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2001 06 13 IABAGENDA INVESTMENT ADVISORY BOARD Study Session Room 78-495 Calle Tampico- La Quinta, CA 92253 June 13, 2001 - 5:30 P.M. CALL TO ORDER a. Pledge of Allegiance b. Roll Call APUBLIC COMMENT -(This is the time set aside for public comment on any matter not scheduled on the agenda.) /1'11' CONFIRMATION OF AGENDA CONSENT CALENDAR A. Approval of Minutes of Meeting on May 9, 2001 for the Investment Advisory Board. //V BUSINESS SESSION ,/ A. Transmittal of Treasury Report for April, 2001 /B. Continued Consideration of Fiscal Year 2001/02 Investment Policy C. Workplan for Fiscal Year 2001 /02 VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - May, 2001 d . Pooled Money Investment Board Reports - March, 2001 VII BOARD MEMBER ITEMS VIII ADJOURNMENT Wf;?_ RHOUSE SECURITIES, ID : 7 60-7?6-5�,,29 3UN 0 17 ' 01 11 : 5 N0 .0� 2 F . u The Incredible Shrunking Bind Market It's not clear what will become the benchmark if Treasuries disapA eor. 8y Eric L. Reiner upj>nst Alan Grecrlspall is right abow prc)jct'tt•tt fedCM1-gc %-crnn,.cnt surphtacs, anct 11,11CIC Nti, Ill really will have the ruin m rctirt: the publicly' livid national dehr And tlirn :1ec unitilatt: ►torc's t01' .s- lits. The Federal !reserve chat rinait artictilalud his pCrspCCtivC c-41 Apt'il 27, in an address to Otto Rr,ttci Market Association. F,velt though finaticial adviuus Mild 111011cy managers don't acccssarily buS• it, Icl's face it: Forecaitts show U .1"nl;t�...-- dny's $3 trillion of market•trad- ablc debt sr,nlctitllr bctwtcrl lato 2003 and 2007, What's the c'ff"t ol':t t•,11 CtIt Oil tho.w. progilosticatiolts? 'Nor tlntell. 1 1'cn a huge 2,2 trillion tax trilliming Sought by ont, zr;tlutls imte►11hci• of Congress, Krp. Tot:t Tl;wrctjn (R-C olo. I, would mcrsly delay the dcml.sc of Treasuries tintil 2010. Let tilt,• politicos ind vwIlo. mi:tb d6olte the relative ttic!'itS ctf craving the grail ntttcltt-ccr;iritie, matkc-t va;litlt cone mlrtt:ly, or not. (ire►' issticS ;ilcltitic• ltatiolial•sect[- rit, Cot sidcrtitit,lls- with th, ac- tive tttarkct, how %vutllti rite gt» . ernment rase cash quickly in loll;: event of .1 wilethel Wash, like �t l�ttxincss, 31101.11tl cWplr, ' prudent altmtttlts of low -east Icwtagir to ativall - tasc.) Fo advisurs with clicrl:s wllo OW11 fixc'tl-;rlcurmtc' instrunlettts or hive a dire need fr)r paranux► It salct�'► tl-x sa;ient }x)int is that the Treasury supply is dwindling. Inching the knir-year period ended March .31, the atllount of Tmasury dotes (US, debt isstictl with l original luaturitit:s of nvo to 10 a ycr' tit;,val-A) availall in tilt marketplace dec'lincd 28% as l sP t►tred 1t•;tlwttt cinllar-for-dollar replacement: And $43 bill►oll., t,l About 6.51k, of'1'-{motlds (original mattc!'itics of 11101 than 10 Years) havr been yanked i'rojil the m,u'kvt cincc Treasury inaugurated a dt ht rrt rullcnt 1111)• illtist,cflor by Rob Colvin 91-011 Last year Mlcanwhilc, tilt U,S, goverllmcltt sc• curit;c, I'lUrrirm of 111c Lehman Aggregate Boml Ndct slit! trnm 46% at the clld cif 1995 to 25.4% at Ills cild of March, 'With cctntiltticd attrition a p•clt iitl' at !cast the forclecaNe future:, cvet, irlvestmCllt 1tl.ulagt'rs Who scoff at prudictivils uf'a jcht-frCC fcci• cram SuvCrnnlcnt are taking action, "We IIV i11llo•esting slur portfohns heavily ill il1- ltvadc corporate hr,nds," s,1ys Scidttcr, jj director in tlic fixed -in' cun?c ticparlincnt of St;ladisll, Ayer & V4ratj j, the respcct-cd BOSttltl alt�!1�'1' itt.^,t1;1�;Z•I?ICnf 1tt'1t1, "` o. thlllk 6.11 im.,VS1111C11t- I;ractc tt�rEx):atc hook{~ arc H). Credibly ,.t t ractivr ill terms (it their ;t:1sc)It!tt.: N';cid levels and al- to their' rt :url' .uit'alttage rt'.lativc. to Tt'C;uu1')' bcmti,," Indeed, 11a' w;>rti cal Mill Strrcr ;, til:tt 11c,t•t�ivcd s,:►rcit�, It:;s rlt ttt 'I'rcastirics t wl-priccd, 1nc1 t?ttiit' r:trrc,lr low vif:;ds at'(! intiic:uivc t,�' llr;crs it,t� 1tIg bccil (�iti u11, With '1'rt l�u; v viclt's .11.6- reef; I;• k>��, the;! NJIrrad I�_, t c►il.�, IaIV. )';t•;ds is un�'�, ly �:itic. Shn,Ni�1 (11v si-1i•e3d tl-1i'lo t'. curjlc)ratc ht.)tl(ls will shc,t; bctt� r Pl4cc per. It)rmaslcc Oita!' gcwcriiinCx.1 d6t, lvhlch i$ nman'• moiw, man• alters sec culpr,rat, paper, as all .it tract;t'r altc'rrative. w ttanescing 'I'rcasarirs. •' 1'hc' sillglc'•A corpor;ttc-bolls tlttlex !lad a si t)t' I(;8 basis points uvcr Treasury at the t;nct m;cad of Mulch," S6fiwr says, r.nting drat the Ivrrabc spread ;)I- the last 10 years ha> bery 92 basis points with a starttia:d dcviatiov of 30 basis points. "'1'llat ;llakcx sin gle-A curporarc honcis 2.5 star;d:lyd dc1'i:ttiunF chCap tr, Ilicir historic tells ule that (llc cur• i 11cnl t'ICIt� ,1t11;111I:1�;C 1S Eml'l'!f}' :ltit':ltalt't'," ;^1'S SCitltlCl'. " 1 Ills } c•;tr, cc)rl7rlr,ttr �r,ncls 1110tiIJ be tht: best per- fra'nli'T sector OF tilt• U.S. bond nl;lrkct," Rids allot!!: i J,n- 2001 FINANCIAL ADVISOR 49 1:t j WF?Ek:HOU` E SECURITIES , IU : 76C-776-5G29 JUN 07' 01 11 � �21 No . OC"2 P . er invitational itivestor, AiichacI Matcrasso of Fiduciary Trust C olllpany Intentational, in New York. He cites tl.c Rd's aggo•c-mc casing as a key ream. Materlutso thinks the hest play is in lower - quality lxmds, which ►ttlderimformcd top -grade ct» 1xhmics last )scar, Therefore, lower -quality bonds, dc- prcmd by recession fean that may pmvc Ow-rblt➢cm•tl, havc ground tri, make up, "You have to he very ewfitl-ti'mut the n pcs of comit.tnittt that you invest ill, similar to investing in the equity ttlaticst," Mucrasso stws, noting that low -rated tecl,nulow debt is nat fariltg w-Ull now. Of course, not a.1 it vesturs call stout• ach tile• credit JA inhe•rcm in any tier (if curporatc 1wind. Accordingly, the• dirniti- ishing stipply of Trcaattric'.a mold sclhci 6int'hcdrtcd lixed-inlome inwslors wtirrying to the mortgag -t)aaeti securi- ties of the Cie➢vcrllttlem Nntie►nni Mortpew Asse►oation, ((her than .t T'rcawry, a Ciin hic Mac pass -through is tilt anl)' security that's backed by the IIIII faith and cl-Mit of the L)Ihcd Staten gov ernnlcnt. And Ginnie Macs hay morc— Ain,'r 180 h;tsiq poiim mot~, c on c itly. Ina cvmnlrlitary he posted at wm w'pIJ1l- co.com in ,1 -w 2000, 1'intcr➢ bond wiz - art{ Bill Gross i3rrdictcd that Ginnie Plus will outperform Tt't asurics .and return S,5% Over the next five -plus yearn. not find a better im,estmcm in tile bond inarket" than Ginnie [Taos, Grass wrotc. Not that thest; thing arc perfcct, hand you, Ginnie Mam pruvid nlontllly ir1- contc that's part IntercAt .ind part tax-free return ufprincipa1,—n,caliilig they're st;if- liquidating instr►nitcim, "Tile trick is to aclurate the into;lic from the p.-incip.11 and recycle the latter so that clients tic➢Iot deplete principal," says Fort Worth advittar David Dicadin, Denvcr ccrtified fitkancial planner Lury Howes. with Sharkey, Howes &. Javer, suggcats using GNMA l im—throughs in trusts where the receipt of current cash i.S important bllt maintain - ills ptincihal is less act. A scconell drawback to Ginnic Abcs is that, as with all mortgagebacked debt, they're ;stuweptiblic to prepayment risk, That occurs ► hol intclut ratcF f1ll a11t{ hnmto►vlicrs e?ccidc to mfillance, reduc- ing the life_ and yield of the knvcstment. To mitigate rrcl),tymrnt risk, the hrncl of hiess)iv & AssnciXte% Inc. suggccts tC1111- iltg Mass-throtl$lts with lelo-coolvil bonds. "That protwti sonic itl'tllc ttl►sidc if you drink intcrest rate,. u%ll gi, den► li," Dinsiin uays, explainilit; that the wvrmt, would appreeilaic ctvrl 41% tiic ';hell rc- ccivcs Carly return of'Cilllnic MAC 1'1-111:1- pal. "The unfurtunatc halt' is yoo'vc got d0uh1v du,vt,siec 1'1t1v bo wrc►ltg on in lerem mtcs." U41matt'ly, the 1►i•rpayint-m risk nlak.s Ginnie Macs lem I hall Wk.,11 as the dsik li-cc bcnchnlark ;n a world e01114r;1t I'rcasul �4c That leaves agolicy dcbr--thc holldi , nett "The reality is that as stand- alone credits, the agencies are not as Creditworthy as they are as quasi -government entities." [dare Seidner, director, Standish, Ayer & Wood the :nelrtgagt' b,l: krei w;cttl'iuvs, of the Fcdcr,il National Morljmgc A,ycl,htinil (1-.111111e Mv) and the FiAcral Ilolrlc Mortga5e Corp. ()~rt ddic A1.1c)--:1!t lictssi- tt1e licit to the throne of riskim wco.iry. IndcO, ;igvncy tit -tit c,hrr;w% &I 1111plied �;cx•crnntc�nt i{uat�: ntcc. But Ihat's 01C 13mbiclil. lt'� l.vidcly per- ccie'cd that 111w fi dcr.11 government ttokild n't allow Fmiltlr oil, Freddie To f,il, ycr no tac•r mquires Undc Sant tot rc scar invesloo, frorn a8ellcy (1cfatllr. Mi„-ec.tve•r, sank t➢t1 Capitol bill have ltrnllused wcakcning tile• di:s txt-,e'ccn these highlydo,cragc,1, }u v- ernmctlt•il)Oiisored, Nc%v York Sto k F.xchallge-listed 1111blic t'u;Jtor1rIOl1S and Washingtrltl. "'1'hc rcalit)• is t lhat at st;l ui ;tkxw crttliti, Vic :ipwici ;ilr not as CrIA, invor►lly as t}lry.uc as h�➢.r�nrrn,u cntilics," Seldnel. says. The imtkrt agrccs. Wllrri Rep. Richard liakcl• (K-I.a. ) inlrodtf,ed legida- ticnt last year that vi-owd 1lavc rcnlo ed the Tivistlry lines -of creciit available to tilt .lgeticirs (lvl►iclt hale ncv:•r [cell drawn (m), their detx tlturcm Clicaiwilcel dr w� .Iti- cal,y. They'l'r silicc rtchtturewd, but that's m,crtl). anothct° way of sad':nb th.tt :Wl l•,'Cb$ional colworlls hack inti-miltce'd a new se►urce of volatiliry to the alcllcy-eicbt n►aritcl. "Anti if thus: is political risk, then I think It'.; hared 'ur nl;cncics to become tlhc bo llmark," says Scidner, who secs :ontinucd vell,ltility ill agency issue~ as the dcl►ate over t`.1csc mirfits' relatiotlship \k'itlh firn•rrnnlent hrtxc'eds. Not cver)culc shares that cxhcctation, howcwcr. David Gincke, who 111anage6 fixed -income portiblios for Vangu M, Says the 1t14111kal risk asst►c•iatcd with agcnc•y seculritics Itac abitcd, anti 111viv.- fore volatility will st!hsidc. Ivdccd, Ills lat- est bill from llakcr's officc (11 . 1409. the Svcolhdary MOrI8;1FV Market Furor-pl•ins Rcgt11.11r,ry Implowill'.'m A, t) necks i ,:d ue•ersight olf I lultic anti 1'rc'ddir, a thrust stilt as favtilal* iin• thell' SC�►Il'111C�. If dcl➢t securities horn in tllc t.'nilyd "tatcs wo:l't make satisfactory bench, ,nark,, wilal ,,bout the envdits ut ut;lcr et!►uliricR' "Srrrllr t;uro l;1nd type of i;r➢vcVIM) cnt sx-m-ity coold be them: to cril,he'. in," Matci,.hsso a:lKgcos. "If (lure is more u►litication, and if thcy &cide to) issue oil Muse ofan aggicl arc baths, then N-oll havc .n, ccolloml, than i� as large as the US. Coulloilly and wh ch mold plv- vidc that two: of hrisdav credit go,tlity and ,access in C.Ipital. But I ► 0tlld put that as a low-htoliAiilily civIlt.,, Matcrasio adds that ce•cll f that trlw sp cc, forvigr. delht mill won't malty s -nv� fit. Inust .'1nu•l-4:an ,c-,etstun bcc«l w cur- I:ncy risk twAikei tic part of file p;1ckaKc. A'lUfCOWl•, the euru's clittaphclillting debut is wltiktly to rase irn•cntors' comfol t k\'el will) 11lex Swilitics any line won. There's also rho i:•sur of w1w.lhcr American invrstOrs we+old Miele, folvign- government debt as the %ililc tc►ticlt4ttl!1e to safcly that .l 'hrcasttt y is. Many wottici 1101, lays advibor J. Michael Martin, pres- ident of Fil alicial Advantage in Criltimbia, Ald. "Americans typically don't think Ili -it ancyt!it'r pvc1,11111cnt is rick-frec in the sank w;iy emirs is," Mal'lin says. "WC,re a 11relly hc1r04:111al bunch." Su some are bu)ing Tlwsurica, tic- sl►+te the meal^.`- N;;vld. "Maybe the sup- 1'ly Will diulil'.W'l to the paint %brae the. 50 F'INANGIAL ADMOR June ?Ct01 WANV IM1;1Ne'1AIJ►1)t'1St�$'ttA��All�'F.tQA1 i1a►- �K.HUU--t tI-lJ!<.i I _ , 1iJ� fbV-�rb-byLy �Vi'� Uf 'U1 11 J N0 .oi-, ,, 1- .04 Price ofthe bun d g01c.c tip," Ilcxits Sant Iit,f: of Not'lllstar FinanclA 111altttittg iti 1;;:dlctrd, Mi., who has put a snial' 1101 � don of sailic clicnls' fixed-iltc'unic itllo- cations into Trctttiurics. Ccrtainh• Some invomi's %%•ill c',:mancd the Siliky Of Ills U.S I;cn•ci-tt- ment--mid there are plcilty of not-for- prufits, luCAl 90%W1111rnts and other orga- nizatiotib that, by Charter, only, call ttsj: Trcasurirs; combine a flcxx on demand with a shrinking supply, and I Ittll's itltctit n1CM thesis scellU reasonable. It1 a +t-s,►m- case scenario, U.S. gmeriviNntc coulet llc J .Icddrd t) a purtfolio to net won,' •-f -cc, tic- lowtt aAct rct l i ns. I c;tl1 it . s mtris hat 'WVCs.iW str.ttvgy," )Iui1 sa1's. As i'lr .ts the hrC>ble:11 ofa ma'•kct sans risk - fiat; te;.!nry. red Chait•+11;tn (ileeits}+an ► o wurrlvd. '`Olvcn airrj d0lir AC0A,)d," Grmisp.,'1 to d the 1-100d industry in Ap.-il, "ycxt cu yc+,ir C01leagucs could pro ducc a licariy risk- less smtritN. For eximple, this cuuld 1w accomp4shcd with a vrt•t• s n1r.ir tranchc of A wHatcralizvo debt obliepition backed by high-grade corporate debt. I Atli contidcat chat U.S. emanci,ll ,narkctc can (creatc) pnvatC 1lt�i'I1,1tiiCs ti'Itl'. tttMY Of the at 61'lbutcs that wirker pal- 1 ticipanrs valor in Trc`imil y swiritics.°" The transition �+ouldrl't be paiiticss, Grec nstxm said, but ,coillpvtitivc proA. suVca gild protlt c ppol cm1iticr Will I1rc►- vicdc a strong iilc:cntii•c• to minimi?v Stich costs." For thosc wringing tlicir hantia AbMlt tic disappearan,:c (.�ic Ttcasm-w.i, it's Worth rvc ; llitlg th-It at one po),nr dllrmp► ti+c 1900s, bonds iSskicd by I tij 50'.d at a yield below that of T-hollds with ccuilputable srat,lrit:rs, 111valling cite tllarkct implicifly was sawlg that the cumputcr giant was tnczrc credirwol,tily• thall 01C U.S. govervi11Cliz. Uthers, i:1c°uding '!•rcasl-+ry Srcretat'y1 Pall O'Ndli, 113Vc suggested that the Treasury Department might cotttintic is- suing ilotcit altcj builds seen if it 1c•:rc 00- neecssary to finance g wCrilli tit �cti+i• i tics. But the relative supply of T-bond%, bills and notes would likely be puny. The bottom litic is, if the Fcd chief is ` right about b;tdget surpluses knocking the Treasury market utit of existence Or shrinking it to a p001 of c'.apital nn bigger than the. Calili►rttia municipal market, ehc bond market k Ruing to 1-4 otte cotlf'ttsk!ci Place for several years, Q FINANCIAL ADVISOR CONSULT YOUR FINANCIAL ADVISOR! FREE SUBSCRIPTION! Subscribe online at www.fa-mag.com J1.1ric 2001 FINANCIAL ADVISOR 51 P INVESTMENT ADVISORY BOARD Business Session: A Meeting Date: June 13,2001 ITEM TITLE: Transmittal of Treasury Report for April 30, 2001 Attached please find the Treasury Report for April 30, 2001. Review, Receive and File the Treasury Report for April 30, 2001. r John M. Falconer, Finance Director T 0 0 4ht 4 4a" MEMORANDUM TO: La Quinta City Council FROM: John M. Falconer, Finance Director/Treasurer SUBJECT: Treasurer's Report for April 30, 2001 DATE: May 29, 2001 Attached is the Treasurer's Report for the month ending April 30, 2001. 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 Not Sold/Matured Other T Ending T C ---. Cash $837,401 $1,005,221 (1) $1,842,622 ! $1,( LAW $8,746,551 113,203 0 8,859,754 11 �US Treasuries (2) $36,373,520 (7,411,000) (1,954) 28,960,566 (7,4 US Gov't Agencies (2) lCommercial Paper (2) $12,881,355 $4,986,219 3,500,000 (5,000,000) 48,153 6,835 12,929,508 4� Mutual Funds $2,956,693 7,6672913 (1 3,493,054 (1,4 1 ,493, 54 1,6 Total $66 781 739 $12 286 337 $12 411 000 $53 034 $66 710,1107 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. range 105,221 3,203 12,954) 1,153 )3,165) i7,913 1,629) A Johlh M. Falconer — - — - Finance Director/Treasurer a Footnote (1) The amount reported 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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O Q +�+ O �MLn tD 0NN MCN N f00 0U 0 CD ��MnCOtiO C6 0)r-tto qc c I- GO aiOco coO M r�.LOp O CO Ln N O r- CO V CCOO�L nj It 00 P- Ln N Co LL CO C4 CO 1` O N _ O 1` O CD — CO Ln M O 01 f• cn ~ Oof ton R OILM OLOA�N�� ti O CT " 0 CIOOI to CD�(CTD CDMN—O r--co -�O (D 0�0 QpCM 0-00tnq (0vLn4p� V- 00 ~ Oc Cin D �� mMN�M CM V (DCA -M COO c E YI L cm O dl C L ~ cn C cn m C a cn 2 V C cx w E H c V 6 C L d v m C c c a41 m 0) Cn U d J y W W X M F' j Q CD c� C C r a =� x N N A m V C N 0 C .w U � C 00 d c d C c H •• x> _� N w °e O�` ZCL a1 N w V cm C C Oto > N (n W tal OL C L y O N� w d d �j w Lv Ql p d L C 41 m- acn0Ix N WCnW000E- Z U W z I-T O IT Ln O N co V O O 1` N O N O N 1` r- CN � O t0 C'i M ":P N 0 O O C6 O CD CD M CD N N O N O (D CT co N L N O N CA N CITY OF LA,QUINTA BALANCE SHEET 04/30/01 ASSETS: CITY CITY RDA RDA FA FIXED LONG TERM FIXED LONG TERM FINANCING LONG TERM GRAND CITY ASSETS DEBT RDA ASSETS DEBT AUTHORITY DEBT TOTAL POOLED CASH (2,282,435.80) 11,961,075.74 (19,240.52) 9,659,399.42 LQRP INVESTMENT IN POOLED CASH 805,000.00 805,000.00 INVESTMENT T-BILUNOTES & OTHER 45,480,000.00 45,480,000.00 AUTO MALL CASH 2O6,379.08 206,379.08 LQRP CASH 30,595.75 30,595.75 BOND REDEMPTION CASH 81,024.68 1,482.54 82.507.22 BOND RESERVE CASH BOND PROJECT CASH 9,909,687.62 632,409.86 10,542,097.48 BOND ESCROW CASH PETTY CASH 1,000.00 1,000.00 CASH & INVESTMENT TOTAL 43,404,943.28 22,787,383.79 614,651.88 66,806,97&95 INVESTMENT IN LAND HELD FOR RESALE ACCOUNTS RECEIVABLE 43,186.99 60,900.00 8,010,000.00 8,114,086.99 PREMIUM/DISCOUNT ON INVESTMENT (96,870.29) 0.50 0.49 (96,869.30) LQRP-ACCOUNTS RECEIVABLE 82,723.71 82,723.71 INTEREST RECEIVABLE 76,442.31 76,442.31 LOAN/NOTES RECEIVABLE 2,681,756.20 2,681,756.20 DUE FROM OTHER AGENCIES 15,000.00 15,000.00 DUE FROM OTHER AGENCIES - CVAG 2,299,096.69 2,299,096.69 CVAG ALLOWANCE (2,299,096.69) (2,299.096.69) DUE FROM OTHER GOVERNMENTS DUE FROM OTHER FUNDS 882,491.63 551,038.04 1,433,529.67 DUE FROM RDA 8,497,550.20 8,497,550.20 INTEREST ADVANCE -DUE FROM RDA 2,713,505.54 2,713,505.54 ADVANCES TO OTHER FUNDS NSF CHECKS RECEIVABLE 24,995.66 24,995.66 ACCRUED REVENUE 833.40 833.40 TRAVEL ADVANCES 2,678.50 2,678.50 EMPLOYEE ADVANCES PREPAID EXPENSES RECEIVABLE TOTAL 12,158,980.54 3,377,251.86 8,010,000.49 23,546,232.88 WORKER COMPENSATION DEPOSIT RENT DEPOSITS UTILITY DEPOSITS 75.00 75.00 MISC. DEPOSITS 2,100.00 2,100.00 DEPOSITS TOTAL 2,175.00 2.175.00 GENERAL FIXED ASSETS 1,386,331.67 15,590,699.00 9,988,279.05 26,965,309.72 ACCUMULATED DEPRECIATION (812,743.27) (812,743.27) AMOUNT AVAILABLE TO RETIRE L/T DEBT 3,395,117.03 3,395,117.03 AMOUNT TO BE PROVIDED FOR L/T DEBT 1,645,647.34 95,393,266.76 8,010,000.00 105,048,914.10 TOTAL OTHER ASSETS 573,58&40 15,590,699.00 1,645,647.34 9,988,279.05 98,788,383.79 8,010,000.00 134,596,597.58 TOTAL ASSETS 56,139,687.22 15,590,699.00 1,645,647.34 26,164,635.64 9,988,279.05 98,788,383.79 8,624,652.37 8,010,000.00 224,951,984.41 LIABILITIES: ACCOUNTS PAYABLE (50,490.66) (50,490.66) DUE TO OTHER AGENCIES 920,209.86 920,209.86 DUE TO OTHER FUNDS 115,321.70 1,318,207.97 1,433,529.67 INTEREST ADVANCE -DUE TO CITY ACCRUED EXPENSES 6,029.10 6,029.10 PAYROLL LIABILITIES 2,247.54 2,247.54 STRONG MOTION INSTRUMENTS 407.66 407.66 FRINGE TOED LIZARD FEES 74,661.50 74,661.50 SUSPENSE 4,192.63 4,192.63 DUE TO THE CITY OF LA QUINTA PAYABLES TOTAL 1,072,579.33 1,318,207.97 2,390,787.30 ENGINEERING TRUST DEPOSITS SO. COAST AIR QUALITY DEPOSITS ARTS IN PUBLIC PLACES DEPOSITS 449,167.45 449,167.45 LQRP DEPOSITS 15,663.00 15,663.00 DEVELOPER DEPOSITS 1,089,515.85 1,089,515.85 MISC. DEPOSITS 448,693.41 448,693.41 AGENCY FUND DEPOSITS 1,653,859.64 1,653,859.64 TOTAL DEPOSITS 3,641,236.35 15,663.00 3,656,899.35 DEFERRED REVENUE 8,270.67 8,010,000.00 8,018,270.67 OTHER LIABILITIES TOTAL 8,270.67 8,010,000.00 8,018,270.67 COMPENSATED ABSENCES PAYABLE 321,991,94 321,991.94 DUE TO THE CITY OF LA QUINTA 1,323,665.40 11,211,059.54 12,534,714.94 DUE TQ COUNTY OF RIVERSIDE 12,249,102.00 12,249,102.00 DUE TO C.V. UNIFIED SCHOOL DIST. 9,418,222.25 9,418,222.25 DUE TO DESERT SANDS SCHOOL DIST. BONDS PAYABLE 65,910,000.00 8,010,000.00 73,920,000.00 TOTAL LONG TERM DEBT 1,645,647.34 98,788,383.79 8,010,000.00 108,444,031.13 TOTAL LIABILITIES 4,722,086.35 1,645,647.34 1,333,870.97 98,788,383.79 8,010,000.00 8,010,000.00 122,509,988.45 EQUITY -FUND BALANCE 51,417,600.87 15,590,699.00 24,830,764.67 9,988,279.05 614,652.37 102,441,995.96 TOTAL LIABILITY & EQUITY 56,139,687.22 15,590,699.00 1,645,647.34 26,164,635.64 9,988,279.05 98,788,383.79 8,624,652.37 8,010,000 00 224,951,984 41 CASH & INVESTMENT TOTAL 66,806,978.95 PREMIUM/DISCOUNT ON INVESTMENT L166,869,301 TOTAL 66,710,109.65 91 INVESTMENT ADVISORY BOARD Business Session No. B Meeting Date: June 13,2001 TITLE: Continued Consideration of Fiscal Year 2001 /02 Investment Policies BACKGROUND: Pursuant to State Legislation the City investment policies must be approved on an annual basis by the City Council. This approval is done in June of each year. During the last several months, the Board has met to update the City Investment Policy. A strike out version of the Investment Policy has been attached Pursuant to the Investment Policy, the Board meets with the City Manager and City Attorney to discuss the Investment Policy before they are forwarded to the City Council for their consideration. Staff contacted Wells Fargo and the institutional limitations placed on the Sweep Account pertained to Wells Fargo and not the City. RECOMMENDATION: Forward the revised Investment Policy to the City Council for their consideration with an appropriate recommendation. JcYW M. Falconer, Finance Director INVESTMENT ADVISORY BOARD Meeting Date: June 13,2001 Workplan for Fiscal Year 2001 /02 Business Session No. C The purpose of this report is to obtain from the Investment Advisory Board issues and items that Staff should consider in developinga workplan and budget for Fiscal Year 2001 /02. Based upon recent meetings, Staff has not identified any items that are in addition to the monthly recurring agenda items. rovide Staff with furthe direction. ohn M. Falbonef, Finance Director INVESTMENT ADVISORY BOARD Correspondence & Written Material Item A Meeting Date: June 13,2001 TITLE: Month End Cash Report - May 2001 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. This report also includes other statistical investment data for the Board to review. Information item only. hn M. Falconer,"Finance Director N 0 C O O LL N d co N (DC)0 00 N 00 O MMOMOMF�000 m N N Ln N Op MIT Cnh0E-Nh00 O tf) `" to 0000'TC'TCOGeiC,Y) O F-� M$p000� Ot(jOO (''? 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O N ONO COD (OD po��OO NppN E (D N l M MO y N (D O CD 00 CD tf CD ` U N N N `-'M V O to N y tQ ++LOLO O Z 3 to LO e- O IT U d 0 y d N Q LO N d U ` C f0 ay+ fti O 0) °= C N m y X l`Q O m •0 N L L Z' 0 C C O E o C N° Ti Ti tm s O m O 7 y 0.0 O O t d U) 4) N ll) > m m C C a r3 N 7 7 7 N 15 O 0 M y M a to 17^ 0m 0 =wZF-F- uJ a a a Lu a(AoZ0nLL2<:2 U) N O_ �? O 0 p CD N O— Ln CO O) (o co N 00 — O O CO Or) N N LQ N 'OV (O 0 O 0 � 00 O U) N C L C U � O -p N cm t6 ° N L 0- w o y c cc' E w 0O aid N ° t�-a N R y N da co M 0 CU > t0 `1 co CDN 0 "t3 a) N d E O O+ N m CIS U) 0 N n .0 m 0 •U) d v y C O a a�N 0 C j -0 N C O ro C E E N >+ �' w C ; > L > C `1 E 0 C 0 O C CO v0 p 0 0 lQ r-0 a 0a 0 N tmv : 7 C O CL w tT = s ..ctIS as w v c a)oo LE y= n.E r c a °c C yy a)O fO U O � !tea V) o -a ,mo Q 0 c 0 �. a . d tr rn o d a to 04))4)) M� -@ wos C 0 t .c LL E N 0 > to O ow 'O N y .lQ ftT 0" �'C15 .0 L 0 U) r- V 1°Oa =wO dy O. d ° ° C O D. Cl 0 � E d LCLm — d +' N 0 a y y -p ` w> 0 C 0) M � U CIS C .0 a C - C 3r �o 0 N .c (C O 0 d O c E 'O d 0 E N A w C O R� 0 M -0am d 0 y 0 a w .. U y0 L aci 0 ` tm axis cc a� lC a d o a� X L` 0 U rn E �.- m �. a) 0 E C O a) N 0 a V y a) > d w ,._ 3 t 0 U` C y L U) N U U c lR O Sa O LL F-�w� H I FRB:Commercial Paper Rates and Outstandings http://www.federalreserve.gov/Releases/CP/ Federal Reserve Release 0 I= Release I About I Outstandin;?s I Historical discount rates I Historical outstandinas Data as of May 31, 2001 Volume Commercial Pa per Rates and Outstandin s statistics 2001: 11 Derived from data supplied by The Depository Trust Company Posted June 1, 2001 Yield curve Money market basis 1 7 15 30 80 Discount rate spread Thirty -day A2/P2 less AA nonfinancial commercial paper (daily) Ogoth Netu"V Flrerniel — — — Nsrtnsrenl .... ABIFE Percent 4.5 4.4 4.3 #2 4.1 4. 0 3.0 �6 Basis points 01JAN98 01 JUL98 01 JAN99 01JUL99 O1 JAN40 Q1JUL4D 41 JAN41 .w2/P2 3pr-ec)J — — — Alf P2 spread, 5—day moving average 150 140 130 120 110 1 OD 90 80 70 60 50 40 30 20 10 01JUL01 a 1 of 3 06/01/2001 9:07 AM FRB:Commercial Paper Rates and Outstandings Discount rate history Thirtv-dav commercial parer (daily) 2 of 3 http://www.federalreserve.gov/Releases/CP/ �P Aft # +� �.t •-A +. Percent 8 7 r r■ 4 � r3 01 JAN98 01 J UL98 01 JAN99 01 JUL99 01 JANDD 01 JULDD 01 JAN01 01 JU L01 Financial --- Nonfinandial •.••• A2/P2 Outstandings Weekly (Wednesday), seasonally adjusted Billions of dollars Billions of dollars 1300 360 350 1200 340 330 320 310 1100 300 290 280 1000 270 260 250 900 240 230 220 210 8001 01JAN98 01 JUL98 01 JAN99 01 JUL99 01 JANOD 01 JULDD 01 JAN01 01 JULD1 Financial — -- Nanfinanci al 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. Commercial paper outstanding 0 06/01 /2001 9:07 AM FRB:Commercial Paper Rates and Outstandings http://www.federalreserve.gov/Releases/CP/ Commercial paper outstanding, miscellaneous categories Release I About Outstandings I Historical discount rates I Historical outstandings Home I Statistical releases To comment on this site, please fill out our feedback form. Last update: June 1, 2001 K-1 3 of 3 06/01/2001 9:07 AM FRB: H.15--Selected Interested Rat ... b-Only Daily Update-- May 31, 2001 http://www.federaireserve.gov/Releases/HI5/update/ Federal Reserve Statistical Release Selected Interest Rates Release Date: May 31, 2001 H.15: Release I Release dates I About I ASCII 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 May 31, 2001 Yields in percent per annum Mon Tue Wed May 28 May 29 May 30 Instruments SELECTED INTEREST RATES Federal funds (effective) 1 2 3 3.94 4.09 4.05 Commercial paper 3 4 5 6 Nonfinancial 1-month 3.96 3.97 2-month 3.88 3.90 3-month 3.75 3.89 Financial 1-month 4.01 3.99 2-month 3.91 3.92 3-month 3.87 3.87 CDs (secondary market) 3 7 1-month 4.02 4.03 3-month 3.92 3.92 6-month 3.90 3.91 Eurodollar deposits (London) 3 8 1-month 4.00 4.00 3-month 3.91 3.91 6-month 3.91 3.91 Bank prime loan 2 3 9 7.00 7.00 7.00 Discount window borrowing 2 10 3.50 3.50 3.50 U.S. Government securities Treasury bills (secondary market) 3 4 3-month 3.63 3.60 6-month 3.56 3.54 1-year 3.56 3.54 Treasury constant maturities 11 3-month 3.71 3.68 6-month 3.68 3.65 1-year 3.76 3.75 2-year 4.33 4.34 3-year 4.60 4.61 5 1 of 3 06/01 /2001 9:07 AM FRB: H.15--Selected Interested Rat ... b-Only Daily Update-- May 31, 2001 http://www.federalreserve.gov/Releases/H 15/update/ 5-year 7-year 10-year 20-year 30-year Interest rate swaps 12 1-year 2-year 3-year 4-year 5-year 7-year 10-year 30-year Corporate bonds Moody's seasoned Aaa Baa State & local bonds 13 Conventional mortgages 14 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. FOOTNOTES 5.06 5.40 5.54 6.05 5.86 4.25 4.85 5.28 5.56 5.75 6.02 6.27 6.57 7.37 8.18 5.07 5.39 5.54 6.04 5.86 4.26 4.88 5.32 5.60 5.80 6.07 6.31 6.61 7.36 8.17 The daily effective federal funds rate is a weighted average of rates on trades through N.Y. brokers. Weekly figures are averages of 7 calendar days ending on Wednesday of the current week; monthly figures include each calendar day in the month. Annualized using a 360-day year or bank interest. On a discount basis. 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.federalreserve.gov/releases/cp) for more information. 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. An average of dealer offering rates on nationally traded certificates of deposit. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. 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. Rate for the Federal Reserve Bank of New York. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Treasury. International Swaps and Derivatives Association (ISDA) mid -market par swap rates. Rates are for a Fixed Rate Payer in return for receiving three month LIBOR, and are based on rates collected at 11:00 a.m. by Garban Intercapital plc and published on Reuters Page ISDAFIXI. Source: Reuters Limited. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Thursday quotations. 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 2 of 3 06/01/2001 9:07 AM FRB: H.15--Selected Interested Rat ... b-Only Daily Update-- May 31, 2001 http://www.federalreserve.gov/Releases/HI5/update/ 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 Home I Statistical releases To comment on this site, please fill out our feedback form. Last update: May 31, 2001 6 3 of 3 06/01/2001 9:07 AM LAIF Performance Report http://www.treasurer.ca.gov/laif/performance.htm Philip A gel des state Treasurer Inside the State Treasurees Ogee Local Agency Investment Fund LAW Performance Report Reporting Date: Effective Date: Quarter Yield: Daily: Year: Life: Quarter Ending 3/31/01 Apportionment Rate: Earnings Ratio: Fair Value Factor: Monthly Average For April: 05/30/01 05/31 /01 5.53% 5.19% 6.22% 168 6.16% .00016888357102193 1.003713806 5.760% Pooled Money Investment Account Portfolio composition* 49.6 Billion 04130101 Loans Reverses Corporate 5.02% -1.70% Bo 4.9 Commercial Paper 26.16% CD'sJBN's 18.05% ■ Treasuries ❑ Time Deposits ■ Mortgages ® Agencies ■ CD'sON's 0 Bankers Acceptances ■ Repo ■ Commercial Paper o Corporate Bonds ® Loans ■ Reverses *The PMIA portfolio does not hold any securities of PG&E or Southern California Edison. A41, 1 of 2 06/01/2001 9:07 AM LAIF Performance Report http://www.treasurer.ca.gov/laif/performance.htm Please click here for an Adobe PDF version of this information. If you have any questions about Adobe Acrobat or are having trouble downloading please click here. NI 2 of 2 06/01/2001 9:07 AM N L U U cv C N N N O N A 13 O 0 .II � N O O � N v� O C Z a � N O N Z (n Q U (0 qtM CORM CQ IZ-0O000�00 M0M^NN M •� a' O Op(MO�tnti COti(D(D'C T-t`000�0N MM(O 0-0 O N > N N �A C) N O ti 0 CO r- C0 0 M 0 0) 0) �� 0000o000000 OLOgt04 ~ 0 ti (O t` OD d• qq O� Q O Co r- 00 � M w (O d• Lo � O � w a- T- cvi Ci NCY)M cMq'(OOr M V. 00 0 N� ti�o(000 �MODC%4 N OO NooIt ~D fM(fld'r'�C~C 0 in (M tco O 00 N � O 04NNT-M O O O F-- N N cu Ny C N X E cN N cn C L O C U N y X N Q N C i X T 'A Lui •1••� (n a 1 0 C N LL E C a)y F- x> L Q N O 02S O a a O K w o > W C) � N L C N > L a •� 'a Q- -0 � n/ �>/ ,F.r U Q O� cQ ..• wF-U)0w O X cQ N .-• M N w c1)Q�000E- O O z s C O E N Q 0 14, CO 00 cv .O N N rn N N O W � F- N Z w C N0M tn0l`0tN000 a-N00V-0»O(00'T LP- l`0NItf-- a)M06001`d"NCN � "it r— M 00 � � N CM N T- M N 00 It r: M N O O z c w W U OO aa) W w > . . >O (W <oY 06 0 — 'Wwz z� U �0- SwzDU WZU�UO�� 1ZZF=m 00D0Z) [� CDa:UU(Lm0IL INVESTMENT ADVISORY BOARD Meeting Date: TITLE: June 13,2001 Pooled Money Investment Board Report for March 2001 Correspondence & Written Material Item B The Pooled Money Investment Board Report for March, 2001 is included in the agenda packet. 0llll_1N_ •1 Receive & File hn M. Falconer, Finance Director STATE OF CALIFORNIA STATE TREASURER'S OFFICE POOLED MONEY INVESTMENT BOARD REPORT MARCH 2O01 TABLE OF CONTENTS SUMMARY.* 9999960 0000 *Soo**@ see** o 00*000 go **of* go 90 0* 0 00 *Goo* 0*0 0 0 000 0 *so** a see*** J SELECTED INVESTMENT DATA.............................................2 PORTFOLIO COMPOSITION...................................................3 INVESTMENT TRANSACTIONS...............................................4 TIMEDEPOSITS..................................................................22 BANK DEMAND DEPOSITS...................................................37 POOLED MONEY INVESTMENT BOARD DESIGNATION .......... 38 POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF MARCH 2O01 WITH MARCH 2O00 (DOLLARS IN THOUSANDS) MARCH 2O01 MARCH 2O00 CHANGE Average Daily Portfolio $ 44,260,909 $ 33,979,494 +10,281,415 Accrued Earnings $ 224,648 $ 168,381 +56,267 Effective Yield 5.976 5.851 +.125 I Average Life -Month End (In Days) 187 201 -14 1 Total Security Transactions Amount $ 28,3099438 $ 19,4411,306 +898689132 Number 616 431 +185 Total Time Deposit Transactions Amount $ 197369600 $ 19241,695 +494,905 Number 143 115 +28 Average Workday Investment Activity $ 19365,729 $ 899,261 +466,468 Prescribed Demand Account Balances For Services $ 197,057 $ 168,433 +289624 For Uncollected Funds $ 160,471 $ 153,162 +7,309 r� 1 PHILIP ANGELIDES TREASURER STATE OF CALIFORNIA INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED) MARCH 31, 2001 PERCENTAGE TYPE OF SECURITY Government AMOUNT PERCENT CHANGE FROM PRIOR MONTH Bills Bonds 3,139,215 7.34 -.55 Notes 0 0.00 0.00 Strips 3,201,182 7.49 +.51 Total Government 0 6,340,397 0.00 14.83 0.00 -.04 Federal Agency Coupons Certificates of Deposit 39205,240 50 7.03 -.07 Bank Notes 3,005,048 7.03 -2.11 Bankers' Acceptances 1,017 2.46 +.02050, Repurchases 0 0.00 0.00 Federal Agency Discount Notes 0 0.00 0.00 Time Deposits 90292,135 21.74 +.20 GNMAs 4,6939345 10.98 +.87 Commercial Paper 1,106 0.00 0.0010,047,850 FHLMC 23.50 -.01 Corporate Bonds 10,795 0.02 0.00 Pooled Loans 2,447,583 5.72 +.12 GF Loans 2,6579552 6.22 +.06 Reversed Repurchases 0 0.00 0.00 0 0.00 -.96 Total (All Types) 42,751,068 100.00 INVESTMENT ACTIVITY MARCH 2O01 FEBRUARY 2001 NUMBER Pooled Money AMOUNT NUMBER AMOUNT Other 616 $ 281309,438 470 $ 22,066,969 Time Deposits 96 196 699,349 18 43,033 1,736,600 123 1,726,500 Totals 855 $ 30,745,387 611 $ 23,836,502 PMIA Monthly Average Effective Yield 5.976 6.169 Year to Date Yield Last Day of Month 6.389 6.444 2 0* Commercial Paper 23.50% Pooled Money Investment Account Portfolio Composition $42.7 Billion Loans Corporate 6.22% Bonds 5.72% 610991C WAMOW'. CD's/BN's 9.49% Treasuries 14.83% Agencies 29.24% Time Deposits 10.98% Mortgages 0.02% 03/31 /01 B Treasuries B Time Deposits ■ Mortgages El Agencies ■ CD's/BN's Bankers Acceptances ■ Repo Commercial Paper ® Corporate Bonds Loans 0 Reverses K. 03/01/01 REDEMPTIONS CD Soc Gen 5.480% 03/01/01 5.470 $49,829 13 $98,426.47 5.545 CD Soc Gen 5.480% 03/01/01 5.470 50,000 13 98,764.24 5.545 CD UBS 6.480% 03/01/01 6.450 45,500 78 636,467.65 6.545 CD CommerzBk 6.475% 03/01/01 6.460 49,350 78 690,757.63 6.549 CP Hertz 03/01/01 5.410 25,000 9 33,812.50 5.492 CP Amer Exp 03/01/01 5.450 50,000 9 68,125.00 5.602 CP Amer Exp 03/01/01 5.450 50,000 9 68,125.00 5.602 CP Amer Exp 03/01/01 5.380 50,000 13 97,138.89 5.465 CP Amer Exp 03/01/01 5.380 50,000 13 97,138.89 5.465 CP U/B Calif 03/01/01 5.490 40,000 14 85,400.00 5.578 CP SRAC 03/01/01 6.120 50,000 14 119,000.00 6.219 CP GECC 03/01/01 5.440 50,000 20 151,111.11 5.532 CP GECC 03/01/01 5.440 50,000 20 151,111.11 5.532 CP Morg Stan 03/01/01 5.660 46,493 49 358,176.90 5.783 CP Morg Stan 03/01/01 5.660 50,000 49 385,194.44 5.783 CP Salomon 03/01/01 6.250 50,000 69 598,958.33 6.413 CP Salomon 03/01/01 6.250 50,000 69 598,958.33 6.413 CP GECC 03/01/01 6.430 50,000 99 884,125.00 6.636 CP GECC 03/01/01 6.430 50,000 99 884,125.00 6.636 CP GECC 03/01/01 6.430 50,000 99 884,125.00 6.636 CP GECC 03/01/01 6.430 50,000 99 884,125.00 6.636 CP Assoc 03/01/01 6.500 50,000 107 965,972.22 6.720 CP Assoc 03/01/01 6.500 50,000 107 965,972.22 6.720 CP GECC 03/01/01 6.440 50,000 122 1,091,222.22 6.675 CP GECC 03/01/01 6.440 50,000 122 1,091,222.22 6.675 CP GECC 03/01/01 6.400 50,000 127 1,128,888.89 6.638 CP GECC 03/01/01 6.400 50,000 127 1,128,888.89 6.638 CP Assoc 03/01/01 6.400 50,000 129 1,146,666.67 6.641 Disc Notes FHLMC 03/01/01 6.270 43,950 337 2,579,608.62 6.753 MTN B/A 5.970% 03/01/01 6.130 15,000 1,822 4,569,700.00 6.164 Treas Bills 03/01/01 5.870 50,000 281 2,290,930.56 6.237 Treas Bills 03/01/01 5.870 50,000 281 2,290,930.56 6.237 Treas Bills 03/01/01 5.843 20,000 304 986,733.33 6.231 Treas Bills 03/01/01 6.835 50,000 304 2,463,666.67 6.222 Treas Bills 03/01/01 6.835 50,000 304 2,463,666.67 6.222 Treas Bills .03/01/01 5.843 50,000 304 2,466,833.33 6.231 Treas Bills 03/01/01 5.810 50,000 309 2,493,458.33 6.199 Treas Bills 03/01/01 5.810 50,000 309 2,493,458.33 6.199 Treas Bills 03/01/01 5.730 50,000 317 2,522,791.67 6.118 Treas Bills 03/01/01 5.730 50,000 317 2,522,791.67 6.118 Treas Bills 03/01/01 5.900 30,000 342 1,681,500.00 6.337 RRP Treas Bills 03/01/01 4.730 50,000 13 (85,256.74) -4.795 Treas Bills 03/01/01 4.730 50,000 13 (85,256.74) -4.795 4 03/01/01 RRP (continued) Treas Bills 03/01/01 5.610 50,000 69 (531,904.67) -5.687 Treas Bills 03/01/01 5.610 50,000 69 (531,904.67) -5.687 Treas Bills 03/01/01 6.030 50,000 78 (644,757.75) -6.113 Treas Bills 11/29/01 5.050 50,000 20 (135,053.83) -5.120 Treas Bills 11/29/01 5.050 50,000 20 (135,053.83) -5.120 Treas Bills 11/29/01 5.300 50,000 49 (345,364.93) -5.373 Treas Bills 11/29/01 5.300 50,000 49 (345,364.93) -5.373 PURCHASES CD World 5.380% 03/20/01 5.400 50,000 CD World 5.380% 03/20/01 5.400 50,000 CD World 5.380% 03/23/01 5.400 50,000 CD World 5.380% 03/23/01 5.400 50,000 CP Salomon 03/14/01 5.450 50,000 CP Salomon 03/14/01 5.450 50,000 CP Salomon 03/14/01 5.450 50,000 CP Salomon 03/14/01 5.450 50,000 CP SRAC 03/14/01 5.900 50,000 CP Amer Exp 03/20/01 5.450 10,000 CP Amer Exp 03/20/01 5.450 50,000 CP Amer Exp 03/20/01 5.450 50,000 03/02/01 REDEMPTIONS CD Cr Suisse 5.480% 03/02/01 5.460 50,000 29 219,920.19 5.535 CD Cr Suisse 5.480% 03/02/01 5.460 50,000 29 219,920.19 5.535 CD Cr Suisse 5.480% 03/02/01 5.460 50,000 29 219,920.19 5.535 CD Cr Suisse 5.480% 03/02/01 5.460 50,000 29 219,920.19 5.535 CP CRC 03/02/01 5.450 25,000 4 15,138.89 5.529 CP CRC 03/02/01 5.450 50,000 4 30,277.78 5.529 CP Amer Exp 03/02/01 5.440 50,000 7 52,888.89 5.521 CP ASCC 03/02/01 5.450 50,000 29 219,513.89 5.550 CP ASCC 03/02/01 5.450 50,000 29 219,513.89 5.550 CP JP Morgan 03/02/01 5.470 50,000 30 227,916.67 5.571 CP JP Morgan 03/02/01 5.470 50,000 30 227,916.67 5.571 CP JP Morgan 03/02/01 5.470 50,000 30 227,916.67 5.571 CP JP Morgan 03/02/01 5.470 50,000 30 227,916.67 5.571 FHLB 5.375% 03/02/01 5.440 50,000 731 5,438,000.00 5.446 PURCHASES CP Bear 03/05/01 5.500 50,000 CP Bear 03/05/01 5.500 50,000 CP Bear 03/05/01 5.500 50,000 CP Bear 03/05/01 5.500 50,000 ^ 5 03/02/01 PURCHASES (continued) CP Heller 03/12/01 6.000 25,000 CP Heller 03/12/01 6.000 50,000 CP CRC 03/27/01 5.300 31,000 CP FMCC 03/27/01 5.320 45,000 03/05/01 REDEMPTIONS CD U/B Calif 5.500% 03/05/01 5.500 40,000 13 79,444.44 5.576 CP Bear 03/05/01 5.500 50,000 3 22,916.67 5.578 CP Bear 03/05/01 5.500 50,000 3 22,916.67 5.578 CP Bear 03/05/01 5.500 50,000 3 .22,916.67 5.578 CP Bear 03/05/01 5.500 50,000 3 22,916.67 5.578 CP ConAgra 03/05/01 5.860 50,000 7 56,972.22 5.948 CP Amer Exp 03/05/01 5.440 50,000 10 75,555.56 5.523 CP Salomon 03/05/01 5.480 50,000 10 76,111.11 5.564 CP Salomon 03/05/01 5.480 50,000 10 76,111.11 5.564 CP Hertz 03/05/01 5.490 25,000 11 41,937.50 5.575 CP ConAgra 03/05/01 5.960 35,355 11 64,385.38 6.053 CP FMCC 03/05/01 5.470 50,000 11 83,569.44 5.555 CP FMCC 03/05/01 5.470 50,000 11 83,569.44 5.555 CP FMCC 03/05/01 5.470 50,000 11 83,569.44 5.555 CP CP FMCC 03/05/01 5.470 50,000 11 83,569.44 5.555 Household 03/05/01 5.470 10,000 12 18,233.33 5.556 CP Amer Exp 03/05/01 5.460 50,000 12 91,000.00 5.545 CP Household 03/05/01 5.470 50,000 12 91,166.67 5.556 CP CP GECC 03/05/01 5.480 50,000 12 91,333.33 5.566 CP GECC GECC 03/05/01 5.480 50,000 12 91,333.33 5.566 CP GECC 03/05/01 5.480 50,000 12 91,333.33 5.566 i CP Salomon 03/05/01 03/05/01 5.480 5.490 50,000 12 91,333.33 5.566 CP Salomon 03/05/01 5.490 50,000 50,000 12 12 91,500.00 5.576 CP Salomon 03/05/01 5.490 50,000 12 91,500.00 91,500.00 5.576 5.576 CP CP Salomon 03/05/01 5.490 50,000 12 91,500.00 5.576 CP Heller 03/05/01 5.800 50,000 12 96,666.67 5.891 CP FMCC FMCC 03/05/01 5.490 50,000 13 99,125.00 5.577 CP SRAC 03/05/01 5.490 50,000 13 99,125.00 5.577 CP FMCC 03/05/01 6.120 50,000 17 144,500.00 6.222 CP FMCC 03/05/01 6.300 50,000 76 665,000.00 6.473 CP U/B Calif 03/05/01 6.300 50,000 76 665,000.00 6.473 CP Assoc 03/05/01 6.460 50,000 103 924,138.89 6.673 CP Assoc 03/05/01 6.500 50,000 111 1,002,083.33 6.725 CID GECC 03/05/01 6.500 50,000 111 1,002,083.33 6.725 CID GECC 03/05/01 6.440 50,000 124 1,109,111.11 6.677 CP U/B Calif 03/05/01 03/05/01 6.440 6.460 50,000 124 1,109,111.11 6.677 CP Assoc 03/05/01 6.400 50,000 50,000 124 137 1,112,555.56 6.698 1,217,777.78 0o 6.650 6 03/05/01 REDEMPTIONS (continued) CP Assoc 03/05/01 6.400 50,000 137 1,217,777.78 6.650 MTN FIR FMCC 6.158% 03/05/01 5.719 15,000 1,151 2,854,159.79 6.197 PURCHASES CD World 5.270% 03/25/01 5.260 50,000 CD World 5.270% 03/25/01 5.260 50,000 CD World 5.270% 03/25/01 5.260 50,000 CD World 5.270% 03/28/01 5.260 50,000 CP GECC 03/12/01 5.380 20,000 CP GECC 03/12/01 5.380 50,000 CP GECC 03/12/01 5.380 50,000 CP GECC 03/12/01 5.380 50,000 CP GECC 03/12/01 5.380 50,000 CP Amer Exp 03/12/01 5.460 50,000 CP Amer Exp 03/12/01 5.460 50,000 CP Amer Exp 03/12/01 5.460 50,000 CP Amer Exp 03/12/01 5.460 50,000 CP Merrill 03/12/01 5.470 50,000 CP Merrill 03/12/01 5.470 50,000 CP Merrill 03/12/01 5.470 50,000 CP Merrill 03/12/01 5.470 50,000 CP GECC 03/19/01 5.450 50,000 CP GECC 03/19/01 5.450 50,000 CP GECC 03/20/01 5.450 50,000 CP GECC 03/20/01 5.450 50,000 CP FMCC 03/21/01 5.460 50,000 CP FMCC 03/21/01 5.460 50,000 CP GECC 03/23/01 5.450 50,000 CP GECC 03/23/01 5.450 50,000 CP FMCC 03/23/01 5.460 50,000 CP FMCC 03/23/01 5.460 50,000 CP GMAC 03/27/01 5.380 50,000 CP GMAC 03/27/01 5.380 50,000 CP Heller 03/27/01 5.750 28,400 CP GMAC 03/28/01 5.380 50,000 CP GMAC 03/28/01 5.380 50,000 CP SRAC 04/02/01 5.920 20,000 CP SRAC 04/02/01 5.920 50,000 CP ConAgra 04/09/01 5.670 10,000 CP ConAgra 04/09/01 5.670 50,000 PURCHASES g/ Treas Notes 6.375% 06/30/02 5.375 37,617 Treas Notes 6.375% 06/30/02 5.375 50,000 7 03/05/01 PURCHASES r/ (continued) Treas Notes 6.250% 08/31 /02 5.375 Treas Notes 11.875% 11 /15/03 5.375 Treas Notes 7.875% 11 /15/04 5.375 03/06/01 REDEMPTIONS CP Household CP Household CP GECC CP GECC CP Household CP Household CP Salomon CP Salomon CP Amer Home CP Amer Exp CP SRAC CP GECC CP GECC CP GECC CP GECC PURCHASES CD Montreal CD Montreal CP Amer Exp CP FMCC CP FMCC CP SRAC CP ConAgra 03/07/01 REDEMPTIONS CD CommerzBk CP ConAgra CP GECC CP GECC CP GMAC CP GMAC PURCHASES CP FMCC CP FMCC CP FMCC 21,318 50,000 27,573 03/06/01 5.420 50,000 8 60,222.22 5.501 03/06/01 5.420 50,000 8 60,222.22 5.501 03/06/01 5.440 50,000 11 83,111.11 5.524 03/06/01 5.440 50,000 11 83,111.11 5.524 03/06/01 5.450 20,000 11 33,305.56 5.534 03/06/01 5.450 50,000 11 83,263.89 5.534 03/06/01 5.480 50,000 11 83,722.22 5.565 03/06/01 5.480 50,000 11 83,722.22 5.565 03/06/01 5.560 50,000 12 92,666.67 5.647 03/06/01 5.460 50,000 13 98,583.33 5.546 03/06/01 6.100 50,000 13 110,138.89 6.198 03/06/01 6.280 50,000 77 671,611.11 6.453 03/06/01 6.280 50,000 77 671,611.11 6.453 03/06/01 6.440 50,000 125 1,118,055.56 6.678 03/06/01 6.440 50,000 125 1,118,055.56 6.678 5.350% 03/27/01 5.350 50,000 5.350% 03/27/01 5.350 50,000 03/30/01 5.240 50,000 04/03/01 5.240 33,000 04/03/01 5.240 50,000 04/03/01 5.900 50,000 04/09/01 5.740 19,700 6.640% 03/07/01 6.620 47,000 142 1,276,563.38 6.988 03/07/01 5.950 48,000 20 158,666.67 6.052 03/07/01 6.280 50,000 78 680,333.33 6.455 03/07/01 6.280 50,000 78 680,333.33 6.455 03/07/01 6.430 50,000 105 937,708.33 6.6.43 03/07/01 6.430 50,000 105 937,708.33 6.6.43 03/27/01 5.200 40,000 03/27/01 5.200 50,000 03/27/01 5.200 50,000 tip L, ti 03/07/01 PURCHASES (continued) CID Text Fin 03/28/01 5.270 42,262 CID Salomon 04/02/01 5.250 45,000 CID GECC 04/02/01 5.200 50,000 CID GECC 04/02/01 5.200 50,000 CID GECC 04/02/01 5.200 50,000 CID GECC 04/02/01 5.200 50,000 CID GECC 04/02/01 5.200 50,000 CID GECC 04/02/01 5.200 50,000 CID Salomon 04/02/01 5.250 50,000 CID Salomon 04/02/01 5.250 50,000 CID ConAgra 04/06/01 5.760 27,500 03/08/01 REDEMPTIONS CD Austria 5.500% 03/08/01 5.495 50,000 30 228,958.89 5.571 CD Austria 5.500% 03/08/01 5.495 50,000 30 228,958.89 5.571 CID Household 03/08/01 5.420 50,000 10 75,277.78 5.503 CID Salomon 03/08/01 5.490 50,000 10 76,250.00 5.574 CID Salomon 03/08/01 5.490 50,000 10 76,250.00 5.574 CID GECC 03/08/01 5.460 50,000 14 106,166.67 5.547 CID GECC 03/08/01 5.460 50,000 14 106,166.67 5.547 CID GECC 03/08/01 5.460 50,000 14 106,166.67 5.547 CID GECC 03/08/01 5.460 50,000 14 106,166.67 5.547 CID SRAC 03/08/01 6.080 50,000 14 118,222.22 6.179 CID Amer Exp 03/08/01 5.460 50,000 15 113,750.00 5.548 CID GMAC 03/08/01 5.480 50,000 16 121,777.78 5.569 CID GMAC 03/08/01 5.480 50,000 16 121,777.78 5.569 PURCHASES CD World 5.280% 03/30/01 5.300 10,000 CD World 5.280% 03/30/01 5.300 50,000 CD World 5.280% 03/30/01 5.300 50,000 CID GECC 03/12/01 5.320 25,000 CID GECC 03/12/01 5.320 50,000 CID GECC 03/12/01 5.320 50,000 CID GECC 03/12/01 5.320 50,000 CID Weyrhauser 04/02/01 5.550 25,000 CID Weyrhauser 04/02/01 5.550 50,000 CID FMCC 04/03/01 5.240 50,000 CID FMCC 04/03/01 5.240 50,000 CID FMCC 04/04/01 5.240 50,000 CID FMCC 04/04/01 5.240 50,000 CID Barton 04/06/01 5.250 45,000 CID Barton 04/06/01 5.250 50,000 CID SRAC 04/06/01 5.800 50,000 9 03/09/01 REDEMPTIONS CD U/B Calif 5.480% 03/09/01 5.480 50,000 15 114,166.67 5.556 CD U/B Calif 5.480% 03/09/01 5.480 50,000 15 114,166.67 5.556 CD U/B Calif 5.480% 03/09/01 5.480 50,000 15 114,166.67 5.556 CD Stnrd Ch 5.510% 03/09/01 5.510 50,000 31 237,236.11 5.586 CD Stnrd Ch 5.510% 03/09/01 5.510 50,000 31 237,236.11 5.586 CID Amer Exp 03/09/01 5.420 50,000 11 82,805.56 5.504 CID Salomon 03/09/01 5.490 50,000 11 83,875.00 5.575 CID Salomon 03/09/01 5.490 50,000 11 83,875.00 5.575 CID SRAC 03/09/01 6.080 50,000 15 126,666.67 6.180 CID GMAC 03/09/01 5.480 50,000 17 129,388.89 5.570 CID GMAC 03/09/01 5.480 50,000 17 129,388.89 5.570 CID W/F 03/09/01 5.400 35,000 36 189,000.00 5.504 CID FMCC 03/09/01 6.300 50,000 80 700,000.00 6.478 CID FMCC 03/09/01 6.300 50,000 80 700,000.00 6.478 CID GECC 03/09/01 6.430 50,000 107 955,569.44 6.646 CID GECC 03/09/01 6.430 50,000 107 955,569.44 6.646 PURCHASES CID Bear 03/12/01 5.390 50,000 CID Bear 03/12/01 5.390 50,000 CID GECC 03/16/01 5.420 50,000 CID GECC 03/16/01 5.420 50,000 CID GECC 03/16/01 5.420 50,000 CID GECC 03/16/01 5.420 50,000 CID FMCC 03/21 /01 5.400 25,000 CID RCAPC 04/04/01 5.260 32,559 CID DFC 04/06/01 5.240 39,121 CID DFC 04/09/01 5.220 25,114 CID ASCC 04/10/01 5.200 30,000 CID ASCC 04/10/01 5.200 50,000 CID SRAC 04/10/01 5.550 50,000 03/12/01 REDEMPTIONS CID Bear 03/12/01 5.390 50,000 3 22,458.33 5.467 CID Bear 03/12/01 5.390 50,000 3 22,458.33 5.467 CID GECC 03/12/01 5.320 25,000 4 14,777.78 5.397 CID GECC 03/12/01 5.320 50,000 4 29,555.56 5.397 CID GECC 03/12/01 5.320 50,000 4 29,555.56 5.397 CID GECC 03/12/01 5.320 50,000 4 29,555.56 5.397 CID GECC 03/12/01 5.380 20,000 7 20,922.22 5.460 CID GECC 03/12/01 5.380 50,000 7 52,305.56 5.460 CID GECC 03/12/01 5.380 50,000 7 52,305.56 5.460 CID GECC 03/12/01 5.380 50,000 7 52,305.56 5.460 CID GECC 03/12/01 5.380 50,000 7 52,305.56 5.460 00 10 03/12/01 REDEMPTIONS (continued) CP Amer Exp 03/12/01 5.460 50,000 7 53,083.33 5.541 CP Amer Exp 03/12/01 5.460 50,000 7 53,083.33 5.541 CP Amer Exp 03/12/01 5.460 50,000 7 53,083.33 5.541 CP Amer Exp 03/12/01 5.460 50,000 7 53,083.33 5.541 CP Merrill 03/12/01 5.470 50,000 7 53,180.56 5.551 CP Merrill 03/12/01 5.470 50,000 7 53,180.56 5.551 CP Merrill 03/12/01 5.470 50,000 7 53,180.56 5.551 CP Merrill 03/12/01 5.470 50,000 7 53,180.56 5.551 CP Heller 03/12/01 6.000 25,000 10 41,666.67 6.093 CP Amer Exp 03/12/01 5.460 50,000 10 75,833.33 5.544 CP Amer Exp 03/12/01 5.420 50,000 14 105,388.89 5.506 CP Salomon 03/12/01 5.470 40,000 18 109,400.00 5.561 CP Salomon 03/12/01 5.470 50,000 18 136,750.00 5.561 CP Salomon 03/12/01 5.470 50,000 18 136,750.00 5.561 CP ConAgra 03/12/01 5.970 40,000 19 126,033.33 6.072 CP ConAgra 03/12/01 5.970 50,000 25 207,291.67 6.078 SALES r/ Treas Notes 6.375% 06/30/02 5.375 37,617 7 39,771.72 5.449 Treas Notes 6.375% 06/30/02 5.375 50,000 7 52,864.17 5.449 Treas Notes 6.250% 08/31 /02 5.375 21,318 7 22,348.20 5.449 Treas Notes 11.875% 11/15/03 5.375 50,000 7 62,208.76 5.449 Treas Notes 7.875% 11 /15/04 5.375 27,573 7 31,834.93 5.449 PURCHASES CP Amer Home 03/19/01 5.460 4,270 CP Halliburton 03/19/01 5.420 47,000 CP Amer Exp 03/19/01 5.380 50,000 CP Amer Exp 03/19/01 5.380 50,000 CP Amer Exp 03/19/01 5.380 50,000 CP U/B Calif 03/19/01 5.420 50,000 CP U/B Calif 03/19/01 5.420 50,000 CP Citicorp 03/19/01 5.440 50,000 CP Citicorp 03/19/01 5.440 50,000 CP Citicorp 03/19/01 5.440 50,000 CP Citicorp 03/19/01 5.440 50,000 CP Amer Home 03/19/01 5.460 50,000 CP Heller 03/19/01 5.750 50,000 CP Household 03/20/01 5.350 50,000 CP Household 03/20/01 5.350 50,000 CP Household 03/20/01 5.350 50,000 CP Household 03/20/01 5.350 50,000 CP Citicorp 03/20/01 5.440 50,000 CP Citicorp 03/20/01 5.440 50,000 �. 11 03/12/01 PURCHASES (continued) CP Citicorp CP Citicorp CP Salomon CP Salomon CP Salomon CP Salomon 03/13/01 REDEMPTIONS CD CIBC PURCHASES BN B/A BN B/A BN B/A CP Salomon CP Salomon CP Household CP Household CP Bear CP Bear CP W/F CP W/F CP GMAC CP GMAC CP GMAC CP GMAC CP Amer Exp CP Amer Exp CP GECC CP GECC CP GECC CP GECC 03/14/01 REDEMPTIONS CP Salomon CP Salomon CP Salomon CP Salomon CP SRAC NO PURCHASES 03/20/01 5.440 50,000 03/20/01 5.440 50,000 03/22/01 5.420 50,000 03/22/01 5.420 50,000 03/22/01 5.420 50,000 03/22/01 5.420 50,000 6.660% 03/13/01 6.610 50,000 148 4.930% 06/05/01 4.930 50,000 4.930% 06/05/01 4.930 50,000 4.930% 06/05/01 4.930 50,000 04/02/01 5.170 50,000 04/02/01 5.170 50,000 04/02/01 5.180 50,000 04/02/01 5.180 50,000 06/01/01 4.900 50,000 06/01 /01 4.900 50,000 06/04/01 4.810 50,000 06/04/01 4.810 50,000 07/02/01 4.780 50,000 07/02/01 4.780 50,000 07/02/01 4.780 50,000 07/02/01 4.780 50,000 07/27/01 4.700 50,000 07/27/01 4.700 50,000 08/02/01 4.740 50,000 08/02/01 4.740 50,000 08/02/01 4.740 50,000 08/02/01 4.740 50,000 1,367,069.68 6.742 03/14/01 5.450 50,000 13 98,402.78 5.536 03/14/01 5.450 50,000 13 98,402.78 5.536 03/14/01 5.450 50,000 13 98,402.78 5.536 03/14/01 5.450 50,000 13 98,402.78 5.536 03/14/01 5.900 50,000 13 106,527.78 5.994 12 03/15/01 REDEMPTIONS MTN B/A 6.380% 03/15/01 6.380 25,000 1,823 7,961,708.33 6.417 FNMA 5.625% 03/15/01 6.480 30,000 420 2,228,732.10 6.517 PURCHASES CP Citicorp 03/16/01 5.560 50,000 CP Citicorp 03/16/01 5.560 50,000 CP Citicorp 03/16/01 5.560 50,000 CP • Citicorp 03/16/01 5.560 50,000 CP Citicorp 03/16/01 5.560 50,000 CP Citicorp 03/16/01 5.560 50,000 CP Citicorp 03/16/01 5.560 50,000 03/16/01 REDEMPTIONS CP Citicorp 03/16/01 5.560 50,000 1 7,722.22 5.638 CP Citicorp 03/16/01 5.560 50,000 1 7,722.22 5.638 CP Citicorp 03/16/01 5.560 50,000 1 7,722.22 5.638 CP Citicorp 03/16/01 5.560 50,000 1 7,722.22 5.638 CP Citicorp 03/16/01 5.560 50,000 1 7,722.22 5.638 CP Citicorp 03/16/01 5.560 50,000 1 7,722.22 5.638 CP Citicorp 03/16/01 5.560 50,000 1 7,722.22 5.638 CP GECC 03/16/01 5.420 50,000 7 52,694.44 5.501 CP GECC 03/16/01 5.420 50,000 7 52,694.44 5.501 CP GECC 03/16/01 5.420 50,000 7 52,694.44 5.501 CP GECC 03/16/01 5.420 50,000 7 52,694.44 5.501 MTN FR Bkrs Trst 5.768% 03/16/01 5.691 33,000 1,046 5,681,346.55 6.283 FNMA 6.520% 03/16/01 6.642 10,000 354 643,892.78 6.850 FNMA 6.520% 03/16/01 6.642 50,000 354 3,218,388.89 6.850 PURCHASES CD World 4.760% 06/29/01 4.760 50,000 CD World 4.760% 06/29/01 4.760 50,000 CP Amer Exp 07/02/01 4.600 50,000 CP NCAT 03/19/01 5.440 50,000 CP NCAT 03/19/01 5.440 50,000 CP NCAT 03/19/01 5.440 50,000 CP GECC 03/28/01 5.050 50.,000 CP GECC 03/28/01 5.050 50,000 CP GECC 03/28/01 5.050 50,000 CP GECC 07/06/01 4.620 50,000 CP GECC 07/06/01 4.620 50,000 CP GECC 07/06/01 4.620 50,000 13 03/19/01 REDEMPTIONS CID CID NCAT NCAT 03/19/01 5.440 50,000 3 22,666.67 5.518 CID NCAT 03/19/01 5.440 50,000 3 22,666.67 5.518 CID Amer Home 03/19/01 03/19/01 5.440 5.460 50,000 4,270 3 22,666.67 5.518 CID Halliburton 03/19/01 5.420 47,000 7 7 4,533.32 49,532.78 5.541 5.501 CID CID Amer Exp Amer Exp 03/19/01 5.380 50,000 7 52,305.56 5.460 CID Amer Exp 03/19/01 03/19/01 5.380 5.380 50,000 50,000 7 52,305.56 5.460 CID U/B Calif 03/19/01 5.420 50,000 7 7 52,305.56 52,694.44 5.460 5.501 CID" CID U/B Calif 03/19/01 5.420 50,000 7 52,694.44 5.501 CID Citicorp Citicorp 03/19/01 5.440 50,000 7 52,888.89 5.521 CID Citicorp 03/19/01 5.440 50,000 7 52,888.89 5.521 CID Citicorp 03/19/01 5.440 50,000 7 52,888.89 5.521 CID Amer Home 03/19/01 03/19/01 5.440 5.460 50,000 50,000 7 52,888.89 5.521 CID Heller 03/19/01 5.750 50,000 7 7 53,083.33 55,902.78 5.541 5.836 CID CI' GECC GECC 03/19/01 5.450 50,000 14 105,972.22 5.537 03/19/01 5.450 50,000 14 105,972.22 5.537 PURCHASES CID Salomon 03/28/01 5.000 50,000 CID Salomon 03/28/01 5.000 50,000 CID Salomon 03/28/01 5.000 50,000 CID Salomon 03/28/01 5.000 50,000 CID Salomon 03/28/01 5.000 50,000 03/20/01 REDEMPTIONS CD CD World World 5.380% 03/20/01 5.400 50,000 19 142,498.50 5.474 CID Household 5.380% 03/20/01 03/20/01 5.400 50,000 19 142,498.50 5.474 CID Household 03/20/01 5.350 5.350 50,000 50,000 8 8 59,444.44 5.430 CID CID Household 03/20/01 5.350 50,000 8 59,444.44 59,444.44 5.430 5.430 CID Household Citicorp 03/20/01 5.350 50,000 8 59,444.44 5.430 CID Citicorp 03/20/01 03/20/01 5.440 5.440 50,000 50,000 8 60,444.44 5.522 CID Citicorp 03/20/01 5.440 50,000 8 8 60,444.44 5.522 CP Citicorp5.522 03/20/01 5.440 50,000 8 60,444.44 CID CID GECC 03/20/01 5.450 50,000 15 60,444.44 113,541.67 5.522 5.538 CID GECC Amer Exp 03/20/01 03/20/01 5.450 50,000 15 113,541.67 5.538 CID Amer Exp 03/20/01 5.450 5.450 10,000 50,000 19 19 28,763.89 5.540 CID Amer Exp 03/20/01 5.450 50,000 19 143,819.44 5. 540 143,819.44 5.540 14 03/20/01 PURCHASES MTN Citicorp 8.000% 02/01 /03 4.990 12,641 03/21/01 REDEMPTIONS CP FMCC 03/21 /01 5.400 25,000 12 45,000.00 5.484 CP FMCC 03/21 /01 5.460 50,000 16 121,333.33 5.549 CP FMCC 03/21 /01 5.460 50,000 16 121,333.33 5.549 MTN FR FMCC 5.954% 03/21 /01 5.687 10,000 1,015 1,667,679.37 6.459 MTN FR FMCC 5.964% 03/21 /01 5.691 7,000 1,028 1,182,155.78 6.375 MTN FR FMCC 5.954% 03/21 /01 5.691 15,000 1,028 2,532,882.63 6.375 MTN FR FMCC 5.954% 03/21 /01 5.687 9,500 1,057 1,653,473.01 6.217 MTN FR FMCC 6.176% 03/21 /01 5.700 15,000 1,139 2,814,467.17 6.258 MTN FR FMCC 6.176% 03/21 /01 5.578 28,500 1,161 5,441,120.80 6.121 PURCHASES CP ConAgra 04/02/01 5.320 28,100 CP ConAgra 04/02/01 5.320 50,000 CP FMCC 04/04/01 4.960 50,000 CP Heller 04/05/01 5.350 40,000 CP Amer Exp 04/09/01 4.950 20,000 CP Amer Exp 04/09/01 4.950 50,000 MTN FMCC 6.000% 01 /14/03 5.600 7,000 MTN FMCC 7.250% 01 /15/03 5.600 6,000 03/22/01 REDEMPTIONS CP Salomon 03/22/01 5.420 50,000 10 75,277.78 5.503 CP Salomon 03/22/01 5.420 50,000 10 75,277.78 5.503 CP Salomon 03/22/01 5.420 50,000 10 759277.78 5.503 CP Salomon 03/22/01 5.420 50,000 10 75,277.78 5.503 Disc Notes FNMA 03/22/01 6.230 50,000 358 3,097,694.44 6.733 Disc Notes FNMA 03/22/01 6.230 50,000 358 3,097,694.44 6.733 PURCHASES CP Salomon 04/02/01 5.010 50,000 CP Salomon 04/02/01 5.010 50,000 CP Salomon 04/02/01 5.010 50,000 CP Salomon 04/02/01 5.010 50,000 CP Salomon 04/04/01 5.010 50,000 CP Salomon 04/04/01 5.010 50,000 CP Salomon 04/04/01 5.010 50,000 CP Salomon 04/04/01 5.010 50,000 CP Morg Stan 04/09/01 5.000 17,000 CP Morg Stan 04/09/01 5.000 50,000 15 03/22/01 PURCHASES (continued) CID Morg Stan 04/09/01 5.000 50,000 CID Morg Stan 04/09/01 5.000 50,000 CID Text Inc. 04/12/01 4.970 34,500 CID GECC 04/12/01 4.920 50,000 CID GECC 04/12/01 4.920 50,000 CID GECC 04/12/01 4.920 50,000 03/23/01 REDEMPTIONS CD World 5.380% 03/23/01 5.400 50,000 22 164,997.99 5.475 CD World 5.380% 03/23/01 5.400 50,000 22 164,997.99 5.475 CID GECC 03/23/01 5.450 50,000 18 136,250.00 5.540 CID GECC 03/23/01 5.450 50,000 18 136,250.00 5.540 CID FMCC 03/23/01 5.460 50,000 18 136,500.00 5.550 CID FMCC 03/23/01 5.460 50,000 18 136,500.00 5.550 CID GMAC 03/23/01 5.460 50,000 35 265,416.67 5.565 CID GMAC 03/23/01 5.460 50,000 35 265,416.67 5.565 CID GMAC 03/23/01 5.460 50,000 35 265,416.67 5.565 CID GMAC 03/23/01 5.460 50,000 35 265,416.67 5.565 CID GECC 03/23/01 6.260 50,000 93 808,583.33 6.451 CID GECC 03/23/01 6.260 50,000 93 808,583.33 6.451 CID JP Morgan 03/23/01 6.280 50,000 93 81.1,166.67 6.472 CID JP Morgan 03/23/01 6.280 50,000 93 811,166.67 6.472 CID GECC 03/23/01 6.410 50,000 178 1,584,694.44 6.711 CID GECC 03/23/01 6.410 50,000 178 1,584,694.44 6.711 Disc Notes FHLB 03/23/01 6.250 50,000 359 3,116,319.44 6.758 PURCHASES CID Honeywell 04/02/01 5.000 13,000 CID Country 04/02/01 5.000 34,000 CID DFC 04/04/01 5.000 42,417 CID DFC 04/04/01 5.000 50,000 CID DFC 04/04/01 5.000 50,000 CID Morg Stan 04/05/01 5.000 50,000 CID Morg Stan 04/05/01 5.000 50,000 CID Morg Stan 04/05/01 5.000 50,000 CID Morg Stan 04/05/01 5.000 50,000 CID Amer Exp 04/12/01 4.950 50,000 CID Amer Exp 04/12/01 4.950 50,000 CID Amer Exp 04/12/01 4.950 50,000 MTN GMAC 6.750% 12/10/02 5.540 25,000 MTN Citicorp 8.000% 02/01/03 5.130 14,667 P 03/26/01 REDEMPTIONS MTN IBM MTN IBM MTN IBM PURCHASES CID Amer Home CID Amer Home CID Honeywell CID ConAgra CID Salomon CID Salomon CID Honeywell CID Amer Home CID Amer Home CID Amer Home CID Amer Exp CID Amer Exp l03/27101 REDEMPTIONS CD Montreal CD Montreal CID FMCC CID FMCC CID FMCC CID Heller CID GMAC CID GMAC CID CRC CID FMCC CID Heller PURCHASES CID Country CID Wal-Mart CID Salomon CID Salomon CID ConAgra CID Heller CID Country CID Citicorp CID Citicorp 5.300% 03/26/01 5.300% 03/26/01 5.300% 03/26/01 04/02/01 04/02/01 04/06/01 04/06/01 04/06/01 04/06/01 04/06/01 04/06/01 04/06/01 04/06/01 04/09/01 04/09/01 6.430 5.380 5.316 5.200 5.200 5.040 5.320 5.020 5.020 5.040 5.180 5.180 5.180 4.950 4.950 12,500 10,000 14,000 50,000 50,000 10,000 40,064 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 490 710 712 1,071,069.44 1,045,455.56 1,451,520.00 7.099 5.534 5.452 5.350% 03/27/01 5.350 50,000 21 156,041.67 5.424 5.350% .03/27/01 5.350 50,000 21 156,041.67 5.424 03/27/01 5.200 40,000 20 115,555.56 5.287 03/27/01 5.200 50,000 20 144,444.44 5.287 03/27/01 5.200 50,000 20 144,444.44 5.287 03/27/01 5.750 28,400 22 99,794.44 5.850 03/27/01 5.380 50,000 22 164,388.89 5.472 03/27/01 5.380 50,000 22 164,388.89 5.472 03/27/01 5.300 31,000 25 114,097.22 5.393 03/27/01 5.320 45,000 25 166,250.00 5.413 03/27/01 5.820 50,000 32 258,666.67 5.931 04/02/01 5.050 50,000 04/05/01 5.000 50,000 04/05/01 5.030 50,000 04/05/01 5.030 50,000 04/09/01 5.300 30,000 04/09/01 5.350 50,000 04/10/01 5.030 50,000 04/12/01 5.000 50,000 04/12/01 5.000 50,000 17 03/28/01 REDEMPTIONS BN Banc One 6.570% 03/28/01 6.570 45,000 118 969,075.00 6.661 BN Banc One 6.660% 03/28/01 6.660 50,000 183 1,692,750.00 6.752 BN B/A 6.850% 03/28/01 6.850 50,000 364 3,463,055.56 6.945 BN B/A 6.850% 03/28/01 6.850 50,000 364 3,463,055.56 6.945 CD World 5.270% 03/28/01 5.260 50,000 23 168,028.85 5.333 CD World 5.270% 03/28/01 5.260 50,000 23 168,028.85 5.333 CD World 5.270% 03/28/01 5.260 50,000 23 168,028.85 5.333 CD World 5.270% 03/28/01 5.260 50,000 23 168,028.85 5.333 CD - Bayer Lnds 5.460% 03/28/01 5.460 50,000 41 310,916.67 5.535 CD Bayer Lnds 5.460% 03/28/01 5.460 50,000 41 310,916.67 5.535 CD UBS 6.590% 03/28/01 6.580 50,000 120 1,096,702.43 6.671 CD UBS 6.590% 03/28/01 6.580 50,000 120 1,096,702.43 6.671 CP Salomon % 03/28/01 5.000 50,000 9 62,500.00 5.075. CP Salomon 03/28/01 5.000 50,000 9 62,500.00 5.075 CP Salomon 03/28/01 5.000 50,000 9 62,500.00 5.075 CP Salomon 03/28/01 5.000 50,000 9 62,500.00 5.075 CP Salomon 03/28/01 5.000 50,000 9 62,500.00 5.075 CP GECC 03/28/01 5.050 50,000 12 84,166.67 5.128 CP GECC 03/28/01 5.050 50,000 12 84,166.67 5.128 CP GECC 03/28/01 5.050 50,000 12 84,166.67 5.128 CP Text Fin 03/28/01 5.270 42,262 21 129,920.43 5.359 CP GMAC 03/28/01 5.380 50,000 23 171,861.11 5.473 CP GMAC 03/28/01 5.380 50,000 23 171,861.11 5.473 CP Heller 03/28/01 5.820 50,000 33 266,750.00 5.932 CP GECC 03/28/01 6.260 50,000 98 852,055.56 6.457 CP GECC 03/28/01 6.260 50,000 98 852,055.56 6.457 CP JP Morgan 03/28/01 6.280 50,000 98 854,777.78 6.477 CP JP Morgan 03/28/01 6.280 50,000 98 854,777.78 6.477 CP GECC 03/28/01 6.210 20,000 103 355,350.00 6.410 CP GECC 03/28/01 6.210 50,000 103 888,375.00 6.410 CP GECC 03/28/01 6.210 50,000 103 888,375.00 6.410 CP GMAC 03/28/01 6.440 40,000 121 865,822.22 6.673 CP GMAC 03/28/01 6.440 50,000 121 1,082,277.78 6.673 CP GECC 03/28/01 6.420 5,000 169 150,691.67 6.711 CP AT&T 03/28/01 6.450 43,516 169 1,317,628.22 6.743 CP GECC 03/28/01 6.420 50,000 169 1,506,916.67 6.711 CP GECC 03/28/01 6.420 50,000 169 1,506,916.67 6.711 PURCHASES CP Heller 04/10/01 5.350 25,000 CP GECC 04/10/01 4.950 50,000 CP GECC 04/10/01 4.950 50,000 CP Heller 04/10/01 5.350 50,000 CP GECC 04/11/01 4.950 50,000 CP GECC 04/11/01 4.950 50,000 18 03/28/01 PURCHASES (continued) CP GECC CP GECC CP Citicorp CP Citicorp CP Citicorp CP Bear CP Bear CP Bear CP Bear 03/29/01 REDEMPTIONS Disc Notes FHLMC Disc Notes FHLMC Disc Notes FHLMC Disc Notes FHLMC Disc Notes FHLMC Disc Notes FHLMC Disc Notes FHLMC Disc Notes FHLMC Disc Notes FHLMC PURCHASES CP Amer Exp CP Amer Exp 03/30/01 REDEMPTIONS CD World CD World CD World CD Bayer Lnds CD Bayer Lnds CD Bayer Ver CD Bayer Ver CP Amer Exp CP Heller CP Heller FNMA FNMA PURCHASES CP Country CP Country 04/12/01 4.950 50,000 04/12/01 4.950 50,000 04/13/01 4.970 25,000 04/13/01 4.970 50,000 04/13/01 4.970 50,000 05/29/01 4.840 50,000 05/29/01 4.840 50,000 05/29/01 4.840 50,000 05/29/01 4.840 50,000 03/29/01 6.210 49,110 338 2,863,358.55 6.686 03/29/01 6.290 50,000 364 3,179,944.44 6.810 03/29/01 6.290 50,000 364 3,179,944.44 6.810 03/29/01 6.270 25,000 365 1,589,270.83 6.788 03/29/01 6.270 50,000 365 3,178,541.67 6.788 03/29/01 6.270 50,000 365 3,178,541.67 6.788 03/29/01 6.270 50,000 365 3,178,541.67 6.788 03/29/01 6.270 50,000 365 3,178,541.67 6.788 03/29/01 6.270 50,000 365 3,178,541.67 6.788 04/09/01 5.000 50,000 04/12/01 5.000 50,000 5.280% 03/30/01 5.300 10,000 22 32,388.50 5.373 5.280% 03/30/01 5.300 50,000 22 161,942.47 5.373 5.280% 03/30/01 5.300 50,000 22 161,942.47 5.373 5.460% 03/30/01 5.460 50,000 43 326,083.33 5.535 5.460% 03/30/01 5.460 50,000 43 326,083.33 5.535 5.470% 03/30/01 5.460 50,000 43 326,087.21 5.535 5.470% 03/30/01 5.460 50,000 43 326,087.21 5.535 03/30/01 5.240 50,000 24 174,666.67 5.331 03/30/01 5.830 50,000 42 340,083.33 5.951 03/30/01 5.830 50,000 42 340,083.33 5.951 6.650% 03/30/01 6.666 50,000 365 3,332,500.00 6.677 6.650% 03/30/01 6.666 50,000 365 3,332,500.00 6.677 04/03/01 5.550 28,000 04/03/01 5.550 50,000 19 03/30/01 PURCHASES (continued) CP Citicorp 04/09/01 4.900 50,000 CP Amer Exp 04/09/01 5.000 50,000 CP Amer Exp 04/12/01 5.000 50,000 CP Morg Stan 04/12/01 5.100 50,000 MTN GMAC 5.800% 03/12/03 5.700 8,250 MTN GMAC 5.750% 11/10/03 5.720 14,300 03/31/01 REDEMPTIONS Treas Notes 4.875% 03/31/01 4.941 50,000 710 4,797,643.44 5.082 Treas Notes 4.875% 03/31/01 4.941 50,000 710 4,797,643.44 5.082 Treas Notes 4.875% 03/31/01 4.925 50,000 711 4,788,678.28 5.058 Treas Notes 4.875% 03/31/01 4.925 50,000 711 4,788,678.28 5.058 NO PURCHASES il 0 20 O' al 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 GMQ, Federal Farm Credit Bank Bonds (FFCB), Federal Farm Credit Discount Notes (FFC), Corporate Securities (CB), U.S. Ship Financing Bonds (TITLE XI'S), International Bank of Redevelopment (IBRD), Tennessee Valley Authority (TVA) Medium Term Notes (MTN). b/ Purchase or sale yield based on 360 day calculation for discount obligations and Repurchase Agreements. c/ Repurchase Agreement. d/ I Par amount of securites purchased, sold, or redeemed. e/ Securities were purchased and sold as of the same date. f/ Repurchase Agreement against Reverse Repurchase Agreement. g/ Outright purchase against Reverse Repurchase Agreement. h/ Security "SWAP" transactions. Buy back agreement. RRS Reverse Repurchase Agreement. RRP Termination of Reverse Repurchase Agreement. 21 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE AGOURA HILLS Pacific Crest Bank 10/04/00 6.330 8,000,000.00 04/02/01 Pacific Crest Bank ALHAMBRA 12/01 /00 6.240 5,000,000.00 06/01 /01 Grand National Bank 02/16/01 5.110 3,000,000.00 05/17/01 Grand National Bank 09/06/00 6.300 3,000,000.00 05/31 /01 Grand National Bank 06/23/00 6.170 1,000,000.00 06/25/01 Grand National Bank - 07/14/00 6.120 2,000,000.00 07/13/01 Grand National Bank 01 /16/01 5.240 3,095,000.00 07/13/01 Omni Bank 01/29/01 5.150 1,300,000.00 07/27/01 Omni Bank 02/26/01 4.830 2,000,000.00 08/24/01 Omni Bank ARROYO GRANDE 03/05/01 4.710 6,000,000.00 08/31/01 Mid -State Bank 10/16/00 6.220 5,000,000.00 04/16/01 Mid -State Bank 01/10/01 5.210 5,000,000.00 05/24/01 Mid -State Bank 01/10/01 5.150 5,000,000.00 06/21/01 Mid -State Bank 01/12/01 5.110 5,000,000.00 07/13/01 Mid -State Bank BEVERLY HILLS 03/19/01 4.430 5,000,000.00 09/14/01 City National Bank 10/16/00 6.250 25,000,000.00 04/16/01 City National Bank 09/29/00 6.220 50,000,000.00 06/05/01 City National Bank 02/08/01 4.960 25,000,000.00 08/20/01 City National Bank 03/16/01 4.530 20,000,000.00 09/05/01 City National Bank 02/28/01 4.740 20,000,000.00 09/05/01 First Bank of Beverly Hills, FSB CAMARILLO 03/16/01 4.470 10,000,000.00 09/12/01 Camarillo Community Bank 02/21/01 5.040 3,000,000.00 05/22/01 Camarillo Community Bank CHICO 03/30/01 4.220 2,000,000.00 09/26/01 North State National Bank 04/06/00 6.170 1,000,000.00 04/06/01 North State National Bank 04/07/00 6.170 1,000,000.00 04/06/01 22 TIME DEPOSITS DEPOSIT NAME DATE CHICO (continuedl North State National Bank 01 /05/01 North State National Bank 02/23/01 North State National Bank 03/02/01 Tri Counties Bank 01 /08/01 Tri Counties Bank 03/06/01 Tri Counties Bank 03/14/01 Tri Counties Bank 03/21/01 CHULA VISTA North Island Federal Credit Union 02/26/01 North Island Federal Credit Union 03/14/01 North Island Federal Credit Union 12/15/00 CITY OF INDUSTRY EverTrust Bank 10/16/00 EverTrust Bank 12/21 /00 EverTrust Bank 12/11/00 EverTrust Bank 07/18/00 CONCORD CA State 9 Credit Union 02/20/01 DUARTE Western State Bank 02/15/01 Western State Bank 02/22/01 DUBLIN Operating Engineers FCU 01 /19/01 Operating Engineers FCU 02/20/01 Operating Engineers FCU 11 /30/00 Operating Engineers FCU 03/16/01 PAR YIELD AMOUNT ($) 5.390 3,000,000.00 4.890 1,000,000.00 4.600 1,500,000.00 5.180 10,000,000.00 4.900 10,000,000.00 4.680 10,000,000.00 4.550 10,000,000.00 4.970 20,000,000.00 4.690 20,000,000.00 6.030 20,000,000.00 6.210 3,000,000.00 5.930 2,000,000.00 6.040 4,000,000.00 6.110 3,000,000.00 5.090 10,000,000.00 MATURITY DATE 04/06/01 09/07/01 11 /28/01 04/10/01 06/06/01 06/13/01 06/19/01 05/29/01 06/13/01 06/13/01 04/27/01 06/15/01 06/15/01 07/18/01 05/23/01 5.040 1,000,000.00 08/14/01 4.970 2,000,000.00 08/27/01 5.310 5,000,000.00 04/19/01 5.050 5,000,000.00 05/29/01 6.310 5,000,000.00 05/29/01 4.540 10,000,000.00 06/14/01 23 TIME DEPOSITS DEPOSIT PAR NAME. DATE YIELD AMOUNT ($) EL CENTRO Valley Independent Bank 01/29/01 Valley Independent Bank 10/31/00 Valley Independent Bank 05/15/00 Valley Independent Bank EL SEGUNDO 02/15/01 Xerox Federal Credit Union 11/14/00 Xerox Federal Credit Union % 02/13/01 Xerox Federal Credit Union FRESNO 12/05/00 United Security Bank 11/15/00 United Security Bank FULLERTON 01/30/01 Fullerton Community Bank 11/21/00 Fullerton Community Bank G ENDAi E 01/19/01 California Credit Union 02/27/01 Verdugo Banking Company GRANADA HILLS 01/05/01 Bank of Granada Hills HUNTINGTON BEACH 03/22/01 First Bank and Trust 02/26/01 First Bank and Trust INGLEWOOD 03/15/01 Imperial Bank 11/16/00 Imperial Bank 12/07/00 Imperial Bank 01/18/01 5.200 5,000,000.00 6.410 15,000,000.00 6.410 3,750,000.00 5.080 3,750,000.00 6.390 5,000,000.00 5.090 15,000,000.00 6.180 7,000,000.00 6.390 10,000,000.00 5.050 15,000,000.00 6.390 9,000,000.00 5.160 8,000,000.00 4.930 20,000,000.00 5.240 5,000,000.00 4.340 2,000,000.00 4.830 1,000,000.00 4.600 12,000,000.00 6.360 25,000,000.00 6.130 26,000,000.00 5.380 20,000,000.00 MATURITY DATE 04/30/01 05/01 /01 05/15/01 05/16/01 05/14/01 05/14/01 06/04/01 05/14/01 07/31 /01 05/21 /01 07/18/01 05/31 /01 07/05/01 09/18/01 08/27/01 09/11 /01 04/05/01 04/05/01 04/19/01 24 NG L MOOD Imperial Bank Imperial Bank Imperial Bank Imperial Bank South Western FCU LA MESA Borrego Springs Bank Borrego Springs Bank Silvergate Bank LAGUNA HILLS Antelope Valley Bank Antelope Valley Bank Eldorado Bank Eldorado Bank Eldorado Bank LODI Farmers & Merchant Bk Cen CA LOS ANGELES Broadway Federal Bank Broadway Federal Bank California Center Bank California Chohung Bank California Chohung Bank Cathay Bank Cathay Bank Cathay Bank Cathay Bank Eastern International Bank Eastern International Bank TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AM DATE 02/01 /01 5.010 58,000,000.00 05/02/01 02/22/01 5.050 125,000,000.00 05/02/01 03/01 /01 4.860 20,000,000.00 06/05/01 03/08/01 4.790 43,000,000.00 06/05/01 10/10/00 6.370 3,000,000.00 04/10/01 01 /29/01 5.330 1,000,000.00 04/30/01 03/14/01 4.710 1,000,000.00 06/13/01 02/09/01 5.130 5,000,000.00 05/10/01 02/22/01 5.040 2,000,000.00 05/23/01 03/08/01 4.780 3,000,000.00 06/07/01 01 /22/01 5.280 20,000,000.00 04/25/01 02/20/01 5.080 20,000,000.00 05/23/01 03/14/01 4.720 25,000,000.00 06/13/01 01 /04/01 5.960 10,000,000.00 04/06/01 10/02/00 6.310 2,500,000.00 04/09/01 01 /08/01 5.060 2,500,000.00 07/09/01 01 /04/01 5.660 10,000,000.00 07/03/01 01 /05101 5.210 1,500,000.00 07/03/01 01 /17/01 5.240 1,000,000.00 07/18/01 10/13/00 6.280 19,000,000.00 04/13/01 03/05/01 4.860 30,000,000.00 06/04/01 03/21 /01 4.550 9,000,000.00 06/19/01 03/30/01 4.210 10,000,000.00 09/26/01 11 /06/00 6.420 900,000.00 05/07/01 12/14/00 6.080 1,000,000.00 06/12/01 25 TIME DEPOSITS DEPOSIT PAR MATURITY DAME. DATE YIELD AMOUNT, ($) DATE General Bank 02/06/01 5.100 15,000,000.00 05/09/01 General Bank 02/27/01 4.890 10,000,000.00 05/30/01 General Bank 03/08/01 4.730 25,000,000.00 06/08/01 General Bank 01/19/01 5.140 7,000,000.00 07/20/01 General Bank 01/25/01 5.170 8,000,000.00 07/20/01 General Bank 01/25/01 5.170 20,000,000.00 07/30/01 General Bank 02/06/01 4.940 15,000,000.00 08/07/01 Hanmi Bank 01/02/01 5.790 25,000,000.00 04/02/01 Hanmi Bank 10/13/00 6.260 25,000,000.00 04/16/01 Hanmi Bank 02/27/01 4.880 25,000,000.00 05/31/01 Manufacturers Bank 02/05/01 5.070 10,000,000.00 05/07/01 Manufacturers Bank 03/12/01 4.710 10,000,000.00 06/07/01 Manufacturers Bank 03/12/01 4.710 10,000,000.00 06/07/01 Manufacturers Bank 03/05/01 4.860 10,000,000.00 06/08/01 Manufacturers Bank 03/21/01 4.600 20,000,000.00 06/19/01 Marathon National Bank 02/05/01 4.930 2,000,000.00 08/06/01 Mellon First Business Bank 03/20/01 4.570 25,000,000.00 06/18/01 Mellon First Business Bank 01/19/01 5.130 25,000,000.00 07/18/01 Mellon First Business Bank 03/27/01 4.330 25,000,000.00 09/24/01 Mercantile National Bank 02/13/01 5.080 2,000,000.00 05/14/01 Pacific Union Bank 03/05/01 4.840 20,000,000.00 06/06/01 Preferred Bank 12/11/00 6.050 9,000,000.00 06/11/01 Preferred Bank 01/16/01 5.250 6,000,000.00 07/16/01 Preferred Bank 02/13/01 4.950 4,000,000.00 08/13/01 Preferred Bank 02/26/01 4.810 7,000,000.00 08/27/01 Preferred Bank 03/19/01 4.390 9,000,000.00 09/17/01 Sae Han Bank 10/17/00 6.260 3,000,000.00 04/16/01 State Bank of India (Calif) 12/14/00 6.060 1,500,000.00 06/12/01 State Bank of India (Calif) 11/07/00 6.330 2,000,000.00 06/12/01 State Bank of India (Calif) 06/12/00 6.230 2,000,000.00 06/12/01 State Bank of India (Calif) 01/19/01 5.130 2,000,000.00 07/18/01 State Bank of India (Calif) 11/30/00 6.150 2,000;000.00 08/27/01 Western Federal Credit Union 10/24/00 6.340 25,000,000.00 04/24/01 Wilshire State Bank 04/18/00 6.090 5,000,000.00 04/18/01 Wilshire State Bank 05/17/00 6.370 2,000,000.00 05/17/01 Wilshire State Bank 06/07/00 6.290 2,000,000.00 06/07/01 Wilshire State Bank 01/12/01 5.130 4,000,000.00 07/13/01 Wilshire State Bank 08/31/00 6.290 4,000,000.00 08/31/01 26 MANTECA Delta National Bank Delta National Bank MERQEQ County Bank County Bank County Bank MONTEREY PARK Trust Bank FSB Trust Bank FSB Safe Credit Union Safe Credit Union NORWALK Cerritos Valley Bank OAKDALE Oak Valley Community Bank Oak Valley Community Bank Oak Valley Community Bank Oak Valley Community Bank QNTARIQ Citizens Business Bank Citizens Business Bank Citizens Business Bank Citizens Business Bank Citizens Business Bank Citizens Business Bank Citizens Business Bank TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AM ($) DATE 03/02/01 4.890 1,000,000.00 05/23/01 02/22/01 5.080 2,000,000.00 05/23/01 10/17/00 6.280 5,000,000.00 04/20/01 01 /18/01 5.280 5,000,000.00 07/20/01 03/09/01 4.500 10,000,000.00 12/07/01 10/02/00 6.330 4,000,000.00 04/02/01 01 /02/01 5.770 2,000,000.00 07/02/01 01 /17/01 5.250 5,000,000.00 07/15/01 02/02/01 4.810 20,000,000.00 08/01 /01 10/05/00 6.340 1,000,000.00 04/03/01 09/29/00 6.240 1,500,000.00 06/05/01 10/31 /00 6.390 2,500,000.00 07/09/01 02/05/01 4.930 500,000.00 09/05/01 03/23/01 4.140 1,500,000.00 03/22/02 01 /12/01 5.340 5,000,000.00 04/05/01 10/05/00 6.330 20,000,000.00 04/05/01 11 /06/00 6.410 10,000,000.00 05/07/01 02/09/01 5.020 10,000,000.00 08/22/01 02/15/01 5.000 20,000,000.00 08/22/01 03/08/01 4.630 25,000,000.00 12/03/01 03/26/01 4.150 30,000,000.00 03/26/02 27 TIME DEPOSITS DEPOSIT PAR NAME DATE YIELD PLACERVILLE El Dorado Savings Bank 04/13/00 El Dorado Savings Bank 05/02/00 El Dorado Savings Bank 06/16/00 El Dorado Savings Bank 02/08/01 El Dorado Savings Bank 03/07/01 El Dorado Savings Bank 03/22/01 POMONA PFF Bank and Trust 112/01/00 PFF Bank and Trust 03/09/01 PORTERVILLE Bank of the Sierra 01/24/01 QUINCY Plumas Bank 12/12/00 RANCHO SANTA_FE La Jolla Bank, FSB 11/28/00 La Jolla Bank, FSB 02/07/01 La Jolla Bank, FSB 03/26/01 RED BLUFF Tehama Bank 09/08/00 Tehama Bank 01/05/01 North Valley Bank 03/19/01 REDWOOD CITY_ Provident Central Credit Union 11/03/00 6.150 5,000,000.00 6.180 5,000,000.00 6.150 5,000,000.00 4.770 5,000,000.00 4.520 5,000,000.00 4.210 5,000,000.00 6.350 8,000,000.00 4.700 10,000,000.00 5.100 10,000,000.00 6.060 2,000,000.00 6.380 15,000,000.00 4.990 15,000,000.00 4.350 10,000,000.00 MATURITY DATE 04/13/01 05/02/01 06/18/01 02/08/02 03/07/02 03/22/02 08/28/01 12/04/01 07/25/01 06/12/01 05/25/01 08/06/01 09/24/01 6.300 4,000,000.00 06/01 /01 5.210 5,000,000.00 07/03/01 4.310 3,000,000.00 12/14/01 6.390 20,000,000.00 05/04/01 29 TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE Mechanics Bank 04/04/00 6.260 10,000,000.00 04/06/01 Mechanics Bank 04/25/00 6.080 10,000,000.00 04/25/01 Mechanics Bank 05/05/00 6.190 10,000,000.00 05/07/01 Mechanics Bank 06/12/00 6.230 10,000,000.00 06/12/01 Mechanics Bank 08/11/00 6.190 10,000,000.00 08/13/01 Mechanics Bank 10/13/00 5.980 10,000,000.00 10/12/01 Mechanics Bank 03/07/01 4.520 10,000,000.00 03/07/02 American River Bank 12/27/00 5.680 1,000,000.00 04/06/01 American River Bank 10/02/00 6.310 1,000,000.00 04/17/01 American River Bank 06/26/00 6.180 1,000,000.00 06/26/01 American River Bank 01/11/01 5.190 1,500,000.00 07/10/01 American River Bank 03/26/01 4.340 3,000,000.00 09/24/01 American River Bank 01/11/01 5.100 1,500,000.00 10/12/01 Bank of Sacramento 02/16/01 5.140 1,000,000.00 05/17/01 Bank of Sacramento 03/05/01 4.880 500,000.00 06/04/01 Bank of Sacramento 12/28/00 5.770 1,000,000.00 06/26/01 Golden One Credit Union 10/27/00 6.360 10,000,000.00 04/25/01 Golden One Credit Union 06/08/00 6.230 20,000,000.00 06/08/01 Golden One Credit Union 03/23/01 4.120 20,000,000.00 03/22/02 Merchants National Bank 10/24/00 6.330 2,000,000.00 04/23/01 Merchants National Bank 01/22/01 5.100 2,000,000.00 07/23/01 River City Bank 10/27/00 6.380 3,000,000.00 04/25/01 River City Bank 02/26/01 4.960 2,000,000.00 05/29/01 River City Bank 01 /04/01 5.510 2,000,000.00 07/03/01 Sanwa Bank of California 07/26/00 6.290 5,000,000.00 07/26/01 Sanwa Bank of California 02/09/01 5.010 7,000,000.00 07/26/01 Sanwa Bank of California 01 /10/01 5.120 10,000,000.00 07/26/01 Sanwa Bank of California 02/23/01 4.890 60,000,000.00 09/07/01 U.S. Bank 02/07/01 4.990 25,000,000.00 08/07/01 Union Bank of California 10/24/00 6.330 50,000,000.00 04/23/01 Union Bank of California 10/31/00 6.390 100,000,000.00 04/30/01 Union Bank of California 11/14/00 6.360 50,000,000.00 05/15/01 Union Bank of California 11 /21 /00 6.360 100,000,000.00 05/21 /01 Union Bank of California 03/26/01 4.330 100,000,000.00 09/21 /01 30 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE SAN BERNARDINO Business Bank of California 01 /11 /01 5.180 8,000,000.00 07/10/01 Business Bank of California 02/05/01 4.940 12,000,000.00 08/06/01 SAN DIEGO First United Bank 12/01 /00 6.200 1,500,000.00 06/01 /01 First United Bank 06/21 /00 6.110 1,500,000.00 06/21 /01 First United Bank 02/16/01 4.950 1,000,000.00 02/15/02 Mission Federal Credit Union 01111 /01 5.330 10,000,000.00 04/30/01 Mission Federal Credit Union 11 /30/33 6.330 10,000,000.00 05/25/01 Neighborhood National Bank 11 /21 /00 6.380 1,000,000.00 05/22/01 Neighborhood National Bank 02/09/01 5.020 1,000,000.00 08/24/01 Santel Federal Credit Union 12/05/00 6.150 5,000,000.00 06/04/01 Santel Federal Credit Union 12/21 /00 5.860 3,000,000.00 06/22/01 Santel Federal Credit Union 03/05/01 4.710 5,000,000.00 09/04/01 SAN F ANCISCO Bank of Canton California 09/13/00 6.220 5,000,000.00 05/22/01 Bank of Canton California 05/22/00 6.230 10,000,000.00 05/22/01 Bank of Canton California 11 /03/00 6.360 5,000,000.00 06/15/01 Bank of Canton California 11 /02/00 6.360 5,000,000.00 06/15/01 Bank of Canton California 11 /09/00 6.380 10,000,000.00 06/15/01 Bank of Canton California 01 /12/01 5.190 10,000,000.00 07/16/01 Bank of Canton California 01 /12/01 5.190 15,000,000.00 07/16/01 Bank of Canton California 09/01 /00 6.260 20,000,000.00 08/31 /01 Bank of Canton California 02/09/01 4.960 10,000,000.00 09/10/01 Bank of Canton California 02/05/01 4.910 10,000,000.00 09/10/01 Bank of the West 04/14/00 6.170 50,000,000.00 04/16/01 Bank of the West 05/01 /00 6.140 25,000,000.00 04/27/01 Bank of the West 04/28/00 6.140 51,500,000.00 04/27/01 Bank of the West 05/05/00 6.190 25,000,000.00 05/04/01 Bank of the West 05/16/00 6.400 25,000,000.00 05/18/01 Bank of the West 05/25/00 6.230 142,000,000.00 05/25/01 Bank of the West 07/03/00 6.080 34,000,000.00 07/06/01 Bank of the West 01 /08/01 5.040 50,000,000.00 07/09/01 Bank of the West 02/23/01 4.890 50,000,000.00 08/24/01 California Federal Bank 01 /17/01 5.360 100,000,000.00 04/19/01 California Federal Bank 02/21 /01 5.080 50,000,000.00 05/24/01 California Federal Bank 01 /05/01 5.210 8,000,000.00 07/06/01 31 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE California Pacific Bank 12/19/00 5.920 1,000,000.00 06/18/01 California Pacific Bank 02/20/01 4.980 2,000,000.00 08/20/01 California Pacific Bank 03/19/01 4.300 1,000,000.00 12/14/01 Millennium Bank 01 /29/01 5.230 1,000,000.00 04/30/01 Millennium Bank 11 /28/00 6.400 1,000,000.00 05/30/01 Millennium Bank 10/31 /00 6.410 2,000,000.00 07/02/01 Oceanic Bank 03/15/01 4.430 4,000,000.00 03/15/02 Trans Pacific National Bank 03/19/01 4.250 800,000.00 03/19/02 United Commercial Bank - 10/06/00 6.320 30,000,000.00 04/04/01 United Commercial Bank 12/07/00 6.050 10,000,000.00 06/05/01 United Commercial Bank 02/06/01 4.940 20,000,000.00 07/31/01 United Commercial Bank 01/22/01 5.140 20,000,000.00 07/31/01 United Commercial Bank 01 /12/01 5.090 10,000,000.00 08/31 /01 United Commercial Bank 09/01/00 6.320 20,000,000.00 08/31/01 United Commercial Bank 03/20/01 4.320 25,000,000.00 12/14/01 Heritage Bank of Commerce 02/16/01 5.060 2,000,000.00 08/17/01 Meriwest Credit Union 10/10/00 6.380 8,000,000.00 04/09/01 Meriwest Credit Union 01/22/01 5.270 14,000,000.00 04/23/01 Meriwest Credit Union 02/07/01 4.980 8,000,000.00 08/10/01 Santa Clara Co. Fed. C.U. 02/06/01 4.950 15,000,000.00 08/07/01 First Bank of San Luis Obispo 10/23/00 6.330 1,000,000.00 04/20/01 First Bank of San Luis Obispo 02/09/01 5.120 2,000,000.00 05/10/01 First Bank of San Luis Obispo 01 /08/01 5.050 1,000,000.00 07/09/01 First Bank of San Luis Obispo 01/30/01 5.050 3,600,000.00 07/30/01 First Bank of San Luis Obispo 02/20/01 5.000 2,500,000.00 08/24/01 First Bank of San Luis Obispo 03/19/01 4.310 5,000,000.00 12/14/01 Mission Community Bank 01/12/01 5.280 500,000.00 04/12/01 Mission Community Bank 01/10/01 5.280 1,000,000.00 04/12/01 Mission Community Bank 12/11/00 6.070 1,000,000.00 06/12/01 Mission Community Bank 03/12/01 4.640 1,000,000.00 09/10/01 San Luis Trust Bank 01 /08/01 5.180 350,000.00 04/09/01 San Luis Trust Bank 02/15/01 5.070 1,000,000.00 04/09/01 San Luis Trust Bank 01 /31 /01 5.060 1,000,000.00 05/01 /01 9P KY� East West Federal Bank East West Federal Bank East West Federal Bank East West Federal Bank East West Federal Bank Westamerica Bank Westamerica Bank Westamerica Bank Westamerica Bank Westamerica Bank Westamerica Bank EBTEL Federal Credit Union EBTEL Federal Credit Union EBTEL Federal Credit Union FNB of Central California FNB of Central California FNB of Central California FNB of Central California FNB of Central California Los Robles Bank 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 TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AM_ ($) PA_U 01 /05/01 5.390 12,000,000.00 04/05/01 05/04101 05/04/00 6.200 35,000,000.00 38,000,000.00 05/ 11 /13/00 6.390 4.960 35,000,000.00 05/1818/01 02/01/01 4.810 30,000,000.00 0/30/01 101 02/28/01 04/18/00 6.080 25,000,000.00 01/30/01 5.160 50,000,000.00 04/18101 /01 05/15101 05/15/00 6.400 50,000,000.00 25,000,000.00 06/20101 03/22/01 4.380 6.330 25,000,000.00 07 13 01 10/25/00 6.080 25,000,000.00 07/13/01 07/14/00 10/06/00 6.340 1,750,000.00 04/04/01 05/18/01 01 /05101 5.280 1,000,000.00 750,000.00 06/22/01 01 /05/01 5.230 10/18/00 6.270 10,000,000.00 /01 08/07/00 6.350 10,000,000.00 05/17/01 07/09/01 01 /08/01 5.040 10,000,000.00 5,000,000.00 07/23/01 01 /18/01 5.270 4.650 10,000,000.00 1 30 01 03/06/01 01 /31 /01 4.990 6,000,000.00 01 /30/01 09/08/00 6.330 10,000,000.00 04/06/01 10/10/00 6.340 10,000,000.00 06/09/00 6.260 10,000,000.00 05103/01 /01 01/10/01 5.110 10,000,000.00 07/06/01 01/10/01 5.110 10,000,000.00 07/06/01 07/07/00 6.080 10,000,000.00 07/06/0107/27/01 01 /22/01 5.120 10,000,000.00 03/09/01 4.490 10,000,000.00 11 /30/01 33 fo TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE SANTA CLARITA Valencia Bank & Trust 03/21/01 4.430 4,000,000.00 09/17/01 SANTA MARIA Hacienda Bank 03/14/01 4.620 1,000,000.00 09/11 /01 Community First Credit Union 01/04/01 5.990 2,000,000.00 04/04/01 National Bank of the Redwoods 10/30/00 6.390 10,000,000.00 04/30/01 National Bank,of the Redwoods 02/01/01 4.900 5,000,000.00 07/31/01 Redwood Credit Union SONORA 03/05/01 4.880 17,000,000.00 06/04/01 Central California Bank STOCKTON 03/08/01 4.690 1,000,000.00 09/04/01 Pacific State Bank 10/16/00 6.270 1,000,000.00 04/16/01 Pacific State Bank 01 /12/01 5.190 1,000,000.00 07/11 /01 Union Safe Deposit Bank 04/13/00 6.200 10,000,000.00 04/13/01 Union Safe Deposit Bank 11/09/00 6.430 10,000,000.00 05/08/01 Union Safe Deposit Bank 03/15/01 4.720 10,000,000.00 06/14/01 Union Safe Deposit Bank 01/16/01 5.290 5,000,000.00 07/16/01 Union Safe Deposit Bank 01/19/01 5.180 10,000,000.00 07/26/01 Union Safe Deposit Bank 02/05/01 4.850 10,000,000.00 08/07/01 Union Safe Deposit Bank 02/21/01 5.010 10,000,000.00 08/22/01 Washington Mutual Bank 10/27/00 6.360 30,000,000.00 05/01/01 Washington Mutual Bank 11/13/00 6.380 30,000,000.00 06/01/01 Washington Mutual Bank 12/28/00 5.690 15,000,000.00 06/26/01 Washington Mutual Bank 01/23/01 5.200 30,000,000.00 07/24/01 Washington Mutual Bank 02/22/01 4.940 30,000,000.00 08/23/01 Washington Mutual Bank 03/14/01 4.500 30,000,000.00 12/10/01 Asiana Bank 01 /04/01 5.890 1,500,000.00 04/06/01 ri 34 TORRANCE China Trust Bank (USA) China Trust Bank (USA) China Trust Bank (USA) China Trust Bank (USA) China Trust Bank (USA) China Trust Bank (USA) South Bay Bank South Bay Bank South Bay Bank South Bay Bank South Bay Bank South Bay Bank ` TU_ First Fidelity Investment & Loan First Fidelity Investment & Loan First Fidelity Investment & Loan First Fidelity Investment & Loan First Fidelity Investment & Loan Sunwest Bank Sunwest Bank Sunwest Bank Sunwest Bank Sunwest Bank Travis Credit Union VISALIA Bank of Visalia WATSONVILLE Monterey Bay Bank Monterey Bay Bank TIME DEPOSITS DEPOSIT PAR MATURITY DATE. YIELD AMOUNT DATE 01 /04/01 5.950 10,000,000.00 04/23/01 10/23/00 6.330 15,000,000.00 04/23/01 02/16/01 5.090 10,000,000.00 05/18/01 02/13/01 5.080 10,000,000.00 05/18/01 03/05/01 4.860 20,000,000.00 06/04/01 03/13/01 4.730 5,000,000.00 06/11 /01 10/31 /00 6.410 2,000,000.00 05/04/01 12/21 /00 5.890 2,000,000.00 05/04/01 01 /16/01 5.260 2,000,000.00 05/25/01 01 /29/01 5.150 1,000,000.00 07/27/01 03/12/01 4.640 2,000,000.00 09/06/01 03/02/01 4.730 3,000,000.00 09/06/01 10/17/00 6.270 10,000,000.00 04/20/01 01 /25/01 5.300 4,000,000.00 04/30/01 02/02/01 5.040 5,000,000.00 04/30/01 02/06/01 5.100 6,000,000.00 05/07/01 03/01 /01 4.860 15,000,000.00 05/31 /01 10/12/00 6.320 3,500,000.00 04/10/01 10/20/00 6.310 2,500,000.00 04/20/01 02/07/01 5.110 2,000,000.00 05/09/01 03/09/01 4.680 1,000,000.00 06/07/01 01 /25/01 5.090 5,800,000.00 07/26/01 03/05/01 4.720 40,000,000.00 08/31 /01 01 /30/01 5.160 3,000,000.00 04/30/01 03/22/01 4.390 6,000,000.00 06/20/01 01 /05101 5.210 8,000,000.00 07/02/01 35 f" - '• DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE Quaker City Bank 10/02/00 6.300 8,000,000.00 04/06/01 Quaker City Bank 04/18/00 6.090 8,000,000.00 04/18/01 Quaker City Bank 09/08/00 6.300 25,000,000.00 05/31 /01 Quaker City Bank 12/27/00 5.670 10,000,000.00 06/27/01 Quaker City Bank 01/08/01 5.050 14,000,000.00 07/12/01 TOTAL TIME DEPOSITS MARCH 2O01 4,693,3459000.00 36 BANK DEMAND DEPOSITS MARCH 2001 ($ in thousands) DAILY BALANCES DAY OF BALANCES WARRANTS MONTH PER BANKS OUTSTANDING 1 $ 3219605 $ 215319815 2 439,312 2,339,999 3 439,312 2,339,999 4 439,312 2,339,999 5 184,178 2,0339408 6 509,370 1,970,043 7 434,379 1,928,747 8 355,309 29047,503 9 258,339 2,1199104 10 2589339 2,119,104 11 258,339 2,119,104 12 299,507 19896,077 13 78,704 2,066,460 14 148,373 1,833,114 15 378,381 3,133,406 16 387,654 391719656 17 3879654 311719656 18 387,654 39171,656 19 2269973 2,243,180 20 418,206 1,975,217 21 378,055 199229778 22 61,452 1,968,762 23 401,627 1,9739914 24 401,627 1,9739914 25 401,627 199739914 26 3729655 198559444 27 330,038 2,069,793 28 374,703 294909822 29 692,245 2,955,304 30 3549116 3,570,753 31 354,116 3,672,615 AVERAGE DOLLAR DAYS $ 346,231 sit BL The prescribed bank balance for March was $357,528. This consisted of $197,057 in compensating balances for services, balances for uncollected funds of $167,809 and a deduction of $7,338 for February delayed deposit credit. 37 DESIGNATION BY POOLED MONEY INVESTMENT BOARD OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS No. 1621 In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its meeting on March 21, 2001, 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 $ 208,955,000 The active noninterest-bearing bank accounts designation constitutes a calendar month average balance. For purposes of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above amount provided that the balances computed by dividing the sum of daily balances of that calendar month by the number of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management. 2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest - bearing deposits in banks and savings and loan associations as follows: Time Deposits in Various Financial Institutions In In Securities (sections 16503a Estimated From To Transactions 16430)* and 16602)* Total (1) 03/19/2001 03/23/2001 $ 97,700,000 $ 40,691,155,000 $ 4,691,345,000 $ 45,382,500,000 (2) 03/26/2001 03/30/2001 $ (1,593,000,000) $ 39,098,155,000 $ 4,691,345,000 $ 43,789,500,000 (3) 04/02/2001 04/06/2001 $ (470,900,000) $ 38,627,255,000 $ 4,691,345,000 $ 43,318,600,000 (4) 04/09/2001 04/13/2001 $ 796,800,000 $ 39,424,055,000 $ 4,691,345,000 $ 44,115,400,000 (5) 04/16/2001 04/20/2001 $ 3,557,100,000 $ 42,981,155,000 $ 4,691,345,000 $ 47,672,500,000 From any of the amounts specifically designated above, not more than 30 percent in the aggregate may be invested in prime commercial paper under section 16430(e), Government Code. Additional amounts available in treasury trust account and in the Treasury from time to time, in excess of the amounts and for the same types of investments as specifically designated above. Provided, that the availability of the amounts shown under paragraph 2 is subject to reduction in the amount by which the bank accounts under paragraph 1 would otherwise be reduced below the calendar month average balance of $ 208,955,000. POOLED MONEY INVEST NT BOARD: i Chairperson Member Dated: March 21, 2001� * Government Code 38 Member ,.,� CITY OF LA QUINTA DRAFT C Investment Policy Table of Contents Section Topic Page Executive Summary 2 I General Purpose 4 II Investment Policy 4 III Scope 4 IV Objectives 5 ► Safety ► Liquidity ► Yield ► Diversified Portfolio V Prudence 6 VI Delegation of Authority 6 VII Conflict of Interest 7 Vill Authorized Financial Dealers and Institutions 7 ► Broker/Dealers ► Financial Institutions IX Authorized Investments and Limitations 8 Investment Pools 12 XI Safekeeping and Custody 13 XII Interest Earning Distribution Policy 13 XIII Internal Controls and Independent Auditors 14 XIV Benchmark 15 XV Reporting Standards 15 XVI Investment of Bond Proceeds 16 XVII Investment Advisory Board - City of La Quinta 17 XVIII Investment Policy Adoption 17 Appendices: A. Summary of Authorized Investments and Limitations 18 B. Municipal Code Ordinance 2.70 - Investment Advisory Board 19 C. Municipal Code Ordinance 3.08 - Investment of Moneys and Funds 20 D. Segregation of Major Investment Responsibilities 22 E. Listing of Approved Financial Institutions 23 F. Broker/Dealer Questionnaire and Certification 24 G. Investment Pool Questionnaire 29 H. Glossary 33 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 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 2 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 or dollar limitations and, where applicable, through the bid process requirements. Authorized investment vehicles and related maximum portfolio positions are listed in Appendix A - Summary of Authorized Investments and Limitations At least two bids will be required of investments in the authorized investment vehicles. Collateral ization will be required for Certificates of Deposits in excess of $100,000. Collateral will always be held by an independent third party from the institution that sells the Certificates of Deposit to the City. Evidence of compliance with State Collateral ization policies must be supplied to the City and retained by the City Treasurer. The City of La Quinta Investment Policy shall require that each individual investment have a maximum maturity of two years unless specific approval is authorized by the City Council. In addition, the City's investment in the State Local Agency Investment Fund (LAIF) is allowable as long as the average maturity does not exceed two years, unless specific approval is authorized by the City Council. The City's investment in Money Market Mutual funds is allowable as long as the average maturity does not exceed 60 days. The City of La Quinta Investment Policy will use the six month U.S. Treasury Bill as a benchmark when measuring the performance of the investment portfolio. The Investment Policies shall be adopted by resolution of the La Quinta City Council on an annual basis, The Investment Policies will be adopted before the end of June of each year. This Executive Summary is an overall review of the City of La Quinta Investment Policies. Reading this summary does not constitute a complete review which can only be accomplished by reviewing all the pages. 3 P.O. Box 1504 78-495 CALLE TAMPICO LA QUINTA, CALIFORNIA 92253 City of La Quinta Statement of Investment Policy July 1, 2001 through June 30, 2002 Scheduled for Adoption by the City Council on June 19, 2001 GENERAL PURPOSE (760) 7 7 7 - 7 0 0 0 FAX (760) 777-7101 The general purpose of this document is to provide the rules and standards users must follow in administering the City of La Quinta cash investments. II INVESTMENT POLICY It is the policy of the City of La Quinta to invest public funds in a manner which will provide a diversified portfolio with safety of principal as the primary objective while meeting daily cash flow demands with the highest investment return. In addition, the Investment Policy will conform to all State and local statutes governing the investment of public funds. III SCOPE This Investment Policy applies to all cash and investments of the City of La Quinta, City of La Quinta Redevelopment Agency and the City of La Quinta Financing Authority, hereafter referred in this document as the "City". These funds are reported in the City of La Quinta Comprehensive Annual financial Report (CAFR) and include: All funds within the following fund types: ► General ► Special Revenue ► Capital Projects 10. Debt Service ► Internal Service ► Trust and Agency ► Any new fund types and fund(s) that may be created. M IV OBJECTIVES The primary objective, in order of priority, of the City of La Quinta's investment activity shall be: 1. Safety Safety of principal is the foremost objective of the investment program. Investments of the City of La Quinta shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio in accordance with the permitted investments. The objective will be to mitigate credit risk and interest rate risk. A. Credit Risk Credit Risk - is the risk of loss due to the failure of the security issuer or backer. Credit risk may be mitigated by: Limiting investments to the safest types of securities; 10. Pre -qualifying the financial institutions, and broker/dealers, which the City of La Quinta will do business; and ► Diversifying the investment portfolio so that potential losses on individual securities will be minimized. B. Interest Rate Risk Interest Rate risk is the risk that the market value of securities in the portfolio will fall due to changes in general interest rates. Interest rate risk may be mitigated by: ► Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity; and No. 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. 5 3. Yield The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of least importance compared to the safety and liquidity objectives described above. The core of investments are limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed. Securities shall not be sold prior to maturity with the following exceptions: ► A declining credit security could be sold early to minimize loss of principal; ► Liquidity needs of the portfolio require that the security be sold. 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. VI DELEGATION OF AUTHORITY Authority to manage the City of La auinta's investment portfolio is derived from the City Ordinance. Management responsibility for the investment program is delegated to the City Treasurer, who shall establish written procedures for the operation of the investment program consistent with the Investment Policy. Procedures should include reference to safekeeping, wire transfer agreements, banking service contracts, and collateral/depository agreements. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this Investment Policy and the procedures established by the City Treasurer. The City Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The City Manager or Assistant City Manager shall approve in writing all purchases and sales of investments prior to their execution by the City Treasurer. VII CONFLICT OF INTEREST Investment responsibilities carry added duties of insuring that investments are made without improper influence or the appearance of improper influence. Therefore, the City Manager, Assistant City Manager, and the City Treasurer shall adhere to the State of California Code of Economic Interest and to the following: 10, The City Manager, Assistant City Manager, and the City Treasurer shall not personally or through a close relative maintain any accounts, interest, or private dealings with any firm with which the City places investments, with the exception of regular savings, checking and money market accounts, or other similar transactions that are offered on a non-negotiable basis to the general public. Such accounts shall be disclosed annually to the City Clerk in conjunction with annual disclosure statements of economic interest. ► All persons authorized to place or approve investments shall report to the City Clerk kinship relations with principal employees of firms with which the City places investments. VIII AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS The City of La Quinta Investment Policy maintains a listing of financial institutions which are approved for investment purposes. In addition a list will also be maintained of approved broker/dealers selected by credit worthiness, who maintain an office in the State of California. 1. Broker/Dealers who desire to become bidders for investment transactions must supply the City of La Quinta with the following: ► Current audited financial statements ► Proof of National Association of Security Dealers Certification ► Trading resolution ► Proof of California registration ► Resume of Financial broker ► Completion of the City of La Quinta Broker/Dealer questionnaire which 7 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 110% 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 collateral ization in public monies. IX AUTHORIZED INVESTMENTS AND LIMITATIONS The City Treasurer will be permitted to invest in the investments summarized in the Appendix A. I. STATE OF CALIFORNIA AND CITY OF LA QUINTA LIMITATIONS 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 1% 20% 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 and Government National Mortgage Association (GNMA) securities 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 and GNMA to 100% :75 % of the portfolio. . + • U.S. Government instrumentalities and agencies issuing securities not 9 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 $3 million per issuer. ° Of the PeWOW With a SiRgle i-s6UeF limit of 0 • 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 (FHLMC) and Student Loan Marketing Association (SLMA) which are publicly owned. The City of La Quinta Investment Policy has a limitation of $5 million for FNMA, $5 million for FHLMC , and $3 million for SLMA. 765% of the PW#Olie 0 of thePOW01" 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 2-7-8 180 days; howeveF, Bankeffi,' sess of 1130 days-. The City of La Quinta Investment Policy does not allow investment in Bankers' Acceptances. Commercial Paper - As authorized in Government Code Section 53601(g), 15 % of the portfolio may be invested in commercial paper of the highest rating (A-1 or P-1) as rated by Moody's or Standard and Poor's, with maturities not to exceed a-W 270 days. This percentage may be increased to 30% if the dollar weighted average maturity does not exceed 31 days. 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's Investment Policy follows The Government Code with the following additional limitations: (1) maximum maturity per issue of 90 days and a (2) maximum of $2 million per issuer. Negotiable Certificates of Deposit - As authorized in Government Code Section 53601(h), 30% of the portfolio may be invested in negotiable certificates of deposit issued by commercial banks and savings and loan associations. The City of La Quinta Investment Policy does not allow investment in Negotiable Certificates of Deposit. Repurchase and Reverse Repurchase Agreements - As authorized in Government Code Section 53601(i), these investment vehicles are agreements between the local agency and seller for the purchase of government securities to be resold 10 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 be 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 Companies - 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 and/or US Agency Securities with an average maturity of their portfolio not exceeding 90 days and the City limits such investments to 20% of the portfolio. Mortgage -Backed Securities - As authorized in Government code Section 53601(n), local agencies may invest in mortgage -backed securities such as 11 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 110% 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. Collateral ization 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 Coll ateralization 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 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 and/or U.S. Agency Securities Money Market Sweep Account with a $50,000 target balance may be maintained in conjunction with the checking account. Derivatives - The City of La Quinta Investment Policy does not allow investment in derivatives. 12 X INVESTMENT POOLS There are three (3) types of investment pools: 1) state -run pools, 2) pools that are operated by a political subdivision where allowed by law and the political subdivision is the trustee i.e. County Pool; and 3) pools that are operated for profit by third parties. The City of La Quinta 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. XI SAFEKEEPING AND CUSTODY 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. XII INTEREST EARNING DISTRIBUTION POLICY Interest earnings is generated from pooled investments and specific investments. 1. Pooled Investments - It is the general policy of the City to pool all available operating cash of the City of La Quinta, La Quinta Redevelopment Agency and La Quinta Financing Authority and allocate interest earnings, in the following order, as follows: A. Payment to the General Fund of an amount equal to the total annual bank service charges as incurred by the general fund for all operating funds as included in the annual operating budget. 13 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. XIII INTERNAL CONTROLS AND INDEPENDENT AUDITOR The City Treasurer shall establish a system of internal controls to accomplish the following objectives: ► Safeguard assets; ► The orderly and efficient conduct of its business, including adherence to management policies; ► Prevention or detection of errors and fraud; ► The accuracy and completeness of accounting records; and, ► Timely preparation of reliable financial information. While no internal control system, however elaborate, can guarantee absolute assurance that the City's assets are safeguarded, it is the intent of the City's internal control to provide a reasonable assurance that management of the investment function meets the City's objectives. The internal controls shall address the following: a. Control of collusion. Collusion is a situation where two or more employees are working in conjunction to defraud their employer. b. Separation of transaction authority from accounting and record keeping. By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved. 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 14 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 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. XIV BENCHMARK The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles commensurate with the investment risk constraints and the cash flow needs of the City. Return on investment is of least importance compared to safety and liquidity objectives. The City of La Quinta Investment Policy will use the six month U.S. Treasury Bill as 15 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. AB 943 requires that the December 31' and June 30" Treasurers Reports be sent to the California Debt and Advisory Commission within sixty days of the end of the quarter. 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; ► 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. XVI INVESTMENT OF BOND PROCEEDS The City's Investment Policy shall govern bond proceeds and bond reserve fund investments. California Code Section 5922 (d) governs the investment of bond proceeds and reserve funds in accordance with bond indenture provisions which shall be structured in accordance with the City's Investment Policy. Arbitrage Requirement The US Tax Reform Act of 1986 requires the City to perform arbitrage calculations as required and return excess earnings to the US Treasury from investments of proceeds of bond issues sold after the effective date of this law. This arbitrage calculations may 16 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 at least annually the City's Investment Policy and recommend appropriate changes; (2) review monthly Treasury Report and note compliance with the Investment Policy and adequacy of cash and investments for anticipated obligations; (3) receive and consider other reports provided by the City Treasurer; (4) meet with the independent auditor after completion of the annual audit of the City's financial statements, and receive and consider the auditor's comments on auditing procedures, internal controls and findings for cash and investment activities, and; (5) serve as a resource for the City Treasurer on matters such as proposed investments, internal controls, use or change of financial institutions, custodians, brokers and dealers. The appendices include City of La Quinta Ordinance 2.70 entitled Investment Advisory Board Provisions. XVIII INVESTMENT POLICY ADOPTION On an annual basis, the Investment policies will be initially reviewed by the Investment Advisory Board and the City Treasurer. The Investment Advisory Board will forward the Investment policies, with any revisions, to the City Manager and City Attorney for their review and comment. A joint meeting will be held with the Investment Advisory Board, City Manager, City Attorney, and City Treasurer to review the Investment policies and comments, prior to submission to the City Council for their consideration. The Investment Policies shall be adopted by resolution of the City of La Quinta City Council on an annual basis. The Investment Policies will be adopted before the end of June of each year. AB 943 requires that the Investment Policies be sent to the California Debt and Investment Advisory Commission within sixty days of a change to the Investment Policy. 17 Appendix A Fa- Z LL g O oa cl •E n o Gov v v 0 ytn0 3 7 N �. O U O O n ° v U U d oiS Q ou N � N U 0 LL LL .O m m m 0 0 C Q 0 > Q c .c •° ul m cco Eco E Es y� m X O T N N N N O 0)N �Op N W U) 2 O c m � C °-� yc :tl.! U O + a3+ 'a a E j O U ma > y L " a ai > w0 X a O O N 0� p V/ > N m F- O O m E 00 Y O O oS c_ j 6I9 V 0 $ (V CO tf► U Q O_ 69 N Ol 0 0 o E N o 0 ° o ° • LL O IL O a O a O a a° O a a O a o O O 0 $ .2 O o O co� o O O O N o O Q •2 O OO O O 0pO 0 _O C Ov" pO O_v "a ,� p7 •,-�a a a a 80 QE Z lLLOo (e co O 0 O O Q 8 O v7 M r6 N Co- O —N O m 7 N oN O N 0 N +� N 7 > U U Q C Gl N E x d C m fl- c m o otm N c CA O U O oti c E c c m E 'm ° .O a V NN U E EL U y O" r- UI (0 a N E U N l` 'a Y c U Y O U) o m '� " d Z c E c UQ _ mU V� yfA N Q. m cl E°Z_CD �r U)" v N " N = v N �••� Q O O O LL N +O+ = g m L C m 0 m .O 0 0 A n v N ��N•iaCO C_i �O N o Li 0 0 U)_moo N O Q U� m Y o Q d W >. aN I6LL° 0 o o3 cM0--J •" 0 r 3 Z " O m'aa c N t0'Q LL '"O 0 0 o Q.mc olm c f6U ° M.c a`) c c QN Ya. EUC N cc NV) O = N °JU YO° N rnr0 dca E d > o EE � C) c E E m a °S N Z 2J152 1> y E O CNE c > mEEm2R o rn c mNN O N U 00 U) 0 OU000lFL11t 0 E 0 0 0.D > U co > E 0 ma 0. (0 Y") N ON v m M co V lA U) z lil V1 W Z cl N w O 2 F- a z Y E o m y 0 a 0 m N= C O O O N y 0— y Q +� E N d C U N E C U m a o 0L) mU � U U Z = J Y G l N L ++ •C -O! LL I m N N L d aL O O L E O m � E c N = M N N = mm U N s a - U)y'9 Z o m N O N � �` ¢ rn C N = �v O N m i•+ N E.- al " v _ E Y > N d T 5 E O U m E o c° N v N O O U 0 U O O L yy-- to L +° c 'o 0 o N om E E v 0L cE 0 m m a a U) cm Q N = vY N 3 o Y COic >..� mo 0 v �a"i N U Uc 2 O U UE O N f+ N �8 >'c � E� �a N w O •O N c 3 U 'D E O N y ,C io c -O Q"J CL m l=6 O y 0 > N O N N O O d V m" :3 N •� Y.D ;-0 N y J N N c W t 0 O m -au 0 15.4 Ill m O) O ip L :- E w O U N m =° N= 0 N CO - 00 I to cd zc LU.a)+ 7"'O ECN U= O .0°c N. 0 0E0 m C�> al0 l Y a7N 0 vmn C N O m C N = N w N 7— m E"- 7 O N U N 7-0 ELL LL N E N •� 7 N N O NLL N `O C Ed U0 0 C.0 U y C aL. 72 a .0 a O 0 a s m U ° O m E M N N °v LO c O w y a m +' al O c L m+- °�o yv') c (D E cy o 0 E a U a N N N FL QJ U iFL- Q � U a. [a N CM Iq W CO 0 L OmmE.m ~ m E o C O N w > al=c°m E v w (D -a val_ 0) my 3 m C c N to y N c N _ y m ° c O U L E O 0 N N Y O O N > as 0 a 0.0 0 m .O Yca=d = OU)— 7 00 O 0 ac_ uic0 v -0 co LO m O N •� w L E3 N c Vl O "O > > 0 B.= N = O 'O _c+'d E - N ErE� E"lE N 0.0 _x U > N d I�R,E�y m c c .@ c°.00E En_� E c L O 3 .d 4-,.0 0 U o m o y m Nr' U IL- at o. c 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. 2.70.020Board meetings. The Board usually will meet monthly, 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. 2.70.030Board functions. 1. The principal functions of the Board are: (1) review at least annually the City's Investment Policy and recommend appropriate changes; (2) review monthly Treasury Report and note compliance with the Investment Policy and adequacy of cash and investments for anticipated obligations; (3) receive and consider other reports provided by the City Treasurer; (4) meet with the independent auditor after completion of the annual audit of the City's financial statements, and receive and consider the auditor's comments on auditing procedures, internal controls, and findings for cash and investment activities, and; (5) serve as a resource for the City Treasurer on matters such as proposed investments, internal controls, use or change of financial institutions, custodians, brokers and dealers. 2. The Board will report to the City Council after each meeting either in person or through correspondence at a regular City Council meeting. r�7 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) 20 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) 21 Appendix D SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES Function Responsibilities Develop formal Investment Policy City Treasurer Recommend modifications to Investment Policy Investment Advisory Board Review formal Investment Policy and recommend City Manager and City Council action City Attorney Adopt formal Investment Policy City Council Review Financial Institutions & Select Investments City Treasurer Approve investments City Manager or Assistant City Manager Execute investment transactions City Treasurer Confirm wires, if applicable City Manager or Accounting Manager Record investment transactions in City's accounting records Accounting Manager Investment verification - match broker confirmation to City investment records Account Technician Reconcile investment records - to accounting records and bank statements - to Treasurers Report of investments Account Technician Security of investments at City Vault Security of investments Outside City Third Party Custodian Review internal control procedures External Auditor 22 Appendix E LISTING OF APPROVED FINANCIAL INSTITUTIONS 1. Banking Services - Wells Fargo Bank, Government Services, Los Angeles, 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, Los Angeles, 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 23 1. 2. 3. 4. Appendix F BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION Name of Firm: Address: Telephone: ( 1 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: ( 1 ( 1 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): 24 % 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. 11. Has your firm or your local office ever been subject to a regulatory or state/ federal agency investigation for alleged improper, fraudulent, disreputable or unfair activities related to the sale of securities? Have any of your employees been so investigated? If so, explain. 12. Has a client ever claimed in writing that you were responsible for an investment loss? Yes No If yes, please provide action taken Has a client ever claimed in writing that your firm was responsible for an investment loss? Yes No If yes, please provide action taken 25 Do you have any current, or pending complaints that are unreported to the NASD? Yes No If yes, please provide action taken Does your firm have any current, or pending complaints that are unreported to the NASD? Yes No If yes, please provide action taken 13. Explain your clearing and safekeeping procedures, custody and delivery process. Who audits these fiduciary responsibilities? Latest Audit Report Date 14. How many and what percentage of your transactions failed. Last month? % $ Last year? % $ 15. Describe the method your firm would use to establish capital trading limits for the City of La Quinta. 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? 26 19. Does your firm offer investment training to your clients? Yes No 20. Does your firm have professional liability insurance. Yes No If yes, please provide the insurance carrier, limits and expiration date. 21. 22. Please list your NASD Registration Number. Do you have any relatives who work at the City of La Quinta? Yes No If yes, Name and Department 23. Do you maintain an office in California. Yes No 24. Do you maintain an office in La Quinta or Riverside County? Yes No 25. Please enclose the following: • Latest audited financial statements. • Samples of reports, transaction confirmations and any other research/publications the City will receive. • Samples of research reports and/or publications that your firm regularly provides to clients. • Complete schedule of fees and charges for various transactions. ***CERTIFICATION*** I hereby certify that I have personally read the Statement of Investment Policy of the City of La Quinta, and have implemented reasonable procedures and a system of controls designed to preclude imprudent investment activities arising out of transactions conducted between our firm and the City of La Quinta. All sales personnel will be routinely informed of the City's investment objectives, horizons, outlooks, strategies and risk constraints whenever we are so advised by the City. We pledge to exercise due diligence in informing the City of La Quinta of all foreseeable risks associated with financial transactions conducted with our firm. By signing this document the City of La Quinta is authorized to conduct any and all background checks. Under penalties of perjury, the responses to this questionnaire are true and accurate to the best of my knowledge. 27 Broker Date Representative Title Sales Manager and/or Managing Partner* Date Title Wo 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? c. How interest is paid? (Credited to principal at the end of the month, each quarter; mailed?) d. How are gains/losses reported? Factored monthly or only when realized? 29 REPORTING 1. Is the yield reported to participants of the pool monthly? (If not, how often?) 2. Are expenses of the pool deducted before quoting the yield? 3. Is the yield generally in line with the market yields for securities in which you usually invest? 4. How often does the pool report, and does that report include the market value of securities? SECURITY The following questions are designed to help you safeguard your funds from loss of principal and loss of market value. 1. Does the pool disclose safekeeping practices? 2. Is the pool subject to audit by an independent auditor? 3. Is a copy of the audit report available to participants? 4. Who makes the portfolio decisions? 5. How does the manager monitor the credit risk of the securities in the pool? 6. Is the pool monitored by someone on the board of a separate neutral party external to the investment function to ensure compliance with written policies? 7. Does the pool have specific policies with regards to the various investment vehicles? a. What are the different investment alternatives? b. What are the policies for each type of investment? 8. Does the pool mark the portfolio to its market value? 9. Does the pool disclose the following about how portfolio securities are valued: a. The frequency with which the portfolio securities are valued? b. The method used to value the portfolio (cost, current value, or some other method)? OPERA TIONS The answers to these questions will help you determine whether this pool meets your operational requirements:, 1. Does the pool limit eligible participants? 2. What entities are permitted to invest in the pool? 3. Does the pool allow multiple accounts and sub -accounts? 4. Is there a minimum or maximum account size? 5. Does the pool limit the number of transactions each month? What is the number of transactions permitted each month? 6. Is there a limit on transaction amounts for withdrawals and deposits? a. What is the minimum and maximum withdrawal amount permitted? b. What is the minimum and maximum deposit amount permitted? 7. How much notice is required for withdrawals/deposits? 8. What is the cutoff time for deposits and withdrawals? 9. Can withdrawals be denied? 10. Are the funds 100% withdrawable at anytime? 11. What are the procedures for making deposits and withdrawals? a. What is the paperwork required, if any? b. What is the wiring process? 12. Can an account remain open with a zero balance? 13. Are confirmations sent following each transaction? STA TEMENTS It is important for you and the agency's trustee (when applicable), to receive statements monthly so the pool's records of your activity and holding are reconciled by you and your trustee. 31 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? ON 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. 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). 33 DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount. 3. 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. FHLBs (Federal Home Loan Bank Notes and Bonds) - Issued by the Federal Home Loan Bank System to help finance the housing industry. The notes and bonds provide liquidity and home mortgage credit to savings and loan associations, mutual savings banks, cooperative banks, insurance companies, and mortgage -lending institutions. They are issued irregularly for various maturities. The minimum denomination is $5,000. The notes are issued with maturities of less than one year and interest is paid at maturity. The Other federal agency issues are Small Business Administration notes (SBAs), Government National Mortgage Association 34 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. FICBs (Federal Intermediate Credit bank Debentures) - Loans to lending institutions used to finance the short-term and intermediate needs of farmers, such as seasonal production. They are usually issued monthly in minimum denominations of $3,000 with a nine -month maturity. Interest is payable at maturity and is calculated on a 360- day, 30-day month basis. 6. FHLMCs (Federal Home Loan Mortgage Corporation) - a government sponsored entity established in 1970 to provide a secondary market for conventional home mortgages. Mortgages are purchased solely from the Federal Home Loan Bank System member lending institutions whose deposits are insured by agencies of the United States Government. They are issued for various maturities and in minimum denominations of $10,000. Principal and Interest is paid monthly. 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. 35 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. SECONDARY MARKET: A market made for the 36 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. 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. 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. 37 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.