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2004 03 10 IABP.O. Box 1504 78-495 CALLE TAMPICO (760) 7 7 7 - 7 0 0 0 LA QUINTA, CALIFORNIA 92253 FAX (760) 777-7101 AGENDA INVESTMENT ADVISORY BOARD Study Session Room 78-495 Calle Tampico- La Quinta, CA 92253 March 10, 2004 - 5:30 P.M. I CALL TO ORDER a. Pledge of Allegiance b. Roll Call II PUBLIC COMMENT - (This is the time set aside for public comment on any matter not scheduled on the agenda.) III CONFIRMATION OF AGENDA IV CONSENT CALENDAR A. Approval of Minutes of Meeting on February 11, 2004 for the Investment Advisory Board. V BUSINESS SESSION A. Transmittal of Treasury Report for January 2004 B. Consideration of Fiscal Year 2004/05 Investment Policies C. California Municipal Treasurer's Conference - South Lake Tahoe, CA April 21 - 23, 2004 VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report and other selected Financial Data - February 2004 B. Pooled Money Investment Board Reports - December 2003 VII BOARD MEMBER ITEMS Vill ADJOURNMENT INVESTMENT ADVISORY BOARD Business Session: A Meeting Date: March 10, 2004 ITEM TITLE: Transmittal of Treasury Report for January 31, 2004 BACKGROUND: Attached please find the Treasury Report January 31, 2004 RECOMMENDATION: Review, Receive and File the Treasury Report for January 31, 2004 John M. Falconer, Finance Director 0 • J..,m0. �4 ti5 OF TO: La Quinta City Council FROM: John M. Falconer, Finance Director/Treasurer SUBJECT: Treasurer's Report for January 31, 2004 DATE: February 27, 2004 Attached is the Treasurer's Report for the month ending January 31, 2004. The report is submitted to the City Council each month after a reconciliation of accounts is accomplished by the Finance Department. The following table summarizes the changes in investment types for the month: Investment Beginning Purchased Notes Sold/Matured Other Ending Change Cash $ 393,313 (1) ($153,003) $240,310 ($153,003) LAIF 26,195,608 3,595,677 (850,000) 28,941,285 2,745,677 US Treasuries (2) 69,930,924 9,993,389 27,327 79,951,640 10,020,716 US Gov't Agencies (2) 27,392,009 23,196,056 (20,500,000) 6,662 30,094,727 2,702,718 Commercial Paper (2) - 0 0 Mutual Funds 2,497,708 262 1 2,497 970 262 Total $126 409 562 1 $36 785 384 $21 503 003 $33 989 $141 725 932 1 $15 316 370 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. John M. Falconer Finance Director/Treasurer Footnote (1) The amount reported represents the net increase (decrease) of deposits and withdrawals from the previous month. (2) The amount reported in the other column represents the amortization of premium/discount for the month on US Treasury, Commercial Paper and Agency investments. zl7/oDate 2 I I I I I I I Zes W S. pp LO wj A a G G to N N O N Of 3 N a c f0 .a o 55 1. N $ 8__ ¢¢ C r. Lq In U-) 1n QQ G N l a' cl N g8 g8 g8 g8888 pq8 rill 8 8 R RP. 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N V- N r- N d M M M d CO eC CO eO ��e�p, ,It Cl aRaRaRaRN �NOCO�cA �C�3ppE3E �apR NNC1McA1n MeeeppC-4e �r-t'riMNlli C4 C4 N V cM CV) CV) cO CO CO cC c0 O�cpaRaRee�p a 03E�p3QaRNe �pOti�f� 0 aRata aR I. cA � 8aR aR M MN�j, ' cOcNA OfM G� 3N Nr•�N -�j�M4M 4 'cGCCCGcC as so Ss 49 �t=QA C ? rL� D C ss m i c c '$ m '$ 'S m c EEE�'� Co c ccoo�E�'c EEC N co W W W W W W 43 W W W W W W cc LL •-c cccX — c c c d— ccc> cccLL �� �_" �a�0ag 11a.ag -lac 3 ��aya:5 11 CITY OF LA QUINTA CITY CITY RDA RDA FA BALANCE SHEET 01/31184 FIXED LONG TERM FIXED LONGTERM FINANCING LONGTERM GRAND CITY ASSETS DEBT RDA ASSETS DEBT AUTHORITY DEBT TOTAL ASSETS: POOLED CASH (24,121,148.68) 0.00 0.00 52,706,426.28 0.00 0.00 5,702.97 0.00 28,590,980.57 LORP INVESTMENT IN POOLED CASH 0.00 0.00 0.00 537,000.00 0.00 0.00 0.00 0.00 537,000.00 INVESTMENT T-BILL44MS 3 OTHER 72,870.000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 72,870,000.00 AUTO MALL CASH 0.00 0.00 0.00 LORP CASH 0.00 0.00 0.00 52,596.32 0.00 0.00 0.00 0.00 52,596.32 BON REDEMPTION CASH 0.00 0.00 0.00 107,929.98 0.00 0.00 5.83 0.00 107,935.81 BOND RESERVE CASH 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BOND PROJECT CASH 0.00 0.00 0.00 39,390,053.30 0.00 0.00 0.00 0.00 39,390,053.30 BOND ESCROW CASH 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PETTY CASH 1,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,000.00 CASH & INVESTMENT TOTAL 48,749,851.32 0.00 0.00 92,794,005.88 0.00 0.00 5,708.80 0.00 141,549,586.00 INVESTMENT IN LAND HELD FOR RESALE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ACCOUNTS RECEIVABLE 149,649.53 0.00 0.00 60,900.00 0.00 0.00 0.00 0.00 210,549.53 PREMIUMIDISCOUNT ON INVESTMENT 224,651.74 0.00 0.00 (48,265.00) 0.00 0.00 0.00 0.00 176,366.74 LORP-ACCOUNTS RECEIVABLE 0.00 0.00 0.00 77,588.59 0.00 0.00 0.00 0.00 77,588.50 INTEREST RECEIVABLE 48,358.93 0.00 0.00 0.00 0.00 0.00 0.00 0.00 48,358.93 LOAWNOTES RECEIVABLE 0.00 0.00 0.00 12,613,564.62 0.00 0.00 6.00 0.00 12,613,564.62 DUE FROM OTHER AGENCIES 2,490,080.55 0.00 2,496,060.55 DUE FROM OTHER AGENCIES - CVAG 2,299,096.69 0.00 0.00 0.00 0.00 0.00 0.00 2,M,098.89 CVAG ALLOWANCE (2,299.096.69) (2,299,096.69) DUE FROM OTHER GOVERNMENTS 30,800.37 0.00 0.00 0.00 0.00 0.00 0.00 0.00 30,800.37 DUE FROM OTHER FUNDS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ADVANCES FROM RDA - PRINCIPAL 15,507,550.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 15,597,550.20 ADVANCES FROM RDA - INTEREST 6,480,300.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6,480,300.03 ADVANCES TO OTHER FUNDS 0.00 6,092,670.41 6,092,670.41 NSF CHECKS RECEIVABLE 4,015.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4,015.60 ACCRUED REVENUE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FIXED ASSETS 0.00 306,249,652.60 306,249,652.60 ACCUMULATED DEPRECIATION 929,209.62 0.00 929.209.62 TRAVEL ADVANCES 2.925.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2,925.00 EMPLOYEE ADVANCES 5.237.19 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.237.19 PREPAID EXPENSES 17,515.35 0.00 0.00 0.00 0.00 0.00 0.00 0.00 17,515.36 RECEIVABLE TOTAL 25,985,094.12 305,249,652.60 0.00 18,796,438.62 0.00 0.00 0.00 0.00 351,032,185.34 WORKER COMPENSATION DEPOSIT 234,177.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 234.177.00 RENT DEPOSITS 2,365.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2,365.00 UTILITY DEPOSITS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 MISC. DEPOSITS 1073 21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,073.21 DEPOSITS TOTAL 237,615.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 237,615.21 GENERAL FIXED ASSETS 0.00 0.00 0.00 0.00 52,066,306.00 0.00 0.00 0.00 52,066,306.00 ACCUMULATED DEPRECIATION 0.00 0.00 0.00 AMOUNT AVAILABLE TO RETIRE LIT DEBT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 AMOUNT TO BE PROVIDED FOR UT DEBT 0.00 0.00 1,625,259.96 0.00 0.00 158,460,254.00 0.00 7.190,000.00 167,275,513.98 TOTAL OTHER ASSETS 0.00 0.00 1,625,259.90 0.00 52 066,306.00 158,460,254.00 0.00 7,190,000.00 219,341,819.95 TOTAL ASSETS 74,973,560.65 306,249.652.60 1,625.259.96 111,590.444.50 52,060,306.00 158,480,254.00 5,708.80 7,190,000.00 712,181,186.51 LIABILITIES: ACCOUNTS PAYABLE 14,329.44 0.00 0.00 0.00 0.00 0.00 0.00 0.00 14,329.44 DUE TO OTHER AGENCIES 854,130.27 0.00 0.00 0.00 0.00 0.00 0.00 0.00 854,130.27 DUE TO OTHER FUNDS - 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ADVANCES FROM OTHER FUNS 6,092,889.41 0.00 0.00 22,077,853.65 0.00 0.00 0.00 0.00 28,170,523.06 ACCRUED EXPENSES 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 INTEREST PAYABLE 0.00 0.00 0.00 0.00 0•00 PAYROLL LIABILITIES 171,811.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 171,811.01 STRONG MOTION INSTRUMENTS 2,301.79 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2,301.79 FRINGE TOED LIZARD FEES 106,428.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 106,428.00 SUSPENSE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 DUE TO THE CITY OF LA OUINTA 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PAYABLES TOTAL 7,241,889.92 0.00 0.00 22,077,853.65 0.00 0.00 0.00 0.00 29,319,523.57 ENGINEERING TRUST DEPOSITS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 SO. COAST AIR QUALITY DEPOSITS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 LORP DEPOSITS 0.00 0.00 0.00 18,664.00 0.00 0.00 0.00 0.00 18,664.00 DEVELOPER DEPOSITS 1,271,006.57 0.00 0.00 2,835.00 0.00 0.00 0.00 0.00 1,273,841.57 MISC. DEPOSITS 120,955.48 0.00 0.00 25,000.00 0.00 0.00 0.00 0.00 145.955.48 AGENCY FUN DEPOSITS 1,666,909.90 0.00 0.00 0.00 0.00 0.00 0.00 0.00 11686,909.90 TOTAL DEPOSITS 3,058,871.95 0.00 0.00 48,499.00 0.00 0.00 0.00 0.00 3,105,370.95 DEFERRED REVENUE 2,496,060.55 0.00 0.00 10 495 978.56 0.00 0.00 0.00 0.00 12,992,059.11 OTHER LL40RJTIES TOTAL 2.496,080.55 0.00 0.00 10,495,978.56 0.00 0.00 0.00 0.00 12,992,059.11 COMPENSATED ABSENCES PAYABLE 0.00 0.00 462,260.37 0.00 0.00 0.00 0.00 0.00 462,260.37 DEVELOPER AGREEMENT 0.00 0.00 684,688.59 0.00 0.00 0.00 0.00 0.00 684,688.50 DUE TO THE CITY OF LA QUINTA 0.00 0.00 478,311.00 0.00 0.00 0.00 0.00 0.00 478,311.00 DUE TO COUNTY OF RIVERSIDE 0.00 0.00 0.00 0.00 0.00 2.150,000.00 0.00 0.00 2,150,000.00 DUE TO C.V. UNIFIED SCHOOL DIST. 0.00 0.00 0.00 0.00 0.00 7,355,254.00 0.00 0.00 7.365,254.00 DUE TO DESERT SANDS SCHOOL DIST. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BONDS PAYABLE 0.00 0.00 0.00 0.00 0.00 148,945,000.00 0.00 7,190,000.00 156,135,000.00 TOTAL LONG TERM DEBT 0.00 0.00 1.625,259.96 0.00 0.00 158,460,254.00 0.00 7.190,000.00 167.275,513.96 TOTAL LIABILITIES 12.796,622.42 0.00 1,625,259.96 32,620.331.21 0.00 158,460,254.00 0.00 7,190,000.00 212,692,467.59 EQUITY -FUND BALANCE 62,176,938.15 306,249,652.60 0.00 78,970,113.29 52,066,306.00 0.00 5.700.80 0.00 499,468,718.84 TOTAL LIABILITY & EQUITY 74,973,560.67 306,149,69.60 1,625.259.96 111.590,444.50 52.066.306.00 158.460.254.00 1708.80 7,190,000.00 712,161,186.43 0.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.08 CASH & INVESTMENT TOTAL 141,549,556.00 PREMIUMIDISCOUNT ON INVESTMENT 176,366.74 TOTAL 141 72S 932.74 12 INVESTMENT ADVISORY BOARD Business Session: B Meeting Date: March 10, 2004 TITLE: Consideration of Fiscal Year 2004/05 Investment Policies BACKGROUND: Each year at this time the Investment Advisory Board begins the process of reviewing the investment policy that will be put into place in the next fiscal year beginning July 1st. At the June meeting, the City Council Manager, City Attorney and Staff will meet with the 'Board to discuss the changes, if any. The policy will then be forwarded to the City Council for their consideration. Typically, the Investment Advisory Board Chairman, or designee attends the City Council meeting and is available in the event the City Council has any questions regarding policies. Staff has attached the current investment policy. In addition, at the September meeting the Board added the following items to this years work plan which may want to be incorporated into the investment policy. • Educational meetings with Investment Advisors on managing City funds; • Review of Commercial Paper; • Review of Government Sponsored Enterprises (GSE's); • Review of LAIF; • Other recurring items such as the monthly Treasurer's Report, LAW reports and monthly Cash Reports. RECOMMENDATION: Continued review of the Investment policies for approval by City Council in June 2004. A n M. Falconer", Finance Director CITY OF LA QUINTA Investment Policy Table of Contents Section Topic Page Executive Summary 2 I General Purpose 4 II Investment Policy 4 III Scope 4 IV Objectives 4 ► Safety ► Liquidity ► Yield ► Diversified Portfolio V Maximum Maturities 6 VI Prudence 6 VII Delegation of Authority 6 VIII Conflict of Interest 7 IX Authorized Financial Dealers and Institutions 7 ON. Broker/Dealers ► Financial Institutions X Authorized Investments and Limitations 8 XI Investment Pools 12 XII Safekeeping and Custody 13 Xlll Interest Earning Distribution Policy 13 XIV Internal Controls and Independent Auditors 13 XV Benchmark 15 XVI Reporting Standards 15 XVII Financial Assets and Investment Activity Not Subject to this Policy 16 XVIII Investment of Bond Proceeds 16 IX Investment Advisory Board - City of La Quinta 16 XX Investment Policy Adoption 17 Appendices: A. Summary of Authorized Investments and Limitations 18 B. Municipal Code Ordinance 2.70 - Investment Advisory Board 19 C. Municipal Code Ordinance 3.08 - Investment of Moneys and Funds 20 D. Segregation of Major Investment Responsibilities 22 E. Listing of Approved Financial Institutions 23 F. Broker/Dealer Questionnaire and Certification 24 G. Investment Pool Questionnaire 29 H. Glossary 33 1 City of La Quinta Investment Policy Executive Summary The general purpose of this Investment Policy is to provide the rules and standards users must follow in investing funds of the City of La Quinta. It is the policy of the City of La Quinta to invest all public funds in a manner which will provide a diversified portfolio with maximum security while meeting daily cash flow demands and the highest investment return in conformity to all state and local statutes. This Policy applies to all cash and investments of the City of La Quinta, La Quinta Redevelopment Agency and the La Quinta Financing Authority, hereafter referred in this document as the "City". The primary objectives, in order of priority, of the City of La Quinta's investment activity shall be: Safety of principal is the foremost objective of the investment program. Investments of the City of La Quinta shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. The investment portfolio shall be designed with the objective of attaining a market rate of return or yield throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Within the constraints of safety, liquidity and yield, the City will endeavor to maintain a diversified portfolio by allocating assets between different types of investments within policy limitations. Investments shall be made with judgment and care - under circumstances then prevailing - which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derive. Authority to manage the City of La Quinta's investment portfolio is derived from the City Ordinance. Management responsibility for the investment program is delegated to the City Treasurer, who shall establish and implement written procedures for the operation of the City's investment program consistent with the Investment Policy. The Treasurer shall establish and implement a system of internal controls to maintain the safety of the portfolio. In addition, the internal control system will also insure the timely preparation and accurate reporting of the portfolio financial information. As part of the annual audit of the City of La Quinta's financial statements the 2 independent auditor reviews the adequacy of those controls and comments if weaknesses are found. Investment responsibilities carry added duties of insuring that investments are made without improper influence or the appearance to a reasonable person of questionable or improper influence. The City of La Quinta Investment Policy maintains a listing of financial institutions which are approved for investment purposes. All Broker/Dealers and financial institutions selected by the Treasurer to provide investment services will be approved by the City Manager subject to City Council approval. The Treasurer will be permitted to invest only in City approved investments up to the maximum allowable percentages or dollar limitations and, where applicable, through the bid process requirements. Authorized investment vehicles and related maximum portfolio positions are listed in Appendix A - Summary of Authorized Investments and Limitations. At least two bids will be required of investments in the authorized investment vehicles. Collateralization will be required for Certificates of Deposits in excess of $100,000. Collateral will always be held by an independent third party from the institution that sells the Certificates of Deposit to the City. Evidence of compliance with State Collateral ization policies must be supplied to the City and retained by the City Treasurer. The City of La Quinta Investment Policy shall require that each individual investment have a maximum maturity of two years unless specific approval is authorized by the City Council, except the projected annual dollar amount as detailed in Section 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. This Executive Summary is an overall review of the City of La Quinta Investment Policies. Reading this summary does not constitute a complete review, which can only be accomplished by reviewing all the pages. 3 City of La Quinta Statement of Investment Policy July 1, 2003 through June 30, 2004 Adopted by the City Council on June 17, 2003 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. 11 INVESTMENT POLICY It is the policy of the City of La Quinta to invest public funds in a manner which will provide a diversified portfolio with safety of principal as the primary objective while meeting daily cash flow demands with the highest investment return. In addition, the Investment Policy will conform to all State and local statutes governing the investment of public funds. III SCOPE This Investment Policy applies to all cash and investments, except as further detailed in Section XVII of the City of La Quinta, City of La Quinta Redevelopment Agency and the City of La Quinta Financing Authority, hereafter referred in this document as the "City". These funds are reported in the City of La Quinta Comprehensive Annual financial Report (CAFR) and include: All funds within the following fund types: ► General ► Special Revenue ► Capital Projects ► Debt Service ► Internal Service ► Trust and Agency ► Any new fund types and fund(s) that may be created. IV OBJECTIVES The primary objective, in order of priority, of the City of La Quinta's investment activity shall be: 4 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. 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 5 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 MAXIMUM MATURITIES It is the policy of the City of La Quinta to hold securities and other investments of 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 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 2003/04, the amount of such funds was $5 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 exercise 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. 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 ► 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 7 The City Treasurer shall evaluate the documentation submitted by the broker/dealer and independently verify existing reports on file for any firm and individual conducting investment related business. The City Treasurer will also contact the following agencies during the verification process: ► National Association of Security Dealer's Public Disclosure Report File - 1-800-289-9999 ► State of California Department of Corporations 1-916-445-3062 All Broker/Dealers selected by the City Treasurer to provide investment services will be approved by the City Manager subject to City Council approval. The City Attorney will perform a legal review of the trading resolution/investment contract submitted by each Broker/Dealer. Each securities dealer shall provide monthly and quarterly reports filed pursuant to U.S. Treasury Department regulations. Each mutual fund shall provide a prospectus and statement of additional information. 2. Financial Institutions will be required to meet the following criteria in order to receive City funds for deposit or investment: A. Insurance - Public Funds shall be deposited only in financial institutions having accounts insured by the Federal Deposit Insurance Corporation (FDIC) B. Collateral • - The amount of City of La Quinta deposits or investments not insured by the FDIC -shall be 110% collateralized by securities' or 150% mortgages' market values of that amount of invested funds plus unpaid interest earnings. C. Disclosure- Each financial institution maintaining invested funds in excess of the FDIC insured amount shall furnish the City a copy of the most recent Annual Call Report. The City shall not invest in excess of the FDIC insured amount in banking institutions which do not disclose to the city a current listing of securities pledged for collateral ization in public monies. 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 the projected annual dollar amount, as detailed in Section 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 $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 25 % 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 commonly referred to as government sponsored enterprises (GSEs), issuing securities not backed as to principal and interests by the full faith and credit of the U.S. Government. Publicly owned GSEs include Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC) and Student Loan Marketing Association (SLMA). Non -publicly owned GSEs include the Federal Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), Federal Land Bank (FLB) and Federal Intermediate Credit Bank (FICB). The City of La Quinta Investment Policy allows investment only in securities of FNMA, FHLMC, FHLB and,FFCB and has a limitation of $7.5 million face amount for each issuer. 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 maybe 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 $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 Investment Policy does not allow investment in Reverse Repurchase Agreements. 10 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. 11 Collateral ization will be required for Certificates of Deposits in excess of the FDIC insured amount. The type of collateral is limited to City authorized investments. Collateral will always be held by an independent third party from the institution that sells the Certificates of Deposit to the City. Evidence of compliance with State Collateralization policies must be supplied to the City and retained by the City Treasurer as follows: 1. Certificates of Deposits Insured by the FDIC. The City Treasurer may waive collateral ization of a deposit that is federally insured. 2. Certificates of Deposit in excess of FDIC Limits. The amount not federally insured shall be 1 10% collateralized securities or 150% mortgages market value of that amount of invested funds plus unpaid interest earnings. The City of La Quinta Investment Policy limits the percentage of Certificates of Deposit to 60% of the portfolio. Sweep Accounts - As authorized by the City Council, a U.S. Treasury and/or U.S. Agency Securities Money Market Sweep Account with a $50,000 target balance may be maintained in conjunction with the checking account. Derivatives - The City of La Quinta Investment Policy does not allow investment in derivatives. 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 $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. 12 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 POUCY Interest earnings are 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. 13 While no internal control system, however elaborate, can guarantee absolute assurance that the City's assets are safeguarded, it is the intent of the City's internal control to provide a reasonable assurance that management of the investment function meets the City's objectives. The internal controls shall address the following: a. Control of collusion. Collusion is a situation where two or more employees are working in conjunction to defraud their employer. b. Separation of transaction authority from accounting and record keeping. By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved. C. Custodial safekeeping. Securities purchased from any bank or dealer including appropriate collateral (as defined by State Law) shall be placed with an independent third party for custodial safekeeping. d. Avoidance of physical delivery securities. Book entry securities are much easier to transfer and account for since actual delivery of a document never takes place. Delivered securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities. e. Clear delegation of authority to subordinate staff members.' Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions. Clear delegation of authority also preserves the internal control structure that is contingent on the various staff positions and their respective responsibilities as outlined in the Segregation of Major Investment Responsibilities appendices. f.. Written confirmation or telephone transactions for investments and wire transfers. Due to the potential for error and improprieties arising from telephone transactions, all telephone transactions shall be supported by written communications and approved by 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. 14 The System of Internal Controls developed by the City, shall be reviewed annually by the independent auditor in connection with the annual audit of the City of La Quinta' s Financial Statements. The independent auditor' s management letter comments pertaining to cash and investments, if any, shall be directed to the City Manager who will direct the City Treasurer to provide a written response to the independent auditor' s letter. The management letter comments pertaining to cash and investment activities and the City Treasurer' s response shall be provided to the City' s Investment Advisory Board for their consideration. Following the completion of each annual audit, the independent auditor shall meet with the Investment Advisory Board and discuss the auditing procedures performed and the review of internal controls for cash and investment activities. 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 31" 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; 15 ► 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. XVII FINANCIAL ASSETS AND INVESTMENT ACTIVITY NOT SUBJECT TO THIS POLICY The City's Investment Policy does not apply to the following: • Cash and Investments raised from Conduit Debt Financing; • Funds held in trust in the City's name in pension or other post -retirement benefit programs; • Cash and Investments held in lieu of retention by banks or other financial institutions for construction projects; • Short or long term loans made to other entities by the City or Agency; and, • Short term (Due to/from) or long term (Advances from/to) obligations made either between the City and its funds or between the City and Agency. VIII 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. IX INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA The Investment Advisory Board (IAB) consists of five 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 16 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. XX INVESTMENT POLICY ADOPTION On an annual basis, the Investment policies will be initially reviewed by the Investment Advisory Board and the City Treasurer. The Investment Advisory Board will forward the Investment policies, with any revisions, to the City Manager and City Attorney for their review and comment. A joint meeting will be held with the Investment Advisory Board, City Manager, City Attorney, and City Treasurer to review the Investment policies and comments, prior to submission to the City Council for their consideration. The Investment Policies shall be adopted by resolution of the City of La Quinta City Council on an annual basis. The Investment Policies will be adopted before the end of June of each year. AB 943 requires that the Investment Policies be sent to the California Debt and Investment Advisory Commission within sixty days of a change to the Investment Policy. 17 Appendix A 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 five (5) members from the public that are appointed by city council. La Quinta residency is required except for Board Members currently serving on the Board as of June 30, 2003 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. 19 Appendix C Chapter 3.08 INVESTMENT OF MONEYS AND FUNDS Sections: 3.08.010 Investment of city moneys and deposit of securities. 3.08.020 Authorized investments. 3.08.030 Sales of securities. 3.08.040 City bonds. 3.08.050 Reports. 3.08.060 Deposits of securities. 3.08.070 Trust fund administration. 3.08.010 Investment of city moneys and deposit of securities. Pursuant to, and in accordance with, and to the extent allowed by, Sections 53607 and 53608 of the Government Code, the authority to invest and reinvest moneys of the city, to sell or exchange securities, and to deposit them and provide for their safekeeping, is delegated to the city treasurer. (Ord. 2 § 1 (part), 1982) 3.08.020 Authorized investments. Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is authorized to purchase, at their original sale or after they have been issued, securities which are permissible investments under any provision of state law relating to the investing of general city funds, including but not limited to Sections 53601 and 53635 of the Government Code, as said sections now read or may hereafter be amended, from moneys in his custody which are not required for the immediate necessities of the city and as he may deem wise and expedient, and to sell or exchange for other eligible securities and reinvest the proceeds of the securities so purchased. (Ord. 2 § 1 (part), 1982) 3.08.030 Sales of Securities. From time to time the city treasurer shall sell the securities in which city moneys have been invested pursuant to this chapter, so that the proceeds may, as appropriate, be applied to the purchase for which the original purchase money may have been designated or placed in the city treasury. (Ord.2 § I (part), 3.08.040 City bonds. Bonds issued by the city and purchased pursuant to this chapter may be canceled either in satisfaction of sinking fund obligations or otherwise if proper and appropriate; provided, however, that the bonds may be held uncancelled and while so held may be resold. (Ord. 2 § 1 (part), 1982) 20 3.08.050 Reports. The city treasurer shall make a monthly report to the city council of all investments made pursuant to the authority delegated in this chapter. (Ord. 2 § 1 (part), 1982) 3.08.060 Deposits of securities. Pursuant to the delegation of authority in Section 3.08.010, .the city treasurer is authorized to deposit for safekeeping, the securities in which city moneys have been invested pursuant to this chapter, in any institution or depository authorized by the terms of any state law, including but not limited to Section 53608 of the Government Code as it now reads or may hereafter be amended. In accordance with said section, the city treasurer shall take from the institution or depository a receipt for the securities so deposited and shall not be responsible for the securities delivered to and receipted for by the institution or depository until they are withdrawn therefrom by the city treasurer. (Ord. 2 § 1 (part), 1982 3.08.070 Trust fund administration. Any departmental trust fund established by the city council pursuant to Section 36523 of the Government Code shall be administered by the city treasurer in accordance with Section 36523 and 26524 of the Government code and any other applicable provisions of law. (Ord. 2 § 1 (part), 1982) 21 Appendix D SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES Function Responsibilities Develop formal Investment Policy City Treasurer Recommend modifications to Investment Policy Investment Advisory Board Review formal Investment Policy and recommend City Manager and City Council action City Attorney Adopt formal Investment Policy City Council Review Financial Institutions & Select Investments City Treasurer Approve investments City Manager or Assistant City Manager Execute investment transactions City Manager or Treasurer Confirm wires, if applicable Accounting Manager or Financial Services Assistant Record investment transactions in City's Accounting Manager or accounting records Financial Services Assistant Investment verification - match broker confirmation City Treasurer and Financial to City investment records Services Assistant Reconcile investment records - to accounting records and bank statements Financial Services Assistant Reconcile investment records - to Treasurers Report of investments Accounting Manager Security of investments at City Vault Security of investments Outside City Third Party Custodian Review internal control procedures External Auditor 22 Appendix E LISTING OF APPROVED FINANCIAL INSTITUTIONS 1. Banking Services - Wells Fargo Bank, Government Services, Los Angeles, California 2. Custodian Services - Bank of New York, Los Angeles, California 3. Deferred Compensation - International City/County Management Association Retirement Corporation 4. Broker/Dealer Services - Merrill Lynch, Los Angeles, CA Morgan Stanley, 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 2002 RDA Project Area 1 — US Bank Assessment Districts — US Bank No Changes to this listing may be made without City Council approval 23 Appendix F BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION 1. Name of Firm: 2. Address: 0 4. Telephone: ( ) ( ) Broker's Representative to the City (attach resume): Name: Title: Telephone: ( ) 5. Manager/Partner-in-charge (attach resume) : Name: 7. Title: Telephone: List all personnel who will be trading with or quoting securities to City employees (attach resume) Name: Title: Telephone: ( ) ( 1 Which of the above personnel have read the City's Investment Policy? 8. Which instruments are offered regularly by your local office? (Must equal 100%) % U.S. Treasuries % BA's % Commercial Paper % C D's % Mutual Funds % Agencies (specify): 24 % Repos % Reverse Repos % CMO's % Derivatives • Stocks/Equities • Other (specify) : 9. References -- Please identify your most directly comparable public sector clients in our geographical area. Entity Contact Telephone Client Since Entity Contact Telephone Client Since 10. Have any of your clients ever sustained a loss on a securities transaction arising from a misunderstanding or misrepresentation of the risk characteristics of the instrument? If so, explain. 12. Has your firm or your local office ever been subject to a regulatory or state/ federal agency investigation for alleged improper, fraudulent, disreputable or unfair activities related to the sale of securities? Have any of your employees been so investigated? If so, explain. Has a client ever claimed in writing that yqu 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 PU Do you have any current or pending complaints that are unreported to the NASD? Yes No If yes, please provide action taken Does your firm have any current, or pending complaints that are unreported to the NASD? Yes No If yes, please provide action taken 13. Explain your clearing and safekeeping procedures, custody and delivery process. Who audits these fiduciary responsibilities? Latest Audit Report Date 14. How many and what percentage of your transactions failed. Last month? % $ Last year? % $ 15. Describe the method your firm would use to establish capital trading limits for the City of La Quinta. 16. Is your firm a member in the S.I.P.C. insurance program. Yes No If yes, explain primary and excess coverage and carriers. 17. What portfolio information, if any, do you require from your clients? 441' 18. What reports and transaction confirmations or any other research publications will the City receive? 19. Does your firm offer investment training to your clients? Yes No 20. Does your firm have professional liability insurance. Yes No If yes, please provide the insurance carrier, limits and expiration date. 21. 22. Please list your NASD Registration Number Do you have any relatives who work at the City of La Quinta? Yes No If yes, Name and Department 23. Do you maintain an office in California. Yes No 24. Do you maintain an office in La Quinta or Riverside County? Yes No 25. Please enclose the following: X Latest audited financial statements. X Samples of reports, transaction confirmations and any other research/publications the City will receive. X Samples of research reports and/or publications that your firm regularly provides to clients. X 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. 27 Under penalties of perjury, the responses to this questionnaire are true and accurate to the best of my knowledge. Broker Date_ Sales Date Representative Manager and/or Title Managing Title Partner* 28 Appendix G INVESTMENT POOL QUESTIONNAIRE Note: This Investment Pool Questionnaire was developed by the Government Finance Officers Association (GFOA). Prior to entering a pool, the following questions and issues should be considered. SECURITIES Government pools may invest in a broader range of securities than your entity invests in. It is important that you are aware of, and are comfortable with, the securities the pool buys. 1. Does the pool provide a written statement of Investment Policy and objectives? 2. Does the statement contain: a. A description of eligible investment instruments? b. The credit standards for investments? c. The allowable maturity range of investments? d. The maximum allowable dollar weighted average portfolio maturity? e. The limits of portfolio concentration permitted for each type of security? f. The policy on reverse repurchase agreements, options, short sales and futures? 3. Are changes in the policies communicated to the pool participants? 4. Does the pool contain only the types of securities that are permitted by your Investment Policy? INTEREST Interest is not reported in a standard format, so it is important that you know how interest is quoted, calculated and distributed so that you can make comparisons with other investment alternatives. Interest Calculations 1. Does the pool disclose the following about yield calculations: a. The methodology used to calculate interest? (Simple maturity, yield to maturity, etc.) b. The frequency of interest payments? c. How interest is paid? (Credited to principal at the end of the month, each quarter; mailed?) d. How are gains/losses reported? Factored monthly or only when realized? 29 REPORTING 1. Is the yield reported to participants of the pool monthly? (If not, how often?) 2. Are expenses of the pool deducted before quoting the yield? 3. Is the yield generally in line with the market yields for securities in which you usually invest? 4. How often does the pool report, and does that report include the market value of securities? SECURITY The following questions are designed to help you safeguard your funds from loss of principal and loss of market value. 1. Does the pool disclose safekeeping practices? 2. Is the pool subject to audit by an independent auditor? 3. Is a copy of the audit report available to participants? 4. Who makes the portfolio decisions? 5. How does the manager monitor the credit risk of the securities in the pool? 6. Is the pool monitored by someone on the board of a separate neutral party external to the investment function to ensure compliance with written policies? 7. Does the pool have specific policies with regards to the various investment vehicles? a. What are the different investment alternatives? b. What are the policies for each type of investment? 8. Does the pool mark the portfolio to its market value? 9. Does the pool disclose the following about how,portfolio securities are valued: a. The frequency with which the portfolio securities are valued? b. The method used to value the portfolio (cost, current value, or some other method)? 30 OPERA TIONS The answers to these questions will help you determine whether this pool meets your operational requirements: 1. Does the pool limit eligible participants? 2. What entities are permitted to invest in the pool? 3. Does the pool allow multiple accounts and sub -accounts? 4. Is there a minimum or maximum account size? 5. Does the pool limit the number of transactions each month? What is the number of transactions permitted each month? 6. Is there a limit on transaction amounts for withdrawals and deposits? a. What is the minimum and maximum withdrawal amount permitted? b. What is the minimum and maximum deposit amount permitted? 7. How much notice is required for withdrawals/deposits? 8. What is the cutoff time for deposits and withdrawals? 9. Can withdrawals be denied? 10. Are the funds 100% withdrawable at anytime? 11. What are the procedures for making deposits and withdrawals? a. What is the paperwork required, if any? b. What is the wiring process? 12. Can an account remain open with a zero balance? 13. Are confirmations sent following each transaction? STA TEMENTS It is important for you and the agency's trustee (when applicable), to receive statements monthly so the pool's records of your activity and holding are reconciled by you and your trustee. 31 1. Are statements for each account sent to participants? a. What are the fees? b. How often are they passed? c. How are they paid? d. Are there additional fees for wiring funds (what is the fee)? 2. Are expenses deducted before quoting the yield? QUESTIONS TO CONSIDER FOR BOND PROCEEDS It is important to know (1) whether the pool accepts bond proceeds and (2) whether the pool qualifies with the U.S. Department of the Treasury as an acceptable commingled fund for arbitrage purposes. 1. Does the pool accept bond proceeds subject to arbitrage rebate? 2. Does the pool provide accounting and investment records suitable for proceeds of bond issuance subject to arbitrage rebate? 3. Will the yield calculation reported by the pool be acceptable to the IRS or will it have to be recalculated? 4. Will the pool accept transaction instructions from a trustee? 5. Are you allowed to have separate accounts for each bond issue so that you do not commingle the interest earnings of funds subject to rebate with funds not subject to regulations? 32 Appendix H GLOSSARY (Adopted from the Municipal Treasurers Association) The purpose of this glossary is to provide the reader of the City of La Quinta investment policies with a better understanding of financial terms used in municipal investing. AGENCIES: Federal agency securities and/or Government -sponsored enterprises. ASKED: The price at which securities are offered. BANKERS' ACCEPTANCE (BA): A draft or bill of exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.) See Offer. BROKER: A broker brings buyers and sellers together for a commission. CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large -denomination CD's are typically negotiable. COLLATERAL: Securities, evidence of deposit or other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. COMMERCIAL PAPER: Short-term unsecured promissory notes issued by a corporation to raise working capital. These negotiable instruments are purchased at a discount to par value or at par value with interest bearing. Commercial paper is issued by corporations such as General Motors Acceptance Corporation, IBM, Bank America, etc. COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the City of La Quinta. It includes five combined statements 33 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. CONDUIT FINANCING: A form of Financing in which a government or a government agency lends its name to a bond issue, although it is acting only as a conduit between a specific project and bond holders. The bond holders can look only to the revenues from the project being financed for repayment and not to the government or agency whose name appears on the bond. COUPON: (a) The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value. (b) A certificate attached to a bond evidencing interest due on a payment date. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities. DERIVATIVES: (1) Financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index or security, and may include a leveraging factor, or (2) financial contracts based upon notional amounts whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities or commodities). DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount. DISCOUNT SECURITIES: Non -interest bearing money market instruments that are issued a discount and redeemed at maturity for full face value, e.g., U.S. Treasury Bills. DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. are issued with maturities of less than one year and interest is paid at maturity. 3. FLBs (Federal Land Bank Bonds) - Long-term mortgage credit provided to farmers by Federal Land Banks. These bonds are issued at irregular times for various maturities ranging from a few months to ten years. The minimum denomination is $1,000. They carry semi-annual coupons. Interest is calculated on a 360-day, 30 day month basis. 4. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, 5. e.g., S&L's, small business firms, students, farmers, farm cooperatives, and exporters. 1. FNMAs (Federal National Mortgagee 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 34 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. 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. Morgages are purchased solely from the Federal home Loan Bank System member lending institutions whose deposits are insured by agencies of the United States Government. They are issued for various maturities and in minimum denominations of $10,000. Principal and Interest is paid monthly. Other federal agency issues are Small Business Administration notes (SBAs), Government National Mortgage Association notes (GNMAs), Tennessee Valley Authority notes (TVAs), and Student Loan Association notes (SALLIE-MAEs). FEDERAL DEPOSITOR INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits, currently up to $100,000 per deposit. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open -market operations. FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLBs is to liquefy the housing related assets of its members who must purchase stock in their district Bank. FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money. FEDERAL RESERVE SYSTEM: The central bank of the. United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. 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, 35 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 "passthrough" 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, bander' 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 and depositions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC) -registered securities broker -dealers, banks and a few unregulated firms. QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the 36 commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return. REPURCHASE AGREEMENT (RP OR REPO): A repurchase agreement is a short-term investment transaction. Banks buy temporarily idle funds from a customer by selling U.S. Government or other securities with a contractual agreement to repurchase the same securities on a future date. Repurchase agreements are typically for one to ten days in maturity. The customer receives interest from the bank. The interest rate reflects both the prevailing demand for Federal funds and the maturity of the repo. Some banks will execute repurchase agreements for a minimum of $100,000 to $500,000, but most banks have a minimum of $1,000,000. REVERSE REPURCHASE AGREEMENTS (RRP or RevRepo) - A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RRP extensively to finance their positions. Exception: When the Fed is said to be doing RRP, it is lending money that is increasing bank reserves. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection. SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following the initial distribution. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. SEC RULE 15C3-1: See Uniform Net Capital Rule. STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMAS, SLMA, etc.) And Corporations which have imbedded options (e.g., call features, step- up coupons, floating rate coupons, derivative - based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the Shape of the yield curve. SURPLUS FUNDS: Section 53601 of the California Government Code defines surplus funds as any money not required for immediate necessities of the local agency. The City has defined immediate necessities to be payment due within one week. TREASURY BILLS: A non -interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months or one year. TREASURY BONDS: Long-term coupon -bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years. TREASURY NOTES: Medium -term coupon -bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker -dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. 37 Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. UNIFORM PRUDENT INVESTOR ACT: The State of California has adopted this Act. The Act contains the following sections: duty of care, diversification, review of assets, costs, compliance determinations, delegation of investments, terms of prudent investor rule, and application. YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par of plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. INVESTMENT ADVISORY BOARD Business Session: C Meeting Date: March 10, 2004 TITLE: California Municipal Treasurer's Conference - South Lake Tahoe, CA April 21 - 23, 2003 BACKGROUND: Each year the City budgets funds for the Treasurer and two Investment Advisory Board members to attend the Treasurers Conference. Staff is requesting the names of those interested in attending be given at the Investment Advisory Board Meeting on the 10' so that registration materials may be turned in by the 12th for early registration. RECOMMENDATION: Select up to two Board members to attend the Treasurer's Conference. olhn M. Falcon4r, Finance Director Name (Please print or Type) Mailing Address CALIFORNIA. MUNICIPAL TREASURER'S ASSOCIATION Conference Registration Form Embassy Suites Hotel — Lake Tahoe Resort April 19 — 20, 2004 Pre -Conference April 21— April 23, 2004 Conference You must be a current C ITA Member (Active/Government Associate/Sustammg) to register. If you need to verify that your membership is current, please contact Frances Medema at CMTA's Sacramento office at (916) 658-8209. If you have any questions regarding conference registration, call Mike Reynolds at the City of Redlands at (909) 798 7544. Please use a separate form for each registrant (photocopies accepted). ('Phis form is not valid for Commercial Associate members.) Title Carty vrgarnzauvn Phone Fax E-Mail Address &,IF Name you prefer on Badge apouwu uest. !''A"`G U this your first CMTA Conference? .--- (yes or no) Special dietary needs? -(yes or no) will you be attending the Thursday evening Banquet? _ (yes or no) Registration Fees Pre -Conference Seminar [Active or Government Associates] Pre -conference Seminar only Pre -Conference Seminar if also attending conference Conference Active or Government Associate Includes all meals, receptions & Thursday Bwu Second registrant from same organization Includes all meals, raxptions & Thursday Installstian Banquet $ 125.00 S 115.00 Postmarked Early (on or before 3/121/04) $ 265.00 Regular (on or before 4/02/04) $ 290.00 Late (after 4/02/04) $ 350.00 Early (on or before 3/12/04) S 235.00 Regular (on or before 4/02/04) $ 260.00 Late (after 4/02/04) $ 350.00 Daily Conference Registration ❑ Wednesday ❑ Thursday Daily Rate x S 150.00 Available only if another person from your same agency has paid full conference registration Includes breakfast & lunch only Additional Meals Spouses & Guests Wednesday Lunch Thursday Lunch Thursday Banquet X S 35.00 $ X $ 35.00 $ X $ 75.00 $ Total Fees $- Please make checks payable to "CMTA 2004 Conference". Mail to: Michael Reynolds, City Treasurer, P.O. Box 3005, Redlands, CA 92373- 1505.(A pee`- &kwsed envelope has been included for your convenience.) Advance registrants unable to attend may receive a refund of the registration fee less $25.00 processing fee by submitting a written request to CMTA at the same address or fax (909) 792-6623 by April9,, 1004. No refunds win be made if requested after that date. Substitute attendees will be accepted at any time. 2 CMTA 2004 ANNUAL CONFERENCE Draft Program Wednesday, April 21, 2004 Reaching New Heights Early Risers Personal Balance Basketball 6:15 am In hotel lobby Morning Walk 6:30 am in hotel lobby 7:00 - 8:45 AM Breakfast (hotel) 8:45 - 9:00 AM Opening Session - Welcome 9:15 - 10:30 AM Reaching New Heights Speaker: Scott Freidman, Speaker and Author 10:30 -10:40 AM Break 10:40 - 11:20 AM Business Session 11:20 -11:50 AM Certification Awards 12:00 -12:45 PM Luncheon - Atrium 1:00 -1:45 PM Relax and Enjoy Speaker: Donny Conn, Professor of Communications 1:45 - 2:00 PM Break 2:00 - 3:00 PM Banking Services -What Is Available And How To Decide What Your City Needs? Speakers: Tisha Mar, Wells Fargo Bank Scott Shannon, U.S. Bank Carol Donlon, Union Bank of California 3:00 - 3:15 PM Break 3:15 - 4:00 PM LAIF- What You Need To Know Speakers: Bill Sherwood, State Treasurer's Office Eileen Park, State Treasurer's Office 4:00 - 4:15 PM Break 4:15 - 5:00 PM Concurrent Sessions: • CD/AC-Legal Investments • CALPERS 6:00 - 7:00 PM Reception 7:00 PM Free Evening 3 2004 CMTA Conference Draft Program Thursday, April 22, 2004 Reaching New Heights Early Risers Personal Balance Basketball 6:15 am In hotel lobby Morning Walk 6:30 am In hotel lobby 7:30 - 9:00 AM Breakfast Round Tables (hotel) 9:00 -10:00 AM Fixed Income Investments -What Is It And How Does It Fit Into My Investment Strategy? Speakers: Harvey Zabinski, Bank One Doug Fowler, Bank of the West 10:00 -10.15 AM Break 10:15 -11:15 AM Managing the City's Money -What Outsourcing Has to Offer Speakers: Kay Chandler, Chandler Asset Management Thomas Moore, U.S. Bancorp 1.1:30 AM -12:15 PM LUNCHEON 12:30 -1:30 PM Ethics - What's It All About? Speaker: Will Randolph, County Administrative Officers Association of California 1:30 -1:45 PM 1:45 - 2.00 PM 2:00 - 3:00 PM 3:00 - 3:15 PM Conference Sponsor Recognition Golf Awards Break Concurrent Sessions: • Trust & Custody -How to Evaluate Services Speaker: Frank Sulzberger, BNY Western 'Trust Co. Andy Jeremi, Union Bank of California Stuart Weiss, Wells Fargo Bank • Underwriting versus Financial Advisors -What Makes a Good Fit Speakers: Tim Shaeffer, Fieldman, Rolapp and Associates Nicole Tallman, Brandis Tallman, LLC • Investment Advisor -What do I need Speakers: David Lampert, Eureka Investments Michael Heflin, FTN Financial Break 4 3:15 - 4:15 PM Concurrent Session • Nuts & Bolts - Government Associates o Moderator: Michael Reynolds, CCMT, City of Redlands • Nuts & Bolts - Commercial Associates o Moderator: Camee Lewis, Commercial Associate Liaison, Wells Fargo 4:15 - 5:00 PM Nuts & Bolts Wrap-up - Combined First Vendor Passport Drawing (must be present to win) 5:45 - 6:15 PM Photo Session for Board and Certification Awardees 6:15 - 7:00 PM President's Reception 7:00 PM Dinner on the Ponderosa 8:00 PM Installation 8:30 AM - Midnight Foot Stomping Boogle???? 5 2004 CMTA Conference Draft Program Friday, April 23, 2004 Reachina New Heights Early Risers Personal Balance Basketball 6:15 am In hotel lobby Morning Walk 6:30 am In hotel lobby 8:00 - 9:00 AM Continental Breakfast (hotel) 9:00 -10:00 AM Retirement and Deferred Compensation -How to be Prepared Speaker: Marilyn Collister, Great West Retirement Services 10:00 - 10:15 AM Break 10:15 -11:30 AM State Budget 2004-05: More of the Same? Vendor Passport Drawing at Conclusion of Session (Must be present to win) 11:45 AM -1:00 PM Board Meeting (For CMTA Officers and Board Members) C.1 INVESTMENT ADVISORY BOARD Correspondence & Written Material Item A Meeting Date: March 10, 2004 TITLE: Month End Cash Report February 2004 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. Staff was unable to complete the monthly budget vs. actual report for January before the agenda was sent. This report will be distributed at the meeting. RECOMMENDATION: Information item only. John M. Falconer, Finance Director 8 LL m .. �....-. e� �1ne�--NCep 0888 O O ti W 17 O O ppppm83NCNpppppp 88800. NOet0000 r- o R631,14 g N F. N^ O C C m ow M m C O C ^ c o 0 0 0 0 �" ch tG N .N..Vv� V- V y CO N N u'f N � E m m m ppppmtC�}}NN_ pppppp 60� S 0 0 0St O O O� 9 C M Ot70 �p OCOCO �c~Mln�� _ m m m �- crj t0 Go q Ln co q Go q Lo $$ co LL �g 4 to Lq t0 tD tC tG m g m m 88 m g 8 $act $ N N N N N N etm co CR CR tb c LL y C co N co N co N co N N C Qto�� t0 Q ^ N •- p Orj ap r' CQO. r- Cj Epp m y U OOP ��pNpO`j ° mNNcr)�N cM oMp to Go v v v IA v 9m C C � � y �' TO 2 N to g y ti W 2RE N Rf co I m t0 W O a t�c°a th .r i m i C m C pyo N N N� H 12 a ��' -- Hm�EE� am12 �-''m mY LL w as a �.a'�a... > w tea' noz ou����� C.) N S �qp pNp O m E N � g LO N � O O 0 t0 > Q N C CL C y g .p NN C O G +r C g w E A. °LL �� �► a y m� gV O � tlj eVVQ � C C ate' v.. m aLO y C y C CW L O y 'r3 E C y m m L� 3� cm es x E C C w N N m Ca 41 u F� > 4S to N ��� 2 Phil Angelides, State Treasurer Inside the State Treasurers Office Local Agency Investment Fund (LAIF) PMIA Performance Report 02�M2004 10.49 P10.52F17P2 2/ 13/2004 1.49 1.52 169 2/14/2004 1.49 1.52 169 2/15/2004 1.49 1.52 169 2/ 1612004 1.49 1.52 169 2/17/2004 1.49 1.52 165 2/18/2004 1.49 1.52 166 2/19/2004 1.49 1.52 166 2/20/2004 1.49 1.52 176 2/21 /2004 1.49 1.51 176 2/22/2004 1.49 1.51 176 2/23/2004 1.49 1.51 173 2/24/2004 1.48 1.51 170 2/25/2004 1.47 1.49 167 Corporate Bonds 3.40% Commercial Paper 16.53% Time Deposits 10.86% 0 LAW Performance Report Quarter Ending 12/31/03 Apportionment Rate: 1.56% Earnings Ratio: .00004271146380458 Fair Value Factor: 1.000591479 PMIA Average Monthly Effective Yields November 2003 1.572% December 2003 1.545% January 2004 1.528% Pooled Money Investment Account Portfolio Composition $53.9 Billion 01/31/04 Loans 10.84% CD's/BN's 15.07% Treasuries 16.19% Mortgages 0.01 % Agencies 27.10% ■ Treasuries 0 Mortgages M Agencies ■ CD's/BN's Time Deposits ■ Bankers Acceptances ■ Repo ■ Commercial Paper Corporate Bonds Loans ■ Reverses FRB: H.15--Selected Interested Rates, Web -Only Daily Update --February 26, 2004 Page 1 of 4 Federal Reserve Statistical Release Hr15 Selected Interest Rates (Daily) Skip to Content Release Date: February 26, 2004 Weekly release dates and announcements I Historical data I About Daily update Other formats: Screen reader I ASCII The weekly release is posted on Monday. Daily updates of the,weekly release are posted Tuesday through Friday H.15 DAILY UPDATE: WEB RELEASE ONLY For immediate release SELECTED INTEREST RATES February 26, 2004 Yields in percent per annum Instruments Federal funds (.effective) 1 2 3 Commercial paper 3 4 5 Nonfinancial 1-month 2-month 3-month Financial 1-month . 2-month 3-month CDs (secondary market) 3 6 1-month 3-month 6-month Eurodollar deposits (London) 3 7 1-month 3-month 6-month Bank prime loan 2 3 8 Discount window primary credit 2 9 U.S. government securities Treasury bills (secondary market) 3 4 4-week 3-month 6-month Treasury constant maturities Nominal 10 1-month 3-month 6-month 1-year 2-year 3-year 5-year 7-year 10-year 2004 2004 2004 Feb Feb Feb 23 24 25 1.00 0.99 1.02 1.02 1.00 0.99 1.00 1.00 1.02 1.01 1.01 1.02 1.02 1.03 1.04 1.04 1.03 1.03 1.03 1.03 1.05 1.05 1.05 1.11 1.10 1.09 1.02 1.02 1.02 1.03 1.03 1.04 1.09 1.08 1.08 4.00 4.00 4.00 2.00 2.00 2.00 0.93 0.95 0.94 0.95 0.95 0.94 1.00 1.00 1.00 0.95 0.97 0.96 0.97 0.97 0.96 1.02 1.02 1.02 1.22 1.23 1.23 1.69 1.69 1.67 2.21 2.20 2.16 3.03 3.01 2.98 3.55 3.53 3.51 4.05 4.04 4.02 2004 Feb 26 http://www.federalreserve.gov/Releases/H 15%update/ 4 2/27/2004 FRB: H. I 5--Selected Interested Rates, Web -Only Daily Update --February 26, 2004 Page 2 of 4 20-year 4.92 4.90 4.89 Inflation -indexed 11 5-year 0.80 0.78 0.74 7-year 1.28 1.26 1.22 10-year 1.76 1.74 1.71 Treasury long-term average Nominal 12 13 5.03 4.96 4.94 Inflation -indexed 14 2.17 2.14 2.12 Interest rate swaps 15 1-year. 1.40 1.36 1.37 2-year 2.05 1.98 1.98 3-year 2.63 2.55 2.55 4-year 3.09 3.00 3.00 5-year 3.46 3.36 3.37 7-year 3.98 3.89 3.90 10-year 4.48 4.39 4.41 30-year 5.26 5.20 5.21 Corporate bonds Moody's seasoned Aaa 16 5.49 5.47 5.46 Baa 6.25 6.23 6.23 State & local bonds 17 Conventional mortgages 18 See overleaf for footnotes FOOTNOTES 1. The daily effective federal funds rate is a weighted average of rates on brokered trades. 2. Weekly figures are averages bf 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). 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 (www.federalreserve.gov/releases/cp). 6. An average of dealer offering rates on nationally traded certificates of deposit. 7. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. 8. 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. 9. The rate charged for discounts made and advances extended under the Federal Reserve's primary credit discount window program, which became effective January 9, 2003. This rate replaces that for adjustment credit, which was discontinued after January 8, 2003. For further information, see h://www.federalreserve.gov/Releases/HI5/update/ 2/2A004 FRB: H.15--Selected Interested Rates, Web -Only Daily Update --February 26, 2004 Page 3 of 4 www.federalreserve.gov/boarddocs/press/bcreg/2002/200210312/default.htm. The rate reported is that for the Federal Reserve Bank of New York. Historical series for the rate on adjustment credit is available at www.federalreserve.gov/releases/hl5/data.htm. 10. Yields on actively traded non -inflation -index issues adjusted to constant maturities. Source: U.S. Treasury. 11. Yields on Treasury inflation protected securities (TIPS) adjusted to constant maturities. Source: U.S. Treasury. Additional information on both nominal and inflation -indexed yields may be found at www.treas.gov/offices/domestic-finance/debt-management/interest-rate/index.html. 12. Based on the unweighted average of the bid yields for all non -inflation -index 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 www.treas.gov/offices/domestic-finance/debt-management/interest-rate/ltcompositeindex 14. Based on the unweighted average bid yields for all Inflation Protected Securities with remaining terms to maturity of more than 10 years. 15. International Swaps and Derivatives Association (ISDA) mid -market par swap rates. Rates are for a Fixed Rate Payer in return for receiving three month LIBOR, and are based on rates collected at 11:00 a.m. by Garban Intercapital plc and published on Reuters Page ISDAFIXI. Source: Reuters,Limited. 16. 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. 17. Bond Buyer Index, general obligation, 20 years to maturity, mixed quality; Thursday quotations. 18. Contract interest rates on commitments for fixed-rate first mortgages. Source: FHLMC. DESCRIPTION OF THE TREASURY NOMINAL AND INFLATION -INDEXED CONSTANT MATURITY SERIES Yields on Treasury nominal securities at "constant maturity" are interpolated by the U.S. Treasury from the daily yield curve for non -inflation -indexed Treasury securities. 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. Similarly, yields on inflation -indexed securities at "constant maturity" are interpolated from the daily yield curve for Treasury inflation protected securities in the over-the-counter market. The inflation -indexed constant maturity yields are read from this yield curve at fixed maturities, currently 5, 7, and 10 years. Weekly release dates and announcements I Historical data I About Daily update Other formats: Screen reader I ASCII Statistical releases h ://www.federalreserve. ov/Releases/H15/update/ 2/27/2004 tiP g FRB: H.15--Selected Interested Rates, Web -Only Daily Update --February 26, 2004 Page 4 of 4 Home I Economic research and data Accessibility ( Contact Us Last update: February 26, 2004 http://www.federalreserve.gov/Releases/H 1 5/update/ 2/2772004 FRB:Commercial Paper Rates and Outstandings Pagel of 3 Release I About Outstandings I Historical discount rates I Historical outstandings Data as of February 26, 2004 Commercial Paper Rates and Outstandings Derived from data supplied by The Depository Trust Company Trade data insufficient to support calculation of the 90-day AA nonfinancial rate for February 26, 2004. Posted February 27, 2004 Discount rates AA AA A2/P2 Term financial nonfinancial nonfinancial Yield curve Money market basis 1 7 15 30 60 Dons b matun'tY Finandal — — — Manfinandal ••••• A2/1`2 Percent 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 h ://www.federalreserve.g ov/Releases/CP/ 2/27/2004 � I I FRB:Commercial Paper Rates and Outstandings Page 2 of 3 Discount rate spread Thirty -day A2/P2 less AA nonfinancial commercial paper (daily) Basis points 110 1 OD 90 so 70 so i 50 40 20 10 0 01JUL01 01 JAN02 01JUL02 01 JAN03 01JUL03 01 JAN04 01 JUL04 A2,4�2 3p-ead — A2/P2 spr+eod. 5—day moving average Discount rate history Thirty -day commercial paper (daily) -- ■ 01 J UL01 01 JAN02 01 JUL4Z 41 Jf ,s VIJULVO _ Financial — -- Nonfinancial ••• •• A2/P2 Outstandings Weekly (Wednesday), seasonally adjusted Billions of dollars Percent -1 S .4 3 2 1 f 0 01 JAM4 01 JU L04 Billions of dollars http://www.federalreserve.gov/Releases/CP/ , 9 2/27/2004 FRB:Commercial Paper Rates and Outstandings Page 3 of 3 1240 1230 1220 1210 1200 1190 1180 1170 1160 1150 250 240 230 220 210 200 190 180 170 160 150 140 130 120 110 100 01 JUL01 01 4AM2 01 JU L02 01 JAN03 01 JU L03 01 JAN04 01 JU L04 W Financial — — — Nanfinand of 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 pager outstanding,, miscellaneous categories Volume Statistics 2003:04 Release I About I Outstandings I Historical discount rates I Historical outstandings Home I Statistical releases Accessibilitvl Contact Us Last update: February 27, 2004 http://www.federalreserve.gov/Releases/CP/ 2/23/2004 INVESTMENT ADVISORY BOARD Meeting Date: TITLE: March 10, 2004 Correspondence & Written Material Item B Pooled Money Investment Board Report for December 2003 BACKGROUND: The Pooled Money Investment Board Report for December 2003 is included in the agenda packet. This report is available on-line at www.treasurer.ca.gov. RECOMMENDATION: Receive & File F, rm-071 f M. Falconer, Vinance Director Philip Angell*des December 2003 STATE OF CALIFORNIA STATE TREASURER'S OFFICE POOLED MONEY INVESTMENT BOARD REPORT DECEMBER 2003 SUMMARY................................................................. 01 SELECTED INVESTMENT DATA .................................... 02 PORTFOLIO COMPOSITION ........................................ 03 INVESTMENT TRANSACTIONS ..................................... 04 TIME DEPOSITS........................................................ 15 BANK DEMAND DEPOSITS .......................................... 29 POOLED MONEY INVESTMENT BOARD DESIGNATION... 30 POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF DECEMBER 2003 WITH DECEMBER 2002 (DOLLARS IN THOUSANDS) Effective Yield 1.545 2.201 -0.656 Average Life -Month End (In Days) 189 202 -13 I Total Security Transactions Amount $ 16,171,395 $ 20,681,724 $ -4,510,329 Number 344 439 -96 Total Time Deposit Transactions Amount $ 1,818,500 $ 1,977,500 $ -159,000 Number 109 100 +9 Average Workday Investment Activity $ 817,722 $ 1,079,011 $ -261,289 Prescribed Demand Account Balances For Services $ 1,306,110 $ 861,486 $ +444,624 For Uncollected Funds $ 164,710 $ 141,786 +22,924 1 PHILIP ANGELIDES TREASURER STATE OF CALIFORNIA INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED) December 31, 2003 DIFFERENCE iN PERCENT OF PERCENT OF PORTFOLIO FROM TYPE OF SECURITY AMOUNT PORTFOLIO PRIOR MONTH Government Bills $ 796,185 1.49 -0.77 Bonds 0 0.00 0.00 Notes 7,568,801 14.10 -0.23 Strips 0 0.00 0.00 Total Government $ 8,364,986 15.59 -1.00 Federal Agency Coupons $ 4,035,090 7.62 -0.84 Certificates of Deposit 6,776,031 12.62 -1.37 Bank Notes 799,989 1.49 +0.45 Bankers' Acceptances 0 0.00 0.00 Repurchases 0 0.00 0.00 Federal Agency Discount Notes 10,790,231 20.11 +2.86 Time Deposits 6,750,095 10.71 -0.04 GNMAs 609 0.00 0.00 Commercial Paper 9,737,363 18.14 +0.51 FHLMC 3,925 0.01 0.00 Corporate Bonds 1,947,000 3.63 -0.17 Pooled Loans 6,461,928 10.18 -0.40 GF Loans 0 0.00 0.00 Reversed Repurchases 0 0.00 0.00 Total (All Types) $ 63,666,147 100.00 INVESTMENT ACTIVITY Pooled Money Other Time Deposits Totals PMIA Monthly Average Effective Yield Year to Date Yield Last Day of Month DECEMBER 2003 NUMBER AMOUNT 344 $ 16,171,395 30 410,418 109 1,818,500 483 $ 18,400,313 ilF!'11 1.605 K NOVEMBER 2003 NUMBER AMOUNT 322 $ 14,997,081 24 184,548 69 1,616,800 415 $ 16,798,429 1.572 1.617 Corr Bc 3.E Commercial Paper 18.14% TirY Pooled Money Investment Account 12/31/03 Portfolio Composition $53.6 Billion Loans Treasuries 10.18% 15.59% CD's/BN's 14.11% 3 )rtgages 0.01 % mcies .63% ■ Treasuries Mortgages a Agencies M CD's/BN's ❑ Time Deposits m Bankers Acceptances ■ Repo Commercial Paper ® Corporate Bonds ❑ Loans Reverses 1 12/01/03 REDEMPTIONS CD CR AGRIC 1.020% 12/01/03 1.020 15,000 143 60,775.00 1.034 CD CR AGRIC 1.020% 12/01/03 1.020 50,000 143 202,583.33 1.034 CP CITICORP 12/01/03 1.050 50,000 6 8,750.00 1.065 CP CITICORP 12/01/03 1.050 50,000 6 8,750.00 1.065 CP CITICORP 12/01/03 1.050 50,000 6 8,750.00 1.065 CP CITICORP 12/01/03 1.050 50,000 6 8,750.00 1.065 CP W/F 12/01/03 1.000 50,000 11 15,277.78 1.014 CP FMCC 12/01/03 1.290 30,000 60 64,500.00 1.311 CP FMCC 12/01/03 1.290 50,000 61 109,291.67 1.311 CP FMCC 12/01/03 1.290 50,000 61 109,291.67 1.311 CP GMAC 12/01/03 1.310 50,000 62 112,805.56 1.331 CP GMAC 12/01/03 1.310 50,000 62 112,805.56 1.331 CP CITIGLOBAL 12/01/03 1.050 50,000 62 90,416.66 1.067 CP CITIGLOBAL 12/01/03 1.050 50,000 62 90,416.66 1.067 CP CITICORP 12/01/03 1.080 30,000 90 81,000.00 1.098 CP CITICORP 12/01/03 1.080 50,000 90 135,000.00 1.098 CP CITICORP 12/01/03 1.080 50,000 90 135,000.00 1.098 CP CITICORP 12/01/03 1.080 50,000 90 135,000.00 1.098 CP FCAR 12/01/03 1.020 37,000 147 154,105.00 1.038 MTN DISNEY 5.250% 12/01/03 6.700 10,000 1155 2,069,341.67 6.818 12/01/03 NO PURCHASES 12/02/03 REDEMPTIONS CP GMAC 12/02/03 1.310 20,000 61 44, 394.44 1.331 CP GE CO 12/02/03 1.050 50,000 62 90,416.67 1.067 CP GE CO 12/02/03 1.050 50,000 62 90,416.67 1.067 CP GE CO 12/02/03 1.050 50,000 62 90,416.67 1.067 CP GE CO 12/02/03 1.050 50,000 62 90,416.67 1.067 CP CITI GLOBAL 12/02/03 1.050 50,000 63 91,875.00 1.069 CP CITI GLOBAL 12/02/03 1.050 50,000 63 91,875.00 1.069 CP GMAC 12/02/03 1.310 50,000 63 114,625.00 1.331 CP FMCC 12/02/03 1.290 50,000 67 120,041.67 1.311 CP FMCC 12/02/03 1.290 50,000 67 120,041.67 1.311 CP SRAC 12/02/03 1.300 50,000 68 122,777.78 1.321 CP CITI GLOBAL 12/02/03 1.060 50,000 69 101,583.33 1.077 CP CITI GLOBAL 12/02/03 1.060 50,000 69 101,583.33 1.077 CP CITI GLOBAL 12/02/03 1.060 50,000 75 110,416.67 1.077 CP CITI GLOBAL 12/02/03 1.060 50,000 75 110,416.67 1.077 CP FCAR 12/02/03 1.080 50,000 90 135,000.00 1.098 CP GECC 12/02/03 1.080 10,000 106 31,800.00 1.098 CP GECC 12/02/03 1.080 50,000 106 159,000.00 1.098 CP HOUSEHOLD 12/02/03 1.080 50,000 120 180,000.00 1.099 CP HOUSEHOLD 12/02/03 1.080 50,000 120 180,000.00 1.099 CP FCAR 12/02/03 1.020 4,000 147 16,660.00 1.038 CP FCAR 12/02/03 1.020 50,000 147 208,250.00 1.038 CP FCAR 12/02/03 1.020 50,000 147 208,250.00 1.038 4 12/02/03 PURCHASES CD CD CID CID CID WASHINGTON 1.210% 06/16/04 1.210 50,000 WASHINGTON 1.210% 06/16/04 1.210 50,000 GMAC 02/18/04 1.380 50,000 GMAC 02/18/04 1.380 50,000 GMAC 02/18/04 1.380 50,000 12/03/03 REDEMPTIONS DISC NOTES FNMA 12/03/03 PURCHASES CD UBS DISC NOTES FNMA DISC NOTES FNMA DISC NOTES FNMA DISC NOTES FNMA 12/04/03 NO REDEMPTIONS 12/04/03 PURCHASES BN WORLD BN WORLD BN WORLD 12/06/03 NO REDEMPTIONS 12/06/03 NO PURCHASES 12/08/03 REDEMPTIONS 12/03/03 1.050 50,000 180 262,500.00 1.070 1.200% 06/30/04 06/30/04 06/30/04 06/30/04 06/30/04 1.060% 01 /02/04 1.060% 01/02/04 1.060% 01 /02/04 1.190 50,000 1.190 50,000 1.190 50,000 1.190 50,000 1.190 50,000 1.080 50,000 1.080 50,000 1.080 50,000 CD WASHINGTON 1.100% 12/08/03 1.100 50,000 82 125,296.87 1.115 CD WASHINGTON 1.090% 12/08/03 1.090 50,000 125 189,236.11 1.105 CD WASHINGTON 1.090% 12/08/03 1.090 50,000 125 189,236.11 1.105 CD WASHINGTON 1.090% 12/08/03 1.090 50,000 125 189,236.11 1.105 CID ASCC 12/08/03 1.040 25,000 17 12,277.78 1.055 CID GE CO 12/08/03 1.040 50,000 18 26,000.00 1.058 CID GE CO 12/08/03 1.040 50,000 18 26,000.00 1.058 CID GE CO 12/08/03 1.040 50,000 18 26,000.00 1.058 CID GE CO 12/08/03 1.040 50,000 18 26,000.00 1.058 CID GECC 12/08/03 1.040 50,000 18 26,000.00 1.058 CID GECC 12/08/03 1.040 50,000 18 26,000.00 1.058 CID GECC 12/08/03 1.040 50,000 18 26,000.00 1.058 CID CITI GLOBAL 12/08/03 1.060 50,000 75 110,416.66 1.077 CID CITI GLOBAL 12/08/03 1.060 50,000 75 110,416.66 1.077 CID HOUSEHOLD 12/08/03 1.080 25,000 126 94,500.00 1.099 CP HOUSEHOLD 12/08/03 1.080 50,000 126 189,000.00 1.099 5 12/08/03 PURCHASES CD NOVA SCOT 1.110% 06/16/04 1.110 50,000 CD NOVA SCOT 1.110% 06/16/04 1.110 50,000 CD RB SCOT 1.140% 06/16/04 1.140 50,000 CD RB SCOT 1.140% 06/16/04 1.140 50,000 DISC NOTES FNMA 06/28/04 1.130 50,000 DISC NOTES FNMA 06/30/04 1.130 50,000 DISC NOTES FNMA 06/30/04 1.130 50,000 DISC NOTES FNMA 06/30/04 1.130 50,000 DISC NOTES FNMA 06/30/04 1.130 50,000 DISC NOTES FNMA 06/30/04 1.130 50,000 DISC NOTES FNMA 06/30/04 1.130 50,000 12/09/03 REDEMPTIONS CID ASCC 12/09/03 1.040 25,000 15 10,833.33 1.055 CID CITI GLOBAL 12/09/03 1.030 50,000 15 21,458.34 1.045 CID CITI GLOBAL 12/09/03 1.030 50,000 15 21,458.34 1.045 CID SRAC 12/09/03 1.300 50,000 55 99,305.56 1.321 12/09/03 NO PURCHASES 12/10/03 REDEMPTIONS CID CITI GLOBAL 12/10/03 1.030 50,000 15 21,458.34 1.045 CID CITI GLOBAL 12/10/03 1.030 50,000 15 21,458.34 1.045 DISC NOTES FNMA 12/10/03 0.970 40,790 163 179,147.39 0.988 DISC NOTES FNMA 12/10/03 0.970 50,000 163 219,597.20 0.988 DISC NOTES FNMA 12/10/03 0.970 50,000 163 219,597.20 0.988 DISC NOTES FNMA 12/10/03 0.945 5,000 175 22,968.75 0.963 DISC NOTES FNMA 12/10/03 0.945 50,000 175 229,687.50 0.963 DISC NOTES FNMA 12/10/03 0.945 50,000 175 229,687.50 0.963 12/10/03 PURCHASES CID FCAR 03/26/04 1.090 50,000 CID FCAR 03/26/04 1.090 50,000 CID FCAR 03/26/04 1.090 50,000 CID FCAR 03/26/04 1.090 50,000 12/11/03 REDEMPTIONS TREAS BILLS 12/11/03 0.860 50,000 176 210,222.22 0.876 TREAS BILLS 12/11/03 0.860 50,000 176 210,222.22 0.876 TREAS BILLS 12/11/03 0.860 50,000 176 210,222.22 0.876 TREAS BILLS 12/11/03 0.860 50,000 176 210,222.22 0.876 TREAS BILLS 12/11/03 0.860 50,000 176 210,222.22 0.876 TREAS BILLS 12/11/03 0.860 50,000 176 210,222.22 0.876 TREAS BILLS 12/11/03 0.860 50,000 176 210,222.22 0.876 TREAS BILLS 12/11/03 0.860 50,000 176 210,222.22 0.876 1.1 12/11/03 PURCHASES CD CR AGRIC 1.070% 02/27/04 1.070 50,000 CP CITICORP 02/09/04 1.070 50,000 CP CITICORP 02/09/04 1.070 50,000 CP GECC 05/28/04 1.110 50,000 CP GECC 05/28/04 1.110 50,000 CP GECC 05/28/04 1.110 50,000 CP GECC 05/28/04 1.1.10 50,000 DISC NOTES FHLB 01/02/04 1.030 50,000 DISC NOTES FHLB 01/02/04 1.030 50,000 DISC NOTES FHLB 01/02/04 1.030 50,000 DISC NOTES FHLB 01/02/04 1.030 50,000 DISC NOTES FHLB 01/02/04 1.040 50,000 DISC NOTES FHLB 01/02/04 1.040 50,000 DISC NOTES FNMA 06/30/04 1.110 50,000 DISC NOTES FNMA 06/30/04 1.110 50,000 12/12/03 REDEMPTIONS CP SRAC 12/12/03 1.310 50,000 44 80,055.56 1.330 12/12/03 NO PURCHASES 12/16/03 REDEMPTIONS FHLMC 3.250% 12/15/03 3.225 50,000 728 3,216,972.22 3.224 FHLMC 3.250% 12/15/03 3.225 50,000 728 3,216,972.22 3.224 FHLMC 3.250% 12/15/03 3.225 50,000 728 3,216,972.22 3.224 FHLMC 3.250% 12/15/03 3.225 50,000 728 3,216,972.22 3.224 FHLMC 3.250% 12/15/03 3.230 50,000 728 3,221,735.48 3.229 FHLMC 3:250% 12/15/03. 3.240 50,000 728 3,231,319.52 3.240 FHLMC 3.250% 12/15/03 3.435 50,000 728 3,417,972.22 3.440 12/15/03 PURCHASES CD US BANK 1.100% 05/26/04 1.100 50,000 CD US BANK 1.100% 05/26/04 1.100 50,000 CD US BANK 1.100% 05/26/04 1.100 50,000 CD US BANK 1.100% 05/26/04 1.100 50,000 CD RABO 1.085% 05/26/04 1.080 50,000 CD RABO 1.085% 05/26/04 1.080 50,000 CD RABO 1.085% 05/26/04 1.080 50,000 CD RABO 1.085% 05/26/04 1.080 50,000 CP CITICORP 02/09/04 1.080 5,000 CP CITICORP 02/09/04 1.080 50,000 CP GECC 05/03/04 1.080 50,000 CP GECC 05/03/04 1.080 50,000 10CP GECC 05/03/04 1.080 50,000 CP GECC 05/03/04 1.080 50,000 DISC NOTES FNMA 05/17/04 1.060 50,000 DISC NOTES FNMA 05/17/04 1.060 50,000 7 12/16/03 PURCHASES (continued) DISC NOTES FNMA DISC NOTES FNMA 12/16/03 NO REDEMPTIONS 12/16/03 PURCHASES 06/09/04 1.095 45,000 06/09/04 1.095 50,000 BN WORLD 1.040% 03/01/04 1.060 50,000 BN WORLD 1.040% 03/01/04 1.060 50,000 BN WORLD 1.040% 03/01/04 1.060 50,000 BN WORLD 1.040% 03/01/04 1.060 50,000 CID SRAC 03/09/04 1.150 50,000 CID GECC 05/03/04 1.090 50,000 CID GECC 05/03/04 1.090 50,000 CID FCAR 06/02/04 1.110 50,000 CID FCAR 06/02/04 1.110 50,000 CID FCAR 06/02/04 1.110 50,000 12/17/03 REDEMPTIONS DISC NOTES FNMA 12/17/03 0.890 17,500 181 78,307.64 0.906 DISC NOTES FNMA 12/17/03 0.890 50,000 181 223,736.11 0.906 DISC NOTES FNMA 12/17/03 0.890 50,000 181 223,736.11 0.906 12/17/03 PURCHASES DISC NOTES FNMA 06/30/04 1.080 50,000 DISC NOTES FNMA 06/30/04 1.080 50,000 TREAS BILLS 06/10/04 0.945 50,000 TREAS BILLS 06/10/04 0.945 50,000 12/18/03 REDEMPTIONS TREAS BILLS 12/18/03 0.805 50,000 182 203,486.00 0.820 TREAS BILLS 12/18/03 0.805 50,000 182 203,486.00 0.820 TREAS BILLS 12/18/03 0.805 50,000 182 203,486.00 0.820 TREAS BILLS 12/18/03 0.805 50,000 182 203,486.00 0.820 TREAS BILLS 12/18/03 0.870 50,000 182 219,916.50 0.886 TREAS BILLS 12/18/03 0.870 50,000 182 219,916.67 0.886 TREAS BILLS 12/18/03 0.870 50,000 182 219,916.67 0.886 TREAS BILLS 12/18/03 0.870 50,000 182 219,916.67 0.886 TREAS BILLS 12/18/03 0.870 50,000 182 219,916.67 0.886 TREAS BILLS 12/18/03 0.800 50,000 182 202,222.24 0.814 TREAS BILLS 12/18/03 0.800 50,000 182 202,222.24 0.814 TREAS BILLS 12/18/03 0.800 50,000 182 202,222.24 0.814 TREAS BILLS 12/18/03 0.800 50,000 182 202,222.24 0.814 TREAS BILLS 12/18/03 0.800 50,000 182 202,222.24 0.814 12/18/03 PURCHASES CP SPARC 01/27/04 1.100 20,000 CP CITICORP 02/09/04 1.070 10,000 CP CITICORP 02/09/04 1.070 50,000 CP CITICORP 02/09/04 1.070 50,000 CP B/A 06/01/04 1.110 50,000 CP B/A 06/01/04 1.110 50,000 DISC NOTES FNMA 05/17/04 1.065 20,000 DISC NOTES FNMA 05/17/04 1.065 50,000 DISC NOTES FNMA 05/17/04 1.065 50,000 DISC NOTES FHLMC 06/16/04 1.090 50,000 DISC NOTES FNMA 06/16/04 1.090 50,000 DISC NOTES FNMA 06/16/04 1.100 50,000 DISC NOTES FNMA 06/16/04 1.100 50,000 DISC NOTES FNMA 06/16/04 1.100 50,000 DISC NOTES FNMA 06/16/04 1.100 50,000 DISC NOTES FNMA 06/16/04 1.100 50,000 DISC NOTES FNMA 06/16/04 1.090 50,000 DISC NOTES FNMA 06/16/04 1.090 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 TREAS BILLS 06/17/04 0.945 50,000 12/19/03 REDEMPTIONS FHLB 3.260% 12/19/03 3.224 10,000 CP GMAC 12/19/03 1.230 50,000 12/19/03 PURCHASES CD BNPARIS 1.115% 06/30/04 1.110 50,000 CD BNPARIS 1.115% 06/30/04 1.110 50,000 CP GMAC 02/27/04 1.380 25,000 CP GMAC 02/27/04 1.380 50,000 CP FCAR 03/09/04 1.080 50,000 CP FCAR 03/09/04 1.080 50,000 CP FCAR 03/09/04 1.080 50,000 CP GECC 06/09/04 1.120 25,000 CP GECC 06/09/04 1.120 50,000 DISC NOTES FNMA 06/16/04 1.095 50,000 708 626,733.34 3.229 28 47, 833.33 1.248 12/22/03 REDEMPTIONS CD WASHINGTON 1.080% 12/22/03 1.100 34,600 96 101,654.91 1.115 CD UBS 1.005% 12/22/03 1.000 50,000 167 231,949.80 1.014 CD UBS 1.005% 12/22/03 1.000 50,000 167 231,949.80 1.014 CD UBS 1.005% 12/22/03 1.000 50,000 167 231,949.80 1.014 CD UBS 1.005% 12/22/03 1.000 50,000 167 231,949.80 1.014 CP SARA LEE 12/22/03 1.080 15,000 27 12,150.00 1.096 CP SARA LEE 12/22/03 1.080 50,000 27 40,500.00 1.096 CP GECC 12/22/03 1.040 50,000 27 39,000.00 1.055 CP GECC 12/22/03 1.040 50,000 27 39,000.00 1.055 CP GECC 12/22/03 1.040 50,000 27 39,000.00 1.055 CP GECC 12/22/03 1.040 50,000 27 39,000.00 1.055 CP GECC 12/22/03 1.040 50,000 27 39,000.00 1.055 CP SARA LEE 12/22/03 1.080 40,000 31 37,200.00 1.096 12/22/03 PURCHASES CD W/F 1.040% 02/27/04 1.040 50,000 CD W/F 1.040% 02/27/04 1.040 50,000 CD W/F 1.040% 02/27/04 1.040 50,000 CD CIBC 1.050% 02/27/04 1.050 50,000 CD CIBC 1.050% 02/27/04 1.050 50,000 CD CIBC 1.050% 02/27/04 1.050 50,000 CP COUNTRY 01/06/04 1.130 42,055 CP COUNTRY 01/06/04 1.130 50,000 CP CITICORP 03/01/04 1.070 50,000 CP CITICORP 03/01/04 1.070 50,000 CP CITICORP 03/01/04 1.070 50,000 CP CITICORP 03/01/04 1.070 50,000 CP GECC 03/09/04 1.070 50,000 CP GECC 03/09/04 1.070 50,000 CP GECC. 03/10/04 1.070 50,000 CP GECC 03/10/04 1.070 50,000 DISC NOTES FHLMC 05/17/04 1.070 24,947 DISC NOTES FHLMC 05/17/04 1.070 50,000 DISC NOTES FHLMC 05/20/04 1.065 45,000 DISC NOTES FHLMC 05/20/04 1.065 50,000 DISC NOTES FHLMC 05/20/04 1.065 50,000 12/23/03 NO REDEMPTIONS 12/23/03 PURCHASES CD MONTREAL 1.080% 05/03/04 1.080 50,000 CD MONTREAL . 1.080% 05/03/04 1.080 50,000 CD UBS 1.095% 05/28/04 1.095 50,000 CD UBS 1.095% 05/28/04 1.095 50,000 CD UBS 1.095% 05/28/04 1.095 50,000 CD UBS 1.095% 05/28/04 1.095 50,000 CP COUNTRY 12/29/03 1.090 30,000 CP COUNTRY 12/29/03 1.090 50,000 10 12/23/03 PURCHASES (continued) CP CITI GLOBAL 01/02/04 1.080 10,000 CP CITI GLOBAL 01/02/04 1.080 50,000 CP CITI GLOBAL 01/02/04 1.080 50,000 CP CITI GLOBAL 01/02/04 1.080 50,000 CP DFC 01 /29/04 1.080 1,368 CP DFC 01/29/04 1.080 50,000 CP CITICORP 03/01 /04 1.065 50,000 CP CITICORP 03/01/04 1.065 50,000 CP CITICORP 03/08/04 1.065 50,000 CP CITICORP 03/08/04 1.065 50,000 CP GECC 05/10/04 1.100 50,000 CP GECC 05/10/04 1.100 50,000 CP GECC 05/26/04 1.100 50,000 CP GECC 05/26/04 1.100 50,000 DISC NOTES FNMA 06/16/04 1.100 12,000 DISC NOTES FNMA 06/16/04 1.100 50,000 DISC NOTES FNMA 06/16/04 1.100 50,000 12/24/03 NO REDEMPTIONS 12/24/03 PURCHASES CP GECC 05/10/04 1.090 50,000 CP GECC 05/10/04 1.090 50,000 CP GECC 05/10/04 1.090 50,000 CP GECC 06/16/04 1.110 50,000 CP GECC 06/16/04 1.110 50,000 CP GECC 06/16/04 1.110 50,000 12/26/03 REDEMPTIONS BN BANK ONE 1.020%' 12/26/03 1.020 50,000 31 43,916.67 1.034 BN BANK ONE 1.020% 12/26/03 1.020 50,000 31 43,916.67 1.034 CD W/F 1.040% 12/26/03 1.040 15,000 31 13,433.33 1.054 CD W/F 1.040% 12/26/03 1.040 50,000 31 44,777.78 1.054 CD W/F 1.040% 12/26/03 1.040 50,000 31 44,777.78 1.054 12/26/03 NO PURCHASES 12/29/03 REDEMPTIONS CD CIBC 1.050% 12/29/03 1.050 50,000 62 90,416.67 1.065 CD CIBC 1.050% 12/29/03 1.050 50,000 62 90,416.67 1.065 CD CIBC 1.050% 12/29/03 1.050 50,000 62 90,416.67 1.065 CD CIBC 1.050% 12/29/03 1.050 50,000 62 90,416.67 1.065 CD SOC GEN 1.050% 12/29/03 1.050 50,000 62 90,416.67 1.065 CD SOC GEN 1.050% 12/29/03 1.050 50,000 62 90,416.67 1.065 CD SOC GEN 1.050% 12/29/03 1.050 50,000 62 90,416.67 1.065 CD SOC GEN 1.050% 12/29/03 1.050 50,000 62 90,416.67 1.065 CD TORONTO 1.055% 12/29/03 1.050 50,000 63 91,875.80 1.065 11 12/29/03 REDEMPTIONS (continued) CD TORONTO 1.055% 12/29/03 1.050 50,000 63 91,875.80 1.065 CD TORONTO 1.055% 12/29/03 1.050 50,000 63 91,875.80 1.065 CD TORONTO 1.055% 12/29/03 1.050 50,000 63 91,875.80 1.065 CD TORONTO 1.080% 12/29/03 1.075 50,000 145 216,497.40 1.090 CD TORONTO 1.080% 12/29/03 1.075 50,000 145 216,497.40 1.090 CD WASHINGTON 1.090% 12/29/03 1.100 50,000 145 221,518.89 1.115 CD WASHINGTON 1.090% 12/29/03 1.100 50,000 145 221,518.89 1.115 CD WASHINGTON 1.040% 12/29/03 1.040 50,000 174 251,333.33 1.054 CD SOC GEN 1.000% 12/29/03 1.000 50,000 174 241,666.67 1.014 CD SOC GEN 1.000% 12/29/03 1.000 50,000 174 241,666.67 1.014 CD ABN AMRO 0.980% 12/29/03 0.980 50,000 175 238,194.44 0.994 CD ABN AMRO 0.980% 12/29/03 0.980 50,000 175 238,194.44 0.994 CD ABN AMRO 0.980% 12/29/03 0.980 50,000 175 238,194.44 0.994 CD ABN AMRO 0.980% 12/29/03 0.980 50,000 175 238,194.44 0.994 CD CIBC 1.030% 12/29/03 1.030 50,000 175 250,347.22 1.044 CD CIBC 1.030% 12/29/03 1.030 50,000 175 250,347.22 1.044 CD STNRD CH 0.990% 12/29/03 0.990 50,000 175 240,625.00 1.004 CD STNRD CH 0.990% 12/29/03 0.990 50,000 175 240,625.00 1.004 CD UBS 1.010% 12/29/03 1.005 50,000 175 244,276.74 1.019 CD UBS 1.010% 12/29/03 1.005 50,000 175 244,276.74 1.019 CD BARCLAYS 0.890% 12/29/03 0.885 50,000 193 237,235.49 0.897 CD BARCLAYS 0.890% 12/29/03 0.885 50,000 193 237,235.49 0.897 CD BARCLAYS 0.890% 12/29/03 0.885 50,000 193 237,235.49 0.897 CD BARCLAYS 0.890% 12/29/03 0.885 50,000 193 237,235.49 0.897 CD LLOYDS 1.070% 12/29/03 1.065 50,000 206 304,717.00 1.080 CID COUNTRY 12/29/03 1.090 30,000 6 5,450.00 1.105 CID COUNTRY 12/29/03 1.090 50,000 6 9,083.33 1.105 MTN W/F 3.375% 12/29/03 3.440 50,000 732 3,446,875.00 3.442 12/29/03 PURCHASES CID GECC CID GECC 12/30/03 NO REDEMPTIONS 12/30/03 PURCHASES 01/06/04 1.030 50,000 01/06/04 1.030 50,000 CP GECC 01/12/03 1.030 30,000 CID GECC 01/12/03 1.030 50,000 CID COUNTRY 01/05/04 1.120 50,000 CID COUNTRY 01/05/04 1.120 50,000 CID ASCC 01/06/04 1.100 29,500 CID COUNTRY 01/06/04 1.120 42,000 CID COUNTRY 01/06/04 1.120 50,000 12/31/03 REDEMPTIONS DISC NOTES FHLMC 12/31/03 1.080 40,000 135 162,000.00 1.099 DISC NOTES FHLMC 12/31/03 1.080 50,000 135 202,500.00 1.099 12 12/31/03 PURCHASES CD W/F 1.040% 01/20/04 1.040 50,000 CD W/F 1.040% 01/20/04 1.040 50,000 CD W/F 1.040% 01/20/04 1.040 50,000 CD W/F 1.040% 01/20/04 1.040 50,000 13 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. c/ Outright purchase against Reverse Repurchase Agreement. h/ Security "SWAP" transactions. it Buy back agreement. RRS Reverse Repurchase Agreement. RRP Termination of Reverse Repurchase Agreement. 14 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE ALHAMBRA Bank of East Asia (USA) 07/16/03 1.000 3,095,000.00 01/14/04 Bank of East Asia (USA) 08/14/03 1.090 3,000,000.00 02/11/04 Bank of East Asia (USA) 11/19/03 1.070 6,000,000.00 05/19/04 Omni Bank 11/13/03 0.990 2,000,000.00 02/13/04 Omni Bank 08/20/03 1.090 2,000,000.00 02/19/04 Omni Bank 12/04/03 0.980 6,000,000.00 03/03/04 Omni Bank 09/19/03 1.060 2,000,000.00 03/17/04 Omni Bank 10/23/03 1.080 2,000,000.00 04/22/04 Omni Bank 11/20/03 1.090 2,000,000.00 05/20/04 ARROYO GRANDE Mid -State Bank 07/17/03 1.000 5,000,000.00 01/15/04 Mid -State Bank 08/14/03 1.090 5,000,000.00 02/11/04 Mid -State Bank 09/12/03 1.070 5,000,000.00 03/12/04 Mid -State Bank 10/15/03 1.050 5,000,000.00 04/14/04 Mid -State Bank 11/19/03 1.070 5,000,000.00 05/19/04 Mid -State Bank 12/12/03 1.060 5,000,000.00 06/11/04 BREA Jackson Federal Bank 11/20/03 1.010 10,000,000.00 02/18/04 Pacific Western National Bank 08/08/03 1.080 4,000,000.00 02/04/04 CALABASAS First Bank of Beverly Hills FSB 08/07/03 1.100 10,000,000.00 02/05/04 First Bank of Beverly Hills FSB 09/04/03 1.120 10,000,000.00 03/04/04 First Bank of Beverly Hills FSB 12/17/03 1.040 10,000,000.00 06/16/04 CAMARILLO First California Bank 07/30/03 1.060 4,000,000.00 01/28/04 First California Bank 09/24/03 1.090 6,000,000.00 03/24/04 First California Bank 12/05/03 1.090 2,000,000.00 06/04/04 CAMERON PARK Western Sierra National Bank 07/16/03 0.980 7,000,000.00 01/14/04 Western Sierra National Bank 08/15/03 1.070 6,000,000.00 02/11/04 15 NAME CHICO Tri Counties Bank CITY OF INDUSTRY EverTrust Bank EverTrust Bank DUBLIN Operating Engineers FCU Operating Engineers FCU Operating Engineers FCU EL CENTRO Valley Independent Bank Valley Independent Bank Valley Independent Bank EL SEGUNDO First Coastal Bank NA First Coastal Bank NA Hawthorne Savings FSB Hawthorne Savings FSB Hawthorne Savings FSB Hawthorne Savings FSB Hawthorne Savings FSB Xerox Federal Credit Union Xerox Federal Credit Union Xerox Federal Credit Union FAIRFIELD Westamerica Bank Westamerica Bank FRESNO United Security Bank TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE 12/18/03 0.960 20,000,000.00 03/18/04 07/31/03 1.050 6,000,000.00 01/29/04 12/11/03 1.070 6,000,000.00 06/10/04 08/14/03 1.070 5,000,000.00 02/11/04 10/08/03 1.050 5,000,000.00 04/07/04 12/12/03 1.040 10,000,000.00 06/11 /04 09/23/03 1.030 20,000,000.00 01/07/04 10/17/03 1.000 20,000,000.00 01/16/04 10/17/03 1.000 32, 500, 000.00 01 /23/04 10/22/03 0.980 2,000,000.00 01/22/04 12/04/03 0.990 2,000,000.00 03/03/04 09/24/03 0.990 50,000,000.00 01/07/04 10/08/03 0.980 60, 000,000.00 01/07/04 08/07/03 1.090 15,000,000.00 02/05/04 10/16/03 1.070 35,000,000.00 04/14/04 11/20/03 1.090 25,000,000.00 05/20/04 09/04/03 1.110 20,000,000.00 03/04/04 09/08/03 1.090 7,000,000.00 03/10/04 11/20/03 1.100 20,000,000.00 05/20/04 10/10/03 0.960 60,000,000.00 01/09/04 10/22/03 0.970 50,000,000.00 01/22/04 12/18/03 1.030 40,000,000.00 01/21/04 16 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE FULLERTON Fullerton Community Bank 07/25/03 1.020 8,000,000.00 01/23/04 Fullerton Community Bank 11/19/03 1.080. 9,000,000.00 05/19/04 GOLETA Pacific Capital Bank 08/15/03 1.070 16,000,000.00 02/13/04 Pacific Capital Bank 07/25/03 0.990 45,000,000.00 02/13/04 Pacific Capital Bank 09/17/03 1.050 25,000,000.00 04/01/04 Pacific Capital Bank 10/01/03 1.050 30,000,000.00 04/01/04 Pacific Capital Bank 12/10/03 1.030 85,000,000.00 06/09/04 GRANADA HILLS First State Bank of California 09/19/03 1.040 2,000,000.00 03/19/04 First State Bank of California 10/23/03 1.060 3,000,000.00 04/22/04 IRVINE Commercial Capital Bank 07/24/03 0.990 4,000,000.00 01/08/04 Commercial Capital Bank 07/10/03 0.990 6,000,000.00 01/08/04 Commercial Capital Bank 08/20/03 1.070 15,000,000.00 02/19/04 Commercial Capital Bank 08/28/03 1.090 14,000,000.00 02/26/04 Commercial Capital Bank 10/17/03 1.040 10,000,000.00 04/15/04 Commercial Capital Bank 10/31/03 1.060 20,000,000.00 04/29/04 Commercial Capital Bank 11/20/03 1.070 20,000,000.00 05/20/04 Commercial Capital Bank 12/17/03 1.020 10,000,000.00 06/16/04 LA JOLLA Silvergate Bank 09/12/03 1.080 5,000,000.00 03/12/04 LAKEPORT Lake Community Bank 07/16/04 1.000 2,000,000.00 01/14/04 LODI Bank of Lodi 09/23/03 1.090 5,000,000.00 03/24/04 Farmers & Merchant Bk Cen CA 10/10/03 1.050 10,000,000.00 04/08/04 17 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($j DATE LOS ANGELES Broadway Federal Bank 07/11/03 1.020 2,500,000.00 01/09/04 LOS ANGELES (continued) Broadway Federal Bank 09/11/03 1.080 3,000,000.00 03/12/04 Cathay Bank 10/08/03 0.980 19,000,000.00 01/07/04 Cathay Bank 09/24/03 0.990 19,000,000.00 01/07/04 Cathay Bank 11/19/03 1.000 15,000,000.00 02/18/04 Cathay Bank 12/03/03 0.980 17,000,000.00 03/03/04 Cathay Bank 12/11/03 0.970 30,000,000.00 03/10/04 Cedars Bank 10/03/03 0.990 5,000,000.00 01/07/04 Cedars Bank 08/21/03 1.090 2,000,000.00 02/20/04 Cedars Bank 09/11/03 1.080 4,500,000.00 03/12/04 Cedars Bank 10/22/03 1.080 4,000,000.00 04/21/04 Center Bank 10/08/03 0.980 10,000,000.00 01/07/04 Center Bank 01/22/04 0.970 5,000,000.00 01/22/04 Center Bank 09/18/03 1.060 40,000,000.00 03/17/04 Center Bank 12/23/03 1.000 5,000,000.00 06/23/04 CHB America Bank 07/17/03 0.980 1,000,000.00 01/15/04 CHB America Bank 12/04/03 0.960 2,000,000.00 03/03/04 CHB America Bank 09/05/03 1.090 2,000,000.00 03/05/04 CHB America Bank 09/29/03 1.050 3,000,000.00 03/31/04 CHB America Bank 10/15/03 1.030 3,300,000.00 04/14/04 CHB America Bank 11/21/03 1.060 4,000,000.00 05/21/04 Eastern International Bank 11/05/03 1.080 900,000.00 05/05/04 Eastern International Bank 12/11 /03 1.050 1,000,000.00 06/10/04 Hanmi Bank 11/05/03 1.010 25,000,000.00 02/04/04 Hanmi Bank 10/17/03 0.980 25,000,000.00 01/16/04 Hanmi Bank 09/05/03 1.110 25,000,000.00 03/05/04 Hanmi Bank 09/18/03 1.070 25,000,000.00 03/17/04 Mellon First Business Bank 10/09/03 0.970 50,000,000.00 01/09/04 Mellon First Business Bank 12/18/03 0.950 50,000,000.00 03/18/04 Nara Bank, NA 10/08/03 0.980 5,000,000.00 01/07/04 Nara Bank, NA 10/23/03 0.990 10,000,000.00 01/23/04 Nara Bank, NA 08/08/03 1.080 10,000,000.00 02/04/04 Nara Bank, NA 09/11/03 1.080 10,000,000.00 03/12/04 Nara Bank, NA 10/23/03 1.080 10,000,000.00 04/22/04 Nara Bank, NA 11/14/03 1.110 5,000,000.00 05/13/04 One United Bank 10/17/03 1.000 10,000,000.00 01/16/04 Pacific Union Bank 07/10/03 1.010 10,000,000.00 01/08/04 Pacific Union Bank 09/04/03 1.110 20,000,000.00 03/04/04 Pacific Union Bank 10/31/03 1.080 10,000,000.00 04/29/04 Pacific Union Bank 12/15/03 1.040 20,000,000.00 06/16/04 18 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE Preferred Bank 08/08/03 1.090 4,000,000.00 02/06/04 Preferred Bank 09/19/03 1.070 31,000,000.00 03/19/04 Sae Han Bank 11/21/03 1.000 6,000,000.00 02/20/04 Sae Han Bank 12/12/03 0.960 6,000,000.00 02/20/04 LOS ANGELES (continued) State Bank of India (California) 10/01/03 1.000 3,000,000.00 01/07/04 State Bank of India (California) 11/20/03 1.000 2,000,000.00 05/20/04 Western Federal Credit Union 10/23/03 1.080 30,000,000.00 04/22/04 Wilshire State Bank 07/10/02 1.010 7,000,000.00 01/08/04 Wilshire State Bank 10/23/03 0.990 4,000,000.00 02/05/04 Wilshire State Bank 08/07/03 1.090 4,000,000.00 02/05/04 Wilshire State Bank 08/14/03 1.090 3,000,000.00 02/25/04 Wilshire State Bank 08/27/03 1.110 4,000,000.00 02/25/04 Wilshire State Bank 09/19/03 1.060 8,000,000.00 03/19/04 Wilshire State Bank 11/14/03 1.110 2,000,000.00 05/13/04 Wilshire State Bank 11/14/03 1.110 6,000,000.00 05/13/04 Wilshire State Bank 12/15/03 1.040 1,000,000.00 06/17/04 Wilshire State Bank 12/17/03 1.040 2,000,000.00 06/17/04 Wilshire State Bank 12/15/03 1.040 4,000,000.00 06/17/04 Wilshire State Bank 12/17/03 1.040 5,000,000.00 06/17/04 MERCED County Bank 10/15/03 0.960 5,000,000.00 01/15/04 County Bank 07/17/03 1.010 5,000,000.00 01/15/04 County Bank 12/10/03 0.970 10,000,000.00 03/10/04 County Bank 12/03/03 1.100 5,000,000.00 06/02/04 MONTEREY PARK Trust Bank FSB 07/09/03 1.000 3,000,000.00 01/07/04 Trust Bank FSB 10/01/03 1.080 3,000,000.00 04/01/04 Trust Bank FSB 12/19/03 1.050 2,000,000.00 07/01/04 NORTH HIGHLANDS Safe Credit Union 10/16/03 0.960 5,000,000.00 01/16/04 Safe Credit Union 11/13/03 1.000 20,000,000.00 02/13/04 OAKDALE Oak Valley Community Bank 10/16/03 0.960 2,500,000.00 01/16/04 Oak Valley Community Bank 12/18/03 0.950 3,500,000.00 03/18/04 19 NAME OAKLAND TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE Metropolitian Bank 07/25/03 0.990 1,000,000.00 01/23/04 Metropolitian Bank 08/28/03 1.090 1,000,000.00 02/26/04 OAKLAND (continued) Metropolitian Bank 09/24/03 1.080 1,000,000.00 03/24/04 Metropolitian Bank 09/24/03 1.080 1,000,000.00 03/24/04 Metropolitian Bank 10/29/03 1.080 1,000,000.00 04/28/04 Metropolitian Bank 12/04/03 1.100 1,000,000.00 06/03/04 ONTARIO Citizens Business Bank 08/08/03 1.080 30,000,000.00 02/06/04 Citizens Business Bank 09/24/03 1.080 30,000,000.00 03/24/04 Citizens Business Bank 10/03/03 1.050 25,000,000.00 04/02/04 Citizens Business Bank 11/20/03 1.090 30,000,000.00 05/20/04 Citizens Business Bank 12/05/03 1.080 25,000,000.00 06/04/04 PALO ALTO Bank of Petaluma 08/20/03 1.090 3,500,000.00 02/19/04 Bank of Petaluma 09/10/03 1.090 12,000,000.00 03/11/04 Bank of Santa Clara 08/20/03 1.100 20,000,000.00 02/19/04 Bay Bank of Commerce 10/29/03 1.090 5,000,000.00 04/28/04 Coast Commercial Bank 07/16/03 1.010 5,000,000.00 01/14/04 Coast Commercial Bank 08/20/03 1.100 20,000,000.00 02/19/04 Cupertino National Bank 07/16/03 1.000 10,000,000.00 01/14/04 Cupertino National Bank 09/10/03 1.080 10,000,000.00 03/11/04 Cupertino National Bank 10/29/03 1.090 35,0001000.00 04/28/04 Cupertino National Bank 11/21/03 1.090 20,000,000.00 05/21/04 Golden Gate Bank 11/21/03 1.110 9,000,000.00 05/21/04 Mid -Peninsula Bank 08/20/03 1.090 5,000,000.00 02/19/04 Mid -Peninsula Bank 09/10/03 1.080 10,000,000.00 03/11/04 Mid -Peninsula Bank 10/29/03 1.080 35,000,000.00 04/28/04 Mt. Diablo National Bank 09/10/03 1.090 10,000,000.00 03/11/04 Peninsula Bank of Commerce 08/20/03 1.090 15,000,000.00 02/19/04 San Jose National Bank 10/29/03 1.100 20,000,000.00 04/28/04 San Jose National Bank 11/21/03 1.100 20,000,000.00 05/21/04 PALOS VERDES ESTATES Malaga Bank 08/22/03 20 1.060 2,000,000.00 02/20/04 NAME Malaga Bank Malaga Bank Malaga Bank Malaga Bank PASADENA Community Bank Community Bank Community Bank Community Bank Community Bank Community Bank Wescom Credit Union PASO ROBLES Hacienda Bank PLACERVILLE El Dorado Savings Bank El Dorado Savings Bank El Dorado Savings Bank El Dorado Savings Bank El Dorado Savings Bank El Dorado Savings Bank PLEASANTON Valley Community Bank POMONA PFF Bank and Trust PFF Bank and Trust PORTERVILLE Bank of the Sierra RANCHO SANTA FE TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE 11/19/03 0.980 8,000,000.00 02/20/04 11/14/03 1.090 7,000,000.00 05/13/04 12/17/03 1.020 4,000,000.00 06/16/04 12/17/03 1.020 5,000,000.00 06/16/04 07/11/03 1.020 10,000,000.00 01/09/04 09/17/03 1.070 10,000,000.00 03/17/04 10/10/03 1.050 10,000,000.00 04/08/04 10/15/03 1.050 15,000,000.00 04/14/04 11/06/03 1.090 15,000,000.00 05/06/04 12/17/03 1.040 10,000,000.00 06/16/04 11/19/03 1.090 10,000,000.00 05/19/04 12/10/03 0.990 1,000,000.00 03/10/04 02/07/03 1.360 5,000,000.00 02/05/04 03/20/03 1.270 5,000,000.00 03/10/04 03/07/03 1.270 5,000,000.00 03/10/04 04/10/03 1.280 10,000,000.00 04/01/04 04/30/03 1.310 5,000,000.00 04/30/04 06/10/03 1.100 20,000,000.00 06/04/04 12/19/03 08/29/03 12/10/03 10/23/03 21 0.960 6,000,000.00 03/19/04 1.110 8,000,000.00 02/27/04 1.050 20,000,000.00 06/09/04 1.090 10,000,000.00 04/22/04 NAME La Jolla Bank, FSB La Jolla Bank, FSB La Jolla Bank, FSB La Jolla Bank, FSB La Jolla Bank, FSB REDDING North Valley Bank REDWOOD CITY Provident Central Credit Union ROCKLIN Five Star Bank Five Star Bank Mechanics Bank Mechanics Bank Mechanics Bank Mechanics Bank Mechanics Bank Mechanics Bank Mechanics Bank Mechanics Bank Mechanics Bank Mechanics Bank RIVERSIDE Provident Savings Bank SACRAMENTO American River Bank American River Bank American River Bank American River Bank American River Bank TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($j DATE 08/08/03 1.060 25,000,000.00 02/04/04 11/14/03 0.980 15,000,000.00 02/13/04 09/04/03 1.090 10,000,000.00 03/04/04 12/05/03 0.960 10,000,000.00 03/05/04 11/20/03 1.070 25,000,000.00 05/20/04 12/12/03 1.040 3,000,000.00 06/11/04 10/31/03 1.060 20,000,000.00 04/29/04 07/30/03 1.020 2,000,000.00 01/28/04 10/01/03 1.050 2,000,000.00 03/31/04 03/07/03 1.290 10,000,000.00 03/03/04 04/01/03 1.320 10,000,000.00 04/01/04 04/23/03 1.390 10, 000, 000.00 04/21 /04 06/12/03 1.090 10,000,000.00 06/09/04 07/09/03 1.110 10,000,000.00 07/08/04 08/08/03 1.370 10,000,000.00 08/04/04 09/12/03 1.290 10,000,000.00 09/10/04 10/15/03 1.260 10, 000, 000.00 10/15/04 10/31 /03 1.300 10, 000,000.00 10/29/04 11 /07/03 1.380 10, 000, 000.00 11 /05/04 09/25/03 1.080 25,000,000.00 03/25/04 07/11/03 1.000 1,000,000.00 01/09/04 07/31 /03 1.020 1,500,000.00 01 /29/04 08/29/03 1.090 2,000,000.00 02/27/04 09/25/03 1.060 2,000,000.00 03/25/04 10/09/03 1.030 1,500,000.00 04/07/04 OUC NAME TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE American River Bank 12/19/03 1.030 1,000,000.00 06/18/04 Bank of Sacramento 08/13/03 1.100 1,500,000.00 02/11 /04 Bank of Sacramento 12/03/03 0.990 2,000,000.00 03/03/04 Bank of Sacramento 12/19/03 1.050 2,000,000.00 06/18/04 Merchants National Bank 07/24/03 0.990 2,000,000.00 01/22/04 Merchants National Bank 10/15/03 1.050 2,000,000.00 04/14/04 River City Bank 07/31/03 1.050 3,000,000.00 01/29/04 River City Bank 08/28/03 1.120 2,000,000.00 02/26/04 SACRAMENTO (continued) River City Bank 10/09/03 1.060 2,000,000.00 04/07/04 U.S. Bank 07/10/03 1.010 100,000,000.00 01/08/04 U.S. Bank 08/06/03 1.090 25,000,000.00 02/04/04 U.S. Bank 08/13/03 1.090 50,000,000.00 02/11/04 U.S. Bank 08/21/03 1.090 50,000,000.00 02/20/04 Union Bank of California 10/17/03 0.980 175,000,000,00 01/16/04 Union Bank of California 11/05/03 1.010 150,000,000.00 02/04/04 Union Bank of California 12/18/03 0.960 150,000,000.00 03/18/04 SAN BERNARDINO Business Bank of California 10/16/03 0.960 8,000,000.00 01/16/04 Business Bank of California 08/06/03 1.100 10,000,000.00 02/04/04 Business Bank of California 12/18/03 0.930 12,000,000.00 02/04/04 SAN DIEGO First Future Credit Union 08/29/03 1.110 5,000,000.00 02/27/04 First Future Credit Union 12/03/03 1.090 15,000,000.00 06/02/04 First Future Credit Union 12/17/03 1.040 3,000,000.00 06/16/04 First Future Credit Union 12/17/03 1.040 5,000,000.00 06/16/04 First United Bank 08/15/03 1.100 1,000,000.00 02/13/04 First United Bank 10/17/03 1.070 2,000,000.00 04/15/04 Neighborhood National Bank 08/22/03 1.100 2,000,000.00 02/20/04 North Island Federal Credit Union 09/26/03 1.010 5,000,000.00 01/09/04 SAN FRANCISCO American California Bank 07/08/03 1.020 4,000,000.00 01/08/04 Bank of the West 10/08/03 0.980 134,000,000.00 01/07/04 Bank of the West 07/30/03 1.040 76,500,000.00 01/28/04 Bank of the West 10/30/03 1.010 100,000,000.00 01/29/04 Bank of the West 11/21/03 1.000 242,000,000.00 02/20/04 Bank of the West 12/17/03 0.950 82,000,000.00 03/18/04 23 NAME TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE Citibank (West) FSB 07/03/03 1.000 150,000,000.00 01/08/04 Citibank (West) FSB 07/09/03 1.000 100,000,000.00 01/15/04 Citibank (West) FSB 07/23/03 1.020 100,000,000.00 01/22/04 Oceanic Bank 09/12/03 1.260 4,000,000.00 09/10/04 Trans Pacific National Bank 08/07/03 1.100 1,000,000.00 02/05/04 Trans Pacific National Bank 09/25/03 1.090 1,000,000.00 03/25/04 Trans Pacific National Bank 12/23/03 1.010 1,000,000.00 06/23/04 United Commercial Bank 10/08/03 0.990 40,000,000.00 01/07/04 SAN FRANCISCO (continued) United Commercial Bank 07/01/03 1.000 25,000,000.00 01/08/04 United Commercial Bank 07/11/03 1.020 30,000,000.00 01/08/04 United Commercial Bank 07/16/03 1.000 20,000,000.00 01/14/04 United Commercial Bank 07/25/03 1.010 30,000,000.00 01/14/04 United Commercial Bank 07/31/03 1.010 40,000,000.00 01/28/04 United Commercial Bank 08/28/03 1.110 20,000,000.00 02/26/04 United Commercial Bank 12/04/03 0.990 50,000,000.00 03/03/04 United Commercial Bank 09/19/03 1.060 65,000,000.00 03/19/04 United Commercial Bank 12/05/03 1.090 25,000,000.00 06/04/04 United Commercial Bank 12/12/03 1.070 25,000,000.00 06/11/04 SAN JOSE Comerica Bank of California 09/23/03 1.000 134,000,000.00 01/07/04 Comerica Bank of California 10/17/03 0.970 183,000,000.00 01/16/04 Heritage Bank of Commerce 08/15/03 1.100 2,000,000.00 02/11/04 Meriwest Credit Union 10/22/03 1.000 5,000,000.00 01/22/04 Meriwest Credit Union 09/18/03 1.090 5,000,000.00 03/17/04 Meriwest Credit Union 10/17/03 1.090 5,000,000.00 04/14/04 Meriwest Credit Union 10/16/03 1.070 5,000,000.00 04/14/04 Santa Clara Co. Fed. C.U. 11/06/03 1.030 5,000,000.00 02/06/04 Santa Clara Co. Fed. C.U. 08/08/03 1.100 10,000,000.00 02/06/04 SAN LUIS OBISPO First Bank Of San Luis Obispo 08/14/03 1.100 6,000,000.00 02/11/04 First Bank Of San Luis Obispo 09/17/03 1.080 7,000,000.00 03/17/04 First Bank Of San Luis Obispo 09/26/03 1.080 5,000,000.00 03/26/04 First Bank Of San Luis Obispo 12/05/03 1.090 4,500,000.00 06/04/04 Mission Community Bank 09/04/03 1.120 1,000,000.00 03/04/04 Mission Community Bank 10/08/03 1.080 2,500,000.00 04/07/04 Mission Community Bank 12/11/03 1.080 1,000,000.00 06/10/04 San Luis Trust Bank 09/10/03 1.060 1,500,000.00 03/11/04 San Luis Trust Bank 10/22/03 1.060 1,000,000.00 04/21/04 24 NAME SAN MARINO East West Federal Bank East West Federal Bank East West Federal Bank East West Federal Bank SANTA ROSA National Bank of the Redwoods National Bank of the Redwoods National Bank of the Redwoods North Coast Bank North Coast Bank SONORA Central California Bank STOCKTON Pacific State Bank Pacific State Bank Union Safe Deposit Bank Union Safe Deposit Bank Union Safe Deposit Bank Union Safe Deposit Bank Union Safe Deposit Bank Union Safe Deposit Bank Washington Mutual Bank Washington Mutual Bank Washington Mutual Bank Z�1��T•1; [�3 China Trust Bank (USA) China Trust Bank (USA) China Trust Bank (USA) China Trust Bank (USA) TRACY TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE 07/11/03 1.020 42,000,000.00 01/09/04 08/08/03 1.080 35,000,000.00 02/06/04 09/12/03 1.070 35,000,000.00 03/12/04 11 /20/03 1.090 38, 000,000.00 05/20/04 07/24/03 1.010 10, 000, 000.00 01/22/04 08/13/03 1.090 5,000,000.00 02/11/04 10/31/03 1.080 5,000,000.00 04/29/04 09/19/03 1.070 1,250,000.00 03/19/04 12/16/03 1.040 1,250,000.00 06/17/04 09/26/03 1.070 5,000,000.00 03/26/04 07/10/03 1.010 1,000,000.00 01/08/04 10/09/03 1.050 1,000,000.00 04/07/04 10/15/03 0.950 10,000,000.00 01/15/04 07/25/03 1.020 15, 000,000.00 01 /23/04 11 /06/03 1.010 15, 000, 000.00 02/05/04 08/15/03 1.100 15,000,000.00 02/13/04 12/12/03 0.970 10,000,000.00 03/11/04 09/05/03 1.120 15,000,000.00 03/05/04 07/24/03 1.020 75,000,000.00 01/22/04 08/21/03 1.100 60,000,000.00 02/20/04 12/17/03 1.040 45,000,000.00 06/16/04 10/16/03 0.960 15,000,000.00 01/16/04 10/22/03 0.970 30,000,000.00 01/22/04 11/13/03 0.990 20,000,000.00 02/13/04 09/12/03 1.070 35,000,000.00 03/12/04 25 NAME Service 1 st Bank TUSTIN Sunwest Bank Sunwest Bank Sunwest Bank VACAVILLE TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT ($) DATE 09/18/03 1.070 4,000,000.00 03/17/04 07/18/03 08/14/03 12/11 /03 Travis Credit Union 12/04/03 WHITTIER Quaker City Bank 07/16/03 Quaker City Bank 10/01 /03 Quaker City Bank 12/05/03 TOTAL TIME DEPOSITS DECEMBER 2003 26 0.990 6,000,000.00 01/16/04 1.070 7,800,000.00 02/11/04 0.950 1,000,000.00 03/10/04 1.090 40,000,000.00 06/02/04 0.980 24,000,000.00 01/14/04 1.070 16,000,000.00 03/31/04 1.080 25,000,000.00 06/04/04 6,750,096,000.00 BANK DEMAND DEPOSITS DECEMBER 2003 ($ in thousands) DAILY BALANCES DAY OF BALANCES WARRANTS MONTH PER BANKS OUTSTANDING 1 $ 886,736 $2,668,372 2 1,168,666 $2,297,820 3 970,189 $2,096,366 4 961,624 $2,292,475 5 1,048,695 $3,138,748 6 1,048,695 $3,138,748 7 1,048,695 $3,138,748 8 1,091,309 $3,058,665 9 1,298,104 $2,843,646 10 1,178,510 $2,526,533 11 1,042,270 $2,460,136 12 1,245,352 $2,417,749 13 1,245,352 $2,417,749 14 1,245,352 $2,417,749 15 1,610,221 $2,190,456 16 1,436,312 $1,912,732 17 1,338,941 $1,650,136 18 1,333,056 $2,961,416 19 1,539,666 $2,699,599 20 1,539,566 $2,599,599 21 1,539,566 $2,699,599 22 1,125,842 $2,482,486 23 571,517 $2,265,486 24 1,435,986 $1,941,081 25 1,435,986 $1,941,081 26 795,041 $2,671,771 27 795,041 $2,671,771 28 795,041 $2,571,771 29 1,527,752 $2,238,062 30 1,319,808 $2,492,548 31 1,641,404 $2,550,007 AVERAGE DOLLAR DAYS $ 1,201,936 a/ The prescribed bank balance for December was $1,470,820. This consisted of $1,306,110 in compensating balances for services, balances for uncollected funds of $171,918 and a deduction of $7,208 for December delayed deposit credit. 29 DESIGNATION BY POOLED MONEY INVESTMENT BOARD OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS No. 1654 In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its meeting on December 17, 2003, 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 $ 1,306,110,000 The active noninterest-bearing bank accounts designation constitutes a calendar month average balance. For purposes of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above amount provided that the balances computed by dividing the sum of daily balances of that calendar month by the number of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management. 2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest - bearing deposits in banks and savings and loan associations as follows: From To Transactions (1) 12/15/2003 12/19/200.3 $ 1,661,100,000 (2) 12/22/2003 12/26/2003 $ 1,058,100,000 (3) 12/29/2003 1/2/2004 $ (2,339,600,000) (4) 1/5/2004 1/9/2004 $ 2,277,700,000 (5) 1/12/2004 1/16/2004 $ 1,494,000,000 (6) 1 /19/2004 1 /23/2004 $ 101,400,000 (7) 1/26/2004 1/30/2004 $ (81,600,000) (8) 2/2/2004 2/6/2004 $ 304,700,000 (9) 2/9/2004 2/13/2004 $ 243,800,000 (10) 2/16/2004 2/20/2004 $. 376,500,000 Time Deposits in Various Financial Institutions In Securities (sections 16503a Estimated (section 16430)* and 16602)* Total $ 48,896,005,000 $ 5,733,095,000 $ 54,629,100,000 $ 49,954,105,000 $ 5,73$,095,000 $ 55,687,200,000 $ 47,614,505,000 $ 5,733,095,000 $ 53,347,600,000 $ 49,892,205,000 $ 5,733,095,000 $ 55,625,300,000 $ 51,386,205,000 $ 5,733,095,000 $ 57,119,300,000 $ 51,487,605,000 $ 5,733,095,000 $ 57,220,700,000 $ 51,406,005,000 $ 5,733,095,000 $ 57,139,100,000 $ 51,710,705,000 $ 5,733,095,000 $ 57,443,800,000 $ 51,954,505,000 $ 5,733,095,000 $ 57,687,600,000 $ 52,331,005,000 $ 5,733,095,000 $ 58,064,100,000 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 $ 1,306,110,000. Dated: December 17, 2003 * Government Code POOLED MONEY INVESTMENT BOARD: Signatures on file at STO and SCO Chairperson Member Member BOARD MEMBER ITEMS v L '� >1 cv .O ++ 0)c a. �) 00 0 � aU+ to O E d N i C m +r V _ o c O w L s s ca 0 coi � C 20 (D O U O cv 0 -a o .0 c m pip •m 0 E .40 00 78� O bup Oa G. R di�pp Ca0 •v= O A d N O U N 0 •N +L+ 3 n oo o ac U +0+ O '3 aoi p`�p o w ��p °a'$ w o N U c L 00 ,� M m = � .3 o R ;cc °� c o c a� o M a U cu 75 R E o �, c > O a� C E � > 3 a `►° m w .c c:3� coi c 3 E o o (u a.. 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