1999 07 14 IABs
P.O. Box 1504
78-495 CALLE TAMPICO (760) 7 7 7 - 7 0 0 0
LA QUINTA, CALIFORNIA 92253 (TDD) (760) 777-1227
AGENDA
INVESTMENT ADVISORY BOARD
Study Session Room
78-495 Calle Tampico- La Quinta, CA 92253
July 14, 1999 - 5:30 P.M.
I CALL TO ORDER
a. Pledge of Allegiance
b. Roll Call
II APPOINTMENT OF OFFICERS
A. Appointment of Investment Advisory Board Chairperson
B. Appointment of Investment Advisory Board Vice -Chairperson
III PUBLIC COMMENT- (This is the time set aside for public comment on any matter not scheduled on the agenda.)
IV CONFIRMATION OF AGENDA
V CONSENT CALENDAR
Approval of Minutes of Meeting on June 9, 1999 for the Investment Advisory
Board.
VI BUSINESS SESSION
A. Transmittal of Treasury Report for May, 1999
B. Board Functions - Ordinance
C. FY 1999/2000 Meeting Schedule
VII CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report - June 1999
B. Pooled Money Investment Board Reports - April, 1999
C. Distribution of Investment Policies for Fiscal Year 1999/2000
VIII BOARD MEMBER ITEMS
IX ADJOURNMENT
INVESTMENT ADVISORY BOARD Business Session: A
Meeting Date: July 14, 1999
ITEM TITLE:
Transmittal of Treasury Report
for May 31, 1999
BACKGROUND:
Attached please find the Treasury Report for May 31, 1999.
RECOMMENDATION:
Review, Receive and File the Treasury Report for May 31, 1999.
4 IL71�
Jo n M. Falconer, Finance Director
01.
TO:
FROM:
SUBJECT:
DATE:
ce4tyl 4 4Q�.rw
MEMORANDUM
La Quinta City Council
John Falconer, Finance Director/Treasurer
Treasurer's Report for May 31, 1999
July 6, 1999
Attached is the Treasurer's Report for the month ending May 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 $1,436,240. due to the net effect of revenues in excess expenditures.
State Pool:
Increase of $2,500,020. 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 $7,013,860. due to the purchase of one T-Note, four Commercial Papers and monthly
adjustment in the amortized value of the investments.
Mutual Funds:
Decrease of $3,054,652. due to the purchase one T-Note and interest earned.
Total increase in cash balances $7,895,468.
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.
7
John M. Falconers
Finance Director/Treasurer
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CITY OF LA QUINTA
CITY
CITY RDA
RDA FA
BALANCE SHEET 0641199
FIXED
LONG TERM FIXED
LONG TERM FINANCING LONG TERM
GRAND
CITY ASSETS
DEBT RDA ASSETS
DEBT AUTHORITY DEBT
TOTAL
ASSETS:
'
POOLED CASH
3,925,712.12
11,270,957.41
(8,486.43)
15,188,183.10
LQRP INVESTMENT IN POOLED CASH
680.000.00
680,000.00
INVESTMENT T-BILLJNOTES 3 OTHER
26,000,000.00
26,000,000.00
AUTO MALL CASH
1,800,002.03
1,800,002.03
LQRP CASH
88,035.27
86,035.27
BOND REDEMPTION CASH
175,358.88
28.73
175,387.41
BOND RESERVE CASH
BOND PROJECT CASH
15,125,895.70
582.051.20
15,707,946.90
BOND ESCROW CASH
PETTY CASH
1,0000.00
1,000.00
ASH i INVESTMENT TOTAL 31,726,714.15
27,338,247.08
573,593.50
59,638,554.7I
INVESTMENT IN LAND HELD FOR RESALE
ACCOUNTS RECEIVABLE
$4,428.98
79,157.88
8,280,000.00 8,393,584.64
PREMIUMIDISCOUNT ON INVESTMENT
37,167.84
(81.473.46)
(510.00) (24,815.62)
LQRP-ACCOUNTS RECEIVABLE
41,919.78
41,919.78
INTEREST RECEIVABLE
142,965.80
142,955.80
LOANINOTES RECEIVABLE
129,362.49
2,528,987.78
2,658,330.25
DUE FROM OTHER AGENCIES
DUE FROM OTHER GOVERNMENTS
DUE FROM OTHER FUNDS
13,083.40
551,038.04
564,701.44
DUE FROM RDA
8,890,277.20
6,890,277.20
INTEREST ADVANCE -DUE FROM RDA
1,023,211.97
1,023,211.97
ADVANCES TO OTHER FUNDS
995,721.94
995,721.94
NSF CHECKS RECEIVABLE
2,776.68
2,776.68
ACCRUED REVENUE
833.40
833.40
TRAVEL ADVANCES
3,794.00
3,794.00
EMPLOYEE ADVANCES
PREPAID EXPENSES
RECEIVABLE TOTAL
9,150,402.46
3,283,399.00
8,259,490.00 20,693,291.48
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
3g,a—i100
GENERAL FIXED ASSETS
1,098,885.00 15,008,708.00 11,438,745.05
27,546,318.05
ACCUMULATED DEPRECIATION
(748,125.02) s.
(746.125.02)
AMOUNT AVAILABLE TO RETIRE LIT DEBT
3,395,117.03
3,395,117.03
AMOUNT TO BE PROVIDED FOR LIT DEBT
1,944,070.34
96,403,114.00
8,260,000.00 106,607,184.34
TOTAL OTHER ASSETS
352,739.98 15,008,708.00 1,944,070.34 11,438,745.05
99,798,231.03
8,260,000.00 136,802,494.40
TOTAL ASSETS
41.289.888.61 15,008,708.00 1,944,070.34 30,621,848.08 11,438,745.05
99,798,231.03 8,833 083.50
8,260,000.00 217,174,152.59
LIABILITY
ACCOUNTS PAYABLE
(0.02) 22,139.53
(504.08) 21,835.43
DUE TO OTHER AGENCIES
1,134,380.98
1,134,380.98
DUE TO OTHER FUNDS
995.721.94 551,038.04
13,663.40 1,560,423.38
INTEREST ADVANCE -DUE TO CITY
ACCRUED EXPENSES
PAYROLL LIABILITIES
108.490.33
106.490.33
STRONG MOTION INSTRUMENTS
3,441.21
3,441.21
FRINGE TOED LIZARD FEES
38,300.00
38,300.00
SUSPENSE
(8,108.33)
(6,106.33)
DUE TO THE CITY OF LA QUINTA
PAYABLES TOTAL
2,272,228.11 22,139.53 551,038.04
13,159.32 2,858,565.00
ENGINEERING TRUST DEPOSITS
58,224.09
58,224.09
SO. COAST AIR QUALITY DEPOSITS
ARTS IN PUBLIC PLACES DEPOSITS
468.835.20
466,835.20
LQRP DEPOSITS
15,595.99 15.595.99
DEVELOPER DEPOSITS
1,738,508.13
1,736,566.13
MISC. DEPOSITS
180,808.55
160,866.55
AGENCY FUND DEPOSITS
1 585 552.31
_ _ 1,565,552.31
TOTAL DEPOSITS
3,988,044.28
15,595.99 4,003,640.27
DEFERRED REVENUE
11,250.23
8,260,000.00 _ 8,271,250.23
OTHER LIABILITIES TOTAL
11,250.23
8,250,000.00 8,271,250.23
COMPENSATED ABSENCES PAYABLE
313,619.81
313,619.81
DUE TO THE CITY OF LA QUINTA
1.8011,311.00
9,713,490.38
11,321,801.38
DUE TO COUNTY OF RIVERSIDE
1201,591.90
12,601,591.90
DUE TO C.V. UNIFIED SCHOOL DIST.
10,058,148.75
10,068,148.75
DUE TO DESERT SANDS SCHOOL DIST.
BONDS PAYABLE
67,415 000.00
8,260,000.00 75,675,000.00
TOTAL LONG TERM DEBT
1,921,9W.81
99,798,231.03
8,260,000.00 109,980,16l.84
TOTAL LIABILITY 8,271,522.62
1,944,070.34 588,834.03
99,798,231.03
8,273,159.32 8,260,000.00 125,113,617.34
EQUITY -FUND BALANCE 34,998,145.99 15,006,708.00
30,055,012.03 11,438,745.05
559,924.18 92,060,535.25
TOTAL LIABILITY i EQUITY 41,289,008.61 15,000,708.00 1,944,070.34 30,621,648.06 11,438,745.05 99,798,231.03 8,833,083.50 8.260.000.00 217.174.152.59_-
11cl
INVESTMENT ADVISORY BOARD Business Session: B
Meeting Date: July 14, 1999
ITEM TITLE:
Review of the Board Municipal Code,
Chapter 2.70, Section 2.70.030 -
Board Functions
BACKGROUND:
At the May 12, 1999 Investment Advisory Board Meeting the Board requested that
the Municipal Code - Chapter 2.70, Section 2.70.030 - Board Functions be placed
on the agenda for review.
Attached find Chapter 2.70 of the Municipal Code.
RECOMMENDATION:
hn M. Falconer, Finance Director
2.70.010
Chapter 2.70
INVESTMENT ADVISORY BOARD
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.
A. Except as set out below, see Chapter 2.06 for general provisions.
B. The investment advisory board (the "board") is a standing board composed of seven 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.
C. Background in the investment field and/or related experience is preferred. Background information
will be requested and potential candidates must agree to a background check and verification.
D. 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 that have a bearing on the appropriateness of that member's service on the board.
Such matters may include, but are not limited to, changes in employment, changes in residence or changes
in clients. (Ord. 287 § 1 (part), 1996; Ord. 268 § 1, 1995; Ord. 222 (part), 1993)
2.70.020 Board meetings and compensation.
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. (Ord. 287 § 1 (part), 1996; Ord.
222 (part), 1993)
2.70.030 Board functions.
A. 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; (2) monitor
compliance .with existing investment policy and procedures; and (3) review and make recommendations concerning
investment policy and procedures, investment contracts, and investment consultants.
B. The board will report to city council after each meeting either in person or through correspondence
at a regular city council meeting. (Ord. 287 § 1 (part), 1996; Ord. 269 § 1, 1995: Ord. 222 (part), 1993)
(I.a Quinta 3-99) 42-2
SUGGESTED REVISION OF CITY ORDINANCE
Il4MTMENT ADVISORY BOARD FUNCTIONS
2.70.030 Board functions.
A. The principal functions of the Board are: (1) review at,least annually the City's Investment
Policy and recommend appropriate changes; (2) review monthly Treasury Report and note
compliance with the Investment Policy and adequacy of cash and investments for anticipated
obligations; (3) receive and consider other reports provided by the City Treasurer; (4) meet
with the independent auditor after completion of the annual audit of the City's financial
statements, and receive and consider the auditor's comments on auditing procedures, internal
controls, and findings for cash and investment activities; and (5) serve as a resource for the City
Treasurer on proposed investments, internal controls, use or change of financial institutions,
custodians, brokers and dealers, and other matters.
Long Version
2.70.030 Board functions.
A. The principal functions of the Board are:
(1) Review annually the City'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.
(2) 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 obligations.
(3) Receive and consider other reports provided by the City Treasurer, including the monthly
City Treasurer's Month End Cash Report and the State Treasurer's Pooled Money Investment
Report.
(4) Meet with the independent auditor after the completion of the annual audit of the City's
financial statements. Receive and consider 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 and consider the City Treasurer's response to any weaknesses or suggestions
for improvement to the controls over cash and investment activities mentioned by the independent
auditor.
(5) Serve as a resource for the City Treasurer 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, custodians, brokers and dealers, and other matters.
DJM 4/16199
VILTAWL�'
Investment Policy -- Review annually the City'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.
Treasury 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 obligations.
Other Reports -- Receive and consider other reports provided by the City Treasurer, including
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's financial statements. Receive and consider 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 and consider the City Treasurer's response to any
weaknesses or suggestions for improvement to the controls over cash and investment activities
mentioned by the independent auditor.
Resource -- Serve as a resource for the City Treasurer 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, custodians, brokers and dealers, and other matters.
DJM 4/16199
INVESTMENT ADVISORY BOARD MEETING BUSINESS SESSION: C
Meeting Date: July 14, 1999
ITEM TITLE
Meeting Schedule for Fiscal Year
1999/2000
BACKGROUND:
Attached find a list of meeting dates for Fiscal Year 1999/2000.
RECOMMENDATION:
Approve the meeting schedule of the Investment Advisory Board for Fiscal Year
1999/2000.
n M. Falconer, Finance Director
TO: Investment Advisory Board Members
FROM: John M. Falconer Finance Director
").e,
DATE: July 14, 1999
RE: Schedule of Investment Advisory Board Meeting Schedule
The City Ordinance specifies that the Investment Advisory Board will meet quarterly
unless the Board believes more frequent meetings are considered necessary. In the
past, the Board has met monthly except for the Month of August. Listed below are
meeting dates for the Boards review.
Monthly
July 14, 1999
August 11, 1999
September 8, 1999
October 13, 1999
November 10, 1999
December 8, 1999
January 12, 2000
February 9, 2000
March 8, 2000
April 12, 2000
May 10, 2000
June 14, 2000
Quarterly
September 8, 1999
December 8, 1999
March 8, 2000
June 14, 2000
Please consider the schedules for Fiscal Year 1999/2000 and give Staff direction.
INVESTMENT ADVISORY BOARD
Meeting Date: July 14, 1999
TITLE:
Month End Cash Report - June 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.
John M. Falco'her,l Finance Director
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INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
July 14, 1999
Pooled Money Investment Board Report
for April 1999
BACKGROUND:
Correspondence & Written
Material Item B
The Pooled Money Investment Board Report for April, 1999 is included in the
agenda packet.
RECOMMENDATION:
Receive & File
John M. Falconer, Finance Director
STATE OF CALIFORNIA
STATE TREASURER'S OFFICE
POOLED MONEY INVESTMENT BOARD REPORT
TABLE OF CONTENTS
SUMMARY.............:.............................................................1
SELECTED INVESTMENT DATA.............................................2
PORTFOLIO COMPOSITION...................................................3
INVESTMENT TRANSACTIONS...............................................4
TIME DEPOSITS..................................................................17
DEMAND BANK DEPOSITS...................................................22
POOLED MONEY INVESTMENT BOARD DESIGNATION .......... 23
POOLED MONEY INVESTMENT ACCOUNT
SUMMARY OF EWESTMENT DATA
A COMPARISON OF APRIL 1999 WITH APRIL 1998
(Dollars in Thousands)
nPRE. tn" apIM ins change
Average Daily Portfolio
$33,830,978
$29,141,554
+4,689,424
Accrued Earnings
$142,331
$135,861
+6,470
Effective Yield
5.119
5.672
-.553
Average Life --Month End (in days)
202
185
+17
Total Security Transactions
Amount
$18,360,308
$21,130,580
-$2,770,272
Number
410
490
-80
Total Time Deposit Transactions
Amount
$1,298,695
$708,600
+590,095
Number
80
43
+37
Average Workday Investment Activity
$893,591
$992,690
-$99,099
Prescribed Demand Account Balances
For Se -vices
$218,127
$147,112
+$71,015
For Uncollected Funds
$274,936
$256,261
+$18,675 ,
—1—
PHILIP ANGELIDES
STATE TREASURER
STATE OF CALIFORNIA
INWESTMENT DIVISION
SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED)
Change in
April 30,1999 Percent From
Tvue of Security Amount Percent Previous Month
Governments
Bills
$2,744,880
7.23
- 2.11
Bonds
0
0
0
Notes
$49026,408
10.62
- .83
Strips
0
0
0
Total Governments
$697719,288
17.85
- 2.94
Federal Agency Coupons
$39495,419
9.22
- 134
Certificates of Deposit
$6,578,752
1735
+ 2.81
Bank Notes
$1,2439083
3.28
- .06
Bankers Acceptances
$11,736
.03
- .17
Repurchases
0
0
0
Federal Agency Discount Notes
$4,028,832
10.62
- 131
Time Deposits
$2,1159545
5.58
- .68
GNMA's
$1,840
.01
0
Commercial Paper
$10,159,795
26.79
+ 3.12
FHLMC
$17,380
.04
- .01
Corporate Bonds
$2,086,991
5.50
- .06
Pooled Loans
$2,461,065
6.49
+ .60
GF Loans
. 0
- 1.70
Reversed Repurchases
<1,0461,860>
Q.76>
- 1.74
Total, All Types
$37,924,866
100
INVESTMENT ACTIVITY
Pooled Money
Otl- .r
T"me Deposits
TOTALS
PMIA Monthly Average
Effective Yield
Year to Date Yield for
Last Day of Month
April 1999
Number Amount
410 $ 18,360,308
32 $ 125,191
80 $ 1,2989695
522 $ 19,7849194
5.119
5.403
—2—
March 1999
Number Amount
439 $ 199,9389,137
77 $ 143,884
73 $ 8289600
589 $ 20,910,621
5.136
5.435
Pooled Money Investment Account
Portfolio Composition
$37.9 Billion
Loans Reverses
Corporate 6.49% 2.76%
Commercial
Paper
26.79%
Ba
Accel
0.03%
D's/BN's
20.63%
—3—
ies
o�
'ime Deposits
5.58%
Mortgages
0.05%
;encies
9.84%
04/30/99
O Treasuries
® Time Deposits
■ Mortgages
O Agencies
O CD's/BN's
■ Bank Acceptances
O Repurchases
® Commercial Paper
® Corporate Bonds
* Loans
O Reverses
04/01/99 REDEMPTION
CD
Commerzbk
4.860%
04/01/99
4.840
50,000
62
416,792.01
4.907
CD
Commerzbk
4.860%
04/01/99
4.840
50,000
62
416,792.01
4.907
CD
Deutsche
4.910%
04/01/99
4.900
50,000
80
544,456.42
4.96
CD
Deutsche
4.910%
04/01/99
4.900
50,000
80
544,456.42
4.96L
CP
Country
04/01/99
5.050
32,892
1
4,614.02
5.120
CP
GECC
04/01/99
5.000
50,000
1
6,944.44
5.070
CP
GECC
04/01/99
5.000
50,000
1
6,944.44
5.070
CP
GECC
04/01/99
5.000
50,000
1
6,944.44
5.070
CP
GECC
04/01/99
5.000
50,000
1
6,944.44
5.070
CP
Amer Exp
04/01/99
5.000
50,000
2
13,888.89
5.070
CP
Amer Exp
04/01/99
5.000
50,000
2
13,888.89
5.070
CP
Amer Exp
04/01/99
5.000
50,000
2
13,888.89
5.070
CP
Amer Exp
04/01/99
5.000
50,000
2
13,888.89
5.070
CP
Heller
04/01/99
4.950
50,000
31
213,125.00
5.040
CP
Salomon
04/01/99
4.860
50,000
35
236,250.00
4.950
CP
Salomon
04/01/99
4.860
50,000
35
236,250.00
4.950
CP
Salomon
04/01/99
4.860
50,000
35
236,250.00
4.950
CP
Salomon
04/01/99
4.860
50,000
35
236,250.00
4.950
CP
Household
04/01/99
4.820
50,000
36
241,000.00
4.910
CP
Household
04/01/99
4.820
50,000
36
241,000.00
4.910
CP
Hertz
04/01/99
4.850
50,000
36
242,500.00
4.941
CP
Conagra
04/01/99
4.980
25,000
49
169,458.33
5.083
CP
Conagra
04/01/99
5.000
19,060
51
135,008.33
5.105
CP
Household
04/01/99
4.810
30,000
51
204,425.00
4.910
CP
Household
04/01/99
4.810
50,000
51
340,708.33
4.910
CP
Heller
04/01/99
4.930
50,000
52
356,055.56
4.930
CP
GMAC
04/01/99
4.780
50,000
62
411,611.11
4.886
CP
GMAC
04/01/99
4.780
50,000
62
411,611.11
4.780
Disc Note
FHLB
04/01/99
4.700
50,000
77
502,638.90
4.813
Disc Note
FHLB
04/01/99
4.700
50,000
77
502,638.90
4.813
Disc Note
FHLMC
04/01/99
4.853
50,000
127
855,927.08
5.005
Disc Note
FHLMC
04/01/99
4.853
50,000
127
855,927.08
5.005
Treas
Bills
04/01/99
5.100
50,000
345
2,443,750.00
5.436
Treas
Bills
04/01/99
5.100
50,000
345
2,443,750.00
5.436
Treas
Bills
04/01/99
5.100
50,000
345
2,443,750.00
5.436
Treas
Bills
04/01/99
5.100
50,000
345
2,443,750.00
5.436
FFC.i
5.160%
04/01/99
5.063
40,000
182
1,013,250.00
5.077
RRP
Treas
Bills
04/01/99
4.380
50,000
77
(464,028.38)
-4.44
Treas
Bills
04/01/99
4.380
50,000
77
(464,028.38)
-4.44
Treas
Bills
04/01/99
4.440
50,000
80
(488,531.47)
-4.50 ,
Treas
Bills
04/01/99
4.440
50,000
80
(488,531.47)
-4.501
'.M
04101/99 PURCHASE
CP
Bear
04/02/99
5.360
10,000
CP
Bear
04/02/99
5.360
50,000
CP
Bear
04/02/99
5.360
50,000
CP
Bear
04/02/99
5.360
50,000
04/02/99 REDEMPTION
CP
Bear
04/02/99
5.360
10,000
1
1,488.89
5.435
CP
Bear
04/02/99
5.360
50,000
1
7,444.44
5.435
CP
Bear
04/02/99
5.360
50,000
1
7,444.44
5.435
CP
Bear
04/02/99
5.360
50,000
1
7,444.44
5.435
CP
FMCC
04/02/99
4.960
40,000
3
16,533.33
5.030
CP
Assoc
04/02/99
4.800
50,000
9
60,000.00
4.872
CP
Assoc
04/02/99
4.800
50,000
9
60,000.00
4.872
CP
Amer Exp
04/02/99
4.840
50,000
9
60,500.00
4.913
CP
Amer Exp
04/02/99
4.840
50,000
9
60,500.00
4.913
CP
Household
04/02/99
4.820
40,000
37
198,155.56
4.911
CP
Heller
04/02/99
4.930
50,000
53
362,902.78
5.035
PURCHASE
CD
Bkrs Trst
4.940% 07/01/99
4.940
25,000
CD
Bkrs Trst
4.940% 07/01 /99
4.940
50,000
CP
GECC
04/05/99
4.930
50,000
CP
GECC
04/05/99
4.930
50,000
CP
GECC
04/05/99
4.930
50,000
CP
GECC
04/05/99
4.930
50,000
CP
Heller
04/27/99
4.920
50,000
CP
Heller
04/27/99
4.920
50,000
04/05/99 REDEMPTION
CP
GECC
04/05/99
4.930
50,000
3
20,541.67
5.000
CP
GECC
04/05/99
4.930
50,000
3
20,541.67
5.000
CP
GECC
04/05/99
4.930
50,000
3
20,541.67
5.000
CP
GECC
04/05/99
'.930
50,000
3
20,541.67
5.000
CP
Merrill
04/05/99
4.900
25,000
5
17,013.89
4.971
CP
Merrill
04/05/99
4.900
50,000
5
34,027.78
4.971
CP
GMAC
04/05/99
4.800
30,000
12
48,000.00
4.874
CP
GMAC
04/05/99
4.800
50,000
12
80,000.00
4.874
CP
Bear
04/05/99
4.830
40,000
45
241,500.00
4.926
CP
GMAC
04/05/99
4.810
15,000
56
112,233.33
4.913
CP
GMAC
04/05/99
4.810
50,000
56
374,111.11
4.913
—5—
04/05/99 PURCHASE
CP
Amer Exp
CP
Amer Exp
CP
Amer Exp
CP
Amer Exp
CP
Amer Exp
CP
Armstrong
CP
Assoc
CP
Assoc
CP
Assoc
CP
Conagra
CP
Conagra
CP
SRAC
CP
SRAC
04/06/99 RRS
Treas
Bills
Treas
Bills
REDEMPTION
CP
Amer Exp
PURCHASE g/
Disc Note
FHLMC
Disc Note
FHLMC
04/07/99 RRS
Treas
Notes
Treas
Notes
REDEMPTION
BN
Fst Chic
BN
Fst Chic
Disc Note
FNMA
Disc Note
FNMA
FHLB
RRP
Treas Bills
Treas Bills
04/08/99
4.900
25,000
04/08/99
4.900
50,000
04/08/99
4.900
50,000
04/08/99
4.900
50,000
04/08/99
4.900
50,000
04/28/99
5.000
43,000
07/01 /99
4.830
50,000
07/01 /99
4.830
50,000
07/02/99
4.830
50,000
04/28/99
4.980
28,624
04/28/99
4.980
50,000
07/08/99
4.830
50,000
07/09/99
4.830
50,000
06/24/99 4.345 50,000
06/24/99 4.345 50,000
04/06/99 4.920 40,000
06/24/99 4.720 50,000
06/24/99 4.720 50,000
6.750% 06/30/99 4.450 50,000
6.750% 06/30/99 4.450 50,000
6 32,800.00 4.992
5.590% 04/07/^3
5.590
35,000
265
1,440,201.39
5.667
5.590% 04/0- i99
5.590
50,000
265
2,057,430.56
5.667
04/07/99
4.700
20,000
14
36,555.56
4.774
04/07/99
4.700
50,000
14
91,388.89
4.774
5.540% 04/07/99
5.650
25,000
352
1,380,472.22
5.731
01 /06/00 4.400 20,000
01 /06/00 4.400 50,000
14 (32,981.67) -4.461
14 (82,454.17) -4.461
—6—
04/07/99 PURCHASE g/
Disc Note
FHLMC
06/30/99
4.700
50,000
Disc Note
FHLMC
06/30/99
4.700
50,000
PURCHASE
BN
Fst Chic
4.870%
07/01/99
4.870
10,000
BN
Fst Chic
4.870%
07/01/99
4.870
50,000
BN
Fst Chic
4.870%
07/01/99
4.870
50,000
CD
U/B Calif
4.900%
07/08/99
4.900
50,000
CD
U/B Calif
4.900%
07/08/99
4.900
50,000
CD
U/B Calif
4.900%
07/09/99
4.900
50,000
CD
U/B Calif
4.900%
07/09/99
4.900
50,000
CP
Assoc
04/08/99
4.760.
50,000
CP
Assoc
04/08/99
4.760
50,000
04/08/99 REDEMPTION
CP
Assoc
04/08/99
4.760
50,000
1
6,611.11
4.826
CP
Assoc
04/08/99
4.760
50,000
1
6,611.11
4.826
CP
Amer Exp
04/08/99
4.900
25,000
3
10,208.33
4.970
CP
Amer Exp
04/08/99
4.900
50,000
3
20,416.67
-4.970
CP
Amer Exp
04/08/99
4.900
50,000
3
20,416.67
4.970
CP
Amer Exp
04/08/99
4.900
50,000
3
20,416.67
4.970
CP
Amer Exp
04/08/99
4.900
50,000
3
20,416.67
4.970
CP
FMCC
04/08/99
4.830
40,000
48
257,600.00
4.928
CP
FMCC
04/08/99
4.830
50,000
48
322,000.00
4.928
CP
FMCC
04/08/99
4.830
50,000
48
322,000.00
4.928
CP
GECC
04/08/99
4.830
25,000
56
187,333.33
4.934
CP
GECC
04/08/99
4.830
50,000
56
675,666.67
4.934
CP
GMAC
04/08/99
4.820
50,000
56
374,888.89
4.923
CP
GMAC
04/08/99
4.820
50,000
56
374,888.89
4.923
CP
W/F
04/08/99
4.820
10,000
58
77,655.56
4.925
CP
W/F
04/08/99
4.820
50,000
58
388,277.78
4.925
PURCHASE
CD
Bayer Lnds
4.900%
09/28/99
4.890
50,000
CD
Bayer Lnds
4.900%
09/28/99
4.890
50,000
CP
GECC
04/09/99
4.750
50,000
CP
GECC
04/09/99
4.750
50,000
CP
Lehman
05/28/99
4.900
50,000
CP
Lehman
05/28/99
4.900
50,000
04/09/99 REDEMPTION
BN
Fst Chic
5.640%
04/09/99
5.640
50,000
290
2,271,666.67
5.718
BN
Fst Chic
5.640%
04/09/99
5.640
50,000
290
2,271,666.67
5.718
—7—
04/09/99 REDEMPTION (continued)
CD
Hypo
5.110%
04/09/99
5.100
35,000
150
743,780.34
5.170
CD
Hypo
5.110%
04/09/99
5.100
50,000
150
1,062,543.35
5.170
CD
RB Canada
5.060%
04/09/99
5.060
50,000
177
1,243,916.67
5.130
CP
GECC
04/09/99
4.750
50,000
1
6,597.22
4.816
CP
GECC
04/09/99
4.750
50,000
1
6,597.22
4.816
CP
Morg Stan
04/09/99
4.900
50,000
10
68,055.55
4.974
CP
Morg Stan
04/09/99
4.900
50,000
10
68,055.55
4.974
PURCHASE
CP
Bkrs Trst
07/28/99
4.880
50,000
CP
Bkrs Trst
07/28/99
4.880
50,000
CP
Conagra
05/10/99
4.950
48,000
CP
GECC
09/28/99
4.800
50,000
CP
GECC
09/28/99
4.800
50,000
CP
Lehman
05/28/99
4.900
40,000
04/12/99 REDEMPTION
CP
Morg Stan
04/12/99
4.900
50,000
13
88,472.20
4.976
CP
Morg Stan
04/12/99
4.900
50,000
13
88,472.20
4.976
CP
Conagra
04/12/99
5.050
10,000
14
19,638.89
5.130
CP
Conagra
04/12/99
5.050
50,000
14
98,194.44
5.130
PURCHASE
c/
Treas
Bills
09/23/99
4.770
26,169
Treas
Notes
6.000%
06/30/99
4.770
50,000
Treas
Notes
7.750%
12/31 /99
4.770
50,000
Treas
Notes
5.375%
07/31/00
4.770
39,000
04/13/99 REDEMPTION
CD
BNParis
5.030%
04/13/99
5.020
50,000
123
857,612.14
5.089
CD
BNParis
5.030%
04/13/99
5.020
50,000
123
857,612.14
5.089
SALE c/
Treas
Bills
09/23/99
4.770
26,169
1
3,329.33
4.83F
Treas
Notes
6.000%
06/30/99
4.770
50,000
1
6,620.89
4.83E
Treas
Notes
7.750%
12/31 /99
4.770
50,000
1
6,766.91
4.836
Treas
Notes
5.375%
07/31/00
4.770
39,000
1
5,145.37
4.836
WIM
04/13/99 PURCHASE
BN
Nationsbk
BN
Nationsbk
CD
BV-Hypo
CD
BV-Hypo
CID
Conagra
CID
GECC
CID
GECC
CID
Hertz
CID
Lehman
04/14/99 REDEMPTION
Disc Note
FHLB
Disc Note
FHLB
Disc Note
FHLMC
Disc Note
FHLMC
Disc Note
FHLMC
Disc Note
FHLMC
SALE
Treas
Notes
Treas
Notes
Treas
Notes
Treas
Notes
RRP
Treas
Bills
Treas
Bills
Treas
Notes
Treas
Notes
Treas
Notes
Treas
Notes
PURCHASE
CB
IBM
MTN
Dupont
04/15/99 REDEMPTION
MTN
Citicorp
PURCHASE
CD
BNParis
4.900%
09/10/99
4.900
50,000
4.900%
09/10/99
4.900
50,000
4.890%
09/10/99
4.880
50,000
4.890%
09/10/99
4.880
50,000
05/26/99
4.920
50,000
08/27/99
4.810
50,000
08/27/99
4.810
50,000
06/04/99
4.810
50,000
05/26/99
4.900
50,000
04/14/99
4.740
50,000
27
177,750.00
4.822
04/14/99
4.740
50,000
27
177,750.00
4.822
04/14/99
4.810
50,000
42
280,583.50
4.904
04/14/99
4.810
50,000
42
280,583.50
4.904
04/14/99
4.810
50,000
42
280,583.50
4.904
04/14/99
4.810
50,000
42
280,583.50
4.904
6.250%
05/31/99
4.591
50,000
664
5,479,444.16
5.999
6.250%
05/31 /99
4.591
50,000
664
5,479,444.16
5.999
6.250%
05/31 /99
4.591
50,000
664
5,479,444.16
5.999
6.250%
05/31 /99
4.591
50,000
664
5,479,444.16
5.999
02/03/00
4.500
50,000
27
(162,000.00)
-4.562
02/03/00
4.500
50,000
27
(162,000.00)
-4.562
4.625%
11 /30/00
4.550
50,000
42
(265,748.43)
-4.613
4.625%
11/30/00
4.550
50,OOQ
-42
(265,748.43)
-4.613
4.625%
11 /30/00
4.550
50,000
42
(265,748.43)
-4.613
4.625%
11 /30/00
4.550
50,000
42
(265,748.43)
-4.613
5.300%
03/26/01
5.316
14,000
4.998%
04/14/00
5.080
50,000
5.090% 04/15/99 5.090 26,250 1836 7,510,573.51 5.688
4.870% 09/28/99
4.860 50,000
am
04/15/99 PURCHASE (continued)
CD
BNParis
4.870% 09/28/99
4.860
50,000
CID
Bear
05/26/99
4.820
18,000
CID
Bear
05/26/99
4.820
50,000
CID
Conagra
05/28/99
4.940
35,000
CID
Heller
06/01 /99
4.850
25,000
MTN
GMAC,
5.400% 02/26/01
5.420
16,700
MTN
GMAC
5.550% 04/15/02
5.570
32,700
04/16/99 NO REDEMPTIONS
PURCHASE
CID
Amer Exp
09/01/99
4.780
50,000
CID
Amer Exp
09/01 /99
4.780
50,000
CID
Amer Exp
09/02/99
4.780
50,000
CID
Amer Exp
09/02/99
4.780
50,000
CID
Assoc
08/02/99
4.750
25,000
CID
Assoc
08/02/99
4.750
50,000
CID
Assoc
08/05/99
4.750
25,000
CID
Assoc
08/05/99
4.750
50,000
CID
Chevron
04/28/99
4.750
25,000
CID
Chevron
04/28/99
4.750
50,000
CID
FMCC
04/28/99
4.750
50,000
CID
FMCC
04/28/99
4.750
50,000
CID
GECC
09/27/99
4.790
50,000
CID
GECC
09/27/99
4.790
50,000
CID
GECC
09/28/99
4.790
50,000
CID
GECC
09/28/99
4.790
50,000
CID
Hertz
04/27/99
4.780
50,000
CID
Merrill
04/28/99
4.750
50,000
CID
Merrill
04/28/99
4.750
50,000
CID
Text Fin
05/11 /99
4.970
11,309
CID
W/F
08/02/99
4.820
50,000
CID
W/F
08/02/99
4.820
50,000
CID
W/F
08/05/99
4.820
10,000
CID
W/F
08/05/99
4.820
50,000
MTN
IBM
5.300% 03/26/01
5.380
10,000
04/19/99 NO REDEMPTIONS
PURCHASE
BN
FNB Chic
5.130%
04/21/00
5.130
50,000
BN
FNB Chic
5.130%
04/21/00
5.130
50,000
CD
Bkrs Trst
4.960%
10/27/99
4.950
50,000
CD
Bkrs Trst
4.960%
10/27/99
4.950
50,000
CD
U/B of Calif
4.960%
10/27/99
4.960
35,000
-I0—
04/19/99 PURCHASE (continued)
CD
U/B of Calif
4.960% 10/27/99
4.960
50,000
CID
Conagra
05/03/99
4.930
30,000
CID
GMAC
08/02/99
4.800
50,000
CID
GMAC
08/02/99
4.800
50,000
CID
Heller
07/01 /99
4.850
25,000
MTN
IBM
5.345% 04/19/01
5.375
25,000
04/20/99 NO REDEMPTIONS
PURCHASE
CD
Bkrs Trst
4.930%
10/27/99
4.920
45,000
CD
Bkrs Trst
4.930%
10/27/99
4.920
50,000
CD
Commerzbk
5.090%
04/12/00
5.150
27,000
CD
Commerzbk
5.090%
04/12/00
5.150
50,000
CD
Commerzbk
5.090%
04/12/00
5.150
50,000
CD
Svenska
5.100%
04/19/00
5.150
10,000
CD
Svenska
5.100%
04/19/00
5.150
50,000
CD
Westpac Bk
4.925%
10/27/99
4.915
50,000
CID
Amer Exp
09/01/99
4.780
50,000
CID
Amer Exp
09/01 /99
4.780
50,000
CID
JP Morgan
10/15/99
4.790
50,000
CID
JP Morgan
10/15/99
4.790
50,000
Disc Note
FHLB
01/21/00
4.700
50,000
Disc Note
FHLB
03/17/00
4.700
50,000
Disc Note
FHLMC
10/08/99
4.680
15,000
Disc Note
FNMA
10/15/99
4.680
25,000
Disc Note
FNMA
10/15/99
4.680
25,000
Disc Note
FNMA
02/07/00
4.690
50,000
Disc Note
FNMA
02/18/00
4.690
50,000
Disc Note
FNMA
04/06/00
4.710
50,000
Disc Note
FNMA
04/06/00
4.710
50,000
MTN
IBM
5.800%
05/15/01
5.373
15,000
Treas
Notes
4.875%
03/31 /01
4.920
50,000
Treas
Notes
4.875%
03/31 /01
4.920
50,000
_+'reas
Notes
4.875%
03/31/01
4.925
50,000
Treas
Notes
4-875%
03/31 /01
4.925
50,000
Treas
Notes
4.875%
03/31 /01
4.925
50,000
Treas
Notes
4.875%
03/31 /01
4.925
50,000
04/21/99 NO REDEMPTIONS
PURCHASE
CD
Austria
5.110%
04/25/00
5.145
50,000
CD
Austria
5.110%
04/25/00
5.145
50,000
CD
Bkrs Trst
4.930%
10/27/99
4.920
50,000
—11—
04/21/99 PURCHASE (continued)
CD
Bkrs Trst
4.930%
10/27/99
4.920
50,000
CD
CIBC
5.270%
03/03/00
5.100
12,000
CP
Amer Exp
05/10/99
4.760
50,000
CP
Amer Exp
05/10/99
4.760
50,000
CP
Amer Exp
05/12/99
4.760
50,000
CP
Amer Exp
05/12/99
4.760
50,000
CP
Baxter
05/19/99
4.800
40,000
CP
FMCC
05/19/99
4.790
50,000
CP
FMCC
05/19/99
4.790
50,000
CP
GECC
05/10/99
4.760
50,000
CP
GECC
05/10/99
4.760
50,000
CP
GMAC
05/03/99
4.730
50,000
CP
GMAC
05/03/99
4.730
50,000
Treas
Notes
4.875%
03/31 /01
4.941
50,000
Treas
Notes
4.875%
03/31 /01
4.941
50,000
04/22/99 NO REDEMPTIONS
PURCHASE
CD
Morg Guar
4.900%
10/27/99
4.900
50,000
CD
Morg Guar
4.900%
10/27/99
4.900
50,000
CD
Morg Guar
4.900%
10/27/99
4.900
50,000
CD
Morg Guar
4.900%
10/27/99
4.900
50,000
CD
Stnrd Ch
5.140%
04/26/00
5.175
50,000
CD
Stnrd Ch
5.140%
04/26/00
5.175
50,000
CD
UBS
5.155%
02/25/00
5.100
50,000
CP
Amer Exp
09/28/99
4.780
50,000
CP
Amer Exp
09/28/99
4.780
50,000
CP
Amer Exp
09/30/99
4.780
50,000
CP
Amer Exp
09/30/99
4.780
50,000
CP
Bear
05/03/99
4.790
50,000
CP
Bear
05/03/99
4.790
50,000
CP
FMCC
06/01/99
4.780
50,000
CP
FMCC
06/01/99
4.780
50,000
CP
GECC
09/28/99
4.790
15,000
CP
GECC
09/28/99
4.790
50,000
CP
GECC
09/28/99
4.790
50,000
CP
GECC
09/28/99
4.790
50,000
Disc Notes
FNMA
04/04/00
4.710
50,000
Disc Notes
FNMA
04/04/00
4.710
50,000
04/23/99 RRS
Treas Notes 4.875% 03/31/01 4.320 50,000
Treas Notes 4.875% 03/31 /01 4.320 50,000
—12—
04/23/99 REDEMPTION
CP
GECC
04/23/99
4.720
CP
GECC
04/23/99
4.720
PURCHASE
g/
Disc Notes
FNMA
05/20/99
4.640
Disc Notes
FNMA
05/20/99
4.640
04/23/99 PURCHASE
CD
Commerzbk
5.120%
04/25/00
5.190
CD
Commerzbk
5.120%
04/25/00
5.190
CD
Deutsche
5.150%
04/25/00
5.190
CID
GMAC
05/26/99
4.790
CP
GMAC
05/26/99
4.790
CP
GMAC
05/28/99
4.790
CP
GMAC
05/28/99
4.790
CP
GMAC
06/01 /99
4.790
CP
GMAC
06/01/99
4.790
CP
GMAC
06/01 /99
4.790
CP
Household
05/10/99
4.770
CP
Household
05/14/99
4.770
CP
Text Fin
06/17/99
4.930
Disc Notes
FHLB
04/10/00
4.710
Disc Notes
FHLB
04/10/00
4.710
Disc Notes
FNMA
04/10/00
4.710
MTN
Chase
5.120%
04/23/02
5.120
04/26/99 REDEMPTION
BA U/B Calif 04/26/99 4.900
PURCHASE
MTN Citicorp 6.650% 05/15/00 5.140
FNMA
FNMA
FNMA
04/27/99 REDEMPTION
BA
U/B Calif
CP
Hertz
CP
Heller
CP
Salomon
5.020%
04/26/00
5.033
5.020%
04/26/00
5.017
5.020%
04/26/00
5.017
50,000 179 1,173,444.44 4.900
50,000 179 1,173,444.44 4.900
50,000
50,000
50,000
50,000
42,000
50,000
50,000
50,000
50,000
30,000
50,000
50,000
50,000
50,000
22,000
38,912
50,000
50,000
50,000
20,000 174
37,300
50,000
50,000
50,000
473,666.66 5.088
04/27/99
4.900
20,000
175
476,388.88
5.089
04/27/99
4.780
50,000
11
73,027.78
4.853
04/27/99
4.920
50,000
25
170,833.33
5.005
04/27/99
4.935
50,000
28
188,611.11
4.935
—13—
04/27/99 PURCHASE
CID
GMAC
04/28/99
4.800
25,000
CID
GMAC
04/28/99
4.800
50,000
CID
GMAC
04/28/99
4.800
50,000
CID
Salomon
04/28/99
4.800
50,000
CID
Salomon
04/28/99
4.800
50,000
04/28/99 REDEMPTION
CID
GMAC
04/28/99
4.800
25,000
1
3,333.33
4.867
CID
GMAC
04/28/99
4.800
50,000
1
6,666.67 .
4.867
CID
GMAC
04/28/99
4.800
50,000
1
6,666.67
4.867
CID
Salomon
04/28/99
4.800
50,000
1
6,666.67
4.867
CID
Salomon
04/28/99
4.800
50,000
1
6,666.67
4.867
CID
Chevron
04/28/99
4.750
25,000
12
39,583.33
4.823
CID
FMCC
04/28/99
4.750
50,000
12
79,166.67
4.823
CID
FMCC
04/28/99
4.750
50,000
12
79,166.67
4.823
CID
Chevron
04/28/99
4.750
50,000
12
79,166.67
4.823
CID
Merrill
04/28/99
4.750
50,000
12
79,166.67
4.823
CID
Merrill
04/28/99
4.750
50,000
12
79,166.67
4.823
CID
Conagra
04/28/99
4.980
28,624
23
91,072.03
5.065
CID
Armstrong
04/28/99
5.000
43,000
23
137,361.11
5.085
CID
Conagra
04/28/99
4.980
50,000
23
159,083.33
5.065
CID
Heller
04/28/99
4.920
50,000
26
177,666.67
5.006
CID
Salomon
04/28/99
4.850
50,000
29
195,347.22
4.936
Disc Notes
FHLB
04/28/99
4.750
25,000
176
580,555.56
4.930
Disc Notes
FHLB
04/28/99
4.750
50,000
176
1,161,111.11
4.930
PURCHASE
CD
Commerzbk
4.990% 02/02/00
5.100
50,000
CID
Bkrs Trst
08/27/99
4.860
5,000
CID
Bkrs Trst
08/27/99
4.860
50,000
CID
Conagra
06/01/99
4.910
25,000
CID
Conagra
06/01/99
4.910
50,000
CID
FMCC
05/17/99
4.820
50,000
CID
FMC( -
05/21/99
4.820
50,000
CID
Heller
05/17/99
4.880
50,000
CID
Hertz
05/14/99
4.820
20,000
CID
Hertz
07/28/99
4.810
50,000
CID
Merrill
05/10/99
4.810
50,000
04/29/99 REDEMPTION
BA
U/B Calif
04/29/99
4.900
15,000
177
361,375.00
5.090
Disc Notes
FHLMC
04/29/99
4.680
50,000
80
520,000.00
4.794
Disc Notes
FHLMC
04/29/99
4.680
50,000
80
520,000.00
4.794
Disc Notes
FHLMC
04/29/99
4.680
50,000
80
520,000.00
4.794
—14—
04/29/99 REDEMPTION (continued)
Disc Notes
FHLMC
04/29/99
4.680
50,000
80
520,000.00
4.794
Treas
Bills
04/29/99
5.125
50,000
360
2,562,500.00
5.476
Treas
Bills
04/29/99
5.125
50,000
360
2,562,500.00
5.476
Treas
Bills
04/29/99
5.125
50,000
360
2,562,500.00
5.476
Treas
Bills
04/29/99
5.125
50,000
360
2,562,500.00
5.476
FHLMC
5.550% 04/29/99
5.700
17,000
365
967,980.00
5.700
FHLMC
5.550% 04/29/99
5.702
50,000
365
2,848,000.00
5.704
FHLMC
5.550% 04/29/99
5.702
50,000
365
2,848,000.00
5.704
RRP
Treas
Bills
04/29/99
4.430
50,000
80
(487,423.06)
-4.491
Treas
Bills
04/29/99
4.430
50,000
80
(487,423.06)
-4.491
Treas
Bills
04/29/99
4.430
50,000
80
(487,300.00)
-4.491
Treas
Bills
04/29/99
4.430
50,000
80
(487,300.00)
-4.491
04/29/99 PURCHASE
CD
Austria
5.090%
05/01 /00
5.130
50,000
CD
Austria
5.090%
05/01 /00
5.130
50,000
CD
Mellon
4.900%
10/27/99
4.900
50,000
CD
Mellon
4.900%
10/27/99
4.900
50,000
CD
Mellon
4.900%
10/27/99
4.900
50,000
CD
Toronto
5.130%
04/28/00
5.190
5,000
CD
Toronto
5.130%
04/28/00
5.190
50,000
CID
Bear
06/01/99
4.810
50,000
CID
Bear
09/28/99
4.830
50,000
CID
Bear
09/28/99
4.830
50,000
CID
Bear
09/28/99
4.830
50,000
CID
GMAC
07/15/99
4.810
50,000
CID
GMAC
07/15/99
4.810
50,000
CID
GMAC
07/15/99
4.810
50,000
CID
Merrill
05/10/99
4.830
50,000
CID
Merrill
05/28/99
4.800
50,000
CID
Morg Stan
06/01 /99
4.790
50,000
CID
SRAC
05/11/99
4.850
50,000
04/30/99 NO REDEMPTIONS
PURCHASE
CID
GECC
05/03/99
4.940
7,000
CID
GECC
05/03/99
4.940
50,000
CID
GECC
05/03/99
4.940
50,000
CID
GECC
05/03/99
4.940
50,000
CID
GECC
05/03/99
4.940
50,000
CID
GECC
05/03/99
4.940
50,000
SBA
FR
5.125% 04/25/24
5.125
.3,476
—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 (EXIW,
Bankers Acceptances (BA), Commercial Paper (CP), Government
National Mortgage Association (GNMA), Federal Home Loan Bank
Notes (FHLB), Federal Land Bank Bonds (FLB), Federal Home Loan
Mortgage Corporation Obligation (FHLMC PC) & (FHLMC GMC),
Federal Farm Credit Bank Bonds (FFCB), Federal Farm Credit Discount
Notes (FFC), Corporate Securities (CB), U.S. Ship Financing Bonds
(TITLE 3WS), International Bank of Redevelopment (IBRD), Tennessee
Valley Authority (TVA) Medium Term Notes (MTN).
Purchase or sale yield based on 360 day calculation for discount
obligations and Repurchase Agreements.
-C/ Repurchase Agreement.
d/ Par amount of securites purchased, sold, or redeemed.
g/ Securities were purchased and sold as of the same date.
f/ Repurchase Agreement against Reverse Repurchase Agreement.
g/ Outright purchase against Reverse Repurchase Agreement.
h/ Security "SWAP" transactions.
i/ Buy back agreement.
RRS Reverse Repurchase Agreement.
RRP Termination of Reverse T epurchase Agreement.
-16-
ALHAMBRA
East West Bank
04/01 /99
4.530
8,000,000.00
07/01 /99
East West Bank
04/07/99
4.430
35,000,000.00
07/06/99
East West Bank
04/15/99
4.300
27,000,000.00
07/16/99
East West Bank
02/11 /99
4.530
38,000,000.00
05/13/99
BE ERLY HILLS
City National Bank
11/02/98
4.360
25,000,000.00
05/04/99
City National Bank
02/18/99
4.560
20,000,000.00
05/19/99
City National Bank
03/15/99
4.630
20,000,000.00
06/15/99
City National Bank
01 /27/99
4.480
10,000,000.00
07/27/99
City National Bank
03/31 /99
4.740
50,000,000.00
03/31 /00
North State National Bank
04/05/99
4.530
1,000,000.00
10/04/99
North State National Bank
04/06/99
4.730
1,000,000.00
04/06/00
North State National Bank
08/24/98
5.190
1,000,000.00
08/24/99
North State National Bank
03/02/99
4.760
1,000,000.00
08/30/99
North State National Bank
03/09/99
4.740
500,000.00
09/07/99
Tri Counties Bank
04/15/99
4.330
10,000,000.00
07/14/99
Tri Counties Bank
03/11/99
4.630
10,000,000.00
06/11/99
Tri Counties Bank
03/18/99
4.640
10,000,000.00
06/18/99
Tri Counties Bank
03/23/99
4.540
10,000,000.00
06/22/99
Imperial Bank
04/01/99
4.500
18,000,000.00
07/29/99
Imperial Bank
04/15/99
4.550
20,000,000.00
10/14/99
Imperial Bank
04/26/99
4.580
25,000,000.00
09/16/99
Imperial Bank
12/30/98
4.700
18,000,000.00
05/12/99
Imperial Bank
01/06/99
4.610
25,000,000.00
05/19/99
Imperial Bank
02/03/99
4.550
25,000,000.00
05/25/99
Imperial Bank
01/20/99
4.510
25,000,000.00
06/09/99
Imperial Bank
02/09/99
4.570
20,000,000.00
06/14/99
Imperial Bank
01/04/99
4.760
25,000,000 00
06/28/99
Imperial Bank
03/09/99
4.640
50,000,OCJ.00
07/15/99
Imperial Bank
03/16/99
4.650
11,000,000.00
08/12/99
Imperial Bank
03/24/99
4.550
15,000,000.00
08/12/99
Imperial Bank
02/23/99
4.690
25,000,000.00
08/23/99
13]VM
L nS ANGEL ES
Community Bank
12/15/98
4.570
10,000,000.00
06/14/99
Community Bank
04/28/99
4.600
5,000,000.00
10/25/99
Community Bank
12/22/98
4.540
5,000,000.00
06/22/99
Community Bank
01 /11 /99
4.530
20,000,000.00
07/13/99
Community Bank
02/08/99
4.570
15,000,000.00
08/11 /99
General Bank
04/08/99
4.440
7,000,000.00
07/20/99
General Bank
04/16/99
4.300
15,000,000.00
07/27/99
General Bank
04/30/99
4.540
15,000,000.00
08/03/99
General Bank
02/18/99
4.550
10,000,000.00
05/27/99
General Bank
02/17/99
4.500
28,000,000.00
06/02/99
General Bank
02/08/99
4.580
25,000,000.00
08/13/99
Preferred Bank
04/15/99
4.320
3,000,000.00
07/16/99
Preferred Bank
02/19/99
4.550
4,000,000.00
05/20/99
Preferred Bank
02/23/99
4.600
2,000,000.00
05/25/99
Preferred Bank
03/17/99
4.590
9,000,000.00
06/15/99
Preferred Bank
03/24/99
4.520
9,000,000.00
06/22/99
Preferred Bank
03/30/99
4.520
3,000,000.00
06/28/99
PFF Bank and Trust 11/24/98 4.800 8,000,000.00 05/25/99
PFF Bank and Trust 03/09/99 4.800 10,000,000.00 06/08/99
Bank of Petaluma 02/09/99 4.600 1,000,000.00 08/10/99
Mechanics Bank of Richmond 03/08/99 4.840 10,000,000.00 03/07/00
Mechanics Bank of Richmond 04/05/99 4.740 10,000,000.00 04/04/00
River City Bank
01/13/99
4.550
5,000,000.00
07/13/99
River City Bank
01 /20/99
4.500
5.' J0,000.00
07/30/99
River City Bank
02/17/99
4.600
:,,000,000.00
08/18/99
Sanwa Bank of California
01 /05/99
4.430
10,000,000.00
07/15/99
Sanwa Bank of California
01/27/99
4.480
5,000,000.00
07/27/99
Sanwa Bank of California
02/03/99
4.590
7,000,000.00
08/03/99
Sanwa Bank of California
02/17/99
4.590
50,000,000.00
08/16/99
Sanwa Bank of California
02/19/99
4.650
10,000,000.00
08/23/99
Union Bank of California
04/29/99
4.530
50,000,000.00
07/28/99
Union Bank of California
02/02/99
4.510
100,000,000.00
05/04/99
Union Bank of California
02/17/99
4.540
50,000,000.00
05/18/99
Union Bank of California
03/30/99
4.520
100,000,000.00
06/28/99
-18-
SALINAS
Bank of Salinas
03/15/99
4.630
12,000,000.00
06/15/99
Bank of Salinas
04/22/99
4.390
8,000,000.00
07/22/99
SAN DIEGO
Bay Bank of Commerce
417/99
4.53
5,000,000.00
4/29/00
Bay Bank of Commerce
02/03/99
4.590
10,000,000.00
08/03/99
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 FRA_NCISCO
Bank of Canton California
02/05/99
4.510
5,000,000.00
05/06/99
Bank of Canton California
02/11/99
4.520
5,000,000.00
05/13/99
Bank of Canton California
12/01/98
4.620
5,000,000.00
06/01/99
Bank of Canton California
12/04/98
4.500
5,000,000.00
06/02/99
Bank of Canton California
01/21/99
4.470
5,000,000.00
07/21/99
Bank of Canton California
03/05/99
4.750
5,000,000.00
09/01/99
Bank of Canton California
03/16/99
4.710
5,000,000.00
09/13/99
Bank of the West
04/06/99
4.430
14,000,000.00
07/07/99
Bank of the West
01 /04/00
4.480
25,000,000.00
07/21 /99
Bank of the West
04/29/99
4.760
51,500,000.00
04/29/00
Bank of the West
04/14/99
4.330
25,000,000.00
07/13/99
Bank of the West
05/15/98
5.450
10,000,000.00
05/13/99
Bank of the West
02/18/99
4.560
30,000,000.00
05/19/99
Bank of the West
02/23/99
4.610
25,000,000.00
05/26/99
Bank of the West
02/24/99
4.610
27,000,000.00
05/26/99
Bank of the West
02/25/99
4.610
35,000,000.00
05/26/99
Bank of the West
06/08/98
5.440
25,000,000.00
06/08/99
Bank of the West
04/01/99
4.530
20,000,000.00
07/07/99
Bank of the West
07/13/98
5.350
25,000,000.00
07/13/99
California Federal Bank
04/06/99
4.480
5,000,000.00
10/04/99
California Federal Bank
04/15/99
4.310
100,000,000.00
07/16/99
California Federal Bank
03/31/99
4.550
3,000,000.00
06/29/99
Cupertino National Bank
01 /22/99
4.490
20,000,000.00
07/22/99
Mid -Peninsula Bank
01/27/99
4.490
15,000,000.00
07/27/99
Oceanic Bank
03/05/99
4.920
2,000,000.00
03/07/00
Oceanic Bank
03/12/99
4.780
2,000,000.00
03/15/00
Trans Pacific National Bank
03/15/99
4.800
800,000.00
09/13/99
United Commercial Bank
04/07/99
4.440
20,000,000.00
07/06/99
United Commercial Bank
02/09/99
4.550
20,000,000.00
05/11/99
United Commercial Bank
03/23/99
4.540
20,000,000.00
06/21/99
-19-
NAME
SAN LUIS OBISPO
First Bank of San Luis Obispo
TIME DEPOSIT
DEPOSIT DATE
04/06/99
YIELD PAR
4.440
AMOUNT (S) MATURITY
1,000,000.00
DATE
07/06/99
First Bank of San Luis Obispo
04/28/99
4.540
1,000,000.00
07/30/99
First Bank of San Luis Obispo
02/02/99
4.530
3,600,000.00
05/04/99
First Bank of San Luis Obispo
02/10/99
4.560
2,000,000.00
05/12/99
First Bank of San Luis Obispo
02/23/99
4.620
2,500,000.00
05/24/99
Westamerica Bank
04/21/99
4.440
25,000,000.00
07/20/99
Westamerica Bank
04/22/99
4.440
25,000,000.00
07/21/99
Westamerica Bank
04/28/99
4.530
25,000,000.00
07/27/99
Westamerica Bank
02/09/99
4.540
50,000,000.00
05/11/99
SANTA ANA
Grand National Bank
04/15/99
4.330
2,000,000.00
07/16/99
Grand National Bank
03/09/99
4.670
3,000,000.00
06/08/99
Grand National Bank
01 /04/99
4.610
95,000.00
07/07/99
Grand National Bank
10/15/98
4.180
1,000,000.00
10/15/99
SANTA BARBARA
Santa Barbara Bank & Trust
04/07/99
4.440
5,000,000.00
07/06/99
Santa Barbara Bank & Trust
04/09/99
4.440
10,000,000.00
07/08/99
Santa Barbara Bank & Trust
04/15/99
4.340
5,000,000.00
07/16/99
Santa Barbara Bank & Trust
02/09/99
4.550
5,000,000.00
05/11/99
Santa Barbara Bank & Trust
03/02/99
4.730
5,000,000.00
06/01/99
Santa Barbara Bank & Trust
03/16/99
4.640
5,000,000.00
06/14/99
SANTA CRUZ
Coast Commercial Bank
.03/23/99
4.520
5,000,000.00
06/15/99
Coast Commercial Bank
03/17/99
4.600
15,000,000.00
06/15/99
SHASTA
North Valley Bank
03/23/99
4.780
3,000,000.00
03/22/00
STANISLAUS
Oak Valley Community Bank
02/04/99
4.560
500,000.00
05/06/99
Oak Valley Community Bank
02/08/99
4.600
500,000.00
08/10/99
Oak Valley Community Bank
03/24/99
4.580
1,000,000.00
09/20/99
Oak Valley Community Bank
03/30/99
4.630
1,000,000.00
01 /31 /00
Oak Valley Community Bank
03/30/99
4.750
1,000,000.00
03/31/00
—20—
NAME
TORRANCE
China Trust Bank (USA)
TIME DEPOSIT
DEPOSIT DATE
04/28/99
YIELD
4.540
PAR AMOUNT (S) MATURITY
DATE
07/27/99
15,000,000.00
China Trust Bank (USA)
03/10/99
4.650
10,000,000.00
06/08/99
China Trust Bank (USA)
03/16/99
4.640
10,000,000.00
06/14/99
China Trust Bank (USA)
03/24/99
4.540
5,000,000.00
06/22/99
China Trust Bank (USA)
03/31 /99
4.550
10,000,000.00
06/29/99
South Bay Bank
12/15/98
4.640
2,000,000.00
06/15/99
South Bay Bank
01 /20/99
4.550
1,000,000.00
07/21 /99
TUSTIN
Sunwest Bank
04/07/99
4.430
3,300,000.00
07/06/99
Sunwest Bank
04/13/99
4.410
3,500,000.00
07/12/99
Sunwest Bank
04/21/99
4.350
1,000,000.00
07/20/99
VICTORVILLE
Citizens Business Bank
04/07/99
4.720
10,000,000.00
07/27/99
Citizens Business Bank
12/16/98
4.570
10,000,000.00
06/16/99
Citizens Business Bank
01/05/99
4.640
5,000,000.00
07/07/99
Citizens Business Bank
02/08/99
4.580
10,000,000.00
08/10/99
Citizens Business Bank
03/09/99
4.850
5,000,000.00
03/08/00
Citizens Business Bank
03/23/99
4.780
10,000,000.00
03/22/00
WALNUT CREEK
Saratoga National Bank
04/01/99
4.610
5,000,000.00
10/01/99
Saratoga National Bank
12/21 /98
4.610
1,750,000.00
06/22/99
TOTAL TIME DEPOSITS AS OF APRIL 30,1999
2,115,545,000.00
—21—
(000 omitted)
DAILY BALANCES
APRIUL
PER BANDS
WARRANTS
OUTSTANDING
1.
$6969117
$29636415
2.
6729922
292179712
3.
6729922
292179712
4.
672,922
24179712
5.
2399751
19764,369
6.
2679686
1,6819537
7.
1569619
198769862
8.
3259477
1,788,540
9.
2449574
197939,314
10.
2449574
197939,314
11.
244,574
197931,314
12.
389,650
1,5189384
13.
2799627
19,3489090
14.
3419860
194589022
15.
7729021
197749047
16.
7491952
1,826,602
17.
749,952
198269602
18.
7499952
198269602
19.
19528482
195589603
20.
192269935
194139767
21.
8989773
14689845
22.
850,455
199529871
23.
380,125
19666,664
24.
3809125
196669664
25.
3809125
19,6669664
26.
487461
194079442
27.
6459246
194089692
28.
4599215
1,3589501
29..
160,870
192309617
30.
6489017
19663435
A/
AVERAGE DOLLAR DAYS $5509553
.a/ The prescribed bank balance for APRIL was $493,064. This consisted of
$205,349 in compensating balances for services, $287,715 uncollected funds
and a deduction of $12,779 for December delayed deposit credit.
-22-
DESIGNATION BY POOLED MONEY INVESTMENT BOARD
OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS
No. 1598
In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its
meeting on April 21, 1999, 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 $ 226,642,000
The active noninterest-bearing bank accounts designation constitutes a calendar month average balance. For purposes
of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein
as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for
any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above
amount provided that the balances computed by dividing the sum of daily balances of that calendar month by the number
of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy
collection periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be
maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management.
2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest -
bearing deposits in banks and savings and loan associations as follows:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
From
04/19/99
04/26/99
05/03/99
05/10/99
05/17/99
05/24/99
05/31 /99
06/07/99
06/14/99
To Transactions
04/23/99
04/30/99
05/07/99
05/14/99
05/21 /99
05/28/99
06/04/99
06/11 /99
06/18/99
2,390,900,000
974,200,000
1,300,000
(214,600,000)
304,600,000
(112,000,000)
(626,800,000)
270,500,000
2,778,200,000
Time Deposits in
various Financial
Institutions
In Securities
(sections 16503a
(section 16430)'
and 16602)'
$ 30,767,355,000
$
2,110,545,000
$ 31,741,555,000
$
2,110,545,000
$ 31,742,855,000
$
2,110,545,000
$ 31,528,255,000
$
2,110,545,000
$ 31,832,855,000
$
2,110,545,000
$ 31,720,855,000
$
2,110,545,000
$ 31,094,055,000
$
2,110,545,000
$ 31,364,555,000
$
2,110,545,000
$ 34,142,755,000
$
2,110,545,000
Estimated
Total
$ 32,877,900,000
$ 33,852,100,000
$ 33,853,400,000
$ 33,638,800,000
$ 33,943,400,000
$ 33,831,400,000
$ 33,204,600,000
$ 33,475,100,000
$ 36,253,300,000
From any of the amounts specifically designated above, not more than 30 percent in the aggregate may be invested in
prime commercial paper under section 16430(e), Government Code.
Additional amounts available in treasury trust account and in the Treasury from time to time, in excess of the
amounts and for the same types of investments as specifically designated above.
Provided, that the avails ,ility 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 $ 226,642,000.
Dated: April 21, 1999
'Government Code Member
—23—
INVESTMENT ADVISORY BOARD MEETING
Meeting Date: July 14, 1999
ITEM TITLE
Distribution of Investment Policies
for Fiscal Year 1999/2000
BACKGROUND:
Correspondence and
Written. Material: C
On June 29, 1999 the City Council approved the Investment Policies for Fiscal Year
1999/2000 which are attached.
RECOMMENDATION:
Receive and File.
hn M. Falconbr, Finance Director
CITY OF LA QUINTA
Investment Policy
Table of Contents
Section
Topic
Page
Executive Summary
2
1
General Purpose
5
II
Investment Policy
5
III
Scope
5
IV
Objectives
6
► Safety
► Liquidity
► Yield
► Diversified Portfolio
V
Prudence
7
VI
Delegation of Authority
7
VII
Conflict of Interest
8
Vill
Authorized Financial Dealers and Institutions
8
► Broker/Dealers
► Financial Institutions
IX
Authorized Investments and Limitations
10
Investment Pools
14
XI
Safekeeping and Custody
14
XII
Interest Earning Distribution Policy
15
XIII
Internal Controls and Independent Auditors
15
XIV
Benchmark
17
XV
Reporting Standards
17
XVI
Investment of Bond Proceeds
18
XVII
Investment Advisory Board - City of La Quinta
18
XVIII
Investment Policy Adoption
19
Appendices: A. Summary of Authorized Investments and Limitations
20
B. Municipal Code Ordinance 2.70 - Investment Advisory Board
21
C. Municipal Code Ordinance 3.08 - Investment of Moneys and Funds
22
D. Segregation of M Jor Investment Responsibilities
24
E. Listing of Approved Financial Institutions
25
F. Broker/Dealer Questionnaire and Certification
26
G. Investment Pool Questionnaire
27
H. Glossary
35
1
City of La Quinta
Investment Policy
Executive Summary
The general purpose of this Investment Policy is to provide the rules and standards
users must follow in investing funds of the City of La Quinta.
It is the policy of the City of La Quinta to invest all public funds in a manner which will
provide a diversified portfolio with maximum security while meeting daily cash flow
demands and the highest investment return in conformity to all state and local
statutes. This Policy applies to all cash and investments of the City of La Quinta, La
Quinta Redevelopment Agency and the La Quinta Financing Authority, hereafter
referred in this document as the "City".
The primary objectives, in order of priority, of the City of La Quinta's investment
activity shall be:
Safety of principal is the foremost objective of the investment program.
Investments of the City of La Quinta shall be undertaken in a manner that seeks
to ensure the preservation of capital in the overall portfolio
The investment portfolio shall remain sufficiently liquid to meet all operating
requirements that may be reasonably anticipated.
The investment portfolio shall be designed with the objective of attaining a
market rate of return or yield throughout budgetary and economic cycles, taking
into account the investment risk constraints and liquidity needs.
Within the constraints of safety, liquidity and yield, the City will endeavor to
maintain a diversified portfolio by allocating assets between different types of
investments within policy limitations.
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 speculatia-., 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
2
safety of the portfolio. In addition, the internal control system will also insure the
timely preparation and accurate reporting of the portfolio financial information. 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.
Investment responsibilities carry added duties of insuring that investments are made
without improper influence or the appearance to a reasonable person of questionable
or improper influence.
The City of La Quinta Investment Policy maintains a listing of financial institutions
which are approved for investment purposes. All Broker/Dealers and financial
institutions selected by the Treasurer to provide investment services will be approved
by the City Manager subject to City Council approval.
The Treasurer will be permitted to invest only in City approved investments up to the
maximum allowable percentages. and, where applicable, through the bid process
requirements. Authorized investment vehicles and related maximum portfolio positions
are listed in Appendix A - Summary of Authorized Investments and Limitations. At
least two bids will be required of investments in the authorized investment vehicles.
Collateralization will be required for Certificates of Deposits in excess of $100,000.
Collateral will always be held by an independent third party from the institution that
sells the Certificates of Deposit to the City. Evidence of compliance with State
Collateral ization policies must be supplied to the City and retained by the City
Treasurer.
The City of La Quinta Investment Policy 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 Investment Policy will use the six month U.S. Treasury Bill as
a benchmark when measuring the performance of the investment portfolio.
3
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.
M
P.O. Box 1504
78-495 CALLE TAMPICO
LA QUINTA, CALIFORNIA 92253
City of La Quinta
Statement of Investment Policy
July 1, 1999 through June 30, 2000
Adopted by the City Council on June 29, 1999
(760) 777-7000
(TDD) (760) 777-1227
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.
11 INVESTMENT POLICY
It is the policy of the City of La Quinta to invest public funds in a manner which will
provide a diversified portfolio with safety of principal as the primary objective while
meeting daily cash flow demands with the highest investment return. In addition, the
Investment Policy will conform to all State and local statutes governing the investment
of public funds.
III SCOPE
This Investment Policy applies to all cash and investments of the City of La Quinta,
City of La Quinta Redevelopment Agency and the City of La Quinta Financing
Authority, hereafter referred in this document as the "City". These funds are reported
in the City of La Quinta Comprehensive Annual financial Report (CAFR) and include:
All funds within the following fund types:
► G.;neral
► special Revenue
► Capital Projects
► Debt Service
► Internal Service
► Trust and Agency
► Any new fund types and fund(s) that may be created.
VAMMr9PlIJ*ktM*9
The primary objective, in order of priority, of the City of La Quinta's investment
activity shall be:
1. Safety
Safety of principal is the foremost objective of the investment program.
Investments of the City of La Quinta shall be undertaken in a manner that seeks
to ensure the preservation of capital in the overall portfolio in accordance with
the permitted investments. The objective will be to mitigate credit risk and
interest rate risk.
Credit Risk - is the risk of loss due to the failure of the security issuer or
backer. Credit risk may be mitigated by:
► Limiting investments to the safest types of securities;
► Pre -qualifying the financial institutions, and broker/dealers, which
the City of La Quinta will do business; and
► Diversifying the investment portfolio so that potential losses on
individual securities will be minimized.
=:VMl1ll7
Interest Rate risk is the risk that the market value of securities in the
portfolio will fall due to changes in general interest rates. Interest rate
risk may be mitigated by:
► Structuring the investment portfolio so that securities mature to
meet cash requirements for ongoing operations, thereby avoiding
the need to sell securities on the open market prior to maturity;
and
► By investing operating funds primarily in shorter -term securities.
2. Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating
requirements that may be reasonably anticipated. This is accomplished by
structuring the portfolio so that sufficient liquid funds are available to meet
anticipated demands. Furthermore since all possible cash demands cannot be
anticipated the portfolio should be diversified and consist of securities with
active secondary or resale markets.
n
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
► A declining credit security could be sold early to minimize loss of
principal;
► Liquidity needs of the portfolio require that the security be sold.
4. Diversified Portfolio
Within the constraints of safety, liquidity and yield, the City will endeavor to
maintain a diversified portfolio by allocating assets between different types of
investments within policy limitations.
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.
• _M [Q ► Kel SAW no WO I
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
7
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.
18[�6161 ► 1 a q lot go]► 11 #AIMI�
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.
10. 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.
LTEEWTATO ■ 16M M 01 J 10 FIN ► lei ' '1 4 4*V_A1 ► 11110 • ►
The City of La Quinta Investment Policy maintains a listing of financial institutions
which are approved for investment purposes. In addition a list will also be maintained
of approved broker/dealers selected by credit worthiness, who maintain an office in the
State of California.
1. Broker/Dealers who desire to become bidders for investment transactions must
supply the City of La Quinta with the following:
► Current audited financial statements
Proof of National Association of Security Dealers Certification
► Trading resolution
► Proof of California registration
► Resume of Financial broker
► Completion of the City of La Quinta Broker/Dealer questionnaire which
contains a certification of having read the City of La Quinta Investment
Policy
The City Treasurer shall evaluate the documentation submitted by the
broker/dealer and independently verify existing reports on file for any firm and
individual conducting investment related business.
The City Treasurer will also contact the following agencies during the
verification process:
► National Association of Security Dealer's' Public Disclosure Report File -
1-800-289-9999
► State of California Department of Corporations 1-916-445-3062
All Broker/Dealers selected by the City Treasurer to provide investment services
will be approved by the City Manager subject to City Council approval. The City .
Attorney will perform a legal review of the trading resolution/investment
contract submitted by each Broker/Dealer.
Each securities dealer shall provide monthly and quarterly reports filed pursuant to U.S.
Treasury Department regulations. Each mutual fund shall provide a prospectus and
statement of additional information.
2. Financial Institutions will be required to meet the following criteria in order to
receive City funds for 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 FDIC -shall be 1 10% collateralized
by securities' or 150% mortgages' market values of that amount
of invested funds plus unpaid interest earnings.
C. Disclosure - Each financial institution maintaining invested funds
in excess of the FDIC insured amount shall furnish the City a copy
of the most recent Annual Call Report.
9
The City shall not invest in excess of the FDIC insured amount in
banking institutions which do not disclose to the city a current
listing of securities pledged for collateral ization in public monies.
The City Treasurer will be permitted to invest in the investments summarized in the
Appendix A.
As provided in Sections 16429.1, 53601, 53601.1, and 53649 of the
Government Code, the State of California limits the investment vehicles
available to local agencies as summarized in the following paragraphs. Section
53601, as now amended, provides that unless Section 53601 specifies a
limitation on an investment's maturity, no investments with maturities
exceeding five years shall be made. The City of La Quinta Investment Policy
has specified that no investment may exceed two years.
State Treasurer's Local Agency Investment Fund (LAIF) - As authorized in
Government Code Section 16429.1 and by LAIF procedures, local government
agencies are each authorized to invest a maximum of $30 million per account
in this investment program administered by the California State Treasurer. The
City's investment in the State Local Agency Investment Fund (LAIF) is allowable
as long as the average maturity of its investment portfolio does not exceed two
years, unless specific approval is authorized by the City Council. The City of La
Quinta has .two accounts with LAIF. The City of La Quinta Investment Policy
has a limitation of 35 % of the portfolio.
U.S. Government and Related Issues - As authorized in Government Code
Sections 53601 (a) through (n) as they pertain to surplus funds, this category
includes a wide variety of government securities which include the following:
• Local government bonds or other indebtedness and State bonds or other
indebtedness. The City of La Quinta Investment Policy does not allow
investments in local and state indebtedness
• U.S. Treasury I,A:ls, notes and bonds directly issued and backed by the
full faith and credit of the U.S. Government. The City of La Quinta
Investment Policy limits investments in U.S. Treasury issues to 75% of
the portfolio.
IM
• U.S. Government agencies issuing securities backed as to principal and
interest by the full faith and credit of the U.S. Government. Government
National Mortgage Association (GNMA) is such an agency. The City of
La Quinta Investment Policy has a limitation of 75% of the portfolio with
a single issuer limit of 25% of the portfolio.
• 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 Federal Home Loan Bank (FHLB), Federal Farm Credit
Bank (FFCB), Federal Land Bank (FLB) and Federal Intermediate Credit
Bank (FICB) are such issuers. The City of La Quinta Investment Policy
has a limitation of 75% of the portfolio with a single issuer limit of 25%
of the portfolio.
• Federal government sponsored enterprises (GSEs) issuing securities not
backed as to principal and interest by the full faith and credit of the U.S.
Government. These GSEs include Federal National Mortgage Association
(FNMA), Federal Home Loan Mortgage Corporation (FHMC) and Student
Loan Marketing Association (SLMA) which are publicly owned. The City
of La Quinta Investment Policy has a limitation of 75% of the portfolio
with a single issuer limit of 25% of the portfolio.
Bankers' Acceptances - As authorized in Government Code Section 53601 (f),
40% of the portfolio may be invested in Bankers' Acceptances, although no
more than 30% of the portfolio may be invested in Bankers' Acceptances with
any one commercial bank. Additionally, the maturity period cannot exceed 270
days; however, Bankers' Acceptances are seldom marketed with maturities in
excess of 180 days. The City of La Quinta Investment Policy does not allow
investment in Bankers' Acceptances.
Commercial Paper - As authorized in Government Code Section 53601(g), 15%
of the portfolio may be invested in commercial paper of the highest rating (A-1
or P-1) as rated by Moody's or Standard and Poor's, with maturities not to
exceed 180 days. This percentage may be increased to 30% if the dollar
weighted average maturity does not exceed .31 days. The City of La Quinta
Investment Policy only allows investments n commercial paper to 30% of the
portfolio with a maximum maturity of 30 days per issue. There are a number
of other qualifications regarding investments in commercial paper based on the
financial strength of the corporation and the size of the investment. The City
of La Quinta Investment Policy also limits Commercial Paper to no more than $1
million dollars in any one entity at any time for no more than 30 days.
11
Negotiable Certificates of Deposit - As authorized in Government Code Section
53601(h), 30% of the portfolio may be invested in negotiable certificates of
deposit issued by commercial banks and savings and loan associations. The
City of La Quinta Investment Policy does not allow investment in Negotiable
Certificates of Deposit.
Repurchase and Reverse Repurchase Agreements - As authorized in Government
Code Section 53601(i), these investment vehicles are agreements between the
local agency and seller for the purchase of government securities to be resold
at a specific date and for a specific amount. Repurchase agreements are
generally used for short term investments varying from one day to two weeks.
There is no legal limitation on the amount of the repurchase agreement.
However, the maturity period cannot exceed one year. The market value of
securities underlying a repurchase agreement shall a at least 102% of the funds
invested and shall be valued at least quarterly. The City of La Quinta
Investment Policy does not allow investment in Repurchase Agreements.
The term "reverse repurchase agreement" means the sale of securities by the
local agency pursuant to an agreement by which the local agency will
repurchase such securities on or before a specific date and for a specific
amount. As provided in Government Code Section 53635, reverse repurchase
agreements require the prior approval of the City Council. The City of La Quinta
Investment Policy does not allow investment in Reverse Repurchase
Agreements.
Corporate Notes - As authorized in Government Code Section 53601 (j), local
agencies may invest in corporate notes for a maximum period of five years in
an amount not to exceed 30% of the agency's portfolio. The notes must be
issued by corporations organized and operating in the United States or by
depository institutions licensed by the United States or any other state and
operating in the United States. The City of La Quinta Investment Policy does
not allow investment in corporate notes.
Diversified Management Com aR Hies - As authorized in Government Code
Section 53601 (k), local agencies are authorized to invest in shares of
beneficial interest issued by diversified management companies .mutual funds)
in an amount not to exceed 20% of the agency's portfolio. There are a number
of other qualifications and restrictions regarding allowable investments in
corporate notes and shares of beneficial interest issued by mutual funds which
include (1) attaining the highest ranking or the highest letter and numerical
rating provided by not less than two of the three largest nationally recognized
rating services, or (2) having an investment advisor registered with the
12
Securities and Exchange Commission with not less than five years' experience
investing in the securities and obligations and with assets under management
in excess of five hundred million dollars ($500,000,000). The City of La
Quinta Investment Policy only allows investments in mutual funds that are
money market funds maintaining a par value of $1 per share that invests in
direct issues of the U. S. Treasury with an average maturity of their portfolio
not exceeding 60 days and the City limits such investments to 20% of the
portfolio.
Mortgage -Backed Securities - As authorized in Government code Section
53601(n), local agencies may invest in mortgage -backed securities such as
mortgage pass -through securities and collateralized mortgage obligations for a
maximum period of five years in an amount not to exceed 20% of the agency's
portfolio. Securities eligible for investment shall have a "A" or higher rating.
The City of La Quinta Investment Policy does not allow investment in Mortgage -
Backed Securities.
Financial Futures and Financial Option Contracts - As authorized in Government
Code Section 53601.1, local agencies may invest in financial futures or option
contracts in any of the above investment categories subject to the same overall
portfolio limitations. The City of La Quinta Investment Policy does not allow
investments in financial futures and financial option contracts.
Certificates of Dew - As authorized in Government Code Section 53649,
Certificates of Deposit are fixed term investments which are required to be
collateralized from 1 10% to 150% depending on the specific security pledged
as collateral in accordance with Government Code Section 53652. There are
no portfolio limits on the amount or maturity for this investment vehicle.
Collateralization will be required for Certificates of Deposits in excess of the
FDIC insured amount. The type of collateral is limited to City authorized
investments. Collateral will always be held by an independent third party from
the institution that sells the Certificates of Deposit to the City. Evidence of
compliance with State Collateralization policies must be supplied to the City and
retained by the City Treasurer as follows:
1 . Certificates of Deposits Insured by the FDIC.
The City Treasurer may waive collateral ization of a deposit that is
federally insured.
13
2. Certificates of Deposit in excess of FDIC Limits.
The amount not federally insured shall be 110% collateralized by
securities or 150% mortgages market value of that amount of invested
funds plus unpaid interest earnings.
The City of La Quinta Investment Policy limits the percentage of Certificates of
Deposit to 60% of the portfolio.
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.
Derivatives - The City of La Quinta Investment Policy does not allow
investment in derivatives.
►� ► ;L6161 IN
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 Investment Policy has authorized 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 $30 million. In
addition, LAIF will provide quarterly market value information to the City of La Quinta.
On an annual basis the City Treasurer will submit the Investment Pool Questionnaire
to LAIF.
Also, prior to opening any new Investment Pool account, which would require City
Council approval, the City Treasurer will require the completion of the Investment Pool
Questionnaire.
The City does not allow investments with any other Investment Pool - County Pools
or Third party Pools.
All security transactions of the City of La Quinta Investment Policy 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
14
directly to the entity and not to an investment advisor, broker or dealern. Money
market mutual funds and LAIF shall also operate on a DVP basis to be considered for
investment.
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.
The City Treasurer shall establish a system of internal controls to accomplish the
following objectives:
► Safeguard assets;
► The orderly and efficient conduct of its business, including adherence to
management policies;
► Prevention or detectiol of errors and fraud;
► The accuracy and completeness of accounting records; and,
► Timely preparation of reliable financial information.
15
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 delegation of authority to subordinate staff members. Subordinate staff
members must have a clear understanding of their authority and responsibilities
to avoid improper actions. Clear delegation of authority also preserves the
internal control structure that is contingent on the various staff positions and
their respective responsibilities as outlined in the Segregation of Major
Investment Responsibilities appendices.
f. Written confirmation or telephone transactions for investments and wire
transfers. Due to the potential for error and improprieties arising from telephone
transactions, all telephone transactions shall be supported by written
communications and approved by th ; 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.
ire
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.
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.
The independent auditor's management letter comments pertaining to cash and
investments, if any, shall be directed to the City Manager who will direct the City
Treasurer to provide a written response to the independent auditor's letter. 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.
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 Investment Policy will use the six month U.S. Treasury Bill as
a benchmark when measuring the performance of the investment portfolio.
SB564 section 3 requires a quarterly report to the Legislative Body of Investment
activities. The City of La Quinta Investment Advisory Board 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 cash and investments under the
authority of the Treasurer.
17
The Treasurers Report shall summarize cash and investment activity and changes in
balances and include the following:
► A certification by City Treasurer;
► A listing of Purchases and sales/maturities of investments;
► Cash and Investments categorized by authorized investments, except for
LAIF which will be provided quarterly and show yield and maturity;
► Comparison of month end actual holdings to Investment Policy
limitations;
► Current year and prior year monthly history of cash and investments for
trend analysis;
► Balance Sheet;
► Distribution of cash and investment balances by fund;
► A comparison of actual and surplus funds;
► A year to date historical cash flow analysis and projection for the next six
months.
11 14 ON •] X-Tel 1 1 P 0 •
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.
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.
MAW, EVA *5 1 X 14 0 1 Will 51TJ H91MAZOTRU Rim i was] a Wive
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 usually meets on
a monthly basis, but at least quarterly to 1) review account statements and
verifications to ensure accurate reporting as they relate to an investment activity, 2)
monitor compliance with existing Investment Policy and Procedures, and 3) review
W-01
and make recommendations concerning Investment Policy and procedures, investment
contracts and investment consultants.
The appendices include City of La Quinta Ordinance 2.70 entitled Investment Advisory
Board Provisions.
On an annual basis, the Investment policies will be initially reviewed by the Investment
Advisory Board and the City Treasurer. The Investment Advisory Board will forward
the Investment policies, with any revisions, to the City Manager and City Attorney for
their review and comment. A joint meeting will be held with the Investment Advisory
Board, City Manager, City Attorney, and City Treasurer to review the Investment
policies and comments, prior to submission to the City Council for their consideration.
The Investment Policies shall be adopted by resolution of the City of La Quinta City
Council on an annual basis. The Investment Policies will be adopted before the end
of June of each year.
19
Appendix A
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20
Appendix B
Chapter 2.70
INVESTMENT ADVISORY BOARD PROVISIONS
Sections:
2.70.010 General Rules Regarding Appointment.
2.70.020 Board meetings.
2.70.030 Board functions.
2.70.010 General rules regarding appointment
A. Except as set out below, see Chapter 2.06 for General Provisions.
B. 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".
C. 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.
D. 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 that have a bearing on the
appropriateness of that member's service on the board. Such matters may include, but are not
limited to, changes in employment, changes in residence, or changes in clients.
2.70.020 Board meetings.
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.
A. 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; (2) monitor compliance with existing Investment Policy and procedures; and
(3) review and make recommendations concerning Inves-*.inent Policy and procedures,
investment contracts, and investment consultants.
B. The Board will report to City Council after each meeting either in person or through
correspondence at a regular City Council meeting.
21
Appendix C
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 r:iay 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
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
Appendix D
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
24
Appendix E
LISTING OF APPROVED FINANCIAL INSTITUTIONS
1. Banking Services
- Wells Fargo Bank, Government Services,
Ontario, California
2. Custodian Services
- Bank of New York, Los Angeles, California
3. Deferred Compensation
- International City/County Management
Association
Retirement Corporation
4. Broker/Dealer Services
- Merrill Lynch, Indian Wells, CA
Morgan Stanley Dean Witter, San Francisco,
California
Salomon Smith Barney, Newport Beach, CA
5. Government Pool -
State of California Local Agency Investment
Fund
City of La Quinta Account
La Quinta Redevelopment Agency
6. Bond Trustees -
1991 City Hall Revenue Bonds - US Bank
1991 RDA Project Area 1 - US Bank
1992 RDA Project Area 2 - US Bank
1994 RDA Project Area 1 - US Bank
1995 RDA Project Area 1 & 2.- US Bank
Assessment Districts - US Bank
No Changes to this listing may be made without City Council approval.
25
Appendix F
BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION
1 . Name of Firm:
2. Address:
3.
a
Telephone: ( )
Broker's Representative to the City (attach resume):
Name:
Title:
Telephone: ( )
5 . Manager/Partner-in-charge (attach resume) :
Name:
Title:
Telephone:
6. List all personnel who will be trading with or quoting securities to City
employees (attach resume)
Name:
Title:
Telephone: ( ) ( )
7. Which of the above personnel have read the City's Investment Policy?
8. Which instruments are offered regularly by your local office? (Must equal
100%)
% U.S. Treasuries
% BA's
% Commercial Paper
% C D's
% Mutual Funds
% Agencies (specify) :
26
% Repos
% Reverse Repos
CMO's
Derivatives
% Stocks/Equities
% Other (specify) :
9. References -- Please identify your most directly comparable public sector clients
in our geographical area.
Entity
Contact
Telephone
Client Since
Entity
Contact
Telephone
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.
12.
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.
Has a client ever claimed in writing that yu were responsible for an
investment loss? Yes No If yes, please provide
action taken
Has a client ever claimed in writing that your form was responsible for an
investment loss? Yes No If yes, please provide
action taken
27
Do W= 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.
16.
Is your firm a member in the S.I.P.C. insurance program. Yes No
If yes, explain primary and excess coverage and carriers.
17. What portfolio information, if any, do you require from your clients?
18. What reports and transaction confirmations or any other research publications
will the City receive?
19. Does your firm offer investment training to your clients? Yes No
20. Does your firm have professional liability insurance. Yes No
If yes, please provide the insurance carrier, limits and expiration date.
21. 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'
*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,
strategic 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.
29
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
30
Appendix G
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?
31
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?
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?
32
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)?
OPERA TONS
The answers to these questions will help you determine whether this pool meets your
operational requirements:
1. Does the pool limit eligible participants?
2. What entities are permitted to invest in the pool?
3. Does the pool allow multiple accounts and sub -accounts?
4. Is there a minimum or maximum account size?
5. Does the pool limit the number of transactions each month? What is the number
of transactions permitted each month?
6. Is there a limit on transaction amounts for withdrawals and deposits?
a. What is the minimum and maximum withdrawal amount permitted?
b. What is the minimum and maximum deposit amount permitted?
7. How much notice is required for withdrawals/deposits?
8. What is the cutoff time for deposits and withdrawals?
9. Can withdrawals be denied?
10. Are the funds 100% withdrawable at anytime?
11. What are the procedures for making deposits and withdrawals?
a. What is the paperwork required, if any?
b. What is the wiring process?
12. Can an account remain open with a zero balance?
33
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.
1. Are statements for each account sent to participants?
a. What are the fees?
b. How often are they passed?
c. How are they paid?
d. Are there additional fees for wiring funds (what is the fee)?
2. Are expenses deducted before quoting the yield?
QUESTIONS TO CONSIDER FOR BOND PROCEEDS
It is important to know (1) whether the pool accepts bond proceeds and (2) whether
the pool qualifies with the U.S. Department of the Treasury as an acceptable
commingled fund for arbitrage purposes.
1. Does the pool accept bond proceeds subject to arbitrage rebate?
2. Does the pool provide accounting and investment records suitable for proceeds of
bond issuance subject to arbitrage rebate?
3. Will the yield calculation reported by the pool be acceptable to the IRS or will it
have to be recalculated?
4. Will the pool accept transaction instructions from a trustee?
5. Are you allowed to have separate accounts for each bond issue so that you do not
cor-iningle the interest earnings of funds subject to rebate with funds not subject
to regulations?
0
Appendix H
GLOSSARY
(Adopted from the Municipal Treasurers Association)
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/or
Government -sponsored enterprises.
ASKED: The price at which securities are offered.
BANKERS' ACCEPTANCE (BA): A draft or bill of
exchange accepted by a bank or trust company.
The accepting institution guarantees payment of
the bill, as well as the issuer.
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 deposit
with a specific maturity evidenced by a
certificate. Large -denomination CD's are typically
negotiable.
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: Short-term unsecured
promissory notes issued by a corporation to raise
working capital. These negotiable ir.jtruments
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.
35
COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR): The official annual report for the City of
La Quinta. It includes five combined statements
for each individual fund and account group
prepared in conformity with GAAP. It also
includes supporting schedules necessary to
demonstrate compliance with finance -related
legal and contractual provisions, extensive
introductory material, and a detailed Statistical
Section.
COUPON: (a) The annual rate of interest that a
bond's issuer promises to pay the bondholder on
the bond's face value. (b) A certificate attached
to a bond evidencing interest due on a payment
date.
DEALER: A dealer, as opposed to a broker, acts
as a principal in all transactions, buying and
selling for his own account.
DEBENTURE: A bond secured only by the general
credit of the issuer.
DELIVERY VERSUS PAYMENT: There are
two methods of delivery of securities: delivery
versus payment and delivery versus receipt.
Delivery versus payment is delivery of securities
with an exchange of money for the securities.
Delivery versus receipt is delivery of securities
with an exchange of a signed receipt for the
securities.
DERIVATIVES: (1) Financial instruments whose
return profile is linked to, or derived from, the
movement of one or more underlying index or
security, and may include a leveraging factor, or
(2) financial contracts based upon notional
amounts whose value is derived from an
underlying index or security (interest rates,
foreign exchange rates, equities or commodities).
DISCOUNT: The difference between the cost
price of a security and its maturity when quoted
at lower than face value. A security selling 3.
below original offering price shortly after sale
also is considered to be at a discount.
DISCOUNT SECURITIES: Non -interest bearing
money market instruments that are issued a
discount and redeemed at maturity for full face
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 individuals,
e.g., S&L's, small business firms, students,
farmers, farm cooperatives, and exporters.
1. FNMAs (Federal National Mortgage
Association) - Used to assist the home
mortgage market by purchasing mortgages
insured by the Federal Housing
Administration and the Farmers Home
Administration, as well as those guaranteed by
the Veterans Administration. They are issued in
various maturities and in minimum denominations
of $10,000. Principal and Interest is paid
monthly.
2. FH Bs (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
36
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.
FLBs (Federal Land Bank Bonds) - Long-term
mortgage credit provided to farmers by Federal
Land Banks. These bonds are issued at
irregular times for various maturities ranging
from a few months to ten years. The
minimum denomination is $1,000. They carry
semi-annual coupons. Interest is calculated on
a 360-day, 30 day month basis.
4. FFCBs (Federal Farm Credit Bank) - Debt
instruments used to finance the short and
intermediate term needs of farmers and the
national agricultural industry. They are issued
monthly with three- and six-month maturities.
The FFCB issues larger issues (one to ten year)
on a periodic basis. These issues are highly
liquid.
5. FI -Bs (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.
P ?images 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 DEPOSITOR INSURANCE
CORPORATION (FDIC): A federal agency that
insures bank deposits, currently up to $100,000
per deposit.
FEDERAL FUNDS RATE: The rate of interest at
which Fed funds are traded. This rate is
currently pegged by the Federal Reserve through
open -market operations.
FEDERAL HOME LOAN BANKS (FHLB):
Government sponsored wholesale banks
(currently 12 regional banks) which lend funds
and provide correspondent banking services to
member commercial banks, thrift institutions,
credit unions and insurance companies. The
mission of the FHLBs is to liquefy the housing
related assets of its members who must purchase
stock in their district Bank.
FEDERAL OPEN MARKET COMMITTEE (FOMC):
Consists of seven members of the Federal
Reserve Board and five of the twelve Federal
Reserve Bank Presidents. The President of the
New York Federal Reserve Bank is a permanent
member, while the other Presidents serve on a
rotating basis. The Committee periodically meets
to set Federal Reserve guidelines regarding
purchases and sales of Government Securities in
the open market as a means of influencing the
volume of bank credit and money.
FEDERAL RESERVE SYSTEM: the central bank of
the United States created by Congress and
consisting of a seven member Board of
Governors in Washington, D.C., 12 regional
banks and about 5,700 commercial banks that
are members of the system.
37
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA or Ginnie Mae): Securities
influencing the volume of bank credit guaranteed
by GNMA and issued by mortgage bankers,
commercial banks, savings and loan associations,
and other institutions. Security holder is protected
by full faith and credit of the U.S. Government.
Ginnie Mae securities are backed by the FHA, VA
or FMHM mortgages. The term "passthroughs" is
often used to describe Ginnie Maes.
LAIF (Local Agency Investment Fund) - A special
fund in the State Treasury which local agencies
may use to deposit funds for investment. There
is no minimum investment period and the
minimum transaction is $5,000, in multiples of
$1,000 above that, with a maximum balance of
$30,000,000 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 a'' funds from political
subdivisions that are placed in the custody of the
State Treasurer for investment and reinvestment.
MARKET VALUE: The price at which a security is
trading and could presumably be purchased or
sold.
MASTER REPURCHASE AGREEMENT: A written
contract covering all future transactions between
the parties to repurchase --reverse repurchase
agreements that establishes each party's rights in
the transactions. A master agreement will often
specify, among other things, the right of the
buyer -lender to liquidate the underlying securities
in the vent of default by the seller -borrower.
MATURITY: The date upon which the principal or
stated value of an investment becomes due and
payable
MONEY MARKET: The market in which short-
term debt instruments (bills, commercial paper,
banders' acceptances, etc.) are issued and
traded.
OFFER: The price asked by a seller of securities.
(When you are buying securities, you ask for an
offer.) See Asked and Bid.
OPEN MARKET OPERATIONS: Purchases and
sales of government and certain other securities
in the open market by the New York Federal
Reserve Bank as directed by the FOMC in order
to influence the volume of money and credit in
the economy. Purchases inject reserves into the
bank system and stimulate growth of money and
credit; sales have the opposite effect. Open
market operations are the Federal Reserve's most
important and most flexible monetary policy tool.
PORTFOLIO: Collection of all cash and securities
under the direction of the City Treasurer,
including Bond Proceeds.
PRIMARY DEALER: A group of government
securities dealers who submit daily reports of
market activity an depositions and monthly
financial statements to the Federal Reserve Bank
of New York and are subject to its informal
oversight. Primary dealers include Securities and
Exchange Commission (SEC) -registered securities
broker -dealers, banks and a few unregulated
firms.
QUALIFIED PUBLIC DEPOSITORIES: A financial
institution which does not claim exemption from
the payment of any sales or compensating use or
ad valorem taxes under the laws of this state,
which has segregated for the benefit of the
commission eligible collateral having a value of not
less than its maximum liability and which has been
approved by the Public Deposit Protection
Commission to hold public deposits.
RATE OF RETURN: The yield obtainable on a
security based on its purchase price or its current
market price. This may be the amortized yield to
maturity on a bond the current income return.
REPURCHASE AGREEMENT (RP OR REPO): A
repurchase agreement is a short-term investment
transaction. Banks buy temporarily idle funds
from a customer by selling U.S. Government or
other securities with a contractual agreement to
repurchase the same securities on a future date.
Repurchase agreements are typically for one to
ten days in maturity. The customer receives
interest from the bank. The interest rate reflects
both the prevailing demand for Federal funds and
the maturity of the repo. Some banks will
execute repurchase agreements for a minimum of
$100,000 to $ 500,000, but most banks have a
minimum of $1,000,000.
REVERSE REPURCHASE AGREEMENTS (RRP or
RevRepo) - A holder of securities sells these
securities to an investor with an agreement to
repurchase them at a fixed price on a fixed date.
The security "buyer" in effect lends the "seller"
money for the period of the agreement, and the
terms of , the agreement are structured to
compensate him for this. Dealers use RRP
extensively to finance their positions. Exception:
When the Fed is said to be doing RRP, it is lending
money, that is, increasing bank reserves.
SAFEKEEPING: A service to customers rendered
by banks for a fee whereby securities and
valuables of all types and descriptions are held in
the bank's vaults for protection.
SECONDARY MARKET: A market made for the
purchase and sale of outstanding issues following
the initial distribution.
SECURITIES & EXCHANGE COMMISSION:
Agency created by Congress to protect investors
in securities transactions by administering
securities legislation.
SEC RULE 15C3-1: See Uniform Net Capital Rule.
STRUCTURED NOTES: Notes issued by
Government Sponsored Enterprises (FHLB,
FNMAS, SLMA, etc.) And Corporations which
have imbedded options (e.g., call features, step-
up coupons, floating rate coupons, derivative -
based returns) into their debt structure, Their
market performance is impacted by the
fluctuation of interest rates, the volatility of the
imbedded options and shifts in the Shape of the
yield curve.
SURPLUS FUNDS: Section 53601 of the
California Government Code defines surplus
funds as any money not required for immediate
necessities of the local agency.
The City has defined immediate necessities to be
payment due within one week.
TREASURY BILLS: A non -interest bearing
discount security issued by the U.S. Treasury to
finance the national debt. Most bills are issued
to mature in three months, six months, or one
year.
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.
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UNIFORM NET CAPITAL RULE: Securities and
Exchange Commission requirement that member
firms as well as nonmember broker -dealers in
securities maintain a maximum ratio of
indebtedness to liquid capital of 15 to 1; also
called net capital rule and net capital ratio.
Indebtedness covers all money owed to a firm,
including margin loans and commitments to
purchase securities, one reason new public issues
are spread among members of underwriting
syndicates. Liquid capital includes cash and
assets easily converted into cash.
UNIFORM PRUDENT INVESTOR ACT: The State
of California has adopted this Act. The Act
contains the following sections: duty of care,
diversification, review of assets, costs,
compliance determinations, delegation of
investments, terms of prudent investor rule, and
application.
YIELD: The rate of annual income return on an
investment, expressed as a percentage. (a)
INCOME YIELD is obtained by dividing the current
dollar income by the current market price for the
security. (b) NET YIELD or YIELD TO MATURITY
is the current income yield minus any premium
above par of plus any discount from par in
purchase price, with the adjustment spread over
the period from the date of purchase to the date
of maturity of the bond.