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2005 05 11 IABilia9WO T , it 'P.O. Box 1504 LA QUiNTA, CALIFORNIA 92247-1504 r . 78-495 CAi.t.F TAMPICO LA QUIN'I'A, CALIFORNIA 92253 AGENDA INVESTMENT ADVISORY BOARD Study Session Room 78-495 Calle Tampico- La Quinta, CA 92253 May 11, 2005 - 5:30 P.M. I CALL TO ORDER a. Pledge of Allegiance b. Roll Call (760) 7 7 7 - 7 0 0 0 FAX (760) 777-7101 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 April 13, 2005 for the Investment Advisory Board. V BUSINESS SESSION A. Transmittal of Treasury Report for March 2005 B. Continued Review of Request for Proposal for Portfolio Manager C. Continued Consideration of Fiscal Year 2005/06 Investment Policies VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report and other selected Financial Data - April 2005 B. Pooled Money Investment Board Reports - February 2005 VII BOARD MEMBER ITEMS VIII ADJOURNMENT MEMORANDUM TO: La Quinta City Council FROM: John M. Falconer, Finance Director/treasurer SUBJECT: Treasurer's Report for March 31,2005 DATE: April 30, 2005 Attached is the Treasurer's Report for the month ending March 31, 2005. 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 Beqinning Purchased Notes Sold/Matured Other Ending Change Cash (3) $ 6,271,062 (1) $ (6,662,710) ($391,648 ) ($6,60,0) LAIF 26,356,755 450,000 (2,050,000) 24,756,755 (1,60,000) US Treasuries (2) 120,552,878 38,000,000 (2) (38,000,000 ) ( 123,664,612 ( US Gov't Agencies (2) 23,683,587 - (2) (18,975) (18,975) Commercial Paper (2) - 0 0) Corporate Notes - 0 0 Mutual Funds 5,545,104 547,235 1 6,092,339 547,235 Total $ 182,409,386 $ 38,997,235 $ 46,712,710 $ 412,999 $ 174,280,912 1 $ 8,128,474 I certify that this report accurately reflects all pooled investments and is in compliance with the California Government Code; and is in conformity with the City Investment Policy. As Treasurer of the City of La Quinta, I hereby certify that sufficient investment liquidity and anticipated revenues are available to meet the pools expenditure requirements for the next six months. The City of La Quinta used the Bureau of the Public Debt, U.S. Bank Monthly Statement and the Bank of New York Monthly Custodian Report to determine the fair market value of investments at month end. r ohn M. Falconer Dat 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. (3) The cash account may reflect a negative balance. This negative balance will be offset with transfers from other investments before warrants are presented for payment by the payee at the bank. 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N N N C O Co 10 'O '0 (U (U (2)L 0 N N N C a)@ � 10 '0 0 (V 0 L a)Cc N N N C O Co M "- L O O U fo <o m O Cl) 7 7 0 � a <o a O X 7 7 7 2 "� m (0 fo O 7 7 7 f9 co fo O 7 0 7 2 2 LL (o 6 fo O 0 of 7 7 7 LL >, +' C C C 0— C C C 0— C C C 0— C C C 0— C C C 0- 2 QQ`av�Q'� Q`aav�Q'g Q`Q`ci;5 <<<05ag Q`Q`Q`v�a'� N City of La Quints Reconciliation of Actual and Surplus Funds City, Redevelopment Agency and Financing Authority March 31, 2005 Balance of Actual Funds 174.280,911 Less Petty cash Funds (1,000) Less Non -Surplus Funds (2,393,764) Balance of Surplus Funds $171,886,147 City Cash & Investments Bank Accounts Name - Availability Surplus Type Book Wells Fargo - Demand No Checking $ (419,900) Petty Cash - Demand No WA 1.000 Wells Fa ousin - Demand Yes Checking 27,262 Total - Bank Accounts $ 391,648 U. S. Treasury Amortized Custodian - Availability Surplus issuerfrype Value Bank of New York - Demand Yes U.S. Treasury Note 4,995,932 Bank of New York - Demand Yes U.S. Treasury Note 4,988,151 Bank of New York - Demand Yes U.S. Treasury Note 5,003,689 Bank of New York - Demand Yes U.S. Treasury Note 3,991,257 Bank of New York - Demand Yes U.S. Treasury Note 5,006,510 Bank of New York - Demand Yea U.S. Treasury Note 4,991,712 Bank of New York - Demand Yes U.S. Treasury Note 3,979,688 Bank of New York - Demand Yes U.S. Treasury Note 5 002 052 Total - U.S. Treasury 37,958,991 U.S. Government Securities Custodian - Availability Surplus Issuer/Type Amortized Value Bank of New York - Demand Yes FNMA 5,101,031 Bank of New York - Demand Yes FHLB 1,994,480 Bank of New York - Demand Yes FHLB 1,904,996 Bank of New York - Demand Yes FHLB 2,553,877 Bank of New York - Demand Yes FNMA -Discount 1,954,721 Bank of New York - Demand Yes FreddieMac 7,623,092 Bank of New York - Demand Yes FreddieMac - Discount 2,442,415 Total - U.S. Government Securities 23,664,612 Local Agency Investment Fund Name - Availability Surplus Type Book LAIF- City - Demand Yes State Pool 21,164,830 LAIF - RDA - Demand Yes State Pool 3,591,925 Total - State Pool 24,756,755 Total City Investments Total City Cash & Investments Fiscal Agent Investments Surplus Surplus Yee Ad' Yes 27,252 27,252 $ 27,252 $ - $ 27,252 Surplus Surplus Yes Ad' Yes 4,995,932 4.995,932 4,988,151 4,988,151 5,003,689 5,003,689 3,991,257 3,991,257 5,006,510 5,006,510 4.991,712 4,991,712 3,979,688 3,979,688 5,002,062 5 002 052 37,958,991 37,958,991 Surplus Surplus No Ad' No $ (419,900) $ 2,813,664 $ 2,393,764 1,000 1,000 $ 418,900 $ 2,813,664 $ 2,394,764 No All Funds Surplus Actual % Yes -0.2247% 0.0159% All Funds Surplus Actual % Yes 21.7803% 22.0838% Surplus Surplus Surplus Surplus All Funds Surplus Yes Adi Yes No Ad No Actual % Yes 5,101,031 5,101,031 1,994,480 1,994,480 1,994,996 1,994,996 2,553,877 2,553,877 1,954,721 1,954,721 - 7,623,092 7,623,092 2,442,415 2 442 415 23,664,612 23,664,612 13.5784% 13.7676% Surplus Surplus Yes Ad' Yes 21,164.830 (2,813,664) 18,351,166 3,591,925 3,591,925 24,756,755 2,813.664 21,943,091 Surplus Surplus No Ad' No All Funds Surplus Actual % Yes 14.2051 % 12.7661 % 86 380,358 $6 380,358 2,813,664 83,666,694 49.5639% 1 48.6175% 85,888,710 86,407,610 2,813,664 83 593,946 (418,900)1 2,813,664 2,394 764 49.3391X 48.6333X Portfolio - City Investments Amortized Custodian - Availability Surplus issuerfrype Value 2002 RDA U.S. Bank-CIP Yes U.S.Tressury Bill 27,595,252 2004 Finance Authority -CIP Yes U.S.Treasury Bill 9,854,190 2004 Finance Authority -CIP Yes U.S.Tresaury Bill 44,750,421 Yes Total- U.S. Treasury82,199,883 Portfolio - Mutual Funds Trustee - Availability Surplus Money Market Mutual Fund Book Value Civic Center U.S.Bank - Project YES 1st American - Civic Center U.S.Bank - Debt Svc YES 1st American 179,352 1994 RDA U.S. Bank -Debt Svc YES 1at American 1995 RDA U.S.Bank - CIP YES let American 1995 RDA U.S.Bank - Special Fund YES 1 at American 2004 Fin Auth -1995 US Bank - Escrow YES 1 at American 101 1998 RDA U.S.Bank - CIP YES 1at American 1998 RDA U.S.Bank - Dbt Svc YES 1st American 1998 RDA U.S.Bank - Special Fund YES 1st American 1998 RDA U.S.Bank - CIP YES tat American 2001 RDA U.S. Bank - Dbt Svc YES 1 at American 2001 RDA U.S. Bank - CIP YES 1 at American 2002 RDA U.S. Bank - Dbt Svc YES 1 at American 2002 RDA U.S. Bank - CIP YES 1at American 2,080,152 2003 Taxable RDA U.S. Bank - DS YES 1st Amer can 2003 Taxable RDA U. S. Bank -COI YES 1 at American - 2003 Taxable RDA U. S. Bank-CIP YES 1 at American 862 2004 Fin Auth US Bank - CIP YES 1 at American 3,826.803 2004 Fin Auth US Bank - COI YES 1 at American 5,069 Subtotal - Mutual Fund 6,092,339 Surplus Surplus Yes Aid' Yes _ 27,595,252 27,595,252 9,854,190 9,854.190 44,750,421 44,750,421 82,199,863 82,199,863 Surplus Yes Ad' Surplus Yes 179,352 179,352 101 101 2,080,152 2,080,152 862 862 3,826,803 3,826,803 5,069 5,069 6,092,3391 6,092,339 Surplus Surplus No Ad' No Surplus No Adi Surplus No All Funds Surplus Actual % Yes 47.1652% 47.8223% All Funds Surplus Actual % Yes 3.4957% 1 3.5444% Total Fiscal Agent Investments 88,292,2021 88,292,202 88 292,202 50.NN% 1 51.3667% Grand Total r 174,280,912 174,699,812 2,813,664 171,886148 418,900 2.813,664 1 2,394 764 100.00OOX 100.0000X VJ O r Q rn c c m c LL N C m 2 U Q N C Q aD E N O N E �cao �4„ NO C1 O > N o Ems :j E- A-- M Uc)U2 OO CD C%4 OO OO MMNO0)CD L Q 00 Q L. lQ 00 stOh�N L4 d O co Z ON Z d. 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C w = C `C i0 m V ), cc C c m m0) CL �m c0 V L a of c0 mQm �2 ul t> V m w a= E C (ODO C m m C 0 O c m a V a 4 Z C SIA a► t� Of C m .- m m to v m m ma mw m C .0 m m m C C to C: y •«-�+ ao « m ow ` a�V0 mza: wm000- z U um z ti N co CO O 0 v' v N 0 N CNM N v 11 INVESTMENT ADVISORY BOARD Business Session: B Meeting Date: May 11, 2005 ITEM TITLE: Continued Review of Request for Proposal for Portfolio Manager BACKGROUND: Attached please find a draft proposal for Portfolio Manager services for the Board's consideration. RECOMMENDATION: Continue developing the Request for Proposal for Portfolio Manager Services. John M. Falconer, Finance Director INVESTMENT ADVISORY BOARD Business Session: B Meeting Date: May 11, 2005 ITEM TITLE: Continued Review of Request for Proposal for Portfolio Manager BACKGROUND: Attached please find a draft proposal for Portfolio Manager services for the Board's consideration. RECOMMENDATION: Continue developing the Request for Proposal for Portfolio Manager Services. John M. Falconer, Finance Director Request for Proposals Investment Advisory Services City of La Quinta, CA The City of La Quinta, CA is soliciting Requests for Proposals (RFP) from interested firms for the provision of a 7 investment management services for Quinta, CA. The balance of the invested assets is estimated . IN r: 1.AMW City of La Qu .,.� ..�....:.., o , �.:..o. .8. n.E. a:�:tn>:cv;:�:;..:RG.,.;.�.,�,'."�,..,',�.y,.>y�.:':;.......Rk.>:e:�.e..R.::<..:v:.64e?.kJ.Rk.:�T.nt...[•.:,k...: R.:n.:.. f:?3:U.: �,...N:.a.,t: A�Rry.>.....Rt..k t:`.k.::'.a: u....:......... .:�i,9..k..,...R..t. The investment of City of La Quinta, CA's funds is guided by the applicable State statutes and the City of La Quinta, CA's investment policy. A copy of the investment policy is attached for your information. Questions regarding this RFP should be directed to: Name: Title: City of: Address: City, State Zip Code: Phone Number: John M. Falconer Finance Director/Treasurer La Quinta, CA 78-495 Calle Tampico La Quinta, CA 92253 (760)777-7150 I. CRITERIA FOR EVALUATION AND SELECTION II. SELECTION TIMETABLE A. [Month Day, Year] B. [Month Day, Year] C. [Month Day, Year] Proposals due by [Time] PST. Proposals evaluated: to be determined [City of La Quinta, CA] [Board/Council] approves selection and awards contract. III. FORMAT FOR PROPOSALS Please format your response to this RFP in the following manner: A. Organization 1. Describe your organization, date founded, ownership and other business affiliations. Provide number and location of affiliated offices. Specify the number of years your organization has provided investment management service. 2. Describe your firm's revenue sources (e.g., investment management, institutional research, etc.) and comment on your firm's financial condition. 3. Within the past three years, have there been any significant developments in your organization (e.g., changes in ownership, new business ventures)? Do you expect any changes in the near future? 4. Describe any U.S. Securities and Exchange Commission (SEC) censures or litigation involving your organization, any officer, or employee at any time in the last ten years. 5. Describe the firm's fiduciary liability and/or errors and omissions insurance coverage. Include dollar amount of coverage. B. Personnel 1. Identify the number of professionals employed by your firm by classification. 2. Provide an organization chart showing function, positions, and titles of all the professionals in your organization. 3. Provide biographical information on investment professionals that will be involved in the decision -malting process for our portfolio, including number of years at your firm. Identify the person who will be the primary portfolio manager assigned to the account. N 4. Describe your firm's compensation policies for investment professionals and address any incentive compensation programs. C. Assets Under Management 1. Summarize your institutional investment management asset totals by category for your latest reporting period in the following table: Number of Operating Funds Number of Other Funds Other Clients Clients Restrictive Funds (spe Governmental Governmental Pension Non Governmental Pension Corporate High Net Worth Client Endowmental/Foundation 2. Provide the number of separate accounts whose portfolios consist of operating funds. 3. List in the following table the percentage by market value of aggregate assets under all governmental accounts under management for your latest reporting period: Type of Asset Percent by Market Value U.S. Treasury securities Federal Agency obligations Corporate securities rated AAA -AA Corporate securities rated A Corporate securities rated BBB or lower Other (specify ) 3 4. Describe the procedures that your firm has in place to address the potential or actual credit downgrade of an issuer and to disclose and advise a client of the situation. 5. Provide data on account/asset growth over the past five years. Indicate the number of government accounts gained and the number of government accounts lost. 6. List your five governmental largest clients. Identify those that are exclusively operating fund relationships and/or those that are other relationships (e.g., bond fund, retirement fund). 7. Provide a copy of the firm's Form ADV, Parts I and II (including all schedules). 8. Provide proof of State of California Registration, if your firm is not eligible for SEC registration. 9. Provide a sample contract for services. D. Philosophy/Approach 1. Describe your firm's investment philosophy for public clients, including your firm's philosophy regarding average duration, maturity, investment types, credit quality, and yield. 2. Describe in detail your investment process, as you would apply it to City of La Quinta, CA's portfolio. 3. What are the primary strategies for adding value to portfolios? 4 4. Describe the process you would recommend for establishing the investment objectives and constraints for this account. 5. Describe in detail your process of credit risk management, including how you analyze credit quality, monitor credits on an ongoing basis, and report credit to governmental accounts. 6. Describe your firm's trading methodology. 7. Describe your firm's decision -making process in terms of structure, committees, membership, meeting frequency, responsibilities, integration of research ideas, and portfolio management. 8. Describe your research capabilities as they would pertain to governmental accounts. What types of analysis do you use? 9. Describe the firm's approach to managing relationships with the broker - dealer community. E. Portfolio Management 1. Are portfolios managed by teams or by one individual? 2. What is the average number of accounts handled per manager? 3. Which professional staff member will be the primary client contact for City of La Quinta, CA? 4. How frequently are you willing to meet with us? 5. Describe procedures used to ensure that portfolios comply with client investment objectives, policies, and bond resolutions. 5 F. Fees Charged 1. Please include a copy of your firm's fee schedule applicable to this RFP. 2. Identify any expenses that would not be covered through this fee structure and would be required in order to implement the firm's program. 3. Is there a minimum annual fee? G. Performance Reporting 1. Pleaseser;bn hey., ,.orArt „og,,,,,.,a . co ✓ViF 4J V1iViaaa ONEev �♦ k v:.<!%:.—, M<. 071 ":i z .��'�'c F:. .2. Pie�.^'. <>gp• �?A.:. a z'^^4r < >'%.��:<5"' ;>,<r". Qy. ,<,�"y 'a":: ':c.`' o. e. >A<y:� .�>: r Ett.. ,�.$. »' .S`Ra.:.''Si� ,. fi:?». .n�:Q..'<'. .R. . :. oK, .5. ., '`ee wC::o:>:: s..'V°..Y.. . , . bo'.::6..v.ti...y>A K:3. .;.?: `.M..XS>.'!..i:.'$ : .s..::.w8R..o': .: ..a..a°diC':.5::: ♦ i. • .•r •� •� i � •• ♦ 11 • - •� 2. 3. 4. Indicate whether your returns are calculated and compiled in accordance with the Association for Investment Management and Research (AIMR/CFA Institute) standards. 5-3. Do your reports conform reporting standards? Are you willing to customize your reports to meet our specifications? 64. How will you notify us of investment transactions? 7-5. Are confirmation of investment transactions sent directly by the broker/dealer to the client? 2 8. Do your reports include rating information on investments which is required by GASB 40? H. References Provide a list of at least five (5) client references in California. References should be public agencies with portfolio size and investment objectives similar to City of La Quinta, CA. Include length of time managing the assets, contact name, and phone number. I. Insurance Requirements Exhibit A defines the insurance requirements that will need to be met prior to the [Board/Council]'s approval of any agreement for services. J. Submittal of proposals 1. Seven (7) copies of the proposal shall be submitted in a sealed envelope bearing the caption RFP for (City of La Quinta, CA) and addressed to:\ City of La Quinta, CA 78-495 Calle Tampico La Quinta, CA 92253 Attention: John M. Falconer, Finance Director/Treasurer 2. Proposal must be received no later than [Time] PST on [Month, Day, Year]. 3. Proposals should be verified before submission. The City of La Quinta, CA shall not be responsible for errors or omissions on the part of the respondent in preparation of a proposal. The City of La Quinta, CA reserves the right to reject any and all proposals, to wave any irregularities, or informalities in the proposals, and to negotiate modifications to any proposal. Enclosures: Investment Policy Treasurers Report 7 INVESTMENT ADVISORY BOARD Business Session No. C Meeting Date: May 11, 2005 TITLE: Continued Consideration of Fiscal Year 2005/06 Investment Policies BACKGROUND: Pursuant to State Legislation the City investment policies must be approved on an annual basis by the City Council. This approval is done in June of each year. Staff will contact the City Attorney and other cities that responded to our survey regarding portfolio managers to determine the language, if any, that should be included in the City Municipal Code. RECOMMENDATION: Continued review of the Investment policies for approval by City Council in June 2005 G 3JokhnM,. Falconer, Finance Director CITY OF LA QUINTA Investment Policy Table of Contents Section Topic Page Executive Summary 2 1 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 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 Payment 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 i..: yreS:�. Investment Advisory Board - City of La Quinta 16 Investment Policy Adoption 17 Appendices: A. Summary of Authorized Investments and Limitations 18 B. Municipal Code Ordinance 2.70 - Investment Advisory Board 19 C. Municipal Code Ordinance 3.08 - Investment of Moneys and Funds 20 D. Segregation of Major Investment Responsibilities 22 E. Listing of Approved Financial Institutions 23 F. Broker/Dealer Questionnaire and Certification 24 G. Investment Pool Questionnaire 29 1 City of La Quinta Investment Policy Executive Summary The general purpose of this Investment Policy is to provide the rules and standards users must follow in investing funds of the City of La Quinta. It is the policy of the City of La Quinta to invest all public funds in a manner which will provide a diversified portfolio with maximum security while meeting daily cash flow demands and the highest investment return in conformity to all state and local statutes. This Policy applies to all cash and investments of the City of La Quinta, La Quinta Redevelopment Agency and the La Quinta Financing Authority, hereafter referred in this document as the "City". The primary objectives, in order of priority, of the City of La Quinta's investment activity shall be: Safety of principal is the foremost objective of the investment program. Investments of the City of La Quinta shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. The investment portfolio shall be designed with the objective of attaining a market rate of return or yield throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Within the constraints of safety, liquidity and yield, the City will endeavor to maintain a diversified portfolio by allocating assets between different types of investments within policy limitations. Investments shall be made with judgment and care - under circumstances then prevailing - which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. Authority to manage the City of La Quinta's investment portfolio is derived from the City Ordinance. Management responsibility for the investment program is delegated to the City Treasurer, who shall establish and implement written procedures for the operation of the City's investment program consistent with the Investment Policy. The Treasurer shall establish and implement a system of internal controls to maintain the safety of the portfolio. In addition, the internal control system will also insure the timely preparation and accurate reporting of the portfolio financial information. As part 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. 2 Investment responsibilities carry added duties of insuring that investments are made without improper influence or the appearance to a reasonable person of questionable or improper influence. The City of La Quinta Investment Policy maintains a listing of financial institutions which are approved for investment purposes. All Broker/Dealers and financial institutions selected by the Treasurer to provide investment services will be approved by the City Manager subject to City Council approval. The Treasurer will be permitted to invest only in City approved investments up to the maximum allowable percentages or dollar limitations and, where applicable, through the bid process requirements. Authorized investment vehicles and related maximum portfolio positions are listed in Appendix A - Summary of Authorized Investments and Limitations At least two bids will be required of investments in the authorized investment vehicles. Collateral ization will be required for Certificates of Deposits in excess of $100,000. Collateral will always be held by an independent third party from the institution that sells the Certificates of Deposit to the City. Evidence of compliance with State Collateral ization policies must be supplied to the City and retained by the City Treasurer. The City of La Quinta Investment Policy shall require that each individual investment have a maximum maturity of two years unless specific approval is authorized by the City Council, except the projected annual dollar amount as detailed in Section V, may be invested in U.S. Treasury bills, notes and bonds maturing between 2 and 5 years. In addition, the City's investment in the State Local Agency Investment Fund (LAIF) is allowable as long as the average maturity does not exceed two years, unless specific approval is authorized by the City Council. The City's investment in Money Market Mutual funds is allowable as long as the average maturity does not exceed 60 days. The City of La Quinta Investment Policy will use the six-month U.S. Treasury Bill as a benchmark when measuring the performance of the investment portfolio. The Investment Policies shall be adopted by resolution of the La Quinta City Council on an annual basis. The Investment Policies will be adopted before the end of June of each year. This Executive Summary is an overall review of the City of La Quinta Investment Policies. Reading this summary does not constitute a complete review, which can only be accomplished by reviewing all the pages. 3 City of La Quinta Statement of Investment Policy July 1, 2004 through June 30, 2005 Adopted by the City Council on June 17, 2004 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 ► Enterprise ► 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 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 C! 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 ► 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 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 5 4. Diversified Portfolio Within the constraints of safety, liquidity and yield, the City will endeavor to maintain a diversified portfolio by allocating assets between different types of investments within policy limitations. V MAXIMUM MATURITIES It is the policy of the City of La Quinta to hold securities and other investments of cash in financial instruments until maturity, thus avoiding the risk that the market value on investments fluctuates with overall market interest rates. The hold until maturity policy shall not prevent the sale of a security to minimize loss of principal when the issuer or backer suffers declining credit worthiness. The hold until maturity policy requires that the City of La Quinta's investment portfolio is structured so that sufficient funds are available from maturing investments and other sources to meet anticipated cash needs. To meet anticipated cash needs, it is essential that the Treasurer have reasonably accurate, diligently prepared cash flow projections. Annually, the Treasurer shall project the amount of funds not expected to be disbursed within five years. For FY 2005/06, the amount of such funds was $8 million. Funds up to that amount may be invested in U.S. Treasury bills, notes and bonds maturing between 2 and 5 years. For all other funds, investments are limited to two years maximum maturity. VI PRUDENCE The City shall follow the Uniform Prudent Investor Act as adopted by the State of California in Probate Code Sections 16045 through 16054. Section 16053 sets forth the terms of a prudent person which are as follows: Investments shall be made with judgment and care - under circumstances then prevailing - which persons of prudence, discretion, and intelligence exercise in the professional management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. VII DELEGATION OF AUTHORITY Authority to manage the City of La Quinta's investment portfolio is derived from the City Ordinance. Management responsibility for the investment program is delegated to the City Treasurer, who shall establish written procedures for the operation of the investment program consistent with the Investment Policy. Procedures should include reference to safekeeping, wire transfer agreements, banking service contracts, and collateral/depository agreements. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this Investment ;ei Policy and the procedures established by the City Treasurer. The City Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The City Manager or Assistant City Manager shall approve in writing all purchases and sales of investments prior to their execution by the City Treasurer. VIII CONFLICT OF INTEREST Investment responsibilities carry added duties of insuring that investments are made without improper influence or the appearance of improper influence. Therefore, the City Manager, Assistant City Manager, and the City Treasurer shall adhere to the State of California Code of Economic Interest and to the following: ► The City Manager, Assistant City Manager, and the City Treasurer shall not personally or through a close relative maintain any accounts, interest, or private dealings with any firm with which the City places investments, with the exception of regular savings, checking and money market accounts, or other similar transactions that are offered on a non-negotiable basis to the general public. Such accounts shall be disclosed annually to the City Clerk in conjunction with annual disclosure statements of economic interest. ► All persons authorized to place or approve investments shall report to the City Clerk kinship relations with principal employees of firms with which the City places investments. IX AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS The City of La Quinta Investment Policy maintains a listing of financial institutions which are approved for 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 must supply the City of La Quinta with the following: ► Current audited financial statements; ► Proof of National Association of Security Dealers Certification; ► Trading resolution; ► Proof of California registration; ► Resume of Financial broker; and ► 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. 7 The City Treasurer will also contact the following agencies during the verification process: ► National Association of Security Dealer's Public Disclosure Report File - 1-800-289-9999 ► State of California Department of Corporations 1-916-445-3062 All Broker/Dealers selected by the City Treasurer to provide investment services will be approved by the City Manager subject to City Council approval. The City Attorney will perform a legal review of the trading resolution/investment contract submitted by each Broker/Dealer. Each securities dealer shall provide monthly and quarterly reports filed pursuant to U.S. Treasury Department regulations. Each mutual fund shall provide a prospectus and statement of additional information. 2. Financial Institutions will be required to meet the following criteria in order to receive City funds for deposit or investment: A. Insurance - Public Funds shall be deposited only in financial institutions having accounts insured by the Federal Deposit Insurance Corporation (FDIC) B. Collateral - The amount of City of La Quinta deposits or investments not insured by the FDIC -shall be 1 10% collateralized by securities' or 150% mortgages' market values of that amount of invested funds plus unpaid interest earnings. C. Disclosure- Each financial institution maintaining invested funds in excess of the FDIC insured amount shall furnish the City a copy of the most recent Annual Call Report. The City shall not invest in excess of the FDIC insured amount in banking institutions which do not disclose to the city a current listing of securities pledged for collateral ization in public monies. X AUTHORIZED INVESTMENTS AND LIMITATIONS The City Treasurer will be permitted to invest in the investments summarized in the Appendix A. K. 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 $10 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. 9 Commercial Paper - As authorized in Government Code Section 53601(g), 15% of the portfolio may be invested in commercial paper of the highest rating (A-1 or P 1) as rated by Moody' s or Standard and Poor' s, with maturities not to exceed 270 days. This percentage may be increased to 30% if the dollar weighted average maturity does not exceed 31 days. There are a number of other qualifications regarding investments in commercial paper based on the financial strength of the corporation and the size of the investment. The City of La Quinta' s Investment Policy follows The Government Code with the following additional limitations: (1) maximum maturity per issue of 90 days and (2) a maximum of $3 million per issuer. Negotiable Certificates of Deposit -As authorized in Government Code Section 53601(h), 30% of the portfolio may be invested in negotiable certificates of deposit issued by commercial banks and savings and loan associations. The City of La Quinta Investment Policy does not allow investment in Negotiable Certificates of Deposit. Repurchase and Reverse Repurchase Agreements - As authorized in Government Code Section 53601(i), these investment vehicles are agreements between the local agency and seller for the purchase of government securities to be resold at a specific date and for a specific amount. Repurchase agreements are generally used for short term investments varying from one day to two weeks. There is no legal limitation on the amount of the repurchase agreement. However, the maturity period cannot exceed one year. The market value of securities underlying a repurchase agreement shall be at least 102% of the funds invested and shall be valued at least quarterly. The City of La Quinta Investment Policy does not allow investment in Repurchase Agreements. The term It 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 0), 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 allows investment in corporate notes authorized by the Government Code with the following limitations: 10 ► Maturities shall conform with Section V. ► Eligible notes shall be regularly quoted and traded in the marketplace. ► Eligible notes shall be rated "AV or "AAA" on the date of acquisition. No. Total investment shall not exceed 15 % of the portfolio, and ► The maximum aggregate investment shall not exceed $3 million face amount for each issurer. Diversified Management Companies - As authorized in Government Code Section 53601(k), local agencies are authorized to invest in shares of beneficial interest issued by diversified management companies (mutual funds) in an amount not to exceed 20% of the agency's portfolio. There are a number of other qualifications and restrictions regarding allowable investments in corporate notes and shares of beneficial interest issued by mutual funds which include (1) attaining the highest ranking or the highest letter and numerical rating provided by not less than two of the three largest nationally recognized rating services, or (2) having an investment advisor registered with the Securities and Exchange Commission with not less than five years' experience investing in the securities and obligations and with assets under management in excess of five hundred million dollars ($500,000,000). The City of La Quinta Investment Policy only allows investments in mutual funds that are money market funds maintaining a par value of $1 per share that invests in direct issues of the U.S. Treasury and/or US Agency Securities with an average maturity of their portfolio not exceeding 90 days and the City limits such investments to 20% of the portfolio. Mortgage -Backed Securities - As authorized in Government code Section 53601(n), local agencies may invest in mortgage -backed securities such as mortgage pass -through securities and collateralized mortgage obligations for a maximum period of five years in an amount not to exceed 20% of the agency' s portfolio. Securities eligible for investment shall have a "A" or higher rating. The City of La Quinta Investment Policy does not allow investment in Mortgage - Backed Securities. Financial Futures and Financial Option Contracts - As authorized in Government Code Section 53601.1, local agencies may invest in financial futures or option contracts in any of the above investment categories subject to the same overall portfolio limitations. The City of La Quinta Investment Policy does not allow investments in financial futures and financial option contracts. Certificates of Deposit - As authorized in Government Code Section 53649, Certificates of Deposit are fixed term investments which are required to be collateralized from 1 10% to 150% depending on the specific security pledged as collateral in accordance with Government Code Section 53652. There are no portfolio limits on the amount or maturity for this investment vehicle. Collateralization will be required for Certificates of Deposits in excess of the FDIC insured amount. The type of collateral is limited to City authorized 11 investments. Collateral will always be held by an independent third party from the institution that sells the Certificates of Deposit to the City. Evidence of compliance with State Collateral ization policies must be supplied to the City and retained by the City Treasurer as follows: 1 . Certificates of Deposits Insured by the FDIC. The City Treasurer may waive collateral ization of a deposit that is federally insured. 2. Certificates of Deposit in excess of FDIC Limits. The amount not federally insured shall be 1 10% collateralized securities or 150% mortgages market value of that amount of invested funds plus unpaid interest earnings. The City of La Quinta Investment Policy limits the percentage of Certificates of Deposit to 60% of the portfolio. Sweep Accounts - As authorized by the City Council, a U.S. Treasury and/or U.S. Agency Securities Money Market Sweep Account with a $50,000 target balance may be maintained in conjunction with the checking account. Derivatives - The City of La Quinta Investment Policy does not allow investment in derivatives. XI INVESTMENT POOLS There are three (3) types of investment pools: 1) state -run pools, 2) pools that are operated by a political subdivision where allowed by law and the political subdivision is the trustee i.e. County Pool; and 3) pools that are operated for profit by third parties. The City of La Quinta Investment Policy has authorized investment with the State of California's Treasurers Office Local Agency Investment Fund commonly referred to as LAIF. LAIF was organized in 1977 through State Legislation Section 16429.1, 2 and 3. Each LAIF account is restricted to a maximum investable limit of $40 million. In addition, LAIF will provide quarterly market value information to the City of La Quinta. On an annual basis the City Treasurer will submit the Investment Pool Questionnaire to LAIF. Also, prior to opening any new Investment Pool account, which would require City Council approval, the City Treasurer will require the completion of the Investment Pool Questionnaire. XII PAYMENT AND CUSTODY The City shall engage qualified third party custodians to act in a fiduciary capacity to maintain appropriate evidence of the City's ownership of securities and other eligible investments. Such custodians shall disburse funds, received from the City for a purchase, to the broker, dealer or seller only after receiving evidence that the City has 12 legal, record ownership of the securities. Even though ownership is evidenced in book - entry form rather than by actual certificates, this procedure is commonly accepted as the delivery versus payment (DVP) method for the transfer of securities. XIII 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. 13 The internal controls shall address the following: a. Control of collusion. Collusion is a situation where two or more employees are working in conjunction to defraud their employer. b. Separation of transaction authority from accounting and record keeping. By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved. C. Custodial safekeeping. Securities purchased from any bank or dealer including appropriate collateral (as defined by State Law) shall be placed with an independent third party for custodial safekeeping. d. Avoidance of physical delivery securities. Book entry securities are much easier to transfer and account for since actual delivery of a document never takes place. Delivered securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities. e. Clear delegation of authority to subordinate staff members. Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions. Clear delegation of authority also preserves the internal control structure that is contingent on the various staff positions and their respective responsibilities as outlined in the Segregation of Major Investment Responsibilities appendices. f. Written confirmation or telephone transactions for investments and wire transfers. Due to the potential for error and improprieties arising from telephone transactions, all telephone transactions shall be supported by written communications and approved by the appropriate person. Written communications may be via fax if on letterhead and the safekeeping institution has a list of authorized signatures. Fax correspondence must be supported by evidence of verbal or written follow-up. g. Development of a wire transfer agreement with the City's bank and third party custodian. This agreement should outline the various controls, security provisions, and delineate responsibilities of each party making and receiving wire transfers. The System of Internal Controls developed by the City, shall be reviewed annually by the independent auditor in connection with the annual audit of the City of La Quinta's Financial Statements. The independent auditor's management letter comments pertaining to cash and investments, if any, shall be directed to the City Manager who will direct the City Treasurer to provide a written response to the independent auditor's letter. The management letter comments pertaining to cash and investment activities and the City Treasurer's response shall be provided to the City's Investment Advisory Board for 14 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 st and June 30th Treasurers Reports be sent to the California Debt and Advisory Commission within sixty days of the end of the quarter. The City Treasurer shall submit a monthly Treasurers Report to the City Council and the Investment Advisory Board that includes all cash and investments under the authority of the Treasurer. The Treasurers Report shall summarize cash and investment activity and changes in balances and include the following: ► A certification by City Treasurer. ► A listing of Purchases and sales/maturities of investments. ► Cash and Investments categorized by authorized investments, except for LAIF which will be provided quarterly and show yield and maturity. ► Comparison of month end actual holdings to Investment Policy limitations. ► Current year and prior year monthly history of cash and investments for trend analysis. ► Balance Sheet. ► Distribution of cash and investment balances by fund. ► A comparison of actual and surplus funds. ► A year to date historical cash flow analysis and projection for the next six months. ► A two-year list of historical interest rates. 15 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. XVIII INVESTMENT OF BOND PROCEEDS The City's Investment Policy shall govern bond proceeds and bond reserve fund investments. California Code Section 5922 (d) governs the investment of bond proceeds and reserve funds in accordance with bond indenture provisions which shall be structured in accordance with the City's Investment Policy. Arbitrage Requirement The US Tax Reform Act of 1986 requires the City to perform arbitrage calculations as required and return excess earnings to the US Treasury from investments of proceeds of bond issues sold after the effective date of this law. This arbitrage calculations may be contracted with an outside source to provide the necessary technical assistance to comply with this regulation. Investable funds subject to the 1986 Tax Reform Act will be kept segregated from other funds and records will be kept in a fashion to facilitate the calculations. The City's investment position relative to the new arbitrage restrictions is to continue pursuing the maximum yield on applicable investments while ensuring the safety of capital and liquidity. It is the City's position to continue maximization of yield and to rebate excess earnings, if necessary. MIT With the Approval of the City Council, the City may engage a professional investment portfolio manager(s) efadvisef(s) to assist the City Treasurer administer the delegated authority to manage and invest the City's Funds. The investment portfolio managers of advis will be approved by City Council based upon a request for proposal , wM I Before engagement by the City, except as may be specifically waived or revised, the professional manager or advisor shall commit to adhere to the provisions of the City of La Quinta 16 INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA The Investment Advisory Board (IAB) consists of five members of the community that have been appointed by and report to the City Council. The IAB usually meets on a monthly basis, but at least quarterly to (1) review at least annually the City's Investment Policy and recommend appropriate changes; (2) review monthly Treasury Report and note compliance with the Investment Policy and adequacy of cash and investments for anticipated obligations; (3) receive and consider other reports provided by the City Treasurer; (4) meet with the independent auditor after completion of the annual audit of the City's financial statements, and receive and consider the auditor' s comments on auditing procedures, internal controls and findings for cash and investment activities, and; (5) serve as a resource for the City Treasurer on matters such as proposed investments, internal controls, use or change of financial institutions, custodians, brokers and dealers. The appendices include City of La Quinta Ordinance 2.70 entitled Investment Advisory Board Provisions. g INVESTMENT POLICY ADOPTION On an annual basis, the Investment policies will be initially reviewed by the Investment Advisory Board and the City Treasurer. The Investment Advisory Board will forward the Investment policies, with any revisions, to the City Manager and City Attorney for their review and comment. A joint meeting will be held with the Investment Advisory Board, City Manager, City Attorney, and City Treasurer to review the Investment policies and comments, prior to submission to the City Council for their consideration. The Investment Policies shall be adopted by resolution of the City of La Quinta City Council on an annual basis. The Investment Policies will be adopted before the end of June of each year. AB 943 requires that the Investment Policies be sent to the California Debt and Investment Advisory Commission within sixty days of a change to the Investment Policy. 17 Appendix A FQ- z C7 J U. O E E E 0 m c O m o E o �' m m m o E E n 8 n E o m c O € m c m m r� nE n a $ E � Qm� 4 ~ f0 G m 0 E � a Q c o $ m1O (Dto A o a N > a m � N `o U "? O m d a0 O _ c c ° a a m G c o $ O m ia V U ca ¢ 0- m U c U 0 0 LL a co .0 0 19 cq co u g m m m to m Q aci aNi m c c m E2 m 7 'c E c m m m m m m m y m y co 'X> N >T N t 0 m T T T T T N N N N N N O 0) N O O N N N O O y c N a� G C N ° y C m N .c o d � t 0 13 U 0o E m E E a� a� a�� _ m E S 0 r O 8 Q 0 $ $ N 4pz O O > N n G c69 N E p 8 c 11 v ' c m o $ IT2 w 0o U � ° ri 60 ch to ¢ m o m U 0 Y U w 0 0 0 E o 0 0 0 E $ LL a a a° a a° 'o m— 2 = a $ a° o $ 0 $ 0 g a° 0 M 0 Q + a° 0 N o0 M cn O o _� ° O @ �QQ � O o O 0800 O 0 @ e c O C c 5 02 0 d a a $ 0 C. 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G d 0 c as U (D _ c a 'mac 7E S mN N O3 w 7 m C O N A la0 Co c m N S yyao _(D N to m G W W. ra,°a a C. a ; T> EW 78 m 0M a- 6�°' O N O m N m o mYa N 7 ram, m— r m a m'� 0 CJ cam a� 'C E> �$ L^ mini �c ECo -E C EtQ1 oH� p m oa 8 0 m JS m 0c :2 -a g a 'D c 10v a$ o E 8 8 '� Z LL y LL N as sLL 4Gi wm E1° m aLL ED E d tom m S 0' u ui c c2a 0 •c 2> vn °`> c j Ea > En Q Q �c o aci 0 EEE � Eo s H o m m$ a Q o v m c¢ U —> c 3 `�1322 _ 2 B. u M c o 0 �' m E c T n m € o • L C a Z o$a U o m E c U o t m a L r m J ¢ 0 c� ° c �r E ¢ m J a L c �L m �z N a N th -t 10 10 f-- .m+ N m p m g g Appendix B Chapter 2.70 INVESTMENT ADVISORY BOARD PROVISIONS Sections: 2.70.010 General Rules Regarding Appointment. 2.70.020 Board meetings. 2.70.030 Board functions. 2.70.010 General rules regarding appointment A. Except as set out below, see Chapter 2.06 for General Provisions. B. The Investment Advisory Board (the"board") is a standing board composed of five (5) members from the public that are appointed by city council. La Quinta residency is required except for Board Members currently serving on the Board as of June 30, 2003. C. Background in the investment field and/or related experience is preferred. Background information will be required and potential candidates must agree to a background check and verification. D. On an annual basis, in conjunction with the Political Reform Act disclosure statutes, or at any time if a change in circumstances warrants, each board member will provide the City Council with a disclosure statement which identifies any matters that have a bearing on the appropriateness of that member's service on the board. Such matters may include, but are not limited to, changes in employment, changes in residence, or changes in clients. 2.70.020 Board meetings. The Board usually will meet monthly, but this schedule may be extended to quarterly meetings upon the concurrence of the Board and the City Council. The specific meeting dates will be determined by the Board Members and meetings may be called for on an as needed basis. 2.70.030 Board functions. 1. The principal functions of the Board are: (1) review at least annually the City's Investment Policy and recommend appropriate changes; (2) review monthly Treasury Report and note compliance with the Investment Policy and adequacy of cash and investments for anticipated obligations; (3) receive and consider other reports provided by the City Treasurer; (4) meet with the independent auditor after completion of the annual audit of the City's financial statements, and receive and consider the auditor's comments on auditing procedures, internal controls, and findings for cash and investment activities, and; (5) serve as a resource for the City Treasurer on matters such as proposed investments, internal controls, use or change of financial institutions, custodians, brokers and dealers. 2. The Board will report to the City Council after each meeting either in person or through correspondence at a regular City Council meeting. 19 Appendix C Chapter 3.08 INVESTMENT OF MONEYS AND FUNDS Sections: 3.08.010 Investment of city moneys and deposit of securities. 3.08.020 Authorized investments. 3.08.030 Sales of securities. 3.08.040 City bonds. 3.08.050 Reports. 3.08.060 Deposits of securities. 3.08.070 Trust fund administration. 3.08.010 Investment of city moneys and deposit of securities. Pursuant to, and in accordance with, and to the extent allowed by, Sections 53607 and 53608 of the Government Code, the authority to invest and reinvest moneys of the city, to sell or exchange securities, and to deposit them and provide for their safekeeping, is delegated to the city treasurer. (Ord. 2 § 1 (part), 1982) 3.08.020 Authorized investments. Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is authorized to purchase, at their original sale or after they have been issued, securities which are permissible investments under any provision of state law relating to the investing of general city funds, including but not limited to Sections 53601 and 53635 of the Government Code, as said sections now read or may hereafter be amended, from moneys in his custody which are not required for the immediate necessities of the city and as he may deem wise and expedient, and to sell or exchange for other eligible securities and reinvest the proceeds of the securities so purchased. (Ord. 2 § 1 (part), 1982) 3.08.030 Sales of Securities. From time to time the city treasurer shall sell the securities in which city moneys have been invested pursuant to this chapter, so that the proceeds may, as appropriate, be applied to the purchase for which the original purchase money may have been designated or placed in the city treasury. (Ord.2 § I (part), 3.08.040 City bonds. Bonds issued by the city and purchased pursuant to this chapter may be canceled either in satisfaction of sinking fund obligations or otherwise if proper and appropriate; provided, however, that the bonds may be held uncancelled and while so held may be resold. (Ord. 2 § 1 (part), 1982) 3.08.050 Reports. The city treasurer shall make a monthly report to the city council of all investments made pursuant to the authority delegated in this chapter. (Ord. 2 § 1 (part), 1982) 20 3.08.060 Deposits of securities. Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is authorized to deposit for safekeeping, the securities in which city moneys have been invested pursuant to this chapter, in any institution or depository authorized by the terms of any state law, including but not limited to Section 53608 of the Government Code as it now reads or may hereafter be amended. In accordance with said section, the city treasurer shall take from the institution or depository a receipt for the securities so deposited and shall not be responsible for the securities delivered to and receipted for by the institution or depository until they are withdrawn therefrom by the city treasurer. (Ord. 2 § 1 (part), 1982 3.08.070 Trust fund administration. Any departmental trust fund established by the city council pursuant to Section 36523 of the Government Code shall be administered by the city treasurer in accordance with Section 36523 and 26524 of the Government code and any other applicable provisions of law. (Ord. 2 § 1 (part), 1982) 21 Appendix D SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES Function Responsibilities Develop formal Investment Policy City Treasurer Recommend modifications to Investment Policy Investment Advisory Board Review formal Investment Policy and recommend City Manager and City Council action City Attorney Adopt formal Investment Policy City Council Review Financial Institutions & Select Investments City Treasurer Approve investments City Manager or Assistant City Manager Execute investment transactions City Manager or Treasurer Confirm wires, if applicable Accounting Manager or Financial Services Assistant Record investment transactions in City's Accounting Manager or accounting records Financial Services Assistant Investment verification - match broker confirmation City Treasurer and Financial to City investment records Services Assistant Reconcile investment records - to accounting records and bank statements Financial Services Assistant Reconcile investment records - to Treasurers Report of investments Accounting Manager Security of investments at City Vault Security of investments Outside City Third Party Custodian Review internal control procedures External Auditor 22 Appendix E LISTING OF APPROVED FINANCIAL INSTITUTIONS x 1. Banking Services - Wells Fargo Bank, Government Services, Los Angeles, California 2. Custodian Services - Bank of New York, Los Angeles, California 3. Deferred Compensation - International City/County Management Association Retirement Corporation 4. Broker/Dealer Services - Merrill Lynch, Los Angeles, CA Morgan Stanley, Los Angeles, California CitiGroup, Newpeft Beeeh, San Q p "NOT", CA 5. Government Pool - State of California Local Agency Investment Fund City of La Quinta Account La Quinta Redevelopment Agency 6. Bond Trustees - 1991 City Hall Revenue Bonds - US Bank 1991 RDA Project Area 1 - US Bank 1992 RDA Project Area 2 - US Bank 1994 RDA Project Area 1 - US Bank 1998 RDA Project Area 1 &2 - US Bank 2001 RDA Project Area 1 - US Bank 2002 RDA Project Area 1 - US Bank 2003 RDA Project Area 1 - US Bank Assessment Districts - US Bank No Changes to this listing may be made without City Council approval 23 Appendix F BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION 1. Name of Firm: 2. Address: 3. Telephone: (_ 4. Broker's Representative to the City (attach resume): Name: Title: Telephone: ( ) 5. Manager/Partner-in-charge (attach resume) : Name: Lei 7. Title: Telephone: List all personnel who will be trading with or quoting securities to City employees (attach resume) Name: Title: Telephone: ( ) l ) Which of the above personnel have read the City's Investment Policy? 8. Which instruments are offered regularly by your local office? (Must equal 100%) % U.S. Treasuries % BA's % Commercial Paper % CD's % Mutual Funds % Agencies (specify) : 24 % Repos % Reverse Repos % CMO's % Derivatives % Stocks/Equities % Other (specify) : 9. References -- Please identify your most directly comparable public sector clients in our geographical area. Entity Contact Telephone Client Since Entity Contact Telephone Client Since 10. Have any of your clients ever sustained a loss on a securities transaction arising from a misunderstanding or misrepresentation of the risk characteristics of the instrument? If so, explain. 12. Has your firm or your local office ever been subject to a regulatory or state/ federal agency investigation for alleged improper, fraudulent, disreputable or unfair activities related to the sale of securities? Have any of your employees been so investigated? If so, explain. Has a client ever claimed in writing that you were responsible for an investment loss? Yes No If yes, please provide action taken Has a client ever claimed in writing that your firm was responsible for an investment loss? Yes No If yes, please provide action taken 25 Do you have any current or pending complaints that are unreported to the NASD? Yes No If yes, please provide action taken Does your firm have any current, or pending complaints that are unreported to the NASD? Yes No If yes, please provide action taken 13. Explain your clearing and safekeeping procedures, custody and delivery process. Who audits these fiduciary responsibilities? Latest Audit Report Date 14. How many and what percentage of your transactions failed. Last month? % $ Last year? % $ 15. Describe the method your firm would use to establish capital trading limits for the City of La Quinta. 16. Is your firm a member in the S.I.P.C. insurance program. Yes No If yes, explain primary and excess coverage and carriers. 17. What portfolio information, if any, do you require from your clients? OV, 18. What reports and transaction confirmations or any other research publications will the City receive? 19. Does your firm offer investment training to your clients? Yes No 20. Does your firm have professional liability insurance. Yes No If yes, please provide the insurance carrier, limits and expiration date. 21. P" Please list your NASD Registration Number. Do you have any relatives who work at the City of La Quinta? Yes No If yes, Name and Department 23. Do you maintain an office in California. Yes No 24. Do you maintain an office in La Quinta or Riverside County? Yes No 25. Please enclose the following: ❑ Latest audited financial statements. ❑ Samples of reports, transaction confirmations and any other research/publications the City will receive. ❑ Samples of research reports and/or publications that your firm regularly provides to clients. ❑ Complete schedule of fees and charges for various transactions. 'CERTIFICATION' *CERTIFICATION* I hereby certify that I have personally read the Statement of Investment Policy of the City of La Quinta, and have implemented reasonable procedures and a system of controls designed to preclude imprudent investment activities arising out of transactions conducted between our firm and the City of La Quinta. All sales personnel will be routinely informed of the City's investment objectives, horizons, outlooks, strategies and risk constraints whenever we are so advised by the City. We pledge to exercise due diligence in informing the City of La Quinta of all foreseeable risks associated with financial transactions conducted with our firm. By signing this document the City of La Quinta is authorized to conduct any and all background checks. 27 Under penalties of perjury, the responses to this questionnaire are true and accurate to the best of my knowledge. Broker Date_ Sales Date Representative Manager and/or Title Managing Title Partner* Appendix G INVESTMENT POOL QUESTIONNAIRE Note: This Investment Pool Questionnaire was developed by the Government Finance Officers Association (GFOA). Prior to entering a pool, the following questions and issues should be considered. SECURITIES Government pools may invest in a broader range of securities than your entity invests in. It is important that you are aware of, and are comfortable with, the securities the pool buys. 1. Does the pool provide a written statement of Investment Policy and objectives? 2. Does the statement contain: a. A description of eligible investment instruments? b. The credit standards for investments? c. The allowable maturity range of investments? d. The maximum allowable dollar weighted average portfolio maturity? e. The limits of portfolio concentration permitted for each type of security? f. The policy on reverse repurchase agreements, options, short sales and futures? 3. Are changes in the policies communicated to the pool participants? 4. Does the pool contain only the types of securities that are permitted by your Investment Policy? INTEREST Interest is not reported in a standard format, so it is important that you know how interest is quoted, calculated and distributed so that you can make comparisons with other investment alternatives. Interest Calculations 1. Does the pool disclose the following about yield calculations: a. The methodology used to calculate interest? (Simple maturity, yield to maturity, etc.) b. The frequency of interest payments? c. How interest is paid? (Credited to principal at the end of the month, each quarter; mailed?) d. How are gains/losses reported? Factored monthly or only when realized? W"'i REPORTING 1. Is the yield reported to participants of the pool monthly? (If not, how often?) 2. Are expenses of the pool deducted before quoting the yield? 3. Is the yield generally in line with the market yields for securities in which you usually invest? 4. How often does the pool report, and does that report include the market value of securities? SECURI T Y The following questions are designed to help you safeguard your funds from loss of principal and loss of market value. 1. Does the pool disclose safekeeping practices? 2. Is the pool subject to audit by an independent auditor? 3. Is a copy of the audit report available to participants? 4. Who makes the portfolio decisions? 5. How does the manager monitor the credit risk of the securities in the pool? 6. Is the pool monitored by someone on the board of a separate neutral party external to the investment function to ensure compliance with written policies? 7. Does the pool have specific policies with regards to the various investment vehicles? a. What are the different investment alternatives? b. What are the policies for each type of investment? 8. Does the pool mark the portfolio to its market value? 9. Does the pool disclose the following about how portfolio securities are valued: a. The frequency with which the portfolio securities are valued? b. The method used to value the portfolio (cost, current value, or some other method)? 30 OPERA TIONS The answers to these questions will help you determine whether this pool meets your operational requirements: 1. Does the pool limit eligible participants? 2. What entities are permitted to invest in the pool? 3. Does the pool allow multiple accounts and sub -accounts? 4. Is there a minimum or maximum account size? 5. Does the pool limit the number of transactions each month? What is the number of transactions permitted each month? 6. Is there a limit on transaction amounts for withdrawals and deposits? a. What is the minimum and maximum withdrawal amount permitted? b. What is the minimum and maximum deposit amount permitted? 7. How much notice is required for withdrawals/deposits? 8. What is the cutoff time for deposits and withdrawals? 9. Can withdrawals be denied? 10. Are the funds 100% withdrawable at anytime? 11. What are the procedures for making deposits and withdrawals? a. What is the paperwork required, if any? b. What is the wiring process? 12. Can an account remain open with a zero balance? 13. Are confirmations sent following each transaction? STA TEMENTS It is important for you and the agency's trustee (when applicable), to receive statements monthly so the pool's records of your activity and holding are reconciled by you and your trustee. 31 1 . Are statements for each account sent to participants? a. What are the fees? b. How often are they passed? c. How are they paid? d. Are there additional fees for wiring funds (what is the fee)? 2. Are expenses deducted before quoting the yield? QUESTIONS TO CONSIDER FOR BOND PROCEEDS It is important to know (1) whether the pool accepts bond proceeds and (2) whether the pool qualifies with the U.S. Department of the Treasury as an acceptable commingled fund for arbitrage purposes. 1. Does the pool accept bond proceeds subject to arbitrage rebate? 2. Does the pool provide accounting and investment records suitable for proceeds of bond issuance subject to arbitrage rebate? 3. Will the yield calculation reported by the pool be acceptable to the IRS or will it have to be recalculated? 4. Will the pool accept transaction instructions from a trustee? 5. Are you allowed to have separate accounts for each bond issue so that you do not commingle the interest earnings of funds subject to rebate with funds not subject to regulations? 32 Appendix H Request for Proposals Investment Advisory Services City of La Quinta, CA The City of La Quinta, CA is soliciting Requests for Proposals (RFP) from interested firms for the provision of a NOa investment management services for City of La Quinta, CA. The balance of the invested assets is estimated ' fi::w: OWN .<, . C.2&":,e ate.. .,'4.9:fi::.�'' �.'A?;<.LR:� .,!'� ::BRiY "!0 is2F..d<:R?R:r<Rt%>4%iS:<5?'.i:>T.R%";>i'io<;?S..o_ h�+u9::'':i3:i: Ri:•i"$, :>*:E;{F;i.;Ye° 'y.,�y 4'N.H.:��j�4�'.��Sw. ., S >:e �R.Y����S L A.,R.R.:W�• The investment of City of La Quinta, CA's funds is guided by the applicable State statutes and the City of La Quinta, CA's investment policy. A copy of the investment policy is attached for your information. Questions regarding this RFP should be directed to: Name: John M. Falconer Title: Finance Director/Treasurer City of: La Quinta, CA Address: 78-495 Calle Tampico City, State Zip Code: La Quinta, CA 92253 Phone Number: (760)777-7150 I. CRITERIA FOR EVALUATION AND SELECTION H. SELECTION TIMETABLE A. [Month Day, Year] B. [Month Day, Year] C. [Month Day, Year] Proposals due by [Time] PST. Proposals evaluated: to be determined [City of La Quinta, CA] [Board/Council] approves selection and awards contract. R&3 III. FORMAT FOR PROPOSALS Please format your response to this RFP in the following manner: A. Organization 1. Describe your organization, date founded, ownership and other business affiliations. Provide number and location of affiliated offices. Specify the number of years your organization has provided investment management service. 2. Describe your firm's revenue sources (e.g., investment management, institutional research, etc.) and comment on your firm' s financial condition. 3. Within the past three years, have there been any significant developments in your organization (e.g., changes in ownership, new business ventures)? Do you expect any changes in the near future? 4. Describe any U.S. Securities and Exchange Commission (SEC) censures or litigation involving your organization, any officer, or employee at any time in the last ten years. 5. Describe the firm's fiduciary liability and/or errors and omissions insurance coverage. Include dollar amount of coverage. B. Personnel 1. Identify the number of professionals employed by your firm by classification. 2. Provide an organization chart showing function, positions, and titles of all the professionals in your organization. 3. Provide biographical information on investment professionals that will be involved in the decision -making process for our portfolio, including number of years at your firm. Identify the person who will be the primary portfolio manager assigned to the account. 4. Describe your firm's compensation policies for investment professionals and address any incentive compensation programs. 34 C. Assets Under Management 1. Summarize your institutional investment management asset totals by category for your latest reporting period in the following table: Number of Operating Funds Number of OthetFunds Other Clients Clients Restrictive Funds Governmental $ $ Governmental Pension $ $ Non Governmental $ $ Pension Corporate $ $ High Net Worth Client $ $ Endowmental/Foundatio $ $ n 2. Provide the number of separate accounts whose portfolios consist of operating funds. 3. List in the following table the percentage by market value of aggregate assets under all governmental accounts under management for your latest reporting period: Type of Asset Percent by Market Value U.S. Treasury securities Federal Agency obligations Corporate securities rated AAA -AA Corporate securities rated A Corporate securities rated BBB or lower Other (specify ) 35 4. Describe the procedures that your firm has in place to address the potential or actual credit downgrade of an issuer and to disclose and advise a client of the situation. 5. Provide data on account/asset growth over the past five years. Indicate the number of government accounts gained and the number of government accounts lost. 6. List your five governmental largest clients. Identify those that are exclusively operating fund relationships and/or those that are other relationships (e.g., bond fund, retirement fund). 7. Provide a copy of the firm's Form ADV, Parts I and II (including all schedules). 8. Provide proof of State of California Registration, if your firm is not eligible for SEC registration. 9. Provide a sample contract for services. D. Philosophy/Approach 1. Describe your firm's investment philosophy for public clients, including your firm's philosophy regarding average duration, maturity, investment types, credit quality, and yield. 2. , Describe in detail your investment process, as you would apply it to City of La Quinta, CA's portfolio. 3. What are the primary strategies for adding value to portfolios? 4. Describe the process you would recommend for establishing the investment objectives and constraints for this account. 5. Describe in detail your process of credit risk management, including how you analyze credit quality, monitor credits on an ongoing basis, and report credit to governmental accounts. 6. Describe your firm's trading methodology. 7. Describe your firm's decision -making process in terms of structure, committees, membership, meeting frequency, responsibilities, integration of research ideas, and portfolio management. 8. Describe your research capabilities as they would pertain to governmental 36 accounts. What types of analysis do you use? 9. Describe the firm's approach to managing relationships with the broker - dealer community. E. Portfolio Management 1. Are portfolios managed by teams or by one individual? G. 2. What is the average number of accounts handled per manager? 3. Which professional staff member will be the primary client contact for City of La Quinta, CA? 4. How frequently are you willing to meet with us? 5. Describe procedures used to ensure that portfolios comply with client investment objectives, policies, and bond resolutions. F. Fees Charged 1. Please include a copy of your firm's fee schedule applicable to this RFP. 2. Identify any expenses that would not be covered through this fee structure and would be required in order to implement the firm's program. 3. Is there a minimum annual fee? Performance Reporting „" i _ _ _ _ _ _ ♦ _ _ _ = _ = A NO __ _ _1 • • I • I IS LV9- ♦ 1 I = = = : = = 2 37 3. 4. Indicate whether your returns are calculated and compiled in accordance with the Association for Investment Management and Research (AIMR/CFA Institute) standards. .«.�a�o'�<:ga `x.'�,,," .E .z >:`.:,cC�:$:'�. ao #�'S}s `� :i�>:g4°"< conform :,,,`. s reporting 5 Do your reports coj.M�IP :4, p 9 standards? Are you willing to customize your reports to meet our specifications? 64. How will you notify us of investment transactions? 7-r. Are confirmation of investment transactions sent directly by the broker/dealer to the client? 8. Do your reports include rating information on investments which is required by GASB 40? H . References Provide a list of at least five (5) client references in California. References should be public agencies with portfolio size and investment objectives similar to City of La Quinta, CA. Include length of time managing the assets, contact name, and phone number. I. Insurance Requirements Exhibit A defines the insurance requirements that will need to be met prior to the [Board/Council]'s approval of any agreement for services. J. Submittal of proposals 1. Seven (7) *copies of the proposal shall be submitted in a sealed envelope bearing the caption RFP for (City of La Quinta, CA) and addressed to:\ City of La Quinta, CA 78-495 Calle Tampico La Quinta, CA 92253 Attention: John M. Falconer, Finance Director/Treasurer 2. Proposal must be received no later than [Time] PST on [Month, Day, Year]. 3. Proposals should be verified before submission. The City of La Quinta, CA shall not be responsible for errors or omissions on the part of the respondent in preparation of a proposal. The City of La Quinta, CA reserves the right to reject any and all proposals, to wave any irregularities, or informalities in the proposals, and to negotiate modifications to any proposal. Enclosures: Investment Policy Treasurers Report 39 Appendix I m D 0 0 0 0 0 0 w w w w w w w w w w w w w zzzzzzz>->->->->-r>->->->->-}>- 0000000000owwwwwwwww Z z z z z z z z z z Z >- >- >- >- >->->- >- >- II LL m m a) m a) a m o 0 a) a) 1 a) d a) m a n. m 0 c c= c c c c c c c c c- c 0zzMzz zzz�Izzzz a Q M z z 0 0 N t- O Q O tO .. a w 0 a) a) m a) (DO o 0 0 o come 0 c N O c c c c, c,,,c c c c, „o c c 0 0 0 0 0 Z Z Z Z N> Z v M N N Z Z Z Z N M N z Z N c+ N m m m m O v m m m a) m m m m m m m >+ !+ >+ >+ N CO M >. CO >+ O CO >+ �^ >+ CO >O. >. LO u) 0 0) Z LO Z LO Z Z in LO N c0 Z 0 cO N 06 C O C E c y o d a) 4 U Q 0 y C O a) RM V c Q E N N N w v 0 a) E y Q U 3 O p1 > C Q d L C C ym, N Q O M a) m o 0 Q n c aci d v, "a m P a z Y my � > w- Q 0 a) � C a) E o ac) 0 ,� °o Q m j U M C v H c fl N v) Q O i V V) a t m LL m O) a) U- N C J to U li fA U a0 z Q U -1 » U2z I- U to M 0 M 0 O O O C) O C) w O O C) O N O O O O O O co co co w co co co co co co co co co co to co to M M M M M M M M M M M to co M M M M M 10 tO lO ►n 0 M 0 0 0 cO tO L0 0 L0 LO LO cO 40 w o U .N o E E 0 rn U c � m O N >. v U Q � m W m > c S o c 0 m o o � Q c U m � T rn U U � m N a c rn a) c E aCLi c O O O -C O C c ? a) E (p 0 N O C > m C L c�a O m � E O N y � m O a) N > � C o a) �E tO o 0 a) C > 0) U) N O N a c y m E c O a 3 M o c° C) a_ E a �. a) o o t ~ > `- 2 CL N (n Z N Appendix J GLOSSARY (Adopted from the Municipal Treasurers Association) The purpose of this glossary is to provide the reader of the City of La Quinta investment policies with a better understanding of financial terms used in municipal investing. AGENCIES: Federal agency securities and/or Government -sponsored enterprises. ASKED: The price at which securities are offered. BANKERS' ACCEPTANCE (BA): A draft or bill of exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.) See Offer. BROKER: A broker brings buyers and sellers together for a commission. CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large -denomination CD's are typically negotiable. COLLATERAL: Securities, evidence of deposit or other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. COMMERCIAL PAPER: Short-term unsecured promissory notes issued by a corporation to raise working capital. These negotiable instruments are purchased at a discount to par value or at par value with interest bearing. Commercial paper is issued by corporations such as General Motors Acceptance Corporation, IBM, Bank America, etc. COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the City of La Quinta. It includes five combined statements 41 for each individual fund and account group prepared in conformity with GAAP. It also includes supporting schedules necessary to demonstrate compliance with finance -related legal and contractual provisions, extensive introductory material, and a detailed Statistical Section. CONDUIT FINANCING: A form of Financing in which a government or a government agency lends its name to a bond issue, although it is acting only as a conduit between a specific project and bond holders. The bond holders can look only to the revenues from the project being financed for repayment and not to the government or agency whose name appears on the bond. COUPON: (a) The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value. (b) A certificate attached to a bond evidencing interest due on a payment date. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities. DERIVATIVES: (1) Financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index or security, and may include a leveraging factor, or (2) financial contracts based upon notional amounts whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities or commodities). DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount. DISCOUNT SECURITIES: Non -interest bearing money market instruments that are issued a discount and redeemed at maturity for full face value, e.g., U.S. Treasury Bills. DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. are issued with maturities of less than one year and interest is paid at maturity. 3. FLBs (Federal Land Bank Bonds) - Long-term mortgage credit provided to farmers by Federal Land Banks. These bonds are issued at irregular times for various maturities ranging from a few months to ten years. The minimum denomination is $1,000. They carry semi-annual coupons. Interest is calculated on a 360-day, 30 day month basis. 4. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, 5. e.g., S&L's, small business firms, students, farmers, farm cooperatives, and exporters. 1. FNMAs (Federal National Mortgage Association) - Used to assist the home mortgage market by purchasing mortgages insured by the Federal Housing Administration and the Farmers Home Administration, as well as those guaranteed by the Veterans Administration. They are issued in various maturities and in minimum denominations of $10,000. Principal and Interest is paid monthly. 2. FHLBs (Federal Home Loan Bank Notes and Bonds) - Issued by the Federal Home Loan Bank System to help finance the housing industry. The notes and bonds provide liquidity and home mortgage credit to savings and loan associations, mutual savings banks, cooperative banks, insurance companies, and mortgage -lending institutions. They are issued irregularly for various maturities. The minimum denomination is $5,000. The notes 42 FFCBs (Federal Farm Credit Bank) - Debt instruments used to finance the short and intermediate term needs of farmers and the national agricultural industry. They are issued monthly with three- and six-month maturities. The FFCB issues larger issues (one to ten year) on a periodic basis. These issues are highly liquid. FICBs (Federal Intermediate Credit bank Debentures) - Loans to lending institutions used to finance the short-term and intermediate needs of farmers, such as seasonal production. They are usually issued monthly in minimum denominations of $3,OQO with a nine -month maturity. Interest is payable at maturity and is calculated on a 360-day, 30-day month basis. 6. FHLMCs (Federal Home Loan Mortgage Corporation) - a government sponsored entity established in 1970 to provide a secondary market for conventional home mortgages. Morgages are purchased solely from the Federal home Loan Bank System member lending institutions whose deposits are insured by agencies of the United States Government. They are issued for various maturities and in minimum denominations of $10,000. Principal and Interest is paid monthly. Other federal agency issues are Small Business Administration notes (SBAs), Government National Mortgage Association notes (GNMAs), Tennessee Valley Authority notes (TVAs), and Student Loan Association notes (SALLIE-MAEs). FEDERAL DEPOSITOR INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits, currently up to $100,000 per deposit. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open -market operations. FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLBs is to liquefy the housing related assets of its members who must purchase stock in their district Bank. FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, 43 and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA or FMHM mortgages. The term "passthrough" is often used to describe Ginnie Maes. LAIF (Local Agency Investment Fund) - A special fund in the State Treasury which local agencies may use to deposit funds for investment. There is no minimum investment period and the minimum transaction is $5,000, in multiples of $1,000 above that, with a maximum balance of $30,000,000 for any agency. The City is restricted to a maximum of ten transactions per month. It offers high liquidity because deposits can be converted to cash in 24 hours and no interest is lost. All interest is distributed to those agencies participating on a proportionate share basis determined by the amounts deposited and the length of time they are deposited. Interest is paid quarterly. The State retains an amount for reasonable costs of making the investments, not to exceed one -quarter of one percent of the earnings. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes. LOCAL GOVERNMENT INVESTMENT POOL (LGIP): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase --reverse repurchase agreements that establishes each party' s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer -lender to liquidate the underlying securities in the vent of default by the seller -borrower. MATURITY: The date upon which the principal or stated value of an investment becomes due and payable MONEY MARKET: The market in which short- term debt instruments (bills, commercial paper, bander' acceptances, etc.) are issued and traded. OFFER: The price asked by a seller of securities. (When you are buying securities, you ask for an offer.) See Asked and Bid. OPEN MARKET OPERATIONS: Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve's most important and most flexible monetary policy tool. PORTFOLIO: Collection of all cash and securities under the direction of the City Treasurer, including Bond Proceeds. PRIMARY DEALER: A group of government securities dealers who submit daily reports of market activity and depositions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC) -registered securities broker -dealers, banks and a few unregulated firms. QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return. REPURCHASE AGREEMENT (RP OR REPO): A repurchase agreement is a short-term investment transaction. Banks buy temporarily idle funds from a customer by selling U.S. Government or other securities with a contractual agreement to repurchase the same securities on a future date. Repurchase agreements are typically for one to ten days in maturity. The customer receives interest from the bank. The interest rate reflects both the prevailing demand for Federal funds and the maturity of the repo. Some banks will execute repurchase agreements for a minimum of $100,000 to $500,000, but most banks have a minimum of $1,000,000. REVERSE REPURCHASE AGREEMENTS (RRP or RevRepo) - A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RRP extensively to finance their positions. Exception: When the Fed is said to be doing RRP, it is lending money that is increasing bank reserves. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection. SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following the initial distribution. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. SEC RULE 15C3-1: See Uniform Net Capital Rule. STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMAS, SLMA, etc.) And Corporations which have imbedded options (e.g., call features, step- up coupons, floating rate coupons, derivative - based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the Shape of the yield curve. SURPLUS FUNDS: Section 53601 of the California Government Code defines surplus funds as any money not required for immediate necessities of the local agency. The City has defined immediate necessities to be payment due within one week. TREASURY BILLS: A non -interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months or one year. TREASURY BONDS: Long-term coupon -bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years. TREASURY NOTES: Medium -term coupon -bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker -dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. 45 Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. UNIFORM PRUDENT INVESTOR ACT: The State of California has adopted this Act. The Act contains the following sections: duty of care, diversification, review of assets, costs, compliance determinations, delegation of investments, terms of prudent investor rule, and application. YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par of plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. INVESTMENT ADVISORY BOARD Correspondence & Written Material Item A Meeting Date: May 11, 2005 TITLE: Month End Cash Report, April 2005 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. Falconer, Finance Director O C O LL N N U) a 0 _ c; 0 �CD O Cp O O 41--mmor-owl . CEO 0000 N0 0 0 0 0 CC 0 C'! O O O ti � 00 Co O O �� N� N O� 0 0 N O O~ O N 0 r- lO O CO N H~ O O 0 COr-cDv� N 00 ��aDOCOMC0000004 CI C c~� CD co O O O N C~ CO is CD f� CD ►� M O M O LO M 0 O0 CD � M I�OMOI..Ow '0c6 LO Nr E C07 M Ch N N O 0�0 O O N 000 0 5 O N LO r- LO O r- r- CO N > C a m N� CO CA CO CD O N N N cM C' � � r- M CO CO r w Cp r- coCO CD N O U � LQ 0 LO ►O 0 N O N O N O O co O r- Lq r- Lo r- L O 0 l0 C7 M co C'M Mll� CD M M M p O O O O co �g't r- CD CD O O O O N N CM N M N co N 2) Cl) ti O N C) CD CO c; c; �CO O p) cm m C M co M CO M COLL M O rA N 00 > = co Oj co O 00 O cq O � m U) CO O O O ap 0 0 0 M O tp Y LL U~ N. O O CD O O M O c) C M O CO 0 00 co O O O O f� coco.da04 covv N � rn v o0 CI O N m 2 LO C) N 0 C N 2 U U CV) 4)N OCNOO O LO M Q "' m N C 0 m MMD N m O U C N L U C C om m +-, N W W M to c4 m��' CU U Y a U w c <p Y MO m' m m OmU=ULa cF mE E•c FA omo�g>°>°a3 w a� Q w �acnoz°o-cdu°.Q ;¢ O L COD w N t0 N O 00 N U y O N x O � L m CD 13 O m N m m > C o N C 304 y O O N N O N N L V T O _ C.0 00 0 0 m CO U m Iq N N N a O Q � C N O OE .� d N C N C L j � ~ > a w- 0.0L_ CO ORN C �.. N O NCO CO CO 7 N m CV �s ,QN to O L O L t_ .. N C] 7 «+ L N Q m p L CD m L O. C m N O C aE CUB C N C N N o V p L O �� m 0 3 m L d N E .� m o 0 N m N N C E •+ N O N L N O r+ G a c. is ro O _ aia Em Val O m Np m Cc O U N V m C am aoc a m c i N C fl. L (D .. 4) m m o� y S c U CO N > N O L C L t G a LLF- LL �- F X m m O EJ N _ N m N CL Vr E y 0— 02 N N j U m C 0 U O C C m 7 L 0- 0 N C N N m L C C U m a� N m L N F- > � C O m C O N 7 0 C O c c O E 'D t: a N N N � r-+ N C > N U .02 E >• :5 U C p a � C C N 2 N N > ac r t c� Phil Angelides, State Treasurer Inside the State Treasurer's Office Local Agency Investment Fund (LAIF) PMIA Performance Report Corporate 3.069 Commercial Paper 11.34% Time Deposii 12.92% LAIF Performance Report Quarter Ending 3/31/05 Apportionment Rate: 2.38% Earnings Ratio: .00006516177802079 Fair Value Factor: .996466418 PMIA Average Monthly Effective Yields March 2005 2.542% February 2005 2.368% January 2005 2.264% Pooled Money Investment Account Portfolio Composition $51.3 Billion 3/31 /05 Loans Treasuries 10.48% . CDs/BNs 16.65% irtgages 1.19% ►gencies 27.81 % Bureau of the Public Debt : Recent Treasury Bill Auction Results Page 1 of 2 Recent Treasury Bill Auction Results Price Term Issue Maturity Discount Investment Per CUSIP Date Date Rate % Rate % $100 91-DAY 05-05-2005 09-04-2005 2.970 2.931 90.274529 91279SVK4 182-DAY 05-05-2005 11-03-2005 3.085 3.177 98.440361 912795VY4 28-DAY 04-28-2005 05-26-2005 2.690 2.733 99.790778 912795SQ5 • 91-DAY 04-28-2005 07-28-2005 2.880 2.941 99.272000 912795VJ7 182-DAY 04-28-2005 10-27-2005 3.090 3.183 98.437833 912795VX6 28-DAY 04-21-2005 05-19-2005 2.690 2.733 99.790778 912795SP7 91-DAY 04-21-2005 07-21-2005 2.805 2.864 99.290958 912795VH1 182-DAY 04-21-2005 10-20-2005 3.040 3.130 98.463111 912795VW8 4-DAY 04-14-2005 04-18-2005 2.640 2.677 99.970667 912795TL5 28-DAY 04-14-2005 05-12-2005 2.555 2.596 99.801278 912795SN2 91-DAY 04-14-2005 07-14-2005 2.710 2.767 99.314972 912795VG3 182-DAY 04-14-2005 10-13-2005 3.065 3.156 98.450472 912795VVO 8-DAY 04-07-2005 04-15-2005 2.660 2.699 99.940889 912795TK7 28-DAY 04-07-2005 05-05-2005 2.585 2.626 99.798944 912795SM4 91-DAY 04-07-2005 07-07-2005 2.735 2.792 99.308653 912795VF5 182-DAY 04-07-2005 10-06-2005 3.035 3.125 98.465639 912795VU2 14-DAY 04-01-2005 04-15-2005 2.720 2.761 99.894222 912795TK7 28-DAY 03-31-2005 04-28-2005 2.650 2.692 99.793889 912795SL6 91-DAY 03-31-2005 06-30-2005 2.780 2.839 99.297278 912795SV4 182-DAY 03-31-2005 09-29-2005 3.090 3.183 98.437833 912795VT5 28-DAY 03-24-2005 04-21-2005 2.700 2.743 99.790000 912795SK8 91-DAY 03-24-2005 06-23-2005 2.800 2.859 99.292222 912795SU6 182-DAY 03-24-2005 09-22-2005 3.035 3.125 98.465639 912795VS7 28-DAY 03-17-2005 04-14-2005 2.645 2.687 99.794278 912795SJ1 91-DAY 03-17-2005 06-16-2005 2.735 2.792 99.308653 912795ST9 182-DAY 03-17-2005 09-15-2005 3.000 3.089 98.483333 912795VR9 28-DAY 03-10-2005 04-07-2005 2.565 2.606 99.800500 912795SH5 91-DAY 03-10-2005 06-09-2005 2.710 2.767 99.314972 912795SS1 182-DAY 03-10-2005 09-08-2005 2.935 3.021 98.516194 912795VQ1 7-DAY 03-08-2005 03-15-2005 2.465 2.500 99.952069 912795TJO 12-DAY 03-03-2005 03-15-2005 2.440 2.476 99.918667 912795TJO 28-DAY 03-03-2005 03-31-2005 2.510 2.550 99.804778 912795SG7 91-DAY 03-03-2005 06-02-2005 2.715 2.772 99.313708 912795SR3 182-DAY 03-03-2005 09-01-2005 2.925 3.010 98.521250 912795VP3 28-DAY 02-24-2005 03-24-2005 2.420 2.458 99.811778 ' 912795SF9 91-DAY 02-24-2005 05-26-2005 2.615 2.669 99.338986 912795SQ5 182-DAY 02-24-2005 08-25-2005 2.850 2.932 98.559167 912795VN8 28-DAY 02-17-2005 03-17-2005 2.355 2.392 99.816833 912795SE2 http://wwws.publicdebt.treas.gov/AI/OFBills 5/3/2005 Bureau of the Public Debt : Recent Treasury Bill Auction Results Page 2 of 2 91-DAY 02-17-2005 05-19-2005 2.540 2.592 99.357944 912795SP7 182-DAY 02-17-2005 08-18-2005 2.760 2.838 98.604667 912795VMO Effective with the 11 /2/98 auction, all bills are auctioned using the single -priced method. Return to Auction Information Page Privacy & Security Notices I Terms & Conditions I Accessibility I Data Quality Last Updated May 3, 2005 11:48:08 AM EDT http://wwws.publicdebt.treas.gov/AI/OFBills 5/3/2005 FRB: H.15--Selected Interest Rates, Web -Only Daily Update --April 29, 2005 Page 1 of 4 Federal Reserve Statistical Release HS Selected Interest Rates (Daily) Skip to Contexit Release Date: April 29, 2005 Weekly...._release._ dates__ and arulounceinents 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 April 29, 2005 Yields in percent per annum 2005 2005 2005 2005 Apr Apr Apr Apr Instruments 25 26 27 28 Federal funds (effective) 1 2 3 2.82 2.78 2.63 2.89 Commercial paper 3 4 5 Nonfinancial 1-month 2.90 2.92 2.92 2.94 2-month 2.94 2.95 2.95 2.97 3-month Financial 1-month 2.94 2.97 2.98 2.98 2-month 2.94 3.00 3.00 3.01 3-month 3.06 3.12 3.06 3.09 CDs (secondary market) 3 6 1-month 3.01 3.02 3.03 3.04 3-month 3.13 3.13 3.14 3.16 6-month 3.35 3.35 3.37 3.36 Eurodollar deposits (London) 3 7 1-month 2.99 3.01 3.01 3.02 3-month 3.12 3.13 3.13 3.13 6-month 3.33 3.34 3.34 3.35 Bank prime loan 2 3 8 5.75 5.75 5.75 5.75 Discount window primary credit 2 9 3.75 3.75 3.75 3.75 U.S. government securities Treasury bills (secondary market) 3 4 4-week 2.60 2.66 2.60 2.55 3-month 2.88 2.86 2.83 2.82 6-month 3.10 3.09 3.08 3.06 Treasury constant maturities Nominal 10 1-month 2.67 2.70 2.65 2.60 3-month 2.93 2.91 2.89 2.88 6-month 3.19 3.18 3.17 3.15 1-year 3.34 3.35 3.33 3.30 2-year 3.64 3.67 3.64 3.59 3-year 3.75 3.77 3.75 3.67 5-year 3.94 3.96 3.92 3.85 7-year 4.08 4.10 4.06 3.99 10-year 4.26 4.28 4.25 4.19 http://www.federalreserve.gov/Releases/H15/update/ 5/3/2005 FRB: H. I 5--Selected Interest Rates, Web -Only Daily Update --April 29, 2005 Page 2 of 4 20-year 11 Inflation -indexed 12 5-year 7-year 10-year 20-year Inflation -indexed long-term average 13 Interest rate swaps 14 1-year 2-year 3-year 4-year 5-year 7-year 10-year 30-year Corporate bonds Moody's seasoned Aaa 15 Baa State & local bonds 16 Conventional mortgages 17 See overleaf for footnotes 4.65 4.67 4.65 4.60 1.15 1.17 1.17 1.11 1.34 1.37 1.37 1.30 1.63 1.66 1.65 1.58 1.83 1.86 1.87 1.80 1.82 1.85 1.85 1.78 3.73 3.75 3.69 3.69 4.04 4.07 3.98 3.98 4.20 4.23, 4.15 4.13 4.30 4.34 4.25 4.24 4.38 4.43 4.34 4.33 4.53 4.56 4.49 4.48 4.70 4.73 4.66 4.66 5.04 5.08 5.02 5.03 5.25 5.26 5.24 5.20 5.97 5.98 5.97 5.94 4.37 5.78 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. S. 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 bid 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 http://www.federalreserve.gov/Releases/H l 5/update/ 5/3/2005 FRB: H.15--Selected Interest Rates, Web -Only Daily Update --April 29, 2005 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. A factor for adjusting the daily nominal 20-year constant maturity in order to estimate a 30-year rate can be found at www.treas.gov/offices/domestic-finance/debt-management/interest-rate/ltcompositeindey 12. 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. 13. Based on the unweighted average bid yields for all Inflation Protected Securities with remaining terms to maturity of more than 10 years. 14. International Swaps and Derivatives Association (ISDA(R)) 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. Eastern time by Garban Intercapital plc and published on Reuters Page ISDAFIX(R)l. ISDAFIX is a registered service mark of ISDA. Source: Reuters Limited. 15. Moody's Aaa rates through December 6, 2001 are averages of Aaa utility and Aaa industrial bond rates. As of December 7, 2001, these rates are averages of Aaa industrial bonds only. 16. Bond Buyer Index, general obligation, .20 years to maturity, mixed quality; Thursday quotations. 17. Contract interest rates on commitments for fixed-rate first mortgages. Source: FHLMC. DESCRIPTION OF THE TREASURY 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, 10, and 20 years. Weekly_._release.._ dates and I Historical.._ data I About Daily update Other formats: Screen reader I ASCII. Statistical releases Home Economic research and data Access b ra I COntaCa__ s http://www.federalreserve.gov/Releases/H15/Update/ 5/3/2005 FRB: H.15--Selected Interest Rates, Web -Only Daily Update --April 29, 2005 Page 4 of Last update: April 29, 2005 http://www.federalreserve.gov/Releases/H15/update/ 5/3/2005 FRB:Commercial Paper Rates and Outstandings Pagel of 3 0C.Ommerc Release I About Outstandings I Historical discount rates I Historical outstandings ------------------------- Data as of May 2, 2005 Commercial Paper Rates and Outstandings Derived from data supplied by The Depository Trust Company Trade data insufficient to support calculation of the 60-day AA nonfinancial and 90-day AA nonfinancial rate(s) for May 2, 2005 . Posted May 3, 2005 Discount rates AA AA A2/P2 Term financial nonfinancial nonfinancial Yield curve Money market basis Percent 3.14 3.2 3.0 2. 1 i 30 60 90 Days to Matunty http://www.federalreserve.gov/Releases/CP/ 5/3/2005 FRB:Commercial Paper Rates and Outstandings Page 2 of 3 Discount rate spread 2001 2002 2003 2004 Discount rate history �-daycommercial limper toany) Financial NonfinancialAM 2M I 2 2 200 .2004 Outstandings Weekly (Wednesday), seasonally adjusted 120 100 80 60 40 20 11 5 3 2 0 http://www.federalreserve.gov/Releases/CP/ 5/3/2005 FRB:Commercial Paper Rates and Outstandings Page 3 of 3 1350 1320 1290 1260 1.230 1.200 1170 11 Billions of dollars V ' V% Billions of doll 290 Finaocllal (WI sc ilc) Nonfinancial Wsht scale) EVII Li 11 o4 2001 2002 2003 2004 250 210 1.70 130 m 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 2005 :Q 1 Release I About I Outstandings I Historical discount rates I Historical outstandings Home I Statistical releases Accessibilityj Contact Us Last update: May 3, 2005 http://www.federalreserve.gov/Releases/CP/ 5/3/2005 J M LL w fU0 :3 N UUm� 2 n. 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Falconer, Finance Director Phil Angelides February 2005 STATE OF CALIFORNIA STATE TREASURER'S OFFICE POOLED MONEY INVESTMENT BOARD REPORT February 2005 SUMMARY................................................................. 01 SELECTED INVESTMENT DATA .................................... 02 PORTFOLIO COMPOSITION ........................................ 03 INVESTMENT TRANSACTIONS ..................................... 04 TIME DEPOSITS ........................................................ 16 BANK DEMAND DEPOSITS .......................................... 28 POOLED MONEY INVESTMENT BOARD DESIGNATION... 29 POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF FEBRUARY 2005 WITH FEBRUARY 2004 (DOLLARS IN THOUSANDS) FEBRUARY 2006 FEBRUARY'2004 CHANGE Average Daily Portfolio $ 54,497,333 $ 53,973,554 $ +523,779 Accrued Earnings $ 98,981 61,570 +37,411 Effective Yield 2.368 1.440 +0.928 Average Life -Month End (in Days) 219 168 +51 1 Total Security Transactions Amount $ 19,639,325 $ 19,802,686 $ -163,361 Number 422 431 -9 Total Time Deposit Transactions Amount $ 3,270,300 $ 2,315,600 $ +954,700 Number 132 125 +7 Average Workday Investment Activity $ 1,206,770 $ 1,228,794 $ -23,024 Prescribed Demand Account Balances For Services $ 574,989 $ 1,379,947 $ -804,958 For Uncollected Funds $ 106,792 $ 100,122 $ +5,670 1 PHILANGELIDES TREASURER STATE OF CALIFORNIA INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED) February 28, 2006 DIFFERENCE IN PERCENT OF PERCENT OF PORTFOLIO FROM TYPE OF SECURITY AMOUNT PORTFOLIO PRIOR MONTH Government Bills $ 2,201,617 4.35 +1.55 Bonds 0 0.00 0.00 Notes 5,982,837 11.81 +1.23 Strips 0 0.00 0.00 Total Government $ 8,184,464 16.16 +2.78 Federal Agency Coupons $ 7,121,852 14.06 +2.84 Certificates of Deposit 7,708,047 16.22 -3.78 Bank Notes 824,977 1.63 -0.26 Bankers' Acceptances 0 0.00 0 Repurchases 0 0.00 0 Federal Agency Discount Notes 7,132,464 14.08 -2.08 Time Deposits 6,620,495 13.07 +1.70 G NMAs 337 0.00 0 Commercial Paper 5,807,815 11.47 -2.47 FHLMC/Remics 605,395 1.20 +0.11 Corporate Bonds 1,570,241 3.10 +0.29 AB 55 Loans 5,370,520 10.60 +1.46 GF Loans 0 0.00 0 Reversed Repurchases -299,250 -0.59 +0.59 Total (Ail Types) $ 50,647,347 100.00 INVESTMENT ACTIVITY FEBRUARY 2006 JANUARY 2005 NUMBER AMOUNT NUMBER AMOUNT Pooled Money 422 $ 19,639,325 441 $ 21,081,115 Other 4 38,330 13 264,149 Time Deposits 132 3,270,300 154 4,634,500 Totals 558 $ 22,947,955 608 $ 25,979,764 PMIA Monthly Average Effective Yield Year to Date Yield Last Day of Month 2.368 1.964 FA 2.264 1.909 Pooled Money Investment Account Portfolio Composition $50.6 Billion Corporate 3.10' Commercial Papei 11.47% Time Deposi- 13.07% 2/28/05 Reverses Loans -0.59% Treasuries in AM CDs/BNs 16.85% 't3 rtgages .20% agencies 28.14% 02/01/06 REDEMPTIONS CD W/F 2.270% 02/01/05 2.270 $50,000 25 $78,819.44 2.302 CD W/F 2.270% 02/01/05 2.270 50,000 25 78,819.44 2.302 CD W/F 2.270% 02/01/05 2.270 50,000 25 78,819.44 2.302 CD W/F 2.270% 02/01/05 2.270 50,000 25 78,819.44 2.302 CD TORONTO 2.020% 02/01/05 2.020 50,000 118 331,055.56 2.048 CD TORONTO 2.020% 02/01/05 2.020 50,000 118 331,055.56 2.048 CD WASHINGTON 2.030% 02/01/05 2.030 50,000 118 332,694.44 2.058 CD WASHINGTON 2.030% 02/01/05 2.030 50,000 118 332,694.44 2.058 CD SOC GEN 1.960% 02/01/05 1.960 50,000 125 340,277.78 1.987 CD SOC GEN 1.960% 02/01/05 1.960 50,000 125 340,277.78 1.987 CD CALYON 1.980% 02/01/05 1.980 50,000 125 343,750.00 2.008 CD CALYON 1.980% 02/01/05 1.980 50,000 125 343,750.00 2.008 CD US BANK 2.000% 02/01/05 2.000 50,000 125 347,222.22 2.028 CD US BANK 2.000% 02/01/05 2.000 50,000 125 347,222.22 2.028 CD CS/1ST BOSTON 1.950% 02/01/05 1.950 50,000 131 354,791.67 1.977 CD CS/1ST BOSTON 1.950% 02/01/05 1.950 50,000 131 354,791.67 1.977 CP CITI GLOBAL 02/01/05 1.900 30,000 131 207,416.67 1.940 CP CITI GLOBAL 02/01/05 1.900 50,000 131 345,694.44 1.940 CP CITI GLOBAL 02/01/05 1.900 50,000 131 345,694.44 1.940 CP NCAT 02/01/05 1.890 30,000 138 217,350.00 1.930 CP NCAT 02/01/05 1.890 50,000 138 362,250.00 1.930 CP NCAT 02/01/05 1.890 50,000 138 362,250.00 1.930 CID CITI GLOBAL 02/01/05 1.850 50,000 139 357,152.78 1.889 CID CITI GLOBAL 02/01/05 1.850 50,000 139 357,152.78 1.889 CID CITI GLOBAL 02/01/05 1.850 50,000 139 357,152.78 1.889 CID CITI GLOBAL 02/01/05 1.850 50,000 139 357,152.78 1.889 MTN GECC 7.250% 02/01/05 4.210 21,800 1008 2,647,095.28 4.089 02/01/05 PURCHASES CID GECC CID GECC CID GECC 02/02/06 REDEMPTIONS 02/02/05 2.480 50,000 02/02/05 2.480 50,000 02/02/05 2.480 50,000 CID GECC 02/02/05 2.480 50,000 1 3,444.44 2.515 CP GECC 02/02/05 2.480 50,000 1 3,444.44 2.515 CP GECC 02/02/05 2.480 50,000 1 3,444.44 2.515 CP GECC 02/02/05 2.280 50,000 41 129,833.33 2.318 CID GECC 02/02/05 2.280 50,000 41 129,833.33 2.318 CID GECC 02/02/05 2.280 50,000 41 129,833.33 2.318 CP GECC 02/02/05 2.280 50,000 41 129,833.33 2.318 02/02/06 NO PURCHASES 02/03/06 NO REDEMPTIONS 02/03/05 NO PURCHASES 4 02/04/05 REDEMPTIONS CD W/F 2.290% 02/04/05 2.290 50,000 10 31,805.56 2.322 CD W/F 2.290% 02/04/05 2.290 50,000 10 31,806.56 2.322 CD W/F 2.280% 02/04/05 2.280 50,000 11 34,833.33 2.312 CD W/F 2.280% 02/04/05 2.280 50,000 11 34,833.33 2.312 CD W/F 2.280% 02/04/05 2.280 50,000 11 34,833.33 2.312 CD W/F 2.280% 02/04/05 2.280 50,000 11 34,833.33 2.312 CD W/F 2.280% 02/04/05 2.280 50,000 11 34,833.33 2.312 CD W/F 2.280% 02/04/05 2.280 50,000 11 34,833.33 2.312 CP MORG STAN 02/04/05 2.510 46,611 4 12,999.29 2.546 CP MORG STAN 02/04/05 2.510 50,000 4 13,944.44 2.546 CP MORG STAN 02/04/05 2.480 2,320 7 1,118.76 2.516 CP MORG STAN 02/04/05 2.480 50,000 7 24,111.00 2.516 CP MORG STAN 02/04/05 2.480 50,000 7 24,111.00 2.516 CP W/F 02/04/05 2.240 20,000 10 12,444.44 2.273 CP W/F 02/04/05 2.240 50,000 10 31,111.11 2.273 CP W/F 02/04/05 2.240 50,000 10 31,111.11 2.273 CP W/F 02/04/05 2.240 50,000 10 31,111.11 2.273 DISC NOTE FHLB 02/04/05 2.210 30,000 10 18,416.67 2.242 DISC NOTE FHLB 02/04/05 2.210 50,000 10 30,694.44 2.242 02/04/05 PURCHASES CP W/F 02/10/05 2.480 25,000 CP W/F 02/10/05 2.480 50,000 CP W/F 02/10/05 2.480 50,000 CP CITI GLOBAL 02/16/05 2.480 50,000 CP AMER EXP 02/16/05 2.480 50,000 CP AMER EXP 02/16/05 2.480 50,000 CP AMER EXP 02/16/05 2.480 50,000 CP AMER EXP 02/16/05 2.480 50,000 CP COUNTRY 02/17/05 2.520 25,000 CP COUNTRY 02/17/05 2.520 50,000 02/07/06 REDEMPTIONS CP CHEVRON 02/07/05 2.230 50,000 18 55,750.00 2.263 CP CHEVRON 02/07/05 2.230 50,000 18 55,750.00 2.263 MTN GMAC 4.150% 02/07/05 4.150 25,000 731 2,075,000.00 4.156 MTN GMAC 4.150% 02/07/05 4.150 25,000 731 2,075,000.00 4.156 02/07/06 PURCHASES FHLB MTN COUNTRY MTN JP MORGAN TREAS BILLS 02/08/05 REDEMPTIONS 3.250% 07/21/06 3.390 50,000 3.500% 12/19/05 3.228 2,500 3.625% 08/15/06 3.509 23,546 06/30/05 2.580 25,000 CP MORG STAN 02/08/05 2.500 50,000 11 38,194.44 2.537 5 02/08/06 REDEMPTIONS (continued) CP MORG STAN CP MORG STAN CP MORG STAN CP CITI GLOBAL CP CITI GLOBAL DISC NOTE FHLMC DISC NOTE FHLMC MTN DISNEY 02/08/05 PURCHASES CD CD CD CD CD CD DISC NOTE DISC NOTE TREAS TREAS TREAS TREAS TREAS TREAS RB CANADA RB CANADA RB CANADA RB CANADA MONTREAL MONTREAL FHLMC FHLMC BILL BILL BILL BILL BILL BILL 02/09/05 REDEMPTIONS 02/08/05 2.500 02/08/05 2.500 02/08/05 2.500 02/08/05 1.960 02/08/05 1.960 02/08/05 1.640 02/08/05 1.640 7.300% 02/08/05 4.690 2.830% 07/06/05 2.830 2.830% 07/06/05 2.830 2.830% 07/06/05 2.830 2.830% 07/06/05 2.830 2.800% 07/06/05 2.800 2.800% 07/06/05 2.800 07/05/05 2.750 07/05/05 2.750 06/30/05 2.555 06/30/05 2.555 06/30/05 2.560 06/30/05 2.560 06/30/05 2.565 06/30/05 2.565 50,000 11 38,194.44 50,000 11 38,194.44 50,000 11 38,194.44 50,000 131 356,611.11 50,000 131 356,611.11 50,000 273 621,833.33 50,000 273 621,833.33 20,000 1013 2,701,733.33 30,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 2.537 2.537 2.537 2.001 2.001 1.684 1.684 4.575 CP MORG STAN 02/09/05 2.500 38,000 12 31,666.67 2.537 CP MORG STAN 02/09/05 2.500 50,000 12 41,666.67 2.537 CP MORG STAN 02/09/05 2.500 50,000 12 41,666.67 2.537 CP MORG STAN 02/09/05 2.500 50,000 12 41,666.67 2.537 CP CHEVRON FDG 02/09/05 2.450 50,000 12 40,833.33 2.486 02/09/05 PURCHASES FHLB CP CITI GLOBAL CP CITI GLOBAL CP CITI GLOBAL CP CITI GLOBAL 02/10/06 REDEMPTIONS CP CITI GLOBAL CP CITI GLOBAL CP CITI GLOBAL CP CITI GLOBAL CP W/F CP W/F 3.500% 08/15/06 2.420 02/10/05 2.460 02/10/05 2.460 02/10/05 2.460 02/10/05 2.460 02/10/05 2.460 02/10/05 2.460 02/10/05 2.460 02/10/05 2.460 02/10/05 2.480 02/10/05 2.480 6 35,000 15,000 50,000 50,000 50,000 15,000 1 1,025.00 2.494 50,000 1 3,416.67 2.494 50,000 1 3,416.67 2.494 50,000 1 3,416.67 2.494 25,000 6 10,333.33 2.515 50,000 6 20,666.67 2.515 02/10/05 REDEMPTIONS (continued) CP W/F CP MORG STAN CP MORG STAN CP MORG STAN 02/10/05 PURCHASES FHLB FHLB CP CITI GLOBAL CP CITI GLOBAL CP CITI GLOBAL CP CITI GLOBAL 02/10/05 PURCHASES c/ FHLB FHLB FHLB 02/11/05 REDEMPTIONS CP CITI GLOBAL CP CITI GLOBAL CP CITI GLOBAL CP CITI GLOBAL CP MORG STAN CP MORG STAN 02/11 /05 SALES c/ FHLB FHLB FHLB 02/11/05 PURCHASES CP BRISTOL DISC NOTE FHLMC DISC NOTE FHLMC DISC NOTE FHLMC DISC NOTE FHLMC DISC NOTE FHLMC DISC NOTE FHLMC 02/14/05 REDEMPTIONS CP BRISTOL CP W/F CP W/F 02/10/05 2.480 50,000 6 20,666.67 2.515 02/10/05 2.500 35,000 13 31,597.22 2.537 02/10/05 2.500 50,000 13 45,138.89 2.537 02/10/05 2.500 50,000 13 45,138.89 2.537 6.375% 08/15/06 3.381 3.500% 08/15/06 3.381 02/11/05 2.480 02/11/05 2.480 02/11/05 2.480 02/11/05 2.480 3.375% 02/15/07 2.480 3.500% 11 /15/07 2.480 3.500% 11 /15/07 2.480 8,260 13,485 30,000 50,000 50,000 50,000 50,000 1,940 50,000 02/11/05 2.480 30,000 1 2,066.67 2.515 02/11/05 2.480 50,000 1 3,444.44 2.515 02/11/05 2.480 50,000 1 3,444.44 2.515 02/11/05 2.480 50,000 1 3,444.44 2.515 02/11/05 2.500 22,550 14 21,923.61 2.537 02/11/05 2.500 50,000 14 48,611.11 2.537 3.375% 02/15/07 2.480 50,000 1 3,367.84 2.514 3.500% 11 /15/07 2.480 1,940 1 131.58 2.514 3.500% 11 /15/07 2.480 50,000 1 3,389.47 2.514 02/14/05 2.490 50,000 07/05/05 2.750 50,000 07/06/05 2.750 35,000 07/06/05 2.760 37,500 07/06/05 2.760 50,000 07/06/05 2.760 50,000 07/06/05 2.760 50,000 02/14/05 2.490 50,000 3 10,375.00 2.525 02/14/05 2.480 50,000 17 58,555.56 2.517 02/14/05 2.480 50,000 17 58,555.56 2.517 7 02/14/06 REDEMPTIONS (continued) CP W/F 02/14/05 2.480 50,000 17 58,555.56 2.517 CP W/F 02/14/05 2.480 50,000 17 58,555.56 2.517 CP FCAR 02/14/05 1.950 27,000 146 213,525.00 1.993 CP FCAR 02/14/05 1.950 50,000 146 395,416.67 1.993 CP FCAR 02/14/05 1.950 50,000 146 395,416.67 1.993 CP FCAR 02/14/05 1.950 50,000 146 395,416.67 1.993 CP FCAR 02/14/05 1.950 50,000 146 395,416.67 1.993 02/14/05 PURCHASES FHLB 2.500% 03/30/06 3.262 50,000 CD CS/1 ST BOSTON 2.840% 07/01/05 2.825 50,000 CD CS/1 ST BOSTON 2.840% 07/01/05 2.825 50,000 CD CS/1ST BOSTON 2.840% 07/01/05 2.825 50,000 CD CS/1ST BOSTON 2.840% 07/01/05 2.825 50,000 02/16/05 REDEMPTIONS FHLB FHLB FHLB 02/16/06 PURCHASES TREAS BILL TREAS BILL 02/16/06 REDEMPTIONS 4.000% 02/15/05 4.050 4.000% 02/15/05 4.050 4.000% 02/15/05 4.050 06/30/05 2.630 06/30/05 2.630 25,000 1079 2,982,093.97 4.052 25,000 1079 2,982,093.97 4.052 50,000 1078 5,958,888.89 4.052 50,000 50,000 CD W/F 2.510% 02/16/05 2.510 50,000 16 55,777.78 2.545 CD W/F 2.510% 02/16/05 2.510 50,000 16 55,777.78 2.545 CP CITI GLOBAL 02/16/05 2.480 50,000 12 41,333.33 2.517 CP AMER EXP 02/16/05 2.480 50,000 12 41,333.33 2.517 CP AMER EXP 02/16/05 2.480 50,000 12 41,333.33 2.517 CP AMER EXP 02/16/05 2.480 50,000 12 41,333.33 2.517 CP AMER EXP 02/16/05 2.480 50,000 12 41,333.33 2.517 CP SRAC 02/16/05 2.550 25,000 16 28,333.33 2.588 CP MORG STAN 02/16/05 2.530 29,000 16 32,608.89 2.568 CP MORG STAN 02/16/05 2.530 50,000 16 56,222.22 2.568 CP MORG STAN 02/16/05 2.530 50,000 16 56,222.22 2.568 CP MORG STAN 02/16/05 2.530 50,000 16 56,222.22 2.568 CP CITI GLOBAL 02/16/05 2.520 501000 16 56,000.00 2.558 CP CITI GLOBAL 02/16/05 2.520 50,000 16 56,000.00 2.558 CP COUNTRY 02/16/05 2.520 40,575 19 53,964.75 2.558 CP CITICORP 02/16/05 2.450 50,000 19 64,652.78 2.487 CP CITICORP 02/16/05 2.450 50,000 19 64,652.78 2.487 CP CITICORP 02/16/05 2.450 50,000 19 64,652.78 2.487 CP CITICORP 02/16/05 2.450 50,000 19 64,652.78 2.487 CP SARA LEE 02/16/05 2.360 50,000 42 137,666.67 2.399 CP FCAR 02/16/05 2.100 35,000 111 226,625.00 2.143 8 02/16/05 REDEMPTIONS (continued) CP FCAR 02/16/05 2.100 50,000 111 323,750.00 2.143 CP HOUSEHOLD 02/16/05 1.920 50,000 154 410,666.67 1.962 CP HOUSEHOLD 02/16/05 1.920 50,000 154 410,666.67 1.962 CP HOUSEHOLD 02/16/05 1.920 50,000 154 410,666.67 1.962 02/16/05 PURCHASES BN BN BN BN BN BN CD CD CD CP CP FHLB 2.500% 03/13/06 3.260 50,000 B/A 2.850% 06/30/05 2.850 50,000 B/A 2.850% 06/30/05 2.850 50,000 B/A 2.850% 06/30/05 2.850 50,000 B/A 2.850% 06/30/05 2.850 50,000 B/A 2.850% 06/30/05 2.850 50,000 B/A 2.850% 06/30/05 2.850 50,000 UBS 2.850% 07/01/05 2.845 50,000 UBS 2.850% 07/01/05 2.845 50,000 UBS 2.850% 07/01/05 2.845 50,000 FCAR 07/06/05 2.870 50,000 FCAR 07/06/05 2.870 50,000 02/17/06 REDEMPTIONS CP COUNTRY 02/17/05 2.520 25,000 CP COUNTRY 02/17/05 2.520 50,000 02/17/06 PURCHASES FHLB 3.500% 08/15/06 3.475 50,000 FHLB 3.500% 08/15/06 3.475 50,000 CD US BANK 2.880% 06/30/05 2.880 50,000 CD US BANK 2.880% 06/30/05 2.880 50,000 CD US BANK 2.880% 06/30/05 2.880 50,000 CD US BANK 2.880% 06/30/05 2.880 50,000 CP CITICORP 02/18/05 2.500 50,000 CP CITICORP 02/18/05 2.500 50,000 CP CITICORP 02/18/05 2.500 50,000 CP CITICORP 02/18/05 2.500 50,000 CP FCAR 07/07/05 2.870 25,000 CP FCAR 07/07/05 2.870 50,000 CP FCAR 07/07/05 2.870 50,000 CP GECC 07/20/05 2.880 25,000 CP GECC 07/20/05 2.880 50,000 02/18/05 REDEMPTIONS CD SOC GEN 1.910% 02/18/05 1.910 CD BNP PARIBAS 1.920% 02/18/05 1.920 CD BNP PARIBAS 1.920% 02/18/05 1.920 CD BNP PARIBAS 1.920% 02/18/05 1.920 CD BNP PARIBAS 1.920% 02/18/05 1.920 9 13 22,750.00 2.557 13 45,500.00 2.557 40,000 156 331, 066.67 1.937 50,000 156 416,000.00 1.947 50,000 156 416,000.00 1.947 50,000 156 416,000.00 1.947 50,000 156 416,000.00 1.947 02/18/06 REDEMPTIONS (continued) CP CITICORP 02/18/05 2.500 50,000 1 3,472.22 2.535 CP CITICORP 02/18/05 2.500 50,000 1 3,472.22 2.535 CP CITICORP 02/18/05 2.500 50,000 1 3,472.22 2.535 CP CITICORP 02/18/05 2.500 50,000 1 3,472.22 2.535 CP NCAT 02/18/05 1.950 35,000 150 284,375.00 1.993 CP NCAT 02/18/05 1.950 50,000 150 406,250.00 1.993 CP NCAT 02/18/05 1.950 50,000 150 406,250.00 1.993 CP FCAR 02/18/05 1.920 14,000 156 116,480.00 1.963 CP FCAR 02/18/05 1.920 50,000 156 416,000.00 1.963 CP FCAR 02/18/05 1.920 50,000 156 416,000.00 1.963 02/18/05 PURCHASES CP CITICORP 02/22/05 2.460 25,000 TREAS BILL 06/30/05 2.665 50,000 TREAS BILL 06/30/05 2.665 50,000 TREAS BILL 06/30/05 2.665 50,000 TREAS BILL 06/30/05 2.665 50,000 02/22/06 REDEMPTIONS CD BARCLAYS 2.520% 02/22/05 2.510 40,000 25 69,722.71 2.545 CD BARCLAYS 2.520% 02/22/05 2.510 50,000 25 87,153.38 2.545 CD BARCLAYS 2.520% 02/22/05 2.510 50,000 25 87,153.38 2.545 CD ABN AMRO 2.460% 02/22/05 2.460 50,000 25 85,416.67 2.494 CD ABN AMRO 2.460% 02/22/05 2.460 50,000 25 85,416.67 2.494 CP CITICORP 02/22/05 2.460 25,000 4 6,833.33 2.495 02/22/05 NO PURCHASES 02/23/05 NO REDEMPTIONS 02/23/05 PURCHASES CP COUNTRY 03/02/05 2.550 30,000 CP COUNTRY 03/02/05 2.550 50,000 CP COUNTRY 03/10/05 2.550 48,800 CP NCAT 04/01 /05 2.550 44,000 CP NCAT 04/01/05 2.550 50,000 02/24/05 RRS TREAS BILL 03/31/05 2.170 50,000 TREAS BILL 03/31/05 2.170 50,000 TREAS BILL 03/31/05 2.170 50,000 TREAS BILL 03/31/05 2.170 50,000 02/24/05 NO REDEMPTIONS 10 02/24/05 PURCHASES g/ CD W/F CD W/F CD W/F CD W/F 02/24/05 PURCHASES FHLB FHLB FHLB FHLB FHLB FHLB CD W/F CD W/F CP TEXT FIN CP MORG STAN CP MORG STAN CP MORG STAN CP W/F CP W/F CP W/F CP W/F 02/25/06 RRS TREAS BILL TREAS BILL 02/25/06 REDEMPTIONS CD BARCLAYS CD BARCLAYS CD ABN AMRO CD ABN AMRO CD ABN AMRO 02/25/06 PURCHASES g/ CD CIBC CD CIBC 02/25/05 PURCHASES 2.500% 03/10/05 2.500 50,000 2.500% 03/10/05 2.500 50,000 2.500% 03/10/05 2.500 50,000 2.500% 03/10/05 2.500 50,000 2.500% 03/30/06 3.400 50,000 2.500% 03/30/06 3.400 50,000 3.250% 07/21/06 3.470 50,000 3.250% 07/21/06 3.470 50,000 3.500% 09/08/06 3.500 50,000 3.500% 09/08/06 3.500 50,000 2.500% 03/03/05 2.500 50,000 2.500% 03/03/05 2.500 50,000 03/03/05 2.570 20,000 03/03/05 2.560 50,000 03/03/05 2.560 50,000 03/03/05 2.560 50,000 03/08/05 2.500 50,000 03/08/05 2.500 50,000 03/10/05 2.500 50,000 03/10/05 2.500 50,000 03/31/05 2.220 50,000 03/31 /05 2.220 50,000 1.700% 02/25/05 1.700 50,000 290 684,722.22 1.724 1.700% 02/25/05 1.700 50,000 290 684,722.22 1.724 1.730% 02/25/05 1.720 50,000 290 692,832.83 1.744 1.730% 02/25/05 1.720 50,000 290 692,832.83 1.744 1.730% 02/25/05 1.720 50,000 290 692,832.83 1.744 2.500% 03/10/05 2.500 2.500% 03/10/05 2.500 CD CS/1 ST BOSTON 2.620% 04/01/05 2.610 CD CS/1ST BOSTON 2.620% 04/01/05 2.610 CD CS/1ST BOSTON 2.620% 04/01/05 2.610 CD US BANK 2.630% 04/01/05 2.630 CD US BANK 2.630% 04/01/05 2.630 MTN TOYOTA 3.600% 08/29/06 3.600 11 50,000 50,000 16,000 50,000 50,000 50,000 50,000 50,000 02/26/05 PURCHASES (continued) SBA FR 2.550% 01/25/30 2.550 19,934 SBA FR 2.550% 02/25/30 2.550 13,656 02/28/05 REDEMPTIONS BN BANC ONE 1.710% 02/28/05 1.710 50,000 292 693,500.00 1.734 BN BANC ONE 1.710% 02/28/05 1.710 50,000 292 693,500.00 1.734 CD WA MU, FA 1.890% 02/28/05 1.890 50,000 195 511,875.00 1.916 CD WA MU, FA 1.890% 02/28/05 1.890 50,000 195 511,875.00 1.916 CD BNP PARIBAS 1.920% 02/28/05 1.920 50,000 222 592,000.00 1.947 CD US BANK 1.930% 02/28/05 1.930 50,000 227 608,586.11 1.957 CD US BANK 1.930% 02/28/05 1.930 50,000 227 608,586.11 1.957 CD CS/1 ST BOSTON 1.875% 02/28/05 1.865 50,000 228 590,620.30 1.891 CD CS/1 ST BOSTON 1.875% 02/28/05 1.865 50,000 228 590,620.30 1.891 CD TORONTO 1.888% 02/28/05 1.888 50,000 228 594,578.88 1.903 CD TORONTO 1.888% 02/28/05 1.888 50,000 228 594,578.88 1.903 CD CALYON 2.000% 02/28/05 2.000 50,000 243 675,000.00 2.028 CD CALYON 2.000% 02/28/05 2.000 50,000 243 675,000.00 2.028 CD WA MU BANK 2.020% 02/28/05 2.020 50,000 243 681,750.00 2.048 CD WA MU BANK 2.020% 02/28/05 2.020 50,000 243 681,750.00 2.048 CD UBS 1.915% 02/28/05 1.910 50,000 249 660,564.21 1.937 CD UBS 1.915% 02/28/05 1.910 50,000 249 660,564.21 1.937 CD BNP PARIBAS 1.920% 02/28/05 1.920 50,000 249 664,000.00 1.947 CD BNP PARIBAS 1.920% 02/28/05 1.920 50,000 249 664,000.00 1.947 CD BNP PARIBAS 1.920% 02/28/05 1.920 50,000 249 664,000.00 1.947 CD BNP PARIBAS 1.920% 02/28/05 1.920 50,000 249 664,000.00 1.947 CD RB SCOT 1.920% 02/28/05 1.920 50,000 249 664,000.00 1.947 CD RB SCOT 1.920% 02/28/05 1.920 50,000 249 664,000.00 1.947 CD RABO 1.903% 02/28/05 1.940 50,000 249 670,744.96 1.966 CD RABO 1.903% 02/28/05 1.940 50,000 249 670,744.96 1.966 CD TORONTO 1.955% 02/28/05 1.950 50,000 252 682,523.57 1.977 CD TORONTO 1.955% 02/28/05 1.950 50,000 252 682,523.57 1.977 CD CALYON 1.965% 02/28/05 1.965 50,000 252 687,750.00 1.992 CD WA MU, FA 1.990% 02/28/05 1.990 50,000 252 696,500.00 2.018 CD FORTIS 1.970% 02/28/05 1.970 50,000 252 689,500.00 1.997 CD FORTIS 1.970% 02/28/05 1.970 50,060 252 689,500.00 1.997 CD CIBC 1.960% 02/28/05 1.960 50,000 255 694,166.67 1.987 CD CIBC 1.960% 02/28/05 1.960 50,000 255 694,166.67 1.987 CD US BANK 1.990% 02/28/05 1.990 50,000 256 707,555.56 2.018 CD US BANK 1.990% 02/28/05 1.990 50,000 256 707,555.56 2.018 CD WA MU, FA 2.020% 02/28/05 2.020 50,000 256 718,222.22 2.048 CD WA MU, FA 2.020% 02/28/05 2.020 50,000 256 718,222.22 2.048 CD US BANK 1.950% 02/28/05 1.950 50,000 257 696,041.67 1.997 CD US BANK 1.950% 02/28/05 1.950 50,000 257 696,041.67 1.997 CD RB CANADA 1.720% 02/28/05 1.715 50,000 272 647,913.05 1.739 CD RB CANADA 1.720% 02/28/05 1.715 50,000 272 647,913.05 1.739 CD RB CANADA 1.720% 02/28/05 1.715 50,000 284 676,498.54 1.739 CD RB CANADA 1.720% 02/28/05 1.715 50,000 284 676,498.54 1.739 CD CIBC 1.720% 02/28/05 1.720 50,000 291 695,166.67 1.744 CD CIBC 1.720% 02/28/05 1.720 50,000 291 695,166.67 1.744 12 02/28/05 REDEMPTIONS (continued) CD US BANK 1.720% 02/28/05 1.720 50,000 293 699,944.44 1.744 CD US BANK 1.720% 02/28/05 1.720 50,000 293 699,944.44 1.744 CD WA MU, FA 1.780% 02/28/05 1.780 50,000 293 724,361.11 1.805 CD WA MU, FA 1.780% 02/28/05 1.780 50,000 293 724,361.11 1.805 CD WA MU BANK 1.780% 02/28/05 1.780 50,000 293 724,361.11 1.805 CD WA MU BANK 1.780% 02/28/05 1.780 50,000 293 724,361.11 1.805 DISC NOTE FHLMC 02/28/05 1.920 50,000 215 573,333.33 1.969 DISC NOTE FHLMC 02/28/05 1.920 50,000 215 573,333.33 1.969 DISC NOTE FHLMC 02/28/05 1.920 50,000 215 573,333.33 1.969 DISC NOTE FHLMC 02/28/05 1.920 50,000 215 573,333.33 1.969 DISC NOTE FHLMC 02/28/05 1.860 50,000 220 568,333.33 1.908 DISC NOTE FHLMC 02/28/05 1.860 50,000 220 568,333.33 1.908 DISC NOTE FHLMC 02/28/05 1.860 50,000 220 568,333.33 1.908 DISC NOTE FNMA 02/28/05 1.860 50,000 220 568,333.33 1.908 DISC NOTE FNMA 02/28/05 1.860 50,000 220 568,333.33 1.908 DISC NOTE FHLMC 02/28/05 1.940 50,000 243 654,750.00 1.993 DISC NOTE FHLMC 02/28/05 1.940 50,000 243 654,750.00 1.993 DISC NOTE FHLMC 02/28/05 1.940 50,000 243 654,750.00 1.993 DISC NOTE FHLMC 02/28/05 1.940 50,000 243 654,750.00 1.993 DISC NOTE FHLMC 02/28/05 1.940 50,000 243 654,750.00 1.993 DISC NOTE FHLMC 02/28/05 1.940 50,000 243 654,750.00 1.993 DISC NOTE FHLMC 02/28/05 1.940 25,000 244 328,722.22 1.993 DISC NOTE FHLMC 02/28/05 1.940 50,000 244 657,444.45 1.993 DISC NOTE FHLMC 02/28/05 1.940 50,000 244 657,444.44 1.993 DISC NOTE FHLMC 02/28/05 1.940 50,000 244 657,444.44 1.993 DISC NOTE FNMA 02/28/05 1.860 50,000 249 643,250.00 1.910 DISC NOTE FNMA 02/28/05 1.860 50,000 249 643,250.00 1.910 DISC NOTE FHLMC 02/28/05 1.890 50,000 250 656,250.00 1.942 DISC NOTE FHLMC 02/28/05 1.890 50,000 250 656,250.00 1.942 DISC NOTE FHLMC 02/28/05 1.880 50,000 252 658,000.00 1.932 DISC NOTE FNMA 02/28/05 1.880 50,000 252 658,000.00 1.932 DISC NOTE FNMA 02/28/05 1.880 50,000 252 658,000.00 1.932 DISC NOTE FHLMC 02/28/05 1.900 50,000 256 675,555.56 1.953 DISC NOTE FHLMC 02/28/05 1.900 50,000 256 675,555.56 1.953 DISC NOTE FHLMC 02/28/05 1.860 50,000 257 663,916.67 1.911 DISC NOTE FHLMC 02/28/05 1.860 50,000 257 663,916.67 1.911 DISC NOTE FHLMC 02/28/05 1.860 50,000 257 663,916.67 1.911 DISC NOTE FHLMC 02/28/05 1.860 50,000 257 663,916.67 1.911 DISC NOTE FNMA 02/28/05 1.890 50,000 257 674,625.00 1.942 DISC NOTE FNMA 02/28/05 1.890 50,000 257 674,625.00 1.942 DISC NOTE FHLMC 02/28/05 1.720 50,000 270 645,000.00 1.767 DISC NOTE FHLMC 02/28/05 1.720 50,000 270 645,000.00 1.767 DISC NOTE FNMA 02/28/05 1.640 50,000 272 619,555.56 1.684 DISC NOTE FNMA 02/28/05 1.640 50,000 272 619,555.56 1.684 DISC NOTE FNMA 02/28/05 1.640 50,000 272 619,555.56 1.684 DISC NOTE FNMA 02/28/05 1.640 50,000 272 619,555.56 1.684 DISC NOTE FNMA 02/28/05 1.650 50,000 279 639,375.00 1.695 DISC NOTE FNMA 02/28/05 1.650 50,000 279 639,375.00 1.695 DISC NOTE FNMA 02/28/05 1.650 50,000 279 639,375.00 1.695 DISC NOTE FNMA 02/28/05 1.650 50,000 279 639,375.00 1.695 13 02/28/05 REDEMPTIONS (continued) DISC NOTE FNMA 02/28/05 1.650 50,000 279 639,375.00 1.695 DISC NOTE FNMA 02/28/05 1.650 50,000 279 639,375.00 1.695 DISC NOTE FNMA 02/28/05 1.650 50,000 279 639,375.00 1.695 DISC NOTE FNMA 02/28/05 1.650 50,000 279 639,375.00 1.695 DISC NOTE FNMA 02/28/05 1.650 50,000 284 650,833.33 1.695 DISC NOTE FNMA 02/28/05 1.650 50,000 284 650,833.33 1.695 DISC NOTE FNMA 02/28/05 1.610 50,000 286 639,527.78 1.654 DISC NOTE FNMA 02/28/05 1.610 50,000 286 639,527.78 1.654 DISC NOTE FHLMC 02/28/05 1.600 50,000 292 648,888.89 1.644 DISC NOTE FHLMC 02/28/05 1.600 50,000 292 648,888.89 1.644 DISC NOTE FHLMC 02/28/05 1.600 50,000 292 648,888.89 1.644 DISC NOTE FHLMC 02/28/05 1.600 50,000 292 648,888.89 1.644 DISC NOTE FNMA 02/28/05 1.620 50,000 293 659,250.00 1.664 DISC NOTE FNMA 02/28/05 1.620 50,000 293 659,250.00 1.664 DISC NOTE FNMA 02/28/05 1.620 50,000 293 659,250.00 1.664 DISC NOTE FNMA 02/28/05 1.620 50,000 293 659,250.00 1.664 02/28/05 PURCHASES FHLB 3.200% 02/28/06 3.200 50,000 FHLB 3.200% 02/28/06 3.200 50,000 FHLB 3.200% 02/28/06 3.200 50,000 FHLB 3.500% 08/15/06 3.553 20,000 FHLB 3.500% 08/15/06 3.550 30,000 FHLB 3.500% 08/15/06 3.553 50,000 CID CITICORP 03/04/05 2.590 5,000 CID CITICORP 03/04/05 2.590 50,000 CID MORG STAN 03/04/05 2.540 50,000 CID MORG STAN 03/04/05 2.540 50,000 CID MORG STAN 03/04/05 2.540 50,000 CID GECC 03/08/05 2.540 50,000 CID GECC 03/08/05 2.540 50,000 CID GECC 03/08/05 2.540 50,000 CID GECC 03/08/05 2.540 50,000 CID GECC 03/08/05 2.540 50,000 DISC NOTE FHLMC 06/30/05 2.815 50,000 DISC NOTE FHLMC 06/30/05 2.815 50,000 DISC NOTE FHLMC 06/30/05 2.820 50,000 DISC NOTE FHLMC 06/30/05 2.820 50,000 DISC NOTE FHLMC 06/30/05 2.820 50,000 DISC NOTE FHLMC 06/30/05 2.820 50,000 14 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. q// Outright purchase against Reverse Repurchase Agreement. h/ Security "SWAP" transactions. jj Buy back agreement. RRS Reverse Repurchase Agreement. RRP Termination of Reverse Repurchase Agreement. 15 NAME ALAMO Diablo Valley Bank ALHAMBRA Omni Bank, N.A. Omni Bank, N.A. Omni Bank, N.A. Omni Bank, N.A. Omni Bank, N.A. Omni Bank, N.A. Omni Bank, N.A. The Bank of East Asia (USA), N.A. The Bank of East Asia (USA), N.A. The Bank of East Asia (USA), N.A. ARROYO GRANDE Mid State Bank and Trust Mid State Bank and Trust Mid State Bank and Trust Mid State Bank and Trust Mid State Bank and Trust Mid State Bank and Trust BREA Pacific Western National Bank CALABASAS First Bank of Beverly Hills, FSB First Bank of Beverly Hills, FSB First Bank of Beverly Hills, FSB First Bank of Beverly Hills, FSB CAMARILLO First California Bank First California Bank First California Bank First California Bank TIME DEPOSITS DEPOSIT DATE YIELD 01 /07/2005 2.410 12/10/2004 2.290 01 /07/2005 2.390 11 /23/2004 2.290 11112/2004 2.350 02/18/2005 2.630 12/17/2004 2.480 12/01 /2004 2.450 10/14/2004 2.050 02/09/2005 2.540 02/16/2005 2.880 09/09/2004 1.930 10/13/2004 2.050 11 /17/2004 2.350 12/10/2004 2.470 01 /13/2005 2.710 02/09/2005 2.810 02/02/2005 2.770 09/02/2004 1.850 11 /04/2004 2.230 12/01 /2004 2.450 12/15/2004 2.510 09/22/2004 1.960 02/04/2005 2.650 12/03/2004 2.470 01 /26/2005 2.720 16 PAR MATURITY AMOUNT {$) DATE 4,500,000.00 04/08/2005 6,000,000.00 03/11/2005 2,000,000.00 04/08/2005 2,000,000.00 04/08/2005 2,000,000.00 05/13/2005 4,000,000.00 05/20/2005 2,000,000.00 06/01/2005 2,000,000.00 06/01/2005 3,095,000.00 04/14/2005 3,000,000.00 05/12/2005 6,000,000.00 08/17/2005 5,000,000.00 03/10/2005 5,000,000.00 04/13/2005 5,000,000.00 05/18/2005 5,000,000.00 06/10/2005 5,000,000.00 07/14/2005 5,000,000.00 08/10/2005 4,000,000.00 08/03/2005 10,000,000.00 03/03/2005 10,000,000.00 05/05/2005 10,000,000.00 06/01/2005 10,000,000.00 06/15/2005 6,000,000.00 03/23/2005 2,000,000.00 06/03/2005 4,000,000.00 06/03/2005 6,000,000.00 07/27/2005 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE CAMERON PARK Western Sierra National Bank 10/06/2004 2.030 10,000,000.00 04/06/2005 Western Sierra National Bank 01/12/2005 2.670 7,000,000.00 07/13/2005 CHATSWORTH Premier America Credit Union 01/06/2005 2.390 10,000,000.00 04/07/2005 Premier America Credit Union 01/19/2005 2.440 10,000,000.00 05/06/2005 Premier America Credit Union 02/09/2005 2.550 10,000,000.00 05/12/2005 Premier America Credit Union 02/09/2005 2.550 10,000,000.00 05/12/2005 CHICO Tri Counties Bank 12/16/2004 2.290 20,000,000.00 03/17/2005 CITY OF INDUSTRY EverTrust Bank 12/10/2004 2.270 6,000,000.00 03/11/2005 EverTrust Bank 10/28/2004 2.120 6,000,000.00 04/28/2005 EverTrust Bank 02/02/2005 2.500 5,000,000.00 05/04/2005 CONCORD Cal State 9 Credit Union 02/23/2005 2.670 10,000,000.00 05/25/2005 DUBLIN Operating Engineers Local # 3 FCU 10/06/2004 2.030 5,000,000.00 04/06/2005 Operating Engineers Local # 3 FCU 12/10/2004 2.450 10,000,000.00 06/10/2005 Operating Engineers Local # 3 FCU 02/09/2005 2.790 5,000,000.00 08/11/2005 EL CENTRO Valley Independent Bank 12/01/2004 2.280 25,000,000.00 03/02/2005 Valley Independent Bank 01/07/2005 2.410 20,000,000.00 04/08/2005 Valley Independent Bank 01/14/2005 2.420 47,500,000.00 04/15/2005 Valley Independent Bank 01/21/2005 2.460 32,500,000.00 04/22/2005 Valley Independent Bank 02/04/2005 2.590 25,000,000.00 05/06/2005 EL SEGUNDO First Coastal Bank, N.A. 12/17/2004 2.270 5,000,000.00 03/18/2005 First Coastal Bank, N.A. 01/20/2005 2.420 2,000,000.00 04/21/2005 First Coastal Bank, N.A. 12/01/2004 2.460 2,000,000.00 06/01/2005 17 NAME EL SEGUNDO (continued Xerox Federal Credit Union Xerox Federal Credit Union Xerox Federal Credit Union FAIRFIELD WestAmerica Bank WestAmerica Bank WestAmerica Bank WestAmerica Bank FRESNO United Security Bank FULLERTON Fullerton Community Bank, FSB Fullerton Community Bank, FSB GOLETA Pacific Capital Bank, N.A. Pacific Capital Bank, N.A. Pacific Capital Bank, N.A. Pacific Capital Bank, N.A. 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 LA JOLLA Silvergate Bank TIME DEPOSITS DEPOSIT PAR MATURITY DATE YIELD AMOUNT {$) DATE 09/09/2004 1.940 7,000,000.00 03/14/2005 11 /17/2004 2.370 20,000,000.00 05/18/2005 12/02/2004 2.500 20,000,000.00 06/02/2005 01 /06/2005 2.380 01 /14/2005 2.400 02/15/2005 2.580 02/16/2005 2.580 60,000,000.00 04/07/2005 65,000,000.00 04/15/2005 25,000,000.00 05/18/2005 50,000,000.00 05/18/2005 10/20/2004 2.070 40,000,000.00 04/20/2005 11/17/2004 2.360 9,000,000.00 05/18/2005 01/21/2005 2.760 8,000,000.00 07/22/2005 12/08/2004 2.270 20,000,000.00 03/09/2005 10/01/2004 2.040 78,000,000.00 04/01/2005 12/08/2004 2.440 85,000,000.00 06/08/2005 02/11 /2005 2.820 72,000,000.00 08/12/2005 09/17/2004 1.930 2,000,000.00 03/18/2005 10/21/2004 2.100 3,000,000.00 04/21/2005 12/15/2004 2.280 39,000,000.00 03/17/2005 01/07/2005 2.390 60,000,000.00 04/08/2005 01/14/2005 2.410 105,000,000.00 04/15/2005 02/16/2005 2.580 90,000,000.00 05/18/2005 12/10/2004 2.320 5,000,000.00 03/11/2005 18 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE LODI Bank of Lodi, N.A. 09/22/2004 1.960 5,000,000.00 03/23/2005 Farmers & Merchants Bk Cen CA 01/13/2005 2.380 10,000,000.00 04/14/2005 Farmers & Merchants Bk Cen CA 01/13/2005 2.380 25,000,000.00 04/14/2005 Farmers & Merchants Bk Cen CA 01/06/2005 2.660 25,000,000.00 07/07/2005 LOS ANGELES Broadway Federal Bank, FSB 09/10/2004 1.940 3,000,000.00 03/11/2005 Broadway Federal Bank, FSB 01/07/2005 2.670 2,500,000.00 07/08/2005 California National Bank 02/02/2005 2.530 10,000,000.00 05/04/2005 Cathay Bank 10/07/2004 2.090 38,000,000.00 04/07/2005 Cathay Bank 11/10/2004 2.320 25,000,000.00 05/11/2005 Cathay Bank 11/18/2004 2.400 15,000,000.00 05/19/2005 Cathay Bank 12/01/2004 2.460 17,000,000.00 06/01/2005 Cathay Bank 12/09/2004 2.490 55,000,000.00 06/09/2005 Cathay Bank 02/28/2005 2.990 25,000,000.00 08/31/2005 Cedars Bank 09/22/2004 1.950 5,000,000.00 03/23/2005 Center Bank 09/15/2004 1.920 20,000,000.00 03/16/2005 Center Bank 12/22/2004 2.520 25,000,000.00 06/22/2005 Center Bank 01/20/2005 2.720 15,000,000.00 07/21/2005 CHB America Bank 09/01/2004 1.850 4,000,000.00 03/02/2005 CHB America Bank 10/14/2004 2.040 4,300,000.00 04/14/2005 CHB America Bank 02/18/2005 2.900 4,000,000.00 08/19/2005 Eastern International. Bank 11/03/2004 2.210 900,000.00 05/04/2005 Eastern International Bank 12/09/2004 2.480 1,000,000.00 06/09/2005 Far East National Bank 02/08/2005 2.550 25,000,000.00 05/11/2005 Hanmi Bank 09/02/2004 1.850 20,000,000.00 03/03/2005 Hanmi Bank 09/15/2004 1.920 20,000,000.00 03/16/2005 Hanmi Bank 01/14/2005 2.410 25,000,000.00 04/14/2005 Hanmi Bank 10/29/2004 2.140 10,000,000.00 04/29/2005 Hanmi Bank 11 /04/2004 2.210 25,000,000.00 05/05/2005 Hanmi Bank 12/02/2004 2.480 25,000,000.00 06/02/2005 Hanmi Bank 12/15/2004 2.500 25,000,000.00 06/15/2005 Hanmi Bank 01/13/2005 2.710 10,000,000.00 07/14/2005 Hanmi Bank 02/03/2005 2.830 40,000,000.00 08/04/2005 Mellon First Business Bank, N.A. 12/16/2004 2.300 50,000,000.00 03/17/2005 Mellon First Business Bank, N.A. 01 /14/2005 2.420 50,000,000.00 04/15/2005 Mirae Bank 09/23/2004 1.980 2,500,000.00 03/24/2005 Mirae Bank 10/15/2004 2.060 4,000,000.00 04/15/2005 Mirae Bank 02/22/2005 2.900 2,500,000.00 08/24/2005 Nara Bank, N.A. 09/10/2004 1.940 10,000,000.00 03/11/2005 Nara Bank, N.A. 01/13/2005 2.410 5,000,000.00 04/14/2005 Nara Bank, N.A. 01 /20/2005 2.410 10,000,000.00 04121 /2005 19 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE LOS ANGELES_(continued Nara Bank, N.A. 01 /21 /2005 2.410 15,000,000.00 04/21 /2005 Nara Bank, N.A. 02/10/2005 2.570 5,000,000.00 05/12/2005 Nara Bank, N.A. 11/18/2004 2.390 5,000,000.00 05/19/2005 Nara Bank, N.A. 11/18/2004 2.390 5,000,000.00 05/19/2005 Nara Bank, N.A. 02/02/2005 2.770 10,000,000.00 08/03/2005 Nara Bank, N.A. 02/02/2005 2.770 10,000,000.00 08/03/2005 One United Bank 01/12/2005 2.390 5,000,000.00 04/14/2005 One United Bank 12/08/2004 2.450 10,000,000.00 06/08/2005 Preferred Bank 12/17/2004 2.260 15,000,000.00 03/18/2005 Preferred Bank 09/17/2004 1.930 16,000,000.00 03/18/2005 Preferred Bank 02/04/2005 2.810 4,000,000.00 08/05/2005 Saehan Bank 02/18/2005 2.880 2,000,000.00 08/19/2005 Saehan Bank 02/18/2005 2.880 5,000,000.00 08/19/2005 State Bank of India (California) 10/06/2004 2.060 3,000,000.00 04/06/2005 State Bank of India (California) 10/28/2004 2.150 3,000,000.00 04/28/2005 State Bank of India (California) 11/18/2004 2.400 2,000,000.00 05/19/2005 Western Federal Credit Union 01/21/2005 2.450 30,000,000.00 04/22/2005 Wilshire State Bank 12/03/2004 2.270 15,000,000.00 03/02/2005 Wilshire State Bank 11 /30/2004 2.220 15,000,000.00 03/02/2005 Wilshire State Bank 12/17/2004 2.260 8,000,000.00 03/18/2005 Wilshire State Bank 01/14/2005 2.400 19,000,000.00 04/15/2005 Wilshire State Bank 12/01/2004 2.440 22,000,000.00 06/01/2005 Wilshire State Bank 02/09/2005 2.810 8,000,000.00 08/11/2005 MERCED County Bank 12/03/2004 2.280 5,000,000.00 03/04/2005 County Bank 09/09/2004 1.940 10,000,000.00 03/10/2005 County Bank 01/14/2005 2.410 10,000,000.00 04/15/2005 NEWPORT BEACH Orange County Business Bank, N.A. 09/22/2004 1.960 4,000,000.00 03/23/2005 Orange County Business Bank, N.A. 01/06/2005 2.390 4,000,000.00 04/07/2005 Orange County Business Bank, N.A. 01/27/2005 2.460 4,000,000.00 04/28/2005 NORTH HIGHLANDS SAFE Credit Union 01/14/2005 2.380 5,000,000.00 04/15/2005 SAFE Credit Union 02/11/2005 2.580 20,000,000.00 05/13/2005 20 NAME OAKDALE Oak Valley Community Bank Oak Valley Community Bank OAKLAND TIME DEPOSITS DEPOSIT DATE YIELD 12/16/2004 2.540 01 /14/2005 2.710 PAR MATURITY AMOUNT ($) DATE 3,500,000.00 06/16/2005 2,500,000.00 07/15/2005 Metropolitian Bank 09/22/2004 1.950 2,000,000.00 03/23/2005 Metropolitian Bank 12/02/2004 2.480 1,500,000.00 06/02/2005 Metropolitian Bank 01/21/2005 2.750 1,000,000.00 07/22/2005 Metropolitian Bank 01/27/2005 2.750 1,500,000.00 07/28/2005 Metropolitian Bank 02/24/2005 2.930 1,000,000.00 08/25/2005 ONTARIO Citizens Business Bank 09/03/2004 1.840 25,000,000.00 03/04/2005 Citizens Business Bank 09/22/2004 1.950 30,000,000.00 03/23/2005 Citizens Business Bank 10/01/2004 2.040 25,000,000.00 04/01/2005 Citizens Business Bank 11/05/2004 2.230 30,000,000.00 05/06/2005 Citizens Business Bank 11/18/2004 2.390 30,000,000.00 05/19/2005 PALO ALTO Greater Bay Bank, NA 09/09/2004 1.930 42,000,000.00 03/10/2005 Greater Bay Bank, NA 02/16/2005 2.580 33,500,000.00 05/18/2005 Greater Bay Bank, NA 02/18/2005 2.640 25,000,000.00 05/25/2005 Greater Bay Bank, NA 02/16/2005 2.620 30,000,000.00 06/01/2005 Greater Bay Bank, NA 02/18/2005 2.680 24,000,000.00 06/08/2005 Greater Bay Bank, NA 02/16/2005 2.660 30,000,000.00 06/14/2005 Greater Bay Bank, NA 01 /12/2005 2.690 15,000,000.00 07/13/2005 PALOS VERDES ESTATES Malaga Bank, SSB 09/03/2004 1.840 4,000,000.00 03/04/2005 Malaga Bank, SSB 10/07/2004 2.080 5,000,000.00 04/07/2005 Malaga Bank, SSB 11/10/2004 2.350 7,000,000.00 05/11/2005 Malaga Bank, SSB 12/15/2004 2.500 9,000,000.00 06/15/2005 Malaga Bank, SSB 02/18/2005 2.900 10,000,000.00 08/19/2005 PASADENA Community Bank 09/15/2004 1.920 10,000,000.00 03/16/2005 Community Bank 10/07/2004 2.080 10,000,000.00 04/07/2005 Community Bank 10/13/2004 2.050 15,000,000.00 04/13/2005 Community Bank 11/04/2004 2.230 15,000,000.00 05/05/2005 21 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE PASADENA (continued) Community Bank 12/15/2004 2.500 10,000,000.00 06/15/2005 Community Bank 01/07/2005 2.670 10,000,000.00 07/08/2005 Community Bank 02/02/2005 2.770 25,000,000.00 08/03/2005 Wescom Credit Union 12/22/2004 2.270 50,000,000.00 03/23/2005 Wescom Credit Union 01/10/2005 2.370 15,000,000.00 04/13/2005 Wescom Credit Union 01/12/2005 2.400 25,000,000.00 04/13/2005 Wescom Credit Union 01/27/2005 2.470 25,000,000.00 04/28/2005 Wescom Credit Union 11 /18/2004 2.420 35,000,000.00 05/19/2005 PLACERVILLE El Dorado Savings Bank 04/30/2004 1.560 5,000,000.00 04/29/2005 El Dorado Savings Bank 06/04/2004 1.920 20,000,000.00 06/03/2005 PLEASANTON Valley Community Bank 09/17/2004 1.940 6,000,000.00 03/18/2005 POMONA PFF Bank and Trust 11 /04/2004 2.230 20,000,000.00 05/05/2005 PFF Bank and Trust 12/08/2004 2.440 20,000,000.00 06/08/2005 PFF Bank and Trust 02/25/2005 2.970 20,000,000.00 08/26/2005 PORTERVILLE Bank of the Sierra 10/21/2004 2.100 10,000,000.00 04/21/2005 RANCHO SANTA FE La Jolla Bank, FSB 09/02/2004 1.830 10,000,000.00 03/03/2005 La Jolla Bank, FSB 12/16/2004 2.270 10,000,000.00 03/17/2005 La Jolla Bank, FSB 09/23/2004 1.960 5,000,000.00 03/24/2005 La Jolla Bank, FSB 02/02/2005 2.500 25,000,000.00 05/04/2005 La Jolla Bank, FSB 02/11/2005 2.560 15,000,000.00 05/13/2005 La Jolla Bank, FSB 02/16/2005 2.560 25,000,000.00 05/18/2005 La Jolla Bank, FSB 12/02/2004 2.460 10,000,000.00 06/02/2005 REDWOOD CITY Provident Central Credit Union 10/28/2004 2.120 20,000,000.00 04/28/2005 Provident Central Credit Union 12/02/2004 2.460 20,000,000.00 06/02/2005 22 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT {$) DATE ROCKLIN Five Star Bank 09/29/2004 2.010 2,000,000.00 03/30/2005 Five Star Bank 02/11/2005 2.560 3,000,000.00 05/13/2005 Five Star Bank 12/16/2004 2.520 3,000,000.00 06/16/2005 Five Star Bank 01/26/2005 2.690 2,000,000.00 07/27/2005 The Mechanics Bank 03/03/2004 1.260 10,000,000.00 03/03/2005 The Mechanics Bank 04/01/2004 1.260 10,000,000.00 04/01/2005 The Mechanics Bank 04/21/2004 1.450 10,000,000.00 04/21/2005 The Mechanics Bank 06/09/2004 1.960 10,000,000.00 06/09/2005 The Mechanics Bank 07/08/2004 2.070 10,000,000.00 07/08/2005 The Mechanics Bank 01/26/2005 2.710 20,000,000.00 07/27/2005 The Mechanics Bank 08/04/2004 2.180 10,000,000.00 08/04/2005 The Mechanics Bank 09/10/2004 2.180 10,000,000.00 09/14/2005 The Mechanics Bank 10/15/2004 2.250 10,000,000.00 10/14/2005 The Mechanics Bank 10/29/2004 2.320 10,000,000.00 10/28/2005 The Mechanics Bank 11/05/2004 2.380 10,000,000.00 11/04/2005 RIVERSIDE Provident Savings Bank 09/23/2004 1.980 25,000,000.00 03/24/2005 Provident Savings Bank 10/07/2004 2.080 25,000,000.00 04/07/2005 Provident Savings Bank 02/02/2005 2.780 25,000,000.00 08/03/2005 SACRAMENTO American River Bank 12/16/2004 2.270 1,000,000.00 03/17/2005 American River Bank 09/17/2004 1.910 1,250,000.00 03/18/2005 American River Bank 09/23/2004 1.960 2,000,000.00 03/24/2005 American River Bank 10/06/2004 2.030 1,500,000.00 04/06/2005 American River Bank 12/16/2004 2.520 1,250,000.00 06/16/2005 American River Bank 01/07/2005 2.650 1,000,000.00 07/08/2005 American River Bank 01/27/2005 2.730 1,500,000.00 07/28/2005 American River Bank 02/25/2005 2.950 2,000,000.00 08/26/2005 Bank of Sacramento 12/17/2004 2.260 2,000,000.00 03/18/2005 Bank of Sacramento 02/09/2005 2.540 1,500,000.00 05/11/2005 Bank of Sacramento 12/01/2004 2.450 2,000,000,00 06/01/2005 Merchants National Bank of Sacramento 10/13/2004 2.050 2,000,000.00 04/13/2005 Merchants National Bank of Sacramento 01/20/2005 2.730 2,000,000.00 07/21/2005 River City Bank 10/06/2004 2.060 2,000,000.00 04/06/2005 River City Bank 02/24/2005 2.670 2,000,000.00 05/26/2005 River City Bank 01/28/2005 2.770 3,000,000.00 07/29/2005 23 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT {$) DATE SACRAMENTO (continued U.S. Bank, N.A. 01/06/2005 2.450 100,000,000.00 04/07/2005 U.S. Bank, N.A. 01/18/2005 2.500 25,000,000.00 05/04/2005 U.S. Bank, N.A. 02/02/2005 2.540 50,000,000.00 05/04/2005 U.S. Bank, N.A. 02/09/2005 2.560 50,000,000.00 05/12/2005 U.S. Bank, N.A. 02/18/2005 2.660 50,000,000.00 05/20/2005 U.S. Bank, N.A. 02/25/2005 2.720 25,000,000.00 05/27/2005 U.S. Bank, N.A. 02/09/2005 2.810 50,000,000.00 08/11/2005 U.S. Bank, N.A. 02/18/2005 2.900 50,000,000.00 08/19/2005 Union Bank of California, N.A. 12/16/2004 2.540 150,000,000.00 06/16/2005 Union Bank of California, N.A. 01/14/2005 2.700 175,000,000.00 07/15/2005 Union Bank of California, N.A. 02/03/2005 2.830 150,000,000.00 08/04/2005 SAN DIEGO First Future Credit Union 09/03/2004 1.840 15,000,000.00 03/04/2005 First Future Credit Union 09/15/2004 1.920 8,000,000.00 03/16/2005 First Future Credit Union 02/25/2005 2.660 15,000,000.00 05/27/2005 First United Bank 10/14/2004 2.040 2,000,000.00 04/14/2005 First United Bank 02/11/2005 2.820 1,000,000.00 08/12/2005 Mission Federal Credit Union 09/01/2004 1.850 10,000,000.00 03/02/2005 Mission Federal Credit Union 01/13/2005 2.720 10,000,000.00 07/14/2005 Neighborhood National Bank 01/21/2005 2.760 2,000,000.00 07/22/2005 Neighborhood National Bank 02/02/2005 2.780 2,000,000.00 08/03/2005 SAN FRANCISCO America California Bank 01/07/2005 2.380 2,000,000.00 04/07/2005 America California Bank 01/06/2005 2.380 4,000,000.00 04/07/2005 America California Bank 12/03/2004 2.460 2,000,000.00 06/03/2005 Citibank (West), FSB 01/06/2005 2.380 150,000,000.00 04/07/2005 Citibank (West), FSB 01/13/2005 2.410 100,000,000.00 04/14/2005 Citibank (West), FSB 01/20/2005 2.410 100,000,000,00 04/21/2005 Citibank (West), FSB 01/26/2005 2.390 50,000,000.00 04/27/2005 Oceanic Bank 09/10/2004 2.160 4,000,000.00 09/13/2005 Trans Pacific National Bank 09/23/2004 1.980 1,000,000.00 03/24/2005 Trans Pacific National Bank 10/13/2004 2.050 1,000,000.00 04/13/2005 Trans Pacific National Bank 12/22/2004 2.530 1,000,000.00 06/22/2005 Trans Pacific National Bank 02/03/2005 2.840 1,000,000.00 08/04/2005 United Commercial Bank 12/10/2004 2.290 25,000,000.00 03/11/2005 United Commercial Bank 12/17/2004 2.260 65,000,000.00 03/18/2005 United Commercial Bank 01/13/2005 2.410 40,000,000.00 04/14/2005 United Commercial Bank 01/14/2005 2.410 50,000,000.00 04/14/2005 United Commercial Bank 10/27/2004 2.110 40,000,000.00 04/27/2005 24 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE SAN FRANCISCO (continued United Commercial Bank 02/23/2005 2.660 20,000,000.00 05/25/2005 United Commercial Bank 12/01/2004 2.450 50,000,000.00 06/01/2005 United Commercial Bank 12/03/2004 2.460 25,000,000.00 06/03/2005 United Commercial Bank 01/13/2005 2.710 55,000,000.00 07/14/2005 SAN JOSE Comerica Bank 01/07/2005 2.390 50,000,000.00 04/08/2005 Comerica Bank 01 /26/2005 2.390 25,000,000.00 04/27/2005 Heritage Bank of Commerce 02/09/2005 2.820 4,000,000.00 08/10/2005 Meriwest Credit Union 09/15/2004 1.900 5,000,000.00 03/16/2005 Meriwest Credit Union 10/13/2004 2.050 10,000,000.00 04/13/2005 Meriwest Credit Union 01/20/2005 2.740 5,000,000.00 07/21/2005 Santa Clara Co. Federal Credit Union 11/05/2004 2.250 7,500,000.00 05/06/2005 Santa Clara Co. Federal Credit Union 02/04/2005 2.830 7,500,000.00 08/05/2005 Santa Clara Co. Federal Credit Union 02/18/2005 2.920 5,000,000.00 08/19/2005 SAN LUIS OBISPO First Bank Of San Luis Obispo 09/15/2004 1.930 7,000,000.00 03/16/2005 First Bank Of San Luis Obispo 09/24/2004 1.970 5,000,000.00 03/25/2005 First Bank Of San Luis Obispo 12/03/2004 2.460 4,500,000.00 06/03/2005 First Bank Of San Luis Obispo 01 /06/2005 2.660 2,000,000.00 07/07/2005 First Bank Of San Luis Obispo 02/09/2005 2.810 6,000,000.00 08/10/2005 Mission Community Bank 09/02/2004 1.850 1,000,000.00 03/03/2005 Mission Community Bank 10/06/2004 2.050 2,500,000.00 04/06/2005 Mission Community Bank 10/27/2004 2.110 2,500,000.00 04/27/2005 Mission Community Bank 12/09/2004 2.480 1,000,000.00 06/09/2005 San Luis Trust Bank 10/20/2004 2.000 1,700,000.00 04/20/2005 SAN MARINO East West Bank 12/10/2004 2.290 85,000,000.00 03/11/2005 East West Bank 12/10/2004 2.350 42,000,000.00 04/13/2005 East West Bank 02/04/2005 2.570 35,000,000.00 05/06/2005 East West Bank 01 /07/2005 2.670 50,000,000.00 07/08/2005 East West Bank 02/17/2005 2.890 38,000,000.00 08/18/2005 East West Bank 02/23/2005 2.930 25,000,000.00 08/24/2005 SANTA ROSA National Bank of the Redwoods 01/20/2005 2.390 10,000,000.00 04/21/2005 National Bank of the Redwoods 10/28/2004 2.140 5,000,000.00 04/28/2005 25 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE SANTA ROSA (continued) National Bank of the Redwoods 02/09/2005 2.520 5,000,000.00 05/11/2005 SONORA Central California Bank 09/24/2004 1.970 5,000,000.00 03/25/2005 STOCKTON Pacific State Bank 10/06/2004 2.030 1,000,000.00 04/06/2005 Pacific State Bank 01 /06/2005 2.640 1,000,000.00 07/07/2005 Union Safe Deposit Bank 12/02/2004 2.290 15,000,000.00 03/03/2005 Union Safe Deposit Bank 12/10/2004 2.300 10,000,000.00 03/11/2005 Washington Mutual Bank, FA 12/15/2004 2.510 45,000,000.00 06/15/2005 Washington Mutual Bank, FA 01/20/2005 2.740 75,000,000.00 07/21/2005 Washington Mutual Bank, FA 02/18/2005 2.910 60,000,000.00 08/19/2005 TORRANCE China Trust Bank (USA) 12/10/2004 2.290 35,000,000.00 03/11/2005 China Trust Bank (USA) 01/14/2005 2.410 40,000,000.00 04/15/2005 China Trust Bank (USA) 10/22/2004 2.090 30,000,000.00 04/22/2005 China Trust Bank (USA) 02/11/2005 2.580 20,000,000.00 05/13/2005 TRACY Service 1st Bank 12/16/2004 2.550 2,000,000.00 06/16/2005 VACAVILLE Travis Credit Union 12/01/2004 2.430 40,000,000.00 06/01/2005 WALNUT CREEK Bank of the West 12/16/2004 2.290 82,000,000.00 03/17/2005 Bank of the West 01/28/2005 2.470 176,500,000.00 04/29/2005 Bank of the West 02/18/2005 2.630 242,000,000.00 05/20/2005 Bank of the West 01/14/2005 2.710 134,000,000.00 07/15/2005 26 NAME WHITTIER Banco Popular Quaker City Bank Quaker City Bank TIME DEPOSITS DEPOSIT DATE YIELD 02/14/2005 2.840 01 /12/2005 2.390 01 /28/2005 2.770 TOTAL TIME DEPOSITS FEBRUARY 2005 27 PAR MATURITY AMOUNT ($) DATE 25,000,000.00 08/17/2005 24,000,000.00 04/14/2005 16,000,000.00 07/29/2005 6,620,495,000.00 BANK DEMAND DEPOSITS February 2005 ($ in thousands) DAILY BALANCES DAY OF BALANCES WARRANTS MONTH PER BANKS OUTSTANDING 1 $ 638,962 $ 3,778,754 2 587,622 3,126,508 3 1,089,558 3,138,432 4 895,207 2,698,244 5 895,207 2,698,244 6 896,207 2,698,244 7 1,104,142 2,589,475 8 521,168 2,355,389 9 534,784 2,316,043 10 532,294 2,386,805 11 283,644 2,231,454 12 283,644 2,231,454 13 283,644 2,231,454 14 441,126 2,047,989 15 692,427 2,199,305 16 650,234 2,117,058 17 427,276 2,471,301 18 574,310 2,441,430 19 574,310 2,441,430 20 574,310 2,441,430 21 574,310 2,441,430 22 673,375 2,317,444 23 482,866 2,063,726 24 705,211 2,015,698 25 888,864 2,349,920 26 888,864 2,349,920 27 888,864 2,349,920 28 1,398,820 2,830,350 al AVERAGE DOLLAR DAYS $ 674,291 a/ The prescribed bank balance for February was $680,781. This consisted of $574,989 in compensating balances for services, balances for uncollected funds of $125,990 and a deduction of $20,198 for February delayed deposit credit. 28 DESIGNATION BY POOLED MONEY INVESTMENT BOARD OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS No. 1668 In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its meeting on February 16, 2005, has determined and designated the amount of money available for deposit and investment under said sections. In accordance with sections 16480.1 and 16480.2 of the Govemment Code, it is the intent that the money available for deposit or investment be deposited in bank accounts and savings and loan associations or invested in securities in such a manner so as to realize the maximum return consistent with safe and prudent treasury management, and the Board does hereby designate the amount of money available for deposit in bank accounts, savings and loan associ- actions, and for investment in securities and the type of such deposits and investments as follows: 1. In accordance with law, for deposit in demand bank accounts as Compensating Balance for Services $ 574,989,000 The active noninterest-bearing bank accounts designation constitutes a calendar month average balance. For purposes of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above amount provided that the balances computed by dividing the sum of daily balances of that calendar month by the number of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management. 2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest - bearing deposits in banks and savings and loan associations as follows: From To Transactions { 1) 02/14/05 02/18/05 $ 3,041,000,000 (2) 02/21/05 02/25/05 $ 2,533,400,000 (3) 02/28/05 03/04/05 $ 9,194,000,000 (4) 03/07/05 03/11/05 $ 2,008,000,000 (5) 03/14/05 03/18/05 $ 2,901,800,000 (6) 03/21 /05 03/25/05 $ 3,221,100,000 (7) 03/28/05 04/01/05 $ 7,916,600,000 (8) 04/04/05 04/08/05 $ 2,852,800,000 (9) 04/11/05 04/15/05 $ 2,437,000,000 (10) 04/18/05 04/22/05 $ 2,024,200,000 Time Deposits in Various Financial Institutions In Securities (sections 16503a Estimated (section 16430)* and 16602)* Total $ 51,060,005,000 $ 6,522,995,000 $ 57,583,000,000 $ 53,593,405,000 $ 6,522,995,000 $ 60,116,400,000 $ 62,787,405,000 $ 6,522,995,000 $ 69,310,400,000 $ 64,795,405,000 $ 6,522,995,000 $ 71,318,400,000 $ 67,697,205,000 $ 6,522,995,000 $ 74,220,200,000 $ 70,918,305,000 $ 6,522,995,000 $ 77,441,300,000 $ 78,834,905,000 $ 6,522,995,000 $ 85,357,900,000 $ 81,687,705,000 $ 6,522,995,000 $ 88,210,700,000 $ 84,124,705,000 $ 6,522,995,000 $ 90,647,700,000 $ 86,148,905,000 $ 6,522,995,000 $ 92,671,900,000 From any of the amounts specifically designated above, not more than 30 percent in the aggregate may be invested in prime commercial paper under section 16430(e), Government Code. Additional amounts available in treasury trust account and in the Treasury from time to time, in excess of the amounts and for the same types of investments as specifically designated above. Provided, that the availability of the amounts shown under paragraph 2 is subject to reduction in the amount by which the bank accounts under paragraph 1 would otherwise be reduced below the calendar month average balance of $ 574,989,000, Dated: February 16, 2005 * Government Code POOLED MONEY INVESTMENT BOARD: Signatures on file at STO and SCO Chairperson Member Member BOARD MEMBER ITEMS