Summary of Investment Data" for the previous month. This analysis of the Pooled
Portfolio indicates the monthly changes for the portfolio in comparison to the previous year, and LAIF
deposit information for the previous month.
3) The "Market Valuation" of the Pooled Portfolio indicating the estimated market value
(including accrued interest) for the previous month.
4) The "Pooled Money Investment Report," a summarization of the pool including investment
data, portfolio composition, investment transactions, time deposits and Pooled Money Board
designations. Since information for this report is gathered from several sources, it represents investment
activity for the month prior to the statements.
EACH QUARTER YOU WILL RECEIVE 0 ADDITION TO TIE MONTBLY INFORMATIONZ
1) A "Maturity Schedule" for the Pooled Portfolio. This indicates the par values maturing by
date and type and the percentages represented by maturity range.
2) The synopsis of the most recent LAN Advisory Board meeting. These notes indicate action
taken by the Board and other points of interest to the participating agencies.
3) LAW "Answer Book" updates. The initial book will be sent to all participating agencies in
January, 1997, with updates to follow on a quarterly basis. This book is specific to the LAW and
includes information such as how and when the fund was created, how interest is calculated, the
percentage of fees charged and specific questions relating to the Pool and how it functions.
The "Answer Book" is available upon request.
ANNUALLY YOU WILL RECEIVE:
1) The "Pooled Money Investment Board Annual Report." This report is a year in review of the
previous fiscal year and includes information about the Pooled Money Investment Account (PMIA),
Surplus Money Investment Fund (SMIF), and the LAIF.
47
2) Annual Updates. This form is sent to participating agencies to assist LAIF staff in
maintaining the most current information possible about your account with LAIF. We ask each agency to
have authorized person/s review, sign and return this form to LAIF as quickly as possible, whether or not
changes are needed.
3) LAIF calendar which'indicates the dates the State of California (LAIF) is open for business.
4) Conference information. Approximately three months prior to the LAN conference you will
receive a "save -the -date" notice, two months prior to the conference you will receive your registration
packet.
IPMIA Monthly Report I Monthly I 20th of month
PMIA Maturity Schedule I. Quarterly I 20th of month
Synopsis of Board Meeting Minutes ! Quarterly 20th of month
LAIF Answer Book Quarterly 20th of month
PM IA Annual Reports j Annually 20th of month
LAIF Updates Annually January
LAIF Calendar I Annually December
�LAIF Conference Material Annually Two months prior to conference
We hope you will find this listing useful for your reporting requirements. Should you not receive any of
the above mentioned documents, please call LAIF at (916) 653-3001.
48.
LAIF ENABLING LEGISLATION
16429.1 Creation of fund; investments; proceeds of bonds, etc.; distributions;
report of investments
There is in the State Treasury the Local Agency Investment Fund, which
fund is hereby created. Notwithstanding Section 13340, all money in the fund is
hereby appropriated without regard to fiscal years to carry out.the purpose of this
section. The Controller shall maintain a separate account for each governmental
unit having deposits in this fund.
Notwithstanding any other provisions of law, a local governmental official,
with the consent of the governing body of that agency, having money in its treasury
not required for immediate needs, may remit the money to the Treasurer for deposit
in the Local Agency Investment Fund for the purpose of investment.
Notwithstanding any other provisions of law, an officer of any nonprofit
corporation whose membership is confined to public agencies or public officials, or
an officer of a qualified quasi -governmental agency, with the consent of the governing
body of that agency, having money in its treasury not required for immediate needs,
may remit the money to the Treasurer for deposit in the Local Agency Investment
Fund for the purpose of investment.
Notwithstanding any other provision of law or of this section, a local agency,
with the approval of its governing body, may deposit in the Local Agency Investment
Fund proceeds of the issuance of bonds, notes, certificates of participation, or
other evidences of indebtedness of the agency pending expenditure of the proceeds
for the authorized purpose of their issuance. In connection with these deposits of
proceeds, the Local Agency Investment Fund is authorized to receive and disburse
moneys, and to provide information, directly with or to an authorized officer of a
trustee or fiscal agent engaged by the local agency, the Local Agency Investment
Fund is authorized to hold investments in the name and for the account of that
trustee or fiscal agent, and the Controller shall maintain a separate account for each
deposit of proceeds.
The local governmental unit, the nonprofit corporation, or the quasi -
governmental agency has the exclusive determination of the length of time its
money will be on deposit with the Treasurer.
The trustee or fiscal agent of the local governmental unit has the exclusive
determination of the length of time proceeds from the issuance of bonds will be on
deposit with the Treasurer.
The Local Investment Advisory Board shall determine those quasi -
governmental agencies which qualify to participate in the Local Agency Investment
Fund.
49
Revised March 31, 1998
The Treasurer may refuse to accept deposits into the fund if, in judgment of
the Treasurer, the deposit would adversely affect the state's portfolio.
The Treasurer may invest the money of the fund in securities prescribed in
Section 16430. The Treasurer may elect to have the money of the fund invested
through the Surplus Money Investment Fund as provided in Article 4 (commencing
with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2.
Money in the fund shall be invested to achieve the objective of the fund which
is to realize the maximum return consistent with safe and prudent treasury
management.
All instruments of title of all investments of the fund shall remain in the
Treasurer's vault or be held in safekeeping under control of the Treasurer in any
federal reserve bank, or any branch thereof, or the Federal Home Loan Bank of San
Francisco, with any trust company, or the trust department of any state or national
bank.
Immediately at the conclusion of each calendar quarter, all interest earned
and other increment derived from investments shall be distributed by the Controller
to the contributing governmental units or trustees or fiscal agents, nonprofit
corporations, and quasi -governmental agencies in amounts directly proportionate
to the respective amounts deposited in the Local Agency Investment Fund and the
length of time the amounts remained therein. An amount equal to the reasonable
costs incurred in carrying out the provisions of this section, not to exceed a maximum
of one-half of 1. percent of the earnings of this fund, shall be deducted from the
earnings prior to distribution. The amount of this deduction shall be credited as
reimbursements to the state agencies having incurred costs in carrying out the
provisions of this section.
The Treasurer shall prepare for distribution a monthly report of investments
made during the preceding month.
As used in this section, "local agency," "local governmental unit," and "local
governmental official" includes a campus or other unit and an official, respectively,
of the California State University who deposits moneys in funds described in Sections
89721, 89722, and 89725 of the Education Code.
16429.2 Local investment advisory board
There is created the Local Investment Advisory Board consisting of five
members. The chairman shall be the State Treasurer or his or her designated
representative. Two members who are qualified by training and experience in the
field of investment or finance, shall be appointed by the State Treasurer. Two
members who are treasurers, finance or fiscal officers or business managers,
employed by any county, city or local district or municipal corporation of this state,
shall be appointed by the Treasurer.
The term of office of each appointed member of the board is two years, but
each appointed member serves at the pleasure of the appointing authority. A
vacancy in the appointed membership, occurring other than by expiration of term,
shall be filled in the same manner as the original appointment, but for the unexpired
term only.
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Members of the board who are not state officers or employees shall not
receive a salary, but shall be entitled to a per diem allowance of one hundred dollars
($100) for each days attendance at a meeting of the board, not to exceed three
hundred dollars ($300) in any month. All members shall be entitled to reimbursement
for expenses incurred in the performance of their duties under this part, including
travel and other necessary expenses.
The board's primary purpose shall be to advise and assist the State Treasurer
in formulating the investment and reinvestment of moneys in the Local Agency
Investment Fund, and the acquisition, retention, management, and disposition of
investments of the fund. The board, from time to time, shall review those policies
and advise therein as it considers necessary or desirable. The board shall advise
the State Treasurer in the management of the fund and consult the State Treasurer
on any matter relating to the investment and reinvestment of moneys in the fund.
16429.3 Impoundment or seizure of deposits
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 either of the following:
(a) Transfer or loan pursuant to Sections 16310, 16312, or 16313.
(b) Impoundment or seizure by any state official or state agency.
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PMIA ENABLING LEGISLATION
16430 Eligible securities for investment of surplus moneys
Eligible securities for the investment of surplus moneys shall be:
(a) Bonds or interest -bearing notes or obligations of the United States, or those for
which the faith and credit of the United States are pledged for the payment of
principle and interest.
(b) Bonds or interest -bearing notes on obligations that are guaranteed as to principal
and interest by a federal agency of the United States.
(c) Bonds and notes of this state, or those for which the faith and credit of this state
are pledged for the payment of principal and interest.
(d) Bonds or warrants, including, but not limited to, revenue warrants, of any county,
city, metropolitan water district, California water district, California water storage
district, irrigation district in the State of California, municipal utility district, or
school district of this state.
(e) Bonds, consolidated bonds, collateral trust debentures, consolidated debentures,
or other obligations issued by federal land banks' or federal intermediate credit
banks2 established under the Federal Farm Loan Act, as amended,3 in debentures
and consolidated debentures issued by the Central Bank for Cooperatives4 and
banks for cooperatives established under the Farm Credit Act of 1933, as
amended in bonds or debentures of the Federal Home Loan Bank Board
established underthe Federal Home Loan Bank Act,' in stock, bonds, debentures
and other obligations of the Federal National Mortgage Association8 established
under the National Housing Act as amended,9 and in the bonds of any federal
home loan bank established under said act, obligations of the Federal Home
Loan Mortgage Corporation, in bonds, notes, and other obligations issued by
the Tennessee Valley Authority under the Tennessee Valley Authority Act as
amended,10 and bonds, notes, and other obligations guaranteed by the
Commodity Credit Corporation for the export of California agricultural products
under the Commodity Credit Corporation Charter Act as amended.
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(f) Commercial paper of "prime" quality as defined by a nationally recognized
organization which rates these securities. Eligible paper is further limited to
issuing corporations: (1) organized and operating within the United States; (2)
having total assets in excess of five hundred million dollars ($500,000,000);
and (3) approved by the Pooled Money Investment Board. Purchases of eligible
commercial paper may not exceed 180 days' maturity, represent more than 10
percent of the outstanding paper of an issuing corporation, nor exceed 30
percent of the resources of an investment program. At the request of the
Pooled Money Invest Board, this investment shall be secured by the issuer by
depositing with the Treasurer securities authorized by Section 53651 of a market
value at least 10 percent in excess of the amount of the state's investment.
(g) Bills of exchange or time drafts drawn on and accepted by a commercial bank,
otherwise known as bankers acceptances, which are eligible for purchase by
the Federal Reserve System.
(h) Negotiable certificates of deposit issued by a nationally or state -chartered bank
or savings and loan association or by -a state -licensed branch of a foreign bank.
For the purposes of this section, negotiable certificates of deposits do not
come within the provisions of Chapter 4 (commencing with Section 16500) and
Chapter 4.5 (commencing with Section 16600).
(i) The portion of bank loans and obligations guaranteed by the United States
Small Business Administration," or the United States Farmers Home
Administration. 12
Q) Bank loans and obligations guaranteed by the Export -Import Bank of the United
States.
(k) Student loan notes insured under the Guaranteed Student Loan Program
established pursuant to the Higher Education Act of 1965, as amended (20
U.S.C. 1001, et seq.)13 and eligible for resale to the Student Loan Marketing
Association established pursuant to Section 133 of the Education Amendments
of 1972, as amended (20 U.S.C. 1087-2).14
(1) Obligations issued, assumed, or guaranteed by the International Bank for
Reconstruction and Development, the Inter -American Development Bank, the
Asian Development Bank, the African Development Bank, the International
Finance Corporation, or the Government Development Bank of Puerto Rico.
(m) Bonds, debentures, and notes issued by corporations organized and operating
within the United States. Securities eligible for investment underthis subdivision
shall be within the top three ratings of a nationally recognized rating service.
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Chapter 3
INVESTMENTS
Article 4.5
TREASURY POOLED MONEY INVESTMENTS
16480.4 Securities eligible for investment; sale, exchange or repurchase
(a) Amounts available for investment under this article may be invested and
reinvested by the State Treasurer in any securities described in Sections
16430, of this code or in loans to the General Fund as provided in Section
16310 of this code. Such securities may be sold by the State Treasury
or exchanged by him for other securities of the kind authorized to be
purchased hereunder, if, in his discretion, such sale or exchange appears
to be in the best interests of the state. The State Treasurer may enter
into repurchase agreements or reverse repurchase agreements of any
securities described in Section 16430.
(b) The State Treasurer may hire or engage the services of an investment
analyst to assist in such investment decisions.
(c) For purposes of this section, the term "repurchase agreement" means a
purchase of securities by the State Treasurer pursuant to an agreement
by which the seller will repurchase such securities on or before a specified
date and for a specified amount.
(d) For purposes of this section, the term "reverse repurchase agreement"
means a sale of securities by the State Treasurer pursuant to an agreement
by which the State Treasurer will repurchase such securities on or before
a specified date and for a specified amount.
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