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2005 07 13 IABP.O. Box 1504 LA QUINTA, CALIFORNIA 92247-1504 78-495 CALLE TAMPICO (760) 7 7 7 - 7 0 0 0 LA QUINTA, CALIFORNIA 92253 FAX (760) 777-7101 AGENDA INVESTMENT ADVISORY BOARD Study Session Room 78-495 Calle Tampico- La O.uinta, CA 92253 July 13, 2005 - 5:30 P.M. I CALL TO ORDER a. Pledge of Allegiance b. Roll Call II APPOINTMENT OF OFFICERS A. Appointment of Investment Advisory Board Chairperson B. Appointment of Investment Advisory Board Vice -Chairperson III PUBLIC COMMENT - (This is the time set aside for public comment on any matter not scheduled on the agenda.) IV CONFIRMATION OF AGENDA V CONSENT CALENDAR A. Approval of Minutes of Meeting on May 11, 2005 for the Investment Advisory Board. VI BUSINESS SESSION A. Transmittal of Treasury Report for April and May 2005 B. FY 2005/2006 Meeting Schedule C. Consideration of Approval of Investment Advisory Board 2005/2006 Work Plan D. LAIF Conference VII CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - June 2005 B. Pooled Money Investment Board Reports - April 2005 C. Distribution of Investment Policies for Fiscal Year 2005/2006. Vill BOARD MEMBER ITEMS IX ADJOURNMENT INVESTMENT ADVISORY BOARD Business Session: A Meeting Date: July 13, 2005 ITEM TITLE: Transmittal of Treasury Report For April and May 31, 2005 BACKGROUND: Attached please find the Treasury Report for April and May 31, 2005. RECOMMENDATION: Review, Receive and File the Treasury Report for April and May 31, 2005. John M. Falconer', Finance Director (&4 4 64� Quiaraj MEMORANDUM TO: La Quinta City Council FROM: John M. Falconer, Finance Director/Treasurer SUBJECT: Treasurer's Report for April 30,2005 DATE: May 31, 2005 Attached is the Treasurer's Report for the month ending April 30, 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 Beginning Purchased Notes Sold/Matured Other Ending Chan e Cash (3) $ (391,648) (1) $ (3,417,414) ($3,809,062) ($3,417,414) LAIF 24,756,755 2,206,693 (1,500,000) 25,463,448 706,693 US Treasuries (2) 120,158,854 (2) - 191,260 120,350,114 191,260 US Gov't Agencies (2) 23,664,612 (2) (18,363) 23,646,249 (18,363) Commercial Paper (2) - 0 0 Corporate Notes Mutual Funds - 6,092,339 171,189 1 - 0 5,921,150 0 171,189 Total $ 174,280,912 $ 2,035,504 $ 4,917,414 $ 172,897 1 $ 171,571,899 $ 2,709,013 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. 2-0 Datfa 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. 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CD n >>NMn M CO >> NN n Z 0 cl m Z N N N N N N N N N m N M yy M QON m M f0 Q NCDM m n n V1 O O a01 nM ¢ a, m co) Nm LDv a ON O Q N n n �� Q n m n N O-11 p N Mn M p O O 00 Q ID CO(D C^ V: Nr N a M A N n� i N N N mnnN M00 M ' ' nN Q ' m M of [O W cD aD mQ w CD lD CD n o n M m c�(nm QQ `mnapQ n ¢ M O (D O v M (l M �D Of � 1O of (6,6 M cp MO EmONm NIm •- 00 In n « R CI OI Oc m N (O Q Qa CO M N 0 O M 1lffll m N N n m w N a` m U) N N N N (nD Cl) n OOOOO N Q MAD ` m a moon f- mo Q(1io w JM OD O)M w(D Jco co O O m O r N n Q m N I O Cl) Q Q N N Q "m t- P n m O) N N N M N cD N a0a0 (o m t0 Q m Q M O m M N M Q Q O1 Q m mr OM�p mM n OO CD co co O) � M M O Q N tD O M O c �N M. 0)Q �`�Qnr c '-'� N N m M N N N m m m m N N 'D C Y3 m C m � N m ° c c > j J C .p m 7 m m m C LL LL J c V LL a F °b m c ?mi�y °Eo -,z LL (�n $ E° LL a u ro ucc _ c�Z mtcm .mS»~ZT-(itCm •a m .9 J c LL m m U n-m m0 F.o 00 ID c m E> E ¢ E Ec7 c oo E pEm c_ maE.o >Eu. ¢LL o - mm_C co .67Eci _oaW�m 9 F�3 mGia 0tm°m cm'c �>•cmv? �LI€o m m JE 4) t: .S m 2 a0S 0 J (LL Uw»aU(nmacmam�- 2' io¢(nU¢wSaJ(nUD-c II City of La Quints Reconciliation of Actual and Surplus Funds City, Redevelopment Agency and Financing Authority April 30, 2005 Balance of Actual Funds 171,571,899 Less Petty cash Funds (1 •�) Less Non -Surplus Funds (4,872,059) Balance of Surplus Funds $166.898,840 City Cash & Investments Bank Accounts Name - Availability Su lus TV Book Wells Fargo - Demand No Checking $ (3,837,314) Petty Cash - Demand No N/A 1.000 Wells Fa olHousi - Demand Yes Checking 27.252 Total - Bank Accounts $ 3,809,062 U. S. Treasury Amortized Custodian - Availabili Surplus Issuerrrype Value Bank of New York - Demand Yes U.S. Treasury Note 4,997.933 Bank of New York - Demand Yes U.S. Treasury Note 4.992,057 Bank of New York - Demand Yes U.S. Treasury Note 5,003,084 Bank of New York - Demand Yes U.S. Treasury Note 3,992,483 Bank of New York - Demand Yes U.S. Treasury Note 5,005,597 Bank of New York - Demand Yes U.S. Treasury Note 4,992,731 Bank of New York - Demand Yes U.S. Treasury Note 3,981.903 Bank of New York - Demand Yes I U.S. Treasury Note 5,001 907 Total- U.S. Treasury 37,967,695 U.S. Government Securities Custodian - Availabili Surplus issuerfType Amortized Value Bank of New York - Demand Yes FNMA 5,091,588 Bank of New York - Demand Yes FHLB 1,995,120 Bank of New York - Demand Yes FHLB 1,995,576 Bank of New York - Demand Yes FHLB 2,546,819 Bank of New York - Demand Yes FNMA -Discount 1,959,607 Bank of New York - Demand Yes FreddieMac 7,610,358 Bank of New York - Demand Yes FreddieMac - Discount 2 447 101 Total - U.S. Government Securities i i 1 23,648,249 Local Agency Investment Fund Name - Availabili Surplus Type Boo]'74 LAIF- City -Demand Yes State Pool 21,850 LAIF - RDA - Demand Yes State Pool 3 612Total- State Pool 25,463 Total City Investments Total City Cash & Investments Fiscal Agent Investments Surplus Surplus Yes Ad Yes 27.252 27,252 $ 27.252 $ - $ 27.252 Surplus Ad' Yes r4997,933 4,997,933 4,992,057 5,003,084 3,992,483 ,, 5,005,597 4,992,731 4,992,731 3,981,903 3,961,903 001 907 51001,907 45 %,7,895 37,967,695 Surplus surplus No AdJ No $(3,837,314) $ 8,709,373 $ 4,872.059 1,000 1,000 3,836,3114 $ 8,709,373 $ 4,873,059 All Funds Surplus Actual % Yes -2.2201% 0.0163% All Funds Surplus Actual % Yes 22,1293% 22.7762% Surplus Surplus Surplus Surplus All Funds Surplus Yes Ad' Yes No Ad' No Actual % Yes 5,091,588 5,091,588 1,995.120 1,995,120 1.995,576 1,995,576 2,546,819 2,546,819 - 1,959,607 1,959.607 7,610,358 7,610,358 2 447,181 2,447 181 - - 23,846,249 23,646,249 13.7821% 14.1850% Surplus Ad' Yes E (8,709,373) 13,141,101 3,612974 8,709.373 16.754.075 Surplus Surplus No Ad' No All Funds Surplus Actual % Yes 141S413% 10.0505% 87,077,392 87,077,392 8,709,373 78,368,019 1 50.7527%1 47.0117% 83,268,330 87,104,644 8,709,373 78,395,271 3,836,314 8,709,373 4,873,059 48.5328X 47.0281% Portfolio - City Investments Custodian - Availability Surplus Issuer/Type, Amortized Value 2002 RDA U.S. Bank-CIP Yes U.S.Treasury Bill 27,664,637 2D04 Finance Authority -CIP 2004 Finance Authority -CIP Yes Yes U.S.Treasury Bill U.S.Treasury Bill 9,878,225 44.839,557 Yes Total - U.S. Treasury 82,382,419 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 31 1994 RDA U.S. Bank -Debt Svc YES 1st American 1995 RDA U.S.Bank -CIP YES 1stAmerican 1995 RDA U.S.Bank - Special Fund YES 1st American 2004 Fin Auth - 1995 US Bank - Escrow YES 1 st American 101 1998 RDA U.S.Bank - CIP YES 1st American 1998 RDA U.S.Bank- Dbt Svc YES 1st American 1998 RDA U.S.Bank- Specal Fund YES 1st American 1998 RDA U.S.Bank - CIP YES 1st American 2001 RDA U.S. Bank - Dbt Svc YES 1 st American 2001 RDA U.S. Bank - CIP YES 1stAmerican 2002 RDA U.S. Bank - Dbt Svc YES 1st American 2002 RDA U.S. Bank - CIP YES 1st American 2,083.068 2003 Taxable RDA U.S. Bank - DS YES 1st American 2003 Taxable RDA U. S. Bank -COI YES 1 st American 2003 Taxable RDA U. S. Bank-CIP YES 1stAmerican 2004 Fin Auth US Bank • CIP YES 1st American 3.832,873 2004 Fin Auth US Bank - C01 YES 1st American 5,077 Subtotal - Mutual Fund 5,921,150 Surplus Surplus Yes Yes —Adj 27,664,637 27,664,637 9,878,225 9.878.225 44,839,557 44,839,557 82,382,419 82,382,419 Surplus Yes Ad' Surplus Yes 31 31 101 101 2.083,068 2,083,068 3,832,873 3,832,873 5,077 5,077 5,921,150 5,921,150 Surplus Surplus No Adi No - Surplus No Ad Surplus No All Funds Surplus Actual % Yes 48.0163% 49.4199% All Funds Surplus Actual % Yes 3.4511% 3.5520% Total Fiscal Agent Investments 88,303,5891 88,303,569 88,303,569 1 51.4674% 1 52.9719% Grand Total 171,571,899 175,408,213 8,709,373 186,898,840 3,836,314 8,709,373 4,873,059 100.000OX 100.0000% m 76 7 U CmJ o 0 0 J LL O N O L TN N � O U U m v x U a 0 N U LL a E C d l0 Q O � V N 0) fn N N N LL N 9O Z C C W V COO N N 0 0) t O�ap O Ul0 CO CO O c�D co CO 0) N CO O T O Nncn V r N C R N cor v rn N N N N N Q oro vo 000 TO Torr corn r)o MO co CO rn Cn O O V r CO T O a q C M O {-CO coCo IT00 00 w CD rcDr -It 0) Tc0 O q N rn CD N 0 0 M M s tO C O N O co In N N V' N N N Cl) co m cx N Q 7 Q � C N C6 U N U � Q Q OrO a0 OOO a) CD TOrr corn rCO MO 00N m CO vncq y0rpp �nrnov_ ooat M N 0) 0 N 00 OS N 0 N m j L U M O Ln I O 0 0 N N m w M Q Q U y 0 Z .-. 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O)nn�WCD L o 0 0 0 U� Cp c0 )` c0 C monr���rn 0000 0 mrnrnao��n LL 0 1 A n N O e c c 0 0 N C O C.- CD cD� -mjN c ' (V o 0 ,- m O O n N O C g N M CV 0 0 0 0 0 p N O N O 00 O Z M O O N Cl N N N 0 0 0 o 0 Q V O O U N V N N N o 0 0 0 (OOONMO C C' 0a N-CD�CO m o 0 0 0 0 �u�nn'It nrn >aNOCO�N QCV 0o000 0 (00�17M� v,00n � m N m m E E c c m L C m m 0 U Q y 'a m m i0 > m o N — is aLL¢af O O O — T Ca rnrnrnZ.'t6o� C C C EEEy m m m wwwrm N N N L m m m C 6 7 O mLL 7 � LL C C C m — C C C x > Q ¢ Q Q f n Q J N M C C N C) C C E E E E L C m L C m m o E m 0)E �Qm �Q.a) m m O O m m > O O m aaji¢a aLLQ� 0 0 6— j, m0 0 0 0— 0 0m fA 01 O) j� C C C] 01 O1 0) Z+ U C C C C E E m.`E mmmm E E E WL mmmiO www f -� m w w w �' m H m m m L m m m m L m N N N C m N N N O LL O w LL_ C C C25 > Q C C C x > Q Q QQ(n QJ Q¢¢CnQJ 10 c . C E a 6 'c `m W U 'g L tC @ C c Q ■ c N E � w L.L Qpp U N :LL O C LFJ C LL j�gll TT LO O c) N N AW O L � m m (1) N 0 Q Z. O O N d 4 .6 lz °\ c O O O O O 0 O LO U') O LO O Z M N N 4UaOUed r- O O i i r I I i I I I I 1 �1 1 .1 ,1 ■ 1 1 I 1 1 I■ T4ht 4 4 Qu&& MEMORANDUM TO: La Quinta City Council FROM: John M. Falconer, Finance Director/Treasurer SUBJECT: Treasurer's Report for May 31,2005 DATE: June 30, 2005 Attached is the Treasurer's Report for the month ending May 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: nvestment $1,073,658 $4,882,720 $ (3,809,062) $ 4.882,720 (1) 4 700,000) 38,963,448 (' 13,500,000 (4,802,365; Cash (3) LAIF 25,463,448 18,200,000 (2) (5,000,000) 197,635 115,547,749 28,543,877 4,897,628 US Treasuries (2) 120,350,114 23,646,249 5,000,000 (2) (102,372) 0 0 US Gov't Agencies (2) 0 0 Commercial Paper (2) _ 5,931,380 10,230 Corporate Notes 5.921.150 10,230 1 nnn� ¢ s5.263 $ 190,060,112 $ 18,488,213 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. fy that sufficient investment dity and As T are avah able to meet the poolseIexpendi expenditure requirements for the next lsix 'months. The anticipated of revenues 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. zvo� Date M. Falconer ce Director/Treasurer Footnote nts the net increase (decrease) of deposits and withdrawals from (1) The amount reported represe the previous month. hr column month hon US Treasury, CommerciaePaper and Agency t investmes the nts. of premium/discount for the s. negative balance. This negative balance will be offset with transfers from other investments (3) The cash account may reflect a before warrants are presented for payment by the payee at the bank. 12 E E X m L O N d N E ; C z O U LL w w 0 0 Z Q z Z W U) ui w z 0 O 2 H 7 Q c C C C C 0)Z U Z Z Z p Z O Z O Z Z Z W c O E n o O 8 N v v LL you W d c 0 a 112, o y U d � Co M c c p y W v U OLL 'D � U T o ` QwaNi N CD d c U . U) Q m 0 f0 y � l0 CO 3. 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O LL p C cm 4) 'm0 C V C y a N U U r1 U m fy m A L �« O LL ly n C c Cl U C •- N C d m t N d m N V N o ° c vcv ELLmva`''iU�Hm^DO� c c�—�>c.� E E Qa)m Q �0 c Dyi �EEZc O C O a N o J LL J d J 0 C o a t U LL O Cl •_ E m2 °I J LL a) W >- y d E d J >oU j d X T nM� «LL 00 d'O Q� 0 OQ. m w �� d G .0 dNa m �LL �a d I-(7 0 d 1O� M SY) N d O Ci€ m��a a ( Np c y > c m m n N J O I C> y J N 9 ByOOa Cl G 3 7 C C a J Qmy t d t d m d C1 " y N E mS9L Z }9 Zl o m J mCid,IA mm-2y i�(7(�050¢cnSUawsn �rn� d mdoy U�J iIn o o t cD coJo H0 D:3(LU2H 17 City of La Ouinta Reconciliation of Actual and Surplus Funds City, Redevelopment Agency and Financing Authority May 31, 2005 Balance of Actual Funds 190,060,112 Less Petty cash Funds (I,000) Less Non -Surplus Funds (1,233,024) Balance of Surplus Funds $188,826,088 City Cash & Investments Bank Accounts Name - Availabili Surplus Type Book Wells Fargo - Demand No Checking $ 1.045,406 Petty Cash - Demand No N/A 1,000 Wells Fargo/Housing - Demand Yes Checkina 27,252 Total - Bank Accounts $ 110731658 U. S. Treasury Amortized Custodian - Availabili Surplus issuer/Type Value Bank of New York - Demand Yes U.S. Treasury Note 4,996,093 Bank of New York - Demand Yes U.S. Treasury Note 5,D02,459 Bank of New York - Demand Yes U.S. Treasury Note 3,993,749 Bank of New York - Demand Yes U.S. Treasury Note 5,004,654 Bank of New York - Demand Yes U.S. Treasury Note 4,993.784 Bank of New York - Demand Yes U.S. Treasury Note 3,984,193 Bank of New York - Demand Yes U.S. Treasury Note 5,001,758 Total- U.S. Treasu 32,976,690 U.S. Government Securities Custodian - Availability Surplus Issuer/Type Amortized Value Bank of New York - Demand Yes FNMA 5,081,832 Bank of New York - Demand Yes FHLB 1,995.780 Bank of New York - Demand Yes FHLB 1,996,175 Bank of New York - Demand Yes FHLB 2,539,525 Bank of New York - Demand Yes FNMA -Discount 1,964,657 Bank of New York - Demand Yes FHLB 7.597,200 Bank of New York - Demand Yes FreddieMac - Discount 2,452,10.5 Total - U.S. Government Securities I I23,627,274 Local Agency Investment Fund Name - Availability Surplus Ty Book LAIF - City -Demand Yes State Pool 35.350,474 LAIF - RDA - Demand Yes State Pool 3,612,974 Total - State Pool 38,963.448 Total City Investments Total City Cash & Investments Fiscal Agent Investments Surplus Surplus Yes Ad' Yes 27,252 27,252 $ 27,252 $ - $ 27,252 Surplus Surplus Yes Ad' Yes 4.996,093 4,996,093 5,002,459 5,002,459 3.993,749 3,993,749 5.004,654 5,004.654 4,993,784 4,993,784 3,984,193 3,984.193 5,001,758 5,001,758 32,976,690 32,976,690 Surplus Surplus No Ad' No $ 1,045.406 $ 187,618 $ 1,233,024 1,000 1,000 $ 1,046,406 $ 187,618 $ 1,234,024 All Funds Surplus Actual % Yes 0.5799% 0.0148% All Funds Surplus Actual % Yes 17.8114% 17.9309% Surplus Surplus Surplus Surplus All Funds Surplus Yes Ad' Yes No Ad' No Actual % Yes 5,081,832 5,081,832 1,995,780 1,995,780 - 1,996,175 1,996,175 - 2,539,525 2,539,525 - 1,964,657 1,964,657 - 7,597,200 7,597,200 - 2,452,105 2.452,105 - 23,627,274 23.627,274 1 8472% Surplus Surplus Yes Ad' Yes 35,350.474 (187,616) 35,162,856 3,612.974 3,612,974 38,963.448 (187,618) 38,775,830 Surplus Surplus All Funds Surplus No Ad' No Actual % Yes 21.0450% 21.0842 % 95,567,412 95,667.412 1 51.6180%1 51.8624% 98,841,070 95,594,684 187,618 95,407,048 1 1,046,408 1 187,618 1,234,024 52.1979% 51.8772% Portfolio - City Investments Custodian - Availability Surplus Issuer/Type Amortized Value 2002 RDA U.S. Bank-CIP Yes U.S.Treasury Bill 27,736,335 2004 Finance Authority -CIP Yes U.S.Treasury Bill 9,903,061 2004 Finance Authority -CIP Yes U.S.Treasury Bill 44,931,663 Yes Total - U.S. Treasury 82,571.059 Portfolio - Mutual Funds Trustee - Availabili 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 62 1994 RDA U.S. Bank -Debt Svc YES 1 st American 1995 RDA U.S.Bank -CIP YES 1stAmerican - 1995RDA U.S.Bank-Special Fund YES 1stAmerican - 2004 Fin Auth - 1995 US Bank - Escrow YES 1st American 101 1998 RDA U.S.Bank - CIP YES 1st 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 1stAmerican 2001 RDA U.S. Bank - Dbt Svc YES 1st American 2001 RDA U.S. Bank - CIP YES 1st American - 2002 RDA U.S. Bank - Dbt Svc YES 1 st American 2002 RDA U.S. Bank - CIP YES 1st American 2,086,656 2003 Taxable RDA U.S. Bank - IDS YES 1st American 2003 Taxable RDA U. S. Bank -COI YES 1st American 2003 Taxable RDA U. S. Bank-CIP YES 1st American - 2004 Fin Auth US Bank - CIP YES 1st American 3,839,475 2004 Fin Auth US Bank • COI YES 1stAmerican 5,086 Subtotal - Mutual Fund i 5.931,380 Surplus Surplus Yes Ad' Yes 27.738,335 27,736,335 9,903,061 9,903,061 44,931,663 44,931,663 82,571,059 8215711059 Surplus Yes Ad Surplus Yes 62 62 101 101 2,086.656 2,086,656 3,839,475 3,839,475 5,086 5,086 5,931.380 i 5,931,380 Surplus Surplus No Ad No Surplus No Adi Surplus No All Funds Surplus Actual % Yes 44.5984% 44.8977% All Funds Surplus Actual % Yes 3 2037% 3.22529/6 Total Fiscal Agent Investments 88,502,439 1 88,502,439 88,502,439 47.8021% 48.1228X Grand Total 185,143,509 184,097,103 1 (187,818 183,909,485 1,048,408 187,618 1,234,024 100.0000X 100.00OOX 18 0 M s lo N a rn rn T N o tb � M � N r p N co N N rj rn N0(0 N M Or ptOp O Dj tC�a f1�H00 F rnr� A O NCO rn V NaN V r Go NtA(D NET .50 U') M C lD O r LO O Lo tAD H H N N q a aD o a a M ^ p m M M O c O� C coC LL O A • N N rj r (+f Z oaM0o� C c10iam `YO U tq 0M`rc) O0 04 P— MOr ,� O Lq LA. 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O O O T m 0 6 0— j, m O O O T m 0 0 6— T co O O O j, m CO •@ M N N m Ol O) O) Z+'0 C C C> N 0) 0) m O) Ol a1 C C C> V) V) w m O) O G1 L 0 C C C p N w V) ca 0) 0) O D C C C> 0 w N m d7 G) -0 C C C E E E E m m m m E E E m m m E E E �•� m m m m E E E m m m m E E E m m m ��o Q wwwF6 e Y www�m w'pwwFm wwwFm d Y wwwrm N N d N L N d 0 a) L N C) N d L N 4) N L N d) N N L a) J f0 N N N C m f0 N N N C d f0 .� N .� C N f0 N .� .y C N f0 N N N C N f0 p •C M p <0 <0 f6 O O1 0' 7 m m 6 Sc<0 f0 O Ol 0' 7 7 7 m f0 a O O) 0- m 7 7 m 2 m m m O Ol 0' 0 7 m m 2 f0 m m O rn IX 7 7 0 LL �T C LL LL LL LL m- _� aa`a`cna'g Q`aaina'>� a`a`av�a'g Q`aQ`U) aa`rna'g 20 N C E ch Ccu L N c Q O y m C �C f6 W a� Q Q ■ w c d E Uc LL O C E w LL. c TI w o 0 N cc —` N L M wm _per O N Jc� C 7 E Q ON c U tz L c x .n C) E 0 0 0 0 0 0 0 0 o do o o Ln o L o M ch cli C,4lu8DJad,,-: .= o 0 ■ 1 •1 .1 .1 .1 i i . i ■ i I I I I I i i i i 1 .1 '11 1 I ■ i 21 INVESTMENT ADVISORY BOARD MEETING BUSINESS SESSION: B Meeting Date: July 13, 2005 ITEM TITLE Meeting Schedule for Fiscal Year 2005/2006 BACKGROUND: Attached find a list of meeting dates for Fiscal Year 2005/2006. RECOMMENDATION: Approve the meeting schedule of the Investment Advisory Board for Fiscal Year 2005/0006. hn M. Falconer, Finance Director TO: Investment Advisory Board Members FROM: John M. Falconer, Finance Director DATE: July 13, 2005 RE: Schedule of Investment Advisory Board Meeting Schedule The City Ordinance specifies that the Investment Advisory Board usually will meet monthly unless the Board with Council concurrence believes less frequent meetings are considered necessary. In the past, the Board has met monthly except for the Month of August. Listed below are meeting dates for the Boards review. Monthly July 13, 2005 August 10, 2005 September 14, 2005 October 12, 2005 November 9, 2005 December 14, 2005 January 11, 2006 February 8, 2006 March 8, 2006 April 12, 2006 May 10, 2006 June 14, 2006 Quarterly September 14, 2005 December 14, 2005 March 8, 2006 June 14, 2006 Please consider the schedules for Fiscal Year 2005/2006 and give Staff direction. INVESTMENT ADVISORY BOARD Business Session: C Meeting Date: July 13, 2005 ITFNI TITI F- Fiscal Year 2005/06 Work Plan BACKGROUND: Each year the Investment Advisory Board adopts a work plan, which is subsequently forwarded to the City Council for approval. In addition to the responsibilities listed in the ordinance, the Board may want to consider additional items to address during FY 05/06. Last year the work plan included a review of GSE's, LAIF, Commercial Paper and development of a request for proposal regarding portfolio managers. In Fiscal Year 2005/2006, the Board has previously discussed meeting with City Council to determine if the RFP would be released and interviewing the finalist, subject to City Council approval. RECOMMENDATION: Review and approval of work plan items as deemed appropriate, for consideration by the City Council. n M. Falconer, Finance Director INVESTMENT ADVISORY BOARD Business Session: D Meeting Date: July 13, 2005 TITLE: LAIF Conference - Sacramento, CA October 6" and 7th, 2005 BACKGROUND: The LAIF Conference Agenda has not been printed yet but will be held in Sacramento, California on October 6th and 7', 2005. LAIF Staff has sent the conference agenda to the printer and are not yet available. Staff will provide the agenda to the Board as soon as it is available. Last year no Board members attended the LAIF Conference. RECOMMENDATION: Select up to two Board members to attend the LAIF Conference. Le eka-L'-- n M. Falconer, "finance Director INVESTMENT ADVISORY BOARD Correspondence & Written Material Item A Meeting Date: July 13, 2005 TITLE: Month End Cash Report - June 2005 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. hn M. Falconer, Finance Director m C 0 LL m m U r O OL 12 N S(jo U.0O N J W O O Y M o c CU�-7i Cl) It N _�_ Ocj Oa) co O M O M O co N M 0� 0) c) O) A nn n co0) e- n c0 (V O O^ n Dj cl)O C �p 1� n W ND P. NO �aD V V O Lo M NN- W N O Lq V M Lq Cn M DNMI- (p N (D N V Cd O) a0 N NMr- - - --- -o M ch vCV O M Ci NO CD O O O O O O }MOMO CD nnNOOLf) t{ n O M CA O CO O) CD M O CA 0� n E co Cl) C`i O V N O N O O M t0 O M n V ON, NOnO OOO N N CV N N O N CO M V CO Cp n O M c' m 0 O m Cl oD (A O N Cl I- N V' co M M co n CA J c ci � r n n n Cn) Ci Chi) C. n M LL v �N v IT 0 0 U ON fN A'IT Cf Cq cM m mM 00 00 CO CD M O O O O CD Y LL M O Ch CM OOOO O N O Dnj U V Vi in J COO O !00 COO OO N O CCO Cto n C) M M M O O LL mpf�4 O C7O O O O N Cj N 0 0 O O N CO N v O 0) c rn rn 00 CC) LL oN (D O O (D O C) cli ^ O CD M N CD NWV[D LL GD O 0) Lf) 04 ) ONC.)N co LO c nc0 C(n.Vj U NWtoCDm p C) A oo Cl) m O C N O m O w N E M N m X N N (0 U m N N c0 O O Cp m CD O N((+�� Q_ 0 (MO QaU NN0 Um`y m N CT m aM C Na lfi m p N CD at N cc X w C ..m.. w m Co N N N C l6 ..N.. C m lfl C m O l0 Y Y Cp m C� L L U In m aV OU E U mm 00 m in e "O Qa Q O. too C> C C N Ommn7 W QCOUZ0Q,Q U m t u m V Cn O 7 N M O m M O d X v -D m m d m > � c cq o C N M N o O m coo N C (7 N 52 L m M ~ W - T V O v cq m _ CD W m O m CA M Z O p y a O Q m �[i C N m O E N m N C m p L m N " � N c O O .L C O N N O M oO 7 CD m m �� dm or O w m a 7 a m-o La � m �U mL r c ao com m O 1 C a mLL S) 0 U Q L ocL 1 U N p :c N m U o 7 E ,s n0 0 0 N C m F U) m N m m e- � _Q E N 7 N L >c am a c c m m O_ moo. Em ao mm m C O 7 N U O C tf c m o o m ac cL m _m �C na) U N r'a _—a I H o0 EY O a° H LL F F 2 FRB: H.15--Selected Interest Rates, Web -Only Daily Update --June 30, 2005 Page I of 4 Federal Reserve Statistical Release H.15 Selected Interest Rates (Daily) , kip to Release Date: June 30, 2005 Weeklv release dates and_announceinents 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 SELECTED INTEREST RATES Yields in percent per annum Instruments Federal funds (effective) 1 2 3 Commercial paper 3 4 5 Nonfinancial 1-month 2-month 3-month Financial 1-month 2-month 3-month CDs (secondary market) 3 6 1-month 3-month 6-month Eurodollar deposits (London) 3 7 1-month 3-month 6-month Bank prime loan 2 3 8 Discount window primary credit 2 9 U.S. government securities Treasury bills (secondary market) 3 4 4-week 3-month 6-month Treasury constant maturities Nominal 10 1-month 3-month 6-month 1-year 2-year 3-year 5-year 7-year 10-year For immediate release June 30, 2005 2005 2005 2005 Jun Jun Jun 27 28 29 3.17 3.17 3.20 3.20 3.23 3.22 3.25 3.27 3.27 3.33 3.35 3.27 3.26 3.22 3.27 3.30 3.31 3.37 3.36 3.34 3.29 3.29 3.30 3.43 3.45 3.47 3.61 3.62 3.65 3.26 3.29 3.28 3.41 3.44 3.44 3.58 3.60 3.62 6.00 6.00 6.00 4.00 4.00 4.00 2.77 2.94 2.90 3.09 3.08 3.06 3.23 3.25 3.23 2.85 2.99 2.95 3.15 3.14 3.13 3.33 3.35 3.33 3.42 3.46 3.44 3.60 3.65 3.65 3.62 3.68 3.69 3.69 3.76 3.77 3.77 3.84 3.85 3.90 3.97 3.99 2005 Jun 30 3 http://www.federalreserve.gov/Releases/H 15/update/ 7/1 /2005 FRB: H. 1 5--Selected Interest Rates, Web -Only Daily Update --June 30, 2005 Page 2 of 4 20-year 11 Inflation -indexed 5-year 7-year 10-year 20-year Inflation -indexed long-term average 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 12 13 See overleaf for footnotes 4.25 4.30 4.33 1.34 1.40 1.42 1.44 1.50 1.52 1.62 1.67 1.69 1.77 1.81 1.83 1.74 1.77 1.79 3.82 3.86 3.86 3.92 3.98 3.96 3.98 4.04 4.03 4.03 4.09 4.08 4.08 4.15 4.13 4.17 4.24 4.23 4.30 4.36 4.35 4.62 4.66 4.65 4.86 4.91 4.96 5.79 5.84 5.86 FOOTNOTES 5.53 1. The daily effective federal funds rate is a weighted average of rates on brokered trades. 2. Weekly figures are averages of 7 calendar days ending on Wednesday of the current week; monthly figures include each calendar day in the month. 3. Annualized using a 360-day year or bank interest. 4. On a discount basis. 5. Interest rates interpolated from data on certain commercial paper trades settled by The Depository Trust Company. The trades represent sales of commercial paper by dealers or direct issuers to investors (that is, the offer side). The 1-, 2-, and 3-month rates are equivalent to the 30-, 60-, and 90-day dates reported on the Board's Commercial Paper Web page (www.federalreserve.gov/releases/cp). 6. An average of dealer bid rates on nationally traded certificates of 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 deposit. adjustment credit, which was discontinued after January 8, 2003. For further information, see 4 http://www.federalreserve.gov/Releases/H15/update/ 7/1 /2005 FRB: H.15--Selected Interest Rates, Web -Only Daily Update --June 30, 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)1. 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_ announcements I Historical data. I About Daily update Other formats: Screen reader I ASCII Statistical releases Homc I Economic research and data Accessibility Cntact_L_s 5 http://www.federalreserve.gov/Releases/H 15/update/ 7/l /2005 FRB: H. 1 5--Selected Interest Rates, Web -Only Daily Update --June 30, 2005 Page 4 of 4 Last update: June 30, 2005 6 http://www.federalreserve.gov/Releases/H 15/update/ 7/1 /2005 Phil Angelides, State Treasurer Inside the State Treasurer's Office Local Agency Investment Fund (LAIF) PMIA Performance Report 2.96 2.83 166 6/15/2005 6/16/2005 2.97 2.83 164 6/17/2005 2.98 2.83 166 6/18/2005 2.98 2.83 166 6/19/2005 2.98 2.83 166 6/20/2005 2.98 2.84 163 6/21 /2005 2.98 2.84 162 6/22/2005 2.98 2.84 160 6/23/2005 2.99 2.84 157 6/24/2005 2.99 2.84 155 6/25/2005 2.99 2.84 155 6/26/2005 2.99 2.85 155 6/27/2005 2.99 2.85 153 6/28/2005 2.99 2.85 151 LAIF Performance Report Quarter Ending 3/31/05 Apportionment Rate: 2.38% Earnings Ratio: .00006516177802079 Fair Value Factor: .996466418 PMIA Average Monthly Effective Yields May 2006 2.856% April2005 2.724% March 2005 2.542% Pooled Money Investment Account Portfolio Composition $62.2 Billion 5/31 /05 Loans Reverses 8.16% -1.04% Corpora+� R���� 2. Commercial Pape 16.84% Time Depo: 11.26% CDs/BNs 26.39% Treasuries 1320% ages Agencies 22.09% 7 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 14-DAY 07-01-2005 07-15-2005 3.165 3.213 99.876917 912795TN1 28-DAY 06-30-2005 07-28-2005 2.925 2.972 99.772500 912795VJ7 91-DAY 06-30-2005 09-29-2005 3.080 3.147 99.221444 912795VT5 182-DAY 06-30-2005 12-29-2005 3.220 3.319 98.372111 912795WG2 28-DAY 06-23-2005 07-21-2005 2.780 2.825 99.783778 912795VH1 91-DAY 06-23-2005 09-22-2005 2.965 3.029 99.250514 912795VS7 182-DAY 06-23-2005 12-22-2005 3.175 3.272 98.394861 912795WF4 28-DAY 06-16-2005 07-14-2005 2.735 2.779 99.787278 912795VG3 91-DAY 06-16-2005 09-15-2005 2.975 3.039 99.247986 912795VR9 182-DAY 06-16-2005 12-15-2005 3.120 3.214 98.422667 912795WE7 28-DAY 06-09-2005 07-07-2005 2.775 2.820 99.784167 912795VF5 91-DAY 06-09-2005 09-08-2005 2.965 3.029 99.250514 912795VQ1 182-DAY 06-09-2005 12-08-2005 3.060 3.151 98.453000 912795WD9 8-DAY 06-07-2005 06-15-2005 2.940 2.983 99.934667 912795TM3 12-DAY 06-03-2005 06-15-2005 2.935 2.979 99.902167 912795TM3 28-DAY 06-02-2005 06-30-2005 2.740 2.784 99.786889 912795SV4 91-DAY 06-02-2005 09-01-2005 2.935 2.998 99.258097 912795VP3 182-DAY 06-02-2005 12-01-2005 3.080 3.172 98.442889 912795WC1 14-DAY 06-01-2005 06-15-2005 2.895 2.939 99.887417 912795TM3 28-DAY 05-26-2005 06-23-2005 2.765 2.809 99.784944 912795SU6 91-DAY 05-26-2005 08-25-2005 2.895 2.957 99.268208 912795VN8 183-DAY 05-26-2005 11-25-2005 3.110 3.204 98.419083 912795WB3 28-DAY 05-19-2005 06-16-2005 2.550 2.591 99.801667 912795ST9 91-DAY 05-19-2005 08-18-2005 2.800 2.859 99.292222 912795VMO 182-DAY 05-19-2005 11-17-2005 3.070 3.162 98.447944 912795WA5 28-DAY 05-12-2005 06-09-2005 2.575 2.616 99.799722 912795SS1 91-DAY 05-12-2005 08-11-2005 2.850 2.911 99.279583 912795VL2 182-DAY 05-12-2005 11-10-2005 3.120 3.214 98.422667 912795VZ1 28-DAY 05-05-2005 06-02-2005 2.605 2.647 99.797389 912795SR3 91-DAY 05-05-2005 08-04-2005 2.870 2.931 99.274528 912795VK4 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 8 http://wwws.publicdebt.treas.gov/AI/OFBills 7/1 /2005 Bureau of the Public Debt: Recent Treasury Bill Auction Results Page 2 of 2 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 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 July 1, 2005 1:56:20 PM EDT 9 http://wwws.publicdebt.treas.gov/AI/OFBills 7/l /2005 FRB:Commercial Paper Rates and Outstandings Page 1 of 3 r . • Release I About I Out standngs I Historical discount rates (Historical outstandings ............ Data as of June 30, 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 June 30, 2005 . Posted July 1, 2005 Discount rates A2/P2 nonfinancial 1-day 3.37 3.34 3.43 7-day 3.25 3.25 3.37 15-day 3.24 3.22 3.38 30-day 3.25 3.24 3.45 60-day 3.32 ND 3.55 90-day 3.40 ND:::] 3.63 Yield curve Money market. basis Financial ... -- ._ Nonfinancial --.-....-.. A2/P2 1 fi 15 30 Days to Maturity E 3.7 3.5 3.3 3.1 90 10 7/1/2005 http://www.federalreserve.gov/Releases/CP/ FRB:Commercial Paper Rates and Outstandings Page 2 of 3 Discount rate spread Basis points 1?0 100 80 60 40 20 0 2001 2002 2003 2004 2005 Discount rate history Thirty -day commercial paper (daily) 'Financial — — — 40nfinaricial A"JP2 2001 2002 2M3 2004 Outstandings Weekly (Wednesday), seasonally adjusted Percent .�...�.-- . 5 4 3 2 ----1 0 2005 11 http://www.federalreserve.gov/Releases/CP/ 7/1 /2005 FRB:Commercial Paper Rates and Outstandings Page 3 of 3 1420 1390 1360 1330 1300 1270 1240 1210 1190 1150 Billions of dollars Billions of dollars Uinuncia) ticlt scab:) Nonriinancial (right cwale) N 1 ttlj �� t i 1� /"\ \"t w 2001 2002 2003 2004 - 250 210 170 - 130 �j/� 2005 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 _Da ear outstandin . Commercial gaper outstanding, miscellaneous categories Volume Statistics 2005 :Q2 Release I About I Outstandinas I Historical discount rates I Historical outstandinl?s Home I Statistical releases Accessibility Contact Us Last update: July 1, 2005 12 http://www.federalreserve.gov/Releases/CP/ 7/1 /2005 d U cNc G LL 0 U E c E 2 C N z a J 7 y E E >_ Lp tt x o O Z 0 V) U 00 p OaNa �n (00 C NL N M W U to O l0 m 0) � O O m I N '7 OOD ff) N ` m N Q f0 M O "''NM aM A l0 C fp co N 'Q Cl) N QO t0 N M co CD ((DN 07 (O 0 0 V N f cM l0 V N t t O) H LL'J� O� NrdN'OD mr m .O Q /D 10 't IC) LO M (O OO V OO N d el N a0 M f� 0 N 7 N M Q � C N E UN U � Q Q ID 0 O a0 l0N OO V N1t N n Cl)w f� V M�1O (ON ('7 10'Q Nr OD Iwo Ol O/ N .N (0 n CD V L V 100 w NON NP 0 M c W � fpOp R N m ; C U (O N a ce) a N OO M A N N a In U a) 0 z OD O N (O N In V O f- O a0 I- 1,- O f0 e� P QO M t0 N LO h V' I.- co W co ' N N N w V M wO) a O N NOD �t W M 7 l0 O ID O t0 O OO W a coI/7 O C C Cs 10 I� O) 7 1� N M W OO 7 Cs O) co LO O) o 0 0) M N O) 1- N N 10 y� NOMOv �OMD 1�.00 G a; a � N0 Nh(OMM N NN �N,) '0 4 N O) v M NP O LO O) OD N ODM M N m N N L C E C O L 7 O L I- N a y N o � �V 7 � w N a ao a H F- Z Z ` W ~ U QZ (n O U U0xmZ ~ c c cv }m 0 X m a �a c= w a0i > w Q�wU)w-i UF-� L) L)HHo �LL E �ai d m� W U aOLL -Z=oQ'�mn.pUZz7 aZW cc X � . WZW0 uawW?mz� ) w a. U) ID w 4)) d Qw az2aJ �z m2m�O>0¢ mFo 0 0.ON m N O xx z W W»00C7LLJpm O?a L0Lu ?W(9UUa(nQ(nLL Q aHn OQ w(no� QFz 13 INVESTMENT ADVISORY BOARD Meeting Date: TITLE: July 13, 2005 Pooled Money Investment Board Report for April 2005 BACKGROUND: Correspondence & Written Material Item B The Pooled Money Investment Board Report for April 2005 is included in the agenda packet. RECOMMENDATION: Receive & File ohn M. Falco er, Finance Director Phil Angelides April 2005 STATE OF CALIFORNIA STATE TREASURER'S OFFICE POOLED MONEY INVESTMENT BOARD REPORT April 2005 TABLE OF CONTENTS SUMMARY................................................................. 01 SELECTED INVESTMENT DATA .................................... 02 PORTFOLIO COMPOSITION ........................................ 03 INVESTMENT TRANSACTIONS ..................................... 04 TIMEDEPOSITS........................................................ 16 BANK DEMAND DEPOSITS .......................................... 27 POOLED MONEY INVESTMENT BOARD DESIGNATION... 28 POOLED MONEY INVESTMENT ACCOUNT SUMMARY OF INVESTMENT DATA A COMPARISON OF APRIL 2005 WITH APRIL 2004 (DOLLARS IN THOUSANDS) CAPRIL 2005 APRIL 2004 CHANGE Average Daily Portfolio $ 54,857,398 $ 53,669,110 $ +1,188,288 Accrued Earnings $ 122,837 $ 63,556 $ +59,281 Effective Yield 2.724 1.445 +1.279 Average Life -Month End (In Days) 183 145 +38 Total Security Transactions Amount $ 20,443,505 $ 19,603,000 $ +840,505 Number 426 406 +20 Total Time Deposit Transactions Amount $ 4,296,190 $ 3,619,000 $ +677,190 Number 162 147 +15 Average Workday Investment Activity $ 1,178,081 $ 1,055,545 $ +122,536 Prescribed Demand Account Balances For Services $ 407,679 $ 1,265,964 $ -858,285 For Uncollected Funds $ 293,748 $ 271,396 $ +22,352 1 PHIL ANGELIDES TREASURER STATE OF CALIFORNIA INVESTMENT DIVISION SELECTED INVESTMENT DATA ANALYSIS OF THE POOLED MONEY INVESTMENT ACCOUNT PORTFOLIO (000 OMITTED) April 30, 2005 DIFFERENCE IN PERCENT OF PERCENT OF PORTFOLIO FROM TYPE OF SECURITY AMOUNT PORTFOLIO PRIOR MONTH Government Bills $ 2,203,089 3.64 -0.65 Bonds 0 0.00 0.00 Notes 6,025,729 9.97 -2.18 Strips 0 0.00 0.00 Total Government $ 8,228,818 13.61 -2.83 Federal Agency Coupons $ 7,336,592 12.13 -2.62 Certificates of Deposit 12,327,056 20.39 +2.80 Bank Notes 1,425,246 2.36 +1.48 Bankers' Acceptances 0 0.00 0 Repurchases 0 0.00 0 Federal Agency Discount Notes 8,070,901 13.35 +0.52 Time Deposits 6,833,495 11.30 -1.85 GNMAs 329 0.00 0 Commercial Paper 8,975,075 14.85 +6.18 FHLMC/Remics 573,764 0.95 -0.21 Corporate Bonds 1,444,104 2.39 -0.62 AB 55 Loans 5,242,413 8.67 -2.48 GF Loans 0 0.00 -0.37 Reversed Repurchases 0 0.00 0 Total (All Types) $ 60,457,793 100.00 INVESTMENT ACTIVITY Pooled Money Other Time Deposits Totals PMIA Monthly Average Effective Yield Year to Date Yield Last Day of Month APRIL 2005 NUMBER AMOUNT 426 $ 20,443,505 58 892,975 162 4,296,190 646 $ 25,632,670 2.724 2.099 2 MARCH 2O05 NUMBER AMOUNT 487 $ 23,585,002 33 1,122,811 139 2,115,500 659 $ 26,823,313 2.542 2.027 Pooled Money Investment Account Portfolio Composition $60.4 Billion Corpo 2 Commercial Pape 14.85% Time Deposi' 11.30% 4/30/05 Loans Treasuries 8.67% , „ CDs/BNs 22.75% 3 ages 5% Agencies 25.48% 4/1/2005 REDEMPTIONS CD W/F 2.710% 4/1/2005 2.710 $50,000 15 $56,458.33 2.748 CD W/F 2.710% 4/1/2005 2.710 50,000 15 56,458.33 2.748 CD W/F 2.710% 4/1/2005 2.710 50,000 15 56,458.33 2.748 CD W/F 2.710% 4/1/2005 2.710 50,000 15 56,458.33 2.748 CD CS/1ST BOSTON 2.620% 4/1/2005 2.610 16,000 35 40,600.40 2.646 CD CS/1ST BOSTON 2.620% 4/1/2005 2.610 50,000 35 126,876.23 2.646 CD CS/1ST BOSTON 2.620% 4/1/2005 2.610 50,000 35 126,876.23 2.646 CD US BANK 2.630% 4/1/2005 2.630 50,000 35 127,847.22 2.667 CD US BANK 2.630% 4/1/2005 2.630 50,000 35 127,847.22 2.667 CD CALYON 2.460% 4/1/2005 2.460 50,000 99 338,250.00 2.494 CD CALYON 2.460% 4/1/2005 2.460 50,000 99 338,250.00 2.494 CD CALYON 2.460% 4/1/2005 2.460 50,000 99 338,250.00 2.494 CD WA MU, FA 2.490% 4/1/2005 2.490 50,000 99 342,375.00 2.524 CD WA MU, FA 2.490% 4/1/2005 2.490 50,000 99 342,375.00 2.524 CD WA MU, FA 2.490% 4/1/2005 2.490 50,000 99 342,375.00 2.524 CD WA MU, FA 2.490% 4/1/2005 2.490 50,000 99 342,375.00 2.524 CD FORTIS 2.410% 4/1/2005 2.410 50,000 123 411,708.33 2.443 CD FORTIS 2.410% 4/1/2005 2.410 50,000 123 411,708.33 2.443 CD FORTIS 2.410% 4/1/2005 2.410 50,000 123 411,708.33 2.443 CD FORTIS 2.410% 4/1/2005 2.410 50,000 123 '411,708.33 2.443 CP CITICORP 4/1/2005 2.750 50,000 11 42,013.89 2.791 CP CITICORP 4/1/2005 2.750 50,000 11 42,013.89 2.791 CP CITICORP 4/1/2005 2.750 50,000 11 42,013.89 2.791 CP CITICORP 4/1/2005 2.750 50,000 11 42,013.89 2.791 CP NCAT 4/1/2005 2.550 44,000 37 115,316.67 2.592 CP NCAT 4/1/2005 2.550 50,000 37 131,041.67 2.592 CP CITI GLOBAL 4/1/2005 2.420 50,000 102 342,833.33 2.471 CP CITI GLOBAL 4/1/2005 2.420 50,000 102 342,833.33 2.471 CP CITI GLOBAL 4/1/2005 2.420 50,000 102 342,833.33 2.471 CP CITI GLOBAL 4/1/2005 2.420 50,000 102 342,833.33 2.471 CP GECC 4/1/2005 2.430 50,000 106 357,750.00 2.482 CP GECC 4/1/2005 2.430 50,000 106 357,750.00 2.482 CP GECC 4/1/2005 2.430 50,000 106 357,750.00 2.482 CP GECC 4/1/2005 2.380 50,000 123 406,583.33 2.433 CP GECC 4/1/2005 2.380 50,000 123 406,583.33 2.433 CP GECC 4/1/2005 2.380 50,000 123 406,583.33 2.433 CP GECC 4/1/2005 2.380 50,000 123 406,583.33 2.433 CP CITI GLOBAL 4/1/2005 2.300 50,000 130 415,277.78 2.351 CP CITI GLOBAL 4/1/2005 2.300 50,000 130 415,277.78 2.351 CP CITI GLOBAL 4/1/2005 2.300 50,000 130 415,277.78 2.351 CP CITI GLOBAL 4/1/2005 2.300 50,000 130 415,277.78 2.351 4/1/2005 PURCHASES CD STNRD CH 3.030% 7/6/2005 3.030 50,000 CD STNRD CH 3.030% 7/6/2005 3.030 50,000 CD STNRD CH 3.030% 7/6/2005 3.030 50,000 CD STNRD CH 3.030% 7/6/2005 3.030 50,000 CD RABO 3.100% 8/29/2005 3.100 50,000 CD RABO 3.100% 8/29/2005 3.100 50,000 4 4/1/2005 PURCHASES (continued) CD RB CANADA 3.160% 8/29/2005 3.150 50,000 CD RB CANADA 3.160% 8/29/2005 3.150 50,000 CD SVENSKA 3.170% 8/29/2005 3.170 50,000 CD SVENSKA 3.170% 8/29/2005 3.170 50,000 CD SOC GEN 3.160% 8/29/2005 3.160 50,000 CD SOC GEN 3.160% 8/29/2005 3.160 50,000 CID CITI GLOBAL 7/5/2005 2.980 50,000 CID CITI GLOBAL 7/5/2005 2.980 50,000 CID CITI GLOBAL 7/5/2005 2.980 50,000 CID MORG STAN 7/5/2005 3.000 50,000 CID MORG STAN 7/5/2005 3.000 50,000 CID CITI GLOBAL 7/6/2005 2.980 50,000 CID CITI GLOBAL 7/6/2005 2.980 50,000 CID CITI GLOBAL 7/6/2005 2.980 50,000 CID TOYOTA 8/29/2005 3.160 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 DISC NOTE FHLMC 8/29/2005 3.060 50,000 4/4/2005 REDEMPTIONS CD W/F 2.720% 4/4/2005 2.720 50,000 18 68,000.00 2.758 CD W/F 2.720% 4/4/2005 2.720 50,000 18 68,000.00 2.758 CID GECC 4/4/2005 2.760 50,000 14 53,666.67 2.801 CID GECC 4/4/2005 2.760 50,000 14 53,666.67 2.801 CID MORG STAN 4/4/2005 2.730 50,000 20 75,833.33 2.772 4/4/2005 PURCHASES CID NCAT 4/5/2005 2.750 50,000 CID NCAT 4/5/2005 2.750 50,000 CID COUNTRY 5/2/2005 2.825 50,000 CID TOYOTA 7/5/2005 3.000 50,000 CID TOYOTA 7/5/2005 3.000 50,000 4/4/2005 PURCHASES (continued) CP FCAR CP FCAR 4/5/2005 REDEMPTIONS CP NCAT CP NCAT CP GECC CP GECC 4/5/2005 PURCHASES BN B/A BN B/A BN B/A BN B/A BN B/A BN B/A BN B/A BN B/A BN B/A 4/6/2005 NO REDEMPTIONS 4/6/2005 PURCHASES CD ABN AMRO CD ABN AMRO CD CIBC CD CIBC CP GECC CP GECC CP BEAR CP BEAR 4/7/2005 NO REDEMPTIONS 4/7/2005 PURCHASES BN WORLD BN WORLD BN WORLD BN WORLD CP B/A CP B/A CP B/A CP B/A CP B/A CP B/A CP B/A 7/6/2005 3.020 50,000 7/6/2005 3.020 50,000 4/5/2005 2.750 50,000 1 3,819.44 2.788 4/5/2005 2.750 50,000 1 3,819.44 2.788 4/5/2005 2.760 50,000 15 57,500.00 2.802 4/5/2005 2.760 50,000 15 57,500.00 2.802 3.030% 7/5/2005 3.030 3.030% 7/5/2005 3.030 3.030% 7/5/2005 3.030 3.030% 7/5/2005 3.030 3.030% 7/6/2005 3.030 3.030% 7/6/2005 3.030 3.030% 7/6/2005 3.030 3.030% 7/6/2005 3.030 3.030% 7/6/2005 3.030 3.065% 8/3/2005 3.060 3.065% 8/3/2005 3.060 3.070% 8/8/2005 3.070 3.070% 8/8/2005 3.070 8/17/2005 3.090 8/17/2005 3.090 8/2/2005 3.020 8/2/2005 3.020 3.090% 8/2/2005 3.090 3.090% 8/2/2005 3.090 3.090% 8/2/2005 3.090 3.090% 8/2/2005 3.090 8/5/2005 3.090 8/5/2005 3.090 8/5/2005 3.090 8/8/2005 3.090 8/8/2005 3.090 8/9/2005 3.090 8/9/2005 3.090 6 50,000 50,000 50,000 50,000 25,000 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 50,000 50,000 50,000 20,000 50,000 50,000 50,000 50,000 50,000 50,000 4/7/2005 PURCHASES (continued) CP NCAT 8/17/2005 3.090 30,000 4/8/2005 REDEMPTIONS CD SOC GEN 2.720% 4/8/2005 2.720 50,000 22 83,111.11 2.758 CD SOC GEN 2.720% 4/8/2005 2.720 50,000 22 83,111.11 2.758 CD WA MU, FA 2.760% 4/8/2005 2.670 40,000 23 70,560.61 2.798 CD FORTIS 2.300% 4/8/2005 2.300 50,000 154 491,944.44 2.332 CD FORTIS 2.300% 4/8/2005 2.300 50,000 154 491,944.44 2.332 DISC NOTE FHLB 4/8/2005 2.660 25,000 22 40,638.89 2.701 DISC NOTE FHLB 4/8/2005 2.660 50,000 22 81,277.78 2.701 4/8/2005 PURCHASES CP NCAT 4/11/2005 2.730 50,000 4/11/2005 SALES TREAS NOTE 1.625% 4/30/2005 2.871 50,000 711 1,739,140.01 1.771 TREAS NOTE 1.625% 4/30/2005 2.871 50,000 711 1,739,140.01 1.771 TREAS NOTE 1.625% 4/30/2005 2.871 50,000 711 1,739,140.01 1.771 TREAS NOTE 1.625% 4/30/2005 2.871 50,000 711 1,739,140.01 1.771 TREAS NOTE 1.625% 4/30/2005 2.871 50,000 711 1,739,140.01 1.771 TREAS NOTE 1.625% 4/30/2005 2.871 50,000 711 1,739,140.01 1.771 4/11/2005 REDEMPTIONS CD TORONTO 2.330% 4/11/2005 2.320 20,000 157 202,364.29 2.352 CD TORONTO 2.330% 4/11/2005 2.320 50,000 157 505,910.73 2.352 CD FORTIS 2.215% 4/11/2005 2.215 50,000 159 489,145.83 2.246 CD FORTIS 2.215% 4/11/2005 2.215 50,000 159 489,145.83 2.246 CP NCAT 4/11/2005 2.730 50,000 3 11,375.00 2.769 4/11/2005 PURCHASES CP W/F 5/2/2005 2.750 50,000 CP W/F 5/2/2005 2.750 50,000 CP W/F 5/2/2005 2.750 50,000 4/12/2005 NO REDEMPTIONS 4/12/2005 PURCHASES CP B/A 6/27/2005 2.970 2,000 CP B/A 6/27/2005 2.970 50,000 CP B/A 6/27/2005 2.970 50,000 CP B/A 6/27/2005 2.970 50,000 CP B/A 6/27/2005 2.970 50,000 CP B/A 6/27/2005 2.970 50,000 CP B/A 6/27/2005 2.970 50,000 7 4/12/2005 PURCHASES (continued) CD CALYON 2.930% 6/l/2005 2.930 50,000 CD CALYON 2.930% 6/l/2005 2.930 50,000 CD SOC GEN 2.930% 6/l/2005 2.930 50,000 CD SOC GEN 2.930% 6/l/2005 2.930 50,000 4/13/2005 NO REDEMPTIONS 4/13/2005 PURCHASES CP MORG STAN 6/6/2005 2.960 41,000 CP MORG STAN 6/7/2005 2.960 50,000 CP MORG STAN 6/7/2005 2.960 50,000 CP MORG STAN 6/8/2005 2.960 50,000 CP MORG STAN 6/8/2005 2.960 50,000 CP GECC 6/13/2005 2.970 10,000 CP GECC 6/13/2005 2.970 50,000 CP GECC 6/13/2005 2.970 50,000 CP GECC 6/13/2005 2.970 50,000 CP GECC 6/13/2005 2.970 50,000 4/14/2005 NO REDEMPTIONS 4/14/2005 PURCHASES BN B/A 3.150% 8/29/2005 3.150 50,000 BN B/A 3.150% 8/29/2005 3.150 50,000 BN B/A 3.150% 8/31/2005 3.150 50,000 BN B/A 3.150% 8/31/2005 3.150 50,000 CD RB CANADA 3.155% 8/29/2005 3.140 50,000 CD RB CANADA 3.155% 8/29/2005 3.140 50,000 CD BNP PARIBAS 3.155% 8/29/2005 3.155 50,000 CD BNP PARIBAS 3.155% 8/29/2005 3.155 50,000 CD RB SCOT 3.160% 8/29/2005 3.160 50,000 CD RB SCOT 3.160% 8/29/2005 3.160 50,000 CD RB SCOT 3.160% 8/29/2005 3.160 50,000 CD RB SCOT 3.160% 8/29/2005 3.160 50,000 CD HSBC 3.170% 8/29/2005 3.170 50,000 CD HSBC 3.170% 8/29/2005 3.170 50,000 CD UBS 3.170% 8/29/2005 3.170 50,000 CD UBS 3.170% 8/29/2005 3.170 50,000 CD UBS 3.170% 8/29/2005 3.170 50,000 CD UBS 3.170% 8/29/2005 3.170 50,000 CD RB CANADA 3.155% 8/31/2005 3.140 50,000 CD RB CANADA 3.155% 8/31/2005 3.140 50,000 CD HSBC 3.170% 8/31/2005 3.170 50,000 CD HSBC 3.170% 8/31/2005 3.170 50,000 CD US BANK 3.180% 8/31/2005 3.180 50,000 CD US BANK 3.180% 8/31/2005 3.180 50,000 CP BEAR 8/17/2005 3.110 50,000 CP BEAR 8/17/2005 3.110 50,000 8 4/14/2005 PURCHASES (continued) CP BEAR 8/17/2005 3.110 50,000 CP BEAR 8/17/2005 3.110 50,000 CP GECC 8/17/2005 3.110 50,000 CP GECC 8/17/2005 3.110 50,000 CP GECC 8/17/2005 3.110 50,000 CP GECC 8/17/2005 3.110 50,000 CP GECC 8/22/2005 3.110 50,000 CP GECC 8/22/2005 3.110 50,000 CP GECC 8/26/2005 3.110 50,000 CP GECC 8/26/2005 3.110 50,000 4/15/2005 REDEMPTIONS MTN B/A 7.625% 4/15/2005 3.200 14,913 955 1,332,414.73 3.084 FFCB 4.375% 4/15/2005 4.600 50,000 1121 7,025,383.33 4.617 FHLB 4.625% 4/15/2005 3.600 50,000 1026 5,140,770.83 3.571 FHLB 4.625% 4/15/2005 3.600 50,000 1026 5,140,770.83 3.571 FHLB 4.625% 4/15/2005 4.330 50,000 1094 6,517,152.78 4.325 FHLB 4.625% 4/15/2005 4.330 50,000 1094 6,517,152.78 4.325 4/15/2005 PURCHASES CD CIBC 2.760% 5/2/2005 2.760 50,000 CD CIBC 2.760% 5/2/2005 2.760 50,000 CD RABO 2.790% 5/2/2005 2.790 50,000 CD RABO 2.790% 5/2/2005 2.790 50,000 CD RABO 2.790% 5/2/2005 2.790 50,000 CP GECC 4/18/2005 2.820 50,000 CP GECC 4/18/2005 2.820 50,000 CP GECC 4/18/2005 2.820 50,000 CP GECC 4/18/2005 2.820 50,000 CP GECC 4/18/2005 2.820 50,000 CP GECC 4/18/2005 2.820 50,000 CP GECC 4/18/2005 2.820 50,000 CP GECC 4/18/2005 2.820 50,000 CP GECC 4/18/2005 2.820 50,000 CP GECC 4/18/2005 2.820 50,000 CP W/F 4/20/2005 2.750 50,000 CP W/F 4/20/2005 2.750 50,000 CP W/F 4/20/2005 2.750 50,000 CP CITICORP 5/2/2005 2.750 50,000 CP CITICORP 5/2/2005 2.750 50,000 CP CITICORP 5/2/2005 2.750 50,000 CP CITICORP 5/2/2005 2.750 50,000 CP CITICORP 5/2/2005 2.750 50,000 CP CITICORP 5/2/2005 2.750 50,000 4/18/2005 REDEMPTIONS CP GECC 4/18/2005 2.820 50,000 3 11,750.00 2.860 -41 4/18/2005 REDEMPTIONS (continued) CP GECC 4/18/2005 2.820 50,000 3 11,750.00 2.860 CP GECC 4/18/2005 2.820 50,000 3 11,750.00 2.860 CP GECC 4/18/2005 2.820 50,000 3 11,750.00 2.860 CP GECC 4/18/2005 2.820 50,000 3 11,750.00 2.860 CP GECC 4/18/2005 2.820 50,000 3 11,750.00 2.860 CP GECC 4/18/2005 2.820 50,000 3 11,750.00 2.860 CP GECC 4/18/2005 2.820 50,000 3 11,750.00 2.860 CP GECC 4/18/2005 2.820 50,000 3 11,750.00 2.860 CP GECC 4/18/2005 2.820 50,000 3 11,750.00 2.860 4/18/2005 PURCHASES CP GECC 4/19/2005 2.720 50,000 CP GECC 4/19/2005 2.720 50,000 CP GECC 4/20/2005 2.720 50,000 CP GECC 4/20/2005 2.720 50,000 CP GECC 4/20/2005 2.720 50,000 CP GECC 4/20/2005 2.720 50,000 CP NCAT 4/20/2005 2.720 50,000 CP NCAT 4/20/2005 2.720 50,000 CP NCAT 4/20/2005 2.720 50,000 TREAS NOTE 1.265% 9/30/2005 3.046 50,000 TREAS NOTE 1.265% 9/30/2005 3.046 50,000 4/19/2005 REDEMPTIONS CP GECC 4/19/2005 2.720 50,000 1 3,777.78 2.758 CP GECC 4/19/2005 2.720 50,000 1 3,777.78 2.758 4/19/2005 PURCHASES CD UBS 3.200% 9/28/2005 3.200 50,000 CD UBS 3.200% 9/28/2005 3.200 50,000 CD ABN AMRO 3.200% 9/28/2005 3.200 50,000 CD ABN AMRO 3.200% 9/28/2005 3.200 50,000 CD STNRD CH 3.200% 9/28/2005 3.200 50,000 CD STNRD CH 3.200% 9/28/2005 3.200 50,000 CD STNRD CH 3.200% 9/28/2005 3.200 50,000 CD SVENSKA 3.193% 9/28/2005 3.190 50,000 CD SVENSKA 3.193% 9/28/2005 3.190 50,000 CD SVENSKA 3.193% 9/28/2005 3.190 50,000 CD SVENSKA 3.193% 9/28/2005 3.190 50,000 CP MORG STAN 5/6/2005 2.860 50,000 CP MORG STAN 7/5/2005 3.050 50,000 CP MORG STAN 7/5/2005 3.050 50,000 CP BEAR 7/25/2005 3.050 50,000 CP BEAR 7/25/2005 3.050 50,000 CP GECC 8/2/2005 3.050 50,000 CP GECC 8/2/2005 3.050 50,000 CP GECC 8/2/2005 3.050 50,000 10 4/19/2005 PURCHASES (continued) CP GECC 8/2/2005 3.050 50,000 TREAS NOTE 1.625% 9/30/2005 3.063 50,000 TREAS NOTE 1.625% 9/30/2005 3.063 50,000 4/20/2005 REDEMPTIONS CP NCAT 4/20/2005 2.720 50,000 2 7,555.56 2.758 CP NCAT 4/20/2005 2.720 50,000 2 7,555.56 2.758 CP NCAT 4/20/2005 2.720 50,000 2 7,555.56 2.758 CP GECC 4/20/2005 2.720 50,000 2 7,555.56 2.758 CP GECC 4/20/2005 2.720 50,000 2 7,555.56 2.758 CP GECC 4/20/2005 2.720 50,000 2 7,555.56 2.758 CP GECC 4/20/2005 2.720 50,000 2 7,555.56 2.758 CP W/F 4/20/2005 2.750 50,000 5 19,097.22 2.789 CP W/F 4/20/2005 2.750 50,000 5 19,097.22 2.789 CP W/F 4/20/2005 2.750 50,000 5 19,097.22 2.789 4/20/2005 PURCHASES CD HSBC 3.060% 7/18/2005 3.060 50,000 CD HSBC 3.060% 7/18/2005 3.060 50,000 CD BARCLAYS 3.070% 7/26/2005 3.070 50,000 CD BARCLAYS 3.070% 7/26/2005 3.070 50,000 CD LLOYDS 3.210% 9/28/2005 3.200 50,000 CD LLOYDS 3.210% 9/28/2005 3.200 50,000 CP W/F 5/4/2005 2.780 50,000 CP W/F 5/4/2005 2.780 50,000 CP W/F 5/5/2005 2.780 50,000 CP W/F 5/5/2005 2.780 50,000 4/21/2005 NO REDEMPTIONS 4/21/2005 PURCHASES CD CS/1 ST BOSTON 3.070% 7/27/2005 3.070 50,000 CD LLOYDS 3.140% 8/29/2005 3.140 50,000 CD LLOYDS 3.140% 8/29/2005 3.140 50,000 CD LLOYDS 3.215% 9/28/2005 3.205 50,000 CD LLOYDS 3.215% 9/28/2005 3.205 50,000 CD MONTREAL 3.205% 9/30/2005 3.205 50,000 CD MONTREAL 3.205% 9/30/2005 3.205 50,000 CP HSBC 5/2/2005 2.730 10,000 CP HSBC 5/2/2005 2.730 50,000 CP KITTY HAWK 5/23/2005 2.940 42,095 CP KITTY HAWK 5/23/2005 2.940 50,000 CP GECC 5/26/2005 2.930 50,000 CP GECC 5/26/2005 2.930 50,000 CP GECC 5/26/2005 2.930 50,000 CP GECC 5/26/2005 2.930 50,000 11 4/22/2005 NO REDEMPTIONS 4/22/2005 PURCHASES CD TORONTO 3.090% 7/25/2005 3.080 50,000 CD RB SCOT 3.220% 9/28/2005 3.220 25,000 CD RB SCOT 3.220% 9/28/2005 3.220 50,000 CD RB SCOT 3.220% 9/28/2005 3.220 50,000 CD RB SCOT 3.220% 9/28/2005 3.220 50,000 CD MONTREAL 3.208% 9/29/2005 3.208 50,000 CD MONTREAL 3.208% 9/29/2005 3.208 50,000 CID W/F 5/11/2005 2.870 25,000 CID W/F 5/11/2005 2.870 50,000 4/25/2005 NO REDEMPTIONS 4/25/2005 PURCHASES BN WORLD 2.950% 7/l/2005 3.000 50,000 BN WORLD 2.950% 7/l/2005 3.000 50,000 CD FORTIS 2.980% 6/8/2005 2.980 50,000 CD FORTIS 2.980% 6/8/2005 2.980 50,000 CD DEXIA 3.155% 8/29/2005 3.155 50,000 CD DEXIA 3.155% 8/29/2005 3.155 50,000 CD HSBC 3.145% 8/29/2005 3.145 50,000 CD HSBC 3.145% 8/29/2005 3.145 50,000 CD S-E BANK 3.235% 9/27/2005 3.230 50,000 CD S-E BANK 3.235% 9/27/2005 3.230 50,000 CID GECC 4/27/2005 2.760 50,000 CID GECC 4/27/2005 2.760 50,000 CID GECC 4/27/2005 2.760 50,000 CID GECC 4/27/2005 2.760 50,000 CID W/F 5/12/2005 2.880 50,000 CID W/F 5/12/2005 2.880 50,000 CID SARA LEE 5/26/2005 2.970 9,000 CID NCAT 5/26/2005 2.960 45,000 CID SARA LEE 5/26/2005 2.970 50,000 CP SARA LEE 6/6/2005 2.990 40,000 CID CITI GLOBAL 6/7/2005 2.960 50,000 CID CITI GLOBAL 6/7/2005 2.960 50,000 CID CITI GLOBAL 6/8/2005 2.960 50,000 CID COUNTRY 6/10/2005 3.010 50,000 CID DEERE 6/13/2005 3.040 30,000 DISC NOTE FHLMC 9/6/2005 3.080 31,000 DISC NOTE FHLMC 9/6/2005 3.080 50,000 DISC NOTE FHLMC 9/6/2005 3.080 50,000 4/26/2005 NO REDEMPTIONS 4/26/2005 PURCHASES FR SBA 3.050% 3/25/1930 3.050 20,111 12 4/27/2005 REDEMPTIONS CD DANSKE 2.245% 4/27/2005 2.240 50,000 175 544,457.53 2.271 CD DANSKE 2.245% 4/27/2005 2.240 50,000 175 544,457.53 2.271 CP GECC 4/27/2005 2.760 50,000 2 7,666.67 2.799 CP GECC 4/27/2005 2.760 50,000 2 7,666.67 2.799 CP GECC 4/27/2005 2.760 50,000 2 7,666.67 2.799 CP GECC 4/27/2005 2.760 50,000 2 7,666.67 2.799 4/27/2005 NO PURCHASES 4/28/2005 NO REDEMPTIONS 4/28/2005 PURCHASES BN WORLD 3.100% 8/2/2005 3.100 50,000 CD WA MU, FA 3.130% 8/3/2005 3.130 50,000 CD WA MU, FA 3.130% 8/3/2005 3.130 50,000 CD FORTIS 3.240% 9/29/2005 3.240 50,000 CD FORTIS 3.240% 9/29/2005 3.240 50,000 CP CITICORP 5/2/2005 2.880 50,000 CP CITICORP 5/2/2005 2.880 50,000 CP CITICORP 5/2/2005 2.880 50,000 CP CITICORP 5/2/2005 2.880 50,000 CP CITIGLOBAL 5/10/2005 2.930 50,000 CP CITIGLOBAL 5/10/2005 2.930 50,000 CP CITIGLOBAL 5/11/2005 2.930 15,000 CP CITIGLOBAL 5/11/2005 2.930 50,000 CP CITIGLOBAL 5/11/2005 2.930 50,000 CP CITIGLOBAL 5/11/2005 2.930 50,000 CP SARA LEE 6/27/2005 3.040 25,000 CP SARA LEE 6/27/2005 3.040 50,000 FR SBA 3.050% 5/25/1930 3.050 9,354 4/29/2005 NO REDEMPTIONS 4/29/2005 PURCHASES CD MONTREAL 3.040% 7/l/2005 3.040 50,000 CD MONTREAL 3.040% 7/l/2005 3.040 50,000 CD BARCLAYS 3.040% 7/l/2005 3.040 50,000 CD BARCLAYS 3.040% 7/l/2005 3.040 50,000 CD SVENSKA 3.050% 7/5/2005 3.040 50,000 CD SVENSKA 3.050% 7/5/2005 3.040 50,000 CD TORONTO 3.175% 9/2/2005 3.180 50,000 CD TORONTO 3.175% 9/2/2005 3.180 50,000 CD TORONTO 3.230% 9/29/2005 3.230 50,000 CD TORONTO 3.230% 9/29/2005 3.230 50,000 CP CHEVRON 5/9/2005 2.950 50,000 CP CHEVRON 5/9/2005 2.950 50,000 CP CITIGLOBAL 5/9/2005 2.960 50,000 CP CITIGLOBAL 5/9/2005 2.960 50,000 13 4/29/2005 PURCHASES (continued) CP CITIGLOBAL 5/9/2005 2.960 50,000 CP CITIGLOBAL 5/9/2005 2.960 50,000 CP GECC 6/l/2005 3.000 50,000 CP GECC 6/l/2005 3.000 50,000 CP GECC 6/l/2005 3.000 50,000 CP GECC 6/l/2005 3.000 50,000 CP GECC 6/l/2005 3.000 50,000 CP GECC 6/l/2005 3.000 50,000 CP GECC 6/6/2005 3.000 50,000 CP GECC 6/6/2005 3.000 50,000 DISC NOTE FHLMC 9/19/2005 3.090 50,000 DISC NOTE FHLMC 9/19/2005 3.090 50,000 DISC NOTE FHLMC 9/19/2005 3.090 50,000 DISC NOTE FHLMC 9/19/2005 3.090 50,000 DISC NOTE FHLMC 9/30/2005 3.100 50,000 DISC NOTE FHLMC 9/30/2005 3.100 50,000 DISC NOTE FHLMC 9/30/2005 3.100 50,000 DISC NOTE FHLMC 9/30/2005 3.100 50,000 DISC NOTE FHLMC 9/30/2005 3.100 50,000 DISC NOTE FHLMC 9/30/2005 3.100 50,000 TREAS NOTE 1.625% 9/30/2005 3.013 50,000 TREAS NOTE 1.625% 9/30/2005 3.013 50,000 TREAS NOTE 1.625% 9/30/2005 3.013 50,000 TREAS NOTE 1.625% 9/30/2005 3.013 50,000 4/30/2005 REDEMPTIONS MTN PROCTOR 4.000% 4/30/2005 1.920 10,000 815 441,544.44 1.897 MTN PROCTOR 4.000% 4/30/2005 2.193 15,000 941 871,366.66 2.162 MTN PROCTOR 4.000% 4/30/2005 2.752 8,000 997 613,492.64 2.719 MTN PROCTOR 4.000% 4/30/2005 2.844 9,000 998 713,189.03 2.821 MTN PROCTOR 4.000% 4/30/2005 4.250 37,637 1107 4,832,574.97 4.276 TREAS NOTE 1.625% 4/30/2005 1.449 50,000 730 1,450,917.12 1.449 TREAS NOTE 1.625% 4/30/2005 1.449 50,000 730 1,450,917.12 1.449 TREAS NOTE 1.625% 4/30/2005 1.449 50,000 730 1,450,917.12 1.449 TREAS NOTE 1.625% 4/30/2005 1.449 50,000 730 1,450,917.12 1.449 TREAS NOTE 1.625% 4/30/2005 1.449 50,000 730 1,450,917.12 1.449 TREAS NOTE 1.625% 4/30/2005 1.449 50,000 730 1,450,917.12 1.449 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. c/ Outright purchase against Reverse Repurchase Agreement. h/ Security "SWAP" transactions. 1 Buy back agreement. RRS Reverse Repurchase Agreement. RRP Termination of Reverse Repurchase Agreement. 15 NAME ALAMO Diablo Valley Bank ALHAMBRA TIME DEPOSITS DEPOSIT DATE YIELD 04/08/2005 3.170 PAR MATURITY AMOUNT ($) DATE 4,500, 000.00 10/07/2005 Omni Bank, N.A. 11/12/2004 2.350 2,000,000.00 05/13/2005 Omni Bank, N.A. 02/18/2005 2.630 4,000,000.00 05/20/2005 Omni Bank, N.A. 12/01/2004 2.450 2,000,000.00 06/01/2005 Omni Bank, N.A. 12/17/2004 2.480 2,000,000.00 06/01/2005 Omni Bank, N.A. 03/11/2005 2.800 6,000,000.00 06/10/2005 Omni Bank, N.A. 04/08/2005 2.800 4,000,000.00 07/08/2005 The Bank of East Asia (USA), N.A. 02/09/2005 2.540 3,000,000.00 05/12/2005 The Bank of East Asia (USA), N.A. 04/14/2005 2.830 3,095,000.00 07/14/2005 The Bank of East Asia (USA), N.A. 02/16/2005 2.880 6,000,000.00 08/17/2005 ARROYO GRANDE Mid State Bank and Trust 11/17/2004 2.350 5,000,000.00 05/18/2005 Mid State Bank and Trust 12/10/2004 2.470 5,000,000.00 06/10/2005 Mid State Bank and Trust 01/13/2005 2.710 5,000,000.00 07/14/2005 Mid State Bank and Trust 02/09/2005 2.810 5,000,000.00 08/10/2005 Mid State Bank and Trust 03/10/2005 3.070 5,000,000.00 09/08/2005 Mid State Bank and Trust 04/13/2005 3.170 5,000,000.00 10/12/2005 BREA Pacific Western National Bank 02/02/2005 2.770 4,000,000.00 08/03/2005 CALABASAS First Bank of Beverly Hills, FSB 11/04/2004 2.230 10,000,000.00 05/05/2005 First Bank of Beverly Hills, FSB 12/01/2004 2.450 10,000,000.00 06/01/2005 . First Bank of Beverly Hills, FSB 12/15/2004 2.510 10,000,000.00 06/15/2005 First Bank of Beverly Hills, FSB 03/03/2005 3.050 10,000,000.00 09/01/2005 CAMARILLO First California Bank 12/03/2004 2.470 4,000,000.00 06/03/2005 First California Bank 02/04/2005 2.650 2,000,000.00 06/03/2005 First California Bank 03/23/2005 2.870 6,000,000.00 06/22/2005 First California Bank 01/26/2005 2.720 6,000,000.00 07/27/2005 16 NAME CAMERON PARK Western Sierra National Bank Western Sierra National Bank CHATSWORTH Premier America Credit Union Premier America Credit Union Premier America Credit Union Premier America Credit Union Premier America Credit Union CHICO Tri Counties Bank CITY OF INDUSTRY EverTrust Bank EverTrust Bank EverTrust Bank CONCORD Cal State 9 Credit Union DUBLIN Operating Engineers Local # 3 FCU Operating Engineers Local # 3 FCU Operating Engineers Local # 3 FCU EL CENTRO Rabobank Rabobank Valley Independent Bank Valley Independent Bank Valley Independent Bank EL SEGUNDO First Coastal Bank, N.A. First Coastal Bank, N.A. TIME DEPOSITS DEPOSIT DATE YIELD 01/12/2005 2.670 04/06/2005 3.130 01/19/2005 2.440 02/09/2005 2.550 02/09/2005 2.550 04/07/2005 2.850 04/07/2005 2.850 PAR MATURITY AMOUNT ($) DATE 7,000,000.00 07/13/2005 8,000,000.00 10/05/2005 10,000,000.00 05/06/2005 10,000,000.00 05/12/2005 10,000,000.00 05/12/2005 10,000,000.00 07/07/2005 10,000,000.00 07/07/2005 03/17/2005 2.850 20,000,000.00 06/16/2005 02/02/2005 2.500 5,000,000.00 05/04/2005 03/11/2005 2.780 6,000,000.00 06/10/2005 04/28/2005 2.980 6,000,000.00 07/28/2005 02/23/2005 2.670 10,000,000.00 05/25/2005 12/10/2004 2.450 10,000,000.00 06/10/2005 02/09/2005 2.790 5,000,000.00 08/11/2005 04/06/2005 3.160 5,000,000.00 10/05/2005 04/15/2005 2.840 47,500,000.00 07/15/2005 04/22/2005 2.940 32,500,000.00 07/22/2005 02/04/2005 2.590 25,000,000.00 05/06/2005 03/02/2005 2.820 25,000,000.00 06/02/2005 04/08/2005 2.810 20,000,000.00 07/08/2005 12/01 /2004 2.460 2,000,000.00 06/01 /2005 03/18/2005 3.140 5,000,000.00 09/16/2005 17 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE EL SEGUNDO (continued First Coastal Bank, N.A. 04/21/2005 3.180 2,000,000.00 10/20/2005 Xerox Federal Credit Union 11/17/2004 2.370 20,000,000.00 05/18/2005 Xerox Federal Credit Union 12/02/2004 2.500 20,000,000.00 06/02/2005 Xerox Federal Credit Union 03/14/2005 3.090 7,000,000.00 09/14/2005 FAIRFIELD WestAmerica Bank 02/15/2005 2.580 25,000,000.00 05/18/2005 WestAmerica Bank 02/16/2005 2.580 50,000,000.00 05/18/2005 WestAmerica Bank 04/07/2005 2.840 60,000,000.00 07/07/2005 WestAmerica Bank 04/15/2005 2.830 65,000,000.00 07/15/2005 WestAmerica Bank 04/21/2005 2.950 10,000,000.00 07/20/2005 WestAmerica Bank 04/28/2005 2.980 5,000,000.00 07/28/2005 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 04/20/2005 3.170 40,000,000.00 10/19/2005 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 2.440 85,000,000.00 06/08/2005 02/11/2005 2.820 72,000,000.00 08/12/2005 03/09/2005 3.040 20,000,000.00 09/08/2005 04/01/2005 3.210 78,000,000.00 09/30/2005 03/18/2005 2.820 2,000,000.00 06/17/2005 04/21/2005 2.950 3,000,000.00 07/20/2005 02/16/2005 2.580 90,000,000.00 05/18/2005 03/17/2005 2.850 39,000,000.00 06/16/2005 04/08/2005 2.800 60,000,000.00 07/08/2005 04/15/2005 2.830 105,000,000.00 07/15/2005 18 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE LA JOLLA Silvergate Bank 03/11/2005 2.830 5,000,000.00 06/10/2005 LIVERMORE Valley Community Bank 03/18/2005 3.130 6,000,000.00 09/16/2005 LODI Farmers & Merchants Bk Cen CA 01/06/2005 2.660 25,000,000.00 07/07/2005 Farmers & Merchants Bk Cen CA 04/14/2005 2.820 35,000,000.00 07/14/2005 LOS ANGELES Broadway Federal Bank, FSB 01/07/2005 2.670 2,500,000.00 07/08/2005 Broadway Federal Bank, FSB 03/11/2005 3.080 3,000,000.00 09/09/2005 California National Bank 02/02/2005 2.530 10,000,000.00 05/04/2005 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 Cathay Bank 04/07/2005 3.180 38,000,000.00 10/06/2005 Cathay Bank 04/21/2005 3.170 25,000,000.00 10/20/2005 Cedars Bank 03/30/2005 2.900 10,000,000.00 06/29/2005 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 Center Bank 03/16/2005 3.110 20,000,000.00 09/14/2005 CHB America Bank 02/18/2005 2.900 4,000,000.00 08/19/2005 CHB America Bank 03/02/2005 3.030 4,000,000.00 08/31/2005 CHB America Bank 03/11/2005 3.080 8,000,000.00 09/09/2005 CHB America Bank 04/14/2005 3.190 4,300,000.00 10/13/2005 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 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 04/14/2005 2.820 25,000,000.00 07/14/2005 Hanmi Bank 04/29/2005 2.950 10,000,000.00 07/29/2005 Hanmi Bank 02/03/2005 2.830 40,000,000.00 08/04/2005 Hanmi Bank 03/03/2005 3.040 20,000,000.00 09/01/2005 Hanmi Bank 03/16/2005 3.110 20,000,000.00 09/14/2005 19 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE LOS ANGELES (continued) Manufacturer's Bank 03/23/2005 2.860 25,000,000.00 06/22/2005 Mellon First Business Bank, N.A. 03/17/2005 2.860 50,000,000.00 06/16/2005 Mellon First Business Bank, N.A. 04/15/2005 2.840 50,000,000.00 07/15/2005 Mirae Bank 02/22/2005 2.900 2,500,000.00 08/24/2005 Mirae Bank 03/24/2005 3.150 2,500,000.00 09/22/2005 Mirae Bank 04/15/2005 3.200 4,000,000.00 10/14/2005 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. 03/11/2005 2.800 10,000,000.00 06/10/2005 Nara Bank, N.A. 04/14/2005 2.820 5,000,000.00 07/14/2005 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 Nara Bank, N.A. 04/21/2005 3.170 25,000,000.00 10/20/2005 One United Bank 12/08/2004 2.450 10,000,000.00 06/08/2005 One United Bank 04/14/2005 2.830 5,000,000.00 07/14/2005 One United Bank 03/24/2005 3.160 5,000,000.00 09/22/2005 Preferred Bank 03/18/2005 2.840 15,000,000.00 06/17/2005 Preferred Bank 03/18/2005 2.840 16,000,000.00 06/17/2005 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 Saehan Bank 03/15/2005 2.990 9,000,000.00 08/19/2005 State Bank of India (California) 11/18/2004 2.400 2,000,000.00 05/19/2005 State Bank of India (California) 04/06/2005 2.800 3,000,000.00 07/07/2005 State Bank of India (California) 04/28/2005 3.240 3,000,000.00 10/27/2005 Western Federal Credit Union 04/22/2005 2.940 30,000,000.00 07/22/2005 Wilshire State Bank 12/01/2004 2.440 22,000,000.00 06/01/2005 Wilshire State Bank 03/18/2005 2.840 8,000,000.00 06/17/2005 Wilshire State Bank 04/15/2005 2.830 19,000,000.00 07/15/2005 Wilshire State Bank 02/09/2005 2.810 8,000,000.00 08/11/2005 Wilshire State Bank 03/02/2005 3.030 30,000,000.00 08/31/2005 Wilshire State Bank 03/04/2005 3.040 6,000,000.00 08/31/2005 MERCED County Bank 03/04/2005 2.810 5,000,000.00 06/03/2005 County Bank 03/10/2005 2.810 10,000,000.00 06/09/2005 County Bank 04/15/2005 2.840 10,000,000.00 07/15/2005 NEWPORT BEACH Orange County Business Bank, N.A. 03/23/2005 2.840 4,000,000.00 06/24/2005 20 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE NEWPORT BEACH (continued) Orange County Business Bank, N.A. 04/07/2005 2.840 4,000,000.00 07/14/2005 Orange County Business Bank, N.A. 04/28/2005 2.960 4,000,000.00 07/28/2005 NORTH HIGHLANDS SAFE Credit Union 02/11/2005 2.580 20,000,000.00 05/13/2005 SAFE Credit Union 04/15/2005 2.840 5,000,000.00 07/15/2005 OAKDALE Oak Valley Community Bank 12/16/2004 2.540 3,500,000.00 06/16/2005 Oak Valley Community Bank 01/14/2005 2.710 2,500,000.00 07/15/2005 OAKLAND Metropolitian Bank 12/02/2004 2.480 1,500,000.00 06/02/2005 Metropolitian Bank 01/21/2005 2.750 1,000,000.00 07/22/2005 Metropolitian Bank 01/27/2005 2.750 1,500,000.00 07/28/2005 Metropolitian Bank 02/24/2005 2.930 1,000,000.00 08/25/2005 Metropolitian Bank 03/23/2005 3.160 2,000,000.00 09/21/2005 ONTARIO Citizens Business Bank 11/05/2004 2.230 30,000,000.00 05/06/2005 Citizens Business Bank 11/18/2004 2.390 30,000,000.00 05/19/2005 Citizens Business Bank 03/04/2005 3.040 25,000,000.00 09/02/2005 Citizens Business Bank 03/23/2005 3.160 30,000,000.00 09/21/2005 Citizens Business Bank 04/01/2005 3.210 25,000,000.00 09/30/2005 PALO ALTO Greater Bay Bank, NA 02/16/2005 2.580 33,500,000.00 05/18/2005 Greater Bay Bank, NA 02/18/2005 2.640 25,000,000.00 05/25/2005 Greater Bay Bank, NA 02/16/2005 2.620 30,000,000.00 06/01/2005 Greater Bay Bank, NA 03/02/2005 2.800 25,000,000.00 06/02/2005 Greater Bay Bank, NA 02/18/2005 2.680 24,000,000.00 06/08/2005 Greater Bay Bank, NA 03/10/2005 2.800 22,000,000.00 06/09/2005 Greater Bay Bank, NA 02/16/2005 2.660 30,000,000.00 06/14/2005 Greater Bay Bank, NA 01/12/2005 2.690 15,000,000.00 07/13/2005 Greater Bay Bank, NA 03/02/2005 3.030 25,000,000.00 08/31/2005 Greater Bay Bank, NA 03/10/2005 3.070 20,000,000.00 09/08/2005 Greater Bay Bank, NA 04/20/2005 3.160 50,000,000.00 10/19/2005 21 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE PALOS VERDES ESTATES 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 Malaga Bank, SSB 03/04/2005 3.040 4,000,000.00 09/02/2005 Malaga Bank, SSB 04/07/2005 3.180 5,000,000.00 10/06/2005 PASADENA Community Bank 11/04/2004 2.230 15,000,000.00 05/05/2005 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 Community Bank 03/16/2005 3.110 10,000,000.00 09/14/2005 Community Bank 04/07/2005 3.180 10,000,000.00 10/06/2005 Community Bank 04/13/2005 3.170 15,000,000.00 10/12/2005 Wescom Credit Union 11/18/2004 2.420 35,000,000.00 05/19/2005 Wescom Credit Union 03/23/2005 2.880 50,000,000.00 06/22/2005 Wescom Credit Union 04/13/2005 2.850 40,000,000.00 07/13/2005 Wescom Credit Union 03/18/2005 3.150 15,000,000.00 09/16/2005 Wescom Credit Union 04/28/2005 3.250 25,000,000.00 10/27/2005 PLACERVILLE El Dorado Savings Bank 06/04/2004 1.920 20,000,000.00 06/03/2005 El Dorado Savings Bank 04/29/2005 3.390 5,000,000.00 04/28/2006 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 PFF Bank and Trust 03/04/2005 3.040 20,000,000.00 09/02/2005 PORTERVILLE Bank of the Sierra 04/21/2005 3.170 10,000,000.00 10/20/2005 RANCHO SANTA FE 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 La Jolla Bank, FSB 03/03/2005 2.780 10,000,000.00 06/03/2005 22 NAME RANCHO SANTA FE (continued) La Jolla Bank, FSB La Jolla Bank, FSB REDWOOD CITY Provident Central Credit Union Provident Central Credit Union ROCKLIN TIME DEPOSITS DEPOSIT DATE YIELD 03/17/2005 2.830 03/24/2005 2.870 12/02/2004 2.460 04/28/2005 3.230 PAR MATURITY AMOUNT ($) DATE 10,000,000.00 06/16/2005 5,000,000.00 06/23/2005 20,000,000.00 06/02/2005 20,000,000.00 10/27/2005 Five Star Bank 02/11/2005 2.560 3,000,000.00 05/13/2005 Five Star Bank 12/16/2004 2.520 3,000,000.00 06/16/2005 Five Star Bank 01/26/2005 2.690 2,000,000.00 07/27/2005 Five Star Bank 03/30/2005 3.200 2,000,000.00 09/28/2005 Five Star Bank 03/30/2005 3.200 10,000,000.00 09/28/2005 RICHMOND The Mechanics Bank 06/09/2004 1.960 10,000,000.00 06/09/2005 The Mechanics Bank 07/08/2004 2.070 10,000,000.00 07/08/2005 The Mechanics Bank 01/26/2005 2.710 20,000,000.00 07/27/2005 The Mechanics Bank 08/04/2004 2.180 10,000,000.00 08/04/2005 The Mechanics Bank 09/10/2004 2.180 10,000,000.00 09/14/2005 The Mechanics Bank 10/15/2004 2.250 10,000,000.00 10/14/2005 The Mechanics Bank 04/21/2005 3.180 10,000,000.00 10/20/2005 The Mechanics Bank 10/29/2004 2.320 10,000,000.00 10/28/2005 The Mechanics Bank 11/05/2004 2.380 10,000,000.00 11/04/2005 The Mechanics Bank 03/03/2005 3.250 10,000,000.00 03/03/2006 The Mechanics Bank 04/01/2005 3.490 10,000,000.00 04/05/2006 RIVERSIDE Provident Savings Bank 02/02/2005 2.780 25,000,000.00 08/03/2005 Provident Savings Bank 03/24/2005 3.150 25,000,000.00 09/22/2005 Provident Savings Bank 04/07/2005 3.180 25,000,000.00 10/06/2005 SACRAMENTO American River Bank 12/16/2004 2.520 1,250,000.00 06/16/2005 American River Bank 01/07/2005 2.650 1,000,000.00 07/08/2005 American River Bank 01/27/2005 2.730 1,500,000.00 07/28/2005 American River Bank 02/25/2005 2.950 2,000,000.00 08/26/2005 American River Bank 03/17/2005 3.120 1,000,000.00 09/08/2005 23 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE SACRAMENTO (continued American River Bank 03/18/2005 3.120 1,250,000.00 09/15/2005 American River Bank 03/24/2005 3.130 2,000,000.00 09/22/2005 American River Bank 04/06/2005 3.150 1,500,000.00 10/05/2005 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 Bank of Sacramento 03/18/2005 3.130 2,000,000.00 09/16/2005 Merchants National Bank of Sacramento 03/22/2005 2.850 2,000,000.00 06/22/2005 Merchants National Bank of Sacramento 01/20/2005 2.730 2,000,000.00 07/21/2005 Merchants National Bank of Sacramento 04/13/2005 3.170 2,000,000.00 10/12/2005 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 River City Bank 04/06/2005 3.160 2,000,000.00 10/05/2005 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. 04/07/2005 2.880 100,000,000.00 07/07/2005 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 02/25/2005 2.660 15,000,000.00 05/27/2005 First Future Credit Union 03/04/2005 3.040 15,000,000.00 09/02/2005 First Future Credit Union 03/16/2005 3.110 8,000,000.00 09/14/2005 First United Bank 02/11/2005 2.820 1,000,000.00 08/12/2005 First United Bank 04/14/2005 3.210 2,000,000.00 10/13/2005 Mission Federal Credit Union 01/13/2005 2.720 10,000,000.00 07/14/2005 Mission Federal Credit Union 03/02/2005 3.040 10,000,000.00 08/31/2005 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 12/03/2004 2.460 2,000,000.00 06/03/2005 America California Bank 04/07/2005 2.820 6,000,000.00 07/07/2005 Citibank (West), FSB 04/14/2005 2.830 100,000,000.00 07/14/2005 Citibank (West), FSB 04/21/2005 2.960 100,000,000.00 07/20/2005 Citibank (West), FSB 04/07/2005 3.180 150,000,000.00 10/06/2005 24 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT (S) DATE SAN FRANCISCO (continued Citibank (West), FSB 04/27/2005 3.200 50,000,000.00 10/26/2005 Oceanic Bank 09/10/2004 2.160 4,000,000.00 09/13/2005 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 Trans Pacific National Bank 03/02/2005 3.040 1,000,000.00 08/31/2005 Trans Pacific National Bank 03/24/2005 3.160 1,000,000.00 09/22/2005 Trans Pacific National Bank 04/13/2005 3.180 1,000,000.00 10/12/2005 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 03/11/2005 2.800 25,000,000.00 06/10/2005 United Commercial Bank 03/18/2005 2.840 65,000,000.00 06/17/2005 United Commercial Bank 01/13/2005 2.710 55,000,000.00 07/14/2005 United Commercial Bank 04/14/2005 2.820 90,000,000.00 07/14/2005 United Commercial Bank 04/27/2005 2.950 40,000,000.00 07/27/2005 SAN JOSE Comerica Bank 04/08/2005 3.150 50,000,000.00 10/07/2005 Comerica Bank 04/27/2005 3.190 25,000,000.00 10/26/2005 Heritage Bank of Commerce 02/09/2005 2.820 4,000,000.00 08/10/2005 Meriwest Credit Union 01/20/2005 2.740 5,000,000.00 07/21/2005 Meriwest Credit Union 03/16/2005 3.120 5,000,000.00 09/14/2005 Meriwest Credit Union 04/13/2005 3.180 10,000,000.00 10/12/2005 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 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 First Bank Of San Luis Obispo 03/16/2005 3.110 7,000,000.00 09/14/2005 First Bank Of San Luis Obispo 03/25/2005 3.190 5,000,000.00 09/23/2005 Mission Community Bank 12/09/2004 2.480 1,000,000.00 06/09/2005 Mission Community Bank 03/03/2005 3.020 1,000,000.00 09/01/2005 Mission Community Bank 04/06/2005 3.130 2,500,000.00 10/05/2005 Mission Community Bank 04/27/2005 3.170 2,500,000.00 10/26/2005 San Luis Trust Bank 04/20/2005 3.120 1,700,000.00 10/19/2005 25 NAME SAN MARINO East West Bank East West Bank East West Bank East West Bank East West Bank East West Bank SANTA ROSA National Bank of the Redwoods Summit State Bank SONORA Central California Bank STOCKTON Pacific State Bank Pacific State Bank Washington Mutual Bank, FA Washington Mutual Bank, FA Washington Mutual Bank, FA TORRANCE China Trust Bank (USA) China Trust Bank (USA) China Trust Bank (USA) China Trust Bank (USA) TRACY Service 1st Bank VACAVILLE Travis Credit Union TIME DEPOSITS DEPOSIT DATE YIELD 02/04/2005 2.570 01 /07/2005 2.670 02/17/2005 2.890 02/23/2005 2.930 03/11/2005 3.080 04/13/2005 3.170 02/09/2005 2.520 04/29/2005 2.920 03/25/2005 3.170 01/06/2005 2.640 04/06/2005 3.130 12/15/2004 2.510 01 /20/2005 2.740 02/18/2005 2.910 02/11/2005 2.580 03/11/2005 2.800 04/15/2005 2.830 04/22/2005 2.930 12/16/2004 2.550 PAR MATURITY AMOUNT ($) DATE 35,000,000.00 05/06/2005 50,000,000.00 07/08/2005 38,000,000.00 08/18/2005 25,000,000.00 08/24/2005 85,000,000.00 09/09/2005 42 , 000, 000.00 10/ 12/2005 5,000,000.00 05/11/2005 4,000,000.00 07/29/2005 5,000,000.00 09/23/2005 1,000,000.00 07/07/2005 1,000,000.00 10/05/2005 45,000,000.00 06/15/2005 75,000,000.00 07/21/2005 60,000,000.00 08/19/2005 20,000,000.00 05/13/2005 35,000,000.00 06/10/2005 40,000,000.00 07/15/2005 30,000,000.00 07/22/2005 2,000,000.00 06/16/2005 12/01/2004 2.430 40,000,000.00 06/01/2005 TIME DEPOSITS DEPOSIT PAR MATURITY NAME DATE YIELD AMOUNT ($) DATE WALNUT CREEK Bank of the West 02/18/2005 2.630 242,000,000.00 05/20/2005 Bank of the West 03/17/2005 2.850 82,000,000.00 06/16/2005 Bank of the West 01/14/2005 2.710 134,000,000.00 07/15/2005 Bank of the West 04/29/2005 2.950 176,500,000.00 07/29/2005 WHITTIER Banco Popular Banco Popular Quaker City Bank TOTAL TIME DEPOSITS APRIL 2005 02/14/2005 2.840 04/14/2005 3.220 01 /28/2005 2.770 27 25,000,000.00 08/17/2005 24,000,000.00 10/13/2005 16,000,000.00 07/29/2005 6,833,495,000.00 BANK DEMAND DEPOSITS April 2005 ($ in thousands) DAILY BALANCES DAY OF BALANCES WARRANTS MONTH PER BANKS OUTSTANDING 1 $ 1,146,007 $ 3,353,840 2 1,146,007 3,353,840 3 1,146,007 3,353,840 4 815,970 2,618,957 5 712,341 2,551,960 6 577,097 2,472,451 7 303,887 2,615,596 8 280,829 2,422,719 9 280,829 2,422,719 10 280,829 2,422,719 11 422,009 2,385,192 12 559,544 2,123,976 13 500,840 2,003,073 14 379,666 2,932,729 15 627,195 3,122,654 16 627,195 3,125,869 17 627,195 3,125,869 18 1,052,378 2,970,077 19 557,"0 2,896,586 20 535,313 2,560,745 21 257,507 2,535,528 22 560,152 2,318,923 23 560,152 2,318,923 24 560,152 2,318,923 25 113,728 2,240,010 26 640,560 2,303,277 27 788,566 2,289,958 28 1,274,380 2,456,463 29 883,824 2,730,823 30 883,824 2,735,340 al AVERAGE DOLLAR DAYS $ 636,714 — The prescribed bank balance for April was $701,427. This consisted of $407,679 in compensating balances for services, balances for uncollected funds of $298,010 and a deduction of $4,262 for April delayed deposit credit. 27 DESIGNATION BY POOLED MONEY INVESTMENT BOARD OF TREASURY POOLED MONEY INVESTMENTS AND DEPOSITS No. 1670 In accordance with sections 16480 through 16480.8 of the Government Code, the Pooled Money Investment Board, at its meeting on April 20, 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 Government Code, it is the intent that the money available for deposit or investment be deposited in bank accounts and savings and loan associations or invested in securities in such a manner so as to realize the maximum return consistent with safe and prudent treasury management, and the Board does hereby designate the amount of money available for deposit in bank accounts, savings and loan asso6 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 $ 407,679,000 The active noninterest-bearing bank accounts designation constitutes a calendar month average balance. For purposes of computing the compensating balances, the Treasurer shall exclude from the daily balances any amounts contained therein as a result of nondelivery of securities purchased for "cash" for the Pooled Money Investment Account and shall adjust for any deposits not credited by the bank as of the date of deposit. The balances in such accounts may fall below the above amount provided that the balances computed by dividing the sum of daily balances of that calendar month by the number of days in the calendar month reasonably approximates that amount. The balances may exceed this amount during heavy collection periods or in anticipation of large impending warrant presentations to the Treasury, but the balances are to be maintained in such a manner as to realize the maximum return consistent with safe and prudent treasury management. 2. In accordance with law, for investment in securities authorized by section 16430, Government Code, or in term interest - bearing deposits in banks and savings and loan associations as follows: Time Deposits in Various Financial Institutions In Securities (sections 16503a Estimated From To Transactions (section 16430r and 16602)" Total ( 1) 4/18/2005 4/22/2005 $ 1,890,000,000 $ 45,740,505,000 $ 6,754,495,000 $ 52,495,000,000 (2) 4/25/2005 4/29/2005 $ 2,469,800,000 $ 48,210,305,000 $ 6,754,495,000 $ 54,964,800,000 (3) 5/2/2005 5/6/2005 $ (749,600,000) $ 47,460,705,000 $ 6,754,495,000 $ 54,215,200,000 (4) 5/9/2005 5/13/2005 $ 131,000,000 $ 47,591,705,000 $ 6,754,495,000 $ 54,346,200,000 (5) 5/16/2005 5/20/2005 $ 669,300,000 $ 48,261,005,000 $ 6,754,495,000 $ 55,015,500,000 (6) 5/23/2005 5/27/2005 $ (181,800,000) $ 48,079,205,000 $ 6,754,495,000 $ 54,833,700,000 (7) 5/30/2005 6/3/2005 $ (1,680,300,000) $ 46,398,905,000 $ 6,754,495,000 $ 53,153,400,000 (8) 6/6/2005 6/10/2005 $ 180,800,000 $ 46,579,705,000 $ 6,754,495,000 $ 53,334,200,000 (9) 6/13/2005 6/17/2005 $ 2,730,600,000 $ 49,310.305,000 $ 6,754,495,000 $ 56,064,800,000 From any of the amounts specifically designated above, not more than 30 percent in the aggregate may be invested in prime commercial paper under section 16430(e), Govemment 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 $ 407,679,000. Dated: April 20, 2005 . Government Code POOLED MONEY INVESTMENT BOARD: Signatures on file at STO and SCO Chairperson Member Member INVESTMENT ADVISORY BOARD MEETING Meeting Date: July 13, 2005 ITFKA TIT[ F Distribution of Investment Policies for Fiscal Year 2005/2006 BACKGROUND: Correspondence and Written Material: C On June 21, 2005 the City Council approved the Investment Policies for Fiscal Year 2005/2006 which are attached. Based upon Council direction, a minor change was made to the Executive Summary regarding the Portfolio Manager. RECOMMENDATION: 6j7ive and File. n M. Falconer, Finance Director City of La Quminta Investment Policy Fiscal Year 2005-2006 CITY OF LA QUINTA Investment Policy Table of Contents Section Topic Page Executive Summary 2 I General Purpose 4 II Investment Policy 4 III Scope 4 IV Objectives 4 ► Safety No. Liquidity ► Yield ► Diversified Portfolio V Maximum Maturities 6 VI Prudence 6 -- V11 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 XIX Professional Portfolio Manager 16 XX Investment Advisory Board - City of La Quinta 17 XXI Investment Policy Adoption 17 Appendices: A. Summary of Authorized Investments and Limitations 18 B. Municipal Code Ordinance 2.70 - Investment Advisory Board 19 C. Municipal Code Ordinance 3.08 - Investment of Moneys and Funds 20 D. Segregation of Major Investment Responsibilities 22 E. Listing of Approved Financial Institutions 23 _ F. Broker/Dealer Questionnaire and Certification 24 G. Investment Pool Questionnaire 29 H. Request for Proposal for Portfolio Manager 33 - I. Permissible Investment Chart 39 J. Glossary 40 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 4a 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 The City Treasurer may use a professional investment manager engaged by the City to assist the City Treasurer in managing the investment program. Investment responsibilities carry added duties of insuring that investments are made without improper influence or the appearance to a reasonable person of questionable or improper influence. The City of La Quinta Investment Policy maintains a listing of financial institutions which are approved for investment purposes. All Broker/Dealers and financial institutions selected by the Treasurer to provide investment services will be approved by the City Manager subject to City Council approval. The Treasurer will be permitted to invest only in City approved investments up to the maximum allowable percentages or dollar limitations and, where applicable, through the bid process requirements. Authorized investment vehicles and related maximum portfolio positions are listed in Appendix A - Summary of Authorized Investments and Limitations. At least two bids will be required of investments in the authorized _ investment vehicles. Collateralization will be required for Certificates of Deposits in excess of $100,000. -- Collateral will always be held by an independent third party from the institution that sells the Certificates of Deposit to the City. , Evidence of compliance with State Collateralization policies must be supplied to the City and retained by the City - Treasurer. The City of La Quinta Investment Policy shall require that each individual investment have a maximum maturity of two years unless specific approval is authorized by the City Council, 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 P P.O. Box 1504 LA QUINTA, CALIFORNIA 92247-1504 78-495 CALLE TAMPICO LA QUINTA, CALIFORNIA 92253 City of La Quinta Statement of Investment Policy July 1, 2005 through June 21, 2006 (760) 7 7 7 - 7 0 0 0 FAX (760) 777-7101 Adopted by the City Council on June 21, 2005 I GENERAL PURPOSE The general purpose of this document is to provide the rules and standards users must follow in administering the City of La Quinta cash investments. 11 INVESTMENT POLICY It is the policy of the City of La Quinta to invest public funds in a manner which will provide a diversified portfolio with safety of principal as the primary objective while meeting daily cash flow demands with the highest investment return. In addition, the Investment Policy will conform to all State and local statutes governing the investment of public funds. 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 ON. 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 4 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 maybe invested in U.S. Treasury bills, notes and bonds maturing between 2 and 5 years. For all other funds, investments are limited to two years maximum maturity. VI PRUDENCE The City shall follow the Uniform Prudent Investor Act as adopted by the State of California in Probate Code Sections 16045 through 16054. Section 16053 sets forth the terms of a prudent person which are as follows: Investments shall be made with judgment and care - under circumstances then prevailing - which persons of prudence, discretion, and intelligence exercise in the professional management of their own affairs, not for speculation, but for investment, - considering the probable safety of their capital as well as the probable income to be derived. VII DELEGATION OF AUTHORITY Authority to manage the City of La Quinta's investment portfolio is derived from the City Ordinance. Management responsibility for the investment program is delegated to the City Treasurer, who shall establish written procedures for the operation of the investment program consistent with the Investment Policy. Procedures should include reference to. safekeeping, wire transfer agreements, banking service contracts, and collateral/depository agreements. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this Investment Policy and the procedures established by the City Treasurer. The City Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The City Manager or Assistant City Manager shall approve in writing all purchases and sales of investments prior to their execution by the City Treasurer. Vlll 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; IN. 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: No. 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 8 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. Commercial Paper - As authorized in Government Code Section 53601(g), 15% of the portfolio may be invested in commercial paper of the, highest rating (A-1 or P-1) as rated by Moody's or Standard and Poor's, with maturities not to exceed 270 days. This percentage may be increased to 30% if the dollar weighted average maturity does not exceed 31 days. There are a number of other qualifications regarding investments in commercial paper based on the financial strength of the corporation and the size of the investment. The City of La Quinta's Investment Policy follows The Government Code with the following additional limitations: (1) maximum maturity per issue of 90 days and .(2) a maximum of $3 million per issuer. Negotiable Certificates of.Deposit.- As authorized in Government Code Section 53601(h)> 30% of. the portfolio may be invested in negotiable certificates of deposit issued by commercial banks and savings and loan associations. The City of La Quinta Investment Policy does not allow investment in Negotiable Certificates of Deposit. Repurchase and Reverse Repurchase Agreements - As authorized in Government Code Section 53601 (i), these investment vehicles are agreements between the local agency and seller for the purchase of government securities to be resold at a specific date and for a specific amount. Repurchase agreements are generally used for short term investments varying from one day to two weeks. There is no legal limitation on the amount of the repurchase agreement. However, the maturity period cannot exceed one year. The market value of securities underlying a repurchase agreement shall be at least 102 % of the funds invested and shall be valued at least quarterly. The City of La Quinta Investment Policy does not allow investment in Repurchase Agreements. The term "reverse repurchase agreement" means. the sale of securities .by the local agency pursuant to an agreement by which the local agency will repurchase such securities on or before a specific date and fora specific amount. As provided in Government Code Section 53635, reverse repurchase agreements require the prior approval of the City Council. The City of La Quinta Investment Policy does not allow investment in Reverse Repurchase Agreements. Corporate Notes - As authorized in Government Code Section 53601 (j), local agencies may invest in corporate notes for a maximum period of five years in an, amount not to exceed 30%,of the agency's portfolio. The notes must be issued by corporations organized and operating in the United States or by depository institutions licensed by the United States or any other state and operating in the United States. The City of La Quinta Investment Policy allows investment in corporate notes authorized by the Government Code with the following limitations: 10 No. Maturities shall conform with Section V. ► Eligible notes shall be regularly quoted and traded in the marketplace. ► Eligible. notes shall be rated "AA" or "AAA" on the date of acquisition. ► 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 110% to 150% depending on the specific security pledged as collateral in accordance with Government Code Section 53652. There are no portfolio limits on the amount or maturity for this investment vehicle. Collateralization will be required for Certificates of Deposits in excess of the FDIC insured amount. The type of collateral is limited to City authorized 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 Collateralization policies must be supplied to the City and retained by the City Treasurer as follows: 1. Certificates of Deposits Insured by the FDIC. The City Treasurer may waive collateralization of a deposit that is - federally insured. 2. Certificates of Deposit in excess of FDIC Limits. The amount not federally insured shall be 1 10% collateralized securities or 150% mortgages market value of that amount of invested funds plus unpaid interest earnings. The City of La Quinta Investment Policy limits the percentage of Certificates of Deposit to 60% of the portfolio. Sweep Accounts - As authorized by the City Council, a U.S. Treasury and/or U.S. Agency Securities Money Market Sweep Account with a $50,000 target balance may be maintained in conjunction with the checking account. Derivatives - The City of La Quinta Investment Policy does not allow investment in derivatives. XI INVESTMENT POOLS There are three (3) types of investment pools: 1) state -run pools, 2) pools that are operated by a political subdivision where allowed by law and the political subdivision is the trustee i.e. County Pool; and 3) pools that are operated for profit by third parties. The City of La Quinta Investment Policy has authorized investment with the State of California's Treasurers Office Local Agency Investment Fund commonly referred to as LAIF. LAIF was organized in 1977 through State Legislation Section 16429.1, 2 and 3. Each LAIF account is restricted to a maximum investable limit of $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. XI11 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 No. 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 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 s' and June 301' 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. XIX PROFESSIONAL PORTFOLIO MANAGER With the Approval of the City Council, the City may engage a professional investment portfolio manager(s to assist the City Treasurer administer the delegated authority to manage and invest the City's Funds. The investment portfolio managers will be approved by City Council based upon a request for proposal process as outlined in Appendix H. 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 Investment Policy. Such managers may be granted the discretion to purchase and sell investment securities in accordance with this Investment Policy as outlined in Appendix I. Such managers shall have: (1) an established professional reputation for asset or investment management; (2) knowledge and working familiarity with State and Federal laws governing and restricting the investment of public funds; (3) substantial experience providing 16 investment management services to local public agencies whose investment policies and portfolio size are similar to those of the City; and (4) professional liability (errors and omissions) insurance and fidelity bonding in such amounts as are required by the City. Such managers shall be registered under the Investment Advisers Act of 1940. XX 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. XXI 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 r 4 _U rn t N i o - U LLU n w ow o In IL In 0 l'1 ll u E F v 3 .n '[ ul E in w a N In - v Z o c _ ro E .O I o K w ^. q'I In o w ° ° a In .E - In > w w P m Q- S ni c a InIn ? n g a o c 'mom : O InE cn .- E E E - m o III o >m 1O 3 EF - `o m r �� In 17 In � � II-E YN_ U U a f U1 LLl lu y. E 3 U w N 4 E - y x n m F E = E A z o E rn ^'oou��i E Ey � O In DEa�i�N y� O[ c w a $ C n o c u � 31 U N _ o u) In ro o f c D o $m m v w U 3 u 3 > c 3 rn oo C.. - 5 5 ov a 8a o fcl w a o �g fig IN eU UE �Lc In Eu .off $� '$In m$ '2• ar a U •E r,, rya 5 a �,E. o oU 'vE TE 3E o� E,�EL .gym E E o _ En_ Un n EF,E y�0 Y E m m 0 aJ U zF a a U N In r N d a ! $ 5 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 Record investment transactions in City's accounting records Investment verification - match broker confirmation to City investment records Reconcile investment records - to accounting records and bank statements Reconcile investment records - to Treasurers Report of investments Security of investments at City Security of investments Outside City Review internal control procedures 22 Financial Services Assistant Accounting Manager or Financial Services Assistant City Treasurer and Financial Services Assistant Financial Services Assistant Accounting Manager Vault Third Party Custodian External Auditor Appendix E LISTING OF APPROVED FINANCIAL INSTITUTIONS 1. Banking Services - Wells Fargo Bank, Government Services, Los Angeles, California 2. Custodian Services - Bank of New York, Los Angeles, - California 3. Deferred Compensation - International City/County Management Association Retirement Corporation 4. Broker/Dealer Services - Merrill Lynch, Los Angeles, CA Morgan Stanley, Los Angeles, CA CitiGroup, San Francisco, 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 maybe 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: Title: Telephone: 6. List all personnel who will be trading with or quoting securities to City employees (attach resume) Name: Title: Telephone: 7. Which of the above personnel have read the City's Investment Policy? 8, Which instruments are offered regularly by your local office? (Must equal 100%) % U.S. Treasuries % Repos % BA's % Reverse Repos % Commercial Paper % CMO's % CD's % Derivatives - % Mutual Funds % Stocks/Equities % Agencies (specify): % Other (specify): 24 9. References -- Please identify your most directly comparable public sector clients in our geographical area. Entity Entity Contact Contact. Telephone ( ) Telephone ( ) Client Since Client Since 10. Have any of your clients ever sustained a loss on a securities transaction arising from a misunderstanding or misrepresentation of the risk characteristics of the instrument? If so, explain. 11. Has your firm or your local office ever been subject to a regulatory or state/ federal agency investigation for alleged improper, fraudulent, disreputable or -- unfair activities related to the sale of securities? Have any of your employees been so investigated? If so, explain. 12. Has a client ever claimed in writing that you were responsible for an investment loss? Yes No If yes, please provide action taken - Has a client ever claimed in writing that your firm was responsible for an investment loss? Yes No If yes, please provide action taken 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? M 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. Please list your NASD Registration Number, 22. Do you have any relatives who work at the City of La Quinta? Yes No If yes, Name and Department 23. Do you maintain an office in California. Yes No 24. Do you maintain an office in La Quinta or Riverside County? Yes No 25. Please enclose the following: - 0 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 Representative Date Title Sales Manager and/or Managing Partner* Date Title Appendix G INVESTMENT POOL QUESTIONNAIRE Note: This Investment Pool Questionnaire was developed by the Government Finance Officers Association (GFOA). Prior to entering a pool, the following questions and issues should be considered. SECURITIES -- Government pools may invest in a broader range of securities than your entity invests in. It is important that you are aware of, and are comfortable with, the securities the pool buys. 1 Does the pool provide a written statement of Investment Policy and objectives? 2. Does the statement contain: a. A description of eligible investment instruments? b. The credit standards for investments? c. The allowable maturity range of investments? d. The maximum allowable dollar weighted average portfolio maturity? e. The limits of portfolio concentration permitted for each type of security? f. The policy on reverse repurchase agreements, options, short sales and futures? 3. Are changes in the policies communicated to the pool participants? 4. Does the pool contain only the types of securities that are permitted by your Investment Policy? INTEREST Interest is not reported in a standard format, so it is important that you know how interest is quoted, calculated and distributed so that you can make comparisons with other investment alternatives. Interest Calculations 1. Does the pool disclose the following about yield calculations: a. The methodology used to calculate interest? (Simple maturity, yield to maturity, etc.) b. The frequency of interest payments? c. How interest is paid? (Credited to principal at the end of the month, each quarter; mailed?) d. How are gains/losses reported? Factored monthly or only when realized? 29 REPORTING 1. Is the yield reported to participants of the pool monthly? (If not, how often?) 2. Are expenses of the pool deducted before quoting the yield? 3. Is the yield generally in line with the market yields for securities in which you usually invest? 4. How often does the pool report, and does that report include the market value of securities? SECURITY The following questions are designed to help you safeguard your funds from loss of principal and loss of market value. 1. Does the pool disclose safekeeping practices? 2. Is the pool subject to audit by an independent auditor? 3. Is a copy of the audit report available to participants? 4. Who makes the portfolio decisions? 5. How does the manager monitor the credit risk of the securities in the pool? 6. Is the pool monitored by someone on the board of a separate neutral party external to the investment function to ensure compliance with written policies? 7. Does the pool have specific policies with regards to the various investment vehicles? a. What are the different investment alternatives? b. What are the policies for each type of investment? 8. Does the pool mark the portfolio to its market value? 9. Does the pool disclose the following about how portfolio securities are valued: a. The frequency with which the portfolio securities are valued? b. The method used to value the portfolio (cost, current value, or some other method)? 30 OPERA TONS 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? -- STATEMENTS 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 discretionary investment management services for City of La Quinta, CA. The portfolio to be managed of the invested assets is estimated to be $10 million and will be invested between 0 — 5 years. 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 ■ Experience of the firm in providing services to public sector entities of similar size and with similar investment objectives ■ Professional experience and qualifications of the individuals assigned to the account ■ Portfolio management resources, investment philosophy and approach ■ Responsiveness to the RFP, communicating an understanding of the overall program and services required ■ Reporting capabilities ■ Fees 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 33 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 -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 Operating Funds Number of Other Restrictive of Clients Clients Funds Governmental $ Governmental $ Pension Non Governmental $ Pension Corporate $ High Net Worth Client $ Endowmental/Founda $ tion 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. 36 -- 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. 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 . Please report on all accounts under $100 million. 2. Please provide performance history for governmental accounts for the last five years. 3. Please provide risk measurements for governmental accounts for the last five years. - 4. Indicate whether your returns are calculated and compiled in accordance with the Association for Investment Management and Research (AIMR/CFA Institute) standards. 5. Do your reports conform to the State of California reporting standards? Are you willing to customize your reports to meet our specifications? 37 6. How will you notify us of investment transactions? 7. 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 m Appendix I :;F CN c m L U E ca N > c c CY m m J O €_T U am zzzzzzzrrr}}}r}}}}} U N O 100000Z Z Z Z Z Z}} Z Z Z Z}}}}}}} m N c O E N N T C T C 0 U � N O a) fa Z E N !O O m U c Q0 Q0 mMI) w d > T N Q U c 0 c C 0 O m c «° v a) C• a) N a) a) d 0 (D a d N .� c o o 0 0 0 0 0 aa o o o o z z 2 z z z z z z z 2 a z z Q Q z Z 'a — Q C O) O U m m N 4 E m O 't-j La w w 8 0- 0) C o 7> eooeC oopO c E C CC C s ya) NppN O >Z Z Z Z z Z Z C14 ZZM E C N y O C N T O N mm m m m a) d a) �o m 0 m m (O m a) m m v co a c O N C N m 0 T T T T O O O ap >� O >. T T n T O T T d m e N LO O L 0N) Z Z Z ((Y z )O LO t0 N (O Z )O C 7 a) L O E m U O C O r L N C a) — c g) E E c =° o B E w �+ U aci m- m m 0 m aci w N FR E Q y d U C Q E N N (a a) m H N 0 aci E �i Q N m ayi ,c poi > �Lm C O 0) L O) > 7« N O m N C O N .L. O fjQQ{ C C j��1 a Z m C E �U a) N J� �Q fa N� pN N C V C> 7 m U m m N a y )y N N~ O a �0CD j N C C 4) L y d) •L N m O) N E lL y N O Q o o E E c c t Y o (a F- Q E 2 Q CDCO rnci���i'cig�mzNm »U��i—U� m€ c O m LO E o x m (D O 0 m o m U a.. E o )n _ 0 a - o m CA Q C) C)O C) CD(pVp N (Op (Op (Op Op (Op (Op AAC) Om A> rN, n m )O )O (O (O )O (O LO (O LO (O 00 LO LO LO (O co Z m H 39 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 40 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. 3. DISCOUNT SECURITIES: Non -interest bearing money market instruments that are issued a discount and redeemed at maturity for full face 4. value, e.g., U.S. Treasury Bills. DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, 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 41. are issued with maturities of less than one year and interest is paid at maturity. 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. FFCBs (Federal Farm Credit Bank) - Debt instruments used to finance the short and intermediate term needs of farmers and the national agricultural industry. They are issued monthly with three- and six-month maturities. The FFCB issues larger issues (one to ten year) on a periodic basis. These issues are highly liquid. FICBs (Federal Intermediate Credit bank Debentures)_- Loans to lending institutions used to finance the short-term and intermediate needs of farmers, such as seasonal production. They are usually issued monthly in minimum denominations of $3,000 with a nine -month maturity. Interest is payable at maturity and is calculated on a 360-day, 30-day month basis. 6. FHLMCs (Federal Home Loan Mortgage Corporation) - a government sponsored entity established in 1970 to provide a secondary market for conventional home mortgages. Morgages are purchased solely from the Federal home Loan Bank System member lending institutions whose deposits are insured by agencies of the United States Government. They are issued for various maturities and in minimum denominations of $10,000. Principal and Interest is paid monthly. Other federal agency issues are Small Business Administration notes (SBAs), Government National Mortgage Association notes (GNMAs), Tennessee Valley Authority notes (TVAs), and Student Loan Association notes (SALLIE-MAEs). FEDERAL DEPOSITOR INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits, currently up to $100,000 per deposit. - FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through -- open -market operations. FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLBs is to liquefy the housing related assets of its members who must purchase stock in their district Bank. FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial, banks, savings and loan associations, 42 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 43 commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commissiontohold 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. 44 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.