2004 04 14 IABP.O. Box 1504
78-495 CALLE TAMPICO (760) 777-7000
LA QUINTA, CALIFORNIA 92253 FAX (760) 777-710-1
AGENDA
INVESTMENT ADVISORY BOARD
Study Session Room
78-495 Calle Tampico- La Quinta, CA 92253
April 14, 2004 - 5:30 P.M.
I CALL TO ORDER
a. Pledge of Allegiance
b. Roll Call
11 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 March 10, 2004, for the
Investment Advisory Board.
V BUSINESS SESSION
A. Transmittal of Treasury Report for February 2004
B. Consideration of Fiscal Year 2004/05 Investment Policies
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report and other selected Financial Data -
March 2004
B. Pooled Money Investment Board Reports — January 2004
V11 BOARD MEMBER ITEMS
Vill ADJOURNMENT
INVESTMENT ADVISORY BOARD Business Session: A
Meeting Date: April 14, 2004
ITEM TITLE:
Transmittal of Treasury Report
for February 29, 2004
BACKGROUND:
Attached please find the Treasury Report February 29, 2004
RECOMMENDATION:
Review, Receive and File the Treasury Report for February 29, 2004
MEMORANDUM
TO: La Quinta City Council
FROM: John M. Falconer, Finance Director/Treasurer
SUBJECT: Treasurer's Report for February 29, 2004
DATE: March 26, 2004
Attached is the Treasurer's Report for the month ending February 29, 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
$ 240,310
(1)
($165,171)
$75,139
($165,171)
LAIF
28,941,285
6,000,000
(2,500,000)
32,441,285
3,500,000
US Treasuries (2)
79,951,640
(10,000,000)
31,262
69,982,902
(9,968,738)
US Gov't Agencies (2)
30,094,727
(15,745)
30,078,982
(15,745)
Commercial Paper (2)
-
0
0
Mutual Funds
2,497,970
4,634,026
1
7,131,996
4,634 026
Total
$141 725 932
1 $10 634 026
$12,665 171
$15,517
$139 710 304
$2 015 628
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.
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INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
April 14, 2004
Consideration of Fiscal Year 2004/05
Investment Policies
(Please bring your copy of the Investment Policy)
BACKGROUND:
Business Session No. B
Pursuant to State Legislation the City investment policies must be approvod on an
annual basis by the City Council. This approval is dorfe in Jdne of each year.
At the previous IAB Meeting in March, Board Members discussed using the services
of an investment advisor.
Staff has reviewed the Fiscal Year 2003/04 Investment Policy and do not have any
recommended changes for next year.
RECOMMENDATION:
Continued review of the Investment policies for approval by City Council in June
2004.
John M. Falconer, Finance Director
INVESTMENT ADVISORY BOARD Correspondence & Written
Material Item A
Meeting Date: April 14, 2004
TITLE:
Month End Cash Report for March 31, 2004 and
Other selected Financial Data
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.
RECOMMENDATION:
Information item only.
n M. Falconbr, Finance Director
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FRB: H.15--Selected Interested Rates, Web -Only Daily Update --March 31, 2004
Pagel of 4
Federal Reserve Statistical Release
H.15
Selected Interest Rates (Daily)
Skip to Content
Release Date: March 31, 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
March 31, 2004
Yields in percent per annum
2004
2004
2004 2004
Mar
Mar
Mar Apr
Instruments
29
30
31 1
Federal funds (effective) 1 2 3
1.00
0.98
Commercial paper 3 4 5
Nonfinancial
1-month
1.05
1.00
2-month
0.99
1.00
3-month
1.00
1.00
Financial
1-month
1.03
1.02
2-month
1.04
1.03
3-month
1.03
1.04
CDs (secondary market) 3 6
1-month
1.03
1.04
3-month
1.05
1.06
6-month
1.09
1.09
Eurodollar deposits (London) 3 7
1-month
1.02
1.02
3-month
1.03
1.04
6-month
1.06
1.09
Bank prime loan 2 3 8
4.00
4.00
Discount window primary credit 2 9
2.00
2.00
U.S. government securities
Treasury bills (secondary market) 3 4
4-week
0.94
0.96
3-month
0.95
0.94
6-month
1.00
0.99
Treasury constant maturities
Nominal 10
1-month
0.95
0.97
3-month
0.96
0.96
6-month
1.02
1.01
1-year
1.21
1.21
2-year
1.63
1.63
3-year
2.05
2.05
5-year
2.86
2.86
7-year
3.39
3.39
10-year
3.91
3.91
3
http://www.federalreserve.gov/Releases/H 15/Update/ 4/l /2004
FRB: H.15--Selected Interested Rates, Web -Only Daily Update --March 31, 2004
Page 2 of 4
20-year
4.80
4.80
Inflation -indexed 11
5-year
0.55
0.57
7-year
1.02
1.04
10-year
1.50
1.52
Treasury long-term average
Nominal 12 13
4.86
4.86
Inflation -indexed 14
1.94
1.96
Interest rate swaps 15
1-year
1.36
1.35
2-year
1.93
1.90
3-year
2.45
2.42
4-year
2.89
2.85
5-year
3.25
3.20
7-year
3.78
3.73
10-year
4.29
4.25
30-year
5.14
5.10
Corporate bonds
Moody's seasoned
Aaa 16
5.40
5.41
Baa
6.19
6.19
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 of 7 calendar days ending on Wednesday
of the current week; monthly figures include each calendar day in
the month.
3. Annualized using a 360-day year or bank interest.
4. On a discount basis.
5. Interest rates interpolated from data on certain commercial paper
trades settled by The Depository Trust Company. The trades
represent sales of commercial paper by dealers or direct
issuers to investors (that is, the offer side). 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
hftp://www.federalreserve.gov/Releases/H15/Update/ 4/l /2004
FRB: H.15--Selected Interested Rates, Web -Only Daily Update --March 31, 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/ltcompositeindey
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 ( About
Daily update Other formats: Screen__reader I ASC11
Statistical releases
5
http://www.federalreserve.gov/Releases/H15/Update/ 4/1/2004
FRB: H.15--Selected Interested Rates, Web -Only Daily Update --March 31, 2004
Page 4 of
Horne I Economic research and data
Accessibility I Contact Us
Last update: March 31, 2004
r�
http://www.federalreserve.gov/Releases/H 15/Update/ I I4/1 /2004
Phil Angelides, State Treasurer
Inside the State Treasurer's Office
Local Agency Investment Fund (LAIF)
PMIA Performance Report
Corporate
Bonds
3.37%
Commercial
Paper
18.99%
Repo
0.18%
LAIF Performance Report
Quarter Ending 12/31/03
Apportionment Rate: 1.56%
Earnings Ratio: .00004271146380458
Fair Value Factor: 1.000591479
PMIA Average Monthly Effective Yields
December 2003 1.545%
January 2004 1.528%
February 2004 1.440%
Pooled Money Investment Account
Portfolio Composition
$53.8 Billion
02/29/04
Loans
12.01 %
Time
Deposits
10.84%
Treasuries
14.83%
CD's/BN's
15.19%
Mortgages
0.01 %
Agencies
24.58%
■ Treasuries
0 Mortgages
M Agencies
■ CD's/BN's
0Time Deposits
M Bankers Acceptances
■ Repo
■ Commercial Paper
0 Corporate Bonds
0 Loans
■ Reverses
7
FRB:Commercial Paper Rates and Outstandings
Pagel of 3
Federal Re es Release
Commercial Paper
«;r ,,:
Release I About ( Outstandings I Historical discount rates I Historical outstandings
Data as of March 31, 2004
Commercial Paper Rates and Outstandings
Derived from data supplied by The Depository Trust Company
Posted April 1, 2004
Discount rates
AA
AA
A2iP2
Term
financial
nonfinancial
nonfinancial
1-day 1.04 1.04 1
-]F—
7-day 1.02 1.02 1.10
15-day 1.01 1.06 1.08
30.day 1.02 0.99 1.16
60-day 1.02 1.01 F-1.13
F90-dayl1.04 1.02 1.20
Yield curve
Money market basis
1 7 15 30
Days to Maturity
Finand al — -- hlonfinandal ••••• A2/P2
Percent
1.20
1.18
1.16
1.14
1.12
1.10
1.08
1.06
1.04
1.02
1.00
0.98
8
http://www.federalreserve.gov/Releases/CP/ 4/1/2004
FRB:Commercial Paper Rates and Outstandings
Page 2 of 3
Discount rate spread
Thirtv-dav A2/P2 less AA nonfinancial commercial paper (daily)
Basis points
110
100
90
$0
70
60
40
30
20
10
0
01JUL01 01 JAN02 01JUL02 01 JIAN03 01JUL03 01 JIAN04 01 JUL04
A'2 ,/,FI ' upF:3, : --- A2/P2 spread. 5—day rnoyinq avenags
Discount rate history
Thirtv-dav commercial paper (daily)
01 J UL01 01 JIAN02 01 JUL02 01 JIAN03 01 JUL03
Financial — -- Nonfinancial ..... A2/P2
Outstandings
Weekly (Wednesday), seasonally adjusted
Billions of dollars
http://www.federalreserve.gov/Releases/CP/
Percent
5
4
3
2
1
r�
01 JAN04 01 JU L04
Billions of dollars
9
4/1/2004
FRB:Commercial Paper Rates and Outstandings
Page 3 of 3
1240
1230
1220
1210
1200
1190
1180
1170
1160
11,50
W
Y
01 JUL01 01 JAN02 01 JU L02 01 JAN03 01 JU L03 01 JAN04
— Financial — -- Nonfinancial
The daily commercial paper release will usually be available before 11:00am
EST. However, the Federal Reserve makes no guarantee regarding the timing
of the daily commercial paper release. When the Federal Reserve is closed on
a business day, yields for the previous business day will appear in the
historical discount rates table. This policy is subject to change at any time
without notice.
Commercial paper outstanding
Commercial paper outstanding, miscellaneous categories
Volume Statistics 2004:Q1
Release I About I Outstandings I Historical discount rates I Historical outstandings
Home I Statistical releases
Accessibility) Contact Us
Last update: April 1, 2004
250
240
230
220
210
200
190
180
170
160
150
140
130
120
110
100
01 JU L04
�. 10
http://www.federalreserve.gov/Releases/CP/ 4/1/2004
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11
INVESTMENT ADVISORY BOARD
Meeting Date:
TITLE:
April 14, 2004
Pooled Money Investment Board Report
for January
BACKGROUND:
Correspondence
& Written Material Item B
The Pooled Money Investment Board Report for January 2004 is included in the
agenda packet.
RECOMMENDATION:
Receive & File
, Finance Director
Philip Angelides
January 2004
STATE OF CALIFORNIA
STATE TREASURER'S OFFICE
POOLED MONEY INVESTMENT BOARD REPORT
January 2004
TABLE OF CONTENTS
SUMMARY................................................................. 01
SELECTED INVESTMENT DATA .................................... 02
PORTFOLIO COMPOSITION ........................................ 03
INVESTMENT TRANSACTIONS ..................................... 04
TIMEDEPOSITS........................................................ 12
BANK DEMAND DEPOSITS .......................................... 24
POOLED MONEY INVESTMENT BOARD DESIGNATION... 25
POOLED MONEY INVESTMENT ACCOUNT
SUMMARY OF INVESTMENT DATA
A COMPARISON OF JANUARY 2004 WITH JANUARY 2003
(DOLLARS IN THOUSANDS)
JANUARY 2004 JANUARY 2003 CHANCE
Average Daily Portfolio $ 63,486,127 $ 56,246,932 $-2,761,805
Accrued Earnings $ 69,240 $ 100,458-31,218
Effective Yield 1.628 2.103 .0.576 1
Average Life -Month End (In Days) 179 190 -11
Total Security Transactions
Amount
$
10,450,541
$
20,149,892
$
-9,699,351
Number
231
436
-206
Total Time Deposit Transactions
Amount
$
4,721,190
$
2,632,290
$
+2,088,900
Number
156
145
+11
Average Workday Investment Activity
$
768,687
$
1,084,866
$
-326,279
Prescribed Demand Account Balances
For Services
$
1,369,136
$
859,891
$
+609,245
For Uncollected Funds
$
277,363
$
207,178
+70,176
1
PHILIP ANGELIDES
TREASURER
STATE OF CALIFORNIA
INVESTMENT DIVISION SELECTED INVESTMENT DATA
ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO
(000 OMITTED)
January 31, 2004
DIFFERENCE IN
PERCENT OF
PERCENT OF
PORTFOLIO FROM
TYPE OF SECURITY
AMOUNT
PORTFOLIO
PRIOR MONTH
Government
Bills
$
1,194,296
2.21
+0.72
Bonds
0
0.00
0.00
Notes
7,547,858
13.98
-0.12
Strips
0
0.00
0.00
Total Government
$
8,742,164
16.19
+0.60
Federal Agency Coupons
$
3,935,630
7.29
-0.23
Certificates of Deposit
7,325,035
13.57
+0.95
Bank Notes
808,642
1.50
+0.01
Bankers' Acceptances
0
0.00
0.00
Repurchases
0
0.00
0.00
Federal Agency Discount Notes
10,694,643
19.81
-0.30
Time Deposits
5,862,095
10.86
+0.15
GNMAs
506
0.00
0.00
Commercial Paper
8,921,446
16.63
-1.61
FHLMC
3,779
0.01
0.00
Corporate Bonds
1,837,634
3.40
-0.23
Pooled Loans
5,852,821
10.84
+0.66
GF Loans
0
0.00
0.00
Reversed Repurchases
0
0.00
0.00
Total (All Types)
$
53,984,385
100.00
INVESTMENT ACTIVITY
Pooled Money
Other
Time Deposits
Totals
PMIA Monthly Average Effective Yield
Year to Date Yield Last Day of Month
JANUARY 2004
NUMBER
AMOUNT
231
$ 10,450,541
13
313,937
156
4,721,190
400
$ 15,485,668
1.628
1.594
is
DECEMBER 2003
NUMBER
AMOUNT
344
$ 16,171,395
30
410,418
109
1,818,500
483
$ 18,400,313
1.545
1.605
Corp,
Bo
3.4
Commercial
Paper
16.53%
Timi
Pooled Money Investment Account 01/31/04
Portfolio Composition
$53.9 Billion
Loans Treasuries
10.84% 16.19%
CD's/BN's
15.07%
3
ortgages
0.01 %
.:.jncies
'.10%
Treasuries
Mortgages
o Agencies
0 CD's/BN's
0 Time Deposits
M Bankers Acceptances
■ Repo
0 Commercial Paper
■ Corporate Bonds
0 Loans
Reverses
01/02/04 REDEMPTIONS
BN
WORLD
1.060%
01/02/04
1.080
50,000
29
43,500.00
1.095
BN
WORLD
1.060%
01/02/04
1.080
50,000
29
43,500.00
1.095
BN
WORLD
1.060%
01/02/04
1.080
50,000
29
43,500.00
1.095
CD
MONTREAL
1.080%
01/02/04
1.080
50,000
94
141,000.00
1.095
CD
MONTREAL
1.080%
01/02/04
1.080
50,000
94
141,000.00
1.095
CD
MONTREAL
1.080%
01/02/04
1.080
50,000
94
141,000.00
1.095
CD
MONTREAL
1.080%
01/02/04
1.080
50,000
94
141,000.00
1.095
CD
W/F
1.060%
01/02/04
1.060
50,000
94
138,388.89
1.075
CD
W/F
1.060%
01/02/04
1.060
50,000
94
138,388.89
1.075
CD
W/F
1.060%
01/02/04
1.060
50,000
94
138,388.89
1.075
CD
W/F
1.060%
01/02/04
1.060
50,000
94
138,388.89
1.075
CP
CITI GLOBAL
01/02/04
1.080
10,000
10
3,000.00
1.095
CP
CITI GLOBAL
01/02/04
1.080
50,000
10
15,000.00
1.095
CP
CITI GLOBAL
01/02/04
1.080
50,000
10
15,000.00
1.095
CP
CITI GLOBAL
0-1/02/04
1.080
50,000
10
15,000.00
1.095
DISC NOTES
FHLB
01/02/04
1.030
50,000
22
31,472.00
1.045
DISC NOTES
FHLB
01/02/04
1.030
50,000
22
31,472.00
1.045
DISC NOTES
FHLB
01/02/04
1.030
50,000
22
31,472.00
1.045
DISC NOTES
FHLB
01/02/04
1.030
50,000
22
31,472.00
1.045
DISC NOTES
FHLB
01/02/04
1.040
50,000
22
31,777.78
1.055
DISC NOTES
FHLB
01/02/04
1.040
50,000
22
31,777.78
1.055
01/02/04 NO PURCHASES
01/05/04 REDEMPTIONS
CP COUNTRY 01/05/04
CP COUNTRY 01/05/04
01/05/04 NO PURCHASES
01/06/04 REDEMPTIONS
1.120 50,000 6 9,333.33 1.136
1.120 50,000 6 9,333.33 1.136
CP
COUNTRY
01/06/04
1.120
50,000
7
10,888.90
1.136
CP
COUNTRY
01/06/04
1.120
42,000
7
9,146.67
1.136
CP
ASCC
01/06/04
1.100
29,500
7
6,309.72
1.116
CP
GECC
01/06/04
1.030
50,000
8
11,444.44
1.045
CP
GECC
01/06/04
1.030
50,000
8
11,444.44
1.045
CP
COUNTRY
01/06/04
1.130
50,000
15
23,541.50
1.146
CP
COUNTRY
01/06/04
1.130
42,055
15
19,800.76
1.146
01/06/04 PURCHASES
CP
GOLDMAN
05/28/04
1.080
50,000
CP
GOLDMAN
05/28/04
1.080
29,300
CP
GMAC
05/10/04
1.340
40,000
CP
BEAR
05/05/04
1.050
50,000
CP
BEAR
05/05/04
1.050
50,000
CP
FCAR
06/16/04
1.090
30,000
2
01/06/04 PURCHASES (continued)
DISC NOTES FNMA 06/01/04 1.055 50,000
DISC NOTES FNMA 06/01/04 1.055 50,000
01/07/04 NO REDEMPTIONS
01/07/04 PURCHASES
CD
SOC GEN
1.050%
05/10/04
1.050
50,000
CD
SOC GEN
1.050%
05/10/04
1.050
50,000
CD
SOC GEN
1.050%
05/10/04
1.050
50,000
CD
SOC GEN
1.050%
05/10/04
1.050
50,000
CD
BNPARIS
1.085%
06/16/04
1.080
50,000
CD
BNPARIS
1.085%
06/16/04
1.080
50,000
CD
BK SCOT
1.105%
06/30/04
1.100
50,000
CD
BK SCOT
1.105%
06/30/04
1.100
50,000
CP
SAFEWAY
02/10/04
1.060
50,000
CP
SAFEWAY
02/25/04
1.100
30,000
CP
B/A
06/01/04
1.080
50,000
CP
B/A
06/01/04
1.080
50,000
CP
B/A
06/08/04
1.080
50,000
CP
B/A
06/08/04
1.080
50,000
CP
B/A
06/16/04
1.080
50,000
CP
B/A
06/16/04
1.080
50,000
DISC NOTES
FHLMC
05/10/04
1.040
18,367
DISC NOTES
FHLMC
05/10/04
1.040
50,000
DISC NOTES
FHLMC
06/01/04
1.060
50,000
DISC NOTES
FHLMC
06/01/04
1.055
50,000
TREAS
BILLS
07/01/04
0.980
50,000
TREAS
BILLS
07/01/04
0.980
50,000
TREAS
BILLS
07/01/04
0.980
50,000
TREAS
BILLS
07/01/04
0.980
50,000
01/08/04 NO REDEMPTIONS
01/08/04 PURCHASES
CD
BK SCOT
1.070% 05/11/04
1.060
50,000
CD
UBS
1.090% 06/30/04
1.080
30,000
CP
GMAC
05/03/04
1.330
30,000
CP
GOLDMAN
05/26/04
1.060
41,000
CP
GOLDMAN
05/26/04
1.060
50,000
01/09/04 REDEMPTIONS
CD
UBS
1.065% 01/09/04
1.060
50,000
151
222,310.20
1.075
CD
TORONTO
1.100% 01/09/04
1.100
50,000
156
238,333.33
1.115
CD
TORONTO
1.100% 01/09/04
1.100
50,000
156
238,333.33
1.115
CP
CITICORP
01/09/04
1.070
50,000
95
141,180.56
1.088
CP
CITICORP
01/09/04
1.070
50,000
95
141,180.56
1.088
CP
CITICORP
01/09/04
1.070
50,000
95
141,180.56
1.088
5
01/09/04 REDEMPTIONS (continued)
CP
GECC
CP
GECC
CP
GECC
CP
GECC
CP
FCAR
DISC NOTES
FNMA
DISC NOTES
FNMA
DISC NOTES
FNMA
01/09/04 NO PURCHASES
01/12/04 REDEMPTIONS
CP
GECC
CP
GECC
CP
BARTON
CP
BARTON
CP
DISNEY
CP
CITICORP
01/12/04 PURCHASES
CD
BK SCOT
CP
SPARC
CP
GMAC
CP
FCAR
CP
FCAR
01/13/04 REDEMPTIONS
CP
CITICORP
01/13/04 PURCHASES
CD
WASHINGTON
CD'
WASHINGTON
CP
B/A
01/14/03 NO REDEMPTIONS
01/14/04 NO PURCHASES
01/15/04 REDEMPTIONS
CP
FCAR
CP
FCAR
DISC NOTES
FHLMC
DISC NOTES
FHLMC
DISC NOTES
FNMA
DISC NOTES
FNMA
01/09/04
1.080
50,000
154
,231,000.00
1.100
01/09/04
1.080
50,000
154
231,000.00
1.100
01/09/04
1.080
50,000
154
231,000.00
1.100
01/09/04
1.080
50,000
154
231,000.00
1.100
01/09/04
1.100
36,000
156
171,600.00
1.121
01/09/04
1.050
50,000
57
83,125.00
1.066
01/09/04
1.070
50,000
154
228,861.11
1.090
01/09/04
1.070
50,000
154
228,861.11
1.090
01/12/04
1.030
30,000
13
11,158.33
1.045
01/12/04
1.030
50,000
13
18,597.20
1.045
01/12/04
1.080
33,689
49
49,522.83
1.097
01/12/04
1.080
50,000
49
73,500.00
1.097
01/12/04
1.110
20,000
68
41,933.33
1.128
01/12/04
1.070
50,000
97
144,152.78
1.088
1.060% 06/30/04
02/09/04
03/26/04
06/16/04
06/16/04
1.060 25,000
1.050 22,000
1.300 50,000
1.060 6,000
1.060 50,000
01/13/04 1.070 50,000 98 145,638.89 1.088
1.090% 06/16/04 1.090 50,000
1.090% 06/16/04 1.090 50,000
06/01/04 1.050 50,000
01/15/04
1.090
50,000
160
242,222.22
1.111
01/15/04
1.090
50,000
160
242,222.22
1.111
01/15/04
1.085
40,000
147
177,216.67
1.105
01/15/04
1.085
50,000
147
221,520.83
1.105
01/15/04
1.090
50,000
156
236,166.67
1.110
01/15/04
1.090
50,000
156
236,166.67
1.110
C.1
01/15/04 PURCHASES
CD BNPARIS
1.050%
06/25/04
1.050
50,000
CD BNPARIS
1.050%
06/25/04
1.050
50,000
CD WASHINGTON
1.080%
06/25/04
1.080
50,000
CD WASHINGTON
1.080%
06/25/04
1.080
50,000
CID W/F
03/30/04
1.020
50,000
CID W/F
03/30/04
1.020
50,000
CID CITI GLOBAL
05/28/04
1.040
50,000
CID CITI GLOBAL
05/28/04
1.040
50,000
01/16/04 NO REDEMPTIONS
01/16/04 PURCHASES c/
DISC NOTES FHLB
03/19/04
1.010
50,000
DISC NOTES FHLB
03/19/04
1.010
25,000
DISC NOTES FHLMC
05/10/04
1.010
27,354
01/20/04 REDEMPTIONS
CD W/F
1.040%
01/20/04
1.040
50,000
20
28,888.89
1.054
CD W/F
1.040%
01/20/04
1.040
50,000
20
28,888.89
1.054
CD W/F
1.040%
01/20/04
1.040
50,000
20
28,888.89
1.054
CD W/F
1.040%
01/20/04
1.040
50,000
20
28,888.89
1.054
CD WASHINGTON
1.140%
01/20/04
1.140
50,000
153
242,250.00
1.156
CD WASHINGTON
1.140%
01/20/04
1.140
50,000
153
242,250.00
1.156
CID NCAT
01/20/04
1.080
50,000
109
163,500.00
1.099
CP NCAT
01/20/04
1.080
50,000
109
163,500.00
1.099
MTN FR GMAC
6.459%
01/20/04
6.459
50,000
1097 4,802,130.83
3.196
01/20/04 SALES c/
DISC NOTES FHLB
03/19/04
1.010
50,000
4
5,483.96
1.024
DISC NOTES FHLB
03/19/04
1.010
25,000
4
2,741.92
1.024
DISC NOTES FHLMC
05/10/04
1.010
27,354
4
2,996.33
1.024
01/20/04 PURCHASES
BN WORLD
1.040%
04/12/04
1.045
8,600
BN WORLD
1.040%
04/12/04
1.045
50,000
BN WORLD
1.040%
04/12/04
1.045
50,000
BN WORLD
1.040%
04/12/04
1.045
50,000
CD BNPARIS
1.050%
06/23/04
1.050
45,000
CID BEAR
04/01/04
1.030
50,000
CID BEAR
04/01/04
1.030
50,000
01/21/04 NO REDEMPTIONS
01/21/04 NO PURCHASES
01/22/04 NO REDEMPTIONS
7
01/22/04 PURCHASES
CD
W/F
1.020%
04/28/04
1.020
50,000
CD
W/F
1.020%
04/28/04
1.020
50,000
CD
RB SCOT
1.050%
06/30/04
1.050
50,000
CD
RB SCOT
1.050%
06/30/04
1.050
50,000
CD
SOC GEN
1.050%
06/30/04
1.060
50,000
CD
SOC GEN
1.050%
06/30/04
1.050
50,000
CP
COUNTRY
01/29/04
1.030
50,000
CP
GMAC
02/27/04
1.260
50,000
01/23/04 NO REDEMPTIONS
01/23/04 PURCHASES
CD
RB SCOT
1.050%
06/25/04
1.050
50,000
TREAS
BILLS
07/22/04
0.925
50,000
TREAS
BILLS
07/22/04
0.925
50,000
TREAS
BILLS
07/22/04
0.925
50,000
TREAS
BILLS
07/22/04
0.925
50,000
01/26/04 NO REDEMPTIONS
01/26/04 PURCHASES
CD
W/F
1.020%
05/28/04
1.020
50,000
CD
W/F
1.020%
05/28/04
1.020
50,000
CD
TORONTO
1.050%
06/30/04
1.045
50,000
CD
TORONTO
1.050%
06/30/04
1.045
50,000
DISC NOTES
FHLMC
06/16/04
1.010
10,000
DISC NOTES
FHLMC
06/16/04
1.010
50,000
DISC NOTES
FHLMC
06/16/04
1.010
50,000
DISC NOTES
FHLMC
06/16/04
1.010
43,500
DISC NOTES
FHLMC
06/16/04
1.010
50,000
01/27/04 REDEMPTIONS
CP
SPARC
01/27/04
1.100
20,000
40
24,444.44
1.117
CP
TEXT FIN
01/27/04
1.170
25,000
85
69,062.50
1.190
CP
ASCC
01/27/04
1.090
14,659
91
40,389.62
1.108
CP
ASCC
01/27/04
1.090
50,000
91
137,763.89
1.108
CP
FMCC
01/27/04
1.370
50,000
91
173,152.78
1.394
01/27/04 NO PURCHASES
01/28/04 REDEMPTIONS
CD
TORONTO
1.110%
01/28/04
1.110
50,000
160
246,666.67
1.125
CD
TORONTO
1.110%.
01/28/04
1.110
50,000
160
246,666.67
1.125
CP
CITI GLOBAL
01/28/04
1.070
50,000
117
173,875.00
1.089
CP
CITI GLOBAL
01/28/04
1.070
50,000
117
173,875.00
1.089
CP
HOUSEHOLD
01/28/04
1.100
20,000
126
77,000.00
1.120
8
01/28/04 REDEMPTIONS (continued)
CP
NCAT
01/28/04
1.080
40,000
126
151,200.00
1.099
CP
HOUSEHOLD
01/28/04
1.100
50,000
126
192,500.00
1.120
CP
NCAT
01/28/04
1.080
50,000
126
189,000.00
1.099
CP
NCAT
01/28/04
1.100
25,000
156
119,166.67
1.121
CP
NCAT
01/28/04
1.100
50,000
156
238,333.33
1.121
CP
NCAT
01/28/04
1.100
50,000
156
238,333.33
1.121
CP
NCAT
01/28/04
1.100
50,000
156
238,333.33
1.121
CP
JP MORGAN
01/28/04
1.100
10,000
160
48,888.89
1.121
CP
JP MORGAN
01/28/04
1.100
50,000
160
244,444.44
1.121
CP
JP MORGAN
01/28/04
1.100
50,000
160
244,444.44
1.121
CP
GMAC
01/28/04
1.330
50,000
161
297,402.78
1.357
CP
GECC
01/28/04
1.080
50,000
170
255,000.00
1.101
CP
GECC
01/28/04
1.080
50,000
170
255,000.00
1.101
CP
GECC
01/28/04
1.080
50,000
170
255,000.00
1.101
CP
GECC
01/28/04
1.080
50,000
170
255,000.00
1.101
DISC NOTES
FNMA
01/28/04
1.055
50,000
76
111,361.11
1.072
DISC NOTES
FNMA
01/28/04
1.055
50,000
76
111,361.11
1.072
DISC NOTES
FNMA
01/28/04
1.055
50,000
76
111,361.11
1.072
DISC NOTES
FNMA
01/28/04
1.070
50,000
121
179,819.44
1.089
DISC NOTES
FNMA
01/28/04
1.080
30,000
155
139,500.00
1.100
DISC NOTES
FHLB
01/28/04
1.090
46,700
155
219,165.69
1.110
DISC NOTES
FNMA
01/28/04
1.080
50,000
155
232,500.00
1.100
DISC NOTES
FNMA
01/28/04
1.080
50,000
156
234,000.00
1.100
DISC NOTES
FNMA
01/28/04
1.080
50,000
156
234,000.00
1.100
01/28/04 PURCHASES
SBA FR 1.300% 12/25/28 1.300 6,059
SBA FIR 1.300% 12/25/28 1.300 29,653
01/29/04 REDEMPTIONS
CP
COUNTRY
01/29/04
1.030
50,000
7
10,013.89
1.045
CP
DFC
01/29/04
1.080
1,368
37
1,518.00
1.096
CP
DFC
01/29/04
1.080
50,000
37
55,500.00
1.096
01/29/04 PURCHASES
CD
SOC GEN
1.075% 06/25/04
1.070
50,000
CD
SOC GEN
1.075% 06/25/04
1.070
50,000
CP
HOUSEHOLD
05/28/04
1.040
10,000
CP
HOUSEHOLD
05/28/04
1.040
50,000
CP
HOUSEHOLD
05/28/04
1.040
50,000
CP
FCAR
06/25/04
1.070
43,000
01/30/04 REDEMPTIONS
FHLB 3.000% 01/30/04 3.000 50,000 791 3,250,000 3.000
FHLB 3.000% 01/30/04 3.000 50,000 791 3,250,000 2.999
CB GMAC 6.380% 01/30/04 3.760 20,000 583 1,231,111.11 3.705
01/30/04 REDEMPTIONS (continued)
MTN GMAC 6.380% 01/30/04 2.650 18,500 354 489,435.11 2.634
MTN GMAC 6.380% 01/30/04 6.030 9,380 1015 1,579,092.09 6.001
01/30/04 PURCHASES
CID
GECC
02/02/04
1.020
50,000
CID
GECC
02/02/04
1.020
50,000
CID
GECC
02/02/04
1.020
50,000
CID
GECC
02/02/04
1.020
50,000
DISC NOTES
FNMA
06/16/04
1.030
50,000
DISC NOTES
FNMA
06/16/04
1.030
50,000
DISC NOTES
FHLMC
06/16/04
1.030
50,000
DISC NOTES
FHLMC
06/16/04
1.030
50,000
DISC NOTES
FNMA
06/16/04
1.030
50,000
DISC NOTES
FNMA
06/16/04
1.030
50,000
DISC NOTES
FNMA
06/16/04
1.030
50,000
DISC NOTES
FNMA
06/16/04
1.030
50,000
DISC NOTES
FNMA
06/30/04
1.030
50,000
DISC NOTES
FNMA
06/30/04
1.030
50,000
01/31/04 REDEMPTIONS
TREAS
NOTES
3.000%
01/31/04
3.158
50,000
730
3,152,343.75
3.158
TREAS
NOTES
3.00.0%
01/31/04
3.158
50,000
730
3,152,343.75
3.158
TREAS
NOTES
3.000%
01/31/04
3.020
50,000
730
3,019,000.00
3.019
TREAS
NOTES
3.000%
01/31/04
3.020
50,000
730
3,019,000.00
3.019
TREAS
NOTES
3.000%
01/31/04
3.060
50,000
730
3,057,773.50
3.060
TREAS
NOTES
3.000%
01/31/04
3.060
50,000
730
3,057,773.50
3.060
TREAS
NOTES
3.000%
01/31/04
3.150
50,000
730
3,144,531.25
3.150
TREAS
NOTES
3.000%
01/31/04
3.015
50,000
730
3,014,500.00
3.015
TREAS
NOTES
3.000%
01/31/04
3.015
50,000
730
3,014,500.00
3.015
TREAS
NOTES
3.000%
01/31/04
3.015
50,000
730
3,014,451.50
3.015
TREAS
NOTES
3.000%
01/31/04
3.015
50,000
730
3,014,451.50
3.015
TREAS
NOTES
3.000%
01/31/04
3.090
50,000
717
3,032,070.10
3.090
TREAS
NOTES
3.000%
01/31/04
3.090
50,000
717
3,032,070.10
3.090
10
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.
g/ Outright purchase against Reverse Repurchase Agreement.
h/ Security "SWAP" transactions.
V Buy back agreement.
RRS Reverse Repurchase Agreement.
RRP Termination of Reverse Repurchase Agreement.
11
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT ($) DATE
ALHAMBRA
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
Bank of East Asia (USA)
01/14/04
1.020
3,095,000.00
07/14/04
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
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
Mid -State Bank
01/15/04
1.010
5,000,000.00
07/15/04
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
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
First California Bank
01/28/04
1.030
2,000,000.00
07/28/04
First California Bank
01/28/04
1.030
4,000,000.00
07/28/04
CAMERON PARK
Western Sierra National Bank
08/15/03
1.070
6,000,000.00
02/11/04
Western Sierra National Bank
01/14/04
0.990
7,000,000.00
07/14/04
12
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
ELSEGUNDO
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
Westamerica Bank
FRESNO
United Security Bank
TIME DEPOSITS
DEPOSIT PAR MATURITY
DATE YIELD AMOUNT ($) DATE
12/18/03
0.960
20,000,000.00
03/18/04
12/11/03
1.070
6,000,000.00
06/10/04
01 /29/04
1.030
6, 000, 000.00
07/29/04
08/14/03 1.070 5,000,000.00 02/11/04
10/08/03 1.050 5,000,000.00 04/07/04
12/12/03 1.040 10,000,000.00 06/11/04
01/07/04 1.000 20,000,000.00 04/08/04
01/16/04 0.960 20,000,000.00 04/16/04
01/23/04 0.960 32,500,000.00 04/23/04
12/04/03
0.990
2,000,000.00
03/03/04
01/22/04
1.020
2,000,000.00
07/21/04
08/07/03
1.090
15,000,000.00
02/05/04
01/07/04
0.970
60,000,000.00
04/08/04
10/16/03
1.070
35,000,000.00
04/14/04
11/20/03
1.090
25,000,000.00
05/20/04
01/07/04
1.080
50,000,000.00
07/07/04
09/04/03
1.110
20,000,000.00
03/04/04
09/08/03
1.090
7,000,000.00
03/10/04
11/20/03
1.100
20,000,000.00
05/20/04
01 /09/04
0.960
60, 000,000.00
04/09/04
01/14/04
0.910
30,000,000.00
04/15/04
01/22/04
0.920
50,000,000.00
04/23/04
01 /21 /04 0.950 40, 000, 000.00 04/21 /04
13
NAME
FULLERTON
Fullerton Community Bank
Fullerton Community Bank
GOLETA
Pacific Capital Bank
Pacific Capital Bank
Pacific Capital Bank
Pacific Capital Bank
Pacific Capital Bank
Pacific Capital Bank
GRANADA HILLS
First State Bank of California
First State Bank of California
IRVINE
Commercial Capital Bank
Commercial Capital Bank
Commercial Capital Bank
Commercial Capital Bank
Commercial Capital Bank
Commercial Capital Bank
Commercial Capital Bank
Commercial Capital Bank
LA JOLLA
Silvergate Bank
LAKEPORT
Lake Community Bank
LODI
Bank of Lodi
Farmers & Merchant Bk Cen CA
TIME DEPOSITS
DEPOSIT PAR MATURITY
DATE YIELD AMOUNT ($) DATE
11/19/03 1.080 9,000,000.00 05/19/04
01/23/04 1.020 8,000,000.00 07/23/04
08/15/03
1.070
16,000,000.00
02/13/04
07/25/03
0.990
45,000,000.00
02/13/04
01/09/04
0.960
23,000,000.00
04/01/04
09/17/03
1.050
25,000,000.00
04/01/04
10/01/03
1.050
30,000,000.00
04/01/04
12/10/03
1.030
85,000,000.00
06/09/04
09/19/03 1.040 2,000,000.00 03/19/04
10/23/03 1.060 3,000,000.00 04/22/04
08/20/03
1.070
15,000,000.00
02/19/04
08/28/03
1.090
14,000,000.00
02/26/04
10/17/03
1.040
10,000,000.00
04/15/04
10/31/03
1.060
20,000,000.00
04/29/04
11/20/03
1.070
20,000,000.00
05/20/04
12/17/03
1.020
10,000,000.00
06/16/04
01/08/04
1.060
10,000,000.00
07/08/04
07/29/04
1.010
10,000,000.00
07/29/04
09/12/03 1.080 5,000,000.00 03/12/04
01 /14/04
09/23/03
10/10/03
14
0.990 2,000,000.00 07/14/04
1.090 5,000,000.00 03/24/04
1.050 10,000,000.00 04/08/04
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT ($) DATE
LOS ANGELES
Broadway Federal Bank
09/11/03
1.080
3,000,000.00
03/12/04
Broadway Federal Bank
01/09/04
1.070
2,500,000.00
07/09/04
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
Cathay Bank
01/07/04
0.970
38,000,000.00
04/08/04
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
Cedars Bank
01/07/04
1.080
5,000,000.00
07/07/04
Center Bank
09/18/03
1.060
40,000,000.00
03/17/04
Center Bank
01/07/04
0.970
10,000,000.00
04/08/04
Center Bank
12/23/03
1.000
5,000,000.00
06/23/04
Center Bank
01/22/04
1.010
5,000,000.00
07/21/04
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
CHB America Bank
01/15/04
0.990
1,000,000.00
07/15/04
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
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
Hanmi Bank
01/16/04
0.940
25,000,000.00
04/16/04
Mellon First Business Bank
12/18/03
0.950
50,000,000.00
03/18/04
Mellon First Business Bank
01/09/04
0.960
50,000,000.00
04/09/04
Mirae Bank
04/16/04
0.940
4,000,000.00
04/16/04
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
01/07/04
0.970
5,000,000.00
04/08/04
Nara Bank, NA
10/23/03
1.080
10,000,000.00
04/22/04
Nara Bank, NA
01/23/04
0.930
10,000,000.00
04/23/04
Nara Bank, NA
11/14/03
1.110
5,000,000.00
05/13/04
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
Pacific Union Bank
01/08/04
1.080
10,000,000.00
07/08/04
15
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
NAME
DATE
YIELD
AMOUNT ($j
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)
11/20/03
1.000
2,000,000.00
05/20/04
State Bank of India (California)
01/07/04
1.090
3,000,000.00
07/07/04
Western Federal Credit Union
10/23/03
1.080
30,000,000.00
04/22/04
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
01/08/04
0.970
7,000,000.00
04/09/04
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
12/10/03
0.970
10,000,000.00
03/10/04
County Bank
01/15/04
0.940
10,000,000.00
04/16/04
County Bank
12/03/03
1.100
5,000,000.00
06/02/04
MONTEREY PARK
Trust Bank FSB
01/07/04
1.080
3,000,000.00
07/07/04
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
11/13/03
1.000
20,000,000.00
02/13/04
Safe Credit Union
01/16/04
0.930
5,000,000.00
04/16/04
OAKDALE
Oak Valley Community Bank
12/18/03
0.950
3,500,000.00
03/18/04
Oak Valley Community Bank
01/16/04
0.930
2,500,000.00
04/16/04
16
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT ($) DATE
OAKLAND
Metropolitian Bank
08/28/03
1.090
1,000,000.00
02/26/04
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
OAKLAND (continued)
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
Metropolitian Bank
01/23/04
1.010
1,000,000.00
07/23/04
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
08/20/03
1.100
20,000,000.00
02/19/04
Coast Commercial Bank
01/14/04
1.030
5,000,000.00
07/14/04
Cupertino National Bank
09/10/03
1.080
10,000,000.00
03/11/04
Cupertino National Bank
10/29/03
1.090
35,000,000.00
04/28/04
Cupertino National Bank
11/21/03
1.090
20,000,000.00
05/21/04
Cupertino National Bank
01/14/04
1.020
10,000,000.00
07/14/04
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
1.060
2,000,000.00
02/20/04
Malaga Bank
11/19/03
0.980
8,000,000.00
02/20/04
17
N.ME
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
11/14/03
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
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
01 /09/04
1.070
10, 000, 000.00
07/09/04
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 0.960 6,000,000.00 03/19/04
08/29/03 1.110 8,000,000.00 02/27/04
12/10/03 1.050 20,000,000.00 06/09/04
10/23/03 1.090 10,000,000.00 04/22/04
18
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
NAME
DATE
YIELD
AMOUNT ($)
DATE
La Jolla Bank, FSB
08/08/03
1.060
25,000,000.00
02/04/04
La Jolla Bank, FSB
11/14/03
0.980
15,000,000.00
02/13/04
La Jolla Bank, FSB
09/04/03
1.090
10,000,000.00
03/04/04
La Jolla Bank, FSB
12/05/03
0.960
10,000,000.00
03/05/04
La Jolla Bank, FSB
11/20/03
1.070
25,000,000.00
05/20/04
REDDING
North Valley Bank 12/12/03 1.040 3,000,000.00 06/11 /04
REDWOOD CITY
Provident Central Credit Union 10/31/03 1.060 20,000,000.00 04/29/04
ROCKLIN
Five Star Bank
10/01/03
1.050
2,000,000.00
03/31/04
Five Star Bank
01/28/04
1.000
2,000,000.00
07/28/04
RICHMOND
Mechanics Bank
03/07/03
1.290
10,000,000.00
03/03/04
Mechanics Bank
04/01/03
1.320
10,000,000.00
04/01/04
Mechanics Bank
04/23/03
1.390
10,000,000.00
04/21/04
Mechanics Bank
06/12/03
1.090
10,000,000.00
06/09/04
Mechanics Bank
07/09/03
1.110
10,000,000.00
07/08/04
Mechanics Bank
08/08/03
1.370
10,000,000.00
08/04/04
Mechanics Bank
09/12/03
1.290
10,000,000.00
09/10/04
Mechanics Bank
10/15/03
1.260
10,000,000.00
10/15/04
Mechanics Bank
10/31/03
1.300
10,000,000.00
10/29/04
Mechanics Bank
11/07/03
1.380
10,000,000.00
11/05/04
RIVERSIDE
Provident Savings Bank
09/25/03
1.080
25,000,000.00
03/25/04
SACRAMENTO
American River Bank
08/29/03
1.090
2,000,000.00
02/27/04
American River Bank
09/25/03
1.060
2,000,000.00
03/25/04
American River Bank
10/09/03
1.030
1,500,000.00
04/07/04
American River Bank
12/19/03
1.030
1,000,000.00
06/18/04
American River Bank
01/09/04
1.050
1,000,000.00
07/09/04
19
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
NAME
DATE
YIELD
AMOUNT ($)
DATE
American River Bank
01/29/04
1.010
1,500,000.00
07/29/04
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
10/15/03
1.050
2,000,000.00
04/14/04
Merchants National Bank
01/22/04
1.010
2,000,000.00
07/21/04
River City Bank
08/28/03
1.120
2,000,000.00
02/26/04
River City Bank
10/09/03
1.060
2,000,000.00
04/07/04
SACRAMENTO (continued)
River City Bank
01/29/04
0.970
3,000,000.00
04/30/04
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
U.S. Bank
01/08/04
1.090
100,000,000.00
07/08/04
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
Union Bank of California
01/16/04
0.940
175,000,000.00
04/16/04
SAN BERNARDINO
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
Mission Federal Credit Union
01/15/04
1.020
10,000,000.00
07/15/04
Neighborhood National Bank
08/22/03
1.100
2,000,000.00
02/20/04
North Island Federal Credit Union
01/09/04
0.980
5,000,000.00
04/09/04
SAN FRANCISCO
American California Bank
01/08/04
1.090
4,000,000.00
07/08/04
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
Bank of the West
01/07/04
0.970
134,000,000.00
04/08/04
Bank of the West
01/28/04
0.950
76,500,000.00
04/29/04
Bank of the West
01/29/04
0.950
100,000,000.00
04/29/04
NAME
TIME DEPOSITS
DEPOSIT PAR MATURITY
DATE YIELD AMOUNT ($) DATE
Citibank (West) FSB
01/08/04
1,108
150,000,000.00
07/08/04
Citibank (West) FSB
01/15/04
1.050
100,000,000.00
07/15/04
Citibank (West) FSB
01/22/04
1.050
100,000,000.00
07/21/04
Citibank (West) FSB
01/28/04
1.050
25,000,000.00
07/28/04
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
SAN FRANCISCO (continued)
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
01/07/04
0.980
40,000,000.00
04/08/04
United Commercial Bank
01/08/04
0.980
55,000,000.00
04/09/04
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
United Commercial Bank
01/14/04
1.020
50,000,000.00
07/14/04
United Commercial Bank
01/28/04
1.030
40,000,000.00
07/28/04
SANJOSE
Comerica Bank of California
01/07/04
0.980
134,000,000.00
04/08/04
Comerica Bank of California
01/16/04
0.940
183,000,000.00
04/16/04
Heritage Bank of Commerce
08/15/03
1.100
2,000,000.00
02/11/04
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
Meriwest Credit Union
01/22/04
1.040
5,000,000.00
07/21/04
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
21
TIME DEPOSITS
DEPOSIT PAR MATURITY
NAME DATE YIELD AMOUNT ($) DATE
SAN MARINO
East West Federal Bank
08/08/03
1.080
35,000,000.00
02/06/04
East West Federal Bank
09/12/03
1.070
35,000,000.00
03/12/04
East West Federal Bank
11/20/03
1.090
38,000,000.00
05/20/04
East West Federal Bank
01/09/04
1.070
42,000,000.00
07/09/04
SAN RAMON
Sterlent Credit Union 01/21/04 0.930 1,000,000.00 03/25/04
SANTA ROSA
National Bank of the Redwoods
08/13/03
1.090
5,000,000.00
02/11/04
National Bank of the Redwoods
10/31/03
1.080
5,000,000.00
04/29/04
National Bank of the Redwoods
01/22/04
1.010
10,000,000.00
07/21/04
North Coast Bank
09/19/03
1.070
1,250,000.00
03/19/04
North Coast Bank
12/16/03
1.040
1,250,000.00
06/17/04
SONORA
Central California Bank
09/26/03
1.070
5,000,000.00
03/26/04
STOCKTON
Pacific State Bank
10/09/03
1.050
1,000,000.00
04/07/04
Pacific State Bank
01/08/04
1.090
1,000,000.00
07/08/04
Union Safe Deposit Bank
11/06/03
1.010
15,000,000.00
02/05/04
Union Safe Deposit Bank
08/15/03
1.100
1.5,000,000.00
02/13/04
Union Safe Deposit Bank
09/05/03
1.120
15,000,000.00
03/05/04
Union Safe Deposit Bank
12/12/03
0.970
10,000,000.00
03/11/04
Union Safe Deposit Bank
01/15/04
0.940
10,000,000.00
04/16/04
Union Safe Deposit Bank
01/23/04
0.940
15,000,000.00
04/23/04
Washington Mutual Bank
08/21/03
1.100
60,000,000.00
02/20/04
Washington Mutual Bank
12/17/03
1.040
45,000,000.00
06/16/04
Washington Mutual Bank
01/22/04
1.010
75,000,000.00
07/21/04
TORRANCE
China Trust Bank (USA)
11/13/03
0.990
20,000,000.00
02/13/04
China Trust Bank (USA)
09/12/03
1.070
35,000,000.00
03/1.2/04
China Trust Bank (USA)
01/16/04
0.940
15,000,000.00
04/16/04
22
iL•Ii
China Trust Bank (USA)
China Trust Bank (USA)
TRACY
Service 1 st Bank
TUSTIN
TIME DEPOSITS
DEPOSIT
PAR
MATURITY
DATE
YIELD AMOUNT
DATE
01/16/04
0.940 25,000,000.00
04/16/04
01/22/04
0.930 30,000,000.00
04/23/04
09/18/03 1.070 4,000,000.00 03/17/04
Sunwest Bank
08/14/03
Sunwest Bank
12/11 /03
Sunwest Bank
01 /16/04
VACAVILLE
Travis Credit Union
12/04/03
WHITTIER
Quaker City Bank
10/01 /03
Quaker City Bank
12/05/03
Quaker City Bank
01/14/04
TOTAL TIME DEPOSITS JANUARY 2004
23
1.070
7,800,000.00
02/11/04
0.950
1,000,000.00
03/10/04
0.910
6,000,000.00
04/16/04
1.090
40,000,000.00
06/02/04
1.070 16,000,000.00 03/31/04
1.080 25,000,000.00 06/04/04
1.010 24,000,000.00 07/14/04
5,862,096,000.00
BANK DEMAND DEPOSITS
January 2003
($ in thousands)
DAILY BALANCES
DAY OF
BALANCES
WARRANTS
MONTH
PER BANKS
OUTSTANDING
1
$ 1,641,404
$ 3,207,744
2
760,842
2,621,969
3
750,842
2,621,969
4
750,842
2,621,969
5
1,294,642
2,206,804
6
1,979,094
2,490,069
7
1,769,697
2,156,510
8
1,943,901
2,193,014
9
1,919,706
2,960,793
10
1,919,706
2,960,793
11
1,919,706
2,960,793
12
1,935,181
2,766,318
13
1,865,221
2,668,003
14
1,892,851
2,426,623
15
1,821,287
2,558,057
16
2,037,059
2,416,022
17
2,037,059
2,416,022
18
2,037,059
2,416,022
19.
2,037,059
2,416,022
20
2,056,281
2,129,461
21
1,872,846
1,890,648
22
2,007,928
1,754,248
23
1,976,250
2,172,055
24
1,976,250
2,172,056
25
1,976,260
2,172,055
26
1,669,740
2,090,642
27
1,621,918
2,069,855
28
1,800,174
1,994,157
29
1,595,830
1,975,016
30
1,776,209
2,152,579
31
1,776,209
2,402,302
AVERAGE DOLLAR DAYS
$ 1,754,776
al The prescribed bank balance for January was $1,646,489. This consisted of
$1,369,136 in compensating balances for services, balances for uncollected
funds of $280,867 and a deduction of $3,514 for January delayed
deposit credit.
24
BOARD MEMBER ITEMS
CITY OF LA QUINTA
Investment Policy
Table of Contents
ect nTopic _......._._......_.........._...__....._......_._..................................
..........
ted: t
.,,.... : -�Dele—
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 '
VII-J
Hirinq of Professional Portfolio Manager(s)
6A
Vill
Conflict of Interest
7
IX
Authorized Financial Dealers and Institutions
7
► Broker/Dealers
► Financial Institutions
X
Authorized Investments and Limitations
8
XI
Investment Pools
12
XII
Safekeeping and Custody
13
XIII
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
116
XX Investment Policy Adoption
App4ndices: 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
Z
City of La Quinta
Investment Policy
Executive Summary
The general purpose of this Investment Policy is to provide the rules and standards
users must follow in investing funds of the City of La Quinta.
It is the policy of the City of La Quinta to invest all public funds in a manner which
will provide a diversified portfolio with maximum security while meeting daily cash
flow demands and the highest investment return in conformity to all state and local
statutes. This Policy applies to all cash and investments of the City of La Quinta, La
Quinta Redevelopment Agency and the La Quinta Financing Authority, hereafter
referred in this document as the "City".
The primary objectives, in order of priority, of the City of La Quinta's investment
activity shall be:
Safety of principal is the foremost objective of the investment program.
Investments of the City of La Quinta shall be undertaken in a manner that
seeks to ensure the preservation of capital in the overall portfolio
The investment portfolio shall remain sufficiently liquid to meet all operating
requirements that may be reasonably anticipated.
The investment portfolio shall be designed with the objective of attaining a
market rate of return or yield throughout budgetary and economic cycles,
taking into account the investment risk constraints and liquidity needs.
Within the constraints of safety, liquidity and yield, the City will endeavor to
maintain a diversified portfolio by allocating assets between different types of
investments within policy limitations.
Investments shall be made with judgment and care - under circumstances then
prevailing - which persons of prudence, discretion, and intelligence exercise in the
management of their own affairs, not for speculation, but for investment, considering
the probable safety of their capital as well as the probable income to be derived.
Authority to manage the City of La Quinta's investment portfolio is derived from the
City Ordinance. Management responsibility for the investment program is delegated
to the City Treasurer, who shall establish and implement written procedures for the
operation of the City's investment program consistent with the Investment Policy.
The Treasurer shall establish and implement a system of internal controls to maintain
the safety of the portfolio. In addition, the internal control system will also insure the
timely preparation and accurate reporting of the portfolio financial information. As
part of the annual audit of the City of La Quinta's financial statements the
independent auditor reviews the adequacy of those controls and comments if
weaknesses are found.
Investment responsibilities carry added duties of insuring that investments are made
without improper influence or the appearance to a reasonable person of questionable or
improper influence.
The City of La Quinta Investment Policy maintains a listing of financial institutions
which are approved for investment purposes. All Broker/Dealers and financial
institutions selected by the Treasurer to provide investment services will be approved
by the City Manager subject to City Council approval.
The Treasurer will be permitted to invest only in City approved investments up to the
maximum allowable percentages or dollar limitations and, where applicable, through
the bid process requirements. Authorized investment vehicles and related maximum
portfolio positions are listed in Appendix A - Summary of Authorized Investments and
Limitations At least two bids will be required of investments in the authorized
investment vehicles.
Collateralization will be required for Certificates of Deposits in excess of $100,000.
Collateral will always be held by an independent third party from the institution that
sells the Certificates of Deposit to the City. Evidence of compliance with State
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.
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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.
II INVESTMENT POLICY
It is the policy of the City of La Quinta to invest public funds in a manner which will
provide a diversified portfolio with safety of principal as the primary objective while
meeting daily cash flow demands with the highest investment return. In addition, the
Investment Policy will conform to all State and local statutes governing the investment
of public funds.
III SCOPE
This Investment Policy applies to all cash and investments, 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:
1. Safety
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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 with; and
IN. 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
investment is of least importance compared to the safety and liquidity objectives
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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
• - -- - .. Formatted: Bullets and Numbering
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
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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.
The City Treasurer may recommend to City Council the hiring of a professional
portfolio manager(s) for all or part of the City's investment portfolio assets. The hiring
of outside professional managers may avail the City with superior investment
expertise, greater diversification of issuers, professional hedging of interest rate risk
with analytical tools, more efficient execution and yield enhancement.
VII-A HIRING PROFESSIONAL PORTFOLIO MANAGER(S
The hiring of an outside, independent, professional portfolio manager shall be subiect
to the City's regular RFP bidding process.
Qualifying professional managers shall be part of a highly recognized organization with
a track record for managing other public funds prudently and producing performance
results in compliance with AIMR standards.
The professional management organization shall possess the necessary expertise and
specialized research facilities to manage the City's funds in accordance with the
prudent investor rule.
The professional management organization shall contract in writing with the City
Council to adhere to the City's overall investment policy and the applicable manager
guidelines as described in Appendix No. A,_
The professional management organization selected shall comply with the same
requirements established for Financial Dealers and Institutions, as outlined in Section
IX below.
Vill 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
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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.
_► The restrictions above shall not apply to investments placed by the outside•- -J Formatted: Bullets and Numbering
professional portfolio manager contracted by the City. However, the City
Manager, Assistant City Manager and the City Treasurer shall not personally or
through a close relative maintain accounts, interest or private dealings with the
professional portfolio manager hired by the City.
► 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. In the case of an outside professional portfolio manager,
this report will be an annual disclosure made by the professional portfolio
management firm of its own adherence to the AIMR code of ethics.
IX AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The City of La Quinta Investment Policy maintains a listing of financial institutions
which are approved for direct 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 direct investment transactions
with the Citv and Professional Portfolio Managers who desire to become bidders
to Manage all or part of the City's Investment Portfolio must supply the City of
La Quinta with the following:
No. Current audited financial statements
► Proof of National Association of Security Dealers Certification
► Trading resolution
► Proof of California registration
► Resume of Financial broker
► Completion of the City of La Quinta Broker/Dealer questionnaire which
contains a certification of having read the City of La Quinta Investment
Policy
The City Treasurer shall evaluate the documentation submitted by the
broker/dealer and independently verify existing reports on file for any firm and
individual conducting investment related business.
The City Treasurer will also contact the following agencies during the
verification process:
► National Association of Security Dealer's Public Disclosure Report File - 1-
800-289-9999
► State of California Department of Corporations 1-916-445-3062
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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 collateralization in public monies.
X AUTHORIZED INVESTMENTS AND LIMITATIONS
The City Treasurer will be permitted to invest in the investments summarized in the
Appendix A.
The Professional Portfolio Manager contracted by the City will be permitted to invest in
the manner summarized in Appendix A� _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - Formatted: subscript
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 may be invested in Bankers' Acceptances with
any one commercial bank. Additionally, the maturity period cannot exceed 180
days. The City of La Quinta Investment Policy does not allow investment in
Bankers' Acceptances.
Commercial Paper - As authorized in Government Code Section 53601(g), 15%
of the portfolio may be invested in commercial paper of the highest rating (A-1
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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 w ith 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.
Corporate Notes - As authorized in Government Code Section 53601 6), 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
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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.
MortQaae-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 110% to 150% depending on the specific security pledged
as collateral in accordance with Government Code Section 53652. There are
no portfolio limits on the amount or maturity for this investment vehicle.
Collateralization will be required for Certificates of Deposits in excess of the
FDIC insured amount. The type of collateral is limited to City authorized
investments. Collateral will always be held by an independent third party from
the institution that sells the Certificates of Deposit to the City. Evidence of
compliance with State Collateralization policies must be supplied to the City and
retained by the City Treasurer as follows:
1. Certificates of Deposits Insured by the FDIC.
The City Treasurer may waive collateral ization of a deposit that is
federally insured.
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2. Certificates of Deposit in excess of FDIC Limits.
The amount not federally insured shall be 110% collateralized securities
or 150% mortgages market value of that amount of invested funds plus
unpaid interest earnings.
The City of La Quinta Investment Policy limits the percentage of Certificates of
Deposit to 60% of the portfolio.
Sweep Accounts As authorized by the City Council, a U.S. Treasury and/or
U.S. Agency Securities Money Market Sweep Account with a $50,000 target
balance may be maintained in conjunction with the checking account.
Derivatives - The City of La Quinta Investment Policy does not allow investment
in derivatives.
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 Council may authorize the Professional Portfolio Manager hired by the City to
use a pooled fund to manage the City's investments. This vehicle will require a
specific annual approval by the City Council.
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, LAW will provide quarterly market value information to the City of La Quinta. .
On an annual basis the City Treasurer w ill submit the Investment Pool Questionnaire to
LAIR
Also, prior to opening any new Investment Pool account, which would require City
Council approval, the City Treasurerwill require the completion of the Investment Pool
Questionnaire.
.._ ......... . __ ....... does Rot =llaw _ _. _..._......_ ... _ _.._ ._. .._ _.......... _.._................ _.. _ ._ ._. _.. _ ...... _.................. __ ... __ .._ ...._ ._
Panic Formatted: Sbikethrough —�
A616-
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 LAW shall be made
13
directly to the entity and not to an investment advisor, broker or dealer.. Money
market mutual funds and LAW shall also operate on a DVP basis to be considered for
investment. If an independent Professional Investment Manager is hired, a third party
custodian separate from the Investment Manager organization shall be used.
X111 INTEREST EARNING DISTRIBUTION POLICY
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.
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.
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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 keening. By
separating the person who authorizes or performs the transaction from the
people who record or otherwise account for the transaction, a separation of
duties is achieved.
C. Custodial safekeeping. Securities purchased from any bank or dealer including
appropriate collateral (as defined by State Law) shall be placed with an
independent third party for custodial safekeeping.
d. Avoidance of physical delivery securities. Book entry securities are much easier
to transfer and account for since actual delivery of a document never takes
place. Delivered securities must be properly safeguarded against loss or
destruction. The potential for fraud and loss increases with physically delivered
securities.
e. Clear delegation of authority to subordinate staff members. Subordinate staff
members must have a clear understanding of their authority and responsibilities
to avoid improper actions. Clear delegation of authority also preserves the
internal control structure that is contingent on the various staff positions and
their respective responsibilities as outlined in the Segregation of Major
Investment Responsibilities appendices.
f. Written confirmation or telephone transactions for investments and wire
transfers. Due to the potential for error and improprieties arising from telephone
transactions, all telephone transactions shall be supported by written
communications and approved by the appropriate person. Written
communications may be via fax if on letterhead and the safekeeping institution
has a list of authorized signatures. Fax correspondence must be supported by
evidence of verbal or written follow-up.
g. Development of a wire transfer agreement with the City's bank and third party
custodian. This agreement should outline the various controls, security
provisions, and delineate responsibilities of each party making and receiving wire
transfers.
The System of Internal Controls developed by the City, shall be reviewed annually by
the independent auditor in connection with the annual audit of the City of La Quinta's
Financial Statements.
The independent auditor's management letter comments pertaining to cash and
investments, if any, shall be directed to the City Manager who will direct the City
15
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:
IN. A certification by City Treasurer;
► A listing of Purchases and sales/maturities of investments;
► Cash and Investments categorized by authorized investments, except for
LAIF which will be provided quarterly and show yield and maturity;
► Comparison of month end actual holdings to Investment Policy
limitations;
► Current year and prior year monthly history of cash and investments for
trend analysis;
► Balance Sheet;
► Distribution of cash and investment balances by fund;
► A comparison of actual and surplus funds;
► A year to date historical cash flow analysis and projection for the next six
months;
► A two-year list of historical interest rates.
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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.
Vill 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 Reauirement
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 QU1NTA
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
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.
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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.
Appendix Al
The outside professional Portfolio Manager shall be subiect to the following rules:
1 If the account is handled as a separate account: ............
Foy: Bullets and Numbering
2 If the account is managed in a fund pool with similar objectives as set forth --�rmauw: Bullets ar d umberingg
by the City,
a The professional Portfolio Manager shall maintain a threshold level of
aggregate assets (including both assets managed in the pool or any
separate account assets managed similarly on behalf of the City)
sufficient to ensure broad diversification, efficient trading, and
economies of scale in administrative expenses and transaction costs.
b The professional Portfolio Manager shall ensure stability and continuity
of investment personnel, thereby encouraging consistency of
investment method and overall knowledge of the City's investment
goals and objectives.
c The professional Portfolio Manager shall control both management
fees, brokerage commissions and administrative expenses to ensure
that total expenses are within normal and customary tolerances.
d The professional Portfolio Manager shall maintain portfolio
18
Form, -, : Bullets and Numbering
characteristics consistent with the City's nuidelines and historical
patterns as presented to the City Council and the Treasurer at the time
of hiring. Deviations from expectations shall be notified immediately
and will occasion a review of the aoorooriateness of the fund's
investment structure.
Appendix A
i]Pl