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2002 06 12 IABShimRB Brighter Than P.O. Box 1504 78-495 CALLE TAMPICO LA QUINTA, CALIFORNIA 92253 (760) 7 7 7 - 7 0 0 0 FAX (760) 777-7101 AGENDA INVESTMENT ADVISORY BOARD Study Session Room 78-495 Calle Tampico- La Quinta, CA 92253 June 12, 2002 - 5:30 P.M. Board Member Felice ( Video Conference Location) Cisco Systems 170 West Tasman Dr., Bldg. 17, San Jose, California, 95135 I CALL TO ORDER a. Pledge of Allegiance b. Roll Call II PUBLIC COMMENT - (This is the time set aside for public comment on any matter not scheduled on the agenda.) III CONFIRMATION OF AGENDA IV CONSENT CALENDAR A. Approval of Minutes of Meeting on May 8, 2002 for the Investment Advisory Board. V BUSINESS SESSION A. Transmittal of Treasury Report for April, 2002 B. Continued Consideration of Fiscal Year 2002/03 Investment Policy VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - May, 2002 B. Pooled Money Investment Board Reports - March, 2002 and LAIF Quarterly Answer Booklet Update, March 31, 2002 VII BOARD MEMBER ITEMS INVESTMENT ADVISORY BOARD Business Session: A Meeting Date: June 12, 2002 ITEM TITLE: Transmittal of Treasury Report for April 30, 2002 BACKGROUND: Attached please find the Treasury Report for April 30, 2002. RECOMMENDATION: Review, Receive and File the Treasury Report for April 30, 2002. Jbfin M. Falconer! Finance Director Tdy 4 e(A Q" MEMORANDUM TO: La Quinta City Council FROM: John M. Falconer, Finance Director/Treasurer SUBJECT: Treasurer's Report for April 30, 2002 DATE: May 30, 2002 Attached is the Treasurer's Report for the month ending April 30, 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 I Sold/Matured Other Ending Change Cash $1,015,318 (1) ($817,408) $197,910 ($817,408) LAW $17,897,411 (69,121) 17,828,290 (69,121) US Treasuries (2) $58,002,697 12,999,400 (6,980,000) 75,498 64,097,595 6,094,898 US Gov't Agencies (2) $12,980,209 2,927 12,983,136 2,927 Commercial Paper (2) $7,997,251 (8,000,000) 2,749 0 (7,997,251) Mutual Funds $8,258,923 8,501 1 8,267,424 8,501 Total 106 151 809 13 007 901 15 866 529 81 174 103 374 355 2 777 454 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. r D Dat Footnote (1) The amount reported represents the net increase (decrease) of deposits and withdrawals from the previous month. 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O N r L cm m Q j C L ~y� lyp C 7 a m d d EX .� C O R .0. d C U m C CoN 0) d C VI d % C N d Ip L A G d'E m 'C 7 ) 00 m :.% IC yU d V d V C d NLLQ 7 d Q L N 06 da wC >C dm V CdFn(D I Im EL 8�KWf d w 0 - UCCd Zco CITY OF LA QUINTA BALANCE SHEET 04/30/02 ASSETS: TOTAL ASSETS LIABILITIES: POOLED CASH LQRP INVESTMENT IN POOLED CASH INVESTMENT T-BILLINOTES & OTHER AUTO MALL CASH LORP CASH BOND REDEMPTION CASH BOND RESERVE CASH BOND PROJECT CASH BOND ESCROW CASH PETTY CASH CASH & INVESTMENT TOTAL INVESTMENT IN LAND HELD FOR RESALE CITY CITY RDA RDA FA FIXED LONG TERM FIXED LONG TERM FINANCING LONG TERM GRAND CITY ASSETS DEBT RDA ASSETS DEBT AUTHORITY DEBT TOTAL 10,596,351.82 6,980,828.35 (260,488.98) 17,316,691.19 670.000.00 670,000.00 40,000,000.00 40,000,D00.00 38,509.43 38.509.43 8,827.61 2.44 8.830.05 44,867,343.44 552,249.78 45,419,593.22 100.00 1,000.00 50,597,351.82 52,565,508.83 291,763.24 103,454,623.89 ACCOUNTS RECEIVABLE 45,357.22 60,900.00 106,257.22 PREMIUMIDISCOUNT ON INVESTMENT (27,159.62) (53,109.14) (80,268.76) LORP-ACCOUNTS RECEIVABLE 46,988.80 46,988.80 INTEREST RECEIVABLE 34,067.62 34,067.62 LOAN/NOTES RECEIVABLE 13,489,403.69 13,489,403.69 DUE FROM OTHER AGENCIES 820,898.89 820,098.89 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 3,834,610.88 3,834,610.88 ADVANCES TO OTHER FUNDS 56,483.22 2,745,618.71 2,802,101.93 NSF CHECKS RECEIVABLE 2,666.86 2,666.86 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 3,679.00 3,679.00 EMPLOYEE ADVANCES PREPAID EXPENSES 15,496.25 15,496.25 RECEIVABLE TOTAL 13,995,185.37 20,711,742.00 16,041,673.50 51,548,600.87 WORKER COMPENSATION DEPOSIT RENT DEPOSITS UTILITY DEPOSITS 75.D0 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 LIT DEBT 3,395,117.03 3,395,117.03 AMOUNT TO BE PROVIDED FOR Ur 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.D0 102,952,104.70 ACCOUNTS PAYABLE DUE TO OTHER AGENCIES DUE TO OTHER FUNDS INTEREST ADVANCE -DUE TO CITY ACCRUED EXPENSES PAYROLL LIABILITIES STRONG MOTION INSTRUMENTS FRINGE TOED LIZARD FEES SUSPENSE DUE TO THE CITY OF LA QUINTA PAYABLES TOTAL 64 594 71219 20,711,742.00 951,847.65 69 407182 33 9,988,279.05 84,261,978.00 291,763.24 7,750,000.00 257,957,5D4.46 13,650.17 1,385,318.07 2,745,618.71 6,605.76 725.55 78.982.28 138,812.23 1,499,665.54 11,383,537.00 16,468.50 13,650.17 1,385,318.07 1,499,665.54 14,129,155.71 16,46&50 6,605.76 725.55 78,982.28 138,812.23 4,369,712.77 12,899,671.04 17,269,383.81 ENGINEERING TRUST DEPOSITS SO. COAST AIR QUALITY DEPOSITS LQRP DEPOSITS 14,795.00 14,795.00 DEVELOPER DEPOSITS 898,173.26 898,173.26 MISC. DEPOSITS 438,723.66 438,723.66 AGENCY FUND DEPOSITS 1,551,010.69 1,551,010.69 TOTAL DEPOSITS 2,887,907.61 14,795.00 2,902,702.61 DEFERRED REVENUE 934,698 89 11,378 904.00 12,313,602.89 OTHER LIABILITIES TOTAL 934,698.89 11,378,904.00 12,313,602.89 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 64,335,000.00 7,750,000.00 72,085,D00.00 TOTAL LONG TERM DEBT 951,847.65 84,261,978.00 7,750,000.00 92,963,825.65 TOTAL LIABILITIES 8,192,319.27 951,847.65 24,293,370.04 84,261,978.00 7,750,000.00 125,449,514.96 EQUITY -FUND BALANCE 56,402,392.97 20,711,742.00 45,113,812.29 9,988,279.05 291,763.24 132,507,989.55 TOTAL LIABILITY & EQUITY 64,594,712.24 20,711,742.00 951 847 65 69 407182 33 9,988,279.05 84,261,978.00 291,763.24 7 750 000 00 257 957504.51 (0.05) (0.00) (0.05) CASH & INVESTMENT TOTAL 103,464,623.89 PREMIUMIDISCOUNT ON INVESTMENT (80 62 8,76) TOTAL 103,374,355.13 r @�%§kSk a ) £k)\)m§ U) Cl) -qCl) LO �kkC, `k/\/@/ cq 04-0� cq LO'tLOn � k§%%§m% koo§§(§§ 2CwCw w 22,ra4 •zaaa 2§Sm2GF- ° °°°° ° 2fwwo ƒwwww � ƒ�Q$�-S mac%(§CN( �cl9g9cl )Qwww w (Dwaw co k44a@ � )\})}�k Ekkm§§(D §c0� Cl) ƒk/)k0§ fkkk§§k CN - Cl) o pn- 200oc o�ow�w& R�04M2~Q o�o�noN R3022~% §K§\in$ §@@@§K q�"CNR _R"0)n�� _ o 2vnaa «co60co /Kf( / �\{LOCO]\ #cl�2°A #(6+(D o 3aaaa ° S@##aoa �0k2ll §14 "@ nIqa �ccoea (6 as as kk kk �§ �$ kkk %$§ L)�� £ °�■ 2-C )]\} ƒ])) 22%§ 222E && kk fk\§wkkwwBtf uuw)/ 2k&72A2ƒ 2A&A�f§Lk ka2 2&E ° mfALL mm:£CCLL000 Af) \2 ) §$ /ƒ<<< INVESTMENT ADVISORY BOARD Meeting Date: TITLE: June 12, 2002 Continued Consideration of Fiscal Year 2002/03 Investment Policies BACKGROUND: Business Session No. B Pursuant to State Legislation the City investment policies must be approved on an annual basis by the City Council. This approval is done in June of each year. During the last several months, the Board has met to update the City Investment Policy. A strike out version of the Investment Policy has been attached Pursuant to the Investment Policy, the Board meets with the City Manager and City Attorney to discuss the Investment Policy before they are forwarded to the City Council for their consideration. RECOMMENDATION: Forward the revised Investment Policy to the City Council for their consideration with an appropriate recommendation. hn M. Falconer, Finance Director CITY OF LA QUINTA Investment Policy Table of Contents Section Topic Page Executive Summary 2 1 General Purpose 5 II Investment Policy 5 III Scope 5 IV Objectives 6 ► Safety ► Liquidity ► Yield ► Diversified Portfolio V Maximum Maturities 7 VI Prudence 7 VII Delegation of Authority 8 VIII Conflict of Interest 8 IX Authorized Financial Dealers and Institutions 8 ► Broker/Dealers ► Financial Institutions X Authorized Investments and Limitations 10 XI Investment Pools 13 XII Safekeeping and Custody 14 XIII Interest Earning Distribution Policy 14 XIV Internal Controls and Independent Auditors 14 XV Benchmark 16 XVI Reporting Standards 16 XVII Investment of Bond Proceeds 17 XVIII Investment Advisory Board - City of La Quinta 17 IX Investment Policy Adoption 17 Appendices: A. Summary of Authorized Investments and Limitations 19 B. Municipal Code Ordinance 2.70 - Investment Advisory Board 20 C. Municipal Code Ordinance 3.08 - Investment of Moneys and Funds 21 D. Segregation of Major Investment Responsibilities 23 E. Listing of Approved Financial Institutions 24 F. Broker/Dealer Questionnaire and Certification 25 G. Investment Pool Questionnaire 30 H. Glossary 34 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 2 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 of the annual audit of the City of La Quinta's financial statements the independent auditor reviews the adequacy of those controls and comments if weaknesses are found. Investment responsibilities carry added duties of insuring that investments are made without improper influence or the appearance to a reasonable person of questionable or improper influence. The City of La Quinta Investment Policy maintains a listing of financial institutions which are approved for investment purposes. All Broker/Dealers and financial institutions selected by the Treasurer to provide investment services will be approved by the City Manager subject to City Council approval. The Treasurer will be permitted to invest only in City approved investments up to the maximum allowable percentages or dollar limitations and, where applicable, through the bid process requirements. Authorized investment vehicles and related maximum portfolio positions are listed in Appendix A - Summary of Authorized Investments and Limitations. At least two bids will be required of investments in the authorized investment vehicles. Collateral ization will be required for Certificates of Deposits in excess of $100,000. Collateral will always be held by an independent third party from the institution that sells the Certificates of Deposit to the City. Evidence of compliance with State 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, except the projected annual dollar amount as detailed in Section lXX V, may be invested in U.S. Treasury bills, notes and bonds maturing between 2 and 5 years. 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. 3 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. 0 P.O. Box 1504 78-495 CALLE TAMPICO LA QUINTA, CALIFORNIA 92253 City of La Quinta Statement of Investment Policy July 1, 2001 2002 through June 30, 2002 2003 (760) 777-7000 FAX (760) 777-7101 Scheduled for Adoption by the City Council on June 4-9 18, 2001 2002 GENERAL PURPOSE The general purpose of this document is to provide the rules and standards users must follow in administering the City of La Quinta cash investments. II INVESTMENT POLICY 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. ` 5 g�� IV OBJECTIVES The primary objective, in order of priority, of the City of La Quinta's investment activity shall be: 1. Safety Safety of principal is the foremost objective of the investment program. Investments of the City of La Quinta shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio in accordance with the permitted investments. The objective will be to mitigate credit risk and interest rate risk. A. Credit Risk Credit Risk - is the risk of loss due to the failure of the security issuer or backer. Credit risk may be mitigated by: ► Limiting investments to the safest types of securities; ► Pre -qualifying the financial institutions, and broker/dealers, which the City of La Quinta will do business; and ► Diversifying the investment portfolio so that potential losses on individual securities will be minimized. B. Interest Rate Risk Interest Rate risk is the risk that the market value of securities in the portfolio will fall due to changes in general interest rates. Interest rate risk may be mitigated by: ► Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity; and ► By investing operating funds primarily in shorter -term securities. 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. Securities shall not be sold prior to maturity with the following exceptions: ► A declining credit quality security could be sold early to minimize loss of principal; ► Liquidity needs of the portfolio require that the security be sold. 6 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 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 MAX/MUM MATURITIES It is the policy of the City of La Quinta to hold securities and other investments in cash in financial instruments until maturity, thus avoiding the risk that the market value on investments fluctuates with overall market interest rates. The hold until maturity policy shall not prevent the sale of a security to minimize loss of principal when the issuer or backer suffers declining credit worthiness. The hold until maturity policy requires that the City of La Quinta 's investment portfolio is structured so that sufficient funds are available from maturing investments and other sources to meet anticipated cash needs. To meet anticipated cash needs, it is essential that the the Treasurer have reasonably accurate, diligently prepared cash flow projections. Annually, the Treasurer shall project the amount of funds not expected to be disbursed within five years. For FY 2002103, the amount of such funds was $10 million. Funds up to that amount may be invested in U.S. Treasury bills, notes and bonds maturing between 2 and 5 years. For all other funds, investments are limited to two years maximum maturity. VI 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. 7 VII DELEGATION OF AUTHORITY Authority to manage the City of La Quinta's investment portfolio is derived from the City Ordinance. Management responsibility for the investment program is delegated to the City Treasurer, who shall establish written procedures for the operation of the investment program consistent with the Investment Policy. Procedures should include reference to safekeeping, wire transfer agreements, banking service contracts, and collateral/depository agreements. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this Investment Policy and the procedures established by the City Treasurer. The City Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The City Manager or Assistant City Manager shall approve in writing all purchases and sales of investments prior to their execution by the City Treasurer. VIII CONFLICT OF INTEREST Investment responsibilities carry added duties of insuring that investments are made without improper influence or the appearance of improper influence. Therefore, the City Manager, Assistant City Manager, and the City Treasurer shall adhere to the State of California Code of Economic Interest and to the following: ► The City Manager, Assistant City Manager, and the City Treasurer shall not personally or through a close relative maintain any accounts, interest, or private dealings with any firm with which the City places investments, with the exception of regular savings, checking and money market accounts, or other similar transactions that are offered on a non-negotiable basis to the general public. Such accounts shall be disclosed annually to the City Clerk in conjunction with annual disclosure statements of economic interest. ► All persons authorized to place or approve investments shall report to the City Clerk kinship relations with principal employees of firms with which the City places investments. IX AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS The City of La Quinta Investment Policy maintains a listing of financial institutions which are approved for investment purposes. In addition a list will also be maintained of approved broker/dealers selected by credit worthiness, who maintain an office in the State of California. 1. Broker/Dealers who desire to become bidders for investment transactions must supply the City of La Quinta with the following: ► Current audited financial statements ► Proof of National Association of Security Dealers Certification 0 ► Trading resolution ► Proof of California registration ► Resume of Financial broker ► Completion of the City of La Quinta Broker/Dealer questionnaire which contains a certification of having read the City of La Quinta Investment Policy The City Treasurer shall evaluate the documentation submitted by the broker/dealer and independently verify existing reports on file for any firm and individual conducting investment related business. The City Treasurer will also contact the following agencies during the verification process: ► National Association of Security Dealer's Public Disclosure Report File - 1-800-289-9999 ► State of California Department of Corporations 1-916-445-3062 All Broker/Dealers selected by the City Treasurer to provide investment services will be approved by the City Manager subject to City Council approval. The City Attorney will perform a legal review of the trading resolution/investment contract submitted by each Broker/Dealer. Each securities dealer shall provide monthly and quarterly reports filed pursuant to U.S. Treasury Department regulations. Each mutual fund shall provide a prospectus and statement of additional information. 2. Financial Institutions will be required to meet the following criteria in order to receive City funds for deposit or investment: A. Insurance - Public Funds shall be deposited only in financial institutions having accounts insured by the Federal Deposit Insurance Corporation (FDIC) B. Collateral - The amount of City of La Quinta deposits or investments not insured by the FDIC -shall be 1 10% collateralized by securities' or 150% mortgages' market values of that amount of invested funds plus unpaid interest earnings. C. Disclosure - Each financial institution maintaining invested funds in excess of the FDIC insured amount shall furnish the City a copy of the most recent Annual Call Report. The City shall not invest in excess of the FDIC insured amount in banking institutions which do not disclose to the city a current listing of securities pledged for collateralization in public monies. 9 X 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, except that up to million the projected annual dollar amount, as detailed in Section MX V, may be invested in U.S. Treasury bills, notes and bonds maturing between 2 and 5 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- 40 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 k3 $5 million per issuer. 10 • 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 (2) a maximum of 44 3 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 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 11 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 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. 12 Collateralization will be required for Certificates of Deposits in excess of the FDIC insured amount. The type of collateral is limited to City authorized investments. Collateral will always be held by an independent third party from the institution that sells the Certificates of Deposit to the City. Evidence of compliance with State Collateral ization 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 collateralization 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. XI INVESTMENT POOLS There are three (3) types of investment pools: 1) state -run pools, 2) pools that are operated by a political subdivision where allowed by law and the political subdivision is the trustee i.e. County Pool; and 3) pools that are operated for profit by third parties. The City of La Quinta Investment Policy has authorized investment with the State of California's Treasurers Office Local Agency Investment Fund commonly referred to as LAIF. LAIF was organized in 1977 through State Legislation Section 16429.1, 2 and 3. Each LAIF account is restricted to a maximum investable limit of $30 40 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. 13 XII 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. XIII 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 earnings and expenses to that particular fund. XIV 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 14 provide a reasonable assurance that management of the investment function meets the City's objectives. The internal controls shall address the following: a. Control of collusion. Collusion is a situation where two or more employees are working in conjunction to defraud their employer. b. Separation of transaction authority from accounting and record keeping. By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved. C. Custodial safekeeping. Securities purchased from any bank or dealer including appropriate collateral (as defined by State Law) shall be placed with an independent third party for custodial safekeeping. d. Avoidance of physical delivery securities. Book entry securities are much easier to transfer and account for since actual delivery of a document never takes place. Delivered securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities. e. Clear delegation of authority to subordinate staff members. Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions. Clear delegation of authority also preserves the internal control structure that is contingent on the various staff positions and their respective responsibilities as outlined in the Segregation of Major Investment Responsibilities appendices. f. Written confirmation or telephone transactions for investments and wire transfers. Due to the potential for error and improprieties arising from telephone transactions, all telephone transactions shall be supported by written communications and approved by 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 15 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. XV 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. XVI 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 315t and June 30th Treasurers Reports be sent to the California Debt and Advisory Commission within sixty days of the end of the quarter. The City Treasurer shall submit a monthly Treasurers Report to the City Council and the Investment Advisory Board that includes all cash and investments under the authority of the Treasurer. The Treasurers Report shall summarize cash and investment activity and changes in balances and include the following: ► A certification by City Treasurer; ► A listing of Purchases and sales/maturities of investments; ► Cash and Investments categorized by authorized investments, except for LAIF which will be provided quarterly and show yield and maturity; ► Comparison of month end actual holdings to Investment Policy limitations; ► Current year and prior year monthly history of cash and investments for trend analysis; ► Balance Sheet; ► Distribution of cash and investment balances by fund; ► A comparison of actual and surplus funds; ► A year to date historical cash flow analysis and projection for the next six months; ► A two-year list of historical interest rates. 16 XVII 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. XVIII INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA The Investment Advisory Board (IAB) consists of seven members of the community that have been appointed by and report to the City Council. The IAB usually_meets on a monthly basis, but at least quarterly to (1) review at least annually the City's Investment Policy and recommend appropriate changes; (2) review monthly Treasury Report and note compliance with the Investment Policy and adequacy of cash and investments for anticipated obligations; (3) receive and consider other reports provided by the City Treasurer; (4) meet with the independent auditor after completion of the annual audit of the City's financial statements, and receive and consider the auditor's comments on auditing procedures, internal controls and findings for cash and investment activities, and; (5) serve as a resource for the City Treasurer on matters such as proposed investments, internal controls, use or change of financial institutions, custodians, brokers and dealers. The appendices include City of La Quinta Ordinance 2.70 entitled Investment Advisory Board Provisions. IX 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. 17 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. 18 I ° uiyu a a O a c OLL c OLL °o d Q 7�° umi W U m a `o `o QQg o u m T N fI1 m 10 N O T N O1 C m m EE m � E T N `m0 m 0E T T T T T -ET N N N N N N N O W m O tD W y � o m m u u o > � A N Y c E m ° h _ E E a a U 0 E n8 w E c m n ~ of o 0 0D E �' f9 m o 0 0 - u L M n ¢ ` E Gl u U, 0 o o E m o o O m E LL O a O a o a r O a ° a ! O a ° � O a a° T E O ccc n ° o o O O O 0 0 O O O 0 n ,S o 9CC O F O ~O O o C '4 O LL O a ° LL 0 LL O O O Op O Oo OO O a M �p M a N Q Z ° mmm io t0 o 10 p � RCl L Yl OSL� M o N o mm l0 o v m 4 $ � H mo n m 0 3 W ° 0 ° 2 m .m `o m o Sv U E U xu �a glu n E o m ° �m ° Q U g m o u U� u .A ° v n E'Z-m E CG,¢= EE �',N _ c Zo � @ v E E a m O a c c@ y § N v n LL ° uomO 2 -2 2 ILI1 q)g ^.LLammalmL.. 2f�_a aLL 5 n Z 0YmZ 0 0m Fau° COC u-c E o 0OOE0 o °m�mo Z U ocC °o E`n o 0 O E Q C ° �>fmo=n E °rn oVn m n m 'c N M aOE Y U O` 0) M M N O U E a E - E n m E O o o v E moW EEn =-¢ E m V E �ro Us m amiminim 0 u U a Z c o u y ¢a�oao16o: a oa a� L ? E n £ aco N _ m Yn m ay a m � ' E t o n a `m .o ,_ L) u .a n U n o m ° ¢ m u = lz C°- a n @ E . o m vo u o u m o c N o t Mo 0 i o n m c c n �£ of i°nV E ul g (j m E u o h7e @a °& on U El ua 2` c v u a U°' E n° u c m 5 m m u m Yn Ewo a n Tn foo So 0 4.Wm a° ` m m� u 9 v m Q 5 a m o.N ao v� °o Ea oc aom ac£ . O m _ °ec °� a a c '.�'ay & n0 F m y ui � 5 o EE u E m - is m `o G n a u ° 2C3 ua o um U t `O O U CO O E m E 1' a m N M C i F N ¢ 10 O c °o LL Appendix A o 'emu aa�a n o m m H n E m E n o N c fi 'o 0 o o a % n _ c m E o c o o E d E N o E o o0go a o m a o `oc-2Eu m� mS2 EE0=c E�amr E5_m Eo�oo E u o m ° o u E u T �o mT^c� r i a u ? E ` -'o 19 Appendix B Chapter 2.70 INVESTMENT ADVISORY BOARD PROVISIONS Sections: 2.70.010 General Rules Regarding Appointment. 2.70.020 Board meetings. 2.70.030 Board functions. 2.70.010 General rules regarding appointment A. Except as set out below, see Chapter 2.06 for General Provisions. B. The Investment Advisory Board (the "board") is a standing board composed of seven (7) members from the public that are appointed by city council. La Quinta residency is preferred, but not a requirement for board members. Recruitment for members may be advertised outside of the city". C. Background in the investment field and/or related experience is preferred. Background information will be required and potential candidates must agree to a background check and verification. D. On an annual basis, in conjunction with the Political Reform Act disclosure statutes, or at any time if a change in circumstances warrants, each board member will provide the City Council with a disclosure statement which identifies any matters that have a bearing on the appropriateness of that member's service on the board. Such matters may include, but are not limited to, changes in employment, changes in residence, or changes in clients. 2.70.020Board meetings. The Board usually will meet monthly, but this schedule may be extended to quarterly meetings upon the concurrence of the Board and the City Council. The specific meeting dates will be determined by the Board Members and meetings may be called for on an as needed basis. 2.70.030Board functions. 1. The principal functions of the Board are: (1) review at least annually the City's Investment Policy and recommend appropriate changes; (2) review monthly Treasury Report and note compliance with the Investment Policy and adequacy of cash and investments for anticipated obligations; (3) receive and consider other reports provided by the City Treasurer; (4) meet with the independent auditor after completion of the annual audit of the City's financial statements, and receive and consider the auditor's comments on auditing procedures, internal controls, and findings for cash and investment activities, and; (5) serve as a resource for the City Treasurer on matters such as proposed investments, internal controls, use or change of financial institutions, custodians, brokers and dealers. 2. The Board will report to the City Council after each meeting either in person or through correspondence at a regular City Council meeting. 20 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) 21 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) 22 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 Manager or Treasurer Confirm wires, if applicable City ManageF eF Accounting Manager or Financial Services Assistant Record investment transactions in City's accounting records Accounting Manager or Financial Services Assistant Investment verification - match broker confirmation to City investment records Arwount TeGhnieian City Treasurer and Financial Services Assistant Reconcile investment records - to accounting records and bank statements Aeoeunt TeehnkMn Financial Services Assistant Reconcile investment records - to Treasurers Report of investments Areount Technician Accounting Manager Security of investments at City Vault Security of investments Outside City Third Party Custodian Review internal control procedures External Auditor 23 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 ` ittef, 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 1998 RDA Project Area 1 &2 — US Bank 2001 RDA Project Area 1 — US Bank Assessment Districts — US Bank No Changes to this listing may be made without City Council approval 24 1. 2. 3. :11 5. A 7 Appendix F BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION Name of Firm: Address: Telephone: ( 1 Broker's Representative to the City (attach resume): Name: Title: Telephone: ( ) Manager/Partner-in-charge (attach resume): Name: Title: Telephone: List all personnel who will be trading with or quoting securities to City employees (attach resume) Name: Title: Telephone: Which of the above personnel have read the City's Investment Policy? 8. Which instruments are offered regularly by your local office? (Must equal 100%) % U.S. Treasuries % Repos % BA's % Reverse Repos % Commercial Paper % CMO's % CD's % Derivatives % Mutual Funds % Stocks/Equities Agencies (specify): % Other (specify): 25 9. References -- Please identify your most directly comparable public sector clients in our geographical area. Entity Contact Telephone Client Since Entity Contact Telephone Client Since 10. Have any of your clients ever sustained a loss on a securities transaction arising from a misunderstanding or misrepresentation of the risk characteristics of the instrument? If so, explain. 1 1 . Has your firm or your local office ever been subject to a regulatory or state/ federal agency investigation for alleged improper, fraudulent, disreputable or unfair activities related to the sale of securities? Have any of your employees been so investigated? If so, explain. 12. Has a client ever claimed in writing that you were responsible for an investment loss? Yes No If yes, please provide action taken Has a client ever claimed in writing that your firm was responsible for an investment loss? Yes No If yes, please provide action taken 26 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. im Is your firm a member in the S.I.P.C. insurance program. Yes If yes, explain primary and excess coverage and carriers. 17. What portfolio information, if any, do you require from your clients? No 18. What reports and transaction confirmations or any other research publications will 27 the City receive? 19. Does your firm offer investment training to your clients? Yes No 20. Does your firm have professional liability insurance. Yes No If yes, please provide the insurance carrier, limits and expiration date. 21. Please list your NASD Registration Number 22. Do you have any relatives who work at the City of La Quinta? Yes No If yes, Name and Department 23. Do you maintain an office in California. Yes No 24. Do you maintain an office in La Quinta or Riverside County? Yes No 25. Please enclose the following: • Latest audited financial statements. • Samples of reports, transaction confirmations and any other research/publications the City will receive. • Samples of research reports and/or publications that your firm regularly provides to clients. • Complete schedule of fees and charges for various transactions. 'CERTIFICATION' *CERTIFICATION I hereby certify that I have personally read the Statement of Investment Policy of the City of La Quinta, and have implemented reasonable procedures and a system of controls designed to preclude imprudent investment activities arising out of transactions conducted between our firm and the City of La Quinta. All sales personnel will be routinely informed of the City's investment objectives, horizons, outlooks, strategies and risk constraints whenever we are so advised by the City. We pledge to exercise due diligence in informing the City of La Quinta of all foreseeable risks associated with financial transactions conducted with our firm. By signing this document the City of La Quinta is authorized to conduct any and all background checks. Under penalties of perjury, the responses to this questionnaire are true and accurate to the best of my knowledge. Broker Representative Date Title Sales Manager and/or Managing Partner* Date Title 29 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? K%1 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)? 31 OPERA TIONS The answers to these questions will help you determine whether this pool meets your operational requirements: 1. Does the pool limit eligible participants? 2. What entities are permitted to invest in the pool? 3. Does the pool allow multiple accounts and sub -accounts? 4. Is there a minimum or maximum account size? 5. Does the pool limit the number of transactions each month? What is the number of transactions permitted each month? 6. Is there a limit on transaction amounts for withdrawals and deposits? a. What is the minimum and maximum withdrawal amount permitted? b. What is the minimum and maximum deposit amount permitted? 7. How much notice is required for withdrawals/deposits? 8. What is the cutoff time for deposits and withdrawals? 9. Can withdrawals be denied? 10. Are the funds 100% withdrawable at anytime? 11. What are the procedures for making deposits and withdrawals? a. What is the paperwork required, if any? b. What is the wiring process? 12. Can an account remain open with a zero balance? 13. Are confirmations sent following each transaction? STA TEMENTS It is important for you and the agency's trustee (when applicable), to receive statements monthly so the pool's records of your activity and holding are reconciled by you and your trustee. 32 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? 33 Appendix H GLOSSARY (Adopted from the Municipal Treasurers Association) The purpose of this glossary is to provide the reader of the City of La Quinta investment policies with a better understanding of financial terms used in municipal investing. AGENCIES: Federal agency securities and/or Government -sponsored enterprises. ASKED: The price at which securities are offered. BANKERS' ACCEPTANCE (BA): A draft or bill of exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.) See Offer. BROKER: A broker brings buyers and sellers together for a commission. CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large -denomination CD's are typically negotiable. COLLATERAL: Securities, evidence of deposit or other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. COMMERCIAL PAPER: Short-term unsecured promissory notes issued by a corporation to raise working capital. These negotiable instruments are purchased at a discount to par value or at par value with interest bearing. Commercial paper is issued by corporations such as General Motors Acceptance Corporation, IBM, Bank America, etc. COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the City of La Quinta. It includes five combined statements for each individual fund and account group prepared in conformity with GAAP. It also includes supporting schedules necessary to demonstrate compliance with finance -related legal and contractual provisions, extensive introductory material, and a detailed Statistical Section. COUPON: (a) The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value. (b) A certificate attached to a bond evidencing interest due on a payment date. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities. DERIVATIVES: (1) Financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index or security, and may include a leveraging factor, or (2) financial contracts based upon notional amounts whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities or commodities). 34 DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount. 3. DISCOUNT SECURITIES: Non -interest bearing money market instruments that are issued a discount and redeemed at maturity for full face value, e.g., U.S. Treasury Bills. DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, e.g., S&L's, small business firms, students, farmers, farm cooperatives, and exporters. 1. FNMAs (Federal National Mortgage Association) - Used to assist the home mortgage market by purchasing mortgages insured by the Federal Housing Administration and the Farmers Home Administration, as well as those guaranteed by the Veterans Administration. They are issued in various maturities and in minimum denominations of $10,000. Principal and Interest is paid monthly. 2. FHLBs (Federal Home Loan Bank Notes and Bonds) - Issued by the Federal Home Loan Bank System to help finance the housing industry. The notes and bonds provide liquidity and home mortgage credit to savings and loan associations, mutual savings banks, cooperative banks, insurance companies, and mortgage -lending institutions. They are issued irregularly for various maturities. The minimum denomination is $5,000. The notes are issued with maturities of less than one year and interest is paid at maturity. The Other federal agency issues are Small Business Administration notes (SBAs), Government National Mortgage Association 35 bonds are issued with various maturities and carry semi-annual coupons. Interest is calculated on a 360-day, 30-day month basis. FLBs (Federal Land Bank Bonds) - Long-term mortgage credit provided to farmers by Federal Land Banks. These bonds are issued at irregular times for various maturities ranging from a few months to ten years. The minimum denomination is $1,000. They carry semi-annual coupons. Interest is calculated on a 360-day, 30 day month basis. 4. FFCBs (Federal Farm Credit Bank) - Debt instruments used to finance the short and intermediate term needs of farmers and the national agricultural industry. They are issued monthly with three- and six-month maturities. The FFCB issues larger issues (one to ten year) on a periodic basis. These issues are highly liquid. 5. FICBs (Federal Intermediate Credit bank Debentures) - Loans to lending institutions used to finance the short-term and intermediate needs of farmers, such as seasonal production. They are usually issued monthly in minimum denominations of $3,000 with a nine -month maturity. Interest is payable at maturity and is calculated on a 360- day, 30-day month basis. 6. FHLMCs (Federal Home Loan Mortgage Corporation) - a government sponsored entity established in 1970 to provide a secondary market for conventional home mortgages. Mortgages are purchased solely from the Federal Home Loan Bank System member lending institutions whose deposits are insured by agencies of the United States Government. They are issued for various maturities and in minimum denominations of $10,000. Principal and Interest is paid monthly. notes (GNMAs), Tennessee Valley Authority notes (TVAs), and Student Loan Association notes (SALLIE-MAEs). FEDERAL DEPOSITOR INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits, currently up to $100,000 per deposit. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open - market operations. FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLBs is to liquefy the housing related assets of its members who must purchase stock in their district Bank. FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money. FEDERAL RESERVE SYSTEM: the central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. 36 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 37 QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return. REPURCHASE AGREEMENT (RP OR REPO): A repurchase agreement is a short-term investment transaction. Banks buy temporarily idle funds from a customer by selling U.S. Government or other securities with a contractual agreement to repurchase the same securities on a future date. Repurchase agreements are typically for one to ten days in maturity. The customer receives interest from the bank. The interest rate reflects both the prevailing demand for Federal funds and the maturity of the repo. Some banks will execute repurchase agreements for a minimum of $100,000 to $500,000, but most banks have a minimum of $1,000,000. REVERSE REPURCHASE AGREEMENTS (RRP or RevRepo) - A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RRP extensively to finance their positions. Exception: When the Fed is said to be doing RRP, it is lending money, that is, increasing bank reserves. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection. purchase and sale of outstanding issues following the initial distribution. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. SEC RULE 15C3-1: See Uniform Net Capital Rule STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMAS, SLMA, etc.) And Corporations which have imbedded options (e.g., call features, step- up coupons, floating rate coupons, derivative - based returns) into their debt structure, Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the Shape of the yield curve. SURPLUS FUNDS: Section 53601 of the California Government Code defines surplus funds as any money not required for immediate necessities of the local agency. The City has defined immediate necessities to be payment due within one week. TREASURY BILLS: A non -interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months or one year. TREASURY BONDS: Long-term coupon -bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years. TREASURY NOTES: Medium -term coupon -bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker -dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. �41* Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. UNIFORM PRUDENT INVESTOR ACT: The State of California has adopted this Act. The Act contains the following sections: duty of care, diversification, review of assets, costs, compliance determinations, delegation of investments, terms of prudent investor rule, and application. YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par of plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. INVESTMENT ADVISORY BOARD Correspondence & Written Material Item A Meeting Date: June 12, 2002 TITLE: Month End Cash Report - May 2002 BACKGROUND: This cash report is not a complete Treasury Report (exclude petty cash, deferred compensation and fiscal agent balances) but would report in a timely fashion selected cash balances. This report also includes other statistical investment data for the Board to review. RECOMMENDATION: Information item only. JW M. Falconer, Finance Director 2 O a0.. LL (n C O O (D 0) In CD ^ M N m(14 0) 04 0(U N �Cl)00 �O N, N�N� 000O- 0000O 0O BNO� � Fp- �pj)OOO I- O r Cl) 0 V OOOnA Mm M r^ ON IT(M v N Lf) Lf) N N 00 O O O O O 00 q O 00 O O W N O V V N N Cl) E(+) LO OO W N N N NRLn eq �T C. co R�OCl) C O W NN N� M M Cl) 00 0) 00 O) 00 Q) 00 m LL co O O R O L M 0 W Mgr � I M� N N O (D (D V V O O O (D O (D O O O �� L U D) (00 N (OD N ( L M N N M eM �2 Za C 01 � 0) LL - N N N N p m N uoi N N O O) (OD M m W q LL d M m M M N M D) M M M j V (D O O O N 'I ^ I- O rn 0) N 00 Q) M O O a17 (D l V; LL Y(n(NpNRC M OI0 (p M Cl) V V OQ U Nt(pM V O M 0) O 00 D) NO) r 0) 00 N N Um ��oog0 N (v) (D m O u) N in L v � 117v (D N N N N a V y N N 0 O N Q) �C U M N V Y O y ` N N O �� N V U d m F- T L N c c U 0) m y O7 y- w = p C m wV r_ CO0) CE M- 0 m° p m U m CL m mccl I- ;pC t ZN 0.92, m aa5vs H p E E m E=T��m aaa 'm m. w a WOzoAl2<2¢d�y w�o00EE0 0 O C C w m 3 0 in d Of N 7 N 7 y¢ m .p. Q N ` O �r N o) nm " wU y m � c m O �°v > e m 0 m r« 7 L O y C Q N O 0-0 O U y N d 00 E m m « y `o «_ d N y iq « a10ia o ~ mm m E O D L m m � « T-aa o .E t3 n L)i 2!-m D._ c 3 mm y .0a m m -5 m 7 a p m O U m L U �a«C O t3 m O N O"O" y F- C �. 0! E-C a (a n. 0 L' O G O) Q C C V o m C E a..� E a my � Fym L C N N m Cm �\ Q' 0 L p V) lL - E CY m a m c o m L 0 a aorn> U 0. m 5. 0 L C N o O« E Cp O t U m m c O p ` CC E a m F- -c ry V O 2 0 o LL. U w E A °t d d 0 m a.m m — U y) N m m« N y d « c E tf 0 3 >' O x 0 m y m e� L y a m 0 c� 0 > c O C d y .0 m a 7 L m U 0) d E -O « C � a 0.2y u) U C OJ C Cp y 0 01 C CN wo ` O) O O r ` d0 m E� a `0 7 X a m tm m E oOy F m Q7 'C apO y«CF mU n i+rw 0m o«mo a > LE I-F- m E 0 F- a LL. coN« 5 0 m LAIF Performance Report Page I of 2 Philip Angelides, State Treasurer Inside the State Treasurees Office Local Agency Investment Fund LAIF Performance Report Reporting Date: 05/29102 Effective Date: 05/29/02 Quarter Yield: 2.79% Daily: 2,71% Year: 3,52% Life: 176 Quarter Ending 03/31/02 Apportionment Rate: 2.96% Earnings Ratio: .00008101846104215 Fair Value Factor: 1.000783911 (updated) Monthly Average For April: 2.845% Pooled Money I nuestment Account Portfolio Composition $49.6 Billion 4/30/02 Reverses Loans -2.15% Treasuries Corp orate U2% 13M Bb nds hibrtgages 465% 0.02% Paper Agencies 22.47% 29.17% Ba nkers Acceptances DD4% Time Deposits 10.43% ClysmNs 1520% * Adobe PDF version of LAIF Performance. 0 Tre asuries [3 Mortgages E3 Agencies 0 C[YsMNS E3 Time Deposits m Bankers Acceptances * Fbpo * ConTnercial Paper * Corporate Bonds [3 Loans w Reverses http://www.treasurer.ca.gov/laif/performance.htm 6/3/2002 FRB:Commercial Paper Rates and Outstandings Pagel of 3 Federal Reserve Release Commercial Paper ,gin w Cc*aan Release I About I Outstandings ( Historical discount rates I Historical outstandincs Data as of May 31, 2002 Commercial Paper Rates and Outstandings Derived from data supplied by The Depository Trust Company Posted June 3, 2002 Discount rates A2/P2 nonfinancial 1-day 1.81 1.80 2.01 7-day 1.76 1.77 2.07 15-day 1.77 1.77 2.01 30-day 1.76 1.74 1.99 60-day 1.78 1.74 2.11 90-day 1.78 1.73 2.10 Yield curve Monev market basis 2.1,80 00 1 7 15 30 60 Days to Maturity Financial --- Nasfinondol ••••• A2%P3 http://www.federalreserve.gov/releases/cp/ Percent 2.12 2,10 2.08 2.04 2.02 1.98 1.96 1.94 1.92 1.90 1.fi 8 1.86 1.84 1.82 1.78 1.76 1.74 90 6/3/2002 FRB:Commercial Paper Rates and Outstandings Page 2 of 3 Discount rate spread Thirty -day A2/P2 less AA nonfinancial commercial paper (daily) 01JAN98 01JAN99 01JAN00 01AN01 01JAN02 — -- A2/P2 spread, S—dry moving averoc Discount rate history Thirty -day commercial paper (daily) 01JAN98 01JAN99 01JANOO 01JAN01 _ Financial — — — Nonfinoncial •••.. A2/P2 Outstandings Weekly (Wednesday), seasonally adjusted Billions of dollars Basis points 150 140 130 120 110 1OD 90 80 70 60 50 40 30 20 10 01 AN03 Percent 8 7 6 5 4 3 2 1 01JAN02 01JAN03 Billions of dollars http://www.federalreserve.gov/releases/cp/ 6/3/2002 FRB:Commercial Paper Rates and Outstandings Page 3 of 3 1300 120C t• 1000 900 BOO 01JAN98 01JAN99 01JANOD 01JAN01 01SAN02 — Financial --- Nonfinancial 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 categories Volume Statistics 2002:Q1 Release I About I Outstanding s I Historical discount rates I Historical outstandings Dome I Statistical releases Accessibil To comment on this site, please fill out our feedback form. Last update: June 3, 2002 360 350 340 330 320 310 300 2.90 280 270 260 250 240 230 220 210 200 190 180 170 01 JAN03 GC-6 http://www.federalreserve.gov/releases/cp/ 6/3/2002 FRB: H.15--Selected Interested Rates, Web -Only Daily Update-- May 31, 2002 Page 1 of 3 H.15 Selected Interest Hates (Daily) til>i� to C'ir��iam Release Date: May 31, 2002 Weekly release dates and announcements I Historical data 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 throug H.15 DAILY UPDATE: WEB RELEASE ONLY For immediate release SELECTED INTEREST RATES May 31, 2002 Yields in percent per annum 2002 2002 2002 2002 May May May May Instruments 27 28 29 30 Federal funds (effective) 1 2 3 1.75 1.88 1.79 1.80 Commercial paper 3 4 5 6 Nonfinancial 1-month 1.75 1.75 1.76 2-month 1.75 1.74 1.74 3-month 1.75 1.75 1.76 Financial 1-month 1.77 1.77 1.75 2-month 1.78 1.78 1.79 3-month 1.80 1.80 1.79 CDs (secondary market) 3 7 1-month 1.80 1.80 1.80 3-month 1.84 1.83 1.83 6-month 2.04 2.01 2.00 Eurodollar deposits (London) 3 8 1-month 1.78 1.79 1.78 3-month 1.83 1.82 1.80 6-month 2.04 2.01 1.99 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 1.71 1.70 1.70 3-month 1.74 1.72 1.72 6-month 1.90 1.87 1.85 Treasury constant maturities 11 1-month 1.73 1.73 1.73 3-month 1.77 1.75 1.75 6-month 1.94 1.91 1.90 1-year 2.41 2.35 2.31 2-year 3.30 3.24 3.17 3-year 3.82 3.76 3.69 5-year 4.46 4.41 4.36 7-year 4.87 4.81 4.74 http://www.federalreserve.gov/releases/hl5/update/ G (11 6/3/2002 FRB: H.15--Selected Interested Rates, Web -Only Daily Update-- May 31, 2002 Page 2 of 3 10-year 5.16 5.11 5.06 20-year 5.83 5.79 5.74 Treasury long-term average (25 years and above) 12 13 5.81 5.78 5.74 Interest rate swaps 14 1-year 2.69 2.65 2.63 2-year 3.66 3.62 3.59 3-year 4.24 4.20 4.15 4-year 4.61 4.57 4.53 5-year 4.89 4.84 4.80 7-year 5.29 5.24 5.20 10-year 5.64 5.60 5.54 30-year 6.16 6.13 6.11 Corporate bonds Moody's seasoned Aaa 15 6.76 6.74 6.72 Baa 8.11 8.08 8.06 State & local bonds 16 5.14 Conventional mortgages 17 See overleaf for footnotes * Markets closed FOOTNOTES 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 http://www.federalreserve.gov/releases/h15/update/ 6/3/2002 FRB: H.15--Selected Interested Rates, Web -Only Daily Update-- May 31, 2002 Page 3 of 3 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. 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: May 31, 2002 , 1. \. G. , http://www.federalreserve.gov/releases/hl 5/update/ 6/3/2002 :�, ca =3 Q UUco< c o a) � � U N X O N N � N Ln O Ln y N c () m X a) E o c '~ O Co CF) O y 'C a Q -�o O r O N Fes+ O N m Z31Z c O 3v > Z �Q0.0 CN �00041-V' r- CTMCM CAS N C0C) d OM1�0 M Of-:O OcLO w CU MOO V �N � 00) Op0 C» co 'It N T N T M T 4 CO CO (Ar,M0 Co�V O C)NO �O M foN U?N CD N~ N T� N f� O CO CO W Qdoo MccooCOOLnV � CMO'OOD tf)� OOf �NNCDGo co 1-: NLn M .. aU') r- N V) ttn LLO 00 N CO M co T T N a0 d'TLn N {} Op �TM�� Cd �O d m� �� M�� N (D - MCA T (O � TNNOOo CD N T v OTT NCO T et N cm O t H m � N m c E x (D c co �, c CL m co c X � Q c a� K a IM rn 3z V C co p C CD a) a a) o • c d 7 c c ~ X> c Co ' a) H d c 3 ca O ad Z N O c a) U) x W d o c�a af9 > L co m n 'as a -0:wVO_d .. Q MF-W0W X c6 a) .o a WT WOU 01- p d lz L W c O E a) a 0- M O co T -p W c H a z w c O O O O O p 0 0 0 0 0 M a)00000000000 CS N f1 f1 CO CO 00 CD coC0 1T 00 � N M CA O Ln T CO T CO T CA I� a)O�'IT NLn�MOOCAM co �0000CML6rl: 0r-TMr, O? N M M N O O N T T as v 7 cm co LLJ W w w a W w }O UQ}vcm c w W> �� ..aC 4) O n- c >O U �O��O� c �vJ?Wz2vwWa 3 N WZU�U_��JaHZ m Zar2J=J�MMOF- -- WZ_00000C�L'� p (5 L (.)6-m0a-w?Q _t: INVESTMENT ADVISORY BOARD Correspondence & Written Material Item B Meeting Date: June 12, 2002 TITLE: Pooled Money Investment Board Report for March 2002 and LAIF Quarterly Answer Booklet Update, March 31, 2002 BACKGROUND: The Pooled Money Investment Board Report for March, 2002 is included in the agenda packet. At the May meeting, several Board Members had questions regarding the February 2002 Investment Report which Staff will research and report on at the July meeting. RECOMMENDATION: Receive & File STATE OF CALIFORNIA STATE TREASURER'S OFFICE POOLED MONEY INVESTMENT BOARD REPORT MARCH 2O02 TABLE OF CONTENTS SUMMARY................................................................. 01 SELECTED INVESTMENT DATA .................................... 02 PORTFOLIO COMPOSITION ........................................ 03 INVESTMENT TRANSACTIONS ..................................... 04 TIME DEPOSITS........................................................ 20 BANK DEMAND DEPOSITS .......................................... 34 POOLED MONEY INVESTMENT BOARD DESIGNATION... 35 POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF MARCH 2O02 WITH MARCH 2O01 (DOLLARS IN THOUSANDS) :: MARCH 2fl2:::: MARCH:2001:::: CHAiGE::::: Average Daily Portfolio $ 48,244,973 $ 44,260,909 +3,984,064 Accrued Earnings $ 117,230 $ 224,648 -107,418 Effective Yield 2.861 5.976 -3.115 Average Life -Month End (In Days) 188 187 +1 1 Total Security Transactions Amount $ 24,613,590 $ 28,309,438 -3,695,848 Number 531 616 -85 Total Time Deposit Transactions Amount $ 1,591,000 $ 1,736,600 -145,600 Number 137 143 -6 Average Workday Investment Activity $ 1,247,838 $ 1,365,729 -117,891 Prescribed Demand Account Balances For Services $ 643,788 $ 197,057 +446,731 For Uncollected Funds $ 128,288 $ 160,471 -32,183 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) March 31, 2002 DIFFERENCE IN PERCENT OF PERCENT OF PORTFOLIO FROM AMOUNT PORTFOLIO PRIOR MONTH $ 792,848 0 5,994,691 0 $ 6,787,539 $ 4,930,444 5,835,098 625,006 17,877 0 9,100,703 5,204,195 804 9,341,293 7,875 2,450,024 2,674,838 1,188,200 -1,002,512 $ 47,161,384 INVESTMENT ACTIVITY MARCH 2O02 NUMBER AMOUNT Pooled Money 531 $ 24,613,590 Other 14 6,185 Time Deposits 137 1,591,000 Totals 682 $ 26,210,775 PMIA Monthly Average Effective Yield 2.861 Year to Date Yield Last Day of Month 3.663 2 1.68 0.00 12.71 0.00 14.39 10.45 12.37 1.33 0.04 0.00 19.30 11.03 0.00 19.81 0.02 5.19 5.67 2.52 -2.12 100.00 FEBRUARY 2002 -.47 0.00 +1.45 0.00 +.98 +.93 +.69 -.68 +.01 0.00 -4.34 +.74 0.00 +.06 0.00 +.36 -.35 2.52 +.92 NUMBER AMOUNT 483 $ 21,968,939 13 25,148 146 2,309,100 642 $ 24,303,187 2.967 3.760 Cc Commercial Paper 19.81 % Bankers Acceptanc 0.04% Time 11 Pooled Money Investment Account Portfolio Composition $47.1 Billion Reverses Loans -2.12% Treasuries R 1 QO/ I A '2ooi CD's/BN's 13.70% 3 ges 10 Agencies 29.75% 3/31 /02 8 Treasuries 0 Mortgages ® Agencies ® CD's/BN's ■ Time Deposits EJ Bankers Acceptances ■ Repo 113 Commercial Paper ® Corporate Bonds ❑ Loans Reverses 03/01/02 REDEMPTIONS CD U/B CALIF 2.070% 03/01/02 2.070 $ 50,000 120 $ 345,000.00 2.098 CD U/B CALIF 2.070% 03/01/02 2.070 50,000 120 345,000.00 2.098 CID GECC 03/01/02 1.820 35,000 64 113,244.44 1.851 CID NCAT 03/01/02 1.830 50,000 64 162,667.67 1.861 CID NCAT 03/01/02 1.830 50,000 64 162,667.67 1.861 CID GECC 03/01/02 1.820 50,000 64 161,777.78 1.851 CID GMAC 03/01/02 2.680 50,000 81 301,500.00 2.733 CID GMAC 03/01/02 2.680 50,000 81 301,500.00 2.733 CID GMAC 03/01/02 2.680 50,000 81 301,500.00 2.733 CID FCAR 03/01/02 2.040 50,000 102 289,000.00 2.080 CID FCAR 03/01/02 2.040 50,000 102 289,000.00 2.080 CID GECC 03/01/02 1.810 50,000 113 284,069.44 1.845 CID GECC 03/01/02 1.810 50,000 113 284,069.44 1.845 CID AMER EXP 03/01/02 2.030 50,000 121 341,152.78 2.072 CID GECC 03/01/02 2.030 50,000 121 341,152.78 2.072 CID GECC 03/01/02 2.030 50,000 121 341,152.78 2.072 CID FMCC 03/01/02 2.710 50,000 136 511,888.89 2.776 CID FMCC 03/01/02 2.710 50,000 136 511,888.89 2.776 CID GMAC 03/01/02 2.880 50,000 136 544,000.00 2.952 CID GECC 03/01/02 2.300 50,000 140 447,222.22 2.352 CID GECC 03/01/02 2.300 50,000 140 447,222.22 2.352 CID FMCC 03/01/02 2.800 50,000 140 544,444.44 2.870 CID GMAC 03/01/02 2.850 50,000 140 554,166.67 2.921 CID GMAC 03/01/02 2.850 50,000 140 554,166.67 2.921 CID FMCC 03/01/02 2.800 50,000 142 552,222.22 2.870 CID FMCC 03/01/02 2.800 50,000 142 552,222.22 2.870 CID GMAC 03/01/02 2.800 50,000 142 552,222.22 2.870 CID GMAC 03/01/02 2.800 50,000 142 552,222.22 2.870 CID GMAC 03/01/02 2.800 50,000 142 552,222.22 2.870 CP GMAC 03/01/02 2.800 50,000 142 552,222.22 2.870 DISC NOTES FHLMC 03/01/02 3.660 50,000 260 1,321,666.67 3.811 PURCHASES CID FMCC 05/29/02 2.280 45,000 CID SRAC 05/31/02 2.300 50,000 CID GMAC 07/01/02 2.250 50,000 CID GMAC 07/01/02 2.250 50,000 CID GMAC 07/02/02 2.250 50,000 CID GMAC 07/02/02 2.250 50,000 03/04/02 REDEMPTIONS CID AMER EXP 03/04/02 1.760 50,000 19 46,444.44 1.786 CID AMER EXP 03/04/02 1.760 50,000 19 46,444.44 1.786 CID GECC 03/04/02 1.780 50,000 19 46,972.22 1.806 CID GECC 03/04/02 1.780 50,000 19 46,972.22 1.806 CID NCAT 03/04/02 1.780 50,000 19 46,972.22 1.806 4 03/04/02 REDEMPTIONS (continued) CP NCAT 03/04/02 1.780 50,000 19 46,972.22 1.806 CP NCAT 03/04/02 1.780 50,000 19 46,972.22 1.806 CP NCAT 03/04/02 1.780 50,000 19 46,972.22 1.806 CP W/F 03/04/02 1.740 50,000 19 45,916.67 1.765 CP W/F 03/04/02 1.740 50,000 19 45,916.67 1.765 CP W/F 03/04/02 1.790 50,000 77 191,430.56 1.821 CP W/F 03/04/02 1.790 50,000 77 191,430.56 1.821 CP GMAC 03/04/02 2.880 50,000 111 444,000.00 2.946 CP GMAC 03/04/02 2.880 50,000 111 444,000.00 2.946 CP GECC 03/04/02 1.810 50,000 116 291,611.11 1.845 CP GECC 03/04/02 1.810 50,000 116 291,611.11 1.845 CP AMER EXP 03/04/02 2.200 50,000 136 415,555.56 2.249 CP GECC 03/04/02 2.200 50,000 136 415,555.56 2.249 CP GECC 03/04/02 2.200 50,000 136 415,555.56 2.249 03/04/02 PURCHASES CP CP CP CP CP CP CP CP CP CP CP TREAS TREAS TREAS TREAS TREAS TREAS 03/05/02 REDEMPTIONS NCAT 03/05/02 1.790 50,000 NCAT 03/05/02 1.790 50,000 NCAT 03/05/02 1.790 50,000 NCAT 03/05/02 1.790 50,000 CONAGRA 03/06/02 1.980 25,000 GMAC 03/27/02 2.210 50,000 GMAC 03/27/02 2.210 50,000 GMAC 03/27/02 2.210 50,000 FMCC 04/02/02 2.270 25,000 FMCC 04/02/02 2.270 50,000 HERTZ 04/02/02 2.300 50,000 NOTES 3.000% 02/29/04 3.155 50,000 NOTES 3.000% 02/29/04 3.155 50,000 NOTES 3.000% 02/29/04 3.233 50,000 NOTES 3.000% 02/29/04 3.233 50,000 NOTES 3.000% 02/29/04 3.233 50,000 NOTES 3.000% 02/29/04 3.233 50,000 FHLB 4.000% 02/15/05 4.050 25,000 FHLB 4.000% 02/15/05 4.050 25,000 CP NCAT 03/05/02 1.790 50,000 1 2,486.11 1.814 CP NCAT 03/05/02 1.790 50,000 1 2,486.11 1.814 CP NCAT 03/05/02 1.790 50,000 1 2,486.11 1.814 CP NCAT 03/05/02 1.790 50,000 1 2,486.11 1.814 CP AMER EXP 03/05/02 1.760 50,000 20 48,888.89 1.786 CP AMER EXP 03/05/02 1.760 50,000 20 48,888.89 1.786 CP AMER EXP 03/05/02 2.200 50,000 137 418,611.11 2.249 CP GECC 03/05/02 2.200 50,000 137 418,611.11 2.249 CP GECC 03/05/02 2.200 50,000 137 418,611.11 2.249 03/05/02 PURCHASES CP COUNTRY CP COUNTRY CP COUNTRY FHLB 03/06/02 RRS TREAS NOTES REDEMPTIONS CP COUNTRY CP COUNTRY CP COUNTRY CP CONAGRA CP TEXT FIN CP SRAC PURCHASES cam/ CP GOLDMAN 03/07/02 REDEMPTIONS DISC NOTES FNMA DISC NOTES FNMA DISC NOTES FNMA PURCHASES CP GECC CP GECC CP GECC 03/08/02 RRS TREAS NOTES TREAS NOTES REDEMPTIONS CP GECC CP GECC CP GECC CP HOUSEHOLD CP HOUSEHOLD CP HOUSEHOLD CP SAFEWAY 03/06/02 1.750 1,513 03/06/02 1.750 50,000 03/06/02 1.750 50,000 4.000% 02/15/05 4.050 50,000 2.750% 10/31/03 1.500 50,000 03/06/02 1.750 1,513 1 73.55 1.774 03/06/02 1.750 50,000 1 2,430.56 1.774 03/06/02 1.750 50,000 1 2,430.56 1.774 03/06/02 1.980 25,000 2 2,750.00 2.007 03/06/02 2.130 25,000 13 19,229.17 2.161 03/06/02 2.200 50,000 21 64,166.67 2.233 04/15/02 1.780 50,000 03/07/02 4.020 40,000 315 1,407,000.00 03/07/02 4.020 50,000 315 1,758,750.00 03/07/02 4.020 50,000 315 1,758,750.00 03/08/02 1.770 50,000 03/08/02 1.770 50,000 03/08/02 1.770 50,000 5.250% 05/15/04 1.450 50,000 5.250% 05/15/04 1.450 50,000 4.224 4.224 4.224 03/08/02 1.770 50,000 1 2,458.33 1.794 03/08/02 1.770 50,000 1 2,458.33 1.794 03/08/02 1.770 50,000 1 2,458.33 1.794 03/08/02 1.770 25,000 23 28,270.83 1.796 03/08/02 1.770 50,000 23 56,541.67 1.796 03/08/02 1.770 50,000 23 56,541.67 1.796 03/08/02 2.000 50,000 23 63,888.89 2.030 C. 03/08/02 REDEMPTIONS (continued) CP JP MORGAN 03/08/02 1.750 5,000 30 7,291.67 1.776 CP COUNTRY 03/08/02 1.820 50,000 30 75,833.33 1.848 CP JP MORGAN 03/08/02 1.750 50,000 30 72,916.67 1.776 CP JP MORGAN 03/08/02 1.750 50,000 30 72,916.67 1.776 CP CONAGRA 03/08/02 2.010 20,000 37 41,316.67 2.042 CP GMAC 03/08/02 2.100 50,000 43 125,416.67 2.134 CP NCAT 03/08/02 1.830 50,000 71 180,458.33 1.862 CP GECC 03/08/02 1.980 50,000 113 310,750.00 2.020 CP GECC 03/08/02 1.980 50,000 113 310,750.00 2.020 CP GECC 03/08/02 2.200 50,000 140 427,777.78 2.249 CP GECC 03/08/02 2.200 50,000 140 427,777.78 2.249 DISC NOTES FNMA 03/08/02 3.670 50,000 269 1,371,152.78 3.825 DISC NOTES FNMA 03/08/02 3.670 50,000 269 1,371,152.78 3.825 RRP TREAS NOTES 5.250% 05/15/04 1.250 50,000 30 (55,078.12) -1.267 TREAS NOTES 5.250% 05/15/04 1.250 50,000 30 (55,078.12) -1.267 PURCHASESg// CP JP MORGAN CP JP MORGAN CP JP MORGAN PURCHASES MTN IBM 03/11/02 REDEMPTIONS 05/15/02 1.800 5,000 05/15/02 1.800 50,000 05/15/02 1.800 50,000 4.125% 06/30/05 4.243 50,000 CD MONTREAL 1.790% 03/11/02 1.790 50,000 20 49,722.22 1.814 CD MONTREAL 1.790% 03/11/02 1.790 50,000 20 49,722.22 1.814 CP CITICORP 03/11/02 1.800 50,000 12 30,000.00 1.826 CP CITICORP 03/11/02 1.800 50,000 12 30,000.00 1.826 CP CITICORP 03/11/02 1.800 50,000 12 30,000.00 1.826 CP CITICORP 03/11/02 1.800 50,000 12 30,000.00 1.826 CP FCAR 03/11/02 1.800 5,000 14 3,500.00 1.826 CP FCAR 03/11/02 1.800 50,000 14 35,000.00 1.826 CP GECC 03/11/02 1.780 50,000 17 42,027.78 1.806 CP GECC 03/11/02 1.780 50,000 17 42,027.78 1.806 CP DEERE 03/11/02 1.870 50,000 17 44,152.78 1.897 CP DEERE 03/11/02 1.870 50,000 17 44,152.78 1.897 CP AMER EXP 03/11/02 1.770 50,000 20 49,166.67 1.796 CP AMER EXP 03/11/02 1.770 50,000 20 49,166.67 1.796 CP HOUSEHOLD 03/11/02 1.780 50,000 20 49,444.44 1.806 CP SRAC 03/11/02 2.200 50,000 20 61,111.11 2.233 CP FCAR 03/11/02 1.810 10,000 24 12,066.67 1.837 7 03/11/02 REDEMPTIONS (continued) CP GECC 03/11/02 1.780 50,000 24 59,333.33 1.806 CP GECC 03/11/02 1.780 50,000 24 59,333.33 1.806 CP GECC 03/11/02 1.780 50,000 24 59,333.33 1.806 CP GECC 03/11/02 1.780 50,000 24 59,333.33 1.806 CP FCAR 03/11/02 1.810 50,000 24 60,333.33 1.837 CP GMAC 03/11/02 2.200 50,000 24 73,333.33 2.233 CP W/F 03/11/02 1.790 50,000 84 208,833.33 1.822 CP W/F 03/11/02 1.790 50,000 84 208,833.33 1.822 CP FMCC 03/11/02 2.510 50,000 89 310,263.89 2.560 CP FMCC 03/11/02 2.510 50,000 89 310,263.89 2.560 CP GECC 03/11/02 1.980 50,000 116 319,000.00 2.020 CP GECC 03/11/02 1.980 50,000 116 319,000.00 2.020 CP CAMPBELL 03/11/02 2.010 25,000 123 171,687.50 2.052 MTN GMAC 5.910% 03/11/02 5.880 8,480 1028 1,404,125.46 5.891 PURCHASES CP BEAR 03/18/02 1.790 50,000 CP BEAR 03/18/02 1.790 50,000 CP BEAR 03/18/02 1.790 50,000 CP BEAR 03/18/02 1.790 50,000 CP COUNTRY 03/18/02 1.830 50,000 CP COUNTRY 03/18/02 1.830 50,000 CP COUNTRY 03/18/02 1.830 50,000 CP SRAC 03/18/02 1.800 50,000 CP COUNTRY 03/19/02 1.820 34,010 CP COUNTRY 03/19/02 1.820 50,000 CP SRAC 03/19/02 1.800 50,000 CP GMAC 07/12/02 2.350 50,000 CP GMAC 07/12/02 2.350 50,000 CP GMAC 07/12/02 2.350 50,000 CP GMAC 07/12/02 2.350 50,000 CP GMAC 07/19/02 2.350 20,000 CP GMAC 07/19/02 2.350 50,000 CP GMAC 07/19/02 2.350 50,000 CP GMAC 07/19/02 2.350 50,000 03/12/02 REDEMPTIONS CP DEERE 03/12/02 1.870 20,000 15 15,583.33 1.897 CP W/F 03/12/02 1.750 50,000 18 43,750.00 1.775 CP W/F 03/12/02 1.750 50,000 18 43,750.00 1.775 CP W/F 03/12/02 1.750 50,000 18 43,750.00 1.775 CP W/F 03/12/02 1.750 50,000 18 43,750.00 1.775 CP GECC 03/12/02 1.780 50,000 18 44,500.00 1.806 CP GECC 03/12/02 1.780 50,000 18 44,500.00 1.806 DISC NOTES FNMA 03/12/02 3.980 50,000 322 1,779,944.44 4.184 DISC NOTES FNMA 03/12/02 3.980 50,000 322 1,779,944.44 4.184 f3 03/12/02 PURCHASES CP CONAGRA 03/13/02 1.920 10,000 CP BEAR 03/18/02 1.770 50,000 CP BEAR 03/18/02 1.770 50,000 CP BEAR 03/18/02 1.770 50,000 CP BEAR 03/18/02 1.770 50,000 CP COUNTRY 03/19/02 1.850 50,000 CP COUNTRY 03/19/02 1.850 50,000 CP COUNTRY 03/19/02 1.850 50,000 CP BEAR 04/02/02 1.830 40,000 CP BEAR 04/02/02 1.830 50,000 03/13/02 REDEMPTIONS CP CONAGRA 03/13/02 1.920 10,000 1 533.33 1.946 CP HOUSEHOLD 03/13/02 1.770 50,000 21 51,625.00 1.796 CP HOUSEHOLD 03/13/02 1.770 50,000 21 51,625.00 1.796 CP FCAR 03/13/02 1.780 50,000 76 187,888.89 1.811 CP FCAR 03/13/02 1.780 50,000 76 187,888.89 1.811 PURCHASES CP BEAR 05/13/02 1.850 10,000 CP GEN MILLS 05/13/02 2.150 40,000 CP BEAR 05/13/02 1.850 50,000 CP GMAC 05/13/02 2.230 50,000 03/14/02 REDEMPTIONS DISC NOTES FNMA 03/14/02 2.350 30,000 169 330,958.33 2.409 DISC NOTES FNMA 03/14/02 2.365 22,739 171 255,444.24 2.425 PURCHASES CD CIBC 2.060% 08/28/02 2.060 50,000 CD CIBC 2.060% 08/28/02 2.060 50,000 CD HSBC 2.070% 08/28/02 2.070 50,000 CD HSBC 2.070% 08/28/02 2.070 50,000 CP KODAK 05/01/02 2.500 10,000 CP GEN MILLS 05/10/02 2.150 40,000 CP GMAC 07/29/02 2.200 50,000 03/15/02 NO REDEMPTIONS PURCHASES CP CONAGRA 04/02/02 2.000 50,000 CP SAFEWAY 04/02/02 2.050 50,000 CP GMAC 05/29/02 2.130 50,000 9 03/15/02 PURCHASES (continued) CP GECC 07/26/02 1.980 50,000 CP GECC 07/26/02 1.980 50,000 CP GECC 07/29/02 1.980 50,000 CP GECC 07/29/02 1.980 50,000 CP HOUSEHOLD 08/20/02 2.040 50,000 CP HOUSEHOLD 08/20/02 2.040 50,000 PURCHASES c/ STRIP COUPONS 05/15/04 1.850 50,000 STRIP COUPONS 11/15/04 1.850 50,000 STRIP COUPONS 08/15/05 1.850 13,051 03/18/02 RRS TREAS NOTES 3.000% 02/29/04 1.375 50,000 TREAS NOTES 3.000% 02/29/04 1.375 50,000 TREAS NOTES 3.000% 02/29/04 1.375 50,000 TREAS NOTES 3.000% 02/29/04 1.375 50,000 TREAS NOTES 3.000% 02/29/04 1.380 50,000 TREAS NOTES 3.000% 02/29/04 1.380 50,000 REDEMPTIONS CP BEAR 03/18/02 1.770 50,000 6 14,750.00 1.795 CP BEAR 03/18/02 1.770 50,000 6 14,750.00 1.795 CP BEAR 03/18/02 1.770 50,000 6 14,750.00 1.795 CP BEAR 03/18/02 1.770 50,000 6 14,750.00 1.795 CP BEAR 03/18/02 1.790 50,000 7 17,402.78 1.815 CP BEAR 03/18/02 1.790 50,000 7 17,402.78 1.815 CP BEAR 03/18/02 1.790 50,000 7 17,402.78 1.815 CP BEAR 03/18/02 1.790 50,000 7 17,402.78 1.815 CP SRAC 03/18/02 1.800 50,000 7 17,500.00 1.825 CP COUNTRY 03/18/02 1.830 50,000 7 17,791.67 1.856 CP COUNTRY 03/18/02 1.830 50,000 7 17,791.67 1.856 CP COUNTRY 03/18/02 1.830 50,000 7 17,791.67 1.856 FHLMC DISC NOTES 03/18/02 3.530 47,000 269 1,239,716.39 3.675 FHLMC DISC NOTES 03/18/02 3.530 50,000 269 1,318,847.22 3.675 FHLMC DISC NOTES 03/18/02 3.530 50,000 269 1,318,847.22 3.675 FHLMC DISC NOTES 03/18/02 3.530 50,000 269 1,318,847.22 3.675 SALES c/ STRIP COUPONS 0515/04 1.850 50,000 3 6,957.70 1.875 STRIP COUPONS 11/15/04 1.850 50,000 3 6,769.00 1.875 STRIP COUPONS 08/15/05 1.850 13,051 3 1,689.97 1.875 10 03/18/02 PURCHASES cl/ CD BNPARIS 1.810% 04/17/02 1.810 50,000 CD BNPARIS 1.810% 04/17/02 1.810 50,000 CP GOLDMAN 04/17/02 1.800 50,000 CP GOLDMAN 04/17/02 1.800 50,000 CP GOLDMAN 04/17/02 1.800 50,000 CP GOLDMAN 04/17/02 1.800 50,000 PURCHASES CP W/F 03/27/02 1.750 20,000 CP NCAT 03/27/02 1.780 40,000 CP W/F 03/27/02 1.750 50,000 CP W/F 03/27/02 1.750 50,000 CP GECC 03/27/02 1.770 50,000 CP GECC 03/27/02 1.770 50,000 CP GECC 03/27/02 1.770 50,000 CP GECC 03/27/02 1.770 50,000 CP NCAT 03/27/02 1.780 50,000 CP NCAT 03/27/02 1.780 50,000 CP COUNTRY 03/27/02 1.850 50,000 CP COUNTRY 03/27/02 1.850 50,000 CP COUNTRY 03/27/02 1.850 50,000 CP COUNTRY 03/27/02 1.850 50,000 CP AMER EXP 03/27/02 1.770 50,000 CP AMER EXP 03/27/02 1.770 50,000 CP AMER EXP 03/27/02 1.770 50,000 CP AMER EXP 03/27/02 1.770 50,000 CP BEAR 04/02/02 1.830 50,000 CP BEAR 04/02/02 1.830 50,000 CP BEAR 04/02/02 1.830 50,000 CP BEAR 04/02/02 1.830 50,000 CP BEAR 04/03/02 1.830 50,000 CP BEAR 04/03/02 1.830 50,000 CP SRAC 04/09/02 2.150 40,000 CP GOLDMAN 04/17/02 1.800 50,000 CP GOLDMAN 04/17/02 1.800 50,000 CP GOLDMAN 04/17/02 1.800 50,000 CP GOLDMAN 04/17/02 1.800 50,000 03/19/02 REDEMPTIONS CD TORONTO 1.780% 03/19/02 1.770 50,000 28 68,833.87 1.794 CD TORONTO 1.780% 03/19/02 1.770 50,000 28 68,833.87 1.794 CP COUNTRY 03/19/02 1.850 50,000 7 17,986.11 1.876 CP COUNTRY 03/19/02 1.850 50,000 7 17,986.11 1.876 CP COUNTRY 03/19/02 1.850 50,000 7 17,986.11 1.876 CP COUNTRY 03/19/02 1.820 34,010 8 13,755.16 1.846 CP COUNTRY 03/19/02 1.820 50,000 8 20,222.22 1.846 11 03/19/02 REDEMPTIONS (continued) CP SRAC 03/19/02 1.800 50,000 8 20,000.00 1.825 MTN FR FMCC 5.150% 03/19/02 5.150 50,000 1096 8,071,075.27 5.375 PURCHASES CD CD CD CD CD MTN 03/20/02 REDEMPTIONS CD CD CP CP CP CP CP CP CP CP CP PURCHASES CD CD CD CD CD CD CP CP CP CP CP CP CP CP CP 03/21/02 REDEMPTIONS DISC NOTES DISC NOTES HSBC 1.720% 03/29/02 1.720 50,000 HSBC 1.720% 03/29/02 1.720 50,000 W/F 1.740% 03/29/02 1.750 50,000 W/F 1.740% 03/29/02 1.750 50,000 W/F 1.740% 03/29/02 1.750 50,000 GECC 7.375% 09/15/04 4.310 23,850 W/F 1.780% 03/20/02 1.780 50,000 29 71,694.44 1.804 W/F 1.780% 03/20/02 1.780 50,000 29 71,694.44 1.804 KODAK 03/20/02 2.500 40,000 33 91,666.67 2.540 SALOMON 03/20/02 1.780 50,000 41 101,361.11 1.808 SALOMON 03/20/02 1.780 50,000 41 101,361.11 1.808 SALOMON 03/20/02 1.780 50,000 41 101,361.11 1.808 SALOMON 03/20/02 1.780 50,000 41 101,361.11 1.808 GECC 03/20/02 1.680 50,000 57 133,000.00 1.707 GECC 03/20/02 1.680 50,000 57 133,000.00 1.707 GECC 03/20/02 2.220 25,000 155 238,958.33 2.272 GECC 03/20/02 2.220 50,000 155 477,916.67 2.272 CIBC CIBC HSBC HSBC HSBC HSBC COUNTRY COUNTRY AMER EXP DEERE DEERE DEERE FMCC KODAK GEN MILLS FNMA FNMA 1.680% 03/29/02 1.680 1.680% 03/29/02 1.680 1.720% 03/29/02 1.720 1.720% 03/29/02 1.720 1.720% 03/29/02 1.720 1.720% 03/29/02 1.720 03/28/02 1.820 03/28/02 1.820 03/29/02 1.650 03/29/02 1.800 03/29/02 1.800 03/29/02 1.800 03/29/02 1.680 05/06/02 2.500 06/03/02 2.200 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 38,000 03/21/02 2.360 50,000 03/21/02 2.360 50,000 12 178 583,444.44 2.421 178 583,444.44 2.421 03/21/02 REDEMPTIONS (continued) DISC NOTES FNMA 03/21/02 2.360 50,000 178 583,444.44 2.421 DISC NOTES FNMA 03/21/02 2.360 50,000 178 583,444.44 2.421 DISC NOTES FNMA 03/21/02 2.300 13,861 181 160,287.07 2.359 DISC NOTES FNMA 03/21/02 2.290 24,000 181 276,326.67 2.348 DISC NOTES FNMA 03/21/02 2.300 50,000 181 578,194.45 2.359 DISC NOTES FNMA 03/21/02 2.300 4,000 182 46,511.11 2.359 DISC NOTES FNMA 03/21/02 2.300 50,000 182 581,388.89 2.359 DISC NOTES FNMA 03/21/02 2.300 50,000 182 581,388.89 2.359 DISC NOTES FNMA 03/21/02 2.300 50,000 182 581,388.89 2.359 DISC NOTES FNMA 03/21/02 2.300 50,000 182 581,388.89 2.359 DISC NOTES FNMA 03/21/02 2.300 50,000 182 581,388.89 2.359 PURCHASES CD BNPARIS 1.925% 06/28/02 1.920 50,000 CD HYPO 1.920% 06/28/02 1.920 50,000 CD HYPO 1.920% 06/28/02 1.920 50,000 CP NCAT 03/22/02 1.750 50,000 CP NCAT 03/22/02 1.750 50,000 CP SALOMON 04/04/02 1.830 50,000 CP SALOMON 04/04/02 1.830 50,000 CP SALOMON 04/09/02 1.820 50,000 CP SALOMON 04/09/02 1.820 50,000 CP SALOMON 04/12/02 1.810 50,000 CP SALOMON 04/12/02 1.810 50,000 CP BEAR 07/01/02 1.910 50,000 CP BEAR 07/01/02 1.910 50,000 CP FCAR 07/10/02 2.000 50,000 CP FCAR 07/10/02 2.000 50,000 CP AMER EXP 07/29/02 1.980 50,000 CP AMER EXP 07/29/02 1.980 50,000 FFCB 4.375% 04/15/05 4.600 50,000 03/22/02 REDEMPTIONS CP NCAT 03/22/02 1.750 50,000 1 2,430.56 1.774 CP NCAT 03/22/02 1.750 50,000 1 2,430.56 1.774 DISC NOTES FHLMC 03/22/02 2.360 50,000 177 580,166.67 2.420 DISC NOTES FHLB 03/22/02 2.360 17,641 179 207,007.33 2.421 DISC NOTES FHLB 03/22/02 2.360 40,000 179 469,377.78 2.421 DISC NOTES FHLB 03/22/02 2.360 50,000 179 586,722.22 2.421 DISC NOTES FHLB 03/22/02 2.360 50,000 179 586,722.22 2.421 DISC NOTES FHLB 03/22/02 2.360 50,000 179 586,722.22 2.421 DISC NOTES FHLB 03/22/02 2.360 50,000 179 586,722.22 2.421 DISC NOTES FHLB 03/22/02 2.360 50,000 179 586,722.22 2.421 DISC NOTES FHLMC 03/22/02 3.530 50,000 275 1,348,263.89 3.678 DISC NOTES FHLMC 03/22/02 3.530 50,000 275 1,348,263.89 3.678 DISC NOTES FNMA 03/22/02 4.020 10,000 330 368,500.00 4.231 13 03/22/02 REDEMPTIONS (continued) DISC NOTES FNMA DISC NOTES FNMA DISC NOTES FNMA DISC NOTES FNMA PURCHASES CP COUNTRY CP COUNTRY 03/25102. RRS TREAS NOTES REDEMPTIONS DISC NOTES FHLB DISC NOTES FHLB MTN GMAC PURCHASES cL/ CP SALOMON PURCHASES CD RABO CD RABO CP CONAGRA CP GECC CP GECC CP GECC CP GECC CP GECC CP GECC CP FCAR CP FCAR CP FCAR CP FCAR CP AMER EXP CP AMER EXP CP NCAT CP NCAT CP NCAT CP NCAT CP U/B CALIF CP AMER EXP CP AMER EXP 03/22/02 4.020 50,000 330 1,842,500.00 4.231 03/22/02 4.020 50,000 330 1,842,500.00 4.231 03/22/02 3.980 50,000 332 1,835,222.22 4.189 03/22/02 3.980 50,000 332 1,835,222.22 4.189 03/28/02 1.850 50,000 03/28/02 1.850 50,000 3.000% 02/29/04 1.300 50,000 03/25/02 2.300 50,000 186 594,166.67 03/25/02 2.300 30,000 186 356,500.00 7.750% 03/25/02 6.500 10,000 465 840,677.77 04/29/02 1.810 50,000 2.130% 08/28/02 2.120 30,000 2.130% 08/28/02 2.120 50,000 04/26/02 2.000 25,000 07/26/02 2.030 50,000 07/26/02 2.030 50,000 07/29/02 2.030 50,000 07/29/02 2.030 50,000 07/29/02 2.030 50,000 07/29/02 2.030 50,000 08/20/02 2.050 50,000 08/20/02 2.050 50,000 08/20/02 2.050 50,000 08/20/02 2.050 50,000 08/28/02 2.050 50,000 08/28/02 2.050 50,000 08/28/02 2.060 50,000 08/28/02 2.060 50,000 08/28/02 2.060 50,000 08/28/02 2.060 50,000 08/28/02 2.100 50,000 08/29/02 2.050 50,000 08/29/02 2.050 50,000 14 2.359 2.359 6.501 03/25/02 PURCHASES (continued) CP AMER EXP 08/30/02 2.050 50,000 CP AMER EXP 08/30/02 2.500 50,000 03/26/02 NO SALES PURCHASES CP NCAT 05/29/02 1.860 50,000 CP NCAT 05/29/02 1.860 50,000 03/27/02 REDEMPTIONS BN US BANK 2.130% 03/27/02 2.130 50,000 152 449,666.67 2.159 BN US BANK 2.130% 03/27/02 2.130 50,000 152 449,666.67 2.159 BN US BANK 2.260% 03/27/02 2.260 40,000 161 404,288.89 2.291 BN US BANK 2.260% 03/27/02 2.260 50,000 161 505,361.11 2.291 CD BAYER LNDS 1.770% 03/27/02 1.770 50,000 33 81,125.00 1.794 CD BAYER LNDS 1.770% 03/27/02 1.770 50,000 33 81,125.00 1.794 CP W/F 03/27/02 1.750 20,000 9 8,750.00 1.775 CP NCAT 03/27/02 1.780 40,000 9 17,800.00 1.805 CP W/F 03/27/02 1.750 50,000 9 21,875.00 1.775 CP W/F 03/27/02 1.750 50,000 9 21,875.00 1.775 CP AMER EXP 03/27/02 1.750 50,000 9 21,875.00 1.775 CP AMER EXP 03/27/02 1.750 50,000 9 21,875.00 1.775 CP AMER EXP 03/27/02 1.750 50,000 9 21,875.00 1.775 CP AMER EXP 03/27/02 1.750 50,000 9 21,875.00 1.775 CP GECC 03/27/02 1.770 50,000 9 22,125.00 1.795 CP GECC 03/27/02 1.770 50,000 9 22,125.00 1.795 CP GECC 03/27/02 1.770 50,000 9 22,125.00 1.795 CP GECC 03/27/02 1.770 50,000 9 22,125.00 1.795 CP NCAT 03/27/02 1.780 50,000 9 22,250.00 1.805 CP NCAT 03/27/02 1.780 50,000 9 22,250.00 1.805 CP COUNTRY 03/27/02 1.850 50,000 9 23,125.00 1.876 CP COUNTRY 03/27/02 1.850 50,000 9 23,125.00 1.876 CP COUNTRY 03/27/02 1.850 50,000 9 23,125.00 1.876 CP COUNTRY 03/27/02 1.850 50,000 9 23,125.00 1.876 CP GMAC 03/27/02 2.210 50,000 23 70,597.22 2.243 CP GMAC 03/27/02 2.210 50,000 23 70,597.22 2.243 CP GMAC 03/27/02 2.210 50,000 23 70,597.22 2.243 CP DOW 03/27/02 1.830 20,000 33 33,550.00 1.858 CP SRAC 03/27/02 2.230 50,000 35 108,402.78 2.265 DISC NOTES FHLB 03/27/02 2.320 46,307 177 528,208.51 2.379 DISC NOTES FHLB 03/27/02 2.320 50,000 177 570,333.33 2.379 DISC NOTES FHLB 03/27/02 2.320 50,000 177 570,333.33 2.379 DISC NOTES FHLB 03/27/02 2.320 50,000 177 570,333.33 2.379 DISC NOTES FHLB 03/27/02 2.325 45,445 181 531,233.11 2.385 DISC NOTES FHLB 03/27/02 2.325 50,000 181 584,479.17 2.385 DISC NOTES FHLB 03/27/02 2.350 25,000 182 297,013.89 2.411 15 03/27/02 REDEMPTIONS (continued) DISC NOTES FHLB 03/27/02 2.350 50,000 182 594,027.78 2.411 DISC NOTES FHLB 03/27/02 2.350 50,000 182 594,027.78 2.411 DISC NOTES FHLB 03/27/02 2.350 50,000 182 594,027.78 2.411 DISC NOTES FHLB 03/27/02 2.350 50,000 182 594,027.78 2.411 DISC NOTES FHLMC 03/27/02 2.310 50,000 177 567,875.00 2.368 DISC NOTES FHLMC 03/27/02 2.310 50,000 177 567,875.00 2.368 NO PURCHASES 03/28/02 REDEMPTIONS CID COUNTRY 03/28/02 1.850 50,000 6 15,416.67 1.876 CP COUNTRY 03/28/02 1.850 50,000 6 15,416.67 1.876 CID COUNTRY 03/28/02 1.820 50,000 8 20,222.22 1.846 CID COUNTRY 03/28/02 1.820 50,000 8 20,222.22 1.846 DISC NOTES FNMA 03/28/02 2.340 21,817 178 252,422.69 2.400 DISC NOTES FNMA 03/28/02 2.330 50,000 178 576,027.78 2.389 DISC NOTES FHLMC 03/28/02 2.350 50,000 183 597,291.67 2.411 DISC NOTES FHLMC 03/28/02 2.360 50,000 183 599,833.33 2.421 DISC NOTES FHLMC 03/28/02 3.550 50,000 283 1,395,347.22 3.702 DISC NOTES FHLMC 03/28/02 3.990 20,000 338 749,233.34 4.202 DISC NOTES FHLMC 03/28/02 3.990 50,000 338 1,873,083.33 4.202 DISC NOTES FNMA 03/28/02 3.980 50,000 338 1,868,388.89 4.191 DISC NOTES FNMA 03/28/02 3.980 50,000 338 1,868,388.89 4.191 DISC NOTES FNMA 03/28/02 3.980 50,000 338 1,868,388.89 4.191 DISC NOTES FNMA 03/28/02 3.980 50,000 338 1,868,388.89 4.191 TREAS BILLS 03/28/02 2.265 50,000 181 569,395.83 2.322 TREAS BILLS 03/28/02 2.265 50,000 181 569,395.83 2.322 TREAS BILLS 03/28/02 2.265 50,000 181 569,395.83 2.322 TREAS BILLS 03/28/02 2.265 50,000 181 569,395.83 2.322 TREAS BILLS 03/28/02 2.248 50,000 182 568,118.00 2.304 TREAS BILLS 03/28/02 2.248 50,000 182 568,118.00 2.304 PURCHASES CD MONTREAL 1.810% 04/04/02 1.810 50,000 CD MONTREAL 1.810% 04/04/02 1.810 50,000 CD MONTREAL 1.810% 04/04/02 1.810 50,000 CD MONTREAL 1.810% 04/04/02 1.810 50,000 CD HELABA 1.760% 04/12/02 1.760 20,000 CD HELABA 1.760% 04/12/02 1.760 50,000 CP NCAT 04/03/02 1.780 40,000 CID GOLDMAN 04/03/02 1.750 50,000 CID GOLDMAN 04/03/02 1.750 50,000 CID GOLDMAN 04/03/02 1.750 50,000 CID GOLDMAN 04/03/02 1.750 50,000 CID GECC 04/04/02 1.800 50,000 16 03/28/02 PURCHASES (continued) CID GECC 04/04/02 1.800 50,000 CP GECC 04/04/02 1.800 50,000 CID GECC 04/04/02 1.800 50,000 CID GECC 04/04/02 1.800 50,000 CID GECC 04/04/02 1.800 50,000 CID GECC 04/05/02 1.800 50,000 CID GECC 04/05/02 1.800 50,000 CID GECC 04/05/02 1.800 50,000 CID GECC 04/05/02 1.800 50,000 CID GECC 04/05/02 1.800 50,000 CID GECC 04/05/02 1.800 50,000 CID CONAGRA 04/09/02 2.000 25,000 DISC NOTES FHLMC 04/02/02 1.780 15,000 DISC NOTES FHLMC 04/02/02 1.780 50,000 DISC NOTES FHLMC 04/02/02 1.780 50,000 03/29/02 REDEMPTIONS BN US BANK 2.130% 03/29/02 2.130 50,000 154 455,583.33 2.159 BN US BANK 2.130% 03/29/02 2.130 50,000 154 455,583.33 2.159 BN US BANK 2.260% 03/29/02 2.260 50,000 163 511,638.89 2.291 BN US BANK 2.260% 03/29/02 2.260 50,000 163 511,638.89 2.291 CD CIBC 1.680% 03/29/02 1.680 50,000 9 21,000.00 1.703 CD CIBC 1.680% 03/29/02 1.680 50,000 9 21,000.00 1.703 CD HSBC 1.720% 03/29/02 1.720 50,000 9 21,500.00 1.743 CD HSBC 1.720% 03/29/02 1.720 50,000 9 21,500.00 1.743 CD HSBC 1.720% 03/29/02 1.720 50,000 9 21,500.00 1.743 CD HSBC 1.720% 03/29/02 1.720 50,000 9 21,500.00 1.743 CD HSBC 1.720% 03/29/02 1.720 50,000 10 23,888.89 1.743 CD HSBC 1.720% 03/29/02 1.720 50,000 10 23,888.89 1.743 CD W/F 1.740% 03/29/02 1.750 50,000 10 24,305.49 1.774 CD W/F 1.740% 03/29/02 1.750 50,000 10 24,305.49 1.774 CD W/F 1.740% 03/29/02 1.750 50,000 10 24,305.49 1.774 CD U/B CALIF 2.130% 03/29/02 2.130 25,000 154 227,791.67 2.159 CD U/B CALIF 2.130% 03/29/02 2.130 50,000 154 455,583.33 2.159 CD HYPO 2.250% 03/29/02 2.250 50,000 163 509,375.00 2.281 CD HYPO 2.250% 03/29/02 2.250 50,000 163 509,375.00 2.281 CD U/B CALIF 2.260% 03/29/02 2.260 50,000 163 511,638.89 2.291 CD U/B CALIF 2.260% 03/29/02 2.260 50,000 163 511,638.89 2.291 CD HSBC 2.295% 03/29/02 2.295 50,000 176 561,000.00 2.326 CD HSBC 2.295% 03/29/02 2.295 50,000 176 561,000.00 2.326 CID AMER EXP 03/29/02 1.650 50,000 9 20,625.00 1.673 CID FMCC 03/29/02 1.680 50,000 9 21,000.00 1.704 CID DEERE 03/29/02 1.800 50,000 9 22,500.00 1.825 CID DEERE 03/29/02 1.800 50,000 9 22,500.00 1.825 CID DEERE 03/29/02 1.800 50,000 9 22,500.00 1.825 CID GECC 03/29/02 1.900 50,000 135 356,250.00 1.940 17 03/29/02 REDEMPTIONS (continued) CID GECC 03/29/02 1.900 50,000 135 356,250.00 1.940 NO PURCHASES 18 a/ The abbreviations indicate the type of security purchased or sold; I.e., (U.S.) Bills, Bonds, Notes, Debentures, Discount Notes and Participation Certificates: Federal National Mortgage Association (FNMA), Farmers Home Administration Notes (FHA), Student Loan Marketing Association (SLMA), Small Business Association (SBA), Negotiable Certificates of Deposit (CD), Negotiable Certificates of Deposit Floating Rate (CD FR), Export Import Notes (EXIM), Bankers Acceptances (BA), Commercial Paper (CP), Government National Mortgage Association (GNMA), Federal Home Loan Bank Notes (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. f/ Repurchase Agreement against Reverse Repurchase Agreement. 1 Outright purchase against Reverse Repurchase Agreement. h/ Security "SWAP" transactions. 1 Buy back agreement. RRS Reverse Repurchase Agreement. RRP Termination of Reverse Repurchase Agreement. 19 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE ALHAMBRA Grand National Bank 11/27/01 2.060 3,000,000.00 05/17/02 Grand National Bank 05/17/01 3.700 3,000,000.00 05/17/02 Grand National Bank 07/13/01 3.520 3,095,000.00 07/12/02 Grand National Bank 01/07/02 1.840 1,000,000.00 08/13/02 Grand National Bank 01/09/02 1.840 2,000,000.00 08/13/02 Omni Bank 03/19/02 1.820 700,000.00 04/23/02 Omni Bank 10/25/01 2.190 1,300,000.00 04/23/02 Omni Bank 11/21/01 2.040 2,000,000.00 05/20/02 Omni Bank 11/30/01 1.870 3,000,000.00 06/03/02 Omni Bank 02/27/02 1.920 3,000,000.00 08/27/02 ARROYO GRANDE Mid -State Bank 10/15/01 2.250 5,000,000.00 04/15/02 Mid -State Bank 11/20/01 2.040 5,000,000.00 05/17/02 Mid -State Bank 12/18/01 1.870 5,000,000.00 06/14/02 Mid -State Bank 01/16/02 1.660 5,000,000.00 07/16/02 Mid -State Bank 02/14/02 1.880 5,000,000.00 08/13/02 Mid -State Bank 03/13/02 2.050 5,000,000.00 09/11/02 BEVERLY HILLS City National Bank 04/16/01 4.170 25,000,000.00 04/16/02 City National Bank 12/03/01 1.840 25,000,000.00 06/03/02 City National Bank 02/15/02 1.900 25,000,000.00 08/16/02 City National Bank 03/07/02 1.940 40,000,000.00 09/09/02 BREA Jackson Federal Bank 11/14/01 1.900 10,000,000.00 05/13/02 Jackson Federal Bank 01/22/02 1.740 10,000,000.00 07/22/02 Pacific Western National Bank 11/20/01 2.060 1,000,000.00 05/20/02 CALABASAS First Bank of Beverly Hills FSB 02/27/02 1.940 10,000,000.00 08/28/02 First Bank of Beverly Hills FSB 03/20/02 2.120 10,000,000.00 09/18/02 CAMARILLO First California Bank 11/02/01 1.980 2,000,000.00 04/30/02 First California Bank 01/29/02 1.860 2,000,000.00 07/29/02 20 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE CAMARILLO (continued First California Bank 03/29/02 CAMERON PARK Western Sierra National Bank 01/16/02 Western Sierra National Bank 01/24/02 Western Sierra National Bank 02/06/02 CHICO North State National Bank 11/28/01 North State National Bank 12/07/01 North State National Bank 01/25/02 Tri Counties Bank 03/05/02 Tri Counties Bank 03/18/02 CHULA VISTA North Island Federal Credit Union 01/18/02 North Island Federal Credit Union 02/27/02 CITY OF INDUSTRY EverTrust Bank 12/12/01 EverTrust Bank 01/25/02 CONCORD CA State 9 Credit Union 02/19/02 DUARTE Western State Bank 10/01/01 DUBLIN Operating Engineers FCU 10/11/01 Operating Engineers FCU 12/11/01 Operating Engineers FCU 02/04/02 21 2.150 3,000,000.00 09/25/02 1.680 3,000,000.00 07/16/02 1.810 4,000,000.00 07/16/02 1.890 6,000,000.00 08/15/02 2.080 1,500,000.00 05/17/02 1.890 1,000,000.00 06/05/02 1.830 5,000,000.00 07/26/02 1.820 10,000,000.00 06/04/02 1.890 10,000,000.00 06/19/02 1.750 20,000,000.00 07/17/02 1.930 5,000,000.00 08/27/02 1.770 6,000,000.00 06/11/02 1.790 6,000,000.00 07/29/02 1.900 10,000,000.00 08/20/02 2.420 2,000,000.00 04/02/02 2.230 5,000,000.00 04/09/02 1.790 10,000,000.00 06/12/02 1.910 5,000,000.00 08/13/02 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE EL CENTRO Valley Independent Bank 10/31/01 2.040 20,000,000.00 04/30/02 Valley Independent Bank 02/14/02 1.800 7,500,000.00 05/15/02 EL SEGUNDO Hawthorne Savings FSB 01/04/02 1.760 30,000,000.00 04/04/02 Hawthorne Savings FSB 01/04/02 1.870 30,000,000.00 07/09/02 Xerox Federal Credit Union 02/14/02 1.890 20,000,000.00 08/16/02 Xerox Federal Credit Union 03/04/02 1.910 7,000,000.00 09/06/02 FRESNO United Security Bank 01/10/02 1.730 5,000,000.00 04/10/02 United Security Bank 11/15/01 1.910 10,000,000.00 05/14/02 United Security Bank 02/06/02 1.880 15,000,000.00 08/05/02 FULLERTON Fullerton Community Bank 01/25/02 1.860 8,000,000.00 07/26/02 Fullerton Community Bank 11/19/01 2.040 9,000,000.00 05/17/02 GLENDALE Verdugo Banking Company 01/08/02 1.740 5,000,000.00 04/02/02 Verdugo Banking Company 01/08/02 1.840 5,000,000.00 07/02/02 GRANADA HILLS Bank of Granada Hills 01/23/02 1.750 3,000,000.00 04/23/02 First State Bank of California 03/18/02 2.110 2,000,000.00 09/18/02 HUNTINGTON BEACH First Bank and Trust 10/29/01 2.150 3,000,000.00 04/26/02 First Bank and Trust 02/26/02 1.910 2,000,000.00 08/26/02 First Bank and Trust 03/11/02 2.030 12,000,000.00 09/09/02 IRVINE Commercial Capital Bank 01/07/02 1.880 6,000,000.00 07/01/02 Commercial Capital Bank 02/26/02 1.950 14,000,000.00 08/26/02 22 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE LA JOLLA Silvergate Bank 02/04/02 1.900 5,000,000.00 08/02/02 Silvergate Bank 03/14/02 2.070 1,500,000.00 09/11/02 Silvergate Bank 03/13/02 2.090 3,500,000.00 09/11/02 LAKEPORT Lake Community Bank 12/28/01 1.870 2,000,000.00 06/26/02 LODI Farmers & Merchant Bk Cen CA 01/11/02 1.790 10,000,000.00 07/10/02 LOS ANGELES Broadway Federal Bank 01/08/02 1.850 2,500,000.00 07/08/02 Broadway Federal Bank 03/11/02 2.060 3,000,000.00 09/09/02 California Center Bank 01/03/02 1.730 10,000,000.00 04/03/02 California Chohung Bank 01/07/02 1.740 1,500,000.00 04/02/02 California Chohung Bank 01/14/02 1.710 1,000,000.00 04/15/02 California Chohung Bank 02/19/02 1.870 4,000,000.00 08/19/02 California Chohung Bank 03/28/02 2.140 4,000,000.00 10/02/02 Cathay Bank 10/10/01 2.230 19,000,000.00 04/08/02 Cathay Bank 03/04/02 1.810 30,000,000.00 06/06/02 Cathay Bank 03/25/02 2.170 19,000,000.00 09/25/02 Cedars Bank 10/04/01 2.260 5,000,000.00 04/02/02 Cedars Bank 12/21/01 1.840 2,000,000.00 06/19/02 Cedars Bank 01/08/02 1.850 2,500,000.00 07/11/02 Cedars Bank 03/06/02 1.980 2,000,000.00 09/06/02 Cedars Bank 03/06/02 1.980 2,500,000.00 09/06/02 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 02/20/02 1.770 15,000,000.00 05/24/02 General Bank 12/10/01 1.830 25,000,000.00 06/07/02 General Bank 01/18/02 1.730 15,000,000.00 07/17/02 General Bank 01/28/02 1.860 20,000,000.00 08/01/02 General Bank 02/08/02 1.870 15,000,000.00 08/13/02 General Bank 02/20/02 1.870 15,000,000.00 08/22/02 General Bank 03/07/02 1.940 15,000,000.00 09/04/02 General Bank 03/18/02 2.100 20,000,000.00 09/18/02 Hanmi Bank 01/14/02 1.700 25,000,000.00 04/16/02 Hanmi Bank 01/31/02 1.740 20,000,000.00 05/02/02 Hanmi Bank 02/26/02 1.790 25,000,000.00 05/28/02 23 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE LOS ANGELES (continued) Hanmi Bank 03/21/02 1.850 25,000,000.00 06/20/02 Manufacturers Bank 01/31/02 1.760 10,000,000.00 05/01/02 Manufacturers Bank 03/11/02 2.050 30,000,000.00 09/09/02 Manufacturers Bank 03/21/02 2.110 20,000,000.00 09/20/02 Marathon National Bank 02/04/02 1.930 2,000,000.00 08/05/02 Mellon First Business Bank 01/04/02 1.740 25,000,000.00 04/04/02 Mellon First Business Bank 02/01/02 1.760 25,000,000.00 05/02/02 Mellon First Business Bank 03/20/02 1.870 25,000,000.00 06/19/02 Mellon First Business Bank 03/20/02 2.080 25,000,000.00 09/18/02 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 Pacific Union Bank 01/03/02 1.860 10,000,000.00 07/02/02 Pacific Union Bank 03/05/02 1.920 20,000,000.00 09/04/02 Preferred Bank 02/08/02 1.790 4,000,000.00 05/09/02 Preferred Bank 02/26/02 1.820 7,000,000.00 05/28/02 Preferred Bank 03/08/02 1.840 9,000,000.00 06/10/02 Preferred Bank 07/16/01 3.550 6,000,000.00 07/16/02 Preferred Bank 03/18/02 2.120 9,000,000.00 09/18/02 Sae Han Bank 01/15/02 1.620 6,000,000.00 07/15/02 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 State Bank of India (Calif) 02/25/02 1.890 2,000,000.00 08/27/02 Western Federal Credit Union 10/24/01 2.190 25,000,000.00 04/22/02 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 Wilshire State Bank 02/05/02 1.880 4,000,000.00 08/06/02 Wilshire State Bank 02/27/02 1.920 4,000,000.00 08/26/02 MANTECA Delta National Bank 01/04/02 1.770 1,000,000.00 04/04/02 Delta National Bank 01/18/02 1.660 1,000,000.00 04/10/02 Delta National Bank 01/10/02 1.740 1,000,000.00 04/10/02 MERCED 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 County Bank 01/16/02 1.680 5,000,000.00 07/16/02 County Bank 02/26/02 1.930 5,000,000.00 08/26/02 24 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE MONTEREY PARK Trust Bank FSB 01/02/02 1.760 3,000,000.00 04/02/02 Trust Bank FSB 01/02/02 1.860 3,000,000.00 07/01/02 NORTH HIGHLANDS Safe Credit Union 01/14/02 1.750 5,000,000.00 07/15/02 Safe Credit Union 02/06/02 1.870 20,000,000.00 08/15/02 OAKDALE 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 Oak Valley Community Bank 03/22/02 2.640 2,000,000.00 03/20/03 OAKLAND 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 Metropolitian Bank 03/25/02 2.180 1,000,000.00 09/25/02 ONTARIO 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 Citizens Business Bank 03/26/02 2.150 30,000,000.00 09/25/02 PALO ALTO Bank of Petaluma 02/25/02 1.910 3,500,000.00 08/23/02 Bank of Petaluma 03/13/02 2.070 12,000,000.00 09/11/02 Bank of Santa Clara 02/25/02 1.910 20,000,000.00 08/23/02 Bay Area Bank 10/30/01 2.090 5,000,000.00 04/27/02 Bay Area Bank 01/14/02 1.760 5,000,000.00 07/15/02 Bay Bank of Commerce 10/30/01 2.110 5,000,000.00 04/29/02 Coast Commercial Bank 01/14/02 1.780 5,000,000.00 07/15/02 Coast Commercial Bank 02/25/02 1.910 20,000,000.00 08/23/02 Cupertino National Bank 10/30/01 2.090 35,000,000.00 04/29/02 Cupertino National Bank 01/14/02 1.760 10,000,000.00 07/15/02 Cupertino National Bank 02/25/02 1.890 20,000,000.00 08/23/02 Cupertino National Bank 03/13/02 2.050 10,000,000.00 09/11/02 25 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE PALO ALTO (continued) Golden Gate Bank 02/25/02 1.910 9,000,000.00 08/23/02 Mid -Peninsula Bank 10/30/01 2.100 35,000,000.00 04/29/02 Mid -Peninsula Bank 02/25/02 1.900 5,000,000.00 08/23/02 Mid -Peninsula Bank 03/13/02 2.060 10,000,000.00 09/11/02 Mt. Diablo National Bank 03/13/02 2.080 10,000,000.00 09/11/02 Peninsula Bank of Commerce 02/25/02 1.890 15,000,000.00 08/23/02 PALOS VERDES ESTATES Malaga Bank 02/22/02 1.910 2,000,000.00 08/22/02 Malaga Bank 03/15/02 2.060 2,000,000.00 09/12/02 PASADENA Community Bank 04/25/01 3.770 5,000,000.00 04/25/02 Community Bank 06/22/01 3.400 20,000,000.00 06/21/02 Community Bank 01/28/02 1.860 10,000,000.00 07/11/02 Community Bank 07/11/01 3.520 20,000,000.00 07/11/02 Community Bank 02/08/02 1.850 15,000,000.00 08/09/02 Wescom Credit Union 10/09/01 2.270 25,000,000.00 04/08/02 Wescom Credit Union 11/13/01 1.840 10,000,000.00 05/13/02 Wescom Credit Union 12/14/01 1.830 15,000,000.00 06/12/02 Wescom Credit Union 01/28/02 1.890 15,000,000.00 07/26/02 PLACERVILLE El Dorado Savings Bank 04/13/01 4.100 5,000,000.00 04/12/02 El Dorado Savings Bank 04/13/01 4.100 5,000,000.00 04/12/02 El Dorado Savings Bank 05/02/01 3.910 5,000,000.00 05/02/02 El Dorado Savings Bank 06/18/01 3.460 5,000,000.00 06/10/02 El Dorado Savings Bank 06/05/01 3.640 5,000,000.00 06/10/02 El Dorado Savings Bank 12/13/01 1.740 10,000,000.00 06/10/02 El Dorado Savings Bank 02/08/02 2.250 5,000,000.00 02/07/03 El Dorado Savings Bank 03/07/02 2.390 5,000,000.00 03/07/03 El Dorado Savings Bank 03/22/02 2.640 5,000,000.00 03/20/03 PLEASANTON Valley Community Bank 03/14/02 2.080 5,000,000.00 09/12/02 26 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE. POMONA 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 PFF Bank and Trust 02/28/02 1.890 8,000,000.00 08/30/02 PORTERVILLE Bank of the Sierra 01/23/02 1.750 10,000,000.00 04/22/02 RANCHO SANTA FE La Jolla Bank, FSB 11/20/01 2.060 15,000,000.00 05/23/02 La Jolla Bank, FSB 02/01/02 1.880 10,000,000.00 08/06/02 La Jolla Bank, FSB 08/06/01 3.500 15,000,000.00 08/06/02 La Jolla Bank, FSB 03/01/02 1.910 10,000,000.00 09/04/02 RED BLUFF Tehama Bank 07/03/01 3.620 5,000,000.00 07/03/02 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 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 03/15/02 2.040 10,000,000.00 09/12/02 Mechanics Bank 10/12/01 2.380 10,000,000.00 10/15/02 Mechanics Bank 03/07/02 2.390 10,000,000.00 03/07/03 SACRAMENTO American River Bank 10/12/01 2.250 1,500,000.00 04/10/02 27 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE SACRAMENTO (continued) American River Bank 06/26/01 3.380 1,000,000.00 06/26/02 American River Bank 01/11/02 1.780 1,000,000.00 07/10/02 American River Bank 03/29/02 2.140 2,000,000.00 08/29/02 American River Bank 03/29/02 2.140 2,000,000.00 09/25/02 American River Bank 01/14/02 2.200 1,500,000.00 01/14/03 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 Bank of Sacramento 03/21/02 2.130 2,000,000.00 09/20/02 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 Golden One Credit Union 03/22/02 1.920 10,000,000.00 07/19/02 Golden One Credit Union 03/22/02 2.160 10,000,000.00 09/20/02 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 10/04/01 2.330 4,000,000.00 04/02/02 River City Bank 01/07/02 1.860 2,000,000.00 07/01/02 River City Bank 01/28/02 1.870 3,000,000.00 07/29/02 River City Bank 02/26/02 1.930 2,000,000.00 08/27/02 U.S. Bank 08/07/01 3.550 25,000,000.00 05/06/02 U.S. Bank 02/04/02 1.800 25,000,000.00 05/06/02 U.S. Bank 02/04/02 1.930 25,000,000.00 08/02/02 U.S. Bank 02/19/02 1.890 25,000,000.00 08/23/02 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 03/06/02 1.960 82,000,000.00 09/06/02 SALINAS Community Bk Central Calif 01/09/02 1.700 10,000,000.00 04/11/02 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 01/09/02 1.730 8,000,000.00 04/09/02 Business Bank of California 02/05/02 1.810 12,000,000.00 05/06/02 28 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE SAN DIEGO First Future Credit Union 11/30/01 1.850 5,000,000.00 05/29/02 First Future Credit Union 12/19/01 1.830 3,000,000.00 06/21/02 First Future Credit Union 03/01/02 1.890 5,000,000.00 08/30/02 First United Bank 01/18/02 1.680 2,000,000.00 07/18/02 First United Bank 02/15/02 2.300 1,000,000.00 02/14/03 Neighborhood National Bank 02/22/02 1.910 2,000,000.00 08/22/02 SAN FRANCISCO American California Bank 01/28/02 1.790 1,500,000.00 04/30/02 American California Bank 10/31/01 2.060 1,000,000.00 04/30/02 Bank of Canton California 12/17/01 1.750 15,000,000.00 04/12/02 Bank of Canton California 11/21/01 2.030 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 Canton California 03/08/02 2.390 20,000,000.00 03/07/03 Bank of the West 01/02/02 1.730 34,000,000.00 04/02/02 Bank of the West 01/08/02 1.730 50,000,000.00 04/02/02 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 Bank of the West 01/24/02 1.780 76,500,000.00 07/23/02 Bank of the West 02/20/02 1.870 100,000,000.00 08/20/02 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 Federal Bank 01/04/02 1.860 50,000,000.00 07/03/02 California Federal Bank 02/22/02 1.900 50,000,000.00 08/22/02 California Pacific Bank 01/10/02 1.710 1,000,000.00 04/10/02 California Pacific Bank 02/15/02 1.770 1,000,000.00 05/16/02 California Pacific Bank 03/28/02 1.830 2,000,000.00 06/27/02 Oceanic Bank 03/15/02 2.040 4,000,000.00 09/12/02 Trans Pacific National Bank 02/05/02 1.880 1,000,000.00 08/05/02 Trans Pacific National Bank 03/19/02 2.110 800,000.00 09/19/02 Trans Pacific National Bank 03/19/02 2.110 200,000.00 09/19/02 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 United Commercial Bank 02/28/02 1.900 30,000,000.00 08/30/02 29 NAME SAN JOSE TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE Comerica Bank of California 01/09/02 1.730 71,000,000.00 04/09/02 Comerica Bank of California 02/06/02 1.810 183,000,000.00 05/07/02 Comerica Bank of California 03/04/02 1.820 63,000,000.00 06/06/02 Heritage Bank of Commerce 02/15/02 1.900 2,000,000.00 08/15/02 Meriwest Credit Union 02/06/02 1.810 5,000,000.00 05/07/02 Meriwest Credit Union 12/20/01 1.860 5,000,000.00 06/18/02 Meriwest Credit Union 01/18/02 1.750 5,000,000.00 07/19/02 Meriwest Credit Union 02/28/02 1.920 5,000,000.00 08/28/02 San Jose National Bank 04/30/01 3.870 10,000,000.00 04/30/02 San Jose National Bank 11/01/01 2.030 10,000,000.00 04/30/02 San Jose National Bank 02/13/02 1.840 20,000,000.00 08/14/02 Santa Clara Co. Fed. C.U. 02/05/02 1.880 15,000,000.00 08/06/02 SAN LUIS OBISPO First Bank Of San Luis Obispo 03/27/02 1.890 5,000,000.00 06/26/02 Mission Community Bank 12/21/01 1.720 1,000,000.00 04/09/02 Mission Community Bank 10/11/01 2.240 1,500,000.00 04/09/02 Mission Community Bank 12/10/01 1.840 1,000,000.00 06/11/02 Mission Community Bank 03/08/02 2.010 1,000,000.00 09/05/02 San Luis Trust Bank 10/26/01 2.130 1,000,000.00 04/24/02 San Luis Trust Bank 01/08/02 1.840 1,350,000.00 07/11/02 SAN MARINO East West Federal Bank 11/16/01 1.900 38,000,000.00 05/15/02 East West Federal Bank 11/28/01 2.080 35,000,000.00 06/10/02 East West Federal Bank 01/04/02 1.860 42,000,000.00 07/09/02 East West Federal Bank 02/07/02 2.260 35,000,000.00 02/07/03 SAN RAFAEL Metro Commerce Bank 11/28/01 2.070 1,800,000.00 05/30/02 Westamerica Bank 01/09/02 1.700 50,000,000.00 04/09/02 Westamerica Bank 02/07/02 1.760 35,000,000.00 05/08/02 Westamerica Bank 07/18/01 3.510 25,000,000.00 07/18/02 Westamerica Bank 07/30/01 3.490 50,000,000.00 07/30/02 SAN RAMON EBTEL Federal Credit Union 01/02/02 1.840 1,000,000.00 07/01/02 EBTEL Federal Credit Union 02/13/02 1.800 750,000.00 07/18/02 30 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE EBTEL Federal Credit Union 02/14/02 1.860 1,000,000.00 08/13/02 SANTA BARBARA FNB of Central California 10/12/01 2.280 10,000,000.00 04/10/02 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 FNB of Central California 01/25/02 1.810 15,000,000.00 07/25/02 FNB of Central California 03/11/02 2.040 10,000,000.00 09/09/02 Santa Barbara Bank & Trust 10/01/01 2.400 10,000,000.00 04/02/02 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 Barbara Bank & Trust 01/25/02 1.800 30,000,000.00 07/25/02 Santa Barbara Bank & Trust 02/08/02 1.850 16,000,000.00 08/15/02 SANTA CLARITA Valencia Bank & Trust 03/19/02 2.110 4,000,000.00 09/19/02 SANTA MARIA Hacienda Bank 03/11/02 2.030 1,000,000.00 09/09/02 SANTA ROSA National Bank of the Redwoods 10/29/01 2.140 10,000,000.00 04/26/02 National Bank of the Redwoods 01/28/02 1.860 5,000,000.00 07/26/02 Redwood Credit Union 12/28/01 1.840 8,000,000.00 06/24/02 Redwood Credit Union 02/28/02 1.950 17,000,000.00 08/28/02 SONORA Central California Bank 03/04/02 1.920 1,000,000.00 09/05/02 STOCKTON Pacific State Bank 10/12/01 2.260 1,000,000.00 04/10/02 Pacific State Bank 01/08/02 1.850 1,000,000.00 07/02/02 Service 1st Bank 01/31/02 1.780 2,000,000.00 05/01/02 Service 1st Bank 02/05/02 1.900 2,000,000.00 08/05/02 Union Safe Deposit Bank 10/11/01 2.270 10,000,000.00 04/11/02 31 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE STOCKTON (continued) Union Safe Deposit Bank 11/05/01 2.020 10,000,000.00 05/07/02 Union Safe Deposit Bank 12/11/01 1.830 10,000,000.00 06/12/02 Union Safe Deposit Bank 01/23/02 1.820 15,000,000.00 07/25/02 Union Safe Deposit Bank 02/14/02 1.930 5,000,000.00 08/15/02 Union Safe Deposit Bank 02/14/02 1.930 10,000,000.00 08/15/02 Union Safe Deposit Bank 03/01/02 1.930 5,000,000.00 09/04/02 Union Safe Deposit Bank 03/01/02 1.930 10,000,000.00 09/04/02 Washington Mutual Bank 12/21/01 1.830 15,000,000.00 06/17/02 Washington Mutual Bank 12/10/01 1.820 30,000,000.00 06/17/02 Washington Mutual Bank 01/24/02 1.770 60,000,000.00 07/23/02 Washington Mutual Bank 02/19/02 1.870 60,000,000.00 08/19/02 SUNNYVALE Asiana Bank TORRANCE 03/21/02 2.110 1,500,000.00 09/20/02 China Trust Bank (USA) 01/18/02 1.650 30,000,000.00 04/18/02 China Trust Bank (USA) 02/15/02 1.910 20,000,000.00 08/16/02 China Trust Bank (USA) 03/14/02 2.060 35,000,000.00 09/12/02 South Bay Bank 11/08/01 1.780 4,000,000.00 05/07/02 South Bay Bank 03/20/02 1.930 2,000,000.00 06/19/02 South Bay Bank 01/25/02 1.830 1,000,000.00 07/24/02 South Bay Bank 03/01/02 1.890 3,000,000.00 08/29/02 South Bay Bank 03/15/02 2.030 5,000,000.00 09/12/02 TUSTIN First Fidelity Investment & Loan 01/15/02 1.610 10,000,000.00 04/16/02 First Fidelity Investment & Loan 02/07/02 1.770 15,000,000.00 05/08/02 First Fidelity Investment & Loan 03/05/02 1.810 15,000,000.00 06/04/02 Sunwest Bank 01/09/02 1.700 3,500,000.00 04/09/02 Sunwest Bank 01/25/02 1.730 2,500,000.00 04/26/02 Sunwest Bank 02/08/02 1.760 7,800,000.00 05/10/02 Sunwest Bank 03/08/02 1.810 1,000,000.00 06/10/02 VACAVILLE Travis Credit Union 02/28/02 1.930 40,000,000.00 08/28/02 32 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE WATSONVILLE Monterey Bay Bank 12/17/01 1.840 3,000,000.00 06/17/02 Monterey Bay Bank 01/07/02 1.860 8,000,000.00 07/10/02 Monterey Bay Bank 03/20/02 2.100 8,000,000.00 09/19/02 WHITTIER 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 11/27/01 2.080 25,000,000.00 05/24/02 Quaker City Bank 12/28/01 1.830 10,000,000.00 07/12/02 Quaker City Bank 01/08/02 1.860 14,000,000.00 07/12/02 TOTAL TIME DEPOSITS MARCH 2O02 33 5,204,195,000.00 BANK DEMAND DEPOSITS MARCH 2O02 ($ in thousands) DAILY BALANCES DAY OF BALANCES WARRANTS MONTH PER BANKS OUTSTANDING 1 $ 810,465 $ 3,268,528 2 810,465 3,268,528 3 810,465 3,268,528 4 334,205 2,562,390 5 478,608 2,493,111 6 298,150 2,274,439 7 268,426 2,210,612 8 392,688 2,420,677 9 392,688 2,420,677 10 392,688 2,420,677 11 643,346 2,093,236 12 348,590 1,786,177 13 536,683 1,774,582 14 823,964 2,022,341 15 619,659 2,059,726 16 619,659 2,065,339 17 619,659 2,065,339 18 287,465 1,962,897 19 561,147 1,942,181 20 474,842 2,269,717 21 198,613 2,512,099 22 582,843 2,414,871 23 582,843 2,414,871 24 582,843 2,414,871 25 280,355 2,238,537 26 209,536 2,269,668 27 199,541 2,226,578 28 419,561 2,548,220 29 429,326 2,518,247 30 429,326 2,518,247 31 429,326 2,523,035 AVERAGE DOLLAR DAYS $ 479,612 a/ a/ The prescribed bank balance for March was $772,076. This consisted of $643,788 in compensating balances for services, balances for uncollected funds of $136,097 and a deduction of $7,809 for March delayed deposit credit. 34 DESIGNATION BY POOLED MONEY INVESTMENT BOARD OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its meeting on March 20, 2002, 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 No. 1633 $ 643,788,000 The active noninterest-bearing bank accounts designation constitutes a calendar month average balance. For purposes of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above amount provided that the balances computed by dividing the sum of daily balances of that calendar month by the number of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management. 2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest - bearing deposits in banks and savings and loan associations as follows: Time Deposits in Various Financial Institutions In Securities (sections 16503a Estimated From To Transactions (section 16430)* and 16602)* Total ( 1) 3/18/2002 3/22/2002 $ 299,300,000 $ 45,593,205,000 $ 5,205,195,000 $ 50,798,400,000 (2) 3/25/2002 3/29/2002 $ (347,800,000) $ 45,245,405,000 $ 5,205,195,000 $ 50,450,600,000 (3) 4/1/2002 4/5/2002 $ (1,332,200,000) $ 43,913,205,000 $ 5,205,195,000 $ 49,118,400,000 (4) 4/8/2002 4/12/2002 $ 236,200,000 $ 44,149,405,000 $ 5,205,195,000 $ 49,354,600,000 (5) 4/15/2002 4/19/2002 $ 4,385,100,000 $ 48,534,505,000 $ 5,205,195,000 $ 53,739,700,000 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 $ 643,788,000. POOLED MONEY INVESTMENT BOARD: Chairperson Member Dated: March 20, 2002 * Government Code Member MARCH 31, 2002 QUARTERLY ANSWER BOOK UPDATE REPLACEMENT PAGES 29 49 59 129 139 149 259 269 279 289 399 409 41 AND 42 Revised March 31, 2002 Additionally, the PMIA has Policies, Goals and Objectives for the portfolio to make certain that our goals of Safety, Liquidity and Yield are not jeopardized and that prudent management prevails. These policies are formulated by investment staff and reviewed by both the PMIB and the LAIF Board on an annual basis. The State Treasurer's Office is audited by the Bureau of State Audits on an annual basis. The resulting opinion is included in the subsequent Pooled Money monthly report following its publication. The Bureau of State Audits also has a continuing audit process throughout the year. All investment and LAIF claims are audited on a daily basis by the State Controller's Office as well as an in-house audit process involving three separate divisions. It has been determined that the State of California cannot declare bankruptcy under Federal regulations, thereby allowing the Government Code Section 16429.3 to stand. This Section states that "money placed with the state treasurer for deposit in the LAIF shall not be subject to either: (a) transfer or loan pursuant to Sections 16310, 16312, or 16313, or (b) impoundment or seizure by any state official or state agency." The LAIF has grown from 293 participants and $468 million in 1977 to 3,039 participants and $19.5 billion in 2002. State Treasurer's Office Local Agency Investment Fund P.O. Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 http://www.treasurer.ca.gov 2 Revised March 31, 2002 LOCAL AGENCY INVESTMENT FUND 340 TRIICTFFC Participation as of 3/31/02 3,039 Agencies 259 BONDS 54 COUNTIES 470 CITIES 9% 2% 15% 1,916 DISTRICTS 63% ■ 54 COUNTIES ❑ 470 CITIES ■ 1,916 DISTRICTS ■ 340 TRUSTEES ■ 259 BONDS 4 Revised March 31, 2002 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 Governments Federal Agency Coupons Certificate of Deposits Bank Notes Bankers' Acceptances Repurchases Federal Agency Discount Notes Time Deposits GNMAs Commerical Paper FHLMC Corporate Bonds Pooled Loans GF Loans Reversed Repurchases Total (All Types) March 31, 2002 AMOUNT $ 792,848 0 5,994,691 0 $ 6,787,539 $ 4,930,444 5,835,098 625,006 17,877 0 9,100,703 5,204,195 804 9,341,293 7,875 2,450,024 2,674,838 1,188,200 -1,002,512 $ 47,161,384 Average Life of Portfolio as of March 31, 2002 is 188 Days PERCENTAGE CHANGE FROM PERCENT PRIOR MONTH 1.68 0 12.71 0 14.39 10.45 12.37 1.33 0.04 0 19.30 11.03 0 19.81 0.02 5.19 5.67 2.52 -2.12 100.00 -0.47 0 +1.45 0 +0.98 +0.93 +0.69 -0.68 +0.01 0 -4.34 +0.74 0 +0.06 0 +0.36 -0.35 +2.52 +0.92 5 Revised March 31, 2002 State of California Pooled Money Investment Account Market Valuation 3/31 /02 ��lescrlptiot� . Acridire: .. Afmrtixd Ost a� ;rue �i�lnr�eOt United States Treasury: Bills $ 792,847,736.18 $ 797,508,166.69 $ 797,410,000.00 NA Notes $ 5,994,690,909.66 $ 5,979,081,386.85 $ 5,992,553,000.00 $ 70,057,147.50 Federal Agency: SBA $ 248,945,284.47 $ 248,945,284.47 $ 248,461,311.15 $ 965,308.68 MBS $ 572,948,501.57 $ 572,948,501.57 $ 573,892,783.96 $ 2,894,343.26 Bonds $ 4,108,550,641.95 $ 4,108,227,375.29 $ 4,122,779,769.55 $ 53,796,087.70 Floaters $ - $ - $ - $ - Discount Notes $ 9,100,703,490.18 $ 9,225,187,190.83 $ 9,235,613,038.00 NA FHLMC PC $ 7,874,878.28 $ 7,874,878.28 $ 8,584,490.79 $ 126,619.49 GNMA $ 804,484.67 $ 804,484.67 $ 927,378.41 $ 7,977.90 Bankers Acceptances $ 17,877,221.82 $ 17,966,729.96 $ 17,965,727.63 NA Bank Notes $ 625,005,667.97 $ 625,005,667.97 $ 625,701,502.00 $ 18;161,872.50 CDs $ 5,835,097,928.23 $ 5,835,054,664.34 $ 5,834,416,391.30 $ 30,545,308.32 Commercial Paper $ 9,341,293,494.43 $ 9,358,122,548.62 $ 9,358,352,625.00 NA Corporate: Floaters $ 944,302,925.76 $ 944,302,925.76 $ 937,705,938.48 $ 2,429,722.97 Bonds $ 1,505,720,786.85 $ 1,504,513,130.61 $ 1,508,250,326.90 $ 26,353,858.55 Repurchase Agreements $ - $ - $ - NA Reverse Repurchase $ (1,002,512,500.00) $ (1,002,512,500.00) $ (1,002,512,500.00) $ (4,810,529.43) Time Deposits $ 5,204,195,000.00 $ 5,204,195,000.00 $ 5,204,195,000.00 NA AB 55 & GF Loans * $ 3,863,037,686.53 $ 3,863,037,686.53 $ 3,863,037,686.53 NA TOTAL $ 47,161,384,138.55 $ 47,290,263,122.44 $ 47,327,334,469.70 $ 200,527,717.44 Fair Value Including Accrued Interest $ 47,527,862,187.14 Repurchase Agreements, Time Deposits, AB 55 & General Fund loans, and Reverse Repurchase agreements are carried at portfolio book value (carrying cost). * Updated after the initial Market Valuation. _ The value of each participating dollar equals the fair value divided by the amortized cost (1.000783911). As an example: if an agency has an account balance of $20,000,000.00, then the agency would report its participation in the LAW valued at $20,015,678.22 or $20,000,000.00 x 1.000783911. 12 Revised March 31, 2002 W a I- Z i a� H O .40 Q %6- O M� y W C .O Z .r- L W cc \a � a LO 0 40 ~ (D N c Lq O O � M Ln to o r r Lq O U t0 r C*4 tr N Co O M Co o T nj O t0 4a 413� 4 0 CD CDCD Cn O T Aa 4a 4 r `N O Co \° GO 0 CD w CD CD M (D Co CD le Co O N O C' LLn C Co N CD Ln Co CD OA L 0 cc to o N do tD CD m Co Co letNO� I*- Co r 0 r M N ~ 4a 4a K? Vk ER V! 40 CD CD°r° 4m W CD tip Ln O CD Co a ti Co -' W r r oc F. tp N r tr N ER EA EA V!k fA 93 Q% 03- O N 1� O r Ln CDLCD to w r Co 000 T- N do r T T r r d} Aa 4a EA 4a 6 EA CD IN*N T O � 0 CD Co m M ti M ti r d3 ER EA EF} EA dui ER J O Z Z H M ~ U m m O Lh LL, H W to M = Rt cc ��amyy cc C.) a a0+ O a as Cn C O t V C O Q O O cc O N > cc Y O N O 0 = 7 cL C LL i i N O L L t4 Q O d N tip d O C •� _ +�+ tQ 01 U) t+ LL Ch i 'O m G) Q CL d O O vi L' L d) C i O tm O 0 w N C LL i N N M G d 0 0 0 0 z z z z 13 Revised March 31, 2002 SOURCE OF FUNDS Pooled Money Investment Account Average Quarterly Balance 3/31 /02 $50.630 Billion *SMIF dtl 17 C/- LAIF 39.36 % Other 0.27 % General Fund * Surplus Money Investment Fund 20.10 % 14 Revised March 31, 2002 PMIA Average Monthly Effective Yields 1977 JM ma . 5.770 5.660 5.660 5.650 5.760 5.850 � Oct 5.930 6.050 6.090 6.390 DOG 6.610 6.730 978 6.920 7.050 7.140 7.270 7.386 7.569 7.652 7.821 7.871 8.110 8.286 8.769 1979 8.777 8.904 8.820 9.082 9.046 9.224 9.202 9.528 9.259 9.814 10.223 10.218 1980 10.980 11.251 11.490 11.480 12.017 11.798 10.206 9.870 9.945 10.056 10.426 10.961 1981 10.987 11.686 11.130 11.475 12.179 11.442 12.346 12.844 12.059 12.397 11.887 11.484 1982 11.683 12.044 11.835 11.773 12.270 11.9941 12.235 11.909 11.1511 11.111 10.704 10.401 1983 10.251 9.887 9.688 9.868 9.527 9.600 9.879 10.076 10.202 10.1821 10.164 10.227 1984 10.312 10.280 10.382 10.594 10.843 11.119 11.355 11.557 11.597 11.681 11.474 11.024 1985 10.579 10.289 10.118 10.025 10.180 9.743 9.656 9.417 9.572 9.482 9.488 9.371 1986__ _ 9.252 9.090 8.958 8.621 8.369 8.225 8.141 7.844 7.512 7.586 7.432 7.439 1087 7.365 7.157 7.205 7.044 7.294 7.289 7.464 7.562 7.712 7.825 8.121 8.071 1988 8.078 8.050 7.945 7.940 7.815 7.929 8.089 8.245 8.341 8.397 8.467 8.563 1989 8.698 8.770 8.870 8.992 9.227 9.2041 9.056 8.833 8.8011 8.771 8.685 8.645 1990_ 8.571 8.538 8.506 8.497 8.531 8.538 8.5171 8.382 8.333 8.3211 8.269 8.279 1991 8.164 8.002 7.775 7.666 7.374 7.169 7.098 7.072 6.859 6.719 6.591 6.318 1992 6.122 5.863 5.680 5.692 5.379 5.323 5.235 4.958 4.760 4.730 4.659 4.647 1993 4.678 4.649 4.624 4.605 4.427 4.554 4.438 4.472 4.430 4.380 4.365 4.384 1994 4.359 4.176 4.248 4.333 4.434 4.623 4.823 4.989 5.106 5.243 5.380 5.528 1995 5.612 5.779 5.934 5.960 6.008 5.9971 5.972 5.910 5.8321 5.784 5.805 5.748 1996 5.698 5.643 5.557 5.538 5.502 5.548 5.587 5.566 5.601 5.601 5.599 5.574 1997 5.583 5.575 5.580 5.612 5.634 5.667 5.679 5.690 5.707 5.705 5.715 5.744 19$ 5.742 5.720 5.680 5.672 5.673 5.671 5.652 5.652 5.639 5.557 5.492 5.374 1 5.265 5.210 5.136 5.119 5.086 5.095 5.178 5.225 5.274 5.391 5.484 5.639 ,20W 5.760 5.824 5.851 6.014 6.190 6.349 6.443 6.505 6.502 6.517 6.538 6.535 2001 6.372 6.169 5.976 5.760 5.328 4.958 4.635 4.502 4.288 3.785 3.526 3.261 221 3.068 2.967 2.861 25 Revised March 31, 2002 PMIA Average Annual Yields .. 4.880 86/87 7.435 71 /72 72/73 5.550 87/88 7.874 73/74 8.970 88/89 8.669 74/75 8.620 89/90 8.655 75/76 6.370 90/91 8.013 76/77 5.870 91 /92 6.196 77/78 6.700 92/93 4.707 78/79 8.520 93/94 4.387 79/80 10.540 94/95 5.532 80/81 10.780 95/96 5.706 81 /82 12.070 96/97 5.599 82/83 10.450 97/98 5.699 83/84 10.408 98/99 5.344 84/85 10.715 99/00 5.708 85/86 9.081 00/01 6.104 26 Revised March 31, 2002 LOCAL AGENCY INVESTMENT FUND QUARTERLY APPORTIONMENT RATES e� 5.68 5.78 5 84 6.45 e 6.97 7.35 7.86 8..32 e.. 8.81 9.10 9.26 � 10.06 �..� .e_. � 11 11 .. a _..�... 11.54 � 10.01 10 47 1 fl ........ ....._.. 11 23 11 68 i 12 40 11.91 4 11.82 1199 1174 _..�- - . 10.71 9.87 ., 9.64 .� ,. � . �.....�.. 10 04 ... �.. e. _ 10.18 f 10.32 10. ............... 41 .. . 10.32 .98 ri 9...... w....� y ............... ... 9.54 43 9.� 09 . 9 39 . 8 7.81 -- n,.... ......a. a®. ��.. . �. 7. 48 1 7.24 7.21 7 54 7 97 8.01 7 g 8.20 8.45 8 76 .. 9.13 _ .. 8.87 8.68 e ! 8.5 8.50 8.39 8.27 19� 7.97 _.... _ ....,.. a. 7 38 _..A . _... 7.00. 6.52 1 e..�..�aa-.... a.. m 5.87 �.,.... e .... 5.45 .w�"I m�.e -.q ......r........_... ...............r�. 4.97 4.67 1 4.64 4.51 4.44 4.36 �... ®..., 4.25 ...®..,... 4.45 �e ®. em.... _ �.... _ m 4.96 5 37 _... _ e� �...._� 5 76 _..._e 5.98 �em ..ro.._ 5.89 5.76 _...._ ... _...�...._ _.�. __... 5.62 �..... 5.52 p 5.57 5.58 e 5 56 5.63 5.68 5.71 � 5.70 5.66 5 64 � 5.46 5.19 5.08 5.21 ---- _w..... 5.49 5 80 6.18 6 47 6.52 1 . m�� ..... .... , 616 5.32 �.e- w ww .... 4.47 3 52 w � .'� 2.96 ...... ....... .. ............... � ...� wa 27 Revised March 31, 2002 LOCAL AGENCY INVESTMENT FUND ADMINISTRATIVE EARNINGS (COST) U�WRe 03/31 /93 0.25 1.2 06/30/93 0.26 1.2 09/30/93 0.23 1.0 12/31 /93 0.27 1.2 03/30/94 0.26 1.1 06/30/94 0.25 1.1 09/30/94 0.27 1.4 12/31 /94 0.26 1.4 03/31 /95 0.26 1.5 06/30/95 0.19 1.2 09/30/95 0.23 1.3 12/31 /95 0.25 1.5 03/31 /96 0.23 1.3 06/30/96 0.19 1.1 09/30/96 0.22 1.2 12/31 /96 0.26 1.5 03/31 /97 0.30 1.7 06/30/97 0.16 0•9 09/30/97 0.23 1.3 12/31 /97 0.24 1.4 03/31 /98 0.24 1.4 06/30/98 0.16 0.9 09/30/98 0.08 0.5 12/31 /98 0.24 1.3 03/31 /99 0.23 1.2 06/30/99 0.32 1.6 09/30/99 0.20 1.1 12/31 /99 0.22 1.2 03/31 /00 0.22 1.3 06/30/00 0.28 1.7 09/30/00 0.20 1.3 12/31 /00 0.20 1.3 03/31 /01 0.18 1.1 06/30/01 0.21 1.1 09/30/01 0.21 0.9 12/31 /01 0.31 1.1 03/31 /02 1 0.34 1.0 The law provides that reimbursements cannot exceed one-half of 1 percent of the EARNINGS of the fund per quarter. Listed above is the percentage of earnings (costs) per quarter. 28 Revised March 31, 2002 DISCLOSURE STATEMENT PORTFOLIO HOLDINGS: DERIVATIVES STRUCTURED NOTES, AND ASSET -BACKED SECURITIES The Treasury Investment Division has received a number of inquiries concerning our various portfolio holdings. Questions involving structured notes, derivative products, and asset -backed securities are the most notable. We have found that the lack of acceptable definitions regarding these financial products has led to confusion and disagreement with our reported positions. In an effort to clarify the information provided in our monthly statements, we would like to share with you our understanding of these financial products, as defined by the U.S. General Accounting Office (GAO). In a recent survey of sales practices for these financial products the GAO provided definitions and examples of what they considered 1) plain vanilla OTC derivatives, 2) more complex OTC derivatives, 3) structured notes, and 4) asset -backed securities. Following are the GAO definitions, as well as the State of California Treasurer's holdings in each category as of March 31, 2002: 39 Revised March 31, 2002 * 1. Plain Vanilla OTC Derivative Products A derivative product is a financial instrument whose market value is derived from a reference rate, index, or value of an underlying asset. OTC derivatives are privately negotiated contracts and are not traded on organized exchanges. U.S. $ 0 As of: 3/31/02 * 2. More Complex OTC Derivative Products Other more complex OTC derivatives have at least one of the following characteristics: a. Their prices tend to be difficult to obtain because they are often available from only a few dealers. b. The payments required by the derivative contract are calculated on the basis of more than one interest rate, currency, asset, or other factor. c. The derivative contract has terms that are not determined until some future date. d. The contract involves a term that acts as a multiplier or increases the leverage of the rate (s) used to compute payments. e. The contract CAN entail potentially unlimited risk. U.S. $ 0 As of: 3/31/02 * The Pooled Money Investment Account Portfolio has not invested in, nor will it invest in, Derivative Products as defined in General Accounting definitions #1 & #2. The GAO separation of derivatives, structured notes, and asset -backed securities is consistent with GASB 94-1. 40 Revised March 31, 2002 3. Structured Notes Structured notes are debt securities (other than asset -backed securities) whose cash -flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options. They are issued by corporations and by government -sponsored enterprises such as the Federal National Mortgage Association and the Federal Home Loan Bank System. U.S. $970.548 million As of: 3/31/02 4. Asset -Backed Securities Asset -backed securities, the bulk of which are mortgage -backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as CMOs) or credit card receivables. U.S. $830.572 million As of: 3/31/02 Securities Accountability 1) Vanilla Derivatives 0 2) Complex Derivatives 0 3) Structured Notes a. Callable Agency $ 00.000 million b. 3 month LIBOR Agency Floater $ 00.000 million C. 3 month LIBOR Corporate Floater $ 970.548 million d. 2 year CMT Corporate Floater $ 00.000 million e. 3 month T-Bill Agency Floater $ 00.000 million f. 3 month T-Bill Corporate Floater $ 00.000 million 41 Revised March 31, 2002 4) Asset -Backed a. Small Business Administration Pools $ 248.945 million b. Agency CMOs $ 572.948 million C. GNMA Pools $ 0.804 million d. FHLMC PC Pools $ 7.875 million Total Portfolio As of: 3/31/02 $4 7,161,384,138. 5 5 Financial Products as a percent of portfolio: 3.819% 42 Revised March 31, 2002