2002 03 13 IABP.O. Box 1504
78-495 CALLE TAMPICO (760) 777-7000
Shining Brighter Than iver LA QUINTA, CALIFORNIA 92253 FAX (760) 777-7101
AGENDA
INVESTMENT ADVISORY BOARD
Study Session Room
78-495 Calle Tampico- La Quinta, CA 92253
March 13, 2002 - 5:30 P.M.
Board Member Felice ( Video Conference Location) Cisco Systems
170 West Tasman Dr., Bldg. 17, San Jose, California, 95135
1 CALL TO ORDER
a. Pledge of Allegiance
b. Roll Call
II PUBLIC COMMENT - (This is the time set aside for public comment on any matter not
scheduled on the agenda.)
III CONFIRMATION OF AGENDA
IV CONSENT CALENDAR
A. Approval of Minutes of Meeting on February 13, 2002 for the Investment Advisory
Board.
V BUSINESS SESSION
A. Transmittal of Treasury Report for January 2002
B. Consideration of Fiscal Year 2002/03 Investment Policies
C. California Municipal Treasurer's Conference - Monterey, CA
April 29 - May 3, 2002
D. Selection of two Board Members to Serve on an Audit Request Proposal Committee
(RFP)
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report and other selected Financial Data -
February 2002
B. LAIF Pooled Money Investment Annual Report, November and December Pooled
Money Report
VII BOARD MEMBER ITEMS
Vill ADJOURNMENT
MEMORANDUM
TO: La Quinta City Council
FROM: John M. Falconer, Finance Director/Treasurer
SUBJECT: Treasurer's Report for January 31, 2002
DATE: March 8, 2002
Attached is the Treasurer's Report for the month ending January 31, 2002. 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
Notes
Sold/Matured
Other
Ending
Chan e
Cash
$833,334
$11,606.897
(1)
$12,440,231
$11,606,897
LAW
$16,293,521
168,890
16,462,411
168,890
US Treasuries (2)
$56,201,552
8,965,373
(9,000,000)
(111,165)
56,055,760
(145,792)
US Gov't Agencies (2)
$12,998,466
4,162
13,002,628
4,162
Commercial Paper (2)
$4,998,110
4,992,465
(5,000,000)
7,268
4,997,843
(267)
Mutual Funds
$9,216,043
1
71,388
9,144,655
71,388
Total
1$100,541,026
1 $25 733 625
$14 071 388
99 735
112 103 528
1$11,562, 502
I certify that this report accurately reflects all pooled investments and is in compliance with the California
Government Code; and is in conformity with the City Investment Policy.
As Treasurer of the City of La Quinta, I hereby certify that sufficient investment liquidity and anticipated
revenues are available to meet the pools expenditure requirements for the next six months. the City of
La Quinta used the Bureau of the Public Debt, U.S. Bank Monthly Statement and the Bank of New York
Monthly Custodian Report to determine the fair market value of investments at month end.
The City of La Quinta received notice in January that it was the owner of 18,339 shares of common stock in
the Principal Financial Group. The shares were obtained from the demutualization of Principal Financial
Group, the City's health care provider, from a privately owned company to a publicly traded company. The
City is in the is in the process of selling the stock, which is not a permissible investment, and which has not
been included in the table above. The common stock is being managed by Mellon Investor Services,
and has a market value of $466,177 as of January 31, 2002.
3 ?' c
ate
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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INVESTMENT ADVISORY BOARD
Meeting Date: March 13, 2002
MIJAMMIS
Transmittal of Treasury Report
for January 31, 2002
BACKGROUND:
Business Session: A
Attached please find the Treasury Report January 31, 2002
RECOMMENDATION:
Review, Receive and File the Treasury Report for January 31, 2002
n M. Falconer, Fihance Director
MEMORANDUM
TO: La Quinta City Council
FROM: John M. Falconer, Finance Director/Treasurer
SUBJECT: Treasurer's Report for January 31, 2002
DATE: February 28, 2002
Attached is the Treasurer's Report for the month ending January 31, 2002. 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
Notes
Sold/Matured
Other
EndingChan
e
Cash
$833,334
$11,606,897
(1)
$12,440,231
$11,606,897
LAIF
$16,293,521
168,890
16,462,411
168,890
US Treasuries (2)
$56,201,552
8,965,373
(9,000,000)
(111,165)
56,055,760
(145,792)
US Gov't Agencies (2)
$12,998,466
4,162
13,002,628
4,162
Commercial Paper (2)
$4,998,110
4,992,465
(5,000,000)
7,268
4,997,843
(267)
Mutual Funds
$9,216,043
$100 541 026
25 733 625
1
71,388
$14 071 388
$99 735
9,144,655
$112 103 528
71,388
11 562 502
Total
I certify that this report accurately reflects all pooled investments and is in compliance with the California
Government Code; and is in conformity with the City Investment Policy.
As Treasurer of the City of La Quinta, I hereby certify that sufficient investment liquidity and anticipated
revenues are available to meet the pools expenditure requirements for the next six months. the City of
La Quinta used the Bureau of the Public Debt, U.S. Bank Monthly Statement and the Bank of New York
Monthly Custodian Report to determine the fair market value of investments at month end.
J hn M. Falconer I
Hance Director/Treasurer
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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CITY OF LA QUINTA
CITY
CITY RDA
RDA FA
BALANCE SHEET 01/31/02
FIXED
LONG TERM FIXED
LONG TERM FINANCING LONG TERM
GRAND
CITY
ASSETS
DEBT RDA ASSETS
DEBT AUTHORITY DEBT
TOTAL
ASSETS:
POOLED CASH
12,380,644.67
15,648,769.78
97,861.72
28,127,276.17
LQRP INVESTMENT IN POOLED CASH
735,000.00
735,000.00
INVESTMENT T-BILL/NOTES & OTHER
37,980,000.00
37,980,000,00
AUTO MALL CASH
LQRP CASH
11,339.95
11,339.95
BOND REDEMPTION CASH
210,197.46
1,929.06
212,126.52
BOND RESERVE CASH
BOND PROJECT CASH
44,417,841.24
550,247.67
44,968,088.91
BOND ESCROW CASH
PETTY CASH
1,000.00
1,000.00
CASH & INVESTMENT TOTAL
50,361,644.67
61,023,148.43
650,038.45
112,034,831.55
INVESTMENT IN LAND HELD FOR RESALE
ACCOUNTS RECEIVABLE
39,038.84
60,900.00
99,938.84
PREMIUM/DISCOUNT ON INVESTMENT
(52,053.91)
120,750.00
68.696.09
LQRP-ACCOUNTS RECEIVABLE
44,783.30
44,783.30
INTEREST RECEIVABLE
28,125.00
565,607.73
593,732.73
LOAN/NOTES RECEIVABLE
13,489,553.69
13,489,553.69
DUE FROM OTHER AGENCIES
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
0.37
0.37
DUE FROM OTHER FUNDS
551,038.04
551,038.04
DUE FROM RDA
8,497,550.20
8,497,550.20
INTEREST ADVANCE -DUE FROM RDA
3,550,022.63
3,550,022.63
ADVANCES TO OTHER FUNDS
56,483.22
2,448,263.00
2,504,746.22
NSF CHECKS RECEIVABLE
3,182.01
3,182.01
ACCRUED REVENUE
833.40
833.40
FIXED ASSETS
20,711,742.00
20,711,742.00
ACCUMULATED DEPRECIATION
711,534.48
711,534.48
TRAVEL ADVANCES
2,294.00
2,294.00
EMPLOYEE ADVANCES
PREPAID EXPENSES
RECEIVABLE TOTAL
12,836,176.84
20,711,742.00
17,281,729.16
50,829,648.00
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
9,988,279.05
9,988,279.05
ACCUMULATED DEPRECIATION
AMOUNT AVAILABLE TO RETIRE UT DEBT
3,395,117.03
3,395,117.03
AMOUNT TO BE PROVIDED FOR L!f DEBT
951,847.65 80,866,860.97
7,750,000.00 89,568,708.62
TOTAL OTHER ASSETS
951,847.65 9,988,279.05 84,261,978.00
7,750,000.00 102,952,104.70
TOTAL ASSETS
63 199 996.51
20,711,742.00 951,847.65 78,304,877.59 9,988,279.05 84,261,978.00
650,038.45 7,750,000.00 265 818 759.25
LIABILITIES:
ACCOUNTS PAYABLE
13,591.33
13,591.33
DUE TO OTHER AGENCIES
1,385,327.57
1,385,327.57
DUE TO OTHER FUNDS
1,215,077.29
1,215,077.29
INTEREST ADVANCE -DUE TO CITY
2,448,263.00
11,383,537.00
13,831,800.00
ACCRUED EXPENSES
16,468.50
16,468.50
PAYROLL LIABILITIES
(22,025.91)
(22,025.91)
STRONG MOTION INSTRUMENTS
598.35
598.35
FRINGE TOED LIZARD FEES
78,981.50
78,981.50
SUSPENSE
1,101.79
1,101.79
DUE TO THE CITY OF LA QUINTA
PAYABLES TOTAL
3,905,837.63
12,615,082.79
16,520,920.42
ENGINEERING TRUST DEPOSITS
SO. COAST AIR QUALITY DEPOSITS
LQRP DEPOSITS
14,499.00
14,499.00
DEVELOPER DEPOSITS
881,851.62
881,851.62
MISC. DEPOSITS
439,448.65
439,448.65
AGENCY FUND DEPOSITS
2,012,086.01
2,012,086.01
TOTAL DEPOSITS
3,333,386.28 14,499.00
3,347,885.28
DEFERRED REVENUE 113.800.00 11,378,904.00 11,492,704.00
OTHER LIABILITIES TOTAL 113,800.00 11,378,904.00 11,492,704.00
COMPENSATED ABSENCES PAYABLE 373,536.65 373,536.65
DUE TO THE CITY OF LA QUINTA 578,311.00 189,725.50 768,036.50
DUE TO COUNTY OF RIVERSIDE 10,989,847.00 10,989,847.00
DUE TO C.V. UNIFIED SCHOOL DIST. 8,747,405.50 8,747,405.50
DUE TO DESERT SANDS SCHOOL DIST.
BONDS PAYABLE 4.64,335,000.00 7,750,000.00 72,085,000.00
TOTAL LONG TERM DEBT 951,847.65 84,261,978.00 7,750,000.00 92,963,825.65
TOTAL LIABILITIES 7,353,023.91 951,847.65 24,008,485.79 84,261,978.00 7,750,000.00 124,325,335.35
EQUITY -FUND BALANCE 55,846,972.68 20,711,742.00 54,296,391.80 9,988,279.05 650,038.45 141,493,423.98
TOTAL LIABILITY & EQUITY 63,199,996.59 20 711 742.00 951,847.65 78,304,877.59 9,988,279.05 84,261,978.00 650,038.45 7,750,000.00 265,818,759.33
(0.08) 0.00 (.08)
CASH & INVESTMENT TOTAL 112,034,831.55
PREMIUMIDISCOUNT ON INVESTMENT 68,696.09
TOTAL 112,103,527.64
(ju,9
INVESTMENT ADVISORY BOARD Business Session: C
Meeting Date: March 13, 2002
TITLE:
California Municipal Treasurer's Conference - Monterey, CA
April 29 - May 3, 2002
BACKGROUND:
Each year the City budgets funds for the Treasurer and two Investment Advisory Board
members to attend the Treasurers Conference. In order to make reservations, Staff
is requesting that the Board select up to two members to attend this years conference.
Attached is the staff report approved by the City Council regarding the conference.
RECOMMENDATION:
Select up to two Board members to attend the Treasurer's Conference.
Ahn' M. FalconeW, Finance Director
COUNCIL/RDA MEETING DATE: March 5, 2002
Approval of Overnight Travel for the
Finance Director and Two Members of
the Investment Advisory Board to
Attend the 2002 California Municipal
Treasurers Association (CMTA)
Conference April 29 - May 3, 2002 in
Monterey, California
RECOMMENDATION:
C rA
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
Approve authorization for overnight travel for the Finance Director and two Members
of the Investment Advisory Board to attend the five day 2002 California Municipal
Treasurers Association (CMTA) Conference - April 29 - May 3, 2002 in Monterey,
California.
BACKGROUND AND OVERVIEW:
The Annual California Municipal Treasurers Association Conference will be held April
29 - May 3, 2002 in Monterey. Account No. 101-151-637-000 Travel and Training
contains $2,400.00 for two Investment Advisory Board Members and $1,200.00 for
staff to attend this conference.
The CMTA 2002 Annual Conference is a 5-day conference that focuses on financial
issues affecting local governments. Conference information is attached (Attachment
1).
FINDINGS AND ALTERNATIVES:
Alternatives available to the City Council include:
1. Approve authorization for overnight travel for the Finance Director and two
Members of the Investment Advisory Board to attend the CMTA Conference in
Monterey, California, April 29 - May 3, 2002; or
2. Do not approve authorization for overnight travel for the Finance Director and
two Members of the Investment Advisory Board; or
3. Provide staff with alternative direction.
Respectfully submitted,
hn M. Falconer, Finance Director
Approved for submission by:
Thomas P. Genovese
City Manager
Attachment: 1. CMTA Conference Information
ATTACHMENTS
UU 3
ATTACHMENT 1
Ct-.NrrtTiiy - N>✓w CHAXA EyGES - Ni-:%i,'
CMTA 2002 Conference Registration Form
The Doubletree Hotel Monterey
A ril 29-30 2002 Pre C f
S()1 T,1,,o,NS p - on erence
C ALtFOR NIA MUNICIPAL TREASURERS ASSOCIATION May 1-3,2002 Conference
You must be a current CMTA member (Active/Government Associate/Sustaining) to register. If you need to
verify that your membership is current, please contact Frances Medema at CMTA's Sacramento office at (916)
658-8209. If you have any questions regarding conference registration call Mike Reynolds at the City of
Redlands at (909) 798-7544. Please use a separate form for each registrant (photocopies accepted.) (This
form is not valid for Commercial Associate members.)
Name (Please Print or Type) Title Organization Name you prefer on badge
Mailing Address
Phone
City State
Fax
Zip
Spouse/Guest Name
Is this your first CMTA conference? (yes or no)
Special dietary needs?
(yes or no)
Thursday Banquet Beef & Seafood Chicken
Vegetarian
Registration Fees
Pre -Conference Seminar [Active or Government Associate]
Amount
Pre -Conference Seminar only
$ 115.00
$
Pre -Conference Seminar if also attending conference
$ 105.00
$
Conference
Active or Government Associate
Early (on or before 3/15/02)
$ 225.00
$
Includes all meals, receptions & Thursday Installation Banquet
(on or before 4/5/02)
$ 250.00
$
Regular (after 4/5/02)
$ 260.00
$_
Second registrant from same organization
Early (on or before 3/15/02)
$ 200.00
$
Includes all meals, receptions & Thursday Installation Banquet
(on or before 4/5/02)
$ 225.00
$
Regular (after 4/5/02)
$ 260.00
$
Daily Conference Registration 0 Wednesday 0 Thursday
Daily Rate x
$ 100.00
$
Available only in addition to fully paid conference registration
Includes breakfast & lunch only
Additional Meals
Wednesday Lunch x
$ 25.00
$_
Spouses & guests
Thursday Lunch x
$ 25.00
Thursday Banquet x
$ 50.00
$
Events
Golf Tournament (see flyer for details)
Total Fees $_
Please make checks payable to "CMTA 2002 Conference." Mail to: Michael Reynolds, City Treasurer, P.O. Box
3005, Redlands, CA 92373-1505.(A pre -addressed envelope has been included for your convenience)
Advance registrants unable to attend may receive a refund of the registration fee less $25.00 processing fee by
submitting a written request to CMTA at the same address or fax (909) 798-7670 by April 15, 2002. No refunds
will be made if requested after that date. Substitute attendees will be accepted at any time.
004
IM rA
CMTA ANNUAL CONFERENCE
New Century, New Challenges, New Solutions
Proposed Agenda
Pre -Conference — "Show me the $$$!!!"
(Active Government Associates only)
4129102 Monday "Treasury in 21' Century"
1:00-1:45 Technology- a government/commercelbanking
1: 45-2:00 Break
2:00 - 3:15 Issues and solutions for credit cards / auto debits
3:15 - 3:30 Break
3:30 - 5:00 Best internet sites and practical uses for treasurers
4130102 Tuesday "Money doesn't grow on trees - you have to make it!"
8:00 -9:30 Making money - Issuing bonds 101
9: 30-9: 45 Break
9:45 - 10:45 Making money more or less expensive
Credit rating agencies
10: 45-11: 00 Break
11:00 - 12:00 Making money ll - Other financing tools
11:00am Golf Registration
Free Afternoon (see activities flyer in your registration materials)
2002 CMTA Conference
Proposed Agenda
5102102 Thursday
Early Risers Personal Balance
Basketball 6:15 a.m. in the hotel lobby
Morning Walk 6:30 a.m. in the hotel lobby
8:30 - 9:00am Breakfast
9:00 - 10:15am "Days of Our Lives I" - Treasurers Best Practices
Banking Relations
Cash Flow Model
10:15 - 10:30 Break
10:30 - 11:45 "Days of Our Lives II" - Treasurers Best Practices continued
Treasurer's Handbook/Update
Legislation Update
12:00 - 1:45pm
Keynote Luncheon Speaker The Honorable Rosario Marin
US Treasurer (invited)
Conference Sponsor Recognition
2:00 - 3:00
Benefits and Liabilities of Different Investment Methods
Multi -tasking Treasurer
Use of Investment Management Services
Full Time Treasury Staff
3: 00 - 3:15
Break
3:15 - 4:15
Nuts & Bolts
4:15 - 5:00
Nuts & Bolts Wrap-up
5:45 - 6:15
Photo Session
6:15
Reception .
7:15 Dinner
8:00 Opening & Installation
8:30 — 12:00 Sports Bar party!
2002 CMTA Conference
Proposed Agenda
5103102 Friday
Early Risers Personal Balance
Basketball 6:15 a.m. in the hotel lobby
Morning Walk 6:30 a.m. in the hotel lobby
8:30 - 9:00am Breakfast
9:00 - 10:15am Investment Options with Agency Paper
10:00 -10:15 Break
10:15 — 11:30 Closing Keynote Special Guest Speaker to be Announced!
:4
00
INVESTMENT ADVISORY BOARD MEETING: BUSINESS SESSION: D
March 13, 2002
TITLE
Selection of two Board Members to serve on an Audit Request for Proposal Committee
(RFP).
BACKGROUND:
At the March 51" City Council Meeting, the City Council directed Staff to send out an
RFP for Audit Services and directed Staff to set-up a review committee consisting of
the following four members:
Two (2) Investment Advisory Board Members
City Manager
Finance Director/Treasurer
Attached is a copy of Staff Report, the RFP for Audit Services and Contract.
RECOMMENDATION:
Select two members to serve on the Audit RFP review committee.
Jdhn M. Falboner, Finance Director
AGENDA CATEGORY:
BUSINESS SESSION: 5
COUNCIL/RDA MEETING DATE: March 5, 2002
CONSENT CALENDAR:
Consideration and Authorization
to Send Out a Request for
Proposals (RFP) for Auditing
Services and Appoint a
Selection Committee
RECOMMENDATION:
STUDY SESSION:
PUBLIC HEARING:
Provide staff with direction on proceeding with the selection process.
FISCAL IMPLICATIONS:
The Fiscal Year 2001 /02 budget contained $34,570 for the annual audit.
CHARTER CITY IMPLICATIONS:
None.
BACKGROUND AND OVERVIEW:
The contract would include professional auditing services and preparation of the
financial statements for the City and Redevelopment Agency. Also, it would include
a compliance audit of the Redevelopment Agency in accordance with guidelines issued
by the State Controller's Office, a single audit on federal financial assistance if
necessary, and a review on the internal controls of the City. In addition, the contract
would include 40 hours of consulting services to assist in accounting and cash flow
issues.
Conrad and Associates has been providing audit services to the City since Fiscal Year
91 /92. During this time they have provided not only good services in connection with
the audit but also provided assistance in the accounting and cash flow areas. During
their tenure, the City has received financial awards from the California Society of
Municipal Accounting Officers and the Government Financial Officers Association.
Conrad and Associates was also instrumental in the early compliance with Government
Accounting Standards Board 34 which resulted with the City being one of eleven
Cities state wide to receive the award.
As an additional safeguard, Conrad & Associates holds separate meetings annually
with the City Council, Investment Advisory Board and the City Manager to discuss the
financial operations/results of the audit.
FINDINGS AND ALTERNATIVES:
The alternatives available to the City Council include:
1. Direct staff to renegotiate with the current provider, Conrad and Associates; or
2. Approve the Request for Proposals for auditing services for the next five
fiscal years, beginning July 1, 2001 and ending June 30, 2006. Authorize
staff to initiate the selection process to contract for professional services,
and appoint two Council Members to participate in the selection process; or
3. Provide Staff with alternative direction.
Respectively submitted,
John M. Falcone
Finance Director
Approved for submission by:
Thomas P. Genovese
City Manager
Attachment: 1. Request for Proposal for Auditing Service
2. Contract Services Agreement
ATTACHMENTS
ATTACHMENT 1
REQUEST FOR PROPOSAL OF
AUDITING SERVICES
The City of La Quinta is soliciting proposals for auditing services for the next five fiscal
years, which begins July 1, 2001 and ends June 30, 2006. The enclosed "Request for
Proposal" outlines the scope of the engagement, information required, evaluation criteria,
and other relevant information. If you firm would like to consider this engagement, we
invite your response due no later than 5 p.m. on April 11, 2002.
A selection committee of two council members and two finance staff members will
evaluate, select and recommend proposals to the City Council. The City Council will
make the final decision on award of the Contract.
Additional information may be obtained by contacting:
John M. Falconer
Finance Director
City of La Quinta
(760)777-7150
(760)777-7105 Fax
Proposers must submit five (5) copies of their proposals in two sealed envelopes, with
one envelope containing proposed costs of audit services and the other technical data, by
no later than 5:00 p.m. April 11, 2002 to the following address:
City of La Quinta
Finance Department — Audit Proposal
P.O. Box 1504
La Quinta, CA 92253
Date of issuance March 5, 2002
Proposed Deadline April 11, 2002
AUDIT EXPECTATIONS
The CAN - a Quinta (City) annually issues a Comprehensive Annual Financial Report
(CAFR). 1,2 La Quinta Redevelopment Agency (Agency) issues annually a Component
Unit Financ : "a Report (CUFR). The City may receive Community Development Block
Grant money and/or other financial assistance from the federal government and as such
may issue a Single Audit Report. In addition, the activities of the La Quinta Financing
Authority are included in the CAFR, but no CUFR is issued.
The City and Agency expect an audit opinion for each of their financial reports to fairly
represent their financial position and conform with generally accepted accounting
principles. The City and Agency expect the audit of each of their financial reports to be
conducted in accordance with generally accepted auditing standards. Further, the Agency
expects its CUFR to comply with all laws and regulations pertaining to redevelopment
agencies. The City expects the Single Audit, if required, to be conducted in accordance
with O.M.B. Circular 133 and related correspondence.
The City of La Quinta requests a full scope audit of all fund types and account groups in
accordance with generally accepted auditing standards. Audit services are desired for the
City, Agency and Financing Authority on an annual basis as set forth above. Proposals
include separate quotes for the City and its component units.
The City's accounting personnel will provide assistance to the audit form during the
course of the audit. Cooperation may be expected in answering questions, preparing
schedules for working papers, and preparing confirmations. The City would expect only
reasonable requests of assistance from the auditing firm.
DESCRIPTION OF FUNDS
The City of La Quinta uses the following fund types and account groups in its financial
structure:
Fund Type/Account Group
Number
of Individual Funds
General Fund
1
Special Revenue Funds
12
Debt Service Funds
3
Capital Project Funds
13
Internal Service Funds
2
Agency Funds
7
General Fixed Assets Account Group
2
General Long Term Debt Account Group
3
REPORTS AND CONSIDERATIONS
- The independent audit firm shall produce the following financial reports by no later than
November 20`h of each year:
City CAFR — 70 copies
Agency CJFR — 70 copies
Single Act Audit — 3 copies
Management Letter — 1 copy
- A management letter shall be prepared as part of the audit that includes disclosures of
material and non -material weaknesses in internal control, disclosures of violations of
finance related legal and contracted provisions, and auditor recommendations for
financial and program management improvements.
- Working papers shall be retained by the contractor for a minimum of three years after
the conclusion of the engagement unless notified otherwise in writing by the Finance
Director. In addition, the firm shall respond to the reasonable inquiries of successor
auditors and allow successor auditors to review working papers relating to matters of
continuing accounting significance.
- The independent audit firm is expected to meet at least once each year with City
Council to discuss the financial statements, management letter and other relevant
subj ects.
- The independent audit firm is expected to meet at least once each year with the
Investment Advisory Board to discuss the City financial statements as they relate to cash
and investments and discuss any internal control weaknesses with the Board.
- The independent audit firm is expected to keep the City and Agency staff abreast of
new developments affecting municipal finance and reporting, impact on accounting and
reporting should the State of California impose state -mandated procedures, impacts of
Government Accounting Standards Board disclosure requirements, required changes in
grant procedures and the like.
- The City expects that the professional staff provided by the independent audit firm will
be fully qualified with the appropriate experience, and that answers and guidance given
will be provided by partner/manager (supervisor and above) not seniors and juniors.
Included in the fee proposal shall be an additional 40 hours of partner/manager time
budgeted for research and assistance to City and Agency staff concerning accounting
and other technical matters each year. The topic areas might include tax questions,
the review of bond documents, cost allocation programs, employee benefit programs
and cash flow projections. It must be understood that these hours are above and
beyond the professional times associated with the audit.
EVALUATION AND SELECTION PROCESS
Prior to submission deadline questions may be directed to:
John M. Falconer
Finance Director
City of La Quinta
P.O. Box 1504
La Quinta, CA 92253
(760)777-7150
Proposer must submit five copies of the audit proposal to the City of La Quinta Finance
Department in two sealed envelopes, with one envelope containing costs of the proposed
audit services and the other technical data. Deadline for submission is 5:00 p.m. April
119 2002.
The evaluation process consists of the following steps:
1. The proposals will be evaluated and rated by a selection committee consisting
of two Council members and two Finance staff members based on the
technical qualifications and approach of the proposer. Final proposals will be
selected from those organizations and ranked based on their technical
qualifications, approach and price score.
2. The finalists may be required to make an oral presentation to staff and the City
Council.
Selection of the successful proposal will be at the sole discretion of the City Council and
Agency Board.
It is expected the City Council and Agency will conduct its review and make a selection
on or before May 7, 2002.
THE CITY COUNCIL REQUESTS THAT ONCE PROPOSALS HAVE
BEENSUBMITTED, NO UNSOLICITED CONTACT OR DISCUSSIONS
CONCERNING THESE PROPOSALS BE MADE PRIOR TO THE
EVALUATION OF ALL PROPOSALS.
QUALIFICATIONS AND APPROACH
As stated in the evaluation process, the proposal will first be examined relative to their
technical qualifications and approach to the audit. Each organization's proposal should
include at a minimum, the following information as is deemed necessary: (please number
each item as listed below)
1) Names and qualifications of the specific individuals who would be assigned to
this audit engagement. Please outline their relevant education and government
auditing experience.
2) Description of any specialized skills, training, or background in public finance
that members of the engagement team possess.
3) Description of experience of assigned individuals in auditing relevant agencies
such as Redevelopment Agencies.
4) Description of engagement team's experience in auditing and reviewing financial
statements receiving GFOA and CSMFO awards.
5) List of all current and former municipal audit clients, within 5 years, including
Redevelopment Agencies in the Southern California area indicating reference,
type(s) of services preformed, dates and length of service for each.
6) Description of local office's workplan and deliverable report. The proposal
should include types of audit programs, use of statistical and additional
components of the audit report.
7) The City has a P.C. base file server LAN utilizing Novell 4.1 operating software.
The City uses Mirasoft's ForFund 3.1 software, which runs on Windows as most
of the City software does. Describe your firm's data processing experience and
capabilities.
8) Description of engagement team's experience and capabilities to assist in
governmental bond reporting.
9) Sample of type of management letter usually issued.
10) Description of any regulatory action taken against your organization or local
office.
11) Indicate the location of the office in which the audit team will be based. The
municipal audit experience referenced in item 5 must come from the office.
12) A list of clients which have complied with Government Accounting Standards
Board 34.
FEES
It is the City's and Agency's normal policy to solicit bids for audit services no less that
once every five years, subject to annual review. Accordingly, your proposal should
encompass the five-year time span.
The City and Agency request a statement of maximum cost be made for the annual audit
as set forth in AUDIT EXPECTATIONS and REPORTS and CONSIDERATIONS to
include, in addition to "normal audit requirements," up to 40 hours each year of
partner/manager time answering accounting questions raised by the City and Agency.
All other expenses including typing, clerical, printing services, travel mileage and
miscellaneous expenses should be included in the total audit fee.
The City requests that the proposal also include a schedule of rates by professional staff
classifications. The schedule should reflect rates for audit services and for consulting
services. It should also reflect the anticipated distribution of hours per staff
classification.
Please itemize fees for the City, Agency, Financing Authority, and partner/manager
hours. The maximum annual fee will remain fixed for the five years covered by the audit
engagement agreement. Below is listed the cost of the City's audit for the last year:
2000-01
Audit of all funds and account groups of the City,
including preparation and word processing of
City financial statements, single audit, and
Issuance of management letter. $15,786
Financial and compliance audit of the
Redevelopment Agency. $16,831
Audit work associated with the
Financing Authority. $ 1,953
Total Fee 34 560
INSURANCE
Before signing a contract or commencing work on this project, the contractor shall
provide that the following insurance requirements are in place. Please indicate if your
firm would be able to provide proof of the below City insurance requirement.
a. Worker's Compensation as required by law.
b. Professional Liability in the amount of $1,000,000.
Each policy of insurance required by this section shall provide for no less than 30 days
advance notice to the City prior to cancellation. Each policy shall be endorsed to waive
all right of subrogation against the City of La Quinta by reason of any payment made for
claims under the above coverage.
Oua
OTHER INFORMATION
Please list any other pertinent information you would like the City/Agency to consider in
making our selection.
We encourage you, if interested, to contact Ms. Amy Swan -Draper, Accounting Manager
to obtain additional data, which would enable you to evaluate the scope of your
operations so that you may formulate a proposal. Any financial information you may
need to review is available in the Finance Department.
CITY OF LA QUINTA
The City of La Quinta encompasses approximately 31 square miles, has a residential
population of slightly more than 26,000 and is located in the Coachella Valley
approximately 25 miles east of Palm Springs, CA.
Incorporated in 1982, governed by a Charter, the City is operated under a City
Council/City Manager form of government. Four City Council members are elected at
large to serve four-year terms. The Mayor is elected, serving a two-year term to be the
City Council administrative head. The Mayor/City Council also serve as Agency
members.
The City and Agency have automated much of the finance and budget activities and have
been in place in several years. This department currently consists of -
Finance Director
John Falconer
Accounting Manager
Amy Swan -Draper
Financial Services Asst.
Diane Martin
Account Technician
Sharon Christiansen
Account Technician
Patsy Parker
Account Clerk
Missy Mendoza
Secretary
Vianka Orrantia
The City contracts for some services to its residents and businesses including police, fire
and refuse disposal. As of June 30, 2001, City employment totaled approximately 72
employees.
Enclosed are copies of the City's and Agency's audited financial statements for the 2000-
01 fiscal year.
Ui.0
ATTACHMENT 2
CONTRACT SERVICES
AGREEMENT
THIS AGREEMENT FOR CONTRACT SERVICES (the "Agreement"), is made and
entered into by and between the CITY OF LA QUINTA, (the "City"), a California
municipal corporation, and , Certified Public
Accountants (the "Contractor"). The parties hereto agree as follows:
1.0 SERVICES OF CONTRACTOR
1.1 Scope of Services. In compliance with all terms and conditions of
this Agreement, the Contractor shall provide those services related to Executive
Recruitment for Finance Director, as specified in the "Scope of Services" attached
hereto as Exhibit "A" and incorporated herein by this reference (the "services" or
"work"). Contractor warrants that all services will be performed in a competent,
professional and satisfactory manner in accordance with the standards prevalent in the
industry for such services.
1.2 Contractor's Proposal. The Scope of Services shall include the
Contractor's proposal or bid, if any, which shall be incorporated herein by this
reference as though fully set forth herein. In the event of any inconsistency between
the terms of such proposal and this Agreement, the terms of this Agreement shall
govern.
1.3 Compliance with Law. All services rendered hereunder shall be
provided in accordance with all ordinances, resolutions, statutes, rules, regulations and
laws of the City of La Quinta and any Federal, State or local governmental agency of
competent jurisdiction.
1.4 Licenses, Permits, Fees and Assessments. Contractor shall obtain
at its sole cost and expense such licenses, permits and approvals as may be required
by law for the performance of the services required by this Agreement. Contractor
shall have the sole obligation to pay for any fees, assessments and taxes, plus
applicable penalties and interest, which may be imposed by law and arise from or are
necessary for the performance of the services required by this Agreement.
1.5 Familiarity with Work. By executing this Agreement, Contractor
warrants that (a) it has thoroughly investigated and considered the work to be
performed, (b) it has investigated the site of the work and fully acquainted itself with
the conditions there existing, (c) it has carefully considered how the work should be
performed, and (d) it fully understands the facilities, difficulties and restrictions
1
attending performance of the work under this Agreement. Should the Contractor
discover any latent or unknown conditions materially differing from those inherent in
the work or as represented by the City, it shall immediately inform City of such fact
and shall not proceed except at Contractor's risk until written instructions are received
from the Contract Officer (as defined in Section 4.2 hereof) .
1.6 Care of Work. The Contractor shall adopt reasonable methods
during the life of the Agreement to furnish continuous protection to the work, and the
equipment, materials, papers and other components thereof to prevent losses or
damages, and shall be responsible for all such damages, to persons or property, until
acceptance of the work by City, except such losses or damages as may be caused by
City's own negligence. The performance of services by Contractor shall not relieve
Contractor from any obligation to correct any incomplete, inaccurate or detective work
at no further cost to the City, when such inaccuracies are due to the negligence of
Contractor.
1.7 Additional Services. In accordance with the terms and conditions
of this Agreement, the Contractor shall perform services in addition to those specified
in the Scope of Services (Exhibit "A") when directed in writing to do so by the
Contract Officer, provided that Contractor shall not be required to perform any
additional services without compensation. Any addition in compensation not
exceeding five percent (5%) of the Contract Sum may be approved by the Contract
Officer. Any greater increase must be approved by the City Council.
1.8 Special Requirements. Additional terms and conditions of this
Agreement, if any, which are made a part hereof are set forth in the "Special
Requirements" attached hereto as Exhibit "B" and incorporated herein by this
reference. In the event of a conflict between the provisions of Exhibit "B" and any
other provisions of this Agreement, the provisions of Exhibit "B" shall govern.
2.0 COMPENSATION
2.1 Contract Sum. For the services rendered pursuant to this
Agreement, the Contractor shall be compensated in accordance with the "Schedule of
Compensation" attached hereto as Exhibit "C" and incorporated herein by this
reference, but not exceeding the maximum contract amount as follows: Fiscal Year
2001 /02 $ , Fiscal Year 2002/03 $ , Fiscal Year 2003/04 $ , Fiscal
Year 2004/05 $ , and Fiscal Year 2005/06 $ , except as provided in Section
1.7. The method of compensation set forth in the Schedule of Compensation may
include a lump sum payment upon completion, payment in accordance with the
percentage of completion of the services, payment for time and materials based upon
the Contractor's rates as specified in Exhibit "C but not exceeding the Contract Sum,
2
or such other methods as may be specified in the Schedule of Compensation (Exhibit
"C"). Compensation may include reimbursement for actual and necessary expenditures
for reproduction costs, transportation expense, telephone expense, premiums for
bonds and insurance, and similar costs and expenses when and if specified in the
Schedule of Compensation (Exhibit "C").
2.2 Method of Payment. Any month in which Contractor wishes to
receive payment, Contractor shall submit to the City no later than the tenth (10th)
working day of such month, in the form approved by the City's Finance Director, an
invoice for services rendered prior to the date of the invoice. Such invoice shall
(1) describe in detail the services provided, including time and materials, (2) specify
each staff member who has provided services and the number of hours assigned to
each such staff member, and (3) indicate the total expenditures to date. Such invoice
shall contain a certification by a principal member of Contractor specifying that the
payment requested is for work performed in accordance with the terms of this
Agreement. City will pay Contractor for all expenses stated thereon which are
approved by City pursuant to this Agreement no later than the last working day of the
month.
3.0 PERFORMANCE SCHEDULE
3.1 Time of Essence. Time is of the essence in the performance of
this Agreement.
3.2 Schedule of Performance. All services rendered pursuant to this
Agreement shall be performed diligently and within the time period established in the
"Schedule of Performance" attached hereto as Exhibit "D" and incorporated herein by
this reference. Extensions to the time period specified in the Schedule of Performance
may be approved in writing by the Contract Officer.
3.3 Force Majeure. The time period specified in the Schedule of
Performance (Exhibit "D") for performance of the services rendered pursuant to this
Agreement shall be extended because of any delays due to unforeseeable causes
beyond the control and without the fault or negligence of the Contractor, including, but
not restricted to, acts of God or of the public enemy, fires, earthquakes, floods,
epidemic, quarantine restrictions, riots, strikes, freight embargoes, acts of any
governmental agency other than City, and unusually severe weather, if the Contractor
shall within ten (10) days of the commencement of such delay notify the Contracting
Officer in writing of the causes of the delay. The Contracting Officer shall ascertain
the facts and the extent of delay, and extend the time for performing the services for
the period of the forced delay when and if in his judgment such delay is justified, and
the Contracting Officer's determination shall be final and conclusive upon the parties
to this Agreement.
3
3.4 Term. Unless earlier terminated in accordance with Section 7.8 of
this Agreement, this Agreement shall continue in full force and effect until completion
of the services, except as otherwise provided in the Schedule of Performance (Exhibit
11 D11).
4.0 COORDINATION OF WORK
4.1 Representative of Contractor. The following principals of
Contractor are hereby designated as being the principals and representatives of
Contractor authorized to act in its behalf with respect to the work specified herein and
make all decisions in connection therewith:
a.
b.
c.
It is expressly understood that the experience, knowledge, capability and
reputation of the foregoing principals were a substantial inducement for City to enter
into his Agreement. Therefore, the foregoing principals shall be responsible during the
term of this Agreement for directing all activities of Contractor and devoting sufficient
time to personally supervise the services hereunder. The foregoing principals may not
be changed by Contractor and no other personnel may be assigned to perform the
service required hereunder without the express written approval of City.
4.2 Contract Officer. The Contract Officer shall be the Finance
Director or such other person as may be designated by the City Manager of City. It
shall be the Contractor's responsibility to assure that the Contract Officer is kept
informed of the progress of the performance of the services and the Contractor shall
refer any decisions which must be made by City to the Contract Officer. Unless
otherwise specified herein, any approval of City required hereunder shall mean the
approval of the Contract Officer.
4.3 Prohibition Against Subcontracting or Assignment. The
experience, knowledge, capability and reputation of Contractor, its principals and
employees were a substantial inducement for the City to enter into this Agreement.
Therefore, Contractor shall not contract with any other entity to perform in whole or
in part the services required hereunder without the express written approval of the
City. In addition, neither this Agreement nor any interest herein may be assigned or
transferred, voluntarily or by operation of law, without the prior written approval of
City.
4
014
4.4 Independent Contractor. Neither the City nor any of its employees
shall have any control over the manner, mode or means by which Contractor, its
agents or employees, perform the services required herein, except as otherwise set
forth. Contractor shall perform all services required herein as an independent
contractor of City and shall remain at all times as to City a wholly independent
contractor with only such obligations as are consistent with that role. Contractor shall
not at any time or in any manner represent that it or any of its agents or employees
are agents or employees of City.
4.5 City Cooperation. The City shall provide Contractor with any
plans, publications, reports, statistics, records or other data or Information pertinent
to services to be performed hereunder which are reasonably available to the City. The
City shall additionally provide Contractor staff assistance and shall take prompt and
appropriate action when it will assist in ensuring and timely performance by Contractor
hereunder.
5.0 INSURANCE, INDEMNIFICATION AND BONDS.
5.1 Insurance. The Contractor shall procure and maintain, at its cost,
and submit concurrently with its execution of this Agreement, public liability and
property damage insurance against all claims for injuries against persons or damages
to property resulting from Contractor's acts or omissions rising out of or related to
Contractor's performance under this Agreement. The insurance policy shall contain
a severability of interest clause providing that the coverage shall be primary for losses
arising out of Contractor's performance hereunder and neither the City nor its insurers
shall be required to contribute to any such loss. A certificate evidencing the foregoing
and naming the City and its officers and employees as additional insured shall be
delivered to and approved by the City prior to commencement of the services
hereunder. The amount of insurance required hereunder shall be determined by the
Contract Sum in accordance with the following table:
Contract Sum
Less than $50,000
$ 5 0, 000 - $ 300, 000
Over $ 300, 000
Coverage (personal injury/
property damage)
$100,000 per individual; $300,000 per occurrence
$250,000 per individual; $500,000 per occurrence
$500,000 per individual; $1,000,000 per occurrence
5 _
The Contractor shall also carry automobile liability insurance of $1,000,000 per
accident against all claims for injuries against persons or damages to property arising
out of the use of any automobile by the Contractor, its officers, any directly or
indirectly employed by the Contractor, any subcontractor, and agents or anyone for
whose acts any of them may be liable, arising directly or indirectly out of or related to
Contractor's performance under this Agreement. The term "automobile" includes, but
is not limited to, a land motor vehicle, trailer or semi -trailer designed for travel on
public roads. The automobile insurance policy shall contain a severability of interest
clause providing that coverage shall be primary for losses arising out of Contractor's
performance hereunder and neither the City nor its insurers shall be required to
contribute to such loss. A certificate evidencing the foregoing and naming the City
and its officers and employees as additional insured shall be delivered to and approved
by the City prior to commencement of the services hereunder.
Contractor shall also carry Workers' Compensation Insurance in accordance with
State Workers' Compensation laws.
The Contractor shall procure professional errors and omissions liability insurance
in the amount of $1,000,000.
All insurance required by this Section shall be kept in effect during the term of
this Agreement and shall not be cancelable without thirty (30) days' written notice of
proposed cancellation to City. The procuring of such insurance or the delivery of
policies or certificates evidencing the same shall not be construed as a limitation of
Contractor's obligation to indemnify the City, its officers, employees, contractors,
subcontractors or agents.
5.2 Indemnification. The Contractor shall defend, indemnify and hold
harmless the City, its officers, officials, employees, representatives and agents, from
and against any and all actions, suits, proceedings, claims, demands, losses, costs,
and expenses, including legal costs and attorneys' fees, for injury to or death of
person(s), for damage to property (including property owned by the City) and for errors
and omissions committed by Contractor, its officers, anyone directly or indirectly
employed by Contractor, any subcontractor, and agents or anyone for whose acts any
of them may be liable, arising directly or indirectly out of or related to Contractor's
performance under this Agreement, except to the extent of such loss as may be
caused by City's own active negligence, sole negligence or willful misconduct, or that
of its officers or employees.
m
UIG
5.3 Remedies. In addition to any other remedies the City may have if
Contractor fails to provide or maintain any insurance policies or policy endorsements
to the extent and within the time herein required, the City may, at its sole option:
a. Obtain such insurance and deduct and retain the amount of the premiums
for such insurance from any sums due under this Agreement.
b. Order the Contractor to stop work under this Agreement and/or withhold
any payment(s) which become due to Contractor hereunder until
Contractor demonstrates compliance with the requirements hereof.
C. Terminate this Agreement.
Exercise of any of the above remedies, however, is an alternative to any
other remedies the City may have and are not the exclusive remedies for Contractor's
failure to maintain or secure appropriate policies or endorsements. Nothing herein
contained shall be construed as limiting in any way the extent to which Contractor
may be held responsible for payments of damages to persons or property resulting
from Contractor's or its subcontractors' performance of work under this Agreement.
6.0 RECORDS AND REPORTS.
6.1 Reports. Contractor shall periodically prepare and submit to the
Contract Officer such reports concerning the performance of the services required by
this Agreement as the Contract Officer shall require.
6.2 Records. Contractor shall keep such books and records as shall be
necessary to perform the services required by this Agreement and enable the Contract
Officer to evaluate the cost and the performance of such services. Books and records
pertaining to costs shall be kept and prepared in accordance with generally accepted
accounting principles. The Contract Officer shall have full and free access to such
books and records at all reasonable times, including the right to inspect, copy, audit
and make records and transcripts from such records.
6.3 Ownership of Documents. Originals of all drawings, specifications,
reports, records, documents and other materials, whether in hard copy or electronic
form, which are prepared by Contractor, its employees, subcontractors and agents in
the performance of this Agreement, shall be the property of City and shall be delivered
to City upon the termination of this Agreement or upon the earlier request of the
Contract Officer, and Contractor shall have no claim for further employment or
additional compensation as a result of the exercise by City of its full rights of
ownership of the documents and materials hereunder. Contractor may retain copies
7
of such documents for its own use. Contractor shall have an unrestricted right to use
the concepts embodied herein. Contractor shall cause all subcontractors to assign to
City any documents or materials prepared by them, and in the event Contractor fails
to secure such assignment, Contractor shall indemnify City for all damages suffered
thereby. See Exception Exhibit "E" .
6.4 Release of Documents. The drawings, specifications, reports,
records, documents and other materials prepared by Contractor in the performance of
services under this Agreement shall not be released publicly without the prior written
approval of the Contract Officer or as required by law. Contractor shall not disclose
to any other private entity or person any information regarding the activities of the
City, except as required by law or as authorized by the City.
7.0 ENFORCEMENT OF AGREEMENT.
7.1 California Law. This Agreement shall be construed and interpreted
both as to validity and to performance of the parties in accordance with the laws of
the State of California. Legal actions concerning any dispute, claim or matter arising
out of or in relation to this Agreement shall be instituted in the Superior Court of the
County of Riverside, State of California, or any other appropriate court in such county,
and Contractor covenants and agrees to submit to the personal jurisdiction of such
court in the event of such action.
7.2 Disputes. In the event of any dispute arising under this
Agreement, the injured party shall notify the injuring party in writing of its contentions
by submitting a claim therefor. The injured party shall continue performing its
obligations hereunder so long as the injuring party commences to cure such default
within ten (10) days of service of such notice and completes the cure of such default
within forty-five (45) days after service of the notice, or such longer period as may be
permitted by the Contract Officer; provided that if the default is an immediate danger
to the health, safety and general welfare, the City may take such immediate action as
the City deems warranted. Compliance with the provisions of this Section shall be a
condition precedent to termination of this Agreement for cause and to any legal action,
and such compliance shall not be a waiver of any party's right to take legal action in
the event that the dispute is not cured, provided that nothing herein shall limit City's
right to terminate this Agreement without cause pursuant to Section 7.8.
7.3 Retention of Funds. City may withhold from any monies payable
to Contractor sufficient funds to compensate City for any losses, costs, liabilities or
damages it reasonably believes were suffered by City due to the default of Contractor
in the performance of the services required by this Agreement.
7.4 Waiver. No delay or omission in the exercise of any right or
remedy of a non -defaulting party on any default shall impair such right or remedy or
be construed as a waiver. City's consent or approval of any act by Contractor
requiring City's consent or approval shall not be deemed to waive or render
unnecessary City's consent to or approval of any subsequent act of Contractor. Any
waiver by either party of any default must be in writing and shall not be a waiver of
any other default concerning the same or any other provision of this Agreement.
7.5 Rights and Remedies are Cumulative. Except with respect to rights
and remedies expressly declared to be exclusive in this Agreement, the rights and
remedies of the parties are cumulative and the exercise by either party of one or more
of such rights or remedies shall not preclude the exercise by it, at the same or different
times, of any other rights or remedies for the same default or any other default by the
other party.
7.6 Legal Action. In addition to any other rights or remedies, either
party may take legal action, at law or at equity, to cure, correct or remedy any default,
to recover damages for any default, to compel specific performance of this Agreement,
to obtain injunctive relief, or to obtain any other remedy consistent with the purposes
of this Agreement.
7.7 Termination Prior To Expiration Of Term. This Section shall govern
any termination of this Agreement, except as specifically provided in the following
Section 7.9 for termination for cause. The City reserves the right to terminate this
Agreement at any time, with or without cause, upon thirty (30) days' written notice
to Contractor. Upon receipt of any notice of termination, Contractor shall immediately
cease all services hereunder except such as may be specifically approved by the
Contract Officer. Contractor shall be entitled to compensation for all services rendered
prior to receipt of the notice of termination and for any services authorized by the
Contract Officer thereafter in accordance with the Schedule of Compensation (Exhibit
"C") or such as may be approved by the Contract Officer, except as provided in
Section 7.3.
7.8 Termination For Default Of Contractor. If termination is due to the
failure of the Contractor to fulfill its obligations under this Agreement, City may, after
compliance with the provisions of Section 7.2, take over the work and prosecute the
same to completion by contract or otherwise, and the Contractor shall be liable to the
extent that the total cost for completion of the services required hereunder exceeds
the compensation herein stipulated (provided that the City shall use reasonable
efforts to mitigate such damages), and City may withhold any payments to the
Contractor for the purpose of setoff or partial payment of the amounts owed the City
as previously stated in Section 7.3.
7.9 Attorneys' Fees. If either party commences an action against the
9 A
other party arising out of or in connection with this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees and costs of suit from the losing
party.
8.0 CITY OFFICERS AND EMPLOYEES; NON-DISCRIMINATION.
8.1 Non -liability of City Officers and Employees. No officer or
employee of the City shall be personally liable to the Contractor, or any successor in
interest, in the event of any default or breach by the City or for any amount which may
become due to the Contractor or to its successor, or for breach of any obligation of
the terms of this Agreement.
8.2 Conflict of Interest. No officer or employee of the City shall have
any personal interest, direct or indirect, in this Agreement nor shall any such officer
or employee participate in any decision relating to the Agreement which effects his
personal interest or the interest of any corporation, partnership or association in which
e is, directly or indirectly, interested, in violation of any State statute or regulation.
The Contractor warrants that it has not paid or given and will not pay or give any third
party any money or other consideration for obtaining this Agreement.
8.3 Covenant against Discrimination. Contractor covenants that, by
and for itself, its heirs, executors, assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of, any person or
group of persons on account of race, color, creed, religion, sex, marital status, national
origin, disability or ancestry in the performance of this Agreement. Contractor shall
take affirmative action to insure that applicants are employed and that employees are
treated during employment without regard to their race, color, creed, religion, sex,
marital status, national origin, physical disability, mental disability, medical condition,
age or ancestry.
9.0 MISCELLANEOUS PROVISIONS
9.1 Notice. Any notice, demand, request, consent, approval,
communication either party desires or is required to give to the other party or any other
person shall be in writing and either served personally or sent by prepaid, first-class
mail to the address set forth below. Either party may change its address by notifying
the other party of the change of address in writing. Notice shall be deemed
communicated forty-eight (48) hours from the time of mailing if mailed as provided in
this Section 9.1.
10
To City:
CITY OF LA QUINTA
78-495 Calle Tampico
La Quinta, California 92253
Attention: Thomas P. Genovese, City Manager
To Contractor:
9.2 Integrated Agreement. This Agreement contains all of the
agreements of the parties and all previous understandings, negotiations and
agreements are integrated into and superseded by this Agreement.
9.3 Amendment. This Agreement may be amended at any time by the
mutual consent of the parties by an instrument in writing signed by both parties.
9.4 Severability. In the event that any one or more of the phrases,
sentences, clauses, paragraphs, or sections contained in this Agreement shall be
declared invalid or unenforceable by a valid judgment or decree of a court of
competent jurisdiction, such invalidity or unenforceability shall not effect any of the
remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement
which are hereby declared as severable and shall be interpreted to carry out the intent
of the parties hereunder.
9.5 Authority. The persons executing this Agreement on behalf of the
parties hereto warrant that they are duly authorized to execute this Agreement on
behalf of said parties and that by so executing this Agreement the parties hereto are
formally bound to the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the dates stated below.
Dated:
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
Dated:
Name:
Title:
CITY OF LA QUINTA, a California municipal
corporation
as
City Manager
"CITY"
"CONTRACTOR"
12 0 4. 2
EXHIBIT "A"
SCOPE OF SERVICES
1. Contractor will perform an audit examination of all fund types and account
groups of the City of La Quinta for five fiscal years commencing with the fiscal
year ended June 30, 2002 and ending June 30, 2006. Contractor's
examination will be conducted in accordance with generally accepted
governmental auditing standards. Contractor will render its opinion on the
general purpose financial statements and supplemental data of the City.
Contractor will prepare the GPFS and supplemental data and provide 70 copies
of the report no later than November 20th of each year.
2. Beginning with the fiscal year ending June 30, 2002, Contractor will perform
a "single audit" of the City of La Quinta in accordance with Public Law 98-502,
"The Single Audit Act of 1984". Additionally, Contractor will conduct its single
audit in accordance with the provisions of OMB Circular A-133. Contractor's
single audit will cover all federal grants received by the City of La Quinta either
as a primary or secondary recipient and provide 12 copies no later than
November 20th of each year.
Contractor will render auditors' reports on (1) the supplemental schedule of
federal expenditures, (2) internal control structure matters in accordance with
Government Auditing Standards, (3) upon internal controls (accounting and
administrative) required by the Single Audit Act, (4) compliance with laws and
regulations in accordance with Government Auditing Standards, (5) compliance
with laws and regulations related to non -major Federal Financial Assistance
Programs, (6) on compliance with General Requirements and (7) compliance
with Specific Requirements Applicable to Major Programs.
3. Contractor will prepare a separate management letter, if required, to report
material weaknesses in internal controls for distribution to the City Council.
4. Contractor will perform a financial and compliance audit of the La Quinta
Redevelopment Agency initially for the year ended June 30, 2002 and ending
June 30, 2006. Contractor will provide 50 copies of each of the reports by
November 20th of each year. Contractor's compliance audit of the
Redevelopment Agency will conform to requirements of "Guidelines for
Compliance Audits of California Redevelopment Agencies" issued by the State
Controller's office.
5. Contractor will prepare a separate letter to report constructive comments
relating to internal control structure and compliance. Contractor will discuss
those comments with the Finance Director and issue a separate letter to the
13
()`-3
City Manager and Finance Director. These constructive comments relating to
internal controls do not constitute material weaknesses in internal controls as
discussed in Exhibit A Item 3 as determined by the Contractor.
6. desires to keep its City clients abreast of new
developments affecting local government finance. Contractor would plan to
advise City staff at least annually (perhaps a formal updating session would be
in conjunction with review of management letter comments with City staff).
7. Finally, contractor perceives the scope of their work as being advisors to the
City of La Quinta. Throughout the year, City personnel will have access to the
Engagement Partner, to
seek advice in the application of generally accepted accounting principles, the
establishment and segregation of funds, advice regarding debt issuance,
financial statement preparation and content and other matters relating to the
City, including matters of taxation and policy relating to City fringe benefits.
Contractor agrees to provide up to 40 hours annually of technical support of
their management without charge to the City.
meets the independence requirements of the Government
Auditing Standards 1988 revision published by the U.S. General Accounting Office.
Contractor's firm has never had a record of substandard audit work.
14 ����
EXHIBIT "B"
SPECIAL REQUIREMENTS
[Not Applicable]
15
EXHIBIT "C"
SCHEDULE OF COMPENSATION
The following is a summary of the estimated hours and a breakdown of the
maximum fee (including all out of pocket expenses) for the engagement:
Maximum Not to Exceed Fee
Estimated 2001 /02 2002/02 2003/04 2004/05 2005/06
hours
Audit of all funds and
account groups of the
City (including) single
audit, work processing of
GPFS and supplementary
data)
Financial and compliance
audit of the La Quinta
Redevelopment Agency
Financial audit of the La
Quinta Financing
Authority
Technical consultation
Not to Exceed .Maximum
Classification Hours % Time
Partner -
Technical Review Partner -
Field Supervisor —
Staff Auditors
16 U 0
The above not to exceed fees contemplate conditions satisfactory for completion of
the examinations, including the City providing the auditors with trial balances with
substantially all closing entries completed. Additionally the City agrees to furnish
subsidiary detail of account balances and reconciliation of accounts to the general
ledger. The City will also provide a reconciliation of fund balances to the prior audited
financial statements. Contractor understands that the City will provide maximum
cooperation. Contractor also contemplates that the City will type confirmation
requests. Contractor's staff will locate supporting documentation upon guidance from
City staff. If there are changes in the scope of the audit, i.e. additional federal grant
programs, substantial additional debt issuances, refundings, added project areas, etc.,
Contractor would like to discuss these changes with the City Finance Director and the
effect of these changes on professional audit hours and costs of the engagement.
Hourly rates in effect for 2002 for additional services that the City may approve in
writing are as follows by classification and level of experience.
Classification
Partner
Supervisors
Senior Accountant
Staff Accountant
Hourly Rate
The foregoing rate include reimbursement for out of pocket expenses.
17 f
EXHIBIT "D"
SCHEDULE OF PERFORMANCE
All reports due under this Agreement to be delivered by November 20, in the
audit year which is being conducted unless otherwise noticed.
EXHIBIT "E"
OWNERSHIP OF DOCUMENTS
(Exception to 6.3)
Contract officer recognizes that audit working papers are property of the
Contractor; however, Contractor agrees to maintain the working papers for three (3)
years subsequent to the audit. Contractor also agrees to allow review of working
papers at no expense to the City.
EXHIBIT "A
EXHIBIT "B
EXHIBIT "C
EXHIBIT "D
F
0 0
INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
March 13, 2002
Consideration of Fiscal Year 2002/03
Investment Policies
BACKGROUND:
Business Session: B
At last months meeting the Board asked for staffs opinion on any modifications to
the Investment Policy.
With this request in mind and based upon the last couple of months of discussions
by the Board on possible changes Staff has the following comments:
♦ Investing in Medium Term Notes - The current policy does not permit this
type of investment. Staff is not opposed to this type of investment;
however, parameters should be narrowly defined to credit rating, length of
maturity and maximum amount invested per institution.
♦ Extending the two-year maximum maturity limitation - Staff has reviewed its
cash flow needs and has identified up to $10 million that could be invested
beyond the current two-year limitation.
In addition, Staff has attached the current investment policy and various articles
received relating to investments, which were requested at the last Board meeting.
RECOMMENDATION:
Continued review of the Investment policies for approval by City Council in June
2002.
l
A,
JohMM. Falconer Finance Director
Page 11 of 16
UBS PaineWebber Inc.
AGENCY MARKET
• While there is no disputing the fact that the GSE
balance sheets have expanded materially in recent
years, it is our opinion that the GSEs are still poised
for continued strong long-term performance.
• Certainly, the legislative risk exposure of the GSEs
has risen in recent years now that Congress and the
administration are looking more closely at the GSEs'
business activities.
• However, it remains our view that the October 2000
voluntary reform agreement has 1) significantly
reduced the threat that Congress will move to
alter/repeal the GSE charters and 2) enhances the
investing public's comfort with holding GSE debt.
• Agency spreads have remained within exceptionally
tight ranges over the past fortnight versus the treasury
curve. Trading versus the swap curve is an entirely
different matter altogether. Ten and 30-year agencies
cheapened between 4-6 basis points versus similar
maturity swaps over the past two weeks, placing both
sectors on the cheap side of the past three-month
trading range.
Relative value versus treasuries is not particularly
compelling —especially with the prospects for another
wave of mortgage refinancing activity and/or another
potential disturbance in credit market conditions. As a
result, we opt to retain a modest overweight versus
treasuries this week and only a neutral weighting
versus the aggregate index.
UNWANTED ATTENTION
In the wake of last Fall's Enron fiasco, financial market
participants have rightly taken to holding corporate
America to a higher level of accountability. The financial
press has joined the chorus of those focusing more heavily
on issues of corporate governance and the integrity of
reported earnings. Some comparisons being made
recently, however, strike us as somewhat exaggerated.
Take, for instance, the media's attempt to somehow
generically link the trading losses at Allied Irish Bank
together with the Enron scandal and bankruptcy of Global
Crossings. The media is also looking more closely at
Fannie Mae and Freddie Mac —companies which are
constantly under the microscope of public opinion because
of their high debt levels, use of leverage and special status
as government -sponsored enterprises. Last week, the
Wall Street Journal published another indictment against
the GSE's business practices and balance sheet growth in
its editorial section. But in this latest installment, the
editorial explicitly associated the GSEs to the bankrupt
and universally ostracized Enron Corp. (See "Fannie Mae
Enron?", Wall Street Journal, February 20, 2002, p. A22.)
THE OTHER SIDE
The thrust of the article —reminiscent of prior WSJ
commentaries on the GSEs—suggested that interest rate
risk, credit exposure, ballooning debt levels and use of
derivatives strategies could one day topple the GSEs and
leave the American taxpayer holding the tab. In the
closing line the editor suggests that, "maybe this time
Congress should hold hearings before things go wrong"
(italics added for emphasis). Like several other points in
the article that were either factually incorrect or
misleading, this statement disguises the fact that the
GSEs have been and continue to be a regular subject of
scrutiny at Congressional hearings. Lobbying groups like
FM Watch, the political watchdog of Fannie Mae and
Freddie Mac, have had an interested audience in
Representative Richard Baker (R, LA), chairman of the
House subcommittee on Capital Markets, Insurance, and
Government -Sponsored Enterprises. And as recently as
October 2000, Baker's subcommittee reached a voluntary
reform agreement with the GSEs to increase
accountability and transparency so that systemic risks,
such as the Enron debacle, could be avoided.
REFORM AGREEMENT REHASH
In our view, this reform agreement has significantly
reduced the risk that the GSEs will be targeted for
additional legislation during the current Congressional
session. Moreover, the criteria now provide several
additional advance warning signals in the event of a
severe dislocation in credit markets, and also adds another
layer of protection against the threat of default. A brief
look at the key criteria of this agreement demonstrates a
concerted effort on the part of the GSEs to enhance
transparency and improve risk disclosures:
1. Issuance of Subordinated Debt - The GSEs agreed to
issue a pre-set level of subordinated debt that will roughly
approximate four percent of on -balance sheet assets
following a three-year phase in period. According to
Federal Reserve studies, issuance of subordinated
debentures improves market discipline by raising the cost
of funding for unsafe or unsound financial institutions. Of
course, four percent seems like a paltry sum and may
even overstate the actual protection to senior debt holders.
However, the subordinated notes can also act as a
"canary in the coal mine" in the event that the GSEs are
pushed toward bankruptcy. By monitoring the change in
the senior -subordinated debt spread, financial market
participants can gauge perceptions of credit risk,
irrespective of other market forces. While this spread has
risen since mid -September, levels are still right around the
average of 27 basis points.
2. Liquidity Management - In the event that a sudden
shock to the financial system limits the GSEs' access to
public debt markets, both Fannie Mae and Freddie Mac
will now hold a liquidity reserve sufficient to meet their debt
UU
Page 12 of 16
UBS PaineWebber Inc.
obligations. Both companies have committed to
maintaining a portfolio of high -quality, liquid, non -mortgage
securities, equal to at least.5 percent of total assets. The
two GSEs will also comply with the Basle Committee on
Banking Supervision's principles for sound liquidity
management. These measures are intended to help lower
the GSEs' risk profile during financial market crisis. As of
December 31, 2001 both Fannie Mae's and Freddie Mac's
ratio of liquid assets to total assets were above the 5%
threshold.
3. Risk -Based Capital Stress Test - Until the Office of
Federal Housing Enterprise Oversight (OFHEO) is able to
provide its own risk -based capital stress test in
September, Freddie Mac and Fannie Mae will voluntarily
adopt their own test based upon the parameters set forth
in the Federal Housing Enterprise Financial Safety and
Soundness Act of 1992. The results of these tests will be
publicly disclosed on a quarterly basis, and will serve as a
"bridge" until OFHEO completes final risk -based capital
guidelines. Both GSEs passed their stress tests during
June and September of 2001.
4. Interest Rate and Credit Risk Disclosures - Freddie
Mac and Fannie Mae agreed to publicly disclose sensitivity
analysis on interest rate risk and credit risk. The interest
rate risk metric reflects the impact from both changes in
the general interest rate environment and the shape of the
yield curve. Meanwhile, the credit risk measure is
intended to reflect the potential financial impact that a
sudden sharp (5%) drop in housing prices would have on
GSE balance sheets. Again, both agencies have a record
of conforming to these periodic sensitivity analyses.
5. Annual "Risk to the Government" Credit Rating - S&P
now publishes a rating that is separate and distinct from
the senior debt ratings of Fannie Mae and Freddie Mac.
These new ratings are designed to assess the risk to the
government, by gauging the independent financial strength
of the GSEs. The rating is currently AA- and is the same
as the firms' subordinated debt rating. Were Fannie Mae
and Freddie Mac to face balance sheet difficulties or
negative exogenous shocks, the ratings agencies would
have flexibility to lower these ratings, despite the implicit
ties to the U.S. government.
Bottom Line: While there is no disputing the fact that the
GSE balance sheets have expanded materially in recent
years, it is our opinion that the GSEs are still poised for
continued strong long-term performance. Certainly, the
legislative risk exposure of the GSEs has risen in recent
years now that Congress and the administration are
looking more closely at the GSEs' business activities.
However, it remains our view that the October 2000
voluntary reform agreement has 1) significantly reduced
the threat that Congress will move to alter/repeal the GSE
charters and 2) enhances the investing public's comfort
with holding GSE debt.
MIXED BAG OVER THE PAST TWO WEEKS
Agency spreads have remained within exceptionally tight
ranges over the past fortnight versus the treasury curve
(Table 2). Apart from the 2-, 10- and 30-year sectors,
which finished the period largely unchanged, 5-year
agencies tightened about 2 basis points versus
comparable maturity treasuries. Still, moves versus the
treasury curve were modest at best. A look at Chart 1
shows that the 10-year sector of the agency curve has
remained within an incredibly tight 9 basis point band since
the beginning of the year. While spreads in the 10-year
sector are modestly wider than the richest levels of the
year, no real directional swing has emerged. Rather,
spreads are taking their directional cues more from relative
supply shifts, whimsical changes in the credit environment
and the rumblings in both the WSJ and Washington, DC
regarding the GSEs business practices. Trading versus
the swap curve is an entirely different matter altogether.
Ten and 30-year agencies cheapened between 4-6 basis
points versus similar maturity swaps over the past two
weeks, placing both sectors on the cheap side of the past
three-month trading range (Table 3).
Chart 1
10-Year Agency Spreads
(Basis points)
90
85
80
75
70
65
60
55
50
— N N
O O O O O
0 �
0 a > c
co CU
2 2 (n Z
Source: UBS PaineWebber Fixed Income Strategy.
ISSUANCE NEXUS
Agency supply has moderated slightly over the past few
weeks, but several large bellwether deals have kept
overall issuance well elevated (Chart 2). Last week,
Fannie Mae priced $6 billion of a 3-year Benchmark Note
at +98.5 basis points to the 2-year treasury note. This
pricing follows Freddie Mac's 3-year note sale earlier in the
month. The Fannie Mae deal performed very well and the
notes have since tightened to +96.5 basis points. The
new notes also tightened versus swaps, debuting at
LIBOR —14 basis points and richening to LIBOR —14 by
the end of the week. The week ahead presents something
of a lull for the callable and noncallable bellwether pricings,
however, the two agencies are using the gap as a
convenient opportunity to expand their subordinated notes
issuance (Table 1). Fannie Mae will seek to re -open its
4.75s of January 2007 on Wednesday by between $1.0
and $1.5 billion. Freddie Mac expects to extend further
out on the curve with a new $1.0 to $1.5 billion 10-year
�. U U
Page 13 of 16
UBS PaineWebber Inc.
subordinated note sale. Similar to its prior tranche of
SUBS, Freddie Mac's new issue will have a European call
option after 5-years. Another nexus on the issuance front
concerns the heavy amount of 5-year bellwether issuance
during March. Freddie Mac is slated to announce details
of a 5-year Reference Note on Thursday for pricing on
March 7. We're looking for $5-6 billion of a new 5-year
note this month from Freddie Mac —now that the current
on -the -runs are eight months old and have already been
reopened once. Fannie Mae, which is also scheduled to
sell 5-year notes this month (as well as a 10-year tranche)
will announce details on March 18. We expect Fannie
Mae will opt for a reopening of both the 5- and 10-year
maturities this month.
Chart 2
Agency New Issuance
(Billions of U.S. dollars, excluding discount note issuance)
35
30
25
20
15
10
5
0
�— e— e— �— N N N
Q 4 4 4 4 4 Q O O O
cca a)M c0 N 7 d U O N N 0
Source: UBS PaineWebber Fixed Income Strategy Group.
Table 1
GSE Subordinated Debt Program
Fannie Mae 02/01/01 02/01/11 6.250% 2.5 bn
Fannie Mae
05/08/01
05/02/06
5.500%
1.5
Fannie Mae
12/07/01
01/02/07
4.750%
1.0
Total
5.0 bn
Freddie Mac
03/21/01
03/21/11
5.875%
2.0
Freddie Mac
08/01/01
08/01/11
6.375%
1.0
Total
I
1
1 3.0 bn
Source: Fannie Mae and Freddie Mac.
THE WEEK AHEAD
As we wrote in detail in the Overview section, credit
market participants will likely focus primarily upon the
heavy economic release calendar this week ,and Chairman
Greenspan's semi-annual monetary policy testimony to
Congress on Wednesday. In addition, the agency market
will continue to take direction from the evolving credit
environment, particularly in the wake of last week's
scathing WSJ article on the GSEs. Admittedly,
agency/treasury spreads have moved off the lows of the
past three months as a result of the souring credit
conditions. And considering that agencies are still rather
rich when measured against levels witnessed back in mid-
2000, there is certainly room for additional spread
widening if agencies were to become swept up in a more
widespread erosion of credit conditions. However, we
reiterate our view that the GSEs are still largely insulated
from further Congressional oversight and will likely emerge
unscathed when this Darwinian corporate weeding out
process finally passes. Relative value versus treasuries is
not particularly compelling —especially with the prospects
for another wave of mortgage refinancing activity and/or
another potential disturbance in credit market conditions.
As a result, we opt to retain a modest overweight versus
treasuries this week and only a neutral weighting versus
the aggregate index.
. uv4
FEB-226-22002 09:15
P.01
Facsimile Cover Sheet
. 4 0. M Le. 0
Company: - "or
Phone:
Fag: _..._ ',-� -1 `7 1- 1
From: Cyrdle P. Mahfoud
Financial Consultant
Company:A. Gic
Phone; (760) 340-0650 or (800) 243-0650
Fax., (760) 341-6638
Date: I P ilo
Total # of pages: �..
Comments:
73-993 Ifighwuy I11, Suite #100
Palm Desert, California 92260
(760) 340-0650
(800) 243�0650
fax (760) 341-6638
This f kmirmle cmWns privileged and confidential information intended only for the use of the individual or entity named above. if
the reader of the fbcaitmle is not the intended recipient or the employee or agent responsible for delivering it to the intended recipient,
you are hereby notified that any dissemination or copying of this facsimile is strictly prohibited. If you Mve received ibis facsimile in
error, p1we irnmediocly notify us by trkphone and rctum the original fi csimsle to us at the above address via the I_Tnitcd RAMS
Postal Seiviec. Thank you.
IF YOU AID NOT RFCBIVA ALL, THE PAGES, PLEASE CALL AS SOON AS POSSIBLE.
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FEB-26-2002 09:15
P.02
Bond Market Watch
A MONTHLY FIXED -INCOME STRATEGY GUIDE • FFBRUARY 15, 2002
'VITH BOND
FINDAMENTA .S
O1 TERIORATING.
WE CONTnvuE
TOLOOK FOR'
YIELDS TO
MOVE HIGHER
OVER THE .
BALANCE
OF THE YEAR."
Not If, But When
he Federal Reserves decision to
leave the target federal funds rate
unchanged on Jan. 30 was
widely anticipated but still important for
several reasons. It was the first scheduled
meeting since the beginning of 2001 at
which the Fed did not ease monetary
policy. Second, it marked the longest
period of time in more than a year that
the Fed did not change (lower) interest
rates. Barring a major surprise, the Fed is
now finished with the easing cycle, in our
opinion. Recent economic data and
comments from various Fed officials
indicate that, while risks to the economy
still remain, those risks are moderating.
Treasury Secretary Paul O'Neill predicted
that by the fourth quarter growth would
rise at an annual rate of 3% to 3.5% and
said: "We sea more signs every day
indicating a recovery Is under way." The
president of the European Central Bank
echoed these views at the G7 meeting in
early February
Despite signs that the Fed is finished
easing and that the economy is (modestly)
improving, bond yields are tower than
they were on the date of the last Fed
Benchmark Yields
(1970 to Present)
meeting. Since the end of January, stocks
and corporate bonds have been volatile and
concerns over earnings (e.g., worldCom)
and accounting issues (e_g_, Enron) have
generated a "flight -to -quality" bid for
Treasuries_ That, coupled with our view
that the Fed is through easing and the
economy will recover this year, lead us to
believe that the Treasury market is
vulnerable at current levels.
Last month we talked about some of the
implications for the bond market when
the Fed completes an easing cycle.
Among these were the time between the
last ease and the first tightening (on
average 10.5 months), the trend toward
narrower risk premiums, higher yields,
and a flatter yield curve. This month we
thought it might be beneficial to discuss
what happens to yields and the curve
after an easing cycle. We have identified
eight easing cycles (defined as at least
two eases without an intervening tightening
in a 12-month period) since 1970_
In seven of the previous eight easing
cycles, the yield curve was flatter six
months after the last Fed ease. The lone
exception was the most recent easing
cycle in late 1998. However, this easing
cycle was different from the
others in that it was not in
reaction to pronounced
B
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n
economic weakness, but
instead to restore confidence
and liquidity to the financial
markets in the wake of the
Long -Term Capital Manage-
ment hedge fund meltdown.
On an annualized GDR
basis, the final two quarters
of 1998 grew at 4.1 % and
6_7%, and oil and inflation
YJ701172 1174 1178 1178 1B0 V82 11B4 1186 V88 1190 1192 1194 V98 1f9B 1100 1102 Mta sowcos: maumr
ifUU
02-26-02 08:52 RECEIVED FROM: p•62
FEB-26-2002 09:16
BOND MARKET WATCH — FEBRUARY 15, 2002
F. a3
spiked higher, causing yields on long -maturity Treasuries
to do the same. This cycle is a more "normal" cycle in
that the Fed is responding to a weak economy. In
terms of the degree of tightening, it looks similar to the
cycles that ended in December 1982, August 1986
and September 1992.
In those three easing cycles, the yield of the two-year
Treasury was higher by the time of the next rate hike,
and two of the three times all maturities featured higher
yields. The only exception was at the end of the 1992
cycle when long-term Treasury yields kept declining for
more than a year after the Fed finished easing. That cycle
also featured the longest time (17 months) between the
last cut and the first hike. However, if you consider the
shape of the yield curve six months after the last ease,
the curve was flatter in all three of these cycles.
The bigger question is what happens to yields next.
We continue to believe that barring a major surprise
(e.g., another terrorist attack), the econorny has
bottomed- Recent data from the manufacturing sector,
as well as the improvement in retail sales and the
leading indicators, seem to confirm this. In light of the
Fed's aggressive pursuit of easier monetary policy last
year and the improvement in the economy, we believe
the Fed is finished easing. We look for the Fed to
change its bias to neutral at one of the next two
meetings and to tighten by mid to late summer. The
government will operate at a deficit this year as the war
on terrorism continues and the tax receipts decline in
the wake of the recession- The inflation outlook remains
one of the few bright spots for fixed -income investors_
After ending last year at 1.6%, the consumer price
index will likely move higher this year as the global
econorny recovers.
With bond fundamentals deteriorating we continue to
look for yields to move higher over the balance of the
year. Yields are up 70 to 80 basis points from the lows
of early November already and we look far them to
move higher still. An improving economy should
increase demand for credit, and improvement in the
global economy would likely lead to higher commodity
prices. These factors, coupled with marginally tighter
Fed policy, lead us to believe that rates will continue to
rise in 2002.
W11AAAm A. HUrcNBAIAGER
CHIEF INCOMP a111 nrl;GfST
www. aocdw�rd6.com
AddlBonal Inforoadon arsl4d* opon request. INS information is obtained from sources and data considered to be reliable, but its a=raey and completeness are not guaranteed
by A.G. Edwards & Sons, Inc. Any opinions expressed are subject to change without notim Neither the information nor any opinions expressed constitutor a solicitation for the purchase or
sale of any security referred to herein. A.G. Edwards & Som, Inc. may make markets or have positions in the S2eWVOS mentioned herein and mayy Dave also performed investment banking
services for the issuers of such sem6lies. Indicated market prices or svwds do not include transaction fees or other expenses. Investments can flucmate In price, value and/or incomeand
may return less than tha original investment. Investments or investrnunt services mentioned may not be suhable for all, and investors in doubt should seek advice from their financial
consultant. The levels and basis of Lwhon can change. International investing involves special risks, including those tied to currency fluctuations and foreig.0 eronomiG arld political risks.
Past pedomrance is not necessarily a guide to future performance. The offEting is made onfy by the official statement. These bonds are offered when, as Md d issued and received by uS and
suGlect to the aporovino legal opinion, which wilt be printed on each bond. A ahscossion of interest exemption from specific taxes is the Gpinlon of Counsel. for insured bonds, no
representation i5 made to the insurers ability to meet its commitments, the Insurance does not remove the market risk o#the bonds. This document has been approved by AG. Edwards & Sons
(M) Limited, regulated by FSA.
R-Bd25
A.C. EDWAR DS & SHINS, INC.
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Economic and Market Outlook
FEBRUARY 4, 2002
1. We look for the U.S. economy to recover
from the recession this year. The economy
could still be quite weak at the start of the
year, but growth is likely to accelerate as the
year progresses. The four -quarter average
of real GDP growth is likely to be 2.25%
this year and 5.12% in 2005. Of course, this
outlook would probably change if there were
another major terrorist attack.
2. Inflation is likely to remain low in 2002.
There is still a great deal of excess capacity
here and abroad, and foreign economic
growth may not pick up appreciably until
next year. inflation could accelerate in 2005
when the 'whole world economy is expected
to be back on its feet. The 12-month
consumer price inflation rate is likely to be
near 2.0% at the end of this year and 2.5%
in December 2003.
3. The threat of terrorism continues tO be the
main risk to the economy this year. If the
terrorist Threat diminishes, economic growth
could be even stronger than we anticipate.
The combination of low inventories, low
interest rates, low energy prices and the 2001
tax cut could give a real boost to the economy
this year, if the terrorists do not strike again.
4. The Fed says that the outlook for
economic recovery has become more
promising, but policymakers continue to
assert that the risks are weighted mainly
toward economic weakness. This is not a
forecast for fuiure economic activity. Rather
we believe the statements made after the
FOMC meetings usually reflect what
policymakers think will happen to the
unemployment rate. When the
unemployment rate is rising, the Fed usually
says that the risks are toward weakness.
When the unemployment rate is low and
declining, the Fed often says that the risks
are toward inflation, even thou911 other
indicators may be pointing toward slower
economic growth.
5. The ending of the inventory liquidation
process could be a real plus to the
econol-ay, Businesses have been cutting
production this year in order to reduce
inventories that are now very lean. Fed
Chairman Greenspan recently said that
production is now well below sales. History
suggests that once inventories reach desired
levels, production is likely to rise just to meet
existing demand. This is what normally
starts the economy growing again.
6. The economy appears to be bottoming and
that means that the downturn is nearly
over and a recovery is likely to ben soon.
During a recovery, the economy is crawling
out of its hole. It is not back to previous peak
levels of achvitY yet, and there are still
lingering economic problems including
layoffs and occasionally weak spending. If
the recovery is slow, the unemployment
rate could continue to rise. After all, if the
economy does not create enough jobs to
offset the rise in the labor farce, the
imeinployment rate may still go up.
7. The longer the Fed can keep interest rates
low at the start of the recovery, -the longer the
economic expansion is likely to be. If the Fed
cuts interest rates too much during the
recession and over stimulates the economy, it
may have to raise interest rates relatively
soon and that could Cut the recovery short. At
this point, the Fed does not appear to have
lowered rates too far. The Fed could take
back one or two rate cuts starting this
summer, but a sustained increase in short-
term interest rates looks unlikely until 2003
when world economic growth and inflation
are likely to accelerate. The Feel funds rate
target could be at 2.0% at the end of June
and 2.5% by the end of the year.
8. Long-term treasury interest rates appear to
have bottoined in November 2001 when a
surge in borrowing and a reduced
02-26-02 08:58 RECEIVED FROM: P-04
FEB-26-2002) 09:17
P.05
willingness to lend on the part of bond
buyers pushed the 10-year Treasury yield up
from 4.3% to 5.2%. Yields were only briefly at
that low level because many people rushed to
refinance mortgages increasing the demand
for credit. At the same time, investors turned
more cautious on bonds, because the
governmeiifs borrowing needs were
increasing. Long-term Treasury rates are
likely to rise a bit further this year and could
increase more significantly next year if
inflation rises as anticipated. The 10-year
Treasury note yield is likely to be around
55% at the end of June and 5.8% at the end
of December this year.
9. The dollar continues to rise in value while
foreign currencies weaken against the
greenback. In. particular, the yen has
dropped sharply in recent weeks, but the
euro has declined only modestly, The strong
dollar is likely to make the trade deficit
worse this year, particularly if the U.B.
Cary Thayer, Chief Economist
Patrick Fearon, Economist
economy recovers sooner than foreign
economies. The strong dollar is a sign 01'
confidence in the U.S. economy, The dollar
could come under pres$ure later this year
or early in 2005 if inflationary pressures
begin to build.
10. Inflation has been reduced during the last
year, primarily because energy prices have
fallen. OPEC has tried to support prices by
cutting prodtzctioll quotas, but non -OPEC
production was at a record high level in
December, and the demand for oil is soft
because of the weak world economy.
Energy prices could remain under
pressure during mueb of this year,
because inventories have been rebuilt
making it even harder for OPEC to create
a shortage. Oil prices could stay in the $15
to $22 range for much of this year. The
period between winter and summer dernand
could be a time of testing for ail producers. If
there were a price war, it would probably
develop this spring.
A.G.
TY-usted Advice • Exceptional Service
February 4, 2002
Addltianal Infarmatlon a4laWe upon mquest. The meVal contained herHn hm Ix'e!1 p►�p�red bum source and data M believe is be r4fi IC but fit rYral�c no gkrarant m as to ils acrluacy err mrttpleien� ThIs morial is
put> 100.srolely tar inlomWonal purposes god is net an t N buy or W Ora srkitaCrort o l m ofior to buy or mil a sammty or he trw product This m*rial Is not to be Co�rnred 8s prWl np Inverr ent s+ V10% in
any furisdicdim when such o{fes or sortk:iatmn would be it t upwans and estirrr�es ere as of a aertaln tlara and �JeCt to C�gev�tnout notlCe.
You Should be ah m M invtshmts ran tlurduate in prim. value and/or uhcarne, aril you beck less Ihan you in w4 d 1pdg performance IS rhot n rl a. ice to hl ate edom-ence. lnyestirierb or inUertment
services mentioned may nut be sul{able for you and It you have any doubts u stwuld seefc advice 117 dour rinarttt� oor�ulA Wltere an nmslmcr1 is k Md1 as mm�9 iim lod inco , re. as being suhbble tr an
irM Obi p ly 3CdkrfI� irmomc. the int "torn the QmlQs rwl rr4 and part althe (112 ner d may be usi to Rpeey thel lrimme. Where the ppurdla�e or sale of an Ulve nertt requires a rnanpe from one
c to another, fluC158 om l n the ex0mn a rate may t>a a am advesse etlea on the value, p a frwme rn me irr rmflt Cefg Invesmtorhts may bo mm anod loaf am not readily rsalsable. This means that it rrray be
dWreult to sell of rr2lise the invesirre t. or obbin reliable inturrrralioe rcparding ils value_ Tho fowls and basis of taxation ran change.
This owffw has been approved by AG. Edriwds & Sons R K.) Limited, iegutaled by foe FSA
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� Fannie Mae, Freddie Mac Faulted
For Possible Glut of Apartments
By RAY A. SMITH
Staff Reporter of Tm WALL STun JOURNAL
Are the lending programs of Fannie Mae
and Freddie Mac driving the nation's apart-
ment market toward potential trouble?
f Construction of apartment buildings has
_ remained relatively strong despite weaken-
ingdemandforapartmenthousiug, andindus-
try analysts and developers believe a glut of
apartments is in the offing. Some are blaming
expected oversupply on a more aggressive ef-
fort by Fannie Mae and Freddie Mac to fi-
nance buyers of apartment buildings.
C Just this week at a real-estate conference
in New York, real-estate magnate Sam Zell,
chairman of Equity Residential Properties
Trust, me of the nation's largest apartment
landlords, blasted Fannie Mae and Freddie
Mac for "very aggressive overlending" in the
multifamily sector. Mr. Zell said the two gov-
ernment -sponsored entities were in danger of
becoming like the savings -and -loans institu-
tions of the 1980s—not because of risky loans
but because they concentrate so much of the
multifamily lending market.
While traditional lenders such as banks
and insurers have scaled back loans provided
directly to apartment developers and buyers,
OveriVendifi-g' Fuels
Continued From Page A2
Officials at Fannie Mae and Freddie Mac
argue that while their lending programs have
expanded, their standards haven't. Proper-
ties still have to meet a 90-90 rule-900/c occu-
pied and in operation for at least 90 days —and
rents on the property must be comparable
with other buildings in the area, to qualify for
a Fannie Mae or Freddie Mac acquisition
loan.
If anything, "it's not the availability of capi-
tal, it's the terms at which it is available for"
that has helped keep prices steady and con-
struction up, said Kenneth J. Bacon, senior
vice president of Fannie Mae's multifamily
lending and investment division.
Freddie Mac, which reduced its
amount of acquisition loans in 2001 to a
still -significant 25% of overall financing
from 30% in 2000, doesn't see any connec-
tion between its financing initiatives and
continued apartment construction.
"I don't think that's true," said Adrian
Corbiere, senior vice president of multi-
family at Freddie Mac. "Our overall vol-
ume of lending has increased because we
have taken significant market share from
other lenders. But the overall volume of
lending for multifamily financing hasn't
increased dramatically."
While much of Fannie Mae's and Fred-
die Mac's financing goes toward middle -
and high -income properties, the organiza-
tions argue that most of their programs
help fund so-called affordable housing.
National data show an increasing short-
age of lower -income multifamily housing
but a growing oversupply at the higher
levels. That makes it hard for the organiza-
tions to reconcile their do-gooder images
with their existence as numbers -driven,
publicly traded corporations seeking to
please shareholders.
The agencies also have come under in-
creased scrutiny over their growing debt and
the risks associated with those obligations.
Reis Inc., a research firm based in New
York, expects the number of completed
apartment units nationwide to increase to
123,500 this year from 112,000 units in 2001.
Meanwhile, origination of loans in the
multifamily sector rose to $35.23 billion in
2001 from $26.54 billion in 2000, according to
a survey conducted by the Mortgage Bank-
ers Association of America in Washington.
The lenders surveyed exclude life -insurance
Fannie Mae and Freddie Mac lending pro-
grams have kept growing. The agencies,
which were created by Congress, don't make
loans directly but help provide liquidity to the
housing market by buying or securitizing
loans.
They are the two biggest providers of fi-
nancing for acquisitions in the multifamily
sector —much of it for middle- to high -end prop-
erties, which is ironic for organizations widely,
associated with affordable housing. Last
year, Freddie Mac invested $12.3 billion in the
multifamily sector, a record for the organiza-
tion, based in McLean, Va. Fannie Mae of
Washington nearly doubled its investment in
multifamily rental housing in 2001, providing
E2'l.8 billion.
By financing loans for buyers, Fannie Mae
and Freddie Mac "have made itmore advanta-
geous for bgdders to go out there and de-
velop," said Robert Stevenson, an apartment
analyst at Morgan Stanley in New York. In a
worst -case scenario, "what you could eventu-
ally see if the supply problem got bad enough,
is that some of these properties would be given
back to lenders in foreclosures, like in the
'90s," he said.
Please Turn to Pope A4, Column 5
Apartments
companies and commercial banks.
Markets where apartment supply far
outstrips demand amid high job losses in-
clude Atlanta and Phoenix, which reported
among the highest amounts of apartment -
construction permits in the past three
years, according to Regis J Sheehan &
Associates, an apartment -research firm.
Other cities, including Austin, Texas;
Charlotte, N.C.; and Seattle, also have a
glut of apartments.
David Cardwell, vice president of fi-
nance and technology at the National
Multi Housing Council, a Washington -
based organization representing the na-
tion's leading apartment firms, thinks Fan-
nie •Mae's and Freddie Mac's financing is
an important factor but not the single driv-
ing one.
"Developers that don't build to hold
properties long-term don't build based on
financing that's available for takeout so
much as they do availability of equity and
capital for the actual construction debt,"
he said.
A22 THE WALL STREET JOURNAL WEDNESDAY, FEBRUARY 20, 2002
]E VIEW & OUTLOOK
Fannie Mae Enron?
We were reading President Bush's
" budget the other day (we know, get a
)"life), when we came across an un-
usual mention of our all-time favorite
-,.,companies —Fannie Mae and Freddie
,, Mac. What we found is a tale we think
taxpayers and investors should want
�',to hear.
It seems that Fan and Fred, two
"government -sponsored enterprises"
that hold the majority of all home mort-
i, gages in the U.S., have been growing
--their debt at an annual rate of 25%.
They now have about $2.6 trillion in
debt outstanding, a big number in any
case, but really big considering that
"'taxpayers are on the hook for it. The
budgeteers also expressed some anxi-
ety about Fan and Fred's increasing de-
pendence on derivatives.
Hmmm. Where have we heard this
before? The more we've since looked at
Fan and Fred the more they look like
poorly run hedge funds: lots of lever-
age and snarkily hedged risk. The
word Enron ring any bells?
Last year, Fan's debt/equity ratio
was about 60 to 1, more than five times
the average for commercial banks.
Moreover, as mortgage lenders, Fan-
nie's equity can hardly be said to be
well -diversified. Risk thus becomes a
critical question.
Fan and Fred face two kinds of risk:
credit risk from the possibility that
mortgage holders will default, and in-
,terest-rate risk from the possibility
that mortgage holders will prepay, leav-
ing Fan and Fred on the wrong side of
—the spread, that is, lending at low rates
and borrowing at high rates. Of course,
giant risk won't lead to giant problems
if it's properly hedged.
But Fan and Fred's risk manage-
ment looks to be rather frisky. Take in-
surance. Some credit risk can be re-
duced by buying insurance against de-
fault. But lately the siblings have been
cutting back on insurance, leaving
them with greater exposure to de-
fault. Self-insurance may not be a
dumb strategy in good economic
times, but in a sharp downturn it can
look pretty stupid.
As for interest -rate risk, Fan and
Fred hedge with a giant and complex
program using all manner of deriva-
tives. At the end of 2000, their com-
bined derivative position was valued
at $780 billion. Even scarier, these
hedges are only as good as the counter -
parties' ability to pay up. But Fan and
Fred don't disclose the identity of
their parties, so investors have no
idea how much risk comes from possi-
ble counterparty failure. (By the way,
last year Fan's derivative strategy
went, um, somewhat amiss and she
had to write down shareholder equity
by $7.4 billion.)
Fan and Fred also pool mortgages
and then sell those securities —that is,
they retain the credit risk since they
guarantee the soundness of the mort-
gages and buyers assume the interest -
rate risk. But Fan and Fred have re-
cently been buying back their own se-
curities; each now holds 30% of all
mortgage -backed securities outstand-
ing. Simply put, they are re -assuming
interest -rate risk. Not necessarily a
terminal practice when interest rates
are stable, but dangerous if rates turn
volatile.
Shaking in your boots yet? Well,
there are even more parallels with En-
ron. Fan and Fred's financial disclo-
sure is terrible. They are not required
to file financial statements with the
SEC. The New York Stock Exchange re-
quires that they report to sharehold-
ers, but they keep disclosure and clar-
ity to a minimum. Their financial state-
ments are audited, for whatever that's
worth. Last year Fan paid KPMG $2
million in audit fees and $6.6 million in
consulting fees. Fred's auditor is
Arthur Andersen; last year, Fred paid
$1.1 million for auditing and more than
$8 million for consulting.
Fan and Fred do have a federal regu-
lator. It's the Office of Federal Housing
Enterprise Oversight, and in 1992 it
was required by Congress to produce a
risk -based capital rule for Fan and
Fred. Essentially OFHEO had to figure
out how much capital they needed to
survive a period of financial stress.
Nine years later, last September, OF-
HEO finally published a rule that took
some 600 pages to explain and that ev-
erybody found opaque. Informed suspi-
cion is that the proposed standard is be-
low that of other financial institutions
and less than the capital that Fan and
Fred currently maintain.
Then there's the matter of political
influence. During the 1999-2000 elec-
tion cycle, Fan spread around $1.6 mil-
lion and Fred $2.4 million, giving to
both parties about equally. The total of
$4 million is almost double what Enron
spent. And finally, there's Wall Street.
Just as stock analysts sold the stuffing
out of Enron's stock without having a
clue about the true condition of the com-
pany, they are madly selling Fan and
Fred despite the fact they can't possi-
bly know what's what.
We aren't trying to scare readers
here, and perhaps all of these concerns
will come to nothing. So far during this
recession, the housing market has held
up well, knock on wood. Then again, un-
like Enron, where only shareholders
got taken to the cleaners, in the case of
Fannie and Freddie taxpayers will
take any bath. Maybe this time Con-
gress should hold hearings before
things go wrong.
REVIEW & OUTLOOK
0�
Frantic Fannie
We've learned over the years that
fhe more outrage an editorial inspires
-the closer we were to the bull's-eye. So
—Ve figure our aim must have been good
,-;after Fannie Mae and Freddie Mac re-
acted to our editorial last week as if
-we'd insulted their mothers.
-rye The two biggest U.S. mortgage
holders hit. the airwaves to denounce
.-us, accused us of bias against "hous-
'ing" (as if we don't live in houses our-
delves) and unleashed their favorite
"Wall Street cheerleaders to deplore
'„Qur ignorance. But something else
hap-pened too: Fannie's share price took a
hit on the day our editorial appeared,
--land all sorts of other people wrote to
r; say keep it up.
Clearly we've
touched a nerve, so
"`let's touch it again
,by considering Fan
;,,and Fred's frantic
-,,objections. For ex-
7'ample, their deriva-
e position. In 2000, 5
"these two leveraged
giants owned up to
3780 billion worth of Franklin Raines
`derivatives. More re- Accounting wizard
'cent figures from
,,2001, however, put that total at $1.4 tril-
,; lion, with $1 trillion alone held by Fred.
Why all these derivatives? Deriva-
tives are used to hedge risk, of course,
and Fan and Fred need to hedge their
`'- big debts that expose them to credit
and interest rate risk. But derivatives
also carry the risk that the counter -
party will fail to pay. Since Fan and
-Fred don't disclose the names, or much
else, about their counterparties, it's im-
possible to judge counterparty risk.
Readers of footnote 13 to Fan's finan-
cial statement in 2000 learn that 99% of
their derivative exposure is covered by
only five mystery counterparties. The
footnote says that these five are
A -rated or better; in other words, most
of the companies are weaker than Fan,
which is triple-A rated.
Our effrontery was to say that more
disclosure might be in order. But when
We saw Fannie CEO Franklin Raines's
defense, we understood the problem.
Mr. Raines seems to be under the im-
pression that if something is recorded
as an off -balance sheet liability, it
doesn't count. He claims that the only
liability that counts is Fan's on-bal-
0,nce record in 2000 of $643 billion. That
heaves $707 billion in liabilities residing
off -balance sheet. Hmm. Perhaps Mr.
Raines is a graduate of the Andrew Fas-
tow School of Accounting: outta sight
i"s outta mind.
Fan and Fred defend their financial
disclosure by quoting from Moody's In-
l"estors Service, one of the nation's
Bond -rating agencies. So we looked at
what Moody's actually said. In a three -
page paper —not a rating report —is-
sued in October 2000, Moody's noted
that Fan and Fred had been under in-
creased financial and political scru-
tiny over their growing debt and the ad-
equacy of their regulatory supervision.
While Moody's welcomed Fan and
Fred's initiatives as a way of reducing
political risk, it did not say that Fan
and Fred's disclosure was excellent or
even sufficient. Using the subjunctive
mood, Moody's said that Fan and
Fred's decision to improve disclosure
"could prove difficult for other firms to
ignore, and could usher in a wave of en-
hanced risk disclosure" and "may
prove to be one of the more important"
initiatives. Coulda, woulda, shoulda.
Moody's more recent analysis, pub-
lished at the end of 2001, is more defini-
tive and not to the good: Under "Weak-
nesses/Challenges," Moody's flagged
Fan's "exposure to significant asset -lia-
bility and credit risks" and noted that
Fred's "exposure to mortgage prepay-
ment and credit risks is significant and
complex." Mr. Raines might also want
to turn to page four of the Freddie re-
port, where Moody's says the siblings'
total 2000 obligations are $2.6 trillion,
the very figure that Mr. Raines denies.
In short, Moody's comes closer to mak-
ing our case, not his.
Fannie and Fred's shrieking re-
sponse to us, we should add, isn't un-
usual. They wield enormous clout on
Wall Street and Washington, and they
take no prisoners. Louisiana Republi-
can Richard Baker learned this when
he tried to rein in Fran and Fred from
his House subcommittee chair in 2000.
Fan and Fred responded with a huge
lobbying campaign that bathed his
committee in campaign contributions,
donating during the 2000 election cycle
to 21 of 27 other members. Texas Demo-
crat Ken Bentsen alone cashed checks
for $17,000. Mr. Baker's probe lost
steam after he saw how many political
allies the companies had rented.
So far this cycle, according to the
Center for Responsive Politics, Fan
and Fred have given $37,000 to mem-
bers of the House Financial Services
Committee, more than $34,000 of that
to the subcommittee with Fan and Fred
oversight, and $102,000 to Members of
the Senate Banking Committee. As for
"soft money," Fred ranks eighth in do-
nations, ahead of both Microsoft and
Global Crossing. It has donated more
than $1 million toward the 2002 elec-
tions, evenly split between Democrats
and Republicans, while Fan has do-
nated nearly $800,000, mostly to Repub-
licans. (And let's not forget lobbying
expenses. From 1997 to 1999, Fan spent
more than $16 million to hire more than
60 lobbyists.)
We'd be the first to defend Fannie
and Fred's right to make these dona-
tions. We just think that companies tak-
ing on so much risk and debt, and
backed by taxpayers, ought to be more
transparent in what they tell the world.
The time for the political system to fo-
cus on Fannie and Fred isn't when we
have a housing crisis; by then it'll be
too late. The time to make them come
clean is now.
6-,-)
L6�.
CITY OF LA QUINTA
Investment Policy
Table of Contents
Section Topic
Page
Executive Summary
2
I
General Purpose
4
II
Investment Policy
4
III
Scope
4
IV
Objectives
5
► Safety
► Liquidity
► Yield
► Diversified Portfolio
V
Prudence
6
VI
Delegation of Authority
6
Vil
Conflict of Interest
7
VIII
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.
Collateralization will be required for Certificates of Deposits in excess of $100,000.
Collateral will always be held by an independent third party from the institution that
sells the Certificates of Deposit to the City. Evidence of compliance with State
Collateralization 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
I 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
► Debt Service
► Internal Service
► Trust and Agency
► Any new fund types and fund(s) that may be created.
El
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:
10. Limiting investments to the safest types of securities;
► Pre -qualifying the financial institutions, and broker/dealers, which
the City of La Quinta will do business; and
01 Diversifying the investment portfolio so that potential losses on
individual securities will be minimized.
B. Interest Rate Risk
Interest Rate risk is the risk that the market value of securities in the
portfolio will fall due to changes in general interest rates. Interest rate
risk may be mitigated by:
► Structuring the investment portfolio so that securities mature to
meet cash requirements for ongoing operations, thereby avoiding
the need to sell securities on the open market prior to maturity;
and
► By investing operating funds primarily in shorter -term securities.
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;
00. 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 Quinta's investment portfolio is derived from the
City Ordinance. Management responsibility for the investment program is delegated
to the City Treasurer, who shall establish written procedures for the operation of the
investment program consistent with the Investment Policy. Procedures should include
reference to safekeeping, wire transfer agreements, banking service contracts, and
collateral/depository agreements. Such procedures shall include explicit delegation of
C
authority to persons responsible for investment transactions. No person may engage
in an investment transaction except as provided under the terms of this Investment
Policy and the procedures established by the City Treasurer. The City Treasurer shall
be responsible for all transactions undertaken and shall establish a system of controls
to regulate the activities of subordinate officials. The City Manager or Assistant City
Manager shall approve in writing all purchases and sales of investments prior to their
execution by the City Treasurer.
VII CONFLICT OF INTEREST
Investment responsibilities carry added duties of insuring that investments are made
without improper influence or the appearance of improper influence.
Therefore, the City Manager, Assistant City Manager, and the City Treasurer shall
adhere to the State of California Code of Economic Interest and to the following:
► The City Manager, Assistant City Manager, and the City Treasurer shall not
personally or through a close relative maintain any accounts, interest, or private
dealings with any firm with which the City places investments, with the
exception of regular savings, checking and money market accounts, or other
similar transactions that are offered on a non-negotiable basis to the general
public. Such accounts shall be disclosed annually to the City Clerk in
conjunction with annual disclosure statements of economic interest.
10. All persons authorized to place or approve investments shall report to the City
Clerk kinship relations with principal employees of firms with which the City
places investments.
VI11 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:
10. 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 1 10% collateralized
by securities' or 150% mortgages' market values of that amount
of invested funds plus unpaid interest earnings.
C. Disclosure - Each financial institution maintaining invested funds
in excess of the FDIC insured amount shall furnish the City a copy
of the most recent Annual Call Report.
The City shall not invest in excess of the FDIC insured amount in
banking institutions which do not disclose to the city a current
listing of securities pledged for 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 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% of
the portfolio.
• U.S. Government instrumentalities and agencies issuing securities not
backed as to principal and interest by the full faith and credit of the U.S.
Government. The Federal Home Loan Bank (FHLB), Federal Farm Credit
Bank (FFCB), Federal Land Bank (FLB) and Federal Intermediate Credit
Bank (FICB) are such issuers. The City of La Quinta Investment Policy
has a limitation of $3 million per issuer.
9
• 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.
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 180
days. The City of La Quinta Investment Policy does not allow investment in
Bankers' Acceptances.
Commercial Paper - As authorized in Government Code Section 53601(g), 15%
of the portfolio may be invested in commercial paper of the highest rating (A-1
or P-1) as rated by Moody's or Standard and Poor's, with maturities not to
exceed 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
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
10
0 2
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
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
11
portfolio limitations. The City of La Quinta Investment Policy does not allow
investments in financial futures and financial option contracts.
Certificates of Deposit - As authorized in Government Code Section 53649,
Certificates of Deposit are fixed term investments which are required to be
collateralized from 1 10% to 150% depending on the specific security pledged
as collateral in accordance with Government Code Section 53652. There are
no portfolio limits on the amount or maturity for this investment vehicle.
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 Collateralization policies must be supplied to the City and
retained by the City Treasurer as follows:
1. Certificates of Deposits Insured by the FDIC.
The City Treasurer may waive collateral ization of a deposit that is
federally insured.
2. Certificates of Deposit in excess of FDIC Limits.
The amount not federally insured shall be 1 10% 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.
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
12
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.
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
13
earnings and expenses to that particular fund.
XI11 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
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
14
i � �
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
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 St and June 301h Treasurers Reports be
sent to the California Debt and Advisory Commission within sixty days of the end of
15
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
LAW 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
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
16
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
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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.
2.70.02013oard 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.
19
o vI
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
Appendix F
BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION
1. Name of Firm:
2. Address:
3. Telephone: ( ) ( )
4. Broker's Representative to the City (attach resume):
Name:
Title:
Telephone: ( )
5. Manager/Partner-in-charge (attach resume):
Name:
Title:
Telephone:
6. List all personnel who will be trading with or quoting securities to City employees
(attach resume)
Name:
Title:
Telephone:) ) ( )
7. Which of the above personnel have read the City's Investment Policy?
8. Which instruments are offered regularly by your local office? (Must equal
100%)
% U.S. Treasuries
% BA's
% Commercial Paper
% C D's
% Mutual Funds
% Agencies (specify) :
24
% Repos
% Reverse Repos
% CMO's
% Derivatives
% Stocks/Equities
% Other (specify):
v��
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.
12.
Has your firm or your local office ever been subject to a regulatory or state/ federal
agency investigation for alleged improper, fraudulent, disreputable or unfair
activities related to the sale of securities? Have any of your employees been so
investigated? If so,
explain.
Has a client ever claimed in writing that 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
07
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. Please list your NASD Registration Number
22.
Do you have any relatives who work at the City of La Quinta?
Yes No If yes, Name and Department
23. Do you maintain an office in California. Yes No
24. Do you maintain an office in La Quinta or Riverside County? Yes No
25. Please enclose the following:
• Latest audited financial statements.
• Samples of reports, transaction confirmations and any other
research/publications the City will receive.
• Samples of research reports and/or publications that your firm regularly
provides to clients.
• Complete schedule of fees and charges for various transactions.
'CERTIFICATION'
*CERTIFICATION
I hereby certify that I have personally read the Statement of Investment Policy of the City
of La Quinta, and have implemented reasonable procedures and a system of controls
designed to preclude imprudent investment activities arising out of transactions
conducted between our firm and the City of La Quinta. All sales personnel will be
routinely informed of the City's investment objectives, horizons, outlooks, 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
G%`1?9
Broker Representative
Date_
Sales
Date
Title
Manager and/or Managing Partner*
Title
28
vQ
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?
W
REPORTING
1. Is the yield reported to participants of the pool monthly? (If not, how often?)
2. Are expenses of the pool deducted before quoting the yield?
3. Is the yield generally in line with the market yields for securities in which you usually
invest?
4. How often does the pool report, and does that report include the market value of
securities?
SECURITY
The following questions are designed to help you safeguard your funds from loss of
principal and loss of market value.
1. Does the pool disclose safekeeping practices?
2. Is the pool subject to audit by an independent auditor?
3. Is a copy of the audit report available to participants?
4. Who makes the portfolio decisions?
5. How does the manager monitor the credit risk of the securities in the pool?
6. Is the pool monitored by someone on the board of a separate neutral party external
to the investment function to ensure compliance with written policies?
7. Does the pool have specific policies with regards to the various investment vehicles?
a. What are the different investment alternatives?
b. What are the policies for each type of investment?
8. Does the pool mark the portfolio to its market value?
9. Does the pool disclose the following about how portfolio securities are valued:
a. The frequency with which the portfolio securities are valued?
b. The method used to value the portfolio (cost, current value, or some other
method)?
30
0j '1 2
OPERA TIONS
The answers to these questions will help you determine whether this pool meets your
operational requirements:
1. Does the pool limit eligible participants?
2. What entities are permitted to invest in the pool?
3. Does the pool allow multiple accounts and sub -accounts?
4. Is there a minimum or maximum account size?
5. Does the pool limit the number of transactions each month? What is the number
of transactions permitted each month?
6. Is there a limit on transaction amounts for withdrawals and deposits?
a. What is the minimum and maximum withdrawal amount permitted?
b. What is the minimum and maximum deposit amount permitted?
7. How much notice is required for withdrawals/deposits?
8. What is the cutoff time for deposits and withdrawals?
9. Can withdrawals be denied?
10. Are the funds 100% withdrawable at anytime?
1 1 . What are the procedures for making deposits and withdrawals?
a. What is the paperwork required, if any?
b. What is the wiring process?
12. Can an account remain open with a zero balance?
13. Are confirmations sent following each transaction?
STA TEMENTS
It is important for you and the agency's trustee (when applicable), to receive statements
monthly so the pool's records of your activity and holding are reconciled by you and your
trustee.
31 G_'1 3
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?
32
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.
33
COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR): The official annual report for the City of
La Quinta. It includes five combined statements
for each individual fund and account group
prepared in conformity with GAAP. It also
includes supporting schedules necessary to
demonstrate compliance with finance -related
legal and contractual provisions, extensive
introductory material, and a detailed Statistical
Section.
COUPON: (a) The annual rate of interest that a
bond's issuer promises to pay the bondholder on
the bond's face value. (b) A certificate attached
to a bond evidencing interest due on a payment
date.
DEALER: A dealer, as opposed to a broker, acts
as a principal in all transactions, buying and
selling for his own account.
DEBENTURE: A bond secured only by the general
credit of the issuer.
DELIVERY VERSUS PAYMENT: There are
two methods of delivery of securities: delivery
versus payment and delivery versus receipt.
Delivery versus payment is delivery of securities
with an exchange of money for the securities.
Delivery versus receipt is delivery of securities
with an exchange of a signed receipt for the
securities.
DERIVATIVES: (1) Financial instruments whose
return profile is linked to, or derived from, the
movement of one or more underlying index or
security, and may include a leveraging factor, or
(2) financial contracts based upon notional
amounts whose value is derived from an
underlying index or security (interest rates,
foreign exchange rates, equities or commodities).
DISCOUNT: The difference between the cost
price of a security and its maturity when quoted
at lower than face value. A security selling
below original offering price shortly after sale also
is considered to be at a discount.
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.
3. FLBs (Federal Land Bank Bonds) - Long-term
mortgage credit provided to farmers by Federal
Land Banks. These bonds are issued at
irregular times for various maturities ranging
from a few months to ten years. The
minimum denomination is $1,000. They carry
semi-annual coupons. Interest is calculated on
a 360-day, 30 day month basis.
4. FFCBs (Federal Farm Credit Bank) - Debt
instruments used to finance the short and
intermediate term needs of farmers and the
national agricultural industry. They are issued
monthly with three- and six-month maturities.
The FFCB issues larger issues (one to ten
year) on a periodic basis. These issues are
highly liquid.
5. FICBs (Federal Intermediate Credit bank
Debentures) - Loans to lending institutions
used to finance the short-term and
intermediate needs of farmers, such as
seasonal production. They are usually issued
monthly in minimum denominations of $3,000
with a nine -month maturity. Interest is
payable at maturity and is calculated on a 360-
day, 30-day month basis.
6. FHLMCs (Federal Home Loan Mortgage
Corporation) - a government sponsored entity
established in 1970 to provide a secondary
market for conventional home mortgages.
Mortgages are purchased solely from the
Federal Home Loan Bank System member
lending institutions whose deposits are insured
by agencies of the United States Government.
They are issued for various maturities and in
minimum denominations of $10,000.
Principal and Interest is paid monthly.
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
0A
INVESTMENT ADVISORY BOARD Correspondence & Written
Material Item A
Meeting Date: March 13, 2002
TITLE:
Month End Cash Report - February 2002
BACKGROUND:
This cash report is not a complete Treasury Report (exclude petty cash, deferred
compensation and fiscal agent balance, but would report in a timely fashion
selected cash balances.
RECOMMENDATION:
Information item only.
n M. Falconef, Finance Director
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FRB: H.15--Selected Interested Rat ... b-Only Daily Update --March 1, 2002 http://www.federalreserve.gov/Releases/Hl5/update/
Federal Reserve Statistical Bahasa
K 15
Selected Interest Dates ( ail
Release Date: March 1, 2002
Weekly release dates and announcements I Historical data I About
Daily update Other formats: Screen reader I ASCII
The weekly release is posted on Monday. Daily updates of the weekly release are posted Tuesday throu
H.15 DAILY UPDATE: WEB RELEASE ONLY For immediate release
SELECTED INTEREST RATES March 1, 2002
Yields in percent per annum
2002
2002
2002
2002
Feb
Feb
Feb
Feb
Instruments
25
26
27
28
Federal funds (effective) 1 2 3
1.80
1.77
1.76
1.83
Commercial paper 3 4 5 6
Nonfinancial
1-month
1.75
1.76
1.76
1.76
2-month
1.75
1.78
1.77
1.76
3-month
1.77
1.78
1.80
1.77
Financial
1-month
1.76
1.77
1.77
1.75
2-month
1.80
1.80
1.78
1.80
3-month
1.80
1.80
1.81
1.79
CDs (secondary market) 3 7
1-month
1.81
1.81
1.81
1.82
3-month
1.82
1.83
1.82
1.82
6-month
1.96
1.96
1.95
1.96
Eurodollar deposits (London) 3 8
1-month
1.75
1.78
1.78
1.78
3-month
1.81
1.80
1.82
1.82
6-month
1.94
1.94
1.97
1.94
Bank prime loan 2 3 9
4.75
4.75
4.75
4.75
Discount window borrowing 2 10
1.25
1.25
1.25
1.25
U.S. government securities
Treasury bills (secondary market) 3 4
4-week
1.73
1.75
1.74
1.73
3-month
1.74
1.74
1.74
1.76
6-month
1.85
1.87
1.84
1.83
Treasury constant maturities 11
1-month
1.76
1.78
1.77
1.76
3-month
1.77
1.77
1.77
1.79
6-month
1.89
1.91
1.88
1.87
1-year
2.26
2.31
2.27
2.25
2-year
3.01
3.08
3.09
3.06
3-year
3.53
3.61
3.56
3.64
5-year
4.26
4.33
4.22
4.27
7-year
4.69
4.77
4.67
4.70
10-year
4.86
4.93
4.84
4.88
20-year
5.56
5.63
5.56
5.61
Treasury long-term average
(25 years and above) 12 13
5.54
5.59
5.54
5.58
1 of 3
c� 3
03/04/2002 11:37 AM
FRB: H.15--Selected Interested Rat ... b-Only Daily Update --March 1, 2002
http://www.federalreserve.gov/Releases/H 15/update/
Interest rate swaps 14
1-year
2-year
3-year
4-year
5-year
7-year
10-year
30-year
Corporate bonds
Moody's seasoned
Aaa 15
Baa
State & local bonds 16
Conventional mortgages 17
See overleaf for footnotes
FOOTNOTES
2.48
2.47
2.46
2.48
3.39
3.40
3.41
3.43
4.07
4.06
4.07
4.08
4.51
4.51
4.51
4.50
4.83
4.82
4.82
4.80
5.24
5.24
5.24
5.20
5.57
5.57
5.59
5.54
6.04
6.03
6.05
6.01
6.49
6.54
6.50
6.52
7.84
7.89
7.84
7.86
5.07
1. The daily effective federal funds rate is a weighted average of rates
on brokered trades.
2. Weekly figures are averages of 7 calendar days ending on Wednesday of
the current week; monthly figures include each calendar day in the
month.
3. Annualized using a 360-day year or bank interest.
4. On a discount basis.
5. Interest rates interpolated from data on certain commercial paper
trades settled by The Depository Trust Company. The trades represent
sales of commercial paper by dealers or direct issuers to investors
(that is, the offer side). See Board's Commercial Paper Web pages
(http://www.federalreserve.gov/releases/cp) for more information.
6. The 1-, 2-, and 3-month rates are equivalent to the 30-, 60-, and
90-day dates reported on the Board's Commercial Paper Web page.
7. An average of dealer offering rates on nationally traded certificates
of deposit.
8. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time.
9. 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.
10. Rate for the Federal Reserve Bank of New York.
11. Yields on actively traded issues adjusted to constant maturities.
Source: U.S. Treasury.
12. Based on the unweighted average of the bid yields for all Treasury
fixed -coupon securities with remaining terms to maturity of 25
years and over.
13. A factor for adjusting the daily long-term average in order to
estimate a 30-year rate can be found at
http://www.treas.gov/domfin/statistics.htm.
14. 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.
15. Moody's Aaa rates through December 6, 2001 are averages of Aaa
utility and Aaa industrial bond rates. As of December 7, 2001,
these rates are averages of Aaa industrial bonds only.
16. Bond Buyer Index, general obligation, 20 years to maturity, mixed
quality; Thursday quotations.
17. Contract interest rates on commitments for fixed-rate first mortgages.
Source: FHLMC.
2 of 3 03/04/2002 11:37 AM
FRB: H.15--Selected Interested Rat ... b-Only Daily Update --March 1, 2002 http://www.federalreserve.gov/Releases/HI5/update/
DESCRIPTION OF THE TREASURY CONSTANT MATURITY SERIES
Yields on Treasury securities at "constant maturity" are interpolated
by the U.S. Treasury from the daily yield curve. This curve, which
relates the yield on a security to its time to maturity, is based on
the closing market bid yields on actively traded Treasury securities in
the over-the-counter market. These market yields are calculated from
composites of quotations obtained by the Federal Reserve Bank of New
York. The constant maturity yield values are read from the yield curve
at fixed maturities, currently 1, 3 and 6 months and 1, 2, 3, 5, 7, 10
and 20 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.
Weekly release dates and announcements I Historical data I About
Daily update Other formats: Screen reader I ASCII
Home I Statistical releases
Accessibility
To comment on this site, please fill out our feedback form.
Last update: March 1, 2002
U. 'v J
3 of 3 03/04/2002 11:37 AM
FRB:Commercial Paper Rates and Outstandings
http://www.federalreserve.gov/Releases/CP/
Federal Reserve Release
A ad
Commercia Paper
Release I About I OutstandI Historical discount rates I Historical outstandings
Data as of March 1, 2002
Commercial Paper Rates and Outstandings
Derived from data supplied by The Depository Trust Company
Posted March 4, 2002
Yield curve
Monev market basis
1 7 15
30 60
Days to Matun ty
Fhand al — -- Nonfhandal ..... A2%P2
Percent
2.4
2.3
2.2
2.1
2.0
1.0
1.8
1.7
00
G.U" 6
1 of 3 03/04/2002 11:36 AM
FRB:Commercial Paper Rates and Outstandings
http://www.federalreserve.gov/Releases/CP/
Discount rate spread
Thirtv-dav A2/P2 less AA nonfinancial commercial saner (daily)
Old. \N 9 8 01 JAN 9 9 01 JAN OO 01 JAN01 01 JAN02
— A2/P2 spread, 5—day moving average
Discount rate history
Thirtv-dav commercial paper (dailv)
f
■ti
M _ . _
2of3
Basis points
1.50
140
130
120
110
1 DD
90
80
70
60
50
40
30
20
10
I F4L
Percent
8
7
6
5
4
3
2
1
O1JAN9 8 01JAN99 01JANOO O1JAN 01 01JAN02 01JAN03
Financial --- Nonfimnoial ••••• A2/P2
Outstandings
Weekly (Wednesday), seasonally adjusted
Billions of dollars Billions of dollars
it V
03/04/2002 11:36 AM
FRB:Commercial Paper Rates and Outstandings
http://www.federalreserve.gov/Releases/CP/
13C
12C
11C
9W
800
01 JAN98
Financial — -- Ncnfinand al
360
350
340
33[?
320
310
3DO
290
280
270
260
2,50
240
230
220
210
200
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
Commercial paper outstanding, miscellaneous cate ories
Volume Statistics 2001:Q4
Release I About I Outstanding I Historical discount rates I Historical outstandings �
Home I Statistical releases
Accessibility
To comment on this site, please fill out our feedback form.
Last update: March 4, 2002
3 of 3
03/04/2002 11:36 AM
LAIF Performance Report
Page I of 2
Philip Ange fides State Treasurer
Inside the state Treasurer's Office
Local Agency Investment Fund
LAW Performance Report
Reporting Date:
Effective Date:
Quarter Yield:
Daily:
Year:
Life:
Quarter Ending 12/31/01
Apportionment Rate:
Earnings Ratio:
Fair Value Factor:
Monthly Average For January:
02/27/02
02/27/02
3.02%
2.84%
3.76%
170
3.52%
.00009644387381853
1.003787124
3.068%
hap://www.treasurer.ca.gov/laif/perfonnance.htm 03/04/2002
LAIF Performance Report
Page 2 of 2
Corporate
B---I-
4.
Commercial
Paper
21.30
Bankers
Acceptance
0.03%
Time C
9.6,E 70
Pooled Money Investment Account
Portfolio Composition
$52.3 Billion
1/31/02
Reverses
Loans _0.5!5% Treasuries
5.99% 12.85%
CD'sJBN's
13.88%
Adobe PDF version of LAIF Performance.
iw Help with Adobe Acrobat PDF.
;ages ■ Treasuries
)2% ❑ Mortgages
® Agencies
■ CD's)BN's
❑ Time Deposits
® Bankers Acceptances
wgencies ■ Repo
32.00%
■ Commercial Paper
Corporate Bonds
o Loans
■ Reverses
U10
http://www.treasurer.ca.gov/laif/performance.htm 03/04/2002
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oil
INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
March 13, 2002
Correspondence
& Written Material Item B
LAIF Pooled Money Investment Annual Report, November and December Pooled
Money Report
BACKGROUND:
The LAIF Pooled Money Investment Annual Report, November and December
Pooled Money Report have been attached for the Board's review.
RECOMMENDATION:
Receive & File
Jolhri M. Falconee, Finance Director
FORTY-FIFTH ANNUAL REPORT
FISCAL YEAR 2000/2001
POOLED MONEY
INVESTMENT
PHILIP ANGELIDES
State Treasurer and Chairman
Pooled Money
Investment Board
Executive Summary
The Pooled Money Investment Board, created by the Legislature in
1955, is comprised of Philip Angelides, State Treasurer, as chairman;
Kathleen Connell, State Controller; and B. Timothy Gage, Director of
Finance. The purpose of the Board is to design an effective cash management
and investment program, using all monies flowing through the Treasurer's
bank accounts and keeping all available funds invested consistent with the
goals of safety, liquidity and yield.
The law restricts the Treasurer to investments in the following
categories: U.S. government securities, securities of federally -sponsored
agencies, domestic corporate bonds, interest -bearing time deposits in
California banks and savings and loan associations, prime -rated commercial
paper, repurchase and reverse repurchase agreements, security loans, banker's
acceptances, negotiable certificates of deposit and loans to ' various bond
funds. Subsequent sections of this report deal individually with the demand
account and investment programs for which the Board has oversight
responsibilities, and which the Treasurer directly administers.
During the 2000/01 fiscal year, program earnings totaled $2.676
billion. Approximately $873 million of this amount was credited to units of
local government as a result of their deposits in our investment pool. This
level of voluntary participation, which averaged $14.397 billion, reflects the
confidence they have in our investment management capabilities. The
magnitude of these investment earnings provide a significant reduction in the
tax burden that otherwise would have been imposed on the citizens of
California.
Chairman
PHILIP ANGELIDES
State Treasurer
Member
B. TIMOTHY GAGE
Director of Finance
ii
Pooled Money
Investment
Board Members
Member
KATHLEEN CONNELL
State Controller
1
Table of Contents
Page
OVERVIEW POOLED MONEY INVESTMENT BOARD
Pooled Money Investment Board Executive Summary ........................................... i
Pooled Money Investment Board Members........................................................
TheYear in Review............................................................................................................... 1
Investment Activity FY 1992 through 2001......................................................................... 1
2000/01 Investment Market Conditions................................................................................ 2
Pooled Money Investment Account Comparison of
Average Daily Portfolio and Earnings FY 1992 through 2001............................................. 3
POOLED MONEY INVESTMENT ACCOUNT (PMIA).............................................. 4
TheYear in Review............................................................................................................... 4
DemandAccount Program..................................................................................................... 5
Rate Schedule for Banking Services..................................................................................... 6
Average Daily Balance in Demand Bank Accounts............................................................. 7
InvestmentProgram.............................................................................................................. 8
Schedule of Security Purchases - by Term............................................................................
Analysisof the PMIA Portfolio............................................................................................ 9
Dollar Amount of Interest -Bearing Time Deposits...............................................................10
PMIA Summary of Investments and Earnings...................................................................... I 1
Financial Community Coverage..........................................................................................13
SURPLUS MONEY INVESTMENT FUND SMIF
TheYear in Review........................................................................................................... 15
Participation..........................................................................................................................15
Earningsfor 2000/01.............................................................................................................14
Resourcesof the SMIF..........................................................................................................16
LOCAL AGENCY INVESTMENT FUND (LAIF).........................................................17
TheYear in Review...............................................................................................................17
Participation................................................................................................ r .....................17
Earningsfor 2000/01.............................................................................................................17
Resourcesof the LAIF..........................................................................................................18
Appendix A - PMIA Summary of Investments and Earnings, 1957 through 2001 .............19
Note To PMIA Summary of Investments and Earnings ............................... 20
Appendix B - Historical PMIA Yields........................................................................21-29
1
The Year In Review
Average Daily Portfolio ............................... $43,84014209719
Earnings....................................................... $2,676,158,235
Effective Yield ............................................. 6.10%
1
• :•:
5,169
Q51
5,721
5,12D
7,ICS
5ffl4
W
7,889
hrrtAdi�des
FishYa sFn*gjwr30
$ ($Ind Kcw)
$1M0
1992 19� 1994 Iff 19% M 1996 1999 a00D 2[bl
Source: State Treasurer's Office, Division of Investment
2
2000/01 Investment Market Conditions
To indicate prevailing market conditions during the 2000/01 fiscal year, the following
table shows monthly money market rates, as computed from daily closing bid prices. The
information was obtained from Federal Reserve Bulletins published by the Board of
Governors, Federal Reserve System, and The Bureau of Public Debt.
(Yield in Percent PerAYmwn)
i
y,
(3 !� w�, x pi
e,xx°.i a -; X iw ?�'*^`S+ nit#.`" ,
k4�\ea i a.� asks e°P Via.
.y
2000 • I 5.% 6.54 • • • 1 • 8' • t•
. 6.50 6.11 • I • • • 6.08 • • 6.17
i• bm• 601 • I • •/ •i 6.13 •,
W••ff • • • 6.67 • 0/ • •
DG/ir •i • /'0 5.83• 6.45 5.70 5.60 5.26
•• 5.21 5.51 5.62 5.00 4.81 4.77
/• I4.69 • 4.71
it5.31 4.45 4.81 4.89 I 4.30 4.43
/ 4.80
3.91 4.47 / 88 3.98 4.42
•• 4.02 3.61 3.78 4.51
• 3.69
• 9P W° d w. � � �°� d�'r��,7k- r +�.:: 'fig 'sae � a� $ �'.wk a��.
Note: 3 and 6 month Treasury Issues and 90 day Commercial Paper are quoted on a discount basis.
3
Pooled Money Investment Account
Comparison of Earnings and Average Daily Portfolio
Fiscal Years Ending June 30, 1992 through 2001
Earnings
($ In Millions)
$3,000
2 676
$2,500
tr+1
iti',•
1999
a'.ijj,
$2,000
1,788
1,672
1 482 1 519
$1,500 1,330
1
.
$1,000
err
d
�
r
f
i,
$500
r
f
h
f a
gfJPf
$ 0
w,
1992 1993
1994 1995 1996 1997
1998 1999
2000
2001
)urce: State Treasurer's Office, Division of Investment
4
Pooled Money
Investment Account
The Year In Review
Source: State Treasurer's Office, Division of Investment
Resources of the Pooled Money Investment Account averaged $44,260,140,719
per day during the fiscal year although the daily figures fluctuated widely with receipts
and disbursements. High point for the year occurred June 27, 2001, when the total
reached $57,242,259,235. Resources for the account were lowest on December 8, 2000,
when balances totaled $38,807,371,213.
A breakdown of an average day's resources during the fiscal year shows the
following: $419.7 million in non -interest -bearing bank accounts; $39.522 billion in
securities and General Fund Loans; and $4.318 billion in interest -bearing time deposits.
On the closing day of the fiscal year, the following resources were on hand in the
Pooled Money Investment Account:
Demand bank account $ 735,639,664
Time bank account 4,865,145,000
Securities 49,627,613,483
Total Resources $55922893989147
5
Demand Account Program
Investments of the PMIA are made from monies flowing through the Treasurer's
demand (non -interest -bearing) bank accounts maintained in the seven banks that serve as
State depositories. Currently, the seven depository banks are: Bank of America,
California Bank & Trust, Union Bank of California, United California Bank, U.S. Bank,
Wells Fargo Bonk and Westamerica Bank. A small portion of these funds must remain in
the accounts as compensating balances which consist of (1) a balance for uncollected
funds and (2) a balance for banking services. Uncollected funds represent the total dollar
amount of checks deposited by the State for which the banks give immediate credit, but
for which they do not receive good funds until these checks are presented to the banks on
which they are drawn. The Pooled Money Investment Board allows the banks an average
balance for uncollected funds equivalent to 1.3 calendar days on all checks deposited
other than cashier's checks and checks under the presort of deposit system.
Under the presort Qf deposit system, the major revenue collecting agencies sort
their checks by the five State depository banks and then deposit them directly in the
banks on which 'they are drawn, thus avoiding the need for providing bank balances for
uncollected funds. The remaining checks are deposited under a contract whereby the
depository bank receives bank balances equivalent to 1.345 calendar days for the amount
of such deposits.
The balances allowed for banking services represent compensation for handling
393 thousand deposits, 56.2 million checks deposited, 334 thousand dishonored checks,
$694.9 million in currency deposited, $11.4 million in coin deposited, 112.1 million
warrants and 29.7 thousand checks paid.
All amounts in excess of these compensating balances are promptly invested by
the Treasurer. Intensive and expert analysis of receipts and disbursement data is used
daily to estimate the State's rapidly shifting cash position in order to determine exactly
how much money is available for investment. This results in maximum earnings
consistent with prudent management. R
Compensating balances are determined by a formula, which accounts for the
estimated volume of each service item as well as its unit cost. The rate schedule for the
compensating balance formula is determined through annual negotiations with the State's
depository banks and the cost for any particular service may be raised or lowered as
conditions warrant. Adjustments for the difference between actual and estimated work-
6
load for any fiscal year are made in the following fiscal year. The PMIB made no
changes in the rate schedule for banking services for the 2000/01 fiscal year. In addition
to the rates shown below, the Board agreed to include the costs of account reconciliation
and electronic funds transfer services within the compensating balance formula starting in
the 1991/92 fiscal year. The costs for these two services are paid (with balances) on a
lagged, actual basis when billed by each bank. The Board approved the following rate
schedule for the 2000/01 fiscal year:
Rate, Schedule For Banking Services
2000/01 Fiscal Year
Encoded Checks Deposited
"On Us" ......................................................... $ 0.04
"Other"........................................................... 0.05
Non Encoded Checks Deposited ......................... 0.09
Warrants Paid ..................................................... 0.01
ChecksNd......................................................... 0.1
Dishonored Checks .............................................. 2.75
Deposits............................................................... 1.20
Split Bajzs Deposits ............................................. 0.55
Coin Deposited ................................................... 11.Mper thousan
Currencv Deposited ............................................. 1.05 per thousand
Account Maintenance .......................................... 15.00 per month
Daily Statements .................................................. 6.00 per statement
Source: State Treasurer's Office, Division of Cash Management
7
Average Daily Balance In Demand Bank Accounts
2000/01
($ In Thousands)
Month
Bank Balance
Required for
Ba%kin Services
Bank Balance
Required for
Uncollected Funds
Less Net
Delayed Deposit
Credit
Bank Balance
Prescribed by
PMIB
Actual
Average Daily
Bank Balance
Jul-00
$178,457
$173,774
$3,912
$348,318
$340,056
Aug-00
175,858
179,760
5,585
350,033
356,490
Sep-00
159,223
238,287
7,148
390,362
407,957
Oct-00
163,084
156,970
5,882
314,173
406,499
Nov-00
172,538
194,217
7,292
359,463
360,566
Dec-00
174,833
231,566
8,913
397,486
351,634
Jan-01
161,287
252,589
11,365
402,511
494,691
Feb-01
208,955
268,696
62
477,589
344,507
Mar-01
'197,057
167,809
7,338
357,528
346,283
Apr-01
231,905
450,721
11,591
671,034
701,610
May-01
271,806
278,336
7,179
542,963
443,131
Jun-01
268,013
257,843
8,327
517,530
484,840
Weighted $196,698
Average
$750,000
$650,000
$550,000
$450,000
$350,000
$250,000
$236.768 $7,090 $426.377 $419.720
Average Balance In Demand Bank Accounts
2000/01
($ In Thousands)
S.
b
E Prescribed by PMIB 0 Average Daily
Source: State Treasurer's Office, Division of Cash Management
8
Investment Program
Although the Pooled Money Investment Board designates how much shall be
invested in interest -bearing time accounts in California banks and savings and loan
associations, and in securities, it is the responsibility of the State Treasurer to administer the
investment program on a day-to-day basis in line with overall Board policy. This entails a
daily determination of amounts available for investment, or the need for liquidating securities
to meet estimated warrant redemption requirements, while maintaining the approved
compensating balance position. This means that the State Treasurer must continually adjust
the estimates for receipts and disbursements to reflect current available information.
i
For the 2000/01 fiscal year, investments in time deposits ranged from $3,668,440,000
to $4,865,145,000 and averaged $4,317,935,890. There were 1,639 transactions totaling
$19,680,865,000 during the year. Commercial banks, savings banks and credit unions
receiving these State deposits must secure them with approved securities having a market
value of at least 110 percent of the deposits or with approved promissory notes secured by
mortgages or deeds of trust having a market value of at least 150 percent of the deposits. The
same collateral requirements also apply to the State's demand accounts. At the end of fiscal
year 2000/01, interest -bearing time deposits were held by 93 commercial banks, 17 credit
unions and 14 savings banks throughout California. For the fiscal year, PMIA holdings in
time deposits had an average yield of 5.82 percent.
The amount of money designated by the Board for investment in securities varies
dramatically throughout the year. Such designations are made at least monthly, and again,
the State Treasurer handles the actual investments, determining the issue and maturity of
authorized securities to be bought or sold in accordance with cash needs and both current and
projected market conditions. During fiscal year 2000/01, there were 3,225 security purchase
transactions and 3,025 security sales or redemption transactions, with a total investment
activity of $290.5 billion.
Total earnings for the Pooled Money Investment Account in fiscal year 2000/01
were $2,676,158,235. These earnings were credited as follows:
General Fund $822,696,302
Fish and Game Preservation Fund $ 305,456
Surplus Money Investment Fund $974,657,023
Local Agency Investment Fund $873,410,95b
Public Employee's Retirement Fund $ 2,791,247
State Teacher's Retirement Fund $ 2,297,257
Earnings consisted of $2,424,943,624 from security investments at an average
6.10 percent yield and $251,214,611 from time deposits at an average 5.82 percent yield.
The overall return on investment was 6.10 percent.
The portfolio holdings of the Pooled Money Investment Account for the 2000/01
fiscal year are illustrated in the following table:
Source: State 'Treasurer's Office, Division of Investments
Source: State Treasurer's Office, Division of Investments
10
$4,900,000
$4,600,000
$4,300,000
$4,000,000
$3.700,000
Dollar Amount Of Interest -Bearing
Time nenncitc Rv Mnnth_F.nd
Source: State Treasurer's Office, Division of Investments
Surmjavy of Iravestnaents and Ewurtgs
Fiscal Yeays &bing June 30,1992 through 2001
($ In Thousands)
ENVEgrNIENr IN SECURM ES
. Ave)vge Daily F 7z ngs
Fiscal Year Investment Ewzings Rate /
ENVEgrNEMINUMEDEPOSM
Average Daily F"niW
Fiscal Year Investment bw*w Rate %
1991/92
20,322,527
1,259,654
8.01
1991/92
131,362
6,817
5.19
1992/93
21,499,605
1,013,606
6.20
1992/93
139,146
49977
3.58
1993194
24,322,849
1,068,915
4.71
1993/94
107,647
31700
3.44
1994/95
26,468,520
1,465,018
4.39
1994/95
217,522
12,218
5.62
1995/96
25,362,783
1,448,002
5.53
1995/96
351,060
19,416
5.53
1996/97
27,674,553
1,550,599
5.71
1996/97
419,648
22,376
5.33
1997/98
28,034,192
1,601,603
5.60
1997/98
1,076,268
57,452
5.34
1998/99
31,409,593
1,688,570
5.34
1998/99
1,928,600
93,095
4.83
1999/00
32,177,870
1,845,503
5.71
1999/00
Z820,736
152,310
5.40
2000/01
39,522,485
2,424,943
6.10
2000/01
4,317,9%
251,215
5.82
$45,000
$40,000
$,OW
$30,000
M000
$IAOW
MOW
$10,000
Aveje DMy IrnesUmiits
In ,equities
($ In Mhons)
sqP %qAll��
ti
Source: State Treasurer's Office, Division of Investments
$5,OW
$"
$4,000
u5m
$3,000
V15M
$2,000
$1,500
$1,000
$500
$0
q1
1q
Average Idly hweAnxints
In lime Deposits
($ In IV�llia�)
el ♦q ' '0 " C q "a do
12
Swrvmry of Iravestmer& mul &anings
Fiscal Yecns DIingJune 30,1992 through 2001
($ In 7houscm&)
LOANS TO TBE CENERAL FUND
AvenW Icy Earnings
Fiscal Year Inveshne?d Rate %
Fiscal Year
TOTAL MESIMENIS
Average Daily
Investrreerd
Earnings
Rate(10
1991/92
1,002,544
63,005
6.28
1991/92
21,456,433
1,329,476
6.20
1992/93
1,412792
66,543
4.71
1992/93
23,051,543
1,085,126
4.71
1993/94
1,002,582
43,045
4.29
1993/94
25,433,078
1,115,660
4.39
1994M
116,081
5,338
4.60
1994/95
26,802,123
1,482,574
5.53
1995/96
909,353
51,602
5.67
1995/96
26,623,1%
1,519,020
5.71
1996✓97
169,868
9,468
5.57
1996/97
28,264,069
1,582,443
5.60
1997/98
234,052
13,327
5.69
1997/98
29,344,512
1,67Z382
5.70
1998/99
112,895
6,099
5.40
1998/99
33,451,088
1,787,764
5.34
1999/00
30,428
1,670
5.49
1999/00
35,029,034
1,999,483
5.71
2000✓01
-
-
-
2000/01
43,840,421
2,676,158
6.10
$MO
$6m
$400
$0
Lom To the General FWA
($ In M]Iions)
`�Q�\Q� ,qq��a `���h ,���b ♦qQb�^ `qA^\q4 ,gg4\gq `ggq��0 �o��\��
Source: State Treasure's Office, Division of Investments.
13
Financial Community Coverage
The following firms conducted investment transactions with the Statereasurer's Office
during the 2000-01 Fiscal Year.
A.G. Edwards and Sons, Inc.
American Express Credit Corp
American River Bank
Antelope Valley Bank
Asiana Bank
Associates Corp North America
Banc of America Securities
Banc One Capital Markets, Inc.
Bank of Canton of Californih
Bank of Granada Hills
Bank of Montreal
Bank of Nova Scotia
Bank of Petaluma
Bank of Sacramento
Bank of Santa Clara
Bank of the Sierra
Bank of the West
Bank of Visalia
Bank United Securities Corp
Bay Area Bank
Bay Bank Commerce
Bear Stearns and Company Inc
Borrego Springs Bank
Broadway Federal Bank
Business Bank California
California Center Bank
California ChoHung Bank
California Credit Union
California Federal Bank
California Pacific Bank
CalState 9 Credit Union
Camarillo Community Bank
Canadian Imperial Bank of Commerce
Canyon National Bank
Cathay Bank
Central California Bank
Cerritos Valley Bank
Chapman Company
China Trust Bank (USA)
CitiGroup Securities
Citizens Business Bank
City National Bank
Coast Commercial Bank
CommerzBank
Community Bank
Community Bank of Central California
Community Federal Credit Union
Constitution Capital Corp.
County Bank
Courts & Records Federal Credit Union
Credit Agricole Indosuez
CS/First Boston Corp
Cupertino National Bank
Delta National Bank
Deutsche Bank
Donaldson, Lufkin and Jenrette Inc
East West Federal Bank
Eastern International Bank
EBTEL Federal Credit Union
El Dorado Savings Bank
Eldorado Bank
EuroBrokers Inc
EverTrust Bank
Fahnestock and Company
Farmers & Merchants Bank of Central California
Federal National Mortgage Association
First Bank and Trust
First Bank Beverly Hills
First Bank San Luis Obispo
First Fidelity Investment and Loan
First United Bank
FNB Central California
Ford Motor Credit Corp
Fuji Securities Inc
Fullerton Community Bank
Garvin GuyButler
General Bank
General Electric Capital Corp
General Motors Acceptance Corp
Golden Gate Bank
Golden One Credit Union
Goldman Sachs and Company
Grand National Bank
Racienda Bank
Hanmi Bank
Hawthorne Savings Bank
Heller Financial Company
Heritage Bank of Commerce
Household Finance Corp
HSBC Securities, Inc.
Imperial Bank
J.P. Morgan Chase Securities
La Jolla Bank
Lake Community Bank
Lehman Brothers Holdings, Inc.
Loop Capital Markets
Los Robles Bank
Malaga Bank
Manufacturers Bank
Marathon National Bank
McDonald and Company
Mechanics Bank
Mellon First Business Bank
Mercantile National Bank
Merchants National Bank
Merit Capital Associates, Inc.
Meriwest Credit Union
Merrill Lynch Capital Markets
Mesirow Financial, Inc.
Metro Commerce Bank
Mid Peninsula Bank
Mid State Bank
Millennium Bank
Mission Community Bank
Mission Federal Credit Union
Monterey Bay Bank
Morgan Keegan and Company
Morgan Stanley, Dean Witter & Company
National Bank of the Redwoods
Neighborhood National Bank
North Island Federal Credit Union
North State National Bank
North Valley Bank
Oak Valley Community Bank
Oceanic Bank
Omni Bank
Operating Engineers Federal Credit Union
Pacific Crest Bank
Pacific State Bank
Pacific Union Bank
Pacific Western National Bank
Paribus Corporation
Peninsula Bank of Commerce
PFF Bank and Trust
Plumas Bank
Preferred Bank
Provident Central Credit Union
Prudential Securities
Pryor, McClendon, Counts and Company
Quaker City Bank
Redwood Credit Union
Redwood Securities Group, Inc.
River City Bank
Sae Han Bank
SAFE Credit Union
Salomon Smith Barney
San Jose National Bank
San Luis Trust Bank
Santa Barbara Bank and Trust
Santa Clara Federal Credit Union
Santel Federal Credit Union
Sanwa Bank California
Scripps Bank
Sears Roebuck Acceptance Corp
Securities America, Inc.
SilverGate Bank
Societe Generale
South Bay Bank
South Western Credit Union
Spear, Leeds and Kellogg
State Bank of India (California)
Sunwest Bank
Tehama Bank
TransPacifc Bank
Travis Credit Union
Tri Counties Bank
T t Bank
U. Bank
Union Bank of California
Union Safe Deposit Bank
United Commercial Bank
United Security Bank
US Bancorp Piper Jaffray
Valencia Bank and Trust
Valley Independent Bank
Verdugo Banking Company
Vining Sparks
Warburg Dillon Read
Washington Mutual Bank, FA
Wells Fargo and Company
WesCom Credit Union
WestAmerica Bank
Western Federal Credit Union
Western State Bank
Williams Capital Group
Wilshire State Bank
Xerox Federal Credit Union
14
Surplus Money
Investment Fund
The Surplus Money Investment Fund consists of the available cash of all special
funds which do not have investment authority of their own; and all or a portion of the
available cash of special funds having investment authority of their own, but which have
elected to be included in the program. Cash balances in excess of needs in any of these
participating funds are invested by the State Treasurer.
The Pooled 94oney Investment Board is responsible for determining whether any
cash balances of the participating funds are in excess of current needs and available for
investment, or whether it is necessary to liquidate previous investments to meet current
requirements. This determination is operationally performed by the State Controller's
Office by means of a continuing review of the cash balances of the participating funds.
As a result of these determinations, the State Controller prepares a document for
the Pooled Money Investment Board's approval which authorizes the State Controller to
increase or decrease the contribution balances of the applicable funds.
All of the resources of the Surplus Money Investment Fund are invested through
the Pooled Money Investment Account. Prior to the 1967/68 fiscal year, the Surplus
Money Investment Fund was a separate investment program. In 1967, legislation was
enacted (Chapter 505, Statutes 1967) which provided that money in the Surplus Money
Investment Fund shall be invested through the Pooled Money Investment Account. This
legislation further provided that the Surplus Money Investment Fund -would share in the
interest earnings of the Pooled Money Investment Account. based on the ratio that the
dollar -day contributions of the Surplus Money Investment Fund bear to the dollar -day
investments of the Pooled Money Investment Account.
This legislation increased the potential investment earnings for both programs,
since their high and low resource periods tend to complement each other. Consequently,
under normal market conditions, more long-term, higher yielding securities may be
purchased.
Earnings for 2000/01
Gross earnings totaled $974,657,023 for the 2000/01 fiscal year. This represents
an earning rate 6.12 percent for this investment program.
SMIF earnings are computed on a dollar -day basis to guarantee equitable
distribution among all member funds. An apportionment of the earnings is made by the
Controller twice yearly as of December 31 and June 30.
15
The Year in Review
Source: State Treasurer's Office, Division of Cash Management
Participation
There were over one thousand special funds and accounts participating in the
Surplus Money Investment Fund as of the last day of the fiscal year, June 30, 2001.
Their combined deposits totaled $21,588,923,000.
Large contributors as of June 30, 2001 were the: Department of Water Resources
Electric Power Fund, $4,239,623,000; State Highway Fund, $1,192,124,000; California
Housing Finance Fund, $916,729,000; School Facilities Fund 1998, $864,422,000; Public
Buildings Construction Fund, $722,788,000; Unemployment Compensation Disability
Fund, $544,085,000; California Infrastructure & Economic Development Bank Fund,
$475,092,000; State Lottery Fund, $417,499,000; Special Deposit Fund, $413,947,000.
16
Monthly deposit balances are shown in the following table:
Resources of the Surplus Money investment Fund
2000/01 Fiscal Year (Month -End Balances)
$21,500,000
$19,000,000
$16,500,000
$14,000,000
Source: State Controller's Office, Report of Cash Assets of All Funds in The State Treasury
17
Local Agency
Investment Fund
The Local Agency Investment Fund was established by Chapter 730, Statutes of
1976. This fund enables local governmental agencies or trustees to remit money not
required for immediate needs to the State Treasurer for the purpose of investment. In
order to derive the maximum rate of return possible, the State Treasurer has elected to
invest these monies with State monies as a part of the Pooled Money Investment
Account.
Each participating agency determines the length of time its money will be on
deposit with the State Treasurer with the exception of bond proceeds, which must remain
for a minimum of 30 days. At the end of each calendar quarter, all earnings derived from
investments are distributed by the State Controller to the participating government
agencies in proportion to each agency's respective amounts deposited in the Fund and the
length of time such amounts remained therein. Prior to the distribution, the State's
reasonable costs of administering this program are deducted from the earnings.
Earnings for 2000/01
Gross earnings for fiscal year 2000/01 totaled $873,410,950. This represented a
6.07 percent yield for this investment program.
Participation
As of June 30, 2001, there were 2,928 participants in the Local Agency
Investment Fund consisting of 54 counties, 468 cities, 1,896 special districts, 286 trustees
and 224 bond accounts. Deposits in the fund averaged $14.397 billion for the year.
The Year in Review,
0
Source: State Treasurer's Office, Division of Investments (LAIF)
18
The following table shows monthly resources of the Local Agency Investment Fund
during the 2OOO/01 fiscal year.
Resources of the Local Agency Investment Fund
2000/01 Fiscal Year (Month -End Balances)
$18,000,000
$16,000,000
$14,000,000
$12.000,000
Source: State Treasurer's Office, Division of Investments (LAIF)
Appendix A
POOLED MONEY INVESTMENT ACCOUNT
SUMMARY OF INVESTMENTS AND EARNINGS
($ In Thousands)
t ,
jlift sob A
y a rA.:,„ e �,3 �� F b,
ALM
1957-58 $ 594,306 $ 16,421 2.76
1958-59 544,868 15,762 2.89
1959-60 614,835 21,045 3.42
1960-61 736,204 28,139 3.82 3.23
1961-62 867,144 26,521 3.06 3.19
1962-63 910,863 30,548 3.35 3.31
1963-64 896,535 32,519 3.63 3.46
1964-65 966,592 38,004 3.93 3.56
1965-66 1,083,347 47,761 4.41 3.68 3.48
1966-67 1,057,800 52,540 4.97 4.06 3.62
1967-68 1,1 17,717 56,566 5.06 4.40 3.85
1968-69 1,301,302 78,174 6.01 4.88 4.17
1969-70 1,216,414 84,781 6.97 5.48 4.52
1970-71 1,264,894 77,527 6.13 5.83 4.75 4.32
1971-72 1,397,464 68,350 4.89 5.81 4.93 4.35
1972-73 2,254,401 125,116 5.55 5.91 5.15 4.54
1973-74 2,594,629 232,780 8.97 6.50 5.69 4.94
1974-75 2,749,431 238,298 8.67 6.84 6.16 5.29
1975-76 3,209,143 204,303 6.37 6.89 6.36 5.46
1976-77 4,460,487 261,657 5.87 7.08 6.45 5.65
1977-78 6,843,940 458,625 6.70 7.31 6.61 5.87
1978-79 8,123,266 692,417 8.52 7.22 6.86 6.20
1979-80 8,285,941 873,469 10.54 7.60 7.22 6.64
1980-81 7,298,693 786,877 10.78 8.48 7.69 7.07
1981-82 5,234,524 631,968 12.07 9.72 8.40 7.54
1982-83 5,254,589 549,229 10.45 10.47 8.89 7.90
1983-84 7,094,849 738,462 10.41 10.85. 9.04 8.19
1984-85 11,903,660 1,275,503 10.72 10.891 9.24 8.44
1985-86 15,438,406 1,401,990 9.08 10.55 9.51 8.64
1986-87 19,167,196 1,425,047 7.43 9.62 9.67 8.81
1987-88 17,628,558 1,388,074 7.87 9.10 9.79 8.96
1988-89 17,496,405 1,516,767 8.67 8.75 9.80 8.94
1989-90 19,558,775 1,692,905 8.66 8.34 9.61 8.94
1990-91 20,754,895 1,663,140 8.01 8.13 9.34 9.05
1991-92 21,456,433 1,329,476 6.20 7.88 8.75 9.07
1992-93 23,051,543 1,085,126 4.71 7.25 8.18 8.94
1993-94 25,433,078 1,115,660 4.39 6.39 7.57 8.67
1994-95 26,802,123 1,482,574 5.53 5.77 7.05 8.33
1995-96 26,623,196 1,519,020 5.71 5.31 6.72 7.99
1996-97 28,264,069 1,582,443 5.60 5.19 6.53 7.56
1997-98 29,344,512 1,672,382 5.70 5.38 6.32 7.25
1998-99 33,451,088 1,787,765 5.34 5.58 5.98 6.91
1999-00 35,029,034 1,999,483 5.71 5.61 5.69 6.57
2000-01 43,840,421 2,676,158 , 6.10 5.69 5.50 6.38
Source: The average investment portfolio, earnings and annual earnings rate were taken from the published
Annual Report of the Pooled Monev Investment Board for each fiscal year. Please see the following; note.
20
NOTE TO PMIA SUMMARY OF INVESTMENTS
AND EARNINGS TABLE
The Pooled Money Investment Board was established as an agency of State government
by Chapter 1703, Statutes of 1955, and became operational in April 1956. The 1956-57
fiscal year was the first full year for the Pooled Money Investment Account (PMIA). In
1957-58, the Surplus Money Investment Fund (SMIF) and the Condemnation Deposits
Fund (CDF) were placed under the administration of the PMIB. Separate investment
portfolios were managed for these two funds for a number of years. SMIF operated this
way until the 1967-68 fiscal year, when legislation allowed this fund to be invested as a
part of the PMIA. the CDF continued as a separate investment portfolio until 1975,
when it also was combined with the PMIA. In order to make data for the early years in
the table comparable to the later years (1975-76 and after), the average daily investment
and the annual earnings for both SMIF and CDF were combined with those for the
PMIA. The earning rates for these early years were computed using these combined
figures.
21
HISTORICAL PMIA YIELDS
(Yield In Percent Per Annum)
22
HISTORICAL PNMHIA YIELDS (Continued)
(Yield In Percent Per Annum)
Jan-80
10.98
Feb-80
11.25
Mar-80
11.49
11.11
Apr-80
11.48
May-80
12.02
Jun-80
11.80
10.54
11.54
11.38
Jul-80
10.21
Aug-80
9.87
Sep-80
9.95
10.01
Oct-80
10.06
Nov-80
10.43
Dec-80
10.96
10.47
10.21
Jan-81
10.99
Feb-81
11.69
Mar-81
11.13
11.23
Apr-81
11.48
May-81,
12.18
Jun-81
11.44
10.78
11.68
11.69
Jul-81
12.35
Aug-81
12.84
Sep-81
12.06
12.40
Oct-81
12.40
Nov-81
11.89
Dec-81
11.48
11.91
12.19
Jan-82
11.68
Feb-82
12.04
Mar-82
11.84
11.82
Apr-82
11.77
May-82
12.27
Jun-82
11.99
12.07
11.99
11.93
Jul-82
12.24
Aug-82
11.91
Sep-82
11.15
11.74
Oct-82
11.11
Nov-82
10.70
Dec-82
10.40
1
1 10.71
1 1.1.26
23
HISTORICAL PNIIA YIELDS (Continued)
(Yield In Percent Per Annum)
r � �..
.�. #� �" + � <"F � �,ay t''
�B'`w +q��\ � � -0 �` ��\ ;.h Fit* h
'. '� ideM°kia.. �+ ��.•.. # �
....�... �{
4 E
Feb-83i
/ ''
Nlar-831�
/ •
♦ '
' /
• ' /
10.20
I
10.04
•
1 8
10.16
•
/
/
10.15
I 8,
10.31
• 1 / I
/ ,
10.38
1 .32
♦ i '
' •
/ 8,
/ ,
I
11.36
♦ , ,
11.56
• / / I
11.60
11.53
1 / ,
' • ;
'
Jan-85
8
• t /
' •
/
10.12
10.32
♦ 1
/ .03
JUI-85
9.66
♦ '
'
.42
♦ ' '
/
•
.54
• , '
1 /
•
.49
/ •
,
, ,
9.50
24
HISTORICAL PMIA YIELDS (Continued)
(Yield In Percent Per Annum)
@;.ya,"
y"kk^, t VY tI ":;.�• " .nf
'ie,, �''A ty y$ t t t ` t' :"aG N
_ '� k" k 2 : W: - X
Gt
Jan-86
9.25
Feb-86
9.09
Mar-86
8.06
9.09
Apr-86
8.62
May-86
8.37
Jun-86
8.23
9.08
8.39
8.70
Jul-86
8.14
Aug-86
7.84
Sep-86
7.51
7.81
Oct-86
7.59
Nov-86
7.43
Dec-86
7.44
7.48
7.65
Jan-87
7.37
Feb-87
7.16
Mar-87
7.21
7.24
Apr-87
7.04
May-87
7.29
Jun-87
7.29
7.44
7.21
7.23
Jul-87
7.46
Aug-87
7.56
Sep-87
7.71
7.54
Oct-87
7.83
Nov-87
8.12
Dec-87
8.07
7.97
7.80
Jan-88
8.08
Feb-88
8.05
Mar-88
7.95
8.01
Apr-88
7.94
May-88
7.82
Jun-88
7.93
7.87
7.87
7.95
Jul-88
8.09
Aug-88
8.25
Sep-88
8.34
8.20
Oct-88
8.40
Nov-88
8.47
Dec-88
8.56
1
1 8.45
1
8.34
25
HISTORICAL PNIIA YIELDS (Continued)
(Yield In Percent Per Annum)
Jan-89 8.70
Feb-89 8.77
Mar-89 8.87 8.76
Apr-89 8.99
May-89 9.23
Jun-89 9.20 8.67 9.13 8.97
Jul-89 9.06
Aug-89 8.83
Sep-89 8.80 8.87
Oct-89 8.77
Nov-89 8.69
Dec-89 8.65 8.68 8.78
Jan-90 8.57
Feb-90 8.54
Mar-90 8.51 8.52
Apr-90 8.50
May-90 8.53
Jun-90 8.54 8.66 8.50 8.52
Jul-90 8.52
Aug-90 8.38
Sep-90 8.33 8.39
Oct -go 8.32
Nov-90 8.27
Dec-90 8.28 8.27 8.34
Jan-91 8.16
Feb-91 8.00
Mar-91 7.78 7.97
Apr-91 7.67
May-91 7.37
Jun-91 7.17 8.01 7.38 7.67
Jul-91 7.10
Aug-91 7.07
Sep-91 6.86 7.00
Oct-91 6.72
Nov-91 6.59
Dec-911 6.32 1 6.52 6.74
26
HISTORICAL PMIA YEELDS (Continued)
(Yield In Percent Per Annum)
�' �
ry
Jan-92
6.12
'y° ' ' `" A iF"Nti \ \ v • eV .Vd
II N
\ ;;. , ;ha Y „ta'R a 6 ,,"h:* 1 v WW 1R:ad wR 3'Fa t
1
ftl
Feb-92
5.86
Mar-92
5.68
5.87
Apr-92
5.69
May-92
5.38
Jun-92
5.32
6.20
5.45
5.65
Jul-92
5.24
Aug-92
4.96
Sep-92
4.76
4.97
Oct-92
4.73
Nov-92
4.66
Dec-92
4.65
4.67
4.82
Jan-93
4.68
Feb-93
4.65
Mar-93
4.62
4.64
Apr-93
4.61
May-93
4.43
Jun-93
4.55
4.71
4.51
4.61
Jul-93
4.44
Aug-93
4.47
Sep-93
4.43
4.44
Oct-93
4.38
Nov-93
4.37
Dec-93
4.38
4.36
4.39
Jan-94
4.36
Feb-94
4.18
Mar-94
4.25
4.25
Apr-94
4.33
May-94
4.43
Jun-94
4.62
4.39
4.45
4.36
Jul-94
4.82
Aug-94
4.99
Sep-94
5.11
4.96
Oct-94
5.24
Nov-94
5.38
Dec-94
5.53
1
1
5.37
5.15
27
HISTORICAL PMIA YEELDS (Continued)
(Yield In Percent Per Annum)
xz x x
it's "1 a� � ' ?""-S'9 N * `` , r NF+"We". 4 ,1.:a•.v,yt
Will
sirN 4•NL ** t•.; e w#h t:' n N 7 '*} t e e + v1 Ut ` `\tl�, \v +l i
dd i n
���17��� d y A 1[p ry ; i a t � ■
Jan-95 5.61
Feb-95 5.78
Mar-95 5.93 5.76
Apr-95 5.96
May-95 6.01
Jun-95 6.00 5.53 5.98 5.87
Jul-95 5.97
Aug-95 - 5.91
Sep-95 5.83 5.89
Oct-95 5.78
Nov-95 5.81
Dec-95 5.75 5.76 5.83
Jan-% 5.70
Feb-96 5.64
Mar-% 5.56 5.62
Apr-% 5.54
May-% 5.50
Jun-96 5.55 5.71 5.52 5.56
Jul-% 5.59
Aug-96 5.57
Sep-% 5.60 5.57
Oct-96 5.60
Nov-% 5.60
Dec-% 5.57 5.58 5.57
Jan-97 5.58
Feb-97 5.58
Mar-97 5.58 5.56
Apr-97 5.61
May-97 5.63
Jun-97 5.67 5.59 5.63 5.59
Jul-97 5.68
Aug-97 5.69
Sep-97 5.71 5.68
Oct-97 5.71
Nov-97 5.72
Dec-971 5.74 1 5.71 5.69
HISTORICAL PMIA YIELDS (Continued)
(Veld In Percent Per Annum)
!@ 4
I ,
R Kpr mS..Y.
:� �@{�k
�! f�: �;5
5.74
1� p .
"�( PA(7"
1V 1 i$: `� �C 1 .' 'a« rF� '{X n m.S.v>G)'i
dNy�F'am1 ���p ;W� `:(� qa.��i . �4 T�^M12Y 3��kir" PS . • �i'�F )� ��.�1y P :L"if f�-. .ir
1 1
/ , /
5.68
/
• 1 1
/ 1 1
5.67
Jun-9815.67
'
5.66
5.67
Aug-98:
• , ;
5.64
5.64
1
• 1 1
5.46
5.55
/
• ' 1
' 1 1
1 1
5.09
Jun-99I
5.09
15.18
A ' 1 1
5.22
• , 1 1
Oct-991
•
' 1 1
5.48
• 1 1
5. ,
5.49
,
Jan-00
5.76
• 1 I I
5.82
Nbr-00
/
• / ' I
• .01
• ' '
6.19
I5.71
• .
5.99
29
HISTORICAL PMIA YIELDS (Continued)
(Yield In Percent Per Annum)
cr
1 m p /A� L
Rl. �I�R^,�P.,"
l `4 A4 �`� M�,lY P 1
,"nIM •` p y p a '; 'Y, \ 1 q
'� � $,�
y 1%.PCo
DA
i U
4.1
Jul-00 6.44
Aug-00 6.50
Sep-00 6.50
6.47
Oct-00 6.52
Nov-00 6.54
Dec-00 6.53
6.52
6.49
Jan-01 6.37
Feb-01 6.17
Mar-01 5.98
6.16
Apr-01 5.76
May-01 5.33
Jun-01 4.96 6.10
5.32
5.73
The State Treasurer's Office complies with the Americans With Disabilities Act (ADA). If you need
additional information or assistance, please contact the State Treasurer's Pooled Money Investment Board
at (916) 653-2917.
Philip Aitigell* .
As.xer
<< fixate n.tor
�... . D
.�.wy
y d
4
. h
riL
November 2001
STATE OF CALIFORNIA
STATE TREASURER'S OFFICE
POOLED MONEY INVESTMENT BOARD REPORT
NOVEMBER 2001
TABLE OF CONTENTS
SUMMARY................................................................. 1
SELECTED INVESTMENT DATA .................................... 2
PORTFOLIO COMPOSITION ........................ • • • • • • • • • • • • • • • • 3
INVESTMENT TRANSACTIONS ..................................... 4
TIMEDEPOSITS........................................................ 17
BANK DEMAND DEPOSITS .......................................... 30
POOLED MONEY INVESTMENT BOARD DESIGNATION... 31
POOLED MONEY INVESTMENT ACCOUNT
SUMMARY OF INVESTMENT DATA
A COMPA
RISON OF NOVEMBER 2001 WITH NOVEMBER 2000
(DOLLARS IN THOUSANDS)
11lOVEMBER 2001 NOVEMBEfi 2000 CWANGE
Average Daily Portfolio
50,881,980 $
40,593,203
+10,2889777
$
147,472 $
218,129
-70,657
Accrued, Earnings
3.526
6.538
-3.012
Effective Yield
Average Life -Month End (In Days)
185
192
'7
Total Security Transactions
20,093,305 $
2090469098
+479207
Amount
426
429
-3
Number
Total Time Deposit Transactions
$
197279000 $
1,415,000
+312,000
Amount
107
100
+7
Number
Average Workday Investment Activity
$
1,148,437 $
1,129,531
+18,906
Prescribed Demand Account Balances
$
554,994 $
172,538
+382,456
For Services
$
146,011 $
186,925
-409914
For Uncollected Funds
1
PHILIP ANGELIDES
TREASURER
STATE OF CALIFORNIA
INVESTMENT DIVISION SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO
(000 OMITTED)
November 30, 2001
DIFFERENCE IN
PERCENT OF
TYPE OF SECURITY ' OF PORTFOUO FROM
Government AMOUNT PRIOR MONTH
Bills $ 840,726 1.72 -2.53
Bonds 0 0.00 0.00
Notes
399189374 8.04 +.36,
Strips 0 0.00 0.00
Total Government $ 4,759,100 9.76 -2.17
Federal Agency Coupons
$ 54819412
10.63
+.88
Certificates of Deposit
5,825,135
11.95
+.23
Bank Notes
1,115,009
2.29
-.47
Bankers! Acceptances
0
0.00
0.00
Repurchases
0
0.00
0.00
Federal Agency Discount Notes
12,0741338
24.77
-1.01
Time Deposits
498669545
9.98
+.50
GNMAs
Commercial Paper
868
0.00
0.00
FHLMC
9,726,857
19.96
+1.81
Corporate Bonds
81,820
0.02
0.00
Pooled Loans
2,379,715
4.88
+.28
GF Loans
2,805,384
5.76
-.05
Reversed Repurchases
0
0
0.00
0.00
0
0
Total (All Types)
$ 48,743;183
100.00
0
INVESTMENT ACTIVITY
NOVEMBER 2001
OCTOBER 2001
Pooled Money
NUMBER
AMOUNT
NUMBER
AM_
Other
426
$ 209093,305
586
$ 279612,579
Time Deposits
24
107
21,361
1,7270000
21
120
14,948
2,108,800
Totals
557
$ 21,841,666
727
$ 29,736,327
PMIA Monthly Average Effective Yield
3.526
3.785
Year to Date Yield Last Day of Month
4.149
4.301
K
Commercial
Paper
19.96%
Time Der
9.989
Pooled Money Investment Account
Portfolio Composition
$48.7 Billion
Loans Treasuries
Corporate 5.76% 9.76%
Rnnrla
CD's/BN's
14.24%
3
11 /30/01
es
B Treasuries
B Mortgages
® Agencies
® CD's/BN's
■ Time Deposits
0 Bankers Acceptances
Agencies ■ Repo
35.40% 0 Commercial Paper
0 Corporate Bonds
❑ Loans
0 Reverses
11/01/01 REDEMPTIONS
CD
STNRD CH
3.390% 11/01/01
3.390
$50,000
55
$258,958.33
3.437
CD
STNRD CH
3.390% 11/01/01
3.390
50,000
55
258,958.33
3.437
CP
SAFEWAY
11/01/01
2.750
40,000
1
3,055.56
2.788
CP
GECC
11/01/01
3.390
50,000
66
310,750.00
3.458
CP
GECC
11/01/01
3.390
50,000
66
310,750.00
3.458
CP
GMAC
11/01/01
3.420
50,000
77
365,750.00
3.493
CP
GMAC
11/01/01
3.420
50,000
77
365,750.00
3.493
CP
BEAR
11/01/01
3.550
50,000
94
463,472.22
3.632
CP
BEAR
11101 /01
3.550
50,000
94
463,472.22
3.632
CP
BEAR
11/01/01
3.550
50,000
94
463,472.22
3.632
DISC NOTES
FNMA
11/01/01
3.500
23,000
91
203,486.11
3.580
DISC NOTES
FNMA
11/01/01
3.500
50,000
91
442,361.11
3.580
DISC NOTES
FNMA
11/01/01
3.500
50,000
91
442,361.11
3.580
PURCHASES
BN
W/F
2.090%
02/01/02
2.090
50,000
BN
W/F
2.090%
02/01 /02
2.090
50,000
CD
U/B CALIF
2.070%
03/01/02
2.070
50,000
CD
U/B CALIF
2.070%
03/01/02
2.070
50,000
CP
BEAR
02/21 /02
2.090
20,000
CP
SAFEWAY
11/02/01
2.750
30,000
CP
BEAR
02/21/02
2.090
50,000
11/02/01 REDEMPTIONS
CD
HYPO
2.530% 11/02/01
2.530
50,000
35
122,986.11
2.565
CD
HYPO
2.530% 11/02/01
2.530
50,000
35
122,986.11
2.565
CP
SAFEWAY
11/02/01
2.750
30,000
1
2,291.67
2.788
CP
HELLER
11/02/01
2.980
50,000
29
120,027.78
3.028
CP
HELLER
11/02/01
2.980
50,000
29
120,027.78
3.028
DISC NOTES
FNMA
11/02/01
6.090
40,000
353
2,388,633.33
6.566
NO PURCHASES
11/05/01 REDEMPTIONS
CD
STNRD CH
3.390% 11/05/01
3.390
50,000
59
277,791.67
3.437
CD
STNRD CH
3.390% 11/05/01
3.390
50,000
59
277,791.67
3.437
CP
HELLER
11/05/01
2.950
50,000
24
98,333.33
2.996
CP
FMCC
11/05/01
3.380
50,000
77
361,472.22
3.451
CP
FMCC
11/05/01
3.380
50,000
77
361,472.22
3.451
CP
GMAC
11/05/01
3.420
50,000
81
384,750.00
3.494
CP
GMAC
11/05/01
3.420
50,000
81
384,750.00
3.494
CP
CAFCO
11/05/01
3.450
25,000
84
201,250.00
3.526
4
11/05/01 PURCHASES
CD
DEUTSCHE
CD
DEUTSCHE
CD
CR AGRIC
CP
AMER EXP
CP
CONAGRA
11/06/01 REDEMPTIONS
CP
AMER EXP
CP
HELLER
PURCHASES
CD
HYPO
11/07/01 REDEMPTIONS
DISC NOTES
FNMA
DISC NOTES
FNMA
PURCHASES
CD
TORONTO
CD
TORONTO
CD
TORONTO
CD
TORONTO
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
COUNTRY
CP
COUNTRY
CP
SALOMON
CP
SALOMON
CP
SALOMON
CP
SALOMON
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
COUNTRY
CP
COUNTRY
CP
BEAR
CP
BEAR
CP
CAMPBELL
2.030% 02/08/02
2.030
25,000
2.030% 02/08/02
2.030
50,000
2.030% 02/08/02
2.030
50,000
11/06/01
2.450
50,000
11/16/01
2.500
25,000
11/06/01 2.450 50,000
11/06/01 2.950 50,000
2.040% 02/08/02 2.040 50,000
1 3,402.78 2.484
25 102,430.56 2.997
11/07/01 5.000 50,000 307 2,131,944.44
11/07/01 5.000 50,000 307 2,131,944.44
2.000%
12/10/01
2.000
50,000
2.000%
12/10/01
2.000-
50,000
2.000%
12/10/01
2.000
50,000
2.000%
12/10/01
2.000
50,000
11 /08/01
1.980
50,000
11 /08/01
1.980
50,000
11 /08/01
1.980
50,000
11 /08/01
1.980
50,000
11 /08/01
1.980
50,000
11 /08/01
1.980
50,000
11/13/01
2.070
46,343
11/13/01
2.070
50,000
11/13/01
2.020
50,000
11/13/01
2.020
50,000
11/13/01
2.020
50,000
11/13/01
2.020
50,000
11/16/01
2.000
50,000
11/16/01
2.000
50,000
11/16/01
2.000
50,000
11/16/01
2.000
50,000
11 /21 /01
2.070
33,300
11 /21 /01
2.070
50,000
11 /27/01
2.000
50,000
11/27/01
2.000
50,000
01/29/02
2.050
25,000
5
5.295
5.295
11/08/01 REDEMPTIONS
CP
GECC
11/08/01
1.980
501000
1
2,750.00
2.007
CP
GECC
11/08/01
1.980
50,000
1
2,750.00
2.007
CP
GECC
11/08/01
1.980
50,000
1
2,750.00
2.007
CP
GECC
11/08/01
1.980
50,000
1
2,750.00
2.007
CP
GECC
11/08/01
1.980
50,000
1
2,750.00
2.007
CP
GECC
11/08/01
1.980
50,000
1
2,750.00
2.007
CP
GECC
11/08/01
2.470
50,000
34
116,638.89
2.510
CP
GECC
11/08/01
2.470
50,000
34
116,638.89
2.510
CP
GECC
11/08/01
2.470
50,000
34
116,638.89
2.510
DISC NOTES
FNMA
11/08/01
4.850
48,850
304
2,000,678.89
5.127
DISC NOTES
FNMA
11/08/01
5.780
50,000
331
2,657,194.44
6.189
DISC NOTES
FNMA
11/08/01
5.780
50,000
332
2,665,222.22
6.190
DISC NOTES
FNMA
11/08/01
5.780
50,000
332
2,665,222.22
6.190.
PURCHASES
CD
ABN AMRO
1.880%
02121/02
1.870
50,000
CD
ABN AMRO
1.880%
02/21/02
1.870
50,000
CD
BAYER LNDS
1.880%
02/21/02
1.870
50,000
CD
BAYER LNDS
1.880%
02/21/02
1.870
50,000
CD
BNPARIS
1.875%
02/21/02
1.870
50,000
CD
BNPARIS
1.875%
02/21/02
1.870
50,000
CD
HYPO
1.810%
06/28/02
1.810
50,000
CD
HYPO
1.810%
06/28/02
1.810
50,000
CP
CAMPBELL
02/01/02
2.100
25,000
CP
BEAR
02/28/02
1.820
50,000
CP
GECC
03/01/02
1.810
50,000
CP
GECC
03/01/02
1.810
50,000
CP
GECC
03/04/02
1.810
50,000
CP
GECC
03/04/02
1.810
50,000
CP
CAMPBELL
03/11/02
2.010
25,000
DISC NOTES
FNMA
06/03/02
1.780
50,000
11/09/01 REDEMPTIONS
CP
COUNTRY
11/09/01
2.500
40,000
30
83,333.33
2.540
CP
COUNTRY
11/09/01
2.500
50,000
30
104,166.67
2.540
CP
COUNTRY
11/09/01
2.500
50,000
30
104,166.67
2.540
CP
GMAC
11/09/01
. 3.530
35,000
66
226,508.33
3.602
CP
GMAC
11/09/01
3.530
50,000
66
323,583.33
3.602
CP
NCAT
11/09/01
3.410
15,000
81
115,087.50
3.484
CP
GMAC
11/09/01
3.410
50,000
84
397,833.33
3.485
CP
GMAC
11/09/01
3.410
50,000
84
397,833.33
3.485
CP
CRC
11/09/01
3.510
50,000
93
453,375.00
3.591
CP
CRC
11/09/01
3.510
50,000
93
453,375.00
3.591
CP
NCAT
11/09/01
3.520
50,000
95
464,444.44
3.602
CP
NCAT
11/09/01
3.520
50,000
95
464,444.44
3.602
CP
NCAT
11/09/01
3.520
50,000
95
464,444.44
3.602
6
11/09/01 REDEMPTIONS (continued)
CP
CRC
11/09/01
3.520
50,000
99
484,000.00
3.603
CP
CRC
11/09/01
3.520
50,000
99
484,000.00.
3.603
DISC NOTES
FNMA
11/09/01
5.740
151000
331
791,641.67
6.143
DISC NOTES
FNMA
11/09/01
5.740
50,000
331
2,638,805.56
6.143
PURCHASES
CP
CONAGRA
01 /14/02
2.760
25,000
CP
GMAC
02/08/02
2.880
50,000
DISC NOTES
FHLMC
06/03/02
1.800
24,000
DISC NOTES
FHLMC
06/03/02
1.800
50,000
DISC NOTES
FHLMC
06/28/02
1.800
3,398
DISC NOTES
FHLMC
06/28/02
1.800
50,000
11/13/01 REDEMPTIONS
CP
SALOMON
11/13/01
2.020
50,000
6
16,833.33
2.048
CP
SALOMON
11/13/01
2.020
50,000
6
16,833.33
2.048
CP
SALOMON
11/13/01
2.020
50,000
6
16,833.33
2.048
CP
SALOMON
11/13/01
2.020
50,000
6
16,833.33
2.048
CP
COUNTRY
11/13/01
2.070
46,343
6
15,988.34
2.099
CP
COUNTRY
11/13/01
2.070
50,000
6
17,250.00
2.099
CP
HELLER
11/13/01
2.900
25,000
29
58,402.78
2.947
CP
HELLER
11/13/01
2.900
50,000
29
116,805.56
2.947
CP
CAFCO
11/13/01
3.390
50,000
81
381,375.00
3.463
CP
CAFCO
11/13/01
3.390
50,000
81.
381,375.00
3.463
CP
GMAC
11/13/01
3.410
50,000
84
397,833.33
3.485
CP
GMAC
11/13/01
3.410
50,000
84
397,833.33
3.485
CP
SRAC
11/13/01
3.570
50,000
85
421,458.33
3.650
CP
GMAC
11/13/01
3.410
50,000
88
416,777.78
3.486
CP
GMAC
11/13/01
3.410
50,000
88
416,777.78
3.486
PURCHASES
CD
BAYER
1.980%
01/10/02
1.970
50,000
CD
BAYER
1.980%
01/10/02
1.970
50,000
CD
WASHINGTON
2.030%
02/13/02
2.010
50,000
CD
CR AGRIC
1.890%
02/28/02
1.890
50,000
CD
BN PARIS
1.890%
02/28/02
1.890
50,000
CD
BN PARIS
1.890%
02/28/02
1.890
50,000
CP
COUNTRY
11/14/01
2.100
28,602
CP
COUNTRY
11 /14/01
2.100
50,000
CP
MORG STAN
11 /19/01
1.990
50,000
CP
SRAC
01/22/02
3.000
50,000
CP
FCAR
02/13/02
1.860
50,000
CP
FCAR
02/13/02
1.860
50,000
CP
HOUSEHOLD
02/28/02
1.850
25,000
CP
HOUSEHOLD
02/28/02
1.850
50,000
r7
11/13/01 PURCHASES (continued)
CP
AMER EXP
02/28/02
1.840
50,000
CP
GMAC
03/04/02
2.880
50,000
CP
GMAC
03/04/02
2.880
50,000
11/14/01 REDEMPTIONS
CP
COUNTRY
11/14/01
2.100
28,602
1
1,668.45
2.129
CP
COUNTRY
11/14/01
2.100
50,000
1
2,916.67
2.129
CP
GMAC
11/14/01
2.750
50,000
56
213,888.89
2.800
CP
GMAC
11/14/01
2.750
50,000
56
213,888.89
2.800
PURCHASES
CD
WASHINGTON
2.020%
06/28/02
2.020
50,000
CD
WASHINGTON
2.020%
06/28/02
2.020
50,000
CP
COUNTRY
11/30/01,
2.110
50,000
CP
COUNTRY
11/30/01
2.110
50,000
CP
GECC
-
03/29/02
1.900
50,000
CP
GECC
03/29/02
1.900
50,000
11/15/01 REDEMPTIONS
CD
UBS
3.440%
11/15/01
3.435
50,000
93
443,693.18
3.482
CD
UBS
3.440%
11/15/01
3.435
50,000
93
443,693.18
3.482
CD
CR AGRIC
3.450%
11/15/01
3.450
50,000
93
445,625.00
3.497
CP
AMER EXP
11/15/01
2.350
50,000
57
186,041.67
2.391
CP
AMER EXP
11/15/01
2.350
50,000
57
186,041.67
2.391
CP
JP MORGAN
11/15/01
3.400
50,000
93
439,166.67
3.477
CP
JP MORGAN
11/15/01
3.400
50,000
93
439,166.67
3.477
PURCHASES
CD
UBS
2.010%
06/28/02
2.000
50,000
CD
UBS
2.010%
06/28/02
2.000
50,000
CD
WASHINGTON
2.140%
06/28/02
2.140
50,000
CD
WASHINGTON
2.140%
06/28/02
2.140
50,000
CP
NCAT
11/16/01
2.200
50,000
CP
NCAT
11/16/01
2.200
50,000
CP
COUNTRY
11/27/01
2.120
50,000
CP
COUNTRY
11/27/01
2.120
50,000
CP
COUNTRY
11/27/01
2.120
50,000
CP
CONAGRA
12/03/01
2.210
20,000
CP
GECC
03/08/02
1.980
50,000
CP
GECC
03/08/02
1.980
50,000
CP
GECC
03/11/02
1.980
50,000
CP
GECC
03/11/02
1.980
50,000
DISC NOTES
FHLMC
06/28/02
1.930
50,000
DISC NOTES
FHLMC
06/28/02
1.930
50,000
8
11/20/01 REDEMPTIONS (continued)
CD
UB CALIF
3.420% 11/20/01
3.420
50,000
95
451,250.00
3.467
CD
UB CALIF
3.420% 11/20/01
3.420
50,000
95
451,250.00
3.467
CID
W/F
11/20/01
2.000
50,000
1
2,777.78
2.027
CID
W/F
11/20/01
2.000
50,000
1
2,777.78
2.027
CID
W/F
11/20/01
2.000
50,000
1
2,777.78
2.027
CID
W/F
11/20/01
2.000
50,000
1
2,777.78
2.027
CID
AMER EXP
11/20/01
3.390
50,000
88
414,333.33
3.465
CID
AMER EXP
11/20/01
3.390
50,000
88
414,333.33
3.465
CID
GMAC
11/20/01
3.410
50,000
91
430,986.11
3.487
CID
SRAC
11/20/01
3.830
50,000
111
590,458.33
3.929
DISC NOTES
FHLMC
11/20/01
2.480
50,000
57
196,333.33
2.524
DISC NOTES
FHLMC
11/20/01
2.480
50,000
57
196,333.33
2.524
PURCHASES
CID
JP MORGAN
11/21/01
2.020
50,000
CID
JP MORGAN
11/21/01
2.020
50,000
CID
JP MORGAN
11/21/01
2.020
50,000
CID
JP MORGAN
11/21/01
2.020
50,000
CP
JP MORGAN
11/21/01
2.020
50,000
CID
JP MORGAN
11/21/01
2.020
50,000
11/21/01 REDEMPTIONS
CID
JP MORGAN
11/21/01
2.020
50,000
1
2,805.56
2.048
CID
JP MORGAN
11/21/01
2.020
50,000
1
2,805.56
2.048
CID
JP MORGAN
11/21/01
2.020
50,000
1
2,805.56
2.048
CID
JP MORGAN
11/21/01
2.020
50,000
1
2,805.56
2.048
CID
JP MORGAN
11/21/01
2.020
50,000
1
2,805.56
2.048
CID
JP MORGAN
11/21/01
2.020
50,000
1
2,805.56
2.048
CID
COUNTRY
11/21/01
2.070
33,300
14
26,806.50
2.100
CID
COUNTRY
11/21/01
2.070
50,000
14
40,250.00
2.100
NO PURCHASES
11/26/01 NO SALES
PURCHASES
CID
GECC
12/04/01
2.060
50,000
CID
GECC
12/04/01
2.060
50,000
CID
GECC
12/04/01
2.060
50,000
CID
GECC
12/04/01
2.060
50,000
CID
GECC
12/04/01
2.060
50,000
CID
GECC
12/04/01
2.060
50,000
CID
SRAC
12/06/01
2.400
50,000
CID
SALOMON
12/10/01
2.070
50,000
CID
SALOMON
12/10/01
2.070
50,000
10
11/26/01 PURCHASES (continued)
CP
GECC
12/10/01
2.060
50,000
CID
GECC
12/10/01
2.060
50,000
CID
GECC
12/10/01
2.060
50,000
CID
SALOMON
12/11/01
2.070
50,000
CID
SALOMON
12/11/01
2.070
50,000
CID
GECC
12111 /01
2.060
50,000
CID
GECC
12/11/01
2.060
50,000
CID
GECC
12/11/01
2.060
50,000.
FNMA
3.125% 11/15/03
3.139
50,000
FNMA
3.125% 11/15/03
3.139
50,000
PURCHASE c/
TREAS
BILLS
02/21/02
2.030
2,577
TREAS
BILLS
02/21/02
2.000
2,577
TREAS
BILLS
02/21/02
2.030
50,000
TREAS
BILLS
02/21/02
2.030
50,000
TREAS
BILLS
02/21/02
2.000
50,000
TREAS
BILLS
02/21/02
2.000
50,000
11/27/01 REDEMPTIONS.
CD
WASHINGTON
3.480% 11/27/01
3.480
50,000
96
464,000.00
3.528
CID
COUNTRY
11/27/01
2.120
50,000
12
35,333.33
2.150
CID
COUNTRY
11/27/01
2.120
50,000
12
35,333.33
2.150
CID
COUNTRY
11/27/01
2.120
50,000
12
35,333.33
2.150
CID
BEAR
11/27/01
2.000
50,000
20
55,555.56
2.030
CID
BEAR
11/27/01
2.000
50,000
20
55,555.56
2.030
CID
AMER EXP
11/27/01
3.230
50,000
78
349,916.67
3.297
CID
AMER EXP
11/27/01
3.230
50,000
78
349,916.67
3.297
CID
FCAR
11/27/01
3.240
50,000
78
351,000.00
3.308
CID
FCAR
11/27/01
3.240
50,000
78
351,000.00
3.308
CID
CRC
11/27/01
3.400
50,000
91
429,722.22
3.477
CID
CRC
11/27/01
3.400
50,000
91
429,722.22
3.477
SALE c/
TREAS
BILLS
02/21/02
2.000
2,577'
1
139.56
2.027
TREAS
BILLS
02/21/02
2.030
2,577
1
141.65
2.058
TREAS
BILLS
02/21/02
2.000
50,000
1
2,708.00
2.027
TREAS
BILLS
02/21/02
2.000
50,000
1
2,708.00
2.027
TREAS
BILLS
02/21/02
2.030
50,000
1
2,748.62
2.058
TREAS
BILLS
02/21/02
2.030
50,000
1
2,748.62
2.058
PURCHASES
CID
AMER EXP
12/06/01
2.060
50,000
CID
GMAC
12/06/01
2.250
50,000
11
11/27/01 PURCHASES (continued)
CID GMAC 12/06/01 2.250 50,000
CID GMAC 12/06/01 2.250 50,000
11/28/01 REDEMPTIONS
BN
US BANK
3.430%
11/28/01
3.130
50,000
92
438,277.78
3.477
BN
US BANK
3.430%
11/28/01
3.130
50,000
92
438,277.78
3.477
BN
US BANK
3.430%
11/28/01
3.430
50,000
92
438,277.78
3.477
BN
US BANK
3.430%
11/28/01
3.430
50,000
92
438,277.78
3.477
BN
BANC ONE
3.850%
11/28/01
3.850
50,000
182
973,194.44
3.903
BN
BANC ONE
3.850%
11/28/01
3.850
50,000
182
973,194.44
3.903
BN
BANC ONE
3.850%
11/28/01
3.F'50
50,000
182
973,194.44
3.903
BN
BANC ONE
3.850%
11/28/01
3.850
50,000
182
973,194.44
3.903
CD
CHASE
3.420%
11/28/01
3,410
50,000
93
440,469.61
3.457
CD
CHASE
3.420%
11/28/01
3. ,x 10
50,000
93
440,469.61
3.457
CD
CR AGRIC
3.800%
11/28/01
3."00
50,000
176
928,888.89
3.852
CD
CR AGRIC
3.800%
11/28/01
3.300
50,000
176
928,888.89
3.852
CD
DRESDNER
3.820%
11/28/01
3.310
50,000
182
963,131.10
3.862
CD
DRESDNER
3.820%
11/28/01
3.810
50,000
182
963,131.10
3.862
CD
DRESDNER
3.820%
11/28/01
3.810
50,000
182
963,131.10
3.862
CD
DRESDNER
3.820%
11/28/01
3.810
50,000
182
963,131.10
3.862
CD
MONTREAL
3.830%
11/28/01
3.S30
50,000
182
968,138.89
3.883
CD
MONTREAL
3.830%-
11/28/01
3.730
50,000
182
968,138.89
3.883
CD
SOC GEN
3.830%
11/28/01
3.930
50,000
182
968,138.89
3.883
CID
HOUSEHOLD
11/28/01
3.,260
50,000
82
371,277.78
3.330
CID
HOUSEHOLD
11/28/01
3.260
50,000
82
371,277.78
3.330
CID
GECC
11/28/01
3 360
50,000
100
466,666.67
3.438
CID
GECC
11/28/01'
3.350
50,000
100
466,666.67
3.438
CID
GECC
11/28/01
3,.150
50,000
100
466,666.67
3.438
CID
GECC
11/28/01
3.360
50,000
100
466,666.67
3.438
PURCHASES
CD
WASHINGTON
2.200% 06/28/02
2.200
50,000
CD
WASHINGTON
2.200% 06/28/02
2.200
50,000
CID
DFC
12/12/01
2.070
31,974
CP
HOUSEHOLD
12/18/01
2.030
50,000
CID
HOUSEHOLD
12/18/01
2.030
50,000
CID
GECC
01/11/02
2.040
50,000
CID
GECC
01/11/02
2.040
50,000
CID
GECC
01/11/02
2.040
50,000
DISC NOTES
FHLMC
02/28/02
1.890
20,000
DISC NOTES
FHLMC
02/28/02
1.890
50,000
11/29/01 REDEMPTIONS
CID BEAR 11/29/01 3.510 50,000 120 585,000.00 3.600
CID BEAR 11/29/01 3.510 50,000 120 585,000.00 3.600
12
11/29/01 REDEMPTIONS (continued)
TREAS
BILLS
11/29/01
4.603
50,000
282
1,802,645.83
4.840
TREAS
BILLS
11/29/01
4.603
50,000
282
1,802,645.83
4.840
TREAS
BILLS
11/29/01
4.590
50,000
286
1,823,250.00
4.829
TREAS
BILLS
11/29/01
4.590
50,000
286
1,823,250.00
4.829
TREAS
BILLS
11/29/01
4.555
50,000
289
1,828,326.39
4.793
TREAS
BILLS
11/29/01
4.555
501000
289
1, 828, 326.39
4.793
TREAS
BILLS
11/29/01
4.735
50,000
308
2,025,527.78
5.003
TREAS
BILLS
11/29/01
4.735
50,000
308
2, 025, 527.78
5.003
TREAS
BILLS
11/29/01
4.630
50,000
309
1,987,041.67
4.888
TREAS
BILLS
11/29/01
4.630
50,000
309
1,987,041.67
4.888
TREAS
BILLS
11/29/01
4.755
50,000
316
2,086,916.67
5.031
TREAS
BILLS
11/29/01
4.755
50,000
316
2,086,916.67
5.031
TREAS
BILLS
11/29/01
4.755
50,000
316
2,086,916.65
5.031
TREAS
BILLS
11/29/01
4.755
50,000
316
2,086,916.65
5.031
TREAS
BILLS
11/29/01
4.710
50,000
317
2,073,708.33
4.982
TREAS
BILLS
11/29/01
4.710
50,000
317
2,073,708.33
4.982
TREAS
BILLS
11/29/01
4.630
50,000
322
2,070,638.90
4.897
TREAS
BILLS
11/29/01
4.630
50,000
322
2,070,638.90
4.897
TREAS
BILLS
11/29/01
5.135
50,000
336
2,396,333.33
5.468
TREAS
BILLS
11/29/01
5.135
50,000
336
2,396,333.33
5.468
TREAS
BILLS
11/29/01
5.135
50,000
336
2,396,333.33
5.468
TREAS
BILLS
11/29/01
5.135
50,000
336
'2,396,333.33
5.468
TREAS
BILLS
11/29/01
5.455
50,000
351
2,659,312.50
5.841
TREAS
BILLS
11/29/01
5.455
50,000
351
2,659,312.50
5.841
TREAS
BILLS
11/29/01
5.613
50,000
364
2,837,430.56
6.032
TREAS
BILLS
11/29/01
5.613
50,000
364
2,837,430.56
6.032
TREAS
BILLS
11/29/01
5.615
50,000
364
2,838,694.44
6.035
TREAS
BILLS
11/29/01
5.615
50,000
364.
2,838,694.44
6.035
PURCHASES
CP
COUNTRY
11/30/01
2.180
50,000
CP
COUNTRY
11/30/01
2.180
50,000
CP
SALOMON
11/30/01
2.070
50,000
CP
SALOMON
11/30/01
2.070
50,000
CP
SALOMON
11/30/01
2.070
50,000
CP
SALOMON
11/30/01
2.070
50,000
CP
SALOMON
11/30/01
2.180
50,000
CP
GECC
12/03/01
2.000
50,000
CP
GECC
12/03/01
2.000
50,000
CP
SALOMON
12/03/01
2.080
50,000
CP
SALOMON
12/03/01
2.080
50,000
CP
GECC
12/04/01
2.030
50,000
CP
GECC
12/04/01
2.030
50,000
CP
GECC
12/06/01
2.030
50,000
CP
GECC
12/06/01
2.030
50,000
CP
SALOMON
12/06/01
2.070
50,000
CP
SALOMON
12/06/01
2.070
50,000
13
11/29/01 PURCHASES (continued)
CP
SALOMON
12/06/01
2.070
50,000
CP
SALOMON
12/06/01
2.070
50,000
PURCHASES c/
TREAS
BILLS
05/02/02
2.080
40,000
TREAS
NOTES
6.125% 12/31 /01
2.080
49,211
TREAS
NOTES
6.125% 08/31 /02
2.080
11,295
11/30/01 REDEMPTIONS
CD
ANZ
3.580%
11/30/01
3.580
50,000
162
805,500.00
3.629
CD
ANZ
3.580%
11/30/01
3.580
50,000
162
805,500.00
3.629
CD
RABO
3.670%
11/30/01
3.670
50,000
169
861,430.56
3.720
CD
RABO
3.670%
11/30/01
3.670
50,000
169
861,430.56
3.720
CD
DRESDNER
3.820%
11/30/01
3.810
50,000
178
941,962.38
3.862
CD
DRESDNER
3.820%
11/30/01
3.810
50,000
178
941,962.38
3.862
CD
DRESDNER
3.820%
11/30/01
3.810
'50,000
178
941,962.38
3.862
CD
DRESDNER
3.820%
11/30/01
3.810
50,000
178
941,962.38
3.862
CD
DRESDNER
3.820%
11/30/01
3.810
50,000
178
941,962.38
3.862
CD
DRESDNER
3.820%
11/30/01
3.810
50,000
178
941,962.38
3.862
CP
SALOMON
11/30/01
2.070
50,000
1
2,875.00
2.098
CP
COUNTRY
11/30/01
2.180
50,000
1
3,027.78
2.210
CP
COUNTRY
11/30/01
2.180
50,000
1
3,027.78
2.210
CP
SALOMON
11/30/01
2.070
50,000
1
2,875.00
2.098
CP
SALOMON
11/30/01
2.070
50,000
1
2,875.00
2.098
CP
SALOMON
11/30/01
2.070
50,000
1
2,875.00
2.098
CP
COUNTRY
11/30/01
2.110
50,000
16
46,888.89
2.141
CP
COUNTRY
11/30/01-
2.110
50,000
16
46,888.89
2.141
DISC NOTES
FHLB
11/30/01
2.240
48,800
70
212,551.11
2.281
DISC NOTES
FHLB
11/30/01
2.240
50,000
70
217,777.78
2.281
DISC NOTES
FHLMC
11/30/01
2.250
50,000
70
218,750.00
2.291
DISC NOTES
FHLMC
11/30/01
2.250
50,000
70
218,750.00
2.291
DISC NOTES
FNMA
11/30/01
5.415
50,000
344
2,587,166.67
5.789
DISC NOTES
FNMA
11/30/01
5.415
50,000
344
2,587,166.67
5.789
DISC NOTES
FNMA
11/30/01
5.570
50,000
347
2,684,430.56
5.967
DISC NOTES
FNMA
11/30/01
5.640
32,000
350
1,754,666.67
6.050
DISC NOTES
FNMA
11/30/01
5.740
50,000
352
2,806,222.22
6.165
DISC NOTES
FNMA
11/30/01
5.740
50,000
352
2,806,222.22
6.165
DISC NOTES
FNMA
11/30/01
5.735
50,000
358
2,851,569.44
6.166
DISC NOTES
FNMA
11/30/01
5.735
50,000
358
2,851,569.44
6.166
DISC NOTES
FNMA
11/30/01
5.735
50,000
358
2,851,569.44
6.166
DISC NOTES
FNMA
11/30/01
5.735
50,000
358
2,851,569.44
6.166
DISC NOTES
FNMA
11/30/01
5.735
50,000
358
2,851,569.44
6.166
SALES c/
TREAS BILLS 05/02/02 2.080 40,000 1 2,244.55 2.108
14
11/30/01 SALES c/ (continued)
TREAS
NOTES
TREAS
NOTES
PURCHASES
CP
NCAT
CP
SALOMON
CP
SALOMON
CF
SALOMON
CP
SALOMON
CP
GECC
CP
GECC
CP
GECC
REMIC
FHLMC
FHLB
FHLB
12/31 /01 2.080 49,211
08/31 /02 2.080 11,295
12/03/01
2.130
20,000
12/04/01
2.070
50,000
12/04/01
2.070
50.,000
12/06/01
2.070
50,000
12/06/01
2.070
50,000
12/11/01
2.020
50,000
12/11/01
2.020
50,000
12/11/01
2.020
50,000
5.000% 11 /15/31
4.601
31,610
3.000% 01/30/04
3.000
50,000
3.000% 01/30/04
3.000
50,000
15
1 2,865.89 2.108
1 667.33 2.108
a/ The abbreviations indicate the type of security purchased or sold;
Le., (U.S.) Bills, Bonds, Notes, Debentures, Discount Notes
and Participation Certificates: Federal National Mortgage Association
(FNMA), Farmers Home Administration Notes (FHA), Student Loan
Marketing Association (SLMA), Small Business Association (SBA),
Negotiable Certificates of Deposit (CD), Negotiable Certificates of
Deposit Floating Rate (CD FR), Export Import Notes (EXIM),
Bankers Acceptances (BA), Commercial Paper (CP), Government
National Mortgage Association (GNMA), Federal Home Loan Bank
Notes (FHLB), Federal Land Bank Bonds (FLB), Federal Home Loan
Mortgage Corporation Obligation (FHLMC PC) & (FHLMC GMC),
Federal Farm Credit Bank Bonds (FFCB), Federal Farm Credit Discount
Notes (FFC), Corporate Securities (CB), US Ship Financing Bonds
(TITLE XI'S), International Bank of Redevelopment (IBRD), Tennessee
Valley Authority (TVA), Medium Term Notes (MTN), Real Estate
Mortgage Investment Conduit (REMIC).
b/ Purchase or sold yield based on 360 day calculation for discount
obligations and Repurchase Agreements.
c/ Repurchase Agreement.
d/ Par amount of securities purchased, sold or redeemed.
e/ Securities were purchased and sold as of the same date.
V Repurchase Agreement against Reverse Repurchase Agreement.
MIL/ Outright purchase against Reverse Repurchase Agreement.
h/ Security "SWAP" transactions.
it Buy back agreement.
RRS Reverse Repurchase Agreement.
RRP Termination of Reverse Repurchase Agreement.
16
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT (_) DATE
ALHAMBRA
Grand National Bank
06/25/01
3.500
1,000,000.00
01/07/02 I
Grand National Bank
07/13/01
3.560
2,000,000.00
01/09/02 4
Grand National Bank
11/27/01
2.060
3,000,000.00
05/17/02
Grand National Bank
05/17/01
3.700
3,000,000.00
05/17/02
Grand National Bank
07/13/01
3.520
3,095,000.00
07/12/02
Omni Bank
08/31/01
3.340
3,000,000.00
02/27/02
Omni Bank
10/25/01
2.190
1,300,000.00
04/23/02
Omni Bank
11/21/01
2.040
2,000,000.00
05/20/02 .
Omni Bank
11/30/01
1.870
3,000,000.00
06/03/02
ARROYO GRANDE
Mid -State Bank
06/21/01
3.510
5,000,000.00
12/18/01
Mid -State Bank
07/13/01
3.560
5,000,000.00
01/16/02
Mid -State Bank
08/15/01
3.400
5,000,000.00
02/14/02
Mid -State Bank
09/14/01
3.230
5,000,000.00
03/13/02
Mid -State Bank
10/15/01
2.250
5,000,000.00 _
04/15/02
Mid -State Bank
11/20/01
2.040
5,000,000.00
05/17/02
BEVERLY HILLS
City National Bank
06/05/01
3.650
25,000,000.00
12/03/01
City National Bank
08/20/01
3.380
25,000,000.00
02/15/02
City National Bank
09/05/01
3.330
40,000,000.00
03/07/02
City National Bank
04/16/01
4.170
25,000,000.00
04/16/02
BREA
Jackson Federal Bank
07/26/01
3.560
10,000,000.00
01/22/02
Jackson Federal Bank
11/14/01
1.900
10,000,000.00
05/13/02
Pacific Western National Bank
11/20/01
2.060
1,000,000.00
05/20/02
CALABASAS
First Bank of Beverly Hills FSB
11 /27101
2.040
10,000,000.00
02/27/02
CAMARILLO
First'Califomia Bank
10/30/01
2.150
2,000,000.00
01/29/02
First California Bank
11/02/01
1.980
2,000,000.00
04/30/02
17
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
NAME
DATE
YIELD
AMOUNT (;)
DATE
CHICO
North State National Bank
09/07/01
3.400
1,000,000.00
12/07/01
North State National Bank
04/06/01
4.000
5,000,000.00
01/25/02
North State National Bank
11 /28/01
2.080
1,500,000.00
05/17/02
Tri Counties Bank
09/06/01
3.430
10,000,000.00
12/05/01
Tri Counties Bank
09/11 /01
3.300
10,000,000.00
12/10/01
Tri Counties Bank
09/18/01
2.700
10,000,000.00
12/17/01 .
CHULA VISTA
North Island Federal Credit Union
11/27/01
2.030
5,000,000.00
02/27/02
CITY OF INDUSTRY
EverTrust Bank
06/15/01
3.560
6,000,000.00
12/12/01
EverTrust Bank
07/27/01
3.540
3,000,000.00
01/25/02
EverTrust Bank
07/18/01
3.600
- 3,000,000.00
01/25/02
CONCORD
CA State 9 Credit Union
11 /19/01
1.960
10,000,000.00
02/19/02
DU_
Western State Bank
06/06/01
3.680
2,000,000.00
12/03/01
Western State Bank
08/14/01
3.420
1,000,000.00
02/25/02
Western State Bank
08/27/01
4.430
2,000,000.00
02/25/02
Westem State Bank
10/01/01
2.420
2,000,000.00
04/01/02
DUBLIN
Operating Engineers FCU
09/12/01
3.280
10,000,000.00
12/11/01
Operating Engineers FCU
08/08/01
3.490
5,0000000.00
02/04/02
Operating Engineers FCU
10/11/01
2.230
5,000,000.00
04/09/02
EL CENTRO
-
Valley Independent Bank
08/14/01
3.420
7,500,000.00
02/14/02
Valley Independent Bank
10/31/01
2.040
20,000,000.00
04/30/02
EL SEGUNDO
Hawthome Savings FSB
06/28/01
3.520
60,000,000.00
01/04/02
18
NAME
EL SEGUNDO (continued)
Xerox Federal Credit Union
Xerox Federal Credit Union
FR_ E. SNO
United Security Bank
United Security Bank
United Security Bank
FULLERTON
Fullerton Community Bank
Fullerton Community Bank
GLENDALE
Verdugo Banking Company
GRANADA HILLS
Bank of Granada Hills
HUNTINGTON EACH
First Bank and Trust
First Bank and Trust
First Bank and Trust
INGLEWOOD
Imperial Bank
IRVINE
Commercial Capital Bank
LAKEPORT ,
Lakeport Community Bank
TIME DEPOSITS
DEPOSIT PAR MATURITY
DATE YIELD AM_ O_ UN D_
11 /13/01
09/04/01
10/05/01
07/31 /01
11 /15/01
07/18/01
11/19/01
07/05/01
09/18/01
08/27/01
09/11 /01
10/29/01
09/05/01
10/09/01
06/19/01
19
1.850 20,000,000.00 02/14/02
3.350 7,000,000.00 03/04/02
2.270
5,000,000.00
01/10/02
3.510
15,000,000.00
02/06/02
1.910
10,000,000.00
05/14/02
3.640 8,000,000.00 01/25/02
2.040 91000,000.00 05/17/02
3.660 51000,000.00 01/08/02
2.740 2,000,000.00 * 03/18/02
3.400
2,000,000.00
02/26/02
3.240
12,000,000.00
03/11/02
2.150
3,000,000.00
04/26/02
3.400 63,000,000.00 12/04/01
2.260 6,000,000.00 01/07/02
3.560 2,000,000.00 12/17/01
t
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT (Z) DATE
LA JOLLA
Silvergate Bank 09/14/01 3.310 3,500,000.00 12/13/01
Silvergate Bank 08/08/01 3.520 5,000,000.00 02/04/02
LODI
Farmers & Merchant Bk Cen CA 07/05/01 3.650 10,000,000.00 01/11/02 -
LOS ANGELES
Broadway Federal Bank
07/09/01
3.610
2,500,000.00
01/08/02
Broadway Federal Bank
06/13/01
3.580
3,000,000.00
03/11/02
California Center Bank
10/02/01
2.410
10,000,000.00
01/03/02
California Chohung Bank
07/03/01
3.650
1,500,000.00
01/07/02
California Chohung Bank
07/18/01
3.630
1,000,000.00
01/14/02
California Chohung Bank
11/19/01
1.930
4,000,000.00
02/19/02
Cathay Bank
09/04/01
3.340
30,000,000.00
03/04/02
Cathay Bank
09/26/01
2.430
19,000,000.00
03/25/02
Cathay Bank
10/10/01
2.230
19,000,000.00
04/08/02
Cedars Bank
10/10/01
2.240
2,500,000:00
01/08/02
Cedars Bank
09/06/01
3.460
2,500,000.00
03/06/02
Cedars Bank
10/04/01
2.260
5,000,000.00
04/01/02
Eastern International Bank
06/12/01
3.650
1,000,000.00
12/10/01
Eastern international Bank
11/05/01
1.980
900,000.00
05/07/02
General Bank
06/28/01
3.630
25,000,000.00
12/10/01
General Bank
07/20/01
3.550
15,000,000.00
01/18/02
General Bank
07/30/01
3.540
20,000,000.00
01 /28/02
General Bank
08/07/01
3.490
15,000,000.00
02/08/02
General Bank
05/30/01
3.710
10,000,000.00
02/20/02
General Bank
05/22/01
3.800
20,000,000.00
02/20/02
General Bank
08/13/01
3.400
15,000,000.00
03/07/02
General Bank
06/14/01
3.570
20,000,000.00
03/18/02
Hanmi Bank
09/26/01
2.400
25,000,000.00
12/20/01
Hanmi Bank
10/15/01
2.270
25,000,000.00
01/14/02
Hanmi Bank
11/27/01
2.000
25,000,000.00
02/26/02
Manufacturers Bank
09/10/01
3.330
30,000,000.00
12/11/01
Manufacturers Bank
09/18/01
2.700
20,000,000.00
12/21/01
Manufacturers Bank
11 /01 /01
2.100
10,000,000.00
01 /31 /02
Marathon National Bank
08/06/01
3.510
2,000,000.00
02/04/02
Mellon First Business Bank
06/18/01
3.560
25,000,000.00
01/04/02
Mellon First Business Bank
07/18/01
3.610
25,000,000.00
02/01/02
Mellon First Business Bank
09/24/01
2.360
25,000,000.00
03/20/02
Mercantile National Bank
08/13/01
3.410
2,000,000.00
02/08/02
20
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
NAME
DATE
YIELD
AMOUNT (_)
DATE
LOS ANGELES (continued)
Nara Bank, NA
09/21/01
2.270
5,000,000.00
12/19/01
Nara Bank, NA
10/24/01
2.190
5,000,000.00
04/22/02
Pacific Union Bank
09/06/01
3.460
20,000,000.00
12/05/01
Pacific Union Bank
10/01/01
2.400
10,000,000.00
01/03/02
Preferred Bank
09/17/01
3.000
9,000,000.00
12/18/01
Preferred Bank
08/13/01
3.390
4,000,000.00
02/08/02
Preferred Bank
08/27/01
3.400
7,000,000.00
02/26/02
Preferred Bank
06/11/01
3.600
9,000,000.00
03/08/02
Preferred Bank
07/16/01
3.550
6,000,000.00
07/16/02
Sae Han Bank
10/15/01
2.270
3,000,000.00
01/15/02
Sae Han Bank
10/30/01
2.140
3,000,000.00
01/15/02
State Bank of India (Calif)
08/27/01
3.380
2,000,000.00
02/25/02
State Bank of India (Calif)
06/12/01
3.600
5,500,000.00
04/02/02
State Bank of India (Calif)
07/18/01
3.510
2,000,000.00
07/18/02
Western Federal Credit Union
10/24/01
2.190
25,000,000.00 -
04/22/02
Wilshire State Bank
08/31/01
3.340
4,000,000.00
02/27/02
Wilshire State Bank
11 /06/01
1.970
4,000,000.00
05/06/02
Wilshire State Bank
11 /15/01
1.910
2,000,000.00
05/14/02
Wilshire State Bank
07/13/01
3.540
4,000,000.00
07/12/02
ME-
County Bank
03/09/01
4.500
10,000,000.00
12/07/01
County Bank
07/20/01
3.650
5,000,000.00
01/16/02
County Bank
10/17/01
2.260
5,000,000.00
04/15/02
MONTEREY PARK
Trust Bank FSB
07/02/01
3.660
2,000,000.00
01/02/02
Trust Bank FSB
10/01/01
2.430
4,000,000.00
01/02/02
NATIONAL CITY
t
Neighborhood National Bank
11/21/01
1.990
2,000,000.00-
02/22/02 �-
NORTH HIGHLANDS
Safe Credit Union
07/16/01
3.600
5,000,000.00
01/14/02
Safe Credit Union
08/01/01
3.490
20,000,000.00
02/06/02
21
NAM
OAKDALE
TIME DEPOSITS
DEPOSIT PAR MATURITY
DATE YIELD AM(i) D_
Oak Valley Community Bank
09/05/01
3.380 500,000.00
03/22/02
Oak Valley Community Bank
03/23/01
4.140 1,500 ,000.00
03/22/02
Oak Valley Community Bank
10/10/01
2.210 2,500 ,000.00
04/08/02
Oak Valley Community Bank
06/05/01
3.640 1,500,000.00
06/05/02
OAKLAND
Metropolitian Bank
09/24/01
2.390
1,000,000.00
1,000,000.00
03/25/02
04/29/02
Metropolitian Bank
10/31/01
11/29/01
2.100
1.960
1,000,000.00
05/28/02
Metropolitian Bank
ONT RIO
Citizens Business Bank
03/08/01
4.630
25,000,000.00
12/03/01
Citizens Business Bank
03/26/01
4.150
30,000,000.00
03/26/02
Citizens Business Bank
04/05/01
4.070
25,000,000.00
04/05/02
Citizens Business Bank
05/07/01
3.800
10,000,000.00
05/07/02
Citizens Business Bank
08/22/01
3.480
30,000,000.00
08/22/02
PALO ALTO
Bank of Petaluma
06/19/01
3.570
12,000,000.00
12/17/01
Bank of Petaluma
08/06/01
3.520
1,000,000.00
02/25/02
Bank of Petaluma
06/05/01
3.660
2,500,000.00
02/25/02
Bank of Santa Clara
06/04/01
3.630
20,000,000.00
02/25/02
Bay Area Bank
07/25/01
3.570
5,000,000.00
01/14/02
Bay Area Bank
10/30/01
2.090
5,000,000.00
04/27/02
Bay Bank of Commerce
10/30/01
2.110
3.620
5,000,000.00
5,000,000.00
04/29/02
01/14/02
Coast Commercial Bank
Coast Commercial Bank
07/16/01
06/11 /01
3.620
20,000,000.00
02/25/02
Cupertino National Bank
06/19/01
3.550
10,000,000.00
12/17/01
Cupertino National Bank
07/24/01
3.570
10,000,000.00
01/14/02
Cupertino National Bank
06/01 /01
3.610
20,000,000.00
02/25/02
Cupertino National Bank
10/30/01
2.090
35,000,000.00
04/29/02
Golden Gate Bank
06/01 /01
3.630
9,000,000.00
02/25/02
Mid -Peninsula Bank
06/01 /01
3.620
5,000,000.00
02/25/02
Mid -Peninsula Bank
09/14/01
3.000
10,000,000.00
03/13/02
Mid -Peninsula Bank
10/30/01
2.100
35,000,000.00
04/29/02
Peninsula Bank of Commerce
06/11 /01
3.600
15,000,000.00
02/25/02
22
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT (s) DATE
PASADENA
Community Bank
08/13/01
3.380
15,000,000.00
02/08/02
Community Bank
04/25/01
3.770
5,000,000.00
04/25/02
Community Bank
06/22/01
3.400
20,000,000.00
06/21/02
Community Bank
07/11/01
3.520
20,000,000.00
07/11/02
Wescom Credit Union
06/18/01
3.600
15,000,000.00
12/14/01
Wescom Credit Union
07/30/01
3.540
15,000,000.00
01/28/02 .
Wescom Credit Union
10/09/01
2.270
25,000,000.00
04/08/02
Wescom Credit Union
11 /13/01
1.840
10,000,000.00
05/13/02
PLACERVILLE
El Dorado Savings Bank
02/08/01
4.770
5,000,000.00
02/08/02
El Dorado Savings Bank
03/07/01
4.520
5,000,000.00
03/07/02
El Dorado Savings Bank
03/22/01
4.210
5,000,000.00
03/22/02
El Dorado Savings Bank
04/13/01
4.100
5,000,000.00
04/12/02
El Dorado Savings Bank
04/13/01
4.100
5,000,000.00
04/12/02
El Dorado Savings Bank
05/02/01
3.910
5,000,000.00
05/02/02
El Dorado Savings Bank
06/18/01
3.460
5,000,000.00
06/10/02
El Dorado Savings Bank
06/05/01
3.640
5,000,000.00
06/10/02
PO-
PFF Bank and Trust
03/09/01
4.700
10,000,000.00
12/04/01
PFF Bank and Trust
08/28/01
3.420
8,000,000.00
02/28/02
PORTERVILLE
Bank of the Sierra
10/23/01
2.240
10,000,000.00
01/23/02
UI CY
Plumas Bank
05/23/01
3.800
2,000,000.00
02/20/02
RANCHO SANTA FE
La Jolla Bank, FSB
09/24/01
2.360
10,000,000.00
02/01 /02
La Jolla Bank, FSB
06/06/01
3.620
10,000,000.00
03/01/02
La Jolla Bank, FSB
11 /20/01
2.060
15,000,000.00
05/23/02
La Jolla Bank, FSB
08/06/01
3.500
15,000,000.00
08/06/02
23
NAME
RED BLUFF
Tehama Bank
REDDING
North Valley Bank
REDWOOD CITY
Provident Central Credit Union
RICHMOND
Mechanics Bank
Mechanics Bank
Mechanics Bank
Mechanics Bank
Mechanics Bank
Mechanics Bank
Mechanics Bank
Mechanics Bank
SACRAMENTO_
American River Bank
American River Bank
American River Bank
American River Bank
American River Bank
American River Bank
Bank of Sacramento
Bank of Sacramento,
Bank of Sacramento
Golden One Credit Union
Golden One Credit Union
Golden One Credit Union
Golden One Credit Union
Merchants National Bank
Merchants National Bank
River City Bank
River City Bank
River City Bank
River City Bank
TIME DEPOSITS
DEPOSIT PAR
DATE YIELD AMOUNT (S)
MATURITY
DBE
07/03/01 3.620 5,000,000.00 07/03/02
03/19/01 4.310 3,000,000.00 12/14/01
11 /01 /01 2.020 20,000,000.00 05/01 /02
03/07/01
4.520
10,000,000.00
03/07/02
04/06/01
4.000
10,000,000.00
04/05/02
04/25/01
3.790
10,000,000.00
04/25/02
05/07/01
3.870
10,000,000.00
05/07/02
06/12/01
3.560
10,000,000.00
06/12/02
07/11 /01
3.520
10,000,000.00
07/11 /02
08/13/01
3.490
10,000,000.00
08/13/02
1.0/12/01
2.380
10,000,000.00
10/15/02
10/15/01
2.270
1, 000, 000. 00
01 /11 /02
07/10/01
3.600
1,500,000.00
01/14/02
09/28/01
2.370
1,000,000.00
03/29/02
09/24/01
2.360
3,000,000.00
03/29/02
10/12/01
2.250
1,500,000.00
04/10/02
06/26/01
3.380
1,000,000.00
06/26/02
06/26/01
3.510
1,000,000.00
12/21 /01
11 /15/01
1.930
1,500,000.00
05/14/02
11 /29/01
1.960
2, 000, 000.00
05/28/02
06/08/01
3.610
10,000,000.00
12/05/01
03/23/01
4.120
20,000,000.00
03/22/02
04/25/01
3.770
10,000,000.00
04/25/02
06/08/01
3.600
10,000,000.00
06/07/02
10/19/01
2.210
2,000,000.00
04/17/02
07/23/01
3.460
2,000,000.00
07/23/02
07/03/01
3.660
2,000,000.00
01/07/02
10/29/01
2.190
3,000,000.00
01/28/02
11/26/01
1.970
2,000,000.00
02/26/02
10/04/01
2.330
4,000,000.00
04/01/02
24
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT (s) DATE
SACRAMENTO (continued)
Sanwa Bank of California
07/26/01
3.560
22,000,000.00
01/23/02
U.S. Bank
08/07/01
3.500
25,000,000.00
02/04/02
U.S. Bank
11 /20/01
2.000
25,000,000.00
02/19/02
U.S. Bank
08/07/01
3.550
25,000,000.00
05/06/02
Union Bank of California
09/21/01
2.230
100,000,000.00
12/19/01
Union Bank of California
10/19/01
2.210
50,000,000.00
04/17/02
Union Bank of California
10/29/01
2.100
100,000,000.00
04/17/02
Union Bank of California
11 /09/01
1.800
150,000,000.00
05/08/02
United California Bank
09/07/01
3.380
60,000,000.00
03/06/02
SAL_
Community Bk Central Calif 10/10/01 2.210 10,000,000.00 01/09/02
Community Bk Central Calif 10/25/01 2.170 5,000,000.00 04/23/02
Community Bk Central Calif 10/25/01 2.170 5,000,000.00 04/23/02
SAN BERNARDINO
Business Bank of California 07/10/01 3.630 8,000,000.00 01/09/02
Business Bank of California 08/06/01 3.530 12,000,000.00 02/05/02
SAN DIEGO
First United Bank
02/16/01
4.950
1,000,000.00
02/15/02
Mission Federal Credit Union
08/28/01
3.430
10,000,000.00
02/27/02
First Future Credit Union
09/04/01
3.320
5,000,000.00
03/01/02
First Future Credit Union
11/30/01
1.850
5,000,000.00
05/29/02
Santel Federal Credit Union
06/22/01
3.520
39000,000.00
12/19/01
SAN FRANCISCO
America California Bank
07/30/01
3.570
1,500,000.00
01/28/02
America California Bank
10/31 /01
2.060
1,000,000.00
04/30/02
Bank of Canton California
06/15/01
3.570
20,000,000.00
12/12/01
Bank of Canton California
09/10/01
3.230
20,000,000.00
03/08/02
Bank of Canton California
11 /21 /01
2.050
10,000,000.00
05/22/02
Bank of Canton California
05/22/01
3.770
15,000,000.00
05/22/02
Bank of Canton California
07/16/01
3.550
25,000,000.00
07/16/02
Bank of Canton California
08/31/01
3.470
20,000,000.00
08/30/02
Bank of the West
07/06/01
3.650
34,000,000.00
01 /02/02
Bank of the West
07/09/01
3.600
50,000,000.00
01/08/02
Bank of the West
07/27/01
3.560
76,500,000.00
01 /24/02
25
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT (S) DATE
SAN FRANCISCO (continued)
Bank of the West
08/17/01
3.420
25,000,000.00
02/20/02
Bank of the West
08/02/01
3.560
25,000,000.00
02/20/02
Bank of the West
08/24/01
3.400
50,000,000.00
02/20/02
Bank of the West
10/15/01
2.260
50,000,000.00
04/15/02
Bank of the West
11/20/01
2.050
142,000,000.00
05/20/02
California Federal Bank
07/06/01
3.650
8,000,000.00
01/04/02
California Federal Bank
07/06/01
3.650
42,000,000.00
01/04/02
California Federal Bank
05/24/01
3.730
50,000,000.00
02/22/02
California Federal Bank
10/16/01
2.270
100,000,000.00
04/15/02
California Pacific Bank
03/19/01
4.300
1,000,000.00
12/14/01
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
03/20/01
4.320
25,000,000.00
12/14/01
United Commercial Bank
08/31/01
3.340
30,000,000.00
02/28/02
United Commercial Bank
04/04/01
4.160
30,000,000.00
04/04/02
United Commercial Bank
06/05/01
3.660
10,000,000.00
06/05/02
United Commercial Bank
07/31/01
3.480
40,000,000.00
07/31/02
SAN JOSE
Comerica Bank
10/09/01
2.260
71,000-000.00
01/09/02
Commence Bank of California
10/30/01
2.170
183,000:000.00
02/08/02
Heritage Bank of Commerce
08/17/01
3.410
2,000,000.00
02/15/02
Medwest Credit Union
07/20/01
3.560
5,000,000.00
01/18/02
Merivvest Credit Union
08/10/01
3.490
5,000,000.00
02/06/02
Meriwest Credit Union
08/28/01
3.440
5,000,000.00
02/28/02
San Jose National Bank
04/30/01
3.870
10,000,000.00
04/30/02
San Jose National Bank
11/01/01
2.030
10,000,000.00
04/30/02
Santa Clara Co. Fed. C.U.
08/07/01
3.500
15,000,000.00
02/05/02
SAN LUIS
First Bank of San Luis Obispo
03/19/01
4.310
5,000,000.00
12/14/01
Mission Community Bank
06/12/01
3.650
1,000,000.00
12/10/01
Mission Community Bank
09/10/01
3.250
1,000,000.00
03/08/02
Mission Community Bank
10/11/01
2.240
1,500,000.00
04/09/02
San Luis Trust Bank
10/10/01
2.230
1,350,000.00
01/08/02
San Luis Trust Bank
10/26/01
2.130
1,000,000.00
04/24/02
SAN MARINO
East West Federal Bank 07/06/01 3.660 12,000,000.00 01/04/02
26
NAME
INO (continued
East West Federal Bank
East West Federal Bank
East West Federal Bank
East West Federal Bank
SAN RAFAEL
Metro Commerce Bank
Westamerica Bank
Westamerica Bank
Westamerica Bank
Westamerica Bank
Westamerica Bank
SAN RAMON
EBTEL Federal Credit Union
EBTEL Federal Credit Union
EBTEL Federal Credit Union
EBTEL Federal Credit Union
SANTA BARBARA
FNB of Central California
FNB of Central California
FNB of Central California
FNB of Central California
FNB of Central California
Santa Barbara Bank & Trust
Santa Barbara Bank & Trust
Santa Barbara Bank S Trust
Santa Barbara Bank & Trust
Santa Barbara Bank & Trust
Santa Barbara Bank & Trust
SANTA CLARITA
Valencia Bank & Trust
SANTA MARIA
Hacienda Bank
TIME DEPOSITS
DEPOSIT PAR MATURITY
DATE YIELD AMOUNT (s) DATE
06/04/01
3.590
30,000,000.00
01 /04/02
08/02/01
3.560
35,000,000.00
02/07/02
11 /16/01
1.900
38,000,000.00
05/15/02
11 /28/01
2.080
35,000,000.00
06/10/02
11 /28/01
2.070
1,800,000.00
05/30/02
09/20/01
2.250
25,000,000.00
12/19/01
10/11/01
2.240
50,000,000.00
01 /09/02
11 /04/01
1.840
50,000,000.00
02/07/02
07/18/01
3.510
25,000,000.00
07/18/02
07/30/01
3.490
50,000,000.00
07/30/02
06/22/01
3.520
750,000.00
12/19/01
07/06/01
3.670
1,000,000.00
01 /02/02
08/17/01
3.440
750,000.00
02/13/02
11 /14/01
1.880
1,000,000.00
02/14/02
07/23/01
3.570
5,0009000.00
01/25/02
07/09/01
3.590
10,000,000.00
01/25/02
09/12/01
3.220
10,000,000.00
03/11 /02
10/12/01
2.280
10,000,000.00
04/10/02
11 /30/01
1.860
10,000,000.00
06/03/02
07/06/01
3.650
30,000,000.00
01/25/02
07/27/01
3.560
6,000,000.00
02/08/02
07/27/01
3.560
10,000,000.00
02/08/02
10/01 /01
2.400
10,000,000.00
04/01 /02
11 /01 /01
2.000
10,000,000.00
05/01 /02
11 /30/01
1.850
20,000,000.00
06/03/02
09/17/01 3.000 4,000,000.00 03/19/02
09/11 /01 3.260 1,0000000.00 03/11 /02
27
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT (;) DATE
SANTA ROSA
National Bank of the Redwoods
07/31/01
3.510
5,000,000.00
01/28/02
National Bank of the Redwoods
10/29/01
2.140
10,000,000.00
04/26/02
Redwood Credit Union
07/09/01
3.610
8,000,000.00
12/28/01
Redwood Credit Union
11 /30/01
1.900
17,000,000.00
02/28/02
SONORA
Central California Bank
09/04/01
3.410
1,000,000.00
12/03/01
STOCKTON
Pacific State Bank
07/11 /01
3.620
1,000,000.00
01 /08/02
Pacific State Bank
10/12/01
2.260
1,000,000.00
04/10/02
Union Safe Deposit Bank
016/14/01
3.660
10,000,000.00
12/11/01
Union Safe Deposit Bank
07/16/01
3.640
5,000,000.00
01/23/02
Union Safe Deposit Bank
07/26/01
3.590
10,000,000.00
01/23/02
Union Safe Deposit Bank
08/07/01
3.520
10,000,000.00
02/14/02
Union Safe Deposit Bank
08/22/01
3.420
10,000,000.00
03/01/02
Union Safe Deposit Bank
10/11/01
2.270
10,000,000.00
04/11/02
Union Safe Deposit Bank
11/05/01
2.020
10,000,000.00
05/07/02
Washington Mutual Bank
03/14/01
4.500
30,000,000.00
12/10/01
Washington Mutual Bank
06/26/01
3.470
15,000,000.00
12/21/01
Washington Mutual Bank
10/26/01
2.160
30,000,000.00
01/24/02
Washington Mutual Bank
07/24/01
3.570
30,000,000.00
01/24/02
Washington Mutual Bank
11/28/01
2.000
30,000,000.00
02/19/02
Washington Mutual Bank
08/23/01
3.390
30,000,000.00
02/19/02
SUNNYVALE
Asiana Bank
09/26/01
2.420
1,500,000.00
12/20/01
TORRANCE
China Trust Bank (USA)
09/11 /01
3.300
5,000,000.00
12/14/01
China Trust Bank (USA)
09/06/01
3.480
20,000,000.00
12/14/01
China Trust Bank (USA)
10/19/01
2.240
5,000,000.00
01/18/02
China Trust Bank (USA)
10/19/01
2.240
25,000,000.00
01 /18/02
China Trust Bank (USA)
11/16/01
1.920
20,000,000.00
02/15/02
South Bay Bank
07/27/01
3.560
1,000,000.00
01/25/02
South Bay Bank
06/07/01
3.620
3,000,000.00
03/01 /02
South Bay Bank
09/06/01
3.430
5,000,000.00
03/15/02
South Bay Bank
11 /20/01
2.040
2,000,000.00
03/20/02
28
TIME DEPOSITS
DEPOSIT
NAME DATE
TORRANCE (continued)
South Bay Bank 11 /08/01
TUSTIN
First Fidelity Investment & Loan
09/05/01
First Fidelity Investment & Loan
10/17/01
First Fidelity Investment & Loan
11/06/01
First Fidelity Investment & Loan
11/02/01
Sunwest Bank
09/07/01
Sunwest Bank
10/09/01
Sunwest Bank
10/17/01
Sunwest Bank
11/06/01
Sunwest Bank
11/01/01
VACAVILLE
Travis Credit Union 11/30/01
WATSONVILLE
Monterey Bay Bank
07/02/01
Monterey Bay Bank
09/20/01
WHITTIER
Quaker City Bank
06/27/01
Quaker City Bank
07/12/01
Quaker City Bank
10/16/01
Quaker City Bank
04/06/01
Quaker City Bank
11/27/01
TOTAL TIME DEPOSITS NOVEMBER 2001
29
YIELD
1.780
3.460
2.240
2.030
2.070
3.390
2.230
2.230
2.020
2.080
PAR MATURITY
AMOUNT (s) DATE
4,000,000.00 05/07/02
15, 000, 000.00
12/05/01
10,000,000.00
01/15/02.
6,000,000.00
02/07/02
9,000,000.00
02/07/02
1,000,000.00
12/07/01
3,500,000.00
01/09/02
2, 500, 000.00
01 /25/02
2,000,000.00
02/08/02
5,800,000.00
02/08/02
1.910 40,000,000.00 02/28/02
3.680 8,000,000.00 01/07/02
2.390 8,000,000.00 03/20/02
3.490
10, 000, 000.00
12/28/01
3.570
14,000,000.00
01/08/02
2.280
8,000,000.00
04/05/02
4.000
8,000,000.00
04/05/02
2.080
25,000,000.00
05/24/02
4,866,S459000.00
DAY OF
MONTH
1
2
3
4
5
6
7
a
9
10
11
12
13
14
15
16
17
1a
19
20
21
22
23
24
25
26
27
28
29
30
BANK DEMAND DEPOSITS
NOVEMBER 2001
(; in thousands)
DAILY BALANCES
BALANCES
WARRANTS
PER BANKS
OUTSTANDING
4289534
; 2,429,312
459,529
2,422,036
459,529
29422,036
459,529
2,4229036
567,521
2,2719013
563,355
1,058,766
1,0031196
2,03791"
7599926
210969136
934,081
2,818,219
934,081
2,8189219
9349081
29818,219
934,081
29818,219
7939651
296119258
491,160
2,403,385
511,484
293559573
8619346
391599016
861,346
3,159,016
861,346
39159,016
607,580
31005,362
659,292
2,810,056
302,049
298619241
302,049
29861,241
191869312
298619241
19186,312
2,8619241
1,1869312
298619241
7129338
295969696
876,731
2,8289114
399,929
3,0629707
494,634
2,886,278
7739560
3,432,267
AVERAGE DOLLAR DAYS ; 716,829 a/
a/ The prescribed bank balance for November was $701,005. This consisted of
$554,994 in compensating balances for services, balances for uncollected
funds of $151,163 and a deduction of $5,152 for November delayed
deposit credit.
30
DESIGNATION BY POOLED MONEY INVESTMENT BOARD
OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS
No. 1628
In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its
meeting on October 17, 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 folk)ws:
1. In accordance with law, for deposit in demand
bank accounts as Compensating Balance for Services
$ 327,851,000
The active noninterest-bearing bank accounts designation constitutes a calendar month average balance. For purposes of
computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as
a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any
deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above amount
provided that the balances computed by dividing the sum of daily balances of that calendar month by the number of days in
the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection
periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be maintained in
such a manner as to realize the maximum return consistent with safe and prudent treasury management.
2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest -
bearing deposits in banks and savings and loan associations as follows:
( 1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
From
10/15/2001
10/22/2001
10/29/2001
11 /05/2001
11 /12/2001
11 /19/2001
11/26/2001
12/03/2001
To Transactions
10/19/2001
10/26/2001
11 /02/2001
11 /09/2001
11/16/2001
11 /23/2001
11 /30/2001
12/07/2001
12/ 10/2001 12/ 14/2001
12/17/2001 12/21 /2001
$ (1,411,800,000)
$ 879,500,000
$ (1,051,200,000)
$ 1,583,600,000
$ 403,100,000
$ (1,490,000,000)
$ (2,762,700,000)
$ 494,000,000
$ 231,900,000
$ 3,771,000,000
_
In Securities
(section 16430)*
Time Deposits in
Various Financial
Institutions
(sections 16503a
and 16602)*
$
46,285,655,000
$
4,852,545,000
$
47,165,155,000
$
4,852,545,000
$
46,113,955,000
$
4,852,545,000
$
47,697,555,000
$
4,852,545.000
$
48,100,655,000
$
4,852,545,000
$
46,610,655,000
$
4,852,545,000
$
43,847,955,000
$
4,852,545,000
$
44,341,955,000
$
4,852,545,000
$
44,573,855,000
$
4,852,545,000
$
48,344,855,000
$
4,852,545,000
Estimated
Total
$
$
$
51,138,200,000
52,017,700,000
50,966,500.000
52, 550,100,000
52,953,200,000
51,463,200,000
48,700,500,000
49,194,500,000
49,426,400,000
53,197,400,000
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 $ 327,851,000.
POOLED MONEY INVESTMENT BOARD:
Chairperson
Member
Dated: October 17, 2001
Corrected December 19, 2001
Government Code Member
31
DESIGNATION BY POOLED MONEY INVESTMENT BOARD
OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS
No. 1629
In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its
meeting on November 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
$ 554,994,000
The active noninterest-bearing bank accounts designation constitutes a calendar month average balance. For purposes of
computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as
a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any
deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above amount
provided that the balances computed by dividing the sum of daily balances of that calendar month by the number of days in
the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection
periods or in anticipation of large Impending warrant presentations to the Treasury, but the balances are to be maintained in
such a manner as to realize the maximum return consistent with safe and prudent treasury management.
2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest -
bearing deposits in banks and savings and loan associations as follows:
(1)
(2)
(3)
From To Transactions
11/19/2001 11/23/2001 $ (1,490,000,000)
11/26/2001 11/30/2001 $ (2,762,700,000)
Time Deposits in
Various Financial
Institutions
In Securities (sections 16503a
(section 16430)' and 16602)'
$ 46,590,655,000 $ 4,872,545,000
$ 43,827,955,000 $ 4,872,545,000
12/03/2001 12/07=1 $ 494,000,000 $ 44,321,955,000 $ - 4,872,545,000
Estimated
Total
$ 51,463,200,000
$ 48,700,500,000
$ 49,194,500,000
(4) 12/10/2001 12/14/2001 $ 231,900,000 $ 44,553,855,000 $ 4,872,545,000 $ 49,426,400,000
(5) 12/17/2001 12/21/2001 $ 3,771,000,000 $ 48,324,855,000 $ 4,872,545,000 - $ 53,197,400,000
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 $ 554,994,000.
POOLED MONEY INVESTMENT BOARD:
"tom
Chairperson
Member
Dated: November 21, 2001
Corrected December 19, 2001
' Govemment Code Vmber
Philip Angelides
December 2001
STATE OF CALIFORNIA
STATE TREASURER'S OFFICE
POOLED MONEY INVESTMENT BOARD REPORT
DECEMBER 2001
TABLE OF CONTENTS
SUMMARY................................................................. 1
SELECTED INVESTMENT DATA .................................... 2
PORTFOLIO COMPOSITION ........................................ 3
INVESTMENT TRANSACTIONS ..................................... 4
TIMEDEPOSITS........................................................ 18
BANK DEMAND DEPOSITS .......................................... 31
POOLED MONEY INVESTMENT BOARD DESIGNATION... 32
POOLED MONEY INVESTMENT ACCOUNT
SUMMARY OF INVESTMENT DATA
A COMPARISON OF DECEMBER 2001 WITH DECEMBER 2000
(DOLLARS IN THOUSANDS)
11100 1 DECEMbER 2000 ' GHAtJG�
Average Daily Portfolio $ 48,332,244 $ 401,8259322 +7,5069922
Accrued Earnings $ 1339875 $ 2269605-929730
Effective Yield 3.261 6.535 -3.274
IAverage Life -Month End (In Days) 183 189 -6 I
Total Security Transactions
$
2290849111
$
24,808,298
-2,724,187
Amount
477
541
-64
Number
Total Time Deposit Transactions
$
19563,750
$
1,015,095
+5489655
Amount
113
110
+3
Number
Average Workday Investment Activity
$
1,182,393
$
192919170
-1089777
Prescribed Demand Account Balances
$
573,084
$
174,833
+398,251
For Services
For Uncollected Funds
$
217,067
$
Z22,653
�,586
1
PHILIP ANGELIDES
TREASURER
STATE OF CALIFORNIA
INVESTMENT DIVISION SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO
(000 OMITTED)
TYPE OF SECURITY
Government
Bills
Bonds
Notes
Strips
Total Government
Federal Agency Coupons
Certificates of Deposit
Bank Notes
Bankers' Acceptances
Repurchases
Federal Agency Discount Notes
Time Deposits
GNMAs
Commercial Paper
FHLMC
Corporate Bonds
Pooled Loans
GF Loans
Reversed Repurchases
Total (All Types)
December 31, 2001
DIFFERENCE
PERCENT
PERCENT OF PORTFOLIO
IN
OF
FROM
$
AMOUNT
191389076
PORjFOLM PRIOR
2.29
MONTH
+.57
0
0.00
0.00
493189604
8.68
+.64
0
0.00
0.00
$
594569680
10.97
+1.21
$
59205,539
10.46
-.17
5,240,047
10.53
-1.42
191159009
2.24
-.05
179877
0.03
+0.03
0
0.00
0.00
10992990"
21.96
-2.81
590789795
10.20
+.22
859
0.00
0.00
1195119436
23.13
+3.17
8,621
0.02
0.00
2,5119685
5.05
+.17
29989,262
6.01
+.25
0
0.00
0.00
-3009375
-.60
+.60
$
4997649479
100.00
0
INVESTMENT ACTIVITY
DECEMBER 2001
NUMBER AMOUNT
Pooled Money 477 $ 229084,111
Other 34 76,425
Time Deposits 113 1,563,750
Totals 624 $ 23,7249286
PMIA Monthly Average Effective Yield 3.261
Year to Date Yield Last Day of Month 4.005
K
NOVEMBER 2001
NUMBERAMOUNT
426
$ 20,093,305
24
21,361
107
1,727,000
557
$ 219841,666
3.526
4.149
Pooled Money Investment Account
Portfolio Composition
$49.7 Billion
Reverses
Loans -0.60% Treasuries
Corporate 6.01 % 10.97%
Bonds Mortgages
5.05% 0.02%
Commercial............. . . .
Paper
23.13%
Bankers Acceptances
0.03%
Time Deposits
10.20%
CD's/BN's
12.77%
.41
12/31/01
8 Treasuries
8 Mortgages
0 Agencies
0 CD's/BN's
® Time Deposits
0 Bankers Acceptances
■ Repo
0 Commercial Paper
0 Corporate Bonds
❑ Loans
Cl Reverses
12/03/01 REDEMPTIONS
BN
W/F
3.390%
12/03/01
3.390
$50,000
95
$447,291.67
3.437
BN
W/F
3.390%
12/03/01
3.390
50,000
95
447,291.67
3.437
CD
BN PARIS
2.180%
12/03/01
2.170
50,000
33
99,459.25
2.200
CD
CS/FST BOSTON
3.410%
12/03/01
3.370
50,000
95
445,033.27
3.417
CD
CS/FST BOSTON
3.410%
12/03/01
3.370
50,000
95
445,033.27
3.417
CD
WASHINGTON
3.500%
12/03/01
3.500
30,000
97
282,916.67
3.548
CD
WASHINGTON
3.500%
12/03/01
3.500
50,000
97
471,527.78
3.548
CD
BN PARIS
3.520%
12/03/01
3.515
50,000
123
600,489.30
3.563
CD
BN PARIS
3.520%
12/03/01
3.515
50,000
123
600,489.30
3.563
CD
BAYER LNDS
3.520%
12/03/01
3.510
50,000
124
604,520.57
3.558
CD
BAYER LNDS
3.520%
12/03/01
3.510
50,000
124
604,520.57
3.558
CD
U/B CALIF
3.530%
12/03/01
3.530.
50,000
124
607,944.44
3.579
CD
U/B CALIF
3.530%
12/03/01
3.530
50,000
124
607,944.44
3.579
CD
HSBC
3.530%
12/03/01
3.530
50,000
124
607,944.44
3.579
CP
NCAT
12/03/01
2.130
20,000
3
3,550.00
2.159
CP
SALOMON
12/03/01
2.080
50,000
4
11,555.56
2.109
CP
SALOMON
12/03/01
2.080
50,000
4
11,555.56
2.109
CP
GECC
12/03/01
2.000
50,000
4
11,111.11
2.028
CP
GECC
12/03/01
2.000
50,000
4
11,111.11
2.028
CP
CONAGRA
12/03/01
2.210
20,000
18
22,100.00
2.243
CP
CONAGRA
12/03/01
2.680
45,000
52
174,200.00
2.727
CP
GMAC
12/03/01
3.470
50,000
87
419,291.67
3.547
CP
GMAC
12/03/01
3.470
50,000
87
419,291.67
3.547
CP
FMCC
12/03/01
3.500
50,000
124
602,777.78
3.591
CP
FMCC
12/03/01
3.500
50,000
124
602,777.78
3.591
CP
GECC
12/03/01
3.520
50,000
126
616,000.00
3.613
CP
GECC
12/03/01
3.520
50,000
126
616,000.00
3.613
CP
GECC
12/03/01
3.520
50,000
126
616,000.00
3.613
CP
GECC
12/03/01
3.520
50,000
126
616,000.00
3.613
PURCHASES
CP
GECC
12/11/01
2.030
50,000
CP
GECC
12/11/01
2.030
50,000
CP
GECC
12/11/01
2.030
50,000
CP
GECC
12/11/01
2.030
50,000
CP
FMCC
12/11/01
2.200
50,000
CP
FMCC
12/11/01
2.200
50,000
CP
BEAR
12/18/01
2.020
15,000
CP
BEAR
12/18/01
2.020
50,000
CP
BEAR
12/18/01
2.020
50,000
CP.
CONAGRA
01/14/02
2.760
35,000
PURCHASES c/
DISC NOTES
FNMA
02/28/02
2.080
1,289
DISC NOTES
FNMA
02/28/02
2.080
50,000
N
12/04/01 REDEMPTIONS
CP
SALOMON
12/04/01
2.070
50,000
4
11,500.00
2.099
CP
SALOMON
12/04/01
2.070
50,000
4
11,500.00
2.099
CP
GECC
12/04/01
2.030
50,000
5
14,097.22
2.058
CID
GECC
12/04/01
2.030
50,000
5
14,097.22
2.058
CP
GECC
12/04/01
2.060
50,000
8
22,888.89
2.089
CP
GECC
12/04/01
2.060
50,000
8
22,888.89
2.089
CP
GECC
12/04/01
2.060
50,000
8
22,888.89
2.089
SALES d
DISC NOTES
FNMA
02/28/02
2.080
1,289
1
1
72.57
2,816.32
2.108
2.108
DISC NOTES
FNMA
02/28/02
2.080
50,000
NO PURCHASES
12/05/01 REDEMPTIONS
CP
GECC
12/05/01
2.060
50,000
9
25,750.00
2.089
CP
GECC
12/05/01
2.060
50,000
9
25,750.00
2.089
CP
GECC
12/05/01
2.060
50,000
9
25,750.00
2.089
PURCHASES
CD
UBS
1.950% 06/28/02
1.945
40,000
CP
GMAC
01 /02/02
2.790
50,000
CP
CONAGRA
01/09/02
2.660
10,000
12/06/01 REDEMPTIONS
BN
BANC ONE
3.510% 12/06/01
3.510
50,000
122
594,750.00
3.558
BN
BANC ONE
3.510% 12/06/01
3.510
50,000
122
594,750.00
3.558
CP
SALOMON
12/06/01
2.070
50,000
6
17,250.00
2.099
CP
SALOMON
12/06/01
2.070
50,000
6
17,250.00
2.099
CP
GECC
12/06/01
2.030
50,000
7
19,736.11
2.059
CP
GECC
12/06/01
2.030
50,000
7
19,736.11
2.059
CP
SALOMON
12/06/01
2.070
50,000
7
20,125.00
2.099
CP
SALOMON
12/06/01
2.070
50,000
7
20,125.00
2.099
CP
SALOMON
12/06/01
2.070
50,000
7
20,125.00
2.099
CP
SALOMON
12/06/01
2.070
50,000
7
20,125.00
2.099
CP
GMAC
12/06/01
2.250
50,000
9
28,125.00
2.282
CP
GMAC
12/06/01
2.250
50,000
9
28,125.00
2.282
CP
GMAC
12/06/01
2.250
50,000
9
28,125.00
2.282
CP
AMER EXP
A
12/06/01
2.060
50,000
9
25,750.00
2.089
CP
SME
RAC
12/06/01
2.400
50,000
10
33,333.33
2.434
CP
N
12/06/01
3.250
50,000
90
406,250.00
3.322
DISC NOTES
FNMA
12/06/01
2.450
50,000
73
248,402.78
2.496
DISC NOTES
FNMA
12/06/01
2.450
50,000
73
248,402.78
2.496
5
12/06/01 PURCHASES
BN
US BANK
BN
US BANK
BN
US BANK
BN
US BANK
CD
RABO
CD
RABO
CD
WASHINGTON
CD
WASHINGTON
CD
WASHINGTON
CD
WASHINGTON
CID
SRAC
12/07/01 REDEMPTIONS
DISC NOTES
FFCB
DISC NOTES
FHLB
DISC NOTES
FHLMC
NO PURCHASES
12/10/01 REDEMPTIONS
CD
TORONTO
CD
TORONTO
CD
TORONTO
CD
TORONTO
CID
GECC
CP
GECC
CID
GECC
CID
SALOMON
CID
SALOMON
CID
FCAR
CID
FCAR
CID
HERTZ
MTN FR
CHASE
PURCHASES
CID
FCAR
CID
FCAR
CP
GMAC
CP
GMAC
CID
GMAC
12/11/01 REDEMPTIONS
CID
FMCC
CID
FMCC
2.060%
06/28/02
2.060
50,000
2.060%
06/28/02
2.060
50,000
2.060%
06/28/02
2.060
50,000
2.060%
06/28/02
2.060
50,000
1.940%
06/28/02
1.940
50,000
1.940%
06/28/02
1.940
50,000
2.080%
05/29/02
2.080
50,000
2.080%
05/31 /02
2.080
50,000
2.080%
05/31/02
2.080
50,000
2.080%
05131 /02
2.080
50,000
01 /29/02
2.850
50,000
12/07/01 2.180 31,289 78 147,788.38 2.220
12/07/01 2.270 27,549 77 133,758.05 2.312
12/07/01 2.270 20,000 77 97,105.56 2.312
2.000%
12/10/01
2.000
50,000
33
91,666.67
2.027
2.000%
12/10/01
2.000
50,000
33
91,666.67
2.027
2.000%
12/10/01
2.000
50,000
33
91,666.67
2.027
2.000%
12/10/01
2.000
50,000
33
91,666.67
2.027
12/10/01
2.060
50,000
14
40,055.56
2.090
12/10/01
2.060
50,000
14
40,055.56
2.090
12/10/01
2.060
50,000
14
40,055.56
2.090
12/10/01
2.070
50,000
14
40,250.00
2.100
12/10/01
2.070
50,000
14
40,250.00
2.100
12/10/01
3.380
50,000
95
445,972.22
3.457
12/10/01
3.380
50,000
95
445,972.22
3.457
12/10/01
3.510
48,000
130
608,400.00
3.604
5.819%
12/10/01
6.335
17,5W
794
2,230,487.57
6.051
12/19/01
1.800
50,000
12/19/01
1.800
50,000
03/01 /02
2.680
50,000
03/01/02
2.680
50,000
03/01 /02
2.680
50,000
12/11 /01 2.200 50,000 8 24,444.44 2.231
12/11 /01 2.200 50,000 8 24,444.44 2.231
C�
12/11/01 REDEMPTIONS (continued)
CID
GECC
12/11/01
2.030
50,000
8
22,555.56
2.059
CID
GECC
12/11/01
2.030
50,000
8
22,555.56
2.059
CID
GECC
12/11/01
2.030
50,000
8
22,555.56.
2.059
CID
GECC
12/11/01
2.030
50,000
8
22,555.56
2.059
CID
GECC
12/11/01
2.020
50,000
11
30,861.11
2.049
CID
GECC
12/11/01
2.020
50,000
11
30,861.11
2.049
CID
GECC
12/11/01
2.020
50,000
11
30,861.11
2.049
CID
GECC
12/11/01
2.060
50,000
15
42,916.67
2.090
CID
GECC
12/11/01
2.060
50,000
15
42,916.67
2.090
CID
GECC
12/11/01
2.060
50,000
15
42,916.67
2.090
CID
SALOMON
12/11/01
2.070
50,000
15
43,125.00
2.100
CID
SALOMON
12/11/01
2.070
50,000
15
43,125.00
2.100
PURCHASES
CID
FMCC
02/28/02
2.650
50,000
CID
FMCC
02/28/02
2.650
50,000
CID
FMCC
02/28/02
2.650
50,000
TREAS
NOTES
3.000%
11/30/03
3.000
50,000
TREAS
NOTES
3.000%
11/30/03
3.000
50,000
TREAS
NOTES
3.000%
11/30/03
3.000
50,000
TREAS
NOTES
3.000%
11/30/03
3.000
50,000
TREAS
NOTES
3.000%
11/30/03
3.000
50,000
TREAS
NOTES
3.000%
11/30/03
3.000
-50,000
12/12/01 REDEMPTIONS
CID
DFC
12/12/01
2.070
31,974
14
25,739.07
2.100
DISC NOTES
FHLB
12/12/01
2.050
45,000
.83
212,687.50
2.088
DISC NOTES
FHLB
12/12/01
2.050
50,000
83
236,319.44
2.088
PURCHASES
CID
FMCC
03/11 /02
2.510
50,000
CID
FMCC
03/11/02
2.510
50,000
12/13/01 RRS
TREAS
NOTES
3.000%
11/30/03
1.050
50,000
TREAS
NOTES
3.000%
11/30/03
1.050
50,000
TREAS
NOTES
3.000%
11/30/03
1.050
50,000
TREAS
NOTES
3.000%
11/30/03
1.050
50,000
TREAS
NOTES
3.000%
11/30/03
1.050
50,000
TREAS
NOTES
3.000%
11/30/03
1.050
50,000
12/13/01 REDEMPTIONS
DISC NOTES FFCB 12/13/01 2.050 25,000 84 119,583.33 2.088
7
12/13/01 REDEMPTIONS (continued)
DISC NOTES
FFCB
DISC NOTES
FFCB
DISC NOTES
FHLMC
DISC NOTES
FHLMC
FHLB
FHLB
FHLB
PURCHASES_/
12/13/01
2.050
50,000
84
239,166.67
2.088
12/13/01
2.050
50,000
84
239,166.67
2.088
12/13/01
2.280
10,000
83
52,566.67
2.323
12/13/01
2.280
50,000
83
262,833.33
2.323
6.085% 12/13/01
6.125
50,000
365
3,061,500.00
6.128
6.085% 12/13/01
6.125
50,000
365
3,061,481.40
6.128
6.085% 12/13/01
6.125
50,000
365
3,061,481.40
6.128
CID
GOLDMAN
01/31/02
1.720
50,000
CID
GOLDMAN
01/31/02
1.720
50,000'
CID
GOLDMAN
01/31/02
1.720
50,000
CID
GOLDMAN
01/31/02
1.720
50,000
CID
GOLDMAN
01/31/02
1.720
50,000
CID
GOLDMAN
01/31/02
1.720
50,000
PURCHASES
CD
STNRD CH
1.810% 06/28/02
1.810
50,000
CD
STNRD CH
1.810% 06/28/02
1.810
50,000
CID
COUNTRY
12/27/01
1.800
45,425
CID
NCAT
12/27/01
1.690
50,000
CID
NCAT
12/27/01
1.690
50,000
CID
COUNTRY
12/27/01
1.800
50,000
CID
SALOMON
01 /02/02
1.800
10,000
CID
SALOMON
01/02/02
1.800
50,000
CID
SALOMON
01 /02/02
1.800
50,000
CID
BEAR
01 /25/02
1.770
50,000
CID
AMER EXP
01/25/02
1.760
50,000
CID
HERTZ
02/28/02
2.560
45,000
12/14/01 REDEMPTIONS
DISC NOTES
FNMA
12/14/01
2.270
50,000
84
264,833.33
2.313
DISC NOTES
FNMA
12/14/01
5.420
17,000
351
898,365.00
5.801
DISC NOTES
FNMA
12/14/01
5.420
17,118
351
904,600.71
5.801
DISC NOTES
FNMA
12/14/01
5.420
50,000
351
2,642,250.00
5.801
DISC NOTES
FNMA
12/14/01
5.420
50,000
351
2,642,250.00
5.801
DISC NOTES
FNMA
12/14/01
5.420
50,000
351
2,642,250.00
5.801
DISC NOTES
FNMA
12/14/01
5.420
50,000
351
2,642,250.00
5.801
DISC NOTES
FNMA
12/14/01
5.475
25,000
359
1,364,947.92
5.871
DISC NOTES
FNMA
12/14/01
5.475
50,000
359
2,729,895.83
5.871
DISC NOTES
FNMA
12/14/01
5.475
50,000
359
2,729,895.83
5.871
PURCHASES
CD WASHINGTON 1.930% 05/31/02 1.930 50,000
8
1
12/14/01 PURCHASES (continued)
CD
WASHINGTON
1.930% 05/31 /02
1.930
50,000
CD
WASHINGTON
1.960% 06/28/02
1.960
50,000
CD
WASHINGTON
1.960% 06/28/02
1.960
50,000
CP
W/F_
12/27/01
1.700
25,000
CP
W/F
12/27/01
1.700
50,000
CP
W/F
12/27/01
1.700
50,000
CP
COUNTRY
12/27/01
1.820
50,000
CP
COUNTRY
12/27/01
1.820
50,000
CP
SAFEWAY
01 /02/02
2.250
26,500
12/17/01 REDEMPTIONS
MTN FR GMAC 5.375% 12/17/01 5.098 33,000 922 4,781,874.17
PURCHASES
CP
HOUSEHOLD
12/18/01
1.920
50,000
CP
HOUSEHOLD
12/18/01
1.920
50,000
CP
FCAR
12/26/01
1.760
50,000
CP
FCAR
12/26/01
1.760
50,000
CP
FCAR
12/27/01
1.760
50,000
CP
FCAR
12/27/01
1.760
50,000
CP
SAFEWAY
01 /02/02
2.280
50,000
CP
SALOMON
01 /02/02
1.900
50,000
CP
SALOMON
01 /02/02
1.900
50,000
CP
SALOMON
01 /02/02
1.900
50,000
CP
SALOMON
01/02/02
1.900
50,000
CP
MORG STAN
01 /14/02,
1.820
50,000
CP
MORG STAN
01 /14/02
1.820
50,000
CP
W/F
03/04/02
1.790
50,000
CP
W/F
03/04/02
1.790
50,000
CP
W/F
03/11 /02
1.790
50,000
CP
W/F
03/11/02
1.790
50,000
CP
NCAT
05/20/02
1.850
50,000
CP
NCAT
05/20/02
1.850
50,000
TREAS
BILLS
06/13/02
1.800
50,000
TREAS
BILLS
06/13/02
1.800
50,000
TREAS
BILLS
06/13/02
1.805
50,000
TREAS
BILLS
06/13/02
1.805
50,000
FHLMC
3.250% 12/15/03
3.225
50,000
FHLMC
3.250% 12/15/03
3.225
50,000
FHLMC
3.250% 12/15/03
3.225
50,000
FHLMC
3.250% 12/15/03
3.225
50,000
FHLMC
3.250% 12/15/03
3.230
509000
FHLMC
3.250% 12/15/03
3.240
50,000
FHLMC
3.250% 12/15/03
3.435
50,000
9
6.199
12/18/01 REDEMPTIONS
CP
HOUSEHOLD
12/18/01
1.920
50,000
1
2,666.67
1.946
CP
HOUSEHOLD
12/18/01
1.920
50,000
1
2,666.67
1.946
CP
BEAR
12/18/01
2.020
15,000
15
12,625.00
2.049
CP
BEAR
12/18/01
2.020
50,000
15
42,083.33
2.049
CP
BEAR
12/18/01
2.020
50,000
15
42,083.33
2.049
CP
HOUSEHOLD
12/18/01
2.030
50,000
20
56,388.89
2.060
CP
HOUSEHOLD
12/18/01
2.030
50,000
20
56,388.89
2.060
PURCHASES
CP
COUNTRY
12/19/01
1.870
50,000
CP
COUNTRY
12/19/01
1.870
50,000
CP
GECC
12/27/01
1.780
50,000
CP
GECC
12/27/01
1.780
50,000
CP
CITICORP
01/02/02
1.870
50,000
CP
CITICORP
01/02/02
1.870
50,000
CP
CITICORP
01/02/02
1.870
50,000
CP
CITICORP
01/02/02
1.870
50,000
DISC NOTES
FHLMC
06/20/02
1.820
50,000
DISC NOTES
FHLMC
06/20/02
1.820
50,000
DISC NOTES
FHLMC
06/28/02
1.780
50,000
DISC NOTES
FHLMC
06/28/02
1.780
50,000
DISC NOTES
FNMA
05/30/02
1.780
10,000
DISC NOTES
FNMA
05/30/02
1.780
50,000
TREAS
BILLS
06/13/02
1.765
50,000
TREAS
BILLS
06/13/02
1.765
50,000
TREAS
NOTES
2.750% 09/30/03
3.029
50,000
TREAS
NOTES
2.750% 10/31 /03
3.061
50,000
12/19/01 REDEMPTIONS
CP
COUNTRY
12/19/01
1.870
50,000
1
2,597.22
1.896
CP
COUNTRY
12/19/01
1.870
50,000
1
2,597.22
1.896
CP
FCAR
12/19/01
1.800
50,000
9
22,500.00
1.825
CP
FCAR
12/19/01
1.800
50,000
9
22,500.00
1.825
PURCHASES
CP
NCAT
12/20/01
1.770
50,000
CP
NCAT
12/20/01
1.770
50,000
CP
CITICORP
12/27/01
1.780
50,000
CP
CITICORP
12/27/01
1.780
50,000
CP
GECC
05/20/02
1.850
20,000
CP
NCAT
05/31 /02
1.850
26,000
CP
NCAT
05/31 /02
1.850
50,000
DISC NOTES
FHLB
06/19/02
1.810
50,000
DISC NOTES
FHLB
06/19/02
1.810
50,000
DISC NOTES
FNMA
12/13/02
2.120
50,000
10
12/19/01 PURCHASES (continued)
MTN FR GMAC 2.465% 11/07/03 3.347 5,000
MTN FR GMAC 2.466% 11/07/03 3.347 50,000
12/20/01 REDEMPTIONS
CID
NCAT
12/20/01
1.770
50,000
1
1
2,458.33
2,458.33
1.794
1.794
CID
NCAT
12/20/01
12/20/01
1.770
2.160
50,000
25,364
91
138,487.44
2.202
DISC NOTES
DISC NOTES
FHLB
FNMA
12/20/01
2.260
946
90
5,344.90
2.304
2.304
DISC NOTES
FNMA
12/20/01
12/20/01
2.260
2.190
50,000
40,000
90
91
282,500.00
221,433.33
2.232
DISC NOTES
DISC NOTES
FNMA
FNMA
12/20/01
2.170
25,000
92
138,638.89
2.212
DISC NOTES
FNMA
12/20/01
2.170
50,000
50,000
92
92
277,277.78
277,277.78
2.212
2.212
DISC NOTES
FNMA
12/20/01
12/20/01
2.170
2.170
50,000
92
277,277.78
2.212
DISC NOTES
FNMA
FNMA
12/20/01
2.170
50,000
92
277,277.78
2.212
DISC NOTES
DISC NOTES
FNMA
12/20/01
2.170
50,000
92
277,277.78
2.212
2.212
DISC NOTES
FNMA
12/20/01
12/20/01
2.170
4.310
50,000
50,000
92
248
277,277.78
1,484,555.56
4.503
DISC NOTES
DISC NOTES
FNMA
FNMA
12/20/01
4.310
50,000
248
1,484,555.56
4.503
PURCHASES
CD
NOVA SCOT
1.850% 06/28/02
1.850
25,000
CD
NOVA SCOT
1.850% 06/28/02
1.850
50,000
CID
GECC
12/27/01
1.740
50,000
CID
GECC
12/27/01
1.740
50,000
CP
GECC
12/27/01 •
1.740
50,000
CP
RCAPC
12/31/01
1.730
30,912
CID
RCAPC
12/31/01
1.730
50,000
CP
NCAT
12/31/01
1.720
50,000
CID
NCAT
12/31/01
1.720
50,000
Cp
NCAT
12/31/01
1.720
50,000
CP
NCAT
12/31/01
1.720
50,000
CID
BEAR
01 /02/02
1.880
50,000
CID
BEAR
01 /02/02
1.880
50,000
CP
GECC
01/09/02
1.870
50,000
CP
GECC
01/09/02
1.870
50,000
CP
GECC
01/10/02
1.840
50,000
CP
GECC
01/10/02
1.840
50,000
DISC NOTES
FHLMC
06/20/02
1.820
50,000
DISC NOTES
FHLMC
06/20/02
1.820
50,000
12/21/01 REDEMPTIONS
CD
WESTDEUT
3.600% 12/21/01
3.590
50,000
183
912,503.89
3.639
2.304
DISC NOTES
FHLB
12/21/01
12/21/01
2.260
2.260
30,000
50,000
91
91
171,
285,638.89
2.304
DISC NOTES
FHLB
11
12/21/01 REDEMPTIONS (continued)
FNMA 1,727,742.50 6.114
3,149,801.39 6.114
3,149,801.39 6.114
6.400%
12/21/01
6.114
27,500
374
FNMA
6.400%
12/21/01
6.114
50,000
375
FNMA
6.400%
12/21/01
6.114
50,000
375
PURCHASES
CP
COUNTRY
12/26/01
1.830
41,372
CID
COUNTRY
12/26/01
1.830
50,000
CID
COUNTRY
12/26/01
1.830
50,000
CID
COUNTRY
12/26/01
1.830
50,000
CID
COUNTRY
12/26/01
1.830
50,000
CID
GECC
12/26/01
1.680
50,000
CID
GECC
12/26/01
1.680
50,000
CID
GECC
12/26/01
1.680
50,000
CID
GECC
12/26/01
1.680
50,000
CID
GECC
12/26/01
1.680
50,000
CID
GECC
12/26/01
1.680
50,000
CID
SALOMON
12/26/01
1.760
60,000
CID
SALOMON
12/26/01
1.760
50,000
CID
SALOMON
12/26/01
1.760
50,000
CID
SALOMON
12/26/01
1.760
50,000
CID
SALOMON
12/26/01
1.760
50,000
MTN
GMAC
5.800% 03/12/03
4.150
22,587
MTN
GECC
7.250% 05/03/04
3.840
18,800
MTN
B/A
6.625% 06/15/04
4.110
11,350
12/24/01 REDEMPTIONS
DISC NOTES
FHLB
12/24/01
2.250
50,000
DISC NOTES
FHLB
12/24/01
2.250
50,000
DISC NOTES
FHLB
12/24/01
2.250
50,000
PURCHASES
CID
SALOMON
01/02/02
1.860
5,863
CID
SALOMON
01/02/02
1.860
50,000
CID
SALOMON
01/02/02
1.860
50,000
CID
SALOMON
01/02/02
1.860
50,000
CID
SALOMON
01/02/02
1.860
50,000
CID
CITICORP
01/10/02
1.880
50,000
CID
CITICORP
01/10/02
1.880
50,000
CID
CITICORP
01/22/02
1.850
50,000
CID
CITICORP
01/22/02
1.850
50,000
CID
CITICORP
01/22/02
1.850
50,000
CID
CITICORP
01/22/02
1.850
50,000
CID
FCAR
02/01/02
1.850
50,000
CID
FCAR
02/01 /02
1.850
50,000
CID
FCAR
02/08/02
1.850
50,000
12
94
94
94
293,750.00
293,750.00
293,750.00
2.294
2.294
2.294
12/24/01 PURCHASES (continued)
CP FCAR 02/08/02 1.850 50,000
12/26/01 REDEMPTIONS
CP
COUNTRY
12/26/01
1.830
41,372
5
10,515.38
1.855
CP
COUNTRY
12/26/01
1.830
50,000
5
12,708.33
1.855
CP
COUNTRY
12/26/01
1.830
50,000
5
12,708.33
1.855
CP
COUNTRY
12/26/01
1.830
50,000
5
12,708.33
1.855
CP
COUNTRY
12/26/01
1.830
50,000
5
12,708.33
1.855
CP
GECC
12/26/01
1.680
50,000
5
11,666.67
1.703
CP
GECC
12/26/01
1.680
50,000
5
11,666.67
1.703
CP
GECC
12/26/01
1.680
50,000
5
11,666.67
1.703
CP
GECC
12/26/01
1.680
50,000
5
11,666.67
1.703
CP
GECC
12/26/01
1.680
50,000
5
11,666.67
1.703
CP
GECC
12/26/01
1.680
50,000-
5
11,666.67
1.703
CP
SALOMON
12/26/01
1.760
50,000
5
12,222.22
1.784
CP
SALOMON
12/26/01
1.760
50,000
5
12,222.22
1.784
CP
SALOMON
12/26/01
1.760
50,000
5
12,222.22
1.784
CP
SALOMON
12/26/01
1.760
50,000
5
12,222.22
1.784
CP
SALOMON
12/26/01
1.760
50,000
5
12,222.22
1.784
CP
FCAR
12/26/01
1.760
50,000
9
22,000.00
1.785
CP
FCAR
12/26/01
1.760
50,000
9
22,000.00
1.785
12/26/01 PURCHASES
CP
NCAT
12/27/01
1.840
40,000
CP
SALOMON
12/27/01
1.870
50,000
CP
SALOMON
12/27/01
1.870
50,000
CP
AMER HOME
12/27/01
1.900
50,000
CP
FCAR
02/28/02
1.820
50,000
CP
FCAR
02/28/02
1.820
50,000
DISC NOTES
FNMA
06/13/02
1.840
45,086
DISC NOTES
FNMA
06/13/02
1.840
50,000
DISC NOTES
FNMA
06/20/02
1.830
50,000
DISC NOTES
FNMA
06/20/02
1.830
50,000
DISC NOTES
FNMA
06/20/02
1.830
50,000
DISC NOTES
FNMA
06/27/02
1.840
40,000
DISC NOTES
FNMA
06/27/02
1.840
50,000
DISC NOTES
FNMA
06/27/02
1.840
50,000
DISC NOTES
FNMA
06/27/02
1.840
50,000
DISC NOTES
FNMA
06/27/02
1.840
50,000
DISC NOTES
FNMA
06/27/02
1.840
50,000
DISC NOTES
FNMA
06/27/02
1.840
50,000
DISC NOTES
FNMA
06/27/02
1.840
50,000
DISC NOTES
FNMA
06/27/02
1.840
50,000
MTN
JP MORGAN
7.125% 03/01/05
4.890
22,000
13
12/27/01 REDEMPTIONS
CD
ANZ
2.470%
12/27/01
2.460
50,000
90
307,507.64
2.494
CD
ANZ
2.470%
12/27/01
2.460
50,000
90
307,507.64
2.494
CD
CIBC
2.490%
12/27/01
2.490
20,000
91
125,883.33
2.524
CD
BAYER LNDS
2.420%
12/27/01
2.420
50,000
91
305,861.11
2.453
CD
HELABA
2.420%
12/27/01
2.420
50,000
91
305,861.11
2.453
CD
HELABA
2.420%
12/27/01
2.420
50,000
91
305,861.11
2.453
CD
CIBC
2.490%
12/27/01
2.490
50,000
91
314,708.33
2.524
CD
CIBC
2.490%
12/27/01
2.490
50,000
91
314,708.33
2.524
CD
MONTREAL
2.480%
12/27/01
2.480
50,000
99
341,000.00
2.514
CD
MONTREAL
2.480%
12/27/01
2.480
50,000
99
341,000.00
2.514
CP
NCAT
12/27/01
1.840
40,000
1
2,044.44 _
1.865
CP
SALOMON
12/27/01
1.870
50,000
1
2,597.22
1.896
CP
SALOMON
12/27/01
1.870
50,000
1
2,597.2-2
1.896
CP
AMER HOME
12/27/01
1.900
50,000
1
2,638.89
1.926
CP
GECC
12/27/01
1.740
50,000
7
16,916.67
1.764
CP
GECC
12/27/01
1.740
50,000
7
16,916.67
1.764
CP
GECC
12/27/01
1.740
50,000
7
16,916.67
1.764
CP
CITICORP
12/27/01
1.780
50,000
8
19,777.78
1.805
CP
CITICORP
12/27/01
1.780
50,000
8
19,777.78
1.805
CP
GECC
12/27/01
1.780
50,000
9
22,250.00
1.805
CP
GECC
12/27/01
1.780
50,000
9
22,250.00
1.805
CP
FCAR
12/27/01
1.760
50,000
10
24,444.44
1.785
CP
FCAR
12/27/01
1.760
50,000
10
24,444.44
1.785
CP
W/F
12/27/01
1.700
25,000
13
15,347.22
1.724
CP
W/F
12/27/01
1.700
50,000
13
30,694.44
1.724
CP
W/F
12/27/01
1.700
50,000
13
30,694.44
1.724
CP
COUNTRY
12/27/01
1.820
50,000
13
32,861.11
1.846
CP
COUNTRY
12/27/01
1.820
50,000
13
32,861.11
1.846
CP
COUNTRY
12/27/01
1.800
45,425
14
31,797.50
1.826
CP
NCAT
12/27/01
1.690
50,000
14
32,861.11
1.714
CP
NCAT
12/27/01
1.690
50,000
14
32,861.11
1.714
CP
COUNTRY
12/27/01
1.800
50,000
14
35,000.00
1.826
CP
NCAT
12/27/01
3.380
15,000
112
157,733.33
3.463
CP
NCAT
12/27/01
3.380
50,000
112
525,777.78
3.463
DISC NOTES
FHLMC
12/27/01
2.420
50,000
92
309,222.22
2.468
DISC NOTES
FNMA
12/27/01
2.410
50,000
90
301,250.00
2.458
DISC NOTES
FNMA
12/27/01
2.410
50,000
90
301,250.00
2.458
DISC NOTES
FNMA
12/27/01
2.415
41,730
91
254,744.25
2.463
DISC NOTES
FNMA
12/27/01
2.415
50,000
91
305,229.15
2.463
DISC NOTES
FNMA
12/27/01
2.415
50,000
91
305,229.15
2.463
DISC NOTES
FNMA
12/27/01
2.415
50,000
91
305,229.15
2.463
DISC NOTES
FNMA
12/27/01
2.415
50,000
91
305,229.17
2.463
PURCHASES
BA U/B CALIF 06/18/02 1.900 18,042
CP GECC 03/01/02 1.820 35,000
CP GECC 03/01/02 1.820 50,000
14
12/27/01 PURCHASES (continued)
CID
NCAT
03/01 /02
1.830
50,000
CP
NCAT
03/01 /02
1.830
50,000
CID
NCAT
03/08/02
1.830
50,000
CID
FCAR
03/13/02
1.780
50,000
CID
FCAR
03/13/02
1.780
50,000
DISC NOTES
FNMA
06/27/02
1.840
50,000
DISC NOTES
FNMA
06/27/02
1.840
50,000
MTN
W/F
3.375% 12/29/03
3.440
50,000
12/28/01 REDEMPTIONS
DISC NOTES
FHLMC
12/28/01
2.280
25,000
98
155,166.67
2.326
DISC NOTES
FNMA
12/28/01
4.850
27,063
343
1,250,573.71
5.155
DISC NOTES
FNMA
12/28/01
4.850
25,000
353
1,188,923.61
5.162
DISC NOTES
FNMA
12/28/01
4.850
35,000
353
1,664,493.06
5.162
DISC NOTES
FNMA
12/28/01
4.800
25,000
354
1,180,000.00
5.107
DISC NOTES
FNMA
12/28/01
4.920
25,000
357
1,219,750.00
5.244
DISC NOTES
FNMA
12/28/01
4.900
25,000
357
1,214,791.67
5.221
DISC NOTES
FNMA
12/28/01
4.880
50,000
357
2,419,666.67
5.199
DISC NOTES
FNMA
12/28/01
4.880
50,000
357
2,419,666.67
5.199
DISC NOTES
FNMA
12/28/01
4.900
50,000
357
2,429,583.33
5.221
DISC NOTES
FNMA
12/28/01
4.970
35,986
358
1,778,568.06
5.301
DISC NOTES
FNMA
12/28/01
4.970
50,000
358
2,471,194.44
5.301
DISC NOTES
FNMA
12/28/01
4.970-
50,000
358
2,471,194.44
5.301
PURCHASES
CID
NCAT
01/14/02
1.920
50,000
CID
NCAT
01 /14102
1.920
50,000
CID
NCAT
01/14/02
1.920
50,000
CID
SALOMON
01/29/02
1.830
50,000
CID
SALOMON
01/29/02
1.830
50,000
CID
SALOMON
01/29/02
1.830
50,000
CID
SALOMON
01/29/02
1.830
50,000
DISC NOTES
FHLMC
06/28/02
1.780
50,000
DISC NOTES
FHLMC
06/28/02
1.780
50,000
DISC NOTES
FHLMC
06/28/02
1.780
50,000
12/31/01 REDEMPTIONS
CID
RCAPC
12/31/01
1.730
30,912
11
16,340.43
1.754
CID
RCAPC
12/31/01
1.730
50,000
11
26,430.56
1.754
CID
NCAT
12/31/01
1.720
50,000
11
26,277.78
1.744
CID
NCAT
12/31/01
1.720
50,000
11
26,277.78
1.744
CID
NCAT
12/31/01
1.720
50,000
11
26,277.78
1.744
CID
NCAT
12/31/01
1.720
50,000
11
26,277.78
1.744
DISC NOTES
FHLB
12/31/01
2.250
10,000
101
63,125.00
2.295
DISC NOTES
FHLB
12/31/01
2.250
50,000
101
315,625.00
2.295
15
12/31/01 REDEMPTIONS (continued)
DISC NOTES
FHLMC
DISC NOTES
FHLMC
12/31/01 PURCHASES
CP
GECC
CP
FCAR
CP
FCAR
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
NCAT
CP
NCAT
CP
NCAT
CP
NCAT
CP
SALOMON
CP
SALOMON
12/31 /01 2.250 16,028 102 102,178.50 2.295
12/31 /01 2.250 50,000 102 318,750.00 2.295
01 /25/02
1.750
20,000
01 /25/02
1.760
34,000
01 /25/02
1.760
50,000
01 /25/02
1.750
50,000
01 /25/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
01/29/02
1.750
50,000
a/ The abbreviations indicate the type of security purchased or sold;
I.e., (U.S.) Bills, Bonds, Notes, Debentures, Discount Notes
and Participation Certificates: Federal National Mortgage Association
(FNMA), Fanners Home Administration Notes (FHA), Student Loan
Marketing Association (SLMA), Small Business Association (SBA),
Negotiable Certificates of Deposit (CD), Negotiable Certificates of
Deposit Floating Rate (CD FR), Export Import Notes (EXIM),
Bankers Acceptances (BA), Commercial Paper (CP), Government
National Mortgage Association (GNMA), Federal Home Loan Bank
Notes (FHLB), Federal Land Bank Bonds (FLB), Federal Home Loan
Mortgage Corporation Obligation (FHLMC PC) & (FHLMC GMC),
Federal Farm Credit Bank Bonds (FFCB), Federal Farm Credit Discount
Notes (FFC), Corporate Securities (CB), US Ship Financing Bonds
(TITLE XIS), International Bank of Redevelopment (113RD), Tennessee
Valley Authority (TVA), Medium Term Notes (MTN), Real Estate
Mortgage Investment Conduit (REMIC).
b/ Purchase or sold yield based on 360 day calculation for discount
obligations and Repurchase Agreements.
C/ Repurchase Agreement.
d/ Par amount of securities 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.
1 Buy back agreement.
RRS Reverse Repurchase Agreement.
RRP Termination of Reverse Repurchase Agreement.
17
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT (:) DATE
ALHAMBRA
Grand National Bank
06/25/01
3.500
1,000,000.00
01 /07102
Grand National Bank
07/13/01
3.560
2,000,000.00
01 /09/02
Grand National Bank
11/27/01
2.060
.3,000,000.00
05/17/02
Grand National Bank
05/17/01
3.700
3,000,000.00
05/17/02
Grand National Bank
07/13/01
3.520
3,095,000.00
07/12/02
Omni Bank ,
08/31 /01
3.340
3,000,000.00
02/27/02
Omni Bank
10/25/01
2.190
1,300,000.00
04/23/02
Omni Bank
11/21/01
2.040
2,000,000.00
05/20/02 .
Omni Bank
11 /30/01
1.870
3,0000000.00
06/03/02
ARROYO GRANDE
Mid -State Bank
07/13/01
3.560
5,000,000.00
01/16/02
Mid -State Bank
08/15/01
3.400
5,000,000.00
02/14/02
Mid -State Bank
09/14/01
3.230
5,000,000.00
03/13/02
Mid -State Bank
10/15/01
2.250
5,000,000.00
04/15/02
Mid -State Bank
11/20/01
2.040
5,000,000.00
05/17/02
Mid -State Bank
12/18/01
1.870
5,000,000.00
06/14/02
BEVERLY HILLS
City National Bank
08/20/01
3.380
25,000,000.00
02/15/02
City National Bank
09/05/01
3.330
40,000,000.00
03/07/02
City National Bank
04/16/01
4.170
25,000,000.00
04/16/02
City National Bank
12/03/01
1.840
25,000,000.00
02/25/02
BRE
Jackson Federal Bank
07/26/01
3.560
10,000,000.00
01/22/02
Jackson Federal Bank
11/14/01
1.900
10,000,000.00
05/13/02
Pacific Western National Bank
11 /20/01
2.060
1,000,000.00
05/20/02
CALABASAS
First Bank of Beverly Hills FSB
11/27/01
2.040
10,000,000.00
02/27/02
First Bank of Beverly Hills FSB
12/07/01
1.820
10,000,000.00
03/20/02
CAMARILLO
First California Bank
10/30/01
2.150
2,000,000.00
01/29/02
First California Bank
12/28/01
1.750
3,000,000.00
03/29/02
First California Bank
11/02/01
1.980
2,000,000.00
04/30/02
18
TIME DEPOSITS
DEPOSIT PAR
NAME DATE YIELD AMOUNT (S)
CHICO
North State National Bank
04/06/01
North State National Bank
11 /28/01
North State National Bank
12/07/01
Tri Counties Bank
12/05/01
Tri Counties Bank
12/17/01
CHULA VISTA
North Island Federal Credit Union
11 /27/01
CITY OF INDUSTRY
EverTrust Bank
07/27/01
EverTrust Bank
07/18/01
EverTrust Bank
12/12/01
CONCORD
CA State 9 Credit Union 11/19/01
DUARTE
4.000
2.080
1.890
1.780
1.750
2.030
3.540
3.600
1.770
1.960
Western State Bank
12/03/01
1.840
Western State Bank
08/14/01
3.420
Western State Bank
08/27/01
4.430
Western State Bank
10/01 /01
2.420
DUBLIN
Operating Engineers FCU
08/08/01
Operating Engineers FCU
10/11 /01
Operating Engineers FCU
12/11/01
EL CENTRO
Valley Independent Bank
08/14/01
Valley Independent Bank
10/31/01
EL SEGUNDO
Hawthorne Savings FSB
06/28/01
Xerox Federal Credit Union
11 /13/01
19
3.490
2.230
1.790
3.420
2.040
3.520
1.850
MATURITY
DATE
5,000,000.00
01/25/02
1,500,000.00
05/17/02
1,000,000.00
06/05/02
10,000,000.00
03/05/02
10,000,000.00
03/18/02
5,000,000.00 02/27/02
3,000,000.00 01/25/02
3,000,000.00 01/25/02
6,000,000.00 06/11/02
10,000,000.00 02/19/02
1,000,000.00 02/25/02
1,000,000.00 02/25/02
2,000,000.00 02/25/02
2,000,000.00 04/01/02
5,000,000.00 02/04/02
5,000,000.00 04/09/02
10,000,000.00 06/12/02
7,500,000.00 02/14/02
20,000,000.00 04/30/02
60,000,000.00 01 /04/02
20,000,000.00 02/14/02
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
NAME
DATE
YIELD
AMOUNT(_)
DATE
EL SEGUNDO (continued)
Xerox Federal Credit Union
09/04/01
3.350
7,000,000.00
03/04/02
FRESNO
United Security Bank
10/05/01
2.270
5,000,000.00
01 /10/02
United Security Bank
07/31/01
3.510
15,000,000.00
02/06/02
United Security Bank
11/15/01
1.910
10,000,000.00
05/14/02
FULLERTON
Fullerton Community Bank
07/18/01
3.640
8,000,000.00
01/25/02
Fullerton Community Bank
11 /19/01
2.040
9,000,000.00
05/17/02
GLENDALE
Verdugo Banking Company
07/05/01
3.660
5,000,000.00
01/08/02
GRANADA HILLS
Bank of Granada Hills
09/18/01
2.740
2,000,000.00
03/18/02
HUNTINGTON BEACH
First Bank and Trust
08/27/01
3.400
2,000,000.00
02/26/02
First Bank and Trust
09/11/01
3.240
12,000,000.00
03/11/02
First Bank and Trust
10/29/01
2.150
3,000,000.00
04/26/02
IRVINE
Commercial Capital Bank
10/09/01
2.260
6,000,000.00
01/07/02
LA JOLLA
Silvergate Bank
08/08/01
3.520
5,000,000.00
02/04/02
Silvergate Bank
12/13/01
1.700
3,500,000.00
03/13/02
LAKEPORT
Lake Community Bank
12/28/01
1.870
2,000,000.00
06/26/02
20
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
NAME
DATE
YIELD
AMOUNT (;)
DATE
LODI
Farmers $ Merchant Bk Cen CA
07/05/01
3.650
10,000,000.00
01/11/02
LOS ANGELES
Broadway Federal Bank
07/09/01
3.610
2,500,000.00
01/08/02
Broadway Federal Bank
06/13/01
3.580
3,000,000.00
03/11/02 .
California Center Bank
10/02/01
2.410
10,000,000.00
01/03/02
California Chohung Bank
07/03/01
3.650
1,500,000.00
01/07/02
California Chohung Bank
07/18/01
3.630
1,000,000.00
01/14/02
California Chohung Bank
11/19/01
1.930
4,000,000.00 ,
02/19/02
Cathay Bank
09/04/01
3.340
30,000,000.00
03/04/02
Cathay Bank
09/26/01
2.430
19,000,000.00
03/25/02
Cathay Bank
10/10/01
2.230
19,000,000.00
04/08/02
Cedars Bank
10/10/01
2.240
2,500,000.00
01/08/02
Cedars Bank
09/06/01
3.460
2,500,000.00
03/06/02
Cedars Bank
10/04/01
2.260
5,000,000.00
04/01/02
Cedars Bank
12/21/01
1.840
2,000,000.00
06/19/02
Eastern International Bank
11/05/01
1.980
900,000.00
05/07/02
Eastern International Bank
12/10/01
1.890.
1,000,000.00
06/10/02
General Bank
07/20/01
3.550
15,000,000.00
01 /18/02
General Bank
07/30/01
3.540
20,000,000.00
01/28/02
General Bank
08/07/01
3.490
15,000,000.00
02/08/02
General Bank
05/30/01
3.710
10,000,000.00
02/20/02
General Bank
05/22/01
3.800
20,000,000.00
02/20/02
General Bank
08/13/01
3.400
15,000,000.00
03/07/02
General Bank
06/14/01
3.570
20,000,000.00
03/18/02
General Bank
12/10/01
1.830
25,000,000.00
06/07/02
Hanmi Bank
10/15/01
2.270
25,000,000.00
01 /14/02
Hanmi Bank
11/27/01
2.000
25,000,000.00
02/26/02
Hanmi Bank
12/20/01
1.730
25,000,000.00
03/21 /02
Manufacturers Bank
11 /01 /01
2.100
10,000,000.00
01 /31 /02
Manufacturers Bank
12/11 /01
1.720
30,000,000.00
03/11 /02
Manufacturers Bank
12/21/01
1.750
20,000,000.00
03/21/02
Marathon National Bank
08/06/01
3.510
2,000,000.00
02/04/02
Mellon First Business Bank
06/18/01
3.560
25,000,000.00
01/04/02
Mellon First Business Bank
07/18/01
3.610
25,000,000.00
02/01 /02
Mellon First Business Bank
12/28/01
1.740
25,000,000.00
03/20/02
Mellon First Business Bank
09/24/01
2.360
25,000,000.00
03/20/02
Mercantile National Bank
08/13/01
3.410
2,000,000.00
02/08/02
Nara Bank, NA
10/24/01
2.190
5,000,000.00
04/22/02
Nara Bank, NA
12/19/01
1.830
5,000,000.00
06/17/02
21
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME D_ YIELD AMOUNT (_) DATE
LOS ANGELES (continued)
Pacific Union Bank
10/01/01
2.400
10,000,000.00
01/03/02
Pacific Union Bank
12/05/01
1.760
20,000,000.00
03/05/02
Preferred Bank
08/13/01
3.390
4,000,000.00
02/08/02
Preferred Bank
08/27/01
3.400
7,000,000.00
02/26/02
Preferred Bank
06/11 /01
3.600
9,000,000.00
03/08/02
Preferred Bank
12/18/01
1.800
9,000,000.00
03/18/02
Preferred Bank
07/16/01
3.550
6,000,000.00
07/16/02
Sae Han Bank
10/15/01
2.270
3,000,000.00
01/15/02
Sae Han Bank
10/30/01
2.140
3,000,000.00
01/15/02
State Bank of India (Calif)
08/27/01
3.380
2,000,000.00
02/25/02
State Bank of India (Calif)
06/12/01
3.600
5,5009000.00
04/02/02
State Bank of India (Calif)
07/18/0f
3.510
2,000,000.00
07/18/02
Western Federal Credit Union
10/24/01
2.190
25,000,000.00
04/22/02
Wilshire State Bank
08/31 /01
3.340
4,000,000.00
02/27/02
Wilshire State Bank
11/06/01
1.970
4,000,000.00
05/06/02
Wilshire State Bank
11 /15/01
1.910
2,000,000.00
05/14/02
Wilshire State Bank
12/19/01
1.850
8,000,000.00
06/18/02
Wilshire State Bank
07/13/01
3.540
4,000,000.00
07/12/02
ME_
County Bank
07/20/01
3.650
5,000,000.00
01/16/02
County Bank
10/17/01
2.260
5,000,000.00
04/15/02
County Bank
12/07/01
1.910
10,000,000.00
06/06/02
MONTEREY PARK
Trust Bank FSB
07/02/01
3.660
2,000,000.00
01/02/02
Trust Bank FSB
10/01/01
2.430
4,000,000.00
01/02/02
NORTH HIGHLANDS
Safe Credit Union 07/16/01 3.600 5,000,000.00 01/14/02
Safe Credit Union 08/01 /01 3.490 20,000,000.00 02/06/02
OAKDALE
Oak Valley Community Bank
09/05/01
3.380
500,000.00
03/22/02
Oak Valley Community Bank
03/23/01
4.140
1,5009000.00
03/22/02
Oak Valley Community Bank
10/10/01
2.210
2,500,000.00
04/08/02
Oak Valley Community Bank
06/05/01
3.640
1,500,000.00
06/05/02
Fyn
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
NAME
DATE
YIELD
AMOUNT (S)
DATE
OAKLAND
Metropolitian Bank
09/24/01
2.390
1,000,000.00
03/25/02
Metropolitian Bank
10/31 /01
2.100
1,000,000.00
04/29/02
Metropolitian Bank
11 /29/01
1.960
1,000,000.00
05/28/02
ONTARIO
Citizens Business Bank
03/26/01
4.150
30,000,000.00
03/26/02
Citizens Business Bank
04/05/01
4.070
25,000,000.00
04/05/02
Citizens Business Bank
05/07/01
.3.800
10,000,000.00
05/07/02
Citizens Business Bank
12/03/01
1.830
25,000,000.00
06/03/02
Citizens Business Bank
08/22/01
3.480
30,000,000.00
08/22/02
PALO ALTO
Bank of Petaluma
08/06/01
3.520
1,000,000.00
02/25/02
Bank of Petaluma
06/05/01
3.660
2,500,000.00
02/25/02
Bank of Petaluma
12/17/01
1.760
12,000,000.00
03/13/02
Bank of Santa Clara
06/04/01
3.630
20,000,000.00
02/25/02
Bay Area Bank
07/25/01
3.570
5,000,000.00
01/14/02
Bay Area Bank
10/30/01
2.090
5,000,000.00
04/27/02
Bay Bank of Commerce
10/30/01
2.110
5,000,000.00
04/29/02
Coast Commercial Bank
07/16/01
3.620
5,000,000.00
01/14/02
Coast Commercial Bank
06/11/01
3.620
20,000,000.00
02/25/02
Cupertino National Bank
07/24/01
3.570
10,000,000.00
01/14/02
Cupertino National Bank
06/01 /01
3.610
20,000,000.00
02/25/02
Cupertino National Bank
12/17/01
1.740
10,000,000.00
03/13/02
Cupertino National Bank
10/30/01
2.090
35,000,000.00
04/29/02
Golden Gate Bank
06/01/01
3.630
9,000,000.00
02/25/02
Mid -Peninsula Bank
06/01 /01
3.620
5,000,000.00
02/25/02
Mid -Peninsula Bank
09/14/01
3.000
10,000,000.00
03/13/02
Mid -Peninsula Bank
10/30/01
2.100
35,000,000.00
04/29/02
Mt. Diablo National Bank
12/11/01
1.730
10,000,000.00
03/13/02
Peninsula Bank of Commerce
06/11/01
3.600
15,000,000.00
02/25/02
PASADENA
Community Bank
08/13/01
3.380
15,000,000.00
02/08/02
Community Bank
04/25/01
3.770
5,000,000.00
04/25/02
Community Bank
06/22/01
3.400
20,000,000.00
06/21/02
Community Bank
07/11/01
3.520
20,000,000.00
07/11/02
Wescom Credit Union
07/30/01
3.540
15,000,000.00
01/28/02
Wescom Credit Union
10/09/01
2.270
25,000,000.00
04/08/02
23
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
NAME
DATE
YIELD
AMOUNT,(_)
DATE
PASADENA (continued)
Wescom Credit Union
11/13/01
1.840
10,000,000.00
05/13/02
Wescom Credit Union
12/14/01
1.830
15,000,000.00
06/12/02
PLACERVILLE
El Dorado Savings Bank
02/08/01
4.770
5,000,000.00
02/08/02
El Dorado Savings Bank
03/07/01
4.520
5,000,000.00
03/07/02
El Dorado Savings Bank
03/22/01
4.210
5,000,000.00
03/22/02
El Dorado Savings Bank
04/13/01
4.100
5,000,000.00
04/12/02
El Dorado Savings Bank
04/13/01
4.100
5,000,000.00
04/12/02
El Dorado Savings Bank
05/02/01
3.910
5,000,000.00
05/02/02
El Dorado Savings Bank
06/18/01
3.460
5,000,000.00
06/10/02
El Dorado Savings Bank
06/05/01
3.640
5,000,000.00
06/10/02
El Dorado Savings Bank
12/13/01
1.740
10,000,000.00
06/10/02
POMONA
PFF Bank and Trust
08/28/01
3.420
8,000,000.00
02/28/02
PFF Bank and Trust
12/04/01
1.820
10,000,000.00
06/03/02
PFF Bank and Trust
12/06/01
1.890
10,000,000.00
06/03/02
PORTERVILLE
Bank of the Sierra
10/23/01
2.240
10,000,000.00
01 /23/02
UQ INCY
Plumas Bank
05/23/01
3.800
2,000,000.00
02/20/02
RANCHO SANTA FE
La Jolla Bank, FSB
09/24/01
2.360
10,000,000.00
02/01 /02
La Jolla Bank, FSB
06/06/01
3.620
10,000,000.00
03/01/02
La Jolla Bank, FSB
11 /20/01
2.060
15,000,000.00
05/23/02
La Jolla Bank, FSB
08/06/01
3.500
15,000,000.00
08/06/02
RED BLUFF
Tehama Bank 07/03/01 3.620 5,000,000.00 07/03/02
24
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT (S) DATE
REDDING
North Valley Bank 12/14/01 1.810 3,000,000.00 06/12/02
REDWOOD CITY
Provident Central Credit Union 11/01/01 2.020 20,000,000.00 05/01/02
RICHMOND
Mechanics Bank
03/07/01
4.520
10,000,000.00
03/07/02
Mechanics Bank
04/06/01
4.000
10,000,000.00
04/05/02
Mechanics Bank
04/25/01
3.790
10,000,000.00
04/25/02
Mechanics Bank
05/07/01
3.870
10,000,000.00
05/07/02
Mechanics Bank
06/12/01
3.560
10,000,000.00
06/12/02
Mechanics Bank
07/11/01
3.520
10,000,000.00
07/11/02
Mechanics Bank
08/13/01
3.490
10,000,000.00
08/13/02
Mechanics Bank
10/12/01
2.380
10,000,000.00
10/15/02
SACRAMENTO
American River Bank
10/15/01
2.270
1,000,000.00
01/11/02
American River Bank
07/10/01
3.600
1,500,000.00
01/14/02
American River Bank
09/28/01
2.370
1,000,000.00
03/29/02
American River Bank
09/24/01
2.360
3,000,000.00
03/29/02
American River Bank
10/12/01
2.250
1,500,000.00
04/10/02
American River Bank
06/26/01
3.380
1,000,000.00
06/26/02
Bank of Sacramento
12/21 /01
1.770
1,000,000.00
03/21 /02
Bank of Sacramento
12/21 /01
1.770
1,000,000.00
03/21 /02
Bank of Sacramento
11/15/01
1.930
1,500,000.00
05/14/02
Bank of Sacramento
11/29/01
1.960
2,000,000.00
05/28/02
Golden One Credit Union
03/23/01
4.120
20,000,000.00
03/22/02
Golden One Credit Union
04/25/01
3.770
10,000,000.00
04/25/02
Golden One Credit Union
12/05/01
1.820
10,000,000.00
05/23/02
Golden One Credit Union
06/08/01
3.600
10,000,000.00
06/07/02
Merchants National Bank
10/19/01
2.210
2,000,000.00
04/17/02
Merchants National Bank
07/23/01
3.460
2,000,000.00
07/23/02
River City Bank
07/03/01
3.660
2,000,000.00
01/07/02
River City Bank
10/29/01
2.190
3,000,000.00
01/28/02
River City Bank
11/26/01
1.970
2,000,000.00
02/26/02
River City Bank
10/04/01
2.330
4,000,000.00
04/01/02
Sanwa Bank of Califomia
07/26/01
3.560
22,000,000.00
01/23/02
U.S. Bank
08/07/01
3.500
25,000,000.00
02/04/02
U.S. Bank
11/20/01
2.000
25,000,000.00
02/19/02
25
NAM
SACRAMENTO (continued
TIME DEPOSITS
DEPOSIT PAR MATURITY
DATE YIELD AMOUNT (_) DATE
U.S. Bank
08/07/01
3.550
25,000,000.00
05/06/02
Union Bank of California
10/19/01
2.210
50,000,000.00
04/17/02
Union Bank of California
10/29/01
2.100
100,000,000.00
04/17/02
Union Bank of California
11/09/01
1.800
150,000,000.00
05/08/02
Union Bank of California
12/19/01
1.830
100,000,000.00
06/18/02
United California Bank
09/07/01
3.380
60,000,000.00
03/06/02
SALINAS
Community Bk Central Calif
10/10/01
2.210 10,000,000.00
01/09/02
Community Bk Central Calif
12/21 /01
1.710 10,000,000.00
03/21 /02
Community Bk Central Calif
10/25/01
2.170 5,000,000.00
04/23/02
Community Bk Central Calif
10/25/01
2.170 5,000,000.00
04/23/02
SAN BERNARD NNO
Business Bank of California
07/10/01
3.630
8,000,000.00
01/09/02
Business Bank of California
08/06/01
3.530
12,000,000.00
02/05/02
SAN DIEGO
First United Bank
02/16/01
4.950
1,000,000.00
02/15/02
Mission Federal Credit Union
08/28/01
3.430
10,000,000.00
02/27/02
Neighborhood National Bank
11/21/01
1.990
2,000,000.00
02/22/02
First Future Credit Union
09/04/01
3.320
5,000,000.00
03/01/02
First Future Credit Union
11/30/01
1.850
5,000,000.00
05129/02
First Future Credit Union
12/19/01
1.830
3,000,000.00
06/21/02
SAN FRANCISCO
America California Bank
07/30/01
3.570
1,500,000.00
01 /28/02
America California Bank
10/31 /01
2.060
1,000,000.00
04/3.0/02
Bank of Canton California
09/10/01
3.230
20,000,000.00
03/08/02
Bank of Canton California
12/17/01
1.750
15,000,000.00
04/12/02
Bank of Canton California
11/21/01
2.050
10,000,000.00
05/22/02
Bank of Canton California
05/22/01
3.770
15,000,000.00
05/22/02
Bank of Canton California
12/12/01
1.770
20,000,000.00
06/11/02
Bank of Canton California
07/16/01
3.550
25,000,000.00
07/16/02
Bank of Canton California
08/31 /01
3.470
20,000,000.00
08/30/02
Bank of the West
07/06/01
3.650
34,000,000.00
01/02/02
Bank of the West
07/09/01
3.600
50,000,000.00
01/08/02
Bank of the West
07/27/01
3.560
76,500,000.00
01 /24/02
26
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AM_ (s) D_
SAN FRANCISCO (continued)
Bank of the West
08/17/01
3.420
25,000,000.00
02/20/02
Bank of the West
08/02/01
3.560
25,000,000.00
02/20/02
Bank of the West
08/24/01
3.400
50,000,000.00
02/20/02
Bank of the West
10/15/01
2.260
50,000,000.00
04/15/02
Bank of the West
11/20/01
2.050
142,000,000.00
05/20/02
California Federal Bank
07/06/01
3.650
8,000,000.00
01/04/02
California Federal Bank
07/06/01
3.650
42,000,000.00
01/04/02
California Federal Bank
05/24/01
3.730
50,000,000.00
021W02
California Federal Bank
10/16/01
2.270
100,000,000.00
04/15/02
California Federal Bank
12/14/01
1.800
50,000,000.00
06/07/02
California Pacific Bank
12/28/01
1.740
2,000,000.00
03/28/02
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
08/31/01
3.340
30,000,000.00
02/28/02
United Commercial Bank
04/04/01
4.160
30,000,000.00
04/04/02
United Commercial Bank
06/05/01
3.660
10,000,000.00
06/05/02
United Commercial Bank
12/14/01
1.810
25,000,000.00
06/05/02
United Commercial Bank
12/21/01
1.840
25,000,000.00
07/02/02
United Commercial Bank
07/31/01
3.480
40,000,000.00
07/31/02
SAN DOSE
Comerica Bank
10/09/01
2.260
71,000,000.00
01/09/02
Comerica Bank
12/04/01
1.840
63,000,000.00
03/04/02
Commence Bank of California
10/30/01
2.170
183,000,000.00
02/06/02
Heritage Bank of Commerce
08/17/01
3.410
2,000,000.00
02/15/02
Medwest Credit Union
07/20/01
3.560
5,000,000.00
01/18/02
Meriwest Credit Union
08/10/01
3.490
5,000,000.00
02/06/02
Meriwest Credit Union
08/28/01
3.440
5,000,000.00
02/28/02
Medwest Credit Union
12/20/01
1.860
5,000,000.00
06/18/02
San Jose National Bank
04/30/01
3.870
10,000,000.00
04/30/02
San Jose National Bank
11 /01 /01
2.000
10,000,000.00
04/30/02
Santa Clara Co. Fed. C.U.
08/07/01
3.500
15,000,000.00
02/05/02
SAN LUIS OBISPO
Mission Community Bank
09/10/01
3.250
1,000,000.00
03/08/02
Mission Community Bank
10/11/01
2.240
1,500,000.00
04/09/02
Mission Community Bank
12/21/01
1.720
1,000,000.00
04/09/02
Mission Community Bank
12/10/01
1.840
1,000,000.00
06/11/02
San Luis Trust Bank
10/10/01
2.230
1,350,000.00
01/08/02
San Luis Trust Bank
10/26/01
2.130
1,000,000.00
04/24/02
27
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT (_) DATE
SAN MARINO
East West Federal Bank
07/06/01
3.660
12,000,000.00
01/04/02
East West Federal Bank
06/04/01
3.590
30,000,000.00
01 /04/02
East West Federal Bank
08/02/01
3.560
35,000,000.00
02/07/02
East West Federal Bank
11 /16/01
1.900
38,000,000.00
05/15/02
East West Federal Bank
11/28/01
2.080
35,000,000.00
06/10/02
SAN RAFAEL
Metro Commerce Bank
11/28/01
2.070
1,800,000.00
05/30/02
Westamerica Bank
10/11 /01
2.240
50,0009000.00
01 /09/02
Westamerica Bank
11/09/01
1.840
50,000,000.00
02/07/02
Westamerica Bank
12/19/01
1.730
25,000,000.00
03/19/02
Westamerica Bank
07/18/01
3.510
25,000,000.00
07/18/02
Westamerica Bank
07/30/01
3.490
50,000,000.00
07/30/02
SAN RAMON
EBTEL Federal Credit Union
07/06/01
3.670
1,000,000.00
01 /02/02
EBTEL Federal Credit Union
08/17/01
3.440
750,000.00
02/13/02
EBTEL Federal Credit Union
11 /14/01
1.880
1,000,000.00
02/14/02
SANTA BARBARA
FNB of Central California
07/23/01
3.570
5,000,000.00
01/25/02
FNB of Central California
07/09/01
3.590
10,000,000.00
01/25/02
FNB of Central California
09/12/01
3.220
10,000,000.00
03/11 /02
FNB of Central California
10/12/01
2.280
10,000,000.00
04110/02
FNB of Central California
11/30/01
1.860
10,000,000.00
06/03/02
FNB of Central California
12/20/01
1.840
10,000,000.00
06/14/02
Santa Barbara Bank & Trust
07/27/01
3.560
6,000,000.00
02/08/02
Santa Barbara Bank & Trust
07/06/01
3.650
30,000,000.00
01/25/02
Santa Barbara Bank & Trust
07/27/01
3.560
10,000,000.00
02/08/02
Santa Barbara Bank & Trust
10/01 /01
2.400
10,000,000.00
04/01 /02
Santa Barbara Bank & Trust
11/01/01
2.000
10,000,000:00
05/01/02
Santa Barbara Bank & Trust
11/30/01
1.850
20,000,000.00
06/03/02
Santa Barbara Bank & Trust
12/20/01
1.830
20,000,000.00
06/14/02
SANTA CLARITA
Valencia Bank & Trust
09/17/01 3.000 4,000,000.00 03/19/02
28
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
NAME
DATE
YIELD
AMOUNT (s)
DATE
SANTA MARIA
Hacienda Bank
09/11/01
3.260
1,000,000.00
03/11/02
SANTA ROSA
National Bank of the Redwoods
07/31 /01
3.510
5,000,000.00
01 /28/02
National Bank of the Redwoods
10/29/01
2.140
10,000,000.00
04/26/02 .
Redwood Credit Union
11/30/01
1.900
17,000,000.00
02/28/02
Redwood Credit Union
12/28/01
1.840
8,000,000.00
06/24/02
SONORA
Central California Bank
12/03/01
1.830
1,000,000.00
03/04/02
STOCKTON
Pacific State Bank
07/11 /01
3.620
1,000,000.00
01 /08/02
Pacific State Bank
10/12/01
2.260
1,000,000.00
04/10/02
Union Safe Deposit Bank
07/16/01
3.640
5,000,000.00
01/23/02
Union Safe Deposit Bank
07/26/01
3.590
10,000,000.00
01/23/02
Union Safe Deposit Bank
08/07/01
3.520
10,000,000.00
02/14/02
Union Safe Deposit Bank
08/22/01
3.420
10,000,000:00
03/01/02
Union Safe Deposit Bank
10/11/01
2.270
10,000,000.00
04/11/02
Union Safe Deposit Bank
11/05/01
2.020
10,000,000.00
05/07/02
Union Safe Deposit Bank
12/11/01
1.830
10,000,000.00
06/12/02
Washington Mutual Bank
10/26/01
2.160
30,000,000.00
01/24/02
Washington Mutual Bank
07/24/01
3.570
30,000,000.00
01/24/02
Washington Mutual Bank
11/28/01
2.000
30,000,000.00
02/19/02
Washington Mutual Bank
08/23/01
3.390
30,000,000.00
02/19/02
Washington Mutual Bank
12/21/01
1.830
15,000,000.00
06/17/02
Washington Mutual Bank
12/10/01
1.820
30,000,000.00
06/17/02
SUNNYVALE
Asiana Bank
12/20/01
1.750
1,500,000.00
03/21 /02
TORRANCE
China Trust Bank (USA)
10/19/01
2.240
5,0009000.00
01/18/02
China Trust Bank (USA)
10/19/01
2.240
25,000,000.00
01/18/02
China Trust. Bank (USA)
11 /16/01
1.920
20,000,000.00
02/15/02
China Trust Bank (USA)
12/14/01
1.740
25,000,000.00
03/14/02
China Trust Bank (USA)
12/19/01
1.850
10,000,000.00
06/18/02
29
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT (;) DATE
TORRANCE (continued
South Bay Bank
07/27/01
3.560.
1,000,000.00
01/25/02
South Bay Bank
06/07/01
3.620
3,000,000.00
03/01 /02
South Bay Bank
09/06/01
3.430
5,000,000.00
03/15/02
South Bay Bank
11 /20/01
2.040
2,000,000.00
03/20/02
South Bay Bank
11/08/01
1.780
4,000,000.00
05/07/02
U�_
First Fidelity Investment & Loan
10/17/01
2.240
10,000,000.00
01/15/02
First Fidelity Investment & Loan
11/06/01
2.030
8,000,000.00
02/07/02
First Fidelity Investment & Loan
11/02/01
2.070
9,000,000.00
02/07/02
First Fidelity Investment & Loan
12/05/01
1.770
15,000,000.00
03/05/02
Sunwest Bank
10/09/01
2.230
3,500,000.00
01 /09/02
Sunwest Bank
10/17/01
2.230
2,500,000.00
01/25/02
Sunwest Bank
11 /06/01
2.020
2,000,000.00
02/08/02
Sunwest Bank
11 /01 /01
2.080
5,800,000.00
02/08/02
Sunwest Bank
12/07/01
1.770
1,000,000.00
03/08/02
VACAVILLE
Travis Credit Union
11/30/01
1.910
40,000,000.00
02/28/02
WATSONVILLE
Monterey Bay Bank
07/02/01
3.680
8,000,000.00
01 /07./02
Monterey Bay Bank
09/20/01
2.390
8,000,000.00
.03/20/02
Monterey Bay Bank
12/17/01
1.840
3,000,000.00
06/17/02
WHITTIER
Quaker City Bank
07/12/01
3.570
14,000,000.00
01 /08/02
Quaker City Bank
10/16/01
2.280
8,000,000.00
04/05/02
Quaker City Bank
04/06/01
4.000
8,000,000.00
04/05/02
Quaker City Bank
06/27/01
2.080
25,000,000.00
05/24/02
Quaker City Bank
12/28/01
1.830
10,000,000.00
07/12/02
TOTAL TIME DEPOSITS DECEMBER 2001 5o078v7969000.00
30
BANK DEMAND DEPOSITS
DECEMBER 2001
($ in thousands)
DAILY BALANCES
DAY OF
BALANCES
WARRANTS
MONTH
PER BANKS
OUTSTANDING
1 S
7739560
$ 2,9569214
2
7739560
299569214
3
275,145
291759201
4
8159321
29402,674
5
8369202
292509611
6
1,008,105
2,041,188
7
190649017
29253,534
8
190649017
292539534
9
190649017
212539534
10
9409741
29117,132
11
847,235
196079892
12
9619539
197989486
13
798,176
19906,477
14
19246,594
19921,621
15
1,246,594
1,9219621
16
192469594
1,9279261
17
1,0079792
119809661
18
8589585
2,2969977
19
8239872
292431,688
20
9919685
2,346,749
21
192309709
2,765,230
22
192309709
297659230
23
192309709
297659230
24
196269745
2,441,539
25
1,626,745
2,"19539
26
7789235
291859780
27
6651,620
2,1469331
28
9999964
291469331
29
999,964
291469331
30
99999"
21,238,186
31
5869999
292919692
AVERAGE DOLLAR DAYS $ 9879733 a/
a/ The prescribed bank balance for December was $ 910,268. This consisted of
$ 702,858 in compensating balances for services, balances for uncollected
funds of ; 215,195 and a deduction of $ 7,785 for December delayed
deposit credit.
31
DESIGNATION BY POOLED MONEY INVESTMENT BOARD
OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS
No. 1630
In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its
meeting on December 19, 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 ban 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
$ 702,858,000
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
InstlWdons
In Securities (sections 16503a Estimated
From To Transactions (section 16430)* and 16602)* Total
( 1) 12/17/2001 12/21/2001 $ 2,537,700,000 $ 44,030,905,000 $ 4,972,795,000 $ 49,003,700,000
(2) 12/24/2001 12/28/2001 $ (190,100,000) $ 43,840,805,000 $ 4,972,795,000 $ 48,813,600,000
(3) 12/31/2001 01/04/2002 $ 2,011,200,000 $ 45,852,005,000 $ 4,972,795,000 $ 50,824,800,000
(4) 01/07/2002 01/11/2002 $ 362,800,000 $ 46,214,805,000 $ 4,972,795,000 $ 51,187,600,000
(5) 01/14/2002 01/18/2002 $ 1,595,400,000 $ 47,810,205,000 $ 4,972,795,000 $ 52,783,000,000
(6) 01/21/2002 01/25t2002 $ 381,500,000 $ 48,191,705,000 $ 4,972,795,000 $ 53,164,500,000
(7) 01/28/2002 02/01/2002 $ (2,007,800,000) $ 46,183,905,000 $ 4,972.795,000 $ 51,156,700,000
(8) 02/04/2002 02/08/2002 $ 502,400,000 $ 46,686,305,000 $ 4,972,795,000 $ 51,659,100,000
(9) 02/1.1/2002 02/15/2002 $ 308,600,000 $ 46,994,905,000 $ 4,972,795,000 $ 51,967,700,000
(10) 02/18/2002 02/22/2002 $ 493,100,000 $ 47,488,005,000 $ 4,972,795,000 $ 52,460,800,000
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 $ 702,858,000.
POOLED MONEY INVESTMENT BOARD:
V
Chairperson
Member
Dated: December 19, 2001
* Government Code 32 Member