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1999 03 10 IABT a 0 4hf 4 4 Q" 78-495 CALLE TAMPICO - LA QUINTA, CALIFORNIA 92253 - (760) 777-7000 TDD (760) 777-1227 AGENDA INVESTMENT ADVISORY BOARD Study Session Room 78-495 Calle Tampico- La Quinta, CA 92253 March 10, 1999 - 5:30 P.M. I CALL TO ORDER a. Pledge of Allegiance b. Roll Call II PUBLIC COMMENT - (This is the time set 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 February 10, 1999 for the Investment Advisory Board. V BUSINESS SESSION A. Transmittal of Treasury Report for January, 1999 B. Continued Consideration of Fiscal Year 1999/00 Investment Policy C. Upgrade Banking Software for Y2K VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - January, 1999 B. Pooled Money Investment Board Reports - December, 1998 C. LAIF Answer Book Update VII BOARD MEMBER ITEMS VIII ADJOURNMENT MAILING ADDRESS - P.O. BOX 1504 - LA QUINTA, CALIFORNIA 92253 INVESTMENT ADVISORY BOARD Business Session: A Meeting Date: March 10, 1999 ITEM TITLE: Transmittal of Treasury Report for January 31, 1999 BACKGROUND: Attached please find the Treasury Report for January 31, 1999. RECOMMENDATION: Review, Receive and File the Treasury Report for January 31, 1999. ohn M. Falconer, Finance Director TO: FROM: SUBJECT: DATE: MEMORANDUM La Quinta City Council John Falconer, Finance Director/Treasurer Treasurer's Report for January 31, 1999 March 2, 1999 Iry Attached is the Treasurer's Report for the month ending January 31, 1999. This report is submitted to the City Council each month after a reconciliation of accounts is accomplished by the Finance Department. Cash and Investments: Increase of $711,024. due to the net effect of revenues in excess of expenditures. State Pool: Increase of $2,588,584. due to the net effect of transfers to and from the cash and investment accounts and Property Tax distribution. U.S. Treasury Bills, Notes, Government Agency Securities and Commercial Paper: Increase of $3,946,224. due to the sale and purchase of one Security, the purchase of four Commercial Paper investments and monthly adjustment in the amortized value of the investments. Mutual Funds: Increase of $14,172. due to interest earned. Total increase in cash balances $7,260,004. 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 Monthly Custodian Report to determine the fair market value of investments at month end. John M. 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N y (O 00 O C V i 0 �_OC1 ti M LO 0) CSC co N N LO co 0 OOCn� 10A C � N Cyr- OOlCiOM VOLo O N 00 Lf)0) Cn CO CO M ti Co C0 1, 0 Ct 00 O 00 O `r°CN N°r°00 M-o°r�000� N CA LL W) v o) m LOCO.0- O CDM000co00 m 000 t- 00 Oct CNN4ul 0 q w MCONOOOO Cv� � .- CD N cmM r Lo CO 0 0 ti O 0 Q a0 C A � M � '� N � O N C D 0 0 0 CO N 00 � 1- M M v 0 0 0 1� co O a0 M N R CMV N N� N� N M 1W G d E L cm d :3 O > G L ~ N G S c CO 3 d N(n �+ � C p d C7 L 01 N X cu 7 D y0.. H U �, U cv C C C cd d U t ccC m U C U O) CO CT Cn C @1 L d C J co G y O r LA cCc Q F-:3 cn a)Q O 7 LU 0) R U U N 0 U 0) N Li Q U G •d G .+ x> N m 3 cd O a L Z d U = U G °' a05LU m cn rn GCM •01 'NI— C.0 > c G U ` L 6 01 aO X M O 01 a)c aFn0W wnw000 z C) w zM Cn Of w n !-) R CITY OF LA QUINTA CITY CITY RDA RDA FA BALANCE SHEET 01/31/99 FIXED LONG TERM FIXED LONG TERM FINANCING LONG TERM GRAND CITY ASSETS DEBT RDA ASSETS DEBT AUTHORITY DEBT TOTAL ASSETS: POOLED CASH 3,403,756.20 8,651,626.60 (7,704.98) 12,047,677.82 LQRP INVESTMENT IN POOLED CASH 605,000.00 605,000.00 INVESTMENT T-BILLINOTES & OTHER 22,000,000.00 22,000,000.00 LQRP CASH 76,069.40 76,059.40 BOND REDEMPTION CASH 127,225.94 500.54 127,726.48 BOND RESERVE CASH BOND PROJECT CASH 16,228,469.33 580,966.39 16,809,435.72 BOND ESCROW CASH PETTY CASH 1,000.00 1,000.00 CASH & INVESTMENT TOTAL 25,404,756.20 25,686,381.27 573,761.95 51,666,899.42 INVESTMENT IN LAND HELD FOR RESALE ACCOUNTS RECEIVABLE 57,790.02 81,257.68 8,505,000.00 8,644,047.70 PREMIUM/DISCOUNT ON INVESTMENT (141,025.41) 57,194.46 2,548.00 (81,282.95) LQRP-ACCOUNTS RECEIVABLE 34,443.02 34,443.02 INTEREST RECEIVABLE 142,955.80 142,955.80 LOAN/NOTES RECEIVABLE 15,197.79 2,528,967.76 2,544,165.55 DUE FROM OTHER AGENCIES DUE FROM OTHER GOVERNMENTS DUE FROM OTHER FUNDS 12,799.40 551,038.04 563,837.44 DUE FROM RDA 6,890,277.20 6,890,277.20 INTEREST ADVANCE -DUE FROM RDA 736,598.49 736,598.49 NSF CHECKS RECEIVABLE 13,948.63 13,948.63 ACCRUED REVENUE (8,192.68) (8,192.68) TRAVEL ADVANCES 3,440.00 3,440.00 EMPLOYEE ADVANCES PREPAID EXPENSES RECEIVABLE TOTAL 7,589,026.12 3,387,664.08 8,507,548.00 19,484,238.20 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 39,812.00 39,812.00 GENERAL FIXED ASSETS 1,098,865.00 15,008,708.00 11,438,745.05 27,546,318.05 ACCUMULATED DEPRECIATION (666,396.27) (666,396.27) AMOUNT AVAILABLE TO RETIRE L/T DEBT 3,395,117.03 3,395,117.03 AMOUNT TO BE PROVIDED FOR L/T DEBT 1,944,070.34 98,098,476.77 8,505,000.00 108,547,547.11 TOTAL OTHER ASSETS 432,468.73 15,008,708.00 1,944,070.34 11,438,745.05 101,493,593.80 8,505,000.00 138,822,585.92 TOTAL ASSETS 33,466,063.05 15,008,708.00 1,944,070.34 29 076 045.35 11 438 745.05 101 493 593.80 9,081,309.95 8,505,000.00 210 013 535.54 LIABILITY ACCOUNTS PAYABLE DUE TO OTHER AGENCIES DUE TO OTHER FUNDS INTEREST ADVANCE -DUE TO CITY ACCRUED EXPENSES PAYROLL LIABILITIES STRONG MOTION INSTRUMENTS FRINGE TOED LIZARD FEES SUSPENSE DUE TO THE CITY OF LA QUINTA PAYABLES TOTAL (0.02) 656,215.85 (864.00) 569.42 7,187.41 20,640.00 12,280.00 22,139.53 551,038.04 696,028.66 22,139.53 551,038.04 22,139.51 656,215.85 13,663.40 563,837.44 569.42 7,187.41 20,640.00 12,280.00 13,663.40 1,282,869.63 ENGINEERING TRUST DEPOSITS 58,224.09 58,224.09 SO. COAST AIR QUALITY DEPOSITS ARTS IN PUBLIC PLACES DEPOSITS 388,558.50 388,558.50 LQRP DEPOSITS 15,168.00 15,168.00 DEVELOPER DEPOSITS 744,245.64 744,245.64 MISC. DEPOSITS 203,947.37 203,947.37 AGENCY FUND DEPOSITS 1,355,241.52 1,355,241.52 TOTAL DEPOSITS 2,750,217.12 15,168.00 2,765,385.12 DEFERRED REVENUE 14,229.79 8,505,000.00 8,519,229.79 OTHER LIABILITIES TOTAL 14,229.79 8,505,000.00 8,519,229.79 COMPENSATED ABSENCES PAYABLE 313,619.81 313,619.81 DUE TO THE CITY OF LA QUINTA 1,608,311.00 9,426,876.90 11,035,187.90 DUE TO COUNTY OF RIVERSIDE 12,601,591.90 12,601,591.90 DUE TO C.V. UNIFIED SCHOOL DIST. 10,690,125.00 10,690,125.00 DUE TO DESERT SANDS SCHOOL DIST. BONDS PAYABLE 68,775,000.00 8,505,000.00 77,280,000.00 TOTAL LONG TERM DEBT 1,921,930.81 101,493,593.80 8,505,000.00 111,920,524.61 TOTAL LIABILITY 3,460,475.57 1,944,070.34 566,206.04 101,493,593.80 8,518,663.40 8,505,000.00 124,488,009.15 EQUITY -FUND BALANCE 30,005,587.48 15,008,708.00 28,509,839.31 11,438,745.05 562,646.55 85,525,526.39 TOTAL LIABILITY & EQUITY 33 466 063.05 15 008 708.00 1,944,070.34 29 076 045.35 11 438 745.05 101 493 593.80 9,081,309.95 8,505,000.00 210 013 535.54 1'P:-1 PLEASE BRING YOUR INVESTMENT POLICIES FROM THE FEBRUARY 10T" AGENDA INVESTMENT ADVISORY BOARD Business Session No. B Meeting Date: March 10, 1999 TITLE: Continued Consideration of Fiscal Year 1998/99 Investment Policies BACKGROUND: 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. At the February meeting staff was directed to. report back with a ranking of investments in order of safety and a clarification in the policy regarding US Treasury and Government Securities (Attachment No. 1). Attachment No. 2 includes Board Member Moulin's memorandum regarding Board Member functions and proposed changes to the Investment Policies. A redline version of his proposal to the existing policies has also been attached. In addition the Glossary has been updated with the latest definitions issued by the Municipal Treasurers Association. RECOMMENDATION: Continued review of the Investment policies for approval by City Council in June 1999. ohn M. FalcoAer, Finance Director ATTACHMENT NO. 1 l i 206 bra /9 a� �a� � �a � . ss � -,��� T l�9a a � 7 %a aQ � sa s U44 (lit? W a�� a a� � sera a�a a 003 Sec. 53634. Transfers from inactive to active deposits The treasurer may call in money from inactive deposits and place it in active deposits as current demands require. When there is money in his possession for which there is no demand as inactive deposits, he may place it as active deposits. (Added by Stats.1949, c. 81, p. 290, Sec. 1.) Sec. 53635. Funds of local agency; deposit or investment As far as possible, all money belonging to, or in the custody of, a local agency, including money paid to the treasurer or other official to pay the principal, interest, or penalties of bonds, shall be deposited for safekeeping in state or national banks, savings associations or federal asso- ciations, credit unions, or federally insured industrial loan companies in this state selected by the treasurer or other official having the legal custody of the money; or, unless otherwise directed by the legislative body pursuant to Section 53601, may be invested in the investments set forth below. A local agency purchasing or obtaining any securities described in this section, in a negotiable, bearer, registered, or nonregistered format, shall require delivery of all the securities to the local agency, including those purchased for the agency by financial advisors, consultants, or managers using the agency's funds, by book entry, physical delivery, or by third -parry custodial agreement. The transfer of securities to the counterparty bank's customer book entry account may be used for book -entry delivery. For purposes of this section, "counterparty" means the other parry to the transaction. A counterparty bank's trust department or separate safekeeping department may be used for the physical delivery of the security if the security is held in the name of the local agency. (a) Bonds issued by the local agency, including bonds payable solely out of the revenues from a revenue -producing property owned, controlled, or operated by the local agency or by a department, board, agency, or authority of the local agency. (b) United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which the faith and credit of the United States are pledged for the payment of principal and interest. (c) Registered state warrants or treasury notes or bonds of this state, including bonds pay- able solely out of the revenues from a revenue -producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state. (d) Bonds, notes, warrants, or other evidences of indebtedness of any local agency within this state, including bonds payable solely out of the revenues from a revenue -producing property owned, controlled, or operated by the -local agency, or by a department, board, agency, or author- ity of the local agency. (e) Obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank, the Tennessee Valley Au- thority, or in obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association; or in guaranteed portions of Srhall Business Administration notes; or in obligations, participations, or other instru- ments of, or issued by, a federal agency or a United States government -sponsored enterprise. (f) 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. Purchases of bankers acceptances may not exceed 270 days maturity or 40 percent of the agency's surplus funds which may be invested pursuant to this section. However, no more than 30 percent of the agency's surplus funds may be invested in the bankers acceptances of any one commercial bank pursuant to this section. B-94 �� This subdivision does not preclude a municipal utility district from investing any surplus money in its treasury in any manner authorized by the Municipal Utility District Act, Division 6 (com- mencing with Section 11501) of the Public Utilities Code. (g) Commercial paper of "prime" quality of the highest ranking or of the highest letter and numerical rating as provided for by Moody's Investors Service, Inc., or Standard and Poor's Corporation. Eligible paper is further limited to issuing corporations that are organized and operating within the United States and having total assets in excess of five hundred million dollars ($500,000,000) and having an "A" or higher rating for the issuer's debt, other than commercial paper, if any, as provided for by Moody's Investors Service, Inc., or Standard and Poor s Corporation. Purchases of eligible commercial paper may not exceed 180 days maturity nor represent more than 10 percent of the outstanding paper of an issuing corporation. Purchases of commercial paper may not exceed 15 percent of the agency's surplus money which may be invested pursuant to this section. An additional 15 percent, or a total of 30 percent of the agency's money or money in its custody, may be invested pursuant to this subdivision. The additional 15 percent may be so invested only if the dollar -weighted average maturity of the entire amount does not exceed 31 days. Dollar -weighted average maturity" means the sum of the amount of each outstanding commercial paper investment multiplied by the number of days to maturity, divided by the total amount of outstanding commercial paper. (h) Negotiable certificates of deposit issued by a nationally or state -chartered bank or a sav- ings association or federal association or a state or federal credit union or by a state -licensed branch of a foreign bank. Purchases of negotiable certificates of deposit may not exceed 30 per- cent of the agency's surplus money which may be invested pursuant to this section. For purposes of this section, negotiable certificates of deposit do not come within Article 2 (commencing with Section 53630) of Chapter 4 of Part 1 of Division 2 of Title 5, except that the amount so invested shall be subject to the limitations of Section 53638. For purposes of this section, the legislative body of a local agency and the treasurer or other official of the local agency having legal custody of the money are prohibited from depositing or investing local agency funds, or funds in the custody of the local agency, in negotiable certificates of deposit issued by a state or federal. credit union if a member of the legislative body of the local agency, or an employee of the administra- tive officer, manager's office, budget office, auditor -controller's office, or treasurer's office of the local agency also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or supervisory committee of the state or federal credit union issuing the negotiable certificates of deposit. (i) (1) Investments in repurchase agreements or reverse repurchase agreements of any se- curities authorized by this section, so long as the agreements are subject to this subdivision, including the delivery requirements specified in this section. (2) Investments in repurchase agreements may be made, on any investment autho- rized in this section, when the term of the agreement does not exceed one year. The market value of securities that underlay a repurchase agreement shall be valued at 102 percent or greater of the funds borrowed against those securities and the value shall be adjusted no less than quarterly. (3) Reverse repurchase agreements may be utilized only when either of the following conditions are met: (A) The security was owned or specifically committed to purchase, by the local agency, prior to repurchase agreement on December 31, 1994, and was sold using a reverse repurchase agreement on December 31, 1994. (B) The security to be sold on reverse repurchase agreement has been owned and fully paid for by the local agency for a minimum of 30 days prior to sale, the total of all B-95 e reverse repurchase agreements on investments owned by the local agency not purchased or committed to purchase, prior to December 31, 1994, does not exceed 20 percent of the base value of the portfolio, and the agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement and the final maturity date of the same security. (4) After December 31, 1994, a reverse repurchase agreement may not be entered into with securities not sold on a reverse repurchase agreement and purchased, or committed to purchase, prior to that date, as a means of financing or paying for the security sold on a reverse repurchase agreement, but may only be entered into with securities owned and previ- ously paid for, for a minimum of 30. days prior to the settlement of the reverse repurchase agreement, in order to supplement the yield on securities owned and previously paid for or to provide funds for the immediate payment of a local agency obligation. Funds obtained or funds within the pool of an equivalent amount to that obtained from selling a security to a counterparty by way of a reverse repurchase agreement, on securities, originally purchased subsequent to December 31, 1994, shall not be used to purchase another security with a ma- turity longer than 92 days from the initial settlement date of the reverse repurchase agree- ment, unless the reverse repurchase agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement and the final maturity date of the same security. Reverse repurchase agreements specified in subparagraph.(B) of paragraph (3) may not be entered into unless the percentage restrictions specified in that subparagraph are met, including the total of any reverse repurchase agreements specified in subparagraph (A) of paragraph (3). (5) Investments in reverse repurchase agreements or similar investments in which the local agency sells securities prior to purchase, may only be made upon prior approval of the governing body of the local agency. (6) (A) "Repurchase agreement" means a purchase of securities by the local agency pursuant to an agreement by which the counterparty seller will repurchase the securities on or before a specified date and for a specified amount and the counterparty will deliver the underlying securities to the local agency by book entry, physical delivery, or by third party custodial agreement. The transfer of underlying securities to the counterparty bank's customer book -entry account may be used for book -entry delivery. (B) "Securities," for purpose of repurchase under this subdivision, means securities of the same issuer, description, issue date, and maturity. (C) "Reverse repurchase agreement" means a sale of securities by the local agency pursuant to an agreement by which the local agency will repurchase the securities on or before a specified date, and includes other comparable agreements. (D) For purposes of this section, the base value of the local agency's pool portfolio shall be that dollar amount obtained by totaling all cash balances placed in the pool by all pool participants, excluding any amounts obtained through selling securities by way of reverse repurchase agreements or other similar borrowing methods. (E) For purposes of this section, the spread is the difference between the cost of funds obtained using the reverse repurchase agreement and the earnings obtained on the reinvestment of the funds. (F) Repurchase agreements and reverse repurchase agreements shall only be made with primary dealers of the Federal Reserve Bank of New York. B-96 0 (); 6 ATTACHMENT NO. 2 Memorandum February 17, 1999 To: City Treasurer and Investment Advisory Board From: Don Moulin Subject: Functions of the Investment Advisory Board In connection with our annual review of the City's Investment Policy, Chairman Joe Irwin requested that I consider and make suggestions for possible changes to the statement of the IAB's functions now contained in Section 2.70.030 of the City Ordinance and in Section XIX of the Investment Policy. While considering the task, I concluded that, before suggesting changes, we should summarize and agree with the functions currently performed. Once that is done, we can draft a suggested revision to the official description of functions for adoption by the City Council and inclusion in the Investment Policy. To begin the process, I prepared a discussion draft of the IAB's functions for consideration at our next meeting on March 10, 1999. Please review the draft and prepare suggested changes to it before that meeting. The objective is to agree on a summary of our actual functions on March 10. After that I will draft a suggested brief statement of functions for inclusion in the ordinance and Investment Policy for discussion and approval at our meeting on April 14, 1999. 008 DISCUSSION DRAFT February 1999. Functions of the Investment Advisory, Board Investment Policy -- Review annually the City of La Quinta's Investment Policy and recommend appropriate changes to the City Treasurer. Meet with City Manager, City Attorney and City Treasurer to discuss the proposed Investment Policy for the next fiscal year before submission to the City Council for their consideration and adoption. Consider possible interim changes to the Investment Policy that may be necessary due to changing conditions. Treage Report -- Review the monthly Treasury Report and determine that the report indicates that cash and investment activities comply with the City's Investment Policy and that cash and investment sources appear sufficient to meet anticipated cash requirements. Other Reports -- Receive the monthly City Treasurer's Month End Cash Report and the State Treasurer's Pooled Money Investment Report. Independent Auditor -- Meet with the independent auditor after the completion of the annual audit of the City of La Quinta's financial statements. Receive the independent auditor's comments on the auditing procedures performed and on the auditor's review of internal controls for cash and investment activities. Receive the City Treasurer's response to any weaknesses or suggestions for improvement to the controls over cash and investment activities disclosed by the independent auditor. Resource -- Serve as a resource for the City Treasurer who may solicit comments on proposed investments, the workplan and budget for the fiscal year, the Treasurer's Investment Plan, internal controls for cash and investment activities, the written procedures for the operation of the investment program, the use or change of financial institutions, brokers and dealers, or other matters. DJM ���g CITY OF LA QUINTA Investment Policy Table of Contents Section Topic P- aae Executive Summary I General Purpose II Investment Policy III Scope IV Objectives ► Safety ► Liquidity No. I Yield V Prudence VI Delegation of Authority VII Conflict of Interest VIII Authorized Financial Dealers and Institutions ► Broker/Dealers ► Financial Institutions IX Authorized Investments and Diversification X Investment Pools Xi i } Safekeeping and Custody +I+XI Interest Earning Distribution Policy Xi11 Maximum Maturities fXV Internal Controls }XV Benchmark )(Vff Reporting Standards XV*WJJ Investment of Bond Proceeds EXVIII Investment Advisory Board -City of La Quinta FX1X Investment Policy Adoption 1 0.13 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. K 014 The City of La Quinta shall require that each individual investment have a maximum maturity of two years unless specific approval is authorized by the City Council. In addition, the City's investment in the State Local Agency Investment Fund (LAIF) is allowable as long as the average maturity does not exceed two years, unless specific approval is authorized by the City Council. The City's investment in Money Market Mutual funds is allowable as long as the average maturity does not exceed 60 days. The City of La Quinta will use the six month U.S. Treasury Bill as a benchmark when measuring the performance of the investment portfolio. The Investment Policies shall be adopted by resolution of the La Quinta City Council on an annual basis, The Investment Policies will be adopted before the end of June of each year. This Executive Summary is an overall review of the City of La Quinta Investment Policies. Reading this summary does not constitute a complete review which can only be accomplished by reviewing all the pages. 3 0 1 C-) i City of La Quinta Statement of Investment Policy July 1, 1999 through June 30, 2000 Adopted by the City Council on GENERAL PURPOSE The general purpose of this document is to provide the rules and standards users must follow in administering the City of La Quinta cash investments. II INVESTMENT POLICY III SCOPE This Investment Policy applies to all cash and investments of the City of La Quinta, City of La Quinta Redevelopment Agency and the City of La Quinta Financing Authority, hereafter referred in this document as the "City' . These funds are reported in the City of La Quinta Comprehensive Annual financial Report (CAFR) and include: 0 0 All funds within the following fund types: ► General ► Special Revenue ► Capital Projects ► Debt Service ► Internal Service ► Trust and Agency ► Any new fund types and fund(s) that may be created. IV . OBJECTIVES The primary objective, in order of priority, of the City of La Quinta's investment activity shall be: 1. Safety Safety of principal is the foremost objective of the investment program. Investments of the City of La Quinta shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio in accordance with the permitted investments. The objective will be to mitigate credit risk and interest rate risk. A. Credit Risk Credit Risk - is the risk of loss due to the failure of the security issuer or backer. Credit risk may be mitigated by: ► Limiting investments to the safest types of securities; ► Pre -qualifying the financial institutions, and broker/dealers, which the City of La Quinta will do business; and ► Diversifying the investment portfolio so that potential losses on individual securities will be minimized. B. Interest Rate Risk Interest Rate risk is the risk that the market value of securities in the portfolio will fall due to changes in general interest rates. Interest rate risk may be mitigated by: ► Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity; and ► By investing operating funds primarily in shorter -term securities. .01 2. Liquidity The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that sufficient liquid funds are available to meet anticipated demands. Furthermore since all possible cash demands cannot be anticipated the portfolio should b diversified and rconsist of securities with active secondary or resale markets. 3. Yield The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of least importance compared to the safety and liquidity objectives described above. The core of investments are limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed. Securities shall not be sold prior to maturity with the following exceptions: ► A declining credit security could be sold early to minimize loss of principal; ► Liquidity needs of the portfolio require that the security be sold. V PRUDENCE The City shall follow the Uniform Prudent Investor Act as adopted by the State of California in Probate Code Sections 16045 through 16054.. Section 16053 sets forth the terms of a prudent person which are as follows: Investments shall be made with judgment and care - under circumstances then prevailing - which persons of prudence, discretion, and intelligence excerise in the professional management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. lei 018 VI DELEGATION OF AUTHORITY Authority to manage the City of La Quinta's investment portfolio is derived from the City Ordinance. Management responsibility for the investment program is delegated to the City Treasurer, who shall establish written procedures for the operation of the investment program consistent with the Investment Policy. Procedures should include reference to safekeeping, wire transfer agreements, banking service contracts, and collateral/depository agreements. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this Investment Policy and the procedures established by the City Treasurer. The City Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The City Manager or Assistant'City Manager shall approve in writing all purchases and sales of investments prior to their execution by the City Treasurer. VII CONFLICT OF INTEREST Investment responsibilities carry added duties of insuring that investments are made without improper influence or the appearance of improper influence. Therefore, the City Manager, Assistant City Manager, and the City Treasurer shall adhere to the State of California Code of Economic Interest and to the following: ► The City Manager, Assistant City Manager, and the City Treasurer shall not personally or through a close relative maintain any accounts, interest, or private dealings with any firm with which the City places investments, with the exception of regular savings, checking and money market accounts, or other similar transactions that are offered on a non-negotiable basis to the general public. Such accounts shall be disclosed annually to the City Clerk in conjunction with annual disclosure statements of economic interest. ► All persons authorized to place or approve investments shall report to the City Clerk kinship relations with principal employees of firms with which the City places investments. VIII AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS The City of La Quinta maintains a listing of financial institutions which are approved for investment purposes. In addition a list will also be maintained of approved broker/dealers selected by credit worthiness, who maintain an office in the State of California. 7 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 No. 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. The City Treasurer will also contact the following agencies during the verification process: IN. 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 deposit or (investment: A. Insurance - Public Funds shall be deposited only in financial institutions having accounts insured by the Federal Deposit Insurance Corporation (FDIC} B. Collateral - The amount of City of La Quinta deposits or investments not insured by the FD1 or other !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. The City shall not invest in excess of the iFCI nsuedmont !in banking institutions which do not disclose to the city a current listing of securities pledged for collateral ization in public monies. IX AUTHG3RIZED IN1/STI1lIEIT A11 LIIVIITTIONS The City Treasurer will be permitted to invest in the investments listed in the Appendix entitled - Authorized Investments and Biversification Limitations. AR i85 M, Sections 16429.1, 53601,•53649 of the SectionGovernment 6ode, the State of 6alifornia limits the investment vehic available to local agencies as surnmar a zed in the following pa-ragraphs. •01, • amended, provides • unless Section 53601 . - - . - . . - - - - - maturity, -•I no investments with. 11 be rnade-. The City of La Quinta Investment Policy has specified that no investment may exceed two year] State Treasurer's Local Aaencv Investment Fund (LAIF 0 Bankers' Acceptances As authorized an Government eode Sectoon 5360+ - (f), 40% may be invested in , 30% of the portfolie may be invested On Bankers' Acceptances with any one commercial bank. Additionally, the mattirity period cannot exceed 27E) Acceptances, although no more than however, Bankers' Acceptances are se'dom marketed with maturiti%..... ,, 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 atithorized anGovernment a Memorandum February 17, 1999 To: City Treasurer and Investment Advisory Board From: Don Moulin Subject: Suggested Revisions to Investment Policy For Fiscal Year 1999/2000 I reviewed the City of La Quinta's Investment Policy with due regard for the existing objectives and prepared recommendations for improvements for consideration by the City Treasurer and the Investment Advisory Board. The recommendations include reorganizing and combining several sections, adding two appendices, and providing more discrimination to strengthen certain investment limitations. The recommendations also cover revisions to clarify and improve the statements in the policy. Most of the suggestions are self-explanatory, but comments describe the reasons for a proposed revision in some sections. Suggested Revisions and Comments Page 2. Revise last sentence of Executive Summary to read "As part of the annual audit of the City of La Quinta's financial statements, the independent auditor reviews the adequacy of those controls and comments if weaknesses are found." Comment: The existing wording suggests that the independent auditor reports separately on the adequacy of internal accounting controls. The independent auditor does not report separately and it would be a costly process for the auditor to do so. Page 4. Replace the first sentence of Section H, Investment Policy, with: "It is the policy of the City of La Quinta to invest public funds with safety of principal as the primary objective. The investment portfolio shall be sufficiently liquid to meet anticipated cash flow demands and shall return the highest yield considering the constraints of safety of principal and liquidity." Comment: The suggested revision is made to conform the description with Section IV Objectives beginning at the top of page 5. Diversification is not mentioned because it is not a separate objective. Diversification is an underlying component of safety and liquidity. Page 4. The third item in the second paragraph of Section III Scope, is "Capital Projects". Page 5. The need for diversification should be included in item 2, Liquidity. Consider revising either the second sentence to read ...structuring a diversified portfolio so that..." or the last sentence to read "...the portfolio should be diversified and consist of..." Page 8. Revise Section VIII 2 as follows: Second line " receive City funds for deposit or investment:" Second line of A. to read "...institutions having accounts Insurance Corporation (FDIC)." Second line of B. "...by the FDIC or other agency..." Delete C. and change D. to C. Comment: Paragraph C. needed insured by the Federal Deposit is inconsistent with B. and not In the two paragraphs in D. (before changing it to C.) consider "the FDIC insured amount" instead of " $100,000". Second line of first paragraph of D. Revise to "...shall furnish the City a copy..:" Comment: If Section XI Collateralization is eliminated (recommended later in this memorandum) and relevant portions included in Section IX, consider also the need to add some of that information to Section VIII 2. B. 010 Page 8. Suggest revising Section IX in its entirety and incorporating within it existing Section XI Collateralization and Section XIV Maximum Maturities. The revised Section IX would be titled "Authorized Investments and Limitations". It would cover only the investments authorized by the City of La Quinta and exclude descriptions of State requirements. The policy of an overall maximum maturity of two years would be stated and, if a category of authorized investment has more restrictive limitations, they would be stated for each category. The State's authorizations and limits of investments would be included in a new appendix and referred to in IX. The existing appendix schedule comparing the City's authorization limits with the State's would be continued and referred to in IX but renamed "Authorized Investments and Limitations". Another new appendix should be added and updated annually that evaluates the credit and liquidity risk of each of the City's authorized investments. The City Treasurer should prepare this investment risk evaluation and the source of the information should be disclosed Page 12, Section XI Collateralization. Pertinent portions of Section XI should be incorporated in the Certificates of Deposit paragraph of Section IX. The City's requirement for collateral is also covered in Section VIII 2.D. Page 13, Section XIV Maximum Maturities. Section XIV presently consists of three sentences and the last two sentences cover maturity limits on LAIF and money market funds. Even if the investment policy is not reorganized, for consistency, these last two sentences of Section XIV should be moved to the respective LAIF and money market funds paragraphs in Section IX. Co mm nt: The inclusion of the State's investment code in Section IX as now written clutters the policy statement 'particularly as it covers investments not authorized by the City. This is overcome by adding a new appendix that contains all pertinent State investment code sections. The City's investment authorizations will continue to be compared with the State's authorizations in an appendix, now on page 17. The contents of Sections XI Collateralization and XIV Maximum Maturities are presently covered in Sections IX and VIII 2.B. Sections XI and XIV become redundant after a few additions to Sections IX and VIII 2. In addition to the aforementioned reorganization of Section IX, suggested specific revisions follow: Page 9, Government Agency Issues. Revise and categorize as follows: (1) U.S. Treasury bills, notes and bonds directly issued and backed by the full faith and credit of the U.S. Government. Consider no investment limitation as these securities have insignificant credit and liquidity risk. (2) U.S. Government agencies issuing securities backed as to principal and interest by the full faith and credit of the U.S. Government. GNMA is such an agency. Consider continuing the current investment limitation of 75% with a single issuer limit of 25%. (3) U. S. Government instrumentalities and agencies issuing securities not backed as to principal and interest by the full faith and credit of the U.S. Government. The FHLB, FFCB, FLB and FICB are such issuers. Consider an overall investment limitation of 30% with a single issuer limit of 15 %. (4) Federal government sponsored entities (GSEs) issuing securities not backed as to principal and interest by the full faith and credit of the U.S. Government. These GSEs include FNMA, FHLMC and SLMA. Consider an overall investment limit of 30% with a single issuer limit of 15%. Page 10, Diversified Management Companies. State that the only mutual funds authorized are money market funds that invest in direct issues of the U.S. Government, issues of GNMA, or issues of other U.S. Government instrumentalities, agencies or GSEs. If each of these categories is authorized, they should be listed separately and have different investment limits. Consider the following investment limitations for money market mutual funds: Investing in direct issues of the U.S. Government -- Overall 40% and 20% per fund; GNMA issues -- Overall 20% and 10% per fund; and issues of other instrumentalities, agencies or GSEs -- Overall 10% and 5% per fund. In determining the appropriate investment limitations, consider that the City also authorizes direct investment in these securities, thereby increasing exposure to 2 Oil the underlying risks. An alternative is to adopt combined limits on investments in money market funds and direct investments in comparable securities. Include the qualifying criteria for money market mutual funds now shown in the appendix on page 17 in this paragraph of revised Section IX. Page 11, Certificates of Deposit. Consider other qualifying criteria for banks besides "FDIC insured". Also consider a limitation on certificates of deposit with one bank of 10 or 15%. Page 11, Section X Investment Pools. First line, second paragraph. Revise to read "The City of La Quinta has authorized investment with..." First line, last paragraph. Revise to read "The City has not authorized investment with..." Section XH Safekeeping and Custody. Fifth line in paragraph. Revise to read "...the entity and not an investment advisor, broker or dealer." Page 13, Section XV Internal Controls. Revise the title to "Internal Controls and Independent Auditor". Paragraphs c. and d. appear contrary. Paragraph c. specifies that securities purchased shall be placed in custodial safekeeping, whereas paragraph d. urges not taking delivery of securities. Review and conform these two paragraphs. Penultimate paragraph of Section XV. Revise to read "The system of internal controls developed by the City shall be reviewed annually by the independent auditor in connection with the annual audit of the City of La Quinta's financial statements." Last paragraph of Section XV. In the first sentence, add an apostrophe to the word "auditors" in two places so it reads "auditor's". Delete the last sentence of the last paragraph and add "The management letter comments pertaining to cash and investment activities and the City Treasurer's response shall be provided to the City's Investment Advisory Board for their consideration. Following the completion of each annual audit, the independent auditor shall meet with the Investment Advisory Board and discuss the auditing procedures performed and the review of internal controls for cash and investment activities. Page 15, Section XIX Investment Advisory Board. Revisions to XIX are under consideration and are covered in a separate communication. Comment on the Citv's Limit on the Term of Investments The City now limits investments to a maximum term of two years. The State allows investment terms of five years. The City should consider allowing a "matched book" concept in certain circumstances. For example, if $5 million of funds is received for a specific, non - modifiable project specifying disbursement of $1 million per year for five years, the Treasurer should have the ability to invest the $5 million in securities with maturities of $1 million per year over five years, thereby matching required disbursements with maturities. Comment on City Ordinance Stating Terms of Members of IAB The last paragraph of Section 2.70.010 of the City Ordinance included on page 18 of the Investment Policy states that members "...serve for two year staggered terms..." Actual appointments are for three-year terms. No terms expire in 1999, four terms expire in 2000 and three expire in 2001. DJM 2/17/99 • . • - - . . , , . • I t • • - 1 • • • • • days. These are a number of other qualifications regarding investment- i eornmereial paper based on the funancial strength of the corporation and the f the The City of La Quinta has also required that no mor I million dollars I be invested -. • - entity at time. Neaotiable Certificates of Deposit d by co banks and savings and loan associationos-.- The City of La Quinta investment policy does not allow investment in Negotiable Certificates of Deposit. Repurchase and Reverse Repurchase Aareements - ER rive - - - - - t 9 : . .. • ..rep - - - - - - - • • • on the arnount of the repurchase agreement. I lowever, the maturi cannot exceed one year. The market value of securities underlying a ll • - - -agreement shall - least'. . • the funds t - - • • • • be valued atleastquarterly. City . • QuintaInvestmentPolicy does not allow investment in Repurchase 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, rever The City of La Quinta Investment Policy does not allow investment in Reverse Repurchase Agreements. Corporate Notes and Diversified Management Companies As authorized in Q'iv,vernment 6ode Section 536. :localagencies inay corporate invest : •irn perio •of five: •nt not to exceed •6 of the agency's portfolio. The notes must be issued by corpOrations -d and operating in the United States or by depository win IEIL-iwm"jqr. w NOR i. 11 53601 (n), i0cai age ty invest On mortgage backed securities such as agency's portfoliv. Securities eligible for investment shall have a Mortaaae-Backed Securities - As authorized in Government code Sect* higher • City •Quintainvestment policy does notallow investment in Mortgage -Backed Financial Futures and Financial Option Contracts - futtires or option contracts On any of the above investrnent eategories subject to the same overall portfolio lirnitatio The City of La Quinta Investment Policy does not allow investments in financial futures and financial option contracts. Certificates of Deposit -Jolla ral zb iar + ollaterali ation riii a required Certificates +� Oeosis♦ The type of collateral is limited toI City autharied. 'P� Cpllateralizatin mill be required forert�fiates ofepc�sits in excess of the gg ".I R!!1;l:l;!W . _ • • • all• • • • _ • • • 10• • MP t F • IV LVIIMLWMWJM hdii Web' • • 12 maturity for this 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. Rat ties -The City ofa Quints does nat allow the investment a derivatives.' X INVESTMENT POOLS There are three (3) types of investment pools: 1) state -run pools, 2) pools that are operated by a political subdivision where allowed by law and the political subdivision is the trustee i.e. County Pool; and 3) pools that are operated for profit by third parties. The City of La Quinta has an author zed investment with the State of California's Treasurers Office Local Agency Investment Fund commonly referred to as LAIF. LAIF was organized in 1977 through State Legislation Section 16429.1, 2 and 3. Each LAIF account is restricted to a maximum investable limit of $20 million. In addition, LAIF will provide quarterly market value information to the City of La Quinta. On an annual basis the City Treasurer will submit the Investment Pool Questionnaire to LAIF. Also, prior to opening any new Investment Pool account, which would require City Council approval, the City Treasurer will require the completion of the Investment Pool Questionnaire. The City hS tQt authorized investment with any other Investment Pool - County Pools or Third Party Pools. 13 in .. A ,VIA AiI OWN •INS I • • _ ♦ ♦ _ - - _ - - -ffl1MAOOIMAI . • - _ X1 X-H SAFEKEEPING AND CUSTODY All security transactions of the City of La Quinta shall be conducted on a delivery - versus - payment (DVP) basis. Securities will be held by a third party custodian designated by the City Treasurer and evidenced by safekeeping receipts. Deposits and withdrawals of money market mutual funds and LAIF shall be made directly to the entity and not to ati investment advisor broker or dealer. Money market mutual funds and LAIF shall also operate on a DVP basis to be considered for investment. XI W-I-NTEREST EARNING DISTRIBUTION POLICY Interest earnings is generated from pooled investments and specific investments. 1. Pooled Investments - It is the general policy of the City to pool all available operating cash of the City of La Quinta, La Quinta Redevelopment Agency and La Quinta Financing Authority and allocate interest earnings, in the following order, as follows: A. Payment to the General Fund of an amount equal to the total annual bank service charges as incurred by the general fund for all operating funds as included in the annual operating budget. B. Payment to the General Fund of a management fee equal to 5% of the annual pooled cash fund investment earnings. C. Payment to each fund of an amount based on the average computerized daily cash balance included in the common portfolio for the earning period. 2. Specific Investments - Specific investments purchased by a fund shall incur all earnings and expenses to that particular fund. X.111MV MAXIMUM MATURITIES The City of La Quinta shall require that each individual investment have a maximum 14 maturity years specific approval • • • • _ _ • • _ • — t t • • • t t I • I K—M LOA 0 LO - - - - I t I LIM L-M 0 - U. a 4 • 10 1 ILIAILIF LUX-*-7M _ - - . — - -M WYA'AWAILTA-r. - • - - _ t _ I • _ _ _ • I • • - _ _ _ _ _. • X VXVINTERNAL CONTROLS A lT R' 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; No. Prevention or detection of errors and fraud; ► The accuracy and completeness of accounting records; and, No. 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. 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 15 0 Q- 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. g. Development of a wire transfer agreement with the City's bank and third party custodian. This agreement should outline the various controls, security provisions, and delineate responsibilities of each party making and receiving wire transfers. in additiOn to the Systern of Internal 6ontrols developed by the (3ity, the Internaf T'system 6f he intrnl cootros shall reuie ec annually by tle indp+end+nt auiitQr in cor�necticni with the annual audit ©fthe'ity of La Quinta Financial Statements: X.XXVI BENCHMARK The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles commensurate with the investment risk constraints and the cash flow needs of the City. Return on investment is of least importance compared to safety and liquidity objectives. The City of La Quinta will use the six month U.S. Treasury Bill as a benchmark when measuring the performance of the investment portfolio. UXVtf REPORTING STANDARDS 16 n08 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 LAIF which will be provided quarterly; ► Comparison of actual holdings to Investment Policy maximums; ► Twenty four (24) months history of cash and investments for trend analysis; ► Balance Sheet. XOXISIV1414 INVESTMENT OF BOND PROCEEDS The City's investment policy shall govern bond proceeds and bond reserve fund investments. California Code Section 5922 (d) governs the investment of bond proceeds and reserve funds in accordance with bond indenture provisions which shall be structured in accordance with the City's investment policy. Arbitraae Reauirement 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. `1/1f X4X- INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA The Investment Advisory Board (IAB) consists of seven members of the community that have been appointed by and report to the City Council. The IAB meets on a 17 099 The appendices include City of La Quinta Ordinance 2.70 entitled Investment Advisory Board Provisions. WX 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. 18 (' '*10 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. 19 ni 1 0 � N a m 0 m J w aa) V) c 0 N a w E c ON m Q QLm o z z U)E > > C7 > o E C LL w °� E p > c� m y Z c w F- p Co c . V N42 co a-E w 2 a) N 0 .0 c N 3 m a Q ¢ .V; ai E m N a) N += C O U Co m E a� � a Q o N v O) c E n O ° L a) LA N N m m C 7 ° Li (D C'J c c o m O " m v N U U p ¢ = o W m CO U p LL LL m `o `o V m m > C CM C N V N V Mc m j �p N V N V M �� V N V m 'O O co 0 U (`7) h O — m O Ct a1 V co o o°a h c m O j ow N m C O N C 16 O)O ao O. m a o> ° d m >> m ptn E m _am m 12 O a) E OVO C m M ¢ a) O m U d9 V �CQ p C. 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E L m 'O = a c� a� 'u o m N c n o Na nm m Co a c m ts NU ° a� E� Om ; N o cc 'Z v = LL c m ` E OOm= ol 0 0 0. o s pm2o`E co a m U) 0 C m w j y O) m •C a) a C N w m € N •c U) O aoa m N d m QJ E U = m 2H 0 m N FL-c QE m C1 d— N M It to (O v m N y N C a) E h c N O T C pai m :No > 'N h 7 C a) - a N � am C 09 m m a) U) E C °c E y N N C N m `o O t3a O C ¢ m m w L � C m 0 C; °o LL O � m aU)) a) 0omcO ac N a) omcE � L w c taa) c .+ a) —q EmoN a) = 0 >Cmm C 0 N C o'a -m° ui om'- M o cv,- o cw m«. vEMa) acroEo 2 0 mN °UOom-am > m -0 w L c a) `jQ?oc) waa) �s c @ �E O �NL C 3 N- 0 ui0 — ca -0 a =°mDmo = 5A R =>>�5 ° Co m�t0 N EL°c N C or- (a� ��N Epumi 0 nma).-- E mccN mwmwN Lcwcm 0 c OR vEONN N mmwv� H.9 =w c . `; t• 2-o A-, . , T 1-1R T e- or-- CAL,) IfoltWA- &f)-WXLA-T)otuJ 4rJb Wrl rS Investment Type Maximum Maturity Maximum % of Portfolio Quality Requirements Local Agency Bonds 5 years No None US Treasury Obligations 5 years None None State of California Obligations 5 years None None CA Local Agency Obligations 5 years None None US Agencies 5 years None None Bankers Acceptances 270 days 40%4 Fed Reserve Eligible Commercial Paper 180 days '15% or 30%5 AI/PI rating Negotiable Certificates of Deposit 5 years 30% None Repurchase Agreements 1 year None None Reverse Repurchase Agreements 92 days 20% of base None Medium -Term Notes 5 years 30% A rating Mutual Funds N/A 20W Multiple Money Market Funds2 N/A 20% Multiple' Co d Ban — Deposits 5 years None None Mortgage Pass -Through Securities 5 years 20% AA rating Time Deposits 5 years None None County Pooled Investment Funds N/A None None Government Code Sections 53601& 53635 (ant hi ' d inv eats ' lude s unties n listed ' the abo chart, wellNint e 1 flo ers, ge otes, terest aly strt s deriv from pool s (Coll o d Mo age Ob ations and any ecun could esult in zs acern if h to 'ty, as ecifi in Secti 53601. 2 Thu document refers to Money Market Mutual Funds as Money Market Funds. They must have an average weighted maturity of 90 days or less and abide by SEC regulations. 3 Section 53601 states any investment that at the time of purchase has over 5 years to maturity must be authorized by the legislative body not less than 3 months prior to the investment. ` No more than 30% of the surplus funds may be in Bankers Acceptances of any one commercial bank. s Limit is 30% if dollar weighted average maturity of all commercial paper does not exceed 31 days. Commercial paper issuers must be US Corporations with S500 million plus in assets. Purchases may not represent more than 10% of the outstanding paper of an issuing corporation. 6 No more than 10% of an agency's surplus funds may be invested in any one mutual fund. Reverse Repurchase Agreements must be made with primary dealers of the Federal Reserve Bank of New York and the securities used for the agreement must have been held by the issuer for at least 30 days. I Mutual funds must receive the highest ranking by 2 of the 3 largest nationally recognized rating agencies gr retain an investment. advisor who is registered. or exempt from registration, with the SEC and has at least 5 years' experience investing in securities and obligations authorized in Section 53601 and 53635 (a j, rn or n) of the Government Code with assets in excess of S500 million. 9 Money market funds taunt receive the highest ranking by 2 of the 3 largest nationally recognized rating agencies QI retain an investment advisor who is registered, or exempt from registration, with the SEC and has at least 5 years' experience managing money market funds in excess of S500 million. to Zero interest accrual means the security has the potential to realize zero interest depending upon the structure of the security. Zero coupon bonds and similar investments that start at a level below the face value are legal because their value does increase. Z o U A4 X AlIrr co� I, �f_,,Je_ S- e_ C-_ -0 P-�� Q-4E -0 tT A-rJ� )ZiST L-A-c-C i Zc 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. 21 0.11 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) 22 0 16 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) 23 02�r� LISTING OF APPROVED FINANCIAL INSTITUTIONS No Changes to this listing may be made without City Council approval. W BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION 1. Name of Firm: 2. Address: 3. 9 Telephone: ( ) ( ) Broker's Representative to the City (attach resume): Name: Title: Telephone: ( ) 5. Manager/Partner-in-charge (attach resume): Name: Title: Telephone: 6. List all personnel who will be trading with or quoting securities to City employees (attach resume) Name: Title: Telephone: ( ) ( ) 7. Which of the above personnel have read the City's investment policy? 8. Which instruments are offered regularly by your local office? (Must equal 100%) % U.S. Treasuries % Repos % BA's % Reverse Repos % Commercial Paper % CMO's % CD's % Derivatives % Mutual Funds % Stocks/Equities % Agencies (specify) : % Other (specify) : 25 019 9.1 References -- Please identify your most directly comparable public sector clients in our geographical area. Entity Entity Contact Contact Telephone ( ) Telephone ( ) Client Since Client Since 10. Have any of your clients ever sustained a loss on a securities transaction arising from a misunderstanding or misrepresentation of the risk characteristics of the instrument? If so, explain. 1 1 . Has your firm or your local office ever been subject to a regulatory or state/ federal agency investigation for alleged improper, fraudulent, disreputable or unfair activities related to the sale of securities? Have any of your employees been so investigated? If so, explain. 12. Has a client ever claimed in writing that you 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 26 040 Do you have any current, or pending complaints that are unreported to the NASD? Yes No If yes, please provide action taken Does your firm have any current, or pending complaints that are unreported to the NASD? Yes No If yes, please provide action taken 13. Explain your clearing and safekeeping procedures, custody and delivery process. Who audits these fiduciary responsibilities? Latest Audit Report Date 14. How many and what percentage of your transactions failed. Last month? % $ Last year? % $ 15. Describe the method your firm would use to establish capital trading limits for the City of La Quinta. fluel Is your firm a member in the S.I.P.C. insurance program. Yes If yes, explain primary and excess coverage and carriers. No 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? 27 r) 15. 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. Please list your NASD Registration Number 22. Do you have any relatives who work at the City of La Quinta? Yes No If yes, Name and Department 23. Do you maintain an office in California. Yes No 24. Do you maintain an office in La Quinta or Riverside County? Yes No 25. Please enclose the following: • Latest audited financial statements. • Samples of reports, transaction confirmations and any other research/publications the City will receive. • Samples of research reports and/or publications that your firm regularly provides to clients. • Complete schedule of fees and charges for various transactions. ***CERTIFICATION*** I hereby certify that I have personally read the Statement of Investment Policy of the City of La Quinta, and have implemented reasonable procedures and a system of controls designed to preclude imprudent investment activities arising out of transactions conducted between our firm and the City of La Quinta. All sales personnel will be routinely informed of the City's investment objectives, horizons, outlooks, strategies and risk constraints whenever we are so advised by the City. We pledge to exercise due diligence in informing the City of La Quinta of all foreseeable risks associated with financial transactions conducted with our firm. By signing this document the City of La Quinta is authorized to conduct any and all background checks. Under penalties of perjury, the responses to this questionnaire are true and accurate to the best of my knowledge. Broker Representative Date Title Sales Manager and/or Managing Partner* Date Title 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? 29 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)? 30 041 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? 1 1. 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. 31 1. i 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? 32 1� 4 �=� SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES Function Responsibilities Develop formal Investment Policy City Treasurer Recommend modifications to Investment Policy Investment Advisory Board Review formal Investment Policy and recommend City Manager and City Council action City Attorney Adopt formal Investment Policy City Council Review Financial Institutions & Select Investments City Treasurer Approve investments City Manager or Assistant City Manager Execute investment transactions City Treasurer Confirm wires, if applicable City Manager or Accounting 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 33 04 r 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 and%o ............................. ovrnmentord enterprises. ASKED: The price at which securities are offered. BANKERS' ACCEPTANCE (BA): A draft or bill car exchange accepted by a bank +or trust company. The accep�tin irstitutor guaranteesayrrar�t of tie pill, as wcl as the issuer, e �s to obtain funds to finane eornmerC:aI transactions. They are th-fte drafts drawn onr-a bank by an exporte, oi & mportei—to obtain funds to pay for speeffit rnpre nandise. B-v it , the ban .:. 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): A time deposits with a, specific, maturity evidenced by ; a certificate. Llarge-denomination la's Or typi'caliy neotialaie.of - bank- or savings 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. 34 o4(s 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 ................................. DISCOUNT SECIJI�ITf N+aninterest bea'rfing rnorr�y market lnstrunerat that 'ark issued discount and redeemed at maturity for full fiace value, e.g., U.S. Treasury Bills. 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 35 individuals, e.g., S&L's, small business firms, students, farmers, farm cooperatives, and exporters. The following is a listing- +.—FNMAs (Federal National Mortgage Association) - Used to assist the home mortgage market by purchasing mortgages insured by the Federal Housing Administration and the Farmers Home Administration, as well as those guaranteed by the Veterans Administration. They are issued in various maturities and in minimum denominations of $10,000. Principal and Interest is paid monthly. 2. FHLBs (Federal Home Loan Bank Notes and Bonds) - Issued by the Federal Home Loan Bank System to help finance the housing industry. The 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 Bondsl - 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 ()4�) 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 Mortaaae 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. 36 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 0 5 (1 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 37 written contract covering all future transactions between the parties to repurchase --reverse repurchase agreements that establishes each party's rights in the transactions. A master agreement will often specify, among other things, the right of the buyer -lender to liquidate the underlying securities in the vent of default by the seller - borrower. MATURITY: The date upon which the principal or stated value of an investment becomes due and payable MONEY MARKET: The market in which short- term debt instruments (bills, commercial paper, banders' acceptances, etc.) are issued and traded. OFFER: The price asked by a seller of securities. (When you are buying securities, you ask for an offer.) See Asked and Bid. OPEN MARKET OPERATIONS: Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve's most important and most flexible monetary policy tool. PORTFOLIO: Collection of all cash and securities under the direction of the City Treasurer, including Bond Proceeds. PRIMARY DEALER: A group of government securities dealers who submit daily reports of market activity an depositions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its 051 informal oversight. Primary dealers include Securities and Exchange Commission (SEC) - registered securities broker -dealers, banks and a few unregulated firms. +�.UALIFIED PUBLIC I E ' S[TOI [E5; A f�nancielrstltutan WuhiGh saes not Glare exernptian from the payment of any axles or compensating use or ad valorem taxe$ under the laws of this state, which has segregated 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. "sell+r" rnarey far the periodf the. agreement, and the ter1.ms of the agreement SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection. SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following the initial distribution. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. SEC RULE 15C3-1: See Uniform Net Capital Rule. STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMAS, SLMA, etc.) And Corporations which have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative -based returns) into their debt structure, Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and 05,') 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 necessities to be payment due within one week. TREASURY BILLS: A non-rtere.st bearing discount security )sluedy ta.1»» Treasury to firane tle ntican�ltlst bills aro issued t4 mature in three months, six mirtlsj or one year.ssued weekly with 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. TREASURY NOTES: Medium -term coupon - bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker - dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and 39 commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. UNIFORM PRUDENT INVESTOR ACT: The State of California has adopted this Act. The Act contains the following sections: duty of care, diversification, review of assets, costs, compliance determinations, delegation of investments, terms of prudent investor rule, and application. YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par of plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. INVESTMENT ADVISORY BOARD Business Session Item No. C Meeting Date: March 10, 1999 TITLE: Upgrade of Banking Software for Y2K BACKGROUND: The City of La Quinta has recently been notified by Wells Fargo that the banking software that we have been using is not Y2K compatible and that it will be discontinued on June 30, 1999. Staff has met with our banking representatives on bank products that are Y2K compliant which are as follows: 1. ACH Express for Windows (Attachment No. 1) The City uses the DOS version of this product for payroll liability and payroll direct deposit processing. The software is on the Account Technician's computer. Staff is upgrading to the ACH Express for Windows version to be Y2K compliant. 2. PC Manager 3.0 Cash Management (Attachment No. 2) The City uses the DOS version of this product called "ACTION" which will no longer be supported and is not Y2K Compliant. The Software is on the Treasurer's computer. Staff is upgrading to the PC Manager 3.0 software which is Y2K compliant and also has additional features. The City currently uses the "ACTION" software for account balance tracking, cash flow estimates, deposit and check clearing information. The PC Manager 3.0 software will replace the "ACTION" software and also provide for online processing of the following: Stop Payment - Done by phone Positive Pay - New feature Photocopy request - Done by phone Wire Transfers - Done by phone Account reconcilement - New Feature The PC Manager 3.0 Software is available on a network or stand alone basis. Staff would maintain the software on the Treasurers computer initially with possible future mitigation to the network version if deemed appropriate. The cost of upgrading to the new version with the new features will be covered with cost savings from using the new software versus currently using the phone. RECOMMENDATION Review, Receive and File J hn M. ralcV6ner, Finance Director 00 Fab-25-99 17:06 Fran-WDB III SF T-Old P.01 F-523 February 25, 1999 CITY OF LA QUINTA ATTN: JOHN FALCONER FAX# 760-777-7105 Dear Mr. John Falconer, I ATTACHMENT NO. 1 We ace pleased to inform you that you can ,stow iccelve a free upgrade to the Windows -based version of our ACH Express sejA ice. The new software, AG11I Express`' for Windows, offers all of the comprehensive functionality of your current scrvices plus the Convenience of an easy -to -use Windows interface. Applications available include Direct Deposit of Payroll, C.oitsurner Debit, Federal & State Tax Payments, and Cash ConcentratiorvDisbursement . in addition, ACH Express for Windows includes a number of new features designed to help you savr accounting there, reduce paper handling, and reduce the risk of fraud. The enclosed Fact Sheet provides an ovcivicw of the serice. Highlights of the enhancements include: • Dow tmpttrt: elirnhwuc tr. kr.yirte, of (lata fiotu'i payroll and other applications • Multi-user access: allows simultaneous access in a LAN environment • Enhanced security: state-of-the-ar(protection for your accounts • Federal Tax payments via EFTPS: If you are mandated to file electronically, you can now use ACH Express jbr 9111dows to pay your Federal taxes. ACH Express for Windows is also Year 2W) (Y2K) ready, so we encourage YOU to upgrade now. Support far the current ACTION ACH product will be discontinued in .tune of 1999. The enclosed package includes a*erything you need to help you with the upgrade process: ✓ ACH Express for Windows Fact Sheet — including hardware/software requirements ✓ ACTION ACH to ACH Express for Windows Conversion Instructions ✓ ACH Services Set-up form ✓ ACH Reference f'ard ✓ System Administrator Security Form ✓ Application and Agreement for Cash Management Services Please complete the fornis rind is um thew to the ACH: I xpress Conversion. Team at the address cncl scd in t}Its package. Phase contact your rtlatiotuhip manager if you have questions regarding the new agreement. Once we receive the envelope. we ,will sccul you tlic ircw� softwa4i and help you through the conversion process. Be sure to refer to the hardware/software requirements Lin the encln-x-d FAM Sheet to ensure optimal performance. Remember, there is no charge to upgrade to the Windows service. Depending on your usage profile, you may see a. reduction in fees using the new 4rvice. Talk to yotu relationship manager for details. If ynic have any questions about your upgrade, please call your relationship manager or the ACH Express for Windows c.onversinn hotline at 1-800-966-168-5. Sincerely, ^� 1 C�arun�cho CH Express Conversion Team f� 003 ti r F-eb-25-99 17:08 From-WDO I SF T-014 P.02 F-523 ASH MANAGEMENT ACH Express"' for Windows Wells Fargo's ACH Express for Windows brings the payment efficiency of the Automated Clearing House right to your desktop. Using your IBM. -compatible PC, you can initiate and manage a wide variety of transactions quickly and convCuicu[ly. With Wells 17-argo's electronic link to the ACTH, you can deposit employees' wages directly into their checking accounts, make state tax payments, book transfers and ve,tdor payments, and execute other dcbir and credit transactions. How You Benefit > Data Import. You can bring a properly formatted > Easy, Low -Cost Startup. Ali you need to access the ACH network is Wells Fargo's ACH Express for Windows software anc[your PC. >- Increased Efficiency and er Operating Costs. By making payments and Jebits electronically, you reduce paper handling, save accounting time, reduce errors and lower the risk of fraud. Improved Funds Management. ACH Express for Windows provides fastgr access to your account balances, allowing you to better manage your funds. f State -of -the -Art Security. Access to sensitive payment data and a uthority to process transactions are strictly controlled. Security features permit individual operators to perform only those functions you have specified. i * The Convenience of Windrs.The Windows interface is easy to learn and to use. The software automatically prepares files in the correct format and comes with full documentation and online help screens. Screens are tailored to the kind of payments you make, and you can quickly navigate between screens and review files before transmission. i > Muni -User Access. When Installed on a Windows NT 4.0 or Novell 4.11 network, multiple users may simultaneously access the ACH Express for Windows database from different workstations. ASCII file directly into the ACH Express for Windows database with no re -keying of data. > Reporting. ACH Express for Windows provides up -to -dare reports for transmitted files, audit trails and reconciled transactions. > Breadth and Versatility. ACH Express for Windows allows you to make a variety of payments and transactions electronically, • Direct Payroll Deposits. Deposit hourly pay or salaries directly into employees' checking accounts. • Cash Concentration and Disbursement. Consolidate funds from your remote locations and disburse operating funds to other accounts. * Federal and State Tax Payments. Initiate federal and state tax payments using screens designed to meet specific federal and state requirements. • Book Transfers. Transfer money between your Wells Fargo accounts quickly and easily. • Vendor Payments. Set up an automatic payment program for all vendors you pay on a regular basis: ACH Express for Windows keeps track of the most recent payments and totals paid to date. • Consumer DeWL Receive customers' payments electronically --an outstanding feature for any business with a large number of retail customers. Wells Fargo Fast Then. Fast Now. www.welisfargo.com continued on reverse side 004 Feb-25-99 17:09 From-M IMPISF T-014 P.03/18 F-523 i ACH Express" f6r Windows continued i How It Works Hardware and Software Requirements 1.You build a transaction file of your PC using ACH The following specifications, are required to ensure Express for Windows. When you have completed the srnoorh operation of ACH Express for Windows and verified the file, you transmit it to Wells Fargo. on your PC. if you are not stare that your equipment meets the minimum requirements, consult the user's meets 2.Wells Fargo receives your transmission and processes that came with your hardware or software, or the file. Your account is then debited or credited to contact the equipment vendor.reflect the net total of your transactions. Processor IBM compatible Pentium 31.On the effective date, the individual transactions are posted to the appropriate Wells Fargo and RAM 32 MB non —Wells Fargo accounts. (64 MB for Windows NT 4.0 server) i 4. On the morning of your settlement date, your ACH Hard Dick 200 MB available (Windows 95 or NT 4.0 report Origination r rt is availab on Wells Fargo's g I stand-alone) SW MB available (Windows NT 4.0 server or information reporting system Information Expres.5t Novell 4.11 server) This itemized report allows you to review and Operating Windows 95' (stand-alone) archive the processed tramiacl ions and to enrraicr System Windows 90 (stand-alone) errors in a timely manner. u Windows NT 443 (stand -atone or network) Novell 4.11 (network) Modem Hayes compatible with outside phone line 9,600 baud (minimum) 14,400 baud (recommended) or Shiva LanRoverlE Plus modem pool odd 640g480 monitor resolution CD and/or 3S'drivefor Installation Default Windows fonts Printer "Windows 9S must be version 4.00.9SOb. 3Windotm NT 4.0 mast Bove Service Pack 3 installed. Windows is a registered trademark of Microsoft Corporatiam IBM is a registered trademark of IBM Cwporation. Pendum is a registered trademark of Intel Corporation. 4 � a a�w � ■ R.pvrt D�rte r ar f• � � Debit And credit AttibUnh at wens Forge 2 Debit and Credit Accounts atOthwUnks 3 ACH Express %r wlndowi 1AIa11: FargoACN•� Rec4ivinq sinks on Your PC r- J i is IMP SF OPP�I.9tiWE t i BANK T-014 P.04/18 F-523 ACTION ACH TO ACH EXPRESS FOR WINDOWS CONVERSION INSTRUMONS 1. Please tilt all the Company dames, related Abbreviated Name, Settlement Account Number and Company ID Number for each company on the ACTION ACH (AutoCash) software. If more space is needed, please attach a separate sheet of paper. SETTLEMENT CONVERT ACCOUNT TO COMPANY NAME ABBREVIATED NUMNUMBER COMPANY ID WINDOWS? WINDOWS? NAME 2. 3. 4. 5. To locate this field, log, into ACTION ACH, select SET-UP I COMPANY PROFILES. A threeihameter code will be listed for each company, 2. Please list all the databases 4rrently on the ACTION ACH software. DATABASE NA I NO. OF TRANSACTIONS TION TYPE I IN DATABASE To locate this data, log in to ACTION ACH, select PROCESS I EDIT. A list of dambases will appear. 3. System Specifications: Cusco mers must have a PC with at a minimum the configuration specified below. • Installation Method: ❑ C -ROM or ❑ 3.5" Diskettes ❑ Local drive installation CPU: i Operating System: Version (or Service Pack): Hard disk space available: RAM Mo&-m Name: Baud: ACTION ACH to ACH Exprew for WhDdows — Page l of 2 Conversion Instructions ti 006 Feb-25-99 1T:12 FrwWDB IMP SF T-014 P.05/18 F-523 ACTIONACH TOACHEEXPREMfORWINDOWS CONVERSI©NINSMUCUONS ❑ Network drive inlation Server software.i Disk space available: RAM: Client CPU: Operating Sys: Version (or Service Pack): Client Hard dish space available: Client RAM: Modem Name: Band: Modem Pool? YES NO System Requirements + Pentium (or comparable) processor + 200 MR available disk space for stand-alone 1! 500MB for network + 32 MB 65f RAM for stand-alone fl 64MB for network • Hayes-cpmpatible modem connected to a phone line with outside access or a Shiva LanRoverlE Pius modem pool. • 3.5" floppy drive (required) fi CD-ROM drive (optional) + WindovKs default fonts (including Mierosofte 8-point Sans Serif) • 640 x 480 monitor resolution • Windows 95 (version 4.00.950b) • Windov s 98 • Windows NT 4.0 for stand-alone or network environments (with Service Pack 31, + Novell 11 for work environments • A priat� Net(recommended for printing reports) 4. Data Import Module- allows you to import a standard ASCU file into ACH Express for Windows. Please indicate if you would like to receive the Data Import module: X 5. Customer Signature t 0 No Authorized Signature Date { For Implementation Use Only Implementor: Date: TED Case: Pkg ID: I Customer Profile ID _._ ._._ RID BID Batch Header Names: Batch Header Name2• I Batch Header Nmw3• — — — — — — — — — — BatchHeader Name4:._. _._....�....._ .�......._....� _.._ �..� ._._ _.....� ...._ Batch Header Names: i ' ACTION ACH to ACH Express for Windows Page 2 of 2 Conversion Instructions Feb-25-99 17:13 From-WDB IbJPLSF T-014 P.46f18 F-523 ACH SERVICES SETUP FORM WELLS FARGO ] PLEASE REFM TO THE ACH REFERENCE GUIDE FOR COMPLETE INSTRUCTIONS 1. Desired Start Date: — f — — ! — — (MMIDDIM 2. TYPE OF REQUEST: New/Add Change Delete For Changes, indicate current input medium: ❑ Vendor ❑ Wholesale Batch Data (WBD) ❑ Connect:Mailbox 3. TYPE OF ACH SERVICES: Lj Credits El Debits LJ Cash Concentration Z ACH Express far lVindows 4. COMPANY INFORMATION: Company Name: Address City: Contact Name: _ Contact Title: _ State: Zip: Taxpayor M. S. BANDING INFORMATION: Settlement Account Number. Account Officer Name: Phone:( ) Phone: (— Exception Processing (Returns) Account Number(if differeru): — — — — — — — — — — Number of ACH IDW: (Direct Transmission Customers Only) ACH ID New Y/N Settlement Account Delete lN) ACH Point Yi1V New ACH Point (if deleting an existing Point) N I N N 6. INPUT MEDIA: (choose one) ❑ Direct Transmission (attach Transmission Requirements Form) ® ACH Express for Windows (attach ACH Express for liindows Customer Processing Instructions) ❑ Vendor (attach vendor documentation): ❑ EXISTING Vendor/Site (indicate Vendor ID, if known ) (if known) Transmits to Wells Fargo via ❑ Connect:Mailbox ❑ Wholesale Batch Data ❑ NEW Vendor/Site (NOTE. Vendors not currently transmitting to Weds Fargo must complete Transmission Requirements Form attd undergo testing BEFORE first live transmission of customer data can be accepted) IM ACH less Setup Form Page I of 2 achsetup.doc 008 1 Feb-25799 17:15 Fran-WD6 IIP11SF T-014 P.07i18 F-523 ACH SERVICES i SETUP FORM 7. Vendor Natne: Vendor Contact: Address: Phone: City: State: Zip: OPTIONAL SERVICES: ❑ IE Reports: (attach 1E reporting setup documentation) ❑ 1131213 ACH Origination ❑ 115t215 NACHA Origination ❑ 1201220 Return/Redeposit ❑ 1261226 File Processing Confmnation ❑ 141/241 ACH Customer Activity Report ❑ 123 Wholesale Batch Data Transmission Confirmation i ❑ AuWax Contact Nam#: Phone: {^_� flax: ❑ Returned items Paper 4eport ❑ Returned Items File Transmission: (attach Transmission Requirements Form) ❑ Asynchronous ❑ Bisynchronous ❑ Automated RepresentmentwIteclears: Maximum Amount of Returned Item: Minimum Amount of Rettum d Item:— ❑ ConnecuMadbox Automated Transmission Confirmation 8. SPECIAL INSTRUCTIONS: DOS TO WINDOWS CONVERSION 9. FILE VERIFICATION CONTACT UST Primary Contact: Phone: { ) Secondary Contact: Phone: (�_) 10. PREPARED BY: Name: (please print) , Phone: ( Fax: () Implementation Use Only Implementor: Case #: Package ID: Received: Forwarded to C-Start/ACH Ops: ACH Setup Completed: 1198 ACH Services Setup Forte Page 2 of 2 achsetup.doc 009 Feb-25-99 17:16 Fran-WDB IMTF I WELLS FARGO BA.N�K Company Name ACH Company Reference Card T-014 P.08/18 F-523 Date: Company I.DIMaxpayer I.D.: Company Account Number: py - City State I Zip Code 4 u A i r nip..... Payroll Vendor Location I Payroll Vendor code The persons listed below are hereby autborized to sign and transact ACH business for tins acenurit by: Authai=d Customer Sigttame AUTHORIZED REPRESENTAUVE NAMES AREA CODE) PHONE NUMBER SIGNATURE t ) c ) Account to be DebitedfCretEsed for Returns: Type of Transaction initiated Debits: OPERATIONS CONTACT LIST Company Names Phone Number ( } Night Number ( ) In case of processing difficulties. call and notify cote of ilte appropriate individuals below: Credits: FIRS T SHIF!' SECOND SHIFT THIRD SHIFT FROM: TO: FROM: TO: FROM: TO: NAME NAME NAME PHONE( ) PHONE( ) PHONE( ) NAME NAME NAME PHONE ( ) PHONE ( ) PHONE ( 3 Method of input: Tract mission Vendor Payroll ACH Express for Windows FOR BANK USE ONLY Cash Management Representative: Phone: Date Received: Stm of Origination: Accepted By: File Dollar Limit S SPECIAL INSTRUCTIONS ON FILE Polar. Application: &97 ACH ConVwy Reference Cat'd acheard.doc i. IMPLSF A I. Start Date T-014 P.09/18 F-523 ACH EXPRESS® FOR WINDOWS SYSTEM ADMINISTRATOR SECURITY FARM ❑ UPDATE ❑ DELETE 2. Customer Information Company Name Setdement Accouurt Number (One Main Account Required) Family Number y , (optio1w) 3. System Administrator Authentication Information Customers are encouraged to specify at least two authorized individuals. If more than two administrators are given, please attach a separate sheet. System Administrator I System Administrator 2 Name Business Address Business Phone Mothers; Maiden Name 4 Place of Birth 4. Authorized Signatures i System Administrator I For Relationship Manager Use Only Print Name: Signature: System Administrator 2 For implementation Use Only Implementor: Date: ACR Express* for Windows Page ! of 1 System Administrator Security Form 3/27/98 Olt Feb-25-99 17:19 Fran-M 11ATF T-014 P.10/18 F-523 e t WELD FAROO BANK Customer Number. WELLS FARGO BANK, NATIONAL ASSOCIATION APPLICATION AND AGREEMENT for CASH MANAGEMENT SERVICES a (4youl, request that WELLS (Company Name) (type of legal entity) FARGO BANK, NATIONAL ASSOCIATION ("Wells Fargo, We"or bsj provide cash management services (each a Servicel in connection with your wells Fargo Wholesale Demand Deposit Account (WDDAj. You acknowledge receipt of our CASH MANAGEMENT SERVICES DISCLOSURE STATEMENT (`Disclosure Statementl. For each Service, this Application and Agreement, the Disclosure Statement and the User Documentation for that Service (collectively, the "Service Documentation] together with our WDDA Disclosure Statement (a copy of which was previously provided to you), as each may be modified or amended from time to time, contain the terms and conditions governing our provision of that Service to you, and any of your subsidiaries or affiliates on whose behalf you are acting. You and such subsidiaries and affiliates agree to be bound by such terms and conditions. (The term `you" as used in the Service Documentation means you and any such subsidiary or affiliate.) ff you are already a Wells Fargo cash management customer, the Service Documentation for any Service(s) you are currently receiving replaces your existing agreement(s) with any Wells Fargo Bank or First Interstate Bank with respect to such Service(s) , unless such Services) are listed as "Excluded Service(s)" on the signature page below. Our existing agreements with you with respect to each Excluded Service will remain in effect and continue to govern each Excluded Service. For your convenience, definitions of certain capitalized terms used below and in other Service Documentation are set out in a Glossary located at the end of the DisclosureStatement. Certain of the Services involve Funds Transfers or ACH Transfers out of or into your designated WDDAs teach a Transfer Accountl. In an effort to detect unauthorized requests for transfers of funds, we have established the following security procedures (Security ,Procedures) with which you agree to comply. Additional details with respect to the E; ;Purity Procedures are located in the Disclosure Statement and the applicable User Documentation. Wells Fargo shall have no obligation to process a Funds Transfer or ASH Transfer for which you have not complied with the relevant Security Procedure. 'Except as expressly provided below, Wells Fargo is under no. aq�ee_doc , ,. 012 Feb-25-99 17:22 Fran-M IMPOF T-014 P.11/18 F-523 I obligation whatsoever, and shall have no liability for failing to investigate or verify, any request for a Funds Transfer or ACH Transfer. SECURITY ROCEDURES FOR AUTOMATED CLEARING HOUSE CACHI TRANSFERS Direct Transmission and ETS Vendor Transmission You are required to provide processing schedules for your ACH transmissions and a list of the names and telephone numbers of persons authorized to request and confirm your ACH transactions (Authorized Representativesl. We will provide a transmission code to you whioh you must use with each transmission of ACH file(s) through your PC or mainframe. We will also assign a file identification code and a batch identification code to you which you must imbed in each NACHA-formatted ACH file. On each day you are scheduled to transmit a file, we will attempt to verify the transmission by calling one of your Authorized Representatives at the number you have provided and requesting the total debit and credit gollar amounts and Item count of the ACH file to be transmitted. If we are unable to reotch an Authorized Representative after attempting to call each Authorized Representative once, we will not process the transmission. If we receive an unscheduled ACH file, we will attempt to verify the transmission by calling one of your Authorized Representatives at the number you have provided who must then telecopy us a letter written on your letterhead, purportedly signed by that Authorized Representative, requesting that we process the unscheduled file, and must include the total debit and credit dollar amounts and total item count of that file. The letter must otherwise be in form and substance satisfactory to us and must be received at least one hour prior to ours processing deadline. If we are unable to reach an Authorized Representative after attempting to calf each Authorized Representative once, we will not process the transmission. The totals provided by your Authorized Representative by telephone (in the case of scheduled transmissions) or by telecopy (in the case of unscheduled transmissions) must match the actual totals of the ACH file transmitted or the transmission will I not be processed. {If ACH files are delivered to us by your electronic transmission service vendor VETS Vendorl, you must still comply with the foregoing procedures' except that the 'Authorized Representatives„ shall be those designated by the ITS Vendor who shall also provide us with your processing schedules.) We are,' only required to determine if the name given by the person verifying a transmission by telephone, or whose name appears on any letter verifying a transmission, is listed as an Authorized Representative on the list you have provided us, but we are under no obligation to confirm any such person§ identity. ACH Expresso for Windows. If you use ACH Express for Windows to deliver your ACH files, you must install the ACH Express for Windows software on your PC in order to communicate with our systems. You may install the software on only one desktop computer, one remote PC or one Local Area Network. You will designate at least one of your employees to be your ACH Express for Windows System Administrator. You will communicate to us the name(s), address(es), telephone number(s), maiden lames) of mother(s), and place(s) of birth of the System Administrator(s) upon ;whom we may rely with respect to all ACH Express for Windows agme.doc I 2 2W 013 Feb-25-99 1T:25 From-M IMNSF T-014 P.12/18 F-523 related matters. To enable start-up, we will provide to you six temporary System Administrator IDs and I corresponding temporary software access passwords. (You shall be responsible for the temporary System Administrator IDs and temporary software access passwords we have provided for System Administrator start-up, including their security, until you have either used them or have manually deleted them.) Upon first successful log -on using one of the temporary System Administrator lDs and its corresponding temporary software access password, each System Administrator shall create a software access password, which must be changed at least once every 60 days, and a perman fit System Administrator ID. The System Administrator(s) shall enable access to AC Express for Windows for those employees you have designated to be Operators by assigning them temporary software access passwords, which must be changed upon first successful log -on and at least once every 60 days thereafter, and permanent Operator IDs. In order to gain access to ACH Express for lndows, an Operator must enter his/her software access password and Operator ID. We will also assign a batch identification code to you (which the ACH Express for windows software will imbed in each NACHA-formatted ACH file) , and we will provide you a remote identification code which the System Administrator(s) will manually imput into the user profile for eaich Operator allowed to transmit files, which remote identification code will thereafter be imbedded automatically when a file is created. In order to enable file transmission, we will provide a fixed communications password required for access through our Connect Mailbox application. Prior to transmitting a file, such an Operator must imput the communications password. You may set the following transfer limits (which will be resident on your PC): number of entries per batch; batch entry dollar amount; batchXwithin Il dollar amount and transmission dollar amount per file, and each transfer shall such limit(s). In addition, ACH Express for windows allows you to separate among your Operators the ability to create, verify and send transfer requests, and we strongly recommend that you do so. IF YOU DISREGARD THIS RECOMMENDATION, YOU INCREASE THE RISK THAT THERE WILL BE A LOSS, FOR WHICH YOU WILL BE RESPONSIBLE, RESULTING FROM AN UNAUTHORIZED OR FRAUDULENT ACH TRANSFER. V mlows is ft mgisWod Erademark of tM W==ft COW 0= SECURITY PROCEDURES FOR ACH TRANSFERS INITIATED THROUGH OUR CASH CONCENTRATION/CASH DISBURSEMENT SERVICE If you use our ash Concentration/Cash Disbursement Service, you may make s for ACH Tralsfers b touch-tone telephone or computer terminal. If you use a request Y touch-tone telephone,you must dial the 'number we provide you and follow the prompts, entering the User ID and Location ID we provide you and the amount of the ACH Transfer(s) you wish made. If you use a computer terminal, you must use the access number we provide you and follow the prompts, entering the User ID and Location ID we give you, your pa§sword and the amount of the ACH Transfer you wish made. We will assign each of your Operators a temporary password which each of your Operators must change upon his/her first successful log -on via computer terminal to the Cash 2'98 agree.doc 0-14 Feb-25799 17:28 Fran-M 1141`�SF T-014 P.13/18 F-523 Concentration/Cash isbursement Service and which they should change thereafter at least once every 90 ays. The Location Code, which we assign you based on the information we receive on your Set -Up Forms, will allow us to determine whether an ACH Transfer will be gn ACH Credit or ACH Debit and the account from which and into which the ACH Transfer will be made. SECURITY PROCEDURES FOR ACH TRANSFERS INITIATED THROUGH OUR PAYMENT MANAGEF? SERVICE You must speqify, in our Payment Manager Set -Up Forms, the format in which you will transmit your payment files to us, the payment vehicle(s) you will use (e.g., checks, ACH or both), your transmission schedule, the applicable transfer limits, and the names and telephone numbers of those persons authorized to request and confirm your transmissions (Iuthorized Representatives'. You must comply with Wells Fargo'; General Transmission Implementation Procedures which are a part of the User Guide for our Payment Manager Service. We will provide you a transmission ID and a customer application ID both of which must be included in the electronic transmission envelope accompanying the files you transmit to us. The customer application ID allows us to verify your transmission by matching certain salient characteristics of your transmission against a predefined processing profile developed from information you have provided in your Payment Manager Set -Up Forms. If no match is created, we will not process the transmission. In addition, if you wish to have your electronic transmissions sent to us through a value added network (VAN), we must approve the VAN and set up the transmission detail. If we receive an unscheduled transmission, we will attempt to verify tale transmission by calling one of the Authorized Representatives at the number you have provided who must then telecopy us a letter written on your letterhead, purportedly signed by that Authorized Representative, requesting that we process the unscheduled transmission, and must include the total debit and credit dollar amounts and total item count of the files transmitted. The letter must be otherwise in form and substance satisfactory to Wells Fargo and must be received at least one hour prior to our processing deadline. If we are unable to verify the transmission as provided above after two attempts to reach an Authorized Representative, we will not process the transmission. The totals provided by your Authorized Representative by telecopy must match the actual totals of the files transmitted or the transmission will not be processed. We are only required to determine if the nam4 given by the person verifying a transmission by telephone, or whose name appears' on any letter verifying a transmission, is listed as an Authorized Representative on the list you have provided us, but we are under no obligation to confirm any such perspng identity. SECURITY PROCEWRES FOR ACH TRANSFERS INITIATED ELECTRONICALLY 1 THROUGH OUR WellsTax SERVICE We will provide you with a temporary PIN (which you must change upon your first successful log -on to WellsTax and you should change at least once every 90 days W98 agme.doc 4 015 Feb-25799 17:30 From-M II,P�SF T-014 P.14/18 F-523 thereafter) and an access code, each of which your Operators must use when initiating a transfer through WellsTax. If you initiate transfers of funds through your PC, you must use our WelisTa� software. i i SECURITYI PROCEDURES FOR FUNDS TRANSFERS INITIATED THROUGH OUR PC MANAGER® SERVICE You must install our PC Manager software on your PC which will allow you to communicate with our systems. You will determine which of your employees will be Operators and have access to PC Manager. In your communication with our systems, the Operator must enter your User ID (which we will provide), your PCID (which we will provide), your PC Manager Administrator ID (which you will select during PC Manager registration) and his/her temporary password (which we will assign for that Operator). You will assign a temporary password to each of your other Operators, and each of your Operators must be required to change his/her password upon his/her first successful log -on to PC Manager and thereafter at least every 90 days. After your first log -on, communications by any of your Operators can only be initiated by inputting your User ID and the OpeTtod password. You shall communicate to us the name, address and telephone numbdr of your PC Manager Administrator upon whore we may rely with respect to all PC Manaager related matters. You must also set the following transfer and operator limits (which will be resident on your PC): daily transfer limits for each Transfer Account, daily transfer limits for each Operator, and Operator limits for each Funds Transfer, and each Funds Transfer must be within each such limit. In addition, PC Manager permits you to separate among Operators the ability to create, verify and send transfer requests, and we strongly recommend that you do so. IF YOU DISREGARD THIS RECOMMENDATION, YOU INCREASE THE RISK THAT THERE. WILL BE A LOSS, FOR WHICH YOU WILL BE RESPONSIBLE, RESULTING FROM AN UNAUTHORIZEDIOR FRAUDULENT FUNDS TRANSFER. a SECURITY PROCEDURES FOR FUNDS TRANSFERS INITIATED VIA TELEPHONE WELLS FAAGO DOES NOT RECOMMEND THESE SECURITY PROCEDURES. WE RECOMMEND THE SECURITY PROCEDURES SET FORTH ABOVE FOR FUNDS TRANSFERS INITIATED THROUGH PC [MANAGER. IF YOU DISREGARD OUR RECOMMENDATION AND USE THE SECURITY PROCEDURES BELOW BY INITIATING FUNDS TRANSFERS BY VOICE VIA TELEPHONE, YOU SIGNIFICANTLY INCREASE THE RISK THAT THERE WILL BE A LOSS, FOR WHICH YOU WILL BE RESPONSIBLE, RESULTING FROM AN UNAUTHORIZED OR FRAUDULENT FUNDS TRANSFER. In the Set -Up; Forms for our Funds Transfer Services, you are required to provide a list of the names and telephone numbers of those persons (Transfer Authorizers) who are authorized to request Funds Transfers out of or into each Transfer Account. We will attempt to verify each request for a Funds Transfer by (i) V98 ag scdoc Feb-25-99 17:33 FrwWDD IMP SF T-014 P.15/18 F-523 checking the name given by the person requesting, and in the case of non -Repetitive Funds Transfers verifying, the Funds Transfer into or out of a Transfer Account to ensure that it is oneof the names of Transfer Authorizers you have given us for the relevant Transfer Account, and (ii) in the case of Repetitive Funds Transfers, checking the repetitive requests number given by the person requesting the Funds Transfer into or out of a Transfer Account to ensure that it is one of the repetitive request numbers we assigned to the relevant Transfer Account, and (iii) in the case of requests for non - Repetitive Funds Transfers, by calling back a Transfer Authorizer for the relevant Transfer Account, other than the Transfer Authorizer who purportedly made the request, at the telephone number you have provided for such other Transfer Authorizer. No non -repetitive Funds Transfer will be made if it is not verified by such name verification and call-back procedure. No request for a Repetitive Funds Transfer will be honored unless the person calling In the request provides a valid Transfer Authorizer name and repetitive request number. No call-back will be made to attempt to verity any request for a Repetitive Funds Transfer. In accepting and, in the case of non -repetitive Funds Transfers, attempting to verify by call-back, voice -initiated telephonic requests for Funds Transfers out of or into a Transfer Account, we are only required to determine (a) if the name given by the person requesting or verifying a transfer is listed as the name of a Transfer Authorizer for that Transfer Account, but we are under no obligation to confirm any such persort identity, and (b), in the case of Repetitive Funds Transfers, if the repetitive request number given by the person requesting the transfer is the one which we assigned to that Transfer Account. SECURITY PROCEDURES FOR FUNDS TRANSFERS INITIATED THROUGH ' OUR InfoTouch EXPRESS' SERVICE You are required to use (a) your identification code (which we will assign) for the Transfer Account or the family of accounts containing the Transfer Account from which or into which the transfer will be made, (b) the identification number of the Operator requesting the transfer (which you will assign for each of your Operators), (c) the password of the Operator requesting the transfer (which we will initially assign and which must be changed by each Operator the first time it is used and thereafter at least once every 90 days), and (d), for Repetitive Funds Transfers, the repetitive request number for the RepetRive Funds Transfer (which we will assign for each Repetitive Funds Transfer series you request be established). You must also set the following transfer and operators limits (which you will determine and communicate to us): (i) a daily transfer limit for each of your Transfer Accounts, and (ii) for Repetitive. Funds Transfers, (A) a limit for each Repetitive Funds Transfer, (B) an Operator limit for each Repetitive Funds Transfer, and (C) a daily Repetitive Funds Transfer limit for each Operator, and each Funds Transfer must be within each such limit. In addition, we recommend that you use a supplemental security procedure called Second Operator Release"which allows you to separate between two Operators the ability to create and to release transfer requests. IF YOU DISREGARD THIS RECOMMENDATION, YOU INCREASE THE RISK THAT. THERE WILL BE A LOSS, FOR WHICH YOU WILL BE RESPONSIBLE, RESULTING FROM AN'UNAUTHORIZED OR FRAUDULENT FUNDS TRANSFER. M nWee.doc 6 017 Feb 25 99 1736 From-W IMPLSF T-014 P.16/18 F-523 d SECURIPROCEDURES FOR FUNDS TRANSFERS INITIATED BY INCOMING DRAWDOWN REQUESTS (flRAWDOWN TRANSFERS Any financial institution, acting as your agent (Drawdown Agent[, in requesting a funds transfer out of your WDDA, must transmit its request to us (Drawdown Request) through a Federal Reserve Bank by means of a dedicated communications line using the encryption standards of, and access controls established by, that Federal Reserve Bank. The $et -Up Forms for Funds Transfer Services require that you provide us with a list (Drawdown List] containing (a) the name and ABA routing number of each Drawdown Agent which you have authorized to request and receive Drawdown Transfers out of each. Transfer Account, and (b) the titles and account numbers of your accounts with each Drawdown Agent which are to be credited for Drawdown Transfers out of each Transfer, Account. Before making a Drawdown Transfer out of a Transfer Account, we will verify that (i) the account to receive the transfer is listed as an account to receive transfers from that Transfer Account, and (H) the financial institution requesting the Drawdown Transfer is listed as a Drawdown Agent for that Transfer Account. if the above information cannot be verified, we will not be obligated to honor the Drawdown Request nor make the Drawdown Transfer. Excluded Services: [Name] By: Title: acne By: Tile: [name and signature for each subsidiary/affiliate on whose Date: behalf customer is acting] agrw.doc 7 Me 018 Feb-25-99 17:38 Fran-W IMPLSF T-014 P.17/18 F-523 i ACH SERVICE/ACH EXPRESSOFOR IWNDOWS SERVICE DESCRIPTION Each Service] Is subject to, and provided upon the condition that you comply with, the 'provisions of the Application and Agreement for Cash Management Services, the Cash Management Services Disclosure Statement, the User Documentatio6 for the Service, the WDDA Disclosure Statement, and the Security Procedures for ACH Transfers, as each Is currently In effect. Our ACH Service and ACH Express for Windows Service allow you to request funds transfers ("ACH Transfers") from your designated WDDA to a third party account (10redit Entriesl or from the account of a third party to your designated WDDA (T)ebit Entriesl by requesting Wells Fargo to transmit such transfers through the automated clearing house (ACHI network. For purposes of this Service Description and related User Documentation, the third party is referred to as a "Receiver" and the term "ACH Entries" can mean eilher Credit or Debit Entries or both. Initiation and transmission of ACH Entries under either Service are subject to, and must be in accordance with, the National ACH Association ( "NACHA") Rules, consisting of the NACHA Operating Rules (and Appendices thereto) and the NACHA Operating Guidelines. Unless otherwise defined, capitalized terms used In this Service Description and in the other User Documentation; for these Services have the meanings provided in the NACHA Rules. With our ACH Service, you create and transmit ACH Files to us using your computer terminal while with the ACH Express for Windows Service you create and transmit ACH Files to us using your PC and the ACH Express for Windows software ("ACH Software"). With respect to each ACH Entry contained in a File, you represent and warrant that on its Effective Entry Date, on the date it is transmitted and on the date we credit or debit your WDDA for the ACH Entry (a) each Receiver has authorized the crediting or debiting of its account, (b) each Debit Entry is for an amount agreed to by the Receiver or a. correction of a previously transmitted Credit Entry, and (c) each ACH Entry is in all other respects properly authorized. You agree to indemnify us for any losses, liabilities,' costs (including attorneys' fees) or expenses we suffer or incur resulting from or arising out of any breach of these representations and warranties. Wells Fargo may process your ACH Entries either directly or through any mechanism we select! 1f an ACH File contains errors that cause it to be rejected, we will make reasonable efforts to contact you promptly so that you may repair and retransmit the ACH File. if you request that we repair the ACH File and we endeavor to do, we shall in no case be liable for our failure to make the requested repair. You shall pay all charges and expenses we incur in connection with ACH File repairs. If we reject an ACH Entry you request, we will endeavor to notify you promptly on or before its scheduled Settlement Date, but we shall have no liability to you for any such rejection or for any loss resulting from our failure to provide any such notice. Windows is the registered trademark of the Microsoft Corporation. s�.doc 2W Feb-25-99 1T:41 From-M III i SF T-014 P.18/18 F-523 If we receive an ACH File after our processing deadline, we will not be responsible for our failure to meet the deadlines of the ACH Operator for processing and transmitting ACH Entries. At your request, we will make reasonable efforts to reverse or delete an ACH Entry, but we will have no responsibility for the failure of any other person or entity, to honor your request. You will, at yol ur own cost and expense, obtain, install and, at all times during your utilization of either Service, maintain in good working order all necessary hardware and equipment. You agree to implement, on a regular basis and not less than weekly, back-up measures, including, among other things, copying onto diskette each week's current data blase files. In the event of any failure of hardware or software, you will deliver to us all data necessary to perform our obligations in connection with the Service. All ACH Files transmitted through the ACH Express for Windows Service must be created using the ACH Software. If you are an ACH Express for Windows customer, we hereby grant you a non-exclusive and non -assignable sublicense to use the ACH Software for the purpose of initiating ACH Entries. The ACH Software is the original, confidential, valuable+and proprietary product of Politzer & Haney, which has licensed the program to Wells Fargo with the right to sublicense to you. You have only the right to use the ACH Software consistent herewith and with the other ACH Service/ACH Express for Windows User Documentation. sftadoc "s CASH MANAnFMFNT ATTACHMENT NO. 2 PC Manager' 3.0 Simplify your Treasury functions with PC Manager for Windows. With a click of the mouse you can now access all of your Wells Fargo Bank Cash Management services. How You Benefit > Manage all of your banking needs through the convenience of Windows. On one inte- grated platform you can: • Reconcile your bank account either directly on your PC or by sending electronic files to WFB. • Review and analyze account activity. • Centralize your disbursement activity. • Reduce the chance of fraud. Item Inquiry Information Express• Reports Positive Pay .1W. (:: Stops t.... > Windows is easy to use and convenient. • Templates created today can be used in the future. You save time, because you no longer need to re -key information. • Easier Access to your bank information. Set up autodial sessions, download reports into spreadsheets and obtain banking information faster than you can make a phone call. • Improve the security of your system. PC Manager has the most sophisticated security features available anywhere in the market today. Account Reconcilement on your PC or mainframe Funds Disbursement A, Photocopy Requests continued on reverse side M Wells Fargo Fast Then. Fast Now. 021 a ^ www.wellsfargo.com PC Manager® 3.0continued Account Reconcilement > PC -Reconcilement 0 Automatically reconcile your account daily directly on your PC. Speed up your reconcilement with a daily download of your electronic bank statement. > Register Maintenance Update your Account Reconcilement register at Wells Fargo online using your PC. > Wires PC Manager 2.0 Demo IN Die Iransactions Risk.Control Beporting 8dmin Window Belp PC Manager gives you the ability to initiate and send worldwide funds transfers. PC Manager is designed to improve the speed and accuracy of your global fund transfers. > Stops Quickly place stops on checks and receive immediate confirmation using PC Manager's stop payment icon. > Positive Pay LMFight fraud with increased control over your check disbursement activity and immediately be alerted of any exception items with Positive Pay. "Exception Alert" will notify you of any mismatched items appear- ing in your account, providing you with descriptions of the items. You examine the items and "click" on the checks you want Wells Fargo Bank to return unpaid. > Information Express® Reports MBy clicking the reporting icon you have immedi- ate access to your Information Express reports. IMDownload Information Express reports into your spreadsheet for additional analysis, by clicking the spreadsheet download icon. Windows is a registered trademark of Microsoft Corporation. 09f) CASH MANAGEMENT PC MANAGER® 3.0 Price Schedule Effective March 1,1998 PC Manager Initiation Services Charge Basis Price Transaction Initiation and Software (Wires, Stops, Positive Pay, Register Maintenance, ReportManager, PayTax,Account Inquiry) Initial situp w h: Service Fey per PC LU. $25.44 Technic l Supportl 7rainir�g per hour: $14�4: PC Initiated Transfers Charge Basis Price Outgoing Wire & Drawdown Requests e'er moire 1 24 $9.Ofl 25--49 $S.a� 50"149 Intraday Book Transfers Per Transfer $5.0 ! Other PC Manager Transactions Charge Basis Price 3—l�rtc nth per s �zg S.A0 leer Photoc py (US Mail) 5- Q. S Fhc�tocapy eqa st,: Chest©r Per item $fi.5 Also see Account Reconcilement and Controlled Disbursement prices. 2 Each request also requires an inquiry. Ln Wells Fargo Fast Then. Fast Now. 093 00, www.wellsfargo.com r PC MANAGER® SERVICE DESCRIPTION This Service is subject to, and provided upon the condition that you comply with, the provisions of the Application and Agreement for Cash Management Services, the Cash Management Services Disclosure Statement, the User Documentation for this Service, our Funds Transfer Service and Positive Pay Service, the WDDA Disclosure Statement, and the Security Procedures for Funds Transfers initiated through this Service, as each is currently in effect. You may use our PC Manager software ("PC Software") to initiate, request or receive many of the services and features available with your WDDA, including, (a) initiate Funds Transfers including Repetitive Funds Transfers, through our Funds Transfer Service, (b) receive account balance and certain other types of account information with respect to your WDDA or your accounts with other financial institutions, (c) request stop payment orders on checks drawn on your WDDA or Controlled Disbursement Account, (d) print checks to be drawn on a designated WDDA, including any Controlled Funding Account (collectively, the "Designated Accounts"), (e) maintain on your PC a register ("Register") of checks written and other items originated with respect to the Designated Accounts, (f) transmit the check issue data to us electronically from the Register and through such transmission to receive our Positive Pay Service, (g) retrieve electronically on each Business Day a statement of checks and other items posted against the Designated Accounts on the immediately preceding Business Day ("Daily Statement"), (h) reconcile items on the Daily Statement against the items on the Register (which reconciliation will occur automatically when you retrieve your Daily Statements), and (i) instruct us electronically not to pay, or to correct or repair and pay, any check posted against a Designated Account (items (d) through (i) constituting the "PC Reconcilement Service") , and 0) obtain investment rates for, and your position in, investments made through our Investment Service. The PC Software was designed to operate on a PC using a Windows® compatible operating system. We hereby grant you a non-exclusive, non -assignable license for your use of each copy of the PC Software only on the PC on which each such copy is initially installed and only for the purposes set forth in the preceding paragraph. The PC Software is the original, confidential, valuable and proprietary product of Wells Fargo. You have the right to use the PC Software consistent herewith and with the other PC Manager User Documentation. If you use our PC Reconcilement Service, it is essential that you promptly and accurately enter your check issue information on your PC and then promptly transmit this check issue information electronically to us. If a check drawn on a Designated Account is presented to us for cashing and the check does not match by serial number and amount the check issue data previously transmitted to us or if no issue information sdpcmgr.doc 9/25/97 0124 has been transmitted to us for that Authorized Account, we will not cash the check. By transmitting your check issue information for a Designated Account to us, you authorize us to pay a check drawn on that Account presented for cashing if the serial number and amount of the check matches the check issue information transmitted to us. You understand and agree that in cashing a check in accordance with the above arrangement, we will not use our usual (or any other) check verification procedures, and that we will have no responsibility for any forgery, missing signature or other deficiency in such check. You understand that you must deliver to us any instruction to return unpaid, or to correct or repair and pay, a check posted against an Authorized Account before 10:00 A.M. Pacific time (8:00 A.M. Pacific time in the case of a check posting against a Controlled Disbursement Account at PNC Bank) on the day we notify you of the discrepancy. FUNDS TRANSFER SERVICE You may initiate most Funds Transfers, including Repetitive Funds Transfers, electronically through our PC Manager Service. Each time you request a non -repetitive Funds Transfer, you must provide the amount of the requested transfer, the number of your Transfer Account to be debited or credited, and the number of the account and the identifying number of any bank out of or into which the transfer is to be made. We will assign a repetitive request number to each series of Repetitive Funds Transfers which you request be established. Each time you request a Repetitive Funds Transfer, you must provide the repetitive request number assigned to the related Repetitive Funds Transfer series and the amount of the requested transfer. POSITIVE PAY SERVICE On or before the Business Day that you issue checks on your WDDA, you provide Wells Fargo with the number and amount of each such check. This information is electronically matched to checks presented against your WDDA and is provided to our branches to help make decisions on cashing checks presented to tellers. You may instruct us through Information Express® or PC Manager to return any checks which do not match this information so long as we receive such instruction before 12 noon Pacific time on the Business Day that we inform you of the mismatch. You will be deemed to have authorized payment of all other mismatched checks and all checks which are not mismatched. Each check you have authorized us to pay in accordance with this Service will be paid without performing our customary (or any other) check verification procedures. Accordingly, we will have no responsibility whatsoever for any such check without regard to any forgery, alteration or other deficiency. sdpcmgr.doc 2 9/25/97 �� rµ INFORMATION EXPRESS® SERVICE DESCRIPTION s �yt This Service is subject to, and provided upon the condition that you comply with, the provisions of the Application and Agreement for Cash Management Services, the Cash Management Services Disclosure Statement, the User Documentation for this Service and our Positive Pay Service, and the WDDA Disclosure Statement, as each is currently in effect. You may, using your computer or terminal acceptable to us, (a) receive account balance and certain other types of account information related to your WDDA or your accounts with other financial institutions, (b) access our Positive Pay Service, and (c) obtain investment rates for, and information concerning your position in, investments made through our Investment Service. POSITIVE PAY SERVICE You provide Wells Fargo on or before the Business Day that you issue checks on your WDDA with the number and amount of each such check. This information is electronically matched to checks presented against your WDDA and is provided to our branches to help make decisions on cashing checks presented to tellers. You may instruct us through Information Express or PC Manager® to return any checks that do not match this information so long as we receive such instruction before 12 noon Pacific time on the Business Day that we inform you of the mismatch. You will be deemed to have authorized payment of all other mismatched checks and all checks which are not mismatched. Each check you have authorized us to pay in accordance with this Service will be paid without performing our customary (or any other) check verification procedures. Accordingly, we will have no responsibility whatsoever for any such check without regard to any forgery, alteration or other deficiency. 09C, sdinfoex.doc 9/25/97 C'+ y u FUNDS TRANSFER SERVICE DESCRIPTION This Service is subject to, and provided upon the condition that you comply with, the provisions of the Application and Agreement for Cash Management Services, the Cash Management Services Disclosure Statement, the User Documentation for this Service, the WDDA Disclosure Statement, and the Security Procedures for Funds Transfers, as each is currently in effect. You may initiate most Funds Transfers, including Repetitive Funds Transfers, electronically through our PC Manager Service® or via telephone by voice initiation. You may also initiate Repetitive Funds Transfers and transfers of funds between your WDDA's through our InfoTouch Express® Service. Each time you request a non - repetitive Funds Transfer electronically, via telephone by voice initiation, or through InfoTouch Express, you must provide the number of your WDDA (a "Transfer Account") to be debited or credited, the amount of the requested transfer, and the number of the account and the identifying number of any bank out of or into which the transfer is to be made. We will assign a repetitive request number to each series of Repetitive Funds Transfers which you request be established. Each time you request a Repetitive Funds Transfer, you must also provide the repetitive request number assigned to the related Repetitive Funds Transfer series and the amount of the requested transfer. You may also have another financial institution, acting as your agent ("Drawdown Agent"), contact us directly to request ("Drawdown Request") transfers of funds from your WDDA to your account at that other financial institution ("Drawdown Transfer"). Each Drawdown Request made by your Drawdown Agent must include the amount of the Funds Transfer, the number of your Transfer Account out of which the transfer is to be made, the number of your account at the Drawdown Agent to be credited, and the Drawdown Agent's name and ABA number. You may also arrange for a series of Funds Transfers ("Standing Funds Transfers") to be made at regular intervals between a Transfer Account and another account by providing us with a signed written request ("Standing Funds Transfer Request") including the amount of each of the transfers (which may be a fluctuating amount to be determined by Wells Fargo based upon criteria or a formula you provide), the number of your Transfer Account to be debited or credited, the number of the account and the identifying number of the bank out of or into which the transfers are to be made, the date of the initial transfer, and the frequency of the transfers. 09*t sdfta.doc 9/25/97 k4�5 Y. uJJV vi Yi„rPA VIAN Ozlclk" j .. PC MANAGER 3 TM PRE -SALE QUESTIONNAIRE CUSTOMER SHOULD COMPLETE A SEPARATE FORM FOR EACH PC ID OR WORKSTATION REQUESTED. IN ORDER TO BEGIN IMPLEMENTATION OF PC MANAGER, IT IS RECOMMENDED TO RUN THE CHECKOUT DISKETTE ON THE SYSTEM(S) WHICH WILL HOUSE PC MANAGER. PLEASE ATTACH A COPY OF THE CHECKOUT RESULTS TO THIS QUESTIONNAIRE. SEE PC MANAGER REFERENCE GUIDE FOR REQUIRED DOCUMENTATION AND MINIMUM PC REQUIREMENTS. 1. TYPE OF REQUEST: ❑ Standalone PC ❑ LAN/WAN Workstation 2. COMPANY: Customer #: Company Name: 3. Is the PC/Workstation 100% IBM compatible? (Required) ❑ Yes ❑ No Brand Name: Model and/or other characteristics: 4. Does the PC/Workstation have a 486 processor or higher? (Required) ❑ Yes ❑ No 5. Does the PC/Workstation have Microsoft Windows version 3.1? (Minimum) ❑ Yes ❑ No Please specify Windows version: ❑ 3.1 ❑ 3.11 ❑ Windows for WorkGroups ❑ Windows 95 ❑ Windows NT Note: Windows NT 4.0 may experience performance issues with PC Manager Please specify DOS version (minimum is DOS 5.0): 6. Does the PC/Workstation have a hard disk? (Required) ❑ Yes ❑ No 7. Is the PC/Workstation part 2 of a network environment? ❑ Yes ❑ No If YES: Location where PC Manager will be installed: ❑ Local hard drive ❑ Network server Location where Windows is installed: ❑ Local hard drive ❑ Network server Note: Each workstation must have a local hard disk. Sixteen MB of RAM is required on each LAN workstation. 8. Does the PC/workstation have a 14,400 BPS (or higher) modem? ❑ Yes ❑ No Brand name of modem: Modem model and speed: Communication port connected to the modem: ❑ COM1 Modem Type: ❑ Internal ❑ External modem ❑ COM2 ❑ COM3 ❑ COM4 Note: Minimum is 14,400 BPS 100% Hayes -compatible modem supporting error correction for each PC/workstation used to send/receive data. The list below shows some of the modems successfully tested with PC Manager. Modem pools or network modems are not supported by PC Manager. 9. How much space is available on the drive on which the software will be installed? Megabytes Note: Minimum required is 30 MB available space for new installations on standalone PCs. 1198 PC Manager 3 Pre -Sale Questionnaire Page 1 of 2 pcm3pre.doc 09 6 PC MANAGER 3 TM PRE -SALE QUESTIONNAIRE 10. How much RAM (Random Access Memory) is installed? Megabytes Note: Minimum required for standalone installation is 8 MB total system RAM (16 MB strongly recommended), for each workstation on a LAN 16 MB total system RAM is REQUIRED. 11. Please confirm the PC/workstation has a 3 1/2" disk drive: ❑ Yes ❑ No 12. PHONE LINE: Is the modem's phone line dedicated to that modem's use (strongly recommended)?: ❑ Yes ❑ No 13. Does the PC have a printer attached? ❑ Yes ❑ No If YES, please indicate brand name and model of printer: The following modems are among the more popular modems capable of communicating at 14,400 BPS or higher which have been successfully tested with PC Manager. All the modems are external and support MNP Level 4 error correction. If in doubt regarding the compatibility of your customer's modem, please contact CMCS for further information. Manufacturer Model Motorola Online SURFR Series Practical Peripherals PM 1440FXMT, PM 144MT II, PM 288MT II US Robotics Sportster and Courier Series (except WinModem) Hayes V-Series Smartmodem, Accura, Optima and Ultra Series Supra SupraFAXmodem 14.4 and 28.8 Zoom VFX Series 1/98 PC Manager 3 Pre -Sale Questionnaire Page 2 of 2 pcm3pre.doc PC MANAGER 3 TM PC SETUP FORM CUSTOMER TO COMPLETE ONE FORM PER PC ID/COPY OF SOFTWARE. IF MULTIPLE PC IDS ARE IDENTICAL, THEN ONLY ONE FORM IS NECESSARY. SEE PC MANAGER REFERENCE GUIDE FOR REQUIRED DOCUMENTATION AND MINIMUM PC REQUIREMENTS. 1. TYPE OF REQUEST: ❑ New PC ID(s) ID(s) Customer #/AC ID: ❑ Change Existing PC ID(s) ID(s) ❑ Delete PC ID(s) ID(s) PC ID: _ _ (01 - 99) 2. ACCESS: DAYS (Circle): SUN MON TUE WED T1 U FRI SAT ALL HOURS: EARLIEST LOGON (PT) (AM/PM) (HH:MM) LATEST LOGON (PT) (AM/PM) (HH:MM) 3. PC ADMINISTRATIVE CUSTODY: To Setup/Update Users & Privileges: ❑ Single ❑ Dual To Reset User Passwords: ❑ Single ❑ Dual Note: A minimum of three Administrators should be created in Dual Custody setups 4. REMOTE VERIFICATION: Remote Wire Verification: Remote Wire Verification requires wires that have been created at one PC to be verified at another, "remote" PC. Remote Verification requires at least two separate PC IDs. A given PC ID can be the creator or the remote verifier of wires, or both. Remote Verification of Wire User Privileges: Remote Verification of Wire Users requires that wire privileges assigned to a User at one PC are verified at another, " remote" PC (all other user privileges are maintained locally). Remote Verification requires at least two separate PC IDs. A given PC ID can EITHER be the creator OR the remote verifier of wire operator privileges, but not both. A. Will this PC ID be part of a remote verification process? LJ Yes U No B. If YES, other PC IDs must beset up to establish the process. TOTAL NUMBER of PC IDs needed: C. Role the CURRENT PC ID will play in the remote verification process: CREATE Wires: ❑ Yes ❑ No CREATE Users: ❑ Yes ❑ No VERIFY Wires: ❑ Yes ❑ No VERIFY Users: ❑ Yes ❑ No D. If the current PC ID will create wires and/or wire operators for remote verification, please specify the location or PC ID of the Remote Verifier copy of PC Manager: 5. PC SERVICES: (Enter Y or N) REPT MGR: ® FULL ARP REG: ❑ POSITIVE PAY: ❑ INTRADAY POSITIVE PAY: ❑ PC-RECON: ❑ CHECK PRINTING: ❑ (Check Printing is only available on accounts with PC Reconcilement) IE REPORTS: ❑ ITEM INQUIRY: ® PHOTOCOPY: ® DRAWDOWN: ❑ WIRES: ❑ STOP/RELEASE: ❑ UPLOAD TEMPLATES: ❑ TEMPLATED WIRES ONLY: ❑ 7/97 PC Manager 3 PC Setup Form Page 1 of 3 pcm3pc.doc PC MANAGER 3''M PC SETUP FORM 6. OPERATOR SECURITY: Wire Custody: 0 ❑ Create, verify, and send operators must be DIFFERENT (CHOOSE ONE ONLY) 1 ❑ Create and verify operators can be the SAME 2 ❑ Create and send operators can be the SAME 3 ❑ Verify and send operators can be the SAME 4 ❑ Create, verify and send operators can be the SAME 9 ❑ No wire services on this PC ID Template Custody: 0 ❑ Create, verify, and send operators must be DIFFERENT (CHOOSE ONE ONLY) 1 ❑ Create and verify operators can be the SAME 2 ❑ Create and send operators can be the SAME 3 ❑ Verify and send operators can be the SAME 4 ❑ Create, verify and send operators can be the SAME 9 ❑ No wire services on this PC ID Templates must be verified: ❑ Yes ❑ No Upload templates to WFB: ❑ Yes ❑ No Wire Verification: 0 ❑ None (CHOOSE ONE ONLY) 2 ❑ Verify only non-templated wires 3 ❑ Verify all wires Stop Releases Custody: 0 ❑ Create, verify, and send operators must be DIFFERENT (CHOOSE ONE ONLY) 1 ❑ Create and verify operators can be the SAME 2 ❑ Create and send operators can be the SAME 3 ❑ Verify and send operators can be the SAME 4 ❑ Create, verify and send operators can be the SAME 9 ❑ No stop services on this PC ID Full ARP Register Custody: 0 ❑ Create, verify, and send operators must be DIFFERENT (CHOOSE ONE ONLY) 1 ❑ Create and verify operators can be the SAME 2 ❑ Create and send operators can be the SAME 3 ❑ Verify and send operators can be the SAME 4 ❑ Create, verify and send operators can be the SAME 9 ❑ No Full ARP Register services on this PC ID Full ARP Register Verification: 0 ❑ No verification required (CHOOSE ONE ONLY) 1 ❑ Verification required 9 ❑ No Full ARP Register services on this PC ID 7/97 PC Manager 3 PC Setup Form Page 2 of 3 pcm3pc.doc 031 PC MANAGER 3''M PC SETUP FORM 6. OPERATOR SECURITY (Continued): PC -Reconcilement Custody: 0 ❑ Create, verify, and send operators must be DIFFERENT (CHOOSE ONE ONLY) 1 ❑ Create and verify operators can be the SAME 2 ❑ Create and send operators can be the SAME 3 ❑ Verify and send operators can be the SAME 4 ❑ Create, verify and send operators can be the SAME 9 ❑ No PC Reconcilement services on this PC ID PC -Reconcilement Verification: 0 ❑ No verification required (CHOOSE ONE ONLY) 1 ❑ Verification required 9 ❑ No PC Reconcilement services on this PC ID PC -Reconcilement Check Printing: 0 ❑ Create, verify, and print operators must be DIFFERENT (CHOOSE ONE ONLY) 1 ❑ Create and verify operators can be the SAME 2 ❑ Create and print operators can be the SAME 3 ❑ Verify and print operators can be the SAME 4 ❑ Create, verify and print operators can be the SAME 9 ❑ No PC Reconcilement Check Printing services on this PC ID PC -Reconcilement Check Printing Verification: (CHOOSE ONE ONLY) 0 ❑ No verification required I ❑ Verification required 9 ❑ No PC Reconcilement Check Printing services on this PC ID 7. COMPANY AUTHORIZATION: Print Name: Print Title: Signature: Date: IMPLEMENTATION USE ONLY: Implementor: Case #: Package ID: Received: Date Completed: 7/97 PC Manager 3 PC Setup Form Page 3 of 3 pcm3pc.doc 0 H V�j w zi NIN 8 � w h w � F+ w w �b w a� .� et A �w � — A 0.)3 Understanding PC Manager Security and Custody Cash Management Product Implementation, November 1996 0 ,9 4 Wells Fargo Bank Understanding Custody and Security in PC Manager PC Manager Security PC Manager security is established jointly by the customer and Wells Fargo Bank. Generally speaking, a feature of PC Manager which the customer wishes to access must be authorized on the Wells Fargo Host computer before it can be activated by the Administrator on their local registered copy of PC Manager Security is applied in PC Manager at three levels: • the PC Services Level • the Account Level • the User Level Applying the security in this way allows PC Manager to be tailored extensively to suit the requirements of our customers. Note: PC Manager becomes "Copy Protected" once it's installed and registered. An attempt to move PC Manager to another PC, or otherwise change the operating environment will result in a security error. If this occurs, the customer must contact Cash Management Client Services and Re -Register their PC Manager installation. PC Services Level Security PC Services Level security is set up when the customer's company originally registers their copy of PC Manager. The parameters for PC Services security are maintained and stored securely on Wells Fargo Bank's Host computer, and a copy of these parameters is downloaded by the customer during registration of PC Manager with the Bank. Typical PC Services parameters include: the list of the accounts that can be accessed by PC Manager; the number of Administrators required to create an Operator, the number of Operators required to send a Wire or Drawdown to the Bank, and whether Remote Verification of Wires is in effect. If a customer wants to change any PC Services parameters, it is necessary to send a written instruction to Wells Fargo Bank to do so. The Administrator must then download the new PC Services parameters list into PC Manager and update the users for the changes to take effect. Account Level Security At the Account Level, accounts and the services attached to them are authorized by Wells Fargo Bank on the Host computer and must be downloaded into PC Manager during registration or after being updated. Within the parameters of the account profile established on Wells Fargo Bank's Host computer, the features to be accessed on each account can be assigned by the Administrator. For example, it is possible for one account to be set up to be used exclusively for sending outgoing wires, and another account set up to allow incoming drawdown wires only to be initiated from the copy of PC Manager. CM Product Implementation, 11/1996 1 025 Wells Fargo Bank Understanding Custody and Security in PC Manager User Level Security The PC Manager Administrator creates and maintains all user privileges locally within PC Manager. If dual administrative custody is in effect, the privileges granted to a user and all change to these privileges must be verified by a second Administrator before the user can log on. This means that the customer, through the PC Manager Administrator, is in complete control of access to their copy of PC Manager and to the roles each user may perform. User privileges maintained locally by the Administrator include access to accounts, access to transactions, ability to download reports, ability to view reports, and user dollar limits. At the User Level, security may be established in many ways: for example, an operator may be able to access certain accounts but not others. An operator may be able to create and send Wires, but not be able to verify them. As another example, an operator may be at a remote verification site, where he or she can verify the wires that have been created by someone else on another, remote copy of PC Manager. Note: Access to the Information Express Online module, in which a PC Manager user establishes an Interactive session on the Wells Fargo Bank Host computer for the purpose of customizing reports, requires that the user's Operator ID (created locally by the PC Manager Administrator) must also be established by Cash Management Client Services on the Host computer, and the accounts and reports this user may access online must be granted to the operator by Cash Management Client Services. Database Security The PC Manager database is fully encrypted, and can only be accessed by supplying a valid logon ID and password. All passwords have default expiry dates to ensure that they are used correctly. An audit trail report may be produced by the Administrator of the program to examine the access behavior of any user of the program. Each copy of PC Manager contains a unique "signature" (hidden from access) which is unique to that copy of PC Manager and the PC it was originally registered on. This ensures that any attempts to copy PC Manager and then run it on another PC will require that the program be re- registered with Wells Fargo Bank. All Funds Transfer transmissions (i.e. domestic outgoing and incoming Wires, international Wires, and Federal Tax Payments) between PC Manager and Wells Fargo Bank are fully encrypted to prevent unauthorized access to the data. CM Product Implementation, 11/1996 2 Q3� Wells Fargo Bank Understanding Custody and Security in PC Manager PC Manager Administrative Custody The PC Manager Administrator, created during initial registration of PC Manager, controls all local access to PC Manager within the parameters of the PC Services and Account Services authorized by Wells Fargo Bank. Administrative tasks include the following: • PC Services Maintenance • Account Maintenance • User Maintenance • Dual Custody Administration Additionally, the Administrator maintains the communication settings controlling PC Manager's access to the PC's modem, downloads updated PC Services, Accounts, Business Days and other tables maintained on the Wells Fargo Bank Host computer, resets User Passwords, maintains the PC Manager Audit Trail log files, and reactivates PC Manager's access to the Wells Fargo Host computer should this access at any time be deactivated. PC Services Maintenance The PC Manager Administrator is responsible to set default password expiry dates, define the auto logout time, and establish local funds transfer dollar limit defaults. Changes to PC Services and transaction custody parameters, features maintained in the Wells Fargo Bank Host computer, must be made by Cash Management Client Services, then downloaded by the Administrator before taking effect. Account Maintenance The Administrator downloads updated Account Services (maintained on the Wells Fargo Bank Host computer), controls access to Account Services, sets up Account Short Names and transaction dollar limits, and may also add non -Wells Fargo accounts to be used for Drawdown Wires. User Maintenance All users accessing the copy of PC Manager are created and their privileges maintained by the PC Manager Administrator. The privileges maintained include: access to accounts, permissible transaction services on each account, the ability to download reports, access to view reports, and user dollar limits for funds transfer transactions. Should a user ID be suspended after three consecutive logon attempts with an invalid password, the Administrator must reset their password before their access can be restored. CM Product Implementation, 11/1996 3 0317 Wells Fargo Bank Understanding Custody and Security in PC Manager Dual Custody If the PC Manager Profile on the Wells Fargo Host computer is set up for Dual Administrative Custody, a second Administrator must log on and verify the user IDs and privileges created or changed by the first Administrator before the user can access PC Manager. Tip: It is recommended that, if PC Manager is set up for dual administrative custody, the Administrators should create and verify at least one backup Administrator to ensure there is always at least one active Administrator available to verify user IDs and privileges. If the PC Manager Profile is set up Dual Password Reset Custody, a second Administrator must log on and verify a reset password in the event a user ID is suspended due to invalid passwords at logon. A suspended user ID will not be able to log on before the reset password has been both reset and verified if the PC Manager has Dual Password Reset Custody. (Note: A user can always reset their own password in single custody if already logged in PC Manager.) CM Product Implementation, 1111996 4 Wells Fargo Bank Understanding Custody and Security in PC Manager Transaction Custody and Verification in PC Manager PC Manager offers the customer a very powerful means of controlling the security of their PC Manager - initiated transactions. Transaction custody and verification is maintained on the Wells Fargo Host computer and is downloaded into PC Manager during registration. Custody and Verification options are selected by the customer at the time they request PC Manager. Changes to custody and verification options require submission of a signed request to Cash Management Client Services and only go into effect once the Administrator downloads the updated PC Profile from the Wells Fargo Host computer, ensuring the customer's control over their own security requirements. Once PC Manager is registered, the PC Manager Administrator controls user access to transaction privileges and may grant or restrict transaction privileges to the users authorized to logon to the program. Custody and Verification options apply to the following transactions: • Wires • Wire Template Maintenance • Stop Releases • Full ARP Register Maintenance • PC Reconcilement Register Maintenance and Check Printing These options can be set up in a wide variety of ways, allowing the customer great flexibility in controlling and maintaining the security of their PC Manager transactions. Although transaction custody and verification applies in much the same way throughout all the functions of PC Manager, since PC Manager's Wire functionality is among the most popular features of the program, and is more complex than other PC Manager custody and verification parameters, the examples below refer to Wires. Each Wire or Drawdown initiated by PC Manager goes through the following steps: 1. Creation of the wire transaction, either using a Wire Template or as a "free -form" Wire. 2. Verification of the accuracy of the Wire transaction as created. If rejected, the Wire must then be Modified and Re -Verified. 3. Sending the transaction to Wells Fargo Bank's Host computer, which then processes the Wire through the Bank's Global Funds Transfer System. 4. Downloading the Confirmation Status of the Wire transaction(s) sent from this copy of PC Manager with the current business day's Value Date, including the Fed Reference number. (No Fed Reference number will be given a Wire in which both the sending and receiving accounts are Wells Fargo accounts, but the status of such Wires will be confirmed.) Custody options selected by the customer are established on the Wells Fargo Host computer and downloaded into PC Manager by the Administrator to control which functions may be performed by the CM Product Implementation, 11/1996 5 Wells Fargo Bank Understanding Custody and Security in PC Manager same user for a given Wire or Drawdown. These options apply to all accounts given Wire or and/or Drawdown initiation functions on a given copy of PC Manager. Note: Any PC Manager user with Wire privileges may download the confirmation status of any non - confirmed Wires initiated at their copy of PC Manager on a given business day. Wire Confirmation Downloads only confirm the status of Wires initiated by the same copy of PC Manager which initiated the transaction. The customer may decide whether or not Wires will be initiated by their copy of PC Manager, and may also decide whether or not to allow "free -form" (non-Templated) Wires. Additionally, the customer may decide whether they wish to allow Wire Templates created and maintained in their copy of PC Manager to be uploaded to Wells Fargo Bank to become Repetitive Wires in Wells Fargo's Global Funds Transfer System database. PC Manager Wires can be in Single, Dual or Triple custody: 0 In Triple custody (option 0 in the PC Manager PC Setup Form), a given user may only perform either the Create, Verify, or Send function on any given Wire. Two other users must separately log on PC Manager to perform the other functions. 0 In Dual custody, the customer decides which two of the three Wire functions a single user may perform on any given Wire. Another user must separately log on PC Manager and perform the third function. There are three varieties of dual custody: • Create and Verify the same (option 1). The user who Creates a Wire may Verify it, but a different user must log on to Send the Wire. • Create and Send the same (option 2). One user Creates a Wire, but a different user must log on to Verify the Wire. Once it has been verified, the first user may log on to Send it. ° Verify and Send the same (option 3). The user who creates a Wire may not perform any additional functions on that Wire. A second user must log on to Verify and Send the Wire. 0 In Single custody (option 4), the same user may Create, Verify and Send any given Wire transaction. The Wire Custody option established on the Wells Fargo Host computer (and downloaded by the Administrator) take precedence over the functions authorized for each user. In other words, while a user may have Create, Verify and Send privileges established by the PC Administrator on a given account, each Wire transaction they perform must conform to the Wire Custody option resident in the PC Manager database. Wire Verification options indicate whether, and under which circumstances, Verification must be a separate step in the Wire transfer initiation process. There are three varieties of Wire Verification options in PC Manager: 0 None (option 0 in the PC Manager PC Setup Form). Once a Wire has been Created, it is never necessary to perform a separate verification before sending the Wire. 0 Verify Non-Templated Wires only (option 2). The verification step is only necessary if the Wire was NOT created using a Wire Template resident in the PC Manager database. CM Product Implementation, 11/1996 0 4 ;1 Wells Fargo Bank Understanding Custody and Security in PC Manager 0 Verify All Wires (option 3). A separate verification must be performed before sending any Wire, whether it was created using a Wire Template or is a "free -form" Wire. PC Manager's Wire functionality includes the ability to set up and maintain local Wire Templates which are used for cases where Wires may be sent on a regular basis to the same destination or beneficiary. Template Custody and Verification operates in much the same way as Wire Custody and Verification. Once a Template has been Created and Verified, it can be used to create actual funds transfer Wires. The customer may also choose to allow locally established Wire Templates to be uploaded into Wells Fargo Bank's Global Funds Transfer System to become Repetitive Wire Templates. If this option is chosen, a Wire Template which has been Created and Verified may be uploaded to the Bank's Global Funds Transfer System, where a Repetitive Wire Line is created (this is a manual process). The customer downloads Template's Confirmation Status, which will include the Repetitive Line Number on the Global Funds Transfer System database. The following scenarios demonstrate how a customer may choose to control Wire and Template privileges in PC Manager. Scenario 1: "Free -Form " Wires in Dual Custody with Verification; Templated Wires in Single Custody. Customers often wish to control the sending of "Free -Form" (Non-Templated) Wires more strictly than the transfer of funds using a Template. Typically, the customer will choose the following options (other configurations are possible but this is the most common): Wire Custody Option 2--Create and Send by the same user. Wire Verification Option 2--Verify Non-Templated Wires only. Templates in Dual Custody --Custody option 0, 2 or 3 and Verification of All Templates. The Template Creator will not be able to Verify the Template. If the customer has chosen to allow uploading Wire Templates to Wells Fargo, no Templates may be uploaded unless Verified, and may require a third user to perform the upload function. In this scenario, the PC Manager Administrator will usually only grant Template Maintenance functions on a given account to those persons in the organization who control access to funds transfer capabilities. Even if granted both Create and Verify privileges for Templates, however, a single user cannot both Create and Verify any given Template since the Template Maintenance function is in Dual Custody. Since the only users who can set up or maintain Templates are those in the organization controlling the transfer of funds, security of funds transfer Wires using these Templates is maintained. The Administrator in this scenario usually grants all users with Wire privileges (who may or may not have privileges to setup and maintain Templates, at the Administrator's choice) the Create, Verify and Send functions on each account for which these users have access to wire funds. Security of funds transfer transactions is maintained in the following way: Wires created using Templates, once Created, are considered already to have been Verified. Since the Wire Custody Option allows a Wire's Creator to perform the Send function on that Wire, Templated Wires are thus in Single Custody. However, if a user Creates a "Free -Form" Wire, this user will not be able to Verify the Wire even if the user has been granted CM Product Implementation, 11/1996 7 I Wells Fargo Bank Understanding Custody and Security in PC Manager Verify privileges by the Administrator, since PC Manager's Wire Custody setup requires Verification to be performed by a different user than the one who Created the transaction. Scenario 2: "Mixed" Custody depending on the identity/function of the user. Some customers wish one or more highly -placed individuals within the organization, such as the Controller or Executive Officer(s), to be able to transfer funds by Wire in Single Custody, but require all Wires initiated by other individuals to be in Dual Custody. In order to accomplish this sort of "mixed" Wire Custody, the customer must choose Single Wire Custody (Option 4 and will usually also choose Wire Verification Option 3 (Verify All Wires) and Single Custody for Templates. In this scenario, Dual Custody is enforced by the PC Administrator. Only the individual(s) authorized for Single -Custody Wire transfers will be granted Create, Verify and Send privileges on the same account. All other users will have at most two of the three Wire privileges on any account. Template Maintenance privileges, similarly, will be granted by the Administrator only to those individuals the organization has authorized to control funds transfers. The following diagram illustrates the way PC Manager Wire transactions flow from the customer's PC through Wells Fargo to the beneficiary. transmission checks agaii PC Mana€ profile; passes Global Fur. Transfer Sysb I PC Manager Customer I Wells Fargo Bank I I Host Computer Global Funds Transfer System Initiates Funds Transfer Transaction conforming to PC Mgr Wire Custody and Verification Parameters and User Privileges Profile erifies account ithorization and ,neficiary bank -,signation; iecks funds to Federal e Host ystem Federal Reserve Host System Validates beneficiary bank designation; assigns Reference Number; passes to Beneficiary Bank Beneficiary Bank CM Product Implementation, 11/1996 x Credits beneficiary's account Beneficiary's Account Wells Fargo Bank Understanding Custody and Security in PC Manager Remote Verification PC Manager can be established on the Wells Fargo Host computer to require Wire Transactions and/or Wire User Privileges created on one copy of PC Manager to be verified at another, remote copy of PC Manager. In essence, Remote Verification is a type of dual custody wherein Wire transaction and/or User maintenance functions are performed by users who access different registered copies of PC Manager. Note: All PC IDs in a remote verification relationship must be established within the same Customer ID (WDDA Family or ACTION ID) on the Wells Fargo Host computer. Changes to the parameters of a remote verification relationship must be downloaded by the Administrator of each copy of PC Manager in the relationship before the changes will take effect. If the copy of PC Manager is established as part of a Remote Wire Verification relationship, the Administrator at both the Creator PC and the Remote Verifier PC must designate on each account whether remote verification applies to the account. The Administrator of a PC Manager established as the Creator of Wires for verification by a remote copy of PC Manager must additionally designate (for each account to which remote verification applies) the PC ID of the copy of PC Manager which will verify the Wires. Note: Only one PC ID can be designated as the verifier of Wires created on any given account. Once designated by the Administrator at the Creator PC, the Verifier PC ID becomes part of the information transmitted when a wire on the account is sent to the Wells Fargo Host computer. The transaction will not leave the Wells Fargo Host computer until it has been verified by the authorized PC Manager ID. This ensures that only users at authorized copies of PC Manager may verify Wire transactions. The Administrator of the Remote Verifier copy of PC Manager also designates the account for verification of Wires created at a remote copy of PC Manager. Remote Verification only takes effect if an account has been assigned the proper Remote Verification role at both the Wire Creator and the Remote Wire Verifier copy of PC Manager. Two copies of PC Manager may be set up to mutually verify each other's Wires. If mutual Wire Verification is NOT in effect on a given account, however, Wires created by the Wire Verifier copy of PC Manager on that account will not allow remote verification. The Create PC's Administrator may specify a dollar threshold below which a given user's Wire transactions do not require Remote Verification. Wire transactions this user creates that are less than the specified limit may be sent directly without having to be verified by the Verifier PC. The transaction flow in Remote Wire Verification relationships can be diagrammed as follows: CM Product Implementation, 11/1996 9 Wells Fargo Bank Understanding Custody and Security in PC Manager Vali transmission; checks against PC Manager profile; holds for verification by designated Verify PC; once verified, passes to Global Funds Transfer I Create PC Manager ID reates Wire; )loads for ;rification by •eviously- ;signated Verify notifies erify PC user to )wnload and Wells Fargo Bank Host System \ M'\ Verify PC Manager ID Global Funds Transfer System n notification y Create PC user, downloads Wire from Host computer; verifies Wire; sends back to Host computer for processing PC Manager can also be set up to require Remote Verification of User Wire privileges. In such a situation, the Administrator of the Remote User Creator copy of PC Manager must designate the PC ID of the PC Manager which will verify the wire privileges of its users. At the time user Wire privileges are set up or changed, the Remote User Creator PC's Administrator uploads the user's profile to the Wells Fargo Host computer. The Administrator then notifies an Administrator at the Remote User Verifier copy of PC Manager to download the user's profile, verify the privileges, and upload the verified privileges to the Wells Fargo Host computer. Users of the Remote User Creator copy of PC Manager with Wire privileges will not be able to log on until their user profile with verified Wire privileges has been downloaded by their PC Manager's Administrator. Note: Mutual Remote Wire User Verification is not possible. A given copy of PC Manager may be either the Creator or Remote Verifier of Wire Privileges, but not both. The flow of Remote User Verification can be diagrammed as follows: CM Product Implementation, 11/1996 10 041.1 Wells Fargo Bank Understanding Custody and Security in PC Manager Validates transmission; checks against PC Manager profile; hold User Profile for verification b designated Verify PC; once verified, holds for Final Status downloa by Create PC Create PC Manager ID Wells Fargo Bank 11 Host System reates or Modifies ser Wire Privileges; )loads for verification i previously- ;signated Verify PC; Aifies Verify PC user download and ;rify. Once Verified, ;rforms Final Status M1 Verify PC Manager ID n notification by Create PC user, downloads User Profil from Host computer; verifies Wire privileges; sends back o Host computer CM Product Implementation, 11/1996 11 045 Form W - 9 (Flay January 19931 Oecart� of the Treasury IM.rn1111 a.r.n,M s..vC. V c Request for Taxpayer Give this form- to Identification Number and Certification the requesUr. Igo NOT send to IRS. name tit iomi .games, ust nrst &no arcie ate name at the person or entity whose number you enter in Part I below. Sse itawuctions oa page 2 it year name has C"agae.) Busines3 name (Solo proonstors see instructions on page 2.) (Q you are exempt from backup withholding. camplw this form alto ermer " E)>cMpT' in Part 11 below.) Address (number ano street) City, state. and ZIP COde Identification Number Enter your TiN in the appropriate box. For individuals, this is your social security number (SSN). For sole proprietors. see the instructions on page 2. For other entities, it is your employer identification number (EIN). If you do not nave a number, see How To Obtain a TIN below. Note: If the account is in more than one name. see the chart on page 2 for guidelines on whose number to enter. Social security number I I � I � I II OR Employer identilicodon number I i I I I I List account numbers) here ;optiorm) For Payees Exempt From Backup W'ibi holding (See Exempt Payees and Payment& an page 2) 10. Requester's name and address (optional) CartMcation.=Jnaer penalties of perjury. I certify that: 1. The numeer shown an this form is rry carec: taxpayer identification number (or I am waiting for a number to be issued to me)I. and 2. 1 am not suolect to backuo withnoiding because: (a) I am exempt from backup withholding, or (b) I have not Deem notified by the Internal Revenue Service that I am subject to oacxuo withholding as a result of a failure to report ail interest or dividends. or (c) the IRS has notified me trial i am no longer suolect to backuo withholding. Certification Instructions. —You must cross out item 2 above if you have been notified by the IRS that you are currently s:eaect to backup witnncld)ng because of uncerrecortmg interest or aiviclerics on your tax return. For real estate transacnons. item 2 does not apply. For mortgage interest paid, the acquisition or abaneonrnent of secures properly, contributions to an individual retirement arrangeme m (IRA), and generally payments other tMan interest and aividends, you are not required to sign the Candication. but you must previae your correct TIN. (Also see Signing the Carttflcation an page 2.) Sign I Here I Signature ► Date ► Sec~en mrera-nces are -a the internal Revenue Coca. Purpose of Forrn.-4 person wile is reauirea to file an informatics return with the IRS must octam your correct TiN to report •nccme caw to you. real estate transa eons, mortgage interest you oato. the accutsinon or arianconment ct secures property. 3r contnouticns you mace to an 1RA. Use Form W-9 to fumisn vcur correct iN to :he •ecuestor 'tne oerscn asking you to furnisn your TiNi ana. vvnen acaicame. (1) to certify that the TiN you are furnishing is correct for mat you are waiting `or a numoer to oe issued). '2) to cerrity that you are not subject to bacxuo withnolaing. and 131 to claim exemption from cackuo withnoscing if you are an exempt payee. Furnishing your zoned TiN ana making Me aocroonate certifications wifl orevent certain payments from oeirg suo)ect :o oacxua withnolaing. Note: It a requester gives you a form other than a W-9 to .wuest ./cur 77N, you must use the recuesters for. How To Obtain a TIN.—zf you do not have a TiN, apply for one immeciatety. To apply. get Form SS-5, Application 'or a Scar Security Carc ifor -narviauaisi, from your !opal office cf Me Social Secunry Aamintstraticn. or Fonts SS-d, Aopucatien icr c-molover ICentlfication Numoer ifor ousinesses ana ail Omer entittesi. 'rum your local .AS office. To comciete Form W-9 if you ec no: have a TIN. write "AODItea !or' in the state tar ire 71N in Part i, sion anc zate me'orm ana give t c the reauester. Zenerauv. ycu witi then nave 6o days to obtain a TIN and furnan it to the requester. if the requester does not recomm your iN within eO am. tacxuo withholding, I aeotic=1e. will begin anc continue until you furnish your � iN :o the requester. For rewortaete interest or civtaena payments. the paver must exercise one of the following o=n3 concerning backuo withholding during this 60-day oenoo. Under option (1). a paver must tackuo wtthnoid on any witharawats you maxe 'rom your atxcunt attar 7 5usines3 nays after the requester receives this form cacx from you. Under otmcn (2). the payer must t7ackuo wttMmola an any . reoortaole interest or dividend payments made to your account, regarcle33 of whether you matte any withcrawam The oaexuo withholding under option (2) must t ogin no Later than 7 btmnew days attar the requester receives this form oacx. Under action (2). ne payer is required to refund the amounts withheld if your cartiflea TiN is received witmin the 60-day penoa and you were not subject to cacxuo witnnoicing curing treat period. Note: Whang 'Applied for' on me form means Mat you nave alreacy applied for a 71N OR mar you inrend to apply for one in the near ,Auture. As soon as you receive your 71N. commete anotner Form W-9. include your TiN. sign and Cate ,ne form, aria give :t to the requester. What is Bacxup Withholding? Persons making certain oavments to you after 1992 are reduired to witnnoie and pay :o the IRS 31 % of such payments unce► cartain conamons. This is called "bacxue withnolaing.- Payments ,net could ce sucfect to bacxuo witnnoicing •nc:uae interest. Cat. No. t 0231 X diVICen23. oroxer and barter exchange transactions. rents, rcyarceta, ndnernwayee compensation. and certain payments from fishing boat ecerators. our (:o not include real estate transactions. If you arve the requester your correct TIN. maxe the aoeroormte conl7cations, and report ail vcur taxacie interest ana cividemas on. your tax return. your oavments mil not be sul3ieC! to Dacxue wrrhrclatng. Payr-eras you receive will oe suciect to =acxuo wunnolding ,f* 1. You do not furnish your TiN to me requester. =r Z. he IRS notifies the requester that you furnisnea an ;ncorrect TiN. or 3. You are notifec oy !ns IRS that you are subieC: t0 Gacxuo w►thhoiCing Decause you faiiea :o report ail your interest ana dividends on your tax return ifor reoortaole interest ana aiviaenas only), or 4. You do not certify to -e requester that you are not sumec :o backuc withnoiding under 3 above (for •ecortacle Interest arc dividend accounts opened after 1C-$3 only), or 5. You co not certify your TiN. This applies only to reoortaole interest. civ+denc. oroxer. or Darter exchange accaums aceneo attar 1983. or oroxer acccurts consicerea inac,Ive n 19112. Except as explained in = move. other reoortaole oavments are si.;otect to backuc withnolaing oniv if 1 or 1 acove acpiies. Canaln Davees ana oayments are ?xerrgt from backuo witnncicing ana information resorting. Sae Payees and Payments Exempt From =ern, W-9 .Rev 1-931 0 4 G Form W-9 (Flew. i AM 8ecium iMhhtk idbnp. below. and E:annpit P*J and Pav w under 3peeiAe Inadfucdom below, ri you are an exempt payee. Pt)nes rind fawns to Exempt From 8seMo WNWvMdk%& he foNowing Is a list of payees exempt from backup wannow" and for whicn no infortrtadon reporting Is required. For interest and dividends. am listed payees are exempt except item (9). For broker transactions. payees listed In (1) through (131 and a person registered under the Investrrnen Advisers Act of 1940 who regularly acts as a broker are exempt. Payments subject to reporting under se=ons 6041 and 6041A are genwaily exempt from backuo withholding only if made to payees described in items (1) Mrougn (7). except a corporation that provides mod" and health care services or bills and collects payments for such services is not exempt from backup witthholding or information reporting. Only payees described in . items (Z Mmugn (5) are exempt from backup withholding for oauter exchange transacdons. patronage dividends. and payments by certain fishing boat operators. (1) A corporation. (M An organization exemot from tax under sacdon 501(a). or an IRA, or a custocum acccunt under secton 4W(bI(7). (3) The United States or any of its agences or instrumentalities. (4) A state. the Cistr= Of Cotumola. a possession of the United States. or any of their political sucdivesadns or . instrumentalities. (51 A foreign government or any of its pOfitical subdMaiians. agences. or insmmeratwitles. (8) An intemocon OrtJWr2rain or any of its agencies or instrumentalities. M A ferergn central bank of issue. (81 A dealer in soscunties or commodities raouired to register in the United States or a possession of Vie United States. (fi) A futures =rmmssion rnwcmam registered with the Cemmocity Futures Traolmg Commission. (10) A reel estate investment suet. (111 An entity registered at act tames during the tax year under the investment Comoany Ac: of 940. (1Z A common trust fund operated by a baarnx under sacnon =8aai. (131 A financ:al instttimon. (14) A middlemen Known in the 1nv6111merit community as a nominee or listed in the most recant publication of the American Society of Coroorate Secretaries. Inc.. Nominee Lst. (15) A gust exempt '-roan tax under season 664 or Ceectoed in sectton 4947. Payments of divndersds and pwawilepe di ndenda generally not suoiec: to oacxua witnnorcing include the following: e payments to nonremaent alum suolec to withholding unaesr section 1 "1. e Paymerm to cartnennaos net engaged in a trade or business in the United Stites am no nave at Ids= one nonreeroom oarcter. e Payments of catronasge almonds riot paid in money. e Payments made by tartan folaign orgarn:amens. . _ Payments of intim generlily nit suoltsct to bacxuo withholding incivae the follawtrtg: a Psyments of interest on oougaoons issued by individuals. Now. You rney oe suolect to tachue w+rlrnoading d rhrs interwr is 5600 or more aria IS paid in true course of the payers trace or ousaness ants you nave nor oroviced your correct TIN to rrre cover. e Psymerits of tax-exemot interest (ncttaaing eXOMOt-+ntrsrest arvicencs under section 8W. e >>vmentz aesc: coed in section 6049(bk!) to nonresident aliens. o Payments on tax -tree ccvenant t)cncs under sectlan 1 451 a payments mace cy certain foreign orcanizations. e Mcr-gage r verest Care =y vau. Payments that am not subject to information reca tng are also not subject to backup withholding. For detaii& we sections 6041. 6041A(al. 6042. 6044. 6045. 6049. 6050A, and 6050N. and:thair regutations. Penalties Fadure To Furnish TiN.-If you fail to ki misn your correct nN to a requester. you are subject to a penalty of S80 for east stoma failure unless your failure is due to reasonable cause aria not to willful neglect.. Civil Penalty for Fake Information With Respect to Withholding. -If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a SSW penalty. Criminal Pendty for Fabifo" Infonna.tlim willfully falsifying cerdfications or aff(mmmons may subject you to criminal penalties including fines and/or impnsonment. 14iieuas of TiNs.--if the reauetsm alsddses or uses TiNs in violation of Federal law. the requester may be subject to cmd aria crtrranal penaitles. Specific Instructions Name. -If you are an individual, you must generally provide the name shown on your saactai secwtty caro.:iowever. if you have changed your Iasi name. for instance. due to nwnagis. without informIng the Social Security Admrimmucn of the name change. please enter your first name. Ise last nin me shown on your soc ill security card. and your new last name. If you are a sole proprietor. you must furnisn your individuei name are either your SSN or EIN. You may also tinter your business name or 'doing business as' items on the business neame One. Enter your names) as shown an your social security card anofor as it was used to aooty for your SN on Form SS-4. 31gnRnp the Cardfic adom- .1. IneereeL Dk*iand. and Bartar Exehanpe Accounts Opened 8411101141111 1904 and Broker Accounts Considered Acdwe Ckwiinq 19M You are reduirea to fu misn your =jrtect TiN. but you are not reouirec to sign the cm Ufle aeon. 2. IrMWML Dividend. BMW. end Basler Excrisnpe Aeeounu OOerwd After 1983 and Broiler Aeoou its Considered Inecd" Dur" 19e3. 'rou must sign the certification or bacxuo withholding waii doom. ff you are suom lit to backup w,rrtttnofding and you are mossy peovtoing your correct TiN to the redues er, you must crcm out item 2 in the coo OR n bosftxa signing the form. 3. Reel Estelle Tri nemcdons. You must sign the csrtrfic=on. You may crew out item 2 of the cartifli=on. A. turn Psymein You we reouired to turnran your correct TiN, but you we not ramrod to sign Vie won unless you Have bow notified of an incorect TiN. Other payments include payments made in the course of the recumtoes trace or business for rents, royaMes. goods (Other Than biiis for m crusndioN. medicai and health care services. payments to a nonemolovee for services linctuding attomisy and accounting fees). and payments to certain fasneng boat w--ew MOMOars. S. Mortpape interest Paid by You. Acquu itldn or of Secured Property, or IRA Corttrtbudorm You are reouireo to tumisn your carrot,, TiN. but you are not required to sign the certrflcation. 6. Exempt Payees and Paymmtts. If you are jxemet from Cacxua withholding, you snoutd =orrcrete this `orrr to avoid Dossiooe erroneous Paso 2 baclatp witr:ndlding. Enter your wrist, TiN in Part 1. wrrts -EXEMPT- in the bloo:ik in Psn 11, and sign ant data the farm. If you are a nonresident alien or foreign entry not wbpK:t to backuo warnotding. glue the requester a edmpleted Form W-8. Certificate of Foreign Status. 7. TIN "Applied for.' Follow the inatr =ors under How To Obtain a TIN, on page i . and sign and dad this form. 31wasture.-Aor a join account. only the person whose TiN is shown in Part 1 should sign. Privacy Act Nodce.-Secaon 6109 requires you to furnish your correct TiN to persona who must file informautcn retums with the IRS to retort intersisL dividends. and tsrtam other income paid to you.:mdrtgage interest you paid. the acgwsaoon or abandonment of seared property, or contnbuaceuts you made to an IRA. Tice IRS uses the numoers for identiflcatia purposes and to help verify the accuracf of your tax ran=. You must provide your TiN whatne► or not you are nK u,rso o Ale a tax return. Pfalyers must generally *wmid 31 % of taxable interest dividend. ants :ertaan Other aayments to a payee who does not furnish a TIN to a payer. Certain penalties may also apply What Name and Number To Give the Requester Far this type at soeoime I Qive name end WN oft 1. Ir child m The 6111101MACIU l z rwo ar mare TM actual owner of the sierd *idiots 0011"t account or.. it comOned aeeaurtq funds. me first noivioaral an rite aecotatt ' 3. CWXWdAn swount of The frsior 2 a motor rtJnirornt Go to Minors AO 4. a. rho uswl T he grantor -wane, revocww .avenge vast lgrantat is atop wtsee o. So-caeied trust I The actual owner' account that is not a low or Vila trust under state law S. Sore oreanoeorsnio The owner � For this type of sawunC Give name and ON at. L Sole croonewroneo i The owner 3 7. A void trust. «taro.. or j l agaa mnY 341111,111111011 ^Sit b carverstion 9. Aasocation. etua. I The craaritzation .-"X .CL-narnnow educanonal. or OVeer tax-axemct organs=son 10. Parmorsmo The oartnerruo 11. A tremor or regwaored ! The crouer or nominee non+++oo 12, account visit ate The oueue onmv Deoarcnsrft at Agnculturs n Cue name I Of a ouics: onmv (7uc.'r as a state 0r tocar govern ""M scrod otairct or orison► mat reeorvee agneuetmxae pregrorn Jvrrtants ' ust rirst and ­­ ere mime of the person -nose nurnow vote rtemon. 'Circe trio minor's name aria lumen one rrtner's SSN. i Show your :nctvtauni norms. You mum also efrw your tt�airteaa nsmo. You may use your SSN or eN. first ants c:rcie me name of the ,aqa trust. oatate. or pension trust. (Do not fumisn 'tie 11N at the personal morestrrttzme or tnM" unless me 1090 emftity itself .3 rat Cowtgnsted in rho oc= nt W4.1 Note: If no name IS CYCea wiles Mere is more than one name. :he numfxr will oe ccnsaaerrd to be that Ct :-+e .4rsr 1817me last9M "�.5. Go.orrrrr+t P'tttan0 Offacc iM - 14*,04eGo70 04r CASH MANAGEMENT Ln 8 Wells Fargo Sweep Services For most of us, time is at a premium. With Stagecoach® Overland Express Sweep Services, you can devote your time where you're needed most —managing your business. Sweep Services seek to improve your company's day-to-day cash management capabilities by integrating your investment funds transfer and business checking functions. How You Benefit > Save time. Sweep Services give you more - convenient access to the available balances in your checking account and Stagecoach money market mutual funds. > Eliminate worry. No longer will you have to worry about unpredictable overdrafts. Your pre- determined WDDA (business checking account) target balance is maintained by automatically moving funds between your WDDA and your mutual fund investment. > Save money. Sweep Services help reduce daily overdraft fees and FDIC costs as funds move from your WDDA to your non —FDIC insured money market mutual fund. > Improve Your Investment Potential. Sweep Ser- vices automatically sweep excess balances into a money market mutual fund on any day that your target balance is maintained. Maximum Convenience Sweep Services also provide features that help make your cash management activities easier: > Daily access to balance information. Enjoy daily access to your balance position through PC Manager, WellsNet or. Information Express balance reporting service, or your touch-tone telephone by dialing 1-800-AT-WELLS (1-800-289-3557). > One -stop customer service. Wells Fargo's Cash Management Client Services gets you immediate answers to your cash management questions. How It Works Sweep Services optimize your cash management capabilities automatically. > Keep your WDDA at a predetermined target balance level. > Move any excess amounts into a money market mutual fund in the Stagecoach family of funds. You can customize Sweep Services to meet your business's specifications. continued on reverse side NOT FDIC INSURED I NO BANK GUARANTEE I MAY LOSE VALUE Money market mutual funds seek to maintain a stable net asset value of $1.00 per share; however, there can be no assurance that the fund will meet this objective. Wells Fargo Bank provides investment advisory services, shareholder services, and certain other services for the Stagecoach Funds. The Stagecoach Funds are distributed by Stephens Inc., Member NYSE/SIPC. Wells Fargo Bank is not affiliated with Stephens Inc. For a prospectus relating to the Stagecoach Overland Express Sweep Fund, which includes information regarding charges and expenses, please call Stagecoach Funds at 1-800-222-8222. Please read the prospectus carefully before investing. Wells Fargo Fast Then. Fast Now. www.wellsfargo.com Sweep Services continued How Stagecoach® Overland Express Sweep Works 1. Incoming collected funds above the target balance in your WDDA (business checking account) are invested in a non —FDIC insured money market mutual fund. 2. Assuming that there are sufficient funds in your WDDA and Sweep Account, the predetermined target balance will be maintained. To maintain the target balance, funds will be transferred into your WDDA by redeeming shares from your Sweep Account, up to the total amount invested. For Further Information about Other Securities Brokerage services are available through Wells Fargo Securities Inc., member NASD/SIPC, a wholly owned subsidiary of Wells. Fargo Bank, N.A. For further information about Wells Fargo Securities Inc. broker- age accounts, please see your brokerage account terms and conditions. 04c) CASH MANAGEMENT SWEEP SERVICES Tracking Your Account Activity It's important to know where you stand and to have access to information about your Sweep Account when you want it. Wells Fargo works to provide you with a number of information sources and ways to access them. With the Sweep Services, you receive or have access to the following information concerning your accounts: > . Account Position Report: This report gives you summary information about your WDDA (busi- ness- checking account) and non —FDIC insured Sweep Account from the previous day. A sample Account Position Report is included with these materials. > Statement for your Sweep Account: This state- ment serves as your fund confirmation statement. It recaps the balances for the statement period and the individual sweep transactions as well as the number of shares purchased and redeemed in the Fund and the dividends earned. (See a sample report on the reverse side.) > Bank statement for your WDDA: This is the same statement and format you currently receive as part of your WDDA service. > Access to current Fund yield information: By calling 1-800-AT-WELLS (1-800-289-3557), Wells Fargo's InfoTouch service, you can access an audio response telephone balance reporting service. > Access to information about all of your WDDAs and your Sweep Account through your own ter- minal or personal computer using PC Manager, Information Express or WellsNet, Wells Fargo's automated balance reporting systems. > Periodic reports and shareholder information from Stagecoach about the Fund linked to your Sweep Account. continued on reverse side Wells Fargo Fast Then. Fast Now. www.wellsfargo.com (� SWEEP SERVICES Sample Sweep Account Statement Q InfoTouchIm telephone number to obtain your Fund yield and balance information. Q Customer Service telephone number to obtain other account information on any of your WDDA accounts, to request statements address changes, etc. © Statement Period Fund dividends are credited on the first business'day of each month. Q Sweep Account Activity. This displays the sum- mary of transactions made during the statement period, such as shares purchased via the auto- matic sweep, dividends paid and shares redeemed to replenish your WDDA's target collected bal- ance. © Year -to -Date Dividends paid on your shares. Q Net Asset Value (NAV) per share. The value of each of the Funds' shares is $1.00. Q Debit and Credit Transaction Detail. Reflects (a) the redemption of shares to replenish the collected balance target, and (b) the purchase of shares via the automatic balance sweep from your WDDA. Q Account Balance by date for the accounting period. The only dates listed are days for which the balance changed. 4417-876543 P O BOX 63030 'AN FRANCISCO. CA 94163 SAMPLE FOR CURRENT YIELD BALANCES CASH FLOW COMPANY 0 O CALL 1-800-289-3557 525 MARKET STREET 0 6:00 AM TO 7:00 PU PT SAN FRANCISCO. CA 94105 1 FOR ASSISTANCE CALL. BUSINESS ACCT SVC CENTER Q AT (80C1) AT WELLS 24 HOURS A DAY PAGE 1 OF 1 THIS STATEMENT COVERS: 8/4/XX THRoUGH,9/1/XX - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - © SUMMARY SWEEP ACCOUNT 4417-87654E BEGI NNI NG BALANCE DO SHARES PURCHASED 609.834.21 DIVIDENDS YTD: 131. 79 .O NET ASSET VALUE PER SHARE 1.00 DI VI DENDS 131.79 OSHARES REDEEMED 403. 445. 44 - ENDING BALANCE 207. 620. 56 - - - - - - - - - - - - - - - - - REDEMPTION TRNASACTON DESCRIPTION - - - - - - - - - - - - - EFFECTIVE POSTED SHARES TRANSFER TO 4123-456789 8/27 402.44644 O PURCHASE TRANSACTION DESCRIPTION EFFECTIVE POSTED SHARES TRANSFER TO 4123-456789 8/24 570,290.82 TRANSFER TO 4123-456789 8/28 5.744.43 TRANSFER TO 4123-456789 9/01 33.888.96 DI VI DEND PAYMENT 9/01 131.79 BALANCE DATE BALANCE DATE BALANCE DATE BALANCE o I NFORMATI ON 9/24 570. 280. 82 8/27 167. 845. 38 8/26 173. 509. 81 9/01 207. 520. 56 SHARES OF THE FUND ARE NOT FDIC INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT THANK YOU FOR BANKING WITH WELLS FARGO YOUR VVELLS FARGO STATEMENT PRINTED ON RECYCLED RECYCLABLE PAPER XXXXXXX The dividends earned that are shown in this example are for illustrative purposes only. Actual dividends earned will vary. Fund advised by Wells Fargo Bank. Sponsored/distributed by Stephens Inc., Member NYSE/SIPC. CASH MANAGEMENT RETURNED- ITEM SERVICE Faxed Image of Returned Items Faxed Image of Returned Items provides you with same -day images of checks that have been deposited into your WDDA checking account and returned unpaid by the maker's bank. How You Benefit > Receive current information. The faxed images will be sent to the location of your choice by 12:00 NOON (Pacific Time), and copies can be sent upon request for the previous five business days. > Receive detailed check information. You can re- ceive an image one of two ways: • Front and back of an item • Front only > Enjoy flexible delivery options. You can tailor how you specify faxed images so that they meet your unique management information needs. Choose any or all of the following: • Chargebacks only • Reclears only • Both chargebacks and reclears • Items over certain dollar limits • Items sorted by location (for chargebacks, you can also vary dollar limits by location) • Multiple locations Format of Report Each set of faxed images will be preceded by a cover letter providing summary information: > Company's name > Account number > Location number (optional) > Location name (optional) Key Definitions > Chargebacks: Checks not honored by the drawee bank; your account is charged for the amount of the check. > Reclean Items sent back to the drawee bank by Wells Fargo Bank in another attempt to collect. > Pending: Wells Fargo Bank has not _made a deci- sion on whether the item should be returned to the drawee bank or charged to your account. co co Wells Fargo Fast Then. Fast Now. a Ln www.welisfargo.com '� CASH MANAGEMENT InfoFax — Price Sc h eU I e ,Effective March 1,1998 Reporting Services Charge Basis Price ACH Return/Redeposit Report per month $2500 Per"Item $150 ACH Receive Report . xn�mum ... _.. .... ............ per month $20.00 Fer Item. $050. ACH File Received Report Manpnum per month $2000 Per Item $200 Wire Transfer Advice iUlontfly lVlafit enance $2000 Per�;e Reporte $500.. Reporting Services Charge Basis Price Express Balance Report First Account. $3010 . Additional .Accounts'' $25.00 QuickView Report x. 1rstAcc4unt Adtli ional Accounts $1230 "� Return Items Fax First Accuun .:' . _ $65.OQ , Additional Aonnts Per_Transmissron ' $2.0. Front of ;Chick 4n1 ......... r $1d0:` Both sidek s Q chec _. $.Zs InfoFax Per Detail Item Surcharge $£ Fer Item; a $1 CCUOF G Wells Fargo Fast Then. Fast Now. C4 www.wellsfargo.co.m (� `� CASH MANAGEMENT INFORMATION EXPRESS® FEB Q 1 l99 Returned Items Report �s4k . The Returned Items Report provides you with same -day, detailed4nfarinatidn on checks that have been deposited into your WDDA checking account and returned unpaid by the maker's bank. The report is accessed as the 125 report through the Report Inquiry service only (not available through the Custom Report Inquiry service.) How You Benefit > Receive current information. The report is available at 9:00 a.m. Pacific Time, and an updated report is available at 11:00 p.m. Pacific Time. You can easily access the current day's information or request historical information for the previous five business days. > Receive detailed check information. You can specify the information you wish to receive on each returned check by selecting from two data content options: • MICR line plus detail (standard reporting) • MICR line plus detail with up to 10 keyed optional data items > Track activity by location. If you designate each store, department or other group as a location, detail information is sorted and subtotaled by location number, allowing you to track activity for each location separately. Detailed Check Information > Enjoy flexible delivery options. You can tailor the Returned Items Report to meet your unique management information needs. The report can include: • All items • Only chargebacks and pendings • Only reclears and pendings • Items over certain dollar limits • Items sorted by location • Different chargeback dollar limits for each location > View your data summarized by category. Cumulative account totals are reported in the following categories: • Chargebacks: Checks not honored by the drawee bank; your account is charged for the amount of the check. • Reclear: Items sent back to the drawee bank by Wells Fargo in another attempt to collect. • Pending: Wells Fargo has not made a decision on whether the item should be returned to the drawee bank or charged to your account. continued on reverse side BOB JONES (A) DLOC1234567 Exp. 111166 2048 123 First Street /B\ f(') ( ` I l` 5) 23- Si7 \�� (D) DATE ' PAY TO THE ORDER OF DOLLARS FIRST NATIONAL BANK 123 TREE AVENUE SUBURB, CA 12345 MEMO (H) (G) (F) (E) A002100066A 2048CS64076C 2121 0000019849 MICR Line • Account number/ serial number (FIG) • Dollar amount (E) • Drawee bank ABA number (H) Detail • Disposition of returned item • Reason code • Maker's name (A) • Deposit date • Location number Keyed Optional Data • Phone number 0) • Issue date (D) • Valid ID number (B) • Valid ID expiration date (C) • Register number • Drawee bank name (1) • Drawee bank phone number • Investment account number • Social security number • Major credit card number • Check authorization code • Maker address • Payee name M Wells Fargo Fast Then. Fast Now. �) - i awww.welisfargo.com. INFORMATION EXPRESS® Returned Items Reportcontinued 125 RETURNED ITEMS REPORT REQUEST FOR: 3/20/97 AS OF 3/21/97 1:44 PM PT 4111222333 ACCOUNT 1 LOCATION 1 Amount Disposition Return Details ........................................................................................................................................................................................... $15.75 CHARGEBACK Reason: NSF - Insufficient Funds Location: 1 Deposit Date: 3/18/97 ABA #: 121000248 - WELLS FARGO BANK Account #: 4999999999 Serial #: N/A MAKER NAME: JOHN SMITH MAKER PHONE NUMBER: 123 MAIN ST CHECK AUTH. NUMBE: 1575 REGISTER NUMBER: 11-24/1212-8 VALID ID/DRIV LICENSE NUM: A1234567 $15.19 CHARGEBACK Reason: AC - Account Closed Location: 1 Deposit Date: 3/17/97 ABA #: 121000358 - BANK OF AMERICA NT & SA Account #: 01231231231230 Serial #: N/A MAKER NAME: MARY JONES MAKER PHONE NUMBER: (415) 555-1234 CHECK AUTH. NUMBE: 1519 REGISTER NUMBER: VALID ID/DRIV LICENSE NUM: B6767676 $168.50 CHARGEBACK Reason: LS - Lost/Stolen Location: 1 Deposit Date: 3/21/97 ABA #: 012345678 Account #: 654321098765 Serial #: N/A MAKER NAME: ROBERT JOHNSON MAKER PHONE NUMBER: CHECK AUTH. NUMBE: 456 REGISTER NUMBER: VALID ID/DRIV LICENSE NUM: C4444444 ........................................................................................................................................................................................... Location Reported Suppressed Total Total Items Amount Items Amount Items Amount . ................................................................................................................................................................. CHARGEBACK 3 $191.44 3 $191.44 RECLEAR 0 $.00 Total 3 $191.44 3 $191.44 0 5 r*-i CASH MANAGEMENT Returned Item Service Protect your company against fraud and operating losses incurred from checks deposited in your company's WDDA and returned unpaid by the maker bank. How You Benefit > Protect against fraud. Earlier delivery of returned check information allows your company to quickly identify and protect itself against custom- ers who write checks. that are returned by their banks unpaid. > Save money. Extensive reporting provides your company with information that reduces the amount of staff time spent researching returned items. > Expedite collections. Earlier delivery and exten- sive reporting of returned check information al- lows your company to begin the collection pro- cess earlier and reduce the collection time for receivables created by returned checks. > Save time. Extensive and flexible reporting op- tions allow your company to tailor its reporting needs to its collection system and process, and reduce time spent researching, analyzing and recording returned items. A Range of Reporting Options Your company has a choice of three types of report- ing media for receiving information on returned checks: Reporting Customers Options: Who Will Benefit: Information • Customers who receive a Express Reporting small. volume of returned items each day • Customers who want to receive a preformatted report of their return items Transmission of an • Customers who receive a Electronic Data File large volume of returned items each day Faxed Images co Wells Fargo Fast Then. Fast Now. a LO www.wellsfargo.com • Customers who have an internal reporting system for returned items • Customers who key reclama tion items into their point -of - sale or accounting systems • Customers who have multiple locations that need to be notified of returned items of CASH MANAGEMENT SWEEP SERVICES Answers to Commonly Asked Questions... Question: Does this service protect me if I write a check for more than the balance in my WDDA (business checking account)? Answer: Yes, so long as the amount of the check does not exceed the WDDA balance plus the Sweep Account balance. Balances are automatically trans- ferred from your Sweep Account (up to the balance you have invested) both: (1) to cover any unexpected collected balance overdraft that may result from your disbursements, and (2) to replenish your collected balance target. These transfers are made at the end of each business day. Question: How are dividends calculated? Answer: Dividends are calculated based on the begin- ning balance in your Sweep Account, except for non - business days or when Wells Fargo is open but the NYSE is closed. For this exception,* the beginning and ending balances in the Sweep Account on the prior business day are compared, and the lower of the two balances is used for the dividends payable calculation for the non -business days. Please refer to your pro- spectus for a complete explanation of how dividends are calculated. Question: When are dividends credited to my account? Answer: Each Fund declares dividends daily and credits your Sweep Account on a monthly basis, on the first business day of the month. You may choose to have dividends credited instead to your WDDA trans- action account. To elect this option, simply check the box on the Sweep Authorization Agreement. Question: Can the dividends I earn be automatically transferred to another alternative investment? Answer: You may initiate a transaction to an alternative investment vehicle by writing a check or transferring money from your WDDA. Dividends that are not trans= ferred from the Sweep Account to replenish your _ _ WDDA target balance are reinvested automatically, enabling you to compound your investment. Question: How can I access my mutual fund balances and dividends? Answer: To provide for the automatic sweep of balances between your WDDA and money market mutual fund, your mutual fund shares will be maintained in a sub - account of a Wells Fargo custodial account with the money market mutual fund. As a result, once you open an account, you will be able to access your mutual fund shares only through your WDDA. To withdraw funds, you can simply write a check, initiate a wire transfer or initiate an ACH debit. Question: How do I know what happened to my cash flow on any given day? Answer: We provide a specially designed report that shows your balance position. The Account Position Report, accessed via our Information Express balance reporting .system, PC Manager or WellsNet, will provide you with key balance and activity information about your WDDA, Sweep Account and line of credit. A toll -free call to our InfoTouch telephone reporting service will give you key balance and yield information about your investment in the Sweep Account. Wells Fargo Fast Then. Fast Now. www.welisfargo.com 05 CASH MANAGEMENT SWEEP SERVICES Fund Choices, Costs and Subscription Information Your cost for Sweep Services depends upon the structure of your account and the Fund you choose for your investment. Below is an overview of your fund options and the cost structure, along with informa- tion on how to subscribe to Sweep Services. Money Market Mutual Fund Choices Wells Fargo offers three money market mutual funds that may be linked to your Sweep Services: > Stagecoach® Overland Express Sweep Fund, a taxable money market mutual fund that is advised by Wells Fargo Bank, N.A., seeks to provide inves- tors with a high level of current income while preserving capital and liquidity. The Fund invests in a portfolio of short-term money market instru- ments. The Fund is part of the Stagecoach Family of Funds. > Stagecoach Treasury Plus Money Market Fund seeks to provide investors with current income and stability of principal. The Fund invests in U.S. Treasury securities, which are debt obligations issued by the U.S. Government and for which the payment of interest or repayment of principal are secured by the full faith and credit of the U.S. Treasury and in repurchase agreements collater- alized by U.S. Treasury securities. Shares of the Fund itself are not obligations of, or guaranteed by, the U.S. Government. The Stagecoach Treasury Plus Money Market Fund carries a minimum sweep balance of $500;000. > Stagecoach California Tax -Free Money Market Fund seeks to provide investors with a high level of current income exempt from federal income taxes and California personal income taxes* while preserving capital and liquidity by investing in high -quality, short-term U.S. dollar -denominated money market instruments, primarily municipal obligations. The maximum amount that can be maintained in a Stagecoach California Tax -Free Money Market Mutual Fund account is $150,000. We encourage you to read about each Fund in the applicable prospectus accompanying this material. Costs No monthly service charges will be assessed for the sweep service if you and your Relationship Manager set a predetermined target collected balance in your WDDA. You can maintain a predetermined target collected balance in your WDDA or a minimum or maximum threshold balance in your Sweep Account, depending upon which Fund you choose. As an alternative to keeping a predetermined target collected balance in your WDDA account, you may choose to pay a flat monthly service charge for the entire service. Ask your Relationship Manager for more information. Please refer to the applicable prospectus for more information on Fund level fees and expenses. For services used as part of the WDDA, Information Express and other cash management services, Wells Fargo's standard price schedules apply. How to Subscribe 1. Complete the Wells Fargo Credit Sweep Authori- zation Agreement and IRS Form W 9. 2. Designate which Fund you want linked to your WDDA. Your Relationship Manager will help you with this step and review the WDDA target balance requirements and balance thresholds that may apply to your Sweep Account. 3. Set up, at your option, a Zero -Balance Accounting system if you want your multiple WDDA accounts consolidated to a master account for purposes of simplifying the number of Sweep Accounts needed. Your Relationship Manager can assist you with this step. *A portion of the Fund' distributions may be subject to federal, state and/or local taxes or to the alternative minimum tax (AM?). Wells Fargo Fast Then. Fast Now. www.wellsfargo.com n 05,-� CASH MANAGEMENT SWEEP SERVICES Glossary of Terms CMCS: Cash Management Client Services provides customer service and implementation support for all cash management products and services, including the Overland Express Sweep Service. To reach CMCS, call 1-800-AT-WELLS (1-800-289-3557). CSO: Customer Services Officer, your service contact at Wells Fargo when questions or problems arise con- cerning any of your cash management products or services. Customer Services Officers are part of Cash Management Client Services. Dividends: The Funds offered in the Stagecoach® Overland Express Sweep Services declare dividends each calendar day and credit your Sweep Account (or your WDDA, if you elect this alternative) on the first business day of the following month. Dividends pay- able to you are calculated based upon beginning bal- ances in the Sweep Account except non -business days, when Wells Fargo is open but the NYSE is closed. For these non -business days, the beginning and ending balances in the Sweep Account on the prior business day are compared, and the lower of the two is used for the dividends payable calculation for the non -business day. The amount of dividends paid each month will vary with market conditions. Refer to the prospectus for more information. Ease of Access: The securities held by the portfolio in which the Sweep Fund invests are priced daily to reflect current market value. Shares of the Fund held by inves- tors can be redeemed daily to cover disbursements from the transaction account and to replenish the collected balance target in the business checking account. Fund Yield: The seven-day yield reflects current income on each share of the Fund. Yields will fluctuate with market conditions. To obtain the latest seven-day yield, use InfoTouch. Information Express: Wells Fargo's automated, PC- or terminal -based balance reporting system that provides information about your WDDA and Sweep Services. InfoTouch: The touch-tone telephone service that supports Wells Fargo's telephone balance reporting service. Mutual fund yields and account balance/ detail information are available to all Sweep Services customers. Net Asset Value (NAV): Each Fund seeks to maintain share value at $1; however, there can be no assurance that this objective will be met. Prospectus: The prospectuses for the Funds contain important disclosures about the Fund in which your money is invested. It must be provided to each cus- tomer investing in the Fund. The prospectus may be changed or supplemented from time to time. Relationship Manager: Your primary contact with Wells Fargo. Shareholder Materials: Periodic reports and other materials are provided to each shareholder of the Fund. These include the Fund's current prospectus, a semi-annual report, an annual report and proxy materials. continued on reverse side Wells Fargo Fast Then. Fast Now. www.wellsfargo.com 59 SWEEP SERVICES Glossary of Terms continued Shares Purchased: Shares purchased in the Fund are reflected as a credit to the Sweep Account. Shares Redeemed: Shares redeemed from the Fund are reflected as a debit to the Sweep Account. Sweep: The term "sweep" generally refers to an auto- matic transfer of funds from one account to another. When your WDDA balance exceeds the predeter- mined target balance, the term refers to the automatic movement of balances in excess of the target balance from your WDDA to your selected money market mutual fund. When your WDDA balance falls below the target balance, the term refers to the automatic transfer of funds from your Sweep Account to your WDDA. Shares of your chosen money market funds are redeemed up to the amount invested, and the proceeds of the redeemed shares are swept into the WDDA. Sweep Account: The term "Sweep Account" means the account in which the Stagecoach money market mutual fund shares purchased on your behalf are held. WDDA (Business Checking Account): The business demand deposit account that you use for .your day- to-day cash management activities. Collected balances above the predetermined target balance are transferred automatically from the WDDA to your Sweep Account. ()C,n CASH MANAGEMENT SWEEP SERVICES How Wells Fargo Sweep Services Work for You You Manage: • Collections • Borrowing and investments • Disbursements • Projected cash flow • Bank service charges Your Wholesale Demand Your Sweep Account Deposit Account C'WDDA'I Gives you: Works for you by: • Daily reporting through PC • Investing in one of three money Manager, Information Express market funds and InfoTouch access • Transferring funds to WDDA • Overdraft protection when balance falls below target • Monthly statements Reinvesting dividends into your WDDA or money market fund • On-line customer service • Delivering semi-annual share- holder reports • PC Manager InfoTouch Customer Service • Statements • Information Express 1-800-AT-WELLS 1-800-AT-WELLS • Fund reports • WellsNet Wells Fargo Fast Then. Fast Now. www.wellsfargo.com n INVESTMENT ADVISORY BOARD Meeting Date: TITLE: March 10, 1999 Month End Cash Report - February 1999 BACKGROUND: Correspondence & Written Material Item A This cash report is not a complete Treasury Report (exclude petty cash, deferred compensation and fiscal agent balances, ) but would report in a timely fashion selected cash balances. RECOMMENDATION: Information item only. ohn M. Falconer, Finance Director Q) O C O O LL (L) () U) r- O fl. rn cC c 0) E � � :U O 'D N J L j Z' Z N L 0 U 2 LL O N LID � O O I- � O N � N � :SS 00 ~ O O N N 0) p N � ti (O � L� NIto 4 O 00000 c 00000 \p LO L-0 ~0000 �OMopoMO L d �I�OI I`M (D 0cfl --I- NO N �O O ONC6oi,m M� (M cM M M co M , qi M , co LO LO U) (OOON L �� L C O C) O ~ (fl Ln Ln 0 0 O o (0M Er ,�(fl�000(0 O O � C0��O f� �O M 0)W �NNMLO M �(0 N N N N N 00 co 00 00c)p OMO CV (V ce)ti CVCf) O O (p � Co � � LO LO M 00 C)�It 0 NILvi 0 000 0O0 0O0 N M N d lt rn rn rn O O rn LL O O O O O .- 00 00 00 00) �cr) I-- U 00 OD dMti Co ti ti r` ti O _ 2) 0 00 0 LO ca2O O C)O O O O O O 0f4 N OO O O O O �(P j� Q N O > N m (0. C)CO (00 Co .� LL co O •-- C) C) M O nj 0) LO 07 LO 0) LO A O O I- O co O co O co `. 0 0 Ul O N 00 00 00 N LL 0 (Op q LO Ln LO U 3: co N N N N Oj N � M I` ti ti 0 0') LO LO CS4 00 O N N O N NqqT M (M �L LL U N ti� OHO O p Ln 0 ~ti 0 0 U OOO� U') CN — 0000 � 00 O .- O � N NM r- O �- Cl) f0 7 C U U LO N CO) Y 0 L6 ` c N 0 Oi U Q N N U \ (fl L N L N O N N + U (o O c L f- N i a) (o N oM (O c c co (a = E N coC m to c C c4 V- M N pp (0 c0 +r N U U) .-. () o rn Q � b -D X m m O CO M C)a) m -0 L L a) m c D) a) (a v .0 (D U H O c m Y M U C O E .0 0 E ? O O (� a`n)0 ia3��� �a a �0a)��=D O` >aD 0m ocAaaw Q Ua Q Li OzOu.Q ca ~-0Q >, c`OO Ca) .ONE •(ate "D'c EC O IL UC y Ua) m"� (D (D c 0E �- �0 COCOQ ai O y- M >- 0 rn OU a) (D > 7070 ~ � C U 7C a) m Qca) +- a) �O CO.- tea) a) .E a) ` LL ` c U Ec> 4O- to E U cm D C 0 Dr+ OO >a)"� C L -w (D O U c En OOcE D 00 NN E C0 (M-0 a �'0° �s H Q w OO a� CD NN4)t_ L :3.6., L a)O+'� &- aa) :3 U cr a) a) (ate .r"yam (DE U O tU HO N�(C C -E (D C Q U Qa)Q N ` O O— C- M ca c O = CL a p C L C Vi a) En N Q.. E r+ a)Q.w.N 0 O� U- LC OCD M0 CD C c E 0 U c �C CU (D � 0 � L to wp > comic -'(D CO U (aa)N �a)0 CD >, o30() EO N O c c d.-Lo 0fl.4-CU �Q o"O OQ. - a) �DN ` Q_ a) O co to C L a) H c f0 O .Q I ^` .� Q.LL O L CO (a Q. N a) 0) a) -0 .0 CD 0=0"'' 00 E N �a)O N 0 0 (C C` U a) v7 CN O8OQ c X pCD E CDaL �a)� 0 0 E � .C��r- 'v to 0)> ,0 Cam.-. (4 E 5 Q C ON V O (D O Q(D Ca " CoO QC x 0 D-0 4- D)LOE En a)W =E� — C U >+ X 3fnm0 .- CO -t� >, 7 f0 cEQ. 03�0- na°�i 0� o'X� Q. C ,0 C (� 0' — c L M E •r O (Da�c LL F- T � D �� F- U Q2 fn H M0)c S =c .N INVESTMENT ADVISORY BOARD Meeting Date: TITLE: March 10, 1999 Pooled Money Investment Board Report for December 1998 BACKGROUND: Correspondence & Written Material Item B The Pooled Money Investment Board Report for December, 1998 is included in the agenda packet. RECOMMENDATION: Receive & File ohn M. Falconer, Finance Director ITT F(7 �ta Aw I 7 STATE OF CALIFORNIA STATE TREASURER'S OFFICE POOLED MONEY EXVESTMENT BOARD REPORT DECEMBER 1998 Table of Contents SUNUMARY............................................................................................................1 SELECTEDINVESTMENT DATA....................................................................2 PORTFOLIOCOMPOSITION...........................................................................3 INVESTMENTTRANSACTIONS......................................................................4 TIMEDEPOSITS................................................................................................17 DEMANDBANK DEPOSITS............................................................................22 POOLED MONEY INVESTMENT BOARD DESIGNATION .....................23 POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF DECEMBER 1998 WITH DECEMBER 1997 (Dollars in Thousands) r. December x99� D`ber .I997 �liange~ s Average Daily Portfolio $32,1471,129 $271,7241,618 + 40422,511 Accrued Earnings $146,724 $1351,263 + 11,461 Effective Yield 5.374 5.744 - .37 Average Life --Month End (in days) 198 201 - 3 Total Security Transactions Amount $171,4951,319 $239303,772 - $51,8089453 Number 391 519 -128 Total Time Deposit Transactions Amount $648,750 $643,490 + 5,260 Number 59 56 + 3 Average Workday Investment Activity $8249730 $1,088,512 - $263,782 Prescribed Demand Account Balances For Services $226,490 $156,665 + $69,825 For Uncollected Funds $151,957 $1549167 - $2,210 —1— STATE TREASURER STATE OF CALIFORNIA INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED) Change in December 31,1998 Percent From Tyre of Security Amount Percent Previous Month Governments Bills $392079800 936 - .38 Bonds 0 0 0 Notes 49828,095 14.09 - .93 Strips 0 0 0 Total Governments $890359895 23A5 - 131 Federal Agency Coupons $393539787 9.78 + 1.06 Certificates of Deposit 49593,821 13A1 - 2.94 Bank Notes 1,9349980 5.65 - .08 Bankers Acceptances 659410 .19 - .01 Repurchases 0 0 0 Federal Agency Discount Notes 2,7919916 8.15 - .30 Time Deposits 19958,140 5.71 - .17 GNMA's 1$86 .01 0 Commercial Paper 79,9809737 23.29 + 6.05 FHLMC 19,332 .06 0 Corporate Bonds 1,6539637 4.83 Pooled Loans 2,1729056 6.34 + .60 OF Loans 0 0 - 3.07 Reversed Repurchases (297,895) (.87) - 1.16 Total, All Types $3492639802 100 Pooled Money Other Time Deposits TOTALS PMIA Monthly Average Effective Yield Year to Date Yield for Last Day of Month December 1998 Number Amount 391 $ 1794959319 38 $ 1519505 59 $ 6489750 488 $ 18,2959574 5.374 5560 November 1998 Number Amount 258 $ 119467,765 92 $ 2489785 45 $ 9379200 395 $ 1296539750 5.492 5599 —2— Commerci� Paper 23.29% Ban Accept 0.1' Pooled Money Investment Account Portfolio Composition $34.3 Billion Loans Reverses Corporate 6 34% -0.87% Rnnele CD's/BN's 19.06% uries .5% Time Deposits 5.71 % Mortgages 0.07% gencies 7.93% 12/31/98 0 Treasuries © Time Deposits ■ Mortgages ®Agencies ■ CD's/BN's ■ Bank Acceptances ■ Repurchases ® Commercial Paper ® Corporate Bonds 0 Loans ® Reverses -63- 12101/98 REDEMPTION BN B/A 5.600% 12/01/98 5.600 $21,000 176 21,000.00 5.637 BN Fst Chic 5.560% 12/01/98 5.560 50,000 183 1,413,166.67 5.637 BN Fst Chic 5.560% 12/01/98 5.560 50,000 183 1,413,166.67 5.637 CD Hypo 5.580% 12/01/98 5.570 50,000 183 1,415,778.32 5.647 CD Hypo 5.580% 12/01/98 5.570 50,000 183 1,415,778.32 5.647 CD Soc Gen 5.600% 12/01/98 5.595 50,000 .183 1,422,097.64 5.672 CD Soc Gen 5.600% 12/01/98 5.595 509000 183 1,422,097.64 5.647 CP GMAC 12/01/98 5.400 50,000 1 7,500.00 5.475 CP GMAC 12/01/98 5.400 50,000 1 7,500.00 5.475 CP Conagra 12/01/98 5.620 13,399 88 184,072.48 5.777 PURCHASE FFCB 4.750% 12/01 /99 4.908 50,000 CP FMCC 05/26/99 4.910 50,000 12/02198 RRS Treas Bill 02/04/99 4.425 50,000 Treas Bill 02/04/99 4.425 50,000 Treas Bill 02/04/99 4.425 50,000 Treas Bill 02/04/99 4.425 50,000 REDEMPTION CD Svenska 5.590% 12/02/98 5.570 50,000 120 928,394.10 5.647 CD Svenska 5.590% 12/02/98 5.570 50,000 120 928,394.10 5.647 CD ANZ 5.630% 12/02/98 5.620 20,000 180 562,027.33 5.698 CD NationsBk 5.610% 12/02/98 5.610 50,000 183 1,425,875.00 5.687 CD NationsBk 5.610% 12/02/98 5.610 50,000 183 1,425,875.00 5.687 CP Conagra 12/02/98 5.500 24,470 2 7,476.94 5.578 CP GECC 12/02/98 5.110 50,000 34 241,305.56 5.206 CP GECC 12/02/98 5.110 50,000 34 241,305.56 5.206 CP GECC 12/02/98 5.110 50,000 34 241,305.56 5.206 CP GECC 12/02/98 5.110 50,000 34 241,305.56 5.206 PURCHASE 91 CP FMCC 02/04/99 5.231 50,000 CP FMCC 02/04/99 5.231 50,000 CP FMCC 02/04/99 5.231 50,000 CP FMCC. 02/04/99 5.231 50,000 PURCHASE CD ABN Amro 4.940% 12/02/99 4.950 50,000 CD ABN Amro 4.940% 12/02/99 4.950 50,000 CP Conagra 02/05/99 5.920 22,388 CP Country 02/05/99 5.300 35,000 —4— 12102198 PURCHASE CP UB Calif 05/26/99 5.000 50,000 CP UB Calif 05/26/99 5.000, 50,000 12103/98 REDEMPTION CD NationsBk 5.610% 12J03/98 5.610 50,000 � � 1,6�66.67 5.699433,666.67 5.699 50,00 CD NationsBk 5.610% 12/03/98 5.610 PURCHASE CP Comnwealth 12/04/98 5.050 30,000 CP Amer Exp 12/04/98 4.600 45,000 CP Amer Exp 12/04/98 4.600 50,000 CP UB Calif 05/26/99 4.920 50,000 PURCHASE d Disc Note FNMA 01/08/99 4.650 2,620 Disc Note FNMA 01/08/99 4.650 50,000 Disc Note FNMA 01/08/99 4.650 50,000 12M4/98 REDEMPTION CP Comnwealth 12/04/98 5.050 30,000 1 1 4,208.33 5,750.00 5.120 4.664 CP Amer Exp 12/04/98 12/04/98 4.600 4.600 45,000 50,000 1 6,388.89 4.664 CP CP Amer Exp Heller 12/04/98 5.250 50,000 4 29,166.67 5.326 CP Merrill 12/04/98 5.200 50,000 4 28,888.89 5.275 CP Merrill 12/04/98 5.200 50,000 4 9 28,888.89 65,625.00 5.275 5.329 CP Heller 12/04/98 5.250 50,000 SALE s1 Disc Note FNMA 01/08/99 '4.650 2,620 1 1 329.37 6,293.65 4.714 4.714 Disc Note FNMA 01/08/99 10/08/99 4.650 4.650 50,000 50,000 1 6,293.65 4.714 .Disc Note FNMA PURCHASE FNMA 5.000% 12/04/00 5.000 25,000 FNMA 5.000% 12/04/00 5.000 50,000 CP FMCC 06/02/99 4.830 20,000 CP Hertz 06/02/99 4.920 30,000 Disc Note FNMA 06/10/99 4.740 50,000 Disc Note FNMA 06/10/99 4.740 50,000 Disc Note FNMA 06/30/99 4.740 50,000 Disc Note FNMA 06/30/99 4.740 50,000 —5— 12/07/98 REDEMPTION CD ANZ CD ANZ MTN GMAC PURCHASE FHLB FHLB BN NationsBk CP GECC Cp GECC CP GECC Cp GECC Disc Note FNMA Disc Note FNMA PURCHASE 91 Treas Note Trees Note 12108/98 REDEMPTION CD CommerzBk CP GECC CP GECC CP GECC CP GECC CP Heller CP Heller CID Enron CP Enron CP GMAC CP GMAC CP SRAC SALE y/ Trees Note Trees Note PURCHASE CP Heller 5.620% 12/07/98 5.610 50,000 182 2,458.06 5.687 5.620% 12/07/98 5.610 50,000 182 2,458.06 5.687 6.200% 12/07/98 5.920 9,200 418 22,182.22 5.920 ' 4.935% 12/07/00 4.877 15,000 4.935% 12/07/00 4.877 50,000 4.900% 12/07/99 4.900 50,000 12/08/98 4.750 50,000 12/08/98 4.750 50,000 12/08/98 4.750 50,000 12/08/98 4.750 50,000 11 /19/99 4.550 50,000 11 /19/99 4.550 50,000 5.875% 07/31/99 4.750 26,555 6.125% 12/31 /01 4.750 36,458 5.520% 12/08/98 5.400 25,000 85 319,128.73 5.480 12/08/98 4.750 50,000 1 6,597.22 4.816 12/08/98 4.750 50,000 1 6,597.22 4.816 12/08/98 4.750 50,000 1 6,597.22 4.816 12/08/98 4.750 50,000 1 6,597.22 4.816 12/08/98 5.250 50,000 13 94,791.67 5.333 12/08/98 5.500 50,000 29 221,527.78 5.601 12/08/98 5.570 5,000 40 30,944.44 5.682 12/08/98 5.570 50,000 40 309,444.44 5.682 12/08/98 5.100 50,000 40 283,333.33 5.200 12/08/98 5.100 50,000 40 283,333.33 5.200 12/08/98 5.400 50,000 85 637,500.00 5.545 5.875% 07/31/99 4.750 26,555 1 3,527.40 .4.815 6.125% 12/31 /01 4.750 36,458 1 5,048.99 4.815 02/26/99 5.400 50,000 0 12/09198 REDEMPTION CP GMAC 12/09/98 5.100 50,000 41 2901416.67 5.201 CP JP Morgan 12/09/98 5.480 50,000 169 1,286,277.78 5.702 CP JP Morgan 12/09/98 5.480 50,000 169 1,286,277.78 5.702 MTN Transam 5.740% 12/09/98 6.559 21,600 866 3,320,062.00 6.595 NO PURCHASES 12/10/98 SALE y/ CD Westpac Bk 5.110% 12/10/98 5.090 50,000 44 311,063.11 5.160 CP FMCC 12/10/98 5.110 50,000 27 191,625.00 5.200 CP FMCC 12/10/98 5.110 50,000 27 191,625.00 5.200 CP Morg Stan 12/10/98 5.020 50,000 50 348,611.11 5.125 CP Morg Stan 12/10/98 5.020 50,000 50 348,611.11 5.125 CP Morg Stan 12/10/98 5.020 50,000 50 348,611.11 5.125 CP GECC 12/10/98 5.320 50,000 83 613,277.78 5.460 Disc Note FHLMC 12/10/98 5.250 50,000 78 568,750.00 5.384 Disc Note FHLMC 12/10/98 5.250 50,000 78 568,750.00 5.384 Disc Note FNMA 12/10/98 5.250 50,000 78 568,750.00 5.384 Disc Note FNMA 12/10/98 5.250 50,000 78 568,750.00 5.384 REDEMPTION CP JP Morgan 12/10/98 5.480 50,000 170 1,293,888.89 5.703 CP JP Morgan 12/10/98 5.480 50,000 170 1,293,888.89 5.703 Treas Bill 12/10/98 5.093 50,000 339 2,397,718.75 5.423 Treas Bill 12/10/98 5.243 50,000 346 2,519,312.50 5.597 Treas Bill 12/10/98 5.243 50,000 346 2,519,312.50 5.597 Treas Bill 12/10/98 5.243 50,000 346 2,519,312.50 5.597 Treas Bill 12/10/98 5.235 50,000 351 2,552,062.50 5.593 Treas Bill 12/10/98 5.235 50,000 351 2,552,062.50 5.593 Treas Bill 12/10/98 5.238 50,000 351 2,553,281.25 5.596 Treas Bill 12/10/98 5.238 50,000 351 2,553,281.25 5.596 Treas Bill 12/10/98 5.235 50,000 352 2,559,333.33 5.594 Treas Bill 12/10/98 5.193 50,000 358 2,581,826.39 5.551 Trees Bill 12/10/98 5:193 50,000 358 2,581,826.39 5.551 RRP Treas Bill 12/10/98. 4.530 50,000 83 (516,829.59) -4.576 Treas Bill 12/10/98 4.660 50,000 78 (498,522.92) -5.923 Treas Bill 12/10/98 4.660 50,000 78 (498,522.92) -5.923 Treas Bill 12/10/98 4.660 50,000 78 (499,785.00) -4.726 Treas Bill 12/10/98 4.660 50,000 78 (499,785,00) -4.726 Treas Bill 12/10/98 3.600 50,000 50 (248,125.00) -5.516 Treas Bill 12/10/98 3.600 50,000 50 (248,125.00) -5.516 Treas Bill 12/10/98 3.600 50,000 50 (248,125.00) -5.516 Treas B111 12/10/98 3.420 50,000 44 (208,138.92) -3.431 Treas Bill 12/10/98 3.630 50,000 27 (135,757.46) -3.659 —7— 12/10198 RRP Treas Bill PURCHASE BN NabonsBk CD Rabo CD Bayer Ver CD Bayer Ver CP GECC CP GECC CP GECC CP GECC CP SRAC Treas Bill 12/11/98 REDEMPTION CD ANZ CD ANZ CP GECC CP GECC CP GECC CP GECC PURCHASE FNMA FNMA CD BNParis CD BNParis CP GECC CP GECC 12/14/98 REDEMPTION CD Soc Gen CD Soc Gen PURCHASE MTN World MTN World MTN World MTN World MTN World CP Bear CP Bear CP GECC 12/10/98 3.630 50,000 4.960% 06/09/99 4.960 50,000 4.960% 05/20/99 4.970 30,000 4.930% 06/08/99 4.920 50,000 4.930% 06/08/99 4.920 50,000 12/11/98 4.750 50,000 12/11/98 4.750 50,000 12/11/98 4.750 50,000 12/11/98 4.750 50,000 03/01/99 5.070 50,000 12/09/99 4.240 50,000 27 (135,757.46) -3.659 5.580% 12/11/98 5.570 50,000 179 1,384,830.89 5.647 5.580% 12/11/98 5.570 50,000 179. 1,384,830.89 5.647 12/11/98 4.750 50,000 1 6,597.22. 4.816 12/11/98 4.750 50,000 1 6,597.22 4.816 12/11/98 4.750 50,000 1 6,597.22 4.816 12/11/98 4.750 50,000 1 6,597.22 4.816 4.720% 12/11/00 4.840 50,000 4.720% 12/11 /00 4.840 50,000 5.030% 04/13/99 5.020 50,000 5.030% 04/13/99 5.020 50,000. 03/02/99 5.050 25,000 03/02/99 5.050 50,000 5.600% 12/14/98 5.590 25,000 181 5.600% 12/14/98 5.590 50,000 181 8.040% 04/01 /00 5.030 10,000 8.060% 04/01 /00 5.030 5,000 8.850% 12/15/00 4.920 2,000 7.750% 09/15/99 5.000 5,500 8.980% 02/15/00 5.000 5,000 03/02/99 5.180 50,000 03/02/99 5.180 50,000 03/02/99 5.070 50,000 702,666.31 5.667 1,405,332.61 5.667 —8- 12114/98 PURCHASE CP GECC 03/02/99 5.070 50,000 CP GECC 03/03/99 5.070 50,000 CP GECC 03/03/99 5.070 50,000 CP Bear 03/08/99 5.140 50,000 CP Bear 03/08/99 5.140 50,000 PURCHASE y/ Treas Bond 13.125% 05/15/01 5.300 22,148 Treas Note 6.875% 08/31 /99 5.300 24,389 Treas Note 6.375% 05/15/00 5.300 23,844 12115/98 REDEMPTION CB FMCC 5.625% 12/15/98 5.949 10,525 726 1,240,844.87 5.963 CB FMCC 5.625% 12/15/98 5.760 36,347 1091 6,238,190.18 5.763 CD B/A 5.580% 12/15/98 5.580 50,000 182 1,410,500.00 5.657 CD B/A 5.580% 12/15/98 5.580 50,000 182 1,410,500.00 5.657 MTN W/F 10.200% 12/15/98 6.050 7,500 774 1,011 , 800.00 6.184 SALE y/ Treas Bond 13.125% 05/15/01 5.300 22,148 1 3,853.69 5.373 Treas Note 6.875% 08/31 /99 5.300 24,389 1 3,641.10 5.373 Treas Note 6.375% 05/15/00 5.300 23,844 1 3,546.88 5.373 PURCHASE - FHLB 4.900% 12/01/99 4.800 50,000 FHLB 4.900% 12/01/99 4.800 50,000 CP GECC 03/02/99 5.070 50,000 CP GECC 03/02/99 5.070 50,000 CP GECC 06/11/99 4.820 50,000 CP GECC 06/11/99 4.820 50,000 CD Nova Scot 4.940% 06/15/99 4.940 50,000 CD Bayer Lnds 4.920% 06/14/99 4.915 50,000 CD Bayer Lnds 4.920% 06/14/99 4.915 50,000 Treas Bill 12/09/99 4.270 50,000 Treas Bill 12/09/99 4.270 50,000 Treas Bill 12/09/99 4.270 50,000 Treas Bill, 12/09/99 4.270 50,000 CP Household 12/16/98 5.350 20,000 CP Assoc 02/26/99 5.050 50,000 CP Assoc 02/26/99 5.050 50,000 Treas Bill 12/09/99 4.270 60,000 Treas Bill 12/09/99 4.270 50,000 'm 12/16198 REDEMPTION CP CD MTN MTN PURCHASE CP CP CP CP CP CD CD CD CD CD CD CP CP I Household .12/16/98 5.350 20,000 1 2,972.22 5.425 WestDeut 5.580% 12/16/98 5.580 50,000 176 1,364,000.00 5.657 GMAC 6.000% 12/16/98 5.970 25,000 506 2,062,000.00 5.970 GMAC 6.000% 12/16/98 5.970 25,000 509 2,074,250.00 5.970 r GECC GECC GECC GECC SRAC Midland Midland Bayer Ver Bayer Ver Bayer Ver UBS GECC GECC 12/17/98 REDEMPTION CD Toronto FNMA PURCHASE 03/01 /99 03/01 /99 03/04/99 03/04/99 02/26/99 4.960% 06/14/99 4.960% 06/14/99 5.430% 01/08/99 5.430% 01/08/99 4.920% 06/14/99 5.705% 07/02/99 01/08/99 01/08/99 5.610% 12/17/98 5.770% 12/17/98 5.070 5.070 5.070 5.070 5.090 4.950 4.950 5.670 5.670 4.910 4.940 5.430 5.430 5.590 5.800 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 7,000 50,000 25,000 50,000 50,000 50,000 50,000 CP GECC 12/18/98 4.930 50,000 CP GECC 12/18/98 4.930 50,000 CP Amer Exp 12/22/98 4.820 50,000 CP Amer Exp 12/22/98 4.820 50,000 CP Amer Exp 12/22/98 4.820 50,000 CP Amer Exp 12/22/98 4.820 50,000 CP Household 12/29/98 4.850 50,000 CP Household 12/29/98 4.850 50,000 CP Household 12/30/98 4.850 50,000 CP Household 12/30/98 4.850 50,000 CP Heller 01/03/99 5.650 5,000 CP' Heller 01/03/99 5.650 5,000 CP Heller 01/03/99 5.650 5,000 CP GMAC 02/26/99 5.000 50,000 CP GMAC 02/26/99 5.000 50,000 CP GMAC 02/26/99 5.000 50,000 CP GMAC 02/26/99 5.000 50,000 CP SRAC 03/29/99 5.000 50,000 CP Assoc 03/29/99 5.000 50,000 CP Assoc 03/29/99 5.000 50,000 CP Amer Exp 03/02/99 5.000 50,000 183 1,420,932.12 5.667 364 2,891,486.11 5.800 —10— 12117/98 PURCHASE CID Amer Exp 03/02/99 5.000 50,000 CP Amer Exp 03/02/99 5.000 50,000 12/18/98 REDEMPTION ` BN B/A 5.600% 12/18/98 5.600 50,000 182 1,415,555.56 5.677 BN B/A 5.600% 12/18/98 5.600 50,000 182 1,415,555.56 5.677 CD Toronto 5.610% 12/18/98 5.600 50,000 183 1,423,403.68 5.677 CP GECC 12/18/98 4.930 50,000 1 6,847.22 4.999 CID GECC 12/18/98 4.930 50,000. 1 6,847.22 4.999 PURCHASE CB (FR) FMCC 5.350% 08/27/01 5.219 50,000 FNMA 4.820% 12/18/00 4.875 50,000 FNMA 4.820% 12/18/00 4.875 50,000 CP GECC 03/10/99 5.080 50,000 CP GECC 03/10/99 5.080 50,000 CP GECC 12/24/98 4.850 50,000 CP GECC 12/24/98 4.850 50,000 12/21/98 NO REDEMPTIONS PURCHASE CD Barclays 5.900% 01 /04/99 5.850 50,000 CD Svenska 5.430% 01/05/99 6.100 10,000 CD Svenska 5.430% 01 /05199 6.100 50,000 CD Svenska 5.430% 01 /05/99 6.100 50,000 CP Amer Exp 12/29/98 4.850 20,000 CP Amer Exp 12/29/98 4.850 50,000 CP Amer Exp 12/29/98 4.850 50,000 Treas Bill 12/09/99 4.320 50,000 Treas Bill 12/09/99 4.320 50,000 121=8 RRS Treas Bill 02/04/99 4.490 50,000 Treas Bill 02/04/99 4.490 50,000 REDEMPTION CP Amer Exp 12/22/98 4.820 50,000 5 33,472.22 4.890 CP Amer Exp 12/22/98 4.820 50,000 5 33,472.22 4.890 CP Amer Exp 12/22/98 4.820 50,000 5 33,472.22 4.890 CP Amer Exp 12/22/98 4.820 50,000 5 33,472.22 4.890 —11— 12122198 PURCHASE g/ CD BNParis 5.420% 02/04/99 5A10 50,000 CD BNParis 5.420% 02/04/99 5.410 50,000 PURCHASE MTN FNMA 4.830% 12/15/00 4.830 50,000 Cp Amer Exp 01/04/99 5.850 30,000 CP Amer Exp 01/04/99 5.850 50,000 12/23198 NO REDEMPTIONS PURCHASE MTN (FR) Chase 5.428% 12/22/00 5.428 50,000 BN Fst Chic 4.950% 06/30/99 4.950 50,000 BN Fst Chic 4.950% 06/30/99 4.950 50,000 CD Bayer Lnds 4.960% 06/21 /99 4.950 50,000 CD Bayer Lnds 4.960% 06/21 /99 4.950 50,000 CP Heller 01/04/99 5.750 50,000 CP GECC 03/08/99 5.070 40,000 CP GECC 03/08/99 5.070 50,000 CP GECC 03/08/99 5.070 50,000 CP GECC 03/08/99 5.070 50,000 CP GECC 03/08/99 5.070 50,000 Treas Bill 12/09/99 4.365 50,000 Treas Bill 12/09/99 4.365 50,000 Treas Note 4.625% 11 /30/00 4.602 50,000 Treas Note 4.625% 11 /30/00 4.602 50,000 Treas Note 4.625% 11 /30/00 4.602 50,000 Treas Note 4.625% 11/30/00 4.602 50,000 12IMS REDEMPTION CP GECC 12/24/98 4.850 50,000 6 40,416.67 4.921 CP GECC 12/24/98 4.850 50,000 6 40,416.67 4.921 MTN (FR) W/F 5.584% 12/24/98 5.719 50,000 456 3,560,756.32 5.704 MTN (FR) W/F 5.584% 12/24/98 5.719 50,000 456 3,560,756.32 5.704 NO PURCHASES 12/28/88 REDEMPTION MTN Chrysler 8.440% 12/28/98 6.470 15,000 984 2,690,566.67 6.470 —12— 12/28/98 PURCHASE FHLB 4.905% 12/28/00 4.960 50,000 CD Fst Chic 5.000% 05/28/99 5.000 50,000 CP GECC 12/29/98 5.100 50,000 CP GECC 12/29/98 5.100 50,000 CP GECC 12/29/98 5.100 50,000 Cp GECC 12/29/98 5.100 50,000 CP GMAC 12/29/98 5.100 50,000 CP GMAC 12/29/98 5.100 50,000 CP GMAC 12/29/98 5.100 50,000 CP GMAC 12/29/98 5.100 50,000 CP Household 01 /04/99 6.050 50,000 Cp Household 01 /04/99 6.050 50,000 CP Amer Exp 01 /11 /99 6.000 5,000 CP Amer Exp 01 /11 /99 6.000 50,000 Cp Amer Exp 01 /11 /99 6.000 50,000 CP Amer Exp 01 /11 /99 6.000 50,000 CP Amer Exp 01 /11 /99 6.000 50,000 Cp GECC- 05/26/99 4.960 50,000 CP GECC 05/26/99 4.960 50,000 Treas Bill 12/09/99 4.465 50,000 Treas Bill 12/09/99 4.465 50,000 12/29/98 REDEMPTION BN Fst Chic 5.130% 12/29/98 5.130 25,000 91 324,187.50 5.201 BN Fst Chic 5.130% 12/29/98 5.130 50,000 91 648,375.00 5.201 CD Barclays 5.200% 12/29/98 5.200 50,000 89 642,777.78 5.272 CD Barclays 5.200% 12/29/98 5.200 50,000 89 642,777.78 5.272 CD Deutsche 5.210% 12/29/98 5.210 50,000 89 644,013.89 5.282 CD Deutsche 5.210% 12129/98 5.210 50,000 89 644,013.89 5.282 CD ABN Amro 5.140% 12/29/98 5.130 50,000 91 648,391.18 5.201 CD ABN Amro 5.140% 12/29/98 5.130 50,000 91 648,391.18 5.201 CD Cr Suisse 5.180% 12/29/98 5.160 50,000 91 652,199.21 5.231 CD Cr Suisse 5.180% 12/29/98 5.160 50,000 91 652,199.21 5.231 CD CommerzBk 5.590% 12/29/98 5.580 30,000 144 670,744.80 5.667 CD UB Calif 5.630% 12/29/98 5.630 50,000 180 1,407,500.00 5.708 CD U/B Calif 5.630% 12/29/98 5.630 50,000 180 1,407,500.00 5.708 CD Toronto 5.610% 12/29/98 5.600 50,000 193 1,501,189.25 5.677 CD Toronto 5.610% 12/29/98 5.600 50,000 193 1,501,189.25 5.677 CP GECC 12/29/98 5.100 50,000 1 7,083.33 5.171 CP GECC 12/29/98 5.100 50,000 1 7,083.33 5.171 CP GECC 12/29/98 5.100 50,000 1 7,083.33 5.171 CP GECC 12/29/98 5.100 509000 1 79083.33 5.171 CP GMAC 12/29/98 5.100 50,000 1 7,083.33 5.171 CP GMAC 12/29/98 5.100 50,000 1 7,083.33 5.171 CP GMAC 12/29/98 5.100 50,000 1 7,083.33 5.171 CP GMAC 12/29/98 5.100 50,000 1 7,083.33 5.171 CP Amer Exp 12/29/98 4.850 ' 20,000 8 21,555.56 4.922 CP Amer Exp 12/29/98 4.850 50,000 8 53,888.89 4.922 —13— 12128M REDEMPTION CP Amer Exp CP Household CP Household PURCHASE CP GECC CP GECC Treas Note Treas _ Note Treas Note Treas Note 12/30/98 REDEMPTION CP GECC CP GECC CP Household CP Household MTN FMCC MTN GMAC MTN GMAC MTN FMCC PURCHASE CD CIBC CD CIBC CP FMCC CP FMCC CP GECC CP GECC CP Assoc CP GECC CP GECC SBA (FR) 12131/98 SALE q/ CD Westdeut CD Wachovia 12/29/98 4.850 50,000 8 53,888.89 4.922 12/29/98 4.850 50,000 12 80,833.33 4.925 12/29/98 4.850 50,000 12 80,833.33 4.925 12/30/98 5.060 50,000 12/30/98 5.060 50,000 4.625% 11 /30/00 4.709 50,000 4.625% 11 /30/00 4.709 50,000 4.625% 11 /30/00 4.711 50,000 4.625% 11 /30/00 4.711 50,000 12/30/98 5.060 50,000 1 7,027.78 5.131 12/30/98 5.060 50,000 1 7,027.78 5.131 12/30/98 4.850 50,000 13 87,569.44 4.925 12/30/98 4.850 50,000 13 87;569.44 4.925 8.450% 12/30/98 5.980 10,915 749 1,379,871.27 5.980 5.950% 12/30/98 5.480 10,000 1062 1,607,311.11 5.480 6.000% 12/30/98 5.480 20,000 1062 3,184,661.11 5.480 8.450% 12/30/98 5.790 9,000 1106 1,646,615.00 5.790 5.250% 01/27/99 5.250 50,000 5.250% 01 /27/99 5.250 50,000 01 /04/99 5.560 15,000 01 /04199 5.560 50,000 01 /04/99 5.600 50,000 01 /04/99 5.600 50,000 02/26/99 4.930 25,000 03/26/99 4.950 50,000 03/26/99 4.950 50,000 5.625% 12/25/23 5.625 10,136 5.090% 12/31 /98 5.090 50,000 45 5.100% 1-2/31/98 5.090 50,000 45 318,125.00 5.160 318,128.95 5.160 —14- 12/31/98 REDEMPTION Treas Note Treas Note Treas Note Treas Note Treas Note Treas Note Treas Note Treas Note RRP Treas Note Treas Note PURCHASE SBA (FR) BN Fst Chic BN Fst Chic BN Fst Chic BN Fst Chic CP Amer Exp CP Amer Exp CP Amer Exp CP Amer Exp CP FMCC CP FMCC CP' FMCC CP FMCC 5.125% 12/31 /98 5.479 20,000 360 5.125% 12131 /98 5.479 50,000 360 5.750% 12/31 /98 6.049 50,000 720 5.750% 12/31 /98 6.049 50,000 720 5.750% 12/31 /98 5.948 50,000 724 5.750% 12/31 /98 5.850 50,000 730 5.750% 12/31 /98 5.800 50,000 730 5.750% 12/31 /98 5.000 50,000 730 5.7500/6 12/31 /98 3.890 50,000 5.750% 12/31 /98 3.890 50,000 5.625% 01 /25/24 5.625 7,900 4.910% 03/29/99 4.910 50,000 4.910%. 03/29/99 4.910 50,000 4.910% 03/31 /99 4.910 50,000 4.910% 03/31/99 4.910 50,000 02/26/99 4.800 45,000 02/26/99 4.800 50,000 02/26/99 4.800 50,000 02/26/99 4.800 50,000 03/03/99 4.790 50,000 03/03/99 4.790 50,000 03/05/99 4.790 50,000 03/05/99 4.790 50,000 45 45 1,0789030.04 5.483 2,695,075.10 5.483 5,945,970.73 6.061 5,945,970.73 6.061 5,885,941.82 5.956 5,843,000.00 5.853 5,796,500.00 5.801 5,796,500.00 5.801 (248,911.38) -3.944 (248,911.38) -3.944 —15— a/ The abbreviations indicate the type of security purchased or sold; i.e., (U.S.) Bills, Bonds, Notes, Debentures, Discount Notes, and Participation Certificates: Federal National Mortgage Association (FNMA), Farmers Home Administration Notes (FHA), Student Loan Marketing Association (SLMA), Small Business Association (SBA), Negotiable Certificates of Deposit (CD), Negotiable Certificates of Deposit Floating Rate (CD FR), Export Import Notes (EXIM), Bankers Acceptances (BA), Commercial Paper (CP), Government National Mortgage Association (GNMA), Federal Home Loan Bank Notes (FMB), Federal Land Bank Bonds (FLB), Federal Home Loan Mortgage Corporation Obligation (FSLMC PC) & (FHLMC GMC), Federal Farm Credit Bank Bonds (FFCB), Federal Farm Credit Discount Notes (FTC), 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. c/ Repurchase Agreement. di Par amount of securites purchased, sold, or redeemed. it Securities were purchased and sold as of the same date. f/ Repurchase Agreement against Reverse Repurchase Agreement. g/ Outright purchase against Reverse Repurchase Agreement. hi Security "SWAP" transactions. i/ Buy back agreement. RRS Reverse Repurchase Agreement. RRP Termination of Reverse Repurchase Agreement. —16— NAME ALHAMB East West Bank East West Bank East West Bank East West Bank East West Bank REVERT V HILLS City National Bank City National Bank City National Bank City National Bank CHICO North State National Bank North State National Bank Tri Counties Bank North State National Bank North State National Bank North State National Bank Tri Counties Bank Tri Counties Bank Tri Counties Bank FRESNO United Security Bank GLENDeLE Glendale Federal Bank Glendale Federal Bank INGLEWOOD Imperial Bank Imperial Bank Imperial Bank Imperial Bank Imperial Bank Imperial Bank 09/16/98 4.790 12,000,000.00 01/19/99 10/07/98 4.170 35,000,000.00 01 /06/99 10/15/98 4.170 15,000,000.00 01 /14/99 11 /12/98 4.570 38,000,000.00 02/11 /99 12/31 /98 4.590 8,000,000.00 04/01 /99 02/18/98 5.270 20,000,000.00 02/18/99 07/29/98 5.230 10,000,000.00 01 /27/99 09/16/98 4.930 20,000,000.00 03/15/99 11 /02198 4.360 25,000,000.00 05/04/99 08/24/98 5.190 1,000,000.00 08/24/99 10/06/98 4.260 1,000,000.00 01 /05/99 10/15/98 3.920 10,000,000.00 01 /14/99 10/06/98 4.380 1,000,000.00 04/05/99 12/01 /98 4.530 1,000,000.00 03/02/99 12/09/98 4.450 500,000.00 03/09/99 12/10/98 4.460 10,000,000.00 03/11 /99 12/17/98 4.540 10,000,000.00 03/18/99 12/21 /98 4.520 10,000,000.00 03/23/99 10/15/98 3.980 5,000,000.00 01 /14/99 10/15/98 4.050 100,000,000.00 01/14/99 10/07/98 4.360 5,000,000.00 04/06/99 07/08/98 5.230 25,000,000.00 01 /04/99 08/06/98 5.260 25,000,000.00 02/03/99 09/09/98 5.040 25,000,000.00 03/09/99 09/09/98 5.040 25,000,000.00 03/09/99 09/16/98 4.990 11,000,000.00 03/16/99 08/11 /98 5.230 209000,000.00 02/09/99 —17— INGLEWOOD (continued) Imperial Bank 10/07/98 4.200 25,000,000.00 01 /06/99 Imperial Bank 10/19/98 3.890 25,000,000.00 01 /20/99 Imperial Bank 10/01 /98 4.710 18,000,000.00 04/01 /99 Imperial Bank 11/05/98 4.530 25,000,000.00 02/23/99 Imperial Bank 11/04/98 4.530 15,000,000.00 03/24/99 Imperial Bank 11/06/98 4.530 20,000,000.00 04/15/99 Imperial Bank 12/09/98 4.560 25,000,000.00 04/26/99 Imperial Bank 12/30/98 4.700 18,000,000.00 05/12/99 LOS ANGE FS Community Bank 07/15/98 5.230 20,000,000.00 01 /11 /99 Community Bank 08/11/98 5.200 15,000,000.00 02/08/99 General Bank 09/24/98 4.800 15,000,000.00 01 /12/99 General Bank 10/01/98 4.460 15,000,000.00 01/07/99 Preferred Bank 10/15/98 3.980 3,000,000.00 01 /14/99 General Bank 10/20/98 3.860 25,000,000.00 02/08/99 General Bank 10/21/98 3.880 10,000,000.00 02/18/99 General Bank 11/06/98 4.550 28,000,000.00 02/17/99 Preferred Bank 11/20/98 4.460 4,000,000.00 02/19/99 Preferred Bank 11/24/98 4.460 2,000,000.00 02/23/99 Preferred Bank 12/16/98 4.520 9,000,000.00 03/17/99 Preferred Bank 12/23/98 4.500 9,000,000.00 03/24/99 Preferred Bank 12/29/98 4.600 3,000,000.00 03/30/99 Community Bank 12/15/98 4.570 10,000,000.00 06/14/99 Community Bank 12=98 4.540 5,000,000.00 06/22/99 POMONA Pomona First Federal S & L 09/10/98 5.300 10,000,000.00 03/09/99 Pomona First Federal S & L 11 /24/98 4.800 8,000,000.00 05/25/99 PETALUMA Bank of Petaluma 08/11 /98 5.160 1,000,000.00 02/09/99 River City Bank 07/20/98 5.270 5,000,000.00 01 /20/99 Sanwa Bank of California 07/29/98 5.230 5,000,000.00 01 /27/99 River City Bank 08/18/98 5.140 5,000,000.00 02/17/99 Sanwa Bank of California 08/17/98 5.170 50,000,000.00 02/17/99 Sanwa Bank of California 08/24/98 5.110 10,000,000.00 02/22/99 River City Bank 10/14/98 3.920 5,000,000.00 01 /13/99 Sanwa Bank of California 10/16/98 4.000 10,000,000.00 01 /15/99 Sanwa Bank of California 11/02/98 4.360 7,000,000.00 02/03/99 Union Bank of California 12/28/98 4.600 100,000,000.00 03/30/99 -18- SACRAMENTO (continued) Union Bank of California 10/29/98 4.310 50,000,000.00 01/27/99 Union Bank of California 11/02/98 4.450 100,000,000.00 02/02/99 Union Bank of California 11/17/98 4.550 50,000,000.00 02/17/99 SAN DIEGO San Diego First Bank 11/05/98 4.530 1,000,000.00 05/06/99 San Diego First Bank 12/01 /98 4.520 1,500,000.00 06/01 /99 San Diego First Bank 12/22/98 4.610 1,500,000.00 06/22/99 SAN FRANCISCO Bank of Canton California 01 /21 /98 5.230 5,000,000.00 . 01 /21 /99 Bank of Canton California 02/11/98 5.300 51000,000.00 02/11/99 Oceanic Bank 03/05/98 5.430 2,000,000.00 03/05/99 Bank of Canton California 06/09/98 5.410 5,000,000.00 03/05/99 Bank of the West 06/08/98 5.440 25,000,000.00 06/08/99 Bank of the West 07/31 /98 5.220 25,000,000.00 01 /28/99 Bank of the West 07/31/98 5.230 26,500,000.00 01/28/99 Bank of the West 07/13/98 5.350 25,000,000.00 07/13/99 Bank of Canton California 08/04/98 5.220 5,000,000.00 02/04/99 Bank of the West 08/26/98 5.110 27,000,000.00 02/24/99 Transpacific National Bank 09/16/98 5.100 800,000.00 03/15/99 Bank of the West 10/01 /98 4.460 14,000,000.00 01 /04/99 United Commercial Bank 10/02/98 4.400 20,000,000.00 01 /06/99 Bank of the West 10/20/98 3.740 25,000,000.00 01 /20/99 United Commercial Bank 11 /10/98 4.670 20,000,000.00 02/09/99 Bank of the West 11/19/98 4.440 37,000,000.00 02/18/99 Bank of the West 11 /24/98 4.530 25,000,000.00 02/23/99 Bank of the West 12/17/98 4.510 35,000,000.00 02/25/99 Bank of Canton California 12/01/98 4.540 5,000,000.00 03/02/99 Bank of Canton California 12/15/98 4.500 5,000,000.00 03/16/99 United Commercial Bank 12/22/98 4.590 20,000,000.00 03/23/99 California Federal Bank 12/29/98 4.750 3,000,000.00 03/31/99 Bank of Canton California 12/04/98 4.500 5,000,000.00 06/02/99 SAN LEANDRO Bay Bank of Commerce 10/07/98 4.180 1,000,000.00 01 /06/99 Bay Bank of Commerce LUIS OBISPO 10/07/98 4.180 4,000,000.00 01 /06/99 SAN First Bank of San Luis Obispo 10/06/98 4.270 1,000,000.00 10/05/99 First Bank of San Luis Obispo 10/28/98 4.090 1,000,000.00 01 /27/99 First Bank of San Luis Obispo 11/02/98 4.370 3,600,000.00 02/02/99 First Bank of San Luis Obispo 11 /12/98 4.580 2,000,000.00 02/10/99 -19- TIME DEPOSIT NAME DEPOSIT DATE YIELD PAR AMOUNT (Sl MATURITY D 8AN LUIS OBISPO (continued) First Bank of San Luis Obispo 11/24/98 4.540 2,500,000.00 02/23/99 Westamerica Bank 10/14/98 3.910 25,000,000.00 01 /13/99 Westamerica Bank 10/21 /98 3.740 25,000,000.00 01 /20/99 Westamerica Bank 10/22/98 3.740 25,000,000.00 01 /21 /99 Westamerica Bank 10/29/98 4.180 25,000,000.00 01 /27/99 Westamerica Bank 11/09/98 4.690 50,000,000.00 02/09/99 S N MATEO Boreal Bank and Trust 10/01 /98 5.080 95,000.00 04/01 /99 SANTA ANA Grand National Bank 06/30/98 5.300 95,000.00 01 /04/99 Grand National Bank 09/08/98 5.010 1,500,000'.00 03/09/99 Grand National Bank 10/15/98 3.990 2,000,000.00 01/14/99 Grand National Bank 10/15/98 4.180 1,000,000.00 10/15/99 Grand National Bank 12/08/98 4.510 1,500,000.00 03/09/99 SANTA BARBARA Santa Barbara Bank & Trust 10/06/98 4.270 5,000,000.00 01 /05/99 Santa Barbara Bank & Trust 10/08/98 4.270 10,000,000.00 01/07/99 Santa Barbara Bank & Trust 11/10/98 4.680 5,000,000.00 02/09/99 Santa Barbara Bank & Trust 12/15/98 4.520 5,000,000.00 03/16/99 Santa Barbara Bank & Trust 12/01/98 4.620 5,000,000.00 06/01/99 SANTA CRUZ Coast Commercial Bank 12/16/98 4.520 15,000,000.00 03/17/99 SHAS North Valley Bank ST NISLAUS 09/22/98 4.750 3,000,000.00 03/23/99 Oak Valley Community Bank 08/10/98 5.240 500,000.00 02/08/99 Oak Valley Community Bank 09/24/98 4.840 1,000,000.00 03/24/99 Oak Valley Community Bank 11/06/98 4.560 500,000.00 02/04/99 —20— TORRANCE South Bay Bank 07/20/98 5.310 1,000,000.00 01 /20/99 China Trust Bank (USA) 12/30/98 4.620 5,000,000.00 03/31/99 China Trust Bank (USA) 12/30/98 4.620 5,000,000.00 03/31 %99 South Bay Bank 12/15/98 4.640 2,000,000.00 06/15/99 China Trust Bank (USA) 10/28/98 4.190 15,000,000.00 01 /27/99 China Trust Bank (USA) 12/09/98 4.460 10,000,000.00 03/10/99 China Trust Bank (USA) 12/15/98 4.540 10,000,000.00 03/16/99 TUSTIN Sunwest Bank 07/20/98 5.260 1,000,000.00 01 /19/99 Sunwest Bank 10/01/98 4.460 500,000.00 01/06/99 Sunwest Bank 10/07/98 4.170 2,800,000.00 01 /06/99 VICTORVILLE Citizens Business Bank 07/09/98 5.330 10,000,000.00 02/08/99 Citizens Business Bank 08/06/98 5.290 5,000,000.00 03/09/99 Citizens Business Bank 09/23/98 4.810 10,000,000.00 03/23/99 Citizens Business Bank 10/06/98 4.180 5,000,000.00 01/05/99 Citizens Business Bank 10/08/98 4.360 10,000,000.00 04/07/99 Citizens Business Bank 12/16/98 4.570 10,000,000.00 06/16/99 WALNUT CREEK Bank of the West 05/15/98 5.450 10,000,000.00 05/13/99 Saratoga National Bank _ 09/28/98 4.660 5,000,000.00 04/01 /99 Bank of the West 09/28/98 4.600 20,000,000.00 04/01 /99 Saratoga National Bank 12/21/98 4.610 1,750,000.00 06/22/99 TOTAL TIME DEPOSITS AS OF DECEMBER 3191998 $1,95891409000.00 —21— DEMAND BANK DEPOSITS (000 omitted) DAILY BALANCES WARRANTS DECEMBER PER BANKS OUTSTANDING 1. $639,301 198259100 2. 2939,962 . 193419,944 3. 2869167 19,2241,810 4. 4039843 1,6611,845 5. 4039843 11,6619845 6. 4039842 19661,845 7. 177,956 197729266 8. 2629660 194519326 9. 2821,389 19405,317 10. 3429325 194879843 11. 4639680 193849,177 12. 463,680 1,384,177 13. 4631,680 1,384,177 14. 3299639 19177,560 15. 3639746 19185,007 16. 4209230 194179052 17. 396,102 1,5009,635 18. 6099476 1,5999808 19. 6099476 1,5599,808 20. 6099476 1,559,808 21. 2779599 1,1689871 22. 6609174 19170,182 23. 303,511 19156,291 24. 6699358 2,3139924 25. 669,358 293139924 26. 669,358 2,313,924 27. 6699,358 29,313,924 28. 2479,634 la50,630 29. 291P39 1,3449,841 30. 383,790 19186,388 31. 3429859 19722,882 A/ AVERAGE DOLLAR DAYS $432094 a/ The prescribed bank balance for December was $378,447,000.00. This consisted of $205,264,000.00 in compensating balances for services, $173,183,000.00 uncollected funds and a deduction of $21,226,000.00 for November delayed deposit credit. -22- DESIGNATION BY POOLED MONEY INVESTMENT BOARD OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS No. 1594 In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its meeting on December 16,1998, 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 $ 271,033,000 The active noninterest-bearing bank accounts designation constitutes a calendar month average balance. For purposes of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above amount provided that the balances computed by dividing the sum of daily balances of that calendar month by the number of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management 2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest - bearing deposits in banks and savings and loan associations as follows: Time Deposits in various Financial Institutions In Securities (sections 16MU Estimated From To Transactions (section I UW)' and 16=r Total (1) 12/14/98 12/18/98 $ 2,790,900,000 $ 31,439,510,000 $ 1,878,390,000 $ 33,317,900,000 (2) 12/21/98 12/25/98 $ 1,794,300,000 $ 33,233,810,000- $ 1,878,390,000 $ 35,112,200,000 (3) 12/28/98 01/01/99 $ (1,177,900,000) $ 32,055,910,000 $ 1,878,390,000 $ 33,934,300,000 (4) 01/04/99 01/08/99 $ 1,242,700,000 $ 33,298,610,000 $ 1,878,390,000 $ 35,177,000,000 (5) 01/11/99 01/15/99 $ 1,617,400,000 $ 34,916,010,000 ' $ 1,878,390,000 $ 36,794,400,000 (6) 01/18/99 01/22199 $ 633,600,000 $ 35,549,610,000 $ 1,878,390,000 $ 37,428,000,000 (7) 01/25/99 01/29/99 $ 329,700,000 $ 35,879,310,000 $ 1,878,390,000 $ 37,757,700,000 (8) 02/01/99 02105/99 $ 318,100,000 $ 36,197,410,000 $ 1,878,390,000 $ 38,075,800,000 (9) 02/08/99 02/12/99 $ (893,000,000) $ 35,304,410,000 $ 1,878,390,000 $ 37,182,800,000 (10) 02/15/99 02/19/99 $ 696,700,000 $ 36,001,110,000 $ 1,878,390,000 $ 37,879,500,000 From any of the amounts specifically designated above, not more than 30. percent in the aggregate may be invested in prime commercial paper under section 16430(e), Government Code. Additional amounts available in treasury trust account and in the Treasury from time to tune, 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 $ 271,033,000. Dated: December 16, 1998 *Government Code Memberzge,K== -23- INVESTMENT ADVISORY BOARD Meeting Date: TITLE: March 10, 1999 Local Agency Investment Fund (LAIF) Answer Book BACKGROUND: Correspondence & Written Material Item C Attached please find the updated LAIF Answer Book . The LAIF Answer Book update is reported annually to the Investment Advisory Board. That LAIF Answer Book (Attachment No. 1) replaces previous LAIF Answer Books. RECOMMENDATION: Receive and File ohn M. Falconer, Finance Director