2000 03 08 IABP.O. Box 1504
78-495 CALLE TAMPICO (760) 777-7000
LA QUINTA, CALIFORNIA 92253 (TDD) (760) 777-1227
AGENDA
INVESTMENT ADVISORY BOARD
Study Session Room
78-495 Calle Tampico- La Quinta, CA 92253
March 8, 2000 - 5:30 P.M.
I CALL TO ORDER
a. Pledge of Allegiance
b. Roll Call
II PUBLIC COMMENT - (This is the time set aside for public comment on any matter not scheduled on the agenda.)
III CONFIRMATION OF AGENDA
IV CONSENT CALENDAR
A. Approval of Minutes of Meeting on February 9, 2000 for the Investment
Advisory Board.
V BUSINESS SESSION
A. Transmittal of Treasury Report for January, 2000
B. Consideration of Fiscal Year 2000/01 Investment Policy
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report - February, 2000
B. Pooled Money Investment Board Reports - December, 1999
C. LAIF Answer Book Update
VII BOARD MEMBER ITEMS
VIII ADJOURNMENT'
INVESTMENT ADVISORY BOARD
Meeting Date:
ITEM TITLE:
March 8, 2000
Transmittal of Treasury Report
for January 31, 2000
Business Session: A
Attached please find the Treasury Report for January 31, 2000.
Pursuant to Board Member Irwin's request, Staff contacted one of our Broker
Dealers to determine comparable rates for the following investments purchased on
January 21, 2000 for Commercial Paper.
3 Month T-Notes 5.58 YTM
6 Month T-Notes 5.93 YTM
60 Day Commercial Paper 5.80 YTM
RECOMMENDATION:
Review, Receive and File the Treasury Report for January 31, 2000.
John M. Falconer,
i
inance Director
4
MEMORANDUM
TO: La Quinta City Council
FROM: John M. Falconer, Finance Director/Treasurer
SUBJECT: Treasurer's Report for January 31, 2000
DATE: February 28, 2000
Attached is the Treasurer's Report for the month ending January 31, 2000. The report is submitted to
the City Council each month after a reconciliation of accounts is accomplished by the Finance Dept.
The following table summarizes the changes in investment types for the month:
Investment
Beginning
Purchased
Sold/Matured
Other
Ending
Change
Cash (1)
$2,066,229
($995,783)
1,070,446
($995,783)
LAW
$5,589,999
5,142,652
800,000
9,932,651
4,342,652
US Treasuries (2)
$22,035,034
0
0
(13,751)
22,021,283
(13,751)
US Gov't Agencies (2)
$19,664,798
2,965,313
3,000,000
53,869
19,683,980
19,182
Commercial Paper (2)
$0
3,982,420
0
6,334
3,988,754
3,988,754
Mutual Funds
$3,144,466
76,871
0
3,221,337
76,871
Total
$52 500 526
$12 167 256
$3 800 000
$949 331
$59 918 451
$7 417 925
I certify that this report accurately reflects all pooled investments and is in compliance with the California
Government Code; and ins 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 the Bank of New York
Monthly Custodian Report to determine the fair market value of investments at month end.
John M. Falcon r
Finance Director/Treasurer
Vco
Footnote
(1) The amount reported in the other column represents the net increase (decrease) of deposits and
withdrawals from the previous month.
(2) The amount reported in the other column represents the amortization of premium/discount for the
month on US Treasury, Commercial Paper and Agency investments.
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CITY OF LA QUINTA
CITY
CITY RDA
RDA FA
BALANCE SHEET 01/31/00
FIXED
LONG TERM FIXED
LONG TERM FINANCING LONG TERM
GRAND
ASSETS:
CITY ASSETS
DEBT RDA ASSETS
DEBT AUTHORITY DEBT
TOTAL
POOLED CASH
(2,217,090.01)
11,728,679.27
(35.21)
9,511,554.05
LQRP INVESTMENT IN POOLED CASH
705,000.00
INVESTMENT T-BILL/NOTES & OTHER
34,000,000.00
705,000.00
AUTO MALL CASH
685,813.69
34,000,000.00
LQRP CASH
99.730.58
885,813.89
BOND REDEMPTION CASH
413,414.40
28.73
99,730.58
BOND RESERVE CASH
413.443.13
BOND PROJECT CASH
14,172,097.39
586,878.55
14,758,975.94
BOND ESCROW CASH
PETTY CASH
1,000.00
CASH & INVESTMENT TOTAL 22,469,723.08
27,118,921.64
586,872.07
1,000.00
60,175,517.39
INVESTMENT IN LAND HELD FOR RESALE
ACCOUNTS RECEIVABLE
35,711.23
PREMIUM/DISCOUNT ON INVESTMENT
(240,552.25)
LQRP-ACCOUNTS RECEIVABLE
INTEREST RECEIVABLE
103,351.43
LOAN/NOTES RECEIVABLE
18.544.60
DUE FROM OTHER AGENCIES
127,984.00
DUE FROM OTHER GOVERNMENTS
DUE FROM OTHER FUNDS
785.501.19
DUE FROM RDA
6,890,277.20
INTEREST ADVANCE -DUE FROM RDA
1,516,565.34
ADVANCES TO OTHER FUNDS
378,803.74
NSF CHECKS RECEIVABLE
2,321.96
ACCRUED REVENUE
TRAVEL ADVANCES
1,082.95
EMPLOYEE ADVANCES
PREPAID EXPENSES
RECEIVABLE TOTAL
9,619,591.39
WORKER COMPENSATION DEPOSIT
RENT DEPOSITS
UTILITY DEPOSITS 75.00
MISC. DEPOSITS 2,100.00
DEPOSITS TOTAL 2.175.00
60,983.90
8,260,000.00 8,356,695.13
(16,513.98)
(257,066.23)
51,798.46
51.798.46
103.351.43
2,668,850.80
2,687,395.40
127.984.00
741,656.90
1,527,158.09
6,890,277.20
1,516,565.34
378,803.74
2,321.96
833.40
833.40
1.082.95
3,507,609.48 8,260,000.00 21,387,200.87
75.00
2,100.00
2,175.00
GENERAL FIXED ASSETS 1,289,894.28 15,146,522.00 10,233,506.05 26,669,722.33
ACCUMULATED DEPRECIATION (585,380.27) (585.360.27)
AMOUNT AVAILABLE TO RETIRE L/T DEBT 3,395,117.03 3,395,117.03
AMOUNT TO BE PROVIDED FOR L/T DEBT 1,677,482.02 94,961,111.06 8,260 000.00 104,898,593.08
TOTAL OTHER ASSETS 704,334.01 15,146,522.00 1,677,482.02 10,233,506.05 98,358,228.09 8,260,000.00 134,378,072.17
TOTAL ASSETS 42,795,024.08 15,146,522.00 1,677,482.02 30,626,531.12 10 233 506 05 _ .- 98.358.228.09_. 8,846,872.07 8.260.000 U0 215 94 965.43
LIABILITY
ACCOUNTS PAYABLE
DUE TO OTHER AGENCIES
1,138,120.58
DUE TO OTHER FUNDS
575.00
INTEREST ADVANCE -DUE TO CITY
ACCRUED EXPENSES
PAYROLL LIABILITIES
1,677.52
STRONG MOTION INSTRUMENTS
1,992.98
FRINGE TOED LIZARD FEES
21,740.00
SUSPENSE
130.128.81
DUE TO THE CITY OF LA QUINTA
PAYABLES TOTAL
1,294,234.89
ENGINEERING TRUST DEPOSITS
SO. COAST AIR QUALITY DEPOSITS
11,999.44 11,999.44
1,138,120.58
1,517,278.09 9,305.00 1,527,158.09
1,677.52
1,992.98
21,740.00
130,128.81
11.999.44 1,517,278.09 9,305.00 2,832,817.42
ARTS IN PUBLIC PLACES DEPOSITS
381,512.10
361,512.10
LQRP DEPOSITS
15,364.00
15,364.00
DEVELOPER DEPOSITS
1,262,530.35
1,262,530.35
MISC. DEPOSITS
365,789.95
365,789.95
AGENCY FUND DEPOSITS
1,313,134.04
1,313,134.04
TOTAL DEPOSITS
3,302,966.44 15,364.00
_
3.318.330.44
DEFERRED REVENUE 8.270.87
8,260,000.00 8,268,270.67
OTHER LIABILITIES TOTAL 8,270.67
8,280,000.00 8,268,270.67
COMPENSATED ABSENCES PAYABLE 337,880.86
337,880.86
DUE TO THE CITY OF LA QUINTA 1,327,601.72
8,406,842.34
9,734,444.06
DUE TO COUNTY OF RIVERSIDE
12,466,237.00
12.466.237.00
DUE TO C.V. UNIFIED SCHOOL DIST.
10,068,148.75
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 1,885,482.58
98,356,228.09
8,260,000.00 108,281,710.67
TOTAL LIABILITY 4,605,472.00 1,677,482.02 1,532,642.09 98,356,228.09 8,269,305.00 8,260,000.00 122,701,129.20
EQUITY -FUND BALANCE 38,190,352.08 15,146,522.00 29,093,889.03 10,233,506.05 577.567.07 93,241,8W.23
TOTAL LIABILITY & EQUITY 42,795,824.08 15,146,522.00 1,677,482.02 30,626,531.12 10.233.506.05 98,356,228.09 _ 8. 446.872.07 _._8.260.000.00 - 215.942.985.43_
CASH & INVESTMENT TOTAL 60,175,517.39
PREMIUM/DISCOUNT ON INVESTMENT (257,066.231
TOTAL 59,918,451.16
nay
i 1 l l 1T1**M1 41 t�•�
INVESTMENT ADVISORY BOARD
Meeting Date:
March 8, 2000
Consideration of Fiscal Year 2000/01
Investment Policies
BACKGROUND:
Business Session No. B
Pursuant to State Legislation the City investment policies must be approved on an
annual basis by the City Council. This approval is done in June of each year.
Continued review of the Investment policies for approval by City Council in June
2000.
, Finance Director
DRAFT
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 Major 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 speculation, but for investment, considering
the probable safety of their capital as well as the probable income to be derived.
Authority to manage the City of La Quinta's investment portfolio is derived from the
City Ordinance. Management responsibility for the investment program is delegated
to the City Treasurer, who shall establish and implement written procedures for the
operation of the City's investment program consistent with the Investment Policy. The
Treasurer shall establish and implement a system of internal controls to maintain the
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 ma_xiDortfolio positions
are listedn
iin AnPnd*x 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.
3
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.
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.
C'
City of La Quinta
Statement of Investment Policy
July 1, 2000 through June 30, 2001
Adopted by the City Council on
The general purpose of this document is to provide the 'rules and standards users must
follow in administering the City of La Quinta cash investments.
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.
This Investment Policy applies to all cash and investments of the City of La Quinta,
City of La Quinta Redevelopment Agency and the City of La Quinta Financing
Authority, hereafter referred in this document as the "City". These funds are reported
in the City of La Quinta Comprehensive Annual financial Report (CAFR) and include:
All funds within the following fund types:
► General
► Special Revenue
► Capital Projects
► Debt Service
► Internal Service
► Trust and Agency
► Any new fund types and fund(s) that may be created.
IV OBJECTIVES
The primary objective, in order of priority, of the City of La Quinta's investment
activity shall be:
1. Safety
Safety of principal is the foremost objective of the investment program.
Investments of the City of La Quinta shall be undertaken in a manner that seeks
to ensure the preservation of capital in the overall portfolio in accordance with
the permitted investments. The objective will be to mitigate credit risk and
interest rate risk.
Credit Risk - is the risk of loss due to the failure of the security issuer or
backer. Credit risk may be mitigated by:
► Limiting investments to the safest types of securities;
► Pre -qualifying the financial institutions, and broker/dealers, which
the City of La Quinta will do business; and
► Diversifying the investment portfolio so that potential losses on
individual securities will be minimized.
Interest Rate risk is the risk that the market value of securities in the
portfolio will fall due to changes in general interest rates. Interest rate
risk may be mitigated by:
► Structuring the investment portfolio so that securities mature to
meet cash requirements for ongoing operations, thereby avoiding
the need to sell securities on the open market prior to maturity;
and
► By investing operating funds primarily in shorter -term securities.
2. Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating
requirements that may be reasonably anticipated. This is accomplished by
structuring the portfolio so 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.
ON
3. Yield
The investment portfolio shall be, designed with the objective of attaining a
market rate of return throughout budgetary and economic cycles, taking into
account the investment risk constraints and liquidity needs. Return on
investment is of least importance compared to the safety and liquidity objectives
described above. The core of investments are limited to relatively low risk
securities in anticipation of earning a fair return relative to the risk being
assumed. Securities shall not be sold prior to maturity with the following
exceptions:
► A declining credit security could be sold early to minimize loss of
principal;
► Liquidity needs of the portfolio require that the security be sold.
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.
V PRUDENCE
The City shall follow the Uniform Prudent Investor Act as adopted by the State of
California in Probate Code Sections 16045 through 16054..
Section 16053 sets forth the terms of a prudent person which are as' follows:
Investments shall be made with judgment and care - under circumstances then
prevailing - which persons of prudence, discretion, and intelligence excerise in the
professional management of their own affairs, not for speculation, but for investment,
considering the probable safety of their capital as well as the probable income to be
derived.
• •"ilMolvalk
Authority to manage the City of La Quinta's investment portfolio is derived from the
City Ordinance. Management responsibility for the investment program is delegated
to the City Treasurer, who shall establish written procedures for the operation of the
investment program consistent with the Investment Policy. Procedures should include
reference to safekeeping, wire transfer agreements, banking service contracts, and
collateral/depository agreements. Such procedures shall include explicit delegation of
authority to persons responsible for investment transactions. No person may engage
7
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 Ci y Treasurer.
•� • ► 11 ffaq*t�
Investment responsibilities carry. added duties of insuring that investments are made
without improper influence or the appearance of improper influence.
Therefore, the City Manager, Assistant City Manager, and the City Treasurer shall
adhere to the State of California Code of Economic Interest and to the following:
► The City Manager, Assistant City Manager, and the City Treasurer shall not
personally or through a close relative maintain any accounts, interest, or private
dealings with any firm with which the City places investments, with the
exception of regular savings, checking and money market accounts, or other
similar transactions that are offered on a non-negotiable basis to the general
public. Such accounts shall be disclosed annually to the City Clerk in
conjunction with annual disclosure statements of economic interest.
► All persons authorized to place or approve investments shall report to the City
Clerk kinship relations with principal employees of firms with which the City
places investments.
The City of La Quinta 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:
No. 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.
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 collateralization in public monies.
• ; ► 1l ► k COIF-11► 1 11FR I 11 111 ril• ►
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 bills, 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.
• 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.
10
• 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 Paver - 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 in 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.
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.
11
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 Comoa� - 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
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.
12
Mortgage -Backed Securities - As authorized in Government code Section
53601 (n), local agencies may invest in mortgage -backed securities such as
mortgage pass -through securities and collateralized mortgage obligations for a
maximum period of five years in an amount not to exceed 20% of the agency's
portfolio. Securities eligible for investment shall have a "A" or higher rating.
The City of La Quinta Investment Policy does not allow investment in Mortgage -
Backed Securities.
Financial Futures and Financial Option Contracts - As authorized in Government
Code Section 53601.1, local agencies may invest in financial futures or option
contracts in any of the above investment categories subject to the same overall
portfolio limitations. The City of La Quinta Investment Policy does not allow
investments in financial futures and financial option contracts.
Certificates of Deposit - As authorized in Government Code Section 53649,
Certificates of Deposit are fixed term investments which are required to be
collateralized from 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.
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.
13
Derivatives - The City of La Quinta Investment Policy does not allow
investment in derivatives.
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
directly to the entity and not to an investment advisor, broker or dealer. Money
market mutual funds and LAIF shall also operate on a DVP basis to be considered for
investment.
II RI '[913;1911
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
14
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 detection of errors and fraud;
► The accuracy and completeness of accounting records; and,
► Timely preparation of reliable financial information.
While no internal control system, however elaborate, can guarantee absolute assurance
that the City's assets are safeguarded, it is the intent of the City's internal control to
provide a reasonable assurance that management of the investment function meets the
City's objectives.
The internal controls shall address the following:
a. Control of collusion. Collusion is a situation where two or more employees are
working in conjunction to defraud their employer.
b. Separation of transaction authority from accounting and record keepina. By
separating the person who authorizes or performs the transaction from the
people who record or otherwise account for the transaction, a separation of
15
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 the appropriate person. Written
communications may be via fax if on letterhead and the safekeeping institution
has a list of authorized signatures. Fax correspondence must be supported by
evidence of verbal or written follow-up.
g. Development of a wire transfer agreement with the City's bank and third party
custodian. This agreement should outline the various controls, security
provisions, and delineate responsibilities of each party making and receiving wire
transfers.
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
16
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.
XV REPORTING STANDARDS
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.
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;
17
IN. 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.
The City's Investment Policy shall govern bond proceeds and bond reserve fund
investments. California Code Section 5922 (d) governs the investment of bond
proceeds and reserve funds in accordance with bond indenture provisions which shall
be structured in accordance with the City's Investment Policy.
Arbitrage Requirement
The US Tax Reform Act of 1986 requires the City to perform arbitrage calculations as
required and return excess earnings to the US Treasury from investments of proceeds
of bond issues sold after the effective date of this law. This arbitrage calculations may
be contracted with an outside source to provide the necessary technical assistance to
comply with this regulation. Investable funds subject to the 1986 Tax Reform Act will
be kept segregated from other funds and records will be kept in a fashion to facilitate
the calculations. The City's investment position relative to the new arbitrage
restrictions is to continue pursuing the maximum yield on applicable investments while
ensuring the safety of capital and liquidity. It is the City's position to continue
maximization of yield and to rebate excess earnings, if necessary.
XVII INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA
The Investment Advisory Board (IAB) consists of seven members of the community
that have been appointed by and report to the City Council. The IAB 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
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.
11 ► '• -•' •1�1
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
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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 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.
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 may have been
designated or placed in the city treasury. (Ord. 2 § I (part),
3.08.040 City bonds.
Bonds issued by the city and purchased pursuant to this chapter may be canceled
either in satisfaction of sinking fund obligations or otherwise if proper and appropriate;
provided, however, that the bonds may be held uncancelled and while so held may be
resold. (Ord. 2 § 1 (part), 1982)
22
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
Develop formal Investment Policy
Responsibilities
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
aAccounting Manager
accounting records
Investment verification - match broker confirmation
to City investment records Account Technician
Reconcile investment records
- to accounting records and bank statements
- to Treasurers Report
Account Technician
of investments
Security of investments at City Vault
Security of investments Outside City Third Party Custodian
Review internal control procedures External Auditor
PSI
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.
9
Telephone: ( ) ( )
Broker's Representative to the City (attach resume):
Name:
Title:
Telephone: ( )
5. Manager/Partner-in-charge (attach resume):
Name:
Title:
Telephone:
6. List all personnel who will be trading with or quoting securities to City
employees (attach resume)
Name:
Title:
Telephone: ( ) ( )
7. Which of the above personnel have read the City's Investment Policy?
8. Which instruments are offered regularly by your local office? (Must equal
100%)
% U.S. Treasuries
% BA's
% Commercial Paper
% C D's
% Mutual Funds
% Agencies (specify):
W
% 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.
1 1. Has your firm or your local office ever been subject to a regulatory or state/
federal agency investigation for alleged improper, fraudulent, disreputable or
unfair activities related to the sale of securities? Have any of your employees
been so investigated? If so,
explain.
12. Has a client ever claimed in writing that y-Qu were responsible for an
investment loss? Yes No If yes, please provide
action taken
Has a client ever claimed in writing that your firm was responsible for an
investment loss? Yes No If yes, please provide
action taken
27
Do y= have any current, or pending complaints that are unreported to the
NASD?
Yes No If yes, please provide action taken
Does your form 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.
22.
Please list your NASD Registration Number
Do you have any relatives who work at the City of La Quinta?
Yes No If yes, Name and Department
23. Do you maintain an office in California. Yes No
24. Do you maintain an office in La Quinta or Riverside County? Yes No
25. Please enclose the following:
• Latest audited financial statements.
• Samples of reports, transaction confirmations and any other
research/publications the City will receive.
• Samples of research reports and/or publications that your firm regularly
provides to clients.
• Complete schedule of fees and charges for various transactions.
'CERTIFICATION'
*CERTIFICATION
I hereby certify that I have personally read the Statement of Investment Policy of the
City of La Quinta, and have implemented reasonable procedures and a system of
controls designed to preclude imprudent investment activities arising out of
transactions conducted between our firm and the City of La Quinta. All sales personnel
will be routinely informed of the City's investment objectives, horizons, outlooks,
strategies and risk constraints whenever we are so advised by the City. We pledge to
exercise due diligence in informing the City of La Quinta of all foreseeable risks
associated with financial transactions conducted with our firm.
By signing this document the City of La Quinta is authorized to conduct any and all
background checks.
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?
SECURI T Y
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. 1s 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 TIONS
The answers to these questions will help you determine whether this pool meets your
operational requirements:
1. Does the pool limit eligible participants?
2. What entities are permitted to invest in the pool?
3. Does the pool allow multiple accounts and sub -accounts?
4. Is there a minimum or maximum account size?
5. Does the pool limit the number of transactions each month? What is the number
of transactions permitted each month?
6. Is there a limit on transaction amounts for withdrawals and deposits?
a. What is the minimum and maximum withdrawal amount permitted?
b. What is the minimum and maximum deposit amount permitted?
7. How much notice . is required for withdrawals/deposits?
8. What is the cutoff time for deposits and withdrawals?
9. Can withdrawals be denied?
10. Are the funds 100% withdrawable at anytime?
1 1. What are the procedures for making deposits and withdrawals?
a. What is the paperwork required, if any?
b. What is the wiring process?
12. Can an account remain open with a zero balance?
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
commingle the interest earnings of funds subject to rebate with funds not subject
to regulations?
34
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 instruments
are purchased at a discount to par value or at par
value with interest bearing. Commercial paper is
issued by corporations such as General Motors
Acceptance Corporation, IBM, Bank America, etc.
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. FHB (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
401
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 B (Federal Intermediate Credit bank
Debentures) - Loans to lending institutions
used to finance the short-term and
intermediate needs of farmers, such as
seasonal production. They are usually issued
monthly in minimum denominations of $3,000
with a nine -month maturity. Interest is
payable at maturity and is calculated on a
360-day, 30-day month basis.
6. FHLMCs (Federal Home Loan Mortgage
Corporation) - a government sponsored entity
established in 1970 to provide a secondary
market for conventional home mortgages.
Mortgages are purchased solely from the
Federal Home Loan Bank System member
lending institutions whose deposits are insured
by agencies of the United States Government.
They are issued for various maturities and in
minimum denominations of $10,000.
Principal and Interest is paid monthly.
Other federal agency issues are Small
Business Administration notes (SBAs),
Government National Mortgage Association
notes (GNMAs), Tennessee Valley Authority
notes (TVAs), and Student Loan Association
notes (SALLIE-MAEs).
FEDERAL 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 all funds from political
subdivisions that are placed in the custody of the
State Treasurer for investment and reinvestment.
MARKET VALUE: The price at which a security is
trading and could presumably be purchased or
sold.
MASTER REPURCHASE AGREEMENT: A written
contract covering all future transactions between
the parties to repurchase --reverse repurchase
agreements that establishes each party's rights in
the transactions. A master agreement will often
specify, among other things, the right of the
buyer -lender to liquidate the underlying securities
in the vent of default by the seller -borrower.
MATURITY: The date upon which the principal or
stated value of an investment becomes due and
payable
MONEY MARKET: The market in which short-
term debt instruments (bills, commercial paper,
banders' acceptances, etc.) are issued and
traded.
OFFER: The price asked by a seller of securities.
(When you are buying securities, you ask for an
offer.) See Asked and Bid.
OPEN MARKET OPERATIONS: Purchases and
sales of government and certain other securities
in the open market by the New York Federal
Reserve Bank as directed by the FOMC in order
to influence the volume of money and credit in
the economy. Purchases inject reserves into the
bank system and stimulate growth of money and
credit; sales have the opposite effect. Open
market operations are the Federal Reserve's most
important and most flexible monetary policy tool.
PORTFOLIO: Collection of all cash and securities
under the direction of the City Treasurer,
including Bond Proceeds.
PRIMARY DEALER: A group of government
securities dealers who submit daily reports of
market activity an depositions and monthly
financial statements to the Federal Reserve Bank
of New York and are subject to its informal
oversight. Primary dealers include Securities and
Exchange Commission (SEC) -registered securities
broker -dealers, banks and a few unregulated
firms.
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.
39
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.
INVESTMENT ADVISORY BOARD Correspondence & Written
Material Item A
Meeting Date: March 8, 2000
TITLE:
Month End Cash Report - February 2000
BACKGROUND:
This cash report is not a complete Treasury Report (exclude petty cash, deferred
compensation and fiscal agent balances, ) but would report in a timely fashion
selected cash balances.
Information item only.
John M. Falconer, Finance Director
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LAIF Performance Report, Philip Angelides
http://www.treasurer.ca.gov/Stolperfhtm
Philip Angelides, State Treasurer
Inside the State Treasurer's Office
Local Agency. Investment Fund
LAIF Performance
Reporting Date:
Effective Date:
Quarter Yield:
Daily:
Year:
Life:
Quarter Ending 12/31/99
Apportionment Rate:
Earnings Ratio:
Fair Value Factor:
Monthly Average For
January:
02/23/00
02/23/00
5.797%
5.876%
5.467%
190
5.49%
.00015005790909466
.997869313
5.771%
003
1 of 2 03/01/2000 4:59 PM
LAIF Performance Report, Philip Angelides
http://www.treasurer.ca.gov/Stolperfhtin
Loans
Corpnr,qtp► S 7�°A
Bo
6.9
Commercial
Paper
25.7%
Pooled Money Investment Acount
Portfolio Composition
36.4 Billion
1131!00
Reverses
_ 62% Treasuries
10.71 %
CD's/BN's
20.9%
e Deposits
8.01 %
Mortgages
0.04%
Agencies
23.54%
■ Treasuries
❑ Time Deposits
■ Mortgages
El Agencies
■ C D's/B N's
■ Commercial Paper
■ Corporate Bonds
Loans
■ Reverses
2 of 2
03/01/2000 4:59 PM
Federal Reserve Statistical Release H.15 - Daily Update
http://www.federalreserve.gov/Releases/H 15/update/
Federal Reserve Statistical Release
H.15
Selected Interest Rates
Release Date: March 1, 2000
H.15: Release I Release dates I About I ASCII I Historical data I Daily update
H.15 Daily Update
The weekly release is posted on Monday. Daily updates of the weekly release are posted
Tuesday through Friday on this site.
H.15 DAILY UPDATE: WEB RELEASE ONLY For immediate release
SELECTED INTEREST RATES March 1, 2000
Yields in percent per annum
Mon Tue
Feb 28 Feb 29
Instruments
SELECTED INTEREST RATES
Federal funds (effective) 1 2 3
5.81
5.85
Commercial paper 3 4 5 6
Nonfinancial
1-month
5.77
5.75
2-month
5.84
5.84
3-month
5.89
5.88
Financial
1-month
5.78
5.78
2-month
5.86
5.87
3-month
5.92
5.92
Bankers acceptances (top rated) 3 4 7
3-month
5.96
5.96
6-month
6.15
6.14
CDs ( secondary market)
1-month
5.85
5.86
3-month
6.01
6.04
6-month
6.24
6.27
Eurodollar deposits (London) 3 9
1-month
5.81
5.78
3-month
6.06
6.06
6-month
6.25
6.28
Bank prime loan 2 3 10
8.75
8.75
Discount window borrowing 2 11
5.25
5.25
U.S. Government securities
Treasury bills
Auction high 3 4 12
3-month
5.67
005
1 of 3
03/01/2000 5:04 PM
Federal Reserve Statistical Release H.15 - Daily Update
http://www.federalreserve.gov/Releases/H15/update/
6-month
5.77
1-year
5.84
Secondary market 3 4
3-month
5.63
5.62
6-month
5.74
5.77
1-year
5.83
5.88
Treasury constant maturities
3-month
5.80
5.78
6-month
6.02
6.02
1-year
6.21
6.20
2-year
6.47
6.53
3-year
6.50
6.58
5-year
6.53
6.61
7-year
6.62
6.67
10-year
6.37
6.42
20-year
6.47
6.46
30-year
6.16
6.15
Composite
Over 10 years (long-term) 14
6.42
6.41
Corporate bonds
Moody's seasoned
Aaa
7.75
7.69
Baa
8.38
8.33
State & local bonds 15
Conventional mortgages 16
FOOTNOTES
1. The daily effective federal funds rate is a weighted average of rates
on trades through N.Y. brokers.
2. Weekly figures are averages of 7 calendar days ending on Wednesday of
the current week; monthly figures include each calendar day in the
month.
3. Annualized using a 360-day year or bank interest.
4. On a discount basis.
5. Interest rates interpolated from data on certain commercial paper
trades settled by The Depository Trust Company. The trades represent
sales of commercial paper by dealers or direct issuers to investors
(that is, the offer side). See Board's Commercial Paper Web pages
(http://www.federaireserve.gov/releases/cp) for more information.
6. The 1-, 2-, and 3-month rates are equivalent to the 30-, 60-, and
90-day dates reported on the Board's Commercial Paper Web page.
7. Representative closing yields for acceptances of the highest rated
money center banks. Source: Telerate, Inc.
8. An average of dealer offering rates on nationally traded certificates
of deposit.
9. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time.
10. Rate posted by a majority of top 25 (by assets in domestic offices)
insured U.S.-chartered commercial banks. Prime is one of several base
rates used by banks to price short-term business loans.
11. Rate for the Federal Reserve Bank of New York.
12. Auction date for daily data; weekly and monthly averages computed
on an issue -date basis. Data are stop yields from uniform -price
auctions, rounded to two decimal places. (The U.S. Treasury
publishes stop yields to three decimal places at
http://www.publicdebt.treas.gov).
13. Yields on actively traded issues adjusted to constant maturities.
Source: U.S. Treasury.
2 of 3
03/01/2000 5:04 PM
Federal Reserve Statistical Release H.15 - Daily Update http://www.federalreserve.gov/Releases/H15/update/
14. Unweighted average of rates on all outstanding bonds neither due nor
callable in less than 10 years.
15. Bond Buyer Index, general obligation, 20 years to maturity, mixed
quality; Thursday quotations.
16. Contract interest rates on commitments for fixed-rate first mortgages.
Source: FHLMC.
DESCRIPTION OF THE TREASURY CONSTANT MATURITY SERIES
Yields on Treasury securities at "constant maturity" are interpolated
by the U.S. Treasury from the daily yield curve. This curve, which
relates the yield on a security to its time to maturity, is based on
the closing market bid yields on actively traded Treasury securities in
the over-the-counter market. These market yields are calculated from
composites of quotations obtained by the Federal Reserve Bank of New
York. The constant maturity yield values are read from the yield curve
at fixed maturities, currently 3 and 6 months and 1,.2, 3, 5, 7, 10, 20,
and 30 years. This method provides a yield for a 10-year maturity, for
example, even if no outstanding security has exactly 10 years remaining
to maturity. In estimating the 20-year constant maturity, the Treasury
incorporates the prevailing market yield on an outstanding Treasury bond
with approximately 20 years remaining to maturity.
H.15: Release I Release dates I About I ASCII I Historical data I Daily update
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To comment on this site, please fill out our feedback form.
Last update: March 1, 2000
0 0 "1
3 of 3 03/01/2000 5:04 PM
FR&Commercial Paper Rates and Outstandings
http://www.federalreserve.gov/Releases/CP/
Federal Reserve Release
Release I About I OutstandHistorical discount rates I Historical outstanding
.Data as of February 29, 2000 Volume
Commercial Paper Rates and Outstandings statistics
Derived from data supplied by The Depository Trust Company 1999:04
Posted March 1, 2000
Discount rates
AA AA A2/P2
financial nonfinancial nonfinancial
5.84 5.82 5.95
5.76 5.76 5.91
5.75 1 5.77 F 5.96
5.75 5.97
0445.87 5.84 6.07
91� „
5.92
5.88
6.12
Yield curve
Money market basis
Percent
1 7 15 30 BO 90
Days to Moturrly
Fina nc b I — — — Nonf ine neia I • •• • • A2/P2
Discount rate spread
Thirty -day A2/P2 less AA nonfinancial commercial paper (daily)
Basis points
6.25
6.20
6.15
6.10
6.05
6.00
5.95
5A0
5.85
5.80
5.75
110
100
90
80
70
60
50
40
30
20
1Q
01 MAY98 OQAUG98 17 NOY98 25 FES99 OWUN991 13S EP99 22❑ EC99 31 MAR00
-- — Alf P2 spr+ead, 5—doy may ing arse rage
A ' �
1 of 3 03/01/2000 5:05 PM
FRB:Commercial Paper Rates and Outstandings
http://www.federalreserve.gov/Releases/CP/
Discount rate history
Thirty -day commercial paper (daily)
0
a 1 'e.)
w � 9 Apo %-F 4.. 0% A ,,%
1 �
Percent
8
4
;I 7
M� 1
1
I
1
1 �r Pie
fir
4
01MAY98 09AU098 17NOV98 25FES99 05JUN99 13SEP99 220EC99 31MAR00
— Fnaneial — — — Nod inancial A2/P2
Outstandings
Weekly (Wednesday), seasonally adjusted
Billions of dollars Billions of dollars
1200
300
290
1 100280
270
1 COO �,�
250
240
900
l 230
22D
800 210
01 MAY98 09AU098 17N" 25 FE999 05J U N99 13SE P99 22a EC99 31 FMAR00
— Fna naia I — — — Nonfina nc is I
The daily commercial paper release will usually be available before 11:00am EST. However, the
Federal Reserve makes no guarantee regarding the timing of the daily commercial paper release.
When the Federal Reserve is closed on a business day, yields for the previous business day will
appear in the historical discount rates table. This policy is subject to change at any time without
notice.
009
2 of 3 03/01/2000 5:05 PM
FRB:Commercial Paper Rates and Outstandings
http://w-ww.federalreserve.gov/Releases/CP/
Commercial paper outstanding
Commercial naner nutvtandinvr
Release I About I Outstandings I Historical discount rates Historical outstandings
Home I Statistical releases
To comment on this site, please fill out our feedback form.
Last update: March 1, 2000
010
3 of 3
03/01/2000 5:05 PM
INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
March 8, 2000
Pooled Money Investment Board Report
for December 1999
The Pooled Money Investment Board Report
agenda packet.
RECOMMENDATION:
Receive & File
M. Falconer, Vinance Director
Correspondence & Written
Material Item B
r December, 1999 is included in the
STATE OF CALIFORNIA
STATE TREASURER'S OFFICE
POOLED MONEY INVESTMENT BOARD REPORT
DECEMBER 1999
TABLE OF CONTENTS
SUMMARY.......................................................................... .
SELECTED INVESTMENT DATA.............................................2
PORTFOLIO COMPOSITION...................................................3
INVESTMENT TRANSACTIONS...............................................4
TIME DEPOSITS...................................................................19
DEMAND BANK DEPOSITS...................................................27
POOLED MONEY INVESTMENT BOARD DESIGNATION .......... 28
PHILIP ANGELIDES
TREASURER
STATE OF CALIFORNIA
INVESTMENT DIVISION SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO
(000 OMITTED)
TYPE OF SECURITY
Government
Bills
Bonds
Notes
Strips
Total Government
DECEMBER 31, 1999
PERCENTAGE
CHANGEFROM
AMOUNT PERCENT PRIOR MONTH
$ 1,389,527
4.08
-1.53
0
0.00
0
2,347,393
6.89
-2.03
0
0.00
0
$ 3,736,920
10.97
-3.56
Federal Agency Coupons
$ 3,626,525
10.66
-1.13
Ceritficates of. Deposit
4,508,234
13.24
-3.16
Bank Notes
1,913,161
5.62
+.53
Bankers' Acceptances
0
0.00
0
Repurchases
0
0.00
0
Federal Agency Discount Notes
4,441,226
13.04
+2.39
Time Deposits
2,799,895
8.22
-.40
GNMAs
1,497
0.00
0
Commercial Paper
8,770,109
25.76
+4.83
FHLMC
14,590
0.04
-.01
Coporate Bonds
2,368,753
6.97
-.52
Pooled Loans
2,333,498
6.85
+1.23
GF Loans
0
0.00
-1.56
Reversed Repurchases
(466,811)
-1.37
-1.36
Total (All Types)
$ 34,047,597
100.00
INVESTMENT ACTIVITY
NUMBER
DECEMBER 99
NOVEMBER 99
Pooled Money
AMOUNT
464 $ 20,822,046
NUMBER
356
AMOUNT
$16,287,179
Other
32 27,568
26
86,322
Time Deposits
60 460,595
46
714,700
Totals
556 $ 21,310,209
428
$17,088,201
PMIA Monthly Average Effective Yield
5.639
5.484
Year to Date Yield Last Day of Month
5.359
5.305
2
£Z9`0v+
$
196` W 6
$
089`Z61. $
(100`S£)
$
06ti`9ZZ
$
£8ti` L61. $
Z09`00 L+
$
0£1`tiZ8
$
Z££`SZ6 $
L+
69
09
(996`88
OSL`OV9
$
969`09V $
£1+
1.6£
V9V
LZL`9Z£`£+
$
6 6£`SWL
$
9f�0`ZZ8`ZZ $
86L
V6�
99Z'0+
til£'S
6£9'S
VZL`9K $
69VOS L $
(9L8`Zti9) $
R VLV VZ£ $
£SZ`ti0S` I.£ $
��N`�tH�
86fih a38W3�3�0
G664 2138W3�3a
spund pa;oallooun aoq
saoliueS ao:j
seouele8 ;un000V puewea peglJosaad
4nl;obi4uaw4sanul /(ep)lJOM eBeaand
aagwnN
;unowV
suol;oesueal;lsodea ewll 1e40l
aagwnN
;unowd
suol;oesueal 4pnoeS le;ol
(sAea ul) pu3 y;uoW-a;l-I 06eaanb
PIGIA and;00"3
sBulu.ie3 pewoob
0110Wod AI1ea oBeiand
(SaNvsnOH1 NI SIM�-10a)
866� m38W333Q HAM 666� 2138W333a :10 NOSINVdWO3 b
viva 1N3W1S3AN1 :10 Jluvwwns
J.Nno33v 1N3W1S3AN1 A3NOW a3100d
Pooled Money Inv stment Account 12/31/99
Portfolio Co position
$34.0 B Ilion
Reverses
Loans _1.37% Treasuries
0
Corporate 6.85 /0 10.97%
Bonds
6.97%
Commercial
Paper
25.76%
CD's/BN's
18.86%
3
me Deposits
8.22%
Mortgages
0.04%
Agencies
23.7%
8 Treasuries
B Time Deposits
■ Mortgages
U Agencies
B CD's/BN's
El Bankers Acceptances
■ Repo
Commercial Paper
® Corporate Bonds
❑ Loans
0 Reverses
POOLED MONEY INVESTMENT ACCOUNT
SALES
Treas Notes
REDEMPTIONS
CD
Deutsche
CD
Deutsche
CP
W/F
CP
W/F
CP
W/F
CP
Morg Stan
CP
Text Fin
CP
Enron
CP
ConAgra
CP
GMAC
CP
GMAC
FFCB
FHLB
FHLB
PURCHASES91
CD
Bayer Lnds
CD
Bayer Lnds
PURCHASES
FHLB
FHLB
FHLB
FNMA
12/02/99 REDEMPTIONS
CD
Deutsche
CD
Deutsche
CD
Nova Scot
CD
Nova Scot
CD
ABN Amro
CD
ABN Amro
CP
Merrill
CP
Merrill
CP
Merrill
CP
Salomon
CP
Salomon
5.625% 04/30/00 5.560 50,000 558 $ 4,477,721.50 5.858
5.500%
12/01/99
5.500
50,000
13
99,305.56
5.576
5.500%
12/01/99
5.500
50,000
13
99,305.56
5.576
12/01/99
5.700
50,000
2
15,833.33
5.780
12/01/99
5.700
50,000
2
15,833.33
5.780
12/01/99
5.700
50,000
2
15,833.33
5.780
12/01/99
5.470
50,000
14
106,361.11
5.557
12/01/99
5.550
32,965
15
76,231.56
5.640
12/01/99
5.470
15,000
19
43,304.17
5.562
12/01/99
5.470
20,000
29
88,127.78
5.570
12/01/99
5.220
50,000
156
1,131,000.00
5.414
12/01/99
5.220
50,000
156
1,131,000.00
5.414
4.750%
12/01/99
4.908
50,000
365
2,451,184.32
4.909
4.900%
12/01/99
4.800
50,000
351
2,316,222.22
4.813
4.900%
12/01/99
4.800
50,000
351
2,316,222.22
4.813
6.260% 01 /06/00 6.250 20,000
6.260% 01 /06/00 6.250 50,000
5.840%
12/01 /00
5.980
50,000
5.965%
12/01/00
6.010
50,000
5.965%
12/01 /00
6.010
50,000
5.900%
12/01 /00
6.100
50,000
5.500%
12/02/99
5.500
25,000
14
53,472.22
5.576
5.500%
12/02/99
5.500
50,000
14
106,944.44
5.576
5.420%
12/02/99
5.420
50,000
91
685,027.78
5.495
5.420%
12/02/99
5.420
50,000
91
685,027.78
5.495
4.940%
12/02/99
4.950
50,000
365
2,509,132.74
5.018
4.940%
12/02/99
4.950
50,000
365
2,509,132.74
5.018
12/02/99
5.720
50,000
3
23,833.33
5.802
12/02/99
5.720
50,000
3
23,833.33
5.802
12/02/99
5.720
50,000
3
23,833.33
5.802
12/02/99
5.470
50,000
13
98,763.89
5.556
12/02/99
5.470
50,000
13
98,763.89
5.556
4
IONEY INVESTMENT ACCOUNT
a/ MATURITY
TRANS
PAR DAYS AMOUNT EFFECTIVE
CP,E QE ..:'..,
XIELQ
! HEi= EARNED
PURCHASES
CP Rohm
12/08/99
5.500
24,000
CP Rohm
12/08/99
5.500
50,000
CP GECC
12/08/99
5.430
26,000
CP GECC
12/08/99
5.430
- 50,000
12/08/99 SALES
Treas
Notes
5.625%
04/30/00
5.562
50,000
565
4,361,716.33
5.635
Treas
Notes
5.625%
04/30/00
5.562
50,000
565
4,361,716.33
5.635
Treas
Notes
5.625%
04/30/00
5.562
25,000
572
2,201,748.11
5.618
Treas
Notes
5.625%
04/30/00
5.562
25,000
572
2,205,654.36
5.629
REDEMPTIONS
BN
Banc One
5.400% 12/08/99
5.400
25,000
86
322,500.00
5.475
BN
Banc One
5.400% 12/08/99
5.400
50,000
86
645,000.00
5.475
BN
Banc One
5.400% 12/08/99
5.400
50,000
86
645,000.00
5.475
CP
GECC
12/08/99
5.430
26,000
1
3,921.67
5.506
CP
GECC
12/08/99
5.430
50,000
1
7,541.67
5.506
CP
Rohm
12/08/99
5.500
24,000
1
3,666.67
5.577
CP
Rohm
12/08/99
5.500
50,000
1
7,638.89
5.577
CP
ConAgra
12/08/99
5.620
30,000
21
98,350.00
5.716
CP
ConAgra
12/08/99
5.620
50,000
21
163,916.67
5.716
CP
JC Penney
12/08/99
5.620
50,000
26
202,944.45
5.721
CP
JC Penney
12/08/99
5.620
50,000
26
202,944.45
5.721
CP
JC Penney
12/08/99
5.620
50,000
37
288,805.56
5.731
PURCHASES
CB
Chevron
6.625%
10/01 /04
6.708
7,530
CD
Nova Scot
6.250%
01 /10/00
6.250
50,000
CD
Nova Scot
6.250%
01 /10/00
6.250
50,000
CD
Montreal
6.250%
01/10/00
6.250
50,000
CP
Bear
02/29/00
5.960
50,000
CP
Bear
02/29/00
5.960
50,000
CP
GECC
03/01/00
5.900
50,000
CP
GECC
03/02/00
5.900
5,000
CP
GECC
03/02/00
5.900
50,000
CP
SRAC
03/29/00
6.030
50,000
12/09/99 REDEMPTIONS
CD
Montreal
5.330%
12/09/99
5.330
50,000
71
525,597.22
5.404
CD
Montreal
5.380%
12/09/99
5.380
50,000
76
567,888.89
5.454
CD
Montreal
5.380%
12/09/99
5.380
50,000
76
567,888.89
5.454
CD
Fst Union
5.370%
12/09/99
5.370
50,000
77
574,291.67
5.444
CD
Fst Union
5.370%
12/09/99
5.370
50,000
77
574,291.67
5.444
CD
Toronto
5.370%
12/09/99
5.370
50,000
78
581,750.00
5.444
CD
Toronto
5.370%
12/09/99
5.370
50,000
78
581,750.00
5.444
Y
POOL,
' llONf 1NVESTMEHT ACC+aUNT
1
MATUR!"tY'
TRANS
PAR
GAYS `
AUNT
EFFECTIVE
kA"E
?:1EIl'Il2N
IEi,R
HEIR
E+ttELQ'
12/02/99
REDEMPTIONS (continued)
CP Salomon
12/02/99
5.500
8,000
14
17,111.11
5.588
CP Salomon
12/02/99
5.500
50,000
14
106,944.44
5.588
CP Comnwealth
12/02/99
5.650
13,463
14
29,581.20
5.741
CP Comnwealth
12/02/99
5.650
21,137
15
49,760.02
5.741
CP Text Fin
12/02/99
5.550
24,847
16
61,289.27
5.640
CP Heller
12/02/99
5.400
50,000
20
150,000.00
5.491
NO PURCHASES
12/03/99
REDEMPTIONS
CP Text Fin
12/03/99
5.550
42,400
16
104,586.67
•5.640
Disc Notes FHLMC
12/03/99
5.080
41,000
163
943,045.56
5.271
PURCHASES
CD Montreal
6.280%
01/13/00
6.280
50,000
CD Montreal
6.280%
01/13/00
6.280
50,000
PURCHASES./
Disc Notes FHLMC
01/20/00
5.480
1,420
Disc Notes FHLMC
01/20/00
5.480
50,000
12/06/99
SALES
Treas Notes
5.625%
04/30/00
5.554
25,000
580
2,235,739.86
5.623
Treas Notes
5.625%
04/30/00
5.554
25,000
580
2,235,739.86
5.623
Treas Notes
5.625%
04/30/00
5.554
50,000
580
4,471,479.72
5.623
SALES .c/
Disc Notes FHLMC
61/20/00
5.480
1,420
3
629.29
5.556
Disc Notes FHLMC
01/20/00
5.480
50,000
3
22,204.05
5.556
PURCHASES
CP Salomon
•
01/27/00
6.000
25,000
CP Salomon
01 /27/00
6.000
50,000
'FHLMC
5.990%
12/06/00
6.135
50,000
12/07/99
SALES
Treas Notes
5.625%
04/30/00
5.532
50,000
564
4,357,895.93
5.640
Treas Notes
5.625%
04/30/00
5.532
50,000
564
4,357,895.93
5.640
REDEMPTIONS
BN NationsBk
4.900% `
12/07/99
4.900
50,000
365
2,484,027.78
4.968
5
POOLED. MONEY INVESTMENT ACCbUNT
Af
a/ mauRMAN
S ANS PAR DAYS AMOUNT EFFECTIVE
r;ARNF.D X
12/09/99 REDEMPTIONS (continued)
CP
Lehman
12/09/99
5.400
50,000
76
570,000.00
5.538
CP
Lehman
12/09/99
5.400
50,000
76
570,000.00
5.538
CP
Morg Stan
12/09/99
5.350.
50,000
77,
572,152.78
5.487
CP
Morg Stan
12/09/99
5.350
50,000
77
572,152.78
5.487
Disc Notes
FNMA
12/09/99
5.150
50,000
71
71
507,847.22
507,847.22
5.275
5.275
Disc Notes
FNMA
12/09/99
12/09/99
5.150
5.190
50,000
50,000
77
555,041.67
5.321
Disc Notes
Disc Notes
FNMA
FNMA
12/09/99
5.190
50,000
77
555,041.67
5.321
Treas
Bills
12/09/99
4.410
50,000
337
2,064,125.00
4.663
Treas
Bills
12/09/99
4.410
50,000
337
2,064,125.00
4.663
Treas
Bills
12/09/99
4.465
50,000
346
2,145,680.50
4.729
Treas
Bills
12/09/99
4.465
50,000
346
2,145,680.50
4.729
Treas
Bills
12/09/99
4.365
50,000
351
2,127,937.50
4.622
Treas
Bills
12/09/99
4.365
50,000
351
2,127,937.50
4.622
Treas
Bills
12/09/99
4.320
50,000
353
2,118,000.00
4.573
Treas
Bills
12/09/99
4.320
50,000
353
2,118,000.00
4.573
Treas
Bills
12/09/99
4.270
50,000
359
2,129,069.44
4.521
Treas
Bills
12/09/99
4.270
50,000-
359
2,129,069.44
4.521
Treas
Bills
12/09/99
4.270
50,000
359
2,129,069.44
4.521
Treas
Bills
12/09/99
4.270
50,000
359
2,129,069.44
4.521
Treas
Bills
12/09/99
4.270
50,000
359
2,129,069.44
4.521
Treas
Bills
12/09/99
4.270
50,000
359
2,129,069.44
4.521
Treas
Bills
12/09/99
4.240
50,000
364
2,143,555.56
4.491
RRP
Treas
Bills
12/09/99
4.660,
50,000
71
(454,013.44)
-4.724
Treas
Bills
12/09/99
4.660
50,000
455,346.07)
-4.724
Treas
Bills
12/09/99
4.660
50,000
71
(455,346.07)
-4.724
Treas
Bills
12/09/99
4.660
50,000
76
(487,096.91)
-4.724
Treas
Bills
12/09/99
4.660
50,000
76
(487,096.91)
-4.724
Treas
Bills
12/09/99
4.660
50,000
76
(487,097.89)
-4.724
Treas
Bills
12/09/99
4.660
50,000
76
(487,097.89)
-4.724
Treas
Bills
12/09/99
4.660
50,000
77
(492,211.33)
-4.724
Treas
Bills
12/09/99
4.660
50,000
77
(492,211.33)
-4.724
Treas
Bills
12/09/99
4.660
50,000
77
(493,442.79)
-4.724
Treas
Bills
12/09/99
4.660
50,000
77
(493,442.79)
-4.724
Treas
Bills
12/09/99
4.670
50,000
77
(494,506.17)
-4.734
Treas
Bills
12/09/99
4.670
50,000
77
(494,506.17)
-4.734
Treas
Bills
12/09/99
4.645
50,000
78
(498,201.41)
-4.709
Treas
Bills
12/09/99
4.645
50,000
78
(498,201.41)
-4.709
PURCHASES
CD
BNParis
5.990%
02/29/00
5.970
40,000
CD
BNParis
5.990%
.02/29/00
5.970
50,000
CD
Svenska
5.230%
03/01/00
5.970
25,000
CD
BNParis
5.980%
03/01/00
5.970
35,000
CP
Assoc
12/10/99
5.490
50,000
7
POOLED MONEYINVESTMENT ACCOUNT
8l a/ MATURITY TRANS PAR DAYS AMOUNT:
fFECTNE
DATE E Ems► t I Btu )UELRam H£i E& ER VELD
12/09/99 PURCHASES (continued)
CP
Assoc
12/10/99
5.490
50,000
CP
Assoc
12/10/99
5.490
50,000
CP
Assoc
12/10/99
5.490
50,000
CP
Enron
01 /13/00
6.300
48,500
CP
Heller
02/01 /00
6.080
50,000
CP
Heller
02/01/00
6.080
50,000
CP
Bear
03/01/00
5.950
50,000
CP
Bear
03/01/00
5.950
50,000
CP
Salomon
03/02/00
5.900
35,000
CP
Bear
03/02/00
5.950
50,000
Disc Notes
FHLMC
08/29/00
5.580
50,000
Disc Notes
FNMA
09/11/00
5.600
50,000
Disc Notes
FNMA
09/11/00
5.600
50,000
Disc Notes
FNMA
11 /28/00
5.610
50,000
Disc Notes
FNMA
11/28/00
5.610
50,000
Treas
Bills
12/07/00
5.350
50,000
Treas
Bills
12/07/00
5.350
50,000
Treas
Bills
12/07/00
5.350
50,000
Treas
Bills
12/07/00
5.350
50,000
PURCHASES W
Treas
Bills
03/09/00
5.500
6,817
Treas
Bills
03/09/00
5.500
50,000
Treas
Bills
03/09/00
5.500
50,000
Treas
Bills
03/09/00
5.500
50,000
Treas
Bills
03/09/00
5.500
50,000
12/10/99 RRS
Treas Bills 02/03/00 5.050 50,000
Treas Bills 02/03/00 5.050 50,000
REDEMPTIONS
CP
Asoc
12/10/99
5.490
50,000
1
7,625.00
5.567
CP
Asoc
12/10/99
5.490
50,000
1
7,625.00
5.567
CP
Asoc
12/10/99
5.490
50,000
1
7,625.00
5.567
CP
Asoc
12/10/99
5.490
50,000
1
7,625.00
5.567
CP
Heller
12/10/99
5.700
50,000
10
79,166.67
5.788
SALES W
Treas
Bills
03/09/00
5.500
6,817
1
1,007.11
5.576
Treas
Bills
03/09/00
5.500
50,000
1
7,387.09
5.576
Treas
Bills
03/09/00
5.500
50,000
1
7,387.09
5.576
Treas
Bills
03/09/00
5.500
50,000
1
7,387.09
5.576
Treas
Bills
03/09/00
5.500
50,000
1
7,387.09
5.576
E
POOLED MONEY IN,YESTMENT ACCOUNT
al
MATURITY `
TRANS
PAR
DAYS
AMOUNT
EFFECTIVE"
E
12/10/99
PURCHASES g/
CD UBS
5.970%
02/03/00
5.960
50,000
CD UBS
5,970%
02/03/00
5.960
50,000
PURCHASES
MTN FR Chase
6.000%
04/23/02
6.120
12,000
PURCHASES C/
Treas Bills
05/11/00
5.520
20,075
Treas Bills
05/11/00
5.520
50,000
Treas Bills
05/11/00
5.520
50,000
12/13/99
REDEMPTIONS
Disc Notes FNMA
12/13/99
5.080
6,000
173
146,473.33
5.279
Disc Notes FNMA
12/13/99
5.045
50,000
180
1,261,250.00
5.247
Disc Notes FNMA
12/13/99
5.045
50,000
180
1,261,250.00
5.247
SALES sl
Treas Bills
05/11/00
5.520
20,075
3
8,843.96
5.596
Treas Bills
05/11/00
5.520
50,000
3
22,028.02
5.596
Treas Bills
05/11/00
5.520
50,000
3
22,028.02
5.596
PURCHASES
CID Amer Exp
12/14/99
5.550
50,000
CID Amer Exp
12/14/99
5.550
50,000
CID Amer Exp
12/14/99
5.550
50,000
CID Amer Exp
12/14/99
'5.550
50,000
CID ConAgra
01 /12/00
6.540
20,000
CID Enron
01714/00
6.430
25,000
CID Enron
01 /14/00
6.430
50,000
CP Merrill
02/10/00
6.050
50,000
CID Merrill
02/10/00
6.050
50,000
CID Merrill
02/10/00
6.050
50,000
CID Merrill
02/10/00
6.050
50,000
CID Bear
02/14/00
6.020
30,000
CID Bear
02/14/00
6.020
50,000
CP Bear
02/14/00
6.020
50,000
CP Assoc
02/29/00
5.900
50,000
CP W/F
02/29/00
6.000
50,000
MTN W/F
6.875%
05/10/01
6.400
25,000
12/14/99
REDEMPTIONS
CID Amer Exp
12/14/99
5.550
50,000
1
7,708.33
5.627
CID Amer Exp
12/14/99
5.550
50,000
1
7,708.33
5.627
w,
POOLED MONEY INVESTMENT ACCOUNT
PURCHASES
CID
Text Fin
CID
ConAgra
CID
GMAC
CID
GMAC
CID
GMAC
CID
FMCC
cp
FMCC
CID
Salomon
CID
Merrill
CID
Merrill
CID
Salomon
CID
Salomon
MTN
IBM Cr Corp
MTN
IBM Cr Corp
12/15/99 REDEMPTIONS
CID JP Morgan
PURCHASES
CD
ANZ
CD
ANZ
CD
Soc Gen
CD
Soc Gen
CD
Soc Gen
CD
Rabo
CD
Rabo
CID
ConAgra
CID
Morg Stan
CID
Morg Stan
CID
Merrill
CID
Merrill
Disc Notes
FHLMC
Disc Notes
FNMA
Disc Notes
FNMA
12/16/99 REDEMPTIONS
CID
Assoc
CID
Assoc
d/
PAR DAYS AMOUNT EFFECTIVE'
�►� YiF
50,000
50,000
01 /11 /00
6.370
50,000
01/13/00
6.620
30,000
01/14/00
6.260
50,000
01 /14/00
6.260
50,000
01 /14/00
6.260
50,000
01 /21 /00
6.260
50,000
01 /21 /00
6.260
50,000
01 /24/00
6.250
25,000
02/11 /00
6.010
50,000
02/11 /00
6.070
50,000
02/16/00
6.020
50,000
02/16/00
6.020
50,000
6.640% 10/29/01
6.530
8,190
6.450% 11 /12/02
6.658
14,845
12/15/99 5.220 50,000
6.020% 05/26/00
6.020% 05/26/00
6.030% 05/26/00
6.030% 05/26/00
6.030% 05/26/00
6.020% 05/31 /00
6.020% 05/31 /00
01 /12/00
01 /20/00
01 /20/00
03/06/00
03/08/00
12/14/00
12/08/00
12/08/00
6.020
6.020
6.030
6.030
6.030
6.020
6.020
6.660
6.350
6.350
6.020
6.020
5.700
5.700
5.700
12/16/99 5.090
12/16/99 5.090
10
50,000
50,000
50,000
50,000
50,000
50,000
50,000
20,000
50,000
50,000
50,000 .
50,000
50,000
50,000
50,000
50,000
50,000
1
1
170
176
176
7,708.33
7,708.33
1,232,500.00
1,244,222.22
1,244,222.22
5.627
5.627
5.426
5.292
5.292
POOLED MONEY INVESTMENT ACCOUNT
a/ MATURr Y TRANS PAR DAYS AMOUNT EFFECTNE
MA
12/16/99 PURCHASES
CD
Deutsche
6.020% 05/31/00
6.020
15,000
CD
Deutsche
6.020% 05/31 /00
6.020
50,000
CP
Assoc
12/17/99
5.490
50,000
CP
Assoc
12/17/99
5.490
50,000
CP
Assoc
12/17/99
5.490
50,000
CP
Assoc
12/17/99
5.490
50,000
CP
Amer Exp
12/24/99
5.470
50,000
CP
Salomon
01 /13/00
6.420
50,000
CP
Salomon
01 /13/00
6.420
50,000
CP
Morg Stan
01 /21 /00
6.350
50,000
CP
Merrill
03/06/00
6.000
50,000
CP
Merrill
03/06/00
6.000
50,000
CP
B/A
03/08/00
6.040
50,000
CP
B/A
03/08/00
6.040
50,000
CP
B/A
03/08/00
6.040
50,000
CP
B/A
03/08/00
6.040
50,000
Disc Notes
FNMA
12/05/00
5.710
50,000
Disc Notes
FNMA
12/08/00
5.710
50,000
12/17/99 REDEMPTIONS
CP
Assoc
12/17/99
5.490
50,000
1
7,625.00
5.567
CP
Assoc
12/17/99
5.490
50,000
1
7,625.00
5.567
CP
Assoc
12/17/99
5.490
50,000
1
7,625.00
5.567
CP
Assoc
12/17/99
5.490
50,000
1
7,625.00
5.567
CP
SRAC
12/17/99
5.090
50,000
177
1,251,291.67
5.293
PURCHASES
CP
Amer Exp
12/20/99
5.350
10,000
CP
Rohm
12/20/99
5.500
10,100
CP
Assoc
12/20/99
5.410
40,000
CP
GMAC
12/20/99
5.420
40,000
CP
Amer Exp
12/20/99
5.350
50,000
CP
Assoc
12/20/99
5.410
50,000
CP
GMAC
12/20/99
5.420
50,000
CP
GMAC
12/20/99
5.420
50,000
CP
GMAC
12/20/99
5.420
50,000
12/20/99 REDEMPTIONS
CP
Amer Exp
12/20/99
5.350
10,000
3
4,458.33
5.426
CP
Rohm
12/20/99
5.500
10,100
3
4,629.17
5.578
CP
Assoc
12/20/99
5.410
40,000
3
18,033.33
5.487
CP
GMAC
12/20/99
5.420
40,000
3
18,066.67
5.497
CP
Amer Exp
12/20/99
5.350
50,000
3
22,291.67
5.426
CP
Assoc
12/20/99
5.410
50,000
3
22,541.67
5.487
CP
GMAC
12/20/99
5.420
50,000
3
22,583.33
5.497
CP
GMAC
12/20/99
5.420
50,000
3
22,583.33
5.497
11
POOLED' MONEYINVESTMENT ACCOUNT
�l Af MATURITY TRANS PAR DAYS AMOUNT EFFECTIVE
RATE, IM PFACRIEVOK Ylk1S2tw1a+A R Y LL2
12/20/99 REDEMPTIONS (continued)
CP GMAC 12/20/99 5.420 50,000 3 22,583.33 5.497
PURCHASES
CP
Assoc
12/21/99
5.460
50,000
CP
Assoc
12/21/99
5.460
50,000
CP
Assoc
12/21/99
5.460
50,000
CP
Assoc
12/21/99
5.460
50,000
CP
Armstrong
01 /10/00
6.900
15,000
CP
ConAgra
01 /11 /00
6.800
40,000
CP
Country
01 /12/00
6.450
50,000
CP
SRAC
01 /24/00
6.450
50,000
CP
Heller
01 /24/00
6.750
50,000
Disc Notes
FNMA
12/11/00
5.740
5,000
Disc Notes
FNMA
12/11/00
5.740
50,000
Treas
Bills
12/07/00
5.592
50,000
Treas
Bills
12/07/00
5.592
50,000
12/21/99 REDEMPTIONS
CP
Assoc
12/21/99
5.460
50,000
1
7,583.33
5.536
CP
Assoc
12/21/99
5.460
50,000
1
7,583.33
5.536
CP
Assoc
12/21/99
5.460
50,000
1
7,583.33
5.536
CP
Assoc
12/21/99
5.460
50,000
1
7,583.33
5.536
Disc Notes
FHLMC
12/21/99
5.080
7,000
181
178,787.78
5.285
Disc Notes
FHLMC
12/21/99
5.080
50,000
181
1,277,055.56
5.285
PURCHASES
CD
Toronto
6.110% 03/21/00
6.095
50,000
CD
Toronto
6.110% 03/21/00
6.095
50,000
CP
Assoc
12/22/99
5.520
50,000
CP
Assoc
12/22/99
5.520
50,000
CP
Assoc
12/22/99
5.520
50,000
CP
Assoc
12/22/99
5.520
50,000
CP
Household
12/22/99
5.520
50,000
CP
FMCC
01 /07/00
6.460
50,000
CP
FMCC
01 /07/00
6.460
50,000
CP
Amer Exp
01 /12/00
6.450
50,000
CP
Country
01/27/00
6.470
24,550
Disc Notes
FHLB
12/15/00
5.770
50,000
Disc Notes
FNMA
12/15/00
5.750
40,000
Disc Notes
FNMA
12/15/00
5.750
50,000
Disc Notes
FNMA
12/15/00
5.750
50,000
Treas
Bills
12/07/00
5.607
50,000
Treas
Bills
12/07/00
5.607
50,000
12
POt3LED MONEY NVESTMENT ACCOUNT
Treas Bills
02/03/00
5.190
50,000
Treas Bills
02/03/00
5.190
50,000
REDEMPTIONS
CP Assoc
12/22/99
5.520
50,000
1
7,666.67
5.597
CP Assoc
12/22/99
5.520
50,000
1
7,666.67
5.597
CP Assoc
12/22/99
5.520
50,000
1
7,666.67
5.597
CP Assoc
12/22/99
5.520
50,000
1
7,666.67
5.597
C.P Household
12/22/99
5.520
50,000
1
7,666.67
5.597
CP SRAC
12/22/99
5.550
50,000
22
169,583.33
5.646
PURCHASES g/
CP Morg Stan
02/03/00
6.150
50,000
CP Morg Stan
02/03/00
6.150
50,000
PURCHASES
BN FR B/A
6.226%
01 /16/01
6.175
15,000
BN Banc One
6.070%
06/30/00
6.070
5,000
BN Banc One
6.070%
06/30/00
6.070
50,000
CP FMCC
01 /07/00
6.520
50,000
CP FMCC
01/10/00
6.510
50,000
CP FMCC
01/10/00
6.510
50,000
CP GECC
01/12/00
6.500
50,000
CP GECC
01/12/00
6.500
50,000
CP ConAgra
01 /13/00
7.000
15,000
CP Salomon
01 /18/00
6.550
44,700
CP Salomon
02/15/00
6.200
32,695
CP B/A
05/08/00
5.960
50,000
CP B/A
05/08/00
5.960
50,000
Disc Notes FNMA
12/15/00
5.780
50,000
Disc Notes FNMA
12/15/00
5.780
50,000
Disc Notes FNMA
12/15/00
5.780
50,000
Disc Notes FNMA
12/15/00
5.780
50,000
12/23/99 RRS
Treas Bills
02/03/00
5.200
50,000
Treas Bills
02/03/00
5.200
50,000
REDEMPTIONS
FNMA
5.740%
12/23/99
4.820
50,000
393
2,650,222.22
4.889
FNMA
5.740%
12/23/99
4.820
50,000
393
2,650,222.22
4.889
13
POOLED MONEY INVESTMENT ACCOUNT
PURCHASES
BN
B/A
BN
B/A
BN
B/A
BN
B/A
CP
Bear
CP
Bear
CP
Morg Stan
CP
Morg Stan
CP
Morg Stan
CP
Morg Stan
12/24/99 REDEMPTIONS
CP Amer Exp
NO PURCHASES
12/27/99 REDEMPTIONS
CD Den Danske
CD Den Danske
CP FMCC
CP FMCC
PURCHASES
BN
CP
CP
CP
CP
12/28/99 NO SALES
6.450%
01 /13/00
6.450
50,000
6.450%
01 /13/00
6.450
50,000
6.450%
01 /13/00
6.450
50,000
6.450%
01 /13/00
6.450
50,000
01 /13/00
6.520
5,000
01 /13/00
6.520
50,000
03/29/00
6.150
50,000
03/29/00
6.150
50,000
03/31/00
6.150
50,000
03/31 /00
6.150
50,000
12/24/99 5.470 50,000 8 60,777.78 5.552
5.540% 12/27/99
5.530
20,000
27
83,026.89
5.611
5.540% 12/27/99
5.530
50,000
27
207,567.23
5.611
12/27/99
5.280
50,000
103
755,333.33
5.435
12/27/99
5.280
50,000
103
755,333.33
5.435
B/A
6.060% 05/26/00
6.060
50,000
FMCC
01 /07/00
6.650
50,000
FMCC
01 /07/00
6.650
50,000
Heller
01 /10/00
6.700
25,000
Morg Stan
03/27/00
6.150
50,000
PURCHASES
BN
Banc One
BN
Banc One
CD
U/B Calif
CD
U/B Calif
CP
Amer Exp
CP
GECC
CP
GECC
CP
GECC
6.030%
05/26/00
6.030
50,000
6.030%
05/26/00
6.030
50,000
6.030%
05/26/00
6.030
50,000
6.030%
05/26/00
6.030
50,000
01 /11 /00
6.250
50,000
02/29/00
6.000
20,000
02/29/00
6.000
50,000
02/29/00
6.000
50,000
14
POt'3LEif MONEY INVESTMENT ACCOUNT
Disc Notes
FHLB -
05/31/00
5.800
46,350
Disc Notes
FHLMC
03/29/00
5.770
50,000
Disc Notes
FHLMC
03/29/00
5.770
50,000
Disc Notes
FHLMC
12/22/00
5.720
50,000
Disc Notes
FHLMC
12/22/00
5.720
50,000
Disc Notes
FHLMC
12/27/00
5.720
50,000
Disc Notes
FHLMC
12/27/00
5.
20
50,000
12/29/99 REDEMPTIONS
CD
Barclays
5.530%
12/29/99
5.
30
25,000
30
115,208.33
5.606
CD
WestDeut
5.560%
12/29/99
5.560
25,000
30
115,833.33
5.637
CD
Barclays
5.530%
12/29/99
5A
30
50,000
30
230,416.67
5.606
CD
Barclays
5.530%
12/29/99
5.530
50,000
30
230,416.67
5.606
CD
Barclays
5.530%
12/29/99
5.
30
50,000
30
230,416.67
5.606
CD
WestDeut
5.560%
12/29/99
5,
60
50,000
30
231,666.67
5.637
CD
WestDeut
5.560%
12/29/99
5.160
50,000
30
231,666.67
5.637
CD
CIBC
5.500%
12/29/99
5,00
50,000
40
305,555.56
5.576
CD
CIBC
5.500%
12/29/99
5A
00
50,000
40
305,555.56
5.576
CD
CIBC
5.500%
12/29/99
5.1100
50,000
40
305,555.56
5.576
CD
Bayer Ver
5.390%
12/29/99
5.
85
50,000
105
785,323.78
5.459
CD
Bayer Ver
5.390%
12/29/99
5.1185
50,000
105
785,323.78.
5.459
CD
BNParis
5.400%
12/29/99
5.
90
50,000
106
793,550.78
5.454
CD
BNParis
5.400%
12/29/99
5.395
50,000
107
801,768.67
5.469
CD
BNParis
5.400%
12/29/99
5.395
50,000
107
801,768.67
5.469
CD
CIBC
5.405%
12/29/99
5.4.00
50,000
111
832,512.62
5.474
CD
CIBC
5.405%
12/29/99
5.4.00
50,000
111
832,512.62
5.474
CD
WestDeut
5.400%
12/29/99
5.00
25,000
112
420,000.00
5.475
CD
Soc Gen
5.440%
12/29/99
5.1.35
25,000
112
422,728.69
5.510
CD
WestDeut
5.400%
12/29/99
5.
00
50,000
112
840,000.00
5.475
CD
WestDeut
5.400%
12/29/99
5.
00
50,000
112
840,000.00
5.475
CD
Bayer Ver
5.420%
12/29/99
5.415
50,000
112
842,346.22
5.490
CD
Bayer Ver
5.420%
12/29/99
5.415
50,000
112
842,346.22
5.490
CD
Soc Gen
5.440%
12/29/99
5.435
50,000
112
845,457.37
5.510
CD
WestDeut
5.400%
12/29/99
5.400
50,000
113
847,500.00
5.475
CD
RB Canada
5.410%
12/29/99
5.410
50,000
113
849,069.44
5.485
CD
RB Canada
5.410%
12/29/99
5410
50,000
113
849,069.44
5.485
CD
Soc Gen
5.440%
12/29/99
5.400
13,000
117
228,517.96
5.483
CD
RB Canada
5.390%
12/29/99
5.380
44,000
117
769,364.57
5.454
CD
RB Canada
5.390%
12/29/99
5.380
50,000
117
874,277.92
5.454
CD
RB Canada
5.390%
12/29/99
5.380
50,000
117
874,277.92
5.454
CID
Amer Exp
12/29/99
5.480
50,000
29
220,722.22
5.580
CID
Amer Exp
12/29/99
5.480
50,000
29
220,722.22
5.580
CP
Amer Exp
12/29/99
5
480
50,000
29
220,722.22
5.580
CID
Amer Exp
12/29/99
5
480
50,000
29
220,722.22
5.580
CID
Amer Exp
12/29/99
5
480
50,000
30
228,333.33
5.581
CID
Amer Exp
12/29/99
5
480
50,000
30
228,333.33
5.581
CID
Amer Exp
12/29/99
5
480
50,000
30
228,333.33
5.581
CID
Amer Exp
12/29/99
5
480
50,000
30
228,333.33
5.581
15
POOLED MONEY INVESTMENT ACCOUNT
a/ MATURITY TRANS PAR DAYSAMOUNT EFFECTIVE
All E g ^'"F. ARIE 30N QW YIEL I► IRS? F NF YIJEL1i
12/29/99 REDEMPTIONS (continued)
CID
FMCC
12/29/99
5.400
25,000
40
150,000.00
5.508
CID
FMCC
12/29/99
5.400
50,000
40
300,000.00
5.508
CID
FMCC
12/29/99
5.400
50,000
40
300,000.00
5.508
CID
FMCC
12/29/99
5.400
50,000
40
300,000.00
5.508
CID
FMCC
12/29/99
5.280
50,000
105
770,000.00
5.437
CID
FMCC
12/29/99
5.280
50,000
105
770,000.00
5.437
CID
FMCC
12/29/99
5.280
50,000
105
770,000.00
5.437
CID
FMCC
12/29/99
5.280
50,000
105
770,000.00
5.437
PURCHASES
BN
B/A
6.000%
06/28/00
6.000
50,000
BN
B/A
6.000%
06/28/00
6.000
50,000
CD
ANZ
5.910%
06/28/00
5.910
25,000
CD
ANZ
5.910%
06/28/00
5.910
50,000
CD
Bayer Lnds
5.910%
06/28/00
5.910
50,000
CD
Bayer Lnds
5.910%
06/28/00
5.910
50,000
CD
Soc Gen
6.140%
09/27/00
6.140
50,000
CD
Soc Gen
6.140%
09/27/00
6.140
50,000
CD
U/B Calif
6.350%
12/27/00
6.350
50,000
CD
U/B Calif
6.350%
12/27/00
6.350
50,000
CD
U/B Calif
6.350%
12/27/00
6.350
50,000
CD
U/B Calif
6.350%
12/27/00
6.350
50,000
CID
Amer Exp
03/27/00
5.500
50,000
CP
Amer Exp.
03/27/00
5.500
50,000
CID
Amer Exp
03/27/00
5.500
50,000
CID
Amer Exp
03/29/00
5.650
50,000
CID
Amer Exp
03/29/00
5.650
50,000
CID
Amer Exp
03/29/00
5.650
50,000
Disc Notes
FHLB
12/22/00
5.750
50,000
Disc Notes
FHLB
12/22/00
5.750
50,000
Disc Notes
FHLB
12/22/00
5.750
50,000
Disc Notes
FHLB
12/22/00
5.750
50,000
Disc Notes
FHLB
12/22/00
5.770
50,000
Disc Notes
FHLMC
12/22/00
5.680
50,000
Disc Notes
FHLMC
12/22/00
5.680
50,000
12/30/99 NO SALES
PURCHASES
CID
FMCC
05/26/00
5.630
50,000
CID
FMCC
05/26/00
5.630
50,000
CID
FMCC
05/26/00
5.630
50,000
CID
FMCC
05/26/00
5.630
50,000
CID
FMCC
05/26/00
5.630
50,000
CID
FMCC
05/26/00
5.630
50,000
CID
FMCC
05/26/00
5.630
50,000
CID
FMCC
05/26/00
5.630
50,000
16
POOLED MONEYiNV'ESTMENT ACCOUNT
el MATURITY TRANS PAR DAYS AMOUNT EFFECTIVE
12/30/99 . PURCHASES (continued)
CP FMCC 05/26/00 15.630 50,000
12/31/99 NO SALES
NO PURCHASES
17
1 The abbreviations indicate the type of security purchased or sold;
i.e., (U.S.) Bills, Bonds, Notes, Debentures, Discount Notes,
and Participation Certificates: Federal National Mortgage Association
(FNMA), Farmers Home Administration Notes (FHA), Student Loan
Marketing Association (SLMA), Small Business Association (SBA),
Negotiable Certificates of Deposit (CD), Negotiable Certificates of
Deposit Floating Rate (CD FR), Export Import Notes (EXIM),
Bankers Acceptances (BA), Commercial Paper (CP), Government
National Mortgage Association (GNMA), Federal Home Loan Bank
Notes (FHLB), Federal Land Bank Bonds (FLB), Federal Home Loan
Mortgage Corporation Obligation (FHLMC PC) & (FHLMC GMC),
Federal Farm Credit Bank Bonds (FFCB), Federal Farm Credit Discount
Notes (FFC), Corporate Securities (CB), U.S. Ship Financing Bonds
(TITLE XI'S), International Bank of Redevelopment (IBRD), Tennessee
Valley Authority (TVA) Medium Term Notes (MTN).
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.
/ Repurchase Agreement against Reverse Repurchase Agreement.
g/ Outright purchase against Reverse Repurchase Agreement.
h/ Security "SWAP" transactions.
i/ Buy back agreement.
RRS Reverse Repurchase Agreement.
RRP Termination of Reverse Repurchase Agreement.
18
AGOURA HILLS
Pacific Crest Bank
Pacific Crest Bank
Pacific Crest Bank
Pacific Crest Bank
East West Bank
East West Bank
East West Bank
East West Bank
East West Bank
Grand National Bank
Grand National Bank
Grand National Bank
Grand National Bank
Grand National Bank
BEVERLY HILLS
City National Bank
City National Bank
City National Bank
City National Bank
City National Bank
City National Bank
CAMERON PARK
Roseville First National Bank
Western Sierra National Bank
Western Sierra National Bank
North State National Bank
North State National Bank
North State National Bank
North State National Bank
North State National Bank
TO Counties Bank
Tri Counties Bank
TO Counties Bank
Tri Counties Bank
10/12/99
5.1
0
5,000,000.00
04/17/00
10/12/99
5.3
0
5,000,000.00
10/16/00
11 /30/99
5.7
0
5,000,000.00
12/01 /00
12/28/99
5.9
0
5,000,000.00
12/27/00
10/14/99
4.9
0
8,000,000.00
01 /21 /00
07/16/99
4.7
0
27,000,000.00
01 /21 /00
10/07/99
4.8
0
35,000,000.00
01 /14/00
11 /15/99
5.2
0
38,000,000.00
02/11 /00
12/28/99
5.4
0
12,000,000.00
04/03/00
10/15/99
4.9
0
1,000,000.00
01 /14/00
07/16/99
4.7
0
2,000,000.00
01 /14/00
08/13/99
5.1
0
3,000,000.00
02/07/00
12/07/99
5.2
0
3,000,000.00
03/06/00
09/20/99
4.8
0
3,095,000.00
01/20/00
07/27/99
5.0
tO
10,000,000.00
07/26/00
05/19/99
4.8
0
20,000,000.00
02/28/00
09/15/99
5.230
20,000,000.00
09/15/00
05/04/99
4.8
0
25,000,000.00
05/03/00
10/12/99
5.3
0
25,000,000.00
10/16/00
03/31 /99
4.7
0
50,000,000.00
03/31 /00
07/26/99 4.740 1,000,000.00 01 /24/00
11 /08/99 5.420 1,000,000.00 05/08/00
11 /05/99 5.210 3,000,000.00 02/03/00
09/07/99
5.240
500,000.00
09/01 /00
04/06/99
4.730
1,000,000.00
04/06/00
08/24/99
5.2
0 1,000,000.00
08/24/00
08/30/99
5.1
0 1,000,000.00
09/01/00
10/04/99
5.0
0 1,000,000.00
04/07/00
07/14/99
4.7
0 10,000,000.00
01 /11 /00
12/09/99
5.2
0 10,000,000.00
03/09/00
12/16/99
5.330
10,000,000.00
03/15/00
12/21 /99
5.520
10,000,000.00
03/20/00
19
NAME
CITY OF INDUSTRY
EverTrust Bank
TIME
DEPOSIT DATE
12/13/99
DEPOSITS
YIELD
5.210
PAR AMOUNT($)
1,000,000.00
MATURITY DATE
03/13/00
EverTrust Bank
12/21/99
5.490
2,000,000.00
03/24/00
EverTrust Bank
EL CENTRO
12/16/99
5.330
3,000,000.00
03/20/00
Valley Independent Bank
08/11 /99
5.150
3,750,000.00
02/07/00
Valley Independent Bank
FRESNO
08/11 /99
5.250
3,750,000.00
08/11 /00
United Security Bank
08/20/99
5.090
10,000,000.00
02/16/00
INGLEWOOD
Imperial Bank
07/29/99
4.840
18,000,000.00
03/30/00
Imperial Bank
09/23/99
5.050
18,000,000.00
02/24/00
Imperial Bank
10/14/99
5.190
20,000,000.00
04/13/00
Imperial Bank
10/28/99
5.450
20,000,000.00
06/22/00
Imperial Bank
12/22/99
2.920
25,000,000.00
07/06/00
Imperial Bank
08/23/99
5.040
25,000,000.00
03/02/00
Imperial Bank
09/09/99
5.220
25,000,000.00
03/09/00
Imperial Bank
09/16/99
4.970
25,000,000.00
01/27/00
Imperial Bank
10/21/99
5.290
25,000,000.00
05/25/00
Imperial Bank
11/18/99
5.500
25,000,000.00
05/18/00
Imperial Bank
08/12/99
5.100
26,000,000.00
04/27/00
Imperial Bank
07/15/99
4.800
50,000,000.00
02/03/00
Bank of Lodi
12/15/99
5.400
1,000,000.00
03/23/00
Bank of Lodi
10/08/99
5.110
2,000,000.00
04/10/00
Bank of Lodi
LOS ANGELES
12/15/99
5.400
2,000,000.00
03/23/00
Broadway Federal Bank
12/28/99
5.790
1,250,000.00
07/07/00
Broadway Federal Bank
07/01 /99
5.200
1,250,000.00
06/30/00
Broadway Federal Bank
09/29/99
5.230
2,500,000.00
10/02/00
Cathay Bank
12/20/99
5.850
9,000,000.00
06/19/00
Cathay Bank
12/29/99
5.500
10,000,000.00
03/28/00
20
NAME
LOS ANGELES (cont.)
Community Bank
12/07/99
5.700
5,000,000.00
12/08/00
Community Bank
06/22/99
5.030
5,000,000.00
06/22/00
Community Bank
10/25/99
5.490
5,000,000.00
10/27/00
Community Bank
12/13/99
5.650
10,000,000.00
12/15/00
Community Bank
08/11 /99
5.230
15,000,000.00
08/11 /00
Community Bank
07/13/99
4.750
20,000,000.00
01 /10/00
General Bank
07/20/99
4.680
7,000,000.00
01 /21 /00
General Bank
11/12/99
5.250
10,000,000.00
02/18/00
General Bank
07/27/99
4.730
15,000,000.00
02/02/00
General Bank
08/03/99
4.900
15,000,000.00
02/14/00
General Bank
08/13/99
5.110
25,000,000.00
03/10/00
General Bank
10/25/99
5.130
28,000,000.00
01 /24/00
Manufacturers Bank
12/06/99
5.300
10,000,000.00
03/06/00
Manufacturers Bank
12/23/99
5.650
10,000,000.00
03/27/00
Manufacturers Bank
11 /09/99
5.170
10,000,000.00
02/07/00
Preferred Bank
11 /30/99
5.340
2,000,000.00
02/28/00
Preferred Bank
07/16/99
4.700
3,000,000.00
01/18/00
Preferred Bank
09/28/99
4.820
3,000,000.00
01/04/00
Preferred Bank
11/16/99
5.270
4,000,000.00
02/14/00
Preferred Bank
12/03/99
5.250
5,000,000.00
03/02/00
Preferred Bank
12/15/99
5.390
9,000,000.00
03/14/00
Preferred Bank
12/20/99
5.460
9,000,000.00
03/20/00
State Bank of India
11/19/99
5.600
2,000,000.00
11/30/00
Wilshire State Bank
08/31 /99
5.290
4,000,000.00
08/31 /00
MONTEREY PARK
Trust Bank FSB
12/27/99
5.510
4,000,000.00
03/27/00
Trust Bank FSB
12/27/99
5.790
2,000,000.00
06/26/00
O KDA1 E
Oak Valley Community Bank
05/06/99
4.830
500,000.00
05/22/00
Oak Valley Community Bank
08/10/99
5.220
500,000.00
08/09/00
Oak Valley Community Bank
09/27/99
5.190
500,000.00
09/29/00
Oak Valley Community Bank
11 /03/99
5.180
500,000.00
02/04/00
Oak Valley Community Bank
11 /03/99
5.360
500,000.00
05/01 /00
Oak Valley Community Bank
11/03/99
5.390
500,000.00
07/31/00
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
Oak Valley Community Bank
09/20/99
5.070
1,000,000.00
03/24/00
21
NAME
ONTARIO
Citizens Business Bank
Citizens Business Bank
Citizens Business Bank
Citizens Business Bank
Citizens Business Bank
Citizens Business Bank
Citizens Business Bank
PALO ALTO
Bay Area Bank
Cupertino National Bank
Cupertino National Bank
Cupertino National Bank
Mid -Peninsula Bank
Mid -Peninsula Bank
Mid -Peninsula Bank
Malaga Bank
PICO RIVERA
Pacific West National Bank
PFF Bank and Trust
PFF Bank and Trust
Bank of Petaluma
REDDING
North Valley Bank
03/09/99
4.850
5,000,000.00
03/08/00
03/23199
4.780
10,000,000.00
03/22/00
04/07/99
4.720
10,000,000.00
04/06/00
06/16/99
5.150
10,000,000.00
06/15/00
08/23/99
4.970
20,000,000.00
05/25/00
07/07/99
5.100
5,000,Ob0.00
07/06/00
08/10/99
5.220
10,000,000.00
08/09/00
10/08/99
5.140
5,000,000.00
04/17/00
08/06/99
4.980
10,000,000.00
02/04/00
08/30/99
5.120
10,000,000.00
02/25/00
10/19/99
5.090
10,000,000.00
03/22/00
03/10/99
5.180
10,000,000.00
03/08/00
08/30/99
5.120
10,000,000.00
02/25/00
08/06/99
4.980
15,000,000.00
02/04/00
12/28/99 5.490 6,000,000.00 03/28/00
11 /23/99 5.650 1,000,000.00 11 /30/00
11 /30/99
5.900
8,000,000.00
12/01 /00
09/08/99
5.600
10,000,000.00
03/10/00
08/10/99
5.140
1,000,000.00
02/07/00
03/23/99
4.780
3,000,000.00
03/22/00
22
RICHMOND
Mechanics Bank
03/08/99
4.840
10,000,000.00
03/07/00
Mechanics Bank
04/05/99
4.740
10,000,000.00
04/04/00
Mechanics Bank
05/06/99
4.810
10,000,000.00
05/05/00
Mechanics Bank
06/11/99
5.150
10,000,000.00
06/12/00
Mechanics Bank
08/12/99
5.250
10,000,000.00
08/11/00
Mechanics Bank
10/07/99
5.330
10,000,000.00
10/13/00
SACRAMENTO
American River Bank
09/29/99
4.990
1,000,000.00
04/03/00
American River Bank
12/28/99
5.490
3,000,000.00
03/27/00
American River Bank
12/28/99
5.770
1,000,000.00
06/26/00
American River Bank
12/28/99
5.960
1,000,000.00
12/27/00
Bank of Sacramento
12/03/99
5.320
500,000.00
03/03/00
River City Bank
07/13/99
4.780
5,000,000.00
01 /10/00
River City Bank
07/30/99
4.870
5,000,000.00
01/31/00
River City Bank
08/18/99
5.210
5,000,000.00
08/18/00
Sanwa Bank of California
07/27/99
5.010
5,000,000.00
07/26/00
Sanwa Bank of California
08/03/99
4.900
7,000,000.00
02/07/00
Sanwa Bank of California
07/15/99
5.000
10,000,000.00
07/14/00
Sanwa Bank of California
08/23/99
5.180
10,000,000.00
08/22/00
Sanwa Bank of California
08/16/99
5.190
50,000,000.00
08/15/00
Union Bank of California
10/27/99
5.150
50,000,000.00
01/25/00
Union Bank of California
11/16/99
5.270
50,000,000.00
02/15/00
Union Bank of California
08/26/99
5.160
100,000,000.00
02/23/00
Union Bank of California
09/28/99
5.040
100,000,000.00
03/28/00
Union Bank of California
11/02/99
5.130
100,000,000.00
02/01/00
Bank of Salinas 07/22/99 4.680 8,000,000.00 01/26/00
Bank of Salinas 09/16/99 4.930 12,000,000.00 01/27/00
First United Bank
11 /30/99
5.700
1,500,000.00
12/01 /00
San Diego First Bank
08/04/99
5.150
1,000,000.00
08/07/00
San Diego First Bank
06/22/99
5.030
1,500,000.00
06/21/00
23
Bank of Canton California
05/06/99
4.810
5,000,000.00
05/05/00
Bank of Canton California
05/13/99
4.780
5,000,000.00
05/12/00
Bank of Canton California
06/01/99
5.000
5,000,000.00
05/31/00
Bank of Canton California
06/02/99
5.000
5,000,000.00
05/31/00
Bank of Canton California
07/21/99
4.950
5,000,000.00
07/21/00
Bank of Canton California
09/01/99
5.280
5,000,000.00
09/01/00
Bank of Canton California
09/13/99
5.290
5,000,000.00
09/13/00
Bank of Canton California
11/10/99
5.460
10,000,000.00
11/10/00
Bank of Canton California
11/10/99
5.430
15,000,000.00
09/01/00
Bank of the West
06/08/99
4.820
25,000,000.00
02/16/00
Bank of the West
07/13/99
4.770
25,000,000.00
01 /12/00
Bank of the West
07/13/99
4.770
25,000,000.00
01 /12/00
Bank of the West
07/21/99
4.680
25,000,000.00
01/31/00
Bank of the West
08/27/99
4.960
25,000,000.00
05/25/00
Bank of the West
11/02/99
5.340
25,000,000.00
05/05/00
Bank of the West
05/19/99
4.890
30,000,000.00
05/25/00
Bank of the West
07/07/99
4.990
34,000,000.00
01/05/00
Bank of the West
04/29/99
4.760
51,500,000.00
04/29/00
Bank of the West
05/26/99
4.860
87,000,000.00
05/25/00
California Federal Bank
09/27/99
4.840
3,000,000.00
01/05/00
California Federal Bank
10/04/99
4.890
5,000,000.00
01/05/00
California Federal Bank
07/16/99
4.720
100,000,000.00
01/18/00
Millennium Bank
10/27/99
5.390
2,000,000.00
05/01/00
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
09/13/99
5.260
800,000.00
03/17/00
United Commercial Bank
10/07/99
5.360
10,000,000.00
10/13/00
United Commercial Bank
08/13/99
5.150
20,000,000.00
02/11/00
United Commercial Bank
09/03/99
5.310
20,000,000.00
09/01/00
United Commercial Bank
09/20/99
5.100
20,000,000.00
04/27/00
United Commercial Bank
10/04/99
5.030
20,000,000.00
04/05/00
United Commercial Bank
SANJOSE
12/17/99
5.380
25,000,000.00
03/20/00
San Jose National Bank
07/12/99
5.010
5,000,000.00
07/11/00
Bay Bank of Commerce
10/07/99
4.84
5,000,000.00
01/13/00
24
SAN LUIS OBISPO
First Bank of San Luis Obispo
First Bank of San Luis Obispo
First Bank of San Luis Obispo
First Bank of San Luis Obispo
First Bank of San Luis Obispo
San Luis Trust Bank
San Luis Trust Bank
Westamerica Bank
Westamerica Bank
Westamerica Bank
Westamerica Bank
Westamerica Bank
Westamerica Bank
SANTA BARBARA
FNB of Central California
FNB of Central California
Santa Barbara Bank & Trust
Santa Barbara Bank & Trust
Santa Barbara Bank & Trust
Santa Barbara Bank & Trust
Santa Barbara Bank & Trust
Santa Barbara Bank & Trust
Santa Barbara Bank & Trust
Santa Barbara Bank & Trust
Valencia Bank & Trust
Coast Commercial Bank
SARATOGA
Saratoga National Bank
Saratoga National Bank
10/04/99
4.890
1,000,000.00
01 /14/00
10/27/99
5.180
1,000,000.00
01 /25/00
11 /08/99
5.160
2,000,000.00
02/10/00
11 /22/99
5.270
2,500,000.00
02/22/00
11 /03/99
5.170
3,600,000.00
02/04/00
09/23/99
4.850
350,000.00
01/13/00
10/27/99
5.170
1,000,000.00
01 /31 /00
07/13/99
4.770
25,000,000.00
01 /12/00
07/20/99
4.680
25,000,000.00
01 /31 /00
07/21 /99
4.680
25,000,000.00
01 /27/00
07/27/99
4.770
25,000,000.00
01 /31 /00
11 /15/99
5.260
50,000,000.00
02/14/00
12/17/99
5.370
25,000,000.00
03/20/00
08/11 /99
5.140
5,000,000.00
02/07/00
10/01 /99
5.000
5,000,000.00
03/31 /00
07/08/99
4.760
5,000,000.00
01 /07/00
07/16/99
4.740
5,000,000.00
01 /14/00
07/19/99
4.740
5,000,000.00
01 /21 /00
08/13/99
5.150
5,000,000.00
02/11/00
08/31 /99
5.200
5,000,000.00
03/03/00
09/13/99
5.180
5,000,000.00
03/17/00
10/04/99
5.010
5,000,000.00
04/07/00
10/08/99
5.110
5,000,000.00
04/17/00
9123/99 5.28 1,000,000.00 9/22/00
12/14/99 5.360 20,000,000.00 03/13/00
06/22/99 5.100 1,750,000.00 06/30/00
10/01 /99 5.150 5,000,000.00 06/30/00
25
Union Safe Deposit Bank
08/16/99
5.140
10,000,000.00
02/15/00
Union Safe Deposit Bank
10/15/99
4.990
10,000,000.00
01/14/00
Union Safe Deposit Bank
12/16/99
5.380
10,000,000.00
03/15/00
Washington Mutual Bank
09/17/99
5.260
15,000,000.00
09/15/00
Washington Mutual Bank
10/13/99
5.370
15,000,000.00
10/27/00
Washington Mutual Bank
11/08/99
5.420
15,000,000.00
11/13/00
Washington Mutual Bank
12/20/99
5.940
15,000,000.00
12/28/00
China Trust Bank (USA)
12/17/99
5.380
5,000,000.00
03/17/00
China Trust Bank (USA)
11/15/99
5.270
5,000,000.00
02/14/00
China Trust Bank (USA)
12/06/99
5.280
10,000,000.00
03/06/00
China Trust Bank (USA)
12/10/99
5.240
10,000,000.00
03/09/00
China Trust Bank (USA)
09/27/99
4.840
10,000,000.00
01/05/00
China Trust Bank (USA)
10/25/99
5.130
15,000,000.00
01/24/00
South Bay Bank
07/21 /99
4.750
1,000,000.00
01 /31 /00
South Bay Bank
12/13/99
5.340
2,000,000.00
03/13/00
South Bay Bank
11 /02/99
5.400
2,000,000.00
05/01 /00
First Fidelity Thrift & Loan
10/25/99
5.120
4,000,000.00
01/28/00
First Fidelity Thrift & Loan
10/18/99
5.090
5,000,000.00
01 /18/00
First Fidelity Investment & Loan
11/10/99
5.210
6,000,000.00
02/11/00
Sunwest Bank
07/20/99
4.680
1,000,000.00
01 /21 /00
Sunwest Bank
09/10/99
5.170
1,000,000.00
03/08/00
Sunwest Bank
10/07/99
4.830
3,300,000.00
01/13/00
Sunwest Bank
10/12/99
4.870
3,500,000.00
01111 /00
Sunwest Bank
10/08/99
4.830
4,000,000.00
01/21/00
TOTAL TIME DEPOSITS AS OF DECEMBER 31, 1999
26
2,799,895,000.00
aim
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
BANK DEMAND DEPOSITS
DECEMBE 1999
($ in thousa ds)
BALANCES WARRANTS
PER BANKS OUTSTANDING
$ 74,957
437,735
341,139
341,139
341,139
252,547
460,834
2099698
2899162
374,113
3749113
3749113
357,551
465,467
598,794
299,284
497,897
497,897
497,897
552,387
431,410
142,925
460,488
3969405
396,405
3969405
600,046
4489411
531,473
961,882
1,513,935
AVERAGE DOLLAR DAYS $ 448,956AL
BL The prescribed bank balance for Decem
$185,262 in compensating balances for
funds of $ 198,800 and a deduction of $
27
$ 1,514,204
1,355,655
1,469,177
1,469,177
1,469,177
1,404,496
1,360,025
1,172,633
1,228,246
1,207,525
1,207,525
1,207,525
1,000,751
936,159
1,241,579
1,340,831
1,309,981
1,309,981
1,309,981
1,327,306
1,3729607
1,105,173
1,133,410
1,094,032
1,094,032
1,094,032
1,057,938
19398,002
19491,187
19851,969
1,967,923
ber was $ 384,062. This consisted of
services, balances for uncollected
6,220 for October delayed deposit credit.
DESIGNATION BY POOLED MONEY INVESTMENT BOARD
OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS
No. 1606
In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its
meeting on December 15, 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-
actions, 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
$ 204,887,000
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:
From To Transactions
( 1) 12/13/1999 12/17/1999 $ 2,033,300,000
(2) 12/20/1999 12/24/1999 $ 2,403,000,000
(3) 12/27/1999 12/31/1999 $ (503,600,000)
(4) 01/03/2000 01/07/2000 $ 2,932,800,000
(5) 01/10/2000 01/14/2000 $ (295,200,000)
(6) 01 /17/2000 01 /21 /2000 $ 1,138,000,000
(7) 01/24/2000 01/28/2000 $ (99,400,000)
(8) 01/31/2000 02/04/2000 $ 1,302,400,000
(9) 02/07/2000 02/11/2000 $ (685,300,000)
(10) 02/14/2000 02/18/2000 $ 577,900,000
Time Deposits in
Various Financial
Institutions
In Securities
(sections 16503a
Estimated
(section 16430)*
and 16602)*
Total
$ 28,553,405,000
$
2,658,895,000
$
31,212,300,000
$ 30,956,405,000
$
2,658,895,000
$
33,615,300,000
$ 30,452,805,000
$
2,658,895,000
$
33,111,700,000
$ 33,385,605,000
$
2,658,895,000
$
36,044,500,000
$ 33,090,405,000
$
2,658,895,000
$
35,749,300,000
$ 34,228,405,000
$
2,658,895,000
$
36,887,300,000
$ 34,129,005,000
$
2,658,895,000
$
36,787,900,000
$ . 35,431,405,000
$
2,658,895,000
$
38,090,300,000
$ 34,746,105,000
$
2,658,895,000
$
37,405,000,000
$ 35,324,005,000
$
2,658,895,000
$
37,982,900,000
From any of the amounts specifically designated above, not more than 30 percent in the aggregate may be invested
in prime commercial paper under section 16430(e), Government Code.
Additional amounts available in treasury trust account and in the Treasury from time to time, in excess of the
amounts and for the same types of investments as specifically designated above.
Provided, that the availability of the amounts shown under paragraph 2 is subject to reduction in the amount by
which the bank accounts under paragraph 1 would otherwise be reduced below the calendar month average balance
of $ 204,887,000.
POOLED MONEY INVESTMENT BOARD:
i
C irperson
Member
Dated: December 15, 1999
" Government Code Member
28
ME
INVESTMENT ADVISORY BOARD
Meeting Date:
March 8, 2000
Local Agency Investment Fund (LAIF)
Answer Book
iltelfteill 0
Correspondence & Written
Material Item C
Attached please find the updates to the LAIF Answer Book . The LAIF Answer
Book updates are received quarterly and passed on to the Investment Advisory
Board.
Receive and File
hn M. Falconer, Finance Director
� DECEMBER 31, 1999
•
n
QUARTERLY
ANSWE
UPDATE
REPLACEMENT PAGES
29 39 49 59 129 139 149 259 279 289 399 409 41 AND 42
•
•
•
Additionally, the PMIA has Policies, l
make certain that our goals of Safety, Liquid
prudent management prevails. These polici(
reviewed by both the PMIB and the LAIF Bi
The State Treasurer's Office is audi
annual basis. The resulting opi.nion is inclu(
monthly report following its publication. Tl
continuing audit process throughout the yeas
audited on a daily basis by the State Control
process involving three separate divisions.
foals and Objectives for the portfolio to
ity and Yield are not jeopardized and that
s are formulated by investment staff and
►ard on an annual basis.
by the Bureau of State Audits on an
.d in the subsequent Pooled Money
Bureau of State Audits also has a
All investment and LAIF claims are
,r's Office as well as an in-house audit
It has been determined that the State.of California cannot declare bankruptcy
under Federal regulations, thereby allowing the Government Code Section 16429.3 to
stand. This Section states that "money place with the state treasurer for deposit in the
LAIF shall not be subject to either: (a) trans er or loan pursuant to Sections 16310,
16312, or 16313, or (b) impoundment or seizure by any state official or state agency."
The LAIF has grown from 293 partici]
participants and $12.8 billion in 1999.
State Treasures
Local Agency Inv(
P.O. Box 94
Sacramento, CA
(916) 653-
http://www.treas
is and $468 million in 1977 to 2,766
's Office
stment Fund
2809
)4209-0001
3001
.ca.gov
2
Revised December 31, 1999
� BOARD MEMBERS
•
•
Local Agency A0visory Board
Chairman: PHILIP ANGELID
State Treasurer
Members: PATRICIA ELLIO
Manager, Financial Resources
Eastern Municipal Water District
BYRON SCORD LIS
Regional President
Wells Fargo Bank
ROBERT S. TOR EZ
CFO/Director of F nancial Management
City of Long Beach
LESLIE WELLS
Vice President
Union Bank of Ca ifornia
Capital Markets roue
Pooled Money In*estment Board
Chairman: PHILIP ANGELIDES
State Treasurer
Members: KATHLEEN CON ELL
State Controller
B. TIMOTHY GA E
Director of Finance
Revised December 31, 1999
•
•
•
LOCAL AGENCY INVESTMENT FUND
Participation �s of 12/31/99
2,766 A envies
184 BONDS 54
225 TRUSTEES 7%
8%
1184
DISTRI
66°
)UNTIES
2% 462 CITIES
17%
1
S
■ 54 COUNTIES
462 CITIES
■ 1,841 DISTRICTS
■ 225 TRUSTEES
■18 4 BONDS
4
Revised December 31, 1999
PHILIP AN ELIDES
TREAS RER
STATE OF C LIF RNIA
• INVESTMENT DIVISION SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY I SIVESTMENT ACCOUNT PORTFOLIO
(000 OM TIED
TYPE OF SECURITY
Government
Bills
Bonds
Notes
Strips
Total Government
Federal Agency Coupons
Ceritficates of Deposit
Bank Notes
Bankers' Acceptances
Repurchases
Federal Agency Discount Notes
Time Deposits
GNMAs
Commercial Paper
FHLMC
Coporate Bonds
Pooled Loans
GF Loans
Reversed. Repurchases
. Total (All Types)
DECEMBER 31, 1999
PERCENTAGE
CHANGEFROM
AMOUNT PERCENT PRIOR MONTH
$ 1,389,527 4.08
0 0.00
2,347,393 6.89
0 0.00
$ 3,736,920 10.97
$ 3,626,525
10.66
4,508,234
13.24
1,913,161
5.62
0
0.00
0
0.00
4,441,226
13.04
2,7999895
8.22
1,497
0.00
8,770,109
25.76
149590
0.04
2,368,753
6.97
2,333,498
6.85
0
0.00
(466,811) (1.37)
$ 34,047,597 100.00
-1.53
0
-2.03
0
-3.56
-1.13
-3.16
+.53
0
0
+2.39
-.40
0
+4.83
-.01
-.52
+1.23
-1.56
-1.36
Average Life of Portfolio as of December 31, 1999 is 194 Days Revised December 31, 1999
5
•
•
State of California
Pooled Money Investment Account
Marke Valuation
12 31/99
United States Treasury.
Bills $ 1,389,526,715.72 $ ,422,135,902.13 $ 1,420,350,830.48 NA
Notes $ 2,347,392,850.95 $ 347,392,850.95 $ 2,330,850,750.00 $ 25,809,452.75
Federal Agency:
Bonds
$ 2,821,859,587.83
$
,821,591,182.95
$ 2,803,044,984.20
$ 33,453,016.41
Floaters
$ 100,000,000.00
$
100,000,000.00
$ 100,000,000.00
$ 912,465.00
MBS
$ 449,497,198.39
$
449,497,198.39
$ 427,355,487.74
$ 2,435,877.67
GNMA
$ 1,497,373.43
$
1,497,373.43
$ 1,666,825.70
$ 14,749.71
SBA
$ 255,168,104.73
$
255,168,104.73
$ 254,839,239.37
$ 2,259,106.00
FHLMC PC
$ 14,589,871.70
$
14,589,871.70
$ 15,361,745.24
$ 234,209.98
Discount Notes
$ 4,441,225,663.92
$
,533,752,293.58
$ 4,531,237,376.08
NA
Bankers Acceptances
$ -
$
-
$ -
NA
Corporate :
Bonds
$ 1,021,775,497.48
$
,020,810,162.61
$ 1,011,097,212.75
$ 18,610,634.19
Floaters
$ 1,346,977,889.08
$
,346,859,144.35
$ 1,350,134,563.00
$ 9,044,801.77
CDs
$ 4,508,233,842.08
$
,505,607,046.23
$ 4,498,047,209.22
$ 82,307,645.27
Bank Notes
$ 1,913,161,212.40
$
,912,992,584.80
$ 1,910,657,120.27
$ 37,759,116.66
Repurchase Agreements
$ -
$
-
$ -
NA
Time Deposits
$ 2,799,895,000.00
$
,799,895,000.00
$ 2,799,895,000.00
NA
AB 55 & GF Loans
$ 2,333,498,378.10
$
,333,498,378.10
1,836,109,419.44
$ 2,333,498,378.10
NA
Commercial Paper
$ 8,770,108,843.47
$
1 $ 8,840,416,606.54
NA
Reverse Repurchase $ 466,810,844.64 $ 466,810,844.64 $ 466,810,844.64 $ 1,435,466.89
TOTAL $ 34,047,597,184.64 $ ,234,585,668.75 $ 34,161,642,484.05 $ 211,405,608.52
Fair Value Including Accrued Interest $ 34,373,048,092.57
Repurchase Agreements, Time Deposits, AB 55 & GiBineral Fund loans, and
Reverse Repurchase agreements are carried at portfolio book value (carrying cost).
The value of each participating dollar equals the fairvalue divided by the amortized cost (.997869313).
As an example: if an agency has an account balance of $20,000,000.00, then the agency would report its
participation in the LAIF valued at $19,957,386.26 or $20,000,000.00 x .997869313.
12
Revised December 31, 1999
•
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13
Revised
December 31, 1999
SOURCE
Pooled Money In
as of
$34.04
Surplus
Money
42.71 %
Other
0.23%
•
1
)F FUNDS
vestment Account
2/31/99
'Billion
neral
u nd
.34%
Local
Agencies
39.72%
14
Revised December 31, 1999
Lo
(0
0
CO
c1r)
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25
Revised December 31, 1999
•
•
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Revised December 31, 1999
LOCAL AGENCY IN
ADMINISTRATIVE I
ARTER PERCENT
IE�iDING EARNING,'
09/30/91
0.2;
12/31 /91
0.2;
03/31 /92
0.2
06/30/92
0.2;
09/30/92
0.2;
12/31 /92
0.2;
03/31 /93
0.2
06/30/93
0.21
09/30/93
0.2;
12/31 /93
0.2'
03/30/94
0.21
06/30/94
0.2
09/30/94
0.2'
12/31 /94
0.21
03/31 /95
0.21
06/30/95
0.1 !
09/30/95
0.2;
12/31 /95
0.2
03/31 /96
0.2;
06/30/96
0.1 !
09/30/96
0.2;
12/31 /96
0.21
03/31 /97
0.31
06/80/07
0.11
09/30/97
0.2;
12/31 /97
0.21
03/31 /98
0.24
06/30/98
0.11
09/30/98
0.01
12/31 /98
0.24
03/31 /99
02
06/30/99
0.3,
09/30/99
0.21
-12/31 /99
0.2;
The law provides that reimbursements ca
EARNINGS of the fund per quarter. Lis
(costs) per quarter.
STMENT FUND
ARNINGS (COST)
LGE OF
(COST)
1.7
1.7
1.4
1.2
1.2
1.2
1.2
1.2
1.0
1.2
1.1
1.1
1.4
1.4
1.5
1.2
1.3
1.5
1.3
1.0
1.2
1.5
1.7
0.9
1.3
1.4
1.4
0.9
0.5
1.3
1.2
1.6
1.1
1.2
not exceed one-half of 1 percent of the
.1d above is the percentage of earnings
FX
Revised December 31, 1999
•
DISCLOSURE STATEMENT
•
•
PORTFOLIO HOLDINGS: DERIVATIVES
STRUCTURED NOTES, AND ASSET -BACKED SECURITIES
The Treasury Investment Division h
inquiries concerning our various p(
involving structured notes, derivatii
securities are the most notable. We
acceptable definitions regarding the
confusion and disagreement with o-
In an effort to clarify the informatio
statements, we would like to share v
these financial products, as defined
Office (GAO).
In a recent survey of sales practices i
GAO provided definitions and examl
1) plain vanilla OTC derivatives, 2) r
3) structured notes, and 4) asset-bac
the GAO definitions, as well as the St
holdings in each category as of Dece
received a number of
:folio holdings. Questions
products, and asset -backed
ave found that the lack of
financial products has led to
reported positions.
. provided in our monthly
ith you our understanding of
y the U.S. General Accounting
)r these financial products the
les of what they considered
lore complex OTC derivatives,
zed securities. Following are
ite of California Treasurer's
nber 31, 1999:
39
Revised December 31, 1999
•
* 1. Plain Vanilla OTC Derivative
A derivative product is a financial ins rument whose market value is
derived from a reference rate, index, or value of an underlying asset.. OTC
derivatives are privately negotiated contract and are not traded on organized
exchanges.
*2.
U.S. $ 0 As of: 12/� 1 /99
More Complex OTC Derivative Products
Other more complex OTC derivatives
characteristics:
a. Their prices tend to be difficul
available from only a few dealers.
b. The payments required by the
the basis of more than one interest rate, cu
C. The derivative contract has to
future date.
have at least one of the following
to obtain because they are often
vative contract are calculated on
icy, asset, or other factor.
s that are not determined until some
d. The contract involves a term that acts as a multiplier or increases
the leverage of the rate (s) used to compute ayments.
e. The contract CAN entail potentially unlimited risk.
U.S. $ 0 As of:
The Pooled Money Investment Acca
will it invest in, Derivative Products as de
definitions #1 & #2. The GAO separatiol
asset -backed securities is consistent with
2/31/99
:ant Portfolio has not Invested in, nor
fined in General Accounting
of derivatives, structured notes, and
aASB 94-1.
Revised December 31, 1999
3. Structured Notes
Structured notes are debt securities (other than asset -backed securities) whose cash -
flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon
one or more indices and/or that have embedd d forwards or options. They are issued
by corporations and by government- sponsore4 enterprises such as the Federal National
Mortgage Association and the Federal Home Loan Bank System.
U.S. $1,511.850 million As of: 12/31/99
4. Asset -Backed Securities
Asset -backed securities, the bulk of which are mortgage -backed securities, entitle their
purchasers to receive a share of the cash flows from a pool of assets such as principal
and interest repayments from a pool of mortgages (such as CMOs) or credit card
receivables.
U.S. $720.752 million As of. 1 2/31/99
Securities Accountability
1) Vanilla Derivatives 0
2)
Complex Derivatives 0
3
Structured Notes
a.
Callable Agency
$
00.000 million
b.
3 month LIBOR Agency Floater
$
100.000 million
C.
3 month LIBOR Corporate Floater
$ 1,411.850 million
d.
2 year CMT Corporate Floater
$
00.000 million
e.
3 month T-Bill Agency Floater
$
00.000 million
f.
3 month T-Bill Corporate Floater
$
00.000 million
41
Revised December 31, 1999
C� J
•
4) Asset -Backed
a. Small Business Association PoOs
b. Agency CMOs
C. GNMA Pools
d. FHLMC PC Pools
$ 255.168 million
$ 449.497 million
$ 1.497 million
$ 14.590 million
Total Portfolio As of: 12/31 /99 $34704775977184.64
Financial Products as a percent of portfolio: 6.56%
42
Revised December 319 1999
MEMORAND�JM
May 19, 1999
To: City Treasurer and Members of the Investment Advisory Board
From: Don Moulin
Subject: Comparison of Certain Provisions in the Investment Policies of the Cities of La Quinta,
Oceanside, San Bruno and Santa Rosa'
During my attendance at the California Municipal
Conference last month, I discussed the content of in
city representatives responsible for them. After discu
I requested a copy of the investment policy from the
Rosa. These cities are somewhat comparable to La �
because their representatives are current officers of C
and quality. Santa Rosa's investment policy was r
Oceanside and Santa Rosa also furnished a copy of th
Treasurers' Association (CMTA) Annual
►estment policies and reports with several
sion of my intentions with John Falconer,
Cities of Oceanside, San Bruno and Santa
Uinta. However, I selected them primarily
MTA that are committed to MTA policies
;viewed and certified by MTA this year.
;ir March 1999 investment report.
I prepared a comparison of certain provisions of the investment policy of La Quinta's with the
policy of the three other cities. That comparison is attached.
Observations:
- La Quinta's investment policy is substantially more comprehensive than the three others. For
example, the other cities do not recite the state code covering authorized investments, instead
limiting the discussion to their city's authorized investments and limitations. The other cities'
policies do not cover banking arrangements, names of brokers and dealers, or a description of the
separation of responsibilities of employees for internal control purposes.
- Diversification is covered in each of the other linvestment policies but not as a separate
objective.
- Each of the other cities allows maximum maturitiesi of up to 5 years, enabling a higher portfolio
yield but with greater risk. Although allowing a maturity of 5 years, San Bruno and Santa Rosa
set limits on the extent of the portfolio with maturities over 1 year. San Bruno allows only 33%
of the portfolio to mature after 1 Il,
ar, and Santa Rosa allows 50% with a decreasing percentage
each additional year. At March 1999, Oceanside" portfolio had an average maturity of 1,269
s and yield of 5.92% and Santa Rosa's was ;38 days and 5.38%, respectively. The
portfolio eld of both cities exceeded LAIF's 5.12%. La Quinta's yield was 4.87%.
—Each of the other cities authorizes investments in bankers' acceptances, medium term corporate
notes (MTNs), and repurchase agreements that are not allowed by La Quinta. Of these three
possible vehicles, Oceanside and Santa Rosa are currently investing only in MTNs to the extent
of 8.19% and 20.8%, respectively, of the portfolio,at March 31, 1999. San Bruno and Santa
Rosa use credit ratings of MTNs to influence maturity limits, i.e., an AAA rating allows a
maturity up to 5 years while an A rating maturity is Iimited to 2 years. None of the other cities
has a fixed limitation on the amount of investment inli U.S. Treasury and Agency obligations.
Assessment and Recommendation:
Overall, La Quinta's investment policy compares very favorably with the others. It is
substantially more comprehensive and mformative� La Quinta's more restrictive investment
choices and the maturity limit of two years narrow opportunities for diversification, higher yields
and risk -spreading. Our investment limitations are less risk -based than the others, and, in that
regard, our policy may be somewhat riskier. I continue to favor a more risk -based approach to
certain of the limitations on investments. and recommend we reconsider that topic during our next
review of our City's investment policy in 2000.
INVESTMENT POLICIES
COMPARISON OF CERTAIN PROVISIONS IN THE INVESTMENT POLICIES
OF THE CITIES OF LA QUINTA, OCEANSIDE, SAN BRUNO AND SANTA ROSA
May, 1999
TLain
O can i
San Bruno
Santa Rosa
Objectives f der of priority:
. Safety o principal
Yes
Yes
Yes
Yes
2. Liquidity
Yes
Yes
Yes (1)
Yes
3. Return on investment
Yes
Yes
Yes
Yes
4. Diversification
Yes
Incl in 1 & 2.
Incl in 1.
Elsewhere
Oversight body selected by:
Council
Treasurer
None
Manager
Maximum maturities
2 yrs
State
State
State
33% +lyr
50% +1 yr
35% +2 yrs
25 % +3 yrs
15% +4yrs
Authorized investment limits:
U.S. Treasuries
75 %
None
None
None
U.S. Govt Agencies
75/25 % (2)
Prud invstr
Prud invstr
None
Bankers' acceptances
Not auth
20/5 %
40/10%
40/10%
Commercial paper
30%/$lM
15/5% (3)
15/10% (3)
30/10%
Medium term corp notes
Not auth
15/5% (3)
15/5% (3)
30/10%
A to 2 yrs
A to 2 yrs
AA to 3 yrs
AA to 4 yrs
AAA to 5 yrs
AAA to 5 yrs
Mutual funds
UST M1ViF
Not auth
Not auth
15/10%
20% 60 days
Repurchase agreements
Not auth
30% w/limits
30% w/limits
10% collatlzd
Reverse repurchase agreements
Not auth
10%
Not auth
Not auth
Time deposits'- CDs
60% collatlzd
15% collatlzd
15% collatlzd
FDIC insrd
Negotiable CDs
Not auth
Not auth
Not auth
30/10%
A to 2 yrs
AA to 4 yrs
5
AAA to yrs
Investment pools - LAIF
35%
State
State
State
-Other
Not auth
Not auth
County
30/10%
Specifically prohibited
Derivatives
Agency zeros
Derivatives,
Derivatives,
leveraging
interest only
strips, zeros
Benchmark
6 mo USTB
3 mo USTB
Similar bodies
LAIF-1 yr TB
No. of pages of policy - Basic
19
7
8
9
- Additional
20
8
None
None
Notes: (1) At least 50% of the portfolio is invested in "readily marketable" securities.
(2) "75/25 %" means 75 % of the portfolio and 25 % by a single issuer, bank or fund.
(3) Single issuer limits on commercial paper and medium term notes are combined.
(4) Oceanside's portfolio is actively managed and reacts to changing conditions.
This comparison is derived from the respective City's investment policy and is abbreviated See
each City's investment policy for complete information.
,AUfA OSk
COUNCIL POLICY
Subject: Policy Effective Number
Number Date of Pages
STATEMENT OF INVESTMENT POLICY 000-26 10-27-98 1 of 9
PURPOSE
The purpose of this document is to specify the policies and procedures that support a prudent and
systematic program for the investment of surplus funds.
REFERENCE
1. City of Santa Rosa Resolutions No. 8361 & 17133
2. State of California Government- Code Section 53601 et sec
SCOPE
This investment policy applies to all funds managed directly by the City of Santa Rosa. The City
maintains various portfolios including the City portfolio and numerous bond proceeds and
special district portfolios. Each portfolio is managed separately but shall be referred to
collectively as the "portfolio" for purposes of this policy. All funds are accounted for in the
City's Comprehensive Annual Financial Report.
OBJECTIVES
The objectives, in priority order, of the City of Santa Rosa's investment activities shall be:
Safety
Safety of principal is the foremost objective of the investment program. Investments of the City
shall be made in a manner that seeks to ensure the preservation of capital in the overall portfolio.
To attain this objective, the City will endeavor to mitigate credit and market risk.
Liquidity
The City's investment portfolio will remain sufficiently liquid to enable the City to meet all
operating requirements which might be reasonably anticipated. This will be achieved through
maturity diversification and purchases of securities with an established secondary market.
Return on Investments
The City's investment portfolio shall be designed with the objective of obtaining, throughout
budgetary and economic cycles, a rate of return commensurate with its investment risk
constraints and the cash flow characteristics of the portfolio.
COUNCIL POLICY
Subject:
Policy
Number
Effective
Date
Number
of Pages
STATEMENT OF INVESTMENT POLICY
000-26
10-27-98
2 of 9
STANDARDS OF CARE
Prudence
The City of Santa Rosa adheres to the guidance provided by the "prudent person " standard to
insure that:
"...investments shall be made with the exercise of that degree of judgement and care, under
circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in
the management of their own affairs, not for speculation but for investment, considering the
probable safety of their own capital as well as the probable income to be derived."
This standard of prudence is to be used by all investment staff and shall be applied in the context
of managing an overall portfolio.
Delegation of Authority
The authority to invest City funds rests with. the Chief Financial Officer (Director of
Administrative Services) herein referred to as CFO, and his designated staff, herein referred to as
investment staff. The City will establish written procedures for the operation of the investment
program consistent v-- :h this investment policy. Such procedures will include explicit delegation
of authority to persons responsible for investment transactions and shall be on file in the
Department of Administrative Services. No person may engage in an investment transaction
except as provided under the -terms of this policy and the procedures established. The CFO shall
be responsible for all transactions undertaken and will establish a system of controls to regulate
the activities of subordinate officials.
Investment Management Committee
An investment management committee shall be appointed by the City Manager for the purpose
of determining investment strategies and to monitor performance. This committee will include a
staff member representing the Board of Public Utilities and two staff persons as members at
large. The committee will make recommendations regarding portfolio diversification, economic
outlook and overall risk management.
AUTHORIZED AND SUITABLE INVESTMENTS
The City shall use as. its guideline for permissible investments, those securities specified in
sections 53601 et sec of the Government Code of the State of California. The City recognizes
COUNCIL POLICY
Subject:
Policy
Number _
Effective
Date
Number
of Pages
STATEMENT OF INVESTMENT POLICY
000-26
10-27-98
3 of 9
that investment risk can result from issuer defaults, market price changes or various technical
impediments leading to diminished liquidity or loss of capital. Portfolio risk management and
diversification are employed as a way to minimize.the risks inherent in investing.
Credit/Issuer Risk
The City will seek to mitigate credit risk by requiring that issuers and broker dealers meet
specific qualifying criteria. The following guidelines will be used to determine the distribution
for funds between issuers.
Negotiable Certificates of Deposit must be issued by a federal or state chartered bank or a state
savings association or a state licensed, domestic branch of a foreign bank. Issuers must possess
an acceptable long term senior debt rating by two of the nationally recognized rating services, ie
Moodys, Standard and Poors, Fitch or Duff & Phelps, as detailed below.
1. For maturities of two years or less, a minimum rating of "A" or better.
2. For maturities of two.to four years, a minimum rating of "AA" or better.
3. For maturities of four to five years, a minimum rating of "AAA".
Exceptions to these criteria may be made with the approval of the CFO, not to exceed 5% of the
total amount in each maturity sector. In the event that an issuer is downgraded to below "A",
staff will prepare an analysis of the exposure to the City and will make a recommendation
regarding possible sale.
Bankers Acceptances must be eligible for delivery through the Federal Reserve system.
Medium Term Corporate Notes, including Bank Notes and Deposit Notes, must be issued by
corporations doing business in the United States as outlined in the California Government Code.
Issuers must possess an acceptable long term senior debt rating by two of the nationally
recognized rating services, ie Moodys, Standard and Poors, Fitch or Duff & Phelps, as detailed
below.
1. For maturities of two years or less, a minimum rating of "A" or better.
2. For maturities of two to four years, a minimum rating of "AA" or better.
3. For maturities of four to five years, a minimum rating of "AAA".
COUNCIL POLICY
Subj ect:
Policy
Effective
Number
Number
Date
of Pages
STATEMENT OF INVESTMENT POLICY
000-26
10-27-98
4 of 9
Exceptions to these criteria may be made with the approval of the CFO, not to exceed 5% of the
total amount in each maturity sector. In the event that an issuer is downgraded to below "A",
staff will prepare an analysis of the exposure to the City ,and will make a recommendation
regarding possible sale.
This policy specifically excludes the purchase of issues that are supported by assets other than
letters of credit or support agreements, otherwise known as "asset backed" securities.
Mutual Funds - State Code limits investments in mutual funds to 15% of the entity's portfolio.
The City's policy to be for further limit participation in any one fund to 10% of the total
portfolio.
Investment Pools - The City will limit its participation in any one pooled money investment
program to 10% of the total portfolio. Investment pools must provide daily liquidity,
comprehensive reporting and meet at a minimum, all criteria established by the Government
Code with regard to credit quality and diversification. The exception to this provision is the
State of California Local Agency Investment Fund (LAIF), operated as part of the State Pooled
Money Investment Program. Participation in LAIF will be permitted to the full extent provided
under LAIF policy.
Reverse Repurchase. -_rreement& & Derivatives - This policy specifically prohibits the purchase
of reverse repurchase `agreements and derivative, securities, including but not limited to; inverse
floaters, CMO's (collateralized mortgage obligations), range notes and interest -only strips. This
policy further prohibits the purchase of any security which can result in zero interest accrual if
held to maturity.
Authorized Broker/Dealers & Banks - Securities purchases and sales will only be executed
through Primary Dealers, or through direct purchase from the issuer, or with non -Primary firms
who meet the minimum requirements set forth below. The City shall maintain active
relationships with no more than six (6) firms who have been approved by the investment
management committee.
• The, firm must be registered with the National Association of Securities Dealers as a
Broker or Broker/Dealer.
• Preference will be given to those firms that can provide other municipal references and
demonstrate a working knowledge of California Government Code Sections 53601 et sec
and 53635.
54 {
COUNCIL POLICY
Subject:
Policy
Effective
Number
Number
Date
of Pages
STATEMENT OF INVESTMENT POLICY
000-26
10-27-98
5 of 9
The City's investment policy will be provided to every broker/dealer providing services to the
City. Prior to effecting a transactions, staff will obtain offers from a minimum of two dealers to
insure that the purchase price is competitive.
Repurchase Agreements - The City shall maintain master repurchase agreements with all
counterparts providing this product. Repurchase Agreements must be collateralized to 102% of
par value. In the case of "money market Repo", the City will not accept as collateral any security
which it is precluded- from buying outright by the provisions of this policy.
Time Certificates of Deposit - Banks and Thrifts eligible for receipt of `Inactive Public Deposits'
must conduct business in the City of Santa Rosa as evidenced by an address located within the
incorporated City limits. Deposits will be limited to $100,000 per institution covered by FDIC
insurance. The City may waive the collateral requirement for those deposits covered by
insurance.
Market Risk
I
Market risk shall be addressed by diversification of security types and maturity distribution.
Percentage limitations and maturity restrictions will comply with the State of California
Government Code. As market conditions dictate, floating rate securities may be used to take
advantage of higher short term rates, while reducing the City's exposure to market risk. Maturity
distribution, particularly as impacted by changes in the yield curve will be frequently monitored
by staff. Market risk will further be mitigated by adherence to the following maturity
distribution matrix.
Maturity Distribution Range
Maximum Percent of Portfolio
Over 1 Year
50%
Over 2 Years
35%
Over 3 Years
25 %
Over 4 Years
15%
Diversification by Investment Type
Percentage limitations by investment type are outlined in Section 53601 of the Government
Code. The City will further diversify its portfolio by issuer, with the exception of U.S. Treasury
and Agency securities which shall have no percentage limitations. No more than10% of the
portfolio will be invested in any one issuer name.
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Sale of Securities
The City does not make investments for the purpose of trading or speculation, but buys with the
prevalent intent to hold securities to maturity. The prohibition of speculative investment
precludes pursuit of profit through unusual risk or conjectural fluctuations in market prices.
However, fluctuations in market rates or changes in credit quality may produce situations where
securities may be sold at a nominal loss in order to mitigate further erosion of principal or to
reinvest proceeds of sale in securities that will outperform the original investment.
Safekeeping
All investment transactions will be executed on a delivery versus payment basis. Securities will
be held in safekeeping by a third party custodian designated by the City. The custodian will be
required to provide timely (written or on-line) confirmation of receipt and monthly position and
transaction reports.
INTERNAL CONTROLS
The CFO shall establish an annual process of independent review by the City Council appointed
external auditor. This review will provide internal control by assuring compliance with State
Code and internal pc `cies and procedures.
Reporting Requirements
The CFO shall provide to the City Council and City Manager monthly investment reports which
provide a detailed summary of the status of the investment program. Annually, the CFO will
provide a comprehensive report of the activities of the investment program for the prior year.
This report will include a narrative on investment strategy, the fixed income markets and a
forecast for the following year. The monthly report will contain the following elements:
A statement of compliance with the Government Code and this policy.
A certification that the City has sufficient funds to meet expenditures for the following
six month period.
A listing of all securities held at the end of the reporting period showing maturity date,
coupon rate and yield.
Average weighted maturity of the portfolio
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Comparison of Par, Cost Basis, and Market Values
Annual Reporting - GASB 31
Effective June 1998, governmental entities were required to report all investments with a
maturity of one year or more at fair (market) value in the balance sheet or other statement of
financial condition as of the end of the annual reporting cycle. The Government Accounting
Standards Board (GASB) defines fair value as "the amount at which a financial instrument could
be exchanged in a current transaction between willing parties, other than in a forced or
liquidation sale."
GASB Statement No. 31 requires that market value declines be recognized by booking the
variation against earnings at year. end. This book loss would be realized by way of a reduction in
reserves, decreasing monies available for appropriation. In a declining interest rate environment,
the market value of owned securities will increase, with the net gain booked on the City's
financial statements. In compliance with State Code, securities held in City portfolios are
currently reported at fair value on a quarterly basis. This valuation is made primarily for
informational purposes, as profits and losses are unrealized under the City's "buy and hold"
investment strategy. Furthermore, because longer terra investments are subject to greater
fluctuations in price and market value, specific constraints in the form of percentage limitations
have been incorporated in this policy. These limitations minimize material losses in the value of
the portfolio in a rising interest rate environment and 'mitigate the risks inherent in GASB
Statement 31.
PERFORMANCE STANDARDS
The City's portfolios are managed with the objective of obtaining a market rate of return,
commensurate with identified risk constraints and cashflow characteristics. Because the
composition of the portfolio fluctuates depending on market and credit conditions, various
indices will be used to monitor performance.
These would include, but will not be limited to the State of California Local Agency Investment
Fund and the one year Treasury Bill and will be reported for informational purposes only in the
monthly investment report.
DEFINITIONS/GLOSSARY OF TERMS
Broker/Dealer - refers to an individual or firm acting as principal in securities transactions.
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C.F. O. - refers to the Chief Financial Officer of the City of Santa Rosa, also known as the
Director of Administrative Services.
Credit/Issuer Risk - refers to the risk of loss due to the deteriorating credit worthiness or failure
of the issuer of a security,.
Custodian - refers to a financial institution that holds (safekeeps) securities for the investor. The
custodian additionally disburses periodic interest payments and the proceeds of a security upon
maturity or sale.
Delivery vs Payment or DVP - is a tri-party system whereby securities are delivered to the
investor's custodian with a simultaneous payment by the custodian (on behalf of the investor) to
the bank delivering the securities.
Derivative - refers to a financial instrument created from, or whole value depends on (is derived
from) the value of one or more underlying assets of indexes of asset values. Examples are
collateral mortgage obligations (CMO's), interest -only (IO's) and principal only (PO's) notes,
futures currency and interest rate swaps, inverse floaters and range notes.
Discount Securities - are non -interest bearing money market instruments that are issued at a
discount and redeemed at full face value. Examples of Discount Securities are U.S. Treasury
Bills and Banker's A ::ptances.
Investment Staff - refers to those persons authorized by the C.F.O. to transact investment business
in City accounts. For the purposes of Standards of Care, investment staff will include members
of the Investment Committee who make recommendations regarding the prudent management of
City portfolios.
Issuer - refers to the original issuer of debt securities. Examples are corporations such as General
Electric and government agencies such as the.Federal Home Loan Bank.
Market Risk - refers to the risk that the market value of a security will depreciate due to
fluctuations in interest rates.
Market (Fair) Value - refers to the price at which a security is currently trading.
Passive Investment Strategy - refers to the City's characteristic approach of buying securities
with the intent to hld them to maturity. This contracts with an Active management style which
may include more frequent trading of securities.
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Primary Dealer - refers to the group of government securities dealers who report daily to the
Federal Reserve Bank of New York and are subject to it's oversight.
Private Placement - also known as Section 4(2) Exemption refers - to that category of short and
intermediate term debt that (subject to SEC rule 144A) can be issued to qualified institutional
investors only.
Yield Basis - refers to the method of calculating income based on the yield of a security as
determined by it's coupon rate or, in the case of discount securities, it's yield at the time of
purchase. This contrasts with Total Return which recognizes the securities current market value,
including any unrecognized profit or loss.
Amended by Resolution No. 23735
Amended by Resolution No. 23329
Amended by Resolution No. 22809
Amended by Resolution No. 21236
Amended by Resolution No. 19745
Adopted by Resolution No. 17133
Dated: October 27, 1998
Dated: October- 17, 1998
Dated: August 13, 1996
Dated: Febman, 23, 1993
Dated: Decr.nob1 -.,, 26, 1989
Dated: Janw y 8, 1985
CITY OF OCEANSIDE
INVESTMENT POLICY
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MAY 20,1998
CITY OF OCEANSIDE
INVESTMENT POLICY
TABLE OF CONTENTS
Introduction..........................................:................................................
Ethics and Conflicts of Interest................................................................... .
Investment Oversight Committee......................................................................
Scope........................................................................................................
Objectives
A. Safety of Principal..........................................................................
B. Liquidity..................................................................................... .
C . Return on Investment..................................................................... .
Safekeepingof Securities................................................................................
Reporting...................................................................................................
QualifiedDealers......................................................................... ............. .
PrudentInvestor Rule....................................................................................
Authorized Investments..................................................................................
Swapingof Securities....................................................................... ............
PortfolioAdjustments....................................................................................
PolicyReview.............................................................................................
Addendum
Glossary
PAGE
1
2
2
2
2
3
3
3
3
4
4
5
6
7
7
CITY OF OCEANSIDE
Office of the City Treasurer
May 20, 1998
INTRODUCTION
The investment policies and practices of the City of Oceanside are based upon state law and
prudent money management. The primary goals of these policies are:
1. To protect the principal monies entrusted to this office in compliance with all
Federal, State, and Local laws governing the investment of monies under the
control of the City Treasurer.
2. To ensure ample liquidity to meet budgeted expenditures for at least a six-month
period.
3. To generate the maximum amount of investment income within the parameters of
prudent risk management.
The monies entrusted to the City Treasurer (Investment Pool), referred to as the "Fund"
throughout the remainder of this document, will be an acti_v_ely mana d portfolio. That is, the
Treasury Manager and staff will observe, review, and react to changing conditions that affect the
Fund. This shall be viewed as a full-time responsibility by the Treasury Manager and staff. The
authority to execute investment transactions that will affect the Fund will be limited to:
Treasury/Revenue Manager
Deputy Treasurer
City Treasurer
The above officers will meet with members of the Citizen Investment Oversight Committee on a
regular basis to discuss current market conditions and future trends and how each of these affects
the Fund and the City.
The policy stated below also addresses risk management because it is such an integral part of the
investment policy. To concentrate only on maximizing return would be dangerous; therefore,
policy issues will be directed to:
1. limiting the Fund's exposure to each issue and issuer of debt, and
2. determining a minimum credit requirement that firms must have in order to hold
City monies.
I ETHICS AND CONFLICTS OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business
activity that conflicts with proper execution of the investment program, or impairs their ability to
make impartial investment decisions. Employees and investment officials shall disclose any
material financial interests that could be related to the performance of the City's investment
policy.
H INVESTMENT OVERSIGHT COMMITTEE
The City Treasurer shall be responsible for establishing a Citizen Investment Oversight
Committee consisting of no less than 5 members. Members of the committee shall serve at the
City Treasurer's pleasure and meet on a regular basis to review investment operations and assure
compliance to California Code requirements. The committee shall act in an advisory role and
shall not make investment decisions.
III SCOPE
In accordance with Resolution No. 85-153 of the City Council of the City of Oceanside and
under authority granted on July 10, 1985, the Treasury Manager is responsible for investing the
unexpended cash in the City Treasury. This investment policy applies to all the investment
activities of the City of Oceanside, except for the Employees Retirement and Deferred
Compensation Funds, which are administered separately. All financial assets of all other funds
shall be administered in accordance with the provisions of this policy. An addendum to this
policy addressing the investment of proceeds from debt issues is located on page 8.
IV OBJECTIVES
A. Safety of principal.
Safety of principal is the foremost objective of the City of Oceanside. Each investment
transaction shall seek to ensure, whenever possible, that all capital losses are avoided,
whether from securities default, broker -dealer default, or erosion of market value. The
City shall seek to preserve principal by mitigating the two types of risk: credit risk and
market risk.
1. Credit risk, defined as the risk of loss due to failure of the issuer of a security,
shall be mitigated by investing in only very safe securities (see Section IX for
detailed limitations of credit risk), and by diversi ing the investment portfolio so
that the failure of any one issuer would not unduly harm the City's cash flow.
2. Market risk, defined as the risk of market value fluctuations due to overall
changes in the general level of interest rates, shall be mitigated by structuring the
portfolio so that securities mature at the same time that major cash outflows occur,
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY 2
thus reducing the need to sell securities prior to their. maturity; and by prohibiting
the taking of short positions, that is, selling securities that the City does not own.
It is explicitly recognized herein, however, that in a diversified portfolio,
occasional measured losses are inevitable and must be considered within the
context of overall investment return.
B. Liquidity
The portfolio will be structured with sufficient liquidity to allow the City to meet
anticipated cash requirements. This will be accomplished through diversi of the
instruments to include those with active secondary markets, those, which can match
maturities to expected cash needs, and the State Local Agency Investment Fund with
immediate withdrawal provisions. A statement showing that the portfolio has ample
liquidity to meet six months of budgeted expenditures will be included in the Treasurer's
report to Council.
C . Return on investment
The City's investment portfolio shall be designed to attain at least a market -average rate
of return through economic cycles. The market -average rate of return is defined as the
average return on three-month U.S. Treasury Bills. Whenever possible, and consistent
with risk limitations as defined herein and prudent investment principles, the Treasury
Manager shall seek to augment returns above the market average rate of return.
V SAFEKEEPING OF SECURITIES
To protect against potential losses by collapse of individual securities dealers, all securities
owned by the City, including collateral on repurchase. agreements, shall be held in safekeeping by
a third party bank trust department acting as agent for the City under the terms of a custody
agreement executed by the bank and by the City. All securities will be received and delivered
using standard delivery versus payment procedures.
VI REPORTING
Effective January 1996, Section 16480.7 of the California Government Code requires local
agencies to submit a quarterly report to the governing board within 30 days following the end of
the quarter. The report shall identify the type of investment, name of the issuer, date of maturity,
par and dollar amount invested in each security, the weighted average maturity of the
investments, any funds investments or programs including loans, that are under the management
of contracted parties and the market value as of the date of the report, along with the source of
this valuation. In addition to the quarterly report to council, the City Treasurer will submit a
monthly summary report to the City Manager and City Council.
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY 3
VII QUALIFIED DEALERS
The City shall transact business only with banks and savings and loans, and with investment
securities dealers. The dealers should be primary dealers regularly reporting to the New York
Federal Reserve Bank. Exceptions to this rule will be made at the recommendation of the
Treasury Manager and approval of the Treasurer. Investment staff shall Investigate deal
ers
wishing to do business with the City and determine if they are adequately capitalized, make
markets in securities appropriate to the City's needs, and are recommended by managers of
portfolios similar to the City's. The Treasury Manager shall provide information regarding any
newly acquired dealer to the Treasurer and the Investment Oversight Committee. The Treasury
Manager shall annually send a copy of the current investment policy by certified mail to all
dealers approved to do business with the City. Confirmation of receipt of this policy shall be
ell
considered evidence that the dealer understands the City's investment policies and agrees tea sell
the City .only appropriate investments. A copy of the broker/dealer questionnaire is attach
as
an addendum.
The City may execute security transactions with the investment department of the City's custodial
bank. If the custodial bank is not a primary dealer in government securities, investments shallbe
h
restricted to short term investments (six months or less) and the business relationship with
he
bank's investment department shall terminate at such time when the City terminates its g
relationship with the bank. If the City's custodial bank is a primary dealer, the rules pertaining
to primary dealer status apply.
The City may purchase Al-Pl rated commercial paper from its direct issuer if it presents a
higher return than in the secondary market.
VIII PR UDENT INVESTOR RULE
Generally, investments shall be made in the context of the "prudent investor" rule, which states:
"...investments shall be made with judgement and care, under circumstances then
prevailing, which persons of prudence, discretion, and intelligence exercise in the
management of their own affairs, not for speculation, but for investment, considering the
probable safety of their capital as well as the probable income to be derived.
IX AUTHORIZED INVESTMENTS
The City is further governed by California Government Code, Sections 53600 et seq. Within the
context of these limitations, the following investments are authorized, as fiirther limited herein.
A. United State Treasury Bills, Bonds, and Notes, or those for which the full faith and
credit of the United State are pledged for payment of principal and interest. There is no
limitation as to the percentage of the portfolio, which can be invested in this category.
B. Obligations issued by the United States Government Agencies such as the Government
4
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY
National Mortgage Association (GNMA), the Federal Farm Credit Bank System (FFCB),
the Federal Home Loan Bank Board (FHLB), the Federal National Mortgage Association
(FNMA), and the Student Loan Marketing Association (SLMA). Although there is no
percentage limitation of the dollar amount that can be invested in these issues, the
"prudent investor" rule shall apply for any single agency name. The City shall not invest
in any agency security that could result in zero interest accrual if held to maturity.
C . Bills of exchange or time drafts drawn on and accepted by a commercial bank,
otherwise known as banker's acceptances. Banker's acceptances purchased may not
exceed 270 days to maturity or 20 % of the market value of the portfolio. No more than
5 % of the market value of the portfolio may be invested in banker's acceptances issued by
any one bank.
D. Time deposits. The City may invest in non-negotiable time deposits collateralized in
accordance with the California Government Code (attached), in those U.S. banks and
savings and loan associations, which meet the requirements as evaluated by a nationally
recognized statistical rating organization (NSRO) as designated by the Securities and
Exchange Commission, for the qualitative and quantitative analysis of financial
institutions. Since time deposits are not liquid, no more than 15 % of the portfolio may be
invested in this category. The issuer firm should have been in existence for at least five
years. The City may waive the first $100,000.00 of collateral security for such deposits
if the institution is insured pursuant to federal law. In order to secure such deposits, an
institution shall maintain in the collateral pool, securities having a market value of at
least 10 % in excess of the total amount deposited. Real estate mortgages may not be
accepted as collateral. The maximum term for deposits shall be one year. In general, the
issuer must have a minimum tier one risk -based capital ratio of 6 % as determined by the
FDIC and their operation must have been profitable during their last reporting period.
E. Repurchase agreements. The City may invest in repurchase agreements with banks and
dealers with which the City has entered into a master repurchase contract which specifies
terms and conditions of repurchase agreements.
1. Transactions shall be limited to primary dealers and the top twenty-five U.S.
banking institutions according to asset size. The maturity of repurchase
agreements shall not exceed 30 days. The market value of the securities used as
collateral for repurchase agreements shall be monitored daily by the investment
staff and will not be allowed to fall below 100 % of the value of the repurchase
agreement. In order to conform with provisions of the Federal Bankruptcy Code
which provides for the liquidation of securities held as collateral for repurchase
agreements, the only securities acceptable as collateral shall be certificates of
deposit, eligible banker's acceptances, or securities that are either direct
obligations of, or that are fully guaranteed as to principal and interest by, the
United States or any agency of the United States.
2. No more than 30 % of the portfolio may be invested in repurchase agreements, and
a "perfected security interest" shall always be maintained in the securities subject
to a repurchase agreement.
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY 5
F. Reverse Repurchase Agreements. The City may enter into reverse repurchase
agreements when the earnings from the matching investment(s) are greater than or equal
to the cost of the reverse(s) and the terms and conditions are otherwise favorable to the
City. Reverse repurchase agreements entered into in accordance with this paragraph may
not exceed 60 days to maturity without written approval of the City Treasurer, and must
be matched as to maturity with all proceeds of the reverse repo reinvested in the matched
security. No more than 10 % of the total cost of the portfolio is to be invested in reverse
repurchase agreements at any one time.
G. Commercial paper ranked P1 by Moody's Investor Services and Al by Standard and
Poor's, and issued by a domestic corporation having assets in excess of $500 million and
having an A or better rating on its long term debentures as provided by Moody's or
Standard and Poor's. Purchases of eligible commercial paper may not exceed 180 days to
maturity. Purchases of commercial paper may not exceed 15 % of the market value of the
portfolio. No more than 5 % of the market value of the portfolio may be invested in
commercial paper issued by any one corporation. The sum of the market value of the
Commercial Paper and Medium Term Notes invested in any one corporation/corporate
entity shall not exceed 5 % of the market value of the portfolio.
H . Medium Term Notes (MTNs) . The City may invest in MTNs issued by corporations
operating within the United States. MTNs eligible for purchase shall be rated "A" or
better by Standard and Poor's or by Moody's rating services. MTNs with an "A" rating
shall be limited to 24 months maximum maturity; AA rated MTNs shall be limited to 36
months. The aggregate total of all purchased MTNs may not exceed 15 % of the cost
value of the investment portfolio. No more than 5 % of the cost value of the portfolio
may be invested in notes issued by any one corporation. The sum of the market value of
the Commercial Paper and Medium Term Notes invested in any one
corporation/corporate entity shall not exceed 5 % of the market value of the portfolio.
I. Local Agency Investment Fund. The City may invest in the Local Agency Investment
Fund (LAIF) established by the State Treasurer for the benefit of local agencies up to the
maximum amount permitted by State Law.
J. Ineligible investments. Investments not described herein, including but not limited to,
common stocks and corporate bonds, inverse floaters, range notes, interest -only strips
that are derived from a pool of mortgages, and mutual funds are prohibited from use in
this portfolio. Further, investments which exceed five years in maturity require
authorization by City Council prior to purchase.
X SWAPPING OF SECURITIES
A swap is the movement from one security to another and may be done for a variety of reasons,
such as to increase yield, lengthen or shorten maturities, to take a profit, or to increase
investment quality. Losses or gains on security swaps must be recorded as a completed sale and
purchase.
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY 6
XI PORTFOLIO ADJUSTMENTS
Should an investment percentage -of -portfolio limitation be exceeded due to an incident such as
fluctuation in portfolio size, the affected securities may be held to maturity to avoid losses.
When no loss is indicated, the Treasury Manager shall consider reconstructing the portfolio
basing the decision in part on the expected length of time the portfolio will be imbalanced.
XII POLICY REVIEW
This investment policy shall be reviewed at least annually to ensure its consistency with the
overall objectives of preservation of principal, liquidity, rate of return, and its relevance to
current law and financial and economic trends. The City Council, acting through the City
Treasurer, shall be responsible for maintaining guidance over this investment policy to ensure
that the City can adapt readily to changing market conditions, and shall approve any modification
to the investment policy prior to implementation. Amendments to the policy shall be forwarded
to the City Manager and the City Council.
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY 7
ADDEND UM TO THE INVESTMENT POLICY
It shall be the responsibility of the Treasury Manager to structure and monitor the investment
process for all bond proceeds.
The Treasury Manager and staff shall consult with bond counsel and financial advisors during the
development of the bond documents and shall be responsible for determining whether the
proceeds should be actively or passively invested as a result of federal regulations that may,
govern the issue.
Bond proceeds may be invested in the same instruments as outlined on page five of the City of
Oceanside's adopted investment policy and are as follows:
A. United State Treasury Bills, Bonds, and Notes, or those for which the full faith and
credit of the United State are pledged for payment of principal and interest. There is no
limitation as to the percentage of the portfolio, which can be invested in this category.
B . Obligations issued by United States Government Agencies such as the Government
National Mortgage Association (GNMA), Federal Farm Credit Bank (FFCB), Federal
Home Loan Bank Board (FHLB), Federal National Mortgage Association (FNMA), and
Student Loan Marketing Association (SLMA) . Although there is no percentage limitation
of the dollar amount that can be invested in these issues, the prudent investor rule shall
apply for any single agency name. The City shall not invest in any agency security that
could result in zero interest accrual if held to maturity.
C . Bills of exchange or time drafts drawn on and accepted by a commercial bank,
otherwise known as banker's acceptances. Banker's acceptances purchased may not
exceed 270 days to maturity or 20 % of the market value of the portfolio. No more than
5 % of the market value of the portfolio may be invested in banker's acceptances issued by
any one bank.
D . Commercial paper ranked P 1 by Moody's Investor Services and Al by Standard and
Poor's, and issued by a domestic corporation having assets in excess of $500 million and
having an A or better rating on its long term debentures as provided by Moody's or
Standard and Poor's. Purchases of eligible commercial paper may not exceed 180 days to
maturity. Purchases of commercial paper may not exceed 15 % of the market value of the
portfolio. No more than 5 % of the market value of the portfolio may be invested in
commercial paper issued by any one corporation. The sum of the market value of the
Commercial Paper and Medium Term Notes invested in any one corporation/corporate
entity shall not exceed 5 % of the market value of the portfolio.
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY ADDENDUM
ADDEND UM TO THE INVESTMENT POLICY
Bond proceeds may also be invested with the California Arbitrage Management Program
(CAMP) as approved by the City Council of the City of Oceanside through Resolution R92-216,
dated November 18, 1992. CAMP's management and investment policies are in line with the
State code governing the investment of public funds, as well as the City's adopted investment
policy. CAMP is designed to assist its participants in complying with certain arbitrage rebate
requirements of the Internal Revenue Code with regard to the investment of bond proceeds.
Underwriters and financial advisors shall refrain from participating in the investment process and
may not receive compensation or finder's fees from parties involved in the investment
transaction. If a financial advisor or underwriter also acts in the investment capacity, the firm
shall certify that its fees do not exceed the fees it customarily charges for investment activity and
includes no compensation for services provided in the underwriting.
For bond issues to which federal yield or arbitrage restrictions apply, the primary objectives shall
be to prudently obtain satisfactory market yields and to minimize the costs associated with
investments of such funds.
The Treasury Manager and the City's Accounting Department shall establish systems and
procedures to comply with federal regulations governing the investment of bond proceeds
process, including investment record keeping systems.
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY ADDENDUM 2
NAME OF FIRM
ADDRESS
TELEPHONE
TELEPHONE
Local: ( )
National Headquarters:
PRIMARY REPRESENTATIVE
NAME
TITLE
TELEPHONE
NAME
TITLE
TELEPHONE
1. Are you a recognized primary dealer in Rovernment securities?
s Q`
2. If yes, how long has your firm been a primary dealer?
(YEARS)
3. Are you a retail or institutional broker?
4.
5.
MANAGER
What was your firm's total volume in U.S. Government and Agency securities trading last year?
FIRM -WIDE $
YOUR OFFICE $
Which of the following instruments are offered regularly by your office?
T-Bills
BA's (Domestics)
T-Notes, Bonds
BA Is (Foreign)
Agencies (specify)
Commercial Paper
C D's
Repurchase Agreements
Medium Term Notes
Reverse Repurchase Agreements
Mutual Funds (eligible for public
investment)
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY ADDENDUM 3
6. Identify all personnel who will be trading with or quoting securities to the City.
NAME
TITLE
# YRS IN
INST SALES
# YRS
WITH FIRM
TELEPHONE
7. Please identify your most directly comparable City/Local Agency clients in our geographical area.
ENTITY
CONTACT
PERSON
TELEPHONE
CLIENT
SINCE
8. Is there anything in your background in government securities business that makes you stand out above
the rest? Why should the City of Oceanside deal with you?
9. Have any of your public sector clients ever sustained a loss on a securities transaction arising from a
misunderstanding or misrepresentation of the risk characteristics of a particular instrument? If so pleas
explain.
10. Has any public -sector client ever claimed in writing that your firm was responsible for investment
losses? Explain.
11. Has your firm consistently complied with .the Federal Reserve Bank's capital adequacy guidelines?
Include certified documentation of your current capital adequacy as measured by Federal Reserve
Standards.
12. Please provide certified financial statements and other statements regarding your firm's capitalization.
13.
14.
Please provide samples of research reports that your firm regularly supplies to public -sector clients.
Are you a Broker instead of a Dealer (i.e. you DO NOT own positions of securities)?
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY ADDENDUM 4
15. What reports, transactions, confirmations and paper trail would the City receive?
16. What training information would you provide to our employees and investment officers?
17. How many and what percentage of your transactions failed last month? Last Year?
18. What portfolio information do you require from clients?
-- CERTIFICATION --
I hereby certify that I have personally read the City of Oceanside's Investment Policy and the California
Government Codes pertaining to the investments of the City of Oceanside, 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 Oceanside's investment
objectives, strategies and risk constraints whenever we are so advised. We pledge to exercise due
diligence in informing the City Treasurer staff of all foreseeable risks associated with financial
transactions conducted with our firm. I attest to the accuracy of our responses to your questionnaire.
NOTE: Completion of this questionnaire is only part of the City of Oceanside's Certification process
and DOES NOT guarantee that the applicant will be approved to do business with the City.
SIGNED
DATE
(Countersigned by Company President or person in charge of government securities operations.)
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY ADDENDUM 5
GLOSSARY
AGENCIES - Agencies of the Federal government set up to supply credit to various classes of
institutions (e.g. S&L's, Small business firms, students, farmers, housing agencies, etc.)
ASK/OFFER - The price at which securities are offered. (The price at which a firm will sell a
security to an investor.)
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.
BASIS POINT - One one -hundredth of a percent (i.e. 0.01 %)
BEAR MARKET - A period of generally pessimistic attitudes and declining market prices.
BOND EQUIVALENT YIELD - The basis on which yields on notes and bonds are quoted.
BROKER/DEALER - Individual or firm acting as principal in securities transaction.
BULL MARKET - A period of generally optimistic attitudes and increasing market prices.
CALLABLES - Securities that the issuer has the right to redeem prior to maturity.
CERTIFICATE OF DEPOSIT (CD) - A time deposit with a specific maturity evidenced by a
certificate. Large denomination CD's are typically negotiable.
CMT - Constant Maturity Treasury
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.
CORPORATE MEDIUM TERM NOTE - A security issued by a corporation doing business in
the U.S. with a maturity not to exceed five years.
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.
DEBENTURE - A bond secured only by the` general credit of the issuer.
DELIVERY VS PAYMENT - Delivery of securities with a simultaneous exchange of money.
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY GLOSSARY
DERIVATIVES - Financial products that are dependent for their value on (or derived from) an
underlying financial instrument, a commodity, or an index representing values of groups of such
instruments or assets.
DIVERSIFICATION - Dividing investment funds among a variety of securities offering
independent returns.
FEDERAL FUNDS RATE - The rate of interest associated with borrowing a Federal Reserve
bank's excess reserves. This rate is currently pegged by the Federal Reserve through open -
market operations.
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.
INTERNAL RATE OF RETURN - Rate of return over the life of a security.
LOCAL AGENCY INVESTMENT FUND (LAIF) - The aggregate of all funds from political
subdivisions that are place in the custody of the State Treasurer for investment and reinvestment.
MARKET VALUE - The price at which a security is trading, usually the liquidation value.
OPEN MARKET OPERATIONS - Federal reserve activity. Under the Federal Reserve Act,
the Fed uses purchases and sales of Government and Federal Agency securities to add to or
subtract from commercial bank reserves. Goals are to sustain economic growth, high
employment and reasonable price stability.
PAPER GAIN OR LOSS - Term used for unrealized gain or loss on securities being held in a
portfolio based on comparison of current market quotes and their original cost. This situation
exists as long as the security is held while there is a difference between market value and the
purchase price.
PRIMARY DEALER - A group of government securities dealers who submit daily reports of
market activity and positions and monthly financial statements to the Federal Reserve Bank of
New York and are subject to its informal oversight. Primary dealers include Securities and
Exchange Commission (SEC) registered securities broker/dealers, banks and a few unregulated
firms.
RATE OF RETURN - The yield obtainable on a security based on its purchase price or its
current market price. This may be the amortized yield to maturity; on a bond, the current
income return.
i
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY GLOSSARY 2
SAFEKEEPING - The service provided by banks and trust companies for clients when the bank
or trust company stores the securities, takes in coupon payments, and redeems issues at maturity.
SPREAD - a) The yield or price difference between the bid and offer- on an issue; b) The yield
or price difference between different issues.
SWAP - The sale of one issue and the simultaneous purchase of another for some perceived
advantage.
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 U.S. Treasury securities having initial maturities of more
than ten years.
TREASURY NOTES - Intermediate -term coupon bearing U.S. Treasury securities having initial
maturities of from one year to ten years.
WHEN ISSUED BASIS (WI) - A term applied to securities that are traded before they are
actually issued, with the stipulation that transactions are null and void if securities are not issued.
YIELD CURVE - Yield calculations of various maturities at a given time to observe spread
differences.
YIELD TO MATURITY - The current income yield minus any premium above par, or plus any
discount from par in the purchase price with the adjustment spread over the period from date of
purchase to maturity.
CITY OF OCEANSIDE, CALIFORNIA - INVESTMENT POLICY GLOSSARY 3
DEPARTMENT OF ADMINISTRATIVE SERVICES
MEMORANDUM
DATE: April 13, 1999
TO: The Mayor, City Council and City Manager
FROM: John S. Lindsay, Director
SUBJECT: MONTHLY INVESTMENT REPORT - MARCH 1999
As Chief Financial Officer (Director of Administrative Services) of the City of Santa
Rosa, I certify to the following.
1. Sufficient funds are available to meet the City's expenditures for a six month period.
2. All funds are invested in accordance with City Council policy entitled
"Statement of Investment Policy" dated 10/27/98.
3. The original cost, market value and average weighted maturity (in days) of City
investments as of March 31, 1999 are shown below. Market values have
been obtained from the City's safekeeping custodian, the Bank of New York.
PORTFOLIO
MARKET
VALUE
ORIGINAL
COST
BOOK GAIN
OR LOSS
WEIGHTED
MATURITY
City Pool Investments
160,309,978
160,542,225
(232,248)
538 Days
Wastewater Bond Proceeds
44,836,919
44,741,392
95,527
28 Days
Assessment Districts
9,696,249
9,697,141
(892)
22 Days
Total
2149843,145
21499809758
(137,613)
4. The accompanying documents provide an accurate inventory of all securities held as of
March 31, 1999. zi
S. LINDSAY
:TOR OF ADMINISTRA SERVICE
c: Board of Public Utilities
INVESTMENT PORTFOLIO SUMMARY
March 31,1999
THIS MONTH LAST MONTH CHANGE +/-
CITY PORTFOLIO
Amount Invested at Par
16014031000
16015553,000
(152,000)
Average Yield (360 Day Basis)
5.38%
5.41%
-0.03%
Average Maturity (Days)
538
550
(12)
WASTEWATER PORTFOLIOS
Amount Invested at Par
45,121,000
45,619,000
(498,000)
Average Yield (360 Day Basis)
4.83%
4.86%
-0.03%
Average Maturity (Days)
28
47
(19)
SPECIAL ASSESSMENT DISTRICTS
Amount Invested at Par
91)7991000
95,9261,000
(127,000)
Average Yield (360 Day Basis)
4.73%
4.73%
0.00%
Average Maturity (Days)
22
49
(27)
TOTAL PAR VALUE
ALL PORTFOLIOS
215,3239000
21691009000
(7779000)
PERFORMANCE BENCHMARKS
INDEX RATE DIFFERENCE +/-
CITY 5.41%
LAIF (Quoted on 365 day basis) 5.12% + 29 Basis Points
AVERAGE YEAR BILL 4.96% + 45 Basis Points
+ 10 BASIS POINTS
SECURITY DIVERSIFICATION COMPLIANCE ANALYSIS
City Portfolio
March 31, 1999
Type of Security
Percentage of Portfolio
Maximum Permissible by
State Code or City Policy
Negotiable CD's
12.7%
30%
Commercial Paper
8.6%
15% **
Corporate & Medium Term Notes
22%
30%
Federal Agency Securities
36.7%
No Restriction
18.7%
$30 Million (State Code)
L.A.I.F.
Mutual Funds
1.2%
10%
**An additional 15%, for a total of 30% may be added; providing that the weighted average maturity of
the total does not exceed 30 days.
PORTFOLIO ANALYSIS
Dollars Invested
MTN's
33,410,000
MTN's - Floaters
20.8%°
- 2,000,000
Comm'I Paper
13,848,000
1.2%
Negotiable CD
8.6%
- 20,350,000
12.7%
City Portfolio
March 31, 1999
$160,403,000 Par Vaue Invested
MATURITY DISTRIBUTION COMPLIANCE ANALYSIS
City Portfolio
As of March 31, 1999
Maturity Distribution Range
Percentage of Portfolio
Maximum Permissible by
City Council Policy
Under 1 Year
53.74%
No Restriction
Over 1 Year
46.26%
50%
Over 2 Years
31.92%
35%
Over 3 Years
22.94%
25%
Over 4 Years
15.02%
15%
Ir-Note: .Ul% (JiSy,-)JU) over maximum permissible by policy
MATURITY DISTRIBUTION ANALYSIS
Dollars Invested
3-6 Months
15,500,000
6-12 Months
10,050,000
1-2 Years
23,005,000
2-3 Years
14,405,000
0-3 Months
60,646,000
3-4 Years
12,695,000
City Portfolio - March 31, 1999
$160,403,000 Par Value Invested
4-5 Years
24,100,000
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CITY
OF SAN BRUNO
INVESTMENT POLICY
SEPTEMBER 28, 1998
INTRODUCTION
GOALS ordinances
San Bruno is based upon state law, city
Policy of the City of S oals of.this policy are:
The investment mone management rule. The primary g
and the prudent Y
I with all State and Local laws governing the
. To ensure compliance
monies in the custody of the City Treasurer.
investment of m Treasurer.
2_ To prote
ct Cit the principal monies entrusted to the Y
3
amount of investment income within the
To generate the maximum
management.
parameters of prudent
4. To meet
the daily cashflow demands of the City.
Treasurer constitute the "Investment Pool" or the
The monies entrusted to the d ce
"Portfolio" referred to in this document.
IMPLEMENTATION
DELEGATION OF AUTHORITY the City of San
investments belongs to the Treasurer forthe
program
Management responsibility for i operation of an investment p 9
who shall establish procedures for the op
Bruno, nd perform investment transactions. These
consistent with this investment policy a P reements, banking
wire transfer ag
procedur
es will include reference to safekeeping, ents. The Treasurer shall be
ser
vice contracts and collateralldepository agre
responsible for all transactions undertaken. p perform the duties of
The Treasurer shall appoint a Deputy City Treasurer who shall p
N
Treasurer in the absence of the Treasurer.
SCOPE
The Treasurer is responsible for investing the unexpended cash in the City Treasury.
This investment policy applies to all the investment activities of the City of San Bruno,
except for the Public Employees Retirement System and Deferred Compensation
Funds, which are administered separately. The financial assets of all funds, with these
two noted exceptions, shall be administered in accordance with the provisions of this
policy.
OBJECTIVES
Objectives have been set in order to achieve the goals of this investment policy. The
primary objectives, in priority order, of the City of San Bruno's investment policy are:
A. Safety of Principal
Safety of principal is the foremost objective of the City of San Bruno. With each
investment transaction the Treasurer shall seek to ensure that capital losses are
avoided, whether these losses are from securities default, broker -dealer default, or
erosion of market value. The City shall seek to preserve principal by mitigating the two
types of risk: credit risk and market risk.
1. Credit risk, defined as the risk of loss due to failure of the issuer of
a security shall be mitigated by investing in, only very safe securities (see
list of Authorized Investments), and by iversifing the investment
portfolio so that the failure of any one issuer does not unduly harm the
City's cash flow.
2. Market risk, defined as the risk of market value fluctuations due to
overall changes in the general level of interest rates, shall be mitigated by
structuring the portfolio so that securities mature at the same time that
major cash outflows occur, thus eliminating the need to sell securities
prior to their maturity. It is explicitly recognized herein, however, that in a
diversified portfolio, occasional measured losses are inevitable and will
be considered within the context of overall investment return.
Further guidelines for safety of principal shall include:
1. Limiting the Portfolio's exposure to each issue and each issuer of debt.
2. Determining minimum credit requirements for firms that hold City monies.
K
B. Liquidity
The City of San Bruno's investment portfolio will remain sufficiently liquid to enable the
City to meet all operating requirements which might be reasonably anticipated. The
Portfolio shall maintain a position of at least 50% in "readily marketable" securities, i.e.,
those securities that are actively traded in the secondary market.
C. Return on Investment
Return on investments shall be a market average rate of return governed by the
objectives of safety and liquidity in accord with prudent investment principles and shall
be consistent with other public agencies who have similar policies.
PRUDENCE
Generally,, investments shall be made in the context of the "prudent investor" rule,
which states:
"...investments shall be made with judgment and care, under
circumstances then prevailing, which persons of prudence,
discretion and intelligence exercise in the management of
their own affairs, not for speculation, but for investment,
considering the probable safety of their capital as well as
the probable income to be derived."
Officers acting in accordance with written procedures and the investment policy and
exercising due diligence shall be relieved of personal responsibility for an individual
security's credit risk or market price changes, provided deviations from expectations
are reported in a timely fashion and appropriate action is taken to control adverse
developments.
ETHICS AND CONFLICTS OF INTEREST
The Investment Officers, i.e., the City Treasurer and Deputy City Treasurer, shall be
governed by the "Code of Ethics" and the "Code of Professional Conduct" of the
California Municipal Treasurer's Association. The Investment Officers shall refrain from
personal business activity that could conflict with proper execution of the investment
program, or which could impair their ability to make impartial investment decisions.
Investment Officers shall disclose any material financial interests in financial
institutions that conduct business within this jurisdiction, and they shall further disclose
any large personal financial positions that could be related to the performance of the
City of San Bruno's portfolio. Investment Officers shall subordinate their personal
investment transactions to those of the City of San Bruno, particularly with regard to
the timing of purchases and sales.
Investment Officers shall avoid any transaction that might impair public confidence in
the City's ability to govern effectively. The Investment Officers shall comply with all
relevant state laws governing financial conflict of interest.
At all times, the Investment Officers shall act as custodians of the public trust.
PROCEDURES
MATURITIES
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Maturities shall be selected to anticipate cash needs, thereby eliminating the possibility
of the need for forced investment liquidation. Cash flow estimates shall be prepared in
a prudent manner.
To insure that funds are always available when needed, the City shall maintain a
position of investing no greater than 33% of the portfolio in maturities greater than one
year. Further, investments which exceed five years in maturity shall require
authorization by the City Council prior to purchase.
INTERNAL CONTROL
The Treasurer shall establish an annual independent review by an external auditor as
required by Governmental Accounting Standards Board Statement #5. The purpose of
this review shall be to consider means for improved future performance, and to verify
that investments have been made in accordance with the City's policies and
procedures.
SAFEKEEPING OF SECURITIES
To protect against potential losses by collapse of individual securities dealers, all
securities owned by the City (including collateral on repurchase agreements), shall be
held in the City's name in safekeeping by a third party bank trust department. Said
trust department shall act as agent for the City of San Bruno pursuant to a custody
agreement between the bank and the City. All securities shall be received and
delivered using standard delivery -versus -payment procedures. The Custodian shall
provide safekeeping receipts of all securities held. .
QUALIFIED DEALERS
The City shall transact business only with banks, savings and loans, and investment
securities dealers. The dealers must be primary dealers regularly reporting to the
Federal Reserve Bank. The Treasurer shall investigate dealers wishing to do
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business with the City and determine if they are adequately capitalized, make markets
in securities appropriate to the City's needs, and are recommended by managers of
portfolios similar to the City's.
All financial institutions and securities dealers who desire to engage in investment
transactions with the City of San Bruno shall submit a certification. The document shall
certify that the supervising officer has reviewed the City's investment policy and agrees
to disclose potential conflicts or risks to public funds that might arise out of business
transactions between the firm/depository and the City of San Bruno. Employers of any
financial institution offering securities or investments to the City of San Bruno shall be
trained in the precautions appropriate to public sector .investments and shall be
required to familiarize themselves with this policy.
When two or more investment opportunities offer essentially the same maturity, yield,
quality and liquidity, the City of San Bruno shall seek to promote local economic
development by giving priority to the financial institutions in San Bruno, then San Mateo
County, and then California.
The City shall at least annually send a copy of the current investment policy to all
dealers approved to do business with the City. Confirmation of receipt of this policy
shall be considered evidence that the dealer understands the City's investment
policies, and intends to show the City only appropriate investments.
An annual review of the financial condition and registrations of qualified financial
institutions and securities dealers shall be conducted by the Treasurer. In addition, a
current audited financial statement is required to be on file for each financial institution
and securities dealer in which the City of San Bruno invests.
REPORTING
The City Treasurer shall prepare a monthly investment report. The report shall be
placed on the consent calender of the second regular City Council meeting of each
month, unless no such meeting is held in which case the matter shall be deferred to the
following meeting.
The report shall identify the type of investment, institution, settlement and maturity
dates, purchase price and coupon rate. Current book value, current market value and
yield to maturity rate shall be given for all securities with a maturity date exceeding
twelve months.
INVESTMENTS AND STRATEGIES
0
AUTHORIZED INVESTMENTS
The City is governed by California Government Code, Sections 53600 et seq. Within
the context of these limitations, the following investments are authorized as further
limited herein:
A. United States Treasury Bills, Bonds and Notes, or those instruments for
which the full faith and credit of the United States are pledged for payment of principal
and interest. There is no limitation as to the percentage of the portfolio which can be
invested in this category.
B. Obligations issued by the United States Government Agencies such as the
Government National Mortgage Association (GNMA), the Federal Farm Credit Bank
System (FFCB), the Federal Home Loan Bank Board (FHLB), the Federal National
Mortgage Association (FNMA) and the Student Loan Marketing Association (SLMA).
Although there is no percentage limitation of the dollar amount that can be invested in
these issues, the "prudent investor" rule shall apply for any single agency name.
C. Bill of exchange or time drafts drawn on and accepted by a commercial
bank, otherwise known as banker's acceptances. Banker's acceptances purchased
may not exceed 270 days to maturity or 40% of the market value of the portfolio. No
more than 10% of the market value of the portfolio may be invested in banker's
acceptances issued by one bank.
D. Commercial paper ranked P1 by Moody's Investor Services and Al by
Standard and Poor's, and issued buy a domestic corporation having assets in excess of
$500 million and having an A or better rating on its long term debentures as provided
by Moody's or Standard and Poor's. Purchases of eligible commercial paper may not
exceed 180 days to maturity. Purchases of eligible commercial paper may not exceed
15% of the market value of the portfolio. No more than 10% of the market value of the
portfolio may be invested in commercial paper issued by any one corporation.
E. Medium Term Notes (MTNs). The City may invest in MTNs issued by
corporations operating within the United States. MTNs eligible for purchase shall be
rated A or better by Standard and Poor's or Moody's rating services. MTNs with an A
rating shall be limited to 24 months maximum maturity; AA rated MTNs shall be limited
to 36 months. The aggregate total of all purchased MTNs may not exceed 15% of the
cost value of the portfolio. No more than 5% of the cost value of the portfolio may be
invested in notes issued by any one corporation. Commercial paper holding shall be
considered when calculating the maximum percentage in any issuer name.
F. Repurchase agreements. The City may invest in repurchase agreements with
banks and dealers with which the City has entered into a master repurchase contract
which specifies terms and conditions of repurchase agreements.
1. Transactions shall be limited to primary dealers and the top 25
banking institutions according to asset size. The maturity of repurchase
agreements shall not exceed 30 days. The market value of the securities
used as collateral for repurchase agreements shall be monitored daily by
the investment officers and shall not be allowed to fall below 100% of the
value of the repurchase agreement. In order to conform with provisions of
the Federal Bankruptcy Code which provides for the liquidation of
securities held as collateral for repurchase agreements, the only
securities acceptable as collateral shall be certificates of deposit, eligible
banker's acceptances, or securities that are either direct obligations of, or
are fully guaranteed as to principal and interest by, the United States or
any agency of the United States.
2. No more than 30% of the portfolio may be invested in repurchase
agreements.
G. Local Agency Investment. Fund (LAIF). The City may invest in LAIF, a pool
established by the State Treasurer for the benefit of local agencies up to the maximum
amount permitted by LAIR
H. San Mateo County Pool. The City may invest in the San Mateo County Pool,
which is under the direction of the County Tax Collector -Treasurer. The County makes
direct deposits of subventions and taxes into the City's account with the pool. The
monies deposited may remain in the account until needed for disbursements by the
City.
I. Time Deposits (CD). The City may invest in nonnegotiable time certificates of
deposit issued by a national or state chartered bank or federal savings and loan
association rated C or better by Sheshunoff Information Services Inc. CDS are
collateralized. If the collateral is government securities, 110% of the market value to
the face amount of the deposit is required. Promissory notes secured by first
mortgages and first trust deeds used as collateral require 150% of market value to. the
face amount of the deposit. The City may waive the first $100,000.00 of collateral
security for such deposits if the institution is insured pursuant to federal law. In order to
secure such deposits, an institution shall maintain in the collateral pool securities
having a market value of at least 10% in excess of the total amount deposited.
The maximum term for deposits shall be one year. Since time deposits are not liquid,
no more than 15% of the portfolio may be invested in this category. The issuer firm
should have been in existence for at least five years and be based in California. In
general, the issuer must have a minimum 3% net worth to assets ratio, have $90 Million
in assets and its operation must have been profitable during its last reporting period.
J. Ineligible Investments. Investments not described herein, including, but not
limited to common stocks, corporate bonds, mutual funds, reverse repurchase
8
agreements, inverse floaters and "derivatives," shall be considered ineligible
an Bruno. Leveraging shall not be used.
investments for the City of S
TRADING
City shall not make investments for the purpose of trading or speculation as the
The y appreciation of capital value through
dominant criterion, such as anticipating an
changes in market rates.
SWAPPING OF SECURITIES
A swap is the movement from one security to another and may be done for a variety of
reaso
nssuch as to increase yield, lengthen or shorten maturities, to take a profit, or to
,
increase investment quality. Losses or gains on security swaps must be recorde a a
com leted sale and purchase. The City's portfolio is mainly held to maturity, swaps
re
P
allowed only to enhance the portfolio, but not as a regular investment tool.
PORTFOLIO ADJUSTMENTS
Sh
ould an investment percentage of portfolio limitation be exceeded due to an incident
such as fluctuation in portfolio size, the affected securities may be held to maturity to
he
avoid losses. When no loss is indicated, the treasurer shall consider reconstructing t
por
tfolio basin the decision in part on the expected length of time the portfolio will b
imbalanced.
POLICY REVIEW
This investment policy shall be reviewed by the City Council at a public meeting
annually to ensure its consistency with the overall objectives of preservation of
principal, al, liquidity, rate of return, and its relevance to current law and financial and
economic trends. Amendments and modifications to the policy shall be approved by
the City Council prior to implementation.
Investment Policy
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